SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number O-28690
HOLLYWOOD PRODUCTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3871821
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
14 East 60th Street, Suite 402, New York, NY 10022 (Address of
principal executive offices) (Zip Code)
(212) 688-9223
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 per share
(Title of Class)
Common Stock Purchase Warrants
(Title of Class)
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Check if no disclosure of delinquent filers in response Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K [ ].
The Registrant=s revenues for its fiscal year ended December 31, 1997 were
$5,262,240. The aggregate market value of the voting stock on March 31, 1998
(consisting of Common Stock, par value $.001 per share) held by non-affiliates
was approximately $3,138,235, based upon the closing price for such Common Stock
on said date ($2.94), as reported by a market maker. On such date, there were
2,336,944 shares of Registrant's Common Stock outstanding.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
Undersigned hereunto duly authorized on the 14th day of April, 1998.
HOLLYWOOD PRODUCTIONS, INC.
By: \s\ Harold Rashbaum
Harold Rashbaum,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
\s\ Harold Rashbaum Chief Executive Officer,
Harold Rashbaum President and Director 04/14/98
(Principal Executive Officer) Date
\s\ Robert DiMilia Vice President, Secretary, 04/14/98
Robert DiMilia and Director Date
\s\ Alain A. Guillou, M.D. Director 04/14/98
Alain A. Le Guillou, M.D. Date
\s\ James Frakes Director 04/14/98
James Frakes Date
</TABLE>
EXHIBIT 10.24
This LICENSE AGREEMENT (this "Agreement") is made and entered into as of
July 1, 1997, by and between KAWASAKI MOTORS CORP., U.S.A., a Delaware
corporation ("Licensor"), and Breaking WAVES, INC., a New York corporation
("Licensee").
RECITALS:
A. Licensee acknowledges that Licensor, either directly or by and through
related companies, is the sole and exclusive owner in the United States and
Canada of the entire right, title and interest, together with all goodwill
connected therewith, in and to the Subject Matter (as the term "Subject Matter"
is defined and described in Schedule "A" attached hereto and made a part
hereof), which by reason of wide-spread advertising and publicity has become
well-known and identified in the minds of the general public.
B. Licensee desires to obtain the right to use the Subject Matter in
connection with the manufacture, sale and distribution of certain articles of
merchandise.
C. Licensor is willing to permit the use of the Subject Matter in
connection with the manufacture, sale and distribution of certain articles of
merchandise by Licensee upon the terms. conditions and covenants set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereby agree as follows:
1. Grant of License
(a) Upon the terms and conditions hereinafter set forth, Licensor hereby
grants to Licensee and Licensee hereby accepts the non-exclusive,
non-transferable right, license and privilege of using the Subject Matter in
connection with the manufacture, sale and distribution of certain articles of
merchandise consisting of those articles described in Schedule "B" attached
hereto and made a part of this Agreement ("Licensed Goods").
(b) The license hereby granted extends only to the territory (the
"Territory") specified in Schedule "C" attached hereto and made a part hereof.
(c) The term of this Agreement and the license hereby granted shall
commence on the date specified in Schedule "D" attached hereto and made a part
hereof, and shall continue until the date specified in Schedule "D", unless
sooner terminated in accordance with the provisions of this Agreement.
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2. Terms of Payment
(a) Licensee agrees to pay to Licensor as fees for the use of the Subject
Matter the sum of money specified in Schedule "E" attached hereto and made a
part hereof. -----------
(b) Within thirty (30) days after the end of each calendar quarter during
the term of this Agreement, Licensee shall furnish to Licensor complete and
accurate statements certified to be accurate by an officer of Licensee showing
the number, description, gross sales price, itemized deductions from gross sales
price, and net sales price of Licensed Goods manufactured, distributed and/or
sold by Licensee and all subsidiaries, parents and affiliates of Licensee during
the preceding calendar quarter, together with any returns made during such
quarter.
(c) Fees for the preceding calendar quarter shall be due within thirty (30)
days from the end of said quarter, and payment therefor shall accompany the
statement furnished as required above. The receipt or acceptance by Licensor of
any of the statements furnished pursuant to this Agreement or of any fees paid
hereunder shall not preclude Licensor from questioning the correctness thereof
at any time, and in the event that any inconsistencies or mistakes are
discovered in such statements or payments, they shall be immediately rectified
and the appropriate payment made by Licensee.
