Attachment 2 Example USMC Trademark License Proposal 2023.pdf

United States Marine Corps

TRADEMARK LICENSE AGREEMENT

This Agreement is made, entered into, and effective as of the date of execution of the last party hereto, between the United States Marine Corps, an agency of the United States Government, Marine Corps Trademark Licensing Office, 925 Corporate Drive Suite 208, Stafford, Virginia 22554 (hereinafter referred to as “OWNER”), and Company, Address (hereinafter referred to as “LICENSEE”). In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

1. DEFINITIONS

1.1 CREATION means all concepts, artwork, designs, images, names, advertisements, tags, labels, hang tags, photographs, names, likenesses, symbols, logos, copyrights, trade dress, trademarks or the like, and other ornamentation (hereafter “ORNAMENTATION”), incorporating, in whole or in part, the PROPERTY or used in association with the PROPERTY in any manner, but excluding any aspects of the ORNAMENTATION that exists independently of the PROPERTY and/or does not have the PROPERTY incorporated within it.

1.2 DISTRIBUTION CHANNELS shall mean only those channels of distribution specifically set forth in EXHIBIT 8.

1.3 DISTRIBUTOR means a purchaser authorized to purchase LICENSED ARTICLES from

LICENSEE for resale to an entity other than the end user, and which is authorized to advertise, market, and/or promote the LICENSED ARTICLES only to the trade.

1.4 LICENSED ARTICLES means each of the articles of merchandise or products, and their packaging or component parts “including but not limited to blanks” bearing the PROPERTY as set forth in EXHIBIT 1.

1.5 LICENSED TERRITORY means the country or countries, or portions thereof, listed in EXHIBIT

2.

1.6 MANUFACTURER means a person or entity appointed by LICENSEE and approved by

OWNER to manufacture LICENSED ARTICLES, and/or any other materials bearing the

PROPERTY.

1.7 NET SALES means gross invoice price invoiced to DISTRIBUTORS or customers less actual and customary returns and separately listed applicable taxes. Actual and customary returns are limited to five percent (5%) of the total of the gross invoice price for all of the LICENSED ARTICLES sold during each reporting period. No other deduction or recoupment shall be allowed of any kind, including, without limitation and by way of example, cash discounts, early payment discounts, year-end rebates, costs incurred in manufacturing, selling, distributing, shipping and handling costs, advertising (including cooperative and promotional allowances, fixturing, merchandising guides, displays, or the like), uncollectable accounts, commissions, or any other amounts, nor shall such deductions or recoupment be netted against the sales price to arrive at the gross invoice price or any reduced gross invoice price. A sale shall be deemed to have occurred when a LICENSED ARTICLE is shipped, billed out or paid for, whichever is first.

All sales by LICENSEE of LICENSED ARTICLES to any of its affiliates or to any entity associated with LICENSEE, including all inter-company transactions, shall be carried on LICENSEE’s books of account at the full regular WHOLESALE price charged to unrelated third parties, and LICENSEE shall account for and pay ROYALTY PAYMENTS on all such sales as if they occurred on an arms-length basis to an unrelated WHOLESALE account.

1.8 PREMIUMS means any LICENSED ARTICLE sold at cost or near cost, given away free of charge, or otherwise used for the purpose of increasing the sale, promoting, or publicizing any other product or any service, including but not limited to, incentives for sales forces, trade and consumer promotions, and incentives for fundraising.

1.9 PROMOTION COMMITMENT means the amount specified in EXHIBIT 10 which LICENSEE agrees to spend during each year of this agreement on consumer advertising and promotion activities as detailed in Sections 14.2 and 14.3.

1.10 PROPERTY means the names, symbols, designs, logos, artwork, copyrights, trade dress, trademarks and/or other Marine Corps Intellectual Property set forth in SCHEDULE A.

1.11 ROYALTY PAYMENTS means the total NET SALES of all LICENSED ARTICLES sold, multiplied by the applicable ROYALTY RATE as further detailed in Section 3.1.

1.12 ROYALTY RATE means the percentage of NET SALES to be paid by LICENSEE to OWNER, as set forth in EXHIBIT 4. ROYALTY RATES and associated licensing fees are proprietary and shall not be shared with third parties, including but not limited to, divulging them to LICENSEE’S customers so as to explain or justify LICENSEE’S pricing structure.

1.13 HOLOGRAM means a multi-dimensional image.

1.14 HANG TAG means a security item containing a HOLOGRAM that is constructed of film laminated to paper stock with a serialized number.

1.15 LABEL means a security item containing a HOLOGRAM that has been converted to an adhesive sticker carrying a serialized number/QR Code.

1.16 RETAIL means the sale of LICENSED PRODUCT from LICENSEE to an end user.

1.17 WHOLESALE means the discounted sale of LICENSED PRODUCT in bulk from LICENSEE to an entity who in turn sells the product to an end user.

2. GRANT OF LICENSE.

2.1 NON-EXCLUSIVE LICENSE. OWNER hereby grants to LICENSEE a non-exclusive license to use the PROPERTY in the LICENSED TERRITORY solely upon or in connection with

LICENSED ARTICLES in the DISTRIBUTION CHANNELS during the TERM pursuant to the terms and conditions of this Agreement.

2.2 TERM. The term of the license granted by this Agreement shall be for the period set forth in

EXHIBIT 3 (the “TERM”), unless terminated in accordance with the provisions hereof.

