Exhibit 10.1
 
TRADEMARK LICENSE AGREEMENT
 
This Trademark License Agreement (“Agreement”) is dated as of January 11, 2013,
by and among Sardar Biglari (“Licensor”) and Biglari Holdings Inc., an Indiana
corporation (“Licensee”).
 
RECITALS
 
A.           Licensor is the owner of the right to use and license and/or
sublicense the name and mark Biglari (either alone or in connection with other
terms and/or designs) in connection with goods and services and in the public
name of businesses providing such goods and services, including, without
limitation, the names and marks listed and described in attached Schedule A (the
“Licensed Marks”).
 
B.           Licensor and Licensee enter this relationship to facilitate the
cooperative development and growth of the goodwill associated with the Licensed
Marks.  Licensee recognizes and acknowledges that all goodwill associated with
the Licensed Marks inures to the benefit of Licensor.
 
Now, therefore, in consideration of the foregoing and the mutual promises
contained herein, the parties have agreed as follows:
 
 
1.
License.

 
 
1.01
Licensor hereby grants to Licensee an exclusive license to use the Licensed
Marks in association with the provision of investment services, franchising
services, financial services, restaurant franchising (including business
management assistance in the establishment and/or operating of restaurants),
hospitality services, hotel management services, insurance services, restaurant
services, retail and retail related services, real estate services and apparel
(the products and services which are the subject of this Agreement are
hereinafter referred to as the “Products” and the “Services”) throughout the
world (the “Territory”), including any advertising and promotion associated
therewith. Licensor, in its reasonable discretion, by written notice to
Licensee, may add additional marks to Schedule A, and such marks shall be deemed
to be Licensed Marks hereunder. The foregoing license granted in this Paragraph
1.01 shall hereinafter be known as the “Trademark License.”   This license is
granted without warranties or assurances as to the registrability or
availability of the Licensed Marks.

 
 
1.02
Licensee shall not have the right to assign, transfer, or devise any rights
granted herein, except that Licensee shall have the right to grant sublicenses
hereunder, with Licensor’s approval, such approval not to be unreasonably
withheld or delayed.

 
 
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1.03
Notwithstanding the foregoing, Licensee (and its permitted sublicensees) shall
have the right to permit third parties to provide Services and produce and
manufacture Products or the packaging thereof for Licensee consistent with the
quality standards and other requirements of this Agreement for use in connection
with activities encompassed within the scope of the Products and Services.
Licensee (and its permitted sublicensees) will identify its Products and
Services and manufacturers for the Products to Licensor upon request. Licensee
agrees that any person or entity permitted to manufacture such Products shall be
prohibited from manufacturing, producing, selling, distributing, or shipping
Products other than to Licensee (or its permitted sublicensees). Licensee
further agrees to enforce such prohibition at its own expense and upon
reasonable demand by Licensor.

 
 
1.04
Any and all permitted sublicenses granted by Licensee shall be subject to the
terms hereof and must reflect and contain all the restrictions, protections and
provisions of this Agreement for the benefit of Licensor, and must be approved
in advance in writing by Licensor, whose approval will not be unreasonably
withheld or delayed.

 
 
1.05
Licensor retains the right to use and/or register his name, and variations
thereof, as a trademark or service mark in all media fields, including, but not
limited to, television, print publications, film, radio, personal appearances,
public addresses and other types of media.

 
 
2.
License Term.

 
 
2.01
This Agreement shall be effective as of the date hereof, and shall continue for
a period of twenty (20) years and continue thereafter for the duration of any
Royalty Period in force pursuant to Section 3 or until otherwise earlier
terminated under the provisions of this Agreement (the “Term”).

