EXHIBIT 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT, is made and entered into as of the 12th day of
November, 1997, by and between CHEROKEE, INC., 0000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 ("LICENSOR"), and XXXXXX XXXXXX CORPORATION, 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("Licensee"), collectively referred to as
the "Parties".
WHEREAS, Licensor is the owner of the "Cherokee" trademark, various other
marks incorporating the name Cherokee and certain common law rights in and to
the name Cherokee, with various stylized designs (collectively, the
"Trademark"), copies of which are attached as Exhibit A hereto, and the goodwill
associated with the Trademark; and
WHEREAS, LICENSOR and Licensee desire to enter into this License Agreement
with respect to the sale, manufacture and importation of certain merchandise,
all upon the terms and conditions herein set forth;
NOW, THEREFORE, the Parties hereto agree as follows:
1. GRANT OF LICENSE.
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a. Upon the terms and conditions contained in this Agreement, Licensor
hereby grants to Licensee, and Licensee hereby accepts, the exclusive
(as defined hereinbelow) right and license to use the Trademark, during
the term provided in Section 2 below, solely in connection with the sale
of the merchandise bearing the Trademark, in the categories indicated
below (the "Merchandise"),solely by DHC Retail Operations (as
hereinafter defined), located in the United States of America (the
"Retail Operations"), and to manufacture such Merchandise (and have such
Merchandise manufactured) solely for sale by the Retail Operations. Such
rights shall include the right to advertise the Trademark in connection
with the Merchandise. Such license shall not include the right to grant
sublicenses to third parties. The foregoing license is limited to use of
the Trademark in connection with the sale of Merchandise by the Retail
Operations and does not include the right to use the Trademark in
connection with the manufacture, distribution or sale of any products
except for Merchandise sold by the Retail Operations. As used herein,
the Retail Operations shall mean Dayton's, Hudson's, Xxxxxxxx Xxxxx'x,
Mervyn's, Target Stores, Target Greatland, SuperTarget, and any other
store opened by Licensee, within the United States, during the Term of
this Agreement, and/or any other merchandising activities undertaken by
Licensee, within the United States, during the Term of this Agreement,
including but not limited to direct mail, interactive on line or kiosk
selling. If Licensee desires to open a Retail Operation outside the
United States, and Licensor owns the Trademark in such other country,
and if Licensor has no
license in such other country, this Agreement shall then apply to
Licensee in such other country.
b. The following categories of Merchandise, shall be exclusive to
Licensee, in the United States, in all classes of trade:
(i) Men's, Women's and Children's Apparel (including, but not limited
to intimate apparel, foundations and sleepwear, but excluding
industrial and school uniforms)*.
(ii) Men's, Women's and Children's Footwear (excluding nurses and lab
technicians' shoes).
(iii) Men's, Women's and Children's Accessories, including, but not
limited to, luggage*, jewelry, handbags*, small leather goods,
belts, neckwear, hairgoods, hats, rainwear, gloves, hosiery,
slippers, sunglasses/eyewear* and watches*.
(iv) Bed and Bath Products and Accessories.
(v) Luggage*, Sportsbags* and Backpacks*.
(vi) Home Textiles.
(vii) Domestics and Home Decor.
(viii) Home Furnishings.
(ix) Sporting Goods.
(x) Cosmetics, Bath and Body Products.
*The categories that are asterisked are the subject of unexpired wholesale
license agreements between Licensor and unaffiliated third parties. The
categories that are the subject of such agreements will become part of
Licensee's exclusive categories, upon expiration/termination of such agreements,
as set forth in Section 7b hereinbelow; provided, however, the Parties agree
that the wholesale license agreements applicable to apparel and luggage shall be
terminated by Licensor upon execution of this Agreement by both Parties.
Licensee may propose additional classes of merchandise for inclusion in
this Agreement. Should Licensor, in its sole discretion, determine to include
such additional classes of merchandise, this Agreement shall be amended to
include such additional classes of merchandise within the definition of
Merchandise. Licensor shall be responsible for all costs and attorney's fees
incurred by Licensor
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in obtaining trademark registration under the laws of the United States for such
additional classes of merchandise, if necessary and available.
2. Term.
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a. Initial Term. The initial term of this Agreement shall commence on
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February 1, 1998 and shall end January 31, 2004. As used hereinafter,
the term fiscal year shall mean the 12 month period ending at midnight
on the Saturday closest to January 31 (hereinafter "Fiscal Year").
b. Extended Terms. Provided that Licensee is current in its payments of
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the Minimum Guaranteed Royalty (as hereinafter defined) for the Fiscal
Year ending in 2004, this Agreement will automatically renew for the
Fiscal Year ending in 2005, and will continue to automatically renew
for successive one (1) Fiscal Year terms, provided that Licensee has
paid a Minimum Guaranteed Royalty equal to or greater than $9,000,000
for the preceding Fiscal Year. (The Initial Term and the Extended
Terms, if any, are hereinafter referred to as the "Term").
c. Termination. Notwithstanding Section 2b above, (i) Licensee may
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terminate this Agreement effective January 31, 2004, if it gives
Licensor written notice of its intent to do so during February 2003,
and (ii) Licensee may terminate this Agreement at the end of any
Fiscal Year thereafter, if it gives Licensor written notice of its
intent to do so during February of the calendar year prior to
termination.
3. Payments.
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a. Royalty. Each Fiscal Year during the term of this Agreement, Licensee
shall pay to Licensor as a royalty (the "Royalty") an amount equal to
the greater of (i) the minimum guaranteed royalty applicable to such
Fiscal Year, as set forth in Section 3c below ("Minimum Guaranteed
Royalty"), or (ii) two percent (2%) of Licensee's Net Sales (as
defined in Section 3b below) of Merchandise during such Fiscal Year,
on sales up to $300,000,000, one and one-half percent (1 1/2%) of
Licensee's Net Sales of Merchandise during such Fiscal Year on sales
greater than $300,000,000 and up to $700,000,000, eight-tenths of one
percent (.8%) of Licensee's Net Sales of Merchandise during such
Fiscal Year on sales greater than $700,000,000 and up to
$1,000,000,000, and seven-tenths of one percent (.7%) of Licensee's
Net Sales of Merchandise during such Fiscal Year on sales greater than
$1,000,000,000.
b. Net Sales. The term "Net Sales" as used herein shall mean the gross
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sales price to customers of all sales of Merchandise (whether regular,
markdown, clearance or otherwise), excluding sales tax and finance
charges and less returns of Merchandise. No other deductions shall be
taken.
