ANTIK DENIM, LLC LICENSE AGREEMENT
EXHIBIT
10.1
ANTIK
DENIM, LLC
THIS
AGREEMENT entered
into by and between ANTIK
DENIM, LLC,
a
California limited liability company, having its principal office at
▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Licensor”)
and
Mercier SARL a
French
Company having
its principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ Camp Laurent ▇▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇ (“Licensee”)
with
reference to the following recitals:
WHEREAS,
Licensor
is the owner of certain proprietary rights in and to the intellectual property
(trademarks, copyrights and pending patent) identified in Exhibit C (the
“Property”). Licensor desires to license the Property; and
WHEREAS,
Licensee
wishes to use the "Property" upon and in connection with the manufacture, sale,
marketing and distribution of the products described in the attached Exhibit
A.
The products described in the attached Exhibit A on which or in connection
with
which Licensee uses the Property shall hereinafter be referred to as “Licensed
Product(s)”.
NOW,
THEREFORE,
in
consideration of the mutual promises of this Agreement, the parties agree as
follows:
| 1. |
GRANT
OF LICENSE
|
(a) Licensor
grants to Licensee, subject to the terms and conditions of this Agreement,
and
subject to Paragraph 1(b) below, the exclusive right within the Territory for
those Licensed Products on Exhibit A: (i) to use the Property upon the Licensed
Products described in the attached Exhibit A and in connection with the Licensed
Products' design, development, manufacture, sale, marketing and distribution
to
the general wholesale and retail trade; and (ii) to use the brand names
copyrighted and/or trademarked to Licensor to merchandise the Licensed Products.
Licensor reserves any rights, benefits and opportunities not expressly granted
to Licensee under this Agreement.
|
2.
|
TERRITORY
|
(a)
‘’The
Territory’’ is described on exhibit B
(b) In
the
event that Licensor fails to distribute product in one or several countries
of
the “ Territory” within (18) months from the inception of this Agreement,
Licensor shall have the option to carve out such countries of the ‘’Territory’’
from this Agreement, which action shall not be considered a breach of this
Agreement by Licensor and, further, which action shall have no affect on the
Minimum Guaranteed Royalties and Minimum Guaranteed Net Sales requirements
as
set forth in this Agreement. In the event that Licensor carves out any countries
of the Territory from the Agreement pursuant to this Section 2(b), Licensor
shall be entitled to grant a license to a third party in such country under
any
terms and conditions that Licensor deems appropriate under the
circumstances.
-1-
| 3. |
TERM
|
(a) The
parties agree that the term of this Agreement commenced on April 18, 2007 and
will extend for an initial “First
Term”
of
twenty (20) months from April 18, 2007 through December 31st, 2008 and will
include four (4) one (1)-year “Extended
Terms”,
each of
which is subject to Licensee’s achievement of Minimum Net Sales as described
below, unless this Agreement is earlier terminated pursuant to the provisions
hereof.
(b) Further
Extensions of Term Beyond the Extended Terms.
Upon
expiration of the last Extended Term, this Agreement shall automatically renew
for five (5) one (1) year renewal terms (the “Renewal Terms”); provided,
however, that Licensee shall not have breached its obligations under Paragraph
4(c) of this Agreement during the preceding final year of the Extended Term
or
the immediately preceding Renewal Term, as the case may be, which breach has
not
been cured within thirty (30) days of notice thereof by Licensor. The Initial
Term, Extended Terms and Renewal Terms are collectively referred to herein
as
the “Term”.
| 4. |
ROYALTIES
|
(a) Licensee
shall pay to Licensor royalty (“Royalty” or “Royalties”) in accordance with the
schedule set forth on Exhibit D hereto. Such Royalty shall be based on Net
Sales
of the Licensed Products. Such Royalty shall accrue when the Licensed Products
are sold, distributed, billed and/or paid for, whichever occurs earlier. "Net
Sales" shall mean gross sales (the gross invoice amount billed customers) of
the
Licensed Products, less discounts, freight charges and allowances actually
shown
on the invoice and, further, less any bona fide returns (net of all returns
actually made or allowed as supported by credit memorandum actually issued
to
the customers) provided such returns do not exceed ten percent (10%) of gross
sales per Calendar Year.
Costs
incurred in the manufacturing, selling, advertising and distribution of the
Licensed Products shall not be deducted nor shall any deduction be allowed
for
any uncollectible accounts or allowances. No deductions shall be made for any
discounts not reflected on the invoice(s), or commissions, for taxes, fees,
assessments, impositions, payments or expenses of any kind which may be incurred
or paid by Licensee in connection with the transfer of funds or royalties or
with the conversion of any currency into United States dollars.
(b) Royalty
payments shall be made by Licensee to Licensor on all Net Sales.
(c) Guaranteed
Minimum Royalty:
Licensee agrees upon execution of that agreement to pay Licensor for the
‘’First
Term’’
as an
advance on royalties the sum of two hundred and fifty thousand dollars ($
250,000).
For
the
‘’Extended
Terms’’
of that
agreement, Licensee agrees to pay Licensor a non-refundable “Guaranteed Minimum
Royalty” listed below under “Guarantee”, allocated in quarterly
installments.
|
ANNUAL
PERIOD
|
GUARANTEE
|
MINIMUM
NET SALES
|
|||||
|
04/18/07
- 12/31/08
|
$
|
250,000
|
$
|
2
500,000
|
|||
|
01/01/09
- 12/31/09
|
$
|
250
000
|
$
|
2
500 000
|
|||
|
01/01/10
- 12/31/10
|
$
|
500
000
|
$
|
5
000 000
|
|||
|
01/0/1/11
- 12/31/11
|
$
|
750
000
|
$
|
7
500 000
|
|||
|
01/01/12
- 12/31/12
|
$
|
1
000 000
|
$
|
10
000 000
|
|||
-2-
(1)
Minimum
Net Sales
- During
the First Term and for each of the Extended Terms, Licensee agrees to achieve
“Minimum Net Sales” which sales shall result in minimum earned royalties as
provided for in Paragraph 4 (c), which minimums shall equate the Licensee’s
Guarantee Minimum Royalty for the basis for renewal of the First Term and each
of the Extended Terms. Licensee acknowledges that failure to pay Guaranteed
Minimum Royalties would be a material breach of this Agreement..
