SALE AGREEMENT
AGREEMENT dated June 4, 1997 among SASSCO FASHIONS, LTD. ("NEW
SASSCO"), a Delaware corporation, ASL/K LICENSING CORP., a Delaware corporation
("LICENSECO"), XXXXXXX XXXXXX and FORECAST DESIGNS, INC. ("FORECAST"), a New
York corporation.
RECITALS
I. Xxxxxxx Xxxxxx owns 100% percent of Forecast.
II. Xxxxxxx Xxxxxx and/or Forecast together own all of the
trademark rights relating to the use of the name "Xxxxxx," including, without
limitation, the trademarks and trademark registrations listed on Exhibit B
hereto (the trademarks that are the subject of these registrations hereinafter
the "TRADEMARKS") for products and services relating to the sale, manufacture,
or distribution of apparel and apparel-related items, including, without
limitation (i) certain women's apparel items which are the subject of licenses
from Xxxxxx and/or Forecast to the Sassco Division ("OLD SASSCO") of The Xxxxxx
Xxx Companies, Inc. ("XXXXXX XXX") (the "XXXXXX XXX LICENSES") and (ii) other
apparel and allied items which are the subject of licenses from Xxxxxx and/or
Forecast to entities other than Xxxxxx Xxx (the RESERVED LICENSES"). (Exhibit
"All lists all Reserved Licenses).
III. (a) In a transaction to close June 4, 1997 in connection with
New Sassco's acquisition of Old Sassco's assets under the plan approved in the
Chapter 11 Bankruptcy of Xxxxxx Xxx (the "CLOSING"), New Sassco will purchase
from Forecast and Xxxxxx, and Forecast and Xxxxxx will assign, transfer and
convey to New Sassco, all of Forecast's and/or Xxxxxx'x trademark rights
relating to the use of the name "Xxxxxx" and the Trademarks and effective upon
such purchase New Sassco will own 100% of the rights theretofore held by
Forecast and Xxxxxxx Xxxxxx to use the name "Xxxxxx" and the Trademarks for use
with products and services relating to the sale, manufacture, or distribution of
apparel and apparel-related items, including, without limitation, all apparel
items, shoes, cosmetics, toiletries and fragrances and any other products
worldwide, male or female, adult and child (the "RIGHTS").
The parties hereby agree as follows, such agreement to become effective
at the Closing:
1. At the Closing,
(a) Forecast and Xxxxxx will transfer the Rights and the
Trademarks to New Sassco by the execution and delivery of appropriate
instruments of transfer satisfactory to New Sassco (but providing for no other
warranties than are provided in this agreement).
(b) As the purchase price for the Rights,
(i) New Sassco will pay Forecast $6 million by wire
transfer or bank cashier's or certified check to the order of Forecast.
(ii) (A) As used in this Section (ii) the following
definitions shall apply:
"INCOME FROM LICENSES" - means (x) all income received by New Sassco,
LicenseCo or any of their affiliates, subsidiaries or related entities from
licenses of the Rights (INCLUDING any of the Reserved Licenses which may be
assigned to LicenseCo or licenses for products which were the subject of any
expired or terminated Reserved License, but EXCLUDING income from New Sassco
Reserved Rights) LESS (y) Promotional Costs.
2
"NEW SASSCO RESERVED RIGHTS" - means (x) Rights with respect to the
license or manufacture of women's apparel, namely suits, dresses and sportswear
in all female sizes (other than for girls or children) but not jeans, coats,
activewear, underwear, rainwear, lingerie, robes, pajamas, scarves, gloves,
hats, bags, shoes, jewelry, and perfumes; and (y) rights to operate stores whose
name includes the name "Xxxxxx" and which sells women's apparel an d other
products.
"PROMOTIONAL COSTS" - means LicenseCo's costs and expenses of
promoting, registering, executing and implementing LicenseCo's licenses of the
Rights, or defending and enforcing the Rights with respect to such licenses,
INCLUDING, without limitation, related accounting and attorney's fees and
marketing consultant fees as provided in paragraph 2 below. Promotional Costs
shall NOT INCLUDE costs or expenses applicable to any of the New Sassco Reserved
Rights or amounts payable to Xxxxxxx Xxxxxx under the Employment, Consulting and
Non-Competition Agreement referred to in (e) below.
(B) New Sassco will pay Forecast 50-06 of
the Income from Licenses. If New Sassco elects to exercise any of the Rights
(other than New Sassco Reserved Rights) itself or to license a subsidiary,
affiliate or related entity rather than an unrelated third party to manufacture
a product available for licensing through New Sassco, there will be credited to
Income from Licenses a "Normal Royalty" based on sales of that product. The
amount or percentage of the "NORMAL ROYALTY" shall be determined in accordance
with prevailing standards in the market for licenses of such scope and licensor
responsibilities. If Forecast and New Sassco are unable to agree on the
appropriate royalty, they shall submit the matter to be resolved by an
arbitrator selected jointly by them or their representatives. Payment of amounts
due Forecast shall be-accounted for and remitted quarterly and subject to
adjustment at year-end
3
based on audited figures. Forecast shall have reasonable rights of inquiry and
verification as to underlying data.
