CROSS LICENSE AGREEMENT DATED AS OF MARCH 21, 2007 (“AGREEMENT”) BETWEEN APPLICA INCORPORATED (“APPLICA”) AND SALTON, INC. (“SALTON”) Background
Exhibit
(d)(25)
CROSS LICENSE AGREEMENT
DATED AS OF MARCH 21, 2007 (“AGREEMENT”)
BETWEEN APPLICA INCORPORATED (“APPLICA”) AND SALTON, INC. (“SALTON”)
DATED AS OF MARCH 21, 2007 (“AGREEMENT”)
BETWEEN APPLICA INCORPORATED (“APPLICA”) AND SALTON, INC. (“SALTON”)
Background
A Applica owns or has the right to use and license certain intellectual property related to
the marketing, distribution and sale of portable household appliances.
X. Xxxxxx owns or has the right to use and license certain intellectual property assets
related to the marketing, distribution and sale of portable household appliances.
C. Applica is willing to xxxxx Xxxxxx. and Salton desires to obtain, a limited license to use
such intellectual’ property assets owed or licensed by Applica upon the terms and conditions set
forth in this Agreement.
X. Xxxxxx is willing to grant Applica, and Applica desires to obtain, a limited license to use
such intellectual property assets owed or licensed by Salton upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and conditions contained
herein, Salton and Applica agree as follows:
1 — Definitions.
In this Agreement the following expressions have the following meanings:
“Applica Marks” — The trade marks which Applica owns or licenses, with the right to
sublicense. listed on Appendix A-1.
“Applica Patents” — The patents which Applica owns or licenses, with the right to
sublicense, listed on Appendix A-1
“Designated Manufacturer” — means the approved manufacturer who manufactures the Designated
Products for Licensee’s sale only pursuant to the terms of this Agreement, as set forth on
Appendices A-1 and A-2.
“Designated Products” — means the products for which the Licensed Intellectual Property may
be used, as set forth on Appendices A-1 and A-2
“Designated Territory” — means the territory listed in Appendices A-1 and A-2 in which the
Licensee may use the Licensed Intellectual Property.
“including” — means including, as an example. but not limited to.
“Licensed Intellectual Property” — The Applica Marks and Applica Patents or Salton Marks and
Salton Patents, as applicable, which one party has agreed to license or sublicense to
the other as the context requires.
“Licensee” — shall apply to Applica and to Salton, and their respective direct and indirect
100% owned subsidiaries, as applicable, to the extent that each has received a
license from the other to use the Licensed Intellectual Property.
“Licensor” — shall apply to Applica and to Salton and their respective direct and indirect
100% owned subsidiaries to the extent each has granted a license to the ether to use
Licensed Intellectual Property.
“Net Sales” — means an amount determined as follows:
| i. | Determine actual gross receipts from sales of the product by a party and the subsidiaries and affiliates of such party, including sales to retailers, infomercials or other direct TV sales, sales through the internet, sales through any outlet stores and other sales to third parties through all other channels of distribution. | ||
| ii. | From actual gross receipts, deduct the following: all returns from retailers or consumers, credits to retailers for products destroyed instead of being returned, all volume purchase rebates or discounts, all advertising allowances (such as co-op advertising allowances) granted to retailers, ail amounts paid to retailers for shelf space and for end caps, all credit card charges by credit card issuers deducted from credit card purchases made when consumers order products by telephone in response to telephone or Internet offers or sales through other retail outlets and mailing and freight costs for shipping to consumers (unless separately charged and paid for by consumers). |
“Salton Marks” The trade marks which Salton owns or licenses, with the right to sublicense,
which are included in this Agreement and are listed on Appendix A-2.
“Salton Patents” — The patents which Salton owns or licenses, with the right to sublicense,
listed on Appendix A-2.
to “use” — means to use, sale, make. have made, import and export or similar activity.
2 — Licenses and Limitations.
2.1 Salton hereby grants Applica and its direct and indirect 100% owned subsidiaries an
exclusive license (with no right to grant sublicenses) and right to use the Salton Marks and
Salton Patents on or in connection with the Designated Products for sale by Applica in the
Designated Territory during the Term (as defined in Section 9 of this Agreement).
2.2 Applica hereby grants Salton and its direct and indirect 100% owned subsidiaries an
exclusive license (with no right to grant sublicenses) and right to use the Applica Marks
and Applica Patents on or in connection with the Designated Products for sale by Salton in
the Designated Territory during the Term (as defined in Section 9 of this Agreement).
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2.3 Licensee agrees that the Designated Products will be manufactured solely by the
Designated Manufacturer and either (i) the Designated Products using the Licensed
Intellectual Property shall be manufactured strictly in accordance with the designs,
specifications and quality standards previously established in writing by the Licensor or
(h) the designs, specifications and quality standards of the Designated Products shall be
approved in writing by the Licensor (which approval shall not be unreasonably withheld)
prior to any production start authorization for such product.
