LICENSE AGREEMENT
between
DANSKIN, INC.
and
WUNDIES INDUSTRIES, INC.
Dated as of November 1, 1996
INDEX
1. Definitions............................................................. 1
2. License Grant........................................................... 2
3. Term.................................................................... 3
4. Licensed Merchandise.................................................... 4
5. Use of Licensed Xxxx.................................................... 7
6. Royalty................................................................. 8
7. Records................................................................. 10
8. Trademark and Related Rights............................................ 11
9. Indemnification and Insurance........................................... 12
10. Infringement............................................................ 14
11. Termination............................................................. 15
12. Effect of Expiration or Termination..................................... 17
13. Bankruptcy and Financial Covenants...................................... 19
14. Representations and Warranties.......................................... 19
15. Advertising and Sales Promotion......................................... 20
16. Confidentiality......................................................... 21
17. Governing Law; Arbitration.............................................. 21
18. Interest................................................................ 22
19. Importation of Merchandise.............................................. 22
20. Notices................................................................. 22
21. Miscellaneous........................................................... 23
EXHIBITS
1(A) List of "Merchandise"................................................... 24
2(B) Provisions of Agreement between Licensor and Xxx River, Inc............. 25
4(F) Form of Contractor's Agreement.......................................... 26
4(K) List ofAuthorized Customers............................................. 28
LICENSE AGREEMENT
-----------------
THIS AGREEMENT, made and entered into as of this 1st day of November, 1996
between DANSKIN, INC., a Delaware corporation with its principal offices at 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (hereinafter referred to as
"Licensor") and WUNDIES INDUSTRIES, INC., a corporation,
with its principal offices at 0 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
(hereinafter referred to as "Licensee").
WITNESSETH:
WHEREAS, Licensor is the owner of the trademark and service xxxx
XXXXXXX(R), and any simulations and variations thereof; and
WHEREAS, Licensee desires to obtain a license to use said trademark in
connection with the manufacture, merchandising, promotion, advertising, sale and
distribution of Merchandise, as hereinafter defined, and Licensor is willing to
grant such license subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, Licensor and Licensee agree as follows:
1. Definitions
The following definitions shall be applicable throughout this Agreement:
1 A. The term "Annual Period" shall mean the 14-month period commencing
November 1, 1996 and ending on December 31, 1997, and each 12-month
period thereafter during the Term commencing on January 1 and ending
on December 31.
1 B. The term "Guaranteed Minimum Royalties" shall mean with respect to any
Annual Period the minimum royalty payments that Licensee is obligated
to pay to Licensor, as set forth in Section 6(B) below.
1 C. The term "Licensed Xxxx" shall mean the trademark DANSKIN(R), and any
simulations or variations thereof, all in the form approved in writing
by Licensor for use by Licensee hereunder.
1 D. The term "Licensed Merchandise" shall mean Merchandise that is
manufactured, sold or promoted by or on behalf of Licensee and which
bears the Licensed Xxxx.
1 E. The term "Merchandise" shall mean Girls' and Ladies underwear and
coordinates sold in lingerie departments, excluding foundation,
activewear and sports bras, all as shown on Exhibit 1(E) hereto.
1 F. The term "Minimum Annual Net Sales", to be achieved by Licensee in
respect of each Annual Period by virtue of bona fide Sales made at
arm's length, shall mean the Minimum Annual Net Sales, as set forth in
Section 6(B) below with respect to each Annual Period.
1 G. The term "Net Sales" shall mean the total invoiced price of the
Licensed Merchandise shipped by Licensee to any third party in
connection with any sale, rental or other use or disposition, less
only (i) normal and actual trade discounts, sales allowances usually
granted and actually taken by customers and returns actually received,
(ii) local, state and federal sales, use and excise taxes required to
be charged by Licensee with respect to a Sale and not reimbursed by
customers, and (iii) freight charges and insurance if separately
stated on the invoice. If a Sale is made other than at arm's length,
Net Sales for such Sale shall be based on the price for a
corresponding Sale at arm's length. No deduction shall be made for
uncollected or uncollectible accounts.
1 H. The term "Prototype" shall mean any and all models or samples of
Licensed Merchandise, except that the "Final Prototype" shall mean the
actual final sample of each model of Licensed Merchandise which has
been approved by Licensor and from which the first commercial
production thereof will be made.
1 I. The term "Quarterly Period" shall mean the period beginning November
1, 1996 and ending March 31, 1997 and thereafter shall mean one of the
quarterly periods within an Annual Period, the first such quarterly
period commencing on the first day of the Annual Period and the next
three quarterly periods following consecutively thereafter.
1 J. The term "Sales" shall mean sales, rentals or other dispositions of
Licensed Merchandise.
1 K. Unless sooner terminated in accordance with the provisions hereof, the
term "Term" shall mean the Initial Term of this Agreement and any
Renewal Term, as such terms are defined in Article 3 hereof.
1 L. The term "Territory" shall mean the United States of America, its
territories and post exchanges throughout the world, except that post
exchanges are on a non-exclusive basis.
2. License Grant
2 A. Licensor hereby grants to Licensee an exclusive license throughout the
Territory (but not elsewhere) during the Term to use the Licensed Xxxx
as a trademark in connection with the manufacture, advertising,
merchandising, promotion, publicity, sale and distribution of
Merchandise, subject to all the terms and conditions of this
Agreement.
2 B. Licensee acknowledges that the grant to it of the Licensed Xxxx
hereunder is qualified by the terms of an agreement between Licensor
and Xxx River Inc., as amended, the applicable provisions of which are
attached hereto as Exhibit 2 (B), and it agrees to comply in all
respects with such provisions.
2 C. Licensee shall use its best efforts to exploit the rights granted
herein at all times in a manner consistent with good business
practices and the standards set forth below. Licensee will assign
appropriate executive staff to supervise its marketing efforts who
will devote their best efforts to maximizing the Sales of the Licensed
Merchandise.
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2 D. Any Merchandise which does not continue to maintain, for any six
consecutive months, widespread commercial distribution as Licensed
Merchandise within the Territory, may be withdrawn by Licensor at any
time thereafter as Merchandise permitted to bear the Licensed Xxxx
under this Agreement. Any such withdrawal shall not affect any
Guaranteed Minimum Royalty requirements hereunder, nor any Minimum
Annual Net Sales requirements hereunder, nor any other provision of
this Agreement.
2 E. Licensee may use the Licensed Xxxx only in connection with the
manufacture, advertising, merchandising, promotion, publicity and
distribution of Merchandise which has been approved by Licensor in
accordance with Article 4 hereof. No license is granted hereunder for
the use of the Licensed Xxxx for any purpose other than upon or in
connection with the Licensed Merchandise. No license is granted
hereunder for the manufacture, sale or distribution of Licensed
Merchandise for promotional or publicity purposes (other than the
promotion or publicity of Licensed Merchandise) or for use of Licensed
Merchandise in combination sales with other merchandise or as premiums
or giveaways, or for disposal under or in connection with any similar
methods of merchandising.
2 F. Licensor reserves all rights to use and to grant to third parties the
right to use the Licensed Xxxx on any product, including Merchandise,
in any geographical area outside the Territory and within the
Territory on products other than Merchandise. Licensor will make good
faith efforts to enforce its agreements with such third parties in
order to protect Licensee's exclusive right to use the Licensed Xxxx
on the Licensed Merchandise in the Territory. Additionally, Licensor
reserves all rights to use the Licensed Xxxx on any product, including
the Merchandise, within or outside of the Territory for products used
for promotional purposes for or in connection with any of Licensor's
businesses.
2 G. The license granted herein is strictly personal to Licensee. Neither
this Agreement nor any of the rights granted to Licensee hereunder may
be assigned, sublicensed or otherwise transferred, in whole or in
part, by Licensee to any person, partnership firm, corporation or
other entity whatsoever without the prior written approval of
Licensor. Any attempted assignment, or sublicense or other transfer in
violation of this Agreement, whether voluntary or by operation of law,
directly or indirectly, shall be void and of no force or effect.
Without limiting the preceding sentence, in the event of any attempted
or completed assignment, sublicense or other transfer, or in the event
of a change of control of Licensee as described in Section 11(G)
hereof, without Licensor's prior written approval, Licensor may, at
its option, immediately and without prior notice, terminate the rights
and license hereby granted to Licensee by written notice to Licensee.
3. Term
3 A. This initial term of this Agreement (the "Initial Term") shall become
effective as of November 1, 1996, and shall consist of three (3)
Annual Periods. Licensee shall have the option to renew this Agreement
for two (2) successive renewal terms of three (3) Annual Periods each
(each such renewal term hereof to be referred to herein as a "Renewal
Term"); provided that (i) Licensee gives Licensor irrevocable written
notice of its intent to renew at least one hundred and twenty (120)
days prior to the commencement of the Renewal Term for
3
which the renewal option is being exercised, time being of the
essence, (ii) Licensee has paid all of the Percentage Royalties (as
hereinafter defined) and Guaranteed Minimum Royalties theretofore
required to be paid and (even if all Percentage Royalties and
Guaranteed Minimum Royalties have been paid) has achieved all of the
Minimum Annual Net Sales for prior Annual Periods, and (iii) on the
date of renewal, Licensee is in compliance with all the terms and
conditions of this Agreement.
4. Licensed Merchandise
4 A. Licensed Merchandise shall at all times be of high quality,
commensurate with the reputation and heritage of products which bear
the Licensed Xxxx. Consistent with this standard, Licensee agrees that
Licensed Merchandise will be designed, manufactured, advertised,
promoted, publicized, distributed and sold in a manner which is
consistent with high quality standards, and commensurate with the
levels customarily maintained for products which bear the Licensed
Xxxx.
