TEGG® LICENSE AGREEMENT
Exhibit
10.84
3/1/05
TEGG® LICENSE
AGREEMENT
THIS
AGREEMENT,executed as of this _____day of _____,
200___ by and between TEGG Corporation, a Delaware corporation, with its
principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000 [hereinafter "TEGG"], and
____________________________________________________________________________________________
(Company Name)
(Company Name)
a
___________________________________ organized under the laws of
__________________, with its principal
(Corporation, Partnership, Proprietorship) (State)
place of business at
____________________________________________________________________________________________
["LICENSEE"].
(Corporation, Partnership, Proprietorship) (State)
place of business at
____________________________________________________________________________________________
["LICENSEE"].
WHEREAS,TEGG
has developed a distinctive and
proprietary system for the development of additional business for electrical
contractors that involves engaging in the repair, replacement diagnostics,
enhancements and maintenance of electrical systems, telecommunication systems,
data communication systems, indoor and outdoor lighting, electrical motors,
motor starters, capacitors (power factor correction systems), uninterruptible
power supplies, electrical power conditioning systems, surge protection devices,
harmonic filters, electrical power monitoring systems, emergency lighting
systems, security systems, fire alarm systems, emergency generation systems,
power substations, oil analysis of transformers and oil circuit breakers,
battery single and multi strap intercell resistance measurements, development
of
single line diagrams, panel schedules and circuit identification, energy
conservation systems, building automation systems, and related activities,
including quality control standards for these activities under the Proprietary
Marks as defined below; and
WHEREAS,
the additional business
contemplated by providing TEGG services shall consist of providing services
in
connection with the design, installation, start-up, warranty, testing (such
as
harmonics, infrared, power factor, ground resistance, ultrasonic, RMS voltage,
RMS current, megger, and voltage disturbances), inspecting, cleaning,
maintaining records, alignment, tightening, balancing loads, circuit breakers
(testing, calibration and upgrading), reviewing code compliance, lubrication,
maintaining liquid levels, scheduling, insulating, shutdown, securing,
preventive maintenance, corrective maintenance, predictive maintenance, service,
calibration, relocating, adjustment, repair, operation, modifications,
additions, replacement and sale of parts and supplies of electrical distribution
systems, telecommunication systems, indoor and outdoor lighting, electrical
power conditioning systems, surge protection systems, harmonic filters,
electrical power quality monitoring systems, electric motors, motor starters,
capacitors (power factor correction systems), uninterruptible power supplies,
emergency lighting systems, security systems, fire alarm systems, electric
generation systems, power substations, oil analysis of transformers and oil
circuit breakers, battery single and multi strap intercell resistance
measurements, development of single line diagrams, panel schedules and circuit
identification, energy conservation systems, related activities and such
other
activities and services as TEGG approves in writing for providing TEGG services
and for using the Proprietary Marks [the “TEGG Service”]; and,
WHEREAS,TEGG
is the owner of the entire
right, title and interest in the trade name, trademark and service xxxx "XXXX,"
and such other trade names, service marks and trademarks as are now designated,
or may hereafter be designated by TEGG, for use in association with or to
identify TEGG and TEGG Service [the "Proprietary Marks"], and TEGG continues
to
develop, use and control such Proprietary Marks; and
WHEREAS,LICENSEE
desires to expand its
existing electrical contracting business to include providing TEGG Service
and
have the right to use TEGG’S Proprietary Marks, and wishes to obtain certain
exclusive rights and other benefits from TEGG for that purpose as defined
in
this Agreement, including without limitation, to receive the training and
assistance provided by TEGG to be able to provide TEGG Service to customers,
to
obtain sales leads, national accounts and assigned accounts in an exclusive
territory; proprietary sales techniques and computer systems, and staffing
assistance and initial and ongoing management, sales, technical, computer
systems, and accounting training and support from TEGG, and,
WHEREAS,
LICENSEE acknowledges and
understands that TEGG has granted and continues to grant other persons and
entities certain exclusive rights to provide TEGG Services in certain areas
and
that TEGG or its affiliates may also provide TEGG Services in certain areas.
These persons and entities who have such rights during the term of this
Agreement are referred to in this Agreement as “Authorized TEGG Licensee”;
and,
WHEREAS,
LICENSEE also wishes to become an
Authorized TEGG LICENSEE under the terms and conditions of this Agreement;
and,
WHEREAS,LICENSEE
understands and
acknowledges the importance of TEGG'S reputation for excellence and uniform
quality standards in the repair, replacement, diagnostics, enhancements and
maintenance of electrical systems and the necessity of providing TEGG Services
in strict conformity with all aspects of TEGG'S standards and
requirements.
1
NOW,
THEREFORE, the parties, in consideration of the
mutual promises contained herein and intending to be legally bound, agree
as
follows:
I. APPOINTMENT
1. Grant
In accordance with
the
terms and conditions of this Agreement, TEGG grants to LICENSEE during the
term
of this Agreement the right, and LICENSEE undertakes the obligation, to provide
TEGG Services and use the Proprietary Marks in strict conformity with all
aspects of TEGG'S quality standards, as they may be reasonably updated and
modified from time to time by TEGG.
2. Location
LICENSEE is authorized
by
this Agreement to provide TEGG Services only from the following office site
which LICENSEE represents is located within the Primary Marketing Area as
defined in Section 4 of this Agreement:
[the "Location"].
LICENSEE shall not
relocate the office from which the TEGG Services are provided
except (i)to another location within its defined Primary Marketing Area,
and
(ii) with the prior written approval of TEGG, which approval shall not be
unreasonably withheld or delayed. LICENSEEshall not provide TEGG Services
at, or from, any other Location unless a
separate TEGG License Agreement, TEGG Satellite Location Agreement, or other
agreement is executed between the parties.
3. Term
The term of this
Agreement shall be six (6) years commencing on the Effective Date as defined
in
Section 43 of this Agreement (the “Initial Term”).
4. Territory
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(a)
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LICENSEE'S
primary
marketing area encompasses the following geographical
territory:
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(the “Primary
Marketing Area.”)
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Provided
LICENSEE
is not in default of this Agreement or any related agreements, TEGG
shall
not itself provide TEGG Services in, nor grant the right to another
person
or entity to provide TEGG Services to any other person or entity
to be
located in, the Primary Marketing Area, and shall not itself provide
TEGG
Services at, nor authorize any other person or entity to provide
TEGG
Services at, any facility located within the Primary Marketing Area
except
as follows:
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(i)
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with the
prior
written consent of LICENSEE;
or
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(ii)
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by TEGG
or an
affiliate of TEGG or another Authorized TEGG Licensee for any reason
set
forth in subparagraphs 4(b)(i) through 4(b)(viii) and Section 11
of this
Agreement (Account Referrals, Purchasing Programs and
Subcontracting).
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(b)
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LICENSEE'S
Territorial Limitations:
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LICENSEE
shall not
solicit or provide TEGG Services outside LICENSEE'S Primary Marketing
Area, except as follows:
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(i)
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if the facility
is
located within the primary marketing area of another Authorized TEGG
Licensee and LICENSEE shall have obtained the prior written consent
of
such Authorized TEGG Licensee; or
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(ii)
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if the facility
is
not located within the primary marketing area of another Authorized
TEGG
Licensee, LICENSEE shall have obtained the prior written consent
of TEGG;
or
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(iii)
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if LICENSEE
has
been providing electrical service at a facility outside the Primary
Marketing Area within the one (1) year period prior to the Effective
Date
of the Initial Term of this Agreement and continues to provide electrical
service at suchfacility within each subsequent year of the Initial
Term of
this Agreement; or
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(iv)
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if a facility
is
being installed or has been installed outside the Primary Marketing
Area
by LICENSEE within one (1) year prior to the Effective Date of the
Initial
Term of this Agreement; or
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(v)
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if LICENSEE
is
responding to a customer's written request for open competitive bids
and
the scope of work is specified in writing by the customer;
or
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(vi)
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ifTEGG or
LICENSEE
has given another Authorized TEGG Licensee a referral of a customer
interested in TEGG Service at a facility located within the primary
marketing area of such other Authorized TEGG Licensee on terms acceptable
to the customer and such other Authorized TEGG Licensee either: (a)
declines to engage in such service; or (b) fails to accept the project
on
the proposed terms within a reasonable time period after being notified
of
the opportunity; or
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(vii)
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if TEGG
has
subcontracted, or attempted to subcontract with, another Authorized
TEGG
Licensee to provide TEGG Services pursuant to a national or regional
contract within such other Authorized TEGG Licensee’s primary marketing
area, and such other Authorized TEGG Licensee either:
(a)
declines to perform TEGG Services or (b) fails to accept the subcontract
on the proposed terms within five (5) days after being offered the
subcontract, or
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(viii)
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if LICENSEE
is
responding to a customer's written request to perform a clearly defined
scope of work at a specific facility or on a specific component or
system
within that facility.
