Exhibit 10.1
Confidential Treatment Requested as to
Certain Information Contained in this Exhibit
FIFTH AMENDMENT TO AMENDED AND RESTATED LICENSE AGREEMENT
DATED FEBRUARY 2, 2000 BETWEEN
TOMMY HILFIGER LICENSING, INC. and THE STRIDE RITE CORPORATION
AGREEMENT entered into this 28th day of July, 2006, by and between TOMMY
HILFIGER LICENSING, LLC, f/k/a TOMMY HILFIGER LICENSING, INC., having an address
at University Plaza - Bellevue Building, 262 Chapman Road, Suite 103A, Newark,
Delaware 19702 (hereinafter referred to as "Licensor") and THE STRIDE RITE
CORPORATION, having its offices at 191 Spring Street, P. O. Box 9191, Lexington,
Massachusetts 02173-9191 (hereinafter referred to as "Licensee").
W I T N E S S E T H :
WHEREAS, Licensor and Licensee entered into an Amended and Restated License
Agreement dated February 2, 2000, which license was previously amended by
amendments dated June 20, 2001, October 3, 2002, January 9, 2004 and March 23,
2005 (the Amended and Restated License Agreement as previously amended is
hereinafter referred to as the "License"); and
WHEREAS, the parties have agreed to the amendments to the License contained
herein.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
agreements contained and promises herein expressed, and for other good
consideration acknowledged by each of them to be satisfactory and adequate, do
hereby agree as follows:
1. All capitalized terms used herein but not defined shall have the meanings
ascribed to them in the License.
2. Paragraph 1.1 of the License is deleted and replaced with the following:
"Affiliate with respect to either party hereto shall mean a person
or entity controlling, controlled by, or under common control with
such party."
3. Paragraph 1.6A of the License is hereby amended by adding the following at
the end thereof:
"On and after April 1, 2005, Malaysia and Taiwan shall be
deleted from this definition of International Territory. On and
after March 31, 2006, Hong Kong and Singapore shall be
deleted from this definition of International Territory. On and
after March 31, 2007, South Africa shall be deleted from this
definition of International Territory."
4. Paragraph 2.7(b) of the License is hereby amended by deleting it in its
entirety and replacing it with the following:
"Licensor reserves the right to designate the location of Licensee's
primary showroom required in Paragraph 2.7(a) above."
5. Paragraph 2.10 of the License is hereby amended by deleting the first and
second sentences thereof and replacing them with the following:
"Beginning with the Annual Period commencing April 1, 2005, for the
Territory excluding the International Territory, Licensee will (a)
participate in Licensor's Merchandise Coordinator Program; or (b)
operate Licensee's own merchandise coordinator program established
by Licensee to Licensor's satisfaction. Licensor's approval of
Licensee's Merchandise Coordinator Program will be determined by
considering, among other things, the territory of coverage, the
number and volume of stores to be serviced, head count, and travel
and entertainment costs. If Licensee elects option (a), it shall pay
a reasonable amount in quarterly installments simultaneously with
the Percentage Royalty payments. If Licensee elects option (b),
Licensee shall, upon Licensor's request, provide to Licensor
documentation reasonably acceptable to Licensor, evidencing
Licensee's operation of its merchandise coordinator program. If
Licensee's program is not acceptable to Licensor and changes
requested by Licensor are not implemented within sixty (60) days of
written notice from Licensor to Licensee, Licensor may require
Licensee to comply with option (a) above."
6. Paragraph 3.1 of the License is hereby amended by inserting the following at
the end of thereof:
"The parties hereby acknowledge that the Agreement is hereby
extended for an additional one-year term commencing on
April 1, 2007 through March 31, 2008 (the Eleventh Annual Period).
This Agreement may be extended for additional years beyond the
Eleventh Annual Period on terms and conditions to be agreed upon by
the parties. In the event this Agreement is not extended beyond the
Eleventh Annual Period, then the Eleventh Annual Period shall end on
June 30, 2008."