4 B. Licensee shall submit to Licensor for approval all sketches, styles,
designs, specifications, colors, materials, and fabrics for all
Merchandise intended to be sold as Licensed Merchandise, including any
wrapping, labels, packaging or containers (said packaging, containers
and wrapping hereinafter collectively, "Packaging") intended to be
utilized in connection with the Licensed Merchandise, in order to
ensure that such Merchandise and Packaging are commensurate with high
quality materials, workmanship and design standards. Prior to first
commercial sale or production of any Licensed Merchandise, Licensee
shall submit for Licensor's prior approval two copies of the Prototype
of each different item of Licensed Merchandise that Licensee intends
to market, including related proposed Packaging. The two copies of the
Prototype must be sent to Danskin, Inc., attention: Director of
Marketing, at the address to which notices must then be sent to
Licensor pursuant to Article 20 hereof. Each such submitted Prototype
shall be deemed accepted and approved by Licensor unless Licensor
notifies Licensee of its objections thereto within ten (10) business
days after receipt of such submission. In the event Licensor objects
to any Prototype, Licensor shall state the particulars of such
objections. Licensor and Licensee shall, if requested, consult and
cooperate with each other for purposes of modifying the Prototype as
expeditiously as possible. Licensee shall then resubmit a modified
Prototype and it shall be deemed accepted and approved by Licensor
unless Licensor notifies Licensee of its objection thereto within five
(5) business days of its receipt thereof. The above approval process
shall be repeated until such time as the Prototype has been finally
approved by Licensor or the parties agree that the Prototype shall not
be marketed as Licensed Merchandise. Licensee shall not manufacture,
use or sell any Merchandise under the Licensed Xxxx without having
received the prior approval of Licensor pursuant to this Section 4(B).
4 C. The Licensed Merchandise manufactured on behalf of and sold by
Licensee shall be similar in all material respects in materials,
color, workmanship, designs, dimensions, styling and quality to the
Final Prototype approved by Licensor. If, in the sole judgment of
Licensor, any Licensed Merchandise is not being manufactured in
accordance with the Final Prototype thereof, Licensor shall so notify
Licensee in writing and Licensee shall promptly repair or change the
Licensed Merchandise in question to conform to the Final Prototype.
If, in the sole
4
judgment of Licensor, the Licensed Merchandise as repaired or changed
does not conform to the Final Prototype, then the Licensed Xxxx shall
be promptly removed from the Licensed Merchandise.
4 D. In the event that the standard, style, appearance or quality of any
Licensed Merchandise ceases to be acceptable to Licensor, Licensor
shall have the right, exercisable in its reasonable discretion, to
withdraw its approval of such Merchandise. Upon receipt of written
notice from Licensor of its determination to withdraw such approval,
Licensee shall, within sixty (60) days thereafter, either correct the
deficiencies in the Merchandise to the satisfaction of Licensor or
immediately cease the use of the Licensed Xxxx in connection with the
promotion, advertisement, sale, manufacture, distribution or use of
such Licensed Merchandise. (Nothing in the preceding sentence shall
limit or restrict Licensor's right of termination pursuant to
subparagraph 11(B)(iii) hereof.) Notice of such election by Licensor
to withdraw approval shall not relieve Licensee from its obligation to
pay royalties on such Licensed Merchandise for Sales made by Licensee
to the date of disapproval or thereafter, as permitted herein.
4 E. Except as specifically provided below, all right, title and interest
in and to the sketches, designs, and specifications of the
Merchandise, including any modifications and improvements thereto,
which are not part of the public domain, shall be the sole property of
the Licensee; provided, however, that all Merchandise manufactured
during the Term from designs approved by Licensor shall bear the
Licensed Xxxx. All Packaging which is not in the public domain or not
theretofore used by Licensee shall be the sole property of Licensor.
Except with regard to Packaging, in the event Licensor, as part of the
approval process set forth in Section 4(B) above, delivers to Licensee
any sketches, designs or specifications which Licensor believes to be
novel and proprietary to Licensor, Licensor shall so notify Licensee
in writing within ten (10) days of said delivery, but in any event
before the commencement of production. If Licensee fails to object in
writing to Licensor's claim that any such sketches, designs or
specifications are novel and proprietary to Licensor within ten (10)
business days of Licensee's receipt of Licensor's claim, then such
claimed items as are not in the public domain shall be deemed to be
the sole property of Licensor. Any such sketches, designs or
specifications provided by Licensor and not claimed as novel and
proprietary to Licensor pursuant to written notification as provided
above shall be deemed to have originated with, and to be the property
of, Licensee insofar as they are not part of the public domain. In
order to effectuate the vesting of rights for novel sketches, designs,
or specifications provided herein, Licensor and Licensee agree to
execute appropriate documents, assigning to the other party whatever
rights that party may have in the sketches, designs or specifications.
In no event shall Licensee claim or acquire, whether by operation of
law or otherwise, any right, title or interest in or to the Licensed
Xxxx.
4 F. Licensee may, subject to obtaining Licensor's prior written consent,
utilize a third party for the sole purpose of manufacturing all or a
portion of the Licensed Merchandise; provided that Licensee shall
furnish Licensor with (a) an undertaking in the form annexed hereto as
Exhibit 4(F), signed on behalf of both Licensee and such manufacturer,
and (b) such further information, including, but not limited to,
financial statements and credit reports of such manufacturer and a
description of the Licensed Merchandise to be manufactured by it, as
Licensor may require.
4 G. Licensor shall on reasonable notice to Licensee have the right to
visit and inspect any and all
5
manufacturing facilities (whether owned by Licensee or subcontracted
with the consent of Licensor) in which Licensed Merchandise is being
manufactured.
4 H. Licensor shall have the right, upon written notice to Licensee,
immediately to terminate the right of Licensee to manufacture Licensed
Merchandise through any manufacturing facility at Licensor's sole
discretion at any time it determines to its satisfaction that such
manufacturer has infringed, or is infringing, any of the trademarks,
patents, copyrights or designs of Licensor, or has pirated, or is
pirating, the trademarks, patents, copyrights or designs of Licensor,
or otherwise improperly has used, or is using, the trademarks,
patents, copyrights or designs of Licensor.
4 I. Licensee agrees to exercise commercially reasonable efforts to
safeguard the prestige of the Licensed Xxxx for the benefit of
Licensor. Licensee shall not market any of the Licensed Merchandise as
seconds or irregulars, unless Sales of such Licensed Merchandise does
not exceed, during any four (4) consecutive Quarterly Periods, four
percent (4%) of the total Sales of the Licensed Merchandise during
such Periods.
4 J. The Licensed Merchandise shall be sold by Licensee only at wholesale
and only to specialty stores, sporting goods stores, better department
stores (excluding discount stores such as KMart and Walmart),
warehouse or price clubs and retail catalogs, subject in each case to
the prior approval of Licensor. Sales to Sears are permitted only of
children's Merchandise. Licensee shall not (1) sell or distribute any
Licensed Merchandise to discounters, wholesalers, jobbers, diverters,
or any other entity which does not sell at retail exclusively, or (2)
sell the Licensed Merchandise directly to the public in retail stores,
catalogs or otherwise unless Licensee submits a proposal to Licensor
outlining its plans for the development of such a business and
Licensor approves such proposal, in the exercise of its sole
discretion.
4 K. Attached hereto as Exhibit 4(K) is a true and complete schedule
setting forth the name and address of all stores or other customers to
which Licensee proposes to sell or distribute Licensed Merchandise,
which customers are hereby approved by Licensor. Licensee shall update
such list on a quarterly basis. Licensor shall have the right to
disapprove, or withdraw its prior approval, of all or any portion of
the list. Licensee shall not sell Licensed Merchandise to any customer
that has not first obtained the approval of Licensor or as to which
Licensor has withdrawn its prior approval.
4 L. For purposes of monitoring quality, and for promotional and/or
advertising purposes, Licensee agrees to provide to Licensor, upon
request and free of charge, a reasonable number of current production
samples of Licensed Merchandise.
4 M. Any approval of Licensor required under this Agreement shall not
(unless otherwise expressly provided herein) be withheld unreasonably
and (except as otherwise expressly herein provided) any sample or
artwork submitted to Licensor which has not been disapproved in
writing within ten (10) business days after receipt by Licensor shall
be deemed to have been approved. However, Licensor's approval of any
Prototype or artwork shall not be construed to mean that Licensor has
determined that the sample or artwork conforms to the laws or
regulations of any jurisdiction, or that it is not in conflict with
any other licensed articles and Licensor shall not bear any liability
for such approval.
6
4 N. In any review conducted hereunder, Licensor is acting in an advisory
capacity only, and shall have no responsibility for the operation of
Licensee's business or its manufacturing, distribution, sales or
facilities used in connection therewith, whether upon the
recommendation of Licensor or otherwise.
5. Use of Licensed Xxxx
5 A. All Licensed Merchandise will bear at least one label with the
Licensed Xxxx in a form approved by Licensor in accordance with this
Article 5. Licensee agrees that it will use and display the Licensed
Xxxx only in the form in which it is registered and shall not use any
variations thereof or an abbreviated form thereof unless such is
specifically approved by Licensor in writing. Licensee shall submit to
Licensor for its prior approval copies of all advertising, including
coop advertising, promotional materials (including incentives designed
to promote sales such as gift items), Packaging or trade materials
utilizing the Licensed Xxxx, (including business cards, invoices,
stationery and other printed matter) prepared by or for Licensee for
use in connection with the Licensed Merchandise and the Licensed Xxxx.
Any advertising, labeling, office stationery, invoices, etc.
containing the Licensed Xxxx shall include an (R) in a circle adjacent
to the Licensed Xxxx and shall be used solely in conjunction with the
sale of Licensed Merchandise.
5 B. Licensee will not use the Licensed Xxxx as a Corporate name or as a
trademark, in whole or in part, or in such a way as to give the
impression that the Licensed Xxxx is the property of Licensee.
Licensee shall not use any xxxx other than the Licensed Xxxx (a
"Secondary Xxxx") in connection with any of the Licensed Merchandise
or on labels, tags, packaging or wrapping materials therefor without
obtaining the prior written consent of Licensor. Licensee hereby
sells, transfers and assigns to Licensor all right, title and interest
in and to all Secondary Marks used in connection with the Licensed
Xxxx along with the goodwill associated therewith. Licensee's right to
use any approved Secondary Xxxx shall be only for a period concurrent
with the Term or such shorter period as specified in Licensor's
approval, unless sooner terminated as herein provided. Licensor shall
have the right to proceed with applications to register the same in
its name or in the name of any related company and Licensee shall
provide its reasonable assistance with respect thereto.
5 C. Licensor may, to the extent Licensor reasonably deems it necessary to
the protection of its rights in and to the Licensed Xxxx, from time to
time issue written uniform rules and instructions to Licensee
regarding use of the Licensed Xxxx, and required marking legends or
notices which Licensee shall use in connection with the Licensed Xxxx.
