EXHIBIT 10.1
ESTEE LAUDER INC.
767 Fifth Avenue
New York, NY 10153
April 6, 2011
Aerin Lauder Zinterhofer
New York, NY
Re:
Creative Consultant Agreement
Dear Ms. Lauder:
This Agreement ("Agreement") between Estee Lauder Inc., a Delaware Corporation, having its principal business address at 767 Fifth Avenue, New York, NY 10153, and its affiliates on behalf of the Estee Lauder brand (the “Brand”) and The Estee Lauder Companies Inc. (“the Company”) and you (“Consultant” or “you”) will confirm the terms by which you will provide your services as a creative consultant and spokesperson to the Brand.
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Scope of Work
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You shall serve as a consultant to the Brand, shall no longer be an employee of the Brand, the Company or any of its affiliates, shall have the title, Style and Image Director, and shall contribute actively to the Brand by providing the Services set forth in Section 3 below reporting to the Brand President.
2.
T
erm
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A) The initial term of this Agreement shall begin upon the execution of this Agreement by all parties and shall end on June 30, 2016 (“Term”). The Term is comprised of the First Period, the Second Period, the Third Period, the Fourth Period, the Fifth Period, and the Sixth Period. The “First Period” of this Agreement shall commence upon the execution of this Agreement by all parties and shall end on June 30, 2011. The “Second Period” shall commence on July 1, 2011 and shall end on June 30, 2012. The “Third Period” shall commence on July 1, 2012 and shall end on June 30, 2013. The “Fourth Period” shall commence on July 1, 2013 and shall end on June 30, 2014. The “Fifth Period” shall commence on July 1, 2014 and shall end on June 30, 2015. The “Sixth Period” shall commence on July 1, 2015 and shall end on June 30, 2016 (The First Period, Second Period, Third Period, Fourth Period, Fifth Period, and
Sixth Period shall individually be hereinafter referred to as a “Contract Year.”).
B) This Agreement may be terminated prior to its expiration by either party, effective upon notice to the other party, in the event that the License Agreement (as hereinafter defined) is terminated prior to June 30, 2016.
C) This Agreement may be terminated prior to its expiration by the Company (i) if Consultant materially breaches any of its terms and does not cure same within thirty (30) days after notice from the Company; (ii) if Consultant materially violates the policies contained in the Code of Conduct (as defined in Section 12(C) and does not cure same within thirty (30) days after notice from the Company; or (iii) upon the death or disability of Consultant.
D) Termination in the Event of Change of Control of Company. In the event that a person, entity or single group of persons or entities acting in concert, other than the Lauder family, related entities, or a group comprised of members of the Lauder family and/or related entities, obtains control directly or indirectly of more than 50% of the voting power or equity interest in (i) the Company or (ii) the Estee Lauder brand, Consultant may terminate this Agreement, no later than 30 days following the occurrence of such event.
E) Termination in the Event of Change of Control of Aerin LLC or JW Brands LLC. In the event that control of Aerin LLC (or all or substantially all of its assets) or of JW Brands LLC (or all or substantially all of its assets) is transferred to i) a competitor of the Brand or the Company, other than a third party that has de minimis sales of cosmetic, skincare and/or fragrance products or ii) mass, club or similar retailers in any form of distribution, including the internet, the Brand and the Company shall have the right to terminate the Agreement, no later than 30 days following the occurrence of such event. A transfer of control of JW Brands LLC (or its assets) to Aerin LLC shall not by itself trigger the Brand’s and the Company’s right to terminate the Agreement as provided in this Section 2.E.
3.
Services
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Consultant shall provide the following services (“Services”):
A) Collaborating with the Brand’s Creative Director on the Brand creative (consulting on model selection, consulting on and attending photo shoots and select Brand events) (“Consultation Services”), as requested by the Brand President. In the event of a disagreement between Consultant and the Brand’s Creative Director, the final decision will be made by the Brand President.
B) Acting as a spokesperson (“Spokesperson Services”) for the Brand, its affiliated companies, and their products, the Company, and the Lauder family for the benefit of the Brand and the Company, as requested by Global Communications with the approval of the Brand President or his/her designee, including by participating in person, via telephone, and via email in U.S. and international press interviews, press events, Brand sales conferences, and corporate events for the Company. To the extent possible, Consultant shall work with Global Communications to prepare for such interviews and events. Consultant agrees that when Consultant is providing Spokesperson Services for the Brand her primary responsibility is to focus on the Brand but she may speak about the Aerin Lifestyle Brand (as hereinafter defined) when it is relevant to the Brand or in response to questions;
C) Making personal appearances (“Personal Appearances”) (the Consultation Services, Spokesperson Services, and Personal Appearances shall collectively be referred to as “Services”) throughout the world on behalf of the Brand, its affiliated companies, and their products, the Company, and the Lauder family for the benefit of the Brand and the Company. Consultant agrees to make such Personal Appearances when reasonably requested by the Brand’s Global Communications department and as approved by the Brand President or his/her designee. Consultant further agrees that her personal appearances will be considered Personal Appearances within the meaning of the Agreement only when such Personal Appearances are authorized in writing by the Brand President or otherwise requested in writing by the Company.
D) The Company, the Brand and Consultant acknowledge that Consultant has incorporated a company, Aerin LLC, to create and/or license products (referred to herein as “Aerin Lifestyle Brand”). Consultant and the Brand agree that the resources of the Brand cannot be used in connection with the Aerin Lifestyle Brand in any respect. Accordingly,
Consultant agrees that she will utilize a Brand office space, the services of Brand personnel, or the use of Brand materials and resources only in connection with providing Services to the Brand or in connection to the license agreement between Estee Lauder Inc., Consultant, and Aerin LLC (“License Agreement”).
E) The Company and the Brand acknowledge that Consultant is a person of prominent reputation and recognized status as an expert in matters relating to style, beauty, fashion, design and ancillary topics. The Company and the Brand shall not request of Consultant the provision of any Services that would be inconsistent in any material respect with such reputation and status, or Consultant’s prominent stature in the industry, and Consultant shall be under no obligation to provide any Services hereunder, or to approve any Materials, where such Services or Materials would compromise Consultant’s reputation, status or stature.
4.
Use of Persona and Approval
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A) During the Term of the Agreement, Consultant agrees that the Brand and the Company may continue to use in all media, whether now or later developed, (“Media”) throughout the world any photos or video containing Consultant’s picture, photograph, image, name, signature, likeness, performance, voice, or other indicia of her identity (“Persona”) for the advertising, marketing, promotion and the publicity of the Brand products and services and of the history of the Brand, of the Company, and of the Lauder family for the benefit of the Brand and the Company provided that (1) the Company or the Brand has used or is currently using in any Media such photos or video and/or (2) Consultant has previously approved such photos or video prior to or during the Term. Such use shall either be consistent with the Brand’s or the Company’s historical use prior to the date hereof, or otherwise be approved in advance by Consultant.
B) Upon termination of this Agreement, Consultant grants to the Brand and to the Company the non-exclusive right in perpetuity to use in all Media throughout the world Consultant’s Persona solely in connection with public relations materials related to the history of the Brand, of the Company, and of the Lauder family for the benefit of the Brand and the Company. Consultant agrees that the Brand may use in all Media any manifestations of her Persona that (a) she approved prior to or during the Term and/or (b) the Company or the Brand had used or was currently using in any Media as of termination of this Agreement (and not in violation of this Agreement), in each case, solely in public relations
materials related to the history of the Brand, of the Company, and of the Lauder family for the benefit of the Brand and the Company without first obtaining the approval of Consultant.
C) Provided that the Brand presents to Consultant photographs taken during the Term and containing her Persona and provided that such photographs do not compromise Consultant’s reputation, status, or stature, Consultant agrees to approve or, acting reasonably, to disapprove within ten business (10) days of receipt at least half of such photographs, such approval not to be unreasonably withheld. Consultant agrees to approve or, acting reasonably, to disapprove the story board within ten (10) business days of receipt for any TV advertising films or videos containing Consultant’s Persona and created during the Term, such approval not to be unreasonably withheld, and Consultant agrees that she will not retain any approval over the final cut of such TV advertising films or videos containing Consultant’s Persona provided that such TV advertising films or videos comply with the approved storyboard.
D) Consultant understands that the Brand or the Company may arrange for other photographers and videographers to photograph and/or film behind-the-scenes photos and/or b-roll film or video footage and that the Brand or the Company may arrange for coverage of any Personal Appearances or photo / video shoots by both U.S. and International publications, who will provide their own journalist and photographer. Provided that such b-roll does not compromise Consultant’s reputation, status, or stature, the Brand shall submit such b-roll to Consultant for her approval, such approval not to be unreasonably withheld or delayed, and Consultant agrees to approve within ten (10) business days of receipt a minimum of five (5) minutes of b-roll, provided that the Brand submits to Consultant at least ten (10) minutes of b-roll. If the Brand submits to Consultant less than ten (10) minutes of footage, Consultant agrees to approve within ten (10) days of receipt at least half of the submitted b-roll. Provided that such behind-the-scenes photographs do not compromise Consultant’s reputation, status, or stature, the Brand shall submit behind-the-scenes photographs containing Consultant’s Persona to Consultant for her approval, such approval not to be unreasonably withheld or delayed, and Consultant agrees to approve or, acting reasonably, to disapprove within ten (10) days of receipt a minimum of ten (10) business such behind-the-scenes photographs, provided that the Brand submits to Consultant at least twenty (20) behind-the-scenes photographs. If the Brand submits to Consultant fewer than twenty (20) behind-the-scenes photographs, Consultant agrees to approve or, acting reasonably, to disapprove within ten (10) days of receipt as least half of the submitted behind-the-scenes photographs.
E) Consultant agrees that the Brand and the Company may continue to use in all Media throughout the world any press releases containing Consultant’s name for the advertising, marketing, promotion and the publicity of the Brand products and services and of the history of the Brand, of the Company, and of the Lauder family for the benefit of the Brand and the Company provided that Consultant has approved the use of her name in such press releases prior to or during the Term. Provided that such press releases do not compromise Consultant’s reputation, status, or stature, the Brand agrees to obtain the approval of Consultant for uses of Consultant’s name in such press releases created during the Term, and Consultant agrees to approve or, acting reasonably, to disapprove such uses within ten (10) business days of receipt. Notwithstanding the foregoing, the Brand may, without receiving Consultant's approval, make reasonable minor changes and revisions to previously approved copy and text so long as no materially new copy or text is added or the meaning or message of the press release is altered.
A) Consultant agrees to provide a minimum of thirty-five (35) full days of Service for Personal Appearances (“Service Days”) per Contract Year, except that for the First Period Consultant agrees to provide a prorated number of Service Days, the number of Service Days shall be calculated as follows: 35 times the number of full months between July 1, 2011 and the execution of this Agreement by all parties divided by 12. Consultant agrees to supply her Services for Personal Appearances at all such times, dates and locations throughout the world as the Brand, in its sole discretion, determines, subject only to Consultant’s then prior professional commitments, family obligations, and personal emergencies. Should the Brand request it, such Personal Appearances shall include appearances in London, New York, Paris, China, and other fashion and business centers. Such Service Days need not be consecutive. Both parties will make reasonable attempts to schedule Personal Appearance days around Consultant’s prior commitments and to minimize Consultant’s travel. The Brand shall have the right to carry up to two (2) unused days in any Contract Year of the Term forward to the next Contract Year of the Term. The Brand will also have the right and option to require Consultant’s Services for up to five (5) additional Service Days during each Contract Year of the Term, and shall pay Consultant the amount set forth in Section 7.C. for each additional Service Day.
B) For any Personal Appearances, subject to the Brand’s sole discretion, hair and make-up consultants (i.e. stylists) will be provided by
the Brand to Consultant for shoots and Personal Appearances, and the Brand will select such stylist(s) as the Brand deems appropriate, taking into account Consultant’s image and reputation in the industry, in consultation with Consultant and at the Brand’s expense.
C) In calculating a Service Day hereunder, the Brand shall be entitled to a maximum of twelve (12) hours, excluding hair and make-up, for shoot days and ten (10) hours, excluding hair and make-up, for all other Personal Appearance days inclusive of meals, and reasonable rest periods. The calculation of hours in a day shall exclude that which is listed in Section 5.E. herein.
D) The Brand will endeavor to minimize Consultant’s travel and to provide Consultant with not less than twenty (20) business days’ advance notice (and in no case less than ten (10) business days’ notice) as to such times, dates, places, description and anticipated duration of the Services to be provided, consistent with the provisions of this Agreement, and Consultant agrees to confirm Consultant’s availability within five (5) business days. Consultant agrees that Consultant will use all reasonable good faith efforts to honor the Brand’s requests for Consultant’s Services and if, in good faith, Consultant is not available on dates the Brand has requested Consultant agrees to provide the Brand with several suggested alternate dates as close as possible to the Brand’s requested dates. If Consultant confirms Consultant’s ability to perform Services on any days (a “Confirmed Booking”), Consultant agrees that Consultant will appear unless Consultant is unavailable as a result of illness, injury, or other cause beyond Consultant’s control. Consultant agrees that the Brand and Consultant will communicate with one another on a regular basis throughout the Term regarding the Brand’s and Consultant’s schedule and to endeavor to provide each other with as much advance notice as possible prior to the Brand requesting Services or Consultant’s making any firm professional commitments to occupy Consultant’s time when not scheduled to provide Services to the Brand.
E) For purposes of calculating the number of Service Days rendered by Consultant hereunder, all days upon which Consultant renders Services shall be considered full days except with respect to the following, none of which shall count as Service Days:
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(i)
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Travel and rest days on which Consultant does not provide any Services; except however, should the Brand require Consultant to travel outside of the United States where the time of travel from Consultant’s home to the hotel or first Personal Appearance of the Service Day exceeds six (6)
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hours, then each such additional travel day shall be counted as one half (1/2) half day of Service, and where such travel exceeds nine (9) hours, one (1) full day of Service;
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(ii)
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Spokesperson Services for which no travel from Consultant’s home, office, or hotel room is required (such as telephone interviews or in-person interviews at Consultant’s home or office), provided that such Spokesperson Services shall be reasonable in amount, shall not unduly interrupt Consultant’s business and affairs and shall be scheduled in advance to the extent practicable, it being acknowledged that Consultant shall not be obligated to engage in such Services which unreasonably interfere with her business and affairs, provided, however, that if the Brand elects to use a Service Day in connection with such Spokesperson Services, the provisions of this clause E(ii) shall not apply, and the provisions of this Agreement otherwise relating to such Services shall instead apply;
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(iii)
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Non-production days devoted to wardrobe fittings, hair and make up sessions, and pre-production meetings, provided that such non-production days do not exceed one (1) day per Personal Appearance; and
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(iv)
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Events where Consultant is given the option, at Consultant’s sole discretion, to attend or not to attend, e.g., a party or other event.
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F)
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Any Confirmed Bookings canceled by the Brand shall not count against Service days, provided the Brand gives you at least ten (10) business days’ prior notice of such cancellation and otherwise shall count as a Service Day.
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G)
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Without limiting any informal or other communications between Consultant and the Brand, the Brand will designate a liaison (the “Brand Liaison”) to act as Consultant’s primary designated contact with respect to confirmations of Service Days, bookings, advertising, shooting of b-roll footage, public relations and marketing efforts hereunder for the Brand. The Brand Liaison shall be the SVP Global Communications for the Brand. The Brand Liaison shall also be Consultant’s primary contact with respect to approvals, consulting rights and/or other formal communications either Consultant or the Brand may have with one another (not including formal legal notices under this Agreement required under the Notice section of this Agreement). The Brand may, in its sole discretion, change the Brand Liaison from time to time. It is specifically understood and agreed
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that only the Brand President can approve Consultant’s Service Days. Without limiting any informal or other communications between Consultant and the Company, the Company will designate a liaison to act as Consultant’s primary designated contact with respect to public relations efforts hereunder (the “Company Liaison”). The Company Liaison shall be the SVP Global Communications for the Company. The Company may, in its sole discretion, change the Company Liaison from time to time.
