EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
OF TRADEMARKS AND LICENSES
THIS AGREEMENT is made and entered into as of the 7/th/ day of November,
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1997 by and between Cherokee, Inc., a Delaware corporation, having its
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer")
and Sideout Sport, Inc., a California corporation, having its principal office
at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller").
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell
and/or assign to Buyer, on the terms and subject to the conditions of this
Agreement, Seller's trademarks, copyrights, trade secrets, and license
agreements with respect thereto.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
1. Definitions. The following terms shall have the following meanings for
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purposes of this Agreement:
1.1 Trademarks. "Trademarks" shall mean those trademarks of
Seller that are identified on Exhibit A to this Agreement, together with the
goodwill represented by said trademarks, and all registrations and applications
for registration of said trademarks, and the right to ▇▇▇ for past infringements
of said trademarks.
1.2 Copyrights. "Copyrights" shall mean all copyrighted works
of Seller and all registrations and applications for registration of said
copyrighted works, and the right to ▇▇▇ for past infringements of said
copyrighted works.
1.3 Trade Secrets. "Trade Secrets" shall mean Seller's trade
secrets and confidential information relating to the Trademarks and the
manufacture, distribution and marketing of goods bearing the Trademarks,
including without limitation, customer lists, vendor lists, product designs, and
manufacturing and production techniques, together with the right to ▇▇▇ for past
infringements of said trade secrets.
1.4 License Agreements. "License Agreements" shall mean all
agreements to which Seller is a party with respect to the Trademarks, Copyrights
and/or Trade Secrets. The License Agreements are identified on Exhibit B to this
Agreement.
1.5 Assets. "Assets" shall mean the Trademarks, Copyrights,
Trade Secrets and License Agreements.
1.6 Closing. "Closing" shall mean the single closing of the
transactions contemplated by this Agreement at the offices of Buyer in Van Nuys,
California, which shall take place on November 7/th/ 1997.
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1.7 Gross Revenues. "Gross Revenues" shall mean all royalties
and license fees received by Buyer pursuant to the License Agreements and any
future license agreements entered into by Buyer wherein the Trademarks are
licensed to a third party.
1.8 Liens. "Liens" shall mean any mortgage, pledge, option,
escrow, hypothecation, lien, security interest, financing statement, lease,
charge, encumbrance, conditional sale or other title retention or security
agreement or any other similar restriction, claim or right of others, whether
arising by contract, operation of law or otherwise.
1.9 Maintenance Fees. "Maintenance Fees" shall mean all amounts
actually expended by Buyer for maintenance and preservation of rights to the
Trademarks during the calendar quarter to which a Quarterly Royalty payment
applies, inc1uding, without limitation, taxes, government fees, reasonable
attorneys' fees, litigation costs and expenses, and related amounts incurred in
connection with the preservation of the Trademarks, fees and costs associated
with prosecution of pending applications for registration of Trademarks as
identified in Exhibit A, and fees and costs associated with continuing
prosecution or defense of any litigation, actions, oppositions, cancellations
and similar proceedings involving any of the Assets pending as of the Closing.
1.10 Purchase Price. "Purchase Price" shall mean the
consideration to be paid by Buyer to Seller for the Assets pursuant to Section 3
of this Agreement.
1.11 Quarterly Royalties. "Quarterly Royalties" shall mean
royalties payable by Buyer to Seller based on Buyer's receipt of Gross Revenues
each calendar quarter (i.e., the three month period ending March 31, June 30,
September 30 and December 31), pursuant to Section 3.3 hereof.
2. Purchase and Sale of Assets. Subject to the terms and conditions set forth
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in this Agreement, in consideration for the Purchase price, Seller agrees to
sell, convey, transfer, assign, and deliver to Buyer, and Buyer agrees to
purchase from Seller, the Assets at the Closing free of any Liens except those
Liens identified in Exhibit C.
3. Purchase Price. In consideration for the sale of the Assets, Buyer shall
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pay the following (the "Purchase Price") to Seller:
3.1 Cash at Closing. Buyer shall deliver to Seller a bank check
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in the amount of One Million Five Hundred Thousand Dollars ($1,500,000). The
sale shall be deemed complete upon the delivery of said sum, and the post
closing recordation of any assignment documents shall not affect the sale.
3.2 Cash upon Satisfaction of Liens. Seller shall be obligated
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to immediately obtain releases of any Liens. Seller shall deliver to Buyer proof
that all Liens have been released or are otherwise satisfied, satisfactory to
Buyer in its sole and absolute discretion. Upon receipt of such proof, Buyer
shall deliver to Seller a bank check in the amount of Five Hundred Thousand
Dollars ($500,000).
3.3 Quarterly Royalties. Not more than thirty (30) days after
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the end of each calendar quarter, Buyer shall pay to Seller Quarterly Royalties
based upon Gross Revenues from and after the date of the Closing until October
22, 2004, as follows:
3.3.1 Forty percent (40%) of the first Ten Million Dollars
($10,000,000) of Gross Revenues;
3.3.2 Ten percent (10%) of the next Five Million Dollars
($5,000,000) of Gross Revenues;
3.3.3 Five percent (5%) of the next Twenty Million Dollars
($20,000,000) of Gross Revenues.
Buyer shall have no obligation to pay to Seller any moneys, including without
limitation Quarterly Royalties, for any Gross Revenues received by Buyer after
October 22, 2004, with the exception of royalties earned for the period
preceding October 22, 2004, irrespective of when paid.
3.4 Payment of Quarterly Royalties.
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3.4.1 Payment. Buyer shall pay Quarterly Royalties to
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Seller on or before the thirtieth (3Oth) day following the end of each calendar
quarter, commencing with the calendar quarter ending December 31, 1997.
3.4.2 Offset for Maintenance Fees. Buyer may set off
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reasonable Maintenance Fees from payments of Quarterly Royalties. In the event
of any lawsuit brought against Buyer by any third party involving any of the
Assets or Buyer's use of any of the Assets, Buyer may place into an escrow
account to be held by an escrow mutually acceptable to Buyer and Se1ler all or
such portion of Quarterly Royalties thereafter payable as Buyer shall reasonably
believe to be necessary to pay the costs of defense of, and to serve as a
reserve against reasonably anticipated awards of damages (including without
limitation reasonable attorney's fees and costs) or profits in, such lawsuit.