5 D. Upon request of Licensor, but not more than once in each Annual Period
during the Term, Licensee will make a written or oral presentation to
Licensor detailing Licensee's plans to commercialize the Licensed
Merchandise and will submit to Licensor for its review a complete
written business plan, including marketing, advertising and sales
plans. Licensee agrees to provide Licensor with such additional
information as Licensor may reasonably request.
7
5 E. Licensee will comply with all laws, rules, regulations and
requirements of any governmental body which may be applicable to the
manufacture, advertising, distribution, sale, packaging, publicity or
promotion of the Licensed Merchandise.
5 F. Licensor and its duly authorized representatives shall have the right,
at any time within the Term during normal business hours and upon
reasonable notice, to inspect all facilities utilized by Licensee (and
its contractors and suppliers, to the extent Licensee may employ same)
in connection with the manufacture, sale, storage or distribution of
the Licensed Merchandise (provided, that the respective identities of
Licensee's suppliers and contractors, if any, shall be deemed
confidential and proprietary information to which the confidentiality
obligations under Article 16 hereof shall apply). Licensee shall take
all steps reasonably requested by Licensor to protect against the
misuse of the Licensed Xxxx by its suppliers, contractors and
customers. In addition, Licensee shall, upon demand by Licensor,
terminate any supplier or contractor whose use of child labor, prison
labor or unfair labor practices violates the policies of Licensor or
any United States governmental authority in this regard or any law or
regulation in effect in the Territory.
6. Royalty
6 A. Licensee shall pay Licensor, in United States currency, royalties with
respect to Net Sales during each Annual Period (the "Percentage
Royalties"), as follows: (i) with respect to Sales to department
stores (industry standard definition, but excluding X.X. Penney, Sears
and Xxxxxxxxxx Xxxx), three percent (3%) of Licensee's annual Net
Sales of Licensed Merchandise (except for Sales of girls' products) up
to and including $5,000,000; and five percent (5%) of the excess of
such Net Sales over $5,000,000; (ii) with respect to Sales to
customers other than department stores, as defined above, six percent
(6%) of Licensee's annual Net Sales of Licensed Merchandise (except
for Sales of girls' products) up to and including $4,000,000; four
percent (4%) of the excess of such Net Sales over $4,000,000 and up to
and including $8,000,000; and five percent (5%) of the excess of such
Net Sales over $8,000,000; and (iii) with respect to Sales of girls'
products, four percent (4%) of Licensee's annual Net Sales of such
Licensed Merchandise. The Percentage Royalties shall be paid by
Licensee within thirty (30) days after the last day of each Quarterly
Period on the Net Sales of all Licensed Merchandise sold during such
Quarterly Period.
6 B. Notwithstanding the provisions of Section 6(A) above, Licensee shall
in any event be obligated to pay Licensor a Guaranteed Minimum
Royalty, in United States currency, for each Annual Period as set
forth below. If the Percentage Royalties payable by Licensee under
Section 6(A) above with respect to any Quarterly Period do not equal
or exceed the amount of Guaranteed Minimum Royalties for such
Quarterly Period, as set forth in the table immediately below, then
Licensee shall pay to Licensor the amount of such shortfall in
accordance with Section 6(C). Licensee understands and agrees,
however, that its failure to meet the applicable Minimum Annual Net
Sales shall be grounds for termination and/or non-renewal of this
Agreement and may not be cured merely by Licensee's payment of the
applicable Guaranteed Minimum Royalties.
Minimum Annual Guaranteed Guaranteed
Annual Period Annual Net Sales Minimum Royalty Quarterly Payment
------------- ---------------- --------------- -----------------
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Initial Term
------------
First Annual Period $6,000,000 $120,000 $30,000
Second Annual Period $6,000,000 $120,000 $30,000
Third Annual Period $6,000,000 $120,000 $30,000
First Renewal Term
------------------
First Annual Period $7,000,000 $120,000 $30,000
Second Annual Period $7,000,000 $120,000 $30,000
Third Annual Period $7,000,000 $120,000 $30,000
Second Renewal Term
-------------------
First Annual Period $8,000,000 $120,000 $30,000
Second Annual Period $8,000,000 $120,000 $30,000
Third Annual Period $8,000,000 $120,000 $30,000
6 C. The Guaranteed Minimum Royalty referred to in the immediately
preceding Section 6(B) shall be payable for each Annual Period in four
(4) equal quarterly installments within thirty (30) days following the
close of each Quarterly Period, on or before each April 30, July 31,
October 31 and January 31. Licensee shall be entitled to credit,
against each Guaranteed Minimum Royalty payment made by Licensee in
respect of a Quarterly Period, any amount by which (x) the total of
all Guaranteed Minimum Royalty payments and Percentage Royalty
payments paid for all prior Quarterly Periods in the current Annual
Period, exceed (y) the total of all Guaranteed Minimum Royalty
payments which were payable for all prior Quarterly Periods in the
current Annual Period.
6 D. Notwithstanding the foregoing, in the event of the termination hereof
prior to the expiration of the Initial Term or any Renewal Term, the
Percentage Royalties on Net Sales shall be payable within thirty (30)
days after such termination for the portion of the Quarterly Period up
to the date of such early termination. In the event Licensee exercises
its option pursuant to Section 12(B) hereof to temporarily extend the
license herein granted for purposes of liquidating its inventory of
Licensed Merchandise, Licensee shall account for and make all payments
of Percentage Royalties based on Net Sales within (30) days after each
Quarterly Period or portion thereof until final termination. Licensor
agrees to refund within 30 days to Licensee any portion of Licensee's
payment of Percentage Royalties as may be appropriate to reflect
returns of Licensed Merchandise received by Licensee subsequent to any
payment of Percentage Royalties pursuant to this Section 6(D).
6 E. Within thirty (30) days following the conclusion of each Quarterly
Period, Licensee shall deliver to Licensor an itemized statement
setting forth the total Net Sales of Licensed Merchandise during said
period and, at the same time, shall deliver to Licensor a royalty
payment as provided in Section 6(A) above, but in no event an amount
less than the quarterly Guaranteed Minimum Royalty payment payable for
the Quarterly Period last ended. The itemized statement referred to
above shall contain the computation of Percentage Royalties earned
during such Quarterly Period, in sufficient detail to be audited from
Licensee's books.
6 F. Within sixty (60) days after the end of each Annual Period Licensee
shall submit to Licensor
9
a report setting forth, for the immediately previous Annual Period,
the totals of all information contained in the quarterly statements
provided to Licensor pursuant to Section 6(E) above, along with two
tabulations showing (i) a listing by SKU number of the total units and
Net Sales thereof including all returns and deductions for the Annual
Period for which the statement is submitted and (ii) a listing by
customer showing the customer's name, location and Net Sales to such
customer for the Annual Period for which the statement is submitted.
Such report shall be prepared in accordance with generally accepted
accounting principles, as applicable, which shall be consistently
applied, and shall be accompanied by a certification of Licensee's
chief financial officer to the effect that such officer has reviewed
the report and the quarterly statements furnished by Licensee
hereunder as well as Licensee's books of accounts and records, that
such report has been prepared in accordance with generally accepted
accounting principles as applicable, which were applied on a
consistent basis, and that, in such officer's opinion, such report and
quarterly statements are complete and correct.
6 G. Within sixty (60) days after the end of each Annual Period, if
requested by Licensor, and in event within sixty (60) days after the
date of expiration or termination of this agreement, Licensee shall
submit to Licensor an accurate schedule (the "Inventory Schedule")
setting forth, as of such date, the Licensee's inventories of Licensed
Merchandise, detailed by SKU number, of any Packaging, raw materials,
work in process or finished inventory of Licensed Merchandise which is
on hand or in transit as of the close of business on such date
(hereinafter the "Inventory").
6 H. All royalty payments, reports and accounting statements are to be sent
to Danskin, Inc., Attention: Chief Financial Officer, at the address
to which notices to Licensor are then to be sent pursuant to Article
20 hereof.
7. Records
7 A. Licensee shall maintain, at its main offices, true and accurate books
and records, in accordance with generally accepted accounting
principles, containing all particulars which may be necessary for the
purpose of conducting its business according to the terms and
conditions herein contained and for determining the amounts payable to
Licensor pursuant to Article 6 and Section 12(B). Licensee shall make
such books and records available to Licensor and its designated
representatives during regular business hours and upon reasonable
notice during the Initial Term and any Renewal Term and for a period
of twenty-four (24) months after each such period for the purpose of
verifying Licensee's reports, records and payments hereunder. Licensor
and its representatives shall be entitled to make copies, at
Licensor's expense, of any such records subject to Licensor's
obligation to treat information contained in such records as
confidential pursuant to Article 16. Licensee shall render such
assistance to Licensor and its designated representatives as they may
reasonably request. If, upon inspection of the books and records being
maintained by Licensee as required hereunder, Licensor uncovers an
error in royalty computation such that royalties paid for any period
being reviewed are to be adjusted by greater than five percent (5%) of
the royalties actually paid by Licensee for such period, Licensee
shall promptly make whatever payments may be necessary to reimburse
Licensor for the reasonable costs of conducting the audit.
Additionally, if the audit uncovers an underpayment or overpayment of
royalties, Licensee (or
10
Licensor) agrees to promptly make (or return) such discrepancy in
payment and, in the event of an underpayment of royalties, Licensee
shall pay interest to Licensor in accordance with Article 18 hereof.
8. Trademark and Related Rights
8 A. Licensee acknowledges that the Licensed Xxxx has acquired valuable
goodwill with the public and that products bearing the Licensed Xxxx
have acquired a reputation of high quality, prestige and style.
Licensee acknowledges that Licensor is the owner of all right, title
and interest in and to the Licensed Xxxx in any and all forms or
embodiments thereof, and is also the owner of the goodwill attached to
the Licensed Xxxx including that which arises from the sale of
Licensed Merchandise hereunder. Sales by Licensee of the Licensed
Merchandise shall be deemed to have been made by and for the benefit
of Licensor for the purposes of securing trademark rights and/or
registration and all uses of the Licensed Xxxx by Licensee,and any
goodwill arising therefrom, shall inure to the benefit of Licensor.
Licensee hereby assigns to Licensor any rights to the Licensed Xxxx
which may, by operation of law or otherwise, vest in Licensee, and any
goodwill arising therefrom, which shall in any event inure to the
benefit of Licensor. Licensee shall not attempt to register the xxxx
"DANSKIN(R)", or any variation or simulation thereof, for its own
benefit in any country in the world. Licensee agrees that it will not
knowingly directly or indirectly infringe the "DANSKIN(R)" trademark
in countries outside the Territory and will not contribute to or
induce such infringement by selling Licensed Merchandise to persons
whom Licensee knows, or reasonably has reason to know, intend to
infringe the "DANSKIN(R)" trademark outside the Territory.
