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Exhibit 10.14
LICENSE AGREEMENT
AGREEMENT, effective the 31st day of July, 1986, by and between THE
XXXXXXX COMPANY, a Delaware corporation, having its principal place of business
at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter "Xxxxxxx"); and
GERBER PRODUCTS COMPANY, a Michigan Corporation, and its wholly owned subsidiary
SOFT CARE APPAREL, INC., a Delaware Corporation, having their principal place of
business at 000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx 00000 (hereinafter "Gerber").
WITNESSETH:
WHEREAS, Xxxxxxx has manufactured and sold in the United States of America
and certain export territories, CURITY-branded infants and toddler's cloth
diapers, knitwear, bedding, sleepers and hosiery products and is the owner of
the trademark CURITY, in singular and repeating form, and of a certain packaging
trade dress pertaining to the foregoing products, and
WHEREAS, Gerber will be manufacturing, promoting and selling in the United
States of America and certain other territories the products set forth in
Schedule A attached hereto and desires to acquire a license to use the CURITY
trademark, in singular and repeating form, and the certain packaging trade dress
for these products, and Xxxxxxx is willing to grant such license under suitable
conditions as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
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1. DEFINITIONS
"Licensed Products" shall mean the products sold under the Licensed
Trademarks as listed and described in Schedule A attached hereto.
"Licensed Territory" shall mean the United States of America, its
territories and possessions, including Puerto Rico and the countries specified
in Schedule B for which License Agreements, a sample copy of which is attached,
are to be executed at the same time as this Agreement.
"Licensable Territory" shall mean the countries specified in Schedule C
attached hereto, provided, however, that the countries specified in Schedule C
shall become part of the "Licensed Territory" when Xxxxxxx verifies, at Gerber's
written request, that the Licensed Trademarks (as herein defined) may be
licensable for the Licensed Products, or any of them, therein.
"Licensed Trademarks" shall mean the trademarks of words and/or devices
and the art work or copy for packaging trade dress as listed and described in
Schedule D attached hereto, to the extent such trademarks relate to the Licensed
Products.
"Quality Standards" shall mean the samples, instructions, specifications
and other quality standards relating to each of the Licensed Products and the
packaging, advertising and promotional materials used in connection therewith as
furnished or approved by Xxxxxxx from time to time during the course of the
agreement. None of the foregoing will be arbitrary or unreasonable or
arbitrarily or unreasonably applied by Xxxxxxx.
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2. GRANT
(a) Xxxxxxx hereby grants to Gerber and Gerber hereby accepts from
Xxxxxxx, a non-transferable exclusive right and license, without the right to
grant sublicenses except as expressly approved herein, in the Licensed
Territory, to use the Licensed Trademarks and any copyright Xxxxxxx owns
relating to packaging, packaging trade dress and/or advertising and promotional
materials used in connection with the Licensed Trademarks at the date of this
Agreement during the term of this Agreement on and in connection with Gerber's
manufacture, advertising, promotion, distribution and sale of the Licensed
Products, but only to the extent that Xxxxxxx has the Licensed Trademarks
registered for the Licensed Products or verifies that the Licensed Trademarks
are licensable for the Licensed Products on a country by country basis in the
Licensed Territory. Xxxxxxx further grants to Gerber, a non-transferable
exclusive right and license, without the right to grant sublicenses, in the
United States it territories and possessions only, to use the Licensed
Trademarks on and in connection with reusable and disposable nursing systems
including bottles and nipples for a term of three years, and Xxxxxxx agrees that
after this term for a period of two years it will not license a third party to
use the Licensed Trademarks for such products.
(b) This Grant includes the limited right of Gerber to sublicense certain
companies as specified in Schedule E attached hereto, and such further companies
in which Gerber acquires at least a 51% ownership control, or if less than 51%
ownership control, then such degree of control as Xxxxxxx approves as being
adequate. Gerber agrees to enter into an Agreement with each such sublicensee in
substantially the same form and under the same conditions as this Agreement, and
will immediately notify Xxxxxxx of each such Agreement. Gerber shall be
responsible for collection of royalty payments and for payment to Xxxxxxx.
Xxxxxx further agrees that it will not enter into
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sublicenses with any company listed in Schedule F or any further company as
provided above, until Xxxxxxx determines that such agreement is legally
enforceable in the applicable country and only if Xxxxxxx or Xxxxxx, as the case
may be, first has the opportunity to file all documents necessary to protect the
Licensed Trademarks in the country. Xxxxxxx will make the determination of the
enforceability of each such sublicense and, Xxxxxxx or Xxxxxx, as the case may
be, will file such documents necessary to protect the Licensed Trademarks in
each such country, with due diligence.
(c) While this agreement and grant relate to the Licensed Territory,
Xxxxxxx and Xxxxxx mutually agree that when and if any country in the Licensable
Territory becomes a country in the Licensed Territory as provided in the
aforesaid definitions, they will execute for each such country an agreement in
the same form and under the same conditions as the License Agreement referred to
in the definition of Licensed Territory in Section 1. If it is deemed necessary
or desirable for recordal or other purposes, Xxxxxxx and Gerber agree to execute
any other form of License Agreement which is not incompatible with the License
Agreement referred to in the definition of Licensed Territory in Section 1.
(d) If the Licensed Products are to be manufactured by a third party,
prior to such manufacture, Xxxxxxx must be provided with a letter in the form
shown in Schedule F attached hereto for a subsidiary, and in the form shown in
Schedule G attached hereto for other manufacturers. Current manufacturers used
by Xxxxxxx, as listed in Schedule I shall be deemed already approved and no
letter shall be required.
