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Exhibit 10(h)
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (this "Agreement") is made as of the
____ day of ______________, 1997, between Kennametal Inc., a Pennsylvania
corporation ("Kennametal"), and JLK Direct Distribution Inc., a Pennsylvania
corporation ("JLK").
RECITALS
A. Kennametal owns all of the issued and outstanding Class B
Common Stock, par value $.01 per share, of JLK, and JLK is a
member of Kennametal's "affiliated group" of corporations for
federal income tax purposes.
B. JLK is effecting an initial public offering (the "Offering")
of shares of Class A Common Stock, par value $.01 per share,
of JLK.
C. Upon completion of the Offering, JLK will cease to be a
wholly-owned subsidiary of Kennametal.
D. Kennametal owns the Kennametal Trademarks (as defined herein)
and JLK owns the JLK Trademarks (as defined herein).
E. In connection with the consummation of the Offering, JLK
desires to license from Kennametal and Kennametal is willing
to grant to JLK and its Affiliates a nonexclusive license to
use the Kennametal Trademarks, on the terms and provisions
contained herein. Kennametal desires to license from JLK and
JLK is willing to grant to Kennametal and its Affiliates a
nonexclusive license to use the JLK Trademarks, on the terms
and provisions contained herein, on the terms and provisions
contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of their
mutual promises and obligations herein contained, and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, in addition to the terms
defined in the Preamble and the Recitals, the following terms shall have the
following meanings, applicable to both the singular and plural forms of the
terms described:
"AFFILIATE" means with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person. A person is regarded in control of another person if its
owns, or directly or indirectly controls, at least 50% of the voting stock or
other ownership interest of the other person, or if it directly or indirectly
possesses the power to direct or cause the direction of the management and
policies of the other person by any means whatsoever; provided, however, that
for the purposes of this Agreement, JLK and its subsidiaries shall not be
Affiliates of Kennametal, and Kennametal and its subsidiaries (other than JLK
and its subsidiaries) shall not be Affiliates of JLK.
"EFFECTIVE DATE" means the date of this Agreement.
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"INTERCOMPANY AGREEMENTS" means collectively, (i) those certain
agreements by and between Kennametal and JLK with respect to administrative
services, product supply, tax-sharing, indemnification, intercompany
debt/investment, non-competition and corporate opportunities, cash management
and corporate matters; and (ii) those certain agreements by and between
Kennametal and J&L America, Inc. with respect to leasing, shared facilities and
warehousing.
"JLK PRODUCTS" means the products and services then provided by JLK
and its Affiliates, as modified from time to time.
"JLK TRADEMARKS" means the trademarks, service marks, trade names and
other intellectual property of JLK identified on Schedule B.
"KENNAMETAL PRODUCTS" means the products and services then provided by
Kennametal and its Affiliates, as modified from time to time.
"KENNAMETAL TRADEMARKS" means the trademarks, service marks, trade
names and other intellectual property of Kennametal identified on Schedule A.
"LICENSEE" means, as the case may be, Kennametal in its capacity as
licensee of the JLK Trademarks hereunder, and JLK in its capacity as licensee
of the Kennametal Trademarks hereunder.
"LICENSOR" means, as the case may be, Kennametal in its capacity as
licensor of the Kennametal Trademarks hereunder, and JLK in its capacity as
licensor of the JLK Trademarks hereunder.
"LICENSOR'S TRADEMARKS" means the Kennametal Trademarks, in the case
of Kennametal, and the JLK Trademarks, in the case of JLK.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
reference to the parties shall mean the parties to this Agreement.
ARTICLE 2
GRANTS OF TRADEMARK LICENSES
2.1 KENNAMETAL GRANT OF LICENSE.
(a) Kennametal grants to JLK and its Affiliates the worldwide,
nonexclusive right and license to use the Kennametal Trademarks
in the marketing, promotion, sale and provision of Kennametal
Products.
(b) The Kennametal Trademarks are initially as established by
Kennametal as of the Effective Date and may be modified from time
to time by Kennametal in its sole discretion and reflected on a
revised Schedule A.
