EXHIBIT 10.128
AGREEMENT
AGREEMENT made this 1st day of August, 2001, by and between (i) Tiffany &
Co. Japan, Inc. ("Tiffany-Japan"), a corporation organized and existing under
the laws of the State of Delaware with its Japan branch offices at 3-1-31,
Minami-Aoyama, Minato-ku, Tokyo 107-0062, Japan, and (ii) Mitsukoshi Limited
("Mitsukoshi"), a corporation organized and existing under the laws of Japan
with its executive offices at 4-1, Nihombashi Muromachi 1-chome, Chuo-Ku, Tokyo
103-8001, Japan.
WITNESSETH:
Whereas, Mitsukoshi and Tiffany-Japan are among the parties to a certain
Agreement dated 12 June 1993, as amended (the "93 Agreement");
Whereas the parties to this Agreement wish to provide for the operation of
TIFFANY & CO. boutiques within the stores of Mitsukoshi and its affiliates in
Japan; and
Whereas, the parties to this Agreement wish to replace the 93 Agreement
with this Agreement;
NOW THEREFORE, in consideration of the foregoing facts and objectives,
Tiffany-Japan's agreement to the Base Percentage and Incentive Fee for all
selling, administrative, construction, insurance and other functions to be
performed by Mitsukoshi and the Host Stores hereunder, and the other mutual
promises set forth below, the parties hereto agree as follows:
ARTICLE I
Defined Terms
As used in this Agreement, the following initially capitalized words and phrases
shall have the meanings ascribed to them below:
"Above-Target Sales" means, for each Existing Boutique, Net Incremental Sales in
excess of Target Sales, and, for each New Boutique, Net Sales in excess of Base
Period Sales, in each case calculated on a Boutique-by-Boutique basis and not on
an aggregate basis for the 12-month or shorter period in question.
"Affiliate" means, with respect to any party to this Agreement, a company or
other business entity controlling, controlled by or under common control with
such party through stock ownership exceeding fifty percent (50%), it being
specifically agreed that Okinawa Mitsukoshi Ltd. shall be one of Mitsukoshi's
Affiliates for the purposes of this Agreement.
"Adjustment Value" means, with respect to any item of Tiffany Merchandise, the
Current Retail Price, less the applicable Base Percentage, plus the amount of
the applicable consumption tax.
"Assistant Boutique Manager" means an employee of the Host Store designated to
assist a Boutique Manager and, in the absence of a Boutique Manager, to have the
responsibilities of a Boutique Manager.
"Assistant Brand Manager" means an employee of Tiffany-Japan designated to
assist a Brand Manager and, in the absence of a Brand Manager, to have the
responsibilities of a Brand Manager.
"Base Percentage" means the applicable percentage of Net Sales for the month in
question, as follows, but in no case in excess of 27%:
- ------------------------- ------------------------------------------- -------------------------------------------
November 1, 2001 through Thereafter
January 31, 2003
- ------------------------- ------------------------------------------- -------------------------------------------
Standard Boutiques
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. A. Merch. 27% 23% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. B. Merch. 23% 19% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. C Merch. 20% 16% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
In-store Concession
Boutiques
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. A. Merch. 20% 16% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. B. Merch. 16% 12% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. C. Merch. 13% 9% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Stand-alone Concession
Boutiques
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. A. Merch. 18% 14% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. B. Merch. 14% 10% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
Cat. C. Merch. 11% 7% plus Sales Adjustment Factor
- ------------------------- ------------------------------------------- -------------------------------------------
"Base Period Sales" means, with respect to each New Boutique, such sales
projections as may be determined by mutual agreement between Tiffany-Japan and
Mitsukoshi; provided, however, that if the parties fail to agree upon such sales
projections, Tiffany-Japan shall be entitled to finally determine the same
giving due consideration to Mitsukoshi's sales projections.
"Boutiques" means Existing Boutiques, including Standard and Concession
Boutiques, and New Boutiques, including New Standard and New Concession
Boutiques. The term "Boutique," as used in this Agreement, refers to a defined
selling area identified with signage and decor specific to TIFFANY & CO. The
term "Boutique" as used in this Agreement does not include reference to the
TIFFANY & CO. store operated on the premises of the Ginza Iwasaki Building in
Tokyo.
"Boutique Improvements" mean the capital and other improvements to be made to
the Existing Boutiques specified in Schedule I attached.
"Boutique Location" means the present location for each Existing Boutique as of
the date of this Agreement, or, if so indicated on Schedule I, a new location.
"Boutique Manager" means, with respect to each Boutique, an employee of the Host
Store designated by the Host Store to act as liaison between the Host Store and
Tiffany-Japan and to share responsibility for day-to-day operations with the
Brand Manager or Assistant Brand Manager, as the case may be, and with respect
to Standard Boutiques, to manage the Mitsukoshi Staff.
"Brand Manager" means, with respect to each Boutique, an employee of
Tiffany-Japan designated by Tiffany-Japan to act as liaison between the Host
Store and Tiffany-Japan and to share responsibility for day-to-day operations
with the Boutique Manager, and, with respect to Concession Boutiques, to manage
the Tiffany Staff.
"Category A Merchandise" means items of Tiffany Merchandise each having a New
York Retail Price of less than U.S. $60,000.
"Category B Merchandise" means items of Tiffany Merchandise each having a New
York Retail Price equal to or greater than U.S.$60,000 but less than
U.S.$80,000.
"Category C Merchandise" means items of Tiffany Merchandise each having a New
York Retail Price equal to or greater than U.S. $80,000.
"Concession Boutiques" means the Boutiques so indicated in Schedule I attached
and any New or Existing Boutique that is subsequently agreed by the parties to
be a Concession Boutique. The term "Concession Boutiques" refers to both
In-store and Stand-alone Boutiques.
"Conversion Date" means the date indicated in Schedule I attached by which a
Boutique shall be converted from operation as a Standard Boutique to operation
as a Concession Boutique. If a Conversion Date is indicated in Schedule I, the
Boutique in question shall be operated as a Standard Boutique until the
Conversion Date.
"Current Period" refers to each of the Current Periods indicated in the
definition of Net Incremental Sales.
"Current Retail Price" means the retail price established by Tiffany-Japan, from
time to time, for sale of Tiffany Merchandise in Japan.
"Effective Date" means November 1, 2001 at 12:00 a.m., Tokyo time.
"Existing Boutiques" means the TIFFANY & CO. boutiques listed in Schedule I
attached and Boutiques opened by mutual agreement of the parties in the stores
of Mitsukoshi or an Affiliate of Mitsukoshi after the date of this Agreement
after such Boutiques have been open for two 12-month periods ending January 31.
Existing Boutiques include both Concession and Standard Boutiques.
"Expiration Date" means January 31, 2007.
"Host Store" means either Mitsukoshi or one of Mitsukoshi's Affiliates or a
branch thereof that is directly responsible for the operation of the store
wherein a Boutique is located.
"Housekeeping Operations" means the various housekeeping operations to be
performed in each Boutique as provided in Schedule H.
"Incentive Fee" means Five Percent (5%) of Above-Target Sales.
"In-store" means a Boutique that is located within a department store, including
a Boutique that has direct customer access from the street.
"Last Renovation Date" means the date each Boutique was last renovated as
specified in Schedule I.
"Liability Insurance" means a comprehensive general liability, policy naming
both Mitsukoshi and Tiffany-Japan as insureds, covering operations conducted at
the Boutiques and having the following limits of liability: Y2.5 Billion
Aggregate and Y2.5 Billion any single occurrence.
"Mitsukoshi Staff" means the employees of the Host Store assigned as sales staff
within a Boutique.
"Net Incremental Sales" means a Current Period increase in Net Sales, if any,
over Prior Period Net Sales computed as follows: for each 12-month period ending
January 31 of the year 2003 and thereafter (each a "Current Period"), the
increase over the 12-month period ended on the preceding January 31 (each a
"Prior Period").
"Net Sales" means the aggregate retail selling price for sales of Tiffany
Merchandise made in Boutiques, not reduced by the amount of any rent, fee or
commission, if any, paid to the Host Store as a percentage of sales, but reduced
by consumption or other tax collected from the consumer and by returns of
Tiffany Merchandise accepted from consumers for credit.
"New Boutiques" mean Boutiques, including Stand-alone Boutiques, opened by
mutual agreement of the parties in the stores of Mitsukoshi or an Affiliate of
Mitsukoshi after the date of this Agreement, but which have not been open for
two 12-month periods ending January 31. A New Boutique will become an Existing
Boutique when it ceases to be a New Boutique.
New York Retail Price" means the price in U.S. dollars, estimated by
Tiffany-Japan in good faith after consultation with Tiffany, at which an item of
Tiffany Merchandise would be offered for sale to retail customers by Tiffany at
Tiffany's Fifth Avenue store in New York City at the time in question.