(e) Gerber shall not have the right to manufacture or sell any products
combining the Licensed Trademarks with the name or logo of another company,
except that Gerber shall have the right to use the composite xxxx of Xxxxxx and
Baby Head so long as said composite xxxx is not used
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or displayed on labels and packaging in such a way as to detract from or
dominate in any way the Licensed Trademarks. Should Gerber decide to phase out
the Licensed Trademarks to another xxxx (transitional xxxx) Gerber agrees to
submit a written plan to Xxxxxxx which will include products involved, samples
of transitional xxxx labels and packages and timing for transition to be
completed for approval by Xxxxxxx.
3. TERM
The term of this Agreement shall commence on execution of this Agreement
by both parties and shall run for a first term of ten (10) years. At the end of
this first term and each ten (10) year period thereafter, this Agreement shall
be automatically renewed for a successive ten year term, unless earlier
terminated pursuant to the provisions of this Agreement.
4. ROYALTY
(a) Gerber agrees to pay to Xxxxxxx a royalty during the first seven (7)
years of this Agreement in an amount equal to one percent (1%) for the first
three (3) years and, one-half percent (1/2%) for the succeeding four (4) years,
on the Net sales of the Licensed Products. "Net Sales" shall mean gross sales of
the Licensed Products less ordinary trade quantity discounts, and cash
discounts, promotional allowances and returns actually taken. If any Licensed
Products are sold intercompany, royalty will be paid on the Net Sales price that
the intercompany seller regularly offers to its customers for such Licensed
Products. If the intercompany seller has no Net Sales price that it regularly
offers to its customers royalty will be based on the Net Sales of the Licensed
Products as sold by the intercompany buyer to its customers.
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(b) For the first seven (7) years of this Agreement Gerber agrees to pay
to Xxxxxxx for the first three (3) years the amount of one-hundred sixty
thousand dollars ($160,000) per year and for the next four (4) years the amount
of eighty thousand dollars ($80,000) per year and such amounts are not to be
considered a payment against royalty but a payment in addition thereto. In
addition Gerber guaranties to Xxxxxxx a minimum royalty for the first three (3)
years of this Agreement of six-hundred forty thousand dollars ($640,000) per
year and for the succeeding four (4) years three-hundred twenty thousand dollars
($320,000) per year. lf, at the expiration of any year of the first seven (7)
years of this Agreement or on termination of this Agreement, the total non
royalties and royalties paid and/or payable by Gerber to Xxxxxxx are less than
those guaranteed hereunder, Gerber shall immediately pay the difference to
Xxxxxxx together with its next quarterly royalty payment.
(c) If any tax is payable, due or owing by Xxxxxxx on a royalty payment
due hereunder by or to any state and/or foreign country, Gerber shall withhold
and pay the tax on behalf of Xxxxxxx and will deduct the amount from the royalty
payment, provided that Gerber xxxxxxx Xxxxxxx with copies of such tax receipts.
(d) During the first seven (7) years of this Agreement Gerber agrees to
reimburse Xxxxxxx for all reasonable fees and costs of filing for, obtaining and
maintaining trademark registrations in the countries set forth in Schedule C,
where Xxxxxxx does not presently have any trademark registrations for the
Licensed Trademarks covering any of the Licensed Products. During the first
seven (7) years of this Agreement Xxxxxxx agrees, at its sole expense, to
maintain those trademark registrations it now has covering the Licensed
Trademarks for the Licensed Products in the Licensed Territory (as presently
constituted) and, to the extent such trademark registrations do not cover all
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of the Licensed Products, Xxxxxxx will file (if it has not already done so),
obtain and maintain new trademark registrations to cover all of the Licensed
Products if it can possibly do so. After the first seven (7) years of this
Agreement, Gerber shall reimburse Xxxxxxx for all of its reasonable costs
relating to Licensed Trademarks hereunder and its administrative activities
relating to this Agreement (including Xxxxxxx'x legal and quality control
administrative costs incurred with respect to Licensed Trademarks and Licensed
Products), recordal of the License Agreements and any other expenses incurred in
order to permit use by Gerber of the Licensed Trademarks in the Licensed
Territories. Gerber shall reimburse Xxxxxxx as follows:
1. The full amount of associates bills, including their fees and any
disbursements including governmental fees.
2. The reasonable cost of Quality Control inspections of manufacturing
facilities. Travel to be in accordance with Xxxxxxx policy. After initial
problems have been corrected it is agreed that Xxxxxxx will not inspect a
plant more than once a year unless an inspection discloses problems and
additional inspections are required.
3. The reasonable administrative costs to be paid shall be based on time
sheets kept by the Trademark Department. Charges will be two thirds of the
going rate for such work charged by law firms in Boston.
5. STATEMENTS AND PAYMENTS
(a) Within thirty (30) days after the end of the third calendar-year
quarter of 1986, and promptly by the thirtieth day of the month following each
calendar-year quarter thereafter, Gerber
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shall furnish to Xxxxxxx, accurate statements showing the Net Sales of the
Licensed Products sold by Gerber during the preceding calendar-year quarter.
