Home License/Crown
LICENSE AGREEMENT
between
CALVIN KLEIN, INC.
and
CROWN CRAFTS DESIGNER, INC.
TABLE OF CONTENTS
Page
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Definitions................................................................2
1. Grant of License.................................................... 5
2. Term................................................................10
3. Design..............................................................11
4. Quality Control.....................................................15
5. Operations of Licensee..............................................19
6. Advertising/Promotion...............................................23
7. Approval Standard...................................................26
8. Minimum Guaranteed Fees ............................................27
9. Percentage Fees.....................................................28
10. Audit................................................................30
11. Certain Additional Matters...........................................31
12. Other Designers......................................................31
13. Breach/Default.......................................................32
14. Effects of Termination...............................................35
15. Miscellaneous........................................................38
Exhibits/Schedules
Exhibit A Licensed Mark
Exhibit 1.1.1 Products
Exhibit 3.1 Design and Development Chart; Time and Action Calendar
Exhibit 11
Schedule 111-3 Power of Attorney
Schedule 15.2 Shareholders
Guarantee
CONFIDENTIAL -- NEITHER THE RELATIONSHIP CONTEMPLATED BY THIS DOCUMENT NOR ITS
CONTENTS IS TO BE DISCUSSED WITHOUT THE CONSENT OF CALVIN KLEIN, INC. THIS DRAFT
DOES NOT CONSTITUTE AN OBLIGATION OF THE PARTIES. NO BINDING AGREEMENT WILL
RESULT UNLESS A DEFINITIVE WRITTEN AGREEMENT IS EXECUTED AND DELIVERED BY THE
PARTIES. DELIVERY OF THIS DRAFT AGREEMENT SHOULD NOT BE CONSTRUED AS ANY
COMMITMENT ON THE PART OF CALVIN KLEIN, INC. TO ENTER INTO THIS OR ANY OTHER
AGREEMENT; THERE IS NO OBLIGATION TO EXECUTE ANY SUCH AGREEMENT.
CALVIN KLEIN, INC.
and
CROWN CRAFTS DESIGNER, INC.
This AGREEMENT, dated as of May 11, 1998, between CALVIN KLEIN, INC., a New York
corporation ("Licensor"), and Crown Crafts Designer, Inc., a Delaware
corporation ("Licensee") and a wholly-owned subsidiary of Crown Crafts, Inc., a
Georgia corporation ("Guarantor"),
WITNESSETH:
In consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereby agree as follows:
Definitions
As used in this Agreement, the following definitions will
apply:
"Affiliates" of any person or entity means persons or entities
controlled by, controlling or under common control with such person or entity.
"Annual Period" means, the period commencing May 11, 1998
through December 31, 1998 and each subsequent calendar year (or portion thereof)
during the term hereof or any renewal or extension of the term. Licensee's
fiscal year is a 52/53 week year ending on the Sunday closest to 31 March.
Except for specific references to a calendar quarter, each "quarter" for
purposes of accounting for the Percentage Fee and the "balance" of the
advertising expenditures during each Annual Period shall be based on the
Licensee's fiscal quarter substantially concurrent with a calendar quarter.
"Articles" means Products approved by Licensor from time to
time for sale hereunder as part of any particular Collection.
"Business Day" means any date that is not a Saturday, Sunday
or a legal holiday on which banking institutions in the State of New York are
authorized or required to close.
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"Close-Out Articles" means Articles sold (i) at least one
month after Licensee's regular shipping season, and (ii) at a discount of more
than 25% off Licensee's regular wholesale price for such Articles.
"Collection" means a seasonal collection of Articles.
"Consumer Advertising" means advertisements on television and
print advertisements in prestigious national publications, and such other forms
of advertising as Licensor reasonably deems to be "consumer" advertising, but
will not include any point-of-sale, co-operative or trade advertising or
advertising in local publications.
"Licensed Mark" means the mark "CALVIN KLEIN", in the form
attached as Exhibit A, or in any subsequent form as may be specified by
Licensor. The term "Licensed Mark" does not include the name "CK/CALVIN KLEIN",
the mark "CK" or any other variation, modification or derivative of such
trademarks or the Licensed Mark.
"Net Sales" means [*](1)
"Products" means a line of soft home products particularly
described in Exhibit B.
"Stores" means free-standing retail locations bearing the
Licensed Mark (or another trademark of Licensor and the Calvin Klein Trademark
Trust) operated by Licensor or its licensees or sublicensees.
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(1) Confidential portions omitted and filed separately with the Commission.
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"Territory" means the countries specified in Exhibit C. The
Territory shall not include duty-free outlets or similar tax-free areas
("Duty-free") except as may be expressly authorized by Licensor in its sole
discretion.
1. Grant of License
1.1.1 Subject to the provisions of this Agreement, Licensor
hereby grants to Licensee an exclusive license to use the Licensed Mark
throughout the Territory during the term on and in connection with the
manufacture, distribution and sale at wholesale of the Products; provided, that
Licensee may not commence the distribution and sale of Products in the countries
included in Europe, the Middle East, Central America or South America unless
Licensor shall have approved, not to be unreasonably withheld, a detailed
business plan submitted by Licensee for any such region, indicating country -
by-country development, specific doors, merchandise mix and projected Net Sales
for each Annual Period and evidencing Licensee's ability and intent to execute
such plan and such other information as Licensor reasonably requests. Licensee
may request Licensor's consent to the manufacture of Articles on a non-exclusive
basis outside the Territory. Licensor may grant or withhold such consent in its
sole discretion based upon information supplied by the Licensee as to the
specific Articles, manufacturing facilities and contractors involved.
Furthermore, Licensor may from time to time, on a non-exclusive, seasonal basis,
permit Licensee to sell Articles to certain specified retail outlets outside the
Territory, subject to all of the terms of this Agreement.
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1.1.2 Except as otherwise provided in this Agreement, all
Articles must bear the Licensed Mark and no Articles may be sold or otherwise
distributed by Licensee under any mark other than the Licensed Mark.
1.1.3 Prior to any use thereof, Licensee will submit a list
of proposed third party contractors to Licensor, and such related information as
Licensor may reasonably request, for its approval (which approval may be
withdrawn at any time by Licensor in its reasonable discretion). Licensee will
use commercially reasonable efforts to require all of its contractors to comply
with all of the provisions of this Agreement relating to quality standards,
confidentiality and trademark protection, and to ensure that its own facilities
and those of such third party contractors observe all applicable laws and
regulations including, without limitation those governing workplace and fair
labor standards. Licensee will use commercially reasonable efforts to ensure
that no contractor sells Articles including seconds, damaged Articles and
Articles from which the Licensed Mark has been removed to any entity other than
Licensee (or another duly authorized licensee of Licensor) or ships Articles to
any location other than to the facilities of Licensee or such other licensees or
to their respective customers within the Territory as directed by Licensee.
1.1.4 In the event Licensor determines to grant a license
for Products in jurisdictions in Asia (other than Japan), Licensor shall so
advise Licensee, and Licensee shall have the right for a 30-day period to make
an offer to Licensor for such jurisdictions and if such offer is made and
accepted, to negotiate the terms of a license for such jurisdictions during a
period not to exceed 60 days following the date of such offer. Following such
period, Licensor may license (or not license) such
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jurisdictions to any party it selects in its sole discretion on terms generally
no less favorable to Licensor than those offered by Licensee.
1.2 Licensor reserves all rights to the Licensed Mark
except as specifically granted herein, and Licensor may exercise any of its
rights at any time. Licensee specifically acknowledges that Licensor has
retained:
(a) the right to use, and to grant to any other third party
the right to use, the Licensed Mark:
(i) in the Territory, with regard to any
services or merchandise other than Products, and
(ii) outside the Territory, with regard to any
services or merchandise;
(b) The right to own, operate and license retail outlets and
boutiques throughout the world, identified by or with the Licensed Mark or other
trademarks;
(c) the right to use, and to license third parties the right
to use any trademark other than the Licensed Mark without restriction; and
(d) the right to manufacture, and to grant to third parties
the right to manufacture, Products in the Territory solely for the purpose of
export from and sale outside the Territory.
1.3 Licensee acknowledges that Articles hereunder may bear some
similarity of design to products bearing trademarks other than the Licensed Mark
which may now or hereafter be manufactured, distributed or sold in the Territory
in connection with the Licensed Mark, by Licensor or duly authorized licensees
or authorized users, and that such similarity will not constitute a breach or
default hereunder. To the extent practicable,
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Licensor will endeavor to arrange to distinguish such merchandise from Articles
hereunder, whether by design, fabrication, distribution channels, target market,
price range or otherwise.
1.4 Any dispute between Licensee and any other non-Affiliate
licensee of Licensor in the Territory as to whose license covers what
merchandise shall be submitted to Licensor for its good faith determination,
which determination shall be final and binding on the Licensee.
1.5 Licensee will use its commercially reasonable efforts,
including without limitation financing and investing in the staffing,
advertising, promotion and development (both Product development and in-store
development) of operations under this Agreement to exploit the rights herein
granted throughout each jurisdiction in the Territory and to sell the maximum
quantity of Articles therein, consistent with the high standards and prestige
represented by the Licensed Mark.
1.6 Licensee will not export Articles from the Territory and will
not sell Articles to any third party which it knows or has reason to believe
intends to export Articles from the Territory, in each case including sales or
deliveries to Duty-free. Licensee will utilize such product identification
systems and other measures as Licensor may from time to time reasonably specify
in order to facilitate effective control of the distribution of Products and the
Licensed Mark, both within and outside the Territory, and the monitoring and
prevention of "parallel" or "grey goods" marketing.
