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LICENSE AGREEMENT
BETWEEN
XXXXXX XXXXXX, LTD.
AND
XXXXX INDUSTRIES, INC.
DATED AS OF
JUNE 1, 1997
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TABLE OF CONTENTS
PAGE
1. GRANT OF LICENSE..................................................1
x. XXXXX:...................................................1
b. TERM:....................................................2
c. TERRITORY:...............................................3
d. CHANNELS OF DISTRIBUTION:................................3
e. MINIMUM NET SALES: .....................................3
2. COVENANTS OF LICENSEE.............................................3
a. USE:.....................................................3
b. EFFORTS..................................................4
c. REPRESENTATIONS AND WARRANTIES OF LICENSEE...............5
3. COVENANTS OF LICENSOR.............................................6
4. TRADEMARK ROYALTY.................................................7
a. GUARANTEED ROYALTY:......................................7
b. RENEWAL TERM:............................................7
c. EARNED ROYALTY:..........................................7
d. STATEMENTS: ............................................8
5. BOOKS AND RECORDS; AUDITS.........................................8
6. LICENSING MEETINGS................................................9
7. APPROVAL OF ARTICLES AND PACKAGING AND RELATED MATERIALS..........9
8. THE LICENSED XXXX................................................10
9. RIGHT TO SUBCONTRACT AND LISTS OF SOURCES AND CUSTOMERS:.........11
10. COMPETITIVE BRANDS:..............................................12
11. ADVERTISING......................................................12
a. ADVERTISING FEE:........................................12
b. COOPERATIVE ADVERTISING:................................12
12. INDEMNITY; INSURANCE.............................................13
13. DEFAULT..........................................................13
14. RIGHTS ON EXPIRATION OR TERMINATION..............................15
15. FORCE MAJEURE....................................................16
16. NOTICE...........................................................16
17. ASSIGNABILITY....................................................17
18. NO JOINT VENTURE.................................................17
19. BINDING EFFECT...................................................17
20. ARBITRATION......................................................17
21. FUTURE LICENSES..................................................18
22. APPLICABLE LAW...................................................18
23. NO WAIVER........................................................18
24. INVALIDITY.......................................................19
25. ENTIRE AGREEMENT.................................................19
26. CONFIDENTIALITY..................................................19
THE SCHEDULE REFERRED TO IN THE AGREEMENT DATED AS OF JUNE 1, 1997.
S.1. THE LICENSOR: XXXXXX XXXXXX, LTD.
00-00 XXXXXXX XXXXXX
XXXX XXXXXX XXXX, XX 00000
S.2. THE LICENSEE: XXXXX INDUSTRIES, INC.
000 XXXXX XXXXXX
XXXXXXXX, XX 00000
S.3. THE LICENSED XXXX: XXXXX XXXXXX
S.4. THE TYPE OF LICENSE: EXCLUSIVE
S.5. THE USE OF THE TRADEMARKS: DESIGN, MANUFACTURE, ADVERTISE, SELL AND
DISTRIBUTE.
S.6. THE PRODUCTS: JUNIOR AND YOUNG CONTEMPORARY SPORTSWEAR, ALL KNIT AND
WOVEN TOPS, BOTTOMS, AND DRESSES OF ALL FABRICATIONS AND CONSTRUCTIONS,
INCLUDING JEANSWEAR (EXCLUDING OUTERWEAR AND BODYWEAR SOLD TO THE
BODYWEAR DEPARTMENT)
S.7. THE TERRITORY: THE UNITED STATES, ITS POSSESSIONS AND TERRITORIES
S.8. THE COMMENCEMENT DATE: 6/1/97
THE EXPIRATION DATE: 9/30/00
RENEWAL: TWO ADDITIONAL THREE (3) YEAR TERMS; AUTOMATIC OPTION TO RENEW
IF LICENSEE HAS MINIMUM NET SALES OF $4,000,000 DURING THE SIX MONTH
PERIOD COMMENCING OCTOBER 1, 1999 AND ENDING MARCH 31, 2000; AUTOMATIC
OPTION TO RENEW IF LICENSEE HAS MINIMUM NET SALES OF $6,000,000 DURING
THE SIX MONTH PERIOD COMMENCING OCTOBER 1, 2002 AND ENDING MARCH 31,
2003
S.9. THE GUARANTEED ROYALTY:
LICENSE YEAR 1 $150,000
(16 MONTHS)
ADVANCE UPON EXECUTION: $15,000
FOUR CALENDAR QUARTERLY PAYMENTS OF $33,750, BEGINNING 1/1/98
LICENSE YEAR 2 $225,000
FOUR QUARTERLY PAYMENTS OF $56,250
LICENSE YEAR 3 $300,000
FOUR QUARTERLY PAYMENTS OF $75,000
LICENSE YEAR 4 $350,000
FOUR QUARTERLY PAYMENTS OF $87,500
LICENSE YEAR 5 $450,000
FOUR QUARTERLY PAYMENTS OF $112,000
LICENSE YEAR 6 $500,000
FOUR QUARTERLY PAYMENTS OF $125,000
LICENSE YEAR 7 $750,000
FOUR QUARTERLY PAYMENTS OF $187,500
LICENSE YEAR 8 $750,000
FOUR QUARTERLY PAYMENTS OF $187,500
LICENSE YEAR 9 $750,000
FOUR QUARTERLY PAYMENTS OF $187,500
S.10. THE EARNED ROYALTY: FIVE PERCENT (5%) OF NET SALES
S 11. THE MINIMUM NET SALES:
LICENSE YEAR 1 $ 3,000,000
LICENSE YEAR 2 $ 4,500,000
LICENSE YEAR 3 $ 6,000,000
LICENSE YEAR 4 $ 7,000,000
LICENSE YEAR 5 $ 9,000,000
LICENSE YEAR 6 $ 10,000,000
LICENSE YEAR 7 $ 15,000,000
LICENSE YEAR 8 $ 15,000,000
S.12. THE ADVERTISING ROYALTY: TWO (2%) OF NET SALES
XXXXXX XXXXXX, LTD.
BY:_____________________________
NAME:
TITLE:
XXXXX INDUSTRIES, INC.
BY:_____________________________
NAME:
TITLE:
LICENSE AGREEMENT
BETWEEN
XXXXXX XXXXXX, LTD.
AND
XXXXX INDUSTRIES, INC.
This Agreement is made as of the 1st day of May 1997, between
Xxxxxx Xxxxxx, Ltd., a New York corporation, with offices at 00-00 Xxxxxxx
Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000 (hereinafter called "Licensor") and Xxxxx
Industries, Inc., a Delaware corporation, with offices at 000 Xxxxx Xxxxxx,
Xxxxxxxx, XX 00000 (hereinafter called "Licensee").
