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LICENSING AGREEMENT
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Agreement made BY AND BETWEEN THE UNDERSIGNED:
CELINE, Societe Anonyme, having its registered offices at 00/00 Xxx xx Xxxx
Xxxx, 00000 Xxxxx, entered in the Trade Registry of Paris under number B 572 034
361, represented herein by its President, Xxxxxxx Xxxxxxxx;
PARFUMS CELINE SNC, having its registered offices at 00/00 Xxx xx Xxxx Xxxx,
00000 Xxxxx, entered in the Trade Registry of Paris under number B 398 153 502,
represented herein by its Manager, Xxxxxxx Xxxxxxxx,
hereinafter jointly called "CELINE",
party of the first part,
AND
INTER PARFUMS, Societe Anonyme, having its registered offices at 0 Xxxx Xxxxx
xxx Xxxxxx Xxxxxxx, 00000 Xxxxx, entered in the Trade Registry of Paris under
No. B 350 219 382, represented herein by its President, Xxxxxxxx Xxxxxxx,
hereinafter called "INTER PARFUMS",
party of the second part,
W H E R E A S
CELINE is the owner of the "CELINE" trademark in class 3, a trademark that both
in France and abroad has a prestigious international image and an equally
prestigious international name in the field of up-scale ready-to-wear clothing
and up-scale leather goods;
INTER PARFUMS wishes to exploit the "CELINE" name with a view to creating,
producing and distributing perfumes under that name and consonant with
conditions that reflect the prestige of CELINE and the high-quality reputation
enjoyed by CELINE products;
The parties are desirous of making a joint effort to give the exclusive CELINE
style to the subject products hereof,
NOW, THEREFORE, THE FOLLOWING HAS BEEN STIPULATED AND AGREED:
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ARTICLE 1.- DEFINITIONS:
For purposes hereof, the following terms shall have the meanings indicated:
1.1 "AGREEMENT" means the present licensing agreement and its attachments.
1.2 "PRODUCTS" signifies the perfumes, toilet water, parfums de toilette,
toiletry products derived from the said perfumes that may be or shall
be created by INTER PARFUMS within the framework of the performance of
this Agreement.
1.3 "PRODUCT ENVIRONMENT" means the bottle(s), the jacket(s) or case(s),
the product packaging and the perfume-derived products.
1.4 "TERRITORY" means the entire world including duty-free points-of-sale.
1.5 "TRADEMARK(S)" mean the existing registered trademarks or trademark
applications filed on behalf of CELINE, as listed in Attachment 1. The parties
agree to use this term also for any future trademark registrations and/or
applications filed in the name of CELINE within the framework of the present
Agreement.
1.6 "CONTRACTUAL YEAR" signifies the period between January 1st of a
particular year and December 31st of that same year.
1.7 "RETAILER" signifies any point-of-sale or sales counter that is
qualified to re-sell products bearing the "CELINE" trademark to the
end-consumer.
1.8 "DISTRIBUTOR" means any independent company qualified to re-sell
products bearing the "CELINE" trademark pursuant to a written agreement or
agreements with INTER PARFUMS and retailers in one or more countries.
ARTICLE 2.- PURPOSE OF THE AGREEMENT
2.1 Under the terms hereof, CELINE grants INTER PARFUMS the exclusive right to
use the trademark for creating, producing and marketing the products in the
licensed territory under the conditions defined hereinbelow.
2.2 Within the present context, the use of the term "exclusive" means that for
the entire life of this Agreement, CELINE is prohibited from granting other
licenses related to the creation, production and/or sale of products bearing the
CELINE trademark.
2.3 It is expressly agreed by INTER PARFUMS that CELINE reserves the right to
open boutiques in all countries of the world bearing the name "CELINE". INTER
PARFUMS expressly acknowledges that said boutiques are excluded from the field
of application of the within Agreement.
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However, INTER PARFUMS undertakes to deliver them in accordance with their
demand [sic]. INTER PARFUMS shall keep its distributors duly informed of the
existence of the present exception to exclusivity which INTER PARFUMS may have
passed on to them in their distribution zone. INTER PARFUMS shall sell the
products under this exception at the wholesale price, less [____].
ARTICLE 3.- UNDERTAKINGS OF THE PARTIES
3.1 INTER PARFUMS undertakes to use the present license and pursue an
active production and marketing policy with respect to the products.
3.2 INTER PARFUMS undertakes to see to it that all of the products, as well
as any and all extracts of perfumes or the product components are manufactured
in Europe.
3.3 Distribution Network:
3.3a) INTER PARFUMS undertakes to adopt a selective business policy for the
distribution of the products, and to sell the products at their respective
points-of-sale, at perfume shops and at department stores which meet the
objective criteria set forth for selective distribution.
CELINE acknowledges that it is fully cognizant of the general conditions of
sale, of the standard retail agreement generally used, and of the standard
evaluation report implemented by INTER PARFUMS, an example whereof appears in
Attachment II of this Agreement.
INTER PARFUMS undertakes to establish in the territory a high-performance and
high-level distribution network composed of qualified and professional
distributors who will adhere to the standards and demands of the trademark.
As of the date of signing hereof, INTER PARFUMS does not have the list of agents
and distributors to whom the distribution of the products will be entrusted.
INTER PARFUMS agrees to submit said list to CELINE not later than 9/30/2001, and
thereafter twice a year upon CELINE's simple request within a maximum of thirty
(30) days.
Following a written request received from CELINE, INTER PARFUMS undertakes to
dismiss any distributor or agent who in the opinion of CELINE has failed to
perform a significant or substantial obligation hereof, or otherwise is no
longer adhering to the objective qualitative criteria relative to selective
distribution, which failures might prejudice the trademark and the distribution
network, and consequently the development of product sales.
