Intellectual Property License Agreement - Grand Casinos Inc. and Lakes Gaming Inc.
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Trademark License Agreement (the "Agreement") is made as of this 31st
day of December, 1998, by and between Grand Casinos, Inc., a Minnesota
corporation ("Licensor"), and Lakes Gaming, Inc., a Minnesota corporation
("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor is the owner of various trademarks set forth on Schedule A
attached hereto and incorporated by reference herein (the "Licensed Marks"),
together with all copyrightable subject matter (the "Copyright Material"), trade
dress, and other intellectual property currently used in the operation of the
Facilities (as defined below) (such property, together with the Licensed Marks,
is referred to herein as the "Intellectual Property");
WHEREAS, Licensor's predecessors in interest are obligated in connection
with certain management agreements with the Corporate Commission of the Mille
Lacs Band of Chippewa Indians (the "Minnesota Tribe"), the Coushatta Tribe of
Louisiana (the "Coushatta Tribe") and the Tunica-Biloxi Tribe of Louisiana (the
"Tunica Tribe" and, together with the Coushatta Tribe, the "Louisiana Tribes"),
respectively (the "Tribes"), to ensure the respective Tribes' licenses to use
the Intellectual Property;
WHEREAS, Licensee, through its subsidiaries, on June 30, 1998 manages
various hotels, restaurants, retail and gaming facilities for the Tribes
(collectively, the "Facilities");
WHEREAS, Licensee desires the right to use the Intellectual Property in
connection with its management of the Facilities; and
WHEREAS, Licensor desires to grant to Licensee a non-exclusive license to
use the Intellectual Property on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
I. GRANT OF LICENSE.
Licensor hereby grants to Licensee, subject to the terms and conditions
contained herein, (i) a worldwide, royalty-free, and non-exclusive right and
license (the "Minnesota License") to (A) reproduce, distribute, perform, and
display the Copyright Material and (B) use the other Intellectual Property, in
each case, solely in connection with Licensee's management of the Facilities of
the Minnesota Tribe, and (ii) a worldwide, royalty-free, and non-exclusive right
and license (the "Louisiana License" and, together with the Minnesota License,
the "License") to (Y) reproduce, distribute, perform, and display the Copyright
Material and (Z) use the other Intellectual Property, in each case, solely in
connection with Licensee's management of the Facilities of the Louisiana Tribes;
provided, however, that Licensee may, in accordance with this
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Agreement, sublicense the Intellectual Property to the Minnesota Tribe after the
termination of its management agreement with the Minnesota Tribe for use solely
in connection with the operation of the Facilities of the Minnesota Tribe. The
term of the Minnesota License shall be perpetual and the term of the Louisiana
License shall expire upon the termination (after any renewals and extensions
thereof) of the Amended and Restated Management and Construction Agreement,
dated as of February 25, 1992, between the Coushatta Tribe and Grand Casinos of
Louisiana--Coushatta, and the Amended and Restated Management & Construction
Agreement, dated as of November 1, 1991, by and between the Tunica Tribe and
Grand Casinos of Louisiana--Tunica-Biloxi (collectively, the "Louisiana
Management Agreements"). THE INTELLECTUAL PROPERTY MAY ONLY BE USED IN A MANNER
CONSISTENT WITH THE USE OF SUCH INTELLECTUAL PROPERTY DURING THE YEAR PRECEDING
THIS AGREEMENT. LICENSEE SHALL NOT USE ANY OF THE INTELLECTUAL PROPERTY ON
PRODUCTS OR SERVICES BEYOND THOSE PRODUCTS OR SERVICES IN USE BY LICENSOR WITH
RESPECT TO THE FACILITIES AS OF THE DATE OF THIS AGREEMENT WITHOUT LICENSOR'S
PRIOR WRITTEN CONSENT, WHICH CONSENT MAY BE WITHHELD AT LICENSOR'S SOLE
DISCRETION.
II. QUALITY CONTROL; COVENANTS OF LICENSEE
Section 2.1. Standards. Licensor is familiar with the quality of the goods
and services to be provided by Licensee at the Facilities and finds, at the
present time, the quality of such goods and services to be acceptable. All goods
and services to be provided by the Licensee under a Licensed Mark shall be
provided substantially in accordance with the quality standards of Licensor now
in place, or with such other quality standards as Licensor reasonably may
establish from time to time.