Consultant agrees that she and Consultant’s PR agency will communicate with the Brand Liaison and Company Liaison from time to time at the request of either the Brand Liaison or Company Liaison regarding Consultant’s schedule. Consultant agrees to reasonably cooperate with the Brand so that the Brand may have the opportunity, provided it does not interfere with Consultant’s activities at Consultant’s other professional events and activities, to promote the Brand, and its products, the Company, and the Lauder family for the benefit of the Brand and the Company. Notwithstanding the foregoing, Consultant’s inability to promote the Brand, and its products, the Company, and the Lauder family for the benefit of the Brand and the Company at such events shall not be deemed a breach by Consultant of this Agreement.
7.
Fee and Expenses
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The Brand agrees to pay Consultant or cause Consultant to be paid, and Consultant agrees to accept, in full consideration of: (a) all Services rendered by Consultant; (b) the right and license to use any and all Materials (as defined in Section 8.A), including, without limitation, Consultant’s Persona; (c) the use of the results of Consultant’s Services hereunder and the use of the results of the rights and license hereunder; and (d) all of the rights and options available to the Brand and Company hereunder, the following amounts:
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A.
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Fee
. Seven Hundred Thousand Dollars ($700,000) per each year of the Term, payable in equal monthly installments (“Fee”). Provided that Consultant is not in material breach of this Agreement, the Fee shall be increased 4% each Contract Year of the Term, beginning July 1, 2012. For the First Period, the Fee shall be Seven Hundred Thousand Dollars ($700,000) divided by twelve (12) and multiplied by the number of full months between July 1, 2011 and the execution of this Agreement by all parties.
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B.
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Travel
. If the Brand requires Consultant to travel to render her Services, the Brand will provide Consultant with round trip first-class transportation (or with the value of a round trip first-class air transportation ticket for Consultant to apply towards a private jet), hotel accommodations and ground transport in traveling to and from all locations at which the Brand requests Consultant’s Services, unless Consultant is already required or is planning to be present at such locations for other personal or business reasons in which case the Brand will pay its proportionate share of such travel expenses as set forth below. The value of the ticket will be based on the fare of an unrestricted first class ticket had it been purchased by the Brand on the day that the Brand notified Consultant of the Brand’s request that Consultant travel. Should Consultant be present for other business reasons where Consultant is being reimbursed for her expenses from a third party at any location at which the Brand requests Consultant’s Services, the Brand will pay its proportionate share of such expenses (e.g., one half if Consultant is present for one other party) for such days that the Brand requires Consultant’s Services. Hotel accommodations will be consistent with Consultant’s past usage when traveling on Company or Brand business and, if possible, consistent with Company policy. In connection with Consultant’s provision of Services, the Brand either will reimburse Consultant for her assistant’s reasonable travel expenses consistent with Company policy or provide Consultant’s assistant with transportation, accommodation, and ground transportation, such travel expenses consistent with Company policy.
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C.
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Additional Day Fee
. In any Contract Year of the Term, if the Brand requires Consultant to provide Services for Personal Appearances for additional Service Days as provided Section 5.A hereof, the Brand agrees to pay Consultant or cause Consultant to be paid an additional fee (“Additional Day Fee”) for each additional Service Day. The Additional Day Fee shall be payable to Consultant within ten (10) business days following Consultant’s rendition of such Services. For the First and Second Period, the Additional Day Fee shall be Twenty Thousand Dollars ($20,000). For the Third Period, the Additional Day Fee shall be Twenty-One Thousand Dollars ($21,000). For the Fourth Period, the Additional Day Fee shall be Twenty-Two Thousand Dollars ($22,000). For the Fifth Period, the Additional Day Fee shall be Twenty-Three Thousand Dollars ($23,000). For the Sixth Period,
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the Additional Day Fee shall be Twenty-Four Thousand Dollars ($24,000).
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D.
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Office and Access to Assistant
. The Brand shall provide Consultant with an office and access to an assistant, who will assist Consultant on Consultant’s Services hereunder and other Brand related business matters. The Brand, in its sole discretion, either shall assign a part time assistant to assist Consultant or shall assign a full time assistant, part of whose time shall be dedicated to assisting Consultant, such assistant to be mutually acceptable to Consultant and the Brand; the parties agree that Consultant’s current assistant shall initially be her assistant.
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E.
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Should Consultant become a member of the Screen Actors Guild and/or the American Federation of Radio and Television Artists, with respect to the production and use of any commercials produced hereunder, all compensation required under the applicable union agreements of the Screen Actors Guild and/or the American Federation of Radio and Television Artists (“Union Code”) shall be calculated at scale and shall be credited against the applicable Fee. If the scale payments pursuant to this paragraph with respect to any year of the Term exceed any year’s total Fee, the Brand will promptly pay any such excess to Consultant in accordance with the applicable Union Code.
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F.
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The Brand shall not be responsible for the payment of any Consultant’s agent’s commission in connection with the Brand’s use of Consultant’s Persona or the Services provided by Consultant as set forth herein. Consultant’s agent shall be such party as Consultant shall designate in writing and as Consultant may change from time to time in Consultant’s discretion.
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8
Ownership
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A) As between Consultant, the Brand, and the Company, all the materials produced by Consultant, the Brand, or the Company in compliance with this Agreement, including but not limited to products, collections, shades, names, visuals, and packaging, marketing, and public relations ideas, phrases, or words, scripts, or other materials (“the Materials”) will be and remain the absolute and exclusive property of the Brand or the Company. The foregoing notwithstanding, the ownership and
rights relating to any Materials produced in connection with Licensed Products (as defined in the License Agreement) or in connection with the License Agreement shall be governed by the License Agreement.
B) Consultant acknowledges that Consultant does not have, nor in the future will assert, directly or indirectly, any right, title, or interest of any kind or nature in such Materials, or in or to any component part, element, character, or characterization thereof, except as otherwise set forth herein or in the License Agreement. To the extent required under the applicable copyright laws regarding ownership of any materials produced hereunder or the content or use thereof, the product of Consultant’s Services hereunder and the Materials will be considered works made for hire or, if not legally capable of being considered as such, then and in such event Consultant hereby assigns either to the Brand or the Company any and all intellectual property rights or title, including but not limited to copyrights, trademark rights, and patent rights, Consultant may have in their respective Materials, except as otherwise set forth herein or in the License Agreement. Without limiting the foregoing, Consultant hereby waives any so called "moral rights" or "droit morale" in connection with the use of the Materials produced hereunder.
C) At no time during the Term or after shall Consultant have the right to use, to license, or to permit others to use any photos, film, video, or other Materials containing Consultant’s Persona or otherwise created at any time by the Brand or Company in connection with this Agreement, provided that at Consultant’s request, the Company will reasonably cooperate if Consultant seeks access to such Materials (it being agreed that the Company shall not be obligated to incur any expense in connection with such cooperation).
9.
Independent Contractor
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Consultant’s engagement with the Brand does not make Consultant an employee of the Brand or Company and nothing herein shall be construed as creating any relationship of employer/employee, partnership, agency, joint venture, or otherwise between the parties. Consultant acknowledges that the rendering of such Services hereunder will not entitle Consultant to employee benefits as an employee of the Brand or the Company with respect to workers' compensation, disability benefits, health, medical or life insurance programs, pension, profit sharing or other employee benefit plans or any other program or benefit maintained by the Brand or the Company. Although Consultant is considered an independent contractor, the Company will withhold all applicable federal income, state
and local income and employment taxes, including FICA, social security and any other required withholdings on all fees paid pursuant to Section 7 (a) of this agreement and issue the Consultant Form W-2 on an annual basis.
10.
Confidentiality
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Consultant acknowledges that, in furtherance of this Agreement, Consultant will receive from the Brand or Company other information which may consist of business methods, business plans and practices, identification of personnel, customers, prospective customers and suppliers, financial information, inventions, processes, methods, products, patent applications, specifications, drawings, sketches, models, samples, designs, ideas, technical information and other confidential business information and trade secrets. Consultant recognizes that these materials are valuable Brand or Company property. Consultant acknowledges the need to preserve the confidentiality and secrecy of these materials and agrees to take all necessary steps to ensure that use by Consultant will in all respects preserve such confidentiality and secrecy. Consultant shall take all commercially reasonable precautions to protect the secrecy of the materials, samples, and designs described herein prior to their commercial distribution or the showing of samples for sale. Consultant shall take all reasonable precautions to protect the secrecy of the original designs created for Brand products or for the Company prior to their advertisement, commercial distribution or the showing of samples for sale. Consultant shall not, at any time during the term of this Agreement, disclose or use for any purpose, other than as contemplated by this Agreement, any revealed or otherwise acquired confidential information and data relating to the business of the Brand or Company. Notwithstanding the foregoing, Consultant shall not be required to treat any information as confidential information under this Section 10 if such information (i) was publicly known at the time it was disclosed or becomes publicly known after disclosure without breach hereof by the Consultant; (ii) was known by the Consultant at the time of disclosure or becomes known to Consultant from a party other than the Brand or Company who has the apparent right to disclose such information to the Consultant’s knowledge after due inquiry; (iii) is independently developed by the Consultant without reliance on the disclosed confidential information; (iv) is approved for disclosure by the Brand or Company with the Brand’s or Company’s prior written consent; or (v) is disclosed by the Consultant pursuant to judicial order, requirement of a governmental agency or other operation of law, provided that the Consultant informs the Brand or Company promptly after receiving notice of Consultant’s obligation to make such disclosure, and takes reasonable steps to limit the scope of such disclosure. Confidential information provided to Consultant by Brand or
Company under any prior agreement (other than the License Agreement) shall be protected and governed as though it were provided pursuant to this Agreement, and the License Agreement shall govern in the case of information protected under such License Agreement.
11.
Exclusivity
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A) Consultant warrants, represents and agrees that throughout the Term, Consultant will not, other than for the Brand or the Company use or authorize use, directly or indirectly, of Consultant’s Persona in any manner, in any part of the world, for use in connection with any commercial, advertisement, promotion, merchandising, publicity, endorsement, or other commercial exploitation of Products other than the Brand or the Company Products. “Products” means cosmetics and fragrance products and services, which, without limitation, specifically include all skincare, makeup, fragrances, hair, body and personal care products and services, and comparable cosmetics and fragrance products and services for any other companies, individuals or entities.
B) Notwithstanding Section 11.A above, Consultant may permit the use of her Persona in connection with the License Agreement.
C) Consultant agrees that the Brand may utilize Consultant’s Services to endorse the Brand, the Company, and their products and in that connection Consultant has simultaneously executed the letter attached hereto as Exhibit A and made a part hereof.
D) Consultant agrees that she will at all times during the Term purchase and use the Brand’s products for Consultant’s, makeup or skin care needs unless the Brand does not manufacture or distribute a product or cosmetic or provide a service needed by Consultant. Nothing herein shall be deemed to prohibit Consultant from using products or cosmetics manufactured or distributed by companies other than the Brand or Company where such use is (a) on account of products or cosmetics supplied by hotels where Consultant stays, (b) on account of products or cosmetics used by spas or resorts at which Consultant may take a beauty treatment, (c) an incidental use for personal purposes, or (d) as directed by a physician, in each case as to the foregoing, provided that such use is non-public. The Brand will provide Consultant with an adequate supply of Brand products suitable for Consultant’s use. Consultant agrees that during the Term hereof, Consultant will not publicly handle any beauty products other than
those manufactured and distributed by the Brand or Company. Notwithstanding the foregoing, the Brand understands that Consultant may inadvertently handle beauty products not manufactured and distributed by the Brand and that such inadvertent handling shall not be deemed a breach of this Agreement.
E) If, during the Term, any third party, directly or indirectly, uses or threatens to use, Consultant’s Persona or the name, signature, photograph, voice, picture, likeness, or other indicia of identity of a party other than Consultant in a manner which is likely to be confused with or taken to be Consultant and such use would, if it had been authorized by Consultant, constitute a violation of this Section 11.E, Consultant shall reasonably cooperate with the Brand in the event that the Brand seeks to bring legal action in connection therewith. The Brand shall not bring any such action in the event that Consultant is pursuing such matter with commercially reasonable efforts, including due prosecution of any proceeding consistent with industry norms. If the Brand brings any such legal action, it shall keep Consultant fully informed of its actions and shall take into account the reasonable suggestions of Consultant and her counsel therewith. Consultant agrees reasonably to cooperate with the Brand and its representatives in connection with any such action, including appearing on reasonable notice and for reasonable periods at depositions and trial, as necessary, and the Brand shall reimburse Consultant for any reasonable out-of-pocket expenses Consultant incurs by assisting the Brand in any such legal action, including reasonable legal fees. Any damages recovered in an action commenced by the Brand hereunder shall be applied first against the Brand’s costs in bringing such action and thereafter shall be shared with Consultant, in a manner the Brand mutually agree to be fair and reasonable. Any days devoted by Consultant regarding such actions will not count as Service Days hereunder.
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12.
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Professional Rendition of Services and Behavior
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A) Consultant agrees to attend and participate in all appearances, rehearsals, filming, taping, recording and photography sessions scheduled in accordance with this Agreement and render Consultant’s Services hereunder in accordance with the scripts or other materials which the Brand or the Company shall furnish to Consultant for such purposes, subject to the terms of this Agreement. Consultant agrees to render Services in a competent and artistic manner to the best of Consultant’s ability and that all Consultant’s Services will be subject to the Brand’s or the Company’s reasonable approval and direction at all times, and Consultant will promptly comply with any reasonable instructions the
Brand or the Company may give Consultant in connection with the rendition of such Services.
B) Notwithstanding anything herein to the contrary, Consultant hereby acknowledges that her proper conduct and reputation are of the utmost importance to the Brand and the Company and that such conduct and behavior must at all times be consistent with the Brand’s and the Company’s dignity and high standards and must not derogate or otherwise disparage the Brand or the Company. Therefore, Consultant must at all times conduct herself with due regard for public morals and decency. Consultant warrants that she has not and will not commit any illegal or publicly obscene or indecent act or through her own malfeasance or wrongful omission become involved in any situation which, in the Brand’s or the Company’s reasonable judgment, has a materially adverse effect on her reputation or on the Brand’s or the Company’s reputation, trade name, or affiliates. If Consultant breaches this provision, and the effect of such breach is, in the Brand’s or the Company’s reasonable judgment, of sufficient magnitude to require, for commercial reasons, the discontinuance of the use of the Materials produced hereunder utilizing Consultant’s Services, then the Brand and the Company, in their reasonable judgment, shall have the right to terminate this Agreement forthwith. In such event, there shall be no further compensation payable to Consultant hereunder except with respect to any sums which may be due Consultant for Consultant’s Services then already rendered or for authorized expenses incurred by Consultant prior to the date of termination. The foregoing right shall be the Brand’s sole remedy in the event of Consultant’s breach of this paragraph, and the Brand must exercise its right to terminate within thirty (30) days of its knowledge of the act or situation, and the Brand and the Company agree to discontinue use of any Materials in which Consultant appears within a reasonable period of time following the Brand’s termination of this Agreement by reason of Consultant’s breach of this paragraph.