3.4.2.1 Litigation Fees. This Section 3.4.2.1 shall only apply if
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Buyer brings an action against a third party for infringement of any of the
Trademarks, and such third party brings a counterclaim or cross complaint
against Buyer claiming that any of the Trademarks are invalid. In such case,
the costs of defending against such counterclaim or cross complaint shall be
considered to be Maintenance Fees only if (i) Buyer's institution of the action
against the third party was commercially reasonable to protect Buyer's business
and/or legal interests at the time the action was instituted and (ii) Buyer
shall have given written notice to Seller of the institution thereof not later
than ten (10) days after the institution of such litigation involving the
Trademarks. Seller shall have thirty (30) days from receipt of such notice in
which to notify Seller that the institution of the action was not commercially
reasonable to protect Buyer's business and/or legal interests; Seller's failure
to give notice during such thirty (30) days shall constitute Seller's agreement
that the institution of the action was commercially reasonable to protect
Buyer's business and/or legal interests. In the event that the Seller contends
that Buyer's institution of the action was not commercially reasonable to
protect Buyer's business and/or legal interests, Buyer and Seller shall meet
within thirty (30) days following Buyer's receipt of Seller's notice and attempt
to agree whether the institution of the action was commercially reasonable to
protect Buyer's business and/or legal interests or not. If Buyer and Seller are
unable to agree within ten (10) days of such meeting, each of Buyer and Seller
shall within twenty (20) days following the date of their meeting select a judge
affiliated with Judicial Arbitration & Mediation Services, Inc. or successor
thereto ("JAMS")each of whom shall be a retired judge of the U.S. District Court
or California Superior Court and the two JAMS judges so selected shall within
ten (10) days of their selection select a third JAMS judge (formerly of the U.S.
District or California Superior Court) who shall decide if the institution of
the action was commercially reasonable to protect Buyer's business, and/or legal
interests. Such third JAMS judge's shall, within thirty (30) days of selection,
hold one hearing in Los Angeles, California, of not more than eight (8) hours
total, at which hearing each of Buyer and Seller shall present evidence and
arguments to convince such JAMS judge as to whether Buyer's institution of the
action was commercially reasonable to protect Buyer's business and/or legal
interest or not. The Third JAMS judge shall render a written decision within
seven (7) days following the date of such hearing as to whether Buyer's
institution of the action was or was not commercially reasonable to protect
Buyer's business and/or legal interests. Such decision shall be considered final
and non-appealable. Each party shall pay for its own fees and costs and the
costs of the retired JAMS judge selected by such party. The party against whom
the third retired JAMS judge rules shall pay the third retired JAMS judge's
costs. In the event that JAMS is not in existence at the time a dispute arises
under this Section 3.4.21, the parties shall attempt to agree upon a retired
judge of the U.S. District Court or California Superior Court to decide if the
institution of the action was commercially reasonable to protect Buyer's
business and/or legal interests, and if the parties cannot agree. the parties
shall request referrals to arbitration or mediation services from the Los
Angeles County Bar Association, and shall appoint the first listed service in
place of JAMS in this Section 3.4.2.1.
3.4.2.2 Recovery of Litigation Fees. If Buyer receives an award
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of costs and/or attorneys' fees in connection with litigation subject to
3.4.2.1, to the extent that any such costs and/or attorneys' fees had previously
been treated as Maintenance Fees and set off against Quarterly Royalties, Seller
shall share in such award pari passu with Buyer.
3.4.2.3. Costs and Fees for Assignment Recordation. Any
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reasonable fees and costs incurred by Buyer in connection with the recordation
of assignment of the Assets or any other perfection of the transfer of the
Assets to Buyer shall be accrued and treated as Maintenance Fees incurred in any
quarter or quarters ending on the second anniversary of the Closing or
thereafter.
3.4.3 Statements. Each Quarterly Royalty shall be accompanied by a
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statement containing such information as Seller shall reasonably require to
calculate the amount of Gross Revenues and Maintenance Fees and other offsets
for the calendar quarter to which such Quarterly Royalty applies.
3.4.4 Records. Buyer shall keep and maintain complete and accurate
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records and documentation concerning all Quarterly Royalties and amounts set off
from Quarterly Royalties, and shall retain such records and documentation for
not less than two (2) years from the date of their creation. Seller and its
representatives and agents (who shall be subject to Buyer's approval, which
approval shall not be unreasonably withheld) shall have the right upon
reasonable notice to Buyer to inspect during regular business hours the records
and documentation required to be retained pursuant to this Section 3.4.4 during
the two (2) year period following creation of such records and documentation.
The costs of any inspection pursuant to this Section 3.4.4 shall be borne by
Seller unless as a result of such inspection it is determined that the amounts
payable by Buyer to Seller for any calendar quarter are in error by greater than
five percent (5%), in which case the costs of such inspection shall be borne by
Buyer. Seller shall report the results of any such inspection to Buyer, and
unless Buyer disputes the results of such inspection, Buyer shall promptly
thereafter pay to Seller the amount of any underpayment, and the amount of any
overpayment shall be credited by Seller against future amounts payable by Buyer
to Seller. In addition, Buyer shall pay interest on the amount of such
underpayments (and Seller shall pay interest on the amount of any overpayments)
at a rate which is the lower of (i) one percent (1%) over the rate of interest
announced by Bank of America NT&SA to be its "prime rate" as such "prime rate"
is in effect from time to time and (ii) the highest rate permitted by applicable
law, from the date such amount was underpaid (or overpaid) to the date such
amount is paid or credited. In the event that Buyer disputes the results of the
inspection, Buyer may withhold payment of any claimed underpayment, and may
engage a certified public accountant (not including Buyer's certified public
accountants) acceptable to Seller, which
acceptance shall not be unreasonably withheld, to verify the accuracy of the
results of Seller's inspection. Buyer and Seller shall abide by the decision of
such certified public accountant as to the accuracy or inaccuracy of such
inspection, and the amount of any underpayment or overpayment found by such
certified public accountants which shall promptly thereafter be paid or credited
(together with interest), as appropriate.
4. Representations and Warranties of Seller. Seller represents and warrants to
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Buyer as follows:
4.1 Organization: Good Standing. Seller is a corporation duly
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organized validly existing and in good standing under the laws of the State of
California. Seller has all requisite power and authority and legal right to own,
operate and lease its properties, including the Assets.
4.2 Authorization: Binding Obligations. Seller has all requisite
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legal right, Power, authority and capacity to enter into this Agreement and to
perform all of its obligations hereunder and thereunder. Seller has taken all
necessary action to authorize the sale to Buyer of the Assets pursuant hereto,
and has obtained the approval of its board of directors and shareholders if
necessary authorizing the execution, delivery and performance of this Agreement
and consummation of the transactions contemplated hereby. This Agreement has
been duly executed by Seller and constitutes a legal, valid and binding
obligation of Seller.
4.3 Title to Assets. With the exception of those Liens identified in
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Exhibit C attached hereto, Seller has good and marketable title to all of the
Assets, in each case without Liens. Upon release and satisfaction of the Liens
identified in Exhibit C hereto, Buyer will have good and marketable title to all
of the Assets, free and clear of all Liens.
4.4 Trademarks. Exhibit A to this Agreement contains a schedule of
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the Trademarks, including all applications and registrations therefore
throughout the world. All of the Trademarks, and the applications and
registrations identified on Exhibit A, are valid and subsisting. Seller has no
knowledge of any infringement or alleged infringement by others of any of the
Trademarks. To the best of its knowledge, Seller has not infringed, and is not
now infringing, on any trade name, trademark, or service ▇▇▇▇ be1onging to any
other person, firm or entity. Except as set forth in Exhibit B. Seller is not a
party to any license, agreement or arrangement, whether as licensor, licensee,
franchisor, franchisee, or otherwise, with respect to any of the Trademarks.
