FORM OF INTELLECTUAL PROPERTY ASSIGNMENT AND LICENSE AGREEMENT
This
Intellectual Property Assignment and License Agreement (this “Agreement”) is made
and entered into this ___ day of December, 2010 (the “Execution Date”), to
be effective as of _____________, 2010 (the Effective Date”) by and between
Preferred
Apartment Advisors, LLC (“Licensor”) and Preferred
Apartment Communities, Inc. (“Licensee”).
WITNESSETH:
WHEREAS, the parties
acknowledge that they are affiliated and related companies that are entering
into this Agreement to memorialize their understandings with respect to the
chain of title, ownership and licensing of certain intellectual
property;
WHEREAS, the parties
acknowledge that part of the Intellectual Property (later defined) was owned by
the Licensee prior to the Effective Date and was assigned to the Licensor, and
all other Intellectual Property created or owned thereafter by Licensee was and
is hereby assigned to Licensor; and
WHEREAS, Licensor now desires
to memorialize its grant to Licensee, of a right and license to use the
Intellectual Property, subject to the limitations provided herein.
NOW, THEREFORE, in
consideration of the mutual promises and agreements contained herein, and in
order for the parties to perform their respective obligations and enjoy their
rights under the Management Agreement (as defined below) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT OF INTELLECTUAL
PROPERTY. Licensee does hereby, unconditionally and
irrevocably assign, transfer and convey unto the Licensor, and confirms its past
assignment, transfer and conveyance of, all Intellectual Property, effective as
of the date that Licensee create(s)(d) or contribute(s)(ed) such Intellectual
Property. Any Intellectual Property created by Licensee in the future, shall be
automatically assigned to Licensor and be licensed back to Licensee in
accordance with this Agreement. The Licensee will upon request of the Licensor,
at no extra cost to Licensor, do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may be
requested by the Licensor to carry out the intent of this Agreement or to
otherwise perfect, record, confirm, or enforce Licensor’s rights in and to the
Intellectual Property.
2.
LICENSE OF INTELLECTUAL
PROPERTY.
2.1 Licensor
hereby grants to Licensee, subject to the terms and conditions hereinafter
contained, a worldwide, fully-paid, royalty-free, non-exclusive right and
license to use all (i) copyrightable materials (including relevant
logos and marketing materials) (the “Copyrights”) and (ii)
Trade Secrets, owned by Licensor, regardless of when such rights were created
(collectively, the “Intellectual
Property”) for the internal operation of Licensee’s business and to
enable Licensee to perform its obligations and enjoy its rights under the
Management Agreement (as hereinafter defined). As used herein “Trade Secrets” shall
include all technical or non-technical data, a formula, a pattern, a
compilation, a program, a method, a technique, a process, financial data,
product plans, software programs (including the object and source code thereto)
or a list (whether in written form or otherwise) of actual or potential
customers, which is not commonly known by or available to the public and which
information (A) derives economic value, actual or potential, from not being
generally known to and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use and (B) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
2.2 The
Intellectual Property contemplated hereunder, shall include (i) any amendments,
modifications and supplements thereto (ii) any new Intellectual Property
developed by the Licensee during the term of this Agreement and (iii) any new
Intellectual Property developed by the Licensor during the term of this
Agreement, to which Licensor provides Licensee with use or access.
2.3 The
parties hereby specifically acknowledge the exclusion of Licensee’s trademarks
from the Intellectual Property license granted hereunder, as such rights are
addressed in a separate written agreement between the parties.
3. TERM AND
TERMINATION.
3.1 This
Agreement shall be deemed to begin on the Effective Date and automatically
terminate upon termination of that certain Management Agreement by and among
Licensor, Licensee and Preferred Apartment Communities Operating Partnership,
L.P., dated as of November 19, 2010 (the “Management Agreement”).
3.2 Either
party shall have the right to terminate this Agreement upon the material breach
of this Agreement by the other party, which remains uncured more than thirty
(30) days after receipt of written notice of such breach.
