One Battery Park Plaza
New York, NY 10004
Prof. Jack J. Coe Jr.
Malibu, CA 90263
Any dispute or claim arising out of or related to this Agreement, or the interpretation, making, performance, breach, validity, or termination hereof, which has not been resolved by negotiation, shall be finally settled by binding arbitration under the then applicable International Arbitration Rules of the American Arbitration Association International Center for Dispute Resolution (the "AAA Rules") by one (1) arbitration appointed in accordance with the AAA Rules. The arbitration shall be held in New York, New York. The arbitrator shall have the power to decide all questions of arbitrability. The arbitration proceedings shall be governed procedurally by the AAA Rules, without reference to state arbitration law, and at the request of either party, the arbitrator will enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings. The final judgment of the arbitrator shall be in the form of a reasoned, written opinion, and shall be issued within sixty (60) days of the conclusion of the arbitration proceeding. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction…
[Ferrand] had an express right to terminate under the Agreement for insolvency and properly exercised it, as found and concluded above. In that circumstance, the claimed breach of the implied covenant of good faith does not nullify the express contractual term or exercise thereof as a matter of law... In short, [Ferrand] was within its rights to terminate and did so properly such that, as a matter of law, depriving [Mystique] of the right to receive the "fruits of the contract" was not wrongful, but instead was justified in fact and under the law.14
Accordingly, since [Ferrand] substantially complied with the 30 day notice/cure requirement of the Agreement (Ex. 29) by actual notice to [Mystique] at its most senior levels of control, and terminated (Ex. 45) pursuant to paragraph 14.1(ii) of the Agreement, in circumstances where [Mystique] admits it did not pay the endorsement royalties, and its excuse of needing a tax identification number is without any factual basis (since the uncontradicted evidentiary record reflects the necessary information was actually provided), summary judgment in favor of [Ferrand] is appropriate on this claim, as well as on insolvency grounds, as explained above.17
"This is to inform you that Cognac Ferrand has withdrawn its motion [to lift the automatic stay] before the bankruptcy court. This effectively ends the arbitration proceeding. I would appreciate it if the ICDR could return to me any unused portion of the fees advanced by Cognac Ferrand in a check made to 'Abitbol & Cherry, LLP, as attorneys.'"36 Pursuant to Ferrand's request, the ICDR refunded the unused portion of the fees.37
|1||3/5/08 - 3/31/09||US$3,000,000|
|2||4/1/09 - 3/31/10||US$3,600,000|
|3||4/1/10 - 3/31/11||US$4,320,000|
|4||4/1/11 – 3/31/12||US$5,184,000|
|5||4/1/12 – 3/31/13||US$6,220,800|
Should Importer [Mystique] fail to reach the following percentages of the minimum order amounts, Producer [Ferrand] may, in its sole discretion, terminate this Agreement, or exclude Canada and/or Mexico from the scope of this Agreement, upon sixty days' written note:
Period (i) 90%
Period (ii) 90%
Period (iii) 95%
Period (iv) 95%
Period (v) 100%
Should Importer [Mystique] fail to meet any of the minimums stated in Section 4.2(i) through (v) as modified by the relevant percentage set forth above, it will have 30 days from receipt of Importer's [Mystique's] notice to cure such failure. Such failure may be cured by Producer [Ferrand] receiving a valid Purchase Order from Importer [Mystique] or the Agent for the quantity necessary to reach the minimum order amount required by this Agreement as modified by the applicable percentage.
Importer [Mystique] shall enter into an endorsement agreement or similar marketing agreement with the artist Calvin Broadus a/k/a "Snoop Dogg" for the promotion of "Cognac Landy" and "Drama".... Importer [Mystique] shall assume all costs related to any such agreement, including royalty payments. Producer shall have the right to terminate this Agreement if Importer is unable to enter into said agreement within the first Year of this Agreement. It is understood and agreed that Producer shall sign such endorsement agreement with the limited purpose of paying the royalty due the artist in the event of a termination of this Agreement.
All marketing, advertising and promotional expenses relating to the Products in the Territory shall be Importer's sole responsibility.
14.1 Producer shall have the right to terminate this Agreement: (i) upon the filing of a petition in bankruptcy, insolvency or reorganization against or by Importer [Mystique] or the Agent, or Importer or the Agent becoming subject to a composition for creditors, whether by law or agreement or Importer going into receivership or otherwise becoming insolvent; or (ii) if Importer or the Agent commits a "material breach" of this Agreement and such breach, if curable by action of Importer, remains uncured thirty (30) days after Producer delivers written notice of such breach.
14.2 (i) for purposes of this Section 14, a "material breach" shall mean (in addition to the clauses contained in Sections 4, 7 and 12):
(1) subject to subsection (2) and to the provisions of this Article with respect to proof of market price (section 2-723), the measure of damages for non-acceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provides in this Article (Section 2-710), but less expenses saved in consequence of the buyer's breach.
(2) If the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this Article (Section 2-710), due allowance for costs reasonably incurred and due credit for payments or proceeds of sale.
a. Denies Ferrand's claim that Mystique breached the minimum purchase requirements of Section 4.2 of the Agreement;
b. Denies Ferrand's claim that Mystique repudiated the Agreement;
c. Denies Ferrand's claim that Mystique breached the Agreement by virtue of its insolvency;
d. Denies Ferrand's claim that Mystique breached Section 12 of the Agreement with regard to marketing, advertising and promotional expenses;
e. Denies Ferrand's claim for monetary damages in net profits on the minimum purchase requirements in Section 4.2 of the Agreement;
f. Denies Ferrand's claim for costs; and
g. Grants Mystique's claim for costs of $1,960,950.61.
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