EXHIBIT 10.35
EXCLUSIVE INDEPENDENT CONTRACTOR
REPRESENTATION AGREEMENT
THIS AGREEMENT, made as of the 1ST day of January, 2003, between Deckers
Outdoor Corporation a corporation organized and existing under the laws of the
state of California, with offices at 495-A S. Fairview Ave., Goleta, CA 93117
(hereinafter referred to as "LICENSOR") and BHPC Marketing, Inc., a corporation
organized and existing under the laws of the state of California, with offices
at 27129 Calle Arroyo, Suite 1821, San Juan Capistrano, California, 92675,
United States of America (hereinafter referred to as "CONTRACTOR").
WITNESSETH:
WHEREAS, LICENSOR is the owner with the right to grant licenses of the
TEVA logo (the "Trademark");
WHEREAS, LICENSOR desires to grant licenses for the use of the Trademark;
WHEREAS, LICENSOR wishes to appoint CONTRACTOR as its exclusive agent in
order to effectuate the licensing of the Trademark worldwide (the "Territory");
WHEREAS, CONTRACTOR has had extensive experience in merchandising a
variety of products and wishes to assist in the development and exploitation of
the Trademark in association with high quality reputable products.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties agree as follows:
1. RIGHT TO REPRESENT
A. LICENSOR hereby grants to CONTRACTOR, for the term of this
Agreement, the exclusive right to represent LICENSOR in the
Territory in the securing and implementation of a plan to utilize
third party licensees (the "Licensee(s)") to design, manufacture,
import, distribute, advertise, promote, ship and sell various
products in the Territory which bear or otherwise incorporate the
Trademark (the "Licensed Product(s)") for Products not produced by
the LICENSOR.
B. Nothing contained in this Agreement shall be construed as an
assignment or grant to CONTRACTOR of any right, title or interest in
or to the Trademark, it being understood that all rights relating to
the Trademark are expressly reserved by LICENSOR.
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2. TERM
A. This Agreement shall commence upon the date hereof and shall
terminate and expire on December 31, 2004, unless terminated sooner
pursuant to the provisions of this Agreement.
B. If no renewal term is entered into, in writing, by said expiration
date, then this Agreement will be considered terminated.
3. DUTIES OF CONTRACTOR
A. CONTRACTOR shall use its best efforts during the 1st Contract Year
of January 1, 2003 through December 31, 2003 to find and submit to
LICENSOR for its approval six (6) qualified potential Licensees with
signed "Deal Memos" in the following categories: men's wear, women's
wear, hosiery, eyewear, watches and luggage/soft bags. If CONTRACTOR
does not produce six (6) qualified Licensees as described above,
then CONTRACTOR agrees to represent LICENSOR on a non-exclusive
basis.
B. Subject to the conditions herein specified, the CONTRACTOR shall use
its best efforts during the term of this Agreement to find and
conclude business arrangements with the Licensees which are deemed
advantageous by LICENSOR. CONTRACTOR shall exercise the rights
granted hereunder as an independent contractor and shall maintain an
office and active organization at its sole expense to carry out
CONTRACTOR's duties and obligations hereunder.
C. CONTRACTOR shall submit each proposed Licensee to LICENSOR for
LICENSOR's prior express written approval. CONTRACTOR shall also
submit to LICENSOR such information regarding the financial
condition of the proposed Licensee as shall be reasonably requested
by LICENSOR, including, but not limited to, annual reports of the
proposed Licensee, as well as catalogs or products manufactured and
sold by the proposed Licensee. LICENSOR may withhold its approval of
any proposed Licensee, or License Agreement, or any other
arrangement in its absolute and sole discretion, for any reason. If
LICENSOR shall approve of a proposed Licensee and License Agreement,
the form of such License Agreement shall be subject to any changes
LICENSOR may require. LICENSOR shall be a party to all such License
Agreements. Each such License Agreement shall require a signature on
behalf of LICENSOR. No License Agreement shall be binding upon
LICENSOR, or be of any legal effect whatsoever, until it has been
executed on behalf
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of LICENSOR by a duly elected and authorized officer of LICENSOR.
With respect thereto, CONTRACTOR shall advise each proposed Licensee
that it may not commence the use of the Trademark until the proposed
Licensee has received a fully executed copy of the License Agreement
between LICENSOR and the proposed Licensee.
