Retail Store License Agreement - Babe Inc. and Bebe Moda SA de CV
RETAIL STORE LICENSE AGREEMENT
Between
BABE, INC.
a California corporation
and
BEBE MODA S.A. de C.V.,
a Mexican company
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RETAIL STORE LICENSE AGREEMENT
THIS RETAIL STORE LICENSE AGREEMENT (" Agreement") is made and entered into
effective as of April 1, 1998, between Babe, Inc., a California corporation
having its principal place of business at 380 Valley Drive, Brisbane, CA 94005
("bebe"), and Bebe Moda S.A. de C.V., a Mexican company having its principal
place of business at Avenida Presidente Mazaryk 310, Vis Polanco Mexico C.P.
11560 ("LICENSEE").
RECITALS
1. A glossary of terms used with initial capital letters and other terms
defined for purposes of this Agreement is set forth in Exhibit "A" at the end of
this Agreement.
2. bebe is the owner of the Marks and Property and the Marks represent the
substantial goodwill created by bebe through the sale of high quality products
and by distributing its products only through retail outlets that conform to
bebe's strict standards for appearance, image, customer service and overall high
quality.
3. LICENSEE desires to secure the right and license to use the Marks and
Property solely in connection with the establishment and operation of a store or
stores for retail sale of the products of bebe and bebe is willing to grant
LICENSEE a license on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the recitals, promises and mutual
convenants in this Agreement, the parties agree as follows:
SECTION 1. TERM
1.1 INITIAL TERM. The term of this Agreement shall commence on the
effective date of this Agreement and shall continue until March 30, 2001, unless
sooner terminated in accordance with this Agreement ("Initial Term").
1.2 RENEWAL TERM. LICENSEE shall have the option to renew this Agreement
for a three year term through March 30, 2004 ("Renewal Term"), if LICENSEE:
(a) requests renewal in writing at least one hundred eighty (180) days but
not more than two hundred seventy (270) days before the expiration of the
Initial Term;
(b) at the time it requests renewal and as of the expiration of the Initial
Term, is in compliance with all the terms of any and all agreements between
LICENSEE and bebe;
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(c) LICENSEE shall have renewed or have the right to renew the lease for
its existing Store(s) for a term equal to or greater than the Renewal Term;
(d) LICENSEE shall have opened at least [***] by [***]. At the end
of the [***] of the Initial Term, [***]. By the end of the Initial Term,
LICENSEE shall have opened the number of Stores required hereunder and done
any construction/renovation required to bring the existing Stores in
compliance with Section 3 of this Agreement; and
(e) During each Contract Year of the Initial Term, LICENSEE shall have
met or exceeded retail sales of U.S. [***] per Store. If Licensee does not
meet the minimum retail sales quota in any Contract Year for any reason other
than bebe's failure to ship LICENSEE Product, bebe shall have the right to
terminate this Agreement.
The terms of the renewal, including new Store requirements, sales quotas,
and Product purchase terms shall be negotiated between bebe and LICENSEE six
months prior to the expiration of the Initial Term. If bebe and LICENSEE do not
reach an agreement in writing by three months prior to the expiration of the
Initial Term, then the Agreement will expire without renewal. If LICENSEE
breaches the Agreement in any respect, then its option to renew the Agreement
will automatically lapse. Neither party has an obligation to renew this
Agreement at the end of the Renewal Term and LICENSEE expressly waives any
rights it may have under state, federal or other law to be compensated in any
way, including for goodwill, if the Agreement terminates either at the end of
the Initial Term or the Renewal Term.
SECTION 2. LICENSE
2.1 GRANT AND TERRITORY. For the Term and subject to the other terms and
conditions of this Agreement, bebe hereby grants to LICENSEE a limited,
exclusive, nontransferable right and license to use the Licensed Rights solely
on or in connection with the promotion and Retail Sale of the Products and the
operation of the Stores in the Territory. The Licensed Rights may not be used in
connection with the design, manufacture, advertisement, promotion or
distribution at wholesale of any of the Products or in connection with any other
product or service. LICENSEE does not have the right to use any variation of the
Marks that now exist or hereafter are developed by bebe, LICENSEE or any other
person. LICENSEE agrees and acknowledges that bebe reserves the right either to
sell in retail stores or appoint other licensees or distributors in the
Territory to sell in retail stores, lines of products whether similar or
dissimilar to the Products, that bear the Marks and variations of the Marks,
subject to any manufacturing license agreement between bebe and LICENSEE, if
any.
2.2 NO SUBLICENSES. This Agreement does not confer upon LICENSEE a right to
sublicense or grant any concession in respect to any of the rights or licenses
granted to
[***] Confidential Treatment Requested.
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LICENSEE under this Agreement. Such rights may be granted at bebe's sole
discretion and only in writing from bebe to LICENSEE.
2.3 USE OF LICENSED RIGHTS. LICENSEE acknowledges that it may be difficult
for bebe to obtain registered title to all of its Licensed Rights in the
Territory and that the rights and licenses granted under this Agreement only
exist to the extent that bebe owns such Licensed Rights. LICENSEE shall not use
the Licensed Rights in any manner that conflicts with the rights of any third
party. If LICENSEE's use of the Licensed Rights infringes the rights of any
third party or weakens or impairs bebe's rights in the Licensed Rights, as
determined solely by bebe, then LICENSEE shall immediately terminate or modify
such use in accordance with bebe's instructions, and LICENSEE shall have no
right of damages, offset or termination in connection with this Agreement.
2.4 USE OF MARKS. The presentation and image of the Marks shall be
uniform and consistent with respect to all Products bearing the Marks. All
packaging, business advertising and promotional material used in connection with
the Products shall be of the highest standard and quality and of such style,
appearance and distinctiveness as to protect and enhance the prestige, image,
reputation and goodwill of bebe and the Products. Accordingly, LICENSEE shall
use the Marks (i) solely for the purpose of identifying the Products and
identifying LICENSEE as an authorized licensee of bebe and (ii) solely in the
manner that bebe, in its sole discretion, shall specify from time to time and in
compliance with all applicable laws.
2.5 RELATIONSHIP OF PARTIES. The relationship between bebe and LICENSEE is
that of licensor and licensee of intellectual property rights. In its capacity
as licensee, LICENSEE shall be acting only as an independent contractor, and not
as a partner, co-venturer, agent, employee or representative of bebe.
Accordingly, LICENSEE shall have no authority, either express or implied, to
make any commitment or representation on behalf of bebe or incur any debt or
obligation on behalf of bebe. To the extent that LICENSEE purchases any Products
from bebe, it will do so for its own account and for resale in the Territory,
and not under consignment or representation. The parties acknowledge that
LICENSEE is not a commercial agent of bebe and further acknowledge this
Agreement does not constitute a franchise under United States federal or state
law or under any law of the Territory or any sovereignty within the Territory
and does not create a fiduciary relationship between the parties.
SECTION 3. APPROVAL OF STORES
3.1 RETAIL STORES. LICENSEE shall open at least [***] in the Territory
by [***]. [***]. Before establishing any Store, LICENSEE shall submit to bebe
for approval any and all information reasonably requested by bebe, using the
RETAIL STORE LOCATION APPROVAL FORM (Exhibit "B"), and shall comply with all
of the other obligations set forth in this Section 3.
[***] Confidential Treatment Requested.
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3.2 STORE LOCATION. The Stores must be free-standing, in-mall stores, or in
strip malls located in areas in the Territory that are consistent with the
reputation for high quality associated with the Licensed Rights and the
Products. In all cases the choice of location requires the written prior
approval of bebe.
