1. | LICENSE AND GRANT |
(a) | Licensor hereby grants to Licensee an exclusive (even as to Licensor and its Affiliates (as defined below), royalty-bearing, sublicensable, right and license throughout the Territory to use Porcelana in connection with the design, development, manufacture, advertising, marketing, promotion, offering for sale, sale and distribution of products based upon or using Porcelana (hereinafter known as “Products”) within the Territory. Licensor covenants and agrees with Licensee that during the Term, Licensor shall not grant any license or similar right with respect to the Porcelana to any Affiliate or third party in the Territory. For purposes of this Agreement, the term “Affiliate” means any person or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first person or entity. As used in this definition of Affiliate, “control” and, with correlative meanings, the terms “controlled by” and “under common control with,” shall mean to possess the power to direct the management or policies of an entity, whether through: (a) direct or indirect beneficial ownership of fifty percent (50%) or more of the voting interest in such entity; (b) the right to appoint fifty percent (50%) or more of the directors or equivalent of such entity; or (c) by contract or otherwise. |
(b) | Except as set forth in this Agreement, Licensee shall not acquire any license or other intellectual property interest or other property right, by implication or otherwise, under or to any intellectual property or other property owned or controlled by Licensor or its Affiliates. |
(c) | Licensor represents and warrants that: (i) Licensor is the exclusive owner of all right, title and interest in and to Porcelana, including, without limitation, the Porcelana trademarks listed on Schedule A (the “Licensed Marks”); (ii) Licensor owns Porcelana free and clear of any: (a) liens, charges, security interests, and encumbrances or licenses that would conflict with or limit the scope of any of the rights or licenses granted to Licensee hereunder; and (b) claims or covenants that would conflict with or limit the scope of any of the rights or licenses granted to Licensee hereunder; (iii) Licensor has the full and exclusive right and authority to grant the license herein to Licensee; (iv) Licensor has not received any notice from any third party asserting or alleging |
(d) | Any and all goodwill arising from Licensee’s use of the Licensed Marks shall inure solely to the benefit of Licensor, and, except to the extent the Purchase Option Closing occurs, neither during or after the termination of this Agreement shall Licensee assert any claim to such Licensed Marks or such goodwill. Licensee shall not take any action that could be detrimental to the goodwill associated with the Licensed Marks or Licensor. |
2. | TECHNICAL ASSISTANCE |
3. | TERM |
4. | MANUFACTURE AND QUALITY CONTROL |
(a) | The Products shall be of quality and shall manufactured according to the prevailing standards of the health and beauty aids industry. |
(b) | The Products sold by Licensee here under shall be manufactured only by quality manufacturers selected by Licensee. Licensee, and not Licensor, shall be solely responsible for the manufacture and production of Licensee's requirements thereof and for the marketing, sale and delivery of the Products. |
(c) | Prior to commercial production of any Product, Licensee shall deliver to Licensor for its inspection and approval, free of charge, one prototype sample of each such Product proposed to be manufactured and sold by Licensee and thereafter, upon Licensor's request, Licensee shall submit to Licensor, free of charge, a reasonable quantity of production samples of the Products. Licensor may disapprove of any samples submitted by Licensee which in the Licensor's reasonable opinion, do not conform to the quality standards and specifications established by Licensor or which are reasonably deemed by Licensor not to be consistent with the quality and reputation associated with Porcelana. Licensor shall not unreasonably disapprove of any samples. In the event Licensor disapproves of any samples, Licensee shall not manufacture market, advertise, promote, sell or distribute any of the Products that were rejected until Licensee makes such modifications in the manufacturing process, methods of manufacture and material and components used, as Licensor shall reasonably and specifically request. Licensor may disapprove of any samples required to be delivered to it hereunder upon notice received by Licensee within ten (10) days after such delivery to Licensor and if Licensee does not receive notice of approval or disapproval within such period, such samples shall be deemed approved. |
(d) | Licensee shall furnish to Licensor proposed product packaging for each Product that Licensee proposes to manufacture, sell and distribute. Licensor shall not disapprove of any such proposed product packaging unreasonably, and if Licensee does not receive notice of such approval or disapproval within ten (10) days after receipt of such product packaging by Licensor, such product and packaging shall be deemed approved. Licensee may not use any product or packaging unless Licensor has approved such use or has been deemed to have done so hereunder. |