D. It is understood and agreed by LICENSOR that CONTRACTOR may render
other and similar services on behalf of other clients or with
respect to its own trademarks and nothing contained in this
Agreement shall preclude CONTRACTOR from rendering such services.
E. In furtherance of CONTRACTOR's duties and obligations as herein
specified, CONTRACTOR agrees to and will:
i. Seek out potential Licensees for the Trademark qualified in
terms of financing, manufacturing, and marketing quality
Licensed Products in the product and geographic areas for
which a license will be granted. This includes an in-depth
review of the proposed Licensee's position in the industry
involved.
ii. Negotiate on behalf of LICENSOR the business terms and
conditions of a License Agreement ("License Agreement") which
is subject to the LICENSOR'S approval in its sole and absolute
discretion.
iii. Monitor and oversee the licensing program with the Licensees
to insure that the Licensee's royalties, minimums, sales
reports and other required documentation are being promptly
submitted.
iv. Review each of the Licensee's Licensed Products,
advertisements and promotional materials relating to the
Licensed Products to insure that the quality control
provisions and Trademark usage provisions of the respective
License Agreement are being observed; and to insure that the
Licensee's promotional, advertising and sales programs are
being carried out in compliance with the respective License
Agreement.
v. If necessary, with the express prior written authorization of
LICENSOR, conduct a personal visit to the Licensee's
manufacturing facilities to insure that the provisions of the
License Agreement are being observed; and to submit to
LICENSOR a written report after each of said visits.
vi. Conduct a comprehensive review of the product categories and
markets to determine the appropriate mix of Licensed Products
and a targeted approach for market entry.
vii. Develop proposed standard license agreement forms and other
forms for the efficient administration of the licensing
program.
F. CONTRACTOR shall not use the Trademark, in any manner, directly or
indirectly, or
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in whole or in part, except to the manner and to the extent
consistent and necessary to complete the goals and objectives of
this Agreement. For any other use, CONTRACTOR shall obtain
LICENSOR's specific consent in writing. Upon termination of this
Agreement, CONTRACTOR shall discontinue all use of the Trademark and
shall return to LICENSOR all facsimiles of any products manufactured
or distributed under any such Trademark.
G. CONTRACTOR shall provide LICENSOR with a monthly report listing
existing and potential license agreements, and all contacts and
discussions relating to potential new license agreements.
4. COMPENSATION TO CONTRACTOR
A. In full consideration of services rendered to this Agreement,
CONTRACTOR shall be entitled to a commission equal to twenty-five
percent (25%) of royalties received by LICENSOR pursuant to the
License Agreements negotiated on behalf of LICENSOR by CONTRACTOR.
LICENSOR shall not be liable to CONTRACTOR for any commission or
other compensation on royalties earned by LICENSOR but not received
from licensee, or any future royalties under a license agreement(s)
which are not collected due to any reason including breach of
license agreement by licensee resulting in a termination of license
agreement or any other dispute between LICENSOR and licensee
resulting in licensee not paying royalties which would otherwise be
due under the respective license agreement.
B. LICENSOR currently has licenses in the United States for webbing
copyrights with Dunlop Musical Accessories and Bison Designs, LLC.
This agreement does not cover such licenses and CONTRACTOR has no
duties to service such licenses and will receive no compensation
from such licenses.
C. LICENSOR has a trademark license for the Japanese territory with
Itochu which expires on December 31st, 2003. For the remainder of
the Itochu license term, CONTRACTOR has no duties to service such
license and will receive no compensation from such license. If
LICENSOR renews its agreement with Itochu the provisions of
paragraph 4(D) shall apply to CONTRACTOR.
D. LICENSOR has other contractors that represent LICENSOR outside the
United States with respect to distribution of LICENSOR'S footwear.
These contractors may from time-to-time bring forth potential
Licensees in these markets. If LICENSOR enters into a license
agreement with a Licensee brought forth by other contractors,
CONTRACTOR shall service such licensees through the initial term and
any renewal terms, etc. and will receive fifteen (15%) compensation
from such licensees.
E. In the event that this Agreement is terminated for any reason by
LICENSOR or CONTRACTOR, CONTRACTOR shall receive fifteen percent
(15%) of royalties received by LICENSOR for each License pursuant to
the executed License Agreements negotiated on behalf of LICENSOR by
CONTRACTOR for the balance of the term of any such License and any
renewal terms.