WHEREAS, Licensor has certain rights to the trademark
identified in Paragraph S.3. of the schedule attached hereto and made a part
hereof (the "Schedule"; such trademark, including all rights associated
therewith shall hereinafter be referred to as the "Licensed Xxxx"); and
WHEREAS, Licensee recognizes that the Licensed Xxxx has
acquired notoriety and goodwill with the general public by virtue of its use in
connection with the manufacture, advertisement, distribution and sales of
footwear products and accessories; and
WHEREAS, Licensee desires to obtain an exclusive right to use
the Licensed Xxxx in connection with the design, manufacture and sale of the
Articles (as hereinafter defined), and Licensor is willing to grant to Licensee
such license under the terms and conditions hereinafter specifically set forth;
and
WHEREAS, Licensee acknowledges that the Licensed Xxxx and its
related goodwill and business are of great significance and value to Licensor
and the Licensee's strict adherence to the quality control standards and other
requirements provided in this Agreement are essential to the maintenance of the
significance and value of the Licensed Xxxx and related goodwill and business;
and
WHEREAS, Licensee pledges its cooperation in the maintenance
and enhancement of the value and significance of the Licensed Xxxx throughout
the world.
NOW, THEREFORE, in consideration of the mutual promises
herein, it is mutually agreed as follows:
1. GRANT OF LICENSE.
x. XXXXX:
1
(i) Upon and subject to the terms and conditions
hereinafter set forth, Licensor hereby grants to Licensee, and
Licensee hereby accepts, the right, license and privilege
specified in Paragraph S.4. of the Schedule to use the
Licensed Xxxx in connection with, and only with, the use,
specified in Paragraph S.5. of the Schedule of specifically
the designated and approved products specified in Paragraph
S.6. of the Schedule (such products hereinafter shall be
called the "Products" and Products bearing the Licensed Xxxx
hereinafter are collectively called "Articles") in the
territory specified in Paragraph S.7. of the Schedule
(hereinafter called the "Territory"). It is understood and
agreed that while the manufacture of the Articles may take
place outside the Territory, no Articles may be advertised or
sold outside the Territory. Advertisements within the
Territory that are subject to incidental dissemination outside
the Territory, such as newspapers delivered at resorts, shall
not be deemed a violation so long as all advertising has
received prior written approval of Licensor in accordance with
paragraph 7 and all sales are strictly limited to the
Territory by Licensor.
(ii) Except as set forth in paragraph 21, nothing
contained in this Agreement shall prevent Licensor from (a)
using or granting others the right or license to use the
Licensed Xxxx or any other marks owned by Licensor or its
affiliates on or in connection with Products in any area of
the world (other than the Territory with respect to Articles)
or on or in connection with any goods other than Products in
any area of the world including the Territory, or (b)
manufacturing or having manufactured in the Territory Products
bearing any xxxx, including the Licensed Xxxx, for sale
outside the Territory.
b. TERM:
(i) The term of this Agreement shall commence on the
date specified in Paragraph S.8. of the Schedule (hereinafter
called "Commencement Date") and shall expire on the date
specified in Paragraph S.8. of the Schedule as the "Expiration
Date," unless sooner terminated as provided under this
Agreement or renewed as hereinafter provided.
(ii) This Agreement shall be renewed automatically
for one (1) additional term of three (3) years (the "First
Renewal Term") unless Licensee gives Licensor written notice
not later than six (6) months prior to the end of the initial
term, that it does not wish the Agreement to be renewed;
provided, however, that the renewal of this Agreement shall be
effective only if Licensee is not in default hereunder on the
last day of the initial term and Licensee's Net Sales (as
defined in paragraph 4.c (iii) below) for the six (6) month
period commencing on October 1, 1999 and ending on March 31,
2000 are not less than $4,000,000. This Agreement shall be
renewed automatically for one (1) additional term of three (3)
years (the "Second Renewal Term") unless Licensee gives
Licensor written notice not later than six (6) months prior to
the end of the First Renewal Term, that it does not wish the
Agreement to be renewed; PROVIDED, HOWEVER, that the renewal
of this Agreement shall be effective only if Licensee is not
in default hereunder on the last day of the First Renewal Term
and Licensee's Net Sales for the six (6) month period
commencing on October 1, 2002 and ending on March 31, 2003 are
not less than
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$6,000,000. The sixteen (16) month period commencing on
Commencement Date and each twelve (12) month period commencing
on each July 1 thereafter during the term of this Agreement
shall constitute and shall be referred to herein as a "License
Year."
c. TERRITORY:
This Agreement shall cover only the Territory and the
use by Licensee of the Licensed Xxxx shall be confined to the
Territory, except as provided in the last sentence of
Paragraph 1.a.(i) hereof.
d. CHANNELS OF DISTRIBUTION:
Licensee may, without the prior written consent of
Licensor, sell the Articles only through the following
channels of distribution: better department stores, better
speciality and junior chains, duty-free stores, better
catalogs, college campus stores, direct sales from cable
television advertising, Licensee's retail stores and web site,
and discontinued and closeout merchandise only to Off-Price
Retailers (as hereinafter defined) (collectively, the
"Channels of Distribution"). "Off-Price Retailers" shall mean
any major retail store which sells national name brand
products for substantially less than the prices charged by
major department stores. In the event that Licensor commences
the sale of its footwear products to retailers outside the
Channels of Distribution on a regular and on-going basis,
Licensee shall be permitted to sell the Articles to the same
retailers on a regular and on-going basis.
e. MINIMUM NET SALES:
Anything in this Agreement to the contrary
notwithstanding, if Licensee's Net Sales in any License Year
shall be less than ninety five percent (95%) of the Minimum
Net Sales as provided in paragraph S.11 of the Schedule for
such License Year, then Licensor shall have the right to
terminate this Agreement by notifying Licensee of its election
to terminate within thirty (30) days after Licensor's receipt
of the final quarterly statement for such License Year for
which Minimum Net Sales were not attained. Such termination
shall have no effect upon the amounts due and payable to
Licensor for periods prior to or after termination.
2. COVENANTS OF LICENSEE.
a. USE:
(i) Subject to Licensor's prior approval as
hereinafter provided, Licensee shall commence the manufacture,
sale and distribution of all of the various types of Products
as soon as practicable after the Commencement Date. If
Licensee has not commenced and is not continuing the sale of
each such type of Products by May 31, 1998 (subject to
temporary discontinuation of some Articles resulting from
seasonal changes in the business), Licensor may delete such
type of Products from the definition of "Products" hereunder
upon written notice thereof
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to Licensee. If, during any License Year, Licensee has not
offered for sale any specific type of Products, Licensor may
delete any such type of Products from the definition of
"Products" hereunder upon written notice to Licensee given
within thirty (30) days after the end of any such License
Year. In addition, if Licensee fails to generate at least
$500,000 in Net Sales from the sale of jeanswear products by
the end of License Year 2, jeanswear may be deleted from the
definition of Products. If Licensee fails to have Net Sales of
at least $1,000,000 from the sale of dresses during any
License Year, then Licensor may delete dresses from the
definition of Products. If any type of Products is so deleted
from the definition of "Products," all rights with respect to
the use of the Licensed Xxxx in connection with such Products
shall revert to Licensor which then may exercise such rights
in any manner it desires.
