EXHIBIT 10.1
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this 11th day of June, 1997 by and
between ST. XXXX KNITS, INC., a corporation duly organized under the laws of the
State of California (hereinafter "SUPPLIER"), and XXXX XXXX, LTD., a corporation
duly organized under the laws of the State of Connecticut (hereinafter
"DISTRIBUTOR").
WHEREAS, Supplier designs, manufactures and distributes women's
apparel as well as jewelry and accessories;
WHEREAS, Supplier manufactures and markets certain perfume products
and desires to increase the sales of such products;
WHEREAS, Distributor has represented that it possesses the necessary
expertise and marketing organization to promote and sell such perfume products;
and
WHEREAS, Supplier is willing to appoint Distributor, and Distributor
is willing to accept such appointment, as distributor of Supplier's perfume
products in the United States;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter set forth, the parties agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following words, terms and
phrases, where written with an initial capital letter, shall have the meanings
assigned to them in this Article 1 unless the context otherwise requires:
1.1 CONTRACT YEAR: shall mean the period from August 1 though July 31
of the following year.
1.2 DISTRIBUTOR NET SALES: shall mean all amounts invoiced by
Distributor to its customers for the sale of the Products.
1.3 DISTRIBUTOR PRICE: shall mean the Suggested Wholesale Price less
seventy percent (70%).
1.4 PRODUCTS: shall mean those products described in Schedule I
hereto as that Schedule may be amended by Supplier, at its sole discretion, from
time to time.
1.5 QUOTA: shall mean the minimum quantities of Products that
Distributor shall be expected to purchase from Supplier during a Contract Year
under this Agreement.
1.6 SUPPLIER INFORMATION: shall mean all information, other than
information in published form or expressly designated by Supplier as non-
confidential, which is directly or indirectly disclosed to Distributor or
embodied in Products provided hereunder, regardless of the form in which it is
disclosed, relating in any way to Supplier's markets, customers, products,
patents, inventions, procedures, methods, designs, strategies, plans, assets,
liabilities, costs, revenues, profits, organization, employees, agents,
distributors or business in general.
1.7 SUGGESTED RETAIL PRICE: shall mean the suggested retail price for
a Product then being listed by Supplier.
1.8 SUGGESTED WHOLESALE PRICE: shall mean the Suggested Retail Price
less forty percent (40%).
1.9 SUPPLIER NET SALES: shall mean all amounts invoiced by Supplier
to Distributor for the sale of the Products.
1.10 TERRITORY: shall mean department and specialty stores and fine
parfumeries that carry Supplier's apparel line and that currently carry the
Products located in the United States.
ARTICLE 2
APPOINTMENT
2.1 SCOPE. Supplier hereby appoints Distributor, and Distributor
hereby accepts appointment, as Supplier's exclusive distributor during the term
of this Agreement with the right to sell or otherwise distribute Products in the
Territory, under Supplier's name, logotypes and trademarks, subject to all the
terms and conditions of this Agreement. Distributor shall not advertise,
promote, solicit customers for, sell or distribute Products outside the
Territory nor establish any office through which orders are solicited or any
depot at which inventories of Products are stored outside the United States.
2.2 SUBDISTRIBUTORS. Distributor shall not without the prior written
approval of Supplier, which approval may be withheld in Supplier's absolute and
sole discretion, appoint any subdistributors or agents to promote and/or
distribute Products.
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Further, notwithstanding any such appointments, or Supplier's approval thereof,
Distributor shall at all times remain fully liable for the performance of its
subdistributors and/or agents and Distributor hereby agrees to indemnify and
hold harmless Supplier from all damages, losses, costs or expenses arising in
any manner from any act or omission on the part of its subdistributors or
agents.
2.3 SALES IN TERRITORY. Distributor shall not without the prior
written approval of Supplier, which approval may be withheld in Supplier's
absolute and sole discretion, sell to any customers other than department and
specialty stores that carry Supplier's apparel line and that currently carry the
Products.
