Exhibit No. 2.4
LICENSE AND ROYALTY AGREEMENT
THIS LICENSE AND ROYALTY AGREEMENT (this "Agreement") is entered into on
this 3rd day of January, 1999 between Snap-on Financial Services, Inc. a Nevada
corporation ("SFS"), and Snap-on Credit LLC, a Delaware limited liability
company ("Company").
W I T N E S S E T H:
WHEREAS, SFS is the assignee and holder of the rights of Snap-on Credit
Corporation, a Wisconsin corporation ("SCC"), under a Program Rights Agreement
with Snap-on Incorporated, a Delaware corporation ("Snap-on") dated as of
December 1, 1998 (the "Program Rights Agreement") pursuant to which Snap-on
granted to SCC, among other things, the right to offer credit programs to
Snap-on Customers to finance the purchase of Tools and Equipment by such Snap-on
Customers;
WHEREAS, SFS is the licensee of the trademarks and service marks listed
in Exhibit A (the "Licensed Trademarks") pursuant to an Amended and Restated
Trademark License Agreement between SFS, as assignee, and Snap-on Technologies,
Inc. ("Technologies") dated as of January 2, 1999 (the "Trademark License
Agreement"), which trademarks are used in connection with credit programs
offered to customers of Snap-on and its subsidiaries;
WHEREAS, SFS and Company now desire to enter into this Agreement to set
forth the terms and conditions upon which SFS will license to Company certain of
SFS's rights under the Program Rights Agreement and the Trademark License
Agreement and Company will assume certain of SFS's obligations under the Program
Rights Agreement;
WHEREAS, capitalized definitional terms used herein and not otherwise
defined herein shall have the meaning referred to or specified in the
Definitional Supplement attached as an Exhibit to the Agreement Respecting a
Limited Liability Company dated December 1 1998 between Snap-on Incorporated and
Newcourt Financial USA Inc. ("Newcourt");
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. License Under Program Rights Agreement.
(a) Subject to the terms, conditions and limitations of this
Agreement, SFS hereby grants to Company the personal, non-exclusive and
Non-transferable right to exercise all of the rights granted to SFS under the
Program Rights Agreement with respect to the Snap-on Dealer Credit Programs and
certain other credit programs identified by SFS and Company from time to time in
a writing signed by the parties (the "Program Rights Agreement License"). For
purposes of this Agreement, "Non-transferable" means that the
right or other matters referred to may not be transferred, assigned or conveyed
except as set forth in this Agreement.
(b) Subject to the terms, conditions and limitations of this
Agreement, Company hereby assumes and agrees to comply with and be bound by all
of the terms, provisions and covenants of SCC in the Program Rights Agreement,
as they apply to the Snap-on Dealer Credit Programs, as though the Program
Rights Agreement had been made, executed and delivered by Company in lieu of
SCC. Company hereby represents and warrants to SFS all the matters set forth in
Section 5.2 of the Program Rights Agreement, except to the extent such
representations and warranties relate to credit programs other than the Snap-on
Dealer Credit Programs.
(c) For purposes of this Agreement, all references in the Program
Rights Agreement to "SCC" shall be deemed to refer to Company.
2. Sublicense Under Trademark License Agreement.
(a) Grant of Sublicense.
(i) SFS hereby grants to Company a non-exclusive sublicense
(the "Trademark Sublicense") of all of SFS's rights to the Licensed
Trademarks under the License Agreement for the sole purpose of
providing and servicing, directly or indirectly, the Snap-on Dealer
Credit Programs to the Snap-on Customers in the territory described in
Exhibit A hereto (the "Licensed Territory").
(ii) Company shall not have the right to sublicense any of
the rights granted to it under the Trademark Sublicense; provided,
however, that Company may grant a sublicense to Newcourt with respect
to such rights which allows Newcourt to use the Licensed Trademarks
solely for the purpose of providing direct financing programs, which
have been approved by SFS in writing, to Snap-on Customers.
(b) Ownership.
