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Draft of Business License Agreement

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Draft of Business License Agreement

BUSINESS LICENSE AGREEMENT

This Business License Agreement ("Agreement") is made and entered into on this [Date], by and between:

1.    [Licensor’s Full Name/Company Name], a company incorporated under the laws of [State/Country], having its principal place of business at [Address] (hereinafter referred to as the "Licensor"), and

2.    [Licensee’s Full Name/Company Name], a company incorporated under the laws of [State/Country], having its principal place of business at [Address] (hereinafter referred to as the "Licensee").

WHEREAS:

  • The Licensor is the owner of certain proprietary rights, including but not limited to trademarks, trade secrets, business models, intellectual property, operational processes, and confidential information related to [Briefly describe the business, product, or brand being licensed] (collectively referred to as the "Licensed Rights").
  • The Licensee desires to obtain a license from the Licensor to use the Licensed Rights for the purpose of [Describe Purpose, e.g., operating a business, distributing products, running a franchise, etc.] within a specified territory, and the Licensor agrees to grant such a license on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

1. GRANT OF LICENSE

1.1 License Scope: The Licensor grants to the Licensee a non-exclusive, non-transferable, and revocable license to use the Licensed Rights solely for the purpose of [Describe Use, e.g., operating a business, distributing products, running a franchise, etc.] within the geographic territory defined as [Specify Territory, e.g., city, state, country, region] (hereinafter the "Territory").

1.2 Limitations on Use: The Licensee shall use the Licensed Rights only for the approved business activities and shall comply with all guidelines, quality standards, and operational protocols established by the Licensor. The Licensee shall not use the Licensed Rights for any purpose other than those expressly permitted by this Agreement.

1.3 No Sub-Licensing: The Licensee shall not have the right to sublicense, assign, or transfer the Licensed Rights, in whole or in part, to any third party without the prior written consent of the Licensor.

1.4 Exclusivity (if applicable): [Optional clause depending on the nature of the business arrangement]. The Licensee shall have the exclusive right to use the Licensed Rights within the Territory, subject to continued compliance with the terms and conditions of this Agreement.

2. TERM AND TERMINATION

2.1 Initial Term: This Agreement shall commence on [Start Date] and continue for an initial period of [X] years ("Initial Term"), unless terminated earlier in accordance with the provisions herein.

2.2 Renewal: Upon expiration of the Initial Term, this Agreement may be renewed for successive [X] year terms ("Renewal Term"), subject to mutual written agreement by the parties and the Licensee’s compliance with all terms and conditions of this Agreement.

2.3 Termination by Licensor: The Licensor may terminate this Agreement immediately upon notice to the Licensee if:

  • The Licensee fails to make any payment due under this Agreement within [X] days after the due date.
  • The Licensee breaches any material term or condition of this Agreement and fails to cure such breach within [X] days of receiving written notice from the Licensor.
  • The Licensee becomes insolvent, files for bankruptcy, or is otherwise unable to meet its financial obligations.

2.4 Termination by Licensee: The Licensee may terminate this Agreement upon [X] days’ written notice to the Licensor if the Licensor fails to perform any material obligation under this Agreement and does not cure such failure within [X] days after receiving written notice from the Licensee.

2.5 Termination for Convenience: Either party may terminate this Agreement without cause by providing [X] days’ written notice to the other party, subject to the payment of any amounts due and the resolution of any outstanding obligations.

2.6 Effect of Termination: Upon termination or expiration of this Agreement for any reason:

  • The Licensee shall immediately cease using all Licensed Rights and return all copies of manuals, trademarks, trade secrets, proprietary information, and other materials provided by the Licensor.
  • Any licenses, rights, and privileges granted to the Licensee under this Agreement shall immediately terminate.
  • The Licensee shall pay all amounts due to the Licensor, including any unpaid License Fees, royalties, or other charges that accrued prior to the termination date.

3. LICENSE FEES AND PAYMENT TERMS

3.1 License Fee: In consideration of the rights granted under this Agreement, the Licensee agrees to pay the Licensor a license fee of [Amount in Words and Figures] (the "License Fee"). The License Fee shall be paid as follows:

  • An initial payment of [Amount] upon execution of this Agreement ("Initial Payment").
  • Subsequent payments of [Amount] due [Monthly/Quarterly/Annually] on or before [Due Date].

