EXHIBIT 10.113
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement (this "AGREEMENT") dated as of
April 1, 2003 (the "EFFECTIVE DATE"), is entered into by and between FEDERATED
MERCHANDISING GROUP ("FMG"), an unincorporated division of Federated Department
Stores, Inc., a Delaware corporation ("FEDERATED"), and PRIVATE BRANDS, INC., a
California corporation ("PB").
R E C I T A L S
A. FMG specializes in, among other things, the procurement and marketing
of private brand apparel, accessories and other merchandise for retail
sale by the operating subsidiaries of Federated (the "FEDERATED
STORES") and other third-party clients throughout the United States and
elsewhere.
B. PB specializes in the sourcing, development, procurement and
importation of apparel and accessories.
C. PB holds an exclusive license in and to the trademark "American Rag
CIE" (the "TRADEMARK"), for use in the manufacture, distribution,
promotion, marketing and sale of certain clothing and apparel in the
United States, Canada and Bermuda (the "TERRITORIES").
D. FMG desires to purchase from PB merchandise bearing the Trademark for
retail or wholesale sales and distribution on an exclusive basis in the
Territories and PB desires to sell such merchandise to FMG pursuant to
an exclusive arrangement, on the Terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. DEFINITIONS. Except as the context may otherwise require, the terms set
forth below shall have the meanings indicated below. Terms not defined
below shall have the meaning indicated elsewhere in the Agreement or,
if not defined in the Agreement, shall be given a definition most
appropriate to the context in which they appear.
1.1 DEFINED TERMS
o "AFFILIATE" means with respect to any Person, any
other Person that, directly or indirectly, through
one or more intermediaries, Controls, is Controlled
by or is under common Control with such specified
Person.
o "ANNUAL MINIMUM PURCHASE REQUIREMENTS" has the
meaning specified in SECTION 5.1.
o "AUTHORIZED SELLERS" has the meaning specified in
SECTION 2.6.
o "CONTRACT QUARTER" means, the period commencing on
the Effective Date and ending on April 30, 2003, and
each period of three (3) successive calendar months
thereafter during the Term.
o "CONTRACT YEAR" means, the period commencing on the
Effective Date and ending on January 31, 2005, and
each period of twelve (12) successive calendar months
thereafter during the Term.
o "CONTROL" means, with respect to any Person, the
possession, directly or indirectly, of the power to
direct or cause the direction of the management and
policies of such Person, whether through the
ownership of securities, partnership interests or
other ownership interests, by contract, by membership
or involvement in the board of directors or other
management structure of such Person or otherwise.
o "CUSTOMER" means any end user who purchases the
Merchandise from an Authorized Seller.
o "EFFECTIVE DATE" is the date specified in the
introductory paragraph of this Agreement.
o "FEDERATED" means Federated Department Stores, Inc.
o "FEDERATED STORES" has the meaning specified in
paragraph A of the Recitals.
o "FMG" means Federated Merchandising Group, an
unincorporated division of Federated and a party to
this Agreement.
o "INITIAL TERM" has the meaning specified in SECTION
4.1.
o "INTERNATIONAL TRADEMARK CLASS" means a
classification of goods and services listed in the
most current copy of the INTERNATIONAL CLASSIFICATION
OF GOODS AND SERVICES FOR THE PURPOSES OF THE
REGISTRATION OF MARKS published by the World
Intellectual Property Organization.
o "LICENSE TERM" means the period during which PB holds
the license for the trademark, including any renewal
terms thereof.
o "MERCHANDISE" means men's, women's and children's
clothing bearing the Trademark, namely, pants,
shirts, jackets, skirts, blouses, coveralls,
underwear, shoes, belts and hats.
o "ORDERED MERCHANDISE" has the meaning specified in
SECTION 2.1.
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o "PB" means Private Brands, Inc., a California
corporation, a party to this Agreement.
o "PB LICENSE" means that certain exclusive license
agreement dated April1, 2003, between PB and the
Trademark Owner for the Trademark.
o "PERSON" means any individual, company (whether
general or limited), limited liability company,
corporation, trust, estate, association, nominee or
other entity.
o "RENEWAL TERM" has the meaning specified in SECTION
4.1.
o "SALES PROMOTION MATERIALS" means all advertisements,
in-store shop designs, fixture designs, packaging,
store signing, hangtags and any other artwork
associated with the Merchandise.
o "SEMI-ANNUAL PERIOD" means the period commencing on
the Effective Date and ending on July 31, 2004, and
each period of six (6) successive calendar months
thereafter during the Term.
o "TERM" has the meaning specified in SECTION 4.1, and
if the context requires, includes the Initial Term
and any Renewal Term.
o "TERRITORIES" means the United States, Canada and
Bermuda.
o "TRADEMARK" means "American Rag CIE" including the
correspondent U.S. trademark registration numbers and
trademark applications listed in EXHIBIT A attached
hereto and incorporated herein, and any Canada and
Bermuda common law trademark rights or future
registrations, if any, in each case exclusively
licensed by PB, as well as the right to utilize
derivations of "American Rag CIE" under the PB
License.
o "TRADEMARK OWNER" means American Rag CIE II, a
California corporation.
