Exhibit 10.71
December 31, 1999
G.I. Promotion
Via Salvini 5
Milan Italy 20122
Re: GLOBAL SOURCING ARRANGEMENT
Gentlemen:
This letter summarizes the understandings between G.I. Promotions
("GIP"), and I.C. Xxxxxx & Company, L.P. ("Xxxxxx") with respect to
certain global sourcing activities of Xxxxxx involving the production
of garments branded with Xxxxxxx + Xxxxxxxx Xxxxxxx ("GIRBAUD")
trademarks for sale by GIRBAUD licensees other than Xxxxxx.
1. GIP, because of the personality of its founders, its designers, its
original trademark policy and the quality of its techniques, has
acquired worldwide fame and prestige in the fashion design industry and
has crystallized a growing and faithful clientele.
2. Moreover, GIP has the rights to use certain drawings and models for
fashion apparel, particularly those for products distributed under the
name "MARITHE + XXXXXXXX XXXXXXX" and related trademarks (the
"Trademark").
3. Xxxxxx has significant garment production and sourcing experience as
a result of its longstanding manufacturing activities in Asia, the
Middle East, Mexico, Europe and the United States, including with
respect to GIRBAUD-branded apparel which it manufactures for
distribution in the United States, Puerto Rico and certain Central and
South American countries.
4. We understand that GIP wishes Xxxxxx to make its sourcing and
product development expertise available to third parties who have a
Jeans and Casual license from GIP or a GIP affiliate to manufacture and
distribute GIRBAUD-branded garments. Xxxxxx is pleased to make
available such assistance to GIRBAUD-brand licensees. This assistance
may include:
- consultation and coordination regarding product development
- exchange of technical specifications (design, fabrication, trim, fit
and fabric)
- identification of manufacturing sources and agents o negotiation of
product pricing and delivery
- access to product samples and arranging for production of selling
samples
- assistance in quality control
This assistance may be provided by Xxxxxx directly or through
an affiliate or an agent of Xxxxxx. Xxxxxx' assistance applies only to
garment designs which are a part of Xxxxxx' GIRBAUD product line unless
otherwise agreed to by Xxxxxx on a case-by-case basis.
5. With respect to the activities described in this Agreement and
independently of their corporate name, Xxxxxx or an Xxxxxx affiliate
designated by Xxxxxx (such as I.C. Xxxxxx Far East Ltd.) shall trade
under the name "GIRBAUD Global Sourcing" in the form of letterhead
reasonably approved by GIP.
6. GIP and/or its affiliates will make reasonable efforts to encourage
GIRBAUD licensees to take advantage of the product sourcing assistance
available through Xxxxxx.
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Xxxxxx agrees to cooperate with GIP and its affiliates in promoting the
availability of such assistance. The parties will have a meeting at
least every six months while this arrangement is in effect to discuss
the activities undertaken under this arrangement and exchange views on
ways of enhancing the services available to licensees hereunder. GIP or
its affiliates will provide periodic technical and product development
assistance in Hong Kong or another mutually agreed site at least twice
each year.
7. Xxxxxx will be responsible for coordination of product production
with each manufacturer under this arrangement and will provide the
global sourcing assistance on a fee basis based on each
production/manufacturing arrangement established by or on behalf of
Xxxxxx by an agency for a GIRBAUD licensee. Xxxxxx will transmit to the
licensee the pricing per product units requested and the available
delivery schedule, and will obtain manufacturers' confirmation of each
order. Purchase orders will be issued directly by a licensee to the
manufacturer or agent. Licensees will be responsible for opening any
required letters of credit or other evidence of payment availability.
8. In each case, a licensee's product pricing, as quoted to the
licensee by Xxxxxx, will include a "facilitation fee" in the amount of
Seven Percent (7%) of the total FOB pricing for each order shipped to a
licensee. The manufacturer or agent will be responsible for collecting
from licensees amounts due for products including the facilitation fee,
and for remitting the facilitation fee to Xxxxxx or its designee. As
its fee, Xxxxxx or its designee will be entitled to Five Percent (5%)
of the total FOB pricing for each order shipped to a licensee under
this arrangement. GIP or its designee will be entitled to Two Percent
(2%) of the total FOB pricing for each order shipped to a licensee
under this arrangement.
9. Calculation of fees payable to GIP under this arrangement will be on
a net basis, based on amounts actually collected by Xxxxxx or an
affiliate and exclusive of taxes and other governmental levies. Xxxxxx
will provide within 30 days after the end of each calendar quarter a
statement of the activities undertaken under this global sourcing
arrangement such report to be duly verified and signed by a company
officer, including a documented description of the amount and FOB
pricing of all products. GIP may audit once each calendar year on a
confidential basis the records of Xxxxxx and its affiliates with
respect to the payments made under this arrangement to ensure their
accuracy.
