M EXHIBIT 10.18.3
TRADEMARK SUBLICENSE AGREEMENT
This TRADEMARK SUBLICENSE AGREEMENT (this "AGREEMENT") is made
effective as of March 7, 2005 (the "EFFECTIVE DATE"), by and between Private
Brands, Inc., a California corporation ("SUBLICENSOR"), and Macy's Merchandising
Group, LLC, a Delaware limited liability company ("SUBLICENSEE"), with reference
to the following facts:
WITNESSETH:
WHEREAS, SUBLICENSOR is the exclusive SUBLICENSEE of American
Rag CIE, LLC, a California limited liability company ("MASTER LICENSOR") of
various rights to commercially exploit and to sublicense for commercial
exploitation a valuable Trademark (as defined below) with respect to apparel
products and accessories pursuant to that certain License Agreement, dated April
1, 2003 (the "MASTER LICENSE"), by and between Industry Xxxxx, Inc., a
California corporation and the predecessor in interest of Master Licensor to the
Trademark and the Master License, and SUBLICENSOR, a copy of which has been
delivered to SUBLICENSEE.
WHEREAS, SUBLICENSEE desires to obtain an exclusive right to
use the Trademark, on and in connection with the manufacture, sale and
distribution of Licensed Products, as defined below, bearing, incorporating or
otherwise utilizing the Trademark in the Territory, as defined below; and
WHEREAS, SUBLICENSEE has represented that it has the ability
to manufacture, have manufactured, market and distribute the Licensed Products
and to use the Trademark on or in association with the Licensed Products in the
Territory; and
WHEREAS, SUBLICENSOR has agreed to grant to SUBLICENSEE such
license under and subject to the terms and conditions hereinafter set forth, and
the terms and conditions of the Master License; and
WHEREAS, both SUBLICENSEE and SUBLICENSOR are in agreement
with respect to the terms and conditions upon which SUBLICENSEE shall use,
manufacture and sell, have used, have manufactured and have sold Licensed
Products and use the Trademark in the Territory.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the parties each intending to be legally bound
hereby, do promise and agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "AFFILIATE" shall mean, with respect to any entity, any other
entity that, directly or indirectly, controls, is controlled by or is under
common control with, that entity; PROVIDED, HOWEVER, that in each case any such
other entity shall be considered to be an Affiliate only during the time period
during which such control exists. For purposes of this definition, "CONTROL"
(including, with correlative meaning, the terms "CONTROLLED by" and "UNDER
COMMON CONTROL WITH"), as used with respect to any entity, shall mean the
possession, directly or indirectly, of the power to direct and/or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
1.2 "AUTHORIZED SELLERS" shall have the meaning given such term in
the Exclusive Distribution Agreement.
1.3 "CONTRACT YEAR" shall mean the period commencing on the
Effective Date and ending on the December 31, 2005, and each period of twelve
(12) successive calendar months thereafter during the Term.
1.4 "EXCLUSIVE DISTRIBUTION AGREEMENT" shall mean that certain
Exclusive Distribution Agreement, dated as of April 1, 2003, by and between
SUBLICENSOR and SUBLICENSEE, as successor in interest to Federated Merchandising
Group, an unincorporated division of Federated Department Stores, Inc., a
Delaware corporation, as amended, modified, supplemented, extended, renewed,
restated or replaced from time to time.
1.5 "NET SALES" shall mean (i) the gross sales price of Licensed
Products actually charged by SUBLICENSEE or by any of its Affiliates (which
price shall not be less than the actual cost of the Licensed Products to
SUBLICENSEE or its Affiliates), or invoiced by a third party directly, to the
Authorized Seller that takes the Licensed Products into inventory for sale by
such Authorized Seller in its retail stores, PLUS (ii) internal load, insurance
and freight for such Licensed Products, LESS (ii) the amount of any credit or
refund to SUBLICENSEE and/or the Authorized Seller for Licensed Products
returned to the supplier due to quality issues and the Trademark is removed from
the Licensed Products prior to re-sale or the Licensed Products are destroyed.
1.6 "LICENSED PRODUCTS" shall mean men's clothing, including,
without limitation, men's shirts, pants, suits, shorts and swimwear, but
expressly EXCLUDING any and all denim clothing and other denim products (e.g.,
jeanswear).
1.7 "PERCENTAGE ROYALTY" shall have the definition given that term
in PARAGRAPH 4.2.
1.8 "TERRITORY" shall mean the United States of America, Canada
and Bermuda.
1.9 "TRADEMARK" means "American Rag CIE" including the
correspondent U.S. trademark registration numbers and trademark applications
listed in EXHIBIT A attached hereto and incorporated herein, and any Canada and
Bermuda common law trademark rights or future registrations, if any, in each
case exclusively licensed by SUBLICENSOR, as well as the right to utilize
derivations of "American Rag CIE" under the Master License.