(2) If
pursuant to Paragraph 3(a), this Agreement is extended beyond the fourth
(4th)
Extended Term, and Licensee has not breached the terms and conditions of this
Agreement during the preceding term, Licensee agrees that (a) the Guaranteed
Minimum Royalty and Minimum Net Sales for any year thereafter shall increase
to
|
ANNUAL
PERIOD
|
GUARANTEE
|
MINIMUM
NET SALES
|
|||||
|
2013
|
$
|
1
250 000
|
$
|
12
500 000
|
|||
|
2014
|
$
|
1
500 000
|
$
|
15
000 000
|
|||
|
2015
|
$
|
1
750 000
|
$
|
17
500 000
|
|||
|
2016
|
$
|
2
000 000
|
$
|
20
000 000
|
|||
|
2017
|
$
|
2
000 000
|
$
|
20
000 000
|
|||
(3) If
upon
termination or expiration of this Agreement the Royalties paid and/or payable
by
Licensee to Licensor during the Royalty Period is less than the Guaranteed
Minimum Royalty for such Royalty Period, Licensee shall pay such difference
to
Licensor; provided, however, if this Agreement is terminated due to Licensor’s
default, in addition to any rights and remedies available to Licensee, Licensee
shall only be responsible for Royalties earned under Paragraph 4 hereof up
to
the date of termination of this Agreement. Royalty payments shall be credited
against the Guaranteed Minimum Royalty.
(d) Licensor
may impose a charge on all overdue payments at a rate equal to the lesser of
one
and one-half percent (1 ½%) per month or the maximum rate allowed by law,
without prejudice to any other rights of Licensor under this
Agreement.
(e) All
of
Licensee's obligations under this Paragraph 4 shall be performed without any
right of Licensee to invoke set-offs deductions and other similar
rights.
| 5. |
ROYALTY
PAYMENT AND REPORTING
|
(a) Licensee
shall pay the royalties based upon Net Sales in quarterly periods ending on
the
last days of January, April, July, and November. Payments shall be received by
Licensor on or before the thirty (30) day period after the end of each quarterly
period (the “Royalty Period”). The last Royalty Period shall end on the last day
of the Term, and the Sell-Off Period (as defined below), if any, shall be
considered its own Royalty Period. At the time of payment, Licensee will also
furnish to Licensor by way of electronic reporting forms to be furnished by
Licensor, all required information as requested on the electronic reporting
forms (whether or not the sale of Licensed Products are subject to a royalty
during the immediately preceding Royalty Period) and statements of other
information as the
-3-
electronic
forms may require. Such electronic statements shall be furnished to the Licensor
whether or not any Licensed Products have been shipped, distributed and/or
sold
and whether or not actual royalties have been earned during the preceding
Royalty Period. Royalty statements will be certified true and correct by a
duly
authorized officer of Licensee if Licensee is a corporation or by a principal
of
Licensee if Licensee is a partnership or sole proprietor by submitting a hard
copy to Licensor or by electronic signature via the Internet. Licensee shall
follow instructions in Paragraph 25 of this Agreement for proper method of
reporting electronic royalty statements. All payments to Licensor, as required
by this Paragraph will be addressed to Licensor at the address provided in
Paragraph 25. Neither the expiration nor the termination of this Agreement
shall
relieve Licensee from its royalty payment obligations.
(b) All
amounts to be paid by Licensee to Licensor under this Agreement shall be payable
in United States currency according to a method directed by Licensor (including
by electronic transfer) without deduction for taxes (including withholding
taxes), levies, duties, imports, commissions, expenses or charges of any
kind.
(c) Neither
the receipt nor acceptance by Licensor of any royalty payment or royalty
statement shall prevent Licensor from subsequently challenging the accuracy
or
validity of such payment or statement.
(d) During
the term of this Agreement and for at least two (2) years following the
termination or expiration of this Agreement, Licensee shall maintain at
Licensee's principal office such books and records including but not limited
to
production, inventory and sales records (collectively “Books and Records”) as
are necessary to substantiate that (i) all statements submitted to Licensor
hereunder were true, complete and accurate, (ii) all royalties and other
payments due Licensor hereunder shall have been paid to Licensor in accordance
with the provisions of this Agreement, and (iii) no payments have been made,
directly or indirectly, by or on behalf of Licensee to or for the benefit of
any
Licensor employee or agent who may reasonably be expected to influence
Licensor's decision to enter this Agreement or the amount to be paid by Licensee
under this Agreement. (As used in this Paragraph, “payment” shall include money,
property, services, and all other forms of consideration.) All Books and Records
shall be maintained in accordance with generally accepted accounting principles
consistently applied. During the term of, and for two (2) years after the
termination or expiration of this Agreement, the Books and Records shall be
open
to inspection, audit and copy by or on behalf of Licensor during business hours,
and upon reasonable notice which shall not be less than ten (10) business days.
If any such audit reveals a discrepancy between the royalties owed Licensor
and
the royalties Licensee paid, Licensee shall pay such discrepancy, plus interest
calculated at the lesser of one and one-half percent (1 ½%) per month or the
maximum rate allowed by law. If such discrepancy is more than fifteen percent
(15%), Licensee shall reimburse Licensor upon demand for the cost of such audit
including any reasonable attorneys' fees in connection therewith. If any such
audit reveals that Licensee has paid to Licensor an overpayment of royalties,
Licensor shall pay such discrepancy, plus interest calculated at the lesser
of
one and one-half percent (1 ½%) per month or the maximum rate allowed by law. If
such discrepancy is more than fifteen percent (15%), Licensor shall reimburse
Licensee for any reasonable attorneys’ fees in connection there with.
|
6.
|
MARKETING
AND DISTRIBUTION
|
(a) Any
promotional material ) proposed to be used in solicitation or marketing efforts
must have the prior written approval of Licensor in accordance with the
procedures in Paragraph
-4-
8.
