\n17.18 Type of Sales………………………………………………. 33
\n17.19 Employee Attire…………………………………………….. 34
\n17.20 Inspections………………………………………………… 34
\nARTICLE 18. INDEMNIFICATION AND INSURANCE…………………………… 35
\n18.1 Indemnification by Licensee………………………………….. 35
\n18.2 Notice of Suit or Claim……………………………………… 35
\n18.3 Indemnification by Hilfiger………………………………….. 35
\nARTICLE 19. NOTICES………………………………………………. 36
\n19.1 Manner of Notice……………………………………………. 36
\nARTICLE 20. SUSPENSION OF OBLIGATIONS………………………………. 37
\n20.1 Suspension of Obligations (Force Majeure)……………………… 37
\nARTICLE 21. MISCELLANEOUS…………………………………………. 37
\n21.1 Benefit……………………………………………………. 37
\n21.2 Entire Agreement; Amendment………………………………….. 37
\n21.3 Non-Waiver…………………………………………………. 37
\n21.4 No Assignment Without Consent………………………………… 37
\n21.5 Sale of Assets……………………………………………… 38
\n21.6 Sale of Stock\/Interest………………………………………. 38
\n21.7 Assignment by Hilfiger………………………………………. 38
\n21.8 Public Offering…………………………………………….. 38
\n21.9 Severability……………………………………………….. 38
\n21.10 Governing Law………………………………………………. 39
\n21.11 Jurisdiction……………………………………………….. 39
\n21.12 Exhibits…………………………………………………… 39
\n21.13 Headings…………………………………………………… 39
\n21.14 Counterparts……………………………………………….. 40
\n<\/c><\/s><\/table>\nEXHIBITS<\/p>\n
EXHIBIT A TRADEMARKS
\nEXHIBIT B LICENSED PRODUCTS
\nEXHIBIT C ORGANIZATION CHART
\nEXHIBIT D DESIGN AND PRODUCTION PLAN
\nEXHIBIT E APPROVAL FORM
\nEXHIBIT F CODE OF CONDUCT
\nEXHIBIT G THIRD PARTY MFR CERTIFICATION
\nEXHIBIT H THIRD PARTY MFR AGREEMENT
\nEXHIBIT I SUPPLIER CERTIFICATION
\nEXHIBIT J ILLUSTRATIVE LIST OF COMPETITORS
\nEXHIBIT K ROYALTY STATEMENT
\nEXHIBIT L CERTIFICATION
\nEXHIBIT M ADVERTISING EXPENDITURE FORM
\nEXHIBIT N ADVERTISING APPROVAL FORM<\/p>\n
LICENSE AGREEMENT
\n —————–<\/p>\n
THIS AGREEMENT is entered into as of the 1\/st\/ day of January, 2001, by
\nand between TOMMY HILFIGER LICENSING, INC., a Delaware corporation, having an
\naddress at 913 N. Market Street, Wilmington, Delaware 19801 (“Hilfiger”) and
\nT.H.M.J. INCORPORATED, a Japan corporation, having its offices at 8-20
\nNishigotanda 8-chome, Shinagawa-ku, Tokyo, Japan (“Licensee”), with reference to
\nthe following premises.<\/p>\n
PREMISES<\/p>\n
A. Hilfiger’s Trademarks (as defined below) are famous and valuable, and are
\nassociated with substantial goodwill in connection with apparel and related
\nproducts.<\/p>\n
B. Licensee recognizes the fame, value of, and goodwill associated with the
\nTrademarks and that all rights to the Trademarks, and the goodwill associated
\ntherewith, belong exclusively to Hilfiger.<\/p>\n
C. Licensee desires to have the license to use the Trademarks, on and in
\nconnection with the manufacture and distribution of Licensed Products (as
\ndefined below) and the operation of retail stores for the sale of Licensed
\nProducts in Approved Locations (as defined below) in the Territory (as defined
\nbelow).<\/p>\n
D. Hilfiger is willing to grant such License subject to the terms and
\nconditions set forth below.<\/p>\n
E. In consideration of these premises and the mutual covenants herein
\nexpressed, and for other good consideration, which the parties hereby
\nacknowledge, the parties hereby agree as follows.<\/p>\n
ARTICLE 1. DEFINITIONS<\/p>\n
1.1 Affiliates of Licensee means all persons and business entities that now
\nor hereafter control, or are owned or controlled, directly or indirectly, by
\nLicensee, or are under common control with Licensee.<\/p>\n
1.2 Annual Period means each twelve-month period beginning on January 1 and
\nending on December 31.<\/p>\n
1.3 Approved Locations means the store locations in the Territory
\nspecifically approved by Hilfiger in writing in accordance with Paragraph 5.2.<\/p>\n
1.4 Concessions means independent retail stores located within department
\nstores, which are operated by Licensee. Concessions shall not include in-store
\nshops operated by retailers. Sales from concessions shall require the payment
\nof Wholesale Percentage Royalty.<\/p>\n
1.5 Close-Outs means first quality Licensed Products that under applicable
\nindustry standards cannot be or are not sold to regular customers.<\/p>\n
1.6 Exchange Rate means the spot rate of exchange prevailing at each
\nrespective due date for all payments due to Hilfiger under this agreement. The
\nspot rate of exchange shall be determined by quotation from Chase Manhattan
\nBank’s Foreign Exchange Desk in New York or such other bank as selected by
\nLicensee and deemed acceptable to Hilfiger.<\/p>\n
1.7 Extension Products means Licensed Products which by virtue of their style
\nor fit are not the same as products manufactured and sold by Hilfiger’s U.S.
\nlicensee, Tommy Hilfiger U.S.A., Inc.<\/p>\n
1.8 Gross Sales means the invoiced amount of Licensed Products shipped by
\nLicensee, before any deductions for allowances, discounts and returns, insurance
\nand freight as are referred to in Paragraph 1.17.<\/p>\n
1.9 Guaranteed Minimum Royalty means the minimum royalties that Licensee must
\npay in each Annual Period, as set forth in Paragraph 9.1.<\/p>\n
1.10 Inventory means Licensee’s inventory of Licensed Products and of related
\nwork in progress.<\/p>\n
1.11 Inventory Schedule means a complete and accurate schedule of Inventory.<\/p>\n
1.12 Lease means any lease or other document granting Licensee the right to
\noccupy the facility for any of its Stores.<\/p>\n
1.13 Labels means all labels, tags, packaging material, tickets, advertising
\nand promotional materials and all other forms of identification affixed to or
\nconnected with the Licensed Products that bear the Trademarks.<\/p>\n
1.14 Licensed Products means only those products listed in Exhibit B attached
\nhereto, that bear the Trademarks under authorization from Hilfiger. Licensee
\nacknowledges that the definition of Licensed Products may change and may not be
\namenable to precise delineation. Licensee agrees that if there is a dispute
\nover the definition of Licensed Products, Hilfiger’s written determination shall
\nbe conclusive and binding on Licensee, without legal recourse.<\/p>\n
1.15 Manufactured Products means Extension Products and other Licensed
\nProducts which, with the prior written consent of Hilfiger, are manufactured by
\nor for Licensee through sources approved by Hilfiger other than Tommy Hilfiger
\n(Eastern Hemisphere) Limited (“THEH”) and Tommy Hilfiger U.S.A., Inc. (“THUSA”).<\/p>\n
1.16 Minimum Sales Level means the minimum Net Sales (as defined below) of
\nLicensed Products that Licensee must achieve during each Annual Period, as set
\nforth in Paragraph 7.5.<\/p>\n
1.17 Net Sales means the Gross Sales of Licensed Products, including but not
\nlimited to, Seconds and Close-Outs, to retailers who are not Affiliates of
\nLicensee, less only: (a) returns that Licensee actually authorizes and receives,
\n(b) allowances (defined as credits to a customer after delivery, <\/p>\n
2<\/p>\n
including credits for returns) that Licensee actually grants in writing, and (c)
\ntrade discounts (defined as reductions in the list wholesale selling price that
\nare customary in the trade) that Licensee actually grants in writing prior to
\ndelivery. For the purpose of computing Net Sales, the deductions from the Gross
\nSales for returns, allowances and trade discounts may not exceed * percent of
\nthe Gross Sales of Licensed Products shipped in any Annual Period.<\/p>\n
1.18 Outlet Stores means free-standing retail locations from which Licensee
\nshall be permitted to sell Licensed Products to retail customers at
\npredominantly discount prices.<\/p>\n
1.19 Percentage Royalty means the amount of money that Licensee will pay to
\nHilfiger in consideration for the grant of this license, including Wholesale
\nPercentage Royalty and Retail Percentage Royalty.<\/p>\n
1.20 Retail Percentage Royalty means Percentage Royalty arising from Retail
\nSales of Licensed Products, which amount is * percent of the Gross Revenues
\nderived from such Retail Sales without deduction.<\/p>\n
1.21 Retail Sales means the sales price of Licensed Products charged to retail
\ncustomers as permitted hereunder, less only returns that Licensee actually
\nauthorizes and receives.<\/p>\n
1.22 Retail Stores means free-standing retail locations from which Licensee
\nshall be permitted to sell Licensed Products to retail customers at
\npredominately full retail prices.<\/p>\n
1.23 Seasonal Collections means the collection of Licensed Products that
\nLicensee will present to the market at least four (4) times per year in
\naccordance with Paragraph 6.1.<\/p>\n
1.24 Seconds means damaged, imperfect, defective or otherwise non-first
\nquality Licensed Products.<\/p>\n
1.25 Stores means Retail Stores and Outlet Stores. Stores shall specifically
\nnot include in-store shops operated by the retailers or Concessions.<\/p>\n
1.26 Subcontractor means an entity or an individual hired by a Third Party
\nManufacturer (as defined below) to perform manufacturing in relation to this
\nAgreement.<\/p>\n
1.27 Supplier means an individual or entity that produces components for the
\nLicensed Products, and provides such components to the manufacturer in order to
\nassemble the finished Licensed Products, provided that such individual or entity
\ndoes not contribute further to the manufacture of the Licensed Products.
\nExamples of a supplier include, but are not limited to, those who manufacture<\/p>\n
________________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
3<\/p>\n
fabric\/trim, yarn, buttons, or zippers.<\/p>\n
1.28 Term means the duration of this Agreement, as set forth in Paragraph 3.1,
\nincluding, if not expressly excluded, all Extensions (as defined below), if any.<\/p>\n
1.29 Territory means Japan.<\/p>\n
1.30 Third Party Manufacturer means an entity or an individual which or whom
\nLicensee either hires or pays to manufacture the License Products.<\/p>\n
1.31 Trade Secrets means any and all information that derives to its owner
\nindependent economic value, actual or potential, from not being generally known
\nto the public or to other persons who can obtain economic value from its
\ndisclosure or use, and that is the subject of efforts that are reasonable under
\nthe circumstances to maintain its secrecy.<\/p>\n
1.32 Trademarks means only the trademarks set forth in Exhibit A attached
\nhereto.<\/p>\n
1.33 Wholesale Percentage Royalty means Percentage Royalty arising from the
\nsale of Licensed Products to wholesale customers, other than Stores, which
\namount is * percent of wholesale Net Sales. The Wholesale Percentage Royalty
\nwill be based on the bona fide wholesale prices that Licensee charges for
\nLicensed Products to independent retailers in arms’ length transactions. If
\nLicensee sells Licensed Products to Affiliates of Licensee, the Wholesale
\nPercentage Royalty will be on such bona fide wholesale price, irrespective of
\nLicensee’s internal accounting treatment of such sales.<\/p>\n
ARTICLE 2. GRANT<\/p>\n
2.1 License. Hilfiger hereby grants to Licensee an exclusive non-assignable
\nlicense during the Term, subject to all of the obligations and conditions
\ncontained in this Agreement, to use the Trademarks in connection with (a) the
\nmanufacture of Licensed Products anywhere in the world, subject to approval by
\nHilfiger in each case, (b) the distribution at wholesale of Licensed Products in
\nthe Territory, and (c) the operation of Stores in Approved Locations in the
\nTerritory and the distribution at retail of Licensed Products from such Stores.<\/p>\n
2.2 Reservations. This Agreement does not constitute a grant of any rights
\nother than those set forth in Paragraph 2.1 above. In particular, Hilfiger does
\nnot grant to Licensee:<\/p>\n
a. the right to use the name “TOMMY” or “HILFIGER” individually;<\/p>\n
____________________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
4<\/p>\n
b. the right to use any derivative of, modification to, the Trademarks;<\/p>\n
c. the right to form a business entity whose name includes the terms
\n “Tommy Hilfiger” or “Hilfiger”, except that Licensee shall be
\n permitted to use the corporate name “Tommy Hilfiger Japan
\n Corporation” during the Term and for the purposes of this Agreement
\n only. Upon termination or expiration of this Agreement for any
\n reason, Licensee must immediately change its corporate name to
\n delete any reference to the Trademarks, or<\/p>\n
d. an assignment of any right, title or interest in or to the
\n Trademarks.<\/p>\n
Hilfiger, and its other licensees and sublicensees, have the right to
\nmanufacture or authorize third parties to manufacture Licensed Products in the
\nTerritory for sale outside of the Territory, or to manufacture and sell or
\nauthorize third parties to manufacture and sell products of any and all types
\nand descriptions other than the Licensed Products in or outside the Territory,
\nor to operate Stores outside the Territory.<\/p>\n
Except as otherwise required by applicable law, no license is granted hereunder
\nfor the manufacture, sale or distribution of Licensed Products to be used for
\npublicity purposes, other than to promote the sale of Licensed Products, in
\ncombination sales, premiums or giveaways, or to be disposed of under or in
\nconnection with similar methods of merchandising, such license being
\nspecifically reserved for Hilfiger.<\/p>\n
ARTICLE 3. TERM OF THE AGREEMENT<\/p>\n
3.1 Term. The initial term of this Agreement shall commence on the date of
\nthis Agreement shall end on December 31, 2005 (the “Term”).<\/p>\n
3.2 Extension. This Agreement may be extended for one additional five (5)
\nyear period through December 31, 2010 (“Extension”), if Licensee:<\/p>\n
1. requests the Extension in writing at least twelve (12) months, but
\n nor more than fifteen (15) months, before the expiration of the
\n Term;<\/p>\n
2. at the time it requests the Extension, is in compliance with all
\n material terms and conditions of any and all agreements between
\n Licensee and Hilfiger; and<\/p>\n
3. up to the time it requests the Extension, has met the Total Minimum
\n Net Sales Levels for at least * of the five (5) Annual Periods
\n during the Term.<\/p>\n
________________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
5<\/p>\n
Licensee acknowledges that the twelve (12) month advance notice is necessary to
\nmaintain the continuity of Hilfiger’s licensing and marketing programs and the
\ngood will associated with the Trademarks. Licensee agrees that timing is
\ncritically important in this regard and that Licensee’s failure to make its
\nrequest in time will be construed as a decision by Licensee that it has elected
\nnot to seek an Extension. Upon such failure, Hilfiger has the right, with
\nfifteen (15) days notice to Licensee, to immediately replace Licensee as of the
\nend of the Term or thereafter, unless Licensee shall request the Extension in
\nwriting within such fifteen (15) days.<\/p>\n
ARTICLE 4. ORGANIZATION<\/p>\n
4.1 Organization. Licensee will, at its sole cost and expense, employ
\nindividuals to fill the positions set forth on Exhibit C, or persons with
\nsimilar titles and responsibility, who will all work exclusively with Hilfiger’s
\nrepresentatives on Licensee’s business arising under this Agreement and will
\nreport directly to the President of Licensee or his or her designee. Hilfiger
\nwill employ a designer, who shall be located in New York, to work on the design
\nof Extension Products and to assist in product development. Licensee shall
\nreimburse Hilfiger for the portion of such designer’s salary and benefits which
\nis equal to the portion of such designer’s time expended for the purposes of
\nthis Agreement. In addition, Licensee shall reimburse Hilfiger for such
\ndesigner’s travel expenses and out-of-pocket design costs. The individuals
\nholding the positions of CEO\/President, CSO, CMO and Designer will be hired with
\nthe prior approval of Hilfiger. In addition, Licensee will maintain a sales
\nforce dedicated exclusively to the sale of Licensed Products, however, the exact
\nstructure of the sales force may reasonably vary over time from that which is
\nset forth on Exhibit C.<\/p>\n
ARTICLE 5. APPROVALS<\/p>\n
5.1 Approvals. Licensee must present to Hilfiger in writing all approvals
\nrequired or permitted by this Agreement. Except as otherwise stated in this
\nAgreement, all approvals of Hilfiger will be at its sole and subjective
\ndiscretion. A submission for approval will be deemed disapproved unless
\n ———–
\nHilfiger delivers a notice of approval within twenty (20) days after receipt of
\nthe request from Licensee. Hilfiger will endeavor to provide an explanation for
\nits disapprovals, but its failure to do so will not affect the finality of its
\ndetermination. Without limitation to the foregoing, Hilfiger has no obligation
\nto approve, review or consider any item that does not strictly comply with
\nsubmission procedures announced by Hilfiger. Approval by Hilfiger will not be
\ndeemed to be a determination that the approved matter complies with all
\napplicable regulations and laws. Licensee may not exhibit, display,
\nmanufacture, sell, use, distribute or advertise any disapproved item. In the
\nevent that it is reasonably necessary for Hilfiger to do on-site approvals,
\nLicensee will pay any and all expenses and airfare incurred by Hilfiger with
\nrespect to such on-site approvals.<\/p>\n
5.2 Approved Locations. Before Licensee shall establish any Store, Licensee
\nshall submit the location of each such proposed Store to Hilfiger for its prior
\nwritten approval, which approval may be withheld by Hilfiger in its sole and
\nabsolute discretion. A submission for approval shall be <\/p>\n
6<\/p>\n
deemed disapproved unless Hilfiger delivers a notice of approval within twenty
\n(20) days from confirmed receipt thereof by Hilfiger. No Store may be
\nestablished by Licensee pursuant to this Agreement unless approved by Licensor
\nin accordance with this Paragraph. A Concession shall be subject to approval as
\nto the store location and the specific location within such store. Licensee
\nshall reimburse Hilfiger for Hilfiger’s costs (including business class airfare,
\nhotel accommodations and expenses) incurred in connection with all “on-site”
\nvisits made by Hilfiger in connection with Store approval.<\/p>\n
ARTICLE 6. DESIGN AND MANUFACTURING<\/p>\n
6.1 Design and Production Plan. Merchandising budgets and plans detailing
\nprojected buys and assortments, portion of USA tag-on and special product
\ndevelopment requirements for each approved product division must be submitted to
\nHilfiger for review and approval prior to seasonal buying trips. For detailed
\ntime-line information, product development procedures and approval criteria,
\nplease refer to the International Product Development calendar in place for each
\ndivision (Exhibit “D”).<\/p>\n
6.2 Overall Commitment to Quality. Licensee will maintain the distinctiveness
\nof the Trademarks and the image and high quality of the goods bearing Trademarks
\npresently manufactured and sold by Hilfiger and its other licensees. Licensee
\nagrees that Extension Products and Manufactured Products will be of high quality
\nas to workmanship, fit, design and materials used therein, and will be at least
\nequal in quality, workmanship, appearance, fit, design and material
\n(collectively “Quality”) to the samples of Extension Products and Manufactured
\nProducts submitted by Licensee and approved by Hilfiger pursuant to Paragraph
\n6.3 hereof.<\/p>\n
6.3 Samples of Extension Products. Before Licensee may exhibit, display or
\ndistribute any Extension Products in any Seasonal Collection, Licensee must
\nsubmit samples of each of such Extension Products to Hilfiger for its prior
\nwritten approval. Any such request for approval must be submitted to Hilfiger on
\nthe form attached hereto as Exhibit E. Any approval given hereunder will apply
\nonly to that Seasonal Collection for which it is submitted to Hilfiger. Licensee
\nwill submit to Hilfiger additional samples of Extension Products upon Hilfiger’s
\nreasonable request. Licensee will provide all samples to Hilfiger free of
\ncharge. Once samples have been approved, Licensee may manufacture only in
\naccordance with such approved samples and will not make any changes for
\nmanufacture without Hilfiger’s prior written approval. No Extension Products
\n(including samples) may be exhibited, displayed, distributed and\/or sold by
\nLicensee pursuant to this Agreement unless such Extension Products are in
\nsubstantial conformity with, and at least equal in, Quality to the samples
\npreviously approved by Hilfiger in accordance with this Paragraph 6.3.<\/p>\n
6.4 Non-Conforming Products. In the event that any Extension Product or
\nManufactured Product is, in the judgment of Hilfiger, not being manufactured and
\ndistributed with the previously approved Quality, Hilfiger will notify Licensee,
\nand Licensee must promptly repair or change such Extension Product or
\nManufactured Product to conform thereto. If after Hilfiger’s request a Licensed<\/p>\n
7<\/p>\n
Product as repaired or changed does not strictly conform and conformity cannot
\nbe obtained after one (1) resubmission, if permitted by Hilfiger, Licensee may
\nsell the item but not in Stores and only after removing from the item the
\nTrademarks and Labels. Notwithstanding anything in this Paragraph 6.4 to the
\ncontrary, sales of all products of Hilfiger’s design, whether or not bearing
\nLabels or the Trademarks, will nonetheless be subject to Royalty Payments
\npursuant to Article 9. Hilfiger may, at Licensee’s expense, purchase any
\nExtension Products or Manufactured Products found in the marketplace that, in
\nHilfiger’s judgment, are inconsistent with approved Quality and bill such costs
\nto Licensee. Licensee must pay all royalties due on sales of nonconforming
\ngoods. Hilfiger may require Licensee to recall any Extension Products or
\nManufactured Products not consistent with approved Quality.<\/p>\n
6.5 Withdrawal of Approval. If at any time any Extension Product ceases to be
\nacceptable to Hilfiger, Hilfiger will have the right in the exercise of its sole
\ndiscretion to withdraw approval of such Extension Product upon reasonable
\nadvance notice to Licensee. Upon withdrawal of approval, Licensee will cease the
\nuse of the Trademarks in connection with the manufacture, distribution,
\npromotion, advertising, and use of such Extension Product(s). Notice of such
\nelection by Hilfiger to withdraw approval will not relieve Licensee from its
\nobligation to pay royalties on sales of such product(s) made by Licensee prior
\nto the date of disapproval or thereafter as permitted. Licensee may, however,
\ncomplete work in progress and utilize materials on hand provided that it submits
\nproof of such work in progress and inventory of materials to Hilfiger.<\/p>\n
6.6 Assistance by Hilfiger. At least four (4) times during each Annual Period
\nfor each product category, Licensee must, at its expense, visit Hilfiger’s
\noffices, factories, showroom, and other places of business, and attend
\nHilfiger’s international adoption meetings to obtain additional know-how and
\nassistance with respect to Licensed Products. Licensee shall reimburse Hilfiger
\nfor the cost of (a) one Hilfiger employee to make two (2) trips per Annual
\nPeriod to review the Stores; and (b) one Hilfiger employee to make two (2) trips
\nper Annual Period to the Territory for the training of Store staff and
\nspecialists. The scheduling of such visits will be at times mutually convenient
\nto the parties hereto. If Licensee requests Mr. Tommy Hilfiger or any other
\nmember(s) of Hilfiger’s staff to make a personal appearance, to attend any
\nfunction, to visit Licensee’s manufacturing plants or facilities or to attend
\nany design meetings, Licensee will pay all reasonable expenses connection
\ntherewith, including air travel and hotel accommodations (which for Tommy
\nHilfiger will be first class) and other reasonable services of Hilfiger’s
\nchoosing. Hilfiger will, at least four (4) times during each Annual Period, make
\navailable to Licensee certain samples, designs, colors, samples of materials,
\nLabels and artwork, and the cost of which will be borne by Licensee at the cost
\nincurred by Hilfiger to provide the same. In addition to the foregoing, for
\nmarketing purposes, Hilfiger will, upon reasonable request, make available to
\nLicensee such of the following which are available to Hilfiger: (a) reports on
\nmarketing policy of Hilfiger; (b) reports on color, style and fabric trends; (c)
\nsamples of advertising materials; (d) display ideas; and (e) Labels.<\/p>\n
6.7 Ownership of Designs. All right, title and interest in and to all
\nsamples, sketches, designs, and other materials, whether created by Hilfiger, by
\nLicensee, or by third parties, including any <\/p>\n
8<\/p>\n
modifications or improvements thereto, are the exclusive property of Hilfiger;
\nand this Agreement constitutes an assignment by Licensee to Hilfiger of such