2.4 Licensee undertakes and agrees to use the Licensed Intellectual Property only on or in
connection with the Designated Products which have been approved by Licensor in accordance
with the provisions of this Agreement. Licensee agrees that it will not advertise,
distribute, sell or otherwise market any products under the Licensed Intellectual Property
which have not been so approved. Licensee agrees to comply with the criteria set forth from
time to time by Licensor with respect to the appearance and manner of use of the Licensed
Intellectual Property.
2.5 Licensee shall not use nor authorize others to use the Licensed Intellectual Property on
or in connection with the distribution of Designated Products as premiums, promotions or
giveaways. In no event during the Term of this Agreement or thereafter, shall Licensee use
the Licensed Intellectual Property as part of its corporate name or trade name or authorize
others to do so.
2.6 Licensee understands and agrees that it has no right or license from Licensor under this
Agreement to use, and it shall not use, the Licensed Intellectual Property in connection
with the manufacture (except by Designated Manufacturers), use, advertising, promoting,
marketing, offering to sell, selling or exporting Designated Products or any other product
in or to countries outside of the Designated Territories. Licensee agrees to require
Designated Manufacturers and other applicable third parties to agree not to use, advertise,
promote, market, offer to sell, sell or export Designated Products or any other product in
or to countries outside of the Designated Territories. Licensee agrees that if a Designated
Manufacturer or other third party violates such agreement and it becomes known to Licensee,
Licensee will immediately notify Licensor of such violation and work in good faith with
Licensor to properly address the problem.
2.7 Neither party shall have responsibility for the ability of the other party to use the
Licensed Intellectual Property licensed to said other party hereunder or for the quality or
the performance of the licensed product manufactured using the same or for any claims of
third parties arising from the use thereof. Accordingly, the party that is Licensee shall
alone be responsible for all guarantees and warranties, express or implied, in relation to
the products manufactured by or for it under license hereunder using the Licensed
Intellectual Property of the other party and for any claims arising in connection therewith
and for conforming with all applicable laws, regulations and standards relating to such
products.
2.8 Upon written request, Licensor will provide Licensee copies of all registrations for the
Licensed Intellectual Property.
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2.9 Licensee shall receive no ownership or rights in the Licensed Intellectual Property.
except as expressly provided herein.
3.0 — Obligations of the Licensee.
3.1 Prior to Licensee’s use of the Licensed Intellectual Properly on any new Designated
Product or on any significant redesign or change of a previously approved Designated
Product, Licensee shall, at Licensee’s expense, submit to Licensor, for
Licensor’s prior written approval (which shall not be unreasonably withheld), the
following:
(a) two specimens of each Designated Product to be sold by Licensee using the Licensed
Intellectual Property (“Specimens”);
(b) evidence that such products have been approved by either Underwriters Laboratories
(“UL”)and/or Intertek Testing Services, Inc (“ETL”) so that such approvals can be advertised
and/or marked on the Designated Products;
(c) any independent consumer product safety and performance test reports for each
Specimen (“Test Reports”), to the extent that such Test Reports, in addition to UL or ETL
approval, are in the possession of Licensee or may be reasonably requested by Licensor;
(d) all artwork which Licensee intends to use in connection with the Designated
Products: and
(e) all packaging, advertising and promotional literature which Licensee intends to use
in the marketing of the Designated Products.
The items set forth in subsections (a) through (e) are hereby referred to as the “Approval
Materials”.
Licensor shall give Licensee written notice of its approval or disapproval within 15
business days from its receipt of the Approval Materials. If Licensor disapproves, its
written notice shall explain in reasonable detail the reasons for disapproval so that
Licensee may prepare and submit new Approval Materials. After Licensor has given its written
approval of the Approval Materials, then such Approval Materials shall be the standard for
the design, construction, quality and safety of the product produced using the trademarks
thereafter (the “Approved Quality”). Thereafter, at 12-month intervals, upon Licensors
written request, Licensee shall, at Licensee’s expense, submit to Licensor Test Reports for
not less than two randomly selected production run samples (“Sample’) of each Designated
Product. Without the prior written approval of Licensor. Licensee shall not sell or
distribute any Designated Product which deviates from the Approved Quality. including
seconds and irregulars, under any circumstances without Licensor’s prior written consent.
Notwithstanding the foregoing, provided Licensee gives Licensor prior written notice,
Licensee may from time to time revise packaging for the Designated Products solely to
include or change statements or other information which may be
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required by the rules of UL. ETL or laws or regulations of any jurisdiction where
such Designated Products are sold.
