Exhibit 10(bb)(i)
SECOND AMENDMENT TO TECHNICAL ASSISTANCE
AND TRADEMARK LICENSE AGREEMENT
BETWEEN GUESS ?, INC. AND NANTUCKET INDUSTRIES, INC.
THIS SECOND AMENDMENT TO TECHNICAL ASSISTANCE AND TRADEMARK
LICENSE AGREEMENT, dated as of June 1, 1996 ("Second Amendment"), between GUESS
?, INC. ("LICENSOR") and NANTUCKET INDUSTRIES, INC. ("LICENSEE"), amends that
certain Technical Assistance and Trademark License Agreement, as previously
amended (the "Agreement"), dated as of December 9, 1992, between LICENSOR and
LICENSEE. Capitalized terms used but not otherwise defined in this Second
Amendment shall have the respective meanings ascribed to them in the Agreement.
WHEREAS, LICENSOR and LICENSEE entered into the Agreement for the
manufacture and sale of the Products; and
WHEREAS, LICENSOR and LICENSEE desire to amend the Agreement on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants and
agreements contained in this Second Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the
execution hereof, the parties agree as follows:
1. The parties acknowledge and agree that, effective as of June 1, 1996
and except for the non-exclusive sell-off period of existing inventory until
September 30, 1996 (as described below), LICENSEE is no longer authorized to
manufacture or sell any men's knit or woven underwear products that bear the
Guess Marks or any other GUESS trademarks (the "Discontinued Products"). All
provisions of the Agreement granting LICENSEE any rights to use the Guess Marks
in connection with the manufacture, promotion, distribution or sale of the
Discontinued Products are hereby deleted. The Discontinued Products shall no
longer be deemed to be "Products" under the Agreement.
LICENSEE shall take the following actions in connection with
the disposition of its Discontinued Products inventory:
A. Within 10 days of execution of this Second Amendment,
LICENSEE shall furnish LICENSOR with a certificate listing all
inventories of Discontinued Products and related work in
process, including all fabrics, trim, packaging and other
materials used in the manufacture and marketing of such
Discontinued Products, on hand or in process, and the location
thereof.
B. On or before September 30, 1996, to stop, and to cause all
LICENSEE's accounts to stop, all sales and shipment of the
Discontinued Products.
C. On or before September 30, 1996, to return to LICENSOR's
representative, all advertising, packaging, promotional, point
of sale and showroom materials relating to the Discontinued
Products.
D. Except as expressly permitted otherwise in writing by
LICENSOR, all sales of the Discontinued Products shall comply
with the conditions set forth in the Agreement (including the
payment of Trademark Royalties thereon), and in particular all
sales shall be made so as to maintain the goodwill, prestige
and reputation for quality associated with GUESS goods.
Notwithstanding the foregoing, the sales of the Discontinued
Products from June 1, 1996 through September 30, 1996, shall
be excluded from the Closeout limitation described in Section
7.2.5, but not from any other limitation contained in the
Agreement.
E. Discontinued Products which remain unsold after September
30, 1996, shall be sold, liquidated or otherwise transferred
only with LICENSOR's prior written consent.
LICENSOR may immediately terminate the Agreement, without any
right to cure, if LICENSEE breaches any provision of the
sell-off plan described above.
2. Pursuant to Section 9.2 of the Agreement, LICENSEE has requested,
and LICENSOR agrees, to renew this License (as amended herein) for a three (3)
year Term through May 31, 1999, in accordance with the terms and conditions of
this Second Amendment.
3. The following new Section 5.11 is hereby added to the Agreement:
"5.11 Notwithstanding Section 7.2.2, LICENSEE shall grant to
LICENSOR a ten percent (10%) Trade Discount on purchases of
Products by LICENSOR from LICENSEE for sale in LICENSOR's
retail and/or factory stores. LICENSEE shall accept from
LICENSOR for full credit in the amount originally invoiced to
LICENSOR, the return of up to fifteen percent (15%) of
Products purchased by LICENSOR from LICENSEE for sale in
LICENSOR's retail and/or factory stores, which remain unsold
and which were shipped by LICENSEE during any part of any
individual contract quarter."
4. Section 7.2.1 of the Agreement is amended to add the following after
the word "Allowances" in the first line thereof:
"(excluding credit given to LICENSOR for return of unsold
Products pursuant to Section 5.11)".
5. Section 7.2.3 of the Agreement is amended as follows:
(i) add the following after the word "Allowances" in
the first line thereof:
"(excluding credit given to LICENSOR for return of
unsold Products pursuant to Section 5.11)".
(ii) add the following after the word "Discounts" in
the second line thereof:
"(excluding the ten percent (10%) Trade Discount
granted to LICENSOR pursuant to Section 5.11)".
6. Section 7.2.4 of the Agreement is amended to add the following after
the word "Products" in the first line thereof:
"(excluding returns of unsold Products by LICENSOR pursuant to Section
5.11)".
