Exhibit 10(xiii)
AMENDED AND RESTATED
LICENSE AGREEMENT
BETWEEN
XXXXX XXXXXXXX LICENSING, INC.
AND
THE STRIDE RITE CORPORATION
AMENDED AND RESTATED
LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT entered into this 2nd
day of February, 2000, by and between XXXXX XXXXXXXX LICENSING, INC., having an
address at 000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as "Licensor") and THE STRIDE RITE CORPORATION, a Massachusetts
corporation, having its offices at 000 Xxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (hereinafter referred to as "Licensee").
W I T N E S S E T H :
WHEREAS, XXXXX XXXXXXXX LICENSING, INC. and THE STRIDE RITE
CORPORATION entered into a license agreement dated August 22, 1995, which was
amended on January 17, 1996, September 1, 1996, January 1, 1997, and August 18,
1997 (the license agreement and amendments are hereinafter referred to as the
"License Agreement"); and
WHEREAS, the parties desire to clarify and restate the License
Agreement incorporating all terms and provisions of the August 22, 1995
Agreement and all subsequent amendments;
WHEREAS, the parties desire to further amend the terms of the
License Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
agreements herein contained and promises herein expressed, and for other good
consideration acknowledged by each of them to be satisfactory and adequate, do
hereby agree as follows:
ARTICLE 1. DEFINITIONS
Definitions. The following terms shall have the following
meanings when used in this Agreement attached hereto:
1.1 Affiliates of Licensee shall mean all persons and business
entities, whether corporations, partnerships, joint ventures or otherwise, which
now or hereafter control, or are owned or controlled, directly or indirectly by
Licensee, or are under common control with Licensee.
1.2 Agreement shall mean this agreement.
1.3 Annual Period shall mean each twelve-month period commencing on
January 1 and ending on December 31, except that the first Annual Period shall
be the period commencing on August 22, 1995 and ending on December 31, 1997.
1.4 Close-Outs shall mean first quality Licensed Products which
cannot reasonably be sold to regular customers.
1.5 Gross Sales shall mean the invoiced amount of Licensed Products
shipped by Licensee before any deductions for discounts and returns, insurance
and freight.
1.6 Guaranteed Minimum Royalty shall mean the minimum royalties
payable in each Annual Period as set forth in Paragraph 5.2.
1.7 Inventory shall mean Licensee's inventory of Licensed Products
and of related work in progress.
1.8 Inventory Schedule shall mean a complete and accurate
schedule of Inventory.
1.9 Labels shall mean all labels, tags, packaging material, business
supplies and advertising and promotional materials and all other forms of
identification bearing the Trademark.
1.10 Licensed Products shall mean all types and sizes of mens,
womens, childrens (including boys, girls, infants and toddlers) footwear, other
than performance ski boots.
1.11 Mens Footwear shall mean mens and boys footwear.
1.12 Minimum Sales Level shall mean the minimum Net Sales of
Licensed Products during each Annual Period as set forth in Paragraph 4.2.
1.13 Net Sales shall mean the Gross Sales price of Licensed
Products, including but not limited to, Seconds and Close-Outs, to retailers who
are not Affiliates of Licensee less returns actually allowed and actually
received by Licensee, price allowances and customary and usual trade discounts
granted. The combined deductions from the Gross Sales for allowances and trade
discounts, including returns, from the total gross invoice price shall not
exceed ten (10%) percent of the Gross Sales of the Licensed Products shipped in
any Annual Period. No other deductions shall be taken. It is the intention of
the parties that royalties will be based on the bona fide wholesale prices at
which Licensee sells Licensed Products to independent retailers in arms' length
transactions. In the event Licensee shall sell Licensed Products to its
Affiliates, royalties shall be calculated on the basis of such a bona fide
wholesale price irrespective of Licensee's internal accounting treatment of such
sales. Licensee shall identify separately in the statements of operations
provided to Licensor pursuant to paragraph 5.4 hereof all sales to Affiliates.
1.14 Percentage Royalty shall have the definition given that term in
Paragraph 5.3.
1.15 Seasonal Collections shall mean at least two (2)
collections per annum.
1.16 Seconds shall mean damaged, imperfect, non-first quality or
defective goods.
1.17 Term shall have the definition given that term in Paragraph 3.1
and shall, if not otherwise specifically excluded, include all Renewal Terms
hereinafter defined.
1.18 Territory shall mean the continental Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxx, Xxxxxx Xxxx, Xxxxxx and the United States possessions.
1.19 Trade Secrets shall mean information including a formula,
pattern, compilation, program, device, method, technique, or process, that
derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value
from its disclosure or use; and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
1.20 Trademark shall mean the trademark registrations which are set
forth in the annexed Exhibit A, and all combinations, forms and derivatives
thereof which may be hereafter approved by Licensor for use by Licensee in
connection with the Licensed Products subject to any conditions set forth in any
written approval.
1.21 Womens Footwear shall mean womens and girls footwear.
ARTICLE 2. GRANT
2.1 License. Licensor hereby grants to Licensee an exclusive
non-assignable license during the Term of the Agreement, subject to all of the
terms and conditions contained in this Agreement to use the Trademark in
connection with the manufacture and sale of the Licensed Products in the
Territory.
2.2 Reservations. The license granted in this Article 2 does not
grant any right to Licensee to use the name "XXXXX" or "HILFIGER" individually
or derivatives of the Trademark. Nothing contained in this Agreement shall be
construed as an assignment or grant to Licensee of any right, title or interest
in or to the Trademark, it being understood and acknowledged by Licensee that
all rights relating thereto are reserved by Licensor except for the rights
specifically granted to Licensee in this Agreement. Licensee understands and
agrees that Licensor, and its other licensees and sublicensees, may manufacture
or authorize third parties to manufacture Licensed Products in the Territory for
ultimate sale outside of the Territory, or to manufacture and sell or authorize
third parties to manufacture and sell products of any and all types and
descriptions other than the Licensed Products in or outside the Territory. In
addition, to the extent it is legally permissible to do so, no license is
granted hereunder for the manufacture, sale or distribution of the Licensed
Products to be used for publicity purposes, other than publicity of the Licensed
Products, in combination sales, premiums or giveaways, or to be disposed of
under or in connection with similar methods of merchandising, such license being
specifically reserved for Licensor.
2.3 Territory. Licensee agrees that it will neither export
Licensed Products from the Territory nor sell same to any entity which it
knows
or has any reason to believe intend to export Licensed Products from
the Territory. Licensee will use its best efforts to prohibit its customers from
shipping Licensed Products outside of the Territory. To that end, Licensee shall
include the following legend on all invoices to its customers:
"The Purchaser is expressly prohibited from exporting the
items sold hereunder from the continental United States,
including Alaska, Hawaii, Puerto Rico and Canada."
2.4 Exclusivity. Licensor shall neither use nor authorize third
parties to use the Trademark in connection with the sale and/or importation of
the Licensed Products in the Territory during the Term hereof without Licensee's
prior approval. Licensor hereby agrees that Licensee shall have the exclusive
right to import into and resell the Licensed Products in the Territory.
2.5 Definitional Disputes. Licensee acknowledges that due to the
nature of the marketplace, the definition of Licensed Products may change or may
not be amenable to precise delineation. Licensee agrees that if there is a
dispute over the definition of Licensed Products, Licensor shall render a
reasonable written determination which shall be conclusive and binding on
Licensee without legal recourse.
2.6 Best Efforts. At all times while this Agreement is in effect,
Licensee shall use its best efforts to exploit the License granted throughout
the Territory, including but not limited to, selling a sufficiently
representative quantity of all styles, fabrications and colors of the Licensed
Products; offering for sale the Licensed Products so that they may be sold to
the consumer on a timely basis; maintaining a sales force sufficient to provide
effective distribution throughout all areas of the Territory; and cooperating
with Licensor's and any of its licensees' marketing, merchandising, sales and
anti-counterfeiting programs.
2.7 Showrooms and In-Store Shops.
(a) Licensee shall display the Licensed Products for sale in
separate showrooms for each of Mens Footwear, and Womens Footwear, designed and
displayed in accordance with Licensor's specifications, apart from any
showroom(s) in which Licensee or another business may offer other than Licensed
Products for sale. Subject to prior approval by Licensor, Licensee may display
the Trademark on showroom doors and office directories;
(b) Licensor reserves the right to designate the location of
Licensee's primary showroom required by Paragraph 2.7(a) above and in
satisfaction of the foregoing, Licensee agrees to sublease (the "Sublease") a
portion of the premises at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx to house the
aforementioned showroom and offices. Licensor and Licensee have entered into a
Sublease dated as of April 28, 1997 for showroom space for Mens Footwear, and
the parties agree to negotiate in good faith a Sublease for a Womens Footwear
showroom in space adjacent to the Mens showroom space with commercial terms that
are no less favorable to the Licensee than those set forth on the attached
Schedule 2.7(b). Among other provisions, the Sublease shall contain (i) a cross
default provision with this Agreement and (ii) a monthly rent
equal to Licensee's pro rata portion of Licensor's rent (including common area
charges and additional rent). Upon reasonable notice, Licensee shall be
permitted to inspect Licensor's expense records in connection with such showroom
and offices; and
(c) Licensee will, at Licensor's option, participate in any
in-store shop or main floor fixturing program with any of Licensee's customers.
To that end, to the extent that the same is not paid for by Licensee's customers
or Licensor pursuant to the following sentence, Licensee shall pay for the
necessary fixturing for the display of the Licensed Products which shall be in
keeping with the specifications and design of the respective shop or main floor
fixtures.
(i) In connection with the fixturing associated with
Mens Footwear, Licensor shall contribute the first $____________ toward the
in-store shop program during the First and Second Annual Periods, which
contribution shall be applied to the cost of the design and installation of the
shop fixtures. To the extent that Licensor contributes more than $____________
toward the in-store shop program for the fixturing associated with Mens Footwear
during the First and Second Annual Periods, Licensee shall add an amount equal
to such excess to its advertising obligations set forth in Article 7 ("Excess
Advertising Payment"). The Excess Advertising Payments shall be in addition to,
and not in lieu of any other advertising obligations of Licensee hereunder, and
shall be due and payable to Licensor within thirty (30) days of the excess
contribution by Licensor. Licensor will, upon reasonable request from Licensee,
provide Licensee with evidence of such contribution.
(ii) In connection with the fixturing associated with
Womens Footwear, Licensee shall contribute the greater of (i) $__________; or
(ii) _______ (_____%) percent of Net Sales of Womens Footwear toward the
in-store shop program during each Annual Period hereunder. With Licensor's prior
written consent, a portion of the aforementioned amount to be expended in
connection with Womens Footwear may be expended by Licensee for cooperative
advertising.
(d) In the event that Licensee shall maintain a showroom in a
city in which Licensor's U.S. mens sportswear licensee shall maintain a
showroom, such as Dallas, Atlanta, etc., Licensor may require Licensee's
showroom to be located in the sportswear showroom or adjacent thereto.
2.8 Sales and Deliveries. Licensee acknowledges that the
availability and selection of styles, fabrications, colors and sizes are an
integral part of the high reputation and value which the trade and consumers
have come to associate with the Trademark. Therefore, to protect that reputation
and value, Licensee agrees that its policy of sale, distribution, and
exploitation shall be of a high standard and to the best advantage, and that the
same shall in no way adversely reflect upon the good name, trademarks and trade
names of Licensor or any of its programs. Licensee further agrees that it will
use due diligence to make certain that at all times no less than ninety-five
(95%) percent of the Licensed Products ordered and approved by Licensee for
shipment are shipped timely in compliance with the shipping schedule
recited in each order. Licensee shall at all times maintain a sales force for
the sale of the Licensed Products which shall be sufficient to provide effective
distribution of the Licensed Products throughout the entire Territory.
2.9 Organization. Licensee shall establish a separate division of
its company dedicated exclusively to the sale of Licensed Products, under the
name "Xxxxx Xxxxxxxx Footwear". In connection with such division, Licensee
shall, at its sole cost and expense, employ individuals qualified to hold the
positions set forth on the organization charts for each of Mens and Womens
Footwear annexed hereto as Exhibit F. All personnel employed by the Xxxxx
Xxxxxxxx Footwear division shall work exclusively with Licensor's
representatives on the Licensee's business arising under this Agreement and
shall report directly to the President of Licensee or his designee. The
individuals holding the positions marked with an asterisk on Exhibit F will be
hired with the prior approval of Licensor and will be relieved of their duties
under this Agreement at the request of Licensor. In addition, Licensee shall
maintain separate sales force for the sale of Licensed Products. The members of
such sales force may not sell or represent any products other than the Licensed
Products.
2.10 Merchandise Coordinator Program. Except as set forth herein,
Licensee shall participate in Licensor's Merchandise Coordinator Program on a
direct cost basis to be reasonably determined by Licensor. In no event shall the
amount of Licensee's required participation for the First Annual Period exceed
$100,000.00 and for each Annual Period thereafter exceed _____ (___%) percent of
its Net Sales. Licensee shall be responsible for paying for the portion of such
cost of the program as is dedicated to Licensee relative to the other licensees
included in the program. Effective May 1, 1998, Licensor shall no longer include
Mens Footwear in Licensor's Merchandise Coordinator Program, however Licensee
shall continue to pay to Licensor ______ (___%) percent of Net Sales of Licensed
Products for the month of May 1998. Beginning April 1, 1999, Licensor shall
establish a separate merchandise coordinator staff dedicated to the coordination
of the Licensed Products (the "Program"), which Program shall, at its inception,
include twelve (12) merchandise coordinators. Licensee shall be responsible for
all costs associated with the Program. Licensee shall also be responsible for
its pro rata portion of the expenses incurred by the Vice President of the
Program, the Assistant to the Vice President and all regional managers (5 at
Program inception), which expenses shall include, but not be limited to,
salaries, benefit, travel, entertainment and all other Program related expenses.
In Licensor's discretion, Licensor may, by written notice to Licensee, require
Licensee to resume participation in Licensor's Merchandise Coordination Program,
in which event, Licensee shall pay to Licensor, on a quarterly basis, one (1%)
percent of Net Sales of Mens Footwear and two (2%) percent of Net Sales of
Womens Footwear (excluding Seconds and Closeouts). The percentage of Net Sales
paid by Licensee for the Program which are a result of sales in Canada shall be
designated for use in Canada.
ARTICLE 3. TERM OF THE AGREEMENT
3.1 Term. The initial term of this Agreement shall commence on the
date hereof and shall end on December 31, 2001 (the "Term"). Notwithstanding
anything to the contrary contained herein, Licensor shall have the right to
terminate this Agreement on ninety (90) days written notice if the actual Net
Sales of Licensed Products are not equal to or greater than the applicable
Minimum Sales Level set forth in Paragraph 4.2 below.
3.2 Extension. Providing that Licensee is not then in default and is
not in default for the balance of the initial Term, and providing further that
Licensee has met the Minimum Sales Levels for each Annual Period during the Term
hereof, Licensee shall have the right to extend this Agreement for one
additional three (3) year term on one (1) year prior written notice to Licensor
(the "Extension"). The parties acknowledge that the failure of the Licensee to
meet the Minimum Sales Level for the Second Annual Period for Mens Footwear has
been waived by the Licensor. The notice may not be given more than fifteen (15)
months prior to end of the initial Term. Licensee acknowledges that the one (1)
year period for notice is necessary in order to maintain the continuity of
Licensor's Licensing and Marketing programs and the goodwill associated with the
Trademark. Licensee agrees that "time is of the essence" and that Licensee's
failure to exercise its option to renew timely shall be construed as a decision
by Licensee that it has elected not to renew and shall permit Licensor to
immediately replace Licensee by executing a new License Agreement with third
parties, to commence after this Agreement has concluded, without any liability
to Licensee. Expiration or termination of this Agreement shall not affect any
obligation of Licensee to make payments hereunder accruing prior to such
expiration or termination.
ARTICLE 4. SALES
4.1 Sales/Marketing and Production Plans. On each January 1 and July
1 of each Annual Period during the Term, Licensee will submit to Licensor, for
Licensor's approval, a schedule showing in detail the projected sales and
marketing plans for the Licensed Products for each of the next two quarterly
periods. In addition, Licensee will submit to Licensor upon execution of the
Agreement a proposed production calendar for the Licensed Products. Licensee
will work with Licensor to create a production calendar for Licensed Products
that is agreeable to both parties. Licensee shall provide to Licensor, on a
monthly basis, monthly wholesale bookings reports and retail selling reports, to
the extent the same are available from the retailers.
4.2 Minimum Sales Levels. The first bona fide shipment of Mens
Footwear to a customer of Licensee shall occur no later than February 28, 1997.
In addition, during each Annual Period, Licensee shall be required to meet the
following Minimum Sales Levels of Mens Footwear:
Minimum Sales
Annual Period Level of Mens Footwear
First $ 7,000,000*
Second $13,000,000
Third $44,600,000
Fourth $48,300,000
Fifth $53,100,000
Sixth $53,100,000
Seventh $53,100,000
Eighth $53,100,000
*In the event that Licensee commences shipment of Licensed Products prior to
October 15, 1996, the Minimum Sales Level for the First Annual Period shall be
increased by $583,333.33 for each month or part thereof from the date of first
shipment to October 15, 1996.
The first bona fide shipment of Womens Footwear to a customer of Licensee shall
occur no later than September 30, 1998. For purposes of the license granted
hereunder for Womens Footwear, the Minimum Sales Level, Net Sales and
corresponding payments associated therewith, shall be accumulated for the Second
and Third Annual Periods. In addition, during each Annual Period, Licensee shall
be required to meet the following minimum levels of Net Sales of Womens
Footwear:
Annual Period Minimum Sales Level
For Womens Footwear
Second and Third $ 40,000,000
Fourth $ 60,000,000
Fifth $ 75,000,000
Sixth $ 90,000,000
Seventh $105,000,000
Eighth $120,000,000
The Minimum Sales Level for each Annual Period, commencing with the Third Annual
Period and thereafter, shall be the greater of the amounts set forth above for
such Annual Periods and eighty (80%) percent of the actual Net Sales for the
immediately preceding Annual Period. In no event may the Minimum Sales Level for
any Annual Period be less than Minimum Sales Level for the immediately preceding
Annual Period.
