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Exhibit 10.13
LICENSE AGREEMENT
This AGREEMENT made this 22nd day of January 1996, by and between
Gerber Products Company, a Michigan corporation with its principal place of
business at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Licensor"), and Gerber
Childrenswear, Inc. with its principal place of business at 000 Xxxxx Xxxx
Xxxxxx, X.X. Xxx 0000, Xxxxxxxxxx, X.X. 00000 ("Licensee").
WITNESSETH:
WHEREAS, Licensor is the sole and exclusive owner of the registered
trademark Gerber and baby head, and the associated registered trademarks and the
trademark registrations and pending applications as described in Exhibit A-1
hereto (the "Registered Trademarks") and common law trademark rights as
described in Exhibit A-2 hereto (the "Common Law Trademarks" and, together with
the Registered Trademarks, the "Licensed Trademarks");
WHEREAS, Licensee desires to utilize the Licensed Trademarks upon
and in connection with the manufacture, sale, advertisement, promotion and
distribution of articles as described in this License Agreement;
WHEREAS, this License Agreement is made pursuant to, and is attached
as an Exhibit to, that certain Stock Purchase Agreement, dated as of December
14, 1995 (the "Stock Purchase Agreement"), by and between Licensor and GCIH,
Inc. and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement that the parties execute and
deliver this License Agreement.
NOW, THEREFORE, in consideration of the mutual covenants which
follow, and for other good and valuable consideration, the parties agree as
follows:
1. GRANT OF LICENSE
(a) Licensed Articles. Licensor grants to Licensee an
exclusive, non-transferable, non-assignable (except as set forth in Section 19)
license to use the Licensed Trademarks solely on and/or in association with the
manufacture, offering for sale, sale, marketing, advertising, promotion,
shipment and distribution of:
(i) shoes for infant sizes 0-6 and for toddler sizes 7-13;
(ii) underwear (including but not limited to Onesies(R), Twosies(R),
Longmates(R), training pants, undershirts, briefs, panties, vests, sacks,
gowns, kimonos, union suits, diaper vests, one-piece underwear, fashion
underwear, thermal underwear, newborn caps and booties;
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(iii) sleepwear (including but not limited to blanket sleepers, growth
sleepers, pajamas (footed and non-footed), sleep 'n play, pram suits,
gowns, kimonos, sacks, 2-way sleepers and slippers);
(iv) playwear (including but not limited to creepers, two-piece sets,
three-piece sets, overalls, shortalls, coveralls, jumpers, dresses,
shirts, sweaters, pants, sweat suits, mitts and headbands sold in
conjunction with other Licensed Articles, coordinated separates, hats,
booties and shorts);
(v) bed and bath products, more specifically products typically used in a
nursery to decorate or coordinate the nursery or bedding or to bathe a
child (including but not limited to sheets, pillowcases, comforters, dust
ruffles, blankets, diaper stackers, pillows, nursing pillows, throws,
bumper pads, lap pads, changing table pads, mattress pads, headboard
covers, quilts, room borders, wall hangings, window treatments,
coordinated fabric by yard, canopies, toddler bedding, bedding sets,
burpcloths, crib rail covers, duvet covers, wallpaper, towels, bath mitts,
washcloths, robes and bath mats, but not including switchplates, night
lights, bathtubs and nursery safety items);
(vi) reusable cloth diapers and diapering apparel products (including but
not limited to reusable cloth diapers, vinyl pants, diaper covers, diaper
liners and swim diapers);
(vii) bibs;
(viii) hosiery (including but not limited to booties, socks, slipper
socks, tights and leotards);
(ix) swimwear (including but not limited to bathing suits, robes and
cover-ups); and
(x) gift sets and layettes incorporating one or more Licensed Articles;
in each case, targeted to children, in sizes newborn to size 4T, except in the
case of blanket sleepers, growth sleepers and pram suits, targeted to children
newborn to age 14 ((i) through (ix) are collectively referred to herein as the
"Licensed Articles"), as may be approved by Licensor pursuant to Section 7,
solely within the Licensed Territory ("Licensed Rights"). In addition to the
foregoing, the Licensed Articles shall include all products shipped by Licensee
at any time during the two years immediately prior to the Closing Date which
were targeted to children in the sizes indicated above.
(b) Licensed Territory.
(i) Except as set forth in (ii) below, the Licensed Rights may be
exercised only in the United States (including the military bases,
territories and possessions thereof), Canada, Argentina, Mexico and the
Caribbean (the "Licensed Territory"); provided, however, that Argentina or
Mexico shall be excluded from Licensed Territory if the aggregate annual
dollar amount of net sales (as defined below) of Licensed Articles in 1997
or in the tenth year of the Initial Term are less than $1 million for
Argentina and less than $2 million for Mexico, or if in
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Argentina or Mexico the aggregate annual dollar amount of net sales (as
defined below) of Licensed Articles in the fifth year of the Second Term
is less than the aggregate annual dollar amount of net sales of Licensed
Articles in the tenth year of the Initial Term. Except as set forth in
(ii) below, Licensee agrees that it will not make or authorize any use,
direct or indirect, of the Licensed Trademarks outside the Licensed
Territory and will not knowingly sell the Licensed Articles to persons
other than Licensor and its affiliates, who intend to, or who are likely
to, resell them in any country outside the Licensed Territory.
(ii) In the event that Licensor desires to (x) license the Licensed
Trademarks for the sale and distribution of Licensed Articles or (y) sell
the Licensed Articles bearing the Licensed Trademarks in each case in any
of the countries located in South America (except Argentina) or Central
America, Licensor hereby agrees that Licensee shall first be offered a
license for such country or countries on the same terms and conditions set
forth herein and Licensee shall have a 30-day period to notify Licensor
that Licensee wishes to enter into such license. If Licensee fails to
respond within the 30-day period or declines such offer, Licensor shall be
permitted to license any person, corporation or entity in the countries
described above with respect to the Licensed Articles provided such
license is not at a royalty rate less than the rate set forth in Section 2
hereof. If (i) Licensee agrees to the license referred to above and (ii)
with respect to Licensee's sale of Licensed Articles in Argentina,
Caribbean or Mexico, Licensee agrees that it will offer to Licensor the
right to distribute the Licensed Articles in the applicable country in any
channel of distribution in which Licensor participates in such country on
terms and conditions agreed to by Licensee and Licensor. The parties
shall use best efforts to agree on such terms and conditions within 30
days of Licensee's offer to Licensor. If the parties cannot agree on such
terms and conditions within such 30- day period, then Licensee may use
other distributors on terms and conditions not more favorable to such
distributor than those offered to Licensor by Licensee.
(c) Term.
(i) This License Agreement shall commence on the date of execution and
expire on the tenth anniversary of such commencement (the "Initial Term"),
unless it is terminated earlier pursuant to a provision hereof. If not
earlier terminated pursuant to this License Agreement, this License
Agreement shall be renewable upon expiration of the Initial Term for an
additional 5-year period (the "Second Term") if the aggregate annual
dollar amount of net sales (as defined below) of Licensed Articles
(excluding sales pursuant to the Distributor Agreement, dated the date
hereof, between the parties hereto, in the tenth year of the Initial Term
is equal to or exceeds $120,000,000, and shall be renewable upon
expiration of the Second Term for an additional 5-year period (the "Third
Term") if the aggregate annual dollar amount of net sales of Licensed
Articles in the fifth year of the Second Term is equal to or exceeds the
aggregate annual dollar amount of net sales of Licensed Articles in the
tenth year of the Initial Term.
