LICENSE AGREEMENT
AGREEMENT ('Agreement') entered into as of February 1, 1996, ('Effective
Date') by and between White Consolidated Industries, Inc., a Delaware
Corporation, having its principal office at 11770 Berea Road, Cleveland, Ohio
44111 ('Licensor'), and Salton/Maxim Housewares, Inc., a Delaware Corporation,
having its principal office at 550 Business Center Drive, Mt. Prospect,
Illinois 60056 (hereinafter referred to as 'Licensee').
WHEREAS, Licensor is the owner of the trademark White-Westinghouse and
associated designs and trade dress (together, the 'Trademark'), and is using
the Trademark throughout the World, and
WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use the Trademark, and
WHEREAS, Licensee is in the business of manufacturing, distributing and
selling articles described and specified hereinafter (the 'Products'), and
desires to secure the license, right and permission to use the Trademark upon,
and in connection with, the manufacturing, distributing and selling of such
Products; and
WHEREAS, the Products that are the subject of this Agreement have been
defined by the parties as small kitchen appliances listed on Exhibit A hereto
(and any other articles which the parties mutually agree to be subject to the
provisions of this Agreement which, in accordance with the terms of this
Agreement, bear the Trademark (collectively, the 'Trademarked Product').
WHEREAS, Licensor desires to grant to Licensee, and Licensee desires to
accept from Licensor, a license to use the Trademark in the design,
manufacture, advertising, sale and promotion of the Products, subject to each
of the terms, provisions and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions contained herein, the parties hereto do
hereby agree as follows:
ARTICLE 1
GRANT OF LICENSE AND DESIGNATION OF TRADEMARK PRODUCTS
Effective upon the execution of this Agreement, Licensor hereby grants to
Licensee, for the period hereinafter specified and upon the terms, provisions
and conditions of this Agreement, the exclusive right and license to use the
Trademark within the geographic area described in Article 2 hereof, in the
design, manufacture, advertising, sale and promotion of the Trademarked
Product.
In the event of any good faith disputes between the parties to this
Agreement regarding the definition of Trademarked Product, the final decision
regarding such definition shall rest in Licensor's sole and absolute
discretion. The rights granted to Licensee herein are limited to use
on or in connection with the Trademarked Product and Licensee
specifically agrees not to use the Trademark in any manner or on any product,
service or item, except as set forth in this Agreement.
ARTICLE 2
GEOGRAPHIC AREA
The rights granted to Licensee hereunder may be exercised by Licensee within
the USA and Canada (the 'Territory'), and Licensee shall have exclusive rights
with respect to the use of the Trademark in connection with the Trademarked
Product. Upon Licensee's request, Licensor may, in its discretion, extend the
areas in which Licensee may exercise said rights, but any such extension shall,
in each instance, be evidenced by a written and duly executed amendment to this
Agreement for such periods and upon such terms and conditions as shall be
determined by Licensor. From time to time Licensor may wish to purchase
Trademarked Product for sale outside the Territory. Licensee agrees to sell
Trademarked Product to Licensor at the same price Licensee sells Trademarked
Product to its best customer.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LICENSOR
3.1 ORGANIZATION AND POWER. Licensor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Licensor
has all corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
3.2 AUTHORIZATION. The execution, delivery and performance by Licensor of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on the part of Licensor is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.
3.3 NO VIOLATION. Licensor is not subject to nor obligated under its
certificate of incorporation or bylaws, any applicable law, rule or regulation
of any governmental authority, or any agreement, instrument, license or permit,
or subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.
3.4 OWNERSHIP OF TRADEMARK. Licensor is the owner of the Trademark and, to
Licensor's knowledge, the use of the Trademark in the design, manufacture,
advertising, sale and promotion of any of the Trademarked Product will not
infringe any intellectual property or any other rights of any third party.
3.5 RIGHT TO GRANT LICENSE. Licensor has the full right, power and authority to
grant the license as set forth in Article 1 hereof.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LICENSEE
4.1 ORGANIZATION AND POWER. Licensee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Licensee has all corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
4.2 AUTHORIZATION. The execution, delivery and performance by Licensee of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on the part of Licensee is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.
4.3 NO VIOLATION. Licensee is not subject to nor obligated under its
certificate of incorporation or bylaws, any applicable law, rule or regulation
of any governmental authority, or any agreement, instrument, license or permit,
or subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.
ARTICLE 5
TERM OF AGREEMENT
5.1 CONTRACT TERM. The Contract Term of this Agreement commence on the date
first mentioned above and ending on June 30, 1998 at midnight Eastern Standard
Time, unless sooner terminated pursuant to the terms of this Agreement.
5.2 EXTENSION TERMS. Licensor hereby grants to Licensee the option to extend
the term of this Agreement for up to thirteen (13) one (1) year periods
commencing as of July 1, 1998 and ending on June 30, 2011, at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement
with such extended term(s) to be subject to the same terms and conditions as
provided herein except that as a condition to the extension term(s), Licensee
must achieve specified levels of Minimum Sales during the then preceding
Contract or Extension Term of this Agreement as set forth in Article 8 hereof.