3.3 The
parties may mutually agree in writing to terminate this Agreement.
3.4 The
exercise of any right of termination under this Section shall not affect any
rights which have accrued prior to termination, and shall be without prejudice
to any other legal or equitable remedies to which the terminating party may be
entitled.
4. OWNERSHIP AND
RESTRICTIONS.
4.1 Licensee
acknowledges that this Agreement conveys only the license expressly set forth
herein, and that it acquires no ownership rights in or to the Intellectual
Property.
4.2 While
this Agreement is still in effect, Licensee agrees to use the Intellectual
Property only in the form and manner and with appropriate proprietary legends as
prescribed from time to time by Licensor, and will not use any other copyrighted
material or other intellectual property in combination with the Intellectual
Property without the prior consent of Licensor.
4.3 Licensee
hereby acknowledges Licensor’s right, title and interest in and to the
Intellectual Property and Licensor’s exclusive right to use, register and
license the use of the Intellectual Property and agrees not to claim or assert
any (i) title to nor attempt to register the Intellectual Property anywhere
in world or (ii) right to use the Intellectual Property, except to the
extent expressly permitted by this Agreement.
4.4 Any
and all goodwill arising from Licensee’s use or sublicensing of the Intellectual
Property shall inure solely to the benefit of Licensor, and Licensee shall not,
nor permit any one else, to take any action that could be detrimental to the
goodwill associated with the Intellectual Property.
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4.5 Notwithstanding
any other provision herein, Licensee shall not, without the consent of the
Licensor, (i) distribute or share any of the Intellectual Property with a third
party; or (ii) modify, edit, or otherwise alter the Intellectual Property,
including any of the Copyrights.
5. INFRINGEMENT OR OTHER CLAIMS AGAINST
THIRD PARTIES. While the Agreement is still in effect,
Licensee shall notify Licensor promptly of any unauthorized use of the
Intellectual Property by others of which Licensee becomes
aware. Licensor shall thereafter, have the sole right, at Licensor’s
expense, to make any demand or bring any action on account of any such
unauthorized use. Licensee shall cooperate fully with Licensor, as
Licensor may reasonably request, in connection with any such action or demand
brought by Licensor in accordance with this Agreement. Licensor shall directly
pay all costs and expenses associated with such action or demand.
6. MUTUAL REPRESENTATIONS AND
WARRANTIES. Each party hereby represents, warrants and
covenants to the other that:
6.1 It
is a business entity duly organized and validly existing under the laws of its
jurisdiction of incorporation and that it has the power to execute, deliver, and
perform its obligations under this Agreement.
6.2 It
has all applicable powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
6.3 The
execution, delivery and performance of this Agreement by it has been authorized
by all necessary corporate action; and
6.4 To
each party’s knowledge, the execution, delivery and performance of this
Agreement by it does not and will not (i) violate its organizational documents,
(ii) violate any applicable law, judgment, injunction, order or decree, or (iii)
require any notice or consent or other action by any person under, constitute a
default under, or give rise to any right of termination, cancellation or
acceleration of any right or obligation of it or to a loss of any benefit to
which it is entitled under any agreement or other instrument binding upon it or
any license, franchise, permit or other similar authorization held by
it.
7. INDEMNIFICATION.
7.1 Each
party shall indemnify, defend and hold the other party, its affiliates and their
officers, directors, employees, agents, independent contractors and
representatives harmless from and against all damages, costs, expenses, and
liabilities, including, without limitation, reasonable attorneys fees and
expenses, (collectively “Losses”) arising from
claims, allegations or actions of third parties resulting from the Indemnifying
Party’s (i) breach of any representations, warranties or obligations of this
Agreement (ii) alleged negligence, recklessness or willful misconduct
or (iii) alleged violation of law.
7.2 Licensor
shall indemnify, defend and hold Licensee harmless from and against any
allegation, claim or action by a third party based on a claim that any of the
Intellectual Property violate such third party’s intellectual property
rights. Licensor will defend such action, claim, suit or proceeding
at its own expense and shall indemnify and hold Licensee harmless from and
against all Losses incurred by Licensee or arising in connection therewith.
