Exhibit 10.51
License No: 3A- 01000
EQUILINK LICENSING CORPORATION LICENSE AGREEMENT
AGREEMENT, made and entered into this 4th day of March, 1998, by and
between Equilink Licensing Corporation, a corporation organized under the
laws of the State of Delaware, having its principal office at 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (hereinafter "Equilink"),
Footstar Corporation, a corporation organized under the laws of Texas and
having its principal office at 000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxxxx
00000 (hereinafter "Licensee").
W I T N E S S E T H:
WHEREAS, Equilink is the exclusive licensee from MacMark Corporation,
a Delaware corporation ("MacMark"), of the rights to use the trademark
"MacGregor" for the products covered by this Agreement and its various
forms set forth on Schedule A, including the forms described in United
States, Trademark Registrations 1,282,555 and 1,353,044 (the "Trademarks");
and
WHEREAS, Licensee desires to obtain the exclusive right to use the
Trademarks in connection with the manufacture, advertisement, promotion and
sale of Licensed Products in the Territory; and
WHEREAS, Equilink is willing to grant a sublicense to Licensee with
respect to the aforesaid Trademarks in the Territory in connection with the
manufacture, advertisement, promotion, sale, offering for sale, and
distribution of the Licensed Products on the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual promises and conditions herein contained, the parties hereby agree
as follows:
1. DEFINITIONS. Defined terms shall have the meanings assigned to
them as set forth below:
1.1 Advance. "Advance" shall mean the amount
specified in Section 10.1 hereof as the Advance.
1.2 Advertising Material. "Advertising Material" shall
include all forms of advertising material,
including packaging, labeling, hang tags, cartons
and promotional material, regardless of media.
1.3 Channels of Trade. The "Channels of Trade" shall be
Kmart stores in the Territory.
1.4 Cost. The Cost of licensed goods shall be the fully
landed cost of the licensed goods for goods purchased
outside the United States, such costs including but not
limited to ex-factory price, freight, commissions,
duties, insurance, brokers' fees and inland freight;
provided, however, that there shall be excluded from
fully landed cost of licensed goods any amounts paid by
Licensee to its subsidiaries or affiliates, which are
not paid or applied to satisfy or offset any item of
cost set forth above paid to non-affiliates. Cost of
licensed goods for items purchased domestically shall be
the price paid by Licensee for the goods. Cost, for the
purpose of calculating royalties, shall also exclude the
cost of any samples and Licensed Products returned to
the manufacturer.
1.5 Effective Date. The "Effective Date" shall be July
1, 1998.
1.6 Initial Term. The "Initial Term" will be the
period commencing on the Effective Date and ending on
June 30, 2001 unless sooner terminated pursuant to the
terms and conditions of this Agreement.
1.7 License Year. A "License Year" shall be the period
commencing on the Effective Date and ending June 30,
1999, and with respect to each succeeding License Year,
each succeeding twelve month period through the end of
the Term.
1.8 Licensed Products. The "Licensed Products" are sneakers
and athletic shoes (but excluding skates and street,
dress, casual or golf shoes) and laces for use on such
shoes.
1.9 Minimum GuarantThe Minimum Guaranty for any period
shall mean the amounts specified in Section 10.1 hereof
as the Minimum Guaranty for such period.
1.10 Renewal Period. The "Renewal Period" shall be (assuming
renewal has been made in accordance with the provisions
of Section 3 hereof) the two year period commencing
immediately after the end of the Initial Term and ending
June 30, 2003.
1.11 Royalty. The "Royalty" is the amount equal to three and
one-half Percent (3.5%) of Cost.
1.12 Term. The "Term" shall be the period comprised of the
Initial Term and any Renewal Period.
1.13 Territory. The "Territory" will be the United
States, its territories and possessions (including
but not limited to Guam and the U.S. Virgin
Islands).
1.14 Trademarks. "Trademarks" means those specified in
Schedule A.
2. GRANT OF RIGHTS. Equilink grants to Licensee the exclusive
non-transferable right (with no right to sublicense other than to
affiliates operating Kmart stores in the Territory) and license to use the
Trademarks within the Territory during the Term in connection with the
manufacture, advertisement, promotion and sale of the Licensed Products.
