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EXHIBIT 10.8
CONFIDENTIALITY REQUEST PENDING
LICENSE AGREEMENT
AGREEMENT made as of April 27, 1997, by and between XXXXXX XXXXX, INC., a
New York corporation having its principal business office at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Licensor"), and DHA HOME INC., a
Delaware corporation having its principal business office at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Licensee").
W I T N E S S E T H :
WHEREAS, Licensor is the licensee for the Licensed Xxxx (as defined in
Section 1.1 hereof) for the Licensed Articles (as defined in Section 1.1
hereof) pursuant to an exclusive, perpetual license from the Xxxxxx Xxxxx
Trademark Trust (the "Trust"), the owner of such Licensed Xxxx for Licensed
Articles;
WHEREAS, Licensor and Licensee had entered into a License Agreement, dated
as of May 26, 1994, as amended (the "Terminated License Agreement"), under
which Licensee had been granted the right to use the Licensed Xxxx on the
Licensed Articles in the Licensed Territory (as defined in Section 1.3 hereof),
which terminated effective April 26, 1997; and
WHEREAS, Licensee desires to use the Licensed Xxxx on the Licensed
Articles, and Licensor desires to grant to Licensee a license to use the
Licensed Xxxx on the Licensed Articles on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, Licensor and Licensee do hereby respectively grant,
covenant and agree as follows:
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1. Grant of License.
1.1 Grant. Licensor hereby grants to Licensee an exclusive license
(the "License") to use the trademark set forth on Schedule A, attached hereto
(hereinafter referred to collectively as the "Licensed Xxxx") on and in
connection with the manufacture, distribution and sale at wholesale throughout
the Licensed Territory (as defined in Section 1.3 hereof) of the products set
forth on Schedule B, attached hereto which have been approved by Licensor, from
time to time for each collection, for sale in accordance with this Agreement
(hereinafter referred to collectively as the "Licensed Articles"). The License
shall include the right to use the Licensed Xxxx to advertise, market and
promote the Licensed Articles as approved by Licensor in accordance with this
Agreement.
1.2 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
1.3 Licensed Territory. The "Licensed Territory" shall mean (a) the
countries specified on Schedule C, attached hereto, as such schedule may be
modified from time to time by written amendment to this Agreement signed by
both parties hereto and [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY
REQUEST]
1.4 Limitations. All Licensed Articles shall bear the Licensed Xxxx
except as hereinafter provided, and no Licensed Article shall be sold or
otherwise distributed by Licensee under any xxxx other than the Licensed Xxxx.
Licensor reserves all rights to the Licensed Xxxx except as specifically
granted herein to
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Licensee and Licensor may exercise any of its rights at any time.
Licensee specifically acknowledges that Licensor has retained the right to own,
operate and license retail outlets and boutiques bearing the Licensed Xxxx
throughout the world. Licensee acknowledges that, subject to the provisions of
Section 1.2 hereof, Licensor has retained all rights in the trademark
"CK/Xxxxxx Xxxxx" for use on the Licensed Articles and that the Trust and/or
the Licensor, as applicable, has retained such rights to any "CK" derivative
trademark for use on the Licensed Articles.
1.5 Best Efforts. Licensee will use its best efforts to exploit the
rights herein granted throughout each jurisdiction which constitutes the
Licensed Territory and to sell the maximum quantity of each category of
Licensed Articles therein consistent with the high standards and prestige
represented by the Licensed Xxxx.
1.6 Other Matters.
(a) On or prior to the date hereof Licensee has paid to Licensor all
amounts owed by Licensee to Licensor under the Terminated License Agreement as
indicated on the statement delivered by Licensor. Licensee shall also
reimburse Licensor for all costs and expenses (including the fees and expenses
of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx and other reasonable attorneys'
fees and expenses) incurred (whether prior to or after the date hereof) in
connection with the preparation, negotiation, execution and enforcement of
this Agreement (and matters relating thereto), but not the day-to-day
maintenance of this Agreement, and the preparation, negotiation, execution and
enforcement of the Letter of Intent date as of
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the date hereof (the "Letter of Intent") by and among Licensor,
Decorative Home Accents, Inc. ("DHA") and Licensee and the transactions
contemplated by such agreements and the review and preparation of ancillary
materials and agreements.
