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FIRST AMENDMENT OF LICENSE
AGREEMENT
THIS FIRST AMENDMENT OF LICENSE AGREEMENT (the “
Amendment ”) is made as of the 26 day of September
2007 by and between: (1) KENNETH COLE PRODUCTIONS (LIC),
INC. , a Bahamas corporation with offices at Centreville House,
Second Terrace West, PO Box SS-6229, Nassau, Bahamas (the “
Licensor ”) (together with its parent, and their
subsidiaries, affiliates and principals, the “ Licensor
Group ”) and (2) BERNARD CHAUS, INC. , a New York
corporation with offices at 530 Seventh Avenue, New York, New York
10018 (the “ Licensee ”) (together with its
parent, and their subsidiaries, affiliates and principals, the
“ Licensee Group ”).
WITNESSETH:
WHEREAS, Licensor and Licensee entered into a certain
License Agreement (the “License Agreement”) dated as of
June 6, 2005 for the manufacture and distribution at wholesale of
Women’s Sportswear in the United States; and
WHEREAS , * * * ; and
WHEREAS , Licensor and Licensee now desire to * * and
otherwise modify the terms and conditions of the License as more
specifically set forth hereinafter.
NOW, THEREFORE , in consideration of the mutual covenants
and agreements hereinafter set forth and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Licensor and Licensee hereby agree as
follows:
1.
Effective as of January 1, 2008 (the “ Effective Date
”), the first sentence of Paragraph 1.1(a) is renumbered
1.1(a)(i). Additionally, the following language in new
Paragraph 1.1(a)(i) is deleted: “(the “ Licensed
Mark ” or Brand ”)”.
2.
As of the Effective Date, a new Paragraph 1.1(a)(ii) of the License
Agreement is added as follows:
Licensor hereby grants to Licensee an exclusive license in the
Territory to manufacture and distribute at wholesale Products (as
defined in Paragraph 1.1(a)(i) ) bearing the marks UNLISTED and
UNLISTED, A KENNETH COLE PRODUCTION (collectively, the “
UNLISTED Marks ” or “ the UNLISTED
Brands ”) solely during the Annual Period (as such
term is defined in Paragraph 2.1) beginning January 1, 2008 and
ending December 31, 2008 (the “ 2008 Annual Period
”) in * *. Solely during the 2008 Annual Period,
Licensor approves, as an accommodation to Licensee, a one-time
allowance for Licensee to make Net Sales (as such term is defined
in Paragraph 8.1 of the Amendment) of Articles bearing the UNLISTED
Marks of up to * * * *. A fter the 2008 Annual Period ,
Licensee may, from time to time, * * * . Licensor further
agrees that during the Initial Term hereof Licensor shall not grant
a license for the manufacture, distribution or sale of Products
bearing the Unlisted Marks to a third party nor shall it on its own
behalf sell Products with the UNLISTED Marks at wholesale to any
third party . The marks licensed by Paragraphs 1.1(a)(i) and
1.1(a)(ii), and by Paragraph 1.1(f), if applicable, shall be
collectively referred to as the “ Licensed Marks
” or “ Brands .”
3.
As of the Effective Date, a new Paragraph 1.1(f) of the License
Agreement is added as follows:
Upon the presentation to Licensor by Licensee of a Business Plan
(as such term is defined below) that is satisfactory to the
Licensor, Licensor shall grant to Licensee, during the Term (as
such term is defined in Paragraph 2.1), an exclusive license in the
Territory to manufacture and distribute at wholesale Products
(which, for the sake of clarity, shall consist only of
Women’s Sportswear) bearing the mark KENNETH COLE NEW YORK
and a label with black lettering on a soft white background in the
form attached hereto as Exhibit 5 (the “ Cream
Label ”), which may be amended from time to time by
Licensor. During the Initial Term, Licensor shall not grant a
license
for the manufacture, distribution or sale of Products bearing the
mark KENNETH COLE NEW YORK with a Cream Label (the “ Cream
Label Products ”) to a third party nor shall it on its
own behalf sell Cream Label Products at wholesale to any third
party. Notwithstanding anything in this Agreement to the contrary,
it is expressly acknowledged by Licensee that this Agreement
confers no licenses or other rights with respect to Products
bearing any other form of the KENNETH COLE NEW YORK mark, including
but not limited to a label with white lettering on a black
background in the form attached hereto as Exhibit 6 (the
“Black Label ”), which may be amended from time
to time by Licensor, the rights to which are expressly reserved by
Licensor. It is understood by the parties that the Cream
Label Products may overlap with and replace the KENNETH COLE
REACTION line. The exclusive rights that may be conferred by
this Paragraph 1.1(f) will be coterminous with those granted to the
Licensee under the KENNETH COLE REACTION mark and will, for
example, be subject to the same Reserved Channels of distribution
and the same limitations on exclusivity set forth throughout the
License Agreement.
