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EXHIBIT 10.18
[XXXXX & XXXXXX LOGO]
Xxxxx & Xxxxxx(R)
February 3, 1998
Xx. Xxxxxxx Xxxxxxxxxxx, President
Canadian Security Agency
0000 Xxxx xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx
.
Dear Xxxxxxx:
This letter will serve as a Letter of Amendment to the License Agreement between
Xxxxx & Wesson and Canadian Security Agency of May, 1996.
Contingent upon the full compliance by Canadian Security Agency with the terms
and conditions of the Agreement between Xxxxx & Wesson and Canadian Security
Agency of May, 1996, that Agreement shall be renewed for a five (5) year term
beyond the expiration thereof on December 31, 2006. The forgoing modification
shall supersede all terms as to renewals or extension in the Agreement as
originally executed for the five (5) year period. The Minimum Guaranteed Royalty
for each Contract Year for said five (5) year term shall be the greater of (1)
the value set forth below:
Twelfth Contract Year $699,600
Thirteenth Contract Year $799,600
Fourteenth Contract Year $846,600
Fifteenth Contract Year $931,300
Sixteenth Contract Year $1,024,430
or, (2) an Alternative Minimum Guaranteed Royalty for each Contract Year which
equals eighty percent (80%) of the total royalties due for the preceding
Contract Year. All references to "dollars", "royalties", "taxes", "credits", as
well as any and all other monetary values set forth herein and in the May 1996
Agreement shall refer to or be computed in U.S. Dollars.
An additional (5) five year period renewal beyond Year 16 will be executed if
full compliance of all terms and conditions through Year 16 have taken place,
based on a 10% increase in Minimum Guaranteed Royalty each subsequent year, or
the Alternative Minimum Guaranteed Royalty as described above.
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Sincerely,
/s/ Xxxx Xxxxxx /s/ Xxxxxxx Xxxxxxxxxxx
------------------------------ -------------------------------------
Xxxx Xxxxxx Xxxxxxx Xxxxxxxxxxx
Director of Licensing and Merchandising President
0000 XXXXXXXXX XXXXXX, XX. BOX 2208, SPRINGFIELD, MA 01102-2208 * (000) 000-0000
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[XXXXX & XXXXXX LOGO]
Xxxxx & Xxxxxx(R)
ASSIGNMENT OF LICENSE
WHEREAS Canadian Security Agency, Inc. (the "Licensee") is the licensee under a
certain license, dated May 31, 1996, titled "Trademark License Agreement", a
copy of which is annexed hereto (the "License"), by and between the Licensee and
Xxxxx & Wesson Corp. (the "Licensor");
WHEREAS Xxxxxxx Xxxxxxxxxxx and Xxxxxxxx Xxxxxxxx, sole shareholders of the
Licensee (the "Shareholders"), have formed and incorporated International
Licensing Corporation, a Florida corporation, for the purpose of succeeding to
the rights of the Licensee, for the purpose of holding, developing and operating
the License (the Assignee"); and
WHEREAS the Assignee is controlled by the Shareholders of the Licensee and the
present directors of Licensee have voting control of the Assignee, in accordance
with the requirements of Section 18 of the Trademark License Agreement,
NOW THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Licensee, Licensor and Assignee, hereby agree to the following
assignment (the "Assignment"):
Licensee hereby assigns, transfers and conveys to Assignee all its rights and
interests under the Trademark License Agreement and the License.
This Assignment shall remain in full force and effect from October 19, 1998 for
all of the remainder of the License term, including all amendments or extensions
thereto, subject to as conditions, covenants, and terms, including payment of
royalties to Licensor.
This Assignment shall inure to be benefit of, and be binding on, the parties
hereto, their heirs, successors and assigns.
Dated this 21 day of October 1998.
Canadian Security Agency, Inc. Xxxxx & Wesson Corp.