(b) In the event of any dispute between Licensee and any other licensee
of Licensor in the Licensed Territory with respect to whether particular
merchandise is covered by the License or by such other licensee's license, such
dispute shall be submitted to arbitration before the American Arbitration
Association in New York, New York. The arbitrator's determination shall be
final and binding on Licensee.
(c) Licensee shall not export Licensed Articles from the Licensed
Territory and shall not sell Licensed Articles to any third party which may
export Licensed Articles from the Licensed Territory. Licensor retains the
right to use, and to grant third parties the right to use, the Licensed Xxxx on
products which constitute Licensed Articles outside the Licensed Territory. In
connection therewith, Licensor may grant third parties the right to manufacture
products which constitute Licensed Articles outside the Licensed Territory as
long as such Licensed Articles are not distributed or sold within the Licensed
Territory by Licensor or by any such third party. Licensee agrees to fully
cooperate with such third parties (including, without limitation, by supplying
design data, specifications and samples) on a timely basis as requested by
Licensor and Licensor shall undertake to use its reasonable best efforts to
ensure that such third parties cooperate with Licensee (including, without
limitation, by supplying design data, specifications and samples) on a timely
basis as requested by
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Licensor.
2. Term. The term of this Agreement shall commence as of April 27, 1997
and continuing through April 30, 1998 (the "Term") unless sooner terminated in
accordance with this Agreement. The term of this Agreement shall constitute
and hereinafter shall be referred to as the "Annual Period."
3. The Collection.
3.1 General. Licensor and Licensee will cooperate and will exercise
their respective best efforts, in the preparation of collections of Licensed
Articles. The complete line of Licensed Articles (the "Collection") shall be
manufactured, marketed and sold under the name "Xxxxxx Xxxxx Home." Licensee
shall prepare and file a fictitious name certificate (a "doing business as" or
"d/b/a" certificate) evidencing such name. Licensee may only use the name
"Xxxxxx Xxxxx Home." during the Term as its fictitious name and not its legal
or corporate name and shall immediately upon termination of the Term, change
such name so that it does not include either of the names "Xxxxxx Xxxxx" or
"CK/Xxxxxx Xxxxx" or any variation thereof and file a termination of the
fictitious name certificate referred to above. No sublicensee of the Licensee
may include in its name either of the names "Xxxxxx Xxxxx" or "CK/Xxxxxx Xxxxx"
or any variation thereof. There will be only two seasonal collections of
Licensed Articles during the Annual Period, i.e., the Fall/Winter 1997
collection and the Spring/Summer 1998 collection. In no event will any
designs, preparations or other matters relating to any collection subsequent to
Spring/Summer 1998 be covered under this Agreement and Licensor will have no
obligations as to the
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same.
3.2 Designs. Within a reasonable period of time prior to the
commencement of the design of each seasonal collection of Licensed Articles,
Licensor will provide Licensee with creative concepts and fashion direction as
to each such seasonal collection, including recommendations as to color,
material, design and styling of Licensed Articles and such additional design
assistance as Licensor and Licensee mutually determine is necessary in order to
timely complete the seasonal collection. Specifically, Licensor shall provide
Licensee with such information and assistance based upon the schedule set forth
on Schedule D, attached hereto, as agreed to by Licensor and Licensee for
development of all seasonal collections. Licensor shall designate at least one
individual who shall have principal responsibility for the Collection and whose
primary responsibilities during normal business hours shall be relating to the
Collection. Licensor may, from time to time, submit to Licensee sketches,
designs, colors, samples, labels, and packaging and other materials for use by
Licensee in connection with its preparation of collections of the Licensed
Articles. In order to present a representative seasonal collection for each
category of Licensed Articles, Licensee will utilize a sufficient number of
designs submitted or approved by Licensor and produce and offer for sale those
Licensed Articles which are produced therefrom, unless Licensor otherwise
consents.