(i) Company acknowledges Technologies' rights in the
Licensed Trademarks and SFS's rights under the Trademark License
Agreement, and shall not at any time do or authorize to be done any
act or thing which will in any way impair the rights of Technologies
in the Licensed Trademarks or the rights of SFS under the Trademark
License Agreement.
(ii) Company shall not attempt to register the Licensed
Trademarks alone or as part of its own trademarks nor shall Company
use or attempt to register any marks confusingly similar to the
Licensed Trademarks.
(iii) It is the intention of the parties that all use of the
Licensed Trademarks shall inure to the benefit of Technologies.
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(iv) Company shall incorporate the following notice
somewhere in any advertising or promotional materials relating to the
Credit Programs:
"[particular trademark(s) licensed] are trademarks of
Snap-on Technologies, Inc. and used under sublicense from
Snap-on Financial Services, Inc."
(v) Any artwork or other graphic materials (and the ideas
embodied therein) conceived under or resulting from this Agreement,
including but not limited to copyrighted materials and trademarks,
tradenames, servicemarks and servicenames or the like, whether
developed by Company or on behalf of Company ("Work Product") shall be
the exclusive property of Technologies. Technologies shall be free to
use all Work Product in any manner it chooses, without payment of
further consideration, and Company agrees to assign, transfer and set
over to Technologies all rights, title and interest in all Work
Product. Specifically, but not to limit the foregoing, Company agrees
to assign to Technologies, its successors and assigns, world-wide
exclusive ownership of, and right, title and interest in all
copyrights to all Work Product, will recognize all Work Product as
"work-for-hire" under relevant copyright or other laws, and will take
all steps reasonably necessary to protect such copyrights on behalf of
Technologies. Company agrees to obtain the proper and necessary
releases or other agreements from its employees and/or independent
contractors who develop Work Product to insure that sole title to Work
Product is vested in Technologies. Company agrees to procure the
waiver of its employees and/or independent contractors to any moral
rights to which they may be entitled in any Work Product.
(vi) If Company desires to develop any new or different
design for any xxxx, symbol, logo, character or other element included
within the Licensed Trademarks, it shall obtain Technologies' prior
written approval. Technologies shall own all the rights in such new or
different design and all uses thereof shall inure to the exclusive
benefit of Technologies.
(vii) Company acknowledges that, from time to time and
without notice to Company, Technologies has the ability to modify
certain elements of the Licensed Trademarks, to add additional
elements to the Licensed Trademarks, or to discontinue use of some or
all of such elements. Accordingly, SFS does not represent or warrant
that the Licensed Trademarks or any elements thereof will be
maintained or used in any particular fashion. Any new elements or
modifications to existing elements developed by Technologies or SFS
following the execution of this Agreement shall be included in the
definition of Licensed Trademarks.
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(c) Goodwill And Promotional Value.
(i) Company recognizes the value of the goodwill associated
with the Licensed Trademarks and acknowledges that the Licensed
Trademarks, and all rights therein and the goodwill pertaining
thereto, belong exclusively to Technologies. Company further
recognizes and acknowledges that the Licensed Trademarks have acquired
secondary meaning in the mind of the public.
(ii) Company acknowledges the high level of quality
associated with the Licensed Trademarks and agrees that it will use
the rights granted to it hereunder in a manner consistent with
maintaining such high level of quality. Company agrees that it shall
not conduct any activity which in any way calls into question
Company's ethics or lawful practices, nor shall Company do anything
which damages or adversely affects Technologies, SFS, the Licensed
Trademarks or the goodwill associated with the Licensed Trademarks.
(d) Trademark Protection.
(i) The Trademark Sublicense granted hereunder is
conditional upon the Company's use of the Trademark Sublicense in full
and complete compliance with the provisions of the relevant laws
appertaining in the Licensed Territory or any part of it. Company
agrees to bear any and all costs which may be necessary to comply with
such laws, including but not limited to costs of registration of the
Licensed Trademarks and/or recording Company as a registered user of
the Licensed Trademarks.
