Amendment to License Agreement

 

This Amendment (this “Amendment”) to that certain License Agreement (the
“Agreement”), dated as of June 20, 2005, by and between Smart Kids Group, Inc.
(“Smart Kids”), a Florida corporation, and Smart Kids International Holdings,
Inc. (“SKIH”) is made effective as of this 25th day of October, 2011 (the
“Amendment Effective Date”).

 

WITNESSETH:

 

WHEREAS, there is a licensing fees of $5,000 per month under the Agreement to
SKIH in exchange for Smart Kids’ use of the trademarks, domain names and
copyrights, concepts and characters and rights to manufacture, distribute, sell,
advertise, and profit from the products relating to the Be Alert Bert® and Full
Motion FitnessTM intellectual property.

 

WHEREAS, the parties desire to amend the Agreement to allow Smart Kids the
option of making payments to SKIH in the form of common stock in lieu of cash.

 

NOW, THEREFORE, in consideration of the foregoing and of the promises,
agreements, representations, warranties, and covenants herein contained, and
intended to continue to be bound to the Agreement, as amended by this Amendment,
the Parties hereby agree as follows:

 

1. Capitalized terms used but not otherwise defined in this Amendment shall have
the meanings ascribed to them in the Agreement.

 

2. Section 3 of the Agreement is hereby amended in its entirety to read as
follows:

 

3 ROYALTY

 

3.1 The Licensor and the Licensee agree that in the event of the Licensee
exercising its option to extend the term of this License Agreement in perpetuity
at the end of the initial twenty five (25) year term granted by this License
Agreement, or immediately upon the Licensor's ownership of the Licensee becoming
equal to or less than (12) percent, the Licensor and the Licensee shall enter
into negotiations to determine a Royalty payable by the Licensee to the
Licensor, pursuant to Article 4.2 herein.

 

3.2 The Licensor and the Licensee agree that the Royalty payable to the Licensor
in the event of the Licensee exercising its option to extend the term of the
License Agreement in perpetuity shall be based upon fair market value but in no
event shall exceed fifteen (15) per cent of the value of gross sales of the
Licensed Products before expenses or other deductions.

 

3.3 In the event that the Licensor and the Licensee are unable to agree on the
Royalty pursuant to Article 4.2 within 120 days of the commencement of
negotiations as specified in Article 4.1, the Licensor and the Licensee agree
that the matter shall be submitted for final and binding arbitration pursuant to
the provisions of Article 11 herein.

 

3.4 The Licensor and the Licensee agree that the royalties may be paid in the
form of common stock in Licensee at the option of Licensee.

 

 

 

3. All other terms and conditions under the Agreement not otherwise amended,
modified or affected by this Amendment shall continue to be in effect and bind
the parties. The Agreement or this Amendment may only be modified with prior
written agreement from both parties.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed on the last date written below, effective as of the Amendment Effective
Date.

 

Smart Kids International Holdings, Inc.

 

 

/s/ Richard Shergold

By: Richard Shergold

 

Title: President

 

Date: October 25, 2011

Smart Kids Group, Inc.

 

 

/s/ Lisa Yakiwchuk

By: Lisa Yakiwchuk

 

Title: Secretary

 

Date: October 25, 2011

 

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