Such options to extend the term of this Agreement must be exercised by
Licensee, if at all, by giving written notice to Licensor at least one hundred
and twenty (120) days prior to the expiration of the then preceding Contract or
Extension Term of this Agreement as set forth in Article 8 hereof. Either
party may terminate this Agreement without cause, provided however, that such
termination shall not be permitted within the first 5 (five years) following
the Effective Date of this Agreement. Notice of termination must be given in
writing to the other Party hereto 1 (one) year prior to the termination date.
Licensee shall have the right to sell off inventory of Trademarked Product in
accordance with Article 21. Neither Licensor nor Licensee shall be liable for
any compensation or damages by reason of such early termination.
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ARTICLE 6
ROYALTIES
6.1 EARNED ROYALTIES. Subject to of Article 7 hereof, Licensee shall pay to
Licensor for the rights granted hereunder a sum equal to the following
percentages of the Net Invoice Value of Trademarked Products Sold by Licensee
(the 'Royalties'):
Trademark Products
------------------
Wholesale Price as Follows
--------------------------
Under $10.00/Unit $10.00 or More/Unit
----------------- -------------------
Contract Term 2.0% 3.0%
First Extension Term 3.0% 3.0%
Second and Third Extension Term(s) 3.0% 3.5%
Fourth and Future Extension Term(s) 3.0% 4.0%
The Royalties shall be remitted in accordance with Section 7.4 of this
Agreement.
6.2 DEFINITION OF NET INVOICE VALUE. As used throughout this Agreement, the
term 'Net Invoice Value' shall mean the aggregate of the invoiced amounts of
Trademarked Product sold by Licensee, less (a) returned goods, refunds, credits
and allowances actually made or allowed to customer with respect to Trademarked
Product, (b) freight or handling charges charged to customers or incurred on
returned goods, and (c) sales and excise taxes actually paid ('NIV').
Article 7
MINIMUM ROYALTY PAYMENTS
7.1 MINIMUM ROYALTIES. Notwithstanding anything to the contrary set forth
herein, Licensee shall pay to the Licensor aggregate, cumulative Minimum
Royalties by the end of the Contract Term and any applicable Extension Term as
follows (The Per Term Minimum Royalties is for information purposes only):
Per Term in Thousands Cumulative
Contract Term $146.2 Thousand $146.2 Thousand
First Extension Term 136.5 Thousand 282.7 Thousand
Second Extension Term 211.2 Thousand 493.9 Thousand
Third Extension Term 316.9 Thousand 810.8 Thousand
Fourth Extension Term 409.5 Thousand 1,220.3 Thousand
Fifth Extension Term 491.4 Thousand 1,711.7 Thousand
Sixth Extension Term 589.2 Thousand 2,300.9 Thousand
Seventh Extension Term 707.5 Thousand 3,008.4 Thousand
Eighth Extension Term 848.6 Thousand 3,857.0 Thousand
Ninth Extension Term 1,019.2 Thousand 3,876.2 Thousand
Tenth Extension Term 1,221.7 Thousand 6,097.9 Thousand
Eleventh Extension Term 1,467.4 Thousand 7,568.3 Thousand
Twelfth Extension Term 1,760.9 Thousand 9,326.2 Thousand
Thirteenth Extension Term 2,113.5 Thousand 11,439.7 Thousand
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7.2 INITIAL ROYALTY PAYMENT. Licensee shall pay Licensor an initial royalty
payment (the 'Initial Royalty Payment') of fifty thousand dollars ($50,000)
upon execution of this Agreement. The Initial Royalty Payment shall be
applied against the first Royalties payable pursuant to Section 7.4 of this
Agreement.
7.3 MINIMUM ROYALTY PAYMENTS. To the extent that the aggregate, cumulative,
Minimum Royalties set forth above exceeds the aggregate, cumulative Earned
Royalties paid to Licensor by the end of the Contract Term or Extension Term,
as applicable, Licensee shall pay Licensor such excess with the Royalty payment
for the last fiscal quarter of the Contract Term or such Extension Term, as
applicable, in accordance with Section 7.4
7.4 APPLICATION OF EARNED ROYALTIES. The Earned Royalties to be paid under
Article 6 shall be applied against the Minimum Royalties due under this Article
7, and Licensee shall pay by each due date specified in this Article 7 the sum
of: (i) the Minimum Royalties as specified above; plus (ii) the excess, if any,
of the Earned Royalties (per Article 6) over the Minimum Royalties for the then
current term payable by such due date (such sum hereinafter referred to as the
'Royalty Payment'). Each Royalty Payment, payable in US currency, shall be
remitted by check at Licensor's address as provided in this Agreement.
7.5 QUARTERLY REPORTS OF SALES AND ROYALTY PAYMENTS. On or before the twentieth
(20th) day of each January, April, July and October during the Contract Term
and any Extension Term, Licensee shall deliver to Licensor the following: (i) a
written statement, certified to be true and correct by the Chief Financial
Officer of Licensee, setting forth the Gross and NIV sales for each Trademarked
Product during the preceding calendar quarter and a calculation of the
Royalties payable under Article 6 and 7 of this Agreement for such period, and
(ii) a check payable to Licensor in full payment of the amount due under
Article 6 and 7 of this Agreement for such period. Each Royalty payment,
payable in US currency, shall be remitted by check at Licensor's address as
provided in this Agreement.