"Operating Manual" means the operating manual for TIFFANY & CO. boutiques
published by Tiffany-Japan as such manual may be amended from time to time.
"Price Reduction Program" means any program, practice, scheme or promotion
offered or participated in by Mitsukoshi, any Host Store or any of Mitsukoshi's
other Affiliates by which merchandise is awarded to a retail consumer or made
available for purchase by a retail consumer at a price below that which would
otherwise be effective, including, but not limited to: (i) any store- or
department-wide temporary price reduction; or (ii) any price reduction by means
of a discount, rebate, credit, award or gift-with-purchase (whether through the
accumulation of points, purchase credits or otherwise) offered in connection
with the use of a credit or charge card or charge account, or in connection with
frequent- or repeat-shopper status or in connection with any program to
encourage purchases.
"Prior Period" refers to each of the Prior Periods indicated in the definition
of Net Incremental Sales.
"Regular" means, with respect to either Tiffany or Mitsukoshi Staff, employees
who work full-time throughout the year, other than on holidays and vacations.
"Renovate" means, in connection with a Boutique, to perform the work and
purchase the materials specified in Schedule R in order to restore the Boutique
to its original first class condition.
"Renovation Cycle" means the period specified for each Boutique in Schedule I
with the Last Renovation Date specified for each Boutique.
"Sales Adjustment Factor" means One Percent (1%) for each Boutique that achieves
Net Sales of at least Two Billion Yen (Y2,000,000,000) but less than Three
Billion Yen (Y3,000,000,000) in the applicable Current Period; Two Percent (2%)
for each Boutique that achieve Net Sales of at least Three Billion Yen
(Y3,000,000,000) but less than Four Billion Yen (Y4,000,000,000) in the
applicable Current Period; or Three Percent (3%) for each Boutique that achieves
Net Sales of at least Four Billion Yen (Y4,000,000,000) in the applicable
current period.
"Seasonal" means, with respect to either Tiffany or Mitsukoshi Staff, employees
who work only during the period December 1 through December 31.
"Stand-alone" refers to a Boutique that is not located within a department
store.
"Standard Boutiques" means the TIFFANY & CO. Boutiques so indicated in Schedule
I attached and any New or Existing Boutique that is subsequently agreed by the
parties to be a Standard Boutique.
"Target Sales" means, for each Existing Boutique, that portion, if any of Net
Incremental Sales that is greater than the lesser of: (i) Ten Percent (10%) of
Prior Period Net Sales in the Boutique or (ii) such increase in Net Sales as
shall have been set by Tiffany-Japan as the sales goal for the Boutique as part
of Tiffany-Japan's annual planning process.
"Tiffany" means Tiffany and Company, a corporation organized and existing under
the laws of the State of New York with its executive offices at 727 Fifth
Avenue, New York, NY 10022 United States of America.
"Tiffany Merchandise" means TIFFANY & CO. brand merchandise.
"Tiffany Staff" means the employees of Tiffany-Japan assigned as sales staff
within a Boutique.
"Trademarks" means the trademarks and tradenames TIFFANY & CO. or TIFFANY, the
trademark TIFFANY-SCHLUMBERGER and the trademarks of the designers ELSA PERETTI
and PALOMA PICASSO.
ARTICLE II
Effective Date; Host Stores Bound
2.1 This Agreement shall become effective on the Effective Date, and except as
provided in Section 11.2 below, shall remain effective for each Boutique
until the Expiration Date.
2.2 Prior to the Effective Date, the 93 Agreement shall continue to apply.
2.3 Mitsukoshi represents and agrees that it has the full power to enter into
this Agreement on behalf of the Host Stores that are its Affiliates and
guarantees the performance of all Host Stores hereunder. All references in
this Agreement to Mitsukoshi include reference to the applicable Host Store
whenever the context so requires. Mitsukoshi agrees to deliver to
Tiffany-Japan a written acknowledge, signed by a duly authorized officer of
each Mitsukoshi Affiliate that serves as a Host Store to a Boutique,
accepting and undertaking to perform under this Agreement.
ARTICLE III
Boutique Locations
3.1 Except as otherwise provided below, the Boutiques shall be permitted to
operate in the Boutique Locations in accordance with the terms of this
Agreement.
3.2 All Boutiques listed on Schedule C shall be closed, at Mitsukoshi's cost
and expense, and no longer operated as Boutiques, on the closing dates
indicated on said Schedule.
3.3 Except as provided in Schedule I or Schedule C, no Boutiques will be
closed, relocated or reduced in size (except as may be mutually agreed
between Tiffany-Japan and Mitsukoshi) and will be permitted to operate in
accordance with the provisions of this Agreement without hindrance or
disruption by the parties hereto. If either Mitsukoshi or Tiffany-Japan
believes that any Boutique should be closed, relocated or reduced in size
due to a change in business circumstances or otherwise, Mitsukoshi and
Tiffany-Japan will meet and engage in mutual discussions with respect to
the matter.
ARTICLE IV
Responsibilities for Tiffany Merchandise
4.1 Tiffany-Japan shall place Tiffany Merchandise in the Boutiques for sale
pursuant to the terms of this Agreement.
4.2 No merchandise other than Tiffany Merchandise may be sold in the Boutiques.
Mitsukoshi and the Host Stores shall not sell Tiffany Merchandise from any
location within a Host Store other than the Boutiques, and neither
Mitsukoshi nor any of its Affiliates shall sell Tiffany Merchandise at any
other location, by catalog or through a computer web-site.
4.3 It shall be Tiffany-Japan's responsibility to select and furnish a
sufficient quantity and assortment of Tiffany Merchandise for sale in the
Boutiques.
4.4 Tiffany-Japan shall stock the Boutiques with Tiffany Merchandise and
replenish such stock as items are sold. Tiffany-Japan will use reasonable
efforts, consistent with the terms of this Agreement, to maximize the sale
of Tiffany Merchandise in the Boutiques through replenishment; however,
Mitsukoshi agrees that Tiffany-Japan shall not be required to maintain more
than a reasonable reserve stock and that out-of-stock situations will
sometimes occur; Tiffany-Japan shall not be required to account for lost
Base Percentage due to out-of-stock situations.
4.5 Tiffany-Japan shall not be obliged to supply Tiffany Merchandise bearing
the trademarks ELSA PERETTI or PALOMA PICASSO if Tiffany-Japan or its
Affiliates cease to be licensed to distribute such merchandise in Japan.
4.6 Ownership of and title to Tiffany Merchandise shall remain with
Tiffany-Japan from such time as the Tiffany Merchandise is placed in a
Boutique until such time as it is sold to a customer. In the event that any
Tiffany Merchandise sold to a customer from a Boutique is later accepted
from the customer for return, ownership of and title to such merchandise
shall revert to Tiffany-Japan upon acceptance of the return at the
Boutique.
4.7 In Concession Boutiques, risk of loss or damage to Tiffany Merchandise
shall remain with Tiffany-Japan from such time as the Tiffany Merchandise
is placed in a Concession Boutique until such time as it is sold to a
customer. The Host Store shall have no obligation to verify receipt of
Tiffany Merchandise by a Concession Boutique. In the event that any Tiffany
Merchandise sold to a customer from a Concession Boutique is later accepted
from the customer for return, risk of loss and damage in respect of such
merchandise shall revert to Tiffany-Japan upon acceptance of the return at
the Boutique. Notwithstanding the foregoing, the Host Store of a Concession
Boutique shall be responsible for and reimburse the Adjustment Value in
respect of: thefts of Tiffany Merchandise which can be attributed to named
agents, servants or employees of the Host Store or damage to Tiffany
Merchandise attributable to the gross negligence or intentional misconduct
of agents, servants or employees of the Host Store.
4.8 In Standard Boutiques, responsibility for loss or damage to Tiffany
Merchandise shall rest with the Host Store from the time that Tiffany
Merchandise is delivered to the Standard Boutique premises and received by
the Brand Manager or Assistant Brand Manager until the Tiffany Merchandise
is sold to a customer or removed from the Standard Boutique premises by
Tiffany-Japan.
4.8.1 The Brand Manager or Assistant Brand Manager shall examine all
Tiffany Merchandise received by a Standard Boutique and promptly
advise receipt of all Tiffany Merchandise in writing to the
Boutique Manager who shall promptly verify the receipt of such
Tiffany Merchandise in writing and note, in writing, the receipt
of any damaged goods. Damaged goods shall promptly be returned to
Tiffany-Japan for repair or replacement.
4.8.2 In the event Tiffany Merchandise is returned to a Standard
Boutique by customers because it is defective or in need of
repair, responsibility for loss or damage shall rest with
Tiffany-Japan from the time that such Tiffany Merchandise is
returned to the Boutique premises and received by the Brand
Manager or Assistant Brand Manager. The Brand Manager or
Assistant Brand Manager shall promptly acknowledge receipt of
such defective Tiffany Merchandise or Tiffany Merchandise in need
of repair.