4.
As of the Effective Date, Paragraph 1.1(e) of the License Agreement
is amended by adding thereto the following:
It is expected that the Articles will not typically be sold in the
same doors where Products bearing the mark KENNETH COLE NEW YORK
with a Black Label (the “ Black Label Products
”) are sold. In the doors where the lines overlap, in
addition to the expectation that the Black Label Products will be
sold in different and more exclusive departments than the Articles,
it also is the expectation of the parties that the price points for
Black Label Products will be distinctly higher than materially
similar Articles.
5.
As of the Effective Date, Paragraph 2.1 of the License Agreement is
deleted in its entirety and replaced with the following:
The term of this Agreement shall commence on the Effective Date
and, unless otherwise terminated as provided herein, shall continue
through (a) June 30, 2012, if Licensee launches a line of Cream
Label Products in Fall 2008, or (b) June 30, 2011, if Licensee does
not launch a line of Cream Label Products in Fall 2008
(collectively, the “ Initial Term ”). The
2008 Annual Period and each twelve (12) month calendar year
commencing on each January 1st thereafter during the Term shall
constitute and shall be referred to herein as an “ Annual
Period ,” with the exception of the final non-renewal
Annual Period hereunder, which shall consist of the eighteen (18)
months commencing on January 1 of the penultimate calendar year of
the Term and ending on June 30 of the following calendar year.
6.
As of the Effective Date, Paragraph 2.2(a) of the License Agreement
is deleted in its entirety and replaced with the following:
Provided that Licensee’s Net Sales (as such term is defined
below) of Products (excluding those under the * Marks) in the
Annual Period immediately preceding the final Annual Period are at
least * * * and provided further, that Licensee is not in default
beyond the expiration of any applicable grace or cure period of the
terms, covenants and conditions of the Agreement, Licensee shall
have the option to extend the term for an additional period of
three (3) years (the “ Renewal Option ” and the
Initial Term together with any extension pursuant to exercise of
the Renewal Option, collectively the “ Term ”).
Licensee may exercise the Renewal Option by giving written
notice that shall be received by Licensor no later than ninety (90)
days following the end of the penultimate Annual Period. Time
is of the essence with regard to the provisions of this Paragraph
2.2(a). In all other respects, all of the terms, covenants
and provisions of this Agreement shall remain in full force and
effect during the periods covered by the Renewal Option.
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7.
As of the Effective Date, a new Paragraph 2.3 of the License
Agreement is added as follows:
If (a) Licensee does not launch a line of Cream Label Products in
Fall 2008 and (b) Licensee does not achieve Net Sales of KENNETH
COLE REACTION Products during the 2008 Annual Period totaling at
least * * * *, then Licensor and Licensee will each have the right
to terminate the Agreement on written notice to the other party,
effective as of the end of the 2009 Annual Period. Notice of
termination pursuant to this Paragraph 2.3 shall be exercised no
sooner than February 1, 2009 and no later than March 1, 2009.
Upon termination of this Agreement by either Licensee or
Licensor under this Paragraph 2.3, Licensee shall continue to pay
the Guaranteed Minimum Royalties due during the remaining term of
the Agreement, and, notwithstanding anything to the contrary herein
contained, Licensee shall have the right to make up to * * * *
in Net Sales of Articles bearing the UNLISTED Marks, and
Sales Royalties on such sales may be used by Licensee toward its
Guaranteed Minimum Royalty obligations.
8.
As of the Effective Date, Paragraph 3.5(b) of the License Agreement
is deleted in its entirety and replaced with the following:
During the Term, in the event the Licensee Group intends to enter
into any * * * (“ Proposed Transaction ”) * * *
* * * Licensee shall promptly notify Licensor in writing of such
arrangement (the “ Transaction Notification ”)
to the extent such notice is permitted by law, it being understood
that Licensor may be required to enter into a confidentiality
agreement with respect to such Transaction Notification. Such
Transaction Notification shall include the * * * *. Licensor
shall notify Licensee in writing whether Licensor believes the
Proposed Transaction to be competitive (a “ Competitive
Transaction ”), such notification to be delivered as soon
as reasonably possible and in any event within * business days.
In the event Licensor no
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