License Agreement, dated January 1, 2020, between ABG-SI, LLC and GSP Nutrition Inc

(a)  Licensee shall not enter into any license agreement or acquire any rights in or to any photographs or other assets of Licensor from any third party for use during the Term, whether for use in connection with the Licensed Products or otherwise, without Licensor’s prior written approval in Licensor’s sole discretion.

(b)  Licensee shall not, now or at any time hereafter, defame or disparage, or tarnish the reputation or public image of Licensor or the Licensed Property (or any portion thereof), nor shall Licensee place the Licensed Property or Licensor in a negative light, whether in connection with the Licensed Products or otherwise.

(c)  Licensee hereby acknowledges and agrees that Licensee shall not alter, change or edit the content of any of the Licensed Property for or in connection with, the manufacture, offering for sale, sale, or Advertising & Promotion (as hereinafter defined) of the Licensed Products, without Licensor’s prior written approval, in Licensor’s sole discretion.

(a)  Licensee shall be permitted to sell the Licensed Products solely to/through the accounts (collectively, the “Approved Accounts” for each distribution channel (collectively, the “Distribution Channels”) set forth on Schedule A, which is attached hereto and incorporated herein by reference. In the event Licensee wishes to sell the Licensed Products to/through any accounts not included within the Approved Accounts, then Licensee shall submit the same to Licensor for Licensor’s prior written approval in each instance, which approval shall not be unreasonably withheld.

(b)  In the event that Licensor, using Licensor’s good faith, commercially reasonable judgment, believes that an Approved Account previously identified within any particular Distribution Channel, as set forth on Schedule A, no longer falls within that Distribution Channel or is no longer consistent with the brand positioning for the Licensed Property, Licensor shall have the right, in Licensor’s sole discretion, upon notice to Licensee, to: (i) remove such Approved Account from the Distribution Channels completely, or (ii) re-assign such Approved Account to a different Distribution Channel. 

(c) To the extent Licensee sells any Licensed Products through the e-commerce website for an Approved Account (which, for the avoidance of doubt, include both the E-commerce Distribution Channel, if any, and the e-commerce websites for other Distribution Channels, if any) (“E-Commerce Site(s)”): (i) Licensee shall not, nor shall Licensee permit others (including any Approved Account) to, ship Licensed Products outside of the Territory; and (ii) Licensee shall require each Approved Account that sells Licensed Products through an E-Commerce Site to include a statement on such E-Commerce Site stating that Licensed Products can only be shipped to customers located within the Territory.  

(d)  For purposes of this Agreement, Section 1(d)(B) of the Standard Terms shall be amended to remove ‘infomercials’ from the parenthetical contained therein.

(a)   For purposes of this Agreement: (i) “Net Sales” shall be defined as: [***].

(b)  Net Sales accrue in the Calendar Quarter during which the Licensed Products are sold by Licensee, regardless of when or if Licensee collects the revenue from such sale. For purposes of this Agreement, a Licensed Product shall be considered “sold” upon the date when such Licensed Product is invoiced, shipped or paid for, whichever event occurs first.

“Royalty” shall be defined as: [***] percent ([***]%) of Net Sales.

“Common Marketing Fund” (also referred to herein as “CMF”) shall be defined as: [***] percent ([***]%) of Net Sales.

(a)  Timing of payments.

(i) Payment Due on Signing of Agreement. Licensee shall pay to Licensor [***] Dollars ($[***] USD) of the Contract Year 1 (2020) GMR on or before January 10, 2020 (“Signing Payment”). In the event that Licensee fails or refuses to pay any of the foregoing amount to Licensor within such period, Licensor shall be permitted to terminate the Agreement in its entirety, upon written notice to Licensee.

(ii)  Minimums.

(A) Licensee shall pay the balance of the GMR for Contract Year 1 (2020) (i.e., a sum of $[***] USD) to Licensor according to the following schedule: (I) [***] United States Dollars ($[***] USD) on or before February 3, 2020; (II) [***] United States Dollars ($[***] USD) on or before April 1, 2020; (III) [***] United States Dollars ($[***] USD) on or before July 1, 2020; and (IV) [***] United States Dollars ($[***] USD) on or before October 1, 2020.

(B)    Beginning with Contract Year 2 (2021), Licensee shall pay the GMR to Licensor in equal quarterly installments on or before the first (1st) day of each Calendar Quarter.

(iii)  Actuals.

(A)    In the event that the actual earned Royalties in a given Calendar Quarter exceed the previously-paid portion of the GMR attributable to the same Contract Year, Licensee shall pay both the Royalties in excess of the previously paid portion of the GMR, as well as the actual earned CMF for such Calendar Quarter, to Licensor quarterly, within [***] of the end of each Calendar Quarter.

(B)     For the avoidance of doubt, in any given Contract Year, once Licensee has paid to Licensor the total amount of the GMR for such Contract Year (whether by way of quarterly GMR payments, Royalties in excess of the GMR, or both): (I) Licensee shall no longer be required to make quarterly GMR payments to Licensor for that Contract Year, and (II) for the remainder of such Contract Year, Licensee shall pay Licensor based on earned Royalties.

