1
Exhibit 10.144
AGREEMENT
THIS AGREEMENT made as of the 1st day of July, 1995 by and among MEM
COMPANY, INC., a New York corporation, with offices in New Jersey and a mailing
address at X.X. Xxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000 (interchangeably "LICENSOR"
or "MEM"), and FILO AMERICA, INC. (interchangeably "LICENSEE" or "FILO"), a
California corporation with offices at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000,
WITNESSETH:
WHEREAS, MEM is the owner of the trademark "ENGLISH LEATHER" and the
design frequently accompanying it for numerous products of interest to men in
International Class 3; and
WHEREAS, Filo is capable of manufacturing or causing to be manufactured
manual shaving tools and accessories for the reusable and disposable markets;
and
WHEREAS, MEM is willing to license its trademarks to Filo for use on
and in connection with the sale of shaving equipment as well as other related
items; and
WHEREAS, Filo desires to obtain the use of the "ENGLISH LEATHER"
trademark to enable it to offer products with increased potential to capture a
share of the valuable shaving equipment market;
1
2
NOW, THEREFORE, in consideration of the covenants of each of the
parties hereto to each other party the receipt and sufficiency of which are
hereby acknowledged, MEM and Filo agree as follows:
1. DEFINITIONS
(a) The term "AFFILIATED BUSINESS ORGANIZATIONS", "AFFILIATED COMPANY"
or "AFFILIATES" will mean any person, corporation, or other legal entity that
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with the company named.
(b) The terms "CLAIM" or "CLAIMS" will comprehend any means employed by
anyone, whether in or out of court, to obtain legal (e.g. monetary) or equitable
(e.g. injunctive) relief from Licensor.
(c) The term "CONTRACT QUARTER" will mean any of the successive three
(3) month periods next following and including the first Contract Quarter which
will begin on January 1, 1996 and end on March 31, 1996.
(d) The term "CONTRACT YEAR" will mean each successive yearlong period
this agreement is in force with the exception of the 1st contract year, which
begins on the Effective Date and ends on December 31, 1996 (e.g. the fourth
Contract Year would be the period January 1, 1999 - December 31, 1999).
(e) The term "CONTROL" (including the terms "CONTROLLING", "CONTROLLED
BY" and "UNDER COMMON CONTROL WITH"), as used herein will mean possessing,
directly or indirectly, the
2
3
power to direct or cause the direction of the management and policies of any
person, firm or corporation, whether through ownership of voting securities, by
contract or otherwise.
(f) The term "COSTS" will mean any money expended by Licensor on
account of a Claim, whether for damages, reasonable legal fees, litigation
expenses or otherwise.
(g) The term "DUE DATE" will mean the last business day of the month
next following any Calendar Quarter.
(h) The "EFFECTIVE DATE" is the date the last party executes this
agreement.
(i) The term "LICENSE" will mean the exclusive and non-transferable
license to use the Trademarks to manufacture, advertise, promote, sell and
distribute the Products within the Territory.
(j) The term "NET SALES" will mean the amount of money charged and
billed by Licensee to Unrelated Customers purchasing the Products ("STANDARD
CHARGES") after deducting (i) actual trade discounts (unless deducted before
calculating Standard Charges), (ii) returns, (iii) taxes (shown on Licensee's
invoices and payable by purchasers), and (iv) transportation and postage charges
(to the extent prepaid by the Licensee and billed on its invoices as a separate
item). It is understood, however, that the following items may not be deducted
from Standard Charges in calculating Net Sales: (aa) cash discounts, (bb)
advertising allowances, or (cc) promotional allowances.
(k) The term "PRODUCTS" will mean the Products on Schedule A annexed
hereto and made a part hereof.
3
4
(l) The term "TERRITORY" will mean the United States of America, and
the countries specified on Schedule B. Upon written notice, incorporating a lead
time for actual deliveries of not less than 60 days, and absent MEM's written
objection within 10 business days of its receipt of such notice, Filo may add
countries to Schedule B.
(m) The terms "TRADEMARK" or "TRADEMARKS" will mean the registered
trademark "ENGLISH LEATHER", and the registered design frequently accompanying
its trademark in the countries in the Territory as more fully set forth on
Schedule C, annexed hereto and made a part hereof.
(n) The term "UNRELATED CUSTOMERS" means all customers purchasing the
Products which are not Affiliated Business Organizations.
2. REPRESENTATION BY LICENSEE
(a) Filo represents to the Licensor that its present financial
structure and present facilities are such that they are now, and, absent some
unforeseeable circumstance, will be throughout the term of this agreement, in a
favorable position to manufacture, distribute, advertise and sell the Products
within the Territory under the license hereinafter granted with respect to the
Trademarks.
