EXHIBIT 10.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS
BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF
PUBLICLY DISCLOSED.   [***]  INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

 

 

LICENSE AGREEMENT

AMONG

TOMMY HILFIGER LICENSING, LLC,

MOVADO GROUP, INC.

AND

SWISSAM PRODUCTS LIMITED

___________________________________

 

Men’s AND women’s WATCHES and jewelry

________________

 

WORLDWIDE*

________________

JANUARY 1, 2020

___________________________________

 

 

 

 

 

 

*subject to certain exceptions as set forth in this Agreement

 

 

 

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TABLE OF CONTENTS

Page

ARTICLE I. GRANT1

1.1License1

1.1.1E-Commerce Sales.2

1.1.2Quantities of Licensed Products.2

1.2Additional Right.2

1.2.1Jurisdictions.2

1.2.2Derivatives.2

1.3Reservations3

1.3.1E-Commerce and Retail Sales3

1.3.2Special Collections3

1.3.3Adaptive Products3

1.3.4License Strictly Limited.3

1.4Definitional Disputes.4

1.5Distributors5

ARTICLE II. LICENSE PERIOD5

2.1Initial License Period5

2.2Renewal License Period.5

ARTICLE III. ORGANIZATION6

3.1Organization.6

ARTICLE IV. APPROVALS7

4.1Approvals7

ARTICLE V. DESIGN AND MANUFACTURING7

5.1Seasonal Design, Time and Action Calendar..7

5.2Overall Commitment to Quality7

5.3Restricted Substance Limitations8

5.4Conflict Minerals8

5.5Cotton8

5.6Animal Welfare and Sustainable Materials8

5.7Additional CR Opportunities8

5.8Samples of Licensed Products.9

5.9Non-Conforming Products..9

5.10Withdrawal of Approval.9

5.11Assistance by THL10

5.12Ownership of Designs10

5.13Cost of Designs, Samples..11

5.14Standards11

5.15Manufacture of Licensed Products by Third Parties.11

5.15.1In General11

5.15.2Audit Requirement11

5.15.3Approval..12

5.15.4Use of Facility.12

5.15.5Termination of Facility.12

5.15.6Notices on Invoices13

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5.16Anti-Counterfeiting Materials13

ARTICLE VI. BRAND DEVELOPMENT, SALES AND MARKETING13

6.1Best Efforts.13

6.2Sales and Deliveries.14

6.3Reporting.14

6.4Net Sales.15

6.5Minimum Sales.15

6.5.1Watches15

6.5.2Jewelry Products16

6.5.3Calculation of Sales.17

6.6Approved Customers.17

6.6.1Notice to Customers.17

6.6.2Off-Price Accounts..18

6.6.3Off-Price Cap Penalties19

6.7Prohibited Sales.19

6.8Unapproved and Prohibited Sales.19

6.8.1Generally19

6.8.2Penalty for Sales by Licensee or its Affiliates19

6.8.3By Distributors20

6.9Showroom20

6.10In-Store Shops/Fixtures20

6.11Warranty/Guarantee.20

6.12Products for THL, Licensed Stores and Licensed Sites20

6.12.1Products for THL’s Use20

6.12.2Purchases For THL’s Employees20

6.12.3Purchases By TH Outlets.20

6.12.4Purchases By TH Stores, TH Sites, Licensed Stores and Licensed Sites21

ARTICLE VII. ADVERTISING22

7.1Advertising Contribution.22

7.1.1Contribution for Watch Products22

7.1.2Contribution for Jewelry Products22

7.2Media Plan and Advertising Spending.23

7.2.1Media Plan 23

7.2.2THL’s Advertising Spend23

7.2.3Licensee’s Advertising Spending.24

7.2.4Incremental Expenditure..24

7.3Approval of Labels and Licensee’s Advertising.25

7.4Branded Shows.25

7.5Trade Shows.25

7.6Public Announcements.25

ARTICLE VIII. ROYALTIES AND RELATED FEES25

8.1Guaranteed Minimum Royalty.25

8.1.1Watch GMR.25

8.1.2Jewelry GMR.26

8.2Percentage Royalty..27

8.3Royalty Statements.28

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8.4Merchandise Coordinator Program28

8.5No Set-Off28

ARTICLE IX. MANNER OF PAYMENT, INTEREST, BOOKS AND RECORDS, INSPECTION28

9.1Manner of Payment.28

9.2Interest on Late Payments.29

9.3Taxes29

9.4Books and Records29

9.5Underpayments30

9.6Financial Statements.30

ARTICLE X. REPRESENTATIONS AND WARRANTIES30

10.1Representations and Warranties of Licensee.30

10.2Representations and Warranties of THL30

ARTICLE XI. CONFIDENTIALITY AND HIRING OF EMPLOYEES31

11.1Confidentiality.31

11.2Hiring of Employees32

ARTICLE XII. TRADEMARKS AND COPYRIGHTS32

12.1Rights to the Trademarks..32

12.2Protecting the Trademarks32

12.3Compliance with Notice and Other Requirements32

12.4Ownership of Copyrights33

12.5Infringement33

12.6Counterfeit Protection.33

12.7Use of Other Trademarks.33

12.8Use of Trademarks on Invoices, etc34

12.9Monitoring.34

ARTICLE XIII. INSOLVENCY34

13.1Effect of Proceeding in Bankruptcy.34

13.2Rights Personal..34

13.3Trustee in Bankruptcy34

13.4Effect of THL Bankruptcy35

ARTICLE XIV. EXPIRATION AND TERMINATION35

14.1Other Rights Unaffected35

14.2Immediate Right of Termination of the License.35

14.3Termination With Notice and Right to Cure.36

14.3.1By THL36

14.3.2[***]37

14.4Effect of Termination.37

14.4.1Partial Termination.38

14.4.2Continued Compliance with Warranty..38

14.4.3Survival39

14.5Freedom to License.39

14.6Compensation.39

ARTICLE XV. INDEMNIFICATION AND INSURANCE39

15.1Indemnification by Licensee39

15.2Notice of Suit or Claim.40

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15.3Indemnification by THL.40

15.4Insurance41

15.4.1Requirement.41

15.4.2Theft and Destruction Coverage41

15.4.3General Provision41

15.4.4Approved Carrier/Policy Changes42

15.4.5Evidence of Coverage42

15.4.6Territory42

ARTICLE XVI. COMPLIANCE WITH LAWS42

16.1Compliance with Laws.42

16.2Equitable Relief.42

16.3Anti-Bribery/Anti-Corruption.42

ARTICLE XVII. MISCELLANEOUS43

17.1Definitions43

17.2Notices.45

17.3Assignment.46

17.4No Sublicense Agreement Without Consent.46

17.5Assignment by THL..46

17.6No Agency.46

17.7Suspension of Obligations..46

17.8Benefit47

17.9Entire Agreement; Amendment47

17.10Non-Waiver.47

17.11Severability..47

17.12Headings..47

17.13Counterparts.47

17.14Governing Law47

17.15Jurisdiction47

17.16Construction48

 

 

 

EXHIBITS

 

EXHIBIT A

E-COMMERCE GUIDELINES

 

EXHIBIT B

ORGANIZATION CHART

 

EXHIBIT C

DESIGN, TIME AND ACTION CALENDAR

 

EXHIBIT D

RESTRICTED SUBSTANCE LIMITATIONS

 

EXHIBIT E

CONFLICT MINERALS POLICY

 

EXHIBIT F

“A SHARED COMMITMENT –REQUIREMENTS FOR SUPPLIERS, CONTRACTORS, BUSINESS
PARTNERS” and “STATEMENT OF CORPORATE RESPONSIBILITY”

 

EXHIBIT G

APPROVED ACCOUNTS

 

EXHIBIT H

MANNER OF PAYMENT

 

EXHIBIT I

COMPETITORS

 

 

 

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LICENSE AGREEMENT

THIS LICENSE AGREEMENT (the “Agreement”) is entered into as of January 1, 2020
(the “Effective Date”), by and among TOMMY HILFIGER LICENSING LLC, a Delaware
limited liability company, having an address at 285 Madison Avenue, New York, NY
10017 (“THL”), on the one hand, and MOVADO GROUP, INC., a New York corporation,
having its offices at 650 From Road, Paramus, New Jersey 07652 (“MGI”), and
SWISSAM PRODUCTS LIMITED, a Hong Kong corporation, having its offices at 29F
Citicorp Centre, 18 Whitfield Road, North Point, Hong Kong (“SPL”, and together
with MGI, “Licensee”), with reference to the following premises (each of THL and
Licensee, a “Party” and collectively “Parties”).

WITNESSETH:

WHEREAS, THL is a subsidiary of PVH Corp. (“PVH”) and the owner throughout the
world of the trademarks TOMMY HILFIGER, TOMMY, TOMMY JEANS and [flag/logo
design] (together with such other trademarks as THL may from time to time
approve in writing for Licensee to use hereunder, the “Trademarks”) which are
famous and valuable and associated with substantial goodwill in connection with
apparel and related products; and

 

WHEREAS THL and Licensee are parties to an Amended and Restated License
Agreement dated as of September 16, 2009 (as previously amended, the “2009
Agreement”) which is scheduled to end on December 31, 2019, subject to further
extension as provided in Section 3.3 of the 2009 Agreement;

 

WHEREAS the parties have agreed to terminate the 2009 Agreement effective as of
December 31, 2019 and to enter this Agreement effective as of the Effective Date
pursuant to which Licensee shall continue to have a license to use the
Trademarks, on and in connection with the manufacture, importation,
distribution, promotion, advertising and sale of men’s and women’s watches and
jewelry (collectively, the “Products”) throughout the world, excluding all the
jurisdictions listed on Schedule 1 hereto, unless and until THL expressly agrees
to the inclusion  in the Territory of any such jurisdictions (the “Territory”)
subject to the terms and conditions set forth herein.  Products bearing the
Trademarks are hereinafter referred to as “Licensed Products.”  Capitalized
terms listed in Section 17.1 are defined in the Sections set forth therein.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I. GRANT

1.1License.  Subject to all of the obligations and conditions contained in this
Agreement, THL hereby grants to MGI with respect to North, Central and South
America (including the United States, its territories and possessions) and to
SPL with respect to the remainder of the Territory, an exclusive license during
the License Period, without the right to sublicense or assign, to use the
Trademarks solely in the forms approved by THL for use by Licensee hereunder in
connection with the importation, sale, distribution and promotion of the
Licensed Products (i) on a wholesale basis in the Territory and (ii) on a retail
basis in outlet stores operated by Licensee or an Affiliate of Licensee (“Movado
Outlets”). In addition, Licensee may manufacture Licensed Products anywhere in
the Territory. “Affiliates” of any Party means all persons and business
entities, whether corporations, partnerships, joint

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ventures or otherwise, which now or hereafter control, or are owned or
controlled, directly or indirectly, by such Party, or are under common control
with such Party.

1.1.1E-Commerce Sales. Licensee shall have the right to sell, distribute and
promote Licensed Products via commerce conducted on, made available through or
facilitated by interactive or electronic media, whether now known or hereafter
developed, including, without limitation, the Internet and on-line service
providers, regardless of the means through which it is conducted (“E-Commerce”),
on a website located at www.hourtime.com and/or any other website whose URL
consists of “hourtime” followed by a different gTLD (e.g., www.hourtime.com.uk)
(the “Hour Time Site”) provided that (i) Licensee shall at all times own and
operate (either directly or through an Affiliate) the Hour Time Site; (ii)
Licensee shall adhere to all reasonable instructions given by THL regarding: (a)
the manner in which the Trademarks are used and the appearance of the Trademarks
on such website; (b) the products that appear on the webpages featuring the
Licensed Products; and (c) the content of all pages dedicated to Licensed
Products; (iii) the Hour Time Site shall at all times conform with the
guidelines set forth in Exhibit A hereto, as the same may be amended from time
to time by THL (it being understood that if the Hour Time Site is not in
compliance with a material guideline, in THL’s sole discretion, after reasonable
notice from THL, Licensee shall no longer have the right to sell Licensed
Products via the Hour Time Site); (iv) Licensee shall not sell or distribute
Licensed Products outside of the Territory; (v) the Hour Time Site shall be
operated in accordance with the prestige, image, value and distinctiveness of
the Trademarks; and (vi) Licensee shall have full legal responsibility for the
advertising, marketing, promotion and sale of Licensed Products on the Hour Time
Site, including, without limitation, with respect to the collection of sales,
use, VAT and similar taxes and the remittance thereof to the proper taxing
authority and the inclusion of all legal disclosures required by applicable
law.  Other than as expressly set forth herein, Licensee shall have no right to
sell Licensed Products via E-Commerce, other than on a wholesale basis to
approved retailers in the Territory.  For the sake of clarity, the foregoing
does not prevent Approved Accounts that consist of etailers or are otherwise
approved by THL to sell Licensed Products via E-Commerce, from selling Licensed
Products via E-Commerce.

1.1.2Quantities of Licensed Products.  Licensee shall only produce and purchase
Licensed Products in quantities that it reasonably believes will be sold during
the License Period; for the avoidance of doubt, for the purposes of this Section
1.1.2 the term “License Period” does not include any renewal period unless the
extension has gone into effect, or any Disposal Period.

1.2Additional Rights.

1.2.1Jurisdictions.  THL agrees that it shall notify Licensee if it desires to
enter into a license arrangement for the distribution of the Licensed Products
in any country other than those included in the Territory.  Licensee shall then
have the right to submit a business plan to THL outlining its proposal for
obtaining such a license, which THL shall consider reasonably and in good faith;
provided, however, that THL’s decision whether to grant such license shall be
final and binding; and, provided, further, that nothing stated herein shall be
construed as an obligation for THL to grant Licensee any additional license for
countries other than those included in the Territory.

1.2.2Derivatives.  THL agrees that it shall notify Licensee if it desires to
enter into a license arrangement for the distribution of the Licensed Products
bearing any derivative of the Trademarks (i.e., any mark that is a variation of
the Trademark consisting of or containing “TOMMY” or “HILFIGER” or any mark
derived from the foregoing, such as TH).  Licensee shall then have the right to

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submit a business plan to THL outlining its proposal for obtaining such a
license, which THL shall consider reasonably and in good faith; provided,
however, that THL’s decision whether to grant such license shall be final and
binding; and, provided, further, that nothing stated herein shall be construed
as an obligation for THL to grant Licensee any additional license for
derivatives of the Trademarks other than those included in the definition of the
Trademarks.  

Reservations. THL reserves all rights in and to the Trademarks except as
specifically granted herein including, without limitation, those rights set
forth in this Section.  THL may exercise any of its rights, or authorize others
to exercise such rights, at any time

.

1.3.1E-Commerce and Retail Sales.  THL and its Affiliates reserve the right to
sell Licensed Products directly to consumers via retail stores and E-Commerce
sites owned and operated by THL or its Affiliates.  If THL or its Affiliates
wish to sell Licensed Products consisting of jewelry, under the HILFIGER
COLLECTION label or as part of any special or global capsule collection or
limited edition collection (collectively, “Special Collection Jewelry”) direct
to consumers via such stores (“TH Stores”) or E-Commerce sites (“TH Sites”), THL
or such Affiliates may purchase such Special Collection Jewelry from any
supplier they choose, including Licensee, subject to the provisions of Section
1.3.2.  Licensee acknowledges and agrees that sales to THL or its Affiliates are
subject to the pricing set forth in Section 6.12 hereof.  In addition, third
parties authorized by THL or its Affiliates to operate retail stores named
“Tommy Hilfiger”, “Hilfiger” or any derivate thereof (“Licensed Stores”) or to
sell Licensed Products direct to consumers via E-Commerce sites operating under
the name “Tommy Hilfiger”, “Hilfiger” or any derivative thereof (“Licensed
Sites”) shall have the right to purchase Licensed Products from Licensee and to
sell in such TH Stores or via such TH Sites, Special Collection Jewelry obtained
from the same supplier used by THL.

1.3.2Special Collections. THL reserves the right to produce, import, distribute,
promote, advertise and sell, Special Collection Jewelry at wholesale and via
retail in limited distribution and quantities each Annual Period sourced from
any supplier it chooses, and to authorize third parties to do the same.  