Seller owns all of the Trademarks. Seller's use of the Trademarks in its
business as now conducted by Seller does not, and will not, conflict with,
infringe on, or otherwise violate any rights of others. Seller has the right to
sell and assign the Trademarks to Buyer.
4.5 License Agreements. Exhibit B to this Agreement contains a full
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and complete listing and identification of all agreements of any kind and nature
to which Seller is a party and which relate to the Trademarks, Copyrights and/or
Trade Secrets. Seller has full right and authority to assign the License
Agreements to Buyer. True and correct copies of each of the License Agreements
have been delivered to Buyer. Each License Agreement is valid and subsisting;
Seller has duly performed all its obligations thereunder to the extent that such
obligations to perform have accrued; and no breach or default, alleged breach or
default, or event which would (with the passage of time, notice or both)
constitute a breach or default thereunder by Seller (or, to the best knowledge
of Seller, any other party or obligor with respect thereto), has occurred or as
a result of this Agreement or its performance will occur. Consummation of the
transactions contemplated by this Agreement will not (and will not give any
person a right to) terminate or modify any rights of, or accelerate or augment
any obligation of, Seller under any License Agreement.
4.6 Copyrights. Seller has no knowledge of any infringement or
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alleged infringement by others of any of the Copyrights. All Copyrights, and any
applications and registrations therefore, are valid and subsisting. To the best
of its knowledge, Seller has not infringed, and is not now infringing, on any
copyrighted work belonging to any other person, firm, or entity. Except as set
forth in Exhibit B, Seller is not a party to any license agreement, or
arrangement, whether as licensor, licensee, franchisor, franchisee, or otherwise
with respect to any of the Copyrights. Seller owns all of the Copyrights. Seller
has the right to sell and assign the Copyrights to Buyer. To the best of its
knowledge, Seller has no copyright registrations and has not applied for
copyright registration.
4.7 Trade Secrets. Seller has no knowledge of any infringement or
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alleged infringement by others of any of the Trade Secrets. Seller has taken
appropriate measures to protect the confidentiality of the Trade Secrets. To the
best of its knowledge, Seller has not infringed, and is not now infringing, on
any trade secrets belonging to any other person, firm, or entity. Except as set
forth in Exhibit B, Seller is not a party to any license, agreement, or
arrangement, whether as licensor, licensee, franchisor, franchisee, or
otherwise, with respect to any of the Trade Secrets. Seller owns all of the
Trade Secrets. Seller's use of the Trade Secrets in its business as now
conducted by Seller does not, and will not, conflict with, infringe on, or
otherwise violate any rights of others. Seller has the right to sell and assign
the Trade Secrets to Buyer.
4.8 Receipt of Reasonably Equivalent Value. The Purchase Price
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constitutes at least reasonably equivalent value for the transfer and assignment
of the Assets by Seller to Buyer. Seller is not insolvent, will not be insolvent
on the date of closing and Seller will not become insolvent as a result of the
sale of Assets. Further, Seller is not engaged in business or a transaction, for
which any property remaining with the Seller after the closing will constitute
unreasonable small capital for the Seller's business, and Seller does not intend
to incur, or believe that
it will incur debts that would be beyond the debtor's ability to pay as such
debts matured. If Seller is currently in default on any obligations owed to its
creditors, Seller will apply the entire Purchase Price towards satisfaction of
debts owed to its creditors, and shall continue to pay the Purchase Price,
including all payments of Quarterly Royalties, until all outstanding creditor
claims have been satisfied in fill.
4.9 Brokers and Finders. All negotiations relative to this Agreement
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and the transactions contemplated hereby have been carried on by Seller without
the intervention of any other person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like payment. Seller
hereby agrees to indemnify, defend and hold harmless Buyer and its successors
and assigns from and against and in respect of any such claim.
4.10 No Breach. The consummation of the transactions contemplated by
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this Agreement will not result in or constitute any of the following. (1) a
breach or default or an event that, with notice or lapse of time or both, would
be a default, breach, or violation of the articles of incorporation or bylaws of
Seller or any License, promissory note, loan agreement, conditional sales
contract, commitment, indenture, mortgage, deed of trust, or other agreement
including without limitation the License Agreements, instrument, or arrangement
to which Seller is a party or by which Seller or Seller's property is bound; (2)
an event that would permit any party to terminate any agreement or to accelerate
the maturity of any indebtedness or other obligation of Seller; or (3) the
creation or imposition of any lien, charge, or encumbrance on any of the Assets.
4.11 Royalty Revenue Schedule. Seller has provided an accurate
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schedule of license royalty payments due to Seller. A true and correct copy of
such schedule is attached to this agreement as Exhibit D.
5. Representations and Warranties of Buyer. Buyer represents and warrants that
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it is a corporation duly organized, existing, and in good standing under the
laws of the state of Delaware. Before Closing, Buyer shall obtain the approval
of this Agreement from its Board of Directors. Buyer has utilized the services
of one broker relative to the Agreement and the transactions contemplated
hereby. Buyer hereby agrees to indemnify, defend and hold harmless Seller and
its successors and assigns from and against and in respect of any valid claim
for a finder's fee, brokerage commission or other like payment from any broker
or other person engaged by Buyer with respect to this Agreement or the
transactions contemplated hereby.
6. Indemnification of Buyer. Seller shall indemnify, defend and hold Buyer and
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its affiliates, directors, officers, employees and agents harmless from and
against any and all liabilities, losses, claims, suits, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) arising out of or otherwise relating to (i) any claims of third
parties involving any of the Assets prior to the Closing; (ii) Seller's breach
of any representation, warranty, covenant
or agreement contained in this Agreement or any of the License Agreements; or
(iii) the transactions contemplated by this Agreement being set aside for any
reason, including without limitation on the basis that the sale of the Assets in
accordance with the terms of this Agreement constitutes a fraudulent conveyance.
In the event that this Agreement is set aside as a fraudulent conveyance and/or
all or any portion of the Assets are returned to Seller or to Seller's estate in
bankruptcy, as collateral to secure Seller's indemnification obligations
pursuant to this Section, Seller hereby grants to Buyer a security interest in
the Assets.
7. Conditions Precedent to the Obligations of Buyer. All obligations of
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Buyer under this Agreement are subject to the fulfillment, at the option of
Buyer, at or before the Closing, of each of the following conditions. If Seller
has not satisfied all of the following conditions at or prior to the Closing,
Buyer shall have the option of electing not to consummate the transactions
contemplated by this Agreement by giving written notice thereof to Seller.
7.1 Sellers Representations and Warranties. The representations and
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warranties of Seller contained in this Agreement shall be true on and as of the
Closing with the same force and effect as though made on and as of the Closing,
except as affected by the transactions contemplated or permitted by this
Agreement.
7.2 Sellers Covenants. Seller shall have performed all of its
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obligations and agreements and complied with all of its covenants contained in
this Agreement to be performed and complied with by Seller before the Closing.