(b) Filo represents to Licensor that no Affiliated Business
Organization of it is a competitor of Licensor.
(c) Filo represents that it will not sell or sponsor the sale of a line
of toiletries and cosmetics in the Territory which is competitive with any line
of MEM's.
4
5
3. GRANT OF LICENSE TO USE OF THE TRADEMARK
(a) Licensor hereby grants to Licensee during the term of this
agreement, and subject to its terms and conditions as hereinafter set forth, the
License.
(b) Licensee's policy (in using the Trademarks) of sale, distribution
and use will not reflect adversely upon Licensor's Trademarks. For example,
Licensee will only sell to organizations having established outlets so as to
exclude sales to flea markets and sidewalk vendors. Licensee will provide, on an
annual basis, to Licensor, a customer list of those organizations purchasing or
otherwise receiving Products from Licensee with the net volume shown for each
customer. This customer list will be held by Licensor under the same terms and
conditions of confidentiality as set forth in paragraph 7(b)(v) of this
agreement.
(c) If the Products are not brought to market within the Territory
within twelve months of the Effective Date, the Licensor may terminate the
License by sending written notice to the Licensee, effective upon receipt.
(d) Prior to any use by the Licensee of the Trademarks it must submit
to the Licensor for its approval, each different designs, materials, packages,
labels, promotional materials and advertising by means of which it intends to
market, sell or distribute any and all Products on which the Trademarks appear.
Upon receipt, Licensor will review same. If Licensor makes no written comments
containing reasonable objections within 10 business days of such receipt, then
Licensee may deem all such submitted material approved. Licensee will amend to
the satisfaction of Licensor or discard any such materials which are not
approved by Licensor.
5
6
(e) In conjunction with each and every use of the Trademarks, Licensee
will cause to appear adjacent to it, appropriate statutory notice of
registration or application for registration ((R) or TM as the case may be).
Licensee will also cause to appear on or within all advertising, promotional
display, or other printed material bearing the Trademarks, the following or a
notice to the same effect: "ENGLISH LEATHER" is a registered trademark of MEM
Company, Inc., Northvale, New Jersey, and is being used under a license from MEM
Company, Inc.
(f) Licensee will indemnify and hold Licensor harmless from any Costs
and will defend Licensor against any Claims in accordance with the provisions of
Section 11 of this agreement.
4. INITIAL OBLIGATIONS OF LICENSEE
(a) Licensee is an independent contractor and will, at its own expense,
adapt such of its facilities, purchase such raw materials, hire such personnel,
arrange for such transportation and delivery, as are necessary to commence the
manufacture and sale of the Products. Licensee will at its sole expense, comply
with all Federal, State and local laws and regulations relating to the
manufacture and sale of the Products, including, but not limited to, all
labeling requirements.
(b) Licensee will maintain, at its sole expense, products liability
insurance covering both Licensor, Licensee, and its agent, Fashion Licensing of
America, Inc., for bodily injury and property damage liability in at least the
Combined Single Limit of U.S. $1,000,000.00. Such insurance will cover the
Products throughout the Territory during the period of the License. Licensee
will deliver to Licensor, promptly after execution of this agreement, a
certificate issued by a nationally reputable insurance company evidencing such
coverage and providing that such insurance may not be canceled,
6
7
except on thirty (30) days written notice to Licensor and Licensee. If Licensee
fails to maintain such insurance, Licensor may obtain it and charge the cost
thereof to Licensee or may treat such failure as a breach of a material
provision of this agreement.
5. INSPECTION
(a) Licensee will permit Licensor, by representatives designated by
Licensor, to inspect the design and manufacture of the Products manufactured by
Licensee for sale by it under the Trademarks. All such inspections will be
during normal business hours and upon reasonable notice. At all times, Licensee
will comply with the reasonable quality control procedures furnished or
approved, from time to time, in writing by Licensor.
(b) Licensee will submit to Licensor three (3) specimens of each of the
Products prior to its first being offered for sale. In order not to
unnecessarily protract the time between manufacture and delivery, it is
understood that such specimens may be submitted by Filo to MEM at an early stage
in the operation of this agreement. By sending such specimens, Filo warrants
that each manufacturing run of Products will substantially conform to these
specimens. As proof thereof, Filo will send specimens of each new manufacturing
batch to MEM as the Products are being shipped. Should MEM object to the quality
of any such specimen, Filo will correct the error as follows: (i) prior to
manufacture if MEM objects to the initial specimens, or (ii) in the next
succeeding manufacturing batch, if MEM objects to later submitted specimens. In
its review, Licensor will indicate its approval or disapproval of each item with
comments. If the Licensor fails to comment within 10 business days
7
8
of receipt of a specimen, the Product represented by the specimen will be deemed
to have been approved. In addition, the Licensor may, from time to time, request
samples of the Products.