4.3 Certification. Within ninety (90) days of the end of each Annual
Period, Licensee shall send to Licensor a certification by a duly authorized
officer of Licensee of the Net Sales of Licensed Products during such Annual
Period (the "Certification"). Within one hundred twenty (120) days of the end of
each Annual Period, Licensee shall send to Licensor the Certification further
certified by Licensee's external auditors.
ARTICLE 5. LICENSE FEES
5.1 Requirement of Royalties. All Licensed Products sold by
Licensee, or its Affiliates or subsidiaries, require the payment of royalties by
Licensee to Licensor as set forth in this Article 5.
5.2 Guaranteed Minimum Royalty. In consideration of the rights
granted to Licensee pursuant to this Agreement, Licensee shall, during each
Annual Period or portion thereof calculated on a pro rata basis, during the
Term, pay to Licensor the Guaranteed Minimum Royalties, as defined in this
paragraph 5.2, payable in quarterly installments in advance on the first day of
each calendar quarter during each year during the Term hereof, except that for
the First Annual Period, the Guaranteed Minimum Royalties shall be paid in four
(4) equal installments on the date hereof, October 1, 1996, January 1, 1997 and
April 1, 1997. The Guaranteed Minimum Royalty for each Annual Period shall be
equal to _______ (___%) percent of the Minimum Sales Levels for such Annual
Period as the same may be adjusted pursuant to Paragraph 4.2 above. In the event
that during any Annual Period, the actual payments under Paragraph 5.3 hereof
exceed the entire Guaranteed Minimum Royalty with respect to that Annual Period,
no further Guaranteed Minimum Royalty payments need be made for such Annual
Period.
5.3 Percentage Royalty. In consideration of the rights granted to
Licensee pursuant to this Agreement, Licensee shall, during each of the First
and Second Annual Periods or portion thereof pay Licensor a royalty of the
following listed percentages of Net Sales of Mens Footwear sold by Licensee.
Percentage Royalties for
Annual Net Sales Mens Footwear
$0 - $9,999,999.99 ___%
$10,000,000 - $19,999,999.99 ___%
Over $20,000,000 ___%
Licensee shall, during each Annual Period or portion thereof beginning with the
Third Annual Period pay Licensor a royalty of _______ (___%) percent of Net
Sales of Mens Footwear sold by Licensee, and during each Annual Period or
portion thereof pay to Licensor a percentage royalty of seven (7%) percent of
the Net Sales of Womens Footwear sold by Licensee. The Percentage Royalty for
Close-Outs and Seconds shall be _________ (___%) percent of Net Sales of such
Licensed Products. Percentage royalties shall be payable in quarterly
installments on January 15, April 15, July 15 and October 15 for the immediately
preceding quarter of sale, less Guaranteed Minimum Royalty payments for such
period. All royalties shall accrue upon the sale of the Licensed Products
regardless of the time of collection by Licensee. For purposes of this
Agreement, a Licensed Product shall be considered "sold" upon the date of
billing, invoicing, shipping, or payment, whichever occurs first.
5.4 Royalty Statements. Licensee will deliver to Licensor at the
time each Percentage Royalty payment is due, complete and accurate statements,
in the form annexed hereto as Exhibit B, signed by a duly authorized officer of
Licensee and certified by him as accurate indicating all of the following
information by month: (i) the total invoice price of all Licensed Products sold
during the period covered by such percentage royalty payment; (ii) the amount of
discounts and credits from Gross Sales which properly may be deducted therefrom,
during said period; (iii) computation of the amount of percentage royalty
payable hereunder for said period; and (iv) the breakdown among Mens Footwear,
and Womens Footwear, as well as a break-out in each of the foregoing categories
for the sales of Seconds and Close-Outs. At least once annually, or more often
at Licensor's request, Licensee will also deliver to Licensor a certification
from its external auditors that the statement which it accompanies is in
accordance with the requirements of this paragraph 5.4. Receipt or acceptance by
Licensor of any statement furnished, or of any sums paid by Licensee, shall not
preclude Licensor from questioning their correctness at any time; provided,
however, that reports submitted by Licensee shall be binding and conclusive on
Licensee in the event of any termination based on a breach by Licensee arising
out of any payment or report.
5.5 Books and Records. Licensee shall, at its sole cost and expense,
maintain complete and accurate books and records (specifically including,
without limitation, the originals or copies of documents supporting entries in
the books of account) covering all transactions arising out of or relating to
this Agreement. In addition, Licensor and its duly authorized representative
have the right, during normal business hours, for the duration of this Agreement
and for seven (7) years thereafter, to examine and copy said books and records
and all other documents and materials in the possession of and under the control
of Licensee with respect to the subject matter and terms of this Agreement. The
exercise by Licensor of any right to audit at any time or times or the
acceptance by Licensor of any statement or payment shall be without prejudice to
any of Licensor's rights or remedies and shall not bar Licensor from thereafter
disputing the accuracy of any payment or statement and Licensee shall remain
fully liable for any balance due under this Agreement. The Products shall be
assigned style numbers unique from any products other than the Licensed Products
Licensee may manufacture and/or sell. The style number assigned to each Licensed
Product shall be identical to the style number utilized to identify that
Licensed Product in all Licensee's books and records. All documents evidencing
the sale of Licensed Products shall state the style and number of each of such
products. Licensee shall not use terms such as "assorted" or "irregular" without
a style specification. All sales of the Licensed Products shall be made on
sequentially numbered invoices which shall (1) contain sales only of the
Licensed Products, (2) contain a statement that it shall only be paid to an
account owned by Licensee or its assignee, and (3) be recorded in a separate
ledger account.
5.6 Taxes. Licensee 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), any stamp or documentary taxes or
duties, turnover, sales or use taxes, value-added taxes, excise
taxes, customs or exchange control duties or any other charges relating to or on
any royalty payable by Licensee to Licensor. Licensee shall 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
Licensee's performance under this Agreement. If any tax or withholding is
imposed on royalties, Licensee shall obtain certified proof of the tax payment
or withholding and immediately transmit it to Licensor. Nothing contained in
this Paragraph 5.6 shall be interpreted to mean that Licensee is responsible for
any income taxes or other taxes which would be the obligation of Licensor.
5.7 Underpayments. If, upon any examination of Licensee's books and
records pursuant to Paragraph 5.5 hereof, Licensor shall discover any royalty
underpayment by Licensee, Licensee will make all payments required to be made to
correct and eliminate such underpayment within ten (10) days of Licensor's
demand. In addition, if said examination reveals a royalty underpayment of five
percent (5%) or more for any royalty period, Licensee will reimburse Licensor
for the cost of said examination within ten (10) days of Licensor's demand.
5.8 Manner of Payment. All payments required by Licensee hereunder
shall be made to Licensor in Delaware in U.S. Dollars, and all references to
dollars shall mean U.S. Dollars. In the event that Licensee is required to
withhold certain amounts for payment to the appropriate governmental
authorities, Licensee will supply to Licensor the official receipts evidencing
payment therefor.
5.9 Interest on Late Payments. In addition to any other remedy
available to Licensor, if any payment due under this Agreement is delayed for
any reason, interest shall accrue and be payable, to the extent legally
enforceable, on such unpaid principal amounts from and after the date on which
the same became due, at a per annum equal to the lower of four (4) percentage
points above the prime rate of interest in effect from time to time at Chemical
Bank in New York, New York, U.S.A. and the highest rate permitted by law in New
York.
5.10 No Set-Off. The obligation of Licensee to pay royalties
hereunder shall be absolute notwithstanding any claim which Licensee may assert
against Licensor. Licensee shall not have the right to set-off, compensate or
make any deduction from such royalty payments for any reason whatsoever.
5.11 Purchases By Licensor's Outlet Stores. Licensee agrees that it
will offer for sale an amount of Closeouts and Seconds to outlet stores owned by
or affiliated with Licensor (the "Outlet Stores") equal to the amount of
Closeouts and Seconds made available to Licensee's outlet stores. Prior to
offering Close-Outs and Seconds for sale to other customers, Licensee shall
first offer the same to the Outlet Stores. The price for such Closeouts and
Seconds shall be the price charged to Licensee's most favored customers. In
addition, beginning on the first day of each of Licensee's market periods,
Outlet Stores may purchase Licensed Product at the wholesale price of the
Licensed Product. Licensee agrees to fill the orders of the Outlet
Stores in at least the same manner which Licensee fills orders from its other
customers. Finally, Outlet Stores may contract for special programs of Licensed
Product at a price equal to the landed cost of such product plus twenty-five
(25%) percent. No royalty or advertising payment shall be due on purchases of
Licensed Product (including Closeouts, Seconds or special programs) by Outlet
Stores. No Licensed Product may be sold or displayed in the outlet stores of
Licensor or Licensee earlier than six (6) months from the launch of that
product. Licensee may not manufacture Licensed Products for its outlet stores
and may only sell Close-Outs and Seconds from such stores.
5.12 Purchases By Licensor's Retail Stores. Beginning on the first
day of each of Licensee's market periods, retail stores owned by or affiliated
with Licensor (the "Retail Stores") may purchase Licensed Product at the
wholesale price of the Licensed Product. Licensee agrees to fill the orders of
the Retail Stores and flagship retail locations owned or affiliated with
Licensor "the "Flagship Stores") in at least the same manner which Licensee
fills orders from its other customers. In addition, Retail Stores may contract
for special programs of Licensed Product at a price equal to the landed cost of
such product plus twenty-five (25%) percent and Flagship Stores (such Flagship
Stores in the United States not to exceed three in number) may purchase all
Licensed Products including, but not limited to, special programs, at a price
equal to the landed cost of such product plus twenty (20%) percent. No royalty
or advertising payment shall be due on purchases of Licensed Product (including
Closeouts, Seconds or special programs) by Retail Stores or Flagship Stores.
5.13 Products for Licensor's Use. Licensee shall supply to Licensor,
at Licensee's sole cost and expense, three (3) edited sets of each Seasonal
Collection of Licensed Products for Licensor's public relations and advertising
purposes or for Licensor's showrooms, plus a reasonable quantity of Licensed
Products for Xx. Xxxxx Xxxxxxxx'x personal use and a reasonable quantity of
Licensed Products for "shoe" advertisements.
5.14 Purchases By Licensor. In addition to the Licensed Products
which Licensee provides to Licensor pursuant to Paragraph 5.13 above, Licensor
may purchase reasonable quantities of Licensed Products from Licensee for
display in Licensor's showrooms, for public relations purposes and for "non-shoe
specific" advertisements at forty (40%) percent off the regular wholesale price
of Licensed Products on standard industry terms. Licensee shall permit Licensor
to purchase a reasonable amount of Licensed Products for the personal use of
Licensor's employees from Licensee at the regular wholesale price of such
Licensed Products on standard industry terms. No royalty or advertising payment
shall be payable by Licensee with respect to such purchases.
5.15 Financial Statements. Licensee shall provide Licensor (a) a
certified, audited financial statement to be delivered to Licensor within five
(5) months after the end of each fiscal year of Licensee and (b) a six (6) month
interim financial statement to be delivered to Licensor within sixty (60) days
after the end of the six (6) month period. The year end financial information
must be prepared by a chartered accountant having no interest in Licensee's
business and approved by Licensor.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
6.1 Warranties and Representations of Licensor. Licensor hereby
represents, warrants and covenants that:
(a) it has the full right, power and authority to enter into this
Agreement and to license Licensee with respect to all the rights granted
hereunder;
(b) it is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(c) all necessary corporate acts have been effected by it to
render this Agreement valid and binding upon it; and
(d) in its negotiations relative to this Agreement, it has not
utilized the services of any finder, broker or agent and it owes no commissions
or fees to any such person in relation hereto. Licensor agrees to indemnify
Licensee against, and hold it harmless from, any and all liabilities (including,
without limitation, reasonable attorneys' 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 Licensor.
(e) it is the owner of the trademarks listed on Exhibit A, which
trademarks are valid, existing trademarks.
6.2 Warranties and Representations of Licensee. Licensee 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. Licensee agrees to indemnify
Licensor 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 Licensee.
ARTICLE 7. ADVERTISING
7.1 Guaranteed Minimum Advertising Payment. In order to ensure that
advertising of the Licensed Products shall be consistent with Licensor's
advertising plans, Licensee shall, during each Annual Period or portion thereof
calculated on a pro rata basis during the Term, pay to Licensor the Guaranteed
Minimum Advertising Payments listed below, payable in quarterly installments
concurrently with the Guaranteed Minimum Royalty Payments in advance on the
first day of each quarter, except that for the First Annual Period, the
Guaranteed Minimum Advertising Payments for Mens Footwear shall be paid in four
(4) equal installments on August 22, 1995, September 1, 1996, January 1, 1997,
and April 1, 1997 and for the Second and Third Annual Periods, the Guaranteed
Minimum Advertising payments for Womens Footwear shall be paid in four (4) equal
installments on August 1, 1997, January 1, 1998, January 1, 1999 and March 25,
1999. In the event that the foregoing payment schedule is not sufficient to pay
for expenditures made by Licensor pursuant to the advertising plan submitted by
Licensor for that Annual Period, Licensee shall accelerate, any or all of such
payments, as necessary, on ten (10) days written notice. In the event that
during any Annual Period, the actual payments under Paragraph 7.2 hereof exceed
the entire Guaranteed Minimum Advertising Payment with respect to that Annual
Period, no further Guaranteed Minimum Advertising Payment need be made for such
Annual Period:
Guaranteed Minimum Advertising Payment
Annual Period Mens Womens
First $_________* -----
Second $_________ $_________**
Third $_________ $_________
Fourth $_________ $_________
Fifth $_________ $_________
Sixth $_________ $_________
Seventh $_________ $_________
Eighth $_________ $_________
The Guaranteed Minimum Advertising Payment for Mens Footwear for each Annual
Period shall be equal to the greater of the amounts set forth above and _____
(___%) percent of the Minimum Sales Level for such Annual Period as provided in
Paragraph 4.2 above.
*In the event that Licensee commences shipment of Licensed Products prior to
October 15, 1996, the Guaranteed Minimum Advertising Payment for Mens Footwear
for the First Annual Period shall be increased by $__________ for each month or
part thereof from the date of first shipment to October 15, 1996.
**Licensee shall receive a credit of no more than $280,000 to be applied
against the combined Guaranteed Minimum Advertising Payment for the second
and third Annual Periods equal to the cost of Licensee's cooperative
advertising with its customer, provided that such cost is separately charged
to Licensee. Licensee
shall provide the back-up documentation evidencing the credit to Hilfiger with
each Guaranteed Minimum Advertising during the applicable annual Periods.
7.2 Percentage Advertising Payment. Licensee shall pay to
Licensor a Percentage Advertising Payment equal to the following listed
percentages of Net Sales of Licensed Products:
Annual Period Mens % Womens %
First _____ _____
Second _____ _____
Third _____ _____
Fourth and thereafter _____ _____
Beginning with the Third Annual Period for Mens Footwear and the Fourth Annual
Period for Womens Footwear, the Percentage Advertising Payment for Seconds and
Close-Outs shall be reduced to two (2%) percent of Net Sales. Percentage
Advertising Payments shall be payable in quarterly installments on January 15,
April 15, July 15 and October 15 for the immediately preceding quarter of sale,
less Guaranteed Minimum Advertising Payments for such period.
In addition to the Percentage Advertising Payment, Licensee shall expend an
additional one (1%) percent of the Net Sales of Womens Footwear (during the
Third Annual Period only) for cooperative advertising. Licensee shall receive a
credit against this obligation for early order discounts to its customers
whereby the customers receiving the discount are required to spend the amount of
such discount for cooperative advertising. In no event shall such credit exceed
one (1%) percent of the total price of the invoice to which such discount
pertains. In order to receive a credit for an early order discount, Licensee
must provide to Licensor evidence of the expenditure and placement of the
cooperative advertising for which the credit has been given together with the
Advertising Expenditure Form attached as Exhibit E.
7.3 Advertising Expenditures. Licensor shall spend the amounts
received from Licensee pursuant to Paragraphs 7.1 and 7.2 above, as well as the
Excess Advertising Payments received pursuant to Paragraph 2.7(c) above, for the
purpose of promoting the Licensed Products and the Trademark in any manner
Licensor, in its sole discretion, deems appropriate.
--------------------------------------------------------------------------------
Such expenditures shall include, without limitation, creative, marketing,
advertising, public relations, special events and promotions, media and
production, administration and other costs related to all of the foregoing. All
amounts received by Licensor from Licensee pursuant to Paragraphs 7.1 and 7.2
above, which are a result of sales in Canada shall be directed by Licensor to be
spent in Canada. Within sixty (60) days of the end of each Annual Period,
Licensor shall provide to Licensee a statement of advertising including the
Licensed Products placed during that Annual Period and the cost of such
advertising. In the event that the cost of such advertising is less than the
total advertising payments made by Licensee to Licensor for that Annual Period,
Licensor agrees to place additional advertising in an amount
equal to the shortage during the first quarter of the next Annual
Period. Any apportionment of advertising costs among the Licensed Products and
other products bearing the Trademark shall be made by Licensor in its sole
discretion. Licensor shall make its best efforts to have Licensed Products
appear in advertising placed by Licensor if the model's feet are visible and the
model is wearing shoes.
7.4 Approval of Packaging, Labeling and Advertising. All packaging,
labeling and advertising shall be in strict compliance with specifications to be
provided by Licensor. No advertising, including cooperative advertising, may be
used without the prior written consent of Licensor first had and obtained in
each instance. Licensee agrees that it will cease selling Licensed Products to
any of its customers who place or use unauthorized advertisements including the
Licensed Products or the Trademarks. The use of any other packaging or labeling
is expressly prohibited. All packaging and labeling shall use the Trademark, but
no other trademark or trade name shall be used except as may be required by
applicable law or permitted by Licensor. Licensee shall not be permitted to use
its name(s) on the Licensed Products, packaging and other materials displaying
the Trademark other than as specifically approved by Licensor. Any packaging and
labeling materials provided by Licensor to Licensee shall be so provided at
Licensee's expense and the price therefor shall be Licensor's cost of producing
and providing the same. Licensor reserves the right to require Licensee to
purchase Labels to be used on the Licensed Products only from sources designated
by Licensor, provided that such sources provide the Labels to Licensee in a
reasonably competitive manner as to price and delivery.
