tpco_ex105.htm

  
 EXHIBIT 10.5
  
 Execution Version
  
 LICENSE AGREEMENT
  
 THIS LICENSE AGREEMENT (this “Agreement”) is entered into as of December 29, 2022, by and among MOTHER ROOM, LLC, a Delaware limited liability company (“Licensor”) and TPCO US Holdings LLC, a company organized under the laws of Delaware (“Licensee”). Licensor and Licensee are sometimes referred to herein collectively as the “Parties” and each as a “Party”.
  
 RECITALS
  
 A. The Licensor owns intellectual property rights, including registered and unregistered trademarks, in relation to one or more brands with significant reputation and value. The Licensee wishes to secure the rights to design, manufacture, advertise, market, distribute and/or sell merchandise under these trademarks in the Territory (as defined below).
  
 B. The Licensee has experience in relation to the design, manufacture, advertising, marketing, distribution and/or sale of cannabis merchandise.
  
 C. The Licensor is willing to grant to the Licensee a license to design, manufacture, advertise, market, distribute and/or sell licensed merchandise bearing Licensor’s Trademarks (defined below) in the Territory on the terms and conditions set out below.
  
 NOW IT IS HEREBY AGREED AS FOLLOWS:
  
 1. Definitions. The following capitalized terms shall have the meanings specified in this Section 1. Other terms are defined in the text of this Agreement and such terms shall have the meanings respectively assigned to them in such text.
  
 “Advertising Material” means sales, marketing and advertising material related to the Licensed Products, including digital, point-of-sale, promotional, advertising and press material relating to the Licensed Products and/or the Trademarks.
  
 “Affiliate” means (a) any other Person controlling, controlled by or under common control with such particular Person, where “control” means for purposes of this definition the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise, or (b) if such Person is a partnership, any general partner thereof.
  
 “Brand” means the Licensor brand(s) listed in Schedule 1. “Commencement Date” means January 1, 2023.
  
 “Designs” means any and all Packaging Designs and product designs used in connection with the Licensed Products.
  
 “Distribution Channels” means the approved retailers, wholesalers and/or other channels of distribution listed in Schedule 1, together with such other distribution channels approved by the Licensor from time to time in writing in accordance with Section 5.2.
  
  	 
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 “Intellectual Property Rights” means:
  
 (i) any patents, trademarks, service marks, registered designs, applications for any of those rights, trade and business names (including Internet domain names and e- mail address names), logos, unregistered trademarks and service marks, copyright and related rights, performers’ property rights, database rights, rights in designs, trade dress, inventions, know-how and confidential information;
  
 (ii) rights of the same or similar effect or nature as to those in paragraph (i) of this definition; and
  
 (iii) the right to sue for past, existing and future infringement of any of the rights referred to in paragraph (i) or (ii) of this definition, in each case whether existing or future and in any jurisdiction.
  
 “Licensed Product” means each and every Product (defined below), including related packaging and trade dress, used hereunder and that (a) bears a Trademark and (b) is specifically approved in writing by Licensor as a Licensed Product hereunder.
  
 “Manufacturers” means the manufacturing entities appointed by the Licensee to grow, cultivate, manufacture and/or assemble Licensed Products, components of Licensed Products, labels, packaging and/or any other item related to the Licensed Products in accordance with Section 10 and any further manufacturers appointed by such manufacturers, including without limitation factories, suppliers and facilities in and outside the territory.
  
 “Net Sales” means the gross invoice price of all Licensed Products shipped by or on behalf of the Licensee (including but not limited to its Subsidiaries, Affiliates or any sub-licensees), minus (i) any documented actual allowances for damaged or returned Licensed Products, (ii) any documented credits for the return of Licensed Products to Licensee actually accepted or destroyed in the field, (iii) any documented and bona fide trade and quantity discounts or allowances (including margin or markdown allowances) actually taken with respect to the Licensed Products; and (iv) all applicable local, state, and federal taxes (collectively, “Permitted Reductions”). The total Permitted Reductions in any year shall in no event exceed ten (10%) percent of the gross invoice price of all Licensed Products. In computing Net Sales, no costs incurred in manufacturing, selling, advertising or distributing the Licensed Products and no indirect expenses shall be deducted, nor shall there be any deduction for uncollectible accounts. Licensed Products shall be deemed sold when shipped, distributed, billed, sold or paid for, whichever occurs first.
  
 “Packaging Design” means the packaging design(s) for the Products as provided by Licensor from time to time.
  
 “Products” means items or goods described in Schedule 1, as amended from time to time in accordance with this Agreement.
  
 “Product Know-How” means any trade secrets, know-how, recipes, formulae, methods, processes, technical information, directions, instructions, protocols, procedures, techniques, raw material sources, concepts and ideas owned, as of the date of this Agreement or hereafter, by Licensor that are necessary or used for to growing, cultivating, manufacturing, packaging and labeling of the Products provided, however, that unless otherwise agreed in writing by Licensor after the date hereof, any of the foregoing shall only constitute “Product Know-How” if not otherwise known in the cannabis industry other than as a result of an improper disclosure by Licensee.
  
  	 
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 “Term” means the period from the Commencement Date to the eighth (8th) anniversary of the Effective Date.
  
 “Territory” means (i) for the first six months of the Term the states of Maryland and California only, and (ii) for the remainder of the Term, the state of California only.
  
 “Trademarks” means the trademarks listed in any part of Schedule 1, including without limitation any registrations and applications for registration of such trademarks in the Territory, and such other marks notified by the Licensor to the Licensee in writing from time to time, as well as any trade dress associated with such Trademarks.
  
 2. License.
  
 2.1. Generally. During the Term hereof and solely in the Territory on the terms set forth in this Agreement, Licensor hereby grants Licensee, and Licensee accepts from Licensor an exclusive, sublicensable (in accordance with Section 2.2), fully-paid-up, royalty-free license to (i) label and manufacture the Products under the Trademarks, Designs and Product Know-How in the Territory, and (ii) advertise, market, sell and distribute the Products using the Trademarks, Designs and Product Know-How in the Territory.
  
 2.2. Sub-license; Exclusions. The Licensee shall have the right to sub-license the license granted in Section 2.1 to any Affiliate and to any Manufacturer (but only to the extent required to manufacture Products for Licensee) and only in compliance with the provisions of this Agreement including Section 4. Other than as expressly provided by this Agreement, the Licensee shall not be entitled to sub-license any of the rights granted in Section 2.1. Moreover, this license grant specifically excludes all premium, promotional product and entertainment rights or any other rights that are not specifically granted herein or otherwise approved by Licensor in writing which are expressly reserved by the Licensor.
  
 2.3. Reservation of Rights. Except for the specific rights granted to Licensee under this Agreement, all rights in and to the Trademarks are explicitly reserved and retained by Licensor. For the avoidance of doubt, the Licensor retains all rights to exploit the Trademarks outside of the Territory, even if competitive with activities within the Territory.
  
 2.4. Advertising and Marketing in the Territory. The Parties agree and acknowledge that due to the nature of modern communications (i.e., internet, social media, and the like), advertising and marketing activities conducted via modern communications may extend outside of a designated area despite efforts to only target customers within such a territory. Accordingly, the parties agree that Licensee shall not be in breach of the license granted under Section 2.1(ii) for any such incidental or inadvertent activities so long as it only intentionally advertises or markets within the Territory. As an example, Licensee shall be deemed in compliance with the license granted under Section 2.1(ii) for an internet based advertisement if it includes a disclaimer materially similar to the statement “Product for sale only in [Territory].”
  
  	 
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 3. Specifications.
  
 3.1. Generally. Initially, Licensed Product specifications shall be consistent with historical designs and specifications for the products sold under the Brand preceding the date of this Agreement (the “Historical Designs and Specifications”). Thereafter, changes may be requested by Licensor consistent with its own updates to the Brand design and marketing in other jurisdictions and Licensee shall reasonably implement such updates. In such instance, Licensee shall have the right to advertise, market, and sell any then-completed Products that are packaged using the Trademarks. Any other changes requested by Licensee shall be governed by Section 3.2.
  
 3.2. Approvals. If the Licensee wishes to use any Designs for the Licensed Products (including Packaging Designs) other than as provided in Section 3.1 above or any Design it creates, the Licensee shall submit such proposed use or Design to the Licensor or its nominee for its review and written approval. Such submissions shall be made in the form and with all additional material and information as may be required by the Licensor or its nominee from time to time. The Licensee shall make any revisions and carry out any further development work on the Licensed Products as requested by the Licensor or its nominee.
  
 3.3. Pre-Production Samples. Other than for Licensed Products sold using Historical Designs and Specifications, the Licensee shall submit for written approval by the Licensor or its nominee:
  
 (a) a mock-up, prototype or pre-production sample of each proposed Licensed Product (the “Product Specifications”), and (b) a mock-up, prototype or pre-production sample of proposed packaging for each proposed Licensed Product, including specifications relating to label placement, package weight, package material, package structure and other package and graphic elements (“Packaging Specifications”). The Licensee shall not commence manufacture or distribution of any proposed Licensed Product or packaging associated therewith until the Licensee has received written approval of all Product Specifications and Packaging Specifications from the Licensor or its nominee. Any samples provided hereunder will only be required to the extent Licensor agrees to comply with applicable rules, regulations and laws, including guidance from the California Department of Cannabis Control which may include quantity limitations.
  
 3.4. Modifications. The Licensee may submit modifications to any Product Specifications, Packaging Specifications or Licensed Products to the Licensor or its nominee at any time for further approval in accordance with Section 3.2 and/or 3.3. With respect to each proposed Licensed Product and each previously approved Licensed Product, Licensee will comply with all of the material submission procedures set forth in Schedule 4 attached hereto (“the “Submission Procedures”).
  
