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EXHIBIT 10.2
OFFICIAL ROLEX JEWELER AGREEMENT
THIS AGREEMENT is made an entered as of April 3, 2000 by and
between Rolex Watch U.S.A., Inc., ("Rolex"), a company incorporated and existing
under the laws of the State of New York, having its main office at 665 Fifth
Avenue, New York, New York 10022, and Mayor's Jewelers, Inc., a retail jeweler
doing business at the location(s) listed on Schedule A, attached hereto.
1. APPOINTMENT AS OFFICIAL ROLEX JEWELER.
1.1 Rolex appoints Jeweler as an Official Rolex Jeweler ("ORJ")
and grants to Jeweler and non-exclusive right to purchase
Rolex products and resell them at retail. Rolex may appoint
additional ORJ's at its sole discretion, regardless of their
location. Jeweler agrees to sell the Rolex products in a
manner consistent with the high standards, goodwill and
prestigious reputation of the Rolex name. Jewelers agrees to
acquire new Rolex products exclusively from Rolex.
1.2 Jeweler is authorized as an ORJ at the location(s) listed on
Schedule A. Rolex may discontinue the authorized status of
one or more locations, in accord with the terms of this
Agreement, without changing the status of Jeweler's
remaining authorized locations (if any).
2. ORDERS
2.1 All orders are subject to review and acceptance by Rolex,
and the approval of quantities and selection of Rolex
products sold to Jeweler by Rolex shall be left to Rolex's
sole discretion.
2.2 Orders are deemed accepted only upon shipment of merchandise
by Rolex. The price charged to Jeweler will be set in accord
with the prevailing price list as of the shipment date.
Rolex does not guarantee any delivery schedule, and shall
not incur any liability for a delay or cancellation in
shipping any order.
2.3 Rolex may cancel back orders at its discretion, and all back
orders will be canceled automatically if Jeweler's status as
an ORJ ends, or if this Agreement terminates. Rolex will not
be liable for any damages that might result.
3. RETAIL SALES ONLY. Jewelers will sell Rolex products only to
ultimate consumers, at the retail level, in transactions that
originate over-the-counter at its authorized location(s). All
other methods of the sale (except for Rolex-approved
corporate/presentation sales) are considered transshipping. Rolex
is the sole distributor of Rolex watches in the United States.
Rolex has not authorized any ORJ or any other person to act as a
wholesaler or subdistributor; therefore, any transshipment of
Rolex watches, even if unintentional, is prohibited. ORJs may not
sell watches to customers referred from outside their local
market area (unless the sale is transacted in person at an
authorized location), nor may they pay a feel for any referrals.
4. OWNERSHIP, MANAGEMENT AND BUSINESS LOCATION. If Jeweler undergoes
a change in ownership, ownership structure, management or
business location, such changes will be deemed just cause under
paragraph 8.3 and this Agreement and Jeweler's status as an ORJ
will be subject to termination in accordance with Section 8.
5. ROLEX TRADEMARKS
5.1 USE OF ROLEX TRADEMARKS. Any promotional materials or other
item bearing a Rolex trademark (such as the words "ROLEX" or
"Oyster" and the Rolex Crown Emblem) furnished by Rolex
remains the property of Rolex. Consent to use the Rolex
trademarks is granted to Official Rolex Jewelers on a
limited basis only, solely for the purpose of advertising
and promoting the sale of Rolex products during the term of
this Agreement. Jeweler will not acquire, nor will it claim
any right, title or interest to the tradename or trademark
ROLEX, nor to any associated trade dress, nor to any other
trademarks, copyrights or other intellectual property owned
by Rolex.
5.2 CHANGE IN STATUS. If an account is terminated for any
reason, Rolex is entitled to the immediate return of all
promotional material and other items bearing Rolex
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trademarks (including but not limited to master catalogs,
price lists, Rolex signs, consumer catalogs, display
materials, wall clocks, letterhead, business cards and sales
receipts). Rolex will reimburse the jeweler for such items
at cost, if any. Under these changed circumstances, Rolex
will also discontinue permission for use of its trademarks
on any items (such as outdoor displays or awnings) that are
the property of the former Official Rolex Jeweler. All such
items must be fabricated in a manner that will permit easy
removal of the Rolex trademarks. The Official Rolex Jeweler
agrees that if its account is terminated, it will: (i) never
use any of the Rolex trademarks in any advertising, other
than as permitted under applicable law; (ii) never use
phrases such as "Rolex certifies" or the like; (iii) never
take any action that is likely to cause confusion as to
whether the jeweler is an Official Rolex Jeweler or
authorized Rolex sales and service provider, or is otherwise
endorsed, sponsored or approved by Rolex. The Official Rolex
Jeweler agrees that Rolex shall be entitled to appropriate
injunctive relief, in addition to damages allowed by law, in
the event that any of these provisions are not honored
promptly after termination of the business relationship.