7.3 No Litigation. No investigation, action, suit or proceeding
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before any court or any other governmental or regulatory authority shall have
been threatened or be pending against Seller or Buyer seeking to restrain,
prevent or materially change any of the transactions contemplated by this
Agreement or question the validity or legality of any of such transactions. No
bankruptcy petition shall have been filed by or against Seller.
7.4 No Governmental Action. No action shall have been taken or law
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enacted or proposed to be enacted by any governmental authority or by any court
or other tribunal having jurisdiction over the parties or the Assets which makes
any of the transactions contemplated by this Agreement illegal.
8. Covenants of Seller Prior to Closing.
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8.1 No Offers. Prior to the Closing, Seller shall not accept or
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solicit any offers for sale of all or a substantial portion of its stock or sale
or license of all or a substantial portion of its assets, nor shall Seller
discuss such with any third party. The parties agree that any solicitation or
acceptance of such an offer would be a source of great damage to Buyer. The
parties have' discussed the potential for injury and damage to Buyer in the
event of a breach by Seller of the prohibition of
this Section 8.1, and agree that ascertaining the true extent and nature of
damage to Buyer and its business and reputation due to a breach hereof by Seller
would be impossible. Accordingly, the parties agree that, in the event of a
breach by Seller of Seller's covenants pursuant to this Section 8.1, Buyer shall
be entitled to receive Seven Hundred Fifty Thousand Dollars ($750,000) as
liquidated damages from Seller, which the parties agree to be a reasonable
approximation of the damages needed to compensate Buyer for such injury.
8.2 Operation of Business in Normal Course. There shall be no change
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that may be reasonably anticipated to adversely effect any of the Assets.
8.3 Access. Seller shall allow Buyer and its representatives to have
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access to Seller's books and records, facilities and such documents and
materials as Buyer shall reasonably require to conduct due diligence for the
transactions contemplated by this Agreement. Seller shall cooperate with Buyer
as Buyer shall reasonably require for conducting due diligence.
9. Closing. At the Closing:
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9.1 Seller shall deliver to Buyer:
9.1.1 such bills of sale and assignments (including without
limitation the ▇▇▇▇ of sale assignment in the form of Exhibit B attached
hereto), in form reasonably acceptable to Buyer, as shall be sufficient or
necessary to transfer and assign the Assets to Buyer and to record such transfer
and assignment.
9.1.2 such other instruments of transfer necessary or appropriate
to transfer to and vest in Buyer all of Seller's right, title and interest in
and to the Assets, including without limitation the consent of any party to any
of the License Agreements from whom consent to assignment may be necessary for
Seller to transfer such License Agreement to Buyer.
9.1.3 a receipt for cash (if any) to be delivered by Buyer at
Closing.
9.1.4 such financing statements, memoranda of security interest,
and such other instruments and documents as Buyer shall reasonably require to
perfect the security interest granted by Seller pursuant to Section 6 of this
Agreement.
9.1.5 all files, documents, records, specimens, artwork, screens,
patterns, designs, marketing materials, computer disks and tapes, and other
materials or other tangible assets respecting the Assets or in which any of the
Assets are embodied. Seller shall deliver to Buyer a ▇▇▇▇ of sale for all such
tangible assets to be delivered by Seller to Buyer at the Closing.
9.2 Buyer shall deliver to Seller a bank check in the amount of One
Million Five Hundred Thousand Dollars ($1,500,000) payable to seller.
9.3 After the Closing, each of Buyer and Seller shall deliver such
instruments and documents to the other party as shall be reasonably necessary to
effect the transactions contemplated by this Agreement. Seller shall do such
further acts as shall be necessary to effect the assignment and transfer of
Seller's rights pursuant to the License Agreements to Buyer.
10. Continuing Covenants of Seller. From and after the Closing, Seller
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shall not: (i) adopt or cause any other person or entity to adopt any ▇▇▇▇
similar or identical to any of the Trademarks, (ii) do any act that could
infringe upon any of the rights in any of the Assets being sold and assigned to
Buyer, or (iii) challenge directly or indirectly any of Buyer's rights in and to
any of the Assets. From and after the Closing, Seller shall cooperate with
Buyer, and shall allow Buyer and its representatives to have access to Seller's
books and records, facilities and such documents and materials, as Buyer shall
reasonably request in order to prosecute or to maintain any applications or
registrations of or for any of the Assets, or to bring or defend any action
against or by any third party with respect to any of the Assets. Seller agrees
not to voluntarily file a petition for bankruptcy protection within twelve
months following the Closing.
11. General Provision.
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11.1 Notices. Any notice or other communication hereunder must be
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given in writing and either (i) delivered in person, (ii) transmitted by telex,
facsimile or telecopy mechanism, provided that a receipt of such transmission is
obtained and provided further that any notice so given is also mailed as
provided herein, (iii) delivered by Federal express or similar commercial
delivery service or (iv) mailed by certified or registered mail, postage
prepaid, return receipt requested, to the recipient at the address set forth in
the first paragraph of this Agreement, or to such other address as such party
shall have last designated by such notice to the party giving notice. Each such
notice or other communication shall be effective (i) if given by
telecommunication, when transmitted, (ii) if given by mail, two (2) days after
such communication is deposited in the mails, (iii) if given by Federal Express
or similar commercial delivery service provided that a receipt of such delivery
is obtained, one (i) business day after such communication is deposited with
such service, or (iv) if given by any other means, when actually delivered.
11.2 Entire Agreement. This Agreement, including all schedules and
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exhibits hereto, which are herein incorporated by this reference, sets forth the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations, discussions
and agreements relating to the subject matter hereof. This Agreement may not be
orally changed, altered, modified or amended in any respect. To effect any
change, modification, alteration or amendment of this Agreement, the same must
be in writing and signed by all of the parties hereto.
11.3 Remedies. Except as otherwise specifically provided in this
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Agreement, in the event that either party should breach or violate any of the
covenants, representations or warranties contained in this Agreement, the other
party shall be entitled to exercise any rights or remedy available to it
hereunder, at law or in equity. Such rights and remedies shall include, without
limitation, termination (as provided herein), damages and injunctive relief. The
exercise of any right or remedy available to a party shall not preclude the
concurrent or subsequent exercise, by it of any other right or remedy and all
rights and remedies shall be cumulative.
11.4 Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the successors and permitted assigns of the
parties.
11.5 Choice of Law. The validity, construction and enforcement of this
-------------
Agreement shall be governed by the laws of the State of California without
regard to its choice of law principles.
11.6 No Waiver. No waiver by either party, whether express or implied,
---------
of any provision of this Agreement of any breach or default of any party, shall
constitute a continuing waiver of such provision or any other provisions of this
Agreement, and no such waiver by any party shall prevent such party from acting
upon the same or any subsequent breach or default of the other party of the same
or any other provision of this Agreement.
11.7 Disclaimer of Agency. Nothing in this Agreement shall create a
--------------------
partnership or joint venture or establish the relationship of principal and
agent or any other relationship of a similar nature between the parties hereto,
and neither Buyer nor Seller shall have the power to obligate or bind the other
in any manner whatsoever.
