KARMALOOP, INC.,1 REQUEST FOR PAYMENT OF … › cmsvol2 › pub_46937 › 536906_338-5.pdf · Karmaloop, Inc., a Delaware corporation with its principal offices at 334 Boylston Street,

61045259.1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x In re: : Chapter 11 : KARMALOOP, INC.,1 : Case No. 15-10635 (KJC) : Debtor. : (Jointly Administered) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE PURSUANT TO 11 U.S.C. 503(b)(1)

Third Estate LLC dba Dope Couture (“Claimant” or “Third Estate”), by and through its

undersigned attorneys, hereby requests the entry of an order, pursuant to 11 U.S.C. § 503(b)(1),

allowing Claimant an administrative expense claim in the amount of $50,000. In support of its

Request, Claimant states as follows:

JURISDICTION

1. This Court has jurisdiction over this Request pursuant to 28 U.S.C. §157 and

1334(b). This matter is a core proceeding pursuant to 28 U.S.C. §157(b)(2)(A) and (B). Venue is

proper in this District pursuant to 28 U.S.C. §1408 and 1409.

BACKGROUND

2. Claimant Third Estate LLC owns the following trademarks:

No. 4,075,682 IC25 No. 4,403,067 IC25 No. 4,338,806 IC28 No. 4,387,143 IC14 No. 4,414,043 IC41

1 Jointly Administered with KarmaloopTV, Inc., Case No. 15-10636 (KJC)

Case 15-10635-MFW Doc 338 Filed 07/06/15 Page 1 of 3

61045259.1

No. 4,442,533 IC25 No. 4,075,682 IC25 No. 4,414,044 IC25 No. 3,972,067 IC25

(Collectively, “Dope Marks”).

3. On or about July 18, 2014, Third Estate and the Debtors entered into a licensing

agreement granting the Debtors authorization to sell DOPE apparel bearing certain of the Dope

Marks on a print to order basis “exclusively through licensee’s PLNDR online retailer service,

located at plndr.com.” See Exhibit A (“Licensee will make Products available for sale

exclusively through PLNDR.com and shall not utilize any other means or avenue of sales.”)

(“Licensing Agreement”).

4. On or about March 4, 2015, Third Estate gave the Debtors notice that they were

acting in breach of the Licensing Agreement and that such breach also constituted trademark

infringement. Due to the breach, Third Estate terminated the Licensing Agreement.

5. On March 23, 2015 (the “Petition Date”), each of the above-captioned debtors

(collectively, the “Debtors”) filed a voluntary petition for relief under chapter 11 of title 11 of the

United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the

District of Delaware (the “Court”).

6. After the Petition Date, the Debtors continued to sell apparel with Third Estate’s

DOPE Marks, in breach of the provisions of the Licensing Agreement and without making

payment to Third Estate. Such sales resulted in revenues for the Debtors and in increased value

for the sale of the Debtors’ business. The continued use of Third Estate’s property was in breach

of the Licensing Agreement and infringed on the DOPE Marks—the Debtors sold apparel

bearing Third Estate’s Dope Marks through its Karmaloop.com website without authorization.

See Exhibit B.


61045259.1

7. The Debtors ignored Third Estate’s cease and desist letter of March 4, 2015, and

continued to sell infringing apparel through at least May, 2015.

8. As of the date of this Request, Third Estate has not received payment.

RELIEF REQUESTED

9. Claimant respectfully requests that this Court allow Claimant’s administrative

expense claim and order immediate payment to Claimant in the amount of $50,000 as the actual,

necessary costs of preserving the estate, pursuant to section 503(b)(1) of the Bankruptcy Code.

10. Third Estate reserves any right to assert claims against the Debtors for amounts not

contemplated by this Request or allowed by the Court pursuant to section 503(b)(1) and to amend,

modify and/or supplement this Request, as appropriate under the circumstances.

CONCLUSION

WHEREFORE, Claimant respectfully requests that the Court enter an order substantially in

the form attached hereto as Exhibit C: (i) allowing Third Estate’s administrative expense claim and

ordering payment to Claimant in the amount of $50,000 pursuant to section 503(b)(1) of the

Bankruptcy Code and (ii) granting such other and further relief as may be just and proper under the

circumstances.

