EXHIBIT 10.72
GUND, INC. LICENSE AGREEMENT
TERM SHEET
1. LICENSEE:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇. 33312
State of Incorporation: Delaware
Contact Name: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
2. LICENSOR:
Gund, Inc.
▇.▇. ▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Contact Name: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
3. REPRESENTATIVE: The Wildflower Group, LLC.
4. PROPERTY: The trademark babyGUND, and all copyrights pertaining to the
babyGUND line, owned by Gund, Inc. Specifically excluded from the Property are
the names of all BABYGUND characters, which Licensee shall not use without
written permission from Licensor. Licensee acknowledges that Licensor has
obtained registrations for the trademark BABYGUND only in the jurisdictions and
International Classes identified in Exhibit D to this License Agreement.
5. DATE OF AGREEMENT: April 6, 2005
6. LICENSED PRODUCTS: Infant and children's cosmetics and toiletries limited
to the following hypoallergenic, non-toxic and 100% safe for children items:
Shampoo;
Hair conditioner;
Hair lotion;
Bubble bath;
Body lotion;
Body cream;
Children's perfume (fragrance water); and
Children's cologne (fragrance water).
In the event Licensee wishes to package a Licensed Product with a babyGUND plush
product, said plush product must be purchased from Licensor. All of such plush
products must have been approved for sale/use by all required regulatory
agencies. The cost to Licensee shall be at Licensor's best price and free of a
royalty charge. Licensee shall pay to Representative the Royalty based on the
net gross sales of the entire Licensed Product/plush toy packaged item, not such
the net gross sales of only the Licensed Product.
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7. TERRITORY: Worldwide
8. CHANNELS OF DISTRIBUTION: Better department stores, duty free shops, gift
shops, perfumeries and baby specialty stores, all subject to further
specification and Licensor approval. Specifically excluded from the distribution
are wholesale clubs, mass-market retailers, supermarkets and drugstores. For
purposes of this agreement, "Mass Market" shall be defined as Wal-Mart, Kmart,
Target and stores trading in a like manner, and "wholesale clubs" shall be
defined as Costco, Sam's and stores trading in a like manner.
9. TERM
(A). INITIAL TERM: From the Date of Agreement to June 30, 2010 as follows:
Year 1 - From date of execution through September 30, 2006
Year 2 - October 1, 2006 through September 30, 2007
Year 3 - October 1, 2007 through September 30, 2008
Year 4 - October 1, 2008 through September 30, 2009
Year 5 - October 1, 2009 through June 30, 2010
(B). RENEWAL TERM: Provided Licensee earns and pays to Licensor Royalties during
the Initial Term that total in excess of one million dollars U.S.
(U.S.$1,000,000), Licensee will have the option to renew this Agreement for one
(1) additional two-year period (the "Renewal Period") upon notifying Licensor in
writing of its intent to renew by no later than March 31, 2010. The Advance and
Guarantee for the Renewal Period are contained in Paragraph 12(b) herein. In the
event Licensee does not earn and pay to Licensor Royalties during the Initial
Term of at least $1,000,000, this Agreement shall terminate upon the expiration
of the Initial Term unless Licensor, at its discretion, elects to renew this
Agreement and Licensee has requested such renewal on a timely basis. The Advance
and Guarantee for the Renewal Period are contained in Paragraph 12(b) herein.
10. ADVANCE: One hundred thousand dollars ($100,000) against first year
royalties.
11.(A) INITIAL TERM GUARANTEE: Five hundred thousand dollars ($500,000),
including the Advance above.
(B) RENEWAL TERM GUARANTEE: Three hundred thousand dollars ($300,000).
12. GUARANTEE PAYMENT SCHEDULE:
(A). INITIAL TERM:
$100,000 due upon Licensee's execution of this Agreement
$100,000 due July 1, 2006
$100,000 due July 1, 2007
$100,000 due July 1, 2008
$100,000 due July 1, 2009
(B). RENEWAL TERM:
$150,000 due July 1, 2010
$150,000 due July 1, 2011
13. ROYALTY: Five Percent (5%) of Net Sales.
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14. ROYALTY DUE DATES: Forty five (45) days after the end of each quarter. All
payments to Licensor shall be made in United States dollars.
15. MARKETING PLAN: On or before January 1, 2006, and before April 1 of each
subsequent year, a yearly marketing plan is to be submitted to Licensor for
approval. The marketing plan is to include, but is not limited to, a specific
description of each product and proposed product launch date, retail launch
strategy, as well as an overall babyGund marketing strategy. Additionally,
Licensee will describe the product time line from concept to completion.
16. MARKETING OBLIGATIONS:
(a) On or before September 1, 2006, subject to Licensee obtaining all of
the required approvals from regulatory agencies, Licensee shall
actively market Licensed Products. If, by that date Licensee fails to
have actively marketed and sold into retail Licensed Products in one or
more categories of Licensed Products, then rights in any category
wherein Licensee has failed to so perform shall revert to Licensor.
(b) Subject to the receipt of regulatory approvals, if Licensee does not by
September 15, 2007 actively, aggressively, and effectively sell the
Licensed Products for any period of six consecutive months, such
failure shall be a material breach of this Agreement.
17. SELL-OFF: Ninety (90) days.
18. DUE DATES: Submission of first product concepts: September 1, 2005.
Sales presentation to retailers: February 28, 2006.
Submission of packaging, hangtags and labels cards, etc:
March 31, 2006.
Submission of samples from first manufacturing run:
June 1, 2006.
Projected Ship Date: June 30, 2006
19. ADVERTISING PROGRAM: Advertising minimum per License Year is ten percent
(10%) of Net Sales of Licensed Products to be spent by Licensee. Licensee will
also show Licensed Products at all of its major trade shows, which is a separate
expense and is not considered as an advertising expense.
Advertising shall be defined as direct out-of-pocket costs (excluding overhead
or allocated costs) for: the purchase of advertising units in newspapers,
magazines, television, radio, billboards (including related artwork and
production charges for these five categories), cooperative advertising, retailer
demonstration charges, retailers' catalogues, gifts-with-purchase including the
free aspect of value sets, direct mail, blow-ins, billing inserts (both scented
and unscented), pamphlets, free goods, window and counter displays (including
testers, dummies, counter cards, and other visual aids), in-store demonstrators
and models, special events, contests, promotions and publicity related expenses
to these special events, contests and promotions.
20. MINIUMUM GENERAL COMPREHENSIVE INSURANCE REQUIRED: $2,000,000
21. SAMPLES: Licensee shall provide Licensor, free of charge, with twelve (12)
samples of each completed product manufactured pursuant to this Agreement.
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GUND LICENSE AGREEMENT
STANDARD TERMS AND CONDITIONS
This Agreement is made as of the date indicated in Paragraph 5 of the
Term Sheet by and between Gund, Inc., a corporation of the State of New Jersey,
having an office and place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Licensor") and Licensee, as identified in Paragraph 1 of the
Term Sheet ("Licensee").
This Gund License Agreement comprises two components: the attached Term
Sheet and the Standard Terms and Conditions.
1. DEFINITIONS.
a) Property. Those particular designs and characters belonging to
Licensor, identified in Paragraph 4 of the Term Sheet, including
adaptations thereof and additions thereto, and such other names and
designs as may be designated by Licensor in writing to be used in
connection herewith.
(b) Licensed Products: Those particular products specified in Paragraph 6
of the Term Sheet and incorporating the Property.
(c) Territory: Those particular territories specified in Paragraph 7 of the
Term Sheet.
(d) Channels of Distribution: Those particular channels of distribution
specified in Paragraph 8 of the Term Sheet.
2. GRANT OF RIGHTS.
(a) Licensee acknowledges that Licensor owns and has all right, good title
and interest in the Property and that the same is fully valid,
subsisting and enforceable.
(b) Licensor hereby grants to Licensee the non-exclusive right during the
Term to manufacture or have manufactured for it and to promote,
advertise, distribute and sell the Licensed Products utilizing the
Property throughout the Territory. Licensee shall have the right to
manufacture or have manufactured for it Licensed Products outside the
Territory subject to Paragraph 6(e) hereof. Notwithstanding the
foregoing, provided Licensee is not in breach of this Agreement,
Licensor shall not license a third party(ies), during the Term in the
Territory, for the Licensed Products granted Licensee herein.