1.3.3Adaptive Products. Licensee hereby acknowledges and agrees that THL shall
at all times, including during the License Period, be permitted to manufacture,
distribute, promote, advertise and sell in the Territory, at wholesale,
including to Approved Accounts, and at retail, Licensed Products functionally
adaptable to the needs of people with disabilities and bearing the Trademarks
(“Adaptive Products”), and  sourced from any supplier it chooses, and to permit
third parties to do the same. Notwithstanding the foregoing, prior to sourcing
any such Adaptive Products from any supplier other than Licensee, THL shall
notify Licensee and provide Licensee with a right of first opportunity to
manufacture and supply such Special Collection Jewelry.  If, within 20 days of
Licensee’s receipt of such notice, THL and Licensee are not able to reach an
agreement in good faith with respect to the terms upon which Licensee shall
supply such Adaptive Products, then THL shall be free to source such Adaptive
Products from a third party

 

1.3.4License Strictly Limited.  Nothing contained in this Agreement shall be
construed as an assignment or grant to Licensee of any right, title or interest
in or to the Trademarks, it being understood and acknowledged by Licensee that
all rights relating thereto are reserved by THL except for the rights
specifically granted to Licensee in this Agreement.    In addition, no license
is granted

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hereunder for the manufacture, sale or distribution of the Licensed Products to
be used for publicity purposes (other than publicity of the Licensed Products),
in combination sales or as premiums or giveaways, or to be disposed of under or
in connection with similar methods of merchandising, such rights being
specifically reserved for THL.

1.4Definitional Disputes.   Licensee acknowledges that due to the nature of the
marketplace, the definition of Products may change or may not be amenable to
precise delineation.  In addition, Licensee acknowledges that THL may have (now
or in the future), other licensees within the Territory.  In the event of any
dispute between Licensee and any other licensee of THL in the Territory with
respect to whether particular merchandise is covered by one or the other of
their respective licenses, or there is otherwise a dispute over the definition
of Licensed Products, THL shall render a reasonable written determination which
shall be conclusive and binding on Licensee.

1.5Distributors. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties have agreed that,
notwithstanding anything to the contrary in Section 1.1.4 of the License
Agreement, in the event Licensee wishes to sublicense to a third party (each, a
“Distributor”) the right to distribute in the Territory Licensed Products made
by or on behalf of Licensee the following conditions shall apply:

(a)THL must approve the Distributor, which consent may be withheld by THL in its
reasonable discretion; it being acknowledged that THL shall be acting reasonably
under this Section 1.1.4(a) if, by way of example and not intended as an
exclusive list, it elects not to approve a Distributor that (1) is a direct
competitor of THL, PVH or any of their Affiliates; (2) has had unfavorable
business dealings with THL, PVH or any of their Affiliates, (3) in THL’s
reasonable opinion, has a reputation that is not consistent with the image of
the Trademarks; (4) in THL’s reasonable opinion, is not financially stable or
likely to maintain financial stability for the remainder of the License Period;
(5) in THL’s reasonable opinion, does not have sufficient experience to exploit
the distribution agreement; or (6) distributes other products from suppliers or
sells to retailers that, in THL’s reasonable opinion, are not reputable or that
do not abide by the Standards.

(b)At all times during the term of the distribution agreement, the Distributor
must be financially stable, have a suitable reputation, and have sufficient
experience to be capable of exploiting the rights granted under the distribution
agreement;

 

(c)The Distributor must execute a written distribution agreement, the form and
substance of which has been approved in advance by THL in its reasonable
discretion, which requires the Distributor to comply with and be bound by all of
the provisions of this Agreement applicable to a distributor, including, without
limitation, the provisions of Articles XII and XVI and Sections 5.14, 6.1, 6.6
(including Sections 6.6.1 and 6.6.2), 6.7, 6.11, 7.4, 9.4 and
11.1.  Notwithstanding the foregoing, a Distributor that is an Affiliate of
Licensee need not execute a written distribution agreement; it being understood
that Licensee shall be responsible to THL for such Affiliate’s performance and
compliance with the applicable provisions of this Agreement;  

 

(d)All amendments to the distribution agreement (other than those involving
purely financial terms between Licensee and the Distributor) must be approved in
advance by THL;

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(e)Licensee shall not approve any Label or advertising, marketing or promotional
materials submitted by Distributor unless such sample, Label or material shall
have been approved by THL; provided, however, that Distributors shall be
permitted to use all Labels, advertising, marketing and promotional materials
that have been approved by THL hereunder for Licensee’s use;

(f)All trademark rights deriving from use of the Trademarks by the Distributor
shall inure exclusively to THL and Licensee shall do all that is necessary to
vest such trademark rights in THL;

(g)Licensee shall sell Licensed Products to Distributors at bona fide wholesale
prices negotiated in arms’ length transactions;

(h)Licensee shall diligently monitor the actions of each Distributor in
connection with the distribution of Licensed Products pursuant to the
distribution agreement.  Licensee shall promptly inform THL of any material
breach of the distribution agreement of which Licensee becomes aware, and THL
shall have the right to require Licensee to terminate such distribution
agreement with respect to Licensed Products in accordance with the terms thereof
in the event the Distributor breaches the distribution agreement and such breach
is of a type that would constitute a terminable breach hereunder if such breach
were committed by Licensee;

(i)The distribution agreement shall immediately terminate in the event that
Licensee no longer has the rights to distribute the applicable Licensed Products
in the applicable jurisdiction;

(j)[***]; and

(k)THL shall be a third party beneficiary of all distribution agreements entered
into during the License Period and shall have the right to exercise and enforce
against Distributor those provisions of the distribution agreement that, in
THL’s reasonable opinion, relate to the value, reputation or enforceability of
the Trademarks, if Licensee fails to exercise such rights after reasonable
notice from THL.  Nothing in the distribution agreement shall be deemed to give
a Distributor any rights to make any claim against THL.

ARTICLE II. LICENSE PERIOD

2.1Initial License Period.  The license period shall commence on January 1, 2020
and shall end on December 31, 2024, unless sooner terminated as herein provided
(the “Initial License Period”). Each calendar year during the License Period
shall be referred to herein as an “Annual Period”.

2.2Renewal License Period.  This Agreement shall be extended for an additional
five year period commencing on January 1, 2025 and ending on December 31, 2029
(the “Renewal License Period”; the Initial License Period and any Renewal
License Period together are referred to as the “License Period”) provided that:
(i) Licensee requests an extension by written notice to THL, received by THL not
more than 15 months nor less than 12 months prior to the expiration of the
Initial License Period; (ii) at the time it requests an extension and as of the
end of the Initial License Period, Licensee is in compliance with the material
terms and conditions of this Agreement and any related agreements, and shall
have committed no material breach for the duration of the Initial License Period
that shall remain unremedied to THL’s reasonable satisfaction; (iii) up to the
time it requests an extension, Licensee shall have committed no more than three
breaches of the material terms and conditions of this Agreement, whether

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or not such breaches were cured; (iv) Licensee submits a business plan for the
Renewal License Period that THL approves in its reasonable discretion at least
six months prior to the expiration of the Initial License Period; and (v)
Licensee has achieved Minimum Sales for at least two Annual Periods prior to the
fifth Annual Period (2024) and, as of the date the business plan for the Renewal
License Period is approved, has projected and committed to achieving the Minimum
Sales for the fifth Annual Period.  If any of the foregoing conditions are not
satisfied, THL may replace Licensee by executing a new license agreement with a
third party providing for sales at retail commencing immediately upon the
expiration of the Initial License Period (or for THL to do the same directly),
without any liability to Licensee; for the avoidance of doubt, any such new
license agreement shall not allow for sales at retail prior to the expiration
(or termination) of the Initial License Period.   Expiration or termination of
the License shall not affect Licensee’s obligation (a) to make payments
hereunder accruing prior to such expiration or termination; and (b) to be solely
responsible, and to pay for all allowances, chargebacks and other similar
markdowns or margins with respect to all Licensed Products sold by Licensee and
its Affiliates during the License Period and any Disposal Period (as such term
is defined herein).

ARTICLE III. ORGANIZATION

3.1Organization.  Licensee shall, at its sole cost and expense, employ the
following persons or persons with similar titles and responsibilities, who will,
except as specified below, work exclusively with THL’s representatives on
Licensee’s business arising under this Agreement; provided that THL shall not
unreasonably withhold its consent to requests by Licensee for organizational
changes in light of future developments in the market and in Licensee’s business
and general organizational structure.

REGION

POSITION

 

[***]

 

[***]

 

All of these individuals will be hired with the prior approval of THL, not to be
unreasonably withheld, and shall be relieved of their duties under this
Agreement at the reasonable request of TH.  Exhibit B attached hereto sets forth
Licensee’s organization chart of such personnel.  Unless otherwise agreed to by
THL in its reasonable discretion, Licensee shall maintain throughout the License
Period (i) a separate office based in Switzerland for Europe; (ii) a separate
office based in Hong Kong for Pan Pacific and (iii) a separate office for Latin
America.

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ARTICLE IV. APPROVALS

 

Approvals. THL shall retain overall creative control for the brand, Trademarks,
Licensed Products, and related advertising hereunder. Licensee shall present to
THL in writing all approvals required or permitted by this Agreement.  Except as
otherwise stated in this Agreement, all approvals of THL shall be in its sole
discretion and may be based on THL’s subjective standards and aesthetic
judgment, including, without limitation, those relating to the design, marketing
and advertising of the Licensed Products, and the exploitation, reputation,
image and prestige of Mr. Tommy Hilfiger, the Tommy Hilfiger brand and the
Trademarks.  Only approvals in writing (including via email from an authorized
representative of THL) may be valid.  A submission for approval under this
Section 4.1, or under any other provision of this Agreement, shall be deemed
disapproved unless and until THL delivers a notice of approval.  THL may provide
an explanation for its disapproval, but any such explanation is entirely
voluntary and shall not serve to waive, stop or otherwise diminish THL’s right
to decide future requests for approvals or reconsideration in its sole
discretion.  Without limitation to the foregoing, THL has no obligation to
approve, review or consider any item that does not strictly comply with
submission procedures announced by THL.  Approval by THL shall not be deemed to
be a determination that the approved matter complies with all applicable
regulations and laws or with Sections 5.3, 5.4, 5.5 or 5.6 hereof.  Licensee may
not exhibit, display, manufacture, sell, use, distribute or advertise any
disapproved item.  In the event that it is necessary for THL to perform on-site
approvals, Licensee shall pay any and all reasonable expenses, including travel,
incurred by THL with respect to such on-site approvals.

 

ARTICLE V. DESIGN AND MANUFACTURING

 

5.1Seasonal Design, Time and Action Calendar.  Each Annual Period, Licensee
shall present to the market at least four seasonal collections of Licensed
Products (i.e., Fall, Holiday, Spring and Summer) (each a “Seasonal Collection”)
in accordance with the design, time and action calendar attached hereto as
Exhibit C (the “Calendar”).  Licensee shall submit to THL any proposed revisions
to the Calendar for THL’s prior approval at least six months prior to the
proposed effective date of such revised Calendar.

5.2Overall Commitment to Quality.  Licensee shall maintain the distinctiveness
of the Trademarks and the image and high quality of the goods bearing the
Trademarks. The Licensed Products shall at all times be at least commensurate
with the reputation, image and prestige of the Trademarks and be of high quality
as to workmanship, construction, trim, appearance, fabrication, packaging,
design and materials used therein and generally associated with the THL’s and
its other licensee’s goods bearing the Trademarks (collectively “Quality”), and
shall be at least equal in Quality to the samples of Licensed Products
(including packaging) submitted by Licensee and approved in writing in advance
by THL pursuant to Section 5.8 hereof.

 

Restricted Substance Limitations

.  Without limiting the generality of anything herein, in the manufacture of
Licensed Products, Licensee shall abide by all limitations on restricted
substances (e.g. dyes, metals, etc.) attached hereto as Exhibit D, as the same
may be revised from time to time by THL or PVH upon reasonable notice to
Licensee and any Manufacturing Restricted Substances

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Limitations requirements provided by PVH from time to time; it being
acknowledged and agreed that THL shall require its other licensees to abide by
such limitations after the Effective Date on a non-discriminatory basis.

Conflict Minerals

.  Without limiting the generality of anything herein, Licensee will take all
commercially reasonable measures to avoid the incorporation into Licensed
Products of “conflict minerals” (as described below) obtained from the
Democratic Republic of the Congo or any adjoining country (which include Angola,
Burundi, Central African Republic, the Republic of the Congo, Rwanda, South
Sudan, Tanzania, Uganda and Zambia), from sources which directly or indirectly
finance or benefit “armed groups” (as that term is defined in the U.S.
Securities and Exchange Commission’s Conflict Minerals Rule).   The conflict
minerals include cassiterite, columbite-tantalite (coltan), gold, and wolframite
and three specified derivatives: tin; tantalum; and tungsten.  In addition,
Licensee not produce, purchase or sell any Licensed Products if Licensee is
aware, should reasonably be aware or has a reasonable basis to believe that such
Licensed Products contain conflict minerals. Furthermore, Licensee shall abide
by the Supplier Requirements set forth in the Conflict Minerals Policy attached
hereto as Exhibit E (as it may be amended from time to time), including, but not
limited to, providing THL, upon its request, with (1) complete and accurate
country of origin information for the conflict minerals contained in Licensed
Products and their components and (2) the documentation to support such
information.

Cotton

. Without limiting the generality of anything contained in this Agreement,
Licensed Products shall not incorporate cotton or any other material or product
sourced from Uzbekistan or Turkmenistan or textiles produced using cotton or any
other material or product sourced from Uzbekistan or Turkmenistan.

5.6Animal Welfare and Sustainable Materials. THL aims to responsibly source
materials of animal origin which are used to manufacture its products in a
humane, ethical and sustainable manner.  In support of this effort, Licensee
shall abide by PVH’s policies related to the use of animal materials which are
posted on its website at www.pvh.com/responsibility, as such may be updated from
time to time. THL also aims to source raw materials of natural origin which are
used to manufacture its products in an ethical and sustainable manner.  Licensee
shall abide by THL’s reasonable policy on the use of sustainable materials such
as organic/sustainable cotton and polyester.

5.7Additional CR Opportunities. Licensee shall notify PVH if Licensee wishes to
participate in any of PVH’s corporate responsibility programs (e.g. women’s
empowerment programs for supply chain workers and their communities (Personal
Achievement & Career Enhancement or P.A.C.E. Program), low impact denim etc.)
and PVH will determine Licensee’s eligibility for such programs based, in part,
on Licensee’s corporate responsibility performance.

5.8Samples of Licensed Products.  Before producing, selling or distributing any
Licensed Product, Licensee shall submit samples of each of said Licensed Product
and all labels, tags, packaging materials, tickets, advertising and promotional
materials and all other forms of identification that bear the Trademarks (the
“Labels”) to be affixed thereto to THL for its prior written approval, utilizing
any reasonable submission form provided by THL.  Any approval given hereunder
shall state the duration of such approval; provided, however, that if a duration
is not specified, such approval shall be valid for five years, although THL
shall have the right and any time during such five year period to rescind such
approval on reasonable notice to Licensee. Furthermore, THL reserves the right
to update and change the

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design of any Licensed Product that carries over from one season to another.  In
addition, any such approvals shall authorize Licensee to make only such
quantities of the approved item as Licensee and its Distributors reasonably
expect to sell to Approved Accounts other than Off-Price Accounts, to THL and
THL’s Affiliates (including for TH Stores and TH Sites) and to Licensed Stores
and Licensed Sites.  Licensee shall submit to THL production samples of Licensed
Products, if available, upon THL’s reasonable request.  Licensee shall provide
all samples to THL at Licensee’s sole cost and expense.  Once samples have been
approved, Licensee may manufacture only in accordance with such approved samples
and shall not make any material changes for manufacture without THL’s prior
written approval.  No Licensed Products (including samples) may be exhibited,
displayed, distributed and/or sold by Licensee pursuant to this Agreement unless
such Licensed Products are in substantial conformity with, and at least equal
in, Quality to the samples previously approved by THL in accordance with this
Section 5.8.

5.9Non-Conforming Products.  If any Licensed Product is, in the reasonable
judgment of THL, not being manufactured and distributed with the previously
approved Quality, THL shall notify Licensee, and Licensee shall promptly repair
or change such Licensed Product to conform thereto.  If after THL’s request a
Licensed Product as repaired or changed does not strictly conform and conformity
cannot be obtained after one resubmission, Licensee may only sell the item after
removing the Trademarks and Labels and all other forms of identification,
including, without limitation, designs exclusive to Licensed Products.  If THL
finds any Licensed Products in the marketplace that, in THL’s judgement, are
inconsistent with approved Quality at the time of their sale, then THL shall
notify Licensee thereof and promptly provide such reasonable information with
respect thereto as Licensee shall reasonably request.  If, after receiving all
such information, Licensee fails within ten days to either correct such
inconsistencies or remove such Licensed Products from the market, then THL may,
at Licensee’s expense, purchase any such Licensed Products.  