Dated: July 6, 2015 ROBINS KAPLAN LLP

/s/ Scott F. Gautier__________________

Scott F. Gautier, Esq. 2049 Century Park East, Suite 3400 Los Angeles, California 90067 Telephone: (310) 552-0130 Facsimile: (310) 229-5800 [email protected]

Attorneys for Third Estate LLC


EXHIBIT A

Case 15-10635-MFW Doc 338-1 Filed 07/06/15 Page 1 of 4

Print to Order License Agreement

This Agreement (the "Agreement") is made this ,2014 (the "Effective Date"), by and between Karmaloop, Inc., a Delaware corporation with its principal offices at 334 Boylston Street, 5 th Floor, Boston, Massachusetts, (the "Licensee") and DOPE with its principal offices at [1451 E. 4th Street suite 103, LA, CA 90033] (the "Licensor").

Licensor owns the trademarks set forth in Exhibit A hereto in the United States and in other countries of the world, and their associated applications/registrations, any common law rights thereto, and any additional marks mutually agreed upon by the parties from time to time (collectively, the "Marks").

Licensor owns product designs and graphics, and all rights thereto, including, but not limited to copyrights (collectively, the "Designs").

Licensee wishes to use the Marks and Designs as set forth in Exhibit A in connection with the manufacture of apparel products (the "Products"), and with the sale of Products through Licensee's PLNDR online retail service, located at pindr.com ("PLNDR").

1. Grant. Licensor hereby grants to Licensee a license to utilize all trademarks set forth in Exhibit A hereto solely with respect to the sale and distribution of Products through PLNDR.com and in accordance to the terms contained within this agreement.

2. Territory. The territory of the License shall be the universe (the "Territory").

3. Term. The initial term of this Agreement shall start on the last date of execution below and shall continue thereafter in perpetuity. Any party can terminate this Agreement by providing written thirty (30) day notice to the other party notifying them of their desire to terminate the Agreement.

4. Approvals. Licensee shall submit to Licensor photographic renderings of all Designs for approval prior by Licensor within ten (10) calendar days of receipt. Any renderings submitted to Licensor which are not approved or disapproved in writing within ten (10) days of receipt by Licensor shall be deemed approved. If Licensor requires that any changes be made to the renderings, such changes must be made by Licensee in a prompt fashion and at no cost to Licensor. Licensor shall have the right, but is not required, to request up to four (4) different physical samples of the Products for review prior to their sale or distribution ("Final Samples"). Any Final Samples submitted to Licensor shall be approved or disapproved within ten (10) days and any Final Samples which are not approved or disapproved in writing within ten (10) days of receipt by Licensor shall be deemed approved. Any requested changes to Final Samples by Licensor shall be made by Licensee in a prompt fashion and at no cost to Licensor.

5. Sales & Pricing. Licensee will make Products available for sale exclusively through PLNDR.com and shall not utilize any other means or avenue of sales. All prices shall be set by Licensee and Licensor in agreement and in accordance to fair market values

6. Payment. In consideration for the granting of the License by the Licensor to the Licensee, the Licensee shall pay to Licensor an eighteen percent (18%) (the "Royalty") of net sales of any and all Products. Products shall be considered sold or distributed on the date when such Products are billed, invoiced, shipped or paid for, whichever occurs first. Licensee shall pay Licensor Royalties on a weekly basis within seven (7) days following the close of each week.

7. Royalty Reports. Upon request of Licensor, Licensee shall provide a monthly Royalty Report identifying Net Sales corresponding with the Royalty payment in question, certified as accurate by an authorized officer of Licensee. All payments and reports under this Agreement shall be sent and made payable to Licensor.

8. Right to Audit. Licensee shall keep and maintain accurate books of account and records covering all transactions relating to this Agreement. Licensor or its Authorized Representative shall have the right to audit Licensee's book of account and records during reasonable business hours in order to verify the accuracy of all payments provided and received in connection with this Agreement. If the audit discovers a deficiency in any


ja YA,se)-1 Printed Name

S Title

7/1 C( ti Date

payment made or to be made in connection with this Agreement, Licensee shall immediately pay such deficient amount.

9. Confidentiality. Each party acknowledges that during the course of performance of this Agreement, it may have access to the other party's Confidential Information, whose value may be impaired by misuse or by disclosure to third parties. The receiving party agrees that it will not disclose such Confidential Information to third parties, or use such Confidential Information except to perform this Agreement. The receiving party will take reasonable precautions to protect the confidentiality of Confidential Information. Following the termination of this Agreement, neither party shall disclose nor use Confidential Information disclosed by the other party for any purpose, unless otherwise agreed in writing by the disclosing party. All Confidential Information shall remain the property of the disclosing party or destruction, as the disclosing party may direct. The receiving party shall not make or retain any copies of any of the Confidential Information.