 
 
2.02
Upon (a) the expiration of the Term, (b) the death of Licensor, (c) the
termination of Licensor’s employment by Licensee for Cause (as defined below);
or (d) Licensor’s resignation from his employment with Licensee absent an
Involuntary Termination Event (as defined below), in any of such events if this
Agreement shall not have theretofore been terminated, the Licensed Marks for the
Products and Services, together with the attendant goodwill, shall transfer from
Licensor to Licensee without any compensation if Licensee is continuing to use
the Licensed Marks in the ordinary course of its business; otherwise, all rights
hereunder shall revert to Licensor.

 
 
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3.
Royalty.

 
 
3.01
For the purposes of this Agreement, the following definitions shall be
applicable:

 
 
(a)
“Cause” means (i) Licensor is convicted of a felony involving moral turpitude or
(ii) Licensor is guilty of willful gross neglect or willful gross misconduct in
carrying out his duties, resulting, in either case, in material economic harm to
Licensee.

 
 
(b)
“Change in Control” means (i) the consummation of a merger or consolidation of
Licensee with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or surviving
entity’s issued shares or securities outstanding immediately after such merger,
consolidation or other reorganization is owned, directly or indirectly, by
persons who were not shareholders of Licensee immediately prior to such merger,
consolidation or other reorganization; (ii) the sale, transfer or other
disposition of all or substantially all of Licensee’s assets; (iii) the
replacement of a majority of the Board of Directors of Licensee (the “Board”)
over a two-year period from the directors who constituted the Board at the
beginning of such period, and such replacement shall not have been approved by a
vote of at least a majority of the Board then still in office who either were
members of the Board at the beginning of such period or whose election as a
member of the Board was previously so approved; (iv) any transaction as a result
of which any person, other than Licensor or his affiliates, is the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of Licensee representing at
least 50% of the total voting power represented by Licensee’s then outstanding
voting securities.

 
 
(c)
“Involuntary Termination Event” means the occurrence of any of the following
without Licensor’s prior written consent: (i) a material diminution in
Licensor’s duties, or the assignment to Licensor of duties materially
inconsistent with his authority, responsibilities and reporting requirements,
including, without limitation, Licensor no longer having sole capital allocation
authority; (ii) the failure of the Board or a committee thereof to nominate
Licensor for election to the Board or to appoint him as Chairman of the Board
and Chief Executive Officer of Licensee, (iii) Licensee or the Board requires
Licensor to relocate his principal place of employment to a location other than
San Antonio, Texas unless such relocation is temporary or the result of exigent
circumstances; (iv) the failure of Licensee to obtain the assumption in writing
of its obligations to perform the Amended and Restated Incentive Bonus
Agreement, dated as of September 28, 2010, between Licensor and Licensee (as the
same may be amended from time to time, the “Incentive Agreement”) by any
successor to all or substantially all of the business or assets of Licensee not
later than the effective date of such transaction; or (v) a material breach of
the Incentive Agreement by Licensee.  In the event that Licensor elects to
terminate his employment due to an Involuntary Termination Event, he shall
notify Licensee in writing of the grounds for such termination within thirty
(30) calendar days of the commencement of such condition and Licensee shall have
thirty (30) calendar days from receipt of such notice to cure such condition.

 
 
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(d)
“Pre-Royalty Period” means the length of the Term prior to the Triggering Event.

 
 
(e)
“Revenues” means all revenues received by Licensee, its subsidiaries and
affiliates from (i) all Products bearing, and all Services associated with, a
Licensed Mark (which shall include, without limitation, the use of a Licensed
Mark in the public name of the business providing any Product or Service) (x) at
any time prior to a Triggering Event, regardless of whether the Licensed Mark is
used in connection with any such Products, Services or businesses following the
Triggering Event, or (y) or at any time after a Triggering Event, and  (ii) all
Products, Services and businesses that Licensee has specifically identified
prior to a Triggering Event will bear, use or be associated with a Licensed
Mark.

