Exhibit 10.26
TRADEMARK LICENSE
AND TECHNICAL ASSISTANCE AGREEMENT
AGREEMENT dated this 1st day of November, 1997, by and between GIRBAUD
DESIGN, INC., ("Licensor") a corporation organized and existing under the
laws of the State of Delaware having its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
and
I.C. ▇▇▇▇▇▇ AND COMPANY, L.P. ("Licensee"), a limited partnership
organized and existing under the laws of Delaware having its offices at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Wurzburg Holding S.A. (the "Trademark Owner"), a Luxembourg
corporation having its offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, joins in this Agreement for purposes of Section 1.3 hereof as a
material inducement for Licensee to enter into this Agreement.
W I T N E S S E T H
WHEREAS, Licensor is the holder of all rights to license certain
trademarks and tradenames hereinafter defined (the "Marks") within the
Territory hereinafter defined (the "Territory") which Marks are known
throughout the world in connection with creative design and products of high
quality in various fields of fashion and accessories; and
WHEREAS, Licensor possesses certain technical know-how and expertise with
respect to the design, manufacture, promotion and marketing of the Products,
as said term is defined hereinafter; and
WHEREAS, Licensor, due to the character of its designers and the quality
of its techniques, has acquired recognition and prestige in the field of
fashion design, and Licensee is desirous of consulting and cooperating with
Licensor in the design and marketing of said Products; and
WHEREAS, Licensee wishes a license to engage in the manufacture,
importation, distribution, and sale of certain products that bear the Marks
and to avail itself of the creative design, know-how and quality control
services of Licensor; and
WHEREAS, Licensee is desirous of securing the design and technical
expertise and quality control services of Licensor in connection with
manufacturing and promoting the Products;
WHEREAS, Licensee has requested, and Licensor has agreed to grant to
Licensee, the right and license to use the Marks upon and subject to the
terms and conditions hereinafter set forth;
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NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and undertakings
hereinafter set forth, the parties have agreed as follows:
1. Grant
1.1 Licensor hereby grants to Licensee, and Licensee hereby accepts, for
the term of this Agreement pursuant to the terms, conditions and covenants
hereinafter set forth, an exclusive license (even against Licensor and its
affiliated entities):
(a) To manufacture and/or cause to be manufactured anywhere in the world
and to import, promote, distribute and sell within the Territory with
exclusivity two of Licensor's collections of clothes: a men's "▇▇▇▇"
collection and a men's "Casual" collection, including outerwear as further
described in Exhibit C (the "Products") fashioned after archival and newer
designs created by Licensor or an affiliate thereof and designs provided or
recommended by Licensee and approved by Licensor (which approval shall not be
unreasonably withheld), under the terms and conditions hereinafter set forth
and bearing the trademarks set forth in Exhibit A attached hereto (the
"Marks"). Licensee agrees to label the men's ▇▇▇▇ collection and the men's
Casual collection differently so that there is some product line
differentiation.
(b) To use and display the Marks within the Territory, but solely in
advertising and promoting the Products within the limits herein set forth, to
the specific exclusion of any use of said Marks in combination with any other
trademarks not approved by Licensor or in any form in connection with any
other products or with Licensee's overall business operation (except for
accurate references to the relationship between Licensor and Licensee and as
required by law) or in Licensee's trade or corporate names, except as may
otherwise be provided herein.
(c) To use the know-how, designs, copyrights, and patents, if any, of
Licensor and its affiliates in connection with the manufacture of the
Products.
1.2 The License herein granted shall only extend to products designed,
manufactured, promoted, advertised and sold according to high standards of
quality and in full compliance with the terms and conditions hereof, so as to
maintain, enhance and protect the image and prestige associated with the
Marks.
1.3 The Trademark Owner hereby represents to Licensee (i) that Licensor
has all necessary rights to grant to Licensee the exclusive license in the
Territory to import, promote, distribute and sell the Products in accordance
with the terms of this Agreement and that Trademark Owner will not, directly
or indirectly, take any action or cause others to take any action
inconsistent therewith, (ii) that Licensor, Trademark Owner or an affiliated
entity has or will secure the rights to authorize Licensee to manufacture
products at least in the countries listed in Exhibit B hereto (the
"Manufacturing Countries"), (iii) that Trademark Owner will take all
reasonable and diligent steps in the Territory and the Manufacturing
Countries to obtain and maintain valid and in effect trademark registrations
for the Marks to cover all the Products, and (iv) that it will fully
cooperate with Licensor and Licensee in implementing the provisions of this
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Agreement which relate to the protection of the Marks, in protecting the
rights of Licensee to use the Marks, and in preventing the importation into
the Territory of Products manufactured by or for other licensees of the Marks
outside of the Territory. Licensee will take reasonable and diligent steps
to ensure that its foreign manufacturers do not, directly or indirectly,
distribute any merchandise branded with the Marks which is manufactured for
Licensee to anyone other than Licensee (and its agents) for distribution in
the Territory.
1.4 Notwithstanding any other provision of this Agreement, Licensor
hereby acknowledges that Licensee manufactures, promotes and distributes
other collections of apparel, including but not limited to the branded BOSS
collections and the ▇▇▇▇▇▇▇ Hills Polo Club collections, and that nothing in
this Agreement is intended to restrict in any way Licensee's ability to
conduct those other businesses as presently conducted or as they may be
expanded in the future in Licensee's regular course of business.
1.5 In connection with the development and implementation of the
licensing relationship between the parties and in order to resolve any
potential issues with respect to the labeling of certain of Licensee's Boss
product lines, Licensee acknowledges that Licensor or its affiliates own the
horizontal, rectangular label shown in Exhibit D hereto as positioned on the
fly of pants. In furtherance thereof, Licensee agrees that, commencing with
garment collections to be shown to the trade at the February 1999 Magic Show
(USA) and thereafter, Licensee will not manufacture or distribute any pants
which have on the fly of the pant a label which bears the horizontal
rectangular shape and size of the label shown in Exhibit D hereto. From and
after February 1999, Licensee may continue to distribute existing inventory
of pants bearing the horizontal, rectangular label shown in Exhibit D until
such inventory is exhausted, and Licensee's customers may likewise continue
to sell products bearing such labels which are in their possession or were on
order prior to February 1999 until such inventory is exhausted.
Notwithstanding anything else in this Agreement, Licensor (for itself and its
affiliates) agrees that it will not object to the use by Licensee (and its
affiliates) of the particular labels and markings to be positioned on the fly
of pants which are shown on Exhibit E attached hereto and others not limited
by color, or size (if larger) or design (if similar).
2. Term and Territory
2.1 The initial term of this Agreement shall commence and become
effective as of the date first written above and shall expire on December 31,
1999 unless sooner terminated as hereinafter provided. Licensor shall
coordinate with the prior Licensee of the Products in the Territory for a
smooth transition so that Licensee has the ability to fill orders for
Products from existing and new customers, without any gap in time, as soon as
the former licensee ceases to ship Products, and Licensor shall as soon as
possible (and not later than 30 days after the date hereof) advise Licensee
of the date in which shipments can commence in accordance with this sentence
(which date shall not be later than May 1, 1998). Licensee shall have the
option to
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renew this Agreement for an additional term of three years commencing on
January 1, 2000 and ending on December 31, 2002.
2.2 The License herein granted shall only extend to the United States of
America (Fifty states and the District of Columbia), Puerto Rico and the U.S.
Virgin Islands, and shall include sales made to all branches of the United
States military for distribution in United States military installations
anywhere (the "Territory").
2.3 Licensee shall promptly refer to Licensor all requests or inquiries
relating to the Products from outside the Territory or from within the
Territory if the request or inquiry concerns the possible sale or delivery
outside the Territory. Likewise, Licensor shall (and shall cause its
affiliates to) promptly refer to Licensee all requests or inquiries relating
to the Products from within the Territory or from outside the Territory if
the request or inquiry concerns the possible sale or delivery inside the
Territory.