8 B. Licensee acknowledges that only Licensor may file or prosecute
trademark applications to register the Licensed Xxxx for the
Merchandise. Licensee will cooperate with Licensor in connection with
the filing and prosecution by Licensor of any applications to register
the Licensed Xxxx as a trademark within the Territory, including the
Territory as such may be amended from time to time hereafter, and the
maintenance or renewal of any trademark registration, and will, free
of charge, supply Licensor with such Licensed Merchandise, including
samples, containers, labels and other uses of the Licensed Xxxx, as
may reasonably be requested by Licensor in connection therewith.
Licensee shall promptly execute all documents (including, but not
limited to, the making and terminating of registered user agreements)
which Licensor may reasonably request in order to obtain or maintain a
registration in any jurisdiction or to establish or to maintain
Licensor's ownership of the Licensed Xxxx in any jurisdiction. Except
as otherwise expressly provided in this Section 8(B), Licensor will
pay all costs and fees incurred by it or Licensee, if Licensee incurs
such expenses at the request of Licensor, in connection with filing
for, obtaining, maintaining or renewing any trademark registration of
the Licensed Xxxx in any jurisdiction. The rights and obligations
under this Section 8(B) shall survive termination of this Agreement.
8 C. Licensee agrees and undertakes to use the Licensed Xxxx strictly in
compliance with and observance of any and all applicable trademark
laws and to use such legends, markings or notices in connection
therewith as are required by law or otherwise reasonably required by
Licensor to protect its rights. Upon expiration or termination of this
Agreement for any
11
reason whatsoever, Licensee will execute and file any and all
documents required by Licensor regarding the Licensed Xxxx. Licensor
shall be solely responsible for bearing all expenses incurred in
preparing and recording any such documents.
8 D. Licensee agrees (i) not to challenge or in any manner impugn the
validity of this Agreement or the validity or ownership by Licensor of
the Licensed Xxxx or any application for registration thereof, or any
trademark registrations thereof, in any jurisdiction, and (ii) not to
contest the fact that Licensee's rights under this Agreement, subject
to the provisions of Section l2(B) hereof, terminate upon termination
of this Agreement. Licensee shall not become a party adverse to
Licensor in any litigation in which others may contest the validity of
the Licensed Xxxx or Licensor's rights thereto. The provisions of this
Section shall survive any termination or expiration of this Agreement.
8 E. Licensee shall not commit any act, suffer to be done any act, fail to
act or at any time use, promote, advertise, display, commercialize or
otherwise use the Licensed Xxxx or Licensed Merchandise or any
material utilizing or reproducing the Licensed Xxxx or Licensed
Merchandise, in a manner that will adversely affect any rights of
Licensor thereto or therein or which in any way derogates the value or
reputation of the Licensed Xxxx.
9. Indemnification and Insurance
9 A. Licensor does hereby agree to indemnify and hold harmless Licensee,
its parents, subsidiaries, and affiliates and their officers,
directors and employees against any and all liabilities, claims,
causes of action, suits, damages and expenses for which they or any of
them may become liable or may incur or be compelled to pay in any
action or claim against them or any of them for or by reason of (a)
the infringement of another's trademark as a result of Licensee's
approved use of the Licensed Xxxx within the Territory, or (b) the
infringement of design or trade secret rights as a result of
Licensee's use of any designs, sketches or specifications provided by
Licensor and claimed by Licensor as novel and proprietary to it
pursuant to Section 4(E), provided that Licensee gives Licensor
written notice of each such claim within ten (10) business days of
receipt of such claim (although any failure or delay in giving such
notice shall not affect Licensor's indemnification obligations unless
Licensor's ability to defend is materially prejudiced thereby) and the
opportunity to control the defense of any such claim through counsel
of its own choosing, and fully cooperates with Licensor in the defense
against such claim. If Licensor elects not to undertake the defense of
any such claim, it shall pay or reimburse Licensee, immediately upon
request, for all reasonable costs and expenses, including but not
limited to reasonable attorneys' fees and expenses, that Licensee may
incur in the defense of such claim.
9 B. Licensee does hereby agree to indemnify and hold harmless Licensor,
its subsidiaries and affiliates and their officers, directors and
employees against any and all liabilities, claims, causes of action,
suits, damages and expenses for which they or any of them may become
liable or may incur or be compelled to pay in any action or claim
against them or any of them for or by reason of (a) the infringement
of any patent, design or trade secret rights of third parties as a
result of Licensee's use of any designs, sketches or specifications
provided by
12
Licensee or its contractors, (b) any acts that may be committed,
omitted or suffered by Licensee or any of its servants, agents or
employees in connection with the performance of this Agreement, or (c)
any acts giving rise to liability in connection with Licensed
Merchandise including, but not limited to, the manufacture, marketing,
promotion, publicity, sales, advertising, use, or distribution of
Licensed Merchandise. Licensor shall give Licensee written notice of
any such claim within ten (10) business days of receipt of such claim
(although any failure or delay in giving such notice shall not affect
Licensee's indemnification obligation unless Licensee's ability to
defend is materially prejudiced thereby) and the opportunity to
control the defense thereof through attorneys of its own choosing and
reasonably approved by Licensor. Licensor shall fully cooperate with
Licensee in the defense against any such claim. If Licensee elects not
to undertake the defense of any such claim, it shall pay or reimburse
Licensor, immediately upon request, for all reasonable costs and
expenses, including but not limited to reasonable attorneys' fees and
expenses, that Licensor may incur in the defense of such claim.
9 C. A party obligated to make indemnification by the terms of this Article
9 (the "(Indemnifying Party") may, without the consent of the party to
be indemnified (the "Indemnified Party"), settle or compromise or
consent to the entry of any judgment in any action involving only the
payment of money which includes as an unconditional term thereof the
delivery by the claimant or plaintiff to the Indemnified Party of a
duly executed written release of the Indemnified Party from all
liability in respect of such action which written release shall be
reasonably satisfactory in form and substance to counsel for the
Indemnified Party; provided, however, that if the money to be paid in
connection with such settlement, compromise, or entry of judgment (the
"Cash Settlement") is payable in installments, the Indemnifying Party
shall be required to provide a letter of credit or such other security
for the payment of the entire Cash Settlement as shall be satisfactory
to counsel to the Indemnified Party. The Indemnifying Party shall not,
without the written consent of the Indemnified Party, settle or
compromise any action involving relief other than the payment of money
in any manner that, in the reasonable judgment of the Indemnified
Party, would adversely affect the Indemnified Party. So long as the
Indemnifying Party is contesting any claim in good faith, the
Indemnified Party shall not pay or settle any such claim, unless such
settlement includes as an unconditional term thereof the delivery by
the claimant or plaintiff and by the Indemnified Party to the
Indemnifying Party of duly executed written releases of the
Indemnifying Party from all liability in respect of such claim which
written releases shall be reasonably satisfactory in form and
substance to counsel for the Indemnifying Party. The Indemnified Party
shall cooperate fully (at the Indemnifying Party's expense) in all
aspects of any investigation, defense, pre-trial activities, trial,
compromise, settlement or discharge of any claim in respect of which
indemnity is sought pursuant to this Article 9.
9 D. In any legal action between the parties involving a claim for
indemnification hereunder, the prevailing party shall be entitled to
recover its costs and expenses incurred in such action, including
reasonable attorneys' fees.
9 E. At all times during the Term, Licensee agrees to carry, with an
insurance carrier having been authorized to do business in the State
of Pennsylvania and having a rating of A+ according to Best's
Insurance Reports, a broad form Comprehensive General Liability
Insurance Policy written on an occurrence basis covering its
activities with respect to the Licensed Merchandise
13
which includes but is not limited to coverage for contractual
liability, premises, operations, products and completed operations,
personal and advertising injury liability and broad form property
damage liability, with limits of liability of at least $2 Million per
occurrence and $3 Million in the annual aggregate. Licensee shall have
Licensor named as an additional insured on such policy. Licensee
shall, upon request by Licensor, deliver to Licensor (i) a certificate
of such insurance from the Licensee's insurance carrier which sets
forth the scope of coverage and the limits of liability stated above
and further provides that the policy may not be materially changed or
canceled without thirty (30) days prior written notice to Licensor
and/or (ii) a copy of the policy.
10. Infringement
10 A. Licensee shall promptly notify Licensor of any infringement or
imitation of the Licensed Xxxx by third parties, or any act of unfair
competition by third parties relating to the Licensed Xxxx, promptly
after such infringement or act shall come to Licensee's attention.
After receipt of such notice from Licensee, Licensor shall, in the
exercise of its sole discretion, decide whether to take action to stop
such infringement or other act. If Licensor decides to take such
action, Licensee shall fully cooperate with Licensor and, if so
requested by Licensor, shall join with Licensor as a party to any
action brought by Licensor. Licensor shall bear all expenses in
connection with such action. Any recovery as a result of such action
belong solely to Licensor. If Licensor, in the exercise of its
discretion, declines to commence, prosecute or settle any such
infringement, then Licensee, at its own expense, may take steps to
stop such infringement subject to the following conditions: (i)
Licensor shall have the right to approve the selection of counsel by
Licensee; (ii) Licensee shall keep Licensor continuously apprised of
the progress of such proceeding, and (iii) no settlement or compromise
of such proceeding may be made by Licensee without the prior written
approval of Licensor, which approval shall not be unreasonably
withheld or delayed. All intangible benefits resulting from such
proceeding shall inure to the benefit of Licensor. In the event that
any monetary recovery is made against such infringer, Licensee shall
recoup its litigation expenses, including reasonable counsel fees,
from such recovery and then remit the balance of the recovery to
Licensor.
10 B. In the event that any person other than Licensee or a customer shall
use the Licensed Xxxx in a manner which infringes upon the exclusive
License hereby granted, Licensor shall, following written notice
thereof from Licensee, initiate any action which Licensor, in the
exercise of its reasonable discretion, deems appropriate to restrain
such infringement with respect to the Licensed Merchandise. In such
event Licensee shall, at Licensor's expense, join with Licensor in
such action to the extent and in such manner as Licensor, in its
reasonable discretion, may deem advisable for the protection of the
respective rights of Licensor and/or Licensee to the Licensed Marks.