Any sales made through the distribution network that are not compatible with the
trademark's image are prohibited. More particularly, sales methods such as
door-to-door and home sales, remote sales (including but not limited to
catalogue offerings, telemarketing sales) are considered incompatible with the
image of the trademark.
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The parties likewise agree to exclude Internet sales--within the limits of
applicable statute law--with the exception of those made at the following web
sites existing as of the date of signing hereof, the structure of which is in
conformity with the qualitative criteria of selective distribution:
xxx.xxxxxxx.xx
xxx.xxxxxxxxxxxxxxxxxx.xxx
xxx.xxxxxxx.xxx
xxx.xxxxxx.xxx
it being stipulated that the above list may be extended to other web sites
meeting the objective criteria of selectivity, subject to the prior written
agreement of CELINE.
Any implementation of a sales method plan or plans such as that (those)
described above, is subject to the prior written acceptance of CELINE.
3.3b) Establishment of a stand (or stall) or a shop-in-a-shop.
Stands or so-called "shop-in-a-shop" stores bearing the CELINE name or symbol,
established in a department store or a multi-specialty store, will have to be
structured in accordance with CELINE's directives and architectural design.
All work will be undertaken at the exclusive cost of INTER PARFUMS under its own
responsibility, and utilizing its own decorator. However, all such work shall be
subject to the prior written approval of CELINE.
Prior to undertaking such work, INTER PARFUMS shall furnish CELINE with the
following information:
1. Status of the stand or shop-in-a-shop in the store plan, including all
particulars relative to neighboring or adjacent trademarks and
products;
2. A site plan for the stand or shop-in-a-shop;
3. An existing ceiling plan;
4. An existing lighting plan;
5. Photographs of the existing site;
6. Technical specifications.
Following receipt of this information, CELINE shall supply INTER PARFUMS with a
file spelling out the decor aspect, including the furnishing of the stand or
shop-in-a-shop, which may not be modified without the prior written approval of
CELINE.
Prior to execution of the work, INTER PARFUMS shall submit the following
documents and information to CELINE for written approval:
1. Detailed plans of the stand or shop-in-a-shop;
2. Cross-sectional drawings of the stand or the shop-in-a-shop, including
data on heights, along with cut-away views and floor data;
3. The inception date of the work;
4. The projected opening date of the stand or shop-in-a-shop.
The furnishing or outfitting of the stand or shop-in-a-shop will have to be in
conformity with all specifications embodied in the final plan approved by
CELINE.
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INTER PARFUMS undertakes to renew or replace any decorative items or components
that might deteriorate during the life of this Agreement.
CELINE reserves the right to change its architectural design. INTER PARFUMS
agrees to apply the new architectural design as soon as possible and not later
than six (6) months after a written request has been received from CELINE, which
request will be sent by registered mail with return receipt requested.
3.3c) INTER PARFUMS undertakes to maintain the well-known reputation and
prestige of the trademark through implementation of a marketing policy and sales
methods consonant with the system of selective distribution.
INTER PARFUMS agrees to market the products within a selective distribution
network, and to make available an administrative and marketing structure that is
necessary for ensuring effective management.
INTER PARFUMS agrees to market the products at a price that is consonant with
the image of the CELINE trademark.
The sales price of the products to co-contractors (agents, distributors) will
have to be determined by INTER PARFUMS in such manner that at the final
distribution stage, the sales price of the product conforms to the positioning
defined by CELINE. Product prices will have to be reported to CELINE before
marketing.
3.3d) In order to maintain the image of the CELINE trademark, INTER PARFUMS
agrees to market the products at points-of-sale that meet the objective
qualitative criteria and to use qualified personnel. INTER PARFUMS shall insert
the corresponding clause in all of its contracts made with its distributors or
with retailers.
3.3e) In order to verify that the distribution of the products in the territory
is consonant with the trademark's prestigious image, CELINE may inspect the
points-of-sale or cause them to be inspected. Should there be any points-of-sale
that fail to live up to the stated requirements as defined in the above
paragraph, CELINE may demand that INTER PARFUMS remove the offending
point-of-sale or otherwise cause it to be removed, and to cease all marketing of
the products thereat.
3.4 The parties agree that the reputation of CELINE in the up-scale
ready-to-wear field and in the up-scale leather goods field is the very basis of
the interest that constitutes its trademark; the impact of this well-known
reputation is in effect a substantial component in the positioning of its
trademark in the perfumes sector.
With this in view, CELINE undertakes as a substantial and determining condition
of the present Agreement, without which stipulation this Agreement could not be
concluded by the parties, to regularly reinforce its creative activities in the
fields of ready-to-wear and leather goods, or in any other clothing activity,
all with the objective of sustaining and reinforcing the image and prestige of
the CELINE trademark.
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ARTICLE 4.- PRODUCT MARKETING PLAN
4.1 In the second contract year (2001), INTER PARFUMS undertakes to do all that
is necessary to launch a new perfume, composed of a female line and a male line.
For such purpose, INTER PARFUMS shall submit an appropriate plan to CELINE
during the first contract year (2000).
4.2 INTER PARFUMS agrees to do all that is necessary so that the new perfume
mentioned in 4.1 above, is broadly distributed within the framework of its
launching both in France and overseas.
This marketing plan for the new perfume will be specifically defined between
CELINE and INTER PARFUMS. The final version of this plan will have to be
submitted to CELINE for written approval prior to the implementation of the
plan.
