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EXHIBIT 10.12
LICENSE AGREEMENT
This License Agreement ("Agreement") is made and entered into as of the
1st day of August, 1992, by and between THE O.M. SCOTT & SONS COMPANY, a
Delaware corporation ("Licensor"), and THE UNION FORK AND HOE COMPANY, a
Delaware corporation ("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor is the owner of the common law trademarks "Scotts"
and "Scotts and Oval Design" for lawn, turf and garden tools and equipment, a
copy of which is depicted in the Exhibit A attached hereto and incorporated
herein ("the Marks"); and
WHEREAS, Licensee wishes to obtain a license to use the Marks in
connection with the design, manufacture, marketing and distribution, through
sale or otherwise, of certain garden and industrial tool products described more
fully herein; and
WHEREAS, Scotts desires to grant to Licensee a limited license to
utilize the Mark in accordance with the terms of this Agreement:
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements of the parties hereto, the sufficiency of which is
hereby acknowledged, each party does agree with the other as follows:
1. LICENSE GRANT.
1.1 Products. Upon the terms and conditions hereinafter set forth,
Scotts hereby grants to Licensee and Licensee hereby accepts the exclusive right
except as noted herein, license and privilege of utilizing the Mark solely in
connection with the manufacture, sale and distribution of a line of high quality
(non-power) garden and industrial tools designed to be sold in the middle to
high end price range of the consumer product market and the high quality middle
price range of the industrial/contractor market as specified in Exhibit B
attached hereto and incorporated herein (the "Licensed Products").
1.2 Territory. The license hereby granted is for the United States of
America and Canada (the "Territory").
1.3 Channels of Distribution. Licensed Products may be sold to mass
merchandisers, department stores, home centers, warehouse or club retailers,
wholesalers, co-ops, hardware stores, lawn and garden retailers and
landscape/contractor suppliers or other channels as specifically and reasonably
agreed to by the parties ("Channels of Distribution") within the Territory who
intend to offer this line for sale in a manner consistent with the marketing
positioning and strategy established by Licensee marketing plans further defined
in Article 5.1 and brand segmentation/distribution strategy shown in Exhibit D.
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1.4 Goodwill. Licensee recognizes the great value of the goodwill
associated with the Marks and hereby acknowledges that the Marks and all of the
rights therein and the goodwill pertaining thereto belong exclusively to
Licensor, and that the Marks have acquired secondary meaning in the minds of the
consuming public.
1.5 Sublicenses. Licensee may sublicense the rights granted hereunder
to any affiliated or related entity but only with the prior written approval of
Licensor which approval is at Licensor's sole discretion and on the condition
precedent that each sublicensee agrees in writing to adhere to all of the terms
and conditions of this License Agreement. Nothing herein shall preclude Licensee
from subcontracting the manufacturing, advertisement or promotion of the
Licensed products to a third party. In the event of such sublicense or
subcontract, the Licensee shall remain fully liable for the fulfillment of all
of the terms and conditions of this Agreement.
1.6 Limitation of Licensee. Licensee may engage in the manufacture and
sale of products that perform similar functions to the Licensed Products, only
if such other products do not have the same exclusive colors or features as the
Licensed products set forth in Exhibit E attached hereto and incorporated
herein. In addition Licensee shall not enter into any other license agreement or
business arrangement that conflicts with this Agreement.
1.7 Limitation of Licensor. Licensor agrees not to license Marks to any
other long handle or garden tool manufacturer, distributor or marketer except
for those license agreements currently in effect for Licensed Products or
Related Lines as set forth in Exhibits B and C respectively attached hereto and
incorporated herein. Notwithstanding the foregoing: 1) Licensor has the right,
however, to manufacture on its own, or have manufactured, Related Lines of
products as defined in Exhibit C that utilize the Marks that may be sold by
Licensor or its normal or established distribution channels, and 2) the parties
acknowledge and agree that Licensor currently manufactures or has manufactured
for it spreaders which it sells and/or distributes and Licensor may in the
future license a third party to manufacture, sell and/or distribute spreaders
bearing the Marks.
