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Exhibit 10.113 LICENSE AGREEMENT THIS LICENSE
AGREEMENT (the "Agreement"), dated December 23, 2008, is
between RB Trademark Holdco, LLC, a Delaware limited liability
company with a place of business at 111 Bauer Drive, Oakland, NJ
07436 ("Licensor") and The Russ Companies, Inc., a Delaware
corporation with a place of business at 111 Cloverleaf Drive,
Winston-Salem, NC 27103 ("Licensee"). Reference is made to the
Purchase Agreement of even date herewith, between Russ Berrie and
Company, Inc., the 100% parent of Licensor ("RB") and the Licensee
(the "Purchase Agreement"). Capitalized terms used but undefined
herein shall have the meanings ascribed to them in the Purchase
Agreement. WHEREAS, Licensor is the owner of all right, title and
interest in and to the Retained IP, and any goodwill associated
therewith, in the territories set forth on Schedule 2.2 of the
Purchase Agreement opposite such Retained IP (the "Territory"); and
WHEREAS, Licensor desires to grant Licensee a license to use the
Retained IP in the Territory in connection with the manufacture,
distribution and sale of gift products; NOW, THEREFORE, the parties
have mutually agreed as follows:
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1.1
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Under the terms and conditions of this License Agreement, and
subject to the exceptions set forth in Section 1.6 below,
Licensor hereby grants to Licensee an exclusive license permitting
Licensee to use the Retained IP in the Territory, and to the extent
Licensor has the right to grant such license, in any other parts of
the world not included within the Territory, in connection with the
manufacture, distribution and sale of gift products during the term
specified in Paragraph 2. Products which are sold by Licensee
pursuant to this License Agreement shall be referred to
collectively herein as "Articles."
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1.2
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Licensee shall not have the right to assign or sublicense any of
the rights granted hereunder other than to a subsidiary of
Licensee, provided, however, that no such assignment shall release
the Licensee from any of its obligations hereunder.
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1.3
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Licensee shall have no right to any other use of the Retained
IP, including, without limitation, in connection with the offering
of any other goods or services.
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1.4
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All Articles shall bear the Retained IP in a manner approved by
Licensor.
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1.5
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(a) Notwithstanding anything herein to the contrary, until
the effective date of the Name Change in accordance with
Section 5.2 of the Purchase Agreement, IP Sub may authorize RB
to use, on a royalty-free basis, the name "Russ Berrie and Company,
Inc." (the "Corporate Name") for all corporate purposes, including,
but not limited to, use on filings with the Securities and Exchange
Commission, correspondence with the New York Stock Exchange,
periodic reports to shareholders, proxy statements, press releases
and other investor relations activities.
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(b) Notwithstanding anything herein to the contrary,
Licensee agrees that, until 12 months after the effective date
of the Name Change, for no consideration, the domain name and
corresponding website address: "www.russberrie.com" (the "Domain
Name") shall direct users to separate internet locations where each
of (x) Licensee’s information pertaining to the Gift
Business and (y) RB’s corporate information can be
found. Licensor and Licensee agree that from the date that Licensor
notifies Licensee that RB has established a new website for its
retained operations, and for one year thereafter, the website
corresponding to the Domain Name will direct users to such new
Licensor website for no consideration.
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2.
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TERM OF LICENSE AND PURCHASE OPTION .
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2.1
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Subject to the provisions for early termination of this
Agreement as set forth in this Agreement, the term of this
Agreement shall commence on the date hereof and continue through
December 23, 2013; provided, however, that to the extent there
shall be no continuing default on the part of Licensee or its
Affiliates to Licensor or its Affiliates under: (i) this
Agreement, (ii) the Stockholders Agreement, including, but not
limited to, payment in full for the purchase of the Put Securities
to the extent Russ Berrie and Company, Inc. exercises its Put
Option (each as defined in and in accordance with the terms of
Section 4.5 of the Stockholders Agreement), (iii) the Seller
Note, or (iv) the Purchase Agreement, the term of this
Agreement shall be extended at the option of the Licensee for an
additional 9 months. Subject to the next sentence, at any time
during the term of this Agreement, Licensee shall have the option
to purchase all of the Retained IP from Licensor for the sum of
$5.0 million, to be paid in cash by wire transfer of
immediately available federal funds to an account specified by
Licensor (the "Purchase Option"). Notwithstanding the foregoing,
the right of Licensee to exercise, and the obligation of the
Licensor to sell the Retained IP to the Licensee under, the
Purchase Option shall be subject to the following conditions, which
are for the sole benefit of and may be asserted or waived by the
Licensor in its discretion: (i) the Seller Note shall have
been paid in full (including all principal and interest with
respect thereto), and (ii) there shall be no continuing
default under this Agreement. Upon receipt of the purchase price
for the Retained IP pursuant to an exercise of the Purchase Option,
Licensor will assign its rights to the Retained IP to Licensee
pursuant to an assignment agreement, in a form mutually agreeable
to Licensor and Licensee (which shall not include any
representations, warranties, indemnities or other continuing
obligations).
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2
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2.2
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Licensor shall have the unilateral right to terminate this
Agreement upon the occurrence of any Event of Default under the
Seller Note. Such termination shall become effective on the date
set forth in a notice of termination provided by Licensor to
Licensee.
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2.3
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If Licensee does not purchase the Retained IP pursuant to the
exercise of the Purchase Option by December 23, 2013 (or
9 months thereafter to the extent the term of this Agreement
bas been extended in accordance with Section 2.1 above), in
accordance with Section 2.1 above, Licensor shall have the
option to require Licensee to purchase all of the Retained IP for
$5.0 million, to be paid in cash by wire transfer of
immediately available federal funds to an account specified by
Licensor.
