EXHIBIT 10.9
TRADEMARK SUBLICENSE AGREEMENT
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THIS TRADEMARK SUBLICENSE AGREEMENT made this 14th day of April, 1997 by
and between XXXXXXX SHOE COMPANY INC. ("Xxxxxxx"), a Delaware corporation, and
SLJ RETAIL LLC, a Delaware limited liability company (the "Company")
RECITALS:
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X. Xxxxx Investment Co., Inc. ("Xxxxx") is the owner and registrant of the
trademarks and subsisting registrations for the trademarks "Xxxxx New York" and
"Xxxxx New York Sport", registered in the United States Patent and Trademark
Office and the Registrar of Trademarks of Canada.
X. Xxxxxxx and Xxxxx are parties to a License Agreement dated as of July 1,
1993, as amended by First Amendment to License Agreement dated as of October 2,
1995 and Second Amendment to License Agreement dated as of April 14, 1997 (the
"Xxxxx New York Trademark License"), pursuant to which Xxxxx has granted a
license to Xxxxxxx to use Xxxxx' trademarks "Xxxxx New York" and "Xxxxx New York
Sport" in connection with such goods as are identified therein and has permitted
Xxxxxxx to grant the sublicense under this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing and
of the mutual covenants contained herein, and intending to be legally bound
hereby, agree as follows:
I. DEFINITIONS
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As used in this Agreement, the following terms and phrases shall have the
following meanings:
1.1 Annual Period. The period from commencement of the Term through January
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31, 1998 and each consecutive twelve (12) month period thereafter during the
Term.
1.2 Approval or Approved. The approval by Xxxxxxx of one or more designs,
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samples, items of Signage and Packaging, advertising or promotional materials or
other items for which approval is required under this Agreement, in writing in a
document which identifies the item or items approved and is signed by an
authorized representative of Xxxxxxx. Xxxxxxx shall be deemed to have Approved
any item submitted to it by the Company for Approval under the terms of this
Agreement, if Xxxxxxx fails to approve, disapprove or otherwise definitively
respond to the submission in writing within fourteen (14) days after receipt of
the items submitted. The Company acknowledges that Xxxxx has certain approval
rights under this Agreement and hereby consents to such rights.
1.3 Contribution Agreement. The Contribution Agreement dated as of April ,
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1997, by and among The Xxxxxx Group, Inc., a Delaware corporation, Xxxxxxx and
Xxxxxxx Retail Inc.,
a Delaware corporation ("Xxxxxxx Retail"). Capitalized terms used in this
Agreement and not otherwise defined herein will have the definitions set forth
in the Contribution Agreement, unless otherwise clearly indicated to the
contrary herein.
1.4 Xxxxx New York Trademarks. Xxxxx' trademarks "Xxxxx New York" and
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"Xxxxx New York Sport", individually or collectively, as the case may be.
1.5 Xxxxx Products. The items of women's footwear merchandise bearing,
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incorporating or embodying the Xxxxx New York Trademarks and intended for use in
the conduct of the Company's retail women's footwear business.
1.6 Net Sales. Retail sales of Xxxxx Products generated by the Retail
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Stores, less returns and allowances and sales taxes.
1.7 Required Members. Required Members has the meaning set forth in the
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Operating Agreement.
1.8 Retail Stores. Collectively, Mall Specialty Footwear Stores and
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Retail Outlet Footwear Stores.
1.9 Signage and Packaging. All signs, tags, labels, cartons or containers
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and packing or wrapping material used or to be used by the Company in connection
with the merchandising and retail sale by the Company of Xxxxx Products in the
Retail Stores.
1.10 Royalties. The royalties to be paid by the Company directly to Xxxxx
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for or in connection with the sublicense to use the Xxxxx New York Trademarks
granted under this Agreement, provided for in Article III and all other
applicable portions of this Agreement.
1.11 Term. The Initial Term and any renewal term of this Agreement,
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provided for and defined in Article VIII, taken collectively.
1.12 Termination Inventory. The inventory provided of Xxxxx Products and
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of Signage and Packaging and advertising and promotional material on hand at the
time of the termination of this Agreement.
1.13 Termination Inventory Schedule. The written schedule provided for in
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Paragraph 8.5 of the Termination Inventory.
1.14 Territory. The geographical area consisting of the United States.
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II. SUBLICENSE
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2.1 Grant of Sublicense. Xxxxxxx hereby grants to the Company a
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sublicense throughout the Territory to use the Xxxxx New York Trademarks in
connection with the manufacturing, advertising, merchandising, promotion and
retail sale of Xxxxx Products in Retail Stores operated by the Company in the
Territory. The sublicense granted herein extends only to
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the Xxxxx Products and Signage and Packaging of Xxxxx Products in the Retail
Stores in the Territory and uses expressly provided for in this Agreement, and
the Company shall not use or attempt to use the Xxxxx New York Trademarks on any
other products or goods in any other area or any other manner whatsoever. The
Company and Xxxxxxx acknowledge that the rights of the Company to utilize the
Xxxxx New York Trademarks shall be no greater than those rights granted to
Xxxxxxx to utilize the Xxxxx New York Trademarks pursuant to the Xxxxx New York
Trademark License. The Company agrees the women's footwear it sells in the
Retail Stores it operates under the "Xxxxx New York" name ("Xxxxx New York
Stores") pursuant to the terms of this Agreement shall be Xxxxx Products. In
addition, should the Company sell non-footwear merchandise in Xxxxx New York
Stores, the Company agrees to use its best efforts to purchase non-footwear
merchandise bearing the Xxxxx New York Trademarks, provided such non-footwear
merchandise is available under the Xxxxx New York Trademarks. Xxxxx shall
Approve any non-Xxxxx New York Trademark branded merchandise which the Company
sells in the Xxxxx New York Stores. In any event, no less than eighty-five (85%)
percent of the Company's Net Sales derived from each Xxxxx New York Store during
any Annual Period shall relate to merchandise which bears the Xxxxx New York
Trademarks.
