RESTATED AND AMENDED
LICENSE RIGHTS AGREEMENT
This Agreement (the "License Agreement"), effective as of this 22nd day of
October, 1999 (the "Effective Date") restates, amends and renames the FOREIGN
MANUFACTURING RIGHTS AGREEMENT (the "FMRA") entered into as of the 5th day of
November, 1997 by and between Ambra Inc. a Delaware corporation ("Licensor") and
I. C. Isaacs & Company L.P. ("Licensee"), a Delaware limited partnership.
R E C I T A L S
A. Licensor, directly or through its related entity Hugo Boss AG ("Hugo
Boss"), is the owner of or has rights to license various trademarks including
the word "BOSS" throughout the world and in the United States (collectively,
"Hugo Boss Marks"). Licensor and/or its related companies have used for many
years the mark BOSS and Hugo Boss Marks and have developed certain intellectual
property rights in connection therewith.
B. Licensee, as the successor in interest of Brookhurst, Inc., was the
owner of certain United States trademark rights in and registrations of the word
BOSS. Licensee and its predecessors in interest used the mark BOSS on certain
products in the United States and developed certain intellectual property rights
in connection therewith. Licensee has, simultaneously with the execution of this
Agreement, sold and assigned those trademark and related proprietary rights in
the United States to Licensor without reservation of rights.
C. Licensee is a party to the FMRA pursuant to which Licensee has certain
rights to use certain Hugo Boss Marks for manufacturing and marking of apparel
outside the United States as set forth therein, and desires to obtain a license
to be able to continue to distribute, promote and sell products in the United
States under certain of the Hugo Boss Marks, and Licensor is willing to license
such trademarks to Licensee for such purpose in accordance with the terms
hereof.
D. In countries where necessary and appropriate, Licensor desires that
Licensee be recorded as a registered user of the Licensed Marks (as hereinafter
defined) in relation to the manufacture of the Licensed Products.
E. In connection with the transactions described above, the parties hereby
wish to restate and amend, and do restate and amend, the FMRA which, as of the
Effective Date of this Agreement, shall cease to be in effect.
NOW, THEREFORE, in consideration of the mutual agreements set forth in this
Agreement and other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings
set forth below:
a. "Licensed Mark" or "Licensed Marks" shall mean the trademarks BOSS in
the Microgramma Typestyle and the stylized B (as set forth on Exhibit A attached
hereto) whether used alone or in combination with other words or symbols, with
the appearance and/or style of the said trademark in compliance with the
provisions of Exhibit A.
b. "Property" shall mean the intellectual property rights which Licensor
deems, in its sole reasonable discretion, to be desirable or necessary for
Licensee to enjoy the fruits of the license granted herein and which are or
become primarily associated with the Licensed Marks. Such Property shall
include, but not be limited to, certain titles, trademarks and names, as well as
any of the following used in connection with or as identifiers of the Licensed
Marks: fabrics, styles, designs, and colors other than those which are standard
or traditional in the industry; logos, symbols, copyrights, art work, inventions
(patentable or unpatentable), confidential information, trade secrets, patents
and pending patent applications.
c. "Licensed Product" or "Licensed Products" shall mean solely the products
specified in Exhibit B attached hereto bearing Licensed Marks in compliance with
Exhibit A.
d. "Manufacturing Territory" shall mean any and all countries listed on
Exhibit C.
e. "Sales Territory" means the United States and certain military locations
as set forth in this Agreement.
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f. "United States" shall mean the United States of America, its
territories, possessions and commonwealths, except Saipan and American Samoa.
"United States" includes, without limitation, Puerto Rico.
g. "Total Net Sales" shall mean the amount invoiced to third parties by or
on behalf of Licensee with respect to all products bearing a BOSS mark minus
BONA FIDE trade, quantity and early payment discounts actually taken, actual
returns, shipping costs specifically itemized as such, uncollectible amounts
actually written off as bad debt by Licensee and sales or excise taxes (if any)
payable by Licensee in respect of and attributable directly and solely to sales
of Licensed Products, provided that each such item is indicated separately and
appears clearly separate from product price; provided further that for purposes
of Total Net Sales calculations uncollectible amounts shall not exceed one half
of one percent (0.5%) of Total Net Sales (including uncollectible amounts) of
all products bearing a BOSS mark. No costs incurred in the manufacture, sale,
distribution, advertisement or promotion of such products shall be deducted from
the gross sales amounts or from any royalty payable to Licensor by Licensee. Any
sales or transfers of such products made by Licensee to any person or entity
that does not deal at arm's length with Licensee shall be computed, for the
purpose of determining Total Net Sales, at an amount equal to the price at which
Licensee would have invoiced or charged purchasers which deal at arm's length
with Licensee, unless otherwise agreed to by Licensor in writing.
2. RIGHTS GRANTED
(I) LICENSE FOR THE SALES TERRITORY.
a. Licensor hereby grants to Licensee, and Licensee accepts, upon the terms
and conditions set forth herein, the right and license, under the Hugo Boss
Marks, to use the Licensed Marks in connection with, and for the purpose of, the
design, advertising, marketing, sale and other distribution of Licensed Products
in the Sales Territory. Subject to the restrictions and limitations, and
modifications thereto, contained in subsections 2(I)(d), 2(I)(e), 2(I)(f),
2(I)(g), 2(II)(f), 3(b), and 3(c) below, the license granted to Licensee is
non-exclusive. Unless otherwise agreed to by the parties in writing, Licensee
agrees to sell the Licensed Products solely in accordance with Exhibits A, A1
and B. Nothing in this paragraph is intended to prohibit Licensee from using
third party suppliers, service providers and agents in connection with the
designing, advertising, marketing, sale and other distribution of the Licensed
Products in compliance with the terms of this Agreement.
b. Unless otherwise agreed to by the parties in writing, Licensee agrees
that it shall not use the Licensed Marks in connection with the design,
advertisement, marketing,
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promotion, distribution or sale of any products other
than Licensed Products.
c. Unless otherwise agreed to by the parties in writing, Licensee agrees
that it will not distribute or sell any Licensed Products bearing the Licensed
Marks to athletic stores whose primary product line is composed of products
intended to be used in connection with golf, tennis, skiing, sailing,
windsurfing, motor sports or any combination thereof or at golf, tennis, skiing,
sailing, windsurfing, or motor sports athletic events, without the prior written
consent of Licensor. The foregoing shall not prevent Licensee from selling
Licensed Products to general sporting goods stores selling multiple lines of
products for a variety of sports (E.G., Modell's and Sports Authority).
d. On those products listed on Exhibit A1, Licensor, for itself and for its
affiliates (including Hugo Boss) agrees to use the word BOSS alone or the words
BOSS HUGO BOSS, whether used only as those words or in combination with any
symbols, on such products in the Sales Territory solely in accordance with the
price points contained in Exhibit A1; provided, however, that such Exhibit A1
shall not apply to such products used or distributed by Licensor, its affiliates
or their licensees for promotional purposes.
e. Licensor, for itself and for its affiliates (including Hugo Boss) agrees
that without Licensee's prior written consent, which consent may be withheld in
Licensee's sole discretion, Licensor and its affiliates shall not license any
nonaffiliated third party to use the word BOSS alone or the words BOSS HUGO
BOSS, whether used only as those words or in combination with any symbols, in
connection with the sale in the Sales Territory of the sportswear products
listed in Exhibit A1 at or below Licensee's maximum wholesale prices listed
therein.
f. Nothing herein is intended to or shall prevent or otherwise restrict
Licensor or its affiliates (including Hugo Boss) from designing, manufacturing,
advertising, promoting, distributing or selling or licensing others to design,
manufacture, distribute, advertise, promote or sell in the Sales Territory any
product, whether or not bearing a mark with the word BOSS alone or the words
BOSS HUGO BOSS, listed in and consistent with Exhibit A1, or any other product
not listed in Exhibit A1, provided that such products do not use the Microgramma
typestyle shown in Exhibit A.
g. Neither Licensor or its affiliates (including Hugo Boss) nor Licensee
shall use on or in connection with apparel bearing the word "BOSS" sold in the
Sales Territory, any apparel style, design, pattern, art work or color which are
or have been primarily associated with products distributed by the other (or any
licensee of the other) except those which are traditional or standard in the
industry.
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h. Notwithstanding any other provision of this Agreement, Licensee may,
during 1999 and 2000, use the Licensed Marks on a non-exclusive basis on the
following goods so long as such goods are not intended to be sold to the public
and are intended to be used solely in connection with and for the promotion of
Licensed Products in the Sales Territory: compact discs, videos, stickers,
stick-on-tattoos, photographs and posters, whistles, notebooks, lanyards,
non-leather I.D. tags, basketballs, cassette tapes, sweatbands and visors,
banners and key chains; provided further that Licensee shall not contest, and
agrees that such non-exclusive right to use shall not restrict or limit, in any
way the manufacturing, distributing or selling by Licensor or its affiliates, or
any of their licensees, of any of the above items with the Hugo Boss Marks. For
each year of this Agreement after 2000, Licensee shall submit for approval a
list of goods it intends to use (subject to the terms and conditions of this
Section 2(I)(h), for promotional purposes. Licensor shall consider the request
in good faith and advise Licensee within ten (10) business days of receipt of
such list which of the goods Licensor, in the exercise of its sole discretion,
approves; provided however, that notwithstanding the provision of Section 26(c),
Licensee may seek arbitration solely as to whether Licensor has acted in good
faith in considering Licensee's request. Absent such approval, Licensee shall
not use Licensed Marks on such goods.
i. Licensee acknowledges the legal and beneficial ownership interests of
Licensor and its affiliates in and to the Licensed Marks and the Hugo Boss Marks
and undertakes that it will not take any action which may in any way impair
their rights in the marks, including, without limitation, by challenging or
opposing, or raising or allowing to be raised, on any grounds whatsoever, any
questions concerning or obligations to the validity of the Licensed Marks or the
Hugo Boss Marks. Licensee further acknowledges that Licensor and its affiliates
own extensive trademark rights relating to the word BOSS both within and outside
of the United States. Licensee does not and shall not own, or purport to own,
any trademark rights relating to the word BOSS within or outside of the United
States.
j. Licensee agrees that it will not sell or offer for sale or resale
Licensed Products anywhere in the world other than in the United States.
Licensee shall not sell or cause to be sold, directly or indirectly, any
Licensed Products to any party which Licensee knows, or has reason to know, has
resold or distributed, is reselling or distributing, or is likely to resell or
distribute such Licensed Products (i) outside of the United States; or (ii) as
duty free merchandise. After the execution of this Agreement as is reasonable,
Licensee shall advise each of its customers (other than consumers or other end
users) in writing of the restrictions on such sales.
k. The parties agree that Licensee may sell Licensed Products to the United
States military solely for resale on United States military installations in the
United States. In making such sales, Licensee shall seek to obtain agreement
from its United States military customers
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that Licensed Products will not be sold in United States military installations
outside the United States ("Military Agreement").
(i) If Licensee is unable to obtain a Military Agreement with any
military customer, or if the obtaining of any such Military Agreement
substantially adversely affects Licensee's ability to make military sales
in the United States, then Licensee shall promptly notify Licensor. Any
such notice by Licensee shall include a written explanation and
documentation of all efforts by Licensee to obtain such agreement and shall
include (1) data disclosing Licensee's sales of Licensed Products to the
military customer(s) at issue during the immediate prior 12-month period,
(2) projected sales of Licensed Products over the next 12-month period, (3)
the basis for Licensee's belief that obtaining such an agreement will
substantially adversely affect Licensee's military sales, and (4) all
information known or reasonably available to Licensee about sales of
Licensed Products by the military customer(s) at U.S. military
installations outside the United States.
(ii) Upon receipt of such notice and at Licensor's request, the
parties shall meet and confer within five (5) business days, to agree upon
any further steps to be taken by Licensee to obtain the Military Agreement.
Thereafter, absent an agreement between the parties on this issue, or in
the event such steps as may be agreed upon do not result in a Military
Agreement and Licensee does not agree to discontinue sales of Licensed
Products to any such military customer, Licensor may initiate arbitration
under the principles set forth in Exhibit H. In any such proceeding, the
arbiter shall decide whether Licensee shall be permitted to continue
selling Licensed Products to the military customer(s), absent a Military
Agreement, and if so under what circumstances, conditions or limitations,
if any. In considering these issues, the arbiter shall consider, INTER
ALIA, the extent of Licensee's efforts to obtain a Military Agreement, the
extent to which Licensee's military sales are affected), the extent to
which the absence of a Military Agreement has, is or will contribute to the
sale of Licensed Products outside the United States, and the actual or
threatened harm to Licensor from such sales. Pending the resolution of such
arbitration, Licensee may continue to make sales of Licensed Products to
any such military customer(s) absent a Military Agreement; provided,
however, that the continuation of such sales does not constitute (1) a
waiver by Licensor of any rights it may have under this Agreement, or (2)
Licensor's consent to such sales.
Notwithstanding the foregoing or the decision of any arbitration, nothing
in this agreement shall prevent Licensor from fully enforcing all of its
rights to prevent the
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unauthorized sale of products bearing Hugo Boss Marks at any U.S. military
installation outside the United States or elsewhere outside the United
States.
(II) LICENSE FOR THE MANUFACTURING TERRITORY.
a. In addition to the rights granted to Licensee above, Licensor hereby
grants to Licensee, and Licensee accepts, upon the terms and conditions set
forth herein, a limited, nonexclusive right and license to itself use, and to
cause and permit third-party foreign manufacturers ("Foreign Manufacturers") and
third-party manufacturers in the United States ("US Manufacturers")
(collectively, "Designated Manufacturer(s)") to use, the Licensed Marks solely
in connection with the manufacture of Licensed Products, labels, displays,
promotional items permitted by this Agreement and other materials used in
connection with the Licensed Products within the Manufacturing Territory for
sale or distribution solely to Licensee.
b. Licensee shall require that the Designated Manufacturer(s) perform all
obligations ascribed to such Designated Manufacturer(s) under this Agreement,
including but not limited to those obligations listed in Section
2(II)(b)(i-xxii), and shall, within sixty (60) days of the effective date of
this Agreement and if not already in place, require each Designated
Manufacturer(s) to enter into a binding written agreement (whether by purchase
order or otherwise) with Licensee, under which each such Designated
Manufacturer(s) agrees to undertake the following obligations provided, however,
that, notwithstanding any other provision of this Agreement, with respect to the
US Manufacturers Licensee, in its sole discretion, may determine the means by
which any of its US Manufacturers is advised of the following obligations
(including without limitation by way of letter or terms and conditions included
in any invoice or purchase order):
(i) The Designated Manufacturer(s) shall manufacture Licensed Products
only for and sell Licensed Products only to Licensee.
(ii) The Designated Manufacturer(s) shall not manufacture any product
bearing the Licensed Marks or any trademarks confusingly similar to the
Licensed Marks, other than Licensed Products.
(iii) The Designated Manufacturer(s) shall not use the name BOSS on
any corporate, partnership or other trade name or as a form of entity
identification.
(iv) The Designated Manufacturer(s) shall modify or terminate use of
the Licensed Marks if requested to do so by Licensee pursuant to Section
2(II)(f) herein.
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(v) The Designated Manufacturer(s) shall not use the Licensed Marks in
the Manufacturing Territory in any manner other than as expressly set forth
in this Agreement.
(vi) The Designated Manufacturer(s) shall, following termination of
its agreement with Licensee, terminate any and all uses of the Licensed
Marks in the Manufacturing Territory.
(vii) The Designated Manufacturer(s) shall (A) provide Licensee with a
list of all locations in which the Designated Manufacturer manufactures,
processes or stores Licensed Products, which list from time to time shall
be updated promptly with additional such locations as they are utilized,
and (B) provide reasonable access at each and every such location to
Licensee and Licensor; provided, however, that this provision does not
apply to the initial order placed with any Designated Manufacturer where
the order does not exceed 24,000 units. Licensor shall provide Licensee
with notice and opportunity to participate in any inspection under this
provision provided Licensor decides, in its sole discretion, that to do so
would not impair or hinder the purpose or effectiveness of any such
inspection. With respect to US Manufacturers, Licensee shall always have
the right to participate in any inspection by Licensor and Licensor agrees
to coordinate the inspection through Licensee.
(viii) The Designated Manufacturer(s) shall comply with all applicable
labeling and other laws to the extent affecting the manufacture, storage,
shipment, labeling and sale of Licensed Products pursuant to the terms of
this Agreement, and at all times otherwise conduct its activities under its
agreement with Licensee in a lawful manner.
