CTHR » Topics » 1. GRANT OF LICENSE

This excerpt taken from the CTHR 8-K filed Oct 6, 2006.

1. GRANT OF LICENSE

Licensor grants to Licensee, subject to the terms and conditions of this Agreement, the non-exclusive right unless initially agreed upon to use the Trademarks and Copyright Works listed in the Brand Identity Guidelines, in connection with Licensee’s advertisement, promotion and sale of Licensee’s products which incorporate Charles & Colvard created Moissanite jewels. Licensee may use the Trademarks and Copyright Works: (i) only in the United States of America and Canada except with knowledge of C&C its agents or employees; (ii) only in connection with Licensee’s advertisements, sales promotional and sales materials (including but not limited to online advertising and promotion) (collectively “Advertisements”); and (iii) only as permitted by this Agreement. Licensee may make no other use of the Trademarks and Copyright Works and Licensor reserves any rights, benefits and opportunities not expressly granted to Licensee under this Agreement, except with the written approval of Charles & Colvard.

2. TERM AND TERMINATION

The term of this Agreement shall begin on the date of this Agreement and end simultaneously with the termination of the Manufacturing Agreement dated August 18, 2006 between Licensor and Licensee concerning manufacture of jewelry incorporating Charles & Colvard created Moissanite Jewels unless sooner terminated by either party hereto.

3. ROYALTIES

Licensee is not obligated to pay Licensor any royalties for the use of the Trademarks or Copyright Works under the terms of this agreement.

4. QUALITY AND APPROVAL

(a) Purpose of Quality Control; Prior Approval Licensee shall not use the Trademarks and/or Copyright Works in connection with Advertisements before obtaining Licensor’s approval, except as detailed in (b) and (c).

(b) Pre-approved Materials. All advertising, promotional and sales material bearing or incorporating the Trademarks and/or Copyright Works which are supplied to Licensee directly by Licensor, or previously approved by Licensor, without change or alteration of any kind, shall be considered approved.

(c) Purpose of Quality Control. In order to maintain the quality and reputation of the Trademarks and the rights in the Copyright Works, all Advertisements that are instituted solely by Licensee and are not co-op, retail initiated, etc., shall have approval, oral or otherwise by Licensor, Licensee is not responsible for advertisements from its customers but will make best efforts to maintain the quality and reputation of C&C branding with its customer.

5. TRADEMARK AND COPYRIGHT OWNERSHIP AND NOTICES

(a) Licensee’s use of the Trademarks shall, depending upon the directions provided by Licensor, in every instance be combined with one of the following notices: (i) Reg. U.S. Pat. & TM. Off.; (ii) ®; (iii) Trademark of Charles & Colvard; (iv) TM; or (v) such other similar language as shall have Licensor’s prior approval.


(b) Licensor and Licensee agree and intend that all material, including without limitation all artwork and designs, created by Licensee or any other person or entity retained or employed by Licensee bearing, displaying or containing the Trademarks or Copyright Works (“Copyright Materials”) are works made for hire within the meaning of the United States Copyright Act and shall be the property of Licensor, where such work is specific to trademarks of C&C for all other marketing, trade names, copyrights owned by Licensee (artwork, design, etc.) ownership shall remain with Licensee. As owner, Licensor shall be entitled to use and license others to use the Copyright Materials. To the extent the Copyright Materials are not works made for hire, Licensee hereby irrevocably assigns to Licensor, its successors and assigns, the entire right, title and interest in perpetuity throughout the world in and to any and all rights, including all copyrights and related rights in such Copyright Materials. All other Materials produced for marketing by Licensee which do not contain the Copyright Materials shall remain the property of Licensee. Licensee warrants and represents that: (i) the Copyright Materials are completely original and are not based on or derived from the work or works of any third party; (ii) only Licensee created or contributed to the Copyright Materials; (iii) the Copyright Materials are an original work of authorship, and no royalties, honorariums or fees were, are or will be payable to other persons by reason of Licensor’s use of the Copyright Materials; and (iv) the Copyright Materials do not infringe the rights of others. If Licensee wishes to retain a third party to assist Licensee in the creation of the Copyright Materials, Licensee shall obtain Licensor’s prior approval and shall obtain and provide to Licensor an original assignment from the third party to Licensor of the third party’s rights in the Copyright Materials.

(c) SAI will use best efforts to ensure the following notice (or such other notice as shall have Licensor’s prior approval) shall appear in connection with the Copyright Works and/or Copyright Materials at least once on Advertisements using Copyright Works and/or Copyright Materials: © (year of first publication) Charles & Colvard® All Rights Reserved.

(d) Upon Licensor’s reasonable request in writing and at no cost to Licensee, Licensee agrees to execute such additional documents reasonably proposed by Licensor, or do or have done all things as may be reasonably requested and at no cost by Licensor to vest and/or confirm the sole and exclusive ownership of all right, title and interest, including copyrights and related rights in and to the Copyright Materials in favor of Licensor, its successors and assigns.

6. RIGHTS IN THE TRADEMARKS AND COPYRIGHT WORKS

(a) Licensee shall not make any unlicensed use, file any application for registration or claim any other proprietary right to any of the Trademarks, Copyright Works, Copyright Materials or derivations or adaptations thereof, or any marks or works similar thereto as to the best of its knowledge and such filing pertaining to moissanite material.

(b) Licensee acknowledges the validity of and Licensor’s title to the Trademarks, Copyright Works and Copyright Materials as disclosed to it by Licensor and shall not do, to the best of its knowledge, or suffer to be done any act or thing, which will impair the rights of Licensor in and to such Trademarks, Copyright Works or Copyright Materials. Licensee shall not acquire and shall not claim any title or any other proprietary right to the Trademarks, Copyright Works, Copyright Materials or in any derivation, adaptation, variation or name thereof by virtue of this license or Licensee’s creation or usage, unless as discussed in Section 5 (b).

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