1.8 Special Promotions. Licensee will supply Licensor on such terms and
conditions as agreed to by the parties from time to time certain Licensed
Products which Licensor will sell (directly or indirectly) to the professional
landscape, turf management or other commercial customers.
2. TERM AND TERMINATION.
2.1 Term. This Agreement shall commence on the date first written above
(the "Commencement Date") and shall have an initial term of three (3) years,
unless otherwise terminated as provided herein. This Agreement shall be renewed
automatically for successive three (3) year periods thereafter, unless sooner
terminated as provided for herein.
2.2 Material Breach: Opportunity to Cure. Either party may immediately
terminate this Agreement by written notice and without judicial intervention,
and without waiving any remedies or claims resulting from such termination, if
the other party shall: 1) fail to comply
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with or breach any of its material monetary obligations and covenants hereunder
and shall not and make good such breach or failure within ten (10) business days
from the receipt of a written notice to cure a monetary related breach; or 2)
fail to comply with or breach any of its material non-monetary obligations and
covenants hereunder and shall not remedy and make good such breach or failure,
or has failed to take steps to cure the same, within twenty (20) business days
from the receipt of a written notice of breach. In the case of an alleged breach
for non-payment, there shall be no termination of this Agreement if the claim is
based on payments, the amount of which is being disputed in good faith by the
parties, until the parties resolve the dispute in good faith or until an action
to resolve the dispute has been adjudicated in accordance with Section 16.1
below.
2.3 Termination for Insolvency. If: (i) a party shall file a petition
in bankruptcy for liquidation of its business; (ii) a petition in bankruptcy is
filed against a party and is not dismissed within a ninety (90) day period;
(iii) a party makes an assignment for the benefit of its creditors or an
arrangement pursuant to any bankruptcy law; (iv) a party discontinues its
business with intention that it be permanent; or (v) a receiver is appointed for
a party or its business and such appointment is not dismissed within a ninety
(90) day period, this Agreement shall, at the option of the other party, be
terminable immediately upon written notice. In the event this Agreement is so
terminated by Licensor, Licensee, its receivers, representatives, trustees,
agents, administrators, successors and/or assigns shall have no right to sell,
exploit or in any way deal with or in the Licensed Products bearing the Mark, or
any carton, container, packing material, wrapping material, advertisement,
promotional material or display material pertaining thereto, except as indicated
in Section 2.10.
2.4 Termination for Insufficient Sale by Licensee. Licensee may
terminate this Agreement upon ninety (90) days written notice to Licensor prior
to end of the first term in the event that Licensee has not generated sales
levels necessary to meet at least eighty (80) percent of the Minimum Guaranteed
Royalty Payments for Year Two (even though such Minimum Guaranteed Royalty has
been paid) and the outlook for achieving the sales level for the Minimum
Guaranteed Royalty in Year Three looks unfavorable.
2.5 Termination for Insufficient Sales by Licensor. Any time after the
completion of first term, Licensor may terminate this Agreement based upon
Licensee's royalties as follows:
Years
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(1) 4-6 If actual royalties for Year Five and forecasted
royalties for Year Six are: less than $750,000 and
less than 65% of the average royalties for Year Four
and Five; or
(2) 7-9 If royalties for the current term average below
$1,000,000; or
(3) 10+ beyond If royalties for the current term average below
$1,500,000
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then Licensor shall give Licensee ninety (90) days written notice of termination
prior to the end of the then current term, such termination shall be
automatically effective without further notice at the end of the then current
term.
2.6 Termination in Case of Infringement. Either Licensor or Licensee
shall have the right to terminate this Agreement immediately if there is a bona
fide third party claim or a final adjudication that the use of the Marks on the
Licensed Products infringes the proprietary rights of any third party. In the
event of a bona fide third party claim, before exercising any termination
rights, Licensor, in consultation with Licensee, shall seek or negotiate in good
faith to obtain the rights or use from the third party for Licensee to use the
Marks on the Licensed Products.