3. Goodwill
Licensee recognizes the great value of the goodwill associated with the
Subject Matter and acknowledges that the Subject Matter and goodwill pertaining
thereto belong exclusively to Licenser and have a secondary meaning in the mind
of the public.
4. Licensor's Title and Protection of Licensor's Rights
Licensee agrees that it will not during the term of this Agreement or
thereafter attack the title or any rights of Licensor, or any related company of
Licenser, in and to the Subject Matter or attack the validity of this Agreement.
Licensee agrees to assist Licensor and to cooperate fully with Licensor to
procure any protection or to protect any of the rights of Licensor or any
related company of Licensor to the Subject Matter or any trademark, service
mark, trade name or copyright or any other protection or right pertaining
thereto. Licensee shall promptly notify Licensor in writing of any infringement
or imitations by others of Licensor's rights in the Subject Matter which may
come to Licensee's attention, and Licensor shall have the sole right, in its
discretion, to determine whether or not any action shall be taken on account of
any such
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infringement or imitations. Licensor may prosecute an action for infringement at
its sole expense and join Licensee in such action. Licensee does hereby
acknowledge and agree that ownership of any and all copyrights, trademarks,
trade names, service marks, logotypes, commercial symbols and all other rights
of any nature whatsoever, including without limitation, goodwill pertaining to
the Subject Matter, shall be and remain in the name of Licensor or related
companies of Licensor. Reference in this paragraph 4 to "Licensee" shall be
deemed to include subsidiaries, parents and affiliates of Licensee.
5. Indemnification and Insurance
Licensee agrees to assume full responsibility for compliance with a11 laws
in connection with the manufacture and/or sale of the Licensed Goods. Licensor
assumes no liability to Licensee or any third party with respect to the Licensed
Goods. Licensee hereby agrees to indemnify, defend and hold harmless Licensor,
Licensor's suppliers and related companies, including without limitation,
Kawasaki Heavy Industries, Ltd. and each of its direct and indirect subsidiaries
and affiliates, and their respective shareholders, directors, officers, agents,
employees and representatives, during the term and after termination or
expiration of this Agreement, from and against any and all claims, suits, loss
and damage, including reasonable attorneys' fees, arising out of, based upon, or
in connection with the Licensed Goods including, without limitation, those
arising out of any alleged defect thereon or infringement thereby of any alleged
patent, trademark, copyright, trade secret, contractual statutory or judicially
created rights of others. Licensee agrees that it will obtain and maintain in
full force and effect during the entire term of this Agreement, and continuing
for a reasonable period of not less than two (2) years immediately following the
termination or expiration of this Agreement, at Licensee's own expense,
comprehensive general liability, property damage and products liability
insurance. acceptable to Licensor in its sole discretion, from an insurance
company approved in writing by Licensor, providing adequate protection in
amounts equal to or greater than the minimum amounts specified in Schedule "F"
attached hereto and made a part hereof, for the protection of Licensor,
Licensor's affiliates, and Licensee against any claims, suits, loss and damage
as aforesaid. One or more fully paid certificates of insurance reflecting the
minimum coverage specified in Schedule "F'. and naming Licensor, Kawasaki Motors
Manufacturing Corp., U.S.A., Kawasaki Heavy Industries, Ltd., and their
subsidiaries and affiliates and Licensee as insured parties shall be submitted
to Licensor by Licensee for Licensor's prior
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written approval before any Licensed Goods are manufactured, distributed or sold
hereunder, and any proposed change in such certificates of insurance shall be
submitted to Licensor for its prior written approval. Licensor shall be entitled
to a copy of the then prevailing certificates of insurance, which shall be
furnished to Licensor by Licensee within five (5) business days after the
purchase of each such insurance policy. No insurance shall be cancelable or
terminable without at least thirty (30) days' prior written notice to be given
to Licensor. However, no such cancellation or termination shall result in
interruption of the coverage as specified above and in Schedule "F".