10. Representations and Warranties. Licensor represents and warrants that (i) the Designs are, in their entirety. original works created and authored by Licensor, (ii) Licensor owns all rights in the Marks and Designs necessary to grant the License to Licensee, including, but not limited to trademark rights and copyrights, and (iii) Licensee's use of the Marks and Designs will not infringe the rights, including intellectual property rights, of any third party to the best of its knowledge.

11. Assignment. Licensee shall not assign or transfer this Agreement, or any part of it, without Licensor's prior written consent and payment of an additional Initial Payment.

12. Integration & Modification. This agreement supersedes all written or oral agreements, if any, between the parties and constitutes the entire and only agreement pertaining to the work to be performed under this agreement. Except as provided for change orders, this agreement can be modified only in writing signed by both parties. This Agreement may only be modified in a writing executed by the party to be charged.

13. Severability & Waiver. If any portion of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force and without being impaired or invalidated in any manner. The waiver by either party of a breach of any provision of this Agreement by the other must be in writing to be effective and will not operate or be interpreted as a waiver of any subsequent breach.

14. Joint Drafting. Titles or headings to the sections of this Agreement are not part of the terms of this Agreement and are included only for convenience. If an ambiguity or question or intent or interpretation arises, this Agreement shall be construed as though it were drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

AGREED TO AND ACCEPTED

I Karmaloop, Inc. ODOPEJ

By

By

OVA1 Printed Name

CO4CA Al-a3eLl 6?■ Title

71 . /. 22111( Date /

2


1909 80’s Script BlockedBarbar Born to Be Dope Bright Lights

Brushstroke Camo Avenue Camo ParisCamo Love Cartoon

Circle Script Collegiate Doom Dope Love IIDope Love 8 Dopest

Dripping Paris Easy-E Escher GalaxyFoil Love

Interlock Logo Kush Leopard Avenue LV MotifMilan

No Hope No Dope Peer Pressure Pineapple Pixelated Logo Purple KushPotted Plant

Script Logo Shattered Sinking Skating Paris Snakeskin LoveSmoke Me

Splatter Stencil Logo Sunset Interlock The Avenue Wire LogoTouring

Broken Logo

Dripping


EXHIBIT B


25% OFF SITEWIDE NO MINIMUM SPEND! | USE CODE: COLDSNAP DETAILS

GENDER

STORE

DEPARTMENT

PRICE

TAGS

SEARCH

BRANDS COLORS TAGS

Sort by: Relevance 1 2View: 40

We found 43 items for the search term "DOPE."

Filter by:Male (37)Unisex (5)Female (1)

Kazbah (29)Karmaloop (14)

Clothing (24)Accessories (18)Home & Tech (1)

Under $20 (13)$20 to $40 (19)$40 to $60 (3)$60 to $80 (3)$80 to $100 (2)Over $100 (3)

Drop Ship (43)On Sale (17)

DOPEPrecise Snapback$50.00

DOPETie Dye Socks$22.00

DOPETie Dye Socks$22.00

DOPEGITD Superior Socks$26.00

TRBLMKRSDope BLACK$32.99

TribesDope Boy Throw Pillow$30.00

toodopeToo Dope Drip Shorts$32.00

toodopeToo Dope Soccer Shirt (GREEN)$28.99

NEW BRANDS MEN'S WOMEN'S TRENDING SALE LIFESTYLE

KARMALOOP PLNDR KAZBAH BRICK HARBOR BLOG SIGN IN 0 VIEW BAGSearch...