\nrights, to the extent they are not already the property of Hilfiger, and are
\nlicensed hereunder solely and exclusively for use in connection with the
\nmanufacture and distribution of Licensed Products in the Territory. Hilfiger may
\nuse and permit others to use said designs and other materials in any manner it
\ndesires, provided that such use does not conflict with any rights that Hilfiger
\nis granting to Licensee hereunder. Licensee specifically acknowledges that such
\ndesigns and other materials may be used by Hilfiger and other licensees on
\nLicensed Products in jurisdictions outside the Territory and on products other
\nthan Licensed Products anywhere in the world. Licensee will place appropriate
\nnotices, reflecting ownership of design rights by Hilfiger, on all Licensed
\nProducts, Labels and advertising and promotional materials. Licensee will not do
\nor allow to be done anything that may adversely affect any of Hilfiger’s design
\nrights. Licensee must disclose and freely make available to Hilfiger any and all
\ndevelopments or improvements it may make relating to Licensed Products and to
\ntheir manufacture, promotion and sales, including, without limitation,
\ndevelopments and improvements in any machine, process or product design, that
\nmay be disclosed or suggested by Hilfiger or regarding any patent or trademark
\nthat Licensee is entitled to utilize.<\/p>\n
6.8 Cost of Designs. Licensee will pay for all pre and post-adoption design
\ncosts for Hilfiger’s designs and all design costs for Licensee’s designs
\nrelative to Extension Products, as well as all extraordinary costs such as
\nexpedited shipping charges associated with the delivery of the designs.<\/p>\n
6.9 Code of Conduct. Attached hereto as Exhibit F is Hilfiger’s Supplier Code
\nof Conduct (“Code”) which applies to any entity manufacturing Extension Products
\nor Manufactured Products (including the components thereof). Licensee must
\nensure that Licensee and all Third Party Manufacturers, Subcontractors and
\nSuppliers comply with the terms of the Code and will evidence such compliance
\nby:<\/p>\n
a. prior to the commencement of the manufacturing of Extension Products
\nor Manufactured Products, Licensee executing, and having all Third Party
\nManufacturers, Subcontractors and Suppliers execute, the Code in the form
\nattached hereto, and returning such document to Hilfiger, and<\/p>\n
b. displaying and having all Third Party Manufacturers, Subcontractors
\nand Suppliers display the Code, in a clearly visible location in Licensee’s
\nmanufacturing facilities (if applicable) and in the manufacturing facilities of
\nLicensee’s Third Party Manufacturers, Subcontractors and Suppliers, in local
\nlanguages, at all times during the Term of this Agreement.<\/p>\n
6.10 Monitoring Program. Licensee acknowledges that prior to the commencement
\nof the manufacturing of Extension Products or Manufactured Products, it will
\nhave in effect, to the satisfaction of Hilfiger, a program of monitoring
\nmanufacturing facilities, whether operated by Licensee, by Third Party
\nManufacturers, Subcontractors or Suppliers, that is sufficient to ensure their
\ncompliance with the Code and all applicable laws and regulations pertaining to
\nwages, overtime <\/p>\n
9<\/p>\n
compensation, benefits, hours, hiring and employment, workplace conditions and
\nsafety, the environment, collective bargaining, freedom of association, and that
\ntheir products and the components thereof are made without the use of child
\n(persons under the age of 15 or younger than the age for completing compulsory
\neducation, if that age is higher than 15), prison, indentured, exploited,
\nbonded, forced or slave labor. Such compliance will be evidenced by Licensee,
\nupon execution of this Agreement, executing and abiding by the Certification in
\nthe form as attached hereto as Exhibit G, and executing and abiding by any such
\nother form as may be provided by Hilfiger from time to time.<\/p>\n
6.11 Third Party Manufacturing Agreement. Within thirty (30) days after
\nestablishing a new arrangement with a Third Party Manufacturer or Subcontractor,
\nLicensee must inspect each Third Party Manufacturer or Subcontractor and provide
\napproval, signed by an authorized employee or agent of Licensee that such Third
\nParty Manufacturer or Subcontractor is in compliance with Paragraph 6.9 above,
\nand will obtain and provide to Hilfiger the signature of an authorized
\nrepresentative from each of such parties on a Third Party Manufacturing
\nAgreement in the form of Exhibit H attached hereto, or such other form as may be
\nprovided by Hilfiger from time to time. Within thirty (30) days after
\nestablishing a new arrangement with a Supplier, Licensee must obtain and provide
\nto Hilfiger the signature of an authorized representative from each Supplier on
\na Certification in the form of Exhibit I attached hereto, or such other form as
\nmay be provided by Hilfiger from time to time. In the event Licensee has
\nknowledge of, has reason to believe, or should have reason to know that any
\nThird Party Manufacturer, Subcontractor or Supplier is in breach of the Third
\nParty Manufacturing Agreement or Certification, as the case may be, Licensee
\nmust immediately notify Hilfiger and Licensee shall, at its sole expense, take
\nimmediate action to rectify such breach, including, where Hilfiger deems it
\nnecessary, immediate termination of its relationship with such Third Party
\nManufacturer, Subcontractor or Supplier. If Licensee fails to take immediate
\naction or such action is not successful, Licensee will assign its rights to
\nproceed against such Third Party Manufacturer, Subcontractor or Supplier to
\nHilfiger and Hilfiger will, at Licensee’s expense, have the right to pursue all
\navailable remedies to protect its rights. Notwithstanding the foregoing,
\nLicensee acknowledges that it will remain primarily liable and completely
\nobligated under all of the provisions of this Agreement in respect of the
\nproduction of Extension Products hereunder.<\/p>\n
6.12 Information About Third Party Manufacturers, Etc. In order to maintain
\nHilfiger’s high standard of quality control and to ensure that appropriate
\nmeasures are taken against counterfeiting, Licensee will provide notice to
\nHilfiger, on a quarterly basis, including all of the following information:<\/p>\n
a. the name and address of each Third Party Manufacturer,
\n Subcontractor and Supplier;<\/p>\n
b. the type of Licensed Products manufactured by such Third Party
\n Manufacturer and Subcontractor;<\/p>\n
c. quantity of Licensed Products to be manufactured by each such
\n entity;<\/p>\n
10<\/p>\n
d. the type of components provided by each Supplier; and<\/p>\n
e. any other relevant information regarding all such entities.<\/p>\n
6.13 Compliance with Applicable Laws – Generally. All Licensed Products
\nmanufactured and distributed by, or on behalf of, Licensee must be marked,
\nlabeled, packaged, advertised, and distributed in accordance with this
\nAgreement, in accordance with all applicable laws, rules and regulations in the
\nTerritory, and in such a manner as will not tend to mislead or deceive the
\npublic or damage the reputation of the Trademarks.<\/p>\n
6.14 Inspection of Facilities. Licensee will regularly, and not less than
\ntwo (2) times per year, inspect the facilities it utilizes and those facilities
\nutilized by Third Party Manufacturers, Subcontractors, and Suppliers for
\ncompliance with this provision and will take all action necessary to cure any
\ndeficiencies. Licensee further agrees that it will terminate any agreement with
\nany such third party found to be in default on three (3) separate inspections.
\nHilfiger and its duly authorized representatives will have the right, during
\nnormal business hours and upon reasonable notice, to inspect all facilities
\nutilized by Licensee, its Third Party Manufacturers, Subcontractors and
\nSuppliers in connection with the manufacture, storage or distribution of
\nExtension Products and Manufactured Products, and to examine: (a) Licensee’s
\nmanufacturing facilities, residential facilities (if any) and any manufacturing
\nand\/or residential facility operated by any of Licensee’s Third Party
\nManufacturers or Subcontractors; and (b) Licensee’s and any of Licensee’s Third
\nParty Manufacturers or Subcontractors books, records and documents necessary to
\nevidence such entities’ compliance with the Code and all applicable laws, rules
\nand regulations. For purposes of this Paragraph, all such books, records and
\ndocuments shall be maintained by Licensee in a secure and readily accessible
\nlocation for a period of three (3) years from their creation.<\/p>\n
6.15 Meetings. Hilfiger may from time to time, but no more than twice a
\nyear, hold a meeting of Hilfiger’s licensees\/distributors. Licensee agrees upon
\nreceipt of reasonable notice to attend any such meeting(s) at its own expense.<\/p>\n
ARTICLE 7. SALES AND MARKETING<\/p>\n
7.1 Best Efforts. Licensee will use its best efforts to exploit this
\nlicense throughout the Territory. Without limitation, Licensee will: (a) sell a
\nsufficiently representative quantity of all styles, fabrications and colors of
\nLicensed Products; (b) offer for sale Licensed Products so that they may be sold
\nto consumers on a timely basis; and (c) cooperate with Hilfiger’s merchandising,
\nsales and anti-counterfeiting programs. Licensee acknowledges that to preserve
\nthe goodwill associated with the Trademarks, Licensed Products should be sold at
\nprices and terms reflecting the prestigious nature of the Trademarks, and the
\nreputation of the Trademarks as appearing on goods of high quality and
\nreasonable price, it being understood, however, that Hilfiger is not empowered
\nand has no desire to fix or regulate the prices for which the Licensed Products
\nare to be sold, either at the<\/p>\n
11<\/p>\n
wholesale or retail level. Licensee shall at all times maintain a sales force
\nfor the sale of Licensed Products that will be sufficient to provide effective
\ndistribution of the Licensed Products throughout the entire Territory.<\/p>\n
7.2 INTENTIONALLY OMITTED<\/p>\n
7.3 Certification. Within sixty (60) days after the end of each Annual
\nPeriod, Licensee will present to Hilfiger a certification by an authorized
\nofficer of Licensee of the Net Sales and Retail Sales of Licensed Products
\nduring each Annual Period (the “Certification”). Such Certification shall be in
\nthe form annexed hereto as Exhibit L. Within one hundred twenty (120) days after
\nthe end of each Annual Period, Licensee will present to Hilfiger the
\nCertification further certified by Licensee’s external auditors. On or before
\nthe thirtieth (30\/th\/) day of each month, Licensee shall provide to Hilfiger
\nmonthly net shipment reports and retail selling reports for the prior month.<\/p>\n
7.4 Sales\/Marketing Plans. On each January 1, April 1, July 1 and October
\n1, Licensee will submit to Hilfiger, for Hilfiger’s approval, a schedule showing
\nin detail the projected sales marketing plans for the Licensed Products as
\nfollows:<\/p>\n
SUBMISSION DATE PERIOD TO BE COVERED
\n ————— ——————– <\/p>\n
January 1 April 1 – September 30
\n April 1 July 1 – December 31
\n July 1 October 1 – March 31
\n October 1 January 1 – June 30 <\/p>\n
7.5 Minimum Sales Levels. During each Annual Period, Licensee must achieve
\nall of the following Minimum Sales Levels:<\/p>\n
MINIMUM SALES LEVELS
\n ——————–<\/p>\n
——————————————————————
\n Annual Period Wholesale (Yen) Retail (Yen) Total (Yen)
\n ————- ————— ———— ———–
\n ——————————————————————
\n * * *
\n 1\/1\/01 – 12\/31\/01
\n ——————————————————————
\n * * *
\n 1\/1\/02 – 12\/31\/02
\n ——————————————————————
\n * * *
\n 1\/1\/03 – 12\/31\/03
\n ——————————————————————
\n 1\/1\/04 – 12\/31\/04 * * *
\n ——————————————————————
\n___________________________
\n\/*\/ This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
12<\/p>\n
——————————————————————
\n * * *
\n 1\/1\/05 – 12\/31\/05
\n —————————————————————— <\/p>\n
Each Total Minimum Sales Level for each Annual Period must be the greater of (a)
\nthe amounts set forth above for such Annual Period, and (b) * percent of the
\nactual Net Sales for the immediately preceding Annual Period. Each Wholesale and
\nRetail Minimum Sales Level for each Annual Period must be the greater of (a) the
\namounts set forth above for such Annual Period, and (b) * percent of the actual
\napplicable Net Sales for the immediately preceding Annual Period. In no event
\nmay the Minimum Sales Level for any Annual Period be less than the Minimum Sales
\nLevel for the immediately preceding Annual Period.<\/p>\n
For example, assuming that Wholesale Net Sales in the first Annual Period are
\nJPY*, Retail Net Sales in the first Annual Period JPY*, and Total Net sales are
\nJPY*, then for the second Annual Period the Minimum Sales Level would be JPY*
\n(JPY* x *% = JPY* which is greater than JPY*), the Wholesale Minimum Sales Level
\nwould remain at JPY* (JPY* x *% = JPY* which is less than the stated minimum)
\nand the Retail Minimum Sales Level would be JPY* (JPY* x *% = JPY* which is
\ngreater than JPY*).<\/p>\n
Licensee will not be in default of this Agreement the first * times in
\nany consecutive * Annual Periods that it fails to meet the total Wholesale
\nMinimum Sales Level, provided that Licensee pays the Guaranteed Minimum Royalty
\nfor such Annual Period. Similarly, Licensee will not be in default of this
\nAgreement the first * times in any consecutive * Annual Periods that it fails to
\nmeet the total Retail Minimum Sales Level, provided that Licensee pays the
\nGuaranteed Minimum Royalty for such Annual Period. As to either total Minimum
\nSales Level, a * failure shall, at Hilfiger’s option, be grounds for termination
\nof this Agreement as to Wholesale Sales or Retail Sales, whichever shall be
\napplicable.<\/p>\n
7.6 Certain Sales Excluded. Licensee may satisfy its obligation to reach
\nthe Minimum Sales Levels set forth with full price sales of Licensed Products in
\nthe Territory only. Licensee will not receive credit against Minimum Sales
\nLevels for (a) sales outside the Territory; (b) sales under Paragraphs 7.10; or
\n(c) sales of Seconds and Close-Outs anywhere.<\/p>\n
7.7 Approved Customers. Licensee may sell Licensed Products only to those
\nspecialty shops, department stores and retail outlets that carry high quality
\nand prestige merchandise and whose operations are consistent with Hilfiger’s
\nreputation and sales policies. Upon execution of this Agreement, and prior to
\nthe opening of each selling season (and whenever Licensee wishes to sell
\nLicensed Products to customers not previously approved by Hilfiger), Licensee
\nmust submit a list of its proposed customers for Hilfiger’s written approval.
\nHilfiger has the right to withdraw any such approval on written notice to
\nLicensee. After such notice, Licensee may not accept additional orders for
\nLicensed Products from such customer, but may fill any existing order.<\/p>\n
_________________________
\n\/*\/ This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
13<\/p>\n
7.8 Prohibited Sales. Except as expressly permitted by Hilfiger in
\nwriting, Licensee may not (a) market or promote or seek customers for Licensed
\nProducts outside of the Territory; (b) establish a branch, wholly owned
\nsubsidiary, distribution center or warehouse with inventories of Licensed
\nProducts outside the Territory; (c) sell or distribute any Licensed Products to
\nwholesalers, jobbers, diverters, catalog vendors or any other entity that does
\nnot operate retail stores exclusively; (d) sell or distribute any Licensed
\nProducts over the Internet or any other global or regional computer access
\nnetwork; (e) use Licensed Products as giveaways, prizes or premiums, except for
\npromotional programs which have received the prior written approval of Hilfiger;
\nor (f) sell Licensed Products to any third party or Affiliate of Licensee or any
\nof its directors, officers, employees or any person having an equity
\nparticipation in or any other affiliation to Licensee, without the prior written
\napproval of Hilfiger. Hilfiger may, at Licensee’s expense, purchase any Licensed
\nProducts found in the marketplace that Licensee has sold to unapproved
\ncustomers. Licensee shall include and shall enforce the following on all
\ninvoices to its customers:<\/p>\n
“Limitations on Sale by Buyer”.
\n —————————–<\/p>\n
Seller expressly reserves the right to limit the
\n amount of merchandise delivered to only such
\n quantities as are necessary to meet the reasonably
\n expected demand at buyer’s store locations.<\/p>\n
This Merchandise is sold to Buyer for resale to
\n the ultimate consumer only. Buyer shall be
\n expressly prohibited from selling the merchandise
\n purchased hereunder to a retailer or other dealer
\n in like merchandise, or to any party who Buyer
\n knows, or has reason to know, intends to resell
\n the merchandise.<\/p>\n
The merchandise purchased hereunder may not be
\n sold by Buyer from any store locations which
\n Seller has been advised Buyer do not qualify as an
\n acceptable location.<\/p>\n
7.9 Showrooms and In-Store Shops.<\/p>\n
a. Showroom. Licensee may display Licensed Products for sale only in
\n ——–
\na separate showroom, designed and displayed in accordance with Hilfiger’s
\nspecifications, apart from any showroom(s) in which Licensee or another business
\nmay sell goods other than Licensed Products. The style and manner in which
\nLicensed Products will be displayed in said showroom are subject to Hilfiger’s
\napproval. Hilfiger reserves the right to approve the location of Licensee’s
\nprimary showroom required above.<\/p>\n
b. Fixtures. Licensee will, at Hilfiger’s option, participate in any
\n ——–
\nin-store shop or main floor fixturing program with any of Licensee’s customers.
\nLicensee will fixture or cause to be<\/p>\n
14<\/p>\n
refixtured each in-store shop and area dedicated to the sale of Licensed
\nProducts within sixty (60) days after notice from Hilfiger or, without notice
\nfrom Hilfiger, no less often than every four (4) years during the Term. Hilfiger
\nand Licensee shall, each six months during the Term, consult in good faith
\nregarding standards and specifications for such fixturing, however, such
\nstandards and specifications ultimately shall be subject to Hilfiger’s approval;
\nand Licensee shall be responsible for causing all fixturing to be undertaken in
\na manner consistent with such plans and specifications, as modified from time to
\ntime, during each six month review. To the extent that the same is not paid for
\nby Licensee’s customers, Licensee shall pay for such fixturing. Licensee
\nacknowledges that Hilfiger has the right to disapprove of Licensee supplying
\nLicensed Products to customers who do not have fixtured or visually enhanced
\nshops or areas.<\/p>\n
7.10 Disposal of Seconds and Close-Outs.<\/p>\n
a. Seconds. Licensee may not sell any Licensed Products which are
\n ——-
\nSeconds without the express prior written consent of Hilfiger. All Seconds
\napproved for sale by Hilfiger must be clearly marked “Seconds” or “Irregular”.
\nThe percentage of Seconds that may be disposed of pursuant to this Paragraph may
\nnot, in any event, exceed * percent of the total Net Sales of Licensed
\nProducts distributed by Licensee in any Annual Period.<\/p>\n
b. Close-Outs. All Close-Outs shall be sold only with Hilfiger’s
\n ———-
\nprior written approval, which Hilfiger may withhold in its sole discretion,
\nthrough retail outlets and traditional and accepted dealers in such merchandise
\nand upon such terms and conditions as Licensee, in its reasonable discretion,
\ndetermines appropriate and shall not be sold to any person which Licensee knows,
\nor has reason to know, will export such Close-Outs from the Territory.<\/p>\n
c. Other Plans. Any plan of Licensee for the disposition of Seconds
\n ———–
\nor Close-Outs which varies from the foregoing requirements of Article 7 shall
\nrequire the prior written approval of Hilfiger.<\/p>\n
7.11 Purchase of Licensed Products<\/p>\n
a. Licensee hereby agrees that all Licensed Products shall be
\nexclusively purchased by Licensee or its designees approved by Hilfiger through
\nHilfiger or its designees, or any other sources approved by Hilfiger, and shall
\nbe purchased from no other source.<\/p>\n
b. Licensee, or its designees approved by Hilfiger, shall enter into
\nan exclusive buying <\/p>\n
________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
15<\/p>\n
office agreement with THEH and THUSA (in a standard form used by those
\nentities), for the purchases of Licensed Products which shall cover the entire
\nTerm of this Agreement.<\/p>\n
c. In connection with the purchase by Licensee or its designees
\napproved by Hilfiger of Manufactured Products from sources other than Hilfiger
\nor its designee, which shall in all events be sources approved by Hilfiger,
\nLicensee or its designee shall pay to Hilfiger a technical assistance fee in the
\namount equal to * percent of the invoice price (in U.S. Dollars) of all such
\nPurchased Products.<\/p>\n
ARTICLE 8. ADVERTISING<\/p>\n
8.1 Advertising and Advertising Plans. All advertising and promotion in
\nconnection with Licensed Products, including operative advertising whereby
\nLicensee provides their customers with a contribution be it in the form of
\nactual monetary contribution, credit or otherwise, shall be placed with an
\nagency approved by Hilfiger. Licensee will pay all advertising invoices directly
\nas they become due. Licensee agrees to use its best efforts to advertise and
\npromote the Licensed Products during each Annual Period in order to make and
\nkeep the Trademark a well known name within the Territory and to maintain the
\nhigh standards of the Trademark. On each September 1 during the Term, Licensee
\nwill submit to Hilfiger, for Hilfiger’s approval, a schedule showing in detail,
\nthe projected advertising plan for the following Annual Period. Such plan should
\ninclude the name and placement of the advertisements.<\/p>\n
8.2 Advertising Expenditure. Licensee agrees that, during each Annual
\nPeriod, it shall spend at least the total amounts set forth below for direct
\nmedia advertising of the Licensed Products, including model usage fees, but not
\nincluding any cooperative advertising, trade shows, sampling, or any other
\npromotional or sales material normally produced for the sale of the Licensed
\nProducts (the “Total Advertising Expenditure”). If in any Annual Period the
\nTotal Advertising Expenditure has not been made, then Licensee shall spend such
\namount for advertising within the first ninety (90) days of the subsequent
\nAnnual Period. If the Total Advertising Expenditure has not been expended by the
\nend of said ninety (90) day period, then, unless Hilfiger shall agree in writing
\notherwise, the amount which should have been expended and which was not expended
\nshall be paid over to Hilfiger to be used by Hilfiger for advertising the
\nTrademark provided, however, that if Total Advertising Expenditure has not been
\nmade prior to the termination of this Agreement, the unexpended Total
\nAdvertising Expenditure shall, within twenty(20) days, be paid over to Hilfiger
\nabsolutely. Proof of expenditure shall be submitted each quarter using the
\nAdvertising Expenditure <\/p>\n
___________________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
16<\/p>\n
form (Exhibit M).<\/p>\n
Annual Period Advertising Expenditures (Yen)
\n ————- ——————————
\n——————————————————————————-
\n Wholesale Retail Total
\n——————————————————————————-
\n * * *
\nFirst 1\/1\/01 – 12\/31\/01
\n——————————————————————————-
\n * * *
\nSecond 1\/1\/02 – 12\/31\/02
\n——————————————————————————-
\n * * *
\nThird 1\/1\/03 – 12\/31\/03
\n——————————————————————————-
\n * * *
\nFourth 1\/1\/04 – 12\/31\/04
\n——————————————————————————-
\n * * *
\nFifth 1\/1\/05 – 12\/31\/05
\n——————————————————————————- <\/p>\n
In no event shall the Total Advertising Expenditures for any Annual Period be
\nless than * percent of the Wholesale and Retail Minimum Sales Levels for such
\nAnnual Period as the same may be adjusted pursuant to Paragraph 7.5 above.<\/p>\n
_____________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
17<\/p>\n
8.3 Approval of Packaging, Labeling and Advertising. No packaging,
\nlabeling or advertising, including cooperative advertising may be used without
\nthe prior written approval of Hilfiger. Before publication of any advertisement
\nor promotion, Licensee shall submit every element of the advertisement or
\npromotion, including the design, placement and medium, to Hilfiger for approval
\nusing an “Advertising Approval Form” (Exhibit N). Any approval granted hereunder
\nshall be limited to use during the Seasonal Collection of the Licensed Products
\nto which such advertising relates and shall be further limited to use (e.g.
