Document:

mov-ex102_72.htm

EXHIBIT 10.2*

 

TERM SHEET

MGI Luxury Group - Hugo Boss 

October 11, 2017

 

 

Subject to the approval of the Supervisory Board of HUGO BOSS AG this Term Sheet sets out the principal terms for an amended and restated  License Agreement between HUGO BOSS Trade Mark Management GmbH & Co. KG, Germany with its branch HUGO BOSS Trade Mark Management GmbH & Co. KG, D-Metzingen, Branch CH-Zug, Switzerland (“Hugo Boss”) and MGI Luxury Group S.A. The License Agreement will continue to remain in full force and effect with the exception of the following points which will become binding with the execution by the parties and approval of the Supervisory Board of HUGO BOSS AG and will subsequently be reflected in the amended and restated license agreement.

 

	
Licensor
	
HUGO BOSS Trade Mark Management GmbH & Co. KG

Dieselstrasse 12

D-72555 Metzingen

Germany 

 

With its Branch

HUGO BOSS Trade Mark Management GmbH & Co KG

D- Metzingen Branch Ch-Zug

Baarerstr. 131

CH- 6300 Zug

 

	
Licensee
	
MGI Luxury Group S.A.

Bahnhofplatz 2B

CH-2502 Bienne

Switzerland

 

With a guarantee of the mother company Movado Group Inc.

 

	
Product(s)
	
Traditional Watches for Men & Women

Technology-Enabled Watches for Men & Women

(in particular Smart Watches, Software Enabled Watches and Connected Watches e.g. Display Watches, Analog-Smart Watches, Hybrid Smartwatches, Trackers)

 

	
Term
	
This Agreement enters into force retroactive on January 1, 2018, and, unless sooner terminated as herein provided, expires on December 31, 2023. Not later than 18 months before the final expiration of the Agreement the contracting parties shall enter into negotiations for the purpose of agreeing on an extension of this Agreement. Such extension (if any) shall be effective only upon the signature and delivery by each of the parties of a definitive written instrument extending the term of this Agreement.

 

Amendment of clause 17.2:

HUGO BOSS may terminate the Agreement if for two successive calendar years (beginning after calendar year 2017) only the minimum license fees are paid. In this case the notice period for termination is two months before the end of the half calendar year following the relevant time periods. For the avoidance of doubt, all payment obligations of Licensee under this Agreement shall continue during such half year period.

 

*   CONFIDENTIAL PORTIONS OF THIS EXHIBIT IDENTIFIED BY ASTERISK (*) HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (“1934 ACT”). 

 

	
Net Sales
	
“Net Sales” shall mean Gross Sales of Licensed Products, sold by Licensee or its affiliates, at wholesale basis is arms-length transactions to independent retailers or distributors, Licensee Retail Stores and Licensor Retail Stores, after the deduction of:

(a) actual credits for returns that Licensee actually authorizes and receives, not exceeding in any year an amount equal to * of Licensee’s total sales of Licensed Products in such year; and

(b) actual, reasonable and normal trade discounts and allowances to independent third parties (including Licensor Retail Stores but not Licensee’s affiliates/Licensee Retails Stores), including but not limited to volume and early payment discounts that are defined as credits to a customer after delivery and that Licensee actually grants in writing to the extend auditable, not exceeding in any year an amount equal to * of Licensee’s total sales of Licensed Products in such year; and

(c) expressly excluding Marketing Spend and cooperative advertising.

 

	
Currency
	
CHF (except USD for additional Marketing Spendings by Movado Group Inc.)

 

	
Guaranteed Minimum Net Sales for initial term 
	
Licensee shall pay to HUGO BOSS a minimum annual license fee each year equal to * of the amount which is * of the target Net Sales for such year under the Business Plan. 

 

Below Guaranteed Minimum Annual Fee (Guaranteed Minimum Royalty (GMR and Guaranteed Minimum Advertising (GMA)) schedule:

 

	
 
	
Year
	
Net Sales Projection (CHF)
	
Minimum 

Net Sales

(CHF)
	
GMR

(CHF)
	
GMA

(CHF)
	
GMR+

GMA (CHF)
	
 

	
 
	
2018
	
*
	
*
	
*
	
*
	
*
	
 

	
 
	
2019
	
*
	
*
	
*
	
*
	
*
	
 

	
 
	
2020
	
*
	
*
	
*
	
*
	
*
	
 

	
 
	
2021
	
*
	
*
	
*
	
*
	
*
	
 

	
 
	
2022
	
*
	
*
	
*
	
*
	
*
	
 

	
 
	
2023
	
*
	
*
	
*
	
*
	
*
	
 

	
Product Royalty
	
All Licensed Products: * of Total Net Sales 

 

	
Advertising Royalty:
	
All Licensed Products: * of Total Net Sales

 

	
Marketing Spend
	
* Marketing Contribution

 

New clause:

Licensee will propose a detail BTL yearly Investment plan, by investment category and country, to Licensor for approval at the latest by October of previous year, and will provide quarterly spend appraisals. The Marketing Contribution will be auditable by Licensor.

 

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT. 

2

 

	
Licensor Retail Stores
	
Licensee will pay Product Royalty and Ad Royalty and give a discount of * on Products to be sold at Licensor’s owned Full-Priced retail stores. Parties will use their best efforts to ensure that Product will have a permanent presence in these stores with mutually agreed presentation standards.  

Licensee will grant Licensor an annual return right of * of the Products. 

 

	
Licensor Outlet Stores
	
Licensee will pay Product Royalty and Ad Royalty grant a discount of * on Products to be sold at Licensor’s Outlet Stores. Parties will use their best efforts to ensure that Product will have a permanent presence in these stores with mutually agreed presentation standards. There are no return rights from Licensor’s Outlet Stores.   