/s/ Xxxxxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxxx
------------------------------ ------------------------------------------
By: X. Xxxxxxxx X. Xxxxxxxxx
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International Licensing Corporation
/s/ Xxxxxxx Xxxxxxxxxxx
-----------------------------------
By X. Xxxxxxxxxxx
0000 XXXXXXXXX XXXXXX, XX. BOX 2208, SPRINGFIELD, MA 01102-2208 * (000) 000-0000
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XXXXX & WESSON CORP.
TRADEMARK LICENSE AGREEMENT
This Agreement effective as of May 31, 1996, by and between XXXXX & WESSON
CORP., a Delaware Corporation with its principal office at 0000 Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000, (hereinafter called Licensor"),
and Canadian Security Agency Inc., a Corporation, having its principal office at
0000 Xxxx xx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0, (hereinafter
called "Licensee"). In consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by Licensor and Licensee, the parties agree as follows:
1. Definitions: As used in this Agreement, the following terms shall have
the following meanings:
a. "Marks" shall mean those trademarks and service marks
identified in Exhibit A, attached hereto, and all of the
Licensor's rights in such Marks including, without limitation,
common law rights, and registrations and applications for
registration of any such Marks in any state, federal or other
jurisdiction.
b. "Licensed Articles" shall mean the articles of merchandise
listed in Exhibit B, attached hereto and marked with one or
more of the Marks.
c. "Licensed Services" shall mean the services listed in Exhibits
C & D attached hereto and carried out in association with one
or more of the Marks.
d. "Net Sales Price" shall be the invoiced price at which
Licensed Articles and Licensed Services are sold or provided
by Licensee, less any sales tax, and less any credits for
returns actually made or allowances in lieu of returns,
provided that such returns and/or allowances relate to sales
which were previously included in royalty calculations under
this Agreement and less trade discounts and/or retailer
promotional programs. The Net Sales Price on account of sales,
giveaways, or other transactions, without charge or at
discounted prices, and sales to, any person directly or
indirectly related to or affiliated with Licensee shall be
computed based on regular selling prices to the trade. There
shall be no deduction from the Net Sale Price on which
royalties are due hereunder for uncollectible accounts,
advertising expenses or other expenses of any kind except
those specifically identified in this Section.
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e. "Territory" is the geographic area identified in Section 2(a)
of this Agreement.
f. "Minimum Guaranteed Royalties" shall have the meaning set
forth in Section 3(e) of this Agreement.
g. "Contract Year" and "First Contract Year" shall have the
meanings given those respective terms set forth in Section
2(c) of this Agreement.
2. Grant of License, Term, Licensee's Duties
a. Except as set forth hereinafter in paragraph F, Licensor
hereby grants to Licensee an exclusive worldwide license to
use and/or sublicense the use of the Marks in connection with
the retail sale of Licensed Articles and Services in the
private and proprietary security industry. Under this grant,
Licensee may only sublicense in strict accordance with the
provisions of this Agreement. Licensee shall not use, or
permit the use of, the Marks with any other product or for any
other services, except as specifically provided in this
Agreement. No sublicense agreement shall be concluded with any
third party without the Licensor's prior written consent,
which consent shall not be unreasonably withheld, and unless
such sub-license agrees in writing to be bound by all of the
terms and conditions of this Agreement. A copy of such written
agreement shall be provided directly to the Licensor. Licensee
shall take all steps and timely notify Licensor of all steps
as shall be necessary to protect Licensor's trademark rights
in such marks, and to assure Licensor's exclusive ownership
thereof.
b. Notwithstanding the provisions of sub-paragraph (a) above, at
any time after the expiry of the Third Contract Year, the
Licensor shall have the option to terminate this Agreement
with regard to any Licensor specified licensed product(s)
and/or licensed service(s) in a Licensor specified country,
provided it first gives the Licensee prior written notice of
One Hundred and Eighty (180) days of its intention to do so,
which termination will only become effective should the
Licensee and/or a duly appointed sub-licensee not commence to
market the specified licensed product(s) and/or licensed
service(s) in such specified country, or submit to Licensor an
acceptable business plan to market said specified licensed
product(s) and/or licensed service(s) in such specified
country prior to the expiry of such one hundred and eighty day
period.