 3.5. Process for Approval or Rejection. The Licensor or its nominee, in its sole discretion, may grant or refuse approval in relation to any Licensed Product, provided it shall not unreasonably withhold its consent to products consistent with historical uses. If approval is refused, Licensor or its nominee shall explain to Licensee its reasons for such refusal. The Licensee acknowledges that the Licensor or its nominee may refuse approval for all new Licensed Products in the final six (6) months of the Term. If any unapproved Product bearing a Trademark is being sold, Licensor or its nominee may, together with any other remedies
  
  	 
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 available to Licensor or its nominee, require such Product to be immediately withdrawn from the market and may provide notice of breach to Licensee, it being understood and agreed that Licensee shall have thirty (30) days to cure any such breach. If such breach remains uncured thirty (30) days after such notice has been provided, Licensor may terminate this Agreement effectively immediately upon written notice. Licensor shall use reasonable efforts to provide written notice of its approval or disapproval within ten (10) business days for each of the above stages under this Article 3. The failure to provide approval during the specified time frame shall be deemed disapproval. However, Licensor shall remain obligated to explain to Licensee its reasons for such refusal.
  
 4. Manufacture of Licensed Products.
  
 4.1. Standards. Licensee agrees that in order to preserve and maintain Licensor’s reputation and the goodwill inherent in the Trademarks, the quality of the Licensed Products must meet or exceed (a) industry standards, (b) government standards, (c) Licensee’s own standards for similar products marketed by Licensee and (d) the quality standards set forth in Schedule 2 attached hereto (collectively, the “Standards”). For clarity, all Licensed Products shall adhere to approved Packaging Specifications and Product Specifications and shall comply with the Standards set forth in the attached Schedule 2. The manufacture, packaging and storage of the Licensed Products shall be carried out only at premises reasonably approved by the Licensor or its nominee in writing from time to time. The Licensor or its nominee shall be entitled at any time on two business days’ notice to the Licensee to enter, during regular hours of operation, any premises used by the Licensee or its Manufacturers (or upon no notice for unapproved manufacturers) for the manufacture, packaging or storage of the Licensed Products, to inspect such premises, all plant, workforce and machinery used for manufacture, packaging or storage of Licensed Products and all other aspects of the manufacture, packaging and storage of Licensed Products. The Licensee shall, and shall ensure that its Manufacturers shall, make any changes or improvements to its premises, plant, workforce, machinery and other aspects of the manufacture, packaging and storage of Licensed Products as the Licensor or its nominee may reasonably request.
  
 4.2. Code of Conduct. The Licensee agrees to use, and to ensure that its Manufacturers use, good manufacturing practices in manufacturing, packaging and storing the Licensed Products. Without prejudice to the obligations of the Licensee under Section 9, the Licensee shall, and shall ensure that its Manufacturers shall, comply with the Licensor’s Codes of Conduct, standards and/or brand manuals attached or referenced in Schedule 2 in relation to the manufacture, packaging and storage of Licensed Products, as revised by the Licensor from time to time, and with any new Codes of Conduct issued by the Licensor. The Licensor or its nominee shall supply the Licensee with copies of any relevant revised or new Codes of Conduct or brand manuals which will be preserved by the Licensee and its Manufacturers as confidential information which may not be disclosed to any third party or used for any purpose not otherwise authorized under this Agreement.
  
 4.3. Quality Control; Samples. All Licensed Products manufactured by the Licensee and its Manufacturers shall conform in all respects to the Product Specifications, Packaging
  
  	 
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 Specifications, prototype, and mock-up or pre-production sample approved by the Licensor or its nominee pursuant to Section 3.3. The Licensee shall supply a reasonable number of production samples of the first production run for each Licensed Product from each manufacturer to the Licensor or its nominee for the approval of the Licensor or its nominee before commencing distribution of such Licensed Product. Samples will be submitted to the Licensor or its nominee in the form in which the Licensed Product will be supplied via authorized Distribution Channels, complete with all promotional, packaging and tagging materials. Production samples must be approved by the Licensor or its nominee in writing. The Licensor or its nominee will attempt to notify the Licensee within ten (10) working days of receipt with regard to the approval status of such samples. If written approval status is not provided by the Licensor or its nominee, the Licensee shall NOT be permitted to go forward with production of Licensed Product based on such samples. The Licensee shall make any changes or improvements to the Licensed Product required by the Licensor or its nominee and resubmit production samples to the Licensor or its nominee for approval before commencing distribution of the Licensed Product. The Licensee shall provide to the Licensor or its nominee such additional samples of each Licensed Product manufactured by the Licensee as the Licensor or its nominee shall reasonably request. The Licensee shall obtain the prior approval of the Licensor or its nominee for any modification to a production run approved in accordance with this Section 4.3. Any failure by Licensor or its nominee to approve a submission shall be deemed a disapproval of the submission. Any samples provided hereunder will only be required to the extent Licensor agrees to comply with applicable rules, regulations and laws, including guidance from the California Department of Cannabis Control which may include quantity limitations.
  
 4.4. Withdrawals. Subject to the obligations of the Licensee pursuant to Section 9, the Licensee shall, at the Licensee’s own cost, make any modifications to, withdraw or cease production of any Licensed Products at any time if requested in writing by the Licensor or its nominee due to danger to consumer, tarnishment to the brand, infringement claim(s), third-party lawsuit or regulatory action, provided however that instead the Licensee may obliterate or remove the Trademarks, the Designs and any reference to the Licensor and its Affiliates.
  
 4.5. Labelling. Labeling shall be in accordance with Section 12.8. Where required by law or requested by Licensor, Licensee’s name, Affiliate name, trade name (or Licensee’s trademark which Licensee has advised Licensor or its nominee in writing that Licensee is using) and Licensee’s address (at least city and state or province) will appear on permanently affixed labelling on each Licensed Product and, if the Licensed Product is sold to the public in packaging or a container, printed on such packaging or a container so that the public can identify the supplier of the Licensed Product. Additionally, Licensor’s name will appear on the permanently affixed labelling on each Licensed Product along with indication that Licensor is the owner of the Trademark.
  
 5. Distribution of Licensed Products.
  
 5.1. Efforts to Sell. The Licensee shall actively exercise the rights granted to the Licensee under this Agreement and shall actively market, promote, sell, and distribute the Licensed Products
  
  	 
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 in the Territory. The Licensee shall be entitled to describe itself as the Licensor’s “Authorized Licensee” of Licensed Products but shall not disclose any further information about its relationship with the Licensor, nor hold itself out as the Licensor’s agent or as being entitled to bind the Licensor in any way.
  
 5.2. Channels of Distribution. Subject to the provisions of this Agreement, the Licensee shall sell the Licensed Products only via the Distribution Channels listed in the applicable part of Schedule 1, or as notified by the Licensor from time to time in writing.
  
 5.3. Market Demand. The Licensee shall use its best efforts to promote sales of the Licensed Products throughout the Territory and to satisfy market demand for the Licensed Products in the Territory. The Licensee shall maintain such inventory of the Licensed Products as may be necessary to meet its customers’ requirements.
  
 5.4. Advertising Commitment. Each year of the Term, Licensee shall spend at least four percent (4%) of Net Sales from the sale of Licensed Products during each such year on advertising and promotion for the Licensed Products. Licensee shall promptly provide all information reasonably requested by Licensor to certify compliance with this Section 5.4.
  
 5.5. Date of Distribution. The Licensee shall ensure that each Licensed Product shall be available for purchase by the public in commercial quantities in the Distribution Channels in the Territory by the “Market Date” specified in the relevant part of Schedule 1, or if no date is specified, within six (6) months of the Commencement Date, or as otherwise agreed by the Parties. In this clause, “commercial quantities” shall mean sufficient quantities to meet the demands and fulfil the orders placed by customers in the Distribution Channels in the Territory within a reasonable period of time.
  
 5.6. Approval of Packaging and Advertising. The Licensee shall submit to the Licensor or its nominee for prior written approval and before its use of any Product Packaging and all Advertising Material together with details of the proposed use of such material and all certificates of authenticity. In connection therewith, Licensee shall follow the Submission Procedures and use the submission form attached hereto as Schedule 4. The Licensor or its nominee shall endeavor to approve or reject such material within ten (10) working days with an explanation in case of a rejection unless otherwise specified by the Licensor or its nominee. The failure of the Licensor or its nominee to approve or reject such a submission shall be deemed a rejection thereof; however, Licensor or its nominee shall remain obligated to provide a written explanation for any rejection. The Licensor shall be entitled in its sole discretion to prevent the Licensee from using a particular method or media for promoting the Licensed Products if, in the Licensor’s opinion, such promotion might damage the reputation of the Licensor or the relevant Brands.
  
 5.7. Use of Designs and Suppliers. The Licensor shall make available to the Licensee its standard packaging designs for the products for use by Licensee and shall introduce Licensee to Licensor’s suppliers therefor (to the extent that Licensee is not already aware of the same). Licensee shall use such designs and use all reasonable efforts to use such suppliers.
  
  	 
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 5.8. Brand Positioning. The Products shall at all times be positioned in the market as an ultra- premium top tier brand.
  
 6. Compensation and Taxes.
  
 6.1. This is a royalty free license, the consideration for which is stated in a certain Brand Transfer Agreement (this “Agreement”), dated as of even date herewith by and between, on the one hand, TPCO Holding Corp., f/k/a “Subversive Capital Acquisition Corp.”, CMG Partners, Inc., TPCO US Holding LLC, NC3 Systems, Inc, and, on the other hand, SC Branding LLC and Licensor.
  
 6.2. All sales, consumption and other taxes, if any, levied or imposed by law in respect of sums payable under this Agreement shall be borne solely by the Licensee.
  
 7. Accounting Records
  
 7.1. Licensee shall provide to Licensor annual statements of accounting for the Brand including gross sales, price per Licensed Product, and such other information as Licensor may reasonably request to fully understand the financial attributes of the Brand in the Territory.
  
