EXHIBIT 10.13
Confidential treatment has been requested for portions of this Exhibit.
The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as (******). A complete
version of this Exhibit has been filed separately with the Securities and
Exchange Commission.
LICENSE AGREEMENT
WRANGLER APPAREL CORP.
LICENSOR
AND
▇▇▇▇▇▇▇▇ BELT COMPANY
LICENSEE
Distribution and Sale in: Canada and The United States of America, its
territories and possessions, including Puerto Rico
Manufacture in: China, Mexico and The United States of America, its territories
and possessions, including Puerto Rico
WRANGLER HERO(R) TIMBER
CREEK BY WRANGLER(R)
TABLE OF CONTENTS
ARTICLE 1. - Definitions
ARTICLE 2 - Trademark License Grant
ARTICLE 3 - Trademark Ownership and License Recordation
ARTICLE 4 - Infringement
ARTICLE 5 - Percentage Royalty, Minimum Royalty, Minimum Net Sales, and
Advertising Expenditures
ARTICLE 6 - Accounting and Reporting
ARTICLE 7 - Quality Control and Third Party Manufacturers
ARTICLE 8 - Code of Business Conduct and Contractor Terms of Engagement
ARTICLE 9 - Product Approvals and Related Issues
ARTICLE 10 - Aid and Assistance; Noncompetition by Licensor
ARTICLE 11 - Termination
ARTICLE 12 - Products on Hand at Termination, Cancellation or Expiration;
Payments
ARTICLE 13 - Records after Termination, Cancellation or Expiration
ARTICLE 14 - Relinquishment of Licensed Matter
ARTICLE 15 - Fair Practices
ARTICLE 16 - No Joint Venture; Indemnification; Maintenance of Insurance
ARTICLE 17 - Binding Nature; Assignment
ARTICLE 18 - Notices
ARTICLE 19 - Compliance With and Operation of Law
ARTICLE 20 - Consent to Jurisdiction; Waiver of Jury Trial
ARTICLE 21 - Arbitration
ARTICLE 22 - Licensor's Representative
ARTICLE 23 - Entire Agreement
ARTICLE 24 - Term
ARTICLE 25 - Governing Law
ARTICLE 26 - Confidentiality
ARTICLE 27 - Equitable Relief
ARTICLE 28 - Counterparts
Schedule 1.12 - Description of Licensed Products Schedule Schedule 1.28 -
Trademarks
Schedule 5.7 - Advertising Expenditures Report Schedule 6.3 - Quarterly Sales
Report
Schedule 6.5 - Monthly Sales Reports
Schedule 7.1.a - List of Manufacturers
Schedule 7.1 .b - Letter to Third Party Manufacturer
Exhibit A to Schedule 7.1.b - Products to be Manufactured
Exhibit B-1 to Schedule 7.1.b - Terms of Engagement
Exhibit B-2 to Schedule 7.1.b - Global Compliance Principles
Exhibit B-3 to Schedule 7.1 .b - Code of Business Conduct
Schedule 7.2 - Quality Standards
Schedule 7.4 - Approved Distribution
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("AGREEMENT") is effective as of the 1st day of
January, 2004 and made in the State of Delaware by and between:
WRANGLER APPAREL CORP., a corporation organized under the laws of the
State of .Delaware, United States of America, with principal offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as
"LICENSOR");
and
▇▇▇▇▇▇▇▇ BELT COMPANY, a corporation organized under the laws of the State
of Arizona, with principal offices at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (hereinafter referred to as "LICENSEE") (Licensor and Licensee being
hereinafter collectively referred to as the "PARTIES," and each individually
sometimes referred to as a "PARTY").
WITNESSETH:
WHEREAS, Licensor, through one or more related companies and through
licensees, is engaged in the business of making, selling and distributing
jeanswear, casual apparel, and accessories and in connection therewith uses or
licenses for use in commerce the Trademarks, as hereinafter defined, in the sale
of such jeanswear, casual apparel, and accessories in the United States of
America and throughout the world; and
WHEREAS, Licensee is engaged in the business of making, having made,
selling and distributing belts in the Licensed Territory, as hereinafter
defined; and
WHEREAS, Licensor and Licensee entered into a license agreement pursuant
to which Licensor granted a license to Licensee to use the Licensed Trademarks,
as hereinafter defined, in the Licensed Territory through December 31, 2003.
WHEREAS, Licensee desires to acquire from Licensor, and Licensor is
willing to grant to Licensee, a license to use the Licensed Trademarks in the
Licensed Territory in the
manufacture, distribution, sale and promotion of belts, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual terms, agreements and
conditions herein contained, and for other good and valuable consideration, the
Parties agree as follows:
ARTICLE 1 - DEFINITIONS
In this Agreement, the terms defined in the Recitals shall have the
meanings set forth therein. The following terms are defined as:
1.1 "AAA" shall have the meaning ascribed to that term in Article 21 hereof,
1.2 "ADVERTISING": any and all brochures, catalogs, point-of-sale materials,
consumer and trade media, sales promotion and support materials, and marketing
support funds.
1.3 "ADVERTISING EXPENDITURES" shall have the meaning ascribed to that term in
Section 5.7 hereof.
1.4 "ADVERTISING EXPENDITURES REPORTS" shall have the meaning ascribed to that
team in Section 5.7 hereof.
1.5 "AFFILIATE": any person or entity directly or indirectly controlling,
controlled by or under common control with another person or entity.
1.6 "AGREEMENT" shall have the meaning ascribed to that term in the recitals
hereof.
1.7 "APPROVED RETAILERS" shall have the meaning ascribed to that term in Section
7.4 hereof
1.8 "APPROVED WHOLESALERS" shall have the meaning ascribed to that term in
Section 7.4 hereof.
1.9 "CLOSEOUTS": manufacturers' "SECONDS" and "IRREGULARS" and product overruns
bearing one or more of the Licensed Trademarks.
1.10 "CONTRACT YEAR" shall have the meaning ascribed to that term in Section 5.1
hereof.
1.11 "DISTRIBUTION AND SALES LICENSED TERRITORY": for the purpose of
distribution and sale, the territory consisting of and limited to Canada and The
United States of America, its territories and possessions, including Puerto
Rico.
1.12 "LICENSED PRODUCTS": the products described on Schedule 1.12 hereto bearing
one or more of the Licensed Trademarks, as amended in writing by the Parties
from time to time during the term of this Agreement. The Licensed Products shall
be expressly designed for or selected by Licensee and approved in writing by
Licensor for manufacture by Licensee under this Agreement, such approval to have
been received by Licensee before commencement of such manufacture pursuant to
the provisions of Article 9 hereof.
1.13 "LICENSED TERRITORY" shall mean, collectively, the Manufacturing Licensed
Territory and the Distribution and Sales Licensed Territory.
1.14 "LICENSED TRADEMARKS": The Trademark and all derivatives based thereon that
are created by Licensee.
1.15 "LICENSEE'S QUALITY STANDARDS" shall have the meaning ascribed to that term
in Section 7.2 hereof.
1.16 "LICENSOR'S REPRESENTATIVE": Licensor's Affiliate, VF Jeanswear Limited
Partnership.
1.17 "MANUFACTURE," "MANUFACTURING," and "MANUFACTURED," as used in this
Agreement, are explained in Section 7.1 hereof.
