Last updated August 18, 2020
This Merchandise License Agreement (the “ Agreement”) , is made as of (the “ Effective Date ”), between High Note Collective, (“ Licensee ”) and (“Licensor”) on the following terms and conditions:
1. Definitions . For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:
(a) “ Licensed Trademarks ” shall mean the trademarks, service marks, logos, and other distinctive brand elements of Licensor listed on Exhibit A , including without limitation, the registrations and applications therefore.
(b) “ Licensed Business ” shall mean the business described on Exhibit B to this Agreement.
(c) “ License Period ” shall mean the period beginning on the Effective Date and ending on the date this
Agreement is terminated in accordance with Section 10 below.
(d) “ Licensed Territory ” shall mean the World.
(e) “ Licensed Products ” shall mean the products and/or services to be sold by Licensee, as part of the Licensed Business, under the Licensed Trademarks in accordance with this Agreement.
(a) License Grant . Subject to the terms and conditions of this Agreement, Licensor grants to Licensee a transferable, sublicensable non-exclusive right and license, during the License Period, to use and reproduce the Licensed Trademarks in the course of operating and promoting the Licensed Business solely within the Licensed Territory.
3. Quality Standards and Control; Required Notices .
(a) Conduct of Licensed Business . Licensee will at all times conduct the Licensed Business in compliance with all applicable laws, and will observe good standards of quality and fair dealing with its customers. Licensee agrees to submit to Licensor samples, at Licensor’s expense, any tangible uses of the Licensed Trademarks from time to time as Licensor may reasonably request, for such additional review as Licensor may deem desirable.
(b) Effect of Noncompliance . If Licensee does not adhere to the quality requirements specified or approved by Licensor for the Licensed Business or the use of the Licensed Trademarks, and fails to rectify the non-adherence within a reasonable time of receiving a written notice from Licensor, Licensee will be deemed to be in breach of this Agreement and the operation of this Agreement with respect to Licensee’s permitted use of the Licensed Trademarks shall be suspended and the labeling, packaging, and advertising and promotional materials therefor, without limiting the right of Licensor to terminate this Agreement in accordance with Section 10(a).
4. Consideration .
(a) Royalties . The percentage royalties set forth in Exhibit C shall be paid by Licensee to Licensor on all Licensed Products sold based upon Licensee’s Gross Profit (as defined in Exhibit C ) for such Licensed Products.
(b) Payment Terms . Percentage royalties are due at the close of each calendar quarter (March 31, June 30, September 30, December 31); calendar year; anniversary of the Effective Date and payable not later than thirty (30) days thereafter in accordance with the provisions of Section 5 below.
5. Statements and Payments .
(a) Statements . Licensee shall provide Licensor, within thirty (30) days after the end of each calendar quarter (March 31st, June 30th, September 30th and December 31st) following the Effective Date, a complete and accurate written statement (a “ Statement ”) certified by a financial officer of Licensee showing the quantity, model or description, and Net Sales Price of the Licensed Products sold by Licensee during the preceding calendar quarter. The Statement shall also include information as to any quantity discounts given and returns actually credited by Licensee, a computation of the royalties due, the currency exchange rate applied, receipts for withholding taxes paid (as permitted by Section 5(c)), and the corresponding percentage royalty payment.
(b) Currency . All payments under this Agreement shall be in United States currency.
(c) Deductions; Taxes . No deductions shall be made by Licensee for discounts, other than quantity discounts, for commissions, for uncollectible accounts, cost of goods sold, or for taxes, fees, assessments, impositions, payments or expenses of any kind, except for income or profits taxes assessed or imposed upon royalties due Licensor under this Agreement (referred to herein as “ withholding taxes ”). Any withholding taxes shall be deducted from the payment due, before remittance to Licensor, and paid to the appropriate tax authority on behalf of Licensor.
(d) Payments after Termination . Any payments and Statements due after termination of this Agreement for payments accrued and payable to Licensor before termination or expiration of this Agreement shall remain due and payable after such expiration or termination.
(e) Approval . Licensee shall be responsible for obtaining all required recordations and approvals of this Agreement by authorities in the Licensed Territory and to obtain the consent of any such authorities to the remittance of payments to Licensor under this Agreement if such consents or approvals are or become necessary in Licensor’s sole determination.
(f) Payments and Statements . All Statements shall be delivered, and payments under this Agreement shall be paid, in accordance to the terms and conditions of this Agreement, to:
(a) Audit Rights . Licensee shall keep and permit to be examined by Licensor or its representatives during normal business hours for the period of this Agreement, including extensions, and for three (3) years thereafter, books and records containing complete and accurate data, which may be extracted and copied, to enable determination of the amounts payable and information to be supplied and other such particulars as may be reasonably required by Licensor to determine Licensee’s operation under this Agreement.