4.8.3 The Host Store of a Standard Boutique shall insure the Tiffany
Merchandise for which it is responsible against loss by fire,
water damage or other casualty. All such insurance policies shall
be written by reputable insurers licensed to do business in
Japan. A certificate of such insurance issued by the insurer (or
a copy thereof) shall be provided to Tiffany-Japan by the Host
Store on request.
4.8.4 Any loss or shortage of Tiffany Merchandise for which the Host
Store is responsible due to casualty, theft or unexplained
shortage shall be adjusted by a payment to Tiffany-Japan of the
Adjustment Value of such damaged, stolen or missing Tiffany
Merchandise.
4.8.5 The Host Store shall carry out a physical inventory of the
Tiffany Merchandise on hand in each Boutique as of a date in
January and July of each year. Such date shall be designated by
Tiffany-Japan at least thirty (30) days in advance of the date so
designated. Representatives of Tiffany-Japan and/or its
accountants shall be entitled to witness such inventory. The
results of such inventory shall be reported to Tiffany-Japan in
the format and manner determined by Tiffany-Japan and any
shortage of inventory shall be adjusted as provided in Section
4.8.4 above.
4.8.6 Each Host Store and Tiffany-Japan shall each be entitled to
review each other's inventory and sales records relating to the
Tiffany Merchandise from time to time and on reasonable advance
notice.
4.9 It shall be the responsibility of Tiffany-Japan to affix its price tag
to the Tiffany Merchandise in each Boutique.
ARTICLE V
Sale of Tiffany Merchandise
5.1 In consideration of the Base Percentage, the Host Stores shall act for
Tiffany-Japan in the sale of the Tiffany Merchandise from the Boutiques,
deliver the Tiffany Merchandise to the customer, accept receipt of payment
and hold the proceeds of sale as provided below.
5.2 Tiffany Merchandise shall be sold to the customer at the Current Retail
Price in the Boutiques, and shall not be included in any Price Reduction
Program. Mitsukoshi shall clearly indicate that Tiffany Merchandise is not
subject to any Price Reduction Program in representative advertisements and
documents describing or promoting any Price Reduction Program published or
otherwise made available to customers. If Mitsukoshi fails to make such an
indication in any advertisement or document, and if, as a consequence,
Tiffany-Japan or the Host Store is required by law or good customer
relations practices to offer a price concession to any customer relying
upon such an advertisement or publication, for the purposes of calculating
Net Sales hereunder such price concession shall be added back into Net
Sales, as if the same had never been offered at all, and Mitsukoshi shall
not request that Tiffany-Japan make any compensation or reimbursement for
Mitsukoshi's losses resulting from such price concession.
5.3 In Standard Boutiques, Mitsukoshi Staff shall operate cash registers
supplied by the Host Store.
5.4 In Concession Boutiques, unless otherwise indicated in Schedule I, cash
registers supplied by the Host Store will be operated by Tiffany Staff who
will be trained in the operation of such registers and credit authorization
procedures by the Host Store; Tiffany Staff shall be responsible to follow
such credit authorization procedures and Tiffany-Japan will be responsible
for any discrepancies in the amount of cash proceeds occurring while in the
custody of Tiffany Staff, which discrepancies shall be accounted for on a
monthly basis.
5.5 The Host Store shall collect proceeds of all sales at the end of each day
and hold the same. Each Host Store shall be responsible for any
discrepancies in the amount of cash proceeds occurring while in the custody
of the Host Store, which discrepancies shall be accounted for on a monthly
basis.
5.6 Each Host Store shall close its accounts for the sale and return of Tiffany
Merchandise at the end each month and report Net Sales to Tiffany-Japan by
the 15th day of the following month.
5.6.1 By the applicable Monthly Remission Date indicated in Schedule I
attached, the Host Store shall remit to a bank account designated
by Tiffany-Japan (a) Net Sales for the
month in question plus the applicable consumption tax reduced by
(b) the associated Base Percentage and the applicable consumption
tax with respect to such Base Percentage.
5.6.2 In calculating the applicable Base Percentage that may be
retained by any Host Store, the applicable Sales Adjustment
Factor in a Current Period shall be initially determined by Net
Sales in the concerned Boutique during the immediately preceding
Prior Period. If, at the conclusion of such Current Period, Net
Sales in such Boutique during such Current Period would require
payment of a greater or lesser Base Percentage, any necessary
adjustment shall be made on the first Remission Date following
the close of such Current Period by retention of an additional
portion of Net Sales or by retention of a smaller portion of Net
Sales, as the case may be, or to the extent such means of
adjustment is not available or sufficient, by immediate cash
payment.
5.6.3 From time to time Tiffany-Japan shall provide to each Host Store
a list of all Category B Merchandise and Category C Merchandise
available at such Host Store. Such list shall contain the
following information for all such items of Tiffany Merchandise:
the product description, the stock-keeping number, the Current
Retail Price, the New York Retail Price and the applicable Base
Percentage.
5.7 Subject to the provisions concerning Price Reduction Programs set forth in
Section 5.2 above, each Host Store shall make available to customers in the
Boutiques credit terms generally available to customers in its stores and
shall bear the risk of credit losses. Sales of Tiffany Merchandise made on
credit shall be accounted for to Tiffany-Japan as though they were made on
a cash basis and Tiffany-Japan shall not be charged for any credit losses
that the Host Store may incur in connection with such sales.
Notwithstanding the foregoing, in any Concession Boutique in which Tiffany
Staff operates cash registers, Tiffany-Japan will be responsible for any
credit loss incurred due to the failure of Tiffany Staff to follow the Host
Store's credit authorization procedure.
5.8 Tiffany-Japan agrees that Boutiques will accept the return of Tiffany
Merchandise purchased by the Host Store's customers in accordance with
return policies generally available to customers in MITSUKOSHI stores.
5.9 Without prior approval from Tiffany-Japan, the Host Store shall not sell
Tiffany Merchandise to customers who evidence an intention to re-sell the
Tiffany Merchandise or to use the Tiffany Merchandise for promotional
purposes as premiums or novelty gifts-with-purchase that would, in the
reasonable opinion of Tiffany-Japan, adversely affect the marketing image
of Tiffany Merchandise.
5.10 As provided below, information shall be collected, in the form of "customer
cards", from and about customers who purchase Tiffany Merchandise in the
Boutiques and such information shall be shared between Tiffany-Japan and
Mitsukoshi. Information concerning such customers, including names,
addresses, phone numbers, and purchase histories related to Tiffany
Merchandise (the "Customer Information") shall be considered private
information and Mitsukoshi and Tiffany-Japan agree that Customer
Information shall be handled according to the guidelines established by the
Japan Department Store Association and as required under applicable law. In
handling Customer Information, the parties further agree as follows:
5.10.1 the parties shall consult with each other in advance before
obtaining, using or disclosing Customer Information and shall
appropriately manage and safeguard the Customer Information by
instructing their respective employees to protect the privacy of
such information and prevent unauthorized disclosure;
5.10.2 before obtaining Customer Information, Tiffany-Japan or
Mitsukoshi, as the case may be, shall first obtain the customer's
consent and explain the purposes for which the Customer
Information may be used; neither Tiffany-Japan nor Mitsukoshi
shall use the Customer Information for any purpose other than as
authorized by the customer or as permitted by law or the
guidelines referred to above; and
5. if Customer Information is used or disclosed in violation of the
provisions of this Section 5.10 as a result of the intentional
acts or negligence of Tiffany-Japan, Mitsukoshi or their
respective employees, the party responsible shall attempt to
resolve such matter at its own initiative and cost and in
consultation with the other party.
5.11 Tiffany-Japan will pay the Host Store the Incentive Fee. Payment of the
Incentive Fee shall be made in February of each year with respect to
Above-Target Sales made in the 12-month period ended on January 31 of that
year and will be computed on a Boutique-by-Boutique basis.
5.11.1 Notwithstanding any provisions to the contrary in this Agreement,
the Incentive Fee for each Existing Boutique will be calculated as
follows for the periods indicated below:
A. The Incentive Fee for the nine-month period ending October 31,
2001 shall be Five Percent (5%) of the excess of Net Sales in such
period over Net Sales in the nine-month period ended October 31,
2000.
B. The Incentive Fee for the three-month period ending January 31,
2002 shall be Five Percent (5%) of the excess of Net Sales in such
period over the lesser of (i) One Hundred and Ten Percent (110%)
of Net Sales in the three month period ended January 31, 2001 or
(ii) the sales goal that has been set by Tiffany-Japan for the
Boutique as part of Tiffany-Japan's annual planning process.