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2. GRANT OF SUBLICENSE
2.1 SUBLICENSE. SUBLICENSOR hereby grants to SUBLICENSEE an
exclusive, non-transferable, non-sublicensable license, during the Term of this
Agreement, and subject to all the terms and conditions contained in this
Agreement and the Master License, to use, manufacture, sell, have used, have
manufactured and have sold, Licensed Products utilizing the Trademark,
including, without limitation, on or in association with the design,
manufacture, distribution, sale, marketing, promotion and advertising of the
Licensed Products, as well as on the packaging, promotional and advertising
material associated therewith, in the Territory.
2.2 RESERVATIONS. It is understood and agreed that this sublicense
shall pertain only to the Licensed Products and does not extend to any other
products or services. All rights not specifically granted herein are hereby
expressly reserved by SUBLICENSOR.
2.3 AUTHORIZED SELLERS. Notwithstanding anything herein to the
contrary, SUBLICENSEE shall have the right to sell Licensed Products in the
Territory solely through Authorized Sellers and through the websites operated by
or on behalf of Authorized Sellers. SUBLICENSEE'S right to sell the Licensed
Products through websites operated by or on behalf of the Authorized Sellers
shall be restricted to the right to fulfill orders placed by end user purchasers
of the Licensed Products who are located within the Territory.
2.4 EXCLUSIVITY. SUBLICENSEE shall not make or authorize, any use,
direct or indirect, of the Licensed Products in any other country outside the
Territory and will not knowingly sell the Licensed Products to persons who
intend or are likely to resell them in any country outside the Territory.
SUBLICENSOR acknowledges and agrees that the grant of rights to SUBLICENSEE
under this PARAGRAPH 2 are exclusive to SUBLICENSEE, and SUBLICENSOR shall not
itself exploit or grant to any third party the right to exploit any such rights
in the Territory.
3. TERM
This Agreement and the provisions hereof, except as otherwise provided,
shall be in full force and effect on and as of the Effective Date, and shall
continue for a period ending on December 31, 2009 (the "INITIAL TERM"), unless
sooner terminated as herein provided. This Agreement may be renewed for two (2)
additional periods of five (5) years each (each a "RENEWAL TERM" and together
with the Initial Term, the "TERM"), by mutual written agreement of SUBLICENSEE
and SUBLICENSOR. SUBLICENSEE shall give written notice to SUBLICENSOR of its
desire to renew this Agreement on or before a date which is sixty (60) days
prior to expiration of the Initial Term or Renewal Term. Notwithstanding the
foregoing, if the Master License terminates prior to the expiration of the Term
(including the Initial Term and any Renewal Term), this Agreement shall
terminate upon termination of the Master License. SUBLICENSOR shall advise
SUBLICENSEE by written notice given no less than one hundred eighty (180) days
in advance of the scheduled expiration of the Master License. Expiration or
termination of this Agreement shall not effect any obligation of SUBLICENSEE to
make payments hereunder accruing prior to, or after, such expiration or
termination, as applicable.
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4. COMPENSATION
4.1 ROYALTIES. In consideration of the rights granted to
SUBLICENSEE pursuant to this Agreement, SUBLICENSEE shall, during each Royalty
Period, as defined below, or portion thereof during the Term, pay SUBLICENSOR a
royalty (the "PERCENTAGE ROYALTY") equal to:
(a) Three Percent (3%) of Net Sales of all Licensed Products
sourced directly by SUBLICENSEE or any of its Affiliates; and
(b) Five Percent (5%) of Net Sales of all Licensed Products
sourced by a person or entity other than SUBLICENSEE or any of its Affiliates.
For purposes hereof, (i) Licensed Products are "SOURCED DIRECTLY BY
SUBLICENSEE OR ANY OF ITS AFFILIATES" if SUBLICENSEE or any of its Affiliates
directly manufactures the Licensed Products, or contracts directly with third
party manufacturers for the manufacture of the Licensed Products which are
purchased directly from such third party manufacturers, and (ii) Licensed
Products are "SOURCED BY A PERSON OR ENTITY OTHER THAN SUBLICENSEE OR ANY OF ITS
AFFILIATES" if SUBLICENSEE or any of its Affiliates contracts directly with an
intermediary, who arranges for the manufacturer of the Licensed Products by
third party contract manufacturers and sells the Licensed Products to
SUBLICENSEE or any of its Affiliates.
4.2 ROYALTY PERIOD. The Percentage Royalty owed to SUBLICENSOR
shall be calculated on a quarterly calendar basis (the "ROYALTY PERIOD") and
shall be payable no later than twenty (20) days after the termination of the
immediately preceding full calendar quarter. Thus, the Percentage Royalties are
payable on January 20, April 20, July 20 and October 20 for the immediately
preceding quarter of transactions.