Section 2.2. Limitations on Use of the Licensed Marks. In its use of any
Licensed Mark, Licensee shall faithfully reproduce such mark's design,
coloration and appearance, as such design, coloration and appearance may be
modified from time to time by Licensor. Licensee shall not modify the design,
coloration or appearance of a Licensed Mark unless requested to do so in writing
by the Licensor of such Licensed Mark. Licensor shall provide Licensee with not
less than thirty (30) days advance written notice of any changes to said
specifications. During such thirty (30) day period, Licensee may continue to
follow prior specifications; provided, however, that Licensee shall immediately
cease all use of the prior specifications if Licensor purchases all materials
prepared in accordance with the prior specifications from Licensee at Licensee's
cost for said materials. All displays of a Licensed Mark by Licensee shall bear
such copyright, trademark, service mark and other notices as Licensor shall
reasonably require, and Licensee shall adhere to any other reasonable and
customary posting requirements developed by Licensor with respect to such
Licensed Mark. Licensee shall not use a Licensed Mark as part of, or display
such Licensed Mark in conjunction with, any other names or marks except with
Licensor's prior written approval. Licensee shall not use a Licensed Mark or any
confusingly similar or diluting mark, term or design, except as expressly
authorized in this Agreement, and Licensee shall not attempt to register or aid
any third party in using or attempting to register any such mark, term or
design. Licensee shall not use a Licensed Mark in any manner that will indicate
that it is using such Licensed Mark other than as a licensee.
Section 2.3. Samples. Licensor shall have the right, at reasonable times and
with prior notice, to inspect any Facility and any goods or services (including
any advertising and
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promotional materials) provided by Licensee that bear a Licensed Mark at any
time for the purpose of determining whether they have met or are meeting the
quality standards required under this Agreement. Licensee shall promptly produce
and deliver (at its own expense) to Licensor such examples of its use of the
Licensed Marks as Licensor reasonably shall request. All such sample materials
shall be deemed to be confidential information of Licensee that is subject to
the conditions of Section 9.1 of this Agreement.
III. OWNERSHIP, MAINTENANCE, POLICING AND PROTECTION
Section 3.1. Ownership; Enhancements. Licensee acknowledges that Licensor is
the sole and exclusive owner of the Intellectual Property, subject to the
License provided hereunder. Licensee agrees that it has no right, title or
interest in or to any Intellectual Property, except as expressly set forth in
Section 1. Licensee agrees that all uses of any Intellectual Property by
Licensee and third parties and the goodwill associated with such uses shall
inure solely to the benefit of Licensor. Upon termination of its rights to use
any Intellectual Property as provided in this Agreement, all right and interest
of Licensee in and to such Intellectual Property shall revert fully to Licensor.
Licensee agrees, if requested by Licensor, to cooperate fully with Licensor in
recording appropriate documents evidencing Licensor's ownership of any
Intellectual Property. Licensee agrees to take no action inconsistent with
Licensor's ownership of and interest in its Intellectual Property. Licensee
shall not attack the validity of Licensor's ownership of the Intellectual
Property or any of the terms of this Agreement, or assist any third party in
doing any of the same.
Section 3.2. Licensee Intellectual Property. Notwithstanding the foregoing,
Licensee may, from time to time, develop or otherwise acquire interests in
various trademarks, copyrights, trade dress and other intellectual property in
connection with its operation of the Facilities. The parties agree that such
intellectual property shall be the sole property of Licensee, provided, however,
that, to the extent that any new works created by Licensee constitute a
derivative work of authorship based upon the Intellectual Property, then the
same shall become the exclusive property of Licensor and will become a part of
the Intellectual Property subject to the License under this Agreement.
Section 3.3. Maintenance. Licensor shall use reasonable and good faith
efforts at its expense to protect the Intellectual Property such as by renewing
and maintaining, where appropriate, federal trademark registration, copyright
registration, and the protection of trade dress. Neither Licensee nor Licensor
will undertake any action which shall in any manner reduce, diminish, eliminate
or jeopardize the effect and enforceability of the Intellectual Property.
IV. PAYMENT OF LICENSE FEE
Licensee agrees to pay, and Licensor agrees to accept, a one-time license
fee in the amount of Ten Dollars ($10.00) as full consideration for all rights
granted to Licensee by this Agreement.
