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Bankruptcy clause

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Definition Edit

A bankruptcy clause is a clause in a contract that specifies what will happen to the contract if a party to the contract files for bankruptcy.

Sample clause Edit

All rights and licenses granted under this Agreement (other than with respect to trademarks) by Licensor to Licensee are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101 of the Bankruptcy Code. The parties agree that Licensee, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code. The parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Licensor under the Bankruptcy Code, Licensee shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and same, if not already in its possession, shall be promptly delivered to Licensee upon Licensee’s written request (i) upon any such commencement of a bankruptcy proceeding, unless Licensor elects to continue to perform all of its obligations under this Agreement; or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Licensor. [Licensee shall have the sublicensable right to modify, adapt and prepare derivative works based on such intellectual property [for any purpose] [only for maintenance and support purposes] [only for internal development purposes] [only for maintenance, support and internal development purposes].]

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