1.2 CONSTRUCTION. Except as the context may otherwise require, (i)
words of either gender include the other gender, (ii) words
using the singular or plural number also include the plural or
singular number, respectively, (iii) the terms "HEREOF",
"HEREIN", "HEREBY" and derivative or similar words refer to
this entire Agreement, (iv) the term "PARTY" means FMG or PB
as the context requires, and their respective officers,
directors, agents and representatives, (v) the term
"INCLUDING" means "INCLUDING, BUT NOT LIMITED TO", and (vi)
the term "THIS AGREEMENT" shall be deemed to include all
Attachments, Exhibits and Schedules attached hereto or
otherwise incorporated by reference, as such Attachments,
Exhibits and Schedules may be amended from time to time
through written agreement
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signed by both parties hereto. Whenever this Agreement refers
to a number of days or months, such number shall refer to
calendar days or months unless otherwise specified.
2. SERVICES AND EXCLUSIVE DISTRIBUTION.
2.1 PURCHASE AND SALE OF MERCHANDISE. During the Term, PB shall
design, source, manufacture, purchase, import or otherwise
acquire each season (as such term is understood in the
clothing and apparel industries) a full assortment of
Merchandise, which it shall offer to sell to FMG at such price
as determined by PB. FMG shall issue FMG's standard purchase
order for such Merchandise that FMG desires to purchase from
PB (the "ORDERED MERCHANDISE"). All Ordered Merchandise
shipped by PB pursuant to this Agreement shall be ordered,
manufactured, shipped and delivered in compliance with and
subject to the standards and provisions set forth in EXHIBIT B
(the "FEDERATED FASST Manual"), which contains FMG's purchase
order terms and conditions as well as other terms and
conditions of sale and its terms of payment. The prices
payable by FMG for Ordered Merchandise shall be as set forth
on the initial purchase order issued by FMG to PB for such
Ordered Merchandise.
2.2 EXCLUSIVITY. Upon the terms and conditions contained in this
Agreement and during the Term, FMG shall have the exclusive
right to sell the Merchandise purchased by FMG from PB in the
Territories solely through Authorized Sellers (as defined in
SECTION 2.6 below) and through the websites operated by or on
behalf of Authorized Sellers. FMG's right to sell the
Merchandise through websites operated by the Authorized
Sellers shall be restricted to the right to fulfill orders
placed by Customers within the Territories. FMG shall have no
right to (i) design, source, or manufacture, or have any
Affiliate or third party design, source, or manufacture, the
Merchandise, or (ii) except as provided in SECTION 2.8 below,
distribute, promote, advertise, market or sell the Merchandise
through any third party or Affiliate which is not an
Authorized Seller. Except as provided in SECTION 2.7 below,
neither PB nor any of its Affiliates, shall sell, distribute
or otherwise make available to customers any Merchandise in
any part of the Territories or authorize, assist, support,
directly or indirectly, any other party to do so.
2.3 RIGHT OF FIRST REFUSAL. PB agrees that prior to engaging
itself or a third party to manufacture any merchandise bearing
the Trademark in an International Trademark Class other than
the International Trademark Class for the Merchandise, it
shall offer to FMG the right of first refusal for FMG to do so
on its own pursuant to a commercially reasonable sublicense or
other agreement. Should the parties fail to agree on a
reasonable sublicense or other agreement, PB may engage in
manufacturing such merchandise itself or through a third
party, but may not, without FMG's prior written approval, sell
such merchandise within the
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Territories. Should the parties execute a sublicense or other
agreement according to the terms of this SECTION 2.3, all
costs and attorney's fees incurred by PB in obtaining
trademark registration under the laws of the Territories for
such additional classes of merchandise shall be borne equally
by the parties.
2.4 REPRESENTATIONS REGARDING THE TRADEMARK. PB represents,
warrants and covenants to and with FMG that PB:
(a) holds the PB License and will continue to do so for
the Term of this Agreement and that entering into
this Agreement does not violate or conflict with any
of the provisions of the PB License;
(b) has full right, power and authority to enter into
this Agreement and to perform all of its obligations
hereunder;
(c) has no knowledge of any act or instance of
infringement of the Trademark in regard to the
manufacture, marketing, advertising, distribution or
sale of Merchandise;
(d) has not granted any other existing license or
sub-license to use the Trademark in the Territories;
and
(e) will not grant any other license or sub-license to
use the Trademark on any Merchandise in the Territory
during the Term of this Agreement, except in
accordance with the provisions hereof.