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1.7 Notwithstanding the provisions of Section 1.1.1, Licensor may
grant third parties the right to produce (within or outside the Territory)
Products for sale outside the Territory. Upon Licensor's request, Licensee will
provide all relevant sourcing information to such parties and will otherwise
cooperate as reasonably requested by Licensor ; provided, that Licensee shall
not be required to disclose proprietary information. Licensee will timely supply
Licensor or its distributors or other permitted licensees (including Stores
licensees) with Articles for distribution in such quantities as Licensor may
reasonably request on a priority basis, subject to reasonable credit
considerations, and will maintain inventory to make Articles available to Stores
on an ongoing and staged shipment (also known as "quick-ship") basis. [*](2)
1.8 The Products described are among a range of product lines
utilizing the Licensed Mark now or hereafter sold by Licensor, its licensees and
other duly authorized parties. In order to provide for consistency in scope and
to prevent confusion in the market, Licensee will use commercially reasonable
efforts to arrange for the placement of items constituting Articles in the
market to be consistent with the placement of such other product lines bearing
the Licensed Mark and to be distinguishable from the placement of product lines
bearing other trademarks of Licensor.
2. Term
2.1 The initial term of this Agreement shall be five years and
approximately eight months commencing as of May 11, 1998 and continuing
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(2) Confidential portions omitted and filed separately with the Commission.
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through December 31, 2003 (the "Initial Term") unless sooner terminated in
accordance with this Agreement. Licensee shall have the option to renew this
Agreement for an additional five-year term (the "Renewal Term"), commencing on
January 1, 2004, provided that: (i) written notice thereof is delivered to
Licensor at least six months prior to the expiration date of the Initial Term;
(ii) Licensee is in compliance in all material respects with all the terms and
provisions of this Agreement on the date the renewal notice is delivered and on
the last day of the Initial Term; (iii) Net Sales of Licensed Articles during
the 12-month period ending June 30, 2003 (the "Reference Period") shall be equal
to at least (A) [*](3) in respect of the U.S., Canada, Mexico and (without
duplication) Stores, plus (B) (without duplication for Net Sales in respect of
Stores) an amount equal to the aggregate regional minimum Net Sales thresholds
for the Reference Period for Europe, Middle East, Central America and South
America (in each case, a "Regional Threshold") as determined in good faith
between the parties when the business plans for such regions are approved
pursuant to Section 1.1.1) (the sum of (A) plus (B) are referred to as the
"Renewal Threshold") and (iv) Licensor in its reasonable discretion shall have
approved Licensee's proposed detailed five year business plan for such renewal
term (as submitted by Licensee by December 31, 2002). Notwithstanding the
foregoing, if Licensee satisfies all of the conditions for renewal except that
Licensee's Net Sales for the Reference Period are less than Renewal Threshold
(but more than 85% of the Renewal Threshold) the Initial Term shall be extended
to December 31, 2004; and if Licensee's Net Sales for the 12-month period ending
June 30, 2004 are at least equal to the Renewal Threshold and Licensee continues
to be in compliance in all material respects with all of the terms and
provisions
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(3) Confidential portions omitted and filed separately with the Commission.
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of this Agreement on December 31, 2004, then this Agreement shall be renewed for
the balance of the Renewal Term. If Licensee's Net Sales for the Reference
Period in respect of any of Europe, the Middle East, Central America or South
America are less than the applicable Regional Threshold, this Agreement shall
terminate in respect of such region upon the expiration of the Initial Term,
except as otherwise agreed by Licensee. The Initial Term and the Renewal Term
shall be collectively referred to herein as the "Term".
3. Design
3.1 Licensor and Licensee will cooperate and will exercise
their respective commercially reasonable efforts in the preparation of
Collections and to carry out their respective duties and responsibilities set
forth in the "Time and Action Calendar" attached hereto as Exhibit 3.1. At least
60 days before the development stage of any Collection, Licensee will provide a
merchandising plan setting forth the number of styles, estimated unit
production, in-store delivery dates, target wholesale price points, target
market segment, potential jurisdictions for product sourcing and, where
applicable, historical sales statistics for Licensor's review and use in
developing such Collection as provided herein.
3.2.1 Licensor will provide Licensee with creative concepts and
fashion direction including recommendations as to color, material, design and
styling of Articles as Licensor deems reasonably sufficient to develop each
Collection of Articles, and such additional design assistance as it determines
in its discretion. Licensor will designate a member of its design staff who will
be dedicated primarily to the development of Articles. Licensor will, from time
to time, submit to Licensee sketches, designs,
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colors, samples, labels and packaging and other materials in such quantity as it
determines in its sole discretion, for use by Licensee in connection with its
preparation of Collections.
3.2.2 Licensee will utilize substantially all of the designs
submitted or approved by Licensor for each Collection and will timely produce,
offer for sale and ship all Articles produced therefrom, except as the parties
may otherwise agree (taking into account technical or production problems which
might affect the ability to timely develop and produce certain designs).
3.3 Licensee will advise Licensor of innovative concepts and
techniques in the industry relating to the manufacture of Articles and may, from
time to time, deliver examples of materials for Licensor's consideration in
development of the collections of Articles, which Licensor may accept, modify or
reject in its sole discretion.
3.4 Licensee may use only sketches, designs, colors, packaging,
labels and other materials provided or approved by Licensor in connection with
Articles.
3.5.1 Licensee will be responsible for making all design and
production prototypes and samples as well as for the production of Articles, and
Licensee will bear all costs in connection therewith. To the extent Licensor
reasonably determines necessary for the promotion of the prestige and image of
the Licensed Mark or to respond to the sourcing preferences of particular
markets, Licensor may from time to time request that specified Articles be
produced in particular jurisdictions specified by Licensor. Licensee will not
unreasonably refuse to comply with any such request.
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3.5.2 Licensee will be responsible for [*](4) the design,
development, construction and maintenance and periodic refurbishments of a
showroom or showrooms in accordance with the provisions of Section 5 hereof and
of the in-store shops or in-store areas within stores of Licensee's customers
("shop-in-shops") referred to in the next sentence. Licensee will arrange for
the opening of shop-in-shops within department stores and specialty stores using
appropriate fixtures and signage, and to fully stock such shop-in-shops with an
appropriate merchandise mix of Articles, all as approved by Licensor, pursuant
to and consistent with the shop-in-shop development program included in the
business plan approved by Licensor prior to the execution of this Agreement
(such approval not to be unreasonably withheld) or in connection with the
commencement of the Renewal Term, as the case may be. Licensee will use
commercially reasonable efforts to carry out its shop-in-shop development
programs in a manner comparable to and commensurate with the standards, sizes,
locations and quality of the shop-in-shop programs of Licensor's competition as
to Articles. By the end of the second Annual Period (1999), Articles are to be
sold within at least [*](5) shop-in-shops and [*](6) fixtured areas (within the
United States). However, to the extent Licensee establishes to Licensor's
reasonable satisfaction that Licensee has been prevented from achieving such
minimum numbers due to refusals or delays by its customers, such failure shall
not be deemed a default hereunder; provided, that Licensee continues to use
commercially reasonable efforts to achieve such numbers at the earliest
practicable date. Licensor may periodically inspect Licensee's showrooms, trade
exhibition shows, and shop-
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(4) Confidential portions omitted and filed separately with the Commission.
(5) Confidential portions omitted and filed separately with the Commission.
(6) Confidential portions omitted and filed separately with the Commission.
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in-shops. Any such inspection will be at Licensor's expense unless Licensor
determines as a result of such inspection that Licensee's showrooms, trade
exhibition shows or shop-in- shops have not been established and maintained in
accordance with Licensor's specifications, in which case Licensee will at its
expense promptly make such modifications to design, layout, decor, visual
display or merchandise display formats as Licensor may reasonably require and
will reimburse Licensor's reasonable costs and expenses in connection with such
inspections and any follow-up inspections to determine the satisfactory
completion of such modifications.
3.5.3 [*](7)
3.6.1 Licensee will make available to Licensor, without charge, such
quantity of Articles as is reasonably requested by Licensor for use in fashion
shows of "Calvin Klein" merchandise and for use by Licensor in the promotion of
Articles, including public relations promotions.
3.6.2 Licensee will permit Licensor's employees and other
representatives to purchase Articles for personal use at Licensee's regular
wholesale prices less [*](8).
4. Quality Control
4.1 The components, workmanship, fit and durability of Articles
and of all related tags, labels, packaging and ancillary materials will at all
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(7) Confidential portions omitted and filed separately with the Commission.
(8) Confidential portions omitted and filed separately with the Commission.
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times be of the highest quality commensurate with the reputation, image and
prestige of the Licensed Mark. Licensor will design or approve the styles,
designs, packaging, components, workmanship, quality, display, merchandising,
advertising and promotion of all Articles so as to ensure that Articles comply
with the preceding sentence. The foregoing will not apply to cooperative
advertising developed and placed by retail outlets if Licensee has no right to
review, approve or control the same (it being understood that Licensee will use
its commercially reasonable efforts to obtain such rights). Licensee will
maintain production and other quality control procedures so as to ensure that
the quality of Articles meets or surpasses that of the approved samples of
Articles. Articles will be distributed, merchandised and sold with packaging and
sales promotion materials appropriate for highest quality Products. Licensee has
facilities for printing inserts in packaging, and other forms of promotional
and/or collateral materials, and, subject to satisfaction of Licensor's
specifications, quality standards and delivery requirements on an ongoing basis,
such facilities will be the preferred source of production thereof. All Articles
will be manufactured, sold, labeled, packaged, distributed and advertised in
accordance with all applicable laws and regulations, including those governing
workplace and labor standards.