(c) All proprietary rights and goodwill in the Property shall inure to the
benefit of Licensor and not Licensee. Licensee shall acquire no
property rights in the Property by reason of its use thereof, and if,
by operation of law, or otherwise, Licensee is deemed to, or appears
to, own any property rights in the Property, Licensee shall, at
Licensor's request, execute any and all documents necessary to confirm
or otherwise establish Licensor's rights therein. Licensee shall take
no action in denigration of the rights of Licensor in the Property and
Licensee will not in any way during this agreement and thereafter
attack the Property.
(d) Corporate and Trade Names: Licensee shall not adopt, use or register
any corporate name, trade name, trademark, product name, service ▇▇▇▇
or certification ▇▇▇▇, or other designation similar to or
incorporating, in part or in whole, any trademark owned by Licensor
(including the names of any characters included in the Property)
without the prior written consent of Licensor.
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(e) Domain Names: Licensee shall not adopt, use or register any domain
names in any general top-level domain (gTLD) or country code top-level
domain (ccTLD) similar to or incorporating, in part or in whole, any
trademark owned by Licensor (including the names of any characters
included in the Property) without the prior written consent of
Licensor.
3. ARTWORK. Licensee hereby recognizes the valuable tangible and
intangible property right which Licensor has in its artwork and
accordingly, Licensee agrees to maintain control at all times over any
and all of Licensor's artwork in its possession. Licensee will submit
an accounting from time to time, as requested in writing by Licensor of
Licensor's artwork in its possession, together with any copies thereof,
and shall return them to Licensor provided they are not then in use, if
and when requested to do so or shall release them to Licensor's
authorized representative when requested to do so in writing by
Licensor. Licensee will not make any of Licensor's artwork available to
third parties for said third parties' use, except as a subcontractor
for Licensee.
4. ADVANCE, GUARANTEE AND ROYALTY, AND OTHER LICENSEE OBLIGATIONS.
(a) ADVANCE. Licensee shall pay Licensor an advance in the amount specified
in Paragraph 10 of the Term Sheet upon execution hereof. Such advance
shall be credited against first year's royalties.
(b) GUARANTEE. Licensee shall pay Licensor a minimum guarantee for the
Initial Term in the amount specified in Paragraph 11(a) of the Term
Sheet by the end of the initial term. Licensee shall pay Licensor the
Guarantee, in addition to the Advance, in accordance with the schedule
set forth in Paragraph 12(a) of the Term Sheet and each guarantee
payment shall be credited against that year's royalties. For example,
and for the avoidance of doubt, the $100,000 due July 1, 2007 shall be
applied against royalties earned during the year September 1, 2007
through September 30, 2008.
(c) RENEWAL TERM. Provided this Agreement is renewed pursuant to Paragraph
9(b) of the Term Sheet, Licensee shall pay Licensor a minimum guarantee
for the Renewal Term in the amount specified in Paragraph 11(b) of the
Term Sheet by the end of the renewal term. Licensee shall pay Licensor
the Guarantee in accordance with the schedule set forth in Paragraph
12(b) of the Term Sheet and each guarantee payment shall be credited
against that year's royalties.
(d) ROYALTY. The Royalty shall be a percentage of Net Sales, as specified
in Paragraph 13 of the Term Sheet.
(e) Licensee agrees to pay to Licensor the Royalty. Royalties shall be
computed on Net Sales with respect to each calendar quarter, or portion
thereof, during the term of this Agreement, and shall be paid within
forty five (45) days after the end of each calendar quarter and within
thirty (30) days after the date of termination of this Agreement.
Royalty payments shall be in U.S. dollars and shall be sent to the
address set forth in Paragraph 2 of the Term Sheet. Each Royalty
payment shall be accompanied by the written statement specified in
Paragraph 12 hereof.
(f) Net Sales shall mean the gross invoice amount billed customers (in U.S.
dollars of all sales of all Licensed Products sold by Licensee
including discontinued, discounted and surplus sales), less discounts
and allowances actually allowed customers, as reflected in the invoice
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itself, (except cash discounts which shall not be deductible in the
calculation of Royalties) and net of all returns actually made or
allowed as supported by credit memos issued customers. Deduction for
returns, discounts and allowances shall not exceed ten percent (10%) of
gross invoice amount. No costs incurred in the manufacturing, selling,
advertising, or distributing of the Licensed Products, or any indirect
expenses, shall be deducted, whether or not same are reflected on the
invoice itself, nor shall any deduction be made for any other
allowances or for uncollectible accounts. For the purposes of this
Agreement, free Licensed Products delivered by Licensee to any of its
customers and Licensed Products sold by Licensee to any of its
customers with whom Licensee shall not have dealt at arms' length shall
be treated as if such Licensed Products had been sold by Licensee and
shall be included in the calculation of "Net Sales" at Licensee's
normal selling price.
(g) Interest at one percent (1%) over the prime rate as listed in the Wall
Street Journal shall be incurred on Royalties and Guarantee payments
from and after the date due, which interest shall not be credited
against the Guarantee.
(h) All Royalties paid by Licensee shall not be refundable under any
circumstances.
(i) Licensee shall also meet the due dates for various submissions to
Licensor, as specified in Paragraph 18 of the Term Sheet.
5. TERM.
(a) The Initial Term of this license agreement shall be the term specified
in Paragraph 9(a) of the Term Sheet.
(b) RENEWAL AND RENEWAL TERM: Renewal and the Renewal Term shall be as
specified in Paragraph 9 (b) of the Term Sheet.
(c) SELL OFF: The Sell-Off Period shall be the period specified in
Paragraph 17 of the Term Sheet. After expiration of the Agreement, and
subject to Paragraph 15(g) hereof, Licensee may sell the Licensed
Products during the period set forth in Paragraph 17 of the Term Sheet.
During the sell-off period, Licensee shall market the Licensed Products
only through its normal Channels of Distribution for Licensed Products.
Licensee shall not barter Licensed Products. Licensee shall continue to
adhere to all of the provisions of this Agreement, including, without
limitation, those relating to payment of Royalties, and provided
Licensee has complied with providing of statements pursuant to
Paragraph 15(g), Licensee shall be entitled, during the sell-off
period, to sell the inventory of Licensed Products remaining at no more
than a 25% discount from its pre-established wholesale price point for
each Product.
6. QUALITY AND APPROVALS.
(a) Licensee warrants that the Licensed Products shall be of good quality
and free of defects in design, material and workmanship and shall be
suitable for their intended purpose; that no injurious, poisonous,
deleterious or toxic substance, material, paint or dye will be used in
or on the Licensed Products; that the Licensed Products will not be
inherently dangerous to the users thereof; and that the Licensed
Products will be manufactured, packaged, marketed, sold and distributed
in compliance with all applicable laws and regulations and voluntary
industry standards in the Territory. Licensed Products not complying
with applicable laws, regulations and voluntary standards shall be
deemed unapproved, even if previously approved by Licensor, and shall
not be shipped unless and until they have been brought into full
compliance therewith. Both before and after Licensee places Licensed
Products on the market, Licensee shall follow reasonable and proper
procedures for testing that the Licensed Products comply with such
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laws, regulations and standards. Licensee shall, upon request, furnish
Licensor evidence satisfactory to Licensor that Licensee has complied
with any or all of the foregoing.
(b) As soon as Licensee becomes aware of any fact, circumstance, event or
report which does, might or will affect the reputation of the Licensed
Products, Licensor and/or Licensee (including, but not limited to,
complaints or adverse reports in relation to the safety, quality or
fitness for use of the Licensed Products in any way), Licensee shall
promptly inform Licensor and continue to keep Licensor informed of the
steps being taken by Licensee to address any such fact, circumstance,
event or report.