Licensee agrees to cooperate fully with Licensor in connection with
any such claims or suits and undertakes to furnish full assistance to
Licensor in the conduct of all proceedings in regard thereto. Licensor
shall have the sole right, exercisable in its sole discretion, to
settle any claim or suit of the kind referred to in this Section
10(B).
14
11. Termination
Notwithstanding the terms and conditions of Article 3 hereof, this
Agreement may be terminated in accordance with the following provisions:
11 A. Either party may terminate this Agreement by giving notice in writing
to the other party in the event the other party (the "Defaulting
Party") fails to perform its obligations or acts in breach of its
covenants as set forth in this Agreement and such Defaulting Party
fails to take all reasonable steps necessary to cure such default
within (30) days after delivery of written notice of such default from
the other party. Notwithstanding the preceding sentence, in the event
of a breach by Licensee of its obligations under Articles 2, 4, 5, 6
or 8 hereof, Licensor may terminate this Agreement within ten (10)
days after delivery of written notice of such breach to Licensee if
Licensee fails to remedy such breach within such ten (10) day period.
Notwithstanding the foregoing, if, at any time during the Term,
Licensor gives notice to Licensee of default or breach two (2) times,
then upon the third notice Licensee shall no longer have the right to
remedy the breach and termination shall be effective at the time of
notice. The failure of Licensor to exercise this right to terminate
for any breach shall not affect its right to exercise such right upon
a subsequent breach.
11 B. Without prejudice to any other rights Licensor may have, Licensor may
terminate this Agreement, without liability, at any time:
(i) If Licensee fails to continue the bona fide distribution and
sale of the Licensed Merchandise for a consecutive period in
excess of six months; or
(ii) If Licensee understates royalties due for any royalty report by
ten (10 %) percent or more, and fails to pay such deficiency
within ten (10) days after delivery of written notice of such
deficiency to Licensee, or misrepresents or misstates material
information in any other report required or requested under this
Agreement; or
(iii) If the quality of Licensed Merchandise (other than seconds) is
materially lower (as determined by Licensor in its sole
subjective discretion) than Final Prototypes, and Licensee fails
to correct the deficiencies to the satisfaction of Licensor
within ten (10) days of written notice; or
(iv) If Licensee fails to achieve the Minimum Annual Net Sales
specified in Section 6(B) hereof for any Annual Period;
provided, however, that Licensor shall not have such right of
termination if, together with the report required to be
delivered under Section 6 (F), Licensee shall have paid to
Licensor an amount equal to the difference between the amount of
Guaranteed Minimum Royalty previously paid with respect to such
Annual Period and the Percentage Royalties that would be
calculated with respect to the Minimum Annual Net Sales for such
period.
11 C. If either party shall make an assignment for the benefit of creditors,
or shall generally not pay its debts as they become due, or shall file
a petition commencing a voluntary case under the Bankruptcy Reform Act
of 1978, 11 U.S.C. Section 101 et seq., as amended or any successor
thereto (the "Bankruptcy Code"), or shall be adjudicated an insolvent,
or shall file any
15
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief
under any present or future statute, law or regulations, or shall file
any answer admitting or shall fail to deny the material allegations of
such petition filed against it for such relief, or consent to the
filing of any such petition or shall seek or consent to or acquiesce
in the appointment of any, agent, trustee, receiver, custodian,
liquidator or similar officer for it or of all or any substantial part
of its assets or properties, or its directors or majority stockholders
shall take any action authorizing any of the foregoing or looking to
its dissolution or liquidation, or it shall cease doing business as a
going concern, or an order for relief shall be entered against it
under any chapter of the Bankruptcy Code, this Agreement shall
automatically, without notice or any further act or deed of any party,
terminate and be of no further force or effect, except that any and
all liabilities and obligations of the parties at the time outstanding
under or in connection with this Agreement shall automatically,
without notice or any further act or deed of any party, become due and
payable.
11 D. If, within sixty (60) days after the filing of any petition or the
commencement of any proceeding against either party seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the Bankruptcy Code or any other
present or future statute, law or regulation, such proceeding shall
not have been dismissed, or a decree or order of a court having
competent jurisdiction shall have been entered approving as properly
filed any such petition, or if, within sixty (60) days after the
appointment, without the consent or acquiescence of such party, of any
agent, trustee, receiver, custodian, liquidator or similar officer for
it or of all or any substantial part of its properties, such
appointment shall not have been vacated, this Agreement shall
automatically, without notice or any further act or deed of any party,
terminate and be of no further force or effect, except that any and
all liabilities and obligations of the parties at the time outstanding
under or in connection with this Agreement shall automatically,
without notice or any further act or deed of any party, become due and
payable.
11 E. In the event Licensee attempts to assign or sublicense any of its
rights hereunder without the prior written approval of Licensor as
required by the terms of Section 2(G), this Agreement shall terminate
immediately, without notice to Licensee or any other action on
Licensor's part.
11 F. In the event that during the Term hereof the Licensed Xxxx is finally
held invalid or unenforceable in the Territory by a court of competent
jurisdiction, from which decision Licensor fails or elects not to
appeal, or any court of competent jurisdiction permanently enjoins the
use of the Licensed Xxxx as contemplated hereby, Licensee's sole
remedy, except for the indemnification provided in Section 9(A), shall
be termination of this Agreement without any further liability
hereunder and Licensee shall not otherwise be entitled to damages from
Licensor of any nature or sort whatsoever.
11 G. If, in a single transaction or a series of transactions, Licensee
sells or otherwise disposes of substantially all of its business or
assets to a third party, or such of the outstanding voting equity
interest in Licensee is transferred (by disposition, or otherwise), in
a single transaction or a series of transactions, as shall result in
control over the management of Licensee to be thereby substantially
changed, this Agreement shall terminate immediately, without notice to
Licensee or any other action, on Licensor's part.
16
12. Effect of Expiration or Termination
12 A. Except to the extent provided in Section 12(B) hereof, upon the
expiration or termination of this Agreement for any reason, neither
Licensee nor its receivers, representatives, agents, successors or
permitted assigns shall have any right to exploit or in any way use
the Licensed Xxxx. Except to the extent provided in Section 12(B)
hereof, upon such expiration or termination of this Agreement,
Licensee shall forthwith discontinue all use of the Licensed Xxxx and
shall not thereafter use the Licensed Xxxx or any variation or
simulation thereof, or any xxxx confusingly similar thereto, and
Licensee hereby irrevocably releases and disclaims any right or
interest in or to the Licensed Xxxx. Within (30) days of the
expiration or termination of this Agreement, Licensee shall provide
Licensor with an Inventory Schedule pursuant to Section 6 (G).
12 B. If, upon the expiration of this Agreement or its termination prior to
expiration, other than by Licensor pursuant to Xxxxxxx 00 (X), 00 (X),
00 (X), 00 (X) or 11 (E), Licensee shall have on hand any Inventory
and if Licensee is not otherwise in default under this Agreement,
Licensee may continue to use the Licensed Xxxx solely in connection
with the advertising, merchandising, promotion and sale of the
Inventory for a period of six (6) months following the expiration or
termination of this Agreement (the "Sell-Off Period") under a
nonexclusive license. During such Sell-Off Period, Licensee shall be
obligated to continue to pay Licensor the Percentage Royalties
provided for in Section 6(A) and, anything herein to the contrary
notwithstanding, all advertising, merchandising, promotion and sale of
the Inventory during the Sell-Off Period shall continue to be subject
to, and performed in accordance with, the terms of this Agreement
(including, without limitation, Article 4 hereof). If Licensee elects
to continue to use the Licensed Xxxx as provided under this Section,
it shall notify Licensor of its election thirty (30) days prior to the
expiration or termination of this Agreement. IN NO EVENT SHALL
LICENSEE ACCEPT, AFTER THE TERMINATION OR EXPIRATION OF THIS
AGREEMENT, ANY ORDER FOR NEW PRODUCTION OF LICENSED MERCHANDISE TO BE
MANUFACTURED AFTER THE CLOSE OF THE SELL-OFF PERIOD NOR ANY OTHER
ORDER WHATSOEVER THAT SHALL REQUIRE DELIVERY AFTER THE CLOSE OF THE
SELL-OFF PERIOD. Licensee's Sales of Licensed Merchandise during the
Sell-Off Period must not exceed the reported Inventory.
12 C. Notwithstanding the foregoing, or Licensee's desire to use the
Licensed Xxxx as provided in Section 12(B) above, Licensor shall have
the option, exercisable by written notice to Licensee within thirty
(30) days after its receipt from Licensee of the complete Inventory
Schedule as provided in Section 12(A), to purchase any or all of the
Inventory not subject to outstanding bona fide purchase orders, for an
amount (the "Inventory Price") equal to the standard cost of
manufacturing to Licensee of the Inventory being purchased or its fair
market value, whichever is lower. (In the event that the parties
cannot agree upon the fair market value of any Inventory, Licensor
shall be entitled to purchase same at the fair market value claimed by
Licensor, subject to the agreement of Licensor that such dispute as to
fair market value shall subsequently be submitted to arbitration
pursuant to Section 17(B) and the agreement of the
17
parties that the costs of the prevailing party in such arbitration
shall be borne by the other party). In the event that Licensor
notifies Licensee of its desire to purchase the Inventory on hand,
such notice shall apply only to that portion of the Inventory
remaining on the date said notice is received by Licensee. Upon such
day within thirty (30) days of its receipt of such notice as Licensor
shall designate to Licensee in writing, Licensee shall deliver to
Licensor or its designee all of the Inventory referred to therein
against payment by Licensor of the full Inventory Price in cash.
Licensor shall pay Licensee only for such Inventory as is deemed by
Licensor, in its reasonable discretion, to be in marketable condition.
12 D. Upon the expiration or termination of this Agreement or upon the
expiration of the Sell-Off Period provided for in Section 12(B)
hereof, Licensee shall, at its own expense, destroy all labels,
packaging, advertising and promotional materials bearing the Licensed
Xxxx and confirm such destruction to Licensor in writing.
12 E. Notwithstanding any termination or expiration of this Agreement,
Licensor shall have, and hereby reserves, all the rights and remedies
which it has, or which are granted to it by operation of law, with
respect to the collection of royalties or other funds payable by
Licensee pursuant to this Agreement and the enforcement of all rights
relating to the establishment, maintenance or protection of the
Licensed Xxxx. In addition, upon termination or expiration of this
Agreement, both Licensee and Licensor shall continue to have rights
and remedies hereunder, or granted to each of them by operation of
law, with respect to damages for breach of this Agreement on the part
of the other.