ARTICLE 8
MINIMUM SALES OF TRADEMARKED PRODUCT
8.1 FAILURE TO MEET REQUIRED MINIMUM SALES. Licensee shall use its best efforts
advertise and sell Trademarked Product in the Territory during the term of this
Agreement. Should Licensee fail to achieve the aggregate, cumulative NIV sales
set forth below in this Article 8 (the per term NIV sales is for information
purposes only), then Licensor may, at its option, elect to terminate this
Agreement by written notice delivered to Licensee within sixty (60) days after
the
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end of any period in which Licensee failed to achieve such required
minimum sales. Such termination shall be effective upon delivery of said notice
but shall not affect Licensee's outstanding indebtedness to Licensor or any of
the provisions relating thereto.
NIV Sales per Term Cumulative NIV Sales
Contract Term $9.0 Million $9.0 Million
First Extension Term 7.0 Million 16.0 Million
Second Extension Term 10.0 Million 26.0 Million
Third Extension Term 15.0 Million 41.0 Million
Fourth Extension Term 18.0 Million 59.0 Million
Fifth Extension Term 21.6 Million 80.6 Million
Sixth Extension Term 25.9 Million 106.5 Million
Seventh Extension Term 31.1 Million 137.6 Million
Eighth Extension Term 37.3 Million 174.9 Million
Ninth Extension Term 44.8 Million 219.7 Million
Tenth Extension Term 53.7 Million 273.4 Million
Eleventh Extension Term 64.5 Million 337.9 Million
Twelfth Extension Term 77.4 Million 415.3 Million
Thirteenth Extension Term 92.9 Million 508.2 Million
ARTICLE 9
ADVERTISING AND ART WORK
9.1 ADVANCE SUBMISSION. Licensee shall submit to Licensor for approval all
advertising and promotional items, programs and materials relating to the
Trademarked Product at least fourteen (14) days prior to intended usage.
Licensor shall provide Licensee with written approval or disapproval within ten
(10) business days after Licensor's receipt thereof. Should Licensor
disapprove, its written notice shall explain in detail the reasons for
disapproval so that Licensee may prepare and submit new advertising and art
work.
9.2 ART WORK. Licensor shall make available to Licensee any and all necessary
film, photostats, artwork and full color reproductions of its Trademark,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.
9.3 EXPENSE REIMBURSEMENT. Licensee shall reimburse Licensor's reasonable
out-of-pocket expenses, including, reasonable hourly charges for creative
personnel incurred by Licensor in the preparation for Licensee, when and if
required, of new artwork, mechanicals, and film. All charges shall be agreed
to prior to the time such expenses are incurred, and all sums due to Licensor
under this Article 9 shall be paid by Licensee upon receipt of an appropriate
invoice.
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ARTICLE 10
LICENSEE'S RECORDS
Licensee shall keep and maintain at its regular place of business separate and
complete books and records of all business transacted by Licensee in connection
with the Trademarked Product, including, but not limited to, books and records
relating to Gross and NIV of sales and orders for Trademarked Product. Such
books and records shall be maintained in accordance with generally accepted
accounting principles and procedures consistently applied. Licensor or its
duly authorized agents or representatives shall have the right to inspect said
books and records at Licensee's premises during Licensee's regular business
hours upon reasonable prior notice to Licensee.
ARTICLE 11
LICENSEE'S ANNUAL REPORTS AND ANNUAL ROYALTY PAYMENTS
On or before the fifteenth (15th) day of the second (2nd) month following the
end of Licensee's fiscal year, Licensee shall render to Licensor a statement
certified by Licensee's Chief Financial Officer disclosing gross and NIV value
of sales, Royalties due and Royalties paid for Licensee's preceding fiscal
year, and for any Contract or Extension Term which ended within said fiscal
year. If said statement discloses that Licensee has paid Royalties in excess
of the amounts required to be paid, Licensor shall apply said excess to the
next Royalty payment or, if no further Royalty payments are due, such excess
shall be remitted to Licensee.
ARTICLE 12
AUDIT BY LICENSOR
If Licensor so chooses, it may (at its expense, except as provided below) cause
its independent accountants to audit or review, upon reasonable prior notice to
Licensee, all books and records of Licensee pertaining Trademarked Product.
