CONFIDENTIAL LICENSE AGREEMENT
Exhibit 10.1
CONFIDENTIAL LICENSE AGREEMENT
This Confidential License Agreement (hereinafter
referred to as "Agreement") is effective as of the
5th
day of
June, 2019 (hereinafter “the Effective Date”), by and
between Xxx Xxxxx, LLC, a Nevada limited liability company,
(hereinafter referred to as "Licensee"), and Charlies Chalk Dust,
LLC a California limited liability company, (hereinafter referred
to as "Licensor"). Licensor and Licensee shall collectively be the
“Parties”.
WHEREAS,
Licensor owns intellectual property rights, including but not
limited to, trademarks and copyrights in various original artwork
and is in the business of building consumer product brands,
creating, marketing, promoting, licensing and selling consumer
packaged goods including, but limited to, e-liquids, t-shirts,
hats, hoodies and other apparel; and
WHEREAS,
Licensee is distributor and purveyor of consumer goods infused with
cannabinoids including cannabidiol
(CBD)
who wishes to license and depict some of Licensor’s
trademarks and copyrights and various original artwork on and
Licensee’s branded products for distribution and sale in any
territory that permits.
NOW, THEREFORE, in
consideration of the mutual promises agreed to herein, the Parties
hereto agree as follows:
1.
DEFINITIONS.
a. Licensed
Artwork. "Licensed
Artwork" shall refer to the artwork specified in Appendix
A.
b. Licensed
Product. "Licensed
Product" shall refer to products incorporating the Licensed Artwork
which shall be limited to the products specified in Appendix
B.
c. Territory.
“Territory”
with respect to the products shall refer to the
states, countries
or other geographic regions listed in Appendix
C.
d. Net
Sales. "Net
Sales" means the total of gross dollar amounts invoiced
or charged
to others by Licensee, for all Licensed Products sold, distributed,
or transferred, reduced by the amount of any sales and excise tax,
including VAT taxes and duties, if any.
e. Net
Profits.
“Net Profits shall have the meaning as stated in Appendix
D.
2.
GRANT OF LICENSE.
a. Licensor
hereby grants to Licensee, and Licensee accepts, upon the terms and
conditions set forth herein, the limited right and license to use
the Licensed Artwork solely on or in connection with the design,
manufacture, advertisement, promotion, distribution and sale of
Licensed Products within the Territory. Licensee, as part of the
consideration exchanged between the Parties in furtherance of the
License, agrees that it shall not licensee any intellectual
property from any other source other than Licensor, in connection
with Licensee’s design, manufacture, advertisement,
promotion, distribution and sale of cannabinoid infused products,
within the Territory. Conversely, Licensee is not seeking nor is
being granted an exclusive license from Licensor, and accordingly,
Licensor shall be permitted to license its intellectual property to
third parties freely and as Licensor sees fit in its sole
discretion.
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b. The
Parties acknowledge and agree that this Agreement is a limited
intellectual property
rights license agreement and it does not constitute, and shall not
be construed as, a franchise agreement.
3.
REPRESENTATIONS AND WARRANTIES
a.
Licensor Representation and Warranty.
Licensor represents and warrants that it
has the right, power and authority to enter into this Agreement and
to grant the rights herein granted; that to Licensor’s
knowledge, Licensee's use of the Licensed Artwork will not violate
or infringe upon the right of any third party.
b.
Licensee Representation and Warranty.
Licensee represents and warrants that it
has the right, power and authority to enter into this Agreement and
to fully perform all of its obligations
hereunder.
4.
TERM AND OPTION
a.
Term. This
license shall commence on the Effective Date and shall exist
in perpetuity,
unless earlier terminated in accordance with the terms and
conditions set forth herein.
5.
TERMS OF PAYMENT
a. Licensee
shall pay to Licensor royalties (“Royalty Payments”) at
the rate and
times described in Appendix D.
b. Within
thirty (30) days after the close of each month, Licensee shall
furnish to Licensor a royalty statement and payment of royalties
due for said month. The royalty statement shall completely and
accurately specify number, item description, and Net Sales of the
Licensed Products during the month to which the statement refers.