2.7 Termination for Breach of Sub Distributor Agreement. Licensor may
terminate this Agreement immediately upon written notice if the Licensee
materially breaches the Sub Distributor Agreement attached hereto and
incorporated herein as Exhibit F between Licensor and Licensee, provided the
Licensee fails to cure pursuant to the terms of the Wolf Agreement, an Exhibit
of the Sub Distributor Agreement.
2.8 Termination for Damage to Reputation, Business or Goodwill. In the
event either Licensor or Licensee reasonably determines, in good faith, that
continuation of this Agreement would materially damage its reputation, business
(not including the fact that Licensor could derive more revenue from selling the
Licensed Products itself or through a different Licensee), or goodwill
collectively ("the Goodwill"), Licensor or Licensee, as the case may be, may
terminate this Agreement at the end of any three-year term after giving ninety
(90) days written notice of termination to the other and the other party has
failed to cure the Goodwill of the terminating party. To exercise its rights
hereunder, the party must demonstrate substantial evidence of damage to its
Goodwill as follows:
(a) For Licensor: documented material or a pattern of customer
and/or retailer complaints regarding the quality of the Licensed Products,
Licensee's service practices with respect to the Licensed Products, or its
reputation as a result of adjudications or other findings of improper business
conduct by Licensee.
(b) For Licensee: documented material or a pattern of customer
and/or retailer complaints regarding the quality of Licensor's products, or its
service practices, or Licensor's reputation as a result of adjudications or
other findings of improper business conduct by Licensor.
2.9 Payment Due Upon Termination. In the event of termination of this
Agreement Licensee is obligated to pay Royalties earned except that if
termination is pursuant to Section 2.2 if Licensee is the defaulting party, 2.3,
2.4 or 2.5, Licensee is still obligated to pay Minimum Guaranteed Royalty for
the Year of termination (Year is defined in Section 3.2) or other Royalties
earned, whichever is greater.
2.10 Sale of Inventory Upon Termination. Upon the date of termination,
Licensee shall cease manufacturing Licensed Products. For a period of six months
after termination, Licensee may continue to distribute by sale, lease or
otherwise Licensed Products manufactured
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prior to such date, provided that Royalty as set forth in Section 3 is paid on
sale or disposal of such Licensed Products. Notwithstanding the above, a sale or
disposal of Licensed Products shall not be allowed if termination resulted from
contract breach based upon: (1) failure to properly utilize the Marks on
Licensed Products or on related communications or packaging materials pursuant
to the terms of this Agreement; (2) failure to substantially adhere to quality
standards, design, or Annual Marketing Plan as outlined in Section 5, Marketing
Plan, and Section 7, Performance and Product Quality; or (3) failure to comply
with laws regarding manufacture or sale of Licensed Products.
2.11 Effect of Termination or Expiration. Sixty (60) days before the
expiration of the term of this Agreement, or of any extensions thereof, and, in
the event of its termination ten (10) days after receipt of notice of
termination or the happening of the event which terminates this Agreement where
no notice is required, a statement showing the number and description of units
of the Licensed Products covered by this Agreement on hand or in work in process
shall be furnished by Licensee to Licensor. Licensor shall have the right, upon
reasonable notice, to take a physical inventory to ascertain or verify such
inventory and statement, and refusal by Licensee to submit to such physical
inventory by Licensor shall forfeit Licensee's right to dispose of such
inventory pursuant to Section 2.10 of this Agreement.