Licensor shall deliver to Licensee not later than sixty (60) days from
Licensor's receipt of the applicable Report a statement describing its
objections (if any) to Licensee's determination of the Royalties for the
applicable period. Each of Licensor and Licensee shall use reasonable efforts
to resolve any such disputes, but if a final resolution is not obtained within
thirty (30) days after Licensor has submitted its objections, any remaining
disputes will be resolved by an accounting firm mutually agreeable to Licensor
and Licensee (the fees and expenses of such firm to be paid by Licensor, except
as provided below). If Licensor and Licensee are unable to mutually agree on
such an accounting firm, a 'big-six' accounting firm shall be selected by lot
after eliminating one firm designated as objectionable by each of Licensor and
Licensee. The determination of any accounting firm so selected shall be
conclusive and binding upon the parties. In the event any such audit or review
as finally determined pursuant to this Article 12 shall disclose that Licensee
has underpaid Royalties for any reporting period, Licensee shall forthwith upon
written demand of Licensor pay the amount, if any, by which the Royalties owing
exceed Royalties paid, plus interest of ten percent (10%) per annum on such
amounts, accruing from the date on which such amounts were due to the date on
which sum amounts are paid. Should such audit disclose that the Royalties paid
exceeded
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the Royalties due, any excess amount revealed by such audit will be
remitted to Licensee. If Licensor causes its own independent accountants to
review the Reports described herein and the effect of such review as finally
determined pursuant to this Article 12 is that the amount of the Royalties for
the applicable period is understated by two percent (2%) or more, then Licensee
shall pay the reasonable costs of Licensor's independent accountant and the
reasonable costs of any mutually selected accountant or other accountant
selected pursuant to this Article 12.
ARTICLE 13
LICENSEE OBLIGATIONS
13.1 LICENSEE DILIGENCE. Licensee shall use its best efforts to sell
Trademarked Product. Licensor shall have the right to terminate this Agreement
upon written notice to Licensee in the event that Licensee shall fail to sell
any Trademarked Product for a period of ninety (90) consecutive days.
13.2 LICENSOR INSPECTION RIGHTS. Licensor shall have the right upon reasonable
prior notice to Licensee to inspect any of Licensee's facilities pertaining to
the Trademarked Product during regular business hours. Licensor shall conduct
such inspection in the presence of an officer, partner or authorized
representative of Licensee.
13.3 NO COMPETITION WITH TRADEMARKED PRODUCT. During the term of this
Agreement, Licensee shall not enter another license Agreement for products
that would directly compete with the Trademarked Product.
ARTICLE 14
APPROVALS AND QUALITY STANDARDS
14.1 ADVANCE APPROVAL. Prior to any use of any Trademark, Licensee shall, at
Licensee's expense, submit to Licensor, for Licensor's written approval, the
following: (a) two (2) specimens of each Product on which the Trademark is to
appear (the 'Specimens'); (b) all artwork which Licensee intends to use in
connection with the Trademark; and (c) all packaging, advertising and
promotional literature which Licensee intends to use in the marketing or
merchandising of the Trademarked Product. Licensor shall give Licensee written
notice of approval or disapproval within ten (10) business days from its
receipt of the Specimens, and should Licensor disapprove, its written notice
shall explain in detail the reasons for disapproval so that Licensee may
prepare and submit new specimens and/or samples.
14.2 STANDARDS. After Licensor has given its written approval of said
Specimens, then the approved product, quality, packaging, advertising and
promotional literature shall be the standard for all Trademarked Product
produced thereafter (the 'Approved Quality').
14.3 PERIODIC SAMPLES. Thereafter, consecutively at four (4) month intervals,
Licensee shall, at Licensee's expense, submit to Licensor not less than two (2)
randomly selected production run samples of the Trademarked Product.
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14.4 APPROVED QUALITY STANDARDS. Without the prior written approval of
Licensor, Licensee shall not sell or distribute any Trademarked Product which
deviates from the Approved Quality more than the deviation which would occur
as a result of normal deviations in raw material characteristics.
14.5 PRODUCT SERVICING AND REPAIRS. Licensee will propose, in a timely manner,
a mechanism by which Licensee will respond to inquiries from consumers and third
party appliance repair vendors regarding the operation of Trademarked Product
and the procedures for obtaining parts for, or repairs to, Trademarked Product
which mechanism shall be designed to minimize any confusion with Licensor's
existing customer service operations.
14.6 PERIODIC REVIEW MEETINGS. Licensee will conduct periodic meetings with
Licensor to review Licensee's progress and performance under the terms of this
Agreement.
ARTICLE 15
RESTRICTIONS UPON SUBCONTRACTS
Licensee shall not enter into subcontracts for the manufacture of Trademarked
Product without the express written consent of Licensor, which consent shall
not be unreasonably withheld. Licensee is responsible for the work of any
subcontractor and for any debts, obligations or liabilities incurred by any
such subcontractor in connection with the Trademark Product. Licensee shall
discontinue using any subcontractor who shall fail to comply with the Approved
Quality standards.
ARTICLE 16
ASSIGNMENT; TRANSFERS; SUBLICENSE
Except as otherwise explicitly provided herein, Licensee may not enter into any
sublicense for the use of the Trademark by others. This Agreement shall not be
assignable by Licensee without the prior written consent of Licensor. Such
consent shall not be unreasonably withheld, except that no such prior written
consent shall be required for any assignment of this Agreement by Licensee to a
successor in interest of Licensee as a result of any merger, consolidation or
other corporate reorganization involving Licensee or a sale by Licensee of a
substantial part of its assets provided that no more than twenty percent (20%)
of the business of such successor (measured by revenues) competes directly with
Licensor.