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(c)
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Resolution
of
Territorial Disputes:
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LICENSEE
shall
notify TEGG in writing if it believes in good faith that another
Authorized TEGG Licensee has violated any of the territorial rights
granted under this Agreement. Upon receipt of such written notice,
TEGG shall, within a reasonable period of time, appoint a three (3)
member
Review Committee consisting of two (2) representatives from other
Authorized TEGG Licensees, and one (1) executive of TEGG to investigate
the alleged violation(s) and make recommendations to the President
of TEGG
as to whether those territorial rights have been violated, and the
remedy
to be awarded, if any. No representative from another Authorized
TEGG
Licensee may serve on a Review Committee if the primary marketing
area
under the representative’s agreement with TEGG is in dispute or is
contiguous to a primary marketing area that is in
dispute.
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All disputes
before
the Review Committee shall be governed by the Commercial Arbitration
Rules
of the American Arbitration Association. All costs of the
investigation and resolution of the dispute shall be paid by the
Licensees
involved in the dispute as allocated by the Review Committee. No
member of the Review Committee shall be held liable for any statements
made in connection with the proceedings, including statements made
in any
recommendations to TEGG'S President, and any right of action against
any
member(s) of the Review Committee and/or TEGG for any wrongful conduct
while acting in the course of the dispute resolution function is
hereby
waived. LICENSEE agrees that the remedy set forth in this paragraph
shall be LICENSEE’S exclusive remedy for territorial disputes. All
communication in connection with the Review Committee proceedings
shall be
confidential and non-discoverable in any litigation, arbitration
or any
other proceeding.
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(d)
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Reservation
of
Rights:
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Except as
otherwise
expressly provided in this Agreement, TEGG shallretain all of its
rights
and discretion with respect to its Proprietary Marks and itself providing,
or granting rights to others to provide, TEGG Services anywhere in
the
world, including the right to: (a) use the Proprietary Marks and
grant to
others the right to use the Proprietary Marks and provide, and grant
others the rights to provide, TEGG Services at any location outside
the
Primary Marketing Area and on such terms and conditions as TEGG deems
appropriate; and (b) sell any products or services under the Proprietary
Marks or under any other trademarks, service marks or trade dress,
through
other channels of distribution other than those specified in this
Agreement. In no event will TEGG or any affiliated company of TEGG
be precluded from owning, operating, associating, or being affiliated
with
any person or entity that owns or operates business(es) using trademarks
different from the Proprietary Marks, even if such business(es) operate
within the LICENSEE'S Primary Marketing Area, provided, however,
that,
except as provided in this Agreement, in no event shall TEGG authorize
others to provide TEGG Services within the LICENSEE'S Primary Marketing
Area.
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II. OBLIGATIONS
OF TEGG
5. Initial
Training
TEGG shall make
available
and require all of LICENSEE'S personnel, whether incumbent or newly hired,
without a separate charge, to attend initial training in providing TEGG Services
at times and places as determined by TEGG for individuals performing the
following functions: Principal, TEGG Monitoring and Executive Oversight;
General
Management; Service Management; Business Systems Management; Sales, Sales
Management, Construction Management, Electrical Testing, Electronic Testing,
Preventive Maintenance, Predictive Maintenance, Safety, Inspection, Repair,
Replacement, Estimating, Pricing, Proposal Writing and Proposal
Presentations. LICENSEE shall pay all wages, travel, living and other
expenses of its employees during all initial training.
6. Other
Training
TEGG shall periodically
make available at LICENSEE'S Location or at a location chosen by TEGG, or
on-line training, continuing education, training, refresher training, and
such
other mandatory training as LICENSEE may need or as TEGG may determine to
provide, without a tuition fee. TEGG may make available optional
specialized training from time to time and the only tuition or other fees
will
be charged on a cost reimbursable basis only. LICENSEE shall pay all
wages, travel, living and other expenses of its employees in connection with
all
such training.
If TEGG provides
training
or assistance beyond that normally provided to other Licensees, which is
not an
obligation of TEGG under the License Agreement, TEGG will provide such
additional training or assistance for a mutually agreed upon fee and at a
mutually agreeable date(s), and location(s). LICENSEE shall pay all wages,
travel, living and other expenses of its employees during such training or
assistance.
7. Monitoring
and Recommendations
TEGG shall periodically
provide appraisals and remedial recommendations for LICENSEE’s TEGG Service
Business, including its performance in sales, technical performance, operations
administration, accounting, personnel administration, training, cost control
and
staffing. Individual counseling and coaching of employees of LICENSEE who
manage others who provide, or who themselves provide, TEGG Services will
also be
provided periodically for the purpose of optimizing the growth and profitability
of business derived from being an Authorized TEGG Licensee.
8. Confidential
Manual
TEGG shall lend
to
LICENSEE, for its use during the term of this Agreement, the TEGG Service
Confidential Manual [hereinafter the "COM"]. LICENSEE'S right to use the
COM as provided in this Agreement shall be non-exclusive and
non-transferable. The COM, which may be in one or more volumes, or
provided via the Internet (TEGGNet), sets forth requisite quality standards
for
providing TEGG Services. TEGG may, from time to time and at its sole
discretion, revise, add to or delete from the COM and shall furnish all revised
materials to LICENSEE without additional cost to LICENSEE. LICENSEE will
designate a Trustee to maintain the COM current at all times. All COM
materials shall be considered confidential and proprietary by TEGG, and LICENSEE
shall be bound by the provisions thereof.
In order to protect
the
reputation and goodwill of TEGG and the Proprietary Marks and to maintain
uniform quality standards of operation for providing TEGG Service, LICENSEE
agrees to provide the TEGG Services in accordance with the COM. The term
COM includes all tangible means of communicating information concerning TEGG'S
standards and specifications for providing TEGG Services to LICENSEE, including
without limitation, written materials, video tapes, audio tapes, computer
diskettes or compact discs and Internet (TEGGNet). The COM shall at all
times remain the sole property of TEGG. TEGG may from time to time make
reasonable revisions to the contents of the COM or provide written materials,
video tapes, audio tapes, computer diskettes, compact discs and use the Internet
(TEGGNet) to modify, add to or delete from the applicable standards. LICENSEE
expressly agrees to comply promptly with each such new or revised quality
standard. LICENSEE shall at all times ensure that its copies of the COM
and other operational standards are kept current. In the event of
any
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disputes as to the
contents thereof, the terms of the master copy maintained by TEGG at TEGG'S
home
office shall be controlling.
9. Computer
Programs
TEGG shall make
available
to LICENSEE one or more computer programs and/or licenses to operate the
programs on computers at LICENSEE'S Location. LICENSEE shall, at its cost,
obtain and maintain at its Location computers and programs that conform to
technical specifications set forth in the COM. The computer programs
provide LICENSEE with required maintenance pricing and tasking; electrical
component problem reporting and record keeping; and sales tracking and
management reporting.
All computer programs
provided by TEGG shall at all times be the sole property of TEGG, who may
make
reasonable revisions to such programs in its sole discretion from time to
time. TEGG shall provide LICENSEE with a non-exclusive, non-transferable
license to use such computer programs at the Location identified in Section
2 of
this Agreement. LICENSEE shall not modify, copy nor allow others to modify
or copy the computer programs, and shall not allow others to obtain or utilize
them.
TEGG warrants to
LICENSEE
that it has full right, power and authority to grant to LICENSEE the license
TO
THE COMPUTER PROGRAMS provided for IN THIS AGREEMENT.