Page 1 of 4DOPE Search Results| Karmaloop.com

3/4/2015http://www.karmaloop.com/search?Keywords=DOPE


| USE CODE: COLDSNAP DETAILS

TribesDope Boy IPhone Case (Iphone 5 5s)$35.00

FabuLyssSilver Arabic Life Bracelet$24.00

New Jack City VintageDesigner Watch Crewneck$68.00

King IceKing Ice Black Wolf T-Shirt$30.00

King Ice16MM Run DMC Inspired Blackout Rope Hip Hop Dookie Chain$80.00




THE WALARTThe High Art Bifold Wallet$15.00

BLOODBATHArena French Terry Jacket - Black$88.00

King IceRun DMC Fat 14K Gold Rope Dookie Chain Bracelet$24.00

King IceKing Ice Antique Gold Saber-Tooth Tiger Ring$30.00







King Ice14K Yellow Gold Plated Square Snake Chain$40.00

Forever StrungChain Gang 5-panel hat$33.00

King IceSilver Plated Square Snake Hip Hop Chain$40.00

G Fox & CoThe Ryoko Digital Watch$250.00

G Fox & CoThe Kyoto Digital Watch$250.00

Refinement Clothing Co.How To Start A Streetwear Brand: A Digital Book$19.99

DOPEThe Dope Love 2 Tee in Black$19.95 $40.00 50% off

DOPEThe Avenue Crewneck Sweatshirt in Maroon$32.95 $65.00 49% off

DOPEThe Circle Script Tee in Mint$19.95 $40.00 50% off

DOPEThe Love Galaxy Tee in Black$19.95 $40.00 50% off

DOPEThe Collegiate Crewneck Sweatshirt in Heather Grey$23.95 $65.00 63% off

DOPEThe Interlocking Logo Hoodie in Black$39.95 $70.00 43% off







HOME

ABOUT KARMALOOP

CAREERS

BRANDS

VERSION: 14.3.13.34001

PRIVACY

GIFT CERTIFICATES

INFORMATION

FACEBOOK

TWITTER

YOUTUBE

FLICKR

TUMBLR

EMUZE

PINTEREST

VIMEO

KARMALOOP RSS/XML

CONNECT

KLX

KAZBAH

PLNDR

MONARK PROGRAM

AFFILIATES

REP TEAM

NETWORK

HELP CENTER

LIVE CHAT

CONTACT US

SHIPPING

RETURNS

HELP

1 2

GET OUR APPS | GO TO MOBILE SITE

TOP BRANDS:10 Deep | Billionaire Boys Club | BLACK SCALE | Civil | Crooks and Castles | Diamond Supply Co. | Dimepiece | DOPE | Elwood | Fly Society

Herschel Supply | HUF | Jeffrey Campbell | LRG | Married to the Mob | Mitchell & Ness | Obey | Rocksmith | Staple | Vans

DOPEThe Interlocking Logo Raglan in Black and White (Black Sleeves)$27.95 $55.00 49% off

DOPEThe Milan Tee in White$19.95 $40.00 50% off

TRBLMKRSThe Dope Two Tee in Black$14.95 $40.00 63% off

TRBLMKRSThe Dope Tee in Red$14.95 $36.00 58% off

TRBLMKRSThe Dope Tee in Navy$14.95 $36.00 58% off

THE WALARTThe Totally Dope Bifold Wallet$9.95 $15.00 34% off

TRBLMKRSThe Dope Crewneck Sweatshirt in Red$26.95 $60.00 55% off

TRBLMKRSThe Dope Tee in White$14.95 $36.00 58% off

GET $10 NOW! Email Cell (optional) (?) SUBSCRIBEM F






HOME

ABOUT KARMALOOP

CAREERS

BRANDS

VERSION: 14.3.13.34001

PRIVACY

GIFT CERTIFICATES

INFORMATION

FACEBOOK

TWITTER

YOUTUBE

FLICKR

TUMBLR

EMUZE

PINTEREST

VIMEO

KARMALOOP RSS/XML

CONNECT

KLX

KAZBAH

PLNDR

MONARK PROGRAM

AFFILIATES

REP TEAM

NETWORK

HELP CENTER

LIVE CHAT

CONTACT US

SHIPPING

RETURNS

HELP

GENDER

STORE

DEPARTMENT

PRICE

TAGS

SEARCH

BRANDS COLORS TAGS

Sort by: Relevance 1 2View: 40

1 2

We found 43 items for the search term "DOPE."

Filter by:

GET OUR APPS | GO TO MOBILE SITE

TOP BRANDS:10 Deep | Billionaire Boys Club | BLACK SCALE | Civil | Crooks and Castles | Diamond Supply Co. | Dimepiece | DOPE | Elwood | Fly Society

Herschel Supply | HUF | Jeffrey Campbell | LRG | Married to the Mob | Mitchell & Ness | Obey | Rocksmith | Staple | Vans

Male (37)Unisex (5)Female (1)

Kazbah (29)Karmaloop (14)

Clothing (24)Accessories (18)Home & Tech (1)

Under $20 (13)$20 to $40 (19)$40 to $60 (3)$60 to $80 (3)$80 to $100 (2)Over $100 (3)

Drop Ship (43)On Sale (17)

