EXHIBIT 10.1
INTELLECTUAL PROPERTY
LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT (this "Agreement"), made and entered into this 12th day of May, 2013 (the "Effective Date"), by and between Innovative Product Consulting, Inc. ("Licensor"), and Nate’s Pancakes, Inc. ("Company") (each, a "Party", and collectively the "Parties"),
ARTICLE I
"Agreement" shall have the meaning set forth in the preamble.
"Effective Date" shall have the meaning set forth in the preamble.
"Intellectual Property" shall mean all intellectual property rights, including United States and foreign patents and patent applications, divisions, continuations, continuations-in-part, reissues, or extensions thereof, trade secrets, know-how and copyrights, trademarks and trademark related rights.
"Licensed Patents" shall mean (a) the patents and patent applications listed on Schedule A hereto, together with any continuations, continuations-in-part, reissues, reexaminations, and foreign counterparts thereof, and (b) any other patents or patent applications that are now owned or controlled by, or licensed to (with the right to grant sublicenses), Licensor, or that become owned or controlled by or licensed to (with the right to grant sublicenses) Licensor prior to the Expiration Event, in each case relating to the sport of tennis.
"Licensed Trademarks" shall mean (a) the trademarks and service marks set forth on Schedule B, all registrations and applications thereof, including, without limitation, the registrations and applications set forth on Schedule B, and any foreign counterparts thereof and (b) any other trademarks and service marks, domain names, trade dress, logos and other source identifiers, including registrations thereof, that are now owned or controlled by, or licensed to (with the right to grant sublicenses), Priceline, or that become owned or controlled by or licensed to (with the right to grant sublicenses) Licensor prior to the Expiration Event, in each case relating to the sport of tennis.
“Net revenue” shall mean revenues (sales), minus returns, discounts, shipping, sales taxes and allowances.
"Other Licensed Intellectual Property" shall mean all patents, know-how, trade secrets, copyrights and other intellectual property including that is now owned or controlled by, or licensed to (with the right to grant sublicenses), Licensor, or that becomes owned or controlled by or licensed to (with the right to grant sublicenses) Licensor, in each case relating to the sport of tennis.
"Party" shall have the meaning set forth in the preamble.
"Person" shall mean an individual, corporation, partnership, Limited Liability Company, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, incorporated organization, governmental authority or any other form of entity.
"Term" shall have the meaning set forth in Section 12.01.
ARTICLE II
ARTICLE III
Year 2: $3,500
Year 3: $4,500
Year 4: $5,500
Year 5: $6,500
Year 6: $7,500
Year 7: $8,500
Year 8: $9,500
Year 9+:12,000
If the required minimum royalty is not paid, Licensor shall have the right to terminate the exclusive nature of this Agreement.
SECTION 3.06. Records. Company shall maintain accurate records and books of account showing all revenue of Company in sufficient detail to enable the royalties payable by Company hereunder to be accurately determined. Unless Licensor is a member, shareholder or partner, or the equivalent, of Company then, upon reasonable notice to Company, Licensor shall have the right to conduct an audit (not more than twice per calendar year), either itself or through an independent accounting firm, of any royalties payable hereunder at any time up to three (3) years after payment of such royalties, and to examine the records and books of account of Company in connection therewith to verify the accuracy of reports and payments required to be delivered to Licensor hereunder. Licensor shall bear the full cost and expense of such audit, unless a discrepancy in excess of twenty percent (20%) in favor of Licensor is discovered, in which event Company shall bear the full cost and expense of such audit. Regardless of the amount of discrepancy, all discrepancies shall be immediately due and payable. Any discrepancy due shall bear interest at the annual rate of the lower of ten percent (10%) or the maximum rate allowed by law, accruing as of the first day such payment became overdue.
ARTICLE IV
SECTION 4.02. Goodwill. All goodwill and improved reputation in respect of the Licensed Trademarks generated by Company's use of the Licensed Trademarks shall inure to the benefit of Licensor. Company shall not by any act or omission use the Licensed Trademarks in any manner that tarnishes, degrades, disparages or reflects adversely on Licensor or its business or reputation. Nothing in this Agreement shall be deemed to (a) give Licensor any right, title or interest in or to Company's trade names, trademarks, or service marks with which Company uses the Licensed Trademarks, (b) give Company any right, title or interest in or to Licensor's trade names, trademarks, or service marks with which Licensor uses the Licensed Trademarks, or (c) give either Party the right to use any trademarks or service marks of the other Party other than the Licensed Trademarks.
ARTICLE V
SECTION 5.04. Right to Inspect. Unless Licensor is a member, shareholder or partner, or the equivalent, of Company then, Licensor shall have the right to inspect, upon reasonable notice and during normal business hours, the premises of Company to the extent reasonably necessary in order to ensure that the quality of goods and services distributed, marketed, or sold under the Licensed Trademarks meet the Service Standards, and solely to the extent that such inspection cannot reasonably be made using information or materials publicly available. Should Licensor notify Company that any of its business activities do not comply with the Service Standards, Company shall promptly make commercially reasonable efforts to correct such defects.
