Exhibit 10.1
AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT
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This Amended and Restated Exclusive License Agreement (the "AGREEMENT") is
made as of December 15, 2006, by and between Smoky Systems, LLC, a Nevada
limited liability company ("LICENSOR"), and Smoky Market Foods, Inc., a Nevada
corporation ("LICENSEE"). This Agreement amends, restates and supersedes in its
entirety for periods after the date first set forth above the Exclusive License
Agreement dated May 1, 2006 (the "EFFECTIVE DATE") between Licensee and
Licensor. This Agreement may refer to the parties individually as a "PARTY" or
collectively as the "PARTIES."
RECITALS
A. Licensor owns certain intellectual property rights (including but not
limited to the trademark SMOKY MARKET(R)), contract rights, and other rights
relating to the production, marketing, distribution, and/or sale of meats, fish,
poultry, vegetables, and other food products.
B. Licensee desires to obtain, and Licensor is willing to grant to
Licensee, an exclusive worldwide license to exercise those intellectual property
rights and related rights.
COVENANTS, PROMISES, AND OBLIGATIONS
NOW, THEREFORE, in consideration of the recitals set forth above, the
mutual covenants, promises, and obligations set forth herein, and for other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged by the Parties, and intending to be legally bound hereby,
Licensor and Licensee agree as follows:
1. DEFINITIONS. In addition to terms defined elsewhere in this Agreement,
including without limitation in the preamble and Recitals, the following
terms shall have these meanings:
1.1 "AFFILIATE" means, with respect to a Party, any Person controlled by,
controlling, or under common control with the Party. For this purpose,
control means direct or indirect beneficial ownership of at least a
fifty percent (50%) interest in the income, stock, or other ownership
structure of such Person or other operational control. Notwithstanding
the foregoing definition, the term "Affiliate" when used with respect
to Licensee shall not include Licensor and when used with respect to
Licensor shall not include Licensee, except as expressly stated
otherwise in this Agreement.
1.2 "IMPROVEMENTS" means (a) any and all improvements to any of the
Intellectual Property Rights that Licensor and/or any of its
Affiliates makes, authors, invents, discovers, conceives, designs,
reduces to practice, or otherwise develops during the Term; and (b)
any and all "derivative works" (as defined under the United States
Copyright Act) of any works of authorship available for use by
Licensee pursuant to the Licensed Rights under this Agreement that
Licensee and/or any of its Affiliates authors or creates, or contracts
with third parties to author or create, during the Term.
1.3 "INTELLECTUAL PROPERTY RIGHTS" means (a) patents, utility models,
patent applications, and continuing (continuation, divisional, or
continuation-in-part) applications, re-issues, extensions, renewals,
and re-examinations thereof and patents issued thereon ("PATENTS");
(b) registered and unregistered trademarks, service marks, trade
names, domain names, and all of the associated goodwill ("MARKS"); (c)
registered and unregistered copyrights and all other literary and
author's rights ("COPYRIGHTS"); (d) trade secrets, know-how, show-how,
concepts, ideas, methods, processes, designs, discoveries,
improvements, and inventions, whether patentable or unpatentable
("TRADE SECRETS"); (e) all other intellectual, industrial, and
proprietary rights now or hereafter coming into existence throughout
the world; (f) applications for and registrations, renewals, and
extensions of any of the foregoing; and (g) exclusive and
non-exclusive license rights to any of the foregoing. Any and all
Intellectual Property Rights that expire and/or that are finally
determined by court(s) or other government bodies of competent
jurisdiction to be invalid or unenforceable shall thereafter be
excluded from this definition of "Intellectual Property Rights."
1.4 "LICENSED RIGHTS" means any and all Intellectual Property Rights,
sub-licensable or otherwise delegable contract rights, and other
related rights owned or otherwise held by Licensor with respect to the
production, marketing, distribution, and/or sale of meat, fish,
poultry, vegetable, and other food products.
1.5 "LICENSED PRODUCTS" means any and all meat, fish, poultry, vegetable,
and other food products identified on Exhibit A to the Processing
Agreement and all related and derivative food products developed
during the Term by Licensor and/or its Affiliates. A food product
shall be considered a "related" or "derivative" food product if (a)
absent this Agreement, it would infringe or otherwise violate any of
the Licensed Rights; (b) it is made using a process, method, or
machine that, when used absent this Agreement, would infringe or
otherwise violate any of the Licensed Rights; and/or (c) is marketed
or sold using modular kiosks and/or buildings designed by Licensor.
1.6 "LICENSED MARKS" means the registered Xxxx "SMOKY MARKET" and
associated logo(s), the Marks "SMOKE-BAKED," "SouthernQ, BarBQ
Station," "BarBQ2U" and "SMOKE-BAKING," and all other Marks owned by
and licensed to Licensor relating to the production, marketing,
distribution, and/or and sale of meats, fish, poultry, vegetables, and
other food products.
1.7 "PERSON" means any natural person, corporation, partnership, trust,
limited liability company, association, organization, governmental
authority, or other legal entity.
1.8 "PROCESSING AGREEMENT" means that certain Processing Agreement dated
January 10, 2001 between Licensor and May Ann's Specialty Foods, Inc.
(the "PROCESSOR"), as the same may be amended from time to time.