 
 
(f)
“Royalty Period” means (a) if Licensee or any of its subsidiaries or affiliates
continues to use a Licensed Mark on any Product or in association with any
Service, or continues to use “Biglari” as part of its corporate or public
company name, following the date that is three months after a Triggering Event,
then for such period of time equal to (i) the period of time during which
Licensee or any of its subsidiaries or affiliates continues any such use, plus
(ii) such period of time after Licensee, its subsidiaries and affiliates have
ceased all uses of the Licensed Marks and “Biglari” as part of any of their
corporate or public company names as shall be equal to the Pre-Royalty Period,
plus (iii) three years after the expiration of the Pre-Royalty Period or (b) if
Licensee, its subsidiaries and affiliates cease all uses of the Licensed Marks
and “Biglari” as part of any of their corporate or public company names within
three months after a Triggering Event, then for such period of time equal to the
Pre-Royalty Period plus three years after the expiration of the Pre-Royalty
Period; provided, that, notwithstanding the foregoing, in the case of either
clause (a) or (b) above, the minimum Royalty Period shall be five years after
the date of a Triggering Event.

 
 
(g)
“Triggering Event” means (a) a Change of Control of Licensee; (b) the
termination of Licensor’s employment by Licensee without Cause; or (c)
Licensor’s resignation from his employment with Licensee due to an Involuntary
Termination Event.

 
 
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3.02
Licensee shall be permitted to use the Licensed Marks as permitted hereunder
without the payment of any royalty to Licensor unless and until one or more
Triggering Events shall occur.  From and after the occurrence of a Triggering
Event, Licensee shall pay to Licensor a royalty equal to two and one-half
percent (2.5%) (the “Royalty”) of Revenues with respect to the Royalty
Period.  Royalties shall be payable in quarterly installments on January 31,
April 30, July 31 and October 31 for the immediately preceding calendar quarter
in which Revenues are received by Licensee or any of its subsidiaries or
affiliates.  All Royalties shall accrue upon collection by Licensee, its
subsidiary or affiliate, or payment, whichever occurs first.  At the time each
Royalty payment is due, Licensee will submit to Licensor complete and accurate
royalty statements in a form supplied by or approved by Licensor from time to
time, signed by an authorized officer of Licensee and certified by him/her as
accurate indicating all of the following information by month: (a) the total
Revenues during the period covered by such Royalty payment; and (b) computation
of the amount of Royalty for said period.  Receipt or acceptance by Licensor of
any statement furnished, or of any sums paid, by Licensee will not preclude
Licensor from questioning their correctness at any time up to three (3) years
after expiration or termination of this Agreement.  The obligation of Licensee
to pay royalties hereunder is absolute notwithstanding any claim that Licensee
may assert against Licensor and shall survive any termination of this Agreement
that occurs after the occurrence of a Triggering Event and prior to the
expiration of the Royalty Period.  Licensee will not have the right to set-off,
compensate or make any deduction from such Royalty payments for any reason
whatsoever.

 
 
3.03
Following the occurrence of a Triggering Event, nothing herein shall prevent
Licensor from using, and the license granted hereunder shall become
non-exclusive as to, the Licensed Marks in connection with any class of Products
or Services as to which Licensee has ceased all bona fide uses of the Licensed
Marks.  In addition, following a transfer of the Licensed Marks to Licensee
pursuant to Section 2.02, Licensor is hereby granted a non-exclusive,
royalty-free license to use the Licensed Marks on products and services that do
not compete with those offered by Licensee or any of its subsidiaries or
affiliates.

 
 
4.
Quality Control.  Without limiting any other provision of this Agreement, the
terms of this Section 4 shall apply equally to Licensee and to all permitted
sublicensees of Licensee, and the substance thereof must be contained in any
proposed sublicense agreement.