TEGG MAKES AND LICENSEE RECEIVES NO OTHER WARRANTY
WHATSOEVER REGARDING THE
COMPUTER PROGRAMS, WHETHER EXPRESSED OR IMPLIED. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, TEGG HEREBY EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. TEGG
HAS NOT MADE ANY ORAL REPRESENTATIONS OR WARRANTIES ABOUT THE COMPUTER
PROGRAMS. TEGG DOES NOT WARRANT THAT THE COMPUTER PROGRAMS ARE ERROR FREE,
BUT WILL, ON A PRIORITY BASIS, WITHIN A REASONABLE TIME PERIOD, REPLACE,
DEBUG
AND/OR REPAIR ANY PROGRAM (S) ON WHICH THERE ARE ERRORS.
10. Confidential
Use of LICENSEE
Information
TEGG shall, during
the
term of this Agreement and after its termination, hold in confidence financial
information relating to LICENSEE, although it may use such information,
without identification of LICENSEE, in statistical analyses of the performance
of Authorized TEGG Licensees generally. Such analyses may be disclosed to
third
parties. TEGG may, in addition, disclose any information required by law
or Court Order. In the event of a subpoena or other court, administrative,
or legal order seeking financial information relating to LICENSEE, TEGG shall
immediately notify LICENSEE in writing of the existence of such subpoena
or
order and LICENSEE shall be permitted to appear, object to, defend, or otherwise
attempt to prevent the release of the information relating to LICENSEE at
LICENSEE'S expense. TEGG shall not be liable for any damages to LICENSEE
which
result from the disclosure of such information unless such disclosure occurs
as
the result of gross negligence on the part of TEGG. Nor shall any
disclosure by TEGG constitute cause for termination of this Agreement by
LICENSEE.
11. Account
Referrals, Purchasing Programs and
Subcontracting
TEGG may provide
to
LICENSEE referrals of potential customers which may or may not be located
within
the LICENSEE'S Primary Marketing Area.
TEGG reserves the
right,
in its sole discretion, to negotiate and make available for the benefit of
all
Authorized TEGG Licensees, manufacturers' service programs, insurance carrier
TEGG Service programs, TEGG Service account referrals, TEGG Service customers’
multi-location programs, and TEGG'S national or regional purchasing
programs. LICENSEE shall not be obligated, but is encouraged, to
participate in any and all of these programs if or as they become
available.
Due to the size,
diversity, and complexity, of a single customer or project, LICENSEE may
at
times request additional and/or centralized project management and control
from
TEGG. On a customer-by-customer or project-by-project basis, TEGG may
fulfill such a request, at a mutually agreed upon fee, as a result of
extraordinary performance of duties on behalf of LICENSEE.
TEGG may contract
independently with third parties to provide TEGG Services for their benefit
and/or engage in other business with such third parties that do not involve
providing TEGG Services. In such situations, TEGG shall not itself provide
TEGG Services but shall subcontract the portions of the project that involve
TEGG Services to the Authorized TEGG Licensee that has the primary marketing
area where the work is to be performed at a mutually determined price. If
the Authorized TEGG Licensee for that primary market area is unable to or
unwilling to perform such work, then TEGG, in its sole discretion, shall
subcontract the work to another Authorized TEGG Licensee or others of its
choosing.
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III. OBLIGATIONS
OF LICENSEE
12. Initial
License Fee
In consideration
of the
execution of this Agreement by TEGG and rights granted to LICENSEE in this
Agreement, LICENSEE shall pay to TEGG an initial license fee of EIGTHY FOUR
THOUSAND DOLLARS ($84,000), which fee shall be deemed fully earned,
nonrefundable, and payable upon execution of this Agreement. LICENSEE may,
at its option, (a) pay $7,000 upon execution of this Agreement and the remaining
$77,000 of the initial license fee in eleven consecutive monthly installments
of $7,000 each beginning on the 5th day of the firstmonth
following the Effective Date and continuing on the 5th day of each
month thereafter until paid in full _____; (b) pay a discounted lump sum
initial
license fee of SEVENTY FOUR THOUSAND DOLLARS ($74,000) upon execution of
this
Agreement _____; or (c) pay a discounted split payment structure of SEVENTY
SIX
THOUSAND DOLLARS ($76,000), which is to be paid in two payments of THIRTY
EIGHT THOUSAND DOLLARS ( $38,000); the first payment is to be paid upon
execution of this Agreement, and the second payment of THIRTHY EIGHT THOUSAND
($38,000) is to be paid after completion of TEGG’S initial sales training by
LICENSEE’S first employee with TEGG Business sales responsibility
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LICENSEE elects
the
option initialed above.
13. Royalty
Fee
In consideration
of the
grant of exclusive rights to provide TEGG Services in the Primary Marketing
Area
as set forth in this Agreement, LICENSEE shall pay a monthly royalty fee
set
forth in the following schedule:
Monthly
Royalty Fee Schedule
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12-Month
Period
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Per
Month
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First
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$2,700
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Second
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$3,200
Plus
Inflation Adjustment
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Third
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$3,700
Plus
Inflation Adjustment
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Fourth
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$4,300
Plus
Inflation Adjustment
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Fifth
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$4,800
Plus
Inflation Adjustment
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Sixth
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$5,300
Plus
Inflation Adjustment
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and each Subsequent 12 Month Period
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When LICENSEE renews
this
Agreement in accordance with Section 30 of this Agreement, LICENSEE shall
pay a
monthly royalty fee of $5,300 plus cumulative annual inflation adjustments
during the Renewal Term(s).
LICENSEE shall begin
paying the monthly royalty fee due under this Agreement on the 5th
day of the 1st month following completion of TEGG’S initial sales
training by LICENSEE’S first employee with TEGG Business sales
responsibility. Such royalty fee payments shall continue throughout the
Initial Term of this Agreement and all Renewal Term(s). Each monthly
royalty fee payment shall be made based upon the foregoing Monthly Royalty
Fee
Schedule, and be due no later than the 5th day of each consecutive
month.
The Monthly Royalty
Fee
Schedule shall be adjusted on the 1st day of January each year to reflect
inflation. The inflation adjustment shall apply to this Agreement during
each twelve (12) month period following the next anniversary of the Effective
Date. The basis for this inflation adjustment shall be the "Consumer
Price Index-United States City Average, All Items, for Urban Wage Earners"
for
the immediately preceding calendar year ending September 30 as presently
published in the "Monthly Labor Review" of the United States Department of
Labor, Bureau of Labor Statistics. In the event the Bureau of Labor ceases
publishing the Consumer Price Index or materially changes the methods of
its
computation or other features thereof, LICENSEE agrees to accept comparable
statistics published by another recognized authority to be chosen by TEGG
in the
exercise of its reasonable discretion.
Past due payments
are
subject to an interest charge for late payment which shall be the highest
rate
permitted by applicable law.
LICENSEE’S obligation to
pay the monthly royalty fees specified in this Agreement for any Renewal
Term(s)
shall arise at the end of the Initial Term or at the end of any immediately
preceding Renewal Term.
14. Local
Advertising and Promotion of Proprietary
Marks
LICENSEE, in its
discretion and, at its expense, may, pursuant to this Agreement, subject
to
TEGG’S prior approval, promote TEGG Services and use TEGG'S Proprietary Marks
in
the Primary Marketing Area through any means, including without limitation
placing telephone advertisements in the local Yellow Pages and inserting
e-commerce messages on their own web page that refer or relate to their grant
of
a license to provide TEGG Services. All local advertising and promotion
that refer to or use the TEGG Services or the Proprietary Marks, including
without limitation use of the Proprietary Marks on vehicles, all printed
materials, uniforms and other identification in any media (except as to prices
to be advertised) shall be subject to the prior approval of TEGG in the manner
set forth in the COM.