11.8 Attorneys. In the event that either party employs attorneys to
remedy, prevent or obtain relief from a breach and/or default of this Agreement
or arising out of a breach and/or default of this Agreement or in connection
with or contesting the validity of this Agreement, any of the terms, covenants,
provisions, and all conditions hereof or of any of the matters referred to
herein, and such party is the prevailing party in any action or arbitration
brought with respect thereto, such party shall be entitled to be reimbursed for
all of its reasonable attorneys' fees, including, without Limitation, those
attorneys' fees incurred in each and every action, suit or proceeding, including
any and all appeals and petitions therefrom, and all costs and expenses incurred
in connection therewith. In the event of any bankruptcy filing by one party,
and/or any other entity, which affects or purports to affect the Assets or the
other party's (the "Non-
Debtor") rights and claims under this Agreement, the Non-Debtor shall be
entitled to employ counsel to review and monitor any such bankruptcy and all
proceedings arising in or under or related to such bankruptcy and to represent
the Non-Debtor's position in regard thereto, and all attorneys' fees and that
the first party shall pay and reimburse all costs so incurred by the Non-Debtor
on a monthly basis.
11.9 Interpretation. All pronouns and any variation thereof shall be
--------------
deemed to refer to the masculine, feminine, or neuter and to the singular or
plural, as the identity of the person or persons may require for proper
interpretation of this Agreement. Each of the parties to this Agreement has been
represented by independent legal counsel. Therefore, the normal rule of
construction that an agreement shall be interpreted against the drafting ▇▇▇▇▇
shall not apply.
11.10 Severability. If any provision or portion thereof of this
------------
Agreement is held to be unenforceable or invalid, the remaining provisions and
portions thereof shall nevertheless be given and continue in full force and
effect.
11.11 Authority. Each individual signing on behalf of a party hereto
---------
represents and warrants that he or she is authorized by the Board of Directors
of such party to execute this Agreement on behalf of such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CHEROKEE INC. SIDEOUT SPORT, INC.
a Delaware corporation a California corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------- ---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chairman and President
Chief Executive Officer
EXHIBIT "A"
SIDEOUT SPORT
SIDEOUT SPORT U.S. TRADEMARKS
Trademark Description Class Category Registration Registration Renewal
Number Date Date
Sideout Name 25 Apparel 1395798 6/3/84 Perpetual
Sideout Name 25 Shoes 1834669 5/3/94 5/3/04
Sideout Logo 25 Apparel 1401285 7/15/86 Perpetual
Sideout Grid Logo 25 Apparel 2091264 8/26/97 8/26/07
Sideout Name 14 Watches 1833286 4/26/94 4/26/00
Sideout Name 18 Accessories 2061649 5/13/97 5/13/07
Sideout Grid Logo 18 Accessories 2061648 5/13/97 5/13/07
Sideout Name 28 Athletic
Balls 2093175 9/2/97 9/2/07
Sideout Grid Logo 28 Athletic
Balls 2089312 8/19/97 8/19/07
Sideout Name 42 Retail 2061660 5/13/97 5/13/07
Sand King Name 28 Athletic
Balls 1989174 7/23/96 7/23/06
King of the
Beach Name 25 Apparel 1627248 12/11/90 12/11/00
Sideout Rotor Design 28 Athletic
Balls 2102847 10/7/97 10/7/02
BIGGEST NAME Name 25 Apparel 2084097 7/29/97 7/29/02
IN VOLLEYBALL
U.S. Applications Pending
Sideout Name 42 Computer
Services 12/13/96
King of the
Beach Name 28 Athletic
Balls 5/10/97
California
Sideout Name & Logos 39 Apparel 76827 5/1/85 5/1/05
November 7, 1997
EXHIBIT "A"
SIDEOUT SPORTS
FOREIGN TRADEMARKS
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Argentina SIDEOUT & LOGO 25 - Clothing Registered; renewal due 12/31/01
------------------------------------------------------------------------------------------------------------------------------
Australia SIDEOUT & Hatch Label 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 10/21/09
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Australia SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 10/21/09
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Benelux KING OF THE BEACH 25 - Clothing, Namely, Shorts, Registered; renewal due 07/31/00
Shirts, Sweatshirts
28 Volleyballs
------------------------------------------------------------------------------------------------------------------------------
Benelux SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 09/13/99
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Benelux SIDEOUT SPORT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 06/06/99
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Brazil SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 07/11/05
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Brazil SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 03/26/01
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Canada SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 10/20/03
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Canada SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 07/05/06
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
---------------------------------------------------------------------------------------------------------------------------------
Chile SIDEOUT Awaiting confirmation that assignment was
recorded; need copies of Registration from
Sideout
---------------------------------------------------------------------------------------------------------------------------------
China SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Registered; renewal due 02/19/01
Shorts, Shirts, Sweatshirts
---------------------------------------------------------------------------------------------------------------------------------
China SIDEOUT 25 - Wearing Apparel, Namely, Registered; renewal due 02/20/05
Shorts, Shirts, Sweatshirts
---------------------------------------------------------------------------------------------------------------------------------
Colombia SIDEOUT Waiting for opinion from associate on
whether changes in law will affect
application
---------------------------------------------------------------------------------------------------------------------------------
Colombia SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Application rejected, Appeal filed-awaiting
Shorts, Shirts, Sweatshirts decision from Trademark Office; Colombia has
joined the Paris Convention-waiting for
opinion from associate on whether changes in
law will affect application
---------------------------------------------------------------------------------------------------------------------------------
Costa Rica SIDEOUT Awaiting filing instructions from Sideout
---------------------------------------------------------------------------------------------------------------------------------
European LOGO Awaiting description of goods from Sideout
Community
---------------------------------------------------------------------------------------------------------------------------------
European SIDEOUT Awaiting description of goods from Sideout
Community
---------------------------------------------------------------------------------------------------------------------------------
France SIDEOUT 25 - Wearing Apparel, Namely, Registered; renewal due 11/25/98
Shorts, Shirts, Sweatshirts
---------------------------------------------------------------------------------------------------------------------------------
France SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Registered; renewal in progress
Shorts, Shirts, Sweatshirts
---------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Germany SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 10/28/98
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Germany SIDEOUT & LOGO 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 10/28/98
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Great Britain SIDEOUT 25 - Articles of Outer Clothing Registered; renewal due 10/21/05
------------------------------------------------------------------------------------------------------------------------------
Great Britain SIDEOUT & LOGO 25 - Articles of Outer Clothing Registered; renewal due 10/21/05
------------------------------------------------------------------------------------------------------------------------------
