LICENSE AGREEMENT
This AGREEMENT made as of February 23, 2001, (the Agreement"), between
Harrow Enterprises, Inc., a Nevada corporation with its principal place of
business located at 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Licensor") and
Global Home Marketing, Inc. a Nevada Corporation, with its principal place of
business located at 0 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ("Licensee").
The Licensor is the owner of the entire right, title and interest to the
trade names and trademarks set forth on Exhibit A to this Agreement (the
"Trademarks").
Licensee desires to use, and to obtain from Licensor the right, license and
privilege to use the Trademarks in the territory described in Exhibit B to this
Agreement (the "Territory") in conjunction with the manufacture, sale and
distribution of the product categories described in Exhibit C to this Agreement
(the "Licensed Goods"), and the Licensor is willing to grant such license on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants of the parties and
for other good and valuable consideration, receipt of which is hereby
acknowledged by the Licensor, the parties hereto agree as follows:
1. License. Licensor grants to Licensee an exclusive right and license to
use the Trademarks in the Territory, under the state and federal law and under
the auspices and privileges provided by any registration covering the
Trademarks, on the Licensed Goods. It is expressly agreed between the parties
that, except as may be provided in any separate license agreement between
Licensor and Licensee with respect to the use of the Trademarks in conjunction
with other goods, the Licensor retains the exclusive right to use or license the
use of the Trademarks in connection with the manufacture, sale and/or
distribution of goods other than the Licensed Goods
2. Term. The term of this license with respect to each separate product
category of Licensed Goods shall commence upon receipt of the initial Royalty
payment set forth in Exhibit D to this Agreement (the "Effective Date"). The
license granted hereby shall continue thereafter on a year-to-year basis unless
(i) terminated by Licensee upon written notice to Licensor given not less than
ninety (90) days prior to the end of any "License Year" (as defined below) or
(ii) terminated by the Licensor if, after making the election referred to above,
Licensee shall have failed to generate a minimum of $100,000 of aggregate "Gross
Sales" (as defined below) per product category of Licensed Goods during any
License Year. Notwithstanding the foregoing, however, if Licensee shall have
failed to generate minimum aggregate Gross Sales for any License Year, as
required in the preceding sentence, but Licensee shall nonetheless elect to pay
to Licensor an amount equal to the "Royalties" (as defined below) which would
have been payable to Licensor had Licensee generated the required minimum
aggregate Gross Sales of Licensed Goods for such License Year, as provided
above, then Licensee shall be deemed to have generated the minimum aggregate
Gross Sales for such License Year as required hereunder and Licensor shall have
no right to terminate this license by reason of Licensee's failure to generate
minimum aggregate Gross Sales for such License Year.
For purposes of this License, a "License Year" shall mean the 12 month
period commencing on the Effective Date and each consecutive 12 month period
thereafter.
3. Quality of Goods. Licensee agrees to maintain the quality of goods sold
under the Trademarks commensurate with the business position of the parties
involved. Licensor reserves the right, upon reasonable notice, to enter the
premises of Licensee and inspect the quality of goods manufactured, sold and/or
distributed by Licensee under the Trademarks to insure that the quality of said
Licensed Goods is maintained.
Licensee agrees to allow Licensor's authorized agents to inspect said
Licensed Goods manufactured, sold and/or distributed by Licensee under the
Trademarks at any time desired by Licensor upon reasonable notice and during
Licensee's regular business hours.
In the event that Licensor shall find that the quality of the Licensed
Goods has not been maintained by Licensee as required in this Paragraph 3 above,
Licensor shall notify Licensee in writing of any such dissatisfaction with the
quality of said Licensed Goods and Licensee shall have thirty (30) days in which
to bring the quality of such Licensed Goods up to a level reasonably
satisfactory to Licensor. If Licensor's complaints are such that a remedy or
cure cannot reasonably be completed within said thirty (30) day period, then
Licensee shall commence to cure such dissatisfaction within such thirty (30)
period and shall thereafter diligently and continuously take all reasonable
steps to effect such cure or remedy. In the event that Licensee shall fail to
perform its obligation to maintain the quality of any Licensed Goods and shall
fail to cure such failure as hereinabove provided, Licensor shall have the right
to terminate or suspend Licensee's right to manufacture, sell and/or distribute
such Licensed Goods so long as the quality thereof shall be below acceptable
standards, but nothing herein shall be deemed to terminate, suspend or otherwise
affect Licensee's continued right to manufacture, sell and/or distribute any
other Licensed Goods which shall be of a quality which is consistent with
Licensee's obligations hereunder.
4. Ownership of the Trademarks. The parties agree that Licensor shall
retain full ownership of all rights and title in and to the Trademarks, subject
only to the rights and license granted to Licensee hereunder or under any other
license agreement between the parties.