ARTICLE VI
Construction, Operation, Renovation, Maintenance and Improvement of Boutiques
6.1 Mitsukoshi shall, at its cost, provide all necessary wall-coverings,
furniture, display cases, jewelry forms, window display units, lighting
fixtures and lighting supplies for the Boutiques.
6.2 The Host Stores shall provide, at their cost and expense, electricity,
water, heat and air-conditioning for all Boutique operations. Cash
registers, facsimile machines and phone systems for the Boutiques shall be
supplied by the Host Stores, at their cost and expense.
6.3 Merchandise accounting systems for the Boutiques shall be provided by
Tiffany-Japan.
6.4 All New Boutiques shall be constructed and outfitted at the Host Store's
cost and expense to Tiffany-Japan's standards for Boutique design,
construction and appearance. All plans and specifications for material and
equipment for the construction, outfitting or renovation of the Boutiques
will be prepared by Mitsukoshi and reviewed with Tiffany-Japan prior to the
start of construction and Mitsukoshi agrees to make any changes necessary
to conform such plans and specifications to Tiffany-Japan's standards.
Tiffany-Japan reserves the right to make changes in such standards from
time to time. In the event that such standards are changed by
Tiffany-Japan, each concerned Host Store shall, after notice of such
changes, effect such changes in its Boutique on the first occasion that the
Host Store is required to Renovate such Boutique pursuant to Section 6.5
below, all such changes to be made at the Host Store's cost and expense.
6.5 Host Stores shall, at their own cost and expense, Renovate each Boutique at
least once during each Renovation Cycle that occurs before the Expiration
Date. If, due to excessive wear and tear, any Boutique ceases to be in
first class condition, consistent with Tiffany-Japan's standards, the Host
Store shall promptly Renovate the relevant part of such Boutique,
regardless of the applicable Renovation Cycle. If, due to damage from
casualty, any Boutique ceases to be in first class condition, consistent
with Tiffany-Japan's standards, the Host Store shall promptly Renovate the
relevant part of such Boutique, regardless of the applicable Renovation
Cycle, unless the entire Host Store remains closed as a consequence of such
casualty, in which case Renovation shall not be required until the Host
Store reopens for business, if at all.
6.6 Host Stores shall, at their own cost and expense, perform all Housekeeping
Operations for each Boutique as provided in Schedule H.
6.7 In each Concession Boutique, Mitsukoshi agrees to install, on or before the
Effective Date, at Mitsukoshi's cost and expense, security equipment
consistent with Tiffany-Japan's standards. Such equipment shall include:
merchandise storage vaults; secure premises that may be closed off after
trading hours by means of a rolling locking gate; and electronic security
measures such as closed circuit television monitoring, intrusion monitoring
and alarms and panic buttons. In addition, for each In-store Concession
Boutique, the Host Store shall, at the Host Store's cost and expense,
provide security guard services to the same extent such services are
provided for other departments within the store location.
6.8 In accordance with the Completion Schedule set forth in Schedule I, the
Host Stores shall make, at their own cost and expense, the Boutique
Improvements set forth in Schedule I.
ARTICLE VII
Brand and Boutique Management
7.1 Tiffany-Japan shall manage the TIFFANY & CO. brand within the Boutiques
subject to the Host Store's store-wide operational guidelines.
7.2 All Boutiques shall be managed in accordance with the Operating Manual to
the extent that the Operating Manual is not inconsistent with the express
terms of this Agreement and the Host Store's store-wide operational
guidelines.
7.3 In the event an issue arises which is not dealt with in this Agreement or
in the Operating Manual, the Brand Manager (or where there is no Brand
Manager, the Assistant Brand Manager) and the Boutique Manager shall
discuss such issue and attempt to resolve it to the satisfaction of both.
If such issue cannot be resolved despite such a consultation, it shall be
resolved by consultation between the President of Tiffany-Japan or his
designate and the President of the Host Store or his designate.
ARTICLE VIII
Staffing of Boutiques
8.1 Tiffany-Japan shall provide, at its own expense, a Brand Manager and/or
Assistant Brand Manager to manage the TIFFANY & CO. brand in each Boutique,
as indicated in Schedule I.
8.2 The Host Store shall provide, at its own expense, a Boutique Manager for
each Boutique and, for each Concession Boutique, an Assistant Boutique
Manager. If provided in Schedule I, such Boutique Managers and assistants
thereto may be Mitsukoshi employees who are simultaneously assigned other
duties in the Host Store.
8.3 For Standard Boutiques, the Host Store shall provide, while this Agreement
remains effective and at its own expense, Mitsukoshi Staff in the numbers
indicated in Schedule I, provided that such numbers shall be subject to
adjustment as follows:
8.3.1 During the month of February in each year starting with February
of 2003, for each Standard Boutique the Host Store shall meet
with Tiffany-Japan and review the number of Mitsukoshi Staff
required to be provided; Net Sales made in each Standard Boutique
during the 12-month period ended 31 January of the current year
(the "Current Period") shall be compared to Net Sales in such
Boutique during the comparable period ended in the prior year
(the "Prior Period"); for each increase in Net Sales
of Y100,000,000 in the Current Period over the Prior Period the
number of Mitsukoshi Staff to be provided at such Boutique shall
be increased by one; for each decrease in Net Sales in the
Current Period from the Prior Period, the number of Mitsukoshi
Staff to be provided at such Boutique shall be decreased by one;
such increases or decreases to be effective as of the end of
April in the current year;
8.3.2 In the event that the selling floor of any Standard Boutique is
increased or decreased through renovation or relocation, the
parties shall meet and discuss an appropriate increase or
decrease in the number of Mitsukoshi Staff to be provided.
8.4 For Concession Boutiques, Tiffany-Japan shall provide, at its own expense,
Tiffany Staff in the numbers indicated in Schedule I.
8.4.1 During the month of February in each year starting with February
of 2003, for each Concession Boutique Tiffany-Japan shall meet
with the Host Store and review the number of Tiffany Staff
required to be provided; Net Sales made in each Concession
Boutique during the Current Period shall be compared to Net Sales
in such Boutique during the Prior Period; for each increase in
Net Sales of Y100,000,000 in the Current Period over the Prior
Period the number of Tiffany Staff to be provided at such
Boutique shall be increased by one; for each decrease in Net
Sales in the Current Period from the Prior Period, the number of
Tiffany Staff to be provided at such Boutique shall be decreased
by one; such increases or decreases to be effective as of the end
of April in the current year;
8.4.2 In the event that the selling floor of any Concession Boutique is
increased or decreased through renovation or relocation, the
parties shall meet and discuss an appropriate increase or
decrease in the number of Tiffany Staff to be provided.
8.5 Tiffany Staff, Brand Managers and Assistant Brand Managers shall be the
employees of Tiffany-Japan and shall comply with the supervision and
instruction provided by Tiffany-Japan. With respect to working hours,
security procedures and other operating procedures necessary for the
day-to-day operation of a department store, they shall adhere to the
supervision and instruction of Tiffany-Japan to the extent that such
supervision and instructions do not contradict the rules of the Host Store.
Tiffany Staff, Brand Managers and Assistant Brand Managers shall have
access to the employees' cafeteria, rest-rooms, recreation rooms and other
welfare facilities within the MITSUKOSHI stores used by the Host Store's
employees.
8.6 Mitsukoshi Staff, Boutique Managers and Assistant Boutique Managers shall
be the employees of the Host Store and shall comply with the supervision
and instruction provided by Host Store. With respect to working hours,
security procedures and other operating procedures necessary for the
day-to-day operation of a department store, they shall adhere to the
supervision and instruction of Host Store.
8.7 When a Host Store wishes to allocate an employee as Mitsukoshi Staff to a
Boutique, or when Tiffany-Japan wishes to dispatch an employee as Tiffany
Staff to a Boutique, the allocating/dispatching party shall write the name,
sex, age and brief personal history of such employee on a form agreed by
the parties in advance and submit the same to the opposite party for
informational purposes only. The party that has received such information
shall keep such information strictly confidential and shall not use the
same for any purposes other than the purpose for which the concerning
information is disclosed.
8.8 The salary and welfare expenses of Tiffany Staff shall be borne by
Tiffany-Japan and the salary and welfare expenses of Mitsukoshi Staff shall
be borne by the Host Store.
8.9 The working conditions for Tiffany Staff shall be the same as those for the
other employees of Tiffany-Japan and the working conditions for the
Mitsukoshi Staff shall be the same as those for the other employees of the
Host Store. Working hours and holidays shall be controlled by the Brand
Manager, in the case of Tiffany Staff, and by the Host Store general
manager, in the case of Mitsukoshi Staff.
