STATEMENT OF PURPOSE
- Licensor is engaged in the creation, sale and distribution of certain graphic images and related products.
- Licensor is the author of, and owns all right, title and interest in and to the copyright in, the graphic image(s) listed or described in Exhibit A attached hereto (the “Images”).
- Licensee has previously purchased from Licensor a “Personal and Limited Commercial Use License,” pursuant to which Licensee has been permitted to copy, distribute and/or sell, for its own use and benefit, products displaying or otherwise incorporating Licensor’s copyrighted material embodied in the Images (the “Licensed Goods”), pursuant to the terms of that separate license, on no more than five hundred (500) units, in aggregate.
- Licensee now desires to copy, distribute and/or sell, for its own use and benefit, the “Licensed Goods” on greater than five hundred (500) units, in aggregate, and to obtain a license from Licensor to do so for 500 additional units.
- Licensor is willing to grant such a license to Licensee under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and obligations contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1— LICENSE; ROYALTY PAYMENTS
1.1 Grant of License. Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, the limited, non-exclusive, worldwide right and license (the “License”) to use the copyrighted material embodied in the Images for the manufacture, sale and distribution of the Licensed Goods on no greater than one thousand (1,000) units in aggregate (including the first 500 units subject to the Personal and Limited Commercial Use License). The License shall include the authority to prepare derivative works based on the Images and to incorporate such derivative works into the Licensed Goods.
The License is strictly limited to the manufacture, sale and distribution of the 501st through 1,000th units of the Licensed Goods (after the 500 units subject to the Personal and Limited Commercial Use License).
The License does not grant to Licensee any rights to:
- Copy, distribute or share the Images with any third party, other than through the retail sale of Licensed Goods in a format that does not facilitate or allow re-copying or re-distribution of the electronic Images by any third party;
- Offer for sale or include in digital image collections any electronic copies of the Images.
- Any free transfer or “swapping” of Image files to or with third parties.
- Any sub-license, re-sale, sharing, transfer, or re-distribution of electronic Image files with third parties, regardless of whether undertaken for compensation or without compensation.
- Any sale, sharing, transfer or swapping of electronic Image files through print-on-demand websites such as CafePress or Zazzle.
- Any use or display of the Images in an obscene manner.
1.2 Royalty Payments. In consideration of the License, Licensee shall pay to Licensor a one-time royalty payment of Two Hundred Fifty Dollars ($250) prior to commencement of the License. If Licensee exceeds the 500-unit limitation of the original Personal and Limited Commercial Use License prior to entering into this Agreement, the above Royalty Payment shall be increased by an amount equal to the number of months since the 500-unit limitation was exceeded multiplied by a late payment fee of Five Dollars per month, until payment in full of the Royalty. Licensee shall not exceed the 1,000 aggregate unit limitation of the present License, but shall promptly inform Licensor if Licensee nevertheless exceeds this limitation. If Licensee exceeds the 1000-unit limitation of the present License, then in addition to entering into a separate Extended Commercial Use License with Licensor, Licensee shall pay to Licensor a late payment fee of Ten Dollars per month accruing from the date on which the 1000-unit limitation is exceeded, continuing until the Parties enter into an Extended Commercial Use License.
1.3 Verification. No later than 30 days following the end of each calendar quarter during which Licensee makes any sale(s) or delivery of Licensed Goods, Licensee shall deliver to Licensor, by electronic mail at firstname.lastname@example.org, a statement showing in reasonable detail the number of units sold during the subject calendar quarter. Licensor shall have the right, upon request, to inspect the books and records of Licensee relating to the Licensed Goods from time to time (but no more than once in any three-month period) to verify Licensee’s compliance with the terms and conditions of this Agreement. Any such inspection shall be at Licensor’s sole cost and expense, shall be conducted during Licensee’s normal business hours, and shall not unreasonably interfere with the operation of Licensee’s business. Licensee shall provide reasonable access to its books, records and employees for the purposes of such inspection, and shall cooperate with Licensor’s reasonable requests in connection therewith.