3.3 Showroom. Licensee will be responsible [INFORMATION SUBJECT TO
PENDING CONFIDENTIALITY REQUEST] the design, development, construction and
maintenance of a showroom or showrooms in accordance with the
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provisions of Section 5(b) hereof and in-store shops or stores in which
Licensed Articles are sold all of which shall be subject to the on-going
approval of Licensor.
3.4 Samples. Licensee shall make available to Licensor, without charge,
three samples per SKU of each Licensed Article, or such other reasonable
quantities of Licensed Articles as requested by Licensor, for use in
advertising and promotion. Licensee shall permit Licensor and its employees
and other representatives to purchase, from time to time, reasonable quantities
of Licensed Articles for personal use at regular wholesale prices.
3.5 Confidentiality.
(a) All information relating to this Agreement and any related
agreements entered into by the parties or relating to the Licensor and its
Affiliates and/or designees which Licensee learns or has learned since the
commencement of negotiation of the Terminated License Agreement, all design
concepts which Licensor or its Affiliates or designees provide to Licensee
hereunder and all sketches and designs received by Licensee from Licensor or
its Affiliates or designees or are approved for use in connection with the
Licensed Articles and all Works of Authorship (collectively, "Licensor's Data")
are valuable property of Licensor and such Affiliates or designees. Licensee
acknowledges the need to preserve the confidentiality and secrecy of Licensor's
Data. During and after the Term, Licensee will not use or disclose same
(except for use required to fulfill the provisions of this Agreement during the
Term and the inventory disposal period referred to in Section 14.1, and will
take all necessary steps to ensure that the use of Licensor's Data
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by Licensee or its Affiliates or designees (which use by the designees
will be solely as necessary for the manufacture, distribution, sale,
advertising or promotion of Licensed Articles hereunder) will preserve such
confidentiality and secrecy in all respects. Notwithstanding the foregoing,
Licensee's obligation to keep Licensor's Data confidential will terminate
(except for designs and design concepts and materials) at such time and solely
to the extent that any such Licensor's Data will become generally known to the
public and in the public domain, through no fault of Licensee or any of its
Affiliates or designees.
(b) All information relating to Licensee and its Affiliates and/or
designees which Licensor learns or has learned since the commencement of
negotiation of the Terminated License Agreement other than Licensor's Data
(collectively "Licensee's Data") is valuable property of Licensee and such
Affiliates or designees. Licensor acknowledges the need to preserve the
confidentiality and secrecy of Licensee's Data. During and after the Term,
Licensor will not use or disclose same (except for use required to fulfill the
provisions of this Agreement during the Term and use deemed necessary by
Licensor in connection with its business; provided, that such use will not
include disclosure of non-public financial information (excluding information
such as sales levels, advertising expenditures and other information relating
to the operations of this Agreement) unless covered by a confidentiality
agreement, and will take all necessary steps to ensure that the use of
Licensee's Data by Licensor or its Affiliates or designees (which use by such
designees will be solely as necessary for the manufacture, distribution, sale,
advertising or promotion of Licensed Articles
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hereunder) will preserve such confidentiality and secrecy in all
respects. Notwithstanding the foregoing, Licensor's obligations to keep
Licensee's Data confidential will terminate at such time and solely to the
extent that any such Licensee's Data will become generally known to the public
and in the public domain, through no fault of Licensor or any of its Affiliates
or designees.
4. Quality Control.
4.1 General. The components, workmanship, fit and durability of the
Licensed Articles, and of all packaging and ancillary materials related to
Licensed Articles, will at all times be of the highest quality and commensurate
with the reputation, image and prestige of the Licensed Xxxx.
4.2 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
4.3 Approvals. Licensor will have the right to approve the styles,
designs, packaging, components, workmanship, quality, display, merchandising,
advertising and promotion of all Licensed Articles so as to ensure that the
Licensed Articles comply with Section 4.1. All such approvals shall be given
in writing and shall be given within ten business days of submission by
Licensee and requests for approval of such submissions. In the event that such
approval is not given within the specified time period, the submitted Licensed
Articles shall be deemed approved.