2.4 Licensee recognizes and acknowledges that similar products may be
under license to other licensees for areas outside the Territory and that no
Products will be sold, directly or for export, shipped to a destination or
delivered by Licensee outside the Territory. Licensee shall not, directly or
indirectly, market, distribute or sell products outside the Territory and
shall use its reasonable commercial efforts to ensure that products it has
sold or distributed are not resold or redistributed outside the Territory,
nor shall Licensee sell or distribute Products to any person or entity which
it knows, has reason to believe or has been notified by Licensor that such
person or entity has exported or intends to export Products from the
Territory. Licensee shall exercise reasonable commercial efforts to ensure
that products manufactured by or for other licensees of the Marks outside the
Territory are not exported to the Territory in violation of Licensee's
exclusivity under this Agreement.
3. Use of the Trademarks
3.1 Licensee shall have the right, during the term of this Agreement, to
the use of the Marks with respect to and only with respect to the Products
and the Territory as defined herein (and in other parts of the world as it
relates to manufacturing Products bearing the Marks). All Products
manufactured, sold and distributed pursuant to this Agreement shall bear one
or more of the Marks except as hereinafter provided and no such Products
shall be sold or otherwise distributed by Licensee under any trademark other
than one or more of the Marks. Licensee shall not use the Marks on or in
connection with products manufactured from designs not approved pursuant to
this Agreement.
3.2 The license herein granted shall apply only to those Marks included
in Exhibit A and shall not include nor be deemed to include any other
trademarks which Licensor or its affiliates and subsidiaries may now or
hereafter own. Licensor agrees during the term of this Agreement to maintain
and uphold the reputation and goodwill attendant to the Marks and not to take
any action which is likely to adversely affect the public image of the Marks
and the quality of the products sold thereunder.
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3.3 Except as provided herein, Licensee further agrees that it will not
reproduce or use the distinguishing styling features or the patterns provided
by Licensor or an affiliate or subsidiary of Licensor for the manufacture and
sale of Products under any label or trademark other than the Marks or for the
Products. Nothing in this Agreement is intended to preclude Licensee from
utilizing in any of its other product collections, any designs, markings,
garment features, coloring, method of fabrication, materials, construction,
or patterns that are common in the trade or merely functional or utilitarian
in nature.
3.4 Sales by Licensee shall be deemed to have been made by Licensor for
purposes of trademark registration and all uses of the Marks by Licensee
shall be deemed to inure to Licensor's benefit. Licensee will not, at any
time, knowingly do or suffer to be done any act or thing which may, in any
way, adversely affect any rights of Licensor in and to the Marks or any
registration thereof. Licensee further agrees that it shall not sell the
Products as miscuts, seconds, irregulars or as otherwise damaged merchandise
except as otherwise permitted under this Agreement, if it were detrimental in
Licensor's reasonable opinion to the goodwill embodied in the Marks.
3.5 Licensor reserves all rights to the Marks except as specifically
granted herein to Licensee and may exercise such rights at any time.
Licensee acknowledges that Licensor is the sole and rightful owner of all
right, title and interest in the Marks and shall not claim any title to the
Marks nor any right to use said Marks except as provided herein. Licensee
shall not question, attack, contest or otherwise impugn the validity of the
Marks or their registration(s), including, but not limited to, in connection
with any action brought seeking to enforce the terms of this Agreement. The
use of the Marks pursuant to or as specified in this Agreement shall be for
the benefit of Licensor, and shall not vest in Licensee any title to or right
or presumptive right to expand or continue such use. Licensee, for itself
and its affiliated companies, covenants and agrees that it shall, at no time,
adopt or use any trademark, tradename or corporate name which is likely to
cause confusion with any of the Marks except with the prior written consent
of Licensor. The provisions of this Paragraph shall survive the expiration
or earlier termination of this Agreement.
3.6 All Products bearing the Marks shall be manufactured exclusively
from designs and specifications provided by Licensor and its affiliates or
otherwise selected by Licensee from the archives of Licensor and its
affiliates or created by Licensee and submitted to Licensor for approval
under the terms of this Agreement (which approval shall not be unreasonably
withheld). No Products other than those manufactured in strict compliance
therewith shall bear the Marks. Licensee shall use only the Marks indicated
in Exhibit A and only in connection with the Products as defined in Article
1. The license herein granted shall confer unto Licensee no proprietary
rights whatsoever in the name Marithe & Francois Girbaud, the Marks, logos or
the goodwill now attached or hereafter to become attached thereto. Without
Limiting Licensee's ability to conduct its other businesses, Licensee shall
only use the Marks as provided herein and in full compliance with the terms
and conditions hereof and only for the duration of this Agreement.
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3.7 Notwithstanding any other provision of this Agreement, Licensor
acknowledges that Licensee intends to select from existing and archival
designs, fabrics and stylistic features associated with the Marks and the
Products and also to recommend to Licensor modifications, updates, and
desirable additions to those designs and stylistic features associated with
the Marks and products bearing the Marks so as to maintain the image for the
Products, the Marks and the tags, labels and other collateral used with the
Products that is suitable for successful distribution in the Territory at
competitive price ranges. Licensor agrees to consider in good faith and
reasonably all such design and stylistic feature recommendations made by
Licensee and, unless they significantly detract from the goodwill associated
with the marks, to approve the implementation of those recommendations by
Licensee subject to Licensor's right to review and approve samples under this
Agreement. Licensee shall have discretion to select designs and stylistic
features associated with former collections of apparel sold under the Marks
for incorporation into Licensee's Products and shall have no obligation to
accept any designs, fabrics or stylistic features that, in licensee's
reasonable opinion, would not be commercially successful in the Territory or
would be too expensive to manufacture in light of the expected marketability.
3.8 Subject to Section 3.7, the use of the Marks, including the specific
design, artwork or graphics thereof and any tags, wrappers, letterhead,
invoices, stationery or other items incorporating the Marks must be in full
compliance with the Licensor's written policies and procedures, as they are
communicated to Licensee from time to time, and is, in each instance, subject
to the prior written approval of Licensor, which approval shall not be
unreasonably withheld. Licensor can only promulgate policies and procedures
that change the guidelines for use of the Marks prospectively and not with
respect to any Products already approved by Licensor or for Product
collections which have been designed. The Marks may only be used by Licensee
as part of an approved label and may only be used in their entirety.
Licensee shall not alter or modify the Marks in any manner whatsoever nor
shall Licensee add to, remove or abbreviate any part or distinctive feature
thereof including script, graphics, colors or logos.
3.9 Licensee shall cooperate fully and in good faith with Licensor for
the purpose of securing, preserving and protecting Licensor's rights in and
to the Marks in the Territory and the Manufacturing Countries. Without
limiting the rights of Licensee under this Agreement, Licensee shall execute,
deliver and/or file any and all documents which Licensor reasonably requests
to make fully effective or to implement the provisions of this Agreement
relating to the ownership or registration of the Marks in the Territory and
Manufacturing Countries. All costs and expenses for any application for
registration or extension of registration with respect to the Products within
the Territory and Manufacturing Countries shall be borne by Licensor.
3.10 Licensee will use the Marks in the Territory strictly in compliance
with the legal requirements obtaining therein. Whenever any of the Marks is
used on any Product or item of packaging or labeling or in any advertisement
or other promotion material, it must be followed, in the case of a registered
trademark by the registration symbol, i.e. -Registered Trademark-, and in the
case of all other trademarks by the symbol -TM-, or other appropriate symbols
of similar import acceptable to Licensor. Licensee shall duly display all
other notices with respect to the Marks on the Products
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and otherwise as are or may be required by the trademark laws and regulations
applicable within the Territory or any portion thereof.
3.11 Any copyright, design patent or any similar industrial or
intellectual property right which exist or may be created in any sketch,
design, sample, print, package, label, tag or the like used uniquely in
connection with the Products shall be the property of Licensor, and if not
created by Licensor they shall be deemed works made by Licensee for hire for
Licensor. Licensee shall place a copyright notice whenever required by
Licensor to protect said copyrights. Licensee shall not knowingly, at any
time, do or cause to be done any act or thing which may adversely affect any
rights of Licensor in such sketches, designs, samples, prints, packages,
labels, tags and the like and will do at Licensor's cost all things
reasonably required by Licensor to preserve and protect said rights. Nothing
herein is intended to preclude Licensee from utilizing in any of its other
product collections, any designs, markings, garment features, coloring,
method of fabrication, materials, construction, or patterns that are not
uniquely associated with Licensor's products or which are otherwise common in
the trade or merely functional in nature, and Licensee shall not assign any
rights thereof to Licensor. Licensee does not warrant that any proprietary
rights will exist in any designs or other materials created by or for it in
connection with the Products.