4.3 ACCRUAL OF PERCENTAGE ROYALTY. The Percentage Royalty payable
with respect to License Products shall accrue and become an obligation of
SUBLICENSEE at the time title to such Licensed Products is first transferred to
SUBLICENSEE or any of its Affiliates, and shall be payable irrespective of
whether such Licensed Products thereafter are sold by an Authorized Seller.
4.4 ROYALTY STATEMENT. With each Percentage Royalty payment,
SUBLICENSEE shall provide SUBLICENSOR with a written royalty statement on a form
in the manner attached hereto as EXHIBIT B.
4.5 ACCELERATION. Provided SUBLICENSOR is not in breach, upon
expiration or termination of this Agreement, notwithstanding anything to the
contrary herein, all of SUBLICENSEE'S royalty obligations, including any unpaid
portions of the Percentage Royalty shall be accelerated and immediately shall
become due and payable.
4.6 SURVIVAL OF OBLIGATIONS. SUBLICENSEE'S obligations for the
payment of the Percentage Royalty shall survive the expiration or termination of
this Agreement, and will continue for so long as SUBLICENSEE continues to
manufacture, have manufactured, sell, have sold or otherwise market or exploit
the Licensed Products.
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4.7 MANNER OF PAYMENT. All payments due hereunder shall be made in
United States currency drawn on a United States bank, unless otherwise specified
by the parties.
4.8 INTEREST ON LATE PAYMENTS. Late payments shall incur interest
at the rate of One and One-Half Percent (1.5%) per month from the date such
payments were originally due.
5. AUDIT
5.1 BOOKS AND RECORDS. SUBLICENSOR shall have the right, upon at
least fifteen (15) days written notice and no more than once during any twelve
month period, to inspect SUBLICENSEE'S books and records and all other documents
and material in the possession of or under the control of SUBLICENSEE or any of
its Affiliates with respect to the subject matter of this Agreement at the place
or places where such records are normally retained by SUBLICENSEE or any of its
Affiliates.
5.2 UNDERPAYMENTS. In the event that such inspection reveals a
discrepancy in the amount of Percentage Royalty owed SUBLICENSOR from what was
actually paid, SUBLICENSEE shall pay such discrepancy, plus interest, calculated
at the rate of One and One-Half Percent (1.5%) per month. In the event that such
discrepancy is in excess of Five Thousand Dollars ($5,000.00), SUBLICENSEE shall
also reimburse SUBLICENSOR for the cost of such inspection, including any
accounting and/or attorneys' fees incurred in connection therewith.
5.3 MAINTENANCE OF RECORDS. All books and records relative to
SUBLICENSEE'S obligations hereunder shall be maintained and kept accessible and
available to SUBLICENSOR for inspection for at least three (3) years after
termination of this Agreement.
6. WARRANTIES AND OBLIGATIONS
6.1 WARRANTIES AND REPRESENTATIONS OF SUBLICENSOR. SUBLICENSOR
hereby represents and warrants that:
(a) it has the full right, power and authority to enter
into this Agreement and to grant the sublicense granted herein;
(b) there are no other agreements with any other party in
conflict herewith;
(c) it is a corporation validly existing and in good
standing under the laws of the jurisdiction of its incorporation; and
(d) it has no actual knowledge that the Trademark
infringes any valid right of any party.
6.2 WARRANTIES AND REPRESENTATIONS OF SUBLICENSEE. SUBLICENSEE
hereby represents and warrants that:
(a) it has the full right, power and authority to enter
into this Agreement and to perform all of its obligations hereunder;
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(b) it is financially capable of undertaking the business
operations which it conducts and of performing its obligations hereunder;
(c) it is a corporation or a division of a corporation
validly existing and in good standing under the laws of the jurisdiction of its
incorporation; and
(d) it will use its best efforts to promote, market, sell
and distribute the Licensed Products.
6.3 SUBLICENSEE'S OBLIGATIONS. SUBLICENSEE shall:
(a) be financially responsible for employing a designer
to design the Licensed Products; and
(b) be solely responsible for the manufacture,
production, sale and distribution of the Licensed Products and will bear all
related costs associated therewith.
6.4 WARRANTY EXCLUSION AND WAIVER. THE WARRANTIES SET FORTH IN
PARAGRAPH 6.1 ABOVE ARE THE SOLE AND EXCLUSIVE WARRANTIES OF SUBLICENSOR UNDER
THIS AGREEMENT. SUBLICENSOR SPECIFICALLY DISCLAIMS, AND SUBLICENSEE SPECIFICALLY
WAIVES, ALL WARRANTIES WHICH ARE NOT CONTAINED IN SECTION 6.1 ABOVE, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN OR ARISING BY TRADE USAGE OR OTHERWISE,
INCLUDING BUT NOT LIMITED TO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
7. NOTICES, QUALITY CONTROL AND SAMPLES
7.1 COMPLIANCE WITH LEGAL REQUIREMENTS. The sublicense granted
hereunder is conditioned upon SUBLICENSEE'S full and complete compliance with
the marking provisions of the trademark, patent and copyright laws of the United
States.