4.4 Maintenance of Quality. Before selling, distributing or
promoting any Licensed Article, Licensee will deliver to Licensor for its
approval, free of charge, one prototype sample of each such Licensed Article
together with prototype
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tags, labels and packaging and other ancillary material to be used in
connection therewith. In addition, upon Licensor's request, Licensee will
deliver to Licensor, free of charge, initial and/or then current production
samples of each Licensed Article produced hereunder together with the tags,
labels and packaging being used in connection therewith so that Licensor may
assure itself of the maintenance of the quality standards set forth herein.
Licensor and its duly authorized representatives will have the right, upon
reasonable advance notice and during normal business hours, to examine Licensed
Articles in the process of being manufactured and to inspect all facilities
utilized by Licensee and its contractors in connection therewith.
4.5 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
4.6 Advertising and Promotional Materials. Before using any proposed
advertising or promotional material or publicity material or any other printed
matter, Licensee will submit the same to Licensor for Licensor's approval,
which shall be given in accordance with the provisions of Section 4.3 hereof.
After any sample, copy, art work or other material has been approved, Licensee
will not depart therefrom in any material respect, without the prior written
approval of Licensor.
4.7 Distribution. In order to maintain the reputation, image and
prestige of the Licensed Xxxx, Licensee's distribution patterns shall consist
of those retail outlets whose location, merchandising and overall operations
are consistent with the high quality of the Licensed Articles and the
reputation, image and prestige of the Licensed Xxxx and as are approved by
Licensor on an ongoing basis.
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4.8 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
5. Covenants of Licensee. Licensee, during the term of this Agreement,
may not use "Xxxxxx Xxxxx" or "CK" or any variation or derivation thereof as
part of its corporate name, but may do business as (d/b/a) or use the name
"Xxxxxx Xxxxx Home," and no other name or xxxx. Licensee shall be exclusively
engaged in the business of performing the obligations and responsibilities of
Licensee hereunder. Licensor shall furnish Licensee with any corporate
consents necessary to allow Licensee to use the name "Xxxxxx Xxxxx Home" during
the Term and Licensee shall change such name at the conclusion of the Term to
remove the Licensed Xxxx. The use of the Licensed Xxxx in connection herewith
shall be subject to the provisions of Section 10 below. In connection with the
operation of such business, Licensee shall:
(a) employ, on an exclusive basis, a "President" of the Company who
shall be subject to the ongoing approval of Licensor, both upon and throughout
his or her employment with Licensee, and such sales, merchandising, production
and public relations personnel as will enable Licensee to exploit the License
herein granted and to maintain the quality standards required hereunder;
(b) maintain throughout the term of this Agreement, a separate
showroom in New York, New York for the sole purpose of displaying, promoting
and selling the Licensed Articles, located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx and which shall occupy at least 50% of an entire floor at such
location
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(unless otherwise agreed to by Licensor) and the decor of which shall
be subject to the ongoing approval of Licensor (which shall include the
selection or approval of the architect for such showroom, as well as all plans
for such location). [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
(c) [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
(d) furnish Licensor with information regarding the above as Licensor may,
from time to time, reasonably request; and
(e) deliver:
(i) by March 31, 1998, copies of its unaudited statement of operations
and balance sheet prepared in accordance with, or supplemental to ensure
compliance with, U.S. generally accepted accounting principles, consistently
applied ("US GAAP"), together with a certificate executed by Licensee's chief
financial officer certifying Licensee's compliance with and setting forth
computations necessary to demonstrate Licensee's compliance with the financial
covenants referred to in Section 5(c) and DHA's Annual Report on Form 10-K;
(ii) within 45 days after the close of each calendar quarter copies of
financial reports, which will be prepared on a basis consistent with the annual
financial reports together with the chief financial officer's certificate
described in Section 5(e)(i) above and DHA's Quarterly Report on Form 10-Q; and
(iii) promptly (and in any event within five business days) after
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discovery thereof, notice of any failure comply with any of the financial
covenants contained in Section 5(c).