2.2 Resolution of Conflicts. The Company recognizes that Xxxxx has
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granted, and may in the future grant, licenses to other parties to use the Xxxxx
New York Trademarks in connection with the retail sale of wearing apparel,
accessories or related items. If the Company or any other licensee of the Xxxxx
New York Trademarks under any other such license notifies Xxxxx of an existing
or potential conflict in the definition of the merchandise covered by, or the
rights of the licensee under, their respective licenses and license agreements,
Xxxxx shall endeavor to deal with the issue by discussions with authorized
representatives of the affected parties, and the Company shall cooperate in all
reasonable respects in any such efforts. Xxxxx may at any time determine
finally to resolve any such conflict by written notice of its determination and
resolution to the affected licensee, and all such determinations shall be final
and binding upon the Company.
2.3 Reservation of Rights. Xxxxxxx reserves all rights it has pursuant to
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the Xxxxx New York Trademark License, as amended, except as specifically granted
and sublicensed to the Company under this Agreement.
III. ROYALTIES
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3.1 Percentage Royalty.
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3.1.1 In consideration of the sublicense granted and the services to
be performed by Xxxxxxx under this Agreement and subject to Guaranteed Minimums,
the Company shall pay directly to Xxxxx Royalties equal to (a) two and one-half
(2.5%) percent of Net Sales of Xxxxx Products from the commencement of this
Agreement through and including January 31, 1998, and (b) three (3%) percent of
the Net Sales of all Xxxxx Products thereafter, all in accordance with all the
terms and conditions of this Agreement. In order to secure the Royalty payment
obligations of the Company under this Agreement, the Company agrees to open a
clean irrevocable letter of credit in favor of Xxxxx issued by a bank or other
financial institution reasonably acceptable to Xxxxx in an amount equal to
$350,000 no later than the first opening of a Xxxxx New York Store.
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3.1.2 The Company shall be obligated to pay and account for Royalties
for all Xxxxx Products sold, even if the Xxxxx Products improperly bear the
Xxxxx New York Trademarks or the applicable transaction is otherwise in breach
or violation of the terms of this Agreement; provided that this subparagraph
3.1.2 shall not be considered to authorize such transactions and that the
payment or obligation to pay Royalties for such transactions shall not in any
manner limit Xxxxxxx'x right to terminate this Agreement or to exercise any
other right or remedy that Xxxxxxx may have as a result of the breach of this
Agreement by such transactions.
3.2 Payment and Periodic Reports. Royalties shall be paid, without set-
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off or deduction for any reason, and accounted for monthly, commencing with a
report for the month ending July 31, 1997, within twenty-five (25) days after
the end of each month. At the time each Royalty payment is due, the Company
shall deliver to Xxxxx a statement signed and certified as accurate by the
Company's chief financial officer or by another officer or official of the
Company, approved by Xxxxx in advance in writing, accounting for the Net Sales
and Royalties for the applicable month. Such statement shall show the total
amount of gross sales of all Xxxxx Products sold during the month; an itemized
list of any amounts which may, under this Agreement, be deducted from gross
sales for computing Net Sales; a computation of the amount of Royalties payable
on account of the Net Sales for the month; and such other information as Xxxxx
may reasonably require. Xxxxx may, at any time, provide the Company with a
standardized form for accounting for Royalties and the Company shall use any
such form for the statements under this paragraph. The statements provided for
in this paragraph shall be furnished to Xxxxx whether or not the Company has
sold any Xxxxx Products during the month for which the statement is due. The
Company shall provide to Xxxxxxx a copy of any report delivered to Xxxxx
pursuant to this paragraph.
3.3 Annual Reports. Not later than forty-five (45) days after the end of
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each Company fiscal year, the Company shall deliver to Xxxxx a statement, signed
and certified by the Company's then regularly engaged independent certified
public accountant (or, if the Company has no such regular engagement, by a
reputable independent certified public accountant) stating for the Annual Period
the information required in the monthly statement under Paragraph 3.2 and such
other information as Xxxxx may reasonably request within a reasonable time prior
to the date on which the statement is due. The Company shall provide to Xxxxxxx
a copy of any report delivered to Xxxxx pursuant to this paragraph.