1.18 "MANUFACTURING LICENSED TERRITORY": for the purpose of manufacture, the
territory consisting of and limited to China, Mexico and The United States of
America, its territories and possessions, including Puerto Rico. Licensee may
expand the territory solely for the purpose of manufacturing Licensed Products
only upon Licensor's prior written consent, which shall not be unreasonably
withheld or delayed.
1.19 "MINIMUM NET SALES" shall have the meaning ascribed to that term in Section
5.3 hereof. 1.20 "MINIMUM ROYALTY" shall have the meaning ascribed to that term
in Section 5.2 hereof.
1.21 "MONTHLY SALES REPORT" shall have the meaning ascribed to that term in
Section 6.5 hereof.
1.22 "NET SALES" shall have the meaning ascribed to that term in Section 5.1
hereof.
1.23 "QUALITY STANDARDS" shall have the meaning ascribed to that term in Section
7.2 hereof:
1.24 "QUARTERLY SALES REPORT" shall have the meaning ascribed to that term in
Section 6.2 hereof.
1.25 "TERMS OF ENGAGEMENT" shall have the meaning ascribed to that term in
Section 8.1 hereof.
1.26 "THIRD PARTY MANUFACTURERS" shall have the meaning ascribed to that term in
Section 7.1 hereof.
1.27 "TRADEMARK": Licensor's trademark enumerated on Schedule 1.27 attached
hereto.
ARTICLE 2 - TRADEMARK LICENSE GRANT
2.1 Licensor is the owner of the Trademark. Licensor hereby grants to
Licensee, subject to the terms and conditions herein contained, for the
purpose of distribution and sale, the
exclusive and nonassignable right and license to use the Licensed
Trademarks within the Distribution and Sales Licensed Territory, upon
Licensed Products distributed, advertised, and sold by Licensee in
accordance with this Agreement. Licensor hereby grants to Licensee,
subject to the terms and conditions herein contained, for the purpose of
manufacture, the nonexclusive and nonassignable right and license to use
the Licensed Trademarks within the Manufacturing Licensed Territory upon
Licensed Products manufactured by Licensee in accordance with this
Agreement.
2.2 Licensee shall not sublicense the rights herein granted and shall not,
without the prior written consent of Licensor, authorize any other person,
firm, corporation or other entity to use any of the Licensed Trademarks
(except as provided herein), or any trademarks, trade names, or trade
dress confusingly similar thereto.
2.3 All Licensed Products manufactured, distributed, advertised, or sold by
Licensee shall bear the Licensed Trademarks in prominence as prescribed by
Licensor. None of the licensed Trademarks shall be used by Licensee or its
manufacturers except on and in connection with the Licensed Products.
Licensee shall use the Licensed Trademarks solely in the manner prescribed
in Schedule 1.27 or as otherwise approved in writing by Licensor. No
product bearing any of the Licensed Trademarks shall bear any trademarks
or trade names other than the Licensed Trademarks except with the express
prior written authorization of Licensor. Licensee covenants on behalf of
itself, its Affiliates and related parties, and such third party
manufacturers with which it may contract, that during the term of this
Agreement and thereafter it will refrain from using any trademark or trade
name confusingly or deceptively similar to any of the Licensed Trademarks
or confusingly similar to any other trademarks or trade names of Licensor,
except upon such terms and conditions as may be approved in advance, in
writing, by Licensor. Licensee shall promptly terminate its manufacturing
relationship with any manufacturer that uses any trademark or trade name
confusingly similar to any of the Licensed Trademarks or confusingly
similar to any other trademarks or trade names of Licensor. This provision
shall survive termination, cancellation or expiration of this Agreement.
2.4 Licensee shall submit, for prior written approval by Licensor, specimens
of all labels,
packaging, and Advertising copy that Licensee intends to use in
identifying, selling, advertising, or promoting Licensed Products.
Licensor shall provide Licensee with written notice of approval or
disapproval within ten (10) business days from the date that Licensor
receives such a request for approval; if no notice of approval or
disapproval is provided by Licensor to Licensee, then the request will be
deemed to have been disapproved.
2.5 Nothing herein shall entitle Licensee to use any of the Licensed
Trademarks in combination with other marks not owned by Licensor, which
Licensee expressly agrees not to do, nor to include any of the Licensed
Trademarks in its corporate or trading name irrespective of whether
registered or not. During the term of this Agreement, Licensee must
include on its stationery, business cards, invoices and packing slips the
phrase "Authorized Licensee of Wrangler Apparel Corp." or such other words
to that effect as have been previously approved, in writing, by Licensor.
ARTICLE 3 - TRADEMARK OWNERSHIP AND LICENSE RECORDATION
3.1 Licensor at its own cost will., insofar as possible and as reasonably
requested by Licensee, register and/or renew relevant trademarks in the
Licensed Territory and will cooperate in registering or recording Licensee
as a registered user or recorded Licensee of the Licensed Trademarks in
the Licensed Territory if appropriate and necessary in Licensors sole
judgment. Licensee agrees to execute and deliver to Licensor such lawful
documents as Licensor may request for this purpose. Licensee shall not
register or attempt to register any of the Licensed Trademarks or any
marks similar thereto in its own name or in any other name either in the
Licensed Territory or outside thereof unless so authorized by Licensor in
writing,
3.2 Licensee acknowledges that Licensor is the owner of all of the Licensed
Trademarks, whether registered or unregistered. All trademarks
subsequently adopted and used by Licensee under the provisions of this
Agreement shall be deemed to be Licensed Trademarks and owned by Licensor
(except as otherwise expressly provided in writing by Licensor). Licensee
acknowledges that Licensor is entitled to all of the rights in and to the
Licensed Trademarks, including the sole and exclusive right to register
the Licensed Trademarks in the Licensed Territory and elsewhere throughout
the world, and Licensee shall assist Licensor in so doing at Licensor's
expense.
3.3 Licensee further agrees never to contest, deny or dispute the validity of
any of the Licensed Trademarks or Licenser's title therein; agrees never,
either directly or indirectly, or in any other way, to encourage or assist
others in doing so; and agrees never to take any action of any kind
inconsistent with Licensor's holding of all such trademark rights. Nothing
in this Agreement shall confer upon Licensee a proprietary interest of any
kind in and to any of the Licensed Trademarks or any trademarks or trade
names confusingly similar thereto. Any and all use of any of the Licensed
Trademarks by Licensee shall inure to the benefit of Licensor.
ARTICLE 4 - INFRINGEMENT
4.1 Licensee shall, insofar as possible, report immediately in writing to
Licensor any and all infringements of any of the Licensed Trademarks, or
of Licensor's trade names and/or trade dress and any and all attempts by
any third party to use, copy, register, infringe upon or otherwise imitate
any of the Licensed Trademarks or Licensor's trade names or trade dress,
or any design features of the Licensed Products.
4.2 Except upon the written request and authorization of Licensor, Licensee
shall not take any action to prevent infringements, imitation or illegal
use of the Licensed Trademarks, trade dress associated with the Licensed
Products or trade name of Licensor. However, Licensee shall render to
Licensor all assistance reasonably requested fully and without
reservation, in connection with any matter pertaining to protection or
enforcement of any of the Licensed Trademarks before administrative and
quasi-judicial agencies and the courts, and shall make available to
Licensor, its representatives, agents and attorneys, all of Licensee's
records, files and other information pertaining to the Licensed
Trademarks, including the purchase, manufacture, sale, distribution and
advertising of the Licensed Products.