4.2 Before selling, distributing or promoting any Article,
Licensee will deliver for Licensor's inspection and correction a prototype
sample of each such Article together with prototype tags, labels and packaging
to be used in connection therewith. Licensee will also deliver one initial
production sample of each Article, together with the tags, labels and packaging
to be used in connection therewith, for Licensor's approval. In addition, upon
Licensor's request, Licensee will deliver to Licensor, free of
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charge, then current production samples of each Article produced hereunder
together with the tags, labels and packaging being used in connection therewith
so that Licensor may assure itself of the maintenance of the quality standards
set forth herein. The foregoing deliveries shall be free of charge to Licensor.
In the event Licensor determines that any Article so submitted fails to meet the
quality standards set forth herein, Licensee will make any corrections
determined by Licensor to be necessary to meet such quality standards. All
Articles to be sold hereunder will be at least equal in quality to the samples
approved by Licensor. If during any Annual Period, Licensee provides a
substantial quantity of production samples, Licensor will retain a "sampling" of
the same and will return the balance after its review of the same. Licensor's
duly authorized representatives will have the right, upon reasonable advance
notice and during normal business hours, to examine Articles in the process of
being manufactured and to inspect all facilities utilized and controlled by
Licensee or its Affiliates (including those of all its contractors) in
connection with the manufacture, distribution and sale of Articles. Licensee's
agreements with third party contractors related to Articles shall include a
similar provision permitting Licensor's inspection of such contractors'
facilities, as well as provisions permitting production and shipment of Articles
and other materials bearing the Licensed Mark or other "Calvin Klein"
identification only to the Licensee or as otherwise expressly directed by
Licensee in accordance with this Agreement.
4.3 All Articles will bear the Licensed Mark in such form and
manner as may be approved by Licensor. Notwithstanding the foregoing, the
Licensed Mark and all other "Calvin Klein" identification will be removed from
all Articles to be sold by Licensee as other than first-quality merchandise,
unless such removal would not be commercially feasible, in which case
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Licensee will mark such Articles in a manner (approved by Licensor) that clearly
indicates that they are "irregular"; and such irregular and all Close-Out
Articles will be sold only if there is no advertising or promotion in connection
therewith utilizing or referring to the Licensed Mark. Each distribution outlet
for the sale of "irregular" Articles, Close-Out Articles and excess piece goods
(e.g., fabric), will be subject to the periodic prior approval of Licensor.
4.4 Any and all proposed advertising, or promotional or publicity
material (including issuing press releases, interviews or other public relations
media) and any other printed or other communications media in connection with
the promotion, sale or distribution of Articles, must be approved by Licensor
prior to use by Licensee.
4.5 If Licensor should disapprove any sample Article, tag, label,
package or the like, or any advertising, promotional, merchandising or publicity
material or the proposed placement thereof or any other printed matter, Licensee
will not use or permit the use of the same in any manner, whether or not in
connection with Articles or the Licensed Mark.
4.6 In order to maintain the reputation, image and prestige of the
Licensed Mark, Licensee's distribution patterns must consist solely of retail
outlets for resale directly to consumers and solely those retail outlets and
doors whose location, merchandising and overall operations are consistent with
(i) the high quality of Articles and the reputation, image and prestige of the
Licensed Mark and as set forth in a distribution plan, specifying the location
of each such door and outlet, submitted by Licensee at least 90 days prior to
the opening date for each seasonal Collection for Licensor's review
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and approval or (ii) as otherwise approved by Licensor on an ongoing basis.
Licensee acknowledges and agrees that such distribution patterns shall not
include specialty stores or national chains without Licensor's prior written
approval, which may be given or withheld in its sole discretion. Licensee will
utilize commercially reasonable efforts to ensure that all department store
distribution outlets utilize fixturing consistent with Licensor-approved
specifications for the proper display and merchandising of Articles.
5. Operations of Licensee
5.1 Licensee shall be exclusively engaged in the business of
performing its obligations and responsibilities hereunder. In connection
therewith, Licensee shall:
(a) (i) employ, (A) on an exclusive basis (1) a "President" of the
Company who shall be subject to the ongoing approval of Licensor, and (2) such
sales, merchandising and product development personnel, and (B) either on an
exclusive basis or substantially dedicated to Licensee's operations hereunder to
the extent reasonably required by Licensor, such production, technical, quality
control, retail development, and visual display personnel, as will enable
Licensee to exploit the License herein granted and to maintain the quality
standards required hereunder; and
(ii) [*](9); and
(iii) in the case of visual display and retail development
personnel, Licensee shall employ, retain or contribute to the cost of Licensor's
dedicated personnel, as the case may be. The approximate annual
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(9) Confidential portions omitted and filed separately with the Commission.
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cost of visual display and retail development staff (as employed or retained
by the predecessor licensee for Products) is currently [*](10)
(b) (i) contribute to the cost and expense (including maintenance
and seasonal set-ups) of a showroom at 205 West 39th Street, New York, New York
for the purpose of displaying and promoting and if so determined, selling the
Articles in an amount reasonably allocated by Licensor (the current cost of
which is [*](11)) and (ii) if Licensee so determines, to establish and maintain
an additional showroom for the display and sale of the Articles, the location
and the decor of which, and any subsequent or renovated showroom, shall be
subject to the ongoing approval of Licensor (which shall include the selection
or approval of the architect for such showroom, as well as plans for such
location;
(c) maintain throughout the term of this Agreement separate
showrooms in specific regional locations outside the United States (as set forth
in the business plans provided for in Section 1.1.1), to be established as soon
as practicable, for the sole purpose of displaying, promoting and selling
Articles (the general location (and relocation) and decor of such showrooms, and
trade show and exhibition areas will be subject to the ongoing approval of
Licensor, and the architect retained by Licensee in connection with such
showroom will be either selected or approved by Licensor). All funds for all of
the foregoing will be provided by Licensee;
(d) establish, and thereafter maintain throughout the term of this
Agreement: production and other facilities, whether by ownership or by
contractual arrangement, to exploit the license herein granted and maintain the
quality standards required hereunder;
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(10) Confidential portions omitted and filed separately with the Commission.
(11) Confidential portions omitted and filed separately with the Commission.
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(e) at all times maintain an adequate operating performance and
financial position, and adequately finance all of the above and the operations
as specified in this Agreement;
(f) retain or employ on an exclusive or non-exclusive basis such
in-store sales and merchandising personnel as Licensor may reasonably require
consistent with its corporate program to exploit the sale of Articles within
certain key accounts of Licensee;
5.2 Licensee will deliver:
(i) within 30 days after the close of the regular shipping
season of each Collection, its sales results (reflecting goods actually
shipped), by style, on a unit basis, of Articles shown and sold; and within 90
days following the close of the regular shipping season a report setting forth
the sell-through by Licensee's customers of Articles shipped to them;
(ii) annually, within 60 days following the close of the
each Annual Period, (A) a detailed analysis of Licensee's operations under this
Agreement, including sales results by Article, and by distribution outlet for
each jurisdiction (country) and region of the Territory as determined in which
Licensee is authorized hereunder to sell Articles, and (B) if mutually agreed,
an independent analysis of sales and distribution of comparable products and of
the overall market for Articles and other brands of Products, in each case in
such form or forms as may be agreed upon by the parties;
(iii) within 180 days after the close of each Annual Period,
(A) copies of Guarantor's audited annual financial reports (balance sheets, and
statements of income and cash flow) prepared in accordance with U.S. generally
accepted accounting principles, consistently applied ("U.S. GAAP"), reported on
by an internationally recognized accounting firm together with a
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certificate executed by Guarantor's chief financial officer setting forth the
computations necessary to demonstrate Guarantor's compliance with the financial
covenants referred to in the second sentence of Guarantor's guarantee
substantially in the form attached hereto (the "Guarantee"); and (B) copies of
Licensee's unaudited annual financial statements prepared on a basis consistent
with Guarantor's financial statements;
(iv) within 45 days after the close of each calendar quarter
copies of Licensee's unaudited quarterly financial statements, which will be
prepared on a basis consistent with its annual financial statements;
(v) promptly (and in any event within five business days)
after discovery thereof, notice of any failure to comply with any of the
financial covenants contained in Section 5.1(e) or any other default under this
Agreement;
(vi) (A) By September 30 of each Annual Period, (i) Net Sales
estimates (projecting in reasonable detail Net Sales by region for each of the
next three succeeding Annual Periods), and (ii) a certificate, executed by
Licensee's chief financial officer, certifying and setting forth appropriate
evidence that Licensee's internal and committed external sources of liquidity
are sufficient to fund its operations during the next succeeding Annual Period
in light of such Net Sales estimates), and (B) estimated total Net Sales and
total aggregate advertising and promotional expenses (including all cooperative
and trade advertising, and all promotional expenses) for each Annual Period, by
January 30 of the following Annual Period; and
(vii) promptly, and in any event within 5 days of filing,
copies of all annual, quarterly or current reports, registration statements,
proxy statements or similar filings made by the Guarantor under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
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(viii) such additional information as Licensor may from time
to time reasonably request.
5.3 Annually, as soon as practicable following receipt of the
reports referred to in Section 5.2(i) and (ii), the parties will review and
discuss the same and any other relevant aspects of Licensee's operations.
Licensor may recommend such changes in such operations or in the design or
merchandising of, or distribution patterns for, Articles, as it deems necessary
or desirable to exploit the license granted hereunder or to ensure the cohesive
development, presentation, sale, merchandising, distribution, advertising and
promotion of Articles and the Licensed Mark in light of the range of other
merchandise produced by Licensor or by other authorized licensees and users of
the Licensed Mark. Licensee will give due consideration to such recommendations
in light of its obligations hereunder.