(f) will undertake an aggressive strategy to obtain from
the Trademark Owner rights to the Trademark in
merchandise classifications not currently held but
contemplated herein.
2.5 GOODWILL. The parties to this Agreement acknowledge that great
value is placed on the Trademark and the goodwill associated
therewith, and any goodwill developed or created in the
Trademark pursuant to this Agreement shall inure to the
benefit of the Trademark Owner in accordance with the terms of
the PB License.
2.6 AUTHORIZED SELLERS. FMG acknowledges that the Trademark has
established prestige and goodwill, and that it is of great
importance to PB and FMG that, in the sale of the Merchandise,
the high standards and reputation that PB and the Trademark
Owner have established with respect to the Trademark be well
maintained. PB shall therefore have approval, which approval
PB may withhold in its reasonable discretion, over which FMG
Affiliates may carry and sell the Merchandise in the
Territories (the "AUTHORIZED SELLERS"). The list of
PB-approved Authorized Sellers is attached hereto and
incorporated herein as EXHIBIT C. PB and FMG may amend EXHIBIT
C from time to time during the Term only by
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written agreement signed by both PB and FMG. Notwithstanding
the foregoing, any retailer which is acquired by or otherwise
becomes a subsidiary of Federated shall be deemed an
Authorized Seller without PB's approval. From time to time and
upon PB's request, FMG shall notify PB of such acquisitions or
subsidiaries and shall update EXHIBIT C accordingly.
2.7 PB RIGHTS.
(a) SALES OUTSIDE THE TERRITORIES. PB expressly reserves
the right to sell, or to grant sublicensees rights to
sell, the Merchandise outside the Territories.
(b) SALES WITHIN THE TERRITORIES. PB expressly reserves
the right to sell and promote the sale of the
Merchandise within the Territories at the two retail
stores listed on EXHIBIT D attached hereto and
incorporated herein, and up to an additional three
(3) stand-alone retail stores in the United States
and an additional two (2) stand-alone retail stores
in Canada operating under the "American Rag"
trademark (the "EXEMPTED RETAILERS"). Orders placed
by Exempted Retailers with PB for Merchandise shall
be applied (at the price set forth in the applicable
purchase order) against the Annual Minimum Purchase
Requirements during the period in which such orders
are placed. Furthermore, PB shall have the right to
sell damaged Merchandise and "seconds" on terms
mutually acceptable to PB and FMG.
(c) RESERVATION OF RIGHTS. Except as otherwise provided
in this Agreement, PB reserves any and all other
rights in and to the Trademark and the Merchandise.
2.8 NO OBLIGATION TO PURCHASE MERCHANDISE. Notwithstanding the
provisions of Section 5.1, PB acknowledges that except as set
forth in Section 5.3 FMG has no obligation to purchase any
Merchandise from PB under this Agreement. PB expressly
acknowledges that, except as set forth in Section 5.3, PB's
sole and exclusive remedy upon a failure by FMG to comply with
the provisions of Section 5.2 will be to terminate this
Agreement, including FMG's right to exclusivity as set forth
in Section 2.2 and FMG's right of first refusal, as set forth
in Section 2.3.
3. SALES PROMOTION MATERIALS.
3.1 GRANT OF SUBLICENSE. Upon the terms and conditions contained
in this Agreement, PB hereby grants and FMG hereby accepts the
exclusive (except as otherwise provided herein) sublicense to
use the Trademark and to sublicense the use of the Trademark
to Authorized Sellers solely in connection with the
development and manufacture of Sales Promotion
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Materials and the sale and promotion of the Merchandise
purchased by FMG from PB hereunder.
3.2 SALES PROMOTION MATERIALS. FMG shall design, create,
manufacture and provide all Sales Promotion Materials to be
used in connection with the Merchandise purchased by it from
PB. At PB's request, FMG shall submit to PB for its approval,
Sales Promotion Materials that contain the first use of the
Trademark in a form not previously approved by PB, which
approval shall not be unreasonably withheld. With the
exception of the Trademark, all intellectual property and
proprietary rights in and to the Sales Promotion Materials
shall remain the property of FMG, which PB may not use or
affix to the Merchandise, or in any way authorize others to do
so without the express written approval of FMG.
Notwithstanding the foregoing, PB shall have the right to use
certain Sales Promotion Materials, including, but not limited
to logos and hangtags incorporating the Trademark for the
purpose of exercising PB's rights in SECTION 2.7(B) above. PB
shall pay FMG for Sales Promotion Materials at FMG's cost.
Notwithstanding PB's purchase from FMG of Sales Promotion
Materials, PB's right to use such materials shall terminate
immediately upon termination of this Agreement for any reason,
and PB shall immediately destroy any remaining quantities of
such materials in its possession. .
3.3 TRADEMARK NOTICES. FMG agrees that all material bearing the
Trademark shall contain appropriate markings and/or notices as
required from time to time by PB and according to the
trademark laws of the Territories.