7. Paragraph 4.2 of the License is hereby amended by:
(a) deleting all references to minimums relating to the Career
Line for any Annual Period beginning on April 1, 2005 and
after;
(b) deleting the entry for the Annual Period 4/1/06 - 3/31/07
in the first chart therein:
(c) adding the following to the first chart:
"Annual Period Minimum Sales
4/1/06 - 3/31/07 (Tenth) $
---------------
4/1/07 - 3/31/08 (Eleventh) $
---------------
(d) deleting the entry of "$ "for the Annual Period
------------
4/1/06 - 3/31/07 for Mexico in the second chart (International
Territory) therein and replacing it with "$ ";
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(e) deleting the entry of "$ "for the Annual Period
------------
4/1/06 - 3/31/07 for Australia in the second chart
(International Territory) therein and replacing it with
"$ ";
------------
(f) deleting the entries for Malaysia and Taiwan for the Annual
Period 4/1/05- 3/31/06 and for Malaysia, Taiwan, Hong Kong and
Singapore for the Annual Period 4/1/06 - 3/31/07 in the second
chart (International Territory) therein;
(g) adding the following to the second chart:
"Minimum Sales Level for Countries in the
International Territory
-----------------------------------------
Annual Period Mexico Australia
------------- ------ ---------
4/1/07-3/31/08 (Eleventh) $ $ "
------------ ------------
(h) adding the following to the end of the second sentence
therein:
", except during the Tenth Annual Period (4/1/06-3/31/07) for
Australia only and during the Eleventh Annual Period (4/1/07 -
3/31/08) for the Domestic Territory only."
(i) adding the following to the end of the third sentence therein:
", except for the Tenth Annual Period (4/1/06-3/31/07) for the
Domestic Territory and Australia only and Eleventh Annual
Period (4/1/07-3/31/08) for the Domestic Territory only."
(j) adding the following at the end thereof:
"Licensee shall not receive credit against Minimum Sales
Levels for sales made pursuant to Paragraphs 5.11, 5.12 or
5.14."
8. Paragraph 5.2 of the License is hereby amended by:
(a) deleting all references to minimums relating to the Career
Line for any Annual Period beginning on April 1, 2005 and
after;
(b) adding the following after the third sentence therein:
"Anything to the contrary notwithstanding, the Guaranteed
Minimum Royalty for the Territory (excluding the International
Territory) for the following Annual Periods shall be the
greater of amounts set forth below:
Guaranteed
Annual Period Minimum Royalty
------------- ---------------
4/1/06- 3/31/07 (Tenth) $
------------
4/1/07- 3/31/08 (Eleventh) $
------------
or percent of the Minimum Sales Level for such
-------------
Annual Period as the same may be adjusted pursuant to
Paragraph 4.2.
Anything to the contrary notwithstanding, the Guaranteed
Minimum Royalty for the International Territory for the
following Annual Periods shall be the greater of the amounts
set forth below:
Guaranteed Minimum Royalty For Countries
in the International Territory
----------------------------------------
Annual Period Mexico Australia South Africa
4/1/06- 3/31/07 (Tenth) $ $ $
---------- ---------- ----------
4/1/07- 3/31/08 (Eleventh) $ $ $
---------- ---------- ----------
or percent of the Minimum Sales Level for such
--------
Annual Period as the same may be adjusted pursuant to
Paragraph 4.2."
9. Paragraph 5.3 of the License is hereby amended by inserting the following at
the end thereof:
"No Percentage Royalty will be due on purchases of Licensed Products
pursuant to Sections 5.11, 5.12 and 5.14 of this Agreement."
10. Paragraph 7.1 of the License is hereby amended by:
(a) deleting all references to minimums relating to the Career
Line for any Annual Period beginning on April 1, 2005 and
after;
(b) deleting the entry for 4/1/06 - 33/31/07 appearing in the
first chart therein;
(c) adding the following to the first chart therein:
"Annual Period Guaranteed Minimum Advertising
-------------- ------------------------------
4/1/06 - 3/31/07 (Tenth) $
-------------
4/1/07 - 3/31/08 (Eleventh) $ "
-------------
(d) adding the following to the end of the fourth sentence:
", except that for the Tenth Annual Period (4/1/06-3/31/07)
and Eleventh Annual Period (4/1/07-3/31/08) only, the
Guaranteed Minimum Advertising Payments for the Territory
(excluding the International Territory) shall be equal to the
greater of the amounts set forth above or percent
-----------
of the Minimum Sales Level."
(e) deleting the entry of "$ " for the Annual Period
------------
4/1/06 - 3/31/07 for Mexico in the chart in Section 7.1(b)
(International Territory) and replacing it with
" ";
------------
(f) deleting the entry of "$ " for the Annual Period
------------
4/1/06 - 3/31/07 for Australia in the chart in Section 7.1(b)
(International Territory) and replacing it with
"$ ";
------------
(g) deleting the entries for Malaysia and Taiwan for the Annual
Period 4/1/05- 3/31/06 and for Malaysia, Taiwan, Hong Kong and
Singapore for the Annual Period 4/1/06 - 3/31/07
in the chart in Section 7.1(b) (International Territory);
(h) adding the following to the chart in Section 7.1(b):
"Guaranteed Minimum Advertising for the
International Territory
---------------------------------------
Annual Period Mexico Australia
4/1/07-3/31/08 (Eleventh) $ $ "
------------ ------------
11. Paragraph 7.2 of the License is hereby amended by:
(a) inserting the following at the end thereof:
"No Percentage Advertising Payment will be due on purchases of
Licensed Products pursuant to Sections 5.11, 5.12 and 5.14 of
this Agreement."