7.2 LEGAL NOTICES. The Licensed Products, as well as all
packaging, promotional, and advertising material relative thereto, shall include
all appropriate legal notices as required by SUBLICENSOR from time to time as
reasonably required.
7.3 QUALITY OF LICENSED PRODUCTS. The Licensed Products shall be
of a high quality. SUBLICENSEE shall notify SUBLICENSOR of each new seasonal
collection of Licensed Products. When requested by SUBLICENSOR, at no cost to
SUBLICENSOR, SUBLICENSEE shall submit to SUBLICENSOR, for approval as to
quality, samples of the Licensed Products. Such approval by SUBLICENSOR shall
not be unreasonably withheld. At SUBLICENSOR'S request, SUBLICENSEE shall submit
all packaging, promotional, marketing and advertising material related to the
Licensed Products for such uses of the Trademark which have not been previously
approved by SUBLICENSOR. Failure of SUBLICENSOR to approve such samples within
fifteen (15) working days after receipt of such samples will be deemed approval.
If SUBLICENSOR should disapprove any sample, it shall provide specific reasons
for such disapproval. Once such samples have been approved by SUBLICENSOR,
SUBLICENSEE
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shall not materially depart therefrom in the making of future Licensed Products
without SUBLICENSOR'S prior express written consent, which shall not be
unreasonably withheld.
7.4 COMPLIANCE WITH LEGAL REQUIREMENTS. SUBLICENSEE shall
manufacture, package, sell and distribute the Licensed Products in accordance
with all applicable national, state and local laws and regulations.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 EXCLUSIVE RIGHTS IN MASTER LICENSOR. SUBLICENSEE acknowledges
that, as between SUBLICENSEE and Master Licensor, Master Licensor owns all
right, title and interest, including intellectual property rights, in and to the
Trademark, subject to the exclusive license granted to SUBLICENSOR and the
sublicense granted to SUBLICENSEE hereunder. Except for the sublicense granted
to SUBLICENSEE hereunder, no other right, title to or ownership of the Trademark
in any form is granted to SUBLICENSEE. This Agreement shall be deemed inferior
and subject to any rights reserved by Master Licensor in the Master License. In
the event of any conflict between rights granted hereunder and the rights
retained by Master Licensor in the Master License, the Master License shall be
deemed controlling.
8.2 RIGHTS TO THE TRADEMARK. Subject to the rights of Master
Licensor, SUBLICENSEE acknowledges SUBLICENSOR'S exclusive rights in and to the
Trademark. SUBLICENSEE shall not, at any time during or after the Term of this
Agreement, dispute, or contest, directly or indirectly, Master Licensor's
exclusive right and title to the Trademark, or the validity thereof.
8.3 SECONDARY MEANING. SUBLICENSEE acknowledges that the Trademark
has acquired secondary meaning.
8.4 BENEFIT. SUBLICENSEE agrees that its use of the Trademark
inures to the benefit of Master Licensor and that the SUBLICENSEE shall not
acquire any rights in the Trademark.
8.5 TRADEMARK AND COPYRIGHT PROTECTION. Master Licensor may seek,
in its own name and at its own expense, appropriate trademark, or copyright
protection for the Trademark. Except with the written consent of SUBLICENSOR,
SUBLICENSEE shall not directly or indirectly register or attempt to register in
any country, state or territory as a trademark or domain name, the Trademark, or
any word, name, symbol or design which is so similar thereto as to suggest some
association with or sponsorship by SUBLICENSOR or Master Licensor. In the event
of a breach of the foregoing provision, SUBLICENSEE shall, at its expense and at
the request of SUBLICENSOR, immediately terminate the unauthorized registration
activity in question and promptly execute and deliver, or cause to be delivered
to SUBLICENSOR, or at the request of SUBLICENSOR, to the Master Licensor, such
assignments and other documents as it may require to effectuate the assignment
and transfer to Master Licensor of all of the rights to the registrations or
applications involved.
8.6 DESIGN RIGHTS. The parties acknowledge and agree that, as
between each other, the party creating a particular design shall own all design
rights relating to the design. All designs used by SUBLICENSEE for the Licensed
Products shall be used exclusively for the
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Licensed Products and may not be used under any other trademark or private label
without the prior written consent of SUBLICENSOR during the term of this
Agreement. SUBLICENSEE shall disclose and freely make available to SUBLICENSOR
any and all developments or improvements it may make relating to the Licensed
Products and to their manufacture, promotion and sales.
8.7 OWNERSHIP OF COPYRIGHT. The parties acknowledge and agree
that, as between each other, any copyrights created by or for the Licensed
Products under this Agreement in any sketch, design, print, package, label, tag
or the like designed and approved for use in connection with the Licensed
Products will be the property of SUBLICENSOR if it contains the trademark, and
shall be the property of SUBLICENSEE if it does not
8.8 PROTECTING INTELLECTUAL PROPERTY. The parties agree to execute
any documents reasonably requested by the other party to effect any of the above
provisions.
