Exhibit 10.70
STRICTLY PRIVATE AND CONFIDENTIAL
DATED ________________ 1998
PAUL SMITH LIMITED (1)
-and-
INTER PARFUMS S.A. (2)
-and-
JEAN-PHILIPPE FRAGRANCES (3)
LICENCE AGREEMENT
FREETH CARTWRIGHT HUNT DICKINS
Solicitors
Express Buildings
29 Upper Parliament Street
Nottingham
NG1 2AQ
DX 10017 Nottingham
Telephone (0115) 9369369
Facsimile (0115) 9350352
THIS AGREEMENT is made the _______ day of __________ 1998
- - --------------
BETWEEN:
(1) PAUL SMITH LIMITED whose registered office is situate at Riverside
Buildings Riverside Way Nottingham England ("the Grantor");
(2) INTER PARFUMS S.A. a corporation duly organised and existing under the
laws of France with its principal office at 4 Rond Point des Champs
Elysees, 75008 Pan's (B350 219 382) ("the Licensee"); and
(3) JEAN-PHILIPPE FRAGRANCES INC. a corporation duly organised and existing
under the laws of Delaware with its principal office at 551,5 th Avenue
New York NY 10176 ("the Guarantor")
WHEREAS:
A. The Grantor designs and manufactures quality clothing and accessories
in the United Kingdom and in other countries
B. The Grantor owns the Trademarks consisting of "PAUL SMITH" and "PS PAUL
SMITH" used alone and in a logo design and has registered the
Trademarks in respect of fragrances in the countries specified in
Exhibit A.
C. The Licensee manufactures and sells perfumes and fragrances throughout
the world.
D. The Licensee wishes to manufacture advertise promote and sell
fragrances under the Trademarks in the Licensed Territory.
E. The Grantor is prepared to grant and the Licensee to take a licence in
the Licensed Territory to manufacture, advertise, promote and sell
fragrances under the Trademarks on the terms and for the consideration
hereinafter appearing
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1. In this Agreement the following words and phrases shall have
the following meanings unless the context clearly requires
otherwise
1. 1. 1. "Affiliated Distributors"
Shall mean distributors of the Licensee in which
either the Licensee or the Guarantor either holds
more than 50% of the share voting rights or otherwise
has effective control.
1.1.2. "Business"
Shall mean that part of the business of the Licensee
which involves the manufacture and/or distribution of
the Licensed Products (or any part or parts thereof).
1.1.3. "Business Day"
Shall mean any day which is not a Saturday not a
Sunday and not a recognised public holiday in either
the Grantor's or the Licensee's country.
1.1.4. "Calendar Quarter"
Shall mean a three monthly period commencing on the
first day of each of the months of January, April,
July and October in every year of the Term.
1.1.5. "Contract Year"
Shall mean each of the following twelve (12) years: -
First Contract Year
The period from the 1st day of January 1999 to the
31st day of December 1999;
Second Contract Year
The period from the 1st day of January 2000 to the
31st day of December 2000;
Third Contract Year
The period from the 1st day of January 2001 to the
31st day of December 2001;
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Fourth Contract Year
The period from the 1st day of January 2002 to the
31st day of December 2002;
Fifth Contract Year
The period from the 1st day of January 2003 to the
31st day of December 2003;
Sixth Contract Year
The period from the 1st day of January 2004 to the
31st day of December 2004;
Seventh Contract Year
The period from the 1st day of January 2005 to the
31st day of December 2005;
Eighth Contract Year
The period from the 1st day of January 2006 to the
31st day of December 2006;
Ninth Contract Year
The period from the 1st day of January 2007 to the
31st day of January 2007;
Tenth Contract Year
The period from the 1st day of January 2008 to the
31st day of January 2008;
Eleventh Contract Year
The period from the 1st day of January 2009 to the
31st day of December 2009;
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Twelfth Contract Year
The period from the 1st day of January 2010 to the
31st day of December 2010;
1.1.6. "Excluded Duty Free Outlets"
Shall mean such duty free outlets as may be notified
from time to time by the Grantor to the Licensee
pursuant to clause 6.11 of this Agreement.
1.1.7. "Intellectual Property Rights"
Shall mean all copyrights, registered and
unregistered design rights, patents, trademarks and
all other rights
1.1.8. "Licensed Products"
Shall mean the Products manufactured by or for and
sold by the Licensee and/or any sub licensee of the
Licensee under the Trademarks
1.1.9. "Licensed Territory"
Shall mean the world (excluding the Excluded Duty
Free Outlets)
1.1.10. "Minimum Royalty"
Shall mean
(a) in the First Contract Year there
shall be _____ Minimum Royalty;
(b) in the Second Contract Year a
Royalty of at least
__________________________________
French Francs;
(c) in the Third Contract Year a
Royalty of at least
__________________________________
French Francs;
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(d) in the Fourth Contract Year a
Royalty of at least _____ French
Francs;
(e) in the Fifth Contract Year a
Royalty of at least ________ French
Francs; and
(f) in the Sixth Contract Year and
every subsequent Contract Year of
the Term means the higher of
(i) _______ francs; and
(ii) such other amount as the
Grantor and the Licensee,
negotiating in good faith
shall agreed during the
Fifth Contract Year.
1.1.11. "Royalty"
Shall mean the royalty payable by the Licensee to the
Grantor under clause 5.1 of this Agreement.
1.1.12. "Products"
Shall mean men's and women's and children's
fragrances and cosmetics and related packaging and
promotional materials.
1.1.13. "Restricted Information"
Shall mean any information which is disclosed to
either party to this Agreement by the other pursuant
to or in connection with this Agreement (whether
orally or in writing and whether or not such
information is expressly stated to be confidential or
marked as such)
1.1.14. "Term"
Shall mean the term of this Agreement being the
period of twelve years commencing on lst January 1999
and expiring on 31st December 2010.
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1.1.15. "Trademarks"
Shall mean the trademarks "PAUL SMITH" and "PS PAUL
SMITH" and in each case used with such other
additional word or words as may be approved by the
Grantor in writing from time to time.