(ii) Either Licensor or Licensee, in its sole discretion, may terminate
this License Agreement at the end of the Third Term if the terminating
party provides written notice to the non-
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terminating party not less than two years prior to the end of the Third
Term. In the event such notice is not given, this License Agreement shall
continue on a year-to-year basis until such written notice is given not
less than two years prior to the desired termination date. Following
notice of termination by the Licensor to Licensee, the royalty rate set
forth in Section 2 shall be decreased to ___* and following notice of
termination by the Licensee to the Licensor, the royalty rate set forth in
Section 2 shall be increased to ___*.
2. TERMS OF PAYMENT
(a) Rate. Licensee shall pay to Licensor as royalty, the
following amounts as a percent of net sales of Licensed Articles bearing the
Licensed Trademarks:
Years
(Beginning on
the date hereof)
___
1-6:*
7:*
8-9:*
10-11:*
12-20:*
for all years thereafter (if any):*
The term "net sales" shall mean the wholesale list price of actual customer
shipments less actual quantity and placement discounts (warehouse allowances,
damaged and defective merchandise allowances, new store allowances, promotional
discount allowances), less customer penalties, handling charges and product
testing charges, less actual returns, but no adjustments shall be made in
respect of any recalls as described in Sections 7(i) and 7(j) below nor shall
deductions be made for uncollectible accounts. No costs incurred in the
manufacture, sale, or distribution of the Licensed Articles shall be deducted
from any royalties payable to Licensor. In no event shall such deductions for
quantity and placement discounts, customer penalties, handling charges, product
testing charges and bona fide returns exceed 5% of the wholesale list price.
Notwithstanding the foregoing, royalties with respect to irregulars and
closeouts (each as defined below) sold by Licensee at prices above Licensee's
cost (as such term is defined in the Distributor Agreement, dated the date
hereof, between the parties hereto) shall be equal to one-half of the then
applicable royalty rate, and no royalties shall be due and payable on sales of
Licensed Articles to Licensor or its affiliates or on sales of irregulars and
closeouts sold by Licensee at prices equal to or below Licensee's cost.
"Irregulars" shall mean Licensed Articles which contain approved images and
complete legal notices, but with certain slight defects in the manufacture or
printing of the product. Irregulars shall not include any product which is
dangerous or hazardous, contains unapproved images or lacks a complete legal
notice. Sales of irregulars shall not exceed five percent (5%) of all sales of
Licensed Articles in any calendar year. "Closeouts" shall mean first quality
Licensed Articles discounted by twenty percent (20%) or more off the wholesale
list price for such Licensed Articles for the purpose of discontinuing sales of
the Licensed Articles. Sales of closeouts shall not exceed ten percent
_______
* The Company has requested confidential treatment for this provision from
the Securities and Exchange Commission.
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(10%) of all sales of Licensed Articles in any calendar year. Licensee will
deduct or withhold from royalty payments all taxes and fees required by law or
regulation to be deducted or withheld at the lowest rate allowed by local law or
applicable law treaty, and Licensee shall timely pay such deducted or withheld
taxes or fees to the appropriate taxing authorities and provide Licensor with
acceptable proof of payment within 45 days of payment. All payments shall be in
U.S. currency drawn on a U.S. bank. The exchange rate shall be the spot exchange
(the current rate in effect for a specific day) as published in the Midwest
Edition of the Wall Street Journal as of the date of payment.
(b) Periodic Statements. Within thirty days after the end of
each calendar quarter, Licensee shall furnish to Licensor a complete and
accurate statement, in the form attached to this License Agreement as Exhibit B,
certified to be accurate, by an officer of Licensee, showing the country of
manufacture (with respect to aggregate sales), country in which sold or to which
shipped (with respect to aggregate sales), item number, description, units sold,
wholesale list price, itemized deductions and net sales price of the Licensed
Articles distributed and/or sold by Licensee during the preceding calendar
quarter. For purposes of this License Agreement, a Licensed Article shall be
considered "sold" upon the date when such Licensed Article is billed, invoiced,
shipped, or paid for, whichever event occurs first. Such statements shall be
furnished to Licensor whether or not any of the Licensed Articles have been sold
during the quarter to which such statements refer. The amount shown in the
quarterly statements as being due Licensor shall be paid simultaneously with the
submission of such statements. If Licensee is a publicly-held corporation, upon
demand of Licensor, Licensee shall, at its own expense, furnish to Licensor a
detailed statement by an independent certified public accountant which in
conjunction with Licensee's fiscal year end, substantiates the data contained in
a quarterly royalty report or all quarterly royalty reports for that fiscal
year.
(c) Royalty Payments. The receipt and/or acceptance by
Licensor of any of the statements furnished or royalties paid to Licensor (or
the cashing of any royalty checks paid) shall not preclude Licensor from
questioning the correctness thereof at any time and, in the event that any
inconsistencies or mistakes are discovered in such statements or payments, they
shall immediately be rectified and the appropriate payment made by Licensee or
Licensor, as applicable. Licensee shall not reduce royalty payments hereunder
for any reason, including purported rights to setoff. Licensee shall pay
Licensor interest on late royalty payments at an interest rate equal to the
lesser of (i) 1-3/4% per month, or (ii) the highest rate permitted by law, in
each such case, from the date the royalty payment should have been paid to
Licensor.
3. OWNERSHIP OF RIGHTS
(a) Licensor represents and warrants, and Licensee
acknowledges, that Licensor is the sole and exclusive owner of all right, title
and interest in and to the Registered Trademarks with full right to enter into
this License Agreement.
(b) Nothing in this License Agreement shall be construed as an
assignment to Licensee of any right, title and/or interest in the Licensed
Trademarks, it being understood that
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all right, title and interest relating thereto are expressly reserved by
Licensor except for the rights being licensed.
(c) Notwithstanding Licensor's grant of Licensed Rights to
Licensee, Licensor reserves the right to use or license others to use and/or
manufacture articles similar to Licensed Articles as corporate identity items;
provided, however, that Licensor shall first offer Licensee the opportunity to
manufacture such items.
(d) No license as to any articles other than with respect to
the Licensed Articles and only as to the Licensed Territory is being granted,
such grant being subject to the limitations set forth in this License Agreement,
and Licensor reserves for use as it may determine all rights of any kind in the
Licensed Trademarks other than the Licensed Rights subject to the provisions of
Section 6.12 of the Stock Purchase Agreement. Licensee recognizes that
Angel-etts of California, Inc. ("Angel-etts") has been granted the right to use
the Licensed Trademarks for products which fall into the same general product
category as one or more of the Licensed Articles and which may be similar to but
not the same as one or more of the Licensed Articles in terms of use, function,
or otherwise, and Licensee expressly concedes that the existence of said license
does not and shall not constitute a breach of this License Agreement by
Licensor. Licensee agrees that Licensed Articles manufactured by Angel-etts
shall be submitted to Licensor for approval pursuant to Section 7. Licensor
agrees that (i) the renewal or other extension of the license with Angel-etts
shall not constitute a breach by Licensee of this License Agreement and (ii) it
will not modify such license in any way, including but not limited to the
royalty payment provisions thereof.