ARTICLE 17
NO DILUTION OF TRADEMARK OR ATTACK UPON TRADEMARK
17.1 LIMIT ON USE. Licensee shall not at any time use, promote, advertise,
display or otherwise publish any Trademark or any material utilizing or
reproducing any Trademark in whole or in part, except as specifically provided
in this Agreement, without the prior written consent of Licensor, which consent
shall not be unreasonably withheld.
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17.2 NOTICE. Licensee shall cause to appear on all Trademarked Product and on
all materials on, or in connection with which, any Trademark is used, such
legends, markings, and notices as may be required by law to give appropriate
notice of all trademark, trade name or other rights therein or pertaining
thereto.
17.3 MATERIALS AND DOCUMENTS. Licensee shall provide all materials and execute
all documents required by law incident to the maintenance and/or preservation
of the Trademark and Licensor's rights therein.
17.4 NO CONTEST OF TRADEMARK VALIDITY. Licensee shall not contest the validity
of the Trademark or any rights of Licensor therein, nor shall Licensee
willingly become an adverse party in litigation in which others shall contest
the Trademark or Licensor's said rights. In addition thereto, Licensee shall
not in any way seek to avoid its obligations hereunder because of the assertion
or allegation by any persons, entities or government agencies, bureaus, or
instrumentalities that any Trademark is invalid or ineffective or by reason of
any contest concerning the rights of Licensor therein.
17.5 NO OTHER TRADEMARK PROTECTION. Licensee shall not seek any state, Federal,
foreign or other statutory trademark or service mark or other protection for
the Trademark as they are used in connection with the Licensee's goods or
services and all use of the Trademark shall be for the sole benefit of
Licensor.
ARTICLE 18
INFRINGEMENT AND OTHER TRADEMARK LITIGATION
18.1 TRADEMARK DEFENSE. Licensee shall apprise Licensor immediately upon
discovery of any possible infringement of the Trademark which comes to the
attention of Licensee. Licensor, at its sole cost and expense, and in its own
name, may prosecute and defend any action or proceeding which Licensor deems
necessary or desirable to protect the Trademark, including but not limited to
actions or proceedings involving their infringement. Upon written request by
Licensor, Licensee shall join Licensor at Licensor's sole expense in any such
action or proceeding. However, Licensee shall not commence any action or
proceeding to protect the Trademark or any action or proceeding alleging
infringement thereof without the prior written consent of Licensor. Licensee
may prosecute and defend, at its sole expense and in its own name, any action
or proceeding to protect its designs or styles. Any and all damages recovered
in any action or proceeding commenced by Licensor shall belong solely and
exclusively to Licensor.
18.2 NO LIABILITY FOR VIOLATION. Licensor shall have no liability to Licensee
or any other person, nor shall there be by any right of contribution
against Licensor therefor, for any action or proceeding alleging any violation
of any antitrust, trade regulation, or similar statute, or for unfair
competition. Furthermore, in the event of any threatened or actual action or
proceeding in which Licensee and Licensor are or may be charged with jointly
violating any antitrust, trade regulation or similar statute, or any law
pertaining to unfair competition, Licensee may, at its
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option, elect to be represented in such threatened or actual action or
proceeding by Licensor's counsel at no cost to Licensee for fees, costs or
expenses. Should Licensee elect in such event to be represented by Licensor's
counsel, then Licensee shall relinquish any right to control or direct such
threatened or actual action or proceeding and Licensor shall maintain full
control thereof. Such representation of Licensee shall continue only so long
as Licensor's counsel, in its sole and absolute discretion, believes that it
may properly and ethically represent both Licensor and Licensee. In the event
that Licensor's counsel decides that it may no longer properly and ethically
represent both Licensor and Licensee, then Licensor's counsel shall continue to
represent Licensor only, and Licensee's continued defense shall be at
Licensee's sole expense and shall be conducted by separate counsel.
ARTICLE 19
ADDITIONAL RESTRICTIONS UPON USE OF THE TRADEMARK
It is the intention of the parties hereto and the purpose of this Article 19
that all of the Trademarked Product be identified to the general public by the
Trademark. Licensee shall use a registration indicator in the form of a
circled-R or 'TM' symbol in conjunction with the Trademark when so instructed
by the Licensor. Licensee further agrees to assist Licensor, at Licensor's
expense, in obtaining registrations for the Trademark in the event any
Trademark is not yet registered for the Trademarked Product. Licensee shall use
notice language in the manufacture, sale, advertising or other promotion of the
Trademarked Product as follows:
'White-Westinghouse is a registered trademark of White Consolidated Industries,
Inc., and is used under license' or other such language as Licensor designates
in writing.
ARTICLE 20
DEFAULTS BY LICENSEE
20.1 DEFAULTS. Except as otherwise expressly provided in this Agreement, in
the event Licensee shall default in the performance of any of the terms,
conditions or obligations to be performed by Licensee hereunder, and if such
default involves the payment of money and the same shall not be cured
within ten (10) days after Licensor gives written notice to Licensee of such
default, or if such default involves performance other than the payment of
money and the same is not cured within fifteen (15) days after Licensor gives
written notice to Licensee of such default, then and in any such event,
Licensor may immediately and without prior notice terminate this Agreement and
all of the rights and obligations hereunder (except as otherwise expressly
provided by this Agreement). In the event that a Receiver is appointed to, or
one or more creditors take possession of all, or substantially all, of the
assets of Licensee, or if Licensee shall make a general assignment for the
benefit of creditors, or if any action is taken or suffered by Licensee under
any state or Federal insolvency or bankruptcy act, then this Agreement and all
of the rights and obligations hereunder (except as otherwise expressly provided
by this Agreement) shall immediately, and without notice or need of any further
action by any party hereto, terminate.