For
purposes of this Section 6(a), the following items shall not be deemed
promotional materials: (a) items associated with Licensee’s corporate
identification, such as business cards, letterhead, invoices; (b) line sheets
used internally by Licensee’s sales force; (c) look books created for use by
Licensee’s sales and marketing departments, but not intended for distribution to
retailers or consumers; and (d) press kits consisting of press clippings, tear
sheets, copies of advertisements, etc.
(b) Licensee
shall diligently and continuously market and distribute the Licensed Products
in
the Territory and will use its best efforts to make and maintain adequate
arrangements for the marketing and distribution necessary to meet the demand
for
the Licensed Products in the Territory.
(c) Licensee
agrees to use its best efforts to produce quantities of the Licensed Products
sufficient to supply promptly the reasonably foreseeable demand for the Licensed
Products.
| 7. |
SALE
OF LICENSED PRODUCTS TO
LICENSOR
|
Licensee
agrees to sell to Licensor the Licensed Products in such quantities, as Licensor
may need in connection with its retail activities. All sales by Licensee to
Licensor of Licensed Product(s) shall be on terms at least as good as those
given by Licensee to any of its customers such that the Licensor can purchase
the Licensed Product(s) from the Licensee at a price never to exceed the lowest
price offered to any other customer of the Licensee and on such other terms
that
are as good as the most favorable terms given to any other customers of the
Licensee.
| 8. |
QUALITY
AND APPROVAL
|
| (a) |
Purpose
of Quality Control.
|
In
order
to maintain the quality reputation of the Property, all Licensed Products and
promotional or packaging material relating to the Licensed Products must have
Licensor's prior written approval, not to be unreasonably withheld.
| (b) |
Design/Concept
Approval.
|
Licensee
shall submit to Licensor for approval, not to be unreasonably withheld,
pre-production submittals consisting of concepts, designs, line drawings or
sketches and finished artwork, as the case may be, with respect to any proposed
Licensed Products or promotional or packaging material relating to the Licensed
Products (“Concept Submittal(s)”). Once Licensor has approved the concept for a
Licensed Product, Licensee shall be entitled to create prototypes which Licensee
may then use to solicit orders for such Licensed Products. Licensee shall not
manufacture, or distribute any promotional or packaging material relating to
the
Licensed Products before obtaining Licensor's written approval of Concept
Submittals for each such Licensed Product. If Licensor fails to communicate
its
approval or disapproval of any Concept Submittal within eight days (8) days
after receipt of Licensee's submission, Licensor shall be deemed to have
approved such Concept Submittal.
-5-
| (c) |
Pre-Production
Approvals.
|
Licensee
shall submit to Licensor for approval the CADS, not to be unreasonably withheld
then printed or embroidered strike-off or pre-production samples for any
proposed Licensed Products (“Sample Submittal(s)”). Licensee shall not
manufacture, or distribute any Licensed Products before obtaining Licensor's
written approval of the CADS and Sample Submittals for each such item. If
Licensor fails to disapprove any Sample Submittal within eight (8) days after
receipt of Licensee's submission, Licensor shall be deemed to approve such
Sample Submittal.
| (d) |
Quality
Maintenance.
|
Licensee
shall maintain the same quality in the Licensed Products and promotional and
packaging material relating to the Licensed Products produced as in the Sample
Submittals approved by Licensor. Upon commencement of manufacture and
distribution of the Licensed Products and/or promotional and packaging material
relating to said Licensed Products after all required approvals have been given
by Licensor, Licensee shall submit, at its own cost, one (1) set of the
production samples of the Licensed Products and/or promotional and packaging
material to Licensor
| (e) |
Changes.
|
If
during
the term of this Agreement there is to be any change in the Licensed Products
or
the promotional or packaging material relating to the Licensed Products after
the approval of production samples, Licensee must comply with the provisions
of
Paragraph 8(b) and Paragraph 8(c) for such Licensed Product or material before
its manufacture, sale, marketing or distribution, as the case may
be.
| (f) |
Licensee's
Production Facilities.
|
Licensee
agrees to furnish Licensor promptly with the addresses of Licensee's production
facilities for the Licensed Products and the names and addresses of the persons
or entities, if any, which are manufacturing each of the Licensed Products
for
Licensee. Licensor shall have the right upon reasonable notice to Licensee,
during regular business hours, at its own expense to inspect any production
facilities where any Licensed Products are being manufactured for the purpose
of
enabling Licensor to determine whether Licensee is adhering to the requirements
of this Agreement relating to the nature and quality of the Licensed Products
and the use of the Property in connection therewith. For purposes of this
provision, manufacturing shall be deemed to mean the process of screen-printing,
engraving, decorating or any other process used by the manufacturer, to apply
or
attach the Property to Licensed Products, and to trims such as buttons, hangtags
and labels. It would not include: major assembly processes such as cutting
and
sewing, laundry and finishing processes.
| (g) |
Close-Outs, Imperfect,
Irregulars or Second Quality Items.
|
Licensee
shall have the right to sell and distribute Licensed Products which are
close-outs, overruns, imperfect, irregular or second quality through such
outlets and in such manner as Licensee may reasonably determine; provided,
however, that such products shall be limited to ten
-6-
percent
(10%) in the aggregate of first quality sales (measured in number of units
sold), reconciled on an annual basis, and, provided further that Licensee shall
notify Licensor as to the retailers selected for the disposition of merchandise.
.
| (h) |
Damaged,
Defective or Non-Approved Items.
|
Licensee
shall not sell any items that are damaged, defective, or non-approved. To the
extent that any such items shall exist during the Term of this Agreement,
Licensee agrees that such items will be disposed of in accordance with
instructions from Licensor.
| 9. |
RESTRICTIONS
ON ADVERTISING AND SALES
|
(a) Licensee
shall not advertise the Property and/or Licensed Products on billboard, radio,
or television without the prior written consent of Licensor, not to be
unreasonably withheld.
