EXHIBIT 10.4
TRADEMARK LICENSE AGREEMENT
AGREEMENT entered into as of May 1, 1996, by and between White Consolidated
Industries, Inc., a Delaware Corporation, having its principal office at 00000
Xxxxx Xxxx, Xxxxxxxxx, Xxxx 00000 ("Licensor"), and Newtech, Inc., a Florida
Corporation, having its principal office at 00000 X.X. 00xx Xxxxxx, Xxxxx,
Xxxxxxx 00000 (hereinafter referred to as "Licensee").
WHEREAS, Licensor is the owner of the trademark White-Westinghouse and
associated designs and trade dress, (together, the "Trademark"), and is using
the Trademark throughout the World, and
WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use the Trademark, and
WHEREAS, Licensee is in the business of manufacturing, distributing and selling
articles described and specified hereinafter (the "Products"), and desires to
secure the license, right and permission to use the Trademark upon, and in
connection with, the manufacturing, distributing and selling of such Products;,
and
WHEREAS, the Products that are the subject of this Agreement have been defined
by the parties as consumer audio and video products and telephones and related
products listed on Exhibit A hereto (and any other articles which the parties
mutually agree to be subject to the provisions of this Agreement which, in
accordance with the terms of this Agreement, bear the Trademark (collectively,
the "Trademarked Product").
WHEREAS, Licensor desires to grant to Licensee, and Licensee desires to accept
from Licensor, a license to use the Trademark in the design, manufacture,
advertising, sale and promotion of the Products, subject to each of the terms,
provisions and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
convenants and provisions contained herein, the parties hereto do hereby agree
as follows:
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ARTICLE 1
GRANT OF LICENSE AND DESIGNATION OF TRADEMARKED PRODUCT
Effective upon the execution of this Agreement, Licensor hereby grants to
Licensee, for the period hereinafter specified and upon the terms, provisions
and conditions of this Agreement, the exclusive right and license to use the
Trademark within the geographic area described in Article 2 hereof, in the
design, manufacture, advertising, sale and promotion of the Trademarked Product.
Licensor recognizes that Licensee's affiliate Newtech(HK), Ltd., a Hong Kong
corporation having its principal offices located at Room 000, Xxxxxxxx Xxxxx,
000 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx, may from time to time ship Trademarked
Product directly to Licensee's customers.
In the event of any disputes between the parties to this Agreement regarding the
definition of Trademarked Product, the final decision regarding such definition
shall rest in Licensor's sole and absolute discretion. The rights granted to
Licensee herein are limited to use on or in connection with the Trademarked
Product and Licensee specifically agrees not to use the Trademark in any manner
or on any product, service or item, except as set forth in the Agreement.
ARTICLE 2
GEOGRAPHIC AREA
The rights granted to Licensee hereunder may be exercised by Licensee within the
USA and Canada (the ''Territory''), and Licensee shall have exclusive rights
with respect to the Trademarked Product. Upon Licensee's request, Licensor may,
in its discretion, extend the areas in which Licensee may exercise said rights,
but any such extension shall, in each instance, be evidenced by a written and
duly executed amendment to this Agreement for such periods and upon such terms
and conditions as shall be determined by Licensor. From time to time Licensor
may wish to purchase Trademarked Product for sale outside the Territory.
Licensee agrees to sell Trademarked Product to Licensor at the same price
Licensee sells Trademarked Product to its best customer.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LICENSOR
3.1 Organization and Power. Licensor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Licensor
has all corporate power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
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3.2 AUTHORIZATION. The execution, delivery and performance by Licensor of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on this part of Licensor is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.
3.3 NO VIOLATION. Licensor is not subject to nor obligated under its certificate
of incorporation or bylaws, any applicable law, rule or regulation of any
governmental authority, or any agreement, instrument, license or permit, or
subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.
3.4 OWNERSHIP OF TRADEMARK. Licensor is the owner of the Trademark and, to
Licensor's knowledge, the use of the Trademark in the design, manufacture,
advertising, sale and promotion of any of the Trademarked Product will not
infringe any intellectual property or any other rights of any third party.
3.5 RIGHT TO GRANT LICENSE. Licensor has the full right, power and authority to
grant the license as set forth in Article 1 hereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LICENSEE
4.1 ORGANIZATION AND POWER. Licensee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Licensee
has all corporate power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
4.2 AUTHORIZATION. The execution, delivery and performance by Licensee of this
Agreement and the consummation of the transaction contemplated hereby has been
duly and validly authorized by all requisite corporate action, and no other
corporate act or proceeding on this part of Licensee is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby.
4.3 NO VIOLATION. Licensee is not subject to nor obligated under its certificate
of incorporation or bylaws, any applicable law, rule or regulation of any
governmental authority, or any agreement, instrument, license or permit, or
subject to any order, writ, injunction or decree, which would be breached or
violated by its execution, delivery or performance of this Agreement.
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ARTICLE 5
TERM OF AGREEMENT
5.1 CONTRACT TERM. The Contract Term of this Agreement commence of the date
first mentioned above and ending on December 31, 1998 at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement.
5.2 EXTENSION TERMS. Licensor hereby grants to Licensee the option to extend the
term of this Agreement for up to fourteen (14) one (1) year periods commencing
as of January 1, 1999 and ending on December 31, 2012, at midnight Eastern
Standard Time, unless sooner terminated pursuant to the terms of this Agreement
with such extended terms to be subject to the same terms and must achieve
specified levels of Minimum Sales during the then preceding Contract or
Extension Term of this Agreement as set forth in Article 8 hereof. Such options
to extend the term of this Agreement must be exercised by Licensee, if at all,
by giving written notice to Licensor at least one hundred and twenty (120) days
prior to the expiration of the then preceding Contract Term of this Agreement.
Nine months (270 days) prior to the end of the fourteenth extension, the parties
will negotiate, in good faith, the possibility of extending this Agreement for
one or more extension periods. Either party may terminate this Agreement without
cause, provided however, that such termination shall not be permitted within the
first 5 (five) years following the Effective Date of this Agreement. Notice of
termination must be given in writing to the other Party hereto 1 (one) year
prior to the termination date. Licensee shall have the right to sell off
inventory of Trademarked Product in accordance with Article 21. Neither Licensor
nor Licensee shall be liable for any compensation or damages by reason of such
early termination.
ARTICLE 6
ROYALTIES
6.1 EARNED ROYALTIES. Subject to of Article 7 hereof, Licensee shall pay to
Licensor for the rights granted hereunder a sum equal to the following
percentage of the Net Invoice Value of Trademarked Products Sold by Licensee
(the "Royalties").:
Audio & Telephone Products: [*****]
Video Products: [*****]
The Royalties shall be remitted in accordance with Section 7.4 of this
Agreement.
6.2 DEFINITION OF NET INVOICE VALUE. As used throughout this Agreement, the term
"Net Invoice Value" shall mean the aggregate of the invoiced amounts of
Trademarked Product sold by Licensee, less (a) returned goods, refunds, credits
and allowances actually made or allowed to customer with respect to Trademarked
Product, (b) freight or handling charges charged to customers or incurred on
returned goods, and (c) sales and excise taxes actually paid ("NIV").
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
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ARTICLE 7
MINIMUM ROYALTY PAYMENTS
7.1 MINIMUM ROYALTY PAYMENTS. The Minimum Royalties for the Contract Term shall
be paid two hundred fifty thousand dollars ($250,000) in advance on execution of
this Agreement and the balance in four (4) equal installments of $51,250 each by
the 30th day of March, June, September and December 1998. The Minimum Royalties
for each Extension Term as shown below shall be paid in four (4) equal
installments each by the 30th day of March, June, September and December of the
respective term.
Term Year(s) Minimum
Contract Royalties
Term 1997/1998 $ 455,000
First Extension Term 1999 525,000
Second Extension Term 2000 620,000
Third Extension Term 2001 763,000
Fourth Extension Term 2002 945,000
Fifth Extension Term 2003 998,000
Sixth Extension Term 2004 1,057,000
Seventh Extension Term 2005 1,113,000
Eighth Extension Term 2006 1,173,000
Ninth Extension Term 2007 1,232,000
Tenth Extension Term 2008 1,288,000
Eleventh Extension Term 2009 1,348,000
Twelfth Extension Term 2010 1,407,000
Thirteenth Extension Term 2011 1,467,000
Fourteenth Extension Term 2012 1,526,000
7.2 INITIAL ROYALTY PAYMENT. Licensee shall pay Licensor an initial royalty
payment (the "initial Royalty Payment") of [*****] upon execution of this
Agreement. The Initial Royalty Payment shall be applied against the first
Royalties payable pursuant to Section 7.4 of this Agreement.
7.3 APPLICATION OF EARNED ROYALTIES. The Earned Royalties to be paid under
Article 6 shall be applied against the Minimum Royalties due under this Article
7, and Licensee shall pay by each due date specified in this Article 7 the sum
of: (i) the Minimum Royalties as specified above; plus (ii) the excess, if any,
of the Earned Royalties (per Article 6) over the Minimum Royalties for the then
current quarter payable by such due date (such sum hereinafter referred to as
the "Royalty Payment").
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
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7.4 QUARTERLY REPORTS OF SALES AND ROYALTY PAYMENTS. On or before the twentieth
(20th) day of each January, April, July and October during the Contract Term and
any Extension Term, Licensee shall deliver to Licensor the following: (i) a
written statement, certified to be true and correct by the Chief Financial
Officer of Licensee, setting forth the Gross an NIV sales for each Trademarked
Product during the preceding calendar quarter and a calculation of the Royalties
payable under Article 6 and 7 of this Agreement for such period, and (ii) a
check payable to Licensor in full payment of the amount due under Article 6 and
7 of this Agreement for such period. Each royalty payment, payable in US
currency, shall be remitted by check at Licensor's address as provide by this
Agreement.
ARTICLE 8
MINIMUM SALES OF TRADEMARKED PRODUCT
8.1 FAILURE TO MEET REQUIRED MINIMUM SALES. Licensee shall use its best efforts
to advertise and sell Trademarked Product in the Territory during the term of
this Agreement. Should Licensee fail to achieve the NIV sales over any two
consecutive terms as set forth below in this Article 8 then Licensor may, at its
option, elect to terminate this Agreement by written notice delivered to
Licensee with sixty (60) days after the end of any period in which Licensee
failed to achieve such required Minimum Sales. Such termination shall be
effective upon delivery of said notice but shall not affect Licensee's
outstanding indebtedness to Licensor or any of the provisions relating thereto.
Contract Term [*****]
First Extension Term [*****]
Second Extension Term [*****]
Third Extension Term [*****]
Fourth Extension Term [*****]
Fifth Extension Term [*****]
Sixth Extension Term [*****]
Seventh Extension Term [*****]
Eight Extension Term [*****]
Ninth Extension Term [*****]
Tenth Extension Term [*****]
Eleventh Extension Term [*****]
Twelfth Extension Term [*****]
Thirteenth Extension Term [*****]
Fourteenth Extension Term [*****]
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
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ARTICLE 9
ADVERTISING AND ART WORK
9.1 ADVANCE SUBMISSION. Licensee shall submit to Licensor for approval all
advertising and promotional items, budgets, programs and materials relating to
the Trademarked Product at least fourteen (14) days prior to intended usage.
Licensor shall provide Licensee with written approval or disapproval within ten
(10) business days after Licensor's receipt thereof. Should Licensor disapprove,
its written notice shall explain in detail the reasons for disapproval so that
Licensee may prepare and submit new advertising and art work.
9.2 ART WORK. Licensor shall make available to Licensee any and all necessary
film, photostats, artwork and full color reproductions of its Trademark,
artwork, designs and other materials necessary for Licensee's use in accordance
with this Agreement.
9.3 EXPENSE REIMBURSEMENT. Licensee shall reimburse Licensor for Licensor's
out-of- pocket expenses, including, reasonable hourly charges for creative
personnel incurred by Licensor in the preparation for Licensee, when and if
required, of new artwork, mechanicals, and film. All charges shall be agreed to
prior to the time such expenses are incurred, and all sums due to Licensor under
this Article 9 shall paid by Licensee upon receipt of an appropriate invoice.
ARTICLE 10
LICENSEE'S RECORDS
Licensee shall keep and maintain at its regular place of business separate and
complete books and records of all business transacted by Licensee in connection
with the Trademarked Product, including, but not limited to, books and records
relating to Gross and NIV of Sales and orders for Trademarked Product. Such
books and records shall be maintained in accordance with generally accepted
accounting procedures and principles consistently applied. Licensor or its duly
authorized agents or representatives shall have the right to inspect said books
and records at Licensee's premises during Licensee's regular business hours.
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ARTICLE 11
LICENSEE'S ANNUAL REPORTS AND ANNUAL ROYALTY PAYMENTS
On or before the fifteenth (15th) day of the second (2nd) month following the
end of Licensee's fiscal year, Licensee shall render to Licensor a statement
certified by Licensee's Chief Financial Officer disclosing gross and NIV Value
of sales, Royalties due and Royalties paid for Licensee's preceding fiscal year,
and for any Contract or Extension Term which ended within said fiscal year. If
said statement discloses that the amount of Royalties paid during any period to
which said statement relates was less than the amount required to be paid under
the provisions of this Agreement, Licensee shall pay said deficiency concurrent
with the delivery of the statement. If said statement discloses the Licensee has
paid Royalties in excess of the amounts required to be paid, Licensor shall
apply said excess to the next Royalty payment.
ARTICLE 12
AUDIT BY LICENSOR
At all times during the existence of this Agreement and for twelve (12) months
after the last report is rendered hereunder, Licensor, if it so chooses, may
cause its independent accountants to audit all books and records of Licensee
pertaining Trademark Product. Licensor shall have the further right to engage an
independent certified public accounting firm, to audit the books and records of
Licensee with regards to the Royalties due hereunder. In the event any such
audit shall disclose that the Licensee has understated NIV Sales or underpaid
Royalties for any reporting period, Licensee shall forthwith and upon written
demand of Licensor, pay the amount, if any, by which the Royalties owing exceed
Royalties paid, plus interest of twelve percent (12%) per annum on such
delinquent amounts, accruing from the date on which such amounts became
delinquent to the date on which such delinquent amounts were paid. In the event
that Licensee has understated NIV Sales and consequently has underpaid Royalties
in excess of One Thousand dollars ($1,000) of amount due for any Contract Term,
Licensee shall forthwith and upon written demand also pay ail costs, fees and
expenses incurred by Licensor in conducting such audit, including, without
limitation, reasonable travel expenses. Should such audit disclose that the
Royalties paid exceed the Royalties due, any excess revealed by such audit will
be remitted to Licensee.
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ARTICLE 13
LICENSEE OBLIGATIONS
13.1 LICENSEE DILIGENCE. Licensee shall design, manufacture, advertise, sell and
ship the Trademarked Product and shall continuously and diligently during the
term hereof procure and maintain facilities and trained personnel sufficient and
adequate to accomplish the foregoing, all to the extent and in a manner no less
thorough, diligent and professional than the same accorded by Licensee for
Licensee's most favored premium products and/or services. A cessation of the
above for a continuous period of ninety (90) days shall be grounds for
termination by Licensor, without notice. The marketing of Trademarked Product
shall be conducted in a manner consistent with enhancing the long-term value of
the Trademark. It is the interest of the parties that Trademarked Product be
sold simultaneously through a wide range of retailers. Accordingly, Licensee
shall continuously and diligently design, price and promote Trademarked Product
to retailers in all major classes of trade including department stores (i.e.,
Macy's, Burdine's, Bloomingidale's, etc.), mass merchants (i.e., Walmart, Kmart,
etc.), regional discounters (i.e., Caldor, Bradlees, etc.), warehouse clubs
(i.e., Target, Sam's, etc.), specialty electronics chains (i.e., The Wiz, etc.),
mail order, premium and television shopping services. Licensee shall exhibit
Trademarked Product in exhibit or booth space at the annual electronics show.
13.2 LICENSOR INSPECTION RIGHTS. Licensor shall have the right to inspect any of
Licensee's facilities pertaining to the Trademarked Product during regular
business hours. Licensor shall conduct such inspection in the presence of an
officer, partner or authorized representative of Licensee.
13.3 NO COMPETITION WITH TRADEMARKED PRODUCT. During the term of this Agreement,
Licensee shall not enter another license Agreement for products that would
directly compete with the Trademarked Product.
13.4 FORFEITURE OF CATEGORIES OF TRADEMARK PRODUCT FOR NON-USE. Licensee's
failure to introduce for sale, by the commencement of the First Extension term,
Trademarked Product in any of the eleven (11) categories listed on Exhibit A
shall be deemed a forfeiture of its grant to use the Trademark in that
category(ies) of Trademarked Product. Failure of Licensee to ship Trademarked
Product in any of eleven categories of Trademarked Product for a period of one
(1) year shall be deemed a forfeiture of its grant to use the Trademark in those
categories of Trademark Product.
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13.5 FINANCIAL STANDARDS. Licensee shall provide its financial statements to
Licensor annually or as requested by Licensor, which are to be prepared in
accordance with U.S. GAAP. Licensee must promptly notify Licensor of a
termination of any significant line of credit or guarantee of indebtedness by
personal guarantor. Should Licensee's net worth fall below $2,000,000 in the
aggregate, Licensor may at its option terminate this Agreement. Likewise
Licensor may terminate this Agreement immediately if any of the following events
occur:
1) Licensee is in default under the provisions of any line of credit or
debt agreement with financing institution.
2) A sale or transfer of Licensee's assets which, in Licensor's opinion,
may affect the ability of Licensee to operate the business pursuant to
this Agreement, or
3) Licensee incurs net operating losses in the aggregate for three or more
consecutive years.
ARTICLE 14
APPROVALS AND QUALITY STANDARDS
14.1 ADVANCE APPROVAL. Prior to any use of any Trademark, Licensee shall, at
Licensee's expense, submit to Licensor, for Licensor's written approval, the
following: (a) two (2) specimens of each Product on which the Trademark is to
appear (the "Specimens"); (b) all artwork which Licensee intends to use in
connection with the Trademark; and (c) all packaging, advertising and
promotional literature which Licensee intends to use in the marketing or
merchandising of the Trademarked Product. Licensor shall give Licensee written
notice of approval or disapproval within ten (10) business days from its receipt
of the Specimens, and should Licensor disapprove, its written notice shall
explain in detail the reasons for disapproval so that Licensee may prepare and
submit new Specimens and/or samples.
14.2 STANDARDS. After Licensor has given its written approval of said Specimens,
then the approved product, quality, packaging, advertising and promotional
literature shall be the standard for all Trademarked Product produced thereafter
(the "Approved Quality").
14.3 PERIODIC SAMPLES. Thereafter, consecutively at four (4) month intervals,
Licensee shall, at Licensee's expense, submit to Licensor not less than two (2)
randomly selected production run samples of the Trademarked Product.
14.4 APPROVED QUALITY STANDARDS. Without the prior written approval of Licensor,
Licensee shall not sell or distribute any Trademarked Product which deviates
from the Approved
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Quality more than the deviation which would occur as a result of normal
deviations in raw material characteristics.
14.5 PRODUCT SERVICING AND REPAIRS. Licensee will propose, prior to the sale of
Trademarked Product at retail, a mechanism by which Licensee will respond to
inquiries from consumers and third party appliance repair vendors regarding the
operation of Trademarked Product and the procedures for obtaining parts for, or
repairs to, Trademarked Product, which mechanism shall be designed to minimize
any confusion with Licensor's existing customer service operations, or the
existing customer service operation of other Licensees of the Trademark.
14.6 PERIODIC REVIEW MEETINGS. Licensee will conduct periodic meetings with
Licensor to review Licensee's progress and performance under the terms of this
Agreement.
ARTICLE 15
RESTRICTIONS UPON SUBCONTRACTS
Licensee is responsible for the work of any subcontractor and for any debts,
obligations or liabilities incurred by any such subcontractor in connection with
the Trademarked Product. Licensee shall discontinue using any subcontractor who
shall fail to comply with the Approved Quality standards and/or delivery
schedules required by Licensee or Licensor.
ARTICLE 16
ASSIGNMENT; TRANSFERS; SUBLICENSE
The parties hereby acknowledge the substantial personal service nature of
Licensee's obligations hereunder. Therefore, without the prior written consent
of Licensor, which consent will not be unreasonably be withheld, Licensee shall
not voluntarily or by operation of law assign or transfer this Agreement or any
of Licensee's rights or duties hereunder or any interest of Licensee herein, nor
shall Licensee enter into any sublicense for the use of the Trademark by others.
Any assignment, transfer or sub-license without Licensor's written consent shall
be void and at the option of the Licensor shall constitute a default hereunder.
For purposes of this Article 16, the failure of Windmere Corporation, a Florida
Corporation, having its principal offices at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxx, 00000, and Xxxx Xxxxxx, President of Newtech (Licensee) to
maintain ownership of at least 51% of the outstanding voting stock of Licensee
shall be deemed an attempted assignment of this Agreement, unless Licensee has
made a public offering of its voting stock in which case Newtech and Windmere
need not retain 51% of the voting stock.
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ARTICLE 17
NO DILUTION OF TRADEMARK OR ATTACK UPON TRADEMARK
17.1 LIMIT ON USE. Licensee shall not at any time use, promote, advertise,
display or otherwise publish any Trademark or any material utilizing or
reproducing any Trademark in whole or in part, except as specifically provided
in this Agreement, without the prior written consent of Licensor, which consent
shall not be unreasonably withheld.
17.2 NOTICE. Licensee shall cause to appear on all Trademarked Product and on
all materials on, or in connection with which any Trademark is used, such
legends, markings and notices as may be required by law to give appropriate
notice of all Trademark, trade name or other rights therein or pertaining
thereto.
17.3 MATERIALS AND DOCUMENTS. Licensee shall provide all materials and execute
all documents required by law incident to the maintenance and/or preservation of
the Trademark and Licensor's rights therein.
17.4 NO CONTEST OF TRADEMARK VALIDITY. Licensee shall not contest the validity
of the Trademark or any rights of Licensor therein, nor shall Licensee willingly
become an adverse party in litigation in which others shall contest the
Trademark or Licensor's said rights. In addition thereto, Licensee shall not in
any way seek to avoid its obligations hereunder because of the assertion or
allegation by any persons, entities or government agencies, bureaus, or
instrumentalities that any Trademark is invalid or ineffective or by reason of
any contest concerning the rights of Licensor therein.
17.5 NO OTHER TRADEMARK PROTECTION. Licensee agrees not to seek any state,
Federal, foreign or other statutory trademark or service xxxx or other
protection for the Trademark as they are used in connection with the Licensee's
goods or services and all use of the Trademark shall be for the sole benefit of
the Licensor.
ARTICLE 18
INFRINGEMENT AND OTHER TRADEMARK LITIGATION
18.1 TRADEMARK DEFENSE. Licensee shall apprise Licensor immediately upon
discovery of any possible infringement of the Trademark which comes to the
attention of the Licensee. Licensor, at its sole cost and expense, and in its
own name, may prosecute and defend any action or proceeding which Licensor deems
necessary or desirable to protect the Trademark, including but not limited to
actions or proceedings involving their infringement. Upon written request by
Licensor, Licensee shall join Licensor at Licensor's sole expense in any such
action or proceeding. However, Licensee shall not commence any action or
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proceeding to protect the Trademark or any action or proceeding alleging
infringement thereof without the prior written consent of Licensor. Licensee may
prosecute and defend, at its sole expense and in its own name, any action or
proceeding to protect its designs or styles. Any and all damages recovered in
any action or proceeding commenced by Licensor shall belong solely and
exclusively to Licensor.
18.2 NO LIABILITY FOR VIOLATION. Licensor shall have no liability to Licensee or
any other person, nor shall be there by any right of contribution against
Licensor therefore, for any action or proceeding alleging any violation of any
antitrust, trade regulation, or similar statute, or for unfair competition.
Furthermore, in the event of any threatened or actual action or proceeding in
which Licensee and Licensor are or may be charged with jointly violating any
antitrust, trade regulation or similar statute, or any law pertaining to unfair
competition, Licensee may, at its option, elect to be represented in such
threatened or actual action or proceeding by Licensor's counsel at no cost to
Licensee for fees, costs or expenses. Should Licensee elect in such event to be
represented by Licensor's counsel, then Licensee shall relinquish any right to
control or direct such threatened or actual action or proceeding, and Licensor
shall maintain full control thereof. Such representation of Licensee shall
continue only so long as Licensor's counsel, in its sole and absolute
discretion, believes that it may properly and ethically represent both Licensor
and Licensee. In the event that Licensor's counsel decides that it may no longer
properly and ethically represent both Licensor and Licensee, then Licensor's
counsel shall continue to represent Licensor only, and Licensee's continued
defense shall be at Licensee's sole expense and shall be conducted by separate
counsel.
ARTICLE 19
ADDITIONAL RESTRICTIONS UPON USE OF TRADEMARK
19.1 IDENTIFICATION OF TRADEMARKED PRODUCT. It is the intention of the parties
hereto and the purpose of this Article 19 that all of the Trademark Product be
identified to the general public by the Trademark. Licensee shall use a
registration indicator in the form of a circled-R or "TM" symbol in conjunction
with the Trademark when so instructed by the Licensor. Licensee further agrees
to assist Licensor in obtaining registrations for the Trademark in the event any
Trademark is not yet registered for the Trademark Product. Licensee shall use
notice language in the manufacture, sale, advertising or other promotion of the
Trademarked Product as follows: "White-Westinghouse is a registered Trademark of
White Consolidated Industries, Inc. and is used under license." or other such
language as Licensor designates in writing.
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ARTICLE 20
DEFAULTS BY LICENSEE
20.1 DEFAULTS. Except as otherwise expressly provided in this Agreement, in the
event Licensee shall default in the performance of any of the terms, conditions
or obligations to be performed by Licensee hereunder, and if such default
involves the payment of money and same shall not be cured within ten (10) days
after Licensor gives written notice to Licensee of such default, or if such
default involves performance other than the payment of money and the same is not
cured within fifteen (15) days after Licensor gives written notice to Licensee
of such default, then and in any such event, Licensor may immediately and
without prior notice terminate this Agreement and all of the rights and
obligations hereunder (except as otherwise expressly provided by this
Agreement). In the event that a Receiver is appointed to, or one or more
creditors take possession of all, or substantially all, of the assets of the
Licensee, or if Licensee shall make a general assignment for the benefit of
creditors, or if any action is taken or suffered by Licensee under any state or
Federal insolvency or bankruptcy act, then this Agreement and all of the rights
and obligations hereunder (except as otherwise expressly provided by this
Agreement) shall immediately, and without notice or need of any further action
by any party hereto, terminate.
20.2 TIME FOR PERFORMANCE. The time for performance of any act required of
either party shall be extended by a period equal to the period during which such
party was reasonably prevented from performance by fire, flood, storm, or other
like casualty beyond such party's control.
ARTICLE 21
LICENSOR'S RIGHTS TO DESIGNS, ETC., UPON TERMINATION
21.1 RIGHTS UPON TERMINATION. In the event this Agreement is terminated for any
reason, or expires according to its terms, Licensee shall assign, transfer and
transmit to Licensor any and ail rights of Licensee in the Trademark, including
associated goodwill, and shall not thereafter manufacture, sell or use the
Trademark in any manner; provided that, Licensee may however, dispose of its
stock of Trademarked Product on hand within [*****] after the termination of
this Agreement; provided, however, all sums due to Licensor have first been
paid; and, further provided, that Licensee shall, prior to the effective date of
said termination, deliver to Licensor a detailed schedule of all inventory of
Trademarked Product in Licensee's possession (constructive or otherwise). After
the expiration of the aforesaid [*****] period, Licensee shall destroy all
Trademarked Product and packaging and promotional material remaining in
Licensee's possession which are identified in any manner by or with the
Trademark. Notwithstanding the above, Licensor shall have the right to purchase
such excess stock of Trademarked Product, in whole or in part, prior to any sale
or offer
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
Page 15--
of sale by Licensee to any third party, for an amount equal to the wholesale
cost of such Trademarked Product. It is specifically understood and agreed that
the Licensee's right to dispose of stock shall be conditioned upon the absence
of harm to the Trademark and/or the reputation of the Licensor arising from the
Licensee's use of the Trademark, as determined by the Licensor in its sole
discretion.
21.2 CONTINUATION OF AGREEMENT TERMS. Licensee shall continue to abide by the
terms of this Agreement with respect to such Trademarked Product during the
period in which disposition pursuant to Article 21.1 of this Agreement is taking
place. Neither Licensee nor any creditor (judgment or otherwise), assignee,
transferee, trustee, or receiver of Licensee, or similar person or officer, or
purchaser other than in the regular course of Licensee's business may sell or
transfer any Trademark Product until and unless all sums due Licensor from
Licensee have been paid. Further, upon termination of this Agreement, all
labels, signs, packages, wrappers, cartons, circulars, advertisements, and other
items bearing or containing any reproduction or representation of any of the
Trademark shall automatically and without cost to Licensor become the property
of Licensor, and Licensee shall immediately deliver the same to Licensor's place
of business or other location designated by Licensor. The reasonable cost of
such delivery shall be paid by the Licensor.
21.3 LICENSEE'S OBLIGATIONS. The termination of this Agreement for any reason
shall not relieve Licensee of any accrued obligations to Licensor nor shall such
action relieve Licensee of any obligation or duty which accrued on or after the
termination or expiration of this Agreement.
21.4 NO RIGHT IN LICENSEE. Except for the right to use the Trademark as
specifically provided for in this Agreement, (i) Licensee shall have no right,
title or interest in or to the Trademark, and (ii) upon and after the
termination of this Agreement, all rights granted to Licensee hereunder,
together with any interest in and to the Trademark that Licensee may acquire,
shall forthwith and without further act or instrument be assigned to and revert
to the Licensor. In addition, Licensee shall execute any instruments requested
by Licensor to accomplish or confirm the foregoing. Any such assignment,
transfer or conveyance shall be without consideration other than the mutual
agreements contained herein.
21.5 SURVIVAL OF TERMS. The provisions of this Article 21 shall survive the
termination (or expiration) of this Agreement.
Page 16--
ARTICLE 22
ADDITIONAL RIGHTS PRIOR TO TERMINATION
During the final Contract Year of the Term hereof, Licensor shall have the right
to design and manufacture merchandise of the types covered by this Agreement and
to negotiate and conclude such Agreements as it desires pursuant to which it may
grant licenses to any party or parties of any or all of the rights herein
granted to Licensee; provided, however, that no merchandise herein identified as
Trademark Product shall be shipped by Licensor or any third party other than
Licensee prior to the expiration or termination of this Agreement (exclusive of
the additional [*****] period for the disposition of the Trademark Product as
provided in Article 21 hereof).
ARTICLE 23
GOODWILL
Licensee acknowledges and recognizes that the Trademark are of substantial
significance and value to Licensor and that said Trademark have acquired
valuable secondary meaning, value and goodwill. Except as may be otherwise
specified in this Agreement, Licensee shall not use any of the Trademark or any
name or symbol similar thereto as part of its name or symbol or as part of the
name or symbol of any corporation, partnership, joint venture, proprietorship or
other entity or person which it controls or with which it is affiliated.
ARTICLE 24
INSURANCE
Licensee shall at all times carry product liability insurance with respect to
the Trademarked Product with a limit of liability of not less than $[*****] and
Licensor shall be named therein as coinsured as its interests may appear. Such
insurance may be obtained in connection with a policy of product liability
insurance which covers products other than the Trademarked Product and shall
provide for at least thirty (30) days prior written notice to Licensor of the
cancellation or substantial modification thereof. Licensee shall deliver to
Licensor a certificate evidencing the existence of such insurance policies
promptly after their issuance.
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERICKS DENOTE SUCH OMMISSIONS.
Page 17--
ARTICLE 25
AGENTS, FINDERS AND BROKERS
Each of the parties to this Agreement shall be responsible for the payment of
any and all agent, brokerage and/or finder commissions, fees and related
expenses incurred by it in connection with this Agreement or the transactions
contemplated hereby and shall indemnify the other and hold it harmless from any
and all liability (including, without limitation, reasonable attorney's fees and
disbursements paid or incurred in connection with any such liability) for any
agent, brokerage and/or finder commissions, fees and related expenses claimed by
its agent, broker or finder, if any, in connection with this Agreement or the
transactions contemplated hereby. Licensor's sole agent/finder/broker in
connection with this Agreement is Leveraged Marketing Corporation of America
("LMCA") with offices at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any and
all commissions, fees and/or other monies due LMCA in connection with this
Agreement shall be borne exclusively by Licensor as per the Agency Agreement of
March 1, 1995.
ARTICLE 26
RESERVED RIGHTS
Rights not herein specifically granted to Licensee are reserved by Licensor and
may be used by Licensor without limitation. Any use by Licensor of such reserved
rights, including but not limited to the use or authorization of the use of any
Trademark in any manner whatsoever not inconsistent with Licensee's right
hereunder, shall not be deemed to be interference with or infringement of any of
Licensee's rights.
ARTICLE 27
APPLICABLE LAW
This Agreement shall be construed and governed, in all respects, by the law of
the State of Ohio applicable to contracts made and to be performed in that state
without reference to any provisions relating to conflicts of law. Any legal
action or proceeding of any sort against Licensor by or on behalf of Licensee,
shall be brought in a court of competent jurisdiction in Cuyahoga County, Ohio.
Page 18--
ARTICLE 28
NON-AGENCY OF PARTIES
This Agreement does not constitute or appoint Licensee as the agent or legal
representative of Licensor, or Licensor as the agent or legal representative of
Licensee, for any purpose whatsoever. Licensee is not granted any right or
authority to assume or to create any obligation or responsibility, express or
implied, on behalf of or in the name of, Licensor or to bind Licensor in any
manner or thing whatsoever; nor is Licensor granted any right or authority to
assume or create any obligation or responsibility, express or implied, on behalf
of or in the name of Licensee, or to bind Licensee in any manner or thing
whatsoever. No joint venture or partnership between the parties hereto is
intended or shall be inferred.
ARTICLE 29
AMENDMENTS AND WAIVERS BY LICENSOR
This Agreement may be amended or modified by Licensorj and Licensor may waive
any of its rights hereunder or performance by Licensee of any of its obligations
hereunder, only by instrument in writing. In the event Licensor shall at any
time waive any of its rights under this Agreement or the performance by Licensee
of any of its obligations hereunder, such waiver shall not be construed as a
continuing waiver of the same rights or obligations, or a waiver of any other
rights or obligations.
ARTICLE 30
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties as to the
Trademark Products, and supersedes all prior agreements and understandings
relating to this subject matter hereof.
Page 19--
ARTICLE 31
SEPARABILITY OF PROVISIONS
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully
severable. The Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid or enforceable.
ARTICLE 32
COUNTERPARTS; HEADINGS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. The headings herein are set out for convenience of reference only
and shall not be deemed a part of this Agreement.
ARTICLE 33
BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and, subject to the provisions of Article 16 of this Agreement,
their respective permitted successors and assigns.
Page 20--
ARTICLE 34
INDEMNIFICATION BY LICENSEE
34.1 INDEMNIFIED PARTIES; Basic Indemnification. For purposes of this paragraph,
"Indemnified Parties" refers to Licensor, and other licensees (not including
Licensee) of rights relating to the Trademark, and officers, directors,
employees, and agents of each of the foregoing, and persons connected with or
employed by them and each of them. Licensee hereby agrees that it shall
indemnify and hold harmless the Indemnified Parties and each of them from and
against the costs and expenses (including, without limitation, reasonable
attorneys fees and costs) of any and all claims, suits, losses, damages, costs,
demands, obligations, investigations, causes of action, and judgments arising
out of:
(a) the actual or alleged unauthorized use in connection with, or arising out
of, a Trademarked Product of any trademark (including, without limitation, the
Trademark), patent, process, method or device; (b) the actual or alleged
infringement in such connection of any copyrights, trade name or patent or any
act held to constitute libel, slander or defamation; (c) the invasion by
Licensee of the right of privacy, publicity, or other property right; (d) the
failure to perform of, or any defect in, or use of, the Trademarked Product,
including without limitation any injuries to the person or to property arising
therefrom; (e) the infringement or breach of other personal or property right of
any person, firm or corporation by Licensee, its officers, employees, agents, or
anyone directly or indirectly acting by, through, on behalf of, or pursuant to
contractual or any other relationship with Licensee; and (f) Licensee's sales
and/or promotional efforts.
34.2 INDEMNIFICATION FOR BREACH. Licensee hereby further agrees that it shall
indemnify and forever hold harmless the Indemnified Parties against and from any
and all claims, suits, losses, damages, costs, obligations, liabilities,
judgments, damages and expenses, including without limitation, reasonable
attorneys' fees arising out of breach or alleged breach by Licensee of any
provision of this Agreement, or any misrepresentation made by Licensee herein or
any act not expressly authorized herein. Licensee further agrees to insulate the
Indemnified Parties from any and ail product liability claims arising from the
use or misuse of the Trademarked Product.
34.3 SURVIVAL OF TERMS. The provisions of this Article 34 shall survive the
termination (or expiration) of this Agreement.
Page 21-- -
ARTICLE 35
INFORMATION
35.1 CONFIDENTIALITY. Licensor and Licensee may from time to time disclose to
each other sales, engineering, applications, drawing, designs and any other
knowledge, information, techniques, know-how or data pertaining to the
manufacture, use, application, marketing, distribution and sales of the
Trademarked Product or other products of Licensor or Licensee (the
"Information"). Each party hereto shall hold in confidence all such data and
information and shall not disclose such data and information except to such
personnel and employees as are necessary for the effective performance of this
Agreement or as otherwise permitted by this Agreement. Licensor and Licensee
shall cause all data, documents or other written or printed materials embodying
the Information to be plainly marked to indicate the secret and confidential
nature thereof and to prevent unauthorized access thereto, or reproduction or
use thereof. Licensor and Licensee shall take any necessary action, including
court proceedings, to comply and to compel compliance with the provisions of
this Article 35. The obligations undertaken by Licensor and Licensee pursuant to
this Article 35 shall not apply to any such data or information which is or
becomes published or otherwise generally available to the public without fault
of a party hereto or is otherwise lawfully acquired by a party hereto and such
obligations shall, as so limited, survive the expiration or termination of this
Agreement. Upon termination of this Agreement, either Party hereto may request
the prompt return of all written materials received from the other Party
including originals, copies, extractions, translations and reproductions
thereof. This Agreement is not intended to and shall not be construed to give
either Party any vested right, title or interest in the Trademarked Product or
the Information.
35.2 CONFIDENTIALITY OF TERMS OF AGREEMENT. Licensee shall not disclose to any
third party information relating to the terms and conditions of this Agreement,
including royalty rates, the amounts of minimum NIV Sales or minimum royalties
or the amount of the initial royalty payment pursuant to this Agreement.
35.3 SURVIVAL OF TERMS. The provisions of this Article 35 shall survive the
termination of this Agreement.
ARTICLE 36
PUBLIC ANNOUNCEMENTS
36.1 Unless expressly approved in advance in writing by the other party, neither
shall make any public announcement regarding the subject matter or existence of
this Agreement except as required by law. If such announcement is required by
law, the announcing party
Page 22--
shall give the other party reasonable notice of such announcement and shall
consult with the other party regarding the announcement.
36.2 IMMEDIATE DISCLOSURE OF PUBLIC ANNOUNCEMENTS. Licensee shall include
Licensor, and its agent, LMCA, among its list of recipients for press releases
and all other public announcements regarding its business, and provide such
information to Licensor and its agent simultaneous to its release to any and all
media outlets or other recipients.
ARTICLE 37
ADDRESSES FOR NOTICE
All notices, statements, consents, instructions or other documents required or
authorized to be given hereunder shall be in writing, and shall be delivered
personally to an officer, partner or authorized representative of the other
party or by certified mail, return receipt requested, addressed to the parties
concerned as follows:
to Licensee Newtech, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
and to Licensor at: White Consolidated Industries, Inc.
00000 Xxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Facsimile: 000-000-0000
with copies to: Xx. Xxxxxx Xxxxxxxx, Trademark Counsel
White Consolidated Industries, Inc.
00000 Xxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Facsimile: 000-000-0000
and Xx. Xxxxx X. Xxxxxxx
Leveraged Marketing Corporation of America
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
and shall be deemed to have been given upon receipt.
Page 23--
IN WITNESS WHEREOF, this Agreement is executed on the day and year
first written above.
White Consolidated Industries, Inc. (Licensor)
/s/ Xxxxxxx X. Xxxxxx
---------------------
By: Xxxxxxx X. Xxxxxx
Assistant Secretary
Newtech, Inc. (Licensee)
/s/ Xxxx Xxxxxx
----------------
By: Xxxx Xxxxxx
President
EXHIBIT A
1. Radios
2. Phonographs
3. Tape Decks
4. CD Players
5. Compact Home Stereo Systems (exclude separate amplifiers, receivers,
tuners and speaker systems sold separately and not part of a self-contained
home theater system)
6. Telephones (excludes mobile phones, pager/beepers and other wireless
communications).
7. Telephone Answering Machines
8. Telephone Accessories (excludes facsimile machines)
9. Televisions
10. Videocassette recorders (VCR's)
11. TV/VCR Combinations
AMENDMENT 1
AGREEMENT BETWEEN NEWTECH, INC.
and
WHITE-WESTINGHOUSE COMPANY,
DIVISION OF WHITE CONSOLIDATED INDUSTRIES, INC.
DATED 1 MAY 1996
THE NAME "Newtech Corporation" is hereby amended to read NEW M-TECH
CORPORATION, having its principal place of business at 00000 X.X. 00xx Xxxxxx,
Xxxxx, Xxxxxxx 00000, as shown in the Articles of Incorporation, organized under
the Laws of the State of Florida, effective October 25, 1990.
Except as hereby amended, the Agreement entered into and effective May
1, 1996 shall remain in full force and effect.
It is hereby agreed that this Amendment shall be effective as of May 1,
1996.
Signed this 5th day of August, 1996.
NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.
/s/ Xxxx Xxxxxx Xxxxxxx X. Xxxxxx
--------------- -----------------
By: By: Xxxxxxx X. Xxxxxx
Its: Its: Assistant Secretary
AMENDMENT 2
AGREEMENT BETWEEN NEW M-TECH CORPORATION
And
WHITE CONSOLIDATED INDUSTRIES, INC.
Dated May 1, 1996
In paragraph 5.2 Extension Terms, delete the following.
"Either party may terminate this agreement without cause, provided however, at
such termination shall not be permitted within the first 5 (five) years
following the Effective Date of this Agreement Notice of termination must be
given in writing to the other Party hereto 1 (one) year prior to the termination
date. Licensee shall have the right to sell off inventory of Trademarked Product
in accordance with Article 21. Neither Licensor nor Licensee shall be liable for
any compensation or damages by reason of such early termination."
Except as hereby amended, the Agreement entered into and effective May
1, 1996 shall remain in full force and effect.
It is hereby agreed that this Amendment shad1 be effective as of May l,
1996.
Signed this 23 day of May, 1997.
NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.
/s/ Xxxx Xxxxxx Xxxxxxx X. Xxxxxx
--------------- -----------------
By: By: Xxxxxxx X. Xxxxxx
Its: Its: Assistant Secretary
AMENDMENT 3
AGREEMENT BETWEEN NEW M-TECH CORPORATION
And
WHITE CONSOLIDATED INDUSTRIES, INC.
DATED MAY 1, 1996
In Article 34 INDEMNIFICATION BY LICENSEE, insert the following new
paragraph 34.2.
34.2 LICENSEE INDEMNIFICATION PARTIES; BASIC INDEMNIFICATION. For
purposes of this Section, "Licensee Indemnification Parties" refers to Licensee
and officers, directors, employees and agents of Licensee. Licensor shall
indemnify and hold harmless the Licensee Indemnified Parties and each of them
from and against the cost and expenses (including, without limitation,
reasonable attorneys fees and costs) of any and all claims, suits, losses,
damages, costs, demands, obligations, investigations, causes of action, and
judgements arising out of any assertion or allegation by any persons, entities
of government agencies that any Trademark infringes any trademark, trade name or
any other personal or property right of a third party.
Re-number existing 34.2 as 34.3 re-number existing 34.3 as 34.4.
It is hereby agreed that this Amendment shall be effective as of May 1,
1996.
Signed this 9 day of June, 1997.
NEW M-TECH CORPORATION WHITE CONSOLIDATED INDUSTRIES, INC.
/s/ Xxxx Xxxxxx Xxxxxxx X. Xxxxxx
--------------- -----------------
By: By: Xxxxxxx X. Xxxxxx
Its: Its: Assistant Secretary