5. Use of Trademarks. Licensee shall, upon request, provide Licensor with
representative samples of literature, brochures, signs and advertising materials
prepared by the Licensee bearing the Trademarks at least 15 days prior to the
first use thereof. If Licensor reasonably finds any of said material
objectionable, notice of objection citing specifics shall be given to Licensee
within eight (8) days after receipt of the materials by Licensor. If the parties
cannot resolve the objections among themselves, the matter shall be submitted to
arbitration pursuant to Paragraph 18 hereof. When using the Trademarks under
this Agreement, Licensee shall use its best efforts to comply substantially with
all laws pertaining to trademarks in force at any time in any country in which
said Licensed Goods are sold. This provision includes compliance with trademark
marking requirements of the country in which said Licensed Goods are sold.
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6. Covenants of Licensor and Licensee.
6.1. So long as this license shall remain in full force and effect, the
Licensor shall not use or grant others the right to use the Trademarks on or in
connection with Licensed Goods in the Territory.
6.2. Licensor agrees to obtain and maintain at its sole cost and expense
the federal registration of the Trademarks in the United States in full force
and effect, including the filing of any renewals, declarations or affidavits of
use, or, if appropriate, to file new applications for registration. Upon written
request of the Licensee, Licensor shall use its best efforts to procure the
registration of the Trademarks or any other trademark (including any label or
logo) relating to the Licensed Goods which incorporates or includes the
Trademarks in any jurisdiction outside of the United States, but in the
Territory, in which Licensee shall have given written to Licensor of its bona.
fide intention to manufacture, sell and/or distribute the Licensed Goods, and
shall maintain the same in full force and effect, including the filing of any
renewals, declarations or affidavits of use; provided, however, that all
reasonable costs and expenses associated with any such foreign registrations or
other filings with respect to the Trademarks shall be advanced by the Licensee
for the account of Licensor and Licensee shall recoup such costs and expenses
only by offsetting or deducting the same from any royalties which may be payable
by Licensee to Licensor on account of the sale of any goods bearing the
Trademarks, or any related trademarks licensed by Licensor to Licensee under
this and/or any other license agreement or arrangement between Licensor and
Licensee, or from any other monies owing by Licensee to Licensor hereunder or
under any other arrangement or agreement between the parties. Without limiting
the generality of the foregoing, Licensor shall execute all documents reasonably
requested by the Licensee for filing and prosecuting such applications for
registration of the Trademarks in any jurisdiction throughout the world in which
Licensee has a bona fide intention to manufacture, sell and/or distribute the
Licensed Goods. Licensor shall also give to Licensee all assistance Licensee
reasonably requires including the giving of testimony in any suit, action or
proceeding in order to obtain, maintain and protect the Licensee's rights
therein and thereto. If Licensor shall not so execute or deliver any such
instruments after reasonable opportunity to do so, Licensee shall have the right
to do so in Licensor's name, place and stead and Licensee is hereby irrevocably
appointed as Licensor's attorney in fact for such purpose, which power is
coupled with an interest.
7. Use of Confusingly Similar Marks. Licensee agrees not to adopt and use,
without Licensor's written consent, any marks that are confusingly similar to
the Trademarks; provided, however, that Licensee may adopt any trademark, logo
or label which includes or incorporates the Trademarks in conjunction with its
sale and distribution of Licensed Goods.
8. Royalties. Licensee shall pay to Licensor the initial Royalty payment
and the percentage royalties based upon "Gross Sales" per product category of
Licensed Goods sold by Licensee during each License Year in (a) the United
States and Canada, and (b) all other countries throughout the world, as set
forth on Exhibit D annexed hereto (collectively, the
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"Royalties") or at such other percentage rates as may be agreed between Licensor
and Licensee with respect to specific product categories. Royalties shall be
payable quarterly within forty-five (45) days following the end of each quarter
during the License Year.
As used herein, the term "Gross Sales" shall mean (i) the invoice price
charged by Licensee on account of the sale of Licensed Goods to customers,
sublicensees, distributors or others without any deduction, or (ii) all
royalties from sublicensees pursuant to any sublicense agreement or arrangement
with respect to the manufacture, sale and/or distribution of the Licensed Goods
9. Royalty Reports. Licensee agrees to make written reports to Licensor
quarterly during each License Year of the term hereof with respect to any
Royalties payable to Licensor as provided in Paragraph 8 above. Such written
reports shall include an accounting of all Gross Sales of Licensed Goods during
the preceding quarter and upon which Royalties are payable hereunder. Licensee
also agrees to make a written report to Licensor within forty-five (45) days
after any expiration or termination of this license, stating in such report an
accounting of all Gross Sales upon which Royalties are payable hereunder, but
which have not been previously reported to Licensor.