Greece SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 11/12/00;
Shirts, Sweatshirts Use due 01/17/99
------------------------------------------------------------------------------------------------------------------------------
Guatemala SIDEOUT & LOGO Awaiting Notarized Power of Attorney
from Sideout
------------------------------------------------------------------------------------------------------------------------------
Guatemala SIDEOUT Awaiting Notarized Power of Attorney
from Sideout
------------------------------------------------------------------------------------------------------------------------------
Hong Kong SIDEOUT & LOGO 25 - Hats, Shoes, Shorts and Shirts Registered; renewal in progress
------------------------------------------------------------------------------------------------------------------------------
Hong Kong SIDEOUT 25 - Shirts, T-Shirts, Tank Tops, Registered; renewal due 06/16/00
Sweatshirts, Pants, Shorts,
Sweatpants, Jackets, Caps, Visors,
Hats and Shoes
------------------------------------------------------------------------------------------------------------------------------
Indonesia SIDEOUT No applications filed
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Israel LOGO 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 08/14/01
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Israel SIDEOUT 25 - Wearing Apparel, Namely, Shorts,
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Italy SIDEOUT 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 11/09/08
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Italy SIDEOUT & Grid Design Only 25 - Wearing Apparel, Namely, Shorts, Registered; renewal due 02/05/07
Shirts, Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Japan KING OF THE BEACH 17 (N.C.) - Shorts, Shirts, Registered; renewal due 05/531/02
Sweatshirts, and Other Wearing
Apparel, and All Other Goods in This
Class
------------------------------------------------------------------------------------------------------------------------------
Japan KING OF THE BEACH 24 (N.C.) - Volleyballs, Other Registered; renewal due 12/25/02
Sporting Goods, And All Other Goods
in This Class
------------------------------------------------------------------------------------------------------------------------------
Japan SIDEOUT 24 (N.C.) - Volleyballs, And All Registered; renewal due 12/25/02
Other Goods in This Class
------------------------------------------------------------------------------------------------------------------------------
Japan SIDEOUT & LOGO 24 (N.C.) - Volleyballs, And All Registered; renewal due 08/01/00
Other Goods in This Class
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Japan SIDEOUT 17 (N.C.) - Shorts, Shirts, Registered; renewal due
Sweatshirts, Other Wearing Apparel,
and All Other Goods in This Class
------------------------------------------------------------------------------------------------------------------------------
Japan SIDEOUT & LOGO 17 (N.C.) - Shorts, Shirts and All Registered; renewal due
Other Goods in This Class
------------------------------------------------------------------------------------------------------------------------------
Mexico SIDEOUT & LOGO 25 - Clothing (Shoes are Now Excluded) Registered; renewal due
------------------------------------------------------------------------------------------------------------------------------
Pakistan KING OF THE BEACH 28 - Volleyballs Application Pending
------------------------------------------------------------------------------------------------------------------------------
Pakistan LOGO 25 - Wearing Apparel, Namely, Long Application Pending
and Short Sleeve Shirts, Including
T-Shirts; Tank Tops and Sweatshirts,
Pants, Including Shorts and
Sweatpants; Jackets; Caps; Visors,
Hats and Shoes
------------------------------------------------------------------------------------------------------------------------------
Pakistan LOGO 28 - Athletic Balls Application Pending
------------------------------------------------------------------------------------------------------------------------------
Pakistan SAND KING 28 - Athletic Balls Application Pending
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Pakistan SIDEOUT 25 - Wearing Apparel, Namely, Long Application pending; Reply to the Show
and Short Sleeve Shirts, Including Cause has been filed
T-Shirts; Tank Tops and Sweatshirts,
Pants, Including Shorts and
Sweatpants; Jackets; Caps; Visors,
Hats and Shoes
------------------------------------------------------------------------------------------------------------------------------
Pakistan SIDEOUT 28 - Athletic Balls Application pending
------------------------------------------------------------------------------------------------------------------------------
Panama SIDEOUT & LOGO Awaiting instructions re filing
cancellation proceedings against
previous registration for SIDEOUT
------------------------------------------------------------------------------------------------------------------------------
Panama SIDEOUT Awaiting instructions re filing
cancellation proceedings against
previous registration for SIDEOUT
------------------------------------------------------------------------------------------------------------------------------
Peru SIDEOUT Previous registration for SIDEOUT is due
for renewal before 9/25/97; associate
cannot find use and it is possible to
cancel a registration based on non-use
------------------------------------------------------------------------------------------------------------------------------
Philippines SIDEOUT New application sent to Sideout for
signature
------------------------------------------------------------------------------------------------------------------------------
Philippines SIDEOUT & LOGO New application sent to Sideout for
signature
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Portugal SIDEOUT & LOGO 25 - Shirts, Shorts and Sweatshirts Registered; renewal due 05/10/03;
Declaration of Use due 05/10/98
------------------------------------------------------------------------------------------------------------------------------
Singapore SIDEOUT 25 - Articles of Outer Clothing, Application has been accepted and will
Shorts, Shirts, Sweatshirts, (White be published for opposition
Shirts, Under Shirts, T-Shirts)
------------------------------------------------------------------------------------------------------------------------------
South Korea SIDEOUT & LOGO 45 (N.C.) - Shirts and Sweatshirts Registered; renewal due 10/20/00
------------------------------------------------------------------------------------------------------------------------------
South Africa SIDEOUT Prior application filed by New Colours
Clothing on 10/20/89; cannot litigate
without establishing common law rights
prior to 10/20/89 in South Africa
------------------------------------------------------------------------------------------------------------------------------
Spain SIDEOUT Awaiting information re litigation from
Sideout
------------------------------------------------------------------------------------------------------------------------------
Spain SIDEOUT & LOGO Awaiting information re litigation from
Sideout
------------------------------------------------------------------------------------------------------------------------------
Switzerland LOGO 25 - Wearing Apparel, Namely, Long Registered; renewal due 08/10/04
and Short Sleeve Shirts, Including
T-Shirts; Tank Tops and Sweatshirts,
Pants, Including Shorts and
Sweatpants; Jackets; Caps; Visors,
Hats and Shoes
------------------------------------------------------------------------------------------------------------------------------
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Switzerland SIDEOUT 25 - Wearing Apparel, Namely, Long Registered; renewal due 08/10/04
and Short Sleeve Shirts, Including
T-Shirts; Tank Tops and Sweatshirts,
Pants, Including Shorts and
Sweatpants; Jackets; Caps; Visors,
Hats and Shoes
------------------------------------------------------------------------------------------------------------------------------
Taiwan SIDEOUT & LOGO 25 - Wearing Apparel, Namely Shorts, Registered; renewal due 07/31/00
Shirts and Sweatshirts
------------------------------------------------------------------------------------------------------------------------------
Thailand SIDEOUT 25 - Shorts, Shirts and Sweatshirts Registered; renewal due 08/26/03