(b) Licensee
agrees that it shall not tie-in the sale of Licensed Products depicting or
using
the Property to the sale of other Licensed Products or services and shall not
depict or associate any other person or character along with the Property for
any purpose without Licensor's prior written approval.
(c) Restrictions
on Purchaser Usage.
Licensee
shall not knowingly sell Licensed Product(s) to any third party who intends
to
create a new or different product by affixing the Licensed Product(s) on or
incorporating the Licensed Product(s) in the third parties’ product. Any such
use by a third party is prohibited and the license granted hereunder shall
not
extend as to any such product. Licensee shall incorporate into any contract
with
any third party regarding a Licensed Product the following
provision:
“Purchaser
shall not use this product to create a new and different good. Creation of
a new
and different good using the product shall constitute an unauthorized and
unlawful use of the product.”
| 10. |
OWNERSHIP
OF RIGHTS
|
(a) Licensor
is the sole and exclusive owner of all rights, title and interest in and to
the
Property. Licensee shall not (i) use any Property in connection with any
products or services other than the Licensed Products in the Territory, (ii)
use
the Trademarks as part of any Domain Name, or (iii) authorize, knowingly sell
or
distribute, directly or indirectly, the Licensed Products, to a person that
intends or is likely to resell or distribute them outside the permitted channels
set forth on Exhibit A (with the exception of those sales made pursuant to
Section 8(g)).
(b) Licensee
warrants that it has not and does not assert any right in the
name of
Antik Denim, except for its use as a Licensee hereunder. Licensee agrees never
to claim any other kind of property right in the Property and agrees not to
make
any application for state or federal trademarks for any Trademark (or any ▇▇▇▇
similar thereto or derivative thereof), without Licensor’s prior
approval.
-7-
(c) Licensor
and Licensee agree and intend that all artwork and designs created by Licensee
(“Licensee Created Artwork”) or any other person or entity and used as part of
or in connection with the Licensed Products shall be the property of Licensor
and shall constitute “Property” hereunder, and Licensor shall be entitled to use
and license to others the right to use such artwork and designs subject to
the
provisions of this Agreement; provided, however, that during the Term of this
Agreement, Licensor shall not grant any licenses to others to use any such
Licensee Created Artwork without Licensee’s prior consent. Licensee assigns to
Licensor the copyright in all such artwork and designs, and any renewals
thereof, including all registration and applications thereof, and the right
to
exercise such rights in any manner and means now known or hereafter devised
in
perpetuity. Licensee agrees to execute any additional documents proposed by
Licensor to effectuate and confirm Licensor's sole and exclusive ownership
of
all copyright in and to such artwork and designs, and Licensee irrevocably
appoints Licensor as its attorney-in-fact to execute any and all such documents
if Licensee fails to return executed copies of such documents to Licensor within
five (5) days following submission.
(d) The
use
of any additional trademark, service ▇▇▇▇, trade dress, word, name, symbol
or
device that is not scheduled on Exhibit C to identify or distinguish any of
the
Licensed Products (“New ▇▇▇▇”) shall inure to the benefit of Licensor. The use
of any such New ▇▇▇▇ in connection with any of the Licensed Products shall
be
made only with Licensor's written prior approval, which approval will be at
Licensor’s sole discretion. If
any
New Marks are approved by Licensor, such New Marks shall be exclusive with
respect to this Agreement such that Licensee shall not manufacture, sell,
distribute, promote, or advertise, or authorize the manufacture, sale,
distribution, promotion, or advertisement of, any product (other than the
Licensed Products) in connection with such New Marks. All
trademark rights in any such New ▇▇▇▇ shall belong to Licensor and shall
constitute “Property” hereunder and shall be exercised by Licensee only pursuant
to Licensor's prior, written approval.
| 11. |
GOOD
WILL AND PROMOTIONAL VALUE
|
(a) Licensee
recognizes the value of the good will associated with the Property and
acknowledges that the Property and all rights therein and the good will
pertaining thereto belong exclusively to Licensor. Licensee further acknowledges
that the Property has acquired secondary meaning in the mind of the public.
Licensee agrees that during this Agreement, or thereafter, it will not challenge
or otherwise contest the title or any rights of Licensor to the Property or
the
validity of the license being granted.
(b) Licensee's
use of the Property shall inure to the benefit of Licensor and that Licensee
shall not, at any time, acquire any rights in the Property by virtue of any
use
it may make of the Property.
| 12. |
INFRINGEMENTS
|
Licensee
shall assist Licensor in the enforcement of any rights of Licensor in the
Property. Licensor may commence or prosecute any claims or actions in its own
name or in the name of Licensee or join Licensee as a party thereto. Licensee
shall promptly notify Licensor in writing of any infringements,
misappropriations, or other violations by third parties of the Property, which
may come to
-8-
Licensee's
attention. Licensor shall have sole right to determine whether any action shall
be taken on account of any infringement, misappropriation or violation. Licensee
shall not contact the third party, make any demands or claims, institute any
suit or take any other action on account of such infringements without first
obtaining the prior written permission of Licensor. All costs and expenses,
including attorneys' fees, incurred in connection with any suit instituted
by
Licensee without the consent of Licensor shall be borne solely by
Licensee.
| 13. |
COOPERATION
WITH LICENSOR
|
(a) Licensee
agrees to cooperate with Licensor in the prosecution of any trademark or
copyright application that Licensor may desire to file, or in the conduct of
any
litigation relating to the Property. Licensee shall supply to Licensor such
samples, containers, labels, sales information and similar material and, upon
Licensor's request, shall procure evidence, give testimony and cooperate with
Licensor as may reasonably be required in connection with any such application
or litigation.
(b) With
respect to all claims and actions, including actions in which Licensee is joined
as a party; Licensor shall have the sole right to employ counsel of its choosing
and to direct handling of the litigation and any settlement thereof. Licensor
shall be entitled to receive and retain all amounts awarded as damages, profits
or otherwise in connection with such actions. Upon Licensor’s request, Licensee
shall assist Licensor in the enforcement of any rights of Licensor in the
Property, and Licensor shall reimburse Licensee for its reasonable expenses
incurred as a result of such cooperation.
| 14. |
TRADEMARK,
PATENT AND COPYRIGHT
PROTECTION
|
(a) The
license is conditioned upon Licensee's complete compliance with the provisions
of the trademark and copyright laws of the United States and the foreign country
or countries in the licensed Territory.