8.10 Tiffany-Japan shall provide training to the Mitsukoshi Staff with respect
to the Tiffany Merchandise, the history and traditions of Tiffany & Co.,
the treatment of customers and merchandise management systems. Such
training shall be provided within the Boutiques, or, when necessary, in
facilities provided by the Host Store. If the Host Store cannot or will not
provide such facilities for training, Tiffany-Japan will provide such
facilities in an appropriate location, but the Host Store shall pay
reasonable travel, food and lodging expenses for the Mitsukoshi Staff to
attend such training.
8.11 Tiffany-Japan and the Host Store shall discuss with each other the work
performance of the Tiffany Staff, the Mitsukoshi Staff, the Boutique
Managers, the Brand Managers and the Assistant Brand Managers.
8.12 For Tiffany Staff, Tiffany-Japan shall, by the end of each month, submit a
monthly work schedule for the coming month to the Boutique Manager of the
Concession Boutique in question; for Mitsukoshi Staff, the Host Store
shall, by the end of each month, submit a monthly work schedule for the
coming month to the Brand Manager of the Standard Boutique in question.
8.13 Each year during the holiday season Mitsukoshi shall provide, at each
Standard Boutique, in addition to the full-time Mitsukoshi Staff specified
in Schedule I, Seasonal Mitsukoshi Staff for the number of Staff Days
calculated as follows: [Number of Mitsukoshi Staff specified in Schedule I
for the Boutique in question]*[0.5]*[21]. The foregoing calculation will
yield the number of Staff Days of Seasonal Mitsukoshi Staff to be provided.
A "Staff Day" is a full days' work or the equivalent in partial days
worked. In advance of the holiday season each year, Tiffany-Japan shall
provide Mitsukoshi with a proposed schedule for Seasonal Mitsukoshi Staff
by date and hours to be worked and the parties will meet to discuss such
schedule and come to a reasonable agreement in accordance with this Section
8.13.
ARTICLE IX
Display and Packaging of Tiffany Merchandise
9.1 Tiffany-Japan shall determine the manner in which the Tiffany Merchandise
is displayed within a Boutique subject to the Host Store's store-wide
display guidelines.
9.2 Subject to the Host Store's store-wide display guidelines, Tiffany-Japan
shall determine the manner in which store windows, vitrines and other
showcases associated with a Boutique are decorated and the selection of
Tiffany Merchandise to be displayed in such windows, vitrines and other
showcases. The Host Stores shall not diminish, appropriate or reassign any
store windows, vitrines or other showcases associated with Existing
Boutiques as of the date of this Agreement.
9.3 For Standard Boutiques, the Host Store shall provide, at its own expense,
packaging materials (blue boxes, ribbons, wrapping materials, felt bags,
jewelry boxes and shopping bags) meeting the worldwide standards for
design, color, quality and security (including measures designed to protect
against counterfeiting) established by Tiffany-Japan's controlling
Affiliate from time to time and use such materials whenever Tiffany
Merchandise is sold from a Boutique. If, subsequent to the date of this
Agreement, Tiffany-Japan's controlling Affiliate makes changes to such
standards, Host Stores shall conform to such changed standards within six
months following notification of such changes. Host Stores agree that they
will maintain appropriate physical and inventory controls to maintain the
security of such packaging materials and that they will not use such
materials except for the packaging of Tiffany Merchandise. Tiffany-Japan
shall cooperate in good faith with Mitsukoshi so that Mitsukoshi may obtain
the required packaging materials at the best prices available in Japan;
provided that this cooperation shall not require a modification to such
worldwide standards or require that Tiffany-Japan's overseas affiliates
include Mitsukoshi's requirements in any bulk purchase orders placed.
9.4 For Standard Boutiques, the Host Store shall provide and display, at its
own expense, fresh floral arrangements conforming to Tiffany-Japan's
standards, which arrangements shall be changed weekly.
9.5 For Standard Boutiques, the Host Store shall provide, at its own expense,
all decorative items used in the Boutiques (except such items as
Tiffany-Japan elects to provide) and all employee uniforms worn by
Mitsukoshi Staff. All such items and uniforms shall conform to
Tiffany-Japan's standards for design, color and quality.
9.6 For Concession Boutiques, Tiffany-Japan shall provide all items that would
be the responsibility of Host Store under sections 9.3 through 9.5 above.
9.7 All signs used in connection with the Boutiques shall conform to the
standards established by Tiffany-Japan.
ARTICLE X
Advertising, Promotion and Public Relations
10.1 Except as provided in Schedule ADV, Tiffany-Japan shall be responsible to
advertise and promote Tiffany Merchandise in Japan and shall make all
arrangements with respect to advertising, promotion and public relations in
respect of Tiffany Merchandise, the Trademarks, Tiffany-Japan or its
Affiliates or the designers associated with Tiffany-Japan's Affiliates.
Mitsukoshi and/or the Host Stores shall be responsible for certain costs of
advertising and promotional activity as indicated in Schedule ADV.
10.2 Unless otherwise expressly agreed in writing between the parties, expenses
for advertising and promotion for Tiffany Merchandise shall be allocated
between Mitsukoshi and Tiffany-Japan as set forth in Schedule ADV.
10.3 Except as noted in Schedule ADV, Tiffany-Japan shall have complete control
of the all elements of advertising, promotion and public relations relating
to Tiffany Merchandise, the Trademarks, Tiffany-Japan and its Affiliates or
the designers associated with Tiffany-Japan's Affiliates, including graphic
design, photography, copy, scheduling, media selections and advertising
agencies.
10.4 In all advertising for Tiffany Merchandise, Mitsukoshi shall use creative
materials (mechanical and films) provided by Tiffany-Japan.
10.5 In the event that Mitsukoshi or any Host Store wishes to undertake any
advertising or promotional activity with respect to Tiffany Merchandise in
addition to that conducted by Tiffany-Japan, it shall first seek the
permission of Tiffany-Japan. Such advertising shall be conducted at
Mitsukoshi's own cost and expense and Mitsukoshi shall conform to the
following procedures:
10.5.1 Mitsukoshi or the Host Store shall first meet with a
representative of Tiffany-Japan and discuss the objectives of the
advertising or promotional activity and how it will complement
advertising and promotional activity undertaken by Tiffany-Japan;
10.5.2 Before use of any advertising or promotional material not
supplied by Tiffany-Japan or the Trademarks, Mitsukoshi or the
Host Store shall first obtain the written approval of
Tiffany-Japan to such use; and
10.5.3 Before commencement of any promotional or public relations
activity relating to Tiffany Merchandise, the Trademarks,
Tiffany-Japan or its Affiliates or the designers associated with
Tiffany-Japan's Affiliates, Mitsukoshi or the Host Store shall
first obtain the written approval of Tiffany-Japan to such
activity.
10.6 Neither Mitsukoshi nor any Host Store shall issue or make any public
statement on behalf of Tiffany-Japan or any of its Affiliates or concerning
Tiffany Merchandise, Tiffany-Japan, its Affiliates or any of the designers
associated with such Affiliates unless and until such public statement
shall first have been reviewed and approved by Tiffany-Japan, it being
understood and agreed that the only designated public spokesperson for
Tiffany-Japan shall be the President of Tiffany-Japan or his designate.
ARTICLE XI
Expiration or Termination of Agreement
11.1 On the Expiration Date, this Agreement shall terminate unless previously
terminated for default as provided below. Prior to the Expiration Date,
Mitsukoshi and Tiffany-Japan shall meet and discuss arrangements which will
permit continuing operations of Boutiques within the stores of Mitsukoshi
on terms which are mutually acceptable to the parties and reflect
then-current market rates for the services and facilities provided by
Mitsukoshi.
11.2 The occurrence of any one or more of the following events(regardless of the
reason therefor) shall constitute a default allowing the non-defaulting
party to terminate this Agreement on written notice and/or to pursue other
remedies available at law or otherwise under this Agreement (provided,
however, that Mitsukoshi may not assert a default against any of its
Affiliates or vice versa):
11.2.1 Any party shall fail to pay any monies due under this Agreement
other than amounts disputed for bona fide reasons and the same
shall not be paid within thirty (30) days after written notice
from the party to whom such monies shall be due;
11.2.2 Any party shall fail or neglect to perform, keep, or observe any
term, provision, condition, covenant, warranty or representation
contained in this Agreement or in any other agreement, contract
or undertaking contemplated under this Agreement and the same
shall not be cured to the other party's satisfaction within
thirty (30) days after written notice identifying such event or
condition or, in the event such failure or neglect is not
reasonably susceptible to cure within thirty (30) days, the party
charged with such failure or neglect shall have further failed to
commence cure and diligently proceed to completion of such cure;
11.2.3 The insolvency of any party(for this purpose, "insolvency" shall
mean the inability to satisfy its debts as they come due);
11.2.4 The institution of any proceeding or arrangement by or against
any party relating to or in the nature of bankruptcy, insolvency,
or an assignment for the benefit of creditors, which proceeding
or arrangement is consented to by the party against whom it is
instituted or is not dismissed or discontinued within sixty (60)
days after the institution of such proceeding or arrangement;
11.2.5 The making of any assignment for the benefit of creditors or the
appointment of a receiver of or for any party or of or for all or
substantially all of the business, assets or properties of any
party;
11.2.6 The transfer or attempted transfer (or any transaction the effect
of which is to transfer) of any license, right or privilege
granted under this Agreement except as expressly permitted under
this Agreement; or
11.2.7 Any conduct by Mitsukoshi or its Affiliates which is materially
injurious to the value of the Trademarks or to Tiffany's name
and/or reputation or to the name and/or reputation of any other
owner of one of the Trademarks.