2.4 SALES TO BOUTIQUES. Supplier's retail outlets located in the
United States, including its boutique and outlet stores, shall be included in
the Territory; provided that Supplier may sell the Products directly to its
outlet stores; and further provided that Distributor agrees that it shall charge
Supplier's retail outlets the Suggested Retail Price less sixty percent (60%).
2.5 RESERVED SALES RIGHTS. Notwithstanding any other provision of
this Agreement, Supplier reserves the right to sell Products under the
Supplier's name, logotypes and trademarks outside the United States.
ARTICLE 3
GENERAL OBLIGATIONS OF DISTRIBUTOR
3.1 MARKETING. Distributor shall have the following obligations with
respect to the marketing and distribution of the Products:
(a) To use its best efforts to further the promotion, marketing,
sale and other distribution of Products in the United States;
(b) To insure that the promotion, marketing and sale of the
Products is consistent with the Supplier's image and reputation;
(c) To maintain an adequate and balanced inventory of Products;
(d) To diligently investigate all leads with respect to potential
customers referred to it by Supplier;
(e) To permit Supplier on reasonable notice to visit
Distributor's customers and to visit Distributor's place of business and
inspect its inventories, service records and other relevant documents;
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(f) To maintain throughout the United States an adequate sales
force dedicated on a full-time basis to the sale of Products and to
maintain adequate coverages in major markets; Supplier's recommended
minimum coverages are specified in Schedule II;
(g) To participate actively in sales or merchandising programs
planned by Supplier; to participate in all fairs and exhibitions in the
United States where such participant will, in the judgment of Supplier,
promote the Products, including participation in Supplier's trunk shows and
personal appearances of Xxxxx Xxxx or Xxxxx Xxxx; and Distributor shall
insure that a model or representative for the Products (wearing Supplier's
apparel) shall be present at each of Supplier's trunk shows and personal
appearances by Xxxxx Xxxx or Xxxxx Xxxx;
(h) To develop and implement sales programs for the promotion of
the Products;
(i) To provide Supplier contemporaneously with the execution of
this Agreement with a comprehensive one (1) year promotion and sales plan
in form and detail reasonably requested by Supplier, and to update such
business plan each year within ninety (90) days prior to the commencement
of each subsequent Contract Year; and
(j) To provide Supplier within fifteen (15) days of the end of
each month a report of its sales (by retail customer) for that month
compares to its forecasted sales for such month, which report shall be in
such form and in such detail as Supplier may reasonably require; and to
provide Supplier within ninety (90) days of the end of each Contract Year
with a report of its activities with respect to the Products in the United
States during such year, which report shall be in such form and in such
detail as Supplier may reasonably require.
3.2 EXPENSES. Distributor assumes full responsibility for all costs
and expenses that it incurs in carrying out its obligations under this
Agreement, including but not limited to all rentals, salaries, commissions,
advertising, demonstration, travel and accommodation expenses without the right
to reimbursement for any portion thereof from Supplier.
3.3 COMPETITIVE PRODUCTS. Supplier acknowledges that Distributor
markets and distributes products that compete with the Products; and Distributor
expressly agrees that it is bound by Article 7 hereof and shall not disclose any
Supplier Information to any competitors of the Supplier.
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ARTICLE 4
PRICES AND PAYMENTS
4.1 PRICES. The prices to be paid by Distributor for Products
purchased pursuant to this Agreement shall be the Distributor Prices in effect
at the time of acceptance of the relevant purchase order. All Distributor
Prices are f.o.b. at or near Distributor's manufacturing or warehouse facility,
or at Distributor's designated shipping point, and include packing in accordance
with Supplier's standard commercial practices in effect at the time of shipment.
Special packing or handling shall be at the sole expense of Distributor. All
payments to be made by Distributor to Supplier pursuant to this Agreement
represent net amounts Supplier is entitled to receive and shall not be subject
to any deductions for any reason whatsoever; provided that Supplier shall also
provide Distributor with the packaging material described in Section 4.4 and the
additional promotional items described in Article 7.
