Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 2 to Form S-1 124 804K
2: EX-1.1 Underwriting Agreement 54 165K
3: EX-2.1 Agreement and Plan of Contribution 54 159K
4: EX-3.2 Amended and Restated Cert. of Incorporation 19 66K
5: EX-3.3 Bylaws of Donna Karan International Inc. 20 42K
6: EX-5.1 Opinion of Proskauer Rose Goetz & Mendelsohn LLP 2 10K
15: EX-10.10 Stockholders Agreement 9 29K
16: EX-10.11 Donna Karen Incentive Compensation Plan 8 33K
7: EX-10.2 1996 Stock Incentive Plan 20 96K
8: EX-10.3 1996 Non-Employee Director Stock Option Plan 17 76K
9: EX-10.4 Registration Rights Agreement 33 106K
10: EX-10.5 Form License Agree. Bet Gab Studio & Donna Karan 55 109K
Co.
11: EX-10.6 Guaranty of Donna Karan International Inc. 3 11K
12: EX-10.7 Form of License Agree Bet Donna Karan & Stephen W 12 35K
13: EX-10.8 Employment Agreement/Donna Karan 20 51K
14: EX-10.9 Employment Agreement/Stephan Weiss 18 46K
17: EX-23.1 Consent of Ernst & Young LLP 1 8K
18: EX-24 Power of Attorney 1 10K
EX-10.7 — Form of License Agree Bet Donna Karan & Stephen W
Exhibit Table of Contents
EXHIBIT 10.7
LICENSE AGREEMENT
This License Agreement, made and entered into this ___ day of June, 1996
(hereinafter called "Agreement Date") is by and between Stephan Weiss
(hereinafter called "Licensor"), having a principal residence at
_______________________________ and Donna Karan Studio (hereinafter called
"Licensee"), a corporation organized under the laws of the State of Delaware,
and having its principal place of business at 550 Seventh Avenue, New York, New
York 10018.
W I T N E S S E T H :
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WHEREAS, Licensor is the owner of Intellectual Property Rights including
Design Patents, Utility Patents, Copyrights, Trade Dress Rights, Trademark
Rights and Know How (each as defined below);
WHEREAS, Licensor is willing to grant Licensee an exclusive license to
certain Intellectual Property Rights and a nonexclusive license to the remaining
Intellectual Property Rights; and
WHEREAS, Licensee desires to obtain the exclusive license and the
nonexclusive license;
NOW THEREFORE, in consideration of the promises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Definitions.
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1.1 The term "Limited Use Nonexclusive Intellectual Property Rights" shall
mean any process, machine, manufacture, composition or improvement thereof in
the Field invented or developed by Licensor and any and all other intellectual
property rights related thereto within or outside of the United States including
any utility patent rights, know how, trade secrets, unpatented and/or
unpatentable technical information, devices, models, things, methods, documents
and other materials or other confidential or non-confidential information. A
list of current Utility Patents and Patent Applications is included in Schedule
A.
1.2 The term "Exclusive Intellectual Property Rights" shall mean any
designs and any pictorial, graphic and sculptural works in the Field developed
or authored by Licensor in the form and manner as exists at the date hereof and
any and all other
intellectual property rights related thereto within or outside of the United
States including any design patent rights, utility model and industrial design
rights, trade dress rights, trademark rights, copyright and related rights, know
how, trade secrets, unpatented and/or unpatentable technical information,
devices, models, things, methods, documents and other materials or other
confidential or non-confidential information. A list of current Design Patents,
Design Patent Applications and Copyright Registrations is included in Schedule
B.
1.3 The term "Field" shall mean the beauty division of the Licensee.
1.4 The term "Licensed Products" shall mean the beauty products of
Licensee that as of the date hereof incorporate or otherwise utilize or have
incorporated or have otherwise utilized the Limited Use Nonexclusive
Intellectual Property Rights or the Exclusive Intellectual Property Rights.