3.4 Books and Records and Audit.
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3.4.1 The Company shall prepare and maintain, in accordance with
generally accepted accounting principles consistently applied, complete and
accurate books of accounts and records covering all transactions arising out of
or relating to this Agreement, which books and records shall at least be in
sufficient detail to permit Xxxxx to monitor compliance by the Company with all
of its obligations under this Agreement. Xxxxx and its duly authorized
representatives shall have the right, upon five (5) days prior written or oral
notice, during regular business hours, throughout the Term and for two (2) years
thereafter, to audit such books of account and records and to examine all other
documents and materials in the Company's possession or control relating to this
Agreement and the Company's performance hereunder. The Company shall maintain
such books of account, records and documents and material available for Xxxxx
for at least two (2)
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years after the termination of this Agreement. Except as provided in
subparagraph 3.4.2, any audit under this paragraph shall be at Xxxxx' expense.
3.4.2 If any audit of the Company's books and records by Xxxxx under
subparagraph 3.4.1 discloses that the payments made by the Company to Xxxxx
during the period covered by the audit were up to four (4%) percent less than
the payments that should have been made under this Agreement, the Company shall
pay the deficiency, plus interest at a rate equal to two (2%) percent above the
rate announced by Citibank as its "Prime Rate", within fourteen (14) days after
demand therefor by Xxxxx. If an audit shows that the amount paid by the Company
was more than four (4%) percent less than the amount which should have been
paid, the interest payable shall be at a rate of five (5) percentage points
above such Prime Rate and the Company shall, in addition, reimburse Xxxxx for
all reasonable costs of the audit within thirty (30) days after demand by Xxxxx.
IV. PERFORMANCE
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4.1 Performance Standards.
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4.1.1 Throughout the Term, the Company shall use all reasonable
efforts and cause its officers, employees, agents and contractors to use their
reasonable efforts to sell at retail the Xxxxx Products, promote business for
the Xxxxx Products and enhance the value and reputation of the Xxxxx New York
Trademarks, consistent with good business practices and the high standards and
prestige represented by the Xxxxx New York Trademarks.
4.1.2 In the use of the Xxxxx New York Trademarks and all other
aspects of the performance of this Agreement, the Company shall at all times
comply in all material respects with all applicable laws and regulations
including, without limitation, all laws and regulations related to the sale,
labeling, Signage and Packaging and advertising of Xxxxx Products sold within
the Territory.
4.2 Abandonment. If the Company shall fail to use the Xxxxx New York
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Trademarks in the retail sale of Xxxxx Products within any period of six (6)
consecutive months or if the Company shall, with the consent of the Required
Members, determine or state its intention to cease so to use the Xxxxx New York
Trademarks, the Company shall be deemed to have abandoned the use of the Xxxxx
New York Trademarks, and Xxxxxxx or Xxxxx may at any time thereafter terminate
this Agreement by written notice under subparagraph 8.2.1. The parties
acknowledge that the abandonment of the use of the Xxxxx New York Trademarks by
the Company will irreparably damage the Company's capacity to use the Xxxxx New
York Trademarks under the terms of this Agreement and, for purposes of
termination under Article VIII, abandonment of the use of the Xxxxx New York
Trademarks under this paragraph shall be deemed not curable.
4.3. Quality.
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4.3.1 The Signage and Packaging and sales and promotional materials
for the Xxxxx Products shall at all times be of high quality, and the Xxxxx
Products shall at all times be promoted in a manner appropriate for the high
quality of the Xxxxx Products.
4.3.2 Xxxxxxx and Xxxxx and their duly authorized representatives
shall have the right, during normal business hours upon reasonable advance
notice, to inspect any facility used by the Company in connection with the
retail sale or production of Signage and Packaging or advertising or promotional
material in order for Xxxxxxx and Xxxxx to monitor the quality of the Xxxxx
Products and Signage and Packaging and promotional materials and the Company's
compliance with all other terms of this Agreement which relate to such
manufacture and production.
4.4 Approvals. The Company shall not in any aspect of its performance
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under this Agreement use any items of Signage and Packaging or advertising or
promotional materials for Xxxxx Products which both Xxxxxxx and Xxxxx have not
Approved to the extent required under the terms of this Agreement. Xxxxxxx'x or
Xxxxx' Approval or disapproval of any item or matter for purposes of this
Agreement may be based solely on Xxxxxxx'x or Xxxxx' subjective standards and
Approval may be given or withheld in either Xxxxxxx'x or Xxxxx' sole discretion,
provided that Xxxxxxx and Xxxxx shall each act in good faith.
V. DESIGNS AND PACKAGING
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5.1 Designs. Xxxxxxx, Xxxxx and the Company shall cooperate in such
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manner as the Company may reasonably request in the development and creation of
Signage and Packaging and advertising and promotional materials relating to the
retail sale of Xxxxx Products. All designs, styles, patterns, photographs or
written ideas for Xxxxx Products provided by Xxxxxxx to the Company for purposes
of this Agreement shall be the exclusive property of Xxxxxxx, and the Company
shall not use any of the foregoing except for the retail sale and advertising
and promotion of Xxxxx Products in accordance with the terms of this Agreement.
5.2 Signage and Packaging. The Company shall submit to Xxxxxxx and Xxxxx
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for Approval samples of all tags, labels and other items of Signage, Packaging
and store design concepts within a reasonable time prior to the commencement of
the production and utilization of such items for use with Xxxxx Products.
Xxxxxxx shall not unreasonably require the Company materially to change labels,
tags or other significant items or Signage and Packaging from collection to
collection.
