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Exhibit 10.2
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Intellectual Property License Agreement ("Agreement") between Xxxxxx
Xxxxx ("Licensor") and Legacy Athletic Apparel LLC, a Virginia limited liability
company ("Licensee") is entered into as of October 25, 2010 ("Effective Date").
Licensor and Licensee are sometimes individually referred to as a "Party" and
collectively referred to as the "Parties".
WHEREAS, Licensee desires to utilize the Intellectual Property (as defined
below) solely in connection with the development, manufacture, sale and
distribution of the Licensed Property (as defined below) in the Territory (as
defined below) during the Term (as defined below) in accordance with the
remaining terms and conditions in this Agreement; and
WHEREAS, Licensor is willing to grant Licensee an exclusive license (as
defined below) to the use of the Intellectual Property under the terms and
conditions in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, the Parties agree as follows:
1. GRANT OF RIGHTS; ROYALTY
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1.1 Grant; Important Definitions. Licensor grants to Licensee the
exclusive right to use the Proprietary Marks and other Intellectual Property in
connection with the Licensed Products in connection with the operation by
Licensee of its business (the "Business"). Section 1.3 below describes the
exclusive nature of this License. For the purposes of this Agreement:
"Business" means the business of Licensee including its production,
distribution, marketing and sale related to the Licensed Products.
"Intellectual Property" shall mean the Proprietary Marks and any
intellectual property rights of Licensor related to the Proprietary Marks.
"License" means the license granted by Licensor to Licensee in this
Section 1.1;
"Licensed Products" shall mean the individual products that are approved
by Licensor in accordance with this Agreement and thereafter, that are produced,
distributed, marketed and sold by Licensee. Licensed Products will fall into the
following general categories: athletic footwear and athletic apparel;
"Proprietary Marks" shall mean the applied-for marks listed on Exhibit A,
including derivations of them and logos related to the Proprietary Marks or any
of the derivations of them;
"Person" shall include any natural person, as well as any firm,
corporation, limited liability company, trust, partnership, joint venture,
association, or other business organization, under or subject to the laws of any
jurisdiction; and
"Territory" means the following regions: the Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, the Caribbean, Australia, New Zealand,
the Middle East, the United Kingdom, the remainder of Europe, the former Soviet
Union, South Africa and the remainder of Africa, Japan, China, the Philippines,
Korea, and the remainder of Asia. However, that if Licensee does not have more
than de minimus sales in a given region within twenty four months of the
Effective Date, that region will no longer be part of the Territory under this
Agreement and Licensee's rights with respect to that region will be terminated.
Licensee may not sell, distribute, promote or advertise the Licensed Products
outside the Territory. Licensee shall not knowingly seek or otherwise transfer
the Licensed Products to any individual or entity who intends to sell the
Licensed Products outside the Territory or whom Licensee has reason to believe
may intend to sell the Licensed Products outside the Territory. Licensee is
expressly prohibited from selling the Licensed Products through (a) any retail
account that has locations both within and without the Territory unless adequate
assurances are provided to Licensor that sales by the account will occur only in
the Territory; and (b) except as provided elsewhere in this Agreement, any
electronic transmission (whether now in existence or later developed) through
which a consumer is solicited to purchase the Licensed Products by mail,
telephone or electronic means, including, without limitation, televised (whether
broadcast or cable) electronic retailing programs, infomercials, direct response
commercial spots, and computerized shopping services, whether on-line services
or otherwise (collectively, "electronic transmissions"). Should Licensee offer
the Licensed Products through permitted electronic transmissions or on one or
more e-commerce sites on the Internet, Licensee will not fill any orders to
customers that are outside the Territory or ship Licensed Products to
destinations outside the Territory. Immediately upon discovering Licensed
Products outside the Territory, Licensee shall use its best efforts to halt this
distribution of the Licensed Products and shall keep Licensor regularly apprised
of all activities in this regard. Should Licensee breach this Agreement by
acting in violation of the territorial restrictions described in this Section,
these sales will still be subject to the royalty obligations described in the
Agreement. The foregoing royalty obligation shall not limit or prevent Licensor
from availing itself of any other remedy provided in this Agreement for
Licensee's breach of the territorial restrictions.
1.2 Licensee to Act to Enhance Intellectual Property. As a general matter,
Licensee will always act to enhance the image and further the reputation of the
Proprietary Marks and other Intellectual Property. Licensee acknowledges that
there exists a high quality image, prestige and reputation associated with the
Intellectual Property, and Licensee shall use commercially reasonable efforts to
maintain the high quality image, prestige and reputation of the Intellectual
Property throughout the Term (as defined in Section 2 below).
1.3 Exclusive Aspect of License. Except as set forth in Section 4.5,
Licensor will not grant to any other Person a right or license to use the
Intellectual Property in connection with the Licensed Products located in the
Territory and will not itself use the Proprietary Marks in connection with the
Licensed Products in the Territory. Licensor reserves for itself all other
rights and privileges in connection with the Proprietary Marks. The exclusive
rights of the Licensee under this Section shall be extinguished with the
expiration or other termination of this Agreement under Section 7 or otherwise.
For avoidance of doubt, the termination of these obligations shall be
simultaneous with the expiration or other termination of this Agreement whether
or not there is a "phase-out" period under Section 7.
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1.4 Royalty. Licensee shall pay to Licensor an amount equal to Four
Percent (4%) of the Net Sales up to 5,000,000, 8% of Net Sales from 5,000,001 to
12,000,000 and Ten Percent (10%) of Net Sales above $12,000,000 (the "Royalty").
"Net Sales" shall mean the gross sales to Licensee's customers, including
related customers, of all products and services related to the Licensed
Products, less only discounts, returns, allowances and chargebacks and
uncollectible accounts up to five percent (5%) of all gross sales. Licensee will
pay Royalties on the 15th day of each calendar month, in arrears, based on
actual monies received by Licensee on invoices for Licensed Products sold by
Licensee.
Licensee will submit to Licensor along with its Royalty payment a Royalty
statement in the form attached as Exhibit C, even in reporting periods where no
sales have taken place. The first payment and Royalty statement will be due on
the 15th day of the month following the end of the month in which Licensee first
sells Licensed Products. In the event there are returns, the Royalty previously
paid with respect to the returns shall be deducted from future Royalty payments.
All payments will be made in U.S. dollars. All references to dollars or $ in
this Agreement are to U.S. dollars. All Royalty payments which are not made on
the dates specified in this Agreement will accrue interest at the commercial
Prime Rate as published in The Wall Street Journal, plus three percent, or the
highest rate permitted by applicable law, whichever is highest, starting on the
date the Royalty payment was due until paid in full.
Licensee acknowledges and agrees that this Agreement confers no rights
upon Licensee unless expressly provided herein.
2. TERM
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The term of this Agreement (the "Term") shall commence on the Effective
Date and shall continue until termination pursuant to Section 7 or December 31,
2028.