7.5 Launch. In addition to the advertising requirements of
Paragraphs 7.1 and 7.2, Licensee agrees to host a launch event or distribute a
gift package to the fashion and financial press and to major retail accounts
during the initial selling season for the first Seasonal Collection to be sold
under this Agreement. Such event shall be comparable to similar launch events
hosted by Licensor's other licensees of the Trademark and shall reasonably
reflect the prestige of the Trademark and the relative significance of Licensed
Products to Licensor. Licensor shall develop advertisements to be used in
connection with the consumer launch of the Licensed Products.
7.6 Fashion Show. Licensee shall, at Licensee's sole cost and
expense, provide reasonable quantities of mens footwear for fashion shows held
by Licensor and/or its other licensees. For fashion shows held by Licensor or
its other licensees in which womens footwear is required, Licensee shall provide
womens footwear, including footwear to be manufactured specifically for use in
fashion shows, at Licensee' sole cost and expense, however such cost and expense
shall not exceed fifty thousand ($50,000) dollars for womens footwear during
each Annual Period.
7.7 Trade Shows. Licensee may not participate in trade shows
without the prior written consent of Licensor.
ARTICLE 8. QUALITY AND STANDARDS
8.1 Distinctiveness and Quality of the Trademark. Licensee shall
maintain the distinctiveness of the Trademark and the image and high quality of
the goods and merchandise bearing the xxxx presently manufactured and sold by
Licensor and its other licensees, and the prestigious marketing of same as
hitherto and presently maintained by Licensor and its other licensees. Licensee
agrees that, with respect to all Licensed Products manufactured or sold by it,
the same will be of high quality as to workmanship, fit, design and materials
used therein, and shall be at least equal in quality, workmanship, fit, design
and material to the samples of Licensed Products submitted by Licensee and
approved by Licensor pursuant to Paragraph 8.3 hereof. All manufacturing and
production shall be of a quality in keeping with the prestige of the Trademark.
In addition, Licensee acknowledges that in order to preserve the goodwill
attached to the Trademark, the Licensed Products should be sold at prices and
terms reflecting the prestigious nature of the Trademark, and the reputation of
the Trademark as appearing on goods of high quality and reasonable price, it
being understood, however, that Licensor is not empowered to fix or regulate the
prices for which the Licensed Products are to be sold, either at the wholesale
or retail level.
8.2 Shops, Stores, Retail Outlets. The Licensed Products sold by
Licensee may be sold only to those specialty shops, department stores and retail
outlets which carry high quality and prestige merchandise and whose operations
are consistent with Licensor's reputation and its sales policies and with the
prestige of the Trademark and only to those customers expressly approved by
Licensor. Prior to the opening of each selling season (and whenever Licensee
shall wish to sell Licensed Products to customers not previously approved by
Licensor), Licensee shall submit a written list of the proposed customers to
Licensor for Licensor's prior written approval, which approval may be given or
withheld at Licensor's sole discretion, based upon whether it deems that the
proposed customer shall enhance the quality and prestige of the Trademark.
Licensor shall have the right to withdraw any such approval on thirty (30) days
written notice to Licensee. Licensee shall not (a) market or promote or seek
customers for the Licensed Products outside of the Territory; (b) establish a
branch, wholly owned by subsidiary, distribution or warehouse with inventories
of Licensed Products outside of the Territory; (c) sell or distribute any
Licensed Products to wholesalers, jobbers, diverters, catalog vendors or any
other entity which does not operate retail stores exclusively; (d) use the
Licensed Products as giveaways, prizes or premiums, except for promotional
programs which have received the prior written approval of Licensor; or (e) sell
the Licensed Products to any third party or Affiliate of Licensee or any of its
directors, officers, employees or any person having an equity participation in
or any other affiliation to Licensee, without the prior written approval of
Licensor. Licensee shall include and shall enforce the following on all invoices
to its customers:
"Limitations on Sale by Buyer. (A) Seller expressly
reserves the right to limit the amount of merchandise
delivered to only such quantities as are necessary to
meet the reasonably expect demand at Buyer's store locations.
(B) This Merchandise is sold to Buyer for resale to the ultimate
consumer only. Buyer shall be expressly prohibited from selling the
merchandise purchased hereunder to a retailer or other dealer in
like merchandise, or to any party who Buyer knows, or has reason to
know, intends to resell the merchandise.
(C) The merchandise purchased hereunder may not be sold by Buyer
from any of its store location(s) which Seller has advised Buyer
does not qualify as an acceptable location."
8.3 Samples of Manufactured Products. Before Licensee shall sell or
distribute any Licensed Products in any Seasonal Collection, Licensee shall
submit samples of each of such Licensed Products to Licensor for its prior
written approval, which approval may be withheld by Licensor in its sole and
absolute discretion. Any such request for approval shall be submitted to
Licensor on the form annexed hereto as Exhibit C. Such samples shall be
submitted sufficiently far in advance to permit Licensee time to make such
changes as Licensor deems necessary. Any approval given hereunder shall apply
only to that Seasonal Collection for which it is submitted to Licensor. Once
samples have been approved, Licensee will manufacture only in accordance with
such approved samples and will not make any changes for manufacture without
Licensor's prior written approval. All samples of Licensed Products submitted to
Licensor pursuant to this Paragraph 8.3 shall be provided at Licensee's sole
cost and expense. Licensee shall submit to Licensor additional samples of
Licensed Products upon Licensor's reasonable request. No Licensed Products
(including samples) shall be distributed and/or sold by Licensee pursuant to
this Agreement unless such Licensed Products are in substantial conformity with
and at least equal in quality to the samples previously approved by Licensor in
accordance with this Paragraph 8.3.
8.4 Non-Conforming Products. In the event that any Licensed Product
is, in the judgment of Licensor, not being manufactured, distributed or sold
with first quality workmanship or in strict adherence to all details and
characteristics furnished by Licensor, Licensor shall notify Licensee thereof in
writing and Licensee shall promptly repair or change such Licensed Product to
conform thereto. If a Licensed Product as repaired or changed does not strictly
conform after Licensor's request and such strict conformity cannot be obtained
after at least one (1) resubmission, the Trademark shall be promptly removed
from the item, at the option of Licensor, in which event the item may be sold by
Licensee, provided such miscut or damaged item does not contain any labels or
other identification bearing the Trademark without Licensor's prior approval.
Notwithstanding anything in this paragraph 8.4 to the contrary, sales of all
products of Licensor's design whether or not bearing the Trademark, shall
nonetheless be subject to royalty payments pursuant to Article 5 hereof.
Licensor may purchase at Licensee's expense any Licensed Products found in the
marketplace which, in Licensor's judgment, are inconsistent with approved
quality standards and xxxx such costs to Licensee. Licensee must pay
all royalties due on sales of nonconforming goods. Licensor may require Licensee
to recall any Licensed Products not consistent with approved quality standards.
Licensee shall use its best efforts to comply.
8.5 Approvals. All approvals required or permitted by this Agreement
must be in writing from Licensor to Licensee. All matters requiring approval of
Licensor or the exercise of its discretion shall be at the sole subjective
discretion of Licensor. A submission for approval shall be deemed disapproved
unless Licensor delivers a notice of approval within ten (10) business days from
date stamped receipt at Licensor's office. Licensor will make reasonable efforts
to provide a timely response. Licensor shall provide an explanation for
disapprovals. Licensor has no obligation to approve, review or consider any item
which does not strictly comply with the required submission procedures provided
that Licensor designates the procedure which was not followed. Approval by
Licensor shall not be construed as a determination that the approved matter
complies with all applicable regulations and laws. No disapproved item shall be
manufactured, sold, used, distributed or advertised. Licensee may revise any
disapproved item and resubmit it. Licensee must strictly comply with all of
Licensor's decisions. The parties will adjust the approval forms as appropriate.
Upon reasonable notice, Licensor may withdraw approval of any previously
approved item. In the event that it is reasonably necessary for Licensor to do
on-site developments and approvals, Licensee will pay any and all expenses and
airfare incurred by Licensor with respect to such on-site developments and
approvals.
8.6 Approval Withdrawal. If the style, appearance or quality of any
Licensed Product ceases to be acceptable to Licensor, Licensor shall have the
right in the exercise of its sole discretion to withdraw its approval of such
Licensed Product. In the event that a style of Licensed Product comprises twenty
(20%) percent or more of a "category", Licensor may only withdraw approval of
such Licensed Product in the reasonable exercise of its discretion. For the
purposes hereof, a "category" shall mean (a) dress shoes; (b) casual shoes; or
(c) athletic shoes. Upon receipt of written notice from Licensor of its election
to withdraw such approval, Licensee shall immediately cease the use of the
Trademark in connection with the promotion, advertising, sale, manufacture,
distribution or use of such Licensed Product(s). Notice of such election by
Licensor to withdraw approval shall not relieve Licensee from its obligation to
pay royalties on sales of such Licensed Product(s) made by Licensee to the date
of disapproval or thereafter as permitted. Licensee may, however, complete work
in process and utilize materials on hand provided that it submits proof of such
work in progress and fabric inventory to Licensor.
8.7 Samples and Artwork. Licensor shall, at least four (4) times
during each Annual Period, make available to Licensee certain samples, designs,
colors, fabric samples, tags, labels, packaging and artwork available to
Licensor, and the cost of providing such materials shall be borne by Licensee at
the cost incurred by Licensor to provide the same. All right, title and interest
in and to samples, sketches, designs, and other materials furnished by or to
Licensee or submitted by or to Licensor whether created by Licensor or Licensee
in connection with such Licensed Product, including any modifications
or improvements thereof which may be created by Licensor or
Licensee, are hereby assigned to and shall be the sole property of Licensor as
between Licensee and Licensor, and are licensed hereunder solely and exclusively
for use in connection with the manufacture and sale of Licensed Products in the
Territory. Licensor may use and permit others to use said designs and other
materials in any manner it desires, provided that such use does not conflict
with any rights granted Licensee hereunder. Licensee specifically acknowledges
that such designs and other materials may be used by Licensor and other
licensees on Licensed Products in jurisdictions outside the Territory and on
products other than Licensed Products anywhere in the world. In addition to the
foregoing, for marketing purposes, Licensor shall, upon reasonable request, make
available to Licensee such of the following which are available to Licensor: (a)
reports on marketing policy of Licensor; (b) reports on color, style and fabric
trends; (c) samples of advertising materials; (d) display ideas; (e) labels,
hangtags and packaging.
8.8 Confidentiality. Licensee acknowledges that it will receive from
Licensor prints, designs, ideas, sketches, and other materials or Trade Secrets
which Licensor intends to use on or in connection with lines of merchandise
other than the Licensed Products and which have not as yet found their way into
the channels of distribution. The parties recognize that these materials are
valuable property of Licensor. Licensee acknowledges the need to preserve the
confidentiality and secrecy of these materials and agrees to take all necessary
steps to ensure that use by it, or by its contractors will in all respects
preserve such confidentiality and secrecy. Licensee shall take all reasonable
precautions to protect the secrecy of the materials, samples, and designs
described in this Article 8 prior to their commercial distribution or the
showing of samples for sale, and shall not sell any merchandise employing or
adapted from any of said designs except under the Trademark. Licensor shall take
all reasonable precautions to protect the secrecy of the original designs
created by Licensee for Licensed Products prior to their advertisement,
commercial distribution or the showing of samples for sale. Neither Licensor nor
Licensee shall, 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 other.
8.9 Manufacture of Licensed Products by Third Parties.
(a) For purposes of this Agreement a "Third Party
Manufacturer" shall be defined as an entity or an individual which or whom
Licensee either hires or pays to manufacture the Licensed Products. A
"subcontractor" shall be defined as an entity or an individual which or whom a
Third Party Manufacturer either hires or pays to perform the manufacturing tasks
which the Third Party Manufacturer could otherwise perform itself at its own
facility or through its own employees and staff. A "supplier" shall be defined
as an individual or entity who produces components for the Licensed Products,
and provides such components to manufacturer in order to assemble the finished
Licensed Products. Examples of a supplier include, but are not limited to,
fabric/trim manufacturers, yarn manufacturers, button manufacturers, or zipper
manufacturers, provided that such named manufacturers do not
contribute further to the manufacture of the finished Licensed Products.
(b) Attached hereto as Exhibit H is Licensor's Supplier Code
of Conduct (the "Code") which applies to any entity manufacturing merchandise
under the Xxxxx Xxxxxxxx(R) label (including the components thereof). Licensee
shall ensure that Licensee and all Third Party Manufacturers, subcontractors and
suppliers shall comply with the terms of the Code and shall evidence such
compliance by, (1) upon execution of this Agreement, Licensee executing the Code
and having all Third Party Manufacturers, subcontractors and suppliers execute
the Code in the form as attached or such other form as may be provided by
Licensor from time to time, and returning such document to Licensor, and (2)
publicly displaying and having all Third Party Manufacturers, subcontractors and
suppliers display the Code, in the most current form provided by Licensor, in a
clearly visible location in Licensee's manufacturing facilities (if applicable)
and in the manufacturing facilities of Licensee's Third Party Manufacturers,
subcontractors and suppliers, at all times during the Term of this Agreement.
(c) Licensee acknowledges that it has in effect (or will
promptly develop), to the satisfaction of Licensor, a program of monitoring
manufacturing facilities whether operated by Licensee, by Third Party
Manufacturers, subcontractors and suppliers which is sufficient to ensure their
substantial compliance with the Code and all applicable state, local and foreign
laws and regulations pertaining to wages, overtime compensation, benefits,
hours, hiring and employment, workplace conditions and safety, the environment,
collective bargaining, freedom of association and that their products or and the
components thereof are made without the use of child (persons under the age of
15 or younger than the age for completing compulsory education, if that age is
higher than 15), prison, indentured, exploited bonded, forced or slave labor.
Such compliance shall be evidenced by Licensee, upon execution of this
Agreement, executing and abide by the Certification in the form as attached
hereto as Exhibit G, and executing and abiding by any such other form as may be
provided by Licensor from time to time.
(d) Within thirty (30) days after establishing a new
arrangement with a Third Party Manufacturer or subcontractor, Licensee shall
inspect each Third Party Manufacturer or subcontractor and provide approval, in
writing, signed by an authorized employee or agent of Licensee that such Third
Party Manufacturer or subcontractor is in compliance with Paragraph 8.9(c)
above, and shall obtain and provide to Licensor the signature of an authorized
representative from each of such parties on a Third Party Manufacturing
Agreement in the form as Exhibit D attached hereto, or such other form as may be
provided by Licensor from time to time. Within thirty (30) days after
establishing a new arrangement with a supplier, Licensee shall obtain and
provide to Licensor the signature of an authorized representative from each
supplier on a Certification in the form as Exhibit G attached hereto, or such
other form as may be provided by Licensor from time to time. In the event
Licensee has knowledge of, has reason to believe, or should have reason to know
that any Third Party Manufacturer, subcontractor or supplier is in breach of the
Third Party Manufacturing Agreement or Certification, as the case may be,
Licensee shall immediately notify Licensor and Licensee shall, at its sole
expense, take immediate action to rectify such breach,
including, where Licensor deems it necessary, immediate termination of its
relationship with such Third Party Manufacturer, subcontractor or supplier. If
Licensee fails to take immediate action or such action is not successful,
Licensee shall assign its rights to proceed against such Third Party
Manufacturer, subcontractor or supplier to Licensor and Licensor shall, at
Licensee's expense, have the right to pursue all available remedies to protect
its rights. Notwithstanding the foregoing, Licensee acknowledges that it shall
remain primarily liable and completely obligated under all of the provisions of
this Agreement in respect of the production of Licensed Products hereunder. In
the event that either Licensee or Licensor obtains information in the form of
reports of employees or agents of either party, indicating that any Third Party
Manufacturer, subcontractor or supplier may be in breach of the Third Party
Manufacturing Agreement or Certification, it will upon request of the other
party provide copies of any such reports.
(e) In order to maintain Licensor's high standard of quality
control and to insure that appropriate measures are taken against
counterfeiting, Licensee shall provide notice to Licensor, on a quarterly basis,
including all of the following information: (i) the name and address of each
Third Party Manufacturer, subcontractor and supplier; (ii) the type of Licensed
Products manufactured by such Third Party Manufacturer and subcontractor; (iii)
quantity of Licensed Products to be manufactured by each such entity; (iv) the
type of components provided by each supplier; and (iv) any other relevant
information regarding all such entities.
(f) Licensee shall ensure that all merchandise manufactured
hereunder shall be manufactured in compliance with all federal, state and local
laws which pertain to the manufacture of clothing, apparel, and other
merchandise including the Flammable Fabrics Act, as amended, and regulations
thereunder and Licensee guarantees, that with regard to all products, fabrics or
related materials used in the manufacture of Licensed Products, for which
flammability standards have been issued, amended or continued in effect under
the Flammable Fabrics Act, as amended, reasonable and representative tests, as
prescribed by the Consumer Product Safety Commission, have been performed which
show that Licensed Products at the time of their shipment or delivery conform to
the above-referenced flammability standards as are applicable.
(g) All Licensed Products manufactured in the United States
(whether by Licensee, by Licensee's manufacturer or by manufacturers'
contractors) shall be in compliance with all applicable requirements of Sections
6, 7, and 12 of the Fair Labor Standards Act, as amended, and all regulations
and orders of the United States Department of Labor under Section 14 thereof,
and applicable state and local laws pertaining to child labor, minimum wage and
overtime compensation; and, all Licensed Products manufactured outside the
United States, (whether by Licensee, by Licensee's manufacturer or by
manufacturers' contractors) shall be manufactured in compliance with the wage,
overtime compensation, benefits, hour, hiring and employment, workplace
conditions and safety, environmental, collective bargaining, freedom of
association laws of the country of manufacture and without the use of child
(persons under the age of fifteen or younger than the age for completing
compulsory education, if that age is higher than 15), prison,
indentured, exploited bonded, forced or slave labor.