5.3 Continuing Inspection. Upon Xxxxxxx'x or Xxxxx' request at any time
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and from time to time, the Company shall submit to Xxxxxxx and Xxxxx a
reasonable number of production samples of items of Signage and Packaging
material in order for Xxxxxxx and Xxxxx to monitor production in accordance with
Xxxxxxx'x and Xxxxx' Approvals, quality standards and other requirements of this
Agreement. If Xxxxxxx or Xxxxx notifies the Company in writing of the
disapproval of any such production sample, the Company shall immediately take
such action as may be necessary for the item to meet Xxxxxxx'x or Xxxxx'
Approval and cease production and
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distribution and sale of the item pending Approval. Neither Xxxxxxx nor Xxxxx
shall unreasonably disapprove any production sample under this paragraph.
VI. TRADEMARK AND TRADEMARK PROTECTION
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6.1 Ownership.
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6.1.1 The Company acknowledges that Xxxxx is the owner of all right,
title and interest in and to the Xxxxx New York Trademarks in any form or
embodiment and is also the owner of the good will attached or which shall become
attached to the Xxxxx New York Trademarks in connection with the business and
goods in relation to which the same has, is or shall be used. Sales by the
Company shall be deemed to have been made for purposes of trademark
registration, and all uses of the Xxxxx New York Trademarks by the Company shall
inure to the benefit of Xxxxx.
6.1.2 At Xxxxxxx'x request, the Company shall execute any documents,
including registered users agreements, required of Xxxxxxx by Xxxxx under the
terms of the Xxxxx New York Trademark License to confirm Xxxxx' ownership of all
rights in and to the Xxxxx New York Trademarks in the Territory and the
respective rights of Xxxxxxx and the Company under this Agreement. The Company
shall cooperate in all reasonable respects with Xxxxxxx in connection with
Xxxxxxx'x obligations under the Xxxxx New York Trademark License relating to the
filing and prosecution by Xxxxx of applications in Xxxxx' name relating to the
use of the Xxxxx New York Trademarks for Xxxxx Products in the Territory.
6.1.3 The Company shall never challenge or encourage anyone to
challenge Xxxxx' ownership or the validity of the Xxxxx New York Trademarks or
any application for registration thereof or any trademark, copyright or other
registration thereof or any rights of Xxxxx therein.
6.2 No Adverse Acts. The Company shall not, at any time or in any manner,
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engage in any activity or do or permit any act within its control which may in
any way adversely affect any rights of Xxxxx or Xxxxxxx to the Xxxxx New York
Trademarks or any registrations or applications for registration thereof or
which may directly or indirectly reduce the value of the Xxxxx New York
Trademarks or derogate or detract from their repute.
6.3 No Secondary Xxxxx New York Trademarks. The Company shall not use any
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other trade names, trademarks or other designations (other than the Company's
own limited liability company name or trade name), except as shall be Approved
by Xxxxxxx and Xxxxx, in connection with the Xxxxx New York Trademarks in any
advertising, publicity, labeling, Signage and Packaging or printed matter
utilized by the Company in connection with the Xxxxx Products. Except as shall
be Approved by Xxxxxxx and Xxxxx, the Company shall not join the Xxxxx New York
Trademarks with any other names or marks to form a new xxxx and shall not itself
use the Xxxxx New York Trademarks as a corporate name or trade name or in any
other manner other than in connection with the retail sale and promotion of
Xxxxx Products under this Agreement. Notwithstanding the foregoing, the Company
may, subject to the provisions of Paragraph 1.2,
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place the words "Marketed by SLJ" on any trade advertisement regarding the Xxxxx
Products and on business cards, stationery and invoices of the Company.
6.4 Trademark Notices. The Company shall cause the designation "R" to
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appear immediately after, on the upper right, of the Xxxxx New York Trademarks
on all Signage and Packaging and advertising and promotional material and shall,
in addition, cause to appear on all Signage and Packaging and advertising and
promotional materials and on all forms, invoices, stationery, business cards and
other documents and materials of any kind bearing the Xxxxx New York Trademarks
such designations, legend, or markings or notices as may be necessary, or as
Xxxxxxx may reasonably require, to give notice of the status of the Xxxxx New
York Trademarks.
6.5 Copyrights. Any copyright relating to Xxxxx Products that may be
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created by statute, common law or otherwise in any design, sketch, print,
Signage and Packaging or similar matter created by the Company shall be the sole
property of Xxxxx. The Company shall take such action as may be necessary or as
Xxxxx may reasonably require, at Xxxxx' expense, to confirm, preserve or protect
such copyright, including placing of copyright notices on the appropriate items.
The Company shall not claim for itself or for any party other than Xxxxx'
copyrights in any such items and shall not file or attempt to file any copyright
registrations therefor.
VII. WARRANTIES, INDEMNIFICATION AND INFRINGEMENT
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7.1 Warranties.
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7.1.1 Xxxxxxx represents and warrants to the Company that Xxxxxxx has
the full right, power and authority to enter into this Agreement and to grant
the rights, sublicenses and privileges granted by Xxxxxxx hereunder to the
Company and to perform all of Xxxxxxx'x obligations hereunder.
7.1.2 The Company represents to Xxxxxxx that the Company has the full
right, power and authority to enter into this Agreement and to perform all of
its obligations hereunder.