1.9 "SALES" means the gross amounts invoiced by Licensee, its Affiliates,
sublicensees, and/or franchisees on sales of Licensed Products,
without double-counting any invoice amounts for the same products,
minus any amounts refunded or credited back to Affiliates,
sublicensees, franchisees, and customers on returns of Licensed
Products. If a Licensed Product is sold in a single-priced package
with non-Licensed Products, "Sales" of that Licensed Product will be
calculated based on the average Sales amount invoiced for that
Licensed Product on a stand-alone basis during the same quarter or, if
no such Sales took place, at a reasonable amount to be agreed by the
Parties.
1.10 "TERRITORY" means the world.
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2. GRANT OF RIGHTS.
2.1 LICENSES. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee, under the Licensed Rights and any
Improvements, the exclusive right and license in the Territory during
the Term, to: (a) make, have made, use, sell, and import Licensed
Products; (b) make, have made, use, and import machines, tools,
materials, and other instrumentalities, insofar as such machines,
tools, materials, and other instrumentalities are involved in or
incidental to the development or production of Licensed Products; (c)
convey to any customer the right to resell Licensed Products (whether
or not as part of a larger combination); (d) otherwise exercise the
License Rights in the production, marketing, and/or sale of Licensed
Products; (e) sublicense to third parties any or all of the foregoing
rights; and (f) engage in franchising.
2.2 LICENSED MARKS.
2.2.1 Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee the exclusive right and
license in the Territory during the Term, to use the Licensed
Marks to identify, promote, advertise, distribute, sell,
and/or offer to sell Licensed Products and otherwise exercise
Licensee's rights under this Agreement.
2.2.2 All proprietary rights and goodwill in the Licensed Marks
arising from the use of the Licensed Marks pursuant to this
Agreement shall inure to the benefit of and be owned by
Licensor and not the Licensee. Licensee shall acquire no
property rights whatsoever in the Licensed Marks by reason of
its use thereof, and if, by operation of law or otherwise,
Licensee is deemed to, or appears to, own any property rights
in any of the Licensed Marks, Licensee shall, at Licensor's
request and expense, execute any and all documents necessary
to conform or otherwise establish Licensor's rights therein.
2.2.3 Licensee agrees to identify Licensor as the owner of the
Licensed Marks in all written materials using the Licensed
Marks and to comply with all of Licensor's reasonable written
guidelines concerning use of the Licensed Marks and the
quality of Licensed Products bearing the Licensed Marks, to
the extent that Licensee has actual notice of them. Licensee
shall cooperate with Licensor's efforts to monitor compliance
with its standards regarding product quality.
2.2.4 Licensee agrees to provide Licensor with samples or
photographs of each of Licensee's proposed uses of the
Licensed Marks at least ten (10) business days before such use
commences. If Licensor does not provide written notice to
Licensee of Licensor's disapproval of the proposed use within
such period and the reasons for such disapproval, the use will
be deemed approved by Licensor.
2.3 "SMOKY MARKET" WEBSITES. Licensee shall have the right to operate any
and all websites using any and all domain names registered by Licensor
or any of its Affiliates containing the term "Smoky Market" or any of
the other Licensed Marks. If Licensor declines to register a given
domain name containing the term "Smoky Market" or any of the other
Licensed Marks, Licensee may register and use such domain name(s) as
part of its trademark license under this Agreement.
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2.4 MARKETING MATERIALS, RECIPES, AND DESIGNS.
2.4.1 As part of Licensee's rights under this Agreement, Licensee
shall have the right to use and modify during the Term, and
Licensor shall promptly provide to Licensee, any and all
marketing materials, recipes, and designs (including but not
limited to technical designs with respect to ovens) relating
to the Licensed Products, including without limitation
materials that constitute, describe, or otherwise reflect any
Improvements (collectively, the "LICENSED MATERIALS").
2.4.2 To the extent that Licensee creates any "derivative works" (as
defined under the United States Copyright Act) of any Licensed
Materials, Licensee agrees that Licensor (and/or its suppliers
or licensors) shall own all Copyrights in and to such
derivative works. Licensee shall, at Licensor's request and
expense, execute any and all documents necessary to transfer
and assign the Copyrights in such derivative works to their
rightful owner, except that Licensee shall have and retain
(regardless of the termination of this Agreement for any
reason) an exclusive license of all of the Copyrights in and
to any such derivative works to the extent that they reflect
any inventions, whether patentable or unpatentable, conceived,
created, reduced to practice, or otherwise developed by
Licensee.
2.5 SUBLICENSES. For each sublicense or franchise that Licensee grants
pursuant to this Agreement, Licensee shall enter into a written
agreement requiring the sublicensee or franchisee to be bound by and
comply with the pertinent provisions of this Agreement, as
designated by Licensor in writing. Each agreement shall expressly
grant Licensor the right, but not the obligation, to enforce those
provisions against the sublicensee or franchisee. Notwithstanding
the foregoing sentence, Licensee shall be responsible to Licensor
for its sublicensees' and franchisees' compliance with those
provisions, shall notify Licensor of any breaches thereof that come
to the attention of Licensee, and shall make commercially reasonable
efforts to enforce them, subject to Licensor's preeminent right to
protect its Intellectual Property Rights.