1.5 The term "the Parties" shall mean Licensee and Licensor.
1.6 The term "the Territory" shall mean the world.
2. Grant of Licenses.
-----------------
2.1 Licensor hereby grants to Licensee a nonexclusive, royalty free right
and license, with the right to grant sublicenses to the DKI Group (as
hereinafter defined), to use the Limited Use Intellectual Property Rights
throughout the Territory to design, manufacture, market, advertise, distribute
and sell the Licensed Products in the Field.
2.2 Licensor further grants Licensee an exclusive, royalty free right and
license, with the right to grant sublicenses to the DKI Group (as hereinafter
defined), to use the Exclusive Intellectual Property Rights throughout the
Territory to design, manufacture, market, advertise, distribute and sell the
Licensed Products in the Field.
2.3 The DKI Group shall mean (a) Licensee, its parent company Donna Karan
International Inc. ("DKI") or any other holding company or parent company of
Licensee and (b) any present or future, direct or indirect, subsidiary of
Licensee or DKI or any other holding company or parent company of Licensee and
(c) any present or future entity (i) through which Licensee or DKI or any other
holding company or parent company of Licensee directly or indirectly conducts
its business (including, but not limited to, any partnerships or joint ventures)
and (ii) any affiliate of Licensee, DKI or any other holding company or parent
company of Licensee and (d) any present or future, direct or indirect,
sublicensee or sub-sublicensee of Licensee permitted hereunder.
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3. Reasonable Efforts. Licensee shall use reasonable efforts to
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manufacture, market, distribute and sell Licensed Products in the Field in a
manner consistent with reasonable business practices and judgment. The parties
recognize that, in view of changing styles over time in the beauty field,
Licensee in its sole discretion may continue or discontinue and subject to
Paragraph 8.5 hereof the manufacture, marketing, distribution or sale of any of
the Licensed Products and that upon any such discontinuance the rights granted
hereunder to Licensee as relate to such discontinued Licensed Products shall
automatically revert to Licensor.
4. Payment. In consideration of the licenses granted to Licensee,
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Licensee shall pay to Licensor contemporaneously with the execution of this
License Agreement the sum of $392,560, representing reimbursement of Licensor's
out-of-pocket costs and expenses incurred in the development of the Limited Use
Nonexclusive Intellectual Property Rights and the Exclusive Intellectual
Property Rights.
5. Reports and Quality Control.
---------------------------
5.1 Upon reasonable notice to Licensee and at the request of Licensor,
Licensee shall provide Licensor with a list of the Licensed Products that are in
production by Licensee at the time of Licensor's request. Licensor may request
such a list up to two times in each calendar year.
5.2 The Licensed Products shall meet the high standards of quality,
workmanship, material, and style as presently established by Licensor unless
otherwise agreed upon by Licensor and Licensee. Licensee will not knowingly
cause or authorize any Licensed Products not conforming to the conditions of
this Paragraph 5.2 to be available for sale as doing so may adversely affect the
Limited Use Nonexclusive Intellectual Property Rights and Exclusive Intellectual
Property Rights. All Licensed Products shall conform to and comply with, in all
material respects, all foreign, federal, state and local laws, rules and
regulations governing the design, quality or safety of such Licensed Products.
Licensee shall not cause or authorize (i) the use of any substandard materials
in the manufacture of the Licensed Products; (ii) any violation of any foreign,
federal, state or local law or regulation, in its actions under or related to
the license granted hereunder, including but not limited to regulations imposing
advertising or marketing standards or requiring trade or content descriptions of
the Licensed Products; or (iii) the use of the Limited Use Nonexclusive
Intellectual Property Rights and the Exclusive Intellectual Property Rights in
connection with any product or activity that is not the subject of this license.
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5.3 In order to provide Licensor with assurance that the Licensed Products
manufactured and sold meet the high standards described in Paragraph 5.2,
Licensee shall cooperate and shall cause its sublicensees to cooperate in all
reasonable respects including the right of Licensor to inspect the Licensed
Products and the facilities used to manufacture Licensed Products. Any such
inspection shall be arranged upon reasonable notice and during normal business
hours, shall relate only to the inspection of that portion of the facilities
used in connection with the Licensed Products and shall not interfere with or
include portions of the facility utilized for other proprietary activities which
are not the subject of this license.