4.2 PRICE INCREASES, DECREASES. Supplier may, at any time during the
term of this Agreement, increase its prices for the Products by providing
Distributor with at least sixty (60) days prior written notice. Increased prices
for all Products shall not apply to purchase orders accepted prior to the
effective date of the price increase. Price decreases with respect to all
Products shall be effective immediately upon written notice to the Distributor
on all such Products not yet delivered.
4.3 PAYMENT TERMS. All payments hereunder shall be due net ninety
(90) days from the date of shipment of the Products. In the event of any
dispute arising over any part of an invoice or the total amount due under an
invoice, all undisputed amounts shall be promptly paid by Distributor. So long
as any amount due remains unpaid by Distributor, (i) Supplier shall have the
right, in its sole discretion, to require payment for additional shipments of
Products either by cash in advance or supported by a letter of credit, (ii)
Distributor will owe and will pay interest on the amount overdue at the rate
equal to the lessor of: (a) the prime rate being charged by Bank of America plus
three percent (3%); or (b) the maximum rate allowed by applicable law and (iii)
Supplier may exercise any of its rights and remedies for such breach under this
Agreement and applicable law.
4.4 REFURBISHING. Supplier shall provide Distributor packaging
material for refurbishing returned Products of an amount sufficient to refurbish
five percent (5%) of the quantity of units purchased during a Contract Year.
Any additional packaging material requested by Distributor shall be provided by
Supplier on the terms specified by Supplier.
4.5 RESALE PRICES. Supplier will provide Distributor with a list of
suggested wholesale and retail prices for the Products.
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ARTICLE 5
ORDERS FOR PRODUCTS
5.1 PURCHASE ORDERS. Distributor shall submit purchase orders for
the Products to Supplier in writing sent by mail, overnight delivery or
facsimile. The purchase order shall specify the desired delivery dates and
shipping instructions and shipping address. Distributor shall ensure that its
purchase orders are received by Supplier at least (x) one-hundred and twenty
(120) days prior to the requested delivery dates of any promotional or seasonal
items and (ii) ninety (90) days prior to the requested delivery dates for all
other items. Without the written consent of the Supplier, Distribution shall
not be entitled to order quantities of items in excess of 110% of Distributor's
forecast during any six month period.
5.2 ACCEPTANCE OF ORDERS. All purchase orders from Distributor are
subject to reasonable acceptance in writing by Supplier at its principal offices
in Irvine, California, which acceptance shall be delivered by mail, overnight
delivery or facsimile. Each purchase order shall be deemed to be an offer by
Distributor to purchase the Products pursuant to the terms of this Agreement
and, when accepted in writing by Supplier shall give rise to a contract under
the terms set forth herein to the exclusion of any additional or contrary terms
set forth in the purchase order.
5.3 DELIVERY TERMS.
(a) All deliveries of the Products shall be f.o.b. at or near
Supplier's manufacturing or warehouse facility, or at Supplier's designated
shipping point. Unless otherwise provided in this Agreement, "f.o.b."
shall be construed in accordance with California law.
(b) Distributor shall insure each shipment of Products with a
reputable insurer for the full invoice of such shipment. Such insurance
shall provide for full coverage from the time the Products are delivered at
the f.o.b. delivery point until Distributor shall have paid Supplier for
such Products in full. Supplier reserves all rights with respect to
delivered Products permitted by law, including without limitation, the
rights of recession, repossession, resale, and stoppage in transit until
the full amount due from Distributor in respect of all delivered Products
has been paid.
(c) Supplier shall use reasonable commercial efforts to deliver
accepted orders in accordance with requested delivery dates, but Supplier
shall not be responsible for any loss or liabilities caused by delayed
shipment of any orders for any reason whatsoever; provided that if delivery
of the Products is not made
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within fifteen (15) days of the requested delivery date, Distributor may
cancel the purchase order by written notice to Supplier.
5.4 MODIFICATION OF ORDERS. No accepted purchase order shall be
modified or cancelled except upon the written agreement of both parties.
Distributor's purchase orders or mutually agreed change orders shall be subject
to all provisions of this Agreement, whether or not the purchase order or change
order so states.