------------------------------------------------------------------------------------------------------------------------------
Uruguay SIDEOUT Power of Attorney sent to foreign
associate; awaiting description of
goods from Sideout
------------------------------------------------------------------------------------------------------------------------------
Additional
Country Trademark Category of Status
Application / Registration
------------------------------------------------------------------------------------------------------------------------------
Brazil SIDEOUT 40.15 - Retail Registered; renewal due 4/22/07
------------------------------------------------------------------------------------------------------------------------------
European SIDEOUT & LOGO Application Pending
Community
------------------------------------------------------------------------------------------------------------------------------
Guatemala SIDEOUT 25 - Apparel Application filed 2/7/97
------------------------------------------------------------------------------------------------------------------------------
Israel SIDEOUT 25 - Apparel Registered; renewal due 8/14/01
------------------------------------------------------------------------------------------------------------------------------
Mexico SIDEOUT 42 - Retail Application filed 12/9/96
------------------------------------------------------------------------------------------------------------------------------
Peru SIDEOUT & LOGO 9, 18, 25 Registered; renewal due 7/7/07
------------------------------------------------------------------------------------------------------------------------------
Singapore SIDEOUT 25 - Apparel Registered; renewal due 6/22/03
------------------------------------------------------------------------------------------------------------------------------
Spain SIDEOUT & LOGO 25 - Apparel Registered; renewal due 9/04
------------------------------------------------------------------------------------------------------------------------------
Thailand SIDEOUT 25 - Apparel Registered; renewal due 8/26/03
------------------------------------------------------------------------------------------------------------------------------
EXHIBIT "B"
SIDEOUT
Name Territory Category ▇▇▇ % Adv % Annual
Minimums
-------------------------------------------------------------------------------------------------------
Bag Square Inc. U.S Accessories for men and 8% 1% 8-15-98 250,000
Including women, namely athletic
Puerto Rico bags, including but not Expend Option:
limited to backpacks, 3% 12-31-99 325,000
duffles, gym bags, fanny 12-31-00 375,000
packs, hats, bandanas, 12-31-01 425,000
caps visors, & wallets 12-31-02 475,000
-------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ U.S. Big & Tall clothing, 6% 1% 12-31-98 750,000
Enterprises, Inc Including including but not limited
Puerto to T-shirts, tank tops, Option:
Rico volley shorts, walk 99 825,000
shorts, shirts, pants, 00 915,000
jackets, warm-up suits, & 01 1,000,000
sweaters 02 1,100,000
03 1,200,000
-------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ dba A&E U. S. Toddler boys 2T-4T & 4-7 6% Expend 12-31-98 500,000
Group Including With Licensors approval 2%-4% 12-31-99 1,000,000
Puerto Rico boys 8-20 including but 12-31-0 1,750,000
not limited to T-shirts,
volley shorts, walk 01 2,500,000
shorts, shirts, pants, 02 3,000,000
jackets, warm-up suits, 03 3,500,000
sweaters, boxer shorts, &
lounge wear.
Name Payments Term Options Restrictive Distribution
Covenants
---------------------------------------------------------------------------------------------------------------------------
Bag Square Inc. Monthly for 1 year 4 years at Licensors Force Majeure Sec 24.2
minimums July 8/15/97-814/98 discretion
& January
Excess
--------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Monthly for 4 years 5 year - Force Majeure Sec 24.2
Enterprises, Inc minimums 06/01/94-12/31/98 provided Licensee gives
January, notice to Licensor in
April, July, writing not less then 6
October excess months prior to the end of
the initial term
--------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ dba Monthly for 3years Force Majeure Sec 23.2
A&E Group minimums July 07/01/97-
& January 12/31/00
excess
--------------------------------------------------------------------------------------------------------------------------
Name Territory Category ▇▇▇ % Adv % Annual
Minimums
--------------------------------------------------------------------------------------------------------------
International Italy, Including but not limited to Italy Expend Sch A missing 1.0
Sport Trading France, T-shirts, tank tops, volley 6% 4% per year?
S.R.L Greece, shorts, walk shorts, shirt,
Spain, bating suits, socks, pants, All
Portugal & jackets, warm-up suits, Other
Switzerland sweatshirts, sweaters, hats, 7%
visors, & bags
Rossignol S. A. Chile, Including but not limited to Chile Expend 23.2
Argentina, T-shirts, tank tops, volley 6% 3%
Peru, shorts, walk shorts, shirts, Opt
Bolivia, bathing suits, socks, pants, 5%
Paraguay, & jackets, warm-up suits,
Uruguay sweatshirts, sweaters, Other
parkas, windbreakers, 6%
jackets, hats, visors, bags,
wallets, towels, & belts
Rucanor Canada Including but not limited to 6% If 22.2
Canada LTD T-shirts, tank tops, volley licensor
shorts, walk shorts, shirts, FIVB; 1% &
bathing suits, socks, pants, expend
jackets, warm-up suits, 3.5
sweatshirts, sweaters,
windbreakers, jackets, hats No FIVB
visors, bags, wallets, Expend
towels, & belts 4%
Sideout Sport Australia, Clothing 6% 12/31/97 ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Expend
3%
Standard
Accessories Corp
Name
International Quarterly Jan, 05/31/93- Shall be automatically Force Majeure Sec 23.2
Sport Trading Apr, July, Oct. 12/31/97 renewed for 2 year terms
S.R.L unless notice is given by
Jan, prior either party no less than 6
year settlement month before expiration
Rossignol S. A. 12/31/94 200 Quarterly Chile Chile 2-3 year term by Force Majeure
12/31/95 220 9.1 04/01/94- giving notice to Licensor, 6
12/31/96 245 9.2 12/31/97 months in advance
12/31/97 270 9.3
12/31/98 350 others Other If mutually agreed
12/31/99 385 04/01/94-12/31/94
12/31/00 425
12/31/01 470
12/31/02 520
12/31/03575
Rucanor Canada LTD 12/31/96 200 Monthly Jan, 07/01/95-12/31/99 3 year at Licensees Force Majeure
12/31/97 300 Apr, July, Oct option
12/31/98 400 Excess
12/31/99 500
12/31/00 550
12/31/01 605
12/31/02 665
Sideout Sport 12/31/97
Australia
Standard Expired?
Accessories Corp
▇▇▇▇ ▇. ▇.▇. Men's,Women's & 1. 4 Expend 500,000
Lovely, Argentina, Children's Footwear 2. 4 3% 2,500,000
An Australia, Including Sandals, athletics, 3. 5 4,000,000
Individual Benelux, sneakers 4. 5 6,000,000
Brazil, Casuals,dress,boots aqua socks, 5. 6 8,000,000
Canada, water sandals, sand foot
Chile, covering, & other related beach Opt 8,500,000
China, footwear 6 9,000,000
France, Including canvas, leather rubber 10,000,000
Germany. & synthetic footwear, excluding 11,000,000
Greece, socks. 12,000,000
Hong Kong,
Italy, Japan,
Mexico, 13,000,000
Portugal, 13,500,000
Singapore, 14,000,000
S. Korea, 14,500,000
Taiwan, 15,000,000
UK
If Licensor
-------------------
Registeres
-------------------
Any country it is
added to the list
-------------------
▇▇▇▇▇▇▇▇ Mexico Including but not 6% Expend `96-600,000
Mexico, Limited to T-shirts, 4% `97-700,000
S.A. Tank tops, volley shorts, walk `98-800,000
shorts, shirts, bathing suits, `99-900,000
socks, pants, jackets, warm-up `00-1,000,000
suits, sweatshirts, sweaters, `01-1,100,000
windbreakers, jackets, hats, `02-1,200,000
visors, bags, wallets, towels, &
belts
Dabra S.A. Argentina, Including but not limited to 6% Expend 12-21-97
Urugua T-shirts, tank tops, volley 4% 250,000
shorts, walk shorts, shirts, 12-31-98
bathing suits, socks, pants, 300,000
jackets, warm-up suits,
sweatshirts, sweaters, 12-31-99
windbreakers, jackets, hats, 360,000
visors, bags, wallets, and belts. -----------
Option:
00 400,000
01 440,000
02 480,000
Quarterly 5 years 2 additional Sub-licensing Sec
January, April, 1/1/95- 5 year terms provided Licensee Allowed 23.2
July 12/31/99 gives notice to Licensor in At
& October writing not less than 6 month Licensee's
prior to the end of the term Discretion
Monthly 7 years Has the right to Sec
For 1/1/96- use the name in the 22.2
Mini-mums 12/31/02 operation of retail
July & stores owned &
January operated by
Excess Licensee or in a
joint venture with
others.