(ii) Within the Channels of Distribution, Licensee
shall sell the Articles to retailers for sale or resale and
distribution directly to the public. If Licensee sells or
distributes the Articles at a special price, directly or
indirectly, to itself, including without limitation, any
subsidiary of Licensee or to any other person, firm, or
corporation affiliated with Licensee or its officers,
directors or major stockholders, for ultimate sale to
unrelated third parties, Licensee shall pay royalties with
respect to such sales or distribution, based upon the price
generally charged to the trade by Licensee. Licensee shall not
cause or authorize any use of the Licensed Xxxx in any area of
the world outside the Territory and shall not knowingly
manufacture, sell or otherwise deal with or distribute any of
the Articles on behalf of, or to, any person, firm or
corporation that Licensee believes or has reason to believe
intends, or is likely, to deal with the same in any way
outside the Territory.
(iii) Licensee, hereby acknowledges that due to the
nature of the industry, precise definition of Products is
sometimes not possible. Accordingly, in the event of any
dispute between Licensee and any other licensee of Licensor in
the Territory with respect to the products covered by their
respective licenses, such dispute shall be mediated in good
faith by Licensor. Licensor's determination shall be final and
binding; provided however, that the definition of "Products"
shall not be amended or modified without Licensee's prior
written consent which consent will not be unreasonably
withheld or delayed.
b. EFFORTS.
(i) Licensee shall, throughout the term of the
Agreement and as permitted by this Agreement, constantly use
its best efforts in the selling, distributing and promoting
and any other dealing with or disposal of Articles to protect
the good name and goodwill associated with the Licensed Xxxx
and Licensor and to obtain the greatest number of sales of
Articles throughout the Territory during the entire term of
this Agreement. Licensee shall be responsible for and shall
assume and pay for all costs and expenses related to the
design, manufacture, advertising, promotion and sale of
Articles.
(ii) Licensee shall use its best efforts to solicit
sales from a broad and varied account base during the term of
this Agreement, and in no event shall
4
Licensee sell on an exclusive basis to one retailer without
first obtaining Licensor's written permission.
(iii) Upon request by Licensor, Licensee shall supply
Articles and displays to Licensor for sale by Licensor (or an
Affiliate thereof) in retail stores. In allocating Articles
and displays, Licensee shall provide Articles and displays to
Licensor as if Licensor was a best, or most favored customer
account of Licensee. Such Articles and displays shall be sold
to Licensor (or an Affiliate thereof) at a price equal to
Licensee's wholesale price for such Articles and/or displays
less twenty five percent (25%) of such price. All such sales
shall be credited against the Minimum Net Sales requirements
as if sold without the twenty five percent (25%) discount.
Licensor agrees to pay for Articles within thirty (30) days
following receipt by Licensor of an invoice therefor. No
Earned Royalty or Advertising Royalty shall be due with
respect to sales to Licensor. Licensor agrees that it shall
not sell any Products, other than the Articles in its retail
or any outlet stores.
c. REPRESENTATIONS AND WARRANTIES OF LICENSEE.
Licensee represents and warrants to Licensor that
during the term of this Agreement and thereafter:
(i) It has, and will continue to have throughout the
entire term of this Agreement, the legal right to enter into
this Agreement and to assume the obligations hereunder and
that there are no, and Licensee shall not enter into during
the term hereof, contracts, agreements or understandings with
anyone which would in any way restrict or prevent it from
performing its obligations under this Agreement.
(ii) It will not attack the title of Licensor in and
to the Licensed Xxxx or any copyright or trademark pertaining
thereto, nor will it attack the validity of the license
granted hereunder;
(iii) It will not harm, misuse or bring into
disrepute the Licensed Xxxx, but on the contrary, will
maintain the value and reputation thereof to the best of its
ability;
(iv) It will manufacture, sell, promote and
distribute the Articles in an ethical manner and in accordance
with the terms and intent of this Agreement, and in compliance
with all applicable material government regulations and
industry standards;
(v) It will not create any expenses chargeable to
Licensor without the prior written approval of Licensor;
(vi) It will at all times comply with all material
government laws and regulations, including but not limited to
product safety, food, health, drug, cosmetic, sanitary or
other similar laws, and all industry standards relating or
pertaining to the
5
manufacture, sale, advertising or use of the Articles, and
shall maintain its appropriate customary high quality
standards. It shall comply with all material regulations of
regulatory agencies which shall have jurisdiction over the
Articles and shall procure and maintain in force any and all
permissions, certifications and/or other authorizations from
governmental and/or other official authorities that may be
required in relation thereto. Each Article and component
thereof distributed hereunder shall comply with all material
applicable laws, regulations and industry standards. Licensee
shall follow reasonable and proper procedures for testing that
all Articles comply with such laws, regulations and standards.
Upon reasonable notice, Licensee shall permit Licensor or its
designees to inspect testing records and procedures with
respect to the Articles for compliance. Articles that do not
comply with all material applicable laws, regulations and
standards shall automatically be deemed unapproved and
Licensee shall upon notification of noncompliance immediately
cease manufacturing distributing, selling and marketing such
Articles until Licensee and/or the Articles complies with such
laws, regulations and standards;
(vii) It will provide Licensor with the date(s) of
first use of the Articles in interstate and intrastate
commerce, where appropriate;
(viii) It will, pursuant to Licensor's instructions,
duly take any and all necessary steps to secure execution of
all necessary documentation for the recordation of itself as
user of the Property in any jurisdiction where this is
required or where Licensor reasonably requests that such
recordation shall be effected. Licensee further agrees that it
will at its own expense cooperate with Licensor in
cancellation of any such recordation at the expiration of this
Agreement or upon termination of Licensee's right to use the
Property. Licensee hereby appoints Licensor its
Attorney-in-fact for such purpose and for no other purpose;
and
(ix) It will not deliver or sell Articles outside the
Territory or knowingly sell Articles to a third party for
delivery outside the Territory.
(x) Licensee agrees to attend at its sole expense and
participate at the annual tradeshows in Las Vegas, known as
the Magic Show, with Licensor for promotion of the Articles.
Further, Licensee agrees to pay Licensor charges and expenses
related to the booth space used to promote the Articles.
(xi) Licensee shall at it's sole expense launch the
introduction of the Articles with a fashion show reasonably
acceptable to Licensor and at a cost reasonably acceptable to
Licensee.
(xii) Licensee shall hire or retain sales executives
and fashion designers exclusively for the sale and design of
the Articles. Prior to hiring fashion designer(s), Licensee
shall confer with Licensor. Nothing herein shall limit
Licensee's right to direct its regular sales personnel and
designers from participating in the sale and design of the
Articles, where appropriate.
6
(xiii) Licensee shall maintain a separate showroom
for the Articles which maintains the image of the Licensed
Xxxx and is reasonably acceptable to the Licensor.