3. PAYMENTS BY LICENSEE.
3.1 Royalty. During the term of this Agreement or any renewal terms,
Licensee shall pay to Licensor a royalty which is the greater of: (i) five
percent (5%) of the gross amount invoiced by Licensee for the sale or other
disposition for value (directly or through affiliated or related entities) of
all Licensed Products to third parties, less all applicable sales and use-type
taxes, customer discounts, credits for returned or rejected articles,
allowances, shipping charges, and insurance, provided gross to net sales
calculation is consistent with Licensee's historical past business practices and
GAAP standards (the "Net Price") or (ii) the Minimum Guaranteed Royalty set
forth in paragraph 3.2 (collectively, the "Royalty").
3.2 Minimum Guaranteed Royalty. For each year this Agreement is in
effect, Licensee shall pay to Licensor a Royalty not less than:
First Year $250,000
Second Year $400,000
Third Year $500,000
Fourth and all subsequent years, Third year royalty base of
$500,000 shall be adjusted by Consumer Price Index each year.
For purposes of this Article 3, a "Year" is a period of twelve completed months,
not a calendar year. The first year shall end on the last day of the twelfth
month following the Commencement Date. Each year thereafter shall be the
twelve-month anniversary of the first year.
3.3 Manner of Royalty Payment. All Royalty payments with respect to
each Licensed Product shall be made by check or wire transfer, in U.S. Dollars.
Royalty payments shall be at
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Licensor's office as set forth below. Each Royalty payment shall be accompanied
by documentation of how the Royalty was calculated, which shall be certified by
an officer of Licensee. The first shall be equal to one-fourth of Minimum
Guaranteed Royalty due and payable upon execution of the Agreement. The balance
shall be paid quarterly until the annual Minimum Guaranteed Royalty is exceeded.
Thereafter, the Royalty shall be paid monthly within thirty (30) days of month
end. For each subsequent year, the Minimum Guaranteed Royalty shall also be paid
quarterly with the first payment due of the first day of the year. Once the
Minimum Guaranteed Royalty is exceeded, Royalty payment shall be made on a
monthly basis as set forth above.
3.4 Licensing Records. For as long as a Royalty is due under this
Agreement, Licensee will keep true and accurate records adequate to permit
royalties due to Licensor to be computed and verified, which records shall be
made available upon prior written request, during business hours (but not more
than three times in any twelve month period), for inspection at Licensee's
premises, by an independent accountant who is reasonably acceptable to Licensee
and who shall be bound by a confidentiality agreement with the Licensee, to the
extent necessary for the determination of the accuracy of the reports made
hereunder. Monthly reports shall be submitted to Scotts of Licensed Products
sold along with statement of earned royalty to date which shall be provided with
each quarterly payment of Minimum Guaranteed Royalty and subsequent payments
after the Minimum Guaranteed Royalty is exceeded.
4. ADVERTISING AND LABELING.
4.1 Licensee agrees that it will cause to appear on or within each of
the Licensed Products sold by it under this License, and on or within all
advertising, promotional or display material bearing the Marks, appropriate
statutory notice of trademark registration or notice of common law trademark
rights thereto as indicated in Exhibit A of this Agreement. Guidelines are set
forth in Exhibit G attached hereto and incorporated herein. In the event that
any of the Licensed Products are marketed in a carton, container and/or packing
material or wrapping material bearing the Mark, such notice shall also appear
upon said carton, container and/or packing material or wrapping material. A
sample of each and every tag, label, imprint or other device containing any such
notice and all advertising, promotional material or display material bearing the
Marks shall be submitted by Licensee to Licensor and shall be subject to
Licensor's written approval prior to any use of the Marks by Licensee, such
approval shall not be unreasonably withheld or delayed. Any item submitted to
Licensor shall not be deemed approved unless and until the same shall have been
approved by Licensor in writing. Licensor shall direct all specimens for
approval to the person indicated in Exhibit H attached hereto and incorporated
herein, as it may be changed by Licensor upon written notice. After advertising,
promotional materials or display materials have been approved pursuant to this
Section 4, Licensee shall not depart therefrom in any material respect without
Licensor's prior written consent which shall not be unreasonably withheld or
delayed. From time to time after Licensee has commenced advertising or promoting
the sale of the Licensed Products, and upon Licensor's written request, Licensee
shall furnish to Licensor, without cost to Licensor, a reasonable number of
samples of each advertisement, promotional material or display material bearing
the Marks utilized by Licensee in connection with the sale of the Licensed
Products for purposes of
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reviewing compliance with this Agreement. Licensee reserves all copyright to any
designs or works created by it in connection with the Licensed Products.