2.6 NATURE OF LICENSES. The licenses granted under this Agreement and
Licensor's obligations with respect thereto are intended by the
Parties to constitute the licenses of intellectual property for
purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code.
2.7 NOTICE OF IMPROVEMENTS. Licensor shall provide Licensee prompt,
written notice of any and all Improvements, which shall be included
as part of the Licensed Rights.
2.8 RETAINED RIGHTS. Licensor shall retain a limited right to exercise
and license others to exercise the Licensed Rights, but solely for
purposes of developing Improvements.
3. CONSIDERATION TO LICENSOR.
3.1 LICENSE FEE. As soon as reasonably practicable after execution of
this Agreement, Licensee shall transfer to Licensor 40,000,000
shares of Licensee's common stock as consideration for the Licensed
rights granted to Licensee.
3.2 TAXES. Licensee agrees to pay and bear the liability for all taxes
associated with the production, marketing, distribution, and/or sale
of Licensed Products, including but not limited to sales, use,
excise, added value, and similar taxes, and all customs, duties or
governmental impositions, whether imposed by the government of the
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United States, any state, county, city or municipality, but
excluding taxes on Licensor's net income, capital, or gross
receipts, or any withholding taxes imposed if such withholding tax
is allowed as a credit against United States income taxes of
Licensor. If Licensee is required to withhold any such taxes,
Licensee agrees to furnish Licensor all required documentation
substantiating such withholding.
4. CONDITIONS FOR MAINTAINING EXCLUSIVE NATURE OF LICENSE RIGHTS. Licensee
agrees that, as a condition to maintaining the exclusive nature of its
license rights under this Agreement, Sales of Licensed Products for the
fifth (5th) year of this Agreement shall equal or exceed thirty million
U.S. dollars (US$30,000,000). If Licensee fails to meet that minimum Sales
amount during the fifth (5th) year of this Agreement, or Sales thereafter
fall below that minimum annual amount for any one (1) year, Licensor shall
have the option, on written notice to Licensee, to make Licensee's license
rights under this Agreement non-exclusive for the remainder of the Term.
5. INTELLECTUAL PROPERTY PROTECTION.
5.1 LICENSED RIGHTS. Licensor, at its own expense, shall use all
commercially reasonable efforts to defend and protect the
Intellectual Property Rights associated with the Licensed Rights,
subject to the provisions of this Section 5.
5.2 PATENTS.
5.2.1 PATENT REGISTRATION. Licensor shall have the right, but not
the obligation, to seek patent registration or other
protection under the patent laws of the United States or any
foreign jurisdiction, at its own expense, regarding patentable
Improvements developed by Licensor, its Affiliates, and/or its
contractors. Licensee shall have the right, but not the
obligation, to seek patent registration or otherwise to seek
or maintain protection under the patent laws of the United
States or of any foreign jurisdiction, at its own expense,
with regard to any inventions discovered, conceived, designed,
reduced to practice, or otherwise developed by Licensee or any
individuals employed or otherwise contracted by or on behalf
of Licensee. If, after any appointment of a
trustee-in-bankruptcy or court-appointed receiver of the
assets or business of Licensor, Licensor (or such trustee or
receiver) or its applicable Affiliate does not elect to seek
patent registration or other protection available under United
States law within ninety (90) days of the discovery and/or
development of any Improvement(s) developed by Licensor and/or
any of its Affiliates, or at least sixty (60) days prior to
the running of any provisional application or any period of
protection under the U.S. patent laws, Licensee shall have the
right to pursue such patent protection for the sole benefit
and on behalf of Licensee, and Licensor and its Affiliates
agree to cooperate fully with Licensee's efforts. If Licensor
or any of its Affiliates determines that it will not seek
patent protection for any Improvement(s) with respect to which
it has the right to obtain such protection, Licensor shall
notify Licensee of such determination promptly, and, in any
event, so as not to prejudice Licensee's ability to obtain
such patent protection if Licensee desires in its sole
discretion to seek it, and Licensee shall have the right to
pursue such patent protection for the sole benefit and on
behalf of Licensee.
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5.2.2 PATENT MAINTENANCE. Licensor shall pay all required
maintenance and other fees necessary to maintain the validity
of any Patents included in the Licensed Rights and to
undertake commercially reasonable efforts to defend the
validity and enforceability of such Patents. If Licensor or
any of its Affiliates, as applicable, decides to abandon or
otherwise fails to protect any such Patents, e.g., by not
paying maintenance, not defending a Patent, or otherwise,
Licensor shall first notify Licensee in sufficient time to
enable Licensee to undertake all necessary actions to preserve
and defend such Patents, and Licensee shall have the right but
not the obligation to undertake any such actions, and Licensor
and its Affiliates shall cooperate with Licensee in its
efforts to do so. All amounts expended and obligations
reasonably incurred by Licensee in doing so shall be allowed
by Licensor as a credit against Royalties due under this
Agreement.
5.3 COPYRIGHTS, MARKS, AND TRADE SECRETS. Licensor shall use
commercially reasonable efforts to preserve, maintain, and protect
any Copyrights, Marks, and Trade Secrets included in the Licensed
Rights, including without limitation the making of appropriate
filings with respect to registered Copyrights and registered Marks
and, subject to the provisions of Section 5.2, the protection of the
confidentiality of Trade Secrets. Notwithstanding the foregoing
sentence, Licensor shall not be required to seek registration of any
unregistered Copyrights or Marks where, in Licensor's reasonable
discretion, the benefits outweigh the likely costs of registration.