4.3 Licensor, at its cost, shall take such steps and institute such legal
proceedings as shall be reasonably necessary to protect the Licensed
Trademarks and Licensee's license therein as set forth in this Agreement,
4.4 Licensor shall indemnify and defend Licensee and hold it harmless from and
against any claims, suits and expenses (including reasonable attorney's
fees) arising solely from Licensee's use of any of the Licensed Trademarks
in accordance with the terms of this Agreement on or in connection with
Licensed Products manufactured in the Manufacturing Licensed Territory and
said in the Distribution and Sales Licensed Territory. Licensor's
indemnification and defense obligations are expressly conditioned upon (a)
Licensee's giving Licensor prompt written notice of such claim or suit
against Licensee after assertion thereof and (b) Licensee's full and
prompt cooperation and assistance, to the extent reasonably requested by
Licensor, in connection with the defense of such claim or suit. Licensor
shall have the right, at its own expense, to undertake and conduct the
defense and/or negotiation of any settlement of any such suit or claim.
ARTICLE 5 - PERCENTAGE ROYALTY. MINIMUM ROYALTY,
MINIMUM NET SALES AND ADVERTISING EXPENDITURE
5.1 In consideration of the licenses herein granted and of the other benefits
that accrue to Licensee hereunder, Licensee agrees to use its best efforts
to promote the sale of the Licensed Products in the Distribution and Sales
Licensed. Territory, and Licensee further agrees to pay to Licensor, for
use of the Licensed Trademarks, a royalty (the "PERCENTAGE ROYALTY") at
the rate shown in the chart below calculated on actual Net Sales in each
time period shown in the chart below (each a "CONTRACT YEAR"):
PERCENTAGE
CONTRACT YEAR ROYALTY
------------- ----------
First: January 1, 2004 - December 31, 2004 (******)%
Second: January 1, 2005 - December 31, 2005 (******)%
Third: January 1, 2006 - December 31, 2006 (******)%
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******Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
"NET SALES" means (a) the total number of units of Licensed Products sold
or otherwise transferred by Licensee to Affiliates or non-Affiliates,
multiplied by Licensee's published unit list price (excluding
shipping/freight charges separately listed as payable by the customer)
charged by Licensee to its customers who are not its Affiliates, less (b)
Licensee's reasonable and customary trade discounts and allowances given
in an amount up to (******) percent (******%) of Licensee's published unit
list price and returns. If Licensee's actual price to its non-Affiliate
customers is higher than as calculated above, the actual price shall
replace the list price in the calculation. Net Sales shall be computed
without deducting uncollectible accounts, anticipations or financial
discounts and shall include all transactions of Licensed Products
distributed by or for Licensee.
5.2 For each Contract Year, Licensee shall pay the minimum royalty (the
"MINIMUM ROYALTY") shown for each Contract Year in the chart below. The
Minimum Royalty shall be paid as provided in Section 5.4 hereof.
CONTRACT YEAR MINIMUM ROYALTY
------------- ---------------
First: January 1, 2004 -- December 31, 2004 ($******)
Second: January 1, 2005 - December 31 2005 ($******)
Third: January 1, 2006 - December 31, 2006 ($******)
5.3 Licensee and Licensor have established the following minimum Net Sales
("MINIMUM NET SALES") for the sales of Licensed Products in the
Distribution and Sales Licensed Territory for each Contract Year:
CONTRACT YEAR MINIMUM NET SALES
------------- -----------------
First: January 1, 2004 - December 31, 2004 ($******)
Second: January 1, 2005 - December 31, 2005 ($******)
Third: January 1, 2006 - December 31, 2006 ($******)
For purposes of determining whether or not Licensee has achieved the
required level of Minimum Net Sales in any Contract Year, Licensee shall
not receive credit for, and there shall be excluded from the calculation,
sales approved by Licensor pursuant to Section 9.3(e) hereof to other than
Approved Retailers and Approved Wholesalers. Licensor may terminate this
Agreement in accordance with Section 11.16) hereof if Licensee fails to
achieve in any Contract Year the Minimum Net Sales for such Contract Year.
5.4 With respect to the business done by Licensee under this Agreement,
Licensee shall pay the Percentage Royalty to Licensor quarter-annually for
the quarters ending on the last days of March, June, September and
December of each Contract Year, payment for each quarter to be made to
Licensor within twenty-five (25) days after the end of the quarter for
which such payment is made. On the date payment is due for the last
quarter of each Contract Year, Licensee shall also pay to Licensor the
amount, if any, by which the Minimum Royalty payable during such Contract
Year exceeds the Percentage Royalty paid with respect to such Contract
Year.
5.5 Payment of the Percentage Royalty and the Minimum Royalty shall be made
either by check made payable to Wrangler Apparel Corp., mailed to the
address for Licensor set forth in Article 15 hereof, or to such other
address as Licensor may subsequently designate in writing, or by wire
transfer to Licensor in United States Dollars at the following address, or
to such other address as Licensor may subsequently designate in writing:
-----------------
******Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
PNC Bank
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇▇-▇▇▇-▇▇
Credit to: Wrangler Apparel Corp.
Account No.: ▇▇-▇▇▇▇-▇▇▇▇ for Wrangler Apparel Corp.
5.6 Time is of the essence with regard to the Percentage Royalty and the
Minimum Royalty due under this Agreement, and Licensee shall make each
payment on time. Each and every late payment shall, for each day the
payment is late, bear interest at (****** ) percent (******%) over the
▇▇▇▇▇▇ Guaranty Trust Company of New York prime rate in effect on the
twenty-sixth (26th) day following the quarter for which such payment is
due. Licensor shall have the right to terminate this Agreement upon notice
to Licensee if Licensee fails to cure a payment default within five (5)
business days after receiving written notice of such default from
Licensor.
******Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
5.7 Licensee agrees to expend each Contract Year in advertising Licensed
Products a sum not less than (******) percent (******%) of Net Sales (the
"ADVERTISING EXPENDITURES"), which sum shall be expended for Advertising
in support of the Licensed Trademarks, and Licensee's proportionate share
of expense, as agreed between Licensor's Representative and Licensee, of
trade show space (including two Magic shows per year) owned by Licensor's
Representative and utilized by Licensee with Licensor's Representative's
consent, all as approved by Licensor in accordance with Section 2.4 hereof
In trade advertising and under any marketing support fund, Licensee shall
closely follow the advertising image and copy concepts indicated by
Licensor's Representative in advertising its products for sale under the
Licensed Trademarks. Licensee shall keep a true and accurate account of
all Advertising Expenditures, and shall submit to Licensor's
Representative, quarter-annually for the quarters ending on the last days
of March, June, September and December of each year, advertising
expenditures reports in the form attached as Schedule 5.7 hereto
("ADVERTISING
EXPENDITURES REPORT"), each such Advertising Expenditures Report to be
received by Licensor within twenty-five (25) days after the end of the
quarter for which the Advertising Expenditures Report is due. Licensee
shall pay to Licensor within twenty-five (25) days after the end of each
Contract Year a sum equal to (****** ) percent (******%) of Net Sales
minus the amount of the Advertising Expenditures for which Licensor's
Representative has received evidence satisfactory to it, in its sole
discretion. Notwithstanding the foregoing, all Advertising Expenditures of
(******) Hundred Dollars ($******) or greater must be pre-approved in
writing by Licensor's Representative. Licensor shall have the right to
terminate this Agreement upon written notice to Licensee if Licensee fails
to expend the full amount of Advertising Expenditures required by this
Section 5.7 or if Licensee fails to submit the Advertising Expenditures
Reports required by this Section 5.7 for two (2) or more consecutive
quarters. Licensee also agrees to pay to Licensor's Representative
Licensee's proportionate share of expense, as agreed between Licensor's
Representative and Licensee, of showroom display and trade show space
owned by Licensor's Representative and utilized by Licensee with
Licenser's Representative's consent.