3.2 Licensee shall indicate on all product packaging and related advertising materials
intended to be distributed to consumers that the licensed products are manufactured and
distributed by or for Licensee.
3.3 Licensor shall have the right at reasonable times on prior notice to Licensee to
visit any Designated Manufacturer no more than twice in a calendar year to conduct a survey
or audit to ensure that reasonable quality controls are being used in association with the
production of the Designated Products. Licensee agrees to cooperate with Licensor in
carrying out such inspections
3.4 Licensee agrees to comply with any laws, rules and/or regulations with regard to the use
and designation of the Licensed Intellectual Property within the Designated Territory,
including the separate countries within the Designated Territory and other governmental
units within such countries.
3.5 Licensee acknowledges and agrees that any unauthorized use or misuse of the Licensed
Intellectual Property by Licensee may result in irreparable harm to Licensor and that
Licensor, in addition to any other rights or remedies specified in this Agreement, shall be
entitled to any remedy, legal or equitable. including without limitation preliminary
injunctive relief, to correct or mitigate any harm which results from such violation.
3.6 Licensee shall use commercially reasonable efforts in accordance with its customary
business practices to use the Licensed Intellectual Property consistent with reasonable
marketing plans in the Licensee’s Territory.
3.7 At the request of the Licensor, Licensee shall meet with Licensor at least quarterly per
year to review and discuss advertising and promotion plans for the products sold
under the Licensed Intellectual Property.
3.8 Where feasible, the Designated Products, product packaging, owners manuals and other
related documents for the Designated Products, and promotional and advertising materials for
the Designated Products bearing the Licensed Intellectual Property shall bear the
appropriate trademark notice of “®” or “™” and the applicable patent information, if any,
and shall additionally carry an appropriate ownership legend, as follows.
“*”is a trademark of
[Applica Incorporated. Miramar. Florida U.S.A./
Salton, Inc., Lake Forest. Illinois U.S.A.]
[Applica Incorporated. Miramar. Florida U.S.A./
Salton, Inc., Lake Forest. Illinois U.S.A.]
3.9 Licensee acknowledges that Licensor has not registered the Licensed Intellectual
Property in any Designated Territory unless specifically set forth on Appendix A-1 or A-2;
as appropriate. Licensee agrees that it will not sell or distribute any products bearing the
Licensed Intellectual Property in any Designated Territory under this Agreement until
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(a) Licensor has properly registered the applicable Licensed Intellectual Property for such
Designated Product (as indicated on the applicable Appendix or subsequent to the execution
of this Agreement); or (b) Licensor and Licensee have mutually agreed in writing that such
registration is not necessary. Upon Licensor’s request, Licensee shall cooperate fully and
in good faith with Licensor for the purpose of securing and preserving Licensor’s rights in
and to the Licensed Intellectual Property in any Designated Territory.
4 — Cooperation and Confidentiality.
Licensor will grant the Licensee whatever rights, if any, may have to source the manufacture
of products from the Designated Manufacturers on the terms and conditions set forth in this
Section 4.
4.1 Licensor hereby grants a license (with no right to grant sublicenses) to Licensee to use
in the manufacture of the Designated Products and sale in the Designated Territories. (i)
all other intellectual property rights which Licensor owns, if any, in and to the utility
and design of a Designated Product, and (ii) Licensor’s rights. if any, to tooling used to
manufacture the Designated Products.
4.2 Licensee shall maintain as confidential and shall not, without Licensor’s prior written
consent. disclose or divulge to any third party, or use except in accordance with the terms
of this Agreement, the details or substance of the Licensed Intellectual Property or any
other intellectual property assets of Licensor; provided that the foregoing restrictions
shall not apply to any of the Licensed Intellectual Property or other intellectual property
assets that Licensee can demonstrate (a) was publicly known prior to the date of this
Agreement or (b) came into the public knowledge by any legitimate means without violating
this Agreement or (c) is being furnished to a Designated Manufacturer or (d) is required by
law or court order.
4.3 Licensee shall limit access to the Licensed Intellectual Property or any other
intellectual property assets of Licensor to those of its personnel who have a need to know
if and, to the extent such personnel are not so obligated by agreement or otherwise, shall
require that such personnel maintain its confidentiality as provided herein.
5 — Royalties.
5.1 Applica shall pay Salton a royalty determined as a percentage of the Net Sales of all
Designated Products as follows:
| a. | 2% on Xxxxxxx Xxxxx Marks; | ||
| b. | 5% on Xxxxxx Xxxxxxx Marks; and | ||
| c. | 3% on all other Salton Marks. |
5.2 Salton shall pay Applica a royalty determined as a percentage of the Net Sales of all
Designated Products as follows:
| a. | 10% on all self-cleaning litter boxes bearing the Littermaid® Marks; |
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| b. | 5% on Infrawave™ marks; and |
||
| c. | 3% on all other Applica Marks. |
5.3 Royalty payments owing to Licensor shall be payable not later than 30 days following the
end of each calendar quarter commencing with the calendar quarter ended June 30, 2007.