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15. Internet
Advertising
LICENSEE
may, in
its discretion and at its expense, maintain a World Wide Web page or otherwise
maintain a presence or advertise on the Internet or any other public computer
network. Subject to the prior approval of TEGG in the manner set forth in
the COM and this Section 15, LICENSEE agrees to use the Proprietary Marks
on its
web site exclusively as TEGG expressly permits. LICENSEE shall submit to
TEGG for its prior approval any domain name, web site links and web site
content
that uses or is associated with the Proprietary Marks. LICENSEE agrees not
to post any of TEGG'S proprietary, confidential or copyrighted material or
information on its web site. LICENSEE agrees to list on its web site, any
web site maintained by TEGG, and any other information TEGG requires in the
manner TEGG requires.
16. Pursuit
of Business
LICENSEE shall engage
in
and actively use its best efforts to develop customers for TEGG Services
and
shall devote its best efforts to the management, operation, sales, and promotion
of such business. LICENSEE shall make available continuous emergency
service on a 24-hour basis during the entire term of this Agreement.
LICENSEE shall establish a separate TEGG Division as a segregated profit
center,
including separate accounting (at least as to its gross margins) which shall
actively pursue customers for TEGG Services [the "TEGG
Division"]. LICENSEE shall take all reasonable steps as TEGG may from time
to time deem necessary to ensure the separation of the TEGG Division or other
activities devoted to promoting, advertising, offering and providing TEGG
Services from other business(es) carried out by LICENSEE.
LICENSEE shall at
all
times proactively promote the sale of TEGG Services. LICENSEE acknowledges
that
full development of the business potential of offering TEGG Services throughout
the Primary Marketing Area may include hiring a sufficient number of qualified
sales professionals and assigning minimum sales quotas to them in order to
fully
develop the commercial potential of the TEGG Services available, which number
of
sales professionals and sales quotas shall be commercially reasonable for
the
size, demographics and business potential of LICENSEE’S Primary Marketing
Area. LICENSEE may use its discretion in such personnel decisions;
provided, however, that LICENSEE acknowledges that TEGG considers the inclusion
of a sufficient number of qualified sales professionals to promote the TEGG
Services to be an essential part of developing additional business from the
rights granted by this Agreement.
17. Use
of Name and Xxxx
LICENSEE may use
and
promote the Proprietary Marks at LICENSEE'S sole cost and expense, utilizing
such Proprietary Marks on business cards, stationery, uniforms, service vehicles
and other identity media of LICENSEE or its TEGG Division. Whenever
LICENSEE uses the TEGG trademark or other Proprietary Marks designated by
TEGG,
LICENSEE shall note that it is a LICENSEE of TEGG. All uses of the
Proprietary Marks by LICENSEE shall be subject to TEGG'S written approval.
LICENSEE may continue to utilize its existing vehicle identification program
provided LICENSEE integrates TEGG'S Proprietary Marks with such existing
identification program in a manner approved by TEGG. TEGG reserves the
right to change or alter any Proprietary Marks at any time and at its sole
discretion without incurring any liability to TEGG.
In the event that
TEGG
changes or alters any Proprietary Marks, LICENSEE shall have at least six
(6)
months at LICENSEE'S sole cost and expense, to modify its use of any of the
Proprietary Marks on LICENSEE'S business cards, stationary, uniforms, service
vehicles and any other identity media of LICENSEE of its TEGG
Division.
LICENSEE shall not
use
TEGG'S Proprietary Marks for any purpose other than in or in connection with
the
advertising, marketing, promotion, selling and providing TEGG Services or
in any
manner not approved in writing by TEGG. Without TEGG’S prior approval,
LICENSEE shall not use or include any of TEGG'S Proprietary Marks in or as
part
of its corporate or other formal business name. LICENSEE shall not use the
word “TEGG” as all or part of any Internet domain name registered to the
LICENSEE, its subsidiaries, affiliates, parent organizations, or any other
individual or organization. LICENSEE shall file and maintain any
required assumed name or fictitious name registrations and shall execute
any
documents deemed necessary by TEGG to obtain protection for TEGG'S Proprietary
Marks or to maintain their continued validity and enforceability.
LICENSEE agrees
and
acknowledges that TEGG is the owner of all rights, title and interest in
and to
the Proprietary Marks and the goodwill associated with and symbolized by
them
and that LICENSEE'S use of such Proprietary Marks pursuant to this Agreement
does not give LICENSEE any ownership or other interest in or to the Proprietary
Marks, other than as provided in this Agreement. LICENSEE further agrees
and acknowledges that its right to use the Proprietary Marks is limited to
such
uses as are authorized under this Agreement and that any unauthorized uses
thereof shall constitute an infringement of TEGG'S rights. Any and all
goodwill arising from LICENSEE'S use of the Proprietary Marks by virtue of,
and
pursuant to, this Agreement shall inure solely and exclusively to TEGG'S
benefit
and, upon expiration or termination of this Agreement, no monetary amount
shall
be assigned as attributable to any goodwill associated with LICENSEE'S use
of
the Proprietary Marks. LICENSEE agrees and acknowledges that TEGG may
itself use and grant rights to others to provide TEGG Services and to use
the
Proprietary Marks and that TEGG may establish, develop and grant rights to
use
other proprietary marks and provide other proprietary services different
from
the rights granted in this Agreement, without offering or providing LICENSEE
with any such rights. LICENSEE agrees and acknowledges that the Proprietary
Marks are valid and serve to identify TEGG, TEGG Services and other Authorized
TEGG Licensees and LICENSEE shall not, during the term of this Agreement
or
after its expiration or termination, directly or indirectly contest the validity
or ownership of the Proprietary Marks. In the event that litigation
involving the Proprietary Marks is instituted or threatened against LICENSEE,
LICENSEE shall promptly notify
7
TEGG and shall cooperate
fully with TEGG in defending such litigation. TEGG shall be responsible
for the defense thereof and shall indemnify and hold harmless Licensee against
any and all liability, costs or expenses (including attorney's fees) arising
out
of infringement of the Proprietary Marks.
18. Staff
and Personnel
Development
During the term
of this
Agreement, the provision of TEGG Services by LICENSEE shall be under the
direction of, and managed by, a General Manager (to be mutually agreed upon
by
TEGG and LICENSEE), who shall be subject to the approval of TEGG, which approval
shall not be unreasonably withheld or delayed. The General Manager shall
devote sufficient time to such management. The General Manager shall
complete the initial training courses provided by TEGG to the reasonable
satisfaction of TEGG.
In the event the
designated General Manager shall no longer serve in this management function
for
any reason, or in the event the designated General Manager shall be unable
to
perform his/her functions for a period of ninety (90) days or more as a result
of illness, disability or other incapacity, LICENSEE shall appoint a successor,
with the approval of TEGG. The successor General Manager shall complete
the initial training courses to the reasonable satisfaction of
TEGG.
In addition to the
designated General Manager, LICENSEE’S TEGG Division, shall be staffed by
personnel responsible and accountable for the promotion, sales and service
provided by TEGG Services, including without limitation persons performing
the
following functions: Sales Management; Operations/Operations Management;
Accounting, Job Costing, Service Report Auditing, Material Costing and
Invoicing, Purchasing, Financial Reporting, Payables, Clerical Task and
Management; TEGG Certified Electricians and Electronic Technicians [the "TEGG
Technical Professionals"], Administrative, and at least one fully dedicated
TEGG
Sales Professional. This personnel shall be chosen by LICENSEE and subject
to the approval of TEGG, which approval shall not be unreasonably withheld
or
delayed and shall complete the initial training courses to the reasonable
satisfaction of TEGG.
TEGG and LICENSEE
acknowledge the value of trained and competent employees and the necessity
of
having career paths in order to attract such personnel and to provide incumbent
employees of LICENSEE opportunities to advance. Therefore, TEGG and
LICENSEE agree that TEGG will at the request of LICENSEE, provide consultation
and certain assistance to LICENSEE in personnel planning, assessing, recruiting,
personnel development, training, performance appraisals and compensation
administration in order to develop and maintain a pool of qualified and upwardly
mobile employees to meet the expanding personnel requirements of LICENSEE.
TEGG will assist LICENSEE in assessment and motivation of incumbent employees
and in recruiting personnel from outside the LICENSEE'S organization in
accordance with the conditions and charges set forth in the COM. LICENSEE
agrees that the consultations, and any other assistance and services provided
by
TEGG shall not be considered an interference with the business or contractual
relations of LICENSEE or to be the exercise of sufficient control over
LICENSEE’S employees to subject TEGG to any liability for any acts, errors or
omissions by LICENSEE’S employees.