(b) Royalty payments due hereunder shall be due on the thirtieth day of
the month following the calendar-year quarter in which earned (a "Royalty
Period"), and payments shall accompany the appropriate statement furnished as
required above. Such statements shall be complete in all respects, and shall
reflect all sales and shipments as to each of the Licensed Products and all
returns and all discounts. The amounts set forth in the first sentence of Clause
4(b) above will be paid in calendar-year quarterly installments. If this
Agreement commences on any day other than the first day of a calendar-year
quarter, the first calender-year quarterly installment will be prorated to
reflect only the number of days in the calendar-year quarter in which this
Agreement is in effect and the last such calendar-year quarterly payment will
similarly be prorated to reflect only the days in the calendar quarter to the
date of termination.
(c) All payments shall be in the currency of the United States except when
Gerber cannot make such payments in United States currency because, through no
fault of its own, it cannot obtain United States currency for local currency, in
which case Xxxxxxx shall have the right to request Gerber to make the royalty
payments on such amounts in local currency to whomever Xxxxxxx shall designate.
The statement shall be broken down by countries and all Net Sales shall be
stated in the currency reflected on the sales invoice, followed by the
equivalent amount for such Net Sales in United States currency, followed by the
exchange rate applied. The exchange rate applied will be the exchange rate
available on the date the payment in U.S. currency is made.
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6. AUDIT
(a) Gerber agrees to keep accurate and complete records of all
transactions relating to this Agreement, to determine the royalties payable
hereunder and to permit Xxxxxxx with reasonable frequency, full access to said
records to examine them and make copies thereof during regular business hours
whenever such inspection is requested by Xxxxxxx. Such examination will not
unreasonably disrupt Gerber's normal business activities and shall encompass all
records including Quality Control records of any sublicensees.
(b) In the event that any such audit reveals an overpayment or
underpayment by Gerber, Gerber, if an underpayment and Xxxxxxx, if an
overpayment, shall immediately remit payment to the other party the amount of
such underpayment or overpayment plus interest calculated at the rate of one and
one-half (1 1/2%) percentage points above the prime rate charged by The Bank of
Boston per annum, compounded daily, calculated from the date such payment was
actually due until the date when such payment is, in fact, actually made.
Further, in the event that any such underpayment is greater than $10,000 for the
United States or $5,000 for each foreign country for any royalty period, Gerber
shall reimburse Xxxxxxx for the costs and expenses of such audit for the
applicable country.
(c) Gerber acknowledges that for the protection of the Licensed
Trademarks, Xxxxxxx must be informed of all Licensed Products being sold under
the Licensed Trademarks and the countries in which they are being sold. Gerber
agrees, when royalty payments are no longer to be paid, it shall continue to
keep accurate and complete records of all transactions, submit quarterly
statements to Xxxxxxx and permit inspection of the books as provided for in 6(a)
above.
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7. QUALITY CONTROL, NOTICES, APPROVALS AND SAMPLES
(a) Gerber agrees to use the Licensed Trademarks only in relation to the
Licensed Products manufactured in accordance with the Quality Standards. Xxxxxxx
will not require Gerber to meet Quality Standards, higher than the standards of
quality of similar products presently being manufactured and shipped by Xxxxxxx
Consumer Baby Products Division and Gerber will maintain in such similar
products that it sells under the Licensed Trademarks at least the same standards
as the products presently being shipped by Xxxxxxx Consumer Baby Products
Division. Such quality will be measured against the written Standards of Quality
currently being used by Xxxxxxx.
(b) Gerber agrees that the Licensed Trademarks will appear in the Xxxxxxx
alphabet, a copy of which is attached hereto, and should it desire to change the
same it must obtain Xxxxxxx'x written approval to do so. Gerber further agrees
it will use the Xxxxxxx alphabet only for the Licensed Trademarks and will not
use it with respect to any other trademark or printed material.
(c) As soon as practicable prior to the commencement of the manufacture of
a new Licensed Product, Gerber shall submit to Xxxxxxx at Xxxxxx'x cost, for
approval by Xxxxxxx, the specifications for the proposed new Licensed Product
and complete layouts of proposed advertising, promotional and packaging
materials showing exactly how the Licensed Trademarks and wording will be used
including such notices as may be required by sections 8(d) and (e) herein.
Xxxxxxx reserves the right to disapprove of any advertising and/or labeling
which it deems in its reasonable discretion to be harmful to its business or
reputation. It is understood and agreed that Licensed Products and advertising,
promotional and packaging material therefor which Xxxxxxx Baby Products Division
is using as of the date of this Agreement listed in Schedule H attached hereto,
are deemed previously approved with the exception of such that may display
Curity as a tradename. It
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is further understood that this material will be changed to indicate CURITY is a
Licensed Trademark and such change is subject to approval by Xxxxxxx.
(d) Gerber agrees that upon execution of this Agreement all use of Curity
as a tradename shall cease, including such practices as answering the telephone
CURITY, in television commercials, and all other tradename usage. Xxxxxxx agrees
that for a period of two years, from the date of this Agreement television
commercials that are made and have been shown, may continue the use of CURITY as
a tradename but, there will be no further tradename use in future television
commercials. Gerber further agrees not to use such terminology as appears on
current packaging of Xxxxxxx such as "from the Makers of Curity diapers" and
"from the Makers of Curity products". It will cease this and similar use
references on packaging and in promotional and other materials except it may
continue to sell current packaging containing The Xxxxxxx Company name and such
uses as set forth in the preceding sentence. Xxxxxxx agrees Gerber may use the
terminology "from the Makers (Manufacturers) of CURITY gauze diapers,
childrenswear, children's apparel, or children's bedding" on packaging for
Schedule A products, subject to such products meeting the Quality Standards, and
may also use the same in advertising and promotional material used in connection
with the sale of Schedule A products. Further, subject to proper usage, Gerber
may use the terminology of the preceding sentence on stationery, invoices, and
the like of Soft Care Apparel, Inc.