6. Patents and Infringement.
-- ------------------------
6.1 Licensee shall be responsible for all costs and expenses related to
procuring and maintaining statutory protection of the Limited Use Nonexclusive
Intellectual Property Rights or Exclusive Intellectual Property Rights.
Licensor shall not take any action or fail to take action that will result in
abandonment, cancellation, lapse or the like of any statutory rights in the
Limited Use Nonexclusive Intellectual Property Rights or Exclusive Intellectual
Property Rights. Moreover, at Licensee's request and expense, Licensor shall
fully cooperate with Licensee to procure or maintain statutory protection of any
of the Limited Use Nonexclusive Intellectual Property Rights or Exclusive
Property Rights.
6.2 If it is believed in good faith that the Limited Use Nonexclusive
Intellectual Property Rights or Exclusive Intellectual Property Rights are
infringed or otherwise violated by a third party, the party to this License
Agreement first having knowledge of such infringement shall promptly notify the
other in writing, which notice shall set forth the facts in reasonable detail.
Licensor shall have the initial right, but not the obligation, to institute and
prosecute at its own expense any such infringement and to select counsel in
connection with the prosecution of any such infringement. If Licensor fails to
bring such action within a period of one (1) month after receiving written
notice or otherwise having knowledge of such infringement, then Licensee shall
have the right, but not the obligation, to prosecute at its own expense any such
infringement and to select counsel in connection with the prosecution of any
such infringement. Each of Licensor and Licensee agree that each shall, at the
request of the other, take all appropriate or necessary actions to assist in the
prosecution of any such proceeding instituted by the other party (including, but
not limited to, consenting to being jointed in such proceeding). Any recovery of
damages and costs in such suit shall be apportioned as follows: the party
bringing suit shall first recover an amount equal to two (2) times the cost and
expense incurred by such party directly related to the prosecution of such
action and the
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remainder shall be divided equally between Licensor and Licensee. The foregoing
infringement provisions shall survive termination or expiration of this License
Agreement.
Both Licensor and Licensee shall agree upon any disposition or settlement
of any such action which is a final judgment on the merits.
Furthermore, notwithstanding this provision, Licensee may take immediate
action against a third party without the consent of Licensor to prevent
activities such as diversion or counterfeiting of the Licensed Products in order
to avoid the immediate and often irreparable harm that Licensee would suffer
from such activities. Licensee shall provide Licensor with prompt notice that
Licensee has taken any such action.
7. Sublicensees. Licensee shall be responsible for its sublicensees and
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shall not grant any rights which are inconsistent with the rights granted to and
obligations of Licensee hereunder. If any act or omission of a sublicensee
would be a breach of this License Agreement if performed by Licensee, Licensee
shall take the necessary action to cause the sublicensee to cure the breach or
shall terminate any license rights of the sublicensee. Licensee shall give
Licensor prompt notification of the identity and address of each sublicensee
with whom it concludes a sublicense agreement and shall supply Licensor with a
copy of each such sublicense agreement.
8. Termination.
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8.1 Unless earlier terminated, this License Agreement shall extend in
perpetuity.
8.2 In the event of the default or failure by either Party to perform any
of the terms, covenants or provisions of this License Agreement to be done and
performed by such Party which default shall have a material adverse effect on
the business of the non-performing party, the non-performing Party shall have
one hundred and eighty (180) days after the giving of written notice by the
other Party of such default within which to correct such default. If such
default is not corrected within the said one hundred and eighty (180) day period
after notice, the performing Party shall have the right, at its option, to
cancel and terminate this entire License Agreement. Notwithstanding, Licensee
shall not be in default for failure to perform based upon any act by a
sublicensee, if Licensee takes action as required under Paragraph 7 against the
sublicensee and such default does not have a material adverse effect on the
business of Licensor or does not adversely effect the rights of Licensor to the
Limited Use Nonexclusive Intellectual Property Rights or the Exclusive
Intellectual Property Rights. Either Party shall have the right, at its option,
upon ten days prior written notice, to cancel and terminate this entire License
Agreement in the event that the other Party shall become involved in insolvency,
dissolution, bankruptcy or receivership proceedings affecting the operation of
its business or in the event that the other Party shall discontinue its business
for any reason.
