EXHIBIT 10.34
LICENSE AGREEMENT
This License Agreement (hereinafter referred to as "Agreement") is
effective as of February 14, 1997, by and between CS SPORTSWEAR INC., a
California corporation with offices at 0000 X. 00xx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, (hereinafter referred to as "CS") and YES Clothing Co., a
California corporation located at 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, XX 00000 (hereinafter referred to as "LICENSEE").
WHEREAS, LICENSEE desires to secure the right and license to use said
trademarks and intellectual property rights in connection with the design,
manufacture, advertisement, promotion, distribution and sale of certain
Licensed Products as defined hereinafter;
WHEREAS, CS is willing to grant LICENSEE such license, upon the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. DEFINITIONS
The following terms shall have the meanings set forth below:
a. "Marks" shall mean the trademarks set forth in Schedule A attached
hereto and incorporated herein by this reference.
b. "Territory" shall mean solely the geographic area specifically set
forth and described in Schedule B, attached hereto and incorporated herein by
this reference.
c. "Licensed Products" shall mean solely the products specified in
Schedule C, attached hereto and incorporated herein by this reference.
d. "Net Sales" shall mean the total of gross dollar amounts invoiced or
charged to others by LICENSEE for all Licensed Products sold, distributed, or
transferred under the Licensed Rights, reduced by the amount of any bona fide
trade quantity discounts and actual returns plus any co-op or advertising
discounts given to customers.
e. "Contract Period" shall mean the period beginning on the Effective
Date, as specified in Schedule D, attached hereto and incorporated herein by
this reference.
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2. RIGHTS GRANTED
a. CS hereby grants to LICENSEE, and LICENSEE accepts, upon the terms
and conditions set forth herein, a limited exclusive, non-transferable right
and license to use the Licensed Rights solely on or in connection with the
design, manufacture, advertisement, promotion, distribution and sale of
Licensed Products solely within the Territory.
b. The parties acknowledge and agree that this Agreement is an
intellectual property rights license agreement and does not constitute, and
shall not be construed as, a franchise agreement. The parties further
acknowledge and agree that State and Federal franchise laws do not and will
not apply to this Agreement or to the relationship between LICENSEE and CS
and the respective rights and obligations hereunder since the parties agree
that, due to their respective business backgrounds and prior licensing
experience, they do not need the protection of State or Federal franchise
laws.
3. DURATION
(a) This Agreement shall commence on the effective date set forth above
and in Schedule D attached hereto and incorporated herein by this reference.
(b) This agreement shall be automatically renewed on the anniversary
date unless either party give sixty days prior written notice to terminate
this agreement.
(c) Either party may terminate this agreement during the initial
contract period by giving sixty days prior written notice to terminate.
4. ROYALTIES
a. LICENSEE agrees to pay to CS during the term of this Agreement, a
"Combined Payment" as set forth on Schedule E equal to the sum of:
(i) royalties; and
(ii) design, sales & production management fee
b. The Combined Payment shall be computed by applying the sum of the
percentage rates set forth in Exhibit E ("Combined Rate") to the Net Sales.
c. Licensee agrees to pay to CS a minimum royalty of $30,000 per month
during the initial contract period
d. Licencee agrees to pay to CS an amount equal to fifty percent of the
net profit generated by the sale of the licensed product.
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5. BOOKS AND RECORDS
a. LICENSEE shall keep complete and accurate records of all Licensed
Products manufactured, distributed and sold under the Licensed Rights and of
LICENSEE's activities and of all transactions relating to LICENSEE's
activities under this Agreement, and shall make the same readily available to
CS, and its agents or representatives, at such reasonable times as CS may
from time to time request for inspection, copying and extracting.
b. Such books of account and records shall be kept in accordance with
generally accepted accounting principles, consistently applied, and shall be
retained by LICENSEE and kept available for at least three (3) years after
the termination of each period of this Agreement for possible inspection,
copying, extracting and/or audit by CS. All financial information obtained
by CS regarding LICENSEE shall be kept confidential except in the event that
such information is necessary to resolve a bona fide dispute between the
parties.
6. INDEPENDENT CONTRACTOR
The parties hereby agree that LICENSEE is and shall be an independent
contractor and that no agency, joint venture or partnership is created by
this Agreement. The legal relationship of any person or entity performing
services for LICENSEE shall be one solely between said parties. LICENSEE
shall incur no obligation in the name of CS without the prior written consent
of CS.