3. PROMOTION AND ADVERTISING
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3.1 Development and Promotion of Business. Licensee shall use commercially
reasonable efforts to develop and promote its Business generally and the
Licensed Products specifically. All advertising, promotion and marketing of the
Licensed Products must be consistent with the high quality, image and standards
of Licensor as communicated to Licensee from time to time.
3.2 Licensee Responsibilities Re Advertising; Process for Approval.
Licensee shall be responsible for all costs (e.g., printing, reproduction,
distribution or otherwise) related to actually placing advertisements, promotion
or other marketing within the Territory. Licensee shall submit to Licensor for
Licensor's review and prior written approval all advertising and promotional
materials and all electronic materials including all website materials that
Licensee intends to use; the right of approval shall encompass media placement
and scheduling, creative execution, all advertising materials, presentations,
all promotional literature and materials, and anything else utilizing the
Proprietary Marks ("Advertisements"). Licensor shall have up to ten (10)
business days to approve or reject in writing all submissions ("Approval
Period"), which approval shall not be unreasonably withheld. Advertisements not
rejected within the Approval Period shall be deemed approved. Subject to the
foregoing, Licensee shall make all changes to Advertisements that Licensor
reasonably requests during the Approval Period, and Licensee shall resubmit the
revised Advertisements to Licensor for a second Approval Period and so on, until
the Advertisements have been approved by Licensor. Any resubmission shall be
approved or rejected by Licensor within five (5) business days, which approval
shall not be unreasonably withheld or delayed. Thereafter, Licensee shall
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similarly submit any Advertisements that differ materially from already approved
Advertisements to Licensor for review and prior written approval in the same
manner. Licensor shall have the right to use or adapt for free for its own
promotional purposes any advertising or promotional materials developed by
Licensee under the provisions of this Section 3.2, whether during the Term or
thereafter. In the event the Advertisements cease to be consistent with
Licensor's then current standards, Licensor may withdraw any previously approved
Advertisements by providing Licensee with sixty (60) days prior written notice.
3.3 Licensor's Right to Supply Materials. From time to time in its sole
discretion, but without any obligation to do so, Licensor may make available to
Licensee visual materials, such as photographs, for use in Licensee's
Advertisements. Licensor shall retain all intellectual property rights in these
materials.
3.4 Publicity and Press Releases. Licensee shall not issue any publicity
or press release regarding Licensor, or Licensee's contractual relations or
activities under this Agreement without first obtaining the prior written
approval of Licensor to the release or publicity, except to the extent required
by law or by a court of competent jurisdiction. Licensor's consent will not be
unreasonably withheld, conditioned or delayed.
3.5 Use of Licensee Identifier. Licensee has the right, without further
approval from Licensor, to use the phrase "a product of Legacy Athletic Apparel"
or words to similar effect, in conjunction with the Proprietary Marks; provided,
however, that the font size for the phrase shall be no greater than 30% of the
font size in which the Proprietary Marks appear.
3.6 Promotional Items. Subject to the terms and conditions of this
Agreement, Licensee may print the Intellectual Property on promotional items
(such as cups, apparel, and similar items) that are given away for free and that
are approved in advance by Licensor in accordance with this Section 3.6
("Promotional Items"). Licensee shall not offer Promotional Items for sale or
distribute them in any manner without the prior written consent of Licensor.
Licensee shall submit to Licensor for prior written approval all proposed
Promotional Items.
4. MANAGEMENT OF THE BUSINESS
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4.1 General Statement. At all times during the Term of this Agreement,
Licensee will operate the Business as a premier manufacturer and seller of
athletic apparel and will maintain the high quality, prestige and standards of
the Business relative to its competitors in the markets where it competes.
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4.2 Approval of Proposed Licensed Products. Licensee may propose products
from time to time, for inclusion as a Licensed Product under this Agreement.
Licensee will submit proposals to Licensor in writing pursuant to the procedure
outlined in Exhibit B. Licensor will approve or reject each and every proposed
Licensed Product pursuant to the procedure described in Exhibit B. Licensee may
not use the Intellectual Property on new products until Licensor consents in
accordance with the process outlined in Exhibit B. Proposals for new Licensed
Products will include the distribution channels in which Licensee intends to
sell, any relevant merchandising information, and the anticipated retail price.
4.3 Approval of Use of Intellectual Property. The Parties acknowledge that
the faithful representation of the Proprietary Marks, as well as the other
Intellectual Property of Licensor, is mandatory on the part of Licensee with
respect to any reproduction issued by Licensee, whether appearing on the
Licensed Products or in print or otherwise displayed in promotions, advertising
or marketing materials. Licensee further agrees that the Proprietary Marks will
always be faithfully and exactly reproduced, unless prior written authorization
for modification is received from Licensor. Each new or different use of the
Intellectual Property on a Licensed Product shall be submitted to Licensor for
approval pursuant to the approval procedures set forth above in this Agreement.
Licensor shall reply within ten (10) business days of submissions. Failure to so
reply may be considered implied approval and Licensee may proceed as if actual
approval had been received. Licensee shall forward by email a reminder notice to
Licensor on the third business day following issue of its original notice. If
Licensor objects to a submission, any resubmission shall be approved or rejected
by Licensor within five (5) business days thereof. Consistent with terms and
intent of this Agreement, Customers of Licensee shall have point of purchase
("POP") usage of the intellectual property/advertising media of Licensee to
promote sales of the intellectual properties while this agreement remains in
force and effect.
4.4 Labeling Requirements: All Licensed Products shall contain a label or
hang-tag approved by Licensor; the words "by Xxxxxx Xxxxx" shall be placed on
the hang tag unless Licensor directs otherwise. On all labels, hang-tags and
Licensed Products the circle "R" ((R)) or "TM" ((TM)) as appropriate shall
appear denoting trademark registration, registration in the Territory, or
pending registration, and where applicable, all items subject to copyright
protection shall bear a proper and complete circle "C" ((c)) copyright notice as
may be specified by law. Licensor shall have the right from time to time to
designate the exact symbols or language to be used by Licensee to denote
ownership by Licensor of the Intellectual Property. Licensee agrees to maintain
a strict, accurate and current inventory of all labels throughout the
manufacturing process of the Licensed Products so as to preclude any diversion
of the labels to persons or companies other than authorized licensees. No
additional labels, hang-tags or identification shall appear on the Licensed
Products unless prior written approval of Licensor is obtained; provided,
however, that Licensee may include a separate label for care, content, size and
country of origin, as may be required by any industry or trade group, or by law.
Furthermore, Licensee will comply with all laws and regulations of the Territory
regarding marking legends or labeling on Licensed Products, cartons and
packaging, and any written requirements furnished to Licensee that Licensor may
establish with regard to the markings. Subject to a superseding order from a
governmental authority or industry group, Licensee will have thirty days
following receipt of any new requirements to effect full compliance on Licensed
Products to be manufactured after that point.