3.3 STORE DESIGN AND CONSTRUCTION. The Stores must be designed, constructed
and furnished in all respects in accordance with any plans, standards and
specifications required by bebe. In particular, all fittings, fixtures,
furnishings, signs, equipment and methods of exterior and interior design must
conform to bebe's specifications, including the manner of use of the Marks and
other Licensed Rights. LICENSEE shall submit the original design construction
plans as well as any changes that LICENSEE wishes to make to any approved Store
design to bebe in advance for written approval, using (1) the RETAIL STORE
LOCATION APPROVAL FORM (Exhibit "B") and (2) the RETAIL STORE MATERIAL AND
FIXTURE LAYOUT APPROVAL FORM (Exhibit "C"). If any regulation, ordinance or law
prevents LICENSEE from complying with any signage specification, LICENSEE shall
submit a photograph or drawing of the proposed sign that complies with such
regulation, ordinance or law to bebe for its prior written approval.
3.4 STORE OWNERSHIP. Unless expressly permitted otherwise by bebe, the
business conducted at any Store shall be entirely owned by LICENSEE.
3.5 STORE LEASES/TERMINATION OF AGREEMENT/LEASE CONTINUATION. The Store
premises may by leased by LICENSEE provided that the terms of any lease contract
are acceptable to bebe. Each lease must contain a provision, satisfactory to
bebe, granting bebe, at no expense to bebe, the option, but not the obligation,
at its sole discretion, to assume the lease if this Agreement expires or
terminates for any reason prior to the expiration of the lease.
3.6 TERMINATION OF LEASE/CLOSURE OF STORE. In the event a lease for a Store
terminates, with or without fault of LICENSEE, or if a Store is destroyed,
condemned or otherwise rendered unusable, or if the landlord for said premises
requires a Store to be moved within a mall or shopping center, bebe may in its
sole discretion withhold permission for relocation of the Store, and if such
permission is withheld, the rights granted to LICENSEE under this Agreement
shall terminate as to that Store.
3.7 RISK. BEBE'S APPROVAL OF A LOCATION FOR A STORE DOES NOT CONSTITUTE A
WARRANTY OR GUARANTY THAT A STORE OPERATED AT THAT LOCATION WILL BE SUCCESSFUL.
LICENSEE assumes all risks associated with the selection of the location, and
the operation and profitability, or lack thereof, of any Store.
3.8 INSPECTION PRIOR THE OPENING. LICENSEE shall notify bebe at least
twenty (20) days in advance of the proposed opening date of each Store. bebe
shall have the right to inspect the Store at any time prior to its opening. No
Store shall commence operation until any deficiencies noted by bebe are remedied
to the complete satisfaction of bebe.
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3.9 PHOTOGRAPHS OF STORE UPON OPENING. Within ten (10) days after the
opening of each Store, LICENSEE shall deliver to bebe two (2) sets of
photographs of the Store, each set consisting of one (1) 8 inch x 10 inch
photograph that shows the interior and one (1) 8 inch x 10 inch photograph that
shows the exterior, of the Store.
SECTION 4. OPERATION OF STORES
4.1 QUALITY STANDARDS. LICENSEE acknowledges that bebe has made a
substantial investment in developing and manufacturing Products of high quality
and design and developing and fostering an image and reputation of high quality,
design, prestige and integrity under its Marks and Property and that the
consuming public and industry now associate the Marks and Property with products
of consistently high quality and design. LICENSEE further acknowledges that the
terms and conditions of this Agreement are reasonable and necessary to assure
that the Store premises are maintained and the Stores are operated in a manner
that is consistent with bebe's image and reputation. LICENSEE shall comply with
the standards of operations and merchandising established by bebe from time to
time. bebe may change, review, amend or extend such standards, in its sole
discretion, upon reasonable notice to LICENSEE. Without limitation to the
foregoing, LICENSEE agrees to the following:
(a) to stock at each of the Stores the minimum variety of the Products in
commercial quantities of styles and sizes specified by bebe from time to time,
but not less than those quantities sufficient to meet the demands of customers
of the Stores:
(b) to follow and adhere to the standards, requirements, systems, training,
procedures and forms dictated by bebe:
(c) not to sell at the Stores, without the prior written approval of bebe,
products bearing any trademark other than the bebe Marks;
(d) not to use or associate the Marks or other Licensed Rights with any
other name, trademarks, character or personality;
(e) to maintain the interior and exterior of the Stores and the surrounding
premises in safe, good, clean and attractive condition, equal to the standards
of the stores operated by bebe in the United States of America;
(f) that all products offered for sale by LICENSEE in the Stores must bear
tags, labels or other items incorporating the Marks and Property;
(g) to comply with all applicable laws, regulations, ordinances, zoning
codes, orders and the like as they pertain to the construction, appearance, and
operation of the Stores;
(h) to notify bebe immediately of any orders or regulations directed at, or
affecting, the
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Stores, the reasons therefor, and the responsive actions taken and/or plans to
be taken by LICENSEE in connection therewith;
(i) to operate the Stores continuously on such dates and during such
minimum hours as are required by the commercial district or other development
within which each Store is located, or, if there are no such requirements, on
such days and during such minimum hours as are customary for similar businesses
in the community within which that Store is located;
(j) not to conduct any liquidation sales, going-out-of business sales,
auctions, sales to jobbers or other sales that are not in the ordinary course of
business or that do not conform to the marketing standards of bebe, without the
prior written consent of bebe; and
(k) not to permit any lien or other encumbrance to be placed on the Stores
or their inventory, without prior written approval by bebe.
4.2 SIGNS, PACKAGING, ETC. LICENSEE shall submit to bebe for prior written
approval all interior and exterior display sign, hangers, price tags, shopping
bags, gift boxes, stationery, forms of invoices and receipts, and similar items
using the LICENSED RIGHTS APPROVAL FORM (Exhibit "D").
4.3 SEQUENTIAL INVOICING. All sales of the Products at the Stores shall be
documented on sequentially numbered sales slips.
4.4 INTERNAL TRANSACTIONS. All transactions between LICENSEE's wholesale
manufacturing business, if any, and the Stores shall be arm's length
transactions recorded on the books and records in the same manner as a sale to
other parties. Upon request, LICENSEE shall forward to bebe copies of all
documents incidental to such transactions including orders, invoices and packing
slips.
4.5 SECONDS. LICENSEE shall not sell any damages, imperfect, substandard
quality or defective goods ("Seconds") under the Marks without the prior written
approval of bebe. All Seconds approved for sale shall be marked "B Grade,"
"Seconds" or "Irregular" and all Seconds not approved shall be destroyed.
SECTION 5. PURCHASE OF PRODUCT
5.1 TERMS. LICENSEE shall purchase Product on the terms and conditions
specified in the PRODUCT PURCHASE TERMS, Exhibit E hereto, which may be modified
from time to time by written agreement of the parties.
5.2 NET PRICE. The price which LICENSEE pays for Product purchased
hereunder shall be net of any taxes. If bebe's cost of operation increases due
to a portion of bebe's income being deemed a royalty subject to withholding
taxes, then the price of Product to
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LICENSEE' may be increased proportionately at bebe's sole discretion.
SECTION 6. ADVERTISING
6.1 CONTRACT YEAR MARKETING PLAN. LICENSEE shall prepare a marketing plan
for each Contract Year, including planned sales presentation, fashion shows,
special events and special promotions and other advertising, with a budget and
specifying the media, the date and the time of publication of each planned
advertisement or promotional event, which shall be suitable for the Territory
and be based upon bebe's marketing program. LICENSEE shall submit such plan to
bebe by no later than thirty (30) days following the date of the Agreement, and
thereafter by no later than 30 days prior to the first day of each Contract Year
of the Agreement. LICENSEE shall support any marketing program for the Stores
that bebe may develop.