6. Amounts Expended for Advertising and Promotion.
6.1 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
6.2 Definition of Consumer Advertising. For purposes hereof, consumer
advertising shall be deemed to exclude co-operative and trade advertising and
to include print advertisements in prestigious national publications and such
other approved forms of advertisements and promotions as Licensor may deem to
be consumer advertising.
6.3 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
6.4 Publicity/Press Releases. Licensee recognizes that its public
actions and statements can affect the image of Licensor, the Licensed Xxxx, the
Licensed Articles and Licensor's other trademarks, licensees and licensed
products. Accordingly, (a) the use and release of any and all promotional
material (printed or otherwise) relating to the Licensed Articles or Licensee's
activities pursuant to this Agreement in the nature of press releases,
interviews or other public relations events, and (b) any other corporate
release, data or information of Licensee or DHA referring to or relating to the
Licensed Xxxx, the Licensed Articles, this Agreement or the operations
hereunder which will or is likely to become public or of DHA, which does not
refer or relate to any of the foregoing, which will or is likely to become
public and,
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if so, could in DHA's reasonable opinion affect such image, will be
prepared or conducted in consultation with, and subject to guidelines prepared
by Licensor and the prior approval of, Licensor's Public Relations Department,
which shall promptly be addressed by such department. After any such approval,
Licensee will not modify the approved material or activity in any material
respect unless such modification is specifically approved by Licensor's Public
Relations Department.
7. Approvals. Licensee acknowledges that all approvals required
pursuant to this Agreement may be based solely on Licensor's subjective
aesthetic standards and may be granted or withheld in Licensor's sole and
absolute discretion.
8. Royalties.
8.1 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
8.2 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
8.3 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
8.4 Statement and Payments. Within 30 days after the close of each
"quarter" (i.e., each three (3) month period during the Annual Period),
Licensee shall deliver to Licensor statements (the "Quarterly Statements")
signed by an officer of Licensee and certified by him as accurate, indicating,
by month, the amount of Net Sales by product categories, showing separately by
account units and gross sales of Licensed Articles shipped, the type and amount
of discounts and credits deductible from
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gross sales, the applicable royalty rate, a computation of the amount of the
Actual Royalties payable and a computation of the Minimum Advertising
Expenditure for such quarter and the amounts and details of all advertising and
promotional expenditures (including remittances to Licensor if any). Licensee
also shall use its best efforts to break down Net Sales by jurisdiction on such
Quarterly Statements. The Actual Royalties for the Licensed Articles for such
preceding quarter shall accompany the Quarterly Statements. All payments
required of Licensee hereunder shall be made to Licensor in New York, New York
in U.S. Dollars. Where sales of Licensed Articles are made in currency other
than U.S. Dollars, the royalties shall be computed on the basis of the
conversion rate of local currency into U.S. Dollars in effect in New York, New
York at Chemical Bank as of the close of business on the last day of each
applicable quarter of the Annual Period (with appropriate verification of such
conversion rates supplied to Licensor). Notwithstanding any provision of this
Agreement or of any other agreement, instrument or undertaking to the contrary,
Licensee shall not have the right to set off or otherwise withhold any amount
payable to Licensor pursuant to this Agreement against the amount of any claim
or other cause of action that Licensee may have against Licensor pursuant to
this Agreement or to any other agreement, instrument or undertaking.
8.5 Report of Independent Accountants. Licensee shall furnish to
Licensor not later than 90 days following the close of the Annual Period during
the Term (or portion thereof), a report certified by the independent certified
public accountants of the Licensee covering the Annual Period (or portion
thereof) and
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containing the same information required to be contained in the statements
referred to in Section 8.4 above.