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c. Minimum Guaranteed Royalties. The Minimum Guaranteed Royalties shall
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be as set forth below:
MINIMUM
FISCAL YEAR GUARANTEED ROYALTY
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2/01/98 - 1/30/99 $ 9,000,000
1/31/99 - 1/29/00 $ 9,000,000
1/30/00 - 2/03/01 $10,500,000
2/04/01 - 2/02/02 $10,500,000
2/03/02 - 2/01/03 $10,500,000
2/02/03 - 1/31/04 $10,500,000
4. MANNER OF PAYMENT.
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a. Quarterly Payment. Not later than the tenth (10th) day after the end
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of each and every fiscal quarter, beginning with the first fiscal
quarter of 1998, Licensee shall pay and deliver to Licensor an amount
equal to the greater of (i) twenty five percent (25%) of the Minimum
Guaranteed Royalty applicable to the then current Fiscal Year, or (ii)
the applicable Royalty percentage (2%, 11/2%, .8% or .7% or
combinations thereof as the case may be, on a cumulative basis, as set
forth in Section 3a above) multiplied by its Net Sales in the
immediately previous fiscal quarter (the applicable royalty).
b. Prompt Delivery. Licensee acknowledges and agrees that the timely
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delivery of the payments required by Section 4a and the Quarterly
Reports and Sales Reports required by Section 5 hereof are essential
to this Agreement. Interest shall accrue on all past due payments
hereunder from their respective due dates until paid at the rate of
one percent (1%) per month, or if such rate exceeds the maximum rate
allowed by law, at the maximum rate allowed by law, and shall be
payable on demand.
5. REPORTS, RECORD KEEPING AND AUDITS.
a. Maintenance of Records. Licensee shall keep books of account and
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records in accordance with generally accepted accounting principles,
consistently applied, covering all sales relating to this Agreement
and the license hereby granted. Such records shall be maintained for
at least two (2) years after the quarter to which such records relate.
b. Quarterly Reports. Every Royalty payment pursuant to Section 4a shall
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be accompanied by a written report (individually, the "Quarterly
Report" and collectively, the "Quarterly Reports") as to:
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(i) The quantity, description and sales price of all Merchandise
sold by Licensee during the quarter to which such Royalty
relates;
(ii) The aggregate gross sales of all Merchandise and the Net Sales
of Merchandise, year to date, and the Net Sales of Merchandise
for such quarter;
(iii) Any other related information that may be reasonably requested
by Licensor.
c. Sales Reports. In addition, Licensee shall provide Licensor with
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weekly sales recap reports and seasonal sales projections as developed
and revised (collectively, the "Sales Reports"); provided, however,
that all such Sales Reports shall be in the form and format used by
Licensee in the ordinary course of business.
d. Audit. Licensor and its duly authorized representatives shall have the
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right upon reasonable notice and at all reasonable hours during normal
business days to examine and copy such books of account and records
and all other documents and materials in the possession or under the
control of Licensee with respect to the subject matter and the terms
of this Agreement, the cost of which shall be borne by Licensor.
Licensor shall not conduct an audit more than once with respect to any
Fiscal Year, and in no event shall such audit be during Licensee 5
fourth fiscal quarter. If the audit discloses that the Royalty
payments actually due exceed the Royalty payments paid, Licensee shall
pay the unpaid Royalty and interest on such unpaid Royalty payments
computed from the date such Royalty payments were due, accrued at the
rate of one percent (1%) per month, or if such rate exceeds the
maximum rate allowed by law, at such maximum legal rate. If the audit
discloses that the Royalty payments made by Licensee exceed the
Royalty payments due, Licensor shall reimburse Licensee in the amount
the overpaid Royalty and interest on such overpayment, computed from
the date such Royalty payments were made, accrued at the rate of one
percent (1%) per month. In addition, if the audit discloses that the
Royalty payments actually due exceed the Royalty payments paid by an
amount greater than five percent (5%) of the Royalty payments paid,
the cost of the audit performed by Licensor shall be paid by Licensee.
e. Financial Statements. If, at any time during the Initial Term,
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Licensee is no longer a company required to provide public financial
information pursuant to the Securities and Exchange Commission
reporting requirements, Licensee shall, upon reasonable request of
Licensor, and from time to time thereafter, provide Licensor with
interim and audited annual financial statements.
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6. STANDARDS OF OUAIITV
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a. Standards and Prestige of Merchandise. Licensee acknowledges that the
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Trademark has established prestige and goodwill and is well recognized
in the minds of the public, and that it is of great importance to each
party that in the manufacture and sale of the Merchandise the high
standards and reputation that Licensor has established be maintained.
Accordingly, all items of Merchandise manufactured or caused to be
manufactured by Licensee hereunder and any other expression by
Licensee, which by its nature conveys to others the existence of a
relationship between the Licensee and the Trademark, including,
without limitation, all packaging, labeling, fixturing, advertising,
point-of-sale materials and product literature (any such expression as
herein referred to as "Trademark Use Materials") shall (i) in the case
of apparel Merchandise, be of a quality at least as high as the
"middle" line of similar products being sold by Licensee at the time
of execution of this Agreement (i.e. Licensee's HONORS(R) brand
products), and (ii) in the case of non-apparel Merchandise, be of a
quality at least as high as the standard set forth in Licensee's
quality control standards and procedures for such non-apparel
Merchandise. From time to time during the Term of this Agreement, and
as Licensor reasonably requests, so as not to disrupt the ongoing
business processes of Licensee, Licensee shall supply Licensor or a
designee of Licensor with a reasonable assortment of samples of
Merchandise (including samples of labeling and packaging used in
connection therewith). Further, at all times during the Term hereof,
and upon Licensor's prior request, Licensee shall make its
manufacturing facilities available to Licensor at mutually
satisfactory times, and shall use its reasonable efforts to make
available each contractor's manufacturing facilities for inspection by
Licensor's representatives during usual working hours. In addition,
Licensee shall supply Licensor or a designee of Li censor with samples
of its logo designs and formats for use of the Trademark in connection
with labels and packaging materials. Upon receipt of such designs and
formats, Licensor shall have ten (10) business days in which to review
and approve those materials, which approval shall not be unreasonably
withheld. Thereafter, all uses of the Trademarks by Licensee in
connection with labels and packaging materials shall conform in all
materials respects with the approved designs and formats and Licensee
shall have no obligation to provide samples of such materials for
review or approval by Licensor, as long as the approved designs and
formats remain unchanged. If Licensor shall not have indicated
approval of any such materials within seven (7) business days,
Licensee shall contact Licensor regarding such approval, and Licensor
shall have three (3) additional days in which to review and approve
the materials. If Licensor shall not have indicated approval of any
such materials in the said three (3) additional days, then the
Materials shall be deemed to have been approved. Licensee shall sell
or otherwise dispose of miscuts or damaged Merchandise only after
Licensee has cut out the labels or any other item that identifies the
Merchandise with the Trademark.