2.2 JLK GRANT OF LICENSE.
(a) JLK grants to Kennametal and its Affiliates the worldwide,
nonexclusive right and license to use the JLK Trademarks in the
marketing, promotion, sale and provision of JLK Products.
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(b) The JLK Trademarks are initially as established by JLK as of the
Effective Date and may be modified from time to time by JLK in
its sole discretion and reflected on a revised Schedule B.
2.3 FEES. In consideration of the rights and licenses granted under
Sections 2.1 and 2.2, each Licensee shall pay to each Licensor royalty fees as
set forth on Schedule C. The net consideration paid by the parties hereto take
into account the benefits and value that Kennametal and JLK each derive from
the Related Agreements. Such royalty fees shall be due on a quarterly
calendar-year basis and shall be payable no later than one month after the
close of the prior quarter (i.e., April 30, July 31, October 31, and January
31). Each royalty payment shall be accompanied by a report setting forth the
number of products sold bearing the respective trademark. Failure to timely
make a royalty payment shall be deemed a material breach of this Agreement and
shall be subject to the remedies provided herein. Each Licensee shall maintain
adequate records of products sold pursuant to this License Agreement, said
records being subject to an annual inspection by the respective Licensor, at
that Licensor's discretion.
2.4 RESTRICTIONS ON SUBLICENSES.
(a) The right and license granted to JLK and its Affiliates under
Section 2.1 shall not include the right to grant sublicenses to
any third party, except with the prior written consent of
Kennametal. Any sublicense consented to by Kennametal shall be at
least as restrictive as this Agreement and shall allow and enable
JLK to ensure compliance with all of the terms and conditions of
this Agreement. JLK or the relevant Affiliate shall guarantee the
full performance and compliance of any such sublicensee with all
of the terms and conditions of this Agreement.
(b) The right and license granted to Kennametal and its Affiliates
under Section 2.2 shall not include the right to grant
sublicenses to any third party, except with the prior written
consent of JLK. Any sublicense consented to by JLK shall be at
least as restrictive as this Agreement and shall allow and enable
Kennametal to ensure compliance with all of the terms and
conditions of this Agreement. Kennametal or the relevant
Affiliate shall guarantee the full performance and compliance of
any such sublicensee with all of the terms and conditions of this
Agreement.
2.5 USE.
(a) JLK undertakes and agrees to use the Kennametal Trademarks only
in the manner currently used or otherwise approved by Kennametal
and only in connection with the marketing, promotion, sale and
provision of Kennametal Products, in strict compliance with
Section 2.1. The quality of all Kennametal Products offered or
sold by JLK and its Affiliates under the Kennametal Trademarks
shall be no less than the quality of Kennametal Products sold by
Kennametal and shall otherwise conform to the standards set by
Kennametal. Kennametal shall have the right at all reasonable
times and upon reasonable written notice provided to JLK by
Kennametal to inspect the Kennametal Products which bear, embody
and utilize the Kennametal Trademarks and to monitor such
Kennametal Products to determine whether they are of acceptable
quality. Failure by JLK to maintain acceptable quality shall be
deemed a material breach of this Agreement and shall afford
Kennametal the right to utilize any remedies provided herein. JLK
shall not use the Kennametal Trademarks in a manner that is
likely to cause confusion, mistake or deception as to the source,
origin, association, affiliation, sponsorship or endorsement
between Kennametal and JLK as separate companies, or their
respective products or services.
(b) Kennametal undertakes and agrees to use the JLK Trademarks only
in the manner currently used or otherwise approved by JLK and
only in connection with the marketing, promotion, sale and
provision of JLK Products, in strict compliance with Section 2.2.
