EXHIBIT 10.125
EXECUTION COPY
TRADEMARK LICENSE
This Trademark License and Operating Agreement is made and entered into
this ___ day of January, 2001 by and between, Aris Industries, Inc., a New York
corporation ("Aris"), XOXO Clothing Company, Incorporated, a Delaware
corporation ("XOXO"), BP Clothing Company, Inc., a Delaware corporation, ("BP"),
Europe Craft Imports, Inc., a New Jersey corporation ("ECI") and Marcade Realty
Corp., a New York corporation ("Marcade"), on the one hand, and Grupo Extra of
New York, Inc., a New York corporation, with an address at c/o Xxxx Xxxxx, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, XX ("Licensee"), on the other.
RECITALS
A. XOXO, BP, ECI and Marcade are direct or indirect wholly owned
subsidiaries of Aris.
B. XOXO is the owner of the trademarks XOXO(R)and Fragile(R).
C. ECI is the owner of the trademark Members Only(R).
D. BP is the licensee of the name Baby Phat(R) under a license agreement
dated as of July 1, 1999 for the manufacture and sale of women's sportswear (the
"BP License Agreement").
E. ECI is the licensee of the name Xxxxxx Brothers Golf(R) under a license
agreement made as of November 10, 1999 (the "BB License Agreement").
F. Each of XOXO, BP and ECI are referred to herein as a Licensor to the
extent it has rights in the Trademarks as listed in Recitals B through E, above.
X. Xxxxxxx is the tenant under leases for twelve XOXO Outlet Stores
identified on Schedule B (the "Outlet Stores").
H. Licensee is in the business of manufacturing, selling and distributing,
among other products, sportswear, outerwear, golf wear and denim bottoms.
I. Licensee desires to obtain from Licensor an exclusive license to
manufacture, market, sell, distribute and advertise the Licensed Products using
the Trademarks in the Licensed Territory, all as set forth on Schedule "A," and
to purchase all of Licensors' inventory of Licensed Products, assume certain of
its leases and other agreements, and absorb certain of their overhead structure.
J. The parties desire that this Agreement be effective as of February 1,
2001 (the "Effective Date").
K. Licensee represents that it has the ability to manufacture, market,
sell, distribute and advertise the Licensed Products in the territory set forth
on Schedule "A" hereto (the "Licensed Territory") and to use the Trademarks on
or in association with the Licensed Products.
NOW, THEREFORE, in consideration of their respective promises and
agreements made herein, the parties agree as follows:
1. LICENSE
1.1 Grant of License. Subject to the terms and conditions of this
Agreement, as of the Effective Date, each Licensor hereby grants to Licensee
(either by itself or through other entities under common control with Licensee)
the exclusive right and license (the "License") to use the Trademarks in which
it has the rights described in Recitals B through E solely to manufacture,
market, advertise, promote, sell and distribute the Licensed Products in the
Territory during the Term of this Agreement. The License created hereby only
allows the Licensee to market, sell, distribute and advertise the Licensed
Products for sale at wholesale solely to retailers located in the Licensed
Territory and does not permit Licensee to engage in the retail sale and/or
retail marketing of the Licensed Products except for the Outlet Stores and such
other outlet stores as Aris may approve in writing, which approval will not be
unreasonably withheld, delayed or conditioned.
1.2 Determination of Licensed Products; Right of First Offer.
1.2.1 Determination of Licensed Products. Licensee agrees that it will not
manufacture, market, sell, distribute or advertise, either directly or
indirectly, any style, design or product not in effect on the date hereof which
Licensor, in its reasonable discretion, has not expressly approved.
1.2.2 Right of First Offer. In the event a Licensor decides to grant a
license for any of the Trademarks in connection with the manufacture and sale in
the Licensed Territory of products not included in the Licensed Products or for
any products in Mexico or South America (other than pursuant to existing license
agreements), it shall first offer (the "Offer") such license to Licensee,
stating the term, royalty rate, minimum guaranteed sales and royalties and
channels of distribution for which it proposes to grant such license. For the
next 30 days, if Licensee desires to accept such license, Licensor shall
negotiate exclusively with Licensee for such license. If, after such 30 day
period, the parties have not reached agreement with respect to such license,
Licensor may enter into a license for such product, in the 180 period following
expiration of the 30 day period, on terms and conditions not materially more
favorable to the licensee than are contained in the Offer.
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1.3 Approval Regarding Other Products Etc. Licensee acknowledges that
Licensor may grant additional licenses in the future for territories, products
and categories not presently licensed and not within the scope of this License.
Permission of Licensor for Licensee to manufacture a particular style, design or
product, or to distribute the Licensed Products within an area, which is not, in
the reasonable opinion of the Licensor, within the scope of the License, shall
not constitute a continuing approval or a waiver of the right of Licensor to
later disapprove any style, design, product, or distribution area.
1.4 Use/Ownership of Trademarks. Other than as expressly set forth in this
License, Licensee has absolutely no right, title or interest in or to the
Trademarks or the use thereof. Licensee acknowledges that it is only acquiring
the right to use the Trademarks in connection with the manufacture, marketing,
advertising, promotion, distribution and sale of the Licensed Products in the
Licensed Territory, for the Term set forth in this Agreement and subject to the
terms hereof. Upon termination of the License, Licensee shall cease all use of
the Trademarks except as provided in Paragraph 18. Licensee shall not apply
anywhere in the world, to register any copyright, trademark or trade name that
in any way mentions or uses the Trademarks or any trademark or trade name that
is confusingly similar to the Trademarks or trade names licensed hereunder,
without the express prior written consent of Aris.
1.5 Ownership of Trademarks. Each Licensor hereby represents and warrants
that it is the sole owner of the Owned Trademarks, free and clear of all claims,
liens and encumbrances other than an existing lien in favor of CIT Commercial
Group Services, Inc. ("CIT") to secure a term loan with a current outstanding
principal balance of $7.5 million. Licensee agrees that the Trademarks and all
rights, registrations and entitlement thereto, together with all applications,
registrations and filings are and shall remain the sole and exclusive property
of Licensor.
1.6 Use of Names. Except as authorized pursuant to this License, and only
to that extent, Licensee shall not use the Trademarks or any confusingly similar
or substantially similar word or names in its business name or otherwise in any
other manner, without the prior written consent of Aris.
1.7 Best Efforts. Licensee shall use its best efforts to manufacture,
market, sell, distribute and advertise the Licensed Products in order to meet
the demand for the Licensed Products in the Licensed Territory and to uphold,
protect and defend the image and reputation of the Licensed Products and the
integrity of the Trademarks. Licensee further agrees to use its best efforts to
manufacture and ship not less than 75% of all approved, confirmed orders for
Licensed Products within a reasonable time of receipt of approved orders, as
hereinafter defined, or by the delivery date specified in such orders. Licensee
shall maintain a sales organization that will sell the Licensed Products and
that will be capable of effectively soliciting orders for sales of the Licensed
Products in the Territory.