6.2 PRIOR APPROVAL. LICENSEE shall submit to bebe, for its prior approval,
samples of all advertising and other promotional plans and materials, including
media placement and scheduling, that LICENSEE desires to use to promote the
Stores or the Marks that have not been prepared or previously approved by bebe,
including without limitation, press releases and interviews for publication in
any media. All requests for approval shall be submitted on an ADVERTISING
APPROVAL FORM in the form of Exhibit "F" hereto, as modified by bebe from time
to time.
6.3 NOTICE OF OWNERSHIP OF MARKS AND COPYRIGHTS. All Licensed Products
sold by LICENSEE and all advertising and promotional materials shall state that
the Marks are owned by bebe. LICENSEE shall use the following form of such
notice for all Licensed Products, which bebe may change from time to time, in
its sole discretion:
BEBE and BEBE MODA
are trademarks of Babe, Inc., California, U.S.A.,
used by Bebe Moda S.A. de C.V., Mexico, D.F., under license.
LICENSEE shall use the following form of such notice for all advertising and
promotional materials, which bebe may change from time to time, in its sole
discretion:
All Rights Reserved
-C- Babe, Inc.,
California, U.S.A. 19__
6.4 LEGAL NOTICES. LICENSEE shall use the proper trademark and copyright
notices in connection with the Licensed Rights and any associated copyrightable
works, which notices bebe shall, from time to time, in its sole discretion,
specify.
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SECTION 7. INSURANCE
Upon execution of this Agreement and throughout the Term, LICENSEE, at its
sole cost and expense, shall obtain and maintain in full force and effect a
policy of insurance insuring against those risks customarily insured under broad
occurrence form comprehensive general liability policies, including without
limitation, product liability, completed operations, advertising injury, and
contractual liability for LICENSEE's obligations under this Agreement. Such
policies of insurance shall have endorsements or coverage with combined single
limits of not less than One Million Dollars ($1,000,000) plus defense costs and
shall name bebe as an additional insured thereunder. Such insurance policy shall
provide that it cannot be canceled, modified or renewed without sixty (60) days
prior written notice to bebe, the "other insurance" clause, if any, will be
deleted from such policy, the insurance under such policy shall be primary, and
any other insurance of force shall be neither primary nor contributing. The
policy shall provide that the insurer waives its right of subrogation in favor
of bebe. Within thirty (30) days of the date of execution of this Agreement,
LICENSEE shall furnish to bebe current certificates of insurance issued by the
insurer and showing bebe as an additional insured. During the Term, LICENSEE may
not engage in the sale or promotion of any Product or the operation of Stores
unless the required insurance coverage is in full force and effect.
SECTION 8. COVENANTS REGARDING ORGANIZATION AND OPERATION OF LICENSEE
8.1 STAFFING AND NOTICE OF INTERNAL CHANGES. In granting the license to
LICENSEE, bebe is relying upon the personal skills, judgment, abilities and
attributes of the persons named in Exhibit "H" as principals of LICENSEE and
upon their personal involvement in the business. LICENSEE represents and agrees
that these named individuals are and will continue to be dedicated to the full
time executive management and operation of LICENSEE's business. LICENSEE shall
employ at each Store: (1) an individual or individuals with suitable
qualifications and experience in the high quality retail apparel industry to
manage the business and operations of the Store; and (2) a staff of trained
employees sufficient to operate each of the Stores in accordance with this
Agreement and bebe's specifications;
LICENSEE shall immediately notify bebe of (i) any change in the activities
of LICENSEE; (ii) the termination of employment for any reason of a store
manager or merchandiser; (ii) the addition of any "competing" line, if otherwise
allowed hereunder; and (iii) any transaction affecting ownership or control of
LICENSEE, including without limitation, any transaction affecting (a) beneficial
or record ownership of its capital stock, if a corporation, (b) the respective
interests of its partners, if a partnership, or (c) ownership of any part of the
business, if a sole proprietorship.
8.2 FINANCIAL STANDING. LICENSEE shall maintain a debt to equity ratio of
at least percent ( %) and tangible net worth of not less than
($ ).
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8.3 CUSTOMER RELATIONS. LICENSEE shall maintain good customer relations in
accordance with prudent and reasonable business practices.
8.4 SCOPE OF OBLIGATIONS. LICENSEE shall not permit or suffer any action
to be taken by or through any principal or spouse, directly or indirectly, which
would be a violation of this Agreement if carried out by LICENSEE. LICENSEE
shall not permit or suffer any substantial change in ownership, management or
control.
A substantial change in ownership, management or control of LICENSEE shall
be deemed to have occurred if more than twenty percent (20%) ( by vote or value)
of the equity securities of LICENSEE are transferred to any person who did not
own equity securities of LICENSEE at the time of execution of this Agreement or
if any person who owned or controlled more than twenty percent (20%) (by vote or
value) of the equity securities of LICENSEE at the time of execution of this
Agreement reduces to twenty percent (20%) or less any such ownership or control.
For purposes of the foregoing, a person shall not be deemed to own or control an
equity security if such person has sold, assigned, conveyed, donated or made a
gift of, pledged, hypothecated or transferred (voluntarily or by operation of
law), any interest in the equity security in question, or agreed to do any of
the foregoing.
A substantial change in ownership, management or control of LICENSEE also
shall be deemed to have occurred if for any reason any of the individuals
identified as principals at the time of execution of this Agreement are not
involved in the day to day management of LICENSEE or do not personally manage
and control LICENSEE's relationship with bebe and its activities under this
Agreement. The foregoing is not intended to be an exhaustive list of what
constitutes a substantial change in ownership, management or control of
LICENSEE.
8.5 CHANGE IN FORM OF BUSINESS. LICENSEE may change its form of business
(for example, from partnership to corporation) only after obtaining the prior
written approval of bebe. No such change shall release LICENSEE, any principal
of LICENSEE or any other person from any liability or obligation under this
Agreement.
8.6 CURRENT OWNERSHIP. LICENSEE warrants and represents that Exhibit "H"
sets forth completely and accurately all ownership and control of all equity
ownership of LICENSEE as of the date of this Agreement and that Exhibit "G"
identifies all of the principals of LICENSEE.
8.7 NOTICE OF PROCEEDINGS. LICENSEE shall notify bebe in writing within
five (5) days of the commencement or threat of any action, suit, proceedings or
investigation or the issuance of any order, writ, injunction, award, judgment or
decree before or of any court, tribunal, arbitration panel, agency or
governmental instrumentality that may adversely affect the Products or the
operations or financial condition of LICENSEE.
8.8 RECORDS. LICENSEE shall maintain in reasonable detail and, where
applicable, in
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accordance with United States' generally accepted accounting principles,
consistently applied, separate books of account and records with respect to the
sale of all Products at each of the Stores; records of advertising and
promotional campaigns with respect to the Products; records of all inventory of
the Products; orders, inquiries, complaints, requests for service and other
correspondence with respect to the Products; employment records with respect to
persons who carry out activities and transactions of LICENSEE pursuant to this
Agreement; and records of other services, activities and transactions of
LICENSEE with respect to the Products. These records shall be retained and shall
be open for inspection, copying, extracting and audit by bebe or its employees,
agents or representatives during normal business hours during the Term and for
at least three years following termination or expiration of this Agreement.
LICENSEE shall inform bebe of any relocation of the books and records in
writing. LICENSEE shall not relocate the books and records outside the Territory
without bebe's prior written consent.
8.9 AUDITS. bebe and its employees, agents or representatives shall have
the right, at reasonable times and without undue disruption of LICENSEE's normal
business, to conduct audits with respect to the books, records, and all other
documents and material in the possession or under the control of LICENSEE
relating to this Agreement. bebe shall bear the cost of all audits. If any such
audit, however, discloses that payments due to bebe under this Agreement exceed
the amount of payments actually made to bebe by an amount greater than three
percent (3%) of the payments made, LICENSEE shall immediately pay the cost of
the audit and each unpaid payment discovered in the audit plus interest at a
rate of ten percent (10%) per annum calculated from the date such payment was
actually due until the date such payment is, in fact, actually paid.