Licensee agrees not to sell any of the Licensed Products, nor to sell such
Products to any party that could reasonably be expected to sell such
Products, outside the Territory or Channels of Trade; provided, however,
Licensee shall have the non-exclusive right to manufacture, subject to
Section 24, goods outside the Territory that bear the Trademark. The use of
the Trademarks shall be in the forms as shown on Schedule A. Should
Licensee desire to use the MacGregor trademark in any different form,
Licensee may request Licensor's consent to do so, and if granted, Licensor
shall apply for said trademark if warranted at a cost to be born by
Licensor. Such additional trademark will then be added to Schedule A.
Licensor shall be entitled to change the forms of the Trademarks shown on
Schedule A by giving Licensee not less than ninety (90) days advance
written notice of such change, it being agreed that in the event of any
such change Licensee shall be entitled to sell out its then-current stock
on hand and any goods representing orders placed prior to receipt of said
notice. Each use of the registered Trademarks by Licensee shall immediately
be followed by the symbol (R).
3. TERM.
3.1 This Agreement shall become effective upon the Effective
Date and shall continue for the Term, unless sooner terminated pursuant to
the terms and conditions of this Agreement.
3.2 Licensee shall have the option to renew this Agreement once
for the Renewal Period provided that (i) Licensee gives Equilink notice of its
desire to renew the Agreement in writing at least ninety (90) days before
expiration of this Agreement, (ii) Licensee is not then in material breach
of this Agreement (and any cure periods have lapsed), (iii) Licensee is not
otherwise in material breach of any of its obligations under this Agreement
at any time during the period commencing on the date of such renewal notice
through the expiration date (and any cure periods have lapsed) and (iv)
either (A) the aggregate dollar amount of the Cost of Licensed Products
bearing the Trademarks in the second License Year of the Initial Term
(i.e., July 1, 1999- June 30, 2000), as determined on the last day of such
License Year, to the Channels of Trade in the Territory equals at least
$21,429,000 or (B) Licensee has paid the Minimum Guaranty due with respect
to the third License Year of the Initial Term (i.e., July 1, 2000 - June
30, 2001) (it being agreed that the option to renew is not contingent upon
prepayment of the Minimum Guaranty in the third License Year before the
dates payment are otherwise due).
3.3 If during the last License Year in the Renewal Period (the "Offer
Period") Equilink obtains an offer which it is prepared to accept from an
unaffiliated third party to license the Trademarks in the Territory upon
the expiration of this Agreement after the Renewal Period, then, so long as
Licensee is (i) not in material breach of any provision hereof upon the
expiration of this Agreement, and (ii), subject to the immediately
proceeding subclause (i), not in material breach (after the earlier of the
expiration of applicable cure periods) on the date that Licensor delivers
notice to Licensee of such offer, then Licensee shall have a right of first
refusal as follows: Equilink shall provide Licensee with a description of
the terms of any such proposed license. Licensee shall have seven (7) days
from the delivery thereof to deliver to Equilink its written agreement to
such terms and Equilink and Licensee shall negotiate in good faith to
execute and deliver an amendment to this Agreement or new agreement, as the
case may be, incorporating such terms within twenty (20) days after
delivery to Licensee of a proposed form of such agreement. If a copy of the
proposed license agreement is initially sent to Licensee, then Licensee
shall have five (5) business days from the delivery of such proposed
licensee agreement to execute and deliver to Equilink such agreement.
Licensee's failure to do the foregoing within the applicable time period
shall automatically be deemed to be a rejection of the offer to license and
Equilink may enter into an agreement with the proposed licensee on
substantially the same terms and subject to the same conditions as those
offered to Licensee. In the event that during the Offer Period Equilink
receives a new offer which it is prepared to accept from an unaffiliated
third party (or Equilink offers revised terms to an unaffiliated third
party) to license the Trademarks in the Territory on terms and conditions
more favorable to such unaffiliated party in any material respect than
those offered to Licensee under this Section, then Licensee shall have the
right of first refusal provided for in this Section with respect to such
revised offer. If Licensee and Equilink enter into a new agreement pursuant
to this Section, then Licensee's failure to make payments and deliver
reports required by this Agreement after expiration thereof shall, after
expiration of any applicable cure period under this Agreement, constitute a
breach of the new agreement.