1.1.16. "Turnover"
Shall mean aggregate gross sales of each of the
Licensed Products sold by the Licensee (or, if the
price of any Licensed Product re-sold by an
Affiliated Distributor shall be higher than the price
at which the Licensed Product was sold to the
Affiliated Distributor by the Licensee then the
aggregate sales of each such Licensed Product sold by
the Affiliated Distributors shall be substituted for
the gross sales of such Licensed Products by the
Licensee to the Affiliated Distributors) and/or its
sub-licensees to customers in the Licensed Territory
(whether by wholesale or retail and including sales
to the Grantor and its licensees) less:
(a) actual trade discounts and other
discounts approved of in writing by
the Grantor and allowed to
customers (but excluding early
settlement discounts);
(b) returns and credits actually
granted to customers (but excluding
bad debts);
(c) point of sale items (including
gifts, samples and testers given to
customers and show cards);
(d) any commodity or consumption taxes
imposed on the Licensee or (as the
case may be) the Affiliated
Distributors by any Government
within the Licensed Territory in
respect of the Licensed Products;
and
(e) shipping and insurance costs borne
by the Licensee or (as the case may
be) the Affiliated Distributors in
the supply of the Licensed Products
to their customers.
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1.2. Index Linked
In this Agreement where any figure is followed by the words
"(Index Linked)" such figure shall be deemed to be
automatically increased on each anniversary of the date of
this Agreement in line with any increase in indice des prix de
detail since the immediately preceding anniversary of the date
of this Agreement.
2. GRANT
2.1. The Grantor hereby grants to the Licensee throughout the Term
the right to manufacture, advertise, promote, sell and
distribute the Licensed Products in the Licensed Territory and
subject to the provisions of this Agreement to use the
Trademarks only in connection therewith.
2.2. This Licence is an exclusive licence throughout the Licensed
Territory with respect to the Licensed Products and neither
the Grantor itself nor any third party licensed by the Grantor
shall have the right to advertise, promote, manufacture, sell
or distribute, nor cause the advertising, promotion,
manufacture of, sale or distribution of any items or material
directly competitive with any Licensed Product within the
Licensed Territory other than the resale of the Licensed
Products by the Grantor of Licensed Products purchased from
the Licensee or any Affiliated Distributor or any sub-licensee
of the Licensee PROVIDED THAT the Grantor shall not be deemed
to be in breach of the terms of this Agreement if it shall
continue to sell or otherwise distribute fragrances,
moisturisers, talcum powder and/or toothpaste prior to the
commercial launch by the Licensee of each such line of
Licensed Products nor by the sale or other distribution of
stocks of such lines held by or on behalf of the Grantor at
the date of the commercial launch by the Licensee of each such
line of Licensed Products.
2.3. The Licensee shall launch for commercial sale a men's line and
a women's line of the Licensed Products in the Licensed
Territory within the first eighteen months of the Term such
lines to be distributed to similar levels as the Grantor's
competitors' products at the appropriate level in the
following countries within the first Three Contract Years:-
United Kingdom, Japan, United States of America, Canada,
Spain, Portugal, France, Germany, Austria, Italy, Belgium,
Luxembourg, Netherlands, Norway, Finland, Sweden, Denmark,
Hong Kong, Singapore, Taiwan and Australasia.
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Other lines of Licensed Products (including without limitation
a line of Licensed Products for children) shall be launched
for commercial sale at such times as may be mutually agreed
between the Grantor and the Licensee.
3. VALIDATION
Each party hereto shall at its own expense do all things appropriate to
its status as Grantor or as Licensee and necessary for the purpose of
rendering this Agreement valid and enforceable.
4. COMMENCEMENT AND DURATION
4.1. Unless sooner terminated by Clauses 9.3. or 10 hereof this
Agreement shall continue in force from the date hereof to the
expiry of the Term.
4.2. The parties shall commence negotiations in the Ninth Contract
Year regarding the renewal of this Agreement at the end of the
Term.
5. FINANCIAL PROVISIONS
5.1. Royalties
In each Contract Year of the Term the Licensee shall pay to
the Grantor whichever shall be the greater of the Minimum
Royalty or a royalty at the following rates:-
5.1.1. on annual Turnover of up to (and including)
_____________ French Francs (Index Linked) - ___ of
the Turnover of the Licensed Products sold by the
Licensee and (as the case may be) Affiliated
Distributors; and
5.1.2. on annual Turnover of over _____________ French
Francs (Index Linked) and up to (and including)
___________________ French Francs (Index Linked) - __
of the Turnover of the Licensed Products sold by the
Licensee and (as the case may be) Affiliated
Distributors in excess of ______________ French
Francs (Index Linked);
5.1.3. on annual Turnover of over ______________ French
Francs (Index Linked) and up to (and including)
______________________ French Francs (Index Linked) -
___ of the Turnover of the Licensed Products sold by
the Licensee and (as the case may be)
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Affiliated Distributors in excess of
___________________ French Francs (Index Linked); and
5.1.4. on annual Turnover of over _____________________
French Francs (Index Linked) - ___of the Turnover of
the Licensed Products sold by the Licensee and (as
the case may be) Affiliated Distributors in excess of
____________ French Francs (Index Linked).
5.2. The Licensee shall on the date of this Agreement pay to the
Grantor the sum of ___________French Francs on account of the
Royalty payable under this Agreement which shall not be
refundable in any circumstances.
5.3. Within thirty (30) days of the end of each Calendar Quarter in
every year of the Term the Licensee shall pay to the Grantor
whichever shall be the higher of the Minimum Royalty or the
Royalty payable to the Grantor by reference to the Turnover
during the immediately preceding Calendar Quarter (credit
being given for the advance payment of royalty referred to in
clause 5.2 until the aggregate Royalty payable under this
Agreement shall exceed the amount of the advance payment).