C) Consultant agrees that she will affirmatively acknowledge and abide during the Term by all of the policies contained in the Company’s Corporate Code of Conduct in effect during the Term and as reasonably amended from time to time (“Code of Conduct”), copies of such amended Code of Conduct to be provided promptly to Consultant. Should Consultant materially violate any of the policies contained in the Code of Conduct, the Brand may terminate this Agreement, subject to Consultant’s right to cure as set forth in Section 2.C, and the Brand and Company shall have no further obligations hereunder, except to pay the Consultant her accrued but unpaid Fee, effective upon Consultant’s receipt of such notice of termination of this Agreement.
13.
Non-compete
.
Consultant agrees that during the Term and for a period of six (6) months commencing upon the expiration of the Term or termination of this Agreement for any reason (the "Non-Compete Period"), the Consultant shall not, directly or indirectly, without the prior written consent of both the CEO and Executive Chairman of the Company, in their sole discretion, be employed by or provide consultation services or spokesperson services to any person, firm, corporation or other business enterprise, wherever located, which is engaged, directly or indirectly, in competition with the Brand or any business of the Company or any of its subsidiaries or affiliates as conducted or as proposed to be conducted at the time of the expiration of the Term or termination of this Agreement. Notwithstanding the foregoing, Consultant may be employed by or provide consultation services or spokesperson services to Aerin, LLC during such time period, provided that Aerin LLC complies with the foregoing.
14.
Unique Services
.
It is expressly understood and agreed that the Services and her other obligations to be performed by Consultant and the rights and privileges granted to the Brand and the Company hereunder are unique and not capable of replacement, giving them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law and that Consultant’s failure or refusal to perform Consultant’s Services and her other obligations hereunder may cause irreparable harm or damage. Therefore, should Consultant materially breach her obligation to perform Services or her obligations under Section 13, the Brand, the Company, and Consultant agree, subject to Section 14.B, that the following shall be the exclusive remedies available to the Brand and the Company:
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A. The right to seek to enjoin any such breach by temporary, preliminary or permanent injunctive or other equitable relief (including specific performance) against Consultant (and applicable third parties) to prevent the continuance of such failure or refusal and/or to prevent Consultant from performing services or granting rights to others in violation of this Agreement;
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B. In the event of Consultant’s willful material breach of Section 10. “Confidentiality,” Section 13. “Non-Compete,” or Section 11. Exclusivity, there shall be no limit to the remedies or damages sought by Company against Consultant, except pursuant to Section 20.C.
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C. The right to terminate this Agreement (and the License Agreement) and/or to refrain from making payments and further payments to Consultant;
D. The right to a refund from Consultant of any portion of the applicable pre-payment of the Fee, prorated to the effective date of termination. This proration shall be calculated as follows: the number of days remaining in the period of the Fee payment (as of the effective date of termination) divided by 30 days and multiplied by the applicable period’s Fee paid. Any refund due the Brand will be paid promptly by Consultant respectively unless the Brand terminates for Consultant’s death or disability, in which event Consultant shall not be obligated to pay the Brand a refund. In the event that, the prorated amount to which Consultant is entitled is more than the portion of the applicable period’s Fee already paid to Consultant as of the effective date of termination, the Brand shall promptly pay Consultant such difference;
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E. The right to recover from Consultant an amount equal to any sums received by Consultant from any other person, by reason of Consultant’s material breach of any provision of this Agreement.
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15.
Warranties and Representations
.
A. The Brand warrants and represents that (i) it has full rights and authority to execute, deliver, and perform its obligations under this Agreement without violating the law or rights of any third party, and (ii) it will comply with all applicable federal, state, and local laws, regulations, and ordinances.
B. Consultant warrants and represents that:
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(i)
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The execution, delivery and performance by Consultant of this Agreement is fully within Consultant’s power and the Brand’s exercise of their rights under this Agreement is not in conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any agreement by which Consultant may be bound or in contravention of any laws, regulations, Union Code or other professional obligations applicable to Consultant’s Services;
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(ii)
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Consultant will perform Consultant’s services diligently
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and in a professional manner consistent with general industry standards and practices; and
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(iii)
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Consultant will not engage in any act or omission that might tend to (a) injure the success of the Brand, or any of the Brand Products, or (b) bring the Brand or the Brand Products into public scandal or disrepute, or (c) otherwise disparage the Brand or any the Brand Products.
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16.
Indemnification
.
A. Consultant agrees to defend, indemnify and hold the Brand and their directors, officers, employees, agents, assigns, distributors, and licensees harmless from and against all demands, claims and liabilities (including reasonable attorneys' fees and expenses) arising from or relating to (1) any information or materials (oral or written) furnished by Consultant to the Brand in connection with the Services performed under this Agreement, (2) any breach of any representations or warranties made by Consultant herein, or (3) any act or omission by Consultant or Consultant’s employees, agents, unless it shall be determined that the claim arose from the wrongful conduct of the Brand, including its gross negligence, recklessness or willful misconduct.
B. The Brand agrees to defend, indemnify and hold the Consultant harmless from and against all demands, claims and liabilities (including reasonable attorneys' fees and expenses) arising from or relating to (1) Materials prepared by the Brand, (2) the Brand products advertised in such Materials, or (3) or actions or omissions of the Brand (including its employees and agents), in connection with the Services performed under this Agreement.
17.
No Injunction
. The Company and the Brand acknowledge that Consultant’s image, likeness, stature and reputation are unique and not capable of replacement by Consultant. In no event during the Term hereof, except as set forth in the next sentence, shall Consultant have any right whatsoever to enjoin the distribution or exploitation by the Brand of the Materials produced hereunder. Notwithstanding the foregoing, Consultant may, (a) either during the term or thereafter, seek an injunction to enjoin the distribution by the Brand or Company of any Materials that compromise Consultant’s reputation, status or stature, to enjoin a misuse by the Brand or Company of the Consultant’s Persona in connection with goods or services that are not Licensed Products (as defined in the License Agreement) or (b) following the term, seek injunction to enjoin the use of Materials in violation of this Agreement. The foregoing shall not limit Consultant’s other remedies, whether in law or equity.
18.
Breach
. If either party to this agreement at any time commits a material breach of this Agreement or is unable, unwilling, fails or refuses to fulfill their respective obligations, then the non-breaching party may terminate this Agreement on not less than twenty (20) days’ written notice; provided, however, that this Agreement shall not terminate if the party in breach has cured the breach of which it has been notified prior to the expiration of the aforesaid notice period. Without limiting the foregoing, it is
expressly understood that the cure period shall not apply to material breaches by Consultant of the exclusivity provisions set forth in Section 11 or the Professional Rendition of Services and Behavior set forth in Section 12 herein. Nor shall there be any cure period on Consultant’s behalf in the event Consultant refuses to commence performance for a Confirmed Booking in violation of this Agreement, or after having commenced performance, Consultant discontinues such performance, except as may be due to Consultant’s bona fide illness, disability, or “force majeure” as hereinafter defined.
19.
No Obligation
. The Brand shall not be required to utilize Consultant’s Services or the product of Consultant’s Services, it being understood that the Brand shall nonetheless be obligated to make the payments set forth in Section 7.
20.
General
.
A. Force Majeure. Neither party shall be liable to the other for any failure, inability or delay in performing hereunder if caused by any cause beyond the reasonable control of the party so failing, including without limitation strikes, boycotts, war, acts of God, labor troubles, riots, delays of commercial carriers, restraints of public authority; but due diligence shall be used in curing such cause and in resuming performance.
B. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
C. Limitation of Damages. EXCEPT IN THE CASE OF AN INTENTIONAL AND MATERIAL BREACH BY A PARTY, IN NO EVENT SHALL EITHER PARTY SEEK OR BE LIABLE FOR PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL ENHANCED, OR TREBLED DAMAGES, ARISING FROM ANY DISPUTE, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES WHETHER SUCH DAMAGES ARE CLAIMED FOR BREACH OF CONTRACT, NEGLIGENCE, OR ANY OTHER TORT CLAIM IN LAW OR IN EQUITY.
D. Notices. Any notice to be given by the Company or the Brand to Consultant hereunder will be deemed sufficiently given if in writing and delivered personally or sent by certified mail or facsimile transmission to
Consultant, at the addresses set forth above, with a copy to Wachtell, Lipton, Rosen & Katz, Attn: Andrew J. Nussbaum, Esq. (f: 212 403-2269; e:
ajnussbaum@wlrk.com
) and if the notice is to be given to the Brand, then by Consultant forwarding same in the manner herein set forth to Brand President, at the address set forth above with a copy to Sara Moss, Esq., Executive Vice President and General Counsel, The Estee Lauder Companies Inc., 767 Fifth Avenue, New York, NY 10153 (p: 212-572-3980, f:212-572-3989, e: smoss@estee.com).
E. Applicable Law. This Agreement is made in the State of New York and shall be construed and interpreted in accordance with the internal laws of the State of New York, applicable to contracts made and performed entirely therein. Consultant agrees and consents that jurisdiction and venue of all matters relating to this Agreement shall be vested exclusively in the Federal courts located in the Southern District of New York and the state courts within the Borough of Manhattan, State of New York.
F. Intentionally Omitted.
G. Assignment. Consultant may not assign Consultant’s obligations under this Agreement. The Brand may assign this Agreement to any parent, subsidiary, or affiliated company, so long as such entity is under common control with the parent company of the Brand. Any such assignment shall not relieve the assigning party hereto of its obligations hereunder.
H. No Waiver. Any failure by the Brand, the Company, or Consultant to exercise any right granted herein upon the occurrence of any contingency set forth in this Agreement will not in any event constitute a waiver of any such right upon the occurrence of any such contingency.
I. Binding Nature. This Agreement shall be binding upon Consultant and her successors, heirs, guardians, representatives and executors.
J. Assistance. Consultant shall, during and after termination of services rendered, upon reasonable notice, furnish such information and assistance to the Brand as may be reasonably required by the Brand in connection with work performed by Consultant. Such assistance following termination shall be furnished at the same level of compensation as provided in Paragraph 7 hereof, except that such assistance shall be provided without compensation (1) for the execution of documents required to perfect the Brand’s rights under Paragraph 8 above; and (2) to the extent
that such assistance is required because of an unreasonable failure of Consultant to provide such information or assistance during the term of the Agreement.
K. Right to Counsel. Consultant acknowledges that she has had the opportunity to retain legal counsel of Consultant’s own choosing in connection with the negotiation and execution of this Agreement and has either done so or have knowingly waived Consultant’s right to do so. Both parties have, through counsel, been fully represented and negotiated the terms and conditions of this Agreement and none of the provisions shall be construed or interpreted based on any contention as to which party was responsible for drafting.
L. Survival of Terms. The warranties, representations, the indemnity rights, the provisions set forth in Section 8, the provisions set forth in Section 10, and other remedies afforded to each party to this Agreement and any other terms which must survive to give effect to their meaning, shall survive the termination and/or expiration of this Agreement.
M. Severability of Terms. If any provision of this Agreement is invalid or unenforceable, that provision shall be deemed stricken from this Agreement and replaced with a provision that, to the maximum extent permitted by law, is enforceable and otherwise consistent with the stricken term. The balance of this Agreement shall remain in effect, and if any provision is inapplicable to any particular circumstance, it shall nevertheless remain applicable to all other circumstances.
21.
Complete Agreement
.
This document is a complete and exclusive statement of the terms of this Agreement and may not be changed orally but only by a writing signed by both parties hereto. Consultant’s signature at the end hereof, together with the Brand's, will constitute this a binding agreement between Consultant and the Brand.
If the foregoing is satisfactory and reflects Consultant’s understanding of the business arrangement, please sign and return this Agreement to the Brand.
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Sincerely,
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Estee Lauder Inc.
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By:
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/s/ Sara Moss
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Name:
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Sara Moss
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Title:
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Executive Vice President and General Counsel
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Accepted and Agreed to:
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By:
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/s/ Aerin Lauder Zinterhofer
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Name:
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Aerin Lauder Zinterhofer
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Date:
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April 6, 2011
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Exhibit A
April 6, 2011
Estée Lauder Inc.
767 Fifth Avenue
New York, NY 10153
Gentlemen:
Pursuant to a separate agreement (“Agreement”), you have retained my services in connection with the production of various materials in which I may deliver testimonials for several of your products and services (“Products,” as defined in the Agreement).
I hereby certify to you that all of the statements attributed to me, and which I have approved as my personal beliefs are true and an expression of my actual personal belief.
I endorse the Products, prefer them to other competitive brands, and promise that I will continue to purchase and use said Products for so long as you have the right to use the materials produced pursuant to the Agreement.
Nothing contained in this letter shall constitute an amendment or addition to the Agreement, the terms and conditions of which shall remain in full force and effect.
Very truly yours,
Aerin Lauder Zinterhofer
Witness:
Name (Type or Print):
Exhibit 10.2
LICENSE AGREEMENT
among
AERIN LLC,
AERIN LAUDER ZINTERHOFER
AND
ESTEE LAUDER INC.
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ARTICLE 1.
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DEFINITIONS
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1
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ARTICLE 2.
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GRANT
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4
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2.1
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License.
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4
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2.2
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Sublicense
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5
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2.3
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Territory
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5
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ARTICLE 3.
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TERM OF THE AGREEMENT
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5
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3.1
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Initial Term
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5
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3.2
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Renewal Term
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5
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ARTICLE 4.
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AERIN LLC’S AND ALZ’S ASSISTANCE
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5
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4.1
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Development of the Aerin Lifestyle Brand
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5
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4.2
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Development of Licensed Products
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6
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4.3
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PR Participation
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6
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4.4
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Exclusivity
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6
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4.5
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Non-Disparagement
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7
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4.6
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Reputation
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7
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4.7
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Acknowledgment of EL’s Rights
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7
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4.8
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EL Acknowledgment of Aerin LLC’s Rights
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7
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4.9
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Acknowledgment
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7
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4.10
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EL Development and Marketing Team
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8
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ARTICLE 5.
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APPROVALS
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8
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5.1
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Approvals
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8
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5.2
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Licensed Products, Packaging and A&P Materials.
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8
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ARTICLE 6.
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DESIGN AND MANUFACTURING
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9
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6.1
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Marketing Plan.
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9
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6.2
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Overall Commitment to Quality.
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9
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6.3
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Monitoring Program
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9
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6.4
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Compliance with Applicable Laws
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10
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6.5
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Intellectual Property Rights
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10
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6.6
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Development and Manufacture
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10
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ARTICLE 7.
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SALES AND MARKETING
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10
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7.1
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Exploitation
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10
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7.2
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Product Development Calendar; Quarterly Meetings
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10
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7.3
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Product Launches
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11
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7.4
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Distribution.
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11
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7.5
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Products for Aerin LLC’s Use and Resale.
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11
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7.6
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Disposal of Seconds
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12
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7.7
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Disposal of Returns
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12
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ARTICLE 8.
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ADVERTISING AND PROMOTION
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12
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8.1
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EL’s Minimum Advertising and Promotion Expenditure
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12
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8.2
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Aerin LLC’s Brand Building Requirements
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12
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8.3
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Public Announcements
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12
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ARTICLE 9.
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ROYALTIES
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13
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9.1
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Royalty Amount.
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13
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9.2
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Royalty Statements
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13
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9.3
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Weekends and Holidays
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13
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ARTICLE 10.
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MANNER OF PAYMENT, INTEREST, BOOKS AND RECORDS, INSPECTION
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13
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10.1
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Manner of Payment
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13
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10.2
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Taxes
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14
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10.3
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Books and Records
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14
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10.4
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Underpayments
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14
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10.5
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Overpayments
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14
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10.6
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Interest
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14
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ARTICLE 11.
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REPRESENTATIONS AND WARRANTIES
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15
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11.1
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Representations and Warranties of EL
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15
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11.2
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Representations and Warranties of Aerin LLC
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15
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ARTICLE 12.