(ix) The Designated Manufacturer(s) shall permit Licensor, Licensee
and their respective agents and representatives to conduct audits with
respect to the books, records and all other documents and materials in the
possession or under the control of the Designated Manufacturer(s) relating
to the Licensed Products and any agreement in place with Licensee with
respect thereto. With respect to US Manufacturers, Licensee shall always
have the right to participate in any audit by Licensor and Licensor agrees
to coordinate the audit through Licensee.
(x) The Designated Manufacturer(s) shall use the trademark and
copyright notices required by Licensee in connection with the Licensed
Marks.
(xi) The Designated Manufacturer(s) shall acknowledge (or in the case
of US Manufacturers, be advised) that the Licensed Marks are owned solely
and exclusively by Licensor and Hugo Boss and will not at any time
represent that it has any title or right of ownership in the Licensed
Marks.
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(xii) The Designated Manufacturer(s) shall acknowledge (or in the case
of US Manufacturers, be advised) that materials related to its agreement
with Licensee and uniquely and specifically associated with the Licensed
Marks and/or the Licensed Products (collectively "Works"), whether
developed solely by such Designated Manufacturer(s) or jointly with others,
may qualify for copyright protection under applicable local laws. The
Designated Manufacturer(s) shall agree (or in the case of US Manufacturers,
be advised) that such Works are to be deemed works "made for hire" for the
benefit of Licensor and that if such Works, by operation of law or
otherwise, are not works "made for hire", such Designated Manufacturer(s)
shall agree (A) to assign to Licensor any or all of such Designated
Manufacturer(s)' right, title and interest in the copyright in such Works
throughout the world, and (B) not to seek or obtain registration of such
copyright in its own name.
(xiii) The Designated Manufacturer(s) shall not seek or obtain any
registration of the Licensed Marks or any trademark confusingly similar
thereto in any name or participate directly or indirectly in such
registration without prior written permission of Licensor and Licensee.
(xiv) In the event the Designated Manufacturer(s) has obtained or
obtains in the future in the Manufacturing Territory, any right, title or
interest in the Licensed Marks, or in any other trademark or service mark
owned by Licensor, the Designated Manufacturer(s) shall execute any and all
instruments deemed by Licensor and/or its attorneys or representatives to
be necessary to transfer such right, title or interest to Licensor.
(xv) The Designated Manufacturer(s) shall not take any action which
may in any way impair the rights of Licensor in the Licensed Marks,
including, without limitation, challenging or opposing, or raising or
allowing to be raised, either during the term of its agreement with
Licensee or after its termination, on any grounds whatsoever, any questions
concerning, or objections to, the validity of the Licensed Marks or
Licensor's rights therein, or any other trademarks or service marks owned
by Licensor containing the word BOSS in any manner.
(xvi) The Designated Manufacturer(s) shall reasonably assist Licensor
in obtaining and/or maintaining registration for the Licensed Marks
including, without limitation, by providing information regarding the
Licensed Marks and samples of the Licensed Products.
(xvii) The Foreign Manufacturer(s) shall appoint Licensor as its
respective attorney-in-fact for the limited purpose of executing any and
all documents and performing any and all other acts necessary to give
effect and legality to the provisions of this Section 2 of this
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Agreement.
(xviii) The Designated Manufacturer(s) shall not grant, assign,
sublicense or otherwise convey or transfer any rights inuring to such
Designated Manufacturer or any obligations or duties owed by such party to
Licensee or Licensor under this Agreement without the prior written consent
of Licensee, and any attempted transfer or assignment shall be null and
void.
(xix) The Designated Manufacturer(s) shall cooperate with and assist
Licensor in protecting and defending the Licensed Marks, and shall promptly
notify Licensee in writing of any infringements, claims or actions by
others in derogation of the Licensed Marks in the applicable country within
the Manufacturing Territory of which it becomes aware; provided, however,
that Licensor shall have the sole right to determine whether any action
shall be taken on account of such infringements, claims or actions. The
Designated Manufacturer(s) shall not take any action on account of any such
infringement, claim or action without the prior written consent of
Licensor.
(xx) In the event Licensor initiates or defends any legal proceedings
on account of any infringements, claims or actions by others in derogation
of the Licensed Marks, the Designated Manufacturer(s) shall cooperate with
and assist Licensor to the extent reasonably necessary to protect the
Licensed Marks including, but not limited to, being joined as a necessary
party to such proceedings. Any such legal proceedings which do not result
from Licensee's breach of this Agreement or the Designated Manufacturer's
breach of its agreement with Licensee shall be initiated or defended by
Licensor; provided, however, that under no circumstances shall Licensor be
responsible for the costs or expenses incurred by the Designated
Manufacturer(s) in any such legal proceeding in which it elects to be
represented by its own counsel.
(xxi) The Designated Manufacturer(s) shall obtain all government
approvals and registrations which are required under the laws of the
applicable country in the Manufacturing Territory as a result of the
Designated Manufacturer(s) activities in connection with the Licensed
Products and to pay any taxes or fees required by any such foreign
government as a result of its activities under its contract with Licensee.
(xxii) In the manufacture of Licensed Products, the Designated
Manufacturer(s) shall not employ children under fourteen (14) years of age.
c. Licensee shall not authorize any third party to manufacture Licensed
Products in the Manufacturing Territory outside the United States unless and
until such third party executes a binding written agreement (by purchase order
or otherwise) with Licensee containing all of the
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obligations listed above in Section 2(II)(b)(i-xxii). Licensee shall take
reasonable steps to monitor
11
each Designated Manufacturer's compliance with its obligations under its
agreement with Licensee or otherwise. If any such Designated Manufacturer(s)
fails to comply with any of the foregoing obligations listed above in Section
2(II)(b)(i-xxii), Licensee, upon having acquired knowledge thereof, shall
immediately notify Licensor thereof and of the steps being taken to obtain
compliance by such Designated Manufacturer(s) with such obligations. If any such
failure to comply constitutes a material breach of the Designated Manufacturer's
obligations to Licensee as listed above in Section 2(II)(b)(i-xxii), Licensee
shall, at the request of Licensor, also terminate its business dealings with
such Designated Manufacturer as soon as commercially feasible; provided,
however, that as of the date Licensee acquires knowledge of any such breach,
Licensee shall not enter into any new manufacturing agreements or place any
additional orders with such noncomplying Designated Manufacturer without the
written consent of Licensor; provided further that such termination shall not
relieve Licensee of its obligations to continue to enforce its rights against
such Designated Manufacturer for breach of its obligations or Licensee's
indemnity obligations to Licensor under this Agreement.
d. Licensee shall bear all costs and expenses associated with or incurred
by it in carrying out its obligations under Sections 2(II)(b) and 2(II)(c)
above.
e. Notwithstanding Section 2(II)(a) above, Licensee may manufacture or
cause others to manufacture the Licensed Products within the Manufacturing
Territory subject to the terms and restrictions contained in this Section. The
parties agree that they will amend Exhibit C to include countries listed in
Exhibit C1 upon (or as soon thereafter as is practicable) the issuance to Hugo
Boss, or its designee, in each such country, of trademark registration(s) for
the word BOSS for use on products listed in Exhibit B, Section I, as modified by
Section II; provided, however, that any such amendment shall conform to and be
limited by the scope of any such trademark registration obtained. In those
countries listed in Exhibit C1 where Hugo Boss presently has no trademark
application(s) pending, Licensor agrees, upon the written request of Licensee,
to cause Hugo Boss to make such application, and to take appropriate steps to
prosecute such application and Licensee agrees to reimburse Hugo Boss for fifty
percent (50%) of the costs, including attorney's fees and filing fees, of
obtaining such registration. The parties agree that they will amend Exhibit C to
include each country listed on Exhibit C2 when the later of the following two
events occurs (or as soon thereafter as is practicable): (1) the issuance to
Hugo Boss or its designee, of trademark registrations for the word BOSS for use
on products listed in Exhibit B, Section I, as modified by Section II, or (2)
the resolution to the satisfaction of Hugo Boss of pending disputes among third
parties. At any time after the execution of this Agreement, Licensee may notify
Licensor of countries other than those referenced in Exhibits C, C1 and C2 in
which Licensee desires to manufacture Licensed Products. Licensor shall consider
such a request in good faith, and consistent with the principles incorporated
above relating to the
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countries listed in Exhibit C. If Licensor agrees to any such request, Licensor
and Licensee will amend this Agreement. The parties agree to execute individual
agreements with respect to manufacturing rights for any country on Exhibit C
outside the United States, if required by the laws or regulations of that
country or to protect the Licensed Marks. Licensee shall only manufacture or
cause others to manufacture Licensed Products in those countries identified in
Exhibit C or any other country as may be later agreed upon pursuant to this
section.
f. Notwithstanding Section 2(II)(a) hereof, neither Licensee nor the
Designated Manufacturer(s) shall have the right to use the Licensed Marks in the
Manufacturing Territory in any manner that conflicts with the rights of any
third party. For purposes of this Section 2(II)(f), the term "third party" shall
not include any natural person under control of Licensor, any entity owned by,
controlled by, or affiliated with Licensor, any natural person or entity that
owns or controls Licensor, or any entity with whom Licensor enters into an
agreement relating to, or creating, the rights that conflict with Licensee's
rights hereunder. If the use of the Licensed Marks on any or all of the Licensed
Products conflicts with the rights of any third party, or if a third party makes
a BONA FIDE claim alleging such a conflict, Licensee agrees to immediately
terminate or modify such use in accordance with Licensor's reasonable
instructions, and Licensee shall have no right of damage or offset in connection
with this Agreement. In the event Licensee fails to terminate or modify such
use, as reasonably directed by Licensor, Licensor may terminate this Agreement
under the provisions of Section 15 below as to such country in which the rights
of the third party exists or with respect to which a BONA FIDE claim has been
made without limiting Licensor's other rights and remedies hereunder or at law
or in equity. Licensee shall indemnify and hold harmless Licensor for all
damages, including attorney's fees and costs incurred in any action or claim
brought against Licensor by such third party arising out of Licensee's actions
under this Agreement. Licensor agrees that neither it nor Hugo Boss shall grant
to any third party an exclusive license for the manufacture of products listed
on Exhibit B, Section I, as modified by Section II, bearing the Licensed Marks.
g. Whenever Licensee itself manufactures Licensed Products anywhere in the
Manufacturing Territory, Licensee agrees to and undertakes the same obligations
set forth in Section 2(II)(b)(i-xxii) for the Designated Manufacturers including
without limitation the following.
(i) To manufacture Licensed Products only for Licensee;
(ii) Not to manufacture any product bearing the Licensed Marks or any
trademarks confusingly similar to the Licensed Marks, other that Licensed
Products and promotional items permitted by this Agreement;
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(iii) Not to use the name BOSS on any corporate, partnership or other
trade name or as a form of entity identification;
(iv) Not to seek or obtain any registration of the Licensed Marks or
any trademark confusingly similar thereto in any name or participate
directly or indirectly in such registration without prior written
permission of Licensor; and
(v) Not to employ children under fourteen (14) years of age.
(III) OTHER PROVISIONS REGARDING THE LICENSE FOR THE SALES AND
MANUFACTURING TERRITORY.
a. Licensee acknowledges that Licensor owns, pursuant to that certain
Foreign Boss Rights Acquisition Agreement between Licensor and Licensee dated
September 30, 1997 and that certain Agreement between Licensor, Hugo Boss AG,
I.C. Isaacs & Company, Inc. and I.C. Isaacs & Company L.P. dated October __,
1999 (the "Agreement"), any and all trademark rights relating to the word BOSS
within the Sales and Manufacturing Territories that Brookhurst transferred to
Licensee pursuant to that certain Worldwide Rights Acquisition Agreement between
Licensee, Brookhurst and William Ott dated September 30, 1997. Licensee
acknowledges that it does not own, or purport to own, any trademark rights
relating to the word BOSS in the Sales Territory or the Manufacturing Territory.
b. Licensee acknowledges that it is often difficult to obtain clear,
registered title to trademarks and other intellectual property rights.
Accordingly, Licensor makes no representation whatsoever concerning any rights,
interest, information, agreements, restrictions or other matters relating to the
BOSS marks acquired by Licensor from Licensee under the Foreign Rights Agreement
or the Agreement, and Licensee agrees that the rights granted herein exist only
to the extent that Licensor owns such rights and no warranty, express or
implied, is made with respect thereto or with respect to the rights of any third
parties that may conflict with the rights granted herein. Licensor warrants that
the agreements listed on Exhibit D hereto are the only agreements known to
Licensor or Hugo Boss which impose or may impose restrictions on Licensee's
ability to manufacture Licensed Products in the Manufacturing Territory.
c. Licensor shall obtain from Hugo Boss throughout the term of this
Agreement a license of such of its rights (if any) relating to the exercise by
Licensee of its rights under this Agreement such that Licensor may sublicense
said rights to Licensee to the extent described in the grant of rights set forth
in Sections 2(I) and 2(II), as modified by Section 2(III) hereof, and Licensor
hereby acknowledges that it is sublicensing said rights to Licensee under said
Sections 2(I) and 2(II), as modified by Section 2(III).
14
d. Licensee makes no representations and warranties to Licensor hereunder
with respect to the Licensed Marks, including, without limitation, any matter
relating to the existence, validity or enforceability of the marks acquired by
Licensee from Brookhurst Inc.
e. Except as expressly stated in this Agreement, Licensor makes no
representations and warranties to Licensee hereunder with respect to the
Licensed Marks, whether such marks were derived from the purchase by Licensor
from Licensee (and ultimately from Brookhurst) or derived by license from Hugo
Boss.
3. ADVERTISING AND PROMOTION; TRANSFER AND OWNERSHIP OF PROPERTY
a. Licensee agrees that any and all of its advertising and sales promotion
activities regarding Licensed Products (including cooperative advertising) shall
be subject to the provisions established by Exhibit A2. Licensee shall not
create, or cause to be created, any advertising or promotional materials that do
not comply with Exhibit A2 and shall use reasonable efforts, including
termination of relationships, to cause third parties who advertise or otherwise
promote Licensed Products to comply with the standards of Exhibit A2. Licensee
shall use reasonable efforts to cause its retail customers to use signage
materials conforming to the requirements of this Section 3(a), but Licensee
shall not be required to terminate its relationship with any retailer solely on
the basis that the retailer continues to use existing non-conforming signage
which has been in use since 1998 or before.
b. Licensor, for itself and its affiliated entities (including Hugo Boss)
agrees that any and all of their advertising activities (including cooperative
advertising) for products listed in Exhibit B, Section I, as modified by Section
II, shall be subject to the provisions established in Exhibit A3.
c. Licensee shall have exclusive rights as between the parties to use the
Licensed Marks with respect to boxing sports sponsorship in the United States,
except Licensor retains the right to use the Hugo Boss Marks in connection with
the sponsoring of boxers in the United States who are neither U.S. citizens, nor
residents of the United States. Unless otherwise agreed to in writing by the
parties, Licensor shall have exclusive rights as between the parties to use BOSS
with respect to golf, tennis, motor sports, skiing, sailing, and windsurfing
sports sponsorship in the United States. With regard to all other sports,
Licensor and Licensee agree to cooperate with each other to avoid interference
with the other party's sports sponsorships in the United States. If either
Licensor or Licensee notifies the other party of the existence of sports
sponsorship relationships in other sports, the party receiving such notice will
then avoid
15
interfering with the sponsorship relationship established by the other party.