(h) Licensee will require that all commercial invoices (bills
of lading) which accompany all Licensed Products must include the following
language (either preprinted or "stamped"):
"We hereby certify that the merchandise (including components
thereof) covered by this shipment was manufactured in compliance
with the Xxxxx Xxxxxxxx Supplier Code of Conduct and: (1) if the
merchandise was manufactured in the United States, it was
manufactured in compliance with (a) sections 6, 7, and 12 of the
Fair Labor Standards Act, as amended and all regulations and orders
of the United States Department of Labor under section 14 thereof,
and (b) state and local laws pertaining to child labor, minimum wage
and overtime compensation; or (2) if the merchandise was
manufactured outside the United States, it was manufactured in
compliance with the wage and hour laws of the country of manufacture
and without the use of child (persons under the age of 15 or younger
than the age for completing compulsory education, if that age is
higher than 15), prison, indentured, exploited bonded, forced or
slave labor. We further certify that we have in effect a program of
monitoring our subcontractors and suppliers and other designated
contract facilities which manufacture Xxxxx Xxxxxxxx(R) brand
merchandise for compliance with the foregoing. We also certify that
the merchandise is in compliance with all laws governing the
designation of country of origin and, if applicable, is being
shipped under legally issued and valid export license or visa."
(i) Licensee shall not utilize or permit any Third Party
Manufacturer, subcontractors or suppliers to utilize in the manufacture or
treatment of any Licensed Products (including the components thereof)
manufactured hereunder any Azo dyes that can be split into any of the following
amines:
CAS # CAS #
4-Aminobiphenlyl 92-67-1 3,3'-Dimethoxybenzidine 119-90-4
Benzidine 92-87-5 3,3'-Dimethylbenzadine 119-93-7
4-Chloro-o-toluidine 95-69-2 3,3'-Dimethyl- 838-88-0
2-Naphthylamin 91-59-8 4,4'diaminodiphenylmethane
o-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
2-amino-4-nitrotoluol 99-55-8 4,4'Methaylen-bis-(2-chloranilin)101-14-4
p-Chloroaniline 106-47-8 4,4'Oxydianiline 101-80-4
2,4-Diaminoanisole 615-05-4 4,4'Thiodianiline 139-65-1
4,4'-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
3,3'-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
Aminoanabenzane 2,4,5-Trimethylaniline 137-17-7
o-Anisidine
(j) Licensee's use or any of Licensee' Third Party
Manufacturers, subcontractors or suppliers use of the following chemicals in
connection with the manufacturer or treatment of any of the Licensed Products
(including the components thereof) manufactured hereunder, shall be in
accordance with the following standards or such other standards Licensor may
designate from time to time:
(i) Formaldehyde: Must be less than 300 p.p.m. when
tested in by the Acetylacetone method in
accordance with Japanese law 112.
(ii) Pentachlorophenol (Pesticides): Must be less
than 5 p.p.m.
and; (iii) Nickel: In the event any metal parts of a
garment or other merchandise coming into contact
with the skin, contain nickel in excess of 0.5
micrograms per square centimeter/week, Licensor
must be so notified and special warning labels
need to be attached to the garment.
8.10 Compliance with Applicable Laws. All Licensed Products
manufactured, distributed or sold by, or on behalf of, Licensee shall be marked,
labeled, packaged, advertised, distributed and sold in accordance with this
Agreement, in accordance with all applicable laws, rules and regulations in the
Territory, and in such a manner as will not tend to mislead or deceive the
public. At the request of Licensor, Licensee shall cause to be placed on all
Licensed Products appropriate notice designating Licensor as the trademark,
copyright or design patent owner thereof, as the case may be. The manner of
presentation of said notice shall be determined by Licensor.
8.11 Inspection of Facilities. Licensee shall regularly, and not
less than two (2) times per year, inspect the facilities it utilizes and those
facilities utilized by Third Parties for compliance with Paragraph 8.9 and shall
take all action necessary to cure any deficiencies. Licensee further agrees that
it shall terminate any agreement with any third party found to be in default of
the terms of this provision on three (3) separate inspections. Licensor and its
duly authorized representatives shall have the right, during normal business
hours and upon reasonable notice, to inspect all facilities utilized by
Licensee, Licensee's third party manufacturers, and such third party
manufacturers' contractors and suppliers in connection with the manufacture,
sale, storage or distribution of Licensed Products, and to examine (i) the
Licensed Products at all stages manufacture; (ii) the manufacturing facility,
residential facilities (if any) and any manufacturing and/or residential
facility; (iii) the books and records relating to employee wages, employee
timecards, evidence of employee age, shipping documents, cutting reports and
other documentation relating to the manufacture and shipment of the Licensed
Products; and (iii) the books and records relating to the use of chemicals and
dyestuffs in the fabrics, trims, garments and other components of the Licensed
Products manufactured hereunder.
8.12 Rules and Regulations. To the extent permitted by applicable
law, Licensor may, from time to time, promulgate rules and regulations to
Licensee relating to the manner of use of the Trademark. Licensee shall comply
with all such rules and regulations.
8.13 Disposal of Seconds and Close-Outs.
(a) Seconds. Licensee shall only sell Licensed Products which
are Seconds in a way which shall not reduce the value of the Trademark or
detract from its reputation and shall obtain the express prior written consent
of Licensor with respect to the terms and method of such disposal. All Seconds
approved for sale by Licensor shall be clearly marked "Seconds" or "Irregular".
The Net Sales of Seconds of any of the Licensed Products which may be disposed
of pursuant to this Paragraph 8.13(a) shall not, in any event, exceed five (5%)
percent of the Net Sales of Licensed Products distributed or sold by Licensee in
any Annual Period.
(b) Close-Outs. All Close-Outs, shall be sold only with
Licensor's prior written approval, which Licensor may withhold in its sole
discretion, through retail outlets and traditional and accepted dealers in such
merchandise and upon such terms and conditions as Licensee, in its reasonable
discretion, determines appropriate and shall not be sold to any person which
Licensee knows, or has reason to know, will export such Close-Outs from the
Territory. The Net Sales of Close-Outs of any of the Licensed Products which may
be disposed of pursuant to this Paragraph 8.13(b) shall not, in any event,
exceed fifteen (15%) percent of the Net Sales of Licensed Products distributed
or sold by Licensee.
8.14 Assistance By Licensor. Licensee shall have the right to cause
its personnel to reasonably visit Licensor's offices, factories, showroom, and
other places of business, and also to attend Licensor's sales meetings in order
to obtain additional know-how and assistance. The scheduling of such visits
shall be at times mutually convenient to the parties hereto. In connection with
such visits, Licensee shall bear all airfare to and from, and subsistence
expenses of Licensee's representatives. In the event Licensee requests Xx. Xxxxx
Xxxxxxxx or any other member(s) of Licensor's staff to make a personal
appearance, to attend any function, to visit Licensee's manufacturing plants or
facilities or to attend any design meetings, Licensee shall pay all of the
reasonable expenses in connection therewith, including air travel and hotel
accommodations, and other reasonable services of Licensor's choosing. Licensee
shall reimburse Licensor for all reasonable expenses so incurred by Licensor. On
at least two (2) months notice, Licensor shall have Xx. Xxxxx Xxxxxxxx appear at
Licensee's launch party. At Xx. Xxxxx Xxxxxxxx'x personal appearances for other
licensed products, Licensor shall make reasonable efforts to have the Licensed
Products visually enhanced.
8.15 Meetings. Licensor may from time to time but no more than twice
a year hold a meeting of Licensor's Licensees/Distributors. Licensee agrees upon
receipt of reasonable notice to attend any such meeting(s) at its own expense.
8.16 Design Rights. Licensee acknowledges and agrees that Licensor
owns or shall own all design rights, regardless of whether such designs were
created by Licensor or by or on behalf of Licensee. Licensee agrees to make,
procure and execute all assignments necessary to vest ownership of design rights
in Licensor. Licensee shall place appropriate notices, reflecting ownership of
design rights by Licensor, on all the Licensed Products, packaging, tags, labels
and advertising and promotional materials. Licensee shall not do or allow to be
done anything which may adversely affect any of Licensor's design rights. All
designs used by Licensee for the Licensed Products shall be used exclusively for
the Licensed Products and may not be used under any other trademark or private
label without the prior written consent of Licensor. Licensee shall disclose and
freely make available to Licensor any and all developments or improvements it
may make relating to the Licensed Products and to their manufacture, promotion
and sales, including, without limitation, developments and improvements in any
machine, process or product design, that may be disclosed or suggested by
Licensor or regarding any patent or trademark which Licensee is entitled to
utilize.
8.17 Pricing. Licensee acknowledges that in order to preserve the
goodwill attached to the Trademark, the Licensed Products should be sold at
prices and terms reflecting the prestigious nature of the Trademark, it being
understood, however, that Licensor is not empowered to fix or regulate the
prices for which the Licensed Products are to be sold, either at the wholesale
or retail level.
8.18 Cost of Designs. Licensor will only be responsible for its
ordinary pre-adoption costs associated with the preparation and submission of
designs by Licensor to Licensee of inspirational sketches or prototypes only.
Licensee shall pay for all other pre and post-adoption design costs for
Licensor's designs and all design costs for Licensee's designs, as well as all
extraordinary costs such as expedited shipping charges associated with the
delivery of the designs.
8.19 Morals. Xx. Xxxxx Xxxxxxxx'x conduct shall be with due
regard to public conventions and morals, and Xx. Xxxxx Xxxxxxxx has not done
and shall not do or commit any act that will degrade him before a substantial
portion of society or bring him into public hatred. If Xx. Xxxxx Xxxxxxxx
shall materially breach this provision, Licensee may terminate this License
on six (6) months written notice to Licensor.
ARTICLE 9. THE TRADEMARK
9.1 Rights to the Trademark. Licensee acknowledges the great value
of the goodwill associated with the Trademark, and acknowledges that the
Trademark and all the rights therein, and goodwill attached thereto, belong
exclusively to Licensor. Licensee will not, at any time, do, or otherwise suffer
to be done any act or thing which may, in any way, adversely affect any rights
of Licensor in and to the Trademark or any registrations thereof or which,
directly or indirectly, may reduce the value of the Trademark or detract
from its reputation. Nothing contained in this Agreement shall be
construed as an assignment or grant to Licensee of any right, title or interest
in or to the Trademark, or any of Licensor's other trademarks, it being
understood that all rights relating thereto are reserved by Licensor, except for
the License hereunder to Licensee of the right to use and utilize the Trademark
only as specifically and expressly provided herein. Licensee shall not file or
prosecute a trademark or service xxxx application or applications to register
the Trademark in respect of the Licensed Products or any other goods or
services. Licensee shall not, during the term of this Agreement or thereafter,
(a) attack Licensor's title or right in and to the Trademark in any jurisdiction
or attack the validity of this License or the Trademark or (b) contest the fact
that Licensee's rights under this Agreement (i) are solely those of a
manufacturer and distributor and, (ii) subject to the provisions of Article 11
hereof, cease upon termination of this Agreement. The provisions of this
paragraph 9.1 shall survive the termination of this Agreement.
9.2 Protecting the Trademark. Licensee shall cooperate fully and in
good faith with Licensor for the purpose of securing, preserving and protecting
Licensor's rights in and to the Trademark. At the request of Licensor, Licensee
shall execute and deliver to Licensor any and all documents and do all other
acts and things which Licensor deems necessary or appropriate to make fully
effective or to implement the provisions of this Agreement relating to the
ownership or registration of the Trademark.
9.3 Compliance with Legal Requirements. Licensee will use the
Trademark in the Territory strictly in compliance with the legal requirements
therein. Whenever any Trademark is used on any item of packaging or labeling or
in any advertisement, it must be followed, in the case of a registered trademark
by the registration symbol, i.e., R, and in the case of all other trademarks by
the symbol TM, or other appropriate symbols of similar import acceptable to
Licensor. Licensee shall duly display all other notices with respect to the
Trademark, on the Licensed Products and otherwise, as are or may be required by
the trademark laws and regulations applicable within the Territory. Upon
expiration or termination of this Agreement for any reason whatsoever, Licensee
will execute and deliver to Licensor any and all documents required by Licensor
terminating any and all trademark registrations, Registered User agreements and
other documents regarding this Trademark.
9.4 Ownership of Copyright. Any copyright which may be created in
any sketch, design, print, package, label, tag or the like designed or approved
or used with the Trademark by Licensor will be the property of Licensor.
Licensee will not, at any time, do, or otherwise suffer to be done, any act or
thing which may adversely affect any rights of Licensor in such sketches,
designs, prints, packages, labels, tags and the like and will, at Licensor's
request, do all things reasonably required by Licensor to preserve and protect
said rights.
9.5 Notice of Infringement. Licensee shall notify Licensor in
writing of any infringement or imitation of the Trademark or the use by any
person of any trademarks or tradenames confusingly similar to the Trademark
promptly as same may come to the attention of Licensee. Licensor will
thereupon
take such action as it deems advisable for the protection of the
Trademark and its rights therein, and Licensee shall assist Licensor in the
prosecution of any such suit, as Licensor may reasonably request, at Licensor's
expense. In no event, however, will Licensor be required to take any action if
it deems it inadvisable to do so and Licensee will have no right to take any
action with respect to the Trademark without the prior written consent of
Licensor. In the event a third party infringes the use of the Trademark in the
Territory on items similar to the Licensed Products, Licensor shall take all
advisable and necessary measures to protect the Trademark and Licensee agrees
that, at Licensor's request, it will pay the reasonable costs incurred therefor,
including judicial expenses and legal fees.
9.6 Counterfeit Protection. Licensee shall use its best efforts to
prevent counterfeiting. All Licensed Products shall bear and use any reasonable
counterfeit preventive system, devices or labels designated by Licensor. At its
option, Licensor may supply the system, devices or labels (provided that they
are supplied on a timely basis), which Licensee must use and for which Licensee
shall pay all reasonable costs in advance.
9.7 Use of Other Trademarks. At all times while this Agreement is in
effect, neither Licensee, nor any company affiliated with Licensee, owned or
controlled by Licensee, under common ownership with or having common
stockholders as Licensee, in which the owner of Licensee is a partner, or in
which Licensee is a partner, shall act as a licensee or distributor in the
Territory of any products included in Paragraph 1.10 under any name directly
competitive with Licensor without the prior written approval of Licensor.
Nothing herein is to be construed so as to prohibit Licensee from acting as a
manufacturer only of such products under a name competitive with Licensor,
providing that Licensee shall not be the licensee or distributor thereof. The
design and style of any such products or any of Licensee's private label
products, must be clearly distinguished from the Licensed Products. If such
consent is given, unless prohibited by other agreements, Licensee shall provide
Licensor with samples of any other products, lines or collections it
manufactures or has manufactured for it or distributed for it which do not bear
the Trademarks. A breach of this clause shall constitute a violation of
Licensee's obligation to use its best efforts to exploit this license. The
design, merchandising, packaging, sales and display of all of Licensee's
non-licensed products shall be separate and distinct from the Licensed Products.
Licensee shall maintain a separate area for exhibition of the Licensed Products
wherever the Licensed Products are sold.
9.8 Use of Trademark on Invoices, etc. The use of the Trademark by
Licensee on invoices, order forms, stationery and related materials in
advertising in telephone or other directory listings is permitted only upon
Licensor's prior written approval of the format in which the Trademark is to be
so used, the juxtaposition of the Trademark with other words and phrases, and
the content of the copy prior to the initial such use of the Trademark and prior
to any material change therein; provided, however, that each such use of the
Trademark is only in conjunction with the manufacture, sale, distribution or
advertisement of Licensed Products pursuant to this Agreement.
9.9 Monitoring. Licensee shall actively monitor use of the Trademark
by Licensee and its customers and shall use its best efforts to see that such
use does not impair the image or reputation heretofore or hereafter established
by Licensor for products bearing the Trademark; provided, however, that the
Licensee shall have no obligation to place any unlawful restriction on its
customers.
ARTICLE 10. INSOLVENCY
10.1 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 to the extent that the same
may be recoverable.
10.2 Rights, Personal. The license and rights granted hereunder are
personal to Licensee. No assignee for the benefit of creditors, receiver,
trustee in bankruptcy, sheriff or any other officer or court charged with taking
over custody of Licensee's assets or business, shall have any right to continue
performance of this Agreement or to exploit or in any way use the Trademark if
this Agreement is terminated pursuant to Paragraphs 11.1 and 11.2, except as may
be required by law.
10.3 Trustee in Bankruptcy. Notwithstanding the provisions of
Paragraph 10.2 above, in the event that, pursuant to the applicable bankruptcy
law (the "Code"), a trustee in bankruptcy, receiver or other comparable person,
of Licensee, or Licensee, as 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
Licensee, as the case may be, shall notify Licensor of same in writing. 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 shall be deemed to constitute an offer to
Licensor 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 aforesaid offer may be accepted by Licensor only by written
notice given to the trustee or Licensee, as the case may be, within fifteen (15)
days after Licensor's receipt of the notice to such party. If Licensor fails to
deliver such notice within the said fifteen (15) days, such party 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 shall be deemed to preclude or
impair any rights which Licensor may have as a creditor in any bankruptcy
proceeding.
ARTICLE 11. TERMINATION
11.1 Other Rights Unaffected. It is understood and agreed that
termination by Licensor on any ground shall be without prejudice to any other
remedies which Licensor may have.
11.2 Termination Without Notice. If any of the following grounds for
termination shall occur, this Agreement shall thereupon forthwith terminate and
come to an end without any need for notice from Licensor:
(a) If Licensee shall make an unauthorized disclosure of
confidential information, Trade Secrets, or materials given or loaned to
Licensee by Licensor;
(b) If Licensee institutes proceedings seeking relief under a
bankruptcy act or any similar law, or otherwise violates the provisions of
paragraph 10.1 thereof;
(c) If Licensee transfers or agrees to transfer substantially
all of its property, its shares of stock or, this Agreement in violation of
Article 17 thereof;
(d) If Licensee shall sell unapproved merchandise in
violation of paragraph 8.3 hereof;
(e) If Licensee shall, without the prior written consent of
Licensor, use the Trademark in an unauthorized or improper manner;
(f) If Licensee shall use the Trademark in connection with
another trademark or name; and/or
(g) If Licensee shall place or participate in any
advertising prohibited by Article 7.