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V. NON-COMPETITION
So long as the License remains in effect with respect to any Tribe, Licensor
agrees that it will not itself, and will not authorize any other individual,
corporation, partnership, unincorporated association, or other entity, to use
the Intellectual Property in connection with the operation of any hotel,
restaurant, retail, gaming or other facility of a similar type or nature within
a 20 mile radius of the Facility owned by such Tribe.
VI. LIMITATION OF LIABILITY; INDEMNITY
The Intellectual Property is provided to Licensee "As Is." Licensor
disclaims any express or implied warranty, including non-infringement, with
respect to the Intellectual Property. In no event shall Licensor be liable for
any matter whatsoever relating to the use of the Intellectual Property by
Licensee or any assignee or sublicensee of licenseE.
Licensee shall indemnify, defend and hold harmless Licensor, its past and
present affiliates, subsidiaries, other related companies, licensees and
properties, and each of the foregoing entities' respective past and present
employees, representatives, directors, officers, partners and agents (each, a
"Licensor Indemnitee"), from and against any and all costs, liabilities and
expenses, including, without limitation, interest, penalties, attorney and third
party fees, and all amounts paid in the investigation, defense and/or settlement
of any claim, action or proceeding (collectively, "Expenses"), that relate to
the provision or promotion of goods or services by any Licensee, or assignee or
sublicensee of Licensee, under any Intellectual Property, notwithstanding any
approval which may have been given by Licensor with respect to the provision or
promotion of such goods or services; provided, however, that Licensee shall have
no obligation to indemnify, defend and hold harmless any Licensor Indemnitee
from any Expenses resulting from any claim of any third party that the use of
such Intellectual Property is infringing upon such third party's proprietary
rights, unless such claim of infringement arises from Licensee's failure to
comply with the terms of this Agreement.
If any claim or action is asserted against Licensor that would entitle
Licensor to indemnification, the indemnification provisions in that certain
Distribution Agreement, dated as of December 31, 1998, between Licensor and
Licensee (the "Distribution Agreement") shall govern.
Licensee shall provide Licensor with prompt written notice of any
unauthorized uses by third parties of any Intellectual Property, or of
confusingly similar or diluting trademarks, service marks, trade names, terms or
designs, which come to the attention of Licensee. Licensor shall have the right,
in its sole discretion, to commence infringement or unfair competition actions
regarding any unauthorized use by third parties of the Intellectual Property or
any confusingly similar or diluting devices. Licensee shall cooperate with and
assist Licensor in its investigation and prosecution of any of the foregoing.
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VII. TERM AND TERMINATION
Section 7.1. Term. Except as otherwise provided in Section 7.2, this
Agreement shall expire upon the later to occur of the
expiration (or earlier termination) of the Louisiana License
and the Minnesota License.
Section 7.2. Termination. This Agreement may be terminated as follows:
7.2.1. If Licensee makes an assignment of assets or business for the
benefit of creditors, or if a trustee or receiver is
appointed to administer or conduct Licensee's business or
affairs, or if Licensee is adjudged in any legal proceeding
to be either a voluntary or involuntary bankrupt without
prior notice or legal action by Licensor.
7.2.2. Licensor may terminate this Agreement upon thirty (30) days'
advance written notice to Licensee in the event of Licensee's
material breach of any provision of this Agreement unless
Licensee has cured such breach during such thirty (30) day
period.
7.2.3. Licensee may terminate this Agreement upon ninety (90) days'
advance written notice to Licensor.
Section 7.3. Effect of Termination. Upon termination of this Agreement,
Licensee shall, as soon as is reasonably possible thereafter, and in any event
within sixty (60) days following the date of termination, cease and desist in
Licensee's use of the Intellectual Property; provided, however, if Licensee
makes no reasonable and good faith attempt to cure the breach within 30 days of
Licensee's receipt of the notice of the breach such sixty (60) day period shall
be deemed to have begun upon the date Licensee received notice of the breach.
Licensor's and Licensee's respective obligations under Article VI and Sections
3.1, 3.2, 7.3, 9.1, 9.4, 9.5 and 9.6 shall survive termination of this
Agreement.
VIII. COOPERATION WITH AND COMPLIANCE WITH GAMING AUTHORITIES
Section 8.1. The parties will cooperate in good faith with, and will
use their best reasonable efforts to comply with the requirements of, any and
all gaming authorities respecting their activities pursuant to this Agreement.
Section 8.2. Notwithstanding anything to the contrary set forth herein,
all rights of any party hereunder, including any right to terminate the rights
of other parties hereunder, shall be applied as may be required by any
applicable gaming authorities.