5.4 Not later than 30 days after the end of each calendar quarter, the Licensee shall
deliver to the Licensor a true and accurate report certified by the chief financial officer
of the Licensee. setting forth a calculation of the royalties due under this Agreement by
the Licensee for the preceding calendar quarter. The report shall include at least the
following:
| (1) | the number and type of Designated Products sold by country; | ||
| (2) | the calculation of the royalty payment due with such other information and detail as the Licensor may reasonably request; and | ||
| (3) | the total payment due. |
If no payments are due, it shall be so reported. The quarterly report shall contain such
additional details as the Licensor shall reasonably request from time to time.
5.5 Licensee shall each keep full, true and accurate books of account containing all
particulars which may be necessary for the purpose of determining the amount of royalties
owed by the Licensee under this Agreement. The books and the supporting data of the Licensee
shall be open at all reasonable times, for one year following the end of the period to which
they pertain, to an inspection, on a confidential basis, by an employee or an independent
public accountant retained by the Licensor, at the Licensor’s expense, for the purposes of
verifying the accuracy of the Licensee’s payments. If such inspection and resulting report
set forth an underpayment by Licensee, the Licensee shall immediately pay such amount to the
Licensor. Additionally. if the inspection shows an annual under payment in excess of 3%,
upon written request and the submission of reasonable substantiation, the Licensee shall pay
the fees and all reasonable out-of-pocket costs of the Licensor, including fees of an
independent public accountant Of one is engaged by the Licensor), incurred in the audit of
the royalty payments due. If a correction or adjustment is required with respect to a
quarterly report for a prior quarter, for any reason, including charge backs by retailers,
returns of products reported as sold in a prior quarter or other matters, the correction or
adjustment shall be recorded for the quarter during which it is determined that an
adjustment or correction is required.
5.6 Sales of Designated Products in currencies other than United States dollars shall be
converted to United States dollars at the conversion rate charged by Bank of America, NA, in
New York City for the business day next preceding the date on which payment is made to the
Licensor.
5.7 All payments made hereunder by the Licensee shall be made payable to the Licensor by
wired funds and notice of the payment with tracking information shall be given:
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In the case of Salton Inc.
| To: | Salton Inc. 0000 Xxxxx Xxxxxxx Xxxxxxxxx Xxxxxxxx. XX 00000 Attention: Xxxxxxx Xxxx, Chief Financial Officer |
And in the case of Applica Incorporated
| To: | Applica Incorporated 0000 Xxxxxxxx Xxxx Xxxxxxx, XX 00000 Attention: Xxxxx Xxxxxxxxx, Chief Operating Officer |
6.0 — Ownership Of Licensed Intellectual Property; Infringement.
6.1 Licensee acknowledges that the Licensed Intellectual Property, along with the goodwill
of the business symbolized thereby, are the sole and exclusive property of the Licensor. as
applicable, and that Licensor owns substantial and valuable goodwill in Licensed
Intellectual Property. Licensee shall not during the Term or at any time thereafter (a)
attack or assist another in attacking the title or rights of Licensor in or to the Licensed
Intellectual Property; (b) claim any right, title or interest in or to the Licensed
Intellectual Property adverse to Licensor; or (c) register or apply to register the Licensed
Intellectual Property or any confusingly similar intellectual property anywhere in the
world. If Licensee challenges the validity or enforceability of the Licensed Intellectual
Property, Licensee agrees to pay triple (3X) royalties during any such action.
6.2 All usage of the Licensed Intellectual Property by Licensee and the goodwill associated
therewith shall inure to the benefit of Licensor. Licensee agrees and acknowledges that it
will, and shall be deemed to have, assigned, transferred and conveyed to Licensor any
rights, good will, titles or other rights in and to the Licensed Intellectual Property which
may have been obtained by Licensee or which might be claimed to have vested in Licensee in
pursuing the marketing and sale of Designated Products bearing Licensed Intellectual
Property. Licensee shall execute any instrument requested by Licensor to accomplish or
confirm the foregoing. Any such assignment, transfer or conveyance by Licensee shall be
without any consideration from Licensor. Licensor shall retain the right and title to all
improvements developed by either party. but agrees to license back such improvements to
Licensee for use during the term of the Agreement under the provisions hereof. Upon request
and upon termination of this Agreement, Licensee shall provide Licensor written notice of
any improvements made to the Licensed Intellectual Property.