4.3 During this second contract year (2001), INTER PARFUMS undertakes to resume
the management and distribution of the existing "Magic" line, as well as the
inventories owned by PARFUMS CELINE SNC at cost price, as well as the
inventories appearing in the books of said company, and this, within a limit of
[---------------------].
4.4 In the fourth contract year (2003), the parties will come to an agreement on
the development of a second line of perfumes by INTER PARFUMS.
4.5 In the fifth contract year (2004), INTER PARFUMS undertakes to do all that
is necessary for ensuring the marketing of this second line in those territories
where the first line of perfumes has already been launched.
4.6 In the sixth contract year (2005), the parties will come to an agreement on
the new directions for the CELINE trademark based upon the sales results of the
two perfume lines mentioned above.
ARTICLE 5.- TERM
5.1 The within Agreement shall become effective on May 17, 2000, and shall
expire on December 31, 2011, except in the case where Article 5.2 is applied.
5.2 The parties agree that upon expiration of the Agreement on December 31,
2011, and on condition that the total amount of net sales ex-factory for the
year 2008 is equal to or greater than [_____________________], the present
Agreement shall be tacitly renewed for a new 5-year period, i.e., up to December
31, 2016. In such case, the parties will meet to agree upon the guaranteed
minimum royalties to be paid during this new contract period.
5.3 In the event that the total amount of net sales ex-factory for the year 2008
is less than [_____________________], the parties will meet as early as the
beginning of 2009 to decide upon a possible renewal of this Agreement.
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ARTICLE 6.- ROYALTIES
6.1 In consideration of the rights granted to it under this Agreement, INTER
PARFUMS shall pay CELINE an annual royalty of:
o [____] on the part of annual net sales of the products
realized by INTER PARFUMS ranging between
[---------------------];
o [____] on the part of annual net sales of the products
realized by INTER PARFUMS in excess of
[---------------------],
(hereinafter the "proportional royalty").
6.2 The basis used for calculating the "net sales volume" will be:
o The total net xxxxxxxx by INTER PARFUMS (parent company and
subsidiaries) to its customers, including xxxxxxxx for orders
placed by CELINE;
o Taxes not included;
o Less transportation expenses invoiced by INTER PARFUMS to its
customers (within a limit of 5% of the total amount invoiced);
o Less justifiably-unsold products returned (within a limit of
5% of the total amount invoiced).
No deduction may be taken for bad debts or debts that cannot be recovered or any
other cost incurred by INTER PARFUMS.
The parties will exclude from the calculation of sales volume, sales of
advertising materials to the points-of-sale, along with promotional articles, it
being stipulated that the said products and articles may in no case represent
more than ten percent (10%) of the total sales.
Sales made under non-traditional economic conditions by INTER PARFUMS to its
subsidiaries or companies or groups owned directly or indirectly by it, shall
for purposes of computing the royalty be considered as having been made at the
average sales price applicable to retailers in one same country.
Payments shall be made in French Francs.
6.3 INTER PARFUMS undertakes to pay CELINE during the life of this Agreement the
guaranteed minimum royalties (hereinafter the "guaranteed minima) determined in
accordance with the following table:
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============================================= =================================== ======= ==========================================
CONTRACT YEAR
--------------------------------------------- ----------------------------------- ------------------------------------------
1/1/2000 to 12/31/2000 Creation and development of the Creation and development of the product.
product
--------------------------------------------- ----------------------------------- ------------------------------------------
1/1/2001 to 12/31/2001 [____________] taxes not included.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2002 to 12/31/2002 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2001.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2003 to 12/31/2003 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2002.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2004 to 12/31/2004 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2003.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2005 to 12/31/2005 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2004
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2006 to 12/31/2006 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2005.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2007 to 12/31/2007 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2006.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2008 to 12/31/2008 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2007.
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2009 to 12/31/2009 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2008
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2010 to 12/31/2010 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2009
--------------------------------------------- ----------------------------------- ------- ------------------------------------------
1/1/2011 to 12/31/2011 [____________] taxes not included. [____] of the amount of the royalty paid
or in 2010.
============================================= =================================== ======= ==========================================
The parties agree to use the highest figure for guaranteed minima of those set
forth in the table.
Payment of the established guaranteed minima will be made quarterly by INTER
PARFUMS on April 30th, July 31st, October 30th and January 31st of every year.
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It is nonetheless stipulated that the guaranteed minima shall not be due for the
first contract year, given the current efforts being put forth by INTER PARFUMS
with respect to the design and development of the new perfume. The guaranteed
minima shall be due commencing from the second contract year.
The balance of royalties, i.e., the difference between the proportional royalty
as calculated according to what is indicated in Article 6.1 for a given year of
the contract, and the total amount of the guaranteed minima already paid by
INTER PARFUMS for this same contract year, shall be paid by INTER PARFUMS within
thirty (30) days following the close of each annual period.
The payment of the royalties shall be accompanied by the statement called for in
Article 7.2 below.
Any sum paid in arrears shall earn interest at the 3-month EURIBOR rate, plus
interest of five percent (5%).
ARTICLE 7.- ACTIVITY REPORTS AND PROJECTIONS
INTER PARFUMS will have to furnish CELINE with activity reports and projections
in hard copy and/or, to the extent possible, on magnetic media that is
compatible with CELINE's data processing system; the purpose of these activity
reports and projections will allow CELINE:
o To better understand the amount of royalties deriving from the
exploitation of the exclusivity agreement;
o To better audit or monitor any changes in this exploitation, both in
terms of net sales volume and in terms of advertising and promotional
support of the activity within the territory and for the different
products.