8.10 FINANCIAL STATEMENTS. No later than ninety (90) days after the close
of LICENSEE's fiscal year, LICENSEE shall provide to bebe in English annual
financial statements of LICENSEE, which shall be audited by an independent
certified accountant of LICENSEE's choice and acceptable to bebe, which
statements shall include an income statement and a balance sheet of LICENSEE
prepared in accordance with United States' generally accepted accounting
principles, consistently applied.
8.11 PERIODIC REPORTS. LICENSEE shall submit to bebe the following reports,
at the intervals indicated:
(a) thirty (30) days after the end of each month the bebe MONTHLY RETAIL
STORE REPORT (Exhibit "I"), for each Store;
(b) each April 1st, and at such other times as bebe may reasonably request,
a list of the addresses of all of the Stores as well as photographs of each
Store that accurately show its current condition;
(c) any other information relating to the operation of the Stores and the
sale of the Products that bebe may reasonably request from time to time,
including, without limitation,
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photographs of the Stores and daily sales reports.
SECTION 9. OWNERSHIP OF THE LICENSED RIGHTS
9.1 OWNERSHIP. LICENSEE acknowledges that (i) the Licensed Rights are
owned solely and exclusively by bebe, (ii) nothing contained in this Agreement
shall give to LICENSEE any right, title or interest in the Licensed Rights,
other than the express license granted in Section 2.1 of this Agreement, and
(iii) LICENSEE's use of the Licensed Rights shall inure only to the benefit of
bebe.
9.2 PROPERTY. LICENSEE shall not use any Licensed Rights except for the
purpose of fulfilling its duties under this Agreement and in a manner authorized
in writing by bebe.
9.3 NO USE OF NAME. LICENSEE shall not use any of the Licensed Rights as a
trade name, service mark, business name, trade style, fictitious business name
or d.b.a. except that LICENSEE is authorized to use the trade name and service
mark "bebe" as its Store name and the trade name "Bebe Moda" as its company
name. Any authorized or unauthorized use shall inure solely to the benefit of
bebe, and authorized or unauthorized use by LICENSEE shall not confer on
LICENSEE any right, title or interest in the Licensed Rights except as granted
in Section 2.1 of this Agreement.
9.4 REGISTRATION. LICENSEE shall not seek or obtain any registration of
the Marks (including any colorable imitations, translations or transliterations
thereof) or the Property in any name or participate directly or indirectly in
such registration anywhere in the world without bebe's prior written consent. If
LICENSEE has obtained or obtains in the future, in any country, possession or
territory in the world, any right, title or interest in the Marks (including any
colorable imitations, translations or transliterations thereof) or the Property,
or in any marks which are confusingly similar to the Marks (including any
colorable imitations, translations or transliterations thereof) or the Property
or in any other trademark or service mark owned by bebe, LICENSEE has so acted
or will act as an agent and for the benefit of bebe for the limited purpose of
obtaining such registrations and assigning them to bebe. LICENSEE shall execute
any and all instruments deemed by bebe, or its respective attorneys or
representatives, to be necessary to transfer such right, title or interest to
bebe. If the laws of the Territory require or permit the registration of any
Marks or Property, LICENSEE shall assist bebe in obtaining such registration in
a timely and effective manner; provided, however, that the failure to obtain
such registrations shall not affect the validity of the Agreement.
9.5 NO CHALLENGE. During the Term, LICENSEE shall not, directly or
indirectly, take any actions challenging, questioning or opposing the validity
of the Marks or any other trademarks or service marks owned by bebe.
9.6 INFRINGEMENT SUITS. LICENSEE shall be vigilant in detecting any
possible infringements, claims or actions in derogation of any Licensed Rights,
including any
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counterfeiting, by any third parties and shall inform bebe promptly of any such
infringement, claim or action; provided, however, that bebe shall have the sole
right to determine whether any action shall be taken on account of such
infringement, claim or action and LICENSEE shall not take any action on account
of such infringement, claim or action without the prior written consent of bebe.
If bebe initiates any legal proceedings on account of any such infringement,
claim or action, LICENSEE shall cooperate with and assist bebe to the extent
reasonably necessary to protect the Licensed Rights, including without
limitation, being joined as a necessary or desirable party to such proceedings.
The damages or other recovery received from such proceedings shall be received
by the party who bore the expense of the litigation. LICENSEE shall have no
claim against bebe for damages if bebe determines, in its sole discretion, that
it is not in the best interest of bebe to initiate any legal proceedings on
account of any such infringement, claim or action, or if bebe settles or
resolves any such proceedings which may be initiated.
9.7 QUITCLAIM OF RIGHTS. LICENSEE acknowledges the exclusive right, title
and interest of bebe in and to the Licensed Rights and hereby quitclaims to bebe
any right, title or interest it has or may acquire with respect to the Licensed
Rights, including without limitation any right, title or interest it may acquire
through the unauthorized use of the Licensed Rights as a trade name, service
mark, business name, trade style, fictitious business name or d.b.a. or the use
of the bebe trade name and service mark as a Store name.
9.8 COPYRIGHTS. If LICENSEE, alone or with others, develops any written
material pertaining to the Products or bebe which may be copyrighted, it hereby
assigns all right to obtain such copyrights to bebe. Such material shall be
deemed "made for hire" under U.S. copyright law, thereby vesting ownership in
bebe.
9.9 POWER OF ATTORNEY. LICENSEE hereby irrevocably appoints bebe as its
attorney-in-fact for the limited purpose of executing any and all documents and
performing any and all other acts necessary to give effect and legality to the
provisions of Section 10 of this Agreement.
9.10 CONFIDENTIAL INFORMATION. Before or during the Term, LICENSEE may or
will be made aware of Confidential Information of bebe relating to the Products,
the Licensed Rights, the license and arrangement created under this Agreement,
present or anticipated products, processes, know-how, customers, sales, business
affairs, contractual arrangements, identities of employees, agents or
representatives or similar information. Information shall be considered
Confidential Information if bebe so informs LICENSEE or if LICENSEE knows or
reasonably should have known that the information was confidential. Information
shall not be considered confidential if the information is in the public domain
or if LICENSEE can demonstrate that it acquired the information from another
source without the source or LICENSEE breaching a confidentiality agreement or
other confidentiality obligation. During and after the Term, LICENSEE shall
maintain in strict confidence and shall not disclose, except to employees of
LICENSEE who must have access to it in order to exercise its rights and license
under this
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Agreement or as expressly permitted by any written agreement between LICENSEE
and bebe, any Confidential Information. LICENSEE shall take every reasonable
precaution to protect the confidentiality of the Confidential Information,
consistent with the higher of the standard of care that LICENSEE exercises with
respect to its own confidential information or the standard of care that an
ordinarily prudent business would exercise to protect its own confidential
information.
9.11 DISCLAIMER OF VALIDITY. bebe makes no representation or warranty as
to the validity or enforceability of the Licensed Rights nor as to whether any
Property infringes upon or interferes with any property rights of third parties.
bebe is not certain if it will be successful in obtaining or maintaining
registration of the Marks in the Territory. If it is determined at any time that
bebe does not have the right to use the Licensed Rights, or any portion thereof,
within the Territory, LICENSEE shall immediately refrain from using the Licensed
Rights and selling the Products in the Territory and shall have no claims
against bebe for damages caused by such cessation or termination or otherwise
caused.
9.12 SURVIVAL. Notwithstanding anything in this Agreement to the contrary,
this Section 9 shall survive termination or expiration of the Agreement.