(e) | All Products shall be manufactured, packaged, labeled, distributed, marketed, advertised and sold in accordance with all applicable governmental regulations in the Territory. |
(f) | Licensee will be responsible, at its own cost and expense, for all sample making and the development and manufacture of the Products. |
5. | OPTION TO PURCHASE |
6. | TERRITORY |
7. | PERCENTAGE ROYALTY; EXISTING INVENTORY |
(a) | In consideration of the License and rights granted herein, Licensee shall pay to Licensor a royalty of ten percent (10%) (the “Percentage Royalty”) on the amount of the Licensee's Gross Factory Sales (as hereinafter defined) of Products manufactured and sold under this Agreement. There shall be no minimum royalty for any period under this Agreement. |
(b) | The term "Gross Factory Sales" shall mean the gross sales price for all sales, shipments or transfers of Products manufactured and sold hereunder by or for Licensee or any of its Affiliates (exclusive of sales or value added tax) after the effective date of this Agreement. Gross Factory Sales shall be deemed to have been made when invoiced by Licensee. |
(c) | Licensee shall pay the Percentage Royalty each fiscal quarter commencing the fiscal quarter beginning with the first sales of the Product. Payments shall be made within forty-five (45) days after the end of each fiscal quarter. The fiscal quarter shall be based on the fiscal quarters of the Licensee. |
(d) | The parties agree that Licensee shall purchase from Licensor all good and saleable inventory of Products in Licensor’s possession or control as of April 1, 2017 at Licensor’s cost, without mark-up. Licensor shall invoice Licensee for such Products upon delivery and all such good and saleable Product shall be paid for by Licensee no later than September 30, 2017. |
(e) | Licensee shall not be responsible for any returns for Products sold by the Licensor, co-operative advertising deductions for advertising that occurred prior to the effective date of this Agreement, or any other deductions that pertain to Product sales that occurred prior to the effective date of this Agreement (together hereinafter known as “Licensor Deductions”). Licensor shall promptly |
(f) | All payments to a party hereunder shall be timely paid in the full amount and, except as expressly set forth in this Agreement, without any deduction or offset therefrom, at such place as the party entitled to receive such payment may specify. In the event payments due under this Agreement are not received by the party entitled to receive such payment by the due date, the party obligated to make such payment shall pay to receiving party interest on the overdue payment from the date such payment was due to the date of actual payment at a rate of 1% per month, or if lower, the maximum amount permitted under law. |
(g) | Unless otherwise agreed by the parties, all payments under this Agreement shall be made in U.S. Dollars. |
8. | BOOKS AND RECORDS |
(a) | Licensee shall keep and maintain in the regular course of its business, in accordance with generally accepted accounting principles, complete and accurate books and records covering all transactions relating to the license granted herein including the amount of Gross Factory Sales of the Products manufactured and sold hereunder, the amount of Percentage Royalty payable here under by Licensee and the manner in which such royalty was computed. Licensee shall preserve and keep available all such books and records for at least three (3) years after the year to which they relate. |
(b) | Licensor agrees and acknowledges that all books, records, correspondence, customer lists and data of Licensee pertaining to transactions relating to the license granted herein are the exclusive property of Licensee. Licensor acknowledges that customer lists compiled by Licensee for the Products constitute trade secrets and are the exclusive property of Licensee and that at no time during the Term, if any, or upon termination of the license, shall Licensor utilize said customer lists for any purpose except to verify and confirm the amount of Gross Factory Sales of the Products, the royalties due Licensor, or in connection with collection of any amount due hereunder of the enforcement of any other rights hereunder. |
(c) | Licensor shall have the right during the Term and for one (1) year thereafter, at its cost and expense during regular business hours, to inspect and copy and make extracts from said books and records and to designate an authorized representative, including without limitation, a certified public accounting firm, to audit Licensee's books and records and to conduct such further investigation as Licensor shall deem necessary to verify Licensee's performance of all its obligations hereunder including, without limitation, payments of Percentage Royalty. |