 
 
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4.01
Licensee agrees that the Products and Services covered by this Agreement will be
of high quality and that such Products and Services will be provided, designed,
manufactured, sold and distributed in full and complete compliance with all
applicable laws. To this end, Licensee shall, upon Licensor’s written request,
permit Licensor to inspect and approve the facilities and, upon Licensor’s
written request, any and all merchandise or promotional Products (“Product
Sample”) before manufacture or production, and any materials (whether in hard
copy or electronic form) used in providing or promoting Services (“Service
Sample”). Any Product Sample or Service Sample that contains any of the Licensed
Marks submitted to Licensor shall be deemed approved unless Licensor disapproves
the same in writing within thirty (30) days after receipt by Licensor. In the
event that Licensor notifies Licensee in writing that it disapproves of any
particular use of the Licensed Marks, whether or not it had been previously
submitted to Licensor for approval or approved by Licensor, Licensee shall
promptly phase out and cease such usage.

 
 
4.02
All promotional items and Products manufactured or assembled outside of the
United States shall be marketed in accordance with prevailing U.S. Customs and
Federal Trade Commission laws, rules and regulations and other applicable laws,
rules and regulations.

 
 
4.03
Licensee acknowledges that providing substandard Services or Products would have
an adverse effect upon the reputation of Licensor.   Accordingly, Licensee
agrees not to offer Services or Products of less than the quality standards
required hereunder.  In the event Licensor finds that any Products or Services
are not of acceptable quality, he may, by notice to Licensee, require that
Licensee improve such Products or Services or cease providing the same.

 
 
4.04
Licensor (directly or through its authorized agents) shall have the right to
inspect any of the premises upon which the Services are being provided upon
reasonable notice, at any time. If, at any time, Licensee fails to manufacture
or produce any of the Products or provide any of the Services in conformity with
the quality standards set forth herein, Licensor shall notify Licensee in
writing of any such deficiency. Licensee shall have ten (10) days within which
to cure such deficiency. If Licensee fails to cure any such failure, then
Licensor may, at its option (a) cure the failure and charge Licensee for the
expense of doing so, or (b) terminate this Agreement. In the event that the cure
cannot be accomplished within ten (10) days, but Licensee has made a good faith
effort to effect the cure, Licensor may extend the period to cure for a
reasonable time, at Licensor’s sole and absolute discretion.

 
 
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5.
Goodwill and Enforcement of Rights. All goodwill arising from the use of the
Licensed Marks shall inure to the benefit of Licensor.   Without limiting the
foregoing, Licensor shall have the sole and absolute right to defend and/or
enforce rights in the Licensed Marks, including but not limited to seeking
registration thereof and to bring any legal action against suspected
infringers.  Licensee will cooperate reasonably with Licensor in any such action
at Licensor’s expense.  At Licensee’s request, Licensor may, at its sole option
and discretion, grant permission and authorize Licensee to defend and/or enforce
rights in the Licensed Marks, in which case all costs of such action shall be
borne by Licensee.  Should Licensor request that Licensee register or enforce
any rights, Licensor shall reimburse Licensee for all costs of such action.

 
 
6.
Use of Licensed Marks. Without limiting any other provision of this Agreement,
the terms of this Section 6 shall apply equally to Licensee and to all permitted
sublicensees of Licensee, and the substance thereof must be contained in any
proposed sublicense agreement.

 
 
6.01
Licensee shall comply, within a period not to exceed thirty (30) days, with the
conditions set forth by Licensor, in writing, from time to time, with respect to
the nature, style, appearance and manner of use of the Licensed Marks. Licensee
may not make any use of the Licensed Marks that is not in compliance with this
Agreement, unless Licensee obtains the prior written permission of Licensor.
Licensor may, at its option, require that Licensee, at Licensee’s cost, place a
notice or notices acceptable to Licensor of Licensor’s registration of the
Licensed Marks.

 
 
6.02
Upon Licensor’s written request, Licensee shall provide Licensor, for prior
approval, copies of all advertising, promotional, public relations and marketing
materials containing any of the Licensed Marks (“Marketing Materials”) prior to
printing, publishing or distribution. Licensor shall not unreasonably withhold
approval of such Marketing Materials, and any disapproval shall specify the
basis for such disapproval. In the event that Licensor does not approve or
disapprove of such use within thirty (30) days of receipt, the use shall be
deemed to be approved. In the event that Licensor notifies Licensee in writing
that it disapproves of any particular Marketing Materials, whether or not they
had been previously submitted to Licensor for approval or approved by Licensor,
Licensee shall promptly phase out and cease such usage.