4. Provision left blank intentionally.
5. Royalties
5.1 Subject to the provisions of Section 1.4 above, Licensee agrees to
exercise its best efforts to promote and maximize sales of the Products
throughout the Territory. Licensee shall conduct its activities pursuant to
this Agreement so as to enhance the goodwill and reputation of the Marks and
shall not engage in conduct known to be detrimental to the same.
5.2 In consideration of the rights granted to Licensee pursuant to this
Agreement, Licensee shall pay to the Licensor for each Calendar Year during
the Term, or any portion thereof, Royalties in an amount of 6.25% of all Net
Sales (the "Royalties"). The Royalties for close-out sales under Section 5.9
and irregulars shall be 3.0% of Net Sales of the close-out Products. In no
event shall the amount of Royalties (including close-out Royalties) due and
payable for any Calendar Year be less than the minimum amount ("Minimum
Royalties") set forth for each Calendar Year as follows:
Minimum 1998 $1,200,000
1999 $1,500,000
2000 $2,000,000
2001 $2,500,000
2002 $3,000,000
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The term "Calendar Year" shall mean January 1 through December 31 of each
year of the term. For purposes of paying Royalties, the first Calendar Year
of this Agreement commences on January 1, 1998.
5.3 The term "Net Sales" shall mean the invoiced price (excluding sales
tax, insurance and shipping charges) for Products shipped or sold by Licensee
or any of its subsidiaries or affiliates, or authorized sub-licensees, during
the relevant period, less credits granted for Products actually returned and
accepted, and reasonable customary and usual trade discounts and ▇▇▇▇-▇▇▇▇▇
actually granted to non-affiliated customers and an allowance for bad debt.
Bad debt shall consist of any accounts receivable of a customer who is under
a bankruptcy or insolvency proceeding, or which is otherwise uncollected
despite Licensee's collection efforts for at least 120 days after the due
date, and shall be considered a reduction of the invoiced price for Products
only up to an aggregate amount of 1.5% of Net Sales during each Calendar Year
of the term and any renewal of this Agreement. For purposes of calculating
royalties due for any sale, transfer or other distribution of Products made
otherwise than at arm's length, the "Net Sales" price of such Products shall
be deemed to be the "Net Sales" price of a corresponding sale to unaffiliated
independent retailers. The royalties herein provided shall be due and paid on
sales of any and all Products bearing the Marks by Licensee or its
affiliates. Except as may be otherwise provided herein, no deduction shall
be made for any discount, ▇▇▇▇-down, advertising allowance, other allowances
of any kind or for any purpose whatsoever or costs incurred by Licensee.
Royalties shall not be due to Licensor on products sold by Licensee to
Licensor under this Agreement.
5.4 In the event that Licensee sells Products in a currency or
currencies other than United States dollars, the "Net Sales" price, with
respect to such sales, shall be computed on the basis of the average exchange
rates of said currency or currencies into U.S. dollars, as of the close of
business on the last day of each of the three months of each applicable
calendar quarter as published in The Wall Street Journal.
5.5 The Minimum Royalties shall be paid in equal monthly payments on the
last day of each calendar month during the term. Payments for the initial
term will start on January 31, 1998, and there will be equal monthly payments
of $100,000 each, with the last payment for 1998 due on December 31, 1998.
For all other Calendar Years, there will be 12 equal monthly payments each in
the amount of 1/12 of the Minimum Royalties payable for that Calendar Year as
stated above. Actual Royalties shall be paid quarterly within thirty (30)
days of the last day of each calendar quarter with respect to sales of
Products during said calendar quarter. Within 30 days of the end of a
calendar quarter commencing in Calendar Year 1998, Licensee will calculate
actual Royalties owed to Licensor based on actual Net Sales of Products
during the preceding calendar quarter and shall by the 30th day following the
end of the quarter remit to Licensor the difference between the total
Royalties paid during the calendar quarter as Minimum Royalties and the
actual Royalties due for that quarter. If the Minimum Royalties are greater
than the actual Royalties due in any quarter, then Licensee shall not owe
Licensor any further payments for that calendar quarter. There will be no
deductions or set offs from any payments whatsoever, unless agreed to by the
parties.
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5.6 Licensee shall, within thirty (30) days of the end of each calendar
quarter and within ninety (90) days of the end of each Calendar Year during
the term hereof, provide Licensor with a certified statement of sales of the
Products during the immediately preceding calendar quarter or Calendar Year,
as the case may be. Said statement shall be signed by a duly authorized
officer of the Licensee and be certified by said officer as true and
accurate. Said statement shall conform to a format agreed upon between the
parties and, at the option of Licensor, be subdivided by Product.
5.7 All royalties payable hereunder shall be paid directly to a bank
designated by Licensor, in writing, as depositary (the "Depositary").
5.8 Late payments of royalties shall bear interest at the Citibank,
N.A., New York prime rate plus 3% per annum, but, in no event shall exceed
the maximum rate permitted under applicable law.
5.9 For the purpose of this Agreement, close-outs are defined as
Products sold at a reduction of twenty (20%) percent or greater from
Licensee's regular full list price of such Products and Licensee acknowledges
that the excessive or indiscriminate disposal of close-outs may adversely
affect the prestige attached to the Marks. Licensee shall therefore exercise
its reasonable efforts to plan and conduct its manufacturing and sales
operations with a view to limiting the quantity of close-outs and to
disposing of all Products through normal channels of distribution and
otherwise only through stores specialized in high quality close-outs,
including outlets, such as ▇▇▇▇ Stores, T.J. Maxx, Filene's Basement, and the
like, that offer for sale other similar designer labels. All sales of
close-outs shall comply with the terms specified herein.
5.10 Only genuine end-of-season close-outs may be sold under the label,
or with any reference to the Marks. No close-outs shall be shipped until at
least ninety (90) days shall have elapsed from the date of the first
substantial delivery by Licensee of a season's collection of which it is a
part.
5.11 For purposes of calculating Royalties, the Net Sales price of such
authorized close-out sales shall be based on the actual reduced Net Sales
price for said Products. On excessive close-out sales (which shall be
defined as close out sales equivalent to more than 30% of Net Sales for the
first Calendar Year of this Agreement and to more than 10% for any subsequent
Calendar Year of this Agreement), the royalties shall be computed at the
normal Net Sales price as applied to the initial standard (i.e.
non-close-out) selling price of the Product. Within sixty (60) days of the
close of each calendar quarter and within ninety (90) days of the close of
each Calendar Year, Licensee shall furnish to Licensor a statement setting
forth the amount of total regular sales and total close-out sales. At the
option of Licensor, said statement shall be subdivided by Product class.
5.12 Receipt or acceptance by Licensor of any royalty payments due
hereunder, in an amount or amounts which are less than amount or amounts due,
shall not constitute a waiver of Licensor's rights in or to the balance
thereof which shall remain due and payable pursuant to the
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terms of this Agreement. Any excess Royalties paid by Licensee to Licensor
hereunder during any Calendar Year which were paid in error shall be counted
as a credit against future Royalties due to Licensor.
5.13 Licensee shall provide Licensor for each calendar quarter within
forty-five (45) days of the end of the preceding calendar quarter, reports
setting forth in reasonable detail sales by U.S. dollars and unit shipments
with respect to each product collection and models in each product
collection, aggregate sales to regular price customers, off-price customers,
large retailers, specialty retailers and sales by significant geographic
segments. Such report shall be in accordance with Licensee's current
reporting capabilities and format.
6. Designs and Technical Assistance
6.1 Licensor shall provide Licensee with recommendations for a full and
varied collection of Products (as a "collection" is customarily defined in
the trade) for each of the four seasons (fall, winter, spring, summer) that
Licensor in consultation with Licensee and subject to Section 3.7 above,
shall deem appropriate for sale in the Territory. Licensor shall develop
each seasonal collection in a timely manner so that Licensee shall have
sufficient time to produce the Products but in any event in accordance with
the following minimum lead times:
Collection Delivery Date by Licensor
Fall August 15
Winter November 15
Spring February 15
Summer May 15
6.2 The recommended collection will contain a basic core offering of
jeans and shirts in addition to a casual informal sportswear line of tops,
bottoms and outerwear pieces designed to be worn separately or collectively.