2.3 LIMITATIONS ON LICENSE. The license granted herein shall be limited to the express terms set forth herein and shall not include any right of LICENSEE to do any of the following acts, each of which is expressly prohibited: (a) manufacture any item whatsoever, including the packaging thereof, bearing the PROPERTY, except for LICENSED ARTICLES; (b) grant sublicenses or assignments in or of the license granted herein or any portion hereof, except as approved in writing by OWNER and/or, in the case of MANUFACTURERS, where the sublicensed MANUFACTURER has executed a Manufacturers Agreement as required by Section 12 herein; (c) produce any LICENSED ARTICLES under any name other than LICENSEE’s name set forth on Page 1 (One) of this Agreement; (d) use or knowingly permit the use of any of the PROPERTY in any manner or for any purpose not specifically authorized under this Agreement; (e) change, alter, add to, delete from, augment, or modify the LICENSED ARTICLES in any way or mix the PROPERTY with any other unauthorized indicia; (f) sell the LICENSED ARTICLES to any person or entity for incorporation into another product or souvenir that has not been properly licensed by OWNER; or (g) without written approval by OWNER, incorporate or use the PROPERTY or similar words or images thereto in conjunction with LICENSEE’s company name, or as a trademark, or as a generic name. No licenses granted hereunder for the manufacture, sale, or distribution of LICENSED ARTICLES are to be used as PREMIUMS, or otherwise sold for less than the usual selling price for the purpose of increasing sales. Except as otherwise explicitly set forth herein, LICENSEE shall not use any of the PROPERTY in connection with (i) any unauthorized sweepstakes, lottery, game of chance or any similar promotional sales device, scheme, or program, and/or (ii) any co-branding, commercial tie-ins, premiums, and/or promotion of any products, services or businesses other than the

LICENSED ARTICLES.

2.4 RESERVATION OF RIGHTS. OWNER explicitly reserves and retains all rights not expressly granted to LICENSEE herein.

3. ROYALTIES, MINIMUM ROYALTIES, REPORTS AND PAYMENTS, BUSINESS

PLAN, DISTRIBUTION AND MARKETING, AND SALE TO OWNER

3.1 ROYALTY PAYMENTS. LICENSEE shall pay to OWNER an amount equal to the ROYALTY

RATE of all NET SALES of LICENSED ARTICLES made during the TERM (the “ROYALTY PAYMENTS”). Sales of non ‘Made in USA’ LICENSED ARTICLES listed in EXHIBIT 1 made on a letter of credit, or F.O.B. basis, or to a DISTRIBUTOR shall be at 14%. Payments shall be sent and made payable to OWNER in accordance with Section 3.6.

3.2 LICENSING FEE. LICENSEE shall pay OWNER the amount on the date set forth in EXHIBIT

5 (or upon execution by OWNER if no date is set in EXHIBIT 5) as a non-refundable payment.

Such LICENSING FEE shall be sent and made payable to OWNER in accordance with Section

3.7 below.

3.3 MINIMUM ROYALTIES. Subject to Section 3.4 and notwithstanding any other contrary provision herein, LICENSEE agrees to pay OWNER the difference between (i) the minimum guaranteed ROYALTY PAYMENTS (“MINIMUM ROYALTIES”) set forth in EXHIBIT 6, and

(ii) running ROYALTY PAYMENTS actually paid in accordance with Sections 3.1 and 3.7.

MINIMUM ROYALTIES shall be paid in accordance with the payment schedule set forth in EXHIBIT 6, provided that if no date is set forth in EXHIBIT 6, payment shall be made in equal quarterly installments on or before the 15th of March, June, September, and December of each calendar year. The MINIMUM ROYALTIES set forth in this Section 3.3 are obligations of LICENSEE to OWNER and are fully earned by OWNER upon execution of this Agreement.

Subject to Section 3.4 and notwithstanding any other contrary provision herein, the difference between (i) all running ROYALTY PAYMENTS paid or payable, for each calendar year and each country or category and (ii) MINIMUM ROYALTIES shall be paid to OWNER within thirty (30) days from the end of each calendar year. Subject to Section 3.4 and notwithstanding any other contrary provision herein, if this Agreement is terminated by OWNER because of any breach by LICENSEE, without prejudice to OWNER’s other right and remedies, the greater of (i) all running ROYALTY PAYMENTS and (ii) all of the MINIMUM ROYALTIES for the TERM shall be deemed to be fully earned and shall be paid to OWNER within thirty (30) days from the effective date of any such termination.

3.4 NO CROSS-COLLATERALIZATION. Except as explicitly permitted in EXHIBIT 6, any amount by which actual ROYALTY PAYMENTS paid or payable to OWNER hereunder exceed the MINIMUM ROYALTIES for any time period, geography, distribution channel, or other category during the TERM hereof may not be credited or applied to MINIMUM ROYALTIES paid or payable for any other time period, geography, distribution channel, or other category, as applicable.

3.5 ROYALTY REPORT. All Royalty Reports shall be in the format prescribed by OWNER’s licensing services provider (BrandComply) via LICENSEE’s contract in BrandComply and are due in accordance with the chart below.

Due dates for quarterly reporting

Quarter Report period Report due by

1 January 1 through March 31 April 30

2 April 1 through June 30 July 31

3 July 1 through September 30 October 31

4 October 1 through December 31 January 31

LICENSEE agrees that OWNER shall have the right, in its sole discretion, upon thirty (30) days advance written notice to LICENSEE, to change the ROYALTY REPORT form. Such change of the ROYALTY REPORT form may include an OWNER approved electronic form to be provided to OWNER by LICENSEE.

OWNER will assess a 40.00 late fee for each instance that LICENSEE fails to submit a royalty report in accordance with the royalty reporting chart above (para 3.5).

3.6 METHOD OF ROYALTY PAYMENTS. OWNER will invoice LICENSEE upon receipt of

ROYALTY REPORT through the Centralized Receivables Service (CRS) on behalf of the U.S.

Department of the Treasury. Available payment methods are enumerated on the invoice received from CRS and include; online payment via checking/savings account, credit card, and by phone.