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8.3 In the event of any termination or expiration of this License
Agreement pursuant to Paragraphs 8.1 or 8.2, all rights licensed by Licensor to
Licensee hereunder shall revert to Licensor.
8.4 No termination or expiration of this License Agreement or any portion
thereof shall constitute a termination or expiration or a waiver of any rights
of either Party against the other Party accruing at or prior to the time of such
termination or expiration.
8.5 If this License Agreement or any portion thereof is terminated,
Licensee shall be permitted to fill orders in existence at the time of
termination and additionally shall for a period of three months be permitted to
sell existing inventory of the Licensed Products.
9. Assignability. This License Agreement shall be binding upon and shall
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inure to the benefit of Licensor and his heirs and shall be binding upon and
shall inure to the benefit of Licensee and the successor to the entire beauty
business of DKI, but shall not otherwise be assignable or assigned by either
Party without prior approval by the other Party being first obtained in writing,
which approval shall not be unreasonably withheld.
10. Governing Law. This License Agreement shall be construed according to
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the laws of the State of New York and any and all disputes arising hereunder
shall be resolved in the courts of the State of New York without giving effect
to the principles of the Conflict of laws provision thereof; provided, however,
that any patent question or controversy shall be resolved in the courts having
jurisdiction over the patent or patents in question and in accordance with the
laws applicable to such patent or patents.
11. Notices; Addresses. All notices and other communications required or
------------------
permitted by this License Agreement to be given to any Party hereto shall be in
writing and shall be deemed to be duly given if personally delivered, if mailed
(by certified or registered mail, return receipt requested) or if delivered by a
nationally-recognized overnight mail or courier service, to the party concerned
at its address. For the purpose of providing any such notices and other
communications, the addresses set forth in the introductory paragraph of this
License Agreement shall be used unless changed by written notification to the
other Party.
12. Additional Provisions.
---------------------
12.1 Use of Licensor Name. Except as required by law, Licensee agrees
--------------------
that it may not use in any way the Licensor's name or any logotypes or symbols
associated with the Licensor in connection with Licensed Products without the
prior written consent of Licensor.
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12.2 Confidentiality. Licensee agrees to use reasonable efforts (which
---------------
shall be at least as great as the efforts it uses to maintain the
confidentiality of its own confidential information) to maintain in confidence
any confidential information relating to the Limited Use Nonexclusive
Intellectual Property Rights and Exclusive Intellectual Property Rights, and to
use the same only in accordance with this License Agreement. Such obligation of
confidentiality shall not apply to information which Licensee can demonstrate:
(i) was at the time of disclosure in the public domain; (ii) has come into the
public domain after disclosure through no fault of Licensee or its sublicensees;
or (iii) was known to Licensee or its sublicensees prior to disclosure thereof
by Licensor. Notwithstanding, the following acts shall not be deemed to be a
breach of confidentiality by Licensee: (i) disclosure required to procure,
maintain or enforce statutory protection of the Limited Use Nonexclusive
Intellectual Property Rights or Exclusive Intellectual Property Rights; (ii)
disclosure required by law or by a court; (iii) disclosure occurring by use,
inspection or the like of products incorporating the Limited Use Nonexclusive
Intellectual Property Rights or Exclusive Intellectual Property Rights; (iv)
disclosure by a sublicensee in violation of the terms of this License Agreement
or the sublicense agreement (subject to Licensee's obligations under paragraph 7
hereof); and (v) disclosures necessary to bona fide subcontractors to enable
them to perform their contract or to bid for a contract. The foregoing
obligations of confidentiality shall survive termination or expiration of this
License Agreement.
12.3 Indemnity. Each Party shall notify the other of any claim, lawsuit
---------
or other proceeding related to the Licensed Products. Subject to the following
sentence, Licensee agrees that it will defend, indemnify and hold harmless
Licensor, from and against any and all claims, causes of action, lawsuits or
other proceedings filed or otherwise instituted against the Licensor by third
parties related directly or indirectly to or arising out of the design,
manufacture, distribution, sale or use of the Licensed Products or any other
embodiment of the Limited Use Nonexclusive Intellectual Property Rights or
Exclusive Intellectual Property Rights by Licensee, or its sublicensees.
Licensee will also assume responsibility for all costs and expenses related to
such claims and lawsuits for which it is obligated to indemnify Licensor
pursuant to this Paragraph 12.3, including, but not limited to, the payment of
all reasonable attorneys' fees and costs of litigation or other defense.
Licensor shall promptly notify Licensee of any such claim or action which is to
be indemnified and Licensee shall have the right to control the defense,
settlement or compromise thereof. The foregoing obligation of indemnity shall
survive termination or expiration of this License Agreement.
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12.4 Insurance. Licensee and each of its Affiliates and sublicensees,
---------
shall, for so long as Licensee, its Affiliates, or sublicensees manufacture, use
or sell any Licensed Product(s), maintain in full force and effect policies of
(i) general liability insurance (with Broad Form General Liability endorsement)
with limits of not less than those generally acceptable under industry standards
and (ii) products liability insurance, with limits of not less than those
generally acceptable under industry standards. Such coverage(s) shall be
purchased from a carrier or carriers deemed acceptable to Licensor. Upon
request by Licensor, Licensee shall provide certificate(s) evidencing the
coverage(s) maintained.
12.5 Disclaimers. Licensor shall not assume any responsibility for the
-----------
design, manufacture, product specifications, or use of the Licensed Products
which are manufactured by or for or sold by Licensee or its sublicensees. All
warranties in connection with the Licensed Products shall be made by Licensee
(or the particular licensee or sublicensee that is involved) as the manufacturer
or seller thereof and none of such warranties shall directly or by implication
in any way obligate Licensor.
12.6 Disclaimer of Warranty. Licensor makes no warranties or
----------------------
representations, expressed or implied, including but not limited to, warranties
of fitness or merchantability, regarding the Licensed Products.
12.7 Failure to Enforce; Exercise of Rights. The failure of either Party
--------------------------------------
to enforce at anytime any of the provisions of this License Agreement or any
rights with respect thereto, or to exercise any election herein provided, shall
in no way be considered to be a waiver of such provisions, rights or elections,
or in any way to affect the validity of this License Agreement. Exercise by
either Party of any of its rights herein or any of its elections under the terms
and covenants herein shall not preclude either Party from exercising the same or
any other rights in this License Agreement irrespective of any previous action
or proceeding taken by either Party hereunder.
12.8 Severability. If any provision of this License Agreement is
------------
judicially or in an arbitration proceeding determined to be void or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this License Agreement which shall remain in full force and
effect. Either Party may request that a provision otherwise void or
unenforceable be reformed so as to be valid and enforceable to the maximum
extent permitted by law.
12.9 Entire Agreement; Amendments. The terms and conditions herein
----------------------------
constitute the entire agreement between the Parties and shall supersede all
previous agreements, either oral
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or written, between the Parties hereto with respect to the subject matter
hereof. No agreement of understanding bearing on this License Agreement and no
change, modification or amendment relating to the License Agreement shall be
binding upon either Party hereto unless it shall be in writing and signed by the
duly authorized officer or representative of each of the Parties and shall
expressly refer to this License Agreement.
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This License Agreement shall be effective as of the day and year first
above written.
LICENSEE:
DONNA KARAN STUDIO
By:________________________________
Name:
Title:
LICENSOR:
By:________________________________
Name: Stephan Weiss
73771
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SCHEDULE A
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Utility Patents and Patent Applications
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SCHEDULE B
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Design Patents, Design Patent Applications and Copyright Registrations
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