THIS AGREEMENT, made and entered into as of the _____ day of _____, 20_____, by and between _______________, with a principal place of business at ___________________ __________________________, (hereinafter referred to as “Licensor”), and Licensee, Inc., a corporation organized and existing under the laws of the state of _______________, and having its principal office at _____________________________________________ (hereinafter referred to as “Licensee”).

WITNESSETH:

WHEREAS, Licensor is the sole and exclusive owner of the rights being licensed herein with respect to United States trademark registration No. __________ for (insert mark), and all associated rights arising through common law in the United States, including all associated goodwill, (the “Licensor Trademark”); and

WHEREAS, Licensee is, among other things, in the business of manufacturing and selling __________ (insert product definition) ____________________________________________ ______; and

WHEREAS, Licensor and Licensee foresee a mutually beneficial use of the rights being licensed herein; and Licensor is willing to grant the exclusive license specified below to Licensee; and Licensee is desirous of obtaining the rights to manufacture, promote, and sell (insert type of product) bearing the Licensor Trademark to promote such sales.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, receipt of which is hereby acknowledged, it is hereby agreed as follows:

Grant of License. Licensor hereby grants to Licensee (including its subsidiaries and affiliates) the exclusive right and license to use the Licensor Trademark in connection with the manufacture, marketing, distribution, and sale of (name product) (hereinafter referred to as the “Licensed Products”).

Marketing Rights. The marketing rights granted in Section 1 shall include, but not be limited to, the right to use the Licensor Trademark in connection with advertising, packaging, and promotional materials, including, but not limited to, promotional posters, and shall be exploited in all forms of media, including, but not limited to, the Internet and World Wide Web.

Territory and Distribution. The foregoing license shall be for the United States and shall extend to all channels of distribution without limitation.

Note: If you own TM rights beyond the United States and want to include said rights, #3 above is where to list them.

Right to License. Licensor hereby expressly warrants that it possesses all the rights and authority necessary to enter into this Agreement, that it has the right to convey the licenses granted herein, that is has granted no other license with respect to the Licensed Products, that Licensee is not required to obtain further approvals from any third party in order to exercise the rights granted to Licensee under this Agreement, and, further, that it is not engaged in any litigation or conflict of any nature whatsoever involving its rights in and to the Licensor Trademark. Licensor agrees that during the term hereof, it will not give any other person, firm, association, or corporation a license or right to manufacture or sell in the Territory any items similar to the Licensed Products.

Consideration.

As consideration for the rights granted herein, Licensee agrees to pay Licensor a royalty at the following percentage of the “Net Wholesale Selling Price” on sales of the Licensed Products by Licensee. The royalty rate shall be (insert number) percent (_____%).

As an advance against such royalties, Licensee shall pay Licensor the nonrefundable sum of $_____ upon execution of this Agreement.

As used herein, “Net Wholesale Selling Price” is defined as the gross wholesale selling price on all sales of the Licensed Products after deductions for customary trade discounts, returns that are accepted and credited by Licensee, and markdown allowances. For sales direct to consumers, the Net Selling Price shall be the gross wholesale selling price (regardless of the direct-to-consumer price) less returns actually received, shipping, and handling expenses. No royalties shall be paid on “close-out” sales, which are defined as any sale at a net selling price of less than seventy-five percent (75%) of Licensee’s usual price to its customers, and made in contemplation of ceasing sales of the Licensed Products.

Note: The terms in “c” above are negotiable and may vary by industry and product.

In the event the Licensed Products are sold in sets with other products that do not incorporate the Licensor Trademark, royalties shall be paid only on that portion of the Net Wholesale Selling Price of the set attributable to the Licensed Products. The dollar amount of royalty per unit paid to Licensor from sales to customers affiliated with Licensee shall be the same sum as paid on sales of the same item to unaffiliated customers, regardless of the actual Net Wholesale Selling Price to such affiliated customer. Also, if two or more Licensed Products are sold together as one product with a single SKU, one royalty shall be paid on such sale.

Term. The term of this Agreement shall commence on the date first above written and shall continue through _____ 20_____. Licensee shall have an option to extend the term hereof for an additional three (3) years, commencing upon the expiration of the preceding term and continuing through _____ 20_____. This option shall be exercised, if at all, by written notice given to Licensor at least thirty (30) days prior to the expiration of the then current term, provided that Licensee pays Licensor $_____ on January 1 of each year extended by the option (e.g., January 1, 20_____; January 1, 20_____; and January 1, 20_____). Upon expiration of this extended term, if any, Licensee shall have a continuing, perpetual option to extend the term for additional one-year (1) periods, commencing upon the expiration of the preceding term. Each such option shall be exercised, if at all, by written notice given to Licensor at least thirty (30) days prior to the expiration of the then current term, provided that Licensee pays Licensor $_____ on January 1 of each year extended by the applicable option.

Termination.

