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EXHIBIT 10.1*
AMENDMENT NUMBER 1
TO LICENSE AGREEMENT
This amendment dated as of February 1, 1998, (the "Amendment") is to
the License Agreement dated December 9, 1996, (the "Original License Agreement")
by and between Coach, a division of Sara Lee Corporation, ("Licensor") and
Movado Group, Inc., ("MGI").
WHEREAS, Licensor and MGI desire that NA Trading SA, a Swiss
Corporation with an address at Bettlachtrasse 8, CH-2504 Grenchen, Switzerland
("NAT") bear primary responsibility for the manufacture, marketing and
distribution of the Licensed Products outside the United States and
WHEREAS, NAT is willing to undertake such responsibilities in
accordance with the terms of and in consideration of the mutual covenants and
premises contained in the Original License Agreement as amended hereby and
WHEREAS, the parties desire to make certain additional changes to the
Original License Agreement as set forth below:
NOW THEREFORE in consideration of the mutual covenants and the premises
set forth herein, the Original License Agreement is hereby amended as follows:
1. NAT is hereby added as a party to the Original License Agreement; the
term "Licensee" shall mean MGI and NAT jointly and severally and the
term "Agreement" shall mean the Original License Agreement as amended
hereby.
2. Delete Section 1.2 of the Original License Agreement and replace with
the following:
1.2 "Licensor Channels" shall mean retail outlets and
wholesale distributors controlled by Licensor, including
without limitation Licensor's catalog, Licensor's stand alone
retail stores, Licensor's factory outlet stores, Licensor's
retail stores that are situated within department stores
located outside the United States and Licensor Special
Accounts (as hereinafter defined); provided, however, that any
such retail outlet or wholesale distributor (with the
exception of Licensor Special Accounts) not operated by
Licensor or by any entity controlled by Licensor shall not be
deemed a Licensor Channel.
3. Delete Section 1.3 of the Original License Agreement and replace it
with the following new Section 1.3:
1.3 "Non-Licensor Channels" shall mean retail outlets and
wholesale distributors not controlled by Licensor, including
without limitation
( * CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED FROM PAGES 3 AND 4
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC")
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934 ("1934 ACT") ).
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department stores, jewelry store chains, Licensee's factory
outlet stores and Licensee Special Accounts (as hereinafter
defined).
4. Immediately following Section 1.10 of the Original License Agreement
add the following new Section 1.11:
1.11 "Control, controlling and controlled" shall mean, (i)
ownership or voting control, directly or indirectly, of more
than fifty percent (50%) of the voting power represented by
the outstanding voting stock of a corporation or other
majority equity interest if not a corporation and (ii) the
power to direct the management and determine the policies of
the applicable entity whether directly or indirectly.
5. Following Section 3.2 on page 4 of the Original License Agreement,
insert as Section 3.3 the following paragraph:
3.3 Licensee shall not place or use other marks, including
without limitation, trademarks, trade names, sub-brands, line
names, collection names, model names, designs, logos or
endorsements (hereinafter referred to as "Authorized Marks")
in connection with the Licensed Products, except as
specifically authorized by Licensor pursuant to the terms of
this Agreement. Licensee acknowledges that Licensor is the
owner of all right, title, and interest in and to such
Authorized Marks that are developed by Licensor, or developed
by Licensee exclusively for use in connection with Licensed
Products, and that are used exclusively in connection with
Licensed Products or other products sold by or on behalf of
Licensor under any of the Licensed Marks ("Licensor Owned
Authorized Marks") and that all use thereof shall inure to the
benefit of Licensor. To the extent any rights in and to such
Licensor Owned Authorized Marks, or with respect to any
materials used in the advertising or promotion of the Licensed
Products including without limitation copy, artwork, and
photographs, are deemed to accrue to Licensee pursuant to this
Agreement or otherwise, Licensee hereby assigns any and all
such rights, at such time as they may be deemed to accrue, to
Licensor. Licensee agrees that it will execute and deliver to
Licensor any documents reasonably requested by Licensor
necessary to effect any such assignment.
6. Delete Section 11.1 on pages 16 and 17 in the Original License
Agreement and replace it with the following:
11.1 Licensee shall pay to Licensor a royalty on Licensee's
sales of the Licensed Products to all Non-Licensor Channels
(Combined U.S. and non-U.S.). The sales to which the royalty
rates will be applied (except for sales to Non-Licensor
Channels (non-U.S.), sales to wholesale distributors
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and sales to Licensee Special Accounts) shall be based on the
Wholesale Price as in effect in the United States when such
sales are made, and no reduction in the royalty shall be
allowed for discounts given off such Wholesale Price. With
respect to Licensee's sales to Non-Licensor Channels
(non-U.S.), wholesale distributors and Licensee Special
Accounts, the sales to which the royalty rates will be applied
shall be based on actual invoice price net of all taxes,
duties, freight, insurance and credits for returns actually
made, but no deduction shall be made for discounts for cash or
prompt payment or for uncollectible accounts; provided,
however, that as to any Licensed Products sold to any
wholesale distributor controlled by Licensee, the sales to
which the royalty rates will be applied shall be based on the
actual invoice price for such Licensed Products when first
sold by any such wholesale distributor to any entity not
controlled by Licensee, net of all taxes, duties, freight,
insurance and credits for returns actually made, without
deduction for discounts for cash or prompt payment or for
uncollectible accounts. The base royalty rates to be applied
to Licensee's sales are as follows:
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With respect to all sales to Licensee Special Accounts,
Licensee shall pay, in addition to the base royalty *.