Licensor will be conscious in its design and selection of the Products for
the Territory as to the cost and commercial availability of the raw
materials, the degree and sophistication of the construction, the cost of
manufacturing, and the current fashion trends in vogue with the target
customers in the Territory. The final collections shall be determined by
Licensor and Licensee in close consultation with each other, with the final
approval authority residing in Licensor who shall act in good faith in
considering Licensee's garment proposals and Licensee's concern's with any
designs or features proposed by Licensor.
6.3 Subject to the rights of Licensee under Section 3.7, Licensor shall
make available to Licensee in New York, on a basis sufficiently timely to
meet scheduled deliveries to customers as stated in section 6.1 above, such
samples, patterns, sketches, photographs, technical specifications and other
materials and information relating to the design and manufacture of the
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Products (all such materials and information are hereinafter referred to as
"Technical Information") as they may create in the normal course of their
operations and as may be reasonably necessary to enable Licensee to carry out
its obligations under this Agreement. Without limiting the generality of the
foregoing, the Technical Information will include the basic cuttings for the
collections, the patterns for each model, a sample of each model in base
size, technical specifications concerning the making and fitting of each
model and information concerning the selection, fabrication and treatment of
materials and fabrics (including the names and references of the
manufacturers) and supplies and accessories (labels, designs, etc.). If
Technical Information, including finished samples, is shown to any third
person with or without the prior written consent of Licensor, Licensee shall
take any and all action necessary to ensure that such third person fully
conforms to all applicable terms and conditions hereof, specifically to avoid
any unauthorized use of the Technical Information. All such Technical
Information shall remain the sole property of Licensor and Licensee shall
have no ownership interest therein subject to the second sentence of Section
3.3 above. Upon the expiration or earlier termination of this Agreement, all
Technical Information in the possession or under the control of Licensee
shall be immediately returned to Licensor. In order to reimburse Licensor
for its costs, and not as a purchase price or with any transfer of ownership,
Licensee shall pay to Licensor an amount equal to two and one half (2.5)
times the ordinary wholesale price for any samples so ordered, F.O.B. place
of shipment, plus shipping costs and duties, of all samples furnished to
Licensee hereunder. Such amounts shall be paid within thirty (30) days of
delivery. Licensor shall not request that Licensee that Licensee make any
material changes or modifications to product designs approved by Licensor
under this Agreement and any such changes shall be prospective only.
6.4 Licensor must keep a current archive of products previously offered
under the Marks in an accessible location in the New York Metropolitan area.
Licensor will maintain in the New York Metropolitan area at least one
representatives of Licensor with authority to act for Licensor under this
Agreement and to facilitate consultation between Licensor and Licensee. Any
archive piece borrowed by Licensee from Licensor shall be logged by Licensor
and must be returned within three (3) months. Licensee acknowledges that the
failure to return any archive piece within the required time shall be
detrimental to Licensor, the Marks and the Products and may subject Licensee
to liability for damages to Licensor. Licensee may remove small pieces of
fabric from archival pieces for the purpose of sourcing the fabric necessary
to manufacture the Products.
6.5 Prior to manufacturing, selling or distributing any Products in any
seasonal collection, Licensee shall make available for inspection in New York by
Licensor CAD (computer aided design) samples (with proposed colors and fabrics)
of each Product in any proposed seasonal collection sufficiently far in advance
of first manufacture to permit Licensee to make any changes requested by
Licensor. Licensee shall notify Licensor of the date on which samples are made
available and of the scheduled first production date. Licensor shall inspect
said samples and either approve or reject the same, in writing, no later than
five (5) days after the inspection date. Any sample not rejected in a timely
fashion shall be deemed approved. Once a
11
sample has been approved, Licensee shall not make any material changes (and
Licensor shall not require any changes) to the design thereof, including
materials, fabrics, colors and quality of workmanship, without Licensor's
prior written approval. All samples of Products submitted to Licensor
pursuant to this Paragraph 6.5 shall be provided at Licensee's sole cost and
expense. As an alternative to the process described herein, Licensee shall
provide to Licensor a calendar of product development, prototyping and
manufacture similar to that which Licensee follows in connection with its
BOSS product lines, and Licensor shall have the right to review and comment
on the Products in New York as they go through development at such points in
the development process noted on the calendar as Licensor deems appropriate,
provided that Licensor must do so while there is sufficient time for Licensee
to make changes requested by Licensor. No Products shall be displayed,
manufactured, distributed (including offerings for samples) and/or sold by
Licensor unless such Products are at least equal in quality, workmanship, fit
and design to the samples previously approved by Licensor in accordance with
this Paragraph 6.5, all materials used shall conform to the specifications
indicated in the Technical Information concerning each Product approved by
Licensor.
6.6 In order to control the production and quality of manufacturing,
Licensor may, at its option, send one (1) representative to Licensee's
facilities, five (5) times a year, (corresponding to the five fashion
seasons). Licensor shall be responsible for the cost of business class
round-trip air fare for such visits from Europe to the United States and for
all lodging and food expenses related to such visits. The Licensee may, at
its option and at its cost, send technicians to Licensor's facilities, in
order to obtain any information necessary to the realization of the
collection (but without prejudice to Licensor's obligation to provide any
necessary Technical Information in New York). Such visit shall be at a date
to be agreed upon by both parties, on or before the delivery of each
collection. Nothing in this Section shall grant Licensor the right to
inspect or visit any portion of any facility where Licensee conducts its
other lines of business.
6.7 Licensee agrees that it shall treat all non-public information
relating to the design, manufacture, marketing and sale of the Products as
Proprietary Information. No Proprietary Information other than manufacturing
specifications and finished samples, shall be shown to any third party
without the prior consent of Licensor. Licensee shall use its reasonable
efforts to ensure that its employees, agents, subcontractors (if any) and
others subject, directly or indirectly, to its control, do not disclose or
make any unauthorized use of any Technical Information. Likewise, Licensor
shall treat all non-public information relating to the manufacture, sourcing,
marketing, forecasts and sale of the Products by Licensee and its agents as
Proprietary Information of Licensee. No Proprietary Information shall be
disclosed to any third party or used for any purpose not related to this
Agreement by Licensee or its agents.
6.8 Subject to the other provisions of this Agreement, any Designs and
other materials provided or approved by Licensor for use under this Agreement
shall remain the property of Licensor and are licensed hereunder solely and
exclusively for use in connection with the manufacture and sale of the
Products in the Territory. Licensor may use and permit others to use
12
said Designs and other material in any manner they desire, provided that such
use does not conflict with any rights granted to Licensee hereunder.
Licensee specifically acknowledges that such Designs and other materials may
be used by Licensor and other licensees on the Products in jurisdictions
outside the Territory and on products other than Products anywhere in the
world.
6.9 Licensee shall take all reasonable precautions to protect the
secrecy of the materials, samples, designs and Technical Information
described in this Article 6 prior to their commercial distribution or the
showing of samples for sale.
6.10 (a) In order to maintain the distinctiveness of the image, quality
and special characteristics of the Products, Licensor may recommend, but not
require, that Licensee use fabrics and yarns produced by manufacturers
specified by Licensor, so long as the quality of products and price and
reasonable delivery terms shall be equivalent to those offered by other
manufacturers. When Licensee elects to deal with such manufacturers, it shall
also use its reasonable commercial efforts to maintain a good commercial
relationship with these manufacturers. In this regard, Licensee undertakes,
except in the case of defective, low quality or untimely goods, not to make
any changes or cancellations of orders of such fabrics and yarns contrary to
commercial usage.