5.8 Termination, cancellation or expiration of this Agreement for any reason
whatsoever shall not relieve Licensee of its accrued payment obligations
or obligations incurred by sale of Licensed Products after the effective
date of such termination, cancellation or expiration.
ARTICLE 6 - ACCOUNTING AND REPORTING
6.1 Licensee shall submit to Licensor's Representative an annual marketing
plan in the format approved by Licensor's Representative within sixty (60)
days of the execution of this Agreement and at least sixty (60) days
before the start of each Contract Year thereafter.
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******Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
******Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
6.2 Licensee shall keep a true and accurate account of all Licensed Products
manufactured, ordered, received, sold and distributed under this
Agreement, and render to Licensor a just and true account in writing,
sworn to and verified by art officer of Licensee, specifying: (a) the
number of Licensed Products manufactured by or for Licensee in the
preceding three (3) month period, (b) the number of such Licensed Products
distributed or sold in said three (3) month period and (c) Licensee's
published unit list prices and sales prices of all such Licensed Products,
within twenty-five (25) days of the last day of March, June, September and
December (the "QUARTERLY SALES REPORT"). Licensee shall include with the
Quarterly Sales Report that it submits for the last quarter of each
Contract Year two (2) invoices or bills of lading for each of the Licensed
Trademarks, demonstrating current use thereof, along with five (5)
hangtags or labels showing such use.
6.3 The Quarterly Sales Report shall be submitted by Licensee to Licensor in
the format prescribed by Schedule 6.3. The Quarterly Sales Report and the
invoices or bills of lading and hangtags or labels required by Section 6.2
hereof shall be sent to:
Controller
Wrangler Apparel Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A copy of the Quarterly Performance Report, without invoices, bills of lading,
hangtags or labels, shall be submitted by Licensee to:
Licensing Director
VF Jeanswear Limited Partnership ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President, Finance
VF Jeanswear Limited Partnership ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Licensor, its agents, attorneys and accountants shall have the right to
audit and investigate once each Contract Year during normal business
hours, at Licensor's expense, the books, accounts, audits, and other
things and matters showing or reflecting all
business conducted by Licensee pertaining to the manufacture, sale,
Advertising, or distribution of the Licensed Products under this
Agreement. In the event that an audit of Licensee's books and records
reveals that the Licensee has underpaid Percentage Royalty by an amount
equal to or greater than (****** ) percent (******%) in any Contract Year,
Licensee shall bear Licensor's reasonable direct costs of said audit.
Licensee shall provide Licensor annually with audited financial statements
of Licensee as soon as possible, and in any event within ninety (90) days
after the close of Licensee's fiscal year.
6.5 Licensee shall submit to Licensor monthly sales reports in the format
prescribed in Schedule 63 hereof within fifteen (15) days after the first
(1st) day of each month of each Contract Year (the "MONTHLY SALES
REPORT"). Licensee shall also submit such other reports, as and when
specified by Licensor, as will enable Licensor to evaluate the success of
Licensee's marketing, sales and activities relating to this Agreement. The
Monthly Sales Reports shall be sent to the addresses set forth in Section
6.3 hereof
ARTICLE 7 - QUALITY CONTROL AND THIRD PARTY MANUFACTURERS
Licensee further covenants and agrees as follows:
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******Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
7.1 Licensee may have Licensed Products manufactured within the Manufacturing
Licensed Territory for it by Third Party Manufacturers for sale only
within the Distribution and Sales Licensed Territory. For purposes of this
Agreement, "THIRD PARTY MANUFACTURERS" shall mean such manufacturers as
are listed on Schedule 7.1.a hereof. No changes may be made to Schedule
7.1.a without the prior written approval of Licensor. Third Party
Manufacturers shall be subject to the quality control requirements
stipulated in this Article 7. For purposes only of understanding reference
to "manufacture," "manufacturing" and "manufactured" as these words may be
used in this Agreement, Licensed Products made for Licensee by Third Party
Manufacturers in accordance herewith shall be deemed manufactured by
Licensee. Not less than ten (10) days prior to engaging any manufacturer
as a Third Party Manufacturer, Licensee shall advise Licensor of the
specific Licensed Products to be so manufactured. Licensee shall provide
Licensor with the name and address of any manufacturer that it wishes to
engage as a Third Party Manufacturer, and shall cause such manufacturer to
execute annually, in duplicate, a letter agreement in the form set forth
in Schedule 7.1.b hereof, shall forthwith provide a duplicate original
thereof to Licensor by registered or certified mail, and shall guarantee
such Third Party Manufacturer's compliance with the quality standards of
Licensor and the terms of such letter agreement. Licensee shall strictly
prohibit any such Third Party Manufacturer from. subcontracting the
manufacture of Licensed Products. Licensee shall remain primarily and
completely responsible to Licensor for the acts of Third Party
Manufacturers under all of the provisions of this Agreement and the acts
of Third Party Manufacturers shall be deemed to be the acts of Licensee.
Representatives of Licensor shall have the right to inspect, evaluate and
approve all manufacturers before approving them as Third Party
Manufacturers. To the extent requested by Licensor, Licensee shall assist
representatives of Licensor in visiting and inspecting Third Party
Manufacturers from time to time. Licensee further covenants to obtain in
writing from each Third Party Manufacturer undertakings in form
satisfactory to Licensor, regarding the disposition of unused branded
materials and defective finished products. Licensor shall also have the
right to prohibit Licensee from using manufacturers in countries where
such manufacture would conflict with other licenses granted by Licensor.
Licensee shall, upon request of Licensor, cease using any manufacturer
whose activities would be in violation of any of the terms of this
Agreement or the provisions of Schedule 7.1.b, whether or not such
manufacturer has actually executed a letter in the form of Schedule 7.1.b.
Upon the request of Licensor, Licensee shall take reasonable action in
conjunction with Licensor against any manufacturer or Third Party
Manufacturer that violates the provisions of this Agreement or of Schedule
7.1.b.
7.2 All Licensed Products manufactured by or for Licensee and sold or
distributed by Licensee shall conform to Licensee's quality standards as
set forth in Schedule 7.2 (and approved by Licensor) ("LICENSEE'S QUALITY
STANDARDS") and shall at all times be at lease equal in quality to the
quality of like or comparable products manufactured, sold and distributed
by Licensor's Representative in the United States of America under the
Licensed Trademarks (collectively with Licensee's Quality Standards
referred to herein as the "QUALITY Standards"), Licensor, its agents,
attorneys and representatives are hereby authorized, at any reasonable
time during normal working hours, to inspect the physical manufacturing
and storage facilities used by Licensee or under its direction to
ascertain whether such products conform to the Quality Standards. Repeated
failure on the part of Licensee to meet the Quality Standards shall be
grounds for Licensor to terminate this Agreement by giving Licensee
written notice of termination under Section 11.1(b).