\ntelevision or print) for which approval by Hilfiger was granted. Samples of
\ninitial packaging, labeling and advertising, and samples of any revisions,
\nchanges, modifications or substitutions thereof, shall be submitted to Hilfiger
\nsufficiently far in advance to permit Licensee time to make such changes as
\nHilfiger shall deem necessary. Licensee acknowledges the importance of global
\nconsistency in advertising using the Trademarks. Therefore, Hilfiger shall have
\nthe right to require Licensee to: (a) use images in Licensee’s advertisements
\nwhich have been used in other parts of the world; and (b) pay for or reimburse
\nHilfiger, its Affiliates, or any third party for the model usage fees required
\nto be paid in connection with such images. Hilfiger may not require Licensee to
\npay model usage in either the first or second Annual Periods in excess of $*
\nor model usage fees in any of the third, fourth or fifth Annual Periods in
\nexcess of $*. Additionally, under no circumstances will Licensee be permitted to
\nadvertise Licensed Products over any medium not previously approved by Hilfiger
\nin writing. To such end, unless otherwise approved in writing by Hilfiger, the
\nInternet or any other global or regional computer access network is deemed an
\nunapproved medium for advertising. All requests for the approval of packaging,
\nlabeling or advertising pursuant to this Paragraph 8.3 shall be accompanied by
\nat least two (2) samples of the object for which approval is sought. Licensee
\nshall use its best efforts to ensure that all advertising and promotional plans
\nused by Licensee in connection with the Trademark, in any form and in any
\nmedium, shall be consistent with the prestige of the Trademark and the quality
\nof the Licensed Products. All packaging, labeling and advertising of Licensed
\nProducts shall use the Trademark, but no other trademark or trade name shall be
\nused except as may be required by applicable law or permitted to Hilfiger.
\nLicensee shall not be permitted to use its name on the Licensed Products,
\npackaging and other materials displaying the Trademark other than as
\nspecifically approved by Hilfiger. Any advertising materials provided by
\nHilfiger to Licensee shall be so provided at Licensee’s cost and the price
\ntherefor shall be Hilfiger’s cost of producing of providing the same.<\/p>\n
8.4 Use of Trademark on Invoices, etc. The use of the Trademark by
\nLicensee on invoices, order forms, stationery and related matter and in
\nadvertising in telephone or other directory listings is permitted only upon
\nHilfiger’s prior written approval of the format in which the Trademark is to be
\nso used, the juxtaposition of the Trademark with other words and phrases, and
\nthe content of the copy prior to the initial such use of the Trademark and prior
\nto any material change therein; provided, however, that each such use of the
\nTrademark is only in conjunction with the manufacture, sale, distribution or
\nadvertisement of Licensed Products pursuant to this Agreement.<\/p>\n
_________________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
18<\/p>\n
8.5 Launch. In addition to the advertising requirements set forth above,
\nLicensee will host a launch event and distribute a gift package to the fashion
\nand financial press and to major retail accounts during the initial selling
\nseason for the first Seasonal Collection to be sold under this Agreement. Such
\nevent shall be comparable to similar launch events hosted by Hilfiger’s other
\nlicensees of the Trademarks and shall reasonably reflect the prestige of the
\nTrademarks and the relative significance of Licensed Products to Hilfiger.<\/p>\n
8.6 Trade Shows. Licensees may not participate in trade shows without the
\nprior written consent of Hilfiger. To the extent that Hilfiger does consent to
\nsuch participation, the booth or showroom must be approved by Hilfiger in each
\ninstance.<\/p>\n
8.7 Public Announcements. Licensee’s press releases and other public
\nannouncements related to Licensee’s operations hereunder, are subject to
\napproval by Hilfiger.<\/p>\n
ARTICLE 9. ROYALTIES AND RELATED FEES<\/p>\n
9.1 Guaranteed Minimum Royalty. Licensee shall, during each Annual Period
\nor portion thereof (calculated on a pro rata basis), pay to Hilfiger the Total
\nGuaranteed Minimum Royalties listed below. Total Guaranteed Minimum Royalties
\nwill be payable in quarterly installments in advance on the first day of each
\nquarter during each year during the Term.<\/p>\n
Annual Period Guaranteed Minimum Royalty (Yen)
\n ————- ——————————–<\/p>\n
——————————————————————————
\n Wholesale Retail Total
\n——————————————————————————
\n * * *
\nFirst 1\/1\/01 – 12\/31\/01
\n——————————————————————————
\n * * *
\nSecond 1\/1\/02 – 12\/31\/02
\n——————————————————————————
\n * * *
\nThird 1\/1\/03 – 12\/31\/03
\n——————————————————————————
\n * * *
\nFourth 1\/1\/04 – 12\/31\/04
\n——————————————————————————
\n * * *
\nFifth 1\/1\/05 – 12\/31\/05
\n——————————————————————————<\/p>\n
In the event that during any Annual Period, the actual payments under Paragraph
\n9.2 below exceed the entire Total Guaranteed Minimum Royalty with respect to
\nthat Annual Period, no further Total Guaranteed Minimum Royalty payments need be
\nmade for such Annual Period.<\/p>\n
_______________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
19<\/p>\n
In no event shall the Wholesale Guaranteed Minimum Royalty for any Annual Period
\nbe less than * percent of the Wholesale Minimum Sales Level for such Annual
\nPeriod as the same may be adjusted pursuant to Paragraph 7.5 above. Similarly,
\nin no event shall the Retail Guaranteed Minimum Royalty for any Annual Period be
\nless than * percent of the Retail Minimum Sales Level for such Annual Period as
\nthe same may be adjusted pursuant to Paragraph 7.5 above.<\/p>\n
9.2 Percentage Royalty. Except as specifically exempted, all Licensed
\nProducts sold by Licensee, or Affiliates of Licensee or subsidiaries, require
\nthe payment of the Percentage Royalty. Percentage Royalties shall be payable in
\nquarterly installments on January 30, April 30, July 30 and October 30 for the
\nimmediately preceding quarter in which the Licensed products are sold, less
\nGuaranteed Minimum Royalty payments for such period, and each payment must be
\nsubmitted with the royalty statement described below. All royalties shall accrue
\nupon the sale of Licensed Products, regardless of the time of collection by
\nLicensee. For purposes of this paragraph, a Licensed Product shall be considered
\n“sold” upon the date of billing, invoicing, shipping, or payment, whichever
\noccurs first.<\/p>\n
9.3 Royalty Statements. Licensee will submit to Hilfiger complete and
\naccurate royalty statements in the form attached hereto as Exhibit K, signed by
\nan authorized officer of Licensee and certified by him\/her as accurate
\nindicating all of the following information by month: (a) the total invoice
\nprice of all Licensed Products sold during the period covered by such Percentage
\nRoyalty payment; (b) the amount of discounts and credits from Gross Sales that
\nmay be deducted therefrom, during said period; and (c) computation of the amount
\nof Percentage Royalty for said period. Licensee will identify separately all
\nsales to Affiliates of Licensee. At least once annually, or more often at
\nHilfiger’s request, Licensee will also submit to Hilfiger a certification from
\nits external auditors that the statements are in accordance with the
\nrequirements of this Paragraph 9.3. Receipt or acceptance by Hilfiger of any
\nstatement furnished, or of any sums paid by Licensee, will not preclude Hilfiger
\nfrom questioning their correctness at any time. On the other hand, reports
\nsubmitted by Licensee will be binding and conclusive on Licensee in the event of
\nany termination based on a breach by Licensee arising out of any payment or
\nreport. Licensee will list Net Sales made in Yen.<\/p>\n
9.4 Merchandise Coordinator Program. Licensee shall establish and maintain
\na Merchandise Coordinator Program modeled after, and to the level of, the
\nprogram that operates in the United States under the Tommy Hilfiger U.S.A., Inc.
\ncorporate structure. The manager of Licensee’s program shall comply with
\nHilfiger’s direction from time to time as to the operation of the program,
\nincluding, but not limited to, employing sufficient coordinators to adequately
\nmaintain and provide <\/p>\n
__________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
20<\/p>\n
training for the individual free-standing stores and department store customers.
\nAt no time during the Term may Licensee employ less than three (3) merchandise
\ncoordinators.<\/p>\n
9.5 No Set-Off. The obligation of Licensee to pay royalties hereunder is
\nabsolute notwithstanding any claim that Licensee may assert against Hilfiger.
\nLicensee will not have the right to set-off, compensate or make any deduction
\nfrom such royalty payments for any reason whatsoever.<\/p>\n
ARTICLE 10. MANNER OF PAYMENT, INTEREST, BOOKS
\n AND RECORDS, INSPECTION<\/p>\n
10.1 Manner of Payment. All royalty payments required by Licensee hereunder
\nwill be made to Hilfiger in Delaware in Yen. It is understood that Licensee
\nshall be responsible for any US Dollar loss to Hilfiger arising from changes in
\nthe Exchange Rate of (Yen to US Dollar) exchange between the due date and actual
\nreceipt date of any payments made under this Agreement.<\/p>\n
10.2 Interest on Late Payments. In addition to any other remedy available
\nto Hilfiger, if any payment due under this Agreement is delayed for any reason,
\ninterest will accrue and be payable, to the extent legally enforceable, on such
\nunpaid principal amounts from and after the date on which the same became due,
\nat a per annum rate equal to the lesser of (i) * points above the prime rate
\nof interest in effect on the due date of the late payment as quoted by Chase
\nManhattan Bank in New York, New York, U.S.A. and (ii) the highest rate permitted
\nby law in New York.<\/p>\n
10.3 Taxes. Licensee will bear all taxes, duties and other governmental
\ncharges in the Territory relating to or arising under this Agreement, including
\nwithout limitation, any state or federal income taxes (except withholding taxes
\non royalties), any stamp or documentary taxes or duties, turnover, sales or use
\ntaxes, value added taxes, excise taxes, customs or exchange control duties and
\nany other charges relating to or on any royalty payable by licensee to Hilfiger.
\nLicensee will obtain, at its own cost and expense, all licenses, reserve bank,
\ncommercial bank or other bank approvals, and any other documentation necessary
\nfor the importation of materials and the transmission of royalties and all other
\npayments relevant to Licensee’s performance under this Agreement. If any tax or
\nwithholding is imposed on royalties, Licensee shall obtain certified proof of
\nthe tax payment or withholding and immediately transmit it to Hilfiger.<\/p>\n
10.4 Books and Records. Licensee will, at its sole cost and expense,
\nmaintain complete and accurate books and records (specifically including,
\nwithout limitation, the originals or copies of<\/p>\n
_______________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
21<\/p>\n
documents supporting entries in the books of account) covering all transactions
\narising out of or relating to this Agreement. Hilfiger will have the right,
\nduring normal business hours, for the duration of this Agreement and for seven
\n(7) years thereafter, to examine and copy said books and records and all other
\ndocuments and materials in the possession of and under the control of Licensee
\nwith respect to the subject matter and terms of this Agreement, including
\nLicensee’s internal control report. The exercise by Hilfiger of any right to
\naudit at any time or times or the acceptance by Hilfiger of any statement or
\npayment shall be without prejudice to any of Hilfiger’s rights or remedies and
\nshall not bar Hilfiger from thereafter disputing the accuracy of any payment or
\nstatement and Licensee will remain fully liable for any balance due under this
\nAgreement. Licensee will assign style numbers to Licensed Products that are
\nunique from numbers for any products other than the Licensed Products that
\nLicensee may manufacture and\/or sell. The style number assigned to each Licensed
\nProduct shall be identical to the style number utilized to identify that
\nLicensed Product in all Licensee’s books and records. All documents evidencing
\nthe sale of Licensed Products shall state the style and number of each of such
\nproducts. Licensee may not use terms such as “assorted” or “irregular”
\nwithout a style specification. All sales of the Licensed Products will be made
\non sequentially numbered invoices that (a) contain sales only of the Licensed
\nProducts, (b) contain a statement that the invoice shall be paid only to an
\naccount owned by Licensee or its assignee, and (c) are recorded in a separate
\nledger account.<\/p>\n
10.5 Underpayments. If, upon any examination of Licensee’s books and
\nrecords, Hilfiger discovers any royalty underpayment by Licensee, Licensee will
\nmake all payments required to be made to correct and eliminate such underpayment
\nwithin ten (10) days after Hilfiger’s demand. In addition, if said examination
\nreveals a royalty underpayment of * percent or more, for any royalty period,
\nLicensee will reimburse Hilfiger the cost of said examination within ten (10)
\ndays after Hilfiger’s demand.<\/p>\n
10.6 Financial Statements. Licensee will provide to Hilfiger a certified,
\naudited financial statement within one hundred twenty (120) days after the end
\nof each fiscal year of Licensee, prepared by a chartered accountant having no
\ninterest in Licensee’s business and approved by Hilfiger. Licensee will also
\nprovide to Hilfiger quarterly officer’s certificates within thirty (30) days
\nafter the end of each quarter.<\/p>\n
__________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
22<\/p>\n
ARTICLE 11. REPRESENTATIONS AND WARRANTIES<\/p>\n
11.1 Representations and Warranties of Licensee. Licensee hereby
\nrepresents, warrants and covenants that:<\/p>\n
a. it has the full right, power and authority to enter into this
\nAgreement, and to perform all of its obligations hereunder;<\/p>\n
b. it is financially capable of undertaking the business operations
\nwhich it conducts and of performing its obligations hereunder;<\/p>\n
c. it is a corporation duly organized, validly existing and in good
\nstanding under the laws of the jurisdiction of its incorporation;<\/p>\n
d. all necessary corporate acts have been effected by it to render
\nthis Agreement valid and binding upon it; and<\/p>\n
e. in its negotiations relative to this Agreement, it has not
\nutilized the services of any finder, broker or agent, and it owes no commission
\nor fees to any such person in relation hereto. Licensee agrees to indemnify
\nHilfiger against, and hold it harmless from, any and all liabilities (including,
\nwithout limitation, reasonable legal fees) to any person, firm or corporation
\nclaiming commissions or fees in connection with this Agreement or the
\ntransactions contemplated hereby as a result of an agreement with or services
\nrendered to Licensee.<\/p>\n
ARTICLE 12. CONFIDENTIALITY AND HIRING OF EMPLOYEES<\/p>\n
12.1 Confidentiality. Any and all information of any kind in any form
\nacquired, devised or developed from Hilfiger, Hilfiger’s files or Hilfiger’s
\npersonnel, including but not limited to this Agreement, prints, designs, ideas,
\nsketches and other materials or Trade Secrets, shall be deemed Confidential
\nInformation and shall be maintained by Licensee, Affiliates of Licensee,
\nemployees, attorneys, accountants and bankers, in strict confidentiality.
\nLicensee agrees not to disclose, in whole or in part, any Confidential
\nInformation to any third party, except upon consent of Hilfiger or pursuant to,
\nor as may be required by law, or in connection with regulatory or administrative
\nproceedings and only then with reasonable advance notice of such disclosure to
\nthe other, and provided (a) that each such person shall agree to be bound by the
\nterms of this Agreement; (b) that Confidential Information shall be used by
\nLicensee, and such persons solely as provided hereunder; and that Confidential
\nInformation shall be revealed only to those officers, directors and employees of
\nLicensee, respectively, on a need to know basis. Licensee shall take all
\nreasonable precautions to protect the secrecy of the materials, samples, and
\ndesigns described in this article prior to their commercial distribution or the
\nshowing of samples for sale, and shall not sell any merchandise employing or
\nadapted from any of said designs except under the Trademarks. Hilfiger shall
\ntake all reasonable precautions to protect the secrecy of the original designs
\ncreated by Licensee for<\/p>\n
23<\/p>\n
Licensed Products prior to their advertisement, commercial distribution or the
\nshowing of samples for sale. Neither Hilfiger nor Licensee may, at any time
\nduring the term of this Agreement, disclose or use for any purpose, other than
\nas contemplated by this Agreement, any revealed or otherwise acquired
\nconfidential information and data relating to the business of the other.<\/p>\n
12.2 Hiring of Hilfigers Employees. During the Term and for a period of two
\n(2) years thereafter, Licensee will not directly or indirectly employ on a full
\nor part-time basis any employee of Hilfiger or its affiliates.<\/p>\n
ARTICLE 13. TRADEMARKS AND COPYRIGHTS<\/p>\n
13.1 Rights to the Trademark. Licensee acknowledges the great value of the
\ngoodwill associated with the Trademarks, and acknowledges that the Trademarks
\nand all the rights therein, and goodwill attached thereto, belong exclusively to
\nHilfiger. Licensee will not, during the Term or thereafter: (a) do, or otherwise
\nsuffer to be done, any act or thing that might, in any way, adversely affect the
\nrights of Hilfiger in and to the Trademarks or that, directly or indirectly, may
\nreduce the value of the Trademarks or detract from their reputation; (b)
\nprosecute an application to register the Trademarks; (c) attack Hilfiger’s title
\nor right in and to the Trademarks; (d) attack the validity of this license or
\nthe Trademarks; or (e) contest the fact that Licensee’s rights under this
\nAgreement (i) are solely those of a manufacturer and distributor, and (ii)
\nsubject to the provisions of Articles 14 and 15 hereof, cease upon expiration or
\ntermination of this Agreement. The provisions of this Paragraph 13.1 will
\nsurvive the expiration and termination of this Agreement.<\/p>\n
13.2 Protecting the Trademarks. Licensee will cooperate fully and in good
\nfaith with Hilfiger for the purpose of securing, preserving and protecting
\nHilfiger’s rights in and to the Trademarks. At the request of Hilfiger, Licensee
\nwill execute and deliver to Hilfiger any and all documents and do all other acts
\nand things that Hilfiger deems necessary or appropriate to make fully effective
\nor to implement the provisions of this Agreement relating to the ownership, use
\nor registration of the Trademarks.<\/p>\n
13.3 Compliance with Notice and Other Requirements. Licensee will use the
\nTrademark strictly in compliance with all applicable legal requirements.