11.3 Termination With Notice. If Licensee breaches any of its
obligations under this Agreement, other than those specified in Paragraph 11.2
above, Licensor may terminate this Agreement by giving Notice of Termination to
Licensee. Termination will become effective automatically unless Licensee
completely cures the breach within fifteen (15) days of the giving of such
Notice. Termination based upon Licensee's failure to comply with the Minimum
Sales Levels set forth in Paragraph 4.2 shall become effective thirty (30) days
after the giving of the Notice. If the notice relates to royalties or to product
quality, pending cure Licensee shall ship no Licensed Products; if Licensee does
ship, it shall automatically forfeit its right to cure and the License shall be
terminated. Upon the giving of a Notice of Termination for the second time, for
any reason, Licensee shall no longer have the right to cure any violation, and
termination shall be effective upon the giving of the Notice.
11.4 Effect of Termination. On the termination of this
Agreement for any reason whatsoever: all of the rights of Licensee under
this Agreement
shall forthwith terminate and immediately revert to Licensor; all royalties on
sales theretofore made shall become immediately due and payable; Licensee shall
forthwith discontinue all use of the Trademark, except that Licensee may have a
period of ninety (90) days after such termination to consummate all sales of
Licensed Products which were firm upon the delivery of the Inventory Schedule in
accordance with Paragraph 11.5 hereof and to sell the balance of the Inventory
not purchased by Licensor, and royalties with respect thereto shall be due on
such ninetieth day. Licensor shall have the right to conduct a physical
inventory of the Licensed Products in Licensee's possession or control. Licensee
will completely remove the Trademark from Licensed Products and destroy all
hangtags and labeling attached to such Licensed Products. Licensee shall, at
Licensee's expense, either return to Licensor all remaining Inventory after such
ninetieth (90th) day or destroy all remaining Inventory under the supervision of
Licensor. Licensee shall no longer use the Trademark, any variation, imitation
or simulation thereof, or any Trademark similar thereto; Licensee will promptly
transfer to Licensor, free of charge, all registrations, filings and rights with
regard to the Trademark which it may have possessed at any time; and Licensee
shall thereupon deliver to Licensor, free of charge, all sketches, designs,
colors and the like in its possession or control, designed or approved by
Licensor, and all Labels supplied by Licensor in Licensee's possession or
control. Licensor shall have the option, exercisable upon notice to Licensee
within thirty (30) days of termination, to negotiate the purchase of the Labels
which have not been supplied by Licensor. If such negotiations do not result in
the purchase of the Labels not supplied by Licensor, Licensee shall destroy the
Labels under the supervision of Licensor, and Licensee, shall supply to Licensor
a certificate of destruction thereof signed by a duly authorized officer of
Licensee.
11.5 Inventory Upon Termination. Within twenty (20) days of the
termination of this Agreement for any reason whatsoever, Licensee shall deliver
to Licensor an Inventory Schedule. The Inventory Schedule shall be prepared as
of the close of business on the date of such termination and shall reflect
direct cost of each such item (not including overhead or any general or
administrative expenses). Licensor thereupon shall have the option, exercisable
by notice in writing delivered to Licensee within thirty (30) days after its
receipt of the complete Inventory Schedule, to purchase any or all of the
Inventory for an amount equal to the Licensee's standard cost (the actual
manufacturing cost). In the event such notice is sent by Licensor, Licensor may
collect the Inventory referred to therein within ninety (90) days after
Licensor's said notice. Licensor will pay such Licensee for such Inventory upon
such collection. In the event such notice is not sent, Licensee may dispose of
the Licensed Products within ninety (90) days of the date of termination;
provided, however, that any advertising used during such period shall be subject
to Licensor's prior written approval and such disposition of the Licensed
Products shall be subject to Licensee's obligations hereunder, including, but
not limited to payments to be made to Licensor. At the end of such ninety (90)
day period, any Licensed Products remaining in Licensee's possession shall, at
the request of Licensor, be destroyed.
11.6 Freedom to License. In the event of termination of this
Agreement or the receipt by Licensor of a notice of termination from
Licensee,
Licensor shall be free to license to others the use of the Trademark
in connection with the manufacture and sale of Licensed Products in the
Territory, but only if the sale of such Licensed Products in the Territory
produced pursuant to such third party agreement is prohibited until after the
termination of this Agreement.
11.7 Equitable Relief. Licensor and Licensee shall be entitled to
equitable relief by way of temporary and permanent injunction and such other and
further relief as any court with jurisdiction may deem just and proper.
ARTICLE 12. RELATIONSHIP BETWEEN THE PARTIES
12.1 No Agency. Licensee shall not represent itself as the agent or
legal representative of Licensor, Licensor's affiliates or Xxxxx Xxxxxxxx for
any purpose whatsoever and shall have no right to create or assume any
obligation of any kind, express or implied, for or on behalf of them in any way
whatsoever. Licensor shall similarly not represent itself as the agent or legal
representative of Licensee.
ARTICLE 13. INTENTIONALLY OMITTED
ARTICLE 14. BENEFIT
14.1 Benefit. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and, subject to Article 17 hereof, their
successors and assigns.
ARTICLE 15. ENTIRE AGREEMENT; AMENDMENT
15.1 Entire Agreement; Amendment. 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.
ARTICLE 16. NON-WAIVER
16.1 Non-Waiver. 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, shall in no way operate as
a waiver thereof, nor shall any single or partial exercise preclude any other
right or option herein; and no waiver whatsoever shall be valid unless in
writing, signed by the waiving party, and only to the extent herein set forth.
ARTICLE 17. ASSIGNMENT
17.1 No Assignment Without Consent. The license and rights
granted to Licensee hereunder are personal in nature, and Licensee may not
and shall not
sell, transfer, lease, sublicense or assign this Agreement or its
rights and interest hereunder, or any part hereof, by operation of law or
otherwise, without the prior written consent of Licensor, which consent may be
withheld by Licensor in its sole and absolute discretion, except that Licensee
shall have the right, upon written notice to Licensor, to assign this Agreement
to a corporation, subsidiary or affiliate under the same direction and control
as Licensee; provided, however, that in such event Licensee agrees to guarantee
the performance and obligations of such corporation, subsidiary or affiliate
under this Agreement.
17.2 Sale of Assets. A sale or other transfer of all or
substantially all of the assets of Licensee or a change in the control of
Licensee other than as permitted under Paragraph 17.1 shall be deemed an
assignment of Licensee's rights and interests under this Agreement to which the
terms and conditions of Paragraph 17.1 of this Agreement shall apply.
17.3 Sale of Stock/Interest. Any transfer, by operation of law or
otherwise, of Licensee's interest in this Agreement (in whole or in part), a
fifty (50%) percent or greater interest in one or in a series of transactions in
Licensee (whether stock, partnership, interest or otherwise) or any interest
directly or indirectly to a competitor of Licensor shall be deemed an assignment
of Licensee's rights and interest under this Agreement to which the terms and
conditions of Paragraph 17.1 of this Agreement shall apply. The issuance of
shares of stock to other than the existing shareholders is deemed to be a
transfer of that stock for the purposes of this paragraph. If there has been a
previous transfer of less than a fifty (50%) percent interest in Licensee, then
any other transfer of an interest in Licensee which when added to the total
percentage previously transferred totals a transfer of greater than fifty (50%)
percent interest of Licensee, shall be deemed an assignment of Licensee's
interest in this Agreement within the meaning of this Paragraph to which the
terms and conditions of Paragraph 20.1 shall apply.
17.4 Assignment by Licensor. Licensor shall have a complete and
unrestricted right to sell, transfer, lease or assign its rights and interests
in this Agreement to any domestic or foreign corporation or other business
entity, providing that such transferee agrees to be bound by all of the terms
hereof and is the holder of the Trademark in the Territory. When Licensor wishes
to sell, transfer, lease or assign its rights and interests in this Agreement,
Licensor shall do so on notice to Licensee.
ARTICLE 18. INDEMNIFICATION AND INSURANCE
18.1 Indemnification by Licensee. Licensee does hereby indemnify and
hold harmless Licensor, Xxxxx Xxxxxxxx, and their directors, officers,
employees, agents, officials and related companies from and against any and all
losses, liability, damages and expenses (including reasonable attorneys' fees
and expenses) which they or any of them may incur or be obligated to pay in any
action, claim or proceeding against them or any of them, for or by reason of any
acts, whether of omission or commission, that may be committed or suffered by
Licensee or any of their servants, agents or employees in connection
with Licensee's performance of this Agreement, including but not limited to:
18.1.1. any alleged defect in any Licensed Product,
regardless of whether the action is based upon negligence or strict
liability, and regardless of whether the alleged negligence of Licensor is
characterized as "passive" or "active";
18.1.2. the manufacture, labelling, sale, distribution
or advertisement of any Licensed Product by Licensee;
18.1.3. any violation of any warranty, representation
or agreement made by Licensee pertaining to a Licensed Product;
18.1.4. the claim of any broker, finder or agent in
connection with the making of this Agreement or any transactions contemplated
by this Agreement.
The provisions of this paragraph and Licensee's obligations hereunder shall
survive any termination or rescission of this Agreement.
18.2 Notice of Suit or Claim. Licensee shall promptly inform
Licensor by written notice of any suit or claim against Licensee relating to
Licensee's performance under this Agreement, whether such suit or claim is for
personal injury, involves alleged defects in the Licensed Products manufactured,
sold or distributed hereunder, or otherwise.
18.3 Indemnification by Licensor. Licensor does hereby indemnify and
hold harmless Licensee, against any and all liabilities, damages and expense
(including reasonable attorneys' fees, costs and expenses) which Licensee may
incur or be obligated to pay in any action or claim against Licensee for
infringement of any other person's claimed right to use a trademark in the
Territory, but only where such action or claim results from Licensee's use of
the Trademark in the Territory in accordance with the terms of this Agreement.
Licensee shall give Licensor prompt written notice of any such claim or action
and thereupon Licensor shall undertake and conduct the defense of any suit so
brought. It is understood, however, that if there is a dispute between Licensor
and Licensee as to whether the suit was brought as a result of Licensee's
failure to use the Trademark in accordance with the terms of this Agreement
Licensee may be required to conduct such defense unless and until it is
determined that no such misuse of the Trademark occurred. In the event
appropriate action is not taken by Licensor within thirty (30) days of its
receipt of notice from Licensee, Licensee shall have the right to defend such
claim or action in its own name, but no settlement or compromise of any such
claim or action may be made without the prior written approval of Licensor. In
either case, Licensor and Licensee shall keep each other fully advised of all
developments and shall cooperate fully with each other and in all respects in
connection with any such defense. Such indemnification shall be deemed to apply
solely to the amount of the judgment, if any, against Licensee, and sums paid by
Licensee in connection with its defense, and shall not apply to any
consequential damages suffered by Licensee which are not included in the
aforementioned judgment. Such indemnification shall not apply to any
damages sustained by Licensee by reason of such claimed infringement other than
those specified above.
18.4 Insurance.
(a) Requirements. Without limiting Licensee's liability
pursuant to the indemnity provisions of this Agreement, Licensee shall maintain
comprehensive general liability insurance in the amount of at least $5,000,000
(combined single limit per occurrence) with a broad form property damage
liability endorsement. This insurance shall include broad form blanket
contractual liability, personal injury liability, advertising liability,
products and completed operations liability. Each coverage shall be written on
an "occurrence" form.
(b) Theft and destruction coverage. Licensee shall purchase
insurance against theft and destruction of the Licensed Products which shall (1)
be written on an "all risk" basis; (2) provide that Licensee shall be reimbursed
for loss in an amount equal to the manufacturer's selling price for the products
(this may be accomplished by either a selling price endorsement or business
interruption insurance); (3) provide that Licensor is added as a loss payee as
respects loss to Licensed Products; (4) be in effect while goods are on premises
owned, rented or controlled by Licensee and while in transit or storage; and (5)
include a brand and label clause stating that the insurer will pay the cost of
removing Licensor's name from damaged merchandise and relabeling goods.
(c) General provisions. The insurance described in
subparagraphs (a) and (b) shall include: (1) a cross-liability endorsement; (2)
an endorsement stating that Licensor shall receive at least thirty (30) days
written notice prior to cancellation or non-renewal of coverage; (3) an
endorsement naming Licensor as an insured; (4) an endorsement stating that the
insurance required by this Agreement is primary and that any insurance purchased
by Licensor shall only apply in excess of the insurance purchased by Licensee;
(5) a waiver of subrogation in favor of Licensor; and (6) an endorsement stating
that Licensor may recover for any loss caused Licensor, its agents or employees
by the negligence (including active, passive and gross negligence) of Licensee.
(d) Approved Carrier/Policy Changes. All insurance shall be
obtained from an insurance company approved by Licensor. Licensee shall give at
least thirty (30) days prior written notice to Licensor of the cancellation of,
or any modification in, such insurance policy that would affect Licensor's
status or benefits thereunder. This insurance may be obtained for Licensor by
Licensee in conjunction with a policy which covers products other than the
Licensed Products.
(e) Evidence of coverage. No later than thirty (30) days from
the date hereof, Licensee shall furnish to Licensor evidence, in form and
substance satisfactory to Licensor, of the maintenance and renewal of the
required insurance including, but not limited to, copies of policies with
applicable riders and endorsements, and certificates of insurance.
(f) Territory. The insurance set forth in this Section
must cover the entire Territory.
ARTICLE 19. SEVERABILITY
19.1 Severability. If any provision or any portion of any provision
of this Agreement shall be 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.
ARTICLE 20. NOTICES
20.1 Notices. All reports, approvals and notices required or
permitted to be given under this Agreement shall, unless specifically provided
otherwise in this Agreement, be deemed to have been given if personally
delivered or if mailed by certified or registered mail, if to Licensor, to:
XXXXX XXXXXXXX LICENSING, INC.
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxx Xxxxxxxx
Chief Executive Officer
Copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx, P.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and if to Licensee, to the address set forth above. The parties may change their
address for receipt of notices at any time upon notice to the other party.
ARTICLE 21. SUSPENSION OF OBLIGATIONS
21.1 Suspension of Obligations. If Licensee shall be prevented from
performing any of its obligations because of governmental regulation or order,
or by strike or war, declared or undeclared, or other calamities such as fire,
earthquake, or similar acts of God, or because of other similar or dissimilar
cause beyond the control of Licensee, Licensee's obligations shall be suspended
during the period of such conditions. If such condition continues for a period
of more than sixty (60) days, Licensor shall have the right to terminate this
Agreement. If the act of force majeure consists of a fire, earthquake, flood,
hurricane, tornado, or nuclear war and if the act prevents
Licensee from manufacturing and/or delivering the Licensed Products,
whether due to an inability to obtain fabric or other materials, destruction of
manufacturing facilities, inability to deliver finished product, or otherwise,
Licensee shall have a period of not to exceed ninety (90) days to find alternate
sources and Licensee shall advise Licensor on a weekly basis of the progress it
has made in that regard. If, in Licensor's reasonable opinion, Licensee shall
fail to diligently proceed to obtain alternate sources, or if the condition
shall continue to exist for a period of ninety (90) days, Licensor shall have
the right to terminate this Agreement.
ARTICLE 22. EXHIBITS
22.1 Exhibits. All Exhibits are incorporated into this
Agreement. The forms of Licensor may be revised by Licensor at any time.
ARTICLE 23. OTHER PROVISIONS
23.1 Headings. The headings of the Articles and Paragraphs of this
Agreement are for convenience only and in no way limit or affect the terms or
conditions of this Agreement.
23.2 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23.3 Construction. This Agreement shall be interpreted and construed
in accordance with the laws of the State of New York with the same force and
effect as if fully executed and to be performed therein.
23.4 Jurisdiction. The parties hereby consent to the jurisdiction of
the United States District Court for the Southern District of New York and of
any of the courts of the State 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 shall be effective if in writing and delivered in
person or sent as provided in Paragraph 20.1 hereof.
23.5 Compliance with Laws. Licensee shall comply with all laws,
rules, regulations and requirements of any governmental body which may be
applicable to the operations of Licensee contemplated hereby, including, without
limitation, as they relate to the manufacture, distribution, sale or promotion
of Licensed Products, notwithstanding the fact that the Licensor may have
approved such item or conduct.
IN WITNESS WHEREOF, the parties have executed this Agreement.
XXXXX XXXXXXXX LICENSING, INC. THE STRIDE RITE CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
Title: Assistant Secretary Title: President & COO
EXHIBIT A
XXXXX XXXXXXXX LICENSING, INC.
TRADEMARK REGISTRATIONS
IN CLASS 25
IN U.S. PATENT AND TRADEMARK OFFICE
Trademark Registration Number
XXXXX XXXXXXXX Reg. No. 1,398,612
FLAG/LOGO DESIGN Reg. No. 1,460,988
CREST DESIGN Reg. No. 1,673,527
EXHIBIT B
XXXXX XXXXXXXX LICENSING, INC. STATEMENT OF ROYALTIES
FOR_________TO________19__
(QUARTER)
LICENSEE NAME____________________________________________
LICENSEE ADDRESS_________________________________________
---------------------------------------------------------
LICENSEE PRODUCT(S)______________________________________
CUSTOMER INVOICE ITEM UNIT NUMBER GROSS LESS LESS LESS LESS NET
SALES NET ROYALTY
NAME NUMBER STYLE WHOLESALE SOLD SALES ALLOWANCES MARKDOWNS TRADE
RETURNS AMOUNT
PRICE DISCOUNTS
TOTALS
SEND STATEMENT TO:
XXXXX XXXXXXXX LICENSING, INC. I CERTIFY THAT THE ABOVE IS ACCURATE
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
------------------------------------
U.S.A. SIGNATURE
EXHIBIT C
XXXXX XXXXXXXX LICENSING, INC. Page______ of ________
Date__________________
FORM MUST BE SUBMITTED COMPLETE SUBMIT TO THE ATTENTION OF:
XXXXX XXXXXXXX LICENSING, INC.
00 XXXX 00XX XXXXXX
XXX XXXX, XXX XXXX 00000
SAMPLE APPROVAL FORM
(ALL SAMPLES SUBMITTED FOR APPROVAL MUST BE IN CORRECT FABRIC)
NAME OF LICENSEE __________________________________________________________
LICENSED PRODUCT _________________________________________________________
LICENSEE'S ADDRESS ________________________________________________________
SEASON _____________ STYLE NUMBER _____________ FABRICATION _____________
WHOLESALE PRICE ____________________ COLORS _____________________________
SIZES ______________________________ FACTORY _____________________________
START TAKING ORDERS __________________ END TAKING ORDERS __________________
START SHIP ____________________________ END SHIP __________________________
APPROVED ________________ DISAPPROVED ___________________
COMMENTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
------------------------- ----------------------------
SIGNATURE OF LICENSEE SIGNATURE OF LICENSOR
DATE RETURNED TO LICENSEE _______________________________________
EXHIBIT D
THIRD PARTY MANUFACTURING AGREEMENT
THIS AGREEMENT made this ____ day of ___________ 199__, by and between
____________________________, having an office at
-------------------------------
__________________________________ (hereinafter referred to as the
"Company"), and
________________________________________________________________ having an
office at ________________________________________________________________
(hereinafter referred to as the "Manufacturer").
