Exhibit 10.11(e)
FOREIGN MANUFACTURING RIGHTS AGREEMENT
THIS FOREIGN MANUFACTURING RIGHTS AGREEMENT ("Agreement") is entered
into and effective as of the 5th day of November, 1997 ("Effective Date"), by
and between Ambra Inc. a Delaware corporation ("LICENSOR") and I. C. Xxxxxx &
Company L.P. ("LICENSEE"), a Delaware limited partnership.
R E C I T A L S
A. LICENSOR is the successor in interest of I. C. Xxxxxx & Company L.P.
which is in turn, the successor-in-interest of Brookhurst, Inc., to certain
trademark rights outside the United States (as defined below) including in
the Territory, as defined below, in the word BOSS.
B. LICENSEE desires to obtain a license to be able to cause others to
manufacture such products in the Territory and LICENSOR is willing to license
such trademarks to LICENSEE for such purpose in accordance with the terms
hereof.
C. In countries where necessary and appropriate, LICENSOR desires that
LICENSEE be recorded as a registered user of the Marks (as hereinafter
defined) in relation to the manufacture of the Licensed Products in the
Territory.
NOW, THEREFORE, in consideration of the mutual agreements set forth in
this Agreement, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
a. "Xxxx" or "Marks" shall mean the trademarks BOSS and the stylized
B (as set forth on Exhibit A attached hereto) whether used alone or in
combination with other words, phrases or designs, with the appearance and/or
style of the said trademark in compliance with the provisions of Exhibit A.
b. "Property" shall mean the intellectual property rights which
LICENSOR deems, in its sole reasonable discretion, to be desirable or
necessary for LICENSEE to enjoy the fruits of the license granted herein and
which are or become primarily associated with the Marks. Such Property shall
include, but not be limited to, certain titles, trademarks and names, as well
as any of the following used in connection with or as identifiers of the
Marks: fabrics, styles, designs, and colors other than those which are
standard or traditional in the industry; logos, symbols, copyrights, art
work, inventions (patentable or unpatentable), confidential information,
trade secrets, patents and pending patent applications.
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* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
c. "Licensed Product" or "Licensed Products" shall mean solely the
products specified in Exhibit B attached hereto bearing Marks in compliance
with Exhibit A.
d. "Territory" or "Licensed Territory" shall mean any and all countries
listed on Exhibit C.
e. "United States" shall mean the United States of America, its
territories, possessions and commonwealths, except Saipan and American Samoa.
"United States" includes, without limitation, Puerto Rico.
f. "Territory Net Sales" shall mean the amount invoiced by or on behalf
of LICENSEE to third parties with respect to the Licensed Products
manufactured by or on behalf of LICENSEE in the Licensed Territory minus bona
fide trade, quantity and early payment discounts actually taken, actual
returns, shipping costs specifically itemized as such, uncollectible amounts
actually written off as bad debt by LICENSEE and sales or excise taxes (if
any) payable by LICENSEE in respect of and attributable directly and solely
to sales of such Licensed Products, provided that each such item is indicated
separately and appears clearly separate from product price; provided further
that for purposes of Territory Net Sales calculations uncollectible amounts
shall not exceed one half of one percent (0.5%) of Territory Net Sales
(including uncollectible amounts) for which LICENSEE is obligated to pay a
royalty. No costs incurred in the manufacture, sale, distribution,
advertisement or promotion of such Licensed Products shall be deducted from
the gross sales amounts or from any royalty payable to LICENSOR by LICENSEE.
Any sales or transfers of Licensed Products made by LICENSEE to any person or
entity that does not deal at arm's length with LICENSEE shall be computed,
for the purpose of determining Territory Net Sales, at an amount equal to the
price at which LICENSEE would have invoiced or charged purchasers which deal
at arm's length with LICENSEE, unless otherwise agreed to by LICENSOR in
writing.
g. "Total Net Sales" shall mean the amount invoiced to third parties by
or on behalf of LICENSEE with respect to all products bearing a BOSS xxxx
minus bona fide trade, quantity and early payment discounts actually taken,
actual returns, shipping costs specifically itemized as such, uncollectible
amounts actually written off as bad debt by LICENSEE and sales or excise
taxes (if any) payable by LICENSEE in respect of and attributable directly
and solely to sales of Licensed Products, provided that each such item is
indicated separately and appears clearly separate from product price;
provided further that for purposes of Total Net Sales calculations
uncollectible amounts shall not exceed one half of one percent (0.5%) of
Total Net Sales (including uncollectible amounts) of all products bearing a
BOSS xxxx. No costs incurred in the manufacture, sale, distribution,
advertisement or promotion of such products shall be deducted from the gross
sales amounts or from any royalty payable to LICENSOR by LICENSEE. Any sales
or transfers of such products made by LICENSEE to any person or entity that
does not deal at arm's length with LICENSEE shall be computed, for the
purpose of determining Total Net Sales, at an amount equal to the price at
which LICENSEE would have invoiced or charged purchasers which deal at arm's
length with LICENSEE, unless otherwise agreed to by LICENSOR in writing.
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2. RIGHTS GRANTED
a. LICENSEE acknowledges that LICENSOR owns, pursuant to that certain
Foreign Boss Rights Acquisition Agreement between LICENSOR and LICENSEE dated
September 30, 1997 any and all trademark rights relating to the word BOSS
within the Licensed Territory that BROOKHURST transferred to LICENSEE
pursuant to that certain Worldwide Rights Acquisition Agreement between
LICENSEE, BROOKHURST and Xxxxxxx Xxx dated September 30, 1997. LICENSEE
acknowledges that it does not own, or purport to own, any trademark rights
relating to the word BOSS in the Licensed Territory. Unless specifically
stated to the contrary, the provisions of this Agreement relate solely to use
of the Marks within the Licensed Territory and are not intended to apply to
LICENSEE'S activities in the United States.
b. LICENSOR hereby grants to LICENSEE, and LICENSEE accepts, upon the
terms and conditions set forth herein, a limited, nonexclusive right and
license to use, and to cause and permit third-party manufacturers
("Designated Manufacturer(s)") to use, the Marks solely in connection with
the manufacture of Licensed Products, labels, displays, and other materials
used in connection with the Licensed Products within the Territory for sale
solely to LICENSEE. The license and rights granted to LICENSEE under this
Agreement are sometimes referred to herein as the "Licensed Rights."
c. LICENSEE shall require that the Designated Manufacturer(s) perform
all obligations ascribed to such Designated Manufacturer(s) under this
Agreement, including but not limited to those obligations listed in Section
2.c. (i-xxii), and shall, within sixty (60) days of the effective date of
this Agreement, require each Designated Manufacturer(s) to enter into a
binding written agreement (whether by purchase order or otherwise) with
LICENSEE, under which each such Designated Manufacturer(s) agrees to
undertake the following obligations:
(i) The Designated Manufacturer(s) shall manufacture Licensed
Products only for and sell Licensed Products only to LICENSEE.
(ii) The Designated Manufacturer(s) shall not manufacture any
product bearing the Marks or any trademarks confusingly similar to the Marks,
other than Licensed Products.
(iii) The Designated Manufacturer(s) shall not use the name BOSS on
any corporate, partnership or other trade name or as a form of entity
identification.
(iv) The Designated Manufacturer(s) shall modify or terminate use of
the Marks if requested to do so by LICENSEE pursuant to Section 2.g. herein.
(v) The Designated Manufacturer(s) shall not use the Marks in the
Territory in any manner other than as expressly set forth in this Agreement.
(vi) The Designated Manufacturer(s) shall, following termination of
its agreement with LICENSEE, terminate any and all uses of the Marks in the
Territory.
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(vii) The Designated Manufacturer(s) shall (A) provide LICENSEE with
a list of all locations in which the Designated Manufacturer manufactures,
processes or stores Licensed Products, which list from time to time shall be
updated promptly with additional such locations as they are utilized, and (B)
provide reasonable access at each and every such location to LICENSEE and
LICENSOR; provided, however, that this provision does not apply to the
initial order placed with any Designated Manufacturer where the order does
not exceed 24,000 units. LICENSOR shall provide LICENSEE with notice and
opportunity to participate in any inspection under this provision provided
LICENSOR decides, in its sole discretion, that to do so would not impair or
hinder the purpose or effectiveness of any such inspection.
(viii) The Designated Manufacturer(s) shall comply with all
applicable labeling and other laws affecting the manufacture, storage,
shipment, labeling and sale of Licensed Products pursuant to the terms of
this Agreement, and at all times otherwise conduct its activities under its
agreement with LICENSEE in a lawful manner.
(ix) The Designated Manufacturer(s) shall permit LICENSOR, LICENSEE
and their respective agents and representatives to conduct audits with
respect to the books, records and all other documents and materials in the
possession or under the control of the Designated Manufacturer(s) relating to
the Licensed Products and its agreement with LICENSEE.
(x) The Designated Manufacturer(s) shall use the trademark and
copyright notices required by LICENSEE in connection with the Marks.
(xi) The Designated Manufacturer(s) shall acknowledge that the Marks
are owned solely and exclusively by LICENSOR and Hugo Boss AG and will not at
any time represent that it has any title or right of ownership in the Marks.
(xii) The Designated Manufacturer(s) shall acknowledge that
materials related to its agreement with LICENSEE and uniquely and
specifically associated with the Marks and/or the Licensed Products
(collectively "Works"), whether developed solely by such Designated
Manufacturer(s) or jointly with others, may qualify for copyright protection
under applicable local laws. The Designated Manufacturer(s) shall agree that
such works are to be deemed works "made for hire" for the benefit of LICENSOR
and that if such works, by operation of law or otherwise, are not works "made
for hire", such Designated Manufacturer(s) shall agree (A) to assign to
LICENSOR any or all of such Designated Manufacturer(s)' right, title and
interest in the copyright in such works throughout the world, and (B) not to
seek or obtain registration of such copyright in its own name.
(xiii) The Designated Manufacturer(s) shall agree not to seek or
obtain any registration of the Marks or any trademark confusingly similar
thereto in any name or participate directly or indirectly in such
registration without prior written permission of LICENSOR and LICENSEE.
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(xiv) In the event the Designated Manufacturer(s) has obtained or
obtains in the future in the Territory, any right, title or interest in the
Marks, or in any other trademark or service xxxx owned by LICENSOR, the
Designated Manufacturer(s) shall execute any and all instruments deemed by
LICENSOR and/or its attorneys or representatives to be necessary to transfer
such right, title or interest to LICENSOR.
(xv) The Designated Manufacturer(s) shall not take any action which
may in any way impair the rights of LICENSOR in the Marks, including, without
limitation, challenging or opposing, or raising or allowing to be raised,
either during the term of its agreement with LICENSEE or after its
termination, on any grounds whatsoever, any questions concerning, or
objections to, the validity of the Marks or LICENSOR'S rights therein, or any
other trademarks or service marks owned by LICENSOR containing the word BOSS
in any manner.
(xvi) The Designated Manufacturer(s) shall reasonably assist
LICENSOR in obtaining and/or maintaining registration for the Licensed Rights
including, without limitation, by providing information regarding the Marks
and samples of the Licensed Products.
(xvii) The Designated Manufacturer(s) shall appoint LICENSOR as its
respective attorney-in-fact for the limited purpose of executing any and all
documents and performing any and all other acts necessary to give effect and
legality to the provisions of this Section 2 of this Agreement.
(xviii) The Designated Manufacturer(s) shall not grant, assign,
sublicense or otherwise convey or transfer any rights inuring to such
Designated Manufacturer or any obligations or duties owed by such party to
LICENSEE or LICENSOR under this Agreement without the prior written consent
of LICENSEE, and any attempted transfer or assignment shall be null and void.
(xix) The Designated Manufacturer(s) shall cooperate with and assist
LICENSOR in protecting and defending the Marks, and shall promptly notify
LICENSEE in writing of any infringements, claims or actions by others in
derogation of the Marks in the Territory of which it becomes aware; provided,
however, that LICENSOR shall have the sole right to determine whether any
action shall be taken on account of such infringements, claims or actions.
The Designated Manufacturer(s) shall not take any action on account of any
such infringement, claim or action without the prior written consent of
LICENSOR.
(xx) In the event LICENSOR initiates or defends any legal
proceedings on account of any infringements, claims or actions by others in
derogation of the Licensed Rights, the Designated Manufacturer(s) shall
cooperate with and assist LICENSOR to the extent reasonably necessary to
protect the Licensed Rights including, but not limited to, being joined as a
necessary party to such proceedings. Any such legal proceedings which do not
result from LICENSEE'S breach of this Agreement or the Designated
Manufacturer's breach of its agreement with LICENSEE shall be initiated or
defended by LICENSOR; provided, however, that under no circumstances shall
LICENSOR be responsible for the costs or expenses incurred
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by the Designated Manufacturer(s) in any such legal proceeding in which it
elects to be represented by its own counsel.
(xxi) The Designated Manufacturer(s) shall obtain all government
approvals and registrations which are required under the laws of the
Territory as a result of the Designated Manufacturer(s) activities in
connection with its contract with LICENSEE and to pay any taxes or fees
required by any such foreign government as a result of its activities under
its contract with LICENSEE.
(xxii) In the manufacture of Licensed Products, the Designated
Manufacturer(s) shall not employ children under fourteen (14) years of age.
d. Beginning sixty (60) days after the Effective Date of this
Agreement, LICENSEE shall not authorize any third party to manufacture
Licensed Products in the Territory unless and until such third party executes
a binding written agreement (by purchase order or otherwise) with LICENSEE
containing all of the obligations listed above in Section 2.c. (i-xxii).