c. The term of this Agreement shall be for ten (10) years and
seven (7) months commencing May 31, 1996 and ending December
31, 2006 at midnight, unless sooner terminated. Each period
from January 1
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through December 31 during the term hereof is hereinafter
referred to as a "Contract Year", with the exception of the
"First Contract Year", which shall be for the period from the
date hereof through December 31, 1996. This Agreement shall be
automatically extended for successive Contract Years after
termination of the initial term unless Licensor or Licensee
gives the other party written notice of its intention not to
so extend this Agreement at least one hundred eighty (180)
days one (1) year prior to the expiration date of the current
Contract Year. Moreover, the Licensee shall have the option to
terminate this Agreement during the First and Second Contract
Years, provided it gives the Licensor written notice of such
intention at least one hundred and eighty (180) days prior to
the expiration date thereof. A party's determination not to
extend this Agreement may be effected without cause.
d. Licensee shall use its best efforts to promote the sale of
Licensed Articles and Services in the Territory and shall
maintain resources and a sales force sufficient and adequate
to accomplish Licensee's obligations hereunder.
e. The articles of merchandise and services respectfully set
forth on Exhibits B, C and D are exemplary and can be modified
from time to time by written agreement of the parties without
altering the scope of the license grant or other terms of this
Agreement.
f. If Licensee shall enter into any sublicense agreement pursuant
to the authority granted in this Agreement, then
(1) Licensee shall be jointly and severally liable
with such sublicensee to indemnify Licensor in. accordance
with the terms of this Agreement (regardless of whether or not
such sublicensee is legally determined to have direct
liability to Licensor hereunder) with respect to any actions
by such sublicensee or any party acting through such
sublicensee which would give rise to an indemnification
obligation of Licensee under this Agreement were such actions
taken by Licensee itself;
(2) Licensee shall be fully liable to Licensor for
the payment of any costs and expenses which are incurred as
the result of the exercise of any rights hereunder by Licensee
or its sublicensees under this Agreement where this Agreement
provides that such costs and expenses shall be for the account
of Licensee or its sublicensees; and
(3) All Licensed Articles and Licensed Services sold,
distributed, rendered or otherwise provided under any
sublicense granted pursuant to this Agreement shall be subject
to the royalty and
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revenue provisions in this Agreement as though sold,
distributed or otherwise provided by Licensee; and Licensee
guarantees the payment of any and all royalties due to
Licensor under any sublicense, and agrees to monitor all of
its sublicensees to ensure the accurate and prompt payment of
all royalties accruing under such sublicenses.
g. Licensee acknowledges that Licensor has and continues to
develop and market products and services for the security
industry either directly or through third parties. These same
products and services are separate from this Agreement and are
not governed by its terms and conditions. No provisions of
this Agreement shall be interpreted to preclude Licensor from
continuing to develop or from continuing to make or have made
these products or from rendering or causing to be rendered
these services to the security industry.
h. Licensee shall make available to Licensor or its designated
agent(s) any Licensed Article and/or Licensed Service on the
most favorable terms and conditions offered by Licensee for
that Licensed Article and/or Licensed Service.
3. Royalties and Payment, Minimum Guaranteed Royalties, Reporting
a. Licensee shall pay Licensor a royalty equal to two and
one-half (2 1/2%) percent of the Net Sales Price of all
Licensed Articles and/or Licensed Services as set out in
Exhibits B and C sold, distributed or otherwise provided by
Licensee or any of its sub-licensees during or after the term
of this Agreement.
b. Licensee shall pay Licensor a fifty percent (50%) share of the
gross revenue derived from the provision of those Licensed
Services as set out in Exhibit D by the Licensee or any of its
sub-licensees.