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4.5 Maintenance of Licensed Product in Marketplace. Licensee shall
determine on a commercially reasonable basis whether or not to maintain a
Licensed Product. Licensee shall inform Licensor in writing of its decision to
remove a Licensed Product from its continuing sales and marketing efforts. If an
entire line of Licensed Products are removed from commerce consistent with this
Section 4.5, Licensor may pursue independent agreements with third Persons in
connection with the discontinued product line.
4.6 Designs and Inventions. Any designs or inventions proposed by Licensee
or and not using any of the Intellectual Property, will be the exclusive
property of Licensee. Any matter for which a patent, copyright, service xxxx or
other trademark may be obtained and that is proposed by Licensor will be the
exclusive intellectual property of Licensor. This is true even if Licensor,
directly or indirectly, is in an employment relationship with Licensee. Utility
and design patents are not considered protected intellectual property under this
Agreement.
4.7 Consumer Warranty. On each Licensed Product sold, Licensee will at its
expense, provide and honor at a minimum the industry standard warranty to the
consumer. Licensee will honor its warranty directly with the consumer according
to its terms, notwithstanding that to do so may require Licensee to expend time
and money after the expiration or other termination of this Agreement. Any
recall of any Licensed Product will be entirely at Licensee's expense.
4.8 Inspections of Facilities by Licensor. Licensor has the right, but not
the obligation, to inspect Licensee's places of business, and the place of
business of any affiliate, permitted sublicense or subcontractor of Licensee who
manufactures, warehouses, distributes or transports the Licensed Products
("Licensee's Affiliates"), at reasonable times and with not less than three days
written notice, to assure compliance with Licensor's quality specifications.
Licensee and Licensee's Affiliates will cooperate fully in the inspections. If
Licensor determines, in its sole reasonable discretion, that a Licensed Product
does not comply with the quality specifications of the sample approved by
Licensee prior to production, or the handling, storage or transportation of
Licensed Product is otherwise in violation of the terms of this Agreement,
Licensor shall give Licensee written notice of the violation. In making these
inspections, Licensor will take reasonable steps not to interfere with the
business being conducted on the premises. Notwithstanding the inspection rights
granted to Licensor under this Section, Licensee shall be financially
responsible for all damages related to a breach of this Agreement by any of
Licensee's Affiliates.
4.9 Inspections of Licensee's Books and Records. Licensee agrees that
Licensor or its agent will have the right to examine and copy all books and
accounts of Licensee which bear on the accuracy of the Royalty statements and
payments of Licensee to Licensor. Receipt or acceptance by Licensor of any
statements or payments will not preclude Licensor from questioning or objecting
to the correctness thereof.
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4.10 Maintenance of Licensee's Books and Records. Licensee agrees to
maintain books of account and records in accordance with Generally Accepted
Accounting Principles (GAAP) sufficiently accurate to enable ascertainment of
royalties due and to preserve the books of account and records for at least
three years after the termination of this Agreement. Licensor, or its agent,
will have the right to audit, at Licensor's expense, the books of account and
records from time to time (but not more frequently than once during any
consecutive six month period so long as there has been no event of default by
Licensee under this Agreement) at Licensee's facilities during normal business
hours upon not less than 10 days written notice to Licensee. Licensee agrees to
cooperate with Licensor in all reasonable respects in the examination or audit.
Except as set forth in Section 4.11 below, all audit costs will be borne by
Licensor.
4.11 Result of any Audit. Should any audit by Licensor reveal that less
than 10% of the Royalties for any calendar year or portion of the year remain
unpaid, Licensee will pay this amount immediately, plus interest at the maximum
rate permitted by law. Should any audit by Licensor reveal that 10% or more of
the Royalties for any calendar year or portion thereof remain unpaid, Licensee
will pay this amount immediately, plus interest at the maximum rate permitted by
law, plus reimburse Licensor for its actual costs and expenses in conducting the
audit. The payment of these amounts will not impact Section 7.1.7.
5. OWNERSHIP OF INTELLECTUAL PROPERTY; MAINTENANCE OF RIGHTS; INFRINGEMENT
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5.1 Licensor Warranties and Representations. Licensor has filed the
documentation necessary for registration of the Proprietary Marks and the USPTO
has published for opposition. Licensor warrants and represents to the best of
its personal knowledge that (i) it has full legal right to use of the
Intellectual Property, (ii) it is duly and exclusively authorized to license or
sublicense the use, exploitation and commercialization of the Intellectual
Property in the Business during the Term, and (iii) that it has the full right,
power and authority to grant to Licensee the rights conveyed in this Agreement
without in any way violating or infringing upon the rights of any other Party.
5.2 Ownership of Intellectual Property. Subject only to the License, all
uses of the Intellectual Property shall inure to the benefit of Licensor.
Licensee acknowledges and agrees that, as between Licensor and Licensee, at all
times before, during and after the Term, Licensor is and will be the sole and
exclusive owner of any and all Intellectual Property, including all Proprietary
Marks and any other trademarks or service marks used by Licensor in connection
with its business other than the Business (collectively with the Proprietary
Marks, the "Licensor Marks"), and Licensee will not attempt in any manner
whatsoever, to state any claim of ownership whatsoever to any of the Licensor
Marks. Licensee shall not (a) challenge the validity of the ownership of the
Licensor Marks by Licensor or any application for registration, or (b) contest
the fact the Licensee's rights under this Agreement are solely those of a
licensee and terminate upon expiration or termination of this Agreement.
Licensee acknowledges that the Licensor Marks have acquired secondary meaning
and that Licensee shall not acquire any rights in the Licensor Marks, other than
the License. Licensee expressly recognizes that all rights relating to the
Intellectual Property and any good will derived from it are vested exclusively
in the Licensor. Licensee assigns and transfers to Licensor all interests it may
have in the Intellectual Property by virtue of its sales or the goodwill derived
from the sales. Licensee shall not register, have registered, or use any
trademark, service xxxx or domain name containing or confusingly similar to any
of the Licensor Marks.
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5.3 Licensor Reservation of Rights. All rights in the Intellectual
Property other than those specifically granted by the License are reserved by
Licensor for its own use and benefit. Licensee agrees that it will make no
direct or indirect use of the Intellectual Property in connection with any other
business and that it will not permit any other Person to use the Intellectual
Property without the prior written consent of Licensor, which consent may be
withheld by Licensor in its sole and absolute discretion.
5.4 Preservation of Ownership Rights. During the Term, Licensee will take
all actions necessary to insure that Licensor's ownership of any and all
Proprietary Marks and other rights in connection with the Licensed Products
remain exclusively in the name of Licensor. Licensee agrees to undertake the
registration and maintenance of Licensor's rights in and to any and Proprietary
Marks and other rights in connection with the Licensed Products. Licensee
irrevocably appoints Licensor its attorney in fact to cancel any recordation of
any ownership or use of the Proprietary Marks by Licensee. Licensee shall
execute at any time, whether during or after the term of this Agreement, any
documents reasonably requested by Licensor, including a written confirmation of
Licensor's exclusive ownership rights in the Proprietary Marks.