1.8 Assignment. As of the Effective Date, ECI and BP will transfer and
assign unto Licensee all of their respective right, title and interest in the BB
License Agreement and BP
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License Agreement, respectively, subject to any and all terms and conditions set
forth therein, and Licensee hereby assumes and agrees to fully and faithfully
perform all of the obligations, duties, and responsibilities of ECI and BP under
such License Agreements from and after the Effective Date. Licensee agrees to
hold ECI and BP harmless from and against all claims, losses, liabilities and
expenses, including reasonable attorney's fees, incurred as a result of or in
connection with any failure of Licensee to adhere to the aforementioned
covenant. ECI and BP each hereby agrees to hold Licensee harmless from and
against all claims, losses, liabilities and expenses arising under such License
Agreements as a result of their activities prior to the Effective Date. BP and
ECI shall pay actual royalties to the respective licensor under the BP and BB
License Agreements for sales made between January 1, 2001 and the Effective
Date. In connection with such assignments, Licensee shall, upon execution
hereof, pay to Aris for payment to the licensors under the BP and BB License
Agreements, the Minimum Guaranteed Royalty due for the first quarter of 2001 in
the amount of $495,000 and $127,500, respectively. Each party shall cooperate
with the other to obtain the consents of the licensors under the BP and BB
License Agreements.
2. LICENSED TERRITORY.
2.1 The Licensed products shall only be sold, marketed, distributed or
delivered exclusively by Licensee, either directly or indirectly, in the
Licensed Territory.
2.2 Licensee shall not, directly or indirectly, sell, market, distribute or
deliver, the Licensed Products outside of the Licensed Territory without prior
written consent of Licensor, which consent may be withheld in the sole and
absolute discretion of the Licensor. Licensee shall not, directly or indirectly,
sell, distribute or otherwise deliver or cause to be sold, distributed or
delivered, the Licensed Products to any individual or entity whom Licensee
knows, or reasonably believes might, sell the Licensed Products outside the
Licensed Territory.
2.3 Nothing contained herein shall in any way restrict or prohibit Licensor
from licensing, marketing, manufacturing, selling or distributing the Licensed
Products outside the Licensed Territory and Licensee shall have no rights
therein.
3. TERM.
3.1 Term. The initial term of this License shall begin on the Effective
Date and terminate on December 31, 2005 ("Term" or "Initial Term"). The First
Annual Period shall begin on the Effective Date and end on December 31, 2001.
Each Annual Period thereafter shall commence on January 1 and end on December 31
for each year respectively.
3.2 Renewal. Licensee has the right to extend the term of this License for
four additional five year Terms of five years (each, a "Renewal Term"). Said
right must be exercised by providing written notice to Licensor at least six (6)
months and no more than nine (9) months, prior to the end of the Initial Term
and any Renewal Term. Said right may only be exercised if Licensee is in
substantial compliance with its obligations under this Agreement as of the time
of exercise of the option and as of the date of commencement of the Option. In
the event of any extension or renewal of this Agreement as provided herein, all
terms and conditions of this
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Agreement shall remain in full force and effect, except as otherwise set forth
in this Agreement. Should Licensor, in accordance with the terms of this
Agreement, exercise its right under this Agreement to terminate the rights of
Licensee hereunder, thereafter Licensee shall not have any option to extend the
term of this Agreement.
4. ROYALTY PAYMENTS. In consideration for the license granted pursuant to
this Agreement, the Licensee shall pay to Licensor, a royalty based on Net Sales
of the Licensed Products ("Royalty") as follows:
Licensed Product: Royalty Rate:
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XOXO(R) 9%
Members Only(R) 8%
Fragile(R) 9%
Baby Phat(R) 7%
Xxxxxx Brothers Golf(R) 7%
The Royalty for Xxxxxx Brothers Golf(R) and Baby Phat(R) Products shall be in
addition to the amounts payable by Licensee under the BP and BB License
Agreements. Sales to off-price channels of distribution of Licensed Products
with respect to the Owned Trademarks may not exceed twenty-five (25%) percent of
the total sales of Licensed Product during each Contract Year. Licensee may only
sell Licensed Products under the Owned Trademarks at twenty (20%) percent or
more off its normal wholesale selling price thirty days or more after such
Licensed Products have been marked down at retail unless Licensor has approved
such earlier markdown in writing. The Royalty for closeouts, seconds or
irregulars up to 25% of Annual Net Sales shall be one-half of the applicable
Royalty Rate. The Royalty on any such sales in excess of that amount shall be at
the Royalty Rates set forth in the table above. Licensee may only sell
irregulars as they develop as long as they are clearly marked "irregular."
4.1 Advance Payment of Royalty. On execution hereof the Licensee shall pay
to Licensor an advance in the amount of $3,160,000 which payment shall be
credited against the Guaranteed Minimum Royalty Payment due for the first
quarter and a portion of the second quarter of the First Year of the Term,
pursuant to Paragraph 4.4 below.
4.2 Net Sales. As used herein, "Net Sales" shall mean Licensee's gross
sales (as determined by the gross invoice amount billed to customers) of the
Licensed Products, whether or not actually paid for, less actual returns,
freight and bona fide trade discounts actually granted by Licensee. No costs
incurred in the manufacturing, selling, advertising and/or distribution of the
Licensed Products or in the payment by Licensee of any taxes of any nature
whatsoever shall be deducted from the gross sales amounts or from any royalty
payable to Licensor, except in the event of a withholding tax on royalties due
to Licensor, nor shall any deduction be allowed for any uncollectible accounts
or allowances. Licensee shall provide Licensor reasonable documentation
evidencing any allowances, deductions, returns, credits, etc. Net Sales shall
not include sales to or by the Outlet Stores.
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4.3 Minimum Sales. Licensee shall achieve the Minimum Net Sales in each
Year of the Term as follows:
Year ended December 31 Minimum Sales
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2001 $ 90,000,000
2002 $ 102,600,000
2003 $ 116,964,000
2004 $ 133,338,960
2005 $ 150,000,000
4.4 Guaranteed Minimum Royalty Payment. Licensee shall pay to Licensor a
Guaranteed Minimum Royalty Payment for each year during the term hereof, in
accordance with the terms of Schedule "A" attached hereto (the "Guaranteed
Minimum Royalty"). For each year, the Guaranteed Minimum Royalty shall be
payable in equal quarterly installments on the first day of each quarter of the
year. On April 1, 2001, Licensee shall pay Licensor that sum of $890,000,
representing the balance of the Minimum Guaranteed Royalty for the first two
quarters of 2001.
4.5 Manner of Payment; Quarterly Statements. The Royalties due Licensor
shall be calculated and paid within 30 calendar days of the end of each calendar
quarter during the term hereof, for Net Sales invoiced and delivered during the
immediately preceding calendar quarter, (the "Royalty Period). Concurrently with
the payment of each Royalty Payment, Licensee shall deliver to Licensor a
written statement showing any pre-payment of royalties made by Licensee to
Licensor and all of the Licensed Products sold and delivered during the
applicable period covered by the Royalty Payment together with such
documentation including, without limitation, bills of lading and letters of
credit, requested by Licensor to demonstrate the GPP on the Net Sales covered by
the Royalty Payment. Said statement shall be in the form and shall contain the
information as Licensor may from time to time direct. If the Licensor shall
change the form of and information required on the statement, then Licensor must
give the Licensee at least ninety (90) days notice of such change. Such royalty
statement shall be certified as accurate by a duly authorized officer of
Licensee, reciting on a customer by customer basis, the stock number, item,
units sold, description, quantity shipped, gross invoice, amount billed
customers less discounts, allowances, returns and reportable sales for each
Licensed Product. Such statements shall be furnished to Licensor whether or not
any Licensed Products were sold during the Royalty Period. If payment is not
timely made, an interest charge of prime plus 3% shall be added to the unpaid
balance following a cure period of ten (10) days until said balance, plus
accrued interest is paid in full.