5.10Withdrawal of Approval.  If at any time any Licensed Product ceases to be
acceptable to THL, THL shall have the right in the exercise of its sole
discretion to withdraw approval of such Licensed Product upon notice to
Licensee.  Upon withdrawal of approval, Licensee shall cease the use of the
Trademarks in connection with the manufacture, distribution, promotion,
advertising, and use of such Licensed Product(s).  Notice of such election by
THL to withdraw approval shall not relieve Licensee from its obligation to pay
royalties on sales of such product(s) made by Licensee prior to the date of
disapproval or thereafter as permitted.  Licensee may, however, complete work in
progress for three months from notice of withdrawal of approval, distribute,
promote, advertise and sell all existing Inventory of such Licensed Products and
utilize materials on hand provided that it submits proof of such work in
progress and inventory of such discontinued Licensed Product to THL.  All such
discontinued Licensed Products shall be sold or otherwise disposed of in the
manner set forth in Section 14.4 within 12 months of receipt of notice of
withdrawal of approval.

5.11Assistance by THL.  THL shall provide creative concepts and fashion
direction for each Seasonal Collection. THL has ultimate design and creative
approval rights, and written approval is required at key dates as indicated in
the Calendar. At least four times during each Annual Period, Licensee may, at
its expense, visit THL’s offices, factories, showroom, and other places of
business, and attend THL’s sales meetings to obtain additional know-how and
assistance with respect to Licensed Products.  The scheduling of such visits
shall be at times mutually convenient to the Parties hereto.  If Licensee
requests any member(s) of THL’s staff to make a personal appearance, to attend
any function, to visit Licensee’s manufacturing plants or facilities or to
attend any design meetings, all of the foregoing shall be subject to scheduling
availability, if any, and Licensee shall pay all reasonable expenses in
connection

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therewith, including appropriate airfare, lodgings, meals and local
transportation consistent with the travel policy of THL; provided, however, that
if Licensee requests Mr. Tommy Hilfiger to make such an appearance, Licensee
shall pay all expenses in connection therewith, including appropriate airfare,
lodgings, meals and local transportation consistent with Mr. Hilfiger’s typical
travel arrangements (e.g., private aircraft transportation).  THL shall, upon
reasonable request by Licensee, make available to Licensee certain samples
(including of fabrics and of advertising materials), designs, colors, Labels,
and artwork, the cost of which shall be borne by Licensee at the cost incurred
by THL to provide the same. In addition to the foregoing, for marketing
purposes, THL shall, upon request, make available to Licensee such of the
following that are available to THL: (a) reports on THL’s marketing policy; (b)
reports on color, style and fabric trends; and (c) display ideas.

5.12Ownership of Designs. All right, title and interest, including copyright and
goodwill, in and to all unique and legally protectable samples, sketches,
designs, and other materials, whether created hereunder by THL, by Licensee, or
by third parties (and, if created by Licensee or by any third party, used on or
as part of or in connection with Licensed Products), including any modifications
or improvements thereto, are the exclusive property of THL or its Affiliates;
and this Agreement constitutes an assignment by Licensee to THL of such rights,
to the extent they are not already the property of THL, and are licensed
hereunder solely and exclusively for use in connection with the manufacture and
distribution of Licensed Products in the Territory.  Notwithstanding the
foregoing, THL shall not have any exclusive right, title or interest in or to
any samples, sketches, designs or other materials that were previously used by
Licensee or by any third party on or as part of watches or clocks other than in
connection with Licensed Products (whether made pursuant to this Agreement or to
a prior agreement with THL or one of its Affiliates).  THL may use and permit
others to use said designs and other materials in any manner it desires,
provided that such use does not conflict with any rights that THL is granting to
Licensee hereunder.  Licensee specifically acknowledges that such designs and
other materials may be used by THL and other licensees on Licensed Products in
jurisdictions outside the Territory and on products other than Licensed Products
anywhere in the world.  Licensee shall place appropriate notices, reflecting
ownership of such design rights by THL, on all Licensed Products, Labels and
advertising and promotional materials if requested by THL in writing on a case
by case basis and if Licensee reasonably determines that such placement is
practicable.  Neither Licensee nor any Affiliate or any other person under
Licensee’s control, shall do or authorize to be done anything that is reasonably
likely to adversely affect any of THL’s design rights. Licensee shall disclose
and freely make available to THL any and all developments or improvements it may
make relating to Licensed Products and to their manufacture, promotion and
sales, including, without limitation, developments and improvements in any
machine, process or product design, that may be disclosed or suggested by THL or
regarding any patent or trademark that Licensee is entitled to utilize.

5.13Cost of Designs, Samples. Licensee is solely responsible for all product
development and associated expenses, including costs associated with the
preparation and submission of designs to THL and all reasonable travel expenses
incurred by THL if THL travels to Licensee’s factories or other facilities as
part of the design process.

5.14Standards.  Licensee acknowledges that it has received, read and understands
PVH’s publications “A Shared Commitment - Requirements for Our Business
Partners” and “Statement of Corporate Responsibility” attached hereto as Exhibit
F.  Licensee shall conduct its business in compliance with the moral, ethical
and legal standards set forth in such publication, as the same may from time to
time be revised by PVH upon reasonable notice to Licensee (the “Standards”) and
shall not do business with

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any entity in connection with this Agreement, if Licensee knows or should
reasonably know that such entity does not comply with the Standards; it being
acknowledged and agree`d that THL shall require its other licensees to abide by
such limitations after the Effective Date on a non-discriminatory basis.  

5.15Manufacture of Licensed Products by Third Parties.

5.15.1In General.  All contractors wherever located which Licensee desires to
use in connection with the manufacture of Licensed Products are subject to the
prior written approval of THL.  In order to maintain THL’s high standard of
quality control and to insure that appropriate measures are taken against
counterfeiting, Licensee shall provide THL with the following
information:  (i) name and address of each proposed manufacturer; (ii) type of
Licensed Products to be manufactured by such proposed manufacturer; (iii)
quantity of Licensed Products to be manufactured by such proposed manufacturer;
and (iv) any other relevant information requested by THL.  Licensee shall obtain
the signature of an authorized representative from each approved third-party
manufacturer used by Licensee on an agreement (a “Third-Party Manufacturing
Agreement”), substantially in the form of a template approved by THL.  Licensee
shall not enter into a Third-Party Manufacturing Agreement with any third party
that Licensee knows or reasonably should know has materially breached a similar
agreement with THL or its Affiliates or any licensee of THL or its
Affiliates.  Licensee shall not use, or allow or authorize the use of any
individuals or entities with which a United States entity would be prohibited
from dealing under any U.S. Government laws, statutes, regulations, orders or
decrees, including, but not limited to, those entities and individuals listed on
the U.S. Department of the Treasury list of Specially Designated Nationals or
the various lists of prohibited and restricted persons and entities maintained
by the U.S. Department of State and Commerce (“Prohibited Entities or
Individuals”), including, without limitation, any manufacturer that hires North
Korean labor.   Notwithstanding the foregoing, Licensee acknowledges that it
shall remain primarily liable and completely obligated under all of the
provisions of this Agreement in respect of the production of Licensed Products
hereunder.

5.15.2Audit Requirement. Each facility that produces Licensed Products, whether
directly or through a contractor, subcontractor or supplier, must be audited for
compliance with the Standards prior to the commencement of production unless THL
notifies Licensee in writing that it already has a current audit with respect to
such facility that evidences compliance with the Standards.  In addition, once
approved by THL in accordance with Section 5.14.3 hereof, in order to maintain
such approval, each facility must be re-audited at least once every [***] period
after the initial audit, and perhaps more frequently at THL’s request depending
on the results of the most recent audit.  Each audit shall be conducted by a
suitable independent third party auditor designated by Licensee and approved by
THL and shall be conducted using the evaluation form to be supplied by THL from
time to time.  All audits shall be conducted at Licensee’s sole expense.  THL
has the right to require licensee to obtain similar audits and/or Higg
Facilities Environmental index self-assessment and verification, in alignment
with any THL corporate responsibility requirements, with respect to component
suppliers who make components that bear the Trademarks, key component suppliers
(suppliers of materials that make up at least 80% of production of such
components) and suppliers that utilize resource intensive processes
(energy/water), provided that THL is conducting audits of similar types of
entities.  

 

5.15.3Approval.  Promptly upon the completion of each audit of a facility
(including re-audits) a comprehensive audit report prepared by the approved
independent third party auditor shall be provided to THL, attention of the
Corporate Responsibility team.  THL will endeavor to respond within 30 days from
its receipt of an audit report to notify Licensee whether the facility is

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disapproved, including its reason(s) for disapproval in reasonable detail, or
whether the factory is approved, and if so, for how long such approval is valid.

5.15.4Use of Facility.  Unless a facility is approved as set forth herein, the
facility shall not be used for the production of Licensed Products.  If, on more
than one occasion and after having received notice from THL of such prior
occasion, Licensee uses a facility that has not been properly audited or
re-audited or for which THL has not received a timely audit (or re-audit)
report, THL may (i) hire an independent auditor of THL’s choosing who shall
report directly to THL to conduct an independent assessment, and Licensee shall
reimburse THL for all reasonable costs incurred in connection with such
independent assessment or (ii) terminate the License and all of the other rights
granted to Licensee under this Agreement.  If Licensee uses a facility for which
an audit has revealed that remediation is required in order to be in compliance
with the Standards, THL may require that Licensee conduct and complete certain
training of such facility or reimburse THL in connection with the training of
such facility, which may include, without limitation, completion of e-learning
modules or in person consulting conducted by third party service providers.
Nothing in this Section 5.14 shall be deemed to confer third-party beneficiary
rights upon any person, corporation, partnership or other entity.

5.15.5Termination of Facility.  Licensee shall, within a reasonable time,
terminate use of any facility  used in connection with the production of
Licensed Products that (i) materially breaches the Third Party Manufacturing
Agreement or that Licensee knows, or should reasonably know, has materially
breached a similar agreement with THL or its Affiliates or any licensee of THL
or its Affiliates; (ii) is a Prohibited Entity or Individual; (iii) Licensee
knows, or reasonably should know, uses false employment, health, safety or
salary records, (iv) Licensee knows, or reasonably should know, violates Anti
Bribery Laws or offers any of THL’s or its Affiliates’ associates or
auditors/assessors of money, gifts, travel or entertainment or other
consideration that is intended to or may be construed as an inducement to act
(whether by commission or omission) in any manner; (v) that makes physical or
verbal threats to THL or its Affiliates or their auditors or other
representatives, refuses entry to the manufacturing site, denies access to
documents, or denies permission to interview workers; (vi) that Licensee knows,
or reasonably should know fails to comply with any material standard contained
in the Standards or repeatedly fails to comply with the Standards; (viii) that
Licensee knows, or reasonably should know sells Licensed Products to
unauthorized entities; (ix) that Licensee knows, or reasonably should know
produces or uses counterfeit products or components or (x) that Licensee knows,
or reasonably should know fails to produce Licensed Products of the requisite
Quality and is not able to demonstrate to THL’s reasonable satisfaction that (A)
it is diligently and in good faith taking measures to ensure that that the
facility produces Licensed Products of the requisite Quality and (B) Licensed
Products that are not of the requisite quality are not being sold or
distributed.

5.15.6Notices on Invoices. Licensee shall require that all commercial invoices
(bills of lading) to Licensee that accompany Licensed Products include the
following language (either pre-printed or "stamped"):

 

We hereby certify that the merchandise (including components thereof) covered by
this shipment was manufactured in compliance with PVH’s publication “A Shared
Commitment - Requirements for Suppliers, Contractors, Business Partners” and
PVH’s “Statement of Corporate Responsibility” and: (1) it was manufactured in
compliance with (a) sections 6, 7, and 12 of the Fair Labor Standards

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Act, as amended and all regulations and orders of the United States Department
of Labor under section 14 thereof, and (b) state and local laws pertaining to
child labor, minimum wage and overtime compensation; or (2) it was manufactured
in compliance with the wage and hour laws of the country of manufacture and
without the use of child (persons under the age of 15 or younger than the age
for completing compulsory education, if that age is higher than 15), prison,
indentured, exploited, bonded, forced or slave labor.   We further certify that
we have in effect a program of monitoring our subcontractors and suppliers and
other designated contract facilities that manufacture TOMMY HILFIGER brand
merchandise for compliance with the foregoing. We also certify that the
merchandise is in compliance with all laws governing the designation of country
of origin and, if applicable, is being shipped under legally issued and valid
export license or visa.

5.16Anti-Counterfeiting Materials.  To aid THL in policing counterfeiting, upon
THL’s written request, Licensee shall provide regular updates of Licensed
Products produced by Licensee and any third-party manufacturer, contractor,
subcontractor and supplier that manufactures Licensed Products or from which
Licensee obtains Licensed Products or materials for the manufacture of Licensed
Products, such as line-books, brochures and/or product DVDs.  Licensee shall
also designate an employee with specialization in the Licensed Products to
assist THL in ascertaining whether products are counterfeit.  THL shall procure
online brand protection services for the Licensed Products that shall include,
at a minimum, (i) the identification, on major online marketplaces throughout
the Territory, of listings of counterfeit Licensed Product and of listings of
authentic Licensed Products containing copyrighted images of the Licensed
Products and (ii) the utilization of such marketplaces’ takedown mechanisms to
request the removal of such listings.  Licensee shall provide such assistance as
is reasonably required in connection with such online brand protection services.

 

ARTICLE VI. BRAND DEVELOPMENT, SALES AND MARKETING

6.1Best Efforts.  Licensee shall use its reasonable best efforts to exploit this
license throughout the Territory.  Without limitation, Licensee shall: (a) sell
a sufficiently representative quantity of styles, fabrications and colors of
Licensed Products; (b) offer for sale Licensed Products so that they may be sold
to consumers on a timely basis; and (c) cooperate with THL’s merchandising,
sales and anti-piracy programs.  Licensee acknowledges that to preserve the
goodwill associated with the Trademarks, Licensed Products should be sold at
prices and terms reflecting the quality and nature of the Trademarks, and the
reputation of the Trademarks as appearing on goods of high quality, it being
understood, however, that THL is not empowered and has no desire to fix or
regulate the prices for which the Licensed Products are to be sold.  Licensee
shall at all times maintain personnel and resources sufficient to provide
effective distribution of the Licensed Products throughout the Territory.

6.2Sales and Deliveries. For each Seasonal Collection during the License Period,
Licensee shall ship no less than [***] of Licensed Products ordered and
un-cancelled by customers.  Licensee shall use its reasonable best efforts to
ensure that each order is shipped by the date requested by

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Licensee’s customers.  An order to be shipped to a customer which is on credit
hold or other hold shall not be deemed to be an untimely shipment, provided that
Licensee notifies the customer in writing of the existence of the hold on the
account and the reason for the hold, prior to the requested shipment date.  Each
order shall bear the respective shipping schedule.  Licensee will, within 15
days of THL’s request, supply documentation evidencing such timely delivery
during the immediately preceding quarter.  Licensee shall not be deemed in
breach of this Section until the second quarter in which it violates the terms
hereof.

6.3Reporting.  Licensee shall submit the following reports to THL, which, if
requested by THL, shall be in the form provided by THL:

 

(a)Within 75 days after the end of each Annual Period, a certification by an
authorized officer of Licensee of the Net Sales of Licensed Products during such
Annual Period;

(b)On or before the 15th day of each month, reports of the prior month’s (i)
monthly net shipments, (ii) retail selling results, and (iii) revised annual
projections by month;

(c)On or before the third day after the close of each of THL’s fiscal quarters
during the License Period (THL to advise Licensee of the applicable dates at the
beginning of each fiscal year), Licensee’s best estimate of Net Sales from the
immediately preceding month (i.e., April, July, October or January, as
applicable) which shall be used for THL’s budget estimation purposes only and no
royalty calculation or invoicing will occur based upon these amounts;

(d)On or before each January 15 during the License Period, a five year business
projection (year one by month and years two through five on an annual basis);

(e)On or before each August 15 during the License Period, a three year business
plan;

(f)On or before each January 15, a schedule of projected sales and marketing
plans for the Licensed Products for the next three Annual Periods for THL’s
approval;

(g)At the time when each Percentage Royalty payment is due, a complete and
accurate royalty statement as more fully described in Section 8.3; and

(h)By no later than March 31st of each Annual Period, Net Sales by State with
respect to Licensee’s sales in the United States made during the immediately
preceding calendar year.