ARTICLE VI
ADVERTISING AND PROMOTIONAL MATERIALS
SECTION 6.01. Advertising and Promotional Materials. Company shall submit all sales, promotional and advertising materials to be used by Company in connection with products or services bearing Licensed Trademarks, including, but not limited to, web site content (including web site advertising), newspaper, and radio and television advertising, to Licensor for prior approval thereof, which approval shall not be unreasonably withheld. In the event Licensor's approval or rejection of such sales, promotional, or advertising materials is not received by Company within fifteen (15) days of submission of such materials to Licensor for approval, such materials shall be deemed approved by Licensor; provided, however, that Licensor may, at its discretion and upon written notice to Company, terminate this provision pursuant to which such materials are deemed approved if approval or rejection is not received by Company within fifteen (15) days of submission.
ARTICLE VII
SECTION 7.02. Action Against Infringer. Licensor shall have the first right, but not the obligation, to take action against others in the courts, administrative agencies or otherwise, at Licensor's cost and expense, to prevent or terminate infringement, misappropriation, imitation, illegal use or misuse of the Licensed Trademarks, Licensed Patents, and Other Licensed Intellectual Property, and to oppose or cancel applications or registrations of trademarks, service marks, trade dress, characters and designs that do or may conflict with any of the Licensed Trademarks. Company agrees to cooperate with Licensor in any litigation or other enforcement action that Licensor may undertake to enforce or protect the Licensed Trademarks, Licensed Patents, and Other Licensed Intellectual Property and, upon Licensor's request, to execute, file and deliver all documents and proof necessary for such purpose, including being named as a party to such litigation as required by law. All reasonable out-of-pocket expenses incurred by Company in connection therewith shall be reimbursed by Licensor. Company shall have the right to participate and be represented in any such action, suit or proceeding by its own counsel at its own expense. Company shall have no claim of any kind against Licensor based on or arising out of Licensor's handling of or decisions concerning any such action, suit, proceeding, settlement, or compromise, and Company hereby irrevocably releases Licensor from any such claim, provided, however, that Licensor shall not enter into any settlement or compromise of such action, suit or proceeding that affects or concerns the validity, enforceability, or ownership of any Licensed Trademarks, Licensed Patents, or the Other Licensed Intellectual Property without the prior written consent of Company, which consent shall not be unreasonably withheld.
SECTION 7.03. Enforcement by Company. Licensor shall promptly notify Company in the event it elects not to take action under the terms of Section 7.02. Company shall thereafter have the option to commence any such action against others in the under its own direction and control, and at its cost and expense. Licensor shall reasonably assist Company in such action if so requested, and shall be named a party to such action if requested by Company or required by law. Licensor shall have the right to participate and be represented in any such action, suit or proceeding by its own counsel at its own expense. Licensor shall have no claim of any kind against Company based on or arising out of Company's handling of or decisions concerning any such action, suit, proceeding, settlement, or compromise, and Licensor hereby irrevocably releases Company from any such claim, provided that Company shall not enter into any settlement or compromise of such action, suit or proceeding that affects or concerns the validity, enforceability (except in respect of granting immunity from suit in connection with such settlement or compromise) or ownership of any Licensed Trademarks, Licensed Patents or Other Licensed Property in the Licensor Field or the New Merchandise Field without the prior written consent of Licensor, which consent shall be at Licensor's sole discretion. Company may discontinue such action, suit or proceeding if in its sole discretion it determines that such action, suit or proceeding is not advantageous to Company.
SECTION 7.05. Recoveries. All damages or other compensation of any kind recovered in such action, suit, or proceeding or from any settlement or compromise brought under this Article VII shall be for the benefit of the Party that brought such action, suit, or proceeding, or in the event of a withdrawal by a Party under Section 7.04 hereof, shall be apportioned between the Parties in an amount proportional to the amount paid by each such Party with respect to its costs and expenses in bringing such action, suit, or proceeding; provided, however, that to the extent that damages or compensation recovered by one Party are based on revenues or profits lost by the other Party, such other Party shall be entitled to its pro rata share of such damages or compensation.
ARTICLE VIII
ARTICLE IX
RESERVED
ARTICLE X
REPRESENTATIONS AND WARRANTIES
(a) Organization and Authority. Licensor is a corporation duly organized, validly existing and in good standing and has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. Licensor is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not materially and adversely affect Licensor's assets, liabilities or results of operations or prevent or materially delay the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Licensor, the performance by it of its obligations hereunder and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite action on its part. This Agreement has been duly executed and delivered by Licensor, and (assuming due authorization, execution and delivery by the other Person signatory hereto) this Agreement constitutes a legal, valid and binding obligation of Licensor enforceable against it in accordance with its terms.
(b) No Conflict. The execution, delivery and performance of this Agreement by Licensor do not and will not (i) violate, conflict with or result in the breach of any provision of its Certificate of Incorporation or By-laws, (ii) conflict with or violate any law, governmental regulation or governmental order applicable to Licensor or any of its assets, properties or businesses or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights pursuant to, any contract, agreement or arrangement by which Licensor is bound; except to the extent that any conflict under (ii) or (iii) above would not prevent or materially delay the consummation of the transactions contemplated by this Agreement.