4.5.1 Licensee's obligation to pay Licensor the Royalty Payment shall
accrue upon the sale of the Licensed Products regardless of the time of
collection by Licensee. For purposes of this Agreement, a Licensed Product shall
be considered "sold" upon the date when such Licensed Product is billed,
invoiced, shipped or paid for, whichever event occurs first.
4.5.2 If Licensee sells any Licensed Products to any party affiliated with
Licensee, or in any way directly or indirectly related to or under the common
control with Licensee, at a price less that the regular price charged to other
parties, the Royalty Payment
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payable to Licensor shall be computed on the basis of the regular price charged
to the other parties.
4.5.3 Upon five days prior written notice to Aris, Licensee may pay to CIT
on behalf of Aris any regularly scheduled principal installment then due under
the Term Loan. Such loan is payable in quarterly installments of $500,000 on the
first day of each calendar quarter. Any such payment shall be credited against
Royalties due as of such payment date.
4.6 Liquidated Damages. In the event that this License Agreement is
terminated as a result of Licensee's default, in addition to any amounts due for
Royalties (including Guaranteed Minimum Royalties), as liquidated damages,
Licensee shall pay Aris, within 30 days of termination, an amount equal to the
Guaranteed Minimum Royalty in effect for the year in which the Agreement is
terminated.
4.7 Books, Records and Reports. Licensee shall keep true and accurate books
of accounts and records in accordance with generally accepted accounting
principles (GAAP) with respect to all transactions involving the Licensed
Products. Should the generally accepted accounting principles applied in the
Territory differ from US GAAP, Licensee will provide, to the satisfaction of
Licensor, conversion to US GAAP requirements.
4.8 Annual Reports of Sales. For each Annual Period during the term hereof,
Licensee shall submit to Licensor an annual statement for the period ending
December 31. The year-end statement shall be submitted by March 15th of each
year for the previous calendar year. Each statement shall include a detailed and
cumulative account of all transactions of the Licensed Products, including,
without limitation, all sales, all returns, all bona fide trade discounts, the
direct cost of goods sold for Products included in Net Sales for such Year, all
royalties paid and payable, all Licensed Products returned as substandard, and
all orders canceled for non-delivery and such other information as Licensor may
from time to time reasonably request. The Chief Executive Officer and the Chief
Financial Officer of Licensee shall jointly and severally certify this report to
be correct.
4.9 Purchase of Inventory; Transfer of Orders. Within four months of the
Effective Date, Licensee shall purchase, and Licensor shall sell, F.O.B.
Licensor's warehouses, all inventory (the "Inventory") of the Licensed Product
on hand as of the Effective Date, at Licensor's cost, substantially as set
forth on Schedule C, less a reserve for obsolete inventory determined in
accordance with GAAP. The Inventory as of the Effective Date shall consist of
the Inventory as of December 31, 2000 plus such items purchased, and minus such
items sold in the ordinary course of business since that date. Licensor's
inventory of Licensed Products as of December 31, 2000 is set forth on Schedule
C. Licensor shall update such Schedule as of the close of business on the day
immediately preceding the Effective Date. Licensee shall pay for the Inventory
purchased hereunder within two business days of its shipment from Licensor's
warehouse. Licensee shall use its best efforts to use the Inventory to fill
existing orders and any new orders for Licensed Products. Any Inventory not
purchased within four months of the Effective Date to fill orders shall be
purchased by, and paid for, by Licensee within 5 days after
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the expiration of such four month period. The Inventory will be delivered free
and clear of any claims, liens and encumbrances.
5. ADVERTISING. Licensee shall not implement any advertising program or
place any advertisement using the Trademark or for the License Product not
pre-approved, in writing, by Licensor, which approval shall not be unreasonably
withheld or delayed.
6. AUDIT. Licensee shall keep complete and accurate books and records at
its principal place of business covering all transactions relating to this
Agreement. Licensor and/or its duly authorized representatives shall have the
right, at reasonable business hours and upon seven (7) business days notice, at
the place where such records are normally maintained, to inspect, audit, examine
and make copies of such books and records and all other documents and material
in Licensee's possession or control regarding any transactions relating to this
Agreement. Licensor may not audit Licensee more than once in any Contract Year
unless prior audits have uncovered Royalty underpayments of five percent (5%) or
more.
6.1 All books and records of Licensee relating to this Agreement shall be
retained by Licensee, and made available for Licensor review, for at least three
(3) years following termination of this Agreement.
6.2 The receipt or acceptance by Licensor of any of the statements
furnished or any payments made by Licensee pursuant to this Agreement shall not
preclude Licensor from reviewing the books and records or from questioning the
accuracy thereof. Licensor shall have the right no more than one time per annual
period to audit Licensee's books to determine the correctness of
payments/amounts due Licensor hereunder. The cost of said audit shall be borne
by Licensor. However, if any audit reveals an underpayment by Licensee of five
percent (5%) or more, Licensee shall pay forthwith (and in no event later than
five (5) days after completion of said audit), the cost of the audit, and all
payments found to be due, with interest thereon, at the rate of prime plus 3%,
computed from the date said unpaid payments/amounts would have been due had they
been properly accounted for until the date they are actually paid.
6.3 In the event that an audit or investigation of Licensee's books and
records is made, certain confidential and proprietary information of Licensee
may necessarily be made available to the person(s) conducting such audit or
investigation. It is agreed that such confidential and proprietary information
shall be retained in confidence by Licensor and its agents, employers and
representatives, and shall not be used by Licensor and its agents, employers and
representatives or disclosed to any third party without the prior written
consent of Licensee, unless otherwise required by law. Notwithstanding the
foregoing, such information may be used in any proceeding based on Licensee's
failure to pay its actual Royalty Payments or other obligations to Licensor.
7. QUARTERLY FINANCIAL STATEMENTS. Not later than one hundred twenty (120)
days after Licensee's fiscal year-end, Licensee shall furnish Licensor with a
balance sheet as of the end of such fiscal year of Licensee certified by the
Chief Financial Officer of Licensee as being prepared in accordance with GAAP.
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8. PRODUCT STANDARDS. Licensee shall not sell, distribute or otherwise
market the Licensed Products unless each product has received the prior written
approval of Licensor prior to distribution thereof, subject to the terms and
conditions of this Paragraph 8.
8.1 Omitted.
8.2 Approval of Design Concept. As soon as Licensee has developed a design
for a Licensed Product that it desires to produce, sell and market, Licensee
shall submit one (1) design sample or drawings thereof if samples are not
available, at no cost to Licensor, of said product, along with color and fabric
samples, if applicable, to Licensor for approval, along with one (1) complete
set of all promotional and advertising material associated therewith.