SECTION 10. TERMINATION
10.1 TERMINATION FOR CAUSE. In the event LICENSEE breaches this Agreement,
bebe may give written notice of the nature of the breach to LICENSEE and
LICENSEE shall have ten calendar days to cure the breach. If LICENSEE does not
cure the breach within the ten calendar days then bebe may terminate this
Agreement effective upon written notice to LICENSEE. Failure of bebe to give
such written notice will not in any event constitute a waiver of such breach.
Upon the giving of a notice of breach for the third time during the Term, for
any reason, LICENSEE shall no longer have the right to cure any violation, and
termination shall be effective upon the giving of said third notice.
10.2 GROUNDS FOR TERMINATION FOR CAUSE. Set forth below is a nonexhaustive
list of breaches by LICENSEE that would entitle bebe to terminate this Agreement
and the rights and licenses granted to LICENSEE if the breaches were not cured
during the applicable cure period:
10.2.1 Failure of LICENSEE to obtain a consent to use agreement, in form
approved by bebe, for use of the mark "BEBE" in Mexico for women's apparel no
later than the opening of the first Store.
10.2.2 Failure of LICENSEE to meet the minimum retail sales quota in any
Contract Year;
10.2.3 Failure of LICENSEE to maintain or operate the Stores in accordance
with this
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Agreement;
10.2.4 Commission by LICENSEE of a material violation of any applicable
law in the Territory in connection with the ownership or operation of the Store
or the retail sale of the Products;
10.2.5 The making by LICENSEE of any warranties or representations on
behalf of bebe that have not been specifically authorized in writing by bebe;
10.2.6 Sales by LICENSEE of the Products other than under the Marks, or
the use of the Marks in any manner that violates this Agreement;
10.2.7 Sales by LICENSEE of Products other than through Stores unless
expressly authorized under a separate license or distribution agreement with
bebe;
10.2.8 Abandonment by LICENSEE of its business or the activities required
under this Agreement; or
10.2.9 Failure of LICENSEE to cooperate in any legal proceedings or
failure to bring any actions required to protect the Licensed Rights in the
Territory.
10.3 BANKRUPTCY, INSOLVENCY OR DISSOLUTION. In the event of insolvency,
bankruptcy or dissolution of LICENSEE, bebe shall have the option to terminate
this Agreement immediately, WITHOUT GIVING LICENSEE AN OPPORTUNITY TO CURE, with
the termination effective upon written notice to LICENSEE. The license and
rights granted herein are personal to LICENSEE. No assignee for the benefit of
creditors, receiver, debtor in possession, trustee in bankruptcy, sheriff or any
other officer of court charged with taking over custody of LICENSEE's assets of
business, shall have any right to continue performance to exploit or in any way
use the Marks or the Licensed Rights if this Agreement is terminated, except as
may be required by law.
10.4 TERMINATION OPTION/NO CURE POSSIBLE/ADDITIONAL CAUSES. bebe may
terminate this Agreement immediately, WITHOUT ANY RIGHT TO CURE BY LICENSEE,
upon the occurrence of any one or more of the following:
10.4.1 LICENSEE opens a Store that was not approved by bebe in advance in
writing;
10.4.2 LICENSEE uses or authorizes the use of signs, construction
materials, advertising or packaging materials that are not approved by bebe in
advance in writing or that bebe has disapproved;
10.4.3 LICENSEE sells or ships the Products to customers outside the
Territory;
10.4.4 LICENSEE sells products not bearing the Marks in the Stores;
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10.4.5 LICENSEE reports incorrect or false financial information,
including sales information;
10.4.6 LICENSEE fails to open and operate at all times during the Term the
number of Stores required by Section 3.1.
bebe may also terminate this Agreement immediately if any other agreement
between bebe and LICENSEE is terminated or expires.
10.5 SUBSTANTIAL CHANGE IN OWNERSHIP, MANAGEMENT OR CONTROL OF LICENSEE OR
COMMISSION OF CRIME. In the event that any substantial change in the ownership,
management or control of LICENSEE occurs or in the event that LICENSEE or any of
its principals commits any crime, act of dishonesty, fraud or other act that may
substantially affect the business reputation of LICENSEE, any of its principals
or bebe, then bebe shall have the option to immediately terminate this
Agreement, effective upon written notice.
10.6 LIABILITY AFTER TERMINATION. Termination of this Agreement for any
reason shall not, unless otherwise expressly provided in this Agreement, affect:
10.6.1 Obligations accrued prior to the effective date of termination; and
10.6.2 Any obligations which, either expressly or from the context of this
Agreement, are intended to survive termination of this Agreement.
10.7 EFFECTS OF TERMINATION. Upon any termination of this Agreement:
10.7.1 Any indebtedness of LICENSEE to bebe shall become immediately due
and payable and bebe may retain as security or apply as payment against any such
indebtedness any Products of LICENSEE in the possession of bebe.
10.7.2 bebe shall not be liable to LICENSEE, either for compensation or for
damages of any kind, whether on account of loss by LICENSEE or any other person,
of present or prospective profits on present or prospective sales, investments
or goodwill, and LICENSEE hereby waives any right which may be granted to it by
sovereign entities or any political subdivision in the Territory or otherwise
which are not granted to it by this Agreement.
10.7.3 Within three (3) days after the expiration or termination of this
Agreement for any reason, LICENSEE shall remove and, within fourteen (14) days
after expiration or termination of this Agreement, shall deliver to bebe, all
exterior and interior Store sign and displays bearing the Marks and Licensed
Rights as well as all other Store promotional material, including mailers,
flyers, brochures, shopping bags, tags, business cards and letterhead, bearing
the Marks or the Licensed Rights.
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10.7.4 LICENSEE shall continue to maintain in confidence any and all
Confidential Information, and, within fourteen (14) days after such expiration
or termination, will return to bebe, at LICENSEE's expense, all exterior and
interior signs and displays bearing the Marks or other Licensed Rights, all
packaging, labels, tags, promotional or advertising materials and documents
relating to the Products, Licensed Rights or any Confidential Information or, at
the election of bebe, destroy or otherwise dispose of such material as bebe may
direct.
10.7.5 Within five (5) days after the expiration or termination, LICENSEE
shall notify in writing all telephone companies, business directories, chambers
of commerce and appropriate governmental agencies of the expiration or
termination of this Agreement and terminate any listing making reference to any
of the Licensed Rights or the licensing arrangement and shall provide copies of
such notices to bebe. If LICENSEE fails to notify such entities, LICENSEE
authorizes bebe to do so as its agent for this limited purpose.
10.8 INVENTORY: RIGHT TO PURCHASE. Upon expiration or termination of this
Agreement for any reason, LICENSEE shall immediately notify bebe of the Products
remaining in LICENSEE's possession or under its control and unsold on the date
of termination or expiration (the "Remaining Inventory"). bebe shall have the
option (but not the obligation), upon notice to LICENSEE within thirty (30) days
after receipt of LICENSEE's inventory of the Products, to repurchase all or any
part of the Remaining Inventory at a price equal to the price paid by LICENSEE
for the Products plus freight and duties (unless LICENSEE can obtain duty
reimbursement). LICENSEE shall deliver products purchased by bebe within fifteen
(15) days after receipt of the notice of bebe's intention to purchase the
inventory. Payment shall be due upon delivery, provided, however, that bebe may
deduct from the purchase price for such Products any amount owed to it by
LICENSEE.
10.9 REMAINING PRODUCTS. Products may be sold, subject to the following
provisions, only after the Marks and features embodying Licensed Rights have
been removed therefrom (which removal may be inspected by bebe, its agents
and/or representatives) prior to sale, unless the parties agree otherwise in
writing. Products not sold by LICENSEE in accordance with this Section 9 shall
be destroyed.