 7.2. The Licensee shall keep complete, accurate and detailed books and records in relation to all of its obligations hereunder including manufacturing inventory and sales records involving the Licensed Products for the Term and for five (5) years thereafter.
  
 8. Advertising, Websites, Social Media.
  
 8.1. Advertising Materials. All Advertising Materials must be approved by Licensor prior to their use in accordance with Section 5.5.
  
 8.2. Website. During the Term, Licensor shall permit the Licensee and assist the Licensee if necessary to post information on Licensor’s brand website relating to the Licensed Products, the specifics of which shall be subject to Licensor’s approval not to be unreasonably withheld or delayed. For the avoidance of doubt such uses will be informational only and will not provide any purchase or other functionality.
  
 8.3. Social Media. During the Term, the Licensee will consider in good faith requests for posts to Licensor’s social media pages for the Brand with specific information pertaining to the Licensed Products.
  
 9. Safety and Compliance with Laws.
  
 9.1. Safety; Recalls. The Licensee warrants and undertakes to the Licensor and its Affiliates that:
  
 9.1.1. each Licensed Product will be safe and free from defect; and
  
 9.1.2. the Licensee shall comply, and shall ensure that its Manufacturers comply, with all applicable laws and regulations, industry regulations, codes of practice and local
  
  	 
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 industry practice including without limitation in relation to the design, manufacture, storage, delivery, sale, packaging, labelling, use and safety of the Licensed Products and the design and use of all display, sales, promotional and press material relating to the Licensed Products; and
  
 9.1.3. the Licensee shall (a) promptly notify Licensor of any claim, lawsuit, report or allegation of adverse effects related to any Licensed Product, including, without limitation, any claim, lawsuit, report or allegation of adverse effects which could give rise to a reporting obligation under federal and/or state laws, (b) provide Licensor with copies of any reports or other responses to information requests that Licensee files with the Environmental Protection Agency (“EPA”), the Consumer Product Safety Commission (“CPSC”) or any other governmental agency related to any Licensed Product, in each case within five (5) business days after sending any such reports or submittals to the EPA, CPSC or other governmental agency, and (c) give Licensor prompt notice of all product liability claims involving any Licensed Product.
  
 9.1.4. Licensee shall have the right, subject to prior consultation with Licensor, to take any action it reasonably determines to be appropriate with respect to a Licensed Product, including without limitation, recalling, retrieving or withdrawing a Licensed Product; provided, however, that unless Licensee has been advised by independent outside counsel reasonably acceptable to Licensor that such action is required by applicable law, Licensor shall have the right to approve in advance any proposed Licensed Product recall, retrieval or withdrawal, public announcement or other response prior to Licensee taking any such action if Licensor believes in good faith that such action would have a material adverse effect on the Trademarks or Licensor’s business. If Licensee is deciding whether to withdraw, retrieve or recall a Licensed Product, then Licensee shall (A) promptly provide Licensor with details of the events that gave or are giving rise to the consideration of a possible withdrawal, retrieval or recall, (B) keep Licensor promptly advised of decisions concerning the withdrawal, retrieval or recall, and (C) provide a copy for Licensor’s consent of any draft announcements concerning the proposed recall, retrieval or withdrawal of the affected Licensed Product before making such announcement and, if approved, give Licensor the opportunity to collaborate with Licensee on such announcement. Licensee shall reimburse Licensor for its costs incurred in connection with any withdrawal, retrieval or recall conducted pursuant to this Section.
  
 9.1.5. Notwithstanding Sections 9.1.3 and 9.1.4 above, if Licensee elects not to recall, retrieve or withdraw the Licensed Product or to notify any governmental or regulatory authority, and Licensor continues to have a reasonable and good faith belief that (A) the misbranding, adulteration, or other health or safety risk associated with the Licensed Product is reasonably likely to give rise to significant personal injury or property damage, (B) the Licensed Product contains a material defect or otherwise constitutes a defective product which is reasonably likely to give rise to significant personal injury or property damage, or (C) the manufacturing, promoting, using, selling or distributing of the Licensed Product constitutes a material violation of applicable laws or regulations, then Licensor may demand by notice that Licensee conduct a recall, retrieval or withdrawal of such Licensed Product and/or notify the appropriate governmental or regulatory authorities. In the event of such a remedial demand by Licensor, Licensee shall
  
  	 
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 promptly take appropriate steps to affect a recall, retrieval or withdrawal of such Licensed Product in the manner contemplated by the remedial demand. The costs and expenses of any such recall, retrieval or withdrawal of a Licensed Product shall be paid by Licensee. For clarity, Licensor shall have the right to demand by notice that Licensee conduct a recall, retrieval or withdrawal of the Licensed Product if Licensor has a reasonable and good faith belief that the continuance of the sale or distribution of the Licensed Product would have a material adverse effect on Licensor’s Trademark or business; however, if such demand is not due to the reasons set forth in clauses (A), (B) or (C) of this Section 9.1.5, then Licensor shall be responsible for the costs and expenses of any such recall, retrieval or withdrawal of Licensed Product.
  
 9.1.6. Licensee agrees that all consumer complaints shall be handled by, and directed to, Licensee; provided, however, that Licensee shall immediately notify Licensor of all consumer complaints regarding any Licensed Product or Advertising Materials which may affect the reputation, products, marks or business of Licensor. Licensor and Licensee shall confer on how to handle or respond to such complaints; provided, however, that Licensor shall have the right to respond to all such material consumer complaints or inquiries concerning any Licensed Product or Advertising Materials. Licensee agrees to provide a toll-free number for consumer inquiries and complaints. Licensee agrees to handle all complaints in a timely and professional manner and use its best efforts to satisfy customers. Licensee agrees to log all consumer complaints, along with contact information, into a database for tracking purposes. Licensee shall submit a summarized report of complaints monthly. Additionally, from time to time, Licensor may request a report of complaints received and Licensee must provide the report within ten (10) working days of the request.
  
 9.2. Compliance with Laws; Working Conditions. The Licensee warrants and undertakes to the Licensor and its Affiliates that its Manufacturers shall comply with all applicable laws, including those relating to child labor, forced labor, employee rights and discrimination, health and safety at the premises of the Licensee and its Manufacturers, product safety and product liability, consumer protection, data protection and the environment. The Licensor shall be entitled to inspect the premises of the Licensee and its Manufacturers at any time on reasonable notice in order to monitor compliance by the Licensee with this Agreement and this Section 9 in particular.
  
 9.3. Notices of Violation. Without prejudice to the rights and remedies of the Licensor in respect thereof, the Licensee shall notify the Licensor immediately if the Licensee becomes aware of any breach or possible breach of Sections 9.1 and/or 9.2. The Licensee will, at the request of the Licensor, cease production of and withdraw all applicable Licensed Products at the Licensee’s cost in accordance with Section 4.4.
  
 9.4. No Implication by Approvals. Any approval given by the Licensor of, or modifications proposed by the Licensor to, any samples of Products, certificates of authenticity or any packaging, sales, promotional, advertising or other material shall not imply that such samples or material comply with any applicable law or regulation nor that such samples or material do
  
  	 
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 not infringe the rights of any person nor derogate from the obligations of the Licensee under this Section 9.
  
 9.5. Changes in Law. The Licensee shall notify the Licensor of any material changes in the applicable laws and regulations in the United States relating to the operation, marketing and sale of the Licensed Products and shall forthwith notify the Licensor if it becomes aware that the Licensor, the Licensee or the Manufacturers are or may be in material breach of any of those laws or regulations.
  
 10. Manufacturers.
  
 10.1. Manufacturer Requirements. The Licensee shall be entitled to sub-contract the right to grow, cultivate, manufacture and/or assemble Licensed Products, components of Licensed Products, labels, packaging and other items related to the Licensed Products for supply back to the Licensee and to authorize its Manufacturers to appoint their own Manufacturers, provided that prior to appointing any Manufacturer:
  
 10.1.1. the Licensee provides the Licensor with all information and copy documents reasonably requested by the Licensor in relation to each Manufacturer;
  
 10.1.2. the Licensee submits the Registration of Manufacturer Agreement attached hereto as Schedule 3 which shall be promptly updated should they cease doing business with a particular Manufacturer or begin doing business with a new Manufacturer;
  
 10.1.3. the Manufacturer signs the Licensor’s Codes of Conduct set forth in Schedule 5, and enters into any other written agreements as required by the Licensor and provides Licensor with a copy of such documents; and
  
 10.1.4. the Licensee complies with all other reasonable requests made by the Licensor in relation to the proposed Manufacturer.
  
 10.2. Commitments to Abide by Agreement. The Licensee shall ensure that each Manufacturer complies with all relevant provisions of this Agreement including, without limitation, Sections 4, 9, 10, 11 and 12 and, without prejudice to any other rights or remedies of the Licensor, the Licensee shall, at the Licensor’s request, terminate or procure the termination of the contract of any Manufacturer which fails to comply with such provisions. The Licensee shall provide the Licensor with a Registration of Manufacturer Agreement for all Manufacturers. The Licensee shall ensure that any Manufacturer whose contract has expired or terminated shall cease manufacture of Licensed Products forthwith. The Licensee shall ensure that any Manufacturer whose contract has expired or terminated shall return to Licensor all molds and the like used in the manufacture of such Licensed Products except to the extent their represent the Intellectual Property Rights of Licensee. The Licensee shall notify the Licensor if any Manufacturer ceases to manufacture Licensed Products for any reason.
  
 10.3. No Agency. The Licensee will act as principal and not as agent for the Licensor in all contracts with Manufacturer. The Licensee shall ensure that each Manufacturer complies with the
  
  	 
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 provisions of its Agreement with the Licensee. The Licensee shall be fully responsible for the acts and omissions of its Manufacturer as if they were the acts and omissions of the Licensee.
  