19. Confidential
Information
LICENSEE acknowledges
that all information contained in the COM and other written communications
regarding TEGG and TEGG Services issued by TEGG and in other materials
concerning TEGG and TEGG Services and its operation, is confidential and
proprietary and agrees to treat and maintain such confidential and proprietary
information as TEGG'S property, to use such information only in connection
with
advertising, promoting, marketing, offering, selling and providing TEGG Services
in accordance with this Agreement, and to refrain from copying or reproducing
any portion of such information without TEGG'S prior written consent.
LICENSEE agrees not to disclose such confidential and proprietary information
to
others (including its shareholders) during the term of this Agreement or
after
its expiration or termination, except to LICENSEE'S employees or agents whose
job duties require knowledge thereof and LICENSEE'S attorneys, accountants,
and
other professionals, financing sources and others required to know such
information in order for LICENSEE to conduct its business operations in an
appropriate fashion, or to the extent reasonably necessary to evaluate the
information set forth therein provided LICENSEE remains fully responsible
for
any disclosure by such individuals. LICENSEE shall require each of its
employees to execute at the time of commencing employment with LICENSEE or
at
the time of executing this Agreement, whichever is sooner, a Confidentiality
Agreement in the form prescribed in the COM as currently revised, requiring
them
to hold such information in strictest confidence.
TEGG shall not be
liable
to LICENSEE for any current or former LICENSEE'S employee's breach of the
Confidentiality Agreement. TEGG shall provide reasonable assistance and
cooperation to LICENSEE in LICENSEE'S attempt to enforce a current or former
employee's Confidentiality Agreement or to pursue a remedy for breach of
the
Confidentiality Agreement.
Information shall
not be
deemed to be confidential and/or proprietary pursuant to this Agreement if:
(a)
such information comes into the public domain without breach of this Agreement;
or, (b) such information can be shown by the LICENSEE to have been received
from
a third party without a breach of this Agreement; or, (c) such information
can
be demonstrated by documentary evidence by the LICENSEE to have been known
to it
before the execution by the LICENSEE of this Agreement; or (d) disclosure
is
required by law.
LICENSEE shall not
be in
violation of this Agreement by communicating, divulging or using information
or
knowledge which is general or common to the industry, whether or not said
information is learned in connection with the rights granted by this
Agreement. TEGG acknowledges and agrees that during the course of the
Agreement between LICENSEE and TEGG,
8
TEGG may obtain
from the
LICENSEE confidential and proprietary information of LICENSEE. TEGG
acknowledges and agrees that during the term of this Agreement and after
the
expiration of the Initial Term or any Renewal Term(s), that except as to
TEGG’S
employees or agents whose job or duties require knowledge thereof, that TEGG
shall not disclose such confidential and proprietary information.
20. Management
Information and Accounting
System
LICENSEE shall keep
books
and records reflecting or relating to its promotion and sales of its TEGG
Division, in such manner as to provide the minimum reporting and internal
control requirements for management control and accounting of its TEGG Division
as mutually agreed by LICENSEE and TEGG.
21. Quality
of Performance
In order to protect
the
reputation and goodwill of TEGG, the "TEGG" name and logo, other Proprietary
Marks and the TEGG Services, Licensee shall provide the highest quality of
performance, professionalism and service to its customers for TEGG Services,
shall fulfill all of its contractual obligations to its customers, staff
with a
sufficient number of TEGG Technical Professionals to perform the service
and
maintenance work, perform all work in accordance with all TEGG Tasking
maintenance schedule requirements, perform all work in compliance with the
current National Electrical Code and appropriate safety standards, assure
the
professional appearance of all of its employees and uniformed TEGG Technical
Professionals and shall promote, offer, sell and provide TEGG
Services in conformity with such reasonable uniform quality standards of
performance, techniques and procedures as TEGG may from time to time set
forth
in the COM or otherwise in writing. To ensuresuch quality, TEGG shall
have the right to review the appearance and qualifications of LICENSEE'S
personnel, regulate the types and quality of the test instruments, safety
items,
parts and equipment used in performing TEGG Service, examine the schedule
of
LICENSEE'S work, audit the quality of LICENSEE'S work without intention to
interfere with its customers' premises, and contact LICENSEE'S customers
in
connection with the quality of the work performed. If any work performed
by LICENSEE does not meet TEGG'S quality standards, LICENSEE shall take
immediate steps to correct such situation. Failure by LICENSEE to conform
to any of the requirements of this Section may be deemed by TEGG to be a
default
under this Agreement.
22. Maintenance
and Auditing of
Records
LICENSEE shall maintain
its books and records in accordance with generally accepted accounting
principles and state and federal regulations consistently applied. Books
and
records of the TEGG Division shall be further maintained in the form and
manner
set forth in the COM. All books and records of LICENSEE shall be preserved
for at least three (3) years from the date of their preparation. LICENSEE
shall submit to TEGG, in a timely manner, reports, records, information and
data
relating to its TEGG Division as TEGG may designate in the COM.
23. Involvement
in Other Business
LICENSEE, its principal
representative, employees, directors, officers, partners, proprietor, or
any
owner owning five percent (5%) or more of the outstanding voting shares of
the
LICENSEE shall not, during the term of this Agreement, engage directly or
indirectly in any other business performing activities included within the
definition of the TEGG Services contained in this Agreement without the prior
written consent of TEGG. In addition, none of the foregoing shall divert
or attempt to divert any business or customer for TEGG Services to any other
business which is not TEGG, TEGG’s affiliates or Another Authorized TEGG
Licensee, or to any competitor, by direct or indirect inducement or otherwise,
or do or perform, directly or indirectly, any other act injurious or prejudicial
to the goodwill associated with the Proprietary Marks and TEGG Services.
LICENSEE shall require its employees performing managerial or supervisory
functions and its employees receiving any training from TEGG to execute similar
covenants in the form set forth in the COM.
24. Information
Exchange
All ideas, concepts,
methods, techniques and materials growing out of or germane to providing
TEGG
Services and related activities, whether or not constituting protectable
intellectual property, created or acquired by the LICENSEE during the
continuance of this Agreement shall be disclosed promptly to TEGG and shall,
without right of payment to LICENSEE, immediately become the sole property
of
TEGG, subject to the right of LICENSEE to use such ideas, concepts, methods,
techniques and materials during this Agreement without further cost to
LICENSEE. LICENSEE agrees to execute such assignments or other documents
as requested by TEGG for securing intellectual property rights in such ideas,
concepts, methods, techniques or materials.
The parties agree
that
the intent of section 24 of the License Agreement is to provide all Licenses
in
the TEGG system with the benefit of innovations and improvements developed
by
Licensees that are related to TEGG Service. Nothing in Section 24 of this
License Agreement shall be construed to in any way limit or constrain RS
Services, Inc’s intellectual property rights to innovations or improvements that
are unrelated to providing TEGG Service, including the development of the
LightMasterPlus, MotorMasterPlus, and other energy management/conservation
products the company has under development now and in the future.
9
25. Insurance
LICENSEE shall continue
to maintain during the entire term of this Agreement, from an insurance carrier
acceptable to TEGG, (a) workmen's compensation insurance, employer's liability
insurance and such other insurance as may be reasonably required by TEGG in
the statutory amounts required by each state in which it conducts business,
and
(b) comprehensive general liability insurance, including contractual liability
coverage and automobile liability insurance, in a minimum amount of
$2,000,000. LICENSEE shall name TEGG, its officers, directors, employees,
affiliates and parents as additional insureds under such policy. In
addition, LICENSEE shall maintain such other insurance as is applicable to
special risks created by LICENSEE'S business. LICENSEE shall supply to
TEGG certificates of insurance evidencing compliance with these
requirements. The certificates of insurance shall include a statement by
the insurer that the policy or policies will not be canceled or materially
altered without at least thirty (30) days' prior written notice to
TEGG.