(e) Licensee shall not use Licensor's name or the Licensed
Trademarks other than as permitted herein, it being agreed and understood that
Licensee shall be entitled to incorporate the name "Gerber" in Licensee's
corporate or business name, during the term of this License Agreement; provided,
however, that Licensee agrees that if Licensee uses the name "Gerber" in its
corporate or business name on any product other than the Licensed Articles, it
shall use a type size which is the smaller of eight point type or the type size
necessary to comply with applicable law. Licensee agrees that in using the
Licensed Trademarks, it will in no way represent that it has any rights, title
and/or interest in and/or to the Licensed Trademarks other than those expressly
granted under the terms of this License Agreement. Licensee further agrees that
it will not use and/or authorize the use, either during or after the term of
this License Agreement, of any configuration, trademark, trade name or other
designation confusingly similar to Licensor's name or Licensed Trademarks.
(f) During the term of this License Agreement and thereafter,
Licensee shall not contest or otherwise challenge or attack Licensor's rights in
the Licensed Trademarks or the validity of the license being granted herein.
4. GOOD WILL
Licensee recognizes the value of the good will associated with the
Licensed Trademarks, and acknowledges that the Licensed Trademarks and all
rights therein, and the good
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will pertaining thereto, belong exclusively to Licensor, and that the Licensed
Trademarks has a secondary meaning in the mind of the public. Licensee agrees
that its use of the Licensed Trademarks shall inure to the benefit of Licensor
and that Licensee shall not, at any time, acquire any rights in the Licensed
Trademarks by virtue of any use it may make of the Licensed Trademarks.
5. TRADEMARK AND COPYRIGHT PROTECTION
(a) The license granted is contingent upon Licensee's full and
complete compliance with the provisions of the trademark and copyright laws
applicable in the Licensed Territory with respect to its use of the Licensed
Trademarks.
(b) Licensor shall be responsible for all fees and costs,
including attorneys' fees, to prepare and file Registered User or Permitted User
documents, and administrative expenses, associated with filing for, obtaining,
maintaining and defending trademark registrations in the Licensed Territory for
the Licensed Trademarks covering any of the Licensed Articles.
(c) Licensee shall notify Licensor in writing of any
infringements or imitations by others of the Licensed Trademarks on articles
similar to those covered by this License Agreement which may come to Licensee's
attention, and Licensor shall have 30 days to determine whether it shall take
action on account of any such infringements or imitations. Any action which
Licensor takes against a third party on account of any such infringement or
imitation shall be at Licensor's expense and any final award granted or any
settlement made shall be paid to Licensor, and Licensee shall have no claim to
such award or settlement. In the event that Licensor does not take any action
within such 30 day period, Licensee may institute any suit or take any action on
account of any such suspected infringements or imitations at its own expense
and any final award or settlement shall be paid to Licensee. Each party shall
cooperate fully with the other party whenever a party takes any action against a
suspected infringing or imitating party.
(d) Licensee agrees that neither it nor its affiliates will at
any time apply for any copyright, trademark, or patent protection which would
reasonably be expected to affect Licensor's ownership of any rights in the
Licensed Trademarks, or file any document with any government authority or take
any other action which would reasonably be expected to affect Licensor's
ownership of the Licensed Trademarks, or aid or abet anyone else in doing so. If
Licensee takes an action hereunder which has an adverse effect on Licensor's
ownership of the Licensed Trademarks, Licensee must remedy such effect within 30
days of receiving written notice thereof from Licensor or such failure will
constitute a material breach of this License Agreement.
6. INDEMNIFICATION BY LICENSEE AND PRODUCT LIABILITY INSURANCE
(a) Indemnification. Licensee agrees to defend, indemnify and
hold harmless Licensor and its affiliates and the officers, directors, employees
and agents thereof, from and against any and all suits, actions, causes of
action, claims, liabilities, judgments, punitive damages, penalties, losses,
damages, costs, and expenses (including, but not limited to, attorneys' fees),
except
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to the extent due to the fault of Licensor, made or brought against, incurred by
or rendered against Licensor or its affiliates, or the officers, directors,
employees or agents thereof, which arise out of the manufacture, distribution,
shipment, exploitation, packaging, advertising, sale or other use of the
Licensed Articles. Licensor agrees to defend, indemnify and hold harmless
Licensee and its affiliates and the officers, directors, employees and agents
thereof, from and against any and all suits, actions, causes of action, claims,
liabilities, judgments, punitive damages, penalties, losses, damages, costs and
expenses (including, but not limited to, attorneys' fees), except to the extent
due to the fault of Licensee, made or brought against, incurred by or rendered
against Licensee or its affiliates, or the officers, directors, employees or
agents thereof, which arise solely out of Licensee's use of the Licensed
Trademarks pursuant to the terms of this License Agreement. Upon the filing of
any suit, action, cause of action, or upon notice of a claim, the indemnified
party shall promptly notify the indemnifying party. The indemnifying party
shall, at the indemnifying party's cost and expense, assume the defense of any
such claim using counsel of the indemnifying party's choice except in the event
that a conflict of interest may occur or appears likely to occur, in which case
the indemnified party shall be entitled to retain its own counsel to represent
its interests at the indemnifying party's reasonable cost and expense. At all
times, the indemnifying party shall keep the indemnified party informed of the
status of such claim.
(b) Insurance. Licensee agrees to obtain and maintain during
the term hereof, at its own expense, with a reputable company acceptable to
Licensor, comprehensive general liability insurance including product liability
insurance providing protection at a minimum, in the amount of $5,000,000 per
occurrence and $10,000,000 aggregate limits, with deductibles or retentions of
no more than $50,000 applicable to any claims, liabilities, damages, costs, or
expenses arising out of the contingencies described herein. The minimum per
occurrence and minimum aggregate coverages referred to in the preceding sentence
shall be increased annually based on increases in the Consumer Price Index. The
coverage limits obtained by Licensee shall not limit Licensee's requirement to
fully indemnify Licensor, as set forth above. Such insurance shall name
Licensor, its directors, officers, agents, employees, assignees, and successors,
as additional insured parties. Licensee shall be solely responsible for the
payment of any amounts which the insurance does not cover including the
"deductible" or "retention" amount. Within thirty (30) days after the execution
of this License Agreement by Licensor, Licensee shall cause the insurance
company issuing such policy to issue a certificate to Licensor confirming that
such policy has been issued and is in full force and effect and provides
coverage of Licensor as required by this Section, and also confirming that
before any cancellation, modification or reduction in coverage of said policy
the insurance company shall give Licensor thirty (30) days' prior written notice
of such proposed cancellation, modification or reduction.