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20.2 TIME FOR PERFORMANCE. The time for performance of any act required of
either party shall be extended by a period equal to the period during which
such party was reasonably prevented from performance by fire, flood, storm, or
other like casualty beyond such party's control.
ARTICLE 21
LICENSOR'S RIGHTS UPON TERMINATION
21.1 RIGHTS UPON TERMINATION. In the event this Agreement is terminated for
any reason, or expires according to its terms, Licensee shall assign,
transfer and transmit to Licensor any and all rights of Licensee in the
Trademark, including associated goodwill, and shall not thereafter manufacture,
sell, or use the Trademark in any manner; provided that Licensee may continue
to use the Trademark in connection with the advertising and sale of Trademarked
Product and may continue to use the Trademark in connection with the
manufacture of Trademarked Product, which are in the process of being completed
at time of said termination, for two hundred and seventy (270) days after the
termination of this Agreement; further provided, however, that all sums then
due to Licensor pursuant to this Agreement have first been paid; and further
provided, that Licensee shall, within thirty (30) days after said termination,
deliver to Licensor a detailed schedule of all inventory of Trademarked Product
in Licensee's possession (constructive or otherwise). After the expiration of
the aforesaid 270 day period, Licensee shall destroy all Trademarked Product
and packaging and promotional material remaining in Licensee's possession which
are identified in any manner by or with the Trademark. Notwithstanding the
above, Licensor shall have the right to purchase such excess stock of
Trademarked Product, in whole or in part, prior to any sale or offer of sale by
Licensee to any third party, for an amount equal to the wholesale cost of such
Trademarked Product as indicated in Licensee's then current catalogue.
21.2 CONTINUATION OF AGREEMENT TERMS. Licensee shall continue to abide
by the terms of this Agreement with respect to such Trademarked Product during
the 270 day period specified in Section 21.1 of this Agreement. Upon
termination of the aforesaid 270 day period, all labels, signs, packages,
wrappers, cartons, circulars, advertisements, and other items bearing or
containing any reproduction or representation of any Trademark shall
automatically and without cost to Licensor become the property of Licensor, and
Licensee shall immediately deliver the same to Licensor's place of business or
other location designated by Licensor. The reasonable cost of such delivery
shall be paid by Licensor.
21.3 LICENSEE'S OBLIGATIONS. The termination of this Agreement for any reason
shall not relieve Licensee of any accrued obligations to Licensor nor shall such
action relieve Licensee of any obligation or duty which accrued on or after the
termination or expiration of this Agreement.
21.4 NO RIGHT IN LICENSEE. Except for the right to use the Trademark as
specifically provided for in this Agreement, (i) Licensee shall have no right,
title or interest in or to the Trademark; and (ii) upon and after the
termination of this Agreement, all rights granted to Licensee hereunder,
together with any interest in and to the Trademark that Licensee may acquire,
shall forthwith and without further act or instrument be assigned to and revert
to the Licensor. In
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addition, Licensee shall execute any instruments requested by Licensor
to accomplish or confirm the foregoing. Any such assignment, transfer or
conveyance shall be without consideration other than the mutual agreements
contained herein.
21.5 SURVIVAL OF TERMS. The provisions of this Article 21 shall survive the
termination (or expiration) of this Agreement.
ARTICLE 22
LICENSOR COVENANT
During the Contract Term or Extension Terms hereof, Licensor agrees that it will
not, either alone or acting together with a third party, manufacture, market,
sell or distribute any Product in the Territory, provided that during the final
ninety (90) days of any Contract or Extension Term hereof, and upon
prior written notice to Licensee, Licensor shall have the right to design and
manufacture such products and to negotiate and conclude such agreements as it
desires pursuant to which it may grant licenses to any party or parties of any
or all of the rights herein granted to Licensee; provided, however, that no
such products shall be shipped by Licensor or any third party other than
Licensee prior to the expiration or termination of this Agreement (exclusive of
the additional two hundred seventy (270) day period as provided in Article 21
hereof).
ARTICLE 23
GOODWILL
Licensee acknowledges and recognizes that the Trademark is of substantial
significance and value to Licensor and that said Trademark has acquired
valuable secondary meaning, value and goodwill. Except as may be otherwise
specified in this Agreement, Licensee shall not use any Trademark or any name
or symbol similar thereto as part of its name or symbol or as part of the name
or symbol of any corporation, partnership, joint venture, proprietorship or
other entity or person which it controls or with which it is affiliated.
