Exhibit 10.3
EXCLUSIVE LICENSE
AGREEMENT
This Exclusive License Agreement (this
“Agreement” )
is made and entered into as of August 9, 2007 (the “Effective Date” ), by and
between Papa John’s International, Inc. (the “Company” ) and John H.
Schnatter (the “Licensor ”).
WHEREAS, the Company is a corporation that
either directly, or by and through its subsidiaries, operates and
franchises businesses principally involving pizza, and other
related items, including goods and services, branded under the
“PAPA JOHN’S” brand in the United States and
internationally and restaurants under the brand “PAPA
JOHN’S” in the United States and
internationally;
WHEREAS, the Company advertises and promotes
its products and services through various means, including, without
limitation, print, packaging, radio, television, internet, as well
as other means and methods of advertising and marketing distributed
on local, national and international bases;
WHEREAS, Licensor, a natural person, residing
in Louisville, Kentucky, is the founder and Chairman of the Board
of Directors of the Company;
WHEREAS, since the Company’s inception,
Licensor has allowed the Company to use Licensor’s name,
image, likeness, photographs, voice, signature, biography, public
appearances, speeches, interviews and other similar methods and
forms related to the image of Licensor to promote its products and
services pursuant to prior practice and past oral agreements
granting the Company the right to do so;
WHEREAS, pursuant to the terms and conditions
of this Agreement, Licensor desires to acknowledge certain past
practices and to grant certain rights to the Company, and Company
desires to receive from Licensor, certain rights as set forth
herein.
NOW, THEREFORE, in consideration of the
foregoing and the premises, representations, warranties, covenants,
agreements and conditions hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto agree as follows:
Section 1:
Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms shall have the
following meanings in this Agreement:
1.1
“Licensed
Rights” means all aspects of the identity of
Licensor, including but not limited to his name, image, likeness,
photographs, signature, voice, biography, public appearances,
speeches and interviews, rights of publicity connected to goods and
services of the Company, and registered and unregistered copyrights
to media in which the Licensor’s identity is fixed, which
media pertains to the goods or services of the Company, and
including rights Licensor has in the non-trademark elements of the
Papa John Persona.
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1.2
“Brand” means
the Company’s U.S. and foreign registered and unregistered
trademarks, service marks, logos, designs, symbols, images or
characters existing on the Effective Date and reasonable
derivatives thereof, including any of the foregoing that comprise
or incorporate the words “PAPA JOHN’S” and the
Company’s goodwill associated with those marks.
1.3
“Field of Use”
means the Company’s current and future operation, and
franchising, of pizza delivery and carry-out businesses and
restaurants under the Brand, including sales of related goods and
services under the Brand, in the United States and
internationally.
1.4
“Affiliates”
means with respect to a specified person or entity, any other
person or entity who or which is directly or indirectly
controlling, controlled by or under common control with the
specified person and any franchisee of the Company. For the
purposes of the preceding sentence, “control” means the
possession of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership
of voting stock, by contract or otherwise. In the case of a
corporation, “control” shall mean the direct or
indirect ownership of more than fifty percent of the outstanding
voting stock.
1.5
“Papa John
Persona” means the character of “Papa
John” as depicted in the sales, marketing, advertising and
other public statements of the Company, including the name, image,
likeness, photographs, voice, signature, biography, public
appearances, speeches, and interviews of Licensor, in each case as
used in connection with the Brand before and after the date
hereof. Subject to section 2.3, the Papa John Persona
expressly excludes the Licensor’s rights of publicity
(including but not limited to his image, likeness, photographs,
voice, signature, biography, public appearances, speeches, and
interviews of Licensor) when not used in connection with the Brand
and used outside of the Field of Use.
1.6
“Designated
Representative” means any individual designated by
Licensor, pursuant to delivery of written notice by Licensor to the
Company, to serve as the designated representative for Licensor in
administering the terms of this Agreement after the death of
Licensor.
Section 2:
Grant of License.