3. COVENANTS OF LICENSOR. Licensor represents and warrants to
Licensee that, during the term of this Agreement:
(i) It has, and will continue to have, the legal
right to enter into this Agreement and to assume the
obligations hereunder and that there are no, and Licensor
shall not enter into during the term hereof, contracts,
agreements or understandings with anyone which would in any
way restrict or prevent it from performing its obligations
under this Agreement, including without limitation, any
agreement pursuant to which Licensor grants with respect to
the Products a license for a trademark to a third party which
is confusingly similar to the Licensed Xxxx;
(ii) It will not harm, misuse or bring into disrepute
the Licensed Xxxx, but on the contrary, will maintain the
value and reputation thereof to the best of its ability;
(iii) It will not create any expenses chargeable to
Licensee without the prior written approval of Licensee,
except for expenses incurred pursuant to paragraph 2.c.(x) by
Licensor for tradeshows which Licensee shall promptly
reimburse Licensor for Licensee's proportionate share of such
expenses;
(iv) To the best of its knowledge (i) it is the sole
and exclusive owner of and has good title to the Licensed Xxxx
with respect to the Articles, it has the full and sufficient
right and authority to grant to Licensee the rights and
privileges granted hereby; (ii) the Licensed Xxxx with respect
to the Articles has not been used under circumstances that
have caused the loss of the rights therein; (iii) the Licensed
Xxxx with respect to Articles does not infringe upon or
interfere with any trademark, trade dress, trade secret or
other intellectual property right of any third party; (iv)
Licensor is not aware of any claim or assertion that the
Licensed Xxxx with respect to Articles infringes upon or
interferes with any trade dress, trade secret or other
intellectual property right of any third party, and in the
event that a material claim is asserted, Licensor agrees to
vigorously defend such claim; and (v) it has not granted any
option, right, privileges or license to any third parties
which interfere or conflict with the rights and privileges
granted to Licensee hereby;
(v) During the term of this Agreement, it shall not
market, sell or distribute, nor license any third party to
market, sell or distribute, the Products to retail customers
in the Territory bearing the Licensed Xxxx, except as provided
in this Agreement; and
(vi) A breach of a material covenant contained in
this Section 3 shall entitle Licensee to terminate this
Agreement upon thirty (30) days prior written notice to
Licensor. In the event that Licensor fails to cure such breach
within such thirty (30) day period, this Agreement shall
terminate and Licensor shall indemnify Licensee for all costs
and expenses actually incurred by Licensee resulting from
7
Licensor's breach under this paragraph 3. In no event shall
Licensee be entitled to receive special or consequential
damages (including lost profits) for Licensor's breach
hereunder.
4. TRADEMARK ROYALTY.
a. GUARANTEED ROYALTY:
The first term of this Agreement will consist of one
(1) sixteen (16) month and two twelve (12) month periods.
Licensee shall pay a guaranteed minimum trademark royalty
("Guaranteed Royalty") of $150,000 for the first License Year
as follows: $15,000 upon the signing of this Agreement; and
$135,000 in four (4) consecutive equal quarterly installments
of $33,750 payable on the first day of each calender quarter
commencing January 1, 1998. The Guaranteed Royalty for each
subsequent License Year shall be payable in four (4)
consecutive equal quarterly installments on the first day of
each calender quarter during each such License Year as set
forth in paragraph S.9 of the Schedule.
b. RENEWAL TERMS:
Licensee shall pay a guaranteed minimum trademark
royalty for License Years 4 through 7 as set forth in
Paragraph S.11 of the Schedule. The Guaranteed Royalty for a
License Year will credited only against Earned Royalty during
the same License Year.
c. EARNED ROYALTY:
(i) In consideration of the license granted and the
marketing services to be performed by Licensor hereunder,
Licensee shall pay to Licensor a royalty equal to five percent
(5%) of Net Sales ("Earned Royalty").
(ii) The Earned Royalty hereunder shall be accounted
for and paid quarterly within thirty (30) days after the close
of each quarter during each term of this Agreement (or portion
thereof in the event of prior termination for any reason). The
Earned Royalty payable for each quarter during each License
Year shall be computed on the basis of Net Sales during such
quarter, with a credit for any Guaranteed Royalty and Earned
Royalty payments theretofore made to Licensor for said License
Year. No payment of Earned Royalty for any License Year in
excess of payments of Guaranteed Royalty for the same License
Year shall be credited against the Guaranteed Royalty due to
Licensor for any other License Year.
(iii) As used in this Agreement, the term "Net Sales"
means the invoice price charged by Licensee for Articles
shipped by Licensee less (w) refunds, credits and allowances
actually allowed to customers for returned Articles unrelated
to xxxx-xxxxx and advertising, (x) customary and usual trade
discounts (including volume discounts, warehouse allowances,
new store discounts, but excluding anticipation discounts,
which shall not exceed eight (8%) percent of the
8
wholesale price, (y) discounts resulting from requests by
retailers to increase the wholesale price typically charged to
similar customers (the "Wholesale Price") so that a discount
can be given off such increased wholesale price (an "Inflated
Discount"), such Inflated Discount not to exceed 8% of the
Wholesale Price) afforded to and actually taken by customers
against payment for Articles, and (z) taxes and freight
separately listed.
d. STATEMENTS:
Within thirty (30) days after the end of each quarter
during each License Year, Licensee shall furnish to Licensor
or its nominee a complete and accurate statement as identified
in Exhibit "A" in a form acceptable to Licensor and certified
to be true by the Chief Financial Officer of Licensee showing
for the preceding quarter and the License Year through such
quarter: a listing of Licensee's accounts in the Territory and
the units and description of all of Articles distributed and
sold to each such account or otherwise disposed of by
Licensee; the computation of Net Sales on all such sales; and
the amount of Earned Royalties due and payable thereon in
accordance with the provisions of Paragraph 4.c. hereof.
5. BOOKS AND RECORDS; AUDITS.
a. Licensee shall prepare and maintain complete and
accurate books of account and records covering all
transactions arising out of or relating to this Agreement.
Licensor and its duly authorized representatives have the
right, during regular business hours but not more often than
twice during any License Year for the duration of this
Agreement and for three (3) years thereafter, to audit said
books of account and records and examine all other documents
and material in the possession or under the control of
Licensee with respect to the subject matter and the terms of
this Agreement. Licensor shall use its best efforts to conduct
such audit in manner as not to interfere with Licensee's
normal business activities. Licensor and each auditor acting
on its behalf shall treat all information as confidential.
b. If, as a result of any audit of Licensee's books
and records, it is shown that Licensee's payments to Licensor
were less than the amount which should have been paid,
Licensee shall make all payments required to be made to
eliminate any discrepancy revealed by said audit within thirty
(30) days after Licensor's demand therefor and, if the
shortfall for any License Year is shown to be in an amount
equal to five percent (5%) or more of the payments actually
made with respect to sales occurring during such License Year,
Licensee shall reimburse Licensor for the cost of such audit.