Licensor Breach. In the event Licensor breaches any representation or warranty made in this Agreement or breaches any material obligation under this Agreement, Licensee may give written notice to Licensor calling attention to such breach and stating Licensee’s intent to terminate this Agreement unless Licensor remedies such breach within five (5) days after receipt of such notice. If the breach is not remedied to Licensee’s reasonable satisfaction, Licensee may serve written notice immediately terminating the Agreement and seek all legal remedies to which it is entitled under the law, or at equity.

Licensee Breach. In the event Licensee breaches any material obligation under this Agreement, Licensor may give written notice to Licensee calling attention to such breach and stating Licensor’s intent to terminate this Agreement unless Licensee remedies such breach within five (5) days after receipt of such notice. If the breach is not remedied to Licensor’s reasonable satisfaction, Licensor may serve written notice immediately terminating the Agreement and seek all legal remedies to which it is entitled under the law.

Licensee Default. In the event Licensee should at any time default by failing to make any payment hereunder, or fail to make any report required under this Agreement and thereafter fail to remedy such default within seven (7) days after notice thereof by Licensor, then Licensor may, at its option, terminate this Agreement and the license granted herein by notice to that effect, but such act shall not relieve Licensee of its liabilities accruing up to the time of termination.

Effect of Termination.

Subject to the disposal of inventory provisions of Section 9, upon and after termination of this Agreement, all rights granted to Licensee hereunder shall forthwith revert to Licensor, and Licensee will refrain from further use of the Licensor Trademark in connection with the manufacture, sale, or advertising of the Licensed Products and goods similar to the Licensed Products.

Notwithstanding termination or expiration of this Agreement and the licenses granted herein, the obligations in Section 12 shall survive such termination for a period of three (3) years.

Sell-Off. In the event of expiration or earlier termination of this Agreement, except for nonpayment of financial obligations to Licensor, Licensee shall have the right to dispose of its existing inventory of the Licensed Products, whether completed or in the process of manufacture, for a period of three (3) months after expiration or such early termination, and may do so: (a) at prices less than its normal wholesale price; and (b) through its normal marketing efforts and distribution channels. Royalty payments shall continue, unless such sales are on a close-out basis. Notwithstanding the aforementioned rights to dispose inventory, Licensee acknowledges that it shall have no rights to sell any Licensed Products that materially deviate in quality from the samples approved by Licensor.

Intellectual Property

Trademark Ownership. Licensee shall have the right, in its discretion, to obtain trademark and copyright protection that will adequately protect the Licensed Products from competition worldwide, except for the United States, and, if such protection is sought by Licensee, then Licensee shall bear the expense of obtaining such protection. It is the express understanding and agreement of the parties that Licensee shall be the sole owner of any and all trademarks and copyrights which are designed, invented, developed, or acquired by or for Licensee and used in connection with the Licensed Products, with the exception of the Licensor Trademark. Licensor acknowledges and agrees that Licensee is the sole owner of all right, title, and interest in and to the Licensee Trademarks (as defined in Section 10[b]), and all associated goodwill and other interests.

No Derogation of Licensee’s Rights. Licensor shall not: (a) do anything that might harm the reputation or goodwill of the trademarks, trade names, service marks, logos, designations, or marks owned, registered, or licensed to Licensee, or that may be owned, registered, or licensed to Licensee (collectively, the “Licensee Trademarks”); (b) take any action inconsistent with Licensee’s ownership of the Licensee Trademarks; or (c) challenge Licensee’s rights or interest in the Licensee Trademarks, or attempt to register the Licensee Trademarks or any mark or logo substantially similar thereto. Licensee’s use of the Licensee Trademarks inures solely to the benefit of Licensee.

Further Assurances. Licensor agrees to cooperate with Licensee and take all reasonable actions required to vest and secure in Licensee the ownership rights and appurtenant interests as provided in this Agreement, and shall also assist Licensee to the extent necessary to protect and maintain the Licensee Trademarks, including but not limited to: (a) giving prompt notice to Licensee of any known, actual, or potential infringement of the Licensee Trademarks; and (b) cooperating with Licensee in the preparation and execution of any documents necessary to register the Licensee Trademarks.

Quality Approval.

In the manufacture, sale, and distribution of the Licensed Products, Licensee shall maintain standards of quality that conform to those quality standards used at present by Licensee with respect to the manufacture, distribution, and sale of Licensee’s goods and those high-quality standards evidenced by the samples of Licensee products furnished to and inspected by Licensor.

In order to ensure that the high level of quality standards described above are maintained, Licensee shall furnish to Licensor one (1) sample of each category of the Licensed Products for Licensor’s inspection and approval, which approval shall not be unreasonably withheld. Licensor shall be deemed to have approved any sample unless written rejection thereof is sent to Licensee, directed to the attention of the Licensee Product Legal Department, within ten (10) days of receipt of the sample by Licensor.

(c) Licensee shall utilize a continuous quality-control system to ensure that high quality standards are maintained. Furthermore, upon reasonable notice and no more than twice during any one calendar year, Licensee’s facilities for the manufacturing, sale, and distribution of Licensed Products shall be subject to inspection during reasonable business hours by Licensor or its duly authorized representative.

Indemnification.