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CONFIDENTIALITY
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16
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12.1
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Confidentiality
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16
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ARTICLE 13.
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INTELLECTUAL PROPERTY
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17
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13.1
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Rights to the Intellectual Property.
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17
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13.2
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Protecting the Licensed Trademarks and Ancillary IP.
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18
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13.3
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Compliance with Notice and Other Requirements
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19
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13.4
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Infringement
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19
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13.5
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Use of Licensed Trademarks on Business Materials
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20
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13.6
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Further Assurances
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20
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ARTICLE 14.
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INSOLVENCY
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20
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14.1
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Effect of Proceeding in Bankruptcy, etc.
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20
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14.2
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Rights Personal
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20
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14.3
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Trustee in Bankruptcy
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20
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ARTICLE 15.
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EXPIRATION AND TERMINATION
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21
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15.1
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EL’s Right to Terminate
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21
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15.2
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Aerin LLC’s Right to Terminate
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21
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15.3
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Effect of Expiration or Termination.
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22
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ARTICLE 16.
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RELATIONSHIP BETWEEN THE PARTIES
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23
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16.1
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No Agency
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23
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ARTICLE 17.
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INDEMNIFICATION AND INSURANCE
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23
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17.1
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Indemnification by EL
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23
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17.2
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Indemnification by Aerin LLC
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23
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17.3
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Insurance.
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24
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ARTICLE 18.
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NOTICES
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25
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18.1
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Manner of Notice
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25
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ARTICLE 19.
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SUSPENSION OF OBLIGATIONS
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26
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19.1
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Suspension of Obligations (Force Majeure)
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26
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ARTICLE 20.
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CHANGE OF CONTROL
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26
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20.1
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Termination in the Event of Change of Control of Aerin LLC or JW Brands LLC
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26
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20.2
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Termination in the Event of Change of Control of EL.
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26
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ARTICLE 21.
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MISCELLANEOUS
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27
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21.1
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Benefit
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27
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21.2
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Entire Agreement; Amendment
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27
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21.3
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Non-Waiver
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27
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21.4
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Assignment by EL
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27
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21.5
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Assignment by Aerin LLC
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27
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21.6
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Non-Solicitation
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27
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21.7
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Severability
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28
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21.8
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Governing Law
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28
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21.9
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Jurisdiction
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28
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21.10
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Injunction.
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28
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21.11
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Mediation.
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28
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21.12
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Exhibits and Schedules
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28
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21.13
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Headings
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28
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21.14
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Counterparts
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29
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Signature Block
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30
|
LICENSE AGREEMENT
THIS License Agreement (“Agreement”) is entered into as of the 6th day of April, 2011, by and among AERIN LLC, a Delaware Limited Liability Company, having its offices in New York, New York (“Aerin LLC”), and AERIN LAUDER ZINTERHOFER (“ALZ”) on the one hand and ESTEE LAUDER INC., a Delaware corporation, having its offices at 767 Fifth Avenue, New York, New York 10153 (“EL”) on the other, with reference to the following premises.
PREMISES
A. ALZ is the sole owner of Aerin LLC as of the date hereof.
B. Aerin LLC has acquired from JW Brands LLC, a Delaware limited liability company wholly owned by ALZ (“JW Brands”), certain exclusive rights to use and authorize the use of the trademark “AERIN” in connection with certain products and services, including Licensed Products (as defined below).
C. ALZ, Aerin LLC and certain of its Affiliates (whether now existing or hereafter formed) are committed to developing, marketing and selling, either directly or through licensees, the Aerin Lifestyle Brand (as defined below).
D. EL and its Affiliate Estee Lauder Cosmetics Ltd. are the owners of, and have established goodwill in and to, the trademarks ESTEE LAUDER, LAUDER and EL Logo, among others (collectively the “EL Trademarks”).
E. EL has extensive experience manufacturing, distributing, selling, advertising and promoting fragrances, cosmetics, skin care products, grooming products, toiletries and related products with high standards of quality.
F. JW Brands is the owner, and, pursuant to a certain license between JW Brands and Aerin LLC dated as of December 1, 2010 (the “Master License Agreement”) Aerin LLC is the exclusive licensee, of the AERIN, A logo, and related trademarks, which trademarks EL desires to use on and in connection with the manufacture, distribution, sale, advertising and promotion of Licensed Products in the Territory (as defined below) and Aerin LLC is willing and has the authority to grant an exclusive license to EL in that regard, subject to the terms and conditions set forth below.
NOW, THEREFORE
, in consideration of these premises and the mutual covenants herein expressed, and for other good consideration, which the parties hereby acknowledge, the parties hereby agree as follows.
ARTICLE 1.
DEFINITIONS
1.1
A&P Materials
shall mean all labels, tags, tickets, collateral, materials used in Advertising and Promotion, and all other forms of identification affixed to or connected with the Licensed Products.
1.2
Advertising and Promotion
shall mean the advertisement, promotion and marketing of the Licensed Products, including, to the extent used in connection with the Licensed Products,
“blow-ins,” retail statement enclosures, scented remit envelopes, sampling, in-store and point-of-sale visuals and materials, store advertising, in-stock scented vehicles, scent strips, co-op advertising, store catalogs, promotional sweepstakes or gifts-with-purchase and the like, demonstrations by floor salespersons and selling specialists, in-store support/field selling, in-store design and amortization of counter construction, website design and construction and other store promotion expenses, pop-up shops, shop-in-shops, direct mail advertising, print advertising, television-related expenses, radio advertising, on-line, electronic and wireless advertising, in-store selling locations, creative and brand development costs, usage rights, general public relations, in-store testers, displays and other related visual materials, personal appearances and other forms of promotional advertising currently known or later invented.
1.3
Aerin Lifestyle Brand
shall have the meaning assigned to such term in Section 4.1.
1.4
Affiliate
shall mean, with respect to any person, any association, corporation, partnership, joint venture or other entity a majority of whose issued and voting shares or equity interest is owned or controlled directly or indirectly by such person, is under common control with such person, or owns or controls a majority of the voting shares or equity interest directly or indirectly of such person. For purposes of this Agreement, ALZ and Aerin LLC shall not be deemed to be Affiliates of ELC, and ELC and its subsidiaries shall not be deemed to be Affiliates of ALZ and Aerin LLC.
1.5
ALZ Identifiers
shall mean ALZ’s name, signature, photograph, image, likeness, voice, performance, biographical information and/or other indicia of her identity as mutually agreed.
1.6
Ancillary Intellectual Property
or
Ancillary IP
shall mean all copyrights, design patents and trade dress rights, which exist or which may be created in the future, in or to the Packaging and A&P Materials for or used in connection with the Licensed Products.
1.7
Annual Period
shall mean the period beginning as of the date above through June 30, 2013, and, thereafter, each twelve-month period beginning on July 1 and ending on June 30.
1.8
Authorized Distributors
shall mean any company or companies (not including an Affiliate of EL) granted the right by EL or its Affiliates pursuant to the terms of this Agreement to distribute and sell the Licensed Products in one or more specific countries in the Territory.
1.9
Capsule Cosmetics Collection
shall mean a limited line of Cosmetic Products sold under the Licensed Trademarks whether alone or in conjunction with (or as a sub-brand of) the Estee Lauder brand.
1.10
Core Beauty Products
shall mean cosmetics, fragrances, toiletries, skin care, hair care, gift sets and value sets consisting of any of the foregoing, beauty accessories and products and services related to all of the foregoing, all to the extent bearing or sold under the Licensed Trademarks.
1.11
Cosmetic Products
shall mean Licensed Products that constitute cosmetics products as that term is understood in the industry, including without limitation color cosmetics, skin care, toiletries, hair care and beauty accessories.
1.12
EL Formulas
shall have the meaning assigned to such term in Section 6.5.
1.13
EL Trademarks
shall have the meaning assigned to such term in Premise D.
1.14
EL’s Travel Policy
shall mean the Estee Lauder Companies, Inc. Travel, Entertainment & Business Expense Policy as amended from time to time.
1.15
Fragrance Products
shall mean Licensed Products that are primarily marketed as fragrance products as that term is understood in the industry, including without limitation, cologne, perfume and fragrance ancillaries.
1.16
Gross Sales
shall mean the total for any period of the invoiced amount of Licensed Products shipped by or on behalf of EL or its non-retail Affiliates to Authorized Distributors, if any, and retailers, before any deductions for discounts and returns, insurance and freight.
1.17
Initial Term
shall have the meaning assigned to such term in Section 3.1.
1.18
Inventory
shall mean EL’s inventory of Licensed Products and related work in progress (including Licensed Products and work in progress in possession of EL’s Affiliates, third party manufacturers and sub-contractors).
1.19
Licensed Products
shall mean Core Beauty Products and Non-Core Beauty Products.
1.20
Licensed Trademarks
shall mean (a) the trademarks set forth in Exhibit A attached hereto, (b) any other trademark now or in the future associated with JW Brands, Aerin LLC and/or ALZ, (c) New Secondary Marks (as defined below), and (d) all variants of any of the foregoing, all as approved by Aerin LLC.
1.21
Licensee’s Outlet Stores
shall have the meaning assigned to such term in Section 7.6.
1.22
Lifestyle Licensees
shall mean any third parties (other than EL or Affiliates of Aerin LLC)
licensed by Aerin LLC to manufacture and sell high-end lifestyle, accessories and fashion products or services under the Aerin Lifestyle Brand.
1.23
Net Sales
shall mean Gross Sales of Licensed Products by EL or its Affiliates, excluding Sales to Aerin LLC made pursuant to Section 7.6 herein and/or sales through Licensee’s Outlet Stores, less (to the extent such amounts were included in Gross Sales) (a) actual credits for returns, (b) actual, reasonable and customary trade discounts, bonification payments outside the United States and, to the extent they do not subsidize products other than Licensed Products, price allowances (excluding advertising allowances and co-op advertising), (c) actual shipping costs on Internet sales invoiced by EL, and (d) sales tax, if any.
1.24
New Secondary Marks
shall mean trademarks to be used as product names on Licensed Products, such marks subject to the prior approval of Aerin LLC.
1.25
Non-Core Beauty Products
shall mean cosmetic bags sold empty, tote bags, and fragranced candles and products and services customarily associated with all of the foregoing, all to the extent bearing or sold under the Licensed Trademarks.
1.26
Other Prestige Trademarks
shall mean trademarks associated with prestige lines of lifestyle and other luxury goods of the types, quality and reputation substantially similar to the lifestyle and other luxury goods sold under the marks Porthault, Chanel, Hermes, Prada, Armani, Louis Vuitton, Gucci and Christian Dior as of the date hereof.
1.27
Packaging
shall mean product packaging for Licensed Products including primary and secondary packaging as those terms are understood in the industry.
1.28
Prestige Retailers
shall mean department stores, specialty stores, store-in-store concessions in department and/or specialty stores, perfumeries, prestige catalogs, travel retail, Internet, mobile or other digital media channels of EL or its Affiliates, Aerin LLC or its Affiliates or any of their respective retail partners and such other distribution channels as determined by EL in its discretion following consultation with Aerin LLC and consistent with the high-end image of the brand.
1.29
Product Development Calendar
shall have the meaning assigned to such term in Section 7.2.
1.30
Product Launch
shall mean the availability of Licensed Products at retail.
1.31
Renewal Term
shall have the meaning assigned to such term in Section 3.2.
1.32
Renewal Threshold
shall have the meaning assigned to such term in Section 3.2.
1.33
Royalty Amount
shall have the meaning assigned to such term in Section 9.1.
1.34
Sales to Aerin LLC
shall have the meaning assigned to such term in Section 7.5.
1.35
Term
shall mean the Initial Term and any Renewal Terms.
1.36
Territory
shall have the meaning assigned to such term in Section 2.3.
ARTICLE 2.
GRANT
2.1
License.
a.
Subject to the terms and conditions contained herein, Aerin LLC and ALZ grant to EL during the Term an exclusive license to use the Licensed Trademarks, ALZ Identifiers and Ancillary IP in connection with the manufacture, distribution, sale, advertising and promotion of the Core Beauty Products in the Territory subject to the approval of Aerin LLC, in accordance with Article 5.
b.
Subject to the terms and conditions contained herein, Aerin LLC and/or ALZ grant to EL during the Term a non-exclusive license to use the Licensed Trademarks, ALZ Identifiers and Ancillary IP in connection with the manufacture, distribution, sale, advertising and promotion of the Non-Core Beauty Products in the Territory subject to the approval of Aerin LLC, in accordance with Article 5.
c.
Any rights not expressly granted hereunder are reserved by Aerin LLC and ALZ, as the case may be.
2.2
Sublicense
.
No right for EL to sublicense is granted with respect to the Licensed Trademarks, ALZ Identifiers and Ancillary IP for the manufacture of Licensed Products, except that EL may authorize an Affiliate of EL and/or a third party to use the Licensed Trademarks, ALZ Identifiers and Ancillary IP in the manufacture of Licensed Products on behalf of and solely for sale to EL and/or its Affiliates.
2.3
Territory
.
The territory covered by this Agreement (the “Territory”) shall be worldwide.
ARTICLE 3.
TERM OF THE AGREEMENT
3.1
Initial Term
.
The initial term of this Agreement will commence as of the date hereof and continue for five (5) Annual Periods (the “Initial Term”), unless sooner terminated in accordance with the terms of this Agreement.
3.2
Renewal Term
.
a.
This Agreement shall automatically renew for three (3) additional five (5) year periods (each a “Renewal Term”), provided that: (1) EL does not give written notice of its intent not to renew at least twelve (12) months before the end of the Initial Term or the then-current Renewal Term (as applicable); and (2) Net Sales for the final Annual Period of the then current term (i)(a) are reasonably projected to equal or exceed the applicable Renewal Threshold (as defined below) or (b) as of six (6) months before the end of the applicable Term, are reasonably projected to equal at least 50% of the Renewal Threshold
and
(ii) no later than such time, EL elects to cure any shortfall by paying to Aerin LLC (within 45 days of the end of the final Annual Period) royalty on the difference between the Renewal Threshold amount and actual Net Sales for such Annual Period (the “Cure Payment”) (such election being deemed to occur where clause (1) is satisfied). The percentage to be used in calculating such royalty shall be determined by calculating the weighted average of the royalty paid by EL to Aerin LLC during the final Annual Period. For purposes of this provision, the “weighted average” shall be calculated as follows: total Royalty Amount paid by EL during final Annual Period divided by total Net Sales during final Annual Period.
b.
The “Renewal Threshold” for the first Renewal Term shall be fifteen million dollars ($15,000,000). Provided that Aerin LLC business has commercialized at least three (3) third party licenses for the manufacture, sale and distribution of the Aerin Lifestyle Brand (for avoidance of doubt, excluding the license with EL), the Renewal Threshold for the second and third Renewal Terms shall be increased as follows: the Renewal Threshold for the second Renewal Term shall be twenty million dollars ($25,000,000) and the Renewal Threshold for the third Renewal Term shall be thirty million dollars ($30,000,000).
ARTICLE 4.
AERIN LLC’S AND ALZ’S ASSISTANCE
4.1
Development of the Aerin Lifestyle Brand
.
Within eighteen (18) months of execution hereof, Aerin LLC shall use commercially reasonable efforts, either directly or in cooperation with an Affiliate of Aerin LLC, to develop and, directly or through Lifestyle Licensees,
manufacture and sell commercially reasonable quantities of products and services other than Core Beauty Products under some or all of the Licensed Trademarks (the “Aerin Lifestyle Brand”). All such products and services shall meet the quality standards set forth in Section 6.2(a). The parties hereto agree that “commercially reasonable quantities” shall mean at least one line of products (such as eyewear, accessories and/or home products). Under no circumstances shall the resources of EL and/or its Affiliates be used to develop, manufacture, market and/or sell the Aerin Lifestyle Brand.