5.5 ACCEPTANCE OF PRODUCTS. In the event of any shortage, damage or
discrepancy in or to a shipment of Products, Distributor shall promptly report
the same to Supplier and furnish such written evidence or other documentation as
Supplier may deem appropriate. Supplier shall not be liable for any such
shortage, damage or discrepancy unless Supplier has received notice and
substantiating evidence thereof from Distributor within thirty (30) days of
arrival of the Products at Distributor's shipping address. Upon receipt of
satisfactory substantiating evidence, Supplier shall promptly deliver additional
or substitute Products to Distributor in accordance with the delivery procedures
set forth herein; provided that in no event shall Supplier be liable for any
additional costs, expenses or damages incurred by Distributor directly or
indirectly as a result of such shortage, damage or discrepancy in or to a
shipment.
5.6 PRODUCT CHANGES. Supplier reserves the right, in its sole
discretion and without incurring any liability to Distributor, to alter the
specifications for any Product; discontinue the manufacture of any Product;
discontinue the development of any new product, whether or not such product has
been announced publicly; or commence the manufacture and sale of new products
having features that make any Product wholly or partially obsolete, whether or
not Distributor is granted any distribution rights in respect of such new
products. Notwithstanding the foregoing, Supplier shall use its best efforts to
provide Distributor with prompt written notice of such decisions and to fill all
accepted purchase orders from Distributor.
5.7 FORECASTS. Distributor agrees to provide Supplier with a rolling
twelve (12) month forecast of orders on a monthly basis indicating Distributor's
intended purchases of Products. Such forecast shall be updated by Distributor
on a rolling basis on the fifteen of each month. Such rolling forecasts shall
be used to the purposes of facilitating Supplier's manufacturing and lead times
but shall not constitute or amend the Quota for any period. Distributor's
initial forecast is attached hereto as Schedule III.
ARTICLE 6
MINIMUM PURCHASE REQUIREMENT
6.1 GENERAL REQUIREMENT. Distributor understands and agrees that the
establishment and achievement of the Quota is the essence of this Agreement, and
that
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failure by Distributor to satisfy its obligation under this Article 6 shall
constitute a failure of consideration on the basis of which Supplier shall be
entitled to terminate this Agreement.
6.2 DETERMINATION OF QUOTA. For the initial Contract Year, the Quota
shall be $1.5 million of Supplier Net Sales. For each subsequent Contract Year,
unless otherwise mutually agreed upon by Distributor and Supplier in writing,
the Quota shall be fifteen percent (15%) greater than the greater of (a) the
Quota for the previous Contract Year or (b) the actual Supplier Net Sales for
the previous Contract Year.
ARTICLE 7
ADVERTISING AND PROMOTION
7.1 PROMOTION OF PRODUCTS. Distributor shall diligently undertake to
advertise the Products in the United States. Distributor shall consult and
coordinate with Supplier regarding all promotion and advertising for the
Products, and all marketing, advertising and sales promotions for the Products
shall be subject to Supplier's final approval. Distributor agrees to spend an
amount equal to 40% of Distributor Net Sales for advertising and promotion of
the Products during each Contract Year. To facilitate the sale and promotion of
the Products, each Contract Year, Supplier shall furnish Distributor with the
following items, of an aggregate value of ten percent (10%) of Supplier's Net
Sales during that Contract Year: (i) photographs and artistic work for all
promotional activity, including displays, advertising and brochures; and (ii)
testers, samples, blotters displays and other non-retail store items. In
addition, Supplier shall provide Distributor with fragrance oil for magazine and
catalogue strips as reasonably required for promotion and advertising approved
by Supplier. All other expenses incurred by Distributor with respect to creating
advertising materials and advertising the Products shall be borne by
Distributor.
7.2 SUPPLIER'S APPAREL. Supplier shall sell its apparel products to
Distributor for models and representatives for the Products at Supplier's
wholesale price less ten percent (10%).
