NON-EXCLUSIVE LICENSE AGREEMENT
-------------------------------
THIS NON-EXCLUSIVE LICENSE AGREEMENT ("AGREEMENT") dated as of
December, 2000, is by and among GENIUS PRODUCTS, INC., a California Corporation
("LICENSOR"), c/o of its licensing agent Global Icons, LLC ("GLOBAL") and XXXXXX
APPAREL GROUP, a New Jersey corporation ("LICENSEE").
WHEREAS, LICENSOR owns or otherwise has the rights to license the
copyrights and trademarks listed in SCHEDULE A (the "PROPERTY"); and
WHEREAS, LICENSEE is a manufacturer, marketer and distributor of
products which would benefit from use of the Property; and
WHEREAS, LICENSEE recognizes the great value of the goodwill associated
with the Property, and recognizes that the Property and associate goodwill are
of great value to LICENSOR; and
WHEREAS, LICENSOR has appointed GLOBAL as its master licensing agent to
represent LICENSOR in its licensing program and under this Agreement; and
WHEREAS, LICENSOR desires to grant and LICENSEE desires to acquire a
license to manufacture, distribute and/or sell various products (as specified
below) utilizing the Property under the terms and conditions as set forth below;
NOW THEREFORE, in consideration of the mutual covenants set forth
herein and for other consideration the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. GRANT OF LICENSE; TERM; LIMITATIONS
(a) LICENSE. Subject to the terms and conditions of this
Agreement, including but not limited to the rights reserved in
Paragraph 1(b), 1(c), 1(d) and 1(e), LICENSOR grants to
LICENSEE a non-exclusive, non-transferable right and license
to use the Property in the manufacture, promotion,
advertising, marketing and distribution and sale of the
Licensed Product (as defined in Paragraph 1(c) in the
Territory (as defined in Paragraph 1(d) and in the Channels of
Distribution (as defined in Paragraph 1(d) (the "LICENSE").
Other than as set forth herein, LICENSEE agrees not to use the
Property, directly or indirectly in any Excluded Territory (as
defined in Paragraph 1(d) or on any goods other than the
Licensed Products, and agrees not to sell any Licensed
Products with the knowledge that the purchaser intends to
re-sell the Licensed Product in any Excluded Territory. Upon
knowledge of such intended or actual unauthorized sale,
LICENSEE shall immediately advise LICENSOR of all details of
such sales and shall immediately cease all sales to such third
party. Notwithstanding the foregoing, (i) LICENSOR shall not
enter into any license agreements with LICENSEE's direct
competitors which would conflict with LICENSEE's rights with
respect to the Licensed Products within the Territory during
the License Term, provided that LICENSEE materially performs
all of its obligations under this Agreement; and (ii) LICENSEE
shall not enter into any license agreements with The Baby
Einstein Company, LLC during the License Term.
(b) LIMITATIONS ON LICENSE: No license is granted hereunder for
the use of the Property for any purpose other than on or in
connection with the Licensed Products. LICENSEE shall not sell
Licensed Products to any customers which are disapproved in
writing by LICENSOR. No license is granted hereunder for the
manufacture, sale or distribution of Licensed Products to be
used for the purpose of increasing the sale of another item;
promoting or publicizing any product or service; fund-raising
or as giveaways; or to motivate a sales force, merchant,
consumer, or any other person to perform a specific act. In
the event LICENSEE desires to sell Licensed Products for such
purposes, LICENSEE acknowledges and agrees that it shall first
seek and obtain a separate license from LICENSOR and that the
third party user thereof shall also obtain a separate license
from LICENSOR for such use of Licensed Products.
(c) LICENSED PRODUCTS. The "LICENSED PRODUCTS" are defined as
delineated and categorized in SCHEDULE 1(A) attached hereto
and incorporated herein, manufactured by LICENSEE, approved as
to quality by LICENSOR prior to public exposure as provided by
Paragraph 5, and that bear the LICENSOR's trademarks on the
said products and any labels, in accordance with the
provisions of Paragraph 1(f).
(d) TERRITORY; CHANNELS OF DISTRIBUTION. The License granted in
Paragraph 1(a) above is for the United States, its territories
and possessions, Puerto Rico and Canada (the "TERRITORY"). All
other countries are considered to be an excluded territory
(any such country, an "EXCLUDED TERRITORY"). LICENSEE shall
make sales of Licensed Products through the Channels of
Distribution defined in SCHEDULE 1(B) attached hereto.
(e) OWNERSHIP AND RESERVED RIGHTS. LICENSOR reserves and retains
the right, title and interest in the Property, and reserves
and retains the right to:
(i) license, design, manufacture, distribute and sell at
wholesale, retail or otherwise (1) any products other
than the Licensed Products, in the Territory and (2)
any Licensed Products in any Excluded Territory.
(ii) design and manufacture within the Territory, Licensed
Products for distribution and sale in any Excluded
Territory.
LICENSEE may not use the Property in any manner other than as
expressly licensed under this Agreement. LICENSEE shall not
claim any right, title or interest in the Property or goodwill
associated therewith other than pursuant to the limited
license granted in this Agreement and hereby waives any right
it otherwise might acquire as a licensee, distributor or
holder of a business opportunity.
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(f) PROPERTY USE AND MARKING. LICENSEE shall use the Property in a
manner that does not derogate LICENSOR's rights therein or in
any manner detract from or damage the goodwill associated
therewith. When the Property is used in text, it shall be
distinguished from the surrounding text. When LICENSEE uses
any trademark on Licensed Products, labels, hang tags,
packaging, or in advertisements or other promotional material,
the trademark shall be designated as such by use of the "TM"
notation or the "(R)" symbol, as directed by LICENSOR, as a
superscript to the xxxx. LICENSEE agrees that the trademark
will appear on each Licensed Product and its packaging, if
any. LICENSEE shall use only those tags, labels and packaging
materials which have been previously approved in writing by
LICENSOR. On all Licensed Products, LICENSEE shall affix such
legends, markings and notices as reasonably required by
LICENSOR and the law. LICENSEE acknowledges that the omission
of the notice shall be considered a material breach of this
Agreement.