6. LICENSING MEETINGS.
Licensee agrees to attend licensing meetings at Licensee's
cost and expense which will be held no more than four times a year.
7. APPROVAL OF ARTICLES AND PACKAGING AND RELATED MATERIALS.
9
a. The contents and workmanship of Articles shall be
at all times of High Quality (as hereinafter defined) and
Articles shall be distributed and sold with packaging and
sales promotion materials appropriate for such Products. The
styles, designs, packaging, contents, workmanship and quality
of all Articles must be approved by Licensor in writing prior
to the distribution or sale thereof, unless such styles,
designs, packaging, contents, workmanship and quality do not
vary materially from styles, designs, packaging, contents,
workmanship and quality previously approved in writing by
Licensor. Licensor has the right to take all reasonable
actions which it deems necessary to ensure that Articles
manufactured or sold hereunder are consistent with the
reputation and prestige of the Licensed Xxxx as a designation
for high quality products. "High Quality" means the highest
quality available given the price point of the Articles. In
order to insure that the Articles are of a High Quality,
Licensee shall deliver one (1) garment from each style to
Licensor.
b. Licensee understands and agrees that all Articles
and other items bearing the Licensed Xxxx or intended for use
in connection with Articles (including, but not limited to,
cartons, containers, labels, wrappers, packages and other
inner and outer packaging materials, fixtures, displays,
artwork, printing, advertising, sales, marketing and
promotional materials - collectively hereinafter called
"Packaging and Related Materials") must be approved in writing
in advance by Licensor or its nominee which approval shall not
be unreasonably withheld or delayed. Licensee shall submit or
make available to Licensor, for Licensor's review all initial
sketches or photographs and for Licensor's prior written
approval, samples, prototypes or equivalents of the Articles
and Packaging and Related Materials and actual manufactured or
produced Articles and Packaging and Related Materials in its
final form (collectively, "Final Goods") as intended to be
sold or used by Licensee in connection with Articles, as the
case may be; provided however, that Licensor may not withhold
its approval of Final Goods in the event that they are
substantially similar to the prototypes previously submitted
to Licensor. In the event Licensor fails to signify its
approval or disapproval of any Article or Packaging and
Related Material within five (5) days of Licensor's receipt of
same, Licensor shall be deemed to have approved same.
Nonmaterial changes to previously approved Articles (such as
the addition of a new color) shall not require the prior
written approval of Licensor.
c. To ensure that all Articles and Packaging and
Related Materials are constantly maintained in conformance
with the previously approved samples, Licensee shall, within
seven (7) days of a demand from Licensor, dispatch to
Licensor, at Licensee's expense, for inspection, reasonably
representative samples of Articles and Packaging and Related
Materials that Licensee is using, manufac turing, selling,
distributing or otherwise disposing of under the terms of this
Agreement. In addition, Licensee shall take such action as may
be reasonably required to ensure that Licensor and its
designated agents and representatives shall have the right to
enter upon and inspect, at all reasonable hours in the day but
upon reasonable advance notice, any office, factory, warehouse
or other facility where any Articles or Packaging and Related
Materials are designed, manufactured, stored or otherwise
dealt with and to take, without payment, such samples of
10
Articles and Packaging and Related Materials as Licensor
reasonably requires for the purpose of inspection.
d. Articles and Packaging and Related Materials that
are not approved by Licensor shall not be sold, distributed or
otherwise dealt with by Licensee unless the Licensed Xxxx is
removed to the satisfaction of Licensor. If the Licensed Xxxx
cannot be removed to the reasonable satisfaction of Licensor,
all such Articles and Packaging and Related Materials shall be
destroyed by Licensee with, if Licensor so requests, an
appropriate certificate of destruction provided to Licensor.
Sales or use by Licensee of unapproved Articles or Packaging
and Related Materials shall constitute an incurable event of
default by Licensee under this Agreement.
8. THE LICENSED XXXX.
a. Licensee shall not use the Licensed Xxxx, in whole
or in part, as a corporate name or trade name. Licensee shall
not join any name or names with the Licensed Xxxx so as to
form a new xxxx, except that during the term of this Agreement
Licensee may conduct business contemplated by this Agreement
under the name "Xxxxx Xxxxxx Sportswear". Except as provided
herein, Licensee shall not use any name or names in connection
with the Licensed Xxxx in any advertising, publicity,
labeling, packaging or printed matter of any kind utilized by
Licensee in connection with Articles, unless and until
Licensor consents thereto in writing.
b. Licensee shall:
(i) use the Licensed Xxxx in the Territory strictly
in accordance with the legal requirements obtaining therein.
Licensee shall cooperate fully with Licensor in preparing and
causing to be recorded in every jurisdiction where applicable
Registered User agreements and all other documents which may
be necessary or desirable to evidence, protect and implement
the rights of Licensor pursuant to this Agreement. Upon
expiration or termination of this Agreement for any reason
whatsoever, Licensee shall execute and file documents, as
required by Licensor, terminating any and all Registered User
agreements and other documents regarding the Licensed Xxxx or,
at Licensor's option shall, and hereby does, authorize and
empower Licensor to terminate all Registered User or other
documents regarding the Licensed Xxxx on Licensee's behalf and
in Licensee's name.
(ii) in the event any designs developed by Licensor
for Articles may be made the subject of patent, trademark or
copyright protection, Licensor shall have the right, at its
own expense, to file applications therefor, and shall be the
exclusive owner of such rights. Licensee shall cooperate with
Licensor or its designers in obtaining and perfecting such
rights including providing Licensor or its designers with
copies of documents, sketches, renderings or the like normally
prepared by Licensee in connection with the manufacture of
Articles and executing such documents as may reasonably be
required.
11
(iii) affix to all Articles and Packaging and Related
Material such trademark and copyright notices as Licensor
reasonably may direct;
(iv) manufacture, sell, distribute or otherwise deal
with Packaging and Related Materials solely in connection with
Articles; and
(v) not cause or grant permission to any third
parties to acquire any copyright or other proprietary right in
connection with any word, device, design or symbol used by
Licensee in connection with any Articles or Packaging and
Related Materials.
c. Licensee acknowledges that, as between Licensor
and Licensee, Licensor is the owner of all right, title and
interest in and to the Licensed Xxxx in the Territory in any
form or embodiment thereof and is also the owner of the
goodwill attached or which shall become attached to the
Licensed Xxxx in connection with the business and goods in
relation to which the same has been, is or shall be used.
Sales by Licensee shall be deemed to have been made by
Licensor for purposes of trademark registration and all uses
of the Licensed Xxxx by Licensee shall inure to the benefit of
Licensor. Licensee shall not, at any time, do or suffer to be
done any act or thing which may in any way adversely affect
any rights of Licensor in and to the Licensed Xxxx or any
registrations thereof or which, directly or indirectly, may
reduce the value of the Licensed Xxxx or detract from its
reputation.
d. Licensee never shall challenge Licensor's
ownership of or the validity of the Licensed Xxxx or any
application for registration thereof, or any trademark
registration thereof, or any rights of Licensor therein.