These monthly royalty statements shall also include the sales and
excise tax, including VAT taxes and duties and any and all other
factors used in calculating Licensor’s monthly Royalty
Payments.
6.
ADDITIONAL CONSIDERATIONS
a. Development:
Licensor
will fully cooperate in providing the Licensed Artwork to Licensee
in a timely manner as needed by Licensee. Licensee will not be
liable to Licensor for cost incurred by Licensor related to
providing the Licensed Artwork to
Licensee.
b. Marketing:
Licensee
will use its best efforts to market, promote and advertise Licensed
Products. Licensor may assist Licensee in marketing the Licensed
Products through Licensor’s
website and or social media pages or via the terms of a subsequent
services agreement
but the duty to promote, market and advertise the Licensed Products
shall be primarily Licensee’s.
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c. Premium
Partner: In
addition to Royalty Payments paid to Licensor on Licensee’s
sales of the Licensed Products to third parties, Licensor will also
receive Royalty Payments on all Licensed Products that Licensor
purchases from Licensee to the extent Licensor ever wishes to sell
products sold by Licensee. Licensee shall give Licensor most
favored nations pricing on all
d. Exclusivity:
Licensor will not develop, license, buy or sell any other
similar product with or from any other party while under this
Agreement with Licensee, without the prior written consent of
Licensee. This restriction upon Licensor shall include but is
not limited to all
products of any kind, containing cannabinoid compounds found
in the plant genus Cannabis or containing any cannabinoid
compound(s) which are synthetically manufactured or otherwise
created."
7.
ANNUAL MEETINGS
At least once a year, throughout the Term, representatives of
Licensee shall meet with representatives of Licensor to review
sales, marketing, distribution, and products. Each party shall
cover their own costs to attend these meetings.
8.
BOOKS AND RECORDS
a. Licensee
shall keep complete books of account and records in accordance
with
generally accepted accounting principles of all activities under
this Agreement.
b. Such
books of account and records shall be retained by Licensee and kept
available for at least five (5) years after the termination of this
Agreement for possible inspection, copying, extracting and/or audit
by Licensor.
c. Licensor
shall have the right to conduct audit with respect to the books,
records, factory invoices and all other documents and material in
the possession or under the control of Licensee relating to this
Agreement, the cost of which shall be borne by the
Licensor.
9.
OWNERSHIP
OF THE MARKS AND COPYRIGHTS
Other than as specifically provided for in this Agreement, Licensee
shall have no right, title or interest in the Licensed Artworks.
Licensee acknowledges that the rights to display and exploit the
Licensed Artworks as contemplated in this Agreement are owned
solely and exclusively by Licensor with the exception of the
limited rights being granted to Licensee via this
Agreement.
10.
LEGAL ACTIONS, INFRINGEMENT OF TRADEMARK
a. Licensee
is responsible to protect and defend the Licensed Artwork. Licensee
shall promptly notify Licensor of any infringements, claims or
actions by others including but not limited to the dilution,
tarnishment or derogation of the Licensed Artworks. In the event
Licensee becomes aware of any action which is adverse to the
Licensed Artwork, Licensee shall promptly take action, and incur
the costs of any action necessary to preserve the integrity of the
Licensed Artwork. Licensor, shall have the exclusive right to
select counsel necessary in the event such action is needed to
protect the Licensed Artwork.
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b. In
the event Licensor initiates any legal proceedings on account of
any infringements, claims or actions by others in derogation of the
Licensed Artworks, Licensee agrees to cooperate with and assist
Licensor to the extent reasonably necessary to protect the Licensed
Artworks. Any damages or other recoveries received from such
proceedings shall be shared between the parties proportionate to
their contribution to such attorney's fees and legal
expenses.
11.