6. Advertising/Promotion
6.1 Licensee will spend for co-operative and trade advertising,
during each Annual Period, such amounts which will be adequate to enable
Licensee to exploit the license herein granted, and which will be commensurate
with expenditures of Licensor's competitors for Articles. Cooperative
expenditures shall include expenditures for advertising in support of store
sales, marketing tools, catalogs, fixturing for shop-in-shops, in-store point of
sale materials, promotional materials and public relations event costs.
21
6.2 [*](12)
6.3 (a) For each advertising campaign: (i) Licensee will provide
appropriate market information, and (ii) after consultation with Licensee but in
Licensor's sole discretion, Licensor will develop themes and creative concepts
and make all other necessary decisions regarding models, production, placement,
execution and final product. The parties may from time to time mutually agree to
arrange for an independent market study relating to Products, demographics, or
market trends. Licensee will bear the costs of any such studies, which amounts
will not be credited towards the Minimum Advertising Expenditure, but will be
credited towards Licensee's obligations set forth in Section 6.1. Licensor may
utilize CRK Advertising, a division of Licensor, for the promotion of the
Articles, and for the development and placement of advertising hereunder.
(b) [*](13)
6.4 Any qualified expenditure incurred by Licensee during any
Annual Period for Consumer Advertising of Articles and the Licensed Mark in
excess of the Minimum Advertising Expenditure for such Annual Period will not be
credited against the Minimum Advertising Expenditure for any other Annual
Period.
- --------
(12) Confidential portions omitted and filed separately with the Commission.
(13) Confidential portions omitted and filed separately with the Commission.
22
6.5 Licensee recognizes that its public actions and statements can
affect the image of Licensor, the Licensed Mark, the Articles and Licensor's
other trademarks, licensees and licensed products. Accordingly, (a) the use and
release of any and all promotional material (printed or otherwise) relating to
the Article or Licensee's activities pursuant to this Agreement in the nature of
press releases, interviews or other public relations events, and (b) any other
corporate release, prospectus (preliminary and final) data or information which
will or is likely to become public and, if so, could affect such image, will be
prepared or conducted in consultation with, and subject to the prior approval
of, Licensor's Public Relations Department. After any such approval, Licensee
will not modify the approved material or activity in any material respect unless
such modification is specifically approved by Licensor's Public Relations
Department.
7. Approval Standard
7.1 Licensee acknowledges that except as otherwise specifically
provided herein, Licensor's approvals required pursuant to this Agreement may be
based solely on Licensor's subjective aesthetic standards and may be granted or
withheld in Licensor's sole and absolute discretion, exercised in good faith.
8. Minimum Guaranteed Fees
8.1 [*](14)
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(14) Confidential portions omitted and filed separately with the Commission.
23
9. Percentage Fees
9.1 In consideration of the license granted and the design
services performed by Licensor hereunder, Licensee will pay to Licensor a fee
(in each case, a "Percentage Fee") equal to [*](15)
9.2 [*](16)
9.3 Within 30 days after the end of each quarter, Licensee will
deliver a statement setting forth (i) the monthly amount of Net Sales for such
quarter (ii) a computation of the amount of Percentage Fee for such quarter and
(iii) an appropriate summary of all expenditures made by or on behalf of
Licensee pursuant to Article 6 of this Agreement. Such statement will also set
forth in detail and separately for each country, for each category of Articles
and for each account of Licensee: the style number, description, number of
units, unit price and the total amount of gross sales of Articles shipped during
such quarter, the type and amount of discounts and credits from gross sales
deducted therefrom (separately as to each type of discount or credit) and all
advertising and promotional expenditures. Each such statement will be signed by
Licensee's chief financial officer and certified by him as complete and
accurate.
9.4 Within 180 days after the close of each Annual Period, a
report certified by Guarantor's independent certified public accountants who
report on its audited financial statements, setting forth for the entire Annual
- --------
(15) Confidential portions omitted and filed separately with the Commission.
(16) Confidential portions omitted and filed separately with the Commission.
24
Period the information required by the first sentence of Section 9.3. For
purposes of Sections 8 and 9, the effective date of any termination of this
Agreement will be deemed to be the close of an Annual Period and the close of a
quarter, and the period between the last day of the preceding Annual Period and
such effective date will be deemed to be an Annual Period.
10. Audit
10.1 Licensee will prepare and maintain, in accordance with US
GAAP, complete and accurate books of account and records covering all of its
operations. While this Agreement remains in effect and for three years
thereafter, during regular business hours and upon reasonable notice Licensor
and its representatives may from time to time examine said books of account and
records and all other documents and material in the possession or under the
control of Licensee or its Affiliates relating to the subject matter of this
Agreement, including the work papers of Licensee's auditors. All such books of
account, records and documents will be kept available by Licensee for at least
three years after the Annual Period to which they relate.
10.2 If any such examination indicates that the amount of
Percentage Fee for any Annual Period should have been higher than the Percentage
Fee as previously computed and reported by Licensee, Licensee will immediately
remit the shortfall to Licensor, together with interest thereon computed in
accordance with Section 13.1(a). If the shortfall is [*](17) or more of the
- --------
(17) Confidential portions omitted and filed separately with the Commission.
25
Percentage Fee as previously computed and reported by Licensee, or if such
examination indicates that Licensee should have known of such shortfall at the
time of such computation and report, Licensee will promptly reimburse Licensor
for the cost of such examination within five days of Licensor's demand therefor.
If such examination indicates that Licensee made an overpayment of Percentage
Fee, and such overpayment was not subsequently adjusted, Licensor shall advise
Licensee and provide for appropriate adjustments or credits towards future
payments by Licensee.
11. Certain Additional Matters
Exhibit 11 sets forth certain additional provisions regarding trademark
ownership and protection (including use of Licensee's corporate name in
connection with the Licensed Mark), infringement/parallel imports, copyright,
confidentiality, indemnification/insurance, representations, brokerage and
certain miscellaneous sections, all of which provisions are intended to be an
integral part of this Agreement and are incorporated herein by reference.
12. Other Designers
12.1 During the term of this Agreement and any extension or renewal
thereof:
(a) [*](18)
- ------------
(18) Confidential portions omitted and filed separately with the Commission.
26
(b) [*](19)
13. Breach/Default
13.1 If any of the following breaches or defaults occurs, then the
non-breaching party may by written notice to the breaching party terminate this
Agreement as provided below:
(a) If Licensee fails to make any payment hereunder on the date
such payment is due (i) Licensee will pay interest on the unpaid balance of the
amount due at a rate equal to three percentage points above the prime rate per
annum announced by Chase Bank in New York, New York as its prime rate as of the
close of business on the date such payment initially became due until the date
such amount is paid in full; and (ii) if such failure to pay continues for five
business days or more following written notice thereof, Licensor may terminate
this Agreement forthwith.
(b) If Licensee fails to comply with the first sentence of Section
1.5, Section 5.1(e) or Section 15.2, or the Guarantor fails to comply with the
second paragraph of the Guarantee, Licensor may terminate this Agreement
forthwith.
(c) If Licensee fails to perform any of its obligations hereunder,
which failure may adversely affect the Licensed Mark, Licensor may terminate
this Agreement forthwith: (i) if such default is incurable; or (ii) if such
default is curable but continues uncured for a period of ten days or more after
written notice thereof has been given to Licensee.
- --------
(19) Confidential portions omitted and filed separately with the Commission.
27
(d) If either party fails to perform any other obligation
hereunder, the non-defaulting party may terminate this Agreement forthwith: (i)
if such default is incurable; (ii) if such default is curable, within 30 days,
but continues uncured for a period of 30 days or more after written notice
thereof has been given to the defaulting party or (iii) if such default is
curable but not within such 30 day period and (A) all reasonable steps necessary
have not been taken by the defaulting party within said 30 day period or (B)
such defaulting party fails to diligently take all steps necessary to cure such
default as promptly as practicable or (C) such default continues uncured within
60 days after written notice thereof has been given to the defaulting party.
(e) If the Guarantor defaults under any of its financial covenants
set forth in the Guarantee or the Guarantor otherwise disavows, breaches or
defaults under the Guarantee, or the Guarantor otherwise asserts that the
Guarantee is invalid or unenforceable, Licensor may terminate this Agreement
forthwith.
(f) If any indebtedness of the Licensee or the Guarantor in excess
of $5 million is accelerated or otherwise comes due and payable before its
stated maturity, Licensor may terminate this Agreement forthwith.
13.2.1 If Licensee files a petition in bankruptcy, is adjudicated a
bankrupt, becomes insolvent, makes an assignment for the benefit of creditors,
or files a petition or otherwise seeks relief under or pursuant to any
bankruptcy, insolvency or reorganization statute or proceeding, or if it
discontinues its business or discontinues reasonable commercial exploitation of
Articles for a period of 60 days or more, or a custodian, receiver or trustee is
appointed for it or a substantial portion
28
of its business or assets for any reason, or if it defaults on any obligation
that is secured by a security interest in any Articles, this Agreement will
forthwith automatically terminate, in which case no assignee for the benefit of
creditors, custodian, receiver, trustee in bankruptcy, sheriff or any other
officer of the court or official charged with taking over custody of Licensee's
assets or business will have the right to continue this Agreement or to exploit
or in any way use the Licensed Mark.
13.2.2 No assignee for the benefit of creditors, custodian, receiver,
trustee in bankruptcy, sheriff or any other officer of the court or official
charged with taking over custody of Licensee's assets or business will have the
right to continue this Agreement or to exploit or in any way use the Licensed
Mark if this Agreement terminates pursuant to Section 13.2.1 above.