(g) LICENSE TERM. Subject to earlier termination as otherwise
provided in this Agreement, the term of the License hereunder
shall commence on the date hereof, and will continue until
February 29, 2004 (the "LICENSE TERM"). Additionally, (a)
LICENSEE shall ship the Licensed Products to distributors in
the Territory no later than December 1, 2001 (the "SHIP DATE")
and (b) LICENSEE shall use its commercially reasonable efforts
to cause all of the participating distributors to introduce
the Licensed Products into the Channels of Distribution within
the Territory no later than Maarch 1, 2002.
(h) NO SUBLICENSE OR ASSIGNMENT.
(i) LICENSEE has no right to, and shall not, transfer or
assign, or grant any sublicense, concession, right or
privilege relating to, the Property or the Licensed
Products either directly, indirectly or by operation
of law. A change of ownership, as defined in
Paragraph 9(c)(1) shall constitute an assignment.
(ii) LICENSEE shall contract for the manufacture of the
Licensed Products by a third party only pursuant to a
written agreement with such third party approved in
writing by LICENSOR.
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2. MANUFACTURING, MARKETING AND PROMOTION
(a) MANUFACTURE. LICENSEE agrees that the Licensed Product shall
equal or exceed all mandatory industry and government
standards established in respect of safety and fitness for
use. All applicable government standards of the Territory
shall be followed, whether federal, state or local. If the
Territory is the U.S. or is inclusive of the U.S., such
standards shall include, but not be limited to, the Consumer
Product Safety Act and all appropriate sections of the Code of
Federal Regulations, and to the extent applicable, the
Products shall equal or exceed the standards set forth in the
Hazardous Substances Act, the Flammable Fabrics Act, the Child
Safety Protection Act and the Toy Manufacturers of America
Safety Standards as contained in ASTM F963 and comparable
industry standards. In accordance with industry practices
applicable with respect to the types of products manufactured
by LICENSEE, LICENSEE agrees, on an annual basis, to provide
to LICENSOR at LICENSEE's expense a certificate of an approved
independent testing laboratory certifying that the Products
comply with such standards and regulations.
(b) MARKETING AND PROMOTION. LICENSEE shall use its commercially
reasonable efforts to exploit the License throughout the
Territory, including but not limited to, selling commercial
quantities of a representative sampling of the Licensed
Products of the various styles as approved by LICENSOR;
offering for sale the Licensed Products so that they may be
sold to the consumer on a timely basis; and maintaining a
sales force sufficient to provide effective distribution
throughout the Territory; and cooperating at LICENSEE's
expense with LICENSOR's and any of its other licensees'
marketing, merchandising, sales and anti-counterfeiting
programs. LICENSOR and Global shall use its commercially
reasonable efforts to assist LICENSEE with marketing and
promotion of the Licensed Products.
(c) COMPLIANCE WITH LICENSOR'S MARKETING PLANS. LICENSEE shall use
its commercially reasonable efforts to comply with LICENSOR'S
roll-out and marketing plans, which LICENSOR shall provide to
LICENSEE at the time such plans are finalized by LICENSOR.
(d) ADVERTISING AND PROMOTION; APPROVAL. All advertising and
promotion of the Licensed Products must be consistent with the
high quality, image and standards of LICENSOR and shall be
subject to the prior express written approval of LICENSOR. No
advertising or promotional material shall refer to LICENSOR's
name without LICENSOR's prior written approval.
(e) THIRD PARTIES. No manufacturer engaged by LICENSEE may sell or
ship Licensed Products to any party except LICENSEE or its
designee, and LICENSEE shall not contract for the manufacture
and/or sale of the Licensed Products by a third party without
the prior express written approval of LICENSOR and then only
pursuant to a written agreement with such third party approved
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by LICENSOR, unless LICENSOR expressly waives such
requirement. The written agreement shall obligate the third
party to the applicable obligations of the LICENSEE under this
Agreement such as, for example, the quality standards,
protection and use of the Property, Confidential Information,
right of inspection of premises, books and records, and
prevention of resale of seconds.
3. ROYALTIES.
(a) GUARANTEE AND ADVANCE. LICENSEE hereby guarantees Royalties
(as defined in Paragraph 3(c)) of not less than Seventy Five
Thousand Dollars ($75,000) (the "GUARANTEE"). Upon execution
of this Agreement, LICENSEE shall pay a non-refundable sum of
Ten Thousand Dollars ($10,000) (the "ADVANCE"), to GLOBAL on
behalf of LICENSOR. The Advance shall serve as an advance
against the Royalties payable by LICENSEE hereunder. Once
Royalties owed to LICENSOR surpass the amount of the Advance,
LICENSEE shall make quarterly Royalty payments as set forth
herein. The balance of Guarantee (i.e., Sixty Five Thousand
Dollars ($65,000), shall be paid in full not later than
December 1, 2003 according to the following schedule, provided
that such balance is not previously remitted in earned
Royalties:
(i) Fifteen Thousand Dollars ($15,000) due six (6) months
after the Ship Date (as defined in Paragraph 1 (g)(I)
above), but no later than June 1, 2001.
(ii) Twenty Five Thousand Dollars ($25,000) due on or
before December 1, 2002; and
(iii) Twenty Five Thousand dollars ($25,000) due on or
before December 1, 2003.
(b) NET SALES. For purposes of calculating any Royalty (as defined
in Paragraph 3(c)), "NET SALES" shall mean the full wholesale
prices of the Licensed Products in U.S. dollars, billed,
invoiced or shipped, whichever is first to occur, by LICENSEE
to its customers within the Territory during the "ROYALTY
PERIOD" (defined in Paragraph 3(c)), less trade discounts, and
allowances and less defective merchandise returns actually
received by LICENSEE. Returns on account of defective
merchandise shall not exceed an aggregate of five percent (5%)
of Net Sales for any three (3) consecutive Royalty Periods. If
such returns do exceed the five percent (5%) threshold, it
shall be considered a material breach of this Agreement by
LICENSEE.
(c) PERCENTAGES. LICENSEE agrees to pay a royalty to GLOBAL (until
notified in writing otherwise) on behalf of LICENSOR at rates
equal to the percentages of LICENSEE's Net Sales, as set forth
below (the "ROYALTY"), in each calendar quarter within thirty
(30) days after the end of each calendar quarter for the sales
of the Licensed Products sold during such calendar quarter.