7. QUALITY OF MERCHANDISE; APPROVAL PROCEDURES FOR ARTICLES AND
ADVERTISING MATERIALS
(a) Warranty of Quality. Licensee warrants that, unless
approved by Licensor pursuant to paragraph (b) of this Section 7, the Licensed
Articles will not deviate from the quality, design, material, construction,
details, fabric, weight, workmanship and finish of the Licensed Articles
approved by Licensor in or pursuant to this Section 7 and that they will be
suitable for their in-
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tended purpose. Licensee warrants further that no injurious, deleterious, or
toxic substances will be used in or on the Licensed Articles, and that the
Licensed Articles will not cause harm when used as instructed and when used with
ordinary care. Licensee shall manufacture, sell, ship, package, advertise and
distribute the Licensed Articles in compliance with all applicable Federal,
state and local laws, rules and regulations, including compliance with such
voluntary industry standards that are adopted concerning the safety and labeling
of any Licensed Article.
(b) Approval of Proposed Licensed Articles.
(1) New Licensed Articles. With respect to each Licensed
Article which the Licensee proposes to manufacture, sell, or distribute which
differs in any way (other than solely with respect to color, print, embroidery
or fabric weight or density (by less than 10%)) from the Licensed Articles
previously approved by Licensor under this Article 7, then Licensee shall submit
to Licensor for its review and approval the following materials, in the order
stated:
(i) a concept for the proposed Licensed Articles, showing by rough artwork
and product designs the nature and appearance of the proposed Licensed
Articles;
(ii) a preproduction final sample of the proposed Licensed Article,
showing the exact form, finish and quality the Licensed Article will have
when manufactured in production quantities; and
(iii) four (4) identical production samples of the Licensed Article, to be
submitted immediately upon commencement of production.
Except as set forth in the following two sentences, Licensee shall
comply with all of these approval steps for each such Licensed Article,
obtaining Licensor's written approval at each step of the procedure, unless by
prior written notice from Licensor it is exempted from any such step with
respect to a specific Licensed Article. For a new Licensed Article that is to be
produced in different colors or prints, Licensee shall be obligated to follow
the steps outlined in this Section 7(b)(1) for one color or print of such
Licensed Article. The remaining colors or prints of such Licensed Article shall
be treated in accordance with Section 7(b)(2).
(2) Certain Changes to Previously Approved Licensed Articles.
With respect to each Licensed Article that Licensee proposes to manufacture,
sell or distribute which is identical to a Licensed Article previously approved
by Licensor pursuant to this Section 7 (other than with respect to color, print,
embroidery or fabric weight or density (by less than 10%)) and the only changes
to such previously approved Licensed Articles are to the color thereof or print
or embroidery thereon, then Licensee shall submit to Licensor for its review and
approval of the following materials, in the order stated:
(i) a written notice specifically identifying the previously approved
Licensed Article being changed and the intended changes to such Licensed
Article;
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(ii) panton color swatches showing any new solid color to be used on such
Licensed Article;
(iii) finished artwork showing in detail any new print or embroidery to be
used on such Licensed Article; and
(iv) four (4) identical production samples of such License Article (as
proposed to be changed pursuant to this subparagraph (2)), to be submitted
immediately upon commencement of production.
Licensee shall comply with all of these approval steps for each such
change to any such Licensed Article, obtaining Licensor's written approval at
each step of the procedure, unless by prior written notice from Licensor it is
exempted from any such step with respect to a specific Licensed Article.
(c) Approval of Advertising Materials. The term "Advertising
Materials" shall mean all advertising and promotional or display materials and
all packaging, wrapping and labeling materials for the Licensed Articles
(including, by way of illustration but not limitation, audio and visual tapes of
radio or television ads, catalogs, trade advertisements, flyers, sales sheets,
labels, package inserts, tags and displays) which are produced by or for
Licensee, including those intended for use in connection with promotional
tie-ins with third-parties (which third-parties must be approved in writing in
advance by Licensor, such approval not to be unreasonably withheld or delayed),
and which make any use of the Licensed Trademarks. All Advertising Materials
shall comply with Licensor's Advertising Guidelines described in Exhibit C. With
respect to each different item of Advertising Material which Licensee (or any
party acting on its behalf) proposes to produce and use, Licensee shall submit
to Licensor for its review and approval the following materials, in the order
stated:
(i) proposed written copy (including scripts and/or story boards for
proposed media advertising), for the item of Advertising Material, with
attached rough artwork showing how the Licensed Trademarks will be used in
connection with the copy;
(ii) final copy for the item; and
(iii) a final printed sample of the item (or in the case of radio and
television ads, tapes of commercials) where feasible (as, for example, in
the case of labels, tags, printed brochures, catalogs, and the like).
Licensee shall be required to comply with all of these approval
steps for each item of Advertising Material, obtaining Licensor's written
approval at each step of the procedure, unless by prior notice from Licensor it
is exempted from any step with respect to a specific item of Advertising
Material. Licensee warrants and represents that any Advertising Materials
created by or on behalf of Licensee will comply with all applicable Federal,
State, and local laws, rules and regulations.
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(d) Approval of Certain Licensed Articles and Advertising
Materials. Notwithstanding the procedures set forth in clauses (b) and (c)
above, Licensor hereby approves those Licensed Articles and Advertising
Materials identified on Exhibit D, subject to the limitations set forth in such
Exhibit.
(e) Trademark and Copyright Protection. Licensee agrees that
each usage of the Licensed Trademarks shall be followed by either the TM or the
Circle R Trademark Notice symbol, as is appropriate, and the hang-tag contained
on, and the packaging of, each Licensed Article shall contain the statement
"Trademarks owned by Gerber Products Company, used with permission." In the
event that any Licensed Article is marketed in a carton, container and/or
packing or wrapping material bearing the Licensed Trademarks, this notice shall
also appear thereon. In addition, all advertising and promotional or display
materials for the Licensed Articles bearing the Licensed Trademarks must
display a legible statement along the following lines in a location reasonably
calculated to be read by anyone interested: "Gerber is a registered trademark
owned and licensed by Gerber Products Company." Notwithstanding the foregoing,
Licensee may continue to use its existing stock of packaging and hang-tags for a
reasonable period of time (not to exceed eighteen months) to permit Licensee to
modify its packaging and hang-tags printing process.
(f) Approval Standards. Licensor shall have the right to
disapprove any proposed Licensed Article or Advertising Material submitted to it
under Sections 7(b), (c) and (d) if the proposed Licensed Article or Advertising
Material in question would, in the Licensor's sole and absolute discretion
exercised in good faith, impair the value or good will associated with the
Licensed Trademarks.
(g) Time for Approval by Licensor. Licensor shall notify the
Licensee in writing of its approval or disapproval of any proposed Licensed
Article or Advertising Material submitted to it under Sections 7(b), (c) and (d)
within 10 business days after its receipt of the same. If Licensee has not
received any such approval or disapproval within such 10-day period, Licensee
may notify Licensor by telecopy, receipt of which must be acknowledge in
writing, and Licensor will then have 5 business days after receipt of such
notice to approve or disapprove of the proposed Licensed Article or Advertising
Material. Should Licensor fail to approve any of the submissions furnished it by
Licensee within such subsequent 5 business day period, such failure shall be
considered to be approval of the submission, provided that Licensee has given
Licensor reasonable advance notice of the volume of expected submissions for
approval.