(ii) Company shall pay all costs and expenses of
registration of the Licensed Trademarks in each applicable
classification in any country in the Licensed Territory wherein the
Licensed Trademarks are not yet registered. Company shall pay all
costs and expenses of filing any necessary registered user
applications listing Company as a permissible user of the Licensed
Trademarks in any of such countries.
(iii) Company shall assist Technologies' and SFS's efforts
to register Licensed Trademarks in the appropriate classes in the name
of Technologies and/or file the necessary registered user
applications.
(iv) Company agrees to provide Technologies and SFS with
such reasonable assistance as Technologies or SFS may require in the
procurement of any protection of Technologies' or SFS's rights to the
Licensed Trademarks.
(e) Representations and Warranties of SFS. SFS represents and warrants
to Company that:
(i) Technologies is the rightful owner of the Licensed
Trademarks, free and clear of any conflicting claim (including claims
under license agreements with Persons other than Snap-on Affiliates or
Subsidiaries) of any Person other than SFS;
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(ii) SFS has full legal power and authority to grant the
Trademark Sublicense; and
(iii) The Trademark Sublicense grants to Company all rights
with respect to all trademarks, service marks and tradenames which are
necessary in order for Company to conduct the Business in the manner
it has previously been conducted.
3. Royalties. In consideration for the Program Rights Agreement
License and Trademark Sublicense granted hereunder, Company shall pay to SFS
monthly a royalty fee in the amount of * (the "Base Fee"), plus or minus any
increase or decrease pursuant to the terms and conditions set forth in Exhibit B
attached hereto (the "Royalty Fee"). * . The Royalty Fee shall be payable
monthly in immediately available funds, in arrears, by Company to SFS by the
15th day of the following month. The first payment shall be due on April 15,
1999. Notwithstanding the foregoing, to the extent that the Board of Directors
of Company determines, after due consideration of Company's income and expenses
(including the amount of the Snap-on Management Fees and the Newcourt Management
Fees) in any month, that Company's * , which are due and payable that month,
then Company shall pay a pro-rata portion of * which are due and payable that
month and the shortfalls shall be paid on a pro-rata basis from future * , as
determined by Company's Board of Directors, together with the monthly payment
that is then due hereunder. The term "Originations" shall mean the Finance
Contracts recorded by Company on its books and records as an asset regardless if
such Finance Contracts are purchased by Company from an Authorized Dealer,
Snap-on Incorporated or any of its Affiliates or are originated directly by
Company or are originated directly by Newcourt pursuant to any vendor program
agreement authorized by Company; provided, however, that any Finance Contracts
included in the Existing Portfolio shall be excluded from the definition.
4. Indemnification.
(a) Company agrees to save, protect, indemnify and hold harmless SFS
and its employees, officers, directors, agents and representatives from and
against all liabilities, costs (including attorneys' fees and disbursements),
claims and charges arising from or relating to (i) any breach by Company of this
Agreement; and (ii) the breach by Company of the Program Rights Agreement,
including any violation by Company or any of its employees or agents of any law
applicable to the sale, lease or other furnishing of Tools and Equipment or to
any related Financings or Ancillary Services (including, without limitation, any
law relating
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* Indicates that material has been omitted and confidential treatment has
been requested therefor. All such omitted material has been filed separately
with the SEC pursuant to Rule 24b-2.
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to the reporting of or extension or denial of credit, the collection of debt or
the repossession or disposition of Tools and Equipment). The foregoing indemnity
shall not apply in respect of liabilities, costs, claims or charges arising from
or related to (x) any action, sufferance or omission by SFS or its employees
that is negligent, willful or effected in bad faith, or (y) any breach or
violation by SFS of the provisions of this Agreement or any Law or regulation.
(b) SFS agrees to save, protect, indemnify and hold harmless Company
and its members, employees, officers, directors, agents and representatives from
and against all liabilities, costs (including attorneys fees and disbursements),
claims, demands, or causes of action arising from or relating to (i) any breach
by SFS of this Agreement; (ii) any violation of Law by SFS or any of its
employees or agents; or (iii) any actual or alleged trademark or copyright
infringement, or damages relating thereto, dealing with the use of the Licensed
Trademarks in the Licensed Territory as expressly authorized by this Agreement,
provided that (a) prompt written notice is given to SFS of any such suit or
claim, (b) SFS shall have the option and right to undertake and conduct the
defense of any such suits or claims brought against Company, and (c) no
settlement of any suit or claim is made or entered into without the prior
express written consent of SFS's authorized legal counsel.