If LICENSEE fails to pay the full amount within 90 days from the date of the invoice, the CRS will refer your debt to the U.S. Department of the Treasury for collection, at which time additional administrative fees of up to 30% will be added to your debt among other actions.

All ROYALTY REPORTS and any other report required by this Agreement shall be submitted by LICENSEE's authorized representative and LICENSEE hereby certifies the accuracy of any such reports. Questions concerning any financial matter shall be e-mailed to trademark_royalties@usmc.mil.

If inconsistencies or mistakes are discovered in such ROYALTY REPORT or payments, they shall immediately be rectified and the appropriate payment shall be made by LICENSEE if an underpayment was made by LICENSEE, or set off against LICENSEE's next ROYALTY PAYMENT and/or other payment to OWNER if an overpayment was made by LICENSEE.

3.7 METHOD OF PAYMENT: LICENSING FEE. All LICENSING FEE PAYMENTS shall be made upon notice by OWNER and shall be processed through Pay.gov. or other OWNER approved method of payment. All bank fees related to any payments required to be made by LICENSEE under this Agreement shall be the sole expense of LICENSEE, so that OWNER shall receive the full amount of all payments without reduction.

3.8 INTEREST DUE ON ALL PAST DUE AMOUNTS. Federal agencies are required to assess interest, administrative costs and penalties on past due amounts. Interest accrues at the annual rate of 1% on any amount outstanding from the CRS Invoice Date. Administrative costs include processing and handling of unpaid balances. A penalty will be assessed at the annual rate of 3% on any amount outstanding after 90 days from the Invoice Date.

3.9 MONETARY CONVERSION AND MISCELLANEOUS PROVISIONS. Any and all payments required hereunder shall be made in U.S. currency. If any currency conversions are required under this Agreement, LICENSEE agrees that all currency conversions shall be made by utilizing the exchange rate in effect on the due date for any such payment as reported in OANDA.

The cost of conversion of all local currencies into U.S. currency shall be the sole expense of LICENSEE. Any cost of conversion built into a bank’s exchange rate must be accounted for with a corresponding increase in the amount being converted so that all the costs of conversion of all currencies, as well as wire transfers or other bank fees, shall be the sole expense of LICENSEE, so that OWNER shall receive the full amount of payments without reduction.

LICENSEE shall withhold as taxes on all payments to be made to OWNER only such amounts as are absolutely required to be withheld by law in the country from which payment is being made.

LICENSEE shall submit to OWNER originals of the remittance voucher and the official receipt evidencing the payment of the corresponding taxes. LICENSEE shall fully cooperate with OWNER and provide such information and records as OWNER may require in connection with any application by OWNER to the tax authorities in the LICENSED TERRITORY and/or the

United States of America including but not limited to, the obtaining of a credit for any withholding tax paid in the LICENSED TERRITORY or any country from which ROYALTY PAYMENTS and any other payments are being made by LICENSEE to OWNER pursuant to this Agreement.

3.10 BUSINESS PLAN. Within thirty (30) days after the end of each calendar year, LICENSEE shall provide OWNER a written business plan detailing information related to LICENSEE’s plans (as related to the subject matter of this Agreement) for the following calendar year, including, but not limited to, LICENSEE's product development plans, advertising, merchandising and promotional activities, good faith estimates of NET SALES for the following calendar year, and a breakdown of such estimated NET SALES by key accounts or distribution channels. In the event LICENSEE materially deviates from such business plan, LICENSEE shall promptly provide OWNER with written notice thereof and shall, within thirty (30) days after sending such notice, provide OWNER with a revised business plan. In addition, within ten (10) days after the end of each calendar quarter, LICENSEE shall also provide OWNER with a written good faith estimate of updated revenue projections for the next calendar quarter consistent with the then-current orders for LICENSED ARTICLES.

3.11 DISTRIBUTION AND MARKETING OF LICENSED ARTICLES. LICENSEE recognizes the PROPERTY has a reputation for being associated with high quality products and the distribution, sale and marketing of LICENSED ARTICLES might affect the reputation of the PROPERTY, that such distribution, sale and marketing of the LICENSED ARTICLES is subject to the approval and control of OWNER who might, at its sole discretion and subject to applicable laws and regulations, restrict or limit the distribution and sale of the LICENSED ARTICLES to certain channels or means of distribution, sale or marketing. This license is granted only for sale in the DISTRIBUTION CHANNELS and for the LICENSED TERRITORY. LICENSEE shall not sell LICENSED ARTICLES outside the LICENSED TERRITORY or sell to others with knowledge they intend to ship, distribute or sell LICENSED ARTICLES outside the LICENSED TERRITORY or for sale outside the DISTRIBUTION CHANNELS, without the prior written approval of the OWNER.

3.12 SALE TO OWNER. LICENSEE agrees to sell to OWNER such quantities of the LICENSED

ARTICLES at the lowest published/invoiced WHOLESALE price and on as good terms as LICENSEE sells similar quantities of the LICENSED ARTICLES to the general trade. Such sales shall be royalty-free and shall be reported to OWNER pursuant to section 3.5.

3.13 LICENSEE EXPENSES. Except as otherwise expressly provided herein, all acts, duties, obligations and responsibilities of LICENSEE under this Agreement shall be at LICENSEE’S sole cost and expense. No costs of any kind, paid or incurred, directly or indirectly, by LICENSEE or any person or entity associated with LICENSEE, any amounts reimbursed by LICENSEE to OWNER, or any other activities of LICENSEE hereunder, shall be recouped, deducted or otherwise charged to OWNER or against any amounts owed to OWNER under this

4. RECORDS, AUDIT AND AUDITOR'S CERTIFICATION

4.1 RECORDS. During the TERM of this Agreement and for at least three (3) years thereafter, LICENSEE shall keep in its possession or under its control accurate records covering all transactions relating to this Agreement. Records shall include, but not be limited to, invoices, correspondence, financial information, inventory records, manufacturing, quality control and approvals. LICENSEE shall consistently use a separate symbol or number to identify all

LICENSED ARTICLES.

