Exhibit 10.47
EXECUTION COPY
BUYING AGENCY
AGREEMENT
THIS BUYING AGENCY
AGREEMENT (this
“Agreement”) is entered into and made effective this
16th day of November, 2005 (the “Effective Date”) by
and between DESIGNS APPAREL, INC., a Delaware corporation, located
at 555 Turnpike Street, Canton, MA 02021, a (hereinafter referred
to as “Principal” or “Party”, which terms
shall include any and all affiliates and subsidiaries), and
LI & FUNG (TRADING) LIMITED, a company incorporated in
Hong Kong with limited liability, located at 9th Flr. LiFung Tower,
888 Cheung Sha Wan Road, Kowloon, Hong Kong (hereinafter referred
to as “Agent” or “Party”) (Collectively,
the “Parties”).
W I T N E S S E T
H:
WHEREAS , Principal is engaged in the business of
merchandising of apparel and accessories throughout the World;
and
WHEREAS , Principal wishes to purchase certain non-U.S.
produced merchandise (hereinafter referred to as the
“Merchandise”); and
WHEREAS , Agent is in the business of providing buying
services (hereinafter referred to as the “Services”
which term shall include, but not limited to, all of the services
described in Section 4, below); and
WHEREAS , Principal wishes to appoint Agent as its
non-exclusive buying agent throughout the World (the
“Territory”),
NOW, THEREFORE
, in consideration of the covenants
set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is acknowledged, Principal and
Agent agree as follows:
1. APPOINTMENT
. Principal hereby appoints Agent as
a non-exclusive buying agent to render Services in the Territory in
connection with the purchase of Merchandise by Principal. Agent
hereby accepts such appointment on the terms and conditions
contained herein. Principal may at any time and from time to time,
without notice, appoint other buying agents and Agent may accept
other appointments from any other Principal to perform
services.
2. RELATIONSHIP OF THE
PARTIES .
2.1 Each Party to this Agreement
will be and agrees to act as an independent contractor and not as a
partner of, or joint venturer with, the other Party for any purpose
related to this Agreement or the transactions contemplated by this
Agreement, and neither Party will by virtue of this Agreement have
any right, power or authority to act or create any obligation,
expressed or implied, on behalf of the other Party except as
provided in Section 4(L)(i) below, or to act on his own
account. Except as expressly provided herein, Principal shall bear
all risk of loss for damaged, lost, defective or non-conforming
merchandise purchased by Principal under this Agreement.
2.2 Principal acknowledges and
agrees that Agent may engage sub-agents to perform some or all
Agent’s services hereunder, provided, however, that in no
event shall the relationship between the Agent and sub-agent result
in either Party becoming a Principal or seller of Merchandise from
the other. Agent shall advise Principal in writing of the
appointment of any sub-agents who may perform services under this
Agreement. Further, Agent shall be solely responsible to ensure
that its sub-agents strictly adhere to the terms and conditions of
this Agreement and to pay all remuneration payable to its
sub-agents.
3. TERM AND
TERMINATION
3.1 TERM. The term of this Agreement
shall commence on the Effective Date and, unless sooner terminated
as provided herein, shall continue in full force and effect for an
initial term of one (1) year (the “Initial Term”),
and thereafter shall remain in force until terminated in writing by
either Party upon sixty (60) days prior written notice to the
other, provided, however, that, in any event, the confidentiality
provisions of this Agreement shall remain in full force and effect
in perpetuity as to any Confidential Information disclosed
hereunder prior to the date of expiration or termination of this
Agreement.
3.2 CONDITIONS FOR TERMINATION BASED
ON CAUSE; NON-PERFORMANCE. Either Party may suspend its performance
or terminate this Agreement in the event either Party fails to
perform any material term or condition of this Agreement and the
defaulting Party does not cure such failure within thirty
(30) days after written demand by the other, five
(5) days for an Agent delay in meeting a delivery schedule
default; or immediately upon written notice at any time upon
occurrence of any of the following events: (a) the other Party
(i) becomes insolvent; (ii) enters into or files a
petition, arrangement or proceeding seeking an order for relief
under bankruptcy laws of the United States; (iii) enters into
a receivership for any of its assets; or (iv) enters into a
composition with or assignment for the benefit of its creditors. If
such default remains uncured after thirty (30) days (or five
days, as the case may be), the aggrieved Party may terminate this
Agreement by sending further notice to such effect, effective
immediately. Any failure by Agent in the performance of its duties
and obligations under this Agreement, which is not the result of an
excusable delay as provided in Section 15 herein, shall be
deemed a failure by Agent to perform a material term or condition
of this Agreement. In the event of termination upon default of the
Agent, in addition to any and all other remedies permitted by law,
Principal shall be entitled to enjoy all Services rendered by Agent
through the date of termination.