6. TITLE TO THE TRADEMARKS
(a) Licensee recognizes Licensor's title to the Trademarks and the good
will associated with them and their importance to Licensor, and will not at any
time do or suffer to be done any act or thing which will in any way impair the
rights of Licensor in and to the Trademarks. It is understood that Licensee will
not acquire nor will it claim title to the Trademarks by virtue of the license
granted to Licensee herein, or Licensee's use of the Trademarks.
(b) In the event any infringement of the rights of Licensor to any of
the Trademarks in the Territory comes to the notice of Licensee during the term
of this agreement, Licensee will promptly notify Licensor, in writing, and will
join with Licensor, upon Licensor's written request and at Licensor's expense in
taking such steps, if any, as Licensor deems advisable to protect its rights.
Licensee will take no action independent of Licensor without the express written
consent of Licensor.
(c) During the term of this agreement, the Licensor will maintain the
registration of the existing Trademarks in the Territory, in full force and
effect, free and clear of any and all cancellation petitions, interferences or
objections. It is understood that MEM may have to extend the reach of the
Trademarks to one or more international classes in some or all of the countries
in the Territory. To the extent required, MEM will move expeditiously to file
the applications necessary to effect these changes and will prosecute them
diligently until they are accepted or rejected for
8
9
registration in each country. In the unlikely event of any such rejection, MEM
and Filo will decide together whether to continue to ship to the country
rejecting MEM's application. MEM's obligation to obtain new registrations is
limited to the word xxxx "ENGLISH LEATHER" and does not extend to any design not
already incorporated into an existing registration in any country in the
Territory.
7. ROYALTIES
(a) Payment.
(i) Licensee will pay to Licensor a royalty of four (4%) percent for
the first $3,000,000 of Net Sales and a royalty of five (5%) percent of all Net
Sales in excess of this sum in any Contract Year.
(ii) Irrespective of sales, Filo will pay MEM minimum guaranteed
royalties each year (the "MGR") in accordance with the following schedule:
1st Contract Year $ 20,000
2nd Contract Year 40,000
3rd Contract Year 80,000
4th Contract Year 120,000
5th Contract Year 200,000
6th Contract Year 240,000
Each Succeeding Contract Year 270,000
It is understood that the MGR for the 1st Contract Year will be paid $10,000
upon the execution of this agreement and $2,500 on the first business day of
each of the next successive four Contract Quarters.
9
10
(iii) Products will be deemed to have been sold on the earliest of the
following dates: (A) when invoiced, (B) when delivered, shipped or mailed or (C)
when payment has been received.
(b) Accounting.
(i) Licensee will maintain itemized, complete and accurate books of
account with respect to all Products sold under this agreement.
(ii) Licensee will render to Licensor an accounting, certified by a
financial officer of Licensee, specifying exactly how royalties were computed
including how Net Sales were calculated (i.e. by enumerating all deductions
used). This accounting must be rendered on or before each Due Date.
(iii) On or before each Due Date, Licensee will pay Licensor all
royalties owed from sales during the previous Contract Quarter.
(iv) In the event Licensee fails to make any payment due on a Due Date,
Licensor will give Licensee written notice. Upon receipt of such notice,
Licensee will have five (5) business days to pay. Thereafter, Licensor may
charge Licensee interest on the unpaid amount at the annual rate of two (2%)
percent above the prime rate reported by the Wall Street Journal on that Due
Date.
(v) Licensor may review or may designate, at its expense, a certified
public accountant to review the accounts of Licensee, for a period of not more
than four (4) Contract Quarters immediately preceding the date of review to
determine whether proper accounting and
10
11
payments have been made. Any such review will take place upon reasonable notice
to Licensee and within regular business hours. Acceptance or receipt of payment
by Licensor will not preclude it from questioning the correctness of any
statement or royalty payment. Any review of Licensee's accounts will be made
under the strictest confidentiality. No material obtained by Licensor or its
designated auditor may be used or disclosed for purposes other than enforcing
compliance with the terms of this agreement without the prior written consent of
Licensee, unless ordered to do so by a court or other tribunal having
jurisdiction over Licensor, in which case Licensor will give reasonable notice
to Licensee. If the audit reveals an underpayment, Licensee will immediately
remit payment to Licensor.
