Exhibit 10
LICENSE AGREEMENT
This LICENSE AGREEMENT, dated as of December 2, 2002, is made by AGWAY,
INC.. a Delaware corporation ("Agway" or "Licensor"), and GROWMARK, INC., a
Delaware corporation, with offices located at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000, together with its subsidiaries and affiliates ("Licensee")
(hereinafter "License Agreement").
WHEREAS, Agway and Licensee have entered into an Asset Purchase
Agreement dated September 27, 2002 ("APA"), pursuant to which Agway proposes to
sell to Licensee Agway's Agronomy and Seedway businesses with certain exceptions
as set forth in the APA (hereafter referred to as the "Business"); and
WHEREAS, the APA provides for Agway to license to Licensee the limited
use of the AGWAY trademark set forth on Schedule A attached to and incorporated
into this Agreement (the "Xxxx") in accordance with the terms of this License
Agreement;
NOW, THEREFORE, Agway and Licensee enter into this License Agreement
for and in consideration of the mutual covenants and agreements set forth in the
APA.
I. Definitions.
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1.1 "Effective Date" shall be the date Agway conveys the Business
to Licensee.
1.2 "Trade Area" shall mean the states of Delaware, Florida.
Maryland. Maine, New Jersey, New York, Ohio, Pennsylvania, Virginia, Vermont,
West Virginia, New Hampshire, Massachusetts, Connecticut, and the Canadian
Provinces of Ontario, Quebec and New Brunswick.
1.3 Any capitalized terms not defined herein shall have the meaning
ascribed to them in the APA.
2. License and Term. Subject to the terms of this License
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Agreement, Agway hereby grants to Licensee a non-exclusive, non-transferable,
non-sublicenseable, royalty-free right and license, for the term of five (5)
years from the Effective Date (the "Term"), to use the Xxxx solely in connection
with the advertising, marketing, sale and distribution of the products set forth
below in Section 2B-C of this License Agreement (the "Products"), including the
right to use the Xxxx on product packaging, in advertising, sales brochures,
point-of-sale materials and displays for the Products, subject to the following
specific conditions, limitations, and restrictions:
A. Licensee shall use the Xxxx only within the Trade Area.
Licensee may use the Xxxx on the Internet to advertise, market, distribute and
sell the Products to customers in the Trade Area, but shall not be allowed to
use the Xxxx on the Internet in connection with the advertising, marketing, sale
or distribution of Products outside of the Trade Area.
B. Subject to the limitation as to special mix turf seed and
commercial turf seed in Section 2D below, Licensee may use the Xxxx in the sale
and distribution of commercial agricultural fertilizer (including, without
limitation, commercial turf fertilizer), commercial agricultural seed
(including, without limitation, commercial vegetable seed), and commercial
agricultural pesticides. Except as provided in Xxxxxxx 0X xxxxx, Licensee is not
licensed to use the Xxxx in the sale or distribution of fertilizer (other than
turf fertilizer), agricultural seed and/or agricultural pesticides to consumer
dealers.
C. Subject to the limitation as to special mix turf seed and
commercial turf seed in Section 2D below, Licensee may use the Xxxx in
connection with the sale or distribution of consumer vegetable seed only in
sales to Southern States Cooperative, Inc. ("Southern States") for as long as
Southern States satisfies the conditions set forth in Section 14.8(b) and
14.8(c) (the "Conditions") of the Asset Purchase Agreement, dated June 20, 2000,
as amended, between Agway and Southern States (the "SS APA"). In the event that
Southern States fails to meet the Conditions, Licensee shall be licensed to use
the Xxxx for the sale and distribution of vegetable seed in the Trade Area,
subject to all other terms and conditions of this License Agreement.
D. Licensee is prohibited from using the Xxxx in the sale or
distribution of any other products including but not limited to, special mix
turf seed and commercial turf seed.
This License Agreement and all rights to use the Xxxx granted
to Licensee pursuant to this License Agreement are subject to the rights granted
to Southern States under the SS APA which is attached as Schedule B, and hereby
incorporated into this License Agreement. Licensee shall not be permitted to use
the Xxxx in any manner that would breach Agway's obligations under the SS APA.
Agway retains all rights in the Xxxx not specifically granted
to Licensee pursuant to this License Agreement. Any and all goodwill arising
from Licensee's use of the Xxxx shall inure to the sole benefit of Agway.
3. Conditions of License.
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3.1 Quality Control and Right to Approve Use of the Xxxx.