26. Taxes,
Indebtedness and Compliance with
Laws
LICENSEE shall promptly
pay when due all taxes and all accounts and other indebtedness of every kind
incurred by LICENSEE. LICENSEE shall comply with all federal, state and
local laws, rules and regulations and shall timely obtain any and all permits,
certificates or licenses necessary for the conduct of the business of the
LICENSEE. LICENSEE shall notify TEGG in writing within five (5) days of
the commencement of any action, suit or proceeding or the issuance of any
order,
writ, injunction, award or decree of any court, agency or other governmental
instrumentality which may adversely affect the operation or financial condition
of LICENSEE.
27. Independent
Contractor
It is understood
and
agreed that this Agreement does not create a fiduciary relationship between
TEGG
and LICENSEE, that LICENSEE is, and shall remain an independent
contractor. Nothing contained in this Agreement or otherwise shall
constitute either party as an agent, partner, subsidiary, employee, servant
or
legal representative of the other for any purpose whatsoever. LICENSEE
shall be responsible for the hiring, firing, disciplining and payment of
wages,
employment taxes and benefits for all employees.
LICENSEE shall not
have
authority to incur any obligations or responsibilities on behalf of TEGG
or bind
TEGG by any representation, and agrees not to hold itself out as having such
authority. LICENSEE shall not enter into any contracts or incur any
obligations in the name of TEGG or under the name "TEGG" but shall enter
into
all contracts in its own corporate or company name and at its own risk and
expense. LICENSEE shall be solely responsible for the direction, control
and management of LICENSEE'S business and LICENSEE'S agents and
employees.
If applicable law
shall
imply a covenant of good faith and fair dealing in this Agreement, the parties
hereto agree that such covenant shall not imply any rights or obligations
that
are inconsistent with a fair construction of the terms of this Agreement.
Additionally, if applicable law shall imply such covenant, TEGG and LICENSEE
acknowledge and agree that (a) this Agreement (and the relationship of the
parties which is inherent from this Agreement) grants TEGG the discretion
to
make decisions, take actions and/or refrain from taking actions not inconsistent
with its explicit rights and obligations hereunder that may favorably or
adversely affect the interests of LICENSEE; (b) TEGG shall use its business
judgment in exercising such discretion based on its assessment of its own
interests and balancing those interests against the interests of Authorized
TEGG
Licensees generally (including TEGG and its affiliates), and specifically
without considering the individual interests of LICENSEE or any other particular
Authorized TEGG Licensee or TEGG; (c) TEGG shall have no liability to LICENSEE
for the exercise of its discretion in this manner, so long as such discretion
is
not exercised unreasonably toward LICENSEE; and (d) in absence of such bad
faith, no trier of fact in any legal action or arbitration proceeding shall
substitute its judgment for the business judgment so exercised by
TEGG.
LICENSEE agrees
to
conspicuously identify itself in all dealings with its customers, contractors,
suppliers, public officials and others as an independent licensee of TEGG.
LICENSEE agrees to give notice of independent ownership in any reasonable
fashion that TEGG may specify and require from time to time, in the COM or
otherwise.
28. Variance
of Standards and
Terms
LICENSEE acknowledges
that because complete and detailed uniformity for all Authorized TEGG Licensees
under many varying conditions may not be possible or practical, TEGG reserves
the right, as it may consider in the best interests of all concerned, to
vary
standards for any Authorized TEGG Licensee based upon the peculiarities of
the
particular primary marketing area or circumstances, density of population,
business potential, population of trade area, existing business practices
or any
other condition which TEGG considers important to the successful operation
of
any LICENSEE. LICENSEE will have no right to require TEGG to disclose any
such
variation to LICENSEE or to grant LICENSEE the same or a similar variation
under
this Agreement.
LICENSEE further
agrees
that TEGG will have the right to grant the rights to provide TEGG Services
and
to use the Proprietary Marks to other Authorized TEGG Licensees under terms
that
may differ from the terms of this Agreement, so long as the different provisions
are due to the rights being granted at materially different times or other
non-arbitrary distinctions. For these reasons, TEGG'S obligations and
rights with respect to its various Authorized TEGG Licensees may from time
to
time differ materially from the terms and conditions of this Agreement, without
in any way altering or affecting the provisions of this Agreement.
LICENSEE acknowledges that it will have no right to require TEGG to grant
LICENSEE the same or a similar variation under this Agreement.
10
29. Indemnification
LICENSEE shall indemnify,
defend and hold harmless TEGG, its subsidiaries, affiliates and parent companies
and each of their respective owners, directors, officers, members, partners,
employees, agents and representatives and each of their respective successors
and assigns ("the TEGG Indemnified Parties") from any and all losses,
liabilities, claims or demands whatsoever (including, without limitation,
costs,
expenses and attorneys' fees in connection therewith) arising directly or
indirectly from, or in any manner based upon, occasioned by, or attributable
to
the operations of LICENSEE and/or its TEGG Division, the promotion, advertising,
marketing and provision of TEGG Services, any other activity of LICENSEE,
or
LICENSEE’S breach of this Agreement. However, LICENSEE shall not be
required under this Paragraph to indemnify for any claims arising out of
intentional or negligent acts or omissions of the TEGG Indemnified
Parties.
TEGG shall indemnify,
defend and hold harmless LICENSEE, its subsidiaries, affiliates and parent
companies and their respective owners, directors, officers, members, partners,
employees, agents and representatives and each of their respective successors
and assigns ("the LICENSEE Indemnified Parties") from any and all losses,
liabilities, claims or demands whatsoever (including without limitation costs,
expenses and attorneys’ fees in connection therewith) arising directly or
indirectly from or in any manner based upon, occasioned by or attributable
to
the operations of TEGG, any other activity of TEGG or TEGG’S breach of this
Agreement. However, TEGG shall not be required under this Paragraph to
indemnify for any claims arising out of intentional or negligent acts or
omissions of the LICENSEE Indemnified Parties.
IV. RENEWAL,
TRANSFER AND
TERMINATION
30. Renewal
LICENSEE may renew
this
license, without payment of a renewal fee, for anadditional period of six
(6)
years (the “Renewal Term”) provided that:
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(a)
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LICENSEE
has given
TEGG written notice of its intent to renew not less than six (6)
months
nor more than nine (9) months prior to the end of the Initial Term
or any
Renewal Term.
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(b)
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LICENSEE
is not in
material default of any provision of this Agreement, any amendment
hereto
or any other agreement between LICENSEE and TEGG or its subsidiaries
and
affiliates, and is then in substantial compliance with all the terms
and
conditions of such agreements during the term of those
agreements.
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(c)
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LICENSEE
executes,
at least two months before the end of the current term, TEGG'S
then-current form of License Agreement or other agreement, which
is being
offered to prospective Licensees and to incumbent Licensees, which
agreement shall supersede in all respects this Agreement, and the
terms of
which may differ from the terms of this Agreement including, without
limitation, a higher monthly royalty fee, a shorter or longer renewal
period, and an increased Primary Marketing Area. LICENSEE shall not,
however, be required to pay the initial license fee stated in such
agreement, nor shall TEGG be obligated to provide the introductory
services given to an initial LICENSEE as stated in that agreement,
notwithstanding the foregoing renewal Agreement shall not materially
alter
the rights of LICENSEE under this Agreement.
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(d)
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LICENSEE
complies
with TEGG'S then-current qualification and training
requirements.
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(e)
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LICENSEE
complies
with TEGG'S then-current requirements for test instruments and safety
items.
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31. Transfer
by TEGG
TEGG shall have
the right
to transfer or assign all or any part of its rights or obligations herein
to any
person or legal entity, including, but not limited to, an affiliated
company.