(c) Prior to manufacture and/or marketing and/or sale of any Licensed
Products pursuant hereto, Licensee shall submit to Licensor at each
stage, the concept, rough art, final artwork, and one (1) prototype of
each of the Licensed Products to be sold, and of the package design
therefor, for Licensor's written approval as to artwork, quality,
appearance, materials, workmanship and all other construction and
aesthetic aspects of the Licensed Products, as specified in Paragraph 6
of the Term Sheet, and following Licensor's written instructions, as
may from time to time be issued. Licensee shall also submit five (5)
production samples of first run for Licensor's written approval.
Licensee shall also submit to Licensor for its written approval copies
of all proposed advertising and promotional materials for the Licensed
Products. All submissions of artwork, prototypes, production samples
and advertising and promotional materials shall be accompanied by the
Submission Form designated by Licensor from time to time. Submissions
as to which approval or disapproval is not given in writing within
seven (7) business days after receipt thereof by Licensor shall be
deemed disapproved, except that Licensee shall have the right to
contact Licensor of the lack of approval or disapproval and if no
comment is given by Licensor within an additional five (5) business
days of Licensee contacting Licensor, approval shall be deemed given.
During the term hereof Licensee shall, at Licensor's request and from
time to time, furnish additional samples of finished Licensed Products
to Licensor at cost to insure that the quality of the Licensed Products
made pursuant hereto conforms to the samples approved.
(d) The rights granted hereunder do not permit the sale of "seconds" or
"irregulars". All Licensed Products not meeting the standard of
approved samples shall be destroyed or the Property shall be removed or
obliterated from the same.
(e) Licensor shall be entitled to revoke any approval previously given by
giving written notice of same to Licensee explaining the reason for the
revocation. Such revocation shall be effective as to any such Licensed
Products or other materials not yet manufactured or in the process of
manufacture. As to any such Licensed Products or other materials
already manufactured or in the process of manufacture, Licensor shall
have the right to purchase same at their Replacement Value (as defined
below); however, Licensee shall have the right to complete and sell or
distribute such Licensed Products or other materials unless (a)
Licensor exercises its purchase rights, or (b) such Licensed Products
or other materials are not in compliance with the requirements of this
Agreement. "Replacement Value" shall mean Licensee's costs, excluding
any overhead allocated by Licensee in the manufacture of the Licensed
Products.
(f) In the event that Licensee purchases plush animal heads for the tops of
the Licensed Products from Licensor, Licensor warrants that the plush
animal heads will be manufactured in compliance with all applicable
laws and regulations and voluntary industry standards in the Territory.
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7. MANUFACTURE OF LICENSED PRODUCTS BY THIRD PARTIES
(a) In the event that Licensee desires to have a person or firm other than
Licensee manufacture any of the Licensed Products for promotion,
advertising, distribution, and sale by Licensee, Licensee shall first
notify Licensor of the name and address of such manufacturer and obtain
the execution by such manufacturer of the Manufacturer's Agreement
attached hereto as Exhibit A. Licensee shall promptly forward to
Licensor a copy of each such executed Manufacturer's Agreement. All
such manufacturers shall agree to abide by the Code of Conduct attached
to the Manufacturer's Agreement. If any such manufacturer utilizes the
Property for any unauthorized use, Licensee shall cooperate fully in
bringing such utilization to an immediate halt. Licensor shall be
entitled to terminate this Agreement if such a manufacturer violates
the terms of the Manufacturer's Agreement in two (2) or more instances,
including a violation of the Code of Conduct, except that Licensee may
utilize another manufacturer, so long as said manufacturer is approved
in advance by Licensor and signs in advance a Manufacturer's Agreement.
(b) Licensee shall furnish to Licensor the addresses of all production
facilities used by Licensee for manufacturing the Licensed Products. At
Licensor's request, Licensee shall make arrangements for Licensor or
Licensor's representatives to inspect such production facilities during
normal business hours.
(c) Licensee covenants on behalf of Licensee's own manufacturing
facilities, if any, to comply with the Code of Conduct included in
Exhibit A and incorporated herein by this reference, in the
manufacturing, packaging and distribution of Licensed Products.
Licensee further agrees to require all manufacturers to covenant to
comply with the Code of Conduct in the manufacturing, packaging and
distribution of the Licensed Products by signing the Manufacturer's
Agreement. The Code of Conduct shall not be interpreted to require
Licensee or its manufacturers to violate any applicable law.
(d) Licensee and the manufacturers agree that Licensor and its designated
agents (including third parties) may engage in monitoring activities to
confirm compliance with this Paragraph 7. Licensee agrees to promptly
reimburse Licensor for the reasonable cost of inspections performed
pursuant to this Paragraph when any of Licensee's manufacturing
facilities or any manufacturer does not pass the inspection(s)
conducted by a recognized third party inspecting agency and such
inspection finds a material breach of this Agreement, the
Manufacturer's Agreement or the Code of Conduct. The amount reimbursed
will not be pro-rated in the event the manufacturer is also used by
other licensees or vendors.
8. MARKETING PLAN AND OBLIGATIONS.
(a) Licensee shall submit a yearly marketing plan to Licensor on or before
the dates specified in Paragraph 15 of the Term Sheet. The marketing
plan is to include, but is not limited to, a specific description of
each product and proposed product, launch date, retail launch strategy,
as well as an overall babyGund marketing strategy. Additionally,
Licensee will describe the product time line from concept to
completion.
(b) Licensee agrees to manufacture Licensed Products in sufficient quantity
to meet the reasonably anticipated demand therefor. Licensee further
agrees to promote the sale of Licensed Products and to use its best
efforts to sell Licensed Products as widely as possible within the
Territory. Licensee agrees to have commenced shipping of the Licensed
Products by the date set forth in Paragraph 18 of the Term Sheet. If
Licensee fails to commence shipping by such date, or if Licensee fails
to manufacture and sell Licensed Products in sufficient quantities to
meet the reasonably anticipated demand for same, and to continually
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manufacture, sell, and ship same thereafter in the same fashion, then
Licensor may terminate Licensee's rights hereunder for the Licensed
Product by giving fifteen (15) days written notice of such termination
to Licensee.
(c) If, by the date specified in Paragraph 16(a) of the Term Sheet,
Licensee fails to have actively marketed and sold into retail Licensed
Products in one or more items or categories of Licensed Products, then
rights in any item or category wherein Licensee has failed to so
perform shall revert to Licensor.
(d) If, by the date specified in Paragraph 16(b) of the Term Sheet,
Licensee does not actively, aggressively, and effectively sell the
Licensed Products pursuant to the approved Marketing Plan for any
period of six consecutive months, at retail through at least one of the
entities listed in the Channels of Distribution, such failure shall be
a material breach of this Agreement.
(e) Licensee agrees that during the final calendar year of this Agreement
it will not manufacture an amount of Licensed Products that is in
excess of the amount manufactured during the highest manufacturing year
of any prior calendar year.
9. ADVERTISING PROGRAM.
(a) Licensee shall advertise the Licensed Products. Licensee shall prepare
copy for all such advertising and submit the same to Licensor, together
with a proposal regarding where such advertising shall be run, for
Licensor's written approval. Submissions as to which approval or
disapproval is not given in writing within seven (7) business days
after receipt thereof by Licensor shall be deemed disapproved, except
that Licensee shall have the right to contact Licensor of the lack of
approval or disapproval and if no comment is given by Licensor within
an additional five (5) business days of Licensee contacting Licensor,
approval shall be deemed given. Licensee upon such approval shall take
all steps needed to advertise the Licensed Products in accordance with
the proposal.
(b) Licensee will spend a minimum percentage of Net Sales, as specified in
Paragraph 19 of the Term Sheet, on advertising, marketing and promoting
(as defined in Paragraph 19 of the Term Sheet) the Licensed Products
and such program will be subject to approval of Licensor. Licensee will
also feature Licensed Products at all of its major trade shows, which
expense shall be separate and apart from the above requirements for
advertising and promotion of Licensed Products.