(b) Certain collections of Products or certain particular Products
are and may in the future be fabricated in special fabrics and yarns,
developed by Licensor. These fabrics and yarns carry with them a particular
name and are or will be protected by the registration of a ▇▇▇▇ or
fabrication patent. These fabrics or yarns constitute an essential and
distinctive element of such Products and it is thereby necessary, to protect
the originality and technical components of such fabrics and yarns, to
license a very limited number of manufacturers with the right to use the
technical components and the know-how to produce these fabrics. Licensee
shall consequently deal with certain manufacturers designated by Licensor in
order to manufacture such Products. A copy of orders placed by Licensee with
such manufacturers shall be sent at the same time to Licensor. Licensee
shall be entitled to quality of products and price and delivery terms from
such manufacturers equivalent to those given to other licensees of Licensor
outside the Territory. Licensee undertakes, except in the case of defective,
poor quality or late delivery of goods, to maintain a good commercial
relationship with these manufacturers and not to make any changes or
cancellations of orders of such fabrics and yarns contrary to commercial
usage.
7. Manufacture and Technical Data
7.1 Licensor shall consult with Licensee regarding the manufacturing
process, methods of production, treatment, fabrics and technical
specifications necessary for the production of high quality products from
designs approved by Licensor. All such information shall be strictly
confidential and shall not be disclosed by Licensee nor its agents and/or
employees without the prior written consent of Licensor.
7.2 The Products shall not be manufactured by anyone other than Licensee
and/or quality manufacturers chosen by Licensee. Licensee shall take
reasonable and diligent steps
13
necessary to ensure that such manufacturer fully conforms to all applicable
terms and conditions hereof, that said manufacturer produces only those
Products specifically ordered by Licensee and in the quantities ordered
without over-runs or extra labels, and, that said manufacturer controls the
manufacture and production to avoid any possible use that might be
detrimental to the Marks, or unauthorized use of the Technical Information.
7.3 Licensor reserves the right to require Licensee to terminate a
manufacturer whose workmanship has suffered, in the reasonable opinion of
Licensor, a deterioration in quality which is not satisfactorily corrected
within thirty (30) days after notice thereof to Licensee, or any manufacturer
who, in Licensor's reasonable opinion fails to comply with any provision
hereof or whose conduct, if committed by Licensee, would constitute a breach
of this Agreement, provided that Licensor must make a reasonable allowance
for completion of current orders by the manufacturer.
7.4 No disapproved or otherwise defective Products shall be sold by
Licensee under or with any reference whatsoever to the Marks if it were
detrimental to the Marks. Should any Products manufactured and sold by
Licensee be defective, in the sole opinion of Licensor, Licensee shall, at
its sole cost and expense, take any and all reasonable action necessary to
withdraw and remove said Products from the market through repurchase or
otherwise.
8 Advertising and Promotion
8.1 Throughout the duration of this Agreement, Licensee shall spend upon
advertising of the Products throughout the Territory an annual minimum of
three percent (3%) of Net Sales but no less than $500,000 per year, except
that for the time between the effective date and December 31, 1998, the
minimum advertising expense shall be only $350,000 (the "Minimum Advertising
Expense"). This Minimum Advertising Expense is an independent obligation, and
amounts spent on advertising Licensee shall not be deducted from Royalties
nor from any other amounts due and owing from Licensee to Licensor under this
Agreement.
8.2 Advertising expenses shall be defined as direct expenses for
promotions such as television, radio, printed press and billboards
advertising, celebrity endorsements, event sponsorships, in store point of
sale items, store promotions, and new shop in shop fixturing, at the
exclusion of any other expenses, except that the participation in trade shows
described in Article 10 below shall be included in the Minimum Advertising
Expenses.
8.3 Licensee shall exercise every reasonable effort to promote and
advertise the Products throughout the Territory and shall, prior to the end
of each calendar year, submit to Licensor, in reasonable detail, proposed
plans and budgets for the subsequent annual promotional campaign. Licensor
shall cooperate, as may reasonably be required by Licensee, in furnishing, at
cost, such advertising and promotional material, as is available to Licensor
and which appears suitable, in Licensor's opinion, for the Territory.
Licensor and Licensee shall cooperate closely in the creation and execution
of advertising programs.
14
8.4 Licensee shall submit to Licensor for review, prior to submission to
the advertising agency, any campaign briefing materials, and shall consult
with Licensor before accepting any creative response to such briefing
materials. Visual representation of Products and of the Trademarks shall be
subject to written approval by Licensor (which shall not be unreasonably
withheld) prior to public distribution or display in any medium provided,
however, that any advertising or promotional materials supplied by Licensor
will not require its approval prior to dissemination by Licensee. Except as
otherwise provided in this Agreement, all advertising campaigns in the
Territory shall correspond to the international advertising theme and image
worldwide. Licensor will make available to Licensee all advertising
campaigns produced worldwide. The Licensee shall cause its advertising staff
and/or agency to consult with Licensor's designated advertising agency and/or
creative staff, at least twice a year, for a review of Product image and with
a view toward coordinating and enhancing worldwide advertising strategy.
Approved advertising and promotional materials shall not be disapproved by
Licensor for use within the same campaign.
8.5 Licensee shall submit to Licensor, for its prior approval, not to be
unreasonable withheld, any and all advertising for any medium referring to
the Products before publication or dissemination thereof. Should Licensor
deem said materials appropriate for use outside the Territory, it shall have
the right to use the same, provided, however, any additional costs incurred
thereby, if any, for advertising agency fees, talent, residuals, copyright
clearances, photographers fees, or otherwise shall be paid and secured by
Licensor.
8.6 Licensee shall, on January 31st of each year commencing January 31,
1999, inform Licensor of its expenditures in fulfillment of its advertising
and promotional obligations during the preceding year and shall account to
Licensor for the use thereof.
8.7 Failure on the part of Licensee to make the Minimum Advertising
Expenses required hereunder during any contract year shall constitute a
material breach hereof. Notwithstanding, Licensor may, at its sole
discretion, permit Licensee to cure such breach by either paying to Licensor
the amount by which the actual expenses fell short of the Minimum required
or, by allowing Licensee to increase its advertising obligations for the
immediately subsequent year by an amount equal to the deficiency.
8.8 Notwithstanding any other provision of this Agreement, Licensor
acknowledges and agrees that Licensee may primarily focus its advertising and
promotion of the Products on the Girbaud brand and is not required (i) to
implement or follow as its primary campaign for the Products in the Territory
the "BE" theme adopted by Licensor in other geographic areas, or (ii) to
apply the word "BE" to the Products themselves by either temporary or
permanently affixed means.
8.9 Licensor shall arrange. at Licensee's request, the participation of
one or both of the designers - Marithe and Francois Girbaud - when available,
in certain social events. Such participation shall be at Licensee's expense
with first class hotels and restaurants and first class air travel and local
transportation.
15
9. Sales
9.1 Licensee shall keep Licensor fully and promptly informed of all its
successive price lists and sales policies relating to the Products which
information shall be kept by Licensor in strict confidence and not be used
for any purpose not relating to this Agreement. Licensee hereby acknowledges
that repeated untimely deliveries by Licensee to its customers (except for
force majeure) and/or the delivery, distribution and sale of defective
Products would adversely affect the reputation of the Licensor and the
prestige of the Marks and shall constitute a material breach of this
Agreement.
9.2 All Products manufactured, distributed or sold by Licensee shall be
marked, labeled, packaged, advertised, distributed and sold in accordance
with the terms and conditions of this Agreement and in accordance with all
laws, rules and regulations applicable within the Territory and any
subdivision thereof and, in such a manner as to not mislead or deceive the
public.
10. Trade Shows
10.1 Licensee shall participate in and contribute to the costs and
expenses of two (2) annual fashion shows in the Territory ("the Fashion
Shows"). Licensee shall, within ten (10) business days of receipt of the
invoice pay to Licensor an amount of $75,000 twice per Calendar Year provided
that Licensor actually implements the Fashion Shows. Licensee's obligation
to participate in the Fashion Shows by paying the amounts indicated above
shall be an independent obligation and no sums incurred by Licensee under
this provision shall be deducted from Royalties payable to Licensor, nor from
any other amounts due and owing from Licensee to Licensor under the terms of
this Agreement (except that they will count under Section 8.2 above).