9. INFRINGEMENTS
9.1 SUBLICENSEE'S RIGHTS. SUBLICENSEE shall notify SUBLICENSOR in
writing within fifteen (15) days of discovery by SUBLICENSEE of any
infringements or imitations by others of the Trademark in connection with any
products or services. If SUBLICENSOR declines to prosecute any such action
within thirty (30) days after SUBLICENSOR'S written request that it do so,
SUBLICENSEE may institute and prosecute such actions through attorneys of its
own choosing to be paid by SUBLICENSEE, in which case SUBLICENSEE shall retain
seventy-five (75%) percent of all sums recovered from the infringer in any such
action, whether by judgment, settlement or otherwise after recovery of
SUBLICENSEE'S attorneys' fees and costs, with SUBLICENSOR to receive the
remaining twenty-five (25%) percent.
9.2 SUBLICENSOR'S RIGHTS. SUBLICENSOR may in its discretion
institute and prosecute such actions through attorneys of its own choosing and,
as between SUBLICENSOR and SUBLICENSEE, shall retain one hundred (100%) percent
of all sums recovered from the infringer in any such lawsuit, whether by
judgment, settlement or otherwise recovered from the infringer.
9.3 COOPERATION. Upon request of the party bringing the action,
the other party shall execute all papers, testify on all matters, and otherwise
cooperate in every way necessary and desirable for the prosecution of any such
lawsuit. The party bringing such suit shall reimburse the other party for the
expense incurred as a result of such cooperation.
9.4 SETTLEMENT. Whoever brings the suit has the right to settle
pursuant to the terms of this Agreement or turn over the action to the other.
10. INSURANCE
10.1 REQUIREMENTS. SUBLICENSOR acknowledges that SUBLICENSOR is
self insured in an amount of $2,000,000 (Two Million Dollars) combined single
limit, and in addition has obtained primary and excess policies that are
appropriate for a company of its size and capitalization.
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11. TERMINATION
11.1 OTHER RIGHTS UNAFFECTED. The following termination rights are
in addition to the termination rights provided elsewhere in the Agreement:
(a) IMMEDIATE RIGHT OF TERMINATION. SUBLICENSOR shall
have the right to immediately terminate this Agreement by giving written notice
to SUBLICENSEE in the event that SUBLICENSEE does any of the following:
(i) files a petition in bankruptcy or is
adjudicated a bankrupt or insolvent, or makes an assignment for the benefit of
creditors, or an arrangement pursuant to any bankruptcy law, or if the
SUBLICENSEE discontinues its business or a receiver is appointed for the
SUBLICENSEE or the SUBLICENSEE'S business and such receiver is not discharged
within thirty (30) days; or
(ii) breaches any of the provisions of this
Agreement relating to the unauthorized assertion of right in the Trademark; or
(iii) fails, after receipt of written notice from
SUBLICENSOR, to immediately discontinue the distribution or sale of the Licensed
Products or the use of any packaging or promotional material which does not
contain the requisite legal legends; or
(iv) fails to make timely payment of the
Percentage Royalty when due two or more times during any twelve month period
five (5) days after being notified by SUBLICENSOR;or
(v) fails to sell through Authorized Sellers
during any Contract Year, Licensed Products which generate an aggregate
Percentage Royalty of at least $150,000.
(b) RIGHT TO TERMINATE ON NOTICE. This Agreement may be
terminated by either party upon thirty (30) days written notice to the other
party in the event of a breach of a material provision of this Agreement by the
other party, provided that, during the thirty (30) days period, the breaching
party fails to cure such breach.
(c) TERMINATION OF MASTER LICENSE. In the event that the
Master License terminates for any reason, this Agreement shall automatically
terminate.
(d) TERMINATION OF EXCLUSIVE DISTRIBUTION AGREEMENT.
SUBLICENSOR shall have the right to immediately terminate this Agreement by
giving written notice to SUBLICENSEE if the Exclusive Distribution Agreement
terminates for any reason.
11.2 MUTUAL AGREEMENT. The Agreement may be terminated by mutual
written agreement of SUBLICENSOR and SUBLICENSEE.
12. POST TERMINATION RIGHTS
12.1 INVENTORY UPON TERMINATION. Not less than thirty (30) days
prior to the expiration of this Agreement or immediately upon termination
thereof, SUBLICENSEE shall
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provide SUBLICENSOR with a statement indicating the number and description of
Licensed Products bearing the Trademark which SUBLICENSEE had on hand or was in
the process of manufacturing or having manufactured as of the date of the
expiration or termination (the "Inventory"). SUBLICENSOR shall have the option,
at SUBLICENSOR'S own cost, of conducting a physical inventory in order to
ascertain or verify such Inventory. In the event that the SUBLICENSEE refuses to
permit the SUBLICENSOR to conduct such physical inventory, the SUBLICENSEE shall
forfeit its rights hereunder to dispose of such inventory.
