EXHIBIT 10.2
CHEROKEE-MOSSIMO FINDERS AGREEMENT
This Cherokee-Mossimo Finders Agreement ("Agreement") is made and
entered into this 27 day of March 2000 (the "Effective Date") by and between
Cherokee Inc., a Delaware corporation ("Cherokee"), and Mossimo, Inc., a
Delaware corporation ("Mossimo").
Whereas, Mossimo owns the various Mossimo trademark applications and
registrations listed on Exhibit "A" hereto (the "Mossimo Trademarks"); and
Whereas, Mossimo and Cherokee have entered into that certain Letter of
Intent dated February 22, 2000 (the "LOI"); and
Whereas, pursuant to the LOI, Cherokee has introduced Mossimo to such
executives at Target Corporation ("Target") to enable Mossimo to negotiate a
licensing agreement with Target with respect to the Mossimo Trademarks; and
Whereas, Mossimo and Cherokee desire to extinguish the obligations of
each of the parties set forth in the LOI and to substitute this Agreement as a
novation for the LOI;
Now, therefore, in consideration of the foregoing and for other good and
valuable consideration, the parties hereto agree as follows:
1. PRIOR AGREEMENTS. This Agreement is intended by the parties to
supercede and replace all prior agreements or understandings of any type between
the parties (the "Prior Agreements"), including without limitation the letter
agreement dated February 18, 2000 and the LOI, and all such Prior Agreements
shall terminate and be of no further force or effect upon execution of this
Agreement.
(a) Mossimo and Cherokee (the "Parties") each hereby releases
the other Party and its officers, directors, shareholders, agents,
representatives, servants and employees past, present and future, and each of
them, from any and all obligations, debts, claims, demands and causes of action
of any kind or nature, whether known or unknown, suspected or unsuspected by the
Parties and their respective past, present and future officers, directors,
shareholders, agents, representatives, servants and employees (collectively, the
"Releasers"), which the Releasers or any of them now owns or holds, or has at
any time owned or held or may hereafter own or hold against the other Party or
any of the Releasers, arising out of, related to or in any way connected with
the Prior Agreements.
(b) It is the intention of the Parties in executing this
instrument that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified; and in furtherance of this
intention, the Parties hereby expressly waive any and all rights and benefits
conferred upon them by the provisions of Section 1542 of the California Civil
Code and expressly agree that the above releases are intended to and do extend
to and cover claims of the type referred to in said Section 1542, which reads as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
The Parties expressly consent that the above releases shall be given
full force and effect according to each and all of their express terms and
provisions, including as well those relating to the unknown and unsuspected
claims, demands and causes of action hereinabove specified.
2. EXCLUSIVE NEGOTIATION PERIOD. Mossimo shall not enter into licensing
discussions or negotiations with respect to direct retail licenses with any
person or entity other than the Prospective Licensees (as hereinafter defined)
from the Effective Date until June 21, 2000. Nothing herein shall be construed
to obligate Mossimo to enter into any license agreement with the Prospective
Licensees. Mossimo has the right in its sole and absolute discretion to reject
any license agreement proposed by a Prospective Licensee, and Cherokee shall not
be entitled to any compensation whatsoever, including, but not limited to, under
this Agreement, unless Mossimo enters into a license agreement with a
Prospective Licensee.
3. FINDER'S FEES.
(a) COMPUTATION. If Mossimo enters into a direct retail license
agreement with a Prospective Licensee on or before February 21, 2001, Mossimo
shall pay to Cherokee in perpetuity finder's fees (the "Finder's Fees") equal to
fifteen percent (15%) of Net Revenues (as hereinafter defined). No Finder's Fees
will be due if Mossimo does not enter into a license agreement with a
Prospective Licensee on or before February 21, 2001.
(b) PAYMENT. Mossimo shall pay Finder's Fees to Cherokee within
fifteen (15) days after Mossimo's receipt of any Net Revenues. Payment of
Finder's Fees shall be accompanied by a written report setting forth the Net
Revenues actually received by Mossimo (broken down by date and amount received)
since the date of the last report delivered to Cherokee and such other
information as is necessary to enable Cherokee to verify the Net Revenues
reported by Mossimo. Finder's Fees shall be payable in United States Dollars.
Interest at the maximum legal rate shall be paid on any Finder's Fees not paid
when due.
(c) NET REVENUES. "Net Revenues" shall mean all consideration of
any kind, without deductions or set-offs, received directly or indirectly by or
on behalf of Mossimo and its affiliates, successors and assigns from Target
Corporation or X.X. Xxxxxx Company, Inc., and their respective affiliates,
successors and assigns (collectively, "Prospective Licensees"), from and after
the Effective Date with respect to or by reason of any license, franchise, sale
or assignment of the Mossimo Trademarks. Mossimo shall not enter into any
agreement with Prospective Licensees pursuant to which Mossimo will receive any
consideration that is not included within Net Revenues.
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4. PRESS RELEASE. Within seven (7) days following the effective date of
any licensing agreement entered into between Mossimo and Prospective Licensees,
Mossimo shall issue a press release set forth as Exhibit "B" attached hereto.
5. NO JOINT VENTURE: The parties hereto are not partners or joint
venturers. Cherokee shall have no liability with respect to Mossimo's business
or operations, Mossimo's negotiations with Prospective Licensees or any other
party, or the performance by Mossimo under any contract entered into with
Prospective Licensees or any other party. Mossimo is not responsible for any
actions of any third party regarding any license agreement entered into by
Mossimo.
6. COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of so when executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the successors and assigns of the parties.
8. MISCELLANEOUS. This Agreement expresses the complete understanding of
the parties with respect to the subject matter hereof. All prior understandings
are hereby canceled and no change in any term of this Agreement shall be binding
unless it is in writing and signed by Cherokee and Mossimo. This Agreement shall
be considered made in and shall be interpreted in accordance with the laws of
the State of California. Any disputes arising hereunder shall be arbitrated in
Los Angeles County, California in accordance with the rules and regulations of
the American Arbitration Association and the prevailing party in any such
arbitration shall be entitled to recover its legal fees and expenses from the
other party.
9. NATURE OF AGREEMENT. The parties agree that this Agreement is not a
broker agreement and shall not be treated as such. The parties agree that
neither shall ever assert as a defense to a claim of breach of this Agreement or
any other agreement between them that this Agreement or the Prior Agreements are
illegal agreements.
In witness whereof, the undersigned have executed this Agreement as of
the day and year first above written.
CHEROKEE INC. MOSSIMO, INC.
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxxx
Chairman and CEO Chairman
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