5.5 Licensee's Further Obligations Regarding Preservation of Ownership
Rights. Licensee shall promptly notify Licensor of any information obtained
regarding infringements or imitations by third Persons of any Intellectual
Property, or any act of unfair competition by third Persons relating to the
Business. Upon request by Licensor, Licensee shall cooperate reasonably and in
good faith assist Licensor to the extent necessary to protect any of Licensor's
rights in the Intellectual Property, at Licensor's sole cost and expense.
5.6 Actions Against Infringers. In the event of any infringement or any
act of unfair competition, Licensor shall have the right, but not the
obligation, to take any steps and institute any suits or proceedings as Licensor
may deem advisable to prevent the infringements, limitations or acts and to
secure damages and other relief, and generally to take all steps as may be
advisable for the full protection of the rights of Licensor. At Licensor's
request Licensee shall fully cooperate with Licensor to stop the infringement or
acts, including assisting Licensor in obtaining counsel to Licensor's
satisfaction, and Licensee shall join with Licensor as a party to any action
brought by Licensor for this purpose. Licensor shall bear all of the expenses
and costs in connection with any action to protect its rights. Any amounts
recovered in any action shall belong solely to Licensor. Licensee shall not take
or participate in any action with respect to the Intellectual Property without
the Licensor's prior written approval, which Licensor may withhold in its sole
discretion.
5.7 Survival of Licensee's Obligations. The obligations of Licensee under
this Section will survive the expiration or other termination of this Agreement.
6. INDEMNIFICATION AND INSURANCE
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6.1 Licensee Indemnification; Advancement of Defense Costs. Licensee shall
indemnify, defend (through the first level of an appeal process) and hold
harmless Licensor, its officers, directors, employees and agents ("Licensor
Indemnitees") of and from any and all liability, claims, causes of action and
suits (whether direct or derivative), damages, settlements, and any other costs
and expenses (including reasonable attorneys' fees and related costs), for which
any of the Licensor Indemnitees may become liable or be compelled to pay in any
action or claim against any of the Licensor Indemnitees by reason of, related to
or arising from (a) the operation or condition of the Business, including the
violation of any law, regulation or ordinance, (b) any negligent act,
misfeasance or non-feasance by the Licensee or any of its agents, contractors or
employees, or (c) any breach of any representation, warranty, covenant or
agreement of Licensee under this Agreement (the "Licensor Indemnified
Liabilities"). If and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Licensee agrees to make the maximum
contribution to the payment and satisfaction of each of the Licensor Indemnified
Liabilities permissible under applicable law.
Licensee also agrees that it shall be obligated to pay all expenses and
costs to or on behalf of each Licensor Indemnitee related to any Licensor
Indemnified Liability, on an as-incurred and current basis in advance of the
disposition of the proceeding, provided that the Licensor Indemnitee shall repay
all amounts advanced if a final, non-appealable adjudication establishes that
the Licensor Indemnitee has engaged in conduct for which indemnification is not
available as a matter of law or public policy. If Licensor (or its affiliate)
pays or causes to be paid, for any reason, any amounts otherwise indemnifiable
under this Agreement or under any other indemnification agreement (whether
pursuant to limited partnership agreement, operating agreement, bylaw, charter
or other agreement), then Licensor (or its affiliate) shall be fully subrogated
to all rights of the Licensor Indemnitee for which the payment was made and
Licensee shall reimburse all these payments directly to Licensor.
6.2 Licensor Indemnification; Advancement of Defense Costs. Licensor shall
indemnify, defend (through the first level of an appeal process)and hold
Licensee, its officers, directors, employees, contractors and agents of any
kind, professional or otherwise ("Licensee Indemnitees") harmless of and from
any and all liability, claims, causes of action and suits (whether direct or
derivative), damages, settlements, and any other costs and expenses (including
reasonable attorneys' fees and related costs) for which any of the Licensee
Indemnitees may become liable or be compelled to pay in any action or claim
against any of the Licensee Indemniteees by reason of, related to or arising
from (a) any claim that use of the Proprietary Marks in connection with the
Business in accordance with the terms and conditions of this Agreement,
infringes upon the trademark, trade name, trade dress or other intellectual
property right of any third Person, or (b) any breach of any representation,
warranty, covenant or agreement of Licensor in this Agreement (the "Licensee
Indemnified Liabilities"). If and to the extent that the foregoing indemnity may
be unenforceable for any reason, the Licensor agrees to make the maximum
contribution to the payment and satisfaction of each of the Licensee Indemnified
Liabilities permissible under applicable law.
Licensor also agrees that it shall be obligated to pay all expenses and
costs to or on behalf of each Licensee Indemnitee related to any Licensee
Indemnified Liability, on an as-incurred and current basis in advance of the
disposition of the proceeding, provided that the Licensee Indemnitee shall repay
all amounts advanced if a final, non-appealable adjudication establishes that
the Licensee Indemnitee has engaged in conduct for which indemnification is not
available as a matter of law or public policy. If Licensee (or its affiliate)
pays or causes to be paid, for any reason, any amounts otherwise indemnifiable
under this Agreement or under any other indemnification agreement (whether
pursuant to limited partnership agreement, operating agreement, bylaw, charter
or other agreement), then Licensor (or its affiliate) shall be fully subrogated
to all rights of the Licensee Indemnitee for which the payment was made and
Licensee shall reimburse all these payments directly to Licensee.
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6.3 Notice by Indemnified Party. An indemnified party ("Indemnitee") shall
give the indemnifying party ("Indemnitor") prompt written notice of the
assertion of any claim, suit, action or proceeding. The Indemnitor shall have
the exclusive right at its option, by giving written notice to the Indemnitee in
which the Indemnitor confirms in writing that the Indemnitee is indemnified
hereunder with respect to the applicable claim, cause of action, or suit, to
defend against, negotiate, settle or otherwise deal with the claim, cause of
action or suit and to have the Indemnitee represented by counsel selected by the
Indemnitor and reasonably satisfactory to the Indemnitee; provided that the
Indemnitee may participate in any proceeding with counsel of its choice and at
its own expense. However, if, either (a) the Indemnitor does not exercise its
option to confirm in writing that the Indemnitee is completely indemnified as
described above in this Section 6.3, or (b)at any time in the good faith opinion
of counsel for the Indemnitee, a legal position that the Indemnitor wishes to
take actually conflicts with the position of another party being represented by
counsel chosen by the Indemnitor and representing the Indemnitee, then the
Indemnitor shall thereafter be responsible for the advancement of defense costs
in a manner consistent with Sections 6.1 and 6.2 above with respect to the
expenses and costs related to the Indemnitee's separate legal representation.