5. MARKETING.
5.1 Each year during the first term or renewal term then in effect,
Licensee shall present Licensor with a copy of its preliminary marketing plan
for Licensed Products for the next year in sufficient time to allow for review
and input before a final annual marketing plan is developed. Licensee agrees to
promote the Licensed Products substantially as outlined in the Annual Marketing
Plan to the Channels of Distribution in the Territory covered in this Agreement.
The initial marketing plan to be prepared by Licensee pursuant to this Agreement
shall be submitted by Licensee within thirty (30) days following the execution
of this Agreement. The marketing plan for the subsequent years during the term
or renewal term, as the case may be, shall be submitted by Licensee to Licensor
by March 1 for the following year. Such marketing plan shall include the
following matters based on the previous season and future market outlook: the
pertinent market overview; external factors affecting the market; the product
line, including specifications and performance standards, product positioning,
features/benefits, price/value versus competitive products; consumer research;
sales strategy and target customers; merchandising programs and advertising
programs; and a three (3) year sales forecast in units and dollars. Licensee
anticipates using certain product designations set for in Exhibit H, which is
attached hereto and incorporated herein, in connection with the marketing and
sale of the Licensed Products. For the term of this Agreement and for three (3)
years thereafter, Licensee shall not use such designations set forth in Exhibit
H in connection with the marketing and sale of lawn and garden tools other than
Licensed Products. The final marketing plan shall not be implemented by Licensee
until the Licensor has had the opportunity to review the plan and identify any
areas of concern. Licensor and Licensee will work in good faith to resolve any
reasonable concerns of Licensor regarding the marketing plan or its execution.
5.2 In the event Licensor becomes aware of a use of the Marks or
execution of the Annual Marketing Plan by Licensee which the Licensor believes
in good faith violates the terms of this Agreement, Licensor shall have the
right to request copies of the Licensee's then-current promotional literature,
trade programs, advertising, labeling and other public materials bearing the
Marks. Licensee shall endeavor in good faith to cure any improper use of the
Marks of which it is notified by Licensor within thirty (30) days of the notice.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Licensor represents and warrants to the Licensee as follows:
(a) Licensor owns all the necessary rights and has all
necessary power and authority to enter into this Agreement, perform its
obligations hereunder, and license the Marks pursuant to the terms hereof.
Licensor's performance under this Agreement does not conflict with any contract
to which Licensor is bound, its certificate of incorporation or its by-laws.
(b) To the best of the Licensor's knowledge (1) the use by the
Licensor and by the Licensee of the Marks in connection with the design,
manufacture, marketing and distribution
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of the Licensed Products will not infringe upon any trademark, copyright or
other proprietary rights of any third parties provided Wolf and Licensee sign
and approve the Agreements as provided in 6.1(a) above, and (2) no other person
or entity is infringing on the Licensor's or Licensee's rights to the Marks in
connection with the Licensed Products.
(c) The Licensor will use its best efforts to maintain the
validity of the Marks and its ownership thereof. It will actively police
infringing uses of the Marks by others and will not permit any other entity to
use the Marks in connection with the Licensed Products except for Wolf. Any
assignment by Licensor of the Marks to any third party for the same Licensed
Products shall be subject to the License granted herein.
6.2 Licensee represents and warrants to the Licensor as follows:
(a) Licensee will exercise best efforts to design,
manufacture, market, sell, and distribute the Licensed Products.