RIGHT OF FIRST REFUSAL
Licensee
hereby grants Licensor an exclusive right of first refusal to
purchase all of Licensee’s company, including all of
Licensee’s assets and liabilities for a total purchase price
of one hundred eleven thousand, six hundred and eighteen
dollars
($111,618.00). This
right of first refusal shall expire on December 31, 2025. In the
event that Licensor does not make a bona fide offer to purchase
Licensee’s company within 60 days after Licensee first
notifies Licensor of its desire to sell all or merely a portion of
License’s company this right of first refusal shall expire.
In the event that a bona fide offer is made by Licensee to sell all
or a portion of its company, this right of first refusal shall
terminate in the event that the Licensee and Licensor are not able
to finalize deal terms and enter into a fully executed engagement
between the Parties within 6 months of Licensee’s first
notice to Licensor of its desire to
sell.
12.
TERMINATION.
Notwithstanding
any other language in this Agreement, the Parties specifically
intend that this Agreement shall be unilaterally terminable by
Licensor in Licensor’s sole discretion, and terminable by
Licensor at any time Licensor wishes.
13.
CONFIDENTIALITY
Licensee and Licensor shall keep all of the terms of this
Agreement, including royalties, advances, all information regarding
receipts and grosses, and all information relating to the Licensed
Products and business affairs of either party, secret and
confidential and will not deliberately disclose such information
without the prior written approval of the other. The obligation of
confidentiality shall survive any termination or expiration of this
Agreement.
14.
NOTICES.
All notices required by this Agreement shall be in writing and
shall be transmitted by email.
To Xxx Xxxxx:
Attn:
Xxxx Xxxxx
email:Xxxx.Xxxxx0@xxxxx.xxx
To Charlie’s Chalk Dust:
Attn: Xxxxxxx Xxxxx
email: Xxxxxxx@XxxxxxxxXxxxxXxxx.xxx
with copies for notice to both Xxx Xxxxx and Charlie’s Chalk
Dust to go to:
Xxxxxxx.Xxxxx@XxxxxXXX.xxx;
Xxxxx.XxXxxxxxx@XxxxxXXX.xxx
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15.
GOVERNING LAW
This Agreement is made in accordance with and shall be governed and
construed under the laws of the State of California, and of the
USA.
16.
DISPUTE RESOLUTION
The Parties to this Agreement hereby confirm and agree
unconditionally to submit to the jurisdiction of the Superior Court
for the State of California. Any dispute arising from or related to
this agreement shall be resolved pursuant to the laws of the State
of California and laws of the United States and resolved in the
courts located in Orange County, California. The Parties agree
that, that they may, but are not obligated to, resolve any dispute
via binding arbitration before an arbiter they mutually select in
Orange County, County, California.
17.
FORCE MAJEURE
Neither Party shall be in default of this Agreement by reasons of
its delay in the performance of, or failure to perform, any of its
undertakings if such delay or failure is caused by force majeure.
Force majeure includes, but is not limited to, strikes, riots,
fire, explosions, acts of God or public enemy, rebellions, civil
strife, interference by military authorities, compliance with
governmental statutes, rules, regulations, decrees, including
consent decrees, of courts of the Territory, and any other similar
event beyond a party's reasonable ability to control. The Party
unable to perform shall promptly notify the other Party and shall
use its best efforts to recommence performance as soon as possible.
The Party against whom force majeure is invoked shall have the
right to suspend performance of its obligations under this
agreement until resumption of full performance by the other Party.
However, if due to force majeure, Licensee is unable to carry on
its business or make payments due under Section 6 for a period of
ninety (90) days or more, Licensor may at its option terminate this
Agreement.
18.
NO AGENCY OR PARTNERSHIP
No agency or partnership or joint venture of any sort is created by
this Agreement. Neither Party shall make any representation to the
contrary. Both Parties shall have the obligation to correct any
misunderstanding by any third party with respect to this Section,
if such misunderstanding is known to the party.