In all such instances, however, where Licensed Marks or significant
works of authorship are involved, Licensor shall provide Licensee
the opportunity and assistance required to seek registration of such
unregistered Copyrights and Marks pursuant to Section 5.4.
5.4 ADDITIONAL PROTECTION BY LICENSEE. Licensee, at its expense, may in
its sole discretion seek additional protection of Intellectual
Property Rights associated with the Licensed Products and the
exercise of its rights under this Agreement, consistent with the
provisions of this Section 5 and the other provisions of this
Agreement.
5.5 THIRD PARTY INFRINGEMENTS.
5.5.1 If, during the Term, Licensor becomes aware of any
infringement(s) of the Licensed Rights by any third party,
Licensor, at its cost and expense, agrees to use all
commercially reasonable efforts to bring such infringement(s)
to an end. Licensee shall provide all reasonable assistance to
Licensor in these efforts, at Licensor's request and expense.
Any and all monetary settlements and other recoveries obtained
by Licensor in such efforts, after recovering all of
Licensor's associated out-of-pocket expenses, including
without limitation attorneys' fees and court costs, shall be
divided equally between the Parties.
5.5.2 No settlement, consent judgment, or other voluntary final
disposition of a suit or action brought pursuant to Section
5.5.1 may be entered into without Licensee's and Licensor's
express written consent, which shall not be unreasonably
withheld, delayed, or conditioned.
6. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
6.1 REPRESENTATIONS AND WARRANTIES.
6.1.1 LICENSEE. Licensee represents and warrants to Licensor that:
(a) this Agreement has been duly and validly executed and
delivered by Licensee and constitutes the legal, valid and
binding obligation of Licensee; (b) Licensee has full
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authority to execute, deliver, and perform this Agreement; (c)
Licensee's execution, delivery, and performance of this
Agreement will not conflict with or violate (1) any provision
of any law, rule, or regulation to which Licensee is subject,
or (2) any agreement or other instrument applicable to
Licensee or binding upon its assets or properties; (d) none of
the Licensed Products sold and distributed by Licensee, its
sublicensees, and/or its franchisees will be defective; and
(e) that Licensee, its sublicensees, and its franchisees will
place or use appropriate Intellectual Property Rights notices
on all Licensed Products, marketing materials, and other
materials relating to the Licensed Products. As used in this
Section 6.1.1, the term "defective" means that the Licensed
Product (i) is not produced, packaged, labeled, marketed,
distributed, and/or sold in compliance with all applicable
laws, regulations, and government standards; (ii) does not
meet the Licensee's, its sublicensee's, and/or its
franchisee's written descriptions of such Licensed Products;
(iii) does not meet the Licensor's quality standards of which
Licensee has actual notice; and/or (iv) lacks sufficient
quality at the stated price to pass without objection in the
trade.
6.1.2 LICENSOR. Licensor represents and warrants to Licensee that:
(a) except as set forth on Schedule 6.1.2 attached hereto,
Licensor is the owner of the entire right, title, and interest
in and to the Licensed Rights and has not licensed any of them
to any third party; (b) Licensee has obtained any and all
third-party consents necessary to enable Licensor to enter
into this Agreement and to grant the rights granted to
Licensee under this Agreement; (c) Licensor has obtained from
the Processor, Xxxx Ovens, and each of other Person involved
in the development of the Licensed Products or any proprietary
methods associated with producing the License Products
enforceable, written nondisclosure and invention assignment
agreements in a form or forms reasonably acceptable to
Licensee; (d) Licensee's exercise of the Licensed Rights as
authorized herein will not infringe the Patents, Copyrights,
Trade Secrets, Marks, or other Intellectual Property Rights of
any third party; (e) Licensor has explained to Licensee any
and all approvals obtained from, or required by, the United
States Department of Agriculture with respect to the
production, marketing, distribution, and/or sale of the
Licensed Products; (f) after execution of this Agreement,
Licensee shall have the right to produce, market, distribute
and/or sell Licensed Products under the same terms and
conditions as Licensor enjoyed prior to the execution of this
Agreement; (g) this Agreement has been duly and validly
executed and delivered by Licensor and constitutes the legal,
valid and binding obligation of Licensor; (h) Licensor has
full authority to grant the rights granted to Licensee under
this Agreement and to execute, deliver, and perform this
Agreement; and (i) Licensor's execution, delivery and
performance of this Agreement will not conflict with or
violate (1) any provision of any law, rule, or regulation to
which Licensor is subject, or (2) any agreement or other
instrument applicable to Licensor or binding upon its assets
or properties.
6.2 INDEMNITY OBLIGATIONS. Subject to the requirements of Section 63,
each Party will defend, indemnify, and save harmless the other
Party, its successors and permitted assigns, if any, and all of
their officers, directors, employees, Affiliates, and agents, from
and against any and all losses, costs, damages, expenses (including,
without limitation, reasonable attorneys' fees, expert witness fees,
court costs, and other expenses), fines, suits, proceedings, claims,
demands, or actions of any kind or nature (whether based on tort,
contract, trade, regulatory, or other law) ("CLAIMS") brought by any
third party arising from or relating to the indemnifying Party's (a)
breach of any of the representations and/or warranties provided
under this Agreement, and (b) any other breach of this Agreement
(collectively "COVERED CLAIMS"). Any amounts owed by Licensor to
Licensee pursuant to its indemnity obligations under this Agreement
may, at Licensee's option, be netted against any Royalties payable
to Licensor.