(h) Maintenance of Product Quality. Prior to the sale of new
Licensed Articles and periodically during the course of sales of any Licensed
Articles, Licensee shall have the Licensed Articles tested in accordance with
all applicable Federal, state and local laws, rules and regulations, including
compliance with all voluntary industry standards that are adopted by the Company
and in accordance with the past practice of the Company, to determine whether
the Licensed Articles comply with all such laws, rules, regulations, standards
and practices. The results of all such tests shall, subject to the
confidentiality requirements of Section 22 hereof, be provided to Licensor upon
request and the Licensee shall promptly notify Licensor upon discovery by
Licensor that Licensed Articles failing to comply with such standards have been
shipped. From time
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to time after it has commenced manufacturing the Licensed Articles, Licensee,
upon request, shall furnish free-of-charge to Licensor a reasonable number of
random production samples of any Licensed Article (not to exceed 4 samples per
Licensed Article per year) and/or samples of any Advertising Materials specified
by Licensor. Licensee shall also furnish to Licensor, upon request, the
addresses of the production facilities used by Licensee for manufacturing the
Licensed Articles, and Licensee shall make arrangements for Licensor or its
representatives to inspect such production facilities upon reasonable notice
during reasonable business hours. Should a manufacturer refuse Licensor access
to the production facilities pursuant to such a request and, within five
business days thereafter, Licensor is not granted such access, Licensee shall
immediately terminate any arrangement it may have with that manufacturer with
regard to the Licensed Articles.
(i) Failure to Obtain Approval. Licensee shall not have the
right to manufacture, offer for sale, sell, distribute, ship, or use any
proposed Licensed Article or item of Advertising Material unless it has complied
with all of the approval procedures and requirements set forth in this Section 7
and has obtained Licensor's prior written approval. Failure by Licensee to
comply with the provisions of this Section 7 shall constitute a material breach
of this License Agreement and shall be grounds for termination of the Licensed
Rights by Licensor unless Licensee cures such breach within thirty (30) days
thereafter by destroying all inventories of such unapproved Licensed Articles in
its possession and recalling from its customers and destroying all such
unapproved Licensed Articles that have previously been shipped. If Licensor
elects to terminate the Licensed Rights for Licensee's failure to obtain
approval, then Licensee may not dispose of its inventory of such unapproved
Licensed Articles pursuant to Section 15.
(j) Complaints and Product Recall. Licensee shall incorporate
the toll-free consumer telephone number 0-000-000-0000 (1-800-4GERBER) which is
provided and controlled by Licensor on all Licensed Articles to ensure that all
complaints and inquiries are directed to Licensor. Any complaints or claims
with respect to Licensed Articles which are received by either party hereto or
its employees, whether written or verbal, shall be promptly conveyed to the
other party, if to Licensor, to the attention of ____________________ or to such
other person(s) as Licensor may designate and if to Licensee, to the attention
of _______________ or such other person as Licensee may designate. If any such
complaint or claim involves serious bodily injury or a threat of serious bodily
injury, or property damage, the parties will notify one another of such
complaint or claim within twenty-four (24) hours of receipt. Licensor shall
assume responsibility for handling any or all consumer complaints and inquiries
associated with Licensed Articles at a cost to Licensee, invoiced on a quarterly
basis, at the current rate charged by Licensor to other licensees for providing
such services, increased annually based on increases in the Consumer Price
Index, plus expenses; provided, however, that such increase shall not be applied
until the second anniversary of the date of this License Agreement. Licensee
shall cooperate with Licensor in the resolution of consumer complaints and
inquiries, including by providing Licensor with replacement products as
reasonably requested.
Licensee shall immediately notify Licensor of any governmental
inquiry or order to investigate, modify, or recall any Licensed Article or any
Advertising Material and such information relating thereto shall be treated
confidentially pursuant to Section 22 hereof. In such event, Licensee
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shall consult with Licensor in regard to any action it proposes to take or
negotiations in which it engages. Licensee shall be solely responsible for the
payment of any expenses associated with the above, including any fines,
penalties, or assessments incurred, costs necessary to comply with government
or voluntary industry standards or any government order, expenses related to the
investigation and/or settlement, as well as any expenses for a voluntary or
mandatory recall. Licensee shall not issue any press release or make any other
public announcement concerning the Licensed Article without Licensor's prior
written consent, which consent shall not be unreasonably withheld or delayed.
Licensee shall take such action, including recall, as may be
required by any governmental agency or commission, including, but not limited
to, the Consumer Product Safety Commission, with respect to any Licensed Article
or any Advertising Material. Licensee's failure to take such action with regard
to either the Licensed Article or the Advertising Material shall constitute a
material breach of this License Agreement, and upon such breach, Licensor shall
be entitled to any remedies provided for it under this License Agreement,
including, but not limited to, the right to terminate the Licensed Rights. If
Licensor elects to terminate the Licensed Rights for Licensee's failure to
recall, then Licensee may not dispose of its inventory of such Licensed Articles
pursuant to Section 15.
8. JOINT PROMOTIONAL ACTIVITIES AND COOPERATION
(a) Licensor and Licensee agree to cause their respective
vice-presidents of sales and other appropriate members of management to
participate in a meeting or meetings during the fall of each year and at such
other times as are necessary or appropriate during the Initial Term and any
extension, to develop in good faith, plans for the following year with respect
to joint participation by the Licensor and Licensee in trade shows, joint
promotional and trade allowance programs, joint sales calls and similar
activities. Licensor and Licensee shall endeavor in good faith to memorialize
such plans for the following year in a memorandum of understanding to be
executed, along with such other contracts relating to such joint activity, by
Licensor and Licensee.
(b) Licensor agrees that it will include, upon the Licensee's
request, promotional material with respect to the Licensed Articles produced by
Licensee, at Licensee's cost, in promotional mailings by Licensor not more than
twelve times in each calendar year during each of the first two years following
the date hereof. During the period from the second anniversary of the date
hereof to the fifth anniversary of the date hereof, Licensor shall include, at
Licensee's request, promotional material with respect to the Licensed Articles
produced by Licensee, at Licensee's cost, in promotional mailings by Licensor at
the most favorable rate then being charged by Licensor to third parties for
inclusion of such third parties' promotional material in Licensor's promotional
mailings or, if no such third party is being included in Licensor's promotional
mailings, Licensee's pro rata share of the cost of the mailings; provided,
however, Licensor shall not be obligated by the provisions of this Section 8(b)
to make any promotional mailings.
(c) Licensor agrees that it will pay $87,500 to Licensee
quarterly beginning March 31, 1996 and ending December 31,1997 for Licensee to
pay to Toys 'R' Us as a trade support
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payment. Licensee agrees that it will provide to Licensor reasonably
satisfactory evidence that such trade support payment was used by Toys 'R' Us to
promote Licensed Articles.
(d) Licensor agrees that it will use reasonable efforts to
refrain from using products that compete with Licensed Articles manufactured and
sold by Licensee as props in photographs used in advertising by Licensor of its
products.