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b. Standards and Procedures. Concurrently with execution of this
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Agreement, and not more than once each Fiscal Year thereafter, upon
the request of Licensor, Licensee shall provide Licensor with a
written copy of Licensee's quality control standards and procedures,
and Licensor shall, upon the request of Licensee, provide Licensee
with a written copy of Licensor's Quality Control Standards which
apply to Licensor's other licensees. At Licensee's request, Licensor
and Licensee will meet annually before Licensor's Quality Control
Standards are established for such year and Licensee shall have the
right to approve such standards and procedures, including, without
limitation, the quality standards to be applied to retail drug store
license agreements for cosmetics, if any, before they are implemented;
provided, however, that such Quality Control Standards shall be
consistent with the quality standard set forth in Section 6a
hereinabove.
7. PROTECTION OF TRADEMARK
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a. Acknowledgments and Agreements of Licensee. As a material inducement
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to Licensor to enter into this Agreement, and as a material part of
the consideration to Licensor hereunder, Licensee hereby acknowledges
and agrees that:
(i) (a) Licensor owns the Trademark in various countries worldwide,
and all rights, registrations, applications and filings with
respect to such Trademark, and all renewals and extensions of
any such registrations, applications and filings, (b) Licensor
has the right to license the Trademark, and (c) Licensee is
acquiring hereby only the right to use the Trademark for the
purpose stated in and pursuant to the terms and conditions of
the Agreement.
(ii) (a) Great value is placed on the Trademark, and the goodwill
associated therewith, (b) the Trademark and all rights therein
and goodwill pertaining thereto belong exclusively to Licensor,
and (c) all authorized use of the Trademark by Licensee shall
inure to the benefit of Licensor.
(iii) The conditions, terms, restrictions, covenants and limitations
of this Agreement are necessary, equitable, reasonable and
essential to assure the consuming public that all goods sold
under the Trademark are of the same consistently high quality
as sold by Licensor and by others who are licensed to design,
manufacture and/or sell any products by, under or with the
Trademark, if any.
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b. Protection of Rights.
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(i) Restriction on Use. Licensee shall not use or permit the use of
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the Trademark for any purpose or use other than the uses
licensed under this Agreement.
(ii) General. Licensee shall cooperate fully and in good faith with
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Licensor for the purpose of securing and preserving Licensor's
(or any grantee of Licensor's) rights in and to the Trademark.
Licensee shall cause to appear on and in connection with the
Merchandise and the Trademark Use Materials the (R) or TM as
applicable.
(iii) Registration. Licensee shall, upon request, supply to Licensor
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enough specimens of advertisements, tags, labels and other use
of the Trademark as may be required in connection with any of
Licensor's Trademark applications or registrations. Licensee
shall execute any instrument Licensor shall reasonably deem
necessary or desirable to record or cancel Licensee as a
registered user of the Trademark, it being understood and
agreed that Licensee's right to use the Trademark in the event
that the filing of a registered user application is required or
is requested by Licensor shall commence only upon the filing of
such registered user application, and shall continue only so
long as this Agreement remains in effect.
(iv) Customer Complaints. Licensee shall, in connection with its
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duty to use the Trademark so as to promote the continuing
goodwill thereof, give immediate attention and take necessary
action to satisfy all legitimate customer complaints brought
against Licensee in connection with the Merchandise or the
Stores. Licensee shall give Licensor immediate written notice
of all complaints that in Licensee's opinion are likely to
result in litigation. Licensee shall cooperate with Licensor
upon request to achieve as good a reputation and press for the
Trademark as possible.
(v) Exclusivity. Licensor agrees that during the term of this
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Agreement it will not license the Trademark, and/or renew or
otherwise extend existing license agreements between Licensor
and any third party(ies), in the United States, in any
merchandise category whatsoever; excluding, however, the
following:
(a) Retail license agreements with Brylane, Caldor and/or
Pamida, which may be extended, on the terms in force as of the
date of signing of this Agreement, as long as such agreements
are not extended beyond January 31, 2002, without the prior
written consent of Licensee, which
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may be granted or withheld at Licensee's sole option. In the
event that Licensee does not consent to extension of the
agreements beyond January 31, 2002, the categories that are
subject of such agreements will become part of Licensee's
exclusive categories. In the event that Licensee consents to
extension of the agreements beyond January 31, 2002, Licensor
shall pay and deliver to Licensee, not later than the tenth
(10th) day after the end of each and every fiscal quarter,
beginning with the first fiscal quarter of 2002, fifty percent
(50%) of all royalties earned by Licensor from Brylane, Caldor
and/or Pamida in connection with such agreements.
(b) Retail license agreements with certain drug stores chains,
as set forth and defined in Exhibit B hereto (in the category
of cosmetics, bath and body products only).
(c) Wholesale license agreements with Bueno Handbags (in the
category of handbags, only), Golden State Watches (in the
category of watches only) and/or Outlook/Creative Optics (in
the category of sunglasses/eyeglasses only), which may be
extended, for the same categories of merchandise as long as (i)
such agreements are not extended beyond January 31, 2002,
without the prior written consent of Licensee, which may be
granted or withheld at Licensee's sole option, and (ii) any
extension specifically prohibits the sale of merchandise by
such wholesale licensees to any mass merchandising discount
store, wholesale club, midtier store and/or value discounter
(with the exception of Caldor and Pamida). The categories that
are the subject of such agreements will become part of
Licensee's exclusive categories if such agreements are not
extended.
8. DEFAULTS AND REMEDIES.
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a. Defaults by Licensee. The occurrence of any one or more of the
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following shall constitute a default by Licensee under this Agreement:
(i) Licensee shall fail to make any payment, submit any Quarterly
Report or provide any financial information required under this
Agreement when due, and such failure continues for more than
thirty (30) days after written notice thereof, unless such
failure cannot be cured within such thirty (30) day period and
Licensee shall have commenced to cure the failure and proceeds
diligently thereafter to cure such failure.
(ii) Licensee uses the Trademark in any manner likely to endanger the
validity of the Trademark or to damage or impair the reputation
or value of the Trademark, and such action continues for more
than thirty (30) days after written notice
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thereof, unless the action cannot be cured within such thirty
(30) day period and Licensee shall have commenced to cure the
action and proceeds diligently thereafter to cure such action.