8. Promotional Activities
Licensee will use its best efforts to fully promote the sale of the
Products in the Territory, and maintain the high standards of Licensor as to
advertising and all other promotional material. No advertising or promotional
material may be used by Licensee until it has been submitted to and approved by
Licensor, in writing, in advance, except cooperative advertisements. All
advertising and promotional costs are to be borne by Licensee. Licensor's
approval will not be unreasonably withheld and, if no objection is raised by
Licensor within ten (10) business days of receipt of the material, Licensor will
be deemed to have approved them. In addition, Licensee will expend at least two
(2%) percent of Net Sales each Contract Year for general advertising and
promotion of the Products including cooperative advertisements.
11
12
9. TERM
Unless sooner terminated as hereinafter provided, this agreement will
commence as of the Effective Date and run for successive two-year periods
thereafter, unless sooner terminated at the end of one of these terms in
accordance with Section 10 hereof. The first such term will expire on December
31, 1997.
10. TERMINATION
(a) Either Licensor or Licensee may terminate this agreement, if it
gives written notice to the other party to the effect that that party has
committed a breach of a material provision of this agreement and the party
receiving said notice fails to cure that breach within thirty (30) days of such
receipt.
(b) Either Licensor or Licensee may terminate this agreement without
cause if it gives the other party written notice at least sixty (60) days prior
to the expiration of any successive two-year term.
(c) Licensor may terminate this agreement by giving written notice to
Licensee effective on receipt, for damage to the commercial impression of the
Trademarks, if Licensee (i) becomes insolvent, (ii) files a petition in
bankruptcy or insolvency, (iii) files any petition or answer seeking
reorganization of Licensee's business under any law relating to insolvency or
bankruptcy, (iv) makes an assignment for the benefit of creditors, or (v) fails
within thirty (30) days to secure the dismissal of any receiver, trustee or
liquidator appointed for any of its property.
12
13
(d) Licensor may terminate this agreement by giving written notice to
Licensee effective on receipt (i) if Licensee fails, within 30 days of its
accrual, to pay any monies owed to Licensor pursuant to this agreement, (ii) if
any competitor of Licensor becomes an Affiliate of Licensee, or (iii) if
Licensee fails to bring the Products to market as required by Subparagraph 3(c).
(e) If Licensee becomes Controlled by any persons or other legal
entities other than those controlling them or either of them as of the Effective
Date (individually or collectively the "New Owner"), the entity experiencing the
change will notify MEM within ten (10) business days, identifying the new
Controlling person or persons and providing verifiable information as to the New
Owner's financial standing. If within a similar period, MEM does not approve of
the New Owner, which approval will not be unreasonably withheld, this agreement
will terminate automatically at the end of such period.
(f) Upon termination of this agreement, Licensee will immediately and
completely discontinue use of the Trademarks, provided, however, that Licensee
may sell existing stock if it complies with subparagraph (g) of this paragraph.
(g) For a period not to exceed 180 days immediately following
termination of this agreement, Licensee may sell any completed Products it had
in stock on the date of termination. It is understood that Licensee will pay
Licensor all royalties due from such sales within thirty (30) days of receipt of
notice from Filo that it has made its last shipment of Products. Within 10
business days after the end of this 180-day period, an officer of the Licensee
will deliver to the Licensor a certification that
13
14
all Products in the possession or under the control of the Licensee have been
destroyed or given to charity.
(h) Termination for any reason will not prejudice the rights of either
party to collect monies owed it by the other party hereunder or to prosecute
claims for damages against the other party.
11. Indemnification
(a) Licensee will indemnify Licensor and hold it harmless from any
Costs and will defend Licensor against any Claims arising out of or in
connection with Licensee's performance under the License, including but not
limited to the manufacture, use, marketing, sale and distribution of the
Products attributable to alleged defects in the Products, and for copyright
infringement, patent infringement or unfair competition caused by or arising out
of the manufacture or sale of the Products.
(h) In the same manner and to the same extent, Licensor will defend and
indemnify Licensee for Costs and against Claims arising out of or in connection
with allegations of trademark infringement.
12. Exoneration from Responsibility for Manufacturing Errors
Neither Licensor nor its employees will have any responsibility for the
operation of the manufacturing facilities of Licensee contemplated under this
agreement, whether upon the recommendation of Licensor or otherwise.