 11. Distribution.
  
 11.1. Distributor Requirements. Licensee shall be entitled to use third party distributions (“Distributors”) to distribute, advertise and sell Licensed Products in the Territory provided that prior to appointing any Distributor:
  
 11.1.1. Licensee provides the Licensor with all information and copies of documents reasonably requested by the Licensor in relation to the Distributor;
  
 11.1.2. the Distributor signs the Licensor’s Codes of Conduct and enters into any other written agreements as required by the Licensor and provides Licensor with a copy of such documents; and
  
 11.1.3. Licensee complies with all other reasonable requests made by the Licensor in relation to the proposed Distributor.
  
 11.2. Distributor Compliance. Licensee shall ensure that Distributor complies with all relevant provisions of this Agreement and, without prejudice to any other rights or remedies of the Licensor, Licensee shall, at the Licensor’s request, terminate or procure the termination of the contract of any Distributor which fails to comply with such provisions. During the Term of this Agreement, Licensee guarantees that no Distributor will distribute any products that are confusingly similar to the Licensed Products. Licensee shall ensure that any Distributor whose contract has expired or terminated shall cease distribution of Licensed Products forthwith and return to Licensor all Intellectual Property Rights relating to such Licensed Products and all confidential information of Licensor and Licensed Product information, advertising, sales and packaging for such Licensed Products. Licensee shall notify the Licensor if any Distributor ceases to distribute Licensed Products for any reason.
  
 11.3. No Agency. Licensee will act as principal and not as agent for the Licensor in all contracts with Distributor. Licensee shall ensure that each Distributor complies with the provisions of its Agreement with Licensee. Licensee shall be fully responsible for the acts and omissions of its Distributor as if they were the acts and omissions of Licensee. Licensee shall provide the Licensor with copies of distribution agreements for all Distributors. Licensee shall ensure that any Distributor whose contract has expired or terminated shall cease distribution of Licensed Products forthwith and return destroy or return to Licensee all advertising materials relating to the Licensed Products. Licensee shall notify the Licensor if any Distributor ceases to distribute Licensed Products for any reason.
  
 12. Intellectual Property Rights.
  
 12.1. Ownership. All Intellectual Property Rights in the Product Know-How, Designs and the Trademarks (and related Brands) and otherwise subsisting in or relating to the Licensed Products are exclusively owned by and reserved to the Licensor and its Affiliates. The Licensee shall have
  
  	 
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 no right or interest in such Intellectual Property Rights except as expressly provided by this Agreement, and all rights not expressly granted to the Licensee are reserved to the Licensor and/or its Affiliates. The Licensee shall not, and shall ensure that its Manufacturer and Distributors shall not, use the Trademarks or the Designs (or any of Licensor’s other Intellectual Property Rights) in any manner likely to suggest that the Licensee is the owner thereof and the Licensee shall not, and shall ensure that its Manufacturer shall not, make any applications to register the Trademarks or the Designs without the prior written approval of the Licensor, which may be refused in Licensor’s sole discretion for any reason. Licensee shall neither use nor adopt any trademark, trade name, trade dress design, logo, or symbol which is similar to or likely to be confused with any of the Trademarks Designs or any Licensed Product trade dress. All goodwill arising as a result of the use of the Trademarks by the Licensee and its Manufacturer and Distributors pursuant to this Agreement shall accrue to the benefit of the Licensor and its Affiliates. The Licensee shall use reasonable efforts to preserve and maintain the goodwill and reputation attached to the Trademarks.
  
 12.2.    Assignment. If, notwithstanding Section 12.1, any Intellectual Property Rights subsisting in or relating to the Licensed Products does vest in the Licensee, the Licensee hereby unconditionally and irrevocably assigns to the Licensor,(and Licensee shall ensure its Authorized Manufacturers and Authorized Distributors shall assign to Licensor by including related provisions it its agreements with each such entity), all right, title and interest in and to all such Intellectual Property Rights. To the extent that this Section 12.2 is not effective to assign such rights, the Licensee shall hold such rights in trust for the Licensor and Licensee hereby irrevocably grants to Licensor an exclusive license to all such Intellectual Property Rights to use and otherwise exploit without restriction. The Licensee and its employees and their employees, shall execute (and Licensee shall ensure its Authorized Manufacturers and Authorized Distributors shall execute, by including related provisions it its agreements with each such entity), all documents and do all things reasonably requested by the Licensor to give effect to this Section 12.2. All uses of the Trademarks by Licensee and its Manufacturers and Distributors shall inure to the benefit of Licensor. Licensor shall own all Intellectual Property Rights created by such uses. The parties understand and agree that all work performed by the Licensee and each Manufacturer and Distributor under this Agreement (or under any separate agreement between Licensee and each such Authorized Manufacturer and each such Authorized Distributor) in connection with the Licensed Products, the Trademarks and on all copyrightable works (“Copyrights”) relating to the Trademarks or Licensed Products, including without limitation, Advertising Material, trade dress, Packaging and packaging graphics, and web site content and social media content, shall be deemed a “work made for hire” (within the meaning of 17 U.S.C. Section 101 of the US Copyright Act) and, as such, shall be owned by and for the benefit of the Licensor. In the event that it should be determined that any such contributions are not a “work made for hire”, or to the extent Licensee acquires any rights to any of the Copyrights or Trademarks, the Licensee will and does hereby assign to the Licensor (and Licensee shall ensure its Manufacturers and Distributors shall assign to Licensor by including related provisions it its agreements with each such entity), all right, title and interest, on a worldwide basis, in and to such Copyright, Trademarks, “new works”, “derivative works” and/or joint works” heretofore or hereafter created using any of the Trademarks or Copyrights in media and in all forms including, but not limited
  
  	 
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 to, all copyright, trademark and proprietary rights relating thereto and will execute all documents reasonably required to perfect such rights. In the event that any personnel are not employees of the Licensor or the Manufacturer or Distributor, the Licensee agrees to provide the Licensor with an agreement that between Licensee and such personnel that includes an assignment of rights reasonably satisfactory to the Licensor whereby such personnel assign all rights in the Intellectual Property Rights to the Licensor prior to such personnel beginning work hereunder or beginning any work that involves or is related to any of the Licensed Trademarks or Licensed Products. The Licensee hereby agrees to perform such acts as the Licensor may request, at the Licensor’s reasonable expense (such expense to be actual and reasonably incurred by the Licensee), in order to protect or confirm the Licensor’s or its Affiliate’s interests in any of the Intellectual Property Rights or other related rights as provided for under this Agreement.
  
 12.3. Use of Property. In using the Intellectual Property Rights in the Product Know-How, Designs and the Trademarks (and related Brands) and in the Licensed Product, the Licensee shall, and shall ensure that its Manufacturers and Distributors shall, abide by all instructions and guidelines issued by the Licensor from time to time. No other company names, logos, trademarks or brands shall be used on or in relation to the Licensed Products or any promotional, sales or advertising material for the Licensed Products except with the Licensor’s prior express, written approval. The Licensed Products shall not be bundled with, or conditioned upon, the sale or disposition of any other products or services.
  
 12.4. Labeling. The Licensee shall ensure that wording accompanies each use of the Trademarks and the Designs, indicating that such Trademark or Design is a Trademark or Design of the Licensor or its Affiliates or that copyright in the Designs vests in the Licensor or its Affiliates, as applicable, and that such Trademark or Design is used under license from the Licensor, in accordance with Schedule 1 and Schedule 3, or as otherwise directed by the Licensor. The Licensee shall comply with intellectual property marking requirements in all states of the United States and of the United States itself and all countries and jurisdictions in the Territory in which it markets and sells Licensed Products as well as all other reasonable requests of the Licensor concerning the protection of its Intellectual Property Rights.
  
 12.5. Notice of Unauthorized Use. The Licensee shall immediately advise the Licensor if it becomes aware of any unauthorized use of the Trademarks or the Designs or any other Intellectual Property Rights of Licensor, or of any confusingly similar mark or design by any person or of any claim that the Licensed Products infringe the Intellectual Property Rights, moral or other rights of any third party. The Licensor will take such action in relation to any such unauthorized use or claim, as the Licensor shall determine at its sole discretion. The Licensor shall have absolute control over any such actions or proceedings. The Licensee shall take no action in relation to such unauthorized use or claim without the prior written approval of the Licensor. The Licensee shall co-operate fully with all reasonable requests made by the Licensor in relation to any action taken by the Licensor over such unauthorized use or claim (including without limitation by joining in any such proceedings as co-plaintiff). The Licensor shall be entitled to retain any monetary recovery obtained from any infringer of any unauthorized use of the Trademarks or other Intellectual Property Rights of Licensor.
  
  	 
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 12.6. Assurances. The Licensee shall not, and shall ensure that its Manufacturers and Distributors shall not, manufacture or distribute :
  
 12.6.1.1. any items bearing designs, names or logos which are substantially or confusingly similar to the Trademarks and/or the Designs; or
  
 12.6.1.2. any items incorporating any of the Intellectual Property Rights of the Licensor or its Affiliates other than as expressly authorized pursuant to this Agreement.
  
 12.7. Copyright Notices. As a condition to the grant of rights hereunder, each Licensed Product and any other matter containing Licensor’s Intellectual Property Rights shall bear a properly located permanently affixed copyright notice in Licensor’s name, or such other notice as Licensor specifies to Licensee in writing. Licensee will comply with such instructions as to form, location and content of the notice as Licensor may give from time to time. If through inadvertence or otherwise, a copyright notice on any Licensed Product or other such matter should appear in Licensee’s name or the name of a third party, Licensee hereby irrevocably assigns to Licensor the copyright represented by any such copyright notice in Licensee’s name and, upon request, cause the execution and delivery to Licensor of whatever documents are necessary to convey to Licensor that copyright represented by any such copyright notice (and Licensee shall ensure that its Manufacturers and Distributors shall assign such rights by including related provisions it its agreements with each such entity). If, by inadvertence, a proper copyright notice is omitted from any Licensed Product, Licensee agrees at Licensee’s expense to use all reasonable efforts to correct the omission on all such Licensed Products.
  