(e) Actions. Except as listed on Schedule C hereto, no actions have been asserted or are pending, nor, to the knowledge of Licensor, has any such action been threatened, against Licensor either (i) challenging or seeking to deny or restrict the use by Licensor of any of the Licensed Trademarks, Licensed Patents, or Other Licensed Intellectual Property, or (ii) alleging that the use of the Licensed Trademarks, Licensed Patents, or Other Licensed Intellectual Property by Licensor does or may conflict with, misappropriate or infringe the intellectual property rights of any third party.
(a) Organization and Authority. Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Indiana and has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not materially and adversely affect Company's assets, liabilities or results of operations or prevent or materially delay the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Company, the performance by it of its obligations hereunder and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite action on its part. This Agreement has been duly executed and delivered by Company, and (assuming due authorization, execution and delivery by the other Person signatory hereto) this Agreement constitutes a legal, valid and binding obligation of Company enforceable against it in accordance with its terms.
(b) No Conflict. The execution, delivery and performance of this Agreement by Company do not and will not (i) violate, conflict with or result in the breach of any provision of its Certificate of Incorporation or By-laws, (ii) conflict with or violate any law, governmental regulation or governmental order applicable to Company or any of its assets, properties or businesses or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights pursuant to, any contract, agreement or arrangement by which Licensor is bound; except to the extent that any conflict under (ii) or (iii) above would not prevent or materially delay the consummation of the transactions contemplated by this Agreement.
ARTICLE XI
SECTION 11.01. Indemnification by Company. Company agrees to defend, indemnify, and hold Licensor and its Affiliates and the respective directors, officers, employees, and agents of Licensor harmless from and against any and all losses, debts, liabilities, claims, demands, causes of action and expenses (including attorney's fees and deposition and discovery expenses) arising out of or resulting from (a) the breach by Company of any of its representations, warranties, covenants and agreements contained within this Agreement, or (b) the carrying on of Company's business other than those losses that would constitute a breach of Licensor's representations and warranties set forth herein.
SECTION 11.03. Indemnification Process. In respect of any claim, suit or demand by any third party ("Third Party Claim") arising from or relating to unauthorized acts or breaches of the terms of this Agreement, Company and Licensor (each, an "Indemnified Party") shall give the Party hereto from whom indemnification is sought (the "Indemnifying Party") prompt written notice of any Third Party Claim of which such Indemnified Party has knowledge concerning any losses as to which such Indemnified Party may request indemnification hereunder. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnified Party within five (5) days of the receipt of such notice from the Indemnified Party; provided that if there exists or is reasonably likely to exist a conflict or interest that would make it inappropriate in the judgment of the Indemnified Party, in its sole and absolute discretion, for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel, at the expense of the Indemnifying Party. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnified Party's expense, all such witnesses, records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party. No such Third Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnified Party.
ARTICLE XII
For example, if the Net Revenues from the Intellectual Property covered by this License was $7,500,000 then the buy-out amount would be $7,500,000; however, if the Net Revenues from the Intellectual Property covered by this License was $2,500,000 then the buy-out amount would be $5,000,000
SECTION 12.03. Reserved.
SECTION 12.06. Upon Termination of Trademark Licenses. Upon termination of this Agreement or the trademark licenses granted under Section 2.02, Company shall immediately cease and desist all uses of the Licensed Trademarks, and will promptly, at its option, either destroy all materials and signage bearing any Licensed Trademarks or will deliver to Licensor all such materials and signage. Company shall thereafter make no reference in its advertising or promotional materials as having been formerly associated with or licensed by Licensor. Company will not subsequently adopt or use any trademark, service xxxx, trade name, domain name, trade dress, logo or other source identifier which is derived from or confusingly similar to any Licensed Trademark. Licensor shall thereafter make no reference in its advertising or promotional materials as having been formerly associated with or licensed by Company. Licensor will not subsequently adopt or use any trademark, service xxxx, trade name, domain name, trade dress, logo or other source identifier which is derived from or confusingly similar to any trademark, service xxxx, domain name, trade dress, logos or other source identifier owned or controlled by Company.
ARTICLE XIII
(a) if to Company:
Telecopy No.:
Attention:
(b) if to Licensor:
Telecopy No.:
Attention:
SECTION 13.10. Governing Law. This Agreement shall be governed by the laws of the State of California. All actions and proceedings arising out of or relating to this Agreement may be heard and determined in any state or federal court sitting in the County of Orange, and the Parties hereto hereby irrevocably submit to the nonexclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive any defense of an inconvenient forum to the maintenance of any such action or proceeding.
SECTION 13.13. RESERVED
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Schedule A
None.
Schedule B
Trademark No: 86096722: Nate’s Pancakes
Domain: xxx.xxxxxxxxxxxxx.xxx
Schedule C
Schedule D
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