8.2.1 Within ten (10) working days following the confirmed receipt of any
design sample, Licensor shall either approve or disapprove the product or
indicate changes to be made. Failure by Licensor to so note approval,
disapproval or changes within said ten (10) working days shall be deemed
approval. In the event changes are required, Licensee shall be required to
resubmit the revised design sample or drawings thereof if samples were not
originally submitted, for approval with the recommended changes. Subsequent
re-submissions shall occur until Licensor either approves or rejects the design
in question, subject to the foregoing 10 day period. However, in the event that
a dispute arises as to the determination of same, Licensor shall have the final
decision with respect thereto. Licensee shall not produce a Licensed Product for
manufacturing, marketing, sale, distribution, advertising or otherwise, which
has not received the approval of the Licensor as set forth herein. Once the
Licensor has approved the design samples, Licensee shall not materially depart
therefrom without Licensor's prior written consent.
8.3 Approval of Production Samples. As soon as Licensee has produced its
samples for sale of any proposed Licensed Product that has received design
approval as set forth above; Licensee shall submit one sample of each Licensed
Product in the form that Licensee plans to have produced to Licensor for
approval, ("Sample"). All submissions of Samples for approval by Licensor shall
be at the sole expense of the Licensee. Licensee shall use such sample approval
forms and supply Licensor with such information in connection therewith, as
Licensor shall from time to time reasonably direct. Within ten (10) business
days following confirmed receipt, Licensor shall either approve, disapprove or
indicate changes to be made in the Sample. Failure by Licensor to so note
approval, disapproval or changes within said ten (10) business days shall be
deemed approval. In the event changes are required, the approval form shall be
resubmitted for approval with the recommended changes. Subsequent re-submissions
shall occur until Licensor either approves or rejects the sample in question,
subject to the foregoing 10 day period. All approvals shall be at Licensor's
reasonable discretion. An approved Sample of each Licensed Product shall be
provided to Licensor for its historical sample line at Licensee's cost. The
approved Samples shall be the standard by which future production quality shall
be judged. The Licensed Products produced for sale and/or delivery to any
customer of Licensee or anyone else, shall be of at least the same or better
quality than that which was approved by Licensor as a production sample
hereunder.
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(a) Licensee shall be responsible for making all prototypes and
samples as well as for the production of Articles, and Licensee will bear
all cost in connection therewith.
8.4 Approval Prior to Delivery. Licensee shall deliver no Licensed Product
to a customer unless it has received the design and sample approvals required by
paragraphs 8.1 and 8.2 above.
8.5 Omitted.
8.6 "Off Priced" Goods. During the Term of this Agreement, Off-Priced Goods
shall mean any Licensed Products that are either not sold by Licensee during the
normal course of business, seconds, overruns, damaged, off-priced, discontinued
or otherwise Licensed Products that are not sold during the selling season for
same (hereinafter referred to as "off-priced goods"). (1) Any and all
disposition of Licensed Products or articles constituting close-outs, damages,
off-price goods, excess inventory, irregulars or other items constituting other
than regular full price products sold to retail customers in the Territory, must
be approved by Licensor prior to disposition, which approval shall not be
unreasonably withheld, conditioned or delayed.
(2) All identification shall be removed from all Licensed Products sold by
Licensee as other than first-quality merchandise unless to do so would render
such goods unsalable, in which case Licensee shall xxxx them to clearly
indicate, in a form acceptable to Licensor, that they are "irregular"; and such
Licensed Products and all close-out products shall be sold only if there is no
advertising or promotion of the Licensed Products in connection with the
irregular articles or close-out articles.
9. QUALITY CONTROL. Licensor has the right to make on site inspections at
any reasonable time and on reasonable notice at manufacturing and distribution
facilities of Licensee or any of its third party manufacturers to ensure the
ongoing quality of the Licensed Products. If, at any time, Licensor reasonably
determines that a Licensed Product is of lesser quality than the production
sample approved pursuant to Paragraph 8.2 hereof, Licensor shall give Licensee
written notice thereof. Licensee shall take immediate steps to restore the
quality of and cure the defects upon receipt of said notice and cease production
and distribution of that Licensed Product until its quality is improved to the
satisfaction of Licensor.
10. LABELING. All Licensed Products and all promotional and advertising
material shall contain all appropriate notices, whether copyright, trademark or
otherwise as required by Licensor and as may be required by law. On all labels
and hang tags, and Licensed Products the circle (R) or (TM) as appropriate shall
appear denoting United States Trademark registration or pending registration,
and where applicable, and subject to the direction of Licensor, all items
subject to copyright protection shall bear a proper and complete circle (C)
copyright notice as specified by law. Licensor shall have the right from time to
time to designate the exact symbols or language to be used by Licensee to denote
ownership by Licensor of any intellectual property, be it Trademarks, copyrights
or other property. Licensee understands the importance of
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maintaining the security and integrity of all trademarked labeling used on the
Licensed Products. Licensee further agrees to take commercially reasonable
efforts to maintain a strict, accurate, and current inventory of all labels
throughout the manufacturing process of the Licensed products so as to preclude
any diversion of the labels to other than authorized licensees. No additional
labels, hang tags or identification shall appear on the Licensed Products unless
prior written approval of Licensor is obtained, however, Licensee may include a
separate label of its sole choice for care, content, size and country of origin.
10.1 Label Inventory. In each annual or year-end statement, Licensee shall
furnish to Licensor a current inventory of all labels designated in Paragraph
10.
11. TRADEMARKS & COPYRIGHTS. Licensor may seek, in its own name and at its
own expense, appropriate patent, trademark or copyright protection for the
Licensed Products.
11.1 It is understood and agreed that Licensor shall retain all right,
title and interest in the Trademarks and copyrights and designs of the Licensed
Products, as well as any modifications or improvements made thereto by Licensee.
Upon termination or expiration of this Agreement, Licensor shall be permitted to
make use of same for any purpose whatsoever, and Licensee shall have no right to
any of the foregoing.
11.2 Licensee agrees to execute any documents reasonably requested by
Licensor to effect any of the above provisions.
11.3 Licensee acknowledges Licensor's exclusive rights in the Trademarks
and designs and further acknowledges that the designs and/or the Trademarks are
unique and original to Licensor and that Licensor is the owner thereof. Licensee
shall not, at any time during or after the effective Term of the Agreement
dispute or contest, directly or indirectly, Licensor's exclusive right and title
to the designs and/or the Trademarks or the validity thereof. Licensor however,
makes no representation or warranty with respect to the validity of any patent,
trademark or copyright, which may issue or be granted therefrom.
11.4 Licensee acknowledges that the Trademarks have acquired secondary
meaning.
11.5 Licensee agrees that its use of the designs of the Licensed Products
and/or the Trademarks inures to the benefit of Licensor and that the Licensee
shall not acquire any rights in the designs of the Licensed Products and/or the
Trademarks.
11.6 The parties acknowledge that the faithful representation of the
Trademarks, as they appear in the applications and registration of the Office of
the Patent and Trademark Office of the United States and in applications and
registration in the Licensed Territory, is mandatory on the part of Licensee
with respect to any reproduction used by Licensee, whether it appears on the
Licensed Products or in print or is otherwise displayed in the media. Licensee
further agrees that the Trademarks will always be faithfully and exactly
reproduced, unless prior written authorization for modification thereof is
received from Licensor.