(b) Wire Instructions. Licensee shall be solely responsible for any costs and/or fees associated with making any and all payments to Licensor as required under this Agreement, including, without limitation, wire transfer fees. Licensee shall pay all sums due to Licensor by wire transfer to the following account, unless otherwise instructed by Licensor:

Payee:

Account Number:

ABA Routing Number (for domestic transfers):

Swift Code (for international transfers):

(c)  Currency. All monetary figures included herein are in United States Dollars

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(a)  Licensee hereby agrees to sell Licensed Products to Licensor, Licensor’s affiliated and/or parent companies, and/or Licensor’s other licensees/ partners (collectively, “Licensor Party(ies)”): (i) at the lower of (A) [***] percent ([***]%) off the regular wholesale price of each such Licensed Product, or (B) for each such Licensed Product: (I) if the Licensed Products are shipped from the warehouse: Licensee’s landed duty paid cost (“LDP Cost”), plus [***] percent ([***]%) of LDP Cost, Country of Destination; or (II) if the Licensed Products are picked up at the factory: Licensee’s freight on board cost (“FOB Cost”), plus [***] percent ([***]%) of FOB Cost, and (ii) on such terms as Licensee extends to its best customers, including, without limitation, first priority treatment with respect to order fulfillment and service. For the sake of clarity, Licensee shall pay Royalties and CMF on all sales of Licensed Products to the Licensor Parties.

(b)  Licensee shall sell Licensed Products to Licensor’s employees and other representatives, for their personal use, at the price discounts generally offered to Licensee’s own employees, but in no event at a price greater than Licensee’s regular United States wholesale prices therefor.

(c)  Licensee shall ship, at Licensee’s sole cost, up to [***] United States Dollars ($[***] USD) of licensed Products (measured at Licensee’s LDP Cost) to Licensor in each Contract Year during the Term (“Free Units”). The assortment of Free Units shall be at Licensor’s sole discretion and will not be sold by Licensor.

(d)  In addition to the Free Units, Licensee shall provide the Licensor Parties, at no charge, such number of Licensed Products, and copies of various executions of the Advertising & Promotion, as such Licensor Parties may reasonably request from time to time for fashion shows, special events and presentations, showroom display, promotional photo shoots, photo layouts, retail displays, premium offers, giveaways, sales incentives, charitable giving, donations, gift-with-purchase programs, and for other promotional / public relations efforts (“PR Samples”). In the event that any PR Samples are needed prior to the commencement of production of the same seasonal collection of Licensed Products, Licensee shall provide pre-production samples of Licensed Products. In the event Licensee is unable to supply the Licensor Parties with PR Samples, the Licensor Parties shall have the right to source the same from third parties, and such activity shall not be deemed a breach of exclusivity rights, if any, that may be granted under this Agreement.

(a)  Licensee shall procure and maintain, at its sole cost and expense, and cause its Sub-Contractors to obtain, at their sole cost and expense, during the Term and for a period of three (3) years thereafter (“Insurance Period”), comprehensive general liability insurance (including, without limitation, product liability insurance, inventory insurance, worker’s compensation insurance, operations liability insurance, advertising injury insurance, and intellectual property insurance), to defend and protect the Parties against claims arising out of or in connection with the Business, the Licensed Products and the Advertising & Promotion thereof. Insurance must be obtained from a company reasonably acceptable to Licensor, in an amount not less than [***] in the aggregate, or Licensee’s standard insurance policy limits, whichever is greater.

(b)  Within five (5) business days of the date on which this Agreement is fully executed, Licensee shall submit to Licensor a certificate of insurance naming each of Licensor and Authentic Brands Group, LLC (“ABG”) as additional insureds (“CIO”), which CIO, or a renewal or replacement thereof, shall remain in force at all times during the Insurance Period, and shall require the insurer to provide at least thirty (30) days’ prior written notice to Licensee, and all additional insureds, of any termination, cancellation or modification thereof.

(a)  Within five (5) business days of the date on which this Agreement is fully executed, Licensee shall provide Licensor a complete list of key contacts and personnel within Licensee’s organization that will be responsible for the business to be conducted by Licensee under to this Agreement (“Business”).

(b)  Within thirty (30) days of the date on which this Agreement is fully executed, Licensee shall:

(i)  At Licensee’s sole cost, meet with Licensor’s creative, marketing, and branding team at Licensor’s office in New York City, New York, for a one-day introductory workshop for the Business;

(ii)  After the meeting in subsection (i) above, Licensee will provide Licensor a detailed business and marketing plan for the Business in a form and with all information as requested by Licensor, including, without limitation, sales and distribution projections (“Business Plan”) covering the Initial Term; and

(iii)  At Licensee’s sole cost, schedule and actively participate in a demonstration of Licensor’s reporting and approvals software, RoyaltyZone, a detailed explanation of which can be found at www.royaltyzone.com (“RoyaltyZone”). Throughout the Term, Licensee shall comply with all accounting and approvals obligations set forth in the Agreement via RoyaltyZone.