4.2 AUDIT. OWNER shall have the right to conduct audits and make copies of all records listed in

Section 4.1 above, and to make a physical inventory count of LICENSED ARTICLES in production and/or storage. If the audit reveals an underpayment of ROYALTY PAYMENTS, LICENSEE agrees to immediately pay OWNER any past due ROYALTY PAYMENTS plus applicable interest. If the audit reveals a royalty underpayment of three percent (3%) or more, or if LICENSED ARTICLES were sold without final approval for the audit period, LICENSEE agrees to reimburse OWNER for all of its out-of-pocket costs and expenses of the audit for (a) the audited period (in addition to past due ROYALTY PAYMENTS plus applicable interest); and (b) a follow-up audit to be conducted at a time of OWNER’s choosing within twenty four (24) months of the conclusion of the original audit. OWNER shall invoice LICENSEE for such audit expenses and LICENSEE shall pay such invoice within thirty (30) days.

Audits may be performed by OWNER's own employees, employees of another U.S. Government agency, and/or its designated independent auditor, all of whom shall hold LICENSEE's audit information in confidence, pursuant to Section 11, below. Audit information shall only be used for purposes of this Agreement, unless used to judicially enforce obligations of LICENSEE.

The exercise by OWNER, in whole or in part, or at any time or times, of the right to inspect or audit records and accounts or of any other right herein granted, or the acceptance by OWNER of any ROYALTY REPORT, or the receipt or deposit by OWNER of any ROYALTY PAYMENT from LICENSEE, shall be without prejudice to any other rights or remedies of OWNER and shall not stop or prevent OWNER from thereafter disputing the accuracy of any such ROYALTY

REPORT.

5. APPROVALS.

5.1 APPROVAL PROCESS. PRIOR TO THE FULL EXECUTION OF THIS LICENSE

AGREEMENT, ANY PRODUCT DEVELOPMENT DONE BY LICENSEE IS AT THE SOLE

RISK OF LICENSEE. UNDER NO CIRCUMSTANCES MAY LICENSEE SELL OR SHIP

PRODUCTS BEARING THE PROPERTY PRIOR TO THE FULL EXECUTION OF THIS

AGREEMENT, EXCEPT BY OWNER’S EXPRESS PRIOR WRITTEN CONSENT. Prior to any sale or distribution, LICENSEE, at its expense, shall submit to OWNER all items including, but not limited to, products, packaging, labeling, point of sale materials, trade show displays, sales materials and advertising (subject to Section 14.3) bearing the PROPERTY and/or CREATIONS, and if such items are in a foreign language, certification that the translations of such items are accurate, for OWNER's advance approval via the BrandComply approvals function for design review and approval, in OWNER's sole and absolute discretion, at all stages listed below.

Concept Rough sketches or layout concepts;

Prototype Prototypes or finished artwork; and Final Pre-production sample.

The following rules shall apply to all stages of the approval process:

1. LICENSEE shall not make any use of, sell or distribute such items as listed in this Section 5.1, prior to OWNER granting final written approval.

2. OWNER shall have twenty (20) business days from OWNER's actual receipt to review and respond in writing to each of LICENSEE's submissions. If OWNER does not respond to such submission within such twenty (20) business day period, such submission shall be deemed disapproved.

3. OWNER, in its sole discretion, reserves the right to reject an item approved at a prior stage if in its physical form it does not meet OWNER's marketing or quality standards, or departs from the approved sample.

4. In the event of any modification or change in quality of the items, whether during the approval process or after final approval has been granted, such items shall be re-submitted to OWNER for approval.

5. LICENSEE shall disclose all sources for any artwork not supplied by OWNER.

6. OWNER shall return prototypes and final artwork upon LICENSEE’s written request and at LICENSEE’s expense provided that LICENSEE supplies photographs of same and submits such written request upon LICENSEE’s submission of the prototypes(s) or final artwork.

7. All submissions from LICENSEE to OWNER become property of OWNER, unless LICENSEE provides OWNER with written notification requesting the return of the items(s) at the time of the LICENSEE’s submission of the item(s) to the OWNER.

8. LICENSEE shall not have any rights against OWNER for damages or other remedies by reason of OWNER's failure or refusal to grant any approval referred to in this Section 5.

9. LICENSEE, at OWNER’S written request, shall supply OWNER with at least four (4) production samples of each LICENSED ARTICLE.

10. LICENSEE agrees to furnish to OWNER its shipper’s account number for OWNER’s use to transmit samples to expedite the approval process.

5.2 RIGHT TO SUSPEND APPROVAL PROCESS. In addition to its other remedies, OWNER reserves the right to suspend the approval process after OWNER has given LICENSEE written notice of breach of this Agreement, until LICENSEE has cured the breach to OWNER’s satisfaction.

5.3 NO WAIVERS. Approvals granted by OWNER under this Section 5 shall extend only to

LICENSEE's use of the PROPERTY, CREATIONS, or OWNER's artwork and designs. The provisions for indemnity under this Agreement and LICENSEE's other obligations shall not be waived by approval of LICENSED ARTICLES by OWNER.

5.4 NO COMPETING PRODUCTS. LICENSEE shall not develop, manufacture, sell, supply, or market products that the OWNER determines, in its sole and exclusive discretion, directly compete with the LICENSED ARTICLES without OWNER’s prior written approval, which shall be within OWNER’s sole and exclusive discretion. Products sold by Licensee bearing marks of the other military branches are not considered competing products.

5.5 OWNER’S ARTWORK. OWNER, in its sole discretion, and to the extent available, shall provide LICENSEE, at LICENSEE's expense, available artwork and designs, which LICENSEE can only use on LICENSED ARTICLES and/or related marketing, promotional and advertising materials in accordance with this Section 5.