For the duration of the License Term. each such quarterly
period is referred to as a "ROYALTY PERIOD":
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ROYALTY RATE NET SALES
------------ ---------
6% Net Sales for all Tee Shirts sold
through December 1, 2002
8% Net Sales for all Tee Shirts sold in
the period of commencing on December 1,
2002 through the expiration of this
Agreement (i.e., February 29, 2004 or
an earlier termination)
8% Net Sales for all Licensed Products
(excluding Tee Shirts, as outlined
above) sold during the Term of this
Agreement
(d) TIME OF PAYMENTS OF ROYALTY. Within thirty (30) days after the
end of each Royalty Period during the Term, commencing no
later than January 15, 2001, LICENSEE shall pay GLOBAL on
behalf of LICENSOR, in U.S. Dollars by check or in any other
manner designated by LICENSOR in writing, the Royalty
(applicable for the prior Royalty Period) less the
non-refundable Advance not otherwise credited.
(e) LATE PAYMENTS. If any payment is not received by LICENSOR
within ten (10) days of the due date, LICENSEE shall pay to
GLOBAL on behalf of LICENSOR a late charge on all overdue
payments calculated at an annualized rate of fourteen percent
(14%) of such overdue sum.
(f) INDEPENDENT COVENANT. The obligation of LICENSEE to pay
Royalties is absolute notwithstanding any claim which LICENSEE
may assert against LICENSOR. LICENSEE shall not have the right
to set-off, compensate against or make any deduction from
Royalties for any reason whatsoever.
4. DEPOSITS; BOOKS AND RECORDS
(a) REPORT. At the time each Royalty payment is due, LICENSEE
agrees to deliver to LICENSOR and GLOBAL a report setting
forth: Net Sales and Royalty payable for the Royalty Period
covered by the report, as well as Advance credited against
such Royalty, the form of which first shall be approved by
LICENSOR and amended as reasonably requested by LICENSOR.
(b) SEPARATE BOOKS AND RECORDS. LICENSEE shall maintain separate
and appropriate books of account and records sufficient to
reconcile the number of units manufactured that are Licensed
Products with the number of units sold, separated by the
appropriate Channels of Distribution, all in accordance with
generally accepted accounting principles.
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(c) RIGHT TO EXAMINE. LICENSOR and GLOBAL, at all times during and
after termination or expiration of this Agreement, shall have
the right, through any authorized representative of its
choice, on five (5) business days advance notice to LICENSEE,
to examine and copy all of LICENSEE's books and records
relating to the manufacture and sale of the Licensed Products
no more than once during a twelve (12) month period, provided
that within the preceding twelve (12) month period no
underpayments of Royalties are discovered. LICENSOR and GLOBAL
shall have the right to examine the books and records of all
companies with common ownership which transact business with
LICENSEE. "COMMON OWNERSHIP" shall mean that one or more of
the principals, partners or shareholders is a principal,
partner or shareholder of LICENSEE. All such examinations
shall be at LICENSEE's principal place of business and during
normal business hours. LICENSEE shall keep all books of
account and records available for at least three (3) years
after the close of each fiscal year to which they relate.
LICENSEE shall maintain its books and records only at its
principal office premises and shall not remove this
information unless it has given LICENSOR and GLOBAL thirty
(30) days written notice of the new location (which must be in
the United States). If an examination discloses that LICENSEE
has understated Net Sales or underpaid any Royalty for any
report period, without prejudice to any of LICENSOR's rights,
LICENSEE shall pay GLOBAL on behalf of LICENSOR the amount, if
any, by which the actual Royalties exceed Royalties paid
within ten (10) days of receipt of notice by LICENSOR and
GLOBAL to such effect, together with the applicable late
charge as provided. Further, if LICENSEE underpays Royalties
by more than three percent (3%) or US $10,000 (whichever is
greater) for any calendar year, LICENSEE shall pay all costs,
fees and expenses incurred by LICENSOR and GLOBAL in
conducting such examination, in addition to any late charges
and interest provided for in this Agreement and reasonable
attorneys' fees. If LICENSEE underpays Royalties by more than
five percent (5%) or US $25,000 (whichever is greater) for any
calendar year, LICENSOR may terminate this Agreement at
LICENSOR's sole discretion.
5. QUALITY STANDARDS
(a) STANDARDS. LICENSEE agrees to cause the Licensed Products to
be:
(i) of quality, material, workmanship, condition,
appearance, and image at least equivalent to the
quality, material, workmanship, condition,
appearance, and image of other similar products of
LICENSOR (as described and approved in writing by
LICENSOR in its sole discretion);
(ii) in accordance with this Agreement and all applicable
laws and rules, and within the definition of Licensed
Products, and
(iii) in conformity with designs and samples supplied by
LICENSEE and approved by LICENSOR as provided in this
Paragraph 5.
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(b) RIGHT TO APPROVE OR REJECT. All matters requiring approval of
LICENSOR or the exercise of its discretion shall be at the
sole and absolute discretion of LICENSOR. A submission for
approval shall be deemed disapproved unless LICENSOR delivers
a notice of approval within ten (10) business days after
transmittal by LICENSEE. LICENSOR shall have no obligations to
approve, review or consider any items which do not comply with
the required procedures as set forth in this Paragraph 5(c).
Approval by LICENSOR shall not be construed as either (i) a
determination that the approved matter complies with all
applicable regulations and laws; or (ii) an express or an
implied representation or warranty of merchantability or
fitness of purpose with respect to any Licensing Product. No
disapproved proposed item shall be manufactured, sold, used,
distributed or advertised. LICENSEE may revise any disapproved
item and resubmit it. LICENSEE must strictly comply with all
of LICENSOR's decisions. Upon reasonable notice, LICENSOR may
withdraw approval of any previously approved item, provided,
however, that LICENSEE shall be allowed to sell all previously
approved Licensed Products in accordance with the terms hereof
if such Licensed Products have already been manufactured at
the time LICENSOR has withdrawn it's approval. LICENSEE bears
the entire risk that any sample or production run Licensed
Product does not meet the standards set forth in this
Paragraph 5.
(c) APPROVAL PROCEDURE.
(i) PRODUCTION SAMPLES AND INSPECTION. Prior to the
production or manufacture of any Licensed Product, if
applicable, LICENSEE shall submit for LICENSOR's
prior written approval all final Licensed Product
designs, specifications and color details. After
receiving written approval of the design,
specification and color details, if applicable, and
prior to production of Licensed Product, LICENSEE
agrees to supply to LICENSOR five (5) prototypes
(including the proposed Products, packaging,
advertising, display, labeling, trade dress,
merchandising, and all other material of any
character whatsoever) together with a description of
the intended use of the material of each Licensed
Product for its inspection and approval. LICENSEE
shall be responsible for any and all costs of
shipping and handling incurred in providing the
samples. LICENSOR and GLOBAL shall have the right to
purchase additional samples for their own personal
use at the actual cost of the Licensed Products plus
shipping and handling.