ARTICLE 8
LIMITATION OF WARRANTIES AND REMEDIES
DISTRIBUTOR UNDERSTANDS AND AGREES AS FOLLOWS:
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8.1 NO WARRANTIES, EXPRESS OR IMPLIED. Supplier HEREBY EXPRESSLY
DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FOR A PARTICULAR PURPOSE, AND ALL OBLIGATIONS OR
LIABILITIES ON THE PART OF SUPPLIER FOR DAMAGES ARISING OUT OF OR IN CONNECTION
WITH THE USE OR PERFORMANCE OF THE PRODUCTS.
8.2 CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL SUPPLIER'S LIABILITY OF
ANY KIND INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES, EVEN IF SUPPLIER SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSS OR DAMAGE.
ARTICLE 9
TRADEMARKS AND TRADE NAMES
9.1 TRADEMARKS AND TRADE NAMES.
(a) Supplier represents and warrants that it has the sole and
exclusive right to the trademarks and tradenames used in connection with
the Products.
(b) Distributor recognizes the validity of Supplier's trademarks
and trade names, and acknowledges that such trademarks and trade names are
the sole property of Supplier. Distributor gains no license or proprietary
rights in such trademarks or trade names hereunder, and shall not infringe
upon, dilute or harm Supplier's rights in its trademarks and trade names.
Distributor hereby assigns to Supplier any and all good will resulting from
Distributor use of Supplier's trademarks and trade names.
(c) Upon termination of this Agreement, Distributor agrees to
discontinue immediately all use of Supplier's trademarks and trade names
and to destroy or deliver to Supplier (at Supplier's election) all
advertisements, brochures, displays, designs, posters and other promotional
matter then in Distributor's possession or control.
(d) Distributor shall promptly inform Supplier in writing of any
infringement of Supplier's trademarks or trade names, or of any claim or
allegation that Supplier's trademarks or trade names infringe any rights of
any other person. Distributor agrees that it will assist and cooperate in
the protection of Supplier's trademarks and tradenames as requested by
Supplier, and Supplier agrees to reimburse Distributor for any out-of-
pocket costs incurred in connection with such
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assistance; provided that if any action is brought against Distributor
involving Supplier's trademarks or tradenames, Supplier shall assume
control of the defense of such action and shall pay all expenses incurred
in such defense.
(e) Distributor acknowledges that Supplier shall control the
quality of the Product and Distributor shall not alter the Products in any
manner.
(f) Distributor shall not use any trademarks or trade names other
than those expressly authorized by Supplier in this Agreement or in writing
from time to time. Distributor shall not use Supplier's trademarks or
trade names in any manner (including advertising) without submitting such
proposed use to Supplier and obtaining prior written approval therefore
from Supplier.
ARTICLE 10
CONFIDENTIALITY
Distributor acknowledges and agrees that all Supplier Information is
confidential and proprietary to Supplier. Distributor agrees not to use any of
such Supplier Information during the term of this Agreement and for a period of
five (5) years thereafter for any purpose other than as permitted or required
for performance by Distributor hereunder. Distributor further agrees not to
disclose the terms of this Agreement or provide any of such Supplier Information
to any third party and to take all necessary measures to prevent any such
disclosure by its employees, agents, contractors or consultants during the term
hereof and for a period of five (5) years thereafter. Nothing herein shall
prevent Distributor from using, disclosing or authorizing the disclosure of any
Supplier Information which is, or hereafter becomes, part of the public domain
through no fault of Distributor.
ARTICLE 11
TERM AND TERMINATION
11.1 TERM. This Agreement shall take effect as of August 1, 1997 and
shall continue in force for the initial period of five (5) years. Six (6)
months prior to the expiration of the initial period and each subsequent period,
the parties shall determine whether to extend the Agreement for an additional
Contract Year. If not extended by mutual agreement after the initial period or
any subsequent period, this Agreement shall terminate.