6.3 Licensee shall take all commercially reasonable measures to maintain and protect
Licensor’s proprietary rights including placing any notice of such ownership that Licensor
shall reasonably require. Licensee shall cooperate fully and in good faith with Licensor for
the purpose of securing and preserving Licensor’s rights in and to the Licensed Intellectual
Property in the Designated Territory. To the extent that Licensee
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incurs any out-of-pocket expenses as a result of such cooperation, including reasonable
legal fees and costs, Licensor shall reimburse Licensee. Licensee shall give Licensor prompt
and immediate notice of any infringements by third parties of the Licensed Intellectual
Property known by Licensee or any use, application or registration of any intellectual
property right that is the same or similar to the Licensed Intellectual Property. At
Licensor’s request, Licensee shall provide Licensor full cooperation for Licensor’s
protection of the Licensed Intellectual Property for the Designated Products, If Licensor
decides to protect the Licensed Intellectual Property, Licensor shall have the right to
bring suit or other legal or administrative proceeding in its own name or the name of
Licensee, or both, at to prosecute and/or settle the same and all costs incurred and
recoveries made shall be for the account of Licensor. Nothing herein contained, however,
shall be construed to obligate Licensor to take any action against a third party concerning
the Licensed Intellectual Properly. Licensee shall not take any legal action to protect
against any infringement of the Licensed Intellectual Property without Licensor’s prior
written permission.
6.4 Licensee shall not in any way seek to avoid its obligations hereunder because of
the assertion or allegation by any persons, entities or government agencies, bureaus, or
nstrumentalities that the Licensed Intellectual Property is invalid or ineffective or by
reason of any contest concerning the rights of Licensor therein; provided however, that, if
there is a final determination by a court having final jurisdiction of a judicial dispute or
binding arbitration that a third party owns the Licensed Intellectual Property or Licensor’s
rights granted to Licensee in this Agreement. Licensee shall be relieved of its obligation
hereunder to the extent such final determination eliminates Licensor’s rights in the
Licensed Intellectual Property in the Licensee’s Territory. If Licensee is required by a
court to obtain a license from a third party to use any of the Licensed Intellectual
Property, royalties due to Licensor hereunder shall be reduced by any amount paid pursuant
to any required third party license.
6.5 Licensee shall fully cooperate with Licensor, at Licensor’s request and expense, to
maintain and renew existing registrations of Licensed Intellectual Property, obtain new
registrations and take such other necessary actions respecting the acquisition and
maintenance of the Licensed Intellectual Property licensed hereunder as Licensor, in its
sole judgment, deems advisable. The parties shall cooperate with each other in connection
with the defense of any opposition or cancellation proceeding filed by any third party
against any of Licensor’s applications or registrations of the Licensed
Intellectual Property and in any litigation or other third party proceeding involving the
Licensed Intellectual Property, in each case insofar as they pertain to the Designated
Products. However, nothing herein shall be construed as to require Licensor to defend any of
the Licensed Intellectual Property in any such opposition, cancellation or other proceeding.
7.0 — Representations, Warranties And Covenants.
| 7.1 | Applica represents, warrants and covenants to Salton as follows: |
7.1.1 Applica is a corporation duly organized, validly existing and in good
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standing under the laws of Florida. Applica has ail corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
7.1.2 The execution, delivery and performance by Applica of this Agreement and the
consummation of the transaction contemplated hereby has been duly and validly
authorized by all requisite corporate action, and no other corporate act or
proceeding on the part of Applica is necessary to authorize the execution, delivery
and performance of this Agreement and the consummation of the transaction
contemplated hereby.
7.1.3 Applica is not subject to nor obligated under its certificate of incorporation
or bylaws, any applicable law, rule or regulation of any governmental authority, or
any agreement. instrument, license or permit, or subject to any order, writ,
injunction or decree, which would be breached or violated by its
execution. delivery or performance of this Agreement.
7.1.4 Applica is the owner of the Applica Marks and Patents in the United States.
Applica makes no representation or warranty as to whether or not Salton’s use of the
Licensed Intellectual Property in the manufacture. advertising and sale on any
product within the Designated Territories infringes any intellectual property or any
other rights of any third party.
7.1.5 Applica is not subject to nor obligated under any agreement, instrument,
license or permit, or subject to any order, writ, injunction or decree, which would
be breached or violated by its execution, delivery or performance of this Agreement.
7.1.6 Applica’s execution and delivery of this Agreement and performance of its
obligations hereunder, including the obligation of payments hereunder, do not and
will not conflict with, violate, or result in any default under any agreement,
instrument or other contract to which Applica is a party or by which it is bound.