 12.8. No Co-Branding or Bundling. To preserve Licensor’s identification with Licensor’s Licensed Products, Licensee agrees to associate the name of Licensee and/or one of its Affiliate, with the Licensed Products or the Trademarks Advertising Materials only in a manner that will avoid confusion between Licensee and Licensor by the public. If Licensee wishes to use Licensee’s trademark on the Licensed Products or their Packaging, on Advertising Materials, or otherwise in connection with the Licensed Products, Licensee agrees to obtain Licensor’s prior written permission. The Licensor agrees that the Licensed Products may be sold alongside other products on websites and in stores, however Advertising Materials (including those to satisfy the advertising commitment in Section 5.4) shall not feature products other than the Licensed Products.
  
 12.9. Right to Register the Brand IP. Licensor shall have the right, in its sole discretion, to (a) file trademark, trade dress, copyright, logos, graphical designs and other applications in the Territory or elsewhere related to the use or proposed use by Licensee or any Manufacturer or Distributor of any of the Trademarks and (b) record this Agreement (or a redacted form thereof) in the US Patent & Trademark Office and any other state or foreign governmental office of applicable governance. Such filings and/or recordation of this Agreement shall be made in the name of Licensor or in the name of any third party selected by Licensor. As and to the extent requested by Licensor, Licensee shall assist Licensor at Licensor’s expense (except as provided otherwise in this Section) in connection with Licensor’s efforts to procure, protect and defend any of its rights in the Trademarks, file and prosecute any trademark application, copyright application, or other applications for the Trademarks, record or cancel the recordation of this Agreement, and publish any notices or perform any other act with respect to the Trademarks, including, without
  
  	 
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 limitation, prevention against any unauthorized use thereof that Licensor deems necessary or desirable in its sole discretion. For the purposes described in this Section 12.9, Licensee shall supply to Licensor, free of cost to Licensor, such samples, containers, labels and similar materials as may be reasonably required in connection with any such actions. Licensee shall not file any applications for the Trademarks or for trademarks Licensor deems confusingly similar thereto, without the express written consent of Licensor.
  
 13. Confidential Information.
  
 13.1. Confidential Information. Subject to the provisions of this Section 13, the Parties shall ensure that their employees, agents and Affiliates (and in the case of Licensee) its Manufacturers and Distributors shall, keep confidential and not disclose to any person any information whether written or oral and in whatever medium which comes into its possession and relates to the business, products, financial and management affairs, customers, employees or authorized agents, plans, proposals, strategies or trade secrets of the other Party or any of their agents and Affiliates and any other information of a confidential nature of either Party or any or their employees, agents and Affiliates (together the “the Confidential Information”).
  
 13.2. Non-Disclosure. The Parties shall not, and shall ensure that their respective employees, agents and Affiliates shall not, use, copy or disclose any of the Confidential Information except as reasonably needed in the course of exercising the rights granted hereunder.
  
 13.3. Exceptions. The Parties shall only disclose the Confidential Information to those of its employees, agents and Affiliates and Manufacturers and Distributors to the extent that they need to know the same in order to exercise the rights granted hereunder and provided that those employees, agents and Affiliates and Manufacturers and Distributors are bound by written obligations of confidentiality and non-use in favor of the respective Party and such obligations apply to the Confidential Information disclosed to them. Furthermore, the provisions of Sections 13.1 and 13.2 3 shall not apply to any of the Parties’ information which:
  
 13.3.1. is or becomes generally available to the public other than as a result of any act or omission of the receiving Party;
  
 13.3.2. after the date of this Agreement comes into the possession of the receiving Party and is received from a person lawfully in possession of the information and owing no obligation of confidentiality to the disclosing Party or any of its Affiliates in respect of the information; or
  
 13.3.3. is required to be disclosed by the receiving Party by any court or governmental or administrative authority competent to require disclosure.
  
 14. Indemnity and Limitation of Liability.
  
 14.1. Licensee Indemnity. The Licensee shall defend, indemnify and hold harmless the Licensor, Licensor’s Affiliates, its officers, directors, agents and employees from and against all third party claims giving rise to damages, costs, claims, losses and expenses (including reasonable
  
  	 
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 legal expenses) incurred by the Licensor, its Affiliates, officers, directors, agents and employees arising out of or in connection with:
  
 14.1.1. the manufacture, sale, or marketing of the Licensed Products including any claims founded on product liability or for any resulting product recall or any defect in the Licensed Products, whether such defect is latent or obvious and whether or not such defect was present in any sample approved by the Licensor;
  
 14.1.2. any claim that the manufacture, sale, possession or use of any of the Licensed Products infringes the Intellectual Property Rights, moral or other rights of any third party (except to the extent that such claim falls within Section 14.3 below) only to the extent such alleged infringing Design derives from Licensee;
  
 14.1.3. Any information provided by its under Section 8.2 or 8.3 for posting on Licensor’s websites or social media pages; or
  
 14.1.4. any actions or inactions taken by Licensee or its Manufacturers or Distributors during the Term of this Agreement, including any breach of the representation and warranties contained in this Agreement.
  
 14.2. Notice and Process. The Licensee shall immediately notify the Licensor of any such claim and shall keep the Licensor informed of the action taken by the Licensee in connection with the indemnification provision of Section 14.1. Any settlement of a claim must be approved in writing by the Licensor prior to the execution of any settlement agreement, where such approval shall not be unreasonable withheld or delayed so long as (i) such settlement is a cash settlement fully paid by Licensee and (ii) requires no admission of liability or restriction or action by Licensor. Licensor shall have the right to defend any claim for which indemnification is provided under Section 14.1 above and be indemnified by Licensee as provided in such Section. Licensee shall cooperate with Licensor in connection with any such claim defended by Licensor, as and to the extent requested by Licensor. Alternatively, if Licensor elects, in its sole discretion, to permit Licensee to defend any claim for which indemnification is provided under Section 14.1 above, then (i) Licensee agrees promptly to notify and keep Licensor fully advised with respect to such claim and the progress of any suit relating thereto; (ii) Licensor shall have right to approve any attorney selected by Licensee to defend such claim, which approval shall not be unreasonably withheld or delayed, and (iii) Licensee shall not settle such claim or suit without the prior written approval of Licensor, which shall not be unreasonably withheld; provided, however, that if at any time Licensee fails to actively and in good faith defend such claim, then Licensor may, upon written notice to Licensee, assume control of such defense (and in connection therewith be indemnified by Licensee as provided in Section 14.1 above).
  
 14.3. Licensee Indemnity. Provided that the Licensee has complied with Section 14.1 above and the other provisions of this Agreement, the Licensor shall defend, indemnify and hold harmless the Licensee from and against damages, costs, claims, losses and expenses (including reasonable legal expenses) incurred by the Licensee as a result of any claim that the Licensee's approved use of the Trademarks or the Designs or Intellectual Property Rights owned by Licensor infringe the Intellectual Property Rights, moral or other rights of any third party in the Territory.
  
  	 
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 This Section 14.3 shall not apply in respect of any Trademarks or Design uses which have been modified or altered in any material way by the Licensee, regardless of any approval given by the Licensor to such modifications or alterations. Licensee shall not, in any case, be entitled to recover for lost profits or consequential damages.
  
 15. Warranties.
  
 15.1. By Licensee. The Licensee represents and warrants that it has and will have the right to manufacture, sell and distribute the Licensed Products; that it will use its commercially best efforts to promote, market, sell and distribute the Licensed Products; and that it will take no action that will damage Licensor or the Trademarks or any other Intellectual Property Rights of the Licensor or any of its Affiliates; and that it shall cause all Manufacturers and Distributors to enter into agreements that contain applicable provisions required in Sections 4 and 5 of this Agreement.
  
 15.2. By the Parties. Each Party represents, warrants and covenants that neither its execution of this Agreement nor the performance of its obligations under this Agreement:
  
 15.2.1. violates any provision of law or any judgment, writ, injunction, order or decree or any court or governmental authority having jurisdiction over it;
  
 15.2.2. results in or constitutes a material breach or material default under any contract, commitment or restriction to which it is bound; or
  
 15.2.3. requires any consent, vote, or approval which has not been given or taken, or at the time of the transaction involved shall not have been given or taken. Each Party represents, warrants and covenants that it has the full right and authority to enter into this Agreement, and it has and shall continue to have through the Term of this Agreement, the full right and authority to perform its obligations.
  
 15.3. Each Party agrees that the representations, warranties and covenants set forth herein have induced the Parties to enter into this Agreement.
  
 16. Liability.
  
 16.1. Limitations. The Licensee acknowledges that the Licensor gives no warranties of any nature in relation to the Licensed Products except as expressly set out in this Agreement. The Licensor shall not be liable to the Licensee for indirect or consequential, incidental or punitive damages incurred by the Licensee in connection with this Agreement or the Licensed Products or any other Intellectual Property Rights licensed under this Agreement including, without limitation, loss of profit, business opportunity or anticipated saving, even if Licensor has been advised of the possibility of such damages. Because some states and jurisdictions do not allow for the exclusion or limitation of liability for consequential, incidental, or punitive damages, in no event shall such damages or liabilities of Licensor exceed One-Hundred (US $100.00) dollars.
  
  	 
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 16.2. Exceptions. Nothing in this Agreement shall operate to exclude or restrict either Party’s liability for:
  
 16.2.1. death or personal injury resulting from its own negligence; or
  
 16.2.2. its own fraud or deceit or intentional misconduct.
  