For example, the party receiving such notice will not establish, or attempt to
establish, any sponsorship relationship with the same athlete or the same team
while the sponsorship relationship of the other party to this Agreement remains
in effect, although the party receiving the notice would not be prevented from
establishing other sponsorship relationships in the same sports. After
notification, and upon request by the notified party, the notifying party shall
provide evidence of any such sponsorships to the notified party. The parties
agree that Licensee may use the Licensed Marks in the United States in
connection with the sponsorship of United States Olympic Athletes and United
States Olympic Teams; provided, however, that the Licensed Marks are not used in
advertisements intended to be seen in countries outside the United States and
provided, further, that such Olympic athletes and teams agree not to display the
Licensed Marks outside the United States. Nothing in this Agreement entitles
either Licensor or Licensee to exclusive rights as between the parties with
regard to any Olympic events occurring within the United States, except with
regard to the sports expressly identified above.
d. Licensee may submit to Licensor for prior approval samples of tags,
labels, packaging (including cartons, containers and wrapping or packing
materials) stationery, sales documents, advertising, promotional and display
materials, and other items bearing or using the Licensed Marks, so that Licensor
can ensure that such items comply with the terms of this Agreement. If Licensee
does not submit such items to Licensor for approval, and items are determined to
materially breach the terms of this Agreement on two occasions within a twelve
(12) month period, Licensee must thereafter submit all such items for approval
by Licensor. Under these circumstances, Licensee shall not use any item in that
category until corresponding samples have been approved by Licensor in writing,
and Licensee shall not depart therefrom in any respect without again obtaining
Licensor's prior written approval. If there have been no further material
violations for a twelve (12) month period, approval for such category shall
return to permissive instead of mandatory. When its samples are submitted for
approval (whether mandatory or permissive), Licensor shall either approve or set
forth in writing its reasons for withholding approval within twenty (20) days of
receipt of such samples. Failure by Licensor to so respond within twenty (20)
days shall be deemed as approval.
e. Licensee agrees that all goodwill derived by it or its licensees from
the use of the Licensed Marks after the Effective Date shall inure to the
benefit of Licensor.
f. The parties agree that nothing in this Agreement shall require either
party to do business with any third party wholesaler or retailer. The parties
further agree that each party shall have the right at its sole discretion to
take all steps necessary to prevent its products from being offered for sale to
the public in proximity to the products of the other party or one of its
licensees.
16
g. Except as otherwise provided herein, the parties agree that each shall
have no right to require the other to make any change in the rights or
obligations set forth in this Agreement. The parties further agree that they
will institute no legal action against each other based solely upon conduct
which is expressly permitted by and in accordance with this Agreement.
h. Licensee agrees that, during the term of this Agreement, it shall not
use the Licensed Marks in any manner other than as expressly set forth in this
Agreement.
i. Licensee agrees that Licensor is and shall be the sole owner of all
items of Property. Subject to the express requirements of Exhibit A, Exhibit A1,
and Exhibit B of this Agreement, the parties agree that Licensor shall have no
right to prevent Licensee from using, during or after the term of this
Agreement, any fabrics, styles, designs and colors that are standard or
traditional in the industry or not primarily associated with the rights licensed
to Licensee hereunder and previously under the FRMA.
j. Following termination of this Agreement, Licensee agrees that it will
terminate any and all use of the Licensed Marks in the Manufacturing Territory
and in the United States, except as otherwise expressly provided in this
Agreement.
4. QUALITY STANDARDS AND INSPECTION
a. The parties acknowledge and agree that great value is placed on the
Licensed Marks and the goodwill associated therewith, that the consuming public
and the industry now associate the Licensed Marks with products of consistently
high quality, and that the terms and conditions of this Agreement are necessary
and reasonable to assure the consuming public and the industry that all Licensed
Products sold hereunder are of the same consistently high quality as Licensed
Products previously sold by Licensee. Accordingly, Licensee agrees that all
Licensed Products shall be substantially equivalent, in terms of quality, to the
products manufactured by Licensee for sale during the Spring and Fall 1996
seasons. Licensor acknowledges that the products bearing the word BOSS
manufactured by Licensee for sale during the 1996 Spring and Fall seasons were
of sufficiently high quality standards as required by this paragraph. If any
Licensed Products fail to conform to the aforementioned quality standards, upon
notification from Licensor, Licensee shall discontinue any and all manufacture,
shipments and distribution of such non-conforming Licensed Products. For
purposes of this Agreement, the parties acknowledge that the quality standards
apply only to the sewing, construction and fabric of the Licensed Products.
17
b. Licensee agrees to use, in connection with the Licensed Products only,
labels, tags, signs, banners, stationery, order forms, business cards and other
forms of identification for such products which are consistent with the terms of
Exhibit A and Exhibit A2. Licensee agrees that it shall not use the name BOSS in
any corporate, partnership or other trade name or as a form of entity
identification. Licensee shall not use the word BOSS or authorize any third
party to use the word BOSS in connection with the name of any store or retail
establishment; provided that nothing in this Section shall be construed as
prohibiting use of the Licensed Marks in shop-within-a-shop situations. Licensee
may continue its factory outlet operations in proximity to its distribution
facilities which are currently located in Milford, Delaware; provided, however,
that the word BOSS shall not be used in or as part of the name of the store.
Licensee agrees to provide Licensor with written notice of any change in the
location of such factory outlet. To the extent Licensee uses and/or provides
design layouts and/or fixtures for use in stores or retail establishments, it
shall not use design layouts and/or fixtures which are or have been primarily
associated with products distributed by Hugo Boss or its other licensees, except
those which are traditional or standard in the industry.
c. For each Designated Manufacturer not previously disclosed to Licensor
under the FMRA, Licensee shall notify Licensor, in writing, of the identities of
each Designated Manufacturer(s) (including full business name and address), and
the locations of all manufacturing, processing and storage facilities in the
Manufacturing Territory in which the Licensee or the Designated Manufacturer(s)
is manufacturing, processing or storing or intends to manufacture, process or
store Licensed Products which is currently manufacturing Licensed Products for
Licensee in the Manufacturing Territory. Within thirty (30) days of placing any
order for the manufacture of any Licensed Products with a Designated
Manufacturer not previously identified to Licensor, Licensee shall notify
Licensor, in writing, of the identity of such new Designated Manufacturer,
(including full business name and address) and within thirty (30) days after
placing any order (other than an initial order for 24,000 units or less) with
any such Designated Manufacturer, the locations of all manufacturing, processing
and storage facilities in the Manufacturing Territory in which the Licensee or
the Designated Manufacturer is manufacturing, processing or storing or intends
to manufacture, process or store Licensed Products. Licensee shall, from time to
time, provide Licensor promptly with additional such locations as they are
utilized. Licensor and its representatives may from time to time, during all
reasonable business hours and with prior reasonable notice to Licensee, inspect
the operations and facilities of Licensee, the Designated Manufacturer(s) and
their agents with respect to performance under this Agreement.
d. Licensee agrees that it shall comply with all applicable labeling and
other laws affecting the manufacture, storage, shipment, labeling and sale of
the Licensed Products pursuant to the terms of this Agreement, and at all times
otherwise conduct its activities under this Agreement in a lawful manner.
18
e. The parties agree that they will not, without the written consent of the
other, knowingly seek to obtain products from each other's manufacturers in the
Manufacturing Territory or otherwise interfere in each other's lawful
relationships with any manufacturers in the Manufacturing Territory.
f. In order to ensure that Licensor is fully aware of all products Licensee
may manufacture in the Manufacturing Territory, Licensee shall not sell or
distribute any Licensed Product manufactured, sold or distributed anywhere in
the world, unless and until a prototype or a Computer Assisted Design ("CAD")
which displays clearly and fully each and every use of the Licensed Marks on
such product has been offered to Licensor for inspection. Licensee shall notify
Licensor when such prototypes or CADs are available for inspection at Licensee's
offices in New York ("Notification of Prototype Availability") and Licensor
shall, within ten (10) business days complete its inspection. At the inspection,
or at an inspection to be held within fifteen (15) business days after receipt
by Licensor of CADs as provided for below, Licensee shall make available
representative samples of tags, labels, packaging (including cartons,
containers, and wrapping or packing material) and other advertising, promotional
or display materials or stationery, sale, documents and other items bearing or
using the Mark. Licensor shall, within five (5) business days of implementing
its inspection, notify Licensee in writing of any product that Licensor believes
fails to meet the terms and conditions of this Agreement including the standards
set forth in Exhibit A ("Disputed Garments"). To the extent Licensee intends to
rely upon CADs, Licensee may, at its option, ship such CADs to Licensor for its
review. Under these circumstances, Licensor shall, within ten (10) business days
of receipt of such materials, notify Licensee in writing of any Disputed
Garments. In the event there are Disputed Garments, Licensor and Licensee shall
then meet to resolve any differences concerning such Disputed Garment and if,
after five (5) business days, no resolution has been reached, the matter may be
submitted to arbitration according to the procedures set forth in Exhibit H1.
Pending resolution of any such arbitration, Licensee shall not manufacture,
distribute or sell any such Disputed Garments. Licensor's failure to approve or
disapprove any such prototype or CAD, within thirteen (13) business days of
notification shall be deemed approval of such prototype or CAD. Licensee shall
provide Licensor with a set of prototype garments, CADs or salesperson's samples
of each such garment, each in typical or representative color, and each
accompanied by a list of colors (by references to Pantone or other technical
specification) expected to be used in production, within ten (10) business days
of Notification of Prototype Availability. Subject to the express requirements
of Exhibit A and Exhibit B, nothing in this Agreement is intended to give
Licensor any rights to approve or specify the apparel styling, design, patterns,
art work or colors of Licensed Products.
19
g. Licensee shall adhere to all prototypes, or CADs reviewed by Licensor.
Any minor departure or variance from such prototypes or CADs as to any of the
requirements or limitations in Exhibit A and Exhibit B, including but not
limited to any change of logo design, must receive the prior written approval of
Licensor, which shall not be unreasonably withheld. Prior to receipt of
Licensor's approval, Licensee may, solely at its own risk and without prejudice
to Licensor, take orders for and/or manufacture such Licensed Products. Should a
dispute arise between the parties over such products requiring arbitration, the
parties agree that the arbitrator shall not be advised that such garments have
been manufactured or that orders have been placed or taken therefor.
h. Licensee shall notify Licensor in writing regarding any change to
Licensee's business that would materially affect the rights, obligations and
benefits of Licensor under this Agreement. Licensor shall notify Licensee in
writing regarding any change to Licensor's or Hugo Boss' business that would
materially affect the rights, obligations and/or benefits of Licensee under this
Agreement. The parties acknowledge and agree that any and all information made
available in any form to the other party under this Section 4(h) shall be
subject in all respects to Section 24(a) hereof concerning confidentiality and
that neither party will trade in violation of applicable U.S. securities laws on
any such information which has not been publicly disclosed.
i. Licensee agrees not to manufacture, export, import, ship or distribute
from or to any country in the Manufacturing Territory, nor give its permission
to any third party to manufacture, export, import, ship or distribute from or to
any country in the Manufacturing Territory, Substandard Licensed Products
without the prior written approval of Licensor. Substandard Licensed Products
shall be defined as damaged or defective merchandise, irregulars, raw material
seconds, made-up merchandise, and any products not meeting the quality standards
set forth in Section 4(a) above or the logo standards set forth in Exhibit A.
Nothing in this Agreement is intended to prevent Licensee from manufacturing or
selling seconds and irregulars in the normal and ordinary course of business,
consistent with the past practices of Licensee in this regard.
j. Upon Licensor's written request, Licensee shall furnish without cost to
Licensor a reasonable number of random production samples per year of each
Licensed Product being manufactured by or on behalf of Licensee hereunder,
together with samples of each tag, label, carton, container and packing or
wrapping material used in connection therewith.
k. Licensee shall submit to Licensor any trademark, service mark, logo or
name which is to be used in connection with the Licensed Products other than
those referenced in Exhibit A. Licensor shall have the right, in its sole
reasonable discretion, to refuse to permit the use of any such trademarks,
service marks, logos or names.
20
l. Licensee shall not use the stitching designs for clothing pockets as
depicted in Exhibit E on jeans, trousers, shirts, skirts, dresses, shorts,
overalls, jackets, hats or vests or manufacture or distribute any Licensed
Products using any pocket stitching design which infringes the designs set forth
in Exhibit E. Prior to use, Licensee may submit to Licensor for approval other
stitching designs for use on clothing pockets on such garments. In the event
Licensee elects not to submit stitching to Licensor for approval Licensee shall
indemnify, defend and hold harmless Licensor from and against any and all
claims, liabilities and expenses, including reasonable attorney's fees,
disbursements and other charges relating to Licensee's use of such unapproved
stitching designs.
m. Licensor and its representatives may, from time to time during all
reasonable business hours and with prior reasonable notice to Licensee, inspect
the operations and facilities of Licensee with respect to this Agreement.
5. TERM
a. This Agreement shall continue in full force and effect until December
31, 2003, when it shall terminate, unless renewed in accordance with the terms
below, or unless terminated sooner in accordance with the terms and conditions
set forth in this Agreement.
b. Licensee may, at its sole option, renew this Agreement for a period of
two (2) additional years commencing on January 1, 2004, and ending December 31,
2005, if Licensee provides written notice of its intention to extend by no later
than June 30, 2003. Licensee may, at its sole option, extend the term of this
Agreement for an additional two (2) year period commencing on January 1, 2006,
and ending on December 31, 2007, if Licensee provides written notice of its
intention to extend by no later than June 30, 2005.
6. LICENSE FEE AND ROYALTIES
a. Licensee agrees to pay to Licensor a royalty on Licensed Products as
follows:
(i) For the calendar quarter ending June 30, 1999, Licensee will pay
to Licensor on the date hereof Four Hundred Eighty Thousand Dollars
($480,000) as a Minimum Quarterly Royalty Payment and Two Hundred
Eighty-One Thousand Dollars ($281,000) in interest in respect of amounts
due on the Secured Limited Recourse Promissory Note dated November 5, 1997
issued by Licensee to Licensor and which will be cancelled (the "1997
Note").
21
(ii) For the calendar quarter ending September 30, 1999, Licensee will
pay to Licensor on or before October 31, 1999 Five Hundred Twenty-Four
Thousand Dollars ($524,000) as a Minimum Quarterly Royalty Payment and Two
Hundred Eighty-One Thousand Dollars ($281,000) in interest in respect of
amounts due on the 1997 Note.
(iii) For the calendar quarter ending December 31, 1999, Licensee will
pay to Licensor within thirty (30) days after December 31, 1999 Seven
Hundred Sixty-One Thousand Dollars ($761,000) as a Minimum Quarterly
Royalty Payment.
(iv) Commencing with calendar year 1999, and for each calendar year of
the initial term and either extension term of this Agreement thereafter
(year 1999 and each calendar year of the initial term and each extension
term of the Agreement thereafter being referred to as "Applicable Years"),
Licensee will pay to Licensor an annual royalty equal to the "Annual
Royalty Amount" (herein defined) for the Applicable Year. "Annual Royalty
Amount" means the amount equal to the greater of (A) for Applicable Year
1999, the total of the Minimum Quarterly Royalty Payments required during
the Applicable Year in accordance with clauses (i), (ii) and (iii) above
and the amount paid for the first calendar quarter in 1999 in the amount of
One Million Dollars ($ 1,000,000.00), and for Applicable Years 2000 through
2003, the total of the Minimum Royalty Payments set forth for such
Applicable Year on the Minimum Royalty Table (2000-2003) attached hereto as
Exhibit F-1 (the "Minimum Annual Royalty" ), or (B) an amount equal to six
percent (6%) of Total Net Sales during the Applicable Year (the "Percentage
Annual Royalty"). The Annual Royalty Amount for any Applicable Year will be
paid quarterly (in arrears) within thirty (30) days after each Quarterly
Payment Date in installments equal to the Minimum Quarterly Royalty
Payments for such Quarterly Payment Dates as set forth in clauses (i), (ii)
and (iii) above and on the Minimum Royalty Table (2000-2003). "Quarterly
Payment Dates" means March 31, June 30, September 30 and December 31. For
any Applicable Year in which the Percentage Annual Royalty is greater than
the Minimum Annual Royalty, Licensee will pay to Licensor the Royalty
Adjustment Amount (herein defined) within thirty (30) days after the end of
the Applicable Year. "Royalty Adjustment Amount" means, for any Applicable
Year in which the Percentage Annual Royalty exceeds the Minimum Annual
Royalty, the amount by which the Percentage Annual Royalty exceeds the
Minimum Annual Royalty for such Applicable Year.
(v) The Minimum Annual Royalty during each year of either extension
term will be the same amount as, and will be paid in the same manner as,
the Minimum Annual Royalty for the year 2002 ($2,580,000) on the Minimum
Royalty Table (2000-2003).
b. At the time of each Annual Royalty Payment, Licensee shall provide to
Licensor a written statement illustrating the calculation of the payment due and
the volume of all sales for each product covered by Exhibit B, Section I, as
modified by Section II. The statement should be certified by an officer of
Licensee to be complete and accurate and shall set forth a detailed
22
accounting of the aggregate amount of Licensed Products shipped during the
contract year. Licensor may provide, in its sole and reasonable discretion, a
statement form, and Licensee agrees to supply the information requested on such
form. The parties agree that the form attached hereto as Exhibit F2 is
acceptable.