7.2 Indemnification by Xxxxx. Xxxxx shall indemnify, defend and hold
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harmless the Company from and against any and all claims, causes of actions,
suits, damages and expenses (including reasonable attorneys' fees and expenses)
arising out of any claim that the Company's use of the Xxxxx New York Trademarks
in accordance with the terms of this Agreement constitutes an infringement of
any trademark rights of any third party within the Territory, upon the Company
giving Xxxxx prompt written notice and authority and an opportunity to undertake
and fully conduct the defense thereof and out of the breach by Xxxxx of any
provision of this Agreement or of any of Xxxxx' duties hereunder or the acts or
omissions of Xxxxx or any of its servants, agents, employees or contractors in
connection with the performance of this Agreement.
7.3 Indemnification by the Company and Insurance.
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7.3.1 The Company shall indemnify, defend and hold harmless Xxxxxxx
and Xxxxx from and against any and all claims, causes of action, suits, damages
and expenses (including reasonable attorneys' fees) which Xxxxxxx or Xxxxx may
incur or for which it may
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become liable or required to pay by reason of any defect or alleged defect in
any Xxxxx Products, except for defects attributable to designs or patterns
supplied or created by Xxxxxxx; the breach by the Company of any provision of
this Agreement or of any of the Company's duties hereunder; or the acts or
omissions of the Company or of any of its servants, agents, employees or
contractors in connection with the performance of this Agreement (excluding
matters covered by Paragraph 7.2).
7.3.2 The Company shall, at its own expense, obtain and maintain
throughout the Term in full force and effect with an insurance carrier
reasonably acceptable to Xxxxxxx and Xxxxx, (i) products liability insurance
with a limit of liability of not less than $1,000,000 insuring against, without
limitation, all damages, profits, interest, attorneys' fees, costs and expenses
arising out of any suit or legal proceeding, claim or demand resulting from a
defect or alleged defect in any item of Xxxxx Products or out of the use or
condition of an item of Xxxxx Products, and (ii) general liability insurance for
each Xxxxx New York Store location in an amount of not less than $1,000,000.
Such insurance policy shall name Xxxxxxx and Xxxxx as co-insureds and shall
provide for at least thirty (30) days advance written notice to Xxxxxxx and
Xxxxx before cancellation or substantial modification. The Company shall
promptly deliver a certificate of such insurance to Xxxxxxx and Xxxxx and, if
Xxxxxxx or Xxxxx so requests, a copy of the policy for such insurance. The
obligation of this subparagraph with respect to insurance shall not be deemed to
limit in any manner the indemnification obligations of the Company under
subparagraph 7.3.1.
7.4 Infringements. The Company shall promptly notify Xxxxxxx and Xxxxx in
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writing of any known or suspected infringements of any of the Xxxxx New York
Trademarks or of any copyright or other rights or property of Xxxxxxx or Xxxxx,
promptly after the same comes to the Company's attention. Xxxxx shall have the
sole and exclusive right to take action or institute proceedings with respect to
such infringement, and shall proceed as it may, in its sole discretion, deem
appropriate or desirable. The Company shall cooperate in any action or
proceeding by Xxxxx at Xxxxx' expense with respect to an infringement or
suspected infringement in such manner as Xxxxx may reasonably request.
VIII. TERM AND TERMINATION
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8.1 Term. Subject to Xxxxxxx'x rights under the Xxxxx New York Trademark
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License, the initial term of this Agreement (the "Initial Term") shall begin
upon execution of this Agreement and end on December 31, 2002, subject to
earlier termination as provided in this Agreement. In addition, the Term of this
Agreement shall be extended automatically, and without any further action by
either the Company or Xxxxxxx, in the event (and for the same period of time)
Xxxxxxx exercises any renewal option pursuant to the Xxxxx New York Trademark
License.
8.2 Termination.
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8.2.1 Xxxxxxx or Xxxxx may terminate this Agreement, effective
immediately upon giving the Company written notice of termination, if (i) the
Company fails to make any payment due to Xxxxx under this Agreement when such
payment is due and continues such failure uncured for fifteen (15) days after
written notice thereof from Xxxxx to the Company, (ii) the
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Company fails two (2) or more times during any Annual Period during the Term to
make any payment due to Xxxxx within fifteen (15) days after such payment is
due, without regard to any notice of such failure from Xxxxx, (iii) the Company
abandons the Xxxxx New York Trademarks, as provided in Paragraph 4.2, (iv) the
Company has commenced liquidation or dissolution proceedings, (v) the Company
ceases, or with the consent of the Required Members admits its intention to
cease, the retail sale of Xxxxx Products or the conduct of its business in the
ordinary course, (vi) the Xxxxx New York Trademark License is terminated for any
reason, (vii) the Company files a voluntary petition or proceeding in bankruptcy
or under any federal or state bankruptcy or insolvency or other law for the
relief of debtors; consents to the appointment of a receiver, custodian or
liquidator for a portion of its business or property; has filed against it and
not dismissed within forty-five (45) days an involuntary proceeding under any
federal or state bankruptcy or insolvency or other law for the relief of debtors
or for the appointment of a receiver, custodian or liquidator; makes an
assignment for the benefit of its creditors, or (viii) the Company defaults on
any obligation secured by a security interest in or other lien or encumbrance
upon the Xxxxx Products, such default continues beyond any period of grace
provided in the document or instrument under which such obligation arose and the
secured party takes any action to commence exercising default remedies with
respect to the Xxxxx Products.