32 Transfer
by LICENSEE
LICENSEE understands
and
acknowledges that the rights and duties set forth in this Agreement are personal
to LICENSEE and neither LICENSEE nor any person, partnership or corporation
holding a fifty percent (50%) or greater interest in LICENSEE shall sell,
assign, transfer, mortgage or otherwise encumber or dispose of all or any
part
of its interest in the license or in the LICENSEE without the prior written
consent of TEGG. Any purported assignment or transfer, by operation
of law or otherwise, requiring the consent of TEGG and not having such consent
shall be null and void and shall constitute a material breach of this
Agreement. TEGG shall not unreasonably withhold or delay its consent and
shall grant such consent upon execution of a general release, in a form
prescribed by TEGG, of any and all claims against TEGG, its subsidiaries
and
affiliates, and their respective officers, directors, agents and employees;
receiving reasonable assurances that all financial obligations to TEGG relating
to the license will be met, that all other obligations undertaken under this
Agreement will be met, and that the proposed transfer will not adversely
affect
the TEGG Business licensed hereunder, TEGG'S Proprietary Marks, the TEGG
System,
or TEGG. TEGG may require that LICENSEE and the transferee execute such
agreements or other documents as will provide TEGG with such assurances,
including, but not limited to, TEGG'S then-current license agreement, subject
to
retaining the renewal rights described in Section 30 of this Agreement. A
transfer fee in the amount of Five Thousand Dollars ($5,000) shall be paid
to
TEGG to cover administrative and other expenses in connection with
transfers. Consent shall not be required and transfer fee shall not apply
to any transfer or sale of stock among any of the
11
present officers
or
directors or employees of the LICENSEE or transfer to any members of their
family, or transfer to a trust or for estate planning purposes.
If LICENSEE or a
shareholder owning a twenty-five (25%) or greater interest in this Agreement
dies, and if under controlling local law, or testamentary instrument, the
deceased person's interest in the license and this Agreement is distributable
to
heirs or legatees who are members of his immediate family, or to any entity
under the control of, or for the benefit of officers, directors, or employees
of
the LICENSEE or members of their family, then such assignment shall be permitted
without the necessity of any transfer fee, provided such heirs or legatees
accept the conditions imposed on otherwise permitted assignees.
In the event of
a
transfer which requires the consent of TEGG, TEGG shall not impose as a
condition upon such transfer, any requirement that the LICENSEE remains liable
under any terms of the License Agreement for the obligations of the
transferee.
33. Non-Waiver
of Claims
TEGG'S consent to
a
transfer of any interest in the license granted herein shall not constitute
a
waiver of any claims it may have against the transferring party, nor shall
it be
deemed a waiver of TEGG'S right to demand exact compliance with any of the
terms
of this Agreement by the transferee.
34. Termination
by TEGG
(a)
TEGG may terminate
this Agreement, prior to its expiration without notice, in
the event LICENSEE becomes insolvent, makes a general assignment for the
benefit
of its creditors, files a petition in bankruptcy or consents to the filing
of
such a petition against it, is adjudged a bankrupt, or if a receiver of its
assets is appointed.
(b) LICENSEE
shall be deemed to be in default and TEGG may, at its option, terminate this
Agreement, without affording LICENSEE any opportunity to cure the default,
effective immediately upon giving of notice to LICENSEE, upon the occurrence
of
any of the following events:
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(i)
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if LICENSEE
ceases
to operate, fails to actively pursue (by at least one full time sales
person) or otherwise abandons (fails to competently perform referral
or
any other contracted service work within a reasonable period of time)
offering, selling or providing TEGG Services or this
license;
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(ii)
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if LICENSEE,
its
designated Principal Representative, or a principal officer or stockholder
holding a twenty-five percent (25%) or greater interest, is convicted
of a
felony, or any other crime or offense that is reasonably likely,
in the
sole opinion of TEGG, to adversely affect the reputation and goodwill
of
TEGG, TEGG Services, the Proprietary Marks, or the goodwill associated
with any of them, or TEGG'S interest therein;
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(iii)
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if LICENSEE,
or any
of its owners, officers, directors, members, managers or employees,
purports to transfer any rights or obligations under this Agreement
to any
third party without TEGG'S prior written consent contrary to the
terms of
Section 32 of this Agreement;
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(iv)
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if LICENSEE,
or any
of its Principal Representatives, employees, directors, officers,
partners, proprietors, or owners of 5% or more of the voting shares
of
ownership interest of LICENSEE, fails to comply with the provisions
of
Section 23 hereof;
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(v)
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if LICENSEE,
or any
of its owners, discloses or divulges the contents of the COM or other
trade secrets or confidential information provided to LICENSEE by
TEGG
contrary to Section 19 hereof;
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(vi)
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if LICENSEE
is in
default as provided in Section 34(c) of this Agreement and has received
two (2) or more Notices of Termination pursuant to that Section for
the
same, similar or different defaults during any preceding twelve (12)
month
period.
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(c) In
the event LICENSEE fails to perform any other obligation undertaken in this
Agreement or fails to maintain any of the standards or procedures prescribed
herein or in the COM, TEGG may give LICENSEE notice of termination of this
Agreement, such termination to be effective thirty (30) days after the giving
of
such notice, or at the end of any longer period required by applicable
law. If LICENSEE shall, during such thirty (30) day period or, if more
than thirty (30) days are reasonably required to cure the same, then such
additional time period as is reasonably required, so long as LICENSEE is
diligently pursuing the cure (thereof), cure the default, then this Agreement
shall not terminate.
35. Termination
by LICENSEE
(a)
LICENSEE shall have
the right to terminate this Agreement on the third
anniversary of the Effective Date of the Initial Term. To terminate this
Agreement, LICENSEE needs only to notify TEGG in writing of its desire to
terminate the License Agreement at least 90 days prior to the third anniversary
of the Effective Date of the Initial Term.
12
(b) LICENSEE
shall have the right to terminate this Agreement, prior to its expiration
and
without notice, in the event that TEGG becomes insolvent, makes a general
assignment for the benefits of its creditors, is adjudged a bankrupt, or
if a
receiver of its assets is appointed.
(c) In
the event that TEGG shall fail to perform any of the obligations undertaken
in
this Agreement, LICENSEE may give notice to TEGG of its intent to terminate
this
Agreement. If TEGG has not, within thirty (30) days of the receipt by TEGG
of such notice, taken appropriate measures to cure the default in its
performance, LICENSEE may, upon seven (7) days' additional notice, terminate
this Agreement.
36. Obligations
of LICENSEE Upon
Termination
For purposes of
applying
the terms of this Section, termination shall mean any termination of this
Agreement whether by TEGG or LICENSEE for any reason, including default by
LICENSEE, and shall also mean any expiration of this Agreement for any reason,
whether by its terms, by failure of LICENSEE to renew, or by the authorized
refusal of TEGG to renew.
Upon the termination
of
this Agreement, LICENSEE shall immediately, and without further notice, pay
all
monthly fees and other charges due TEGG, cease use of the Proprietary Marks,
and
cease holding itself out as a current or former TEGG LICENSEE, and shall
notify
in writing each of its customers then party to a TEGG Services agreement
that it is no longer a TEGG LICENSEE or providing TEGG Services. LICENSEE
shall take such action as may be necessary to cancel any assumed name,
fictitious name or equivalent registration which contains any of the Proprietary
Marks.
LICENSEE shall
immediately cease use of the Proprietary Marks, providing TEGG Service and
cease
use of all confidential methods, procedures, techniques and computer programs
used in or associated with providing TEGG Services, and of all forms,
stationery, signs, advertising and other materials associated with the TEGG
System, including removal of all Proprietary Marks and references to TEGG
from
all vehicles and Web sites. LICENSEE shall immediately return to TEGG all
copies of the COM, all computer programs and all TEGG forms and materials
and
all copies in its possession and that it provided or made available to its
officers, employees or other persons. Further, an affidavit shall be
executed by LICENSEE’S employees performing the functions of the positions
defined in the COM of Principal, Principal Sponsor, Principal’s Representative,
Selling General Manager, General Manager, Sales Manager, Service Manager,
Service Supervisor, Business Systems Specialist, Administrative Support Clerk,
Designed Electrical Service Representative, Maintenance Sales Representative,
and Electrical Services Specialist (Sales Professional), stating that each
of
them have conducted a thorough investigation and have taken all necessary
steps
to insure that all TEGG confidential materials and other property of TEGG
have
been accumulated and returned to TEGG, and the use of all TEGG forms, TEGG'S
Proprietary Marks and confidential materials has been discontinued.