6.4Net Sales.  As used herein “Gross Wholesale Sales” means the invoiced amount
for Licensed Products, including, but not limited to, Seconds and Close-Outs,
sold by Licensee or its Affiliates to parties other than Licensee’s Affiliates,
before any deductions for allowances, discounts, returns, taxes, insurance or
freight, provided that when Licensee or its Affiliates sell Licensed Products to
consumers in Movado Outlets, Gross Sales shall be based on the bona fide
wholesale prices charged by Licensee to independent retailers in arms’ length
transactions.   “Net Wholesale Sales” means the Gross Wholesale Sales, less only
(i) returns (or destruction in place) that Licensee actually allowed and, for
returns, actually received by Licensee, (ii) allowances (i.e., credits to a
customer after delivery, including credits for returns, promotions and
markdowns) that Licensee actually grants in writing, (iii) trade discounts
(i.e.,

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reductions in the list wholesale selling price that are customary in the trade)
that Licensee actually grants in writing prior to delivery and (iv) taxes,
freight and insurance to the extent the same are separately stated on Licensee’s
invoices. No other deductions from Gross Wholesale Sales shall be taken in
computing Net Wholesale Sales, including, but not limited to, deductions for
special promotions, advertising, warehouse or distribution expenses or for
uncollectible accounts. For the purpose of computing of Net Wholesale Sales, the
foregoing permitted deductions shall not exceed [***] of Gross Wholesale Sales
in any Annual Period. “Net E-Commerce Sales” shall mean the price paid by
consumers (by any form of payment including, without limitation, cash, credit
cards, gift cards, etc.) for Licensed Products sold on the Hour Time Site less
returns, itemized taxes, freight and insurance.  “Net Sales” shall mean Net
Wholesale Sales plus Net E-Commerce Sales. For purposes of this Agreement, a
Licensed Product shall be considered “sold” upon the date of billing, invoicing,
shipping or payment, whichever occurs first.

6.5Minimum Sales.  

6.5.1Watches.  During each Annual Period during the License Period, Licensee
shall be required to achieve minimum Net Sales with respect to Licensed Products
consisting of men’s and women’s watches (“Watch Products”) in the amount set
forth below for the applicable Annual Period (“Watch Minimum Sales”). Licensee
shall not receive credit towards Watch Minimum Sales for (a) sales to THL or its
Affiliates (including for TH Stores and TH Sites), Licensed Stores, or Licensed
Sites (“THL Sales”); (b) sales pursuant to Section 5.9 (Non-Conforming
Products); or (c) any sales in breach of this Agreement, including, without
limitation, Off-Price Sales in excess of the Off-Price Cap , sales outside the
Territory or sales to unapproved customers (collectively the “Excluded Sales”).

 

Annual Period

Watch Minimum Sales

INITIAL LICENSE PERIOD

[***]

[***]

 

RENEWAL LICENSE PERIOD (IF ANY)

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[***]

 

 

 

 

[***]

 

THL shall have the right to terminate this Agreement with respect to Watch
Products upon 30 days written notice to Licensee if [***]. Thereupon, the
provisions of Section 14.4 shall control the disposition of Inventory of Watch
Products.  

6.5.2Jewelry Products. During each Annual Period during the License Period,
Licensee shall be required to achieve minimum Net Sales with respect to Licensed
Products consisting of jewelry products (“Jewelry Products”) in the amount set
forth below for the applicable Annual Period (“Jewelry Minimum Sales”). Licensee
shall not receive credit towards Jewelry Minimum Sales for Excluded Sales:

 

Annual Period

Jewelry Minimum Sales

INITIAL LICENSE PERIOD

[***]

[***]

RENEWAL LICENSE PERIOD (if any)

[***]

 

 

[***]

 

THL shall have the right to terminate this Agreement with respect to Jewelry
Products upon 30 days written notice to Licensee if [***]. Thereupon, the
provisions of Section 14.4 shall control the disposition of Inventory of Jewelry
Products.

6.5.3Calculation of Sales.  For the purposes of determining sales for all
purposes hereunder, including for the calculations of Watch Minimum Sales,
Jewelry Minimum Sales, Watch GMA, Jewelry GMA, Advertising Contribution and
royalty calculations hereunder, sales made in any foreign currency shall be
converted to U.S. Dollars at the exchange rate as of the close of business on
the day on which such sales were made, as published by Reuters (or other
nationally recognized source of

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such information; provided that Licensee shall notify THL of any change in such
source and may not change sources more than once every two years) (the “Exchange
Rate”).

6.6Approved Customers.  Licensee shall sell and shall require that its
Distributors sell, Licensed Products only to (a) those specialty shops,
department stores and retail outlets, including E-Commerce accounts, whose
operations are consistent with the prestige of the Trademarks and THL’s sales
policies and which have been pre-approved in writing by THL in its sole
discretion, (together with the accounts set forth in clauses (c) and (d) herein,
“Approved Accounts”), (b) THL and its Affiliates, Licensed Stores and Licensed
Sites (c) corporate accounts for the use of the employees of such corporate
accounts (“Approved Corporate Accounts”), provided such accounts have been
approved in writing by THL and provided further that such accounts do not sell
alcohol, tobacco, gaming or firearms products; and (d) advertising specialty
companies for resale only to Approved Corporate Accounts, for the use of their
employees, and not for resale, provided that such advertising specialty
companies shall, prior to receiving any Licensed Products from Licensee, execute
an agreement providing for such limitation on resale.  Exhibit G sets forth a
list of Approved Accounts as of the Effective Date.  Prior to the opening of
each selling season and whenever Licensee wishes to sell Licensed Products to
customers not previously approved, Licensee shall submit a list of its proposed
customers for THL’s written approval.  THL shall have the right to revoke its
approval of an Approved Account or Approved Corporate Account upon 30 days prior
written notice to Licensee, if THL determines in its sole discretion that the
customer no longer meets its standards.  Notwithstanding the foregoing, Licensee
shall be permitted to fulfill any orders to such account that were firm prior to
such revocation.  Licensee shall use all commercially reasonable efforts to
prevent its customers from selling Licensed Products outside of the
Territory.  If any such sales occurs after THL has advised Licensee of such
sales, Licensee shall stop selling Licensed Products to such customer and such
customer shall cease being an Approved Account hereunder. THL may, at Licensee’s
expense, purchase any Licensed Products found in the marketplace that Licensee
has sold to unapproved customers.

6.6.1Notice to Customers.  Licensee shall include the following (or
substantially similar language) in a letter or notice disseminated to its
customers located in North America one time per each Annual Period in connection
with the Licensed Products:

 

“Limitations on Sale by Buyer.

Seller expressly reserves the right to limit the amount of merchandise delivered
to only such quantities as are necessary to meet the reasonably expected demand
at Buyer’s store locations.

This merchandise is sold to Buyer for resale to the ultimate consumer
only.  Buyer is expressly prohibited from selling the merchandise purchased
hereunder to a retailer or other dealer in like merchandise, or to any party who
Buyer knows, or has reason to know, intends to resell the merchandise.

The merchandise purchased hereunder may not be sold by Buyer from any store
locations which Seller has advised Buyer do not qualify as an acceptable
location.

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Tommy Hilfiger Licensing, LLC is a third-party beneficiary of these terms.”

6.6.2Off-Price Accounts.  Licensee may sell Seconds and Close-Outs only to those
Approved Accounts designated in writing as off-price customers and to Movado
Outlets (collectively the “Off-Price Accounts”); provided, however, that (i) Net
Wholesale Sales of Seconds in any Annual Period shall not exceed [***] of Net
Wholesale Sales (not including the Excluded Sales) for such Annual Period (the
“Seconds Cap”) and (ii) Net Wholesale Sales to Off-Price Accounts in any Annual
Period shall not exceed [***] of Net Wholesale Sales (not including the Excluded
Sales) for such Annual Period (collectively, the “Off-Price Caps”).  For the
avoidance of doubt, Movado Outlets and the “Off-Price Accounts” listed on
Exhibit G are the only Off-Price Accounts that are approved as of the Effective
Date.  Licensee shall use all commercially reasonable efforts to prevent
Off-Price Accounts from selling Licensed Products outside of the Territory,
advertising or promoting the sale of Licensed Product (other than within its
brick and mortar stores), and from selling Licensed Products in catalogs, via
E-Commerce (unless such account is an e-commerce account) or other than in its
brick and mortar stores, and if any such sales occur after Licensee has warned a
customer to stop such sales, Licensee shall stop selling Licensed Products to
such customer and such customer shall cease being an Off-Price Account
hereunder.

 

(a)Seconds. As used herein “Seconds” means damaged, imperfect, defective or
otherwise non-first quality Licensed Products. The sale or other disposition of
Seconds is prohibited, unless expressly pre-approved in writing by THL with
respect to the terms and method of such disposal, and then only in a way that
shall not reduce the value of the Trademarks. Any Seconds approved for sale by
TH shall be clearly marked “Seconds” or “Irregular”.

(b)Program Sales. Licensee is prohibited from manufacturing Licensed Products
specifically for sale to Off-Price Accounts which are distinct from Licensed
Products which have theretofore been sold by Licensee to Approved Accounts which
are not designated as “Off-Price Accounts” (the “Full Price
Accounts”).  Notwithstanding the foregoing, Licensee is expressly permitted to
sell Licensed Products that are manufactured specifically for sale to Off-Price
Accounts after at least six months have passed since the initial introduction of
such Licensed Products at Full Price Accounts.

(c)Close-Outs.  As used herein “Close-Outs” means first quality Licensed
Products that under applicable industry standards cannot be, or are not sold to
Full Price Accounts, although they were originally intended for sale to such
accounts (such as overruns and excess merchandise).  

6.6.3Off-Price Cap Penalties:  All sales to Off-Price Accounts in excess of one
or both of the Seconds Cap and/or the Off-Price Cap are subject to an additional
penalty royalty (“Penalty Royalty”) of [***].  For the avoidance of doubt, the
Penalty Royalty is in addition to the Percentage Royalty set forth in Section
8.2 hereof and shall not be deemed to make such sales permissible hereunder. The
Penalty Royalty shall be paid in the same manner as the Percentage Royalty on
such sales. The Parties hereby agree that the Penalty Royalty set forth herein
is reasonable in light of the anticipated or actual harm caused by sales in
excess of the Seconds Cap and the Off-Price Cap, the difficulties of proof of
loss and the inconvenience or infeasibility of otherwise obtaining an adequate
remedy, but shall not cure any default and shall not preclude TH from enforcing
the provisions of this Agreement by pursuing any action or remedy as allowed
hereunder or by law, all of which shall be cumulative.

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6.7Prohibited Sales.  Except as expressly permitted by THL in writing (including
gin respect of Approved Accounts to the extent such activities are encompassed
by THL’s approval), Licensee may not (a) market or promote or seek customers for
Licensed Products outside of the Territory; (b) establish a branch, wholly owned
subsidiary, distribution center or warehouse with inventories of Licensed
Products outside of the Territory (other than within a country in which the
Licensed Products are manufactured, for the purpose of managing that
manufacturing and export); (c) sell or distribute any Licensed Products to
wholesalers, jobbers, diverters, catalog vendors or any other entity that does
not operate retail stores exclusively other than as expressly permitted herein
or pursuant to THL’s written approval, and to its distributors which distribute
only to U.S. military bases or to retail customers in the Territory that satisfy
the criteria set forth in Section 6.6 hereof; (d) sell Licensed Products
directly to the public in retail stores, other than through Movado Outlets; (e)
sell or distribute any Licensed Products over the Internet or any other global
or regional computer access network; or (f) use Licensed Products as giveaways,
prizes or premiums, except for promotional programs which have received the
prior written approval of THL.  

 

6.8Unapproved and Prohibited Sales.  

6.8.1Generally.  Licensee shall promptly report to THL, to the extent Licensee
knows or should reasonably be expected to know, all sales (i) of Licensed
Products to unapproved customers, (ii) of products using the Trademarks that
have not been approved by THL as Licensed Products, and (iii) otherwise
prohibited under Section 6.7 (collectively “Unapproved and Prohibited Sales”),
including the number of units, description of product, customers, prices and
shipping dates.  Licensee shall promptly respond to and investigate any good
faith inquiries from THL about the same.  Promptly after Licensee has actual
notice of any Unapproved and Prohibited Sales, it shall take reasonable measures
to remedy the same, including, to the extent reasonably practicable,
repurchasing the goods.

6.8.2Penalty for Sales by Licensee or its Affiliates. THL may charge Licensee a
penalty (a “Penalty”) if in any 12 -month period (a “Penalty Period”) the total
aggregate Unapproved and Prohibited Sales by Licensee and/or its Affiliates
exceeds [***].  The Penalty shall be equal to [***], which Licensee agrees is
fair compensation therefor.  Such Penalty shall not, by itself, cure such
default.  Upon payment of a Penalty, a new Penalty Period shall immediately
commence; meaning, for example, that Licensee could be required to pay another
Penalty if Prohibited and Unapproved Sales by Licensee and its Affiliates exceed
[***] in the 12-month period following payment of a Penalty.

6.8.3By Distributors.  THL may charge Licensee a Penalty if the total aggregate
Unapproved and Prohibited Sales by Distributors in any Penalty Period exceeds
[***]; provided, however, there shall be no Penalty for [***].  The Penalty
shall be equal to [***], which Licensee agrees is fair compensation
therefor.  Such Penalty shall not, by itself, cure such default.  Upon payment
of a Penalty, a new Penalty Period shall immediately commence; meaning, for
example, that Licensee could be required to pay another Penalty if Prohibited
and Unapproved Sales by Distributors exceed [***] in the 12-month period
following payment of a Penalty.  

6.9Showroom. Licensee may display Licensed Products for sale only in a separate
showroom exclusive to Licensed Products, designed, displayed and fixtured in
accordance with THL's specifications (as may be updated from time to time
throughout the License Period) The style and manner in which Licensed Products
will be displayed in said showroom are subject to THL’s approval.

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6.10In-Store Shops/Fixtures. Licensee shall participate in any in-store shop or
main floor fixturing program with any of Licensee’s customers on terms
reasonably satisfactory to Licensee. Licensee shall use reasonable efforts to
secure premium positioning in the areas dedicated to the sale of Licensed
Products in the stores of each of Licensee’s customers.  Licensee shall use
reasonable efforts to cause Licensed Products sold in an in-store shop or in
connection with a main floor fixturing program to be displayed and sold in a
manner which maintains the prestige and reputation of the Trademarks. Licensee
shall fixture or use reasonable efforts to cause to be refixtured each in-store
shop and area dedicated to the sale of Licensed Products within 60 days after
notice from THL and, without notice from THL, shall update the fixtures no less
often than every [***] years and shall update visual enhancements no less often
than every [***] months.

6.11Warranty/Guarantee.  All Licensed Products will be sold together with a
standard warranty as to replacement and/or repair of a one year duration (or
such longer period as Licensee and its Affiliates generally offer with respect
to Products).  

 

6.12Products for THL, Licensed Stores and Licensed Sites.  Sales of Licensed
Products to THL or its Affiliates are exempt from any royalty or advertising
obligation requirements hereunder.

6.12.1Products for THL’s Use.  Licensee shall supply THL with two complete sets
of each Seasonal Collection, at Licensee’s sole cost and expense.

 

6.12.2Purchases For THL’s Employees.  Licensee shall sell to THL a reasonable
amount of in-stock Licensed Products for the personal use of THL employees at
[***] off the regular wholesale price on standard industry terms.  

6.12.3Purchases By TH Outlets.  At the beginning of each season, and prior to
offering such products to third parties, Licensee shall offer Close-Outs TH
Stores consisting of outlet stores (“TH Outlets”).  In no event shall Licensee
make available to TH Outlets fewer Licensed Products than it makes available to
outlet stores operated by Licensee or Affiliates of Licensee.  TH Outlets may
also purchase in-stock Licensed Products.  The price of Licensed Products sold
to TH Outlets shall be [***] off Licensee’s standard suggested retail price;
provided, however, that the price of Licensed Products sold to TH Outlets
located in Canada shall be the “Canadian dollar suggested retail price of such
Licensed Products in Canada less [***]. Licensee shall fill the orders of the TH
Outlets in a manner at least as favorable as Licensee fills orders from its
other Off-Price Accounts.

6.12.4Purchases By TH Stores, TH Sites, Licensed Stores and Licensed
Sites.  Beginning on the first day of each of Licensee’s market periods, TH
Stores, TH Sites, Licensed Stores and Licensed Sites may purchase Licensed
Products from Licensee.  The prices charged to each shall be no greater than the
following:

 

Purchaser

Price

Licensed Stores and Licensed Sites

[***]

TH Stores and TH Sites (other than TH Stores located in Canada and Europe)

[***]

TH Stores located in Canada

[***]

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TH Stores located in Europe

[***]

 

*Where customs duties or other obstacles to direct sales to TH Stores or
Licensed Stores in certain territories make impracticable the selling of
Licensed Products at the prices set forth herein, those prices shall not
apply.  Instead, Licensee shall cooperate with THL and utilize commercially
reasonable efforts to develop alternative solutions that enable TH Stores and
Licensed Stores to purchase Licensed Products at reasonable prices in those
territories. In addition, if Licensee agrees to provide additional services such
as merchandising or training to a particular TH Store, Licensed Store, or group
of such stores, then the appropriate parties may agree upon a higher price than
that set forth above to compensate Licensee for such services.