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5. ROYALTIES ACCOUNT/PAYMENT
A. LICENSOR shall collect all royalties and shall provide CONTRACTOR
with copies of statements for the royalty account ("royalty
account"), along with copies of any supporting documentation
including copies of all checks deposited to the royalty account by
the 20th day of the month following the end of the calendar quarter
(namely: April 20th, July 20th, October 20th, and January 20th.
B. LICENSOR shall remit to CONTRACTOR its share of any royalties by the
20th day of the month following the end of the calendar quarter
(namely: April 20th, July 20th, October 20th, and January 20th.
6. ASSIGNABILITY
This Agreement is personal to the parties. CONTRACTOR shall not have the
right to assign its respective rights and/or obligations in this
Agreement. LICENSOR retains the right to assign its respective rights
and/or obligations in this Agreement without consent of CONTRACTOR.
7. TERMINATION
A. Anything to the contrary notwithstanding, this Agreement may be
terminated in advance of the expiration of its initial term, or any
renewal thereof, by either party, upon thirty (30) days written
notice to the other.
B. In the event that either party files a petition of bankruptcy or is
adjudicated a bankrupt or insolvent; or makes an assignment for the
benefit of creditors, or an arrangement pursuant to any bankruptcy
law; or if a party discontinues its business; or if a receiver is
appointed for the party or its business who is not discharged within
thirty (30) days, the rights granted hereunder shall automatically
be terminated forthwith upon written notice from the other party.
C. After the expiration or termination of this Agreement, all rights
granted to CONTRACTOR shall forthwith revert to LICENSOR. Further,
CONTRACTOR shall refrain from further efforts to commercialize the
Trademark or any further reference to it, direct or indirect.
D. Within thirty (30) days after termination or expiration of this
Agreement, CONTRACTOR shall deliver to LICENSOR a report indicating
the number and description of all Licensed Agreements which have
been entered into by LICENSOR
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through the efforts of the CONTRACTOR and a copy of each and every
such License Agreement. Also, within thirty (30) days after
expiration or termination of the Agreement, CONTRACTOR will submit a
list of potential licensees with whom it has been in discussions and
a report of the status of such discussions. Said list will be
mutually agreed upon by LICENSOR and CONTRACTOR to avoid any future
dispute. Said list shall be consistent with the monthly report as
referenced in Subparagraph 3.G.
E. Notwithstanding termination or expiration of this Agreement,
LICENSOR shall continue to pay commissions to CONTRACTOR on all
third party License Agreements either entered during the term of
this Agreement, or entered within three months thereafter with
Licensees with whom CONTRACTOR had initiated discussions, identified
pursuant to the previous paragraph. Payments of commissions on such
licenses shall continue until their termination or expiration,
including renewals, and including licenses assigned, transferred or
granted to persons affiliated with Licensees. In the event of
termination of this Agreement, LICENSOR shall continue to pay
commissions to CONTRACTOR on all License Agreements entered into
pursuant to this Agreement, as described above, until the expiration
of the initial term of the License Agreement and any specific
renewal periods provided for in the respective License Agreement.
8. LEGAL EXPENSES
A. LICENSOR will be responsible for all legal fees as they pertain to
registration and protection of the Trademark. LICENSOR will hold
CONTRACTOR harmless from and indemnify CONTRACTOR for all expenses
or damages associated with any third party claim that the Trademark
infringes another mark.
B. The parties shall consult with each other prior to LICENSOR
initiating any audit of any Licensee or pursuit of legal remedies
against any Licensee for breach of contract, non-payment or
underpayment of royalties. CONTRACTOR may, but is not required to,
contribute to legal or accounting expenses therefor, and if it does,
will contribute twenty five percent (25%) of such expenses up to the
total amounts of commissions previously received by it attributable
to such Licensee, and shall be entitled to collect twenty five
percent (25%) of the Net Royalties collected as a consequence of
such activity after deduction of all such expenses. If CONTRACTOR
elects not to participate, all expenses shall be borne by and all
proceeds shall be retained by LICENSOR.
C. CONTRACTOR will indemnify LICENSOR for any and all reasonable
expenses and legal fees and other damages sustained by LICENSOR as a
result of litigation due to CONTRACTOR's breach of this Agreement,
provided LICENSOR is the prevailing
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party in such litigation. LICENSOR will indemnify CONTRACTOR for any
and all reasonable expenses and legal fees and other damages
sustained by CONTRACTOR as a result of litigation due to LICENSOR's
breach of this Agreement, provided CONTRACTOR is the prevailing
party in such litigation.