2.1
Grant of License . Subject to the terms and conditions
of this Agreement, Licensor hereby grants to the Company an
exclusive, royalty-free, worldwide license to create and to have
created media incorporating the Licensed Rights in the Field of Use
and to use the Licensed Rights in the Field of Use, including but
not limited to the right to re-use, publish, and re-publish, and
otherwise reproduce, broadcast, distribute, and exploit any video
or sound recordings, photographs, drawings, sketches, images,
illustrations or other materials incorporating any of the Licensed
Rights and to exploit the same in any and all media worldwide, by
any means or devices now known or hereinafter devised or created;
provided, however, that said license grant shall not extend
to any use of the Licensed Rights that does, or would in the
reasonable judgment of Licensor during his lifetime or his
Designated Representative after his death, lead to disparagement,
ridicule or disrepute of Licensor; provided further , that
upon learning of such use, Licensor or the Designated
Representative, as the case may be, provides timely notice of such
use to the Company, which notice shall describe in reasonable
detail the nature of the use that gives rise to the notice.
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2.2
Right to Sublicense . Licensor further hereby grants
to the Company the right to sublicense the rights granted herein to
Affiliates of the Company so long as they remain Affiliates;
provided , that any such sublicenses shall terminate
automatically upon termination of the license granted in this
Section 2.
2.3
Reservation of Rights . Nothing in this Agreement
shall be construed to grant Licensor a right to use the
Company’s trademarks or service marks, including, but not
limited to, trademarks or service marks that incorporate the words
“Papa John” or the trademarks or service marks that
incorporate the Papa John Persona. For the avoidance of
doubt, nothing in this Agreement shall prevent or limit Licensor
from using the Licensed Rights outside of the Field of Use.
Notwithstanding the foregoing sentence, Licensor covenants and
agrees that, during the term of this Agreement, he will make no use
of the Licensed Rights outside the Field of Use for the purpose of
materially and adversely affecting or disparaging the Brand or the
Papa John Persona.
Section 3:
Additional Rights and Obligations
3.1
Use of the Licensed Rights . The Company may use the
Licensed Rights solely to advertise, promote or market the Brand
and its related products and services and in public relations,
sales and other activities related to the operation of the
Company’s business as currently operated, or as it may in the
future operate, provided that such use of the Licensed Rights does
not lead to the disparagement, ridicule or disrepute of Licensor
during his lifetime or after his death.
3.2
Licensor Services . As may be mutually agreed from
time to time by Licensor and the Company and as described in and
pursuant to that certain Agreement for Service as Founder (the
“Founder’s
Agreement” ), dated of even date herewith between the
parties hereto, Licensor agrees to participate in commercials and
other high profile public relations events, including but not
limited to making himself reasonably available and otherwise
reasonably cooperating with the Company for purposes of producing
appropriate photographs, film, recordings, video footage and any
other such depictions of Licensor for use by the Company, and
Licensor’s services in this regard shall be deemed services
provided by Licensor as an advisor to the Company.
3.3
Trademark and Service Mark Use and Registration Rights
. The Licensor hereby acknowledges that the Company has owned
and will continue to own all right, title and interest in and to
all U.S. and foreign registered and unregistered trademarks,
service marks, logos, designs, symbols, images or characters used
by the Company, including but not limited to, any of the foregoing
incorporating the words “Papa John” and any of the
foregoing incorporating the Papa John Persona. The Licensor
further acknowledges that the Company has had and shall continue to
have the sole and exclusive right to file for and obtain state,
federal and foreign registrations in such marks.
3.4
Additional Registration Rights . The Licensor further
acknowledges that the Company has the right to continue to register
new marks based upon the words “Papa John” or the Papa
John Persona ( “Derived
Marks” ), so long as such newly Derived Marks are
substantially consistent with the image, look and goodwill of the
Papa John Persona as of the date of this Agreement. The
Company shall give the Licensor (or his Designated Representative)
at least ten (10) days’ advance written notice of its intent
to register any such Derived Marks.
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3.5
Protection of the Papa John Persona and Derived Marks
. The Licensor further acknowledges that subject to the
Company’s reasonable business judgment, the Company, at its
expense, may file appropriate registrations in its own name or in
the name of a Company subsidiary of any Derived Marks so as to
preserve the goodwill thereof, may prosecute and defend such
registrations and all common law rights in the Derived Marks
consistent with good commercial practices and may use all
reasonable commercial efforts to defend and otherwise protect the
Derived Marks. The parties further acknowledge that neither
has any infringement claim against the other relating to the use of
the Papa John Persona as of the Effective Date. Licensor
acknowledges and agrees that all materials in written or other
tangible form created or developed by Licensor in