10. COPYRIGHT AND TRADEMARK PROTECTION.
(a) Notices. Licensee agrees to affix to the Licensed Products, packaging
therefor, and advertising and promotional materials depicting the
Licensed Products, copyright and trademark notices in compliance with
applicable copyright and trademark laws. The required notices shall
appear on hang-tags and labels for the Licensed Products. Submissions
as to the size and positioning of notices which approval or disapproval
is not given in writing within seven (7) business days after receipt
thereof by Licensor shall be deemed disapproved, except that Licensee
shall have the right to contact Licensor of the lack of approval or
disapproval and if no comment is given by Licensor within an additional
five (5) business days of Licensee contacting Licensor, approval shall
be deemed given. Such notices shall be in the form shown in Exhibit B.
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(b) Copyrights. Licensee agrees to cooperate with Licensor, at Licensor's
expense, in obtaining and preserving for Licensor copyright protection
for the Property and executing all documents that, in Licensor's
judgment, are necessary therefor and to maintain records (including
invoices, correspondence and related material) of and, at Licensor's
request, to advise Licensor with respect to, the publication dates of
all adaptations, derivative works, new works and other works by
Licensee utilizing the likenesses of any of the characters, scenes, or
other elements contained in the Property. Licensee hereby sells,
assigns and transfers to Licensor its entire worldwide right, title and
interest in and to all such "new works," including, but not limited to,
the copyrights thereon and Licensee agrees that, to the extent allowed
by law, every such new work shall be considered a "work made for hire"
for Licensor. Licensee additionally agrees when requested to do so by
Licensor to aid Licensor in registering the copyrights, and to obtain
design registrations where appropriate, for any such new works in
Licensor's name and at Licensor's expense in all parts of the Territory
which permit such registration. Licensee warrants that the use of such
new works by Licensor or its licensees shall not infringe the rights of
any person. During and after the term of this Agreement, Licensee shall
refrain from asserting, directly or indirectly, any interest or
property right in any copyrights of Licensor which are the subject
matter of this Agreement, or any adaptations thereof, and which are not
in the public domain.
(c) Trademarks. Licensee agrees to cooperate with Licensor in obtaining and
preserving for Licensor trademark protection for the names of the
Property and any characters contained therein and executing all
documents that in Licensor's judgment are necessary therefor and to
maintain records of and, at Licensor's request, to advise Licensor with
respect to use by Licensee of the name of the Property and the names of
individual characters within the Property and to provide Licensor with
such additional samples of said names as used on the Licensed Products,
dates of first use and dates of first use in interstate commerce, and
such materials and information as Licensor deems necessary to enable
Licensor to apply for trademark registration for the name of the
Property and characters in connection with all Licensed Products.
Licensee further agrees to recognize Licensor's trademark rights in any
name used in connection with the Property and the names of individual
characters within the Property and to do nothing in derogation or
dilution thereof, either during the term of this Agreement or at any
time thereafter.
(d) Customs. Licensee agrees to cooperate with Licensor in obtaining and
preserving for Licensor recordations with the U.S. Customs Service of
any trademarks or copyrights included in the Property by executing all
documents that in Licensor's judgment are necessary therefor and by
maintaining records of and, at Licensor's request, advising Licensor of
the names of all entities involved in the manufacture and importation
of Licensed Products (including, but not limited to, manufacturers and
import/export agents).
11. BOOKS AND RECORDS. Licensee agrees to keep full and accurate books of
account and records concerning all transactions hereunder, and Licensor
shall have the right and on reasonable notice during ordinary business
hours (at its expense), either itself or through a firm of independent
certified public accountants, to examine and to take excerpts from such
books of account and records. Said books of account and records shall
be preserved and maintained by Licensee and kept available for
inspection by Licensor for at least three (3) years from the expiration
or termination of this Agreement and Licensee agrees to permit
inspection and audit thereof by Licensor or its independent certified
public accountants during said period. If such audit reveals a
shortfall in the payment of royalties by Licensee, the same shall be
paid within ten (10) days of Licensor giving notice to Licensee of such
shortfall, together with interest thereon. If an audit reveals a
shortfall of five percent (5%) or more of Net Sales in any quarter,
Licensee shall reimburse Licensor for the full out-of-pocket cost of
7
the audit, including cost of auditors for travel and actual working
time. Licensor shall be permitted to inspect and audit Licensee's books
and records for a period of three (3) years after any royalty is due.
12. STATEMENTS. On each date Licensee makes payment of Royalties to
Licensor pursuant to Paragraph 4 above, Licensee shall send to Licensor
two (2) copies of a written statement in reasonably specific detail,
concerning the computation of Royalties then due and payable to
Licensor. Each such statement shall show the stock number, item
description, quantity shipped, gross invoice amount billed customers,
any deductible discounts, allowances, and returns, and the reportable
sales of each Product and shall be in the form attached hereto as
Exhibit C. Receipt or acceptance by Licensor of any statement furnished
pursuant hereto or any sums paid by Licensee hereunder shall not
preclude Licensor from questioning the correctness thereof at any time,
and if any inconsistencies or mistakes are discovered in such
statements or payments, they shall be immediately rectified and prompt
adjustments and corresponding payments shall be made to compensate
therefor. In addition to supplying the form attached as Exhibit C,
Licensee will use its best efforts to also report royalties on a
country by country basis in any form that Licensee is able to generate.
13. INDEMNIFICATION.
(a) Licensee agrees to defend, indemnify and hold Licensor and its
affiliated companies harmless from and against any and all claims of
third parties (and liabilities, judgments, penalties, losses, costs,
damages and expenses resulting directly therefrom, including reasonable
attorneys' fees) arising by reason of, or in connection with, any act
or omission pursuant to or in breach of this Agreement by Licensee, its
agents or employees, including but not limited to, claims arising out
of the manufacture, distribution, exploitation, advertising, sale, use
or consumption of the Licensed Products, but excepting claims of third
parties in respect of the use by Licensee in accordance with this
Agreement of the Property licensed hereunder.
(b) Licensor agrees to defend, indemnify and hold Licensee, and its
affiliated companies, harmless from and against any and all claims of
third parties (and liabilities, judgments, penalties, losses, costs,
damages and expenses resulting therefrom, including reasonable
attorneys' fees) arising by reason of, or in connection with, the use
by Licensee of the copyrights contained in the Property pursuant to the
terms hereof. Licensor further agrees to defend, indemnify and hold
Licensee, and its affiliated companies, harmless from and against any
and all claims of third parties (and liabilities, judgments, penalties,
losses, costs, damages and expenses resulting therefrom, including
reasonable attorneys' fees) arising in the jurisdictions identified in
Exhibit D to this Agreement by reason of, or in connection with, the
use by Licensee of the trademark BABYGUND pursuant to the terms hereof.
Licensor specifically disclaims any indemnification of Licensee and its
affiliated companies with respect to any and all claims of third
parties (and liabilities, judgments, penalties, losses, costs, damages
and expenses resulting therefrom, including reasonable attorneys' fees)
arising in jurisdictions other than those identified in Exhibit D to
this Agreement by reason of, or in connection with, the use by Licensee
of the trademark BABYGUND.
(c) Without limiting the foregoing indemnification obligations, Licensee
agrees to maintain at its own expense, during the term of this
Agreement and for one (1) year thereafter, with an insurer or insurers
(rated at least A-/XII by the most current A.M. Best Publication),
commercial general liability insurance including products/completed
operations, blanket contractual liability, and personal injury and
advertising injury liability coverage in amounts no less than Two
8
Million Dollars ($2,000,000) combined single limit for each single
occurrence for bodily injury and property damage, and within thirty
(30) days from the date hereof to submit to Licensor a certificate
evidencing such insurance, that Licensor has been named as additional
insured parties on said insurance and that said insurance shall be
primary coverage before any other similar insurance available to
Licensor. The certificate shall provide for at least thirty (30) days
advance written notice to Licensor of any cancellation or change in
such coverage.
(d) Each party agrees to notify the other promptly in writing of, and to
keep the other fully advised with respect to, such claims indemnified
hereunder, and the progress of any legal actions relating thereto in
which the other party is not a participant. Each party shall have the
right to assume the defense of a claim instituted against the other
party for which the party assuming the defense is obligated to
indemnify the other party. In the event that a party assumes the
defense of a claim against the other party, the party assuming the
defense shall not enter into any compromise or settlement of the claim
without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. Each party shall have
the right to participate at its own expense in the defense of any claim
instituted against it, and, if such party does so participate, it shall
not have the right to recover against the other party the costs and
expenses of participation in such suit. The foregoing indemnifications
shall not be deemed to entitle either party to recover against the
other party for consequential damages or lost profits, whether actual,
anticipated or estimated.