These reports and projections will have to be prepared on the appropriate forms
and be submitted in accordance with the schedules defined below.
7.1 Quarterly Statement of Sales and Advertising Expenses:
INTER PARFUMS undertakes to submit to CELINE within thirty (30) days following
the close of the calendar quarter, a quarterly statement of sales and
advertising expenses, indicating:
o The total amount of the "net sales volume" for the quarter, taxes not
included, as well as the amount of net sales accrued since the start of
the year (as defined in Article 6.2), with a clear indication of the
percentage that these sales represent in relation to all of INTER
PARFUMS' business activities.
o The breakdown in value of these sales by country and by product line,
with the value being expressed in the billing currency and in the
currency defined in Article 6.2;
o The detailed calculation of royalties on said sales;
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o The amount of advertising expenses for each country, the list of which
will be prepared by CELINE and submitted to INTER PARFUMS.
For all of these sales-related items, with the exclusion of the advertising
expense statements, the actual and projected figures for the current year's
budget as well as the comparative figures for the previous year. [sic - main
verb missing]
The quarterly sales statement will have to be sufficiently itemized in order to
allow for verification against the books of INTER PARFUMS. The statement will
have to be "certified true and accurate" by the Director of Finance of INTER
PARFUMS.
7.2 Certified Annual Statement of Sales, Inventories and Communications
Expenses:
INTER PARFUMS shall send the following statements to CELINE within sixty (60)
days from the end of the corresponding contract year, which statements will have
to be certified at cost to INTER PARFUMS by an independent accounting firm:
o A summary statement of sales made during the year, prepared on the same
forms as used for the quarterly sales and advertising expenses
statement referred to in Article 7.1, as well as the detailed
calculation of the royalties due on these sales, certified by an
independent accounting firm at cost to INTER PARFUMS;
o A certified annual statement of inventories, clearly itemizing for each
product category the quantities in stock at INTER PARFUMS, as well as
the corresponding value, and if applicable, the amount of projected
depreciation for the corresponding inventories;
o An annual statement of communication expenses prepared by country;
o An annual statement of net local wholesale sales volume by country.
7.3 Marketing Plan:
INTER PARFUMS shall submit a marketing plan to CELINE covering the following
calendar year and containing essentially:
o A marketing book;
o A projected sales budget;
o A projected communications budget.
7.3.1 - Marketing Book.
Not later than the 31st of October of every year, INTER PARFUMS shall send a
marketing book to CELINE covering the following calendar year, containing the
following items:
o Activity plan;
o Presentation of new references;
o Proposed product lines;
o Product retail price policy.
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7.3.2 - Projected Sales Budget and Projected Communications Budget.
Not later than the 30th of November of every year, INTER PARFUMS shall send the
following to CELINE:
o A projected sales budget;
o A projected communications budget
covering the following calendar year.
(1) Projected sales budget.
A "projected sales budget" will have to be prepared by INTER PARFUMS for the
following year; this document shall be prepared in accordance with the
principles used for the quarterly sales statements mentioned above. It will be
submitted to CELINE on November 30th of year n, and will be reviewed or revised
on June 30th of year n+1.
INTER PARFUMS shall submit to CELINE any data that entails a significant
revision of the projected sales budget.
Furthermore, within the framework of the projected sales budget, INTER PARFUMS
will indicate the distribution of sales by distribution channels and the
distribution of sales by retail price and by product.
(2) Projected communications budget.
INTER PARFUMS will also have to prepare a projected communications budget based
on the sales volume indicated in the projected sales budget, showing the
distribution of communications expenses by country and by type of expense, as
set forth in Article 10.
This document shall include, if applicable and subject to availability, any
other data respecting the market or the products required for proper monitoring
of the implementation of the exclusivity agreement.
INTER PARFUMS will have to submit an initial media plan to CELINE.
7.3.3 - Product Retail Price Policy.
Upon request from CELINE and with respect to the countries of interest to it,
INTER PARFUMS will have to furnish all data relative to the unit retail sales
prices recommended for each product, along with an analysis of the positioning
of these prices in relation to competition; this data will have to be indicated
in local currency and with a significant number of references.
ARTICLE 8.- INTER PARFUMS STATEMENTS OF ACCOUNT
8.1 Obligation to Maintain Books relative to the Exploitation of the
Products:
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In accordance with customary accounting principles, INTER PARFUMS shall maintain
books and other accounting records (as well as any and all receipts and vouchers
relative to the importation, production, warehousing, distribution and sale of
the products, and more generally, to all activities connected to the rights and
obligations deriving from the within Agreement). INTER PARFUMS undertakes to
keep these books and records for a period of four (4) years following the close
of the year to which they correspond.
It is stipulated that the aforementioned receipts and vouchers will have to
include records of permanent inventories of the products and their components,
including their packaging materials, and that all books and records will clearly
have to show the quantities of product for all transactions relating thereto.
8.2 Audit of INTER PARFUMS Books:
In consideration of giving ten (10) days prior notice, CELINE may at any time
during business hours undertake an audit of INTER PARFUMS' books either directly
or through a duly-empowered agent.
This audit or inspection may be undertaken once a year at maximum during the
life of this Agreement, and once every two (2) years following the expiration of
the Agreement, and this, in addition to those audits permitted in case of
termination or expiration.
Moreover, CELINE reserves the right to undertake direct audits with
third-parties related to INTER PARFUMS in connection herewith (customers,
distributors, suppliers, etc.), and INTER PARFUMS agrees to put forth its best
efforts to obtain the consent of said third-parties to have CELINE conduct its
audits.