7.3 Licensee shall at all times keep Licensor currently informed as to the
price and discount structure employed by Licensee in the sale of Licensed
Products under this Agreement. Licensee's prices of Licensed Products
shall be made official by the publication of a price list (or lists), and
each such price list shall be submitted to Licensor in advance of
publication.
7.4 Retail accounts approved as of the date of this Agreement ("APPROVED
RETAILERS") and wholesale accounts approved as of the date of this
Agreement ("APPROVED WHOLESALERS") are listed on Schedule 7.4 hereof.
Licensee agrees to sell its production of Licensed Products directly to
Approved Retailers and Approved Wholesalers for resale within the
Distribution and Sales Licensed Territory only. Licensee agrees not to
sell or transfer any Licensed Products to any third party who is not an
Approved Retailer or an
Approved Wholesaler unless Licensor has approved such sale or transfer
under Section 9.3(e) hereof, Licensee shall send written notice to all
Approved Wholesalers, with a copy of such notice to Licensor, advising
them of the Distribution and Sales Licensed Territory. Schedule 7,4 may be
amended from time to time by Licensor upon fifteen (15) business days'
written notice to Licensee.
7.5 Licensee shall not, during the term of this Agreement or thereafter,
manufacture or have manufactured Licensed Products outside the
Manufacturing Licensed Territory. Licensee shall not, during the term of
this Agreement or thereafter, sell or distribute the Licensed Products
outside the Distribution and Sales Licensed Territory, nor shall Licensee
sell Licensed Products to any person who it knows, should know, has reason
to believe, or should have reason to believe intends to export Licensed
Products outside the Distribution and Sales Licensed Territory.
7.6 Licensee agrees to ▇▇▇▇ each Licensed Product manufactured by it with the
country of origin permanently affixed at the time of manufacture to each
Licensed Product. Country of origin shall be affixed to all Licensed
Products regardless of the country in which the Licensed Product will be
sold. Licensee warrants that the genuine and true origin of all
merchandise subject to this Agreement will be the origin as stated on
invoice, visa, country of origin declaration or other document made in
conjunction with the importation of the merchandise into the United States
of America, and further warrants that no shipment has been or will be
illegally transshipped from any other country.
7.7 Licensee shall guarantee to its ultimate consumer the quality, materials
and workmanship of the Licensed Products sold under the provisions of this
Agreement. If the ultimate consumer is dissatisfied with any such product
and Licensee fails to make an adjustment satisfactory to such consumer,
Licensor may at its option, either replace the product at Licensee's
expense and without cost to the purchaser or refund the purchase price and
charge Licensee for such refund.
ARTICLE 8 - CODE OF BUSINESS CONDUCT AND CONTRACTOR TERMS OF ENGAGEMENT
8.1 Licensee has received, reviewed and understands VF Corporation's terms of
engagement, a copy of which is attached hereto as Exhibit ▇-▇ to Schedule
7.1.b. ("TERMS OF ENGAGEMENT"), Licensee shall provide the Terms of
Engagement to all facilities utilized by it in the manufacture and
distribution of Licensed Products. Licensee agrees that it will strictly
comply with the Terms of Engagement in all facilities owned by Licensee
and will require that any Third Party Manufacturer also comply with the
Terms of Engagement. Licensee shall execute and deliver to Licensor a copy
of the Terms of Engagement and shall require each Third Party Manufacturer
to execute a copy of the Terms of Engagement. Licensor shall not approve
any manufacturer as a Third Party Manufacturer until (a) Licensor has
received a copy of the Terms of Engagement executed by such manufacturer
and (b) such manufacturer has been inspected by or on behalf of Licensor
to determine that such Third Party Manufacturer is in compliance to
Licensor's satisfaction in its sole discretion with the Terms of
Engagement. The costs of each such inspection shall be borne by Licensee
and shall be paid by Licensee in advance, if so requested by Licensor, or
within ten (10) business days following receipt of an invoice therefor. At
Licensee's expense, Licensor may re-inspect such facilities, but not more
frequently than semi-annually.
8.2 Notwithstanding the provisions of Section 8.1 hereof requiring each
manufacturing facility to be inspected by Licensor, Licensor will not
directly inspect as a condition of approval:
(a) any manufacturing facility that demonstrates it is operating under a
current certification from the Worldwide Responsible Apparel Program
(WRAP); and
(b) any manufacturing facility for which Licensee provides to Licensor
prior to engaging such manufacturer and on an annual basis
thereafter a compliance report, dated within the last twelve months
and in form and substance reasonably satisfactory to Licensor, from
a recognized third-party factory compliance monitoring organization,
such as Intertek Testing Services, Price Waterhouse and appointed
subsidiaries, Global Social Compliance, California Safety
Compliance Corporation or BVQI, Inc. To enable Licensor to determine
whether any such report is reasonably satisfactory, Licensee shall
authorize the monitoring organization to discuss its monitoring
procedures for the particular manufacturing facility and the
contents of any such report with Licensor.
ARTICLE 9 - PRODUCT APPROVALS AND RELATED ISSUERS
Licensee and Licensor agree to the following with respect to Licensor's
rights of approval of the product to be developed, manufactured and marketed by
Licensee:
9.1 On or before October 1st of each year, Licensee will provide to Licensor
its annual product planning calendar for the forthcoming year. This annual
product planning calendar will indicate the dates by which Licensor is
required to approve or disapprove any item which is to be included in the
relevant product line. In no event will such date be less than ten (10)
business days from the date on which Licensor is provided with product
samples. In the event that Licensee submits additional product samples at
a time which is outside the submitted product planning calendar, then
Licensor will have ten (10) business days from the date on which Licensor
is provided with product samples to approve such product. Approval or
disapproval shall be at Licensor's discretion and any product on or in
connection with which any of the Licensed Trademarks is to be used that is
not approved by Licensor in writing shall be deemed unlicensed and
unapproved and shall not be manufactured or sold. After approval has been
given, Licensee shall provide to Licensor, at no cost to Licensor, four
(4) production samples from the first production run.
9.2 If any Licensed Product to be included in the product line is to include
"innovative" elements or components, Licensor will have the right to
require the testing of the Licensed Product and/or the innovative element
or component. For purposes of this Agreement, "innovative" elements or
components is defined as those elements or components that have not
previously been used in the manufacture of items comparable to the
Licensed Products.
9.3 Licensor shall have the right to approve the items set forth below with
respect to the Licensed Products to be developed, manufactured, and
marketed by Licensee. Licensor shall provide written notice of approval or
disapproval to Licensee within ten (10) business days from the date that
Licensor receives such a request for approval; if no notice of approval or
disapproval is provided by Licensor to Licensee, such request shall be
deemed to have been disapproved:
(a) Retail outlets other than Approved Retailers that will
purchase Licensed Products directly from Licensee;
(b) Wholesale distributors other than Approved Wholesalers that
will purchase Licensed Products directly from Licensee;
(c) Point-of-purchase displays;
(d) Advertising;
(e) Any and all methods of distribution to be used by Licensee in
order to dispose of Closeouts that are to be sold or
transferred to any third party or third parties who are not
Approved Retailers or Approved Wholesalers. If approved in
advance in writing by Licensor, Licensee may sell or transfer
Closeouts outside the Distribution and Sales Licensed
Territory, but only if all labels, hangtags and adornments
using any of the Licensed Trademarks are completely removed
and only if all "irregulars" are stamped "irregular"; and
(f) The labels, hangtags and other packaging to be included with
or on the Licensed Products.
