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Trademark Licensing Agreement

1. Introduction. Agreement dated [date], between [name], with principal offices at [address] (Licensor), and [name], with principal offices at [address] (Licensee).

2. Subject Matter of Agreement. Licensor is the proprietor of the trademark "[trademark]" (Trademark), and Licensee and Licensor wish to permit Licensee to use the Trademark in [description of territory] (Territory).

3. Grant of Rights. Licensor grants to Licensee the right to use the Trademark in the Territory in connection with the manufacture and sale of [description], the merchandise to which the Trademark applies (Merchandise). Licensee undertakes to use the Trademark in the Territory in accordance with the terms of this Agreement.

4. Manufacture of Trademarked Merchandise by Licensee. Licensee may manufacture, distribute, and sell the Merchandise at Licensee's own cost and expense. Licensee shall use the Trademark only in connection with merchandise manufactured by it in accordance with the specifications, directions, and processes that Licensor furnishes to Licensee from time to time. The quality of the Merchandise shall be satisfactory to Licensor.

5. Inspection of Merchandise by Licensor. Licensor, by Licensor's authorized representatives, may at any time enter upon Licensee's premises to determine whether the Merchandise is being manufactured by Licensee in accordance with the provisions of Paragraph 4 of this Agreement. Upon Licensor's request, Licensee shall submit to Licensor's representatives samples of the Merchandise so that Licensor may determine whether the Merchandise's quality is satisfactory.

6. Use of Trademark. Licensee shall indicate Licensor's ownership of the Trademark whenever Licensee uses the Trademark in connection with the advertising, manufacture, or sale of the Merchandise. Licensor will furnish Licensee with samples of Licensor's packages and labels, and Licensee will use only those packages and labels in connection with the Merchandise unless otherwise directed in writing by Licensor.

7. Protection of Trademark by Licensee. Licensee will comply with all the laws applicable to trademarks in the Territory including compliance with marking requirements. Should Licensee fail to perform Licensee's obligations under this Paragraph, Licensor may perform them on Licensee's behalf, without notice to Licensee and at Licensee's cost and expense.

8. Protection of Trademark by Licensor. If the Trademark is not presently registered in the Territory, Licensor, at Licensor's cost and expense, will register the Trademark in the Territory. Licensor will maintain the Trademark in the Territory during the term of this Agreement. Licensor, during the term of this Agreement, will not permit any one other than Licensee to use the Trademark in the Territory.

9. Assignment by Licensee. None of the rights granted to Licensee by this Agreement can be assigned to others without Licensor's express written consent. Licensee can have the Merchandise manufactured by others for Licensee. In such event, the agreements between Licensee and Licensee's subcontractors shall be subject to Licensor's written approval, which consent shall not be unreasonably withheld, and shall provide that Licensor may enter upon Licensee's subcontractors' premises to determine whether the Merchandise is being produced in accordance with the provisions of Paragraph 4 of this Agreement.

10. Royalties. Licensee will pay Licensor a royalty of ........ percent (........%) Licensee's gross receipts from the sale of the Merchandise.

[Alternative Paragraph]

10. Royalties. Licensee will pay Licensor a royalty of ........ dollars ($........) for each unit of the Merchandise sold by Licensee.

11. Payment of Royalties. Royalties shall be computed quarterly and paid no later than the last day of the month following each calendar quarter. The first royalty payment shall be for the period ended [date].

12. Royalty Statements. Each payment of royalties shall be accompanied by a statement showing the number of units of the Merchandise sold by Licensee during the period covered by the royalty payment, as well as Licensee's gross receipts for those sales and the computation of royalties due to Licensor.

13. Records to Be Maintained by Licensee. Licensee shall at all times keep an accurate record of all transactions covered by this Agreement.

14. Licensor's Right to Audit Records. Licensor may, at Licensor's expense, audit Licensee's books and records for the purpose of verifying the royalty statements and payments. This right shall terminate, with regard to each royalty statement and payment, [number] years after the statement has been rendered and payment received. The audit must be made by a certified public accountant or certified public accounting firm, during regular business hours, and upon [number] days' notice to Licensee.

15. Licensee Not to Impair Value of Trademark. Licensee acknowledges Licensor's exclusive right, title, and interest in and to the Trademark and will not do anything that will in any way impair or tend to impair any part of Licensor's right, title, and interest. In connection with the use of the Trademark, Licensee will not represent that Licensee has any ownership in the Trademark or in its registration. Use of the Trademark by Licensee will not create any...

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