12.2 APPROVAL NEEDED. If this Agreement is terminated due to
SUBLICENSEE'S breach of the quality control or legal notice marking
requirements, no Licensed Products bearing the Trademark may be sold or
distributed or any promotional or packaging material used without the prior
express written approval of the SUBLICENSOR.
12.3 SELL-OFF PERIOD. Upon expiration or termination of this
Agreement, except for reason of a breach of SUBLICENSEE'S duty to comply with
the quality control or legal notice marking requirements, SUBLICENSEE shall be
entitled, for an additional period of six (6) months and on a non-exclusive
basis, to continue to sell such Inventory in the Territory through Authorized
Sellers ("SELL-OFF PERIOD"). Such sales shall be made subject to all of the
provisions of this Agreement and to an accounting for and the payment of a
Percentage Royalty thereon. Such accounting and payment shall be due and paid
monthly, over the course of said Sell-Off Period, within thirty (30) days after
the close of each immediately preceding calendar month, and otherwise in
accordance with the provisions of PARAGRAPH 4. At the end of the Sell-Off
Period, SUBLICENSOR may require that SUBLICENSEE either destroy any Licensed
Products bearing the Trademark still on hand or alternatively, sell them to
SUBLICENSOR at their Gross Sales price.
12.4 FREEDOM TO LICENSE. After termination or expiration of this
Agreement, except as otherwise provided in this Agreement, all rights granted
herein shall revert to SUBLICENSOR who may use, or license others to use the
Trademark. The SUBLICENSEE shall thereafter, refrain from all further use of the
Trademark or any further reference to said xxxx, direct or indirect, or of any
term that is a simulation of the Trademark or is confusingly similar thereto and
turn over to the SUBLICENSOR all materials relating to the Trademark and the
Licensed Products, including, but not limited to, all artwork, color
separations, prototypes and the like, as well as any market studies or other
tests or studies conducted by SUBLICENSEE at no cost whatsoever to SUBLICENSOR.
12.5 DISPOSITION OF LICENSED PRODUCTS. Upon termination or
expiration of this Agreement, SUBLICENSEE agrees to immediately return to
SUBLICENSOR all material relating to the Licensed Products in SUBLICENSEE'S
possession, owned by SUBLICENSOR or bearing the Trademark at no cost whatsoever
to SUBLICENSOR. Within five (5) days of SUBLICENSOR'S written request thereof,
SUBLICENSEE shall provide a written certification, signed by a duly authorized
officer of SUBLICENSEE, certifying that SUBLICENSOR has complied with the
provisions herein.
12.6 EQUITABLE RELIEF. SUBLICENSEE acknowledges that its failure to
cease the use, manufacture, sale or distribution of the Licensed Products
bearing the Trademark, or any class or category thereof, at the termination or
expiration of this Agreement, except as provided
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for in PARAGRAPH 12.3 above, will result in immediate and irreparable damage to
the SUBLICENSOR and to the rights of any subsequent sublicensee of the
SUBLICENSOR. The SUBLICENSEE acknowledges and admits that there is no adequate
remedy at law for failure to cease the use, manufacture, sale or distribution of
the Licensed Products bearing the Trademark, and SUBLICENSEE agrees that in the
event of such failure, SUBLICENSOR shall be entitled to equitable relief by way
of injunctive relief and such other relief as any court with jurisdiction may
deem just and proper.
12.7 SURVIVAL. PARAGRAPHS 1, 4, 5, 6.1, 6.2, 8 AND 11 THROUGH 27
shall survive any expiration or termination of this Agreement.
13. INDEMNIFICATION
13.1 INDEMNIFICATION BY SUBLICENSEE. SUBLICENSEE shall defend,
indemnify and hold SUBLICENSOR and its affiliates, successors, assigns, equity
holders, directors, officers, employees and agents harmless against all costs,
expenses and losses, claims, demands, damages, liability, causes of action
(including without limitation product liability actions and tort actions),
judgments, settlement, suits or expenses (including reasonable attorneys' fees)
claimed, obtained or sustained by third parties in any way related to or arising
from the manufacture, use, marketing, sale, provisions of services and goods or
advertising of the Licensed Products. SUBLICENSEE shall have the right to defend
any such action or proceeding with attorneys of its own choosing.
13.2 INDEMNIFICATION BY SUBLICENSOR. SUBLICENSOR shall defend,
indemnify and hold SUBLICENSEE and its affiliates, successors, assigns, equity
holders, directors, officers, employees and agents harmless against all costs,
expenses and losses, claims, demands, damages, liability, causes of action,
costs, expenses and losses, judgments, settlement, suits or expenses (including
reasonable attorneys' fees) claimed, obtained or sustained by third parties in
any way related to or arising from SUBLICENSEE'S use of the Trademark in the
Territory as expressly authorized hereunder and where SUBLICENSEE is not at
fault, SUBLICENSOR shall have the right to defend any such action or proceeding
with attorneys of its own choosing.