LICENSEE shall take reasonable steps to monitor each Designated
Manufacturer's compliance with its obligations under its agreement with
LICENSEE. If any such Designated Manufacturer(s) fails to comply with any of
the foregoing obligations listed above in Section 2.c. (i-xxii), LICENSEE,
upon having acquired knowledge thereof, shall immediately notify LICENSOR
thereof and of the steps being taken to obtain compliance by such Designated
Manufacturer(s) with such obligations. If any such failure to comply
constitutes a material breach of the Designated Manufacturer's obligations to
LICENSEE as listed above in Section 2.c. (i-xxii), LICENSEE shall, at the
request of LICENSOR, also terminate its business dealings with such
Designated Manufacturer as soon as commercially feasible; provided, however,
that as of the date LICENSEE acquires knowledge of any such breach, LICENSEE
shall not enter into any new manufacturing agreements or place any additional
orders with such noncomplying Designated Manufacturer without the written
consent of LICENSOR; provided further that such termination shall not relieve
LICENSEE of its obligations to continue to enforce its rights against such
Designated Manufacturer for breach of its obligations or LICENSEE's indemnity
obligations to LICENSOR under this Agreement.
e. LICENSEE shall bear all costs and expenses associated with or
incurred by it in carrying out its obligations under Sections 2.c. and 2.d.
above.
f. Notwithstanding Section 2.b. above, LICENSEE may manufacture or
cause others to manufacture the Licensed Products within the Licensed
Territory subject to the terms and restrictions contained in this Section.
The parties agree that they will amend Exhibit C to include countries listed
in Exhibit C1 upon (or as soon thereafter as is practicable) the issuance to
HUGO BOSS AG, or its designee, in each such country, of trademark
registration(s) for the word BOSS for use on products listed in Exhibit B,
Section I, as modified by Section II; provided, however, that any such
amendment shall conform to and be limited by the scope of any such trademark
registration obtained. In those countries listed in Exhibit C1 where HUGO
BOSS AG presently has no trademark application(s) pending, LICENSOR agrees,
upon the
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written request of LICENSEE, to cause HUGO BOSS AG to make such application,
and to take appropriate steps to prosecute such application and LICENSEE
agrees to reimburse HUGO BOSS AG for fifty percent (50%) of the costs,
including attorney's fees and filing fees, of obtaining such registration.
The parties agree that they will amend Exhibit C to include each country
listed on Exhibit C2 when the later of the following two events occurs (or as
soon thereafter as is practicable): (1) the issuance to HUGO BOSS AG or its
designee, of trademark registrations for the word BOSS for use on products
listed in Exhibit B, Section I, as modified by Section II, or (2) the
resolution to the satisfaction of HUGO BOSS AG of pending disputes among
third parties. At any time after the execution of this Agreement, LICENSEE
may notify LICENSOR of countries other than those referenced in Exhibits C,
C1 and C2 in which LICENSEE desires to manufacture Licensed Products.
LICENSOR shall consider such a request in good faith, and consistent with the
principles incorporated above relating to the countries listed in Exhibit C.
If LICENSOR agrees to any such request, LICENSOR and LICENSEE will either
amend this Agreement, or execute a separate manufacturing rights agreement
upon mutually agreeable terms as set forth above. The parties agree to
execute individual Manufacturing Rights Agreements for any country on Exhibit
C, if required by the laws or regulations of that country or to protect the
Xxxx. LICENSEE shall only manufacture or cause others to manufacture
Licensed Products in those countries identified in Exhibit C or any other
country as may be later agreed upon pursuant to this section; provided,
however, that nothing in this subsection 2.f. shall prevent LICENSEE from
manufacturing goods in the United States pursuant to its own trademark
rights.
g. Notwithstanding Section 2.b. hereof, neither LICENSEE nor the
Designated Manufacturer(s) shall have the right to use the Marks in the
Licensed Territory in any manner that conflicts with the rights of any third
party. For purposes of this Section 2.g., the term "third party" shall not
include any natural person under control of LICENSOR, any entity owned by,
controlled by, or affiliated with LICENSOR, any natural person or entity that
owns or controls LICENSOR, or any entity with whom LICENSOR enters into an
agreement relating to, or creating, the rights that conflict with LICENSEE'S
rights hereunder. If the use of the Marks on any or all of the Licensed
Products conflicts with the rights of any third party, or if a third party
makes a bona fide claim alleging such a conflict, LICENSEE agrees to
immediately terminate or modify such use in accordance with LICENSOR'S
reasonable instructions, and LICENSEE shall have no right of damage or offset
in connection with this Agreement. In the event LICENSEE fails to terminate
or modify such use, as reasonably directed by LICENSOR, LICENSOR may
terminate this Agreement under the provisions of Section 15 below as to such
country in which the rights of the third party exists or with respect to
which a bona fide claim has been made without limiting LICENSOR'S other
rights and remedies hereunder or at law or in equity. LICENSEE shall
indemnify and hold harmless LICENSOR for all damages, including attorney's
fees and costs incurred in any action or claim brought against LICENSOR by
such third party arising out of LICENSEE's actions under this Agreement.
LICENSOR agrees that neither it nor HUGO BOSS AG shall grant to any third
party an exclusive license for the manufacture of products listed on Exhibit
B, Section I, as modified by Section II, bearing a BOSS xxxx.
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h. LICENSEE acknowledges that it is often difficult to obtain clear,
registered title to trademarks and other intellectual property rights.
Accordingly, LICENSOR makes no representation whatsoever concerning any
rights, interest, information, agreements, restrictions or other matters
relating to the BOSS marks acquired by LICENSOR from LICENSEE under the
Foreign Rights Agreement, and LICENSEE agrees that the rights granted herein
exist only to the extent that LICENSOR owns such rights and no warranty,
express or implied, is made with respect thereto or with respect to the
rights of any third parties that may conflict with the rights granted herein.
LICENSOR warrants that the agreements listed on Exhibit D hereto are the
only agreements known to LICENSOR or HUGO BOSS AG which impose or may impose
restrictions on LICENSEE'S ability to manufacture Licensed Products in the
Territory.
i. LICENSOR shall obtain from HUGO BOSS AG throughout the term of this
Agreement a license of such of its rights (if any) relating to the
manufacture of the Products under the Marks as it possesses in the Territory
such that LICENSOR may sublicense said rights (if any) to LICENSEE to the
extent described in the grant of rights set forth in Section 2.a. and .b.
hereof, and LICENSOR hereby acknowledges that it is sublicensing said rights
to LICENSEE under said Section 2.a. and .x.
x. LICENSEE makes no representations and warranties to LICENSOR
hereunder with respect to the Marks, including, without limitation, any
matter relating to the existence, validity or enforceability of the Marks
acquired by LICENSEE from BROOKHURST Inc.
k. LICENSOR makes no representations and warranties to LICENSEE
hereunder with respect to the Licensed Marks, whether such Marks were derived
from the purchase by LICENSOR from LICENSEE (and ultimately from BROOKHURST)
or derived by license from HUGO BOSS AG.
3. TRANSFER AND OWNERSHIP OF PROPERTY
a. LICENSEE agrees that, during the term of this Agreement, it shall
not use the Marks in the Territory in any manner other than as expressly set
forth in this Agreement.
b. LICENSEE agrees that LICENSOR is and shall be the sole owner of all
items of Property. Subject to the express requirements of Exhibit A, Exhibit
B and Exhibit C of this Agreement, the parties agree that LICENSOR shall have
no right to prevent LICENSEE from using, during or after the term of this
Agreement, any fabrics, styles, designs and colors that are standard or
traditional in the industry or not primarily associated with the Licensed
Rights.
c. Following termination of this Agreement, LICENSEE agrees that it
will terminate any and all use of the Marks in the Territory, except as
otherwise expressly provided in this Agreement.
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4. QUALITY STANDARDS AND INSPECTION
a. The parties acknowledge and agree that great value is placed on the
Marks and the goodwill associated therewith, that the consuming public and
the industry now associate the Marks with products of consistently high
quality, and that the terms and conditions of this Agreement are necessary
and reasonable to assure the consuming public and the industry that all
Licensed Products sold hereunder are of the same consistently high quality as
Licensed Products previously sold by LICENSEE. Accordingly, LICENSEE agrees
that all Licensed Products manufactured hereunder shall be substantially
equivalent, in terms of quality, to the products manufactured by LICENSEE for
sale during the Spring and Fall 1996 seasons. LICENSOR acknowledges that the
products bearing the word BOSS manufactured by LICENSEE for sale during the
1996 Spring and Fall seasons were of sufficiently high quality standards as
required by this paragraph. If any Licensed Products fail to conform to the
aforementioned quality standards, upon notification from LICENSOR, LICENSEE
shall discontinue any and all manufacture, shipments and distribution of such
non-conforming Licensed Products. For purposes of this Agreement, the
parties acknowledge that the quality standards apply only to the sewing,
construction and fabric of the Licensed Products.
b. Within forty-five (45) days after the Effective Date of this
Agreement, LICENSEE shall notify LICENSOR, in writing, of the identities of
each Designated Manufacturer(s) (including full business name and address),
and the locations of all manufacturing, processing and storage facilities in
the Territory in which the LICENSEE or the Designated Manufacturer(s) is
manufacturing, processing or storing or intends to manufacture, process or
store Licensed Products which is currently manufacturing Licensed Products
for LICENSEE in the Territory. Within thirty (30) days of placing any order
for the manufacture of any Licensed Products with a Designated Manufacturer
not previously identified to LICENSOR, LICENSEE shall notify LICENSOR, in
writing, of the identity of such new Designated Manufacturer, (including full
business name and address) and within thirty (30) days after placing any
order (other than an initial order for 24,000 units or less) with any such
Designated Manufacturer, the locations of all manufacturing, processing and
storage facilities in the Territory in which the LICENSEE or the Designated
Manufacturer is manufacturing, processing or storing or intends to
manufacture, process or store Licensed Products. LICENSEE shall, from time
to time, provide LICENSOR promptly with additional such locations as they are
utilized. LICENSOR and its representatives may from time to time, during all
reasonable business hours and with prior reasonable notice to LICENSEE,
inspect the operations and facilities of LICENSEE, the Designated
Manufacturer(s) and their agents with respect to performance under this
Agreement.
c. LICENSEE agrees that it shall comply with all applicable labeling
and other laws affecting the manufacture, storage, shipment, labeling and
sale of the Licensed Products pursuant to the terms of this Agreement, and at
all times otherwise conduct its activities under this Agreement in a lawful
manner.
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d. The parties agree that they will not, without the written consent of
the other, knowingly seek to obtain products from each other's manufacturers
in the Territory or otherwise interfere in each other's lawful relationships
with any manufacturers in the Territory.
e. In order to ensure that LICENSOR is fully aware of all products
LICENSEE may manufacture in the Territory, beginning with product development
for the presentation to the trade beginning in February 1998, LICENSEE shall
not sell or distribute any Licensed Product manufactured, sold or distributed
anywhere in the world, unless and until a prototype or a Computer Assisted
Design ("CAD") which displays clearly and fully each and every use of the
Xxxx on such product has been offered to LICENSOR for inspection. LICENSEE
shall notify LICENSOR when such prototypes or CADs are available for
inspection at LICENSEE's offices in New York ("Notification of Prototype
Availability") and LICENSOR shall, within ten (10) business days complete its
inspection. At the inspection, or at an inspection to be held within fifteen
(15) business days after receipt by LICENSOR of CADs as provided for below,
LICENSEE shall make available representative samples of tags, labels,
packaging (including cartons, containers, and wrapping or packing material)
and other advertising, promotional or display materials or stationery, sale,
documents and other items bearing or using the Xxxx. LICENSOR shall, within
five (5) business days of implementing its inspection, notify LICENSEE in
writing of any product that LICENSOR believes fails to meet the terms and
conditions of this Agreement including the standards set forth in Exhibit A
("Disputed Garments"). To the extent LICENSEE intends to rely upon CADs,
LICENSEE may, at its option, ship such CADs to LICENSOR for its review.
Under these circumstances, LICENSOR shall, within ten (10) business days of
receipt of such materials, notify LICENSEE in writing of any Disputed
Garments. In the event there are Disputed Garments, LICENSOR and LICENSEE
shall then meet to resolve any differences concerning such Disputed Garment
and if, after five (5) business days, no resolution has been reached, the
matter may be submitted to arbitration according to the procedures set forth
in Exhibit H1. Pending resolution of any such arbitration, LICENSEE shall
not manufacture, distribute or sell any such Disputed Garments. LICENSOR's
failure to approve or disapprove any such prototype or CAD, within thirteen
(13) business days of notification shall be deemed approval of such prototype
or CAD. LICENSEE shall provide LICENSOR with a set of prototype garments,
CADs or salesperson's samples of each such garment, each in typical or
representative color, and each accompanied by a list of colors (by references
to Pantone or other technical specification) expected to be used in
production, within ten (10) business days of Notification of Prototype
Availability. Subject to the express requirements of Exhibit A and Exhibit
B, nothing in this Agreement is intended to give LICENSOR any rights to
approve or specify the apparel styling, design, patterns, art work or colors
of Licensed Products.
f. Beginning with product development for the presentation to the trade
in February 1998, LICENSEE shall adhere to all prototypes, or CADs reviewed
by LICENSOR. Any minor departure or variance from such prototypes or CADs as
to any of the requirements or limitations in Exhibit A and Exhibit B,
including but not limited to any change of logo design, must receive the
prior written approval of LICENSOR, which shall not be unreasonably withheld.
Prior to receipt of LICENSOR'S approval, LICENSEE may, solely at its own
risk and without prejudice
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to LICENSOR, take orders for and/or manufacture such Licensed Products.