 17. Duration and Termination.
  
 17.1. Term. This Agreement shall come into effect on the Commencement Date and continue in force for the duration of the Term unless terminated in accordance with Section 17.2 or extended by amendment as per Section 21.
  
 17.2. Termination by Notice by the Licensor. Without prejudice to any other action or remedy to which the Licensor may be entitled against the Licensee, the Licensor shall be entitled at any time to terminate this Agreement forthwith upon written notice to the Licensee with a reasonable period to cure or as otherwise specified in this Section 17.2 if any of the following events occur:
  
 17.2.1. the Licensee fails to make any Licensed Product available to the public in commercial quantities by the Market Date in accordance with Section 5.5;
  
 17.2.2. the Licensee fails to pay in full any amounts which have become due under this Agreement within thirty (30) days of receiving notice from the Licensor of such failure to pay and demanding such payments;
  
 17.2.3. the Licensee disputes the validity or scope of the rights of the Licensor and/or its Affiliates in relation to the Trademarks, the Designs or any other Intellectual Property Rights of the Licensor or its Affiliates;
  
 17.2.4. the Licensee manufactures or distributes items incorporating any Intellectual Property Rights of the Licensor or its Affiliates other than as expressly authorized pursuant to this Agreement and fails to withdraw such merchandise within fifteen
  
 (15) days of written notice from the Licensor requiring such withdrawal and if such merchandize cannot be reasonably withdrawn in fifteen (15) days, fails to withdraw such merchandise as soon as commercially reasonable;
  
 17.2.5. the Licensee appoints a Manufacturer who has not registered and signed the Licensor’s Codes of Conduct in accordance with Section 10.1;
  
 17.2.6. the Licensee delivers Licensed Products outside the Territory or knowingly sells Licensed Products to a third party for delivery outside the Territory;
  
 17.2.7. without prejudice to Sections 17.2.1 to 17.2.6, if the Licensee commits a breach of any term of this Agreement and, where such breach is capable of remedy, the
  
  	 
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 Licensee fails to remedy such breach within thirty (30) days of the Licensor serving notice requiring the Licensee to do so;
  
 17.2.8. the Licensee enters into liquidation, ceases or threatens to cease carrying on business, becomes insolvent, is deemed unable to pay its debts, an order is made or a resolution passed for the winding up of the Licensee (other than for the purpose of a solvent scheme of reconstruction or amalgamation), a liquidator, administrative receiver, receiver or trustee is appointed in respect of the Licensee's business, the Licensee makes a voluntary arrangement with its creditors, or any similar action or analogous event occurs in any jurisdiction;
  
 17.2.9. the Licensee’s shares cease to be publicly traded;
  
 17.2.10. the Licensee is prevented from exercising the rights granted to the Licensee pursuant to this Agreement for any reason (other than breach by Licensor) for a continuous or aggregate period of twelve (12) weeks during the Term; or
  
 17.2.11. if the continuing performance of this Agreement, would in Licensor’s reasonable opinion upon advice of counsel subject it to any action for illegality or unlawfulness of this Agreement; or
  
 17.2.12. if during the Term of the Agreement, the Licensee (or any of its senior level management) is convicted of a crime or engages in any actions which may, in Licensor's reasonable discretion, bring Licensor under ridicule, contempt, scandal, or public disrepute, or which shock, insult, or offend the people of the Territory or any class or group thereof or reflects unfavorably upon Licensor.
  
 17.3. Termination by Notice by the Licensee. Without prejudice to any other action or remedy to which the Licensee may be entitled against the Licensor, the Licensee shall be entitled to terminate this Agreement upon written notice to the Licensor if during the Term of the Agreement the Licensor (or any of its senior level management) is convicted of a crime or engages in any actions which may, in Licensee's reasonable discretion, bring Licensee under ridicule, contempt, scandal, or public disrepute, or which shock, insult, or offend the people of this Territory or any class or group thereof or reflects unfavorably upon Licensee. For the avoidance of doubt, no return of consideration shall occur in such event, but additional obligations under this Agreement shall cease.
  
 17.4. Consequences of Termination. On expiration or termination of this Agreement for any reason:
  
 17.4.1. The Licensee shall within thirty (30) days of the date of termination or expiration pay to the Licensor all outstanding sums due to the Licensor under this Agreement;
  
 17.4.2. The Licensee shall, and shall procure that its Manufacturer shall, immediately cease manufacture of all Licensed Products, unless otherwise agreed by the Licensor in writing;
  
  	 
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 17.4.3. The Licensee shall, and shall procure that its Manufacturer shall, either destroy or deliver to the Licensor, as the Licensor shall direct, all artwork, drawings, software, molds, and other materials used by the Licensee in connection with the development and manufacture of the Licensed Products or which bear the Trademarks or incorporate the Designs.
  
 17.4.4. The Parties shall return all Confidential Information provided by the other Party.
  
 17.4.5. To the extent lawful, the Licensor (or its designee) may elect to purchase all or part of the Licensee's inventory of unsold Licensed Products and components of Licensed Products (whether finished or not) upon termination or expiry of this Agreement, or at the end of any further sale period pursuant to Section ?? at sixty (60%) off the wholesale price for such Licensed Products and components. And if the Licensor does not wish to purchase all of the Licensee’s inventory of unsold Licensed Products and components of Licensed Products, the Licensee shall ensure that, within two (2) weeks of receiving notice from the Licensor pursuant to Section 17.4, the Trademarks, the Designs and any references to the Licensor and its Affiliates are obliterated from any remaining Licensed Products to the satisfaction of the Licensor and at the Licensor’s sole discretion or, if obliteration is not possible in the opinion of the Licensor, such Licensed Products shall be destroyed.
  
 17.5. Survival. The provisions of the following clauses shall continue in full force and effect following expiry or termination of this Agreement: 1, 6, 7, 9, 10.2, 10.3, 11.2, 11.3, 12, 13, 14, 15, 16, 17, 20, and 23 through 29. All rights and remedies accrued by either Party in respect of any breach of this Agreement prior to the termination or expiration of this Agreement shall continue notwithstanding the termination or expiry of this Agreement.
  
 17.6. Equitable Relief. The Licensee acknowledges that the Licensor will have no adequate remedy at law if the Licensee continues to perform services under this Agreement upon the expiration or termination thereof. The Licensee acknowledges and agrees that, in addition to any and all other remedies available to the Licensor, the Licensor shall have the right to have any such activity by Licensee restrained by equitable relief, including, but not limited to, a temporary restraining order, preliminary injunction, or such other alternative relief as may be appropriate, without the necessity of the Licensor of having to post a bond. If Licensor terminates this Agreement pursuant to this Section 17, Licensee shall not be permitted to seek injunctive relief to contest Licensor’s determination that a termination event has occurred or to otherwise affect Licensor’s full and absolute control of the Licensed products and the Trademarks; provided however, Licensee may bring an action for damages, but prior to and during such action, Licensor shall have full and absolute control over the Licensed Products and the Trademarks.
  
 18. Force Majeure.
  
 18.1. Generally. If a Party (the “Affected Party”) is prevented, hindered or delayed from or in performing any of its obligations under this Agreement by a Force Majeure Event (defined below), the Affected Party’s obligations under this Agreement are suspended while the Force Majeure Event continues and to the extent that it is prevented, hindered or delayed. In conjunction with Section 8.4, if performance of any obligation under this Agreement is
  
  	 
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 prevented, hindered, or delayed for more than thirty (30) days due to a Force Majeure Event, the Agreement may be terminated by the Non-Affected Party.
  
 18.2. Definition. “Force Majeure Event” means an event beyond the reasonable control of the Affected Party and unknown to the Affected Party at the date of this Agreement, including, without limitation, strike, lock-out, labor dispute, (but excluding strikes, lockouts and labour disputes involving employees of the Affected Party or its manufacturers) act of God, terrorism, war, riot, civil commotion, act of malice (but excluding acts of malice involving the employees of the Affected Party or its manufacturers) accident, fire, flood, storm, pandemic (e.g, COVID 19), and epidemic.
  
 19. Insurance.
  
 19.1. Insurance Required. Licensee agrees to obtain, at its own cost, from an insurance company with a rating by A.M. Best of A- or better, and class VIII or better, the insurance described in Sections 19.2 and 19.3 below, and to maintain that insurance during the Term and until the later to occur of the following: (i) Licensed Products are no longer offered for sale to end users, or (ii) two (2) years have elapsed after the termination or expiration date of this Agreement. Before the sale of any Licensed Products, Licensee shall furnish Licensor with a certificate of insurance evidencing the insurance coverages required under this Section 19 and confirming that Licensor has been named as an additional insured on such policies, and that such insurance shall not be cancelled, non-renewed, or materially modified without thirty (30) days prior written notice to Licensor. The policy certificates shall be delivered to the Licensor’s designated representative. Licensee also agrees to maintain in full force and effect at all times while this Agreement and any Schedule(s) entered into hereunder are in effect such Worker’s Compensation Insurance as is required by applicable provincial or state law and, if Licensee is a U.S.-based licensee, Employer’s Liability Insurance with minimum limits of one million dollars (U.S. $1,000,000.00) per occurrence.
  
 19.2. Commercial General Liability Insurance. Licensee's Commercial General Liability Insurance shall specifically provide coverage for products and completed operations, advertising liability and contractual liability covering any and all losses, claims, demands, causes of action and settlements, including attorneys’ fees, with a minimum limit of Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) in the aggregate, with a deductible not in excess of One Hundred Thousand Dollars ($100,000), unless a higher retention is approved in advance and in writing by Licensor.
  
 19.3. Umbrella Liability Insurance Coverage. Licensee may provide (during the period described in Section 12(a) above) an umbrella liability policy as evidence of additional limits to meet the general liability insurance requirement in Section 19.2.
  
 19.4. Primary Insurance. Licensee's policies shall be primary and non-contributory as to any other valid and collectible insurance policy available to Licensor.
  