13.2.3 Notwithstanding the provisions of Section 13.2.1, if a trustee
in bankruptcy of Licensee (the "Trustee") or Licensee, as debtor ,properly
elects to assume this Agreement pursuant to the United States Bankruptcy Code or
any amendment or successor thereto (the "Bankruptcy Code") and thereafter
desires to assign this Agreement to a third party in accordance with the
Bankruptcy Code, the Trustee or the Licensee, as the case may be, will notify
Licensor of same in writing (the "Notice"). The Notice will constitute the grant
of an option to Licensor to have this Agreement assigned to it or to its
designee for such consideration, or its equivalent in money, and upon such
terms, as are specified in the Notice. Such option may be exercised only by
written notice given by Licensor to the Trustee or the Licensee, as the case may
be, within 15 days after Licensor's receipt of
29
the Notice or such shorter period of time as may be deemed appropriate by the
court in the bankruptcy proceeding. If Licensor fails to give its notice within
the exercise period, the assigning party may complete the assignment but only to
the entity named in the Notice and upon the terms specified therein. This
Section 13.2.3 shall not preclude or impair any rights which Licensor may have
as a creditor in any bankruptcy proceeding.
13.3 Notwithstanding any termination in accordance with the
foregoing, Licensor hereby reserves, all the rights and remedies which it has or
which are granted to it by operation of law, to collect fees due, earned or
payable by Licensee pursuant to this Agreement, to be compensated for damages
for breach of this Agreement and to enjoin the unlawful or unauthorized use of
the Licensed Mark without the necessity of posting any bond or proving any
actual damages (which injunctive relief may also be sought prior to or in lieu
of termination).
14. Effects of Termination
14.1.1 On the expiration or earlier termination of this Agreement
pursuant to Section 13 or otherwise, all the rights of Licensee hereunder will
forthwith terminate and automatically revert to Licensor; provided, that except
in the case of a termination (i) by Licensor pursuant to Section 13.1, or (ii)
pursuant to Section 13.2, for an additional period of 180 days only on a
non-exclusive basis, Licensee may continue to sell its inventory of Articles
(including work-in-process and work necessary to utilize special materials not
usable except in the production of Articles) ("Inventory") on hand at the date
of termination, but only to the extent the
30
existence and amount of such Inventory as of the date of termination is
disclosed in the statement (described in Section 14.1.2 below) certified by
Guarantor's independent public accountants and delivered to Licensor within 15
days following termination. Such Inventory, and statement will be subject to
verification by Licensor. Sales by Licensee of such Inventory will be made under
the Licensed Mark and in accordance with all of the terms and provisions of this
Agreement (including the payment of the Percentage Fee in connection therewith
without credit for any Minimum Guaranteed Fee previously paid by Licensee), only
to Licensee's regular accounts in the ordinary course of business, in accordance
with sales policies in effect prior to termination, or otherwise only as may be
approved by Licensor.
14.1.2 Upon expiration or early termination of this Agreement (but
only in the event that Licensee has a non-exclusive period in which to dispose
of inventory of finished Articles), Licensee will forthwith deliver to Licensor
a statement setting forth its Inventory of Articles. Such statement will specify
quantity, design and styles and will set forth Licensee's cost (as indicated in
the books and records of Licensee) of such Articles and other materials and
shall set forth Licensee's cost (as indicated in the books and records of
Licensee) of each of such Articles and other materials. Licensor shall have the
option (hereinafter called the "Inventory Purchase Option") to purchase all such
Articles (other than damages and irregulars) and/or all or any portion, in its
discretion, of such damages, irregulars and other materials which are included
in the inventory of Licensee on the date of purchase for an amount equal to
[*](20)
- --------
(20) Confidential portions omitted and filed separately with the Commission.
31
14.2 Except as provided in Section 14.1, on the expiration or
earlier termination of this Agreement, and regardless of any claim for wrongful
termination, Licensee will forthwith discontinue all use of the Licensed Mark,
will no longer have the right to use the Licensed Mark or any variation or
simulation thereof, will transfer to CKTT or Licensor, as applicable, all
registrations, filings and rights with regard to the Licensed Mark which it may
have possessed at any time, and will cease doing business as "Calvin Klein
Home". Licensee will also thereupon deliver to Licensor or to Licensor's
designee free of charge, or at Licensor's option will destroy, all materials
utilized in connection with Articles and all labels, tags and other material in
its possession with the Licensed Mark thereon, and will use its best efforts to
cause stencils, sketches and other materials related to the production of
Articles in the possession of third parties to be destroyed or otherwise
rendered unusable. Licensee will not reproduce or adapt any of said stencils,
sketches or other materials for use on or in connection with merchandise
subsequent to the termination of this Agreement.
14.3 Licensor may, in its sole discretion, at any time, enter into
such agreements as it desires pursuant to which Products bearing the Licensed
Marks may be shown, advertised, distributed or sold in the Territory by it or by
any duly authorized third party other than Licensee, so long as such agreements
do not become effective as to the offer, sale, advertising, promotion or
shipment of Exclusive Products within the Territory prior to the date of
termination of this Agreement.
32
15. Miscellaneous
15.1 All reports, approvals and notices required or permitted by
this Agreement to be given to any party shall be in writing and shall be
delivered personally, by reputable overnight courier, telecopied or sent by
certified, registered or express mail (in each case with return receipt
requested), postage prepaid. Any such notice shall be deemed given when so
delivered personally, telecopied, or on the date received if deposited in the
mail or sent by reputable overnight courier, in each case to the party concerned
at its address as set forth below or at such other address as a party may
specify by notice to the other.
Licensor: Calvin Klein, Inc.
205 West 39th Street
New York, New York 10018
Attention: President
Facsimile: 212/221-3259
Copies: Calvin Klein, Inc.
205 West 39th street
New York, NY 10018
Attention: Licensing Department
Facsimile: 212/944-1959
Attention: Corporate Affairs
Facsimile: 212/768-8930
Licensee: Crown Crafts Designer, Inc.
1185 Avenue of the Americas, 8th Floor
New York, NY 10036
Attention: President
Facsimile: 212-824-2680
Copy: Crown Crafts, Inc.
1600 RiverEdge Parkway, 2nd Floor
Atlanta, GA 30328
Attention: President
Facsimile: 770-644-6264
Attention: General Counsel
Facsimile: 770-644-6264
15.2 Licensee acknowledges and recognizes that: (a) it has been
granted the license herein because of its particular expertise, knowledge,
33
judgement, skill and ability; (b) it has substantial and direct responsibilities
to perform this Agreement in accordance with its terms; (c) Licensor is relying
on Licensee's unique knowledge, experience and capabilities to perform this
Agreement in specific manner consistent with the high standards of integrity and
quality associated with Licensor and its business; (d) the granting of the
license under this Agreement creates a relationship of confidence and trust
between Licensee and Licensor; and (e) this Agreement is one under which
applicable law excuses Licensor from accepting performance from, or rendering
performance to, a person or entity other than licensee, within the meaning of
Section 365(c) and (e) of the Bankruptcy Code (title 11, U.S. Code). Licensee
may not assign or otherwise transfer any of its rights or obligations hereunder
(including any attempt by Licensee to establish a sublicense or a
distributorship without the prior consent of Licensor as to such sublicensee and
sublicense or distributor and distributorship agreement). Any such attempted
assignment, sublicense or transfer, whether voluntary or by operation of law,
directly or indirectly, will be void and of no force or effect. For purposes
hereof, any transfer of all or a controlling portion of the shares of Licensee
(by a shareholder other than Licensor) in one or more transactions (whether over
a period of time or all at once) except to Licensor or a Licensor-approved
shareholder, will be deemed an attempted transfer prohibited by this Section
15.2 and will be void pursuant to the preceding sentence. In addition, upon the
occurrence of a "Change of Control" (as defined) of the Guarantor, Licensor may
by written notice terminate this Agreement. For purposes of this Agreement, a
"Change of Control" of Guarantor shall have occurred if:
34
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than the current shareholder(s) at the time of
execution of this Agreement, as set forth in Section 15.2, becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,)
directly or indirectly, of more than 35% of the total voting power of the voting
stock of the Guarantor (or its successor by merger, consolidation or purchase of
all or substantially all of its assets) or the Guarantor consummates any merger
or consolidation and the stockholders of Guarantor immediately prior to such
merger or consolidation do not control in the aggregate the majority of the
total voting power of the voting stock of the Guarantor (or the successor formed
by such merger or consolidation) immediately following such merger or
consolidation ; or
(ii) during any period of two consecutive years individuals who at
the beginning of such period constituted the Board of Directors of the Guarantor
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Guarantor was approved
by a vote of a majority of the directors of the Guarantors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved or is a designee of the then
remaining members of the Board of Directors of the Guarantor or was nominated or
elected by such then remaining members of the Board of Directors of the
Guarantor) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
35
(iii) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Guarantor; or
(iv) the adoption by the stockholders of a plan for the liquidation
or dissolution of the Guarantor.
15.3 This Agreement together with the Exhibits and Schedules
attached hereto, all of which are incorporated herein by reference, contains the
final, complete and exclusive understanding and agreement between the parties
hereto with respect to the subject matter hereof, supersedes all prior oral and
written understandings (except for the confidentiality agreement entered into by
the parties) and may not be modified, nor may any of the provisions hereof be
waived, except by a writing executed by the parties.
15.4 This Agreement will be considered as having been entered into
in the State of New York and will be construed and interpreted in accordance
with the laws of that state applicable to agreements made and to be performed
therein. However, disputes regarding the Licensed Mark will be resolved in
accordance with the U.S. Federal trademark laws and related laws, statues, rules
and regulations of the United States unless there are no U.S. Federal laws,
statutes, rules or regulations dispositive of such dispute, in which event such
disputes will be resolved in accordance with the previously described laws of
the State of New York.