3.4 DEFENDING AND PROTECTING THE TRADEMARK. FMG shall cooperate
with PB in protecting and defending the Trademark. In the
event that the protection of the Trademark in the Territories
becomes necessary, or a party other than an Authorized Seller
or Exempted Retailer sells Merchandise in the Territories, FMG
shall advise PB in writing of the nature and extent of the
violation promptly after it becomes aware of it. PB shall take
immediate and appropriate action necessary to protect both the
Trademark and FMG's rights, as specified herein. Should PB
choose to file a lawsuit to protect any Trademark, or to
protect the rights granted to FMG herein, such lawsuit shall
be prosecuted solely at PB's expense and PB shall retain all
sums recovered.
4. TERM AND TERMINATION/DEFAULT.
4.1 TERM. The term of this Agreement (the "TERM") will commence on
the Effective Date and continue for an initial period ending
on January 31, 2014 (the "INITIAL TERM"), unless earlier
terminated as provided herein. The Term shall automatically
renew on the terms and conditions stated herein for three (3)
additional periods of ten (10) years each (each a "RENEWAL
TERM"), subject to the provisions of SECTION 5. The parties
hereto intend that the Term of this Agreement run concurrently
with the
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License Term. If the PB License terminates prior to the
expiration of the Term (including the Initial Term and three
(3) Renewal Terms), this Agreement shall terminate upon
termination of the PB License. PB shall advise FMG by written
notice given no less than one hundred eighty (180) days in
advance of the scheduled expiration of the PB License.
4.2 TERMINATION BY MUTUAL AGREEMENT. This Agreement may be
terminated at any time by the mutual agreement of FMG and PB.
4.3 TERMINATION FOR BREACH. Either FMG or PB may terminate this
Agreement, effective immediately, upon giving the other a
written Notice of Termination, if the other party breaches
this Agreement in any material respect or fails to perform any
material obligation hereunder, and such breach or failure is
not curable or, if curable, is not cured within thirty (30)
days after written notice thereof from the non-breaching party
(a "MATERIAL BREACH").
4.4 TERMINATION BY FMG. FMG may also terminate this Agreement,
effective immediately, upon giving PB a written notice of
termination if PB ceases, or admits in writing its intention
to cease, the conduct of its business, or sells substantially
all of its assets to a third party.
4.5 TERMINATION BY PB. PB may also terminate this Agreement (a)
pursuant to the terms of SECTION 5.2 below; (b) after
providing 30 days written notice to FMG regarding any use by
FMG or FMG's Affiliates of the Trademark in any manner not
authorized herein and FMG does not cure such action within
such prescribed 30 day period; or (c) effective immediately,
upon giving FMG a written notice of termination if FMG ceases,
or admits in writing its intention to cease, the conduct of
its business, or sells substantially all of its assets to a
third party.
4.6 EFFECTS OF TERMINATION. In the event of the expiration or
termination of this Agreement for any reason, FMG will have no
further liability or obligation to PB hereunder except as
otherwise provided herein. Notwithstanding the foregoing, the
provisions of this Agreement will govern the rights and
obligations of the parties with respect to all orders placed
prior to the termination or expiration of this Agreement, and
in no event will the termination of this Agreement relieve
either party hereto of any obligation hereunder which existed
prior to such termination with respect to orders placed prior
thereto. In addition, FMG and each of the Authorized Sellers
shall have one (1) year following the date of termination or
expiration in which to liquidate their inventory of
Merchandise.
4.7 SPECIFIC PERFORMANCE. The parties hereby recognize and
acknowledge that in the event either party breaches the other
party's rights under this Agreement, that party would suffer
immediate and irreparable harm.
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Accordingly, each party agrees that in the event of such
default, the other party shall be entitled to equitable relief
by the way of temporary and permanent injunction and such
other further relief as a court would deem just and proper.
4.8 RETURN OF MATERIALS. In the event of the expiration or
termination of this Agreement for whatever reason, all
samples, books, records, designs and materials of any kind,
and all copies thereof of either party held by the other
party, will be returned to the owner thereof within fifteen
(15) days following the effective date of termination of this
Agreement.
5. MINIMUM PURCHASE REQUIREMENTS; EXCLUSIVITY.
5.1 ANNUAL MINIMUM PURCHASES. In order to preserve its rights
under this Agreement, including its rights to exclusivity as
set forth in Section 2.2 and its right of first refusal as set
forth in Section 2.3, FMG shall order, during each Contract
Year of the Term, Merchandise with the minimum values (based
on the purchase price payable for such Merchandise) set forth
below (the "ANNUAL MINIMUM PURCHASE REQUIREMENTS"):
Contract
Year 5
Contract Contract Contract Contract through
Year 1 Year 2 Year 3 Year 4 Year 10
----------- ----------- ----------- ----------- -----------
$29 million $40 million $61 million $84 million $94 million
The Annual Minimum Purchase Requirements for each Contract
Year of the first Renewal Term shall be equal to the average
of the total amounts of Ordered Merchandise during each of
Contract Years six through ten of the Initial Term, provided
that in no event shall the amount used in any Contract Year to
calculate the Annual Minimum Purchase Requirements for the
first Renewal Term be less than $94 million. Furthermore, the
Annual Minimum Purchase Requirements for each Contract Year of
the first Renewal Term shall not exceed $113 million.