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11.6.1 Each first use of the Trademarks by Licensee shall be submitted to
Licensor for approval as set forth in this Agreement.
11.7 Copyright or Trademark Infringement or Misuse & Litigation. If
Licensee becomes aware of any infringement of Licensor's copyrights or
Trademarks or if Licensee becomes aware of any marks confusingly or
substantially similar to the Trademarks, Licensee shall immediately notify
Licensor thereof.
11.7.1 Prosecution of Infringement Action. Licensor shall have the first
option in its discretion, to institute and prosecute lawsuits against third
persons for infringement of the Trademarks. Licensor shall not be required to
institute legal action if, in its sole and absolute discretion, the probability
of success therein or results of successful litigation do not justify the time
and expense thereof. In the event that Licensor determines in its sole and
absolute discretion not to prosecute any such litigation within 45 days of
receiving a written request from Licensee to commence such action, then in such
event Licensee shall have the right, in its discretion, to institute and
prosecute lawsuits against third persons for infringement of the rights licensed
in this Agreement only. Each party shall cooperate fully with each other in any
proceeding to protect the Trademarks and copyrights and other intellectual
property rights granted herein.
11.8 Corporate Name. Licensee shall not be permitted to use any of
Licensor's trademarks or anything substantially similar thereto as part of its
corporate name.
12. WARRANTIES & OBLIGATIONS.
12.1 Each Licensor represents and warrants that; (a) it has the right and
power to grant the licenses herein; and (b) that it is not party to any other
agreements in conflict herewith, (c) each Licensor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business as a
foreign corporation in each additional jurisdiction where the failure to so
qualify would have a material adverse effect. Each Licensor has all requisite
power and authority (corporate and otherwise) to own its properties and to carry
on its business as now being conducted and to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby; (d) the execution, delivery and performance by each Licensor of this
Agreement and the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of each Licensor; (e) this Agreement
has been duly executed and delivered by each Licensor, and (assuming due
execution and delivery by Purchaser) constitutes a valid and binding obligation
of each Licensor, enforceable against each Licensor in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles; and (f) no other person or entity has any claims
or rights in or to any interest being granted to Licensee hereunder.
12.2 To the best of Licensor's knowledge, it has no actual knowledge that
the Trademarks infringe any valid right of any third party, and no claims have
been made or actions commenced with respect thereto.
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12.3 Licensee shall be solely responsible for the manufacture, production,
sale and distribution of the Licensed Products and will bear all related costs
associated therewith.
12.4 Licensee represents and warrants that it has the right and power to
enter into this Agreement and that there are no other agreements with any other
party in conflict herewith. 12.5 Other than with respect to the amounts due for
first quarter minimum guaranteed royalties as set forth in Section 1.8, neither
ECI nor BP is in default under the BP or BB License Agreement.
12.6 Xxxxxx Brothers has informed ECI that it may sell excess inventory of
products covered by the BB Agreement to off-price retailers.
12.7 Following the Effective Date, Licensors shall continue advertising the
Licensed Products covered by the Owned Trademarks to the same extent currently
advertised and to the extent reasonably necessary to support continued growth of
the sales of Licensed Products at its sole cost and expense.
12.8 Licensee represents, warrants and agrees that, as of the Effective
Date and during the Initial Term, it has, and will have, capital of no less than
$7 million.
13. INDEMNITY.
13.1 Licensor shall indemnify, defend and hold Licensee, its officers,
directors, employees and agents harmless from any and all liability, reasonable
attorney's fees, costs and expenses from any claims asserted against Licensee or
Licensor with respect to Licensee's use of the Trademarks only in accordance
with the terms of this Agreement. Notwithstanding the foregoing, this indemnity
shall only be applicable in the event of a final decision by a court of
competent jurisdiction from which no appeal of right exists. This indemnity does
not cover any modifications or changes made to the Trademarks by Licensee.
Licensor shall be entitled, at its option to provide legal counsel to represent
Licensee, reasonably acceptable to Licensee, at Licensor's cost. Licensor shall
not be required to pay for Licensee's independent legal counsel, if Licensor
provides legal counsel to represent Licensee with respect to any claim. Nothing
herein is intended to nor shall it relieve Licensee from liability for its own
acts, omissions, or negligence.
13.2 Licensee shall defend and indemnify Licensor, its officers, directors,
agents, and employees against all costs, expenses and losses (including
reasonable attorney fees and costs) incurred through claims of third parties
against Licensor or Licensee based on the manufacture, marketing, sale,
advertising (except to the extent that any claim arises out of any advertising
expressly approved in writing by Licensor), distribution of the Licensed
Products designed by Licensee including, but not limited to, actions founded on
product liability on all products manufactured by Licensee.
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13.3 Each party will promptly notify the other of any claims or actions to
which the foregoing indemnification may apply. Licensee shall not settle any
claim with respect to the Trademarks or the Licensed Products without the prior
written consent of Licensor, which shall not be unreasonably withheld.
14. GOODWILL. Licensee recognizes the great value of the publicity and
goodwill associated with the Trademarks, Copyrights and designs of the Licensed
Products, and agrees that the value of the goodwill exclusively belongs to
Licensor.
15. COPYRIGHT NOTICE. Licensee shall place a legally sufficient copyright
notice which protects the rights of Licensor on each and every design, style,
garment, creation or writing which is capable of protection pursuant to the
copyright laws of the United States of America and the Licensed Territory. Any
public distribution of goods bearing copyrightable works of Licensor by Licensee
without a copyright notice as required above, is unauthorized and a violation of
this Agreement.
16. STOCK ISSUANCES. (a) Five days following the Effective Date and on each
of the first four anniversary dates of Effective Date. Aris shall issue to
Licensee such number of shares of its common stock determined by dividing
$1,000,000 by the average closing price of such Common Stock for the five
trading days immediately preceding the date on which such shares are to be
issued. (b) Licensee hereby represents and warrants to Aris that: (i) the Shares
to be acquired by Licensee pursuant to this Agreement are being, and will be,
acquired for its own account and with no intention of distributing or reselling
such Shares or any part thereof in any transaction that would be in violation of
the securities laws of the United States; (ii) Licensee understands that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act"), and cannot be resold unless they are subsequently registered under
the Act or unless an exemption from such registration is available thereunder;
and (iii) Licensee is an "accredited investor" within the meaning of Rule 501(a)
under the Act, and by reason of its business and financial experience.
17. TERMINATION. The following termination rights are in addition to the
termination rights provided elsewhere in this Agreement.
17.1 Immediate Right of Termination. Licensor shall have the right to
immediately terminate this Agreement by giving written notice to Licensee in the
event that Licensee does any of the following:
17.1.1 Licensee fails to pay the Royalties (whether actual or Minimum
Guaranteed) or amounts due on the Inventory Note within fifteen (15) days of
their due date upon five (5) days prior notice.