Should a dispute arise between the parties over such products requiring
arbitration, the parties agree that the arbitrator shall not be advised that
such garments have been manufactured or that orders have been placed or taken
therefor.
g. LICENSEE shall notify LICENSOR in writing regarding any change to
LICENSEE's business that would materially affect the rights, obligations and
benefits of LICENSOR under this Agreement. LICENSOR shall notify LICENSEE in
writing regarding any change to LICENSOR's or HUGO BOSS AG's business that
would materially affect the rights, obligations and/or benefits of LICENSEE
under this Agreement.
h. Subject to the provisions of Section 5.c., LICENSEE agrees not to
manufacture, export, import, ship or distribute from or to any Licensed
Territory, nor give its permission to any third party to manufacture, export,
import, ship or distribute from or to any Licensed Territory, Substandard
Licensed Products without the prior written approval of LICENSOR.
Substandard Licensed Products shall be defined as damaged or defective
merchandise, irregulars, raw material seconds, made-up merchandise, and any
products not meeting the quality standards set forth in Section 4.a. above or
the logo standards set forth in Exhibit A. Nothing in this Agreement is
intended to prevent LICENSEE from manufacturing or selling seconds and
irregulars in the normal and ordinary course of business, consistent with the
past practices of LICENSEE in this regard.
i. Upon LICENSOR'S written request, LICENSEE shall furnish without cost
to LICENSOR a reasonable number of random production samples per year of each
Licensed Product being manufactured by or on behalf of LICENSEE hereunder,
together with samples of each tag, label, carton, container and packing or
wrapping material used in connection therewith.
j. LICENSEE shall submit to LICENSOR any trademark, service xxxx, logo
or name which is to be used in connection with the Licensed Rights other than
those referenced in Exhibit A. LICENSOR shall have the right, in its sole
reasonable discretion, to refuse to permit the use of any such trademarks,
service marks, logos or names.
k. LICENSEE shall not use the stitching designs for clothing pockets as
depicted in Exhibit E on jeans, trousers, shirts, skirts, dresses, shorts,
overalls, jackets, hats or vests or manufacture or distribute any Licensed
Products using any pocket stitching design which infringes the designs set
forth in Exhibit E. Prior to use, LICENSEE may submit to LICENSOR for
approval other stitching designs for use on clothing pockets on such
garments. In the event LICENSEE elects not to submit stitching to LICENSOR
for approval LICENSEE shall indemnify, defend and hold harmless LICENSOR from
and against any and all claims, liabilities and expenses, including
reasonable attorney's fees, disbursements and other charges relating to
LICENSEE's use of such unapproved stitching designs.
11
l. LICENSOR and its representatives may, from time to time during all
reasonable business hours and with prior reasonable notice to LICENSEE,
inspect the operations and facilities of LICENSEE with respect to this
Agreement.
5. TERM
a. This Agreement shall continue in full force and effect until
December 31, 2001, when it shall terminate, unless renewed in accordance with
the terms below, or unless terminated sooner in accordance with the terms and
conditions set forth in this Agreement.
b. LICENSEE may, at it sole option, renew this Agreement for a period
of three (3) additional years commencing on January 1, 2002, and ending
December 31, 2004, if LICENSEE provides written notice of its intention to
extend by no later than June 30, 2001. LICENSEE may, at its sole option,
extend the term of this Agreement for an additional three (3) year period
commencing on January 1, 2005, and ending on December 31, 2007, if LICENSEE
provides written notice of its intention to extend by no later than June 30,
2004.
c. With respect to the limitations on the use of the Xxxx described in
Exhibit A, LICENSEE shall begin to phase some of the limitations into its
product line beginning with products produced by or for LICENSEE after
January 1, 1998. Thereafter, fifty percent (50%) of the products bearing the
Marks produced by or for LICENSEE during the period August 1, 1998 through
December 31, 1998 (as measured by the number of styles) must comply
therewith. LICENSEE agrees to use its reasonable efforts to ensure that
fifty percent (50%) of its projected volume of such goods comply with the
limitations described in Exhibit A. LICENSEE shall be in full compliance with
Exhibit A for all products bearing the Marks produced on or after December
31, 1998 and thereafter may not manufacture or produce
any products bearing the Marks which are not in full compliance with Exhibit
A.
6. LICENSE FEE AND ROYALTIES
a. LICENSEE agrees to pay to LICENSOR a royalty on Licensed Products
manufactured in the Territory by or on behalf of LICENSEE in accordance with
Exhibit F attached hereto. Each year during the initial term of this
Agreement, annual royalties shall be paid as follows: in anticipation of
substantial total annual royalties, and to be credited against the royalties
otherwise payable hereunder, four equal installments of one million dollars
($1,000,000), each within thirty (30) days after the end of each three month
period ending March 31, June 30, September 30 and December 31, the first such
payment being due on April 30, 1998 and within thirty (30) days of the end of
each year of this Agreement, any remaining royalties due under Exhibit F
("Annual Royalty Payment"). For each year during any of the option terms of
this Agreement royalty payments shall be based on actual sales as calculated
in accordance with Exhibit F payable quarterly and due within thirty (30)
days after the end of each three month period ending March 31, June 30,
September 30 and December 31.
12
b. LICENSEE agrees (i) to generate Territory Net Sales for each year
during which this Agreement is in force as specified in Exhibit F1 and (ii)
for each such year in which such sales exceed these minimum amounts, to pay
royalties as if its Territory Net Sales are at least equal to ninety-five
percent (95%) of Total Net Sales. LICENSEE agrees to use its best efforts to
have Territory Net Sales for the period October 1, 1997 through December 31,
1997 of at least, Eight Million Dollars ($8,000,000). Once LICENSEE's
cumulative payment of royalties under this Agreement and interest payable to
LICENSOR under the Secured Limited Recourse Promissory Note ("Note") between
LICENSOR and LICENSEE ("interest") exceed, respectively (i) Sixteen Million
Dollars ($16,000,000) paid in at any time during the initial term of this
Agreement, (ii) Six Million Five Hundred Thousand Dollars ($6,500,000) paid
in at any time during the first option term of this Agreement, (iii) Six
Million Dollars ($6,000,000) paid in at any time during the second option
term of this Agreement or (iv) Twenty-Six Million Dollars ($26,000,000) paid
in at any time during the entire term of this Agreement, then (i) LICENSEE's
covenant under Section 6.b.(i) above shall cease to have effect for the term
in question, and (ii) royalties thereafter shall be paid to LICENSOR in
accordance with Exhibit F as stated in Section 6.a. and 6.b(ii) above.
c. At the time of each Annual Royalty Payment, LICENSEE shall provide
to LICENSOR a written statement illustrating the calculation of the payment
due and the volume of all sales for each product covered by Exhibit B,
Section I, as modified by Section II. The statement should be certified by an
officer of LICENSEE to be complete and accurate and shall set forth a
detailed accounting of the aggregate amount of Territory Net Sales and Total
Net Sales of all Licensed Products shipped during the contract year.
LICENSOR may provide, in its sole and reasonable discretion, a statement
form, and LICENSEE agrees to supply the information requested on such form.
The parties agree that the form attached hereto as Exhibit F2 is acceptable.
In the event LICENSEE's Territory Net Sales do not equal or exceed
ninety-five percent (95%) of its Total Net Sales, LICENSEE may provide
detailed sales information only of its Total Net Sales.
7. PAYMENT TERMS
a. Without limiting LICENSOR's right to terminate this Agreement under
Section 15, below, in the event that LICENSEE fails to make timely payments
to LICENSOR under this Agreement, LICENSEE shall pay to LICENSOR on demand
the amounts due with interest at the rate of one and one-half percent (1.5%)
per month from the due date until paid. If this rate exceeds the maximum
interest rate allowable by law, then interest shall accrue at the maximum
rate allowable by law.
b. All payments required under this Agreement shall be in U.S. Dollars
and made payable to the order of "Ambra, Inc."
c. Acceptance by LICENSOR of any payments under this Agreement shall
not prevent LICENSOR at any later date within thirty-six (36) months from the
date of any payment from disputing the amount owed or from demanding more
information from LICENSEE regarding payments finally due, and such acceptance
of any payment by LICENSOR shall not
13
constitute a waiver of any breach of any term or provision of this Agreement
by LICENSEE if any such breach shall have occurred. Payment by LICENSEE of
any payments under this Agreement shall not prevent LICENSEE within twelve
(12) months from the date of such payment from disputing the amount owed or
from demanding from LICENSOR the repayment of any amounts overpaid by
LICENSEE; provided, however, that LICENSEE shall be entitled to reimbursement
for any overpayment made by LICENSEE discovered by an audit conducted by
LICENSOR of LICENSEE's books and records under Section 8.c. herein,
notwithstanding the date of any such audit.
d. LICENSEE acknowledges and agrees that any manner of payment other
than that stated herein, or as required by law, including, without
limitation, offsets, payment into an escrow account or to any other third
party, shall constitute a material breach of this Agreement.
8. BOOKS AND RECORDS
a. LICENSEE shall keep complete and accurate records of all Licensed
Products manufactured and of LICENSEE'S activities under this Agreement, and
shall make the same readily available to LICENSOR and its agents and
representatives at such reasonable times as LICENSOR may from time to time
request for inspection, copying and extracting.
b. Such books and records shall be kept in accordance with generally
accepted accounting principles, consistently applied, and shall be retained
by LICENSEE and kept available for at least three (3) years after termination
of this Agreement for possible inspection, copying, extracting and/or audit
by LICENSOR.
c. LICENSOR and its agents and representatives shall have the right to
conduct audits with respect to the books, records and all other documents and
materials in the possession or under the control of LICENSEE relating to this
Agreement, the cost of which shall be borne by LICENSOR. Any such audit
shall be done during normal business hours and upon reasonable notice to
LICENSEE. If any such audit, however, discloses that royalty payments due to
LICENSOR under this Agreement exceed the amount of payments actually made to
LICENSOR during the audited period by an amount greater than three percent
(3%) of the payments made, LICENSEE shall immediately pay the cost of the
audit, as well as unpaid royalties plus interest calculated from the date
such payment(s) were actually due until the date when such payment is, in
fact, actually made. In addition to the foregoing, if any such audit
discloses that payments due to LICENSOR under this Agreement exceed the
amount of payments actually made to LICENSOR by an amount greater than ten
percent (10%) of the payments made during the audited period ("Major Error
Audit"), LICENSOR shall be entitled, in addition to all other remedies
available to it and at its sole option, to an additional payment equal to ten
percent (10%) of the full amount of the unpaid royalties. If during an audit
of a subsequent period conducted within twelve (12) months of the completion
of a Major Error Audit, the payments due to LICENSOR under this Agreement
exceed the amount of payments actually made to LICENSOR by an amount greater
than ten percent (10%) of the payments made during the
14
audited period, LICENSOR shall be entitled, * and all other remedies
available to it and at its sole option, to immediately terminate the
Agreement.
d. No later than one hundred twenty (120) days after the close of
LICENSEE's fiscal year, LICENSEE shall provide LICENSOR with its annual
financial statements, audited or unaudited, prepared by an independent
certified accountant. If unaudited, an officer of LICENSEE shall certify
under penalty of perjury that the financial statements are true and correct,
and have been prepared in accordance with generally accepted accounting
principles, consistently applied.
e. LICENSOR agrees that it will maintain in confidence those records of
LICENSEE disclosed to LICENSOR pursuant to paragraphs 8.a., 8.c., and 8.d.
above and any other oral or written confidential information about LICENSEE's
business and product line disclosed to LICENSOR.
9. LABELING
LICENSEE agrees to use the proper trademark and copyright notices in
connection with the Marks in the Territory. Upon the execution of this
Agreement, LICENSEE shall no longer place orders in the Territory for
Licensed Products bearing any prior trademark and copyright notice in
connection with the Licensed Rights and will take reasonable steps to ensure
that such goods are no longer manufactured in the Territory; provided,
however, that LICENSEE shall not be required to remove prior trademark and
copyright notices already affixed to such garments or to unreasonably disrupt
work in progress; any other changes shall be subject to a reasonable phase-in
period. Where appropriate, such notices shall appear in the screen for any
screen-printed design, in the salvage of any fabric, in the neck label or
waist label of any Licensed Products, and on any label or tag affixed to the
Licensed Products or otherwise attached to the Licensed Products.
10. OWNERSHIP OF THE MARKS
a. LICENSEE agrees that it has no right to ownership in the Marks in
the Territory and, in furtherance thereof, hereby transfers and conveys all
rights, title and interest, if any, in the Marks to HUGO BOSS AG, and will
not at any time represent or authorize a Designated Manufacturer(s) to
represent that such manufacturer has any title or right of ownership in the
Marks.
b. LICENSEE agrees that nothing contained in this Agreement shall give
to LICENSEE or the Designated Manufacturer(s) any right, title or interest in
the Marks except the limited license granted to LICENSEE herein, that such
Licensed Rights are the sole and exclusive property of LICENSOR and that all
such uses by LICENSEE or the Designated Manufacturer(s) of the Licensed
Rights shall inure only to the benefit of LICENSOR.