5.4. Records
5.4.1. The Licensee shall keep at its usual place of
business books of account relating exclusively to the
sales of the Licensed Products and of the amount
spent by the Licensee on advertising the Licensed
Products and containing such true entries complete in
every particular as may be necessary or proper for
enabling the amount of the Royalty and other payments
and amounts hereby reserved or payable to be
conveniently ascertained; and
5.4.2. The Licensee shall permit the duly authorised
representatives of the Grantor at the Grantor's
expense to inspect the said books and all other
relevant books of account of the Licensee and to take
copies thereof and shall procure that the Affiliated
Distributors and sub-licensees of the Licensee shall
permit the duly authorised representatives of the
Grantor at the Grantor's expense to inspect the
business books of account and all other relevant
books of account of the Affiliated Distributors and
sub licensees of the Licensee not more than once in
each Contract Year (unless such inspection shall
establish that the amount of the Royalty paid to the
Grantor in respect of the period covered by the
inspection is inaccurate by 5% or more of the amount
properly payable the
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Grantor shall be entitled to undertake subsequent
inspections without any limitation on the number or
their frequency) and to take copies thereof and the
Licensee shall give all such other information as may
be necessary or proper to enable the amount of the
Royalty and other payments payable hereunder to be
ascertained as aforesaid at any time during usual
business hours. If the inspection established that
the amount of the Royalty paid to the Grantor in
respect of the periods covered by the inspection is
inaccurate by 5% or more of the amount properly
payable the Licensee will pay on demand the Grantor
the costs of that inspection. If the inspection
established that the amount of the Royalty paid to
the Grantor is inaccurate then the amount of any
Royalty underpaid together with compound interest at
the rate of 4% above the base rate for the time being
of Barclays Bank plc from the date the underpayment
should have been made until the date of actual
payment.
5.5. Reports
5.5.1. The Licensee shall deliver to the Grantor every
Calendar Quarter in each year of the Term a true and
complete statement in writing of all Licensed
Products sold in the Licensed Territory by the
Licensee, the Affiliated Distributors and any sub
licensees of the Licensee during the immediately
preceding Calendar Quarter together with the sales
prices of such Licensed Products.
5.5.2. The Licensee shall deliver to the Grantor every
alternate Calendar Quarter in each year of the Term a
true and complete statement in writing of all amounts
spent by the Licensee in advertising the Licensed
Products in the Licensed Territory in the two
immediately preceding Calendar Quarters.
5.6. Authority to make Payment
If at any time during the continuation of this Agreement the
Licensee is prohibited from making any of the payments
hereunder reserved without appropriate authority then the
Licensee will forthwith inform the Grantor of such prohibition
and commence and diligently pursue all necessary steps to
secure from the appropriate authority permission to make the
said payments and pending the obtaining of such permission
shall place all payments to be made hereunder in an interest
bearing bank account and will pay all such payments together
with interest earned thereon to the Grantor within seven days
of receiving such permission.
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5.7. Place and Currency of Payment
All sums due and payable hereunder shall be payable in London
in French Francs unless the Grantor directs payment in some
other place or currency.
5.8 Rate of Exchange
The conversion rate of one currency to any other currency
shall be the rate of exchange of an authorised British foreign
exchange bank on the day of actual payment. Any dispute over
the rate of exchange will be determined by the certificate of
a Banker of repute nominated by the Grantor.
5.9. Deductions
Any taxes levied by the government of France upon the payments
to be made by the Licensee to the Grantor pursuant to this
Agreement and required to be withheld by the Licensee from
such payments shall be borne by the Grantor and shall be
withheld and paid by the Licensee to the appropriate
authority. The Licensee shall supply the Grantor promptly
after each tax payment official tax receipts and other
evidence of payment issued by the French tax authorities. In
the event that the rate of French withholding taxes changes at
any time during the continuance of this Agreement then the
parties hereto shall be at liberty to re-negotiate and settle
in writing the terms of payment.
6. LICENSEE'S COVENANTS
The Licensee covenants with the Grantor:
6.1. Trademarks
Except as provided by the licence granted under this Agreement
nothing herein or otherwise shall give to the Licensee any
right title interest or claim in or to the Trademarks. The
Trademarks shall continue to be the Grantor's exclusive
property during the period of this Agreement and after its
termination or expiration or otherwise. Any and all uses of
the Trademarks by the Licensee shall inure to the benefit of
Grantor only. In the event the Licensee files an application
to register or receives a registration of any trade name
trademark or service mark comprising or including the words
"PAUL SMITH" or "PS PAUL SMITH" such application for
registration shall have been filed as a constructive trust on
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behalf of the Grantor and the Licensee filing or receiving the
same shall sign all documents necessary to establish record
ownership in the Grantor.
6.2. To promote Sales
6.2.1. To use its best endeavours to promote sales of the
Licensed Products within the Licensed Territory and,
together with its distributors, to spend in each year
of the Term not less than:-
(a) in the Second and Third Contract Years,
__________ French Francs in aggregate; and
(b) in the Fourth Contract Year and every
subsequent Contract Year of the Term, ___ of
the Turnover of the Licensed Products sold
by the Licensee and/ or the Affiliated
Distributors in such Contract Year
in advertising the Licensed Products throughout the
Licensed Territory. For the purpose of this clause
and of clause 5.5.2 of the Agreement the word
"advertising" shall include gifts with purchase,
point of sale items and the cost of producing and
placing advertisements but shall exclude the cost of
promotional staff in stores.
6.2.2. To arrange for the Licensed Products to be
manufactured on commercial scales.
6.2.3. To meet the demand for the Licensed Products in the
Licensed Territory.
6.3. Marking
All Licensed Products made by or on behalf of the Licensee and
any sub licensee of the Licensee shall be marked with one of
the Trademarks in conformity with the following principles
unless the Grantor agrees otherwise in writing:-
6.3.1. The general style of the marking shall conform with
that developed and adopted by the Grantor;
6.3.2. Each Licensed Product shall bear one of the
Trademarks in such place as shall have been approved
in writing by the Grantor but not anywhere else;
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6.3.3. The markings shall comply with the laws of the
Licensed Territory where the Licensed Products are to
be sold.