6. QUALITY CONTROL

6.1 LICENSEE COMPLIANCE WITH APPLICABLE LAW. All LICENSED ARTICLES shall be manufactured, sold, labeled, packaged, distributed, and advertised in accordance with (i) all applicable laws, regulations, and import and export controls in each applicable country including, without limitation, all child-safety laws and regulations in each legal jurisdiction within the LICENSED TERRITORY in which LICENSEE sells the LICENSED ARTICLES; and (ii) SCHEDULE D attached hereto.

6.2 SECONDS AND DISPOSAL. If, during the manufacture of the LICENSED ARTICLES, any

SECONDS are produced, LICENSEE shall destroy such SECONDS unless OWNER, in its sole discretion, provides LICENSEE with express written instructions on how to otherwise dispose of such SECONDS.

6.3 HIGH QUALITY OF LICENSED ARTICLES. All LICENSED ARTICLES and all packaging and promotional materials shall be of highest quality (which quality shall be at least the same as the highest quality for similar goods within LICENSEE’s industry) consistent with the standing of the PROPERTY and all LICENSED ARTICLES shall be free of defects in design, materials, and workmanship. LICENSEE shall manufacture the LICENSED ARTICLES in accordance with the approved designs, materials, tolerances of manufacture and assembly, testing, and packaging specifications approved by OWNER. All use of the PROPERTY by LICENSEE and the style and appearance of all LICENSED ARTICLES and all packaging and promotional materials shall be subject to OWNER’s approval to enable OWNER to ensure that OWNER’s quality standards are being maintained. LICENSEE may not use the PROPERTY in any manner which would disparage or tarnish or dilute the distinctive quality of the PROPERTY or the reputation and goodwill embodied in the PROPERTY or which would reflect adversely on the PROPERTY or OWNER, or any of OWNER’s products or services. Whether this standard is met shall be in OWNER’s sole and exclusive discretion. LICENSEE shall not use the PROPERTY in any way which is not authorized and approved in advance by OWNER as set forth in this Agreement.

6.4 RIGHT TO INSPECT. LICENSEE agrees to promptly furnish OWNER with the addresses of

LICENSEE’s production facilities for the LICENSED ARTICLES and the names and addresses of each MANUFACTURER, if any, which is producing LICENSED ARTICLES for LICENSEE.

OWNER, or its duly authorized representative, shall have the right, during regular business hours and after 48 hours notice, at its own expense to make inspections of any production facilities where any of the LICENSED ARTICLES, or any components “including but not limited to blanks” thereof are being manufactured to determine whether LICENSEE is adhering to the requirements of this Agreement relating to the nature and quality of the LICENSED ARTICLES, the use of the PROPERTY in connection therewith, and the requirements of SCHEDULE D.

7. LICENSED ARTICLE MARKINGS

7.1 LABELING REQUIREMENTS. LICENSEE shall use and display the PROPERTY with approved SECURITY TAGs and/or LABELS from the USMC’s contracted manufacturer, Brand Comply. SECURITY TAGs and/or LABELS may be ordered from;

www.BrandComply.com

All licensed products will be required to contain the Officially Licensed Marines Product (OLMP) SECURITY TAG OR LABEL as follows;

1. Hard Goods: OLMP Holographic LABEL:

All LICENSEEs producing hard goods items will be required to use the OLMP HOLOGRAM

LABEL.

2. Soft Goods: OLMP Holographic HANG TAG:

All LICENSEEs producing soft goods items, namely apparel, will be required to use the OLMP HOLOGRAM SECURITY TAG (unless the LICENSEE already uses its own custom-printed HANG TAG (that has been approved by the U.S. Marine Corps), in which case the licensee may affix an OLMP HOLOGRAM LABEL to its own SECURITY TAG (rather than purchasing the HOLOGRAM SECURITY TAGs). Products in this category include, but are not limited to the following: Tops (all forms), Bottoms (all forms), Socks, Loungewear, Boxer Shorts, and Protective/Performance Apparel.

3. Exceptions to the Holographic Compliance Guidelines:

Non-Apparel products with WHOLESALE price points of $2.00 or less per unit and products smaller than a shotglass are exempt from using SECURITY TAGs and/or LABELS. Product packaging that contains multiple units of a single item (e.g., container of pencils or box of buttons) can affix a HOLOGRAM LABEL to the retail packaging/display rather than each individual unit. Consumable products are exempt from using the HOLOGRAMs. Headwear LICENSEEs can use the Holographic LABELs rather than the HOLOGRAM HANG TAGs required on Apparel. LABELs are to be affixed to the underside of the cap’s bill. Footwear LICENSEEs can use the security labels rather than the HOLOGRAM SECURITY TAGs required on Apparel. Holographic LABELs are to be affixed to packaging of each item. Non-packaged paper products (ex. Note pads or postcards) are exempt from using SECURITY LABELS.

LICENSEEs may make reasonable written requests to the U.S. Marine Corps for additional exemptions on a case-by-case basis.

4. LICENSEEs are required to print the company name on the product or packaging:

LICENSEEs must affix SECURITY TAGs and/or LABELS to all LICENSED ARTICLES.

LICENSEEs with their own pre-printed HANG TAGs may continue to use their own HANG TAGs, but must also affix the OLMP LABELs to their own HANG TAGS.

5. TM and ®:

LICENSEE shall cause to appear on all LICENSED ARTICLES produced hereunder and on their tags, packaging, advertising and promotional materials such legends, markings and Notices as OWNER may request, which until further notice shall be "TM or ® (if the PROPERTY is a registered mark) United States Marine Corps. Officially Licensed Product of the United States Marine Corps (www.marines.com and 1.800.marines).” Before using or releasing any such material, LICENSEE shall submit to OWNER, for its approval, finished art work for tags, packaging, advertising and promotional materials which shall not be used or released prior to LICENSEE's receipt of OWNER's prior written approval. Any article or other materials submitted and not approved by OWNER within twenty (20) business days after receipt by OWNER shall be deemed to have been disapproved.