11.2.8 Any conduct by Tiffany-Japan which is materially injurious to the
value of the trademarks, name and/or reputation of Mitsukoshi or
Mitsukoshi's Affiliates.
In addition to or in lieu of the remedies for default stated above, in the
event of default which concerns one or more Boutiques, Tiffany-Japan may
elect to terminate the Agreement only in respect to the offending
Boutiques. For the purposes of this Section 11.2, the term "party" shall
include reference to all Host Stores that are Mitsukoshi's Affiliates.
11.3 Termination of the Agreement shall not discharge the obligation of any
party to pay monies or other obligation due under this Agreement as of the
date of termination.
11.4 Upon the termination of the Agreement, each Host Store shall immediately
remove from its Boutiques, at its own expense, all fixtures and signs
bearing the Trademarks and all other indications of the brand identity of
TIFFANY & CO. and otherwise cease to identify itself as a source of Tiffany
Merchandise.
ARTICLE XII
Insurance and Indemnity
12.1 Tiffany-Japan shall provide Liability Insurance.
12.2 To the extent not covered by the Liability Insurance, Mitsukoshi shall,
during and after the term of this Agreement, indemnify, defend and hold
Tiffany-Japan harmless from and against any and all claims, demands, suits,
actions, causes of action, loss, damage, liability and attorney's fees, and
other costs and expenses incurred by Tiffany-Japan as the result of any
violation of this Agreement by, or any act of omission or commission on the
part of Mitsukoshi, or any of its agents, servants, or employees.
12.3 To the extent not covered by the Liability Insurance, Tiffany-Japan shall
during and after the term of this Agreement, indemnify, defend and hold
Mitsukoshi harmless from and against any and all claims, demands, suits,
actions, causes of action, loss, damage, liability and attorney's fees, and
other costs and expenses incurred by Mitsukoshi as a result of any
violation of this Agreement by, or any act of omission or commission on the
part of Tiffany or Tiffany-Japan, or any of their respective agents,
servants, or employees, and from all claims, damages, causes in action, tax
liabilities, fines, or suits arising from the sale of defective merchandise
(provided, however, that in the case of claims, damages, etc. based upon a
product liability case, i.e. a case in which it is claimed that bodily
injury or property damage (other than to the product itself) has been
incurred as result of a defect (including a defect, non-statement or
mis-statement in labeling etc.) or a claimed defect in Tiffany Merchandise,
any and all the claims, damages, etc. arising from the sale of such
merchandise, regardless of whether such merchandise is defective or not,
shall be included in this indemnity) or as a result of use of the
Trademarks as permitted in this Agreement.
ARTICLE XIII
Miscellaneous
13.1 No party will make any press release announcing the signing of this
Agreement until the other parties shall have had an opportunity to review
and comment upon the proposed press release.
13.2 Neither this Agreement, nor any part hereof, shall be construed to create
in favor of Tiffany or Tiffany-Japan a lease or possession right or, except
as expressly stated in this Agreement, any other rights, in the Boutiques
located in the Host Stores.
13.3 This Agreement may not be modified, altered or amended except by an
agreement in writing signed by all parties.
13.4 Except as expressly provided in this Agreement, no party may sell,
delegate, assign or transfer this Agreement, or any part hereof, without
the consent of the other parties. It is expressly agreed that Mitsukoshi
may delegate its obligations under this Agreement to its Affiliates but
will remain fully liable under the terms of this Agreement for the
performance of its Affiliates.
13.5 The failure by any party, at any time or times, to require strict
performance by any other party of any provision of this Agreement shall not
waive, affect or diminish any right thereafter to demand strict compliance
and performance therewith. Any suspension or waiver (which must be in
writing) by any party of a default under this Agreement by any other party
shall not suspend, waive or affect any other default under this Agreement,
whether the same is prior or subsequent thereto and whether the same or of
a different type.
13.6 Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement; provided that if
any provision which has been a material consideration to either party
entering into this Agreement is so prohibited or invalid the party to which
such provision was material may terminate this Agreement if the other party
is unwilling or unable, after negotiation in good faith, to modify this
Agreement to replace such material provision with a valid substitute
provision which is reasonably acceptable.
13.7 Subject to the provisions of Section 13.4, this Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto.
13.8 This Agreement shall in all respects be governed by and construed in
accordance with the laws of Japan applicable to agreements executed,
delivered and performed within Japan, without regard to Japan's conflict of
laws rules, including all matters of construction, validity and
performance.
13.9 Except as otherwise provided herein, any notice necessary or desirable
hereunder shall be in writing, and shall be deemed to have been validly
served, given or delivered (i) effective upon hand delivery to an officer
of the recipient or (ii) effective ten (10) days following posting in the
United States or Japan by registered airmail, with proper postage prepaid,
and addressed to the party to be notified as follows:
If to Tiffany-Japan, at: 3-1-31, Minami-Aoyama, Minatu-ku, Tokyo
107-0062, Japan Attn: President, with a copy to Tiffany, 727 Fifth
Avenue, New York, NY 10022 Attn: General Counsel
If to Mitsukoshi, at: 4-1, Nihombashi Muromachi 1-chome, Chuo-Ku,
Tokyo 103-8001, Japan, Attn: General Manager, Branded Merchandise
Division.
13.10 The Article titles contained in and throughout this Agreement are and
shall be without substantial meaning or content of any kind whatsoever
and are not a part of this Agreement.
13.11 The parties shall discuss and attempt to solve in good faith all
disputes, controversies or differences that arise between them. All
disputes, controversies, or differences which may arise between the
parties, out of or in relation to or in connection with this Agreement,
or the breach hereof, which cannot be resolved by discussion between
the parties shall be finally decided by court proceedings. The parties
hereto agree that the Tokyo District Court sitting in Tokyo, Japan
shall have jurisdiction over such proceedings.
13.12 No party, including any Host Store, shall be deemed to have breached this
Agreement by reason of delay or failure in performance resulting from
a cause beyond the control and without the fault or negligence of
such party. Said causes shall include, but not be limited to: acts of
God; acts of war; riot; epidemics, fires, floods or other disasters;
acts of government; strikes or lockouts. In the event a casualty loss or
other such event beyond its control renders it impossible or reasonably
unlikely that Mitsukoshi or any Host Store will be able to operate one
or more of the Boutiques for a period in excess of three (3) months,
Tiffany-Japan shall have the right to effect a partial termination of
this Agreement in respect of the affected Boutique(s) only and this
Agreement shall continue in full force and effect with respect to the
unaffected Boutiques.
13.13 This Agreement shall be entered into in triplicate in both English and
Japanese; however, in the event that any conflict in meaning arises when
the Japanese version of this Agreement is compared to the English version
of this Agreement, it is hereby agreed that the English version will
supersede the Japanese, it being acknowledged that this Agreement was
negotiated in the English language.
13.14 This is the entire agreement between the parties with respect to
the subject matter hereof. It supersedes all prior agreements, memoranda,
oral agreements or understandings between the parties. Nothing in this
Agreement shall be deemed to impose an exclusive relationship upon either
party and both parties shall be free to deal with others in all
respects unless expressly provided otherwise in this Agreement.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST
WRITTEN ABOVE.
MITSUKOSHI LIMITED
("Mitsukoshi")
By: /s/ Taneo Nakamura
-----------------------------------------
Name: Taneo Nakamura
Title: General Manager, Operations Headquarters
TIFFANY & CO. JAPAN, INC.