5. Term. This Agreement shall become effective on the date hereof and,
subject to Section 6, shall remain in effect until, and shall automatically
terminate, unless renewed as provided below, on January 2, 2004. This Agreement
shall automatically be renewed and remain in effect for any Renewal Term of the
Operating Agreement.
6. Termination. (a) Subject to Section 6(b), this Agreement shall
terminate as follows: (i) upon termination or expiration of the Operating
Agreement; (ii) upon written consent of the Company and SFS; or (iii) upon the
Insolvency or dissolution of the Company. "Insolvency" means, with respect to
the Company (A) any case, action or proceeding with respect to the Company
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding up
or relief of debtors or (B) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangements
in respect of its creditors generally or any substantial portion of its
creditors; and in each case, undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
(b) Upon termination or expiration of this Agreement, the rights and
obligations of the parties set forth herein as they relate to completed
Financing and Ancillary Services will continue in full force and effect.
7. Confidentiality. Company shall not disclose, use or otherwise
communicate to any third party (other than Company's members, employees, agents
and participants with respect to this Agreement, in their capacity as such and
who have a specific "need to know" and who shall be bound by the provisions of
this Section 7) any information regarding either the terms and provisions of
this Agreement or any other confidential materials, trade secrets, and/or
proprietary information delivered to Company pursuant to the terms and
provisions of this Agreement except: (a) to the extent necessary to comply with
a
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specific applicable law or the valid final order of a court of competent
jurisdiction in which the party making the disclosure or communication shall
notify the other party in writing and shall seek confidential and proprietary
treatment of the information; (b) as part of normal reporting or review
procedure of Company's board of directors, parent company, members, auditors and
attorneys; provided, however, that persons or entities agree to be bound by the
provisions of this Section 7; (c) to enforce its rights legally under this
Agreement in a court of competent jurisdiction; (d) with respect to such
information as is part of the public domain through disclosure other than by
Company; (e) with respect to such information that is received from a third
party without restriction and without breach of this Agreement; or (f) as is
customary in connection with the sale, transfer, assignment, pledge, syndication
and/or securitization of Financed Contracts and Financings (and/or accounts
receivable or collateral in connection therewith). If, in connection with this
Agreement, Company requests from SFS information or materials that are of the
highest degree of confidentiality or secrecy, it is SFS's sole decision whether
to make such information or material available to Company, and if such is made
available, it shall only be pursuant to a separate non-disclosure and
confidentiality Agreement that SFS tenders to Company for signature and which
Company executes. It is expressly understood and agreed that Company's
obligations to keep records and to keep the Information confidential under
Article VII of the Program Rights Agreement shall continue after the
termination, for any reason, of this Agreement or any provision hereof.
8. Obligations Upon Termination. Except as provided in Section 6(b),
upon termination or expiration of this Agreement for any reason: (a) Company
shall immediately (i) cease all use of the Snap-on Dealer Credit Programs and
the Information; (ii) return to SFS all copies of the Snap-on Dealer Credit
Programs, Contracts, Credit, Collections and Operations Manual and all other
Information, including all copies of any documentation, notes and all other
materials relating to the foregoing; (iii) enter into good faith negotiations
with Snap-on to effect an orderly transition of the Snap-on Dealer Credit
Programs and the Financings and (iv) cease all use of the Licensed Trademarks;
and (b) all obligations of the parties hereto with respect to any future
Financings and Ancillary Services under the Program Rights Agreement will cease;
provided that the rights and obligations of the parties set forth in the Program
Rights Agreement as they relate to completed Financings and Ancillary Services
(including the obligations set forth in Article VII of the Program Rights
Agreement) will continue in full force and effect.