10.2 Licensee may participate, at its discretion, in other major trade
shows, which participation shall be at its sole cost and expense. Any
expenditures so incurred shall be considered advertising expenses pursuant to
Section 8.2 hereof. Should Licensor organize cooperative exhibitions at such
other trade shows in the Territory with its licensees, Licensee shall
participate in such shows and shall share in the cost and expense thereof in
an amount representing its pro rata cost and expense, which amount shall be
agreed upon prior to the event.
11. Access to Books and Records
11.1 Licensee shall, at its sole cost and expense, maintain complete and
accurate sets of books and records (including the originals or copies of
documents supporting entries herein) covering all transactions arising out
of, in connection with or relating to this Agreement.
11.2. Licensor and/or its duly authorized representatives shall have
the right (subject to confidentiality obligations reasonably acceptable to
Licensee) upon five (5) days prior written notice, to examine and audit said
books, records and all other documents in Licensee's possession
16
or under Licensee's control relating to the subject matter of and terms of
this Agreement. Said right shall be exercisable during normal business hours
once each Calendar Year during the term hereof and, once a year during the
three Calendar Years immediately following the expiration or earlier
termination hereof. All said books, records and documents shall be kept and
made accessible during the full term hereof and for three years thereafter.
11.3 Any auditor designated by Licensor to audit and examine Licensee's
books, records and documents, shall be approved in advance by Licensee, such
approval not to be unreasonably withheld. In the event that an audit or
examination of Licensee's books, records and documents reveals an
underpayment of any Royalties due hereunder, Licensee shall immediately pay
to Licensor the amount of such deficiency, plus interest thereon from the
date said Royalties were due at the interest sale rate specified in Paragraph
5.8 hereof.
11.4 In the event that an audit of Licensee's books and records shall
reveal that Licensee's Royalties were underpaid by an amount equal to 5% or
more in any year, Licensee shall bear the cost of said audit.
12. Protection of the Marks
12.1 Licensor represents that the Marks are and shall be during the term
of this Agreement valid and enforceable trademarks in the Territory and the
Manufacturing Countries; that they are owned by Licensor or that Licensor is
authorized and empowered by the registered owner to grant the License herein
contained and that this Agreement does not conflict to any other Agreement to
which Licensor is a party, that the use of the Marks in the Territory will
not infringe upon any other trademark in the Territory and that the Licensor
will defend, indemnify and hold harmless Licensee against any claim against
Licensee (including by its manufacturers and customers) in connection with
the use of the Marks and any damages paid in settlement or as part of a
judgment in such claim (including attorney's fees and costs).
12.2 Licensee shall promptly notify Licensor, in writing, of any
infringement, threatened infringement, or otherwise unauthorized use or
threatened use of the Marks, or confusingly similar trademarks or tradenames,
whether in connection with the Products or otherwise, of which it may have
knowledge or suspicion. In the event of an infringement, threatened
infringement, or otherwise unauthorized use of the Marks, or confusingly
similar trademarks or tradenames in the Territory or Manufacturing Countries,
Licensee shall take such immediate action as may reasonably be necessary to
protect the ▇▇▇▇(s) and the rights of the Licensor therein, until Licensor is
in a position to take whatever action is required (provided that Licensor
must act diligently and promptly). Licensor and Licensee shall mutually
decide what actions shall be taken, including any actions in collaboration
with investigators or U.S. Customs, cease and desist correspondence, and
application for injunctive relief, and shall designate counsel for such
purpose, and, in such case, Licensee shall pay one half of the cost and
expense incurred in such actions in the Territory or Manufacturing Countries,
up to and including an amount equal to 0.25% of Net Sales, payable for each
year during which any such actions are taken, brought and/or pending, within
thirty (30) days of receipt of the documented invoice. Licensor warrants
17
payment of the balance by Licensor. In the event of an award of monetary
damages, the proceeds thereof shall be shared pro rata to the expenses paid
by the parties. Licensee shall abide by regulations, laws and practices
applicable to the Products in force or use in the Territory in order to
safeguard Licensor's rights to the Marks.
12.3 Licensee shall cooperate with Licensor in any action based upon the
unauthorized manufacture, sale and/or use in the Territory or outside the
Territory by any of Licensee's manufacturers and suppliers of Products,
labels and tags bearing the ▇▇▇▇ at Licensee's cost (but without further
liability from Licensee to Licensor provided that Licensee has met its
obligations under this Agreement).
12.4 Upon the expiration or earlier termination of this Agreement,
Licensee shall immediately and absolutely cease and discontinue the use of
the Marks in any manner or form whatsoever subject, however, to the
provisions of Article 14 hereof.
13. Termination
13.1 In the event of a breach of a payment obligation by Licensee under
this Agreement not cured in all material respects within ten (10) days from
the receipt of a written notice thereof, or in the event of any other breach
of this Agreement by Licensee not cured in all material respects within
forty-five (45) days from the date of receipt of written notice thereof, this
Agreement may be terminated by the Licensor. The exercise or failure to
exercise the aforementioned right of termination during an extended period of
time shall not be considered a waiver by Licensor of any right to terminate
this Agreement nor of any other legal or equitable rights and remedies. A
good faith payment dispute shall not deemed a breach of this Agreement by
Licensee. In the event of a breach of this Agreement by Licensor not cured in
all material respects within forty-five (45) days from the date of receipt of
written notice thereof, this Agreement may be terminated by the Licensee.
The exercise or failure to exercise the aforementioned right of termination
during an extended period of time shall not be considered a waiver by
Licensee of any right to terminate this Agreement nor of any other legal or
equitable rights and remedies.
13.2 This Agreement shall immediately terminate and, Licensor shall be
relieved of all liability to Licensee, if Licensee: (i) admits in writing its
inability, or is unable, to pay its debts as they mature, (ii) makes a
general assignment for the benefit of creditors, (iii) is adjudicated a
bankrupt or files a petition or answer, seeking reorganization or an
arrangement with creditors, (iv) files a petition or otherwise avails itself
of any bankruptcy or insolvency law or statute of any country or any state or
subdivision thereof, now or hereafter in effect, (v) suffers a petition or
proceeding filed against it under any provision of the Bankruptcy Act or any
other insolvency law or statute of any country or any state or subdivision
thereof, which petition or proceeding is not dismissed within sixty (60) days
after the commencement thereof, (vi) has a receiver, trustee, custodian,
conservator or other person appointed by any court to take charge of its
affairs or assets or business and such appointment is not vacated or
discharged within sixty (60) days
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thereafter, or (vii) discontinues its business as it relates to the Products
or suspends it, for whatever cause, for more than 120 consecutive days.
14. Remaining Inventory
14.1 Upon the expiration or earlier termination of this Agreement, for
any reason whatsoever, Licensee shall, within thirty (30) days thereof,
deliver to Licensor a complete and accurate schedule of Licensee's inventory
of Products, work in progress and raw materials. Such schedule shall be
prepared as of the close of business on the date of such termination.
14.2 Licensor shall thereupon have the option, exercisable by written
notice delivered to Licensee within thirty (30) days of receipt of the
schedule of inventory, to purchase any or all of the inventory for an amount
equal to Licensee's actual cost, F.O.B. factory or LDP with freight
warehouse, as defined according to Generally Accepted Accounting Principles
of the United States. Should Licensor send such notice, Licensee will ship to
Licensor all of the inventory specified therein, within thirty (30) days of
receipt thereof for inventory located in Licensee's facilities, or, for all
other inventory, promptly thereafter but no more than forty-five (45) days
thereafter. Licensor shall pay Licensee for such inventory within thirty
(30) days of receipt.
14.3 In the event that Licensor elects not to exercise its option to
purchase the remaining inventory, Licensee shall have a period of six (6)
months from the effective date of termination to complete work in progress
and to sell and deliver to other purchasers its remaining inventory under
Licensor's Marks on a non-exclusive basis. Licensee will make its reasonable
effort to sell only to the previous season's customers and to sell only at
regular prices. Royalties on said sales shall be due on the 30th day
following the sale thereof.
14.4 The right provided immediately above shall only apply to the
remaining inventory of Products as are in good saleable condition. Licensee
shall not commence the manufacture of Products during said period and, at the
end of such six (6) month period, shall not sell any of its then remaining
inventory, unless completely debranded by the removal of all labels, tags,
lining, embroidery which identifies the ▇▇▇▇(s).