("Tiffany-Japan")
By: /s/ Kikuo Fukui
-----------------------------------------
Name: Kikuo Fukui
Title: President/Representative in Japan
SCHEDULES TO AGREEMENT
Schedule I
Schedule C - Boutiques to be closed
Schedule H - Housekeeping
Schedule R - Renovation
Schedule ADV
SCHEDULE I
Boutique Number 1
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: SAPPORO
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/03
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [14]
Last Renovation Date/Renovation Cycle April 25, 2000 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 14 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion:[Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: [Conversion Date]
I-1
SCHEDULE I
Boutique Number 2
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: SENDAI
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/04
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [14]
Last Renovation Date/Renovation Cycle September 15, 1998 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 14 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion:
[Security Equipment, Shutters
and Safe]
Completion Schedule for Boutique Improvements: [Conversion Date]
I-2
SCHEDULE I
Boutique Number 3
Present Boutique Location: NIIGATA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle March 3, 2001 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 11
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-3
SCHEDULE I
Boutique Number 4
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: NIHONBASHI
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/02
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 2 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3 [18]
Last Renovation Date/Renovation Cycle April 26, 1997 / 4 - 6 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 18 [2]
Describe Boutique Improvements to be completed: Renovation
On Conversion:[Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: Renovation by April 26,2003
[Conversion Date]
I-4
SCHEDULE I
Boutique Number 5
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: GINZA
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/03
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 2 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3 [27]
Last Renovation Date/Renovation Cycle June 1, 1997 / 4 - 6 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 27 [2]
Describe Boutique Improvements to be completed: Renovation
On Conversion: [ Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: Renovation by June 1, 2003
[Conversion Date]
I-5
SCHEDULE I
Boutique Number 6
Present Boutique Location: SHINJUKU
New Location: N/A
Type of Boutique: Concession
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Tiffany Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: Yes
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 48
Last Renovation Date/Renovation Cycle September 14, 1999 / 4 - 6 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 2
Describe Boutique Improvements to be completed: To be expanded and Renovated
Completion Schedule for Boutique Improvements: The expansion and renovation to
be completed by 9/14/2005
I-6
SCHEDULE I
Boutique Number 7
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: IKEBUKURO
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/03
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [15]
Last Renovation Date/Renovation Cycle September 22, 1998 / 5years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 15 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion:[Security
Equipment, Shutters and
Safe]
Completion Schedule for Boutique Improvements: [Conversion Date]
I-7
SCHEDULE I
Boutique Number 8
Present Boutique Location: CHIBA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): End
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle March 11, 2000 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 11
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-8
SCHEDULE I
Boutique Number 9
Present Boutique Location: IKSPIARI
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 2
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3
Last Renovation Date/Renovation Cycle July 7, 2000 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 15
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-9
SCHEDULE I
Boutique Number 10
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: YOKOHAMA
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 4/25/02
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [14]
Last Renovation Date/Renovation Cycle April 25, 1997 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 14 [2]
Describe Boutique Improvements to be completed: Renovation
On Conversion: [Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: Renovation to be Completed by
April 25, 2002
[Conversion Date]
I-10
SCHEDULE I
Boutique Number 11
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: LANDMARK
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/02
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 2 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [No]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3 [22]
Last Renovation Date/Renovation Cycle March 31, 2001 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 22 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion: [Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements:
[Conversion Date]
I-11
SCHEDULE I
Boutique Number 12
Present Boutique Location: NAGANO *
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle October 1991 open / N/A
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 6
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
* See Schedule C
I-12
SCHEDULE I
Boutique Number 13
Present Boutique Location: KANAZAWA
New Location: N/A
Type of Boutique: Concession
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 10
Last Renovation Date/Renovation Cycle October 30, 1999 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 2
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-13
SCHEDULE I
Boutique Number 14
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: NAGOYA SAKAE
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/04
Cash Register Operated By: 0Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 2 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3 [28]
Last Renovation Date/Renovation Cycle March 3, 1999 / 4 - 6 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 28 [2]
Describe Boutique Improvements to be completed: Renovation
On Conversion: [Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: Renovation by March 3, 2005
[Conversion Date]
I-14
SCHEDULE I
Boutique Number 15
Present Boutique Location: HOSHIGAOKA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle March 3, 2001 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 6
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-15
SCHEDULE I
Boutique Number 16
Present Boutique Location: NAGOYA HILTON *
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle March 1989 open / N/A
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 5
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
* See Schedule C
I-16
SCHEDULE I
Boutique Number 17
Present Boutique Location: OSAKA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle May 8, 1996 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 7
Describe Boutique Improvements to be completed: Host Store relocation to be
determined in 2 years; unless
Host Store is relocated,
Renovation.
Completion Schedule for Boutique Improvements: In the case of Renovation,
Renovation to be Completed by
April 30, 2004
I-17
SCHEDULE I
Boutique Number 18
Present Boutique Location: KOBE
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 2
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 3
Last Renovation Date/Renovation Cycle March 11, 2000 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 11
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-18
SCHEDULE I
Boutique Number 19
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: HIROSHIMA
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/04
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [14]
Last Renovation Date/Renovation Cycle November 10, 1998 / 5years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 14 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion: [Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements: [Conversion Date]
I-19
SCHEDULE I
Boutique Number 20
Present Boutique Location: KURASHIKI
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle October 1991 open / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 8
Describe Boutique Improvements to be completed: Renovation
Completion Schedule for Boutique Improvements: Renovation by March 31, 2002
I-20
SCHEDULE I
Boutique Number 21
Present Boutique Location: MATSUYAMA
New Location: N/A
Type of Boutique: Concession
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Tiffany Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: Yes
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 10
Last Renovation Date/Renovation Cycle June 8, 1999 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 2
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-21
SCHEDULE I
Boutique Number 22
Present Boutique Location: TAKAMATSU
New Location: N/A
Type of Boutique: Concession
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Tiffany Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: Yes
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 10
Last Renovation Date/Renovation Cycle October 1, 1999 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 2
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-22
SCHEDULE I
Boutique Number 23
[Bracketed Items Indicate Changes Made Upon Conversion]
Present Boutique Location: FUKUOKA
New Location: N/A
Type of Boutique: Standard [Concession]
Conversion Date
(converted from Standard to Concession): 3/1/04
Cash Register Operated By: Mitsukoshi Staff [Tiffany Staff]
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1 [1]
Number of Assistant Brand Managers From Tiffany-Japan: 1 [1]
Number of Boutique Managers From Host Store 1 [1]
Number of Assistant Boutique Managers From Host Store: 1 [1]
Indicate if Boutique Managers and Assistants Have Other Duties: No [Yes]
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2 [18]
Last Renovation Date/Renovation Cycle Autumn 2001 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 18 [2]
Describe Boutique Improvements to be completed: Initially: N/A
On Conversion: [Security
Equipment, Shutters and Safe]
Completion Schedule for Boutique Improvements:
[Conversion Date]
I-23
SCHEDULE I
Boutique Number 24
Present Boutique Location: TIFFANY-KAN
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 20th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle April 1992 open / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 25
Describe Boutique Improvements to be completed: Host Store relocation to be
determined in 2 years; unless
Host Store is relocated,
Renovation.