Subject to the above principles the final decision on the form
of any marking on the Licensed Products shall be made by the
Grantor after consultation with the Licensee.
Save as aforesaid to make no other use of or claim any right
in either of the Trademarks owned by the Grantor except as
expressly permitted by the Grantor and not to use either of
the Trademarks on any goods not being Licensed Products.
6.4. Quality
6.4.1. The Licensed Products manufactured by or for the
Licensee and any sub licensee of the Licensee shall
be of the best quality and shall use only the best
quality materials and components.
6.4.2. As required by the Grantor to submit to the Grantor
free of charge specimen samples of each type of
Licensed Product (including, without limitation
packaging and related items) as manufactured by or
for the Licensee and any sub licensee of the Licensee
immediately prior to each type of Licensed Products
being offered for sale and if requested by the
Grantor to cease to sell or offer for sale or to
permit the sale or offering for sale of any Licensed
Products whose sample supplied to the Grantor is not,
in the opinion of the Grantor, of satisfactory
quality.
6.4.3. To permit duly authorised representatives of the
Grantor to inspect the premises in which the Licensed
Products are manufactured, stored or packed by or for
the Licensee and/or any sub licensee of the Licensee.
6.4.4. To ensure that all Licensed Products submitted for
inspection are selected at random and are made by the
ordinary production methods.
6.4.5. To manufacture the Licensed Products at the
Licensee's own factories or at factories which have
been approved in writing by the Grantor and whose
quality standards are no less than those of the
Licensee.
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6.5. Independent Contractor and Risk
That all aspects of the manufacture, distribution and sale of
the Licensed Products by the Licensee and any sub licensee of
the Licensee shall be at the risk and responsibility and for
the account of the Licensee or sub licensee (as the case may
be). The Licensee and any sub licensee of the Licensee shall
act as independent contractors and the Grantor shall not be
responsible for any breach by the Licensee or any sub licensee
of the Licensee of any obligations imposed by law on the
Licensee or any sub licensee of the Licensee in its capacity
as an employer or as manufacturer distributor and seller of
Licensed Products. The Licensee shall indemnify the Grantor
against all actions claims demands costs charges and expenses
arising out of or in connection with the manufacture use or
sale of the Licensed Products made by or for the Licensee or
any sub licensee of the Licensee.
6.6. Information
6.6.1. To keep the Grantor informed of all Laws Orders or
Regulations made at any time by the Government or any
Public or Local Authority within the Licensed
Territory in any way affecting or in the Licensee's
opinion likely to affect materially the terms of this
Agreement or the manufacture or sale of the Licensed
Products in the Licensed Territory as soon as the
Licensee becomes aware of any such Law Order or
Regulation.
6.6.2. To keep all Restricted Information confidential and
accordingly except as otherwise required by law not
to disclose any Restricted Information to any other
person and not to use any Restricted Information for
any purpose other than the performance of the
Licensee's obligations under this Agreement.
6.7. Take over
That within thirty days of the happening of such an event the
Licensee will give notice to the Grantor of the acquisition of
twenty five per cent (25%) or more of any of the share voting
nights in the Licensee by any person firm or corporation or
group of persons firms or corporations acting in concert
directly or indirectly.
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6.8. Advertising Material
6.8.1. Twice in each Contract Year to submit to the Grantor
free of charge specimen samples of all labels,
brochures, advertisements and publicity material
relating to the use of the Trademarks by the Licensee
proposed to be used by the Licensee in the following
six month period and not to use such material until
the Grantor or its designated agent has certified its
approval in writing. All artwork for advertisements
shall be provided by the Grantor to the Licensee at
the Grantor's normal commercial rates.
6.8.2. Not to appoint an advertising agency in respect of
the Licensed Products without the consent in writing
of the Grantor.
6.9. Sales to the Grantor
The Licensee shall sell to the Grantor the Grantor's
requirements for the Licensed Products for resale in retail
shops owned by the Grantor and for sale to the Grantor's
franchisees upon the Licensee's standard terms and conditions
of sale for the time being in force and at the Licensee's
normal wholesale prices less a discount of 20%.
6.10. Sales Outlets and distribution
6.10.1. To sell the Licensed Products only through high
quality retail outlets approved in writing by the
Grantor (where practicable) prior to acceptance by
the Licensee of the outlet's first order and
otherwise immediately after acceptance by the
Licensee of the outlet's first order and if the
Grantor so requests not to sell or as soon as
practicable to cease selling through any particular
outlet to which the Grantor objects on any ground
whatsoever including (but without prejudice to the
generality of the foregoing) that the style of the
operation of any of the retail outlets does not
conform with the standards associated with the
Trademarks.
6.10.2. To distribute the Licensed Products in accordance
with a distribution policy previously agreed in
writing by the Grantor prior to the launch of each
line of the Licensed Products.
6.10.3. To exploit the Licensed Products on an arm's length
bona fide commercial basis and not in any
circumstances to dispose of the Licensed Products to
any outlet in respect of which it has any interest or
ownership save at the usual commercial wholesale
rates.
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6.11. Duty Free Outlets
The Licensee will not distribute the Licensed Products (or any
range of the Licensed Products) to any duty free outlets in
the Licensed Territory notified in writing by the Grantor to
the Licensee from time to time.
6.12. Japan
Not to sell or distribute the Licensed Products in Japan
otherwise than through the distributorship of a distributor
approved of in writing by the Grantor from time to time.
6.13. Intellectual Property
6.13.1. To hold, as bare trustee for the Grantor all
Intellectual Property Rights of the Licensee in the
Licensed Products (including, without limitation any
Intellectual Property Rights in the Licensed Products
arising in the future) and their constituent parts
and at the Grantor's request to assign such
Intellectual Property Rights to the Grantor without
compensation.