12 F. Licensor may, during the Sell-Off Period, manufacture, advertise,
promote, sell and distribute Merchandise directly or through others,
and grant licenses to third parties with respect to the Merchandise
and the Licensed Xxxx.
12 G. One hundred and twenty (120) days prior to the expiration of the
Initial Term or of any Renewal Term, if Licensee chooses not to renew
this Agreement or does not qualify under Section 3(A) to do so,
Licensor shall have the right to manufacture, advertise, promote, sell
and distribute Licensed Merchandise in the Territory directly or
through others and to grant licenses in connection therewith to third
parties, provided such Licensed Merchandise shall not be shipped prior
to the expiration of the Term of this Agreement.
12 H. Upon the expiration or termination of this Agreement in accordance
herewith, Licensee shall not be entitled to termination payments,
compensation, reimbursements, or damages on account of any loss of
prospective profits on anticipated sales or on account of
expenditures, including for advertising, promotion or for
manufacturing facilities, investments, leases, or other commitments
relating to the business or goodwill of Licensee.
13. Bankruptcy and Financial Covenants
13 A. Notwithstanding the provisions of Section 11 (C) and Section 11 (D),
in the event that it is determined by any court or bankruptcy trustee
that this Agreement may be assumed or
18
assigned in connection with a case commenced by or against either
party under the Bankruptcy Code, Licensor and Licensee hereby
acknowledge that adequate assurance of future performance under this
Agreement (within the meaning of the Bankruptcy Code) shall include,
inter alia, adequate assurance:
(i) that any and all royalty payments and other consideration due
from Licensee to Licensor under or pursuant to this Agreement
shall be duly and timely paid and shall not decline from the
levels specified in this Agreement;
(ii) that the assumption or assignment of this Agreement will not
result in the breach by Licensor or any other party of any
provision in any other license, contract, or agreement relating
to the Licensed Xxxx or otherwise;
(iii) that any person or entity that assumes this Agreement or to
which this Agreement is assigned shall fully and faithfully
assume, observe and comply with the covenants, requirements and
restrictions provided for under this Agreement and that
termination rights for breach of this Agreement apply;
(iv) that the value of the Licensed Xxxx for use in connection with
the sale of Licensed Merchandise shall not be materially
diminished by reason of the assumption or assignment of this
Agreement; and
(v) that the transferee of the license of the Licensed Xxxx will not
be a direct competitor of Licensor.
Any person or entity to which this Agreement is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or
deed to have assumed all of the obligations arising under this Agreement on
and after the date of such assignment. Any such assignees shall upon demand
execute and deliver to Licensor or Licensee, as the case may be, an
instrument confirming such assumption.
14. Representations and Warranties
14 A. Licensor represents and warrants that it has the full legal right,
power and authority, and all corporate action has been taken that is
necessary to authorize Licensor, to enter into this Agreement and to
grant the rights and licenses granted herein by Licensor to Licensee.
14 B. Licensor represents and warrants that to the best of its knowledge,
the Licensed Xxxx does not infringe or otherwise violate the rights of
any third party in the Territory.
14 C. Licensee represents and warrants that it has the full legal right,
power and authority, and all corporate action has been taken that is
necessary to authorize Licensee, to enter into this
19
Agreement and to consummate all transactions and to fulfill the
obligations contemplated herein.
14 D. Each of Licensor and Licensee represents and warrants that neither the
execution and delivery hereof nor the consummation of the transactions
contemplated hereby to be performed by it constitutes (with or without
notice and/or passage of time) a default under, or breach of any term
or provision of, any agreement or instrument to or by which it or any
of its assets is subject or bound.
15. Advertising and Sales Promotion
15 A. Licensee shall exercise its best efforts to promote and advertise
Licensed Merchandise in the various appropriate media throughout the
Territory as may be approved by Licensor. Accordingly, Licensee agrees
that during the Term it will expend an amount not less than one
percent (1%) of Net Sales in each Annual Period for the purpose of
advertising, promoting and publicizing the Licensed Merchandise. In
the event Licensee fails to make the minimum advertising expenditures
set forth above during any Annual Period, the amount of the deficiency
shall, at Licensor's discretion, be paid to Licensor promptly
following the rendering of the final accounting for said Annual
Period, to be used as Licensor may elect to advertise and promote the
Licensed Xxxx, or be added to the minimum advertising expenditures
required to be spent by Licensee on advertising the Licensed
Merchandise during the following Annual Period.
15 B. "Advertising" as used in this Section shall include cooperative
advertising whereby a third party contributes to advertising expenses
incurred, and promotion and display advertising, as well as
advertising appearing in print or other media. The following items
shall not constitute expenditures towards this requirement: (i) the
portion of any cooperative advertising paid by a third party and (ii)
expenses incurred by Licensee in connection with its participation in
any trade shows, for the preparation of catalogs, and for tags, labels
and Packaging.
15 C. Licensee agrees not to offer for sale, advertise or publicize any of
the Licensed Merchandise without the prior written approval of
Licensor. All advertising and promotional material including, but not
limited to, artwork, displays and copy, shall be submitted to Licensor
for its written approval prior to the use of any such advertising or
promotional materials.
15 D. No consumer advertising or promotional material shall contain
reference to Licensor's name except that Licensee's tags and labels
which have been approved by Licensor may utilize the following
statement: "DANSKIN(R)(TM of DANSKIN, INC. used under license by
Wundies Industries, Inc.)" only on approved Licensed Merchandise.
15 E. Licensee shall maintain a separate area for exhibition of Licensed
Merchandise within Licensee's showroom with reasonably prominent
signage designating such area as a showroom for licensed
DANSKIN(R)merchandise. Said showroom shall be staffed and maintained
in a manner commensurate with the reputation and prestige of the
Licensed Xxxx as a designation for high quality products. In addition,
any Merchandise which bears the Licensed Xxxx shall be designed
exclusively for the Licensed Merchandise.
20
16. Confidentiality
16 A. In connection with the performance of this Agreement, each of Licensor
and Licensee will have access to certain confidential and proprietary
information of the other party, including, but not limited to,
business plans, proposed advertising, designs, sales records,
financial data, identities of suppliers and manufacturers and
manufacturer's know-how. Recognizing that such information represents
valuable assets and property of the disclosing party, and the harm
that may befall the disclosing party if any of such information is
disclosed, the recipient agrees to hold such in strict confidence and
not to use or otherwise disclose any such information to third parties
without having received the prior written consent of the disclosing
party. The obligation of confidentiality created herein shall survive
the expiration or termination of this Agreement.
16 B. The obligations of confidentiality created herein shall cease to apply
(i) to information which falls into the public domain, provided it did
not fall into the public domain through the unauthorized acts of the
receiving party; (ii) to information which was in the receiving
party's possession prior to its disclosure, or was later disclosed to
the receiving party by a third party who is lawfully in possession of
such and not bound by any restriction with respect to the disclosure
of same; (iii) to information which is required to be disclosed by
law, but only to the extent so required and only upon notice to the
other party hereto; and (iv) to information that Licensor may be
required to disclose in order to enforce its rights under this
Agreement.
17. Governing Law; Arbitration
17 A. This Agreement shall be deemed to be a contract made under the laws of
the State of New York and shall be governed by and construed in
accordance with the laws of such State.
17 B. Any controversy arising out of or relating to this Agreement shall be
resolved by arbitration in the City of New York pursuant to the
Commercial Rules then obtaining of the American Arbitration
Association. The panel of Arbitrators appointed to settle any
controversy or claim shall consist of three (3) arbitrators. The
Arbitrators sitting in any such controversy shall have no power or
jurisdiction to alter or modify any express provision of this
Agreement or to make any award which by its terms affects any such
alteration or modification.
17 C. The parties consent to the jurisdiction of any Federal or State Court
located in New York County and further consent that any demand for
arbitration, or any process or notice of motion or other application
to any such Court or a Judge thereof in connection with the same, may
be served in or out of the State of New York by registered mail or by
personal service provided a reasonable time for appearance is allowed.
17 D. The provision for arbitration herein shall not be deemed any waiver of
the rights of either party to any provisional remedy provided under
New York law. It is agreed that in the event of any violation or
threatened violation hereof, the other party hereto shall have the
right to
21
obtain a preliminary injunction enjoining any further violation of
this Agreement pending the arbitration hearing.
18. Interest
18 A. Licensee shall pay interest to Licensor upon all overdue amounts
payable under this Agreement at the prime rate, plus three percent
(3%) per annum, in effect at The Chase Manhattan Bank, N.A. (or its
successor), through the period from the due date to the date of
payment. However, such payment shall in no way affect the rights of
Licensor under this Agreement, including but not limited to those
specified in Article 12 hereof.
19. Importation of Merchandise
19 A. All Merchandise caused to be manufactured by Licensee outside the
United States shall be imported into the United States under the name
of the LICENSEE ONLY. Any and all Merchandise imported under a name
other than that of Licensee shall be deemed counterfeit by U.S.
Customs and will be treated accordingly.
19 B. In order to prevent the importation of counterfeit merchandise,
Licensee shall use a customs broker approved by Licensor for all
Merchandise imported under this Agreement. Licensor shall not be
liable for any acts of or transaction with said broker.
20. Notices
All notices or other written communications required or permitted by this
Agreement to be given to a party shall be in writing and shall be deemed to
be duly given when received if hand delivered (provided a receipt is
obtained) or sent by overnight courier or mailed by certified or registered
mail, return receipt requested (provided that if no return receipt is
received, the notice shall be deemed delivered on the third business day
following its deposit, properly addressed and postage prepaid, in the
United States mails); if to Licensor, to the address of Licensor first
above written, Attention: Director of Marketing, and if to Licensee, to the
address of Licensee first above written. Notices shall also be deemed to
have been received upon electronically confirmed transmission to the
following facsimile transmission numbers:
22
(i) Licensor: (000) 000-0000
(ii) Licensee: (000) 000-0000
Either party may change the address (or facsimile transmission number) to
which such notice and other communications shall be sent by written notice
to the other party, provided that any notice of change of address (or
facsimile transmission number) shall be effective only upon receipt.