17.1.2 Licensee, after having commenced the sale of the Licensed Products,
fails to continuously sell Licensed Products for two (2) consecutive selling
seasons;
17.1.3 Licensee 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 any
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bankruptcy law, or if the Licensee discontinues its business or a receiver is
appointed for the Licensee or for the Licensee's business and such receiver is
not discharged within ninety (90) days;
17.2 Termination After Notice. Subject to the provisions contained in
Paragraph 17.7 below, Licensor shall have the right to terminate this Agreement
upon the occurrence of the following events:
17.2.1 Omitted.
17.2.2 Licensee breaches any provision of this Agreement, (other than those
specifically noted in Paragraph 17.1 above) including, but not limited to, the
unauthorized assertion of rights in the designs and/or the Trademarks;
17.2.3 Licensee fails to promptly discontinue the distribution or sale of
the Licensed Products, Trademarks or Copyrights or the use of any packaging or
promotional material which does not contain the requisite notices or labels;
17.2.4 Licensee has not taken steps to restore the quality of and cure the
defects with respect to the Licensed Products in accordance with Paragraph 9 of
this Agreement.
17.2.5 Licensee fails to obtain the approval of Licensor for any Licensed
Products as required by Paragraph 8 above, or Licensee sells, manufactures or
distributes a Licensed Product without the prior approval of Licensor as
required by the terms of this Agreement.
17.3 Intentionally Omitted.
17.4 Intentionally Omitted.
17.5 Default. Subject to the provisions of Paragraph 17.7, in addition to
the foregoing rights of Licensor, either party may terminate this Agreement and
the rights of the other party if either party is in default or has materially
breached any of the terms of this Agreement, or any additional or supplemental
agreements that may be entered into between the parties.
17.6 Acts Detrimental to the Brand. Licensee acknowledges that it is only
one of multiple licensees of the Trademark; that its actions and omissions can
greatly impact the business of Licensor, the business of other licensees of
Licensor and the value of the Trademark(s); and that the quality of Licensee's
production, timely delivery of approved orders, and conduct of its business can
greatly impact the business of other licensees of Licensor and the value of the
Trademarks. As a result, in the event that the Licensee takes any action which
is, in the reasonable opinion of Licensor, materially harmful to the Trademarks
or the business of Licensor, Licensor's other licensees, or the Trademarks, then
Licensor shall have the right to terminate all rights of Licensee under this
Agreement.
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17.7 Cure Period. Before Licensor terminates the rights of Licensee under
this Agreement, (except with respect to the provisions contained in Paragraph
17.1 which are grounds for immediate termination), Licensor shall give Licensee
written notice, setting forth the basis for such termination, default or failure
to perform. Licensee shall have twenty-one (21) days from and after mailing of
such written notice to cure such default, breach or failure to perform. In the
event that such breach, default or failure to perform is not cured within said
twenty-one (21) days (or, if not capable of being cured within such period,
adequate steps to cure have not been commenced within such period, provided
Licensee diligently continues to pursue such curative steps) then Licensor may
forthwith terminate all of Licensee's rights hereunder.
18. POST TERMINATION RIGHTS. All of the following rights and duties shall
be applicable upon any termination of Licensee's rights under this Agreement,
whether by expiration of the term hereof or by earlier termination pursuant to
the provisions hereof.
18.1 Inventory. Not less than thirty (30) days prior to the expiration of
this Agreement or earlier termination thereof, Licensee shall provide Licensor
with a complete inventory of all inventory of the Licensed Products then on-hand
and all piece goods for same (the "Inventory").
18.2 Deletion of Trademark. Upon expiration or earlier termination of this
Agreement, Licensee shall take all steps necessary to delete any references to
the Trademarks and similar words from any signs, business names, or any use in
advertising, print or otherwise, consistent with its liquidation rights
contained in Section 18.4. Notwithstanding the foregoing, in the event that this
Agreement is terminated for cause as provided in Paragraphs 17.1 and 17.2 above,
then Licensee shall delete any references to the Trademarks and similar words
anywhere same is used within thirty (30) days from and after the date of such
termination.
18.3 Disposition of Samples, Patterns, Markers, Labels and Fasteners on
Termination. Any samples, patterns, markers and labels or fasteners (snaps,
buttons, etc.) on which the Trademarks appear, which are not affixed to a
finished Licensed Products or necessary for work in process at the time of
termination, shall be delivered to Licensor by Licensee within sixty (60) days
of the expiration or termination of this Agreement, except as provided in
Paragraph 18.4 below. An inventory of such items on hand upon expiration or
termination of this Agreement shall be delivered to Licensor within twenty (20)
days of the expiration or termination. All such items of inventory shall be used
in accordance with this provision and no other disposition of these items shall
occur. Licensor shall pay Licensee for all such labels and fasteners at a price
equal to Licensee's cost thereof, including freight, and at no cost other than
freight for such samples, patterns and markers; such payment to be made within
sixty (60) days after delivery.
18.4 Liquidation of Goods. Upon the expiration or termination of Licensee's
rights under this Agreement, Licensee shall have the right to complete all work
in process, and to complete bona fide purchase orders in hand on the date of
such expiration or termination. Licensee shall have the right to use the items
of inventory listed in Paragraph 18.3 above for completion of work in process.
Licensee shall no longer have the right to use the Trademarks in any form or in
any manner, except for the purpose of selling off the existing inventory of the
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Licensed Products. Licensee shall have one hundred eighty (180) days from the
date of termination of this Agreement to dispose of its inventory of the
Licensed Products. If any of the Licensed Products remain unsold after the
expiration of one hundred eighty (180) days, Licensee shall then remove the
Licensed Products from its inventory and return such unsold inventory to
Licensor at no cost to Licensor, other than freight. All sales of the remaining
inventory shall be sold in accordance with the terms of this Agreement, and the
accounting and payment shall be made within thirty (30) days after the close of
the one hundred eighty (180) day sell off period.
18.5 Except as provided in Section 18.4 above, upon expiration or earlier
termination of this Agreement, all of the rights of Licensee under this
Agreement shall forthwith terminate and immediately revert to Licensor and
Licensee shall immediately discontinue all use of the property and the like, at
no cost whatsoever to Licensor.
18.6 Licensee hereby agrees that, at the expiration or earlier termination
of this Agreement for any reason, Licensee will be deemed automatically to have
assigned, transferred and conveyed to Licensor any and all rights, goodwill or
other right, title or interest in and to the Trademarks, trade dress,
copyrights, designs or any other intellectual property rights which may have
been obtained by Licensee as a result of this License.