7. Section 7.2.5 of the Agreement is amended in its entirety as
follows:
"7.2.5 Closeouts (which are defined as Products sold at a
reduction of ten percent (10%) or more from the list wholesale
selling price shown on the Licensed Product Approval Form)
shall not exceed three percent (3%) of total units shipped;
provided however, that sales of closeouts to LICENSOR's own
Guess stores, and sales of Products returned by LICENSOR to
LICENSEE as unsold pursuant to Section 5.11, shall both be
excluded from this limitation."
8. The Notice Addresses at Section 17.1 of the Agreement are replaced
in their entirety with the following:
"TO LICENSOR: GUESS ?, INC.
1444 South Alameda Street
Los Angeles, California 90021
Telephone: (213) 765-3100
Facsimile: (213) 765-3666
Attn: Licensing Department
with a copy to: GUESS ?, INC.
1444 South Alameda Street
Los Angeles, California 90021
Telephone: (213) 765-3100
Facsimile: (213) 744-7821
Attn: General Counsel/Licensing
TO LICENSEE: NANTUCKET INDUSTRIES, INC.
105 Madison Avenue
New York, New York 10016
Telephone: (212) 889-5656
Facsimile: (212) 532-3217
Attn: Mr. Steve Samberg,
Chairman"
9. The following new Section 17.11 is hereby added to the Agreement:
"17.11 The Exhibits attached hereto and as revised from time
to time are hereby incorporated by reference and form integral
parts hereof. The reporting, approval and other similar forms
of LICENSOR attached as Exhibits hereto may be revised by
LICENSOR at any time and from time to time."
10. Exhibit A of the Agreement shall be replaced in its entirety with
Exhibit A attached hereto.
11. Exhibit F of the Agreement shall be replaced in its entirety with
Exhibit F attached hereto.
12. Exhibit G of the Agreement shall be replaced in its entirety with
Exhibit G attached hereto.
13. Except as expressly modified by this Second Amendment, the
Agreement is confirmed and shall continue to be and remain in full force and
effect in accordance with its terms. Any existing or future reference to the
Agreement and any document or instrument delivered in connection with the
Agreement shall be deemed to be a reference to the Agreement as modified by this
Second Amendment. To the extent anything in this Second Amendment is
inconsistent with the Agreement, this Second Amendment shall control.
14. This Second Amendment may be executed in any number of
counterparts, each of which, when taken together, shall constitute but one and
the same instrument.
15. This Second Amendment shall be governed by and construed according
to the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused their
respective duly- authorized representatives to execute this Second Amendment as
of the date first-above written.
NANTUCKET INDUSTRIES, INC. GUESS ?, INC.
By: By:
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Name: Name:
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Title: Title:
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EXHIBIT A
PRODUCTS
Ladies' undergarments including only panties, matching soft bras, matching tank
tops and matching crop tops all to be sold in the underwear department of
department stores and retail stores which sell underwear.
EXHIBIT F
MINIMUM NET SALES
Initial Term Minimum Net Sales
- ------------ -----------------
First Contract Year
December 1, 1992 - May 31, 1994 $1,000,000
Second Contract Year
June 1, 1994 - May 31, 1995 $2,000,000
Third Contract Year
June 1, 1995 - May 31, 1996 $3,000,000
Renewal Term
Fourth Contract Year
June 1, 1996 - May 31, 1997 $8,000,000
Fifth Contract Year
June 1, 1997 - May 31, 1998 $10,000,000
Sixth Contract Year
June 1, 1998 - May 31, 1999 $12,000,000
EXHIBIT G
ROYALTY MINIMUMS
INITIAL TERM
II. For the first Contract Year of the Initial Term, LICENSEE shall pay the sum
of US$70,000 one half upon execution and the balance in three equal installments
of US$11,666.67 each, the first due on July 1, 1993, the second due on October
1, 1993 and the third due on January 1, 1994.
III. For the second Contract Year, LICENSEE shall pay the sum of US$105,000 in
four equal installments of US$26,250 each, the first due on April 1, 1994, the
second due on July 1, 1994, the third due on October 1, 1994 and the fourth due
on January 1, 1995.
IV. For the third Contract Year, LICENSEE shall pay the sum of US$140,000 in
four equal installments of US$35,000 each, the first due on April 1, 1995, the
second due on July 1, 1995, the third due on October 1, 1995 and the fourth due
on January 1, 1996.
RENEWAL TERM:
V. For the fourth Contract Year, LICENSEE shall pay the sum of US$560,000 as
follows: US$87,500 has been paid as of the date of signing this Second
Amendment; the remaining US$472,500 shall be paid in two equal installments of
US$236,250 each, the first due on October 1, 1996 and the second due on January
1, 1997.
VI. For the fifth Contract Year, LICENSEE shall pay the sum of US$700,000 in
four equal installments of US$175,000 each, the first due on April 1, 1997, the
second due on July 1, 1997, the third due on October 1, 1997 and the fourth due
on January 1, 1998.
VII. For the sixth Contract Year, LICENSEE shall pay the sum of US$840,000 in
four equal installments of US$210,000 each, the first due on April 1, 1998, the
second due on July 1, 1998, the third due on October 1, 1998 and the fourth due
on January 1, 1999.