Similarly, the Annual Minimum Purchase Requirements for each
successive Renewal Term shall be equal to the average of the
total amounts paid by FMG for Ordered Merchandise during each
of Contract Years six through ten of the previous Renewal
Term, provided that in no event shall the amount used in any
Contract Year to calculate the Annual Minimum Purchase
Requirements for the successive Renewal Term be less than $94
million. Furthermore, the Annual Minimum Purchase Requirements
for each Contract Year of the second Renewal Term shall not
exceed 120% of the amount for the last Renewal Term.
Any order placed by FMG and cancelled prior to the
cancellation date specified in the applicable purchase order
shall reduce the amount ordered by FMG for the period during
which the order was placed.
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No such reduction will be effected if FMG cancels an order
after the specified cancellation date.
5.2 FULFILLMENT. FMG shall have fulfilled its obligation to order
the Annual Minimum Purchase Requirements as required in
SECTION 5.1 if the aggregate value of all Merchandise, whether
ordered by FMG for itself or by its Authorized Sellers, equals
or exceeds the amounts specified for each Contract Year in
SECTION 5.1. If FMG fails to meet the Annual Minimum Purchase
Requirements specified herein during any Contract Year, FMG
shall be required to do either of the following in order to
maintain its rights under this Agreement, and if FMG fails to
do either of the following, PB may terminate this Agreement
effective immediately by providing written notice to FMG:
(a) Until the prior Contract Year's shortfall is ordered
in full, during each Semi-Annual Period of the
Contract Year immediately following, order
Merchandise that exceeds 50% of the current Contract
Year's Annual Minimum Purchase Requirements by an
amount equal to 50% of the amount of the prior
Contract Year's shortfall (the "SHORTFALL REQUIREMENT
AMOUNT") (for total orders of Merchandise over the
following Contract Year of 100% of the prior Contract
Year's shortfall); or
(b) On each of July 31 and January 31 of the Contract
Year immediately following, pay to PB an amount equal
to 2.25% of the prior Contract Year's shortfall (for
total payments over the following Contract Year of
4.5% of the prior Contract Year's shortfall).
Notwithstanding the foregoing and with the exception of the
first Contract Year, at the end of a Contract Quarter, if the
aggregate orders over the immediately preceding 12 month
period are less than 50% of the current Contract Year's Annual
Minimum Purchase Requirements, then PB may request FMG to
confirm FMG's purchase commitment under this Agreement. Within
15 days of receiving such notice, FMG shall, in good faith,
notify PB of whether FMG will maintain in effect its rights
under this Agreement during the next Contract Year by meeting
the requirements of SECTION 5.2(A) or 5.2(B) above. If FMG
informs PB that it does not intend to maintain in effect its
rights under this Agreement during the next Contract Year, or
fails to respond to PB within the specified 15 days period,
then PB may terminate this Agreement by providing written
notice to FMG, which termination shall be effective at the end
of the then current Contract Year.
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5.3 PURCHASE REQUIREMENT FOR FIRST TWO CONTRACT YEARS.
Notwithstanding SECTIONS 2.9, 5.1 and 5.2 to the contrary, FMG
hereby agrees to purchase the Annual Minimum Purchase
Requirements for Contract Years 1 and 2, and to the extent
that FMG fails to purchase the Annual Minimum Purchase
Requirements, FMG shall, in the immediately following Contract
Year, either (i) purchase the shortfall amount pursuant to
SECTION 5.2(A) or, (ii) pay PB the amount specified pursuant
to SECTION 5.2(B).
5.4 SHORTFALL REQUIREMENT AMOUNT. For the purposes of SECTION
5.2(A) above, any excess amounts above the Shortfall
Requirement Amount ordered in the first Semi-Annual Period of
a Contract Year shall be applied to the Shortfall Requirement
Amount for the second Semi-Annual Period of the same Contract
Year until the shortfall is ordered in full.
5.5 CONTRACT YEARS. The parties hereby acknowledge, that for the
purposes of this Agreement, Contract Year 1 of the Initial
Term shall begin at the Effective Date and shall end on
January 31, 2005, and that each subsequent Contract Year shall
begin on February 1 and end on January 31 of the following
calendar year.
6. PAYMENT.
6.1 PAYMENT. FMG shall pay for Ordered Merchandise in accordance
with its standard terms and conditions as set forth in EXHIBIT
B attached hereto.