The quality of all JLK
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Products offered or sold by Kennametal under the JLK Trademarks
shall be no less than the quality of JLK Products sold by JLK and
shall otherwise conform to the standards set by JLK. JLK shall
have the right at all reasonable times and upon reasonable
written notice provided to Kennametal by JLK to inspect the JLK
Products which bear, embody and utilize the JLK Trademarks and to
monitor such JLK Products to determine whether they are of
acceptable quality. Failure by Kennametal to maintain acceptable
quality shall be deemed a material breach of this Agreement and
shall afford JLK the right to utilize any remedies provided
herein. Kennametal shall not use the JLK Trademarks in a manner
that is likely to cause confusion, mistake or deception as to the
source, origin, association, affiliation, sponsorship or
endorsement between JLK and Kennametal as separate companies, or
their respective products or services.
2.6 INDEMNIFICATION BY LICENSEES. Each Licensee shall hold harmless
and indemnify each Licensor and its Affiliates and their respective officers,
directors, employees, agents, representatives and attorneys-in-fact from and
against any claims or liabilities which may arise in connection with the
unauthorized use of the Licensor's Trademarks by such Licensee or its
Affiliates.
2.7 INDEMNIFICATION BY LICENSORS. Each Licensor shall hold harmless
and indemnify each Licensee and its Affiliates and their respective officers,
directors, employees, agents, representatives and attorneys-in-fact from and
against any claims or liabilities which may arise in connection with the
authorized use of the Licensee's Trademarks by such Licensor or its Affiliates.
ARTICLE 3
PROTECTION OF TRADEMARKS
3.1 NO REGISTRATION. Each Licensee acknowledges and agrees that
ownership of the Licensor's Trademarks is retained by the Licensor and such
Licensee will not make any filings to register any of the Licensor's Trademarks
in any jurisdiction. Any and all such registrations shall be made by the
Licensor in its sole discretion. Each Licensee agrees not to contest the
respective Licensor's ownership of any trademark or registration therefor.
3.2 MAINTENANCE. Each Licensor shall use its best efforts to maintain
the validity of its trademarks and any registrations therefor.
3.3 COMPLIANCE WITH LAW. Each Licensee shall comply with all laws and
governmental regulations pertaining to the proper use and designation of the
Licensor's Trademarks in the various countries where the Licensor's Trademarks
are used, including, without limitation, the execution of any registered users
agreements, if necessary, and the use of all appropriate notices and legends.
3.4 VALIDITY. Each Licensee agrees not to contest the validity of the
Licensor's Trademarks and agrees that any and all rights and goodwill that
might be acquired by the use of the Licensor's Trademarks by such Licensee
shall inure to the sole benefit of the Licensor. Each Licensee agrees to fully
cooperate as requested with the Licensor in registering and maintaining the
Licensor's Trademarks and recording this Agreement, all at the Licensor's
expense.
3.5 NO SIMILAR REGISTRATIONS. Each Licensee agrees not to use or
register in any country any trademarks identical to, resembling, or confusingly
similar to the Licensor's Trademarks during the term of this Agreement and
thereafter. Whenever the attention of a Licensee is called by a Licensor to any
such uses or
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registrations, such Licensee agrees to take appropriate steps immediately to
resolve any issues of confusion by avoiding the use of such trademarks or other
suitable remedy approved by the respective Licensor.
3.6 INFRINGEMENT. Each Licensee shall give the Licensor notice of any
known or presumed infringements of the Licensor's Trademarks, and such Licensee
shall give the Licensor full cooperation in the protection of the Licensor's
Trademarks. Such Licensor shall have the right to determine the appropriate
course of action to be taken to enforce the Licensor's Trademarks or otherwise
xxxxx the infringement, to take or refrain from taking any appropriate action
to enforce the Licensor's Trademarks, to control any litigation or other
enforcement action and to enter into or permit the settlement of any such
litigation or other enforcement action with respect to the Licensor's
Trademarks. If the Licensor decides to enforce the Licensor's Trademarks
against an infringer, all costs incurred and all recoveries made shall be for
the account of the Licensor, unless otherwise agreed to in a separate writing
between the parties. The Licensor shall have the right to name the Licensee as
a party in any litigation involving any such enforcement of rights, provided
the Licensor agrees to indemnify the Licensee for any damages awarded to any
third party as a result of the enforcement of such rights.