11.2 TERMINATION. Notwithstanding the provisions of Section 11.1
above, this Agreement may be terminated in accordance with the following
provisions:
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(a) Either party hereto may terminate this Agreement at any time
by giving notice in writing to the other party, if the other party becomes
the subject of bankruptcy or insolvency proceedings, makes an assignment
for the benefit of creditors, go into liquidation or receivership, or
otherwise loses legal control of its business;
(b) Either party may terminate this Agreement by giving notice in
writing to the other party should an event of Force Majeure (as defined in
Section 12.1 below) continue for more than six (6) months; or
(c) Either party may terminate this Agreement by giving notice in
writing to the other party if the other party is in material breach of this
Agreement and, if the breach is curable, shall have failed to cure such
breach within thirty (30) days of receipt of written notice thereof from
the first party.
11.3 AGREEMENT TO DISCUSS MUTUAL TERMINATION. If either party
determines in its business judgment that a termination of the Agreement prior to
its expiration is desirable, it shall notify the other party and both parties
agree to discuss in good faith a mutually agreeable termination of the
Agreement.
11.4 RIGHTS AND OBLIGATIONS ON TERMINATION. In the event of
termination of this Agreement for any reason, the parties shall have the
following rights and obligations:
(a) Termination of this Agreement shall not release either party
from the obligation to make payment of all amounts then or thereafter due
and payable;
(b) Upon termination, Supplier shall have the right, at its
option, to (i) cancel any or all accepted purchase orders that provide for
delivery after the effective date of termination, and/or (ii) repurchase
any part or all of Distributor's inventory of Products in Distributor's
possession as of the termination date at Supplier's invoiced price to
Distributor for such products, plus freight to the original f.o.b. shipping
point. Supplier shall exercise its option under this subsection by
notifying Distributor in writing no later than thirty days (30) days of
receipt from Distributor of a detailed statement of its unsold inventories,
which Distributor shall provided to Supplier within seven (7) days of the
effective termination date. If (i) Supplier fails to timely provide
Supplier with the detailed inventory or (ii) if Supplier determines to
repurchase all of Distributor's inventory, Supplier shall immediately cease
distributing the Products; otherwise the Supplier may continue to
distribute the Products until the date that is six months after the
termination of the Agreement. Regardless of the basis for termination, in
no event shall
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Distributor have the right to sell the Products except to the Supplier or
to customers approved under Section 2.3 of this Agreement;
(c) Distributor's obligations pursuant to Articles 9 and 10
hereof shall survive termination of this Agreement; and
(d) Within thirty (30) days of the effective date of termination
of this Agreement, Distributor shall furnish Supplier with a list of all
Distributor's customers and the place of destination of all Products sold
within the last year. In addition, Distributor agrees to furnish Supplier
with complete information as to the status of any negotiations for the sale
of the Products.
11.5 NO COMPENSATION. In the event either party terminates this
Agreement for any reason in accordance with the terms hereof, the parties hereby
agree that, without prejudice to any other remedies which either party may have
in respect of any breach of this Agreement, neither party shall be entitled to
any compensation or like payment from the other as a result of such termination.
ARTICLE 12
FORCE MAJEURE
12.1 DEFINITION. Force Majeure shall mean any event or condition, not
existing as of the date of signature of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of either
party, that prevents whole or in material part the performance by one of the
parties of its obligations hereunder or that renders the performance of such
obligations so difficult or costly as to make such performance commercially
unreasonable. Without limiting the foregoing, the following shall constitute
events or conditions of Force Majeure: acts of State or governmental action,
riots, disturbance, war, strikes, lockouts, slowdowns, prolonged shortage of
energy supplies, epidemics, fire, flood, hurricane, typhoon, earthquake,
lightning and explosion.
12.2 NOTICE. Upon giving notice to the other party, a party affected
by an event of Force Majeure shall be released without any liability on its part
from the performance of its obligations under this Agreement, except for the
obligation to pay any amounts due and owing hereunder, but only to the extent
and only for the period that its performance of such obligations is prevented by
the Force Majeure. Such notice shall include a description of the nature of the
Force Majeure, and its cause and possible consequences. The party claiming Force
Majeure shall promptly notify the other party of the termination of such event.
12.3 CONFIRMATION. The party invoking Force Majeure shall provide to
the other party confirmation of the existence of the circumstances constituting
Force
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Majeure. Such evidence may consist of a statement or certificate of an
appropriate governmental department or agency where available, or a statement
describing in detail the facts claimed to constitute Force Majeure.