(a) IF AGREEMENT EXPIRED. In the event this Agreement has expired in
accordance with its terms, as to any Products not purchased by bebe, LICENSEE
may sell such Products on a non-exclusive basis in accordance with this
Agreement; provided, however, LICENSEE shall have only ninety (90) days after
the date of expiration to sell and ship such Products.
(b) IF AGREEMENT TERMINATED. If the rights granted to LICENSEE under this
Agreement have been terminated for any reason or cause specified in Section 10.4
of this Agreement, LICENSEE may not sell any Products bearing the Marks.
SECTION 11. INDEMNIFICATION AND LIMITATION ON LIABILITY
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11.1 INDEMNIFICATION. LICENSEE shall indemnify, hold harmless and defend
bebe and its officers, directors, shareholders, employees, agents, independent
contractors, representatives, and affiliates, from and against any loss, damage,
liability, or expense, including attorneys fees and disbursements, whether or
not LICENSEE's conduct was tortious and whether or not bebe's conduct
contributed to the claim, arising in connection with:
11.1.1. Any activities of LICENSEE or its employees, agents,
representatives or affiliates, under or in connection with this Agreement.
11.1.2 Any breach by LICENSEE of this Agreement;
11.1.3 Claims or demands for injury to property or persons, including
payments made under any workers compensation or under any other plan for
employees disability or death benefits, made by any person in connection with
the advertising, promotion, distribution, sale or use of Products or the
operation of the Stores by LICENSEE or by its employees, agents, representatives
or affiliates or LICENSEE's customers or invitees; and
11.1.4 Claims or demands of any customer of LICENSEE arising out of the
operation of the Store or any sale or use of the Products.
11.2 DEFENSE COUNSEL. LICENSEE shall defend bebe, with counsel acceptable
to bebe, with respect to each and every claim for which bebe is indemnified by
LICENSEE under this agreement. LICENSEE shall pay for the services of such
counsel upon counsel's presentation of legal bills or requests for retainer.
11.3 NO REPRESENTATION OR WARRANTY BY BEBE. LICENSEE acknowledges that
bebe has made no representation or warranty except as expressly provided in this
Agreement.
11.4 LIMITATION OF LIABILITY. UNDER NO CIRCUMSTANCES, INCLUDING ANY BREACH
OR ALLEGED BREACH OF THIS AGREEMENT BY BEBE OR ANY OTHER PERSON AND THE FAILURE
OF THE ESSENTIAL PURPOSE OF ANY REMEDY INTENDED TO BENEFIT LICENSEE, SHALL BEBE
OR ANY OF ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, INDEPENDENT
CONTRACTORS, REPRESENTATIVES, OR AFFILIATES, HAVE ANY LIABILITY OR OBLIGATION TO
ANY CUSTOMER OF LICENSEE, OR TO LICENSEE OR TO ANY OF ITS OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS, REPRESENTATIVES,
AUTHORIZED RETAILERS OR AFFILIATES, FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES,
LOST PROFITS, ANTICIPATED INCOME OR PROFITS, OR OTHER SIMILAR DAMAGES.
SECTION 12. GENERAL
12.1 APPROVAL PROCEDURES. The approval of bebe or the exercise of its
discretion as to
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any request or proposal made by LICENSEE under any section of this Agreement
shall be at the absolute and sole subjective discretion of bebe. A submission
for approval shall be deemed DISAPPROVED unless bebe delivers a written notice
of approval within twenty (20) business days. bebe has no obligation to approve,
review or consider any item that does not strictly comply with the required
submission procedures. Approval by bebe shall not be construed as a
determination that the approved matter complies with all applicable regulations
and laws.
12.2 EQUITABLE RELIEF. LICENSEE acknowledges that there will be no
adequate remedy at law for its failure to comply with certain terms of this
Agreement, including its obligation to cease the manufacture, sale,
advertisement, promotion or distribution of the Products upon expiration or
termination, its obligations with respect to the Licensed Rights and the
obligation to maintain the confidentiality of Confidential Information.
Accordingly, if LICENSEE fails to comply with the terms of this Agreement, bebe
shall have the right to have any breach of this Agreement remedied by equitable
relief by way of a temporary restraining order, preliminary injunction,
permanent injunction, and such other alternative relief as may be appropriate
without the necessity of bebe posting any bond or proving any damages.
12.3 ASSIGNMENTS, SUCCESSORS AND ASSIGNS. bebe shall be entitled to assign
any or all of its rights or delegate any or all of its duties under this
Agreement. LICENSEE shall not assign (by operation of law or otherwise) any of
its rights or delegate any of its duties under this Agreement without the prior
written consent of bebe. All representations, warranties, covenants and
agreements of the parties shall bind their respective successors and assignees
and shall inure to the benefit of their respective successors and permitted
assignees.
12.4 NOTICES. Any notice, request, demand, or other communication required
or permitted under this Agreement, shall be deemed to be properly given by the
sender and received by the addressee: (i) if personally delivered; (ii) three
(3) days after deposit in the mails if mailed by certified or registered air
mail, postage prepaid; (iii) twenty-four (24) hours after being sent by
facsimile with confirmation sent as provided in (ii) above; or (iv) twenty-four
(24) hours after being sent by commercial overnight mail, addressed as follows,
and in the case of facsimile transmission, to the appropriate facsimile number
shown below:
To bebe: bebe
380 Valley Drive
Brisbane, California 94005
Phone No.: 415-715-3900
Facsimile No.: 415-715-3939
Attention: Vice President-Licensing
To LICENSEE: BEBE MODA, S.A. DE C.V.
AVENIDA PRESIDENTE MAZARIT #310 BIS
DELEGACION MIGUEL HIDALGO
MEXICO CITY
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Phone No.: 525-281-35-63 TEMPORARY NUMBERS
Facsimile No.: 525-280-45-00
ATTENTION: JACOBO LANIADO CATTAN
or to such other address or facsimile number as from time to time may be given
in the manner permitted above.
12.5 NUMBER AND GENDER: HEADINGS. Each number and gender used in this
Agreement shall be deemed to include each other number and gender as the context
may require. The headings and captions contained in this Agreement shall not
constitute a part thereof and shall not be used in its construction or
interpretation.
12.6 SEVERABILITY. If any provision of this Agreement is found by any court
of competent jurisdiction to be invalid or unenforceable, such provision shall
be deemed to be modified to the maximum extent necessary to cause it to be valid
and enforceable and the invalidity or unenforceability of such provision prior
to such modification shall not affect the other provisions of this Agreement and
all provisions not affected by the invalidity or unenforceability shall remain
in full force and effect.
12.7 AMENDMENT AND MODIFICATION. Except as otherwise expressly stated
herein, this Agreement may be amended or modified only by a writing executed by
all parties.
12.8 GOVERNING LAW, CHOICE OF FORUM AND ATTORNEY'S FEES. This Agreement
shall be construed and governed in accordance with the internal laws of the
State of California. The parties agree that this Agreement is executed and
delivered in the State of California. The parties agree that the United Nations
Convention on Contracts for the International Sale of Goods shall not apply to
this Agreement. In the event any legal action becomes necessary to enforce or
interpret the terms of this Agreement, the parties agree that such action will
be brought in the San Francisco County Superior Court or in the U.S. District
Court for the Northern District of California, in the City and County of San
Francisco, and the parties hereby submit to the exclusive jurisdiction of said
courts.
However, in order to expedite the resolution of legal disputes, bebe may,
at its sole option, elect to have this Agreement construed in accordance with
the laws and regulations of the Territory or any portion thereof, or may elect
to have such disputes arising in connection with this Agreement finally settled
under the Rules of Conciliation and Arbitration of the International Chamber of
Commerce by one or more arbitrators appointed in accordance with said Rules,
whose decision shall be binding on the parties. Such arbitration shall be
conducted in the English language. bebe shall have the right to select, in its
sole discretion, the place of arbitration within California or within the
Territory.