9. RIGHT TO SUBCONTRACT AND LISTS OF SOURCES AND CUSTOMERS:
a. Licensee may subcontract the manufacture of any
Article (or portion of any Article) provided Licensee obtains
in writing from any and all such subcontractors an agreement
in writing, as attached hereto in Exhibit "B" and with a copy
to Licensor, that no use of the Licensed Xxxx will be made for
any purpose other than supplying Articles solely to Licensee.
b. Together with the final quarterly statement
submitted for each License Year pursuant to Paragraph 4.d.
hereof and at any other time so requested by Licensor,
Licensee shall provide Licensor with an updated list of the
names and addresses of all manufacturing sources,
subcontractors, suppliers, dealers, wholesalers, retailers and
customers who have been engaged in the manufacture, sale,
distribution or other dealings with the Articles or Packaging
and Related Materials during the term of the Agreement. Such
list shall include customers to whom Articles or Packaging and
Related Materials have been delivered after the expiration or
termination of this Agreement.
c. It is the intent of this Agreement that, insofar
as practical, Licensee shall use its best efforts to at all
times be able to fulfill its orders for Articles
12
promptly and yet not have an excessive inventory at the time
of the termination or expiration of the License. Within ten
(10) days after a request by Licensor, which request may not
be made with unreasonable frequency during each License Year,
Licensee will furnish Licensor with a statement signed by the
Chief Financial Officer of Licensee, setting forth in detail
the quantities of finished Articles then on hand and work in
progress inventories of Articles.
10. COMPETITIVE BRANDS:
a. Licensee and any affiliates thereof shall not
during the term of this Agreement enter into any other license
which would grant Licensee or any affiliate the right to
manufacture, distribute, advertise, promote, sell or deal with
in any way in the Territory any Products marketed,
merchandised, distributed and known to the general public as a
junior or contemporary fashion brand within the Channel of
Distribution without Licensor's prior written consent. Subject
to paragraph 10(b) below, nothing herein shall limit the right
of Licensee to continue to manufacture retailer owned or
licensed products so long as Licensee serves only as the
manufacturer of such products.
b. Within one hundred five (105) days following the
date on which Licensee ships new Articles introduced to the
retail market, Licensee shall not use designs or styles unique
to such Articles on or in connection with any other brand or
product which consumers identify or associate with Licensor
and/or the Licensed Xxxx on or in connection with any other
brand or product. In addition, Licensee shall not during or
after the terms of this Agreement use Protected Designs on or
in connection with any other brand or product. Also, upon
expiration or termination of this Agreement, Licensee will
assign to Licensor the beneficial ownership of all rights that
Licensee has acquired or may acquire in such designs or
styles. "Protected Designs" shall mean any designs or styles
that are not within the public domain or which would not be
entitled to legal protection against use by other
manufacturers or distributors of apparel, other than Licensee.
11. ADVERTISING.
a. ADVERTISING FEE:
Licensee shall pay to Licensor an amount (the
"Advertising Fee") equal to two percent (2%) of Net Sales
during the term of the Agreement, as specified in Paragraph
S.12. of the Schedule, which Advertising Fee shall be used by
Licensor in connection with its national and regional
advertising and promotion of the Licensed Xxxx. The
Advertising Fee shall be paid to Licensor at the time
quarterly statements are to be delivered to Licensor in
accordance with provisions of Paragraph 3.c. hereof and shall
be based on Net Sales during the quarter to be covered by each
such statement. Licensor shall use the Articles in its
national advertising campaigns subject to the creative and
marketing discretion of Licensor and its advertising advisors.
13
b. COOPERATIVE ADVERTISING:
Licensee agrees to offer and pay one percent (1.0%)
of its Net Sales for cooperative advertising to major
retailers and provide Licensor with proof of such payments and
copies of the actual cooperative advertising materials and/or
advertisements.
12. INDEMNITY; INSURANCE.
a. Licensee hereby saves and holds Licensor harmless
of and from and indemnifies it against any and all losses,
liability, damages and expenses (including reasonable
attorneys' fees and expenses) which Licensor may incur or be
obligated to pay, or for which it may become liable or be
compelled to pay in any action, claim or proceeding against
it, for or by reason of any acts, whether of omission or
commission, that may be committed or suffered by Licensee or
any of its servants, agents or employees in connection with
Licensee's performance of this Agreement. The provisions of
this paragraph and Licensee's obligations hereunder shall
survive the expiration or termination of this Agreement.
b. Licensor hereby saves and holds Licensee harmless
of and from and indemnifies it against any and all losses,
liability, damages and expenses (including reasonable
attorneys' fees and expenses) which Licensee may incur or be
obligated to pay or for which it may become liable or be
compelled to pay in any action, claim or proceeding against
it, for or by reason of any acts, whether of omission or
commission, that may be committed or suffered by Licensor or
any of its servants, agents or employees in connection with
Licensor's performance of this Agreement. The provisions of
this paragraph and Licensor's obligations hereunder shall
survive the expiration or termination of this Agreement.
c. The indemnified party shall give the indemnifying
party prompt notice of, and full cooperation with respect to,
the alleged claim brought or asserted in request of which
indemnification under this Agreement is sought; PROVIDED,
HOWEVER, that any delay or failure to provided the
indemnification notice shall relieve the indemnified party of
its obligations hereunder only in the event, and to the
extent, that a court of competent jurisdiction shall finally
determine that the indemnifying party shall have been
materially prejudiced by reason of such failure or delay.
d. Licensee shall procure and maintain at its own
expense in full force and effect at all times during which
Articles are being sold, a public liability insurance policy
including product liability coverage with respect to Articles,
as well as contractual liability coverage with respect to this
Agreement, with a limit of liability of not less than
$2,000,000.00. Such insurance policy shall be written for the
benefit of both Licensee and Licensor and shall provide for at
least ten (10) days prior written notice to said parties of
the cancellation or substantial modification thereof. Nothing
contained in this Paragraph 12.d. shall deemed to limit in any
way the indemnification provisions of Paragraph 12 hereof.