(b) Effect of Discrepancy . In the event that any such inspection pursuant to Section 6(a) hereto reveals a discrepancy in the amount of royalty owed Licensor from what was actually paid, Licensee shall promptly pay to Licensor such discrepancy, plus interest calculated at the rate of one and one-half percent (11⁄2%) per month. In the event that such discrepancy is in excess of (5%), Licensee shall also reimburse Licensor for the cost of such inspection.
7. Use and Enforcement of Licensed Trademarks .
(a) Licensee Obligations . Licensee agrees not to contest or otherwise challenge or attack Licensor’s rights in the Licensed Trademarks or the validity of the Licensed Trademarks or the license granted herein during the License Period and thereafter. Licensee further agrees not to do anything either by act of omission or commission which might impair, jeopardize, violate, or infringe the Licensed Trademarks, or to misuse or bring into dispute the Licensed Trademarks or otherwise diminish Licensor’s goodwill with respect to the Licensed Trademarks. Licensee shall not use any of the Licensed Trademarks as part of its company name, corporate name or trade name, and shall not attempt to register any of the Licensed Trademarks or similar marks in the Licensed Territory or elsewhere during the term of this Agreement or thereafter, or aid or abet anyone else in doing so.
(b) Defense of Trademarks . The administrative and judicial defense of the Licensed Trademarks in the Licensed Territory shall be undertaken solely by Licensor, at Licensor’s sole discretion and expense. Licensee agrees to furnish Licensor or its designated legal representative with all proof and commercial, technical or other information or assistance which Licensee is able to furnish, as well as such other assistance as Licensor or its lawyers may reasonably request for this purpose. Licensee shall, if requested by Licensor, join Licensor in the aforementioned administrative and judicial defense of the Licensed Trademarks, the cost of which shall be borne exclusively by Licensor. Licensor shall be entitled to receive and retain all settlement proceeds and amounts awarded as damages, profits, or otherwise in connection with such litigation, actions, and disputes.
(c) Licensor’s Remedies . If Licensor, in the exercise of its reasonable business judgment, does not deem it advisable to take action to defend or enforce the Licensed Trademarks with respect to the Licensed Business or closely related business, and Licensee does not agree with Licensor’s decision not to take action, Licensee shall have the option, at its sole cost, of investigating, defending, and taking steps to protect the Licensed Trademarks for such goods and services, including the filing and prosecution of litigation, and opposing applications for registration of any marks that it believes would violate Licensor’s rights in the Licensed Trademarks. In that event, Licensor agrees to provide reasonable cooperation in any such investigations and actions, and Licensee agrees to keep Licensor continuously advised of the status of such investigations and actions. Licensee shall be entitled to receive and retain all settlement proceeds and amounts awarded as damages, profits, or otherwise in connection with such litigation, actions, and disputes.
8. Ownership of Intellectual Property Rights . Licensee shall be the sole and exclusive owner of all right, title and interest of the creative, design and styles of all merchandise developed under this agreement.
9. Independent Contractor . Nothing in this Agreement shall constitute Licensee as the agent, representative, partner, servant or employee of Licensor, and Licensee acknowledges and agrees that it is an independent contractor with no power, express or implied, to bind Licensor in any manner or to make representations regarding any matter except as agreed by Licensor in writing.
10. Indemnity .
(a) Indemnification by Licensee . Licensee agrees to defend, indemnify and hold Licensor and/or any of its affiliates, subsidiaries, agents and assignees harmless against any and all claims, demands, causes of action, liability, loss, damage, judgments or expenses (including without limitation reasonable attorneys’ fees, expenses and court costs) (collectively, “ Claims ”) arising out of Licensee’s design, manufacture, distribution, shipment, labeling, sale, distribution, advertisement, or promotion of the Licensed Products or the labeling, packaging, advertising and promotional materials for the Licensed Products, including (without limitation) any Claim for personal injury, wrongful death or any similar matter. Licensor shall have the right to defend any such claim or suit through counsel of its own choice. This Section 9(a) will survive any termination or expiration of this Agreement.
(b) Indemnification by Licensor . Licensor agrees to defend, indemnify and hold Licensee and/or any of its affiliates, subsidiaries, agents and assignees harmless against any and all Claims arising from Licensee’s use of the Licensed Trademarks in accordance with the terms of this Agreement; provided , however , that Licensee: (i) provides Licensor with prompt notice of such claim; (ii) fully cooperated in the defense of such claim; (iii) does not settle or enter into any negotiations relating to such claim. Licensor shall have the right to defend any such claim or suit through counsel of its own choice. This Section 9(b) will survive any termination or expiration of this Agreement.