6. RIGHT TO REPURCHASE.
6.1 If Jeweler's status as an Official Rolex Jeweler ends for
any reason, or if Jeweler terminates its business,
liquidates its inventory, or in any manner attempts to make
a bulk sale of its inventory, Rolex reserves the absolute
right, in its sole discretion, to repurchase all or part of
Jeweler's Rolex inventory at the invoiced price. Rolex shall
have the right of first refusal to repurchase such inventory
and Jeweler shall not sell, or offer to sell, or transfer
possession or ownership of such inventory to any third party
unless it has first offered to sell the inventory to Rolex
at the price specified herein and Rolex has refused such
offer. Jeweler agrees to ship all such merchandise to Rolex
on request. Jeweler has the right to sell Rolex inventory
that is not repurchased by Rolex. If Jeweler sells the
above-described Rolex inventory to any third party in
violation of Rolex's rights, Jeweler agrees to pay Rolex an
amount equal to the originally invoiced price for such
merchandise as liquidated damages. Any third party purchaser
shall take possession of the inventory subject to Rolex's
rights as specified in this Agreement. Jeweler agrees to
execute such documents as Rolex may request to effectuate
the terms of this Paragraph.
7. ADDITIONAL PROMISES AND DUTIES.
7.1 Jeweler agrees to comply with all policies and procedures as
issued by Rolex from time to time. These include, but are
not limited to: the Rolex Policy Statements (as revised
April 3, 2000); the Co-op Advertising Policy (issued in 1999
as part of The Rolex Co-op Advertising Portfolio); and the
Spare Parts Ordering Instructions and Policy Statements
(issued as part of the 1996 Spare Parts Price List). Jeweler
represents that it: (i) has received and read copies of all
the foregoing policies and procedures; and (ii) accepts all
terms of those policies and procedures.
7.1.1 Rolex reserves the unilateral right to amend any
of the terms of this Agreement, to cancel or amend
any or all policies and procedures, and to issue
new policies and procedures. Such changes shall be
effective upon notice to Jeweler, or at such other
time as Rolex may designate.
7.1.2 Within thirty (30) days of receipt of such notice,
Jeweler may opt to reject the changes by
terminating this Agreement, giving written notice
thereof to Rolex. If Jeweler places an order after
receipt of the change notice, Jeweler will be
deemed to have accepted the change in terms.
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7.2 Jeweler agrees to stock a designated basic stock plan at all
times year-round. Rolex, after consultation with Jeweler,
will select a basic stock plan (commensurate with Jeweler's
sale potential) drawn from all current Rolex lines for each
authorized location. It is expressly understood that
compliance with this provision is mandatory to retain
continued status as an ORJ. Jeweler agrees to allow Rolex
personnel to take a complete inventory of all Rolex products
in Jeweler's possession, and to review Rolex sales and
warranty records, on reasonable oral notice.
7.3 Jeweler will maintain ethical business practices, good
standing in the community and a quality establishment.
8. TERM AND TERMINATION.
8.1 This Agreement is made for an indefinite term, and will
continue at the will of the parties, unless terminated as
provided in this Agreement.
8.2 Either party may terminate this Agreement as of right,
without cause, on sixty (60) days notice, without incurring
any liability as a result for direct, incidental,
consequential or any other form of damages, including loss
of clientele, investments or profits.
8.3 In the event of a breach of this Agreement, or of any Rolex
policy or procedure, or for any other just cause, either
party may terminate the Agreement effective immediately,
upon giving written notice of termination to the other
party.
8.4 "Just cause" shall include, but not be limited to, the
following examples:
8.4.1 Failure to pay any sum when due;
8.4.2 Transshipping (both intentional and
unintentional);
8.4.3 Failure to comply with any applicable federal,
state or local law or regulation in connection
with a party's obligations under this Agreement or
in connection with the operation of its business;
8.4.4 Involvement by a party, or its owners or
employees, in any activity that could damage the
other party's reputation, or that is generally
considered immoral, illegal, or contrary to public
notice;
8.4.5 The sale, distribution or any other disposition of
substantially all of a party's assets or any
material change in its control;
8.4.6 The closing of a party's business, the liquidation
of its inventory, or the attempted bulk sale of
its inventory;
8.4.7 The filing of a petition in bankruptcy by or
against either party, or if either party is
adjudicated or become bankrupt or insolvent, or
the appointment or the application for appointment
of a receive for a party's business, or an
assignment or attempted assignment for the benefit
or creditors.