(b) Licensor shall not be responsible, in any manner
whatsoever, for the repair, replacement or refund of the purchase price of the
Licensed Products, or for any damage or loss suffered by any third party as a
result of the use of the Licensed Product or any cost associated therewith
regardless of whether claims or such repair, replacement, refund, damage or loss
arise under Licensee's warranties to the purchaser and/or user of the Licensed
Product or product liability claims. Licensee will ensure that finished Licensed
Products manufactured, marketed, sold and distributed under this Agreement shall
conform to the specification(s) and requirements included in this Agreement,
that the Licensed Products are merchantable and fit for their intended purpose
in accordance with labeling and printed direction for use and/or maintenance
included with the Licensed Product. Licensee shall assume all responsibility
without charge to Licensor for the repair or replacement obligations it
undertakes with respect to the Licensed Products as well as all damages, costs,
litigation, expenses, attorney's fees and the like for any claims for personal
injury including death relating to the manufacture, sale and use of Licensed
Products by its customers and the ultimate users.
(c) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action of Licensee and will be
binding on Licensee.
(d) Licensee will advise Licensor of any apparent infringement
of the Marks in connection with Licensed Products of which it becomes aware and
will reasonably cooperate with Licensor in the prosecution of any action in that
regard brought by Licensor at Licensor's cost. Licensee shall not take any
action with respect to any alleged infringement of the Marks unless so directed
by Licensor.
(e) Licensee has no rights to the Marks except those set forth
herein and will not challenge or cause a third party to challenge the validity
of the Marks or Licensor's ownership thereof, but that in the event of a finding
of actual infringement and a lawful order to discontinue use of Marks, Licensee
shall immediately cease all uses of the Marks.
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(f) The Licensed Products will comply with all applicable laws
and regulations, and Licensee shall employ such controls and inspections as are
necessary to protect the environment from exposure to and injury from the raw
materials, in-process materials, off-test product or finished Licensed Products
handled pursuant to this Agreement with Licensor having no liability whatsoever
therefor; and, Licensee warrants and agrees that it is solely responsible for
complying with all federal, state and local laws, rules, and regulations with
respect to the Licensed Products and the obligations under this Agreement
including without limitation the treatment, storage or disposal of all wastes
generated.
7. PERFORMANCE AND PRODUCT QUALITY.
7.1 Licensee agrees that the Licensed Products shall be of such
superior and consistent quality as to protect and enhance the goodwill embodied
in the Marks, and that all marketing and promotion of said goods shall be
conducted in a dignified manner in keeping with the high standards and integrity
of the Licensor and Licensee. Prior to execution of this Agreement, Licensor has
become familiar with the Licensed Products and reviewed materials regarding
Licensee's advertising and promotion of same. Licensee hereby covenants to
maintain the same or higher level of quality throughout the term of this
Agreement not to use the Marks in connection with goods that are inferior to the
high standards established by Licensee for its other products, and to ensure
that Licensed Products conform to the specifications set forth in Exhibit J
hereto. Licensee agrees to maintain quality control, to provide adequate test of
materials, to provide quality workmanship, and to do such other things as are
necessary to assure high quality production and servicing of the Licensed
Products, it being understood that Licensee shall be solely responsible for any
failure of Licensed Products as manufactured herewith to meet the specifications
in Exhibit J hereto. Licensee will assign all necessary employees to implement
and oversee these quality assurance procedures.
7.2 Licensee shall not provide, sell or offer to sell under the Marks
any goods the provision, sale or offer for sale of which violates any applicable
federal, state or local law or regulation.
7.3 Subject to compliance with the quality assurance provisions above,
during the term of this Agreement, Licensee may, in its discretion, modify and
improve any of the Licensed Products and their containers, marketing literature,
and related materials after consultation and written agreement from Licensor
(unless the change is not material under Section 4.1 above), which agreement
shall not be reasonably withheld or delayed.