7. INDEMNIFICATION
a. LICENSEE will indemnify, defend and hold CS and its directors,
officers, agents and employees harmless from any and all liabilities, claims,
obligations, suits, judgments and expenses whatsoever, including court costs
and attorneys' fees, which CS may incur or which may be asserted against CS,
and which arise or occur with respect to the operation of LICENSEE's business
as it relates to this Agreement.
b. CS will indemnify, defend and hold LICENSEE and its directors,
officers, agents and employees harmless from any and all liabilities, claims,
obligations, suits judgments and expenses whatsoever, including court costs
and attorneys' fees, which LICENSEE may incur or which may be asserted
against LICENSEE which arise or occur with respect to CS own acts or
omissions.
8. NOTICE
All notices, approvals, consents, requests, demands or other
communication to be given to either party shall be in writing, by certified
mail, return receipt requested, or by other means where receipt is
acknowledged, and shall be effective on the date of receipt thereof. If
undeliverable, or if receipt is not acknowledged, such communication shall be
effective on the
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date mailed or sent. Such communication shall be addressed to LICENSEE and
CS at their respective addresses set forth in the preamble above, or at any
other address that each party shall provide to the other in writing.
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9. GOVERNING LAW AND RESOLUTION OF DISPUTES
a. This Agreement shall be construed in accordance with the laws of the
State of California, and the parties agree that it is executed and delivered
in the State of California. In the event any legal action becomes necessary
to enforce or interpret the terms of this Agreement, the parties agree that
such action will be brought in the Los Angeles or Orange County Superior
Court or in the U.S. District Court for the Central District of California,
and the parties hereby submit to the jurisdiction of said courts.
b. In any dispute between the parties, the prevailing party shall be
entitled to recover its reasonable costs and fees, including attorneys' fees,
from the non-prevailing party.
10. BINDING EFFECT
This Agreement shall be binding on the parties, their affiliated
companies, successors and assigns (if any), and they each warrant that the
undersigned are authorized to execute this Agreement on behalf of their
respective parties. This Agreement is also binding upon the officers,
directors, agents, employees and shareholders of the parties, and any other
person acting in concert with them.
11. MANUFACTURE OF LICENSED PRODUCTS BY OTHERS
LICENSEE represents that any third party manufacturers, sub-contractors,
etc., shall operate their facilities in a manner that complies with all State
and Federal labor and business codes.
12. GENERAL PROVISIONS
a. No waiver or modification of any of the terms or provisions of this
Agreement shall be valid unless contained in a single written document signed
by both parties. No course of conduct or dealing between the parties shall
act as a waiver of any provision of this Agreement.
b. This Agreement, including Schedules A through F attached hereto,
contains the entire understanding of the parties, and there are no
representations, warranties, promises or undertakings other than those
contained herein. This Agreement supersedes and cancels all previous
agreements between the parties hereto.
c. In the event any legal action becomes necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be
entitled, in addition to its court costs or arbitration fees, to such
reasonable attorneys' fees as shall be fixed by a court of competent
jurisdiction or by an arbitrator(s).
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d. The subject headings of the paragraphs and subparagraphs of this
Agreement are included for convenience only, and shall not affect the
construction or interpretation of its provisions.
e. If any provision of this Agreement should be held to be void or
unenforceable, such provision will be treated as severable, leaving valid the
remainder of this Agreement.
f. The parties represent and warrant that they have made no agreements
that are inconsistent with this Agreement or that would prevent them from
entering into this Agreement. The parties further represent and warrant that
entering into this Agreement does not violate any agreements, rights or
obligations existing between them and any other entity.
IN WITNESS WHEREOF, the parties agree that this Agreement shall take
effect as of the date first written above.
CS SPORTSWEAR INC.
February 18, 1997 /s/ Xxxx Xxxxxxx
Dated: By:
------------------------ -----------------------
XXXX XXXXXXX
President
LICENSEE (YES CLOTHING CO.)
February 17, 1997 /s/ Guy Anthome
Dated: By:
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GUY ANTHOME
Chairman and CEO
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SCHEDULES
A: Marks: Into Reality,
CS Sportswear and
any other xxxx used
B: Territory: Worldwide
C. Licensed Products: Men's, Women's and Kids Apparel
D. Effective Date: February 14, 1997
Duration/Contract Period:
Contract Period Beginning Ending
--------------- --------- ------
1 2/14/97 12/31/97
Option year 1 -2 1/1/98 12/31/98
Option year 2- 3 1/1/99 12/31/99
Option year 3- 4 1/1/00 12/31/00
E: Combined Rate
Rate: ---------------------
Combined Rate: All types of Apparel
Royalty Rate 5.0%
Design,sales&production management fee 5.0%
Combined Rate: 10.0%
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