9. EFFECT OF TERMINATION. If notice of termination is given pursuant
to the terms of this Agreement, the parties will comply with all
existing obligations during the notice period. Notwithstanding
the foregoing, orders will be shipped on a pre-paid basis, and
only if Jeweler continues to comply fully with all of its
obligations under this Agreement, including being up to date on
other payments due.
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10. DISCLAIMER OF FRANCHISE OR FIDUCIARY RELATIONSHIP. Rolex does not
enter into any franchise arrangements with ORJs, and has not with
Jeweler. Jeweler expressly acknowledges that it has no right to
purchase Rolex watches from Rolex or continue its status as an
ORJ, other than as specified in this Agreement. Jeweler
acknowledges that it has not paid any fee to Rolex in exchange
for the rights granted in this Agreement, and that its rights
under this Agreement and the operation of its business are not
substantially associated with any trademark, service mark, trade
name, logo, advertising or other commercial symbol designating
Rolex or its products. Jeweler acknowledges that it does not have
a continuing financial interest with Rolex in the operating or
marketing Jeweler's business. Jeweler warrants that it does not
now, and will not in the future, rely on Rolex for a continued
supply of goods to operate its business. Jeweler acknowledges
that this is an arm's length agreement between commercial equals,
that this is not a contract of adhesion, and that Rolex does not
act as a fiduciary with respect to Jeweler.
11. MUTUAL RELEASE. The parties hereby release all claims they might
have against each other as of this date. Notwithstanding the
foregoing, this release does not apply to any claim by Rolex
relating to merchandise purchased by Jeweler for which Jeweler
has not yet paid.
12. CONFIDENTIALITY. Rolex and Jeweler acknowledge each party may
have access to and receive confidential and proprietary
information from the other, including, but not limited to,
organizational structure, business plans, marketing philosophy
and objectives, competitive advantages and disadvantages, cost
figures, sales or other financial results, vendor names and
addresses, and distributor names and addresses. It is agreed that
each party to this Agreement shall protect the confidentiality of
any information disclosed by the other party and that they will
not disclose such information, either directly or indirectly, to
any third person or entity without the prior written consent of
the other party. This confidentiality covenant has no temporal,
geographical or territorial restrictions. Notwithstanding the
foregoing, the provisions of this confidentiality provision shall
not apply to information (i) which is in the public domain other
than through a violation of this Agreement, or (ii) which is
required to be disclosed pursuant to the valid order, rule or
regulation of an administrative agency or judicial court of
competent jurisdiction, provided that each party shall notify the
other party of any disclosure required by law and provide such
other party with the opportunity to intervene and contest such
disclosure. The terms of this section shall survive the
expiration or termination of this Agreement.
13. INDEMNIFICATION AND LEGAL DEFENSE. Jeweler agrees to pay for
Rolex's reasonable costs and attorneys' fees if Rolex is sued by
any third party based on Jeweler's conduct. Jeweler will
indemnify Rolex against any damages that might be awarded in such
a claim by a third party.
14. AGREEMENT TO ARBITRATE.
14.1 Except as otherwise provided herein, Jeweler and Rolex
agree to submit all disputes between them (and/or involving
their employees, agents and affiliates, collectively
referred to in this Paragraph 14 with their respective
principals as "Jeweler" and "Rolex") to final and binding
arbitration administered by the American Arbitration
Association under its then prevailing Commercial Arbitration
Rules (except as modified herein), and judgment on the award
may be entered in any court having jurisdiction thereof. The
arbitration Agreement will apply to all disputes between
Jeweler and Rolex, whether based on contract, common law,
federal or local statute (including, but not limited to, the
Sherman Act, the Clayton Act, the Federal Trade Commission
Act, the Robinson-Patman Act, any federal or state law that
applies to franchising, and any similar state statues), or
on any other basis. Notwithstanding the above, either party
may: (i) elect, in its sole discretion, to submit any
dispute (including a counterclaim) directly and solely
involving its intellectual property rights to a state or
federal court with appropriate jurisdiction (other disputes
to be submitted to arbitration); and (ii) apply to a court
for an injunction in furtherance of arbitration proceedings
or to preserve a party's right pending an arbitral
resolution. The parties' obligations arising under this
Paragraph 14 shall survive termination of this Agreement
with respect to all disputes arising from events that
occurred prior to and including the termination.
14.2 All claims or disputes must be submitted to arbitration
(or, if applicable, filed in court) within one hundred
eighty (180) days from the date on which such claims arose,
or within such sorter time as may be required by law. Any
claim or dispute that is not so submitted or filed will be
waived, forfeited an barred forever.