 

All of the foregoing purchases shall be on standard industry terms.  Licensee
shall fill such orders in a manner at least as favorable as Licensee fills
orders from its other comparable customers.  

 

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ARTICLE VII. ADVERTISING

 

7.1Advertising Contribution.  

7.1.1Contribution for Watch Products. During each Annual Period or portion
thereof (calculated on a pro rata basis) during the License Period, Licensee
shall pay to THL an advertising contribution solely with respect to Watch
Products in the amount listed below for the applicable Annual Period (the “Watch
Contribution”):

 

Annual Period

Watch Contribution

INITIAL LICENSE PERIOD

1/1/20 – 12/31/20

[***]

1/1/21 – 12/31/21

[***]

1/1/22 – 12/31/22

[***]

1/1/23 – 12/31/23

[***]

1/1/24 – 12/31/24

[***]

RENEWAL LICENSE PERIOD (if any)

Each Annual Period during the Renewal License Period, if any

[***]

 

The Watch Contribution for each Annual Period shall be payable in four equal
installments by no later than January 1, April 1, July 1 and October 1 of such
Annual Period.  

 

7.1.2Contribution for Jewelry Products. During each Annual Period or portion
thereof (calculated on a pro rata basis) during the License Period, Licensee
shall pay to THL an advertising contribution solely with respect to Jewelry
Products in the amount listed below for the applicable Annual Period (the
“Jewelry Contribution”):

 

 

 

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Annual Period

Jewelry Contribution

INITIAL LICENSE PERIOD

1/1/20 – 12/31/20

[***]

1/1/21 – 12/31/21

[***]

1/1/22 – 12/31/22

[***]

1/1/23 – 12/31/23

[***]

1/1/24 – 12/31/24

[***]

RENEWAL LICENSE PERIOD (if any)

Each Annual Period during the Renewal License Period, if any

[***]

 

The Jewelry Contribution for each Annual Period shall be payable in four equal
installments by no later than January 1, April 1, July 1 and October 1 of such
Annual Period.

7.2Media Plan and Advertising Spending.

7.2.1Media Plan.  In an effort to reach an agreement regarding the media plan
for each Annual Period during the License Period, THL and Licensee shall discuss
the media plan during the December immediately preceding such Annual Period. A
similar discussion will be had in connection with any changes to any such plan.

7.2.2THL’s Advertising Spend.   [***]THL will spend the amounts received from
Licensee pursuant to Sections 7.1.1 and 7.1.2 above within the applicable Annual
Period in the Territory as follows: [***].

Each Annual Period, THL will use commercially reasonable efforts to expend an
amount equivalent to at least [***] of the prior Annual Period’s Net Sales on
advertising as set forth above. Such expenditures will include, without
limitation, marketing, advertising, public relations, special events and
promotions, production, administration and other costs directly related to all
of the foregoing. Additionally, Licensee acknowledges that, THL may allocate a
portion of Licensee's payments toward THL (or its Affiliates' or licensees')
production of advertising materials and costs incurred in connection therewith
(e.g. costs for photographers, models, usage rights, advertising shoots, etc.)
provided Licensed Products are depicted in such materials.  Any apportionment of
advertising costs among Licensed Products and other products

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bearing the Trademark shall be made by THL in its reasonable discretion.
Additionally, THL may undertake various endorsements, team and event sponsorship
and other such activities as THL deems appropriate as part of a worldwide
marketing program to develop its image internationally. Subject to the
foregoing, THL will be entitled to allocate up to [***]% of Licensee's
advertising payments (i.e., [***]% of the prior Annual Period’s Net Sales)
toward Licensee's share of the cost of such program; provided, however, that
such allocation will be increased to [***]% of Licensee’s advertising payments
(i.e., [***]% of the prior Annual Period’s Net Sales) to the extent such
marketing program generally includes Licensed Products (e.g., an influencer
campaign provided such influencer is able to promote Licensed Products even if
such Licensed Products are not featured in every printed material in which such
influencer appears).

7.2.3Licensee’s Advertising Spending.  With respect to each Annual Period or
portion thereof (calculated on a pro rata basis) during the License Period,
Licensee shall spend an amount equal to [***] percent of Net Sales of Watch
Products made during that Annual Period (not including THL Sales) (the
“Advertising Expenditure”) on cooperative and direct advertising in the
Territory in support of the Watch Products. Each February during the License
Period, THL and Licensee shall discuss the creative and media plans in an effort
to reach a mutual agreement about Licensee’s spending, but in the absence of
such agreement, Licensee will spend the amounts required hereunder in support of
the Licensed Products through (a) cooperative advertising and (b) direct
advertising.  If Licensee fails to properly spend the Advertising Expenditure in
any given Annual Period, then Licensee shall spend the amount of any shortfall
(the “Shortfall”), up to [***], for the designated expenses by no later than
June 30th of the following Annual Period (the “Carryover Period”), in addition
to its independent advertising spending obligations for that Annual Period (it
being acknowledged that advertising expenditures made during the Carryover
Period shall first be deemed to cover the Shortfall and second spending
obligations for such Annual Period). If the Shortfall has not been properly
spent by the end of such Carryover Period, then the amount which should have
been expended and which was not expended shall be paid over to THL by no later
than 30 days after the end of such Carryover Period; provided, however, that if
the Advertising Expenditure or any Shortfall has not been fulfilled upon the
expiration or termination of the License Period, the unexpended amounts shall be
paid over to THL absolutely within 30 days after such expiration or termination.
Furthermore, if the Shortfall exceeds [***], then the amount by which the
Shortfall exceeds [***] shall be paid over to THL by no later than January 31
immediately following the Annual Period in which the Shortfall occurred.

7.2.4Incremental Expenditure.  Each Annual Period, in addition to the Watch
Contribution, the Jewelry Contribution and the Advertising Expenditure
hereunder, Licensee shall spend, or contribute to THL to spend, an additional
amount equal to [***] (the “Incremental Expenditure”) (e.g. [***]).  Each July
during the License Period, THL and Licensee shall meet to determine how the
Incremental Expenditure shall be spent and by which party.  

7.3Approval of Labels and Licensee’s Advertising.  All of Licensee’s Labels,
marketing, and advertising copy and the media of all of the aforesaid, if any,
shall comply with specifications provided from time to time by THL and are, at
all times, subject to the prior written approval of THL.  No advertising,
including cooperative advertising whereby Licensee provides a customer with a
contribution toward the cost of an advertisement for Licensed Products, whether
by way of credit or otherwise, may be used without the prior written consent of
THL; provided that once the form of an in-store or in-trade (including, without
limitation, trade shows collateral material) advertising material has been
approved, then such material may be re-used without any further approval.
Additionally, under no

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circumstances shall Licensee advertise Licensed Products over any medium not
previously approved by THL in writing.  All Labels shall bear at least one of
the Trademarks, but no other trademark or trade name may be used except as may
be required by applicable law or permitted by THL in writing.  Licensee shall
not be permitted to use its name(s) on Licensed Products or Labels displaying
the Trademarks other than as may be required by applicable law or specifically
approved by THL in writing.  Any Labels provided by THL to Licensee shall be so
provided at Licensee’s expense, at THL’s cost of producing and providing the
same.

7.4Branded Shows.  Licensee shall, at Licensee’s sole cost and expense,
participate in and provide Licensed Products in reasonable quantities for
fashion shows held by THL and/or THL’s other licensees.

7.5Trade Shows.  Licensee may not participate in trade shows without the prior
written consent of THL.  To the extent that THL does consent to such
participation, the booth or showroom shall be subject to THL’s prior written
approval in each instance. All expenses for the booth or showroom and in
relation to said trade shows shall be borne by Licensee.

7.6Public Announcements.  Licensee’s press releases and other public
announcements related to Licensee’s operations hereunder and otherwise naming
THL or the Trademarks are subject to the prior written approval by THL, which
consent shall not be unreasonably withheld, delayed or conditioned; except to
the extent that any such announcement is required by law in which event no
consent shall be required.

 

ARTICLE VIII. ROYALTIES AND RELATED FEES

 

8.1

Guaranteed Minimum Royalty.

8.1.1Watch GMR.  Licensee shall, during each Annual Period or portion thereof
(calculated on a pro rata basis), pay to THL the minimum royalties listed below
for the applicable Annual Period solely with respect to sales of Watch Products
(the “Watch GMR”).  Licensee shall not receive credit towards the Watch GMR for
any Percentage Royalty or other payment paid, if any on sales of Jewelry
Products or on Excluded Sales:

Annual Period

Watch GMR

INITIAL LICENSE PERIOD

1/1/20 – 12/31/20

[***]

1/1/21 – 12/31/21

[***]

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1/1/22 – 12/31/22

[***]

1/1/23 – 12/31/23

[***]

1/1/24 – 12/31/24

[***]

RENEWAL LICENSE PERIOD (if any)

Each Annual Period during the Renewal License Period, if any

[***]

The Watch GMR for each Annual Period shall be payable in four equal installments
by no later than January 1, April 1, July 1 and October 1 of such Annual
Period.  Notwithstanding the foregoing, the installment of the Watch GMR for any
quarter shall be payable only to the extent of the excess, if any, of (x) such
installment plus the aggregate amounts payable under this Section 8.1.1 for all
prior quarters in any Annual Period over (y) the aggregate actual payments under
this Section 8.1.1 and Section 8.2 solely with respect to Watch Products for all
prior quarters in respect of such Annual Period.

8.1.2Jewelry GMR. Licensee shall, during each Annual Period or portion thereof
(calculated on a pro rata basis), pay to THL the minimum royalties listed below
for the applicable Annual Period solely with respect to sales of Jewelry
Products (the “Jewelry GMR”).  Licensee shall not receive credit towards the
Jewelry GMR for any Percentage Royalty or other payment paid, if any, on sales
of Watch Products or on Excluded Sales:

 

Annual Period

Jewelry GMR

INITIAL LICENSE PERIOD

1/1/20 – 12/31/20

[***]

1/1/21 – 12/31/21

[***]

1/1/22 – 12/31/22

[***]

1/1/23 – 12/31/23

[***]

1/1/24 – 12/31/24

[***]

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RENEWAL LICENSE PERIOD (if any)

Each Annual Period during the Renewal License Period, if any

[***]

The Jewelry GMR with respect to each Annual Period shall be payable in four
equal installments by no later than January 1, April 1, July 1 and October 1 of
such Annual Period.  Notwithstanding the foregoing, the installment of the
Jewelry GMR for any quarter shall be payable only to the extent of the excess,
if any, of (x) such installment plus the aggregate amounts payable under this
Section 8.1.1 for all prior quarters in any Annual Period over (y) the aggregate
actual payments under this Section 8.1.1 and Section 8.2 solely with respect to
Jewelry Products for all prior quarters in respect of such Annual Period.

 

8.2Percentage Royalty.  Except as specifically exempted, all sales of Licensed
Products require the payment of percentage royalties (“Percentage Royalties”)
equal to [***] of Net Sales. Percentage Royalties shall be payable quarterly in
arrears on each April 30, July 30, October 30 and January 30 of each during the
License Period; provided, however, that the last payment of Percentage Royalties
with respect to sales during the License Period shall be made within 30 days
after the end of the License Period.  Notwithstanding the foregoing, Percentage
Royalties shall be payable only to the extent of the excess, if any, of (i) the
aggregate Percentage Royalties payable for Watch Products and for Jewelry
Products, as the case may be, for such quarter and all prior quarters in respect
of such Annual Period over (ii) the aggregate amount of the Watch GMR or the
Jewelry GMR payments, as the case may be, made to date under Section 8.1 in
respect of such Annual Period plus the aggregate amount of payments under this
Section 8.2 with respect to the applicable Products for all prior quarters in
respect of such Annual Period. Payment of the Watch GMR and the Jewelry GMR
shall not relieve Licensee of its obligation to make the Percentage Royalty
payments with respect to the applicable Products, it being understood and agreed
by Licensee that it is obligated each Annual Period to pay, with respect to
Watch Products, the greater of (a) the Watch GMR and (b) the Percentage Royalty
with respect to sales of Watch Products made during such Annual Period and, with
respect to Jewelry Products, the greater of (x) the Jewelry GMR and (y) the
Percentage Royalty with respect to sales of Jewelry Products made during such
Annual Period.    All royalties shall accrue upon the sale of Licensed Products,
regardless of the time of collection by Licensee. No Percentage Royalties shall
be due on purchases of Licensed Products by TH Stores, TH Sites, Licensed Stores
or Licensed Sites.

8.3Royalty Statements.  At the time when each Percentage Royalty payment is due,
Licensee shall deliver to THL a royalty statement in a form provided by THL from
time to time, signed by a duly authorized officer of Licensee and certified by
such officer as complete and accurate, setting forth for each month during the
immediately preceding calendar quarter, and for such calendar quarter in the
aggregate, in the case of the statement for each calendar quarter ending
December 31, for each Annual Period in the aggregate, all of the following
information, separately for Watch Products and for Jewelry Products: (i) Gross
Sales by product category in U.S. Dollars using the Exchange Rate; (ii) the
amount of returns, allowance and discounts which properly may be deducted from
Gross Wholesale Sales in calculating Net Wholesale Sales, as applicable; (iii)
Net Sales by product category in U.S. Dollars using the Exchange Rate; (iv)
Gross Sales and Net Sales by country in U.S. Dollars using the Exchange Rate,
including separately Net Sales to THL,  Net Sales of Seconds, Net Sales to Off
Price Accounts, total units

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of Seconds sold (only for each statement for the calendar quarter ending
December 31) and total units sold to Off Price Accounts (only for each statement
for the calendar quarter ending December 31); (v) Net Sales in North America by
account in U.S. Dollars using the Exchange Rate; and (vi) a computation of the
amount of Percentage Royalties due for each product category of the Licensed
Products.  Licensee shall provide a complete list of customers to whom Licensed
Products were shipped during the applicable reporting period. At least once
annually, or more often at THL’s written request, Licensee shall also submit to
THL a certification from its chief financial officer that its statements up
through that date have been in compliance with the requirements of this Section
8.3.  Receipt or acceptance by THL of any statement furnished, or of any sums
paid by Licensee, shall not preclude THL from questioning their correctness at
any time.  On the other hand, reports submitted by Licensee shall be binding and
conclusive on Licensee in the event of any termination of this Agreement based
on a breach by Licensee arising out of any payment or report.

8.4Merchandise Coordinator Program. Licensee may use its own merchandise
coordinators provided that Licensee establishes a contact person who shall work
with THL’s representatives in respect of Licensee’s merchandise
coordinators.  THL may review the performance of Licensee’s coordinators and, if
THL reasonably determines that Licensee’s coordinators are not performing at a
level consistent with industry standards, then THL shall so notify Licensee,
specifying the inadequate performance in reasonable detail. Within 45 days after
its receipt if such notice, Licensee shall remedy the inadequate
performance.    

 

8.5No Set-Off.  The obligation of Licensee to pay royalties hereunder is
absolute notwithstanding any claim that Licensee may assert against
THL.  Licensee shall not have the right to set-off, compensate or make any
deduction from such royalty payments for any reason whatsoever.  In the event
that Licensee fails to make any payments hereunder when due in breach of this
Agreement, Licensee shall reimburse THL for all reasonable costs and expenses
(including reasonable attorneys’ fees) incurred by THL in recovering the amounts
owed.

 

ARTICLE IX. MANNER OF PAYMENT, INTEREST, BOOKS AND RECORDS, INSPECTION

 

9.1Manner of Payment. All payments required by Licensee hereunder shall be made
by wire transfer of immediately available funds in US Dollars to the bank
accounts designated by THL, as set forth in Exhibit H hereto, as follows: (i)
[***] of such payments to THL and (ii) [***] of such payments to be made to
THL’s Affiliate, Tommy Hilfiger Europe BV, which provides on-going global design
and marketing oversight and direction for the benefit of Licensee to enhance the
value of the Trademarks, in connection with the manufacture, distribution, and
sale of products in the Territory.  All payments required by Licensee hereunder,
unless otherwise instructed by THL, shall be made in U.S. Dollars.

9.2Interest on Late Payments. In addition to any other remedy available to THL,
if any payment due under this Agreement is delayed for any reason, interest
shall accrue and be payable, to the extent legally enforceable, on such unpaid
principal amounts from and after the date on which the same

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became due, at a per annum rate equal [***] the prime rate of interest in effect
on the due date of the late payment as published by JP Morgan Chase Bank in New
York, New York, U.S.A.