6. Quality of Merchandise
Licensee agrees that the Licensed Goods shall be of high standard and of
such style, appearance and quality as to be adequate and suited to their
exploitation to the best advantage and to the protection and enhancement of the
Subject Matter and the goodwill pertaining thereto. The Licensed Goods will be
manufactured, sold and distributed in accordance with all applicable federal,
state and local laws, regulations, rules and orders. Neither the Licensed Goods
nor Licensee's policy of sale, distribution and/or exploitation thereof shall in
any manner reflect adversely upon the good name of Licensor or the Subject
Matter. To this end and to the end that the nature and quality of the Licensed
Goods shall be satisfactory, Licensee shall, before selling or distributing any
of the Licensed goods, furnish to Licensor, free of cost, for Licensor's written
approval, a reasonable number of samples of each Licensed Good, together with
their cartons and containers, including packaging and wrapping materials and
catalogs or brochures. The quality and style of all such Licensed Goods, as well
as any carton, container, packaging and/or wrapping materials, shall be subject
to Licensor's prior written approval. After samples of the Licensed Goods,
catalogs, cartons, containers or packaging or wrapping material have been
approved pursuant to this paragraph, Licensee shall not depart therefrom in any
material respect without Licensor's prior written approval. After Licensee has
commenced selling the Licensed Goods, and at least once each year during the
term of this Agreement, upon Licensor's written request, Licensee shall furnish
without cost to Licensor not more than four (4) additional random samples of
each Licensed Good being manufactured and sold by Licensee hereunder, together
with any cartons, containers and packaging or wrapping material used in
connection therewith.
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7. Labeling: Promotional Material
(a) Licensee agrees that it will cause to appear on or within each Licensed
Good sold by it under this Agreement, and on or within all advertising,
promotional or display material pertaining to the Subject Matter, and on any and
all cartons, containers, packaging and/or wrapping material pertaining to the
Subject Matter, such copyright and/or trademark notices, and/or other notices,
as Licensor shall reasonably designate in writing. The form or prototype of each
and every tag, label, imprint or other device containing any such notice or
notices and all consumer warranty, advertising, promotional or display material
and all cartons, containers, packaging and/or wrapping materials pertaining to
the Subject Matter shall be submitted to Licensor for its written approval prior
to use by Licensee.
(b) Licensee agrees that it will cause to appear on each and every label,
carton, container, packaging and/or wrapping materials pertaining to the Subject
Matter the following:
(1) NOTICE: "KAWASAKI(R)". "K", AND "JET SKI(R)". ARE
TRADEMARKS LICENSED BY KAWASAKI MOTORS CORP., U.S.A.
HOWEVER, THIS PRODUCT IS NEITHER MANUFACTURED NOR
DISTRIBUTED BY KAWASAKI MOTORS CORP., U.S.A. CONSUMER
INQUIRIES SHOULD BE DIRECTED TO BREAKING WAVES, INC., 112
WEST 34TH STREET, NEW YORK, NY 10120; and
(2) Either one of the "Licensed product" logos attached to this Agreement
as Attachment 1.
(c) Licensee will submit all advertising and promotional materials related
to the Subject Matter or the Licensed Goods, including without limitation
warranty information, for Licensor's review at least two (2) weeks before the
first time such materials are to be broadcast or published. Licensee agrees not
to use any such advertising or promotional materials without Licensor's prior
written consent. If Licensor has not disapproved any such proposed materials
within ten (10) days after receipt of same from Licensee, such materials shall
be deemed approved.
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8. Distribution
(a) Licensee agrees that during the term of this Agreement, at no expense
to Licensor, it will diligently and continuously, and to the greatest extent
possible, manufacture, promote, distribute and sell the Licensed Goods.
(b) Licensee shall exercise due care to avoid selling or distributing the
Licensed Goods to jobbers, wholesalers, distributors, retail stores or merchants
whose sale or distribution of the Licensed Goods is or will be made for
publicity purposes, combination sales, premiums, giveaways, or similar methods
of merchandising, or whose business methods are questionable. Licensee shall not
sell or distribute to any person, firm or corporation, except Licensor, its
subsidiaries, affiliates and authorized dealers, any of the Licensed Goods for
premium, giveaway, or promotional tie-in purposes without the prior written
consent of Licensor.