13.3 NOTICE. No later than ten (10) business days from receipt of
notice of a suit or claim which involves the indemnification obligations of the
other party, each party to this Agreement will provide written notice to the
other party of the indemnifiable suit or claim in question, it being understood,
however, that a party that is required to provide such notice shall have no
liability for any delay in providing such notice if the party required to be
notified is not materially prejudiced by such delay.
13.4 SETTLEMENT OFFERS. The party with the indemnification
obligation (the "INDEMNIFYING PARTY") will select a representative and/or
counsel to assume primary responsibility for such claim or suit, at its sole
cost and expense. The Indemnifying Party, at its sole expense, will assume
control of the negotiation of any settlement offer to or from a third party, if
such settlement is due to a claim or suit which involves the Indemnifying
Party's indemnification obligations under this Agreement. The party being
indemnified reasonably will assist the Indemnifying Party in any such
settlement, suit or proceeding, provided that such
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assistance will be at the sole cost and expense of the Indemnifying Party.
SUBLICENSOR and SUBLICENSEE shall not be obligated to consent to any settlement
which does not include the delivery by the settling defendant of a full and
final release of SUBLICENSOR and SUBLICENSEE from any and all liability with
respect to the subject matter of such action.
14. LIMITATION ON LIABILITY
EACH OF SUBLICENSOR AND SUBLICENSEE HEREBY DISCLAIMS AND WILL NOT BE
LIABLE FOR, AND EACH PARTY HEREBY WAIVES ANY CLAIMS OR REMEDIES IT MAY HAVE
AGAINST THE OTHER PARTY, FOR INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR
PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO SUCH DAMAGES ARISING FROM LOST
PROFITS, CUSTOMER CLAIMS, LOSS OF USE OF THE TRADEMARK, OR LACK OR LOSS OF
PRODUCTIVITY, WHICH ARISE OUT OF ANY BREACH OF THIS AGREEMENT BY A PARTY, OR
WHICH ARISE PURSUANT TO ANY TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY, BUT
EXCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OR ANY OTHER CLAIM, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
15. ASSIGNABILITY
15.1 NO ASSIGNMENT WITHOUT CONSENT. The sublicense granted
hereunder is personal to SUBLICENSEE and shall not be assigned or transferred by
any act of SUBLICENSEE or by operation of law unless in connection with a
transfer of all or substantially all of the assets of SUBLICENSEE or with the
written approval of SUBLICENSOR, which approval shall not be unreasonably
withheld.
15.2 UNRESTRICTED RIGHT TO ASSIGN. SUBLICENSOR shall have a
complete and unrestricted right to sell, transfer, lease or assign its rights
and interest in this Agreement providing that such transferee agrees to be bound
by all of the terms hereof and continues to hold the right and license to
exclusively sublicense the Trademark in the Territory. When SUBLICENSOR wishes
to sell, transfer, lease or assign its rights and interests in this Agreement,
SUBLICENSOR shall do so on notice to SUBLICENSEE.
16. SUCCESSION
This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their heirs, administrators, subsidiaries, divisions, affiliated
companies, and, to the extent permitted herein, their successors and assigns.
17. NOTICE AND PAYMENT
Any notice required to be given pursuant to this Agreement shall be in
writing and delivered personally to the other designated party at the below
stated address or mailed by certified or registered mail, return receipt
requested or delivered by documented overnight delivery service or to the extent
that receipt is confirmed, telecopy, telefax or other electronic transmission
service. Notices will be effective upon receipt.
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If to SUBLICENSOR, to: Private Brands, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx & Markiles, LLP
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx XxXxxxxx, Esq.
Fax: (000) 000-0000
and if to SUBLICENSEE, to: Federated Merchandising Group
00 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
With a copy to: Xxx X. Xxxxxx, Esq.
Federated Department Stores, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Either party may change the address to which notice or payment is to be sent by
written notice to the other in accordance with the provisions of this PARAGRAPH
17.
18. RELATIONSHIP OF PARTIES
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between SUBLICENSOR and SUBLICENSEE.
Neither SUBLICENSEE nor SUBLICENSOR 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.
19. WAIVER
Failure by either party hereto to enforce any rights under this
Agreement shall not be construed as a waiver of such rights, nor shall a waiver
of a breach in any one or more instances be construed as constituting a
continuing waiver or as a waiver in other instances.
20. GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York without regard to conflict of
law principles.
21. DISPUTES
21.1 JURISDICTION. All disputes under this Agreement shall be
resolved by the courts of the State of New York and the parties expressly
consent to the jurisdiction and venue of
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the courts in New York, New York, agree to accept service of process by mail,
and hereby waive any jurisdictional or venue defenses otherwise available to
them.