\nWhenever the Trademarks are used on any item of packaging or labeling or in any
\nadvertisement, they must be followed, in the case of a registered trademark by
\nthe registration symbol, i.e.,(R) and in the case of all other trademarks by the
\nsymbol (TM), or other appropriate symbols of similar import acceptable to
\nHilfiger or required by applicable law. Upon expiration or termination of this
\nAgreement for any reason whatsoever, Licensee will execute and deliver to
\nHilfiger any and all documents required by Hilfiger for terminating any and all
\nregistered user agreements and other documents regarding Licensee’s use of the
\nTrademarks.<\/p>\n
13.4 Ownership of Copyrights. Any copyrights created by or for Licensee in
\nany sketch, design, print, package, label, tag or the like, designed and
\napproved for use in connection with<\/p>\n
24<\/p>\n
Licensed Products, are hereby assigned by Licensee to Hilfiger. Licensee will
\nnot, at any time, do, or otherwise suffer to be done, any act or thing that may
\nadversely affect any rights of Hilfiger in such copyrights and will, at
\nHilfiger’s request, do all things reasonably required by Hilfiger to preserve
\nand protect said rights, including the placement of appropriate notices of
\ncopyright ownership.<\/p>\n
13.5 Infringement. Licensee must promptly notify Hilfiger of any
\ninfringement or other misuse of the Trademarks or the use by any person of any
\ntrademarks or trade names confusingly similar to the Trademarks that comes to
\nits attention. Hilfiger will take such action as it deems advisable, and
\nLicensee will assist in such action, as Hilfiger may reasonably request, at
\nHilfiger’s expense. In no event, however, will Hilfiger be required to take any
\naction if it deems it inadvisable to do so, and Licensee will have no right to
\ntake any action without the prior written consent of Hilfiger. However, in the
\nevent of any infringement or other misuse of the Trademarks on items identical
\nor similar to Licensed Products, Hilfiger will take the measures it deems
\nappropriate to protect the Trademarks, and Licensee, at Hilfiger’s request, will
\npay the costs in excess of * Yen incurred therefor in any Annual Period,
\nincluding judicial expenses and legal fees.<\/p>\n
13.6 Counterfeit Protection. Licensee will cooperate with Hilfiger in all
\nefforts to prevent counterfeiting. All Licensed Products shall bear and use any
\ncounterfeit preventive system, devices or labels designated by Hilfiger. At its
\noption, Hilfiger may supply the system, devices or labels (provided that they
\nare supplied on a timely basis), that Licensee must use. Licensee will pay all
\nreasonable costs for such system, devices or labels, in advance.<\/p>\n
13.7 Use of Other Trademarks. During the Term, neither Licensee, nor any
\npersons and business entities which are now and hereafter controlled and managed
\ndirectly or indirectly by Licensee, or company in which Licensee is a partner,
\nmay act as a licensee or distributor in the Territory of any products within the
\ndefinition of Licensed Products, under any name which is currently, or in the
\nfuture becomes, directly competitive with Hilfiger, unless expressly consented
\nto by Hilfiger. By way of illustration, attached hereto as Exhibit J is a non-
\nexhaustive list of names that Hilfiger considers to be directly competitive with
\nHilfiger. If such consent is given, unless prohibited by other agreements,
\nLicensee will provide Hilfiger with samples of any such competitive products it
\nmanufactures and distributes that do not bear the Trademarks. (Licensee may act
\nas a manufacturer only of such products, provided that Licensee is not the
\nlicensee or distributor thereof.) In all cases, the design and style of any such
\nproducts or any of Licensee’s private label products, must be clearly
\ndistinguished from Licensed Products. A breach of this clause will constitute a
\nviolation of Licensee’s obligation to use its best efforts to exploit this
\nlicense. Licensee must maintain the design, merchandising, packaging, sales and
\ndisplay of all of Licensee’s other products separate and distinct from Licensed
\nProducts.<\/p>\n
__________________
\n* This information, which has been filed separately with the Securities and
\nExchange Commission, has been omitted and is the subject of a request made to
\nthe Commission for confidential treatment.<\/p>\n
25<\/p>\n
13.8 Use of Trademarks on Invoices, etc. Licensee must submit to Hilfiger
\nfor prior approval, the proposed use of the Trademarks on invoices, business
\ncards, order forms, stationery and related materials and in advertising in
\ntelephone and other directory listings.<\/p>\n
13.9 Monitoring. Licensee will actively monitor use of the Trademarks by
\nthird parties, including by its customers, and will use its best efforts to see
\nthat such use does not impair the image or reputation of the Trademarks;
\nprovided, however, that Licensee will have no obligation to place any unlawful
\nrestrictions on third parties.<\/p>\n
ARTICLE 14. INSOLVENCY<\/p>\n
14.1 Effect of Proceeding in Bankruptcy, etc. If either party institutes
\nfor its protection or is made a defendant in any proceeding under bankruptcy,
\ninsolvency, reorganization or receivership law, or if either party is placed in
\nreceivership or makes an assignment for benefit of creditors or is unable to
\nmeet its debts in the regular course of business, the other party may elect to
\nterminate this Agreement immediately by written notice to the other party
\nwithout prejudice to any right or remedy the terminating party may have,
\nincluding, but not limited to, damages for breach.<\/p>\n
14.2 Rights Personal. The license and rights granted hereunder are personal
\nto Licensee. No assignee for the benefit of creditors, receiver, trustee in
\nbankruptcy, sheriff or any other officer or court charged with taking over
\ncustody of Licensee’s assets or business, shall have any right to continue
\nperformance of this Agreement or to exploit or in any way use the Trademarks if
\nthis Agreement is terminated pursuant to Paragraphs 14.1 and 14.2, except as may
\nbe required by law.<\/p>\n
14.3 Trustee in Bankruptcy. Notwithstanding the provisions of Paragraph
\n14.2 above, in the event that, pursuant to applicable bankruptcy law (the
\n“Code”), a trustee in bankruptcy, receiver or other comparable person, of
\nLicensee, or Licensee, as debtor, is permitted to assume this Agreement and does
\nso and, thereafter, desires to assign this Agreement to a third party, which
\nassignment satisfies the requirements of the Code, the trustee or Licensee, as
\nthe case may be, must notify Hilfiger. Said notice shall set forth the name and
\naddress of the proposed assignee, the proposed consideration for the assignment
\nand all other relevant details thereof. The giving of such notice will be deemed
\nto constitute an offer to Hilfiger to have this license assigned to it or its
\ndesignee for such consideration, or its equivalent in money, and upon such terms
\nas are specified in the notice. Hilfiger may accept the aforesaid offer only by
\nwritten notice given to the trustee or Licensee, as the case may be, within
\nfifteen (15) days after Hilfiger’s receipt of the notice to such party. If
\nHilfiger fails to deliver such notice within the said fifteen (15) days, such
\nparty may complete the assignment referred to in its notice, but only if such
\nassignment is to the entity named in said notice and for the consideration and
\nupon the terms specified therein. Nothing contained herein will be deemed to
\npreclude or impair any rights that Hilfiger may have as a creditor in any
\nbankruptcy proceeding.<\/p>\n
ARTICLE 15. EXPIRATION AND TERMINATION<\/p>\n
26<\/p>\n
15.1 Other Rights Unaffected. Expiration or termination of this Agreement
\nwill not affect any obligation of Licensee to make payments to Hilfiger
\nhereunder accruing prior to such expiration or termination or in respect to an
\nantecedent breach of this Agreement, and will not prejudice any other right of
\nHilfiger hereunder including, without limitation damages for breach, and
\nLicensee agrees to reimburse Hilfiger for any costs and expenses (including
\nattorneys’ fees) incurred by Hilfiger in enforcing its rights hereunder. Except
\nas required by law, no assignee for the benefit of creditors, receiver,
\nliquidator, sequestrator, trustee in bankruptcy, sheriff or any other officer of
\nthe court or official charged with taking over custody of Licensee’s assets
\nshall have the right to continue the performance of this Agreement.<\/p>\n
15.2 Termination Without Right to Cure. Hilfiger will have the right to
\nimmediately terminate this Agreement by giving Licensee a notice of termination,
\nwithout giving Licensee any right to cure, if Licensee:<\/p>\n
a. makes an unauthorized disclosure of confidential information,
\nTrade Secrets, or materials given or loaned to Licensee by Hilfiger;<\/p>\n
b. institutes proceedings seeking relief under a bankruptcy act or
\nany similar law, or otherwise violates the provisions of Paragraph 14.1 thereof;<\/p>\n
c. transfers or agrees to transfer substantially all of its
\nproperty, its shares of stock or, this Agreement in violation of Paragraphs 21.5
\nor 21.6 hereof;<\/p>\n
d. exhibits, displays, or distributes unapproved products;<\/p>\n
e. without the prior written consent of Hilfiger, uses the
\nTrademarks in an unauthorized or improper manner;<\/p>\n
f. uses the Trademarks in connection with another trademark or name;<\/p>\n
g. intentionally misrepresents any financial data regarding its
\nbusiness under this license; or<\/p>\n
h. places, or participates in, any unapproved or prohibited
\nadvertising.<\/p>\n
15.3 Termination with Right to Cure. If Licensee breaches any of its other
\nobligations under this Agreement, Hilfiger will have the right to terminate this
\nAgreement by giving Licensee a notice of intention to terminate to Licensee.
\nTermination will become effective automatically and without further notice
\nunless Licensee completely cures the breach within fifteen (15) days after the
\ngiving of such notice. Termination based upon Licensee’s failure to comply with
\nthe Minimum Sales Levels will become effective thirty (30) days after the giving
\nof the notice. If the notice relates to<\/p>\n
27<\/p>\n
royalties or to product quality, pending cure, Licensee may ship no Licensed
\nProducts; if Licensee does ship, it will automatically forfeit its right to cure
\nand the license shall terminate immediately. To fully cure its breach, Licensee
\nmust also reimburse Hilfiger for its attorneys’ fees incurred in investigating
\nand analyzing the breach and issuing the notice of breach and for any other
\ncommunication in connection therewith. Upon the giving of a notice of intention
\nto terminate for the second time, for any reason, Licensee will no longer have
\nthe right to cure any violation, and termination will be effective upon the
\ngiving of a notice of termination.<\/p>\n
15.4 Effect of Expiration or Termination. Upon expiration or termination of
\nthis Agreement for any reason whatsoever:<\/p>\n
a. Reversion of Rights. All of the rights of Licensee under this
\n ——————-
\nAgreement will terminate and immediately revert to Hilfiger. Licensee, except as
\nspecified below, will immediately discontinue use of the Trademarks, whether in
\nconnection with the sale, advertisement or manufacture of Licensed Products or
\notherwise, and will not resume the use thereof or adopt any colorable imitation
\nof the Trademarks or any of their components or designs incorporated therein or
\nmaterial parts thereof.<\/p>\n
b. Royalties. All royalties on sales theretofore made will become
\n ———
\nimmediately due and payable.<\/p>\n
c. Return of Labels and Other Materials. At Hilfiger’s option,
\n ————————————
\nLicensee will (i) promptly destroy, or (ii) convey to Hilfiger (at a price equal
\nto Licensee’s book value thereof) and free of all liens and encumbrances, all
\nplates, engravings, silkscreens, computer tapes, molds, stitching patterns or
\nthe like used to make or reproduce the Trademarks in Licensee’s possession or
\ncontrol, and all items affixed with likenesses or reproductions of the
\nTrademarks in Licensee’s possession or control whether Labels, bags, boxes, tags
\nor otherwise. Licensee will deliver to Hilfiger, free of charge, all sketches,
\ndesigns and the like in its possession or control. Hilfiger will have the
\noption, exercisable upon notice to Licensee within thirty (30) days after
\ntermination, to negotiate the purchase of the Labels that were not supplied by
\nHilfiger. If such negotiations do not result in the purchase of those Labels,
\nLicensee will destroy those Labels under the supervision of Hilfiger, and
\nLicensee will deliver to Hilfiger a certificate of destruction signed by an
\nauthorized officer of Licensee.<\/p>\n
d. Pending Orders. Except as otherwise provided below, Licensee will
\n ————–
\nbe entitled for a period of one hundred eighty (180) days after expiration or
\ntermination of this Agreement, to consummate all sales of Licensed Products that
\nwere firm upon the delivery of the Inventory Schedule specified in Paragraph
\n15.4(e) below.<\/p>\n
e. Inventory\/Right to Purchase. Licensee shall immediately deliver
\n —————————
\nto Hilfiger an Inventory Schedule. The Inventory schedule will be prepared as of
\nthe close of business on the date<\/p>\n
28<\/p>\n
of such termination and will reflect the direct cost of each Licensed Product
\n(actual manufacturing cost, not including overhead or any general or
\nadministrative expenses). Hilfiger will have the right to conduct a physical
\ninventory of Licensed Products in Licensee’s possession or control. Hilfiger
\nwill have the option, exercisable by notice to Licensee, within thirty (30) days
\nafter its receipt of the complete Inventory Schedule, to purchase any or all of
\nthe Inventory for an amount equal to Licensee’s cost. In the event Hilfiger
\nsends such notice, Hilfiger may collect the Inventory it elects to purchase
\nwithin ninety (90) days after Hilfiger’s notice.<\/p>\n
f. Inventory\/Right to Sell Off. Except as otherwise provided below,
\n —————————
\nif Hilfiger does not elect to purchase the Inventory, Licensee may sell off
\nLicensed Products up to a period of one hundred eighty (180) days after the date
\nof expiration or termination.<\/p>\n
g. Non-Conforming Products. Under no circumstances will Licensee be
\n ———————–
\npermitted to (i) sell Licensed Products that have not been approved in
\naccordance with Paragraph 6.3 above or are in any non-conforming as to style or
\nquality; or (ii) advertise or promote the Trademarks during the sell-off period
\nwithout Hilfiger’s prior approval. The sell off of Licensed Products will be
\nsubject to all of Licensee’s obligations hereunder, including, but not limited
\nto, royalty payment obligations.<\/p>\n
h. Remaining Products. At the end of such one hundred eighty (180)
\n ——————
\nday period, any Licensed Products remaining in Licensee’s possession will, at
\nthe request of and under the supervision of Hilfiger, be destroyed.<\/p>\n
i. Licensee shall discontinue the use of any decor, interior or
\nexterior decoration, signs, displays, furniture, fixtures, advertising and\/or
\npromotional material, and the like, that are unique or distinctive to Stores,
\nand either destroy the same or turn over same to Hilfiger or its designee at a
\ncost mutually agreed upon.<\/p>\n
j. Licensee shall return to Hilfiger any materials obtained by
\nLicensee, from or through Hilfiger, including, but not limited to, all
\nProprietary Materials and all promotional and point-of-sale materials without
\ncompensation.<\/p>\n
k. Licensee shall execute and deliver to Hilfiger any and all
\ndocuments required by Licensor terminating any and all trademark registrations,
\nRegistered User agreements and other documents regarding this Trademark.<\/p>\n
l. Licensee shall cease and desist from using any business name or
\nsymbol that may associate Licensee with Hilfiger or the Merchandise, and cancel
\nany and all registrations or listings that may have been obtained prior to the
\nexecution of this Agreement which associated Licensee with Licensor, including
\ntelephone listings.<\/p>\n
m. Licensee shall notify all suppliers, utilities, landlords,
\ncreditors, and concerned others that Licensee is no longer affiliated with
\nHilfiger.<\/p>\n
29<\/p>\n
n. Licensee shall discontinue use of any of the Trademarks, Trade
\nSecrets or other Proprietary Materials, or anything similar to, or which may be
\nconfused with the Trademarks or Proprietary Materials. Licensee shall not
\nidentify itself or any present or future store or entity, as having been in any
\nway associated with Hilfiger or the Merchandise.<\/p>\n
o. Licensee shall notify all owners or lessors of the Stores not
\ndirectly owned or leased by Licensee that Licensee’s rights to the Trademark
\nhave ceased and that all the Stores must be stripped of the Trademark and other
\nindicia of Hilfiger within one hundred eighty (180) days of the date of
\nexpiration or termination of this Agreement.<\/p>\n
15.5 Store Operations and Leases. Upon the termination of this Agreement
\nfor any reason, Licensee agrees that Hilfiger has the option, but not the
\nobligation, to have Licensee assign its Leases or other documents of occupancy
\nto Hilfiger to the extent legally possible and\/or permissible under the relevant
\nLeases or documents of occupancy. Before any such assignment, Licensee shall
\nbring all of its Store premises into full compliance with the requirements of
\nthe Leases or other documents of possession and bring all accounts with the
\nlessors or other grantors current as of the date that Hilfiger assumes
\npossession of the premises, as well as indemnify Licensor against all loss and
\ncosts arising by virtue of or attributable to the Leases prior to the
\nassignment. Hilfiger shall also have the option to cause Licensee to immediately
\nobtain a new telephone listing and telephone number and to assign its previous
\ntelephone listing and number to Licensor. In addition, Licensee agrees that upon
\ntermination Licensor shall be authorized to enter and, at Licensee’s expense,
\nstrip the Stores of any indicia of the Trademark if such indicia have not been
\nremoved within one hundred eighty (180) days of termination. Licensee hereby
\nacknowledges that if Licensee does not actually own or directly lease the
\nStores, Licensee shall be solely liable to such owners and\/or licensees for any
\ndamages caused by the removal of the Hilfiger’s names and materials from the
\nstores and for any investment losses, and shall indemnify and hold Hilfiger
\nharmless for any claims from third parties arising out of the closure of such
\nStores.<\/p>\n
15.6 Freedom to License. In the event of expiration or termination of this
\nAgreement or the receipt by Hilfiger of a notice or termination from Licensee,
\nHilfiger will be free to license to others the use of the Trademarks in
\nconnection with the manufacture and sale of Licensed Products in the Territory.<\/p>\n
15.7 Royalty Payments on Termination. Upon termination of this Agreement as
\na result of a breach by Licensee, the total amount of the Guaranteed Minimum
\nRoyalties for the balance of the Term, although not yet due, shall, without
\nnotice of demand, forthwith become and be immediately due and payable.<\/p>\n
ARTICLE 16. RELATIONSHIP BETWEEN THE PARTIES<\/p>\n
30<\/p>\n
16.1 No Agency. Licensee shall not represent itself as the agent or legal
\nrepresentative of Hilfiger, Hilfiger’s affiliates or Tommy Hilfiger for any
\npurpose whatsoever and shall have no right to create or assume any obligation of
\nany kind, expressed or implied, for or on behalf of them in any way whatsoever.
\nHilfiger shall similarly not represent itself as the agent or legal
\nrepresentative of Licensee.<\/p>\n
ARTICLE 17. THE STORES<\/p>\n
17.1 Design of the Stores. Hilfiger retains sole discretion and approval
\nover the design of all Stores in order to maintain a uniform worldwide image.<\/p>\n
17.2 Construction. The Stores must be constructed and equipped in all
\nrespects in accordance with any plans, standards and specifications furnished by
\nor approved by Hilfiger. In particular, all fittings, fixtures, furnishings,
\nsigns, equipment and methods of exterior and interior design must conform with
\nHilfiger’s specifications and the quality of the same shall be subject to
\nHilfiger’s approval. The fixtures may be purchased by Licensee only from vendors
\nand sources approved by Hilfiger. If Hilfiger requires an “on site” visit in
\norder to grant approval of plans or grant final approval of a Store, the cost of
\nsuch “on site” approval, including business class airfare, hotel accommodations
\nand expenses, shall be paid by Licensee. Hilfiger’s requirement of compliance to
\nconstruction specifications shall not be construed as a determination by
\nHilfiger that the specified requirements comply with all applicable regulations
\nand laws nor shall the same create a liability on Hilfiger’s part in connection
\nwith the specifications or the construction in accordance therewith.<\/p>\n
17.3 Costs. Licensee shall be solely responsible for all costs associated
\nwith Stores. This includes but is not limited to all real estate purchasing
\ncosts or lease expenses; all costs of construction of the store(s) in accordance
\nwith Hilfiger’s architectural and design requirements; all architect fees and
\ncosts; the cost of design manuals, if any; the expenses of equipping the Stores
\nwith approved fixtures; and so forth.<\/p>\n
17.4 Maintenance. The maintenance and repair of the Stores is the sole
\nresponsibility of Licensee. Licensee shall keep and maintain the Stores,
\nincluding the interior, exterior, immediately surrounding areas, signs, trade
\nfixtures, equipment, decor, furnishings, and all other tangible property used in
\nconnection with the Stores in first class condition of repair and appearance,
\nand to replace any item or property that is not capable of being maintained in
\nthe such condition of repair and appearance. All replacement and\/or redecoration
\nof the Stores or any material part thereof or thing therein or thereon other
\nthan mechanical equipment and items which are replaced with items of the same
\nstyle and quality, shall be made only with the prior written consent of
\nHilfiger. Licensee shall repair, refinish, repaint, replace, and\/or otherwise
\nredo the Stores, the furnishings, fixtures, decor, and any other tangible part
\nor property of the Stores at Licensee’s expense at such time as Hilfiger may
\nreasonably direct so as to maintain the Stores in the condition described above.<\/p>\n
17.5 Alterations. Licensee shall not alter or modify the premises in any
\nmaterial respect without<\/p>\n
31<\/p>\n
the prior written consent of Hilfiger.<\/p>\n
17.6 Future Renovations. The parties recognize that from time to time
\nHilfiger may revise or alter the design and appearance of its retail throughout
\nthe world, and that all Licensee’s Stores will, after four (4) years from the
\nopening of any particular Store, also be required to be renovated to maintain
\nsuch a consistent worldwide image, should there indeed be a planned revision on
\na global basis. All costs associated with such future renovations will be borne
\nby Licensee. In the event that, within a reasonable period of time, Licensee
\ncannot or does not undertake the renovation of its Stores in accordance with
\nsuch design changes, Licensee shall be in breach of this Agreement and Hilfiger
\nwill have the right upon six (6) months notice to Licensee, to remove those
\nparticular Stores which Licensee has not renovated from the list of Approved
\nLocations, terminating this Agreement as to those particular stores.<\/p>\n
17.7 Store Appearance. Licensee shall maintain the highest standards of
\ncleanliness, appearance, service, methods of operation and management techniques
\nto protect and enhance the business, reputation and goodwill of the Stores and
\nof the Trademark.<\/p>\n
17.8 Quality. Licensee recognizes that it is essential for Hilfiger’s
\nreputation that first class standards of quality and service be maintained at
\nthe Stores. Licensee therefore agrees, as part of the consideration for the
\ngranting of this license, that Licensee shall at all times exercise direct and
\npersonal supervision and control of all Stores and shall conduct the operation
\nof the Stores in a first class manner as determined by Hilfiger in its sole
\ndiscretion. Licensee understands and acknowledges that all aspects of the
\noperation of the Stores and Licensee’s compliance with all provisions or
\n —
\nrequirements of this Agreement is essential to Hilfiger.<\/p>\n
17.9 Inventories. In all Stores, Licensee shall carry a product mix
\nreasonably specified by Hilfiger. Licensee shall, to the greatest extent
\npracticable, order and carry, at Licensee’s expense, a reasonable quantity and
\nrepresentative styles and sizes of all product categories of Licensed Products.<\/p>\n
17.10 Exclusivity. The Stores may only carry products which bear the
\nTrademark, or such other mark, name, and\/or symbols as may be used by Hilfiger
\nfrom time to time.<\/p>\n
17.11 Packaging. Licensee shall use only items of wrapping and packaging as
\nmay be supplied or approved in writing, by Hilfiger. If the wrapping and
\npackaging is changed, Licensee will be permitted to use up its stock of the
\nprevious wrapping and packaging.<\/p>\n
17.12 Store Specifications. Licensee, agrees that no items other than those
\napproved in writing by Hilfiger or heretofore used in the Stores, will be used,
\nsold, displayed, exhibited, shown, or otherwise employed in the Stores. Should
\nHilfiger change its specifications, Licensee shall, at Hilfiger’s expense,
\ncomply with the revised specifications. Licensee shall be given a reasonable
\ntime to exhaust Licensee’s inventory of the previously specified items which are
\nsubject to use in the<\/p>\n
32<\/p>\n
course of business, and to amortize the cost of items not normally consumed in
\nthe operation of the Stores.<\/p>\n
17.13 Visits By Licensor. Licensee shall have its retail operations manager
\nor other qualified representative reasonably available by telephone to discuss
\nwith Hilfiger matters concerning the operation of the Stores. Hilfiger may, at
\nits own expense, send a representative or representatives to visit any of the
\nLicensee’s stores, at such times as Hilfiger may determine. Licensee shall be
\npresent during such visits, upon adequate prior notice of such visits, and to
\ncooperate with Hilfiger’s personnel during such visits.<\/p>\n
17.14 Image. Licensee shall maintain an image and reputation of the Stores
\nconsistent with Hilfiger’s standards and the standards set forth in this
\nAgreement. In order to maintain such image and reputation, should Hilfiger
\nnotify Licensee at any time of material defects or deficiencies in the
\nappearance or conduct of any of the Stores, Licensee agrees to promptly correct
\nany such item or items at Licensee’s expense.<\/p>\n
17.15 Permits. Licensee shall obtain and maintain at Licensee’s expense all
\nlicenses and permits necessary for the operation of the Stores. Licensee shall
\ntimely comply with the orders, regulations, rules, and directives of government
\nofficials in the conduct of their official rules as they pertain to the
\nconstruction, appearance, operation, and conduct of the Stores and the Stores
\npremises. Licensee shall promptly notify Hilfiger of any such order,
\nregulations, rules or directives, which may effect the due compliance with
\nLicensee’s obligations hereunder.<\/p>\n
17.16 Expenses. Licensee agrees that it is solely responsible for all taxes
\nand operating expenses, and any and all other outlays or responsibilities,
\ninvolving money or performance of any other nature, incurred or resulting on any
\nway from the construction, opening, operation or otherwise related to the
\nconduct of the Stores, unless the same were specifically incurred by Hilfiger
\nand except as otherwise provided herein.<\/p>\n
17.17 Business Practices. Licensee shall maintain moral and ethical business
\npractices consistent with Hilfiger’s image in the operation and conduct of the
\nStores so as to maintain the goodwill in the eyes of the public for the
\nTrademark, and for the Merchandise, and supervise and evaluate the performance
\nof Licensee’s staff to ensure that each renders service as previously provided
\nto the general public. Licensee’s staff must strictly adhere to the customer
\nservice guidelines from time to time adopted by Hilfiger and notified to
\nLicensee. Licensee’s staff shall be trained by Hilfiger in the practices and
\nprocedures appropriate in the operation of the Stores to aid in the opening of
\nthe first Store and Licensee shall reimburse Licensor for Licensor’s expenses
\nreasonably incurred in connection with such training, including “on-site” visits
\nif such visits are requested by Licensee to aid in Store openings.<\/p>\n
17.18 Type of Sales. Licensee may not conduct any special promotions,
\nliquidation sales, going-out-of-business sales, auctions, or other sales not in
\nthe ordinary course of business without the<\/p>\n
33<\/p>\n
prior written consent of Hilfiger. It is understood that Licensor is not
\nempowered to fix or regulate the prices for which the Licensed Products are to
\nbe sold, either at the wholesale or retail level, but in order to assist
\nLicensee, a suggested retail markdown schedule will be supplied by Hilfiger
\nwhich will assist Licensee in preserving the goodwill and prestigious nature of
\nthe Trademark. To the extent commercially practicable, Licensee shall give due
\nconsideration to Hilfiger’s recommended pricing and markdown guidelines.<\/p>\n
17.19 Employee Attire. Licensee shall be responsible for having all
\npersonnel employed at the Stores wear such standard Tommy Hilfiger(R) attire or
\nuniforms during business hours as may be designed by Hilfiger from time to time.