7.1.7 There are no claims, actions, suits. or other proceedings pending, or to the
knowledge of Applica, threatened, which, if adversely determined, would adversely
affect the ability of Applica to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder.
| 7.2 | Salton represents, warrants and covenants to Applica as follows: |
7.2.1 Salton is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Salton has all corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.
7.2.2 The execution, delivery and performance by Salton of this Agreement and the
consummation of the transaction contemplated hereby has been duly and validly
authorized by all requisite corporate action, and no other corporate act or
proceeding on the part of Salton is necessary to authorize the execution, delivery
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and performance of this Agreement and the consummation of the transaction
contemplated hereby.
7.2.3 Salton is not subject to nor obligated under its certificate of incorporation
or bylaws, any applicable law, rule or regulation of any governmental authority, or
any agreement, instrument, license or permit, or subject to any order, writ,
injunction or decree, which would be breached or violated by its execution, delivery
or performance of this Agreement.
7.2.4 [Salton is the owner of the Salton Marks and Patents. or as a licensee has the
right to license the Salton Marks and Patents, to Applica as Licensee in the
Designated Territories set forth on Appendix A-2. Salton makes no representation or
warranty as to whether or not Applica’s use of the Licensed Intellectual Property
within the Designated Territories not set forth on Appendix A-2 in the manufacture.
advertising and sale of any product infringes any intellectual property or any other
rights of any third party.] [to be discussed]
7.2.5 Salton is not subject to nor obligated under any agreement,
instrument, license or permit. or subject to any order, writ, injunction or decree,
which would be breached or violated by its execution, delivery or performance of
this agreement.
7.2.6 Salton’s execution and delivery of this Agreement and performance of its
obligations hereunder, including the obligation of payments hereunder, do not and
will not conflict with, violate, or result in any default under any agreement,
instrument or other contract to which Salton is a party or by which it is bound.
7.2.7 There are no claims, actions, suits, or other proceedings pending, or to the
knowledge of Salton, threatened, which, if adversely determined, would adversely
affect the ability of Salton to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder.
8.0 — Indemnification and insurance Coverage.
8.1 Each of Applica and Salton (referred to as the “Indemnitor”, as applicable) hereunder
shall defend, indemnify and hold the other party and its affiliates, as well as their
respective officers, directors, agents, employees, successors and assigns (referred to
collectively as the “Indemnitee”), harmless from and against any and all claims, suits,
damages, liabilities, costs and expenses including court costs and reasonable attorneys
fees, arising out of, or based on:
8 1.1 the breach of any representation, warranty, covenant or obligation of the
Indemnitor under this Agreement:.
8.1.2 any use by the Indemnitor as a licensee of the Licensed Intellectual Property
in a manner which is not permitted by or not in accordance with the terms of this
Agreement;
8.1.3 any defect or alleged defect in the products marketed by an Indemnitor
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using the Licensed Intellectual Property including, without limitation,
any injuries or death to persons or damage or destruction of property arising
therefrom;
8.1.4 the use of the Licensed Intellectual Property by the Indemnitee as permitted
in accordance with this Agreement in the Designated Territories, including any
third-party infringement claims, but only to the extent that Indemnitor has either
(i) indicated on the applicable Appendix that such Licensed Intellectual Property
has been properly registered, or (ii) registered such Licensed Intellectual Property
pursuant to Section 3.9 of this Agreement; it being understood by Licensee
that Licensor shall not be responsible for indemnification under this subsection to
the extent that the Licensed Intellectual Property at issue in the claim was not
registered by Licensor.
8.1.5 the gross negligence or willful misconduct of the Indemnitor.
8.2 The Indemnitee shall promptly notify the Indemnitor of the
existence of any claim, demand or other action giving rise to a claim for indemnification under this Agreement which involves a
third party (a “Third Party Claim”) and shall give the Indemnitor the right to assume the defense and control the same at its own
expense and with its own independent counsel, provided that: (i) the independent counsel shall be reasonably acceptable to the Indemnitee; (ii) the Indemnitee shall at all times have
the right to participate in such defense at its own expense; and (iii) in any instance where
because of conflicts of interest to the extent that the Indemnitee incurs reasonable
out-of-pocket expenses, including reasonable legal fees, the Indemnitor shall, upon written
request. reimburse the Indemnitee for such costs. Whether the Indemnitor or Indemnitee is
controlling the defense of a Third Party Claim, it shall select counsel, contractors,
experts and consultants of recognized standing and competence. shall take all steps
necessary in the investigation, defense or settlement thereof, and shall at all times
diligently and promptly pursue the resolution thereof. The party conducting the defense
shall at al times act as if all damages relating to the Third Party Claim were for its own
account and shall act in good faith and with reasonable prudence to minimize any damages
therefrom. The Indemnitee shall, and shall cause its officers, directors, employees and
affiliates to cooperate fully with the Indemnitor, at the Indemnitor’s expense, in
connection with any Third Party Claims.