9. DISTRIBUTION
If Licensee (i) sells or distributes Licensed Articles to jobbers,
wholesalers, distributors, retail stores or merchants whose sales or
distribution are or will be made for publicity or promotional tie-in purposes,
combination sales, premiums, give-aways, or similar methods of merchandising;
(ii) makes door to door sales of the Licensed Articles; or (iii) sells at a
special price to any of Licensee's subsidiaries or to any other person, firm or
corporation related in any manner to Licensee or its officers, directors or
major stockholders, royalty will be paid on such sales based upon the price
generally charged the trade by Licensee. Licensee may not knowingly sell or
distribute Licensed Articles to jobbers, wholesalers, retail stores or merchants
who engage in illegal business practices. Licensee's policy of manufacturing,
sale, distribution and/or exploitation of the Licensed Articles shall be of the
highest standard and its policy of sale, distribution and/or exploitation shall
in no manner reflect adversely upon the good name of Licensor, any of its
programs, or the Licensed Trademarks, it being agreed and understood by Licensee
that any violation of this sentence by Licensee shall constitute a material
breach of this License Agreement.
10. RECORDS
Licensee shall keep accurate books of account and records covering
all transactions relating to this License Agreement. Licensor and its duly
authorized representatives shall have the right at all reasonable business hours
of the day, upon reasonable advance notice, to an examination of said books of
account and records and of all other documents and materials in the possession
or under the control of Licensee with respect to the subject matter and terms of
this License Agreement. Licensor shall have full and free access to the books of
account and records for these purposes and for the purpose of making extracts.
All books of account and records shall be kept available for at least four (4)
years after the fiscal year to which such books of account and records relate.
In the event that Licensor's duly authorized representatives shall discover a
deficiency of 5% or more in royalty payments pursuant to any such examination,
Licensee shall pay to Licensor the cost of such examination. Royalties found to
be due or refunded as a result of Licensor's examination of the Licensee's books
of accounts shall be paid immediately with interest at an interest rate equal to
the lesser of (i) 1-3/4% per month, or (ii) the highest rate permitted by law,
in each such case, from the date the royalty amount should have been paid or
refunded to Licensor or Licensee, as applicable.
11. BANKRUPTCY
At least 30 days prior to filing a petition in bankruptcy, Licensee
shall notify Licensor of its intention to file the petition or of a third
party's intention to file an involuntary
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petition in bankruptcy against Licensee. Failure to conform to this requirement
shall be deemed a material, pre-petition, incurable breach of this License
Agreement.
12. TERMINATION FOR CAUSE
Licensor may terminate the Licensed Rights or Licensee may terminate
this License Agreement in the event of a material breach or default in any of
the provisions of this License Agreement by the other party, by the
non-breaching party's sending of a written notice of termination to the
breaching or defaulting party specifying in detail the nature of the material
breach or default. If the party receiving said notice does not remedy said
breach or default within thirty (30) days of the date of the notice or, in the
case of a breach or default which cannot reasonably be expected to be remedied
within thirty (30) days, but is capable of being remedied within a reasonable
period of time, does not institute diligent steps calculated to remedy such
breach or default in the shortest possible time, then the termination shall
become effective at the end of such thirty (30) day period. If the breaching or
defaulting party does so remedy or institute appropriate measures to remedy the
breach or default, then the notice of termination shall be deemed automatically
withdrawn and forever null and void. The failure of either party to terminate on
account of any one breach or default shall not constitute a waiver of that
party's right to terminate for any subsequent breach or default of the same
provision.
(a) Licensor may terminate the Licensed Rights effective
immediately by notice in writing to Licensee if:
(i) Licensee fails to provide notice of an intention to file a petition in
bankruptcy as required by Section 11;
(ii) Licensee files a petition to wind up its affairs, seeks the benefit
of insolvency or debt moratorium law or statute, becomes insolvent or is
unable to pay its debts as they mature, makes an assignment for the
benefit of creditors, is adjudicated a bankrupt, has a receiver appointed
for its property, ceases or threatens to cease to carry on its business,
or otherwise enters into any arrangement or composition with its
creditors, or if a substantial portion of its assets become subject to
attachment by judicial order, whether any of the foregoing is the
voluntary act of the party or otherwise;
(iii) Licensee fails to maintain insurance as required under Section 6(b);
or
(iv) the Licensee violates Section 7.
(b) Licensee may terminate this License Agreement (i) pursuant
to Section 1(c)(ii); or (ii) at any time prior to two years before the end of
the Third Term by written notice to Licensor given not less than 90 days before
the proposed termination date and providing that as of such termination date it
is surrendering its License Rights and ceasing future use of the Licensed
Trademarks pursuant to the terms and conditions of this License Agreement.
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13. EFFECT OF TERMINATION OR EXPIRATION
(a) Upon and after the expiration of this License Agreement,
or the termination of the Licensed Rights, in whole or in part, for any reason,
all rights granted to Licensee shall revert to Licensor (subject to the
non-competition agreement of Licensor set forth in Section 6.12 of the Stock
Purchase Agreement), and Licensee will refrain from further use of the Licensed
Trademarks or any further reference to it, direct or indirect, or anything
deemed by Licensor to be confusingly similar to the Licensed Trademarks in
connection with the manufacture, sale or distribution of Licensee's products,
except as provided in Section 15.
(b) Notwithstanding anything to the contrary contained herein,
Sections 2, 3, 4, 5(d), 6, 7(a), 7(e), 9, 10, 13, 14, 15, 18, 22 and 23 under
this Agreement shall survive termination or expiration of this License
Agreement.
(c) By exercising its right to terminate the Licensed Rights,
Licensor shall not be deemed to have waived any right to seek any other form of
relief or remedy to which it may be entitled.
(d) Licensor's termination of the Licensed Rights shall not
affect Licensee's right to dispose of inventory as granted by Section 15 except
as such rights are limited in Sections 7 and 15.
(e) In the event of Licensor's breach of any of its
obligations hereunder, Licensee may pursue any remedy it may have at law or in
equity.
(f) Upon and after the expiration of this License Agreement or
the termination of the Licensed Rights for any reason, Licensee shall promptly,
but in any event within 10 business days, change its corporate and business
names to delete any references to "Gerber".
14. FINAL STATEMENT UPON TERMINATION OR EXPIRATION
Sixty (60) days before the expiration of this License Agreement and
again within twenty (20) days after such expiration (or, in the event of
termination of the Licensed Rights, or termination pursuant to Section 16, ten
(10) days after receipt of notice of termination or the happening of the event
which terminates the Licensed Rights where no notice is required), Licensee
shall furnish Licensor a statement showing the number and description of
Licensed Articles on hand or in process. Licensor shall have the right, at its
own expense and upon reasonable advance notice during business hours, to take a
physical inventory to ascertain or verify such inventory and statement, and
refusal by Licensee to submit to such physical inventory by Licensor shall
forfeit Licensee's right to dispose of such inventory as provided in Section 15
hereof, Licensor retaining all other legal and equitable rights Licensor may
have in the circumstances.