1.4 Labeling. To the extent that it is commercially practicable, Licensee shall affix the relevant year and copyright notice on all Licensed Goods manufactured, distributed or sold by it under the License granted hereunder.
1.5 Acknowledgment. Licensee acknowledges Licensor’s exclusive right, title, and interest in and to the copyrights embodied in the Images, and will not at any time do or cause to be done any act or thing contesting or in any way impairing or tending to impair any part of such right, title, and interest. Licensee shall not in any manner represent that it has any ownership in the copyrights, and Licensee acknowledges that licensed use of the copyrights shall not create any additional right, title or interest in Licensee.
ARTICLE 2— TERM OF AGREEMENT
2.1 Term; Renewal. The term of this Agreement shall commence on the Effective Date and shall continue until the first anniversary thereof, and thereafter shall renew automatically for successive one-year renewal terms, unless written notice of non-renewal is provided by one Party to the other no less than 60 days prior to the expiration of the initial term or any renewal term, as the case may be. If Licensee wishes to request additional licenses permitting Licensee to exceed the aggregate total units of Licensed Goods provided for herein, such additional use shall only be permitted upon the Parties entering into one or more additional written license agreements, separate and apart from the current License, and in exchange for additional consideration to be described in such separate written license agreement. Regardless of the length of Term, this License extends only to the manufacture, sale and distribution of Licensed Goods not to exceed one thousand (1,000) units, in aggregate (including the 500 units subject to the Personal and Limited Commercial Use License).
2.2 Termination for Breach. In the event either Party is in material breach of its obligations hereunder, and such breach shall not have been cured within 15 days after the non-breaching Party delivers written notice of such breach to the breaching Party, then the non-breaching Party may terminate this Agreement by delivering written notice of termination to the breaching Party.
2.3 Rights Following Termination. Licensee shall have the right to sell and distribute its then-existing stock of Licensed Goods, not to exceed 1,000 units in aggregate, until the expiration of the second calendar quarter following termination of this Agreement, provided that Licensor shall be entitled to the royalty payments with respect to such post-termination sales as provided in Article 1.
ARTICLE 3— WARRANTY; INDEMNIFICATION; INFRINGEMENT
3.1 Warranty. Licensor represents and warrants to Licensee that: (a) Licensor is the author of the Images and that it owns all right, title and interest in and to the copyrights embodied therein; (b) Licensor has the right, power and authority to grant the License herein to Licensee; (c) the Images do not violate the intellectual property rights of any other person; and (d) to the best of Licensor’s knowledge, Licensee’s manufacture, sale and distribution of the Licensed Goods will not violate the intellectual property rights of any other person.
3.2 Indemnification by Licensor. Licensor shall indemnify, defend and hold Licensee and its managers, members, employees and agents harmless from and against any and all third party claims, suits, loss and damage relating to copyright infringement, trademark infringement, trade dress infringement or other infringement, or unfair competition, allegedly caused by Licensee’s use of the Images in connection with the manufacture, sale and distribution of the Licensed Goods.
3.3 Indemnification by Licensee. Licensee shall indemnify, defend and hold Licensor and its officers, director, employees and agents harmless from and against any and all third-party claims, suits, loss and damage arising out of or in connection with Licensee’s manufacture, sale and distribution of the Licensed Goods, other than claims or suits of copyright infringement, trade dress infringement, trademark infringement or other infringement, or unfair competition.
3.4 Infringement Notification and Enforcement.
(a) Licensee shall notify Licensor in writing within fifteen (15) days after becoming aware of any infringement or imitation of the licensed copyrights by any third party.
(b) Licensor shall have the primary right to determine whether or not any action will be taken on account of any copyright infringement or imitation. If Licensor chooses to pursue any action in this regard, Licensor shall have the right to employ counsel of its own choice and direct the handling of the litigation and any settlement. If Licensor so desires, it may commence or prosecute any claims or suits in its own name or join Licensee as a party, all at Licensor’s expense. If Licensor proceeds in this fashion at Licensor’s expense, Licensor shall be entitled to receive and retain all amounts awarded as damages, profits, or otherwise.