W I T N E S S E T H :
WHEREAS, Manufacturer is engaged is the manufacture of garments and/or
other items of merchandise;
WHEREAS, Company wishes to contract with Manufacturer for manufacture of
certain garments and/or other merchandise from time to time, which garments
and/or other items of merchandise (the "Products") will bear the trademark XXXXX
XXXXXXXX, the trade name XXXXX XXXXXXXX, all related logos, crests, emblems or
symbols, and all combinations, forms and derivatives thereof as are from time to
time used by Company or any of its affiliates, whether registered or
unregistered (the "Trademarks"); and
WHEREAS, Company has been licensed by Xxxxx Xxxxxxxx Licensing, Inc.
("THLI"), the owner of all rights, title and interests in and to the Trademarks,
to use the Trademarks.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree as follows:
1. THE PRODUCTS.
Company and THLI have created certain designs and patterns from
which Manufacturer will create three-dimensional samples. Company shall advise
Manufacturer if the samples meet Company's quality requirements within fifteen
(15) days of receipt. Manufacturer shall make any modifications to the samples
as required by Company. Samples accepted by Company shall be designated as
prototypes for the purposes of this Agreement.
2. TERM.
(a) The term of this Agreement shall commence as of the date hereof
and continue through December 31, 1999.
(b) In the event that Manufacturer shall have faithfully performed
each and every obligation of this Agreement during the Term referred to in
Paragraph 2(a) above, then this Agreement shall automatically renew from month
to month commencing immediately upon expiration of the term, unless either party
has given the other thirty (30) days written notice of its intention to
terminate the Agreement.
3. MANUFACTURE.
(a) Manufacturer shall only manufacture the specific number of
Products as requested by Company and at no time shall manufacture excess goods
or overruns. Manufacturer shall not sell any Products bearing the Trademarks to
any third parties without the express written consent of Company.
(b) Manufacturer shall manufacture the Products and Packaging to
conform in quality and specifications to the prototypes as defined in Paragraph
1, above.
(c) All Products and Packaging manufactured by Manufacturer shall be
delivered to locations specified by Company or directly to Company, whichever
Company may direct.
4. COMPLIANCE WITH CODE; APPLICABLE LAWS.
(a) Attached hereto as Addendum A is THLI's Supplier Code of Conduct
(the "Code") which applies to any entity manufacturing merchandise under the
Xxxxx Xxxxxxxx(R) label (including the components thereof). As a condition to
manufacturing Products hereunder, Manufacturer shall comply with the terms of
the Code and evidence such compliance by, (1) upon execution of this Agreement,
executing the Code in the form as attached or such other form as provided by
THLI, and returning such document to THLI, and (2) publicly displaying the Code,
in a form as provided by THLI from time to time, in a clearly visible location
in Manufacturer's facility at all times while this Agreement is in effect.
(b) In order to ensure compliance with the Code, Company has
developed a program of monitoring its manufacturers and such manufacturers'
subcontractors (hereinafter the "Supplier Monitoring Program"). As a condition
to manufacturing Product hereunder, Manufacturer hereby agrees that it shall
cooperate fully with the Supplier Monitoring Program, which cooperation includes
but is not limited to Company's inspections in accordance with Paragraph 5,
below.
(c) For purposes of this Agreement a "subcontractor" shall be
defined as an entity or an individual which or whom Manufacturer either hires or
pays to perform the manufacturing tasks which Manufacturer could otherwise
perform itself at its own facility or through its own employees and staff. A
"supplier" shall be defined as an individual or entity who produces components
for merchandise, and provides such components to manufacturer in order to
assemble the finished merchandise. Examples of a supplier include, but are not
limited to, fabric/trim manufacturers, yarn manufacturers, button manufacturers,
or zipper manufacturers, provided that such named manufacturers do not
contribute further to the manufacture of the finished merchandise. Prior to
utilizing any subcontractor or supplier for the manufacture of the
Products, Manufacturer shall provide written notice to Company of: (i) the name
and address of each such subcontractor and/or supplier; (ii) the nature and type
of work performed or product supplied to Manufacturer; and (iii) duration of the
subcontractor or supplier relationship.
(d) Within thirty (30) days from executing this Agreement for any
existing subcontractor and suppliers, and within thirty (30) days after
establishing a new arrangement with a subcontractor or supplier, Manufacturer
shall obtain and provide to Company the signature of an authorized
representative from each of its subcontractors (if any) used in the production
of Products for Company on a Manufacturing Agreement in the same form as this
Agreement. Manufacturer shall further obtain and provide to Company the
signature of an authorized representative from each of Manufacturer's suppliers
of fabric, trim or any other product used in the manufacture of merchandise for
Company on a Certification in the same form as that which is attached hereto and
hereafter referred to as Addendum B, and provided by Company from time, or such
other form as provided by Company. In the event Manufacturer has knowledge of,
has reason to believe, or should have reason to know that any supplier or
subcontractor used by Manufacturer is in breach of the Certification or
Manufacturing Agreement, as the case may be, Manufacturer shall immediately
notify Company and Manufacturer shall, at its sole expense, take immediate
action to rectify such breach, including, where Company deems it necessary,
immediate termination of its relationship with such supplier or subcontractor.
If Manufacturer fails to take immediate action, Company shall have the right to
terminate this Manufacturing Agreement immediately. Manufacturer acknowledges
that it shall remain primarily liable and completely obligated under all of the
provisions of this Agreement in respect of such subcontracting and supplier
arrangement.
(e) Manufacturer certifies that it has in effect a program of
monitoring its subcontractors and suppliers and other designated contract
facilities which manufacture Xxxxx Xxxxxxxx(R) brand merchandise which is
sufficient to ensure their compliance with the Code and all applicable state,
local and foreign laws and regulations pertaining to wages, overtime
compensation, benefits, hours, hiring and employment, workplace conditions and
safety, the environment, collective bargaining, freedom of association and that
their products or and the components thereof are made without the use of child
(persons under the age of 15 or younger than the age for completing compulsory
education, if that age is higher than 15), prison, indentured, exploited bonded,
forced or slave labor.
(f) Manufacturer shall ensure that all merchandise manufactured
hereunder shall be manufactured in compliance with all federal, state and local
laws which pertain to the manufacture of clothing, apparel, and other
merchandise including the Flammable Fabrics Act, as amended, and regulations
thereunder and Manufacturer guarantees, that with regard to all products,
fabrics or related materials used in the manufacture of the Products, for which
flammability standards have been issued, amended or continued in effect under
the Flammable Fabrics Act, as amended, reasonable and representative tests, as
prescribed by the Consumer Product Safety Commission, have been performed which
show that the Products at the time of their shipment or delivery
conform to the above-referenced flammability standards as are applicable.
(g) Manufacturer shall manufacture or cause to manufacture all
Products (including components thereof) manufactured in the United States, in
compliance with all applicable requirements of Sections 6, 7, and 12 of the Fair
Labor Standards Act, as amended, and all regulations and orders of the United
States Department of Labor under Section 14 thereof, and applicable state and
local laws pertaining to child labor, minimum wage and overtime compensation,
and, if the Products are manufactured outside the United States, in compliance
with all applicable laws, including but not limited to, wage, overtime
compensation, benefits, hour, hiring and employment, workplace conditions and
safety, environmental, collective bargaining, freedom of association laws of the
country of manufacture and without the use of child (persons under the age of
fifteen or younger than the age for completing compulsory education, if that age
is higher than 15), prison, indentured, exploited bonded, forced or slave labor.
(h) Manufacturer acknowledges that it has read and understands
Company's policy with regard to the manufacture of Products for Company.
Manufacturer further agrees that it shall, simultaneous to executing this
Agreement, execute and abide by the Certification, shall execute and abide by
all Certifications provided by Company from time to time. Failure by
Manufacturer to execute and abide by such Certification shall be grounds for
immediate termination of this Agreement by Company.
(i) Manufacturer shall not utilize or permit any subcontractors or
suppliers to utilize in the manufacture or treatment of any of the Products
(including the components thereof) manufactured hereunder any Azo dyes that can
be split into any of the following amines:
CAS # CAS #
4-Aminobiphenlyl 92-67-1 3,3'-Dimethoxybenzidine 119-90-4
Benzidine 92-875 3,3'-Dimethylbenzadine 119-93-7
4-Chloro-o-toluidine 95-69-2 3,3'-Dimethyl- 838-88-0
2-Naphthylamin 91-59-8 4,4'diaminodiphenylmethane
o-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
2-amino-4-nitrotoluol 99-55-8 4,4'Methaylen-bis-(2-chloranilin)101-14-4
p-Chloroaniline 106-47-8 4,4'Oxydianiline 101-80-4
2,4-Diaminoanisole 615-05-4 4,4'Thiodianiline 139-65-1
4,4'-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
3,3'-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
Aminoanabenzane 2,4,5-Trimethylaniline 137-17-7
o-Anisidine
(j) Manufacturer's use or any of Manufacturer's subcontractors or
suppliers use of the following chemicals in connection with the manufacturer or
treatment of any of the Products (including the components thereof) manufactured
hereunder, shall be in accordance with the following standards or such other
standards Company may designate from time to time:
(i) Formaldehyde: Must be less than 300 p.p.m. when
tested in by the Acetylacetone method in accordance
with Japanese law 112.
(ii) Pentachlorophenol (Pesticides): Must be less than 5
p.p.m.
and; (iii) Nickel: In the event any metal parts of a garment
or other merchandise coming into contact with the skin,
contain nickel in excess of 0.5 micrograms per square
centimeter/week, Company must be so notified and special
warning labels need to be attached to the garment.
5. INSPECTION.
(a) Manufacturer shall arrange for and provide access to Company's
and THLI's representative, including, but not limited to, any independent entity
designated by Company or THLI's legal representative, to: (i) Manufacturer's
manufacturing facility, residential facilities (if any) and any manufacturing
and/or residential facility operated by any of Manufacturer's subcontractors;
(ii) Manufacturer's books, records and documents necessary to evidence
Manufacturer's compliance with the Code and all applicable laws, rules and
regulations including, but not limited to, employee wages, employee timecards,
withholding rates and deductions, worker's contracts and/or agreements, any
company policies affecting employees, evidence of employee age, shipping
documents, cutting reports and other documentation relating to the manufacture
and shipment of the Products; and (iii) Manufacturer's books, records and
documents relating to the use of chemicals and dyestuffs in the fabrics, trims,
garments and other merchandise manufactured hereunder. For purposes of this
Paragraph, all such books, records and documents shall be maintained by
Manufacturer in a secure and readily accessible location for a period of three
(3) years from their creation.
(b) The access provided by Manufacturer as set forth in Paragraph
5(a), above, shall include Company's and THLI's right to inspect, test, and take
samples of the Products, whether finished or semi-finished, at any time during
the manufacturing process to ensure that the manufacture of the Products is in
accordance with the terms and restrictions herein contained
(c) Company shall have the right to reject any Products or packaging
not meeting the standards described in Paragraph 1, above. Manufacturer shall
not have the right to sell or otherwise distribute any rejected Products or
packaging. All such products shall be destroyed according to methods and
procedures provided by Company.
6. SHIPPING LEGEND.
All commercial invoices (bills of lading) which accompany all
Products must include the following language (either preprinted or "stamped"):
"We hereby certify that the merchandise (including components
thereof) covered by this shipment was manufactured in compliance
with the Xxxxx Xxxxxxxx Supplier Code of Conduct and: (1) if the
merchandise was manufactured in the United States, it was
manufactured in compliance with (a) sections 6, 7, and 12 of the
Fair Labor Standards Act, as amended and all regulations and orders
of the United States Department of Labor under section 14 thereof,
and (b) state and local laws pertaining to child labor, minimum wage
and overtime compensation; or (2) if the merchandise was
manufactured outside the United States, it was manufactured in
compliance with the wage and hour laws of the country of manufacture
and without the use of child (persons under the age of 15 or younger
than the age for completing compulsory education, if that age is
higher than 15), prison, indentured, exploited bonded, forced or
slave labor. We further certify that we have in effect a program of
monitoring our subcontractors and suppliers and other designated
contract facilities which manufacture Xxxxx Xxxxxxxx(R) brand
merchandise for compliance with the foregoing. We also certify that
the merchandise is in compliance with all laws governing the
designation of country of origin and, if applicable, is being
shipped under legally issued and valid export license or visa."
Any merchandise shipped that is not accompanied by a commercial invoice bearing
the required language will be subject to rejection and returned at
Manufacturer's expense and Manufacturer may be charged for any and all costs
that are incurred by Company due to the rejection, including, but not limited
to, damages sustained as a result of Company's liability to customers, any
resulting fines and penalties and attorney's fees for said rejected goods. Such
rejected goods may not be sold or distributed by Manufacturer to any entity
other than Company.
7. USE OF TRADEMARKS; TRADEMARKS.
(a) Manufacturer shall not use the Trademarks, in any manner
whatsoever (including, without limitation, for advertising, promotion and
publicity purposes), without obtaining the prior written approval of THLI, which
may be withheld in THLI's sole discretion. In any event Manufacturer shall not
at any time use, promote, advertise, display or otherwise commercialize the
Trademarks or any material utilizing or reproducing the Trademarks in any
manner. Manufacturer shall not make any reference in its business materials,
advertising or in any of its business activities to the fact that Manufacturer
is being contracted by Company to manufacture merchandise under the Xxxxx
Xxxxxxxx(R) label.
(b) The Trademarks will appear on all of the Products and all
packaging in the manner provided by Company.
(c) No other trademarks or notices shall appear on Products or
packaging without Company's and THLI's prior written consent in each instance.
(d) Manufacturer's use of the Trademarks shall inure to the benefit
of THLI. Manufacturer shall take any and all steps required by THLI and the law
to perfect THLI's rights therein.
8. PROPERTY OF OWNER.
(a) Manufacturer recognizes the great value of the goodwill
associated with the Trademarks and the identification of the Products with the
Trademarks and acknowledges that the Trademarks and all rights therein and
goodwill pertaining thereto belong exclusively to THLI Manufacturer further
recognizes and acknowledges that a breach by Manufacturer of any of its
covenants, agreements or other undertakings hereunder will cause THLI
irreparable damage, which cannot be adequately remedied in damages in an action
at law, and may, in addition thereto, constitute an infringement of THLI's
rights in the Trademarks, thereby entitling THLI to equitable remedies, costs
and reasonable attorney's fees.
(b) To the extent any rights in and to the Trademarks are deemed to
accrue to Manufacturer, Manufacturer hereby assigns any and all such rights, at
such time as they may be deemed to accrue, including the related goodwill, to
THLI.
(c) Manufacturer shall (i) never challenge the validity of THLI's
ownership in and to the Trademarks or any application for registration thereof,
or any trademark registration thereof and (ii) never contest the fact that
Manufacturer's rights under this Agreement are solely those of a manufacturer
and terminate upon expiration of this Agreement. Manufacturer shall, at any
time, whether during or after the term of the Agreement, execute any documents
reasonably requested by THLI to confirm THLI's ownership rights. All rights in
the Trademarks other than those specifically granted herein are reserved by THLI
for its own use and benefit.
(d) Without limiting the generality of any other provision of this
Agreement, Manufacturer shall not (i) use the Trademarks, in whole or in part,
as a corporate or trade name or (ii) join any name or names with the Trademarks
so as to form a new trademark. Manufacturer agrees not to register, or attempt
to register, the Trademarks in its own name or any other name, anywhere in the
world.
(e) All provisions of this paragraph shall survive the expiration or
termination of this Agreement.
9. TRADEMARK PROTECTION.
(a) In the event that Manufacturer learns of any infringement or
imitation of the Trademarks or of any use by any person or entity of a trademark
similar to the Trademarks, it shall promptly notify Company and thereupon,
Company shall so notify THLI. THLI shall take such action as it deems advisable
for the protection of its rights in and to the Trademark and, if requested to do
so by THLI, Manufacturer shall cooperate with THLI in all respects. In no
event, however, shall THLI be required to take any action if it
deems it inadvisable to do so.
(b) THLI shall defend, at its cost and expense, and with counsel of
its own choice, any action or proceeding brought against Manufacturer for
alleged trademark infringement arising out of Manufacturer's use of the
Trademarks in accordance with the provisions of this Agreement.
(c) Manufacturer shall cooperate with THLI in the execution, filing
and prosecution of any trademark, copyright or design patent applications that
THLI may desire to file and for that purpose Manufacturer shall supply to THLI
from time to time such samples as may be reasonably required.
(d) All provisions of this paragraph shall survive the
expiration or of this Agreement.
10. TRANSSHIPMENT. Transshipment is an illegal practice of falsely
documenting the country of origin of the raw materials used to manufacture the
Products and the finished Products shipped to the United States in order to
evade quota restraints on the country of actual production and the shipment of
products under counterfeit export licenses or visas. Manufacturer acknowledges
that transshipment in any form, violates U.S. federal law, that Company and THLI
will review all documents received from Manufacturer to assure the veracity and
the authenticity of the sources of Products and that, upon indication of
transshipment of the Products by Manufacturer, Company or THLI reserves the
right to immediately terminate this Agreement and pursue available remedies
against Manufacturer.
11. SECONDS, THIRDS OR EXCESS GOODS. Manufacturer shall not have the right
to sell any Products or packaging which are determined to be seconds, thirds or
are in excess of the amount of the Products requested by Company. All seconds,
thirds or excess products, including trims, shall be purchased by Company at a
reasonable fair market price. Company shall have the right to inspect any
seconds, thirds or excess Products to ensure that they comply with the terms of
this Agreement.