(e) Any approvals or consents are to be given in writing by Xxxxxxx under
this Agreement, and if not given within fourteen (14) working days after receipt
by Xxxxxxx shall automatically constitute approval by Xxxxxxx. Such approvals
and consents will not be unreasonably or arbitrarily withheld.
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(f) Gerber agrees that if it no longer is making more than token sales of
all Licensed Products under the Licensed Trademarks, it will so notify Xxxxxxx
and if in a period of five (5) years, sales have not resumed Xxxxxxx shall have
the right to cancel this Agreement at the end of such five year period.
Notwithstanding anything to the contrary in this Agreement, Xxxxxxx shall have
the right to sell such Licensed Products in such quantity as may be necessary to
maintain in any of the Licensed Territory the Licensed Trademarks, or take any
other action required to protect the integrity of the Licensed Trademarks.
(g) Except with respect to any work or services performed by Xxxxxxx,
Gerber warrants the Licensed Products shall be suitable for their intended
purpose; that no injurious, poisonous, deleterious or toxic substance, material,
paint or dye will be used in or on the Licensed Products; that the Licensed
Products will not be inherently dangerous to the users thereof; and that the
Licensed Products will be manufactured, sold and distributed in strict
compliance with all applicable laws and regulations.
(h) Upon commencement of its manufacture of any Licensed Products not
being sold at the effective date of this Agreement, Gerber agrees to furnish to
Xxxxxxx for final written approval samples (one size and color for each style
only) not to exceed six (6) each of the Licensed Products, together with proofs
of the containers, labels, advertising, publicity and display material, except
for such Licensed Products as are deemed approved pursuant to Section 7(c) and
7(e) above. Gerber shall not depart in any material respect without the prior
written approval of Xxxxxxx, from the samples and proofs previously approved by
Xxxxxxx. Gerber will furnish additional samples (one size and color for each
style only) to Xxxxxxx upon reasonable request but it is understood that these
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additional samples will be limited to six (6) in any calendar quarter. Xxxxxxx
agrees not to sell any samples submitted to it by Gerber.
(i) If Xxxxxxx needs additional samples of Licensed Products for Quality
Control purposes, Gerber agrees to sell to Xxxxxxx at the current list price
upon receipt of a written purchase order therefor (which Licensed Products sold
to Xxxxxxx hereunder shall not be resold).
(j) To assure that the provisions of this Agreement are being observed,
Xxxxxxx shall have the right, at all reasonable times, to inspect the finished
Licensed Products in relation to which the said Licensed Trademarks are to be
used, as well as the methods of manufacture of such Licensed Products, on the
premises of Gerber, and elsewhere as Xxxxxxx considers necessary to carry out
the purposes of inspection as part of appropriate quality control and so long as
such inspections are made during Gerber's normal business hours and do not
unreasonably disrupt or interfere with Gerber's normal business routines. Gerber
agrees to provide in any sublicenses that Xxxxxxx shall have this right to go on
the premises of Gerber sublicensees. Xxxxxxx'x request to make such inspections
shall not be unreasonably or arbitrarily rejected.
(k) In the event that the Quality Standards and/or trademark, usage and
notice requirements herein referred to are not met or, in the event that said
Quality Standards or trademark usage and notice requirements are not maintained
throughout the period of manufacture, promotion, and sale of any Licensed
Products hereunder, then, upon receipt of written notice from Xxxxxxx, Gerber
shall immediately discontinue any and all manufacture, promotion and sale, of
the Licensed Products in connection with which the said Quality Standards and/or
trademark usage and notice requirements have not been met until the reason such
standard or requirement is not met has been corrected. Xxxxxxx will not
arbitrarily or unreasonably exercise its right under this provision.
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(l) Gerber agrees to immediately notify Xxxxxxx of any possible material
defect in Licensed Products. Gerber further agrees to xxxxxxx Xxxxxxx with
written reports (computer printouts) of all consumer complaints received with
respect to the Licensed Products. All such written reports that relate to
serious injury or death shall be reported by Gerber to Xxxxxxx within
forty-eight (48) hours of receipt by Gerber of notice of such serious injury or
death.
(m) If Gerber fails to provide satisfactory quality control over a
sublicensee and the quality of its Licensed Products, Xxxxxxx may give written
notice to Gerber of such failure, and if Gerber fails to cure it within thirty
(30) days after the date of receipt of the notice, or in the case of a failure
that cannot reasonably be expected to be cured within thirty (30) days fails
within thirty (30) days of the notice to initiate steps reasonably calculated to
cure such breach, Xxxxxxx shall have the right to request cancellation of the
sublicense, and Gerber will immediately upon written notice by Xxxxxxx cancel
any such sublicense.
(n) Gerber shall have the right to use Xxxxxxx'x current inventory of
labels and packaging materials and promotional materials for the Licensed
Products until such inventories are exhausted or until one year from the
execution of this Agreement, whichever event occurs first. For such purposes,
Gerber shall be deemed a contract manufacturer for Xxxxxxx and a distributor of
the Licensed Products for Xxxxxxx at no cost to either party. Such inventory
will contain some form of identification to distinguish it over inventory sold
by Xxxxxxx prior to the date of this Agreement.