Where the Indemnitor is supplying the defense, the Indemnitee shall cooperate in
a commercially reasonable manner with the Indemnitor in all respects in
connection with any defense as may be made; provided, however, that the
Indemnitee must approve any settlement of any claim, demand or action to the
extent that the settlement imposes any restrictions on or requires the
Indemnitee to contribute financially to the settlement or otherwise give up a
material right.
6.4 Insurance. Licensee shall maintain, at Licensee's expense,
comprehensive commercial general liability insurance with contractual indemnity
coverage with combined single limits of not less than One Million Dollars
($1,000,000.00) per occurrence and at least Five Million Dollars ($5,000,000.00)
in the aggregate for personal injury and property damage. The deductible or
retention amount shall be no greater than $50,000.00. The insurance shall
provide coverage insuring against loss, damage or liability for injury or death
to persons and loss or damage to property and shall contain no exclusion with
respect to property of Licensor. All insurance policies shall be issued by a
carrier with a current A.M. Best Company rating of at least A:VII. These
certificates shall reflect that Licensor, its officers, directors, employees and
agents are "additional insureds'" and "loss payees." The insurance policy will
remain in effect for as long as any Licensed Product is sold and for a period of
two years thereafter. The insurance policy will provide that 30 days written
notice be furnished to Licensor prior to cancellation, or prior to any material
modification or change. On the Effective Date and subsequently on Licensor's
written request, Licensee will furnish Licensor within forty-five (45) days of
the date of the written request with a certificate from the insurer evidencing
that insurance as then currently in effect in accordance with the provisions of
this Agreement. Subject to Licensor's written consent, which shall not be
unreasonably withheld, conditioned or delayed, Licensee may fulfill these
obligations through a policy or policies issued to it and/or to the manufacturer
of the Licensed Products.
6.5 Survival of Parties' Obligations. The obligations of both Parties
under this Section will survive the expiration or other termination of this
Agreement
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7. EVENTS OF DEFAULT
-----------------
7.1 Termination With Cause by Licensor: Licensor may terminate this
Agreement with cause, effective upon written notice delivered pursuant to the
notice provisions of this Agreement, if any of the following events occurs (each
an "Event of Default"):
7.1.1 Licensee is in default in the performance of any of its obligations
under this Agreement (except for scheduled payments of Royalties and other
Events of Default enumerated below) and the default has remained uncured
(if the same is susceptible of cure) for a period of 60 days from the date
of the Event of Default;
7.1.2 Licensee has failed to make a scheduled Royalty payment as required
under this Agreement, and this failure has lasted more than 10 days;
7.1.3 Licensee is placed in receivership, reorganization, liquidation or
bankruptcy, or makes a petition for voluntary bankruptcy, an assignment
for the benefit of creditors, or becomes insolvent and Licensee remains in
this status for a period of 60 days;
7.1.4 The management or control, or both, of Licensee's business by law,
decree, ordinance or other governmental action, is made subject to the
control or direction of any governmental agent, officer, appointee,
designee or any other person not a Party to this Agreement and Licensee
remains in this status for a period of 60 days;
7.1.5 The Licensed Products are not materially of the quality
specifications required under this Agreement, as determined by Licensor in
its sole reasonable discretion, or are not manufactured in strict
compliance with national and local laws and regulations in their country
of manufacture, and this status remains uncured for a period of 30 days
after notice either from Licensor or a third Person regarding one of these
failings;
7.1.6 Licensee changes its corporate structure or tax classification;
7.1.7 An inspection of the books and records of Licensee by Licensor
pursuant to Section 4.9 determines that Licensee has understated the
Royalties due Licensor by 10% or more during any period;
7.1.8 In the event of any attempted or actual sale, transfer or assignment
by Licensee of this Agreement or any of the rights granted to Licensee, or
any attempted or actual transfer, assignment or delegation by Licensee of
any of the responsibilities assumed by it, in violation of the terms of
this Agreement;
11
7.1.9 A failure by Licensee to achieve one of the Performance Guarantees
set forth in this Section 7.1.9. The "Performance Guarantees" are as
follows: the Net Sales (as defined in Section 4.1) for the period (a)
commencing on the first day of a shipment under this Agreement (the "First
Shipping Date") and concluding twelve months after the First Shipping
Date, are at least Five Million Dollars ($5,000,000.00); or (b) from the
first day of the 13th month after the First Shipping Date and concluding
twenty-four months after the First Shipping Date, are at least Ten Million
Dollars ($10,000,000.00); or (c) from the first day of the 25th month
after the First Shipping Date and concluding thirty-six months after the
First Shipping Date, and thereafter for each successive twelve-month
period, are at least Fifteen Million Dollars ($15,000,000.00);
7.1.10 In the event of the use by the Licensee of the Intellectual
Property in any manner intentionally deceptive or misleading to the public
or where the Licensed Products may be harmful or dangerous to the public,
all in Licensor's sole reasonable judgment, and the failure of Licensee to
remedy the event within 30 days after receipt of notice from Licensor
citing to this use;
7.1.11 In the event of the use by the Licensee of the Intellectual
Property in a manner that materially damages or impairs the reputation or
value of the Intellectual Property, in Licensor's sole reasonable
judgment, and the failure of Licensee to remedy the event within 30 days
after receipt of notice from Licensor citing to this use; or
7.1.12 In the event the Licensee ceases operations or if Licensee fails to
use the Intellectual Property as contemplated in this Agreement, and, in
either case, does not provide Licensor with evidence, to Licensor's sole
reasonable satisfaction, that Licensee has re-started operations with the
intention to continue to do business in the normal course or of Licensee's
use of the Proprietary Marks both as to quantity and regularity consistent
with normal operations, as applicable, within 30 days of receiving written
notice from Licensor requesting this evidence.
Licensee acknowledges that there is no cure period with regard to an Event of
Default under Sections 7.1.6 through 7.1.09.
7.2 Impact of Termination With Cause by Licensor: If this Agreement is
terminated with cause by Licensor as described above, the License is immediately
terminated and Licensee will immediately cease the use of all Intellectual
Property and will cease the sale of all Licensed Products. At its expense,
Licensee will cause all advertising/reference to the Intellectual Property to be
removed from the product. In addition, and at its expense, Licensee will
immediately destroy all advertising and marketing materials bearing the
Proprietary Marks or other Intellectual Property. Within ten (10) business days
after Licensor's request, Licensee will sign under penalty of perjury and
deliver to Licensor an acknowledgment that Licensee has complied with this
Section. Licensee further agrees, represents and warrants that it will not use,
directly or indirectly, any other xxxx or trade name confusingly similar to any
of the Intellectual Property. Licensee's obligations to pay Royalties shall
continue with respect to all sales of Licensed Products through the date of
termination and thereafter by retailers with inventory of Licensed Product, if
any. This Section 7.2 is solely for the benefit of Licensor and it may modify
these provisions for the benefit of Licensee in its sole and absolute
discretion.
12
7.3 Termination With Cause by Licensee: Licensee may terminate this
Agreement with cause, effective upon written notice pursuant to the notice
provisions of this Agreement, if any of the following events occurs ("Licensor's
Event of Default"):
7.3.1 Licensor is in default in the performance of any of its obligations
under this Agreement and the default has remained uncured (if the same is
susceptible of cure) for a period of 60 days from the date of effective
notice from Licensee regarding the default;
7.3.2 Licensor violates the exclusivity of the granted License during the
Term either on its own part or, by purporting after the Effective Date to
grant a written license to a third Person to in any way use the
Intellectual Property in connection with products that compete with the
Licensed Products and that are intended for sale within the Territory, or
Licensor violates the noncompetition provision set forth in Section 10.3
of the Operating Agreement; or
7.3.3 Any material inaccuracy in Licensor's warranties made in this
Agreement that cannot be cured by Licensor within a reasonable period of
time.
Licensor acknowledges that there is no cure period with regard to a Licensor's
Event of Default under Section 7.3.2.
7.4 Impact of Termination With Cause by Licensee: In the event of a
termination with cause by Licensee, then Licensee will have a "phase-out period"
of 12 months from the date of termination. Licensee shall continue to comply
with the provisions of this Agreement during the phase-out period including
Section 7.6. The License shall remain in full force and effect during the
phase-out period, except that the License shall not be exclusive. After the
phase-out period allowed under Section 7.6, the License is terminated.
7.5 Natural Expiration: If this Agreement expires, not as a result of
termination by either Party, then Licensee will have a "phase-out period" of six
months from the date of expiration. Licensee shall comply with the provisions of
Section 7.6 dealing with the "phase-out period". After the phase-out period
allowed under this Agreement, the License is terminated.
7.6 Phase-Out Period Requirements: During the phase-out period, the License
shall not be exclusive. The following shall apply:
7.6.1 Licensee shall market and sell any Licensed Product on hand within
the Territory. Any work-in-progress may be completed and added to
inventory but all other manufacturing must cease as of the date of
termination or expiration, as the case may be.
13
7.6.2 Licensee agrees and acknowledges that during the phase-out
period it will continue to be bound by all of the terms of this Agreement,
including, but limited to, those relating to the marketing and sale of
Licensed Products. Licensed Products not sold by Licensee in accordance
with this Section by the end of the phase-out period shall be destroyed at
Licensee's expense, or may be sold only after all evidence of the
Intellectual Property has been removed prior to sale and at Licensee's
expense (which removal may be inspected by Licensor, its agents or
representatives). To be clear, if it is not possible to remove all of the
Intellectual Property, then the Licensed Product shall be destroyed at
Licensee's expense;
7.6.3 At the conclusion of the phase-out period, all materials,
including all advertising, promotion, marketing, packing and other
materials bearing the Intellectual Property shall be destroyed at
Licensee's expense;
7.6.4 The expiration or other termination of this Agreement for
whatever reason shall not relieve Licensee of its duties and obligations
under this Agreement, including (but not limited to) the obligation to
furnish Royalty statements and payments of Royalties;
7.6.5 Within ten (10) business days after Licensor's request,
Licensee will sign under penalty of perjury and deliver to Licensor an
acknowledgment that Licensee has complied with its obligations under this
Section 7.6.
8. FURTHER REPRESENTATIONS AND WARRANTIES OF THE PARTIES
-----------------------------------------------------
Each Party further warrants and represents as follows:
8.1 Corporate Standing and Authority. To the extent not a natural person,
each is a corporation or limited liability company duly organized, validly
existing, and in good standing under the laws of its state of incorporation or
formation, and has all necessary power to enter into and perform its obligations
under this Agreement.
8.2 No Negative Impact on Status Quo. The execution, delivery and
performance of this Agreement does not now and will not result in a default or
an event that, with notice or lapse of time or both, would be a default or
violation of any agreement, obligation, contract, instrument, judgment, order or
award of any court, arbitrator, or administrative officer, or any law, rule or
regulation by which such Party is bound.
8.3 Authority. It has the right and authority to enter into this
Agreement.
8.4 Survival. Each of the Parties' representations and warranties in this
Section will survive the expiration or earlier termination of this Agreement.
9. GENERAL
-------
9.1 Notices. Any notice, demand, consent, election, offer, approval,
request, or other communication (collectively a "notice") required or permitted
under this Agreement must be in writing and either delivered personally, sent by
certified or registered mail, postage prepaid, return receipt requested or sent
by overnight courier. A notice must be addressed to a Party at the Party's last
known address. A notice delivered personally will be deemed given on the date of
delivery. A notice that is sent by mail will be deemed given five (5) business
days after it is mailed. A notice sent by a nationally recognized overnight
courier will be deemed given the first business day after deposit with that
courier. Until further notice, the address for all purposes, and the person
designated to act on behalf of an entity is as set forth below:
14
If to Licensee: With copy to:
If to Licensor: With copy to:
Any correctly addressed notice that is refused, unclaimed or undelivered
because of an act or omission of the Party to be notified shall be considered to
be effective as of the first day that the Notice was refused, unclaimed or
considered undeliverable by the postal authorities, messenger or overnight
delivery service. The Parties shall have the right from time to time, and at any
time, to change their respective addresses, and each shall have the right to
specify as its address any other address within the United States of America, by
giving to the other Party prior written notice thereof, in the manner prescribed
herein; provided, however, that to be effective, any change of address must be
actually received (as evidenced for example, by a return receipt).
9.2 Waiver; Amendments and Modifications. Failure or delay by either Party
to insist on the strict performance of any covenant, term, provision or
condition, or to exercise any option contained, or to pursue any claim or right
arising in this Agreement, shall not constitute or be construed as a waiver of
that covenant, term, provision, condition, option, claim or right. Any waiver by
either Party shall not constitute or be construed as a continuing waiver of any
subsequent default. Any amendments or modifications to this Agreement shall be
in writing and executed by the Parties to this Agreement.