14. THIRD PARTY INFRINGEMENT.
(a) Licensee hereto shall promptly notify Licensor of any apparent
infringement of any rights granted by Licensor to Licensee hereunder.
Licensor shall have the exclusive right to institute legal action (at
its own expense) against the infringer or to otherwise terminate such
infringement. Licensee shall have no right to make any demands or
claims, bring suit, effect any settlements or take any other action
with respect to such an infringement without the prior written consent
of Licensor.
(b) Monetary damages recovered by a party hereto in connection with an
infringement shall first be applied for recoupment of expenses,
including reasonable legal expenses, incurred by the party prosecuting
the action or otherwise terminating the infringement, and the balance
of such damages shall be divided, two-thirds to the party prosecuting
the action or otherwise terminating the infringement and one-third to
the other party hereto. If the party prosecuting such action considers
that it is legally necessary or desirable to do so, it may join the
other party hereto as a party plaintiff at the expense of the party
prosecuting such action and plead the damages of such party.
(c) The parties agree to cooperate with each other with respect to any
suits or other action taken under this paragraph and to keep the other
party promptly and fully advised with respect thereto.
15. BREACH AND TERMINATION.
(a) Licensor shall have the right to terminate this Agreement immediately
by written notice to the Licensee in the event that:
(i) Licensee uses any unapproved artwork or promotional materials
after receipt of written notice;
9
(ii) Licensee fails to make any payments set forth in Paragraph 4
hereof within ten (10) days after receipt of written notice;
(iii) Licensee assigns or sublicense its rights hereunder, except as
permitted in Paragraph 20 hereof;
(iv) any governmental agency finds that any of the Licensed
Products are defective or unsafe in any way and Licensee is
unable to bring such Licensed Products into compliance within
sixty (60) days from receipt of notice from any governmental
agency (ies). As an alternative, Licensee may agree to destroy
and no longer produce such products;
(v) Licensee fails to maintain the insurance required by Paragraph
13(c) and does not obtain such insurance within five (5)
business days after receipt of written notice;
(vi) Licensee is adjudicated bankrupt, becomes insolvent, makes any
assignment for the benefit of its creditors, has its assets
placed in the hands of a receiver, files a petition in
bankruptcy, has filed against it a petition in bankruptcy
which is not discharged within sixty (60) days after its
filing, or is dissolved or liquidated (in which case,
Licensee, its receivers, representatives, trustees, agents, or
successors shall have no right to sell, exploit or in any way
deal with the Licensed Products, except in accordance with the
written consent and instructions of Licensor);
(vii) the Licensee fails to have the Manufacturer's Agreement,
Exhibit A hereto, executed as required by Paragraph 7(a)
hereof within thirty (30) days of Licensee notifying Licensor
of the name and address of such manufacturer; or
(viii) the Licensed Products are found to be manufactured by
manufacturers who violate the "Child Labor", "Involuntary
Labor" and "Coercion and Harassment" standards contained in
the Code of Conduct;
(ix) more than two (2) Manufacturer's Agreements are terminated in
any twelve (12) month period by Licensor for the
manufacturer's failure to pass compliance inspections as
referenced in Paragraph 7 (d) hereof;
(x) Licensee takes any action that brings the Licensed Products in
public disrepute.
(b) If either party hereto is in material breach of any terms and
conditions of this Agreement other than as set forth in subparagraph
(a), and such party fails to cure the breach within fifteen (15) days
after the date of receipt of written notice from the other party
advising of the nature of such breach, or if either party breaches a
provision of this Agreement after being notified in writing of a
previous breach of the same provision in the same calendar year
(whether the first breach was cured or not), then the party not in
default shall have the right to terminate this Agreement forthwith by
written notice to the party in breach.
(c) In the event of a termination by Licensor pursuant to subparagraph (a)
or (b) hereof, all unpaid Advances and Minimum Guarantees shall be
immediately due and payable.
(d) Except as provided in subparagraph (g) below, upon the termination or
expiration of this Agreement, Licensee agrees to immediately and
permanently discontinue the manufacture, sale and distribution of the
Licensed Products, and to immediately and permanently discontinue use
10
of the Property, including any adaptations thereof or designs made by
others in the same style, which it is granted the right to use by
virtue of this Agreement.
(e) Termination of this Agreement pursuant to this Paragraph shall be
without prejudice to any rights which either party may have against the
other party hereto.
(f) Subject to subparagraph (g) below, Licensee hereby acknowledges that
its failure to cease the manufacture, sale or distribution of the
Licensed Products upon the termination or expiration of this Agreement
will result in damage to Licensor and to the rights of any subsequent
licensee for which there is no adequate remedy at law; accordingly, in
the event of such failure, Licensor shall be entitled to equitable
relief by way of temporary and permanent injunctions and such other
relief as any court of competent jurisdiction may deem just and proper.
(g) Provided Licensee is not in breach of this Agreement and provided the
inventory statements as described herein below in this Paragraph 15(g)
are supplied by Licensee to Licensor, in the event of expiration or
termination of this Agreement, except for a termination by Licensor
pursuant to subparagraphs (a) or (b) hereof, after the date of
expiration or termination Licensee shall have the nonexclusive right,
for the Sell-Off Period indicated in Paragraph 5, to promote,
advertise, sell and distribute Licensed Products in inventory remaining
unsold as of said date of expiration or termination pursuant to the
terms of this Agreement. Inventory statements of all Licensed Products
on hand at the time the statements are issued, must be furnished to
Licensor within ninety (90) days and thirty (30) days prior to the date
of expiration, or thirty (30) days after the date of termination, and
must be certified to be true and correct. During the Sell-Off Period,
Licensee shall continue to adhere to all provisions of this Agreement,
including without limitation payment of Royalties and Licensee shall be
entitled to sell the inventory of Licensed Products remaining at no
more than a 25% discount from its pre-established wholesale price point
for each Product. Licensee shall monitor its production so as not to
manufacture Licensed Products during the Sell-Off Period except to the
extent of on-hand component inventory, and shall monitor its inventory
position to minimize sales of Licensed Products during the Sell-Off
Period. Licensee shall not excessively or unnecessarily build up its
inventory of Licensed Products prior to the expiration or termination
of this Agreement and Licensee shall only complete the manufacture of
on-hand component inventory if such components relate solely to the
Property and are not generic components.
(h) Upon the expiration or termination of this Agreement for whatever
reason, or the expiration of any Sell-Off Period, if applicable,
Licensee shall immediately either return to Licensor or destroy its
remaining inventory of the Licensed Products as well as any dies,
molds, negatives, plates, or other articles or implements from which
the Property can be perceived or produced, other than those which have
been rented by Licensor to Licensee which must be returned intact to
Licensor. In the event of destruction, Licensee shall furnish to
Licensor a certificate of such destruction, and Licensor shall have the
right, at its election, to have a representative selected by it observe
any such destruction.
16. NON-COMPETITION. Licensee warrants and represents that it is not
currently in the plush toy business and that it has no plans to enter
the plush toy business. Licensee agrees that, during the term of this
Agreement, as specified in Paragraph 9 of the Term Sheet, and for two
(2) years following the expiration of this Agreement or its termination
pursuant to Paragraph 15 hereof, it shall not manufacture, display,
distribute, promote, offer for sale or sell, or induce any third party
to manufacture, display, distribute, promote, offer for sale or sell
any plush products anywhere in the world. Should Licensee manufacture,
display, distribute, promote, offer for sale or sell, or induce any
third party to manufacture, display, distribute, promote, offer for
sale or sell any plush toy products anywhere in the world prior to the
11
expiration of the time limits of this paragraph, Licensor shall be
entitled to liquidated damages in the amount of two hundred fifty
thousand dollars ($250,000).