14.5 If termination is due to the uncured defective quality of the
Products manufactured, imported, sold or distributed by Licensee or the
unauthorized use of Licensor's Marks by Licensee, Licensee shall be deemed to
have waived the provisions of this Article 14 and shall not sell or
distribute any remaining inventory, whatsoever, unless completely debranded.
14.6 All imprints, lettering, stationery, tags, labels, packaging,
lining, embroidery or other reproductions of or reference to the Marks shall
be removed from all inventory remaining after such six (6) month period and
shall be immediately returned to Licensor at no charge or shall be destroyed
together with such remaining inventory which cannot be debranded. Either
operation shall be conducted under the control of Licensor. In the event
that Licensee shall be deemed to have waived the six (6) month inventory
liquidation period, as provided in Paragraph
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14.3 above, the provisions of this Paragraph 14.6 shall be applicable
immediately upon receipt of the Notice of Termination.
14.7 Upon the expiration or earlier termination of this Agreement, for
any reason whatsoever, all rights of Licensee under this Agreement shall
terminate forthwith and all Royalties on sales theretofore made shall become
immediately due and payable. Licensee shall, subject to the provisions of
Paragraph 14.3, immediately discontinue all use of the Marks, any imitation
or simulation thereof or any Marks similar thereto (subject to the second
sentence of section 3.7 above) and shall promptly transfer to Licensor, at
cost, all registrations, filings, and rights with regard to the Marks it may
have had.
14.8 Upon the expiration or earlier termination of this Agreement,
Licensee shall deliver to Licensor, freight and insurance charges at
Licensee's expense unless Licensor's default or its notice of non-renewal has
caused such termination, all technical information, fabric production
information, patterns, markers (provided that markers and graded patterns,
with respect to which Licensee has not recovered the value thereof, shall be
purchased from Licensee by Licensor at original invoice cost), sketches,
designs, colors and the like in its possession or control, designed or
approved by Licensor, and, at cost, all samples, labels, tags, packaging
material, business supplies and advertising and promotional materials bearing
the Marks in Licensee's possession or control.
15. Force Majeure
(a) Neither party shall be responsible for any delay or failure in
performance of any part of this Agreement to the extent that such delay or
failure is caused by fire, flood, explosion, war, embargo, labor problems,
shortage, government requirement, civil or military authority, act of God,
act or omission of carriers or other similar causes beyond its control. If
any such event of force majeure occurs, the party delayed or unable to
perform shall give immediate notice to the other party, and shall resume
performance once the condition ceases with an option in the affected party to
extend the period of this Agreement up to the length of time the condition
endured. During the event of force majeure the parties shall consult with
each other regarding efforts to mitigate the force majeure and continue
performance hereunder.
(b) Licensor shall have the right to terminate this Agreement in whole
or as to a portion thereof without further liability by Licensee.
(i) In the event that the sales operations of Licensee are suspended or
disrupted because of a recognized cause of force majeure (including strikes,
lockouts, war, natural disaster or other similar cause), and should such
suspension or disruption last for a consecutive period of 180 days, unless
Licensee shall forthwith take affirmative steps to rectify the situation,
except that if it is apparent at the time of such suspension or disruption
that it cannot be rectified within the 180 day period, Licensor may terminate
forthwith.
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(ii) In the event that payment to Licensor of any Royalties or other sums
due under this Agreement is prohibited or otherwise made impossible for a
period of ninety (90) days by the laws and/or regulations in effect in the
Territory or any portion thereof.
16. Assignment, Sublicenses
16.1 The License and rights granted hereunder are personal in nature.
Licensee recognizes and acknowledges that Licensor has agreed to contract
with Licensee in reliance upon the experience, reputation and personal
qualities of the management and shareholders of Licensee. Licensor shall
have the right to terminate this Agreement in the event Licensee (or an
authorized assignee or successor under the control of Licensee) shall no
longer be under the control of Licensee. Licensee shall not sell, transfer ,
sublicense or assign its rights and interest hereunder, without the prior
written consent of Licensor, which consent shall not be unreasonably
withheld; provided, however, that Licensee shall be permitted, upon notice to
Licensor, to transfer, sublicense or assign its rights and interest hereunder
to any corporation or other legal entity which is under common control with
Licensee. For the purpose of this Article 16, "Control", shall mean majority
ownership.
16.2 Any sale or other transfer of all or a majority of the outstanding
capital stock of Licensee, excluding sales of capital stock of Licensee in a
public offering that widely distributes such stock, but, including
specifically, without limitation, any merger, consolidation or similar
combination, shall be deemed an assignment of the Licensee's rights, interest
and obligations under this Agreement. However, an assignment to an entity
controlled by Licensee shall be permitted.
16.3 A sale or other transfer of all or substantially all of the assets
of Licensee shall be deemed an assignment of Licensee's rights and interest
under this Agreement, but such an assignment to an entity controlled by
Licensee shall be permitted.
16.4 Licensor shall, with the prior written consent of Licensee, which
consent shall not be unreasonably withheld (except as otherwise provided in
this Article 16) have a right to sell, transfer, lease or assign its rights
and interest in this Agreement, provided that no such consent shall be
required in the case of a sale, transfer, lease or assignment by Licensor to
a corporation in which Licensor beneficially owns a majority of the voting
stock, and provided further, that Licensor hereby agrees and acknowledges
that their services are personal in nature and essential to this Agreement.
Sublicensing of the Licensed Marks, Products and/or Territories shall not be
permitted without the express prior written consent of Licensor (but this
does not prohibit the subcontracting of manufacturing and other production
tasks by Licensee).
17. Arbitration
17.1 Any claim controversy arising out of or relating to this Agreement
shall be resolved by binding arbitration in the City of New York pursuant to
the rules then obtaining of
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the American Arbitration Association. The panel of Arbitrators appointed to
settle any controversy or claim shall consist of three (3) arbitrators
experienced in agreements of this type.
17.2 The arbitrators sitting in any such controversy shall have no power
or jurisdiction to alter or modify any express provision of this Agreement or
to make any award which by its terms effects such alternation or modification.
17.3 The parties consent for award enforcement purposes to the
jurisdiction of the appropriate state and/or federal courts within the State
of New York and further consent that any demand for arbitration or any
process or notice of motion or other application to the court or a judge
thereof, in connection with the same, may be served in or out of the State of
New York, by registered mail or by personal service, provided a reasonable
time for appearance is allowed.
17.4 The provision for arbitration herein shall not be deemed a waiver of
the rights of either party to any provisional remedy provided under state or
federal law. It is agreed that in the event of any violation hereof, the
other party hereto shall have the right to seek a preliminary injunction
enjoining any further violation of this Agreement pending arbitration.
18. Transfer of Existing Business in the Territory
Licensor will undertake all reasonable steps to assist in the transfer of
the existing business in the Territory and in coordinating the transition of
the business from VF and the provision to Licensee of all information in the
possession of VF necessary for Licensee to be able to continue servicing the
existing business under the Marks in the Territory. Licensee accepts no
liability with respect to any conduct of any business under the Marks by any
other entity at any time. Licensor shall indemnify and hold harmless
Licensee and any of its officers, directors, and agents for any claims or
damages (including attorneys' fees and costs) resulting from the conduct of
the business under the Marks by any third party.
19. Relationship
Nothing herein shall create or be deemed to create any agency,
partnership, joint venture or other similar relationship between the parties
hereto. Licensee shall not represent itself as the legal representative,
agent or partner of Licensor and shall have no right to create or assume any
obligations express or implied, on behalf of Licensor.
20. Merger
This Agreement sets forth the entire and complete Agreement among the
parties hereto with respect to its subject matter. This Agreement supersedes
and annuls all prior understandings, arrangements and agreements, oral or
written, between the parties relating to its subject matter. Neither this
Agreement nor any provision hereof may be modified, waived or discharged
except by subsequent written instrument signed by each party.
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21. Severability
If for any reason whatsoever, any provision of this Agreement shall be
declared invalid, illegal or unenforceable, in whole or in part, such
provision shall be ineffective to the extent of such invalidity, illegality
or unenforceability without effecting the validity, legality or
enforceability of the remaining provisions hereof or any other portion
thereof not declared illegal or unenforceable shall remain in full force and
effect.