6.13.2. If the Licensee commissions, engages or employs any
third party to create or originate any materials or
work in connection with this Agreement in relation to
which Intellectual Property Rights may be created,
the Licensee shall procure that such third party will
execute and deliver to the Grantor prior to any such
works or materials being created a properly executed
letter from such third party in the form set out in
the draft letter annexed to this Agreement or in such
other form as may be notified by the Grantor.
6.14. Insurance
6.14.1. To obtain and maintain adequate liability insurance
of not less than (pounds) 2 million per claim in
respect of claims arising out of any alleged defects
in the Licensed Products or their use
6.14.2. To furnish evidence of such insurance to the Grantor
promptly following signature of this Agreement and
prior to the sale or distribution of any of the
Licensed Products. The Licensee shall instruct its
insurers in writing (with a copy to the Grantor) to
notify the Grantor directly in the event that the
insurance shall lapse or
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cease. The Licensee shall notify the Grantor of all
claims made to it and notified to its insurers
relating to the Licensed Products.
6.15. Sub Licence Agreements
6.15.1. Not to grant any sub licence of the rights hereby
granted without the prior consent of the Grantor nor
without submitting the proposed sub licence agreement
to the Grantor for the Grantor's approval and
(without limitation to the generality of the
foregoing) to include in any sub licence agreement it
may enter into pursuant to the obtaining of such
consent:-
(a) Covenants by the sub licensee to observe and
perform the terms and conditions contained
in clauses 6.1 to 6.14 inclusive hereof and
clause 8.1 hereof so far as the same in the
opinion of the Grantor are applicable to and
capable of observance and performance by
such sub licensee
(b) Provision for determination as hereinafter
contained in clause 10 and for ipso facto
determination in the event of and
contemporaneously with the determination of
this Agreement and the licence granted
hereunder.
(c) Provision for determination in the event of
the acquisition of fifty per cent (50%) or
more of any of the share voting rights in
the sub licensee or in any holding company
of the sub licensee being (in either case) a
private limited company (but not a public
limited company) by any person firm
corporation or group of persons firms or
corporations acting in concert directly or
indirectly.
6.15.2. To strictly enforce the performance by any sub
licensee of the Licensee of the terms of the relevant
sub-licence agreement.
7. GRANTOR'S COVENANTS
The Grantor covenants with the Licensee:
7.1. Meetings
7.1.1. A representative of the Grantor shall meet with the
executive officers of the Licensee at least twice in
each Contract Year in London in England to inform the
Licensee of developments within
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the Grantor's business and of its designs for its
other product ranges and details of trade marks
applied for and registered and to suggest to the
Licensee themes and ideas for the development of the
Licensed Products and for the advertisement and
promotion of the Licensed Products.
7.1.2. The Grantor shall procure that Mr. Paul Smith shall
(during his life) be available to meet with
representatives of the Licensee to discuss
development of the Licensed Products for one half day
per month during the first eighteen months of the
Term and thereafter at times to be mutually agreed
between the Grantor and the Licensee.
7.1.3. The Licensee shall bear the reasonable travelling
(first class air fares for Directors of the Grantor -
Business Class for other employees and consultants of
the Grantor) and subsistence costs of the Grantor's
representatives attending such meetings in pursuance
of this covenant and of any other meetings arranged
between representatives of the Grantor and of the
Licensee.
7.2. Personal Appearances
The Grantor shall procure the personal appearance of Mr Paul
Smith (during his life) at a limited number of events to be
agreed between the parties provided that the time and place of
such appearance shall have previously been confirmed by the
Grantor. The Licensee shall bear the reasonable travelling
(first class air fares for Directors of the Grantor -Business
Class for other employees and consultants of the Grantor) and
subsistence costs of the Grantor's representatives attending
such events in pursuance of this covenant
7.3. Restricted Information
To keep all Restricted Information confidential and
accordingly except as otherwise required by law not to
disclose any Restricted Information to any other person and
not to use any Restricted Information for any purpose other
than the performance of the Grantor's obligations under this
Agreement
8. ASSIGNABILITY
8.1. The Licensee shall not have power at any time to assign this
Agreement or the whole or parts of its interest therein or in
any way charge mortgage or
18
deal with the rights hereby granted except with the written
consent of the Grantor. The grant to the Licensee herein
contained shall be deemed to be by way of licence only and
shall not confer on the Licensee any interest or rights in the
Trademarks.
8.2. The Licensee shall have the right to sell the Business with
the prior written consent of the Grantor and subject to the
conditions listed in sub-clause 8.3.
8.3. The conditions required to obtain the written consent of the
Grantor to the sale of the Business by the Licensee shall be
that:-
8.3.1. any proposed purchaser shall submit his offer in
writing and shall be bona fide and at arms' length
and shall meet the Grantor's standards with respect
to business experience, financial status, character
and ability;
8.3.2. the Licensee must at the time of its application for
consent not be in breach of any of its obligations to
the Grantor under the terms of this Agreement-,
8.3.3. the Grantor shall be satisfied that the proposed
purchaser has adequate financial resources to perform
the obligations of licensee under this Agreement and
to enable it to trade profitably. The Grantor in so
satisfying itself shall not be taken to be making any
representations or giving any warranties to such
prospective purchaser;
8.3.4. payment is made by the Licensee of all costs and all
obligations by or of the Licensee to the Grantor are
discharged without any right of deduction or set-off,
and
8.3.5. the prospective purchaser offers to enter into a
licence agreement with the Grantor on the same terms
as this agreement for the unexpired period of the
Term.
8.4. The Licensee shall as soon as possible inform the Grantor of
its desire to sell the Business and submit to the Grantor a
copy of each written offer received from any proposed
purchaser to purchase the Business from the Licensee together
with:-
8.4.1. a financial statement of affairs and the business
history of the proposed purchaser; and
19
8.4.2. details of any other terms which may have been agreed
between the Licensee and the proposed purchaser.