Completion Schedule for Boutique Improvements: In the case of Renovation,
Renovation to be Completed by
April 30, 2004
I-24
SCHEDULE I
Boutique Number 25
Present Boutique Location: KAGOSHIMA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): 25th day of month
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle April 17, 2001 / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 11
Describe Boutique Improvements to be completed: N/A
Completion Schedule for Boutique Improvements: N/A
I-25
SCHEDULE I
Boutique Number 26
Present Boutique Location: OKINAWA
New Location: N/A
Type of Boutique: Standard
Conversion Date
(converted from Standard to Concession): N/A
Cash Register Operated By: Mitsukoshi Staff
Monthly Remission Date
(for prior months' receipts less Base Percentage): End
Number of Brand Managers From Tiffany-Japan: 1
Number of Assistant Brand Managers From Tiffany-Japan: 1
Number of Boutique Managers From Host Store 1
Number of Assistant Boutique Managers From Host Store: 1
Indicate if Boutique Managers and Assistants Have Other Duties: No
Number of Tiffany Staff Members for Boutique
(includes Brand Managers and Assistants):
Regular 2
Last Renovation Date/Renovation Cycle April 1991 open / 5 years
Number of Mitsukoshi Staff Members for Boutique:
(includes Boutique Managers and Assistants):
Regular 6
Describe Boutique Improvements to be completed: Renovation
Completion Schedule for Boutique Improvements: Renovation to be Completed by
April 30,2002
I-26
SCHEDULE C
BOUTIQUES TO BE CLOSED
On or before the end of February 2003:
Nagoya Hilton
On or before the end of February 2004:
Nagano
Schedule H --Mitsukoshi Housekeeping Operations List
----------------------------------------------------
Daily housekeeping Comments
----------------- --------
Store Front
- -----------
Clean Sidewalk
Clean Glass
Inside Store
- ------------
Vacuum Carpet
Clean Mirrors
Clean Stainless Steel showcase trim
Clean glass
Dust Millwork
Replace out lamps, ceiling, showcase, wall units
Repair/Replace broken locks
Empty Trash
Back Office
- -----------
Check out lamps on ceiling and desks
Repair/Replace broken locks
Vacuum Carpet
Clean Furniture
Empty Trash
Rest Rooms
- ----------
Clean Floor
Clean Fixtures, counters, mirrors
Replace out lamps
Restock supplies
Empty Trash
Pantry
- ------
Clean Floor
Clean fixtures, equipment, sink, Microwave
Empty Trash
Weekly Housekeeping
-------------------
Store Front
- -----------
Clean Doors and Trim
Inside Store
- ------------
Clean Artwork Frame & Glass
Vacuum Furniture Fabric
Clean Wall Covering
Back Office
- -----------
Wet mop tile floor
Monthly Housekeeping
--------------------
Store Front
- -----------
Clean Stainless Steel Frames
Clean Tiffany & Co. Sign
H-1
Clean Ektachrome
Mitsukoshi Housekeeping Operations List (cont)
----------------------------------------------
Monthly Housekeeping Comments
-------------------- --------
Clean Glass Wall
Inside Store
Clean Air Conditioning Vents +
Quarterly Housekeeping
----------------------
Inside Store
- ------------
Shampoo Deep Clean Carpet +
Clean Furniture fabric and curtains +
Back Office
- -----------
Service Security System CCTV +
Wax Tile Floor +
Annual Housekeeping
-------------------
Store Front
- -----------
Clean Marble +
Inside Store
- ------------
Touch Up Millwork +
Touch Up Ceiling Paint +
Clean Ceiling Coves *+
Replace customer trays
Back Office
- -----------
Service Safe +
As Needed Housekeeping
----------------------
Store Front
- -----------
Replace out Ektachrome lighting *
Replace out Exterior Vitrine lighting
Repair Sidewalk
Repair Public Wall
Repair Public Ceiling, Lighting
Pest Control
Back Office
- -----------
Service Security Alarm Systems +
+ Need Professional Treatment
* Required in Stand-alone Boutiques Only
H-2
Schedule R - Mitsukoshi Renovation List
Renovation
- ----------
Lease Line/Store Front
- ----------------------
Paint Public Ceiling
Replace Public Lighting
Clean/Restore Public Wall
Review/Replace Tiffany Sign, Ektachrome
Change Facade Design Material
Modify lay-out for improved efficiency
Inside Store
- ------------
Replace Wall Covering
Replace Carpet
Replace Furniture/Upholstery
Replace Display Forms
Replace Artwork
Replace Mirrors
Replace Curtains
Replace showcases, as well as vitrines (wall, countertop and pedestal) and
showcase fabrics
Paint Ceiling
Repair All Millwork
Replace lighting fixtures and update ceiling design
Modify lay-out for improved efficiency
Back Office
- -----------
Paint walls
Replace Wall Covering*
Replace Carpet*
Replace Furniture/Upholstery
Upgrade and Replace Shelving
Upgrade and Replace Security System
Upgrade and Replace Safe
Modify lay-out for improved efficiency
Upgrade lighting/fixtures
Rest Rooms *
- ------------
Replace Fixtures, counter, mirrors
Modify lay-out for improved efficiency
Pantry*
- -------
Replace Fixtures, equipment
Modify lay-out for improved efficiency
* Required in Stand-alone Boutiques Only
Schedule ADV
ALLOCATION OF EXPENSES FOR ADVERTISEMENTS AND MEDIA
- -------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
Medium Type of Expenses to be Expenses to be borne Host Store Mitsukoshi Remarks
Advertising or borne by by Mitsukoshi or Name and Logo to be Used
Event Tiffany-Japan Host Store Location to
be Printed
- -------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
NEWSPAPER Boutique Opening/ No Media and production Host Store Yes Opening day
Renewal expenses for New or placement;
renovated morning
Boutique edition;
paper with
highest
circulation
in the city
of the
Boutique
------------------- ------------------ ---------------------- --------------- ---------------- -------------
Tiffany-Japan- Media and None All Boutiques No
sponsored production and all
merchandise expenses non-Mitsukoshi
promotion stores
------------------- ------------------ ---------------------- --------------- ---------------- -------------
Mitsukoshi-sponsored No Media and production Host Store Yes Media
ads expenses sponsoring ad determined
by
Mitsukoshi
and
Tiffany-Japan
- --------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
MAGAZINES Product or image Media and None No No
promotion production
expenses
- --------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
BACK LIGHT Change Visual: as Film production Maintenance expenses Mitsukoshi Yes
Ektachrome determined by and installation and rent Host Stores
(all locations Tiffany-Japan expenses in Region
other than Boutique
Facade)
- --------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
Boutique Ectachrome Change Visual: as 2nd annual 1st annual change No No Changed
(Boutique Facade) determined by change (film (film production and twice per
Tiffany-Japan production and installation year
installation expenses)
expenses)
- --------------------- ------------------- ------------------ ---------------------- --------------- ---------------- -------------
ADV-1
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
Medium Type of Expenses to Expenses to be borne Host Store Mitsukoshi Remarks
Advertising or be borne by by Mitsukoshi or Name and Logo to be
Event Tiffany-Japan Host Store Location to Used
be Printed
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
TV- Tiffany-produced Production Media No No Only ads
Misukoshi-sponsored ads only (existing previously
productions produced by
only) Tiffany
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
TV - Tiffany-Japan As determined Media and None No No
Sponsored by Tiffany-Japan production
expenses
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
Catalog Production Postage (Standard No No
Boutiques) None
(Concession
Boutiques)
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
Direct Marketing Opening of Production Printing and Postage Yes Yes
Boutique Expenses
Standard Boutiques (other than
printing)
----------------- -------------- ---------------------- -------------- ------------- ---------------
Invitation to Production/ Postage Yes Yes
Event Printing
----------------- -------------- ---------------------- -------------- ------------- ---------------
Response card None Production expenses; Yes Yes
(Guest printing, postage
accept/rejects
invitation
----------------- -------------- ---------------------- -------------- ------------- ---------------
Other customer Production/ Postage Yes Yes
communication Printing
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
Direct Marketing Opening Production Printing/Postage Yes Yes
Expenses
Concession Boutiques
----------------- -------------- ---------------------- -------------- ------------- ---------------
Invitation Production/ Postage Yes Yes
(event outside Printing/
Boutique)
----------------- -------------- ---------------------- -------------- ------------- ---------------
Invitation Production/ None Yes Yes
(event inside Printing/
Boutique) Postage
----------------- -------------- ---------------------- -------------- ------------- ---------------
Response card Production/ None Yes Yes
(Guest Printing/
accept/rejects Postage
invitation
----------------- -------------- ---------------------- -------------- ------------- ---------------
Other customer Production/ None Yes Yes
communication Printing/
Postage
- --------------------- ----------------- -------------- ---------------------- -------------- ------------- ---------------
ADV-2
SHARING OF EXPENSES (FOR EVENTS)
- ---------------------------- -------------------------- ------------------------- --------------------------
Event Item Funded by Tiffany-Japan Funded by Department
Store
- ---------------------------- -------------------------- ------------------------- --------------------------
Events outside Space rent Half of rent Half of rent
of Boutique
(only at the first-class
hotel in the region)
-------------------------- ------------------------- --------------------------
Decoration Half of cost Half of cost
(Event Hall)
-------------------------- ------------------------- --------------------------
Decoration (Flower) Half of cost Half of cost
-------------------------- ------------------------- --------------------------
Showcase (including Half of cost Half of cost
shipping cost)
-------------------------- ------------------------- --------------------------
Gift Half of cost Half of cost
-------------------------- ------------------------- --------------------------
Catalogue production cost Entire cost -
-------------------------- ------------------------- --------------------------
DM materials Entire cost -
-------------------------- ------------------------- --------------------------
DM printing Entire cost -
-------------------------- ------------------------- --------------------------
Postage - Entire cost
-------------------------- ------------------------- --------------------------
Light refreshments served Half of cost Half of cost
-------------------------- ------------------------- --------------------------
Presentation Entire cost -
(See "Note" below)
-------------------------- ------------------------- --------------------------
Announcement board Half of cost Half of cost
- ---------------------------- -------------------------- ------------------------- --------------------------
Events in Boutique Decoration Entire cost -
(Customer communication (Event Hall)
events)
-------------------------- ------------------------- --------------------------
Decoration (Flower) Entire cost -
-------------------------- ------------------------- --------------------------
Gift Entire cost -
-------------------------- ------------------------- --------------------------
DM materials Entire cost -
-------------------------- ------------------------- --------------------------
DM printing Entire cost -
-------------------------- ------------------------- --------------------------
Postage Entire cost -
-------------------------- ------------------------- --------------------------
Presentation
(including costs of food
and drink such as light Entire cost -
refreshment or catering)
-------------------------- ------------------------- --------------------------
Announcement board Entire cost -
- ---------------------------- -------------------------- ------------------------- --------------------------
Note;
Consignor to plan the presentation of these Events.
The parties shall determine any other expenses upon mutual consultation.
ADV-3