8. LITIGATION.
8.1 Each party hereby agrees to give the other prompt written notice of
any claim or legal proceeding which is threatened or actually instituted against
either party by any third party and involving the Marks or this Agreement.
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9. ASSIGNMENT.
9.1 This Agreement and the rights granted hereunder shall not be
assignable, in whole or in part, by Licensee or Licensor, without the prior
written consent of the other, which shall not be unreasonably withheld or
delayed. Any such attempted assignment is null and void.
9.2 This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their permitted assigns and representatives, and their
successors.
10. LIMITATION OF RELATIONSHIP BETWEEN PARTIES.
10.1 Neither party shall have power to bind the other by any guarantee
or representation that either party may give, or in any other respect
whatsoever, or to incur any debts or liabilities in the name of or on behalf of
the other party, and for purposes of this Agreement, the parties hereto shall
not be deemed partners, joint venturers, or to have created the relationship of
agency or of employer and employee between the parties.
11. LIMITATION OF LIABILITIES.
11.1 WITH RESPECT TO CLAIMS ARISING UNDER THIS AGREEMENT AS BETWEEN THE
PARTIES REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT,
INCLUDING NEGLIGENCE, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY
FOR ANY LOSS OF PROFIT OR REVENUE BY THE OTHER OR FOR CONSEQUENTIAL DAMAGES
INCURRED OR SUFFERED BY THE OTHER, EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSS OR DAMAGES. THIS PROVISION SHALL SURVIVE EXPIRATION OR
TERMINATION OF THIS AGREEMENT.
12. INDEMNITY.
12.1 The provisions of Section 11.1 notwithstanding, with regards to
claims made against Licensee by third parties and/or claims based on such third
party claims, Licensor agrees to indemnify, protect, defend and hold harmless
Licensee, its affiliates, servants, employees, direct or indirect customers,
ultimate users, subcontractors, sublicensees and other agents and related or
affiliated companies against any and all expenses (including reasonable
attorneys' fees), claims, losses, damages or liabilities arising out of (1) any
breach of this Agreement by Licensor and/or Licensor's representations and
warranties contained herein, or (2) with respect to any action brought against
Licensee, or its affiliates and related companies, by any third party related to
a claim that the Marks, when applied to the Licensed Products, infringe any
copyright or trademark of any third party or constitutes an unlawful trade
practice provided Licensee gave Licensor timely notice as set forth in Section
6, or (3) the products of Licensor. Subsection (2) above does not apply to any
such claim of infringement that results from Licensee's manufacture of the
Licensed Products or from any other action or omission not envisioned by or
performed pursuant to the terms of this Agreement.
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12.2 The provisions of Section 11.1 notwithstanding, with regards to
claims made against Licensor by third parties and/or claims based on such third
party claims, Licensee agrees to indemnify, protect, defend and hold harmless
Licensor, its affiliates, servants, employees, direct or indirect customers,
ultimate users, subcontractors, sublicensees and other agents against any and
all expenses (including reasonable attorney's fees), claims, losses, damages or
liabilities arising out of (1) any breach of this Agreement by Licensee and/or
Licensee's representations and warranties contained herein or (2) with respect
to any claim that the Licensed Products manufactured for, by or under the
direction of Licensee are defective or otherwise do not comply with any
applicable law or regulation and/or claims for injury to or death of any person
(including, without limitation, such person's agents, servants, employees,
independent contractors, direct and indirect customers and ultimate users)
relating to the Licensed Product or Licensee's acts or omission.
12.3 Sections 12.1 and 12.2 shall survive expiration or termination of
this Agreement.
13. INSURANCE.
13.1 Licensee shall, at its own expense, carry and maintain the
following insurance with an insurance company with at least an A plus rating as
follows:
(a) Comprehensive General Liability (Bodily Injury and
Property Damage) Insurance, including Broad Form Property Damage Liability
Insurance, Contractor Liability Insurance, and Product Liability. The limits of
liability of such insurance shall be not less than Five Hundred Thousand Dollars
($500,000) per person and not less than One Million Dollars ($1,000,000) per
occurrence.