8. TRADEMARK PROTECTION
(a) The License granted hereunder is conditioned upon Gerber's full and
complete compliance with all provisions of the trademark laws of the Licensed
Territory relating to the
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Licensed Products being advertised, promoted or sold therein. Gerber agrees it
will not sell Licensed Products in a foreign country of the Licensed Territory
until such time as Xxxxxxx has filed all necessary documents with the Ministry
of Public Health, Patent and Trademark Office and other governmental
authorities, necessary tor full protection of the Licensed Trademarks and
Xxxxxxx and Gerber have fully executed a corresponding License Agreement for
such foreign country. Xxxxxxx agrees to use due diligence in taking all steps
necessary for such full protection of the Licensed Trademarks before a License
Agreement is executed. Full protection does not necessarily mean Xxxxxxx must
have the Licensed Trademarks registered for the applicable Licensed Products in
the applicable foreign country. It will suffice that Xxxxxxx has verified that
it has licensable rights thereto. Gerber further agrees to keep records of and
advise Xxxxxxx as and when each of the Licensed Products is first sold in each
country in the Licensed Territory and to furnish promptly proof of such use when
requested by Xxxxxxx.
(b) Gerber agrees when requested by Xxxxxxx to execute Registered User
Applications and/or other documents locally required to be filed in connection
with this License Agreement.
(c) Except as permitted by an executed license agreement between Xxxxxxx
and Gerber, Gerber shall not sell to any jobber, wholesaler, distributor or
retail outlet if Gerber has reason to believe, or is on notice, that such
purchaser intends to export the Licensed Products outside the Licensed
Territory. If any such shipments are made, Xxxxxxx will have the right to
terminate immediately any and all Agreements relating to the Licensed Territory.
(d) Gerber agrees to affix to all Licensed Products, packages therefore,
and advertising and promotional material for the Licensed Products, notices in
compliance with applicable trademark laws. Gerber further agrees to place
required trademark notices and an ownership
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statement, as illustrated in Section 8(e) hereof, upon garments, labels and
tags, and advertising, sales promotional and other literature used with, or
devoted to, the Licensed Products or such other substantially similar statement
as shall be satisfactory to Xxxxxxx.
(e) CURITY is the trademark of The Xxxxxxx Company and is used, under
license, by Gerber Products Company.
9. OWNERSHIP OF RIGHTS
(a) It is understood and agreed that Xxxxxxx and/or its Licensor is the
sole and exclusive owner of all right, title and interest in and to the Licensed
Trademarks.
(b) Nothing contained in this Agreement shall be construed as an
assignment to Gerber of any right, title or interest in and to the Licensed
Trademarks, it being understood that all right, title and interest relating
thereto are expressly retained by Xxxxxxx except for the rights being licensed
hereunder.
(c) No license as to any products other than the Licensed Products or as
to any territory other than the Licensed Territory is being granted hereunder,
and Xxxxxxx reserves for its own use as it may determine all rights of any kind
other than the rights herein licensed to Gerber.
(d) Gerber shall not use Xxxxxxx'x name or the Licensed Trademarks other
than as permitted hereunder and, in particular, shall not incorporate the
Licensed Trademark or any of them in Gerber's corporate name or a trade name in
any manner whatsoever. Gerber agrees that in using the Licensed Trademarks, it
will in no way represent that it has any right, title or interest in or to the
Licensed Trademarks other than those expressly granted under the terms of this
Agreement. Gerber
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further agrees that it will not use or authorize the use, either during or after
the term of this Agreement, of any configuration, trademark, trade name or other
designation confusingly similar to the Licensed Trademarks and the package trade
dress.
10. GOODWILL
Gerber recognizes that all proprietary rights and goodwill in the Licensed
Trademarks shall inure to the benefit of Xxxxxxx and not Gerber. Gerber shall
acquire no property rights in said Licensed Trademarks or packaging trade dress
by reason of its use thereof, and if, by operation of law, or otherwise, Gerber
is deemed to or appears to own any property rights in said Licensed Trademarks
or trade dress, Gerber shall, at Xxxxxxx'x request, execute any and all
documents necessary to confirm or otherwise establish Xxxxxxx'x rights therein.
11. INDEMNIFICATION
Gerber hereby agrees to indemnify and hold harmless Xxxxxxx, from and
against any and all liability, claims, causes of action, suits, costs and
damages (including reasonable attorneys fees incident thereto) for which Xxxxxxx
may become liable or may incur or be compelled to pay arising out of the
manufacture, distribution, advertising, promotion and/or sale of the Licensed
Products and/or the promotional and packaging material, provided however, that
the indemnification provided by Gerber shall not apply to any such liability,
claims, causes of action, suits, costs and damages which are related solely to
any work and services performed by Xxxxxxx on behalf of Gerber. Xxxxxxx shall
have the right to defend any such action or proceeding with attorneys of its own
selection.
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12. INFRINGEMENTS
(a) Xxxxxxx and Gerber shall cooperate to protect the Licensed Trademarks
and Xxxxxxx packaging trade dress if used pursuant to this Agreement. Each shall
promptly notify the other of any apparently unauthorized use or infringement of
any rights granted to Gerber. Gerber shall have no right to make any demands or
claims, bring suit, effect any settlements or take any other action, without the
prior written consent of Xxxxxxx, in respect of such an infringement. Xxxxxxx
will not unreasonably or arbitrarily withhold its consent.