4. QUALITY CONTROL.
4.1 The quality of all Licensed Products produced by Licensee
pursuant to this Agreement shall be of a high standard with respect to
material and workmanship consistent with the American reputation of
Equilink and with products comparable to the Licensed Products. Licensee
recognizes that Equilink has a reputation for the highest quality and that
Licensee must, therefore, maintain such quality in all Licensed Products.
Licensee agrees to maintain the quality of goods sold by it under the
trademark MacGregor at least commensurate with the then current average of
such goods in the discount marketplace under such trade styles as Wilson,
Franklin, Everlast, Spalding or Pro Spirit.
4.2 Licensee agrees that the Licensed Products sold or distributed
by it in association with the Trademarks shall be of high standard and of
such style, appearance and quality as to be adequate and suited to their
exploitation to the best advantage and to the protection and enhancement of
the Trademarks and the goodwill pertaining thereto. Licensee also agrees
that the Licensed Products shall meet or exceed any and all government
standards, regulations, guidelines, rules, laws or the like regarding such
Licensed Products.
4.3 To assure that the nature and quality of Licensed Products are
satisfactory, Licensee shall, before selling or distributing any of the
Licensed Products, furnish to Equilink, free of cost, for Equilink's
written approval, a reasonable number (not more than twelve) of samples of
each Licensed Product together with their cartons, containers, packaging,
hang tags, wrapping, catalogs, brochures and advertising (collectively,
"Related Material"). The quality and style of such Licensed Products and
Related Material shall be subject to Equilink's prior approval. In the
exercise of its sole judgment in good faith, Equilink may disapprove of any
item submitted for approval and will provide the reasons for disapproval in
reasonable detail. Equilink will use good faith efforts to promptly respond
to requests for approval. Failure by Equilink to give approval within
twenty (20) days from the date of submission will be deemed approval. After
samples of the Licensed Products and Related Material have been approved
pursuant to this Agreement, Licensee shall not depart therefrom in any
material respect without Equilink's prior approval. Equilink shall have the
right to withdraw its approval of approved samples of Licensed Products and
Related Materials at any time if it is able to demonstrate that the quality
of such Licensed Products and/or Related Materials has become unacceptable
and deviate from the samples originally approved. Otherwise, Equilink will
not withdraw its approval of any Licensed Product or Related Material
4.4 After Licensee has commenced selling the Licensed Products,
or at least once each year of this Agreement, upon Equilink's written request,
Licensee shall furnish without cost to Equilink not more than ten (10)
additional random samples of each Licensed Product being sold by Licensee
hereunder, together with any cartons, containers and packaging or wrapping
material used in connection therewith.
4.5 If at any time the Licensed Products do not meet the quality
level of the samples approved by Equilink, Equilink shall have the right to
require Licensee to discontinue the use of the Trademarks in connection
with the sale of the Licensed Products unless modifications sufficient to
meet the quality level of the samples approved by Equilink, or otherwise
satisfactory to Equilink are made within thirty (30) days from notice of
disapproval.
5. LABELING, PACKAGING AND ADVERTISING.
5.1 Licensee shall submit for approval of Equilink before the same
are put into actual use, specimens of all Advertising Materials, including
all labels, tags and packaging which Licensee proposes to use in connection
with the sale of any of the Licensed Products under this Agreement. In the
exercise of its sole judgment in good faith, Equilink may disapprove of any
piece of Advertising Material, and will provide reasons, if any, for
disapproval in reasonable detail. Failure by Equilink to give approval
within twenty (20) days from the date of submission will be deemed
approval.
5.2 All labels and packaging material bearing the Trademarks and
all Advertising Materials designed to promote Licensed Products bearing the
Trademarks shall present the following legend keyed into the Trademarks:
"Trademark of MacMark Corporation. Used with permission.", or after
receiving reasonable notice such other legend as Equilink may authorize in
a manner that will indicate MacMark's ownership of the Trademarks.
6. GOODWILL AND PROMOTIONAL VALUE. Licensee recognizes the great
value of the goodwill associated with the Trademarks and acknowledges that
the Trademarks, and all rights therein and the goodwill pertaining thereto,
belong exclusively to Equilink. Licensee further recognizes and
acknowledges that the Trademarks have acquired secondary meaning in the
mind of the public.