8.2.2 Either Xxxxxxx or the Company with the consent of the Required
Members may terminate this Agreement, effective immediately upon giving the
other party written notice of termination, if (i) the other party breaches or
fails to perform any of the material terms or provisions of this Agreement in a
manner not provided for in subparagraph 8.2.1, in any material respect and such
breach or failure is not curable or, if curable, is not cured within thirty (30)
days after written notice thereof from the non-breaching party or (ii) the other
party files a voluntary petition or proceeding in bankruptcy or under any
federal or state bankruptcy or insolvency or other law for the relief of
debtors; consents to the appointment of a receiver, custodian or liquidator for
a portion of its business or property; has filed against it and not dismissed
within forty-five (45) days an involuntary proceeding under any federal or state
bankruptcy or insolvency or other law for the relief of debtors or for the
appointment of a receiver, custodian or liquidator; makes an assignment for the
benefit of its creditors.
8.3 Termination of Rights.
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8.3.1 Upon the expiration or termination of this Agreement pursuant
to Paragraph 8.2 above, (i) all rights of the Company under this Agreement shall
terminate and automatically revert to Xxxxxxx, (ii) the Company shall
immediately discontinue all use of the Xxxxx New York Trademarks and shall no
longer have any right to use the Xxxxx New York Trademarks or any variation or
simulation thereof in any manner or for any purpose whatsoever, except as
provided in Paragraph 8.5 hereof, (iii) the Company shall transfer to Xxxxxxx by
such documentation as Xxxxxxx may require all registrations, filings,
trademarks, copyrights and other rights with regard to the Xxxxx New York
Trademarks which the Company may have possessed at any time and (iv) subject to
the provisions of Paragraph 8.5 concerning the sale of Termination Inventory,
the Company shall deliver to Xxxxxxx, without charge, all sketches, samples,
designs or other matters relating to Xxxxx Products and all Xxxxx Products,
Signage and Packaging materials and advertising and promotional materials
bearing the Xxxxx New York Trademarks in any form.
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8.3.2 Upon the expiration or termination of this Agreement under
Paragraph 8.2, no trustee in bankruptcy, assignee for the benefit of creditors,
custodian, receiver, sheriff or court officer or other successors to the Company
or its assets or business shall have any right to continue this Agreement or to
use or exploit the Xxxxx New York Trademarks in any manner whatever.
8.3.3 In the event that under the United States Bankruptcy Code or
any amendment or successor thereto (collectively the "Bankruptcy Code"), a
trustee in bankruptcy of the Company or the Company, as bankruptcy debtor,
assumes this Agreement and thereafter proposes to assign this Agreement by an
assignment which fulfills the applicable requirements of the Bankruptcy Code,
the trustee or the Company shall notify Xxxxxxx and Xxxxx of the proposed
assignment in advance, in writing, setting forth the name and address of the
proposed assignee, the proposed consideration for the assignment and all other
material terms and details of the proposal. Such notice shall be considered an
offer to Xxxxxxx to have this Agreement assigned to Xxxxxxx or to its designee
for the consideration (or its reasonable equivalent in money) and under the
other material terms in the notice. Xxxxxxx may exercise the option and accept
the offer by giving the trustee or the Company, as appropriate, written notice
of exercise and acceptance within twenty (20) days after Xxxxxxx receives the
notice from the trustee or the Company. If Xxxxxxx fails to give notice and
exercise the option within such twenty (20) day period, such failure shall be
considered an offer to Xxxxx to have this Agreement assigned to Xxxxx or to its
designee for the consideration (or its reasonable equivalent in money) and under
the other material terms in the trustee's notice. Xxxxx may exercise the option
and accept the offer by giving the trustee or the Company, as appropriate,
written notice of exercise and acceptance within twenty (20) days after Xxxxxxx
fails to exercise its option. If Xxxxx fails to give notice and exercise the
option within such twenty (20) day period, the trustee or the Company may
complete the proposed assignment, but only to the party and for the
consideration and under the terms described in the notice.
8.4 Termination Inventory. (a) Within fifteen (15) days after the
---------------------
expiration or termination of this Agreement, the Company shall prepare and
deliver to Xxxxxxx a written inventory, including a complete and accurate
schedule (the "Termination Inventory Schedule") as of the date of expiration or
termination, of all Xxxxx Products on hand or subject to non-cancelable orders
and all Signage and Packaging materials, advertising and promotional materials
and other documents or items that bear the Xxxxx New York Trademarks in any form
in the Company's possession or control or in the process of manufacture for the
Company (the "Termination Inventory"). Xxxxxxx shall have the option to purchase
all or any portion of the items in the Termination Inventory consisting of Xxxxx
Products for a purchase price as the Company (with the consent of the Required
Members) and Xxxxxxx shall negotiate in good faith and to purchase those items
in the Termination Inventory consisting of Signage and Packaging materials set
forth in such notice for a purchase price equal to such price as the Company
(with the consent of the Required Members) and Xxxxxxx shall negotiate in good
faith. If Xxxxxxx elects to exercise such option, then the Company shall deliver
to Xxxxxxx the items in the Termination Inventory to be purchased, within five
(5) days after receipt of Xxxxxxx'x notice exercising its option to purchase,
or, if later, within five (5) days after the Company (with the consent of the
Required Members) and Xxxxxxx have agreed upon a purchase price, and Xxxxxxx
11
shall pay the purchase price in cash within thirty (30) days after receipt of
all items of the Termination Inventory purchased.