(b) All insurance shall be expressly endorsed to name Licensor
as an additional insured and shall include the requirement that the insurer
provide Licensor with not less that thirty (30) days advance written notice
prior to the effective date of any cancellation or material change and a copy of
this endorsement shall be delivered to Licensor with the execution of this
Agreement. Licensor shall be continued to be listed as an additional insured on
this insurance for a period of fifteen (15) years from the date of the last sale
by Licensee of the Licensed Products. This provision shall survive expiration or
termination of this Agreement.
14. EXCUSED PERFORMANCE.
14.1 Neither Licensor nor Licensee will be liable to the other for
failure to provide services, non-performance, incomplete performance, delay or
error under this Agreement if the cause of the same is beyond its reasonable
control or caused by acts of other persons not under control of either party,
governmental rules or orders, court orders, any labor or civil disturbance,
embargoes, strike, boycott, riot, floods, shortages of materials, insurrection,
war, or act of God. Any of these events will delay the required performance for
a period equal to the length of the event plus a reasonable time thereafter to
implement performance. The parties shall notify each other of an event of
excused performance and cooperate in good faith to ascertain a possible solution
of the situation.
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15. EMPLOYEES.
15.1 During the term of this Agreement and for a period of one (1) year
thereafter, both parties agree not to solicit or directly induce any employee to
leave the employ of the other party or its parent organization without the prior
written consent of the other party.
16. CONFIDENTIALITY.
16.1 The terms and conditions of Confidentiality as set forth in
Exhibit K, attached hereto and incorporated herein by reference, shall survive
the expiration or termination of this License Agreement.
17. MISCELLANEOUS.
17.1 This Agreement shall be construed and the respective rights of the
parties shall be determined, under and pursuant to the laws of the State of
Ohio. The parties agree that prior to initiating any litigation that they will
submit the matter in good faith to negotiation through the Columbus Bar
Association Mediation Program with each party sharing half the cost.
17.2 The invalidity of unenforceability of any particular provision(s)
of this Agreement will not affect the other provision(s) of it, and this
Agreement will be construed in all aspects as if such invalid or unenforceable
provision had been omitted.
17.3 This Agreement may be modified only by a written instrument
executed by both parties. A waiver of a breach or default under this Agreement
shall not be a waiver of any subsequent default.
18. NOTICES.
18.1 Notices required under this Agreement shall be in writing and be
sent by registered mail or by facsimile transmission with telephonic
confirmation of receipt or hand delivery to the respective parties at the
following addresses:
Notice to Licensor: The O.M. Scott & Sons Company
14111 Scottslawn Road
Marysville, OH 43041
Telecopy: 513-644-
Attn: Bernie Ford
With a copy to: The O.M. Scott & Sons Company
14111 Scottslawn Road
Marysville, OH 43041
Telecopy: 513-644-7153
Attn: Legal Department
Notice to Licensee: The Union Fork and Hoe Company
500 Dublin Avenue
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Columbus, OH 43216-1540
Telecopy: 614-221-8397
Attn: Gavril Mihaly
With a copy to: Piper & Marbury
36 Charles Center South
Baltimore, MD 21201
Telecopy: 410-539-0489
Attn: Robert W. Smith, Jr., Esq.
or to such other address as either party may designate by a notice given in
compliance with this paragraph, and shall be deemed effective when received.
19. ENTIRE AGREEMENT.
19.1 This Agreement, including the Exhibits hereto, constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
written above.
LICENSEE LICENSOR
THE UNION FORK AND HOE COMPANY THE O.M. SCOTT & SONS COMPANY
By: /s/ Gavril Mihaly By: /s/ Bernard R. Ford
------------------------------ -------------------------------
Title: President and CEO Title: Vice President, Strategy
--------------------------- & Business Development
----------------------------
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