15. DISPOSAL OF STOCK UPON EXPIRATION
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After expiration of this License Agreement, termination of the
Licensed Rights, or termination under Section 16, Licensee, except as otherwise
provided in this License Agreement, may dispose of Licensed Articles which are
on hand or in process at expiration, or at the time notice of termination is
sent, other than blanket sleeper products, for a period of 180 days after the
expiration or termination thereof and, with respect to blanket sleeper
products, for as long as is reasonably necessary to dispose of such products but
in no event more than one year after the expiration or termination thereof (such
period, the "Sell-Off Period"), provided royalties with respect to that period
are paid and statements are furnished for the period in accordance with Section
2. In no event, however, may the Licensee distribute and sell during such
Sell-Off Period an amount of Licensed Articles that exceeds the greatest amount
of Licensed Articles sold during any consecutive period of the same length as
the Sell-Off Period during the term of the License Agreement. During such
Sell-Off Period, Licensor may itself use or license the use of the Licensed
Trademarks in any manner at any time anywhere in the world as Licensor sees fit;
provided, however, that any such license shall be subject to Licensee's right of
sell-off granted herein. Notwithstanding anything to the contrary, Licensee
shall not manufacture, ship, distribute, sell or dispose of any affected
Licensed Articles after termination of this License Agreement, if such
termination is based on the failure of Licensee to affix notice of copyright,
trademark registration or any other notice to the Licensed Articles, cartons,
containers, or packing or wrapping material, or Advertising Materials. In the
event of such termination by Licensor by reason of any cause contained in
Section 7, Licensee, its receivers, representatives, trustees, agents,
administrators and successors shall have no further right to sell, exploit or in
any way deal in or with any of the unapproved or defective Licensed Articles or
any advertising matter, packing material, boxes, cartons or other documentation
relating thereto, except after having obtained express written consent of and
instructions with reference thereto from Licensor.
16. EXCUSE FOR NONPERFORMANCE
Licensor and Licensee shall be released from their respective
obligations and this License Agreement shall terminate in the event that
governmental regulations or other causes arising out of a state of national
emergency or war or causes beyond the control of the parties render performance
impossible and one party so informs the other in writing of such causes and its
desire to be so released. In such events, all royalties on sales theretofore
made shall become immediately due and payable.
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17. NOTICES
All notices and statements to be given, and all payments to be made
shall be given or made at the respective addresses of the parties as set forth
above, unless notification of change of address is given in writing and the date
of mailing shall be deemed the date the notice or statement is given unless
otherwise provided herein. Notice shall be sent by certified mail, overnight
courier, or facsimile.
18. RELATIONS OF THE PARTIES
This License Agreement does not create a partnership, agency
relationship or joint venture between the parties and the Licensee shall have no
power to obligate or bind Licensor in any manner whatsoever.
19. ASSIGNMENT
(a) Licensee may not assign any of its rights, interests or
obligations hereunder without the prior written consent of Licensor; provided
that Licensee may assign its rights and obligations hereunder without obtaining
such consent (i) to a wholly owned subsidiary of Licensee, (ii) to any person
other than a Prohibited Assignee (as defined below) in connection with the sale
of all or substantially all the assets, capital stock or business of Licensee
and (iii) for collateral security purposes to any lender providing financing to
Licensee that is secured by Licensee's inventory solely for purposes of
permitting such lender to dispose of such inventory in accordance with the terms
hereof upon a default by Licensee under any such financing; provided further,
that in either such case, Licensee shall not be released from any of its
obligations hereunder. For clarification, a public offering of the common stock
of Licensee shall not constitute an assignment for the purposes of this Section
19. For purposes of this Section 19(a), "Prohibited Assignee" shall mean (x) any
entity or affiliate thereof engaged in the infant and/or toddler nutrition
business and having revenues related to such business in excess of $100 million
per year (increased annually based on increases in the Producer Price Index),
(y) any entity or affiliate thereof engaged in the manufacture or sale of baby
care products of the type being manufactured or sold by Licensor as of the date
of the intended assignment and having revenues related to such business in
excess of $50 million per year (increased annually based on increases in the
Producer Price Index) or (z) any entity that the Board of Directors of Licensor
determines in good faith after reasonable inquiry is likely, as a result of any
such assignment, to adversely effect the reputation or good will of Licensor or
the public perception or value of the Licensed Trademarks; provided, however,
that such entity shall not be deemed to be a Prohibited Assignee unless within
30 days of receiving written notice from Licensee identifying such entity as a
potential assignee, Licensor's Board of Directors shall have (i) made the
determination specified above, (ii) provided Licensee with a detailed list of
its reasons for such determination, and (iii) issued a press release setting
forth such determination and the reasons on which it is based. Notwithstanding
the foregoing, in the event Licensee has reason to believe that Licensor's Board
of Directors has not made such determination in good faith after reasonable
inquiry, such issue of Licensor's good faith shall be resolved in accordance
with the arbitration
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mechanism set forth in Section 19(c) of the Distributor Agreement, dated the
date hereof between the parties hereto, and if it is determined not to have been
made in good faith, then such entity will not be deemed a Prohibited Assignee.
(b) Licensor may not assign its rights and obligations under
this License Agreement without the prior written consent of Licensee.
(c) Licensee shall have the right to arrange for the
manufacture of the Licensed Article by a third party, upon Licensor's prior
written approval and upon the execution of a letter by the third party in the
form attached as Exhibit E; provided, however, that any third-party manufacturer
of Licensed Articles on the date hereof shall be deemed approved by Licensor,
and Licensee shall use its reasonable best efforts to obtain a letter in the
form of Exhibit E from such manufacturers as promptly as practicable after the
date hereof.
20. WAIVER
No waiver by either party of a breach or a default shall be deemed a
waiver by such party of a subsequent breach or default of a like or similar
nature.
21. NONCOMPETITION. During the term of this License Agreement,
Licensee shall not adopt, use, sell, manufacture or distribute
any Licensed Article with a confusingly similar trademark to
the Licensed Trademarks or an article substantially similar
to any Licensed Article with a trademark that is confusingly
similar to the Licensed Trademarks, nor shall Licensee adopt,
use, sell, manufacture or distribute any item for use in
association with the Licensed Articles that competes in any
area with items manufactured or sold by Licensor, nor shall
Licensee promote, advertise or market the sale or design of
any item which would be a Licensed Article if such item
contained a Licensed Trademark in concert with the sale or
design of any item that competes in any area with items
manufactured or sold by Licensor.
22. CONFIDENTIALITY. Except for the proper exercise of any rights
granted or reserved under other provisions of this License
Agreement, each party agrees that it will take such
precautions as it normally takes with its own confidential or
proprietary information to keep confidential and not publish
or otherwise disclose to a third party except as permitted or
anticipated herein, any information of a proprietary nature
furnished by the other party to it in connection with this
License Agreement, including, without limitation, technology,
marketing strategy, specifications, product information, data,
inventions, sales data, plans, trade secrets, call lists,
customer lists, and business information (together called
"Confidential Information") and not disclose the terms of this
License Agreement to any third party or to either party's
employees (except on a need-to-know basis), without prior
written consent of the other party except to the extent that
such
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Confidential Information (i) is required to be disclosed for
the purpose of complying with law or government regulations
(including to the extent required to be disclosed in
connection with any public offering of common stock of
Licensee), (ii) otherwise publicly available or has been
independently developed without breach of any confidentiality
obligations hereunder or under any other agreement or
understanding with any party. Notwithstanding the foregoing,
Licensee shall be permitted to disclose the terms of this
License Agreement as necessary to facilitate a sale of
Licensee's business or to financing sources of the Licensee.