8.3 The Indemnitor shall be authorized to consent to a settlement of, or the entry of any
judgment arising from, any Third Party Claims, and the Indemnitee shall consent to a
settlement of, or the entry of any judgment arising from, such Third Party Claims; provided,
that the Indemnitor shall (a) pay or cause to be paid all amounts arising out of such
settlement or judgment concurrently with the effectiveness thereof; (b) shall not
encumber any of the assets of any Indemnitee or agree to any restriction or condition that
would apply to any Indemnitee or to the conduct of such party’s business; and (c) shall
obtain, as a condition of any settlement or other resolution, a complete release of each
Indemnitee against any and all damages resulting from, arising out of or incurred with
respect to such settlement or other resolution. Except for the foregoing, no settlement or
entry of judgment in respect of any Third Party Claim shall be consented to by any
Indemnitor or Indemnitee without the express written consent of the other party.
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8.4 Without cost to the other party, Applica and Salton shah each maintain insurance that
protects the other and its wholly owned affiliates, its officers and its directors, as a
named or designated insured party, in connection with (a) any alleged defect(s) in any
product marketed under the Licensed Intellectual Property, and (b) the use, manufacture,
distribution, marketing, sale, service, or disposal of the such products bearing the
Licensed Intellectual Property. The amounts and coverages of such insurance shall be as
Applica and Salton from time to time hereafter agree in writing, but at a minimum shall be
not less than $5,000,000 per occurrence with aggregate liability limits of not less than
$25,000,000. Each shall continue to maintain such coverage in effect for at least five years
after the termination of this Agreement.
8.4.1 All insurance shall be provided by insurance companies, on policy forms. and
with deductibles acceptable to the Licensor of the Licensed Intellectual Property,
such acceptance not to be unreasonably withheld. Any deductible shall be the
responsibility of the Indemnitor.
8.4.2 The insurance shall be primary with no rights of contribution equitable or
otherwise with any other insurance carried by the Indemnitor. If an Indemnitor makes
any payment on any claim, the Indemnitor shall be subrogated, to the extent of such
payment, to all rights and remedies of the Indemnitee to any insurance benefits or
other claims of the Indemnitee with respect to such claim.
8.4.3 Each party shall furnish the other with certificates of insurance evidencing
the insurance in force satisfying the requirements of this Agreement within 15 days
after execution of this Agreement, and annually thereafter. Such certificates will
stipulate that coverage will not be canceled, reduced, or modified without 30 days
prior written notice to the named insured. Any cancellation, reduction or
modification, without the prior written consent of the named insured, which results
in there not being in force insurance coverage which satisfies all the requirements
of this Section 8.4 shall be deemed a material breach of this Agreement.
8.4.4 At reasonable times on advance written notice to the Licensee, the Licensee
will furnish the Licensor with copies of the insurance policies required.
8.5 Indemnitor shall have no liability for damages, losses, liabilities, costs or expenses
of Indemnitee to the extent that Indemnitee could have mitigated such damages, losses,
liabilities, costs and expenses in accordance with reasonable business and legal practices.
9.0 — Term and Termination.
9.1 The Term of this Agreement shall terminate on June 1, 2008, unless sooner terminated in
accordance with this Section 9.
9.2 Either party may elect to terminate this Agreement upon notice given not less than 12
full calendar months next succeeding the date when notice is given to the other party.
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9.3 Either party may elect to terminate this Agreement in the event of a material breach by
the other party of any of the terms of this Agreement, the party claiming such breach shall
give notice to the other, specifying the circumstances pertaining to such breach in form
sufficient to give the other party an opportunity to correct the breach. If such breach
shall not have been remedied during a 30-day period immediately following the delivery of
such notice, the party giving notice shall have the right to give notice to the other in
writing of its decision to terminate this Agreement.
9.4 Either party may elect to terminate this Agreement, in its sole and absolute discretion.
in the event the other party files a petition for bankruptcy, or is adjudicated a bankrupt,
or makes an assignment for the benefits of its creditors, or files a petition or otherwise
seeks relief under or pursuant to any bankruptcy, insolvency or reorganization statute or
proceeding or if a custodian, receiver or trustee is appointed for in or a substantial
portion of its business or assets. Such termination shall be effective immediately upon
written notice to the other party.
9.5 Waiver by any party of its right to terminate because of any one breach shall not
constitute a waver of any subsequent breach of the same or of a different nature. No
termination of this Agreement by expiration or otherwise shall relieve or release any party
from any of its obligations hereunder with respect to royalties due or acts committed under
this Agreement.
9.6 Upon the expiration of this Agreement:
9.61 All rights granted to both panties hereunder terminate at such expiration;
except as expressly set forth below.