(iii) The failure of Licensee to perform any of its other material
obligations under this Agreement and such failure continues for
more than thirty (30) days after written notice thereof, unless
the failure cannot be cured within such thirty (30) day period
and Licensee shall have commenced to cure the failure and
proceeds diligently thereafter to cure such failure.
b. Default by Licensor. If Licensor fails to perform any of its material
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obligations under this Agreement and such failure continues for more
than thirty (30) days after the written notice thereof, such failure
shall constitute a failure by Licensor under this Agreement, unless
the failure cannot be cured within such thirty (30) day-period and
Licensor shall have commenced to cure such failure and proceeds
diligently thereafter to cure such failure.
c. Remedies
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(i) If Licensee has not cured any such breach or non-performance in
accordance with Section 8a above, in addition to all other
rights and remedies available to Licensor, whether pursuant to
the terms of this Agreement at law in equity or otherwise,
Licensor shall have the right to terminate this Agreement
without further notice to Licensee and all unpaid Minimum
Guaranteed Royalty payments due and owing under this Agreement,
shall be immediately due and payable.
(ii) If Licensor has not cured any such breach or non-performance in
accordance with Section 8b above, in addition to all of the
other rights and remedies available to Licensee, whether
pursuant to the terms of this Agreement at law, in equity or
otherwise, Licensee shall have the right to terminate this
Agreement without further notice to Licensor.
d. Effect of Expiration or Termination. Except as specifically provided
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herein to the contrary, upon expiration or termination of this
Agreement, the rights and licenses granted herein shall terminate and
Licensee shall have no further right to use the Trademark in
connection with the Merchandise or the Trademark Use Materials. Upon
the request of Licensor, Licensee shall immediately execute without
further consideration such assignments and other instruments which may
be required to be recorded to effect the termination of the licenses
and rights granted herein (and the assignments of Licensee's rights to
Licensor). Within twenty (20) days of the expiration or termination of
this Agreement, Licensee
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shall deliver to Licensor all unpaid Royalties together with a final
Quarterly Report covering all sales of Merchandise from the end of the
period covered by the preceding Quarterly Report through the date of
expiration or termination of this Agreement,
e. Merchandise and Trademark Use Materials. Within one hundred and twenty
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(120) days of the expiration or termination of this Agreement,
Licensee shall, at its sole expense, (i) remove or obliterate the
Trademark from all Merchandise and Trademark Use Materials from which
the Trademark can be removed or obliterated, and (ii) either destroy
or deliver to Licensor all Merchandise and Trademark Use Materials
from which the Trademark cannot be removed or obliterated.
F. Assignments. Neither this Agreement nor any of the rights or duties
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hereunder nor the license granted hereby may be assigned, sub-
licensed, encumbered or otherwise transferred in any way by Licensee,
without the prior written consent and agreement of the Licensor. Any
purported assignment, sub-license, encumbrance or other transfer,
whether voluntary or involuntary by operation of law or otherwise,
shall be null and void and shall constitute a default hereunder by
Licensee. Notwithstanding the foregoing, Licensee hereby consents and
agrees (i) to the transfer or assignment of this Agreement (and
related Trademarks), including any and all rights or duties of
Licensor hereunder or thereunder, or in connection herewith, by
Licensor to a different entity, including a "bankruptcy remote"
special purpose entity ("SPE"), (ii) to the assignment and pledging of
rights (and related Trademarks) of the Licensor under this Agreement
to investors as collateral in a financing or securitization
transaction, (iii) to make payments under this Agreement to a
designated controlled account, and (iv) to furnish information and
take such other measures (at no material cost or disruption to
Licensee) which are reasonably requested by Licensor to facilitate the
proposed financing or securitization. In the event of a transfer or
assignment of this Agreement to a successor licensor hereunder,
Licensor shall no longer mean Cherokee Inc. but its successor
licensor; provided, however, that once a transfer or assignment is
made pursuant to the clauses (i) and (ii) above, any subsequent
assignment or transfer to successor licensor hereunder, including, but
not limited to, any sale or transfer of equity ownership in the SPE,
may only be made with the written approval of Licensee, which approval
shall not be unreasonably withheld.
g. Contracts. Licensee shall have the right to contract the manufacture
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of the Merchandise and the Trademark Use Materials bearing the
Trademark to third party manufacturers, so long as (i) each such
contractor shall sign and return a Manufacturer's Trademark Agreement,
in substantially the form attached hereto as Exhibit C, (ii) each such
contractor shall be subject to the inspection and quality control
procedures set forth herein, and (iii) the Merchandise and Trademark
Use Materials meet the quality standards set forth in this Agreement.
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9. WARRANTIES.
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a. Licensor warrants and represents that Licensor (i) is free to enter
into this Agreement, (ii) has the full power, right and authority to
make the grant of rights to Licensee as provided hereunder and that
the exercise by Licensee of such rights, as authorized hereunder,
shall not violate the rights of any third party, and (iii) is not
subject to any obligation which will or might hinder or prevent the
full completion and performance by Licensor of any of the covenants
and the conditions to be kept and performed by Licensor hereunder.
b. Licensee hereby represents and warrants that Licensee (i) is free to
enter into this Agreement, (ii) is not subject to any obligation which
will or might hinder or prevent the full completion and performance by
Licensee of any of the covenants and conditions to be kept and
performed by Licensee hereunder, and (iii) will ensure that all uses
of the Trademark and Trademark Use Materials comply with the terms of
this Agreement.
10. INDEMNIFICATION AND INSURANCE.
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a. Indemnification of Licensor. Licensee shall indemnify and hold
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Licensor and its affiliates, directors, officers, employees and agents
harmless from and against any and all liabilities, losses, claims,
suits, damages, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) arising out of or otherwise
relating to any claims of third parties against the Licensor involving
the design, manufacture, packaging, distribution, promotion, sale,
marketing, advertising or other use of the Trademark, the Merchandise
or the Trademark Use Materials, by Licensee and/or its contractors,
provided that (i) prompt written notice is given to Licensee, upon
Licensor becoming aware of any such actual or threatened claims or
suits, (ii) Licensee shall have the option to exclusively undertake
and conduct the defense and/or settlement of any such claims or suits,
(iii) Licensor acts, with the prior consent of Licensee, to mitigate
any damages, and (iv) no settlement or attempt at settlement of any
such claims or suits is made without the prior written consent of
Licensee. Licensee acknowledges that this indemnity does not include
those items for which Licensor is indemnifying Licensee in Section 10b
or 10c below.