  	 
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 20. Entire Agreement. This Agreement and any confidentiality agreement between the Parties constitute the entire understanding between the Parties with respect to its subject matter and supersede all other prior agreements, standard terms, negotiations and discussions between the Parties relating to it. The Parties confirm that they are not relying on any representation, term or understanding which is not expressly set out in this Agreement. In the event of any conflict between the provisions of any confidentiality agreement between the Parties and this Agreement, the provisions of this Agreement shall prevail.
  
 21. Amendment. Except as expressly provided in this Agreement, no amendment or variation of this Agreement shall be effective unless it is in writing and signed by the duly authorized representative of each of the Parties.
  
 22. Assignment and Sub-Licensing.
  
 22.1. Except as expressly provided in this Agreement, in particular at Section 2.2 relating to right to sub-license, Section 10 relating to the use of third party Manufacturers and Section 11 with respect to the use of Distributors, the Licensee shall not without the prior written consent of the Licensor assign, transfer, charge, sub-contract, sub-license or otherwise deal with this Agreement or its rights under this Agreement or purport to do any of the same. Notwithstanding the foregoing, Licensee has the right to assign or transfer this Agreement or its rights in this Agreement to an Affiliate provided any such transfer shall not constitute a novation as to Licensee’s obligations hereunder and each of Licensor and assignee shall be responsible for performance by Licensee hereunder.
  
 22.2. The Licensor shall be entitled to assign this Agreement and any of its rights and obligations under this Agreement to any person.
  
 23. Waiver. The failure of a Party to exercise or enforce any right under this Agreement shall not be deemed to be a waiver of that right, and will not operate to bar the exercise or enforcement of it at any time or times thereafter.
  
 24. Severability. If any part of this Agreement shall be found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect.
  
 25. Notices. Any legal notice given under this Agreement shall be in writing and shall be served by delivering the notice by pre-paid courier or registered mail to the address(es) and contact name(s) for each Party as set out below, or to such other address and/or name(s) as either Party notifies to the other in writing (email being sufficient) from time to time. Any such notice shall be deemed to have been received at the time of delivery.
  
  	  
	 If To Licensor:
	  
	 If To Licensee:

	  
	 Mother Room LLC
	  
	 TPCO US Holdings LLC

	  
		  
	 1550 Leigh Avenue

	  
		  
	 San Jose CA 95125 



 
                                                             
  	 
	23
	

	 


 
  
 26. Interpretation. In this Agreement:
  
 26.1. headings are given for ease of reference only and shall not affect interpretation;
  
 26.2. references to any person shall include individuals and also bodies corporate, unincorporated associations and partnerships;
  
 26.3. the recitals and Schedules shall form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement; and any reference to a clause and the Schedules shall be to a clause of and the Schedules to this Agreement.
  
 27. Governing Law and Jurisdiction. The construction and performance of this Agreement shall be governed by the internal, substantive laws of the State of New York without regard to its choice of law rules and each party submits to and agrees to bring all claims under this Agreement in the exclusive jurisdiction of the Federal or State Courts of New York.
  
 28. Agreement binding on Successors. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, administrators, successors and assigns.
  
 29. No Joint Venture. Nothing contained herein shall constitute this arrangement to be employment, a joint venture or a partnership.
  
 [Remainder of Page Intentionally Left Blank]
  
  	 
	24
	

	 


 
  
 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
  
  	 ACCEPTED & AGREED:
	  
	 ACCEPTED & AGREED:
	  

	  
  
	  
	  
	  
	  

	 LICENSOR:
	  
	 LICENSEE:
	  

	  
	  
	  
	  
	  

	 MOTHER ROOM, LLC
	 	 TPCO US HOLDINGS LLC
	 
	  
	  
	  
	  
	  

	 /s/ Desiree Perez
	  
	 /s/ Troy Datcher
	  

	 Signature
	 	 Signature
	 
	  
	  
	  
	  
	  

	 Name:
	 Desiree Perez
	 	 Name:
	 Troy Datcher
	 
	  
	  
	  
	  
	  
	  

	 Title;
	 Authorized Signatory
	 	 Title;
	 CEO
	 
	  
	  
	  
	  
	  
	  

	 Date:
	 December 29, 2022
	  
	 Date:
	 December 29, 2022
	  



 
  
  	 
	25
	

	 


 
  
 Execution Version
  
 SCHEDULE 1 - Main Commercial Terms
  
  	 Brand
	 Monogram

	 Trademarks
	 The trademarks listed in table below.

	 Products
	 Consumable Cannabis Products
  
 For purposes hereof, the term “Cannabis” shall mean consumable or topical cannabis, hemp, marijuana, CBD, THC and any other cannabinoids or any synthetic (i.e., human-made) productions of the foregoing, including, without limitation, flower, pre-rolls, vape, extracts, concentrates and specialty beverages and edibles, and related products and accessories which are competitive with the products sold by TPCO or its affiliates as of the date hereof.

	 Territory
	 (i) for the first six months of the Term the states of Maryland and California only, and for the remainder of the Term, the State of California only.

	 Market Date (Section 5.4)
	 March 15, 2023

	 Royalty
	 n/a

	 Sell-Off Period
	 n/a

	  Authorized Distribution Channels
	  All lawful wholesale and retail in the Territory



 
  
  	 
	
	

	 


 
  
 Trademarks
  
  	 Mark
	 App. No.
	 Authority
	 Type
	 Reg. No.
	 Class No. and Description

	 MONOGRAM
	 88733895
 12/19/19
	 United States (USPTO)
	 Standard Character Mark
	 N/A Pending ITU
	 34 - Hemp cigarettes comprised of lawful hemp with a delta-9 tetrahydrocannabinol (THC) concentration of not greater than 0.3 percent on a dry weight basis

	 MONOGRAM
	 88283255
 1/13/2019
	 United States (USPTO)
	 Logotype
  
 
	 5912650
 11/19/19
	 41 - Educational and entertainment services, namely, providing a website featuring information in the nature of current events about cannabis, the cannabis industry, and products containing cannabis

	 MONOGRAM
	 88283234
 1/30/19
	 United States (USPTO)
	 Standard Character Mark
	 5953275
 1/7/20
	 41 - Educational and entertainment services, namely, providing a website featuring information in the nature of current events about cannabis, the cannabis industry, and products containing cannabis

	 MONOGRAM OG
	 88733888
 12/19/19
	 United States (USPTO)
	 Standard Character Mark
	 N/A Pending ITU
	 34 - Hemp cigarettes comprised of lawful hemp with a delta-9 tetrahydrocannabinol (THC) concentration of not greater than 0.3 percent on a dry weight basis

	 MONOGRAM
	 97267665
 2/15/22
	 United States (USPTO)
	 Standard Character Mark
	 N/A Pending ITU
	 009- Downloadable files authenticated by non- fungible tokens featuring cannabis and cannabis goods

	  
	  
	  
	  
	  
	 035 - Retail store services, namely, providing downloadable files authenticated by non-fungible tokens featuring cannabis and cannabis good

	  
	  
	  
	  
	  
	 041 Entertainment services, namely, providing files authenticated by non-fungible tokens featuring cannabis and cannabis goods, and providing digital environments in which to use the files

	 MONOGRAM
	 97591641
  
 9/14/22
	 United States (USPTO)
	 Standard Character Mark
	 N/A Pending ITU
	 34 - Ashtrays; Cigarette lighters; Cigarette rolling papers; Cigarette tubes; Tobacco grinders

	 MONOGRAM OG
	 88733888
 12/19/19
	 United States (USPTO)
	 Standard Character Mark
	 N/A Pending ITU
	 34 - Hemp cigarettes comprised of lawful hemp with a delta-9 tetrahydrocannabinol (THC)



 
  
  	 
	 2

	

	 


 
  
  	  
	  
	  
	  
	  
	 concentration of not greater than 0.3 percent on a dry weight basis

	 MONOGRAM
	  
	 California
	 Trademark
	 2003856
	 031, 034 - Dried cannabis flower intended for

	  
	  
	  
	  
 3/24/20
	 smoking and cannabis pre-rolls. Dried cannabis flower intended for wholesale purchase.

	 MONOGRAM
	  
	 New York
	 Trademark
	 S25442
	 Educational and entertainment services, namely providing a website featuring information about cannabis and cannabis culture.



 
   
  	 /s/ Desiree Perez
	  
	 /s/ Troy Datcher
	  

	 Signed on behalf of the Licensor
	  
	 Signed on behalf of the Licensee
	  



 
   
  	 Date:
	 December 29, 2022
	  
	 Date:
	 December 29, 2022
	  



 
   
  	 
	 3

	

	 


 
  
 Execution Version
  
 SCHEDULE 2 - Standards
  
 QUALITY STANDARDS & DOCUMENTATION
  
 QUALITY STANDARDS
  
 Without limiting the other terms of this Agreement, Licensee warrants that the Licensed Products will meet or exceed all Licensee standards, industry standards and government standards established with respect to safety and fitness for use including, as applicable, but not limited to:
  
  	 (a)
	 the Consumer Products Safety Act;

	  
	  

	 (b)
	 the Hazardous Substances Act;

	  
	  

	 (c)
	 all laws governing consumable goods;

	  
	  

	 (d)
	 the Child Protection and Safety Act;

	  
	  

	 (e)
	 the Public Health Security and Bioterrorism Preparedness and Response Act of 2002;

	  
	  

	 (f)
	 Licensee’s internal quality and safety/health/environmental (S/H/E) standards, all as may be amended from time to time;

	  
	  

	 (g)
	 the Packaging Specifications; and

	  
	  

	 (h)
	 the Product Specifications for each Licensed Product.



 
   
 QUALITY DOCUMENTATION
  
 1. Upon request by Licensor, Licensee shall furnish to Licensor documentation confirming Licensee’s reasonable and periodic inspection of the Licensed Products that are under Licensee’s control to verify that such Licensed Products comply with Packaging Specifications, Product Specifications, and all other Standards.
  