23. GOVERNING LAW
This License Agreement shall be construed in accordance with the
internal laws of the State of Delaware except with respect to conflicts of law.
24. DISPUTE RESOLUTION
(a) Arbitration. In the event of disputes between the parties
with respect to the terms and conditions of this License Agreement, such
disputes shall be resolved by and through an arbitration proceeding to be
conducted under the auspices of the American Arbitration Association (the "AAA")
in New York, New York pursuant to the AAA's Commercial Arbitration Rules. Such
arbitration proceeding shall be conducted in as expedited a manner as is then
permitted by those rules. The arbitrator or arbitrators in any such arbitration
(an "Arbitration") shall be persons who are expert in the subject matter of the
dispute. Both the foregoing agreement of the parties to arbitrate any and all
such claims, and the results, determination, finding, judgment and/or award
rendered through such Arbitration, shall be final and binding on the parties
thereto and may be specifically enforced by legal proceedings.
(b) Selection of Arbitrators. Licensor shall appoint one (1)
arbitrator, and License one (1) arbitrator within a term of thirty (30) calendar
days from the date of any claim hereunder, and the two (2) arbitrators so
appointed shall appoint the third arbitrator, within a term of thirty (30)
calendar days from the date in which the last of the two (2) arbitrators have
been selected.
If either Licensor or Licensee fails to select its arbitrator within
the term mentioned above, or in the event that the two (2) selected arbitrators
are unable or unwilling to select a third arbitrator within fourteen (14)
calendar days following the selection of the last of them, then AAA shall select
the arbitrator that was not selected by either of Licensor or Licensee or the
third arbitrator as the case may be, in accordance with the procedure set forth
below, and the three (3) arbitrators shall constitute the arbitration panel for
purposes of the dispute.
(c) Procedure. Each party shall bear separately the cost of
their respective attorneys, witnesses and experts in connection with such
arbitration. Time is of the essence in this
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arbitration procedure, and the arbitrators shall be instructed and required to
render their decision within ten (10) days following completion of the
Arbitration.
(d) Exclusive Remedy. Any and all legal proceedings to enforce
this Agreement (except for any action to compel arbitration hereunder or any
action to enforce any award or judgment rendered thereby), shall be governed in
accordance with this Section 24.
25. UPC Codes. Licensee shall be permitted to use the current UPC
codes for the current Licensed Articles during the term of
this License Agreement. Licensee shall obtain new UPC numbers
for new Licensed Articles and such new UPC numbers shall not
incorporate the Gerber code numbers (i.e., the first 4 numbers
of any such UPC code shall not indicate Gerber).
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed as of the day and year first above written.
GERBER PRODUCTS COMPANY GERBER CHILDRENSWEAR, INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------------- ---------------------------
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EXHIBIT A-1
Gerber Products Company Owned U.S. Trademark Registrations:
Trademark Reg. No. Class Expiration
--------- -------- ----- ----------
BABY HEAD 964,221 25 07/17/03
GERBER 963,676 25 07/10/03
GERBER 1,144,282 25 12/23/00
GERBER & BABY HEAD 767,237 25 03/24/04
GERBER & BABY HEAD 964,222 25 07/17/03
GERBER & BABY HEAD 1,473,270 25 01/19/08
BABIES ARE OUR 770,871 25 06/02/04
BUSINESS...
BABIES ARE OUR 968,706 25 09/18/03
BUSINESS...
X-0-0
00
XXXXXXX X-0
Xxxxxx Products Company's Common Law Trademarks:
Trademark
---------
BABIES ARE OUR BUSINESS. . .
GERBER
GERBER & BABY HEAD
GERBER BEAR
SAFARI PALS
TROPICAL TESOROS
GRADUATES
GERBER SUPREME
DIPPY DUCK
CHAMBRAY BEAR
SIGNATURE COLLECTION BY GERBER
A-2-1
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EXHIBIT C - ADVERTISING GUIDELINES
IV. CREATIVE GUIDELINES - PHOTOGRAPHY
General Photography Guidelines
The following standards should be maintained in all photographs produced for use
in advertising, packaging and promotional materials:
o All props or related items shown in the photograph are to be those
produced by Licensor or Licensee or their subsidiaries. Products
competitive with products manufactured or sold by Licensor are not
to be used.
o Mothers, or models posing as mothers, shall wear wedding rings.
o Care must be taken that packages shown are current designs and that
the products shown are generally available in the area the
photograph is to be used.
o Where use of a product is shown, the photograph is to depict the
acceptable, proper method.
o Photographers must reflect quality, decency, and a "Gerber concern"
for propriety.
C-1
26
CONTENT, CARE OF PROPS AND MODELS
Special considerations for a photograph shoot:
o Babies shall be clothed. (Minimum clothing would include a Gerber t-shirt
and vinyl pants or diaper cover covering a diaper.) Clothing should be in
unisex colors such as green, yellow, orange or white.
o Babies should not be depicted in a negative or overly exaggerated way. For
example, (1) babies should not be shown crying or fussing; (2) they should
not be shown with mouth wide open and/or with inappropriate amounts of
baby food on their faces; (3) they should not be shown in adult-looking
clothes; (4) they should not be overweight; (5) they should not look
character-like or distinctly unusual. However, some discretionary judgment
should be considered for appropriate, but different message formats.
"Gerber babies" are naturally cute and rather trim.
o Babies should never be depicted in a potentially unsafe situation (e.g.,
unattended in a high chair or in a position where the child could possibly
fall, get burned, etc.).
o Agency should ensure that babies are handled in the proper way by the
photographer, cast and crew, complying with legal jurisdictions or
presence of specialists (e.g., nurses, social workers, home economists)
and equipment (e.g., food warmers, cribs).
C-2
27
EXHIBIT D
D-1
28
EXHIBIT E
Gerber Products Company
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: ____________
This letter will serve as notice to you that we have been engaged as the
manufacturer for Gerber Childrenswear, Inc. ("GCI") in connection with the
manufacture of the Licensed Articles as defined in the aforesaid License
Agreement. We hereby acknowledge that GCI has supplied us with a copy of those
parts of the Agreement consistent with our obligations and we are cognizant of
the terms and conditions of said Agreement and hereby agree to observe those
provisions of said License Agreement which are applicable to our function as
manufacturer of the Licensed Articles. We further agree that we shall have no
right to manufacture, sell or utilize Licensed Articles except as manufacturer
for GCI and further agree not to utilize any of the Licensed Articles or the
name of Gerber Products Company, or any other indicia relating to Gerber
Products Company, to advertise, promote or publicize ourselves with respect to
such manufacture in any manner or form. Our engagement as subcontractor is on a
royalty-free basis.
We understand that our engagement as the subcontractor for GCI is subject to
your written approval which will not be unreasonably withheld. We request,
therefore, that you sign in the space below, thereby showing your acceptance of
our engagement as manufacturer, subject to our agreements and representations
set forth in this letter, and return this agreement of acceptance to __________.
Very truly yours,
By: ________________________________________
AGREED AND ACCEPTED:
By:___________________
Name:_________________
Title:________________
Date:_________________
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