ARTICLE 24
INSURANCE
Licensee shall at all times carry product liability insurance with respect to
the Trademarked Product with a limit of liability of not less than $2 million
and Licensor shall be named therein as an additional insured as its interests
may appear. Such insurance may be obtained in connection with a policy of
product liability insurance which covers products other than the Trademarked
Product and shall provide for at least thirty (30) days prior written notice to
Licensor of the cancellation or substantial modification thereof. Licensee
shall deliver to Licensor a certificate evidencing the existence of such
insurance policies promptly after their Issuance.
ARTICLE 25
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AGENTS, FINDERS AND BROKERS
Each of the parties to this Agreement shall be responsible for the payment of
any and all agent, brokerage and/or finder commissions, fees and related
expenses incurred by it in connection with this Agreement or the transactions
contemplated hereby and shall indemnify the other and hold it harmless from any
and all liability (including, without limitation, reasonable attorney's fees
and disbursements paid or incurred in connection with any such liability) for
any agent, brokerage and/or finder commissions, fees and related expenses
claimed by its agent, broker or finder, if any, in connection with this
Agreement or the transactions contemplated hereby. Licensor's sole
agent/finder/broker in connection with this Agreement is Leveraged Marketing
Corporation of America ('LMCA') with offices at 156 West 56th Street, New York,
New York 10019. All commissions, fees, and/or other monies due LMCA in
connection with this Agreement shall be borne exclusively by Licensor as per
the Agency Agreement of March 1, 1995.
ARTICLEE 26
RESERVED RIGHTS
Rights not herein specifically granted to Licensee are reserved by Licensor and
may be used by Licensor without limitation. Any use by Licensor of such
reserved rights, including but not limited to the use or authorization of the
use of any Trademark in any manner whatsoever not inconsistent with Licensee's
right hereunder, shall not be deemed to be interference with or infringement or
any of Licensee's rights.
ARTICLE 27
APPLICABLE LAW
This Agreement shall be construed and governed, in all respects, by the law of
the State of Ohio applicable to contracts made and to be performed in that
state without reference to any provisions relating to conflicts of law. Any
legal action or proceeding of any sort against Licensor by or on behalf of
Licensee shall be brought in a court of competent jurisdiction in Cuyahoga
County, Ohio.
ARTICLE 28
NON-AGENCY OF PARTIES
This Agreement does not constitute or appoint Licensee as the agent or legal
representative of Licensor, or Licensor as the agent or legal representative of
Licensee, for any purpose whatsoever. Licensee is not granted any right or
authority to assume or to create any obligation or responsibility, express or
implied, on behalf of or in the name of, Licensor or to bind Licensor in any
manner or thing whatsoever, nor is Licensor granted any right or authority to
assume or create any obligation or responsibility, express or implied, on
behalf of or in the name of Licensee, or to bind Licensee in any manner or
thing whatsoever. No joint venture or partnership between the parties hereto
is intended or shall be inferred.
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ARTICLE 29
AMENDMENTS AND WAIVERS
This Agreement may be amended or modified only in a writing executed by the
parties hereto, and either party hereto may waive any of its rights hereunder
or performance by the other party of any of its obligations hereunder, only by
instrument in writing. In the event either party hereto shall at any time
waive any of its rights under this Agreement or the performance by the other
party of any of its obligations hereunder, such waiver shall not be construed
as a continuing waiver of the same rights or obligations, or a waiver of any
other rights or obligations.
ARTICLE 30
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties as to the
Trademark Products, and supersedes all prior agreements and understandings
relating to the subject matter hereof.
ARTICLE 31
SEPARABILITY OF PROVISIONS
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully
severable. This Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid or enforceable.
ARTICLE 32
COUNTERPARTS; HEADINGS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. The headings herein are set out for convenience of reference only
and shall not be deemed a part of this Agreement.
ARTICLE 33
BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and, subject to the provisions of Article 16 of this Agreement,
their respective permitted successors and assigns.
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ARTICLE 34
INDEMNIFICATION
34.1 LICENSOR INDEMNIFIED PARTIES; BASIC INDEMNIFICATION. For purposes of this
Section, 'Licensor Indemnified Parties' refers to Licensor and officers,
directors, employees and agents of Licensor. Licensee shall indemnify and hold
harmless the Licensor Indemnified Parties and each of them from and against the
costs and expenses (including, without limitation, reasonable attorneys fees
and costs) of any and all claims, suits, losses, damages, costs, demands,
obligations, investigations, causes of action, and judgments arising out of:
(a) the actual or alleged unauthorized use by Licensee of any trademark
(including, without limitation, the Trademark), patent, process, method
or device;
(b) the actual or alleged infringement by Licensee of any copyrights,
trade name or patent or any act by Licensee held to constitute libel,
slander or defamation;
(c) the invasion by Licensee of the right of privacy, publicity, or other
property right;
(d) the failure to perform of, or any defect in, or use of, the Trademark
Product, including without limitation any injuries to the person or to
property arising therefrom;
(e) the infringement or breach of other personal or property right of any
person, firm or corporation by Licensee, its officers, employees,
agents, or anyone directly or indirectly acting by, through, on behalf
of, or pursuant to contractual or any other relationship with Licensee;
and
(f) Licensee's sales and/or promotional efforts; provided, however, that the
indemnification obligations of Licensee pursuant to this Article 34
shall not apply with respect to any of the events set forth in (a)
through (f) above to the extent that such event is attributable to any
event described under Section 34.2 hereof as to which Licensor shall
indemnify Licensee.