(b) inserting the following new paragraph at the end thereof:
"Beginning in the Eleventh Annual Period (4/1/07) and
thereafter, Licensee shall pay to Licensor a Percentage
Advertising Payment equal to percent of Net Sales.
----------
Anything herein to the contrary notwithstanding, no Percentage
Advertising Payment shall be due for the Net Sales of (a)
Close-Outs and (b) Seconds to the extent that such sales of
(a) and (b) do not exceed percent of the total
------------
Net Sales for the relevant Annual Period. Any excess of such
Net Sales over the aforesaid percent shall
------------
require the payment of the full three percent
------------
Percentage Advertising Payment, however, nothing herein shall
be construed to permit such sales. Anything herein to the
contrary notwithstanding, for the Eleventh Annual Period
(4/1/07- 3/31/08) only, the Percentage Advertising Payment
shall not exceed Dollars. Percentage
---------------
Advertising Payments shall be payable in quarterly
installments on January 15, April 15, July 15 and
October 15 for the immediately preceding quarter of sale, less
Guaranteed Minimum Advertising Payments for such period."
12. Paragraph 7.3 of the License is hereby amended by changing "
-------------
percent" in the second sentence to " percent".
------------
13. Paragraph 7.4 of the License is hereby deleted in its entirety and is
replaced by the following:
"7.4 Approval of Packaging, Labels and Licensee's Advertising. All
packaging, Labels and advertising copy and the medium of all
advertising placed by Licensee, if any, must comply strictly with
specifications provided from time to time by Licensor and are, at
all times, subject to the approval of Licensor. No advertising,
including cooperative advertising whereby Licensee provides a
customer with a contribution toward the cost of an advertisement for
Licensed Products, whether credit or otherwise, may be used without
the prior written consent of Licensor in each instance.
Additionally, under no circumstances will Licensee be permitted to
advertise Licensed Products over any medium not previously approved
by Licensor in writing. To such end, unless otherwise approved in
writing by Licensor, the Internet or any other global or regional
computer access network is deemed an unapproved medium for
advertising. The use of any packaging, Labels or advertising not
approved by Licensor is expressly prohibited. All packaging and
Labels must use the Trademarks, but no other trademark or trade name
may be used except as may be required by applicable law or permitted
by Licensor in writing. Licensee shall not be permitted to use its
name(s) on Licensed Products, packaging or Labels displaying the
Trademark other than as specifically approved by Licensor in
writing. Any Labeling materials provided by Licensor to Licensee
will be so provided at Licensee's expense, at Licensor's cost of
producing and providing the same. To protect the Trademarks,
Licensor reserves the right to require Licensee to purchase Labels
only from sources designated by Licensor, provided that such sources
provide the Labels to Licensee in a reasonably competitive manner as
to price and delivery."
14. Paragraph 11.3 of the License is hereby amended by adding the following
after the first sentence therein:
"Anything to the contrary notwithstanding, during any Annual Period,
if Licensee fails to meet the Minimum Sales Level for a Territory
within the International Territory, this Agreement shall be
terminable by Licensor only as to such International Territory in
which the Minimum Sales Level was not achieved."
15. Paragraph 20.1 of the License is hereby amended by changing the addresses to
the following:
"To Licensor:
TOMMY HILFIGER LICENSING, LLC
200 Liberty Way
Cranbury, New Jersey 08512
Attn: David Vandroth
Telephone: (609) 409-7322
Facsimile: (609) 409-7331
with a copy to:
Dreier LLP
499 Park Avenue
New York, New York 10022
Telephone: (212) 328-6100
Facsimile: (212) 328-6101
TOMMY HILFIGER USA, INC.
601 West 26th Street, 6th Fl
New York, NY 10001
Attention: Office of the General Counsel
Telephone: (212) 549-6000
Facsimile: (212) 549-6799"
16. Effective as of April 1, 2006, Exhibit A shall be amended to delete "H
Hilfiger" therefrom.
17. Schedule 2.7(b) is hereby deleted in its entirety from the License.
18. Except as modified hereby, all other paragraphs and provisions contained in
the License shall remain in full force and effect and nothing contained herein
shall alter them in any way and are hereby in all respects ratified and
confirmed.
IN WITNESS WHEREOF, Licensor and Licensee have respectively signed this
Amendment as of the date first written above.
TOMMY HILFIGER LICENSING, LLC THE STRIDE RITE CORPORATION
By: /s/ Anne Marino By: /s/ RJ Woodworth
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Title: President, Licensing Title: President, TH Footwear
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