 

	
Connected / Smart 

Watch Data

 
	
Customer data (excluding anonymous data) is property of HUGO BOSS

	
Dedicated Team 
	
Commitment to expand the current dedicated team in addition to the existing team as shown in attached chart.

 

	
Additional Marketing Spendings
	
Movado Group Inc. will invest an additional * of marketing investment in 2018 to kick off the growth which will be invested as follows:

 

	
 
	
For Boss:
	
*
	
 

	
 
	
 
	
*
	
 

	
 
	
 
	
*
	
 

	
 
	
 
	
*
	
 

	
 
	
For Hugo :
	
*
	
 

	
 
	
 
	
*
	
 

	
 
	
 

	
 
	
For the following years, until 2023, Movado Group Inc will continue to invest additional funds at the same value of * yearly and a total additional investment of * to ensure driving sales and brand messaging.

 

 

 

 

 

 

 

	
MGI Luxury Group S.A.

 

 

 
	
Place, Date       Paramus, NJ    11 October 2017

 

Printed Name    Mitchell Sussis, Attorney-in-Fact

 

Signature           /s/ Mitchell Sussis

 

 

	
Movado Group Inc.

 
	
Place, Date        Paramus, NJ    11 October 2017

 

Printed Name     Efraim Grinberg, Chairman and CEO

 

Signature            /s/ Efraim Grinberg

 

 

	
HUGO BOSS 

 
	
Place, Date         Zug   13 October 2017

 

Printed Name     Andrea Giacomelli          Paul Daly

 

Signature            /s/ Andrea Giacomelli     /s/ Paul Daly

 

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT. 

3

 

Personnel 100% dedicated to HUGO BOSS watches

 

*

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT. 

4Exhibit
4.12

 

FORM
OF WARRANT CERTIFICATE

 

Number
____________

 

Warrants

 

THE
WARRANTS SHALL BE VOID IF NOT EXERCISED PRIOR TO

 

THE
EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR

 

IN
THE WARRANT AGREEMENT DESCRIBED BELOW

 

REED’S,
INC.

 

Incorporated
Under the Laws of the State of Delaware

 

CUSIP:
[____________]

 

Warrant
Certificate

 

This
Warrant Certificate certifies that _______________, or its registered assigns, is the registered holder of warrant(s)
(the “Warrants” and each, a “Warrant”) to purchase shares of Common Stock, $0.0001 par value
per share (“Common Stock”), of Reed’s, Inc., a Delaware corporation (the “Company”).
Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive
from the Company that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price
(the “Exercise Price”), as determined pursuant to the Warrant Agreement, payable in lawful money of the United
States of America (or through “cashless exercise” as provided for in the Warrant Agreement), subject to the conditions
set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement (as defined on the reverse hereof).

 

Each
Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common Stock
issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.

 

The
initial Exercise Price per share of Common Stock for any Warrant is equal to $[ ] per share. The Exercise Price is subject to
adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

 

Subject
to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the
extent not exercised by the end of such Exercise Period, such Warrants shall become void.

 

Reference
is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this place.

 

This
Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

 

This
Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of Delaware, without
regard to conflicts of laws principles thereof.

 

[Signature
Page Follows.]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Warrant Certificate to be duly executed as of the date first above written.

 

	 	REED’S,
    INC.
	 	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	 
	 	tRANSFER
    ONLINE, Inc.,
	 	as
    Warrant Agent
	 	 	 
	 	By:	 
	 	Name:
	 	Title:

 

[Signature
Page to Warrant Certificate]

 

    	 

    	 

    

 

[Form
of Warrant Certificate]

 

[Reverse]

 

The
Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise
to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of ___________, 2017
(the “Warrant Agreement”), duly executed and delivered by the Company to Transfer Online, Inc., as warrant
agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning
the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings
given to them in the Warrant Agreement.

 

Warrants
may be exercised at any time during the Exercise Period set forth in Section [ ] of the Warrant Agreement.

 

The
Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise
of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant,
the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise,
round down to the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.

 

Warrant
Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in
person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates
of like tenor evidencing in the aggregate a like number of Warrants.

 

Upon
due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s)
in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except
for any tax or other governmental charge imposed in connection therewith.

 

The
Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of
any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a
stockholder of the Company.

 

    	 

    	 

    

 

Election
to Purchase

 

(To
Be Executed Upon Exercise of Warrant)

 

The
undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common
Stock and herewith tenders payment for such shares to the order of Reed’s, Inc. (the “Company”) in the
amount of $[ ] in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered
in the name of ______________, whose address is _____________________________, and that such shares be delivered to ______________,
whose address is _____________________________. If said number of shares is less than all of the shares of Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered
in the name of ______________, whose address is _____________________________, and that such Warrant Certificate be delivered
to ______________, whose address is _____________________________.

 

In
the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section [ ] of the Warrant
Agreement, the number of shares that the Warrants are exercisable for shall be determined in accordance with Section [ ]
of the Warrant Agreement.

 

a
“Cash Exercise” with respect to ______________ Warrant Shares; and/or

 

a
“Cashless Exercise” with respect to _____________ Warrant Shares, resulting in a delivery obligation by the
Company to the Holder of shares of Common Stock representing the applicable Net Number, subject to adjustment.

 

In
the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the
number of shares that the Warrants are exercisable for shall be determined in accordance with the relevant section of the Warrant
Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby
irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of
the Warrant Agreement, to receive shares of Common Stock. If said number of shares is less than all of the shares of Common Stock
purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of ______________, whose address is _____________________________,
and that such Warrant Certificate be delivered to ______________, whose address is _____________________________.

 

	Date:
    __________, 20__	(Signature)
	 	 
	 	(Address)
	 	 
	 	(Tax
    Identification Number)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}]]