15
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* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
c. LICENSEE agrees that it will not seek or obtain any registration of
the Marks in any name or participate directly or indirectly in such
registration without LICENSOR'S prior written permission. Subject solely to
the rights and interest granted herein, LICENSEE further agrees and
acknowledges that if it has obtained or obtains in the future, in the
Territory, any right, title or interest in the Marks, or in any marks which
are confusingly similar to the Licensed Rights, or in any other trademark or
service xxxx owned by LICENSOR, that LICENSEE has acted or will act as an
agent and for the benefit of LICENSOR for the limited purpose of obtaining
such registrations in the name and on behalf of LICENSOR. LICENSEE further
agrees to execute any and all instruments deemed by LICENSOR and/or its
attorneys or representatives to be necessary to transfer such right, title or
interest to LICENSOR.
d. LICENSEE agrees not to take any action which may in any way impair
LICENSOR's rights in and to the Marks, including, without limitation,
challenging or opposing, or raising or allowing to be raised, either during
the term of this Agreement or after its termination, on any grounds
whatsoever, any questions concerning, or objections to, the validity of the
Marks or LICENSOR'S rights therein, or any other trademarks or service marks
owned by LICENSOR containing the word BOSS in any manner.
e. LICENSEE agrees to reasonably assist LICENSOR in obtaining and/or
maintaining registration for the Licensed Rights including, without
limitation, by providing information regarding the Marks and samples of the
Licensed Products.
f. LICENSEE acknowledges that materials related to this Agreement and
uniquely and specifically associated with the Marks and/or the Licensed
Products (collectively "Works"), whether developed solely by LICENSEE or
jointly with others may qualify for copyright protection under applicable
local laws. LICENSEE agrees that such Works are to be deemed as Works "made
for hire" for the benefit of LICENSOR and that if such Works, by operation of
law or otherwise, are not Works "made for Hire," LICENSEE agrees (i) to
assign, and does hereby assign, to LICENSOR or its designee any and all of
LICENSEE'S right, title and interest in the copyright in such Works
throughout the world, and (ii) not to seek or obtain registration of such
copyright in its own name.
g. LICENSEE will and does hereby irrevocably appoint LICENSOR as its
respective attorney-in-fact for the limited purpose of executing any and all
documents and performing any and all other acts necessary to give effect and
legality to the provisions of this Section 10 of this Agreement. LICENSOR
agrees to provide LICENSEE with copies of all such documents it executes
under this Section 10.g.
11. INSURANCE
a. LICENSEE agrees to obtain and keep in full force and effect, during
the term of this Agreement, at its sole cost and expense, a policy of
insurance insuring against those risks customarily insured under
comprehensive general liability policies including, but not limited to,
"product liability" and "completed operations." Such policies of insurance
shall have
16
endorsements or coverage with combined single limits of not less than One
Million Dollars ($1,000,000) and shall name LICENSOR as an additional insured
thereunder. LICENSEE shall use reasonable efforts to obtain at a reasonable
cost an "advertising" rider and, if such rider is purchased, shall provide
that it cannot be canceled without thirty (30) days prior written notice to
LICENSOR. It is also agreed that the "other insurance" clause, if any, will
be deleted from such policy, that the insurance under such policy shall be
primary, and that other insurance in force is neither primary nor
contributing.
b. LICENSEE shall provide to LICENSOR, within thirty (30) days of the
Effective Date of this Agreement, a certificate showing proof that such
policy of insurance is in effect. In no event shall LICENSEE manufacture,
offer for sale, sell, advertise, promote, ship and/or distribute the Licensed
Products prior to the receipt by LICENSOR of such certificate of insurance.
c. LICENSEE agrees to give LICENSOR, or cause the insurer to give
LICENSOR, as the case may be, thirty (30) days prior written notice of any
reduction in limits or termination of such policy of insurance, or of any
intention on the part of LICENSEE not to pay the premium thereof.
12. NON-TRANSFERABILITY OF RIGHTS
a. LICENSEE shall not grant, assign, sublicense or otherwise convey or
transfer any rights inuring to LICENSEE or any obligations or duties owed by
LICENSEE to LICENSOR under this Agreement, without the prior written consent
of LICENSOR, and any attempted transfer or assignment shall be null and void.
LICENSOR shall consider in good faith any request for such consent and
promptly notify LICENSEE of LICENSOR'S decision, said decision to be in
LICENSOR's sole discretion. LICENSEE shall have the right to transfer or
assign its rights under this Agreement to an affiliate of LICENSEE (i.e., an
entity in control of, controlled by or under common control with LICENSEE),
provided that any such transfer or assignment does not in any way diminish,
extinguish, or adversely affect LICENSEE'S obligations to LICENSOR under this
Agreement. Nothing in this Section 12 is intended to prevent LICENSEE, its
partners or affiliates from offering and selling stock to the public.
LICENSOR shall provide LICENSEE with written notice if LICENSOR intends to
assign or transfer to any third party any of its rights or obligations under
this Agreement.
b. Notwithstanding anything to the contrary set forth in this
Agreement, LICENSEE shall be permitted to assign and transfer LICENSEE's
rights under this Agreement to any parent, subsidiary or other affiliate of
LICENSEE if LICENSEE or its successor in interest remains fully liable for
the performance of this Agreement by such assignee or transferee and
indemnifies LICENSOR with respect to any costs and damages LICENSOR may incur
because of such assignment or transfer.
17
13. INDEPENDENT CONTRACTOR
The parties hereby agree that LICENSEE is and shall be an independent
contractor and that no agency (except as specified in Section 10.g.), joint
venture or partnership is created by this Agreement. The legal relationship
of any person or entity performing services for LICENSEE shall be one solely
between such parties. Neither party shall incur any obligation in the name
of the other party without the prior written consent of that party.
14. INDEMNIFICATION
a. LICENSEE agrees to indemnify, defend and hold harmless LICENSOR and
HUGO BOSS AG from and against any and all claims paid, liabilities incurred
and all other out-of-pocket expenses and costs (including reasonable
attorney's fees, disbursement and other charges but excluding lost profits)
(collectively referred to as "Expenses") actually incurred by LICENSOR or
HUGO BOSS AG arising out of any breach by LICENSEE of its obligations under
this Agreement or any breach by any Designated Manufacturer of its
obligations under its agreement with LICENSEE, including, without limitation,
Expenses incurred by LICENSOR or HUGO BOSS AG in efforts to stop the
manufacture, distribution or sale of unauthorized product bearing the Marks,
or out of any defect whether obvious or hidden and whether or not present in
any sample approved by LICENSOR, in any product bearing a BOSS xxxx
manufactured, distributed or sold by or on behalf of LICENSEE (regardless of
whether such product was manufactured in the Licensed Territory) under or
arising from personal injury or property damage or out of any infringement of
any rights of any other person by reason of the design, manufacture,
distribution, advertisement, promotion, sale, possession or use of the Marks
or any Licensed Products or LICENSEE's and Designated Manufacturer(s)'
failure to comply with applicable law, regulations and standards.
b. LICENSOR agrees to indemnify, defend and hold harmless LICENSEE from
and against any and all claims paid, liabilities incurred and all other
Expenses (as defined above) actually incurred by LICENSEE arising out of any
breach by LICENSOR of its obligations, if any, under this Agreement or
LICENSOR'S or HUGO BOSS' failure to comply with applicable law, solely
attributable to LICENSOR'S or HUGO BOSS' direct conduct (and not the conduct
of LICENSEE.)
15. TERMINATION
a. In the event LICENSEE commits any of the accelerating acts (defined
at Section 15.f.) or fails to make payments required under Section 15.f.,
LICENSOR may terminate this Agreement in its entirety.
b. LICENSOR may terminate this Agreement as it pertains to any country
included in the Licensed Territory only upon any of the following events in
that country:
18
(i) A material breach by LICENSEE of any of the material terms and
conditions of this Agreement as it relates to a particular country, which
after due written notice of same from LICENSOR, remains uncured for a period
of thirty (30) days.
(ii) LICENSEE's failure to obtain compliance by any Designated
Manufacturer(s) with the list of locations required in Section 2.c.(vii)(A)
or Section 4b. It shall not be a breach of this Agreement, if,
notwithstanding the reasonable efforts of LICENSEE, a Designated Manufacturer
provides only a partial list of all manufacturing, processing and storage
facilities in the territory as required by Sections 2.c.(vii)(A) and 4.b.
herein, provided, however, that any such list as is provided includes all
significant locations. For purposes of a breach of LICENSEE'S obligation to
obtain lists of locations under Section 2.c.(vii)(A) or Section 4b., a cure
may be accomplished by, within thirty (30) days of receipt of a written
demand from LICENSOR, (A) delivering the required lists or (B) termination of
all business dealings with the Designated Manufacturer(s) at issue, as soon
as commercially feasible; provided however that as of the date of the written
demand from LICENSOR (and until a cure occurs), LICENSEE shall not enter into
any new manufacturing agreements or place any additional orders with such
noncomplying Designated Manufacturer(s) without the written consent of
LICENSOR; provided further that such termination shall not relieve LICENSEE
of its obligations to continue to enforce its rights against such Designated
Manufacturer(s) for breach of its obligations or LICENSEE's indemnity
obligations to LICENSOR under this Agreement.
(iii) LICENSEE's failure to obtain substantially full compliance by
any Designated Manufacturer(s) with the child labor restrictions in Section
2.c.(xxii). For purposes of a breach of LICENSEE's obligations under Section
2.c.(xxii), a cure may be accomplished by, within thirty (30) days of receipt
of a written demand, termination of all business dealings with the Designated
Manufacturer(s) at issue.
(iv) LICENSEE'S failure to obtain compliance by any Designated
Manufacturer(s) with any of the other material terms and conditions listed in
Section 2.c. (i-xxii) which, after due written notice of same from LICENSOR,
remains uncured for a period of thirty (30) days.
c. Termination shall be effective upon expiration of the applicable
cure period, if any, and receipt of written notice from LICENSOR of such
expiration. Upon any such termination, all of the rights and licenses granted
hereunder shall terminate. Any such termination by LICENSOR shall be without
prejudice to LICENSOR'S other rights and remedies for breach, including
damages.
d. If permitted under any applicable laws, including U.S. Bankruptcy
laws, LICENSOR may terminate this Agreement immediately upon: (i) the
insolvency of LICENSEE; (ii) the filing of a voluntary petition in bankruptcy
for liquidation by LICENSEE; (iii) the filing of an involuntary petition in
bankruptcy for liquidation against LICENSEE that is not vacated within one
hundred
19
twenty (120) days from the date of filing; (iv) the appointment of a receiver
or trustee for LICENSEE, provided that such appointment is not vacated within
one hundred twenty (120) days from the date of such appointment; or (v) the
execution by LICENSEE of an assignment for the benefit of all creditors
generally.
e. LICENSEE shall notify LICENSOR of any change in ownership of more
than fifteen percent (15%) of LICENSEE'S total outstanding equity (on a fully
diluted basis) in any transaction or series of related transactions.
LICENSOR may terminate this Agreement upon a Change of Control. For purposes
of this Agreement, "Change of Control" shall mean:
(i) (A) the sale of all or substantially all of the assets of
LICENSEE; (B) the sale of fifteen percent (15%) or more of the
equity of LICENSEE on a nonpublic sale; (C) any merger or
consolidation of the LICENSEE; or (D) the transfer of control
(as that term is defined in Rule 405 under Regulation C of the
Securities Act of 1933, as Amended), of LICENSEE in a public
offering, in each of the foregoing circumstances (i.e., (i)
(A), (B), (C) or (D)) to, or with any one or more of the
following entities or persons, or persons or entities under
common control or ownership with them: Brookhurst, Inc., Boss
Golf Co., Xxxxxxx Xxx, Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, Boss
Sportswear (USA), Inc., Xxxxx Xxxx, Xxxx Xxx, Boss
Manufacturing Co., American Home Products, Inc., Vista 2000,
Inc., X. X. Xxxx Co., and/or Xxxx Xxxxx; or
(ii) (A) the sale of all or substantially all of the assets of
LICENSEE; (B) the sale of fifty percent (50%) or more of the
equity of LICENSEE in a nonpublic sale; (C) any merger or
consolidation of the LICENSEE; or (D) the transfer of control
(as defined in Section 15.e.(i)) of LICENSEE in a public
offering, in each of the foregoing circumstances (i.e., (ii)
(A), (B), (C) or (D)) to, or with any entity engaged in the
manufacturing, distribution or sale (other than retail) of
clothing in direct competition with LICENSOR or HUGO BOSS AG,
(e.g., Zegna Corp., Xxxxx Karan Corp., Xxxx, Xxxxxxxx & Xxxx;
Xxxxxx Xxxxx Corp., Designer Holdings, Liz Claiborne, or
Xxxxxx Corp.) LICENSOR agrees that LICENSEE, its partners and
affiliates, may offer and sell stock to the public and,
subject to the provisions of this Section 15.e., nothing in
this Agreement shall prevent or interfere with LICENSEE, or
its partners or affiliates offering and selling stock to the
public.
f. In addition to the right of termination and all other available
remedies, any of the following acts by LICENSEE during the initial term shall
at LICENSOR'S option accelerate all payments that would have been payable
during the initial term had LICENSEE achieved Territory Net Sales equal to
four times the Territory Net Sales attributable to the fourth quarter
20
of 1997 in each of the years of the initial term of this Agreement and
require the immediate payment by LICENSEE to LICENSOR of the sum due and
payable throughout the initial term pursuant to Section 6 above, less the
cumulative payments made by LICENSEE to LICENSOR during this same period
under Section 6 above, but in no event shall the payment due be more than *
minus the cumulative interest previously paid under the note to LICENSOR
during the initial term of the Agreement: (i) a breach by LICENSEE of its
obligations to make the payments required by Sections 6 and 7 of this
Agreement or its obligations to achieve the minimum Territory Net Sales for
any year in accordance with Section 6.b.(i) (unless LICENSEE pays to LICENSOR
the difference between the amount actually paid in any such year and the
amount otherwise payable pursuant to this Agreement as if the applicable
minimum Territory Net Sales had actually been generated), which breach has
not been cured pursuant to the terms of this Agreement; (ii) LICENSEE'S
failure to manufacture any Licensed Products in the Licensed Territory, (iii)
any attempted termination of this Agreement by LICENSEE, except as expressly
permitted by this Agreement or as agreed to by the parties in writing during
the initial term of this Agreement; (iv) the manufacture, distribution or
sale by LICENSEE of any product bearing the marks BOSS/HUGO BOSS; HUGO/HUGO
BOSS; BALDESSARINI/HUGO BOSS; HUGO BOSS or any other trademarks owned by
LICENSOR or HUGO BOSS AG except those referenced in Section l.a. for the
products listed in Exhibit B, Section I as modified by Section II; (v) the
sale by LICENSEE of any product bearing a BOSS xxxx outside the United
States; (vi) any willful material breach of any term of this Agreement; (vii)
any attempt by LICENSEE other than as requested by LICENSOR or HUGO BOSS AG
to register or otherwise create or establish trademark rights in the word
BOSS in its own name anywhere outside the United States; or (viii) any act
described in Section 15.d. of this Agreement (collectively referred to as
"Accelerating Acts"). Any Accelerating Act(s) by LICENSEE during the first
option term of this Agreement shall at LICENSOR's option accelerate payment
of all payments payable during the first option term and require the
immediate payment by LICENSEE to LICENSOR of the sum of the payments due and
payable throughout the first option term pursuant to Section 6, had LICENSEE
achieved Territory Net Sales equal to four times the Territory Net Sales
attributable to the fourth quarter of 1997 in each of the years of the final
option term of this Agreement less the cumulative payments made by LICENSEE
to LICENSOR during this period under Section 6 above, but in no event shall
the payment due be more than * minus the cumulative interest previously paid
under the Note to LICENSOR during the first option term of the Agreement.