11. Term and Termination .
(a) Term . This Agreement shall remain effective for Ten (10) years from the Effective Date of this Agreement (“Initial Term”). The Term shall automatically renew for subsequent periods of the same length as the initial Term unless either party gives the other written notice of termination at least thirty (30) days prior to expiration of the then-current Term.
(b) Termination for Cause . If either party materially defaults in the performance of any provision of this Agreement, and such default is not cured within thirty (30) days after the other party gives notice of such default, then such other party shall be entitled to terminate the Agreement immediately upon giving written notice of termination to the defaulting party.
(c) Termination for Insolvency and Related Events . Licensor may terminate this Agreement immediately upon delivery of written notice to Licensee (i) upon the institution by or against Licensee of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of Licensor’s debts, (ii) upon Licensee’s making an assignment for the benefit of creditors, or (iii) upon Licensee’s dissolution or ceasing to do business; provided , with respect to involuntary proceedings, that such proceedings are not dismissed within 60 days.
(d) Effect of Termination . Immediately upon termination or expiration of this Agreement, Licensee shall cease any new manufacturing of the Licensed Products. However, Licensee will maintain its right to sell any remaining Licensed inventory items in its possession provided that Licensee account for, and pay royalties on, all such sales within thirty (90) days of the close of the quarter.
(e) Limitation of Liability . In the event of termination by either party in accordance with any of the provisions of this Agreement, neither party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of Licensor or Licensee. Termination shall not, however, relieve either party of any obligations incurred prior to the termination, including, without limitation, the obligation of Licensee to pay Licensor for royalties earned prior to such termination.
12. Survival of Certain Terms . The provisions of Sections 1, 4, 5, 6, 7, 8, 9, 10 and 11 shall survive the termination (for any reason) or expiration of this Agreement. All other rights and obligations of the parties shall cease upon termination of this Agreement.
14. Amendments and Waivers . Any term of this Agreement may be amended or waived only with the written consent of the parties or their respective successors and assigns. Any amendment or waiver effected in accordance with this Section 12 shall be binding upon the parties and their respective successors and assigns.
15. Governing Law; Jurisdiction . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. Each of the parties to this Agreement consents to the exclusive jurisdiction and venue of the courts of the state and federal courts of California.
16. Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally, by email or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below.
17. Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
18. Entire Agreement . This Agreement is the product of both of the parties hereto, and constitutes the entire agreement between such parties pertaining to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard to the transactions contemplated by this Agreement. Any and all other written or oral agreements existing between the parties hereto regarding such transactions are expressly canceled.
19. Arbitration . Any dispute or claim arising out of or in connection with this Agreement will be finally settled by binding arbitration in the state of California in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision.
20. Advice of Legal Counsel . Each party acknowledges and represents that, in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation thereof.
21. Any signature (including any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a Licensor with the intent to sign, authenticate or accept such contract or record) hereto or to any other certificate, agreement or document related to this transaction, and any contract formation or record-keeping through electronic means shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act, and the parties hereby waive any objection to the contrary.
High Note Collective
High Note Collective
7338 Pacific View Drive
Los Angeles, CA 90068
By: ( "Licensor Full Name" )
( "Electronic Signature" )
(" Licensor Full Name" )
( "Licensor Address" )
EXHIBIT A - TRADEMARK LICENSE AGREEMENT
( "Licensor Full Name" ) and the ( "Licensor's Stage Name" ) logo are trademarks of ( "Licensor Full Name" ), and are used by permission.
Such other trademark, copyright or other notices as Licensee may reasonably request from time to time.
EXHIBIT B - TRADEMARK LICENSE AGREEMENT LICENSED BUSINESS
Licensee will produce, sell, distribute and market branded merchandise
EXHIBIT C - TRADEMARK LICENSE AGREEMENT ROYALTIES AND CHANGE OF CONTROL PAYMENTS TO LICENSOR
Licensee will pay to Licensor an earned royalty equal to fifteen (15%) Percent of the Gross Profit of Licensed Products, during the term of this Agreement, by the Licensee.
“ Gross Profit ” means the gross invoice price charged and the value of any other consideration owed to the Licensee for a Licensed Product, less the following items, but only to the extent that they actually pertain to the disposition of such Licensed Product: (i) allowances or credits actually granted to customers for rejections, returns and prompt payment and volume discounts; (ii) freight, transport packing and insurance charges associated with transportation; (iii) cost of goods sold, (iv) taxes, including value added tax, excise taxes, tariffs or import/export duties based on sales of Licensed Products; (v) cash, trade or quantity discounts actually granted to customer; (vi) normal and customary wholesaler’s discounts, rebates and fees given as a part of a documented arrangement that are paid or credited to wholesalers for a Licensed Product that is included in such arrangement; and (vii) fees, commissions or other payments in any form (including revenue share) charged by distributors and resellers of Licensed Products pursuant to a documented arrangement with Licensee.