17. PREMIUMS. Licensee agrees that it will not use or authorize the use of
the Licensed Products as premiums. As used herein, the term "premium"
shall be defined as combination sales, free or self-liquidating items
offered to the public in connection with the sale or promotion of a
product or service, or any similar scheme or device, the prime intent
of which is to use the Licensed Product in such a way as to sell
products, services or business image of the user of such item. Licensor
reserves all rights to the utilization of products which feature the
Property in connection with any premium, give-away or promotional
arrangement, fan club, charitable and/or fund-raising activity, or the
like, which reserved right may be exercised by Licensor concurrently
with the rights licensed to Licensee hereunder without regard to the
extent to which any such rights may be competitive with Licensee or the
license granted hereunder.
18. WITHDRAWAL OF PROPERTY. Licensee agrees that Licensor may withdraw any
Property hereunder which would infringe or reasonably be claimed to
infringe the right of a third party, provided that Licensor purchases
the Licensed Product and other materials utilizing such withdrawn
Property which cannot be sold or used by Licensee at their Replacement
Value as defined in Paragraph 6(d) hereof.
19. NOTICES. Any notice or other communication required or permitted to be
given by either party hereto shall be mailed by first class, Certified
Mail, Return Receipt Requested, United States mail, and by overnight
courier addressed as specified in Paragraphs 1 and 2 of the Term Sheet.
Notices or other communications mailed as herein provided shall be
deemed to have been given when received or when an attempt to deliver
same was made as evidenced by a duly executed return receipt.
20. NON-ASSIGNABILITY. Licensee may not assign or transfer any of its
rights or obligations under this Agreement by law, change of control or
otherwise without the prior written consent of Licensor, which will not
be unreasonably withheld.
21. AMENDMENTS. This Agreement expresses the entire understanding of the
parties hereto and replaces any prior oral or written agreements
concerning the subject matter hereof, and Licensee acknowledges that it
has not executed this Agreement in reliance upon any promise,
agreement, representation or warranty not expressly set forth in this
Agreement. No amendment or supplementation hereof shall be effective or
binding on either party hereto unless reduced to writing and executed
by the duly authorized representatives of both parties hereto.
22. FOREIGN TAXES. In the event that the Territory includes countries
outside the United States or its territories, Licensee shall withhold
the amount of income or other taxes, if any, payable by Licensor and
levied by governmental agencies in such countries on payments payable
by Licensee to Licensor pursuant to this Agreement, and shall promptly
effect payment thereof to the appropriate authority. Licensee shall
transmit to Licensor within thirty (30) calendar days after such
payment, official tax receipts or other documentary evidence issued by
said tax authority sufficient to enable Licensor to support a claim for
United States income tax credit, if any, in respect of any such taxes
so paid. Licensee agrees to indemnify and hold Licensor harmless from
any governmental claim due to Licensee's failure to perform in
accordance with this Paragraph.
12
23. CONFIDENTIALITY. All proprietary information relating to a party or any
of its affiliates which the other party may learn, including without
limitation, financial information and business plans and, with respect
to Licensee, the identity of and other information regarding the
manufacturers of the Licensed Products, sales and customer information
and product design information, creative concepts and marketing,
advertising and promotional concepts and plans which Licensee uses or
proposes to use in connection with the business to be conducted by it
hereunder, is its valuable property. Each party acknowledges the need
to preserve the confidentiality and secrecy of the other party's such
information. Thus, during and after the term of the Agreement, neither
party will use or disclose any such information of the other except as
necessary for the conduct of the business to be conducted hereunder.
24. APPLICABLE LAW. The validity, construction and performance of this
Agreement shall be governed by, and interpreted in accordance with, the
laws of the State of New York. In any dispute relating to this
Agreement, the parties hereto admit venue and submit themselves to the
exclusive jurisdiction of the tribunals of the United States District
Court for the Southern District of New York, expressly waiving any
venue to which they may be entitled by their present or future
domiciles.
25. NO AGENCY. Nothing in this Agreement shall be construed to make either
party hereto the agent or representative of the other party and neither
party shall so hold itself out nor shall either party be liable or be
bound by any act or omission of the other party, nor may any party bind
the other party in any manner.
26. WAIVER. Failure of either party at any time to require the performance
of any provision under this Agreement shall not affect the right of
such party to require full performance thereafter and a waiver by
either party of a breach of any provision of this Agreement shall not
be taken or held to be a waiver of any further or similar breach or as
nullifying the effectiveness of such provision.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GUND, INC.
By /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------
▇▇▇ ▇▇▇▇▇▇▇
Date: April 6, 2005 Title: President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Date: April 6, 2005 Title: Executive Vice President/COO/CFO
13
EXHIBIT A
MANUFACTURER'S AGREEMENT & CODE OF CONDUCT
Licensee:
Location of manufacturing facility(s):
Licensed Products:
The undersigned understands that Gund, Inc. ("Licensor"), has licensed
the above-named Licensee to manufacture or have manufactured for it the
above-named Licensed Products utilizing certain designs and names proprietary to
Licensor (such products Licensor designs being referred to as (the "Licensed
Products"). In order to induce Licensor to consent to the manufacture of the
Licensed Products by the undersigned, the undersigned agrees that it will not
manufacture the Licensed Products for anyone but the Licensee or sell the
Licensed Products to anyone but the Licensee; that it will not manufacture the
Licensed Products anywhere other than the above-named Location; that it will not
(unless Licensor otherwise consents in writing) manufacture or sell any other
merchandise utilizing any of the same designs or names, or any substantially
similar designs; that it will permit such representative as Licensor may from
time to time designate to inspect the activities of the undersigned with
relation to its manufacture of the Licensed Products; and that whenever the
Licensee ceases to require the undersigned to manufacture the Licensed Products,
the undersigned will deliver to Licensor or its designee any molds, plates,
engravings, negatives, transparencies, or other devices used to reproduce the
said designs or will give satisfactory evidence of the destruction thereof. The
undersigned will cease to manufacture Licensed Products for the Licensee upon
receiving written notice to that effect from the Licensee or Licensor.
Additionally, the undersigned agrees to abide by the annexed Code of Conduct and
to permit Licensor to engage in monitoring activities, including unannounced
inspections, to confirm compliance with the Code of Conduct. Licensor shall be
entitled to invoke any remedy permitted by law for violation of this agreement
by the undersigned.
Name of Manufacturer:
Dated:____________, 20__ __________________________________
Address:__________________________
By________________________________
Title_____________________________
1
CODE OF CONDUCT FOR MANUFACTURERS
Gund is committed to:
! a standard of excellence in every aspect of our business and
in every corner of the world;
! ethical and responsible conduct in all of our operations;
! respect for the rights of all individuals; and
! respect for the environment.
Gund expects all manufacturers of Gund merchandise to share these same
commitments. At a minimum, Gund requires that all manufacturers of Gund
merchandise meet the following standards:
CHILD LABOR Manufacturers will not use child labor.
The term "child" refers to a person younger than 15
(or 14 where local law allows) or, if higher, the
local legal minimum age for employment or the age for
completing compulsory education.
Manufacturers employing young persons who do not fall
within the definition of "children" will also comply
with any laws and regulations applicable to such
persons.
INVOLUNTARY LABOR Manufacturers will not use any forced or involuntary
labor, whether prison, bonded, indentured or
otherwise.
COERCION AND Manufacturers will treat each employee with dignity
HARASSMENT and respect, and will not use corporal punishment,
threats of violence or other forms of physical,
sexual, psychological or verbal harassment or abuse.
NONDISCRIMINATION Manufacturers will not discriminate in hiring and
employment practices, including salary, benefits,
advancement, discipline, termination or retirement,
on the basis of race, religion, age, nationality,
social or ethnic origin, sexual orientation, gender,
political opinion or disability.
ASSOCIATION Manufacturers will respect the rights of employees to
associate, organize and bargain collectively in a
lawful and peaceful manner, without penalty or
interference.
HEALTH AND SAFETY Manufacturers will provide employees with a safe and
healthy workplace in compliance with all applicable
laws and regulations, ensuring at a minimum,
reasonable access to portable water and sanitary
facilities, fire safety, and adequate lighting and
ventilation.