(b) Unless the parties otherwise agree in writing, monetary damages
recovered by a party hereto in connection with an infringement of any rights
granted by Xxxxxxx to Xxxxxx hereunder shall first be applied to the recoupment
of expenses, including reasonable legal expenses, incurred by the party
prosecuting the action or otherwise terminating the infringement, and the
balance of such damages shall be divided, two thirds to the party prosecuting
the action or otherwise terminating the infringement and one third to the other
party hereto. If the party prosecuting such action considers that it is legally
necessary or desirable to do so, it may join the other party hereto as a party
plaintiff and plead the damages of such party.
(c) In the event that either party elects to prosecute a legal action
pursuant to this Section 12, such party agrees, to the extent procedurally
practicable, to furnish to the other party copies of all pleadings, motions and
briefs and other papers proposed to be served or filed in connection with such
action not less than ten (10) working days prior to the contemplated date of
service or filing.
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13. ASSIGNABILITY AND SUBLICENSING
(a) The License granted hereunder is and shall be personal to Gerber and
shall not be assigned by any act of Gerber or by operation of law except that in
the first seven (7) years of this Agreement, it may be assigned by Gerber upon
the written consent of Xxxxxxx. Except as expressly provided for in this
Agreement any manufacture by a third party or sublicense or assignment to a
third party by Gerber of its rights under this Agreement without Xxxxxxx'x prior
written consent shall constitute a material breach of this Agreement.
(b) Xxxxxxx shall have the right to assign its rights and obligations
under this Agreement without the approval of Gerber, provided that the assignee
agrees to take such assignment subject to said obligations.
14. BREACH AND TERMINATION
The following termination rights are in addition to termination rights
provided elsewhere in this Agreement:
(a) If either party hereto is in breach of any of the terms and conditions
of this Agreement, and fails to cure the breach within thirty (30) days after
the date of receipt of written notice from the other party advising it of the
nature of such breach, or in the case of a breach that cannot reasonably be
expected to be cured within thirty (30) days fails within thirty (30) days of
such notice to use its best efforts and proceed with due diligence to cure such
breach, the party not in breach shall have the right to terminate this Agreement
forthwith by written notice to the party in breach. The parties agree that
following the receipt of written notice of a breach of this Agreement all due
diligence will be used to cure such breach.
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(b) Either party hereto shall have the right to terminate this Agreement
forthwith by written notice to the other party in the event that such other
party shall be adjudicated bankrupt, becomes insolvent, makes any assignment for
the benefit of its creditors, has its assets placed in the hands of a receiver,
files or has filed against it a petition in bankruptcy, or be dissolved or
liquidated. In the event that Xxxxxxx terminates this Agreement pursuant to this
Section 14(b), Gerber, its receivers, representatives, trustees, agents, or
successors shall have no right to sell, exploit or in any way deal with the
Licensed Products, except in accordance with the written consent and
instructions of Xxxxxxx.
(c) Gerber may terminate this Agreement by two years' prior written notice
to Xxxxxxx and with such notice will submit to Xxxxxxx for its approval a
detailed plan as to the phasing out of the two year use of the Licensed
Trademarks so that at the end of the period, Gerber shall have ceased all use of
the Licensed Trademarks.
(d) Except as provided in Section 14(g) below, upon the termination of
this Agreement, Gerber agrees to immediately and permanently discontinue the
manufacture, sale and distribution of the Licensed Products, and to immediately
and permanently discontinue use of the Licensed Trademarks, its special logo and
any packaging trade dress, including any adaptations thereof, which it is
granted the right to use by virtue of this Agreement and Gerber shall not
register or use the Licensed Trademarks for any goods whatsoever.
(e) Termination of this Agreement pursuant to any of the provisions hereof
shall be without prejudice to any rights which either party may have against the
other party hereto.
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(f) Gerber hereby acknowledges that its failure to cease the manufacture,
sale or distribution of the Licensed Products upon the termination or expiration
of this Agreement will result in irreparable damage to Xxxxxxx for which there
is no adequate remedy at law, accordingly, in the event of such failure, Xxxxxxx
shall be entitled to equitable relief by way of temporary and permanent
injunctions and such other relief as any court of competent jurisdiction may
deem just and proper.
(g) Anything herein to the contrary notwithstanding, subject to the
payment of royalties as provided in Section 4 above, in the event of expiration
or termination of this Agreement, excepting termination by Xxxxxxx pursuant to
Sections 14(a) or (b) hereof, for a period of six (6) months after the date of
expiration or termination, Gerber may continue to sell any Licensed Products
previously packaged and on hand at the time notice of termination is received,
provided royalties, if applicable, with respect to that period are paid and
statements are furnished for that period.
(h) Upon the expiration or termination of this Agreement for whatever
reason, or the expiration of any sell-off provided in Section 14(g) to which
Gerber may be entitled under the circumstances, Gerber shall immediately either
return to Xxxxxxx or destroy its remaining inventory of the Licensed Products
containing the Licensed Trademarks or remove the Licensed Trademarks therefrom.
Gerber will also return, destroy or remove from any dyes, molds, negatives,
plates, or other articles or implements from which any of the packaging has been
produced the Licensed Trademarks and packaging trade dress. In the event of
destruction or removal, Gerber shall furnish to Xxxxxxx evidence of such
destruction or removal, and Xxxxxxx shall have the right, at its election, to
have a representative selected by it observe any such destruction or removal.