15.5 Licensee acknowledges and agrees that the effectiveness of
this Agreement is contingent upon simultaneous execution and delivery of the
Guarantee by the Guarantor.
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
CALVIN KLEIN, INC.
BY:/s/ BARRY SCHWARTZ
-------------------------------
CROWN CRAFTS DESIGNER, INC.
BY:/s/ Michael Bernstein
-------------------------------
37
Exhibit A
Licensed Mark
[CALVIN KLEIN LOGO APPEARS HERE]
38
EXHIBIT 11
I. Trademark Ownership and Protection
I-1 Licensee will not (a) co-join any name or names with the
Licensed Mark, (b) use the name "Calvin Klein" or "CK" or any portion or
derivative thereof in its corporate name, or (c) use any other name, or names in
connection with the Licensed Mark, in any advertising, promotion, publicity,
labeling, packaging or other printed matter of any kind in connection with the
distribution or sale of Articles except as may be required or approved by
Licensor; provided, that Licensee may do business as "Calvin Klein Home" and in
connection therewith will make appropriate "fictitious name" filings (subject to
Licensor's prior review and approval). Any use of Licensee's corporate name or
that of its Affiliates in connection with the Licensed Mark will be subject to
the approval of Licensor, and will clearly indicate that the Licensee is using
the Licensed Mark pursuant to a license from Licensor.
I-2 Licensee acknowledges that Calvin Klein Trademark Trust
("CKTT") is the owner, and Licensor is the beneficial owner, of all right, title
and interest in and to the mark "CALVIN KLEIN," and to any variant or
modification thereof, for Products in the Territory in any form or embodiment
thereof. CKTT also owns the goodwill related to such mark and to the business
and goods in relation to which such mark has been or will be used. Licensee will
not at any time directly or indirectly do or suffer to be done any act or thing
that might in any way adversely affect any rights of CKTT or Licensor in and to
any of such mark, any registrations thereof or any applications for
registration, thereof or that might reduce the value thereof or detract from its
reputation, image or prestige of that of CKTT, Licensor or Mr. Calvin Klein.
Sales by Licensee and its Affiliates will be deemed to have been made by CKTT
for purposes of trademark registration and all uses of the Licensed Mark by
Licensee and its Affiliates and goodwill generated by use of the Licensed Mark
will inure to the benefit of CKTT.
I-3 At Licensor's request, Licensee will execute any and all
reasonable documents (including registered user agreements) and take any other
similar actions reasonably required by Licensor to confirm CKTT's ownership or
Licensor's beneficial ownership of the marks referred to in Section I-2 and the
respective rights of CKTT, Licensor and Licensee pursuant to this Agreement.
Licensee will cooperate with Licensor and will take any actions reasonably
requested by Licensor in connection with the filing and prosecution by Licensor
of applications in CKTT's name (or if applicable, Licensor's name) to register
the Licensed Mark for Articles and in connection with the maintenance and
renewal of such registrations as may issue. Upon termination of this Agreement,
Licensee will execute such documents as reasonably required by Licensor to
evidence such termination. Licensor will bear all expenses in connection with
the preparation and filing of all such documents (excluding any costs or
expenses for review of such documents by Licensee or its representatives) filing
of registered user agreements and with any documents required to evidence
termination of this Agreement, including termination of such registered user
agreements. In order to effect the foregoing, Licensee will execute the power of
attorney set forth as Exhibit 11 I-3 hereto.
I-4 Licensee will use the Licensed Mark in the Territory strictly
in compliance with the legal requirements obtaining therein and will use such
markings in connection therewith as may be required by applicable legal
provisions. Licensee will cause to appear on all Articles and on all materials
on or in connection with which the Licensed Mark is used, such legends, markings
and notices as may reasonably be necessary in order to give appropriate notice
of any trademark, trade name or other rights therein or pertaining thereto as
Licensor may request.
I-5 Whether during the term of this Agreement or subsequent to its
termination, Licensee will never (a) challenge Licensor's ownership of or the
validity of the Licensed Mark or any application for registration thereof, or
any trademark registration thereof, or any rights of Licensor therein, or (b)
challenge the fact that Licensee's rights pursuant to this Agreement are solely
those of a licensee.
II. Infringement/Parallel Imports
II-1. Whenever Licensee learns of any infringement or imitation of
the Licensed Mark or of any use by any person of a trademark similar to the
Licensed Mark or of any acts of unfair competition involving the Licensed Mark
as they relate to Products, it will promptly notify Licensor thereof. Licensor
will thereupon take such action as it deems advisable for the protection of
Licensor's rights in and to the Licensed Mark, including, without limitation,
reasonably requiring Licensee to take action in Licensor's name and on
Licensor's behalf, in which case Licensee will cooperate with Licensor in all
reasonable respects. In no event will Licensor be required to take any action
which Licensor deems in good faith to be inadvisable. In the event Licensor
requires Licensee to take action on Licensor's behalf, Licensee will do so, as
Licensor deems reasonably appropriate, strictly in accordance with Licensor's
directions and will advise Licensor of all developments as they occur. In all
such instances Licensor and Licensee will consider the effect the infringement
is having on the market, the costs of such contemplated action and the
likelihood of success. Licensee will take no action with respect to the Licensed
Mark including, without limitation, initiating proceedings, settling any action,
appealing any adverse decision or discontinuing any action taken by it, except
to the extent the same is approved in advance by Licensor. Subject to Section
II-4, Licensee will bear all expenses (including investigation expenses and
legal fees and expenses) incurred with respect to any actions taken pursuant to
this Section. Any damages recovered or sums obtained in settlement in or with
respect to any action described in this Section II-1 or Section II-2 will first
be applied to reimburse Licensee and/or Licensor for the legal expenses incurred
and actually paid by it; the balance, if any, will be allocated 50% to each of
the parties.
II-2 Licensee will use commercially reasonable efforts to minimize
and deter the diversion of Articles for sale outside of the Territory
(including, without limitation, unauthorized distribution of Articles by
Licensee's manufacturers and subcontractors) ("Diversion"). Licensee will
cooperate with Licensor in Licensor's efforts to minimize and deter Diversion
("Anti-Diversion Efforts"). Without limiting the foregoing:
(a) Licensee will promptly provide such information as
Licensor may from time to time reasonably request concerning its manufacturing,
subcontracting and distribution locations, activities and
shipments, product and label identification systems and data and sales to and
by its customers; and
(b) Licensee will promptly reimburse all out-of-pocket
expenses reasonably incurred by Licensor in its Anti-Diversion Efforts
(including, without limitation, reasonable attorneys' fees and expenses).
II-3 Where Licensor deems it advisable and with Licensee's consent,
Licensor will initiate criminal or civil actions against the persons outside
Territory seeking to manufacture counterfeit Articles or sell or ship
counterfeit Articles into the Territory (excluding, for this purpose,
manufacturers or subcontractors described in the definitions of Diversion). The
cost related to any such actions will be entirely for Licensee's account.
II-4. Licensor will consult with Licensee in planning and
enforcement activities pursuant to this Section II. The parties will establish
and from time to time revise a budget for such enforcement activities. Licensor
may not seek reimbursement from Licensee with respect to any action covered by
Sections II-1 or II-2 unless, at the time of commencement thereof, Licensee
shall have consented to such commencement. Licensor will use commercially
reasonable efforts to control the costs of all such actions. The parties will
consult and cooperate to forecast Licensor's reimbursable expenses hereunder and
make suitable arrangements so that Licensor may receive Licensee's payments in
respect thereof at or shortly before such expenses are incurred.
III. Copyright
III-1. Licensee acknowledges that all rights (including copyright and
design patent rights) in any works or contributions to works including, without
limitation, sketches, designs, packaging, labels, tags, advertisements,
promotional material or the like used in connection with the Licensed Mark
("Works") which are created by Licensor will be owned by Licensor. In addition,
Licensee hereby assigns to Licensor all right, title and interest in any Works
or contributions to Works which may be created by Licensee. Licensee will
execute and deliver to Licensor such further instruments of ownership and
transfer in respect thereto as Licensor may request in connection with the
foregoing and, if Licensee will fail to do so, Licensor may execute such
instruments on behalf of Licensee and make appropriate dispositions thereof.
Works and contributions to Works may be prepared by Licensee only through
Licensee's employees whose contribution is to be considered a "work made for
hire" and by others who have executed a written assignment in favor of Licensee.
Licensee will not, at any time, do or suffer to be done any Works, including,
without limitation, filing any application to record in its name any claims to
copyrights with respect to Articles or material utilizing the Licensed Mark; and
Licensee will do any and all things reasonably required by Licensor to preserve
and protect said rights, including, but not by way of limitation, placing the
copyright notice specified by the Universal Copyright Convention on all such
copyrightable material.