7. PRODUCTION FACILITIES
7.1 PRODUCTION FACILITIES. PB may use its own factories or those
of its Affiliates or authorize third parties to manufacture
the Merchandise sold to FMG. PB shall provide to FMG the names
and addresses of each owned or third party factory that PB
proposes to utilize for the production of Merchandise sold to
FMG and the categories of Merchandise to be produced in each
such factory or facility. Such information shall remain
confidential in accordance with SECTION 9 of this Agreement.
FMG and its designees or representatives shall have the right
to inspect and approve each factory designated by PB. FMG may,
in its sole discretion, reasonably withhold its approval of
any such third party and/or its factories or facilities.
Following approval of a facility or factory by FMG, FMG
designees or representatives may enter such factories and
facilities, accompanied by PB's designee(s) or
representatives(s), during regular business hours and upon
reasonable notice, for the purpose of inspecting the
Merchandise and/or the Sales Promotion Materials relating to
the Merchandise that is being produced for sale to FMG.
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7.2 CODE OF CONDUCT/BURMA. PB covenants that all factories and
facilities used by PB for the manufacture and production of
the Merchandise sold to FMG are or shall be at the time of
sale, in compliance with Federated's Vendor/Supplier Code of
Conduct attached as EXHIBIT E. PB shall be solely responsible
for the failure of any third party, factory or facility to
comply with FMG's Vendor/Supplier Code of Conduct. In
addition, PB may not itself nor permit third parties to
produce or manufacture in whole or in part any Merchandise
sold to FMG within the country of Myanamar/Burma.
8.1 REPRESENTATIONS AND WARRANTIES, INDEMNIFICATION.
8.1 MUTUAL REPRESENTATIONS AND WARRANTIES
(a) Each party represents and warrants that it is duly
organized and existing in good standing under the
laws of the jurisdiction in which it is organized, is
duly qualified and in good standing as a foreign
corporation in every state in which the character of
its business requires such qualifications, and has
the power to own its property and to carry on its
business as now being conducted.
(b) Each party represents and warrants that the execution
and delivery of this Agreement, and the performance
of the transactions contemplated by this Agreement,
are within its powers, have been duly authorized by
all necessary corporate action, do not require any
consent or other action by and in respect of or
filing with any third party or governmental body or
agency and do not, and will not, contravene, violate
or conflict with or constitute a default under any
provision of applicable law, regulation, or published
interpretive guidance or ruling.
8.2 INSURANCE. PB shall, throughout the Term of this Agreement,
obtain and maintain, at its own cost and expense, $2 million
($1 million per occurrence) products liability insurance
covering personal injury and property damage, $5 million ($1
million per occurrence) comprehensive general liability
insurance, and such other insurance policies and with such
limits as are commensurate with its business.
8.3 INDEMNIFICATION BY PB. PB, at its own cost and expense, shall
indemnify, defend and hold FMG, its Affiliates, and their
respective officers, directors, employees and agents harmless
from and against any and all liabilities, losses, claims,
causes of action, suits, damages and expenses, including
reasonable attorneys' fees and disbursements (collectively
"Losses") arising out of or resulting from (i) any breach by
PB, its Affiliates and/or any of their respective
representatives of any of PB's representations, warranties or
covenants herein, (ii) any actual or alleged defects in any of
the Merchandise or other claim related to any of the
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Merchandise, including property damage, personal injury, death
or otherwise, (iii) any actual or alleged infringement or
violation of any patents or copyrights, or other intellectual
property rights of third parties in connection with the
manufacture, distribution, sale, or use of the Merchandise
except if, and to the extent, any such violation results
directly from the use of the Trademarks by FMG or its
Affiliates in a manner not authorized or contemplated herein,
(iv) any violation of any applicable law or regulation in
connection with the manufacture, and labeling, of any of the
Merchandise sold by PB to FMG or (v) any violation of
Federated's Vendor Supplier Code of Conduct. This section
shall survive the expiration, termination, breach of this
Agreement.
8.4 INDEMNIFICATION BY FMG. FMG, at its own cost and expense,
shall indemnify, defend and hold PB, its parent, Affiliates,
and their respective officers, directors, employees and agents
harmless from and against any and all liabilities, losses,
claims, causes of action, suits, damages and expenses,
including reasonable attorneys' fees and disbursements arising
out of or resulting from (i) any breach by FMG and/or any of
its representatives of any of FMG's representations,
warranties or covenants herein, (ii) FMG's use of the
Trademark in any manner not authorized or contemplated herein.