IX. MISCELLANEOUS
Section 9.1. Confidential Information. Each party agrees that all
information disclosed by one party to another pursuant to this Agreement (the
"Confidential Information") shall be maintained in confidence and not be
released to any third party for any reason whatsoever, excluding such parties'
counsel, agents, auditors, or lenders. However, a party may release the
Confidential Information to a third party upon the prior approval of the other
party (such approval not to be unreasonably withheld, conditioned, or delayed),
upon court order, or as such party in
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good faith believes, based upon the advice of counsel, is required by any rules,
regulations, or laws. Notwithstanding the previous sentence, in the event that a
party becomes legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand, or otherwise) to disclose any
information, such party shall provide the other with prompt prior written notice
of such requirement so that the other party may seek a protective order or other
appropriate remedy to minimize disclosure of the Confidential Information. In
the event that such protective order or other remedy is not obtained, or the
other party approves the disclosure, the disclosing party agrees to furnish only
that portion of the Confidential Information that the disclosing party in good
faith believes, based upon the advice of counsel, is legally required, and to
exercise reasonable efforts to obtain assurance that confidential treatment will
be accorded to such information. Each party shall cease use of all Confidential
Information that any party has obtained from the other upon the expiration or
earlier termination of this Agreement. Neither party shall disclose or otherwise
make available any Confidential Information to any person other than employees,
consultants, or auditors of such party with a need-to-know or except as required
by court order or as such party in good faith believes, based upon the advice of
counsel, is required by any rules, regulations, or laws. Each party shall
instruct its employees who have access to the Confidential Information to keep
the same confidential by using the same care and discretion that such party uses
with respect to its own confidential property and trade secrets.
Section 9.2. Assignment. None of the rights, benefits, or obligations under
this Agreement shall be assigned or assignable or transferred or transferrable
or sublicensed or sublicenseable by Licensee (in each case, by operation of law
or otherwise); provided, however, that Licensee may sublicense the Intellectual
Property to the Tribes for use exclusively in connection with the Facilities.
Upon any transfer, assignment or sublicense entered into in accordance with this
Section 9.2, such assignee or sublicensee shall enter into an assignment or
sublicense agreement with Licensee, in a form reasonably satisfactory to
Licensor, pursuant to which such assignee or sublicensee agrees to comply with,
and be bound by, the terms of this Agreement and acknowledges the status of
Licensor as an intended third party beneficiary of such assignment or sublicense
agreement. If requested by Licensor, such assignee or sublicensee shall also
execute an instrument or instruments pursuant to which such assignee or
sublicensee shall be bound by, and become a party to, this Agreement. Any
purported assignment or sublicense by Licensee not in compliance with the terms
of this Agreement shall be null and void. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns.
Section 9.3. Relationship of Parties. Nothing in the Agreement shall be
construed to create any relationship among the parties of agency, partnership,
franchise, or joint venturers or render any party liable for any debts or
obligation incurred by any other party hereto. No party is authorized to enter
into agreements for or on behalf of any other party hereto, to collect any
obligation due or owed to any such party, or to bind any other party in any
manner whatsoever.
Section 9.4. Arbitration. Any dispute between Licensor and Licensee under
this Agreement shall be resolved by arbitration by an arbitrator selected under
the rules of the American Arbitration Association (located in Minneapolis,
Minnesota or Mississippi, as the parties mutually agree) and the arbitration
shall be conducted in that same location under the rules of said Association.
Licensor and Licensee shall each be entitled to present evidence and
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argument to the arbitrator. The arbitrator shall have the right only to
interpret and apply the provisions of this Agreement and may not change any of
its provisions. The arbitrator shall permit reasonable pre-hearing discovery of
facts, to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the arbitrator
shall be conclusive and binding upon the parties and judgment upon the same may
be entered in any court having jurisdiction thereof. The arbitrator shall give
written notice to the parties stating his determination, and shall furnish to
each party a signed copy of such determination.
Section 9.5. Attorneys' Fees. If any party commences an action against
the other with respect to this Agreement, the prevailing party in such action
shall be entitled to an award of reasonable costs and expenses of mediation,
arbitration, and/or litigation, including reasonable attorneys' fees, to be paid
by the non-prevailing party.
Section 9.6. Specific Performance. The parties hereto agree that the
remedy at law for any breach of this Agreement will be inadequate, and that any
party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any other appropriate relief or remedy. Such party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof, and, to the extent permitted by applicable laws, each party waives any
objection to the imposition of such relief.