19. ASSUMPTION OF CERTAIN OPERATIONS AND OBLIGATIONS.
19.1 Assumption of Operations. Licensee shall assume and discharge in due
course all liabilities arising from and after the Effective Date with respect to
the operations of XOXO, BP and ECI (as related to Members Only(R) and Xxxxxx
Brothers Golf(R)) as they relate to the manufacture, marketing, promotion, sale
and distribution of Licensed Products including, without limitation, all payroll
and related benefits, work in process and open letters of credit, which letters
of credit are set forth on Schedule D. In connection with the foregoing,
commencing four weeks after the Effective Date, all of the employees involved
with such operations shall become employees of Licensee except for those
persons: (x) employed at Licensor's New Bedford, Massachusetts warehouse; (y) by
the retail stores (other than at the outlet stores); and (z) by Aris in a
corporate or finance capacity. Notwithstanding the foregoing, Licensee shall
advance to Licensor, one day prior to its payment date, the full amount of all
payroll and payroll related costs incurred in connection with the operations
which become due after the Effective Date. Licensee shall have full control and
authority with respect to operations including, without limitation, decisions to
employ or terminate employment. With respect to obligation subject to
contractual commitments, Licensee may terminate the services or property subject
to such commitments without liability to Licensee, but must pay for any such
assets or services while using them. Notwithstanding the foregoing, from and
after the Effective Date, Licensee hereby agrees to assume and fully and
faithfully perform all of the obligations, duties and responsibilities of the
tenant under (A) the Lease Agreements listed on Schedule E (except that, upon
thirty days written notice to Aris given 60 days after the Effective Date, it
may elect not to continue the lease for the Xxxxxx Brothers Golf premises); (B)
the employment agreements with Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxx and Xxx Rail (but with respect to Rail for the six months following the
Effective Date unless Licensee elects to continue to employ him); and (C) the
other leases or agreements set forth on Schedule F. Notwithstanding the
foregoing, Licensee shall not be responsible for any severance payments to Xxxxx
Xxxxx, Xxxxx
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Xxxxx or Xxxxxx Xxxxxx under their respective employment agreements. One-half of
the amount payable to Xxxxxx Xxxxxx (up to $250,000 per year) shall be credited
against the royalties due, which shall be taken in equal quarterly installments.
Licensee shall assume the leases and other agreements identified on Schedule G
that relate to operations in California for the 90 days following the Effective
Date. In addition, for the 90 days following the Effective Date, Licensee shall
reimburse Aris, on demand, for one-half of all costs, expenses and payment due
under the agreements and leases identified on Schedule G that relate to
operations in New York. Thereafter, Licensee will be deemed to have assumed each
such lease or agreement (whether relating to California or New York) unless,
within 60 days after the Effective Date, it shall have given written notice to
Aris that it elects not to assume such lease or agreement after the 90th day, in
which case it shall deliver possession to Aris of the premises or equipment
covered by such lease or agreement. Licensee agrees to hold the respective
tenant and Aris harmless from and against all claims, losses, liabilities and
expenses, including reasonable attorney's fees, incurred as a result of or in
connection with any failure of Licensee to perform any obligation under this
Section. Aris hereby agrees to hold Licensee harmless from and against all
claims, losses, liabilities and expenses arising under such Lease as a result of
the respective tenant's activities prior to the Effective Date. Licensee has
permission to hire Xxxxxx Xxxxxxxx on an "at will" basis without assuming his
Agreement.
19.2 Sublet of Outlet Store Leases and Business. As of the Effective Date,
Marcade shall license to Licensee all of the Outlet Stores identified on
Schedule B. Licensee agrees to hold Aris harmless from and against all claims,
losses, liabilities and expenses, including reasonable attorney's fees, incurred
as a result of or in connection with any failure of Licensee to adhere to the
aforementioned covenant. Aris hereby agrees to hold Licensee harmless from and
against all claims, losses, liabilities and expenses arising under the Leases as
a result of Marcade's activities prior to the Effective Date. On the Effective
Date, the employees of the Outlet Stores shall become Licensee's employees, and
Licensee shall have full control and authority over such employees and the
operations of such Stores and shall pay all costs associated with the operation
of such Stores.
19.3 Reimbursement by Licensor. Licensor shall reimburse Licensee for any
"markdown money" or similar credit demanded by any of Licensor's customers with
respect to sales made by Licensor prior to the Effective Date. As a condition to
being entitled to such credit, Licensee shall provide Licensor with prompt
written notice of any such claimed credit and Licensor shall be given an
opportunity to negotiate such claimed credit with the customer. If Aris does not
cause the customer to reverse the chargeback or credit within 30 days of
Licensee's notice to Licensor of the chargeback or credit, Licensee may credit
it against the next Royalty Payment due.
19.4 Continued Support for XOXO Licensees. Licensee shall provide such
assistance to XOXO's existing licensees as XOXO is required to provide under its
license agreements.
19.5 Sales to XOXO Retail Stores. With respect to any XOXO Retail Stores
owned or controlled by Licensor, Licensee shall sell to Licensor any Licensed
Products manufactured by Licensee pursuant to this Agreement and ordered by
Licensor in reasonable
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quantities and same shall be delivered to Licensor's Retail Stores in accordance
with the terms of such order(s). The price to Licensor for such Products shall
be 20% less than Licensee's regular wholesale prices. All Licensed Products so
ordered by Licensor shall be paid by Licensor to Licensee within 120 days of the
sale of same. No Royalty Payments shall be due with respect to such sales.
19.6 Cooperation. The parties will cooperate with each other to avoid
defaults under any assumed agreement by virtue of any assignment or assumption
without obtaining any consent from the other party to such agreement.
20. NON-ASSIGNABILITY. Neither this Agreement nor any of the Licensee's
rights hereunder are assignable by Licensee, without the prior written consent
of Licensor, which shall not be unreasonably withheld or delayed. The transfer
of more than fifty (50%) percent in the aggregate of the shares of beneficial
ownership of Licensee will be deemed an assignment. Upon notice to Licensee,
Licensor may assign its rights under this Agreement or the payments to be made
by Licensee to Licensor hereunder.
20.1 Sublicense. Licensee may not sublicense its rights under this
Agreement without the prior written consent of Licensor, which approval or
disapproval shall be subject to the sole and absolute discretion of Licensor.
Any sublicense or attempted sublicensing by Licensee without the prior written
consent of Licensor shall constitute a breach of this Agreement. Any sublicense
consented to by Licensor must provide that the sublicensee shall be bound by all
of the terms and conditions of this Agreement. Approval by Licensor to one
sublicense shall not relieve the Licensee of any of its obligations under this
Agreement, including, without limitation, its obligations set forth on Schedule
"A".
20.2 Manufacturing. Licensee shall have the right to subcontract the actual
manufacture of the Licensed Products, provided that all such subcontractors
agree to be bound by the terms and conditions of this Agreement in all respects
or such sub-contractor Agreement as may be provided by Licensor to Licensee
specifically for use by Licensee's sub-contractors. Prior to any third party
manufacturing any Licensed Product, it must enter into an Agreement in the Form
attached hereto as Schedule C. Licensee must provide Licensor with the
appropriate acknowledgment of the terms of this Agreement or such sub-contractor
Agreement as prepared by Licensor, from such subcontractor prior to using such
subcontractor. In the event Licensee does its own manufacturing, it must comply
with all of the terms and conditions of the Manufacturing Agreement.
20.3 No Hypothecation. Licensee shall not pledge, hypothecate, mortgage,
grant liens in or upon, grant security interests in, or use as collateral any of
Licensee's rights with respect to the Trademarks under this Agreement.
21. GENERAL PROVISIONS.
21.1 Notices. Any notice required to be given hereunder shall be in writing
and delivered personally to the other designated party at the address set forth
below or mailed by certified or registered mail, return receipt requested or
delivered by a recognized national
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overnight courier service, in a sealed envelope, with postage thereon fully paid
and addressed as follows:
If to Licensor: Xx. Xxxxxx Xxxxx cc: Xxx Xxxxxx
Aris Industries
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
With copies to: Mr. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to Licensee: Xxxx Xxxxx, President
Eagle Apparel Group/ Groupa Xtra
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX
Fax: (000) 000-0000
With copies to: Xxxxxxx Xxxxxx, Esq.