10. Records. Licensee shall obtain and keep records showing all Gross Sales
of Licensed Goods and any Royalties due and/or paid as set forth in Paragraph 8
of this license in sufficient detail to enable the Royalties payable to be
determined and Licensee agrees to permit such records to be examined from time
to time upon reasonable notice to the extent necessary to verify the reports
provided for hereunder. Such examination to be made at the expense of Licensor
by any auditor appointed by Licensor who shall be acceptable to Licensee, or, at
the option and expense of Licensee by a certified independent public accountant
appointed by Licensor and approved by Licensee, which approval shall not be
unreasonably withheld.
11. Default and Termination. Licensor shall have the right to terminate
this Agreement by reason of a material breach by Licensee of its duties and
obligations hereunder provided that such material breach shall not have been
remedied or cured within thirty (30) days following receipt by Licensee of
written notice thereof from Licensor, or, if Licensor's complaint of a material
breach is such that a remedy or cure cannot reasonably be completed within said
thirty (30) day period, then Licensee shall have commenced to cure such material
breach within such thirty (30) day period and shall thereafter have diligently
and continuously taken all reasonable steps to effect such remedy or cure. Such
termination shall be without prejudice to any rights that Licensor may otherwise
have against Licensee for damages or otherwise.
Notwithstanding any other provision of this Agreement to the contrary,
this Agreement shall be deemed to constitute a separate license agreement with
respect to each product category of Licensed Goods and this Agreement shall be
interpreted in such a manner that the termination of this Agreement with respect
to any one product category shall not be deemed a termination of this Agreement
with respect to any other product category.
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In the event of a breach or threatened breach by either party of its
obligations under this license, each party acknowledges that the other party may
not have any adequate remedy at law and may be entitled to seek such equitable
and injunctive relief as may be available to restrain the other party from any
violation of the provisions hereof. The prevailing party in any such proceeding
shall be entitled to reimbursement from the other party of any expenses
(including, without limitation, reasonable attorney's fees) incurred in
connection with such proceeding. Nothing herein shall be construed as
prohibiting either party from pursuing any other remedies available for such
breach or threatened breach, including the recovery of damages.
12. Effect of Termination or Expiration. Upon and after the expiration or
termination of this license, all rights granted to Licensee hereunder shall
forthwith revert to Licensor and Licensee shall refrain from any further use of
the Trademarks on Licensed Goods pursuant to this Agreement; provided, however,
that Licensee may, for a period of 180 days after the expiration and termination
of this license, dispose of any Licensed Goods remaining in Licensee's inventory
or in process of manufacture at the date of termination of this license. In any
such event, Licensee shall continue to pay Royalties and furnish statements with
respect to any period subsequent to the termination of this license in
accordance with the terms of this license as though the same were still in
effect.
13. Infringement. In the event that either party shall learn or be advised
that the Trademarks are being infringed by a third party in connection with the
sale of Licensed Goods or any other goods under circumstances in which there is
created a likelihood of confusion with the Licensed Goods or which could
diminish the value of the Trademarks, the party having knowledge thereof shall
promptly notify the other party of such infringement. Licensor shall have the
right to commence an action for infringement, to select counsel and control the
prosecution of such action (except that Licensee shall have the right to
participate with its own counsel, at its own cost and expense). Should Licensor
commence any such action for infringement, Licensor and Licensee shall share
equally all damages recovered from that suit after Licensor's costs and expenses
of suit have been recouped. In the event that Licensor does not desire to xxx
for infringement, it shall so notify Licensee promptly that it does not desire
to xxx, and Licensee shall thereafter have the right, but not the obligation, to
xxx for infringement in its own name or in the name of Licensor and Licensee may
retain all damages recovered therefrom. The party bringing the infringement suit
shall be responsible for all costs and expenses of the suit and shall have the
right to select counsel and control the prosecution of such suit. Licensee and
Licensor agree to cooperate in any such suit for infringement, at no expense to
the other, and provide any needed assistance to the other party. The foregoing
notwithstanding, the parties may otherwise agree in writing to share the costs
of and recoveries from any such suit.
14. Indemnification. Licensor assumes no liability to Licensee or to third
parties with respect to the sale of Licensed Goods by Licensee under the
Trademarks, and Licensee shall indemnify Licensor against losses incurred by
claims of third parties against Licensor involving the sale by Licensee of
Licensed Goods.
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15. Master License. Licensee may sublicense and/or subcontract the
manufacture, sale and/or distribution of Licensed Goods, provided that (i)
Licensee shall, directly or indirectly, participate with its sublicensee or
otherwise be involved with its sublicensee in the manufacture and/or sale and/or
distribution of such Licensed Goods and (ii) any sublicense shall be consistent
with this license. However, Licensee shall not have the right to grant to third
parties licenses relating to the Trademarks on any products other than Licensed
Goods without the express written permission of Licensor, except pursuant to any
other license agreement or other arrangement between the parties. 16. Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or three (3) days after being sent by
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by telecopy with oral confirmation, addressed as follows or to such
other address of which the parties may have given notice in accordance with this
paragraph: In the case of Licensor:
Xxxxxx X. XxXxx
Harrow Enterprises, Inc.