(c) In no event shall any sale be made at a special price to any of
Licensee's subsidiaries or to any other person, firm or corporation related in
any manner to Licensee or its officers, directors or stockholders. In the event
any sale is made in violation of this paragraph 8(c), Licensor, in addition to
any of its other rights, shall be paid the fee payable under paragraph 2 hereof,
with the net sales price equal to the price generally and customarily charged by
Licensee to non- affiliated parties.
9. Records
Licensee agrees to keep accurate books of account and records covering all
transactions relating to the license hereby granted. Licensor and its duly
authorized representatives shall have the right at reasonable times to examine
said books of account and records, including without limitation, any available
computer printouts, summaries and/or reports with respect to the Subject Matter
of this Agreement, and the right at any reasonable time upon five (5) days'
prior notice to cause a complete audit to be made of Licensee's entire business
with respect to the Subject Matter. Licensee shall promptly remit any deficiency
in fees established by such audit. If the audit discloses that the actual net
sales or quantities of Licensed Goods sold or distributed by Licensee exceed
those reported by Licensee by two percent (2%) or more, Licensee shall pay the
cost of the audit together with the deficiency in fees, if any. If such audit
discloses that Licensee has overpaid the fees, Licensee shall receive a credit
equal to the amount of such overpayment.
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10. Termination
Licensor shall have the right to terminate this Agreement immediately in
any of the following events:
(a) If Licensee shall not have commenced the manufacture, marketing and
sale of the Licensed Goods in a substantial manner by November 1, 1998;
(b) If Licensee shall substantially suspend the manufacture, marketing,
sale or distribution of any of the Licensed Goods for a period of ninety (90)
days;
(c) If Licensee shall fail to perform any condition or covenant provided
for in the Agreement, other than the payment of money, but including without
limitation the rendering of accountings, within thirty (30) days after written
notice of such failure;
(d) If Licensee shall fail to make any payment due Licensor under paragraph
2 hereof within five (5) days after written demand for such payment by Licensor;
(e) If Licensee during the term of this Agreement becomes insolvent by
reason of inability to pay its debts as they mature, or makes any assignment for
the benefit of creditors, or files any petition under any bankruptcy or
insolvency act, whether state or federal, or is adjudicated a bankrupt, or an
insolvency proceeding is instituted against Licensee, or any receiver is
appointed for Licensee's business or property, or any trustee in bankruptcy is
appointed for Licensee;
(f) If any attachment, execution or other form of sequestration of a
substantial asset or assets of Licensee is levied and is not bonded or
discharged within ten (10) days after such levy becomes effective.
11. Procedure on Termination or expiration
Upon the termination or expiration of this Agreement, Licensee may dispose
of any Licensed Goods then on hand, but only in conformity with the following
express conditions:
(a) Licensee shall deliver to Licensor a complete inventory of Licensed
Goods on hand not later than thirty (30) days following the effective date of
expiration or service of the notice of termination, whichever occurs first.
(b) Licensee shall not cause any further Licensed Goods to be manufactured
after termination or service of a notice of termination, whichever occurs first.
(c) The Licensed Goods specified in the inventory furnished to Licensor
pursuant to the provisions of paragraph 11(a) hereof may be sold only during a
period of one-hundred
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twenty (120) days after the effective date of expiration or termination, and
upon expiration of such 120-day period, at the option of Licensor, either all
remaining Licensed Goods shall be promptly delivered to Licensor at Licensee's
expense or the Subject Matter shall be completely removed and obliterated from
such remaining Licensed Goods.
(d) License fees will be paid pursuant to paragraph 2 hereof, for each
Licensed Good manufactured, sold or distributed by Licensee.
12. Effect of Termination or Expiration
(a) Upon and after the expiration or termination of this Agreement, (i) all
rights granted to Licensee hereunder shall forthwith revert to Licensor, and
(ii) Licensee shall refrain from further use of the Subject Matter or any
further reference to the Subject Matter, direct or indirect, in connection with
the manufacture, sale or distribution of Licensee's products, except as provided
in paragraph 11 hereof.
(b) In the event that Licensor shall be required by reason of any breach
hereof by Licensee to resort to litigation to enforce any of its rights
hereunder, the prevailing party shall be entitled to recover all of its costs
and expenses. including reasonable attorneys' fees, incurred in connection with
such litigation.