TRBLMKRSThe Dope Tee in Heather Grey$14.95 $36.00 58% off

CaligraphyMisChief Tribal Pattern Sweatshirt$65.00 $80.00 19% off

THE WALARTThe Graffiti Bifold Wallet$7.95 $15.00 47% off

GET $10 NOW! Email Cell (optional) (?) SUBSCRIBEM F

25% OFF SITEWIDE NO MINIMUM SPEND! | USE CODE: COLDSNAP DETAILS



Page 1 of 1Search Results| Karmaloop.com

3/4/2015http://www.karmaloop.com/search.htm


COPE

DOPE

The Flocked Logo Tee in Black

$15.95 844.49 60% off

DOPE

The Overt Tee in Red

$28.95 $88799 20% off

DOPE

The Circle Script Tee in Mint

$19.95 $40799 50% off

DOPE

The Love Galaxy Tee in Black

$19.95 $40798 50% off

2/25/2015 Shop DOPE Accessories and Clothing - Karmaloop.com

KARMALOOP PLNDR KAZBAH I BRICK HARBOr 1 Search... I SIGN IN CO VIEW BAG

NEW BRANDS MEN'S TRENDING SALE LIFESTYLE

40% OFF FEBRUARY MUST-HAVES! NO MINIMUM! I USE CODE: FEBRRR DETAILS ■

HOME DOPE

FILTERED BY: Sort by: Newest Arrivals

View: 40

Brands: DOPE

CATEGORY

MEN'S ■ Accessories

■ Clothing

M=A1‘,.ii;

DOPE

The Live Rich Take Trips LS Tee in White

$34.00

*Intimates Boutique

(1)

00Nothing (25)

00Nothing (3)

1 Voice (7)

10 Deep (6)

101 Apparel, Inc. (1)

()I

Blacks (6)

Grays (1)

Greens (1)

Reds (2)

Whites (3)

FM FYQ,

Sale (12)

Limited Edition (1)

0

P

DOPE DOPE DOPE

The Collegiate Crewneck The Dope Boy Socks in The Dope by Dope Sweatshirt in Heather Grey White Snapback in Black

$23.95 866799 63% off $5.95 V-2799 50% off $15.95 840799 60% off

http://www.karmaloop.com/browse/dope 1/2


EXHIBIT C


61051987.1

EXHIBIT C

Proposed Order



ORDER APPROVING REQUEST AND AUTHORIZING PAYMENT OF THIRD ESTATE’S ADMINISTRATIVE EXPENSE CLAIM

PURSUANT TO 11 U.S.C. 503(b)(1)

Upon the timely request of Third Estate LLC dba Dope Couture (“Claimant” or “Third

Estate”), for the entry of an order, pursuant to 11 U.S.C. § 503(b)(1), allowing Claimant, and

authorizing the payment of, an administrative expense claim in the amount of $50,000; the Court

finding that such claim is for the actual, necessary costs and expenses of preserving the Debtors’

estates and sufficient cause appearing therefore, it is hereby

ORDERED that the request for payment of an administrative expense of $50,000 to Third

Estate is hereby approved; and it is further

ORDERED that pursuant to section 503(b)(1)(A) of the Bankruptcy Code, the Debtors’

shall immediately pay to Third Estate the amount of $50,000 within 5 days of the date hereof; and it

is further



61051987.1

ORDERED that this Court retains jurisdiction with respect to all matters arising from or

related to the implementation of this Order.

Dated: ________________, 2015 _________________________________________

The Honorable Kevin J. Carey United State Bankruptcy Judge


61052031.1



CERTIFICATE OF SERVICE

I, Scott F. Gautier do hereby certify that a true and correct copy of the foregoing Request for

Payment of Administrative Expense Pursuant to 11 U.S.C. 503(b)(1) was served on July 6, 2015

upon the parties on the attached service list by first class mail and via electronic notification on

those parties who receive CM/ECF notices in the above-captioned cases.

Dated: July 6, 2015

ROBINS KAPLAN LLP

/s/ Scott F. Gautier__________________ Scott F. Gautier, Esq. 2049 Century Park East, Suite 3400 Los Angeles, California 90067 Telephone: (310) 552-0130 Facsimile: (310) 229-5800 [email protected]

Attorneys for Third Estate LLC



61052031.1

SERVICE LIST

Office of the U.S. Trustee:

Office of the United States Trustee for the District of Delaware 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801

Counsel to Debtors:

Steven K. Kortanek, Esquire Ericka F. Johnson, Esquire Morgan L. Patterson, Esquire Womble Carlyle Sandridge & Rice LLP 222 Delaware Ave., Suite 1501 Wilmington, DE 19801

Counsel to Debtors:

Scott H. Moskol, Esquire Michael V. Samarel, Esquire Burns & Levinson LLP 125 Summer Street Boston, MA 02110


Documents

KARMALOOP, INC.,1 REQUEST FOR PAYMENT OF … › cmsvol2 › pub_46937 › 536906_338-5.pdf · Karmaloop, Inc., a Delaware corporation with its principal offices at 334 Boylston Street,