7. PAYMENT TERMS
a. Without limiting Licensor's right to terminate this Agreement under
Section 15, below, in the event that Licensee fails to make timely payments to
Licensor under this Agreement, Licensee shall pay to Licensor on demand the
amounts due with interest at the rate of one and one-half percent (1.5%) per
month from the due date until paid. If this rate exceeds the maximum interest
rate allowable by law, then interest shall accrue at the maximum rate allowable
by law.
b. All payments required under this Agreement shall be in U.S. Dollars and
made payable to the order of "Ambra, Inc."
c. Acceptance by Licensor of any payments under this Agreement shall not
prevent Licensor at any later date within thirty-six (36) months from the date
of any payment from disputing the amount owed or from demanding more information
from Licensee regarding payments finally due, and such acceptance of any payment
by Licensor shall not constitute a waiver of any breach of any term or provision
of this Agreement by Licensee if any such breach shall have occurred. Payment by
Licensee of any payments under this Agreement shall not prevent Licensee within
twelve (12) months from the date of such payment from disputing the amount owed
or from demanding from Licensor the repayment of any amounts overpaid by
Licensee; provided, however, that Licensee shall be entitled to reimbursement
for any overpayment made by Licensee discovered by an audit conducted by
Licensor of Licensee's books and records under Section 8(c) herein,
notwithstanding the date of any such audit.
d. Licensee acknowledges and agrees that any manner of payment other than
that stated herein, or as required by law, including, without limitation,
offsets, payment into an escrow account or to any other third party, shall
constitute a material breach of this Agreement.
8. BOOKS AND RECORDS
a. Licensee shall keep complete and accurate records of all Licensed
Products manufactured, shipped, distributed and sold and of Licensee's
activities under this Agreement, and shall make the same readily available to
Licensor and its agents and representatives at such
23
reasonable times as Licensor may from time to time request for inspection,
copying and extracting.
b. Such books and records shall be kept in accordance with generally
accepted accounting principles, consistently applied, and shall be retained by
Licensee and kept available for at least three (3) years after termination of
this Agreement for possible inspection, copying, extracting and/or audit by
Licensor.
c. Licensor and its agents and representatives shall have the right to
conduct audits with respect to the books, records and all other documents and
materials in the possession or under the control of Licensee relating to this
Agreement, the cost of which shall be borne by Licensor. Any such audit shall be
done during normal business hours and upon reasonable notice to Licensee. If any
such audit, however, discloses that royalty payments due to Licensor under this
Agreement exceed the amount of payments actually made to Licensor during the
audited period, Licensee shall immediately pay all unpaid royalties plus
interest calculated from the date such payment(s) were actually due until the
date when such payment is, in fact, actually made, plus, if payments due to
Licensor under this Agreement exceed the amounts of payments actually paid by an
amount greater than three percent (3%) of the payments made, Licensee shall
immediately pay the cost of the audit, as well. In addition to the foregoing, if
any such audit discloses that payments due to Licensor under this Agreement
exceed the amount of payments actually made to Licensor by an amount greater
than ten percent (10%) of the payments made during the audited period ("Major
Error Audit"), Licensor shall be entitled, in addition to all other remedies
available to it and at its sole option, to an additional payment equal to ten
percent (10%) of the full amount of the unpaid royalties. If during an audit of
a subsequent period conducted within twelve (12) months of the completion of a
Major Error Audit, the payments due to Licensor under this Agreement exceed the
amount of payments actually made to Licensor by an amount greater than ten
percent (10%) of the payments made during the audited period, Licensor shall be
entitled, in addition to an additional payment equal to twenty-five percent
(25%) of the full amount of the unpaid royalties and all other remedies
available to it and at its sole option, to immediately terminate the Agreement.
d. No later than one hundred twenty (120) days after the close of
Licensee's fiscal year, Licensee shall provide Licensor with its annual
financial statements, audited or unaudited, prepared by an independent certified
accountant. If unaudited, an officer of Licensee shall certify under penalty of
perjury that the financial statements are true and correct, and have been
prepared in accordance with generally accepted accounting principles,
consistently applied.
e. Licensor agrees that it will maintain in confidence those records of
Licensee disclosed to Licensor pursuant to paragraphs 8(a), 8(c), and 8(d) above
and any other oral or written confidential information about Licensee's business
and product line disclosed to Licensor.
24
9. LABELING
Licensee agrees to use the proper trademark and copyright notices in
connection with the Licensed Marks. Upon the execution of this Agreement,
Licensee shall no longer place orders for Licensed Products bearing any
trademark and copyright notices used prior to execution of the FMRA and will
take reasonable steps to ensure that such goods are no longer manufactured in
the Manufacturing Territory; provided, however, that Licensee shall not be
required to remove prior trademark and copyright notices already affixed to such
garments or to unreasonably disrupt work in progress. Where appropriate, such
notices shall appear in the screen for any screen-printed design, in the salvage
of any fabric, in the neck label or waist label of any Licensed Products, and on
any label or tag affixed to the Licensed Products or otherwise attached to the
Licensed Products.
10. OWNERSHIP OF THE MARKS
a. Licensee agrees that it has no right to ownership in the Licensed Marks
and, in furtherance thereof, hereby transfers and conveys all rights, title and
interest, if any, in the Licensed Marks to Licensor, and will not at any time
represent or authorize a Designated Manufacturer(s) to represent that such
manufacturer has any title or right of ownership in the Marks.
b. Licensee agrees that nothing contained in this Agreement shall give to
Licensee or the Designated Manufacturer(s) any right, title or interest in the
Licensed Marks except the limited license granted to Licensee herein, that such
Licensed Marks are the sole and exclusive property of Licensor and that all such
uses by Licensee or the Designated Manufacturer(s) of the Licensed Marks shall
inure only to the benefit of Licensor.
c. Licensee agrees that it will not seek or obtain any registration of the
Licensed Marks in any name or participate directly or indirectly in such
registration without Licensor's prior written permission. Subject solely to the
rights and interest granted herein, Licensee further agrees and acknowledges
that if it has obtained or obtains in the future any right, title or interest in
the Licensed Marks, or in any marks which contain the word BOSS whether used
alone or in combination with other words or symbols or which are confusingly
similar to the Licensed Marks, or in any other trademark or service mark owned
by Licensor, that Licensee has acted or will act as an agent and for the benefit
of Licensor for the limited purpose of obtaining such registrations in the name
and on behalf of Licensor. Licensee further agrees to execute any and all
instruments deemed by Licensor and/or its attorneys or representatives to be
necessary to transfer such right, title or interest to Licensor.
25
d. Licensee agrees not to take any action which may in any way impair
Licensor's rights in and to the Licensed Marks, including, without limitation,
challenging or opposing, or raising or allowing to be raised, either during the
term of this Agreement or after its termination, on any grounds whatsoever, any
questions concerning, or objections to, the validity of the Licensed Marks or
Licensor's rights therein, or any other trademarks or service marks owned by
Licensor containing the word BOSS in any manner.
e. Licensee agrees to reasonably assist Licensor in obtaining and/or
maintaining registration for the Licensed Marks including, without limitation,
by providing information regarding the Licensed Marks and samples of the
Licensed Products.
f. Licensee acknowledges that materials related to this Agreement and
uniquely and specifically associated with the Licensed Marks and/or the Licensed
Products (collectively "Works"), whether developed solely by Licensee or jointly
with others may qualify for copyright protection under applicable local laws.
Licensee agrees that such Works are to be deemed as Works "made for hire" for
the benefit of Licensor and that if such Works, by operation of law or
otherwise, are not Works "made for Hire," Licensee agrees (i) to assign, and
does hereby assign, to Licensor or its designee any and all of Licensee's right,
title and interest in the copyright in such Works throughout the world, and (ii)
not to seek or obtain registration of such copyright in its own name.
g. Licensee will and does hereby irrevocably appoint Licensor as its
respective attorney-in-fact for the limited purpose of executing any and all
documents and performing any and all other acts necessary to give effect and
legality to the provisions of this Section 10 of this Agreement. Licensor agrees
to provide Licensee with copies of all such documents it executes under this
Section 10(g).
11. INSURANCE
a. Licensee agrees to obtain and keep in full force and effect, during the
term of this Agreement, at its sole cost and expense, a policy of insurance
insuring against those risks customarily insured under comprehensive general
liability policies including, but not limited to, "product liability" and
"completed operations." Such policies of insurance shall have endorsements or
coverage with combined single limits of not less than One Million Dollars
($1,000,000) and shall name Licensor as an additional insured thereunder.
Licensee shall use reasonable efforts to obtain at a reasonable cost an
"advertising" rider and, if such rider is purchased, shall provide that it
cannot be canceled without thirty (30) days prior written notice to Licensor. It
is also agreed that the "other insurance" clause, if any, will be deleted from
such policy, that the insurance under such policy shall be primary, and that
other insurance in
26
force is neither primary nor contributing.
b. Licensee shall provide to Licensor, within thirty (30) days of the
Effective Date of this Agreement, a certificate showing proof that such policy
of insurance is in effect. In no event shall Licensee manufacture, offer for
sale, sell, advertise, promote, ship and/or distribute the Licensed Products
prior to the receipt by Licensor of such certificate of insurance.
c. Licensee agrees to give Licensor, or cause the insurer to give Licensor,
as the case may be, thirty (30) days prior written notice of any reduction in
limits or termination of such policy of insurance, or of any intention on the
part of Licensee not to pay the premium thereof.
12. NON-TRANSFERABILITY OF RIGHTS
a. Licensee shall not grant, assign, sublicense or otherwise convey or
transfer any rights inuring to Licensee or any obligations or duties owed by
Licensee to Licensor under this Agreement, without the prior written consent of
Licensor, and any attempted transfer or assignment shall be null and void.
Licensor shall consider in good faith any request for such consent and promptly
notify Licensee of Licensor's decision, said decision to be in Licensor's sole
discretion. Licensee shall have the right to transfer or assign its rights under
this Agreement to an affiliate of Licensee (i.e., an entity in control of,
controlled by or under common control with Licensee), provided that any such
transfer or assignment does not in any way diminish, extinguish, or adversely
affect Licensee's obligations to Licensor under this Agreement. Nothing in this
Section 12 is intended to prevent Licensee, its partners or affiliates from
offering and selling stock to the public.
b. Notwithstanding anything to the contrary set forth in this Agreement,
Licensee shall be permitted to assign and transfer Licensee's rights under this
Agreement to any parent, subsidiary or other affiliate of Licensee if Licensee
or its successor in interest remains fully liable for the performance of this
Agreement by such assignee or transferee and indemnifies Licensor with respect
to any costs and damages Licensor may incur because of such assignment or
transfer.
c. Licensor shall provide Licensee with written notice if Licensor intends
to assign or transfer to any third party any of its rights or obligations under
this Agreement.
27
13. INDEPENDENT CONTRACTOR
The parties hereby agree that Licensee is and shall be an independent
contractor and that no agency (except as specified in Section 10(g)), joint
venture or partnership is created by this Agreement. The legal relationship of
any person or entity performing services for Licensee shall be one solely
between such parties. Neither party shall incur any obligation in the name of
the other party without the prior written consent of that party.
14. INDEMNIFICATION
a. Licensee agrees to indemnify, defend and hold harmless Licensor and Hugo
Boss from and against any and all claims paid, liabilities incurred and all
other out-of-pocket expenses and costs (including reasonable attorney's fees,
disbursement and other charges but excluding lost profits) (collectively
referred to as "Expenses") actually incurred by Licensor or Hugo Boss arising
out of any breach by Licensee of its obligations under this Agreement or any
breach by any Designated Manufacturer of its obligations under its agreement
with Licensee, including, without limitation, Expenses incurred by Licensor or
Hugo Boss in efforts to stop the manufacture, distribution or sale of
unauthorized product bearing the Licensed Marks, or out of any defect whether
obvious or hidden and whether or not present in any sample approved by Licensor,
in any product bearing a BOSS mark manufactured, distributed or sold by or on
behalf of Licensee (regardless of whether such product was manufactured in the
Manufacturing Territory or the Sales Territory) under or arising from personal
injury or property damage or out of any infringement of any rights of any other
person by reason of the design, manufacture, distribution, advertisement,
promotion, sale, possession or use of the Licensed Marks or any Licensed
Products or Licensee's and Designated Manufacturer(s)' failure to comply with
applicable law, regulations and standards.
b. Licensor agrees to indemnify, defend and hold harmless Licensee from and
against any and all claims paid, liabilities incurred and all other Expenses (as
defined above) actually incurred by Licensee arising out of any breach by
Licensor of its obligations, if any, under this Agreement or Licensor's or Hugo
Boss' failure to comply with applicable law, solely attributable to Licensor's
or Hugo Boss' direct conduct (and not the conduct of Licensee).
15. TERMINATION
a. In the event Licensee commits any of the accelerating acts (defined at
Section 15(f)) or fails to make payments required under Section 15(f), Licensor
may terminate this Agreement in its entirety.
28
b. Licensor may terminate this Agreement as it pertains to any country
included in the Manufacturing Territory only upon any of the following events in
that country:
(i) A material breach by Licensee of any of the material terms and
conditions of this Agreement as it relates to a particular country, which
after due written notice of same from Licensor, remains uncured for a
period of thirty (30) days.
(ii) Licensee's failure to obtain compliance by any Designated
Manufacturer(s) with the list of locations required in Section
2(II)(b)(vii)(A) or Section 4(c) It shall not be a breach of this
Agreement, if, notwithstanding the reasonable efforts of Licensee, a
Designated Manufacturer provides only a partial list of all manufacturing,
processing and storage facilities in the territory as required by Sections
2(II)(b)(vii)(A) and 4(c) herein, provided, however, that any such list as
is provided includes all significant locations. For purposes of a breach of
Licensee's obligation to obtain lists of locations under Section
2(II)(b)(vii)(A) or Section 4(c), a cure may be accomplished by, within
thirty (30) days of receipt of a written demand from Licensor, (A)
delivering the required lists or (B) termination of all business dealings
with the Designated Manufacturer(s) at issue, as soon as commercially
feasible; provided however that as of the date of the written demand from
Licensor (and until a cure occurs), Licensee shall not enter into any new
manufacturing agreements or place any additional orders with such
noncomplying Designated Manufacturer(s) without the written consent of
Licensor; provided further that such termination shall not relieve Licensee
of its obligations to continue to enforce its rights against such
Designated Manufacturer(s) for breach of its obligations or Licensee's
indemnity obligations to Licensor under this Agreement.
(iii) Licensee's failure to obtain substantially full compliance by
any Designated Manufacturer(s) with the child labor restrictions in Section
2(II)(b)(xxii). For purposes of a breach of Licensee's obligations under
Section 2(II)(b)(xxii), a cure may be accomplished by, within thirty (30)
days of receipt of a written demand, termination of all business dealings
with the Designated Manufacturer(s) at issue.
(iv) Licensee's failure to obtain compliance by any Designated
Manufacturer(s) with any of the other material terms and conditions listed
in Section 2(II)(b)(i-xxii) which, after due written notice of same from
Licensor, remains uncured for a period of thirty (30) days.
c. Termination shall be effective upon expiration of the applicable cure
period, if any, and receipt of written notice from Licensor of such expiration.
Upon any such termination, all of the rights and licenses granted hereunder
shall terminate. Any such termination by Licensor shall be without prejudice to
Licensor's other rights and remedies for breach, including damages.