(b) If Xxxxxxx does not exercise its option under Paragraph 8.4(a) to
purchase the Termination Inventory within ten (10) days after receipt of the
Termination Inventory Schedule or exercises its option as to a portion of the
Termination Inventory, or if the Company (with the consent of the Required
Members) and Xxxxxxx are unable to agree upon a purchase price for the items in
Termination Inventory to be purchased within fifteen (15) days after the
Company's receipt of Xxxxxxx'x notice, then, for a period of twelve (12) months
thereafter (or such shorter period as the Company and Xxxxxxx may agree) (such
12 month or shorter period being referred to as the "Orderly Liquidation
Period"), the Company may sell Xxxxx Products in the Termination Inventory, on a
non-exclusive basis, in accordance with all the terms of this Agreement.
Royalties for such sales shall be paid and accounted for by the Company within
thirty (30) days after the end of the Orderly Liquidation Period. In such
event, the Company and Xxxxxxx agree that Xxxxxxx shall supervise and manage the
disposition of the Termination Inventory irrespective of whether Xxxxxxx is the
managing member of the Company at such time.
(c) If any Termination Inventory remains unsold after the expiration of the
Orderly Liquidation Period, Xxxxxxx shall have the right and the obligation to
purchase such remaining Termination Inventory at a price equal to sixty (60%)
percent of the capitalized cost of such Termination Inventory to the Company,
determined in accordance with generally accepted accounting principles. The
Company shall deliver to Xxxxxxx the remaining items in Termination Inventory to
be purchased within five (5) days after the end of the Orderly Liquidation
Period and Xxxxxxx shall pay the purchase price therefor in cash within thirty
(30) days after receipt of all items of the Termination Inventory.
(d) The Company shall cause any of its lenders that have a security
interest in or other lien or encumbrance upon any Xxxxx Products, to secure
obligations owing by the Company to such lender, to agree that it will not
foreclose upon its security interest in such Xxxxx Products, and thereby take
ownership thereof or cause such Xxxxx Products to be sold in connection
therewith, so long as Termination Inventory is being disposed of in accordance
with this Paragraph 8.4 and until and unless Xxxxxxx fails to comply with its
obligations set forth in Paragraph 8.4(b) and (c).
8.5 Reservation of Rights. Notwithstanding any termination of this
---------------------
Agreement, each party shall have and hereby reserves all rights and remedies
which are granted or available to it under this Agreement or applicable law, and
termination shall not be deemed to be an exclusive remedy or to limit either
party in any manner from enforcing any other rights or remedies.
8.6 Consent by Licensor. Xxxxx, by its consent hereto, agrees that
-------------------
Xxxxxxx and the Company shall have the right to dispose of the Termination
Inventory in the manner provided in this Article VIII notwithstanding any
termination of the Xxxxx New York Trademark License in accordance with the terms
thereof at any time prior to the purchase of Termination Inventory by Xxxxxxx
pursuant to Paragraph 8.5(c).
12
IX. GENERAL TERMS
-------------
9.1 Confidentiality. The parties acknowledge that all information and
---------------
data which the parties have learned or will learn in connection with this
Agreement and activities and transactions hereunder concerning the business and
operation of the parties and all tangible manifestations of such information and
data including, without limitation, designs, patterns, sketches, business and
marketing plans, customer lists, and financial and operating reports constitute
valuable proprietary confidential information and trade secrets of the parties,
and the parties shall not disclose any such data or information or use any such
data or information for themselves or any other person or entity, except for (i)
disclosure to the parties' attorneys, accountants and other advisors in a
confidential relationship with such party, (ii) disclosures required by law or
judicial process or in response to any summons or subpoena or in connection with
any litigation or (iii) the proper and authorized performance of this Agreement
in accordance with all of the terms hereof.
9.2 Arbitration.
------------
9.2.1 Subject to the provisions of subparagraph 9.2.2, all disputes
arising under this Agreement or the obligations of the parties hereunder shall
be submitted to arbitration in New York, New York before a panel of three
arbitrators, in accordance with the then prevailing Rules for Commercial
Arbitration of the American Arbitration Association. The arbitrators in any
such arbitration shall award costs to the prevailing party and may, but shall
not be required to, award reasonable attorneys' fees. The decision of the
arbitrators shall be final and binding on all parties, except that the
arbitrators shall have no power to vary the terms of this Agreement. Judgment
on the arbitrators' award may be entered in any court in the State of New York
or in any other court of competent jurisdiction.
9.2.2 The parties acknowledge that a breach of this Agreement
involving the improper or unauthorized use of the Xxxxx New York Trademarks or
other matters may give rise to irreparable harm pending the outcome of
arbitration under subparagraph 9.2.1. Accordingly and notwithstanding the
provisions of subparagraph 9.2.1, either party may, upon a breach or threatened
breach of this Agreement, bring an action in a court of competent jurisdiction
and apply therein for temporary or preliminary injunctive or other equitable
relief, pending resort to, and a decision in, arbitration under subparagraph
9.2.1. If otherwise appropriate under applicable law, a court may entertain any
such action and grant injunctive or equitable relief, and the provisions of
subparagraph 9.2.1 providing for arbitration shall not be construed to prevent
the action or relief.