7. ACKNOWLEDGMENTS.
7.1 Licensee acknowledges and accepts all of Equilink's rights
and interest in and to the Trademarks. Licensee agrees that it will not,
during the Term of this Agreement or thereafter, attack or challenge in any
forum the ownership and interest of Equilink, or any related company of
Equilink, in and to the Trademarks, or the validity of this Agreement.
7.2 Licensee acknowledges and agrees that neither this Agreement
nor Licensee's exercise of its rights under this Agreement shall affect the
ownership by Equilink of any of the goodwill or other rights of whatsoever
nature pertaining to the Trademarks, and such goodwill or other rights
pertaining to the Trademarks shall be and remain in the name of Equilink or
related companies of Equilink.
8. TRADEMARK AND COPYRIGHT PROTECTION.
8.1 All rights in the said Trademarks other than those specifically
granted herein are reserved by Equilink for its own use and benefit.
Licensee shall at any time, whether during or after the term of this
Agreement, take such actions reasonably required by Equilink to confirm its
ownership of all such rights. Equilink agrees to take all steps necessary
to complete registration of the Trademarks and during the Term to prevent
others from attempting to register or use the Trademarks on the Licensed
Products in the Territory. Equilink also agrees to hold Licensee harmless
from and against any claims, suits, loss and damage arising out of failure
of the above registration.
8.2 The parties agree and intend that all artwork and designs
created by Licensee or any other person or entity and used with the Trademarks
shall remain the property of Licensee or such other person or entity or
their assigns.
8.3 Licensee agrees that in the event it learns of any use by any
person of an infringement of the Trademarks, it shall promptly notify
Equilink of such use and, if requested by Equilink, shall join with
Equilink, at Equilink's expense, in such action as Equilink, in its
discretion, may reasonably deem advisable for the protection of Equilink's
rights therein; notwithstanding the foregoing, with respect to any
infringement by Licensee or its sublicensees, manufacturers, affiliates or
agents, Equilink shall have sole discretion to determine what action, if
any, to take. Licensee shall have no right to take any action with respect
to the Licensed Products without Equilink's prior written approval. If
Equilink (i) fails to take any action against any use by a person of an
infringement of any Trademark or (ii) fails to take reasonably prompt
action against any such infringement, which infringement materially affects
Licensee's rights under Section 2 hereof, then Licensee may request
permission to take action or bring suit and, with prior written permission
of Equilink, may take action or bring suit at its own expense, which
consent shall not be unreasonably withheld; and provided, further, that
Equilink shall have the right to assume control of such action (or the
settlement or resolution thereof) at any time, but shall thereupon be
responsible for its own further expense. No settlement may be entered into
by Licensee without the written consent of Equilink which consent shall not
be unreasonably withheld.
8.4 Licensee will not alter, modify, dilute or misuse the Trade-
marks, bring them into dispute or challenge, directly or indirectly, MacMark's
or Equilink's rights in them or their validity. Licensee will not adopt,
register or attempt to register any of the Trademarks as a trademark,
service xxxx, or corporate name, as the case may be, or any confusingly
similar xxxx, or any simulation or native or foreign equivalent of the
Trademarks anywhere in the world.
8.5 Licensee will reasonably cooperate with Equilink in
protecting, defending and registering the Trademarks at Equilink's expense.
9. PROMOTION OF LICENSED PRODUCTS. Licensee shall use reasonable best
efforts and facilities to promote the sale of the Licensed Products and to
exploit the rights herein granted, and to diligently and continuously
manufacture, prepare, deliver, sell, distribute, advertise and promote
Licensed Products bearing the Trademarks.
10. ROYALTY OBLIGATIONS AND PAYMENTS.
10.1 During the Initial Term and any Renewal Period, Licensee
shall pay in each License Year the sums set forth below as a Minimum Guaranty
against Royalties.
Annual
Term Minimum Guarantee
---- -----------------
Initial Term $ 750,000
Renewal Period $ 850,000
The Minimum Guaranty is payable by Licensee to Equilink without regard to the
amount of sales of Licensed Products bearing the Trademarks.
10.2 For each License Year in the Initial Term, the Minimum
Guarantee, if not previously earned and paid to Equilink in Royalties,
shall be payable in equal quarterly installments no later than thirty (30)
days after the last day of each calendar quarter during the Initial Term.