(c) New Sassco will grant a security interest to BankBoston,
N.A., as Facility Agent, in all Trademarks that are subject to this Agreement
which security agreement (or a separate related agreement) will provide
expressly that BankBoston will disturb neither (A) the Reserved Licenses nor (B)
the Reserved Licenses License Agreement from New Sassco to Forecast (in the form
previously initialled by the parties) (the "RESERVED LICENSES LICENSE
AGREEMENT"). New Sassco will deliver to Forecast a copy of the security
agreement (and any such related non-disturbance agreement) with BankBoston.
(d) upon acquiring the Rights, New Sassco will grant the
following licenses:
(i) the "Reserved Licenses License Agreement" to
Forecast.
(ii) A license to LicenseCo in the form previously
initialled by the parties under which LicenseCo may sublicense some or all of
the Rights other than New Sassco Reserved Rights to the extent not licensed
under the Reserved Licenses. Any such sublicense shall contain quality control
provisions designed to preserve the goodwill, reputation for high quality and
prestige associated with the Xxxxxx name.
(e) Xxxxxxx Xxxxxx and New Sassco shall enter into an
Employment, Consulting and Non-Competition Agreement in the form previously
initialled by the parties.
2. A trademark or marketing consultant, mutually satisfactory to
Xxxxxxx Xxxxxx and New Sassco, will be retained by New Sassco for the purposes
of making recommendations and implementing a program for the mutually beneficial
exploitation of licensing
4
opportunities for the Trademarks. The parties shall cooperate for their mutual
benefit in the development of a licensing program for the Trademarks.
3. Xxxxxxx Xxxxxx and Forecast, jointly and severally, represent
and warrant to New Sassco that:
(i) To the best of their knowledge, Exhibit B
contains a complete and accurate listing of all marks, applications and
registrations owned by them relating to the use of the name "Xxxxxx" in any
connection. Exhibit A contains a complete and accurate listing of all Reserved
Licenses insofar as the information is known to Xxxxxxx Xxxxxx and Forecast.
(ii) Neither of them has sold, licensed or otherwise
disposed of any right held by them relating to the use of the name "Xxxxxx" in
any connection, except for the Xxxxxx Xxx Licenses and Reserved Licenses.
(iii) Their rights in respect of the- name or
trademark "Xxxxxx" granted in the Xxxxxx Xxx Licenses and Reserved Licenses were
(as of the effective dates thereof) sufficient to confer the right to use said
name or trademark as provided in said licenses and they do not know of any facts
or circumstances impairing the rights of Xxxxxxx Xxxxxx and/or Forecast to grant
the rights, or a licensee to use such rights, for the uses provided in said
licenses or of any conflicting rights or claim to use the name "Xxxxxx" for
apparel items, shoes, cosmetics, toiletries and fragrances worldwide, men and
women, adult and child in any geographical market. New Sassco acknowledges that
this representation is based on information which has heretofore been obtained
by Xxxxxxx Xxxxxx and Forecast, as well as Xxxxxxx Xxxxxx'x and Forecast's
present knowledge, and that no new search has been made by them.
5
4. (a) Xxxxxx and Forecast will promptly execute and deliver
such-further instruments and documents, and take such further actions, as New
Sassco may reasonably request in order to effectuate, confirm and perfect the
transfer of the Trademarks and the Rights to New Sassco and its rights to own,
use and register the Trademarks and the Rights to the extent provided in this
Agreement.
(b) All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally, or when
sent by fax if during normal business hours and confirmed by mailing, or three
(3) business days after mailing by prepaid registered or certified mail, return
receipt requested, to the parties at the following addresses (or at such other
address as a party may specify by notice to the other):
(i) If to Xxxxxx and/or Forecast TO:
c/o Camhy, Xxxxxxxxx & Xxxxx LLP
0000 Xxxxxxxx
00xx xxxxx
Xxx Xxxx, XX 00000-0000
Att: Xxxxxxx Xxxxx, Esq.
(ii) If to New Sassco to:
00 Xxxxx Xxx
Xxxxxxxx, XX 00000
Att: President
with a copy to:
(A) Xxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxx
0xx xxxxx
Xxx Xxxx, XX 00000
6
(B) Xxxxx X. Xxxx, Esq.
Bachner, Tally, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
(c) This Agreement shall benefit and bind the parties and
their respective successors, assigns, personal representatives and heirs,
contains a complete statement of all the arrangements among the parties with
respect to its subject matter, supersedes all existing agreements among them
concerning its subject matter (including but not limited to the Xxxxxx Xxx
Licenses), cannot be changed or terminated orally, and shall be governed by and
construed in accordance with the law of the State of New York applicable to
agreements made and to be performed in New York.
SASSCO FASHIONS, LTD.
