AMENDMENT TO LICENSE AND PURCHASE AGREEMENT
AMENDMENT TO LICENSE AND PURCHASE AGREEMENT, made as of the 8th day of
March, 2002 (the "Amendment") between HUMAN PHEROMONE SCIENCES, INC., having an
office at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Licensor"), and NICHE MARKETING, INC. having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Licensee").
W I T N E S S E T H
WHEREAS, by that certain License and Purchase Agreement (the "Agreement")
dated April 24, 2000 between Licensor and Licensee, Licensor granted Licensee an
exclusive license to produce, promote, advertise and sell REALM and innerREALM
fragrances and toiletry products, line extensions and new products carrying the
REALM and innerREALM name or variations thereof in certain territories (the
"Territories") during the license period; and
WHEREAS, pursuant to the Agreement, the Licensee agreed to pay Licensor
royalties (the "Royalties") as well as produce the Products for the Licensor at
direct cost plus a markup of twenty (20%) percent for re-sale by Licensor in
certain other territories (the "Excluded Territories"); and
WHEREAS, the parties wish to amend the Agreement as to their rights and
obligations under the Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the sufficiency of which are hereby acknowledged, it is mutually agreed as
follows:
1. Agreement: Except as otherwise set forth herein, every other term of
Agreement shall remain in full force and effect.
2. Purchase of Products by Licensor: Articles 1, 16 and 22 of the Agreement
affecting the rights of the Licensor to purchase the Products, and Licensee's
obligation to produce such Products, are hereby amended as follows:
(i) Article 1, Grant of License shall read as follows:
Licensor grants an exclusive license to Licensee under which Licensee shall
have the right to produce or have produced, promote, advertise and sell in all
classes of trade, including but not limited to, retail sales, mass market sales,
close out sales, catalog sales, internet sales, and direct response sales REALM
and innerREALM fragrances and toiletry products, line extensions and new
products carrying the name of REALM or a variation thereof in the Territories
("Licensed Products") provided during the license period of the Agreement. The
license to use the names REALM and innerREALM shall be granted free of all liens
and encumbrances during the term of the Agreement and each extension thereto in
the Territories. Licensee shall also have the right of first refusal to sell the
Licensed Products in the Excluded Territories (except there shall be no right of
first refusal with respect the Excluded Territories into which Licensor has
previously sold the Licensed Products, and to the Philippines), in exchange for
which Licensee grants to Licensor an exclusive license for any Licensed Products
developed by Licensee for Licensor's sale in the Excluded Territories subject to
the secondary packaging restrictions set forth below.
The term "Licensed Products" as used herein shall be defined as:
2
(a) fragrance products consisting of perfume, eau de parfum, eau de
toilette, cologne and after shave (the "Fragrance Products"); and
(b) ancillary products consisting of all other products under the REALM and
innerREALM trademarks including body lotions, creams and gels (the
"Ancillary Products").
(ii) Article 16, Purchase of Products by Licensor After the Close
shall read as follows:
Fragrance Product requirements of the Licensor for its personal needs
(local donations, personal gifts, etc.) from time to time are not included in
Schedule 1 annexed hereto. Fragrance Product requirements of the Licensor for
re-sale into the Excluded Territories shall be as set forth in Schedule 1
annexed hereto, and shall be accompanied by a Purchase Order, if one has not
already been placed prior to the execution of this Amendment. Licensee shall
sell such Fragrance Products to Licensor at Licensee's direct cost plus a markup
of twenty (20%) percent. Notwithstanding anything contained in the Agreement to
the contrary, after Licensee has fulfilled the production requirements set forth
in Schedule 1, Licensor shall have no further right to require and Licensee
shall have no further obligation to produce the Fragrance Products for Licensor.
Thereafter, any Fragrance Products to be sold by Licensor in the Excluded
Territories will either be manufactured by the Licensor, or its designee outside
the United States and its territories and shall bear different secondary
packaging (outside carton) than that produced by Licensee within the
Territories, and shall additionally contain English and country of destination
national language, bearing a label indicating HPSI as the manufacturer. HPSI
shall retain the exclusive rights to all such different secondary packaging.
Secondary packaging for sales of the Fragrance Products to
3
Japan and Hong Kong/China may be of the same design and color as those sold
within the Territories, but must comply with the language and labeling
requirements set forth above.
Licensor further agrees to produce the Ancillary Products for re-sale by
Licensor in the Excluded Territories provided, however, that Licensor will
provide at least three (3) months advance notice of the types and quantities of
Ancillary Products required and, if the total quantities exceed 240 units at one
time, by submission of a Purchase Order. Notwithstanding the foregoing, Licensee
shall not be required to produce more than 1,500 total units of Ancillary
Products combined per year and may refuse to produce any or all such units at
any time before accepting a Purchase Order, for any or no reason. Purchase
Orders will be considered as accepted by Licensee if not rejected within seven
(7) business days after receipt.
(iii) Article 22, Licensee Obligations. Shall read as follows:
****
(C) LICENSEE SHALL EXERCISE ITS BEST EFFORTS TO PRODUCE OR HAVE
PRODUCED SUFFICIENT QUANTITIES OF THE FRAGRANCE PRODUCTS INDICATED ON SCHEDULE 1
ANNEXED HERETO TO MEET THE NEEDS INDICATED ON SUCH SCHEDULE.
****
3. Component Products: Licensee shall provide reasonable component products
to the Licensor above and beyond the quantities included in Schedule 1 annexed
hereto until component vendors are able to supply such components to HPSI under
Purchase Orders placed by HPSI prior to the execution of this Amendment.
Estimates of such needs will be provided to Niche at the time of the execution
of this Amendment. Niche shall not,
4
however, be required to provide component products that would materially
endanger Niche's ability to fulfill its currently existing orders. In addition,
the Operations Executive of Niche and the Operations Executive of HPSI will work
together in good faith to coordinate orders for all components in an effort to
increase the quantities being produced by any component vendor at one time and
thereby increase the chance that both Licensor and Licensee will receive lower
prices for the component products based upon increased quantities.
4. The Territories: The Territories included in Article 2 of the Agreement
shall exclude the Philippines. In exchange for Licensee's ceding this territory
to Licensor, Licensor will pay Licensee the sum of $160,000 upon execution of
this Agreement. Upon receipt and clearance of such payment, the Philippines
shall become a territory of HPSI in perpetuity.
5. Counterparts: This Amendment may be executed in counterparts, each of
which shall constitute an original, but all such counterparts shall together
constitute but one and the same instrument. An electronic version, facsimile or
photocopy of this Amendment or any signature hereon shall be deemed an original.
IN WITNESS WHEREOF, the parties have duly executed this Amendment on the
dates indicated below.
HUMAN PHEROMONE SCIENCES, INC. NICHE MARKETING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇▇
Its: Chairman, CEO Its: General Counsel
Dated: March 7, 2002 Dated: March 8, 2002
5
The undersigned, as Guarantor, has read the terms and conditions of the
within Amendment to the License and Purchase Agreement executed by and between
Niche Marketing, Inc. as Licensee and Human Pheromone Sciences, Inc. as
Licensor, agrees to be bound by its terms and to Guarantee the performance of
Licensee under this Amendment.
NORTHERN GROUP, INC.
By: ▇▇▇▇ ▇▇▇▇▇▇
Its: General Counsel
Dated: March 8, 2002
6