b. Limitation on Indemnification of Licensor. The foregoing
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notwithstanding, it is hereby acknowledged that the Parties desire to
participate in establishing common law usage of the Cherokee name in
the cosmetics, bath and body category, but cannot anticipate what
issues, if any, may be raised in that regard. As such Licensor defend,
indemnify and hold Licensee and its affiliates, directors, officers,
employees, and agents harmless, from and against any and all
liabilities, losses, claims, suits, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) which may be sustained or suffered by or secured against
Licensee based upon or arising out of any
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actual or alleged trademark infringement, unfair competition or
infringement of similar proprietary rights, arising solely out of
establishing common law usage of the Cherokee name in connection with
such goods. The indemnification period will commence upon signing of
this Agreement and will extend six (6) months after the date goods are
first offered for sale in connection with the use of the Cherokee name
in the cosmetics, bath and body category. In the event that Licensor
obtains a federal trademark registration of the Cherokee name for the
cosmetics, bath and body category, the provisions of (S) 10c below
shall apply from the date of registration.
c. Indemnification of Licensee. Licensor shall defend, indemnify and hold
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Licensee and its affiliates, directors, officers, employees and agents
harmless from and against any and all liabilities, losses, claims,
suits, damages, costs and expenses (including, without limitation,
reasonable attorney's fees and expenses) which may be sustained or
suffered by or secured against Licensee based upon or arising out of
any actual or alleged trademark infringement, unfair competition or
infringement of similar proprietary rights, arising solely out of the
use by Licensee and/or its contractors of the Trademark as authorized
in this Agreement, provided that (i) prompt written notice is given to
Licensor, upon Licensee becoming aware of any such actual or
threatened claims or suits, (ii) Licensor shall have the option to
exclusively undertake and conduct the defense and/or settlement of any
such claims or suits, (iii) Licensee acts, with the prior consent of
Licensor, to mitigate any damages, and (iv) no settlement or attempt
at settlement of any such claims or suits is made without the prior
written consent of Licensor.
d. Insurance. Licensee shall obtain and maintain throughout the term of
---------
this Agreement, at its own expense, general liability insurance and
product liability insurance, with a responsible insurance carrier or
carriers acceptable to Licensor, providing adequate protection (at
least in the amount of $1,000,000 single limits for personal injury or
property damage) and naming Licensor as an additional insured. As soon
as possible after the execution of this Agreement, Licensee shall
deliver to Licensor a fully paid certificate or certificates of
insurance, naming Licensor as an additional insured, and providing
that such policy or policies are cancelable only after thirty (30)
days prior written notice to Licensor. No changes shall be made in
such policy or policies of insurance that affect Licensor without
written notice of such changes being given to Licensor.
11. CONFIDENTIALITY
---------------
Licensor acknowledges and agrees that any and all reports and financial
information disclosed by Licensee pursuant to this Agreement is
confidential information commercially valuable to Licensee (hereinafter the
"Licensee Information"). Licensor acknowledges that the Licensee
Information is disclosed to Licensor on a confidential basis to be used
only as may be expressly
13
permitted by the terms and conditions of this Agreement. Licensor, its
officers, directors, employees, and agents shall protect the Licensee
Information as the confidential information and property of Licensee.
Licensor shall not disclose any Licensee Information to any other person,
firm, organization, or employee who is not authorized, in writing, by
Licensee. Except as expressly permitted hereunder, the Licensee Information
may not be copied, reprinted, duplicated, or recreated in whole or in part
without the express written consent of Licensee. Licensor shall take
reasonable action by instruction, agreement or otherwise with respect to
Licensor's employees or other persons permitted to access the Licensee
Information to comply fully with Licensor's obligations hereto with respect
to the use, copying, protection, and security of the Licensee Information.
Licensor agrees to return the Licensee Information, and all copies thereof,
to Licensee, upon request. Licensee hereby consents to the disclosure of
the License Information to any of the Licensor's attorneys, accountants and
other third parties who have a business "need to know" in connection with
any financing or securitization.
12. GENERAL PROVISIONS.
------------------
a. Notices. All notices and other communications required or permitted to
-------
be given under this Agreement shall be in writing and shall be
delivered either by personal service, facsimile or by prepaid over-
night courier service and addressed as follows:
IF TO LICENSOR: WITH A COPY TO:
Cherokee Inc. Xxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxxxx 000 Xxxx 0xx Xxxxxx
Xxx Xxxx, XX 00000 Suite 4000
Attn: Chief Executive Officer Xxx Xxxxxxx, XX 00000
Fax: 818/000-0000 Attn: Xxxxxx Xxxxxx
Fax: 213/000-0000
IF TO LICENSEE: WITH COPIES TO:
Target Stores Target Stores
00 Xxxxx 0xx Xxxxxx 00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attn: Executive Vice President Attn: Assistant General
Merchandising Counsel, General Business
Fax: 612/000-0000 Fax: 612/000-0000
Attn: CFO, DHC
Fax: 612/000-0000
Attn: Senior VP
Merchandising, Softlines
Fax: 612/000-0000
14
If delivered personally, such notices or other communications shall be
deemed delivered upon delivery. If sent by fax, such notice or other
communications shall be deemed delivered when received, provided that
the sender has confirmation of receipt. If sent by prepaid over-night
courier service, such notices or other communications shall be deemed
delivered upon delivery or refusal to accept delivery as indicated on
the return receipt. Either party may change its address at any time by
written notice to the other party as set forth above.
b. Entire Agreement. This Agreement sets forth the entire agreement
----------------
between the Parties with respect to the subject matter hereof, and all
prior negotiations, discussions, commitments and/or understandings
relating thereto, if any, are merged herein. Effective February 1,
1998, this Agreement shall supersede any and all other agreements and
amendments between the Parties, bearing a date of November 11, 1997 or
earlier, including, without limitation, that certain exclusive License
Agreement between Licensor and Licensee dated August 15, 1995 as
amended, and that certain non-exclusive License Agreement between
Licensor and Licensee dated November 1, 1995 (and accompanying cover
sheet), as amended, and may be modified only by a written agreement
signed by duly authorized of each of the Parties. No representations,
oral or otherwise expressed or implied, other than those specifically
contained in this Agreement have been made by any party hereto. No
other agreements not referred to or specifically contained herein,
oral or otherwise, shall be deemed to exist or to bind any of the
Parties hereto.
c. Successors and Assigns. This Agreement shall be binding upon and shall
----------------------
inure to the benefit of the successors and permitted assigns of the
Parties.