D. Notwithstanding anything contained herein, LICENSOR or the
CONTRACTOR shall have the right to bring an action in any court to
obtain an injunction against the other party to prevent any future
harm which shall be sustained arising out of a breach of this
Agreement.
9. CONFIDENTIALITY
CONTRACTOR agrees (and shall instruct its partners, officers, directors
and other persons to whom disclosure is made) to keep strictly
confidential all designs, manufacturing instructions, and other
information relating to the License Agreements and the Licensed Products
produced, sold and distributed thereunder that are not otherwise available
to the public, whether furnished by LICENSOR to the CONTRACTOR or in any
way acquired by the CONTRACTOR; and the same shall be used by CONTRACTOR
solely under this Agreement and for the purpose of securing License
Agreements hereunder.
10. NOTICES
All notices or other communications required or desired to be sent to
either party shall be in writing sent by certified mail, postage pre-paid,
return receipt requested, as follows:
The address for LICENSOR shall be:
DECKERS OUTDOOR CORPORATION
495-A S. Fairview Ave.
Goleta, CA 93117
The address for CONTRACTOR shall be:
BHPC MARKETING, INC.
27129 Calle Arroyo, Suite 1821
San Juan Capistrano, CA 92675
Either party may change such address by notice in writing to the other
party.
11. NO AGENCY, JOINT VENTURE, PARTNERSHIP
The parties hereby agree that no agency, joint venture or partnership is
created by this
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Agreement, and that neither party shall incur any obligation in the name
of the other without the other's prior written consent.
12. CONSTRUCTION; VENUE
This Agreement shall be construed in accordance with the laws of the state
of California, U.S.A., and the parties agree that it is executed and
delivered in that state.
13. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement of
the breach thereof will be settled by arbitration before a single
arbitrator according to the Rules of the American Arbitration Association
then in effect, and judgment upon the award rendered by the arbitrator may
be rendered in any court having jurisdiction. Any such arbitration shall
be conducted in Santa Barbara, California. The arbitrator shall have the
discretion to order a pre-hearing exchange of information by the parties,
including, without limitation, production of requested documents, exchange
of summaries of testimony of proposed witnesses, and examination by
deposition of parties. The prevailing party in an arbitration shall be
entitled to an award of reasonable attorney's fees and costs.
14. CAPTIONS
The captions used in connection with the paragraphs of this Agreement are
inserted only for purposes of references. Such captions shall not be
deemed to govern, limit, modify, or in any other manner affect the scope,
meaning or intent of the provisions of this Agreement or any part thereof
nor shall such captions otherwise be given any legal effect.
15. MODIFICATION; WAIVER
No modification of any of the terms or provisions of this Agreement shall
be valid unless contained in a writing signed by the parties. No waiver by
either party of a breach or a default hereunder shall be deemed a waiver
by such party of a subsequent breach of a like or similar nature. Resort
by LICENSOR to any remedies referred to in this Agreement, or arising by
reason of a breach of this Agreement by CONTRACTOR, shall not be construed
as a waiver by LICENSOR of its right to resort to any and all legal and
equitable remedies available to LICENSOR.
16. SURVIVAL OF THE RIGHTS
Notwithstanding anything to the contrary contained herein, such
obligations which remain executory after expiration of the term or
termination of this Agreement shall remain in full force and effect until
discharged by performance and such rights as pertained thereto shall
remain enforced until their expiration.
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17. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties and there
are no representations, warranties, promises or undertakings other than
those contained herein. This Agreement supersedes and cancels all previous
agreements between the parties hereto.
18. BINDING EFFECT
This Agreement shall be binding on the parties and their successors and
assigns so long as the Agreement is assigned pursuant to the provisions
and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto agree that this Agreement shall take
effect as of the date and year first above written.
LICENSOR: CONTRACTOR:
DECKERS OUTDOOR CORPORATION BHPC MARKETING, INC.
a California corporation a California corporation
/s/ Douglas B. Otto /s/ Don Garrison
- ---------------------------- -------------------------------
Douglas B. Otto Don Garrison
Chief Executive Officer President
/s/ Roger Tomlinson
--------------------------------
Roger Tomlinson
Treasurer/Director
Date: April 9, 2003 Date: April 14, 2003
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