(ii) REJECTED GOODS. If Licensed Products manufactured do
not conform to previously approved confirmation
samples LICENSOR shall have the sole right to
withdraw its approval and LICENSEE shall have thirty
(30) days cure period to re-submit for approval.
LICENSEE immediately shall cease production,
advertising, sale and/or distribution of the rejected
goods until such time as the manufactured Licensed
Products conform to the approved confirmation
samples. This Agreement shall remain in full force
and effect as to Licensed Products not affected by
this Paragraph.
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(iii) NONCONFORMING GOODS. If the appearance or quality of
any Licensed Product ceases to be acceptable to
LICENSOR, LICENSOR shall have the right, in the
exercise of its sole subjective discretion, to
withdraw its approval of such Licensed Product. Upon
receipt of written notice from LICENSOR of its
election to withdraw such approval with respect to
any Licensed Product, LICENSEE shall immediately
cease the use of the Property in connection with the
promotion, advertising, sale, manufacture,
distribution or use of such Licensed Product.
LICENSEE may complete all work in process. Notice of
such election by LICENSOR to withdraw approval shall
not relieve LICENSEE from its obligation to pay
Royalties on sales of such Product made by LICENSEE
to the date of disapproval or thereafter as
permitted. LICENSEE agrees to neither sell nor expose
to the public any goods not conforming to the
standards in Paragraph 5(a) unless, and only if, all
Property is completely removed and are not used in
any connection with their sale or distribution.
(d) APPROVAL OF FACILITIES. LICENSEE shall provide the addresses
of all facilities, including third party manufacturers, at
which the Licensed Products are manufactured. LICENSOR and
GLOBAL shall have the right to inspect and approve all such
facilities of LICENSEE. LICENSEE's agreements with third party
manufacturers shall provide for the right of LICENSOR and
GLOBAL to inspect such third party's facilities. All
inspections shall be during regular business hours upon ten
(10) business days notice to LICENSEE or LICENSEE's third
party manufacturers. Inspections may include any reasonable
actions necessary to assure LICENSOR that the Licensed
Products are made in accordance with this Agreement, including
but not limited to laboratory testing.
(e) LICENSEE shall supply LICENSOR and GLOBAL with five (5)
samples of each of the completed Licensed Products, promptly
upon completion. LICENSEE shall be responsible for any and all
costs of shipping and handling incurred in providing said
samples under this Agreement. LICENSOR and/or Global shall
have the right to purchase additional samples for their own
personal use at the actual cost of the Licensed Products, plus
shipping and handling.
6. CONFIDENTIALITY For purposes of this Agreement, "CONFIDENTIAL
INFORMATION" shall mean information or materials regarded by each party
as its confidential information, including pricing information,
manufactures names, and any formula, pattern, compilation, program,
device, method, technique, process, information related to its past,
present or future research, development or business affairs, and its
proprietary products, materials, concepts, know-how or methodologies
and that (i) derives independent economic value, actual or potential,
from not being generally known to the public or to other persons who
can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy. Both parties agree to keep all Confidential
Information of LICENSOR and LICENSEE strictly confidential and to use
such knowledge only to the exercise and performance of its respective
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rights and obligations under this Agreement; except that Licensed
Products may be displayed and any detail evident from examination of a
Licensed Product may be disclosed only at and after the line-break
applicable to that Licensed Product and season. Upon expiration or
termination of this Agreement, whichever first occurs, LICENSEE shall
return all designs, patterns, samples and other embodiments of
Confidential Information not yet disclosed as provided in the preceding
sentence.
7. INTELLECTUAL PROPERTIES
(a) PROPERTY VALUE. LICENSEE acknowledges that the Property has
great value and associated goodwill because the public and the
industry associate the Property with goods having consistently
high quality that are sold primarily by retailers of high
repute who sell primarily high quality goods and who maintain
high merchandising standards. LICENSEE shall use its
commercially reasonable efforts to preserve the value and
goodwill of the Property and to cooperate with LICENSOR's
efforts to preserve their value and goodwill as contemplated
by this Agreement.
(b) PROPERTY OWNERSHIP. LICENSEE (as between LICENSOR and
LICENSEE) acknowledges LICENSOR's ownership of the Property,
and acknowledges that all use of such Property inures to the
exclusive benefit of LICENSOR. LICENSEE shall not at any time
either during or after the Term of this Agreement:
(i) claim ownership of or attempt to register the
Property;
(ii) do or commit any act which would adversely affect the
validity of the Property;
(iii) infringe LICENSOR's rights in the Property;
(iv) use any business name with the Property in it;
(v) seek to cancel the Property rights; or
(vi) engage in any activity which may contest, dispute,
dilute or otherwise impair the right, title, interest
or goodwill of LICENSOR in the Property. For the
purpose of protection of rights in the Property only,
all uses of the Property made by or on behalf of the
LICENSEE are deemed to have been made by LICENSOR.
(c) REGISTRATIONS:
(i) LICENSEE shall, at LICENSOR's cost, cooperate with
LICENSOR and GLOBAL in the execution, filing and
prosecution of trademark, copyright or patent
applications; LICENSEE shall, at LICENSOR's cost,
supply LICENSOR and GLOBAL with samples for
applications. LICENSEE shall cooperate with LICENSOR
and GLOBAL in making and terminating registered user
entries. LICENSOR shall pay all costs and fees in
connection with filing and prosecution of trademarks,
copyrights and patents. These obligations shall
survive termination.
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(ii) LICENSOR and LICENSEE shall file applications and
documents with the appropriate government office, as
required by law or as deemed prudent by LICENSOR, at
LICENSOR's sole cost.
(d) INFRINGEMENTS. LICENSEE shall immediately give notice to
LICENSOR and GLOBAL, by telephone and in writing, of any
infringement or misuse of any Property by any third party of
which LICENSEE becomes aware. LICENSOR shall have the right,
but not the requirement, to commence legal action regarding
any misuse at its expense. LICENSEE shall reasonably cooperate
in any infringement action commenced by LICENSOR or GLOBAL as
LICENSOR shall require; PROVIDED, HOWEVER, that any and all
costs incurred by LICENSEE in connection with such litigation
shall be borne by LICENSOR, except nominal or sample costs
shall be borne by LICENSEE. Notwithstanding the foregoing,
LICENSEE shall not be required to join any such action
commenced by LICENSOR. If LICENSOR does not commence such
action, LICENSEE may prosecute such action at its cost and
risk.