Section 9.7. Notices. Any notices required or permitted to be given under
this Agreement shall be deemed sufficiently given if mailed by registered mail,
postage prepaid, addressed to the party to be notified at its address shown
below; or at such other address as may be furnished in writing to the notifying
party:
Licensor: Grand Casinos, Inc.
3930 Howard Hughes Parkway, 4th Floor
Las Vegas, Nevada 89109
Attention: General Counsel
Facsimile: (702) 699-5179
Licensee: Lakes Gaming, Inc.
130 Cheshire Lane
Minnetonka, MN 55305
Attention: Lyle Berman
Facsimile: (612) 449-7003
Section 9.8. Entirety of Agreement. This Agreement (including the schedule
hereto) and the Distribution Agreement contain the entire agreement and
understanding between the parties hereto, and supersedes any prior or
contemporaneous agreement or understanding related to the subject matter hereof
and thereof. There are no oral understandings, terms or conditions, and neither
party has relied upon any representations, expressed or implied, not contained
in this Agreement. This Agreement may not be changed orally, but only by
agreement in writing, executed by both parties.
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Section 9.9. No Third Party Beneficiaries. Notwithstanding anything to the
contrary herein, this Agreement is for the sole and exclusive benefit of the
parties hereto and nothing herein is intended to give or shall be construed to
give to any person or entity other than the parties hereto any rights or
remedies hereunder.
Section 9.10. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
Section 9.11. Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
instrument.
Section 9.12. Governing Law. The internal law, without regard to conflicts
of laws principles, of the State of Minnesota will govern all questions
concerning the construction, validity and interpretation of this Agreement and
the performance of the obligations imposed by this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
GRAND CASINOS, INC. - LICENSOR:
By: /s/ Timothy Cope
------------------------------------------
Its: CFO
--------------------------------------
LAKES GAMING, INC. - LICENSEE:
By: /s/ Timothy Cope
------------------------------------------
Its: CFO
--------------------------------------
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SCHEDULE A
GRAND CASINO/MISSISSIPPI ASSETS, INC. TRADEMARKS
<CAPTION>
MARK REG/SER. NO. GOODS/SERV. CLASS STATUS
- ---- ------------ ----------- ----- ------
CAR A DAY GIVEAWAY (Minn.) MN 20,934 Gaming and gambling promotion 35, 42 Registered 6/24/93
GRAND ADVANTAGE PLAYERS 1,733,707 Providing casino entertainment 41 Registered 11/17/92
CLUB and Design services
GRAND ADVANTAGE PLAYERS 1,954,157 Casino entertainment services 41 Registered 2/6/96
CLUB
GRAND ADVANTAGE PLAYERS MN 19,005 Casino services. 41 Registered 3/10/92
CLUB (Minn.)
GRAND CASINO KID QUEST 1,805,598 For childrens day care and 42 Registered 11/16/93
supervised activity center services
GRAND CASINOS, INC. 1,735,194 Casino planning and management 35 Registered 11/24/92
services
GRAND CASINOS, INC. (Minn.) MN 19,006 Casino planning and management 35, 42 Registered 3/10/92
services
GRAND CASINOS, INC. and Design 2,028,123 Providing casino services 42 Registered 1/7/97
LB'S GRILL 1,943,593 Restaurant 42 Registered 12/26/95
LITTLE WINNERS T-shirts, shirts, dresses, pants, 25 New application
shorts, robes and caps
MARKET PLACE BUFFET 1,922,653 Restaurant 42 Registered 9/26/95
RAPID CHANGE 1,894,870 Currency change making machines as 9 Registered 5/23/95
components of electronic gambling
machines
RAPID CHANGE (Minn.) MN 21,406 Machines applied to gaming devices 7 Registered 10/20/93
that accept paper currency which is
applied toward valid plays on the
gaming devices to which the machines
are attached
SHOW & TELL BLACKJACK 1,740,296 Providing casino entertainment 41 Registered 12/15/92
services
SIMPLY THE BEST! 1,934,446 Casino services 41 Registered 11/7/95
THERE'S MORE THAN ONE 1,857,026 Casinos 41 Registered 12/4/94
REASON TO CALL US GRAND
THERE'S MORE THAN ONE MN 21,463 Casino services 42 Registered 11/2/93
REASON TO CALL US GRAND
(Minn.)