Manufacturers will also ensure that the same
standards of health and safety are applied in any
housing that they provide for employees.
2
COMPENSATION We expect manufacturers to recognize that wages are
essential to meeting employees' basic needs.
Manufacturers will, at a minimum, comply with all
applicable wage and hour laws and regulations,
including those relating to minimum wages, overtime,
maximum hours, piece rates and other elements of
compensation, and provide legally mandated benefits.
If local laws do not provide for overtime pay,
manufacturers will pay at least regular wages for
overtime work. Except in extraordinary business
circumstances, manufacturers will not require
employees to work more than the lesser of (a) 48
hours per week and 12 hours overtime of (b) the
limits on regular and overtime hours allowed by local
law or, where local law does not limit the hours of
work, the regular work week in such country plus 12
hours overtime. In addition, except in extraordinary
business circumstances, employees will be entitled to
at least one day off in every seven-day period.
PROTECTION OF Manufacturers will comply with all applicable
THE ENVIRONMENT environmental laws and regulations.
OTHER LAWS Manufacturers will comply with all applicable
laws and regulations, including those pertaining to
the manufacture, pricing, sale and distribution of
merchandise.
All references to "applicable laws and regulations"
in this Code of Conduct include local and national
codes, rules and regulations as well as applicable
treaties and voluntary industry standards.
SUBCONTRACTING Manufacturers will not use subcontractors for the
manufacture of Gund merchandise or components thereof
without Gund's express written consent, and only
after the subcontractor has entered into a written
commitment with Gund to comply with this Code of
Conduct.
MONITORING AND Manufacturers will authorize Gund and its designated
COMPLIANCE agents (including third parties) to engage in
monitoring activities to confirm compliance with this
Code of Conduct, including unannounced on-site
inspections of manufacturing facilities and employer-
provided housing; reviews of books and records
relating to employment matters; and private
interviews with employees . Manufacturers will
maintain on site all documentation that may be needed
to demonstrate compliance with this Code of Conduct.
PUBLICATION Manufacturers will take appropriate steps to ensure
that the provisions of this Code of conduct are
communicated to employees, including the prominent
posting of a copy of this code of conduct, in the
local language and in a -place readily accessible to
employees, at all time.
3
EXHIBIT B
FORM OF NOTICE CONCERNING COPYRIGHTS AND
TRADEMARKS REQUIRED OF LICENSEE
BABYGUND(R)
(This notice shall be utilized in all cases
where the trademark BABYGUND is utilized on or
in connection with Licensed Products.)
(C)GUND, INC.
(This notice shall be utilized in all cases where
GUND artwork is utilized on Licensed Products)
1
EXHIBIIT C
LICENSED PROPERTY
ROYALTY REPORTING FORM
DATE___________________________________ LICENSED PROPERTY______________________
LICENSEE_______________________________ ROYALTY RATE___________________________
QUARTER FOR PERIOD ENDING______________ COUNTRY________________________________
===================================================================================================================
PRODUCT STYLE PRODUCT DESCRIPTION UNITS UNIT TOTAL RETURNS DISCOUNTS TOTAL NET SALES ROYALTY EARNED
OR I.D. # SHIPPED WHOLESALE GROSS
PRICE SALES
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
TOTALS
===================================================================================================================
REMIT TO: TOTAL GROSS SALES_____________________
LESS RETURNS, DISCOUNTS_______________
Gund, Inc. TOTAL NET SALES_______________________
▇.▇. ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇________________________
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ AMOUNT OF CHECK ENCLOSED______________
Attention: ▇▇▇▇ ▇▇▇▇▇▇ REVISED ADVANCE ALANCE________________
Y-T-D ROYALTIES ______________________
ANNUAL GUARANTEE______________________
Approved and certified to be correct by:
Name: ____________________________
Title: ___________________________
EXHIBIT D
GUND, INC.
Trademark Report by Pag 1
Status ACTIVE
▇▇▇▇: baby*
REFEREN ▇▇▇▇ FILE APPL REG REG STAT CLAS
AUSTRALIA
1056/0375 BABY GUND 12/21/2 861245 9/17/20 861245 REGISTE 28
(STYLIZED) & TEDDY
28 - Games and playthings; toys, stuffed toys, activity toys, bath toys,
plush toys, musical toys, plush play sets, dolls, rattles, gymnastic and
sporting articles not included in other
CANADA
1056/0479 BABY GUND 3/31/20 1,173,077 PENDING N/A
(STYLIZED) & DESIGN
N/A - (1) Paper napkins; table covers; party banners made of paper;
party signs made of paper; centerpieces made of paper and balloons;
party treat bags; party invitation; party thank you cards; paper party
favors; paper party decorations; party decorating kits made of paper;
party cutouts made of paper; party sign-in-sheets; gift wrap; gift bags;
stickers; (2) paper plates; paper cups (3) footwear; plush slippers,
athletic footwear; sandals, shoes, boots, foot
1056/0522 BABY GUND 2/19/20 1207295 PENDING N/A
(STYLIZED) & DESIGN
N/A - Bed linens, blankets, throws, wood-framed mirrors, picture frames
made of wood, rugs, lamps, stroller blankets, chair pads, cushions for
chairs, diaper stackers, mobiles, towels,
1056/0425 BABY GUND 4/29/20 1,139,183 PENDING N/A
(STYLIZED) & TEDDY
N/A - Certificate holders, tooth holders, baby rattles; piggy banks;
spoons, forks, knives, plates, cups and bowls for infants and children;
jewelry; christomas tree and window ornaments; children's and infant's
clothing, namely, shorts, short sets, tops, bottoms, dresses, coveralls,
rompers, creepers, overalls, overall sets, infants and children's
underwear, shortalls, ▇▇▇▇▇▇▇▇ sets, t-shirts, three-piece sets
consisting of diaper shirts, tops and bottoms; coordinating sets
consisting of tops and bottoms; layette sets, sleepwear; jackets,
zippered pull-over jackets, windsuits, buntings, snowsuits, ski sets,
raincoats, slickers, ponchos, rain
1056/0457 BABY GUND 8/16/20 1,149,982 PENDING N/A
(STYLIZED) & TEDDY
N/A - Covers and/or netting for baby's strollers, umbrellas to be
affixed to baby strollers, umbrellas; diaper bags, rolling luggage,
overnight baby bags, travel bags, day care bags, lunch
bags, backpacks, soft baby carriers worn on the body; nap mats; activity bars, memory board
1056/0558 BABY GUND 11/5/20 1,236,479 PENDING N/A
(STYLIZED) AND
N/A - Books for infants and children
1056/0556 BABY GUND 11/5/20 1,236,482 PENDING N/A
(STYLIZED) AND
N/A - Cosmetics and toiletries for infants and children, namely,
shampoo, hair conditioners, hair lotions; bubble bath; body lotions,
body creams; perfume and cologne
1056/0058 BABYGUND 2/15/19 675697 10/15/1 418097 REGISTE N/A
N/A - Stuffed toys and mobiles
CHINA
1056/0335 BABY GUND 6/9/200 200008133 10/21/2 1653084 REGISTE 28
(STYLIZED) & TEDDY
28 - Toys, baby rattles; dolls
Pag 2
Trademark Report by
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EUROPEAN UNION
1056/0379 BABY GUND 1/5/200 2026797 2/25/20 2026797 REGISTE 25,28
(STYLIZED) & TEDDY
25 - Clothing, footwear, headgear, footsies, being footwear for babies
28 - Games and playthings; gymnastic and sporting articles not included
in other classes; decorations for Christmas trees; plush toys, rattles,
activity toys, bath toys, plush play sets;
HONG KONG
1056/0344 BABY GUND 5/30/20 2000 12025 11/19/2 13107/2001 REGISTE 28
(STYLIZED) & TEDDY
28 - Plush toys and rattles; games and playthings; gymnastic and sporting articles not included
JAPAN
1056/0199 BABYGUND 4/12/19 39139/1996 1/16/19 4101826 REGISTE 28
28 - Toys
MEXICO
1056/0403 BABY GUND 7/31/20 499099 3/27/20 741195 REGISTE 28
(STYLIZED) & TEDDY
28 - Toys, rattles
1056/0157 BABYGUND & DESIGN 12/30/1 130425 12/30/1 415197 REGISTE 28
(OLD LOGO)
28 - Games and playthings; gymnastic and sporting articles not included in other classes;
NAMIBIA (S.W.