 2. Upon request by Licensor, Licensee shall furnish to Licensor, test results and other documentation relating to compliance testing for the Licensed Products to verify that such Licensed Products comply with Packaging Specifications, Product Specifications, and all other Standards.
  
 Licensee and Authorized Manufacturer will follow all reasonable and proper procedures for testing that Licensed Products comply with all applicable product safety laws, and will permit Licensor’s designees to inspect testing, manufacturing and quality control records and procedures and to test the Licensed Products for compliance with product safety and other laws. Licensee and Authorized Manufacturer agree to promptly reimburse Licensor for the actual costs of such testing if they fail to comply with the Standards. However, Licensor is in no way obliged to perform any such inspections or tests, and Licensee assumes full responsibility for ensuring compliance of the Licensed Products with product safety and all other applicable laws. Licensed Products not manufactured, packaged or distributed in accordance with applicable laws will be deemed unapproved, even if previously approved by Licensor, and will not be shipped unless and until they have been brought into full compliance therewith.
  
  	 
	
	

	 


 
  
 Any failure by a Manufacturer to comply with any of the requirements of this Schedule 2 shall constitute a breach by Licensee of this Agreement. Without limiting any other rights or remedies of Licensor, Licensee shall promptly reimburse Licensor for the actual costs of inspections performed pursuant to this Section if any of Licensee’s manufacturing facilities or those of any Manufacturer are determined by Licensor or its agents to have failed to comply with any of the terms of this Section. If Licensee becomes aware that any Manufacturer has used or is using Trademarks for any unauthorized purpose, Licensee shall immediately notify Licensor and, if so instructed by Licensor, shall cause such Manufacturer to cease such use immediately. Licensee shall supply Licensor with the addresses of its proprietary manufacturing facilities for the Licensed Products, as well as those of its permitted sub-manufacturers, if any, before any such facilities contribute to production of Licensed Products.
  
  	 
	 2

	

	 


 
   
 Execution Version
  
 SCHEDULE 3
  
 Approval of Manufacturer Agreement
  
 Licensee must obtain and submit this executed Registration of Manufacturer Agreement to Licensor(s) for any third-party manufacturer of any of the Licensed Product(s) in accordance with
 Section              of the Merchandising and Trademark Licensing Agreement.
  
  	 LICENSEE:
	  
	  



 
   
  	 LICENSED PRODUCT(S):  
	  
	  

	  
	  
	  

	 BRAND:    
	  
	  



 
  
 MANUFACTURER: (List all addresses including headquarters and factory locations)
  
  	 Company Name
	  

	  
	  

	 Street Address
	 City
	 State/Province
	 Country
	  

	  
	  
	  
	  
	  

	 Zip Code/Postal Code
	  
	  
	  
	  

	  
	  
	  
	  
	  

	 Company Name
	  
	  
	  
	  

	  
	  
	  
	  
	  

	 Street Address
	 City
	 State/Province
	 Country
	  

	  
	  
	  
	  
	  

	 Zip Code/Postal Code
	  
	  
	  
	  

	  
	  
	  
	  
	  

	 Company Name
	  
	  
	  
	  

	  
	  
	  
	  
	  

	 Street Address    
	 City 
	 State/Province 
	  Country
	  

	  
	  
	  
	  
	  

	 Zip Code/Postal Code
	  
	  
	  
	  



 
    
 The undersigned (“Manufacturer”) understands that Licensor(s) has licensed Licensee to manufacture or have manufactured for Licensee the Licensed Product(s) utilizing the above Brand. To induce Licensor(s) to consent to the manufacture of the Licensed Product(s) by Manufacturer, Manufacturer agrees, for the
  
  	 
	
	

	 


 
  
 benefit of Licensor(s), that it will not manufacture and/or sell the Licensed Product(s) utilizing the Brand for anyone but Licensee or its wholly-owned subsidiaries; that Manufacturer will not (unless Licensor(s) consents in writing) manufacture any other merchandise utilizing any of the Brand; and that when Licensee ceases to require Manufacturer to manufacture the Licensed Product(s), Manufacturer will deliver to Licensor(s) or Licensee any molds, or other devices used to reproduce the Licensed Products or will give satisfactory evidence of the destruction thereof. Manufacturer agrees to keep for a period of three (3) years after the term of this Manufacturer’s Agreement reasonable records covering the manufacturing and other transactions authorized in this Manufacturer’s Agreement. Licensor and Licensee and their duly authorized representatives shall have the right to examine such records and to make copies of them on two (2) business days notice.
  
  	 MANUFACTURER:  
		 Licensee:
	  
	 Licensor:

	  
	  
	  
	  
	  
	  
	  
	  

	 Signed:
	  
	  
	 Signed:
	  
	  
	 Signed:
	  

	  
	  
		  
	  
	  
	  
	  

	 Name:
	  
	  
	 Name:
	  
	  
	 Name:
	  

	  
	  
	  
	  
	  
	  
	  
	  

	 Title:
	  
	  
	 Title:
	  
	  
	 Title:
	  

	  
	  
	  
	  
	  
	  
	  
	  

	 Date:
	  
	  
	 Date:
	  
	  
	 Date:
	  



 
   
  	 
	 2

	

	 


 
   
 Execution Version
  
 SCHEDULE 4
 LICENSOR’S SUBMISSION PROCEDURES
  
 
  
  	 Next Steps:

	  
	  
	  
	  
	  

	  
	  
	  
	  
	  

	  
	  
	  
	  
	  

	 Licensor
	  
	  
	 Date
	  



 
   
  	 
	
	

	 


 
  
 Execution Version
  
 SCHEDULE 5 
 LICENSOR’S CODE OF CONDUCT
  
 Workmanship Standards. Licensee and Authorized Manufacturer covenant and agree that each Licensed Product distributed hereunder will be of good quality and free from defects in design, materials and workmanship, will comply with all applicable laws, and will conform to the samples approved by Licensor.
  
 Application of Labor and Employment Standards. Licensee and Authorized Manufacturer further covenant and agree as follows:
  
 They will not use child labor in the manufacturing, packaging or distribution of Licensed Products. The term “Child” refers to a person younger than the local legal minimum age for employment or the age for completing compulsory education, but in no case will any child younger than sixteen (16) years of age be employed in the manufacturing, packaging or distribution of Licensed Products. Where employing young persons who do not fall within the definition of “Children”, they agree also to comply with any laws applicable to such persons.
  
 They will only employ persons whose presence is voluntary. They will not use any forced or involuntary labor, whether prison, bonded, indentured or otherwise.
  
 They will treat each employee with dignity and respect, and not use corporal punishment, threats of violence, or other forms of physical, sexual, psychological or verbal harassment or abuse.
  
 Unless required by applicable Laws to treat a specific group of employees differently, they will not discriminate in hiring and employment practices, including salary, benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.
  
 They will comply, at a minimum, with all applicable wage and hour laws, including minimum wage, overtime, maximum hours and other elements of compensation, and will provide legally mandated benefits. If local laws do not provide for overtime pay, they agree to pay at least regular wages for overtime work. Except in extraordinary business circumstances, they will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits of regular and overtime hours allowed by local law, or, where local law does not limit the hours of work, the regular work week in such country plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period. Where local industry standards are higher than applicable legal requirements, they will meet the higher standards.
  
 They will provide employees with a safe and healthy workplace in compliance with all applicable laws, ensuring, at a minimum, reasonable access to potable water and sanitary facilities, fire safety, and adequate lighting and ventilation. They will ensure that the same standards for health and safety are applied in any housing they provide for employees. They will provide Licensor with any information Licensor may request about manufacturing, packaging and distribution facilities for the Licensed Products.
  
 They will respect the rights of employees to associate, organize and bargain collectively in a lawful and peaceful manner, without penalty or interference, in accordance with applicable laws.
  
 They will comply with all applicable environmental laws.
  
 They will comply with all applicable laws, including without limitation those pertaining to the manufacture, pricing, sale and distribution of the Licensed Products.
  
  	 
	
	

	 


 
  
 Licensee and Authorized Manufacturer agree that Licensor and its designated representatives may engage in monitoring activities to confirm compliance with these criteria for engagement, including unannounced on-site inspections of manufacturing, packaging and distribution facilities, and employer-provided housing, such inspections to include reviews of books and records relating to employment matters and private interviews with employees. Licensee and Authorized Manufacturer will provide Licensor with access to all sites reasonably requested by Licensor to perform and exercise its rights of inspection hereunder. Licensee and Authorized Manufacturer agree to maintain on-site all documentation necessary to demonstrate compliance with these criteria, which Licensor and its agent may review, and make and retain extracts of, to assist the compliance monitoring.
  
 Licensee’s Duty to Monitor Authorized Manufacturer. Licensee agrees to take appropriate steps, in consultation with Licensor, to develop, implement and maintain procedures to evaluate and monitor the Authorized Manufacturer and to ensure compliance with this Agreement.
  
 Compliance with Product Safety Laws. Licensee and Authorized Manufacturer will follow all reasonable and proper procedures for testing that Licensed Products comply with all applicable product safety laws, and will permit Licensor’s designees to inspect testing, manufacturing and quality control records and procedures and to test the Licensed Products for compliance with product safety and other laws. Licensee and Authorized Manufacturer agree to promptly reimburse Licensor for the actual costs of such testing. However, Licensor is in no way obliged to perform any such inspections or tests, and Licensee assumes full responsibility for ensuring compliance of the Licensed Products with product safety and all other applicable laws. Licensed Products not manufactured, packaged or distributed in accordance with applicable laws will be deemed unapproved, even if previously approved by Licensor, and will not be shipped unless and until they have been brought into full compliance therewith.
  
  	 
	 2