10.3 For the Renewal Period, if any, the Minimum Guaranty, if
not previously earned and paid to Equilink in Royalties, shall be payable
in equal quarterly installments each on no later than thirty (30) days
after the last day of each calendar quarter during the Renewal Term.
10.4 For and in consideration of the rights and licenses
granted to Licensee hereunder, Licensee shall pay to Equilink the Royalty
on the Cost of all the Licensed Products sold or distributed by or for
Licensee. Royalties shall be paid by Licensee no later than thirty (30)
days after the last day of each calendar quarter during the Term.
10.5 The Royalty for the Initial Term and any Renewal Period shall
never be less than the Minimum Guarantee for the Initial Term or Renewal
Period, as the case may be. Royalties paid to Equilink pursuant to Section
10.2 or 10.3 for any calendar quarter may be credited against the Minimum
Guarantee installment due in respect of such calendar quarter. To the
extent that actual Royalties paid to Equilink in a calendar quarter exceed
the installment of the Minimum Guarantee for such quarter, the amount of
such excess may be credited against the installment of Minimum Guarantee
due in the next succeeding calendar quarter in the same License Year in
which such quarter occurs. Royalties paid in excess of the Minimum Guaranty
for the Initial Term shall not be credited to the Minimum Guaranty for the
Renewal Period. Once paid to Equilink, no part of the Minimum Guarantee is
refundable.
10.6 In the event that Kmart Corporation enters into a license to
use the Trademark (the "Kmart License") at a royalty rate equal to the Blended
Rate (defined below), then notwithstanding Section 10.4 and the first
sentence of Section 10.5 hereof, Licensor will adjust the Royalty to the
Blended Rate for so long as Kmart is required to pay the Blended Rate under
such license. The "Blended Rate" on any date shall be the rate determined
by dividing (x) the sum of the minimum royalty guarantee under the Kmart
license and this Agreement on such date by (y) the sum, as determined on
such date, of (A) the Minimum Guarantee under this Agreement divided by the
Royalty plus (B) the minimum royalty guarantee under the Kmart License
divided by the royalty rate (which is other than the Blended Rate) which
Licensor offered in writing to accept from Kmart. If the Blended Rate is
greater than the Royalty set forth in Section 1.11, then the Royalty will
be as set forth in Section 1.11.
11. ROYALTY AND FINANCIAL REPORTS AND PAYMENTS.
11.1 Licensee shall furnish to Equilink a Royalty report not later
than thirty (30) days after the end of each calendar quarter for all
Licensed Products bearing the Trademarks sold by or for it during such
calendar quarter. The Royalty report shall be submitted in the format set
forth in attached Schedule B and certified to be accurate by an appropriate
financial officer of Licensee. Each report shall include the number,
description, manufacturer's reference number and Cost of the Licensed
Products purchased by Licensee during the quarter less any samples or
returns made by Licensee during the relevant period to manufacturers.
11.2 Each Royalty report submitted by Licensee to Equilink pursuant
to Section 11.1 shall be accompanied by a check in payment of the Royalty
or Minimum Guarantee, if such a payment is due, for the calendar quarter
covered by the report.
11.3 The first Royalty report shall be due October 30, 1998, and
thereafter on the thirtieth (30th) day after each succeeding calendar
quarter during the Initial Term and any Renewal Period. Royalty reports
shall be provided for all subsequent calendar quarters regardless of
whether or not any of the Licensed Products have been sold or distributed
during the preceding quarter.
11.4 The payment of the Royalty or Minimum Guarantee, as the case
may be, shall be delivered to Equilink thirty (30) days from the end of the
calendar quarter for which payment was due.
11.5 All payments made hereunder shall be by check made payable
to Equilink and shall be in United States currency.
11.6 Licensee agrees to submit annual forecasts including
customer SKU breakdowns and previous quarter actuals. An annual product
roll-out schedule will be submitted to Equilink for each year this
Agreement is in effect.
12. ACCOUNTING STANDARDS FOR ROYALTY COMPUTATIONS. It is expressly
understood and agreed that all computations relating to the determination
of the amount of Royalties due and payable pursuant to this Agreement shall
be made in accordance with the generally recognized and accepted accounting
principles as reflected in the practice of U.S. independent certified
public accountants. Licensee shall maintain adequate and accurate records
in sufficient detail to enable all Royalties due to Equilink hereunder to
be readily and accurately determined in accordance with such standards, and
Licensee shall, upon Equilink's written request with reasonable advance
notice permit such books and records to be examined and extracted by an
accountant authorized to do so at any reasonable times during business
hours. All such books and records shall be kept available by Licensee for
at least two (2) years from the sale of the Licensed Products.