22. Reversion of Rights and Territories
Upon the expiration or earlier termination of this Agreement and subject
to the other provisions of this Agreement, all rights with respect to the
Marks, Products and Territory shall immediately revert to Licensor.
23. Remedies and Waivers
No failure on the part of the Licensor or Licensee to exercise, and no
delay on its part in exercising any right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies provided
herein are cumulative and are not exclusive of any other rights or remedies
provided by law or in equity.
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24. Notices
All reports, approvals and notices required or permitted to be given
under this Agreement shall, unless specifically provided otherwise in this
Agreement, be deemed to have been given if mailed by (i) registered or
certified mail, return receipt requested (if such service is available),
postage prepaid, or (ii) telecopy, receipt confirmed, and follow up hard copy
by overnight express, to the party concerned at its address indicated below
(or at such other address or addresses as any party hereto may from time to
time respectively designate by notice in writing to the other party).
If to Licensor, to: GIRBAUD DESIGN, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax- ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & Maynadier, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax- ▇▇▇-▇▇▇-▇▇▇▇
If to Licensee, to: I.C. ▇▇▇▇▇▇ AND CO., L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chairman and Co-CEO
Fax-212-695-7579
With a copy to:
I.C. ▇▇▇▇▇▇ and Co., L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President and Co-CEO
Fax- ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Piper & Marbury L.L.P.
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax- ▇▇▇-▇▇▇-▇▇▇▇
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25. Governing Law
This Agreement shall be construed, and interpreted in accordance with and
as governed by the laws of the State of New York, without regard to the
conflict of laws provisions thereof.
26. Right of First Refusal
Should Licensor decide, at its initiative or upon an offer from a third
party, to introduce, market, import, manufacture and/or distribute, or cause
to be introduced, marketed, imported or manufactured, within the Territory,
any of the following additional products: Men's Active, Boys', Women's and
Girls' Jeans, Casual or Active collections, Licensee shall have a right of
First Refusal for a license for these products, with terms and royalty rates
as offered by the third party or otherwise to be discussed and agreed upon at
that time. Without limitation to the previous sentence, Licensor and
Licensee shall, at the option of Licensee, negotiate in good faith in August
1998 the financial terms applicable to an extension of this Agreement to add
Women's ▇▇▇▇ and Women's Casual collections to the Products commencing with
products to be presented at the February 1999 Magic Show in the USA.
27. Indemnification and Insurance
27.1 Licensee does hereby indemnify and hold harmless Licensor from and
against any and all losses, liability, damages and expenses (including
reasonable attorneys fees and expenses) which it may incur or be obligated to
pay as a result of or in defending any action, claim or proceeding against
Licensor, for or by reason of any acts or omissions committed by Licensee or
any of its servants, agents or employees in connection with Licensee's
performance of this Agreement. Licensee shall immediately notify Licensor of
any claim or law suit seeking damages in excess of $100,000. The provisions
of this Paragraph and Licensee's obligations hereunder shall survive the
expiration or earlier termination of this Agreement. In the event that a
judgment, levy, attachment or other seizure is entered against Licensor
arising from any claim as to which indemnification is provided hereunder,
Licensor shall promptly post the necessary bond to prevent execution against
any property of Licensor.
27.2 Licensee shall procure and maintain in full force and effect, at its
sole cost and expense, at all times during which Products are being sold, a
product liability insurance policy with respect to the Products with a limit
of liability of not less that $1,000,000. Such insurance policy shall
include Licensor as an additional insured thereunder and shall provide for at
least thirty (30) days prior written notice to Licensor of the cancellation
or substantial modification thereof. Such insurance may be obtained by
Licensee in conjunction with a policy of products liability insurance which
covers products other than the Products. Licensee will deliver a certificate
of such insurance to Licensor promptly upon issuance of said insurance policy
and shall, from time to time upon reasonable request by Licensor, promptly
furnish to Licensor evidence of the maintenance of said insurance policy.
Likewise, without limitation of its indemnification obligations under this
Agreement, Licensor shall procure and maintain in full force and effect, at
its sole cost and expense, at all times during which Products are being sold,
a
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product liability insurance policy with respect to potential liability under
this Agreement with a limit of liability of not less that $1,000,000.
28. Limitation of Liability
EXCEPT WITH RESPECT TO INDEMNIFICATION OBLIGATIONS DUE TO THIRD PARTIES,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR SIMILAR DAMAGES ARISING FROM A BREACH OF THIS AGREEMENT OR
OF ANY ORDER HEREUNDER EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
29. Plural, Singular
Whenever the singular is used it shall include the plural and vice versa.
30. Headings
The headings of the Articles and Paragraphs of this Agreement are for
convenience only and shall in no way be deemed to limit or affect the terms
or conditions of this Agreement.
31. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed, by their respective duly
authorized officers, this Agreement as of the day and year first above
written.
GIRBAUD DESIGN, INC. I.C. ▇▇▇▇▇▇ AND COMPANY, L.P.
By: /s/ Francois Girbaud By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- ---------------------------
Name: Francois Girbaud Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Title: Chairman & CEO
WURZBURG HOLDING SA
By: /s/ Illegible
-----------------------
Name:
Title:
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▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Trademark Registrations
1) MARITHE & FRANCOIS GIRBAUD
(As registered with the United States Patent and Trademark Office under the
number 1,311,173)
2) GIRBAUD
(As registered with the United States Patent and Trademark Office under the
number 1,885,045)
3) FLY LABEL WITH MARITHE & FRANCOIS GIRBAUD
[LOGO]
(As registered with the United States Patent and Trademark Office under the
number 1,354,187)
4) FLY LABEL WITH PARALLEL LINES
[LOGO]
(As registered with the United States Patent and Trademark Office under the
number 1,495,182)
5) LABEL MARITHE & FRANCOIS GIRBAUD
[LOGO]
(As registered with the United States Patent and Trademark Office under the
number 1,564,635)
6) TEAR-AWAY LABEL
[LOGO]
(As registered with the United States Patent and Trademark Office under the
number 1,810,839)
7) FLY LABEL
(As registered with the United States Patent and Trademark Office under the
number 1,852,439)
8) FLY LABEL (SLANTED)
(As registered with the United States Patent and Trademark Office under the
number 1,872,530)
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EXHIBIT B
MANUFACTURING COUNTRIES
Hong Kong
Indonesia
Macao
Mexico
China
Philippines
Vietnam
Republic of South Korea
Taiwan
Thailand
Bahrain
Bangladesh
Brazil
Botswana
Canada
Colombia
Costa Rica
Dominican Republic
Egypt
Ecuador
El Salvador
Guatemala
Honduras
India
Jamaica
Lesotho
Madagascar
Malaysia
Maldives
Mauritius
Mongolia
Nepal
Oman
Pakistan
Peru
Qatar
Saipan
Saudi Arabia
Seychelles
Singapore
South Africa
Sri Lanka
Turkey
United Arab Emirates
EXHIBIT C
THE PRODUCTS
MEN'S JEANS
A category of jeanswear dress which is color and fabric driven. Its
cornerstone is denim with an emphasis on new washes and new finishes. It
encompasses signature M & F Girbaud styles, as well as, new progressive
shapes. The product offering includes but is not limited to jeans, pants,
knit tops, T-shirts, sweatshirts, caps, sweaters, outerwear, vests, woven
shirts, shorts and jackets and other types of garments typically considered
jeanswear in the industry.
MEN'S CASUAL
A category of relaxed dress for multiple end uses; weekend wear, Casual
Friday etc. Modern comfort driven fabrics and blends offer an alternative to
traditional khakis. Men's Casual includes but is not limited to city casual
pants (including khakis) and jackets, shorts, woven shirts, knit tops,
sweaters, vests, caps, outerwear, and shirts, and other types of garments
typically considered casual wear in the industry.
EXHIBIT D
LABEL TO BE PHASED OUT
7) FLY LABEL
[LOGO]
(As registered with the United States Patent and Trademark Office under the
number 1,852,439)
EXHIBIT E
LABELS FOR SECTION 1.5
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