SECOND AMENDMENT TO TRADEMARK LICENSE AGREEMENT
This SECOND AMENDMENT to the TRADEMARK LICENSE AGREEMENT is dated and
effective as of February 18, 2004 ("Second Amendment") by and between BLONDIE
ROCKWELL, INC., a New York corporation with offices at c/o Erving Wonder
Management, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Licensor") and
INNOVO AZTECA APPAREL, INC., a California corporation with offices at ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Licensee"). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Agreement (defined
below).
WHEREAS, Licensor and Licensee have entered into that certain Trademark
License Agreement dated February 13, 2003 ("Trademark License Agreement"), as
amended by that First Amendment to Trademark License Agreement dated September
8, 2003 ("First Amendment") (together the Trademark License Agreement and First
Amendment shall be referred to hereinafter as the "Agreement"); and
WHEREAS, Licensor acknowledges and Licensee warrants and represents
that it has incurred expenditures and/or made payments to Licensor as of
November 29, 2003 (the "Determination Date") totaling $1,047,474 pursuant to
Sections 4(f)(i), 4(f)(ii) and 4(f)(iii) of the Agreement ("Advertising
Expenditure Amount"), which such amounts are reflected on Schedule A attached
hereto and incorporated herein by reference and are hereby verified by an
officer of the Licensee in the certificate on Schedule B attached hereto and
incorporated herein by reference; and
WHEREAS, Licensor and Licensee acknowledge that the Advertising
Expenditure Amount expended by Licensee and/or paid to Licensor is in excess of
the amount Licensee is obligated to expend pursuant to Sections 4(f)(i),
4(f)(ii) and 4(f)(iii) of the Agreement during the first Annual Period; and
WHEREAS, Licensor and Licensee desire to, amend the Agreement to
clarify and recognize that, as of November 29, 2003, $953,458 of the Advertising
Expenditure Amount has been expended by Licensee and/or paid to Licensor in
excess of Licensee's obligations under Sections 4(f)(i), 4(f)(ii) and 4(f)(iii)
of the Agreement ("Additional Advertising Expenditure Amount") and that said
Additional Advertising Expenditure Amount shall satisfy a prepayment of a future
obligation owed by Licensee to Licensor for the remainder of the term of the
Agreement solely pursuant to Sections 4(f)(i), 4(f)(ii) and 4(f)(iii) of the
Agreement, so long as Licensee shall resume advertising payments in accordance
with these Sections at such date that an amount equal to the Additional
Advertising Expenditure Amount shall have been credited in full to Licensee for
its obligations under Sections 4(f)(i), 4(f)(ii) and 4(f)(iii) of the Agreement
(the "Recoupment Date"); and
WHEREAS, Licensor and Licensee desire to amend the Agreement to provide
that: (i) following the Recoupment Date, the Advertising Payment, as defined in
said Agreement, shall be increased from one percent (1%) to two percent (2%);
and (ii) the
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Licensee's Advertising Expense obligation, as defined in said Agreement, shall
be eliminated.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, stipulate and agree as follows:
1. Section 4(f)(i) of the Agreement shall be amended by deleting the
third sentence thereof in its entirety and replacing it with the following:
"Licensor shall spend the Advertising Payments received by it from
Licensee for the marketing, advertising and promoting the Property and
Trademarks in general in any manner determined by Licensor in its discretion."
2. A new Section 4(l) shall be added to the Agreement as follows:
"4(l) Beginning on the Determination Date, all amounts expended by
Licensee to pay for the services of ▇▇▇▇ ▇▇▇▇▇▇ shall be deemed an advance
against Royalties payable to Licensor hereunder."
3. Licensor and Licensee shall agree that Licensor shall accept the
Additional Advertising Expenditure Amount paid by Licensee as a pre-payment for
future obligations of Licensee solely pursuant to Sections 4(f)(i), (4)(f)(ii)
and 4(f)(iii) of the Agreement and allow Licensee, beginning on the
Determination Date, to apply such excess to reduce the Advertising Payment
obligation and Advertising Expense obligation as required in Sections 4(f)(i),
4(f)(ii) and 4(f)(iii) to zero until the Recoupment Date, so long as Licensee
shall resume payments in accordance with Sections 4(f)(i), 4(f)(ii) and
4(f)(iii) after the Recoupment Date.
4. Following the Recoupment Date, (i) the parties hereto agree that the
Advertising Payment required to be paid to Licensor in accordance with the terms
of Section 4(f)(i) of the Agreement, shall be increased from the greater of one
percent (1%) of Minimum Net Sales or one percent (1%) of actual Net Sales to the
greater of two percent (2%) of Minimum Net Sales or two percent (2%) of actual
Net Sales, to paid to Licensor in accordance with the terms of the Agreement,
and (ii) Section 4(f)(iii) of the Agreement shall be deleted in its entirety.
5. Except as specifically modified by this Second Amendment, all other
terms and conditions of the Agreement shall remain in full force and effect.
6. This Second Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, taken together,
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the Licensor and Licensee has caused this
Second Amendment to be executed by its duly authorized officer effective as of
February 18, 2004.
LICENSOR:
BLONDIE ROCKWELL, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇
Title: President
LICENSEE:
INNOVO AZTECA APPAREL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Its: Chief Executive Officer
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