(c) Notwithstanding the expiration or termination of this Agreement,
Licensee hereby agrees to continue to pay fees and all other amounts owing to
Licensor, and to deliver statements and reports to Licensor, as specified in
paragraph 2 and Schedule "E" hereof, in respect of all Licensed Goods sold or
distributed during the term of this Agreement and all Licensed Goods sold or
distributed after the termination of this Agreement pursuant to paragraph 11
hereof, including without limitation continuing submission of royalty reports to
Licensor substantially in the form of Schedule "H" attached hereto and made a
part hereof.
13. Renewal
Licensee shall have no right of renewal other than as provided in Schedule
"G" attached hereto and made a part hereof.
14. Force Majeure
In the event that either party hereto is delayed or hindered from the
performance of any act required hereunder by reason of strike, lockouts,
prohibitive governmental laws or regulation, riots, insurrections, war or other
reasons of a like nature beyond the control of such party, then performance of
such acts shall be excused for the period of the delay and the period
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of the performance of any such acts shall be extended for a period equivalent to
the period of such delay but in no event shall said performance period be
extended more than one hundred twenty (120) days. The provisions of this section
shall not, however, operate to excuse Licensee from payment of any fees which
are owing under this Agreement.
15. Notices
All notices and statements to be given, and all payments to be made
hereunder, shall be given or made to the parties hereto at the addresses set
forth below the signatures of the parties, or at any other address designated by
either party in writing to the other, and shall be delivered by hand, telegram,
facsimile transmission, or registered or certified mail, postage prepaid, return
receipt requested. Unless otherwise specified in this Agreement, the date of
mailing to said addresses shall be deemed the date any notice or statement is
given.
16. No Joint Venture
Nothing herein shall be construed to place the parties in the relationship
of partners or joint venturers, and Licensee shall have no power to obligate or
bind Licensor in any manner whatsoever.
17. No Assignment or Sublicense
This Agreement is personal to Licensee and neither this Agreement nor any
of the rights or duties hereunder may be assigned, mortgaged, sublicensed or
otherwise encumbered by Licensee or by operation of law.
18. Construction
This Agreement constitutes the entire Agreement between the parties and all
prior negotiations, understandings and commitments are superseded hereby. This
Agreement may be amended or modified only by an instrument in writing executed
by both of the parties. This Agreement shall be construed in accordance with the
laws of the State of California.
19. Disputes: Arbitration
Except as provided in paragraph 19(e) hereof, all controversies, claims and
disputes arising in connection with this Agreement shall be settled by mutual
consultation between the parties in good faith as promptly as possible, but
failing an amicable settlement shall be settled finally by binding arbitration
in accordance with the provisions of this paragraph 19. Such arbitration shall
be conducted in Irvine, California, in accordance with the commercial
arbitration
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rules of the American Arbitration Association; provided document requests and
depositions shall be permitted.
(a) Exclusivity. The parties hereby agree that the arbitration procedure
provided for herein shall be the sole and exclusive method of resolving any and
all controversies, claims or disputes arising hereunder.
(b) Decision by Arbitrators. Licensor and Licensee shall each select an
arbitrator to resolve any dispute hereunder, and the two arbitrators shall
select a third arbitrator. The three arbitrators shall make a final decision and
award according to the terms and provision of this Agreement and applicable law.
The decision shall set forth findings of fact and conclusions of law upon which
the award 5 based. The arbitrators may select counsel to provide advice in the
preparation of such findings and conclusions, and on any point of law arising in
the course of arbitration. The decision of any two (2) arbitrators shall
constitute a final decision and award hereunder. Judgment upon the award may be
entered in any court which has jurisdiction over such matter in accordance with
the provisions of paragraph 19(d) hereof.
(c) Costs and Expenses. The costs and expenses of the arbitration,
including without limitation attorney's fees, shall be borne by the parties in
the manner determined by the arbitrators; provided, however, the prevailing
party shall be entitled to reimbursement of its costs and expenses, including
without limitation attorneys' fees.