Any Accelerating Act(s) by LICENSEE during the second option term of this
Agreement shall at LICENSOR's option accelerate payment of all payments
payable during the second option term and require the immediate payment by
LICENSEE to LICENSOR of the sum of the annual payments due and payable
throughout the second option term pursuant to Section 6, had LICENSEE
achieved Territory Net Sales equal to four times the Territory Net Sales
attributable to the fourth quarter of 1997 in each of the years of the final
option term of this Agreement less the cumulative royalty payments made by
LICENSEE to LICENSOR during this same period under Section 6 above but in no
event shall the payment due be more than * minus the cumulative interest
previously paid under the Note to LICENSOR during the second option term of
the Agreement. The parties agree that this provision is not a liquidated
damages provision, but a quantification
21
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* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
of the benefit of the bargain to LICENSOR. In the event LICENSEE fails to
make immediate payment as required by this Section, any award, in arbitration
or otherwise, to LICENSOR for an Accelerating Act(s) of this Agreement by
LICENSEE shall include, but not be limited to, the payment required by this
Section, and such other relief as may be appropriate. In the event LICENSOR
exercises its option to demand accelerated payment as set forth above,
LICENSOR shall so notify LICENSEE in writing.
g. Either party may, by written notice to the other, terminate this
Agreement upon sale by LICENSEE of its United States trademark rights to BOSS
to LICENSOR or any of its affiliates (including parents).
h. In addition to all other available remedies, LICENSOR may, solely at
its option and upon written notice to LICENSEE, terminate this Agreement as
it pertains to a particular country in the Licensed Territory if substantial,
unauthorized sale or distribution of Licensed Products occurs (i) within any
such country and/or (ii) outside any such country (except for the United
States) where the unauthorized goods were manufactured, distributed or sold
by a Designated Manufacturer(s) in such country and is documented during (i)
each of three (3) consecutive quarters (a quarter being defined as any
three-month period beginning on January 1, April 1, July 1 or October 1) or
(ii) each of three (3) consecutive years.
i. LICENSEE shall have the option to terminate this Agreement at any
time, upon providing LICENSOR with ninety (90) days written notice, if all of
the following occur: (i) LICENSEE has used the BOSS xxxx as required by this
Agreement; (ii) LICENSEE is prohibited by a binding order of a court of
competent jurisdiction (which order has not been vacated within ninety (90)
days of issuance) from using the word BOSS in the Microgramma typestyle and
every variation thereof on a substantial portion (by sales volume) of the
Licensed Products; and (iii) there is no reasonable alternative available;
provided, however, that if such court order is based upon LICENSEE's use of
the Marks in a manner that is inconsistent with the requirements of this
Agreement, then LICENSOR, but not LICENSEE, shall have the option to
terminate this Agreement upon ninety (90) days written notice. In the event
this Agreement is terminated by LICENSEE under this Section 15.i, and
Territory Net Sales do not exceed that required under Exhibit F1 attached
hereto, royalties due shall be based on actual net sales as provided for in
Sections 6.a. and 6.b. above. Application of the minimum royalty shall be
pro rata based on the number of days in the period from January 1 in the year
of such termination until the day of the last sale permitted by the above
referenced court order.
j. Notwithstanding any other provision of this Agreement, upon
termination of this Agreement, LICENSEE (and its secured inventory lender),
shall be entitled, subject to the terms and conditions of this Agreement, on
a non-exclusive basis, for a period of nine (9) months from the date of
termination, to complete manufacture of Licensed Products in progress on the
date of termination, and to export such completed products and any products
in Licensee's inventory on the date of termination; provided, however, that
such rights as are granted herein apply only to orders placed and goods
manufactured in the ordinary course of LICENSEE's business. After
22
the expiration of such nine (9) month period, LICENSEE shall completely
remove the marks from any products not manufactured before the expiration of
such nine (9) month period.
16. RESULTS OF TERMINATION
a. Upon termination of this Agreement, subject to the terms of Section
15.j. above, all rights relating to the Licensed Products within the Licensed
Territory hereunder, shall immediately cease and LICENSEE shall:
(i) cease the manufacture of the Licensed Products except in
accordance with this Section 16;
(ii) cease all use of the Licensed Rights;
(iii) within thirty (30) days of termination, delete and henceforth
cease from making any reference to the Licensed Rights and Marks in, on or in
connection with any advertising, promotional or directory materials,
including any reference to having been previously a licensee of LICENSOR;
(iv) within ten (10) days of termination, deliver all packaging,
labels, tags and other materials and property (other than actual Licensed
Products) relating to this Agreement to LICENSOR; and
(v) within ten (10) days of termination, furnish LICENSOR with a
full and complete statement setting forth (A) the inventory of Licensed
Products manufactured or in the process of manufacture, including the
wholesale price thereof, and (B) production and distribution schedules for
the Licensed Products.
b. The termination of this Agreement shall not relieve LICENSEE of any
duties or obligations contained herein including, without limitation, the
obligation to pay royalties and interest and furnish required statements; nor
shall termination extinguish any rights of LICENSOR necessary to ensure an
expeditious conclusion of this Agreement, including, without limitation, the
right to inspect the books, records and facilities of LICENSEE and the right
to obtain prior written consents.
c. Upon any termination of this Agreement, other than termination
resulting from a breach by LICENSEE of this Agreement, LICENSEE shall be
liable to LICENSOR only for actual royalties accrued prior to termination and
royalties on any goods manufactured after termination under Section 15.j.;
provided, however, that nothing in this Section shall affect LICENSOR'S
rights or remedies for any post-termination breach by LICENSEE.
23
17. EQUITABLE RELIEF
The parties acknowledge that it will be impossible to measure in money
the damages that would be suffered by one if the other breaches or otherwise
fails to comply with the obligations imposed on it pursuant to this Agreement
and that, in the event of any such failure, the non-breaching party will be
irreparably damaged and will not have an adequate remedy at law. Therefore,
notwithstanding any other provision of this Agreement, the non-breaching
party shall be entitled to equitable relief, including, without limitation,
injunctive relief and/or specific performance to enforce such obligations
and, if any action should be brought in equity to enforce any provisions of
this Agreement, the breaching party shall not raise the defense that there is
an adequate remedy at law. Except as expressly provided in this Agreement,
all specific remedies provided for in this Agreement are cumulative and are
not exclusive of one another or of any other remedies available at law or in
equity.
18. LEGAL ACTION
a. LICENSEE agrees to reasonably cooperate with and assist (and to take
reasonable steps to require the Designated Manufacturer(s) to cooperate with
and assist) LICENSOR in protecting and defending the Marks, and shall
promptly notify LICENSOR in writing of any infringements, claims or actions
by others in derogation of the Marks in the Territory of which LICENSEE
becomes aware; provided, however, that LICENSOR shall have the sole right to
determine whether any action shall be taken on account of such infringements,
claims or actions. LICENSEE shall not take any action on account of any such
infringement, claim or action without the prior written consent of LICENSOR,
which consent shall not be unreasonably withheld. In the event LICENSOR
grants written permission to LICENSEE to take action on account of any such
infringement, claim or action, LICENSEE shall bear all costs and expenses
related thereto and shall not settle or otherwise compromise any claim
without LICENSOR's prior written approval, which shall not be unreasonably
withheld.
b. In the event LICENSOR initiates or defends any legal proceedings on
account of any infringements, claims or actions by others in derogation of
the Licensed Rights, LICENSEE agrees to cooperate with and assist LICENSOR to
the extent reasonably necessary to protect the Licensed Rights including, but
not limited to, being joined as a necessary party to such proceedings. Any
such legal proceedings which do not result from LICENSEE's breach of this
Agreement shall be initiated or defended by LICENSOR; provided, however, that
each party shall bear its own costs and expenses in any such legal
proceedings.
c. In the event LICENSOR determines, in its sole discretion, that it is
not in the best interest of LICENSOR to initiate any legal proceedings on
account of any such infringements, claims or action, or in the event LICENSOR
settles or resolves any such proceedings which may be initiated, LICENSEE
shall have no claim against LICENSOR for damages or otherwise, nor shall the
same affect the validity or enforceability of this Agreement.
24
19. NOTICES
All notices, requests or other communications required or permitted
hereunder shall be given or made in writing and shall be (i) delivered
personally (including commercial carrier), (ii) sent by registered or
certified airmail, return receipt requested, postage prepaid or (iii) sent by
telecopier, addressed to the party to whom they are directed at the following
addresses, or at such other address as may from time to time be designated by
such party to the others in accordance with this Section 19:
If to LICENSOR, to:
Ambra Inc.
c/o Hugo Boss USA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx XxXxxx
Telecopier: 212/940-0619
Hugo Boss AG
Xxxxxxxxxxxxx 00
X-00000 Xxxxxxxxx
Xxxxxxx Xxxxxxxx of Germany
Attention: General Counsel
Telecopier: 00-0000-000000
With a copy to:
Coudert Brothers
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: 202/775-1168
and
Howrey & Simon
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: 202/383-6610
25
If to LICENSEE, to:
I. C. Xxxxxx & Company L.P.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President and Co-Chief Executive Officer
Telecopier: 410/558-2096
I. C. Xxxxxx & Company L.P.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman and Co-Chief Executive Officer
Telecopier: 212/695-7579
With a copy to:
Piper & Marbury L.L.P.
Xxxxxxx Center South
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: 410/576-1064
Any notice, request or other communications shall be deemed to have been
given and to be effective upon receipt or refusal by the addressee. Any
party may change its address for notices hereunder, effective upon giving of
notice of such change hereunder to the other parties.
20. FOREIGN TAXES AND GOVERNMENT APPROVALS
a. LICENSEE agrees to obtain, all government approvals and
registrations which are required under the laws of the Territory as a result
of LICENSEE'S activities in connection with this Agreement and to pay any
taxes or fees required by any such foreign government as a result of
LICENSEE's activities under this Agreement other than any taxes payable by
LICENSOR or its affiliates as a result of its receipt of any payments
hereunder.
b. LICENSEE agrees to pay one-half (1/2) of the reasonable legal fees
necessary to have this Agreement reviewed by an attorney skilled in the laws
of any foreign country to which this Agreement relates and modified to
conform with local laws, if necessary. Wherever required, LICENSEE agrees to
pay one-half (1/2) of the reasonable legal fees necessary to have LICENSEE
registered as Registered User or a Permitted User of the Licensed Rights.
Prior to executing this Agreement LICENSOR has given LICENSEE an estimate of
all such anticipated legal fees, and LICENSEE has had at least ten (10)
business days following receipt of such estimate to determine whether it
wishes to forego entering into this Agreement as to any country or countries.
26
c. LICENSEE shall not be required to pay fees or expenses which arise
out of LICENSOR's efforts to protect and defend LICENSOR's intellectual
property rights within the Territory which were not otherwise caused by
activities of LICENSEE in connection with Agreement.
21. GOVERNING LAW AND RESOLUTION OF DISPUTES
a. The validity, construction, operation and effect of any and all of
the terms and provisions of this Agreement shall be determined and enforced
in accordance with the laws of the State of New York without giving effect to
principles of conflicts of law thereunder except as to matters involving
issues of foreign trademark law, in which case the applicable foreign
trademark laws shall be applied. In the event any legal action becomes
necessary to enforce or interpret the terms of this Agreement, the parties
agree that such action will be brought in the U.S. District Court for the
Southern District of New York, and the parties hereby submit to the
jurisdiction of such court; provided, however, that any party may enforce an
arbitration award in any court of competent jurisdiction located in New York
City and the parties hereby submit to the jurisdiction of any such court.
b. Nothing in this Agreement is intended to or shall prevent LICENSOR
and/or HUGO BOSS AG from enforcing any of its rights in any jurisdiction
anywhere in the world to prevent the unauthorized manufacture, sale or
distribution of Licensed Products.
22. BINDING EFFECT
This Agreement shall be binding on the parties, their parents,
subsidiaries, successors and assigns (if any), and they each warrant that the
undersigned are authorized to execute this Agreement on behalf of the
respective parties.
23. CONFIDENTIALITY
a. This Agreement, its terms, conditions and provisions, and the trade
secrets, confidential information and property of the parties are strictly
confidential and except as provided herein, shall not be disclosed by either
party to any other person or entity without the prior written consent of the
other party, or as required by law, (i) except financial institutions,
(including, but not limited to, investment bankers and underwriters),
Designated Manufacturer(s), government officials, attorneys and accountants
with which the parties transact business; provided, however, that such third
parties agree in writing to abide by the terms of this provision, or (ii)
except as appropriate for LICENSOR to protect and/or enforce the Marks and
Property. LICENSOR and LICENSEE further agree that disclosure of this
Agreement within their organizations shall be limited to their respective
directors, officers and employees with a "need to know" and that except as
provided herein third parties will not be advised of the relationship between
the parties except as is necessary by law; to carry out the purposes of this
Agreement; or to protect the rights of either party. Nothing in this
provision is intended to prevent or substantially interfere with LICENSEE's,
its partners, affiliates or its stockholders'
27
ability to make all disclosures required by law pursuant to offering and
selling stock to the public. Notwithstanding the provision of this Section
23.a, in the event of published reports regarding the Agreement or LICENSEE's
relationship with LICENSOR or HUGO BOSS AG, LICENSOR, HUGO BOSS AG and
LICENSEE agree to cooperate in good faith to provide appropriate public
responses and comments and the parties shall be free to trade accurate public
statements which are appropriate to correct or clarify the public record.
b. Notwithstanding the provisions of Section 23.a. of this Agreement,
LICENSEE may supply to its agents, Designated Manufacturers or appropriate
government officials a copy of Exhibit G or convey the information in Exhibit
G to such individuals orally. To the extent LICENSEE is unable to import or
export Licensed Products by the actions of any government and LICENSEE cannot
through due diligence and the use of Exhibit G overcome such actions because
of the requirements of Section 23.a., LICENSOR will cooperate with LICENSEE,
including submitting written materials from LICENSOR or its parent or
affiliates as necessary to appropriate government officials, so as to enable
LICENSEE to obtain all necessary clearances; provided, however, that the
failure of LICENSEE to obtain any such clearance shall not give rise to any
claim whatsoever against LICENSOR.
24. GENERAL PROVISIONS
a. No waiver or modification of any of the terms or provisions of this
Agreement shall be valid unless contained in a written document signed by
both parties. No course of conduct of dealing between the parties shall act
as a waiver of any provision of this Agreement.
b. This Agreement, including the entirety of Exhibits A through H1
attached hereto, contains the entire understanding of the parties as to the
subject matter herein, and there are no representations, warranties, promises
or undertakings other than those contained herein. This Agreement supersedes
and cancels all previous agreements between the parties hereto. This
Agreement shall be construed against both parties equally, regardless of the
party that drafted it. Notwithstanding the foregoing, nothing herein shall
affect the validity or enforceability of the Settlement Agreement and related
documents between the parties which terminated the litigation captioned Hugo
Boss Fashions, Inc. et al. v. Brookhurst, Inc., et al., Civil Action Xx. 00
Xxx 0000 (XXX).
c. If any provision of this Agreement shall be held to be void or
unenforceable, such provision will be treated as severable, leaving valid the
remainder of this Agreement.
d. Wherever necessary to carry out the intent of the parties, certain
provisions of this Agreement including, without limitation, Sections 3, 8,
10, 14 and 16, shall survive the expiration or termination of this Agreement
and shall continue in full force and effect.
e. The parties agree to execute promptly any documents necessary to
effectuate the purpose and intent of this Agreement.
28
f. Captions and paragraph headings used in this Agreement are for
convenience only and are not a part of this Agreement and shall not be used
in interpreting or construing it.
g. This Agreement may be executed in any number of duplicate
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
25. ARBITRATION
a. In order to expedite the resolution of legal disputes, the parties
agree to have disputes arising in connection with this Agreement finally
settled in accordance with the rules established in Exhibit H, which decision
shall be binding on the parties. The parties further agree that the first
such arbitration proceeding initiated by either party shall be conducted at a
location and under the auspices and arbitration rules (either the American
Arbitration Association Rules or the Rules of Conciliation and Arbitration of
the International Chamber of Commerce) selected by the non-complaining party;
provided that English shall be the official language of all arbitration
proceedings. For all subsequent arbitrations, the selection of location and
choice of rules shall alternate between the parties, i.e., if the LICENSOR is
the complaining party in the first arbitration under this Section, LICENSEE
shall select the location and choice of rules for that arbitration and for
the third, fifth, seventh, et seq. arbitrations, and LICENSOR shall select
the location and choice of rules for the second, fourth, sixth, et seq.
arbitrations. The parties further agree that notwithstanding this provision,
either party may, consistent with the provisions of Section 17 herein, seek
immediate injunctive relief in court prior to the initiation or pending
resolution, of any dispute in arbitration. If the non-prevailing party does
not comply with an arbitration decision, the prevailing party therein may
immediately enforce the arbitration decision in an equitable proceeding in
court with both parties' court costs and related attorney's fees paid by the
non-prevailing party in the arbitration, unless the arbitration decision is
modified, or not upheld or enforced, in which case each side shall bear its
own costs and attorney's fees. Notwithstanding anything in this Section
25.a., LICENSOR or HUGO BOSS AG may seek to enforce any of its rights to
prevent the unauthorized manufacture, sale or distribution of Licensed
Products against any entity in any tribunal anywhere in the world.
b. Notwithstanding anything in this Agreement, the parties agree that
disputes arising under Sections 4.a., 4.e., 4.f., 4.i., and 5.c. herein, may,
at the option of either party, be finally settled in accordance with the
expedited arbitration procedures set forth in Exhibit H1, which decision
shall be binding on the parties.
c. The parties agree that any decision required by this Agreement that
is committed to a party's "sole discretion" shall not be the subject of
arbitration; any decision required by this Agreement that is committed to a
party's "sole reasonable discretion" or "reasonable discretion" may be the
subject of arbitration.
d. The parties agree that in any arbitration proceeding brought under
this Section 25 where the interests of justice so require the arbitrator(s)
shall have the discretion to require one
29
party to pay some or all of the costs and expenses, including legal fees,
incurred by the other party.
26. HUGO BOSS AG GUARANTY
HUGO BOSS AG hereby irrevocably and unconditionally guaranties to
LICENSEE the full and timely performance of LICENSOR's obligations to
LICENSEE under this Agreement.
IN WITNESS WHEREOF, the parties agree that this Agreement shall take
effect as of the date first written above.
AMBRA, INC., a Delaware corporation
By: /s/ Jorg-Xxxxx Xxxxxx
----------------------------------
Name: Jorg-Xxxxx Xxxxxx
Title: Chairman
By: /s/ Xxxx-Xxxxxx Xxxxxx
----------------------------------
Name: Xxxx-Xxxxxx Xxxxxx
Title: Vice President
HUGO BOSS AG, a corporation of the Federal
Republic of Germany
By: /s/ Jorg-Xxxxx Xxxxxx
----------------------------------
Name: Jorg-Xxxxx Xxxxxx
Title: Chief Financial Officer
By: /s/ Xxxx-Xxxxxx Xxxxxx
----------------------------------
Name: Xxxx-Xxxxxx Xxxxxx
Title: Attorney-in-Fact
30
I.C. XXXXXX & COMPANY L.P., a Delaware
limited partnership
By: I.G. DESIGN, INC., a Delaware
corporation, its general partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and Co-Chief
Executive Officer
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Co-Chief
Executive Officer
31
FOREIGN MANUFACTURING RIGHTS AGREEMENT
LIST OF EXHIBITS
Exhibit A: Specifications and limitations on LICENSEE's use of the Marks
Exhibit B: List of products on which LICENSEE is permitted to use the Marks
Exhibit C: List of countries
Exhibit C1: List of pending/not filed countries
Exhibit C2: List of special circumstances
Exhibit D: List of LICENSOR Agreements
Exhibit E: Prohibited stitching designs
Exhibit F: Royalty payment schedule
Exhibit F1: Minimum Territory Net Sale schedule
Exhibit F2: Royalty calculation sheet
Exhibit G: Customs letter
Exhibit H: Non-expedited arbitration provision
Exhibit H1: Expedited arbitration provisions
EXHIBIT A
THE MARKS
BOSS
("The Microgramma Typestyle")
[LOGO]
In using these Marks on Licensed Products, LICENSEE will comply with the
following:
1. LICENSEE shall use the phrase "BOSS by I G Design" (or such other
name as approved by LICENSOR) on all interior labels, tags and other interior
identifiers, and on all temporary or removable exterior labels, tags,
flashers, jokers, hang tags, and similar items, consistent with the rules in
section 4 below. In addition, the phrase "by I G Design" shall be prominently
visible; this requirement is satisfied when the prominence, use, and format
of the phrase "BOSS by I G Design" are similar to the exemplars shown in
Attachment 1 to this Exhibit A or as to tops satisfies the criteria set forth
in Section 9.a.(iii) below. Notwithstanding the exemplars shown in Attachment
1 to this Exhibit A, for all purposes under this Agreement where the word
"BOSS" is smaller than one inch, the ratio of the word "BOSS" to the phrase
"by I G Design" shall be no less than 4:1; in all other uses the ratio shall
be no less than 5:1.
2. On all Licensed Products other than Bottoms (Bottoms being defined
as jeans, casual pants, slacks, trousers, shorts, and overalls and shortalls)
LICENSEE shall use the phrase "BOSS by I G Design" (or such other name as
LICENSOR approves) as a permanent exterior means of identification similar to
the exemplars shown in Attachment 1 to this Exhibit A.
3. In addition to the use of the phrase "BOSS by I G Design" (or such
other name as approved by LICENSOR) as required by Section 1 of Exhibit A,
LICENSEE may also use the word "BOSS" without the phrase "by I G Design"
permanently affixed to the exterior of any Licensed Product.
4. On all Bottoms:
a. All Bottoms will bear either (i) a pocket flasher, (ii) a waist
band ticket, or (iii) some other form of temporary, removable exterior
identification bearing the phrase "BOSS by I G Design" (or such other name as
LICENSOR approves) or a permanently affixed "BOSS by I G Design" (or such
other name as LICENSOR approves) exterior marking, as illustrated by the
exemplars shown in Attachment 1 to this Exhibit A; provided, however, that
all temporary removable exterior identification must use the phrase "BOSS by
I G Design" as illustrated by the exemplar shown in Attachment 1 to this
Exhibit A.
b. If the word "BOSS" whether used alone or with any other word,
is used on fly labels on Bottoms, the letters of the word "BOSS" must be
slanted no less than nineteen (19) degrees as shown in Attachment 6B to this
Exhibit A.
c. If the word "BOSS" is used on a signature leather patch on a
rear jeans pocket, (i) the word BOSS whether used alone or with any other
word except I G Design (or such other name as LICENSOR approves) will be
slanted no less than twenty-four (24) degrees, as illustrated by the examples
shown in Attachment 4 to this Exhibit A; or (ii) the phrase "BOSS/I G Design"
(or such other name as LICENSOR approves) will be used in a non-justified 4:1
ratio on the leather patch consistent with the terms of Section 5.d. below;
or (iii) the phrase
"Boss/I G Design" (or such other name as LICENSOR approves) will be otherwise
permanently affixed to the garment, similar to the exemplar shown in
Attachment 1 of this Exhibit A.
5. Where the word "BOSS" does not appear immediately adjacent to the
phrase "I G Design" (or such other name as LICENSOR approves), the word
"BOSS" may appear either in capital letters of equal size, or, if the
individual letters comprising B-0-S-S are of different sizes, within
seventy-five percent (75%) of any other letter; provided, however, that one
or more of the following rules are met:
a. The word "BOSS" is incorporated into a graphic environment as
illustrated by the acceptable exemplars shown in Attachment 2 to
this Exhibit A; not all graphic environments are acceptable as
illustrated by the unacceptable exemplars shown in Attachment 2 to
this Exhibit A; or
b. All of the letters of "BOSS" are distorted as illustrated by the
acceptable exemplars shown in Attachment 3 to this Exhibit A; not
all distortions are acceptable as illustrated by the unacceptable
exemplars shown in Attachment 3 to this Exhibit A; or
c. The word "BOSS" appears other than in the Microgramma typestyle,
the non-Microgramma typestyle having first been approved in
accordance with the provisions of Section 10 of this Exhibit A; or
d. All of the letters of "BOSS" are slanted as follows:
(i) If used with no vertical or angled lines, then no less than
twenty-two (22) degrees, as illustrated by the exemplar shown
in Attachment 5 to this Exhibit A; or
(ii) If used with vertical or angled lines as shown in Attachment
6A, then no less than nineteen (19) degrees, as illustrated by
the exemplar shown in Attachment 6B of this Exhibit A.
e. The requirements of this Section 5. a.-d. do not apply if the word
"BOSS" is used with the letters appearing in a vertical (up and
down) manner generally consistent with the acceptable exemplars
shown in Attachment 7A to this Exhibit A. Not all vertical uses of
the word "BOSS" are acceptable as illustrated by the unacceptable
exemplar shown in Attachment 7B to this Exhibit A in which case the
requirements of this Section 5. a.-d. apply.
f. All of the foregoing rules except 5.d. shall apply to headwear.
g. In the case of belts, LICENSEE may use the word "BOSS" alone,
without the phrase "I G Design", (or such other name as approved by
LICENSOR) where the Xxxx appears only on the belt buckle; where the
xxxx appears elsewhere on the exterior of the belt, it shall
incorporate the phrase "I G Design."
6. Any two-line logo or design using the word "BOSS" shall not have
justified margins or substantially justified margins.
7. LICENSEE shall not use words which indicate that its product is the
only or first BOSS product, e.g., "authentic," "genuine" or "original,"
except that LICENSEE may use such words to directly modify the phrase "I G
Design" (or such other name as LICENSOR approves).
8. LICENSEE shall not use the terms BOSS AMERICA, BOSS GOLF, GOLF, HUGO
BOSS, HUGO, BALDESSARINI, WORLDWIDE, EUROPEAN, TENNIS, SKI, FORMULA 1,
MOTORSPORT, WINDSURFING, SAIL, GERMAN or any other words that are similar in
sound, sight or meaning, as exemplified in Attachment 8 to this Exhibit A.
The parties agree that LICENSEE may use the phrases "U.S.A." and "United
States" on Licensed Products, including in graphic depictions with or near
the Marks; provided, however, that such words are not incorporated into a
corporate identity, brand, or product extension logo with the word "BOSS."
In addition, LICENSOR, by itself or on behalf of HUGO BOSS AG or LICENSEE
may, from time to time, submit to each other exemplars of logos, designs or
decorative motifs which they are using or plan to use in the next selling
season, provided that such logos, designs, or decorative motifs shall not
have been used by the other party. The party so notified shall not use any
such logos, designs or decorative motifs, or anything similar to them in the
following selling season, without the other party's written permission;
provided, however, that either party may use logos, designs or decorative
motifs that are standard in the industry. Notwithstanding the foregoing,
LICENSEE shall not use any design or decorative motif similar to the BOSS
SPORT patch shown in Attachment 9 to Exhibit A.
9. For purposes of this Agreement, "Polo shirt" shall mean a pullover
shirt for sportswear that is made of knitted fabric and has short or long
sleeves and a turnover collar or a round banded collar and placket. In
addition to all other rules herein applicable to tops, LICENSEE may use the
word "BOSS" by itself on the exterior of polo shirts only in accordance with
the following:
a. Traditional Button Placket Knit Collar Style. To the extent
LICENSEE uses the word "BOSS" by itself on the exterior left breast
area of polo shirts with button through plackets, knit turnover
collars and traditional coloration and designs, the following rules
shall apply:
(i) on the exterior of men's shirts, the size of the word "BOSS"
shall be no smaller than three (3) inches long by five eighths
(5/8) inches tall; on the exterior of boys' and women's
shirts, the size of the word "BOSS" shall be no smaller than
two and three-eighths (2 3/8) inches long by seven sixteenths
(7/16) inches tall;
(ii) The word "BOSS" shall be slanted no less than 24';
(iii) The phrase "I G Design" shall be prominently visible.
This requirement shall be satisfied by the following:
the phrase shall appear and be visible on the outside
crease of one sleeve; the typestyle shall be Microgramma;
and the size of the letters shall be no less than one
fourth the size of the letters used for the word "BOSS"
on the exterior left breast.
(iv) The color of the stitching on the shirt bearing the word
"BOSS" on the left breast area and the phrase "I G Design" on
the sleeve must be the same and clearly contrast with the
color of the shirt fabric, e.g., black on white; red, blue or
green on yellow; but not combinations like dark blue on light
blue; dark xxxx on black; dark green on dark blue. Acceptable
and unacceptable exemplars are shown in Attachment 10 to this
Exhibit A.
b. All Other Traditional Styles. To the extent LICENSEE uses the
word "BOSS" by itself on the exterior left breast area of polo shirts with
non-button through plackets and traditional coloration and designs, the
phrase "BOSS by I G DESIGN" required by Section 2 of this Exhibit A shall be
located on the top half of the garment and shall be prominently visible.
This latter requirement is satisfied when the prominence, use and format of
the phrase "BOSS by I G Design" are similar to the exemplars shown in
Attachment 1 to this Exhibit A or satisfies the criteria set forth in Section
9.a.(iii) above.
c. Non-traditional Styles. To the extent LICENSEE uses the word
"BOSS" by itself on polo shirts other than those described in Sections 9-a.
and 9.b. of this Exhibit A, no additional rules shall apply.
d. Exemplars of acceptable shirts for each category described in
this Section 9.a., 9.b. and 9.c. are depicted in Attachment 11 hereto.
10. Prior to use, LICENSEE may submit to LICENSOR for approval
typestyles other than Microgramma for the word "BOSS", provided those
typestyles are less similar to the typestyles used by LICENSOR than the
Microgramma typestyle used by LICENSEE. LICENSEE shall not use any such
typestyle unless LICENSOR, in its sole reasonable discretion, has approved
such use in writing.
ATTACHMENT 1
TO EXHIBIT A
o Exemplars of interior and exterior permanent/temporary labels, tags, etc.
with acceptable "BOSS by I G Design."
BMA-1368 -- info tag [Graphic Logo]
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
BMA-1241R -- [Graphic Logo]
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
Jr. Hang Tag/BJ-537W
FRONT
[Graphic Logo]
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
BMA-458 -- [Graphic Logo]
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
Jr. Hang Tag/BJ-537
BACK
[Graphic Logo]
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
[Graphic Logo]
BMA-1242
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE
THE RATIO REQUIREMENTS AS OTHERWISE
PROVIDED BY THIS EXHIBIT A
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 2
TO EXHIBIT A
o Exemplars of acceptable graphic environments.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Jeans
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 3
TO EXHIBIT A
o Exemplars of acceptable distorted letters.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 4
TO EXHIBIT A
o Exemplars of 24(degree) slant.
[Graphic Logo]
ATTACHMENT 5
TO EXHIBIT A
o Exemplars of 22(degree) slant.
[Graphic Logo]
ATTACHMENT 6A
TO EXHIBIT A
o Exemplars of vertical alignment.
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Jeans
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Jeans
[Graphic Logo] -- Jeans
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo] -- Jeans
[Graphic Logo]
ATTACHMENT 6B
TO EXHIBIT A
o Exemplars of 19(degree) slant.
[Graphic Logo]
ATTACHMENT 7A
TO EXHIBIT A
o Exemplars of acceptable vertical BOSS logos.
[Graphic Logo] -- Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 7B
TO EXHIBIT A
o Exemplars of unacceptable vertical BOSS logos.
[Graphic Logo]
ATTACHMENT 8
TO EXHIBIT A
o Exemplars of forbidden words.
AMERICAN BOSS
BOSS AMERICAN
BOSS OF AMERICA
BOSS AMERIKA
BOSS AMERICAS
BOSS GOAL
YUGO
HUGE
BALDISSARENE
GLOBAL
CONTINENTAL
EUROPE
BAVARIAN
BAVARIA
GERMANY
INTERNATIONAL
ATTACHMENT 9
TO EXHIBIT A
o The BOSS Sport Patch
[Graphic Logo]--Shirt
[Graphic Logo]
ATTACHMENT 10
TO EXHIBIT A
o Exemplars of acceptable coloration for "BOSS by I G Design" on polo
shirts.
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
[Graphic Logo] -- Shirt
o Exemplar of unacceptable coloration for "BOSS by I G Design" on polo
shirts.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 11
TO EXHIBIT A
o Exemplar of acceptable shirts under Exhibit A, Section 9.a.
[Graphic shirts]
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
[Graphic shirts]
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
o Exemplar of acceptable shirts under Exhibit A, Section 9.b.
[Graphic Logo] -- Shirts
[Graphic shirts]
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
o Exemplar of acceptable shirts under Exhibit A, Section 9.c.
[Graphic shirts]
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
[Graphic shirts]
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
[Graphic Logo] -- Shirts
EXHIBIT B
I. LICENSED PRODUCTS
A. Men's Apparel
1. Sportswear and Activewear. All sportswear and activewear clothing
other than the exclusions listed below. All fabrications may be used.
2. Outerwear. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible,
lined, unlined, filled and/or fabric treated (waterproofed, coated,
etc.) and may have detachable sleeves, hoods and/or interlinings.
Lengths of such garments shall be 22" to 60". All fabrications may be
used except fur (except as trim) and leather (except as trim).
3. Headwear. All sports hats, visors and caps.
4. Swimwear. All types of swimwear.
5. Jogging Suits. All types of warm-ups and jogging suits of any
fabrication.
6. Belts. Belts bearing the Xxxx provided that such belts shall be sold
only as part of a Bottom and shall not be made out of leather.
B. Women's Apparel
1. Sportswear and Activewear. All sportswear and activewear clothing for
juniors, contemporary, misses and large sizes other than the
exclusions listed below. All fabrications may be used.
2. Outerwear. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible,
lined, unlined, filled and/or fabric treated (waterproofed, coated,
etc.) and may have detachable sleeves, hoods and/or interlinings.
Lengths of such garments shall be 22" to 60". All fabrications may be
used except fur (except as trim) and leather (except as trim).
3. Headwear. All sports hats, visors and caps.
4. Swimwear. All types of swimwear.
5. Jogging Suits. All types of warm-ups and jogging suits of any
fabrication.
6. Belts. All belts bearing the Xxxx provided that such belts shall be
sold only as part of a Bottom and shall not be made out of leather.
7. Other. Women's knit garments to be worn on the upper torso that are
either snapped or fixed through the crotch and the top portion of
which may be a halter, shoulder strap, short sleeve or long sleeve.
C. Children's Apparel
1. Children's Sportswear and Activewear. All sportswear and activewear
clothing other than the exclusions listed below. All fabrications may
be used.
2. Outerwear. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible,
lined, unlined, filled and/or fabric treated (waterproofed, coated,
etc.) and may have detachable sleeves, hoods and/or interlinings. All
fabrications may be used except fur (except as trim) and leather
(except as trim).
3. Headwear. All sports hats, visors and caps.
4. Swimwear. All types of swimwear.
5 Jogging Suits. All types of warm-ups and jogging suits of any
fabrication.
6. Belts. All belts bearing the Xxxx provided that such belts shall be
sold only as part of a Bottom and shall not be made out of leather.
D. Other
All apparel, including uniforms and work clothes, which is intended to
be worn solely and exclusively while persons are performing the normal
duties of their employment.
II. PRODUCTS BEARING A BOSS XXXX THAT LICENSEE SHALL NOT MANUFACTURE
A. Notwithstanding the foregoing, the parties agree that Licensed Products
do not include any of the following men's, women's or children's apparel:
1. All styles of tailored clothing, furnishings and accessories,
including but not limited to tuxedos, gowns and evening wear, sportcoats,
blazers, jackets, suits, dress pants, career apparel including blouses,
skirts and dresses, raincoats, top coats, dress shirts, ties, dress vests,
hosiery (including but not limited to socks, stockings and hose), and
leather belts.
2. All types of leather clothing (although leather trim may be used on
all products listed in Section 1);
3. All styles of shoes and other footwear.
4. Clothing designed and sold for the primary purpose of engaging in
golf, tennis, skiing, motor sports, windsurfing or sailing.
5. Except as described in Exhibit B Section I.B.7. above, bodywear,
including but not limited to underwear (including tee shirts intended to be
worn as underwear); loungewear and intimate apparel; and sleepwear and
robes.
B. Unless otherwise agreed to by the parties, Licensed Products shall not
include any non-apparel products of any kind.
EXHIBIT C
OVERSEAS MANUFACTURING RIGHTS GRANTED
BAHRAIN OMAN
BANGLADESH PEOPLES REPUBLIC OF CHINA
BRAZIL PAKISTAN
CANADA PERU
COSTA RICA PHILIPPINES
XXXXXXXXX XXXXXXXX XXXXX
XXXXX XXXXXXXX XX XXXXX XXXXX
XXXXXXX SAIPAN
HONG KONG SAUDI ARABIA
INDIA SINGAPORE
INDONESIA TAIWAN
MACAO THAILAND
MAURITIUS TURKEY
MEXICO VIETNAM
MONGOLIA
EXHIBIT C1
APPLICATIONS PENDING* OR NOT FILED**
BOTSWANA* MADAGASCAR**
EL SALVADOR* NEPAL* *
GUATEMALA* REPUBLIC OF MALDIVES**
HONDURAS* SEYCHELLES*
JAMAICA* SRI LANKA*
LESOTHO** UNITED ARAB EMIRATES*
EXHIBIT C2
SPECIAL CIRCUMSTANCES
COLOMBIA
MALAYSIA
SOUTH AFRICA
EXHIBIT D
List of LICENSOR Agreements pursuant to Paragraph 2.h.
Concurrent Use Agreement between Hugo Boss and Reebok, dated April 1, 1997
Agreement between Hugo Boss and Levi Xxxxxxx, dated September 1, 1995
Concurrent Use Agreement between Hugo Boss and Xxxxxxxx-Xxx Xxxxx Corporation,
dated January 10, 1995
EXHIBIT E
o Prohibited stitching designs.
[PHOTOGRAPH OF JEANS]
[GRAPHIC OMITTED]
EXHIBIT A
Int. Cl.: 25
Prior U.S. Cl.: 39
Reg. No. 1,139,254
United States Patent and Trademark Office Registered Sep. 2, 1980
--------------------------------------------------------------------------------
TRADEMARK
Principal Register
[GRAPHIC OMITTED]
Levi Xxxxxxx & Co. (Delaware corporation) For: PANTS, JACKETS, DRESSES AND
Two Embarcadero Cir. SHORTS, in CLASS 25 (U.S. CL. 39).
Xxx Xxxxxxxxx, Xxxxx. 00000 First use 1873: in commerce 1873
Owner of U.S. Reg. No. 404 248
Reg. No. 169,399
Filed May 8, 1972
M.I. XXXXX, Primary Examiner
EXHIBIT F
ROYALTY PAYMENTS
LICENSEE shall pay to LICENSOR a royalty as follows:
A. For years 1-4:
1. Base Royalty: For years 1-4 of this Agreement on the first $32,000,000
of Territory Net Sales: Twelve and One Half Percent (12.5%), provided, however,
that should LICENSEE prepay the Secured Limited Recourse Promissory Note between
the parties, base royalties on the remaining portion of the first $32,000,000
Territory Net Sales made after such prepayment shall be at sixteen percent
(16%).(1)
2. Additional Royalty: For all Territory Net Sales above $83,999,999, a
royalty based on the following percentages:
Territory Net Sales Level achieved by LICENSEE Additional Royalty Percentage
---------------------------------------------- -----------------------------
YEARS 1-4(2)
------------
$84,000,000-105,249,999 5%
$105,250,000-157,999,999 0%
$ 158,000,000 and up 4%
----------
(1) If the Effective Date of this Agreement is prior to January 1, 1998,
LICENSEE shall also pay a base royalty in accordance with this Exhibit prorated
by the number of days in 1997 this Agreement is in effect, such royalty payment
due on January 31, 1998.
(2) The additional royalty payment to LICENSOR for 1998 shall be
calculated by applying the royalty payment schedule to the sum of LICENSEE's
Territory Net Sales for the last quarter of calendar year 1997 and the full
calendar year 1998.