29
d. If permitted under any applicable laws, including U.S. Bankruptcy laws,
Licensor may terminate this Agreement immediately upon: (i) the insolvency of
Licensee; (ii) the filing of a voluntary petition in bankruptcy for liquidation
by Licensee; (iii) the filing of an involuntary petition in bankruptcy for
liquidation against Licensee that is not vacated within one hundred twenty (120)
days from the date of filing; (iv) the appointment of a receiver or trustee for
Licensee, provided that such appointment is not vacated within one hundred
twenty (120) days from the date of such appointment; or (v) the execution by
Licensee of an assignment for the benefit of all creditors generally.
e. Licensee shall notify Licensor of any change in ownership of more than
fifteen percent (15%) of Licensee's total outstanding equity (on a fully diluted
basis) in any transaction or series of related transactions. Licensor may
terminate this Agreement upon a Change of Control. For purposes of this
Agreement, "Change of Control" shall mean:
(i) (A) the sale of all or substantially all of the assets of
Licensee; (B) the sale of fifteen percent (15%) or more of the equity
of Licensee on a nonpublic sale; (C) any merger or consolidation of
the Licensee; or (D) the transfer of control (as that term is defined
in Rule 405 under Regulation C of the Securities Act of 1933, as
Amended), of Licensee in a public offering, in each of the foregoing
circumstances (i.e., (i) (A), (B), (C) or (D)) to, or with any one or
more of the following entities or persons, or persons or entities
under common control or ownership with them: Brookhurst, Inc., Boss
Golf Co., William Ott, Nicholas Yacobucci, James Ward, Boss Sportswear
(USA), Inc., Peter Chan, Paul Lee, Boss Manufacturing Co., American
Home Products, Inc., Vista 2000, Inc., G. H. Bass Co., and/or Hugo
Bosca; or
(ii) (A) the sale of all or substantially all of the assets of
Licensee; (B) the sale of fifty percent (50%) or more of the equity of
Licensee in a nonpublic sale; (C) any merger or consolidation of the
Licensee; or (D) the transfer of control (as defined in Section
15(e)(i)) of Licensee in a public offering, in each of the foregoing
circumstances (i.e., (ii) (A), (B), (C) or (D)) to, or with any entity
engaged in the manufacturing, distribution or sale (other than retail)
of clothing in direct competition with Licensor or Hugo Boss, (e.g.,
Zegna Corp., Donna Karan Corp., Hart, Shaffner & Marx; Calvin Klein
Corp., Designer Holdings, Liz Claiborne, or Salant Corp.) Licensor
agrees that Licensee, its partners and affiliates, may offer and sell
stock to the public and, subject to the provisions of this
30
Section 15(e), nothing in this Agreement shall prevent or interfere
with Licensee, or its partners or affiliates offering and selling
stock to the public.
f. In addition to the right of termination and all other available
remedies, any of the following acts by Licensee during the initial term shall at
Licensor's option accelerate all payments that would have been payable pursuant
to Section 6 above during the initial term and require the immediate payment by
Licensee to Licensor of the sum due and payable throughout the initial term
pursuant to Section 6 above, less the cumulative payments made by Licensee to
Licensor during this same period under Section 6 above, but in no event shall
the payment due be more than $13,423,000: (i) a breach by Licensee of its
obligations to make the payments required by Sections 6 and 7 of this Agreement
for any year in accordance with the terms of such Sections, which breach, after
due written notice of same from Licensor, remains uncured for a period of five
(5) days; (ii) Licensee's failure to manufacture any Licensed Products; (iii)
any attempted termination of this Agreement by Licensee, except as expressly
permitted by this Agreement or as agreed to by the parties in writing during the
initial term of this Agreement; (iv) the manufacture, distribution or sale by
Licensee of any product bearing the marks BOSS/HUGO BOSS; HUGO/HUGO BOSS;
BALDESSARINI/HUGO BOSS; HUGO BOSS or any other trademarks owned by Licensor or
Hugo Boss except those which constitute Licensed Marks for the products listed
in Exhibit B, Section I as modified by Section II; (v) the sale by Licensee of
any product bearing a BOSS mark outside the United States; (vi) any willful
material breach of any term of this Agreement; (vii) any attempt by Licensee
other than as requested by Licensor or Hugo Boss to register or otherwise create
or establish trademark rights in the word BOSS in its own name after the
Effective Date of this Agreement (but excluding any activities undertaken by
Licensee in connection with claims against third-parties for past
infringements); or (viii) any act described in Section 15(d) of this Agreement
(collectively referred to as "Accelerating Acts"). Any Accelerating Act(s) by
Licensee during the first option term of this Agreement shall at Licensor's
option accelerate payment of all payments payable during the first option term
and require the immediate payment by Licensee to Licensor of the sum of the
payments due and payable throughout the first option term pursuant to Section 6,
less the cumulative payments made by Licensee to Licensor during this period
under Section 6 above, but in no event shall the payment due be more than
$5,160,000. Any Accelerating Act(s) by Licensee during the second option term of
this Agreement shall at Licensor's option accelerate payment of all payments
payable during the second option term and require the immediate payment by
Licensee to Licensor of the sum of the annual payments due and payable
throughout the second option term pursuant to Section 6, in each of the years of
the final option term of this Agreement less the cumulative royalty payments
made by Licensee to Licensor during this same period under Section 6 above but
in no event shall the payment due be more than $5,160,000. The parties agree
that this provision is not a liquidated damages provision, but a quantification
of the benefit of the bargain to Licensor. In the event Licensee fails to make
immediate payment as required by
31
this Section, any award, in arbitration or otherwise, to Licensor for an
Accelerating Act(s) of this Agreement by Licensee shall include, but not be
limited to, the payment required by this Section, and such other relief as may
be appropriate. In the event Licensor exercises its option to demand accelerated
payment as set forth above, Licensor shall so notify Licensee in writing.
g. In addition to all other available remedies, Licensor may, solely at its
option and upon written notice to Licensee, terminate this Agreement as it
pertains to a particular country in the Manufacturing Territory (other than the
United States) if substantial, unauthorized sale or distribution of Licensed
Products occurs (i) within any such country and/or (ii) outside any such country
(except for the United States) where the unauthorized goods were manufactured,
distributed or sold by a Designated Manufacturer(s) in such country and is
documented during (i) each of three (3) consecutive quarters (a quarter being
defined as any three-month period beginning on January 1, April 1, July 1 or
October 1) or (ii) each of three (3) consecutive years.
h. Licensee shall have the option to terminate this Agreement at any time,
upon providing Licensor with ninety (90) days written notice, if all of the
following occur: (i) Licensee has used the BOSS mark as required by this
Agreement; (ii) Licensee is prohibited: either (a) by a binding order of a court
of competent jurisdiction (which order has not been vacated within ninety (90)
days of issuance) from using the word BOSS in the Microgramma typestyle and
every variation thereof on a substantial portion (by sales volume) of the
Licensed Products, or (b) by direction of Licensor from using the word BOSS in
the Microgramma typestyle and every variation thereof on a substantial portion
(by sales volume) of the Licensed Products with respect to sales in the United
States pursuant to Section 2(II)(f); and (iii) there is no reasonable
alternative available; provided, however, that if such court order is based upon
Licensee's use of the Licensed Marks in a manner that is inconsistent with the
requirements of this Agreement, then Licensor, but not Licensee, shall have the
option to terminate this Agreement upon ninety (90) days written notice. In the
event this Agreement is terminated by Licensee under this Section 15(h),
royalties due shall be based on amounts due to the date of termination as
provided for in Section 6 above, which shall be calculated on a pro rata basis
for any applicable portion of a calendar quarter.
i. Notwithstanding any other provision of this Agreement, upon termination
of this Agreement, Licensee (and its secured inventory lender), shall be
entitled, subject to the terms and conditions of this Agreement, on a
non-exclusive basis, for a period of nine (9) months from the date of
termination, to complete manufacture of Licensed Products in progress on the
date of termination, and to export to, and distribute and sell in, the Sales
Territory, such completed Licensed Products and any Licensed Products in
Licensee's inventory on the date of termination; provided, however, that such
rights as are granted herein apply only to orders placed and goods manufactured
in the ordinary course of Licensee's business. After the expiration of such nine
(9) month period, Licensee shall completely remove the Licensed
32
Marks and any and all marks including the word BOSS from any and all products
not manufactured before the expiration of such nine (9) month period.
16. RESULTS OF TERMINATION
a. Upon termination of this Agreement, subject to the terms of Section
15(i) above, all rights relating to the Licensed Products shall immediately
cease and Licensee shall:
(i) cease the manufacture of the Licensed Products except in
accordance with this Section 16;
(ii) cease all use of the rights licensed under this Agreement;
(iii) within thirty (30) days of termination, delete and henceforth
cease from making any reference to the Licensed Marks in, on or in
connection with any advertising, promotional or directory materials,
including any reference to having been previously a licensee of Licensor;
(iv) within ten (10) days of termination, deliver all packaging,
labels, tags and other materials and property (other than actual Licensed
Products) relating to this Agreement to Licensor; and
(v) within ten (10) days of termination, furnish Licensor with a full
and complete statement setting forth (A) the inventory of Licensed Products
manufactured or in the process of manufacture, including the wholesale
price thereof, and (B) production and distribution schedules for the
Licensed Products.
b. The termination of this Agreement shall not relieve Licensee of any
duties or obligations contained herein including, without limitation, the
obligation to pay royalties and interest and furnish required statements; nor
shall termination extinguish any rights of Licensor necessary to ensure an
expeditious conclusion of this Agreement, including, without limitation, the
right to inspect the books, records and facilities of Licensee and the right to
obtain prior written consents.
c. Upon any termination of this Agreement, Licensee shall be liable to
Licensor for actual royalties accrued prior to termination and royalties on any
goods manufactured after termination under Section 15(i), which royalties shall
be calculated on a pro rata basis for any applicable portion of a calendar year.
Upon any termination other than termination resulting from a breach by Licensee
of this Agreement, Licensee shall be liable to Licensor only for such
33
royalties; provided, however, that nothing in this Section shall affect
Licensor's rights or remedies for any post-termination breach by Licensee.
17. EQUITABLE RELIEF
The parties acknowledge that it will be impossible to measure in money the
damages that would be suffered by one if the other breaches or otherwise fails
to comply with the obligations imposed on it pursuant to this Agreement and
that, in the event of any such failure, the non-breaching party will be
irreparably damaged and will not have an adequate remedy at law. Therefore,
notwithstanding any other provision of this Agreement, the non-breaching party
shall be entitled to equitable relief, including, without limitation, injunctive
relief and/or specific performance to enforce such obligations and, if any
action should be brought in equity to enforce any provisions of this Agreement,
the breaching party shall not raise the defense that there is an adequate remedy
at law. Except as expressly provided in this Agreement, all specific remedies
provided for in this Agreement are cumulative and are not exclusive of one
another or of any other remedies available at law or in equity.
18. LEGAL ACTION
a. Licensee agrees to reasonably cooperate with and assist (and to take
reasonable steps to require the Designated Manufacturer(s) to cooperate with and
assist) Licensor in protecting and defending the Licensed Marks with Licensor
bearing all reasonable out of pocket expenses of Licensee and the Designated
Manufacturers thereof (other than as stated below) and shall promptly notify
Licensor in writing of any infringements, counterfeiting, claims or actions by
others in derogation of the Licensed Marks in the Manufacturing Territory of
which Licensee becomes aware; provided, however, that Licensor shall have the
sole right to determine whether any action shall be taken on account of such
infringements, counterfeiting, claims or actions. Licensee shall not take any
action on account of any such infringement, counterfeiting, claim or action
without the prior written consent of Licensor, which consent shall not be
unreasonably withheld. In the event Licensor grants written permission to
Licensee to take action on account of any such infringement, counterfeiting,
claim or action, Licensee shall bear all costs and expenses related thereto and
shall not settle or otherwise compromise any claim without Licensor's prior
written approval, which shall not be unreasonably withheld.
b. In the event Licensor initiates or defends any legal proceedings on
account of any infringements, counterfeiting, claims or actions by others in
derogation of the licensed rights, Licensee agrees to cooperate with and assist
Licensor to the extent reasonably necessary to protect
34
the licensed rights hereunder including, but not limited to, being joined as a
necessary party to such proceedings. Any such legal proceedings which do not
result from Licensee's breach of this Agreement shall be initiated or defended
by Licensor; provided, however, that each party shall bear its own costs and
expenses in any such legal proceedings.
c. In the event Licensor determines, in its sole discretion, that it is not
in the best interest of Licensor to initiate any legal proceedings on account of
any such infringements, counterfeiting, claims or action, or in the event
Licensor settles or resolves any such proceedings which may be initiated,
Licensee shall have no claim against Licensor for damages or otherwise, nor
shall the same affect the validity or enforceability of this Agreement.
d. Licensor shall have the right to record, or continue the recordation of,
the Hugo Boss Marks and the Licensed Marks with the Customs Service of the
United States. Upon written request from Licensee for Licensor's reasonable
cooperation, Licensor shall promptly cooperate with Licensee in its efforts to
gain entry into the United States of Licensed Products or components thereof
which are manufactured under authority of and in compliance with this Agreement
(or previously under the FMRA) in the event the Customs Service detains any such
products or components, or raises any question.
19. NOTICES
All notices, requests or other communications required or permitted
hereunder shall be given or made in writing and shall be (i) delivered
personally (including commercial carrier), (ii) sent by registered or certified
airmail, return receipt requested, postage prepaid or (iii) sent by telecopier,
addressed to the party to whom they are directed at the following addresses, or
at such other address as may from time to time be designated by such party to
the others in accordance with this Section 19:
If to Licensor, to:
Ambra Inc.
c/o Hugo Boss USA Inc.
645 Fifth Avenue
New York, New York 10022
Attention: Chief Financial Officer
Telecopier: 212/940-0619
35
Hugo Boss AG
Dieselstrasse 12
D-72555 Metzingen
Federal Republic of Germany
Attention: General Counsel
Telecopier: 49-7123-942018
With a copy to:
Coudert Brothers
1627 I Street, N.W.
Washington, D.C. 20006
Attention: Wendy L. Addiss, Esq.
Telecopier: 202/775-1168
If to Licensee, to:
I. C. Isaacs & Company L.P.
350 Fifth Avenue
Suite 1029
New York, New York 10118
Attention: Chairman and Chief Executive Officer
Telecopier: 212/695-7579
With a copy to:
Piper & Marbury L.L.P.
Charles Center South
36 South Charles Street
Baltimore, Maryland 21201-3010
Attention: Robert J. Mathias, Esq.
Telecopier: 410/576-1064
Any notice, request or other communications shall be deemed to have been
given and to be effective upon receipt or refusal by the addressee. Any party
may change its address for notices hereunder, effective upon giving of notice of
such change hereunder to the other parties.
21. FOREIGN AND DOMESTIC TAXES AND GOVERNMENT APPROVALS
a. Licensee agrees to obtain all government approvals and registrations
which are
36
required under the laws of the Manufacturing Territory as a result of Licensee's
activities in connection with this Agreement and to pay any taxes or fees
required by any such foreign or domestic government as a result of Licensee's
activities under this Agreement other than any taxes payable by Licensor or its
affiliates as a result of its receipt of any payments hereunder.
b. Licensee agrees to pay one-half (1/2) of the reasonable legal fees
necessary to have this Agreement reviewed by an attorney skilled in the laws of
any foreign country to which this Agreement relates and modified to conform with
local laws, if necessary. Wherever required, Licensee agrees to pay one-half
(1/2) of the reasonable legal fees necessary to have Licensee registered as
Registered User or a Permitted User of the Licensed Rights. Prior to executing
this Agreement, Licensor has given Licensee an estimate of all such anticipated
legal fees, and Licensee has had at least ten (10) business days following
receipt of such estimate to determine whether it wishes to forego entering into
this Agreement as to any country or countries.
c. Notwithstanding any other provision of this Agreement, Licensee shall
not be required to pay fees or expenses which arise out of Licensor's efforts to
protect and defend Licensor's intellectual property rights which were not
otherwise caused by activities of Licensee in connection with this Agreement.
22. GOVERNING LAW AND RESOLUTION OF DISPUTES
a. The validity, construction, operation and effect of any and all of the
terms and provisions of this Agreement shall be determined and enforced in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law thereunder except as to matters involving issues
of foreign trademark law, in which case the applicable foreign trademark laws
shall be applied. Subject to the provisions of Section 26 below, in the event
any legal action becomes necessary to enforce or interpret the terms of this
Agreement, the parties agree that such action will be brought in the U.S.
District Court for the Southern District of New York, and the parties hereby
submit to the jurisdiction of such court; provided, however, that any party may
enforce an arbitration award in any court of competent jurisdiction located in
New York City and the parties hereby submit to the jurisdiction of any such
court.
b. Nothing in this Agreement is intended to or shall prevent Licensor
and/or Hugo Boss from enforcing any of its rights in any jurisdiction anywhere
in the world to prevent the unauthorized manufacture, sale or distribution of
Licensed Products or of products bearing Hugo Boss Marks.
37
23. BINDING EFFECT
This Agreement shall be binding on the parties, their parents,
subsidiaries, successors and assigns (if any), and they each warrant that the
undersigned are authorized to execute this Agreement on behalf of the respective
parties.