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(i) Notwithstanding anything to the contrary, Gerber shall have the
obligation to continue to pay to Xxxxxxx the non-royalty and minimum royalty
payments as provided for in Section 4(a) hereof in the event this Agreement is
terminated prior to the end of the first seven years.
15. NO JOINT VENTURE
Nothing herein contained shall be construed to place the parties in the
relationship of partners or joint venturers, and neither Gerber nor Xxxxxxx
shall become bound by any representation, act or omission of the other.
16. WAIVERS
None of the terms of this Agreement can be waived or modified except by an
express agreement in writing signed by both parties hereto. There are no
representations, promises, warranties, covenants, or undertaking other than
those contained in this Agreement which represents the entire understanding of
the parties. The failure of either party to enforce, or the delay by either
party in enforcing, any of its rights under this Agreement shall not be deemed a
continuing waiver or a modification thereof and either party may, within the
time provided by applicable law, commence appropriate legal proceeding to
enforce any and all such rights.
17. CONFIDENTIAL INFORMATION
Xxxxxxx agrees to maintain in strict confidence, and not to disclose to
others any technical and financial information it obtains from Gerber pursuant
to this Agreement except to the extent Xxxxxxx is required to disclose such
information to the government or makes use of such information
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in any dispute with Gerber over the terms or performance of this agreement in
any court of law or equity and then only under a protective order of the court.
18. SEVERABILITY
In the event that any term or provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision and this Agreement shall be interpreted and construed as if such term
or provision, to the extent the same shall have been held to be invalid, illegal
or unenforceable, had never been contained herein.
19. INTEGRATION
This Agreement represents the entire understanding between the parties
hereto with respect to the subject matter hereof and this Agreement supersedes
all previous representations, understandings or agreements, oral or written,
between the parties with respect to the subject matter hereof and cannot be
modified except by a written instrument signed by the parties hereto.
20. NOTICES
Any notice or other communication required or permitted to be given by
either party hereto shall be mailed by first class, United States mail,
addressed as follows:
If to Xxxxxxx:
Xx. Xxxx Xxxxxx, Vice President and General Counsel
The Xxxxxxx Company
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
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If to Gerber:
General Counsel
Gerber Products Company
000 Xxxxx Xxxxxx
Xxxxxxx, XXX 00000
Notices or other communications mailed as herein provided shall be deemed
to have been given when received or when an attempt to deliver same was made as
evidenced by a duly executed return receipt.
21. TAXES
Gerber shall withhold the amount of income or other taxes, if any, payable
by Xxxxxxx and levied by governmental agencies in the Licensed Territory outside
the United States on payments payable by Gerber to Xxxxxxx pursuant to this
Agreement, and shall promptly effect payment thereof to the appropriate
authority. Gerber shall transmit to Xxxxxxx within thirty (30) calendar days
after such payment, or receipt by Gerber of such official tax receipt, a copy of
the official tax receipts or other documentary evidence issued by said tax
authority sufficient to enable Xxxxxxx to support a claim for United States
income tax credits, if any, in respect of any such taxes so paid. Gerber shall
make its best effort to obtain tax receipts. Gerber agrees to indemnify and hold
Xxxxxxx harmless to the extent it is permissible under law from any governmental
claim regarding tax withholding due to Gerber's failure to perform in accordance
with this Section 21. Xxxxxxx shall be responsible for notifying Gerber of any
exemptions, treaty provisions, exclusive claims, special tax rates or other
adjustments available or claimed by Xxxxxxx.
22. CAPTIONS
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The captions used in connection with the paragraphs and subparagraphs of
this Agreement are inserted only for purpose of reference. 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.
23. GOVERNING LAW
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the day and year first above written.
THE XXXXXXX COMPANY
By /s/ Xxxx Xxxx [sic]
--------------------------------------
Title Vice President
--------------------------------------
GERBER PRODUCTS COMPANY
By /s/ Xxxxxxx X. Xxxxxx [sic]
--------------------------------------
Title Executive Vice President
--------------------------------------
SOFT CARE APPAREL, INC.
By /s/ Xxxxxxx Xxxxxx [sic]
--------------------------------------
Title President
--------------------------------------
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SCHEDULE A
Licensed Products
Categories Licensed to Gerber
These categories consist of products to be worn by or used for infants and small
children who wear sizes up to 6X/7.
CLOTH DIAPERS AND DIAPER LINERS
UNDERWEAR such as shirts, one-piece underwear, two-piece underwear, vinyl pants,
nylon pants, training pants, underpants, briefs, thermal knit shirts, hip
huggers, bikini and diaper shirts.
OUTERWEAR such as bonnets, bibs, vests, sweaters, gloves coats, jackets, hats
and snowsuits.
PLAYWEAR such as vests, slacks, pants, shirts, dresses, blouses, swimsuits,
overalls, rompers, creepers, tank tops, pramsuits, halters, swimwear, coverups
and culottes.
HOSIERY such as booties, tights, socks and leotards.
SLEEPWEAR such as gowns, kimonos, pajamas, blanket sleepers, dorm shirts, night
gowns, coveralls, sacques, sleep 'n play sets, robes and baby dolls.
LINENS such as towels, washcloths and hooded towels for infants and children.
BEDDING
This category includes crib sheets, comforters, pillows, dust ruffles, bassinet
sheets, port-a-crib sheets, blankets, receiving blankets, mattresses, crib pads,
quilts, pillow covers xxxxxxx bags and bumper pads.