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In the event of a dispute between the parties, or if a party becomes
involved in litigation because of wrongful acts of the other party, the
arbitrator(s) or court will award reasonable attorney's fees to the prevailing
or innocent party. The amount will be sufficient to compensate the prevailing or
innocent party for all attorney's fees incurred in good faith.
12.9 TAXES. LICENSEE shall be responsible for the collection, remittance
and payment of any and all taxes, charges, withholding obligations, levies,
assessments or other fees of any kind imposed by any governmental authority with
respect to the manufacture, sale, importation or other dispositions of the
Products (other than taxes on the income or gross receipts of bebe). LICENSEE
shall provide certified proof of payment to bebe within ten (10) days of payment
thereof.
12.10 ENTIRE AGREEMENT. This Agreement covers all contracts and agreements
between the parties relating to the subject matter of this Agreement. All other
contracts and agreements between the parties which relate thereto are hereby
terminated.
12.11 GOVERNMENT APPROVALS AND REMITTANCES. In the event that any approval
with respect to this Agreement or any registration thereof will be required,
initially or at any time during the Term, in order to give the Agreement legal
effect, LICENSEE agrees immediately to take whatever steps may be necessary in
this respect; and any charges incurred in connection therewith shall be borne by
LICENSEE.
12.12 AFFILIATES OF LICENSEE. In the event that any affiliate of LICENSEE
participates in any respect in the enjoyment of rights or the performance of any
duties of LICENSEE hereunder, such affiliate shall be fully obligated under this
Agreement to the same extent as LICENSEE.
12.13 AUTHORITY TO MAKE AGREEMENT. Each party warrants and represents that
it has the power to enter into this Agreement and perform in accordance with the
provisions hereof and that the execution and performance of the Agreement has
been duly and validly authorized in accordance with all applicable laws and
governing instruments.
12.14 NO WAIVER. No waiver of any breach of any of the provisions of this
Agreement shall be construed to be a waiver of any succeeding breach of the same
or any other provision.
12.15 REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy.
Except as expressly provided in this Agreement or any Exhibit thereto, each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing in law or in equity or by statute
or otherwise. The election of any one or more remedies shall not constitute a
waiver of the right to pursue other available remedies.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE
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REMEDIES OF LICENSEE SHALL BE LIMITED AS PROVIDED IN SECTION 11.4.
12.16 INTERPRETATION. The parties acknowledge that this Agreement has
been jointly prepared by bebe and LICENSEE, and the language in all parts of
this Agreement shall be, in all cases, construed according to its fair meaning
and not strictly for or against bebe or LICENSEE.
12.17 OFFICIAL LANGUAGE OF AGREEMENT. The parties understand and agree
that this document has been prepared only in the English language and that the
English language is the official language of this Agreement. It is specifically
understood and agreed that no party to this Agreement will assert or allege that
it did not understand each and every term and condition of the Agreement, and
each party further acknowledges that prior to entering into this Agreement, it
had fair opportunity to seek interpretation of the Agreement in the native
language of the persons signing the Agreement.
LICENSEE shall, solely at its own cost and expense, translate into English
any and all documents which bebe has the right to examine hereunder and shall
make available to bebe both the Spanish and English versions of each document.
12.18 CONSULTATION WITH ADVISORS. Each party acknowledges that it has been
advised and has had fair opportunity to consult with its own attorneys,
accountants and other expert advisors regarding the meaning and effects of this
Agreement.
12.19 DEFINITIONS. The definitions set forth in Exhibit "A" are
incorporated herein and made a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
bebe: LICENSEE
Babe, Inc. Bebe Moda S.A. de C.V.
a California corporation
By: /s/ Manny Mashouf By: /s/ Jacobo Laniado Cattan
----------------------------- -------------------------------
Manny Mashouf Name: Jacobo Laniado Cattan
President Title: President
March 16, 1998
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LIST OF EXHIBITS
Exhibit A - Glossary
Exhibit B - Retail Store Location Approval Form
Exhibit C - Retail Store Material and Fixture Layout Approval Form
Exhibit D - Licensed Rights Approval Form
Exhibit E - Product Purchase Terms
Exhibit F - Advertising Approval Form
Exhibit G - Principals of Licensee
Exhibit H - Ownership of Licensee
Exhibit I - Monthly Retail Store Report
Exhibit J - Products
Exhibit K - Territory
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EXHIBIT A
GLOSSARY OF TERMS
"Advertising" means any communication through any medium directed to the
trade or public, including but not limited to trade and public directory
listings, store window displays, posters, point of sale materials, hardcopy
advertisements, electronic broadcasts and billboards.
"Confidential Information" has the meaning ascribed to it in Section 8.10.
"Contract Year" means (i) the twelve (12) month period beginning April 1,
1998 and through March 30, 1999, and (ii) thereafter, for the Term, each twelve
(12) month period beginning on April 1st, and ending on March 30th.
"Licensed Rights" means collectively the Marks and Property.
"Marks" means BEBE, BEBE MODA, BEBE COLLECTION; each whether alone or in
combination; provided, however, that the appearance and/or style of the Marks
may vary from time to time as specified by bebe in its sole discretion without
affecting this Agreement.
"Products" means solely the products of bebe specified on Exhibit J
attached hereto and incorporated herein by reference. bebe shall determine, in
its sole discretion, whether a particular product or article falls within the
definition of Products and bebe reserves the right, in its sole discretion, to
eliminate any design as a Product at any time so long as the design is
eliminated from bebe s lines. bebe also reserves the right to add new designs as
Products.
"Property" means the intellectual property rights now or hereafter owned by
bebe that bebe determines, in its sole discretion, to be desirable or necessary
for LICENSEE to exercise the rights and license granted in the Agreement. Such
Property shall include, without limitation, certain Products, styles, designs,
samples, patterns, colors, materials, fabrics and retail store and fixture
designs, titles, trademarks, names, logos, symbols, copyrights, art work,
labels, advertising and other promotional material, inventions, trade secrets
(patentable and unpatentable), patents and pending patent applications used in
conjunction with any of the Marks or the Products whether created by or on
behalf of bebe or by any third party engaged by bebe to create any thereof.
"Renewal Term" has the meaning ascribed to it in Section 1.2.
"Retail Sale" means a sale made at retail price to a consumer.
"Seconds" has the meaning ascribed to it in Section 4.5.
"Store" or "Stores" means free-standing, mall, and/or strip mall stores,
owned and
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operated entirely by LICENSEE that (a) carry the Products exclusively for sale
to the general public, (b) bear as their store name, exclusively, the "bebe"
service mark, and (c) conform to the requirements of bebe. "Store" or "Stores"
does not include in-store shops or duty-free shops, unless bebe gives its prior
written approval thereto.
"Term" means the Initial Term together with the Renewal Term, if
applicable.
"Territory" means solely the geographic area designated specifically in
Exhibit K attached hereto and incorporated herein by reference, as amended from
time to time pursuant to this Agreement.
"Trade Secrets" means information including a formula, pattern,
compilation, program, device, method, technique or process, that derives
independent economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value from its
disclosure or use; and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
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EXHIBIT B (Check One)
New Store _____
Remodel _____
RETAIL STORE LOCATION APPROVAL FORM
Name of Licensee/Distributor: Bebe Moda S.A. de C.V. Name of Store:__________
Proposed Opening Date:___________________________ Square Ftg:____________
Address of Store:________________________________________________________
(Including City, State)__________________________________________________
Who Owns the Store? (Circle One) LICENSEE DISTRIBUTOR SUB-LICENSEE
If there are multiple owners of the store, list the owners by percentage of
ownership, and who has the controlling interest.