8. INTELLECTUAL PROPERTY PROTECTION

8.1 OWNERSHIP OF INTELLECTUAL PROPERTY. Ownership of all CREATIONS shall be in the name of OWNER and owned solely by OWNER. All CREATIONS created by LICENSEE or any of its employees or agents which qualify as a “work-made-for-hire” under applicable copyright laws in the LICENSED TERRITORY are agreed to be “work-made-for-hire” owned by OWNER. In such event, LICENSEE warrants and represents to OWNER that any employees referred to in the preceding sentence are true employees of LICENSEE. If any CREATION is made by a third party for or on behalf of LICENSEE or any of its employees, LICENSEE shall obtain an assignment to OWNER from such third party using SCHEDULE C (Artwork Assignment Agreement), and LICENSEE shall provide true and correct copies of such documentation to OWNER. In the event any CREATION is not deemed a “work-made-for-hire” or if title to any CREATION does not, by operation of law, vest in OWNER, LICENSEE hereby irrevocably and in perpetuity transfers and assigns to OWNER all worldwide right, title and interest in and to any CREATION (including all copyright rights and intellectual property rights thereto). LICENSEE acknowledges that its use of the PROPERTY in the LICENSED TERRITORY inures solely to the benefit of OWNER. In the event that any rights in and to the PROPERTY are deemed to accrue to LICENSEE, LICENSEE does hereby irrevocably and in perpetuity assign all worldwide right, title and interest in and to the same to OWNER and shall, upon request, confirm such assignment in writing. LICENSEE further agrees that it shall not, directly or indirectly through others, file any applications for registration of copyright, trademark, or service mark that in any manner incorporates the PROPERTY or is based on a variation or “play” on the PROPERTY (such as Semper Fido or Marine Mom, or an adaption or variation of any insignia), except with OWNER’s permission. LICENSEE agrees that it shall, at any time both during the TERM and thereafter, execute such documents, as OWNER may deem necessary or desirable for effecting the provisions of this Section 8.1.

8.2 PROTECTION. LICENSEE acknowledges the ownership, validity, unique and widespread celebrity, great value, and goodwill of the PROPERTY and acknowledges that all rights therein (including trademark and copyrights) and goodwill attached thereto belong exclusively to OWNER, that the PROPERTY has secondary meanings in the minds of the public and that all use of the PROPERTY shall inure to the benefit of OWNER. LICENSEE shall not, during the TERM of this Agreement, attack or put in issue the title or any rights of OWNER in and to the PROPERTY, and OWNER’s artwork and designs.

8.3 REGISTRATIONS. LICENSEE shall assist OWNER at OWNER’s expense, to the extent necessary in OWNER’s opinion, in procuring, protecting and defending any of OWNER’s rights in the PROPERTY, in the filing and prosecution of any trademark application, copyright application, or other applications for the PROPERTY, the recording or canceling of this Agreement, and the publication of any notices or the doing of any other act or acts with respect to the PROPERTY, including the prevention of the use thereof by an unauthorized person, firm or corporation, that in the judgment of OWNER may be necessary or desirable. For these purposes, LICENSEE shall supply to OWNER, free of cost to OWNER, such samples, containers, labels, and similar materials as may reasonably be required in connection with any such actions. At its sole discretion and expense, OWNER shall use commercially reasonable efforts to file all trademark applications, register the PROPERTY within the LICENSED TERRITORY with respect to the LICENSED ARTICLES, and, in OWNER’s opinion, in those countries outside the LICENSED TERRITORY where LICENSED ARTICLES may be sourced to the extent such applications have not already been filed.

8.4 USE OF PROPERTY. LICENSEE shall not use the PROPERTY in any business sign, business cards, stationery, or forms, nor as part of its company name, corporate name, trade name, or Internet domain name, Facebook name, or similar type of name. In addition, LICENSEE shall not represent that it in any way has any right, title, or interest in or to any of the PROPERTY or in any registration of the PROPERTY other than as a licensee. On a case-by-case basis, OWNER may allow domain names incorporating the PROPERTY to be registered and used, and permission shall be sought before registration and use. Similarly, in the case of names already in existence, permission shall be sought prior to initiating or continuing use of such names.

OWNER reserves the right to demand the transfer or deletion of any such names by LICENSEE to OWNER. Such names shall be deleted upon the termination of this agreement.

8.5 NOTICE OF INFRINGEMENT. LICENSEE shall notify OWNER promptly in writing of any alleged infringements or imitations by others of the PROPERTY that come to LICENSEE's attention. OWNER shall have the sole right to determine what, if any, actions shall be taken on account of any such infringements or imitations. If OWNER so desires it may prosecute any claims or suits in its own name or require LICENSEE to join as a party thereto, all at OWNER's expense.

LICENSEE shall not institute any suit or take any action on account of any such infringements or imitations. LICENSEE shall not have any rights against OWNER for damages or other remedy by reason of OWNER's decision not to prosecute any alleged infringements or imitations by others of the PROPERTY or OWNER's artwork and designs. LICENSEE assumes the risk that there may be counterfeit and/or infringing articles of manufacture.

8.6 DAMAGES FOR UNAUTHORIZED USE. LICENSEE acknowledges that the PROPERTY or

CREATIONS possesses special, unique, and extraordinary characteristics, which make difficult the assessment of monetary damages, which OWNER would sustain by LICENSEE's unauthorized use. LICENSEE recognizes that OWNER would suffer irreparable injury by such unauthorized use and agrees that injunctive and other equitable relief are appropriate in the event of a breach of this Agreement by LICENSEE. Such remedy shall not be exclusive of any other remedies available to OWNER, nor shall it be deemed an election of remedies by OWNER.