8. INDEMNITY; INSURANCE; REPRESENTATIONS
(a) INDEMNITY. LICENSEE agrees to indemnify, defend and hold
harmless LICENSOR and GLOBAL, and each of their respective
shareholders, members, directors, officers, employees and
agents from and against any and all obligations, liabilities,
claims, demands, suits, actions, causes of action, damages and
expenses (including but not limited to reasonable attorney's
fees) caused by or arising from LICENSEE's manufacture,
labeling, use, sale or distribution of Licensed Products or
any other goods, or from product liabilities arising from the
manufacture, use or sale of any of the Licensed Products or
other goods by LICENSEE, or from any alleged defect in a
Licensed Product regardless of whether the action is based
upon negligence or strict liability, and regardless of whether
the alleged negligence of LICENSEE is characterized as
"passive" or "active"; or from unauthorized use by LICENSEE of
LICENSOR's rights in the Property, or from any casualty or
other risk of loss, damage or destruction of the Licensed
Products or any materials, supplies or inventory therefor, or
for any violation of any warranty, representation or agreement
made by LICENSEE pertaining to a Licensed Product. Anything
herein to the contrary notwithstanding, LICENSEE shall have no
obligation to indemnify LICENSOR for its negligence or willful
misconduct.
(b) INSURANCE. LICENSEE shall maintain comprehensive general
liability insurance in the amount of at least One Million
Dollars ($1,000,000) (combined single limit per occurrence)
and Two Million Dollars ($2,000,000) aggregate per year, plus
defense costs. This insurance shall include broad form blanket
contractual liability, products and completed operations
liability, including protection for LICENSOR its shareholders,
members, directors, officers, employees and agents (including
Global) against any claims, damages, liabilities, costs and
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expenses (including attorney's fees) arising out of any
alleged defect (whether latent or patent) in any and all
Licensed Products manufactured, distributed, sold or otherwise
disposed of by LICENSEE. LICENSEE shall purchase insurance
against theft and destruction of the Licensed Products which
shall: 1) be written on an "all-risk" basis; 2) provide that
LICENSEE shall be reimbursed for loss in an amount equal to
the manufacturer's selling price for the Licensed Products
(this may be accomplished by either a selling price
endorsement or business interruption insurance); 3) provide
that LICENSOR is an added as additionally named loss payee
with respect to loss of Licensed Products; 4) be in effect
while goods are on premises owned, rented and controlled by
LICENSEE and while in transit or storage; and 5) include a
brand and label clause stating that the insurer will pay the
cost of removing LICENSOR's name from damaged merchandise and
labeling goods. The insurance shall include: 1) a
cross-liability endorsement; 2) an endorsement stating that
LICENSOR shall receive at least thirty (30) days written
notice prior to modification, cancellation or non-renewal of
coverage; 3) an endorsement naming LICENSOR as a named
insured; 4) an endorsement stating that the insurance
purchased by LICENSOR shall only apply in excess of the
insurance purchased by LICENSEE; 5) a waiver of subrogation in
favor of LICENSOR; and 6) an endorsement stating that LICENSOR
may recover for any loss caused to LICENSOR, or their
respective shareholders, members, directors, officers,
employees or agents (including Global) by the negligence
(including active, passive and gross negligence) of LICENSEE.
All insurance shall be obtained from an insurance company
Best's rated A, class 10 or better acceptable to LICENSOR.
LICENSEE shall give LICENSOR and insurance policy that would
affect the status or benefits of LICENSOR or GLOBAL. This
insurance may be obtained for LICENSOR by LICENSEE in
conjunction with a policy which covers products other than the
Licensed Products. LICENSEE shall furnish certificates and
endorsements of the required insurance policies. Upon request,
LICENSEE shall provide copies of policies. The insurance set
forth in this section shall cover the entire Territory.
(c) If either party learns of a claim related to this Agreement or
the Licensed Products, it shall immediately notify the other
party by telephone, and in writing transmitted by nationally
recognized overnight courier, of the subject matter, the
parties and the nature of the claim. If the claim pertains to
any of LICENSEE's obligations under this Agreement or the
Licensed Products, LICENSEE shall promptly inform LICENSOR of
what steps it is taking to correct the claim or complaint
whether by consumer or a government body. LICENSOR and
LICENSEE shall cooperate in the resolution of all such claims.
(d) NO REPRESENTATIONS. LICENSOR has made no representation or
warranty, except as expressly provided, with respect to the
Licensed Products. Notwithstanding anything to the contrary
contained herein, LICENSOR represents and warrants that
LICENSOR holds valid U.S. federal trademark registrations in
and to the Property. Furthermore, LICENSOR represents and
warrants that it shall comply with any applicable laws with
respect to its intellectual property rights and obligations
under this Agreement. There are no implied warranties for
merchantability or fitness for any particular purpose.
12
Notwithstanding the foregoing, LICENSOR acknowledges and
agrees that once LICENSOR approves LICENSEE's submissions in
accordance with Section 5 of this Agreement, such approval
shall be deemed LICENSOR's consent to concept and design of
the Licensed Products provided in no event shall LICENSOR be
liable for any breach of any implied or express warranty of
merchantibility or fitness for any purpose.
(e) NO LEGAL IMPEDIMENTS. The parties represent and warrant that:
(i) they have the full right, power and authority to
enter into this Agreement and to perform all
obligations;
(ii) they are financially capable of performing their
obligations.
(f) LICENSEE REPRESENTATIONS. LICENSEE warrants and represents
that it is a New Jersey corporation, validly existing and in
good standing under the laws of New Jersey. LICENSEE further
represents and warrants that it will use its commercially
reasonable efforts to market the Licensed Products. LICENSEE
further represents that entering into this Agreement will not
result in the violation of: (i) the organizational documents
or bylaws of LICENSEE, (ii) any agreement, contract, lease,
license, document or other commitment, written or oral, to
which LICENSEE is a party or may become bound, or (iii) any
applicable law, rule, license or regulation.
