- (i) by either party for a material breach of any provision of this agreement by the other party, if the other party's material breach is not cured within days of receipt of written notice of the breach;
- (ii) By the Licensor at any time and without prior notice, if:
- A. the Licensee attempts to assign, sublicense, transfer, or otherwise convey, without obtaining the
- Licensor's prior written consent, any of the rights granted to the Licensee by or in connection with
- this agreement;
- B. the Licensee fails to obtain the Licensor's approval of the Licensee's use of the Marks in
- accordance with section below;
- C. the Licensee discontinues the manufacture and sale of the Licensed Products or Services for a
- period of consecutive months after the effective date described in section ;
- D. the Licensee uses the Marks in a manner that violates, or is otherwise inconsistent with, the
- restrictions imposed by section below; or
- E. the Licensee uses the Marks in a manner not expressly permitted by this agreement.
5. CONSIDERATION.
The Licensee shall pay the Licensor each month quarterly annually in consideration for the rights of the Licensee in and to the Marks granted under this agreement.
- (a) License Issue Fee. On or before the effective date described in section , the Licensee shall pay to the Licensor a nonrefundable fee of (the "License Issue Fee"). The License Issue Fee is not an advance toward royalties that may become due during any calendar quarter of the Term and the Licensee may not deduct the amount of the License Issue Fee from royalties that may become due from the sale of Licensed Products or Services.
- (b) Royalties. In addition to the License Issue Fee, the Licensee shall pay to the Licensor a continuing royalty of percent of Gross Sales of all Licensed Products or Services sold by the Licensee or of its subsidiaries, divisions, or affiliates. As used in this agreement, "Gross Sales" means the Licensee's billing price to customers or distributors, including the royalty amount but less:
- (i) customary trade discounts actually given;
- (ii) returns; and
- (iii) transportation charges on returns.
6. MAINTENANCE OF RECORDS AND AUDIT RIGHTS.
- (a) Books and Records. The Licensee shall keep accurate books of account and records covering all transactions relating to this agreement. The Licensee will permit the Licensor and its nominees, employees, accountants, agents, and representatives to (i) have reasonable access to inspect those books and records during normal business hours on reasonable notice, and (ii) to examine those books and records. The Licensee shall maintain these books and records in good order and condition for a period of years after the termination of this agreement or, if there is a dispute between the parties, until that dispute is resolved, whichever is latest. Receipt or acceptance by the Licensor of any sums paid by the Licensee will not preclude the Licensor from exercising its rights under this agreement.
- (b) Underpayment of Royalties. If an inspection or examination referred to in subsection (a) above discloses, or a party otherwise discovers, an underpayment of royalties or other fees, the Licensee shall pay to the Licensor the amount of that underpayment (plus interest on it from the date of underpayment to and including the date of payment in full at %) not more than days after its discovery.
- (c) Overpayment of Royalties. If an inspection or examination referred to in subsection (a) above discloses, or a party otherwise discovers, an overpayment of royalties or other fees, the amount of that overpayment will be credited against future payments owed by the Licensee. If the period for which the overpayment was made is the final period covered by this agreement, the Licensor shall pay the overpayment amount to the Licensee within days after its discovery.
7. OWNERSHIP AND USE OF MARKS.
- (a) Ownership of Marks. The Licensee acknowledges that the Licensor is the owner of the Marks and all rights in those and that nothing in this agreement gives the Licensee an interest in the Marks, except under the license granted by this agreement. The Licensee further acknowledges that the rights granted to the Licensee by this agreement are license rights only, and nothing contained in this agreement constitutes an assignment of the Licensor's rights in the Marks.
- (b) Limitation on Licensee's Actions. The Licensee may not do anything inconsistent with the Licensor's ownership of the Marks, and may not claim adversely to the Licensor, or assist any third party in attempting to claim adversely to the Licensor, with regards to that ownership. The Licensee may not challenge the Licensor's title to the Marks, oppose any registration or re-registrations of the Marks, or challenge the validity of this agreement or the licenses granted in this agreement. Furthermore, the Licensee may not register or attempt to register any trade name or trademark that, in whole or in part, incorporates or is confusingly similar to the Marks.