Licensor shall have no liability or obligation to Licensee hereunder with
respect to any claim based upon (i) use of the Intellectual Property in an
application or environment or on a platform or with devices, if applicable, for
which the Intellectual Property was not designed or contemplated, (ii)
modifications, alterations, combinations or enhancements of the Intellectual
Property not created by Licensor, or (iii) any intellectual property in which
Licensee or any of its affiliates has an interest. Licensee shall
indemnify and hold Licensor harmless from all costs, damages, liabilities and
expenses (including reasonable attorneys' fees) arising from any claim based
upon items enumerated in clauses (i) through (iii) above.
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7.3 Licensee
shall indemnify, defend and hold Licensor harmless from and against any
allegation, claim or action by a third party based on the operation of
Licensee’s business or use of the Intellectual Property, other than in
connection with infringement as provided for above.
8. LIABILITY
LIMITATIONS. NEITHER PARTY SHALL BE RESPONSIBLE TO THE OTHER
PARTY WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE FOR
INCIDENTAL, SPECIAL, INDIRECT, OR CONSEQUENTIAL LOSS OR DAMAGE.
9. CONFIDENTIALITY. The
Licensee covenants and agrees that:
9.1 Licensee
shall hold in confidence and not directly or indirectly use, copy, reveal,
report, publish, disclose or transfer any of the Proprietary Information
(defined below) to any person or entity except as necessary for Licensee to
carry out its obligations or exercise its rights under this Agreement, or the
Management Agreement, or utilize any of the Proprietary Information for any
purpose not explicitly authorized hereunder, except that Licensee may disclose
the Proprietary Information to its employees, consultants, agents, and financial
and legal advisors (hereinafter “Consultants”),
provided such Consultants have a need to know and have agreed to keep the
Proprietary Information confidential. The limitations contained in
this Section 9 shall
continue (i) with regard to Confidential Information (defined below), for
the duration of this Agreement and for three (3) years thereafter, and
(ii) with regard to the Trade Secrets, for so long as such information
retains its status as a trade secret.
9.2 In
the event Licensee becomes legally compelled to disclose any of the Proprietary
Information, Licensee will provide to Licensor prompt notice so that Licensor
may seek a protective order or other appropriate remedy and/or waive compliance
with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or compliance with the
provisions of this Agreement is waived, Licensee will furnish only that portion
of the Proprietary Information which is legally required.
9.3 The
covenants and agreements contained in this Section 9 shall inure
to the benefit of, and may be enforced by, the successors and assigns of each
party and shall survive any termination of this Agreement, whether such
termination is at the instance of either party, and regardless of the reasons
therefore. The protection afforded hereunder is in addition to and does not
replace any prior confidentiality or nondisclosure obligation of one party to
the other.
As used
herein “Confidential
Information” shall mean any data or information other than the Trade
Secrets, without regard to form, that is of value to Licensor and is not
generally known to competitors of Licensor, which may include information
relating to its customers. Confidential Information also includes any
information contemplated hereunder which Licensor obtains from another party
which Licensor treats as proprietary or designates as confidential information,
whether or not owned or developed by Licensor.
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As used
herein “Proprietary
Information” shall mean the Trade Secrets and Confidential Information
collectively; provided that Proprietary Information shall not include any
materials or information that: (A) are or become publicly known or generally
utilized by others engaged in the same business or activities in which Licensor
utilized, developed or otherwise acquired such information; or (B) are known to
Licensee prior to Licensor’s disclosure pursuant to this Agreement, not having
been obtained from Licensor, and are evidenced by Licensee’s written records
prepared prior to the date of this Agreement; (C) are furnished to others by
Licensor with no restriction on disclosure or (D) are independently
developed. Failure to ▇▇▇▇ any of the Proprietary Information as
confidential shall not affect its status as Proprietary Information under this
Agreement.