9. WARRANTIES AND INDEMNIFICATION.

9.1. WARRANTIES. LICENSEE hereby warrants and represents to OWNER that:

1. All LICENSED ARTICLES, packaging, labeling, advertising, and sales materials are free from defects, merchantable, fit for their intended use, materially conform to samples which received final approval, comply with all legally applicable treaties, laws, regulations, standards, and guidelines including, but not limited to, health, product safety, and labeling, and that LICENSEE has obtained the necessary approvals and certification(s) throughout the

LICENSED TERRITORY.

2. All CREATIONS and other content provided by LICENSEE are: not a violation, infringement, unauthorized use, or misappropriation of any intellectual property of any third party; not libelous or contrary to law; and to the best of LICENSEE's knowledge not the subject of any litigation or claim.

3. Pursuant to Section 8, it has obtained a written assignment to OWNER of all artwork made by a third party.

4. It, and each MANUFACTURER, DISTRIBUTOR, or other facility involved in the manufacture, distribution, or sale of LICENSED ARTICLES are in full compliance with the provisions of SCHEDULE D.

9.2. INDEMNIFICATION BY LICENSEE. LICENSEE agrees to indemnify and hold harmless

OWNER, its officials, employees, and agents (collectively, "OWNER INDEMNIFIED PARTIES") from any act or omission of LICENSEE which liability arises out of any lawsuit, legal proceeding, action, claim or demand (collectively, “Claim”) based upon:

1. Any alleged defect in the LICENSED ARTICLES or the use or condition thereof;

2. Any alleged violation, infringement, unauthorized use, or misappropriation of any intellectual property of any third parties arising under or in conjunction with the manufacture, sale, and/or use of any LICENSED ARTICLES;

3. Any breach or violation of any warranty, representation, term, or condition of this Agreement by LICENSEE, any MANUFACTURER, or any DISTRIBUTOR; or

4. Any breach or violation of any law or regulation by LICENSEE, any MANUFACTURER, or any DISTRIBUTOR.

This indemnification shall include all damages, interest payments, reasonable attorney's fees, costs, and expenses which may be levied against or incurred by OWNER INDEMNIFIED PARTIES, including costs of collection of all amounts owed to OWNER by LICENSEE and costs of all actions by OWNER against LICENSEE to enforce LICENSEE's compliance with this

This obligation to indemnify and hold harmless OWNER INDEMNIFIED PARTIES shall not apply to any Claim which is solely due to the negligence or wrongful acts of OWNER INDEMNIFIED PARTIES, or any alleged copyright or trademark infringement which is based on a claim that the approved use by LICENSEE of the PROPERTY infringes the copyright or trademark rights of such third parties.

LICENSEE understands that OWNER must be defended in all litigation by the U.S. Department of Justice (“DOJ”) unless DOJ authorizes a different arrangement. Accordingly, LICENSEE shall not undertake to conduct the defense and/or settlement of any Claim except upon approval of OWNER. LICENSEE shall not settle any Claim in respect of which indemnity may be sought hereunder, whether or not any OWNER INDEMNIFIED PARTY is an actual or potential party to such Claim without OWNER's prior written consent, it being expected that such consent would not be withheld with respect to any proposed settlement (i) in which all plaintiffs or claimants affirmatively and unconditionally absolve and release each OWNER INDEMNIFIED PARTY from any responsibility or liability with respect thereto and the subject matter thereof, (ii) which does not impose any actual or potential liability upon any OWNER INDEMNIFIED PARTY, and

(iii) which does not contain or imply a factual admission by or with respect to any OWNER INDEMNIFIED PARTY or any adverse statement or implication with respect to the character, professionalism, due care, loyalty, expertise, or reputation of any OWNER INDEMNIFIED PARTY or any action or inaction by any OWNER INDEMNIFIED PARTY.

Compliance by LICENSEE with the insurance provision of this Agreement shall not relieve LICENSEE from liability under this indemnity provision.

In the event OWNER approves of LICENSEE’S defense of any Claim hereunder, OWNER shall cooperate fully with LICENSEE’s defense of such Claim at LICENSEE’s sole cost and expense.

OWNER shall give notice to the LICENSEE within fifteen (15) business days after learning of such claim, demand or cause of action, but failure to do so in such time period shall only relieve the LICENSEE of its obligations to indemnify to the extent such delay actually prejudices the

LICENSEE.

9.3 WARRANTY BY OWNER. OWNER represents and warrants that it has the rights to grant the licenses granted herein and LICENSEE's use of the PROPERTY (excluding intellectual property to the extent developed or provided by LICENSEE) in accordance with this Agreement, will not infringe upon nor violate the rights of any third party.

10. INSURANCE. Unless a waiver of this provision is indicated on EXHIBIT 7, upon execution of this Agreement, LICENSEE shall have and maintain at its sole cost and expense throughout the TERM of this Agreement, post-termination or expiration Sell-off Period, and for three (3) years thereafter, standard liability insurance from a recognized insurance company acceptable to OWNER. This insurance coverage shall provide general commercial liability insurance for each occurrence of: bodily injury, property damage, personal injury, product liability, contractual liability, advertising injury liability, in the minimum amount(s) of 1,000,000.00 individual and 1,000,000.00 aggregate and shall have no right of subrogation. Such insurance coverage shall name OWNER as additional insured parties against any and all claims, demands, causes of action, or damages, including reasonable attorney's fees and be uploaded to, and kept current in, OWNER’s licensee management portal.