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Licensee shall be responsible for and shall ensure that all goods provided and
offered by Licensee under the Xxxx shall be of the same high level of quality
which Licensee has offered in the past and shall be advertised, offered and
provided in a high quality manner suited to the protection and enhancement of
the Xxxx and the goodwill associated therewith, and shall meet (i) Agway's
commercially reasonable quality standards and inspection and approval
requirements for use of the Xxxx, as they may be amended by Agway in writing
from time to time as part of Agway's trademark quality assurance activities and
promptly communicated to Licensee; and (ii) any and
all government standards, regulations, guidelines, rules, laws, or the like
regarding such goods and/or services. Licensee shall reasonably cooperate with
Agway in facilitating Agway's determination from time to time whether the Xxxx
is being used and the Products are being marketed in accordance with this
Agreement by supplying Agway with specimens of uses of the Xxxx upon Agway's
reasonable request. Licensee shall, upon Agway's reasonable request, submit to
Agway for inspection current production samples, advertising, tags, shipping
materials, packaging, and labels of the goods and pictures and advertising of
the goods used with the Xxxx. Licensee shall be responsible for monitoring its
manufacturers to assure compliance with the provisions set forth in this
Section. Licensee shall promptly notify Agway upon learning of a material
failure by a manufacturer to comply with the provisions set forth in this
Section and shall take all corrective actions as may be reasonably necessary to
prevent the failure from recurring; and, in Agway's reasonable discretion,
Licensee shall terminate the manufacturer if such party intentionally or
repeatedly fails to comply with the provisions set forth in this Section.
3.2 Acceptable Use; No Alteration. Licensee shall not use the
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Xxxx in any manner derogatory to Agway or otherwise unacceptable to Agway in its
reasonable discretion. Licensee shall not alter the Xxxx in any way without
first obtaining Agway's express written consent to the alteration.
3.3 Notice of Infringement. Licensee shall immediately
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notify Agway in the event that Licensee becomes aware of any actual or suspected
infringing use of the Xxxx, even if the infringer is a person, organization, or
entity associated or affiliated with Licensee.
4. Termination. The term of this License Agreement shall be five
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(5)years from the Effective Date. Should Licensee fail to comply with any
provision of this License Agreement, Agway may terminate this License Agreement
upon 30 days' written notice to Licensee, provided Licensee has not corrected
such default during the notice period.
5. Ownership of the Xxxx. Agway hereby represents and warrants
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that, in the Trade Area and subject to the rights of Southern States, (i) it is
the owner of all right, title and interest in and to the Xxxx and has the right
to license the Xxxx to Licensee in accordance with the terms of this License
Agreement without violating any third party trademark or service xxxx right;
-and (ii) to the best of its knowledge, the Xxxx does not infringe upon, dilute
or violate any third party trademark or service xxxx right. Licensee hereby
acknowledges Agway's representation that it owns all right, title, interest and
goodwill in and to the Xxxx. Licensee represents and warrants that it will not
at any time do or cause to be done any act or thing contesting or in any way
impairing or tending to impair any part of such right, title, interest and
goodwill. In connection with use of the Xxxx, Licensee will not affirmatively
represent that it has any ownership in the Xxxx, and Licensee acknowledges that
its use of the Xxxx will not create in Licensee's favor any right, title,
interest or goodwill in or to the Xxxx. Upon termination or expiration of this
License Agreement in any manner provided herein, Licensee will cease and desist
from all use of the Xxxx unless otherwise agreed to by Licensor and Licensee and
will at no time adopt or use, without Agway's prior written consent, any word or
xxxx which is confusingly similar to the Xxxx Licensee also agrees it will not
assign this License Agreement, by operation of law or otherwise. Agway may
assign its rights under this License Agreement however.
6. Maintenance of Registrations for the Xxxx. Agway, at its sole
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expense, agrees to take all necessary and appropriate actions to maintain any
registrations for the Xxxx for so long as (i) Licensee makes use of the Xxxx and
(ii) this License Agreement remains in effect with respect to such Xxxx. Nothing
contained in this section shall be construed as a representation that there are
any registrations for the Xxxx as used in connection with the Products.
7. Protection of Xxxx. Licensee shall comply with all laws
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applicable to trademarks in the Trade Area. Licensee shall also include all
notices, symbols and legends with respect to the Xxxx as may be reasonably
requested by Agway, or that are or may be required by any laws within the Trade
Area.