d. Choice of Law. The validity, construction and enforcement of this
-------------
Agreement shall be governed by the laws of the State of California
without regard to its choice of law principles.
e. Dispute Resolution. Any claim or controversy arising out of or
------------------
relating to this Agreement, or any breach thereof wherein only damages
are sought, shall be settled by the appointment of a retired judge of
the Superior or Appellate Courts of California who shall act pursuant
to Section 638.1 of the California Code of Civil Procedure "to try any
and all of the issues in an action or proceeding, whether of fact or
of law, and to report a state of decision thereon". The Parties
stipulate to the use of the referenced procedure and agree that the
Superior Court of Los Angeles County of the State of California may
issue such orders as are necessary to implement the Parties intent
that any such claim or controversy shall be resolved through the use
of the referenced procedure. The decision reached by the referee shall
be entered as a judgment of the Superior Court appointing the referee
and such decisions shall be fully appealable. All fees and expenses of
the
15
referee shall be initially borne on a pro rata basis by the Parties,
but shall be recoverable by the prevailing party. Additionally, the
prevailing party shall be entitled to recover, as an element of such
party's cost of suit, and not as damages, all reasonable costs and
expenses incurred or sustained by such prevailing party in connection
with such actions including without limitation, legal fees and costs.
f. No Waiver. No waiver by either party, whether express or implied, of
---------
any provision of this Agreement or of any breach or default of any
party, shall constitute a continuing waiver of such provision or any
other provisions of this Agreement, and no such waiver by any party
shall prevent such party from acting upon the same or any subsequent
breach or default of the other party of the same or any other
provision of this Agreement.
g. Disclaimer of Agency. Nothing in this Agreement shall create a
--------------------
partnership or joint venture or establish the relationship of
principal and agent or any other relationship of a similar nature
between the parties hereto, and neither Licensee nor Licensor shall
have the power to obligate or bind the other in any manner whatsoever.
h. Construction. This Agreement shall be interpreted to provide Licensor
------------
with the maximum control of the Trademark and the use thereof.
i. Licensor Approvals. Any approval required from Licensor under this
------------------
Agreement shall be effective and binding against Licensor only if it
is in writing. Any approval required hereunder must be obtained by
Licensee prior to Licensee taking any action which requires such
approval.
j. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
k. Authority. Each individual signing on behalf of a party hereto
---------
represents and warrants that he or she is authorized to execute this
Agreement on behalf of such party.
l. Termination on Insolvency of Licensee. Licensor may terminate this
-------------------------------------
Agreement if a petition for relief under applicable bankruptcy law is
filed by or against Licensee, and is not dismissed within sixty (60)
days of such filing, if Licensee makes any assignment for the benefit
of its creditors, or if a receiver is appointed for Licensee for all
or substantially are of its business interests.
The license and rights granted hereunder are personal to Licensee. No
assignee for the benefit of creditors, receiver, debtor in possession,
trustee in bankruptcy, sheriff or any other officer of court charged
with taking over custody of Licensee's assets or
16
business shall have any right to continue performance to exploit or in
any way use the Trademark if this Agreement is terminated, except as
may be required by law.
m. Termination on Insolvency of Licensor. Licensee may terminate this
-------------------------------------
Agreement, if a petition for relief under applicable bankruptcy law is
filed by or against Licensor, and is not dismissed within sixty (60)
days of such filing, if Licensor makes any assignment for the benefit
of its creditors, or if a receiver is appointed for Licensor for all
or substantially all of its business interests.
In the event of such termination, Licensee shall have the right to
continue thereafter to import and/or sell any and all Merchandise
which Licensee has purchased, produced or committed to purchase prior
to the date of termination.
n. Non-Disclosure of Terms. The existence and content of this Agreement
-----------------------
are confidential and are trade secrets, and shall not be released in
whole or in part to any third party, or disclosed to any newspaper or
other public medium, or in any other fashion whatsoever, without the
mutual, prior approval of the Parties, in their sole discretion;
except that any party shall have the right to make such disclosures as
required by law or court order, or on a "need to know" basis within
their respective organizations and related, affiliated and subsidiary
companies, and to their respective accounts and attorneys.
The provisions of this Section 12 shall survive the expiration or sooner
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 12th day of November, 1997
XXXXXX XXXXXX CORPORATION CHEROKEE, INC.
By: /s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------- -----------------------
Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxxx
Executive Vice President, Marketing Chief Executive Officer
17
EXHIBIT A
CHEROKEE TRADEMARK REGISTRATION LISTING
EXHIBIT B
POTENTIAL RETAIL DRUG STORE LICENSEES*
CVS Drugs
Discount Drug Mart
Drug Emporium
Eckerd
Xxxxxxxx Drug Stores
Haggens
Harco
K&B
Xxxxx Drug, Inc.
Longs Drug Stores
Phar-Mor
Revco D.S.
Rite Aid Corp
Smiths
Xxxxxx'x Drug Stores
Super D Drug Stores
Xxxxxx Drug Stores
Thrifty Payless
Waigreens
Drug Stores
*The drug stores listed above are representative only. Any new companies that
emerge in the Retail Drug Store Class of Trade can be added, upon prior written
notice to Licensee. For purposes of this Agreement, the Retail Drug Store Class
of Trade shall be defined as consisting of retail stores that sell primarily
health and beauty and/or cosmetics products; excluding, without limitation, mass
merchandising discount stores, wholesale clubs, value discounters, retail stores
or departments located within mass merchandising discount stores, and any
merchandising activities other than retail store sales (e.g. direct mail,
interactive on line or kiosk selling).
EXHIBIT C
MANUFACTURER'S TRADEMARK AGREEMENT
THIS AGREEMENT, is made and entered into as of the ___ day of __________,
1997, by and between Target Stores, a division of Xxxxxx Xxxxxx Corporation, 00
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 (hereinafter "Target"), and
_______________________________________________________________________
(hereinafter "Manufacturer"), collectively hereinafter the "Parties".
WHEREAS, CHEROKEE, INC. (hereinafter "Cherokee") is the owner of the
trademark Cherokee and/or equivalent variations thereof, evidenced by numerous
U.S. registrations including, but not limited to Reg. Nos. 1,270,846, 1,279,965,
1,699,855, 1,751,953, 1,708,195 (collectively hereinafter the "Xxxx"); and
WHEREAS, TARGET is a licensee of the Xxxx, and has the right to use the
Xxxx in connection with certain Cherokee products ordered by Target from
manufacturers from time to time; and
WHEREAS, Manufacturer has been engaged by Target as a manufacturer of
certain Cherokee products (hereinafter the "Products"); and
WHEREAS, Manufacturer has agreed to manufacture and sell such Products to
Target, and to use the Xxxx in connection with such Products, solely as set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1. Target grants to Manufacturer a non-exclusive, non-transferable license to
use the Xxxx, during the term of this Agreement, solely in connection with
the importation and sale of the Products to Target in the United States,
and to manufacture such Products for Target. Manufacturer accepts the
license subject to the following terms and conditions.