(c) If, for whatever reason, Licensor chooses not to pursue an action on account of copyright infringement or imitation, Licensee shall have the right to commence or prosecute any claims or suits in its own name or join Licensor as a party, all at Licensee’s expense. If Licensee chooses to pursue any action in this regard, Licensee shall have the right to employ counsel of its own choice and direct the handling of the litigation and any settlement. If Licensee proceeds in this fashion at Licensee’s expense, Licensee shall be entitled to receive and retain all amounts awarded as damages, profits, or otherwise.
ARTICLE 4— MISCELLANEOUS
4.1 Entire Agreement; Amendment. This Agreement and the other agreements contemplated by this Agreement supersede all prior negotiations, agreements and understandings between the Parties as to their subject matter, constitute the entire agreement between the Parties as to their subject matter, and may not be altered or amended except in a writing signed by the Parties.
4.2 Waiver. The failure of either Party at any time or times to require performance of any provision of this Agreement will in no manner affect the right to enforce the same; and no waiver by either Party of any provision (or of a breach of any provision) of this Agreement, whether by conduct or otherwise, in any one or more instances will be deemed or construed either as a further or continuing waiver of any such provision or breach or as a waiver of any other provision (or of a breach of any other provision) of this Agreement.
4.3 Severability. Any determination by any court of competent jurisdiction of the invalidity of any provision of this Agreement that is not essential for accomplishing its purposes will not affect the validity of any other provision of this Agreement, which will remain in full force and effect and which will be construed in such a manner as will be valid under applicable law.
4.4 Governing Law; Jurisdiction; Venue. This Agreement is governed by, and will be construed and enforced in accordance with, the laws of the United States and the State of Maryland, except the laws of such jurisdictions that would render such choice of laws ineffective. Any and all disputes or controversies related in any way to the interpretation, operation or breach of this Agreement, or to the License, shall be adjudicated exclusively in the courts of the State of Maryland (or the counties thereof) sitting in Prince George’s County, Maryland or (to the extent jurisdictional requirements are satisfied) to the courts of the United States sitting in the State of Maryland. The parties hereby irrevocably consent to the exclusive jurisdiction and proper venue of these courts.
4.5 Successors and Assigns; Binding Effect. No assignment or transfer by a Party of its rights and obligations under this Agreement will be made except with the prior written consent of the other Party; provided, however, that either Party may assign its rights and obligations under this Agreement to any purchaser of substantially all the assets or business of such Party. This Agreement is binding upon the Parties and their respective successors and assigns, and inures to the benefit of the Parties and their respective permitted successors and assigns.
4.6 Notice. All communications, notifications, requests, statements, reports, and payments required or permitted to be given under this Agreement shall be in writing and shall be deemed to be properly given if (a) hand delivered, or (b) sent by certified or registered mail, postage prepaid, in either case to the Party entitled to receive such notice at the address set forth below (or such address as a Party may notify the other in writing).
4.7 Remedies Cumulative; Attorneys’ Fees. The remedies of a Party provided in this Agreement are cumulative and do not exclude any other remedies to which either Party may be lawfully entitled under this Agreement or applicable law, and the exercise of a remedy will not be deemed an election excluding any other remedy (any such claim by the other Party being hereby waived). If any proceeding (whether at law or in equity) is brought by a Party to enforce this Agreement, the prevailing Party in such proceeding will be entitled to (in addition to any other relief that may be granted) an award of its reasonable attorneys’ fees and court costs actually incurred in such proceeding as determined in such proceeding or in a separate proceeding brought for such purpose.
4.8 Counterparts. This Agreement may be executed in one or more counterparts (one counterpart reflecting the actual or facsimile signatures of all of the Parties), each of which will be deemed to be an original, and it will not be necessary in making proof of this Agreement or its terms to account for more than one of such counterparts. This Agreement may be executed by each Party upon a separate copy, and one or more execution pages may be detached from one copy of this Agreement and attached to another copy in order to form one or more counterparts.