(b) Licensor
has the right but not the obligation, to obtain at its cost appropriate
trademark, patent and copyright protection for the Property, the Licensed
Products and/or the promotional and packaging material, and
Licensee shall reasonably cooperate with Licensor in connection therewith.
Licensee shall not register any of the Property in any manner.
(c) Licensee
shall cooperate with Licensor in protecting the Property. In the event that
any
claim or problem arises with respect to the Property in the licensed Territory,
Licensee shall promptly advise Licensor in writing of such event. Licensor
has
no obligation to take any action whatsoever in the event that any claim or
problem arises with respect to the protection of the Property. Licensor shall
have the right, however, to proceed with counsel of its own choice.
(d) Licensee
shall not at any time apply for any copyright, trademark or patent protection,
which would affect Licensor's ownership of any rights in the Property nor file
any documents with any governmental authority or take any other action which
could affect Licensor's ownership of the Property, or aid or abet anyone else
in
doing so.
-9-
| 15. |
COMPLIANCE
WITH GOVERNMENT STANDARDS
|
Licensee
represents and warrants that the Licensed Products, their packaging, marketing,
sales and distribution shall meet or exceed all Federal, State and local laws,
ordinances, standards, regulations and guidelines pertaining to such Licensed
Products or activities, including, but not limited to, those pertaining to
product safety, quality, labeling and propriety. Licensee agrees that it will
not package, market, sell or distribute any Licensed Products or cause or permit
any Licensed Products to be packaged, marketed, sold or distributed in violation
of any such Federal, State or local law, ordinance, standard, regulation or
guideline.
| 16. |
IDENTIFICATION
|
Licensee
shall place its own name or identifying ▇▇▇▇ on the Licensed Products or on
their packaging in an inconspicuous manner so that Licensor can readily identify
the source of the Licensed Products. Licensee shall utilize security yarns
in
its woven labels in accordance with instructions from Licensor. Licensor may
institute a different identification program for security purposes, subject to
Licensor’s approval, which approval shall not be unreasonably withheld.
Licensee
may order directly from his supplier (LABELTEX) his security labels
| 17. |
TRADEMARK
AND COPYRIGHT NOTICES
|
(a) All
Licensed Products and all promotional and packaging material shall contain
appropriate legends, markings and/or notices as required from time to time
by
Licensor, to give notice to the public of Licensor's rights. Unless otherwise
expressly approved in writing by Licensor, each usage of the Trademarks shall
be
followed by either “TM”, or the Trademark Notice Symbol “®”. Licensor will
provide Licensee with the appropriate legend for each Licensed Product and/or
promotional and packaging material during the approval process.
(b) Licensee
shall use no other markings, legends and/or notices on or in association with
the Licensed Products or on or in association with the promotional and packaging
material other than the specified legend and Licensee's legend, without first
obtaining Licensor's prior express written approval.
| 19. |
MANUFACTURER'S
AGREEMENT
|
Licensee
shall not contract with any manufacturer as defined in Paragraph 8(f) without
Licensor’s authorization. In the event that Licensee desires to have a
manufacturer produce one or more Licensed Products, or any component thereof,
Licensee shall provide Licensor with the name, address, telephone number and
name of the principal contact of the proposed manufacturer. . In addition,
Licensee shall remain fully responsible for ensuring that the products are
manufactured in accordance with the terms herein including approval and the
Licensee shall take the steps necessary to ensure that
-10-
the
manufacturer: (a) produces the product only as and when directed by Licensee;
(b) does not distribute, sell or supply the Licensed Products to any person
or
entity other than Licensee; and (c) does not delegate in any manner whatsoever
its obligations with respect to the Licensed Products. Licensee’s failure to
comply with this Paragraph 19 may result in termination of this Agreement and
confiscation and seizure of products.
| 20. |
TERMINATION
|
(a) Without
prejudice to any other rights that Licensor may have, Licensor may at any time
give written notice of termination effective immediately (unless otherwise
specified herein),
(1) If
within
one hundred eighty (180) days of execution of this Agreement,
Licensee
shall not have begun the bona fide distribution and sale of the Licensed
Products in commercially reasonable quantities throughout the Territory;
(2) If
Licensee shall fail for sixty (60) consecutive days to continue the bona fide
distribution and sale of the Licensed Products in commercially reasonable
quantities throughout the Territory;
(3) If
Licensee shall fail to timely make any payment due hereunder or submit any
statement required hereunder and such failure to pay or submit a statement
is
not remedied within fifteen (15) days of receipt of written notice
thereof;
(4) If
Licensee shall be unable to pay its obligations when due, shall make any
assignment for the benefit of creditors, shall file a voluntary petition in
bankruptcy, shall be adjudicated bankrupt or insolvent, shall have any receiver
or trustee in bankruptcy or insolvency appointed for its business or property,
or shall make an assignment for the benefit of creditors;
(5) If
the
quality in any Licensed Products is lower than in the approved samples referred
to in Paragraph 8 and such failure to maintain the same quality in the Licensed
Products as in the approved samples is not remedied within thirty (30) days
of
receipt of written notice thereof ;
(6) If
Licensee manufactures, sells, markets, distributes or uses any Licensed Products
or promotional or packaging material relating to the Licensed Products without
Licensor's approval as provided for by this Agreement or continues to
manufacture, sell, market, distribute or use any Licensed Products or
promotional or packaging material relating to the Licensed Products if such
breach is not remedied within thirty (30) days of receipt of written notice
thereof;
(7) If
Licensee becomes subject to any voluntary or involuntary order of any
governmental agency involving the recall of any Licensed Products or promotional
or packaging material relating to the Licensed Products because of safety,
health or other hazards or risks to the public;
(8) If
Licensee breaches any provision of this Agreement relating to the unauthorized
assertion of rights in the Property, and such breach is not remedied within
thirty (30) days of receipt of written notice thereof;
-11-
(9) If
Licensee breaches any provision of Paragraph 26 relating to assignment and
sub-licenses
(10) If
Licensee fails to obtain or maintain insurance coverage as required by the
provisions of this Agreement;
(b) If
reasonable grounds for insecurity arise with respect to Licensee's performance
of this Agreement, Licensor may in writing demand adequate assurance of due
performance. Until Licensor receives such assurance in writing, it may suspend
its performance of this Agreement. If Licensor does not receive such written
assurance within five (5) days after Licensee’s receipt of its request thereof
or within such other shorter period of time as Licensor may reasonably designate
under the circumstances, the failure by Licensee to furnish such assurance
will
constitute a material breach, which entitles Licensor to immediately terminate
this Agreement.