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14.3 NUMBER AND QUALIFICATIONS OF ARBITRATORS. All arbitrations
will be held before a panel of three arbitrators, who shall
each have a minimum of ten years experience in their fields.
At least one of the arbitrators shall be an actively
practicing attorney experienced in the law of commercial
distribution, or dealership (except automobile), or
antitrust, who shall act as Chair.
14.4 Neither party nor the arbitrators may disclose the
existence, content, or results of any arbitration hereunder
without the prior written consent of both parties.
14.5 Arbitration will be held at the offices of the American
Arbitration Association located in New York City.
14.6 Each party shall bear its own attorneys' fees, costs and
expenses, and an equal share of the arbitrators' and
administrative fees of arbitration, except as may be
required by statute.
14.7 Except as regards enforcement of the rights specified in
Paragraphs 5 and 6 of this Agreement and paragraph D (p. 28)
of the Co-op Advertising Policy, any award in an arbitration
initiated under this Paragraph 14 shall be limited to
monetary damages and shall not include an injunction or a
direction to any party, other than a direction to pay a
monetary amount. The arbitrators will have no authority to
award punitive damages or other damages not measured by the
prevailing party's actual damages within the scope of this
Agreement. The terms of this sub-paragraph shall apply to
all disputes, except as may be required by statute.
14.8 The arbitration award shall be in writing and signed by a
majority of the arbitrators, and shall specify the factual
and legal bases for the award. An award will be subject
judicial review if the Arbitrators commit material errors of
law or exceed the scope of the authority granted to them in
this Agreement (in addition to any other reasons allowed by
law with respect to arbitral awards).
15. MISCELLANEOUS PROVISIONS.
15.1 HEADINGS. The headings herein are for convenience of
reference only and shall not be deemed to limit or affect
any of the provisions hereof.
15.2 WAIVERS. The failure or delay of a party hereto to enforce
any of its rights under this Agreement shall not be deemed a
continuing waiver or a modification by such party of any of
its rights under this Agreement. Either party may, within
the time provided by paragraph 14.4, commence appropriate
proceedings to enforce any or all of its rights under this
Agreement and any prior failure to enforce or delay in
enforcement shall not constitute a defense.
15.3 THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the
parties.
15.4 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire Agreement between
the parties and supersedes any prior understandings,
agreements, or representations by or between the parties,
written or oral, to the extent they related in any way to
the subject matter hereof.
15.5 ASSIGNMENT. Neither party may assign either this Agreement
or any of its rights, interests, or obligations hereunder
without the prior written approval of the other party.
15.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
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15.7 NOTICES. Any notice hereunder shall be served by sending
the same to the addressee, attention of its Chief Executive
Officer, at the address designated in the first introductory
paragraph of this Agreement. Any notice required or which
may be given hereunder in writing shall be deemed to have
been given:
15.7.1 when delivered to the addressee in person, on the
date delivered:
15.7.2 when emailed or faxed by means confirming receipt
(if notice is so emailed or faxed, a copy shall be
mailed by registered or certified mail and postage
prepaid), on the date the email or fax is sent;
when sent by registered or certified mail, return
receipt requested and postage prepaid, four (4)
days after the date of mailing;
15.7.3 when sent by express mail or courier service,
postage or charges prepaid, on the date of
scheduled delivery; or
15.7.4 when sent by regular mail, four (4) days after the
date of mailing.
15.8 GOVERNING LAW. Except as provided below, this Agreement, the
rights and obligations of the parties, and the resolution of
all disputes between the parties shall be governed by,
enforced and construed in accordance with the domestic laws
of the State of New York without giving effect to any choice
or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the
State of New York. To the extent that federal law would
otherwise apply with respect to intellectual property
disputes, such law shall control.
15.9 AMENDMENTS. Except as provided by Paragraph 7.1.1, this
Agreement may not be modified other than by an instrument in
writing signed by authorized representatives of both
parties. Only the President or an Executive Vice President
of Rolex shall be authorized to execute any such instrument
on Rolex's behalf.
15.10 SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any
other situation or in any other jurisdiction.
15.11 INCORPORATION OF SCHEDULES. The Schedules identified in
this Agreement are incorporated herein by reference and made
a part hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement through their duly authorized representatives on the day and
year first above written.
Rolex Watch U.S.A., Inc. Mayor's Jewelers, Inc.
By: /s/ WALTER FISCHER By: /s/ SAMUEL A. GETZ
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Title: President and CEO Title: CEO & President
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