9.3 Right to Injunctive Relief. Each Party recognizes that, in the event
that one Party fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to the other Party; therefore, each Party agrees that in that event, the
other Party, if it so requests, shall be entitled to temporary and permanent
injunctive relief, without the necessity of proving actual damages. In
connection with any injunctive relief that may be sought by a Party, the other
Party acknowledges that the breach by it of any of its obligations under this
Agreement, other than the payment of money, will result in immediate and
irremediable damage to that Party. Each Party acknowledges and admits that there
is not an adequate remedy of law for this type of breach and agrees that in the
event of this type of breach, the Party seeking relief shall be entitled to seek
equitable relief by way of temporary and permanent injunctions (both mandatory
and prohibitory) and any other and further relief, at law or in equity, as any
court with jurisdiction may deem just and proper. The other Party expressly
waives any requirements or obligations of the Party requesting relief to post
any bond or provide any security as a condition to obtaining the injunctive
relief. Resort to this equitable relief, however, shall not be construed to be a
waiver of any other rights or remedies that Party may have for damages or
otherwise
15
9.4 Governing Law; Jurisdiction; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law, except to the
extent that the applicability of the law is preempted by Federal law. In the
event of any dispute under or related to this Agreement or any of the referenced
agreements or any of the matters described or contemplated in this Agreement,
exclusive jurisdiction and venue shall reside in the County of Los Angeles with
each Party expressly and irrevocably submitting to jurisdiction and venue in Los
Angeles County and waiving any right to any other jurisdiction or venue for any
reason whatsoever. Service may be effected by any method prescribed by law, or
by transmittal of a copy of the complaint or other appropriate pleading by
registered mail, return receipt requested, to the address specified in the
notice provision.
9.5 Mandatory Arbitration. To the maximum extent permitted by law:
(A) Any controversy or claim arising out of or relating to this Agreement,
or otherwise related to the compliance by either Party with its obligations,
shall be finally determined by arbitration in Los Angeles County, California in
accordance with the Arbitration Rules of the American Arbitration Association
(the "Rules") then in effect, except as those Rules are amended by this Section.
There shall be a single arbitrator who shall be a retired judge. The decision of
the arbitrator shall be consistent with then California law and shall include
written findings of fact and conclusions of law. THE PARTIES UNDERSTAND AND
ACKNOWLEDGE THAT UNDER THIS SECTION, EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
CONNECTION WITH ANY ARBITRABLE CONTROVERSY OR CLAIM. Any Party to this Agreement
may submit any controversy or claim to arbitration. Judgment on the award
rendered by the arbitrator may be entered by any court having jurisdiction. The
prevailing Party shall be entitled to reasonable attorneys' fees and costs. The
Parties agree that Los Angeles County, California is the proper venue for any
arbitration. The Parties acknowledge that enforcement of the provisional
remedies described in Section 9.3 above will require that one or more motions be
set in a court of law.
(B) IF A COURT OVERRIDES THE ARBITRATION PROVISION AND REQUIRES A COURT
TRIAL OR IF THE ADJUCIATION OF ISSUES UNDER THIS AGREEMENT INCLUDES ISSUES,
CLAIMS OR PARTIES THAT MAY NOT BE RESOLVED IN AN ARBITRATION, EACH PARTY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY SUPPLEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE MAY BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH ANY RELATED TRANSACTION AND AGREES THAT
ANY ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
16
9.6 Severability. A determination that a provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision which shall remain in full force and effect, and any
determination that the application of any provision of this Agreement to any
Person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of the provision as it may apply to any other Persons
or circumstances.
9.7 Entire Agreement. This Agreement contains the entire understanding and
agreement between the Parties with respect to the matters set forth in it and
supersedes and shall prevail over all prior and contemporaneous understandings
and agreements, whether oral or written, among the Parties. All written or oral
term sheets and statements regarding the subject matter of this Agreement are
superseded and of no effect.
9.8 Attorneys' Fees and Associated Costs. Licensee will pay all fees and
costs incurred by it and by Licensor in connection with the documentation of
this Agreement and the transactions and agreements contemplated by this
Agreement, including each of the exhibits. This reimbursement payment to
Licensor shall be made by Licensee Legacy Athletic Apparel LLC within thirty
days of the Effective Date. If a lawsuit, arbitration or other proceedings are
instituted by any Party to enforce any of the terms or conditions of this
Agreement against any other Party, the prevailing Party in the litigation,
arbitration or proceedings (including any proceeding under the United States
Bankruptcy Code) shall be entitled, as an additional item of damages, to the
reasonable costs of collection, its reasonable attorneys' and other professional
fees and costs (including, but not limited to, expert, investigation and witness
fees), court costs, arbitrators' fees, arbitration administrative fees, travel
expenses, and other out-of pocket expenses or costs, as may be fixed by the
court, arbitrator or other judicial or quasi-judicial body, whether or not suit
is filed and whether or not the litigation or other proceedings arrive at a
final judgment or award. In addition to the foregoing award of attorneys' fees,
the prevailing Party shall be entitled to its attorneys' fees incurred in any
post-judgment proceedings to enforce any judgment or award. This provision is
separate and several and shall survive the merger of this provision into any
judgment. For the purposes of this Section, any Party receiving an arbitration
award or a judgment for damages or other amounts shall be deemed to be the
prevailing Party, regardless of the amount of the damage awarded or whether the
award or judgment was based on all or some of the Party's claims or causes of
action.
9.9 No Assignment, Sublicensing or Hypothecation. Licensee may not assign,
delegate, sublicense or hypothecate any of its rights and duties under this
Agreement without the prior written consent of Licensor. This approval will not
be unreasonable withheld, conditioned or delayed. Any attempted assignment,
sublicense or hypothecation by Licensee without the prior written consent of
Licensor shall be void ab initio and shall constitute a "for cause" event under
Section 7.1.8. "Hypothecation" under this Section includes any pledge, mortgage,
grant of liens in or upon, grant of a security interest in, use as collateral or
otherwise borrowing upon the License or any of Licensee's rights under this
Agreement. For avoidance of doubt, Licensor shall have the right to assign this
Agreement in a transaction or series of transactions, to (i) a purchaser of the
Proprietary Marks, (ii) a Person who acquires a majority of the units or other
equity interests of the Licensor or controlling affiliate of Licensor (whether
through sale, merger, operation of law, or otherwise) or (iii) to any other
Person that controls, is controlled by, or is under common control with the
Licensor.
17
9.10 Contracts with Third Persons and Responsibility for Default: Subject
to Licensor's review of and consent to the written agreement between Licensee
and any third Person engaged, which consent will not be unreasonably withheld,
delayed or conditioned, Licensee may contract the actual manufacture and
distribution of the Licensed Products to one or more third Persons. At a
minimum, any third Person contract shall require the third Person contractor to
comply with the relevant provisions of this Agreement. Should any contractor
violate the relevant terms of this Agreement (beyond any applicable cure period,
if the breach is susceptible to cure), it will be considered a default by
Licensee under Section 7.3. Further, Licensee shall be primarily responsible to
pay Licensor any damages sustained by Licensor that are caused by the
contractor's breach.
9.11 Further Cooperation. Whenever, and so often as, requested by a Party,
the other Party will promptly execute and deliver, or cause to be executed and
delivered, all other and further instruments, documents or assurances, and
promptly do or cause to be done all other and further things as may be necessary
and reasonably required in order to further and more fully discharge and perform
the obligations and agreements of the Parties, and to more fully vest in the
requesting Party, all rights, interests, powers, benefits, privileges and
advantages conferred, or intended to be conferred, upon it by this Agreement.