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6.3 NOTICE AND ASSISTANCE. Upon receipt of actual notice of any Covered
Claims, the Party entitled to indemnification under Section 6.2
("INDEMNIFIED PARTY") shall (a) promptly notify the other Party
("INDEMNIFYING PARTY") of such claims; (b) allow the Indemnifying
Party to control the defense of such claims, except that the
Indemnified Party shall have the right but not the obligation, at
its sole expense, to have its own legal counsel participate in all
aspects of the proceedings; (c) allow the Indemnifying Party to
settle or compromise such claims, with the consent of the
Indemnified Party, which consent shall not be unreasonably withheld,
delayed, or conditioned, and (d) fully cooperate with the
Indemnifying Party and provide such Party all authority,
information, and assistance (at the Indemnifying Party's request and
expense) that are reasonably necessary for the Indemnifying Party to
defend any such Covered Claims.
7. ADDITIONAL COVENANTS RELATING TO CERTAIN AGREEMENTS. Licensor shall use
its reasonable best efforts (a) to cause the Processor to permit Licensee
to assume all of the rights and future obligations of Licensor under the
Processing Agreement, the oven lease, the distribution center lease, and
all similar and related agreements, and/or (b) to facilitate the
negotiation of superseding agreement(s) to which Licensee is a party.
Prior to any such assumption of rights and future obligations by Licensee
and/or the execution of any such superseding agreement(s), Licensor shall
comply with all of the terms and conditions of such agreements and shall
make any and all of Licensor's rights thereunder available to Licensee in
exchange for Licensee's reimbursement to Licensor of all reasonable
associated costs and Licensee's cooperation in complying with all of the
terms and conditions of such agreements.
8. DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITY.
8.1 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER TO THE
OTHER PARTY, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. ANY
AND ALL SUCH IMPLIED WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED AND
DISCLAIMED TO THE FULLEST EXTENT ALLOWED BY LAW.
8.2 LIMITATION OF DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR ANY CONSEQUENTIAL, EXEMPLARY, PUNITIVE,
INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES OR FOR ANY LOSS OF PROFITS
OR GOODWILL ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THE FOREGOING SHALL APPLY REGARDLESS OF THE NEGLIGENCE OR
OTHER FAULT OF EITHER PARTY AND REGARDLESS OF WHETHER SUCH LIABILITY
SOUNDS IN CONTRACT, NEGLIGENCE, TORT OR ANY OTHER THEORY OF
LIABILITY. THIS SECTION 8.2 SHALL NOT LIMIT IN ANY WAY EITHER
PARTY'S INDEMNITY OBLIGATIONS UNDER SECTION 6 OF THIS AGREEMENT.
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9. TERM AND TERMINATION.
9.1 TERM. Agreement shall become effective on the Effective Date and
shall remain in effect until the date ten (10) years from the first
day of the first quarter that follows the Effective Date and, at
Licensee's option, for four additional renewal periods of ten (10)
years each from that date, unless this Agreement is earlier
terminated in accordance with its provisions. The initial period
plus any renewal periods shall constitute the "TERM." Licensee may
exercise its renewal rights by providing written notice of renewal
at least ninety (90) days before the end of the then-existing Term.
9.2 TERMINATION FOR MATERIAL BREACH. Either Party may, in its sole
discretion, terminate this Agreement if the other Party has
committed a material breach of this Agreement and has failed to cure
such material breach within ninety (90) days after receipt of
written notice from the non-breaching Party specifying the nature of
the breach.
9.3 BANKRUPTCY. Licensor may terminate this Agreement immediately upon
written notice, to the extent allowed by law, if (a) a bankruptcy
petition is filed against Licensee that is not dismissed within
sixty (60) days, or (b) Licensee files a petition for bankruptcy.
9.4 TERMINATION FOR CONVENIENCE. Licensee may, within its discretion,
terminate this Agreement for convenience upon ninety (90) days
written notice to Licensor.
9.5 REMEDIES. In the event of any breach of this Agreement, the
non-breaching Party shall have all rights and remedies provided in
law or equity relating to such breach, including, without
limitation, the right of specific performance and damages, as
appropriate.
9.6 EFFECT OF TERMINATION. Upon termination of this Agreement, all of
the licenses and rights granted to Licensee under this Agreement
shall terminate, except that for a period of 120 days after
termination of this Agreement, Licensee shall have the right to sell
off its inventory of Licensed Products and to make use of the Marks
to do so, subject to all of the applicable terms and conditions of
this Agreement.