IV. Confidentiality
IV-1. All information relating to this Agreement and any related
agreements entered into by the parties or relating to Licensor and its
Affiliates and/or designees which Licensee learns or has learned since the
commencement of negotiation of this Agreement, all design concepts which
Licensor or its Affiliates or designees provide to Licensee hereunder and all
sketches and designs received by Licensee from Licensor or its Affiliates or
designees or are approved for use in connection with the Articles and all Works
(collectively, "Licensor's Data") are valuable property of Licensor and such
Affiliates or designees. Licensee acknowledges the need to preserve the
confidentiality and secrecy of Licensor's Data. During and after the term of
this Agreement, Licensee will not use or disclose same (except for use required
to fulfill the provisions of this Agreement during the term or any renewal or
extension hereof), and will take all necessary steps to ensure that the use of
Licensor's Data by Licensee or its Affiliates or designees (which use and
designees will be solely as necessary for the manufacture, distribution, sale,
advertising or promotion of Articles hereunder) will preserve such
confidentiality and secrecy in all respects. Notwithstanding the foregoing,
Licensee's obligations to keep Licensor's Data confidential will terminate
(except for designs and design concepts and materials) at such time and solely
to the extent that any such Licensor's Data will become generally known to the
public and in the public domain, through no fault of Licensee or any or its
Affiliates or designees. Licensee agrees that in the event if reasonably
determines that it must disclose certain information regarding this Agreement
and/or file this Agreement as a exhibit to any public filings, that it will (i)
consult with Licensor prior to any such disclosures and (ii) use is commercially
reasonable efforts to seek confidential treatment of portions of this Agreement
under the Securities Act of 1933, as amended or the Exchange Act, as the case
may be, as agreed to between Licensor and Licensee.
IV-2. All information relating to Licensee and its Affiliates and/or
designees which Licensor learns or has learned since the commencement of
negotiation of this Agreement other than Licensor's Data (collectively
"Licensee's Data") is valuable property of Licensee and such Affiliates or
designees. Licensor acknowledges the need to preserve the confidentiality and
secrecy of Licensee's Data. During and after the term of this Agreement,
Licensor will not use or disclose same (except for use required to fulfill the
provisions of this Agreement during the term of any renewal or extension hereof
and use deemed necessary by Licensor in connection with its business), and will
take all necessary steps to ensure that the use of Licensee's Data by Licensor
or its Affiliates or designees (which use by such designees will be solely as
necessary for the manufacture, distribution, sale, advertising or promotion of
Articles hereunder) will preserve such confidentiality and secrecy in all
respects. Notwithstanding the foregoing, Licensor's obligations to keep
Licensee's Data confidential will terminate at such time and solely to the
extent that any such Licensee's Data will become generally known to the public
and in the public domain, through no fault of Licensor or any of its Affiliates
or designees.
V. Indemnification/Insurance
V-1. Licensee hereby indemnifies and holds harmless each of
Licensor, CKTT and Calvin Klein, individually, and their respective Affiliates,
directors, shareholders, employees and agents from and against any and all
losses, liability, damages and expenses (including reasonable attorneys' fees
and expenses) which any of them incur or for which any of them may become liable
or be compelled to pay in any action or claim, for or by reason of or resulting
from any acts of Licensee or its Affiliates or any of their respective
directors, shareholders, employers or agents pursuant to (or
failure of Licensee to take acts required by) this Agreement, excluding those
matters as to which Licensee is indemnified pursuant to Section V-3. The
provisions of this section and the obligations of Licensee set forth herein will
survive expiration or other termination of this Agreement.
V-2. Licensee will procure and maintain at its own expense in full
force and effect at all times during which Articles are being sold with a
responsible insurance carrier licensed to do business in the State of New York
and acceptable to Licensor, a public liability insurance policy including
products liability coverage as well as contractual liability with respect to
this Agreement with a limit of liability of not less than $5,000,000. Such
insurance policy will insure against occurrences happening at any time during
which Articles are being sold or used regardless of when claims may be made.
Such insurance policy will be written for the benefit of CKTT, Licensor,
Licensee and Calvin Klein, individually, and will provide for at least ten days
prior written notice to Licensor and Licensee of the cancellation or substantial
modification thereof. Such insurance may be obtained by Licensee in conjunction
with a policy of products liability insurance which covers products other than
Articles. Licensee will deliver a certificate of such insurance to Licensor
promptly upon issuance of said insurance policy and will, annually and otherwise
from time to time, upon reasonable request by Licensor, promptly furnish to
Licensor evidence of the maintenance of said insurance policy. Nothing contained
in this Section V-2 will be deemed to limit in any way the indemnification
provisions of Section V-1 above.
V-3. [*](21)
VI. Representations
VI-1. Licensor represents and warrants that (i) it has full right,
power and authority to enter into this Agreement, including the right to grant
the License to use the Licensed Mark contemplated by this Agreement, and to
perform all of its obligation hereunder. [*](22)
VI-2. Licensee represents and warrants that it has full right, power
and authority to enter into this Agreement and to perform all of its obligations
hereunder.
VII. Additional Miscellaneous Provisions
VII-1. Each party hereby indemnifies and holds the other party and
its respective employees and Affiliates harmless from and against any and all
liabilities (including reasonable attorneys' fees and disbursements paid or
incurred in connection with any such liabilities) for any brokerage commissions
or finder's fees due any broker or finder engaged, utilized or
- --------
(21) Confidential portions omitted and filed separately with the Commission.
(22) Confidential portions omitted and filed separately with the Commission.
contacted by such indemnifying party in connection with this Agreement or the
transactions contemplated hereby.
Each party agrees that it will bear its own expenses related to any claim
arising from the predecessor license as referred to in the Agreement, and will
refrain from making claims against the other in connection herewith.
VII-2. Except as otherwise provided herein, this Agreement will inure
to the benefit of and will be binding upon the parties and permitted successors
and assigns.
VII-3. This Agreement will not constitute the parties as partners or
as joint venturers, or either as agent of the other, and Licensee will have no
power to obligate or bind Licensor in any manner whatsoever. Licensor will have
no responsibility for the operation or production of Licensee's manufacturing,
distribution or sales facilities or for any decisions that may be made in
connection therewith regardless of whether Licensor approves or suggests any of
the same.
VII-4. 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 Licensor will not be
deemed a waiver by Licensor of any violation of or default under any of the
provisions of this Agreement by Licensee.
VII-5. If any portion of this Agreement will be held to be void or
unenforceable, the remaining provisions of this Agreement and the remaining
portion of any provision held void or unenforceable in part will continue in
full force and effect.
VII-6 The parties expressly agree that the courts of the State of
New York and the federal courts located in the State of New York will be the
exclusive forum for the adjudication of any disputes relating to this Agreement
or the subject matter hereof, and that any judgement, award or order issued by
the courts of the State of New York and/or the federal courts located in the
State of New York will be enforceable in the courts in any jurisdiction in the
Territory. Licensee expressly and irrevocably submits to the jurisdiction of the
courts of the State of New York the federal courts located in the State of New
York and waives any right to contest the jurisdiction of such courts to
adjudicate disputes relating to this Agreement or the subject matter hereof and
waives any objection to the laying of venue of any suit or proceeding in such
courts. Notwithstanding anything to the contrary in this Agreement, Licensee
expressly agrees that Licensor will have the right to enjoin use of the Licensed
Mark in any venue or jurisdiction in the Territory. Service of any notice,
process, motion or other document in connection with proceedings relating in any
way to this Agreement or the subject matter hereof may be effectuated, either by
personal service or in the same manner as notices are to be given pursuant to
Section 15.1.
VII-7 This Agreement will be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted. If any words or phrases in this Agreement will have
been stricken out or otherwise eliminated, whether or not any other words or
phrases have been added, this Agreement will be construed as if those words or
phrases were never included in this Agreement, and no
implication or inference will be drawn from the fact that the words or phrases
were so stricken out or otherwise eliminated.
VII-8 Bankruptcy Option Notwithstanding the provisions of Section
13.2.1 above, in the event that, pursuant to the Bankruptcy Code or any
amendment or successor thereto (hereinafter referred to as the "Bankruptcy
Code"), a trustee in bankruptcy of Licensee (hereinafter referred to as the
"Trustee") or Licensee, as debtor (hereinafter referred to as the "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 Bankruptcy Code, the Trustee or the Debtor, as the case may
be, will notify Licensor of same in writing (hereinafter referred to as the
"Notice"). The giving of the Notice will be deemed to constitute the grant of an
option to Licensor to have this Agreement assigned to it or to its designee for
such consideration, or its equivalent in money, and upon such terms, as are
specified in the Notice. The aforesaid option may be exercised only by written
notice given by Licensor to the Trustee or the Debtor, as the case may be,
within 15 days after Licensor's receipt of the Notice from such party or such
shorter period of time as may be deemed appropriate by the court in the
bankruptcy proceeding. If Licensor fails to give its notice to such party within
the exercise period, such party may complete the assignment referred to in its
notice but only to the entity named in the Notice and upon the terms specified
therein. Nothing contained herein will be deemed to preclude or impair any
rights which Licensor may have as a creditor in any bankruptcy proceeding.
Schedule 15.2
SHAREHOLDERS OF CROWN CRAFTS, INC.
[*](23)
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(23) Confidential portions omitted and filed separately with the Commission.
Schedule 11 1-3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned (the
"Licensee") hereby confirms that the Calvin Klein Trademark Trust ("CKTT") is
the owner, and Calvin Klein, Inc. ("CKI") is a beneficial owner, of "Calvin
Klein", "CK/Calvin Klein", and all modifications and derivatives thereof (the
"Licensed Mark") and hereby appoints any and all officers of CKI including but
not limited to Deirdre Miles-Graeter, Assistant Secretary and Vice President
Corporate Affairs, as its true and lawful attorney-in-fact, with full power of
substitution, in connection with the maintenance, prosecution, defense and
transfer of the Licensed Mark, with full irrevocable power and authority in the
place of the Licensee and in the name of the Licensee or in its own name as
nominee for the Licensee, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the foregoing including, without limitation:
(i) the full power to sign its name upon all
documents and filings (including registered user agreements) and to take any
actions required to confirm the ownership of CKTT or CKI's beneficial ownership
of the Licensed Mark in the jurisdictions covered by its licensee agreement (the
"Territory") and the respective rights of CKTT, CKI and Licensee with respect to
the Licensed Mark;
(ii) the full power to sign its name upon all
documents and filings and to take any actions required by CKI and/or CKTT in
connection with the filing and prosecution of applications in CKTT's name (or,
if applicable, CKI's name) to register the Licensed Mark in the Territory and in
connection with the maintenance and renewal of such registrations as may issue;
and
(iii) from and after such time as Licensee's right
to use the Licensed Mark terminates, the full power to sign its name upon all
documents and filings and to take any actions required by CKI to evidence such
termination, including, without limitation, documents and filings required by
CKI to transfer to CKI all registrations, filings and rights with regard to the
Licensed Mark which Licensee may have possessed at any time and to affirm or
confirm CKTT's or CKI's rights in and to the Licensed Mark.