9.4 Licensee warrants that each Licensed Product and component thereof shall
comply with all applicable laws, regulations and voluntary industry
standards and shall conform to the samples thereof approved by Licensor.
ARTICLE 10 - AID AND ASSISTANCE:
NONCOMPETITION BY LICENSOR
10.1 So long as this Agreement remains in full force and effect, Licensor
agrees to provide to Licensee, upon Licensee's reasonable request,
available material and information appropriate to the Licensed Products on
(a) merchandising, (b) planning of Licensor's products, including colors,
and (c) sales promotion and advertising.
10.2 So long as Licensee is not in default under this Agreement, Licensor
agrees not to sell or distribute Licensed Products bearing any of the
Licensed Trademarks within the Distribution and Sales Licensed Territory,
unless such products have been acquired from Licensee in accordance with
the terms of this Agreement.
ARTICLE 11 - TERMINATION
11.1 In addition to the provision contained in Section 5.6 hereof for the
termination of this Agreement, this Agreement may be terminated as
follows:
(a) If, at any time during the term of this Agreement, either Party is
unable to pay its debts when due, becomes insolvent, or there is
filed by or against it in any court a petition for bankruptcy,
insolvency, reorganization, or the appointment of a receiver or
trustee for all or a portion of its property; or if either Party
makes an assignment for the benefit of creditors, this Agreement may
be canceled and terminated at the option of the non-acting Party
upon written notice to the acting Party; such cancellation to be
effective immediately if the act giving rise to cancellation be
voluntary; otherwise such cancellation to be effective upon
adjudication of bankruptcy or insolvency or upon a court of
competent jurisdiction taking and retaining jurisdiction over the
acting Party and/or its assets for a period of sixty (60) days or
more;
(b) Except as to a monetary default, which shall be governed by Section
5,6 hereof, by either Party by giving thirty (30) days' written
notice to the other Party for any breach or default by the other
Party in its obligations under this Agreement, such termination to
be effective unless the other Party remedies the breach or default
specified in the notice before the end of such thirty (30) days;
(c) By Licensor by giving thirty (30) days' written notice if there is a
change in control of Licensee by way of merger, sale of assets or
stock, consolidation or otherwise unless such change has been
approved in writing by Licensor (Licensor's approval not to be
unreasonably withheld);
(d) By Licensor upon written notice to Licensee if production samples
submitted by Licensee fail to meet the Quality Standards for three
(3) consecutive months;
(e) By Licensor upon written notice to Licensee if Licensee discontinues
manufacture, distribution, product development or sale of the
Licensed Products for any three (3) consecutive months during the
term of this Agreement;
(f) By Licensor upon thirty (30) days' written notice to Licensee if
Licensee fails to submit Advertising Expenditure Reports as and when
due under Section 5.7 for two (2) or more consecutive quarters;
(g) By Licensor upon written notice to Licensee if Licensee fails to
expend the full amount of Advertising Expenditures required in each
Contract Year as required under Section 5.7;
(h) By Licensor upon written notice to Licensee if Licensee exhibits a
pattern of failing to make "timely delivery" of sufficient
quantities of the Licensed Products to its Approved Retailers and
Approved Wholesalers, For purposes of this provision, "timely
delivery" means 90% of deliveries (by volume) are made within
customer delivery windows, excluding cancellations prior to the
expiration of the delivery window;
(i) By Licensor upon written notice to Licensee should Licensee become an
Affiliate of any competitor of Licensor or Licensor's Representative
without Licensor's prior written approval. For purposes of this provision,
the term "competitor" shall include, for example: Levi ▇▇▇▇▇▇▇ & Co.
(j) By Licensor upon written notice to Licensee if Licensee does not
achieve the Minimum Net Sales for any Contract Year. If, however, Licensee
shall develop and submit to Licensor, simultaneously with the submission
of the Annual Marketing Plan for a Contract Year, (i) an explanation of
why the Minimum Net Sales were not attained for the prior Contract Year
and (ii) a plan of action as to how the Minimum Net Sales for the current
Contract Year will be achieved, which explanation and plan are accepted by
Licensor in its sole discretion, the default shall be waived;
(k) By Licensor if Licensor or any of its Affiliates has a right to
terminate any other agreement between Licensor or its Affiliates and
Licensee; or
(1) By Licensor upon thirty (30) days' written notice to Licensee if
Licensee fails to submit Quarterly Sales Reports as and when due
under Section 6.2 hereof for two (2) or more consecutive quarters.
(m) By Licensor should there occur any change of corporate control or
ownership of a majority interest in Licensor or Licensor's
Representative, by way of merger, sale or consolidation.
In addition to Licenser's other rights and remedies hereunder, at law or
in equity. upon termination of this Agreement by Licensor pursuant to Section
5.6 hereof or clauses (a) through (m) above, Licensee shall pay to Licenser,
within thirty (30) days of such termination of this Agreement, the lesser of the
aggregate Minimum Royalty that would have been payable
with respect to the remaining term of this Agreement had such termination not
occurred or the aggregate Minimum Royalty that would have been payable with
respect to the next twelve (12) months under this Agreement had such termination
not occurred. The Minimum Royalty for any Contract Year shall be prorated for
any portion of a Contract Year.
11.2 At any time within six (6) months before the date of expiration of this
Agreement, Licensor may appoint a new Licensee or distributor for the
Licensed Products in the Distribution and Sales Licensed Territory.
Licensor directly or its newly appointed Licensee or distributor may sell
Licensed Products in the Distribution and Sales Licensed. Territory at any
time within six (6) months of the date of expiration for shipment
subsequent to the date of expiration.
11.3 Failure of either Party to exercise any right or option to terminate this
Agreement shall not constitute a waiver of such right or any other right.
ARTICLE 12 - PRODUCTS IN HAND AT TERMINATION; CANCELLATION OR
EXPIRATION; PAYMENTS
12.1 Termination, cancellation, or expiration of this Agreement for any reason
shall not relieve Licensee of its obligation to pay to Licensor the
Percentage Royalty specified in Section 5.1 hereof and the Minimum Royalty
specified in Section 5.2 hereof with respect to Licensed Products
manufactured and/or sold by Licensee prior to such termination,
cancellation or expiration. Licensee further agrees to pay Licensor, at
the same royalty rate in effect at the date of termination, cancellation
or expiration, for all Licensed Products sold by Licensee after
termination, cancellation or expiration of this Agreement that Licensee
has on hand or that are in process of manufacture at the effective date of
termination, cancellation or expiration of this Agreement. For Licensed
Products sold after the termination, cancellation or expiration of this
Agreement, Percentage Royalty shall be payable not later than the
twenty-fifth (25th) day after the end of the month in which the Licensed
Products were sold.
1.2.2 Within twenty (20) days after termination, cancellation or expiration of
this Agreement, Licensee shall provide Licensor with a complete inventory
of all remaining Licensed Products and all Licensed Products on order from
Third Party Manufacturers, as well as the anticipated delivery date(s)
thereof. Licensor shall have the right, but not the obligation, to
purchase all or any portion of Licensee's remaining inventory of Licensed
Products at a price equal to seventy percent (70%) of Licensee's wholesale
list price, in which case no Percentage Royalty thereon shall be payable.