10. CONFIDENTIALITY; NON-COMPETITION.
10.1 CONFIDENTIALITY.
10.1.1 During the Term and following termination of this Agreement
for any reason, each Party shall keep confidential the
information of the other Party which, in accordance with the
terms of this Agreement or otherwise, has been learned by,
disclosed to or otherwise provided to such party including,
but not limited to, financial, administrative, accounting,
and personnel information, provided that the disclosing Party
has prominently marked the information "Confidential" or
"Proprietary" ("CONFIDENTIAL INFORMATION"). If the
Confidential Information is disclosed in intangible form
(e.g., orally or visually), it must be identified by the
disclosing Party as "confidential" or "proprietary" at the
time of disclosure and must be followed by written
confirmation delivered to the receiving Party within thirty
(30) days of the original disclosure indicating the date of
disclosure and summarizing the information that the party
considers to be Confidential Information.
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10.1.2 The receiving Party will protect disclosing Party's
Confidential Information with at least the same degree of
care it uses to protect its own proprietary information,
but in no case with less than reasonable care. The
receiving Party will not disclose the disclosing Party's
Confidential Information to any third Party except as
provided for in this Agreement. Licensor shall only use any
Confidential Information of Licensee to exercise Licensor's
rights under this Agreement. Without limiting the
generality of the foregoing statement, Licensor shall not
use any of Licensee's Confidential Information to compete
with Licensee or to enable any other person to compete with
Licensee.
10.1.3 The restrictions contained in Section 10.1.2 shall not
apply to any information that (a) was rightfully known to
the receiving Party without any duty of confidentiality
before receiving it from the disclosing Party; (b) is or
becomes publicly available through no fault of the
receiving Party; (c) is rightfully received by the
receiving Party from a third Party without a duty of
confidentiality; (d) is independently developed by the
receiving Party without a breach of this Agreement; or (e)
is disclosed by the receiving Party with the disclosing
Party's prior written approval. If a Party is required by a
government body, court of law, or other legal authority to
disclose Confidential Information of the other Party, the
Party under the disclosure obligation shall give the other
Party reasonable advance notice and other reasonable
cooperation so that it may contest the disclosure or seek
an appropriate protective order with respect to such
Confidential Information.
10.1.4 Any and all copies made of a Party's Confidential
Information shall be and remain the property of the
disclosing Party. Upon termination of this Agreement for
any reason whatsoever, each Party shall promptly deliver to
the other Party all Confidential Information of such other
Party in such Party's possession or control, except that a
Party main retain one copy solely for archive purposes,
which archive copy shall remain subject to all of the
confidentiality restrictions of this Section 10. The
Parties acknowledge and agree that violation of this
Section 10 may cause irreparable injury, that the remedy at
law for any violation or threatened violation thereof would
be inadequate, and that Party that owns the Confidential
Information shall be entitled to temporary and permanent
injunctive relief or other equitable relief without the
necessity of proving actual damages or posting bond. The
Parties acknowledge that the restrictions contained in this
Section 10 are reasonable. If a court of competent
jurisdiction determines that the restrictions set forth in
this Section 10 are unreasonable, then the Parties agree
that such court is authorized to establish reasonable
restrictions, and the Parties agree to comply with the
restrictions established by such court.
10.1.5 No alleged failure by a Party to protect or guard against
the unauthorized disclosure of the other Party's
Confidential Information shall be a basis for diminishing
such other Party's obligation to protect as confidential
and not to use, copy, reproduce or disclose, or allow
others to use, copy, or disclose, in an unauthorized
manner, the alleged violator's Confidential Information.
10.2 NON-COMPETITION. Licensor shall not sell, distribute, or otherwise
make available, or directly or indirectly assist any other Person
to sell, distribute, or otherwise make available, any product that
competes with any Licensed Product during the Term.
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11. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and
be binding upon the respective successors and permitted assigns, if any,
of the Licensor and the Licensee. Neither Party shall assign any of its
rights or delegate any of its duties under this Agreement to any other
Person, by operation of law or otherwise, without the express written
consent of the other Party, which consent shall not be unreasonably
withheld, delayed, or conditioned.
12. FORCE MAJEURE. Any cause or circumstance of whatever nature which
prevents or delays performance by a Party of its obligations hereunder,
including, without limitation, any riot, labor dispute, strike or civil
disturbance, or any governmental statute, rule, regulation or other or
approval, which cause or circumstance is not within the control of the
Party chargeable, and which cannot by the exercise of reasonable
diligence by such Party be prevented or overcome, shall extend the time
for performance thereof, provided such cause or circumstance was the
proximate cause of the failure to perform.
13. FURTHER ACTION. The Parties agree to execute and deliver all documents,
provide all information and take or forebear from all such action, as may
be necessary or appropriate, to achieve the purposes of this Agreement.
14. NOTICES. All notices and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a) when
delivered personally, (b) when sent by facsimile (with receipt
confirmed), or (c) when receipt by the addressee is confirmed by the U.S.
Postal Service or a nationally-recognized express delivery service, if
sent by Express Mail or nationally-recognized express delivery service
(receipt requested), in each case to the other Party at the Notice
Address and facsimile number (or to such other address or facsimile
number for a Party as shall be specified by like notice; provided that
notices of a change of address or facsimile number shall be effective
only upon actual receipt thereof).