(g) LICENSOR Representations. LICENSOR warrants and represents
that it is a California corporation, validly existing and in
good standing under the laws of California. LICENSOR further
represents that entering into this Agreement will not result
in the violation of : (i) the organizational documents or
bylaws of LICENSOR, (ii) any agreement, contract, lease,
license, document or other commitment, written or oral, to
which LICENSOR is a party or may become bound, or (iii) any
applicable law, rule, license or regulations.
(h) COMPLIANCE WITH LAW. Both parties shall take all actions
required by any local, provincial, national or regional
agency, government or commission to carry out the purposes of
this Agreement in compliance with applicable law (including,
but not limited to any applicable child labor laws and/or
regulations). Both parties shall immediately provide each
other with copies of any communications to or from any such
agency, government or commission which relates to or affects
this Agreement or the Licensed Products.
9. TERMINATION
(a) OTHER RIGHTS UNAFFECTED. Termination on any ground shall be
without prejudice to any other rights or remedies.
13
(b) TERMINATION FOR BREACH OR MATERIAL BREACH. If LICENSEE or
LICENSOR breaches any of its obligations, the other may
terminate this Agreement by transmitting to the breaching
party a notice of termination (the "NOTICE OF TERMINATION"). A
material breach may or may not be specifically designated as
such in this Agreement. Termination will become effective
automatically unless the breaching party completely cures the
breach within five (5) business days of giving the Notice of
Termination if the breach is a failure to pay money or within
ten10 business days of the giving of such Notice of
Termination if the breach is any other breach except as
otherwise herein provided. If the LICENSEE is the breaching
party, pending cure, the LICENSEE may continue to ship
Licensed Products PROVIDED the breach is being cured in
good-faith. Upon the giving of a Notice of Termination for the
third time, for any reason, the breaching party shall no
longer have the right to cure any violation, and termination
shall be effective upon the giving of the Notice of
Termination.
(c) GROUNDS FOR IMMEDIATE TERMINATION.
(i) CHANGE OF OWNERSHIP: The right of LICENSOR to approve
or disapprove any transfer of all or part of the
ownership of LICENSEE (whether by sale of
substantially all its assets or by transfer of shares
of its stock) shall be at the sole discretion of
LICENSOR. If Licensee breaches Paragraph 1(c); if
there is a change in more than fifty percent (50%) of
the ownership of LICENSEE (except for change in
ownership due to transfers for estate planning
purposes); if LICENSEE sells or otherwise disposes of
fifty percent (50%) or more of its stock or assets;
or, if any of the key executives listed in SCHEDULE
9(C) leaves LICENSEE, LICENSOR shall have the right
to immediately terminate.
(ii) LICENSEE'S INSOLVENCY: LICENSOR may terminate if: a
petition for relief under the Bankruptcy Code is
filed by or against the LICENSEE; LICENSEE makes any
assignment for the benefit of its creditors; LICENSEE
becomes the subject of proceedings under any
insolvency, reorganization or receivership law;
LICENSEE defaults on any obligation which is secured
by a security interest, in whole or in part, in the
Licensed Products in an amount in excess of $100,000
and is not cured within the sixty (60) day cure
period; or, a receiver is appointed for LICENSEE or a
substantial part of its business interests.
Termination will become effective automatically sixty
(60) days after LICENSOR gives notice if LICENSEE:
fails to discharge the bankruptcy or terminate the
assignment for the benefit of creditors. The license
and rights granted are personal to LICENSEE. No
assignee for the benefit of creditors, receiver,
debtor in possession, trustee in bankruptcy, sheriff
or any other officer or court charged with taking
over custody of LICENSEE's assets or business, shall
have any right to continue performance of this
Agreement or to exploit or in any way use the
Property if this Agreement is terminated pursuant to
the preceding subparagraph, except as may be required
by law.
(iii) LICENSOR's Insolvency: LICENSEE may terminate if: a
petition for relief under the Bankruptcy Code is
filed by or against LICENSOR; LICENSOR makes any
assignment for the benefit of its creditors; LICENSOR
becomes the subject of proceedings under any
insolvency, reorganization or receivership law;
14
LICENSOR defaults on any obligation which is secured
by a security interest, in whole or in part, in the
Licensed Products in an amount in excess of $100,000
and is not cured within the sixty (60) day cure
period; or, a receiver is appointed for LICENSOR or a
substantial part of its business interests.
Termination will become effective automatically sixty
(60) days after LICENSEE gives notice if LICENSOR:
fails to discharge the bankruptcy or terminate the
assignment for the benefit of creditors. The license
and rights granted are personal to LICENSOR. No
assignee for the benefit of creditors, receiver,
debtor in possession, trustee in bankruptcy, sheriff
or any other officer or court charged with taking
over custody of LICENSOR's assets or business, shall
have any right to continue performance of this
Agreement or to exploit or in any way use the
Property if this Agreement is terminated pursuant to
the preceding subparagraph, except as may be required
by law.
(iv) QUALITY AND MARKETING DEFAULTS: LICENSOR may
immediately terminate this Agreement with no right of
cure, if:
(1) LICENSEE understates Royalties and/or
payments due for any report by more than
five percent (5%) or US$25,000, whichever is
greater, makes any unreported sales or
knowingly misrepresents or misstates
material information in any other report
required or requested under this Agreement;
(2) LICENSEE ceases to do business;
(3) LICENSEE ceases to market any of the
Licensed Products for more than three (3)
consecutive months;
(4) events occur that call for immediate
termination as expressly provided elsewhere
in this Agreement; or
(5) LICENSEE markets products using the Property
not submitted for approval; or for which no
approval is granted.
10. OBLIGATIONS AT EXPIRATION OR TERMINATION
(a) TERMINATION OF RIGHTS. Upon expiration or termination of this
Agreement for any reason, all rights in the Property granted
to LICENSEE shall automatically terminate and LICENSEE shall
cease and desist from any and all manufacture, sale,
distribution or disposal of the Licensed Products, or any use
of the Property or of any Licensed Products or Property which
are substantially or confusingly similar to the Property,
except as specifically provided in this Paragraph.
Furthermore, upon LICENSOR paying for same, LICENSEE shall
immediately turn over to LICENSOR any production molds and/or
materials created and/or used in connection with the Licensed
Products.