21. Miscellaneous
21 A. This Agreement sets forth the entire agreement and understanding
between the parties hereto relating in any way to the use of the
Licensed Xxxx, or to any other subject matter contained herein and
merges all prior discussions between them. Neither party shall be
bound by any definition, condition, warranty or representation other
than as expressly stated in this Agreement, and this Agreement may not
be amended or modified except by a written instrument duly executed by
Licensor and Licensee.
21 B. Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint venturers, or either as an employee or
agent of the other. Licensee shall not represent itself as agent or
representative of Licensor for any purpose and shall have no right to
create or assume any obligation of any kind, expressed or implied, for
or on behalf of Licensor.
21 C. The headings in this Agreement are for the convenience of the parties
only and shall not effect the meaning or interpretation of this
Agreement or any provisions thereof.
21 D. No waiver by either party, whether expressed or implied, of any
provision of this Agreement, or of any breach or default, shall
constitute a continuing waiver of such provision or a waiver of any
other provision of this Agreement. Acceptance of payments by Licensor
shall not be deemed a waiver of any violation of, or default under,
any of the provisions of this Agreement by Licensee.
21 E. Except as otherwise provided herein, this Agreement shall. be binding
upon and inure to the benefit of the parties, their successors and
permitted assigns.
21 F. This Agreement may be executed in one or more counterparts each of
which shall be deemed one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
DANSKIN, INC. WUNDIES INDUSTRIES, INC.
LICENSOR LICENSEE
By: By:
----------------------------------- ----------------------------------
23
Name: Name:
--------------------------------- --------------------------------
(Printed) (Printed)
Title: Title:
-------------------------------- -------------------------------
24
EXHIBIT 1(E)
LIST OF "MERCHANDISE'
STYLES
================================================
STYLE DESCRIP
----- -------
4250 DANSKIN CAMISOLE/PANTY SET
4251 DANSKIN CAMISOLE/PANTY SET
4265W DANSKIN SPORTS BRA W/PANTY
4266P DANSKIN LACE BRA W/BIKINI
4266W DANSKIN LACE BRA W/PANTY
4276 DANSKIN KNIT HEART CAMI SET
4276L DANSKIN CAMISOLE/PANTY SET
4276M DANSKIN CAMISOLE/PANTY SET
4276P DANSKIN CAMISOLE/PANTY SET
4276W DANSKIN CAMISOLE/PANTY SET
4505-01 DANSKIN BRA SET
4505-02 DANSKIN BRA SET
4505-03 DANSKIN BRA SET
4600-01 DANSKIN COT/SPAN UNDERWIRE BRA
4600-02 DANSKIN COT/SPAN UNDERWIRE BRA
4600-03 DANSKIN COT/SPAN UNDERWIRE BRA
4600-04 DANSKIN COT/SPAN UNDERWIRE BRA
4600-05 DANSKIN COT/SPAN UNDERWIRE BRA
4601-01 DANSKIN COT/SPAN UNDERWIRE BRA
4601-02 DANSKIN COT/SPAN UNDERWIRE BRA
4601-03 DANSKIN COT/SPAN UNDERWIRE BRA
4601-04 DANSKIN COT/SPAN UNDERWIRE BRA
4601-05 DANSKIN COT/SPAN UNDERWIRE BRA
4602-01 DANSKIN COT/SPAN UNDERWIRE BRA
4602-02 DANSKIN COT/SPAN UNDERWIRE BRA
4602-03 DANSKIN COT/SPAN UNDERWIRE BRA
4603-01 DANSKIN COT/SPAN UNDERWIRE BRA
4603-02 DANSKIN COT/SPAN UNDERWIRE BRA
4603-03 DANSKIN COT/SPAN UNDERWIRE BRA
4710 DANSKIN COTTON MODIFIED BRIEF
4711 DANSKIN COTTON MODIFIED BRIEF
4792 DANSKIN HANGING UNDERWEAR
4793 DANSKIN HANGING UNDERWEAR
4796 DANSKIN HANGING UNDERWEAR
4808 DANSKIN COTTON PRINT BRIEF
4810 DANSKIN COTTON BRIEF
4810C DANSKIN COTTON BRIEF
4810S DANSKIN COTTON BRIEF
4811 DANSKIN COTTON BRIEF
4811 DANSKIN COTTON VEST
4814 DANSKIN COTTON BRIEF
4815 DANSKIN BRA
4816B DANSKIN PANTY
4816W DANSKIN PANTY
4817 DANSKIN COTTON PRINT BIKINI
4818G DANSKIN RIB CROP TOP
4818P DANSKIN RIB CROP TOP
4818W DANSKIN RIB CROP TOP
4819G DANSKIN RIB TANK TOP
4819W DANSKIN RIB TANK TOP
4821G DANSKIN RIBBED BRIEF
4821P DANSKIN RIBBED BRIEF
4821W DANSKIN RIBBED BRIEF
================================================
Page 1
STYLES
================================================
4822G DANSKIN BOY LEG BOXER
4822W DANSKIN BOY LEG BOXER
4829 DANSKIN PRINTED COTTON BRIEF
4829F DANSKIN PRINTED COTTON BRIEF
4830 DANSKIN COTTON BRIEF
4830F DANSKIN COTTON BRIEF
4830M DANSKIN BRIEF
4831 DANSKIN COTTON BIKINI
4831 DANSKIN COTTON PRINT BIKINI
4831M DANSKIN BIKINI
4832 DANSKIN COTTON PRINT BRIEF
4832F DANSKIN COTTON PRINT BRIEF
4833 DANSKIN UNDERSHIRT
4834 DANSKIN COTTON SLEEVELESS VEST
4835 DANSKIN NYLON BRIEF
4836 DANSKIN SOLID BRIEF
4837 DANSKIN COTTON BRIEF
4837F DANSKIN COTTON BRIEF
4840 DANSKIN COTTON BRIEF
4840F DANSKIN COTTON BRIEF
5119-01 DANSKIN COT/SPAND HI-CUT BRIEF
5119-02 DANSKIN COT/SPAND HI-CUT BRIEF
5119-03 DANSKIN COT/SPAND HI-CUT BRIEF
5119-04 DANSKIN COT/SPAND HI-CUT BRIEF
5119-05 DANSKIN COT/SPAND HI-CUT BRIEF
5120-01 DANSKIN COT/SPAND HI-CUT BRIEF
5120-02 DANSKIN COT/SPAND HI-CUT BRIEF
5120-03 DANSKIN COT/SPAN HI-CUT BRIEF
5120-04 DANSKIN COT/SPAN HI-CUT BRIEF
6044-01 DANSKIN COTTON/LYCRA BRIEF
6044-02 DANSKIN COTTON/LYCRA BRIEF
6044-03 DANSKIN COTTON/LYCRA BRIEF
6044-04 DANSKIN COTTON/LYCRA BRIEF
6044-05 DANSKIN COTTON/LYCRA BRIEF
6044-06 DANSKIN COTTON/LYCRA BRIEF
6044-07 DANSKIN COTTON/LYCRA BRIEF
6045-01 DANSKIN HI-CUT BRIEF
6045-02 DANSKIN HI-CUT BRIEF
6045-03 DANSKIN HI-CUT BRIEF
6045-04 DANSKIN HI-CUT BRIEF
6045-05 DANSKIN HI-CUT BRIEF
6045-06 DANSKIN HI-CUT BRIEF
6045-07 DANSKIN HI-CUT BRIEF
9400 DANSKIN 6 PK STRETCH BRIEFS
9400IR DANSKIN HI-CUTS AND BRIEFS
9402 DANSKIN SPORTS BRA
9402F DANSKIN SPORTS BRA
9406 DANSKIN COMBED COTTON BRIEF
9406C DANSKIN COMBED COTTON BRIEF
9406F DANSKIN COMBED COTTON BRIEF
9406IRR DANSKIN IRREG LADIES STYLES
9409 DANSKIN STRETCH BRIEF
9410 DANSKIN BRIEF
9411 DANSKIN HI-CUT BRIEF
================================================
Page 2
STYLES
================================================
9414 DANSKIN BIKINI - BUBBLE PACK
9414 DANSKIN BIKINI BUBBLE PACK
9415 DANSKIN BIKINI - BUBBLE PACK
9416 DANSKIN BIKINI - BUBBLE PACK
9416 DANSKIN BIKINI BUBBLE PACK
9417 DANSKIN BIKINI - BUBBLE PACK
9417 DANSKIN BIKINI BUBBLE PACK
9418 DANSKIN BIKINI BUBBLE PACK
9419 DANSKIN HI-CUTBRIEF BUBBLEPACK
9420 DANSKIN HI-CUTBRIEF BUBBLEPACK
9421 DANSKIN HI-CUTBRIEF BUBBLEPACK
9423 DANSKIN BRA
9423 DANSKIN BRA
9423 DANSKIN SCALLOP LACE BRA
9424 DANSKIN BRA
9424R DANSKIN CIRCULAR KNIT BRA
9424R XXXXXXX XXXX PATTERN BRA
9426B DANSKIN COTTON TACTEL BRIEF
9426B DANSKIN COTTON/TACTEL BRIEF
9426P DANSKIN COTTON/TACTEL BRIEF
9426W DANSKIN COTTON/TACTEL BRIEF
9427AX DANSKIN X-SZ BRIEF
9427B DANSKIN BRIEF
9427B DANSKIN SOLID BRIEF
9427P DANSKIN COTTON BRIEF
9427PX DANSKIN SOLID BRIEF
9427W DANSKIN COTTON BRIEF
9427WMX DANSKIN SOLID BRIEF
9427WX DANSKIN COTTON BRIEF
9428 DANSKIN COTTON BRA
9429 DANSKIN COTTON HI-CUT BRIEF
9436C DANSKIN 6 PK LADIES BRIEF
9436F DANSKIN BRIEF
9436IRR DANSKIN VARIOUS STYLES
9443 DANSKIN BIKINI - BUBBLE PACK
9443 DANSKIN BIKINI BUBBLE PACK
9448 DANSKIN BUBBLE PACK PRT BIKINI
0000 XXXXXXX XXXXX XXXXX LACE BRIEF
9454 DANSKIN STRETCH HI-CUT BRIEF
9455 DANSKIN LACE BRIEF
9456 DANSKIN HI-CUT BRIEF
9456R DANSKIN HI-CUT BRIEF
9457 DANSKIN BRIEF
9457R DANSKIN BRIEF
9457RX DANSKIN KNIT BRIEF
9458 DANSKIN LACE ILLUSIONS THONG
9458R DANSKIN KNIT THONG
9459 DANSKIN LACE ILLUSIONS THONG
9460B DANSKIN DIP FRONT SOLID BIKINI
9460BS DANSKIN DIP FRONT BIKINI
9460C DANSKIN DIP FRONT SOLID BIKINI
9460E DANSKIN SOLID DIP FRONT BIKINI
9460J DANSKIN SOLID DIP FRONT BIKINI
9460MB DANSKIN SOLID DIP FRONT BIKINI
================================================
Page 3
STYLES
================================================
9460MC DANSKIN SOLID DIP FRONT BIKINI
9460MW DANSKIN SOLID DIP FRONT BIKINI
9460R DANSKIN SOLID DIP FRONT BIKINI
9460W DANSKIN DIP FRONT SOLID BIKINI
9461 DANSKIN DIP FRONT BIKINI
9461F DANSKIN PRT DIP FRONT BIKINI
9461I DANSKIN PRT DIP FRONT BIKINI
9461MA DANSKIN PRT DIP FRONT BIKINI
9461N DANSKIN PRT DIP FRONT BIKINI
9461P DANSKIN PRT DIP FRONT BIKINI
9461S DANSKIN PRT DIP FRONT BIKINI
9464A DANSKIN SOLID HI-CUT BRIEF
9464C DANSKIN SOLID HI-CUT BRIEF
9464F DANSKIN PRINTED HI-CUT BRIEF
9464H DANSKIN PRINTED HI-CUT BRIEF
9464N DANSKIN PRINTED HI-CUT BRIEF