 

9.3Taxes. Licensee shall bear all taxes, duties and other governmental charges
in the Territory relating to or arising under this Agreement (except taxes on
THL’s income), any stamp or documentary taxes or duties, turnover, sales or use
taxes, value added taxes, excise taxes, customs or exchange control duties and
any other charges relating to or on any royalty payable by Licensee to
THL.  Licensee shall obtain, at its own cost and expense, all licenses, reserve
bank, commercial bank or other bank approvals, and any other documentation
necessary for the importation of materials and the transmission of royalties and
all other payments relevant to Licensee’s performance under this Agreement.  If
any tax or withholding is imposed on royalties, Licensee shall obtain certified
proof of the tax payment or withholding and immediately transmit it to THL
within 30 days after Licensee pays such tax payment or withholding to the
applicable taxing authority. If Licensee does not transmit proof of the
withholding tax payment (or other tax payment) within such 30 day period, then
the amount payable by Licensee shall be increased to provide to THL such amount
as would be payable to THL in the absence of any such tax, charge, duty or
impost.

9.4Books and Records.  Licensee shall, at its sole cost and expense, maintain
complete and accurate books and records (specifically including, without
limitation, the originals or copies of documents supporting entries in the books
of account) covering all transactions arising out of or relating to this
Agreement at least three years after the date of such transaction.  THL shall
have the right, upon ten days prior written notice to Licensee, during normal
business hours, for the duration of this Agreement and for three years
thereafter, to examine and copy said books and records and all other documents
and materials in the possession of and under the control of Licensee with
respect to the subject matter and terms of this Agreement that have not been
previously examined hereunder.  The exercise by THL of any right to review at
any time or times or the acceptance by THL of any statement or payment shall be
without prejudice to any of THL’s rights or remedies and shall not bar THL from
thereafter disputing the accuracy of any payment or statement and Licensee shall
remain fully liable for any balance due under this Agreement.  Licensee shall
assign style numbers to Licensed Products that are unique from numbers for any
products other than the Licensed Products that Licensee may manufacture and/or
sell.  The style number assigned to each Licensed Product shall be identical to
the style number utilized to identify that Licensed Product in all of Licensee’s
books and records.  All documents evidencing the sale of Licensed Products shall
state the style number of each of such products.  Licensee may not use terms
such as “assorted” or “irregular” without a style specification.  All sales of
the Licensed Products shall be made on invoices that (a) (except for retail
sales) contain sales only of the Licensed Products, (b) contain a statement that
the invoice shall be paid only to an account owned by Licensee or its assignee,
and (c) are recorded in a separate ledger account, or in lieu if the foregoing,
via appropriate EDI communication.

9.5Underpayments.  If, upon any examination of Licensee’s books and records, THL
shall discover any underpayment by Licensee, Licensee will make all payments
required to be made to correct and eliminate such underpayment within 10 days
after THL’s demand for such payment, which demand sets forth in reasonable
detail all such alleged underpayments.  Licensee will reimburse THL for the
reasonable costs of said examination within 10 days after THL’s demand if said
examination reveals a royalty or advertising underpayment of [***] or more for
any period. Any payment by Licensee hereunder shall not preclude Licensee from
contesting the results of THL’s audit.

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9.6Financial Statements.  Licensee shall provide to THL copies of its annual
report on form 10-K and quarterly reports on form 10-Q as filed with the United
States Securities and Exchange Commission within five days after the date such
reports are filed, provided that such obligation shall be deemed satisfied so
long as such reports are publicly available.

 

 

ARTICLE X. REPRESENTATIONS AND WARRANTIES

 

10.1Representations and Warranties of Licensee.  Licensee hereby represents
warrants and covenants that:

 

(a)it has the full right, power and authority to enter into this Agreement, and
to perform all of its obligations hereunder;

(b)it is financially capable of undertaking the business operations which it
conducts and of performing its obligations hereunder;

(c)it is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation;

(d)all necessary acts have been effected by it to render this Agreement valid
and binding upon it; and

(e)in its negotiations relative to this Agreement, it has not utilized the
services of any finder, broker or agent, and it owes no commission or fees to
any such person in relation hereto.  Licensee agrees to indemnify THL against,
and hold it harmless from, any and all liabilities (including, without
limitation, reasonable legal fees) to any person, firm or corporation claiming
commissions or fees in connection with this Agreement or the transactions
contemplated hereby as a result of an agreement with or services rendered to
Licensee.

Representations and Warranties of THL

.  THL hereby represents, warrants and covenants that:

(a)it has the right, power and authority to execute and deliver this Agreement
and to grant the rights provided hereunder to Licensee;

(b)it is a private company with limited liability, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation,

(c)all necessary company acts have been effected by it to render this Agreement
valid and binding upon it;

(d)in its negotiations relative to this Agreement, it has not utilized the
services of any finder, broker or agent, and it owes no commission or fees to
any such person in relation hereto.  

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THL agrees to indemnify Licensee against, and hold it harmless from, any and all
liabilities (including, without limitation, reasonable legal fees) to any
person, firm or corporation claiming commissions or fees in connection with this
Agreement or the transactions contemplated hereby as a result of an agreement
with or services rendered to THL; and

(e)no other persons or entities have or shall have any right to sell or market
Licensed Products in the Territory during the License Period, except as
otherwise provided for herein.

 

ARTICLE XI. CONFIDENTIALITY AND HIRING OF EMPLOYEES

 

11.1Confidentiality.  Any and all information of any kind in any form acquired,
devised or developed from either party, such party’s files or such party’s
personnel, suppliers, subcontractors, or Third Party Manufacturers by the other,
including but not limited to the terms of this Agreement, prints, designs,
ideas, sketches and other materials or Trade Secrets, shall be deemed
confidential and shall be maintained by each such party and its Affiliates and
their respective employees, attorneys, accountants and bankers, in strict
confidentiality.  The provisions of this Section 11.1 shall not apply to
information that is (a) generally known to the public, (b) previously known to
the recipient, or (c) properly received by the recipient outside the scope of
this Agreement and from any third party not affiliated with the protected party
and not under any duty to the protected party not to disclose such
information.  Each party agrees not to disclose, in whole or in part, any
confidential information of the other party to any third party, except upon
consent of the other or pursuant to, or as may be required by law, or in
connection with regulatory or administrative proceedings and only then with
reasonable advance notice of such disclosure to the other, and provided, (a)
that each such person shall agree to be bound by the terms of this Agreement;
(b) that confidential information shall be used by the party to whom disclosed,
and such persons solely as provided hereunder; and that confidential information
shall be revealed only to those officers, directors and employees of such party,
respectively, on a need to know basis.  Licensee shall take all
reasonable precautions to protect the secrecy of the materials, samples, and
designs constituting confidential information prior to their commercial
distribution or the showing of samples for sale, and shall not sell any
merchandise employing or adapted from any of said designs except under the
Trademarks.  THL shall take all reasonable precautions to protect the secrecy of
the original designs created by Licensee for Licensed Products prior to their
advertisement, commercial distribution or the showing of samples for sale. 
Neither THL nor Licensee may, at any time during the License Period disclose or
use for any purpose, other than as contemplated by this Agreement, any revealed
or otherwise acquired confidential information and data relating to the business
of the other.  The identity of Licensee’s manufacturers, subcontractors and
suppliers shall be deemed Confidential Information and THL shall not directly
contract with the same in connection with the manufacture of Licensed Products
for a period of one year after the expiration or termination of this Agreement,
without Licensee’s prior approval.

11.2Hiring of Employees.  [***].  Nothing herein shall prevent a party from (i)
engaging in any general solicitations for employees or public advertising of
employment opportunities not directed at employees of the other party or its
Affiliates and hiring an employee or former employee of such other party or its
Affiliates who it learns of through such general solicitations or public
advertising; (ii) hiring any employee or former employee of such other party or
its Affiliates that seeks employment without any

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inducement by the hiring party; or (iii) hiring any former employee of such
other party or its Affiliates whose employment was involuntarily terminated by
such other party.

 

ARTICLE XII. TRADEMARKS AND COPYRIGHTS

 

12.1Rights to the Trademarks. Licensee acknowledges the great value of the
goodwill associated with the Trademarks, and acknowledges that the Trademarks
and all the rights therein, and goodwill attached thereto, belong exclusively to
THL.  Licensee shall not, during the Term or thereafter: (a) do, or otherwise
suffer to be done, any act or thing that might, in any way, adversely affect the
rights of THL in and to the Trademarks or that, directly or indirectly, may
reduce the value of the Trademarks or detract from their reputation; (b)
prosecute an application to register the Trademarks; (c) attack THL’s title or
right in and to the Trademarks; (d) attack the validity of this license or the
Trademarks; or (e) contest the fact that Licensee’s rights under this Agreement
(i) are solely those of a manufacturer and distributor, and (ii) subject to the
provisions of Article 14 hereof, cease upon expiration or termination of this
Agreement.

12.2Protecting the Trademarks. Licensee shall cooperate fully and in good faith
with THL for the purpose of securing, preserving and protecting THL’s rights in
and to the Trademarks.  At the request of THL, Licensee shall execute and
deliver to THL any and all customary documents and do all other acts and things
that THL reasonably deems necessary or appropriate (at THL cost) to make fully
effective or to implement the provisions of this Agreement relating to the
ownership, use or registration of the Trademarks.  THL shall reimburse Licensee
for Licensee’s reasonable out of pocket expenses incurred in providing the
foregoing.

12.3Compliance with Notice and Other Requirements.  Licensee shall use the
Trademarks strictly in compliance with all applicable legal
requirements.  Whenever the Trademarks are used on any item of packaging or
labeling or in any advertisement, they shall be followed, in the case of a
registered trademark by the registration symbol, i.e., ® and in the case of all
other trademarks by the symbol ™, or other appropriate symbols of similar import
acceptable to THL or required by applicable law.  Upon expiration or termination
of this Agreement for any reason whatsoever, Licensee shall execute and deliver
to THL any and all documents required by THL for terminating any and all
registered user agreements and other documents regarding Licensee’s use of the
Trademarks.

12.4Ownership of Copyrights.  Except as otherwise provided in Section 5.12, any
copyrights created by or for Licensee in any sketch, design, print, package,
label, tag or the like, designed and approved for use in connection with
Licensed Products, are hereby assigned by Licensee to THL.  Licensee is granted
a license to use the same during the Term and under the conditions set forth in
this Agreement.  Licensee shall not, at any time, do, or otherwise suffer to be
done, any act or thing that may adversely affect any rights of THL in such
copyrights and shall, at THL’s request, do all things reasonably required by THL
to preserve and protect said rights, including the placement of appropriate
notices of copyright ownership. The license to use the copyrighted materials and
the duties of the Licensee hereunder are essential terms of this Agreement.

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12.5Infringement. Licensee shall promptly notify THL of any infringement or
other misuse of the Trademarks that becomes known to it or the use by any person
of any trademarks or trade names confusingly similar to the Trademarks that
comes to its attention.  THL shall take such action as it deems advisable, and
Licensee shall assist in such action at THL’s expense, as THL reasonably may
request.  In no event, however, shall THL be required to take any action if it
deems it inadvisable to do so, and Licensee shall have no right to take any
action without the prior written consent of THL.  Any approved action taken by
Licensee shall be at Licensee’s cost.   However, in the event of any
infringement or other misuse of any of the Trademarks on items identical or
similar to Licensed Products, THL shall take the measures it deems appropriate
to protect the Trademarks and Licensee, at THL’s request, shall pay the
reasonable costs incurred therefor.

12.6Counterfeit Protection. Licensee shall cooperate with THL as reasonably
requested by THL in all efforts to prevent counterfeiting.  Licensed Products
shall bear and use any counterfeit preventive system, devices or labels
reasonably designated by THL.  At its option, THL may supply the system, devices
or labels (provided that they are supplied on a timely basis), that Licensee
shall use for which Licensee shall pay all reasonable out of pocket costs
incurred by THL, in advance upon presentation to Licensee of appropriate
documentation substantiating such costs.  In no event shall Licensee be required
to pay costs hereunder in excess of [***] during any Annual Period.

12.7Use of Other Trademarks.  During the Term, neither Licensee, nor any
Affiliate of Licensee, or company in which the controlling shareholders of
Licensee are partners, or in which Licensee is a partner, may act as a licensee
or distributor in the Territory of any watches or jewelry, under any name which
is set forth on Exhibit I, or which may be reasonably added to Exhibit I by THL
at the commencement of the Renewal License Period, if any, unless expressly
consented to by THL in writing, or as a result of the acquisition by Licensee of
substantially all of the assets of or the outstanding securities of or otherwise
acquiring control of an entity which, other than as its primary function, acts
as a distributor or licensee of products bearing such competitive names.  If
such consent is given, unless prohibited by other agreements, Licensee shall
provide THL with samples of any such competitive products it manufactures and
distributes that do not bear the Trademarks.  (Licensee may act as a
manufacturer only of such products, provided that Licensee is not the licensee
or distributor thereof).  In all cases, the design and style of any such
products or any of Licensee's private label products, shall be clearly
distinguished from Licensed Products.  A breach of this clause shall constitute
a violation of Licensee's obligation to use its best efforts to exploit this
license.  Licensee shall maintain the design, merchandising, packaging, sales
and display of all of Licensee's other products separate and distinct from
Licensed Products.

12.8Use of Trademarks on Invoices, etc.  Licensee shall submit to THL for prior
approval the proposed use of the Trademarks on invoices, business cards, order
forms, stationery and related materials and in advertising in telephone and
other directory listings.

12.9Monitoring.  Licensee shall actively monitor use of the Trademarks by third
parties, including by its customers, and shall use its best efforts to see that
such use does not impair the image or reputation of the Trademarks, provided,
however, that Licensee shall have no obligation to impose any unlawful
restrictions or to attempt to impose any unlawful restrictions on any third
party.

 

 

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ARTICLE XIII. INSOLVENCY

13.1Effect of Proceeding in Bankruptcy. If (a) either party institutes for its
protection or is made a defendant in any proceeding under bankruptcy,
insolvency, reorganization or receivership law, and in the event a party is made
a defendant in such proceeding, such proceeding is not dismissed within 60 days
following its institution, or (b) either party is placed in receivership or
makes an assignment for benefit of creditors, and such receivership is not
removed within 60 days following appointment, the other party may elect to
terminate this Agreement immediately by written notice to the other party
without prejudice to any right or remedy the terminating party may have,
including, but not limited to, damages for breach.

 

13.2Rights Personal.  The license and rights granted hereunder are personal to
Licensee.  No assignee for the benefit of creditors, receiver, trustee in
bankruptcy, sheriff or any other officer or court charged with taking over
custody of Licensee’s assets or business, shall have any right to continue
performance of this Agreement or to exploit or in any way use the Trademarks if
this Agreement is terminated pursuant to Section 13.1, except as may be required
by law.

 

13.3Trustee in Bankruptcy.  Notwithstanding the provisions of Section 13.2
above, in the event that, pursuant to applicable bankruptcy law a trustee in
bankruptcy, receiver or other comparable person, of Licensee, or Licensee, as
debtor, is permitted to assume this Agreement and does so and, thereafter,
desires to assign this Agreement to a third party, which assignment satisfies
the requirements of the applicable law, the trustee or Licensee, as the case may
be, shall notify THL.  Said notice shall set forth the name and address of the
proposed assignee, the proposed consideration for the assignment and all other
relevant details thereof.  The giving of such notice shall be deemed to
constitute an offer to THL to have this license assigned to it or its designee
for such consideration, or its equivalent in money, and upon such terms as are
specified in the notice.  THL may accept the aforesaid offer only by written
notice given to the trustee or Licensee, as the case may be, within 15 days
after THL’s receipt of the notice.  If THL fails to deliver such notice within
the said 15 days, such party may complete the assignment referred to in its
notice, but only if such assignment is to the entity named in said notice and
for the consideration and upon the terms specified therein.  Nothing contained
herein shall be deemed to preclude or impair any rights that THL may have as a
creditor in any bankruptcy proceeding.