8.5 DISCLAIMER AND LIMITATIONS OF LIABILITY.
(a) THE WARRANTIES SET FORTH HEREIN AND PROVIDED PURSUANT
TO THE FEDERATED FASST MANUAL AND THE GENERAL TERMS
AND CONDITIONS (EXHIBIT B) ARE LIMITED WARRANTIES AND
ARE THE ONLY WARRANTIES MADE BY PB. PB EXPRESSLY
DISCLAIMS, TO THE EXTENT PERMITTED BY APPLICABLE LAW
ALL OTHER WARRANTIES NOT SET FORTH HEREIN OR IN
EXHIBIT B, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
(b) TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE
LAW, NEITHER PARTY WILL HAVE ANY LIABILITY TO THE
OTHER PARTY FOR LOST PROFITS OR OTHER CONSEQUENTIAL,
SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, BASED UPON A
CLAIM OF ANY TYPE OR NATURE (INCLUDING BUT NOT
LIMITED TO CONTRACT, TORT INCLUDING NEGLIGENCE,
WARRANTY OR STRICT LIABILITY), OR CLAIMS ARISING FROM
THE TERMINATION OF THIS AGREEMENT EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
13
9. CONFIDENTIALITY.
9.1 CONFIDENTIALITY. No party will disclose to any third party any
trade secret or confidential information that belongs to any
other party that was disclosed pursuant to this Agreement. For
purposes of this Agreement, the term "CONFIDENTIAL
INFORMATION" and "TRADE SECRETS" will include all information
of any nature and in any form which is owned by FMG or PB (or
their respective Affiliates) and which is not publicly
available or generally known to persons engaged in businesses
similar to that of FMG and PB (either on or after the
Effective Date), including the materials referenced in this
Agreement and all practices, processes, methods, know-how and
other facts related to sales, advertising, promotions,
financial matters, suppliers, supplier lists, customers,
customer lists, or customers' purchases of goods or services
from FMG or PB, and all other secrets and information of a
confidential and proprietary nature, provided, however, that
"CONFIDENTIAL INFORMATION" and "TRADE SECRETS" will not
include (i) information that is or becomes publicly known
through no fault of the receiving party, and (ii) information
that any party is required to disclose under applicable law or
the rules of any exchange on which the securities of such
party are traded. Upon the expiration of the Term, each party
will cease to use the other party's confidential information
and trade secrets, and all tangible confidential information
and trade secrets that have been provided to a party by
another party will be returned to the party that provided such
information or trade secrets.
9.2 NO UNILATERAL PRESS RELEASES. Neither party shall issue either
formally or informally a press release or statement regarding
this Agreement without first receiving the approval of the
other party, which approval shall not be unreasonably
withheld. The parties shall use good faith efforts to issue
joint statements when possible. Notwithstanding the foregoing,
either party may issue a press release or other statement
regarding this Agreement to the extent required by law or
regulation or the rules of any stock exchange or securities
listing service.
10. MISCELLANEOUS.
10.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be
deemed to have been properly given or sent on the date when
such notice, request, consent or communication is (i)
personally delivered and acknowledged, or (ii) if sent by
registered or certified mail, return receipt requested,
postage prepaid, when received, as follows:
14
(a) if to PB, addressed as follows:
Private Brands, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Chairman
With a copy to:
Xxxxxx Xxxxxxxx & Markiles, LLP
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
(b) if to FMG, addressed as follows:
Federated Merchandising Group
00 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
With a copy to:
Xxx X. Xxxxxx, Esq.
Federated Department Stores, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Anyone entitled to notice hereunder
may change the address to which
notices or other communications are
to be sent to it by notice given in
the manner contemplated hereby.
10.2 RELATIONSHIP OF THE PARTIES. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto
or by any third party to create the relationship of principal
and agent, a partnership, a joint venture, or Licensor and
Licensee, other than the relationship of Supplier and
Exclusive Distributor. PB shall not make purchases in the name
of FMG or obligate FMG in any way.
10.3 GOVERNING LAW/CLAIMS AGAINST AFFILIATES/BINDING EFFECT. This
Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect
to its provisions regarding conflict of laws. Any action or
proceeding arising out of, concerning or affecting, in whole
or in part, this Agreement shall be brought in the Borough of
Manhattan, State of New York. Any claims that PB may have
under this Agreement shall be asserted or raised against
15
Federated only and PB hereby agrees to hold harmless each
Affiliate of Federated and hereby waives and disclaims for the
benefit of each such Affiliate any claims, suits, or causes of
action that Licensee may have for any damages, losses, right
of offset or other injury arising under or in connection with
this Agreement.
10.4 ENTIRE AGREEMENT. This Agreement and the exhibits attached
hereto contain the entire agreement between the parties hereto
with respect to the Merchandise, and any representations,
endorsements, promises or arrangements, including those
contained in any prior drafts of this Agreement, if not
embodied herein, shall not be of any force or effect. If, for
any reason, the terms set forth herein conflict with the
exhibits attached, the terms herein shall control. Any and all
prior agreements between the parties with respect to
Merchandise bearing the Trademark are superseded hereby and of
no further force or effect.