Such right shall be exercisable by giving written notice to Licensee
within ten (10) business days after Licensor receives Licensee's inventory
listing. Such purchase shall be completed and the purchase price for the
inventory Licensor elects to purchase shall be paid within ten (10)
business days after Licensor exercises its purchase option.
12.3 To the extent that Licensor does not opt to purchase Licensee's remaining
inventory upon termination, cancellation or expiration of this Agreement,
and if and only if (a) Licensee has paid all Percentage Royalty and
Minimum Royalty and submitted all plans and reports in accordance with
Articles 5, 6 and 7 hereof, (b) during the then-current Contract Year, an
audit in accordance with the terms of Section 6.4 has been completed by or
on behalf of Licensor to its satisfaction, and (c) Licensee is not in
breach of' any of the provisions referenced in Subsections 11.1(a) -
11.1(1), then Licensee shall have six (6) months from the date of
termination, cancellation or expiration of this Agreement in which to sell
unsold Licensed Products through Approved Retailers, Approved Wholesalers,
or Approved Outlets only. All products remaining unsold at the end of such
period shall be destroyed or given to a charity approved by Licensor. As
to any Licensed Products on order on the date of termination, cancellation
or expiration, Licensee shall have six (6) months from the last date on
which such Licensed Products are received in which to sell such goods
through Approved Retailers, Approved Wholesalers or Approved Outlets only
and all products remaining unsold at the end of such period shall be
destroyed or given to a charity approved by Licensor.
ARTICLE 13 - RECORDS AFTER TERMINATION, CANCELLATION OR EXPIRATION
Upon termination, cancellation or expiration of this Agreement, Licensee
agrees to permit Licensor, its agents, attorneys and accountants to inspect,
upon reasonable notice, the records and books of account of Licensee referred to
in Section 6.4 hereof, and to investigate generally all business transactions
carried on by Licensee under and pursuant to this Agreement from time to time
for a period of twelve (12) months following the last sale of Licensed Products,
and Licensee agrees not to destroy any of such records prior to the expiration
of said twelve (12) months.
ARTICLE 14 - RELINQUISHMENT OF LICENSED LETTER
14.1 At the expiration, cancellation or termination of this Agreement for any
reason, Licensee shall not have acquired and will not claim any right to
use any of the Licensed Trademarks, any other trademark of Licensor, any
trademark confusingly similar to any of the Licensed Trademarks or any
trademark of Licensor, or any trade name containing a term consisting of
any part of any of the Licensed Trademarks or any trademark of Licensor;
and Licensee agrees that it will not thereafter use or adopt any such
trademark or trade name or any related trade dress, or any trademark,
trade name, or trade dress confusingly similar thereto. Licensee further
agrees that, after termination, cancellation or expiration of this
Agreement, except as provided in Article 12 hereof, relating to products
on hand at termination, it will refrain from using any trade dress or
distinctive features of the Licensed Products' labeling or design
theretofore employed by Licensee in carrying out the provisions of this
Agreement.
14.2 Licensee shall not at any time after the date of expiration or termination
of this Agreement:
(a) use or adopt any trademark, trade name or trade dress or any
colorable simulation thereof, or any confusingly similar trademark,
trade name or trade dress; or
(b) use or adopt any other distinctive labeling or design features of
the Licensed Products theretofore employed by Licensee in connection
with this Agreement.
14.3 Further, upon expiration, cancellation or termination of this Agreement
for any reason whatsoever, Licensee shall return to Licensor any and all
materials furnished to Licensee by Licensor (including, but not limited
to, promotional and product development materials), as such material
remains the property of Licensor.
14.4 Upon expiration or termination of this Agreement for any reason, Licensee
at its own expense shall deliver promptly to Licensor all unused labels,
Advertising and other materials on which the Licensed Trademarks appear
that are in Licensee's possession or control.
ARTICLE 15 - FAIR PRACTICES
Licensor and Licensee each covenants and agrees that, during the term of
this Agreement or thereafter, it will not encourage, induce or assist any third
party in doing any act or thing which, were it done by Licensor or Licensee, as
applicable, would be contrary to the provisions of this Agreement.
ARTICLE 16 - NO JOINT VENTURE. INDEMNIFICATION; MAINTENANCE OF INSURANCE
16.1 This Agreement shall. not in any way be deemed or construed to establish
any relationship between the Parties by way of agency, distributorship,
partnership or joint venture. Neither Party will, nor will either Party
have the authority, directly or indirectly, to contract or purport to
contract any bills or other obligations of any kind in the name of, or
chargeable against the other Party, its agents or employees, or in any
way, directly or indirectly, involve the other Party in any expense or
liability. Except for claims for which Licensor is obligated to indemnify
Licensee under Section 4.4 hereof, Licensee shall indemnify, defend, and
hold harmless Licensor, its officers, directors, Affiliates, employees and
agents from any and all claims, liabilities and expenses which may be
imposed or sought to be imposed upon it or them by virtue of any
representation, act or agency, made by or on the part of Licensee or any
of Licensee's agents or employees including, without limitation, any of
the foregoing arising out of any defect (whether
obvious or hidden and whether or not present in any sample approved by
Licensor) in a Licensed Product, or any packaging or promotional materials
or arising from personal injury or from any failure on the part of
Licensee or its agents or Affiliates to comply with applicable laws,
regulations and standards. Any and all such claims made or suits brought
by anyone in connection with the products manufactured by Licensee under
this Agreement shall be the sole responsibility of Licensee, and Licensor
shall be held harmless by Licensee in all respects from any and all loss,
damage, expense, claim or liability of any kind by reason thereof,
including reasonable attorney's fees. In the event that a judgment, levy,
attachment or other seizure is entered against Licensor arising from any
claim as to which indemnification is provided hereunder, Licensee shall
promptly post the necessary bond to prevent execution against any property
of Licensor. The provisions of this Section 16.1 shall survive
termination, cancellation or expiration of this Agreement. Licensor will
endeavor to give Licensee prompt written notice of any claim or suit which
may give rise to a claim for indemnification hereunder.
16.2 Licensee shall procure and maintain in full force and effect, at its sole
cost and expense, at all times during which Licensed Products are being
sold and for three (3) years thereafter, a product liability insurance
policy (on an occurrence rather than a claims-made basis) with respect to
the Licensed Products with a limit of liability of not less than
$5,000,000. Such insurance policy shall include Licensor as an additional
insured thereunder and shall provide for at least thirty (30) days' prior
written notice to Licensor of the cancellation or substantial modification
thereof Such insurance may be obtained by Licensee in conjunction with a
policy of products liability insurance which covers products other than
the Licensed Products. Licensee will deliver a certificate of such
insurance to Licensor promptly upon issuance of said insurance policy and
shall, from time to time upon reasonable request by Licensor, promptly
furnish to Licensor evidence of the maintenance of said insurance policy.
Nothing contained in this Section 16.2 shall be deemed to limit in any way
the indemnification provisions of Section 16.1.
ARTICLE 17 - BINDING ASSIGNMENT
This Agreement is binding upon and for the benefit of Licensee and
Licensor, their respective legal successors and permitted assigns. The rights
and license given to Licensee by this Agreement are strictly personal. Neither
this Agreement nor any interest in it may be transferred, pledged, mortgaged or
hypothecated by Licensee (including by assignment, sublicense, operation of law
or otherwise) without the prior written consent of Licensor. Any attempted
assignment, sublicense, transfer, encumbrance or other disposal without such
consent shall be void and shall constitute a material default of this Agreement.