13. MISTAKES IN PAYMENT. The receipt or acceptance by Equilink of any
of the statements furnished pursuant to this Agreement, or of payments
hereunder, or the cashing of any checks paid hereunder shall not preclude
Equilink from questioning the correctness thereof. If any inconsistencies
or mistakes are discovered in such statements or payments, they shall
immediately be rectified and the appropriate payment made to the party to
which such payment is owed.
14. TERMINATION. Without prejudice to any other rights, this
Agreement shall immediately and automatically terminate without need for
further notice from Equilink at any time (except as otherwise set forth
below):
14.1 If Licensee or any of its affiliated companies fails to
make any payment due hereunder or to deliver any of the
statements herein referred to, and if such default
continues for a period of ten (10) business days after
written notice of such default is received by Licensee.
14.2 At Equilink's option, if Licensee or any of its
affiliated companies or any guarantor hereunder is unable
to pay its liabilities when due, or makes any assignment
for the benefit of creditors, or files or has filed
against it any petition under bankruptcy laws, or is
adjudicated as bankrupt or insolvent, or if any receiver
is appointed for its business or property.
14.3 If Licensee fails to perform or breaches any other
material terms or conditions of this Agreement upon
written notice to Licensee and thirty (30) days'
opportunity to cure.
14.4 If any governmental agency finds that the Licensed
Products are defective in any way (other than because of
use of the Trademarks as authorized hereunder), manner or
form and after receiving notice thereof, Licensee does
not promptly remedy such situation by removing the
Licensed Products from sale or otherwise.
14.5 If Equilink fails to perform or breaches any other
material terms or conditions of this Agreement upon
written notice to Equilink and thirty (30) days
opportunity to cure.
.
15. COLLECTION COSTS. In addition to all other remedies available to
Equilink at law or equity, Licensee shall pay Equilink immediately upon
incurrence all reasonable costs and expenses (including legal fees)
incurred by or on its behalf to collect past due royalty payments hereunder
(unless there is a final adjudication that such amounts were not due).
16. SELL OFF.
16.1 On the conditions that Licensee has paid all monies owed
and has delivered all requisite reports to Licensor as of the expiration
date and has provided Equilink within 10 business days after such
expiration a written inventory statement specifying the number of each of
the Licensed Products in Licensee's inventory as of the date of expiration
of this Agreement, upon expiration (but not termination) of this Agreement,
for a period of one hundred and eighty (180) days after such expiration
Licensee will have the nonexclusive license to dispose of any Licensed
Products in inventory in accordance with the terms and conditions of this
Agreement and Licensee's usual practices and prices for each of the
Licensed Products, provided that Licensee pays to Licensor all Royalties
associated with the distribution of the Licensed Products
as set forth in Section 10 above and that the amount of Royalties paid per
unit of Licensed Products by Licensee for exploitation of such Licensed
Products is no less than the average per unit dollar amount received by
Licensor as a Royalty with respect to such Licensed Products during the
twelve (12) months preceding expiration (excluding any units distributed at
no charge or at or below cost). Licensee may not manufacture Licensed
Products in anticipation of the expiration of this Agreement.
16.2 Upon expiration or termination of this Agreement or
sell-off period, if applicable, Licensee shall turn over at Cost to
Licensor or, if requested by Licensor, destroy all remaining stock of the
Licensed Products and, if requested, shall destroy all molds, plates and
other materials in Licensee's control or possession that contain the
Trademarks that were used in the manufacture of the Licensed Products, and
an officer of Licensee will certify to Licensor in writing that Licensee
has done so.
17. REVERSION OF RIGHTS. Upon termination or expiration of this
Agreement or sell-off period, if applicable, all license rights granted
hereunder will immediately revert to Equilink, and Equilink may exploit
such license rights itself or grant such rights to any third party, and
Licensee will not reproduce, manufacture, sell or distribute any Licensed
Products. Further, Licensee shall cancel or terminate all contracts, orders
and requests for the manufacture or supply of any goods or services
which involve or may lead to any use, application or exploitation of the
Trademarks or the rights herein granted or any part thereof. Equilink may
negotiate and contract with a third party with respect to licensing the
Licensed Products bearing the Trademarks so long as Licensor does not
convey any rights to use the Trademarks on Licensed Products during the
Term hereof.