(d) | If, as a result of any examination of Licensee's books and records, it appears that Licensee's royalty payments were less than the amount which should have been paid, Licensee shall promptly pay the amount of discrepancy or shortage, which shall bear interest at of 1% per month, or if lower, the maximum amount permitted under law, and if the amount of such discrepancy or shortage shall be an amount equal to at least three percent (3%) of the Percentage Royalty actually paid during the period in question, Licensee shall reimburse Licensor for the cost of such examination. |
(e) | The Licensor acknowledges that all information of Licensee which was or will come into its possession or knowledge in accordance with the provisions of this Section 8, consists of confidential and proprietary data whose disclosure to third parties or use by third parties would be damaging to the Licensee and accordingly, the Licensor undertakes to hold such material information in the strictest confidence and not to disclose same to any other party. |
9. | SALES AND PROMOTION |
(a) | Licensee shall use its commercially reasonable best efforts in its sole discretion, to promote and develop the sale of the Products and to exploit the rights granted hereunder in the Territory. |
(b) | Prior to the first use or appearance in any media, Licensee shall submit to Licensor for its inspection and approval, which approval shall not be unreasonably withheld, free of charge, specimens of all advertising, public relations and promotional materials for the Products. All such materials shall be subject to Licensor's prior approval and shall be deemed approved if notice of rejection is not given to Licensee within ten (10) days after receipt by Licensor. |
10. | TERMINATION |
(a) | If either party shall otherwise fail to perform any of the terms, conditions, agreements or covenants in this Agreement, and such default shall continue uncured after written notice for a period of thirty (30) days after notice thereof to the party in default, the nondefaulting party shall have the right to terminate this Agreement upon written notice. |
(b) | Either party may by written notice, terminate this Agreement immediately without incurring thereby any liability to the other, except as hereinafter set forth, in the event the other party shall: (A) be dissolved, be adjudicated, insolvent or bankrupt or cease operations, be unable to admit in writing its ability to pay its debts as they mature or make a general assignment for the benefit of, or enter into any composition or arrangement with, creditors, or file for relief under any insolvency law (except that Licensor may not terminate this Agreement hereunder if Licensee is subject to any bankruptcy proceeding described above); (B) apply for, or consent (by admission of material allegations of a petition or otherwise) to the appointment of a receiver, trustee or liquidator of all or substantial part of its assets or affairs, or authorize such applications or consent, or permit any proceedings seeking such appointment to be commenced against it (whether voluntary or involuntary) which continues undismissed for a period of thirty (30) days; (C) be the subject of any other proceeding not defined above whereby any of the property or assets of Licensee is or may be distributed among its creditors (or any group of them). |
(c) | Licensee shall have the right to terminate this Agreement for convenience at any time upon thirty (30) days’ prior written notice. |
(d) | On the expiration or sooner termination of this Agreement: |
1) | Unless in connection with a termination resulting from the Purchase Option Closing: |
(A) | the rights and license granted to Licensee herein shall forthwith terminate and automatically revert to Licensor; |
(B) | Licensee shall discontinue all use of the Licensed Marks; and |
(C) | Licensor may, in its sole discretion, enter into such arrangements as it deems desirable, with any other party, for the manufacture, promotion and sale of the Products. |
2) | All Percentage Royalties on sales of the Products to the date of expiration or termination shall become immediately due and payable. |
3) | Licensor shall immediately reimburse Licensee for any unreimbursed Licensor Deductions. |
(e) | The termination or expiration of this Agreement shall not relieve either party of any obligation or claim for damages due to Licensor arising or accrued prior to or as of the date of such termination or expiration. |
11. | INSURANCE |
12. | GOVERNING LAW |
13. | ARBITRATION |
14. | SUSPENSION |
15. | INDEMNIFICATION |