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Xx Xxxxxx
00000 Xxx Xxxxxx
Xxx Xxx, Xxxxxxxxxx 00000
In the case of Licensee:
Xxxxx Xxxxx
Worldwide Services
0000 Xxxxxxxx Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
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15. Master License. Licensee may sublicense and/or subcontract the
manufacture, sale and/or distribution of Licensed Goods, provided that (i)
Licensee shall, directly or indirectly, participate with its sublicensee or
otherwise be involved with its sublicensee in the manufacture and/or sale and/or
distribution of such Licensed Goods and (ii) any sublicense shall be consistent
with this license. However, Licensee shall not have the right to grant to third
parties licenses relating to the Trademarks on any products other than Licensed
Goods without the express written permission of Licensor, except pursuant to any
other license agreement or other arrangement between the parties.
16. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or three (3) days
after being sent by registered or certified mail, return receipt requested,
postage prepaid, or transmitted by telecopy with oral confirmation, addressed as
follows or to such other address of which the parties may have given notice in
accordance with this paragraph:
In the case of Licensor:
Xxxxxx X. XxXxx
Harrow Enterprises, Inc.
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Xx Xxxxxx
00000 Xxx Xxxxxx
Xxx Xxx, Xxxxxxxxxx 00000
In the case of Licensee:
Xxxxxxx Xxxxxxxxx
Global Home Marketing, Inc.
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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and to
17. Assignability. It is mutually understood and agreed that this license
shall inure to the benefit of and be binding upon Licensor, its successors
and/or assigns, and on Licensee, its successors and/or assigns. This license and
any of the rights or obligations created herein may be assigned, in whole or in
part, by Licensee, to any party upon the written consent of Licensor, which
shall not be unreasonably withheld, and provided that Licensee is current in all
payments due to Licensor.
18. Arbitration. The parties hereby expressly agree that any controversy or
claim arising out of or relating to this license, or the breach thereof, shall
be settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA") in New York, New York, before
one (1) arbitrator selected from the panels of arbitrators of the AAA. Any
arbitration award shall be final, binding and conclusive upon the parties and
judgment rendered thereon may be entered in any court having jurisdiction
thereof. The prevailing party in any such arbitration shall be entitled to
reimbursement from the other party of any expenses (including, without
limitation, reasonable attorney's fees) incurred in connection with such
arbitration.
19. Miscellaneous. Nothing in this license shall be deemed to constitute or
create between Licensor or Licensee a partnership, association, joint venture or
agency nor shall either party have power or authority to obligate or bind the
other in any manner whatsoever, except as expressly provided for herein and
neither such party shall make any representation or warranty on behalf or for
the other party.
No change, modification, amendment, addition to this license or any part
thereof shall be valid unless in writing and signed by or on behalf of the party
to be charged therewith.
This license constitutes the entire agreement between the parties and
supersedes all prior understandings and agreements regarding the subject matter
hereof. Each of the parties acknowledges and agrees that the other has not made
and is not making and in executing this license neither party has relied upon
any representations, promises or inducements except to the extent that the same
are expressly set forth in this license.
If any clause, paragraph, section or part of this license shall be held or
declared to be void, invalid or illegal for any reason by any court of competent
jurisdiction, such provision shall be ineffective but shall not in any way
invalidate or affect any other clause, paragraph, section or part of this
license.
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]
This license shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed
therein.
IN WITNESS WHEREOF, the parties have caused this license to be signed as of
the date and year first above written.
LICENSOR:
Harrow Enterprises, Inc.
By: /s/
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LICENSEE:
Global Home Marketing, Inc.
By: /s/
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EXHIBIT A
---------
THE COLLECTIONS OF
XXXXXXXX GUCCI
EXHIBIT B
---------
The Territory includes:
Europe
EXHIBIT C
---------
Product Categories are:
Glassware, Dinnerware and Tableware
EXHIBIT D
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Initial Royalty Payment:
One million shares of the company stock restricted
type 144.-
A. Royalties:
5% of wholesale sales per product category payable quarterly with a minimum
yearly sales guarantee as follows:
1. First year--$250,000
2. Second year-- $300,000
3. Third year--$350,000
4. Fourth year--$400,000
5. Fifth year--$450,000
6. Sixth through the tenth years--$500,000
B. Term of the contract is five years with one five-year option.
1. The option will be exercised one year prior to expiration of the
initial five-year contract.
2. The first year contract will be for 18 months commencing on the
signing of the contract.