24. CONFIDENTIALITY
a. This Agreement, its terms, conditions and provisions, and the trade
secrets, confidential information and property of the parties are strictly
confidential and except as provided herein, shall not be disclosed by either
party to any other person or entity without the prior written consent of the
other party, or as required by law, (i) except financial institutions,
(including, but not limited to, investment bankers and underwriters), Designated
Manufacturer(s), government officials, attorneys and accountants with which the
parties transact business; provided, however, that such third parties agree in
writing to abide by the terms of this provision, or (ii) except as appropriate
for Licensor to protect and/or enforce the Licensed Marks and Property. Licensor
and Licensee further agree that disclosure of this Agreement within their
organizations shall be limited to their respective directors, officers and
employees with a "need to know" and that except as provided herein third parties
will not be advised of the relationship between the parties except as is
necessary by law; to carry out the purposes of this Agreement; or to protect the
rights of either party. Nothing in this provision is intended to prevent or
substantially interfere with Licensee's, its partners, affiliates or its
stockholders' ability to make all disclosures required by law pursuant to
offering and selling stock to the public. Notwithstanding the provision of this
Section 24(a), in the event of published reports regarding the Agreement or
Licensee's relationship with Licensor or Hugo Boss, Licensor, Hugo Boss and
Licensee agree to cooperate in good faith to provide appropriate public
responses and comments and the parties shall be free to trade accurate public
statements which are appropriate to correct or clarify the public record.
b. Notwithstanding the provisions of Section 24(a) of this Agreement,
Licensee may supply to its agents, Designated Manufacturers or appropriate
government officials a copy of Exhibit G or convey the information in Exhibit G
to such individuals orally. To the extent Licensee is unable to import or export
Licensed Products by the actions of any government and Licensee cannot through
due diligence and the use of Exhibit G overcome such actions because of the
requirements of Section 24(a), Licensor will cooperate with Licensee, including
submitting written materials from Licensor or its parent or affiliates as
necessary to appropriate government officials, so as to enable Licensee to
obtain all necessary clearances; provided, however, that the failure of Licensee
to obtain any such clearance shall not give rise to any claim whatsoever against
Licensor.
38
25. GENERAL PROVISIONS
a. No waiver or modification of any of the terms or provisions of this
Agreement shall be valid unless contained in a written document signed by both
parties. No course of conduct of dealing between the parties shall act as a
waiver of any provision of this Agreement.
b. This Agreement, including the entirety of Exhibits A through H1 attached
hereto, contains the entire understanding of the parties as to the subject
matter herein, and there are no representations, warranties, promises or
undertakings other than those contained herein. This Agreement supersedes and
cancels all previous agreements between the parties hereto with respect to the
subject matter herein. This Agreement shall be construed against both parties
equally, regardless of the party that drafted it. Notwithstanding the foregoing,
nothing herein shall affect the validity or enforceability of the Settlement
Agreement and related documents between the parties which terminated the
litigation captioned HUGO BOSS FASHIONS, INC. ET AL. V. BROOKHURST, INC., ET
AL., Civil Action No. 93 Civ 0875 (LMM).
c. If any provision of this Agreement shall be held to be void or
unenforceable, such provision will be treated as severable, leaving valid the
remainder of this Agreement.
d. Wherever necessary to carry out the intent of the parties, certain
provisions of this Agreement including, without limitation, Sections 3(e)
through (j), 8, 10, 14, 15(i) and 16, shall survive the expiration or
termination of this Agreement and shall continue in full force and effect.
e. The parties agree to execute promptly any documents necessary to
effectuate the purpose and intent of this Agreement.
f. Captions and paragraph headings used in this Agreement are for
convenience only and are not a part of this Agreement and shall not be used in
interpreting or construing it.
g. This Agreement may be executed in any number of duplicate counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
26. ARBITRATION
a. In order to expedite the resolution of legal disputes, the parties agree
to have disputes arising in connection with this Agreement finally settled in
accordance with the rules established in Exhibit H, which decision shall be
binding on the parties. The parties further agree that the first such
arbitration proceeding initiated by either party shall be conducted at a
location
39
and under the auspices and arbitration rules (either the American Arbitration
Association Rules or the Rules of Conciliation and Arbitration of the
International Chamber of Commerce) selected by the non-complaining party;
provided that English shall be the official language of all arbitration
proceedings. For all subsequent arbitrations, the selection of location and
choice of rules shall alternate between the parties, I.E., if the Licensor is
the complaining party in the first arbitration under this Section, Licensee
shall select the location and choice of rules for that arbitration and for the
third, fifth, seventh, ET SEQ. arbitrations, and Licensor shall select the
location and choice of rules for the second, fourth, sixth, ET SEQ.
arbitrations. The parties further agree that notwithstanding this provision,
either party may, consistent with the provisions of Section 17 herein, seek
immediate injunctive relief in court prior to the initiation or pending
resolution, of any dispute in arbitration. If the non-prevailing party does not
comply with an arbitration decision, the prevailing party therein may
immediately enforce the arbitration decision in an equitable proceeding in court
with both parties' court costs and related attorney's fees paid by the
non-prevailing party in the arbitration, unless the arbitration decision is
modified, or not upheld or enforced, in which case each side shall bear its own
costs and attorney's fees. Notwithstanding anything in this Section 26(a),
Licensor or Hugo Boss may seek to enforce any of its rights to prevent the
unauthorized manufacture, sale or distribution of Licensed Products against any
entity in any tribunal anywhere in the world.
b. Notwithstanding anything in this Agreement, the parties agree that
disputes arising under Sections 4(a), 4(f), 4(g), and 4(j) herein, and under
Sections 2(I)(a) and 4(b) solely with respect to Licensee's compliance vel non
with the terms of Exhibit A as referenced in said Sections, may, at the option
of either party, be finally settled in accordance with the expedited arbitration
procedures set forth in Exhibit H1, which decision shall be binding on the
parties.
c. The parties agree that any decision required by this Agreement that is
committed to a party's "sole discretion" shall not be the subject of
arbitration; any decision required by this Agreement that is committed to a
party's "sole reasonable discretion" or "reasonable discretion" may be the
subject of arbitration.
d. The parties agree that in any arbitration proceeding brought under this
Section 26 where the interests of justice so require the arbitrator(s) shall
have the discretion to require one party to pay some or all of the costs and
expenses, including legal fees, incurred by the other party.
27. HUGO BOSS AG GUARANTY
Hugo Boss hereby irrevocably and unconditionally guaranties to Licensee the
full and timely performance of Licensor's obligations to Licensee under this
Agreement.
40
IN WITNESS WHEREOF, the parties agree that this Agreement shall take effect
as of the date first written above.
AMBRA INC., a Delaware corporation
By: /s/ Vincent Ottomanelli
--------------------------------
Name: Vincent Ottomanelli
Title: CFO / VP
By: /s/ Jorg-Viggo Muller
--------------------------------
Name: Jorg-Viggo Muller
Title: Chairman
HUGO BOSS AG, a corporation of the Federal
Republic of Germany
By: /s/ Werner Beldessarini
--------------------------------
Name: Werner Beldessarini
Title: Chairman and CEO
By: /s/ Jorg-Viggo Muller
--------------------------------
Name: Jorg-Viggo Muller
Title: CFO
I.C. ISAACS & COMPANY L.P., a Delaware
limited partnership
By: I.C. ISAACS & COMPANY, INC., a Delaware
corporation, its general partner
By: /s/ Robert J. Arnot
--------------------------------
Name: Robert J. Arnot
Title: Chairman and Chief
Executive Officer
41
EXHIBIT 10.63
LIST OF EXHIBITS
Exhibit A: Specifications and limitations on Licensee's use of the Licensed Marks
Exhibit A1: Price Points
Exhibit A2: Licensee's Advertising Rules
Exhibit A3: Licensor's Advertising Rules
Exhibit B: List of products on which Licensee is permitted to use the Licensed Marks
Exhibit C: List of countries
Exhibit C1: List of pending/not filed countries
Exhibit C2: List of special circumstances
Exhibit D: List of Licensor Agreements
Exhibit E: Prohibited stitching designs
Exhibit F1: Minimum Royalty Table
Exhibit F2: Royalty calculation sheet
Exhibit G: Customs letter
Exhibit H: Non-expedited arbitration provision
Exhibit H1: Expedited arbitration provisions
Exhibit A
THE MARKS
BOSS
(the "Microgramma Typestyle")
[Graphic B]
In using these Marks on Licensed Products, Licensee will comply with the
following:
1. Licensee shall use the phrase "BOSS by I G Design" (or such other name as
approved by Licensor) on all interior labels, tags and other interior
identifiers, and on all temporary or removable exterior labels, tags,
flashers, jokers, hang tags, and similar items, consistent with the rules in
section 4 below. In addition, the phrase "by I G Design" shall be prominently
visible; this requirement is satisfied when the prominence, use, and format
of the phrase "BOSS by I G Design" are similar to the exemplars shown in
Attachment 1 to this Exhibit A or as to tops satisfies the criteria set forth
in Section 9(a)(iii) below. Notwithstanding the exemplars shown in Attachment
1 to this Exhibit A, for all purposes under this Agreement where the word
"BOSS" is smaller than one inch, the ratio of the word "BOSS" to the phrase
"by I G Design" shall be no less than 4:1; in all other uses the ratio shall
be no less than 5:1.
2. On all Licensed Products other than Bottoms (Bottoms being defined as
jeans, casual pants, slacks, trousers, shorts, and overalls and shortalls)
Licensee shall use the phrase "BOSS by I G Design" (or such other name as
Licensor approves) as a permanent exterior means of identification similar
to the exemplars shown in Attachment 1 to this Exhibit A.
3. In addition to the use of the phrase "BOSS by I G Design" (or such other
name as approved by Licensor) as required by Section 1 of Exhibit A, Licensee
may also use the word "BOSS" without the phrase "by I G Design" permanently
affixed to the exterior of any Licensed Product.
4. On all Bottoms:
a. All Bottoms will bear either (i) a pocket flasher, (ii) a waist band
ticket, or (iii) some other form of temporary, removable exterior
identification bearing the phrase "BOSS by I G Design" (or such other name as
Licensor approves) or a permanently affixed "BOSS by I G Design" (or such
other name as Licensor approves) exterior marking, as illustrated by the
exemplars shown in Attachment 1 to this Exhibit A; provided, however, that
all temporary removable exterior identification must use the phrase "BOSS by
I G Design" as illustrated by the exemplar shown in Attachment 1 to this
Exhibit A.
b. If the word "BOSS" whether used alone or with any other word, is
used on fly labels on Bottoms, the letters of the word "BOSS" must be slanted
no less than nineteen (19) degrees as shown in Attachment 6B to this Exhibit
A.
c. If the word "BOSS" is used on a signature leather patch on a rear
jeans pocket, (i) the word BOSS whether used alone or with any other word
except I G Design (or such other name as Licensor approves) will be slanted no
less than twenty-four (24) degrees, as illustrated by the examples shown in
Attachment 4 to this Exhibit A; or (ii) the phrase "BOSS/I G Design" (or
such other name as Licensor approves) will be used in a non-justified 4:1
ratio on the leather patch consistent with the terms of Section 5(d) below;
or (iii) the phrase "Boss/I G Design" (or such other name as Licensor
approves) will be otherwise permanently affixed to the garment, similar to
the exemplar shown in Attachment 1 of this Exhibit A.
5. Where the word "BOSS" does not appear immediately adjacent to the phrase
"I G Design" (or such other name as Licensor approves), the word "BOSS" may
appear either in capital letters of equal size, or, if the individual letters
comprising B-O-S-S are of different sizes, within seventy-five percent (75%)
of any other letter; provided, however, that one or more of the following
rules are met:
a. The word "BOSS" is incorporated into a graphic environment as
illustrated by the acceptable exemplars shown in Attachment 2 to this Exhibit
A; not all graphic environments are acceptable as illustrated by the
unacceptable exemplars shown in Attachment 2 to this Exhibit A; or
b. All of the letters of "BOSS" are distorted as illustrated by the
acceptable exemplars shown in Attachment 3 to this Exhibit A; not all
distortions are acceptable as illustrated by the unacceptable exemplars shown
in Attachment 3 to this Exhibit A; or
c. The word "BOSS" appears other than in the Microgramma typestyle, the
non-Microgramma typestyle having first been approved in accordance with the
provisions of Section 10 of this Exhibit A; or
d. All of the letters of "BOSS" are slanted as follows:
(i) If used with no vertical or angled lines, then no less than
twenty-two (22) degrees, as illustrated by the exemplar shown in Attachment 5
to this Exhibit A; or
(ii) If used with vertical or angled lines as shown in Attachment
6A, then no less than nineteen (19) degrees, as illustrated by the exemplar
shown in Attachment 6B of this Exhibit A.
e. The requirements of this Section 5(a)-(d) do not apply if the word
"BOSS" is used with the letters appearing in a vertical (up and down) manner
generally consistent with the acceptable exemplars shown in Attachment 7A to
this Exhibit A. Not all vertical uses of the word "BOSS" are acceptable as
illustrated by the unacceptable exemplar shown in Attachment 7B to this
Exhibit A in which case the requirements of this Section 5(a)-(d) apply.
f. All of the foregoing rules except 5(d) shall apply to headwear.
g. In the case of belts, Licensee may use the word "BOSS" alone,
without the phrase
"I G Design", (or such other name as approved by Licensor)
where the Mark appears only on the belt buckle; where the mark appears
elsewhere on the exterior of the belt, it shall incorporate the phrase "I G
Design."
6. Any two-line logo or design using the word "BOSS" shall not have
justified margins or substantially justified margins.
7. Licensee shall not use words which indicate that its product is the only
or first BOSS product, e.g., "authentic," "genuine" or "original," except that
Licensee may use such words to directly modify the phrase "I G Design" (or
such other name as Licensor approves).
8. Licensee shall not use the terms BOSS AMERICA, BOSS GOLF, GOLF, HUGO
BOSS, HUGO, BALDESSARINI, WORLDWIDE, EUROPEAN, TENNIS, SKI, FORMULA 1,
MOTORSPORT, WINDSURFING, SAIL, GERMAN or any other words that are similar in
sound, sight or meaning, as exemplified in Attachment 8 to this Exhibit A.
The parties agree that Licensee may use the phrases "U.S.A." and "United
States" on Licensed Products, including in graphic depictions with or near
the Marks; provided, however, that such words are not incorporated into a
corporate identity, brand, or product extension logo with the word "BOSS." In
addition, Licensor, by itself or on behalf of HUGO BOSS AG or Licensee may,
from time to time, submit to each other exemplars of logos, designs or
decorative motifs which they are using or plan to use in the next selling
season, provided that such logos, designs, or decorative motifs shall not
have been used by the other party. The party so notified shall not use any
such logos, designs or decorative motifs, or anything similar to them in the
following selling season, without the other party's written permission;
provided, however, that either party may use logos, designs or decorative
motifs that are standard in the industry. Notwithstanding the foregoing,
Licensee shall not use any design or decorative motif similar to the BOSS
SPORT patch shown in Attachment 9 to Exhibit A.
9. For purposes of this Agreement, "Polo shirt" shall mean a pullover shirt
for sportswear that is made of knitted fabric and has short or long sleeves
and a turnover collar or a round banded collar and placket. In addition to all
other rules herein applicable to tops, Licensee may use the word "BOSS" by
itself on the exterior of polo shirts only in accordance with the following:
a. TRADITIONAL BUTTON PLACKET KNIT COLLAR STYLE. To the extent Licensee
uses the word "BOSS" by itself on the exterior left breast area of polo
shirts with button through plackets, knit turnover collars and traditional
coloration and designs, the following rules shall apply:
(i) on the exterior of men's shirts, the size of the word "BOSS"
shall be no smaller than three (3) inches long by five eighths (5/8) inches
tall; on the exterior of boys' and women's shirts, the size of the word
"BOSS" shall be no smaller than two and three-eighths (2 3/8) inches long by
seven sixteenths (7/16) inches tall;
(ii) The word "BOSS" shall be slanted no less than 24';
(iii) The phrase "I G Design" shall be prominently visible. This
requirement shall be satisfied by the following: the phrase shall appear and
be visible on the outside crease of one sleeve; the typestyle shall be
Microgramma; and the size of the letters shall be no less than one fourth the
size of the letters used for the word "BOSS" on the exterior left breast.