3.2 Royalty Payments (if applicable): In addition to the License Fee, the Licensee shall pay the Licensor a royalty of [X]% of the Licensee’s gross revenue derived from the use of the Licensed Rights, payable on a [Monthly/Quarterly] basis within [X] days after the end of each period.

3.3 Late Payments: Any payment not received by the due date shall bear interest at the rate of [X]% per month, compounded monthly, from the due date until payment is received in full.

3.4 Taxes and Other Charges: All payments made under this Agreement shall be exclusive of any applicable taxes, levies, or duties imposed by any governmental authority. The Licensee shall be responsible for paying all such taxes, including but not limited to sales tax, value-added tax (VAT), or goods and services tax (GST).

3.5 Audit Rights: The Licensor shall have the right, at its own expense, to audit the books and records of the Licensee to ensure compliance with the payment terms of this Agreement. The Licensee shall provide access to such records upon reasonable notice from the Licensor.

4. OBLIGATIONS OF THE LICENSEE

4.1 Compliance with Operational Standards: The Licensee shall operate its business in accordance with the operational standards, quality controls, and brand guidelines established by the Licensor. Any deviations from these standards require the prior written approval of the Licensor.

4.2 Use of Trademarks and Branding: The Licensee agrees to use the Licensor’s trademarks, logos, and branding materials in a manner consistent with the Licensor’s brand image and reputation. The Licensee shall not alter or modify any of the trademarks or branding materials without the prior written consent of the Licensor.

4.3 Reporting Requirements: The Licensee shall provide the Licensor with regular reports on sales, revenue, marketing activities, and other relevant business metrics as specified by the Licensor. Reports shall be submitted on a [Monthly/Quarterly] basis or as otherwise agreed.

4.4 Marketing and Advertising: The Licensee shall be responsible for marketing and advertising the licensed products or services within the Territory, subject to the approval of the Licensor. All marketing materials, campaigns, and promotional activities must be consistent with the Licensor’s brand guidelines.

4.5 Training and Support: The Licensee agrees to participate in any training programs, workshops, or seminars organized by the Licensor to ensure compliance with operational standards and to enhance the Licensee’s business performance.

4.6 Legal Compliance: The Licensee shall comply with all applicable laws, regulations, and industry standards in the conduct of its business, including obtaining and maintaining all necessary permits, licenses, and certifications.

5. OBLIGATIONS OF THE LICENSOR

5.1 Provision of Licensed Rights: The Licensor shall provide the Licensee with all necessary trademarks, branding materials, business manuals, and proprietary information required for the Licensee to effectively operate under this Agreement.

5.2 Ongoing Support: The Licensor agrees to provide ongoing support to the Licensee, including but not limited to training, technical assistance, marketing guidance, and updates to operational procedures as necessary.

5.3 Protection of Licensed Rights: The Licensor shall take reasonable steps to protect the Licensed Rights from infringement or unauthorized use by third parties. In the event of any such infringement, the Licensor shall have the exclusive right to enforce its intellectual property rights and to take legal action against the infringing party.

5.4 Product and Service Updates: The Licensor shall provide the Licensee with timely updates regarding any changes to products, services, or business processes that may affect the Licensee’s operations.

6. CONFIDENTIALITY

6.1 Definition of Confidential Information: For the purpose of this Agreement, "Confidential Information" shall mean all non-public information disclosed by one party to the other, including but not limited to business strategies, marketing plans, financial data, trade secrets, technical information, customer lists, and any other proprietary information.

6.2 Obligations of Confidentiality: The receiving party agrees to maintain the confidentiality of all Confidential Information received from the disclosing party and shall not disclose such information to any third party without the prior written consent of the disclosing party, except as required by law or as necessary for the performance of this Agreement.

6.3 Exclusions from Confidential Information: Confidential Information does not include information that:

  • Was publicly known or available at the time of disclosure.
  • Becomes publicly known or available after disclosure through no fault of the receiving party.
  • Is independently developed by the receiving party without reference to the disclosing party’s Confidential Information.