12. STOLEN GOODS OR DAMAGED GOODS. Manufacturer will provide Company with
immediate notice of any stolen Products or damaged Products including Products
that were then in production. With regard to damaged Products, Manufacturer
shall not have the right to sell any damaged Products. With regard to stolen
Products, Manufacturer shall cooperate with Company with respect to any action
regarding the stolen Products.
13. DESIGN OWNERSHIP. All rights, including without limitation, copyright,
trade secret and design patent, to designs for the Products including, without
limitation, artwork, prints, patterns, package designs, labels, advertising or
promotional materials or any other designs using or used on or affixed thereto,
and to any package design, bearing the Trademarks shall, as between the parties
hereto be the property of THLI. All Products manufactured from designs submitted
by Manufacturer and approved by THLI shall bear the Trademarks.
14. CONFIDENTIALITY. During the term of this Agreement and thereafter,
each party shall keep strictly secret and confidential any and all information
acquired from the other party hereto or its designee and shall take all
necessary precautions to prevent unauthorized disclosure of such information.
Manufacturer acknowledges that it will receive from Company prints, designs,
ideas, sketches, and other materials which Company and THLI intend to use on or
in connection with lines of merchandise which have not yet been put into the
channels of distribution. The parties recognize that these materials are
valuable property of THLI. Manufacturer acknowledges the need to preserve the
confidentiality and secrecy of these materials and agrees to take all necessary
steps to ensure that use by it or by its employees and/or agents will in all
respects preserve such confidentiality and secrecy. Manufacturer shall take all
reasonable precautions to protect the secrecy of the materials, samples, and
designs prior to their commercial distribution or the showing of samples for
sale, and shall not manufacture any merchandise employing or adapted from any of
said designs except for Company, THLI or its affiliates or designees.
15. FORCE MAJEURE.
(a) No failure or omission by either of the parties to perform any
of its obligations under this Agreement shall be deemed a breach of this
Agreement if such failure or omission is the result of acts of God, war, riot,
accidents, compliance with any action or restriction of any government or agency
thereof, strikes or labor disputes, inability to obtain suitable raw materials,
fuel, power or transportation, or any other factor or circumstance beyond the
control of the party, which is not attributable to the negligence of such party.
(b) Any suspension of performance by reason of this paragraph shall
be limited to the period during which such cause of failure exists, but such
suspension shall not affect the running of the term of this Agreement. However,
if the suspension of performance by reason of this paragraph exceeds six months,
either party may give written notice of termination of this Agreement.
16. MANUFACTURER'S WARRANTIES AND REPRESENTATIONS.
Manufacturer warrants and represents that:
(a) It has and will have throughout the term of this Agreement, the
full power, authority and legal right to execute and deliver, and to perform
fully and in accordance with all of the terms of this Agreement.
(b) The entering of this Agreement by Manufacturer does not violate
any agreements, rights or obligations existing between Manufacturer and any
other person, entity, or corporation.
(c) It is not engaged in and will not engage in any activities which
are in violation of any applicable domestic, foreign or international laws,
rules or regulations, including without limitation laws, rules or regulations
governing labor, the environment, the manufacture and sale of goods, U.S.
Customs laws or illegal transshipment. Company maintains a policy against
engaging in any illegal activities and will not buy or sell products
provided throughout the use of any unlawful or unethical practices.
(d) It accurately states the country of origin on all products, that
it does not and will not transship, and it will act to stop or prevent any known
illegal transshipment activity.
(e) It shall not utilize, nor permit any of its subcontractors or
suppliers to utilize in the manufacture or treatment of any of the Products
(including the components thereof) manufactured hereunder any AZO dyes that can
be split into any of the amines set forth in Paragraph 3(i), above.
(f) Its use or any of its subcontractors or suppliers use of the
chemicals set forth in Paragraph 3(j), above, in connection with the
manufacturer or treatment of any of the Products (including the components
thereof) manufactured hereunder, shall be in accordance with the standards set
forth in Paragraph 3(j) or such other standards as Company may designate from
time to time.
17. COMPANY'S WARRANTIES AND REPRESENTATIONS.
Company warrants and represents that:
(a) it has, and will have throughout the Term of this Agreement, the
right to authorize use of the Trademark to Manufacturer in accordance with the
terms and provisions of this Agreement; and
(b) the entering of this Agreement by Company does not violate any
agreements, rights or obligations existing between Company and any other person,
entity, or corporation.
18. INDEMNIFICATIONS.
(a) Company hereby indemnifies Manufacturer and shall hold it
harmless from any loss, liability, damage, cost or expense (including reasonable
attorney's fees) arising out of any claims or suits which may be brought against
Manufacturer by reason of the breach by Company of the warranties or
representations as set forth in Paragraph 17, above, provided that Manufacturer
gives prompt written notice, and full cooperation and assistance to Company
relative to any such claim or suit, and that Company shall have the option to
undertake and conduct the defense of any suit so brought. Manufacturer shall
cooperate fully in all respects with Company in the conduct and defense of said
suit and/or proceedings.
(b) Manufacturer indemnifies and agrees to hold Company harmless
from any loss, liability, damage, cost or expense (including reasonable
attorney's fees), arising out of (i) any breach of the terms herein contained;
(ii)any claims or suits by reason of any unauthorized use by Manufacturer in
connection with the Products or the Trademarks covered by this Agreement; (iii)
Manufacturer's noncompliance with any applicable federal, state, or local law or
with any other applicable governmental units or agency's rules,
regulations; and (iv) any alleged defects and/or inherent dangers in Products or
use thereof.
(c) If reasonably available in the country in which Manufacturer
operates its factory, Manufacturer agrees to obtain, at its own expense, product
liability insurance providing adequate protection for Company and Manufacturer
against any claims or suits in an amount no less than $3,000,000. If applicable,
within thirty (30) days from the date hereof, Manufacturer undertakes to submit
to Company a fully paid policy or Certificate of Insurance naming Company as an
insured party and, requiring that the insurer shall not terminate or materially
modify such without written notice to Company of at least twenty (20) days.
19. TERMINATION.
(a) Company shall have the right to terminate this Agreement
immediately upon written notice to Manufacturer if Manufacturer breaches any of
its obligations under this Agreement or such other occurrences as outlined
below, and such breach remains uncured or cannot be cured by Manufacturer within
ten (10) days from receipt of notice;
(b) Company shall have the right to terminate this Agreement
immediately upon written notice to Manufacturer, if Manufacturer is found at any
time to be in breach of the representation made in Paragraph 16(e) or if any
governmental agency or other body or office or official vested with appropriate
authority deems the Products to be harmful or defective in any way, manner or
form, or are being sold or distributed in contravention of applicable laws and
regulations or in a manner likely to cause harm;
(c) Company shall have the right to terminate this Agreement
immediately upon written notice to Manufacturer, if Manufacturer manufactures
the Products without the prior written approval of Company as provided herein;
(d) Company shall have the right to terminate this Agreement upon
ten (10) days written notice to Manufacturer, if Manufacturer is unable to pay
its debts when due, or makes any assignment for the benefit of creditors, or
files any petition under the bankruptcy or insolvency laws of any jurisdiction,
country or place, or has or suffers a receiver or trustee to be appointed for
its business or property, or is adjudicated a bankrupt or an insolvent;
(e) Company shall have the right to terminate this Agreement upon
ten (10) days written notice to Manufacturer, if Manufacturer fails to make
timely delivery of the Products; or
(f) Notwithstanding the foregoing provisions, Company shall have the
right to terminate this Agreement, with or without cause, upon thirty (30) days
notice to Manufacturer, provided however, that, upon written approval by
Company, Manufacturer shall have the right to complete any work then in
progress.
20. ACTS UPON EXPIRATION OR TERMINATION OF THIS AGREEMENT.
(a) Upon and after the expiration or termination of this Agreement,
Manufacturer agrees not to make reference in its advertising or its business
materials to having been formerly associated with Company or the Trademarks.
(b) Upon and after the expiration or termination of this Agreement,
Manufacturer will refrain from further use of the Trademarks or of anything
confusingly similar thereto, in connection with the manufacture of any products.
Additionally, all originals and copies of all sketches, patterns, prototypes,
samples or other materials relating to the Products shall be immediately
returned by Manufacturer to Company.
(c) In the event of expiration or termination of this Agreement, as
herein provided, with the exception of the Products which Manufacturer may, with
Company's consent, ship to satisfy any unfilled, confirmed orders for the
current season it had received prior to said expiration or termination, Company
shall have the prior right and option to purchase any or all of the Products and
packaging materials, as then in Manufacturer's possession or carried on its
books of account. Upon such termination or expiration, Manufacturer shall
immediately cause physical inventories to be taken of (i) Products on hand; (ii)
Products in the process of manufacture; and (iii) all packaging materials, which
inventories shall be reduced to writing and a copy thereof shall be delivered to
Company not later than fifteen (15) days from such termination or expiration.
Written notice of the taking of each inventory shall be given Company at least
forty-eight (48) hours prior thereto. Company shall have the right to be present
at such physical inventory or to take its own inventory, and to exercise all
rights it has available with respect to the examination of Manufacturer's books
and records. If Manufacturer does not allow Company to take such inventory, it
shall have no right to sell the remaining Products as provided in Paragraph
20(e) below.
(d) Manufacturer recognizes that any sale of the Products upon
termination or expiration, would cause irreparable damage to the prestige of
Company and to the Trademarks, and to the goodwill pertaining thereto.
(e) Upon expiration or termination of this Agreement, Manufacturer
shall cease the manufacture of Products. All the Products set forth on the
inventories referred to in subdivision (i) and (ii) of Paragraph 20(c) which are
not purchased by Company pursuant to such paragraph may be sold subject to
Company's prior right to approve the customers in writing and the terms and
conditions of each sale. Such sale shall otherwise be strictly in accordance
with the terms, covenants and conditions of this Agreement as though the
Agreement had not expired or terminated. In no event shall Manufacturer sell any
Products to any third party without the prior written approval of Company.
21. NOTICES.
All notices which either party hereto is required or may desire to
give shall be given by addressing the same to the address hereinafter in this
paragraph, or at such other address as may be designated in writing
by any party in a notice to the other given in the manner prescribed in this
paragraph. All such notices shall be sufficiently given when mailed by
registered or certified mail. The address to which any such notices, shall be
given are the following:
TO COMPANY: TO MANUFACTURER:
22. NO PARTNERSHIP, ETC.
This Agreement does not constitute and shall not be construed as a
partnership or joint venture between Company and Manufacturer. Neither party
shall have any right to obligate or bind the other party in any manner
whatsoever, and nothing herein contained shall give, or is intended to give, any
rights of any kind to any third persons.
23. NON-ASSIGNABILITY, ETC.
This Agreement shall bind and inure to the benefit of Company and
its successors and assigns. This Agreement is personal to Manufacturer, and
Manufacturer shall not franchise its rights hereunder and neither this Agreement
nor any of the rights of Manufacturer hereunder shall be sold, transferred or
assigned by Manufacturer and no rights hereunder shall devolve by operation of
law or otherwise upon any receiver, liquidator, trustee or other party.
24. SEVERABILITY.
If any provision or any portion of any provision of this Agreement
shall be 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
remaining portion of any provision which is illegal, invalid or unenforceable in
part shall continue in full force and effect.
25. HEADINGS.
The headings of the Paragraphs of this Agreement are for convenience
only and shall in no way limit or affect the term or conditions of this
Agreement.
26. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
27. CONSTRUCTION.
This Agreement shall be construed in accordance with the laws of the
State of New York of the United States of America with the same force and effect
as if fully executed and to be performed therein.
28. JURISDICTION
The parties hereby consent to the exclusive jurisdiction of the
United States District Court for the Southern District of New York and of any of
the courts of the State 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 shall be effective if in writing and delivered in person or sent as
provided in Paragraph 21 hereof.
29. WAIVER, MODIFICATION, ETC.
No waiver, modification or cancellation of any term or condition of
this Agreement shall be effective unless executed in writing by the party
charged therewith. No written waiver shall excuse the performance of any acts
other than those specifically referred to herein. The fact that Company has not
previously insisted upon Manufacturer expressly complying with any provision of
this Agreement shall not be deemed to be a waiver of Company's future right to
require compliance in respect thereof and Manufacturer specifically acknowledges
and agrees that the prior forbearance in respect of any act, term or condition
shall not prevent Company from subsequently requiring full and complete
compliance thereafter.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first written above.
--------------------------------------
-------------------------------------
[LICENSEE NAME] [MANUFACTURER NAME]
By: _____________________________ By:__________________________________
Print Name: _______________________ Print Name:__________________________
Title: _______________________ Title:_______________________________
Date: _____________________________ Date: _______________________________
Xxxxx Xxxxxxxx Corporation
Supplier Code of Conduct
We, at the Xxxxx Xxxxxxxx Corporation (hereinafter "Xxxxx Xxxxxxxx")
are proud of our tradition of conducting our business in accordance with the
highest ethical standards and in compliance with the laws of the United States
and of the countries in which we produce, buy and sell our products.
Xxxxx Xxxxxxxx is committed to legal compliance and ethical business
practices in all operations and seeks to do business with suppliers who share
that commitment. Xxxxx Xxxxxxxx actively seeks to engage as its suppliers,
companies which offer their workers safe and healthy workplaces.
Xxxxx Xxxxxxxx will not tolerate exploitative or abusive conditions once
known. The Xxxxx Xxxxxxxx Supplier Code of Conduct (hereinafter the "Code of
Conduct") defines our minimum expectations. No Code can be all inclusive, but we
expect our suppliers to act reasonably in all respects and to ensure that no
abusive, exploitative or illegal conditions exist at their workplaces.
Xxxxx Xxxxxxxx requires its suppliers to extend principles of fair and
honest dealing to all others with whom they do business, including employees,
subcontractors and other third parties. We also require our suppliers to ensure
and to certify to us that no abusive, exploitative or illegal conditions exist
at the workplaces of their suppliers and subcontractors.
Xxxxx Xxxxxxxx will only do business with suppliers who obey the laws of
the country in which they operate and the principles expressed in this Code of
Conduct.
Xxxxx Xxxxxxxx will only do business with suppliers who have certified to
us that their business practices are lawful, ethical and in compliance with the
principles set forth in this Code of Conduct. Moreover, Xxxxx Xxxxxxxx will only
do business with suppliers who have agreed to be subjected to the scrutiny of
the Xxxxx Xxxxxxxx Supplier Monitoring Program under which they will be
inspected and evaluated to ensure their compliance with this Code of Conduct.
Forced Labor: Xxxxx Xxxxxxxx will not purchase products or components
thereof from suppliers that use forced labor, prison labor, indentured labor or
exploited bonded labor, or permit their suppliers to do so.
Child Labor: Xxxxx Xxxxxxxx will not purchase products or components
thereof manufactured by persons younger than 15 years of age or younger than the
age of completing compulsory education in the country of manufacture where such
age is higher than 15.
Addendum A
Harassment or Abuse: Xxxxx Xxxxxxxx suppliers and subcontractors must
treat their employees with respect and dignity. No employee shall be subject to
physical, sexual or psychological harassment or abuse.
Nondiscrimination: Xxxxx Xxxxxxxx suppliers and subcontractors shall not
subject any person to discrimination in employment, including hiring, salary,
benefits, advancement, discipline, termination or retirement, on the basis of
gender, race, religion, age, disability, sexual orientation, nationality,
political opinion, or social or ethnic origin.
Health and Safety: Xxxxx Xxxxxxxx suppliers and subcontractors shall
provide a safe and healthy working environment to prevent accidents and injury
to health arising out of, linked with, or occurring in the course of work or as
a result of the operation of employer facilities. Employers must fully comply
with all applicable workplace conditions, safety and environmental laws.
Freedom of Association: Xxxxx Xxxxxxxx suppliers and subcontractors shall
recognize and respect the right of employees to freely associate in accordance
with the laws of the countries in which they are employed.
Wages and Benefits: Xxxxx Xxxxxxxx suppliers and subcontractors recognize
that wages are essential to meeting employees' basic needs. Xxxxx Xxxxxxxx
suppliers and subcontractors shall pay employees at least the minimum wage
required by local law regardless of whether they pay by the piece or by the hour
and shall provide legally mandated benefits.
Work Hours: Xxxxx Xxxxxxxx suppliers and subcontractors shall not require
their employees to work more than the limits on regular and overtime hours
allowed by the law of the country of manufacture. Except under extraordinary
business circumstances, Xxxxx Xxxxxxxx suppliers' and subcontractors' employees
shall be entitled to one day off in every seven-day period. Xxxxx Xxxxxxxx
suppliers and subcontractors must inform their workers at the time of their
hiring if mandatory overtime is a condition of their employment. Xxxxx Xxxxxxxx
suppliers and subcontractors shall not compel their workers to work excessive
overtime hours.
Overtime Compensation: Xxxxx Xxxxxxxx suppliers' and subcontractors'
employees, shall be compensated for overtime hours at such premium rate as is
legally required in the country of manufacture or, in countries where such laws
do not exist, at a rate at least equal to their regular hourly compensation
rate.
Contract Labor: Xxxxx Xxxxxxxx suppliers or subcontractors shall not use
workers obligated under contracts which exploit them, which deny them the basic
legal rights available to people and to workers within the countries in which
they work or which are inconsistent with the principles set forth in this Code
of Conduct
Legal and Ethical Business Practices: Xxxxx Xxxxxxxx suppliers and
subcontractors must fully comply with all applicable local, state, federal,
national and international laws, rules and regulations including, but not
limited to, those relating to wages, hours, labor, health and safety, and
immigration. Xxxxx Xxxxxxxx suppliers and subcontractors must be ethical in
their business practices.
Penalties: Xxxxx Xxxxxxxx reserves the right to terminate its business
relationship with any supplier who violates this Code of Conduct or whose
suppliers or subcontractors violate this Code of Conduct. Xxxxx Xxxxxxxx
reserves the right to terminate its business relationship with suppliers who
fail to provide written confirmation to Xxxxx Xxxxxxxx that they have a program
in place to monitor their suppliers and subcontractors for compliance with this
Code of Conduct.