14
13. DEFAULT.
(a) The occurrence of any of the following events
shall constitute an event of default by Licensee under this
Agreement, subject to the procedures and remedies set forth
herein:
(i) If Licensee defaults in the performance of
any of its material obligations provided for
in this Agreement and such failure continues
for a period of ten (10) days after receipt
of written notice thereof; or
(ii) If Licensee shall have failed to deliver to
Licensor or to maintain in full force and
effect the insurance referred to in
Paragraph 12 d. hereof and such failure
continues for a period of ten (10) days
after receipt of written notice thereof; or
(iii) If Licensee shall fail to make any payments
due hereunder and such failure continues for
a period of seven (7) days after receipt of
written notice thereof; or
(iv) If Licensee shall fail to deliver any of the
statements hereinabove referred to when due
hereunder and such failure continues for a
period of fifteen (15) days after receipt of
written notice thereof; or
(v) If Licensee shall materially fail to comply
with any laws, regulations or voluntary
industry standards or if any governmental
agency or other body, office or official
vested with appropriate authority finds that
the Product(s) are harmful or defective in
any way, manner or form, or are being
manufactured, sold or distributed in
contravention of applicable laws,
regulations or standard, or in a manner
likely to cause harm, and such failure could
have a material adverse effect on the value
of the Licensed Xxxx and such failure
continues for a period of ten (10) days
after receipt of written notice thereof; or
(vi) If Licensee shall be unable to pay its debts
when due, or shall make any assignment for
the benefit of creditors, or shall file any
petition under the bankruptcy or insolvency
laws or any jurisdiction, county or place,
or shall have or suffer a receiver or
trustee to be appointed for its business or
property and such receiver or trustee, if
involuntarily appointed, shall not be
removed by an order within thirty (30) days
following the date of appointment, or be
adjudicated a bankrupt or an insolvent; or
(vii) If Licensee shall manufacture, sell or
distribute, whichever first occurs, any of
the Articles without the prior written
approval of Licensor; or
(viii) If Licensee undergoes a substantial change
in management which is not reasonably
acceptable to Licensee; or
15
(ix) If Licensee delivers or sells Articles
outside the Territory or knowingly sells
Articles to a third party for delivery
outside the Territory.
(b) In the event any of these defaults occur,
Licensor shall give notice of termination in writing to
Licensee by certified mail. Licensee shall have ten (10) days
from the date of receiving notice in which to correct any of
these defaults (except subdivisions (vi) (except for the
thirty (30) day cure period in the event of an involuntary
bankruptcy proceeding), (vii), (viii) and (ix) above which are
not curable), and failing such, this Agreement shall thereupon
immediately terminate, and any and all payments then or later
due from Licensee hereunder shall then be promptly due and
payable and no portion of prior payments shall be repayable to
Licensee.
Further, if Licensee fails to make any payment due
hereunder, Licensee shall pay interest on the unpaid balance
thereof from and including the date such payment becomes due
until the date the entire amount is paid in full at a rate
equal one percent (1%) per month.
14. RIGHTS ON EXPIRATION OR TERMINATION.
a. In the event of termination in accordance with
Paragraph 13 hereof, (except for a default arising from a
breach of paragraph 13(a)(viii)) Licensee shall pay to
Licensor, (i) the Earned Royalty and the Guaranteed Royalty
then owed to it and (ii) the lesser of (x) the Guaranteed
Royalty remaining unpaid for the balance of the then current
term of this Agreement (y) the Guaranteed Royalty for the two
(2) year period following the date of termination and (z) the
Guaranteed Royalty for the period of time following commencing
of the date of termination and ending on the date on which
Licensor receives the first payment from a subsequent licensee
with respect to the sale of the Articles. In addition,
Licensee shall be liable for an amount equal to any other
actual damages Licensor may have suffered on account of such
termination or the acts or omissions from which it resulted.
In the event that this Agreement is terminated by Licensor
pursuant to paragraph 13(a)(viii), Licensee shall not be
required to make any payments to Licensor contemplated by this
paragraph 14(a).
b. Notwithstanding any termination in accordance with
Paragraph 13 hereof, Licensor shall have and hereby reserves
all rights and remedies which it has, or which are granted to
it by operation of law, to enjoin the unlawful or unauthorized
use of the Licensed Xxxx (any of which injunctive relief may
be sought in the courts, notwithstanding the arbitration
provisions of this Agreement, and also may be sought prior to
or in lieu of termination), to collect royalties payable by
Licensee pursuant to this Agreement and to be compensated for
damages for breach of this Agreement.
c. If this Agreement expires or is terminated other
than by Licensor pursuant to Paragraph 13 hereof, Licensee
shall be entitled, for an additional period of six (6) months
only, on a non-exclusive basis, to sell and dispose of its
16
inventory of Articles in the Territory. Such sales shall be
made subject to all of the provisions of this Agreement and to
an accounting for and the payment of Earned Royalties thereon.
Such accounting and payments shall be due within twenty (20)
days after the close of each month during the said six (6)
month period.
d. Except as specifically provided in Paragraph 14c.
hereof, on the expiration or termination of this Agreement,
all of the rights of Licensee under this Agreement shall
terminate forthwith and shall revert immediately to Licensor,
all Earned Royalties on sales theretofore made shall become
immediately due and payable and Licensee shall discontinue
forthwith all use of the Licensed Xxxx or any variation or
simulation thereof and promptly shall transfer to Licensor,
free of charge, all registrations, filings and rights with
regard to the Licensed Xxxx which it may have possessed at any
time. In addition, Licensee thereupon shall deliver to
Licensor, free of charge, all samples of Articles and all
sketches and other material in its possession which were used
in connection with Articles and all Packaging and Related
Material in its possession with the Licensed Xxxx thereon.
After the expiration or termination of this Agreement and
subject to the provisions of paragraph 10(b), Licensee shall
not use or permit others to use any of said sketches and other
material, or any variations or simulations thereof, in
connection with Products or any other merchandise.
15. FORCE MAJEURE
Neither party hereto shall be liable to the other for
delay in any performance or for the failure to render any
performance under the Agreement when such delay or failure is
by reason of any cause or causes beyond its control,
including, without limitation, any present or any future
statute, law, ordinance, regulation, order, judgment or
decree, whether legislative, executive or judicial (whether or
not constitutional), act of God, earthquake, flood, fire,
epidemic, accident, explosion, casualty, lockout, boycott,
strike, labor controversy (including but not limited to threat
of lockout, boycott or strike), riot, civil disturbance, war
or armed conflict (whether or not there has been an official
declaration of war or official statement as to the existence
of a state of war), act of a public enemy, embargo or delay of
a common carrier, or, in the case of Licensee, the inability
without fault on Licensee's part to obtain sufficient
material, labor, transportation, power or other essential
commodity required in the conduct of Licensee's business. The
party claiming to be so effected shall give notice to the
other party promptly after it learns of the occurrence of said
event and of the adverse results thereof. Such notice shall
set forth the nature and extent of the event. The delay or
failure shall not be excused unless such notice is so given.
Notwithstanding any other provision of this Agreement, either
party may terminate the Agreement if the other party is unable
to perform any or all of its obligations hereunder for a
period of three (3) months by reason of said event.
17
16. NOTICE
Any notice, communication or legal service of process
required or permitted under this Agreement shall be effective
when personally delivered in writing; or on the date when the
notice, service or communication is telexed or telecopied
(with a confirmation copy to be sent by mail); or the day
after the notice, service or communication is sent by
overnight air courier service (e.g., Federal Express); or
three (3) days after the date of mailing. All notices shall be
sent to the parties at the notice addresses listed below or to
such other persons and notice addresses as may be designated
in writing by the parties to each other.