21.2 LEGAL PROCEEDINGS. If any dispute involving this Agreement
arises between the parties, and the disputed matter has not been resolved by
good faith negotiations between the parties within thirty (30) days (or such
longer period as may be agreed to in writing by the parties) after such dispute
has arisen, then each party shall have the right to commence any legal
proceeding as permitted by law, except that a party may seek temporary or
preliminary relief from a court at any time. The prevailing party in any such
legal proceeding shall be entitled to recover its reasonable fees and costs
(including attorneys' fees) associated with the dispute from the other party.
The court shall determine the prevailing party in fact. The amount of attorneys'
fees awarded shall not exceed the amount of recovery by SUBLICENSOR or the
amount in dispute should SUBLICENSEE prevail.
22. INTEGRATION
This Agreement constitutes the entire Agreement between the parties
concerning the subject matter hereof, and revokes and supersedes all prior
agreements between the parties and is intended as a final expression of their
Agreement. No other agreements, understandings, representations or discussions
are included in this Agreement except as expressly noted herein. This Agreement
shall take precedence over any other documents which may be in conflict with
this Agreement.
23. FORCE MAJEURE
It is understood and agreed that in the event of an act of the
government, or war conditions, or fire, flood or labor trouble in the factory of
SUBLICENSEE or in the factory of those manufacturing parts necessary for the
manufacture of the Licensed Products, prevent the performance by SUBLICENSEE of
the provisions of this Agreement, then such nonperformance by SUBLICENSEE shall
not be construed as grounds for breach of this Agreement and such nonperformance
shall be excused while the conditions herein prevail and for two (2) months
thereafter.
24. MODIFICATIONS
This Agreement may not be modified except by a written instrument,
signed by both parties, making specific reference to this Agreement by date,
parties and subject matter.
25. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement,
or the invalidity or unenforceability of any provision of this Agreement as
applied to a particular occurrence or circumstance, shall not affect the
validity or enforceability of any of the other provisions of this Agreement or
any other applications of such provisions, as the case may be.
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26. OTHER PROVISIONS
26.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all such
counterparts together shall constitute one and the same Agreement.
26.2 FURTHER ASSURANCES. The parties hereby covenant and agree to
execute and deliver all such documents, make such governmental filings, and do
or cause to be done all such acts or things as may reasonably be necessary to
complete and effect the transactions contemplated hereby.
26.3 NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by both parties to express their
mutual intent, and no rule of strict construction shall be applied against
either party as drafter.
26.4 HEADINGS. The headings used in this Agreement will be used
only for the purpose of reference and shall not be deemed to govern, limit,
modify or in any other manner affect the scope, meaning or intent of the
provisions of this Agreement or be given any legal effect whatsoever.
27. CONFIDENTIALITY
The parties each agree that during the term of this Agreement they may
receive information regarding the other party's affairs that the disclosing
party considers confidential. Each party receiving such confidential information
agrees not to disclose it to a third party except to its own employees and
agents and only as necessary to perform its obligations or exercise its rights
under this Agreement. This Paragraph is not applicable to any information which:
(a) the receiving party is authorized in writing by the disclosing party to
disclose; (b) is generally known or becomes part of the public domain in the
trade through no fault of the receiving party; (c) is independently developed by
the receiving party or its agents without any use of the confidential
information; or (d) is required to be disclosed by law or regulation or by
proper order of a court of competent jurisdiction after adequate notice to the
disclosing party to seek a protective order, the imposition of which protective
order the receiving party agrees to approve and support. The terms of this
Agreement are confidential information under this Paragraph, provided, however,
in the event that any portion or all of this Agreement shall be required to be
disclosed pursuant to any rule or regulation promulgated by the Securities and
Exchange Commission, either party shall be permitted to disclose such portion,
or all of this Agreement, as applicable, provided, further, that in any such
event, the disclosing party shall provide written notice to the other party, and
at the request of such other party, take such action as may reasonable or
necessary, at the discretion of the disclosing party, to seek confidential
treatment of the material governing provisions hereof with the staff of the
Securities and Exchange Commission. In the event that any such confidential
treatment request, or any portion thereof, is denied by the staff of the
Securities and Exchange Commission, the disclosing party shall be permitted to
disclose such portions, or all of this Agreement, as may be required.
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement by their duly authorized representatives as of the dates set forth
below.
MACY'S MERCHANDISING GROUP, LLC, PRIVATE BRANDS, INC.,
a Delaware limited liability company a California corporation
By: /S/ XXXXX XXXXXXX By: /S/ XXXXX XXXX
--------------------------- --------------------------
Name: XXXXX XXXXXXX Name: XXXXX XXXX
--------------------------- --------------------------
Title: SVP - CFO Title: PRESIDENT & CEO
--------------------------- --------------------------
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EXHIBIT A
TRADEMARK
1. USPTO Reg. No. 1936234
2. USPTO Serial No. 76337153