3.3 EFFECT OF TERMINATION IN
GENERAL. Upon any termination of this Agreement, each Party will be
released from all obligations and liabilities to the other
occurring or arising after the date of such termination, except
that the obligations of the Parties under this Agreement, which, by
their nature, would continue beyond termination or expiration of
this Agreement, including but not limited to performance of the
Parties respective obligations with respect to any purchase order
placed by Agent for Principal pursuant to this Agreement, which
shall remain until the Merchandise has been delivered to Principal
or such order is canceled, as the case may be, shall survive
termination of this Agreement. While termination will not relieve
the Parties from liability arising from any breach of this
Agreement, neither Party will be liable to the other for damages or
any sort solely as a result of terminating this Agreement in
accordance with its terms. Termination of this Agreement will be
without prejudice to any other right or remedy of either
Party.
4. AGENT’S DUTIES AND
RESPONSIBILITIES
A. Agent shall, on behalf of and
pursuant to Principal’s directions, perform the following
Services for Principal:
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i.
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Advise
Principal of Merchandise of the types described by Principal, of
current styles and fashions, current prices, trends, material
availability, shipping conditions and availability of
production;
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ii.
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Assist
Principal in the location of qualified suppliers (the
“Suppliers”) and the arrangement of the manufacture of
the Merchandise which Principal wishes to purchase in the
Territory. Prior to engagement, Agent shall provide Principal with
a vendor profile and factory evaluation for each Supplier. For the
avoidance of doubt, the term “ qualified ” as
used in this Section 4(A)(ii) shall mean Suppliers that are
reputable, have acceptable credit ratings and have the financial
and other means to be able to meet the requirements set forth in
Principal’s written purchase order(s), where or when
available.
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iii.
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Place orders
for specified Merchandise on Principal’s behalf with
Suppliers designated by Principal by written instructions to Agent,
and negotiate the lowest possible price for such Merchandise for
the benefit of Principal;
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iv.
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Until delivery
of the Merchandise is made to Principal or its designee, Agent
shall communicate with Suppliers and monitor Supplier’s
performance to ensure that production of the Merchandise is running
according to the delivery schedule set by the Principal for each
item and inform Principal as to production status of all such
orders. Further, Agent shall use its best reasonable efforts to
assure that the Merchandise being produced by Supplier conforms
substantially, and in all material respects, to the production
specification and samples approved by Principal;
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v.
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Arrange for the
shipment of the Merchandise including preparation of all relevant
export documentation in accordance with the terms of the relevant
purchase order;
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vi.
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Use its best
efforts to monitor the transfer of Merchandise to Principal, or its
designee, assuring that said transfer of Merchandise meets U.S.
tariff classification requirements, and is delivered in the proper
quantities and in a timely manner;
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vii.
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Should
Principal fail, for any reason, to accept delivery of the
Merchandise, Agent shall use its best reasonable efforts to prevent
Supplier from disposing of the Merchandise without first removing
the labels, brand names or markings (logos) affixed to the
Merchandise which relate to Principal. Principal agrees that Agent
shall have no liability to Principal for acts or omissions of
Supplier that are not within its control.
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viii.
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Conduct INTRO,
DUPRO and FRI statistical audits on each shipment of Principal as
described in Principal’s Quality Assurance Manual.
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B. Agent shall provide an inspection
certificate to Principal for each shipment stating that:
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i.
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The quality of
materials, workmanship and styling of the Merchandise meets the
relevant quality requirements of the written specifications of the
samples upon which Principal’s purchase was based and passed
a Final Random Inspection (FRI);
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ii.
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If the
Flammable Fabric Act applies to the Merchandise, reasonable and
representative tests were conducted in accordance with said Act to
demonstrate that the Merchandise conforms in all material respects
with the flammability standards issued thereunder;
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iii.
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The Merchandise
complies with all requirements provided, in writing, by
Principal;
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iv.
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The color of
the Merchandise matches the laboratory dips upon which
Principal’s purchase was based;
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v.
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The
Merchandise, if knit, meets the weight specifications that may have
been provided by Principal; and.
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vi.
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The Merchandise
is packed in a manner specified and approved by Principal which
will insure its safe transport to Principal’s designated
destination.