8.6 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
9. Record Keeping.
9.1 Books and Records. Licensee will prepare and maintain, in
accordance with generally accepted accounting principles consistently applied,
complete and accurate books of account and records covering all transactions
relating to this Agreement and Licensee's performance hereunder. Licensor and
its duly authorized representatives have the right, during regular business
hours and upon reasonable notice, for the duration of this Agreement and for
two years thereafter, to examine said books of account and records and all
other documents and material in the possession or under the control of Licensee
or its affiliates with respect to the subject matter and the terms of this
Agreement. In addition, Licensee shall use its reasonable efforts to provide
Licensor with access to the workpapers of Licensee's independent accountants as
permitted thereby. All such books of account, records and documents will be
kept available by Licensee for at least two years after the Annual Period.
9.2 Audit. If, as a result of any examination of Licensee's
books and records, it is shown that Licensee owes Actual Royalties to
Licensor, Licensee shall promptly make all payments required to be made to
eliminate any discrepancy which was revealed by said examination and if such
amount is in excess of 5% of the Actual Royalties paid to Licensor, Licensee
will also promptly reimburse Licensor for
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the cost of such examination.
10. The Licensed Xxxx.
10.1 General. Licensees agrees that (a) no name or names shall be
co-joined with the Licensed Xxxx, and (b) no other name or names shall be used
in connection with the Licensed Xxxx in any advertising, promotion, publicity,
labeling, packaging or printed matter of any kind utilized by Licensee in
connection with the Licensed Articles, except and only to the extent Licensor
consents in writing.
10.2 Ownership of Licensed Xxxx. Licensee acknowledges that Licensor
is the beneficial owner of all rights, title and interest in and to the
Licensed Xxxx in the world in any form or embodiment thereof as such relate to
the Licensed Articles and that the Trust is the owner of the Licensed Xxxx and
the goodwill related thereto in the world in any form or embodiment thereof.
Licensee will not, at any time, do or suffer to be done any act or thing which
may in any way adversely affect any rights of Licensor or the Trust in and to
the Licensed Xxxx or any registrations thereof or any applications for
registration thereof or which, directly or indirectly, may reduce the value
thereof or detract from their reputation, image or prestige or that of Licensor
or Xxxxxx Xxxxx. Licensor, and its officers, directors and shareholders, shall
not, at any time, do or suffer to be done any act or thing which, directly or
indirectly, may reduce the value of the Licensed Xxxx or detract from their
reputation, image or prestige or that of Licensor or Xxxxxx Xxxxx. [INFORMATION
SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
10.3 Cooperation. Licensee will, at Licensor's request and
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expense, execute any and all documents and take any actions required by
Licensor to confirm the Trust's ownership of and Licensor's beneficial
ownership of all rights in and to the Licensed Xxxx in the world and the
respective rights of the Trust, Licensor and Licensee pursuant to this
Agreement.
10.4 No Challenge. Whether during the term of this Agreement or
subsequent to its termination, Licensee will never (a) challenge the Trust's
ownership or Licensor's beneficial ownership of or the validity of the Licensed
Xxxx or any application for registration thereof, or any trademark registration
thereof, or any rights of Licensor therein, nor (b) challenge the fact that
Licensee's rights pursuant to this Agreement are solely those of a licensee.
10.5 Copyright. Licensee acknowledges that Licensor owns and will
own all rights including copyrights in and to certain works of authorship
created by Licensor including fabric designs (hereinafter "Works of
Authorship") for use on Licensed Articles and in connection with the Licensed
Xxxx. Licensor grants to Licensee a license to reproduce the Works of
Authorship in copies on Licensed Articles bearing the Licensed Xxxx, and on
advertising, promotional and packaging materials for the same, as applicable,
and to distribute and sell such copies in accordance with the terms of this
Agreement. Upon preparation by Licensee of any works of authorship ("New
Works") or contributions to Licensor's Works of Authorship ("Contributions")
for use in connection with the Licensed Xxxx on Licensed Articles, Licensee
hereby assigns to Licensor all right, title and interest in and to such New
Works and Contributions, and Licensee shall execute and deliver to Licensor
such further
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instruments of ownership and transfer in respect thereto as Licensor
may request. If Licensee shall fail to do so, Licensor may execute such
instruments on behalf of Licensee and make appropriate disposition thereof.