10. The product sourcing services described above do not include
on-going supervision with respect to the production of the garments,
design services, garment quality inspections, or product
export/forwarding handling. As requested, Xxxxxx will arrange for an
agent, or an outside service, to provide these services on a
case-by-case basis at the expense of the licensee.
11. Unless otherwise agreed to by Xxxxxx in writing on a case-by case
basis, each licensee is responsible directly for the costs associated
with any agent engaged for the purpose of conducting garment inspection
and other day-to-day activities with respect to the product
manufacturing process in any country and for the payment to the product
source(s) of all production costs and product prices, including charges
for production of selling samples. Xxxxxx will not be extending credit
to licensees and will act only as an independent service contractor
with respect to each licensee to whom it provides product sourcing
assistance.
12. Both parties understand that there is no guarantee that Xxxxxx'
product sourcing assistance will result in all cases in securing
manufacturers for products or in receiving competitive pricing for such
products by the manufacturer. Neither party will make any warranties or
guarantees to licensees with respect to the product sourcing services
and all express and implied warranties, by law or otherwise, are
disclaimed hereby. The parties agree that they will not seek any
consequential, indirect or incidental damages against each other for
any matter arising under this arrangement.
13. Xxxxxx may in its discretion decline to render sourcing assistance
to a GIRBAUD licensee in the event (i) legal, political or financial
conditions reasonably suggest that such activities may expose Xxxxxx or
GIP or their respective affiliates to liability, (ii) the
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licensee imitates the product designs provided by Xxxxxx or otherwise
violates the intellectual properly rights of GIP, (iii) has delinquent
accounts with the manufacturers or an unacceptable payment history, or
(iv) the licensee otherwise acts in a manner that would, in Xxxxxx'
reasonable opinion, damage the reputation or business relationships of
GIP or Xxxxxx.
14. The parties agree that information relating to Xxxxxx'
manufacturing, supply and production sources, including supplier
information, delivery strategies, cost components, production plans and
the terms of this undertaking between the parties are confidential
information of Xxxxxx and its affiliates. As such, the parties will not
disclose such information or any part thereof to the licensees or any
other party. Licensees will not be permitted to place orders directly
with Xxxxxx' manufacturers, agents and suppliers other than through the
processes contemplated hereunder.
15. Any knowledge which Xxxxxx should acquire of the know-how of GIP
and its designers, of its fabric creations, of the treatment and
assembling which constitute trade secrets shall not be used by Xxxxxx
outside the scope of this Agreement, or for the benefit of a third
party (other than Xxxxxx' agents and third manufacturer with respect to
the activities contemplated hereunder) without the prior express
written authorization of GIP.
16. The term of the undertakings described in this letter will commence
on the date of GIP's acceptance of this letter and will end on December
31, 2003 unless sooner terminated as a result of the early termination
of thc license agreement between Xxxxxx and Latitude Licensing, Inc.
(the `License Agreement"), or otherwise by agreement of the parties.
This agreement may be renewed by either party for a period of two years
if that party is not in breach of this Agreement at the time and the
License Agreement has not been terminated.
17. This Agreement may be terminated with immediate effect, by either
party, by written notice sent to the other party, Certified Mail Return
Receipt Requested, this without any legal or other formalities in case
of any default by the other party of any of the obligations under this
agreement that has remained without cure for thirty (30) days, at the
latest, after notification to the defaulting party, via Certified Mail
Return Receipt Requested.
18. Upon the termination of this Agreement for any reason or its
expiration, Xxxxxx agrees to forward to GIP via Certified Mail Return
Receipt Requested a detailed and complete report of pending activities
under this Agreement; and a detailed report of pending orders as of
that date. Upon termination, Xxxxxx may see to completion the
production of products which are subject to accepted orders from
licensees as of the effective date of termination.
19. This Agreement has been executed by G.I. Promotion in consideration
of the implication and expertise of Xxx Xxxxx in the sourcing
activities.
20. This Agreement is controlled and shall be interpreted in accordance
with the laws of the State of New York, excluding its conflict of laws
provisions.
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We are looking forward to a productive relationship as described above.
Sincerely,
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx Xxxxx, Chairman/CEO
I.C. Xxxxxx & Company, Inc., as general partner
Of I.C. Xxxxxx & Company, L.P.
Agreed to:
By: /s/ Xxxxxxx Xxxxxxxxxxx
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G.I. Promotion
Title: President
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Date: 28 Decembre 1999
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