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C. Agent shall assure to the best of
its ability that all invoices, affidavits, letters, papers or other
statements, written or verbal, pertaining to the Merchandise are
complete and contain no material omissions or fraudulent or false
statements in contravention of the U.S. Tariff Act of 1930, as
amended, or any other applicable law, and shall supply Principal
with the originals or copies of all such written documents promptly
upon Principal’s request. Agent shall abide by the terms of
the Foreign Corrupt Practices Act.
D. Agent shall verify that the quota
category (if any) for the Merchandise shipped is open at the time
of shipment.
E. Agent, only at Principal’s
specific written direction, shall purchase quota on
Principal’s behalf. Principal shall fund all such purchases.
Any quota benefits, whether temporary or permanent, resulting from
such purchase shall inure to the sole benefit of
Principal.
F. Agent will ensure that copies of
invoices, bills of lading, packing lists, properly authenticated
visas (when required), certificates of origin (when required),
assemblers’ declarations (when required), plus other related
and/
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or necessary documents, as well as shipping and
other export documents covering all Merchandise purchases by
Principal, are forwarded to Principal not later than fifteen
(15) days after shipment.
G. Agent represents and warrants
that it is knowledgeable and familiar with Property Rights in the
apparel and accessories industry.
H. Agent will verify, in writing,
that Suppliers are reputable, have acceptable credit ratings and
have the financial and other means to be able to meet the
requirements set forth in Principal’s written purchase
orders. Where or when available, Agent shall obtain credit reports
and/or other information regarding Suppliers or potential Suppliers
and forward such reports to Principal, upon request.
I. Undertake its best efforts to
ensure that goods ordered by Principal will not be transshipped, or
their country of origin otherwise misrepresented, including the
careful selection of each factory and ensuring that each factory
selected possesses the necessary capacity in plant, machinery, and
personnel to produce the merchandise to be ordered.
J. Ensure that upon request by
Principal, Agent will obtain, and forward to Principal, within
fifteen (15) days of receipt of the request, the following
production/country of origin verification documents for any and all
shipments of Merchandise, including, but not limited to, cutting
records, packing lists, production records, employee time clock and
other records, bills of lading, necessary to verify the country of
origin of the Merchandise, or for any other purpose.
K. Ensure that Principal and/or its
broker or representative, will be given access to Supplier’s
facilities: (i) at times designated by Principal so that it
may perform its own in-factory quality insurance inspection, and
(ii) at all reasonable times, and from time to time, and
without notice, to inspect the facilities of any Supplier
introduced to Principal by Agent, or any sub-agents (as the case
may be), under this Agreement in order that Principal may be
satisfied that the Merchandise being produced pursuant to its
written purchase order(s) is being manufactured by Supplier in
accordance with all laws and legal requirements of the country in
which the Merchandise, or any portion of the Merchandise, is
manufactured, including all laws relating to the minimum age,
hours, wages, health and safety.
L. Agent, at Principal’s
written request and direction, agrees to use its best reasonable
efforts to negotiate any and all disputes and claims arising with
any Supplier of Merchandise, and upon Principal’s written
request, consistent with Principal’s reasonable instructions,
and on Principal’s behalf, to settle any and all such
disputes and claims to the satisfaction of Principal.
M. Agent will, at all times during
the term of this Agreement, use its best reasonable efforts to
monitor and ensure that all Merchandise, or any portion thereof,
manufactured by any Supplier introduced to Principal by Agent is
produced in accordance with the written purchase order of Principal
and in strict compliance with all applicable governmental laws,
ordinances, codes, rules, regulations, programs, plans and orders
of the United States and of the country in which such Merchandise,
or any such portion thereof, is produced, including without
limitation the Occupational Safety and Health Act, the Fair Labor
Standards Act of 1938, Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, Executive Order 11246, as amended
by Executive Order 11375, along with the implementing rules and
regulations of the Office of Federal Contracts Compliance (
MINIMUM AGE, HOURS, WAGES HEALTH AND SAFETY) , and §
307 of the U.S. Tariff Act of 1930, as amended (19 U.S.C.
§1307), prohibiting the importation of goods, or any portion
thereof, manufactured by use of convict, forced or indentured labor
of any kind (including convict, forced or indentured child labor)
destined for United States markets, and Agent will notify Principal
immediately upon becoming aware of any violation thereof. Further,
Agent will ensure that all Suppliers are, at all times during the
term of this Agreement, complaint with Principal’s written
“Standards for Suppliers”.
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N. Agent will monitor all
requirements of the United States Customs Service regarding global
security, as described in the Customs-Trade Partnership Against
Terrorism (C-TPAT) Program, and will notify Prin