 
 
6.03
Licensee agrees not to use any of the Licensed Marks in connection with any
other trademark or service mark not owned by Licensor without the express
written permission of Licensor. If the foregoing is permitted by Licensor, any
combined or composite trademark shall be jointly owned by Licensor and Licensee
or its affiliate.

 
 
6.04
Licensor has approved the overall “look and feel” of Licensee’s website and
Licensee’s use of the Licensed Marks in connection therewith.  Licensee shall be
allowed to alter or amend its website in the normal course of business.  Should
Licensee wish to change the overall “look and feel” of the website, or the
manner in which the Licensed Marks are used in connection therewith, or if
Licensee wishes to use the Licensed Marks in connection with any additional
websites, Licensee shall submit the same to Licensor for Licensor’s prior
approval.

 
 
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7.
Termination.

 
 
7.01
Failure to comply with any term hereof shall constitute a breach of this
Agreement. Upon any breach, the non-breaching party shall provide written notice
to the breaching party, describing the nature of the breach. The breaching party
shall have ten (10) days within which to cure the breach. If the breach is not
cured within that period of time, the non-breaching party may elect to terminate
this Agreement, except as otherwise provided in Section 4.04. Termination of the
Agreement is effective upon receipt by the breaching party of the written notice
of termination.

 
 
7.02
Licensor may terminate this Agreement: (a) if any approved third party
sublicensee or any third party manufacturer permitted under Section 1.03 of this
Agreement breaches any of the terms of this Agreement and fails to cure the
breach within ten (10) days after notice from Licensor; or (b) if Licensee or
any approved third party sublicensee (i) becomes insolvent, (ii) files a
voluntary petition commencing any bankruptcy, reorganization, dissolution,
liquidation or similar proceedings against it or (iii) has filed against it any
involuntary bankruptcy, reorganization, dissolution, liquidation or similar
proceedings that are not dismissed within sixty (60) days.

 
 
7.03
Within six (6) months following the expiration or termination of this Agreement,
Licensee (and any sublicensees) must cease using the Licensed Marks and at
Licensor’s sole option shall destroy or allow Licensor to pick up all printed
matter, tangible matter, and Product bearing any of the Licensed Marks.

 
 
8.
Indemnification and Insurance. Without limiting any other provision of this
Agreement, the terms of this Section 8 shall apply equally to Licensee and to
all permitted sublicensees of Licensee, and the substance thereof must be
contained in any proposed sublicense agreement.

 
 
8.01
Licensee agrees to obtain, or cause to be obtained during the Term of this
Agreement, insurance which provides personal injury and property damage and
product liability coverage for any and all claims, suits, losses and damages
arising out of any Licensee’s use of the Licensed Marks or Licensee’s
association in any way with any Licensed Mark(s), including but not limited to
the operation of any Licensee business premises or facilities, the provision of
any Services, and/or the sale of any Products, including coverage for any
claims, suits, losses or damages arising out of negligence concerning the
provision of any Services or the design, manufacture, distribution or sale of
any Products, from an insurance company, acceptable to Licensor, providing
coverage and defense. The coverage for each occurrence shall be at least Five
(5) Million ($5,000,000) Dollars with the deductible or self-insurance retention
not greater than $100,000 or in such other amounts as Licensor may advise
Licensee. Licensee shall maintain or cause to be maintained public policy
coverage during the term of this Agreement. Licensor shall be named as an
additional insured and shall receive notice of any cancellation of insurance
from the insurance carrier not less than thirty (30) days prior to the effective
date of such cancellation.