9. Dispute Resolution.
(a) In the event of any dispute, claim, question or disagreement
arising out of or relating to this Agreement the parties shall use reasonable
efforts to settle such dispute, claim, question or disagreement. To this effect,
they shall consult and negotiate with each other, in good faith, and,
recognizing their mutual interests, attempt to reach a just and equitable
solution satisfactory to both parties. If settlement is not otherwise possible
within a reasonable time (not to exceed 20 days or such longer period as the
parties hereto may agree in writing), the Chief Executive Officers, Chief
Financial Officers, or other comparable senior executive officers of Company and
SFS, respectively, shall become involved in such efforts.
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(b) If the parties do not reach a solution within a period of thirty
(30) days after a matter is referred for conciliation, as provided above, the
dispute shall be submitted to final and binding arbitration as the sole and
exclusive remedy for such dispute. Unless prohibited by applicable law, any
claim shall be made by filing a written demand for arbitration within one (1)
year following the conduct, act or other event or occurrence first giving rise
to the claim; otherwise, the right to any remedy shall be deemed forever waived
and lost. The right and duty of the parties to this Agreement to resolve any
disputes by arbitration shall be governed exclusively by the Federal Arbitration
Act, as amended, and arbitration shall take place according to the commercial
arbitration rules of the American Arbitration Association in effect as of the
date hereof. The arbitration shall be held at the office of the American
Arbitration Association in Chicago, Illinois. Each party will select one
arbitrator and the two so chosen will select a third, and failing selection of
an arbitrator by either party or by the two chosen by the parties, the
arbitrator(s) shall be selected from a panel of neutral arbitrators provided by
the American Arbitration Association and shall be chosen by the striking method.
The parties each shall bear all of their own costs of arbitration; however, the
fees of the arbitrators shall be divided equally between the parties. The
arbitrators shall have no authority to amend or modify the terms of this
Agreement. Each party further agrees that, unless such a limitation is
prohibited by applicable law, the other party shall not be liable for punitive
or exemplary damages and the arbitrators shall have no authority to award the
same. The award or decision by a majority of the arbitrators shall be final and
binding on the parties and may be enforced by judgment or order of any court
having subject matter jurisdiction in the state where the arbitration took place
(an "Arbitration State Court") or by any other court having jurisdiction over
the parties. The parties consent to the exercise of personal jurisdiction over
them by any Arbitration State Court and to the propriety of venue of any
Arbitration State Court for the purpose of carrying out this provision; and they
waive any objections that they would otherwise have to the same. No arbitration
under this Agreement shall include, by consolidation, joinder or in any other
manner, any Person other than the parties hereto or thereto and any Person in
privity with or claiming through, in the right of or on behalf of such a party,
unless both SFS and Company consent in writing. To the extent permitted by
applicable law, no issue of fact or law shall be given preclusive or collateral
estoppel effect in any arbitration hereunder, except to the extent such issue
may have been determined in another proceeding between SFS and Company or any
person in privity with or claiming through, in the right of or on behalf of SFS
or Company.
(c) Each party shall have the right to seek from an appropriate court
provisional remedies including, but not limited to, temporary restraining orders
or preliminary injunctions before, during or after arbitration. Neither party
need await the outcome of the arbitration before seeking provisional remedies.
Seeking any such remedies shall not be deemed to be a waiver of either party's
right to compel arbitration. Any such action shall be brought by the party in
the county (or similar political unit) or federal judicial district where SFS
resides, or where any property that may be subject of the action is located. The
parties consent to the exercise of personal jurisdiction over them by courts
located there and to the propriety of venue in such courts for the purpose of
carrying out this provision; they waive any objections that they would otherwise
have to the same; and they waive the right to have any such action decided by a
jury.
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10. Other Terms.