The stipulated limits of coverage above shall not be construed as a limitation of any potential liability of LICENSEE to OWNER or third parties, and failure to request evidence of this insurance shall in no way be construed as a waiver of LICENSEE's obligation to provide the insurance coverage specified.

Such insurance policy shall provide that it may not be canceled or amended in a manner which restricts the existing coverage without at least thirty (30) days prior written notice to OWNER.

Within thirty (30) days after this Agreement is fully executed, (and thereafter at least thirty (30) days prior to the expiration of insurance coverage), LICENSEE shall furnish to OWNER a Certificate of Insurance evidencing the foregoing coverage and specifically listing OWNER as an additional insured party.

11. CONFIDENTIALITY. During the TERM of this Agreement and for a period of three (3) years after this Agreement expires or is terminated for any reason, neither party, without prior written permission from the other party shall disclose, reveal, divulge, use or by whatever means make available, except as required to perform its obligations pursuant to this Agreement, the terms and conditions of this Agreement and information of the other party which was (a) denominated or marked as "confidential" at the time of disclosure; or (b) confirmed in writing as "confidential" within thirty (30) days from an oral disclosure obtained from the other party. Each party hereto may disclose confidential information from the other party to its affiliates subject to all the terms and conditions of this Section.

The obligations of confidentiality shall not apply to information which:

1. Is, or subsequently becomes, available to the public through no fault of the receiving party.

2. The receiving party can show was previously known to it at the time of disclosure.

3. Is subsequently obtained from a third party who has obtained the information through no fault of the receiving party.

4. Is independently developed as evidenced by the written records of the receiving party.

5. Is disclosed to a third party by the disclosing party without a corresponding obligation of confidence.

6. Is required to be disclosed by the receiving party pursuant to a requirement, order or directive of a government agency or by operation of law, including the Freedom of Information Act (5 U.S.C. § 552) subject to prior consultation with the disclosing party's legal counsel.

12. NO RIGHT TO ASSIGN OR TO SUBLICENSE. This Agreement and all rights and duties herein are personal to LICENSEE and are not assignable, in whole or in part, by LICENSEE without OWNER's prior written consent. The rights and duties hereunder may not be mortgaged or otherwise encumbered. Except as provided herein, any grant or attempted grant by LICENSEE of any assignment of part or all of this Agreement, a sublicense, a subcontract or any other act of LICENSEE which in any way attempts to encumber or transfer, or, in fact, encumbers or transfers any of LICENSEE's rights and obligations hereunder, or the sale or attempted sale of a controlling interest in the shares of LICENSEE constitutes a breach of this Agreement. Any change in the control of LICENSEE, either directly or indirectly, without notice to and the prior written consent of OWNER constitutes a breach of this Agreement. Any assignment or other change approved by OWNER shall make this Agreement fully binding upon and enforceable against any successors or assigns.

Notwithstanding the above, LICENSEE shall have the right to subcontract the manufacture of LICENSED ARTICLES to MANUFACTURERS and the distribution of LICENSED ARTICLES to DISTRIBUTORS so long as (a) LICENSEE has given prior written notice of such proposed subcontract arrangement to OWNER, including the name, address and such other information concerning the proposed MANUFACTURERS and/or DISTRIBUTORS as may be requested by OWNER; (b) OWNER has given LICENSEE its prior written approval of each proposed MANUFACTURER and/or DISTRIBUTOR; (c) each such MANUFACTURER and/or DISTRIBUTOR shall be otherwise subject to the inspection and quality control procedures set forth herein; (d) the LICENSED ARTICLES and/or any elements of any LICENSED ARTICLES made by such MANUFACTURER meet the quality standards set forth in this Agreement; and (e) each such MANUFACTURER executes the Manufacturer’s Agreement attached hereto as SCHEDULE E (and a true and correct copy of each such Manufacturer’s Agreement is provided to OWNER within two (2) business days after full-execution of such Manufacturer’s Agreement). Each such MANUFACTURER and/or DISTRIBUTOR agrees to be bound by all of the terms and conditions of this Agreement, and LICENSEE agrees to guarantee all such MANUFACTURER’S and/or DISTRIBUTOR’S full performance of this Agreement.

13. TERMINATION AND SELL-OFF

13.1 TERMINATION. Without prejudice to any other rights, OWNER shall have the right to terminate this Agreement upon written notice to LICENSEE at any time:

1. If LICENSEE shall fail to make any payment (including any payment for artwork or other allowable expenses) due hereunder or to deliver any of the statements of documents herein referred to, and if such default shall continue for a period of five (5) business days after written notice of such default is sent by OWNER via certified mail to LICENSEE.

2. If LICENSEE shall discontinue its business, files, or has filed against it, a petition in bankruptcy, reorganization, or for the adoption of an arrangement under any present or future bankruptcy, reorganization, or similar law (which petition is not dismissed within ninety (90) days after the filing date), makes an assignment for the benefit of its creditors or is adjudicated bankrupt, or a receiver, trustee, liquidator, or sequestrator of all or substantially all of LICENSEE’s property is appointed, or any secured creditor of LICENSEE exercises or purports to exercise any right or remedy as a secured creditor with respect to any collateral consisting, in whole or in part, of any of the LICENSED ARTICLES or any of the results, products, or proceeds thereof or otherwise that would hinder, impair, prevent, or delay LICENSEE’s ability to timely and properly pay, perform, and discharge all of its obligations and liabilities to OWNER hereunder. In any such instance, all rights of LICENSEE hereunder shall automatically terminate forthwith without notice. This Section shall be applicable if LICENSEE or its directors, officers, shareholders, partners, managers, or other persons or entities having the right to do so shall take any action in contemplation of bankruptcy, reorganization, dissolution, or liquidation of LICENSEE or any other action referred to hereinabove. Notwithstanding any other term or provision of this Agreement, LICENSEE shall have no right to cure any of the foregoing defaults.