CERTIFICATION
In consideration of Xxxxx Xxxxxxxx U.S.A., Inc. ("THUSA") placing orders
for the manufacture of Xxxxx Xxxxxxxx(R) brand merchandise with us in the
future, and in compliance with THUSA's Manufacturing Agreement with us (the
"Agreement"), we hereby certify that:
I. Any merchandise (including components thereof) we manufacture or cause
to be manufactured under the Agreement will be manufactured in compliance with:
(1) all applicable requirements of Sections 6, 7, and 12 of the Fair Labor
Standards Act, as amended, and all regulations and orders of the United States
Department of Labor under Section 14 thereof, and applicable state and local
laws pertaining to child labor, minimum wage and overtime compensation, and, if
the merchandise is manufactured outside the United States, it will be
manufactured in compliance with the wage, overtime compensation, benefits, hour,
hiring and employment, workplace conditions and safety, environmental,
collective bargaining, freedom of association laws of the country of manufacture
and without the use of child (persons under the age of 15 or younger than the
age for completing compulsory education, if that age is higher than 15), prison,
indentured, exploited bonded, forced or slave labor; (2) we currently have in
effect and will maintain a program of monitoring all of our suppliers,
subcontractors, subcontract sewing shops and other designated contract
facilities producing Xxxxx Xxxxxxxx(R) brand merchandise for compliance with (1)
above; (3) we will obtain the signature of an authorized representative of our
suppliers, subcontractors, subcontract sewing shops and other designated
contract facilities producing Xxxxx Xxxxxxxx(R) brand merchandise on a current
supplier agreement, as provided by THUSA; and (4) within two (2) weeks of the
execution of this Certification, we will provide to THUSA the names and
addresses of all of our suppliers, subcontractors, subcontract sewing shops and
other designated contract facilities producing Xxxxx Xxxxxxxx(R) brand
merchandise under the Agreement and all such merchandise shall be manufactured
solely in factories (whether operated by our suppliers, subcontractors,
subcontract sewing shops or designated contract facilities) that have been
inspected and approved in writing by our authorized employee or agent; and (5)
all shipping documents which accompany all Xxxxx Xxxxxxxx(R) brand merchandise
will include the following language (either preprinted or "stamped"):
"We hereby certify that the merchandise (including components
thereof) covered by this shipment was, if manufactured in the
United States, in compliance with all applicable requirements
(1) of Sections 6, 7, and 12 of the Fair Labor Standards Act,
as amended and all regulations and orders of the United States
Department of Labor under Section 14 thereof; (2) state and
local laws pertaining to child labor, minimum wage and
overtime compensation; or if the merchandise was manufactured
outside the United States, in compliance with the wage and
hour laws of the country of manufacture and without the use of
child (persons under the age of 15 or
Addendum B
younger than the age for completing compulsory education, if that
age is higher than 15), prison, indentured, exploited bonded, forced
or slave labor; and for all merchandise, wherever manufactured, in
compliance with the Xxxxx Xxxxxxxx Supplier Code of Conduct. We
further certify that we have in effect a program of monitoring our
subcontractors and suppliers and other designated contract
facilities which manufacture Xxxxx Xxxxxxxx(R) brand merchandise
which is sufficient to ensure such entities' compliance with the
foregoing. We also certify that upon importation (if applicable)
this shipment is in compliance with all laws applicable to the
designation of country of origin and is being shipped under legally
issued and valid export license or visa."
II. Neither we, nor any of our subcontractors or suppliers, will in the
manufacture or treatment of any of the merchandise and Products (including the
components thereof) manufactured hereunder use any Azo dyes that can be split
into any of the following amines:
CAS # CAS #
4-Aminobiphenlyl 92-67-1 3,3'-Dimethoxybenzidine 119-90-4
Benzidine 92-87-5 3,3'-Dimethylbenzadine 119-93-7
4-Chloro-o-toluidine 95-69-2 3,3'-Dimethyl- 838-88-0
2-Naphthylamin 91-59-8 4,4'diaminodiphenylmethane
o-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
2-amino-4-nitrotoluol 99-55-8 4,4'Methaylen-bis-(2-chloranilin)101-14-4
p-Chloroaniline 106-47-8 4,4'Oxydianiline 101-80-4
2,4-Diaminoanisole 615-05-4 4,4'Thiodianiline 139-65-1
4,4'-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
3,3'-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
Aminoanabenzane 2,4,5-Trimethylaniline 137-17-7
o-Anisidine
and;
III. We, and our subcontractors or suppliers, will only use the following
chemicals in connection with the manufacture or treatment of any of the
merchandise and products (including the components thereof) manufactured
hereunder, in accordance with the following standards or any further standards
THUSA designates from time to time:
(i) Formaldehyde: Must be less than 300 p.p.m. when
tested in by the Acetylacetone method in accordance
with Japanese law 112.
(ii) Pentachlorophenol (Pesticides): Must be less than 5
p.p.m.
(iii) Nickel: In the event any metal parts of a garment or
other merchandise coming into contact with the skin,
contain nickel in excess of 0.5 micrograms per square
centimeter/week, Company must be so notified and special
warning labels need to be attached to the garment.
----------------------------------
[Name of your Company]
Date: _____________________ By:_______________________________
[Authorized Signature]
Print Name: _______________________
EXHIBIT E
XXXXX XXXXXXXX LICENSING, INC. PAGE_______OF ______
DATE________________
FORM MUST BE SUBMITTED COMPLETED SUBMIT TO THE ATTENTION OF:
XXXXX XXXXXXXX LICENSING, INC.
000 X. XXXXXX XXXXXX
XXXXXXXXXX, XXXXXXXX 00000
NAME OF
LICENSEE_______________________________________________________________
LICENSED
PRODUCT_______________________________________________________________
LICENSEE'S
ADDRESS_____________________________________________________________
EXPENDITURES REFLECT THE PERIOD _____ / _____ / _____ TO _____ /_____ /_____,
ALL TEARSHEETS AND ADVERTISING BILLS MUST ACCOMPANY THIS FORM.
DATE OF PUBLICATION OF DOLLAR AMOUNT
ADVERTISING TYPE OF ADVERTISING LICENSEE SPENT
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EXHIBIT F
ORGANIZATIONAL CHART
EXHIBIT G
CERTIFICATION
In consideration of ____________________ ("Company") placing orders for
the manufacture of Xxxxx Xxxxxxxx(R) brand merchandise with us in the future,
and in compliance with Company's Manufacturing Agreement with us (the
"Agreement"), we hereby certify that:
I. Any merchandise (including components thereof) we manufacture or cause
to be manufactured under the Agreement will be manufactured in compliance with:
(1) all applicable requirements of Sections 6, 7, and 12 of the Fair Labor
Standards Act, as amended, and all regulations and orders of the United States
Department of Labor under Section 14 thereof, and applicable state and local
laws pertaining to child labor, minimum wage and overtime compensation, and, if
the merchandise is manufactured outside the United States, it will be
manufactured in compliance with the wage, overtime compensation, benefits, hour,
hiring and employment, workplace conditions and safety, environmental,
collective bargaining, freedom of association laws of the country of manufacture
and without the use of child (persons under the age of 15 or younger than the
age for completing compulsory education, if that age is higher than 15), prison,
indentured, bonded, forced or slave labor; (2) we currently have in effect and
will maintain a program of monitoring all of our suppliers and subcontractors
and other designated contract facilities producing Xxxxx Xxxxxxxx(R) brand
merchandise for compliance with (1) above; (3) we will obtain the signature of
an authorized representative of (i) our subcontractors and other designated
contract facilities producing Xxxxx Xxxxxxxx(R) brand merchandise on a current
Manufacturing Agreement in the same form as that which we have executed with
Company and (i) our suppliers on a Certification in the same form as this
Certification; and (4) within two (2) weeks of the execution of this
Certification, we will provide to Company the names and addresses of all of our
suppliers, and subcontractors and other designated contract facilities producing
Xxxxx Xxxxxxxx(R) brand merchandise under the Agreement and all such merchandise
shall be manufactured solely in factories (whether operated by our suppliers,
subcontractors or other designated contract facilities) that have been inspected
and approved in writing by our authorized employee or agent; and (5) all
commercial invoices which accompany all Xxxxx Xxxxxxxx(R) brand merchandise will
include the following language (either preprinted or "stamped"):
"We hereby certify that the merchandise (including components thereof)
covered by this shipment was manufactured in compliance with (1) all
applicable requirements of Sections 6, 7, and 12 of the Fair Labor
Standards Act, as amended and all regulations and orders of the United
States Department of Labor under Section 14 thereof, and applicable state
and local laws pertaining to child labor, minimum wage and overtime
compensation, and, (2) if manufactured outside the United States, was
manufactured in compliance with all applicable requirements of the wage,
overtime compensation, benefits, hour, hiring and employment, workplace
conditions and safety, environmental, collective bargaining, freedom of
association laws of the country of manufacture and without the use of
child (persons under the age of 15 or younger than the age for completing
compulsory education, if that age is higher than 15), prison, indentured,
bonded, forced or slave labor. We further certify that we currently have
in effect a program of monitoring of our suppliers and subcontractors and
other designated contract facilities which manufacture Xxxxx Xxxxxxxx(R)
brand merchandise to ensure their compliance with the Fair Labor Standards
Act and all state, local and foreign laws pertaining to wages, overtime
compensation, benefits, hours, hiring and employment, workplace conditions
and safety, environmental, collective bargaining, freedom of association
and that their products or and the components thereof are made without the
use of child (persons under the age of 15 or younger than the age for
completing compulsory education, if that age is higher than 15), prison,
indentured, bonded, forced or slave labor. We also certify that upon
importation (if applicable) this shipment is in compliance with all laws
applicable to the designation of country of origin and is being shipped
under legally issued and valid export license or visa."
II. Neither we, nor any of our subcontractors or suppliers, will use
any of the following chemicals or dyestuffs in the manufacture or treatment
of any of the merchandise and Products (including the components thereof)
manufactured hereunder:
CAS # CAS #
4-Aminobiphenlyl 92-67-1 3,3'-Dimethoxybenzidine 119-90-4
Benzidine 92-875 3,3'-Dimethylbenzadine 119-93-7
4-Chloro-o-toluidine 95-69-2 3,3'-Dimethyl- 838-88-0
2-Naphthylamin 91-59-8 4,4'diaminodiphenylmethane
o-Aminoazotoluol 97-56-3 p-Kresidin 120-71-8
2-amino-4-nitrotoluol 99-55-8 4,4'Methaylen-bis-(2-chloranilin)101-14-4
p-Chloroaniline 106-47-8 4,4'Oxydianiline 101-80-4
2,4-Diaminoanisole 615-05-4 4,4'Thiodianiline 139-65-1
4,4'-Diaminodiphenylmethane 101-77-9 o-Toluidine 95-53-4
3,3'-Dichlorbenzidin 91-94-1 2,4-Toluylenediamine 95-80-7
Aminoanabenzane 2,4,5-Trimethylaniline 137-17-7
o-Anisidine
and;
III. We, and our subcontractors or suppliers, will only use the following
chemicals in connection with the manufacture or treatment of any of the
merchandise and products (including the components thereof) manufactured
hereunder, in accordance with the following standards or any further standards
Company and THLI designate from time to time:
(i) Formaldehyde: Must be less than 300 p.p.m. when
tested in by the Acetylacetone method in accordance
with Japanese law 112.
(ii) Pentachlorophenol (Pesticides): Must be less than 5
p.p.m.
(iii) Nickel: In the event any metal parts of a garment or
other merchandise coming into contact with the skin,
contain nickel in excess of 0.5 micrograms per square
centimeter/week, Company must so notified and special
warning labels need to be attached to the garment.
----------------------------------
[Name of your Company]
Date: _____________________ By:_______________________________
[Authorized Signature]
Print Name: _______________________
EXHIBIT H
Xxxxx Xxxxxxxx Corporation
Supplier Code of Conduct
We, at the Xxxxx Xxxxxxxx Corporation (hereinafter "Xxxxx Xxxxxxxx")
are proud of our tradition of conducting our business in accordance with the
highest ethical standards and in compliance with the laws of the United States
and of the countries in which we produce, buy and sell our products.
Xxxxx Xxxxxxxx is committed to legal compliance and ethical business
practices in all operations and seeks to do business with suppliers who share
that commitment. Xxxxx Xxxxxxxx actively seeks to engage as its suppliers,
companies which offer their workers safe and healthy workplaces.
Xxxxx Xxxxxxxx will not tolerate exploitative or abusive conditions once
known. The Xxxxx Xxxxxxxx Supplier Code of Conduct (hereinafter the "Code of
Conduct") defines our minimum expectations. No Code can be all inclusive, but we
expect our suppliers to act reasonably in all respects and to ensure that no
abusive, exploitative or illegal conditions exist at their workplaces.
Xxxxx Xxxxxxxx requires its suppliers to extend principles of fair and
honest dealing to all others with whom they do business, including employees,
subcontractors and other third parties. We also require our suppliers to ensure
and to certify to us that no abusive, exploitative or illegal conditions exist
at the workplaces of their suppliers and subcontractors.
Xxxxx Xxxxxxxx will only do business with suppliers who obey the laws of
the country in which they operate and the principles expressed in this Code of
Conduct.
Xxxxx Xxxxxxxx will only do business with suppliers who have certified to
us that their business practices are lawful, ethical and in compliance with the
principles set forth in this Code of Conduct. Moreover, Xxxxx Xxxxxxxx will only
do business with suppliers who have agreed to be subjected to the scrutiny of
the Xxxxx Xxxxxxxx Supplier Monitoring Program under which they will be
inspected and evaluated to ensure their compliance with this Code of Conduct.
Forced Labor: Xxxxx Xxxxxxxx will not purchase products or components
thereof from suppliers that use forced labor, prison labor, indentured labor or
exploited bonded labor, or permit their suppliers to do so.
Child Labor: Xxxxx Xxxxxxxx will not purchase products or components
thereof manufactured by persons younger than 15 years of age or younger than the
age of completing compulsory education in the country of manufacture where such
age is higher than 15.
EXHIBIT H
Harassment or Abuse: Xxxxx Xxxxxxxx suppliers and subcontractors must
treat their employees with respect and dignity. No employee shall be subject to
physical, sexual or psychological harassment or abuse.
Nondiscrimination: Xxxxx Xxxxxxxx suppliers and subcontractors shall not
subject any person to discrimination in employment, including hiring, salary,
benefits, advancement, discipline, termination or retirement, on the basis of
gender, race, religion, age, disability, sexual orientation, nationality,
political opinion, or social or ethnic origin.
Health and Safety: Xxxxx Xxxxxxxx suppliers and subcontractors shall
provide a safe and healthy working environment to prevent accidents and injury
to health arising out of, linked with, or occurring in the course of work or as
a result of the operation of employer facilities. Employers must fully comply
with all applicable workplace conditions, safety and environmental laws.
Freedom of Association: Xxxxx Xxxxxxxx suppliers and subcontractors shall
recognize and respect the right of employees to freely associate in accordance
with the laws of the countries in which they are employed.
Wages and Benefits: Xxxxx Xxxxxxxx suppliers and subcontractors recognize
that wages are essential to meeting employees' basic needs. Xxxxx Xxxxxxxx
suppliers and subcontractors shall pay employees at least the minimum wage
required by local law regardless of whether they pay by the piece or by the hour
and shall provide legally mandated benefits.
Work Hours: Xxxxx Xxxxxxxx suppliers and subcontractors shall not require
their employees to work more than the limits on regular and overtime hours
allowed by the law of the country of manufacture. Except under extraordinary
business circumstances, Xxxxx Xxxxxxxx suppliers' and subcontractors' employees
shall be entitled to one day off in every seven-day period. Xxxxx Xxxxxxxx
suppliers and subcontractors must inform their workers at the time of their
hiring if mandatory overtime is a condition of their employment. Xxxxx Xxxxxxxx
suppliers and subcontractors shall not compel their workers to work excessive
overtime hours.
Overtime Compensation: Xxxxx Xxxxxxxx suppliers' and subcontractors'
employees, shall be compensated for overtime hours at such premium rate as is
legally required in the country of manufacture or, in countries where such laws
do not exist, at a rate at least equal to their regular hourly compensation
rate.
Contract Labor: Xxxxx Xxxxxxxx suppliers or subcontractors shall not use
workers obligated under contracts which exploit them, which deny them the basic
legal rights available to people and to workers within the countries in which
they work or which are inconsistent with the principles set forth in this Code
of Conduct
Legal and Ethical Business Practices: Xxxxx Xxxxxxxx suppliers and
subcontractors must fully comply with all applicable local, state, federal,
national and international laws, rules and regulations including, but not
limited to, those relating to wages, hours, labor, health and safety, and
immigration. Xxxxx Xxxxxxxx suppliers and subcontractors must be ethical in
their business practices.
Penalties: Xxxxx Xxxxxxxx reserves the right to terminate its business
relationship with any supplier who violates this Code of Conduct or whose
suppliers or subcontractors violate this Code of Conduct.
Xxxxx Xxxxxxxx reserves the right to terminate its business relationship
with suppliers who fail to provide written confirmation to Xxxxx Xxxxxxxx that
they have a program in place to monitor their suppliers and subcontractors for
compliance with this Code of Conduct.
SCHEDULE 2.7(b)
January 20, 1999
Xx. Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx USA, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxx,
This letter is to confirm our agreement to occupy showroom space on the 3rd
floor of 00 Xxxx 00xx Xxxxxx. We will pay for the build-out and annual rental on
spaces 104 and 105 as shown on the floor finish plan labeled A-103 per the
following terms and conditions.
o Showroom Space Square Footage - 514 sf.
o Allocated Common Area Square Footage - 514 sf.
o Build-out Cost - $200 sf on showroom and common area sf including
furniture and sufficient fixturing to display entire Spring and Fall sku
product line.
o Furnishings (art work, graphics, etc) - our share approx. $15,000
one-time charge.
o Other space square footage that rent applies to - approx. 200 sf.
o Total square footage that rent applies to - 1,228 sf.
o Annual rent - $40 sf including base, electric, taxes, xxxxxx rages,
security.
Other Conditions:
o Need to work with the architect in making separation between two showrooms
and any fixturing against the separator movable so we can utilize entire
space as one room if necessary.
o Need to furnish the showroom with furniture and fixturing that "fit" the
tight confines of the space yet provide maximum seating and sku capacity.
o Need to review final TH USA "lease" terms sheet prior to giving final
approval.
Please forward the terms sheet at your earliest convenience.
Regards,
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xx. VP Finance & Operations