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3.1
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Licensee shall at all times use the Retained IP in accordance
with the terms of this License Agreement; provided however that if
this License Agreement terminates for any reason, Licensee shall
cease using the Retained IP forthwith in accordance with the
provisions of Paragraph 11 herein. Licensee shall not join any
name or names in connection with the Retained IP so as to form a
new mark. Licensee shall not use any other name or names in
combination with the Retained IP in any advertising, publicity,
labeling, packaging or printed matter of any kind utilized by
Licensee in connection with the Articles, without the consent of
Licensor.
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3.2
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Licensee acknowledges that as between Licensee and the Licensor,
Licensor is the owner of all right, title and interest in and to
the Retained IP in any form or embodiment thereof and is also the
owner of the goodwill attached or which shall become attached to
the Retained IP in connection with the business, services and goods
in relation to which the same has been, is or shall be, given or
used. Sales and services by Licensee shall be deemed to have been
made by Licensor for purposes of trademark registration and all
uses of the Retained IP by Licensee shall inure to the benefit of
Licensor. Licensee shall not, at any time, do or suffer to be done
any act or thing which may adversely affect any rights of the
Licensor in and to the Retained IP or any registrations thereof or
which, directly or indirectly, may reduce the value of the Retained
IP or detract from its reputation.
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3.3
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Licensee shall execute any and all documents reasonably required
to confirm Licensor’s or Licensor’s designee’s
ownership of and rights in and to the Retained IP. Licensor shall
be responsible for all costs and expenses arising out of or in
connection with the filing and prosecution of such application(s)
in Licensor’s or Licensor’s designee’s name to
register the Retained IP for Articles and the maintenance and
renewal of such registrations as may issue.
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3
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3.4
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Licensee shall use the Retained IP strictly in compliance with
the legal requirements obtaining therein and shall use such
markings in connection therewith as may be required by applicable
legal provisions. Licensee shall cause to appear on all Articles
and on all materials on or in connection with which the Retained IP
is used, such legends, markings and notices as may be reasonably
requested by Licensor in order to give appropriate notice of any
trademark, trade name or other rights therein or pertaining
thereto. Notwithstanding the foregoing, Licensee shall not affix
the Retained IP to any Articles if such products are to be sold as
"seconds" or as "irregulars" unless such Articles are properly
labeled and identified as such.
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3.5
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Licensee shall not challenge Licensor’s ownership, or the
validity, of the Retained IP or any application for registration
thereof, or any trademark registration thereof, or any rights of
Licensor therein.
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3.6
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In the event that Licensee learns of any infringement or
imitation of the Retained IP or of any use by any person of a
trademark similar to the Retained IP, it promptly shall notify
Licensor thereof. Licensor thereupon may take such action as it
deems advisable for the protection of its rights in and to the
Retained IP and, if requested to do so by Licensor, Licensee shall
cooperate with whichever person or entity makes such a request in
all respects at Licensor’s sole expense, including without
limitation by being a plaintiff or co-plaintiff. Licensor shall not
be required to take any action if it deems it inadvisable to do so.
In the event that Licensor, after notice, shall elect not to take
action to prevent any alleged infringement, Licensee shall have the
right to do so at its own expense and in the name of Licensor.
Licensor agrees to provide reasonable cooperation to Licensee, at
Licensee’s expense, in any actions taken by Licensee in
accordance with the preceding sentence to prevent any such alleged
infringement.
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3.7
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Any sums recovered by judgment, settlement or otherwise from any
action undertaken by Licensor pursuant to Section 3.6 shall be
first applied to payment and/or reimbursement of expenses
(including reasonable attorneys’ fees and expenses) incurred
by Licensor in connection therewith, and the balance shall be paid
as follows: fifty percent (50%) to Licensor and fifty percent (50%)
to Licensee. Any sums recovered by judgment, settlement or
otherwise from any action undertaken by Licensee pursuant to
Section 3.6 shall be first applied to payment and/or
reimbursement of expenses (including reasonable attorneys’
fees and expenses) incurred by Licensee in connection therewith,
and the balance shall be paid as follows: sixty percent (60%) to
Licensee and forty percent (40%) to Licensor.
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4.1
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Licensor shall have the right to request and receive samples (at
Licensor’s expense) of all models or designs to be used in
connection with manufacturing, distribution, advertising and
selling of Articles pursuant to this License Agreement, for its
approval, such approval not to be unreasonably withheld. Licensor
shall have the right to request and receive samples (at
Licensor’s expense) of all Articles manufactured, sold,
distributed or promoted by Licensee pursuant to this License
Agreement, for its approval, such approval not to be unreasonably
withheld.
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4.2
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Licensee shall be responsible for making all samples as well as
for the production of Articles, and Licensee shall bear all costs
in connection therewith.
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5.1
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Licensee shall maintain the high quality and workmanship of the
Articles sold under the Retained IP, as hitherto and currently
maintained by Affiliates of Licensor.
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5.2
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Licensor has the right to take all action reasonably necessary
to ensure that the Articles sold hereunder are consistent with the
reputation and prestige of the Retained IP as a designation for
high quality products.
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5.3
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From time to time upon the Licensor’s request, Licensee
shall promptly submit to the Licensor production samples (at
Licensor’s expense) of Articles produced hereunder so that
the Licensor may assure itself of the maintenance of the quality
standards set forth herein. All Articles to be sold he
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