4.2
Development of Licensed Products
.
EL shall develop all product formulas, package designs, creative materials, and, if applicable New Secondary Marks for Licensed Products in consultation and cooperation with Aerin LLC. Promptly after execution hereof Aerin LLC shall designate ALZ and members of its design staff to collaborate with EL personnel to develop Licensed Products (including Packaging) and A&P Materials. All Licensed Products (including Packaging) and all A&P Materials shall be approved by Aerin LLC in accordance with Article 5. ALZ and the appropriate officer of Aerin LLC shall be invited to attend and participate in all material meetings related to the design of Licensed Products and Packaging and/or the creation of A&P Materials and, on reasonable request, shall receive periodic updates related to the foregoing. EL shall pay all reasonable travel expenses in connection with ALZ’s obligations under this Section 4.2 in compliance with EL’s Travel Policy at the level of a Division Head (as that term is used in EL’s Travel Policy) provided that ALZ’s air and hotel accommodations will be consistent with ALZ’s past usage when traveling on EL business and, if possible, consistent with EL’s Travel Policy.
4.3
PR Participation
.
The parties agree that the participation of ALZ is necessary for the promotion of the Licensed Products. ALZ shall appear at mutually agreeable events related to the promotion of Licensed Products, and, subject to ALZ’s professional availability, shall make no less than ten (10) personal appearances during each Annual Period during which there is a Product Launch of: (1) any line of Licensed Products that EL is required to launch under the Agreement; and/or (2) any Additional Product that EL agrees to launch. Such personal appearances may include appearances at store launches, interviews, press conferences and other media events. EL shall pay all reasonable travel expenses in connection with ALZ’s obligations under this Section 4.3 in compliance with EL’s Travel Policy at the level of a Division Head provided that ALZ’s air and hotel accommodations will be consistent with ALZ’s past usage when traveling on EL business and, if possible, consistent with EL’s Travel Policy.
4.4
Exclusivity
.
During the Term, Aerin LLC and ALZ shall not authorize or permit the use of the Licensed Trademarks, ALZ Identifiers or Ancillary IP on behalf of any cosmetics or skin care company or on or in connection with any product or service that constitutes a Core Beauty Product and directly or indirectly competes with the current products of EL and/or its Affiliates. Moreover, Aerin LLC and ALZ shall not render any creative services, give any testimonials or endorsements in any advertising in any medium, or engage in any marketing, advertising, and/or promotional activities on behalf of any cosmetics or skin care company or on or in connection with any product or service that constitutes a Core Beauty Product or competes with the current products of EL and/or its Affiliates. For avoidance of doubt, nothing herein is intended to preclude Aerin LLC, ALZ and/or Lifestyle Licensees from any such activities related to Non- Core Beauty Products, or to preclude charitable endeavors or participating in industry panels, publications, events and conferences.
4.5
Non-Disparagement
.
During the Term and for two (2) years thereafter, no party shall, directly or indirectly, make any public statement or representation regarding its or his/her opinion of the other(s), or its Affiliates or their products in which such person disparages such persons or products, other than statements contained in and relevant to any claim or defense contained in a pleading filed in connection with a court, arbitral or mediation proceeding between the parties to enforce or judicially construe this Agreement or otherwise involving the parties hereto, or which may be required by law. Nothing herein shall preclude either party from making true statements of fact.
4.6
Reputation
.
ALZ’s conduct shall be with due regard to public conventions and morals, and ALZ has not and shall not commit any act that, in EL’s reasonable judgment, has a materially adverse effect on the goodwill associated with the Licensed Trademarks and/or EL Trademarks. If (i) ALZ’s obligation under the preceding sentence is breached or (ii) ALZ dies, ceases to be active in Aerin LLC, or suffers a material disability that impairs her ability to provide creative services hereunder or in connection with the Aerin Lifestyle Brand for a period of six (6) months, EL, in its sole discretion, may terminate this Agreement on no less than three (3) months written notice to Aerin LLC, such notice to be provided no later than thirty (30) days following the date that EL has actual knowledge of the applicable trigger for termination.
4.7
Acknowledgment of EL’s Rights
.
Aerin LLC and ALZ acknowledge EL’s rights in and to the EL Trademarks including without limitation the LAUDER name and trademark. Aerin LLC and ALZ shall not authorize the use of or use in any manner (whether or not constituting a trademark use), including without limitation as part of a domain name, on products or in marketing, advertising and/or promotional materials and/or to sell the Aerin Lifestyle Brand or other products or services, the EL Trademarks, including without limitation, the LAUDER name, the name AERIN LAUDER or the phrase AERIN BY AERIN LAUDER, in each case, without prior written consent of both the CEO and Executive Chairman of the Estee Lauder Companies Inc(“ELC”) in their sole discretion, ELC to provide such approval or disapproval within twenty (20) business days after receipt of such request in writing. Each proposed use shall be considered on a case by case basis and approval by ELC of a particular use shall not be construed as approval of future uses that differ from a previously approved use in a material respect. Notwithstanding the foregoing, nothing herein is intended to prevent ALZ from using the “Aerin Lauder” name in a strictly personal capacity. (By way of example, to identify herself as the founder or principal of Aerin LLC.)
4.8
EL Acknowledgment of Aerin LLC’s Rights
.
EL acknowledges the rights of JW Brands and Aerin LLC in and to the Licensed Trademarks
including without limitation the AERIN name and trademark, and EL and its Affiliates shall not use in any manner (whether or not constituting a trademark use), including without limitation on products or in marketing, advertising and/or promotional materials, the Licensed Trademarks (including without limitation the AERIN name and trademark) except as expressly permitted by this Agreement.
4.9
Acknowledgment
.
Each of Aerin LLC and ALZ, on the one hand, and EL, on the other, acknowledge that without the foregoing acknowledgments in Sections 4.7 and 4.8, respectively, the other parties hereto would not have entered into this Agreement.
4.10
EL Development and Marketing Team
.
Within 30 (thirty business days of the date hereof, EL shall identify to Aerin LLC the key members of the development, marketing and sales team for the Licensed Products, and in connection therewith shall consider in good faith any suggestions that Aerin LLC may have regarding the members of such team.
ARTICLE 5.
APPROVALS
5.1
Approvals
.
The parties agree that the timely submission and review of approval requests are important to the successful and timely execution of the contemplated business plans and that each party shall undertake to use all reasonable business efforts to review and provide timely review and feedback with respect to such approval requests. A submission for approval so submitted will be deemed approved unless Aerin LLC delivers a notice of disapproval within ten (10) business days after receipt of the request from EL.
5.2
Licensed Products, Packaging and A&P Materials.
a.
Aerin LLC and EL shall consult with each other at the concept stage in the development of a line of Licensed Products for each Product Launch and Aerin LLC shall collaborate with EL in the development of such items, and have the right to approve all Licensed Products (including Packaging) and A&P Materials.
b.
After the concept stage and design components for each Product Launch have been approved by Aerin LLC, EL shall prepare prototype samples of each Licensed Product comprising such Product Launch and, upon reasonable request, shall deliver to Aerin LLC two prototype samples of each such Licensed Product for inspection and approval at the times provided in the Product Development Calendar.
c.
After any sample Licensed Product has been approved by Aerin LLC, EL shall not materially modify such Licensed Product without the prior approval of Aerin LLC.
d.
In the event of disagreement between the parties as to future Licensed Products, Packaging and/or A&P Materials, Aerin LLC shall provide EL with a written outline of Aerin LLC’s reasons for disagreement and diligently work with EL in good faith to propose an alternative solution for the proposed Licensed Products and Packaging that satisfies EL’s reasonable weighted average cost of goods sold requirements by category (not to exceed 20% of US wholesale price for Cosmetic Product SKUs and 17% of US wholesale price for Fragrance Product SKUs) and/or the proposed A&P Materials that satisfies EL’s reasonable cost parameters. EL shall diligently and in good faith work with Aerin LLC to resolve any such disagreements. The parties shall use their reasonable best efforts to cooperate and rectify the basis for any disagreement within a time period required to meet reasonable production deadlines and other requirements of both parties and to resolve any disagreement relating to the design and composition of the Licensed Products (including the selection of fragrances), Packaging and/or A&P Materials in compliance with EL’s cost objectives described above. In the event that the parties are not able to agree on a mutually acceptable Licensed Product, Packaging and/or A&P Materials, the applicable launch requirement shall be delayed until such time as the parties reach agreement and for a period that reflects the time lost in disagreement.
ARTICLE 6.
DESIGN AND MANUFACTURING
6.1
Marketing Plan.
a.
By July 1, 2011, and on or before each July 1 of each subsequent Annual Period, EL shall submit to Aerin LLC a marketing and promotion plan for the next Annual Period. The marketing plan also shall include projected sales volumes for Licensed Products, in accordance with EL’s standard recording/reporting practices. EL shall consult with Aerin LLC but shall have final decision making power with regard to the marketing and promotion plan.
b.
By July 1, 2011, and on or before each July 1 of each subsequent Annual Period until the Aerin Lifestyle Brand is launched, Aerin LLC shall provide to EL information regarding Aerin LLC’s anticipated business activities to assist EL in developing marketing synchronicity between License Products and the Aerin Lifestyle Brand. Following the launch of the Aerin Lifestyle Brand, on or before each July 1 thereafter, Aerin LLC shall provide EL with a marketing and promotion plan showing aggregated marketing and promotion information for the Aerin Lifestyle Brand for the next Annual Period in order to assist in marketing synchronicity between Licensed Products and the Aerin Lifestyle Brand. Notwithstanding the foregoing, Aerin LLC shall not be required to disclose confidential information of third parties to EL.
6.2
Overall Commitment to Quality.
a.
Aerin LLC will maintain the distinctiveness of the Licensed Trademarks and Aerin Lifestyle Brand and maintain a prestige image and the high quality of the goods bearing them, whether manufactured and sold by Aerin LLC or its Affiliates or Lifestyle Licensees. Aerin LLC agrees that it will ensure that all products bearing Licensed Trademarks (other than Licensed Products, for which EL is responsible) will be of high quality as to workmanship, design and materials used therein, will be at least generally equal in quality to products sold under the Other Prestige Trademarks, and will be distributed exclusively through Prestige Retailers.
b.
EL will ensure that all Licensed Products, Packaging, and A&P Materials utilizing the Licensed Trademarks will comply with the samples approved by Aerin LLC and high quality standards. EL agrees that Licensed Products will be of high quality as to workmanship, design and materials used therein, and will be at least equal in quality, workmanship, appearance, design and materials to the samples of Licensed Products submitted by EL and approved by Aerin LLC pursuant to Article 5.
6.3
Monitoring Program
.
The parties will each have in effect a program of monitoring manufacturing facilities, whether operated by themselves or third party licensees, manufacturers, subcontractors or suppliers, that is sufficient to ensure (a) compliance by such facilities and persons with all applicable laws and regulations pertaining to wages, overtime compensation, benefits, hours, hiring and employment, workplace conditions and safety, the environment, collective bargaining and freedom of association, (b) that products bearing the Licensed Trademarks and the components thereof are made without the use of child labor, and (c) compliance with the Foreign Corrupt Practices Act. The parties agree that EL’s current program
satisfies EL’s obligations under this Section 6.3. Aerin LLC shall have the right to conduct its own factory audits of any third party licensees, manufacturers, subcontractors or suppliers engaged by EL and also may object, acting reasonably, to the continued engagement of any particular third party licensee, manufacturer, subcontractor or supplier. Aerin LLC shall include a monitoring obligation in any existing and/or future license agreement with a Lifestyle Licensee for the manufacture, sale and distribution of products bearing Licensed Trademarks.
6.4
Compliance with Applicable Laws
.
All Licensed Products manufactured and distributed by, or on behalf of, EL shall be manufactured, marked, labeled, packaged, advertised, and distributed in accordance with this Agreement and all applicable laws, rules and regulations in the Territory.
6.5
Intellectual Property Rights
.
Each party shall retain ownership of any intellectual property rights it develops prior to or in connection with this Agreement, provided that, as between the parties: Aerin LLC and/or ALZ shall exclusively own the Licensed Trademarks, ALZ Identifiers, and Ancillary IP; and EL shall exclusively own the EL Trademarks and any formulas and/or colors that EL: (i) may develop for the Licensed Products or for use in connection with the Licensed Products, or (ii) in the past has developed or used or in the future may develop for use in its many lines of products not sold under the Licensed Trademarks, (collectively the “EL Formulas”). EL may freely use such EL Formulas in its other lines of products aside from the Licensed Products and retains all rights in the EL Trademarks.
6.6
Development and Manufacture
. After Aerin LLC approves a Licensed Product under Section 5.2, EL shall make commercially reasonable efforts to proceed with the completion of the development and commercial production of such Licensed Product and shall show, offer for sale, sell and ship such Licensed Product in a timely manner in accordance with industry standards. EL shall be responsible for designing and developing all Licensed Products, making samples and overseeing the production of Licensed Products, and EL shall bear all costs thereof.
ARTICLE 7.
SALES AND MARKETING
7.1
Exploitation
.
EL will use commercially reasonable efforts to exploit the license throughout the Territory taken as a whole consistent herewith and with EL’s efforts for its other comparable products. The choice of countries (other than the United States) in which Licensed Products shall be marketed and the efforts made in each country shall be in the sole discretion of EL, after considering in good faith the suggestions of Aerin LLC. EL shall consult with Aerin LLC regarding such choices from time to time. In the event that Aerin LLC informs EL in writing that it reasonably believes, after consultation with EL and trademark counsel, that sales of Licensed Products in a particular country would give rise to trademark liability and EL proceeds with a launch in such country after receiving such written notice from Aerin LLC, Aerin LLC's duty to indemnify EL pursuant to Section 17.2 for any future sales in such country shall be deemed waived.
7.2
Product Development Calendar; Quarterly Meetings
.
On or about July 1 of each Annual Period, EL shall deliver to Aerin LLC a timetable setting forth target dates of product development, sample submissions, required approvals, launch dates and the like in order to meet a scheduled Product Launch date and/or development and launch of new Licensed Products (a
“Product Development Calendar”). EL shall consult with Aerin LLC in the preparation of such Product Development Calendar and shall give due consideration to Aerin LLC’s requests to amend the Product Development Calendar or the allocation of resources thereunder.
7.3
Product Launches
.
EL, with Aerin LLC’s reasonable participation (which shall include ALZ’s reasonable assistance), shall complete the following Product Launches:
a.
EL shall use commercially reasonable efforts to launch in the United States a Capsule Cosmetics Collection within twelve (12) months of execution of this Agreement, provided that if EL does not launch such Capsule Cosmetics Collection within twelve (12) months, but such Capsule Cosmetics Collection is in development and EL is making commercially reasonable efforts to launch as soon as practicable after such date, and such launch occurs in no event more than eighteen (18) months after execution of this Agreement, EL shall not be considered to be in breach of its launch requirements under this Section 7.3.a. Notwithstanding the preceding sentence, EL shall not be required to launch the Capsule Cosmetic Collection unless and until: (i) Aerin LLC and/or the Lifestyle Licensee(s) launch commercially reasonable quantities of products under the Aerin Lifestyle Brand.
b.
Within 12 months of the launch of the Capsule Cosmetics Collection, EL shall launch additional Licensed Products, the number of additional and type of SKUs shall be within EL’s reasonable commercial judgment and dependent upon the success of the Capsule Cosmetics Collection.
c.
In the event that Net Sales of Licensed Products reaches $80 million in any given Annual Period, Aerin LLC shall have the right to request that EL manage the business as a standalone line of Licensed Products rather than as a sub-brand of the Estee Lauder brand (the “Aerin Standalone Beauty Brand”). EL shall be obligated to comply with such request within 6 months.