\nThe cost of supply of such standard attire or uniforms shall be borne solely by
\nthe Licensee.<\/p>\n
17.20 Inspections. Licensee shall permit Hilfiger, or its authorized agents
\nand representatives, to enter and inspect the Stores in order to evaluate the
\noperations and to examine the products being displayed and sold, for the
\npurposes of ascertaining that Licensee is operating the Stores in accordance
\nwith the terms of this Agreement. Inspections may be conducted at any time
\nduring the regular business hours of the Stores. Hilfiger shall notify Licensee
\nof any deficiencies detected during such inspection and Licensee shall promptly
\ncorrect any such deficiencies. Upon notification by Hilfiger that Licensee is
\nselling substitutions for the Merchandise, Licensee shall immediately cease and
\ndesist from the further sale thereof, and make all of the necessary corrections
\nand remove those designated items from the Approved Location. Any items not
\npermitted hereunder shall, at Hilfiger’s request, be delivered to Hilfiger,
\nwithout cost to Hilfiger, for Hilfiger’s use and disposal. Hilfiger may remove
\nand dispose of any products not permitted hereunder which are found at an
\nApproved Location. Licensee shall reimburse Hilfiger for the cost of removal,
\nshipping, storage, testing and disposal of such products. Hilfiger shall not be
\nliable under any circumstances for consequential damages, even if the products
\nremoved are ultimately determined by Hilfiger not to be from an unapproved
\nsource, but shall only be liable to Licensee for the actual profits lost from
\nthe sale of the confiscated goods.<\/p>\n
34<\/p>\n
ARTICLE 18. INDEMNIFICATION AND INSURANCE<\/p>\n
18.1 Indemnification by Licensee. Licensee will indemnify, defend, and hold
\nharmless Hilfiger, Tommy Hilfiger individually, and their directors, officers,
\nemployees, agents, officials and related companies from and against any and all
\nlosses, liability, claims, causes of action, damages and expenses (including
\nreasonable attorneys’ fees and expenses in actions involving third parties or
\nbetween the parties hereto) that they or any of them may incur or be obligated
\nto pay in any action, claim or proceeding against them or any of them, for or by
\nreason of any acts, whether of omission or commission, that may be committed or
\nsuffered by Licensee or any of its servants, agents or employees in connection
\nwith or in any way related to Licensee’s performance of this Agreement,
\nincluding Licensee’s use of Licensee’s own designs, in connection with Licensed
\nProducts manufactured by or on behalf of Licensee or patent, trademark,
\ncopyright or other proprietary rights; provided, however, that Hilfiger gives
\nLicensee prompt notice of, and full cooperation in the defense against, such
\nclaim. If any action or proceeding is brought or asserted against Hilfiger in
\nrespect of which indemnity may be sought from Licensee under this Paragraph
\n18.1, Hilfiger will promptly notify Licensee thereof in writing, and Licensee
\nwill assume and direct the defense thereof. Hilfiger may thereafter, at its own
\nexpense, be represented by its own counsel in such action or proceeding.
\nHilfiger and Licensee will keep each other fully advised of all developments and
\nshall cooperate fully with each other and in all respects in connection with any
\nsuch defense. The provisions of this paragraph and Licensee’s obligations
\nhereunder will survive any termination or rescission of this Agreement.<\/p>\n
18.2 Notice of Suit or Claim. Licensee shall promptly inform Hilfiger by
\nwritten notice of any suit or claim against Licensee in connection with or in
\nany way related to Licensee’s performance under this Agreement, whether such
\nsuit or claim is for personal injury, involves alleged defects in the Licensed
\nProducts manufactured, sold or distributed hereunder, or otherwise.<\/p>\n
18.3 Indemnification by Hilfiger. Hilfiger will indemnify, defend, and hold
\nharmless Licensee against any and all liabilities, damages and expense
\n(including reasonable attorneys’ fees, costs and expenses) which Licensee may
\nincur or be obligated to pay in any action or claim against Licensee for
\ninfringement of any other person’s claimed right to use a trademark in the
\nTerritory, but only where such action or claim results from Licensee’s use of
\nthe Trademarks in the Territory in accordance with the terms of this Agreement.
\nLicensee will give Hilfiger prompt written notice of any such claim or action,
\nand thereupon Hilfiger will undertake and conduct the defense of any suit so
\nbrought. It is understood, however, that if there is a dispute between Hilfiger
\nand Licensee as to whether the suit was brought as a result of Licensee’s
\nfailure to use the Trademarks in accordance with this Agreement, Licensee may be
\nrequired to conduct such defense unless and until it is determined that no such
\nmisuse of the Trademarks occurred. In the event appropriate action is not taken
\nby Hilfiger within thirty (30) days after its receipt of notice from Licensee,
\nLicensee will have the right to defend such claim or action in its own name, but
\nno settlement or compromise of any such claim or action may be made without the
\nprior written approval of Hilfiger. In either case, Hilfiger and Licensee will
\nkeep each other fully advised of all developments and shall cooperate <\/p>\n
35<\/p>\n
fully with each other and in all respects in connection with any such defense.
\nSuch indemnification will be deemed to apply solely to the amount of the
\njudgment, if any, against Licensee, and sums paid by Licensee in connection with
\nits defense, and will not apply to any consequential damages suffered by
\nLicensee that are not included in the aforementioned judgment. Such
\nindemnification will not apply to any damages sustained by Licensee by reason of
\nclaimed infringement other than those specified above.<\/p>\n
ARTICLE 19. NOTICES<\/p>\n
19.1 Manner of Notice. Any notice, request for approval, communication or
\nlegal service of process required or arising out of or under this Agreement will
\nbe effective only when personally delivered in writing, or on the date when the
\nnotice, request, service or communication is transmitted confirmed by electronic
\nfacsimile (with a second confirmation copy to be sent by mail) or the day after
\nthe notice, service or communication is sent by overnight air courier service
\n(e.g., FedEx Courier); or five (5) days after the date of mailing by first class
\nregistered mail. All notices will be sent to the parties at the addresses listed
\nbelow or to such other persons and addresses as may be designated in writing by
\nthe parties to each other. The date a notice will be deemed to be transmitted,
\nsent by overnight air courier or mailed will be the date at the notifying
\nparty’s place of business at the time of transmission, sending or mailing.<\/p>\n
To Hilfiger: TOMMY HILFIGER LICENSING, INC.
\n 913 N. Market Street
\n Wilmington, Delaware 19801
\n Attention: Virginia Cleary
\n Telephone (302) 652-8098
\n Facsimile: (302) 652-1768<\/p>\n
with a copy to: TOMMY HILFIGER U.S.A., INC.
\n 42 West 39\/th\/ Street
\n New York, New York 10018, U.S.A.
\n Attention: Lynn Shanahan
\n Telephone: (212) 548-1665
\n Facsimile: (212) 548-1894<\/p>\n
To Licensee: T.H.M.J. Incorporated
\n 8-20 Nishigotanda 8-chome
\n Shinagawa-Ku, Tokyo
\n Japan
\n Attention:
\n Telephone:
\n Facsimile:<\/p>\n
36<\/p>\n
ARTICLE 20. SUSPENSION OF OBLIGATIONS<\/p>\n
20.1 Suspension of Obligations (Force Majeure). If Licensee is prevented from
\nperforming any of its obligations because of governmental regulation or order,
\nor by strike or war, declared or undeclared, or other calamities such as fire,
\nearthquake, or similar acts of God, or because of other similar or dissimilar
\ncause beyond the control of Licensee, Licensee’s obligations will be suspended
\nduring the period of such condition. If such condition continues for a period
\nof more than one hundred twenty (120) days, Hilfiger will have the right to
\nterminate this Agreement. If the force majeure does not impact Licensee
\ndirectly but it prevents Licensee from manufacturing and\/or delivering Licensed
\nProducts, due to an inability to obtain fabric or other materials, destruction
\nof no more than one hundred twenty (120) days to find alternate sources and
\nLicensee will advise Hilfiger on a weekly basis of the progress it has made in
\nthat regard. If, in Hilfiger’s reasonable opinion, Licensee fails to diligently
\nproceed to obtain alternate sources, or if the condition continues for more than
\none hundred twenty (120) days, whichever first occurs, Hilfiger shall have the
\nright to terminate this Agreement.<\/p>\n
ARTICLE 21. MISCELLANEOUS<\/p>\n
21.1 Benefit. This Agreement will insure to the benefit of and be binding
\nupon the parties hereto, and to their permitted successors and assigns.<\/p>\n
21.2 Entire Agreement; Amendment. This Agreement constitutes the entire
\nagreement of the parties hereto with respect to the subject matter hereof, and
\nthis Agreement may not be amended or modified, except in a writing signed by
\nboth parties hereto.<\/p>\n
21.3 Non-Waiver. The failure of either party to enforce at any time any term,
\nprovision or condition of this Agreement, or to exercise any right or option
\nherein, except Licensee’s request for Extension, will in no way operate as a
\nwaiver thereof, nor will any single or partial exercise preclude any other right
\nor option herein; and no waiver whatsoever will be valid unless in writing,
\nsigned by the waiving party, and only to the extent set forth in such writing.<\/p>\n
21.4 No Assignment Without Consent. The license and rights granted to
\nLicensee hereunder are personal in nature, and Licensee may not sell, transfer,
\nlease, sublicense or assign this Agreement or its rights or interest hereunder,
\nor any part hereof, by operation of law or otherwise, without the prior written
\nconsent of Hilfiger, which consent may be withheld by Hilfiger in its sole and
\nabsolute discretion, except that Licensee shall have the right, upon written
\nnotice to Hilfiger, to assign this Agreement to a corporation, subsidiary or
\naffiliate under the same direction and control as Licensee; provided, however,
\nthat in such event Licensee unconditionally guarantees the performance and
\nobligations of such corporation, subsidiary or affiliate under this Agreement.
\nAnything herein to the contrary notwithstanding, Licensee shall, on fifteen (15)
\ndays written notice to Hilfiger, be permitted to change its name and address to
\nTommy Hilfiger Japan Corporation <\/p>\n
37<\/p>\n
(“THJ”), 4\/F, Minami Aoyama Daiichi Mansions, 5-1-10 Minami-Aoyama, Minato-Ku,
\nTokyo, Japan.<\/p>\n
21.5 Sale of Assets. A sale or other transfer of all or substantially all of
\nthe assets of Licensee or a change in the control of Licensee will be deemed an
\nassignment of Licensee’s rights and interests under this Agreement to which the
\nterms and conditions of Paragraph 21.4 of this Agreement shall apply.<\/p>\n
21.6 Sale of Stock\/Interest. Any transfer, by operation of law or otherwise,
\nof Licensee’s interest in this Agreement (in whole or in part), of a fifty (50%)
\npercent or greater interest in Licensee (whether in one or in a series of
\ntransactions in Licensee, whether of stock, partnership interest or otherwise),
\nor any interest directly or indirectly to a competitor of Hilfiger shall be
\n —
\ndeemed an assignment of Licensee’s rights and interest under this Agreement to
\nwhich the terms and conditions of Paragraph 21.4 of this Agreement shall apply.
\nThe issuance of shares of stock to other than the existing shareholders is
\ndeemed to be a transfer of that stock for the purposes of this paragraph. If
\nthere has been a previous transfer of less than a fifty (50%) percent interest
\nin Licensee, then any other transfer of an interest in Licensee which when added
\nto the total percentage previously transferred totals a transfer of a fifty
\n(50%) percent or greater interest of Licensee shall be deemed an assignment of
\nLicensee’s interest in this Agreement within the meaning of this paragraph to
\nwhich the terms and conditions of Paragraph 21.4 shall apply.<\/p>\n
21.7 Assignment by Hilfiger. Hilfiger has a complete and unrestricted right
\nto sell, transfer, lease or assign its rights and interests in this Agreement to
\nperson or entity, providing that such transferee agrees to be bound by all of
\nthe terms and obligations of Hilfiger hereunder. When Hilfiger wishes to sell,
\ntransfer, lease or assign its rights and interests in this Agreement, Hilfiger
\nwill give reasonable notice to Licensee.<\/p>\n
21.8 Public Offering. Licensee agrees that, without the prior written consent
\nof Hilfiger, which consent may not be unreasonably withheld in Hilfiger’s sole
\ndiscretion, neither Licensee nor any Affiliate of Licensee (other than Itochu
\nCorporation) will make any reference, explicit or otherwise, in any registration
\nstatement, prospectus or other offering document (including any related
\nexhibits, schedules or other materials) relating to any public or private
\noffering of equity by Licensee or any Affiliate of Licensee (other than Itochu
\nCorporation) whose business will directly or indirectly involve or derive any
\nbenefit from this license or the Trademarks, to (a) Hilfiger or any Affiliates
\nof Hilfiger, (b) the Trademarks or (c) this Agreement or the existence of the
\narrangement contemplated hereby.<\/p>\n
21.9 Severability. If any provision or any portion of any provision of this
\nAgreement is construed to be illegal, invalid, or unenforceable, such shall be
\ndeemed stricken and deleted from this Agreement to the same extent and effect as
\nif never incorporated herein, but all other provisions of this Agreement and any
\nremaining portion of any provision which is not deemed illegal, invalid or
\nunenforceable in part shall continue in full force and effect.<\/p>\n
38<\/p>\n
21.10 Governing Law. This Agreement has been negotiated, prepared, executed
\nand delivered in several jurisdictions, including the State of New York, United
\nStates of America. Accordingly, in order to establish with certainty that this
\nAgreement will be governed by one body of well-developed commercial law, the
\nparties hereto have expressly agreed that this Agreement shall be governed by,
\nand construed in accordance with, the laws of the State of New York, applicable
\nto contracts executed and fully to be performed therein, to the exclusion of any
\nother applicable body of governing law including, without limitation, the United
\nNations Convention on Contracts for the International Sale of Goods.<\/p>\n
21.11 Jurisdiction. The parties hereby consent to the exclusive jurisdiction
\nof the United States District Court for the Southern District of New York and
\nany of the courts of the State of New York in any dispute arising under this
\nAgreement and agree further that service of process or notice in any such
\naction, suit or proceeding will be effective if in writing and issued provided
\nin Paragraph 20.1 hereof.<\/p>\n
21.12 Exhibits. All Exhibits are incorporated into this Agreement. Hilfiger
\nmay revise its reporting, approval and related forms at any time at its sole
\ndiscretion.<\/p>\n
21.13 Headings. The headings of the Articles and Paragraphs of this Agreement
\nare for convenience only and in no way limit or affect the terms or conditions
\nof this Agreement.<\/p>\n
39<\/p>\n
21.14 Counterparts. This Agreement may be executed in two (2) or more
\ncounterparts, each of which will be deemed an original, but all of which shall
\nconstitute one and the same instrument.<\/p>\n
T.H.M.J. INCORPORATED TOMMY HILFIGER LICENSING, INC.<\/p>\n
By: \/s\/ Kaisaku Tamaki By: \/s\/ Virginia M. Cleary
\n ————————— —————————–<\/p>\n
Name: Kaisaku Tamaki Name: Virginia M. Cleary
\n ————————- —————————<\/p>\n
Title: Chief Executive Officer Title: Assistant Secretary
\n ———————— ————————–<\/p>\n
40<\/p>\n
EXHIBIT A
\n ———<\/p>\n
TRADEMARKS<\/p>\n
Trademarks Registration Number International Class
\n———- ——————- ——————-<\/p>\n
TOMMY JEANS 2,699,963 25<\/p>\n
CREST DESIGN 2,586,007 25
\n 2,668,456 25<\/p>\n
TOMMY HILFIGER 2,357,619 25
\n 2,607,371 25<\/p>\n
TOMMY HILFIGER
\n& Flag Logo Design 3,264,281 25<\/p>\n
41<\/p>\n
EXHIBIT B
\n ———<\/p>\n
LICENSED PRODUCTS<\/p>\n
Mens, womens and childrens sportswear and jeans bearing the Trademark.<\/p>\n
EXHIBIT C
\n ———<\/p>\n
ORGANIZATION CHART<\/p>\n
EXHIBIT D
\n ———<\/p>\n
DESIGN AND PRODUCTION PLAN<\/p>\n
EXHIBIT E
\n ———<\/p>\n
APPROVAL FORM<\/p>\n
FORM MUST BE SUBMITTED COMPLETE TO THE ATTENTION OF:<\/p>\n
TOMMY HILFIGER LICENSING, INC.
\n25 WEST 39\/TH\/ STREET
\nNEW YORK, NEW YORK 10018<\/p>\n
(ALL SAMPLES SUBMITTED FOR APPROVAL MUST BE IN CORRECT FABRIC)<\/p>\n
NAME OF LICENSEE<\/p>\n
LICENSED PRODUCT<\/p>\n
LICENSEE’S ADDRESS<\/p>\n
SEASON _______________ STYLE NUMBER____________ FABRICATION<\/p>\n
START TAKING ORDERS____________________ END TAKING ORDERS<\/p>\n
START SHIP ____________________________ END SHIP<\/p>\n
APPROVED___________________
\n DISAPPROVED<\/p>\n
COMMENTS<\/p>\n
_____________________________ ___________________________
\nSIGNATURE OF LICENSEE SIGNATURE OF HILFIGER<\/p>\n
DATE RETURNED TO LICENSEE _________________<\/p>\n
EXHIBIT F
\n ———
\n TOMMY HILFIGER CORPORATION
\n ————————–
\n SUPPLIER CODE OF CONDUCT
\n ————————<\/p>\n
We, at the Tommy Hilfiger Corporation (hereinafter “Tommy Hilfiger”) are proud
\nof our tradition of conducting our business in accordance with the highest
\nethical standards and in compliance with the laws of the United States and of
\nthe countries in which we produce, buy and sell our products. Tommy Hilfiger is
\ncommitted to legal compliance and ethical business practices in all operations
\nand seeks to do business with suppliers who share that commitment. Tommy
\nHilfiger actively seeks to engage as its suppliers, companies that offer their
\nworkers safe and healthy workplaces.<\/p>\n
Tommy Hilfiger will not tolerate exploitative or abusive conditions once known.