13.4Effect of THL Bankruptcy. All rights and licenses granted by THL hereunder
are and shall be deemed to be rights and licenses to “intellectual property,” as
such term is used in and interpreted under section 365(n) of the United States
Bankruptcy Code (the “Code”). Licensee shall have all rights, elections, and
protections under the Code and all other applicable bankruptcy, insolvency, and
similar laws with respect to this Agreement. Without limiting the generality of
the foregoing, THL acknowledges and agrees that, if it or its estate becomes
subject to any bankruptcy or similar proceeding, (a) subject to Licensee's
rights of election under section 365(n), all rights, licenses, and privileges
granted to Licensee under this Agreement will continue subject to the respective
terms and conditions hereof, and will not be affected, even by THL’s rejection
of this Agreement, and (b) Licensee shall be entitled to a complete duplicate
of, or complete access to, as appropriate, all such intellectual property and
embodiments thereof which, if not already in Licensee's possession, shall be
promptly delivered to Licensee or its designee, unless THL elects to and does in
fact continue to perform all of its obligations hereunder.

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ARTICLE XIV. EXPIRATION AND TERMINATION

14.1Other Rights Unaffected.  Expiration of the Term or termination of this
Agreement shall not affect any obligation of either party to make payments to
the other hereunder accruing prior to such expiration or termination or in
respect to an antecedent breach of this Agreement, and shall not prejudice any
other right of either party hereunder including, without limitation, damages for
breach and each party agrees to reimburse the other for any reasonable costs and
expenses (including reasonable attorneys’ fees) incurred by such other party in
enforcing its rights hereunder. Except as required by law, no assignee for the
benefit of creditors, receiver, liquidator, sequestrator, trustee in bankruptcy,
sheriff or any other officer of the court or official charged with taking over
custody of Licensee’s assets shall have the right to continue the performance of
this Agreement.

14.2Immediate Right of Termination of the License.  If any of the following
grounds for termination shall occur, THL may elect, by written notice to
Licensee, to terminate this Agreement immediately:

(a)Licensee materially breaches Section 11.1 hereof;

 

(b)Licensee places, or participates in, any (i) advertising or promotional
materials that have been disapproved by THL, provided THL has notified Licensee
in writing of such disapproval; (ii) unapproved advertising or promotional
materials that, in THL’s reasonable opinion, are likely to negatively affect the
value of the Trademark or the reputation of the Trademark or THL;

 

(c)Licensee (i) sells Licensed Products to any customer that has been
disapproved by THL, provided THL has notified Licensee in writing of such
disapproval prior to such sale; (ii) makes sales in excess of the Off-Price
Caps; (iii) sells [***] Licensed Products to any customer that has not been
approved [***]; (iv) manufactures or sells Licensed Products that, in THL’s
reasonable opinion, are not in substantial conformity with and at least equal in
quality to samples of such Licensed Products approved by THL provided such
Licensed Products, in THL’s reasonable opinion, are likely to negatively affect
the value of the Trademark or the reputation of the Trademark or THL
(“Materially Deficient Products”) or (v) fails to remove Materially Deficient
Products from the marketplace as soon as reasonably practicable after receipt of
THL’s notice thereof;

(d)Licensee exhibits, displays or distributes unapproved products that bear the
Trademarks which action would reasonably be expected to adversely affect any of
the image, prestige, value or ownership of the Trademarks, the Licensed Products
or THL;

 

(e)Licensee intentionally misrepresents any financial data regarding its
business under this Agreement or underpays royalties [***];

 

(f)Licensee institutes for its protection, or is made a defendant, in any
proceeding under bankruptcy, insolvency, reorganization or receivership law, or
Licensee is placed in receivership or makes an assignment for benefit of
creditors or is, or states that it is, unable to meet its debts in the regular
course of business, provided, that in the case of any of the foregoing that is
involuntary, such proceeding or status is not dismissed, stayed or terminated
within 60 days after inception;

 

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(g)Licensee uses the Trademark in an unauthorized or improper manner, including,
without limitation, use of the Trademarks with another trademark or name in
connection with the sale of Licensed Products, other than as a result of
demonstrable inadvertence;

 

(h)Cessation by Licensee of, or the taking of steps by Licensee to cease, its
business;

 

(i)Licensee fails to comply with Sections 16.1 or 16.3;

 

(j)[***]; or

(k)SPL is no longer a wholly-owned subsidiary of MGI.

14.3Termination With Notice and Right to Cure.

14.3.1By THL. If Licensee breaches any of its other obligations under this
Agreement, THL shall have the right to terminate this Agreement upon notice to
Licensee unless Licensee cures the breach within [***] days after its receipt of
written notice of such breach (it being agreed that to cure a breach of Section
6.6 resulting from Licensee’s sale of Licensed Products to an unapproved
customer Licensee shall recall all such Licensed Products in such unapproved
customer’s possession and pay the fine imposed under Section 6.8 within such
[***] day period). Notwithstanding the foregoing, Licensee’s failure to achieve
the Watch Minimum Sales or the Jewelry Minimum Sales shall only give rise to a
right of termination to the extent provided for in Section 6.5 hereof.

14.3.2[***]

14.4 Effect of Termination.

(a)Reversion of Rights.  All of the rights of Licensee under this Agreement
shall terminate and immediately revert to THL.  Licensee, except as specified
below, shall immediately discontinue use of the Trademarks, whether in
connection with the sale, advertisement or manufacture of Licensed Products or
otherwise, and shall not resume the use thereof or adopt any colorable imitation
of the Trademarks or any of their components or designs incorporated therein or
material parts thereof.

(b)Royalties.  All royalties on sales theretofore made shall become immediately
due and payable, provided, however, if this Agreement expires naturally in
accordance with its terms, Licensee shall have the right to continue to make
royalty payments pursuant to Article 9 hereof.

(c)Return of Labels and Other Materials.  At THL’s option, Licensee shall (i)
promptly destroy, or (ii) convey to THL (at a price equal to Licensee’s cost
thereof) and free of all liens and encumbrances, all plates, engravings,
silkscreens, computer tapes, computer disks, hard drives and all other computer
files used by Licensee, molds, stitching patterns or the like used to make or
reproduce the Trademarks in Licensee’s possession or control, and all items
affixed with likenesses or reproductions of the Trademarks in Licensee’s
possession or control whether Labels, bags, boxes, tags or otherwise.  Licensee
shall deliver to THL, free of charge, all sketches, designs and the like in its
possession or control.  THL shall have the option, exercisable upon notice to
Licensee within 30 days after Termination, to negotiate the purchase of the
Labels that were not supplied by THL.  If such negotiations do not result in the
purchase of those Labels, Licensee shall destroy those Labels under the
supervision of THL, and

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Licensee shall deliver to THL a certificate of destruction signed by a senior
financial executive of Licensee. Notwithstanding the foregoing, Licensee shall
have the right to use the Labels during any disposal Period pursuant to Section
14.4(e).

(d)Pending Orders.  Except as otherwise provided below, Licensee shall be
entitled for a period of [***] days after Termination, to consummate all sales
of Licensed Products that were firm upon the date of Termination.

(e)Inventory/Right to Purchase.  Within 10 days of the expiration or termination
of the Agreement, Licensee shall deliver to THL a complete schedule of
Licensee’s inventory of Licensed Products (whether on hand or in transit) and of
related work in progress (“Inventory”) as of the close of business on the date
of such expiration or termination which shall reflect the Landed Cost of each
Licensed Product.  THL shall have the option, exercisable by notice to Licensee,
within 30 days after its receipt of such schedule, to purchase any or all of the
Inventory at [***] (other than Inventory required to consummate sales of
Licensed Products which were firm on the date of such expiration or
termination).  Percentage Royalties shall not be payable with respect to the
purchase of the Inventory by THL.  If THL sends such notice, THL may collect the
Inventory it elects to purchase within 90 days after THL’s notice. THL will pay
for the Inventory upon collection.  If THL does not send such notice, Licensee
may dispose of its Inventory for a period of [***] days (the “Disposal Period”),
subject to Sections 14.4 (f) and (g); provided, however, that such disposition
shall continue to be subject to Licensee's obligations hereunder, including,
without limitation, with respect to the payment of royalties and the approval of
customers.  Licensee shall have the right, in connection with such disposal, to
use the Labels during the Disposal Period. At the end of the Disposal Period, or
if none, upon such termination, any Licensed Products remaining in Licensee’s
possession or control shall, at the request of THL, be destroyed.  THL shall
have the right at any time to conduct a physical inventory of the Licensed
Products then in Licensee’s possession or control.

(f)Non-Conforming Products.  Under no circumstances shall Licensee be permitted
to (i) sell Licensed Products that have not been approved in accordance with
Section 6.3 above or are in any way non-conforming as to style or quality; or
(ii) advertise or promote the Trademarks during the Disposal Period without
THL’s prior approval. The sell-off of Licensed Products shall be subject to all
of Licensee’s obligations hereunder, including, but not limited to, royalty
payment obligations.

(g)No Right to Sell Off.  Notwithstanding the foregoing rights set forth in
subsections (d) and (f) above, unless otherwise agreed to in writing by THL,
there shall be no right to sell off in the event that the Agreement is
terminated due to any breach of this Agreement by Licensee that, in THL’s
reasonable opinion, is likely to negatively affect the value or reputation of
the Trademarks.

(h)Remaining Products.  At the end of the Disposal Period, any Licensed Products
remaining in Licensee’s possession shall be destroyed under the supervision of
THL.

14.4.1Partial Termination.  Upon the termination of the License with respect to
Watch Products or Jewelry Products or with respect to a specific jurisdiction,
all of the rights of Licensee under this Agreement with respect to such category
or jurisdiction, as the case may be, shall forthwith terminate and immediately
revert to THL, all royalties on sales of the applicable Products or within the
applicable jurisdiction shall become immediately due and payable, it being
acknowledged that such partial termination of the License shall not affect any
obligation of Licensee to make payments

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hereunder accruing prior to such termination; Licensee shall forthwith
discontinue all use of the Trademarks on the affected category of Product, or
all use of the Trademarks in the affected jurisdiction, as the case may be,
except that Licensee may during the Disposal Period commencing as of the date of
such termination and ending [***] days thereafter consummate all sales of the
affected Products or within the affected jurisdiction which were firm on the
date of such termination; provided, however, that any advertising used during
the Disposal Period shall be subject to THL’s prior written approval and such
disposition of the Licensed Products shall continue to be subject to Licensee’s
obligations hereunder, including, but not limited to, payments to be made to
THL.  Without limiting the generality of the foregoing, Licensee acknowledges
that sales during the Disposal Period are on a non-exclusive basis.  Subsequent
to the Disposal Period, Licensee shall no longer use the affected Trademark, any
variation, imitation or simulation thereof, or any trademark similar thereto on
the terminated category of Product, or in the affected jurisdiction, as the case
may be.

14.4.2Continued Compliance with Warranty.  Notwithstanding the expiration or
termination of this Agreement for any reason, Licensee will continue to comply
with the terms of the product warranty supplied with Watch Products and will
maintain operations and a supply of components to repair, replace or otherwise
comply with the terms of such warranties, for a two year period following the
date of such expiration or termination.

Survival. All terms of this Agreement shall govern the Disposal Period and all
terms of this Agreement which by their nature are intended to survive the
expiration or termination of this Agreement shall survive such expiration or
termination, including, without limitation

:  Article XI and XV in their entireties, and Sections 6.11, 9.4, 12.1, 14.4
(including 14.4.1) and 17.15.  For the avoidance of doubt, the failure to
identify a provision of this Agreement in the preceding sentence shall not be
construed as evidence that the Parties intended such provision not survive
termination or rescission of this Agreement.

 

14.5Freedom to License.  Starting [***] months prior to the scheduled expiration
of this Agreement, or in the event of (i) the receipt of notice from the
Licensee that it does not intend to renew the License Agreement in its entirety
or with respect to a specific category of Product or jurisdiction; (ii) default
by Licensee that THL reasonably believes could lead to a termination of the
License in whole or in part; (iii) termination of the License in its entirety or
with respect to a specific category of Product, or jurisdiction; or (iv) the
receipt by THL of a notice from Licensee requesting the termination of the
License in its entirety or with respect to a specific category of Product or
jurisdiction, THL shall be free to use, or license to others the right to use,
the Trademark in connection with the manufacture, sale, distribution and
promotion of (x) all products in the Territory; (y) all products in the affected
jurisdiction or (z) the affected category of product in the Territory, as the
case may be; provided, however, that no shipments of Products under the
Trademark produced by or on behalf of THL or pursuant to any such new license
will be permitted prior to the termination or expiration of the License with
respect to the applicable category of Product or jurisdiction.

14.6Compensation.  If THL terminates this Agreement pursuant to Section 14 or
with respect to Watch Products or Jewelry Products pursuant to Sections 6.5.1,
6.5.2, 8.1.1 or 8.1.2, THL shall have the right to receive, and Licensee shall
immediately pay to THL, as liquidated damages, solely with respect to Licensee's
royalty obligations hereunder and not as a penalty, and without limiting THL’s
other remedies available at law or pursuant to this Agreement for non-royalty
obligations, a sum equal to [***].

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The parties hereby agree that the payment set forth herein is reasonable in
light of the anticipated or actual harm caused by Licensee’s breach, the
difficulties of proof of loss and the inconvenience or infeasibility of
otherwise obtaining an adequate remedy, but shall not cure any default and shall
not preclude THL from enforcing the provisions of this Agreement by pursuing any
action or remedy as allowed hereunder or by law, all of which shall be
cumulative.

 

ARTICLE XV. INDEMNIFICATION AND INSURANCE

15.1Indemnification by Licensee.  Each Licensee does hereby jointly and
severally indemnify and hold harmless THL and its respective Affiliates,
including, without limitation, their current, future and former respective
directors, officers, employees, agents, trustees, and representatives (each, an
“Indemnified Party”) from and against any and all losses, liabilities, damages
and expenses (including reasonable attorneys’ fees and expenses), whether
incurred in any action or proceeding between the parties hereto, or otherwise,
which an Indemnified Party may incur or be obligated to pay in any action, claim
or proceeding, for or by reason of any acts, whether of omission or commission,
that may be committed by Licensee (which for purposes of this Section 9.1,
includes its Affiliates) or any of their servants, agents or employees in
connection with Licensee’s performance of this Agreement, including but not
limited to:

(a)any alleged defect in any Licensed Product, regardless of whether the action
is based upon negligence or strict liability, and regardless of whether the
alleged negligence is characterized as “passive” or “active”;

(b)the manufacture, labeling, sale, distribution or advertisement of any
Licensed Product by Licensee;

(c)any violation of any warranty, representation or agreement made by Licensee
pertaining to a Licensed Product; or

(d)the claim of any broker, finder or agent in connection with the making of
this Agreement or any transactions contemplated by this Agreement; or

(e)the use of any secondary mark, slogans, phrases, logos or other indicia in
connection with the Trademarks or the Licensed Products without the prior
approval of THL’s legal and licensing departments.

THL shall give Licensee prompt written notice of any such claim or action and
thereupon Licensee shall undertake and conduct the defense of any suit so
brought; provided, however, that the failure to notify Licensee promptly shall
not relieve Licensee of its obligation hereunder, except to the extent (if any)
that Licensee is actually prejudiced thereby.  In the event an appropriate
action is not taken by Licensee within 30 days of its receipt of notice from
THL, THL shall have the right to defend such claim or action in its own name,
but no settlement or compromise of any such claim or action may be made without
the prior written consent of Licensee, such consent not to be unreasonably
withheld or delayed.  In either case, THL and Licensee shall keep each other
fully advised of all developments and shall cooperate fully with each other and
in all respects in connection with any such defense.  Such indemnification shall
be deemed to apply solely to the amount of the judgment, if any, against THL and
reasonable sums paid by THL in

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connection with its defense, and shall not apply to any consequential damages
suffered by THL which are not included in the aforementioned judgment.  The
provisions of this Section and Licensee’s obligations hereunder shall survive
any termination of the License or recision of this Agreement.

15.2Notice of Suit or Claim.  Licensee shall promptly inform THL by written
notice of any suit or claim against Licensee relating to Licensee’s performance
under this Agreement, whether such suit or claim is for personal injury,
involves alleged defects in the Licensed Products manufactured, sold or
distributed hereunder, or otherwise.