Nothing herein shall be deemed to prevent or restrict Licensor's ability to
sell, transfer or assign the Licensed Trademarks or this Agreement to any party,
subject only to Licensee's rights to continue use thereof as provided herein,
subject to the terms and conditions of this Agreement in all respects.
ARTICLE 18 - NOTICES
All notices given or required to be given hereunder shall be deemed to be
given and received (a) as of the date sent if sent by overnight courier or
telecopier, with the telecopier notice promptly confirmed by United States
registered mail, postage paid, return receipt requested, or (b) three (3)
business days after being sent by United States certified mail, postage paid,
return receipt requested and addressed as follows or to such other address as
shall have been provided pursuant to notice under this Article:
LICENSOR: Wrangler Apparel Corp. ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Assistant General Counsel
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
Licensing Director
VP Jeanswear Limited Partnership ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LICENSEE: ▇▇▇▇▇▇▇▇ Belt Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, C.E.O. Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE 19 - COMPLIANCE WITH AND OPERATION OF LAW
19.1 Licensee shall comply in all material respects with all applicable laws,
rules and regulations. Licensee shall use its best efforts to determine
that each manufacturer of Licensed Products complies in all material
respects with all applicable laws, rules and regulations, including
applicable wage, hour, child labor and other employment laws and shall
deal only with manufacturers who so comply and shall, from time to time as
requested by Licensor, certify that to the best of Licensee's knowledge,
after reasonable inquiry, such is the case.
19.2 Nothing in this Agreement shall require, encourage or oblige a Party to
perform any act or make any payment which is illegal or in contravention
of any applicable statute, law or regulation.
19.3 If any provision of this Agreement is in violation of the present or
future law of any relevant jurisdiction in such a way that it is void or
voidable, the validity of the remaining provisions shall not be affected
thereby unless such invalidity is of an essential and material part of
this Agreement, in which event either Party shall have the right to
terminate this Agreement.
ARTICLE 20 - CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
20.1 Subject to Article 21 hereof, Licensee hereby irrevocably submits to the
jurisdiction of any Delaware state court sitting in Wilmington, Delaware
or the United States District Court for the District of Delaware over any
action or proceeding arising out of or relating to this Agreement. Service
of process in any such action or proceeding arising out of or relating to
this Agreement may be made to Licensee by mailing or delivering a copy of
such process to Licensee at Licensee's address as specified in Article 18
hereof: Nothing in this Article 20 shall affect the right of Licensor to
serve legal process in any other manner permitted by law or affect the
right of Licensor to bring any action or proceeding against Licensee or
its property in the courts of any other jurisdictions.
20.2 Licensee hereby irrevocably agrees that any action or proceeding arising
out of or relating to this Agreement may be brought against Licensor
solely in Delaware state court sifting in Wilmington, Delaware or the
United States District Court for the District of Delaware.
20.2 Licensee and Licensor hereby waive all rights to trial by jury in any
action, suit, proceeding or counterclaim arising out of or relating to
this Agreement or any other agreement, instrument or other document
executed in connection herewith.
20.3 Licensee may not commence any action or proceeding against Licensor
without giving Licensor thirty (30) days' prior written notice of its
intention to commence an. action or proceeding and the basis therefor,
20.4 The provisions of this Article 20 shall survive the expiration,
cancellation or termination of this Agreement.
ARTICLE 21 - ARBITRATION
Licensor may require by written notice at any time, including, without
limitation, during the notice period referenced in Section 20.4 hereof, that any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof; except any claim or
controversy relating to the performance of a third party manufacturer, may be
finally settled by arbitration before three (3) arbitrators in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). If Licensor does so require, then each Party shall appoint one (1)
arbitrator and a third shall be appointed by agreement of the named arbitrators.
If any Party fails to appoint an arbitrator within thirty (30) days after demand
for arbitration is filed with the AAA, or if the named arbitrators are unable to
agree on the appointment of a third arbitrator within sixty (60) days after the
first two arbitrators have been appointed, the AAA shall select such unnamed or
unappointed arbitrators in accordance with its standard procedures. Arbitration
shall be conducted in the English language at Wilmington, Delaware. The award of
the arbitrators shall be final and enforceable, and judgment upon any award
rendered thereby may be entered in any court having jurisdiction, or application
may be made to such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. Anything herein to the contrary
notwithstanding, the arbitration provided for herein shall in no way limit,
affect, hinder or become a precondition to or a qualification upon the rights of
either Party to obtain immediate equitable relief to which it may be entitled.
The provisions of this Article 21 shall survive the expiration, cancellation, or
termination of this Agreement.
ARTICLE 22 - LICENSOR'S REPRESENTATIVE
Licensor has appointed Licensor's Representative to performing Licensor's
rights and obligations under Section 2.4 and Articles 7, 8, 9, 10, and 22 of
this Agreement, and Licensee shall cooperate with Licenser's Representative
under this Agreement with respect to such Section and Articles and otherwise as
Licensor may direct from time to time.
ARTICLE 23 - ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the Parties
relating to the subject matter hereof and supersedes any prior agreement or
understanding. There are no terms, obligations, covenants, representations,
statements or conditions other than those contained herein. No variation or
modification of this Agreement nor waiver of any of the terms and provisions
hereof shall be deemed valid unless in a writing signed by both Parties.
ARTICLE 24 - TERM
This Agreement shall become effective as of January 1, 2004 and shall
expire on December 31, 2006, unless sooner terminated as herein provided.
ARTICLE 25 - COVE NINE LAW
This Agreement shall be governed and construed in accordance with the
internal laws of the State of Delaware, United States of America, without regard
to its provisions governing conflicts of law.
ARTICLE 26 - CONFIDENTIALITY
Each Party agrees that the terms of this Agreement will be kept
confidential by it and its representatives (which term shall include its
directors, members, officers, employees, agents, banks, advisors, and in the
case of Licensee, factors). Each Party shall be responsible for any breach of
this agreement of confidentiality by it or its representatives, and the other
Party shall be entitled. to directly enforce such agreement. The foregoing to
the contrary notwithstanding, disclosure of this Agreement may be made in a
public; announcement or filing with the Securities and Exchange Commission or a
national securities exchange if and to the extent, in the written opinion of
either Party's counsel, such disclosure is required.
ARTICLE 27 - EQUITABLE RELIEF
Licensee acknowledges that Licensor will have no adequate remedy at law if
Licensee continues to manufacture, sell, advertise, promote or distribute the
Licensed Products upon the expiration, cancellation or termination of this
Agreement. Licensee acknowledges and agrees that, in addition to any and all
other remedies available to Licensor, Licensor shall have the right to have any
such activity by Licensee restrained by equitable relief, including, but not
limited to a temporary restraining order, a preliminary injunction, a permanent
injunction, or such other alternative relief as may be appropriate, without the
necessity of posting any bond.
ARTICLE 28 - COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute but one
and the same Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
LICENSOR
[Countersigned for internal WRANGLER APPAREL CORP.
control purposes only]
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------ -----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
Date: 12/1/04
LICENSEE
▇▇▇▇▇▇▇▇ BELT COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Title: CEO
Date: 12/15/04