(a) | Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates and each of their respective officers, directors, shareholders, employees, successors and assigns (“Licensor Indemnitees”) from and against all claims, allegations, suits, actions or proceedings asserted against any Licensor Indemnitee by any third parties, whether governmental or private (“Third Party Claims”), and all associated damages, awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities, obligations, taxes, liens, losses, lost profits and expenses (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts), together with all documented out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations, investigations and injunctions that arise therefrom (“Losses”), to the extent arising out of or resulting from: (i) a material breach by Licensee or any of its Affiliates, subcontractors or agents of any of Licensee’s representations, warranties, covenants or agreements under this Agreement; or (ii) violation of applicable law by Licensee; provided, however, that in all cases referred to in this Section 15(a), Licensee shall not be liable to indemnify any Licensor Indemnitee for any Losses to the extent that such Losses were caused by (A) the negligence or greater standard of culpability of Licensor or any of its Affiliates, subcontractors or agents, (B) any breach by Licensor or any of its Affiliates, subcontractors or agents of Licensor’s representations, warranties, covenants or agreements under this Agreement, or (C) matters for which Licensor has an obligation to indemnify a Licensee Indemnitee pursuant to Section 15(b). |
(b) | Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates and each of their respective officers, directors, shareholders, employees, successors and assigns (“Licensee Indemnitees”) from and against all Third Party Claims, and all associated Losses, to the extent arising out of or resulting from: (i) a material breach by Licensor or any of its Affiliates, subcontractors or agents of any of its representations, warranties, covenants or agreements under this Agreement; (ii) a claim or demand by a Third Party that Porcelana in or for the Territory infringes any intellectual property or other proprietary rights of such third party; (iii) violation of applicable law by any Licensor Indemnitee; or (iv) any defect in any product supplied by Licensor to the Licensee; provided, however, that in all cases referred to in this Section 15(b), Licensor shall not be liable to indemnify any Licensee Indemnitee for any Losses to the extent that such Losses were caused by (A) the negligence or greater standard of culpability of Licensee or any of its Affiliates, subcontractors or agents, (B) any breach by Licensee or any of its Affiliates, subcontractors or agents of Licensee’s representations, warranties, covenants or agreements under this Agreement, or (C) matters for which Licensee has an obligation to indemnify any Licensor Indemnitee pursuant to Section 15(b). |
(c) | In the case of a Third Party Claim as to which a party (the “Indemnitor”) may be obligated to provide indemnification pursuant to this Agreement, such party seeking indemnification hereunder (“Indemnitee”) will notify the Indemnitor in writing of the Third Party Claim (and specifying in reasonable detail the factual basis for the Third Party Claim and to the extent known, the amount of the Third Party Claim) reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually materially prejudiced as a result of such failure. The Indemitee shall afford the Indemnitor thirty (30) days following notification of a Third Party Claim for which indemnification will be sought acknowledge in writing its obligation and agreement to defend, contest, negotiate and compromise or settle such Third Party Claim in the Indemnitee’s name and in such event, the Indemnitor shall not compromise or settle any such Third Party Claim prior written consent of the Indemnitee. If the Indemnitor does not elect to assume control by written acknowledgement of the defense of any Third Party Claim within the thirty (30) |
16. | ASSIGNMENT |
17. | NOTICES |
18. | REMEDIES AND WAIVERS |
19. | NO AGENCY RELATION |
20. | INTERPRETATION AND CONSTRUCTION |
21. | THIRD PARTY BENEFICIARIES |
22. | SEVERABILITY |
23. | No IMPLIED WAIVERS; RIGHTS CUMULATIVE |
24. | AMENDMENT |
25. | COMPLETE AGREEMENT |
Trademark | Client/Matter #/Subcase Country Name | Status Class(es) | Application Number/Date | Registration Number/Date |
PORCELANA | 688211.0108/ Australia | Registered 05 Int. | 405923 28-Mar-1984 | A405923 28-Mar-1984 |
PORCELANA | 688211.0141/ Australia | Registered 03 Int. | 591876 | |
PORCELANA | 688211.0113/ Canada | Registered 00 National | 450275 19-Feb-1980 | 279528 13-May-1983 |
PORCELANA | 688211.0118/ Ecuador | Registered 05 Int. | 35866 09-Dec-1992 | 59/94 01-Feb-1994 |
PORCELANA | 688211.0105/ | Registered | 10197002 | 10197002 |
European Union (Community) | 03 Int., 05 Int., 44 Int. | 15-Aug-2011 | 15-Mar-2012 | |
PORCELANA | 688211.0132/ | Registered | 1086/88 | 1086/88 |
Singapore | 05 Int. | 12-Mar-1988 | 12-Mar-1988 | |
PORCELANA | 688211.0135/ | Registered | 20498 | 20498 |
Trinidad and Tobago | 03 Int. | 28-Feb-1992 | 03-Oct-1994 | |
PORCELANA | 688211.0136/ | Registered | 4801 | 5118 |
United Arab Emirates | 05 Int. | 01-Feb-1994 | 01-Feb-1994 | |
PORCELANA | 688211.0093/ | Registered | 77/182,705 | 4,035,214 |
United States of America | 03 Int. | 16-May-2007 | 04-Oct-2011 | |
PORCELANA | 688211.0096/ | Registered | 73/091,120 | 1,119,493 |
United States of America | 05 Int. | 21-Jun-1976 | 05-Jun-1979 |