18. INSURANCE AND INDEMNIFICATION.
18.1 Licensee agrees to hold harmless, defend and
indemnify Equilink and its affiliates and each of their respective
employees, directors and agents against any and all claims, suits, losses,
expenses (including attorneys' fees), or damages directly or indirectly
arising out of Licensee's promotion, advertising, manufacture, distribution
or sale of the Licensed Products and the use by third parties of such
Licensed Products promoted, manufactured, advertised, distributed or sold
by Licensee, or out of any alleged unauthorized use of any patent,
copyright, design, xxxx, process, idea, method, or device by Licensee in
connection with the Licensed Products.
18.2 During the Term and thereafter Equilink shall indemnify and
hold harmless Licensee, its affiliates and each of their respective officers,
directors, agents and employees for, from and against any claims, demands,
causes of action, damages, and reasonable attorneys' fees for trademark
infringement arising out of the use of the Trademarks as strictly
authorized under this Agreement, provided that Equilink is given prompt
notice of and shall have the option to undertake and conduct the defense of
any such claim, demand or cause of action and further provided that
Licensee shall cooperate in the defense of such claim as reasonably
required by Equilink.
18.3 Licensee shall acquire and maintain at its sole cost and
expense throughout the term of this Agreement Commercial General Liability
Insurance, including product liability and contractual liability insurance
(hereinafter referred to as "Commercial General Liability Insurance"),
underwritten by an insurance company which has been rated at least A-VI by
the most recent edition of Best's insurance report. The financial status of
insurance companies located outside the United States must be acceptable to
Equilink. This insurance coverage shall provide protection against any and
all claims, demands, causes of action or damages, including attorney's
fees, arising out of any alleged defects in the Licensed Products, or any
use thereof of not less than three million dollars ($3,000,000) combined
single limit for personal injury and property damage with MacMark and
Equilink named as an additional insured party. In addition, Licensee shall
name MacMark and Equilink as an insured on any excess or umbrella policies
carried by Licensee. Licensee may, at its option, self insure all or any
portion of the above obligation.
18.4 Licensee shall furnish to Equilink certificates
issued by the insurance company setting forth the amount of Commercial
General Liability Insurance, the policy number, the date of expiration, and
a provision that Equilink shall receive thirty (30) days written notice
prior to termination, reduction, or modification of the coverage.
Licensee's purchase of the Commercial General Liability Insurance or
furnishing of the certificate of insurance shall not relieve Licensee of
any other of its obligations or liabilities under this Agreement.
18.5 Licensee agrees to provide Equilink with prompt notice of
any claim, objection, suit or dispute of any kind concerning the Trademarks
and/or MacMark's and Equilink's rightful ownership of rights thereto.
Equilink shall have at least ninety (90) days after receipt of said notice
to exercise the option to undertake and conduct the defense of any suit so
brought, and if Equilink does not undertake to conduct the defense of any
such claim or suit, no settlement of any such claim or suit shall be made
without Equilink's prior written consent. Licensee agrees to reasonably
cooperate fully with Equilink in any such action.
19. REPRESENTATION AND WARRANTY. Each party represents and warrants
to the other that it is under no legal impediment which would prevent it
from signing this Agreement or performing obligations hereunder. Equilink
further represents and warrants that it is authorized to grant this license
and will not grant any license or take any action in contravention to
Licensee's exclusive rights to sell Licensed Products in the Territory.
20. NOTICES. Except as otherwise provided in this Agreement, all
notices or other communications required or permitted to be given pursuant
hereto shall be in writing and shall be valid and sufficient if dispatched
by hand delivery, reliable courier (such as Federal Express), telecopier
(with confirmed receipt), registered mail, postage prepaid, addressed as
follows:
If to Equilink: Equilink Licensing Corporation
c/x Xxxxxxx Sports Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
TELECOPIER: (000) 000-0000
ATTENTION: GENERAL COUNSEL
with a copy to: Xxxxxxx, Inc.