6.4 Return or Destruction of Confidential Information: Upon termination or expiration of this Agreement, the receiving party shall return or destroy all Confidential Information of the disclosing party in its possession, including any copies or derivatives.

6.5 Survival: The obligations of confidentiality shall survive the termination or expiration of this Agreement for a period of [X] years.

7. INTELLECTUAL PROPERTY RIGHTS

7.1 Ownership: The Licensee acknowledges that all rights, title, and interest in and to the Licensed Rights, including any trademarks, trade secrets, proprietary information, and related intellectual property, shall remain the exclusive property of the Licensor.

7.2 Use of Trademarks: The Licensee agrees to use the Licensor’s trademarks and branding in accordance with the guidelines provided by the Licensor. The Licensee shall not challenge the validity or ownership of the Licensor’s trademarks or engage in any activities that could damage the reputation or goodwill associated with the Licensed Rights.

7.3 Infringement Claims: If a third party claims that the use of the Licensed Rights infringes their intellectual property rights, the Licensor shall have the exclusive right to defend against such claims and to settle or resolve any disputes at its sole discretion. The Licensee agrees to cooperate fully with the Licensor in such defense.

8. INDEMNIFICATION

8.1 Indemnification by Licensee: The Licensee agrees to indemnify, defend, and hold harmless the Licensor and its officers, directors, employees, and agents from any claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of:

  • The Licensee’s breach of any term of this Agreement.
  • The Licensee’s negligence, willful misconduct, or violation of applicable laws.
  • Any claims made by third parties arising out of the Licensee’s business operations under this Agreement.

8.2 Indemnification by Licensor: The Licensor agrees to indemnify, defend, and hold harmless the Licensee and its officers, directors, employees, and agents from any claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of:

  • The Licensor’s breach of any term of this Agreement.
  • Any claims that the use of the Licensed Rights infringes the intellectual property rights of third parties.

9. DISPUTE RESOLUTION

9.1 Negotiation and Mediation: In the event of any dispute arising out of or in connection with this Agreement, the parties shall first attempt to resolve the dispute through good faith negotiation. If the dispute cannot be resolved through negotiation, the parties agree to submit the dispute to mediation administered by [Mediation Institution] in [Location].

9.2 Arbitration: If mediation is unsuccessful, the dispute shall be finally resolved by binding arbitration conducted in accordance with the rules of [Arbitration Institution]. The arbitration shall take place in [City, State/Country] and shall be conducted in [Language]. The decision of the arbitrator(s) shall be final and binding on the parties and may be enforced in any court of competent jurisdiction.

9.3 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [State/Country] without regard to its conflict of laws principles.

9.4 Jurisdiction: The courts of [City, State/Country] shall have exclusive jurisdiction over any disputes arising out of or in connection with this Agreement that are not resolved through arbitration.

10. MISCELLANEOUS

10.1 Entire Agreement: This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, representations, or understandings, whether written or oral.

10.2 Amendments: Any amendments, modifications, or supplements to this Agreement must be in writing and signed by both parties.

10.3 Assignment: Neither party shall assign or transfer any rights or obligations under this Agreement without the prior written consent of the other party, except in the case of a merger, acquisition, or sale of all or substantially all of the assigning party’s assets.

10.4 Notices: All notices and other communications required or permitted under this Agreement shall be in writing and delivered by registered mail, courier service, or email to the addresses specified above.

10.5 Force Majeure: Neither party shall be liable for any failure to perform its obligations under this Agreement due to events beyond its reasonable control, including but not limited to acts of God, war, terrorism, strikes, natural disasters, or government regulations.

10.6 Severability: If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. The invalid or unenforceable provision shall be replaced by a valid provision that most closely reflects the original intent of the parties.

10.7 Waiver: The waiver by either party of any breach of this Agreement shall not be deemed a waiver of any subsequent breach. No waiver shall be effective unless in writing and signed by the party granting the waiver.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

For the Licensor:
(Signature)
[Licensor’s Name]
[Designation]
[Company Name]
[Seal of the Company]

For the Licensee:
(Signature)
[Licensee’s Name]
[Designation]
[Company Name]
[Seal of the Company]