34.2 LICENSEE INDEMNIFIED PARTIES; BASIC INDEMNIFICATION. For purposes of this
Section, 'Licensee Indemnified Parties' refers to Licensee and officers,
directors, employees and agents of Licensee. Licensor shall indemnify and hold
harmless the Licensee Indemnified Parties and each of them from and against the
cost and expenses (including, without limitation, reasonable attorneys' fees
and costs) of any and all claims, suits, losses, damages, costs, demands,
obligations, investigations, causes of action, and judgments arising out of any
assertion or allegation by any persons, entities or government agencies that
any Trademark infringes any trademark, trade name or any other personal or
property right of a third party.
34.3 INDEMNIFICATION FOR BREACH. Each party hereto shall indemnify and forever
hold harmless the other party against and from any and all claims, suits,
losses, damages, costs, obligations, liabilities, judgments, damages and
expenses, including without limitation, reasonable attorneys'
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fees arising out of breach or alleged breach by such party of any
provision of this Agreement, or any misrepresentation made by such party herein
or any act not expressly authorized herein.
34.4 SURVIVAL OF TERMS. The provisions of this Article 34 shall survive the
termination (or expiration) of this Agreement.
ARTICLE 35
INFORMATION
35.1 CONFIDENTIALITY. Licensor and Licensee may from time to time disclose to
each other sales, engineering, applications, drawings, designs and any other
knowledge, information, techniques, know-how or data pertaining to the
manufacture, use, application, marketing, distribution and sale of the
Trademarked Product or other products of Licensor or Licensee (the
'Information'). Each party hereto shall hold in confidence all such data and
information and shall not disclose such data and information except to such
personnel and employees as are necessary for the effective performance of this
Agreement or as otherwise permitted by this Agreement. Licensor and Licensee
shall cause all data, documents or other written or printed materials embodying
the Information to be plainly marked to indicate the secret and confidential
nature thereof and to prevent unauthorized access thereto, or reproduction or
use thereof. Licensor and Licensee shall take any necessary action, including
court proceedings, to comply and to compel compliance with the provisions of
this Article 35. The obligations undertaken by Licensor and Licensee pursuant
to this Article 35 shall not apply to any such data or information which is or
becomes published or otherwise generally available to the public without fault
of a party hereto or is otherwise lawfully acquired by a party hereto and such
obligations shall, as so limited, survive the expiration or termination of this
Agreement. Upon termination of this Agreement, either Party hereto may request
the prompt return of all written materials received from the other Party
including originals, copies, extractions, translations and reproductions
thereof. This Agreement is not intended to and shall not be construed to give
either Party any vested right, title or interest in the Trademarked Product or
the Information.
35.2 SURVIVAL OF TERMS. The provisions of this Article 35 shall survive the
termination of this Agreement.
ARTICLE 36
PUBLIC ANNOUNCEMENTS
Unless expressly approved in advance in writing by the other party,
neither party shall make any public announcement regarding the subject matter
or existence of this Agreement except as required by law. If such announcement
is required by law, the announcing party shall give the other party reasonable
notice of such announcement and shall consult with the other party regarding
such announcement.
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ARTICLE 37
ADDRESSES FOR NOTICE
All notices, statements, consents, instructions or other documents required or
authorized to be given hereunder shall be in writing, and shall be delivered
personally to an officer, partner or authorized representative of the other
party or by facsimile and confirmed by certified mail, return receipt
requested, addressed to the parties concerned as follows:
to Licensee at: Salton/Maxim Housewares, Inc.
550 Business Center Drive
Mt. Prospect, Illinois 60056
Facsimile: 708-803-8080
with copies to: Neal Aizenstein, Esq.
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Facsimile: 312-876-7934
and to Licensor at: White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
Facsimile: 216-252-8158
with copies to: Ms. M. Sharon Schiller, Trademark Counsel
White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111,
Facsimile 216-252-8158
and
Mr. Allan R. Feldman
Leveraged Marketing Corporation of America
156 West 56th Street
New York, New York 10019
Facsimile: 212-581-1461
and shall be deemed to have been given upon receipt.
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IN WITNESS WHEREOF, this Agreement is executed on the day and year first
written above.
White Consolidated Industries, Inc. (Licensor)
__________________________________________________
By: Stanley R. Miller
Assistant Secretary
Salton/Maxim Housewares, Inc. (Licensee)
__________________________________________________
By: William B. Rue
Senior Vice President/COO
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EXHIBIT A
[*]
irons
can openers
mixers
food processors
electric knives
popcorn makers
toaster
toaster ovens
coffee makers
espresso/cappuccino makers
bread machines
pasta makers
doughnut makers
woks
pressure cookers
ice tea makers
sandwich makers
waffle irons/waffle makers
pancake grills
portable grilling machines
ice cream makers
yogurt makers
juice makers
juice extractors
License Agreement - White Consolidated Industries and Salton/Maxim Housewares Inc.
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