7.4
Distribution.
The channels of distribution for each Licensed Product and for the Aerin Lifestyle Brand shall be Prestige Retailers. EL, following consultation with Aerin LLC, shall determine in its sole discretion the manner in which to distribute Licensed Products in Prestige Retailers and may use the EL sales force to support such distribution. In addition, seconds and returns shall be sold as set forth in Sections 7.6 and 7.7.
7.5
Products for Aerin LLC’s Use and Resale
.
EL will supply reasonable quantities of Licensed Products to Aerin LLC, at EL’s expense, as reasonably requested for Aerin LLC’s public relations purposes, showrooms, fashion shows, advertising, and ALZ’s personal use. EL shall sell Licensed Products to Aerin LLC and its Affiliates for resale in stores operated or controlled by Aerin LLC and/or its Affiliates and Aerin LLC’s website, at a price equal to fifty percent (50%) off local MSRP (“Sales to Aerin LLC”). Such Sales to Aerin LLC shall not be included in Net Sales for purposes of calculating the Royalty Amount and/or EL’s Annual A&P Minimum. EL’s obligation to provide sales support to Aerin LLC shall be limited to the provision of a commercially reasonable number of testers and samples not to exceed 12 testers per testable SKU per door per Annual Period and 1500 vial samples per door per Annual Period.
7.6
Disposal of Seconds
.
To the extent permitted by law, EL shall sell Licensed Products which are seconds (as that term is commonly understood in the industry) only in its Affiliates’ outlet store locations and in restricted admission stores located anywhere (collectively “Licensee’s Outlet Stores”) and will destroy seconds not so sold or donate them to charity in accordance with EL’s and its Affiliates’ existing practices. EL shall sell seconds only as a cost recovery method and consistent with reasonable industry practices regarding the sale of seconds. Such sales shall not be included in Net Sales for purposes of calculating the Royalty Amount and/or EL’s Annual A&P Minimum.
7.7
Disposal of Returns
. To the extent permitted by law and subject to all appropriate notices required under each applicable jurisdiction, EL may sell Licensed Products which are returns in Licensee’s Outlet Stores and may also donate to charity such returns not so sold in accordance with EL’s and its Affiliates’ existing practices, provided that the acceptance and distribution of such returns comply with standard industry practice for products bearing Other Prestige Trademarks. EL shall not manufacture products for sale to Licensee’s Outlet Stores and shall sell returns only as a cost recovery method and consistent with reasonable industry practices regarding the sale of returns. Such sales shall not be included in Net Sales for purposes of calculating the Royalty Amount and/or EL’s Annual A&P Minimum.
ARTICLE 8.
ADVERTISING AND PROMOTION
8.1
EL’s Minimum Advertising and Promotion Expenditure
.
EL shall be required to spend a specified minimum on Advertising and Promotion (“EL’s Annual A&P Minimum”). EL’s Annual A&P Minimum shall be equal to 20% of Net Sales in any given Annual Period during the Initial Term and 15% of Net Sales in any given Annual Period thereafter, provided that in no event shall EL’s Annual A&P Minimum exceed 50% of Aerin LLCs’s A&P Spend (as defined below) for any given Annual Period.
8.2
Aerin LLC’s Brand Building Requirements
.
Pursuant to Section 6.1(b) herein, on July 1 of each Annual Period, Aerin LLC shall provide EL with a marketing and promotion plan setting forth projections of planned expenditures for all Advertising and Promotion in connection with the Aerin Lifestyle Brand for each Annual Period, whether to be made directly or through Lifestyle Licensees (“Aerin LLC’s A&P Spend”). At mid-year and the end of each Annual Period, Aerin LLC shall update such marketing and promotion plan to provide EL with aggregated actual expenditures by Aerin LLC and the Lifestyle Licensees for the first half and entire Annual Period, respectively so that EL shall be able to calculate EL’s Annual A&P Minimum pursuant to Section 8.1. EL acknowledges that such information constitutes Confidential Information of Aerin LLC and shall be subject to the terms of Section 12.1.
8.3
Public Announcements
.
During the Term, all press releases and other public announcements related to this Agreement, including without limitation the terms of this Agreement, and each Product Launch, are subject to written approval by both Aerin LLC and EL. The parties shall be permitted to repeat information contained in previously approved press releases without further approval.
ARTICLE 9.
ROYALTIES
9.1
Royalty Amount.
a.
EL shall pay to Aerin LLC a royalty amount (the “Royalty Amount”) calculated according to the level of Net Sales as follows:
(i)
Cosmetic Products: four percent (4%) of Net Sales for Net Sales up to forty million dollars ($40,000,000) in any given Annual Period and five percent (5%) of Net Sales for Net Sales in excess of forty million dollars ($40,000,000) in any given Annual Period.
(ii)
Fragrance Products: five percent (5%) of Net Sales.
b.
Royalty Amounts shall be paid to Aerin LLC quarterly in arrears on the fifteenth (15
th
) day of November, February, May and August respectively in respect of the Net Sales achieved during the fiscal quarter concluding on the last day of the month preceding such payment date.
c.
For the avoidance of doubt, no Royalty Amount shall be payable on: (i) employee gifts or charitable contributions and other donations or giveaways of Licensed Products; (ii) Sales to Aerin LLC and/or (iii) sales of Licensed Products through Licensee’s Outlet Stores in accordance with Sections 7.6 and 7.7 herein.
9.2
Royalty Statements
.
Concurrently with payments under Section 9.1, EL will provide to Aerin LLC a royalty statement certified as true and accurate by a comptroller of EL setting forth a computation of Net Sales. At Aerin LLC’s request and expense, EL also shall provide to Aerin LLC an annual royalty statement certified as true and accurate by an independent accounting firm. EL will provide to Aerin LLC in the royalty statement all information it generally provides to its other licensors and such information as Aerin LLC may reasonably request and list Net Sales made in a foreign currency showing the foreign currency and the conversion to US dollars using the exchange rate of the applicable currency for the last day of the relevant quarter (or the next business day if such day falls on a weekend or holiday) as set forth in the U.S. edition of
The Wall Street Journal
or any other financial publication subsequently agreed in writing by Aerin LLC and EL. If EL is legally prohibited from converting the currency in which sales are made to dollars, it may pay the relevant portion of the Royalty Amount in the source currency.
9.3
Weekends and Holidays
.
In the event that a payment hereunder is due on a weekend or legal federal or New York holiday, the payment shall be deemed due instead on the next business day.
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ARTICLE 10.
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MANNER OF PAYMENT, INTEREST, BOOKS AND RECORDS, INSPECTION
|
10.1
Manner of Payment
.
All payments required by EL hereunder will be made to Aerin LLC by wire transfer in U.S. Dollars to an account in accordance with instruction from Aerin LLC.
10.2
Taxes
.
EL will bear all taxes, duties and other governmental charges in the Territory relating to or arising under this Agreement, including without limitation, any state or federal income taxes (except withholding taxes on royalties and taxes on the income or gross receipts of Aerin LLC), any stamp or documentary taxes or duties, turnover, sales or use taxes, value added taxes, excise taxes, customs or exchange control duties and any other charges relating to or on any royalty payable by EL to Aerin LLC. EL will obtain, at its own cost and expense, all licenses, reserve bank, commercial bank or other bank approvals, and any other documentation necessary for the importation of materials and the transmission of royalties and all other payments relevant to EL’s performance under this Agreement. If any tax or withholding is imposed on royalties, such amounts shall be deducted from the Royalty Amount payable to Aerin LLC and EL shall obtain certified receipts evidencing the tax payment or withholding and transmit it to Aerin LLC upon Aerin LLC’s reasonable request. Aerin LLC will reasonably cooperate with EL, at EL’s expense, in obtaining any of the foregoing approvals or documentation.
10.3
Books and Records
.
EL agrees to keep accurate books and records covering all transactions relating to the license granted by this Agreement, Net Sales, EL’s Annual A&P Minimum and the computation of the Royalty Amount. Aerin LLC’s representatives shall have the right at reasonable times during the Term, and for three (3) years after its termination, to examine and/or audit said books and records (including customer invoices, invoices indicating Advertising and Promotion expenditures and manufacturing records) and make extracts or copies thereof for the purpose of verifying payments due and expenditures required hereunder. This right of examination shall be exercisable once during each Annual Period, during normal business hours at a date and time to be approved by EL, such approval not to be unreasonably withheld, upon at least thirty (30) business days prior written notice.
10.4
Underpayments
.
If, upon any examination of EL’s books and records, Aerin LLC discovers and gives EL reasonable evidence of any undisputed royalty underpayment by EL, EL will make all payments required to be made to correct and eliminate such underpayment within thirty (30) days after Aerin LLC’s demand and delivery of the evidence therefor. In addition, if said examination reveals an undisputed royalty underpayment of the greater of (a) $75,000 or (b) ten (10%) percent or more, for any royalty period, EL will reimburse Aerin LLC the reasonable cost of said examination within forty five (45) days after Aerin LLC’s demand and delivery of evidence reasonably supporting the cost of said examination.
10.5
Overpayments
.
If, upon any examination of EL’s books and records, Aerin LLC discovers any royalty overpayment by EL, EL shall receive a credit for such overpayment against future Royalty Amounts due.
10.6
Interest
.
If EL fails to pay to Aerin LLC any sum owing to Aerin LLC hereunder or in connection herewith in full when due, EL shall pay interest on any unpaid balance from and including the date the payment becomes due until the date of payment at a rate equal to the prime rate prevailing in New York City at JP Morgan Chase during the period of delinquency plus three percent (3%) or the maximum rate of interest that can legally be charged to EL, if lower.
ARTICLE 11.
REPRESENTATIONS AND WARRANTIES
11.1
Representations and Warranties of EL
.
EL hereby represents, warrants and covenants that:
a.
it has the full right, power and authority to enter into this Agreement, and to perform all of its obligations hereunder;
b.
it is financially capable of undertaking the business operations which it conducts and of performing its obligations hereunder;
c.
it is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation;
d.
all necessary corporate acts have been effected by it to render this Agreement valid and binding upon it; and
e.
in its negotiations relative to this Agreement, it has not utilized the services of any finder, broker or agent, and it owes no commission or fees to any such person in relation hereto. EL agrees to indemnify Aerin LLC against, and hold it harmless from, any and all liabilities (including, without limitation, reasonable legal fees) to any person, firm or corporation claiming commissions or fees in connection with this Agreement or the transactions contemplated hereby as a result of an agreement with or services rendered to EL.
11.2
Representations and Warranties of Aerin LLC
.
Aerin LLC hereby represents, warrants and covenants that:
a.
it has the full right, power and authority to enter into this Agreement, and to perform (and cause its designee to perform) all of its obligations hereunder or in connection herewith;
b.
it is financially capable of undertaking the business operations which it conducts or may conduct and of performing its obligations hereunder;
c.
it is a limited liability company organized, validly existing and in good standing under the laws of the jurisdiction of its formation;
d.
all necessary acts have been effected by it to render this Agreement valid and binding upon it;
e.
in negotiations relative to this Agreement, it has not utilized the services of any finder, broker or agent, and it does not owe any commission or fees to any such person in relation hereto. Aerin LLC agrees to indemnify EL against, and hold it harmless from, any and all liabilities (including, without limitation, reasonable legal fees) to any person, firm or corporation claiming commissions or fees in connection with this Agreement or the transactions contemplated hereby as a result of an agreement with or services rendered to Aerin LLC;
f.
JW Brands is the sole and exclusive owner of, and Aerin LLC is the sole and exclusive licensee of, in each case, the registrations and applications for Licensed Trademarks identified on Exhibit A with respect to the Licensed Products and certain other fields of use including clothing and other goods and services covered by the registrations and applications;
g.
none of JW Brands, Aerin LLC, nor any person acting under its authority, has granted any other existing license to use the Licensed Trademarks, ALZ Identifiers or Ancillary IP in the Territory in connection with Licensed Products, and, during the term, subject to Section 7.4 herein, shall not grant (or authorize any person to grant) any such license in connection with products constituting Licensed Products;
h.
there are no terms in the Master License Agreement that conflict with any of the terms in this License Agreement.
i.
there are no actions, suits, legal proceedings or formal investigations pending, or to Aerin LLC’s knowledge, threatened, against or affecting Aerin LLC before any court, arbitrator or administrative or governmental body which might adversely affect or materially impair (i) the ability of Aerin LLC to grant the rights granted herein or otherwise perform its obligations under or related to this Agreement or (ii) the rights of EL hereunder.
j.
other than as identified on Schedule 11.2 hereto, there are no pending or existing adverse orders, judgments, legal proceedings or actions, formal investigations, written claims, or consent agreements, and, to Aerin LLC’s knowledge, no restrictions or encumbrances regarding or relating to the ownership or use of the Licensed Trademarks in connection with products or services constituting Licensed Products and/or the Aerin Lifestyle Brand in any jurisdiction in the Territory;
k.
the Licensed Trademarks existing as of the date hereof, and the authorized use by EL of any of them hereunder, do not and will not infringe any intellectual property rights of a third party; and
l.
no event has occurred that, at or prior to the date hereof, would have a material adverse impact on the Aerin Lifestyle Brand or on the condition (financial or otherwise) of Aerin LLC.
m.
for the avoidance of doubt, Aerin LLC makes no representation or warranty regarding “LAUDER” or any derivative thereof.
ARTICLE 12.
CONFIDENTIALITY
12.1
Confidentiality
.
Both Aerin LLC and EL acknowledge that, in furtherance of this Agreement, they will receive from the other information which may consist of business methods, business plans and practices, identification of personnel, customers, prospective customers and suppliers, financial information, inventions, processes, methods, products, patent applications, specifications, drawings, sketches, models, samples, designs, ideas, technical information and other confidential business information and trade secrets. The parties recognize that these
materials are valuable property. The parties acknowledge the need to preserve the confidentiality and secrecy of these materials and agree to take all necessary steps to ensure that use by the recipient, or by their contractors will in all respects preserve such confidentiality and secrecy. Each party shall take all commercially reasonable precautions to protect the secrecy of the materials, samples, and designs described herein prior to their commercial distribution or the showing of samples for sale. Each party shall take all reasonable precautions to protect the secrecy of the original designs created for Licensed Products prior to their advertisement, commercial distribution or the showing of samples for sale. Neither party shall, at any time during the term of this Agreement, disclose to any third party or use for any purpose, other than as contemplated by or necessary to comply with the terms of this Agreement, any revealed or otherwise acquired confidential information and data relating to the business of the other. Notwithstanding the foregoing, the parties shall not be required to treat any information as confidential information under this Article 12 if such information (i) was publicly known at the time it was disclosed or becomes publicly known after disclosure without breach hereof by the receiving party; (ii) was known by the receiving party at the time of disclosure or becomes known to it from a party other than the disclosing party who has the apparent right to disclose such information to the receiving party’s knowledge after due inquiry; (iii) is independently developed by the receiving party without reliance on the disclosed confidential information; (iv) is approved for disclosure by the disclosing party with the disclosing party’s prior written consent; or (v) is disclosed by the receiving party pursuant to judicial order, requirement of a governmental agency or other operation of law, provided that the receiving party informs the disclosing party promptly after receiving notice of its obligation to make such disclosure, and takes reasonable steps to limit the scope of such disclosure. This Section 12.1 expressly replaces and supercedes the terms of any other agreement between Aerin LLC on the one hand and EL on the other relating to the treatment of confidential materials or the non-disclosure of information entered into between the parties, which agreement shall be deemed terminated and of no further effect with respect to all the parties thereto (except that confidential information provided under any prior agreement by one party to the other shall be protected and governed as though it were provided pursuant to this Agreement).