The sole purpose of the audits undertaken by CELINE is to ensure that INTER
PARFUMS' obligations hereunder are being properly performed.
The cost of such audits shall be borne by CELINE, with the exception of the case
set forth in Article 8.3 below.
8.3 Determination and Settlement of Insufficiencies in Payment:
In the event that the audit of INTER PARFUMS' books discloses an insufficiency
in royalties paid to CELINE, INTER PARFUMS will have to make immediate payment
to CELINE of any and all sums due, plus interest at the 3-month EURIBOR rate
plus interest of five percent (5%), calculated from the last day of the year in
which said amounts should have been paid.
Furthermore, the total cost of the audit shall be borne by INTER PARFUMS.
In the case of non-payment, CELINE shall be entitled to terminate the Agreement
without having to take any legal action thereupon ten (10) days after having
given INTER PARFUMS formal notice by registered letter with return receipt
requested in accordance with Article 12 below to pay all sums due.
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ARTICLE 9.- CREATION AND DEVELOPMENT OF THE PRODUCTS
9.1 Creation of the Products:
The creation of the products will have to be embodied in the consistency of
style that is exclusive and particular to CELINE, and in order to guarantee such
consistency, INTER PARFUMS undertakes to work closely with CELINE at all stages
of the creative and development processes by allowing CELINE to make choices and
to suggest any modifications deemed appropriate by it, it being stipulated that
in all cases, the parties shall put forth their best efforts to cooperate with a
view to jointly developing and implementing a common plan (hereinafter the
"Plan").
For any creation of product, INTER PARFUMS will have to obtain the prior written
approval of CELINE for the said Plan, and notably:
o Development of the product concept or design;
o Preparation of outlines intended for the creators (design and
perfume), providing them with work directives;
o Development of a bottle design;
o Development and choice of formula;
o Development and choice of packaging;
o Choice of product name;
o Product price positioning.
It should be re-stated that any creation of product, irrespective of its origin
and the respective contributions of the parties, shall remain the exclusive
property of CELINE, even after this Agreement has terminated or been terminated
for any reason whatsoever.
9.2 Industrial or Technical Development of Products:
INTER PARFUMS undertakes to see to it that the products are designed and
manufactured in accordance with the quality standards of the industry, that they
are defect-free both in their design and in their manufacturing so as to meet
the expectations of a demanding clientele and to maintain the prestige of the
trademark.
The parties agree that INTER PARFUMS shall maintain complete and overall control
of all industrial development stages. It shall freely select the suppliers of
packaging articles (molds, tops, pumps, cases or jackets, stoppers, labels,
etc.), it being understood that the technical development of any new product
envisaged shall be subject to prior written approval by CELINE.
INTER PARFUMS shall furnish CELINE with product samples (hereinafter the
"Lead-offs") for verification prior to marketing.
Furthermore, INTER PARFUMS undertakes to market only those products manufactured
in accordance with the Lead-offs approved in writing by CELINE.
Should the manufactured products not be in accord with the Lead-offs, CELINE may
demand that their production and marketing be immediately stopped, and that they
be destroyed at cost to INTER PARFUMS, without prejudice to CELINE's right to
cancel this Agreement as set forth in Article 12 below.
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9.3 Sub-contractors:
9.3.1 - INTER PARFUMS is authorized under its complete responsibility to
sub-contract all or part of the manufacturing of the products under the
following conditions:
o INTER PARFUMS undertakes to see to it that all manufacturing of
products, production of perfume extracts or product components by
sub-contractors is done in Europe;
o INTER PARFUMS undertakes to see to it that the terms and conditions of
this Agreement are respected by all sub-contractors;
o INTER PARFUMS shall submit the list of its sub-contractors twice a
year to CELINE.
INTER PARFUMS expressly recognizes that it is jointly and severally liable with
its sub-contractors. In particular, it undertakes to guarantee CELINE that it
will hold itself responsible for any acts or actions of said sub-contractors
that are counter to the stipulations embodied herein.
INTER PARFUMS furthermore guarantees CELINE that it shall hold it harmless from
any action and/or claim that its sub-contractors may bring against or file with
CELINE for any reason or cause whatsoever.
9.3.2 - Quality Control.
INTER PARFUMS shall regularly carry out or cause to be carried out
quality-control procedures respecting the products manufactured and packaged by
its sub-contractors, and undertakes to inform CELINE as soon as possible of any
technical defects found, and to take any and all necessary steps to remedy these
defects.
INTER PARFUMS agrees to send CELINE, at the latter's request and once a month at
maximum, random samples of the products that will be marketed.
ARTICLE 10.- COMMUNICATIONS
10.1 Definition of Terms:
The term communications signifies acts or actions undertaken in the fields of
promotion and advertising.
o In the sense of this Agreement, the term promotion means:
a) Promotional material, point-of-sale advertising, printed matter.
b) Promotion-related actions such as:
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o Window displays;
o Advertising and promotion undertaken jointly with a distributor
or retailer;
o Point-of-sale activities;
o Hiring of temporary personnel within the framework of product
promotion.
c) Public relations operations.
o Expenses excluded from promotion:
The following are not considered promotion expenses:
a) Expenses incurred for packing.
b) Expenses of full-time staff hired for purpose of the sale or
presentation of products.
c) Product presentations, with the exception of those which CELINE
recognizes as having public relations value.
d) The opening of a stand and shop-in-a-shop.
e) Participation in trade shows and exhibitions.
f) Product presentation spaces (show room).
o Definition of the term "advertising":
As used herein, the term "advertising" means any action connected with or
involving the media, meaning the press, radio, magazines, television, billboards
or other media channels.