10. SUB-CONTRACTOR
CONFIDENTIALITY. Subject to the applicable provisions of
Section 3.5 herein, If Licensee shall appoint any sub-contractor then Licensee
may, to the extent necessary, disclose the Proprietary Information to such
sub-contractor subject to such sub-contractor giving Licensee an undertaking in
similar terms to the provisions of Section
9.
11. REASONABLENESS;
REMEDIES. In the event either party is in breach, or threatens
to breach any covenants of this Agreement, the parties acknowledge and agree
that the other party would be greatly damaged and such damage(s) will be
irreparable and difficult to quantify; therefore, such aggrieved party may apply
for injunctive or other equitable relief to restrain such breach or threat of
breach, without impairing, invalidating, negating or voiding such party’s rights
to relief in either law or equity. In the event that any or all of the covenants
hereunder are determined by the court of competent jurisdiction to be invalid or
unenforceable, by reason that the breadth of restrictions is too great, or for
any other reason, these covenants shall be modified and interpreted to the
maximum extent to which they may be enforceable.
12. MISCELLANEOUS.
12.1 This
Agreement may not be transferred or assigned by either party, without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
12.2 The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted. No waiver by any party of any breach of any provision hereof shall
constitute a waiver of any other breach of that or any other provision
hereof.
12.3 The
parties acknowledge and agree that during the term of the Agreement, Licensor
shall be deemed to be an intended and named third party beneficiary of any
permitted sublicense agreements between Licensee and any
sublicensees.
12.4
The parties invoke the laws of the State of Georgia, USA, regarding the
protection of their rights and enforcement of their obligations hereunder, and
they mutually stipulate and agree that this Agreement is in all respects
(including but not limited to, all matters of interpretation, validity,
performance and the consequences of breach and termination) to be exclusively
construed, governed and enforced in accordance with the internal laws of the
State of Georgia, USA, excluding all conflict of laws rules, as from time to
time amended and in effect. Any action related to or arising out of
this Agreement shall be brought solely in a court of competent jurisdiction in
the state of Georgia, ▇▇▇▇ County, and the parties irrevocably commit to the
jurisdiction of said courts.
12.5 The
headings and captions used in this Agreement are for convenience of reference
only and shall in no way define, limit, expand or otherwise affect the meaning
or construction of any provision of this Agreement.
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12.6 All
notices under this Agreement required to be given hereunder shall be given in
writing and shall be delivered either by hand, by nationally recognized
overnight courier, fees pre-paid by sender, or by facsimile or email (with
confirmation copy sent by U.S. Mail) addressed to the receiving
party. Any such notice shall be deemed delivered upon the earlier of
actual receipt or three (3) days after deposit of such notice, properly
addressed and delivery fees paid, with the overnight courier, or at the time of
delivery by facsimile or email if such delivery is made by 5:00 o’clock p.m.
and, if not, as of 8:00 o’clock a.m. (local time of the receiving party) on the
next following business day.
12.7 Neither
party shall be responsible for any delay or failure in performing any part of
this Agreement when it is caused by fire, flood, explosion, war, strike,
embargo, government requirement, civil or military authority, act of God, act or
omission of carriers or other similar causes beyond its control.
12.8 This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall be deemed for all purposes
to constitute one and the same instrument.
12.9 The
parties hereto acknowledge and agree that any Sections which by their nature are
intended to survive the termination of this Agreement shall so survive,
including Sections 3.5, 4, 7, 8, 9, 10, 11 and 11.
12.10 Each
party is responsible for complying with all laws applicable to their performance
under this Agreement, including any restrictions under import and export
laws.
12.11 This
Agreement, including the recitals hereto, constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement, and
supersedes any prior agreements or understandings, whether oral or written,
between the parties with respect to such subject matter.
12.12 No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in a writing signed
by both of the parties.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.
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LICENSOR:
PREFERRED APARTMENT
ADVISORS,
LLC
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By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its:
President and Chief Executive Officer
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LICENSEE:
PREFERRED APARTMENT COMMUNITIES, INC.
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By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its:
President and Chief Executive
Officer
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