(iv) The color of the stitching on the shirt bearing the word
"BOSS" on the left breast area and the phrase "I G Design" on the sleeve must
be the same and clearly contrast with the color of the shirt fabric, e.g.,
black on white; red, blue or green on yellow; but not combinations like dark
blue on light blue; dark gray on black; dark green on dark blue. Acceptable
and unacceptable exemplars are shown in Attachment 10 to this Exhibit A.
b. ALL OTHER TRADITIONAL STYLES. To the extent Licensee uses the word
"BOSS" by itself on the exterior left breast area of polo shirts with
non-button through plackets and traditional coloration and designs, the
phrase "BOSS by I G DESIGN" required by Section 2 of this Exhibit A shall be
located on the top half of the garment and shall be prominently visible. This
latter requirement is satisfied when the prominence, use and format of the
phrase "BOSS by I G Design" are similar to the exemplars shown in Attachment 1
to this Exhibit A or satisfies the criteria set forth in Section 9(a)(iii)
above.
c. NON-TRADITIONAL STYLES. To the extent Licensee uses the word "BOSS"
by itself on polo shirts other than those described in Sections 9(a) and 9(b)
of this Exhibit A, no additional rules shall apply.
d. Exemplars of acceptable shirts for each category described in this
Section 9(a), 9(b) and 9(c) are depicted in Attachment 11 hereto.
10. Prior to use, Licensee may submit to Licensor for approval typestyles
other than Microgramma for the word "BOSS", provided those typestyles are
less similar to the typestyles used by Licensor than the Microgramma
typestyle used by Licensee. Licensee shall not use any such typestyle unless
Licensor, in its sole reasonable discretion, has approved such use in writing.
ATTACHMENT 1
TO EXHIBIT A
- - Exemplars of interior and exterior permanent/temporary labels, tags, etc.
with acceptable "BOSS by I G Design."
BMA - 1368 INFO TAG
[Graphic Logo]
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
BMA - 1241R
[Graphic Logo]
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
JR. HANG TAG/BJ-537W
FRONT
[Graphic Logo]
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
BMA-458
[Graphic Logos]
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
JR. HANG TAG/BJ-537
BACK
[Graphic Logos]
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
[Graphic Logo]
BMA-1242
22 DEG. ANGLE
6 TO 1 RATIO
THESE EXEMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS
OTHERWISE PROVIDED BY THIS EXHIBIT A
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 2
TO EXHIBIT A
- - Exemplars of acceptable graphic environments.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Jeans
[Graphic Logo] - Jeans
[Graphic Logo] - Jeans
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
- - Exemplars of unacceptable graphic environments.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 3
TO EXHIBIT A
- - Exemplars of acceptable distorted colors.
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo] - Jeans
[Graphic Logo] - Jeans
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 4
TO EXHIBIT A
- - Exemplars of 24 deg. slant.
[Graphic Logo]
ATTACHMENT 5
TO EXHIBIT A
- - Exemplars of 22 deg. slant.
[Graphic Logo]
ATTACHMENT 6A
TO EXHIBIT A
- - Exemplars of vertical alignment.
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo] - Jeans
[Graphic Logo] - Jeans
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo] - Jeans
[Graphic Logo]
ATTACHMENT 6B
TO EXHIBIT A
- - Exemplars of 19 deg. slant.
[Graphic Logo]
ATTACHMENT 7A
TO EXHIBIT A
- - Exemplars of acceptable vertical BOSS logos.
[Graphic Logo] - Shirt
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
[Graphic Logo]
ATTACHMENT 7B
TO EXHIBIT A
- - Exemplars of unacceptable vertical BOSS logos.
[Graphic Logo]
ATTACHMENT 8
TO EXHIBIT A
- - Exemplars of forbidden words.
AMERICAN BOSS
BOSS AMERICAN
BOSS OF AMERICA
BOSS AMERIKA
BOSS AMERICAS
BOSS GOAL
YUGO
HUGE
BALDISSARENE
GLOBAL
CONTINENTAL
EUROPE
BAVARIAN
BAVARIA
GERMANY
INTERNATIONAL
ATTACHMENT 9
TO EXHIBIT A
- - The BOSS Sport Patch
[Graphic Logo]
ATTACHMENT 10
TO EXHIBIT A
- - Exemplar of acceptable Coloration for "BOSS by I G Design" on polo
shirts.
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
[Graphic Logo] - Shirt
- - Exemplar of unacceptable coloration for "BOSS by I G Design" on polo
shirts.
[Graphic Logo] - Shirt
[Graphic Logo]
1
[Graphic Logo]
2
[Graphic Logo]
3
[Graphic Logo]
4
[Graphic Logo]
5
[Graphic Logo]
6
[Graphic Logo]
7
[Graphic Logo]
8
[Graphic Logo]
9
[Graphic Logo]
10
ATTACHMENT 11
TO EXHIBIT A
Exemplar of acceptable shirts under Exhibit A, Section 9(a).
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
Exemplar of acceptable shirts under Exhibit A, Section 9(b).
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
Exemplar of acceptable shirts under Exhibit A, Section 9(c).
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
[Graphic Logo]-Shirt
EXHIBIT A1
PRICE POINTS
1. Licensee shall sell products bearing Licensed Marks and permitted under
the schedule contained in Exhibit B that bear wholesale prices prior to any
BONA FIDE trade, quantity and early payment discounts and any other
credits, no greater than those listed below. Licensor and Hugo Boss shall
sell or license others to sell products bearing Hugo Boss Marks and permitted
under the schedule contained in Exhibit B that bear wholesale prices prior to
any BONA FIDE trade, quantity and early payment discounts and any other
credits, no less than those listed below:
- ----------------------------------------------------------------------------------------------------
LICENSEE'S LICENSOR'S/HUGO
MAXIMUM BOSS' MINIMUM
WHOLESALE WHOLESALE
- -----------------------------------------------------------------------------------------------------
All long bottoms except jeans and
warm-up (or jogging) suits
- -----------------------------------------------------------------------------------------------------
Cotton 35.00 25.00
- -----------------------------------------------------------------------------------------------------
Synthetic Blend 40.00 35.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
All short bottoms except jeans and
warm-up (or jogging) suits
- -----------------------------------------------------------------------------------------------------
Cotton 25.00 20.00
- -----------------------------------------------------------------------------------------------------
Synthetic Blend 30.00 25.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Jeans
- -----------------------------------------------------------------------------------------------------
Basic 25.00 25.00
- -----------------------------------------------------------------------------------------------------
Fashion 35.00 35.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Jean Shorts
- -----------------------------------------------------------------------------------------------------
Basic 22.00 20.00
- -----------------------------------------------------------------------------------------------------
Fashion 30.00 25.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Overalls
- -----------------------------------------------------------------------------------------------------
Short 35.00 35.00
- -----------------------------------------------------------------------------------------------------
Long 50.00 50.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Outerwear
- -----------------------------------------------------------------------------------------------------
Filled 80.00 80.00
- -----------------------------------------------------------------------------------------------------
Lined 60.00 60.00
- -----------------------------------------------------------------------------------------------------
Waterproof 80.00 80.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Vest
- -----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
LICENSEE'S LICENSOR'S/HUGO
MAXIMUM BOSS' MINIMUM
WHOLESALE WHOLESALE
- -----------------------------------------------------------------------------------------------------
Filled 60.00 50.00
- -----------------------------------------------------------------------------------------------------
Lined 40.00 40.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Polo Shirts and Knit Tops
- -----------------------------------------------------------------------------------------------------
Basic Short 25.00 20.00
- -----------------------------------------------------------------------------------------------------
Basic Long 30.00 25.00
- -----------------------------------------------------------------------------------------------------
Fashion Short 35.00 30.00
- -----------------------------------------------------------------------------------------------------
Fashion Long 40.00 35.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Sweatshirts
- -----------------------------------------------------------------------------------------------------
Basic 30.00 25.00
- -----------------------------------------------------------------------------------------------------
Fashion 40.00 30.00
- -----------------------------------------------------------------------------------------------------
Warm-up (or jogging) suits
- -----------------------------------------------------------------------------------------------------
Cotton 50.00 50.00
- -----------------------------------------------------------------------------------------------------
Synthetic 60.00 60.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
T-shirts
- -----------------------------------------------------------------------------------------------------
Basic 11.00 11.00
- -----------------------------------------------------------------------------------------------------
Fashion 15.00 15.00
- -----------------------------------------------------------------------------------------------------
Embroidered 18.00 15.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Sweaters
- -----------------------------------------------------------------------------------------------------
Basic 40.00 30.00
- -----------------------------------------------------------------------------------------------------
Fashion 55.00 50.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Hats
- -----------------------------------------------------------------------------------------------------
Basic 11.00 11.00
- -----------------------------------------------------------------------------------------------------
Fashion 15.00 15.00
- -----------------------------------------------------------------------------------------------------
Baseball Caps 15.00 11.00
- -----------------------------------------------------------------------------------------------------
Golf Caps 15.00 11.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Woven Shirts
- -----------------------------------------------------------------------------------------------------
Basic Short 25.00 25.00
- -----------------------------------------------------------------------------------------------------
Basic Long 30.00 30.00
- -----------------------------------------------------------------------------------------------------
Fashion Short 35.00 35.00
- -----------------------------------------------------------------------------------------------------
Fashion Long 40.00 40.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
LICENSEE'S LICENSOR'S/HUGO
MAXIMUM BOSS' MINIMUM
WHOLESALE WHOLESALE
- -----------------------------------------------------------------------------------------------------
Children's Apparel
- -----------------------------------------------------------------------------------------------------
Polo Shirts and Knit Tops 20.00 15.00
- -----------------------------------------------------------------------------------------------------
Sweatshirts 22.00 17.00
- -----------------------------------------------------------------------------------------------------
T-shirts 11.00 8.00
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Swimwear
- -----------------------------------------------------------------------------------------------------
Basic 20.00 15.00
- -----------------------------------------------------------------------------------------------------
Fashion 30.00 20.00
- -----------------------------------------------------------------------------------------------------
2. All price points are expressed in 1997 dollars, except for Children's
Apparel and Baseball and Golf Caps which price points are expressed in 1999
dollars. Licensee's price points shall adjust over the term of this Agreement
with changes in the rate of inflation applicable to clothing according to the
Producer Price Index for Apparel and Other Finished Products Made From
Fabrics and Similar Materials. Licensor's and Hugo Boss' price points shall
remain as stated herein.
3. To the extent Licensee desires to add additional products to its line, or
to the extent either party desires to use fabrics or constructions materially
different from those currently being used consistent with the limitations of
Exhibit B, the parties will in good faith negotiate reasonable price points
applicable to such products.
4. The parties agree that the price points included in this Exhibit A1 are
based upon existing market conditions and reasonably foreseeable changes in
such market conditions. In the event that market conditions relating to the
manufacture, distribution or sale of products contained in Exhibit B should
change substantially, to a degree not contemplated by the price points in
this Exhibit A1, and such change would result in economic hardship to a party
to this Agreement, the parties agree to negotiate in good faith to agree upon
reasonable alternative price points. Likewise, each party agrees to consider,
at the request of the other party, adjustments to the price points applicable
to the requesting party as reasonably agreed to by the parties on a
case-by-case basis.
EXHIBIT A2
ADVERTISING AND PROMOTION
(LICENSEE)
1. On all advertising and promotional materials for Licensed Products,
Licensee may use the word "BOSS", provided the phrase "BOSS by I G Design"
appears at least once in accordance with the rules listed in Sections 2, 3
and 4 below of this Exhibit A2.
2. In all print or Internet advertising and promotions for Licensed
Products, whether by Licensee, or by retailers, or by any other entity
authorized by Licensee, each and every page shall prominently feature "BOSS
by I G Design" as illustrated by the acceptable exemplars shown in Attachment
1 to this Exhibit A2.
3. In all radio, television and motion picture advertising for Licensed
Products, the first and last time BOSS is shown or mentioned, it shall be as
part of the phrase "BOSS by I G Design".
4. In all visual presentations of the phrase "BOSS by I G Design" in
advertising and promotions for Licensed Products, including but not limited
to print, Internet, television, motion picture, billboards, posters, flyers,
in-store signage, point-of-sale displays, sports sponsorships, promotional
tie-ins and/or samples, whether by Licensee, or by retailers, or by any other
entity authorized by Licensee, the size ratio between "BOSS" and the phrase "I
G Design" shall be similar to, and in no event greater than, that shown in
Attachment 1 to this Exhibit A2.
5. Licensee shall be entitled to display Licensed Products and people
wearing Licensed Products in all advertising and promotional material,
provided that such Licensed Products comply with Exhibit A and Exhibit B.
6. Nothing in this Agreement is intended to give Licensor any right to
approve or disapprove any aspect of the contents of any advertising other
than as expressly set forth above and in Exhibit A and Exhibit B; provided,
however, that Licensee shall not use any advertising style or format which is
or has been primarily associated with Hugo Boss' advertising of its products
other than those which are traditional or standard in the industry.
7. Licensee agrees to take reasonable steps to achieve compliance with this
Exhibit A2 in advertising and promotions by retailers and other entities
authorized by Licensee including, but not limited to, providing such entities
periodically with appropriate guidelines for use of the Licensed Marks
consistent with this Agreement. However, acts of retailers and other entities
which are beyond the control of Licensee will not constitute a breach of this
Agreement.
ATTACHMENT 1
TO EXHIBIT A2
- - Exemplars of BOSS/I G Design.
For all uses where the word "BOSS" is less than one inch (1"):
(4:1)
1/2" STRT.WIDE/LOWER CASE 4-1
[Graphic Logo]
1/2" 22(Degree) NARROW/LOWER CASE 4-1
[Graphic Logo]
1/2" STRT.NARROW/LOWER CASE 4-1
[Graphic Logo]
1/2" STRAIGHT NARROW/CAPS 4-1
[Graphic Logo]
1/2" 22(Degree) NARROW/CAPS 4-1
[Graphic Logo]
1/2" STRT.WIDE/CAPS 4-1
[Graphic Logo]
1/2" 22(Degree) WIDE/LOWER CASE 4-1
[Graphic Logo]
1/2" STRT.WIDE/LOWER CASE 4-1
[Graphic Logo]
For all uses where the word "Boss" is one inch (1") or larger:
(5:1)
1" 22(Degree) WIDE/LOWER 5:1
[Graphic Logo]
1" STRT. WIDE/CAPS 5:1
[Graphic Logo]
1"STRT. (Degree) WIDE/LOWER CASE 5:1
[Graphic Logo]
1" 22(Degree) WIDE/CAPS 5:1
[Graphic Logo]
EXHIBIT A3
ADVERTISING
(LICENSOR AND HUGO BOSS)
1. In all print or Internet advertising for products listed in Exhibit B,
Section I as modified by Exhibit B, Section II, whether by Licensor, Hugo
Boss, or by retailers, or by any other entity authorized by Licensor or Hugo
Boss, each and every page shall prominently feature the words "HUGO BOSS",
regardless of whether these words appear alone or in connection or
combination with any other words.
2. In all radio, television and motion picture advertising for products
listed in Exhibit B, Section I as modified by Exhibit B, Section II, the
first and last time the word "BOSS" is shown or mentioned, it shall include
the phrase "HUGO BOSS", regardless of whether these words appear alone or in
connection or combination with any other words.
3. Nothing in this Agreement is intended to give Licensee any right to
approve or disapprove any aspect of the contents of any advertising other
than as set forth above; provided, however, that Licensor and Hugo Boss shall
not use any advertising style or format which is or has been primarily
associated with Licensee's advertising of Licensed Products, other than those
which are traditional or standard in the industry.
4. Licensor and Hugo Boss agree to take reasonable steps to achieve
compliance with this Exhibit A3 in advertising and promotions by retailers
and other entities authorized by Licensor or Hugo Boss including, but not
limited to, providing such entities periodically with appropriate guidelines
for use of the words "HUGO BOSS" consistent with this Agreement. However,
acts of retailers and other entities which are beyond the control of Licensor
or Hugo Boss will not constitute a breach of this Agreement.
EXHIBIT B
I. LICENSED PRODUCTS
A. MEN'S APPAREL
1. SPORTSWEAR AND ACTIVEWEAR. All sportswear and activewear clothing other
than the exclusions listed below. All fabrications may be used.
2. OUTERWEAR. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible, lined,
unlined, filled and/or fabric treated (waterproofed, coated, etc.) and may
have detachable sleeves, hoods and/or interlinings. Lengths of such garments
shall be 22" to 60". All fabrications may be used except fur (except as trim)
and leather (except as trim).
3. HEADWEAR. All sports hats, visors and caps.
4. SWIMWEAR. All types of swimwear.
5. JOGGING SUITS. All types of warm-ups and jogging suits of any
fabrication.
6. BELTS. Belts bearing the Licensed Marks provided that such belts shall
be sold only as part of a Bottom and shall not be made out of leather.
B. WOMEN'S APPAREL
1. SPORTSWEAR AND ACTIVEWEAR. All sportswear and activewear clothing for
juniors, contemporary, misses and large sizes other than the exclusions
listed below. All fabrications may be used.