8.5. Upon receipt of such notice accompanied by such items the
Grantor shall in addition to its other rights hereunder have
an option to purchase the Business for the same amount and
upon the same terms as the proposed purchaser has offered
(even if the Licensee subsequently receives a higher bid for
the Business). The Grantor shall have a period of fifteen (15)
days after receipt of such written notice and other items to
exercise its option to purchase by notice in writing to the
Licensee. The sale and purchase shall be completed within 75
days following the service of the Grantor's notice. The
Licensee shall notify the Grantor of any variation in the
terms offered by any prospective purchaser and the said period
of fifteen (15) days shall re-commence as from the date of
such notification of a variation in the offered terms. In this
clause the expression "the Business" shall include all assets
employed in or about the conduct of the Business including the
freehold or leasehold interest under which the Licensee
occupies any premises used in the Business.
8.6. If the Grantor shall not exercise the option hereinbefore
contained the Licensee shall be entitled within the period of
six months thereafter to proceed with its application to sell
the Business to a proposed purchaser upon the same or no more
favourable terms to the purchaser than those notified to Paul
Smith pursuant to sub-clause 8.4 hereof.
8.7. Upon the Grantor exercising the option contained in sub-clause
8.5 hereof and upon the satisfaction of the conditions
referred to in sub-clause 8.3 hereof the Grantor and the
Licensee shall each be deemed to have released the other from
the terms of this Agreement save for those provisions which by
their nature or effect survive termination. In addition the
Licensee shall be deemed to have released and discharged the
Grantor from and against all claims and demands whether or not
contingent which the Licensee may have against the Grantor
arising from this Agreement or otherwise in any way out of the
relationship between the Grantor and the Licensee.
8.8. For the purpose of this clause any change in the beneficial
ownership of the issued share capital or of the de facto
control of the Licensee shall be deemed to be an assignment.
8.9. Notwithstanding the previous provisions of this clause the
Licensee shall be permitted to assign the benefit, but subject
to the burden, of this
20
Agreement to another limited company of comparable financial
standing to the Licensee which is owned (in its entirety) by
either the Guarantor or the Licensee without the prior written
approval of the Grantor subject only to the assignee company
entering into a deed of adherence with the Grantor agreeing to
be bound by the agreements on the part of the Licensee
contained in this Agreement and agreeing to re-assign this
Agreement to the Licensee in the event of the company ceasing
to be wholly owned by the Licensee or the Guarantor. The deed
of adherence shall be prepared by the solicitors of the
Grantor at the cost of the Licensee and on the completion of
such deed of adherence the Grantor shall release the Licensee
named in this Agreement from any liability for any future
breach of the terms of this Agreement.
9. SUPERVENING LAWS AND FORCE MAJEURE
9.1. The rights and obligations of the parties hereto under this
Agreement shall be subject to all applicable laws orders
regulations directions restrictions and limitations of
Governments or other bodies having jurisdiction over the
parties hereto.
9.2. If any such law order regulation direction restriction or
limitation as aforesaid or any treaty or other international
agreement or the final judicial construction of any of them
shall after the date of the execution hereof substantially
alter the relationship between the parties hereto or the
advantages derived from such relationship then the parties
shall on request from the adversely affected party modify this
Agreement to restore the situation if practicable or to
compensate for such alteration. If the parties are unable to
agree on such a modification within three months after the
notice of request has been received by the party not affected
then either party may refer the matter for determination by
the courts in conformity with clause 13 to the intent that the
court shall decide on such modifications or if they are unable
to do so shall make such order as seems to them just and
equitable in all the circumstances of the case.
9.3. If there is any total or partial failure of performance
hereunder by either party occasioned by strikes lockouts
combinations of workmen or any cause whatsoever beyond the
reasonable control of the party thereby affected then once the
cause has been notified by that party to the other such
failure shall not be deemed to be a breach of this Agreement
which shall continue in suspense or part performance for the
period during which such cause exists. As soon as practicable
after such notification the parties shall consult together to
decide how if at all the effects of the force majeure can be
mitigated. If the cause of such suspension or partial
21
performance exists for a period of more than six (6) months
and substantially affects the operation of this Agreement then
the party not claiming relief under this clause shall be at
liberty to terminate this Agreement on giving to the other
thirty (30) days' notice of its intention to do so and this
Agreement shall terminate on expiration of such notice.
10. TERMINATION
10.1. The Grantor may terminate this Agreement summarily by written
notice to the Licensee if.-
10.1.1. the Licensee or the Guarantor or any sub licensee of
the Licensee becomes insolvent or make any
arrangement or composition with its creditors or
become for any reason whatsoever legally permitted
not to pay its debts as they fall due or ceases to
exist as a separate legal entity or has an
administrative receiver or manager or administrator
appointed or does or suffers any act or thing
equivalent to any of the above;
10.1.2. the Licensee or the Guarantor or any sub licensee of
the Licensee fails to pay:-
(a) each instalment of the Royalty to the
Grantor that falls due within 7 days of the
due date for payment; or
(b) any sum (other than the Royalty) to the
Grantor that falls due within 7 days of
written notice from the Grantor to the
Licensee that the sum is due (or overdue)
for payment;
10.1.3. the Licensee grants a sub-licence of this Agreement
or a sub licensee of the Licensee assigns or grants a
sub licence of its sub licence without the necessary
consent of the Grantor or purports to do so;
10.1.4. the Licensee or any sublicensee of the Licensee is
deprived of or disposes of its business or a
substantial part thereof, "substantial" for the
purposes of this sub-clause meaning a part
which in the last accounting year of the entity
represented 35% or more of the relevant entity's
turnover;
10.1.5. the Licensee or the Guarantor or any sub licensee of
the Licensee has any restriction or limitation placed
on the existing powers of its
22
directors to manage its business or on the powers of
its shareholders to elect those directors;
10.1.6. the Licensee commits any breach of this Agreement
(other than an obligation on the part of the Licensee
to pay any sum that falls due to the Grantor) and the
Licensee fails to commence to remedy or procure its
remedy within thirty (30) days of the Licensee having
received written notice from the Grantor requiring it
to do so and to have failed to complete the remedying
of such breach or to pay adequate compensation if the
breach cannot be remedied within sixty (60) days of
the receipt of such notice;
10.1.7. the Licensee fails in any year of the Term to pay the
Minimum Royalty;
10.1.8. the Guarantor ceases to retain (directly or
indirectly) more than 51% of the share voting rights
in the Licensee.