By /S/ XXXXXX X. XXXXXX
-------------------------
/S/ XXXXXXX XXXXXX
-------------------------
XXXXXXX XXXXXX
FORECAST DESIGNS, INC.
By /S/ XXXXXXX XXXXXX
-------------------------
ASL/K LICENSING CORP.
By /S/ XXXXXX X. XXXXXX
-------------------------
EXHIBIT "A"
LIST OF RESERVED LICENSES
1. Licensee: Peerless Clothing International, Inc.
Date: 06/30/92, amended 10/26/92
Licensed Goods: Men's suits, xxxxxxxxxx, xxxxx, xxxxxxx shorts,
tuxedos
Territory: U.S., Canada (the xxxx in Canada is sublicensed to
Peerless Clothing, Inc.), Mexico; Licensee has a
Right of First Refusal in the rest of the world
Last Possible Expiration December 31, 2012
Date:
2. Licensee: Elite Formal Accessories, Inc.
Date: 01/01/94
Licensed Goods: Men's formal wear accessories; formal ties,
cummerbunds, vests, suspenders, pocket
handkerchiefs
Territory: U.S. and duty free shops
Last Possible Expiration June 30, 1997
Date:
3. Licensee: Xxxxxx Xxxxxxxxx & Sons, Inc.
Date: 02/19/93
Licensed Goods: Men's overcoats (excl. raincoats)
Territory: U.S.
Last Possible Expiration December 31, 1999
Date:
4. Licensee: Isaco International Corp.
Date: 02/01/93, additional License (re: men's socks)
granted September 1993
Licensed Goods: Men's ties, socks; Licensee has a Right of First
Refusal for men's loungewear
Territory: U.S. and duty free shops
Last Possible Expiration June 30, 2005
Date:
5. Licensee: Xxxx Xxxxxxx Copr.
Date: 01/01/94
Licensed Goods: Men's dress shirts for business & informal wear
Territory: U.S., Canada and duty free shops
Last Possible Expiration December 31, 2002
Date:
6. Licensee: Xxxxxx Footwear Corp.
Date: 12/01/94
Licensed Goods: Women's daytime & evening shoes
Territory: U.S.
Last Possible Expiration May 31, 2001
Date:
7. Licensee: MDP Designs Ltd.
Date: 02/01/95
Licensed Goods: Women's wool coats, short jacket coats
Territory: U.S. and duty free shops
Last Possible Expiration December 31, 1999
Date:
8. Licensee: Swaxx Corp. (d/b/a Collezione)
Date: 10/01/94
Licensed Goods: Men's cloth & leather outerwear (excl. overcoats,
topcoats and raincoats)
Territory: U.S.
Last Possible Expiration December 31, 2000
Date:
9. Licensee: TR Clothing Enterprises Inc.
Date: 12/16/93
Licensed Goods: Women's wool coats
Territory: U.S. and duty free shops
Last Possible Expiration December 31, 2000
Date:
10.Licensee: Whaling Mfg. Co., Inc.
Date: 12/00/92
Licensed Goods: Men's raincoats (excl. overcoats)
Territory: U.S.
Last Possible Expiration December 31, 2004
Date:
11.Licensee: Whaling Mfg. Co., Inc.
Date: 09/01/94
Licensed Goods: Women's rainwear and poly-filled outerwear
Territory: U.S.
Last Possible Expiration December 31, 2000
Date:
12.Licensee: Xxxxx USA Alba Sales Associates
Date: 02/03/97
Licensed Goods: Women's dress line and women's designer separates
Territory: Worldwide
Last Possible Expiration December 31, 2009
Date:
13.Licensee: Wearwolf Group Ltd.
Date: May 1, 1996
Licensed Goods: Men's raincoats
Territory: U.S., duty free shops and Canada
Last Possible Expiration September 30, 2001
Date:
EXHIBIT "B"
THE "XXXXXX" TRADEMARKS
COUNTRY XXXX APP./REG. NO. DATE INT'L CLASS
USA XXXXXX 1,070,795 08/02/77 42
USA XXXXXX 1,162,830 07/28/81 25
Canada XXXXXX 715,144 10/20/92
UK XXXXXX FOR ASL 1,430,616 06/25/90 25
========= ================= =========== ============== ===========
In addition to the foregoing, the Trademarks include (a) any and all
other marks, registrations and applications consisting of or containing the term
XXXXXX which are owned by Xxxxxxx Xxxxxx, Forecast Designs, Inc., The Xxxxxx Xxx
Companies, Inc., Xxxxxx Xxx Licensing Corp., or any of their respective
affiliates; and (b) all of the following marks, and the registrations and
applications thereof, which are owned by Xxxxxxx Xxxxxx, Forecast Designs, Inc.,
The Xxxxxx Xxx Companies, Inc., or any of their respective affiliates:
1. Xxxxxx for ASL
2. Kasper II
3. Xxxxxx for ASL Petite
4. Xxxxxx and Company
4a. Xxxxxx and Company Petite
5. Xxxxxx Dress
5a. Xxxxxx Dress Petite