15
(b) INVENTORY. Upon LICENSOR's request, within ten (10) days after
the expiration of this Agreement or, in the event of its
termination or non-renewal, within ten (10) days after the
receipt of a Notice of Termination or a notice of non-renewal
or the happening of an event which terminates this Agreement
where no notice is required, LICENSEE shall give LICENSOR and
GLOBAL a written statement showing: i) the Licensed Products
in its possession or under its control; ii) location of the
inventory; iii) work in process; and iv) Licensed Products in
transit. LICENSEE shall dispose of these goods only pursuant
to the specific terms of this Paragraph 10.
(c) OTHER ITEMS BEARING THE PROPERTY. All items other than the
Licensed Products, bearing the Property, such as stationary,
business cards, etc., shall be at LICENSEE's option recycled,
destroyed or delivered to LICENSOR immediately upon
termination or expiration.
(d) CONCLUDING SALES. LICENSEE shall not undertake any new
production, that would be delivered after the date of
expiration or termination. At LICENSOR's reasonable request,
LICENSEE shall provide LICENSOR with relevant information
regarding LICENSEE's concluding sales of the inventory which
LICENSOR considers important for maintaining the good-will of
LICENSOR's brand. Additionally, at LICENSOR's reasonable
request, LICENSEE shall facilitate LICENSOR's direct contact
with any third parties involved in the sale and distribution
of the Licensed Products. The right of LICENSEE to sell off
inventory under this Paragraph is also subject to LICENSOR's
right of first refusal to buy the inventory as provided in
Paragraph 10(e).
(e) RIGHT TO PURCHASE. LICENSOR or LICENSOR's designee shall have
the option (but not the obligation) to purchase all or any
part of LICENSEE's inventory of Licensed Products upon the
following terms:
(i) LICENSOR shall notify LICENSEE of the intention to
exercise this option within fifteen (15) days of
delivery of the list of inventory and shall specify
the Licensed Products to be purchased.
(ii) If termination is due to LICENSEE's breach, the price
for Licensed Products shall be LICENSEE's standard
cost (the actual manufacturing cost if manufactured
by LICENSEE) and LICENSEE's Landed Cost, herein
defined, (if not manufactured by LICENSEE.) "LANDED
COST" means the F.O.B. price of Licensed Products
together with customs, duties, and brokerage,
demurrage, freight and insurance. If the Agreement
expires by its own terms or due to LICENSOR's breach,
the prices for Licensed Products shall be those
offered by LICENSEE to its own favored customers.
(iii) LICENSEE shall deliver the Licensed Products
purchased within fifteen (15) days of receipt of the
notice to purchase. The purchase price shall be
payable upon delivery; provided that LICENSOR shall
be entitled to deduct any amounts owed it by
LICENSEE.
16
(f) WAIVER OF GOODWILL. LICENSEE waives any claim which it may
have arising from any alleged goodwill created by LICENSEE
from the alleged creation or increase of a market for Licensed
Products.
(g) RIGHT TO MANUFACTURE AND OFFER FOR SALE. Without Limiting
LICENSOR's other rights in this Agreement, at any time during
the three (3) months preceding expiration or termination,
LICENSOR or any new licensee shall have the right to
manufacture, show, advertise and take orders for the Licensed
Products for delivery following said expiration or
termination.
(h) RIGHT OF SELL-OFF; DISPOSAL OF INVENTORY. Anything herein to
the contrary notwithstanding, upon expiration or termination
of this Agreement, subject to LICENSOR's right to purchase
LICENSEE's inventory under Paragraph 10(e), LICENSEE shall
have the right to sell off all of its inventory for a three
(3) month period, commencing the date of the expiration or
termination of this Agreement. Such right of sell-off is
subject to LICENSEE complying with the royalty payment
provisions of this Agreement. All inventory not disposed of in
accordance with this Paragraph shall be destroyed.
(i) SUPPLIES BEARING THE PROPERTY. Upon the sooner of termination
or thirty (30) days prior to expiration, LICENSEE shall
provide:
(i) the name, addresses and phone numbers of each
supplier on any item bearing the Property; and
(ii) an inventory of all supplies of any type bearing the
Property, which shall specify the location of such
items.
(j) LICENSEE, at its option, shall use its commercially reasonable
efforts to either (1) purchase all items bearing the Property
held by any supplier and shall have all such items delivered
to LICENSOR, at LICENSOR's cost or (2) cause the Property to
be removed from all items bearing the Property held by any
supplier. The purchase price to be paid by LICENSOR for such
items shall be determined in accordance with Paragraph
10(e)(ii).
11. NOTICE AND APPROVALS. Any notice, approval, consent or agreement
required or permitted under this Agreement shall be effective only if
in writing, signed by an officer of the party giving notice, and
delivered in person, or mailed by nationally recognized overnight
courier or transmitted by facsimile transmission with electronic
confirmation of receipt to the addressee's address or facsimile number
set forth below (or such other address or facsimile number as the party
changing its address specifies in a notice to the other party
specifically referring to this Paragraph):
17
If to LICENSOR:
Genius Products, Inc.
Attention: President
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Tel (000) 000-0000
Fax (000) 000-0000
With a copy to:
Global Icons, LLC
Attention: Xxx Xxxxxx
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Tel (000) 000-0000
Fax (000) 000-0000
With a copy to:
Silver & Xxxxxxxx
Attention: Xxxxx X. Silver
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Tel (000) 000-0000
Fax (000) 000-0000
If to LICENSEE:
Xxxxxx Apparel Group
Attention: Xxxxxxx Xxxxxxxxxx
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Tel (000) 000-0000
Fax (000) 000-0000
With a copy to:
Goodkind, Labaton, Rudoff and Sucharoww, LLP
000 Xxxx Xxx.
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Tel (000) 000-0000
Fax (000) 000-0000
18
Notice shall be deemed given as of the date actually received by the last of the
addressee party and that party's copy recipient to receive the notice as
evidenced by acknowledgment of receipt, delivery in person, the date on the
postal return, or electronic confirmation in the case of facsimile
transmissions.
12. INTERPRETATION The License Agreement shall be interpreted to give
LICENSOR maximum control of its Property and the usage of the Property.
The caption headings of the sections are for convenience only and shall
not be used for interpretation.
13. GOVERNING LAW/ JURISDICTION/ VENUE All questions concerning this
Agreement, the rights and obligations of the parties, its enforcement,
and its validity, effect, interpretation and construction which are
governed by state law shall be determined under the laws of the State
of California. All national law questions shall be governed by the laws
of the United States of America; except that if LICENSOR seeks
provisional relief, the law of the place where the provisional relief
is sought shall apply. LICENSOR and LICENSEE agree to be subject to
jurisdiction in Los Angeles County, California and in the federal
district court situated therein and if there is no federal
jurisdiction, state courts of California.
14. RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be
construed to place the parties in the relationship of legal
representatives, partners, joint venturers or agents. LICENSEE shall
have no power to oblige or bind LICENSOR or GLOBAL in any manner except
as provided.
15. WAIVER AND INTEGRATION; AMENDMENTS. The failure of a party to insist
upon strict adherence to any term of this Agreement, or to object to
any failure to comply with any provision of this Agreement, shall not
be a waiver of that term or provision, estop that party from enforcing
that term or provision, or preclude that party from enforcing that term
or provision by estoppel or by laches. The receipt by a party of any
benefit from this Agreement (e.g., Royalty) shall not be construed as a
waiver or estoppel of the right of that party to enforce any section.
None of the terms of this Agreement shall be deemed to be waived or
modified, including all provisions of this Paragraph, except by an
express agreement in writing, signed by an authorized officer of the
party against whom enforcement of the waiver or modification is sought,
supported by a new consideration. This Agreement, including all
attachments, constitutes the entire agreement between the parties, and
supersedes all prior negotiations and agreements between the parties
concerning its subject matter. This writing is intended as the final,
complete and exclusive statement of the terms of the Agreement between
the parties and cannot be changed or terminated orally.
19
16. INTEGRATION. This Agreement, and all Schedules referenced herein,
constitutes the entire, final and exclusive agreement between the
parties with respect to the matters set forth herein; any and all prior
agreements, whether written or oral, with respect to the matters set
forth herein, are superseded by this Agreement.
17. ATTORNEYS' FEES AND PROFESSIONAL EXPENSES. If any legal action or
dispute arises under this Agreement, arises by reason of any asserted
breach of it, or arises between the parties and is related in any way
to the subject matter of the Agreement, the prevailing party shall be
entitled to recover all costs and expenses including reasonable
attorneys' fees, investigative costs, accounting fees and charges for
experts. The "PREVAILING PARTY" shall be the party who is entitled to
recover its costs of suit, whether or not the suit proceeds to final
judgment; if there is no court action, the prevailing party shall be
the party who wins any dispute. A party need not be awarded money
damages or all relief sought in order to be considered the "prevailing
party" by a court.
18. SURVIVAL All obligations of the parties of a continuing nature shall
survive the termination or expiration of this Agreement.
19. SEVERABILITY. If any provision of this Agreement is held by a court of
competent jurisdiction or an arbitrator to be invalid or unenforceable,
the remaining provisions of this Agreement shall remain in full force
and effect.
20. BINDING AGREEMENT This Agreement shall be binding on and inure to the
benefit of the parties and their respective successors, agents,
affiliates, representatives and permitted assigns.
21. EXHIBITS/SCHEDULES All Exhibits or Schedules are incorporated into this
Agreement.
22. REMEDIES. All specific remedies provided for in this Agreement shall be
cumulative and shall not be exclusive of one another or of any other
remedies available in law or equity.
23. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which together will constitute the same
agreement, whether or not all parties execute each counterpart.
24. MISCELLANEOUS
(a) CD HANG-TAGS. LICENSOR shall provide LICENSEE with CD
Hang-Tags at $0.40 ("Set Price") per CD Hang-Tag, provided
that LICENSEE requests such CD Hang-Tags ninety (90) days
prior to the date LICENSEE would require LICENSOR to deliver
20
such CD Hang-Tags. In the event that LICENSEE requires LICNSOR
to deliver such CD Hang-Tags within a shorter period of time,
the Set Price shall be adjusted accordingly to cover
LICENSOR's expenses related to the accelerated delivery
schedule of such CD Hang-Tags.
(b) INCLUSION OF LICENSOR'S/EXISTING AND FUTURE LICENSEES'
PRODUCTS. LICENSEE shall use its commercially reasonable
efforts to include in its gift sets (as defined in Schedule
1(b)) products manufactured by LICENSOR and/or any of
LICENSOR's existing and/or future licensees.
(c) CONSENTS/REQUESTS/APPROVALS: All consents, requests and
approvals required under this Agreement shall not be
unreasonably withheld or delayed.
IN WITNESS WHEREOF the parties hereto have executed this License Agreement
as of the day and year first above written.
LICENSOR:
By: /S/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
Its: President
LICENSEE:
By:
--------------------------------------
Name:
Its: President
21
SCHEDULE A
----------
PROPERTY
NAME REGISTRATION # PRODUCT CLASS
---- -------------- -------------
1. "Baby Genius"
22
SCHEDULE 1(a)
-------------
DEFINITION OF LICENSED PRODUCTS
A. APPAREL:
1. Coveralls
2. Overall Sets
3. Pants Sets
4. Boy & Girls Basics
5. Tee Shirts
6. Short Sets
7. Diaper Sets
8. Rompers
9.Creepers
10. Xxxxxxxx Sets
11. Knit & Woven Short Sets
12. Dresses
13. Sportswear and Playwear
14. Accessories (i.e., bootie, socks, visors, hats/caps, headbands &
scrunches) may be sold in gift sets only, with any of the items listed
above, but not separately.
All of the above apparel shall be in sizes 0-4 T (i.e., newborn, infant and
toddler sizes) for boys and girls.
B. LAYETTE GIFT SETS:
1. FEEDING LAYETTE:
----------------
a. Spoon
b. Fork
x. Xxxxxx Cup
d. Bottle
e. Bowl
f. Bibs
g. Rattles
h. Pacifier
23
2. BATH SET LAYETTE:
----------------
a. Sponge
b. Wash Cloths
c. Song Ball
d. Robe
e. Comb
f. Brush
g. Mirrors
All of the Layette Gift Sets shall always include apparel.
24
SCHEDULE 1(b)
-------------
CHANNELS OF DISTRIBUTION
The following Channels of Distribution apply to this License Agreement only if
initialed by the authorized signatory of Licensor:
1. Distribution to the following tier of retailer from commencing upon execution
of this Agreement and ending upon the expiration of the Agreement:
o Mid-tier
o Department stores
o Specialty stores
o Record stores
o Airport shops
o Duty Free shops
o Internet
o Direct mail order sales
o Mass market
o Drug chains
o Supermarkets
25