\nThe Tommy Hilfiger Supplier Code of Conduct (hereinafter the “Code of Conduct”)
\ndefines our minimum expectations. No Code can be all inclusive, but we expect
\nour suppliers to act reasonably in all respects and to ensure that no abusive,
\nexploitative or illegal conditions exist at their workplaces. Tommy Hilfiger
\nrequires its suppliers to extend principles of fair and honest dealing to all
\nothers with whom they do business, including employees, subcontractor sand other
\nthird parties. We also require our suppliers to ensure and to certify to us that
\nno abusive, exploitative or illegal conditions exist at the workplaces of their
\nsuppliers and subcontractors. Tommy Hilfiger will only do business with
\nsuppliers who obey the laws of the country in which they operate and the
\nprinciples expressed in this Code of Conduct.<\/p>\n
Tommy Hilfiger will only do business with suppliers who have certified to us
\nthat their business practices are lawful, ethical and in compliance with the
\nprinciples set forth in this Code of Conduct. Moreover, Tommy Hilfiger will
\nonly do business with suppliers who have agreed to be subjected to the scrutiny
\nof the Tommy Hilfiger Supplier Monitoring Program under which they will be
\ninspected and evaluated to ensure their compliance with their Code of Conduct.<\/p>\n
Forced Labor: Tommy Hilfiger will not purchase products or components thereof
\n————
\nfrom suppliers that use forced labor, prison labor, indentured labor or
\nexploited bonded labor, or permit their suppliers to do so.<\/p>\n
Child Labor: Tommy Hilfiger will not purchase products or components thereof
\n———–
\nmanufactured by persons younger than 15 years of age or younger than the age of
\ncompleting compulsory education in the country of manufacture where such age is
\nhigher than 15.<\/p>\n
Harassment or Abuse: Tommy Hilfiger suppliers and subcontractors must treat
\n——————–
\ntheir employees with respect and dignity. No employee shall be subject to
\nphysical, sexual or psychological harassment or abuse.<\/p>\n
Nondiscrimination: Tommy Hilfiger suppliers and subcontractors shall not subject
\n—————–
\nany person to discrimination in employment, including hiring, salary, benefits,
\nadvancement, discipline, <\/p>\n
termination or retirement, on the basis of gender, race, religion, age
\ndisability, sexual orientation, nationality, political opinion, or social or
\nethnic origin.<\/p>\n
Health and Safety: Tommy Hilfiger suppliers and subcontractors shall provide a
\n—————–
\nsafe and healthy working environment to prevent accidents and injury to health
\narising out of, linked with, or occurring in the course of work or as a result
\nof the operation of employer facilities. Employers must fully comply with all
\napplicable workplace conditions, safety and environmental laws.<\/p>\n
Freedom of Association: Tommy Hilfiger and subcontractors shall recognize and
\n———————-
\nrespect the right of employees to freely associate in accordance with the laws
\nof the countries in which they are employed.<\/p>\n
Wages and Benefits: Tommy Hilfiger suppliers and subcontractors recognize that
\n——————
\nwages are essential to meeting employees’ basic needs. Tommy Hilfiger suppliers
\nand subcontractors shall pay employees at least the minimum wage required by
\nlocal law regardless of whether they pay by the piece or by the hours and shall
\nprovide legally mandated benefits.<\/p>\n
Work Hours: Tommy Hilfiger suppliers and subcontractors shall not require their
\n———-
\nemployees to work more than the limits on regular and overtime hours allowed by
\nthe law of the country of manufacture. Except under extraordinary business
\ncircumstances, Tommy Hilfiger suppliers’ and subcontractors’ employees shall be
\nentitled to one day off in every seven day period. Tommy Hilfiger suppliers and
\nsubcontractors must inform their workers at the time of their hiring if
\nmandatory overtime is a condition of their employment. Tommy Hilfiger suppliers
\nand subcontractors shall not compel their workers to work excessive overtime
\nhours.<\/p>\n
Overtime Compensation: Tommy Hilfiger suppliers’ and subcontractors’ employees
\n———————
\nshall be compensated for overtime hours at such premium rate as is legally
\nrequired in the country of manufacture, or in countries where such laws do not
\nexist, at a rate at least equal to their regular hourly compensation rate.<\/p>\n
Contract Labor: Tommy Hilfiger suppliers or subcontractors shall not use workers
\n————–
\nobligated under contracts which exploit them, which deny them the basic legal
\nrights available to people and to workers within the countries in which they
\nwork or which are inconsistent with the principles set forth in this Code of
\nConduct.<\/p>\n
Legal and Ethical Business Practices: Tommy Hilfiger suppliers and
\n————————————
\nsubcontractors must fully comply with all applicable local, state, federal,
\nnational and international laws, rules and regulations including, but not
\nlimited to, those relating to wages, hours, labor, health and safety, and
\nimmigration. Tommy Hilfiger suppliers and subcontractors must be ethical in
\ntheir business practices.<\/p>\n
Penalties. Tommy Hilfiger reserves the right to terminate its business
\n———
\nrelationship with any supplier who violates this Code of Conduct or whose
\nsuppliers or subcontractors violate this Code of <\/p>\n
Conduct. Tommy Hilfiger reserves the right to terminate its business
\nrelationship with suppliers who fail to provide written confirmation to Tommy
\nHilfiger that they have a program in place to monitor their suppliers and
\nsubcontractors for compliance with the Code of Conduct.<\/p>\n
EXHIBIT G
\n ———<\/p>\n
CERTIFICATION
\n ————-<\/p>\n
In consideration of _____________________________________ (“Company”) placing
\norders for the manufacture of Tommy Hilfiger brand merchandise with us in the
\nfuture, and in compliance with Company’s Manufacturing Agreement with us (the
\n“Agreement”), we hereby certify that:<\/p>\n
I. Any Merchandise (including components thereof) we manufacture or cause
\nto be manufactured under the Agreement will be manufactured in compliance with:
\n(1) all applicable requirements of Sections 6, 7, and 12 of the Fair Labor
\nStandards Act, as amended, and all regulations and order of the United States
\nDepartment of Labor under Section 14 thereof, and applicable state and local
\nlaws pertaining to child labor, minimum wage and overtime compensation, and, if
\nthe merchandise is manufactured outside the United States, it will be
\nmanufactured in compliance with the wage, overtime compensation, benefits, hour,
\nhiring and employment, workplace conditions and safety, environmental,
\ncollective bargaining, freedom of association laws of the country of manufacture
\nand without the use of child (persons under the age of 15 or younger than the
\nage for completing compulsory education, if that age is higher than 15), prison,
\nindentured, bonded, forced or slave labor; (2) we currently have in effect and
\nwill maintain a program of monitoring all of our suppliers and subcontractors
\nand other designated contract facilities producing TOMMY HILFIGER brand
\nmerchandise for compliance with (1) above; (3) we will obtain the signature of
\nan authorized representative of (i) our subcontractors and other designated
\ncontract facilities producing TOMMY HILFIGER brand merchandise on a current
\nManufacturing Agreement in the same form as that which we have executed with
\nCompany and (ii) our suppliers on a Certification in the same form as this
\nCertification; and (4) within two (2) weeks of the execution of this
\nCertification, we will provide to Company the names and addresses of all of our
\nsuppliers and subcontractors and other designated contract facilities producing
\nTOMMY HILFIGER brand merchandise under the Agreement, and all such merchandise
\nshall be manufactured solely in factories (whether operated by our suppliers,
\nsubcontractors or other designated contract facilities) that have been inspected
\nand approved in writing by our authorized employee or agent; and (5) all
\ncommercial invoices which accompany all TOMMY HILFIGER brand merchandise will
\ninclude the following language (either pre-printed or “stamped”):<\/p>\n
“We hereby certify that the merchandise (including
\n components thereof) covered by this shipment was
\n manufactured in compliance with (1) all applicable
\n requirements of Sections 6, 7, and 12 of the Fair Labor
\n Standards Act, as amended and all regulations and orders of
\n the United States Department of Labor under Section 14
\n thereof, and applicable state and local laws pertaining to
\n child labor, minimum wage and overtime compensation, and (2)
\n if manufactured outside the United States, was manufactured
\n in compliance with all applicable requirements of the wage,
\n overtime compensation, benefits, hours, hiring and
\n employment, workplace conditions and<\/p>\n
safety, environmental, collective bargaining freedom of
\n association laws of the country of manufacture and without
\n the use of child (persons under the age of 15 or younger than
\n the age for completing compulsory education, if that age is
\n higher than 15), prison, indentured, bonded, forced or slave
\n labor. We further certify that we currently have in effect a
\n program of monitoring of our suppliers and subcontractors and
\n other designated contract facilities which manufacture TOMMY
\n HILFIGER brand merchandise to ensure their compliance with
\n the Fair Labor Standards Act and all state, local and
\n foreign laws pertaining to wages, overtime compensation,
\n benefits, hours, hiring and employment, workplace conditions
\n and safety, environmental, collective bargaining, freedom of
\n association and that their products or and the components
\n thereof are made without the use of child (persons under the
\n age of 15 or younger than the age for completing compulsory
\n education, if that age is higher than 15), prison,
\n indentured, bonded, forced or slave labor. We also certify
\n that upon importation (if applicable) this shipment is in
\n compliance with all laws applicable to the designation of
\n country of origin and is being shipped under legally issued
\n and valid export license or visa.”<\/p>\n
II. Neither we, nor any of our subcontractors or suppliers, will use any
\nof the following chemicals or dyestuffs in the manufacture or treatment of any
\nof the merchandise and Products (including the components thereof) manufactured
\nhereunder:<\/p>\n
\n\n CAS # CAS #
\n —– —–
\n
\n4-Aminobiphenlyl 92-67-1 3,3′-Dimethoxybenzidine 119-90-4
\nBenzidine 92-87-5 3,3′-Dimethylbenzadine 119-93-7
\n4-Chloro-o-toluidine 95-69-2 3’3′-Dimethyl- 838-88-0
\n2-Naphthylamin 91-59-8 4,4’diaminodiphenylmethane
\no-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
\n2-amino-4-nitrotoluol 99-55-8 4,4’Methaylen-bis-(2-chloranilin) 101-14-4
\np-Chloroaniline 1-6-47-8 4,4’Oxydianiline 101-80-4
\n2,4-Diaminoanisole 615-05-4 4,4’Thiodianiline 139-65-1
\n4,4′-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
\n3,3′-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
\nAminoanabenzane 2,4,5-Trimethylaniline 137-17-7
\n o-Anisidine
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nand;<\/p>\n
III. We, and our subcontractors or suppliers, will only use the following
\nchemicals in connection with the manufacture or treatment of any of the
\nmerchandise and products (including the components thereof) manufactured
\nhereunder, in accordance with the following standards or any <\/p>\n
further standards Company and THLI designate from time to time:<\/p>\n
(i) Formaldehyde: Must be less than 300 p.p.m. when tested in by the
\n ————
\n Acetylacetone method in accordance with Japanese law 112.<\/p>\n
(ii) Pentachlorophenol (Pesticides): Must be less than 5 p.p.m.
\n —————————— <\/p>\n
(iii) Nickel: In the event any metal parts of a garment or
\n ——
\n other merchandise coming into contact with the skin, contain
\n nickel in excess of 0.5 micrograms per square centimeter\/week,
\n Company must so notify and special warning labels need to be
\n attached to the garment.<\/p>\n
[Name of your Company]<\/p>\n
Date: ________________ By: _____________________________
\n [Authorized Signature]<\/p>\n
Print Name:_________________<\/p>\n
EXHIBIT H
\n ———<\/p>\n
THIRD PARTY MANUFACTURING AGREEMENT
\n ———————————–<\/p>\n
THIS AGREEMENT is made as of the ______ day of _____________________, 200___, by
\nand between _________________________________, having an office at
\n______________________________________________________________ (hereinafter
\nreferred to as the “Company”), and ___________________________________ having an
\noffice at ____________________________________________________ (hereinafter
\nreferred to as the “Manufacturer”).<\/p>\n
W I T N E S S E T H :<\/p>\n
WHEREAS, Manufacturer is engaged in the manufacture of garments and\/or other
\nitems of merchandise;<\/p>\n
WHEREAS, Company wishes to contract with Manufacturer for manufacture of certain
\ngarments and\/or other merchandise from time to time, which garments and\/or other
\nitems of merchandise (the “Products”) will bear the trademark TOMMY HILFIGER,
\nthe trade name TOMMY HILFIGER, all related logos, crests, emblems or symbols,
\nand all combinations, forms and derivatives thereof as are from time to time
\nused by Company or any of its affiliates, whether registered or unregistered
\n(the “Trademarks”); and<\/p>\n
WHEREAS, Company has been licensed by Tommy Hilfiger Licensing, Inc. (“THLI”),
\nthe owner of all rights, title and interests in and to the Trademarks, to use
\nthe Trademarks.<\/p>\n
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
\nparties hereby agree as follows:<\/p>\n
1. THE PRODUCTS. Company and THLI have created certain designs and patterns
\n ————
\nfrom which Manufacturer will create three-dimensional samples. Company shall
\nadvise Manufacturer if the samples meet Company’s quality requirements within
\nfifteen (15) days of receipt. Manufacturer shall make any modifications to the
\nsamples as required by Company. Samples accepted by Company shall be designated
\nas prototypes for the purposes of this Agreement.<\/p>\n
2. TERM.
\n —- <\/p>\n
(a) The term of this Agreement shall commence as of the date hereof and
\ncontinue through December 31, __________.<\/p>\n
(b) In the event that Manufacturer shall have faithfully performed each
\nand every obligation of this Agreement during the Term referred to in Paragraph
\n2(a) above, then this Agreement shall automatically renew from month to month
\ncommencing immediately upon expiration of the term, unless either party has
\ngiven the other thirty (30) days written notice of its <\/p>\n
intention to terminate the Agreement.<\/p>\n
3. MANUFACTURE.
\n ———– <\/p>\n
(a) Manufacturer shall only manufacture the specific number of Products as
\nrequested by Company and at no time shall manufacture excess goods or overruns.
\nManufacturer shall not sell any Products bearing the Trademarks to any third
\nparties without the express written consent of Company.<\/p>\n
(b) Manufacturer shall manufacture the Products and Packaging to conform
\nin quality and specifications to the prototypes as defined in Paragraph 1,
\nabove. <\/p>\n
(c) All Products and Packing manufactured by Manufacturer shall be
\ndelivered to locations specified by Company or directly to the Company,
\nwhichever Company may direct.<\/p>\n
4. COMPLIANCE WITH CODE; APPLICABLE LAWS.
\n ————————————- <\/p>\n
(a) Attached hereto as Addendum A is THLI’s Supplier Code of Conduct (the
\n“Code”) which applies to any entity manufacturing merchandise under the TOMMY
\nHILFIGER label (including the components therefor). As a condition to
\nmanufacturing Products hereunder, Manufacturer shall comply with the terms of
\nthe Code and evidence such compliance: (1) upon execution of this Agreement, by
\nexecuting the Code in the form as attached or such other form as provided by
\nTHLI, and returning such document to THLI, and (2) by publicly displaying the
\nCode, in a form as provided by THLI from time to time, in a clearly visible
\nlocation in Manufacturer’s facility at all times while this Agreement is in
\neffect.<\/p>\n
(b) In order to ensure compliance with the Code, Company has developed a
\nprogram of monitoring its manufacturers and such manufacturers’ subcontractors
\n(hereinafter the “Supplier Monitoring Program”). As a condition to
\nmanufacturing Products hereunder, Manufacturer hereby agrees that it shall
\ncooperate fully with the Supplier Monitoring Program, which cooperation
\nincludes, but is not limited to, Company’s inspections in accordance with
\nParagraph 5 below.<\/p>\n
(c) For purposes of this Agreement a “Subcontractor” means an entity or an
\nindividual that or whom Manufacturer either hires or pays to perform the
\nmanufacturing tasks that Manufacturer could otherwise perform itself at its own
\nfacility or through its own employees and staff. A “Supplier” means an entity
\nor individual that produces components for merchandise. Examples of a supplier
\ninclude, but are not limited to, fabric\/trim manufacturers, yarn manufacturers,
\nbutton manufacturers, or zipper manufacturers, provided that such named
\nmanufacturers do not contribute further to the manufacture of the finished
\nmerchandise. Prior to utilizing any Subcontractor or Supplier, Manufacturer
\nshall provide written notice to Company of: (i) the name and address of each
\nsuch Subcontractor and Supplier; (ii) the nature and type of work performed or
\nproduct supplied to Manufacturer; and (iii) duration of the Subcontractor or
\nSupplier relationship.<\/p>\n
(d) Within thirty (30) days from executing this Agreement for any existing<\/p>\n
Subcontractors and Suppliers, and within thirty (30) days after establishing a
\nnew arrangement with a subcontractor or supplier, Manufacturer shall obtain and
\nprovide to Company the signature of an authorized representative from each of
\nits Subcontractors (if any) on a Manufacturing Agreement in the same form as
\nthis Agreement. Manufacturer shall further obtain and provide to Company the
\nsignature of an authorized representative from each of Manufacturer’s Suppliers
\non a Certification in the same form as that which is attached hereto and
\nhereafter referred to as Addendum B, and provided by Company from time to time,
\nor such other form as provided by Company. In the event Manufacturer has
\nknowledge of, has reason to believe, or should have reason to know that any
\nSupplier or Subcontractor used by Manufacturer is in breach of the Certification
\nor Manufacturing Agreement, as the case may be, Manufacturer shall immediately
\nnotify Company and Manufacturer shall, at its sole expense, take immediate
\naction to rectify such breach, including, where Company deems it necessary,
\nimmediate termination of its relationship with such Supplier or Subcontractor.
\nIf Manufacturer fails to take immediate action, Company shall have the right to
\nterminate this Manufacturing Agreement immediately. Manufacturer acknowledges
\nthat it shall remain primarily liable and completely obligated under all of the
\nprovisions of this Agreement in respect of such subcontracting and supplier
\narrangement.<\/p>\n
(e) Manufacturer certifies that it has in effect a program of monitoring
\nits subcontractors and suppliers and other designated contract facilities which
\nmanufacture TOMMY HILFIGER brand merchandise which is sufficient to ensure their
\ncompliance with the Code and all applicable state, local and foreign laws and
\nregulations pertaining to wages, overtime compensation, benefits, hours, hiring
\nand employment, workplace conditions and safety, the environment, collective
\nbargaining, freedom of association and that their products or and the components
\nthereof are made without the use of children (persons under the age of 15 or
\nyounger than the age for completing compulsory education, if that age is higher
\nthan 15), prison, indentured, exploited, bonded, forced or slave labor.<\/p>\n
(f) Manufacturer shall ensure that all merchandise manufactured hereunder
\nshall be manufactured in compliance with all federal, state and local laws which
\npertain to the manufacture of clothing, apparel, and other merchandise including
\nthe Flammable Fabrics Act, as amended, and regulations thereunder and
\nManufacturer guarantees, that with regard to all products, fabrics or related
\nmaterials used in the manufacture of the Products, for which flammability
\nstandards have been issued, amended or continued in effect under the Flammable
\nFabrics Act, as amended, reasonable and representative tests, as prescribed by
\nthe Consumer Product Safety Commission, have been performed which show that the
\nProducts at the time of their shipment or delivery conform to the above-
\nreferenced flammability standards as are applicable.<\/p>\n
(g) Manufacturer shall manufacture or cause to manufacture all Products
\n(including components thereof) manufactured in the United States, in compliance
\nwith all applicable requirements of Sections 6, 7, and 12 of the Fair Labor
\nStandards Act, as amended, and all regulations and orders of the United States
\nDepartment of Labor under Section 14 thereof, and applicable state and local
\nlaws pertaining to child labor, minimum wage and overtime compensation, and, if
\nthe Products are manufactured outside the United States, in compliance with all
\napplicable laws, including but not limited to, wage, overtime compensation,
\nbenefits, hour hiring and <\/p>\n
employment, workplace conditions and safety, environmental, collective
\nbargaining, freedom of association laws of the country of manufacture and
\nwithout the use of children (persons under the age of fifteen (15) or younger
\nthan the age for completing compulsory education, if that age is higher than
\n15), prison indentured, exploited, bonded, forced or slave labor.<\/p>\n
(h) Manufacturer acknowledges that it has read and understands Company’s
\npolicy with regard to the manufacture of Products for Company. Manufacturer
\nfurther agrees that it shall, simultaneous to executing this Agreement, execute
\nand abide by the Certification, shall execute and abide by all Certifications
\nprovided by Company from time to time. Failure by Manufacturer to execute and
\nabide by such Certification shall be grounds for immediate termination of this
\nAgreement by Company.<\/p>\n
(i) Manufacturer shall not utilize or permit any subcontractors or
\nsuppliers to utilize in the manufacture or treatment of any of the Products
\n(including the components thereof) manufactured hereunder any Azo dyes that can
\nbe split into any of the following amines:<\/p>\n
\n\n CAS # CAS #
\n —– —–
\n
\n4-Aminobiphenlyl 92-67-1 3,3′-Dimethoxybenzidine 119-90-4
\nBenzidine 92-87-5 3,3′-Dimethylbenzadine 119-93-7
\n4-Chloro-o-toluidine 95-69-2 3’3′-Dimethyl- 838-88-0
\n2-Naphthylamin 91-59-8 4,4’diaminodiphenylmethane
\no-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
\n2-amino-4-nitrotoluol 99-55-8 4,4’Methaylen-bis-(2-chloranilin) 101-14-4
\np-Chloroaniline 1-6-47-8 4,4’Oxydianiline 101-80-4
\n2,4-Diaminoanisole 615-05-4 4,4’Thiodianiline 139-65-1
\n4,4′-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
\n3,3′-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
\nAminoanabenzane 2,4,5-Trimethylaniline 137-17-7
\n o-Anisidine
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n (j) Manufacturer’s use or any of Manufacturer’s subcontractors or
\nsuppliers use of the following chemicals in connection with the manufacture or
\ntreatment of any of the Products (including the components thereof) manufactured
\nhereunder, shall be in accordance with the following standards or such other
\nstandards Company may designate from time to time:<\/p>\n
(i) Formaldehyde: Must be less than 300 p.p.m. when tested by the
\n ————
\n Acetylacetone method in accordance with Japanese law112.<\/p>\n
(ii) Pentachlorophenol (Pesticides): Must be less than 5 p.p.m.
\n —————————— <\/p>\n
(iii) Nickel: In the event any metal parts of a garment or other
\n ——
\n merchandise coming into contact with the skin, contain nickel
\n in excess of 0.5 micrograms <\/p>\n
per square centimeter\/week, Company must be so notified and
\n special warning labels need to be attached to the garment.<\/p>\n
5. INSPECTION.
\n ———- <\/p>\n
(a) Manufacturer shall arrange for and provide access to Company’s and
\nTHLI’s representative, including, but not limited to, any independent entity
\ndesignated by Company or THLI’s legal representative, to: (i) Manufacturer’s
\nmanufacturing facility, residential facilities (if any) and any manufacturing
\nand\/or residential facility operated by any of Manufacturer’s Subcontractors;
\n(ii) Manufacturer’s books, records and documents necessary to evidence
\nManufacturer’s compliance with the code and all applicable laws, rules and
\nregulations including, but not limited to, employee wages, employee timecards,
\nwithholding rates and deductions, worker’s contracts and\/or agreements, any
\ncompany policies affecting employees, evidence of employee age, shipping
\ndocuments, cutting reports and other documentation relating to the manufacture
\nand shipment of the Products; and (iii) Manufacturer’s books, records and
\ndocuments relating to the use of chemicals and dyestuffs in the fabrics, trims,
\ngarments and other merchandise manufactured hereunder. For purposes of this
\nParagraph, all such books, records and Manufacturer shall maintain documents in
\na secure and readily accessible location for a period of three (3) years from
\ntheir creation.<\/p>\n
(b) The access provided by Manufacturer as set forth in Paragraph 5(a)
\nabove, shall include Company’s and THLI’s right to inspect, test, and take
\nsamples of the Products, whether finished or semi-finished, at any time during
\nthe manufacturing process to ensure that the manufacture of the Products is in
\naccordance with the terms and restrictions herein contained.<\/p>\n
(c) Company shall have the right to reject any Products or packaging not
\nmeeting the standards described in Paragraph 1 above. Manufacturer shall not
\nhave the right to sell or otherwise distribute any rejected Products or
\npackaging. All such products shall be destroyed according to methods and
\nprocedures provided by Company.<\/p>\n
6. SHIPPING LEGEND. All commercial invoices (bills of lading) which accompany
\n —————
\nall Products must include the following language (either pre-printed or
\n“stamped”):<\/p>\n
“We hereby certify that the merchandise (including components
\n thereof) covered by this shipment was manufactured in compliance
\n with the Tommy Hilfiger Supplier Code of Conduct and: (1) if the
\n merchandise was manufactured in the United States, it was
\n manufactured in compliance with (a) Section 6, 7, and 12 of the
\n Fair Labor Standards Act, as amended, and all regulations and
\n orders of the United States Department of Labor under Section 14
\n thereof, and (b) state and local laws pertaining to child labor,
\n minimum wage and overtime compensation; or (2) if the merchandise
\n was manufactured outside the United States, it was manufactured
\n in compliance with the<\/p>\n
wage and hour laws of the country of manufacture and without the
\n use of children (persons under the age of 15 or younger than the
\n age for completing compulsory education, if that age is higher
\n than 15), prison, indentured, exploited, bonded, forced or slave
\n labor. We further certify that we have in effect a program of
\n monitoring our subcontractors and suppliers and other designated
\n contract facilities which manufacture TOMMY HILFIGER brand
\n merchandise for compliance with the foregoing. We also certify
\n that the merchandise is in compliance with all laws governing the
\n designation of country or origin and, if applicable, is being
\n shipped under legally issued and valid export license or visa.”<\/p>\n
Any merchandise shipped that is not accompanied by a commercial invoice
\nbearing the required language will be subject to rejection and returned at
\nManufacturer’s expense and Manufacturer may be charged for any and all costs
\nthat are incurred by Company due to the rejection, including, but not limited
\nto, damages sustained as a result of Company’s liability to customers, any
\nresulting fines and penalties and attorneys’ fees for said rejected goods. Such
\nrejected goods may not be sold or distributed by Manufacturer to any entity
\nother than Company.<\/p>\n
7. USE OF TRADEMARKS; TRADEMARKS.
\n —————————– <\/p>\n
(a) Manufacturer shall not use the Trademarks, in any manner whatsoever
\n(including without limitation, for advertising, promotion and publicity
\npurposes), without obtaining the prior written approval of THLI, which may be
\nwithheld in THLI’s sole discretion. In any event, Manufacturer shall not at any
\ntime use, promote, advertise, display or otherwise commercialize the Trademarks
\nor any material utilizing or reproducing the Trademarks in any manner.