OTHER PRODUCTS
This category includes diaper stackers, wall hangings, diaper receptacles,
fabric baby carriers and infant car seat cover.
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SCHEDULE B
Licensed Territory
Argentina Japan
Austria Malawi
Barbados Mexico
Benelux Netherland Antilles
Brazil New Zealand
Canada Nicaragua
Colombia Panama
Costa Rica Peru
Denmark Philippines
Dominican Republic Singapore
Ecuador South Africa
Egypt Spain
El Salvador Sweden
Finland Switzerland
France Taiwan
Germany W. Transkei
Greece Trinidad
Guatemala United Kingdom
Guyana Uruguay
Hong Kong Venezuela
Italy Zambia
Jamaica
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SCHEDULE C
Licensable Territory
COUNTRY COUNTRY COUNTRY
Abu Dhabi Iraq Poland
African & Malagasy Union Ireland Portugal
Algeria Israel Rhodesia
Angola Xxxxxx Xxxxx
Australia Kenya Sarawak
Bahamas Korea Saudi Arabia
Bahrain Kuwait Sierra Leone
Belize Lebanon Sudan
Belgium Lesotho Surinam
Bermuda Liberia Swaziland
Bolivia Libya Syria
Botswana Luxembourg Tangiers
Chile Malaya Thailand
China Malaysia Tobago
Cyprus Mali Togo
Ethiopia Malta Tunisia
Fiji Islands Monaco Turkey
Haiti Morocco USSR
Honduras Newfoundland Viet Nam
Iceland Nigeria Yemen
India Norway Virgin Islands
Indonesia Pakistan Yugoslavia
Iran Paraguay
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January 19, 1996
Xx. Xxxxx Xxxxxxx
The Xxxxxxx Company
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Re: Curity Trademark License Agreement
Dear Xx. Xxxxxxx:
This letter sets forth the terms and conditions pursuant to which The Xxxxxxx
Company (Xxxxxxx) consents for all purposes under the terms of the License
Agreement, dated July 31, 1996 (License Agreement), among Xxxxxxx, Gerber
Products Company ("GPC"), and Gerber Childrenswear, Inc. (GCI) (successor to
Soft Care Apparel, Inc., and collectively with GPC under the License Agreement
"Gerber") to the transfer of the stock of GCI to GCIH, Inc. and the assignment
of the License Agreement from Gerber to GCI:
1. GPC, GCI and GCIH, Inc. agree that all the worldwide rights int eh Curity
xxxx under the License Agreement for the Licensed Products of "outerwear"
and "playwear" as those Licensed Products are more fully described in
Schedule A to the License Agreement, shall immediately revert to Xxxxxxx
and that GPC, GCI and GCIH, Inc. shall retain no rights in the Curity xxxx
to those categories.
2. GCI and GCIH, Inc. agree to provide to Xxxxxxx within four months of the
date of this letter, a business plan setting forth in reasonable detail
use of the CURITY xxxx on hosiery, linens, bedding and other products as
those Licensed Products are more fully described in Schedule A of the
License Agreement. GCI, GCIH, Inc. and Xxxxxxx agree to negotiate in good
faith to mutually determine whether the Curity license for all or any of
these categories will remain with GCI under the terms of the License
Agreement or whether the Curity trademark rights for all or any of these
Licensed Products will revert to Xxxxxxx, it being understood that the
parties intend that such right shall revert in full to Xxxxxxx if the
aforesaid plan fails to provide for "use in commerce" of the CURITY xxxx
with respect to all or any of the Licensed Products, or -- if such plan
does so provide -- if GCI fails at any time thereafter to "use in
commerce" the CURITY xxxx on any of the aforesaid Licensed Products for a
consecutive period of six (6) months. The phrase "use in commerce" shall
have the meaning set forth at 15 USC 1127, Title X, Section 45.
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Xx. Xxxxx Xxxxxxx
January 19, 1996
3. GPC, GCI and GCIH, Inc. agree that, without in any way narrowing Xxxxxxx'x
rights under Section 13(a) of the License Agreement, any subsequent
transfer of the rights in the License Agreement to any third party who
does business in competition with k\at the time of such transfer shall
require Xxxxxxx'x prior written consent.
4. Xxxxxxx acknowledges that, to its knowledge as of the date hereof, (i)
neither GPC nor GCI is in breach of the License Agreement and (ii) the
operation of GCI's business as currently conducted does not give rise to a
right of termination of the License Agreement by Xxxxxxx under paragraph
14 thereof.
5. GPC, GCI and GCIH acknowledge and agree that in connection with the sale
of GCI and the execution of this License Agreement, GPC's rights under the
License Agreement shall herewith cease and hereafter be null and void, and
that GCI shall hereafter be the sole licensee under the License Agreement.
The parties below have each, by the signatures of their respective duly
authorize representatives accepted the terms and conditions set forth herein.
Please evidence your agreement to the above by signing below and returning, via
facsimile, a signed copy to the attention of Xxxx X. Xxxxx at Xxxxxxxx & Xxxxx,
fax number (000) 000-0000.
* * * *
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Xx. Xxxxx Xxxxxxx
January 19, 1996
Sincerely,
GERBER PRODUCTS COMPANY
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Title:
GERBER CHILDRENSWEAR, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Title:
GCIH, INC.
By: /s/ Xxxxxxx Solar
---------------------------------
Title:
Agreed:
THE XXXXXXX COMPANY
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Title: Secretary and Associate
General Counsel
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