TO LICENSOR: Xxxxxx Xxxxxx, Inc.
00-00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 0000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
TO LICENSEE: Xxxxx Industries, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Schiffman, Berger, Xxxxxxx,
Xxxxxxx & Xxxxxx, P.C.
Three University Plaza, Suite 410
P.O. Box 568
Hackensack, N.J. 07602-0568
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17. ASSIGNABILITY
The performance of Licensee hereunder is of a
personal nature and, therefore, neither this Agreement nor the
license or other rights granted hereunder may be assigned,
sublicensed or transferred by Licensee without Licensee's
prior written consent which consent shall not be unreasonably
withheld or delayed. Any attempted assignment, sublicense or
transfer, whether voluntary or by operation
18
of law, directly or indirectly, without such prior written
consent of Licensor shall be void and of no force or effect.
18. NO JOINT VENTURE
Nothing herein contained shall be construed to place
the parties in the relationship of partners or joint
venturers, and Licensee shall have no power to obligate or
bind Licensor, its subsidiaries and affiliates in any manner
whatsoever.
19. BINDING EFFECT
This Agreement shall inure to the benefit of and
shall be binding upon the parties, their respective
successors, Licensor's transferees and assigns and Licensee's
permitted transferees and assigns.
20. ARBITRATION
Except as specifically set forth in this Agreement,
any and all disputes, controversies and claims arising out of
or relating to this Agreement or concerning the respective
rights or obligations hereunder of the parties hereto except
disputes, controversies and claims relating to or affecting in
any way Licensor's ownership of or the validity of the
Licensed Xxxx or any registration thereof, or any application
for registration thereof (hereinafter referred to as "Licensed
Xxxx Disputes") shall be settled and determined by arbitration
in New York, New York before the Commercial Panel of the
American Arbitration Association in accordance with and
pursuant to the then existing Commercial Arbitration Rules.
The arbitrators shall have the power to award specific
performance or injunctive relief and reasonable attorneys'
fees and expenses to any party in any such arbitration and the
courts shall have similar power with regard to that injunctive
relief sought by Licensor pursuant to Paragraph 14.b. hereof
and with regard to Licensed Xxxx Disputes. However, in any
arbitration proceeding arising under this Agreement, the
arbitrators shall not have the power to change, modify or
alter any express condition, term or provision hereof, and to
that extent the scope of their authority is limited. The
arbitration award shall be final and binding upon the parties
and judgment thereon may be entered in any court having
jurisdiction thereof. The service of any notice, process,
motion or other document in connection with an arbitration
under this Agreement or for the enforcement of any arbitration
award hereunder may be effectuated in the manner in which
notices are to be given to a party pursuant to Paragraph 16
hereof.
21. FUTURE LICENSES
Except as may otherwise be provided, in this
Agreement, Licensor shall have the right, exercisable at any
time, to negotiate and enter into agreements with third
parties pursuant to which it may grant a license to use the
Licensed Xxxx in connection with the manufacture, distribution
and sale of Products in the Territory or provide consultation
and design and marketing services with respect to Products in
the Territory, but only if, pursuant to such third party
agreements, the
19
collections of such Products are not shipped prior to the
termination of this Agreement. Nothing herein contained shall
be construed to prevent any such third party licensee from
showing such Products and accepting orders therefor prior to
the termination hereof. However, the first seasonal collection
of Products bearing the Licensed Xxxx sold by any such third
party licensee shall be a collection after the final
collection sold by Licensee hereunder. Licensor hereby grants
Licensee a right of first negotiation with respect to a
license of the Articles in and for the territory of Canada,
and the parties agree that they will negotiate the terms of a
licensing agreement in good faith with respect to such
territory. In addition, in the event that Licensor elects to
sell "missy" styles or sizes under the Licensed Xxxx, Licensor
hereby grants Licensee a right of first negotiation with
respect to a license of the Licensed Xxxx for the sale of such
"missy" products in the Territory.
22. APPLICABLE LAW
This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State.
23. NO WAIVER
No waiver by either party, whether express or
implied, of any provision of this Agreement, or of any breach
default thereof, shall constitute a continuing waiver of such
provision or of any other provision of this Agreement.
Acceptance of payments by Licensor shall not be deemed a
waiver by Licensor of any violation of or default under any of
the provisions of this Agreement by Licensee.
24. INVALIDITY
If any provision or any portion of any provision of
this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement and the remaining
portion of any provision held void or unenforceable in part
shall continue in full force and effect.
25. ENTIRE AGREEMENT
This Agreement contains the entire understanding and
agreement between the parties hereto with respect to the
subject matter hereof, supersedes all prior oral or written
understandings and agreements relating thereto and may not be
modified, discharged or terminated, nor may any of the
provisions hereof be waived, orally. This Agreement shall be
construed without regard to any presumption or other rule
requiring construction against the party causing this
Agreement to be drafted. If any words or phrases in this
Agreement shall have been stricken out or otherwise
eliminated, whether or not any other words or phrases have
been added, this Agreement shall be construed as if those
words or phrases were never included in this Agreement, and no
implication or inference shall be drawn from the fact that the
words or phrases were so stricken out or otherwise eliminated.
20
26. CONFIDENTIALITY
A confidential relationship is created by this
Agreement. Except in connection with their respective rights
and obligations under this Agreement, Licensor, Licensee and
their respective affiliates, employees, attorneys, and
accountants shall keep confidential and not take or use for
its or their own purpose confidential and proprietary business
information of the other and terms of this Agreement, unless
with the prior written consent of the other parties hereto or
pursuant to, or as may be required by law, or in connection
with regulatory or administrative proceedings and only then
with reasonable advance notice of such disclosure to the other
parties thereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXX XXXXXX, LTD.
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Operating Officer
XXXXX INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
21
EXHIBIT "A"
QUARTERLY LICENSEE TRADEMARK ROYALTY
AND ADVERTISING FEE REPORT
Licensee: Xxxxx Industries, Inc.
For Quarter ending: _______________
Gross Sales _______________
Discounts: _______________
Allowances: _______________
Credits: _______________
Returns: _______________
Net Sales: ===============
Guaranteed Minimum Payment: _______________
Sales Royalty @ 5% _______________
Advertising Fee @ 2% _______________
Total Payment Due: _______________
Total Payment Remitted: _______________
Authorized Signature:______________ Date:___________________
22
EXHIBIT "B"
Dated ___________, 199_
Gentlemen:
This letter will serve as notice to you that pursuant to the License
Agreement dated as of ______________, between you and ______________, we have
been engaged as the manufacturer for the connection with the manufacture of the
Articles defined in the aforesaid License Agreement. We hereby acknowledge that
we have received a copy of the quality, trademark notice, and other relevant
terms and conditions set forth in said License Agreement which are applicable to
our function as manufacturer of the Articles(s), and we agree to only dispose of
the Articles to _________________. It is understood that this engagement is on a
royalty free basis.
Sincerely,
23