12.4 SUSPENSION OF PERFORMANCE. During the period that the
performance by one of the parties of its obligations under this Agreement has
been suspended by reason of an event of Force Majeure, the other party may
likewise suspend the performance of all or part of its obligations hereunder to
the extent that such suspension is commercially reasonable.
ARTICLE 13
MISCELLANEOUS
13.1 RELATIONSHIP. This Agreement does not make either party the
employee, agent or legal representative of the other for any purpose whatsoever.
Neither party is granted any right or authority to assume or to create any
obligation or responsibility, express or implied, on behalf of or in the name of
the other party. In fulfilling its obligations pursuant to this Agreement each
party shall be acting as an independent contractor.
13.2 ASSIGNMENT. Distributor agrees that Supplier is entering into
this Agreement in reliance on Distributor's skill, experience and reputation for
the promoting and distributing fragrance products and that this Agreement is an
agreement for personal services under Section 365 of the Bankruptcy Code.
Neither party shall have the right to assign or transfer its rights and
obligations under this Agreement except with the prior written consent of the
other party, which consent may be withheld at that party's sole discretion for
any reason whatsoever, or for no reason at all; provided, however, Supplier
shall be entitled to assign any or all of its rights and obligations hereunder
to any of its subsidiaries. If Xxxx Xxxx and members of his immediate family
cease to own at least 51% of the outstanding shares of the Distributor's common
stock or other voting stock, such an event shall be deemed a violative
assignment of this Agreement. Any prohibited assignment shall be null and void.
13.3 NOTICES. Notices permitted or required to be given hereunder
shall be deemed sufficient if given by registered or certified air mail, postage
prepaid, return receipt requested, overnight courier, or facsimile (with a copy
mailed by first class mail), addressed to the respective addresses of the
parties as set forth below or at such other addresses as the respective parties
may designate by like notice from time to time. Each such notice shall be
effective (i) if given by mail, three days after deposit in the mails, with
first class postage prepaid, or (ii) if given by overnight courier, one day
after
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dispatch, or (iii) if given by facsimile when transmitted to the applicable
number specified below and an appropriate answer is received.
If to Supplier, addressed to:
ST. XXXX KNITS, INC.
00000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile: (000) 000-0000
With a copy to:
O'MELVENY & XXXXX LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Distributor, addressed to:
XXXX XXXX, LTD.
000 Xxxx'x Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
With a copy to:
XXXXXX-XXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
13.4 GOVERNING LAW. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of
California.
13.5 JURISDICTION. The sole jurisdiction and venue for any legal
action arising out of this Agreement shall be a federal or state court located
in Orange County, California. Each of Distributor and Supplier hereby
irrevocably submits to the jurisdiction of any of said courts and hereby waives
any claim or defense of inconvenient forum.
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13.6 ENTIRE AGREEMENT. THIS AGREEMENT, INCLUDING SCHEDULES I THROUGH
III ATTACHED HERETO AND INCORPORATED AS AN INTEGRAL PART OF THIS AGREEMENT,
CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, AND SUPERSEDES ALL PREVIOUS ORAL OR WRITTEN AGREEMENTS BY AND
BETWEEN SUPPLIER AND DISTRIBUTOR AS WELL AS ALL PROPOSALS, ORAL OR WRITTEN, AND
ALL NEGOTIATIONS, CONVERSATIONS OR DISCUSSIONS HERETOFORE HAD BETWEEN THE
PARTIES RELATED TO THIS AGREEMENT.
13.7 AMENDMENT. This Agreement shall not be deemed or construed to
be modified, amended, rescinded, cancelled or waived, in whole or in part,
except by written amendment signed by the parties hereto.
13.8 PUBLICITY. This Agreement is confidential and no party shall
issue press releases or engage in other types of publicity of any nature dealing
with the commercial and legal details of this Agreement without the other
party's prior written approval.