0000 Xxxxxx X
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
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.
21.2 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes all
prior negotiations, dealings, agreements and understandings of the parties in
connection therewith and is intended as a final expression of their Agreement.
21.3 Severability. The invalidity or unenforceability of any provision
hereof shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.
21.4 Amendment. No amendment, modification or alteration of this Agreement
shall be valid unless it is in writing and signed by all parties hereto.
21.5 No Agency or Joint Venture. This Agreement does not constitute and
shall not be construed as constituting an agency, partnership or joint venture
between the parties. Licensee shall have no right to obligate or bind Licensor
in any manner whatsoever, and nothing herein contained shall give, or is
intended to give, any rights of any kind to any third persons.
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21.6 Consent to Injunction. Each party acknowledges that the rights and
privileges granted hereunder are of a special, unique and extraordinary nature
and character, and that a breach of any provision hereof would cause the other
party irreparable injury and damage, the measure of which could not be
adequately compensated at law. Neither this provision nor the exercise by a
party of any of its rights hereunder shall constitute a waiver by such party of
any other rights which it may have to damages or otherwise.
21.7 Governing Law. Each party irrevocably submits to the exclusive
jurisdiction and venue of any New York State or United States Federal Court
sitting in the City and County of New York over any suit, action or proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby, and waives any objection to venue of such courts.
21.8 Service of Process. Service of process on any party hereto in any
action arising out of or relation to this Agreement shall be effective if sent
in accordance with the procedures set forth in Section 21.1.
21.9 Attorney Fees and Costs. If either party to this Agreement shall bring
any action against the other, declaratory or otherwise, arising out of this
Agreement, the losing party shall pay to the prevailing party a reasonable sum
for attorney fees incurred in bringing or defending such suit and/or enforcing
any judgment granted therein, all of which shall be deemed to have accrued upon
the commencement of such action and shall be paid whether or not such action is
prosecuted to judgment. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorney fees and
costs incurred in enforcing such judgment. For the purposes of this section,
attorney fees shall include, without limitation, fees incurred in the following:
(1) post judgment motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; (4) discovery; and (5) bankruptcy
litigation.
21.10 Interpretation. The parties hereto are sophisticated and have been
represented by lawyers throughout this transaction, who have carefully
negotiated the provisions hereof. As a consequence, the parties do not believe
that any presumptions relating to the interpretation of contracts against the
drafter of any particular clause should be applied in this case and therefore
waive its effects.
21.11 Recitals. The recitals set forth on the first page of this Agreement
are incorporated herein by this reference as though fully set forth herein.
21.12 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Licensee and its successors and assigns and shall
also be binding upon and shall inure to the benefit of Licensor and its
successors and assigns.
21.13 Headings. The subject headings of the Sections of this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any term or provisions hereof.
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21.14 Parties Benefitted. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provisions give any third persons any right of
subrogation or action against any party to this Agreement.
21.15 Confidentiality. The parties hereto agree that the terms of this
Agreement shall be kept confidential and not disclosed to any third party except
in the ordinary course of business or if required by law, without the prior
written consent of the other party hereto. The parties acknowledge that prior to
and/or during the term of this Agreement that they may be given access to or
become acquainted with "Confidential Information" (as such term is defined
below), which is of great value to the other party. The parties further
acknowledge that maintaining the confidentiality of all such Confidential
Information is critically important to each party. As a result of the foregoing
the parties shall not either during or after the term of this Agreement, use or
disclose, directly or indirectly, to anyone other than representatives of the
other or other persons designated by such party, any information, data,
documents, customer list(s), designs and styles, manufacturing procedures,
company policies, or other materials of any kind or nature in any way related to
each party, their business affairs or operations, even if acquired by either
party in the course of the performance of their obligations hereunder and even
if provided to such party by the other ("Confidential Information"). The parties
acknowledge that a breach of the provisions of this paragraph will cause the
non-breaching party irreparable harm for which there is no adequate remedy at
law, and therefore, in addition to any and all other rights or remedies
available to the non-breaching party, the non-breaching party shall be entitled
to injunctive relief and all other remedies provided by law or equity. Such
remedies shall include, without limitation, the right to prevent dissemination
of any Confidential Information.
21.16 Further Action. Each party hereto agrees to perform any further acts
and to execute and deliver any documents, which may be reasonably necessary to
carry out the provisions hereof.
21.17 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, which shall be deemed
to constitute one and the same instrument.
21.18 No Implied Waivers. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the full right to require such performance at any time thereafter.
The waiver by either party of a breach of any provision hereof shall not be
construed or held to be a waiver of the provision itself.
22. SHOWROOM FOR LICENSED PRODUCTS AND TRADE SHOWS. Licensee acknowledges
the importance of providing customers with the ability to view all of the
Licensee's Licensed Products in one location, and will provide a segregated
portion of its showroom exclusively for the display of Licensed Products. With
respect to Licensee's showroom, Licensee shall provide, display and maintain
complete current sample lines of all its Licensed Products.
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IN WITNESS WHEREOF, the parties hereto, have entered into this Agreement
effective on the day and year set forth above.
LICENSOR:
EUROPE CRAFT IMPORTS, INC.
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By: Xxxxxx Xxxxx, Chief Executive Officer Dated: January ___, 2001
BP CLOTHING COMPANY, INC.
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By: Xxxxxx Xxxxx, Chief Executive Officer Dated: January ___, 2001
ARIS INDUSTRIES, INC.
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By: Xxxxxx Xxxxx, Chief Executive Officer Dated: January ___, 2001
XOXO CLOTHING COMPANY, INCORPORATED
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By: Xxxxxx Xxxxx, Chief Executive Officer Dated: January ___, 2001
MARCADE REALTY CORP.
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By: Xxxxxx Xxxxx, Chief Executive Officer Dated: January ___, 2001
LICENSEE:
GRUPO EXTRA OF NEW YORK, INC.
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By: Xxxx Xxxxx Dated: January ___, 2001
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SCHEDULE"A"
1. TRADEMARKS:
Members Only(R), XOXO(R), Fragile(R), Xxxxxx Brothers Golf(R) and Baby
Phat(R)
2. LICENSED TERRITORY:
United States of America, Puerto Rico, the Caribbean Islands and
Israel
3. LICENSED PRODUCTS:
Under the XOXO trademark: women's clothing, jeanswear and sportswear
Under the Fragile trademark: jeanswear and sportswear
Under the Members Only trademark: sportswear and outerwear
Under the Xxxxxx Brothers Golf trademark: only as permitted in the BB
License Agreement.
Under the Baby Phat trademark: only as permitted in the BP License
Agreement.
XOXO(R), Fragile(R) and Members Only(R) are sometimes referred to as the "Owned
Trademarks."
4. GUARANTEED MINIMUM ROYALTY:
Annual Period Ending Minimum Royalty
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December 31, 2001 $ 8,100,000
December 31, 2002 $ 9,234,000
December 31, 2003 $ 10,526,000
December 31, 2004 $ 12,000,500
December 31, 2005 $ 13,500,000
For each year thereafter, the Guaranteed Annual Minimum Royalty shall be
the greater of $13,500,000 or the Royalties due based on sales in the
immediately preceding year.
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