15. SECTION HEADINGS; CONSTRUCTION. The Section headings throughout the
Agreement are for reference purposes only, and the words contained
therein shall in no way be held to explain, modify, or aid in the
interpretation, construction, or meaning of this Agreement. References in
this Agreement to "Section" and "Sections" shall be deemed and construed
to refer to the corresponding sections of this Agreement. As used in this
Agreement, the term "day" alone shall mean a calendar day, and the term
"business day" shall mean any day, other than Saturday and Sunday, during
which banks are open for business in Aptos, California. The term
"quarter" shall mean a calendar quarter beginning on January 1, April 1,
July 1, or October 1, and any reference to a "year" or an "annual" period
or amount refers to the first four calendar quarters of a given year
following the Effective Date or the anniversary of the Effective Date.
This Agreement shall be construed as if each Party has had the
opportunity to participate in drafting it and shall not be construed
against either Party.
16. NO THIRD PARTY BENEFICIARIES. The provisions of the Agreement are for the
benefit of the Parties hereto and not for any creditor of a Party or for
any other Person.
17. MODIFICATION, AMENDMENT, AND WAIVER. No modifications or amendments to
the Agreement and no waiver of any provisions hereof shall be valid
unless made in writing signed by duly authorized representatives of the
Parties. Any failure or delay by either Party to exercise or partially
exercise any right, power or privilege hereunder shall not be deemed a
waiver of any of the rights, powers or privileges under this Agreement.
The waiver by either Party of a breach of any term, condition or
provision of this Agreement shall not operate as, or be construed as, a
waiver of any subsequent breach thereof.
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18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa, without giving effect to
the choice of law provisions thereof.
19. REMEDIES. Except as otherwise provided for herein, no remedy conferred by
any of the specific provisions of the Agreement is intended to be
exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given
hereunder, now or hereafter existing at law or in equity or by statute or
otherwise. The election of any one or more remedies by Licensor or
Licensee shall not constitute a waiver of the right to pursue other
available remedies.
20. SEVERABILITY. If under applicable law any term, provision or part of the
Agreement is to any extent held invalid, void or unenforceable by a court
of competent jurisdiction, the remainder of the Agreement shall not be
impaired or affected thereby, and each term, provision, and part shall
continue in full force and effect, and shall be interpreted in a manner
consistent with the Parties' intent. To the full extent, however, that
the provisions of such applicable law may be waived, however, they are
hereby waived to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with all of its terms. The
Parties further agree to replace any invalid provision with a new
provision that has the most nearly similar permissible, economic, or
other effect.
21. SURVIVAL. Any terms, conditions, representations, and warranties
contained in the Agreement that by their sense and context are intended
to survive the termination of this Agreement shall survive the
termination of this Agreement. Such provisions include, but are not
necessarily limited to, Sections 1, 2.4.2, 6, 8, 9, 10.1, and 11 through
27.
22. ATTORNEYS' FEES. In connection with any action or proceeding arising
under or relating to this Agreement, the prevailing Party is entitled to
recover, in addition to any other amounts awarded, costs and reasonable
attorneys' fees, through all stages of litigation, including all
proceedings and appeals and all settlement, enforcement, and collection
proceedings.
23. DISPUTE RESOLUTION.
23.1 JURISDICTION AND NATURE OF DISPUTE. Any and all disputes arising
under or relating to this Agreement shall be decided by litigation
in a court of competent jurisdiction sitting in the State of
California. The jurisdiction and methods for resolving disputes
set forth herein shall be the sole means for resolving any
disputes arising out of or relating to this Agreement, and the
Parties hereby acknowledge that they are subject to the
jurisdiction of the courts sitting in the State of California and
that they have waived and relinquished the jurisdiction of any
other court.
23.2 WAVIER OF JURY TRIAL. THE PARTIES HEREBY AGREE THAT NEITHER WILL
REQUEST A JURY FOR ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND EXPRESSLY WAIVE ANY AND ALL SUCH RIGHTS TO A JURY
TRIAL THAT MAY EXIST UNDER STATE, FEDERAL, OR CONSTITUTIONAL LAW.
24. RELATIONSHIP OF THE PARTIES. In the performance of this Agreement, both
Parties are acting in their separate capacities as independent
contractors and not as employees, partners, joint venturers, associates,
representatives, or agents of one another. Each Party acknowledges that
it does not have the authority to act for or in the name of the other
Party or to commit the other Party in any manner whatsoever with respect
to the performance of this Agreement.
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25. SECURITIES LAW REPRESENTATIONS. In connection with its receipt of the
shares of Licensee's common stock issuable pursuant to Section 3.1 (the
"Shares"), Licensor hereby represents and warrants to Licensee as
follows:
25.1 REPRESENTATIONS NOT MADE BY COMPANY. Licensor represents and
affirms that none of the following information has ever been
represented, guaranteed or warranted to Licensor, expressly or by
implication, by any person: (i) the approximate or exact length of
time that Licensor will be required to remain a security holder of
Licensee; (ii) the percentage of profit and/or amount of or type
of consideration, profit or loss to be realized, if any, as a
result of an investment in Licensee; or (iii) the possibility that
the past performance or experience on the part of Licensee or any
affiliate, or any officer, director, employee or agent of the
foregoing, might in any way indicate or predict the results of
ownership of any Security or the potential success of Licensee's
operations.
25.2 PURCHASE FOR OWN ACCOUNT. Licensor is the sole and true party in
interest, is acquiring the Shares for its own account for
investment, is not purchasing the Shares for hereby for the
benefit of any other person, and has no present intention of
holding or managing the Shares with others or of selling,
distributing or otherwise disposing of any portion of the Shares.