In the event that
LICENSEE fails or refuses to comply with the requirements of this Section
within
ten (10) days following the termination of this Agreement, it is agreed that
TEGG shall be appointed LICENSEE'S attorney-in-fact to enable TEGG to take
any
and all actions necessary to undertake and complete LICENSEE'S remaining
obligations for TEGG hereunder, including but not limited to obtaining immediate
injunctive relief against LICENSEE from any Court having jurisdiction at
the
expense of LICENSEE which LICENSEE agrees to pay upon demand and to acknowledge
the irreparable harm suffered by TEGG.
V. MISCELLANEOUS
37. Approvals
and Waiver
Whenever this Agreement
requires the prior approval or consent of TEGG, LICENSEE shall make a timely
written request to TEGG. No approval or consent by TEGG shall be
effective unless it is in writing. No TEGG approval or consent shall be
unreasonably withheld or delayed.
No failure by LICENSEE
or
TEGG to enforce any right afforded under this Agreement or to require strict
compliance with any obligation contained herein shall constitute a waiver
of the
right or of the right to demand strict compliance. A waiver by LICENSEE or
TEGG of a default by the other shall not constitute a waiver of any
subsequent default.
38. Pricing
and Competition
Nothing in this
Agreement, nor in any agreement between TEGG and any other TEGG LICENSEE,
nor
anything contained in the COM, shall be construed to establish minimum, standard
or other pricing.
39. Notices
Any notices required
under this Agreement shall be sent by registered, certified or overnight
mail to
TEGG or LICENSEE at the address stated in the introductory paragraph of this
Agreement or to such other address as either party may designate in
writing. Any notice by registered, certified or overnight mail shall be
deemed to have been given on the date of receipt or the date when such notice
is
first refused.
13
40. Construction
and Severability
This Agreement shall
be
construed in accordance with the laws of the Commonwealth of Pennsylvania.
Each provision of this Agreement shall be considered severable and if for
any
reason any provision herein is determined to be invalid or contrary to law,
such
determination shall not impair the operation or effect of the remaining
provisions.
Nothing in this
Agreement
is intended, nor shall be construed, to confer any rights or benefits on
any
person other than LICENSEE, TEGG and their successors or assigns provided
for
under Article IV of this Agreement.
41. Applicable
Law andDispute
Resolution
This Agreement takes
effect upon its acceptance and execution by TEGG. Except to the extent governed
by the Federal Arbitration Act, this Agreement shall be interpreted and
construed under the laws of the Commonwealth of Pennsylvania, which laws
shall
prevail in the event of any conflict of law; provided, however, that if any
provision of this Agreement would not be enforceable under the laws of
Pennsylvania, and if the Licensee is located outside of Pennsylvania, and
further, if such provision would be enforceable under the laws of the state
in
which the Licensee is located, then such provision shall be interpreted and
construed under the laws of that state. Nothing in this choice of law provision
is intended to make applicable any franchise or distributorship law or similar
law, rule or regulation that would otherwise not be applicable.
Except as provided
below,
the parties agree that, should any dispute arise between them under, relating
to
or in connection with this Agreement, prior to commencement of an arbitration
or
other proceeding pursuant to this Agreement, they shall promptly each designate
one or more representatives with authority to resolve the dispute to meet
face-to-face (or communicate in such other manner as they may agree) in a
good
faith effort to amicably resolve the dispute. Each party covenants to devote
a
minimum of three (3) hours to such discussions. The parties further covenant
that in the event that they remain unable to resolve the dispute(s) through
such
discussions, they shall then promptly submit the dispute(s) to non-binding
mediation in Pittsburgh, Pennsylvania where they will continue their attempts
in
good faith to amicably resolve the dispute under the then-prevailing commercial
mediation rules of a recognized dispute resolution service such as the American
Arbitration Association, JAMS/Endispute, or the mediation programs sponsored
by
the Center for Public Resources. The parties agree to participate in at
least six (6) hours of mediation and to divide equally the costs of the
mediation, excluding their travel costs. The discussions, mediation and all
communication in connection with the mediation will be confidential and
non-discoverable in any litigation, arbitration or other
proceeding.
Except as provided
below,
any dispute arising out of or relating to this Agreement, or a claimed breach
thereof, that remains unresolved after discussions and mediation shall be
submitted to arbitration by the American Arbitration Association in accordance
with its Commercial Arbitration Rules. The situs of the arbitration shall
be Pittsburgh, Pennsylvania, unless otherwise provided by law. The award
shall be conclusive and binding upon the parties, and judgment upon the award
may be entered in any court of competent jurisdiction. All matters
relating to arbitration shall be governed by the Federal Arbitration Act
(9
U.S.C. §1 et seq.).
LICENSEE agrees
that any
breach or evasion of the obligations contained in Sections 8, 16, 17, 19,
23,
and 36 relating to the use of TEGG'S Proprietary Marks and confidential and
proprietary information supplied to LICENSEE will result in immediate and
irreparable harm to TEGG. TEGG shall therefore be entitled to obtain
immediate injunctive relief without resort to prior mediation or to arbitration
to compel specific performance by LICENSEE of its obligations and to pursue
any
other legal or equitable remedy available. LICENSEE shall pay to TEGG all
costs and expenses, including reasonable attorneys' fees, incurred by TEGG
in
obtaining such injunctive or other relief.
42. Independent
Investigation
LICENSEE acknowledges
that it has conducted an independent investigation of the TEGG Business and
System and recognizes that the business venture contemplated by this Agreement
involves business risks and its success will be largely dependent upon the
ability of LICENSEE as an independent businessman. TEGG expressly
disclaims the making of, and LICENSEE acknowledges that it has not received,
any
warranty or guarantee, express or implied, as to the potential sales volume,
revenues, profits or other successes of the business venture contemplated
by
this Agreement.
LICENSEE acknowledges
that it has received, read and understood this Agreement and that TEGG has
accorded LICENSEE ample time and opportunity to consult with advisors of
its own
choosing about the potential benefits and risks of entering into this
Agreement.
43. Effective
Date
The Effective Date
of
this Agreement shall be the date both parties have executed this
agreement.
The Effective Date
of
this License Agreement therefore is _________________________, 20
_____.
14
44. Approvals
and Consents
Whenever the approval
or
consent of TEGG is required under this Agreement or the Manual, such consent
shall be requested, and obtained, in the manner specified by this Agreement
or
the COM. TEGG agrees that it will not unreasonably delay, withhold or deny
approval or consent.
45. TEGG'S
Withholding of Consent -- LICENSEE'S Exclusive
Remedy
In no event may
LICENSEE
make any claim for money damages based on any claim or assertion that TEGG
has
unreasonably withheld or delayed any consent or approval to a proposed act
by
LICENSEE under the terms of this Agreement. LICENSEE waives any such claim
for damages. LICENSEE may not claim any such damages by way of setoff,
counterclaim or defense. LICENSEE'S sole remedy for the claim will be an
action
or proceeding to enforce the Agreement provision, for specific performance
or
for declaratory judgment.
46. Entire
Agreement
This Agreement shall
constitute the entire agreement between TEGG and LICENSEE and shall supersede
all prior agreements with respect to the subject matter hereof. No
amendment, change or modification to this Agreement shall be binding unless
made
in a writing executed by TEGG and LICENSEE.
IN WITNESS WHEREOF,
the
parties hereto, intending to be legally bound, have executed this Agreement
on
the date and year first written above.
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ATTEST:
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TEGG
Corporation
|
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|
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||
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______________________________________
|
By:
_______________________________,
|
|
|
Secretary
|
(Title)
|
|
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[CORPORATE
SEAL]
|
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ATTEST:
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LICENSEE
|
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_____________________________________
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By: _______________________________,
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|
Secretary
|
(Title)
|
|
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[CORPORATE
SEAL]
|
Each of the undersigned
owns a five percent (5%) or greater beneficial interest in LICENSEE, each
has
read this Agreement and each agrees to be individually bound by the terms
of
Sections 8, 19, 23, 24 and 32.
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______________________________________
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By:
______________________________________
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|
Witness
|
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______________________________________
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By:
______________________________________
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Witness
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______________________________________
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By:
______________________________________
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Witness
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||
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______________________________________
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By:
_______________________________________
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Witness
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||
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||
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______________________________________
|
By:
_______________________________________
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Witness
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15