8. Indemnity.
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8.1 Except as set forth in Section 8.2 below, Agway assumes no
liability to Licensee or to third parties with respect to the performance
characteristics of products manufactured by or for Licensee or distributed or
sold by Licensee under the Xxxx or arising out of any unauthorized use hereunder
of the Xxxx by Licensee and/or third party manufacturers retained by Licensee.
Licensee hereby agrees to indemnify, defend, and hold harmless Agway against any
and all claims, suits, losses, damages and expenses, including attorneys' fees
and expenses, arising out of or based upon the manufacture, distribution or sale
of such products by Licensee or its third-party manufacturers who manufacture
such products for Licensee, or arising out of or based upon any unauthorized use
hereunder of the Xxxx by Licensee and/or third party manufacturers retained by
Licensee.
8.2 Agway hereby agrees to indemnify, defend, and hold
harmless Licensee against any and all claims, suits, losses, damages and
expenses, including attorneys' fees and expenses to the extent that such claim,
suit, loss, damage and expense arises out of or is based upon alleged
infringement or dilution of any third party trade xxxx or service xxxx right as
a result of any use of the Xxxx by Licensee and/or third party manufacturers
retained by Licensee hereunder, provided Licensee's use is authorized pursuant
to this License Agreement.
8.3 Licensee shall, during the Term of this License and on an
occurrence basis, maintain commercial general liability insurance, including
contractual and products liability insurance, with coverage written on the
occurrence form, with an insurance company with a Best's rating of A- or better,
or otherwise reasonably acceptable to Agway, naming Agway as an additional
insured thereunder with limits not less than Ten Million Dollars ($ 10,000,000),
combined single limit per occurrence, covering the products manufactured by or
for Licensee or distributed or sold by Licensee under the Xxxx, the manufacture,
distribution and sale of such products by or for Licensee and its third-party
manufacturers who manufacture such products for Licensee, and all other
activities of Licensee in connection with which the Xxxx is used, and providing
that Agway shall receive thirty (30) days written notice prior to termination,
reduction, or modification of the coverage. Any termination, reduction, or
modification of such coverage shall be deemed a default of the provisions of
this License Agreement by Licensee. Attached as Schedule C is a copy of
Licensee's Certificate of Insurance evidencing such coverage.
8.4 The provisions of this Section 8 shall survive expiration
or termination of this License Agreement for any reason.
9. Governing Law. This License Agreement shall be governed by
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the internal laws of the State of Delaware, without regard to its conflicts of
laws provisions.
10. Counterparts. This License Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original.
11. Notices. All notices, requests, demands and other
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communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or mailed, first class
certified mail with postage paid or by overnight receipted courier service or by
facsimile (with proof of receipt):
(i) If to Agway, to:
Agway, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx,
Executive Vice President
Agriculture and Energy
Facsimile: (000) 000-0000
or to such other person or address as Agway shall furnish by notice to Licensee
in writing.
(ii) If to Licensee, to:
GROWMARK, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attn: R. Xxxxxxx Xxxx, Esq.
General Counsel
or to such other person or address as Licensee shall furnish by notice to Agway
in writing.
12. Modification. No change in or modification of this License
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Agreement shall be valid or binding on the parties hereto, nor shall any waiver
of any term or condition be deemed a waiver of such term or condition in the
future, unless such change, modification or waiver shall be in writing and
signed by the parties hereto.
13. Successors and Assigns. Except as provided to the contrary
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herein, all the provisions hereof shall bind and inure to the benefit of the
parties hereto and their successors and permitted assigns.
14. Severability. In the event any provision or portion of this
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License Agreement shall be declared invalid by any court of competent
jurisdiction, said declaration shall have no effect upon the remaining
provisions of this License Agreement.
15. Entire Agreement. This License Agreement sets forth the
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entire agreement and understanding of the parties relating to the subject matter
herein, and supersedes all prior discussion, whether oral or written, between
them.
16. No Partnership or Joint Venture. Nothing in this License
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Agreement or in the course of performance under this License Agreement shall be
construed to constitute a partnership, agency, or joint venture between Licensor
and Licensee. Neither party shall have any right to obligate or bind the other
party in any manner whatsoever and nothing contained herein, or in the course of
performance hereunder, shall give or is intended to give any right of any kind
to any third party other than those specifically granted hereunder.
IN WITNESS WHEREOF, the undersigned has caused this License Agreement
to be executed as of the date first appearing above.
AGWAY, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
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Title: Executive Vice President
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Agriculture and Energy
GROWMARK, INC.
By /s/ Xxxxx Xxxxxxxx
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Name Xxxxx Xxxxxxxx
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Title Vice President
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