This Power of Attorney is governed by the laws of the State of New York
applicable to powers of attorney made and to be exercised wholly within such
State.
Dated: This ____ day of _____________, 199__
Crown Crafts Designer, Inc.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address
-----------------------------
------------------------------------
------------------------------------
SCHEDULE B
LICENSED PRODUCTS
SOFT HOME FURNISHED PRODUCTS
Comforters (Std. & Down)(23)
Pillows (Std. & Down)(1)
Down Featherbeds(1)
Decorative Pillows
Sheets and Pillowcases
Towels
Bedspreads
Coverlets
Quilts
Shams
Dust Ruffles
Shower Curtains
Bath Rugs
Bath Valances
Duvets/Duvet Covers
Napkins
Placemats
Chair Pads
Table Rounds
Tablecloths
Throws
Blankets
Window Treatments
Bath Accessories: (bath mirrors, soap dishes, tumblers, tissue boxes,
bathroom trays)(24)
- --------
(1) Down comforters and pillows (standard and down) and Down Featherbeds
are to be produced and sold pursuant to a sublicense and by a
sublicensee to be subject to the approval of Licensor (including the
specific terms of any sublicense)
(2) To be produced by Swid Powell, Inc. or other contractors designated by
Licensor and sold by Licensee.
SCHEDULE C
1. United States of America
2. Canada
3. Mexico
4. Europe
- Belgium
- Netherlands
- Luxembourg
- Denmark
- Germany
- France
- Monaco
- Italy
- Great Britain
- Ireland
- Portugal
- Spain
- Greece
- Austria
- Finland
- Iceland
- Liechtenstein
- Norway
- Sweden
- Switzerland
5. South America
- Venezuela
- Guyana
- Suriname
- French Guiana
- Colombia
- Ecuador
- Brazil
- Peru
- Bolivia
- Paraguay
- Chile
- Uruguay
- Argentina
6. Central America
- Belize
- Guatemala
- Honduras
SCHEDULE C (continued)
- El Salvador
- Nicaragua
- Costa Rica
- Panama
7. Caribbean Islands
- The Bahamas
- Cayman Islands
- Jamaica
- Haiti
- Dominican Republic
- Puerto Rico
- British Virgin Islands
- U.S. Virgin Islands
- Anguilla
- St. Martin
- St. Barthelemy
- St. Kitts & Nevis
- Antigua & Barbuda
- Montserrat
- Guadeloupe
- Dominica
- Martinique
- St. Lucia
- Barbados
- Grenada
- Trinidad & Tobago
- Aruba
- Curacao
- Cuba
- Turks & Caicos Islands
- Bermuda
- St. Vincent & the Grenadines
- Netherlands Antilles
8. The Middle-East
- Israel
- Egypt
- Jordan
- Kuwait
- Saudi Arabia
- Turkey
- United Arab Emirates
- Dubai
SCHEDULE D
[*](24)
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(24) Confidential portions omitted and filed separately with the
Commission.
GUARANTEE
In order to induce Calvin Klein, Inc. ("Licensor") to enter into
the license agreement (the "Agreement") with Crown Crafts, Inc. ("Licensee")
which is being executed simultaneously herewith and in consideration of the
covenants and promises made by Licensor in the Agreement, the undersigned (the
"Guarantor"), being the parent of Licensee, unconditionally guarantees that
Licensee will perform and observe each and every agreement, covenant,
representation, warranty, term and condition of the Agreement to be performed or
observed by it, and upon Licensee's failure to do so, the Guarantor will
promptly perform and cause the same promptly to be performed and observed. The
Guarantor unconditionally guarantees that all sums of whatever character which
may become payable by Licensee pursuant to the Agreement or contemplated by the
Agreement (including amounts which would be paid but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 362(a) of
any other provision of bankruptcy law) will be paid promptly in full when due.
If for any reason whatsoever any sum hereinabove referred to, or any part
thereof, shall not be paid promptly when due, the Guarantor will immediately pay
the same regardless of whether Licensor has taken steps to enforce any right
against Licensee to collect any of said sums and regardless of any other
condition or contingency.
The Guarantor undertakes to adequately finance the operations of
the Licensee and shall, at all times throughout the Term, maintain (i) a
tangible net worth (where "tangible net worth" shall mean the amount of
shareholders' equity shown in the consolidated balance sheet of Crown Crafts,
Inc. and subsidiaries reduced by the unamortized balance of any intangibles
shown in such consolidated balance sheet) of not less than [*](25), and (ii) a
ratio of debt to total capitalization (where "debt" shall mean the total amounts
of notes payable, current maturities of long-term debt as shown in the
consolidated balance sheet of Crown Crafts, Inc. and subsidiaries and "total
capitalization" shall mean the sum of "debt" plus shareholders' equity as shown
in such consolidated balance sheet) of not more than [*](26) percent.
Notwithstanding anything to the contrary contained herein, to the
extent this Guarantee relates to the payment of sums due to Licensor under the
Agreement, it is a Guarantee of payment and not of collection and a continuing
guarantee which will remain in full force and effect and be binding upon the
undersigned until payment in full by Licensee to Licensor of all sums due
pursuant to the Agreement.
The representations, warranties, obligations, covenants,
agreements, and duties of the Guarantor under this Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following with respect to the Agreement although without notice to or the
further consent of the Guarantor: (i) the waiver by Licensor of the performance
or observance by Licensee of any agreement, covenant, warranty, representation,
term, or condition contained in the Agreement; (ii) the
- --------
(25) Confidential portions omitted and filed separately with the
Commission.
(26) Confidential portions omitted and filed separately with the
Commission.
extension, in whole or in part, of the time for the payment by Licensee of any
sums owing or payable under the Agreement, or of the time or performance by
Licensee of any of its other obligations under or arising out of the Agreement;
(iii) the modification or amendment (whether material or otherwise) of any of
the obligations of Licensee under the Agreement; (iv) any failure, omission,
delay or lack on the part of Licensor to enforce, assert or exercise any right,
power or remedy conferred on Licensor in the Agreement or otherwise; (v) the
release or equitable discharge of Licensee from the performance or observance of
any agreement, covenant, warranty, representation, term or condition of the
Agreement by operation of law; (vi) the voluntary or involuntary liquidation,
reorganization or dissolution of, or the receivership, insolvency, bankruptcy,
assignment for the benefit of a creditors or similar proceedings affecting the
Licensee or any of its assets; or (vii) any discharge of Licensee from any of
its obligations under the Agreement.
No failure on the part of Licensor to exercise, and no delay in the
exercise of, any right, remedy or power hereunder will operate as covenant, term
or condition under the Agreement or in the payment of any sums payable by it
thereunder.
This Guarantee will be construed and enforced under the laws of the
State of New York applicable to agreements made and to be performed in said
State.
The Guarantor represents and warrants that it is not entitled to
immunity from judicial proceedings commenced in the State of New York, U.S.A.,
and agrees that, should any judicial proceedings be brought to enforce their
liability hereunder, they will not claim any immunity from such proceedings for
itself or with respect to its property.
The Guarantee cannot be changed, discharged or terminated orally.
The Guarantor hereby waives acceptance of this Guarantee.
Crown Crafts, Inc.
Dated: 6 May 1998
New York, New York
By: /s/ Michael Bernstein
----------------------------------
1600 RiverEdge Parkway, Suite 200
-------------------------------------
Address
Atlanta, Georgia 30328
-------------------------------------
May 6, 1998
License Agreement
Dated as of May 11, 1998
(Supplemental Agreement)
WHEREAS, Calvin Klein, Inc. ("Licensor") and Crown Crafts Designer, Inc.
("Licensee") have today entered into the above-captioned License Agreement
relating to certain soft home furnishings products (the "License Agreement");
and
WHEREAS, the parties desire to set forth certain clarifications and
modifications of the license Agreement; and
WHEREAS, terms not otherwise clarified herein shall have the meanings ascribed
to such terms in the License Agreement;
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. [*] (27)
2. [*] (28)
3. [*] (29)
4. [*] (30)
- -------------------------
(27) Confidential portions omitted and filed separately with the
Commission.
(28) Confidential portions omitted and filed separately with the
Commission.
(29) Confidential portions omitted and filed separately with the
Commission.
(30) Confidential portions omitted and filed separately with the
Commission.
5. [*] (31)
6. [*] (32)
Except as modified by this Supplementary Agreement, the License Agreement shall
remain in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this letter as of the date above
written.
CALVIN KLEIN, INC.
By: /s/ Bary Schwartz
------------------------------
Name: Bary Schwartz
Title: Chairman
CROWN CRAFTS DESIGNER, INC.
By: /s/ Michael H. Bernstein
------------------------------
Name: Michael H. Bernstein
Title: President
- ------------------------------
(31) Confidential portions omitted and filed separately with the
Commission.
(32) Confidential portions omitted and filed separately with the
Commission.
2