7. Delete the fourth sentence of Section 12.4 of the Original License
Agreement and replace it with the following sentence:
"Sales" as used in this paragraph shall mean all sales, based
on Wholesale Price or based on actual invoice price in the
specific case of sales to Licensee Special Accounts or sales
to wholesale distributors, of Licensed Products made by
Licensee to Non-Licensor Channels anywhere in the world.
8. Delete the second sentence of Section 12.7 on page 21 of the Original
License Agreement, and replace it with the following sentence:
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( * CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE
SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT).
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9. Delete the first sentence of Section 13.2 on page 23 of the Original
License Agreement and replace it with the following sentence:
Within ninety (90) days following the end of each Contract Year of this
Agreement, and within ninety (90) days after the termination of this
Agreement, Licensee shall deliver to Licensor a statement signed by an
authorized officer of Licensee reporting actual sales of the Licensed
Products to Non-Licensor Channels (based on the applicable U.S.
Wholesale Price or invoice price pursuant to Section 11.1 herein),
royalties due, royalties paid and advertising expenditures during the
preceding Contract Year. Sales of Licensed Products to Non-Licensor
Channels shall be broken out to accurately reflect sales to U.S.
Non-Licensor Channels, sales to Non-U.S. Non-Licensor Channels, sales
to Licensee Special Accounts, sales to wholesale distributors, and
sales by model type in units and dollars.
10. Delete Section 16.4 of the Original License Agreement and replace it
with the following:
16.4 In the event that a third party brings any claim,
institutes any action or commences any proceeding against
Licensee arising from Licensee's use of any of the Licensed
Marks, the Trade Name, the Licensor Owned Authorized Marks or
any product design, prototype, pattern, styling or
copyrightable material owned by Licensor as provided in
Paragraph 7.1 of this Agreement, Licensee shall promptly
notify Licensor thereof and Licensor shall indemnify, defend
and hold harmless Licensee and each officer, director,
employee, agent, representative, contractor and customer of
Licensee and of each entity controlled by Licensee from and
against all losses, liabilities, damages, claims, judgments,
fines, suits, demands, costs, interest and expenses of any
kind or nature (including reasonable attorneys' fees and
disbursements) arising out of or in connection with any such
claim, action or proceeding. Licensee shall cooperate in such
defense as reasonably requested by Licensor, at Licensor's
expense. Any award received by Licensor in any such claim,
action or proceeding shall belong exclusively to Licensor.
This Paragraph shall survive termination or expiration of the
Agreement.
( * CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE
SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT).
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11. Add the following new Section 16.5 to the Original License Agreement
immediately following Section 16.4.
16.5 Licensor will bear all costs and expenses in connection
with any research to determine the availability of,
applications to register and all maintenance of any and all
registrations relating to Licensor Owned Authorized Marks and
the Licensed Marks.
12. Section 18 is deleted and replaced with the following new Section 18:
18. NO ASSIGNMENT OR SUBLICENSE BY LICENSEE This Agreement and
all its rights and duties hereunder are personal to the
Licensee and shall not, without the written consent of
Licensor, be assigned, sublicensed or otherwise encumbered by
Licensee or by operation of law; provided, however, that
notwithstanding anything to the contrary contained herein
Licensee shall have the right (a) to have the Licensed
Products manufactured by one or more third party manufacturers
and, (b) to assign or sublicense any or all of its rights and
duties hereunder to any other entity which is controlled,
directly or indirectly, by Licensee provided that the original
Licensee named herein simultaneously with such assignment,
enters into an agreement with Licensor in a form reasonably
satisfactory to Licensor by which Licensee guarantees all of
the obligations, including without limitation, all financial
and performance obligations, of such assignee. All references
herein to "Licensee" shall include any and all such permitted
assignees and sublicensees.
13. Except as set forth in this Amendment, the Original License Agreement
will remain in full force and effect.
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14. This Amendment may be signed by the parties duly executing counterpart
originals.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their authorized officers and to become effective as of the date
first above written.
COACH
A Division of Sara Lee Corporation
By: /s/ A. Catling
Name: Alan Catling
Title: Exec. Vice President
MOVADO GROUP, INC.
By: /s/ Timothy F. Michno
Name: Timothy F. Michno
Title: General Counsel/Secretary
NA TRADING SA
By: /s/ Michael J. Bush
Name: Michael J. Bush
Title: Director
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