10.2 INTER PARFUMS' Obligations respecting Communications:
INTER PARFUMS and CELINE shall jointly formulate communications strategy
relative more particularly to the choice of media and the means of communication
(advertising, public relations, etc.).
10.2.1 - Promotion.
Any plan or project relating to promotion as defined in Article 10.1, must be
submitted to CELINE for written approval four (4) months before the
implementation of said project or plan.
Furthermore, INTER PARFUMS undertakes to utilize the services of an internal or
external press agent in order to promote the products to the media and
journalists; this will be done in close cooperation with CELINE's Communications
Department.
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10.2.2 - Advertising.
The design and execution of advertising campaigns (creation and choice of media)
shall fall under the authority of CELINE.
More specifically, the choice of the visual advertising concept for the product
shall be the responsibility of CELINE.
Consequently, so far as concerns the designing and undertaking of an advertising
campaign and the choice of media, CELINE reserves the right to designate the
organizations of its choice (advertising agency, buying group, photographers
studio, etc.) so that the campaign will be in harmony with the overall image of
CELINE throughout the world.
INTER PARFUMS undertakes to work with said organizations, and notably with the
advertising agency designated by CELINE, it being understood that the final
validation of the advertising campaign shall be CELINE's responsibility.
However, CELINE and INTER PARFUMS shall exercise their best efforts to cooperate
with a view to achieving an objective that is satisfactory to both parties.
10.2.3 - Communications Budget.
INTER PARFUMS recognizes the need to support the exploitation of the CELINE
trademark through a communications policy that is compatible with the level of
business activity.
INTER PARFUMS agrees to establish the following budgets jointly with the
distributors with whom it is closely involved in connection with the advertising
and promotion of products:
o During the second and third contract years (2001 and 2002):
A communications budget of at least [__________________] for the two consecutive
years.
o Commencing in 2003, and for all following years over the life of the
Agreement:
A communications budget of at least [___________] percent [____] of the "local
net wholesale" sales volume realized on the products.
The following is understood by the term "local net wholesale" sales volume:
o The total amount of net xxxxxxxx by INTER PARFUMS distributors to their
customers;
o Taxes not included;
o Less delivery or transportation expenses invoiced by the distributors to
their customers (within a limit of 5% of the total amount invoiced);
o Less justifiably-unsold products returned (within a limit of 5% of the
total amount invoiced).
o And finally, less sales of promotional products (within a limit of 10% of
the total amount invoiced).
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If all or part of the communications budget has not been expended within a
contract year, CELINE may authorize INTER PARFUMS to carry forward the balance
to the following year.
10.2.4 - Monitoring of Communications Expenses.
The monitoring of communications expenses will be carried out within the
framework of the provisions of Article 7 hereof.
ARTICLE 11.- TRADEMARKS
11.1 CELINE Property Rights to the Trademarks:
INTER PARFUMS hereby acknowledges CELINE's exclusive property right to the
trademarks, as well as the rights deriving from the exploitation thereof, and
undertakes to use said trademarks only as a beneficiary of the present
Agreement.
INTER PARFUMS recognizes the present and future rights of CELINE, including more
specifically the trademarks falling under Article 11.4 below, and agrees to
abstain from contesting the said rights. Any registration of trademarks in any
country whatsoever, may be undertaken only in benefit of CELINE.
CELINE furthermore agrees to do everything possible to obtain, at cost to
itself, the renewal of the registrations of the trademarks mentioned in
Attachment 1 during the life of the present Agreement.
In those countries listed in Attachment 1 hereof, in which trademark
applications are still pending, CELINE shall continue with the registration
procedures. However, CELINE may not in any case be held responsible for a
trademark application being rejected, irrespective of the reasons therefor.
Should it be necessary to file for registration of the CELINE trademark in a
country where the trademark has not yet been registered, CELINE shall file the
trademark so as to allow INTER PARFUMS to proceed with the distribution of the
products in accordance with local laws and regulations.
Should legal or other obstacles stand in the way of applying for registration of
the trademark in a country where such registration is desirable, the parties
hereto shall do everything possible to remove those obstacles, or else to find
some alternative.
Should CELINE so request, INTER PARFUMS shall do everything possible to support
the filing of the trademark application or the renewal of trademark
registrations, specifically by furnishing any and all required information,
making any and all declarations deemed necessary and submitting any and all
requisite documents.
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CELINE grants INTER PARFUMS the right to have itself registered, at cost to
itself, as a "Registered User" of the products in those countries who laws
recommend or impose such registration.
If applicable or appropriate, CELINE may decide to have itself protected by the
filing of a model depicting the bottles or cases in which the products are
packaged; these models will be filed in the name and at the exclusive expense of
CELINE.
11.2 Defense of Trademarks.
CELINE alone shall have the right to act legally against any acts or
infringement, and more generally against any other threat to the trademarks.
CELINE shall likewise have the right to undertake any proceeding in opposition.
These rights are not granted to INTER PARFUMS. All legal proceedings, either as
plaintiff or defendant, relative to the ownership of the trademarks shall be
undertaken at exclusive cost to CELINE.
If it deems it useful or advisable, and if it falls within the realm of
possibilities offered by local laws and/or regulations, CELINE shall do
everything possible to challenge any registration that constitutes an
infringement of the trademarks or the products and/or any illegal use of the
trademarks by third-parties in the same field as that of the products. CELINE
shall act in concert with INTER PARFUMS, who for its part shall be obligated to
render CELINE all possible assistance.