ARTICLE 13.
INTELLECTUAL PROPERTY
13.1
Rights to the Intellectual Property.
a.
EL shall use and display the Licensed Trademarks, ALZ Identifiers, and Ancillary IP only in the form and manner designated or approved by Aerin LLC from time to time hereunder. As between the parties, the Licensed Trademarks, ALZ Identifiers, and Ancillary IP and all the rights therein, and goodwill attached thereto, belong exclusively to Aerin LLC. Any goodwill arising from the use of the Licensed Trademarks by EL and/or its permitted sublicensees shall inure to the benefit of JW Brands and sales by EL of Licensed Products and its use of the Licensed Trademarks hereunder shall be deemed to have been made by JW Brands for purposes of trademark registration. EL will not knowingly do, or authorize or assist any person to do, any act or thing that would, in any way, adversely affect the rights of JW Brands or Aerin LLC in and to the Licensed Trademarks, ALZ Identifiers, or Ancillary IP or any goodwill arising from therefrom. No party will knowingly do or authorize or assist any person to do, any act or thing that may reduce the value of the Licensed Trademarks, ALZ Identifiers, or Ancillary IP or detract from their reputation.
b.
Aerin LLC shall notify EL if it or JW Brands elect to change the form of the Licensed Trademarks, ALZ Identifiers, and Ancillary IP and EL shall effect the change as promptly as reasonably practicable and, in any event, no later than the next season after the season then in production. However, if, after the change has been effected, EL has an inventory of Licensed Products bearing the previous form of the Licensed Trademarks, ALZ Identifiers, and Ancillary IP, EL may sell off such Licensed Products, as seconds in Licensee’s Outlet Stores and not as part of EL’s regular sales of Licensed Products, in the ordinary course.
c.
As between the parties, all trademarks, including without limitation the EL Trademarks, related goodwill and other intellectual property owned and retained by EL, as provided herein, belong exclusively to EL and this Agreement does not confer upon Aerin LLC, ALZ or their Affiliates or licensees, any right to use any such trademarks or other intellectual property. No party will knowingly do or authorize or assist any person to do, any act or thing that may reduce the value of such trademarks, related goodwill and other intellectual property or detract from their reputation.
13.2
Protecting the Licensed Trademarks and Ancillary IP.
a.
ALZ shall cause JW Brands to use commercially reasonable efforts to apply for and maintain registrations for the Licensed Trademarks that are not New Secondary Marks, including without limitation those trademarks set forth in Exhibit A, in key markets as determined by the parties from time to time, at its sole expense, but only to the extent such Trademarks cover any products constituting Licensed Products.
b.
The parties shall cooperate with each other in securing registrations in International Class 3, and other appropriate International Classes, for the New Secondary Marks in the Territory as appropriate using EL’s in-house legal department or Aerin LLC’s trademark attorneys, at the election and sole expense of Aerin LLC, who shall file any and all applications in JW Brand’s name (or in the name of such other party as Aerin LLC reasonably may direct). The parties shall cooperate in the handling, coordination, filing and prosecution of all new applications for registration in the Territory. With respect to New Secondary Marks, the parties shall share equally the cost of all of the government and third-party agent costs and expenses associated with securing such registrations, including without limitation such costs associated with prosecuting or defending opposition and cancellation proceedings, searches and clearances, negotiated payments, and any and all attorneys’ fees and filing fees (collectively, “Outside Fees”), provided that EL’s in-house legal department shall be utilized to the extent commercially reasonable. With respect to New Secondary Marks, EL shall conduct in respect of each country in which it determines to sell Licensed Products a right to use review consistent with its standard intellectual property (including trademark) clearance procedures. If at the end of the foregoing process, EL determines that payment to a third party should be made to secure the right to sell under a New Secondary Mark, in a particular country, the payment to the third party shall be borne equally by the parties.
c.
If Aerin LLC determines to apply to register a Licensed Trademark in classes other than those covering products and services constituting Licensed Products then sold by EL, Aerin LLC shall bear the trademark search and clearance costs.
d.
EL, at Aerin LLC’s and EL’s shared expense, shall prepare and execute all necessary documents, including, without limitation, registered user agreements, necessary to protect the Trademarks used in connection with the Licensed Products and the parties shall reasonably cooperate in connection therewith.
e.
Aerin LLC shall promptly notify EL of any restrictions on use of the Licensed Trademarks, ALZ Identifiers or Ancillary IP in connection with the Licensed Products anywhere in the Territory of which it becomes aware.
13.3
Compliance with Notice and Other Requirements
.
EL will use the Licensed Trademarks in compliance with all applicable legal requirements. Upon expiration or termination of this Agreement for any reason whatsoever, EL will execute and deliver to Aerin LLC any and all documents required by Aerin LLC for terminating any and all registered user agreements and other documents regarding EL’s use of the Licensed Trademarks.
13.4
Infringement
.
Each party agrees upon its learning thereof to notify the other party promptly in writing of any potential infringement of the Licensed Trademarks, ALZ Identifiers, or Ancillary IP, or imitation or counterfeiting of Licensed Products in the Territory, of any use by any person of a trademark confusingly similar to the Licensed Trademarks for goods in International Class 3 and/or goods and services related thereto, or of any applications or registrations for the Licensed Trademarks or Ancillary IP or marks confusingly similar to the Licensed Trademarks within the Territory for use on goods in International Class 3 and/or goods and services related thereto, or of any suit or proceeding or action of unfair competition involving the Licensed Trademarks or Ancillary IP in the Territory in connection with goods in International Class 3 and goods and/or services related thereto. Aerin LLC thereupon shall at its sole discretion and at its sole expense take such action as it deems advisable
for the protection of its rights in and to the Licensed Trademarks, ALZ Identifiers, Ancillary IP, and Licensed Products
and, if requested to do so by Aerin LLC, EL shall, at Aerin LLC’s expense, provide reasonable assistance to Aerin LLC in all respects, including, without limitation, by being a plaintiff or co-plaintiff in any one or more lawsuits in connection therewith and by causing its officers to execute pleadings and other related documents. The institution and conduct of litigation, the selection of attorneys and the settlement of litigation and claims affecting the Licensed Trademarks, ALZ Identifiers, and Ancillary IP in the Territory shall be entirely within the discretion of Aerin LLC and under Aerin LLC’s control. In no event, however, will Aerin LLC be required to take any action if it deems it inadvisable to do so. EL, may in its discretion, participate in litigation brought by Aerin LLC. All costs and expenses, including reasonable legal fees incurred in connection with any such suits in which both parties voluntarily participate (it being agreed that the parties, where practical shall share attorneys), shall be borne equally by the parties, and each party’s expenses shall be reimbursed out of any monetary recovery obtained, and the remainder, if any, shall be divided equally between the parties taking into account any further pro rata division that may be required in the event the suit involves products and services in addition to Licensed Products. If the monetary recovery obtained is not sufficient to fully reimburse both parties, the parties’ expenses shall be reimbursed on a pro rata basis out of such monetary recovery, taking into account any further pro rata division that may be required in the event the suit involves products and services in addition to Licensed Products. If EL does not participate, Aerin LLC may bring such action or suit at its own expense and shall keep any recovery therefrom. If Aerin LLC decides not to bring any action or suit, EL may (subject to
Aerin LLC’s reasonable objection) bring such action or suit at its own expense and shall keep any recovery therefrom. If requested to do so by EL, Aerin LLC shall, at EL’s expense, provide reasonable assistance to EL in all respects, including, without limitation, by being a plaintiff or co-plaintiff in any one or more lawsuits in connection therewith and by causing its officers to execute pleadings and other related documents.
13.5
Use of Licensed Trademarks on Business Materials
.
Aerin LLC hereby consents to use by EL of a trade name incorporating a Licensed Trademark (
e.g.
, Aerin Beauty or similar name) and to the use of such trade name in the masthead or letterhead of invoices, order forms, stationery and related materials in advertising in telephone or other directory listings; provided, however, that each such use of the Licensed Trademarks is only in conjunction with the manufacture, sale, distribution or advertisement of Licensed Products pursuant to this Agreement, and provided, further, that all such materials and the trade name itself shall be subject to Aerin LLC’s approval as if such items were A&P Materials hereunder. All goodwill associated with such use shall be for the sole and exclusive benefit of Aerin LLC, and such materials may not include or otherwise promote any other products sold by EL.
13.6
Further Assurances
.
Each of Aerin LLC, ALZ and EL shall cooperate with the others and take such steps as are reasonably requested by the others to implement the intellectual property ownership allocation contemplated, and preserve the other rights granted, by this Article 13.
ARTICLE 14.
INSOLVENCY
14.1
Effect of Proceeding in Bankruptcy, etc.
If either party institutes for its protection or is made a defendant in any proceeding under bankruptcy, insolvency, reorganization or receivership law, or if either party is placed in receivership or makes an assignment for benefit of creditors or is unable to meet its debts in the regular course of business, the other party may elect to terminate this Agreement immediately by written notice to the other party without prejudice to any right or remedy the terminating party may have, including, but not limited to, damages for breach.
14.2
Rights Personal
.
The license and rights granted hereunder are personal to EL. No assignee for the benefit of creditors, receiver, trustee in bankruptcy, sheriff or any other officer or court charged with taking over custody of EL’s assets or business, shall have any right to continue performance of this Agreement or to exploit or in any way use the Licensed Trademarks if this Agreement is terminated pursuant hereto, except as may be required by law.
14.3
Trustee in Bankruptcy
.
Notwithstanding the provisions of Section 14.2, in the event that, pursuant to applicable bankruptcy law (the “Code”), a trustee in bankruptcy, receiver or other comparable person, of either party, as debtor (the “Debtor”), is permitted to assume this Agreement and does so and, thereafter, desires to assign this Agreement to a third party, which assignment satisfies the requirements of the Code, the trustee or the Debtor, as the case may be, must notify the other party. Said notice shall set forth the name and address of the proposed assignee, the proposed consideration for the assignment and all other relevant details thereof. The giving of such notice will be deemed to constitute an offer to such party to have this Agreement assigned to it or its designee for such consideration, or its equivalent in money, and
upon such terms as are specified in the notice. The other party may accept the aforesaid offer only by written notice given to the trustee or the Debtor, as the case may be, within fifteen (15) days thereafter. If the non-debtor party fails to deliver such notice within the said fifteen (15) days, the trustee or Debtor may complete the assignment referred to in its notice, but only if such assignment is to the entity named in said notice and for the consideration and upon the terms specified therein. Nothing contained herein will be deemed to preclude or impair any rights that a party may have as a creditor in the bankruptcy proceeding.
ARTICLE 15.
EXPIRATION AND TERMINATION
15.1
EL’s Right to Terminate
.
In addition to other rights of termination by EL, as set forth in this Agreement, EL shall have the right, subject to Aerin LLC’s and ALZ’s right to cure set forth herein, to terminate this Agreement:
a.
If JW Brands, Aerin LLC and/or ALZ sells, distributes or authorizes others to sell or distribute Licensed Products in the Territory;
b.
If Aerin LLC and/or ALZ materially breaches any of its/her representations, warranties or covenants herein; or
c.
If Aerin LLC and/or ALZ shall otherwise fail to perform any of the material terms of this Agreement to be performed.
Upon Aerin LLC’s or ALZ’s default, EL shall have the right to notify Aerin LLC and/or ALZ of its intent to terminate the Agreement, which notice shall be in writing and shall set forth the specific reason for termination. Aerin LLC and/or ALZ shall have sixty (60) days from receipt of such written notice to cure the alleged default. If Aerin LLC and/or ALZ is unable to cure within the time frame set forth above for the default in question, the license hereunder shall terminate upon EL’s further written notice of termination to Aerin LLC and/or ALZ, provided that, to the extent any such default is curable but not within such sixty (60) day period and Aerin LLC and/or ALZ is diligently proceeding to cure such default, such default will not constitute grounds for a termination of this Agreement if it is cured within one hundred twenty (120) days.
15.2
Aerin LLC’s Right to Terminate
.
Aerin LLC shall have the right, subject to EL’s right to cure as set forth herein, to terminate this Agreement:
a.
If EL fails to pay any Royalty Amount or any other amount indisputedly due to Aerin LLC hereunder within sixty (60) days following the end of the quarter for which they were due;
b.
If EL materially breaches any of its representations, warranties or covenants herein; or
c.
If EL shall otherwise fail to perform any of the material terms of this Agreement to be performed, not covered by the preceding paragraph.
Upon EL’s default, Aerin LLC shall have the right to notify EL of its intent to terminate the Agreement, which notice shall be in writing and shall set forth the specific reason for
termination. EL shall have sixty (60) days from receipt of such written notice to cure the alleged default. If EL is unable to cure within the time frame set forth above for the default in question, the license hereunder shall terminate upon Aerin LLC’s further written notice of termination to EL, provided that, to the extent any such default is curable but not within such sixty (60) day period and EL is diligently proceeding to cure such default, such default will not constitute grounds for a termination of this Agreement if it is cured within one hundred twenty (120) days.
15.3
Effect of Expiration or Termination.
a.
At any time that EL becomes aware of the expiration or termination of this Agreement (whether pursuant to Section 3.2 or Section 15), EL shall refrain from any activities relating to the Licensed Products that are out of the ordinary course of or inconsistent with past practices until expiration or termination.
b.
Upon expiration or termination of this Agreement for any reason whatsoever, other than due to termination by Aerin LLC arising out of EL’s material breach of Section 4.8, 6.2(b), 6.4 or 6.6 herein (with respect to termination due to EL’s material breach of 6.2(b), 6.4 or 6.6 , the following right of sell off shall be limited to Licensed Products not impacted by such breach), EL shall have the right for a period of twelve (12) months following expiration or termination to manufacture for, fulfill and make delivery of all orders received before expiration or termination and confirmed by it within thirty (30) days after such expiration or termination, to complete any partially-finished Licensed Products; and to sell and dispose of its inventory of Licensed Products on hand as of the date of expiration or termination or finished thereafter as described above. Promptly after the end of such twelve (12) month period, EL shall deliver to Aerin LLC an Inventory and Materials Schedule. The Inventory and Materials Schedule will be prepared as of the close of business on last day of the twelve (12) months period and will identify EL’s remaining Inventory and all plates, engravings, computer tapes, molds, tooling and the like used to make or reproduce the Trademarks and Licensed Products in EL’s possession or control. Aerin LLC, at its sole discretion, may purchase the remaining Inventory for a price equal to EL’s direct cost therefor and the other items identified on the schedule for a price equal to EL’s book value therefor. To the extent Aerin LLC exercises its right to purchase, title to such Inventory and materials immediately shall transfer to Aerin LLC, and EL (and its Affiliates and distributors, if any), within sixty (60) business days thereafter, shall ship the purchased items F.O.B. to the United States destination selected by Aerin LLC. Aerin LLC shall pay EL for such items on or before shipment. Aerin LLC shall have the right to sell the Inventory so purchased, until such Inventory is exhausted or to the date one (1) year from the date that said Inventory is shipped to Aerin LLC, whichever is earlier. Thereafter, Aerin LLC shall not sell or otherwise use EL’s trade name or the trade name of an EL Affiliate or the trade name of an EL distributor. In the event Aerin LLC elects not to purchase such Inventory and materials, EL shall have the right to sell the remaining inventory of finished goods in Licensee’s Outlet Stores until the earlier of the date on which such inventory is fully depleted and twelve (12) months after the notice of Aerin LLC’s election not to purchase such Inventory and materials. If Aerin LLC elects to purchase such Inventory and materials, at Aerin LLC’s request, EL shall enter into a one-year supply agreement with Aerin LLC for the formulas used in any Licensed Products at the time of termination. EL shall make such formulas available at customary terms and conditions.