Force Majeure
Monthly 3 years 3 years provided Licensee Force Sec 21.2
For 1/1/96- gives notice to Licensor in Majeure
Minimums 12/31/99 writing not less than 6 months 11.4
July & January prior to the end of the initial
Excess term
SIDEOUT EXHIBIT "B"
------------------------------------------------------------------------------------------------------------------------------------
Tachikara U.S. Volleyballs 6% Expend 500,000 Monthly
U.S.A. Inc Argentina, 4% 600,000
Australia, 700,000
Benelux, Brazil, 750,000
Canada, Chile, 750,000
China, France,
Germany, Greece,
Hong Kong,
Italy, Japan,
Mexico,
Portugal,
Singapore, S.
Korea, Taiwan, UK
------------------------------------------------------------------------------------------------------------------------------------
I.X. Optical U.S. & Eyewear & eyewear 7% 2% to 12/31/97 75.0 Monthly?
worldwide accessories licensor 12/31/98 8.1.2
where & 300.0 8.2.
Licensor expend 12/31/99 8.3.3
holds 2% 400.0 8.3.4.
registrations 12/31/00
& apps 600.0
pending for 12/31/01
the name. 700.0
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Tachikara 5 years Force Sec
U.S.A. Inc 01/04/95- Majeure 3.6
12/31/99 Sec
21.2
------------------------------------------------------------------------------------------------------------------------------------
I.X. Optical U.S.
5 years
12/31/96-
12/31/01
worldwide
3 years
12/01/96-
12/31/99
------------------------------------------------------------------------------------------------------------------------------------
Exhibit C - Sideout Sport, Inc. Lien Creditors
As of 11/7/97
1. ▇▇▇▇▇ SongT
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount $ 1,885.00
Number 94K03115
Entered 4/13/97
2. San ▇▇▇▇▇ Surf N Skate
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount $1,833
Number 94K03115
Entered 4/13/94 Identical
3. Red Wing Knitting ▇▇▇▇▇
C/O Sulmeyer, Kupetz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Paid in full - lien release in process
4. State of California
State Tax Lien Release
Amount $114
Number 941595395
Entered 5/0/94
5. County of Santa ▇▇▇▇▇
County Tax Lien
Amount $81
Number 9613507564
Entered 11/1/95
6. Acme Display Fixtures
Amount $4,187
Number 97M011950
Entered 4/22/97
7. California Marker Copies Inc
Amount $841
Number 97M0693B
Entered 6/23/97
8. State of California
State Tax Lien
Amount $114
Number 94842514
Entered 5/2/94
9. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Kan Textile Plastic
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.#▇-▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Amount $4000
Number 97M15548
Entered 6/28/97
10. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Amount $5000
Number 97M15673
Entered 9/3/97
11. Republic Business Credit Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇; ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
FID/SS#▇▇▇▇▇▇▇▇▇
Amount
Number 9601860785
Entered 1/17/96
12. Northern Telecom Finance
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount
Number 92241412
Entered 11/16/92
Equipment Lease
13. MasterLease
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Amount
Number
Entered
Equipment Lease
14. IBM Credit Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇
Amount
Number 891551512/90094231
Entered 6/5/89 / 4/12/90
Equipment Lease
15. IBM
Dept.4725 B/O UW3 SCF
▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇-▇▇▇▇
Amount
Number
Entered
16. Business Credit Leasing In
▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇
Amount
Number
Entered
Equipment Lease
17. Ford Motor Credit Co
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
Amount
Number
Entered
18. Charter Equipment Leasing Corp
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
19. Orix Credit Alliance Inc
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Equipment Lease
20. Cruttenden ▇▇▇▇ Bridge Fund/Imperial Bank
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
21. Pitney ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ # ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇
Equipment Lease
22. Sanwa Leasing
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Equipment Lease
23. ▇▇▇▇▇▇▇ ▇▇▇▇▇
C/O Hill, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24. Canon Financial Services
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Equipment Lease
25. Citicorp North America
▇▇ ▇▇▇ ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Equipment Lease
EXHIBIT "D"
SIDEOUT SPORT
LICENSEE ROYALTY PAYMENTS DUE
LICENSEE AMOUNT REPORTED THRU COMMENTS
▇▇▇▇▇▇▇▇ 8/30/97 9/30 Report Due
I.X. Optical $ 4,500.00 Minimum due thru 12/31/97
Lovely 9/30/97
Argentina 7/20/97 9/30/96 report due
Canada 9/30/97
Chile $ 16,200.00 12/31/96 Minimum due for '97. Final
payment due 1/31/98
Japan $ 89,999.00 Minimum due 4/1/98 for
balance of '97, Net of
10% Tax
Italy $ 15,947.54 6/30/96 Due for 2nd Qtr 97, Net of
20% Tax
Mexico $ 17,657.20 ▇/▇▇/▇▇ ▇▇▇ ▇▇▇ & ▇▇▇ ▇▇▇. ▇▇▇
▇▇▇ report due 11/7/97
A & E $( 7,500.00) 6/30/97 9/30 report due
Bag Square $( 5,000.00) 6/30/97 9/30 report due
Tachikara $( 2,553.96) 6/30/97 9/30 report due
Japan $(40,500.00) Due 12/31/97, advance
payment for '98, net of
10% tax.
As of November 7, 1997
EXHIBIT E
▇▇▇▇ OF SALE AND ASSIGNMENT
Sideout Sport, Inc., a California corporation, having its principal office
at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller"), hereby sells,
assigns and transfers to Cherokee, Inc., a Delaware corporation, having its
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer"),
the following:
A. All worldwide right, title and interest held by Seller in and to the
Assets (as such term is defined in that certain Agreement of Purchase
and Sale of Trademarks and Licenses dated November 7, 1997, between
-
Seller and Buyer (the "Agreement")); and
B. All files, documents, records, specimens, artwork, screens, patterns,
designs, marketing materials, computer disks and tapes, and other
materials or other tangible assets respecting the Assets or in which
any of the Assets are embodied.
SIDEOUT SPORT, INC.
Dated: November 7, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
- ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President