9.12 Voluntary and Knowing Signature. Each Party represents that the terms
and conditions of this Agreement and the transactions contemplated by the
Parties have been fully explained to that Party, that Party has consulted (or
has had the opportunity to consult) independent legal and tax advisors and that
Party has voluntarily elected to enter into this Agreement. In the event any
claim is made by any Party relating to any conflict, omission or ambiguity in
this Agreement, no presumption or burden of proof or persuasion shall be implied
by virtue of the fact that this Agreement was prepared by or at the request of a
particular Party.
9.13 Further Instruments. All instruments, certificates and other
documents to be executed and delivered under this Agreement by any Party shall
be in a form reasonably satisfactory to counsel for that Party.
9.14 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of the Parties to the extent this
Agreement is assignable. This Agreement is not intended to confer any rights or
remedies upon Persons that are not signatories to this Agreement.
9.15 Counterparts and Facsimile Signatures. This Agreement may be executed
in any number of original, fax or emailed counterparts, and all counterparts
shall be considered together as one agreement. A faxed or emailed counterpart
shall have the same force and effect as an original signed counterpart. Each of
the Parties forever waives any rights to raise the use of a fax machine to
deliver a signature, or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a fax machine or email, as a
defense to the formation of a contract.
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9.16 Section Headings. The various section headings are inserted for
convenience of reference only and shall not explain, modify, enlarge, restrict
or affect the meaning or interpretation of this Agreement or any of its
provisions.
9.17 Remedies Cumulative. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. Exercise of one or
more remedy(ies) by either Party does not require that all or any other
remedy(ies) be exercised and does not preclude later exercise of the same
remedy.
9.18 Survival of Representations and Warranties. Each Party's
representations and warranties contained in this Agreement shall (i) survive the
execution, delivery and acceptance by the Parties and (ii) remain true until the
rights, duties and obligations under this Agreement are fully performed, or
otherwise satisfied.
9.19 No Agency Created. Nothing in this Agreement will make one Party the
agent of the other, and no Party has power or authority to bind the other in
respect of any of the rights or duties except in the context of the License.
9.20 Limitation on Damages. Except with respect to the indemnification
requirements set forth in Section 6 above, neither Licensor nor Licensee will be
liable for punitive, incidental, indirect, consequential damages or claims for
anticipated or lost profits arising out of this Agreement, regardless of how
determined and regardless of whether either Party had reason to know these
damages would arise.
9.21 Word Usage. Unless the context clearly requires otherwise, (a) the
plural and singular numbers shall each be deemed to include the other; (b) the
masculine, feminine and neuter genders shall each be deemed to include the
others; (c) "shall," "will," or "agrees" are mandatory, and "may" is permissive;
(d) "or" is not exclusive; and (e) "includes" and "including" are not limiting
10. CONFIDENTIAL INFORMATION
------------------------
10.1 Confidentiality. Licensee (a) shall, and shall cause its officers,
directors, employees, attorneys, accountants, auditors, agents and Licensee's
Affiliates (each, a "Restricted Party" and collectively, the "Restricted
Parties"), to maintain in strictest confidence any and all confidential
information of Licensee that is not available to the general public
(collectively, the "Confidential Information") and (b) shall not disclose, and
shall cause its Restricted Parties not to disclose, Confidential Information to
any Person, except only to the extent that disclosure is required by law or
legal process or regulatory agencies, in which event Licensee or one of the
Restricted Parties, as the case may be, shall notify Licensor as promptly as
practicable (and, if possible, prior to making any disclosure) and shall
cooperate in the seeking a protective order and shall otherwise seek
confidential treatment of the information. The term "Confidential Information"
shall not include information, as reflected in the contemporaneous written
records of Licensee, that was (a) in the public domain at or subsequent to the
time the information was communicated to the Licensee through no wrongful act by
the Licensee, (b) rightfully in the Licensee's possession free of any obligation
of confidence at or subsequent to the time the information was communicated by
Licensor; or (c) communicated by Licensor to an unaffiliated third Party free of
any obligation of confidence.
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10.2 Exceptions. Notwithstanding anything to the contrary contained in
this Section 10.1, any Restricted Party may disclose any Confidential
Information (a) for bona fide business purposes on a strict "need to know" basis
to its Affiliates, its board of directors, its professional representatives, its
lenders, sureties and insurers and potential investors, provided that any Person
obtaining this Confidential Information is either bound by confidentiality
obligations, or executes a confidentiality agreement, that is at least as
protective for the Licensee as the terms set forth in Section 10.1; or (b) in
order to enforce its rights under this Agreement.
Licensor and Licensee have caused this Agreement to be duly executed on
their behalf in the manner legally binding upon them. Each represents to the
other that the individuals signing below on its behalf have all necessary
authority to do so and to bind the Parties indicated
LICENSOR: LICENSEE:
By: __________________________ By: _________________________
Name: __________________________ Name: _______________________
Its: ________________________
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Exhibit A
Proprietary Marks
-----------------
21
EXHIBIT B
Procedure for Licensed Products
As used in this Agreement, the process for approval of each proposed new product
will include the procedures discussed below:
New Licensed Products
---------------------
Licensor and Licensee covenant and agree with one another to use reasonable
commercial efforts to cooperate in developing new Licensed Products. The Parties
agree that the process will involve Licensor as little as possible, but without
limiting the approval rights granted to Licensor as described in this Agreement.
Licensee will provide Licensor with a written Proposed Marketing/ Sales/
Merchandising Plan ("Plan") for all proposed new Products in advance of
Licensee's anticipated first shipment date. The Plan will include:
a) name of proposed Licensed Product;
b) product fabrication, technical and esthetic design and style
description;
c) packaging design;
d) retailer pricing/margin targets (informational purposes only -
prices are not to be determined by Licensor but will nonetheless be
shared with Licensor);
e) distribution channels/ key retailers/ key customer targets; and
f) warranty and guarantee offer, if any.
Licensor will provide Licensee with a written response either approving or
disapproving the proposed Licensed Product, within five business days of actual
receipt by Licensee of the Plan. If Licensor (a) responds with its written
approval or (b) does not respond at all within the required time period, then
the proposed Licensed Product is deemed approved. Licensee shall forward by
email a reminder notice to Licensor on the third day following issue of its
original notice.
If the proposed Licensed Product is approved (or deemed approved), then Licensee
will provide Licensor with no less than three pre-production samples that are
representative of the proposed Licensed Product in all material respects.
Licensor will have ten business days to respond to Licensee to confirm its
satisfaction that the samples comply with the product specifications as
described in the Plan and are otherwise reasonably satisfactory to Licensor. If
Licensor (a) responds with approval of the sample designs or (b) does not
respond at all within the required time period, then the proposed Licensed
Product is deemed to comply.
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EXHIBIT C
Form of Royalty Report
23
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