2. Manufacturer acknowledges the ownership of the Xxxx by Cherokee and agrees
that nothing contained herein shall give Manufacturer any right, title or
interest in or to the Xxxx, other than the right to use the Xxxx in
accordance with this Agreement.
3. Manufacturer agrees to use the Xxxx only in the form and manner and with
the legends as prescribed from time to time by Target, on the understanding
that the Xxxx is neither licensed hereunder nor applicable to products
manufactured or sold by Manufacturer for or to any company other than
Target. Manufacturer shall affix or apply the Xxxx to the Products and/or
related packaging materials strictly in accordance with the specifications
provided by Target or as otherwise directed by Target. All Products bearing
the Xxxx and all packaging materials relating thereto shall include the (R)
or TM, as applicable. Manufacturer agrees to order any and all
packaging, labeling and/or trim for the Products only from manufacturers
who have been preapproved by Target. Target shall provide Manufacturer with
a list of such approved manufacturers.
4. Manufacturer shall not use any other names, trademarks or designs in
connection with the Xxxx and/or the Products unless so directed by Target.
5. Manufacturer represents and warrants that (a) all Products will be
manufactured by Manufacturer in Manufacturer's factory(ies) or by
subcontractors of Manufacturer in their factories, and that Manufacturer
will provide Target with a list of all such factories and the countries in
which they are located upon execution of this Agreement, (b) all
subcontractors of Manufacturer, if any, will sign the attached
Subcontractor's Certificate, copies of which will be provided to Target
immediately upon execution, and (c) all Products will be labeled with the
correct country of origin and in accordance with all applicable laws, rules
and regulations of the United States and its agencies.
6. In the event that any Products are rejected by Target, for any reason,
Manufacturer agrees to immediately remove all labels, tags, snaps and/or
other markings on such Products bearing the Xxxx, before disposing of them
(other than care labels if shipped to the United States). In the event that
such markings cannot be removed from the Products, Manufacturer agrees to
immediately notify Target of that fact and then Manufacturer may either (a)
immediately destroy the Products, or (b) obtain approval from Target and
Cherokee to sell the Products to a retailer which sells products at least
equal to the standard of products sold by Target; provided, however, that
(a) Manufacturer shall be required to pay a 3% royalty on the Products to
Cherokee, and (b) in no event shall Manufacturer sell the Products to Wa1-
Mart, K-Mart, or any of their affiliates, successors or assigns, "clubs"
(i.e. Costco, Xxxx, Fedco), Dollar General, Pic'n Save, Hills, Bradlees,
Arnes, diverters or jobbers, or outside of the United States.
7. Any information disclosed to Manufacturer by Target pursuant to this
Agreement is confidential information commercially valuable to Target.
Manufacturer acknowledges that the Target information is disclosed to
Manufacturer on a confidential basis to be used only as may be expressly
permitted by the terms and conditions of this Agreement. Manufacturer, its
officers, directors, employees, and agents shall protect the Target
information and all information pertaining thereto, whether written or
oral, as the confidential information and property of Target. Manufacturer
shall not disclose any information concerning Target data to any other
person, firm, organization, or employee who is not authorized, in writing,
by Target. Target information may not be copied, reprinted, duplicated, or
recreated in whole or in part without the express written consent of
Target. Manufacturer shall take reasonable action by instruction, agreement
or otherwise with respect to Manufacturer's employees or other persons
permitted access to the Target information to comply fully with
Manufacturer's obligation hereto with respect to the use, copying,
protection, and security of Target data. Manufacturer agrees to return all
Target information, and all copies thereof, to Target, upon request.
8. During the term of this Agreement, manufacturer shall permit Target,
Cherokee and/or their agents to inspect Manufacturer's activities and
premises.
9. In the event of Manufacturer's failure to abide by any of the foregoing,
Target and/or Cherokee may seek legal remedies against Manufacturer,
including, but not limited to, compensation for all damages sustained as a
result of Manufacturer's actions or omissions, as well as injunctive
relief.
10. This Agreement shall commence as of the date hereof and shall continue in
effect for such period
of time as Target is purchasing the Products from Manufacturer. Target
shall have the right to terminate this Agreement immediately upon written
notice to Manufacturer in the event of (a) any affirmative act of
insolvency by Manufacturer, (b) the appointment of any receiver or trustee
to take possession of the properties of Manufacturer, (c) the winding-up,
sale, consolidation, merger or any sequestration by governmental authority
of Manufacturer, or (d) a material breach of any significant provision
hereof by Manufacturer. In addition, should the Trademark License Agreement
in effect between Target and Cherokee expire or be terminated, for any
reason, this Agreement shall likewise terminate.
11. Upon termination of this Agreement, for any reason, Manufacturer agrees to
immediately discontinue all use of the Xxxx and any terms confusingly
similar thereto; provided, however, that Manufacturer shall have the right
to sell any Products remaining in its inventory at the time of termination
of this Agreement, in accordance with the terms of Section 6 hereinabove.
Further, upon termination of this Agreement, for any reason, Target shall
have the option, exercisable in its sole discretion, to purchase from
Manufacturer, at Manufacturer's cost, Manufacturer's remaining inventory of
Cherokee labels. In the event that Target elects not to purchase such
labels, Manufacturer shall immediately destroy the labels and provide proof
of such destruction to Target.
12. It is agreed that this Agreement will be interpreted according to the laws
of the State of Minnesota, United States of America.
13. This Agreement contains the entire understanding between the parties
hereto, with respect to the licensing of the Xxxx, and supersedes all prior
agreements and proposals, if any, and will not be amended, modified, or
altered except by an instrument in writing, signed by the parties to be
charged.
14. This Agreement and all of the terms thereunder shall not be deemed
assignable by Manufacturer without the express written consent of both
Target and Cherokee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above-written.
XXXXXX XXXXXX CORPORATION, MANUFACTURER
TARGET STORES DIVISION
By: By:
Name: Name:
Title: Title:
SUBCONTRACTOR'S CERTIFICATE
THIS AGREEMENT, is made and entered into as of the ___ day of _______, 1997,
by and Between _______________________________________________________
(hereinafter "Manufacturer"). And __________________________________________
(hereinafter "Subcontractor"), collectively hereinafter the "Parties".