10.2. The Licensee may terminate the Agreement summarily by written
notice to the Grantor if the Grantor commits any breach of
this Agreement and fails to remedy it or pay adequate
compensation if the breach cannot be remedied in either case
within sixty (60) days of the Grantor having received written
notice from the Licensee requiring it to do so.
11. RESIDUAL RIGHTS AND OBLIGATIONS
11.1. Termination for any reason of this Agreement shall be without
prejudice to any rights of either party against the other
arising out of events occurring before the date of such
termination.
11.2. Where this Agreement ends or is terminated on any ground all
the Licensee's rights hereunder shall thereupon terminate
shall not thereafter be concerned with the Licensed Products
whether by way of manufacture sale or otherwise.
11.3. Save as is hereinbefore set forth all rights and obligations
of the parties under this Agreement shall cease upon its
termination or expiry.
11.4. At the termination of the Agreement the Licensee shall
immediately cease and refrain from using the Trademarks or any
colourable imitation thereof in any trade name or on any goods
or in the advertising or promotion of any goods or services.
23
12. GUARANTEE PROVISIONS
12.1. In consideration of the Grantor entering into this Agreement
with the Licensee at the request of the Guarantor, the
Guarantor hereby unconditionally and irrevocably guarantees to
the Grantor the full, prompt and complete payment by the
Licensee of all sums due to the Grantor pursuant to this
Agreement and the due and punctual performance by the Licensee
of all its obligations hereunder.
12.2. The guarantee contained in this Clause 12 is a continuing
guarantee and shall remain in force until all the obligations
of the Licensee under this Agreement have been fully performed
and all sums payable by the Licensee have been fully paid.
12.3. The Grantor may without any consent from the Guarantor and
without affecting the Guarantor's liability hereunder grant
time or indulgence to or compound with the Licensee or any
other person and the guarantee contained in this Clause shall
not be discharged nor shall the Guarantor's liability under it
be affected by anything which would not have discharged or
affected the Guarantor's liability if the Guarantor had been a
principal debtor or principal obligor to the Grantor instead
of a Guarantor.
12.4. If the Guarantor is unable to procure that the Licensee duly
and punctually performs its obligations hereunder then it
shall indemnify the Grantor in respect of all costs, damages.
charges and expenses incurred or suffered by the Grantor as a
result of any of the obligations of the Licensee under this
Agreement being or becoming void, voidable, unenforceable or
ineffective as against the Licensee for any reason, whether or
not known to the Grantor, the amount of such loss being the
amount which the Grantor would otherwise have been entitled to
recover from the Licensee.
12.5. It shall not be necessary, prior to seeking payment or
indemnification from the Guarantor under this guarantee, for
the Grantor to pursue or prosecute any claim it may have
against the Licensee and after any default by the Licensee the
Grantor may at any time make claims and/or take action
(whether in the Courts or otherwise) against the Guarantor as
if the Guarantor was a principal obligor to the Grantor under
this Agreement having joint and several liability with the
Licensee hereunder.
13. NOTICES
Every Notice consent or communication permitted or required to be
served under this Agreement shall be in writing. Notices may be served
by hand, by facsimile
24
transmission or by pre-paid registered post. A notice served by hand or
by facsimile transmission shall be deemed to be received at the moment
of transmission provided that, in the case of facsimile transmission a
copy of the notice is sent by pre-paid registered post to the addressee
within twenty-four (24) hours after such service; a notice served by
post shall be deemed to be received on the tenth Business Day after it
has been posted to the address of the recipient party as set out in the
preamble to this Agreement or to such other address as that party may
from time to time designate in writing.
14. LANGUAGE AND LAW
This Agreement is written in the English language and shall be
interpreted according to English law. The Courts of England shall have
exclusive jurisdiction over it to which jurisdiction the parties hereby
submit.
15. ACTIONS FOR INFRINGEMENT
15.1. The Licensee agrees to assist the Grantor at the Grantor's
expense to the extent necessary in the procurement of any
protection by the Grantor of rights in the Trademark by
registration or otherwise or to protect any of the Grantor's
rights in and to the Trademarks. The Licensee shall forthwith
give notice in writing to the Grantor of any infringement
suspected or unauthorised use of the Grantor's Trademarks or
copyright.
15.2. The decision as to whether or not to take proceedings against
an infringer shall in all cases rest with the Grantor.
15.3. In the event the Licensee makes the Grantor aware of any
unfair competition or infringement by third parties the
Grantor shall control absolutely all litigation relating to
matters described in this clause 15. The Grantor may join the
Licensee as a party thereto. If the Grantor agrees to take
proceedings against an infringer it shall do so at its own
expense but if the Grantor elects not to take proceedings
against any infringer the Licensee shall have the right but
not the obligation to take such proceedings in the name of the
Grantor on giving the Grantor an indemnity as to costs. The
party not taking proceedings shall be obliged on request and
at its own cost to execute any documents and do any other
things reasonably necessary or desirable for the prosecution
of the action. The party bearing the cost of the proceedings
shall be entitled to any damages accruing from them.
15.4. In the event of a third party commencing litigation against
the Licensee for unfair competition and/or infringement
arising out of the use by the
25
Licensee in accordance with the terms of this Agreement of the
Trademarks in any country in which the Trademarks are
registered trademarks in respect of the Products the Grantor
shall indemnify and hold harmless the Licensee against any out
of pocket expenses (including reasonable attorney's fees)
directly incurred by the Licensee arising out of and/or
related to the use by the Licensee of the Trademarks in
accordance with the terms of this Agreement in the marketing
distribution and/or sale of the Licensed Products in those
countries subject to the following conditions:-
15.4.1. The Licensee must promptly notify the Grantor in
writing of any allegation of infringement;
15.4.2. The Licensee must make no admission without the
Grantor's written consent; and
15.4.3. The Licensee must at the Grantor's request allow the
Grantor to conduct and if it decides to settle all
negotiations and litigation and must give the Grantor
all reasonable assistance.