- (c) Assistance in Protecting Goodwill. The Licensee's use of the Marks inures to the benefit of the Licensor and the Licensee shall cooperate fully with the Licensor to secure and maintain the goodwill of the Licensor in the Marks. To that end, the Licensee may not misuse the Marks, take any action that would bring the Marks into public disrepute, use the Marks, or any mark or name confusingly similar to them, in its corporate or trade name, or take any action that would tend to destroy or diminish the goodwill in the Marks.
- (d) Notification of Infringement. The Licensee shall promptly notify the Licensor of:
- (i) any claim, demand, or cause of action based on or arising from any third-party unauthorized use of the Marks or any confusingly similar marks;
- (ii) any infringement or instance of unfair competition of which the Licensee may become aware involving any of the Marks; or
- (iii) any challenge to the Licensee's use of any of the Marks.
However, the Licensee may not institute any proceedings for infringement of the Marks without the prior written approval of the Licensor.
8. QUALITY STANDARDS.
- (a) Established Standards. The nature and quality of all products sampled, sold, or otherwise disposed of by the Licensee and covered by the Marks will conform to the standards established by and under the control of the Licensor (collectively, the "Quality Standards"). The Quality Standards will be reasonable, no greater than the quality standards imposed by the Licensee's customers generally, and at least equal in quality to the products (in the aggregate) sold by the Licensee before the effective date described in section .
- (b) Review of Associated Products. At the Licensor's reasonable request, the Licensee shall provide samples to the Licensor of all products sampled, sold, or otherwise disposed of by the Licensee that include the Marks. Alternatively, the Licensor may request that the Licensee ensure that those products conform to the Quality Standards. To this end, the Licensee shall permit reasonable inspection of its facilities during business hours by an authorized representative of the Licensor, for that representative to inspect the Licensee's operations, methods of manufacture, materials used, storage and packing areas, and the like, associated with the manufacture of products that include the Marks. Any inspections conducted by the Licensor to ensure that the Quality Standards have been satisfied will be at the expense of the Licensor.
- (c) Representative Samples Required. On the Licensor's request and without charge to the Licensor, the Licensee shall deliver to the Licensor representative samples of labels, containers, advertisements, catalogs, letterhead, and the like, containing the Marks to enable the Licensor to ensure that those Marks are used only in a manner set forth on Schedule 1.
- (d) Other Specifications. The Licensor may impose on the Licensee, as necessary, other specifications or requirements not provided for under this section to maintain control over the Licensee Business to ensure the requisite Quality Standards with respect to products manufactured by the Licensee that include the Marks.
9. MARKING ON PRODUCTS.
- (a) Designation that Marks are Licensed. The Licensee shall designate the Licensed Products or Services in the manner specified by the Licensor in writing, to indicate the rights of the Licensor in the Marks, including the registration status of the Marks, and that those products or services are manufactured under license.
- (b) Proper Notice and Acknowledgment. Every use of the Marks by the Licensee shall incorporate in an appropriate manner an "R" enclosed by a circle or the phrase "Reg. U.S. Pat. & Tm Off."
- (c) Format and Appearance. The Licensor retains the right to specify, from time to time, the format in which the Licensee may use and display the Marks, and the Licensee shall use or display the Marks only in formats approved by the Licensor. The Licensee may not use any colorable imitation of the Marks, or any variant form (including variant design forms, logos, colors, or type styles) of the Marks not specifically approved by the Licensor.
10. LICENSOR'S REPRESENTATIONS.
The Licensor hereby represents to the Licensee that it:
- (a) is the exclusive licensor of interest in the Marks;
- (b) has not assigned or transferred the Marks or agreed to do so;
- (c) has full power and authority to enter into this agreement and to make the grant of license provided in section 1;
- (d) is not aware of any violation, infringement, or misappropriation of any third party's rights (or any claim thereof) by the Marks;
- (e) is not aware of any third-party consents, assignments, or licenses that are necessary to perform under this agreement;
- (f) was not acting within the scope of employment of any third party when conceiving, creating, or otherwise performing any activity with respect to the Marks listed in Schedule 1 and purportedly licensed in section 1.
The Licensor shall immediately notify the Licensee in writing if any facts or circumstances arise that would make any of the representations in this agreement inaccurate.
11. LICENSEE'S REPRESENTATIONS.
The Licensee hereby represents to the Licensor that it:
- (a) has full power and authority to enter into this agreement; and
- (b) has sufficient resources to complete the transaction contemplated by this agreement and the authority to commit those resources for the purposes of this transaction.