(d) Judicial Action. Legal action for entry of judgment upon any
arbitration award, or adjudication of any controversy, claim or dispute arising
from an alleged breach of paragraphs 19(a) through 19(c) hereof, or any action
for injunctive relief pursuant to paragraph 19(e) hereof, may be heard or tried
only in the courts of Orange County, California. Each party hereby waives any
defense of lack of in personam jurisdiction of said courts and agrees that
service of process in such action may be made upon each of them by mailing it
certified or registered mail, return receipt requested, to the other party at
the address provided for in paragraph 19 hereof. Each party hereby submits to
the jurisdiction of the courts so designated, to the exclusion of any other
courts which might have had jurisdiction apart from this paragraph 19(d) and
agrees that the prevailing party shall be entitled to recover from the
non-prevailing party reasonable expenses, including without limitation
attorneys' fees.
(e) Injunctive Relief. Notwithstanding anything herein to the contrary, the
parties hereby agree that any infringement or improper use of the Subject Matter
by Licensee, or any breach -----------------
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of the Agreement by Licensee with regard to the Subject Matter, including
without limitation a breach under paragraph 4 hereof, will result in immediate
irreparable harm to Licensor. Therefore, in the event of any such infringement,
improper use or breach, Licensor shall be entitled to immediately apply for
injunctive relief in the courts of Orange County, California, as provided in
paragraph 19(d) hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
LICENSOR:
KAWASAKI MOTORS CORP. U.S.A.
A Delaware Corporation
By: Date: 10\14\97
Barry Beehler, Vice President
9950 Jeronimo Road
Irvine, California 92618-2084
Tel: 714-770-0400
Fax: 714-460-5628
LICENSEE:
BREAKING WAVES, INC.
A New York corporation
By: Date: 9\12\97
Malcom Becker, Vice President
112 West 34th Street
New York, New York 10120
Tel: 212-967-8303
Fax: 212-967-8372
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SCHEDULE "A"
The Subject Matter: Licensor's trademark KAWASAKI(R), "K", JET SKI(R), and
any additional or modified trademarks and logotypes pertaining thereto, and
registrations thereon.
SCHEDULE "B"
The Licensed Goods: Boys and Girls swimwear and cover-ups, sizes 2 through
20, bearing the Subject Matter (as defined and described in Schedule "A").
SCHEDULE "C"
The Territory: United States of America and its Possessions.
SCHEDULE "D"
The term of this Agreement and the license hereby granted shall commence as
of July 1, 1997 and shall continue through and including May31, 1999.
SCHEDULE "E'
The fees for the use of the Subject Matter shall be five percent (5%) of
the net sales price of each of the Licensed Goods sold by Licensee and, in the
case of Licensed Goods distributed by Licensee free of charge in connection with
the promotion of the Licensed Goods, five percent (5%) of the product of (a) the
number of Licensed Goods of each type so distributed and (b) the unit price for
each such Licensed Goods usually charged to Licensee's customers. The term "net
sales once" shall mean Licensee's gross receipts from sales, less only credits
actually granted to customers and excluding any consideration received in
connection with the delivery for purposes of resale of any of the Licensed Goods
to any subsidiary, parent or affiliate of Licensee. Reference in this schedule
to "Licensee" shall be deemed to include subsidiaries, parents and affiliates of
Licensee.
In the event the royalty payment is not received by Licensor when due,
Licensee agrees to pay Licensor interest charges at an annual rate of ten
percent (10%). Such interest shall be calculated from the date the payment was
due until actually received by Licensor.
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SCHEDULE "F"
The amount of coverage of insurance to be obtained and maintained by
Licensee shall be (i) bodily injury liability insurance with coverage limits of
not less than $1,000,000 per person and $1,000,000 per occurrence and (ii)
property damage liability insurance with a coverage limit of not less than
$1,000,000 per accident or occurrence.
SCHEDULE "G"
Licensee shall have the option to renew this Agreement for a period of one
(1) years (hereinafter "Renewal Term") said option being exercisable only upon
six (6) months prior written notice to Licensor; however, Licensor shall have
the right to terminate this Agreement, notwithstanding the timely exercise of
said option by Licensee, by giving notice in writing to Licensee prior to the
beginning of any renewal period, if Licensee has not fulfilled all the terms and
conditions of the License Agreement.
SCHEDULE "H"
Sample royalty report: See attached exemplar.
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