(c) Without
prejudice to any other rights, which Licensee may have, Licensee may terminate
this Agreement upon thirty (30) days written notice to Licensor of the
occurrence of a material breach of any of the material terms, covenants,
representations and/or warranties of this Agreement which breach is not remedied
by Licensor to Licensee’s reasonable satisfaction within such thirty (30) day
notice period.
(d) Licensee
acknowledges that breach or threatened breach of this Agreement will result
in
immediate and irremediable damage to Licensor and that money damages alone
would
be inadequate to compensate Licensor. Therefore, in the event of a breach or
threatened breach of this Agreement by Licensee, Licensor may, in addition
to
other remedies, immediately obtain and enforce injunctive relief prohibiting
the
breach or threatened breach of this Agreement by Licensee or infringement of
any
rights of Licensor. If Licensor employs attorneys or incurs other expenses
in
connection with obtaining injunctive relief, Licensee shall reimburse Licensor
for its reasonable attorneys’ fees and other expenses.
|
21.
|
POST-TERMINATION
AND EXPIRATION RIGHTS AND
OBLIGATIONS
|
(a) If
this
Agreement is terminated for any cause under Paragraph 20(a) or (b), Licensee
and
Licensee's receivers, representatives, trustees, agents, administrators,
successors or permitted assigns shall have no right after the effective date
of
termination to manufacture, sell, ship, market or distribute Licensed Products
or to use any promotional and packaging material relating to the Licensed
Products. Licensee's final statement and payment of royalties (and all other
amounts due hereunder) including the difference, if any, between all royalties
based upon Net Sales for the annual period and the Guaranteed Minimum Royalty
for such annual period, shall be received by Licensor within ten (10) days
after
the effective date of termination. Licensee shall send all payments and
statements required by Paragraph 21(a) to Licensor at the address in Paragraph
24.
(b) After
expiration of the Term of this Agreement or the termination of this Agreement
under any provision other than Paragraph 20(a) or (b), Licensee may sell, ship,
market and distribute Licensed Products which are on hand or in the
process
of
manufacture at the date of expiration or at the time notice of termination
is
received for a period of one hundred eighty (180) days after the
-12-
date
of
expiration or the date of notice of termination (“Sell-Off Period”), as the case
may be, provided that the Royalties with respect to that period are paid and
the
appropriate statements for that period are furnished. Licensee shall make no
post-termination sales to affiliates, except in the ordinary course of its
business operations. For purposes of this subparagraph, “affiliate” shall mean
(i) any entity having any relationship, contract, or arrangement with Licensee
whereby Licensee has or exercises or has the power to exercise, directly or
indirectly, any manner, control, direction, or restraint over the business
or
operations of such entity, or (ii) Licensee and such entity are subject to
common or mutual control or direction by some other entity. Any Licensed
Products not sold, shipped and distributed by Licensee within this one hundred
eighty (180) day period must be destroyed or reprocessed so that the Property
is
no longer present in whole or in part on the Licensed Products or on their
packaging material. Upon Licensor's request, Licensee shall provide evidence
satisfactory to Licensor of such destruction or reprocessing of remaining
Licensed Products or packaging material. After expiration of the Sell-Off
Period, Licensee's final statement and payment of royalties including the
difference, if any, between all royalties based upon Net Sales and the full
Guaranteed Minimum Royalty shall be received by Licensor within thirty (30)
days
after expiration of the Sell-Off Period. Licensee shall send all payments and
statements required by Paragraph 21(b) to Licensor at the address in Paragraph
24. To maintain the integrity of the Property and the reputation and goodwill
associated therewith, Licensee shall not sell or distribute any Licensed
Products through “going out of business,” consignment, liquidation, or auction
sales or similar methods, except with the prior written consent of Licensor
or
as otherwise provided in this Agreement.
(c) After
the
expiration or termination of this Agreement and except as provided in Paragraph
21(b), all rights granted to Licensee under this Agreement shall forthwith
revert to Licensor, and Licensee shall refrain from further use of the Property
or any further reference to the Property, either directly or indirectly, or
from
use of any marks or designs similar to the Property in connection with the
manufacture, sale, marketing or distribution of Licensee's products. Licensee
also shall turn over to Licensor all molds, silk-screens and other materials,
which reproduce the Property or shall give evidence satisfactory to Licensor
of
their destruction. Licensee shall be responsible to Licensor for any damages
caused by the unauthorized use by Licensee or by others of such molds,
silk-screens or reproduction materials which are not turned over to
Licensor.
(d) Licensee
acknowledges that any breach or threatened breach of any of Licensee's covenants
in this Agreement relating to the Property, including without limitation,
Licensee's failure to cease the manufacture, sale, marketing or distribution
of
the Licensed Products or the promotional and packaging material relating to
the
Licensed Products at the termination or expiration of this Agreement, except
as
provided in Paragraph 21(b), will result in immediate and irreparable damage
to
Licensor and to the rights of any subsequent licensee of Licensor. Licensee
acknowledges and admits that there is no adequate remedy at law for any such
breach or threatened breach, and Licensee agrees that in the event of any such
breach or threatened breach, Licensor shall be entitled to injunctive relief
and
such other relief as any court with jurisdiction may deem just and
proper.