19.
HEADINGS
Headings of clauses have been included for purposes of convenience
only, and shall not affect the interpretation of this
Agreement.
20.
ATTORNEYS FEES
If any legal action or other proceeding in connection with any of
the provisions of this Agreement occurs, the successful or
prevailing party will be entitled to recover reasonable
attorney’s fees and other costs incurred in that action or
proceeding, in addition to any other relief to which the Party may
be entitled.
21.
NO PARTY DEEMED DRAFTER
This Agreement is to be deemed to have been drafted jointly by the
Parties and any uncertainty or ambiguity shall not be construed for
or against either party based on attribution of drafting by either
party.
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22.
ASSIGNMENT/SUB-LICENSE
This Agreement is not assignable by Licensee without the express,
prior written consent of Licensor, which shall not be unreasonably
withheld. This restriction against Licensee’s right of
assignment, includes any attempt by Licensee to assign its rights
per this Agreement in the event of any merger, or sale of
substantially all the business of Licensee, or in the case where
the assignment is made to an affiliated company or to a
wholly-owned subsidiary, in which case Licensor’s consent is
still, explicitly required. No assignment pursuant to this Section
shall create any additional advance or guaranteed royalty or other
obligation of any kind as between the parties hereto. In the case
of any permitted assignment or transfer of or under this Agreement,
this Agreement or the relevant provisions shall be binding upon,
and inure to the benefit of, the successors, executors, heirs,
representatives, administrators and assigns of the parties
hereto.
23.
NO WAIVER
A failure of either party to exercise any right provided for herein
shall not be deemed to be a waiver of any right
hereunder.
24.
SEVERABILITY
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law. Such provision shall be ineffective in the extent
of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this
Agreement. Any unenforceable provision will be replaced by a
mutually acceptable provision, which comes closest to the intention
of the parties at the time the original provision was agreed
upon.
25.
ENTIRE AGREEMENT
This Agreement constitutes the entire, final, and complete
agreement between the Parties and supersedes all previous
agreements or representations, written or oral, with respect to the
Licensed Artwork and the licensing of the Licensed Artwork under
this Agreement. This Agreement may not be modified or amended
except in writing signed by a duly authorized representative of
each Party. In the event any provision of this Agreement is held to
be invalid or unenforceable, the valid or enforceable portion
thereof and the remaining provisions of this Agreement will remain
in full force and effect. Any waiver (express or implied) by either
Party of any default or breach of this Agreement shall not
constitute a waiver of any other or subsequent default or
breach.
The Parties hereto have each caused this Agreement to be signed and
delivered by its duly authorized representative as of the date
first written above.
|
LICENSEE
|
LICENSOR
|
|
|
|
|
/s/
Xxxx Xxxxx
|
/s/
Xxxxxxx Xxxxx
|
|
Xxxx
Xxxxx
|
Xxxxxxx
Xxxxx
|
|
Xxx
Xxxxx, LLC
|
Charlie’s
Chalk Dust, LLC
|
|
Date:
06/05/2019
|
Date:
06/05/2019
|
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APPENDIX A
to
LICENSED ARTWORK
All Pachamama™ original logo designs, artwork and graphic
designs
APPENDIX
B
to
LICENSED PRODUCTS
THE ENTIRE PACHAMAMMA CATALOGUE OF PRODUCTS
APPENDIX C
to
TERRITORY
WORLDWIDE
APPENDIX D
to
ROYALTIES
Xxx Xxxxx, LLC, shall pay to Charlie’s Chalk Dust, LLC, as a
royalty, seventy five percent (75%) of “Net Profits” of
Xxx Xxxxx, LLC. “Net Profits” is defined as “all
Net Sales less all costs and expenses to operate Xxx Xxxxx
LLC’s business.” All payment to Charlie’s Chalk
Dust, LLC shall be payable within 45 days at the close of each of
Xxx Xxxxx LLC’s fiscal quarters.
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