ARTICLE 4
TERM AND TERMINATION
4.1 TERM. The term of this Agreement shall commence on the Effective
Date and shall continue for ten (10) years thereafter, unless terminated
earlier pursuant to Section 4.2 or extended by the mutual agreement of the
parties.
4.2 TERMINATION. (i) Either party shall have the right to terminate
this Agreement upon the occurrence of any of the following events:
(a) A material breach of this Agreement by either party or any of
their Affiliates that is not cured within thirty (30) days after
receipt of written notice of such breach from the other party;
(b) A material breach of any of the Intercompany Agreements which is
not cured within thirty (30) days after receipt of written notice
from the other party; or
(ii) Kennametal shall have the right to terminate this Agreement if
Kennametal or its affiliates own shares representing less than a majority of
the voting power of the outstanding common stock of JLK.
4.3 RIGHTS ON TERMINATION. Upon the termination of this Agreement,
neither Licensee shall have any further right or license to use the Licensor's
Trademarks and each Licensee shall promptly, within 10 days, discontinue all
further use of the Licensor's Trademarks in the marketing, promotion, sale or
provision of Kennametal Products or JLK Products. Termination of this Agreement
for any reason shall not terminate the obligations described in Sections 2.6
which shall survive any such termination.
ARTICLE 5
RESOLUTION OF DISPUTES
5.1 ARBITRATION. Any dispute, controversy or claim between Kennametal
and JLK arising out of or relating to this Agreement, the Kennametal
Trademarks, the JLK Trademarks, the licenses or any agreements or instruments
relating hereto or delivered in connection herewith, will be resolved by
arbitration conducted in Pittsburgh, Pennsylvania under the auspices and
according to the Commercial Arbitration Rules of the American
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Arbitration Association. The arbitration shall be conducted in accordance with
the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement.
ARTICLE 6
MISCELLANEOUS PROVISIONS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Pennsylvania without regard to principles of
conflicts of laws of any jurisdiction.
6.2 NOTICES. Any notice permitted or required by this Agreement shall
be deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
IF TO KENNAMETAL: Kennametal Inc.
Xxxxx Xxxxx 000 Xxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000
Attn:
Fax No.:
IF TO JLK: JLK Direct Distribution Inc.
Xxxxx Xxxxx 000 Xxxxx
X. X. Xxx 000
Xxxxxxx, XX 00000
Attn:
Fax No.:
6.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument.
6.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, superseding all prior oral
and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties.
6.5 CAPTIONS. The captions used herein are for illustrative purposes
only and shall not be deemed a part of this Agreement.
6.6 SEVERABILITY. If for any reason any clause of this Agreement is
found to be invalid, such findings shall not invalidate any other provision of
this Agreement.
6.7 AMENDMENTS. This Agreement may be changed, amended, modified, or
rescinded only by an instrument in writing signed by the party against which
enforcement of such change, amendment, modification or rescission is sought.
6.8 WAIVERS. No waiver by any party of any condition, or breach of
any provision of this Agreement, in any one or more instances, shall be deemed
to be or construed as a waiver of any other condition or of the breach of any
other provision of this Agreement.
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6.9 RELATIONSHIP. Nothing in this Agreement shall be deemed to create
a partnership, joint venture or agency relationship between the parties. Both
parties are independent contractors and neither party is to be considered the
agent or legal representative of the other for any purpose whatsoever.
6.10 ASSIGNS. This Agreement shall bind and inure to the benefit of
the parties and their respective successors and assigns, except that no
obligation under this Agreement may be delegated, nor may this Agreement be
assigned by either party, without the prior written consent of the other party,
except as provided in Section 2.4. Any such purported assignment of this
Agreement by either party without the prior written consent of the other party
shall be void and without effect.
6.11 THIRD PARTY BENEFICIARIES. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than
the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
KENNAMETAL INC. JLK DIRECT DISTRIBUTION INC.
By ____________________________________ By ________________________________
Name __________________________________ Name ______________________________
Title _________________________________ Title _____________________________