9.3 Assignability.
--------------
9.3.1 Xxxxxxx may assign this Agreement to a wholly-owned subsidiary
of Xxxxxxx that is the successor to the Xxxxx New York Trademark License, if the
successor assumes all of Xxxxxxx'x responsibilities, obligations and liabilities
hereunder.
9.3.2 This Agreement is personal to the Company, and the Company may
not, without the prior written consent of Xxxxxxx, assign, sublicense or
otherwise transfer all or any portion of this Agreement or any rights or
obligations hereunder, whether voluntarily,
13
involuntarily by operation of law or otherwise, and any such attempted
assignment or other transfer shall be null and void and of no effect.
Notwithstanding the foregoing, the Company may assign this Agreement and the
rights hereunder to another entity provided that such entity is controlled by
the same parties which controlled the Company before such assignment and
provided that the Company and its successor/assignee remain liable for all of
its obligations under this Agreement.
9.4 Applicable Law. New York law shall govern the validity, construction,
--------------
interpretation and effect of this Agreement.
9.5 No Agency. Nothing contained in this Agreement shall be deemed or
---------
construed as constituting the parties hereto as partners or joint venturers or
either party as an agent of the other and, without limiting the foregoing,
neither party shall have authority to bind or obligate or to incur any
indebtedness for the other, and no such authority shall be implied.
9.6 Finder's and Broker's Fees. The parties hereby represent and warrant
--------------------------
to each other that each owes no finder's or broker's fees in connection with
this Agreement and that neither has procured same for that purpose.
9.7 Failure to Exercise Rights. The failure of either party to act or
--------------------------
exercise any right under this Agreement, upon the breach of any of the terms
hereof, or otherwise, shall not be construed as a waiver of such breach or as
preventing either party from thereafter enforcing strict compliance with any and
all of the terms hereof.
9.8 Severability. If any provision of this Agreement shall be held to be
------------
invalid or unenforceable, such provision shall be considered severable, and the
remaining provisions of this Agreement shall continue in full force and effect
and shall be valid and enforceable to the fullest extent permitted by law.
9.9 Entire Agreement. This Agreement contains the entire understanding
----------------
between the parties relating to the subject matter hereof, no other
representations or covenants having induced either party to execute this
Agreement. This Agreement and obligations and duties under this Agreement may
not be amended or modified in any manner, in whole or in part, except by a
written agreement or amendment or modification duly executed by the party to be
charged.
9.10 Headings. The Article and paragraph headings of this Agreement are
--------
for convenience of reference only and do not form a part of the covenants, terms
or conditions of this Agreement or give full notice thereof.
9.11 Notices. All notices, reports, statements, exercises of options or
-------
other communications required or permitted under this Agreement shall be in
writing and shall be sufficiently given only if personally delivered; mailed by
registered or certified mail, return receipt requested; sent by overnight
express courier, with written receipt of delivery; or transmitted by telecopier
and confirmed by first class mail within twenty-four (24) hours. All notices
shall be sent or delivered to the following addresses or to such other addresses
as either party may, by notice direct:
14
If to Xxxxxxx: Xxxxxxx Shoe Company Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxxxx 00000
or, if by mail,
X.X. Xxx 00
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to the Company: SLJ Retail LLC
000 Xxxxxxxxxx Xxxxx, Xxxxx X
Xxxxxx, Xxxxxxx 00000
Attn: President
Fax: (000) 000-0000
with copies to: GE Capital Equity Capital Group, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Counsel -- Equity Capital Group
Fax: (000) 000-0000
and
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
If to Xxxxx: Xxxxx Investment Co., Inc.
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
15
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxx Apparel Group, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Notices given by mail shall be deemed given on the second business day after the
date on which they are mailed. All other notices shall be deemed as given on
receipt.
9.12 Counterpart; Fax. This Agreement may be executed in one or more
----------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one and the same instrument. Such execution may be evidenced by
the execution and delivery of signature pages by either party by facsimile
transmission to the other, provided that the original executed signature pages
are contemporaneously delivered by such party to a reputable overnight courier
service for delivery to the other party.
9.13 Third Party Beneficiaries. This Agreement is made solely and
-------------------------
specifically between and for the benefit of the parties hereto, the Members from
time to time of the Company as third party beneficiaries of the rights of the
Company hereunder and their respective successors and assigns (subject to the
express provisions hereof relating to successors and assigns). Except for such
parties, such Members as third party beneficiaries and their respective
successors and assigns, no other Person whatsoever will have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third party beneficiary or otherwise.
16
IN WITNESS WHEREOF, the parties, each by their duly authorized
representative, have executed this Trademark Sublicense Agreement as of the date
first above written.
XXXXXXX SHOE COMPANY INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Xxxxxxx X. Xxxx
Chairman of the Board and
Chief Executive Officer
SLJ RETAIL LLC
By: XXXXXXX RETAIL INC., its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman
Xxxxx Investment Co., Inc. hereby consents to the execution by Xxxxxxx of this
Trademark Sublicense Agreement and agrees to each of the terms hereof.
XXXXX INVESTMENT CO., INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
17