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
TELECOPIER: (000) 000-0000
ATTENTION: CHIEF ACCOUNTING OFFICER
If to Licensee: Footstar Corporation
000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
TELECOPIER (000) 000-0000
ATTENTION: GENERAL COUNSEL
with a copy to: Meldisco
000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
TELECOPIER (000) 000-0000
ATTENTION: PRESIDENT
Either party may change its address by notice given to the other party in
the manner set forth above. Notices given by mail as herein provided shall
be considered to have been given ten (10) days after the mailing thereof.
21. WAIVER. The failure of either party at any time or times to
demand strict performance by the other of any of the terms, covenants or
conditions set forth herein shall not be construed as a continuing waiver
or relinquishment thereof and each may at any time demand strict and
complete performance by the other of said terms, covenants and conditions.
All waivers hereunder must be made in writing, and failure at any time to
require the other party's performance of any obligation under this
Agreement shall not affect the right subsequently to require performance of
that obligation.
22. ASSIGNMENT. This Agreement shall bind and inure to the benefit of
Licensee, Equilink and the successors and assigns of Equilink. The rights
granted to and the duties and obligations undertaken by Licensee hereunder
shall be exclusive to it and shall not without the prior written consent of
Equilink be transferred, assigned, delegated or subcontracted, voluntarily
or involuntarily, by operation of law or otherwise (including without
limitation, upon merger) other than to an affiliated company of Licensee
who is directly or indirectly involved in the operation of the footwear
departments of Kmart stores in the Territory.
23. NO JOINT VENTURE. The parties to this Agreement are independent
contractors. Nothing in this Agreement shall be construed to make the
parties agents of each other, partners or joint venturers or to permit
either party to bind the other to any agreement or create any legal
relationship other than that of licensee and licensor.
24. MANUFACTURING SOURCE. Licensee represents that the Licensed
Products will be manufactured for Licensee by a person or entity who agrees
to be bound by the terms hereof, and each shall sign the attached Schedule
C prior to the manufacture of the Licensed Products pursuant to this
Agreement. Equilink agrees during the Term not to disclose the name of such
manufacturers (unless such names become known to the public other than by
disclosure by Licensor) or contact such manufacturers other than through
Licensee in connection with this Agreement.
25. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or portion of any provision of this
Agreement should be invalid under applicable law, such provision or portion
of such provision shall be ineffective to the extent of such invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
26. INJUNCTIVE RELIEF. Each party hereto acknowledges that the
other's breach of this Agreement will result in immediate and irreparable
damage to the other, and that money damages alone would be inadequate to
compensate the other. Therefore, in the event of a breach or threatened
breach of any provision of this Agreement by one party, the other party
may, in addition to all other remedies, immediately obtain and enforce
injunctive relief prohibiting such breach or compelling specific
performance. Each party hereby irrevocably waives any requirement that the
other party might have to post a bond in order to obtain such injunctive or
other relief.
27. SUBJECT HEADINGS. The subject headings of the Sections of this
Agreement are included for the purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
28. FURTHER ASSURANCES. The parties shall each perform such acts,
execute and deliver such instruments and documents, and do all such other
things as may be reasonably necessary to accomplish the transactions
contemplated by this Agreement.
29. LAW TO GOVERN. The validity, construction and enforceability of
this Agreement shall be governed in all respects by the laws of New York
without regard to principles of conflict of law and Licensee hereby
consents to jurisdiction in state and federal courts located in the United
States, New York, New York.
30. WRITTEN AGREEMENT TO GOVERN. This Agreement sets forth the entire
understanding and supersedes all prior and contemporaneous agreements
between the parties relating to the subject matter contained herein and
merges all prior and contemporaneous discussions between them. Neither
party shall be bound by any definition, condition, representation,
warranty, covenant or provision other than as expressly stated in or
contemplated by this Agreement or as subsequently shall be set forth in
writing and executed by an authorized representative of the party to be
bound.
31. LOSS OF CONTROL. If for any reason, the present management of
Equilink is replaced or the controlling interest of Equilink is sold, this
Agreement will remain in effect for the remainder of the Term.
32. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original instrument,
but all such separate counterparts shall constitute only one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
EQUILINK LICENSING CORPORATION
Dated: By: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
FOOTSTAR CORPORATION
Dated: By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President