INTER PARFUMS undertakes to inform CELINE without delay of any act of
infringement, or acts of unfair competition, and more generally any other
threats made by anyone to the trademarks and the products, and to provide CELINE
with any and all information relative to any acts of infringement about which it
has knowledge.
Any legal proceedings, whether as plaintiff or defendant, relative to the
exploitation of the trademarks that may be pending between CELINE and the
co-contractors of INTER PARFUMS, whether such co-contractors are re-sellers,
agents, distributors, retailers, or others, shall be at the exclusive expense of
INTER PARFUMS. CELINE however shall retain full control over the procedures and
defense of its interests. In particular, it shall choose its own legal counsel.
11.3 Use of Trademarks by INTER PARFUMS:
11.3.1 - INTER PARFUMS undertakes to use the trademarks only in the manner
stipulated in Attachment 1, and only for the operations covered by this
Agreement, including the manufacturing, distribution, sale and advertising of
the products in the territory.
11.3.2 - Marking.
INTER PARFUMS will have to adhere scrupulously to CELINE's directives or
instructions relative to the matter of marking. The products, labels, containers
or receptacles and all forms of packaging, letterheads, invoices and documents
relative to sales management, sales aids, advertising and promotional materials,
will have to be uniformly marked in accordance with the rules issued by CELINE
for such purpose. All of these items will have to be submitted to CELINE for
written approval prior to use.
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CELINE reserves the right to change the design of the form and colors of the
markings and products, or otherwise cause them to be changed. INTER PARFUMS
undertakes to implement and otherwise put into effect any new or modified
markings within the shortest possible time, and not later than one (1) year
following the date on which notice is given by CELINE.
11.3.3 - Respect for the Identity of the Trademarks.
Excluding the exceptions expressly made by law and regulations, no marking or
trademark or sign of any nature whatsoever other than the subject trademarks
hereof may appear on the products, save for express authorization given by
CELINE.
INTER PARFUMS agrees never to associate the subject trademarks hereof with any
other trademark, corporate name, trade name, symbol, etc.
In all communications operations undertaken, INTER PARFUMS shall expressly
maintain the distinction between the subject trademarks hereof and all other
trademarks belonging to it or which it may exploit elsewhere.
INTER PARFUMS will have to respect the identity of the trademarks as well as the
communications methods used to reach consumers.
11.4 Creation and Filing of New Trademarks:
The parties hereto shall decide by mutual agreement on the need to select and
file an application for one or more new trademarks for the various product
lines.
For such purpose, INTER PARFUMS shall undertake a detailed study at its expense,
and submit same to CELINE within the scope of the Marketing Plan.
In this study, INTER PARFUMS will propose to CELINE:
o Several names and/or logos for the new trademarks, after having first
undertaken research at its expense on trademarks having priority to
such names and/or logos in those countries determined by INTER
PARFUMS;
o A list giving a maximum of forty (40) countries in which INTER PARFUMS
contemplates distributing the products.
INTER PARFUMS agrees to demonstrate reasonableness in its desire to create new
trademarks, and in any event, not to provide for the filing of more than three
(3) new trademark applications during the entire life of this Agreement.
After examining the study submitted by INTER PARFUMS, CELINE may decide to
proceed with filing applications for said new trademarks. The new trademarks
shall be filed in the name of CELINE and at cost to it with the competent
government agencies.
By mutual agreement of the parties, all of the terms and conditions of this
Agreement shall automatically apply to any new trademark thus created.
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ARTICLE 12.- ADVANCE CANCELLATION
12.1 Cancellation by Either Party:
In the event of violation of any one of the clauses hereof by one of the
parties, the Agreement may be cancelled by the other party thirty (30) days
after having given formal notice thereof by registered letter with return
receipt requested, which formal notice has remained without response; all of the
foregoing is without prejudice to any damages and losses that might be claimed
from the defaulting party.
Furthermore, the within Agreement may be ipso jure cancelled if a formal
notification addressed to the court-appointed receiver has remained without
response for more than one (1) month, in the event that a bankruptcy proceeding
is initiated against either of the parties hereto.
12.2 Cancellation by CELINE:
CELINE shall have the right to cancel this Agreement in the following cases:
o Non-performance of the obligations relative to quality
criteria, and notably the manufacturing of unapproved
prototypes or the manufacturing of products that are not in
accord with prototypes approved by CELINE, if after three (3)
days of receiving formal notice from CELINE by registered
letter with return receipt there is no response; the foregoing
is without prejudice to any damages and losses that might be
claimed from INTER PARFUMS;
o Non-performance of the obligations relative to the directive
to stop distribution of the products, if after three (3) days
of INTER PARFUMS receiving formal notice from CELINE by
registered letter with return receipt, no response has been
received;
o Non-payment or delay in payment of royalties and/or the
guaranteed minima mentioned in Article 6 hereof;
o Discovery of fraudulent acts of any kind whatsoever that have
consequences on the rights and obligations conferred by this
Agreement.
ARTICLE 13.- EFFECTS OF CANCELLATION - OBLIGATIONS OF THE PARTIES
13.1 In the event of cancellation for any reason other than non-performance of
obligations, INTER PARFUMS may, subject to the prior written authorization of
CELINE and on a non-exclusive basis, market the products hereunder for a period
of six (6) months following the expiration of this Agreement, i.e., those
products already produced or pending production as of the expiration date of the
Agreement.
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Within a period of fifteen (15) days from the expiration date of the Agreement,
INTER PARFUMS shall submit to CELINE a statement of the remaining product
inventory, it being stipulated that said inventory may not represent a volume
greater than that of the product sales over a six-month period. The said volume
shall be calculated on the basis of the average production recorded during the
six (6) months preceding the expiration of the Agreement.