New Works and Contributions may be prepared by Licensee only through Licensee's
employees whose contribution is to be considered as a "work made for hire" and
by others who have executed a written assignment of their contribution in favor
of Licensee. Licensee shall fully cooperate with Licensor to ensure that
copyright notice in the name of Licensor appears on the Licensed Articles to
the extent they incorporate Works of Authorship. Infringements of Licensor's
copyrights in the Works of Authorship shall be governed by the provisions of
Section 11.
11. Infringements. In the event that Licensee learns of any infringement
or imitation of the Licensed Xxxx or of any use by any person of a trademark
similar to the Licensed Xxxx or of any acts of unfair competition involving the
Licensed Xxxx, it will promptly notify Licensor thereof. Licensor will take
such action as it deems advisable for the protection of Licensor's rights in
and to the Licensed Xxxx, including, without limitation, requesting Licensee to
take action in Licensor's name and on Licensor's behalf and Licensee shall
cooperate with Licensor in all material and reasonable respects, provided that
Licensee need not take action if it reasonably determines not to do so. With
respect to any such infringement actions taken by Licensee, Licensee shall bear
the expenses thereof. If Licensee determines not to take any action and
Licensor then decides it will take action relative thereto, Licensor will bear
its expenses in connection therewith. Licensee will cooperate with
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Licensor with regard to any such action. Licensor will not be required
to take any action it deems inadvisable and Licensee will have no right to take
any action with respect to the Licensed Xxxx without Licensor's prior written
approval. Licensee will take no action, including, without limitation, settling
any action, appealing any adverse decision or discontinuing any action taken by
it, except to the extent the same is approved in advance by Licensor.
[INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
12. Indemnification.
12.1 By Licensee. Licensee does hereby indemnify Licensor, the Trust
and Xxxxxx Xxxxx, individually, against, and save and hold each of them
harmless of and from, any and all losses, liability, damages and expenses
(including reasonable attorneys' fees and expenses) which may arise in
connection with Licensee's performance of this Agreement and transactions
arising therefrom. The provisions of this section and the obligations of
Licensee set forth herein shall survive expiration or other termination of this
Agreement.
12.2 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
12.3 Insurance. Licensee will maintain at all times during which
Licensed Articles are being sold a public liability insurance policy, including
products liability coverage as well as contractual liability with respect to
this Agreement, with a limit of liability of not less than $5,000,000 in the
aggregate. Licensee will deliver certificates of such insurance to Licensor
promptly upon issuance of said policy and
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annually thereafter. Insurance will not be deemed to limit the
indemnification provisions of Section 12.1 above.
13. [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
14. Expiration or Termination.
14.1 Rights and Obligations Upon Expiration or Termination. On the
expiration or earlier termination of this Agreement all the rights of Licensee
hereunder shall forthwith terminate and automatically revert to Licensor.
However, in the event of expiration or earlier termination of this Agreement
other than material breach or bankruptcy of Licensee, Licensee shall be
entitled, for six months only, on a non-exclusive basis, to continue to sell
its inventory of the Licensed Articles. Such sales shall be made under the
Licensed Xxxx and in accordance with all of the terms and provisions of this
Agreement, and the payment of Actual Royalties thereon.
14.2 Discontinue Use of Licensed Xxxx. Upon termination (except for
the inventory disposal right referred to in Section 14.1 above), Licensee shall
forthwith discontinue all use of the Licensed Xxxx or any variation or
simulation thereof. Licensee shall deliver to Licensor or to Licensor's
designee, free of charge, all materials utilized in connection with the
Licensed Articles or with the Licensed Xxxx thereon.
15. [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
16. Miscellaneous.
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16.1 Notices. All reports, approvals and notices required or
permitted by this Agreement shall be in writing, duly given if mailed (by
certified or registered mail, return receipt requested) to the appropriate
address set forth above (or subsequently specified). Such notice shall be
deemed effective two business days following the date the notice is mailed.