9464P DANSKIN HI-CUT BRIEF
9464S DANSKIN SOLID HI-CUT BRIEF
9464Y DANSKIN PRINTED HI-CUT BRIEF
9464Z DANSKIN PRINTED HI-CUT BRIEF
9468 DANSKIN "LACE ILLUSION" BRIEF
9468F DANSKIN "LACE ILLUSION" BRIEF
9470 DANSKIN SPORTS BRA
9470B DANSKIN BONUS PACK SPORTS BRA
9470B DANSKIN SPORTS BRA
9470F DANSKIN SPORTS BRA
9471 DANSKIN COT/LYCRA HI-CUT PANTY
9473 DANSKIN BUBBLE PACK PRT BIKINI
9474B DANSKIN COTTON BRIEF
9474BX DANSKIN COTTON BRIEF
9474C DANSKIN FRENCH CUT BRIEF
9474D DANSKIN COTTON BRIEF
9474DX DANSKIN COTTON BRIEF
9474P DANSKIN COTTON BRIEF
9474PX DANSKIN COTTON BRIEF
9474T DANSKIN COTTON BRIEF
9474TX DANSKIN COTTON BRIEF
9474W XXXXXXX XXXXXX XXXXX
0000X XXXXXXX XXXXXX XXXXX
0000XX DANSKIN COTTON BRIEF
9474Z DANSKIN COTTON BRIEF
9474ZX XXXXXXX XXXXXX XXXXX
0000X XXXXXXX XXXXXX XXXXX
0000XX XXXXXXX XXXXXX XXXXX
0000X XXXXXXX XXXXXX XXXXX
0000XX DANSKIN COTTON BRIEF
9475P DANSKIN COTTON BRIEF
9475PX DANSKIN COTTON BRIEF
9475T DANSKIN COTTON BRIEF
9475TX XXXXXXX XXXXXX XXXXX
0000X XXXXXXX XXXXXX XXXXX
0000XX DANSKIN COTTON BRIEF
9476 DANSKIN BUBBLE PACK PRT BIKINI
9477 DANSKIN HI-CUT BRIEF
================================================
Page 4
STYLES
================================================
9478 DANSKIN HI-CUT BRIEF
9479 DANSKIN HI-CUT BRIEF
9483 DANSKIN HI-CUT BRIEF
9483MB DANSKIN BRA
9483MW DANSKIN BRA
9484MA DANSKIN UNDERWIRE BRA
9484MA2 DANSKIN UNDERWIRE BRA
9484MW DANSKIN UNDERWIRE BRA
9485 DANSKIN HI-CUT BRIEF
9489 DANSKIN SPORTS BRA
9489F DANSKIN SPORTS BRA FLAT PACKED
9494 DANSKIN SOLID BASIC BRIEF
9495 DANSKIN SOLID HI-CUT BRIEF
================================================
Page 5
EXHIBIT 2(B)
Provisions of Agreement between Licensor and Xxx River, Inc., as amended
------------------------------------------------------------------------
As a result of the Agreement between Licensor and Xxx River Inc., as amended,
use of the Licensed Xxxx must be associated with the distinctive "dancing
figure" logo on all labelling, hang tags, packaging and other point-of sale
materials, as well as in all advertising, as follows:
(a) the "dancing figure shall be prominently displayed in close association
with the word "DANSKIN", but no further distant from any part of the word
"DANSKIN" than the width of one letter of said word.
(b) the "dancing figure design shall have a height and width no smaller than
the height and width of the largest letter of the word "DANSKIN" with which
it is combined; and
(c) in advertisements not accompanying products or television commercials
controlled by Licensee, the "dancing figure" shall appear at least once as
prominently as described in paragraphs (a) and (b) above with the most
prominent display of the word "DANSKIN", but need not be repeated every
time the word "DANSKIN" appears in the same advertisement or television
commercial, nor need it be displayed constantly during the entire
television commercial; and
(d) provided that the "dancing figure" is displayed in association with the
most prominent displays of the word DANSKIN in the manner aforesaid at the
point of retail sale of articles of DANSKIN-branded wearing apparel and
accessories, any very small labels thereon, accompanying these products at
the point of retail sale, wherein the display of the design figure may be
illegible or difficult to see, are exempted from the requirements described
in paragraphs (a) and (b) above; and
(e) individual packages and advertising may delete the "dancing figure"
providing (i) the overall layout of such packaging or advertising is
similar to the format of other DANSKIN material which utilizes the "dancing
figure" in association with DANSKIN; (ii) such packaging is intended to be
presented to the public in combination with DANSKIN displays or other
point-of-sale materials which utilize the "dancing figure" in combination
with DANSKIN; (iii) the word DANSKIN is not to be separated into two
syllables; and (iv) the first syllable of DANSKIN is not emphasized.
26
EXHIBIT 4(F)
LETTERHEAD OF MANUFACTURER
--------------------------
Wundies Industries, Inc.
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: [Date]
Gentlemen:
It is our understanding that as Licensee under a License Agreement
("License Agreement") dated as of January 1, 1997 with Danskin, Inc.
("Licensor") you propose to place an order with our company for the
manufacture of goods contemplated by the License Agreement. Terms used
herein, unless the context otherwise required, are used as defined in the
License Agreement.
In consideration of this order, we acknowledge that the Licensed Xxxx to be
affixed to goods is the sole property of Licensor, and that our company's
manufacture of such products and affixation of the Licensed Xxxx to such
products gives us no right of ownership and no right to use said marks on
any other products. We agree not to use any trademark, service xxxx,
tradename, model, designations or other word, device or design of Licensor,
other than the Licensed Xxxx, and agree not to sell any products bearing
the Licensed Xxxx or any designation which is similar thereto or likely to
be confused therewith as a trademark or service xxxx.
We agree that Licensor may at any time without prior notice, terminate our
authorization to manufacture goods for you. We agree upon such termination
to immediately cease use of all marks, manufacturing and merchandising
know-how and confidential data communicated to us with respect to the
Licensed Merchandise.
We agree to preserve the secrecy of all confidential manufacturing and
merchandising know-how in the manufacture of any other products. We agree
not to use such know-how in the manufacture of any products sold to any
party who is not a Licensee of Licensor.
We agree to cooperate in quality control and will promptly provide a
reasonable number of samples of goods from said order to you and Licensor
upon request. We will permit representatives of both Licensor and Licensee
to inspect the goods and manufacture of the goods on our premises at any
time during normal business hours. No goods, products or labels bearing the
Licensed Xxxx will be conveyed to any other party.
At the termination of the License Agreement or said order, however
occurring, or termination of Licensor's approval as provided for in the
License Agreement, we shall immediately discontinue manufacturing any
products whatsoever which are manufactured with said know-how or bear the
27
Licensed Xxxx, and will offer to sell any labels, packaging or other items
bearing the Licensed Xxxx, to Licensor and Licensee at our cost, and
undertake to make no claim against Licensor for any reason whatsoever.
Sincerely,
(Manufacturer)
By
---------------------------------------------
Agreed to as above
WUNDIES INDUSTRIES, INC.
By Date
------------------------------------ -----------------
APPROVED:
For Licensor Date:
-------------------------- -----------------
28
EXHIBIT 4(K)
LIST OF AUTHORIZED CUSTOMERS
----------------------------
=======================================================
Customer Number Customer Name
--------------- -------------
1420 ARMY & A/F EXCH SERVICE
MANY ELK
* 4855 BJ WHOLESALE
1940 BOSCOVS
2300 XXXXXX XXXX XXXXX & CO
2420 US COAST GUARD
2640 DANSKIN INC
3190 FEDCO, INC
MANY FEDERATED
3865 GOODY'S
* 4350 HOME SHOPPING CLUB
4375 PRICELESS KIDS
4954 KIDS R US
5090 KOHLS
5095 XXXXX TRADING INC
5530 M.D.S. EXPORT INC
5700 USMC
5730 MARSHALLS
MANY MAY CO.
MANY MERCANTILE
6060 MERVYN'S
* 6300 XXXXXXXXXX XXXX
6429 XXXXXX INDUSTRIES
6451 NAVY EXCHANGE
6551 XXXXXX BUYING CORP
6795 XXXXXX, X.X., CO
* 6955 PRICECOSTCO
MANY PROFITTS
7150 XXXXXXX XXXXXX
7250 XXXX STORES, INC
* 7440 XXXX CLUB
** 7560 SEARS
7520 VALUE CITY D.S. INC
7695 XXXXXXXXXX, J., INC
7950 SPECIALTY RETAILERS, INC
8056 SPORTS AUTHORITY
8200 SYMS
8462 TRI NORTH DEPT STORES
8540 UHLMANS
8561 UPTONS
=======================================================
* The Licensed Merchandise shall be sold by licensee subject to the prior
approval of Licensor of such merchandise.
** Only sales of children's Merchandise are permitted.
29