 
 
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8.02
Licensee shall defend, indemnify and hold Licensor harmless from and against any
and all demands, claims, losses, damages, fines, assessments, costs, and
liability by reason of premise liability or Product defect or negligent design
or manufacture by or for Licensee, or failure to comply with any applicable law
or regulation, or arising in any way from Licensee’s operation of Licensee’s
business or its provision of any Products or Services.

 
 
9.
Notices. Except as otherwise set forth herein, any notices, statements or
payments required to be made or given under this Agreement shall be hand
delivered or sent via overnight courier, to the following persons and addresses
which may change or be modified at any time in writing by the receiving parties.

 
To Licensee:
 
Biglari Holdings Inc.
17802 IH 10 West, Suite 400
San Antonio, Texas 78257
Attention:  Bruce Lewis, Controller

 
To Licensor:
 
Sardar Biglari
c/o Biglari Holdings Inc.
17802 IH 10 West, Suite 400
San Antonio, Texas 78257

 
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10.
Miscellaneous.

 
 
10.01
Each of the parties represents and warrants to the other that he has, or its own
officer or other duly authorized representative executing this Agreement has,
the full right, power and authority to do so on his or its behalf.

 
 
10.02
This Agreement shall be construed without regard to the rule of presumption
requiring construction against the party who drafted the agreement, or caused it
to be drafted. Neither party shall be deemed to be the drafting party. The
parties hereto shall, and they hereby do, waive trial by jury with respect to
any action brought by a party hereto against the other party or to any other
matter arising out of or in any way connected with the Licensed Marks.

 
 
10.03
The parties agree that they have each read and understand this Agreement; they
understand its content and meaning; and they have executed it of their own free
will in accordance with their own judgment, after having the opportunity to
obtain the advice of counsel and having actually received the advice of counsel.
The parties acknowledge that they have not been coerced, influenced or induced
to execute this Agreement by any improper action.

 
 
10.04
To facilitate the execution of this Agreement by the parties, the parties may
execute it in counterparts, and the signature transmitted by facsimile or other
electronic means shall have the same force and effect as the original signature.

 
 
10.05
This Agreement shall be subject to, governed by and construed according to the
laws of the State of Texas, or, where applicable, United States federal law,
without regard to principles of conflicts of laws. Any dispute regarding or
relating to this Agreement shall be exclusively adjudicated in a court of
competent jurisdiction in the County of Bexar, State of Texas, and both parties
consent and waive any objection to such jurisdiction.

 
 
10.06
No term or provision hereof shall be construed to be waived by either party, and
no breach excused by either party, unless such waiver or consent is in writing,
signed on behalf of the party against whom the waiver is asserted. No consent by
either party to, or waiver of, a breach by either party, whether express or
implied, will constitute consent to, waiver of, or excuse of any other,
different, or subsequent breach by either party. This Agreement may not be
amended except by a written instrument signed by the parties.

 
 
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10.07
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior negotiations and
agreements unless otherwise provided. Each party acknowledges and agrees by
executing this Agreement that it is not relying upon any representation or
promise whatsoever that is not contained herein and that any such representation
or promise is acknowledged to be immaterial. Accordingly, each party to this
Agreement waives the defense or claims of fraud in inducement or mistake of law
or fact to any claim arising out of, based on, or related to this Agreement,
except with respect to the express representations set forth in this Agreement.

 
 
10.08
The provisions of Sections 8 shall survive and remain in force after expiration
or termination of this Agreement.

 
 
10.09
This Agreement shall be binding upon and inure to the benefit of each party’s
heirs, successors, and permitted assigns.

 

 
[Signature page follows]

 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
 
LICENSOR:
       
/s/ Sardar Biglari
 
Sardar Biglari
       
LICENSEE:
           
Biglari Holdings Inc., an Indiana Corporation
     
By:
/s/ Bruce Lewis    
Name:
Bruce Lewis    
Title:
Controller

 
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SCHEDULE A
 

 
Biglari

Biglari Holdings