(e) Within
twenty (20) business days after expiration or notice of termination of this
Agreement, as the case may be, Licensee shall deliver to Licensor a written
report indicating the number and description of the Licensed Products, which
it
had on hand or in the process of manufacture as of the date of expiration or
at
the time termination notice is received. Licensor may conduct a physical
inventory in order to verify such report. If Licensee fails to submit the
required written report or refuses
-13-
to
permit
Licensor to conduct such physical inventory, Licensee shall forfeit its rights
under this Agreement to dispose of such inventory. In addition to such
forfeiture, Licensor shall have recourse to all other available
remedies.
| 22. |
INDEMNITY
AND INSURANCE
|
(a) Licensee
acknowledges that it will have no claims against Licensor for any damage to
property or injury to persons arising out of the operation of Licensee's
business. Licensee agrees to indemnify, hold harmless and defend Licensor with
legal counsel acceptable to Licensor from and against all demands, claims,
injuries, losses, damages, actions, suits, causes of action, proceedings,
judgments, liabilities and expenses, including reasonable attorneys' fees,
court
costs and other legal expenses, arising out of or connected with the Licensed
Products, the promotional or packaging material relating to the Licensed
Products, Licensee's methods of manufacturing, marketing, selling or
distributing the Licensed Products, or any breach by Licensee of any provision
of this Agreement or of any warranty made by Licensee in this Agreement. No
approval by Licensor of any action by Licensee shall affect any right of
Licensor to indemnification hereunder.
(b) Licensee
shall obtain and maintain during the term of this Agreement and the one hundred
eighty (180) day disposal period, if any, provided for in Paragraph 21(b),
comprehensive general liability insurance coverage, including product liability
insurance, naming Licensor as additional insured. Such insurance shall be
underwritten by insurers satisfactory to Licensor and shall be written for
limits of not less than one Million Dollars ($1,000,000.00) each occurrence
combined, for bodily injury, including death and property damage. Licensee
shall
furnish Licensor promptly upon the execution of this Agreement with a
certificate of insurance stating thereon the limits of liability, the period
of
coverage, the parties insured (including Licensee and Licensor), and the
insurer's agreement not to terminate or materially modify such insurance without
endeavoring to notify Licensor in writing at least ten (10) days before such
termination or modification. Licensee’s coverage shall be primary, and any
insurance maintained by Licensor shall be in excess of, and not contributing
to,
the insurance provided by Licensee.
(c) Licensee
has the responsibility to procure legally sufficient permission from the
copyright owner(s) of photographs, illustrations, artwork, and recorded and
published music used in conjunction with the manufacture and distribution of
the
Licensed Products. Licensee indemnifies and holds Licensor harmless from any
and
all claims made by third parties with respect to copyrighted material used
by
Licensee that is licensed from, or owned by, a party other than
Licensor.
(d) The
existence of the insurance coverage shall not mitigate, alter or waive the
indemnity provisions of Paragraph 22(a). Licensor shall not be responsible
for
the payment of the premiums, charge taxes, assessments or other costs for the
insurance.
-14-
| 23. |
REPRESENTATION,
WARRANTY AND
INDEMNIFICATION
|
Licensor
warrants and represents that: (a) Licensor (and the officers executing on its
behalf) has full right and power to enter into this Agreement; (b) neither
the
execution and the delivery of this Agreement, nor the license granted herein,
will violate the terms of any existing licenses with third parties;(c) so long
as this Agreement remains in effect, Licensor shall not commit any act or enter
into any agreement with any third party which is inconsistent or in conflict
with this Agreement; (d) the Property and any and all other materials delivered
by Licensor to Licensee shall be original or under a valid license to Licensee
with right to provide the License as set forth herein to Licensee; and (e)
neither the execution and performance of this Agreement by Licensor nor the
license granted herein, infringes, misuses, misappropriates or conflicts with
the rights, including copyright, trademark and other intellectual property
rights or contract rights, licensed to or from, or owned by, a party other
than
Licensor. Licensor shall defend, indemnify and hold harmless Licensee, its
parent, affiliated companies and partners and their respective officers,
directors, members, employees and agents from and against any and all
liabilities, claims, obligations, suits, judgments, amounts paid in settlement,
costs and expenses (including, without limitation, reasonable attorneys fees,
court costs and expenses) which Licensee may incur as a result of a breach
by
Licensor of any its representations, warranties, covenants or undertakings
as
set forth in this Agreement.
| 24. |
NOTICES
|
Unless
otherwise specified herein, all notices, requests, demands, payments, consents
and other communications hereunder shall be transmitted in writing and shall
be
deemed to have been duly given (i) when hand delivered, (ii) upon delivery
when
sent by express mail, courier, overnight mail or other overnight or next day
deliver service, (iii) when received/sent by facsimile provided that a copy
thereof is contemporaneously delivered pursuant to ▇▇▇▇▇▇▇▇▇ ▇▇ (▇), (▇▇),
or
(iv) hereof, or (iv) three (3) days after the date mailed when sent by
registered or certified United States mail, postage prepaid, return receipt
requested, or when deposited with a public telegraph company or immediate
transmittal, charges prepaid, addressed as follows:
Licensor:
ANTIK
DENIM, LLC
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇.
▇▇▇▇ ▇▇▇▇, CEO
Licensee:
MERCIER
SARL
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇
Camp
Laurent ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
Attn:
▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
Licensor
or Licensee may change its address by giving written notice of such change
of
address to the other.