1056/0339 BABY GUND 4/5/200 00/0453 10/10/2 2000/0453 REGISTE 28
(STYLIZED) & TEDDY
28 - Games and playthings; gymnastic and sporting articles not included other classes;
NEW ZEALAND
1056/0377 BABY GUND 12/21/2 629644 12/21/2 629644 REGISTE 28
(STYLIZED) & TEDDY
28 - Games and playthings; plush toys, rattles, activity toys, bath
toys, plush play sets, musical
SOUTH KOREA
1056/0343 BABY GUND 4/3/200 2000-16077 6/21/20 496034 REGISTE 28
(STYLIZED) & TEDDY
28 - Plush toys, rattles, toys of cloth
TAIWAN
1056/0189 BABYGUND 1/31/19 85-5153 4/16/19 758722 REGISTE 28
28 - Toys, playthings, stuffed toys, plush toys
UNITED STATES
1056/0480 BABY GUND 1/9/200 76/481,116 ALLOWE 25
(STYLIZED) & DESIGN
25 - Footwear; plush slippers, athletic footwear; sandals, shoes, boots; foot socks; aqua
1056/0484 BABY GUND 3/21/20 76/499,586 11/18/2 2,784,156 REGISTE 21,16,
(STYLIZED) & DESIGN 20
21 - Non-metal priggy banks
16 - Bookends
20 - Photo frames; trinket boxes and stacking boxes made of resin;
decorative drawer pulls made of resin; gazing globes, namely waterglobes
made primarily of resin
Pag 3
Trademark Report by
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T23443US02 BABY GUND 1/9/200 76/977,303 PENDING 16,21,
(STYLIZED) & DESIGN 28
16 - Paper napkins; table covers; party banners made of paper; party
signs made of paper; centerpieces made of paper and balloons; party
treat bags; party imitations; party thank you cards; paper party favors;
paper party decorations; party decorating kits made of paper; party
21 - Paper plates; paper cups 28 - Centerpieces mde of balloons and paper;
balloons
1056/0329 BABY GUND 3/21/20 76/007,891 8/21/20 2,479,541 REGISTE 10,12,
(STYLIZED) & TEDDY 25
10 - Teething rings, pacifier clips
12 - Children's car seat strap wraps
25 - Infant's booties
28 - Plush toys, rattles
1056/0357 BABY GUND 9/5/200 76/121,828 12/17/2 2,664,098 REGISTE 11,24,
(STYLIZED) & TEDDY 28
11 - Lamps
24 - Nursery organizers of fabric; comforters, quilts, crib bumpers, bed
sheets, crib sheets, dust ruffles, textile wall hangings, fabric
valances, bed blankets, pillow bumpers made of
28 - Crib mobiles
1056/0426 BABY GUND 4/17/20 76/397,057 3/8/200 2,931,198 REGISTE 06,08,
(STYLIZED) & TEDDY 14
06 - Certificate holder, tooth holder, baby rattle and piggy bank, all
of the foregoing made of
08 - Spoons, forks and knives for infants and children
14 - Jewelry; ornaments made of precious metal; baby rattles,
piggy banks, tooth holders, certificate holders, all of the foregoing
made in whole or part of precious metals
21 - Plates, cups and bowls for infants and children
1056/0530 BABY GUND 4/17/20 76/976,558 6/1/200 2,849,084 REGISTE 25
(STYLIZED) & TEDDY
25 - CHILDREN'S AND INFANT'S CLOTHING, NAMELY, SHORTS, SHORT SETS, TOPS,
BOTTOMS, DRESSES, COVERALLS, ROMPERS, CREEPERS, OVERALLS, OVERALL SETS
COMPRISED OF OVERALL AND TOP; INFANTS AND CHILDREN'S UNDERWEAR,
SHORTALLS, ▇▇▇▇▇▇▇▇ SETS COMPRISED OF ▇▇▇▇▇▇▇▇ AND TOP; T-SHIRTS,
THREE-PIECE SETS CONSISTING OF DIAPER SHIRTS, TOPS AND BOTTOMS;
COORDINATING SETS CONSISTING OF TOPS AND BOTTOMS; LAYETTE SETS COMPRISED
OF GOWN AND CAP, TOP AND PANT, CARDIGAN, TOP AND PANT, ▇▇▇▇▇▇▇▇ AND TOP,
OVERALL AND TOP, CARDIGAN AND PANT, CREEPER AND PANT, CREEPER AND SHORTS
OR COVERALLS AND BLANKET; SLEEPWEAR; JACKETS, ZIPPERED PULL-OVER
JACKETS, WINDSUITS, BUNTINGS, SNOWSUITS, RAINCOATS, SLICKERS, PONCHOS,
RAIN JACKETS, RAIN SUITS, SWIM SUITS, SWIM COVER-UPS; SWIMWEAR SETS
CONSISTING OF SWIMSUIT OR SWIM TRUNKS AND COVER-UP; SHORT SETS
CONSISTING OF SHORTS AND TOPS; GIFT SETS COMPRISED OF
1056/0559 BABY GUND 10/27/2 78/506,748 PENDING 16
(STYLIZED) & TEDDY
16 - Books for infants and children
1056/0557 BABY GUND 10/27/2 78/506,757 PENDING 03
(STYLIZED) & TEDDY
03 - Cosmetics and toiletries for infants and chldren, namely, shampoo,
hair conditioners, hair lotions; bubble bath; baby lotions, body creams;
perfume and cologne
1056/0543 BABY GUND 7/13/20 78/450,000 PENDING 008,
010,
014,
016,
008 - Spoons, Forks 018,
010 - Ice Pack Holders 020
014 - Cups, Plates, Trinket Boxes, Birth Certificate Holders, Piggy
Banks, all of the foregoing
016 - Bookends, Growth Charts For Use On Walls, Photograph Albums,
Laminated Reminder
▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ - ▇▇▇▇▇▇▇ hangers, Resin Figurines, Picture Frames
021 - Hair ▇▇▇▇▇, Hair Brushes, Hair Comb and Hair Brush Sets, Porcelain
Cups, Porcelain
024 - Blankets, Towels, Bath Mitts, Fabric Signs In The Nature Of Door
Hangers
025 - Infant Diaper Covers Made Of Textile
028 - Plush Toys, Plush Toys With Blanket Bodies, Mobiles, Rattles
Pag 4
Trademark Report by
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1056/0453 BABY GUND 8/5/200 76/437,327 ALLOWE 12,20,21
12 - Covers and netting for baby strollers, umbrellas to be affixed to
baby stroller
20 - Nap mats
21 - Thermal insulated lunch bags made of fabric for food or beverage
25 - Pajamas, blanket sleepers, nightgowns, onesies
28 - Activity bars memory board sets, toys designed to be attached to
baby stroller
18 - Umbrellas, rolling luggage and soft baby carriers worn on the body
1056/0523 BABY GUND 8/5/200 76/976,518 5/25/20 2,846,300 REGISTE 18
18 - Diaper bags, baby overnight bags, travel bags, day care bags, backpacks
1056/0412 BABY JUNGLE 9/17/20 76/312,874 11/4/20 2,780,232 REGISTE 28,16,
28 - Plush toys, rattles, music toys 20
16 - Bookends
20 - Picture Frames
1056/0170 BABY SNUFFY 8/19/19 74/306,008 3/12/19 1,962,167 REGISTE 28
28 - Plush stuffed toys
1056/0187 BABYGUND 2/7/199 75/054,415 9/9/199 2,095,931 REGISTE 25
25 - Clothing, namely, overalls, jackets, pants, shorts, outerwear, booties, headbands, t-shirts,
1056/0125 BABYGUND 2/19/19 74/140,148 12/29/1 1,743,975 REGISTE 28
28 - Stuffed toys