10.5 AMENDMENTS: WAIVERS. This Agreement may be notified or amended
only in writing signed by officers of PB and FMG. No failure
by any party to enforce any provision of this Agreement or to
exercise any right or remedy resulting from a breach thereof,
no acceptance of full or partial payment or acceptance of
performance with the knowledge of the breach of any provision
of this Agreement, and no custom or practice of the parties at
variance with the terms of this Agreement shall be construed
as a waiver of such breach, any provision of this Agreement or
other right of such party under this Agreement. No waiver of
any provision of this Agreement shall be effective unless in
writing and signed by the party against whom such waiver is
charged. No person, firm or corporation, other than the
parties hereto shall have, or be deemed to have, any rights
under this Agreement.
10.6 FORCE MAJEURE. If any party to this Agreement is delayed in
the performance of any of its obligations under this Agreement
or is prevented from performing any such obligations due to
causes or events beyond its control, including, without
limitation, acts of God, fire, flood, strike or other labor
problem, injunction or other legal restraint, present or
future law, governmental order, rule or regulation, then such
delay or nonperformance shall be excused and the time for
performance thereof shall be extended to include the period of
such delay or non-performance. In any such event, the
non-performing party shall be excused from any further
performance or observance of the obligation so affected only
for so long as such circumstances prevail and such party
continues to use commercially reasonable efforts to recommence
performance or observance as soon as reasonably practicable.
10.7 SURVIVING OBLIGATIONS. Upon termination of this Agreement,
each of the parties shall be relieved of any further
obligation hereunder as of the effective date of such
termination, except as to obligations theretofore
16
incurred, any liabilities incurred under the terms of this
Agreement for any and all sums, damages liabilities and
deficiencies of any kind or nature or any remedies provided in
this Agreement that shall be available to the other and by
their nature extend beyond the expiration or termination of
this Agreement, all of which shall remain in effect until
fulfilled.
10.8 ASSIGNMENT. The rights granted to the parties hereunder are
personal in nature, and this Agreement may not be assigned by
either party (voluntarily or otherwise, by virtue of a merger,
consolidation or change of control, or other transfer by law)
without the other party's prior written consent. Neither party
shall be required to accept performance of the other party's
obligations hereunder from any party other than PB or FMG, as
the case may be, except as set forth herein and no assignee
for the benefit of creditors, receiver, liquidator,
sequestrator, trustee in bankruptcy, sheriff or other officer
of a court or official charged with the custody of such
party's assets or business shall have any right to continue
performance under this Agreement.
10.9 SEVERABILITY. The provisions hereof are severable, and if any
provision shall be held invalid or unenforceable in whole or
in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such provision, or part
thereof in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction, or any other
provision in this Agreement in any jurisdiction.
10.10 HEADINGS. The paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
17
IN WITNESS WHEREOF, the parties hereto have executed this Exclusive
Distribution Agreement or caused the same to be executed by a duly authorized
person as of the date set forth above.
FEDERATED MERCHANDISING GROUP, PRIVATE BRANDS, INC.,
A division of Federated Department a California corporation
Stores, Inc.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxx
--------------------------- ---------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxx Xxxx
Title: SVP - Finance/Logistics Title: Chairman and CEO
18
EXHIBIT A
Registered Trademarks and Trademark Applications
1. United States of America
(a) USPTO Reg. No. 1936234
(b) USPTO Serial No. 76337153
2. Canada
None
3. Bermuda
None
19
EXHIBIT B
Federated FASST Manual
[OMITTED]
20
EXHIBIT C
AUTHORIZED SELLERS
This is the Exhibit C referred to in the Exclusive Distribution Agreement dated
April 1, 2003 by and between Federated Merchandising Group ("FMG"), a division
of Federated Department Stores, Inc. ("Federated") and Private Brands, Inc.
("PB").
Authorized Sellers
A.1. Federated Affiliates
Bloomingdale's, Inc.
Bloomingdale's By Mail Ltd.
Burdines Inc.
Macy's East, Inc.
Macy's West, Inc.
Xxxxx.xxx, Inc.
Rich's Department Stores, Inc. (doing business as Rich's/Macy's,
Lazarus and Xxxxxxxxx'x)
The Bon, Inc. doing business as The Bon Marche
B.1. Non-Federated
Xxxxxx'x Bay Company (Canada)
Trimingham Brothers, Ltd. (Bermuda)
21
EXHIBIT D
PB RETAIL AFFILIATES
1. American Rag, 000 Xxxxx Xx Xxxx Xxx., Xxx Xxxxxxx, XX.
2. American Rag, 0000 Xxx Xxxx Xxx., Xxx Xxxxxxxxx, XX.
22
EXHIBIT E
FMG VENDOR/SUPPLIER CODE OF CONDUCT
[OMITTED]
23