(a) All notices, requests, consents, or other communications provided
for in or to be given under this Agreement shall be in writing, may be delivered
in person, by overnight air courier or by mail, return receipt requested, and
shall be deemed to have been duly given and to have become effective (i) upon
receipt, if delivered in person, (ii) one day after having been delivered to an
overnight air courier, or (iii) three days after having been deposited in the
mails as certified or registered matter, all fees prepaid, directed to the
parties or their assignees at the following addresses: If to Company to Snap-on
Credit LLC, 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxxx, 00000-0000, Attention: General
Manager and CFO. If to SFS: to Snap-on Financial Services, Inc., 0000 00xx
Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Chief Financial Officer and General
Counsel (or at such other address as shall be given in writing by a party
hereto).
(b) This Agreement and, except as otherwise expressly provided herein,
any exhibit attached hereto may be amended only by an agreement in writing
signed by both parties. No waiver of any provision nor consent to any exception
to the terms of this Agreement shall be effective unless in writing and signed
by the party to be bound and then only as to the specific purpose, extent and
instance so provided.
(c) Except as otherwise provided in this Agreement, every covenant,
term and provision of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors,
permitted transferees and permitted assigns. Except as provided in Section 4,
this Agreement is not for the benefit of any other person, and no other person
shall have any rights against the parties hereunder.
(d) Section headings are for descriptive purposes only and shall not
control or alter the meaning of this Agreement as set forth in the text. When
the context in which words are used in this Agreement indicates that such is the
intent, words in the singular shall include the plural, and vice versa, and
pronouns in the masculine shall include the feminine and neuter, and vice versa.
Additionally, all defined phrases, pronouns, and other variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular, or plural, as
the actual identity of the organization, person, or persons may require. No
provision of this Agreement shall be construed against any party hereto by
reason of the extent to which such party or its counsel participated in the
drafting hereof.
(e) Every provision of this Agreement is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement.
(f) Except as set forth below, neither this Agreement nor any rights
or obligations hereunder shall be assignable, or otherwise transferable by
Company, in whole or in part. The parties contemplate that certain of the
Finance Contracts and Financings will be purchased by Newcourt (the "Purchased
Contracts") and that some or all of the Purchased Contracts will be securitized
by Newcourt. Therefore, the parties acknowledge and agree that, notwithstanding
any other provisions of this Agreement to the contrary, Company's rights
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under this Agreement with respect to Purchased Contracts may be assigned to
Newcourt and Newcourt's successors and assigns.
(g) SFS and Company agree to perform all further acts and execute,
acknowledge and deliver any documents that may be reasonably necessary,
appropriate or desirable to carry out the provisions of this Agreement.
(h) The laws of the State of Wisconsin shall govern the validity of
this Agreement, the construction of its terms and the interpretation of the
rights and duties of the parties.
(i) This Agreement may be executed in any number of counterparts with
the same effect as if all parties have signed the same document. All
counterparts shall be construed together and shall constitute one agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually-executed signature page
hereto.
(j) Company is an independent contractor of SFS and nothing in this
Agreement shall be construed to create or constitute a partnership, joint
venture or any other agency or employment relationship between the parties
hereto. Neither party is authorized to enter into any agreement on behalf of,
assume any obligation for, or otherwise bind the other party financially or
otherwise; nor is either party responsible for the obligations of the other
party, including but not limited to obligations to the other's own employees,
their wage/salaries, benefits, vacation pay and the like.
(k) The termination of this Agreement by either party shall not be
deemed to constitute an election of remedies, and the fact of such termination
shall not preclude or prejudice the pursuit of any and all other remedies in
addition thereto, either at law or in equity, including suits brought by the
party terminating this Agreement to recover damages and sums due hereunder.
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IN WITNESS WHEREOF, the parties have entered this Agreement as of the
day and year first above written.
SNAP-ON FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxx X. Montomuro
Name
Title: President
SNAP-ON CREDIT LLC
By: /s/ Xxx X. Xxxxxx
Name
Title: General Manager
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LICENSE AND ROYALTY AGREEMENT
DESCRIPTION OF ATTACHMENTS+
Exhibits:
Exhibit A Licensed Trademarks
Exhibit B Credit Incentive Management Fees
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+ The exhibits to this document are not being filed herewith. The
registrant agrees to furnish supplementally a copy of any such schedule or
exhibit to the Securities and Exchange Commission upon request.