The Licensee shall immediately notify the Licensor in writing if any facts or circumstances arise that would make any of the representations in this agreement inaccurate.
12. DOCUMENTATION.
- (a) Recordation of Agreement. As soon as is reasonably possible following a request from the Licensee, the Licensor shall provide the Licensor with a complete copy of all documentation (in any format) relating to the Marks for the Licensee's own use, to meet record-keeping requirements of the Licensee, or to allow the Licensee to exercise its rights granted under this agreement. The Licensor shall also, on request:
- (i) execute and deliver to the Licensee any additional papers, including any separate licenses of the Marks, reasonably necessary to record the license in the United States and throughout the world ; and
- (ii) generally do all other lawful acts reasonable and necessary to record the agreement in the United States and throughout the world .
13. INDEMNIFICATION.
The Licensor shall indemnify the Licensee against: If any of the Marks infringe on any United States trademark or trade secret of a third party not affiliated with the Licensee, the Licensor shall indemnify the Licensee against that claim, if all of the following are true:
- (a) any claim by a third party that any of the Marks or their use or reproduction infringes or misappropriates any trademark, trade secret, or other intellectual property; (a) the Licensee promptly gives notice of the claim to the Licensor;
- (b) any claim by a third party that this agreement conflicts with, violates, or breaches any contract, assignment, license, sublicense, security interest, encumbrance, or other obligation to which the Licensor is a party or of which it has knowledge; (b) the Licensor controls the defense and settlement of the claim;
- (c) any claim relating to any past, present, or future use, licensing, sublicensing, distribution, marketing, disclosure, or commercialization of any of the Marks by the Licensor; and (c) the Licensee fully cooperates with the Licensor in connection with its defense and settlement of the claim; and
- (d) any litigation, arbitration, judgment, award, attorneys' fees, liability, settlement, damage, loss, and expense relating to (a), (b), or (c) above. (d) the Licensee stops all sales, distribution, and public use of or relating to the infringing Marks, if requested by the Licensor.
If the Licensee is enjoined from further use of any infringing Mark or if the Licensee stops using any of the Marks pursuant to the Licensor's request (as described in (d) above), the Licensor shall, at its own expense and option:
- (a) obtain the right for the Licensee to continue to use the infringing Marks;
- (b) modify the infringing Marks to eliminate the infringement (if practicable);
- (c) provide substitute noninfringing Marks to the Licensee pursuant to this agreement (if practicable); or
- (d) refund the amount paid under this agreement for the infringing Marks to the Licensee, on such terms and conditions as the parties may thereafter agree.
The Licensor will have no other obligations or liability if infringement occurs, and will have no other obligation of indemnification relating to infringement. The Licensor will not be liable for any costs or expenses incurred without its prior written authorization and will have no obligation of indemnification or any liability if the infringement is based on (i) any modified form of the Marks not made by the Licensor or (ii) the laws of any country other than the United States or its states.
14. NO AGENCY RELATIONSHIP.
This agreement creates a licensor-licensee relationship between the parties. Nothing in this agreement may be construed to establish a joint venture, agency, or partnership relationship between the parties.
15. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any of its rights under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
16. GOVERNING LAW.
- (a) Choice of Law. The laws of the state of govern this agreement (without giving effect to its conflicts of law principles).
- (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .
17. AMENDMENTS.
No amendment to this agreement will be effective unless it is in writing and signed by both parties or an authorized representative.
18. NOTICE.
Any notice or other communication provided for in or given under this agreement to a party will be in writing and given in person, by overnight courier, or by mail (registered or certified mail, postage prepaid, return-receipt requested) to the respective parties as follows:
- If to the Licensor:
- If to the Licensee:
19. SEVERABILITY.
If any provision contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable.
20. WAIVER.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
21. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
22. HEADINGS.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
23. EFFECTIVENESS.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
24. NECESSARY ACTS; FURTHER ASSURANCES.
Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
[SIGNATURE PAGE FOLLOWS]
Each party is signing this agreement on the date stated opposite that party's signature.
[PAGE BREAK HERE]
SCHEDULE 1
LIST OF TRADEMARKS AND SERVICE MARKSadd border TRADEMARK/
SERVICE MARKSREGISTRATION/
APPLICATION NUMBERDATE OF FILING/
REGISTRATION[PAGE BREAK HERE]
SCHEDULE 2
LICENSED PRODUCTS AND SERVICES