2. OUTERWEAR. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible, lined,
unlined, filled and/or fabric treated (waterproofed, coated, etc.) and may
have detachable sleeves, hoods and/or interlinings. Lengths of such garments
shall be 22" to 60". All fabrications may be used except fur (except as trim)
and leather (except as trim).
3. HEADWEAR. All sports hats, visors and caps.
4. SWIMWEAR. All types of swimwear.
5. JOGGING SUITS. All types of warm-ups and jogging suits of any
fabrication.
6. BELTS. All belts bearing the Licensed Marks provided that such belts
shall be sold only as part of a Bottom and shall not be made out of leather.
7. OTHER. Women's knit garments to be worn on the upper torso that are
either snapped or fixed through the crotch and the top portion of which may
be a halter, shoulder strap, short sleeve or long sleeve.
C. CHILDREN'S APPAREL
1. CHILDREN'S SPORTSWEAR AND ACTIVEWEAR. All sportswear and activewear
clothing other than the exclusions listed below. All fabrications may be used.
2. OUTERWEAR. All jackets, coats, vests, capes and ponchos other than the
exclusions listed below. Such outerwear garments may be reversible, lined,
unlined, filled and/or fabric treated (waterproofed, coated, etc.) and may
have detachable sleeves, hoods and/or interlinings. All fabrications may be
used except fur (except as trim) and leather (except as trim).
3. HEADWEAR. All sports hats, visors and caps.
4. SWIMWEAR. All types of swimwear.
5. JOGGING SUITS. All types of warm-ups and jogging suits of any
fabrication.
6. BELTS. All belts bearing the Licensed Mark provided that such belts
shall be sold only as part of a Bottom and shall not be made out of leather.
D. OTHER
All apparel, including uniforms and work clothes, which is
intended to be worn solely and exclusively while persons are
performing the normal duties of their employment.
II. PRODUCTS BEARING A BOSS MARK THAT LICENSEE SHALL NOT MANUFACTURE
A. Notwithstanding the foregoing, the parties agree that Licensed
Products do not include any of the following men's, women's or children's
apparel:
1. All styles of tailored clothing, furnishings and accessories, including
but not limited to tuxedos, gowns and evening wear, sportcoats, blazers,
jackets, suits, dress pants, career apparel including blouses, skirts and
dresses, raincoats, top coats, dress shirts, ties, dress vests, hosiery
(including but not limited to socks, stockings and hose), and leather belts.
2. All types of leather clothing (although leather trim may be used on all
products listed in Section 1);
3. All styles of shoes and other footwear.
4. Clothing designed and sold for the primary purpose of engaging in golf,
tennis, skiing, motor sports, windsurfing or sailing.
5. Except as described in Exhibit B Section I.B.7. above, bodywear,
including but not limited to underwear (including tee shirts intended to be
worn as underwear); loungewear and intimate apparel; and sleepwear and robes.
B. Unless otherwise agreed to by the parties, Licensed Products shall
not include any non-apparel products of any kind.
EXHIBIT C
MANUFACTURING RIGHTS GRANTED
BAHRAIN PAKISTAN
BANGLADESH PERU
BRAZIL PHILIPPINES
CANADA QATAR
COSTA RICA REPUBLIC OF SOUTH KOREA
DOMINICAN REPUBLIC SAIPAN
EGYPT SAUDI ARABIA
ECUADOR SEYCHELLES
HONG KONG SINGAPORE
INDIA SOUTH AFRICA
INDONESIA SRI LANKA
JAMAICA TAIWAN
MACAO THAILAND
MAURITIUS TURKEY
MEXICO VIETNAM
MONGOLIA UNITED ARAB EMIRATES
OMAN UNITED STATES
PEOPLES REPUBLIC OF CHINA
EXHIBIT C1
APPLICATIONS PENDING* OR NOT FILED**
BOTSWANA* MADAGASCAR*
EL SALVADOR* NEPAL**
GUATEMALA* REPUBLIC OF MALDIVES**
HONDURAS*
LESOTHO*
EXHIBIT C2
SPECIAL CIRCUMSTANCES
COLOMBIA
MALAYSIA
EXHIBIT D
LIST OF LICENSOR AGREEMENTS PURSUANT TO PARAGRAPH 2 (III)(b)
Concurrent Use Agreement between Hugo Boss and Reebok, dated April 1, 1997
Agreement between Hugo Boss and Levi Strauss, dated September 1, 1995
Concurrent Use Agreement between Hugo Boss and Phillips-Van Heusen
Corporation, dated January 10, 1995
Concurrent Use Agreement - USA between Hugo Boss AG and Boss Manufacturing
Company, dated August 12, 1999
Letter Agreement between Hugo Boss AG and Boss Manufacturing Company, dated
August 12, 1999
EXHIBIT E
* Prohibited stitching designs.
Int. Cl.25
Prior U.S. Cl.39
Reg.No.1,139,254
United States Patent and Trademark Office Registered Sep. 2, 1980
TRADEMARK
Principal Register
[Graphic Logo]-jeans
[Graphic Logo]-jeans
EXHIBIT F1
MINIMUM ROYALTY TABLE (2000-2003)
MINIMUM ROYALTY PAYMENTS FOR
APPLICABLE YEARS 2000-2003
QUARTERLY MINIMUM TOTAL
PAYMENT QUARTERLY MINIMUM
DATE ROYALTY ANNUAL
PAYMENT ROYALTY
(U.S.$) (U.S.$)
---------------------------------------------------------
March 31, 2000 $810,000
June 30, 2000 $810,000
September 30, 2000 $810,000
December 31, 2000 $810,000 $3,240,000
March 31, 2001 $810,000
June 30, 2001 $810,000
September 30, 2001 $810,000
December 31, 2001 $810,000 $3,240,000
March 31, 2002 $645,000
June 30, 2002 $645,000
September 30, 2002 $645,000
December 31, 2002 $645,000 $2,580,000
March 31, 2003 $520,000
June 30, 2003 $520,000
September 30, 2003 $520,000
December 31, 2003 $520,000 $2,080,000
---------------------------------------------------------
EXHIBIT F2
CALCULATION OF ANNUAL ROYALTY PAYMENT
CONTRACT YEAR
Territory Net Sales Total Net Sales
TRADEMARKED PRODUCTS
- --------------------
1. Number of Orders Booked
(see attached breakdown)
2. Invoiced Amounts
Less:
3. Sales taxes, cash discounts,
returns and allowances
4. Shipping
5. Bad debts (up to 0.5% of the amount
shown on line 2)
6. Net Sales
ROYALTY PAYMENT DUE
Remittance Enclosed:
Check No._________________
THE UNDERSIGNED, being the _________________ of I.C. Isaacs &
Company L.P., hereby certifies pursuant to Section ______ of the Agreement
dated _______________, 1999, by and between _______________ and I.C. Isaacs &
Company L.P., that the information continued in the attached Verification of
Licensed Products Sold is true and correct in all material respects as of the
date hereof.
SIGNED:________________________________
NAME:__________________________________
Title:_________________________________
Date:__________________________________
For the period: January 1 to December 31,
ANNUAL
ITEM QUANTITY SOLD SALES FIGURE ($)
---- ------------- ----------------
Pants, including Men __________________ ____________________
slacks & trousers Women __________________ ____________________
Children __________________ ____________________
Jeans without belts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Jeans with belts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Shorts, including Men __________________ ____________________
shortalls Women __________________ ____________________
Children __________________ ____________________
Jean Shorts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Sweatpants Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Overalls Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
T-Shirts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Polo Shirts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Tanktops Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Sweatshirts Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
All other shirts, Men __________________ ____________________
including knit and Women __________________ ____________________
woven sportshirts, Children __________________ ____________________
tunics, smocks,
beach cover-ups and
pullover style shirts
Sweaters, including Men __________________ ____________________
pullover style Women __________________ ____________________
Children __________________ ____________________
Warm-up sets and Men __________________ ____________________
Jogging Suits Women __________________ ____________________
Children __________________ ____________________
Jumpsuits Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Jackets, including Men __________________ ____________________
blousons and parkas Women __________________ ____________________
Children __________________ ____________________
Denim Jackets Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Vests Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Coats, including Men __________________ ____________________
short coats Women __________________ ____________________
Children __________________ ____________________
Rainwear Men __________________ ____________________
Women __________________ ____________________
Children __________________ ____________________
Swimwear, including Men __________________ ____________________
swimtanks and Women __________________ ____________________
bathing suits Children __________________ ____________________
Sports hats, Men __________________ ____________________
including caps Women __________________ ____________________
Children __________________ ____________________
Sports visors, Men __________________ ____________________
including sports Women __________________ ____________________
headbands Children __________________ ____________________
EXHIBIT G
CUSTOMS LETTER
TO WHOM IT MAY CONCERN:
I.C. Isaacs & Company L.P., trading as "Boss by I G Design," markets and
distributes "BOSS" branded clothing in the United States of America pursuant
to a trademark licensed rights in the USA granted by Ambra Inc., a
wholly-owned subsidiary of Hugo Boss AG. Ambra, Inc. has authorized I.C.
Isaacs & Company L.P. pursuant to a Restated and Amended License Rights
Agreement, dated as of October __, 1999, to manufacture "BOSS" branded
sportswear in _______________________ for export to the USA only. Therefore,
shipments of such "BOSS" branded clothing from _____________________________
co-signed to I.C. Isaacs & Company L.P. for ultimate shipment to the USA are
under authority from Ambra and Hugo Boss AG.
If you wish confirmation of this information, please contact Gert
Juergen Frisch, General Counsel, at Hugo Boss AG, (phone)
49-7123-942598/(fax) 49-7123-942018, or _______________________, agent for
Hugo Boss AG, in ______________________________.
Dated:
----------------------------
By:
--------------------------------
--------------------------------
Officer of General Partner
ATTENTION: ONLY THE ORIGINAL, EXECUTED VERSION OF THIS LETTER IS VALID, NO
- ---------
COPIES ARE ACCEPTABLE, AND THE ORIGINAL IS VALID FOR ONLY ONE YEAR FROM THE
DATE OF THIS LETTER.
EXHIBIT H
NON-EXPEDITED ADR PROCEDURES
In the event a dispute arises requiring non-expedited ADR procedures,
the following procedures shall be followed:
1. The parties shall attempt to resolve disputes arising under this
Agreement informally and in the normal course of business, by means of
negotiations between employees of the companies responsible for the parties'
day-to-day relationship.
2. In the event that either party believes that normal business
negotiations have not or are not likely to lead to a timely resolution,
either party may at any time without regard to Section 1 above initiate ADR
proceedings by notifying the other in writing via facsimile of a demand for
ADR proceedings, with a succinct statement of the matters at issue. Notice
shall comply with the requirements of Section 19 of this Agreement.
3. Upon receipt of such notification, both parties shall make arrangements
for an executive to confer, either in person or, if both agree, by telephone,
in an effort to negotiate a resolution of the dispute.
a. The executives will confer within five (5) business days of the
notification, and will work for at least ten (10) additional days to try to
reach a negotiated settlement.
b. By written agreement of both parties, the time period for
negotiation may be extended. The time period for negotiation will
automatically be extended until one party declares an impasse.
4. If the executive negotiations described in Section 3 of this Exhibit H
fail to resolve the matter, then either party may thereafter notify the other
party in writing via facsimile that if agreement is not reached, mediation or
arbitration will be required. The notifying party shall state whether it
elects mediation or arbitration. If mediation is elected, the notified party
may within two (2) business days elect instead to proceed directly to
arbitration, and will so notify the notifying party. If the notified party
takes no action, the matter will proceed to mediation. If arbitration is
elected by either party, the matter will proceed directly to arbitration. In
the case of arbitration, the party selecting the location and choice of rules
of the arbitration as specified under Section 26(a) of this Agreement shall,
within ten (10) business days of the election to arbitrate, notify the other
party of the selections of location and choice of rules
made.
5. In the event of mediation, the parties agree that Jonathan Marks of
Marks ADR, Inc. or his designee shall select a mediator within five (5)
business days. If Mr. Marks or his designee is unable to select a mediator,
the parties shall within ten (10) business days select a mediator based on
candidates provided by Marks ADR, Inc., or if Marks ADR, Inc. is unavailable,
the American Arbitration Association.
a. Within two (2) business days of the mediator's selection, the
mediator will confer in a joint conference call with representatives of the
parties to discuss the issues in dispute and any further preparation needed
prior to holding a mediation session. The parties shall defer to the
mediator's recommendation about appropriate procedures.
b. The parties shall attempt to resolve the dispute through mediation
for at least twenty (20) business days from the date of the mediator's
initial joint telephone conference.
c. The time period for mediation shall be extended automatically past
the initial twenty (20) business days until one party declares in writing an
impasse and demands arbitration. If an impasse is declared by either party,
the matter shall proceed to arbitration.
EXHIBIT H1
EXPEDITED ADR PROCEDURES
In the event a dispute arises requiring expedited ADR Procedures, the
following procedures will be followed:
1. The parties will attempt to resolve disputes arising under this
Agreement informally and in the normal course of business, by means of
negotiations between employees of the companies responsible for the parties'
day-to-day relationship.
2. Either party may at any time request that the parties make arrangements
for an executive from each side not directly involved in the underlying
dispute to confer, either by telephone or in person, in an effort to
negotiate a resolution of the dispute.
3. Although the parties recognize that resolution of disputes through
direct negotiation under Sections 1 and 2 of this Exhibit H1 re to be
preferred, in the event that either party believes that normal business
negotiations are not likely to lead to a timely resolution, either party may
at any time without regard to Sections 1 and 2 of this Exhibit H1 initiate
expedited ADR proceedings by notifying the other party in writing via
facsimile of a demand for expedited ADR proceedings, with a succinct
statement of the matters at issue, and by sending the notification and
statement to Marks ADR, Inc. Notice will comply with the requirements of
Section 19 of this Agreement.
4. The expedited ADR proceedings will consist of an expedited arbitration
unless both parties agree in writing that they wish to pursue mediation,
either as a preliminary to arbitration or in parallel to the arbitration
proceedings. If the parties agree to pursue mediation, Jonathan Marks or
another mediator agreed to by the parties will serve as mediator, and follow
such procedures as the mediator and the parties agree to.
5. Unless the parties agree in writing to an alternative approach (as to
accommodate mediation or to fit the specifics of a particular dispute), the
parties will proceed as follows:
a. Within one (1) business day (a business day consists of a day,
excluding Saturdays, Sundays and all holidays generally recognized in either
the United States or the Federal Republic of Germany) of receipt of the
demand for expedited ADR proceedings, Marks ADR, Inc. will inform the parties
by facsimile of the name of the arbitrator who will handle the case.
b. The matter will be heard and decided by Jonathan Marks. In the
event that Mr. Marks is unavailable, Mr. Marks will designate a neutral for
this purpose unless the parties are first able to agree on a substitute
neutral.
c. On the fifth (5th) business day after Marks ADR, Inc. has notified
the parties of the arbitrator, the arbitrator will hold a preliminary
telephone conference during which the parties will describe the dispute and
discuss the procedure for resolving the dispute, including, for example, the
need for and content of pre-hearing submissions. To the extent that the
parties cannot agree on procedures, the arbitrator will orally inform the
parties at the close of the telephone hearing of his procedural decisions. He
will confirm those decisions in writing no later than the following business
day.
d. On the sixth (6th) business day after the preliminary telephone
conference, unless both parties agree to shorten the time or to extend the
time, the arbitrator will hold an in-person hearing to receive evidence and
consider arguments relating to the matter; provided, however, that if the
parties cannot agree to extend the time and the arbitrator concludes that in
the interest of justice the time should be extended, the arbitrator may do so.
(1) The hearing will be conducted at a time decided by the
arbitrator, in either New York City or Washington, the
location to be decided by the arbitrator.
(2) The arbitrator will not be bound by the rules of evidence.
(3) The arbitrator will allow each side to present written and
oral evidence as they deem appropriate, except that the
arbitrator may set time limits to ensure that the hearing is
completed within one (1) working day.
(4) The arbitrator will declare the record closed at the end of
the hearing, except that the arbitrator may defer the closing
of the record for up to two (2) business days in order to
allow the parties to make post-hearing submissions.
(5) The arbitrator will hand down a binding award within one (1)
business day of the close of the record. The award will be
accompanied by a statement of reasons. "Statements of reasons"
from prior expedited arbitrations may be used by parties to
later arbitrations to support their positions.
e. Except as specifically set out herein, the arbitrator will have
sole discretion to determine procedures for the arbitration.