WHEREAS, Cherokee, Inc. (hereinafter "Cherokee") is the owner of the
trademark and/or certain common-law rights in and to the name Cherokee with
various stylized designs (collectively hereinafter the "Xxxx"); and
WHEREAS, Target Stores, a division of Xxxxxx Xxxxxx Corporation
(hereinafter "Target"), is a licensee of the Xxxx, and has the right to use the
Xxxx in connection with certain products ordered by Target from manufacturers
from time to time; and
WHEREAS, Manufacturer has been engaged by Target as a manufacturer of
certain Cherokee products (hereinafter the "Products") and holds a non-
exclusive, non-transferable license to use the Xxxx, solely in connection with
the importation and sale of the Products to Target in the United States, and to
manufacture such Products for Target; and
WHEREAS, Subcontractor has agreed to manufacture all or some of such
Products for Manufacturer, and to use the Xxxx in connection with such Products,
solely as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1. Subcontractor acknowledges the ownership of the Xxxx by Cherokee and agrees
that nothing contained herein shall give Subcontractor any right, title or
interest in or to the Xxxx, other than the right to use the Xxxx in
accordance with this Agreement.
2. Subcontractor agrees to use the Xxxx only in the form and manner and with
the legends as prescribed from time to time by Target, on the understanding
that the Xxxx is neither licensed hereunder nor applicable to products
manufactured or sold by Subcontractor for or to any company other than
Target. Subcontractor shall affix or apply the Xxxx to the Products and/or
related packaging materials strictly in accordance with the specifications
provided by Manufacturer or as otherwise directed by Manufacturer and/or
Target. All Products bearing the Xxxx and all packaging materials relating
thereto shall include the or TM, as applicable. Subcontractor agrees to
order any and all packaging, labeling and/or trim for the Products only
from manufacturers who have been pre-approved by Target. Manufacturer shall
provide Subcontractor with a list of such approved manufacturers.
3. Subcontractor shall not use any other names, trademarks or designs in
connection with the Xxxx and/or the Products unless so directed by Target.
4. Subcontractor represents and warrants that all Products will be (a)
manufactured by Subcontractor in Subcontractor's factory(ies), and that
Subcontractor will provide Manufacturer with a list of all such factories
and the countries in which located upon execution of this Agreement, and
(b) will be labeled with the correct country of origin and in accordance
with all applicable laws, rules and regulations of the United States and
its agencies.
5. In the event that any Products are rejected by Target, for any reason,
Subcontractor agrees to immediately remove all labels, tags, snaps and/or
other markings on such Products bearing the Xxxx, before disposing of them
(other than care labels if shipped to the United States). In the event that
such markings cannot be removed from the Products, Subcontractor agrees to
immediately notify Target of that fact and then Subcontractor may either
(a) immediately destroy the Products, or (b) obtain approval from Target
and Cherokee to sell the Products to a retailer which sells products at
least equal to the standard of products sold by Target; provided, however,
that (a) Subcontractor shall be required to pay a 3% royalty on the
Products to Cherokee, and (b) in no event shall Subcontractor sell the
Products to any mass merchandising discount or department stores, diverters
or jobbers, or outside of the United States.
6. Any information disclosed to Subcontractor by Target pursuant to this
Agreement is confidential information commercially valuable to Target.
Subcontractor acknowledges that the Target information is disclosed to
Subcontractor on a confidential basis to be used only as may be expressly
permitted by the terms and conditions of this Agreement. Subcontractor, its
officers, directors, employees, and agents shall protect the Target
information and all information pertaining thereto, whether written or
oral, as the confidential information and property of Target. Subcontractor
shall not disclose any information concerning Target data to any other
person, firm, organization, or employee who is not authorized, in writing,
by Target. Target information may not be copied, reprinted, duplicated, or
recreated in whole or in part without the express written consent of
Target. Subcontractor shall take reasonable action by instruction,
agreement or otherwise with respect to Subcontractor's employees or other
persons permitted access to the Target information to comply fully with
Subcontractor's obligation hereto with respect to the use, copying,
protection, and security of Target data. Subcontractor agrees to return all
Target information, and all copies thereof to Target, upon request.
7. During the term of this Agreement, Subcontractor shall permit Manufacturer,
Target, Cherokee and/or their agents to inspect Subcontractor's activities
and premises.
8. In the event of Subcontractor's failure to abide by any of the foregoing,
Target and/or Cherokee may seek legal remedies against Subcontractor,
including, but not limited to, compensation for all damages sustained as a
result of Subcontractor's actions or omissions, as well as injunctive
relief.
9. This Agreement shall commence as of the date hereof and shall continue in
effect for such period of time as Target is purchasing the Products from
Manufacturer. This Agreement shall terminate immediately upon written
notice to Subcontractor in the event of (a) any affirmative act of
insolvency by Subcontractor, (b) the appointment of any receiver or trustee
to take possession of the properties of Subcontractor, (c) the winding-up,
sale, consolidation, merger or any sequestration by governmental authority
of Subcontractor, or (d) a material breach of any
significant provision hereof by Subcontractor. In addition, should the
Agreement in effect between Target and Cherokee expire or be terminated,
for any reason, this Agreement shall likewise terminate.
10. Upon termination of this Agreement, for any reason, Subcontractor agrees to
immediately discontinue all use of the Xxxx and any terms confusingly
similar thereto; provided, however, that Subcontractor shall have the right
to sell any Products remaining in its inventory at the time of termination
of this Agreement, in accordance with the terms of Section 6 hereinabove.
Further, upon termination of this Agreement, for any reason, Target shall
have the option, exercisable in its sole discretion, to purchase from
Subcontractor, at Subcontractor's cost, Subcontractor's remaining inventory
of Cherokee labels. In the event that Target elects not to purchase such
labels, Subcontractor shall immediately destroy the labels and provide
proof of such destruction to Target.
11. It is agreed that this Agreement will be interpreted according to the laws
of the State of Minnesota, United States of America.
12. This Agreement contains the entire understanding between the parties
hereto, with respect to the licensing of the Xxxx, and supersedes all prior
agreements and proposals, if any, and will not be amended, modified, or
altered except by an instrument in writing, signed by the parties to be
charged.
13. This Agreement and all of the terms thereunder shall not be deemed
assignable by Subcontractor without the express written consent of both
Target and Cherokee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above-written.
MANUFACTURER SUBCONTRACTOR
BY: BY:
NAME: NAME:
TITLE: TITLE:
