LICENSE AGREEMENT
This Agreement is entered into by and between CFH TRADE-NAMES, L.P., a Texas
limited partnership ("LICENSOR"), a Texas Limited Partnership, and Xxxxxxxx Xxxx
Company, a Delaware corporation ("LICENSEE"), and is effective as of the ____
day of November, 1997.
RECITALS
WHEREAS, Licensor is the owner of the Trademarks, including all designs,
logos and artwork connected therewith, as described more fully herein, and
desires to license exclusively and in perpetuity, subject to certain
exclusions, the Trademarks including such designs, logos and artwork to
Licensee on the terms and conditions set forth herein;
WHEREAS, Licensee wishes to use the Trademarks upon and in connection with
the providing of various services as more fully specified herein;
WHEREAS, the Trademarks constitute valuable rights owned and used by the
Licensor in conducting its business and designating the origin or sponsorship of
the various services provided by Licensor;
WHEREAS, Licensor desires to protect the integrity of the Trademarks, and to
preserve its rights to the Trademarks so as to avoid consumer confusion and to
facilitate differentiation of its trademarked services from those of its
competitors; and
WHEREAS, Licensee and Licensor agree that certain restrictions on
Licensee's use of the licensed Trademarks are necessary to ensure that
Licensor's Trademarks as well as certain related trademarks of Licensor not
licensed to Licensee hereunder are not diluted nor subjected to disrepute in
the course of Licensee's use of the licensed Trademarks, and that Licensor's
rights in the Trademarks and ownership of the Trademarks are preserved.
NOW, THEREFORE, in consideration of the above and for other good and
valuable consideration, the sufficiency of such is herein acknowledged, the
parties agree as follows:
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AGREEMENT
1. DEFINITIONS
"AFFILIATED ENTITY" or any grammatical variations thereof shall mean any
corporation or other entity in which a party has an ownership interest of at
least eighty percent (80%) or as to which the party's relationship is such that
the party directly or indirectly Controls the person, corporation or other
entity or is Controlled by the same person, corporation or entity that controls
a party.
"CONTROL" or any grammatical variations thereof shall mean either the
ownership, directly or indirectly, of more than 50% of the voting securities
of a corporation or other entity or the power to direct the management or
policies of such corporation or other entity whether by operation of law, by
contract, or otherwise.
"INITIAL PUBLIC OFFERING" means the initial public offering of shares of
common stock by Licensee.
"PERMITTED ASSIGNEE" means (i) as to Licensee, an Affiliated Entity or any
person, partnership, corporation, or other entity which may acquire all or
substantially all of Licensee's assets or business or with or into which
Licensee may be liquidated, consolidated, merged or otherwise combined; (ii) as
to Licensor, any constituent member of Crow Family (as defined in EXHIBIT D) or
any person, partnership, corporation, or other entity which is or becomes an
Affiliated Entity or which may acquire all or not less than 67% of the net
equity value of the Commercial Real Estate Business (as defined in EXHIBIT D) of
the Crow Family, and (iii) as to either Licensor or Licensee, any person,
partnership, corporation or other entity if written consent to the assignment of
its rights has been given by Licensor.
"RESTRICTIONS" means those limitations and restrictions imposed on
Licensor's use of the Trademarks and certain trademarks not licensed to
Licensee hereunder as specifically specified in EXHIBIT D attached hereto.
"ROYALTY AGREEMENT" means the Royalty Agreement entered into between Xx.
Xxxxxxxx Xxxx and Xxxxxxxx Xxxx Company, a Texas corporation ("Texas TCC"), on
January 1, 1991, as ultimately assigned to Licensor, together with any and all
consents and waivers granted in connection therewith.
"SERVICES" means the various goods, services and products specified in
EXHIBIT B, attached hereto.
"STANDARDS AND QUALITY" shall mean the quality and performance of the
Services, as specified in EXHIBIT C, attached hereto.
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"TRADEMARKS" mean trademarks, trade names, service marks and designs,
logos, and artwork specified in EXHIBIT A, attached hereto.
2. GRANT OF LICENSE AND CONSIDERATION
2.1 Licensor grants to Licensee, subject to the terms and conditions
herein set forth the exclusive, perpetual, royalty-free right and license to
use worldwide and without any territorial limitations the Trademarks, by
reproduction or other means, in connection with the providing of the Services.
All rights not expressly granted to Licensee hereunder with respect to the
Trademarks and all other trademarks owned by Licensor are reserved to Licensor.
2.2 Licensee acknowledges that the rights granted to and obligations
assumed by Texas TCC under the Royalty Agreement have terminated effective
with the date of this Agreement and that certain entities, as more fully set
forth in EXHIBIT D, have been authorized and will continue to be authorized to
use names incorporating "Crow" or "Xxxxxxxx Xxxx" or variations thereon
subject to the Restrictions contained in EXHIBIT D. Except as expressly
permitted pursuant to the Restrictions, after September 1, 1997, Licensor has
not and will not license or otherwise authorize any entity to utilize any of
the Trademarks or any other names raising a likelihood of confusion therewith
for the Services, provided any use of the Trademarks or other names that does
not violate the terms of EXHIBIT D, shall be deemed not to be confusingly
similar.
2.3 Subject to the terms and conditions herein set forth, the license
granted to the Licensee hereunder will include the right of the Licensee to
grant sublicenses to use the Trademarks for the Services. For each such
sublicensee, Licensee must either (i) Control the sublicensee or (ii) by law,
contract or otherwise be able to terminate the sublicensee's right to use the
Trademarks should the sublicensee fail to adhere to the Standards and Quality
or the other applicable terms and conditions hereof.
2.4 In consideration for Licensor's transfer of a perpetual, exclusive
and royalty-free right and license to use the Trademarks subject to the terms
and conditions of this Agreement, Licensee is issuing to Licensor concurrently
with the effectiveness hereof _______ shares of common stock of Licensee,
receipt of which is hereby acknowledged.
3. TERM
The term of this Agreement shall be perpetual, unless sooner terminated in
accordance with Section 13.
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4. RIGHTS IN THE TRADEMARKS
4.1 Licensee covenants and agrees not to file any trademark application for
registration of any of the Trademarks or any marks similar thereto. Licensee
acknowledges that Licensor is the sole and exclusive owner of the Trademarks.
Licensee shall not at any time do or suffer to be done any act or thing which
will in any way impair the rights of Licensor in and to the Trademarks. It is
understood that Licensee shall not acquire and shall not claim any title to the
Trademarks adverse to Licensor by virtue of the license granted to Licensee or
through Licensee's use of the Trademarks, it being the intention of the parties
that all use of the Trademarks by Licensee, and the goodwill associated
therewith, shall at all times inure to the benefit of Licensor.
4.2 Licensor herein covenants and agrees to promptly use reasonable
efforts at its own expense to obtain a federal trademark registration from the
United States Patent and Trademark Office for the trademark "Xxxxxxxx Xxxx"
for the real estate and construction business. Licensee acknowledges and
agrees that Licensor has the right to obtain a federal trademark registration
with respect to the name "Crow," and other variations thereon, the use of
which shall be deemed not to be confusingly similar to "Xxxxxxxx Xxxx" when
such use does not violate EXHIBIT D.
4.3 Licensee shall cooperate with Licensor, at Licensor's request, to
make and to pursue the preparation and recording, if necessary, of any and all
documents, instruments and affidavits necessary to maintain the Trademarks on
the applicable trademark registers and to prosecute any additional
registrations of the Trademarks Licensor deems reasonably appropriate. Both
Parties shall use reasonable efforts and commercially reasonable judgment in
applying to written materials on which the Trademarks appear appropriate
notices of any trademark rights in and to the Trademarks.
5. COVENANTS.
5.1 Licensee agrees and covenants that:
(a) It will make commercially reasonable efforts to comply with all
applicable laws, regulations, ordinances and other requirements
involving the use of the Trademarks and the conduct of
Licensee's business in connection therewith; and
(b) It will use the Trademarks in a manner designed to protect and
enhance the value of the Trademarks and the goodwill therein and
will ensure that it and its sublicensees provide Services that
meet the Standards and Quality.
5.2 Licensor agrees and covenants that Licensor will use the Trademarks in
a manner designed to protect and enhance the value of the Trademarks and the
goodwill therein and will ensure that it will, and will include in any license
with any other licensee of the Trademarks that such licensee will, provide
goods, products and services that meet the Standards and Quality.
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5.3 Licensor and Licensee agree and covenant that for federal and state
income tax purposes, the transfer of property under this Agreement constitutes
part of a series of transfers of property to Licensee in exchange for stock in
Licensee in a transaction described in Section 351 of the Internal Revenue
Code of 1986, as amended, and agree and covenant to make all tax filings in a
manner consistent with this Section 5.3.
6. QUALITY AND APPROVAL
Licensee shall use the Trademarks only so long as the Services meet with
the Standards and Quality approved by the Licensor, as reflected in EXHIBIT C.
Licensee recognizes that the manner in which Licensee uses the license herein
granted could have a significant effect on the quality image of Licensor's
Trademarks. Licensee promises to maintain the same quality in the Services
provided under the Trademarks as reflected in EXHIBIT C and as may thereafter
be proposed by Licensee and approved in writing by Licensor.
7. INFRINGEMENT OF THE TRADEMARKS
7.1 The parties agree to notify each other promptly of any material acts
of infringement or unfair competition involving the Trademarks or a claim by a
third party that the use of the Trademarks by the parties, their affiliates or
sublicensees infringes the rights of a third party or constitutes unfair
competition.
7.2 Licensee shall have the initial right to take steps to prevent or
terminate (i) any use by a third party of the Trademarks or a confusingly
similar service xxxx or name in any manner likely to cause confusion and not
expressly permitted by this Agreement or (ii) acts of unfair competition which
adversely affect the Trademarks or the Licensee's rights thereto (collectively
"INFRINGEMENT OF THE TRADEMARKS"), promptly upon receipt of notice from the
Licensor or upon becoming aware of the Infringement of the Trademarks. Any
action taken by Licensee shall be at Licensee's sole expense.
7.3 In the event that Licensee commences a proceeding or any other form
of action to prevent or terminate Infringement of the Trademark, if so
requested by Licensee, Licensor will cooperate fully, at Licensee's expense,
to whatever extent Licensee reasonably deems necessary or appropriate to
prosecute such action or proceeding, including but not limited to being named
as a party to and providing evidence in the action or proceeding.
7.4 Where Licensee fails to prosecute or terminate Infringement of the
Trademarks by third parties, where Licensee fails to take adequate steps to
protect the value of and goodwill associated with the Trademarks, or if
Licensor in its own discretion decides that it would be in Licensor's best
interests to become involved in any litigation or other action being taken by
Licensee with respect to protection of or Infringement of the Trademarks,
Licensor may take
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whatever action it deems appropriate or desirable, including without
limitation, the initiation of legal proceedings or the joining in legal
proceedings initiated by Licensee. Any such actions taken by Licensor will be
conducted at Licensor's expenses.
7.5 In the event that Licensor commences a proceeding or any other form
of action to prevent or terminate Infringement of the Trademark, if so
requested by Licensor, Licensee will cooperate fully, at Licensor's expense,
to whatever extent Licensor reasonably deems necessary or appropriate to
prosecute such action or proceeding, including but not limited to being named
as a party to and providing evidence in the action or proceeding.
7.6 If any amount is awarded with respect to any suit or action brought by
Licensor or Licensee under this Article, the amount of such award shall first be
proportionately allocated between Licensor and Licensee in reimbursement of the
out-of-pocket costs and expenses incurred by Licensor and Licensee in the suit
or action, and the remainder shall be apportioned between Licensor and Licensee
pursuant to their mutual agreement as to their respective damages.
7.7 In addition to obtaining the registration contemplated by Section 4.2,
Licensee at its sole expense may require Licensor to make application for
further protection of the Trademarks or any portion thereof by state, federal or
foreign registration. In any such event, Licensor agrees to cooperate, at
Licensee's expense, with Licensee in the securing promptly of such registration.
8. EXCLUSIVITY AND NON-EXCLUSIVITY
8.1 Licensee shall have no right to use any of the Trademarks other than as
specifically stated in this Agreement, and Licensor expressly reserves the right
to use, and to license others to use, all rights in and to the Trademarks not
expressly granted to Licensee herein; provided, however, that Licensor's right
to use the Trademarks shall be subject to the Restrictions provided for in
EXHIBIT D.
8.2 Licensor shall (A) enter into licensing agreements with Crow Family
Holdings and Crow Investment Trust (defined in EXHIBIT D) and (B) use reasonable
efforts to enter into such additional licensing or other agreements or
provisions with Affiliated Entities and, to the extent it has a contractual
right to do so, other parties, as may be reasonably required to effect the
various provisions listed in EXHIBIT D with respect to the use of certain of the
Trademarks; such to be effective only upon and at the completion of the Initial
Public Offering of the Licensee.
9. REPRESENTATIONS AND WARRANTIES
9.1 Licensor represents and warrants that:
(a) Licensor has full power and authority to enter into this
Agreement, to grant the rights granted herein, and to perform
its obligations hereunder, and to do
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so will not violate or conflict with any material term or
provision of any agreement, instrument, statute, rule,
regulation, order or decree to which Licensor is a party or by
which it is bound, except as expressly disclosed to Licensee.
(b) With the exception of the restrictions permitted pursuant to
EXHIBIT D, there are no liens, encumbrances or restrictions that
relate to the Trademarks (whether written, oral, or implied) not
expressly disclosed to the Licensee or known to Licensee which
conflict with the rights granted to Licensee hereunder.
(c) Except as set forth on EXHIBIT D or otherwise expressly
disclosed to Licensee by Crow Family or known to Licensee,
Licensor has no knowledge of any third party who has registered,
has applied to register, is using, is authorized to use or
asserts a right to use the Trademarks, and except as permitted
by EXHIBIT D, has not granted any written licenses to use the
Trademarks.
9.2 Licensee represents and warrants that Licensee has the full power and
authority to enter into this Agreement and to perform its obligations hereunder,
and to do so will not violate or conflict with any material term or provision of
its charter or bylaws or of any agreement, instrument, statute, rule,
regulation, order or decree to which it is a party or by which it is bound.
10. INDEMNITY
LICENSEE ACKNOWLEDGES AND AGREES THAT IT WILL HAVE NO CLAIM AGAINST
LICENSOR OR ITS PREDECESSORS AND INTERESTS FOR ANY DAMAGE TO PROPERTY OR
INJURY TO PERSONS ARISING OUT OF THE OPERATION OF LICENSEE'S BUSINESS.
LICENSEE AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND LICENSOR, ITS
PREDECESSORS AND INTERESTS, OR THE PARTNERS, OFFICERS, EMPLOYEES, AGENTS AND
OTHER REPRESENTATIVES OF SAME, FROM AND AGAINST ANY AND ALL SUITS, DEMANDS, OR
CLAIMS AND ALL COSTS, LOSSES, LIABILITIES, EXPENSES, SETTLEMENTS (WHETHER
VOLUNTARY OR OTHERWISE) AND JUDGMENTS INCURRED IN CONNECTION THEREWITH,
INCLUDING ATTORNEY'S FEES AND COURT COSTS (SUCH FEES AND COURT COSTS EITHER
HAVING BEEN INCURRED IN DEFENSE OF SUCH CLAIMS, DEMANDS OR SUITS OR OTHERWISE),
INCLUDING WITHOUT LIMITATION ALL CLAIMS, DEMANDS AND SUITS FOR DAMAGES OR
INJURIES, INCLUDING DEATH, TO ANY AND ALL PERSONS OR PROPERTY, WHETHER REAL OR
ASSERTED AND WHETHER ARISING IN EQUITY, AT COMMON LAW, OR BY STATUTE, INCLUDING
THE TEXAS DECEPTIVE TRADE PRACTICES ACT OR SIMILAR STATUTE OF OTHER
JURISDICTIONS, OR UNDER THE LAW OF CONTRACTS, TORTS
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(INCLUDING WITHOUT LIMITATION, NEGLIGENCE AND STRICT LIABILITY WITHOUT REGARD
TO FAULT) OR PROPERTY, OF EVERY KIND OR CHARACTER, AND WHETHER OR NOT DUE IN
WHOLE OR IN PART TO LICENSOR'S SOLE OR CONCURRENT NEGLIGENCE OR OTHER FAULT,
BREACH OF CONTRACT OR WARRANTY, VIOLATION OF THE TEXAS DECEPTIVE TRADE
PRACTICES ACT, OR STRICT LIABILITY WITHOUT REGARD TO FAULT, BASED UPON, IN
CONNECTION WITH, RESULTING FROM OR ARISING OUT OF THE BREACH OF THIS AGREEMENT
BY LICENSEE (OR THE CORRESPONDING PROVISIONS OF ANY SUBLICENSE BY ANY
SUBLICENSEE) OR THE PROVIDING BY LICENSEE OR ANY SUBLICENSEE OF GOODS OR
SERVICES UNDER TRADEMARKS LICENSED PURSUANT TO THIS AGREEMENT.
LICENSOR SHALL DEFEND, INDEMNIFY AND HOLD LICENSEE AND ITS PARTNERS,
OFFICERS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES HARMLESS FROM AND
AGAINST ANY AND ALL SUITS, DEMANDS, OR CLAIMS AND ALL COSTS, LOSSES,
LIABILITIES, EXPENSES, SETTLEMENTS (WHETHER VOLUNTARY OR OTHERWISE) AND
JUDGMENTS INCURRED IN CONNECTION THEREWITH, INCLUDING ATTORNEY'S FEES AND
COURT COSTS (SUCH FEES AND COURT COSTS EITHER HAVING BEEN INCURRED IN DEFENSE
OF SUCH CLAIMS, DEMANDS OR SUITS OR OTHERWISE), INCLUDING WITHOUT LIMITATION
ALL CLAIMS, DEMANDS AND SUITS FOR DAMAGES OR INJURIES, INCLUDING DEATH, TO
ANY AND ALL PERSONS OR PROPERTY, WHETHER REAL OR ASSERTED AND WHETHER ARISING
IN EQUITY, AT COMMON LAW, OR BY STATUTE, INCLUDING THE TEXAS DECEPTIVE TRADE
PRACTICES ACT OR SIMILAR STATUTE OF OTHER JURISDICTIONS, OR UNDER THE LAW OF
CONTRACTS, TORTS (INCLUDING WITHOUT LIMITATION, NEGLIGENCE AND STRICT
LIABILITY WITHOUT REGARD TO FAULT) OR PROPERTY, OF EVERY KIND OR CHARACTER,
AND WHETHER OR NOT DUE IN WHOLE OR IN PART TO LICENSEE'S SOLE OR CONCURRENT
NEGLIGENCE OR OTHER FAULT, BREACH OF CONTRACT OR WARRANTY, VIOLATION OF THE
TEXAS DECEPTIVE TRADE PRACTICES ACT, OR STRICT LIABILITY WITHOUT REGARD TO
FAULT, BASED UPON, IN CONNECTION WITH, RESULTING FROM OR ARISING OUT OF ANY
BREACH BY LICENSOR OF THIS AGREEMENT.
LICENSEE'S AND LICENSOR'S RESPECTIVE CONTRACTUAL OBLIGATIONS OF
INDEMNIFICATION SHALL EXTEND TO ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION
ALLEGING ACTS OF NEGLIGENCE, FAULT, OR CONTRIBUTORY NEGLIGENCE ON THE PART OF
THE INDEMNIFIED PARTY; PROVIDED, HOWEVER, A PARTY'S RESPECTIVE CONTRACTUAL
OBLIGATION OF INDEMNIFICATION HEREUNDER SHALL NOT EXTEND TO ANY CONSEQUENCES
ADJUDICATED TO HAVE BEEN A RESULT OF THE OTHER PARTY'S NEGLIGENCE, ERROR,
BREACH OF CONTRACT OR OMISSIONS. TO THE EXTENT THAT BOTH PARTIES ARE
ADJUDICATED TO BE JOINTLY AT FAULT OR RESPONSIBLE, EACH SHALL INDEMNIFY AND
HOLD THE
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OTHER HARMLESS FROM ALL LIABILITY ATTRIBUTABLE TO THEIR OWN RESPECTIVE
NEGLIGENCE OR OTHER FAULT.
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11. INSURANCE
Licensor and Licensee agree to deliver to each other on or before the
effectiveness of this Agreement and to maintain for so long as the Trademarks
are being used by Licensee and for a period of three years thereafter,
endorsements from their respective insurance companies, naming Licensor or
Licensee, as the case may be, and their respective partners, officers,
employees, agents and other representatives as named insureds, as their
interests may appear, on all general liability insurance policies covering
the respective parties. Licensor and Licensee shall each bear their own
costs in maintaining the insurance policies.
12. REMEDIES
The parties recognize the unique and special nature and value of the use
of the Trademarks and agree that it is extremely difficult and impractical to
ascertain the extent of the detriment to Licensor which would be caused in
the event of any use of the Trademarks contrary to the terms of this
Agreement. The parties further acknowledge that Licensor will have no
adequate remedy at law in the event Licensee uses the Trademarks in any way
not permitted hereunder, and that Licensor, through the use of the
Arbitration provisions contained in Section 16, shall be entitled to
equitable relief by way of temporary and permanent injunction, and such other
and further relief at law or equity as any arbitrator or court of competent
jurisdiction may deem just and proper, in addition to any and all other
remedies provided for herein. Such relief, however, shall not extend, except
as a result of the termination of this Agreement, to any equitable or other
relief that would prevent Licensee from using or continuing to use the
Trademarks as licensed hereunder in accordance herewith.
13. TERMINATION
13.1 In respect of any breach or noncompliance with the provisions of
this Agreement, any party may seek any remedy permitted at law or in equity,
including without limitation damages or the specific performance of any
obligation, but excluding, except as provided for in this Article 13,
termination of this Agreement.
13.2 In the event that Licensee materially breaches Licensee's
obligation to maintain the Standards and Quality and such breach materially
and adversely affects the value of the Trademarks, Licensor shall give notice
of said breach in writing to Licensee. Licensee shall have (A) sixty (60)
days in which to initiate the cure or correction of any breach and (B)
provided such cure or correction is commenced in such sixty (60) day period
and thereafter diligently pursued, a period not to exceed one hundred and
eighty (180) days from the date of Licensor's notice of said breach in which
to complete the cure or correction of said breach and, failing such, Licensor
may terminate this Agreement. As part of its correction efforts, Licensee
will not be required to restore to Licensor any loss in reputation the names
or Trademarks may have incurred prior to such correction. Such termination,
if disputed by Licensee, shall be effective only upon a final resolution of
an arbitration
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proceeding wherein it is determined that Licensee had materially breached
Licensee's obligation to maintain the Standards and Quality and such breach
materially and adversely affected the value of the Trademarks.
13.3 In the event that Licensee shall file or permit to be filed any
petition under the bankruptcy or insolvency laws of any jurisdiction and such
proceedings result in a total liquidation of Licensee, Licensor shall have
the right to terminate this Agreement upon written notice to Licensee and
payment to Licensee (or any successor) of the then fair market value of the
license granted hereunder.
13.4 In the event that Licensee and all sublicensees cease to use all
of the Trademarks for a consecutive period of 12 months, Licensor shall have
the right to terminate this Agreement upon written notice to Licensee and
payment to Licensee of the then fair market value of the license granted
hereunder.
13.5 In the event of any termination of this Agreement:
(a) The provisions of Sections 10, 11 and 12 shall survive such
termination;
(b) Licensor and Licensee shall keep in full force and effect the
insurance required by Section 11 following such termination as
required therein; and
(c) Licensee, its Permitted Assigns and its sublicensees shall
immediately cease any and all use of the Trademarks in any manner
whatsoever and all rights granted to Licensee hereunder shall
immediately revert to Licensor, provided that sublicensees that
are primarily single or limited purpose entities or joint
ventures (but expressly excluding without limitation, any
operating company), may continue to use the Trademarks subject
to all of the provisions herein provided so long as the scope
of the sublicensees business remains the same as it was on the
date of the termination of this Agreement.
(d) The Restrictions contained in EXHIBIT D shall be deemed
terminated on the date this Agreement terminates, provided that
for a ten (10) year period subsequent to such date, neither
Licensor nor any of its licensees shall have the right to use
the name/trademarks "Xxxxxxxx Xxxx Company" or "Xxxxxxxx Xxxx"
in association with or as the name/trademark of any business,
except to the extent permitted by EXHIBIT D prior to such
termination. If, however, all sublicensees cease to use any
of the trademarks, such ten (10) year period shall be shortened
to a period of two (2) years and three hundred and sixty four
(364) days after the date of the last use of any of the
Trademarks by a sublicensee, it being the express intent of the
parties not to abandon the Trademarks.
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14. NOTICES
14.1 All notices and other communications required or permitted under this
Agreement will be in writing and will be (i) sent by electronic facsimile
transmission, or by hand delivery and (ii) mailed by certified mail, return
receipt requested, in each case to the address or facsimile number as provided
below. Any party may, by giving notice to the other party in accordance with
this paragraph, change the address or facsimile number at which it is to receive
notices or other communications hereunder.
14.2 Notices provided for herein shall be considered effectively given
two business days after sent by certified mail or when actually received by
facsimile transmission or hand delivery, in the case of Licensor, to
3200 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
and in the case of Licensee, to
3400 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Legal Group
with copies of such notices sent to the Chief Executive Officer and Chief
Financial Officer at such addresses or numbers.
15. ASSIGNMENT
EITHER PARTY MAY ONLY ASSIGN ITS RIGHTS HEREUNDER TO A PERMITTED
ASSIGNEE UPON WRITTEN NOTICE TO THE OTHER PARTY. EXCEPT FOR THE FOREGOING,
NO ASSIGNMENT OF THIS AGREEMENT IS PERMITTED BY LICENSOR OR LICENSEE.
NOTHING HEREIN CONTAINED SHALL PRECLUDE THE ASSIGNMENT BY LICENSOR OF ANY
TRADEMARKS OR OTHER INTELLECTUAL PROPERTY RIGHTS NOT GRANTED TO LICENSEE
HEREUNDER. IN THE CASE OF ANY ASSIGNMENT, THE ASSIGNEE MUST PROVIDE A
WRITTEN STATEMENT OF ITS INTENT TO AND AGREEMENT TO BE BOUND BY ALL OF THE
TERMS OF THIS AGREEMENT. IN THE CASE OF ANY SUBLICENSE, SUBLICENSEES SHALL
AGREE TO BE BOUND BY ALL THE TERMS OF THIS AGREEMENT. ALL SUBLICENSEES OF
LICENSEE SHALL BE BOUND BY ANY ASSIGNMENT MADE PURSUANT TO THIS SECTION 15.
IN NO EVENT, HOWEVER, SHALL ANY SUBLICENSEE BE ENTITLED TO ENFORCE THE
PROVISIONS OF EXHIBIT D HERETO WHICH SHALL BE FOR THE SOLE AND EXPRESS
BENEFIT OF LICENSOR AND LICENSEE AND THEIR
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RESPECTIVE PERMITTED ASSIGNEES AND SHALL BE ENFORCEABLE ONLY BY LICENSOR AND
LICENSEE AND THEIR RESPECTIVE PERMITTED ASSIGNEES.
16. ARBITRATION
The parties hereby agree to resolve by binding arbitration any and all
claims, demands, actions, disputes, controversies, damages, losses,
liabilities, judgments, payments of interest, penalties, enforcement of
settlement agreements, deficiencies, any and all demands not yet matured into
one of the foregoing, and other matters in question arising out of or
relating to this Agreement, the alleged breach thereof, or in any way
relating to the subject matter of this Agreement (all of which are referred
to as "CLAIMS"), even though some or all of such Claims allegedly are
extra-contractual in nature and even though some or all of such Claims sound
in contract, tort or otherwise, at law or in equity, in accordance with
Commercial Arbitration Rules (the Supplementary Procedures for Large, Complex
Disputes, if applicable) of the American Arbitration Association (the "AAA")
in effect at the time of the Claims, as modified by the procedures set forth
in EXHIBIT E hereto. Licensor and Licensee hereby acknowledge and agree that
this Agreement and the obligations to be performed hereunder constitute
interstate commerce. THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD
CONSEQUENTIAL DAMAGES OR PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT
BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE
OF DAMAGES) REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER STATE
LAW; THE PARTIES HEREBY AGREEING THAT NEITHER PARTY HERETO SHALL BE LIABLE
FOR CONSEQUENTIAL DAMAGES OR PUNITIVE DAMAGES IN CONNECTION WITH ANY SUCH
CLAIMS.
17. BINDING EFFECT
This Agreement will inure to the benefit of and be binding upon the
parties, their successors and their Permitted Assignees.
18. SEVERABILITY
If any provision of this Agreement is held to be invalid, illegal, or
unenforceable, in whole or part, such invalidity will not affect any
otherwise valid provision, and all other valid provisions will remain in full
force and effect.
19. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, and all of which together will constitute
one document.
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20. TITLES
The titles and headings preceding the text of the paragraphs and
subparagraphs of this Agreement have been inserted solely for convenience of
reference and do not constitute a part of this Agreement or affect its
meaning, interpretation or effect.
21. WAIVER
The failure of either party hereto to insist in any one or more
instances upon performance of any terms or conditions of this Agreement will
not be construed as a waiver of future performance of any such term,
covenant, or condition and the obligations of any party with respect to such
term, covenant or condition will continue in full force and effect and either
party may, within the time provided by applicable law, enforce any or all of
such rights.
22. OTHER AGREEMENTS
This Agreement constitutes the entire agreement among the parties
regarding the matters subject to this Agreement, and any prior understandings,
agreements, or representations among the parties are superseded to the extent
they relate to the subject matter of this Agreement.
23. MODIFICATION
Except as otherwise provided herein, this Agreement cannot be amended or
modified except by subsequent written agreement between the Licensee and
Licensor which specifically mentions this Agreement.
24. GOVERNING LAW AND JURISDICTION
This Agreement will be construed and enforced in accordance with the
laws of the State of Texas, excluding and without giving effect to the
principles of conflict of laws. Subject to Section 16 hereof, the parties
consent to the jurisdiction of any court in Dallas County, Texas for any
action commenced by a party arising out of matters related to this Agreement.
The parties further agree and acknowledge that this Agreement is performable
in Dallas County, Texas, and hereby waive the right to commence any action
arising out of matters related to this Agreement in any court outside Dallas
County, Texas, except an action ancillary to an arbitration pursuant to
Article 16 or to enforce or implement any arbitration award or decree under
Article 16.
25. INDEPENDENT CONTRACTORS; NO JOINT VENTURE
It is agreed and understood that Licensee is an independent contractor
and not an agent or employee of Licensor. Nothing contained herein shall be
deemed to create a partnership or joint venture between the parties, and
neither party hereto shall have the right or authority to bind the
14
other. This Agreement is intended to affect only the names and marks that the
parties use in conducting their respective businesses, but not to otherwise
affect the scope of each party's permissible activities.
[SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives on the dates indicated below.
LICENSOR: LICENSEE:
CFH TRADE-NAMES, X.X. XXXXXXXX XXXX COMPANY
By: By:
---------------------------- -------------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
------------------------- ----------------------------
Dated: Dated:
------------------------- ---------------------------
16
EXHIBIT A
LICENSED TRADEMARKS, TRADE NAMES, DESIGNS
LOGOS AND ARTWORK
1. "Trademarks" means (i) "Xxxxxxxx Xxxx," "Xxxxxxxx Xxxx Company," "Xxxxxxxx
Xxxx Commercial Company," and "Xxxxxxxx Xxxx Ventures" and (ii) any other name
or xxxx the use of which is hereafter licensed by Licensor in writing to
Licensee if such use conforms to the terms of that license; provided, however,
that Licensee shall be permitted to adopt any of the foregoing Trademarks, or an
acronym or abbreviation thereof, or a trade name containing, or any design, logo
or artwork incorporating, any of the Trademarks whether singly or in combination
with other such names or marks not licensed hereunder with a geographical
designation or abbreviation thereof, and/or including without limitation, such
phrases as "Advisory Services," "Corporate Services," "Development," "Real
Estate Services" or product types as "Office," "Industrial," or "Retail" (it
being understood that such phrases or marks are not purported to be licensed
hereunder). "Trademarks" specifically does not mean or include the name or xxxx
"Xxxx," whether alone or embedded in any other name or xxxx, except following
the name "Xxxxxxxx." Notwithstanding the foregoing (i) the name and xxxx "Crow"
may be used on a non-exclusive basis by Licensee without the word "Xxxxxxxx"
solely in internal corporate communications and legal documentation but not in
sales, marketing or other materials voluntarily made publicly available or to
third parties, and (ii) the definition of "Trademarks" does not mean or include
the use of any of the names or marks listed in (i) or (ii) above in combination
with the words "International," "Residential" or "Interests" or the acronym
"TCR" or "TCI."
A-1
EXHIBIT B
SERVICES
"Services" shall mean and include any and all activities, goods, products and
services in any and all areas of business except for the "Residential Real
Estate Business."
"Residential Real Estate Business" means the business of ownership, acquisition,
construction, development, management and brokerage of residential facilities,
rental housing and for sale housing and the provision of services to users of
residential real estate services including owners, investors, buyers, sellers,
landlords, tenants, brokers, advisors and financial institutions. (Thus, for
example, Licensee may not engage in the Residential Real Estate Business under
the name "Xxxxxxxx Xxxx" or under any of the other Trademarks. Should Licensee
elect to engage in the Residential Real Estate Business under another name,
i.e., a name that is not one of the Trademarks or a name confusingly similar
thereto, Licensee would be permitted to describe in Licensee's SEC filings and
communications with the financial and investment community that Licensee is
engaged in such business under that other name.)
B-1
EXHIBIT C
STANDARDS AND QUALITY
Licensee hereby acknowledges the standards, quality, style and image represented
by, and of services rendered under, the Trademarks.
For purposes of this Agreement, "Standards and Quality" specifically shall mean
the type and quality of performance of services and the type and quality of
goods and products that meet the standards of services and goods and products
historically set by Xx. Xxxxxxxx Xxxx or Texas TCC for their respective
Affiliated Entities.
C-1
EXHIBIT D
RESTRICTIONS
1. Definitions (solely with respect to this EXHIBIT D):
1.1 "Crow Family" means and includes Xxxxxxxx Xxxx Interests Company, a Texas
corporation, d/b/a Crow Family Holdings; Crow Realty Investors, L.P., a Texas
limited partnership, d/b/a Crow Investment Trust; any subsidiary of Crow Family
Holdings or Crow Investment Trust or any other entity directly or indirectly
controlling, controlled by, or under common control with Crow Family Holdings or
Crow Investment Trust, including but not limited to Xxxxxxxx Xxxx International
and Crow Agricultural; and the lineal descendants (and trusts for the benefit
thereof) of Xxxxxxxx Xxxx and Xxxxxxxx Xxxx who are, or become, parties to the
Crow Family Holdings Governance Agreement dated July __, 1997.
1.2 "Real Estate Service Business" means the business or businesses of
providing comprehensive real property management, project leasing, brokerage
facilities and infrastructure management, development and construction, and
retail services to all users of commercial real estate services including real
estate owners and investors, buyers and sellers of real estate, tenants, real
estate brokers and financial institutions, including but not limited to,
overseeing building operations and tenants, space planning and relocation
coordination, facility design, development and construction, general
contracting, tenant representation, real estate investment sales and general
brokerage services; provided that Real Estate Service Business shall not include
the performance or provision of any such services incident to a material
investment in or sponsorship of an investment fund or other entity (but
expressly excluding any such services to any third party) that does not have any
class of equity securities registered under Section 12 of the Securities
Exchange Act.
1.3 "Commercial Real Estate Business" means any business or businesses of
developing, acquiring, managing, financing, owning or investing in real estate
(including, but not limited to, office, industrial, or retail) whether conducted
directly or indirectly, or through subsidiaries, joint ventures, partnerships or
other arrangements.
2. Restrictions on the Licensor's use of the Trademarks and certain marks
related thereto:
2.1 Licensor shall provide the applicable constituents of Crow Family and its
successors and assigns with the right to use the names/trademarks "Crow Family
Holdings" and "Crow Investment Trust" and their acronyms and any and all
designs, logos and artwork connected therewith, in any context, except in a Real
Estate Service Business. Names of businesses including these permitted
names/trademarks may also include real estate-related words that do not connote
a Real Estate Service Business (e.g. "Crow Family Holdings Realty Partners"
would be permitted, but "Crow
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Family Holdings - Management Services" would not be permitted), but these
other words must not interrupt the string of words in the permitted
name/trademark (e.g. "Crow Family Holdings - Industrial" would be permitted,
but "Crow Family Industrial Holdings" would not be permitted).
2.2 Subject to paragraphs 2.4 and 2.6 below, any right to use the
name/trademark "Crow" granted by Licensor to Crow Family specifically shall not
include the right to use the name/trademark "Crow" in association with or as the
name/trademark of any Real Estate Service Business or Commercial Real Estate
Business (or in a tag line associated with such name/trademark) in (A) any
combination with the word "Company" or (B) any combination with any word or
phrase that connotes a "Real Estate Service Business," including but not limited
to terms or phrases "Development," "Brokerage," "Management," "Property
Management," "Services," "Corporate Services," "Infrastructure Management,"
"Leasing" or "Tenant Representation," except that nothing herein shall prevent
the use of the name "Crow" in conjunction with a first name other than
"Xxxxxxxx," provided such first name is not deceptively similar to or would
likely be confused with the name "Xxxxxxxx," e.g. "Tram L. or X. Xxxx").
2.3 In conjunction with paragraph 2.1 above, Licensor shall xxxxx Xxxx Family
and its successors and assigns the right to pick another permitted
name/trademark, including the name/trademark "Crow" (for use for the same
services and in the same manner permitted under paragraph 2.1) which
name/trademark will be selected on or before September 1, 1998 and will be
subject to the written approval of Licensee (which approval shall not be
unreasonably withheld), but if Crow Family exercises such right, then Crow
Family shall be required to cease, subject to the exceptions listed below, the
use of one of the two original names/trademarks within (A) six months after
commencing use of the new name/trademark or (B) September 1, 1998, whichever
shall first occur. The names and trademarks "Crow Family," "Crow Investments"
and "Crow Holdings" and any other permutation of the words in the two initially
approved names and trademarks are hereby pre-approved by Licensee. As a
specific exception to its general obligation to cease using the old
name/trademark, if Crow Family elects to change one of its names/trademarks
pursuant to this paragraph, Licensor shall not require Crow Family to change the
names/trademarks of any entity existing as of the effective date of such change,
so long as (i) the scope of such entity's business is not in any material way
expanded beyond that in which it was engaged as of the effective date of the
change or (ii) such entity is as of such date and thereafter remains dormant. A
material expansion of the scope of an entity's business will include Crow
Family's agreement or authorization to increase the capitalization of an entity
beyond its then current contractual capitalization limits in order to acquire
additional business opportunities, but funding up to such limits and funding
beyond such limits for operating or repair and replacement requirements or for
capital improvements ancillary to existing improvements shall be deemed not to
be a material expansion. As a further exception to the general obligation to
cease using the old name/trademark, the Crow Family and its successors and
assigns may be allowed by the Licensor to continue to use the old name in
internal corporate communications and legal documents (including private
placement disclosure statements and any agency or government reporting
requirements or statements), and as otherwise required by
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law; however, in no event will such continued use be allowed in any marketing
materials or other like items. The old name may also be used after the
words "formerly known as" for a period not to exceed one year or such longer
period as may be required by law.
2.4 Subject to the terms of this Section 2.4, Licensee hereby acknowledges
and agrees that in addition to the entities doing business under the name
"Crow Family Holdings," "Crow Investment Trust," and other entities permitted
to conduct business using certain of the Trademarks pursuant to the terms of
this EXHIBIT D, certain existing entities that are or have been affiliates of
or otherwise related to Crow Family have in the past, currently are and may
in the future continue to conduct business through entities using one or more
of the Trademarks or the name "Crow" in a manner inconsistent with the terms
of this Agreement. These entities (collectively, the "NON-CONFORMING USERS")
include, by way of example only, the partnerships and corporations commonly
known as the "Existing Asset Base" or "Xxxxxxxx Xxxx Commercial Company,"
"Xxxx-Xxxxxx," and "Xxxx-Xxxxx," but shall exclude Crow Family Holdings and
Crow Investment Trust, which are otherwise permitted herein. The licenses to
be granted by Licensor to Crow Family consistent with the terms hereof shall
include the agreement of Crow Family (to the extent the members of Crow
Family are party thereto) not to cause, consent or agree to or otherwise
cooperate with, and, to the extent Crow Family has contractual authority to
do so, to use reasonable efforts to prevent (but without being required to
incur any obligations or liability or initiate legal action to do so) any
Non-Conforming Users from expanding the scope of its business beyond that
existing as of September 1, 1997, in any material way, or from otherwise
violating the terms of this Agreement in any manner not expressly authorized
herein.
2.5 Licensor will not license or otherwise authorize the name/trademark "Crow"
to be used in the name/trademark (or any associated tag line) of any publicly
held entity having equity securities registered under Section 12 of the
Securities Exchange Act from and after the date the entity first files a
registration statement under the Securities Act or the Securities Exchange Act.
(As an exception to the preceding limitation, Licensor or other Crow Family
entities licensed by Licensor may indicate in their respective SEC filings and
in communications with the financial and investment community their affiliations
with Licensor or Crow Family and may indicate their former names; and the
names/trademarks "Xxxxxxxx Xxxx Residential Company," "Xxxxxxxx Xxxx
Residential" and "TCR" may be used for any public entity, pursuant to the terms
of applicable agreements among Xxxxxxxx Xxxx Residential Company, Crow Family
and, if applicable, Licensee, pertaining to name/trademark use by TCR.
2.6 Subject to paragraph 2.5 above, Licensor shall (to the extent applicable)
xxxxx Xxxx Family the right to use the name/trademark "Crow" (as opposed to one
of the longer, approved names/trademarks described in paragraphs 2.1 and 2.3
above) in the name of any business that is not primarily engaged in an aspect of
the real estate business (including without limitation, the Commercial Real
Estate Business and the Real Estate Service Business, together with hotels,
service centers and marts) so long as the name/trademark of such business also
includes a word that is
D-3
descriptive of its business (e.g., "Crow Publishing"), provided that the
foregoing shall not preclude the ownership, operation and management of real
estate which is incidental to any such business.
2.7 If Crow Family should enter any Real Estate Services Business, whether
directly or through a strategic alliance with another (non-Licensee) service
provider, Licensor may not grant any license to or authorize Crow Family to use
the name/trademark "Crow" in the name (or associated tag line) or as the
trademark of such business.
2.8 Certain individual family members of Crow Family (broadly defined to
include family members who are not parties to the Crow Family Holding Governance
Agreement) and their respective trusts will not be parties (in their individual
or beneficiary capacities) to and, as a result, may not be bound by the various
license agreements or other provisions with respect to the name/trademark issues
contemplated or required herein. Accordingly, the licenses to be granted by
Licensor to Crow Family consistent with the terms hereof shall include the
agreement of Crow Family (to the extent the members of Crow Family are parties
thereto), upon the written request of Licensee, to use reasonable efforts to
cause or prevent, to the extent Crow Family is entitled under the terms of any
contract or agreement to do so, these other family members or their trusts from
violating any of the agreements and restrictions referenced herein [assuming
they were directly bound by one or more of them. Further, as a part of its
grant to the Crow Family of rights to use certain of the Trademarks, Licensor
shall include the agreement of Crow Family (to the extent the members of Crow
Family are parties thereto) to provide such assistance, at Licensee's expense,
as may reasonably be necessary to obtain a state, federal or foreign trademark
registration on the xxxx "Xxxxxxxx Xxxx" and on such other names/trademarks as
Licensee may reasonably request in accordance with the Agreement.
2.9 Licensor will obligate Xxxxxxxx Xxxx International to cease all use of the
name and trademark "Xxxxxxxx Xxxx" (and any names or marks confusingly similar
thereto) within three (3) years after the date of this Agreement. Licensor (and
the Crow Family) will further obligate Xxxxxxxx Xxxx International to cease all
use of the name and trademark "Xxxxxxxx Xxxx" (and any names or marks
confusingly similar thereto) in any given city within twelve (12) months
following written notice to Licensor by Licensee that Licensee (or one of its
subsidiaries) has opened an office in that city. For the purpose of the
foregoing, "Crow Family Holdings" and "Crow Investment Trust," and any
replacement name selected by Crow Family pursuant to Section 2.3, and the
acronyms of those names shall be deemed not to be confusingly similar.
D-4
EXHIBIT E
ARBITRATION PROCEDURES
DEMAND FOR ARBITRATION. Arbitration shall be commenced by a written
demand for arbitration, describing in reasonable detail the dispute and the
amount and nature of the relief sought (the "Notice and Demand for
Arbitration"), given by one party (the "claimant") to the other (the
"respondent") and to the office of the AAA in Dallas, Texas. If the relief
sought in the arbitration is a determination as to whether (i) the Licensee
has materially breached Licensee's obligation to maintain the Standards and
Quality, (ii) such breach materially and adversely affected the value of the
Trademarks, and (iii) Licensee failed thereafter upon notice to correct such
breach in the time provided in the Agreement and thus the Agreement may be
terminated in accordance with Section 13 of the Agreement, then such
arbitration shall proceed in accordance with paragraph (B) below
("TERMINATION ARBITRATION"). Otherwise, the arbitration shall be pursuant to
paragraph (A) below.
(A) NON-TERMINATION ARBITRATION
(1) NUMBER AND SELECTION OF ARBITRATORS. The arbitration shall be
conducted by a single arbitrator except that, if the amount in controversy
exceeds $1,000,000 or involves equitable relief (other than termination),
either party may require, by notice given to the other, that the matter be
heard by a panel of three arbitrators. If the claimant elects to require
three arbitrators, the election must be set forth in the Notice and Demand
for Arbitration. If the respondent elects to require three arbitrators,
notice of the election must be provided to the claimant and the AAA within
seven days from the date the Notice and Demand for Arbitration is given. If
neither party so elects in the manner and within the time set forth above,
the matter shall be heard by a single arbitrator. If there is to be a single
arbitrator, the arbitrator shall be selected pursuant to the Commercial
Arbitration Rules of the AAA. If there are to be three arbitrators, each
party shall have ten days from the date the Notice and Demand for Arbitration
is given to select an arbitrator and notify the AAA and the other party of
the selection. The party-appointed arbitrators shall then select the third
arbitrator, who shall act as chairperson of the panel. If the
party-appointed arbitrators fail to agree upon a third arbitrator within 20
days from the date the Notice and Demand for Arbitration is given, the third
arbitrator shall be selected by the AAA. Any neutral arbitrator, whether
appointed by the AAA or by the party-appointed arbitrators, shall be licensed
to practice law in the State of Texas, in good standing with the State Bar of
Texas, and shall have not less than 15 years of experience as an attorney or
judge. In addition, the neutral arbitrator shall have experience with
complex business disputes.
(2) LOCATION OF ARBITRATION. The arbitration shall be conducted in
Dallas, Texas, at the office of the AAA or such other location agreed upon by
the parties.
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(3) DISCOVERY. Discovery shall be conducted in accordance with the
Texas Rules of Civil Procedure, except that:
(i) depositions shall not be allowed except that either party may have
three depositions in addition to depositions of experts, provided
that no deposition shall exceed four hours and all depositions must
be completed within 50 days from the date the Notice and Demand for
Arbitration is given.
(ii) there shall be no requests for admissions,
(iii) each party shall be limited to no more than 15 interrogatories,
including subparts,
(iv) each party shall be limited to no more than two document requests,
including subparts, and
(v) document discovery shall be limited to documents directly relevant
to the matter in dispute. All privileges under state and federal
law, including attorney-client, work product, and party
communication privileges, shall be preserved and protected. All
experts engaged by a party must be disclosed to the other party
within 15 days from the date the Notice and Demand for Arbitration
is given. All discovery requests must by served within 20 days
from the date the Notice and Demand for Arbitration is given. A
party shall not be required to respond to discovery requests served
on the party after that deadline.
(4) TIMING OF ARBITRATION. The arbitration hearing shall be scheduled
to be held no later than 60 days after the date the Notice and Demand for
Arbitration is given. The arbitration hearing shall be conducted in one day.
The claimant shall be allowed four hours for presentation of the claimant's
case and any rebuttal to the respondent's presentation; the respondent shall
be allowed four hours for its response to the claimant's initial presentation.
(5) THE ARBITRATORS' AWARD. The decision of the arbitrator, or a
majority of the arbitrators, shall be reduced to writing and shall be
delivered to the parties no later than 15 days following the arbitration
hearing. Each party shall bear the party's own attorneys' fees and other
costs and expenses incurred in connection with the arbitration, including
without limitation the fees and expenses of the arbitrator to be appointed by
such party in the case of a three-arbitrator panel. The parties shall share
the other arbitrator's fees and any fees charged by the AAA equally.
E-2
(B) TERMINATION ARBITRATION
The parties agree that the following principles and conditions will be
applicable to all aspects of any Termination Arbitration:
(1) Whenever such a controversy or dispute arises between the parties, as
to whether (i) the Licensee has materially breached Licensee's
obligation to maintain the Standards and Quality, (ii) such breach
materially and adversely affected the value of the Trademarks, and
(iii) Licensee failed thereafter upon notice to correct such breach
within the time provided in the Agreement and thus the Agreement may
be terminated in accordance with Section 13, either party may invoke
arbitration pursuant to this paragraph (B) by giving the other party
written notice in writing demanding that the controversy be
submitted to arbitration.
(2) Upon receipt of the written notice specified herein, the dispute or
controversy will first be referred to a panel of "inside"
arbitrators consisting of four people with authority to bind their
respective party (two from Licensee and two from Licensor). This
panel then will endeavor to resolve the dispute or controversy. If
the panel cannot resolve the dispute or controversy in thirty (30)
days, the matter shall be referred to "outside" arbitrators by
either party giving the other a written notice stating that the
dispute or controversy is to be submitted to outside arbitrators.
(3) In the sixty (60) days following the date that the written notice of
Paragraph (2) is given, the parties shall endeavor to select three
independent arbitrators (that is, arbitrators having no substantial
economic or other material relationship with either party). If the
parties cannot mutually agree on the three arbitrators within such
time period, then each party will (within sixty (60) days) select
one independent arbitrator and notify the AAA and the other party of
the selection. Within 21 days after the second of such notices, the
two party-appointed arbitrators shall select the third independent
arbitrator, who shall act as the chairperson of the panel. If the
party-appointed arbitrators fail to agree upon a third arbitrator
within the 21 day period, the third arbitrator shall be selected by
the AAA. Any neutral arbitrator, whether appointed by the AAA or by
the party-appointed arbitrators, shall be licensed to practice law
in the State of Texas, in good standing with the State Bar of Texas,
and shall have not less than 15 years of experience as an attorney
or judge. In addition, the neutral arbitrator shall have experience
with complex business disputes.
(4) Each arbitrator must agree in writing prior to his or her acceptance as
an arbitrator to abide by the terms and conditions of this Agreement,
including, particularly his or
E-3
her agreement to apply the principles of law specified by the
parties in Paragraph (7) below and to reach a decision as to the
arbitration proceeding.
(5) Discovery of evidence shall be conducted by the parties in accordance
with the general principles embodied in the Federal Rules of Civil
Procedure and/or the Texas Rules of Civil Procedure. All privileges
under state and federal law, including attorney-client, work product,
and party communication privileges, shall be preserved and protected.
To the extent that it is necessary, either party may apply to the
United States District Court for the Northern District of Texas,
Dallas Division, for assistance in obtaining discovery of evidence
and for presentation to the arbitrators.
(6) The arbitration shall be held in Dallas, Texas at the offices of AAA or
such other location agreed upon by the parties. Prior to
testifying, whether directly in the presence of the arbitrators or
through depositions, each witness will be sworn to tell the truth,
subject to the perjury laws of the State of Texas. The arbitration
will be conducted as a case would be presented to a trial court
without a jury, that is, the arbitrators in their discretion may
hear any type of evidence, including hearsay evidence, recognizing
that deficiencies in the technical admissibility of the evidence
(such as, documents are not properly authenticated or the testimony
is hearsay) are to be taken into account in the weight to be
afforded such evidence.
(7) In reaching their decision, the arbitrators shall apply the legal
principles to which the parties have agreed herein (such as, the
limitations of remedies and the provisions concerning comparative
responsibility), their common sense, the provisions of the Federal
Arbitration Act, the provisions of the Commercial Arbitration Rules
of the American Arbitration Association then applying, and such
other principles of law generally prevailing in commerce throughout
the United States which are consistent with the provisions of the
Agreement. The arbitrators shall not under any circumstances apply
to the dispute or controversy any aspects of the Texas Deceptive
Trade Practices Act or any other such legislation which effects
significant changes in the common law of this country (such as,
eliminating the equitable doctrine of substantial performance or
imposing treble damages). Both parties agree have agreed to waive
any rights they may have to punitive damages and the arbitrators may
not under any circumstances award any punitive damages. The cost of
the arbitration of disputes as provided in this Article shall be
borne equally by both parties and the parties shall bear their own
respective attorney's fees and costs incurred in arbitration.
(8) Either party may apply to either the United States District Court for
the Northern District of Texas, Dallas Division or to the state
courts sitting in Dallas County to enforce any portion of this
arbitration agreement (as provided in 8 U.S.C. Section 3) or to enter
judgment upon the award (as provided in 8 U.S.C. Section 9). Each
party agrees that
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this arbitration agreement and the decision and the award of the
arbitrators shall be treated as an absolute and final bar to any
suit instituted in any federal, state or local court relating to
such dispute or controversy, except an action ancillary to an
arbitration pursuant hereto or to enforce or implement an
arbitration award or decree hereunder.
(9) It is agreed that during the time of the arbitration process, the
parties shall meet and endeavor, subject to the principles and
conditions stated in the preceding paragraphs, subject to the
provisions of the Federal Arbitration Act, and subject to the
Commercial Arbitration Rules of the AAA as modified herein, to
formulate a written agreement governing as many of the other aspects
of the arbitration proceeding as can be resolved or agreed upon. In
particular, the parties shall endeavor to reach agreement as to the
specific legal principles that the arbitrators shall apply to
resolve the dispute and to stipulate to as many of the facts as
possible. The parties shall also endeavor to frame as narrowly as
possible the issues in the dispute or controversy which are to be
submitted to the arbitrators for resolution. It is the intent of
the parties that the narrowly framed issues shall be submitted in
such a fashion that the arbitrators can answer the issues
affirmatively or negatively or fill in blanks without assigning
reasons for the decision.
E-5
SCHEDULE 1
EAB ENTITIES OR ANY OTHER ENTITIES