B. For year 5:
1. Base Royalty: For year 5 of this Agreement on the first $20,000,000
of Territory Net Sales: Twelve and One Half Percent (12.5%); provided,
however, that should LICENSEE prepay the Secured Limited Recourse Promissory
Note between the parties, base royalties on the remaining portion of the
$20,000,000 of Territory Net Sales made after such prepayment shall be at
eighteen percent (18%).
2. Additional Royalty: For all Territory Net Sales above $52,999,999, a
royalty based on the following percentages:
Territory Net Sales Level achieved by LICENSEE Additional Royalty Percentage
---------------------------------------------- -----------------------------
YEAR 5
------
$ 53,000,000 - 105,999,999 5%
$106,000,000 - 136,999,999 0%
$137,000,000 and up 4%
C. For year 6:
1. Base Royalty: For year 6 of this Agreement on the first $16,000,000 of
Territory Net Sales: Twelve and One Half Percent (12.5%); provided, however,
that should LICENSEE prepay the Secured Limited Recourse Promissory Note between
the parties, base royalties on the remaining portion of the $16,000,000
Territory Net Sales made after such prepayment shall be at nineteen and
one half percent (19.5%).
2. Additional Royalty: For all Territory Net Sales above $41,999,999, a
royalty based on the following percentages:
Territory Net Sales Level achieved by LICENSEE Additional Royalty Percentage
---------------------------------------------- -----------------------------
YEAR 6
------
$ 42,000,000 - 104,999,999 5%
$105,000,000 - 136,999,999 0%
$137,000,000 and up 4%
D. For years 7-10:
1. Base Royalty: For years 7-10 of this Agreement on the first $l6,000,000
of Territory Net Sales: Twelve and One Half Percent (12.5%); provided, however,
that should LICENSEE prepay the Secured Limited Recourse Promissory Note between
the parties, base royalties on the remaining portion of the $16,000,000 of
Territory Net Sales made after such prepayment shall be at nineteen and one
half percent (19.5).
2. Additional Royalty: For all Territory Net Sales above $41,999,999, a
royalty based on the following percentages:
Territory Net Sales Level achieved by LICENSEE Additional Royalty
---------------------------------------------- ------------------
YEARS 7-10
----------
$ 42,000,000 - 105,249,999 5%
$105,250,000 - 136,999,999 3%
$137,000,000 and up 4%
EXHIBIT F1
Minimum Territory Net Sales
Contract Year Minimum Territory Net Sales
1998 $ 32,000,000
1999 $ 32,000,000
2000 $ 32,000,000
2001 $ 32,000,000
Optional Term (1st Extension)
2002 $ 20,000,000
2003 $ 16,000,000
2004 $ 16,000,000
Optional Term (2nd Extension)
2005 $ 16,000,000
2006 $ 16,000,000
2007 $ 16,000,000
EXHIBIT F2
CALCULATION OF ANNUAL ROYALTY PAYMENT
CONTRACT YEAR
Territory Net Sales Total Net Sales
TRADEMARKED PRODUCTS
1. Number of Orders Booked
(see attached breakdown)
2. Invoiced Amounts
Less:
3. Sales taxes, cash discounts,
returns and allowances
4. Shipping
5. Bad debts (up to 0.5% of the amount
shown on line 2)
6. Net Sales
ROYALTY PAYMENT DUE
Remittance Enclosed:
Check No. ___________________
THE UNDERSIGNED, being the ____________________ of I.C. Xxxxxx & Company
L.P., hereby certifies pursuant to Section _____ of the Agreement dated
__________, 1997, by and between ___________ and I.C. Xxxxxx & Company L.P.,
that the information continued in the attached Verification of Licensed Products
Sold is true and correct in all material respects as of the date hereof.
SIGNED:
-------------------------
NAME:
-------------------------
Title:
-------------------------
Date:
-------------------------
For the period: January 1 to December 31.
--------------------------------------------------------------------------------
ANNUAL
ITEM QUANTITY SOLD SALES FIGURE (#)
--------------------------------------------------------------------------------
Pants, including Men _____________________ _____________________
slacks & trousers Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Jeans without belts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Jeans with belts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Shorts, including Men _____________________ _____________________
shortalls Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Xxxx Shorts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Sweatpants Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Overalls Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
T-Shirts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Polo Shirts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Tanktops Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Sweatshirts Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
All other shirts, Men _____________________ _____________________
including knit and Women _____________________ _____________________
woven sportshirts, Children _____________________ _____________________
tunics, smocks,
beach cover-ups and
pullover style shirts
--------------------------------------------------------------------------------
Sweaters, including Men _____________________ _____________________
pullover style Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Warm-up sets and Men _____________________ _____________________
Jogging Suits Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Jumpsuits Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Jackets, including Men _____________________ _____________________
blousons and parkas Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Denim Jackets Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Vests Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Coats, including Men _____________________ _____________________
short coats Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Rainwear Men _____________________ _____________________
Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Swimwear, Men _____________________ _____________________
including swimtanks Women _____________________ _____________________
and bathing suits Children _____________________ _____________________
--------------------------------------------------------------------------------
Sports xxxx, Xxx _____________________ _____________________
including caps Women _____________________ _____________________
Children _____________________ _____________________
--------------------------------------------------------------------------------
Sports visors, Men _____________________ _____________________
including sports Women _____________________ _____________________
headbands Children _____________________ _____________________
--------------------------------------------------------------------------------
EXHIBIT G
Customs Letter
TO WHOM IT MAY CONCERN:
I.C. Xxxxxx & Company L.P. trading as "Boss by I G Design," markets and
distributes "BOSS" branded clothing in the United States of America pursuant to
its trademark rights in the USA. Ambra Inc., a wholly-owned subsidiary of Hugo
Boss AG, has authorized I.C. Xxxxxx & Company L.P. pursuant to a Manufacturing
Rights Agreement dated as of ____________ to manufacture "BOSS" branded
sportswear in ________________ for export to the USA only. Therefore, shipments
of such "BOSS" branded clothing from ________________ co-signed to I.C. Xxxxxx &
Company L.P. for ultimate shipment to the USA are under authority from Ambra
and Hugo Boss AG.
If you wish confirmation of this information, please contact Gert Xxxxxxx
Xxxxxx, General Counsel, at Hugo Boss AG, (phone) 00-0000-000000/(fax)
00-0000-000000, or __________________, agent for Hugo Boss AG, in
__________________.
By:
-----------------------------
-----------------------------
Officer of General Partner
ATTENTION: ONLY THE ORIGINAL; EXECUTED VERSION OF THIS LETTER IS VALID, NO
COPIES ARE ACCEPTABLE, AND THE ORIGINAL IS VALID FOR ONLY ONE YEAR FROM THE DATE
OF THIS LETTER.
EXHIBIT H
NON-EXPEDITED ADR PROCEDURES
In the event a dispute arises requiring non-expedited NDR procedures, the
following procedures shall be followed:
1. The parties shall attempt to resolve disputes arising under this
Agreement informally and in the normal course of business, by means of
negotiations between employees of the companies responsible for the parties'
day-to-day relationship.
2. In the event that either party believes that normal business
negotiations have not or are not likely to lead to a timely resolution, either
party may at any time without regard to Section 1 above initiate ADR proceedings
by notifying the other in writing via facsimile of a demand for ADR proceedings,
with a succinct statement of the matters at issue. Notice shall comply with the
requirements of Section 19 of this Agreement.
3. Upon receipt of such notification, both parties shall make arrangements
for an executive to confer, either in person or, if both agree, by telephone, in
an effort to negotiate a resolution of the dispute.
a. The executives will confer within five (5) business days of the
notification, and will work for at least ten (10) additional days to
try to reach a negotiated settlement.
b. By written agreement of both parties, the time period for
negotiation may be extended. The time period for negotiation will
automatically be extended until one party declares an impasse.
4. If the executive negotiations described in Section 3 of this Exhibit F
fail to resolve the matter, then either party may thereafter notify the other
party in writing via facsimile that if agreement is not reached, mediation or
arbitration will be required. The notifying party shall state whether it elects
mediation or arbitration. If mediation is elected, the notified party may within
two (2) business days elect instead to proceed directly to arbitration, and will
so notify the notifying party. If the notified party takes no action, the matter
will proceed to mediation. If arbitration is elected by either party, the matter
will proceed directly to arbitration. In the case of arbitration, the party
selecting the location and choice of rules of the arbitration as specified under
Section 26.a. of this Agreement shall, within ten (10) business days of the
election to arbitrate, notify the other party of the selections of location and
choice of rules made.
5. In the event of mediation, the parties agree that Xxxxxxxx Xxxxx of
J.A.M.S./ENDISPUTE or his designee shall select a mediator within five (5)
business days. If Xx.
Xxxxx or his designee is unable to select a mediator, the parties shall within
ten (10) business days select a mediator based on candidates provided by the
Washington, D.C. office of J.A.M.S./ENDISPUTE or if J.A.M.S./ENDISPUTE is
unavailable, the American Arbitration Association.
a. Within two (2) business days of the mediator's selection, the
mediator will confer in a joint conference call with representatives
of the parties to discuss the issues in dispute and any further
preparation needed prior to holding a mediation session. The parties
shall defer to the mediator's recommendation about appropriate
procedures.
b. The parties shall attempt to resolve the dispute through mediation
for at least twenty (20) business days from the date of the
mediator's initial joint telephone conference.
c. The time period for mediation shall be extended automatically past
the initial twenty (20) business days until one party declares in
writing an impasse and demands arbitration. If an impasse is
declared by either party, the matter shall proceed to arbitration.
EXHIBIT H1
EXPEDITED ADR PROCEDURES
In the event a dispute arises requiring expedited ADR Procedures, the
following procedures will be followed:
1. The parties will attempt to resolve disputes arising under this
Agreement informally and in the normal course of business, by means of
negotiations between employees of the companies responsible for the parties'
day-to-day relationship.
2. Either party may at any time request that the parties make arrangements
for an executive from each side not directly involved in the underlying dispute
to confer, either by telephone or in person, in an effort to negotiate a
resolution of the dispute.
3. Although the parties recognize that resolution of disputes through
direct negotiation under Sections 1 and 2 of this Exhibit F1 are to be
preferred, in the event that either party believes that normal business
negotiations are not likely to lead to a timely resolution, either party may at
any time without regard to Sections 1 and 2 of this Exhibit h1 initiate
expedited ADR proceedings by notifying the other party in writing via facsimile
of a demand for expedited ADR proceedings, with a succinct statement of the
matters at issue, and by sending the notification and statement to the
Washington, D.C. office of J.A.M.S./ENDISPUTE. Notice will comply with the
requirements of Section 19 of this Agreement.
4. The expedited ADR proceedings will consist of an expedited arbitration
unless both parties agree in writing that they wish to pursue mediation, either
as a preliminary to arbitration or in parallel to the arbitration proceedings.
If the parties agree to pursue mediation, Xxxxxxxx Xxxxx or another mediator
agreed to by the parties will serve as mediator, and follow such procedures as
the mediator and the parties agree to.
5. Unless the parties agree in writing to an alternative approach (as to
accommodate mediation or to fit the specifics of a particular dispute), the
parties will proceed as follows:
a. Within one (1) business day (a business day consists of a day,
excluding Saturdays, Sundays and all holidays generally recognized in either the
United States or the Federal Republic of Germany) of receipt of the demand for
expedited ADR proceedings, J.A.M.S./ENDISPUTE will inform the parties by
facsimile of the name of the arbitrator who will handle the case.
b. The matter will be heard and decided by one of the following
members of the J.A.M.S./ENDISPUTE panel of neutrals: The Honorable Xxxxxxxx
Xxxxxxx; The Xxxxxxxxx Xxxxxx Xxxxxxxx; The Xxxxxxxxx Xxxxxx Xxxxx Xxx Xxxx. In
the event that one of the three pre-identified neutrals ceases to be a member of
the J.A.M.S./ENDISPUTE panel of neutrals, J.A.M.S./ENDISPUTE will provide
additional names of potential arbitrators and the parties will agree on a
replacement; if the parties cannot agree, J.A.M.S./ENDISPUTE may appoint a
replacement.
c. On the fifth (5th) business day after J.A.M.S./ENDISPUTE has
notified the parties of the arbitrator, the arbitrator will hold a preliminary
telephone conference during which the parties will describe the dispute and
discuss the procedure for resolving the dispute, including, for example, the
need for and content of pre-hearing submissions. To the extent that the parties
cannot agree on procedures, the arbitrator will orally inform the parties at the
close of the telephone hearing of his procedural decisions. He will confirm
those decisions in writing no later than the following business day.
d. On the sixth (6th) business day after the preliminary telephone
conference, unless both parties agree to shorten the time or to extend the time,
the arbitrator will hold an in-person hearing to receive evidence and consider
arguments relating to the matter; provided, however, that if the parties cannot
agree to extend the time and the arbitrator concludes that in the interest of
justice the time should be extended, the arbitrator may do so.
(1) The hearing will be conducted at a time decided by the
arbitrator, in either New York City or Washington, the
location to be decided by the arbitrator.
(2) The arbitrator will not be bound by the rules of evidence.
(3) The arbitrator will allow each side to present written and
oral evidence as they deem appropriate, except that the
arbitrator may set time limits to ensure that the hearing is
completed within one (1) working day.
(4) The arbitrator will declare the record closed at the end of
the hearing, except that the arbitrator may defer the closing
of the record for up to two (2) business days in order to
allow the parties to make post-hearing submissions.
(5) The arbitrator will hand down a binding award within one (1)
business day of the close of the record. The award will be
accompanied by a statement of reasons. "Statements of reasons"
from prior expedited arbitrations may be used by parties to
later arbitrations to support their positions.
e. Except as specifically set out herein, the arbitrator will have sole
discretion to determine procedures for the arbitration.