ARTICLE 16.
RELATIONSHIP BETWEEN THE PARTIES
16.1
No Agency
.
Neither party shall represent itself as the employee, agent or legal representative of the other party, or its Affiliates for any purpose whatsoever and shall have no right to create or assume any obligation of any kind, expressed or implied, for or on behalf of the other in any way whatsoever.
ARTICLE 17.
INDEMNIFICATION AND INSURANCE
17.1
Indemnification by EL
.
Except to the extent EL or related indemnified parties would be entitled to indemnification from Aerin LLC pursuant to Section 17.2, EL hereby saves and holds ALZ and Aerin LLC harmless of and from and shall indemnify them against any and all losses, liabilities, damages, judgments, awards, suits, claims, fines, penalties and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) for which they may become liable or be compelled to pay in any action, claim or proceeding against it for or by reason of: (a) any acts, whether of omission or commission, that may be committed or suffered by EL or its Affiliates or any of their servants, agents or employees in connection with EL’s performance under this Agreement; (b) the design, manufacture, packaging, distribution, sale, marketing, advertisement or promotion of any Licensed Products (except to the extent created or modified by ALZ and/or Aerin LLC) specifically including those Losses related to the safety or efficacy of, or compliance with any regulatory requirement applicable to, such Licensed Products; (c) EL’s use of the Licensed Trademarks contrary to Aerin LLC’s instructions provided to EL in writing in accordance herewith; or (d) an allegation that the actions of EL or its Affiliates should be attributed to ALZ and/or Aerin LLC by reason of EL using a Licensed Trademark as a trade name or otherwise as provided in Section 13.5. Aerin LLC must give EL prompt written notice of any such action, claim or proceeding and EL, in its sole discretion, then may take such action as it deems advisable to defend such action, claim or proceeding on behalf of ALZ and/or Aerin LLC. ALZ and/or Aerin LLC may participate in such defense at their own expense with their own counsel. In the event appropriate action is not taken by EL within thirty (30) days after its receipt of notice from ALZ and/or Aerin LLC, ALZ and/or Aerin LLC may defend such action, claim or proceeding, but no settlement thereof may be made without the approval of EL, which approval shall not be withheld unreasonably. In either case, the parties shall keep each other fully advised of all developments and shall cooperate fully with each other in all respects in connection with any such defense as is made. The provisions of this Section 17.1 and EL’s obligations hereunder shall survive the expiration or termination of this Agreement.
17.2
Indemnification by Aerin LLC
.
Except to the extent Aerin LLC or any other indemnified parties would be entitled to indemnification under Section 17.1,
Aerin LLC hereby saves and holds EL and its Affiliates harmless of and from and shall indemnify each of them against any and all Losses for which EL or any of its Affiliates may become liable or be compelled to pay in any action, claim or proceeding against EL or any of its Affiliates, for or by reason of: (a) use of the Licensed Trademarks in connection with the Licensed Products in the Territory infringes upon the trademark, trade name or other rights of a third party; (b) use of Ancillary IP or designs contributed by Aerin LLC infringe the copyright, trade dress, trademark or any other intellectual property rights of a third party in the Territory; (c) use of the ALZ Identifiers (other than the “Lauder” part of ALZ’s name) infringes the intellectual property rights of any third party in the Territory; and (d) any acts, whether by omission or commission, that
may be committed by Aerin LLC, or any of its agents or employees in connection with this Agreement. EL must give Aerin LLC prompt written notice of any such action, claim or proceeding and Aerin LLC, in its sole discretion, then may take such action as it deems advisable to defend such action, claim or proceeding on behalf of EL. EL may participate in such defense at its own expense with its own counsel. In the event appropriate action is not taken by Aerin LLC within thirty (30) days after its receipt of notice from EL, EL may defend such action, claim or proceeding, but no settlement thereof may be made without the approval of Aerin LLC, which approval shall not be withheld unreasonably. In either case, parties shall keep each other fully advised of all developments and shall cooperate fully with each other in all respects in connection with any such defense as is made. The provisions of this Section 17.2 and Aerin LLC’s obligations hereunder shall survive the expiration or termination of this Agreement. Notwithstanding anything to the contrary herein, if Aerin LLC advises EL in writing to cease manufacture, sale or distribution of Licensed Products because it reasonably believes that such manufacture, sale or distribution is infringing the rights of a third party in a manner for which Aerin LLC is required to indemnify EL, EL shall cease such manufacture, sale or distribution as soon as commercially practical, provided that Aerin LLC pays the cost of ceasing such activities and any required product recalls (including unrecouped development costs allocable to the jurisdiction in question). In the event that Aerin LLC no longer exists and does not have a successor which is at least as financially sound and carries similar insurance coverage to that carried by Aerin LLC for the benefit of EL as provided for in this Agreement, then ALZ agrees to indemnify EL to the same extent as Aerin LLC pursuant to this Section.
17.3
Insurance.
a.
Requirements
. Without limiting liability pursuant to the indemnity provisions of this Agreement, EL will maintain comprehensive general liability insurance in the amount of at least ten million dollars ($10,000,000) (total limit) with a broad form property damage liability endorsement, which must include products liability coverage. Without limiting liability pursuant to the indemnity provisions of this Agreement, Aerin LLC will maintain comprehensive general liability insurance in the amount of at least ten million dollars ($10,000,000) (total limit) with a broad form property damage liability endorsement.
b.
General Provisions
. Each party’s insurance described in subsection (a) will include: (i) an endorsement stating that the other party will receive at least thirty (30) days written notice prior to cancellation or non-renewal of coverage; and (ii) an endorsement including the other party as an additional insured.
c.
Approved Carrier/Policy Changes
. All insurance must be obtained from recognized insurance companies licensed to do business within the United States. Each party shall notify the other at least thirty (30) days prior to the cancellation of, or any modification in, such insurance policy that would affect the other’s status or benefits thereunder.
d.
Evidence of Coverage
. Upon reasonable request of the other party, each party shall furnish to the other evidence of the maintenance and renewal of the required insurance and certificates of insurance.
ARTICLE 18.
NOTICES
18.1
Manner of Notice
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Any notice or legal service of process required or arising out of or under this Agreement will be effective only when personally delivered in writing, or on the date when the notice or service is transmitted and confirmed by electronic facsimile (with a second confirmation copy to be sent by mail) or the date when any notice or service sent by overnight air courier service or by first class registered mail and confirmed as delivered. All notices and service will be sent to the parties at the addresses listed below or to such other persons and addresses as may be designated in writing by the parties to each other. The date a notice or service will be deemed to be transmitted, sent by overnight air courier or mailed will be the date at the notifying party’s place of business at the time of transmission, sending or mailing.
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To Aerin LLC and/or ALZ:
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President
Aerin LLC
595 Madison Ave.
New York, NY 10022
Tel. (212) 834-0440
Fax (212) 834-0449
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with copies to:
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Wachtell, Lipton, Rosen & Katz
51 West 52
nd
Street
New York, NY 10019
Attn: Andrew J. Nussbaum
Tel. (212) 403-1000
Fax. (212) 403-2269
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With further copies to:
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Hand Baldachin & Amburgey LLP
8 West 40
th
Street, 12
th
Floor
New York, NY 10018
Attn: Douglas Hand
Tel. (212) 956-9539
Fax. (212) 956-9500
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and such other party or individual that Aerin LLC and/or ALZ may designate in writing.
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To EL:
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Estee Lauder Inc.
767 Fifth Avenue
New York, New York 10153
Attention: Global Brand President
Telephone: (212) 572-5725
Facsimile: (212) 572-5730
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with copies to:
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Estee Lauder Inc.
767 Fifth Avenue
New York, New York 10153
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Attention: General Counsel
Telephone: (212) 572-3980
Facsimile: (212) 572-3989
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and such other party or individual that EL may designate in writing.
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The foregoing notwithstanding, requests for or grants/denials of approval or other day-to-day communications may be given by email or fax.
ARTICLE 19.
SUSPENSION OF OBLIGATIONS
19.1
Suspension of Obligations (Force Majeure)
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If either party is prevented from performing any of its obligations because of governmental regulation or order, or by strike or war, declared or undeclared, acts of terrorism, or other calamities such as fire, earthquake, or similar acts of God, or because of other similar or dissimilar cause beyond the control of such party, the party’s obligations will be suspended during the period of such condition. If such condition continues for a period of more than one hundred eighty (180) days, the other party will have the right to terminate this Agreement, provided that the failure to render such obligations has resulted in a material adverse impact on the other party’s rights under this Agreement. If the force majeure does not impact EL directly but it prevents EL from manufacturing and/or delivering Licensed Products, due to an inability to obtain materials, EL will diligently attempt to find alternate sources and EL will advise Aerin LLC on a regular basis of the progress it has made in that regard. If, in Aerin LLC’s reasonable opinion, EL fails to diligently proceed to obtain alternate sources, or if the condition continues for more than one hundred eighty (180) days, whichever first occurs, Aerin LLC shall have the right to terminate this Agreement.
ARTICLE 20.
CHANGE OF CONTROL
20.1
Termination in the Event of Change of Control of Aerin LLC or JW Brands LLC.
In the event that control of Aerin LLC (or all or substantially all of its assets) or JW Brands LLC (or all or substantially all of its assets) is transferred to (i) a competitor of EL, other than a third party that has de minimis sales of cosmetic, skincare and/or fragrance products or ii) mass, club or similar retailers in any form of distribution, including the internet, EL shall have the right to terminate the Agreement, no later than 30 days following the occurrence of such event. A transfer of control of JW Brands LLC (or its assets) to Aerin LLC shall not by itself trigger EL’s right to terminate as provided in this Section 20.1.
20.2
Termination in the Event of Change of Control of EL.
In the event that a person, entity or single group of persons or entities acting in concert, other than the Lauder family, related entities, or a group comprised of members of the Lauder family and/or related entities, obtains control directly or indirectly of more than 50% of the voting power or equity interest in (i) EL or (ii) the Estee Lauder brand, Aerin LLC may terminate this Agreement, no later than 30 days following the occurrence of such event.
ARTICLE 21.
MISCELLANEOUS
21.1
Benefit
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This Agreement will inure to the benefit of and be binding upon the parties hereto, and to their permitted successors and assigns. Nothing in this Agreement is intended, nor will be deemed, to confer rights or remedies upon any person or legal entity not a party to this Agreement except to the extent that JW Brands shall be entitled to enforce, as a third party beneficiary, the provisions of Sections 4.8, 13.2(a), and this Section 21.1.
21.2
Entire Agreement; Amendment
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This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and this Agreement may not be amended or modified, except in a writing signed by both parties hereto.
21.3
Non-Waiver
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The failure of either party to enforce at any time any term, provision or condition of this Agreement, or to exercise any right or option herein, will in no way operate as a waiver thereof, nor will any single or partial exercise preclude any other right or option herein; and no waiver whatsoever will be valid unless in writing, signed by the waiving party, and only to the extent set forth in such writing.
21.4
Assignment by EL
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EL shall have the right, upon written notice to Aerin LLC, to assign this Agreement: (a) to an Affiliate of EL, and/or (b) to a purchaser of all or substantially all of EL’s assets, provided in either case that the assignee assumes in writing all of EL’s obligations under this Agreement. Any other assignment by EL (including an assignment by operation of law) requires the prior written consent of Aerin LLC in its sole discretion. In the event of a permitted assignment, this Agreement shall be binding upon the parties’ successors and permitted assigns. Any purported transaction in violation of this Agreement shall be null and void at the outset.
21.5
Assignment by Aerin LLC
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Aerin LLC shall have the right, upon written notice to EL, to assign this Agreement: (a) to an Affiliate of Aerin LLC, and/or (b) to a purchaser of all or substantially all of the assets of Aerin LLC that is authorized pursuant to Section 20.1 herein, provided in either case that the assignment is not in conflict with the Master License Agreement and assignee assumes in writing all of ALZ/Aerin LLC’s obligations under this Agreement. Any other assignment by Aerin LLC and/or its Affiliates (including an assignment by operation of law) requires the prior written consent of EL in its sole discretion. In the event of a permitted assignment, this Agreement shall be binding upon the parties’ successors and permitted assigns.
21.6
Non-Solicitation
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During the Term and for a period of one (1) year following Termination of this Agreement, no party hereto shall solicit, or knowingly entice, persuade or induce any employee of another party hereto (or its Affiliates) to terminate his or her employment with such party or to become employed by another party hereto (for purposes of this Section, the terms “employee,” shall include any persons with such status at any time during the six (6) months preceding any solicitation in question). For the avoidance of doubt, the foregoing limitation shall not restrict any party hereto from placing general advertisements of employment, or retaining a headhunter or other search firm to conduct an employment search or recruiting activities, so long as such advertisement or search is not directed at employees of another party (or its Affiliates).
21.7
Severability
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If any provision or any portion of any provision of this Agreement is construed to be illegal, invalid, or unenforceable, such shall be deemed stricken and deleted from this Agreement to the same extent and effect as if never incorporated herein, but all other provisions of this Agreement and any remaining portion of any provision which is not deemed illegal, invalid or unenforceable in part shall continue in full force and effect. The statements set forth in the Premises section of this Agreement shall be deemed to be incorporated into the operative provisions hereof.
21.8
Governing Law
.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
21.9
Jurisdiction
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The parties hereby consent to the exclusive jurisdiction of the United States District Court for the Southern District of New York and any of the courts of the State of New York sitting in the City of New York in any dispute arising under this Agreement and agree further that service of process or notice in any such action, suit or proceeding will be effective if in writing and issued as provided in Section 18.1.
21.10
Injunction.
Notwithstanding the terms of 21.11, the parties agree that unauthorized use of a party’s intellectual property and/or a breach of the exclusivity provisions herein shall cause immediate and irreparable harm to the non-breaching party for which a determination of cash damages would be difficult or impossible and therefore agree that in the event of any such unauthorized use, breach or threatened unauthorized use or breach, the non-breaching party shall be entitled to preliminary and permanent injunctive relief without the obligation of posting bond or other security. Such injunctive relief may be sought prior to or in lieu of termination of this Agreement and is in addition to, and not in lieu of, any other rights and remedies available to the parties.
21.11
Mediation
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In the event of any dispute, claim, question, or disagreement arising from or relating to this Agreement, the parties agree to try in good faith for thirty (30) days to settle the dispute by mediation administered by a person mutually agreed upon by the parties and expert in issues related to licensing agreements related to the fragrance and cosmetics industry before resorting to litigation, such mediation to be conducted in New York, New York. Each party shall ensure that senior management with authority to settle the dispute, claim, question or disagreement participates in the mediation. The parties shall share equally in the costs of mediation. All offers, promises, conduct and statements, whether written or oral, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator, shall be confidential, privileged and inadmissible for any purpose, including impeachment, in any litigation or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. Either party may seek equitable relief prior to mediation to preserve the status quo pending the completion of that process.
21.12
Exhibits and Schedules
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All Exhibits and Schedules are incorporated into this Agreement.
21.13
Headings
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The headings of the Articles and Sections of this Agreement are for convenience only and in no way limit or affect the terms or conditions of this Agreement.
21.14
Counterparts
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This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year first above written.
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ESTEE LAUDER INC.
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AERIN LLC
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By:
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/s/
Sara Moss
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By:
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/s/ Aerin Lauder Zinterhofer
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Name:
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Sara Moss
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Name:
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Aerin Lauder Zinterhofer
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Title:
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Executive Vice President and General Counsel
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Title:
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President
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AERIN LAUDER ZINTERHOFER
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/s/ Aerin Lauder Zinterhofer
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EXHIBIT A
EXISTING LICENSED TRADEMARKS
AERIN
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