16. MISCELLANEOUS
16.1. Headings and commas used in this Agreement are for the purpose
of ease of reference or reading only and shall not affect its
interpretation.
16.2. This Agreement shall not be varied amended or supplemented
except by instrument in writing executed by the duly
authorized representatives of each of the parties.
16.3. The failure of any party hereto at any time to enforce the
terms provisions or conditions of this Agreement shall not be
construed as a waiver of the same or of the right of such
party to enforce the same.
16.4. Unless otherwise expressly stated any waiver of any of the
Licensee's or of the Guarantor's obligations under this
Agreement shall expire at the end of one year from the date on
which it was given.
16.5. If any provision of this Agreement is held by any court or
other competent authority to be void or unenforceable in whole
or part this Agreement shall continue to be valid as to the
other provisions thereof and the remainder of the affected
provision.
26
16.6. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes
all prior agreements and understandings of the parties hereto
in connection therewith.
16.7. Wherever in this Agreements terms documents materials and/or
proposals are submitted by one party to another unless
specifically stated to the contrary the party who receives
such submission shall have twenty days after receipt to
approve or disapprove such submission. If the party timely
disapproves such submission the disapproving party shall
notify the other party of its disapproval. In the event that
the receiving party neither approves nor disapproves the
submission in a timely manner the submission shall be deemed
approved.
IN WITNESS whereof this Agreement has been executed as a deed on behalf
of the parties in accordance with their respective laws.
27
Exhibit "A"
Countries where the Trademarks are registered in respect of fragrances
COUNTRY
- - ------------------------------------------------------------------------------
Argentina Thailand
Austria United Kingdom
Benelux
Croatia
France
Germany
Greece
Indonesia
Italy
Japan
Macau
Mexico
North Korea
Portugal
South Korea
Spain
Switzerland
28
EXECUTED AS A DEED by )
- - ------------------
PAUL SMITH LIMITED )
- - ------------------
acting by the following signatories: )
Director
Director
EXECUTED AS A DEED by
INTER PARFUMS S.A.
acting by the following signatories
EXECUTED AS A DEED by
JEAN-PHILIPPE FRAGRANCES INC.
acting by the following signatories:-
To:
Paul Smith Limited
Dear Sirs
In consideration of [ ] we hereby assign to Paul Smith Limited all the copyright
and all other rights (including goodwill) for all purposes throughout the world
in the works which F We have carried out for Inter Parfums S.A. ("the Licensee")
in connection with their licence for fragrances ("the Licence") and which I/We
will carry out for the Licensee in the future in connection with the Licence,
and I/We agree that I/We will execute any further documentation which may be
required to effect fully this assignment or to enable Paul Smith Limited to
apply for any registrations or extensions in connection with the works as Paul
Smith Limited thinks fit. I/We also hereby transfer any and all intellectual
property rights in connection with the works (including those of the
exploitation, printing and distribution) to Paul Smith Limited. This assignment
shall be for the full ten-n (including any extension of these rights).
I/We agree that Paul Smith Limited shall be entitled to use and exploit in any
way with my/our works and in whatever manner Paul Smith Limited thinks fit, and
shall be entitled to make any changes, additions or alterations that it may deem
necessary. I/We hereby ]irrevocably waive in Paul Smith Limited's favour all
Moral Rights (as set out in the Copyright, Designs and Patents Act 1988 or any
similar laws existing in any part of the world) in the works.
I/We agree that English law governs this agreement and that this agreement will
apply to any further works which I/ We undertake for the Licensee in connection
with the Licence in the future.
Yours faithfully,
Signed _______________________
Date _________________________
Name _________________________
Address ______________________
______________________________
______________________________
'PAUL SMITH' - CLASS 3
- - ---------------------------------------------------------------------------------------------------
TRADE MARKS - 'PAUL SMITH' CLASS 3 (TOILETRIES/FRANGRANCES ETC)
Country Reg. No. Filing Date Renewal Status
- - ---------------------------------------------------------------------------------------------------
Argentina 1554979 31.3.95 31.3.2005
Australia 754526 10.2.98 Pending
Austria 139974 22.1.92 22.1.2002
Benelux 500607 13.9.91 13.9.2001
Croatia Z971591 26.6.98 16.10.2007
France 1563240 29.8.89 28.8.99
Germany 11885322 21.8.89 21.8.99
Greece 95676 19.9.89 19.9.99
Indonesia 326993 30.10.93 30.4.2003
Italy 581288 12.1.90 12.1.2000
Japan 2134355 28.4.89 28.10.98 Renewed
Paid 10.6.98
Macau 14-979-M 4.3.96 4.3.2006
Mexico 400023 7.11.90 7.11.2000
North Korea 8599 29.7.95 29.7.2005
Philippines 99977 4.5.95 Pending
Portugal 253966 29.10.93 29.10.2003
Russia 97715710 20.10.97 Pending
South Korea 238633 22.5.92 21.5.2002 Perfumery and
hair products
238634 22.5.92 21.5.2002 Toiletries and
Dentifices
337917 23.4.96 23.4.2006 {PS Logo}
337918 23.4.96 23.4.2006 {PS Logo}
Spain 1512729 20.7.89 20.7.99
1326880 5.8.91 5.8.2001 {PS Logo}
Switzerland 392654 9.9.91 9.9.2011
Thailand Kor22428 8.12.93 8.12.2003
United Kingdom 2051161 12.1.96 12.1.2006
USA 1511432 8.11.88 8.11.2008
Community (EEC) 45393 1.4.96 Pending
- - ---------------------------------------------------------------------------------------------------