-15-
| 25. |
PAYMENT
AND STATEMENT ADDRESS
|
Licensee
shall send payments and statements to:
ANTIK
DENIM, LLC
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇
| 26. |
ASSIGNMENT
AND SUBLICENSE
|
The
license granted hereunder is personal to Licensee, and Licensee shall not assign
or transfer any of its rights under this Agreement or delegate any of its
obligations under this Agreement (whether voluntarily, by operation of law,
change in control or otherwise) without Licensor's prior written approval,
not
to be unreasonably withheld. Any attempted assignments, transfer, or delegation
by Licensee without such approval shall be void and a material breach of this
Agreement. A change in the majority ownership or a material change in the
management of Licensee shall constitute an assignment of rights under this
Paragraph requiring Licensor's prior written approval. Licensor is entering
into
this Agreement with Licensee based, in substantial part, on the unique
attributes, which Licensee and its business offer, in view of Licensee's
management, products and methods of operation. Subject to the foregoing, this
Agreement will be binding upon, and inure to the benefit of, the parties and
their respective successors and assigns.
| 27. |
APPROVALS
|
Any
approval or consent required by this Agreement to be obtained from Licensor
must
be in writing and shall not be unreasonable withheld, conditioned or
delayed.
| 28. |
COSTS
AND EXPENSES
|
Each
party shall bear and pay all costs and expenses arising in connection with
its
performance of this Agreement.
| 29. |
INDEPENDENT
CONTRACTOR
|
Licensee
is an independent contractor and not an agent, partner, joint venturer,
affiliate or employee of Licensor. No fiduciary relationship exists between
the
parties. Neither party shall be liable for any debts, accounts, obligations
or
other liabilities of the other party, its agents or employees. Licensee shall
have no authority to obligate or bind Licensor in any manner. Licensor has
no
proprietary interest in Licensee and has no interest in the business of
Licensee, except to the extent expressly set forth in this
Agreement.
-16-
| 30. |
SEVERABILITY
|
If
any
provision of this Agreement shall be determined to be illegal and unenforceable
by any court of law or any competent governmental or other authority, the
remaining provisions shall be severable and enforceable in accordance with
their
terms so long as this Agreement without such terms or provisions does not fail
of its essential purpose or purposes. The parties will negotiate in good faith
to replace any such illegal or unenforceable provision or provisions with
suitable substitute provisions, which will maintain the economic purposes and
intentions of this Agreement.
| 31. |
EXHIBITS
|
All
references to "Exhibit" or "Exhibits" herein shall mean those Exhibits A through
D attached to this Agreement, which Exhibits, wherever referred to herein,
are
hereby incorporated into this Agreement as though fully set forth
herein.
| 32. |
SURVIVAL
|
Licensee's
obligations and agreements under Paragraphs 4, 5, 8, 11, 15, and 19 shall
survive the termination or expiration of this Agreement.
| 33. |
MISCELLANEOUS
|
| (a) |
Captions.
|
The
captions for each Paragraph have been inserted for the sake of convenience
and
shall not be deemed to be binding upon the parties for the purpose of
interpretation of this Agreement.
| (b) |
Scope
and Amendment of Agreement.
|
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter of this Agreement, supersedes any and all prior and
contemporaneous negotiations, contracts, understandings or agreements in regard
to the license of the Property in connection with the Licensed Products in
the
Territory and is intended as a final expression of their agreement.
| (c) |
Governing
Law.
|
This
Agreement will be deemed to have been executed in the State of California and
will be construed and interpreted according to the laws of that State without
regard to its conflicts of law principles or rules. The parties agree that
any
legal action or proceeding with respect to this Agreement shall be brought
in
the United States District Court for the Central District of California or,
if
such court does not have jurisdiction, in any court of general jurisdiction
in
the County of Los Angeles, California. Licensee consents to the personal
jurisdiction of such courts, agrees to accept service of process by mail and
hereby waives any jurisdictional or venue defenses otherwise available to
it.
-17-
| (d) |
Attorneys'
Fees.
|
If
either
party brings any legal action or other proceeding to interpret or enforce the
terms of this Agreement, or retains a collection agent to collect any amounts
due under this Agreement, then the prevailing party shall be entitled to recover
reasonable attorneys' fees and any other costs incurred, in addition to any
other relief to which it is entitled.
| (e) |
Interpretation.
|
The
parties agree that each party and its counsel have reviewed this Agreement
and
the normal rule of construction that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement.
| (f) |
Waiver.
|
The
failure of Licensor to insist in any one or more instances upon the performance
of any term, obligation or condition of this Agreement by Licensee or to
exercise any right or privilege herein conferred upon Licensor shall not be
construed as thereafter waiving such term, obligation, or condition, or
relinquishing such right or privilege, and the acknowledged waiver or
relinquishment by Licensor of any default or right shall not constitute waiver
of any other default or right. No waiver shall be deemed to have been made
unless expressed in writing and signed by an authorized officer of
Licensor.
| (g) |
Time
of the Essence.
|
Time
is
of the essence with respect to the obligations to be performed under this
Agreement.
| (h) |
Rights
Cumulative.
|
Except
as
expressly provided in this Agreement, and to the extent permitted by law, any
remedies described in this Agreement are cumulative and not alternative to
any
other remedies available at law or in equity.
-18-
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed by their authorized
representatives on the dates indicated below.
"LICENSOR"
ANTIK
DENIM, LLC
By:
/s/
▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇, Chief Executive Officer
Date:
“LICENSEE”
Mercier
SARL
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, Chief Executive Officer
Date:
-19-
EXHIBIT
A
Licensed
Products
Denim
and
Sportswear Apparel for Men and Women bearing the Antik Denim
Trademark.
Licensor
undertakes to supply at least one full sample set before each season and on
a
more regular basis CADS and TECH PACKS once items completed.
-20-
Exhibit
B
Territory
France,
Spain, Italy, Germany, Austria, Portugal, Benelux, England, Ireland,
Switzerland, Greece, Portugal, Denmark, Sweden, Norway
And
all
other European territories now or in the future
-21-
EXHIBIT
C
Intellectual
Property
Trademarks
(Registered and Pending)
Word
▇▇▇▇
Eagle
Logo ▇▇▇▇
Pocket
Design
Copyrights
Pocket
Design
Logo
with
Words
Logo
without Words
Patent
Pocket
Design
-22-
EXHIBIT
D
Royalties
10%
of
Net Sales
-23-
EXHIBIT
E
Hot
Item Clause
Specific
to Products of the moment deemed hot and in order to exploit best market, three
items per category and per season may be presented by Licensee to Licensor
in
TECH PACKS with swatch sample provided that the quality of those items is same
as the standard of the rest of the Licensed Products
-24-