\nManufacturer shall not make any reference in its business materials, advertising
\nor in any of its business activities to the fact that Manufacturer is being
\ncontracted by Company to manufacture merchandise under the Tommy Hilfiger label.<\/p>\n
(b) The Trademarks will appear on all of the Products and all packaging in
\nthe manner provided by Company.<\/p>\n
(c) Manufacturer’s use of the Trademarks shall inure to the benefit of
\nTHLI. Manufacturer shall take any and all steps required by THLI and the law to
\nperfect THLI’s rights therein.<\/p>\n
8. PROPERTY OF OWNER.
\n —————– <\/p>\n
(a) Manufacturer recognizes the great value of the goodwill associated
\nwith the Trademarks and the identification of the Products with the Trademarks
\nand acknowledges that the Trademarks and all rights therein and goodwill
\npertaining thereto belong exclusively to THLI. Manufacturer further recognizes
\nand acknowledges that a breach by Manufacturer of any of its<\/p>\n
covenants, agreements or other undertakings hereunder will cause THLI
\nirreparable damage, which cannot be adequately remedied in damages in an action
\nat law, and may, in addition thereto, constitute an infringement of THLI’s
\nrights in the Trademarks, thereby entitling THLI to equitable remedies, costs
\nand reasonable attorney’s fees.<\/p>\n
(b) To the extent any rights in and to the Trademarks are deemed to accrue
\nto Manufacturer, Manufacturer hereby assigns any and all such rights, at such
\ntime as they may be deemed to accrue, including the related goodwill, to THLI.<\/p>\n
(c) Manufacturer shall (i) never challenge the validity of THLI’s
\nownership in and to the Trademarks or any application for registration thereof,
\nor any trademark registration thereof and (ii) never contest the fact that
\nManufacturer’s rights under this Agreement are solely those of a manufacturer
\nand terminate upon expiration of this Agreement. Manufacturer shall, at any
\ntime, whether during or after the term of the Agreement, execute any documents
\nreasonably requested by THLI to confirm THLI’s ownership rights. All rights in
\nthe Trademarks other than those specifically granted herein are reserved by THLI
\nfor its own use and benefit.<\/p>\n
(d) Without limiting the generality of any other provision of this
\nAgreement, Manufacturer shall not (i) use the Trademarks, in whole or in part, s
\na corporate or trade name or (ii) join any name or names with the Trademarks so
\nas to form a new trademark. Manufacturer agrees not to register, or attempt to
\nregister, the Trademarks in its own name or any other name, anywhere in the
\nworld.<\/p>\n
(e) All provisions of this paragraph shall survive the expiration or
\ntermination of this agreement.<\/p>\n
9. TRADEMARK PROTECTION.
\n ——————– <\/p>\n
(a) In the event that Manufacturer learns of any infringement or imitation
\nof the Trademarks or of any use by any person or entity of a trademark similar
\nto the Trademarks, it shall promptly notify Company and thereupon, Company shall
\nso notify THLI. THLI shall take such action as it deems advisable for the
\nprotection of its rights in and to the Trademark and, if requested to do so by
\nTHLI, Manufacturer shall cooperate with THLI in all respects. In no event,
\nhowever, shall THLI be required to take any action if it deems it inadvisable to
\ndo so.<\/p>\n
(b) THLI shall defend, at its cost and expense, and with counsel of its
\nown choice, any action or proceeding brought against Manufacturer for alleged
\ntrademark infringement arising out of Manufacturer’s use of the Trademarks in
\naccordance with the provisions of this Agreement.<\/p>\n
(c) Manufacturer shall cooperate with THLI in the execution, filing and
\nprosecution of any trademark, copyright or design patent applications that THLI
\nmay desire to file and for that purpose Manufacturer shall supply to THLI from
\ntime to time such samples as may be reasonably required.<\/p>\n
(d) All provisions of this paragraph shall survive the expiration or
\ntermination of this Agreement.<\/p>\n
10. TRANSSHIPMENT. Transshipment is an illegal practice of falsely documenting
\n ————-
\nthe country of origin of the raw materials used to manufacture the Products and
\nthe finished Products shipped to the United States in order to evade quota
\nrestraints on the country of actual production and the shipment of products
\nunder counterfeit export licenses or visas. Manufacturer acknowledges that
\ntransshipment, in any form, violates U.S. federal law, that Company and THLI
\nwill review all documents received from Manufacturer to assure the veracity and
\nthe authenticity of the sources of Products and that, upon indication of
\ntransshipment of the Products by Manufacturer, Company or THLI reserves the
\nright to immediately terminate this Agreement and pursue available remedies
\nagainst Manufacturer.<\/p>\n
11. SECONDS, THIRDS OR EXCESS GOODS. Manufacturer shall not have the right to
\n ——————————-
\nsell any Products or packaging which are determined to be seconds, thirds or are
\nin excess of the amount of the Products requested by Company. Company shall
\npurchase all seconds, thirds, or excess products, including trim, at a
\nreasonable fair market price. Company shall have the right to inspect any
\nseconds, thirds or excess Products to ensure that they comply with the terms of
\nthis Agreement.<\/p>\n
12. STOLEN GOODS OR DAMAGED GOODS. Manufacturer will provide Company with
\n —————————–
\nimmediate notice of any stolen Products or damaged Products including Products
\nthat were then in production. With regard to damaged Products, Manufacturer
\nshall not have the right to sell any damaged Products. With regard to stolen
\nProducts, Manufacturer shall cooperate with Company with respect to any action
\nregarding the stolen Products.<\/p>\n
13. DESIGN OWNERSHIP. All rights, including without limitation, copyright,
\n —————-
\ntrade secret and design patent, to designs for the Products including, without
\nlimitation, artwork, prints, patterns, package designs, labels, advertising or
\npromotional materials or any other designs using or used on or affixed thereto,
\nand to any package design, bearing the Trademarks shall, as between the parties
\nhereto be the property of THLI. All Products manufactured from designs
\nsubmitted by Manufacturer and approved by THLI shall bear the Trademarks.<\/p>\n
14. CONFIDENTIALITY. During the term of this Agreement and thereafter, each
\n —————
\nparty shall keep strictly secret and confidential any and all information
\nacquired from the other party hereto or its designee and shall take all
\nnecessary precautions to prevent unauthorized disclosure of such information.
\nManufacturer acknowledges that it will receive from Company prints, designs,
\nideas, sketches, and other materials which Company and THLI intend to use on or
\nin connection with lines of merchandise which have not yet been put into the
\nchannels of distribution. The parties recognize that these materials are
\nvaluable property of THLI. Manufacturer acknowledges the need to preserve the
\nconfidentiality and secrecy of thee materials and agrees to take all necessary
\nsteps to ensure that use by it or by its employees and\/or agents will in all
\nrespects preserve such confidentiality and secrecy. Manufacturer shall take all
\nreasonable precautions to protect the secrecy of the materials, <\/p>\n
samples, and designs prior to their commercial distribution or the showing of
\nsamples for sale, and shall not manufacture any merchandise employing or adapted
\nfrom any of said designs except for Company, THLI or its affiliates or
\ndesignees.<\/p>\n
15. FORCE MAJEURE.
\n ————- <\/p>\n
(a) No failure or omission by either of the parties to perform any of its
\nobligations under this Agreement shall be deemed a breach of this Agreement if
\nsuch failure or omission is the result of acts of God, war, riot, accidents,
\ncompliance with any action or restriction of any government or agency thereof,
\nstrokes or labor disputes, inability to obtain suitable raw materials, fuel,
\npower or transportation, or any other factor or circumstance beyond the control
\nof the party, which is not attributable to the negligence of such party.<\/p>\n
(b) The entering of this Agreement by Manufacturer does not violate any
\nagreements, rights or obligations existing between Manufacturer and any other
\nperson, entity, or corporation.<\/p>\n
(c) It is not engaged in and will not engage in any activities which are in
\nviolation of any applicable domestic, foreign or international laws, rules or
\nregulations, including, without limitation, laws, rules or regulations
\ngoverning labor, the environment, the manufacture and sale of goods, U.S.
\nCustoms laws or illegal transshipment. Company maintains a policy against
\nengaging in any illegal activities and will not buy or sell products provided
\nthroughout the use of any unlawful or unethical practices.<\/p>\n
(d) It accurately states the country of origin on all Products, that it
\ndoes not and will not transship, and it will act to stop or prevent any known
\nillegal transshipment activity.<\/p>\n
(e) It shall not utilize, nor permit any of its subcontractors or suppliers
\nto utilize in the manufacture or treatment of any of the Products (including the
\ncomponents thereof) manufactured hereunder any AZO dyes that can be split into
\nany of the amines set forth in Paragraph 3(i) above.<\/p>\n
(f) Its use or any of its subcontractors or suppliers use of the chemicals
\nset forth in Paragraph 3(i) above, in connection with the manufacture or
\ntreatment of any of the Products (including the components thereof) manufactured
\nhereunder, shall be in accordance with the standards set forth in Paragraph 3(i)
\nor such other standards as Company may designate from time to time.<\/p>\n
17. COMPANY’S WARRANTIES AND REPRESENTATIONS. Company warrants and represents
\n —————————————-
\nthat:<\/p>\n
(a) it has, and will have throughout the term of this Agreement, the right
\nto authorize use of the Trademark to Manufacturer in accordance with the terms
\nand provisions of this Agreement; and<\/p>\n
(b) the entering of this Agreement by Company does not violate any
\nagreements, rights or obligations existing between Company and any other person,
\nentity, or corporation.<\/p>\n
18. INDEMNIFICATIONS.
\n —————- <\/p>\n
(a) Company hereby indemnifies Manufacturer and shall hold it harmless from
\nany loss, liability, damage, cost or expense (including reasonable attorney’s
\nfees) arising out of any claims or suits which may be brought against
\nManufacturer by reason of the breach by Company of the warranties or
\nrepresentations as set forth in Paragraph 17 above, provided that Manufacturer
\ngives prompt written notice, and full cooperation and assistance to Company
\nrelative to any such claim or suit, and that Company shall have the option to
\nundertake and conduct the defense of any suit so brought. Manufacturer shall
\ncooperate fully in all respects with Company in the conduct and defense of said
\nsuit and\/or proceedings.<\/p>\n
(b) Manufacturer indemnifies and agrees to hold Company harmless from any
\nloss, liability, damage, cost or expense (including reasonable attorney’s fees),
\narising out of (i) any breach of the terms herein contained; (ii) any claims or
\nsuits by reason of any unauthorized use by Manufacturer in connection with the
\nProducts or the Trademarks covered by this Agreement; (iii) Manufacturer’s
\nnoncompliance with any applicable federal, state, or local law or with any other
\napplicable governmental units or agency’s rules, regulations; and (iv) any
\nalleged defects and\/or inherent dangers in Products or use thereof.<\/p>\n
(c) If reasonably available in the country in which Manufacturer operates
\nits factory, Manufacturer agrees to obtain, at its own expense, product
\nliability insurance providing adequate protection for Company and Manufacturer
\nagainst any claims or suits in an amount no less than US$3,000,000. If
\napplicable, within thirty (30) days from the date hereof, Manufacturer
\nundertakes to submit to Company a fully paid policy or Certificate of Insurance
\nnaming Company as an insured party, and requiring that the insurer shall not
\nterminate or materially modify such without written notice to Company of at
\nleast twenty (20) days.<\/p>\n
19. TERMINATION.
\n ———– <\/p>\n
(a) Company shall have the right to terminate this Agreement immediately
\nupon written notice to Manufacturer if Manufacturer breaches any of its
\nobligations under this Agreement or such other occurrences as outlined below,
\nand such breach remains uncured or cannot be cured by Manufacturer within ten
\n(10) days from receipt of notice;<\/p>\n
(b) Company shall have the right to terminate this Agreement immediately
\nupon written notice to Manufacturer, if Manufacturer is found at any time to be
\nin breach of the representation made in Paragraph 16(e) or if any governmental
\nagency or other body or office or official vested with appropriate authority
\ndeems the Products to be harmful or defective in any way, mann or form, or are
\nbeing sold or distributed in contravention of applicable laws and regulations or
\nin a manner likely to cause harm;<\/p>\n
(c) Company shall have the right to terminate this Agreement immediately
\nupon written notice to Manufacturer, if Manufacturer manufactures the Products
\nwithout the prior written approval of Company as provided herein;<\/p>\n
(d) Company shall have the right to terminate this Agreement upon ten (10)
\ndays written notice to Manufacturer, if Manufacturer is unable to pay its debts
\nwhen due, or makes any assignments for the benefit of creditors, or files any
\npetition under the bankruptcy or insolvency laws of any jurisdiction, country or
\nplace, or has or suffers a receiver or trustee to be appointed for its business
\nor property, or is adjudicated a bankrupted or an insolvent;<\/p>\n
(e) Company shall have the right to terminate this Agreement upon ten (10)
\ndays written notice to Manufacturer, if Manufacturer fails to make timely
\ndelivery of the Products; or<\/p>\n
(f) Notwithstanding the foregoing provisions, Company shall have the right
\nto terminate this Agreement, with or without cause, upon thirty (30) days notice
\nto Manufacturer, providing, however, that, upon written approval by Company,
\nManufacturer shall have the right to complete any work then in progress.<\/p>\n
20. ACTS UPON EXPIRATION OR TERMINATION OF THIS AGREEMENT.
\n —————————————————– <\/p>\n
(a) Upon and after the expiration or termination of this Agreement,
\nManufacturer agrees not to make reference in its advertising or its business
\nmaterials to having been formerly associates with Company or the Trademarks.<\/p>\n
(b) Upon and after the expiration or termination of this Agreement,
\nManufacturer will refrain from further use of the Trademarks or of anything
\nconfusingly similar thereto, in connection with the manufacture of any products.
\nAdditionally, Manufacturer shall immediately return all originals and copies of
\nall sketches, patterns, prototypes, samples or other materials relating to the
\nProducts to Company.<\/p>\n
(c) In the event of expiration or termination of this Agreement, as herein
\nprovided, with the exception of the Products which Manufacturer may, with
\nCompany’s consent, ship to satisfy any unfilled, confirmed orders for the
\ncurrent season it had received prior to said expiration or termination, Company
\nshall have the prior right and option to purchase any or all of the Products and
\npackaging materials, as then in Manufacturer’s possession or carried on its
\nbooks of account. Upon such termination or expiration, Manufacturer shall
\nimmediately cause physical inventories to be taken of (i) Products on hand; (ii)
\nProducts in the process of manufacture; and (iii) all packaging materials, which
\ninventories shall be reduced to writing and a copy thereof shall be delivered to
\nCompany no later than fifteen (15) days from termination or expiration. Written
\nnotice of the taking of each inventory shall be given to Company at least forty-
\neight (48) hours prior thereto. Company shall have the right to be present at
\nsuch physical inventory or to take its own inventory, and to exercise all rights
\nit has available with respect to the examination of Manufacturer’s books and<\/p>\n
records. If Manufacturer does not allow Company to take such inventory, it
\nshall have no right to sell the remaining Products without Company’s prior
\napproval.<\/p>\n
(d) Manufacturer recognizes that any sale of the Products upon termination
\nor expiration, would cause irreparable damage to the prestige of Company and to
\nthe Trademarks, and to the goodwill pertaining thereto.<\/p>\n
(e) Upon expiration or termination of this Agreement, Manufacturer shall
\ncease the manufacture of Products All the Products set forth on the inventories
\nreferred to in subdivision (i) and (ii) of Paragraph 20(c) which are not
\npurchased by Company pursuant to such paragraph may be sold subject to Company’s
\nprior right to approve the customers in writing and the terms and conditions of
\neach sale. Such sale shall otherwise be strictly in accordance with the terms,
\ncovenants and conditions of this Agreement as though the Agreement had not
\nexpired or terminated. In no event shall Manufacturer sell any Products to any
\nthird party without the prior written approval of Company.<\/p>\n
21. NOTICES. All notices which either party hereto is required or may desire
\n ——-
\nto give shall be given by addressing the same to the address hereinafter in this
\nparagraph, or at such other address as may be designated in writing by any party
\nin a notice to the other given in the manner prescribed in this paragraph. All
\nsuch notices shall be deemed to be sufficiently given five (5) days after the
\nmailing by registered or certified mail, or in the date of electronic facsimile
\nfor which the sender obtains a confirmation of successful transmission. The
\naddress to which any such notices shall be given are the following:<\/p>\n
TO COMPANY: TO MANUFACTURER:<\/p>\n
22. NO PARTNERSHIP, ETC. This Agreement does not constitute and shall not be
\n ——————–
\nconstrued as a partnership or joint venture between Company and Manufacturer.
\nNeither party shall have any right to obligate or bind the other party in any
\nmanner whatsoever, and nothing herein contained shall give, or is intended to
\ngive, any rights of any kind to any third persons.<\/p>\n
23. NON-ASSIGNABILITY, ETC. This agreement shall bind and inure to the benefit
\n ———————–
\nof Company and its successors and assigns. This Agreement is personal to
\nManufacturer, and Manufacturer shall not transfer or sublicense its rights
\nhereunder and neither this Agreement nor any of the rights of Manufacturer
\nhereunder shall be sold, transferred or assigned by Manufacturer and no rights
\nhereunder shall evolve by operation of law or otherwise upon any receiver,
\nliquidator, trustee or other party.<\/p>\n
24. SEVERABILITY. If any provision or any portion of this Agreement shall be
\n ————
\nconstrued to be illegal, invalid, or unenforceable, such shall be deemed
\nstricken and deleted from this Agreement to the same extent and effect s if
\nnever incorporated herein, but all other provisions of this Agreement and
\nremaining portion of any provision which is illegal, invalid or unenforceable in
\npart shall <\/p>\n
continue in full force and effect.<\/p>\n
25. HEADINGS. The headings of the Paragraphs of this Agreement are for
\n ——–
\nconvenience only and shall in no way limit or affect the term or conditions of
\nthis Agreement.<\/p>\n
26. COUNTERPARTS. This Agreement may be executed in two (2) or more
\n ————
\ncounterparts, each of which shall be deemed an original, but all of which
\ntogether shall constitute one and the same instrument.<\/p>\n
27. CONSTRUCTION. This Agreement shall be construed in accordance with the
\n ————
\nlaws of the State of New York of the United States of America with the same
\nforce and effect as if fully executed and to be performed therein.<\/p>\n
28. JURISDICTION. The parties hereby consent to the exclusive jurisdiction of
\n ————
\nthe United States District Court for the Southern District of New York and of
\nany of the courts of the State of New York in any dispute arising under this
\nAgreement and agree further that service of process or notice in any such
\naction, suit or proceeding shall be effective if in writing and delivered in
\nperson or sent as provided in Paragraph 21. Hereof.<\/p>\n
29. WAIVER, MODIFICATION, ETC. No waiver, modification or cancellation of any
\n ————————–
\nterm or condition of this Agreement shall be effective unless executed in
\nwriting by the party charged therewith. No written waiver shall excuse the
\nperformance of any acts other than those specifically referred to herein. The
\nfact that Company has not previously insisted upon Manufacturer expressly
\ncomplying with any provision of this Agreement shall not be deemed to be a
\nwaiver of Company’s future right to require compliance in respect thereof and
\nManufacturer specifically acknowledges and agrees that the prior forbearance in
\nrespect of any act, term or condition shall not prevent Company from
\nsubsequently requiring full and complete compliance thereafter.<\/p>\n
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
\ndate first written above.<\/p>\n
____________________________ _______________________________
\n[LICENSEE NAME] [MANUFACTURER NAME]
\nBy: ________________________ By: ___________________________
\nName: ______________________ Name: _________________________
\nTitle: _____________________ Title: ________________________<\/p>\n
Addendum A To Third Party Manufacturing Agreement
\n Tommy Hilfiger Corporation
\n ————————–
\n Supplier Code of Conduct
\n ————————<\/p>\n
We, at the Tommy Hilfiger Corporation (hereinafter “Tommy Hilfiger”) are proud
\nof our tradition of conducting our business in accordance with the highest
\nethical standards and in compliance with the laws of the United States and of
\nthe countries in which we produce, buy and sell our products. Tommy Hilfiger is
\ncommitted to legal compliance and ethical business practices in all operations
\nand seeks to do business with suppliers who share that commitment. Tommy
\nHilfiger actively seeks to engage as its suppliers, companies that offer their
\nworkers safe and healthy workplaces.<\/p>\n
Tommy Hilfiger will not tolerate exploitative or abusive conditions once known.