Licensor is duly organized and in good standing in its
jurisdiction of organization and has its principal place of
business in the State of California.
25.3 DISCLOSURE AND REVIEW OF INFORMATION. Licensor acknowledges and
represents that it has been given a reasonable opportunity to
review all documents, books and records of Licensee pertaining to
this investment, and has been supplied with all additional
information concerning Licensee and the Shares that has been
requested by Licensor, has had a reasonable opportunity to ask
questions of and receive answers from Licensee or its
representatives concerning this investment, and that all such
questions have been answered to the full satisfaction of Licensor.
Licensor has received, and acknowledges that it is receiving, no
representations, written or oral, from Licensee or its officers,
directors, employees, attorneys or agents other than those
contained in this Agreement. In making his/her decision to
purchase the Shares, Licensor has relied solely upon its review of
this Agreement and independent investigations made by it or its
representatives without assistance of Licensee.
25.4 SPECULATIVE INVESTMENT. Licensor understands that (i) it must bear
the economic risk of the investment in the Shares for an
indefinite period of time because the Shares have not been
registered under the Securities Act or qualified under the
Securities Act of 1933, as amended or the securities laws of any
other jurisdiction and (ii) its investment in Licensee represented
by the Shares is highly speculative in nature and is subject to a
high degree of risk of loss in whole or in part. Licensor has
adequate means of providing for its current needs and possible
contingencies, and is able to bear the high degree of economic
risk of this investment, including, but not limited to, the
possibility of the complete loss of Licensor's entire investment
and the limited transferability of the Shares, which may make the
liquidation of this investment impossible for the indefinite
future.
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25.5 INVESTMENT EXPERIENCE. Licensor has experience as an investor in
securities and acknowledges that it can bear the economic risk of
its investment in the Shares. By reason of Licensor's business or
financial experience or the business or financial experience of
its professional advisors who are unaffiliated with and who are
not compensated by Licensee or any affiliate or selling agent of
Licensee, directly or indirectly, Licensor has the capacity to
protect its own interests in connection with its purchase of the
Shares. Licensor has the financial capacity to bear the risk of
this investment and has received from Licensee all information it
has requested and considers necessary or appropriate for deciding
whether to purchase the Shares. Licensor has not been organized
solely for the purpose of acquiring the Shares. The manager of
Licensor is the founder, Chairman and CEO of Licensee.
25.6 RESTRICTED SECURITIES. Licensor understands that the Shares are
and will be "restricted securities" under the Securities Act
inasmuch as they are being acquired from Licensee in a transaction
not involving a public offering, and that, under the Securities
Act and applicable regulations thereunder, such securities may be
resold without registration under the Securities Act only in
certain limited circumstances. In this connection, Licensor
represents that it is familiar with Rule 144 promulgated under the
Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act. Licensor
further confirms and agrees that Licensee is under no obligation
to register the re-sale of the Shares under the Securities Act or
any state securities laws.
25.7 LEGENDS. Licensor understands that the certificates evidencing the
Shares will bear the legend set forth below, together with any
other legends required by the laws any other state with
jurisdiction:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS
AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY
AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION
WITH ANY DISTRIBUTION THEREOF. THESE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STAEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, IS IN EFFECT WITH RESPECT TO
SUCH SECURITIES OR LICENSEE HAS RECEIVED AN
OPINION IN FORM AND SUBSTANCE SATISFACTORY TO
LICENSEE PROVIDING THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OF 1933, AS AMENDED, IS AVAILABLE.
25.8 The legend set forth above shall be removed by Licensee from any
certificate evidencing any of the Shares only (i) upon receipt by
Licensee of an opinion in form and substance satisfactory to
Licensee that such legend may be removed pursuant to Rule 144
promulgated under the Securities Act, or (ii) upon confirmation
that a registration statement under the Securities Act is at that
time in effect with respect to the legended Shares and that such
transfer will not jeopardize the exemption or exemptions from
registration pursuant to which the Share was issued.
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26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the Parties with respect to subject matters hereof, and
supersedes all prior written and oral communications, agreements, letters
of intent, representations, warranties, statements, negotiations,
understandings and proposals, with respect to such subject matters.
27. COUNTERPARTS. Once this Agreement is signed by both Parties, any
reproduction of it made by reliable means (e.g., photocopy or facsimile)
shall be deemed an original. This Agreement may be executed in
counterparts or with detachable signature pages and shall constitute one
and the same Agreement binding on all Parties as if all Parties signed
the same copy. Signature pages may be signed and delivered via facsimile,
mail, or otherwise.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Amended and Restated Exclusive License Agreement as of the Effective Date.
LICENSOR: LICENSEE:
SMOKY SYSTEMS, LLC, SMOKY MARKET FOODS, INC.,
By: /S/ XXXXXX XXXXXXXX By: /S/ XXXXXX XXXXXXXX
------------------- -------------------
Name: ______________________________ Name: ______________________________
Title: _____________________________ Title: _____________________________
Notice Address: ____________________ Notice Address: ____________________
____________________________________ ____________________________________
Attn: ______________________________ Attn: ______________________________
Facsimile: _________________________ Facsimile: _________________________
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