9.6.2 Each Party shall immediately discontinue selling its remaining inventory of
products sold pursuant to the Agreement. Each party shall be entitled to receive
royalties on sales prior to termination. After the termination, each party shall
immediately destroy all products and packaging and promotional material remaining in
its possession or control which are identified in any manner by or with Licensed
Intellectual Property.
9.6.3 Royalties owing by either party shall be reported and paid during the in
accordance with the terms of Section 4 and for the quarterly period ending
immediately following termination,
10.0 — Miscellaneous.
10.1 Choice of Law. This Agreement shall be construed, interpreted and governed in
accordance with the laws of the State of New York.
10.2 Jurisdiction; Service of Process. Any proceeding arising out of or
relating to this Agreement will be brought in the courts of the State of New York. and each
of the parties irrevocably submits to the exclusive jurisdiction of each such court in any
such proceeding, waives any objection it may now or hereafter have to venue or to
convenience of forum. agrees that all claims in respect of the proceeding shall
be heard
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and determined only in any such court and agrees not to bring any proceeding arising out of
or relating to this Agreement in any other court. The parties agree that either or both of
them may file a copy of this paragraph with any court as written evidence of
the knowing, voluntary and bargained agreement between the parties irrevocably to waive any
objections to venue or to convenience of forum. Process in any proceeding referred to In the
first sentence of this section may be served on any party anywhere in the world.
10.3 Notice. All notices required to be sent to either party shall be in writing
addressed to the party as set forth below (or to such other address of which either party
may notify the other hereunder) and shall be deemed given only when delivered during
business hours on a day when offices are generally open for business in the city
in which the notice is delivered. Notices shall be delivered only by the following two
methods: (1) by certified or registered U.S. Mail, postage prepaid, return receipt
requested, or 2. by nationally known overnight courier, charges prepaid, such as UPS or
Federal Express, return receipt requested and addressed as follows,
In the case of Salton Inc
| To: | Salton Inc. 0000 Xxxxx Xxxxxxx Xxxxxxxxx Xxxxxxxx. XX 00000 Attention: Xxxxxxx Xxxx, Chief Financial Officer |
And in the case of Applica Incorporated
| To: | Applica Incorporated 0000 Xxxxxxxx Xxxx Xxxxxxx, XX 00000 Attention: Xxxxx Xxxxxxxxx, Chief Operating Officer |
or to such changed address or person as Salton or Applica shall have specified by notice
given pursuant to this Section 10.2. Refusal of receipt shall be deemed to be receipt.
10.4 Assignment. Neither Party shall assign this Agreement in whole or in part
without the prior written consent of the other.
10 5 Entire Agreement. This instrument sets forth the entire and only agreement
between the parties hereto as to the subject matter hereof; it reflects and merges all
pertinent prior discussions and correspondence pertaining thereto, and supersedes and
cancels all pre-existing agreements pertaining thereto between them. Any representation.
promise, definition, warranty or condition pertaining thereto and not incorporated herein,
shall not be binding upon either party. This instrument shall not become effective unless
and until dated and signed below on behalf of each of the parties by their duly authorized
officers or representatives. This instrument and its appendices may not be modified,
enlarged, or changed in any way hereafter except by an instrument signed by each of the
parties hereto.
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10.6 Reporting Of Adverse Events. Each party shall report to the other, within five
business days from receipt of the information, any materially adverse event that is reported
to occur as a result of use of any of the products sold pursuant to the Agreement.
Any such event must be reported in as much detail as possible, whether or not there is proof
of a causal connection between the events and use of such product. A materially adverse
event includes any experience relating to a product which is reasonably regarded to be
seriously detrimental to person or property in any manner.
10.7 Relationship of Parties. The relationship hereby established between Applica
and Salton is solely that of independent contractors. This Agreement shall not create an
agency. partnership, joint venture or employer/employee relationship, and nothing hereunder
shall be deemed to authorize either party to act for, represent or bind the other except as
expressly provided in this Agreement.
10.8 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE MERGER EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
10.8.
10.9 Severability. If and to the extent that any provisions of this Agreement are
prohibited or unenforceable under any applicable law, such provisions shall be ineffective
to the extent of such prohibition or unenforceable without invalidating the remaining
provisions hereof or affecting the validity or enforceability of any other provision hereof.
IN WITNESS WHEREOF and intended to be legally bound, the parties hereby have caused these
presents to be signed by their proper officer effective as of the date first above written.
| APPLICA INCORPORATED |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Chief Operating Officer | |||
| SALTON, INC. |
||||
| By: | /s/ Xxxx Xxxxxxxxxx | |||
| Name: | Xxxx Xxxxxxxxxx | |||
| Title: | Senior Vice President | |||
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