14
15
13. Arbitration
Any controversy or dispute arising out of or in connection with the
Agreement, whether relating to its interpretation, performance, or termination
may be submitted to arbitration by any party and if so submitted, will be
finally settled by arbitration conducted in accordance with the rules of the
American Arbitration Association then in effect. Any such arbitration will take
place in New Jersey. The decision of a single arbitrator will be binding and
conclusive upon the parties, their successors and assignees, and the parties
will comply with such decision in good faith. Judgment upon the decision of the
arbitrator may be entered in any court having jurisdiction over the party to be
charged. The parties may each seek and the arbitrator may grant in additional to
legal remedies equitable remedies (including, without limitation, temporary
restraining orders, injunctions, preliminary or permanent and attachments) and
each hereby consents to jurisdiction over its legal person in the State and
Federal Courts of New Jersey for the purpose of enforcing such orders.
14. Construction
This agreement will be construed in accordance with the internal laws
of the State of New Jersey.
15. Independent Contractors
Nothing contained in this agreement will constitute Licensee the agents
or legal representatives of Licensor for any purpose whatsoever. Licensee is an
independent contractor with the rights granted hereunder and no others.
15
16
16. Assignment
This agreement may not be assigned in whole or in part by Licensee
without Licensor's prior written consent and any such purported assignment will
be void. Except as expressly provided herein, this agreement will be binding
upon and inure to the benefit of the parties hereto, their successors and
assigns.
17. Notices
All notices, requests, demands and other communications which are
required or may be given under this agreement will be in writing and will be
deemed to have been given if delivered personally, or sent by facsimile, by
certified mail, return receipt requested, postage prepaid and addressed:
If to Licensor to:
Mr. Gay X. Xxxxx
MEM Company, Inc.
X.X. Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel. 000-000-0000
Fax. 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxx, Woodbridge & Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Tel. 000-000-0000
Fax. 000-000-0000
16
17
If to Licensee:
Xx. Xxxx Xxxxxxxx
Filo America
00000 Xxxxxxxx Xxxxxxxxx-Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel. 000-000-0000
Fax. 000-000-0000
with copies to:
Xxxxxxxx Xxxxxx, Esq.
Xxxxxxx & Xxxxx
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. 000-000-0000
Fax. 000-000-0000
and
Xx. Xxxxx X. Xxxxxxx
Fashion Licensing of America
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Tel. 000-000-0000
Fax. 000-000-0000
or to such other addresses as may be furnished, from time to time, in writing,
by the pates hereto.
18. Miscellaneous
(a) This agreement contains all of the understandings of the parties
hereto and no provision of this agreement may be modified except in writing
signed by the parties hereto.
(b) The failure of any party to enforce any right hereunder will not be
deemed a waiver of any other right, whether of a similar nature or otherwise.
17
18
(c) If any provision of this agreement is declared void by any
arbitrator, court or administrative body of competent jurisdiction, the validity
of all other provisions which may nonetheless by given effect will not be
affected thereby.
(d) The headings used in this agreement are for the convenience of the
parties and have no legal significance.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.
ATTEST: MEM COMPANY, INC.
Xxxxxxxx X. Xxxxxx By: /s/ Gay X. Xxxxx
------------------------ -----------------------------
Gay X. Xxxxx
Secretary President
[SEAL)
ATTEST: FILO AMERICA, INC.
/s/ [illegible] By: /s/ Xxxx Xxxxxxxx
--------------------- --------------------------
Secretary Xxxx Xxxxxxxx
[SEAL]
18
19
SCHEDULE A
1. A cartridge loading razor sold with 3 extra cartridges and marketed as
the "English Leather(R) Shaving System"(TM)
2. A 4-pack of cartridges to fit the razor used in the English Leather(R)
Shaving System"(TM) and marketed as "English Leather(R) Cartridges"(TM)
3 A shaving brush, stand or holder, and razor handle marketed as the
"English Leather(R) Gift Pack"(TM)
4 A 10-pack of disposable razors with twin-bladed heads marketed as the
"English Leather(R) Disposable 10-Pack"(TM)
5. A 5-pack of disposable razors with twin-bladed heads marketed as the
"English Leather(R) Disposable 5-Pack"(TM)
19
20
SCHEDULE B
Panama
Honduras
Mexico
Nicaragua
Canada
20
21
SCHEDULE C
Country Registration No. Class Expiration Date
------- ---------------- ----- ---------------
U.S. 848,350 3 4/30/2008
Panama 12,125 3 6/24/2000
Honduras (under
license from Cussons)
Mexico 117,654 3 2/12/2004
Nicaragua 21,602 C.C. 3 6/17/2002
Canada 125465 3 2/16/2007
21