The balance of the remaining inventory will have to be exhausted within a period
of six (6) months following the expiration of the Agreement in accordance with
the contractual sales conditions, and through the intermediary of
previously-used commercial networks or similar networks.
At the end of the six-month period, CELINE may at its entire discretion decide
to purchase or decline to purchase from INTER PARFUMS any unsold products at
cost price.
In the absence of such purchase by CELINE, the said inventory of products shall
be destroyed by INTER PARFUMS at cost to itself and in the presence of a
representative of CELINE.
Not sooner than six (6) months following the expiration of the Agreement, INTER
PARFUMS shall prepare a statement of sales made as described above, and shall
pay CELINE the corresponding amount of royalties, excluding therefrom any sales
made to CELINE at cost price.
13.2 As of the expiration date hereof, INTER PARFUMS shall immediately cease any
and all exploitation of the trademarks, and shall remove any mention of said
trademarks from its business documents, invoices, letterheads, advertising
materials, etc.
INTER PARFUMS shall also cease making reference to CELINE, its trademarks and
its past cooperation or association with CELINE as a business partner or
licensee, and shall be solely answerable in such regard for any of its
sub-licensees.
ARTICLE 14.- LIABILITY
14.1 CELINE represents that it has no knowledge of any circumstance that might
impede the marketing of the products in the countries listed in Attachment 1, in
which the trademarks are already registered.
However, the parties shall agree as to what conduct they should jointly pursue
in each country prior to the delivery of the products.
14.2 Should new circumstances arise following the signing of this Agreement that
are of a nature which significantly limits the exercise of the trademark
exploitation rights granted to INTER PARFUMS in a major country in the
territory, the parties shall negotiate with a view to arriving at a readjustment
of the royalties due under Article 6 hereof.
14.3 INTER PARFUMS declares that it has duly contracted an insurance policy
covering third-party civil liability risks arising from bodily injury and/or
property damage deriving notably from a defect in design, manufacturing,
storage, packaging, transportation, sale of the products, and operating losses
incurred by CELINE.
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INTER PARFUMS shall be solely liable for any action brought by a third-party as
a result of such losses.
ARTICLE 15.- CONFIDENTIALITY
Each party hereto undertakes to maintain the confidentiality of all of the
professional data relative to its co-contractor, which data it may have
knowledge of through the execution of the within Agreement, and more
specifically, to preserve all of the commercial and professional secrets of its
co-contractor. The present confidentiality obligation shall survive the
expiration of this Agreement.
ARTICLE 16.- TRANSFERABILITY OF THE AGREEMENT
16.1 The present Agreement is strictly personal between CELINE and INTER PARFUMS
and may not be assigned or transferred.
Furthermore, INTER PARFUMS undertakes not to grant any sub-licenses, in whole or
in part, of the rights granted hereunder.
16.2 The parties acknowledge and agree that in the event of occurrence of the
following events:
o Modification of capital structure entailing a change in
control of the company as set forth in Article 355.1 of the
Law of July 24, 1966, or acquisition, merger, divestiture,
partial transfer of assets;
o Transfer of elements constituting the ownership of the
goodwill to another individual or entity; change in ownership,
usufruct, management,
INTER PARFUMS will have to give notice of the change by registered letter with
return receipt requested. CELINE shall be entitled to cancel the Agreement
unilaterally, and without payment of any indemnity whatsoever, within a period
of thirty (30) days from the date of receipt of the said notification, or thirty
(30) days from the date on which CELINE learned of the event entailing the
change.
ARTICLE 17.- MODIFICATION OF THE AGREEMENT
17.1 Any amendatory or overriding or supplementary agreement or any rider to the
present Agreement must be in writing, signed by the parties and attached to the
Agreement. Any such modification shall be limited to the particular point for
which it has been agreed.
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17.2 Should one of the parties find it impossible to perform its commitments
hereunder, it will have to inform its co-contractor thereof so that they can
come to some arrangement for adapting the Agreement to their mutual interests.
17.3 Should one or more clauses of this Agreement be voided, that circumstance
shall not in any way affect the validity of the other provisions of the
Agreement nor the Agreement in its entirety. The same shall apply in the event
that this Agreement contains gaps. If a clause is to be deleted, or one is
missing, it shall be replaced by a legally-valid provision that is in accord
with the purpose of the present Agreement.
18.- MISCELLANEOUS
18.1 The fact that CELINE may abstain at any given time from demand that INTER
PARFUMS execute its obligations fully, or the fact that CELINE may abstain from
exercising any right granted to it hereunder, shall in no case be interpreted as
a waiver by CELINE of its right to demand the INTER PARFUMS perform the
obligation in question.
18.2 All taxes, assessments and duties that may be due as a consequence of this
licensing agreement and of the payment of the royalties, shall be borne by INTER
PARFUMS, who undertakes to pay such sums in a timely manner and proceed with any
tax or tax-related formality deriving herefrom.
18.3 Expenses connected with the administrative formalities of recording this
licensing agreement with the competent government agencies, shall be borne by
INTER PARFUMS.
ARTICLE 19.- APPLICABLE LAW - JURISDICTION
19.1 The present Agreement shall be governed by French law.
19.2 In the event of any dispute arising from the interpretation, execution or
performance of this Agreement, the parties agree to make every effort to resolve
the dispute amicably.
In the absence of such amicable settlement, the dispute shall be submitted
exclusively to the courts of Paris.
Made in Paris,
this 17th day of May 2000
in duplicate
INTER PARFUMS CELINE
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxxx Xxxxxxx Xxxxxxx Xxxxxxxx
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