\nThe Tommy Hilfiger Supplier Code of Conduct (hereinafter the “Code of Conduct”)
\ndefines our minimum expectations. No Code can be all inclusive, but we expect
\nour suppliers to act reasonably in all respects and to ensure that no abusive,
\nexploitative or illegal conditions exist at their workplaces. Tommy Hilfiger
\nrequires its suppliers to extend principles of fair and honest dealing to all
\nothers with whom they do business, including employees, subcontractors and other
\nthird parties. We also require our suppliers to ensure and to certify to us
\nthat no abusive, exploitative or illegal conditions exist at the workplaces of
\ntheir suppliers and subcontractors. Tommy Hilfiger will only do business with
\nsuppliers who obey the laws of the country in which they operate and the
\nprinciples expressed in this Code of Conduct.<\/p>\n
Tommy Hilfiger will only do business with suppliers who have certified to us
\nthat their business practices are lawful, ethical and in compliance with the
\nprinciples set forth in this Code of Conduct. Moreover, Tommy Hilfiger will
\nonly do business with suppliers who have agreed to be subjected to the scrutiny
\nof the Tommy Hilfiger supplier Monitoring Program under which they will be
\ninspected and evaluated to ensure their compliance with this Code of Conduct.<\/p>\n
Forced Labor: Tommy Hilfiger will not purchase products or components thereof
\n————
\nfrom suppliers that use forced labor, prison labor, indentured labor or
\nexploited bonded labor, or permit their suppliers to do so.<\/p>\n
Child Labor: Tommy Hilfiger will not purchase products or components thereof
\n———–
\nmanufactured by persons younger than 15 years of age or younger than the age of
\ncompleting compulsory education in the country of manufacture where such age is
\nhigher than 15.<\/p>\n
Harassment or Abuse: Tommy Hilfiger suppliers and subcontractors must treat
\n——————-
\ntheir employees with respect and dignity. No employee shall be subject to
\nphysical, sexual or psychological harassment or abuse.<\/p>\n
Nondiscrimination: Tommy Hilfiger suppliers and subcontractors shall not subject
\n—————–
\nany person to discrimination in employment, including hiring, salary, benefits,
\nadvancement, discipline, termination or retirement, on the basis of gender, race
\nreligion, age, disability, sexual orientation, <\/p>\n
nationality, political opinion, or social or ethnic origin.<\/p>\n
Health and Safety: Tommy Hilfiger suppliers and subcontractors shall provide a
\n—————–
\nsafe and healthy working environment to prevent accidents and injury to health
\narising out of, linked with, or occurring in the course of work or as a result
\nof the operation of employer facilities. Employers must fully comply with all
\napplicable workplace conditions, safety and environmental laws.<\/p>\n
Freedom of Association: Tommy Hilfiger suppliers and subcontractors shall
\n———————-
\nrecognize and respect the right of employees to freely associate in accordance
\nwith the laws of the countries in which they are employed.<\/p>\n
Wages and Benefits: Tommy Hilfiger suppliers and subcontractors recognize that
\n——————
\nwages are essential to meeting employees’ basic needs. Tommy Hilfiger suppliers
\nand subcontractors shall pay employees at least the minimum wage required by
\nlocal law regardless of whether they pay by the piece or by the hour and shall
\nprovide legally mandated benefits.<\/p>\n
Work Hours: Tommy Hilfiger suppliers and subcontractors shall not require their
\n———-
\nemployees to work more than the limits on regular and overtime hours allowed by
\nthe law of the country of manufacture. Except under extraordinary business
\ncircumstances, Tommy Hilfiger suppliers’ and subcontractors’ employees shall be
\nentitled to one day off in every seven day period. Tommy Hilfiger suppliers and
\nsubcontractors must inform their workers at the time of their hiring if
\nmandatory overtime is a condition of their employment. Tommy Hilfiger suppliers
\nand subcontractors shall not compel their workers to work excessive overtime
\nhours.<\/p>\n
Overtime Compensation: Tommy Hilfiger suppliers’ and subcontractors’ employees
\n———————
\nshall be compensated for overtime hours at such premium rate as is legally
\nrequired in the country of manufacture, or, in countries where such laws do not
\nexist, at a rate at least equal to their regular hourly compensation rate.<\/p>\n
Contract Labor: Tommy Hilfiger suppliers or subcontractors shall not use workers
\n————–
\nobligated under contracts which exploit them, which deny them the basic legal
\nrights available to people and to workers within the countries in which they
\nwork or which are inconsistent with the principles set forth in this Code of
\nConduct.<\/p>\n
Legal and Ethical Business Practices: Tommy Hilfiger suppliers and
\n————————————
\nsubcontractors must fully comply with all applicable local, state, federal,
\nnational and international laws, rules and regulations including, but not
\nlimited to, those relating to wages, hours, labor, health and safety, and
\nimmigration. Tommy Hilfiger suppliers and subcontractors must be ethical in
\ntheir business practices.<\/p>\n
Penalties: Tommy Hilfiger reserves the right to terminate its business
\n———
\nrelationship with any supplier who violates this Code of Conduct or whose
\nsuppliers or subcontractors violate this Code of Conduct. Tommy Hilfiger
\nreserves the right to terminate its business relationship with suppliers who<\/p>\n
fail to provide written confirmation to Tommy Hilfiger that they have a program
\nin place to monitor their suppliers and subcontractors for compliance with this
\nCode of Conduct.<\/p>\n
Addendum B
\n To Third Party Manufacturing Agreement
\n SUPPLIER’S CERTIFICATION
\n ————————<\/p>\n
In consideration of Tommy Hilfiger U.S.A., Inc. (“THUSA”) placing orders for the
\nmanufacture of TOMMY HILFIGER brand merchandise with us in the future, and in
\ncompliance with THUSA’s Manufacturing Agreement with us (the “Agreement”), we
\nhereby certify that:<\/p>\n
I. Any merchandise (including components thereof) we manufacture or cause to
\nbe manufactured under the Agreement will be manufactured in compliance with: (1)
\nall applicable requirements of Sections 6, 7, and 12 of the Fair Labor Standards
\nAct, as amended, and all regulations and orders of the United States Department
\nof Labor under Section 14 thereof, and applicable state and local laws
\npertaining to child labor, minimum wage and overtime compensation, and, if the
\nmerchandise is manufactured outside the United States, it will be manufactured
\nin compliance with the wage, overtime compensation, benefits, hour, hiring and
\nemployment, workplace conditions and safety, environmental, collective
\nbargaining, freedom of association laws of the country of manufacture and
\nwithout the use of children (persons under the age of 15 or younger than the
\nage for completing compulsory education, if that age is higher than 15), prison,
\nindentured, exploited, bonded, forced or slave labor; (2) we currently have in
\neffect and will maintain a program of monitoring all of our suppliers,
\nsubcontractors, subcontract sewing shops and other designated contract
\nfacilities producing TOMMY HILFIGER brand merchandise for compliance with (10)
\nabove; (3) we will obtain the signature of an authorized representative of our
\nsuppliers, subcontractors, subcontract sewing shops and other designated
\ncontract facilities producing TOMMY HILFIGER brand merchandise on a current
\nsupplier agreement, as provided by THUSA; and (4) within two (2) weeks of the
\nexecution of this Certification, we will provide to THUSA the names and
\naddresses of all of our suppliers, subcontractors, subcontract sewing shops and
\nother designated contract facilities producing TOMMY HILFIGER brand merchandise
\nunder the Agreement and al such merchandise shall be manufactured solely in
\nfactories (whether operated by our suppliers, subcontractors, subcontract sewing
\nshops or designated contract facilities) that have been inspected and approved
\nin writing by our authorized employee or agent; and (5) all shipping documents
\nwhich accompany all TOMMY HILFIGER brand merchandise will include the following
\nlanguage (either pre-printed or “stamped”):<\/p>\n
“We hereby certify that the merchandise (including
\n components thereof) covered by this shipment was, if
\n manufactured in the United States, in compliance with
\n all applicable requirements (1) of Sections 6, 7, and
\n 12 of the Fair Labor Standards Act, as amended and<\/p>\n
all regulations and orders of the United States
\n Department of Labor under Section 14 thereof; (2)
\n state and local laws pertaining to child labor,
\n minimum wage and overtime compensation; or if the
\n merchandise was manufactured outside the United
\n States, in compliance with the wage and hour laws of
\n the country of manufacture and without the use of
\n children (persons under the age of 15 or younger than
\n the age for completing compulsory education, if that
\n age is higher than 15), prison, indentured, exploited,
\n bonded, forced or slave labor; and for all
\n merchandise, wherever manufactured, in compliance
\n with the Tommy Hilfiger Supplier Code of Conduct.
\n We further certify that we have in effect a program of
\n monitoring our subcontractors and suppliers and other
\n designated contract facilities which manufacture
\n TOMMY HILFIGER brand merchandise which is
\n sufficient to ensure such entities’ compliance with the
\n foregoing. We also certify that upon importation (if
\n applicable) this shipment is in compliance with all
\n laws applicable to the designation of country of origin
\n and is being shipped under legally issued and valid
\n export license or visa.<\/p>\n
II. Neither we, nor any of our subcontractors or suppliers, will in the
\nmanufacture or treatment of any of the merchandise and Products (including the
\ncomponents thereof) manufactured hereunder use any Azo dyes that can be split
\ninto any of the following amines:<\/p>\n
CAS #
\n ——–
\n4-Aminobiphenlyl 92-67-1
\nBenzidine 92-87-5
\n4-Chloro-o-tolluidine 95-69-2
\n2-Naphthylamin 91-59-8
\no-Aminoazotoluol 97-56-3
\n2-amino-4-nitrotoluol 99-55-8
\np-Chloroaniline 106-47-8
\n2,4-Diaminoanisole 615-05-4
\n4,4′-Diaminodiphenylmethane 101-77-9
\n3,3′-Dimethozybenzidine 119-90-4
\n3,3′-Dimethylbenzadine 119-93-7
\n3,3′-Dimethyl-
\n4,4’Diaminodiphenylmethane 838-88-0
\np-Kresidin 120-71-8
\n4,4’Methaylen-bis-
\n(2-chloranilin) 101-14-4
\n4,4’Oxydianiline 101-80-4
\n4,4’Thiodianiline 139-65-1
\no-Toluidine 95-53-4<\/p>\n
2,4-Toluylenediamine 95-80-7
\n2,4,5-Trimethylaniline 137-17-7
\no-Anisidine<\/p>\n
and;<\/p>\n
III. We, and our subcontractors or suppliers, will only use the following
\nchemicals in connection with the manufacture or treatment of any of the
\nmerchandise and products (including the components thereof) manufactured
\nhereunder, in accordance with the following standards or any further standards
\nTHUSA designates from time to time:<\/p>\n
(i) Formaldehyde. Must be less than 300 p.p.m. when tested in the
\n ————
\nAcetylacetone method in accordance with Japanese law 112.<\/p>\n
(ii) Pentachlorophenol (Pesticides): Must be less than 5 p.p.m.
\n —————————— <\/p>\n
(iii) Nickel: In the event any metal parts of a garment or other
\n ——
\nmerchandise coming into contact with the skin, contain nickel in excess of 0.5
\nmicograms per square centimeter\/week, Company must be so notified and special
\nwarning labels need to be attached to the garment.<\/p>\n
[Name of your Company]<\/p>\n
Date: ___________________ By:<\/p>\n
[Authorized Signature]<\/p>\n
Print Name: <\/p>\n
EXHIBIT I<\/p>\n
SUPPLIER’S CERTIFICATION
\n ————————<\/p>\n
In consideration of T.H.M.J. INCORPORATED, (“THMJ”) placing orders for the
\nmanufacture of TOMMY HILFIGER brand merchandise with us in the future, and in
\ncompliance with THMJ’s Manufacturing Agreement with us (the “Agreement”), we
\nhereby certify that:<\/p>\n
I. Any merchandise (including components thereof) we manufacture or cause to
\nbe manufactured under the Agreement will be manufactured in compliance with: (1)
\nall applicable requirements of Section 6, 7, and 12 of the Fair Labor Standards
\nAct, as amended, and all regulations and orders of the United States Department
\nof Labor under Section 14 thereof, and applicable state and local laws
\npertaining to child labor, minimum wage and overtime compensation, and, if the
\nmerchandise is manufactured outside the United States, it will be manufactured
\nin compliance with the wage, overtime compensation, benefits, hour, hiring and
\nemployment, workplace conditions and safety, environmental, collective
\nbargaining, freedom of association laws of the country of manufacture and
\nwithout the use of children (persons under the age of 15 or younger than the age
\nof completing compulsory education, if that age is higher than 15), prison,
\nindentured, exploited, bonded, forced or slave labor; (2) we currently have in
\neffect and will maintain a program of monitoring all of our suppliers,
\nsubcontractors, subcontractor sewing shops and other designated contract
\nfacilities producing TOMMY HILFIGER brand merchandise for compliance with (1)
\nabove; (3) we will obtain the signature of an authorized representative of our
\nsuppliers, subcontractors, subcontractor sewing shops and other designated
\ncontract facilities producing TOMMY HILFIGER brand merchandise on a current
\nsupplier agreement, as provided by THMJ; (4) within two (2) weeks of the
\nexecution of this Certificate, we will provide to THMJ the names and addresses
\nof all of our suppliers, subcontractors, subcontractor sewing shops and other
\ndesignated contract facilities producing TOMMY HILFIGER brand merchandise under
\nthe Agreement and all such merchandise shall be manufactured solely in factories
\n(whether operated by our suppliers, subcontractors, subcontractor sewing shops
\nor designated contract facilities) that have been inspected and approved in
\nwriting by our authorized employee or agent; and (5) all shipping documents
\nwhich accompany all TOMMY HILFIGER brand merchandise will include the following
\nlanguage (either pre-printed or “stamped”):<\/p>\n
“We hereby certify that the merchandise (including
\n components thereof) covered by this shipment was, if
\n manufactured in the United States, in compliance with
\n all applicable requirements (1) of Sections 6, 7, and
\n 12 of the Fair Labor Standards Act, as amended and<\/p>\n
all regulations and orders of the United States
\n Department of Labor under Section 14 thereof; (2)
\n state and local laws pertaining to child labor,
\n minimum wage and overtime compensation; or if the
\n merchandise was manufactured outside the United
\n States, in compliance with the wage and hour laws of
\n the country of manufacture and without the use of
\n children (persons under the age of 15 or younger than
\n the age for completing compulsory education, if that
\n age is higher than 15), prison, indentured, exploited,
\n bonded, forced or slave labor; and for all
\n merchandise, wherever manufactured, in compliance
\n with the Tommy Hilfiger Supplier Code of Conduct.
\n We further certify that we have in effect a program of
\n monitoring our subcontractors and suppliers and other
\n designated contract facilities which manufacture
\n TOMMY HILFIGER brand merchandise which is
\n sufficient to ensure such entities’ compliance with the
\n foregoing. We also certify that upon importation (if
\n applicable) this shipment is in compliance with all
\n laws applicable to the designation of country of origin
\n and is being shipped under legally issued and valid
\n export license or visa.<\/p>\n
II. Neither we, nor any of our subcontractors or suppliers, will in the
\nmanufacture or treatment of any of the merchandise and Products (including the
\ncomponents thereof) manufactured hereunder use any Azo dyes that can be split
\ninto any of the following amines:<\/p>\n
CAS #
\n ——–
\n4-Aminobiphenlyl 92-67-1
\nBenzidine 92-87-5
\n4-Chloro-o-tolluidine 95-69-2
\n2-Naphthylamin 91-59-8
\no-Aminoazotoluol 97-56-3
\n2-amino-4-nitrotoluol 99-55-8
\np-Chloroaniline 106-47-8
\n2,4-Diaminoanisole 615-05-4
\n4,4′-Diaminodiphenylmethane 101-77-9
\n3,3′-Dimethozybenzidine 119-90-4
\n3,3′-Dimethylbenzadine 119-93-7
\n3,3′-Dimethyl-
\n4,4’Diaminodiphenylmethane 838-88-0
\np-Kresidin 120-71-8
\n4,4’Methaylen-bis-
\n (2-chloranilin) 101-14-4
\n4,4’Oxydianiline 101-80-4
\n4,4’Thiodianiline 139-65-1
\no-Toluidine 95-53-4<\/p>\n
2,4-Toluylenediamine 95-80-7
\n2,4,5-Trimethylaniline 137-17-7
\no-Anisidine<\/p>\n
and;<\/p>\n
III. We, and our subcontractors or suppliers, will only use the following
\nchemicals in connection with the manufacture or treatment of any of the
\nmerchandise and products (including the components thereof) manufactured
\nhereunder, in accordance with the following standards or any further standards
\nTHUSA designates from time to time:<\/p>\n
(i) Formaldehyde: Must be less than 300 p.p.m. when tested in by the
\n ————
\n Acetylacetone method in accordance with Japanese law 112.<\/p>\n
(ii) Pentachlorophenol (Pesticides): Must be less than 5 p.p.m.
\n —————————— <\/p>\n
(iii) Nickel: In the event any metal parts of a garment or other
\n ——
\nmerchandise coming into contact with the skin contain nickel in excess of 0.5
\nmicrograms per square centimeter\/week, Company must be so notified and special
\nwarning labels need to be attached to the garment.<\/p>\n
[Name of your Company]<\/p>\n
Date: _________________________ By:<\/p>\n
[Authorized Signature]<\/p>\n
Print Name:<\/p>\n
EXHIBIT J
\n ———
\n Illustrative List of Competitors
\n ——————————–<\/p>\n
————————————————————
\n Adidas Adrienne Vittadini
\n ————————————————————
\n AnnTaylor Anne Klein
\n ————————————————————
\n Armani AX (By Armani)
\n ————————————————————
\n Banana Republic Brooks Brothers
\n ————————————————————
\n Calvin Klein Carol Hochman
\n ————————————————————
\n Christian Dior CK
\n ————————————————————
\n D (By Donna Karan) DKNY
\n ————————————————————
\n Donna Karan Eddie Bauer
\n ————————————————————
\n Eileen West Ellen Tracy
\n ————————————————————
\n Facconable Greg Norman Collection
\n ————————————————————
\n Guess H (By Halston)
\n ————————————————————
\n Halston Hanro
\n ————————————————————
\n Harold’s Hugo Boss
\n ————————————————————
\n Izod J. Crew
\n ————————————————————
\n Joe Boxer Jones Apparel Group
\n ————————————————————
\n Kenneth Cole Laura Ashley
\n ————————————————————
\n Lauren Liz Claiborne
\n ————————————————————
\n LL Bean Mossimo
\n ————————————————————
\n Nautica Nike
\n ————————————————————
\n Old Navy Oscar
\n ————————————————————
\n Perry Ellis Polo
\n ————————————————————
\n Polo Sport Priamo
\n ————————————————————
\n R.A.L.P.H. Ralph Lauren
\n ————————————————————
\n Reebok Speedo
\n ————————————————————
\n State o Maine Tahari
\n ————————————————————
\n The Gap The Limited Companies
\n ————————————————————
\n Victoria’s Secret Wilke Rodriquez
\n ———————————————————— <\/p>\n
Any derivatives of the above-listed names are also deemed competitive.<\/p>\n
EXHIBIT K
\n ———<\/p>\n
STATEMENT OF ROYALTIES
\n ———————-<\/p>\n
TOMMY HILFIGER LICENSING, INC.
\n STATEMENT OF ROYALTIES
\n ———————-<\/p>\n
FOR___________________<\/p>\n
____TO____________19__
\n(QUARTER)<\/p>\n
LICENSEE NAME____________________________________________<\/p>\n
LICENSEE ADDRESS_________________________________________<\/p>\n
_________________________________________________________<\/p>\n
LICENSEE PRODUCT(S)______________________________________<\/p>\n
\n—————————————————————————————————————————
\n
\nCUSTOMER INVOICE ITEM UNIT NUMBER GROSS LESS LESS LESS <\/p>\nLESS NET SALES NET ROYALTY
\nNAME NUMBER STYLE NO. WHOLESALE SOLD SALES ALLOWANCES
\nMARKDOWNS TRADE RETURNS AMOUNT
\n PRICE DISCOUNTS <\/p>\n
—————————————————————————————————————————<\/p>\n
—————————————————————————————————————————
\n<\/c><\/c><\/c><\/c><\/c><\/c><\/c><\/c><\/s><\/table>\n
TOTALS<\/p>\n
SEND STATEMENT TO: TOMMY HILFIGER LICENSING, INC.
\n 913 N. Market Street
\n Wilmington, Delaware 19801
\n U.S.A.<\/p>\n
I CERTIFY THAT THE ABOVE IS ACCURATE<\/p>\n
SIGNATURE_______________________________<\/p>\n
TOMMY HILFIGER LICENSING, INC. Page______ of ________
\nDate__________________<\/p>\n
EXHIBIT L
\n ———<\/p>\n
CERTIFICATION<\/p>\n
EXHIBIT M
\n ———<\/p>\n
TOMMY HILFIGER LICENSING, INC. PAGE_______OF ______
\n DATE________________<\/p>\n
FORM MUST BE SUBMITTED COMPLETED SUBMIT TO THE ATTENTION OF:
\n TOMMY HILFIGER LICENSING, INC.
\n 913 N. MARKET STREET
\n WILMINGTON, DELAWARE 19801<\/p>\n
NAME OF SUBLICENSEE_____________________________________________________________<\/p>\n
LICENSED PRODUCT _______________________________________________________________<\/p>\n
SUBLICENSEE’S
\nADDRESS___________________________________________________________<\/p>\n
EXPENDITURE\\S REFLECT THE PERIOD _____ \/ _____ \/ _____ TO _____ \/_____ \/_____,
\nALL TEARSHEETS AND ADVERTISING BILLS MUST ACCOMPANY THIS FORM.<\/p>\n
DATE OF PUBLICATION OF DOLLAR AMOUNT
\nADVERTISING TYPE OF ADVERTISING Sublicensee SPENT
\n———– ——————- ——————<\/p>\n
——————————————————————————–<\/p>\n
——————————————————————————–<\/p>\n
——————————————————————————–<\/p>\n
——————————————————————————–<\/p>\n
EXHIBIT N
\n ———<\/p>\n
TOMMY HILFIGER LICENSING, INC. Page _________ of___
\n Date_________________<\/p>\n
FORM MUST BE SUBMITTED COMPLETED SUBMITTED TO THE ATTENTION OF:
\n TOMMY HILFIGER LICENSING, INC.
\n 913 N. MARKET STREET
\n WILMINGTON, DELAWARE 19801<\/p>\n
ADVERTISING APPROVAL FORM<\/p>\n
NAME OF LICENSEE__________________________________________________________<\/p>\n
LICENSED PRODUCT__________________________________________________________<\/p>\n
LICENSEE’S ADDRESS________________________________________________________<\/p>\n
CIRCLE THE FORM OF ADVERTISING WHICH IS BEING SUBMITTED: LABEL, HANGTAG,
\nBUSINESS CARDS, BUSINESS FORMS, RADIO SPOT, TV, FULL PAGE AD, 2 PAGE AD,
\nPACKAGING, DISPLAY, OTHER.<\/p>\n
PLACE ADVERTISING TO BE SUBMITTED HERE
\n OR AFFIX TO THIS PAGE<\/p>\n
1) USE PERIOD FROM \/ \/ TO \/ \/
\n —————— ———————–<\/p>\n
2) IF SUBMISSION IS LABELS OR HANGTAGS, PLEASE GIVE NAME AND ADDRESS OF
\n SUPPLIER<\/p>\n
____________________________________________________________________________<\/p>\n
3) IF AD IS TO RUN IN A PUBLICATION, PLEASE GIVE NAME OF PUBLICATION
\n____________________________________________________________________________<\/p>\n
APPROVED___________________ DISAPPROVED___________________<\/p>\n
COMMENTS________________________________________________________________________
\n________________________________________________________________________________
\n________________________________________________________________________________<\/p>\n
__________________ ___________________________
\nSIGNATURE OF LICENSEE SIGNATURE OF LICENSOR<\/p>\n
DATE RETURNED TO LICENSEE_______________<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7775],"corporate_contracts_industries":[9396],"corporate_contracts_types":[9613,9616],"class_list":["post-42476","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-hilfiger-tommy-corp","corporate_contracts_industries-consumer__clothing","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42476"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42476"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42476"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}