Licensor agrees to indemnify and save harmless Licensee from and against claims, demands, damages, costs, and attorney’s fees involving any breach of the representations and warranties contained herein and from any claim alleging that the Licensor Trademark infringes the rights of any third party. If any third party brings a lawsuit or makes a claim alleging that Licensee’s use of the Licensor Trademark constitutes an infringement of the rights of such third person, Licensee shall give Licensor notice of such claim or lawsuit. Licensor shall defend any such lawsuit or claim, and any and all expenses thereof and all liabilities resulting therefrom shall be borne solely by Licensor. After notice has been received by Licensee, Licensee shall be entitled to escrow all royalties accrued thereafter to defray costs incurred and damages assessed until such time that the infringement charge is settled or otherwise disposed of. Any excess in such escrow account shall be paid to Licensor. Such indemnity shall be in addition to any other remedy available to Licensee.

Licensee agrees to indemnify and save harmless Licensor and undertakes to defend itself and Licensor against and hold Licensor harmless from any claim, suits, loss, and damage, including Licensor’s reasonable and necessary attorneys’ fees arising out of any allegedly unauthorized use of any patent, process, idea, method, or device by Licensee in connection with the Licensed Products or arising out of alleged defects in the Licensed Products.

Product Liability Insurance. Licensee confirms that it has and will maintain, at its own expense, product liability insurance from a recognized insurance company providing coverage in the amount of at least two million dollars ($2,000,000.00) for any such product liability claim. As proof of such insurance coverage, upon request, Licensee shall provide Licensor with a certificate of insurance showing Licensor as an additional insured party, which certificate shall obligate insurer to provide ten (10) days written notice to Licensee of any termination or reduction of coverage confirmed by such certificate.

Royalty Reports. Licensee shall, within (insert number) (_____) days following the end of each calendar quarter, starting with the month in which sales of the Licensed Products commence, submit to Licensor a report covering the sales of the Licensed Products during the preceding quarter, and Licensee shall therewith transmit to Licensor payment of the amount due under Section 5 hereof.

Books and Records. Licensee agrees to keep full and accurate books of account, records, data, and memoranda respecting the manufacture and sales of the Licensed Products in sufficient detail to enable the payments hereunder to Licensor to be determined, and Licensee further gives Licensor the right, at its own expense, to examine said books and records on prior written notice of at least ten (10) days, insofar as they concern the Licensed Products and not more often than once in any calendar year, for the purpose of verifying the reports provided for in this Agreement. In the event that Licensor examines the records, documents, and materials in the possession or under the control of Licensee with respect to the subject matter, such examination shall be conducted by an independent auditor selected by Licensor and approved by Licensee, such examination being conducted in such manner as to not unduly interfere with the business of Licensee. Licensor’s representatives shall not disclose to any other person, firm, or corporation any information acquired as a result of any such examination, provided, however, that nothing herein contained shall be construed to prevent Licensor and/or its duly authorized representatives from testifying in any court of competent jurisdiction with respect to the information obtained as a result of such examination, in any action instituted to enforce the rights of Licensor under the terms of the Agreement.

Excused Performance. It is understood and agreed that in the event of an act of government; war; fire; flood; interruptions of transportation; embargo; accident; explosion; act of terrorism; inability to procure or shortage of supply and materials, equipment, or production facilities; prohibition of transportation of the Licensed Products; strike, lockout, or other labor trouble interfering with the production or transportation of such goods or with the supplies of raw materials entering into their production; or an Act of God; or other cause beyond the control of Licensee, Licensee shall not be liable for failure of performance hereunder, and such nonperformance shall be excused while, but no longer than, the conditions described herein prevail.

No Waiver. A failure by either party to enforce any of the provisions of this Agreement or rights or remedies with respect thereto or to exercise election therein provided shall not constitute a waiver of such provision, right, remedy, or election, or affect the validity thereof or of this Agreement.

Assignment. Licensee may assign or sublicense this Agreement to any subsidiary or affiliate corporation, provided, however, that such assignee or sublicensee shall thereafter be bound by all provisions of this Agreement.

Note: You may deny the right to sublicense.

Notices. All notices wherever required in this Agreement shall be in writing and sent by certified mail and shall be deemed given when mailed or, alternatively, shall be given by facsimile with receipt notification, and shall be deemed given upon receipt of notification when given to the respective addresses/facsimile numbers of the parties as set forth below:

If to Licensor:

Validity. If any provision of this Agreement is for any reason declared to be invalid, the validity of the remaining provisions shall not be affected thereby.

Binding Nature. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.

Choice of Laws. This Agreement and each and every one of its provisions shall be interpreted under the laws of the State of (insert your state).

Confidential. Each party to this Agreement agrees to consider the terms of the Agreement as confidential and not to divulge the business terms and conditions of the Agreement without the prior written consent of each other party.

Entire Agreement. This Agreement represents and expresses the entire agreement of the parties and supersedes all prior agreements, representations, and understandings (written or oral) between the parties concerning the subject matter hereof. An amendment or modification of a term or condition of this Agreement must be in writing duly executed by both parties.

IN WITNESS WHEREOF, the parties have hereunto set their hands to this Agreement: