Trademark License Agreement

TRADEMARK LICENSE AGREEMENT


This Agreement ("Agreement") is made as of the 13th day of October, 2000 (the "Effective Date"), by and between Swiss Army Brands, Inc., a Delaware corporation with its principal place of business at One Research Drive, P.O. Box 874, Shelton, CT 06484 ("LICENSOR") and Tropical Sportwear International Corporation, 4902 West Waters Street, Tampa, FL 3634 ("TSI").


RECITALS


WHEREAS, LICENSOR is a licensee of the trademark and logo set forth on Exhibit A attached hereto (the "Trademarks") with the right to sublicense the Trademarks to TSI and its Totally Held Subsidiaries (as defined below) (collectively, "LICENSEE").


WHEREAS, LICENSEE desires the right, license and privilege to use the Trademarks on or in connection with the manufacturing, sale and distribution of certain Products (as defined below); and


WHEREAS, LICENSOR is willing to grant such rights to LICENSEE, subject to the terms and conditions hereinafter set forth.


NOW, THEREFORE, in consideration of the premises and the mutual promises hereinafter set forth, the parties hereto agree as follows:


1. Definitions


(a) "Channels of Trade" shall mean department stores, men's and women's clothiers and specialty stores, outdoors clothiers and specialty stores, subject to LICENSOR's written approval, not to be unreasonably withheld, concerning which stores are in keeping with the image and dignity of the Trademarks, and approved Outlets, mail order and catalog retailers and authorized internet retailers. "Channels of Trade" shall not include mass merchandisers.


(b) "Close-out Inventory" shall mean Products that are sold at a discount of at least twenty-five percent (25%) of LICENSOR'S standard wholesale price for such merchandise in the relevant selling season, and includes excess inventory.


(c) "Best Net Sales" shall have the meaning ascribed to the term in Section 6(a).


(d) "Contract Year" shall mean each period during the Term commencing on August 1 of the relevant calendar year and ending on July 31 of that year, except that the first Contract Year shall commence on the Effective Date and end on July 31, 2002 and the last Contract Year shall end on the effective date of the termination of the Agreement.


(e) "Expansion Products" shall mean belts, stockings, socks, scarves, undergarments and children's apparel.


(f) "Net Sales" shall mean the selling price or other consideration charged by LICENSEE for Products to an unrelated buyer less freight, insurance, discounts and allowances actually given, sales tax actually charged and returns actually received. If Products are sold to related parties, given away, sold at reduced prices in connection with promotions, or otherwise, or sold in combination with other articles, the selling price utilized in the calculation of Net Sales shall be the highest price charged by LICENSOR for Products to an unrelated buyer or buyers during the quarter in question.


(g) "Outlets" shall mean only those stores or outlets listed on Exhibit C attached hereto, as amended by the mutual agreement of the parties from time to time. Only Seconds and Close-out Inventory may be sold at Outlets.


(h) "Products" shall mean the following articles of men's and women's apparel: outerwear, hats, gloves, knit or woven shirts and blouses, sweaters, fleecewear, pants, jeans, skirts, and shorts, but excluding Expansion Products.


(i) "Seconds" shall mean Products that are irregulars or factory seconds which may be sold solely to Outlets at a discount of at least twenty-five percent (25%) of LICENSOR'S standard wholesale price for such merchandise in the relevant selling season.


(j) "Territory" shall mean worldwide.


(k) "Totally Held Subsidiary" shall mean a corporation owned one hundred percent (100%) by TSI, except for any legally required directors' qualifying shares, provided that such directors' shares do not exceed one percent (1%) of the total shares issued by the subsidiary, and which has executed a copy of this Agreement, thereby agreeing to be bound by all of the terms hereof.


2. Grant of License


(a) Subject to the terms and conditions of this Agreement, LICENSOR grants to LICENSEE, and LICENSEE accepts, the exclusive non-transferable right and license, (without right to sublicense such license) to use the Trademarks in the Territory solely on or in connection with the manufacture, sale and distribution of the Products during the Term (as defined below) of this Agreement. LICENSOR shall not assign, or grant any licenses or sublicenses, to use the Trademarks in connection with the manufacture, sale and distribution of the Products in the Territory during the Term of this Agreement without LICENSEE'S prior written approval.


(b) If LICENSOR wishes to expand its licensing program to encompass any Expansion Products, LICENSOR will so notify LICENSEE, and discuss expanding the definition of Products to encompass such Expansion Products, and expanding the scope of the license granted herein in accordance with terms to be mutually agreed upon by the parties.


(c) LICENSEE shall use the Trademarks only for the purposes set forth herein, and strictly in accordance with any trademark usage guidelines provided by LICENSOR from time to time.


3. LICENSOR'S Title; Protection of LICENSOR'S Rights


(a) Except for those rights granted to LICENSEE herein, LICENSEE recognizes and acknowledges that LICENSOR or its licensor retains, all ownership, title and intellectual property rights in and to the Trademarks, and LICENSOR has the right to sublicense the Trademarks for the manufacture, sale and distribution of the Products. LICENSEE agrees that it will not during the Term of this Agreement or thereafter make any claim or take any action adverse to such title to and rights in the Trademarks and will not attack the validity of the license granted hereunder anywhere in the world. LICENSEE further agrees that its every use of the Trademarks, and any goodwill relating thereto, shall inure solely to the benefit of LICENSOR.


(b) LICENSEE agrees both during and after the Term of this Agreement (i) to cooperate fully and in good faith with LICENSOR and to execute such documents as LICENSOR may request, relating to the Trademarks and any marks or trade names containing similar words or which LICENSOR believes may be confusingly similar thereto, or "Derivative Marks" thereof, including, without limitation, the registration of the Trademarks and any "Derivative Marks" thereof in additional categories, and (ii) not to oppose any application by LICENSOR for registration of the Trademarks and any "Derivative Marks" thereof in additional categories.


(c) LICENSEE shall promptly notify LICENSOR, in writing, of any infringement or potential infringement of any Trademarks of which it becomes aware. Without the express written permission of LICENSOR, LICENSEE shall have no right to bring any action or proceeding relating to such infringement or potential infringement or which involves, directly or indirectly, any issue, the litigation of which may affect the interest of LICENSOR. Nothing in this Agreement shall obligate LICENSOR to take any action relating to an infringement or potential infringement of any Trademarks.


4. LICENSEE Obligations


(a) LICENSEE shall manufacture the Products in accordance with the specifications and requirements set forth herein, and any other guidelines as may be implemented or amended from time to time by mutual consent of the parties. Without prejudice to the generality of the foregoing, LICENSEE shall ensure that the Products comply with all requirements under applicable law. The wages and working conditions under which all Products and components thereof are produced shall conform in all respects to: (i) the human rights laws and (ii) the generally accepted human rights rules or guidelines specified by national or generally recognized international groups or other non-governmental entities of (x) the country in which such Products are manufactured, (y) the country in which such Products are sold, to the extent such laws or rules apply to goods manufactured in other countries, and (z) the United States of America, to the extent such laws or rules apply to goods manufactured in other countries. LICENSEE shall provide LICENSOR with proof of such compliance on an ongoing basis.


(b) LICENSEE agrees that it will cause to appear on any label, container, packaging, product tags, or wrapping material or other materials used in connection with the Products (the "Disclosure Materials"), and on all packaging, advertising, promotional and display material bearing the Trademarks, any trademark notice or indication of trademark status specified by LICENSOR, as more fully described in Exhibit B attached hereto. LICENSEE further agrees that all Disclosure Materials used in connection with the Products shall be in compliance with applicable laws and regulations.


(c) LICENSEE agrees to submit in writing to LICENSOR for written approval, any and all designs and specifications for the Products, which written approval or rejection shall be provided by LICENSOR within thirty (30) business days (the "Approval Period") of LICENSOR'S receipt of such designs or specifications, failure to respond within the Approval Period constituting approval by LICENSOR. During any Approval Period, LICENSOR may reasonably request additional information from LICENSEE regarding certain designs or specifications, which request shall suspend the Approval Period and LICENSOR'S obligations thereunder until such information has been provided for Licensor. The receipt by LICENSOR of such additional information shall mark the start of a new Approval Period.


(d) LICENSEE acknowledges that the Trademarks are known to represent and are associated with high quality products. LICENSEE shall manufacture and market the Products only in such manner as to maintain and promote the high quality image associated with the Trademarks.


(e) LICENSEE agrees that it shall not, during the Term of this Agreement, except in accordance with the terms hereof, nor at any time thereafter: (i) market, sell or distribute any products confusingly similar to the Products in appearance and design; (ii) manufacture any other products with substantially the same design or combination of features as the Products; or (iii) use the Trademarks or the words "Swiss Army" or the word "Swiss" accompanied by a word or words with a military or outdoor connotation in connection with the advertising, sale or distribution of any items, nor utilize, in connection with the sale or offering for sale of any item a logo or device resembling the Trademarks or consisting of a cross or other devise in a red field. Notwithstanding the foregoing, LICENSEE may use the phrase "Brought to you by Victorinox, the makers of the original Swiss Army Knife" or similar language mutually agreed upon by the parties solely for crediting purposes, and may use LICENSOR'S corporate name solely for designation purposes, in each case in a manner subject to the prior written approval of LICENSOR. This paragraph shall not prevent LICENSEE from distributing or marketing; (A) products that possess similarities to the Products with respect to certain generic functional properties, but that are otherwise not confusingly similar to the Products in appearance and design, or (B) products that possess the same or similar unique and distinctive features and/or properties as the Products, one-hundred and twenty (120) days after the Products embodying such unique and distinctive features are first shipped to customers in commercial quantities.


(f) Prior to any first sale or shipment of any new category, type or style of Product or any item of packaging, labeling or advertising to be used in connection with the sale or offering for sale of Products, LICENSEE shall furnish to LICENSOR, for its inspection and approval, representative samples of each such Product or item of packaging, labeling or advertisin ...