1). ___________________________________ 3). _________________________________
2). ___________________________________ 4). _________________________________
THE FOLLOWING ITEMS MUST ACCOMPANY THIS FORM:
A). Photo of Store Location, and a layout of adjacent vendors.
B). Demographic Information, including a map of the area where the store will
be located.
C). Retail sales projections for the first three years.
--------------------------------- ----------------------------
Licensee/Distributor Signature bebe Signature
Approved ______ Disapproved ______
Note: All internal and external plans (including fixture layout) must be
approved prior to beginning store construction. Please be aware that no store
may be opened until bebe has given final written approval.
Comments:_____________________________________________________________________
______________________________________________________________________________
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(Check One)
New Store _____
Remodel _____
EXHIBIT C
RETAIL STORE MATERIAL AND FIXTURE
LAYOUT APPROVAL FORM
Name of Licensee/Distributor: Bebe Moda S.A. de C.V.
Name of Store:________________________________________________________________
Average Square Ftg:______________________________
New Materials Submitted: (Check One) Yes_____ No____
THE FOLLOWING ITEMS MUST ACCOMPANY THIS FORM:
A). Floor Plans showing Fixture Layout.
B). Exterior Store Front Elevation Plans with all Materials Specified.
C). Interior Elevations showing all signage, poster locations, stockroom
locations, mirrors, and all materials specified.
D). Sample and Material Board including flooring, wall treatments, hardware,
metal finishes, and paint color.
MATERIAL SAMPLES ONLY NEED TO BE SUBMITTED FOR THE FIRST STORE, OR WHEN
MAKING CHANGES IN STORE DESIGN.
------------------------------- ----------------------------------------
Licensee/Distributor Signature bebe Signature
Approved ___ Disapproved ___
Note:
-----
All changes in store design, materials, or fixture dimensions must be
re-submitted to bebe prior to beginning store construction.
Comments:_____________________________________________________________________
______________________________________________________________________________
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EXHIBIT D
LICENSED RIGHTS APPROVAL FORM
(ALL USES OF BEBE TRADEMARKS THAT ARE NOT ADVERTISING
E.G. TRIM, LABELS, STATIONARY, PACKAGING, DISPLAYS, ETC.)
Name of Licensee: Bebe Moda S.A. de C.V.
Licensed Product(s):__________________________________________________________
Description of Use:___________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___Concept Design ___Color Indication ___Finished Art ___Production Sample
___Final Sample
___Approval ___Disapproved
Comments/Suggestions:_________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________________.
If Submission is a label or hangtag, name and address of supplier:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________________.
ATTACH A SAMPLE OF USE IN THIS SPACE OR AFFIX TO A SEPARATE PAGE
---------------------------- -------------------------------
Signature of Licensee bebe Signature
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EXHIBIT E
PRODUCT PURCHASE TERMS
A. Initial Term
1) LICENSEE'S Cost: U.S. [***], net of any taxes. [***].
2) Payment Terms: For the first order, one hundred percent (100%) of
the payment is due on placing the order.
For each order thereafter, one hundred percent
(100%) of the payment is due thirty (30) days
after LICENSEE receives the Product.
3) Shipping FOB Brisbane. LICENSEE at its sole cost and
expense shall assign freight forwarder.
4) Method of Payment: In U.S. dollars by confirmed wire transfer or U.S.
cashier's check. LICENSEE shall establish a
standby letter of credit ("LC") for
U.S.$100,000.00 to cover the amounts due under
orders and bebe shall be entitled to draw on such
LC if LICENSEE has not paid in full within 30 days
of LICENSING receiving the Product.
5) Product Selection: A representative from LICENSEE shall visit bebe's
corporate headquarters on a date to be mutually
determined each month to make Product selections.
LICENSEE shall pay all its own costs and expenses
relating to such visits.
Alternatively, bebe shall send LICENSEE photos or
line sheets and swatches of currently offered
Products monthly and LICENSEE shall make its
Product selection therefrom.
B. RENEWAL TERM
Product Purchase Terms for the Renewal Term of the Agreement shall be
negotiated between bebe and LICENSEE six months prior to the expiration of the
Initial Term.
1) LICENSEE'S Cost:
[***] Confidential Treatment Requested.
28
<PAGE>
2) Terms:
3) Method of Payment:
4) Shipping:
5) Product Selection:
29
<PAGE>
EXHIBIT F
ADVERTISING APPROVAL FORM
(SUBMISSIONS MAY BE APPROVED ONLY IN WRITING AND ONLY
IF ALL CHANGES ARE MADE).
Name of licensee: Bebe Moda S.A. de C.V.
Licensed Products(s)__________________________________________________________
ARTWORK SUBMISSION
Please check the media of advertising:
_____ Full Page ad _____ Billboard _____ Other
Name of Publication:__________________________________________________________
Country:________________________ Issue Date:_________________________________
As Position (As Detailed as
Possible:_____________________________________________________________________
___ Left Hand Page ___ Right Hand Page ___ Full Page Spread
------------------------------------------------------------------------------
FOR bebe USE ONLY
Please follow the applicable instructions:
__________________________________________
__________________________________________
Special Instructions:_________________________________________________________
---------- ------------------------- -----------------
Approved Approved with Changes Disapproved
PUBLICATION SUBMISSION
Name of Publication:
(A copy of the magazine or newspaper must be included)
Frequency (Check One): ___ Daily ___ Weekly ___ Monthly ___Other
Comments/Suggestions:_________________________________________________________
______________________________________________________________________________
------------------ -------------------
Approved Disapproved
30
<PAGE>
EXHIBIT G
PRINCIPALS OF LICENSEE
BEBE MODA, S.A. DE C.V.
BOOK 92928
DATE 23 JANUARY 1998
NOTARY 129 D.F. MEXICO
LIC. IGNACIO SOTO BORGA
SOCIETY BY ADMINISTRATION: JACOBO LANIADO CATTAN
ADMINISTRATOR
WITH RIGHTS
VICTOR LANIADO CATTAN
LEGAL REPRESENTATIVE
WITH RIGHTS
MAURICIO TOVAR HERNANDEZ
COMISSARY
WITH NO RIGHTS
GENERAL MANAGER: JACOBO LANIADO CATTAN
CORPORATION : NONE
PRESIDENT : NONE
TREASURE : NONE
SECRETARY : NONE
/s/ Jacobo Laniado Cattan
31
<PAGE>
EXHIBIT H
OWNERSHIP OF LICENSEE
Equity Holder Percentage Equity
------------- -----------------
OWNERS:
JACOBO LANIADO CATTAN 50%
VICTOR LANIADO CATTAN 50%
/s/ Jacobo Laniado Cattan
32
<PAGE>
EXHIBIT I
bebe INDIVIDUAL RETAIL STORE REPORT
(MONTHLY)
Licensee/Distributor: Bebe Moda, S.A. de C.V.
Store Name:___________________________________________________________________
City:_________________________________________________________________________
Country:______________________________________________________________________
Date Submitted:_______________________________________________________________
Month Reported:_______________________________________________________________
Please note if the figures are in U.S. dollars or local currency:
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net Sales (actual) Month Increase/Decrease($) Increase/Decrease(%)
------------------ ----- -------------------- --------------------
</TABLE>
Please list reasons for increase or decrease from last year:__________________
33
<PAGE>
EXHIBIT J
PRODUCTS
Women's apparel manufactured by bebe: namely, shirts, blouses, pants,
jackets, coats, sweaters, suits and dresses.
34
<PAGE>
EXHIBIT K
TERRITORY
Mexico, its territories and possessions
35