 

15.3Indemnification by THL.  THL does hereby indemnify and hold harmless
Licensee and its Affiliates, and their respective directors, shareholders,
employees and agents from and against any and all losses, liabilities, damages
and expenses (including reasonable attorneys’ fees, costs and expenses) whether
incurred in any action or proceeding between the parties hereto, or otherwise,
which any of them may incur or for which it may become liable or compelled to
pay in any action or claim alleging: (i) THL’s breach of any representation or
warranty in Section 11.1; (ii) that Licensee’s use of the Trademarks in
accordance with the terms of this Agreement violates the rights of a third
party; (iii) that use in Licensed Products of a special design or special fabric
submitted by THL and required by THL to be used by Licensee without any change
thereto and used in accordance with the provisions hereof, violates the
third-party ownership or other patent or other copyright of a third party; or
(iv)  that any advertising or advertising materials created by THL and used in
accordance with the provisions hereof and within any limitation to usage
applicable thereto, violates the copyright of a third party, or limitation or
usage rights as to any model depicted therein.  Licensee will promptly notify
THL of any action or claim brought to its attention; provided, however, that the
failure to promptly notify THL shall not relieve THL of its obligation
hereunder, except to the extent (if any) that THL actually is prejudiced
thereby.  If, however, there is a dispute between THL and Licensee as to whether
the suit was brought as a result of Licensee’s failure to use the Trademarks in
accordance with the terms of this Agreement, Licensee may be required to conduct
such defense unless and until it is determined that no such misuse of the
Trademarks occurred.  Subject to the preceding sentence, in the event an
appropriate action is not taken by THL within 30 days of its receipt of notice
from Licensee, Licensee shall have the right to defend such claim or action in
its own name, but no settlement or compromise of any such claim or action may be
made without the prior written approval of THL.  In either case, THL and
Licensee shall keep each other fully advised of all developments and shall
cooperate fully with each other and in all respects in connection with any such
defense.  Such indemnification shall be deemed to apply solely to the amount of
the judgment, if any, against Licensee, and sums paid by Licensee in connection
with its defense, and shall not apply to any consequential damages suffered by
Licensee which are not included in the aforementioned judgment.  Such
indemnification shall not apply to any damages sustained by Licensee by reason
of such claimed infringement other than those specified above.  The provisions
of this Section 9.3 and the obligations of THL set forth herein shall survive
the expiration or other termination of this Agreement.

15.4Insurance.  

15.4.1Requirement.  Without limiting Licensee’s liability pursuant to the
indemnity provisions of this Agreement, Licensee shall maintain commercial
general liability insurance (including umbrella insurance) in the amount of at
least [***] (combined single limit per occurrence, and in the aggregate) with a
broad form property damage liability endorsement.  This insurance shall include

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broad form blanket contractual liability, personal injury liability, advertising
liability, products and completed operations liability.  Each coverage shall be
written on an “occurrence” form.

15.4.2Theft and Destruction Coverage.  Licensee shall purchase insurance against
theft and destruction of the Licensed Products which shall (i) be written on an
“all risk” basis, including, without limitation, crime/employee dishonesty,
flood and earthquake coverage; (ii) provide that Licensee shall be reimbursed
for loss in an amount equal to the manufacturer’s selling price for the Products
(either by a selling price endorsement or business interruption insurance);
(iii) be in effect while goods are on premises owned, rented or controlled by
Licensee and while in transit or storage; and (iv) include a brand and label
clause stating that the insurer will pay the cost of removing THL’s name from
damaged merchandise and relabeling goods.  

15.4.3General Provision.  The insurance described in Section 15.4.1 shall
include: (i) a cross-liability endorsement; (ii) an endorsement stating that THL
shall receive at least 30 days’ written notice prior to cancellation or
non-renewal of coverage; (iii) an endorsement naming THL and its Affiliates as
additional insureds; (iv) an endorsement stating that the insurance required by
this Agreement is primary and that any insurance purchased by THL shall only
apply in excess of the insurance purchased by Licensee; and (v) a waiver of
subrogation in favor of THL.

15.4.4Approved Carrier/Policy Changes.  All insurance shall be obtained from an
insurance company rated by A.M. Best as [***] or better.  Licensee shall give at
least 30 days’ prior written notice to THL of the cancellation or any
modification of such insurance policy that would affect THL’s status or benefits
thereunder.  This insurance may be obtained for THL by Licensee in conjunction
with a policy which covers products other than the Licensed Products.

15.4.5Evidence of Coverage.  Not later than 20 days from the date hereof,
Licensee shall furnish to THL certificates of insurance in form and substance
reasonably satisfactory to THL evidencing the required insurance, and Licensee
shall, upon THL’s request therefor, furnish to THL proof of the maintenance and
renewal of the required insurance in the form of certificates.

 

15.4.6Territory.  The insurance set forth in this Section must cover the entire
Territory.

 

ARTICLE XVI. COMPLIANCE WITH LAWS

16.1Compliance with Laws.  Licensee shall comply with all laws, rules,
regulations and requirements of any governmental body which may be applicable to
the operations of Licensee contemplated hereby, including, without limitation,
as they relate to the manufacture, distribution, sale or promotion of Licensed
Products, notwithstanding the fact that THL may have approved such item or
conduct.  Licensee may not conduct business that in any way relates to this
License Agreement or authorize third parties to conduct such business with any
entity or individual (i) who is a Prohibited Entity or Individual; (ii) that
would otherwise cause a violation of United States law and regulations; or (iii)
that is invested in the cotton sector in Uzbekistan or Turkmenistan or using
cotton sourced from Uzbekistan or Turkmenistan.  

 

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16.2Equitable Relief.  The parties shall be entitled to seek equitable relief by
way of temporary and permanent injunction and such other and further relief as
any court with jurisdiction may deem just and proper.

16.3Anti-Bribery/Anti-Corruption.  Without limiting the generality anything set
forth in this Agreement, Licensee acknowledges that THL and PVH are global
companies based in the United States that are subject to the United States
Foreign Corrupt Practices Act of 1977, as amended, the United Kingdom Bribery
Act of 2010, as amended, and other local fraud and anti-corruption laws in the
countries in which THL operates (collectively “Anti-Bribery
Laws”).  Accordingly, in connection with this Agreement, Licensee agrees that it
shall not engage in any conduct that would cause THL to violate any of the
Anti-Bribery Laws, including authorizing, offering, promising or giving anything
of value (including, without limitation, Licensed Products), directly or
indirectly, to any Government Official (defined below) in order to obtain or
retain business or otherwise secure an improper advantage.  “Government
Officials” include (1) any officer or employee of any government agency or
entity, including elected officials, (2) any candidate, employee or official of
a political party, (3) any legislative, administrative or judicial official, (4)
any employee of a public international organization, (5) any employee of an
entity that the government owns or controls through investment, management,
oversight or subsidies, that performs a government function (e.g., banking,
health, public safety, or media services, tax administration, utilities), and
(6) any person otherwise categorized as a government official under local
law.  Examples of Government Officials include customs officials, government
inspectors, tax auditors and employees of state-owned companies.  Licensee
acknowledges it is aware of the penalties and legal consequences involved in
participating in corrupt activities.  In addition, Licensee acknowledges that
THL has a strict policy regarding ethics, and specifically with respect to
payments and gifts to its associates.  Any offer to, and acceptance by, any of
THL’s or its Affiliates’ associates of money, gifts, travel or entertainment or
other consideration that is intended to or may be construed as an inducement to
act (whether by commission or omission) in any manner is strictly prohibited.  

 

ARTICLE XVII. MISCELLANEOUS

17.1Definitions.  Each of the following terms has the meaning ascribed thereto
in the Section indicated below next to such term:

SectionSection

Defined TermDefined InDefined TermDefined In

 

 

2009 Agreement

Recital

Advertising Contribution

7.1.3

Advertising Expenditure

7.3

Affiliates

1.1

Agreement

Preamble

Annual Period

2.1

Anti-Bribery Laws

16.3

Approved Accounts

6.6

Calendar

5.1

Carryover Period

7.3

Close-Outs

6.6.2(c)

Disposal Period

14.4€

Distributor

1.5

E-Commerce

1.1.1

Effective Date

Preamble

Europe

3.1

Exchange Rate

6.5.3

Full Price Accounts

6.6.2(b)

Government Officials

16.3

Gross Wholesale Sales

6.4

Hour Time Site

1.1.1

Indemnified Party

15.1

Initial License Period

2.1

Inventory

14.4(e)

Jewelry GMR

8.1.2

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Jewelry GMA

7.1.2

Jewelry Minimum Sales

6.5.2

Jewelry Products

6.5.2

Labels

5.8

Latin America

3.1

License

1.1

License Period

2.2

Licensed Products

Recital

Licensed Sites

3.1

Licensed Stores

3.1

Licensee

Preamble

Licensing Forecast

3.1

Materially Deficient Products

14.2(c)

MGI

Preamble

Movado Outlets

1.1

Net Sales

6.4

Net E-Commerce Sales

6.4

Net Wholesale Sales

6.4

Non-Conforming Products

6.4

Notice of Termination

8.4

Off-Price Accounts

6.6.2

Off-Price Caps

6.6.2

Pan Pacific

3.1

Penalty

6.8

Penalty Period

6.8

Penalty Royalty

6.6.3

Percentage Royalties

8.2

Person

11.4

Products

Recital

Program Sales

6.6.2

Prohibited Entity or Individual

5.15.1

Party(ies)

Preamble

PVH

Recital

Quality

5.2

Renewal License Period

2.2

Seasonal Collection

5.1

Seconds

6.6.2(a)

Seconds Cap

6.6.2

Shortfall

7.3

SPL

Preamble

Standards

5.14

Summary Report

7.2.2

Territory

Recital

TH Outlets

6.12.13

TH Sites

3.1

TH Stores

3.1

Third Party Licensee

1.1.3

Third-Party Manufacturing Agreement

5.15.4

THL

Preamble

Trademarks

Recital

Transfers

14.2(j)

Unapproved and Prohibited Sales

6.8

Watch GMR

8.1.1

Watch GMA

7.1.1

Watch Minimum Sales

6.5.1

Watch Products

6.5.1

 

 

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17.2Notices.  Any notice, request for approval, or communication  required or
arising out of or under this Agreement shall be effective only on the day after
the notice, service or communication is sent by express mail or next business
day courier service (e.g., FedEx Courier); or five days after the date of
mailing by first class registered mail; provided, however, that
notices/responses required under this Agreement in connection with approvals
(e.g., as required under Article V), may be satisfied by an e-mail
communication, which delivery shall be effective upon confirmation of receipt
and acceptance of such notice/response, so long as such confirmation is not an
automatic bounce back message received by the sender.  All notices shall be sent
to the Parties at the addresses listed below or to such other persons and
addresses as may be designated in writing by the Parties to each other.  The
date a notice shall be deemed to be transmitted, sent by overnight air courier
or mailed shall be the date at the notifying Party’s place of business at the
time of transmission, sending or mailing provided that the notice is placed into
the hands of the express company or USPS on such date and a receipt is issued
therefor.

 

To THL:

 

All correspondence regarding royalty statements, financial statements,
compliance documents, etc. should now be mailed to:

 

Tommy Hilfiger Licensing

1001 Frontier Road

Bridgewater, New Jersey 08807

 

All Other Notices to THL:TOMMY HILFIGER LICENSING, LLC

285 Madison Avenue

New York, NY 10017

Attn:  President, Licensing

Telephone: (212) 548-1341
Facsimile: (646) 304-2834

 

With a copy to:TOMMY HILFIGER U.S.A., INC.
285 Madison Avenue
New York, New York 10017
Attention:  Legal Department
Telephone: (212) 548-1605
Facsimile: (212) 292-9616

 

To LICENSEE:MOVADO GROUP, INC.

650 From Road, Ste. 375

Paramus, NJ 07652-3556

Attention: President – Tommy Hilfiger Watches

Telephone: (201) 267-8000

 

With a copy to:MOVADO GROUP, INC.

650 From Road, Ste. 375

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Paramus, NJ 07652-3556

Attention: President –Licensed Brands

Attention: General Counsel

Facsimile: (201) 267-8050

 

 

17.3Assignment.  The license and all rights granted to Licensee hereunder are
personal in nature, and neither Licensee nor any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or other entity (each, a
“Person”) that “controls” Licensee (a “Controlling Entity”) shall Transfer this
Agreement or its rights hereunder, or any part thereof, without the prior
written consent of THL, which consent may be withheld in its sole and absolute
discretion.  As used herein, “controls” means, with reference to a Person that
is not a natural person, possessing, directly or indirectly, of the power to
direct or cause the direction of the management and/or policies of such Person,
whether through ownership of voting securities or through the power to appoint
at least half of the members of the board of directors or similar body of such
Person, by contract or otherwise.  For the avoidance of doubt, any direct or
indirect parent of Licensee shall be deemed to control Licensee. Notwithstanding
the foregoing, in the event of a proposed Transfer of the License to an
Affiliate of Licensee, THL’s consent shall not be unreasonably withheld; it
being acknowledged that THL would be acting reasonably to withhold consent to a
Transfer of this License to an Affiliate of Licensee who is a competitor of THL
or any of THL’s Affiliates; and provided, further, that with respect to an
assignment to an Affiliate of Licensee to which THL has consented,  Licensee
unconditionally guarantees the performance and obligations of such Affiliate
under this Agreement.

17.4No Sublicense Agreement Without Consent.  Licensee is prohibited from
granting any sublicenses under this Agreement with respect to Licensed Products
under this Agreement, without the prior written consent of THL, which consent
may be withheld by THL in its sole and absolute discretion.

17.5Assignment by THL.  THL shall have a complete and unrestricted right to
Transfer its rights and interests in this Agreement to any domestic or foreign
corporation or other business entity, providing that such transferee agrees to
be bound by all of the terms hereof and is the holder of the Trademarks in the
Territory.  THL shall give written notice to Licensee within 30 days of any such
Transfer; provided, however, that the failure to give such notice shall not be
deemed to be a breach of this Agreement.

17.6No Agency.  Neither party shall represent itself as the agent or legal
representative of the other party or such other party’s Affiliates for any
purpose whatsoever and shall have no right to create or assume any obligation of
any kind, express or implied, for or on behalf of them in any way whatsoever.  

17.7Suspension of Obligations.  If Licensee shall be prevented from performing
any of its obligations because of governmental regulation or order, or by strike
or war, declared or undeclared, or other calamities such as fire, earthquake, or
similar acts

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of God, or because of other similar or dissimilar cause beyond the control of
Licensee, Licensee’s obligations shall be suspended during the period of such
conditions.  If such condition continues for a period of more than 60 days, THL
shall have the right to terminate this Agreement.  

17.8Benefit.  This Agreement shall inure to the benefit of and be binding upon
the parties hereto, and, subject to Sections 17.3 and 17.5, their successors and
assigns.

17.9Entire Agreement; Amendment.  This Agreement, including the exhibits and
schedules hereto, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements,
contracts, promises, representations and statements between them, if any,
whether written or oral, with respect thereto, including, without limitation,
the 2009 Agreement. This Agreement may not be amended or modified, except in a
writing signed by both parties hereto.

17.10Non-Waiver.  The failure of either party to enforce at any time any term,
provision or condition of this Agreement, or to exercise any right or option
herein, shall in no way operate as a waiver thereof, nor shall any single or
partial exercise preclude any other right or option herein; and no waiver
whatsoever shall be valid unless in writing, signed by the waiving party, and
only to the extent herein set forth.  No waiver by either party of any breach
hereof or default hereunder will constitute a continuing waiver of such
provision or of any other provision of this Agreement.  Acceptance of payment by
THL will not be deemed a waiver by THL of any violation of or default under any
of the provisions of this Agreement by Licensee or an election of remedies as to
which any and all rights (and all remedies) are expressly reserved and retained.

17.11Severability.  In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of such provisions shall
not be affected or impaired in any other jurisdiction, nor shall the remaining
provisions contained herein in any way be affected or impaired thereby.

17.12Headings.  The headings of the Articles and Sections of this Agreement are
for convenience only and in no way limit or affect the terms or conditions of
this Agreement.

17.13Counterparts.  This Agreement may be executed in two counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.

17.14Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.

17.15Jurisdiction.  Any legal action or proceeding with respect to this
Agreement shall be brought in the courts of the State of New York or of the
United States

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of America located in the City of New York, and, by execution and delivery of
this Agreement, each party hereby accepts for itself and in respect to its
property, generally and unconditionally, the exclusive jurisdiction of the
aforesaid courts.  Each party hereby irrevocably and unconditionally waives any
right to demand a jury trial and any claim for special, consequential or
punitive damages and any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing or maintaining of any such action or
proceeding in such respective jurisdictions.  Each party irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the other party at its address
for notices provided in Section 17.2, such service to become effective 30 days
after such mailing.

17.16Construction.  This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the drafting party.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

TOMMY HILFIGER LICENSING LLC

 

Date: March 20, 2020

 

By:

/s/ Mark Fischer

 

 

Name:

Mark Fischer

 

 

Title:

Executive Vice President

 

MOVADO GROUP, INC.

 

Date: March 20, 2020

 

By:

/s/ Mitchell Sussis

 

 

Name:

Mitchell Sussis

 

 

Title:

Senior Vice President

 

SWISSAM PRODUCTS LIMITED

 

Date: March 20, 2020

 

By:

/s/ Mitchell Sussis

 

 

Name:

Mitchell Sussis

 

 

Title:

Director

 

48