Copies of all notices sent to Licensor shall be sent to the attention of
Xxxxxxx Xxxxx-Xxxxxxx, and to Xxxxxx X. XxXxxxx, Esq., 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000. Copies of all notices sent to Licensee shall be sent to
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
16.2 Assignment, etc. Licensee acknowledges and recognizes that (i)
it has been granted the License because of its particular expertise, knowledge,
judgement, skill and ability; (ii) it has substantial and direct
responsibilities to perform this Agreement in accordance with its terms; (iii)
Licensor is relying on Licensee's unique knowledge, experience and capabilities
to perform this Agreement in specific manner consistent with the high standards
of integrity and quality associated with Licensor and its business; (iv) the
granting of the License under this Agreement creates a relationship of
confidence and trust between Licensee and Licensor; and (v) this Agreement is
one under which applicable law excuses Licensor from accepting performance
from, or rendering performance to, a person or entity other than Licensee,
within the meaning of Section 365(c) and (e) of the Bankruptcy Code (title 11,
U.S. Code). Licensee may not assign, sublicense except as permitted in Section
8.6 or otherwise transfer any of its rights or obligations hereunder,
(including any attempt by
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Licensee to establish a distributorship without the prior consent of
Licensor as to such distributor and distributorship agreement). Any such
attempted assignment, sublicense or transfer, whether voluntary or by operation
of law, directly or indirectly, will be void and of no force or effect. For
purposes hereof, any transfer of all or a controlling portion of any equity
interest of Licensee entitled to vote in the election of the board of directors
of Licensee or any similar governing body in one or more transactions (whether
over a period of time or all at once), except to Licensor or a person or entity
approved in writing by Licensor, will be deemed an attempted transfer of this
Agreement prohibited by this Section 16.2 and will be void pursuant to the
preceding sentence. Schedule 16.2 attached hereto sets forth a list of the
shareholders of Licensee and their share holdings. Except as otherwise
provided herein, this Agreement will inure to the benefit of and will be
binding upon the parties and permitted successors and assigns.
16.3 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
16.4 Entire Agreement. This Agreement together with the Letter of
Intent and the Exhibits and Schedules attached hereto, all of which are
incorporated herein by reference, contains the final, complete and exclusive
understanding and agreement between the parties hereto with respect to the
subject matter hereof, supersedes all prior oral and written understandings and
may not be modified, nor may any of the provisions hereof be waived, except by
a writing executed by the parties. Notwithstanding the foregoing, Licensee
remains fully obligated to Licensor under the
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terms of the Terminated License Agreement, including royalties and
other amounts due and indemnities thereunder, and Licensor retains any and all
applicable rights thereunder including, without limitation, the right to
conduct or arrange for audits and Licensor remains fully obligated to Licensee
for any indemnities under the terms of the Terminated License Agreement.
16.5 [INFORMATION SUBJECT TO PENDING CONFIDENTIALITY REQUEST]
16.6 No Joint Venture. Nothing herein shall be construed to
constitute the parties hereto as partners or as joint venturers, or either as
agent of the other, and Licensee shall have no power to obligate or bind
Licensor in any manner whatsoever.
16.7 Waivers. No waiver by either party, whether expressed or
implied, of any breach hereof or default hereunder shall constitute a
continuing wavier of such provision or of any other provision of this
Agreement. Acceptance of payments by Licensor shall be deemed a waiver by
Licensor of any violation of or default under any of the provisions of this
Agreement by Licensee.
16.8 Unenforceability. If any provision or any portion of any
provision of this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement and the remaining portion of any
provision held void or unenforceable in part shall continue in full force and
effect.
16.9 Choice of Law. This Agreement shall be considered as having
been entered into in the State of New York and shall be construed and
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interpreted in accordance with the laws of that state applicable to
agreements made and to be performed therein. However, disputes regarding the
Licensed Xxxx shall be resolved in accordance with the Federal trademark laws
and related laws, statutes, rules and regulations of the United States unless
there are no Federal laws, statutes, rules or regulations dispositive of such a
dispute, in which event such dispute shall be resolved in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
XXXXXX XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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DHA HOME, INC.
By: /s/ X. X. Xxxxxxxx
----------------------------------
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