13.9 SEVERABILITY. If any of the terms of this Agreement is
determined by a court of competent jurisdiction to be unenforceable, such terms
shall be deemed stricken from this Agreement, except that to the extent striking
such provisions deprives either party of the benefit of its bargain, in which
event either the parties will renegotiate new provisions acceptable to them or
the Agreement shall terminate.
13.10 COUNTERPARTS. This Agreement can be executed in counterparts
and each such counterpart shall be deemed an original hereof.
13.11 NON-WAIVER. The waiver, express or implied, by any of the
parties hereto of any right hereunder or of any failure to perform or breach
hereof by the other party shall not constitute or be deemed a waiver of any
other right hereunder or of any other failure to perform or breach hereof by
such other party, whether of a similar of dissimilar nature thereto.
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.
ST. XXXX KNITS, INC.,
A CALIFORNIA CORPORATION
By: /s/ Xxxxx Xxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxx
----------------------------------------
Title:
---------------------------------------
XXXX XXXX, LTD.,
A CONNECTICUT CORPORATION
By: /s/ Xxxx Xxxx
------------------------------------------
Name: Xxxx Xxxx
----------------------------------------
Title:
---------------------------------------
16
SCHEDULE I
PRODUCTS
--------
Product WHOLESALE SUGGESTED RETAIL
------- --------- ----------------
SJ Perfume Spray 1 oz. $150 $250
SJ Perfume .40 oz. $ 60 $100
SJ EDP Spray 3.0 oz. $ 51 $ 85
SJ EDP Spray 1.7 oz. $ 36 $ 60
SJ EDP Spray 1 oz. $ 27 $ 45
SJ Body Creme 6.5 oz. $ 39 $ 65
SJ Body Lotion 3.0 oz. $ 27 $ 45
SJ Polishing Scrub 8.0 oz. $ 15 $ 25
SJ Shower Gel 8.0 oz. $ 15 $ 25
SJ Perfume Bath Salts 11.0 oz. $ 15 $ 25
SJ 3.0 oz. Body Mist $ 27 $ 46
SJ Sets & Promo Items
New Fragrance Line - planning 2 EDP sizes, 2 perfume sizes, Body Lotion, Body
Cream, other ancillaries and Promotional Sets.
S-I-1
SCHEDULE II
MARKET COVERAGE
---------------
Market Coverage
New York NY AE, Rotator, Full Time Sales Emp., Full Time
Emp. (share w/ L&T)
New Jersey NY AE, Rotator, Show Coverage
New York Suburbs NY AE, Show Coverage
Philadelphia Rotator, AE out of D.C.
Boston NY AE, Rotator, Show Coverage
Wash. D.C. AE, Rotator, Modeling, Show Coverage
Atlanta AE, Rotator (10 hrs per wk in Saks & NM's)
Florida Goldcoast AE, Rotator
Florida Westcoast AE
Chicago/Mich Ave AE, Rotator
Chicago Suburbs Chicago AE, Rotator, Show Coverage
Detroit & Suburbs Chicago AE, Rotator
St. Louis AE
Kansas City AE, Promo Modeling
Indianapolis AE
Minneapolis AE
Dallas AE, Rotator, Promo Modeling, Show Coverage
Houston AE, Rotator, Promo Modeling, Show Coverage
Las Vegas AE, Rotator (25 hrs), Promo Coverage
Denver AE, Promo Coverage
Phoenix AE, Rotator, Promo & Show Coverage
Seattle-Tacoma AE, Rotator, Promo & Show Coverage
San Francisco AE, Rotator, Promo & Show Coverage
S-II-1
San Xxxx - East Bay Promo and Show Coverage
San Xxxx - West Bay AE, Promo & Show Coverage
Xxxxxxx Hills AE, Rotator, Promo & Show Coverage
Valley AE
South Bay AE
Pasadena-Glendale AE
South Coast AE, Rotator, Promo & Show Modeling
Fashion Island AE, Promo & Show Coverage
Palm Springs AE, Promo & Show Coverage
San Diego AE, Promo & Show Coverage
AE = Account Executive
S-II-2
SCHEDULE III
FORECAST OF INTENDED PURCHASES
------------------------------
S-III-1