c. On or before the fifteenth day of the first month of each
calendar quarter, Licensee shall furnish to Licensor full and
accurate statements, certified by the Chief Financial Officer
of Licensee, showing the number, description, total Net Sales
Prices and gross revenue of the Licensed Articles and Licensed
Services sold, distributed or otherwise provided by the
Licensee and any of its sublicensees during the preceding
calendar quarter. Licensee shall, simultaneously with such
statements, pay to Licensor the royalties and/or gross revenue
share due thereon. Licensee may credit against any such
payment any Minimum Guaranteed Royalty payment made by
Licensee contemporaneously with such quarterly statement. Any
Minimum Guaranteed Royalty paid for any Contract Year shall
not be refunded to Licensee, and may not be credited to
royalties due in any subsequent Contract Year, regardless
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of the sales of Licensed Products and Licensed Services. On or
before the first day of the fourth month following the end of
each Contract Year, Licensee shall furnish to Licensor a
statement certified by the Chief Financial Officer of Licensee
showing total sales of Licensed Articles and Licensed
Services, gross revenues therefrom as well as royalties and/or
gross revenue share due and royalties and/or gross revenue
share paid for the preceding Contract Year. If such statement
discloses that the amount of royalties and/or gross revenue
share paid during any period to which such statement relates
were less than the amount required to be paid, Licensee shall
pay such deficiency concurrently with the delivery of the
statement. The quarterly and yearly statements shall each show
in detail all calculations used in the computation of
royalties and gross revenue share.
d. For purposes of this Agreement, a Licensed Article or Service
shall be considered sold or provided when such Article or
Service has been shipped, distributed, rendered, paid for,
billed or invoiced, whichever first occurs.
e. Notwithstanding anything to the contrary set forth herein,
Licensee shall pay to Licensor minimum royalties ("Minimum
Guaranteed Royalties"), as follows for each Contract Year, or
portion thereof, included in the term of this Agreement, until
changed by mutual written agreement of the parties:
First Contract year $15,000
Second Contract year $45,000
Third Contract year $65,000
Fourth Contract year $90,000
Fifth Contract year $132,000
Sixth Contract year $171,000
Seventh Contract year $223,000
Eighth Contract year $290,000
Ninth Contract year $377,000
Tenth Contract year $489,000
Eleventh Contract year $636,000
f. For the First Contract Year, the Minimum Guaranteed Royalty
shall be payable as follows: Five Thousand Dollars ($5,000.00)
upon signing of the Agreement, Ten Thousand Dollars ($10,000)
August 31, 1996. For the Second Contract Year the Minimum
Guaranteed Royalty shall be payable as follows: Fifteen
Thousand ($15,000) March 30, 1997, August 31, 1997, November
30, 1997. Thereafter, for each Contract Year during which this
Agreement is in effect, the Minimum Guaranteed Royalty shall
be paid in four equal installments on the dates
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on which each royalty payment is due, pursuant to Section 3(c)
of this Agreement
g. Any delinquent amounts under this Agreement shall bear simple
interest at the rate of 1.5 percent per month, or if lower,
the highest rate permitted by Massachusetts law, from the due
date thereof until paid.
4. Protection of Marks
a. Licensee acknowledges Licensor's exclusive right, title and
interest in and to the Marks; both at common law and under
applicable laws in the United States and all other
jurisdictions, and will not, either directly or indirectly, at
any time, do anything to discredit, encumber or diminish any
part of such right, title or interest or challenge the
validity of this License. Licensee agrees that its use and any
use by its sublicensees of the Marks will inure entirely to
the benefit of Licensor. Licensee shall assist Licensor, to
the extent necessary or appropriate, upon request by Licensor,
in the procurement of any protection of Licensor's rights in
the Marks. Upon Licensor's request from time to time, Licensee
shall provide Licensor with six specimens of any Mark used on
Licensed Articles and Licensed Services and whatever other
documentation or information may be requested by Licensor for
the registration of any Mark in any category into which the
Licensed Articles and Licensed Services fall.
b. Licensee shall use the Marks only in the form and manner and
with appropriate legends as prescribed from time to time by
Licensor, and shall not use any other trademark or service
mark in combination with any Mark without prior written
approval of Licensor. In any written materials, such as the
packaging, advertising materials, catalogs, brochures and the
like associated with the Licensed Articles or Licensed
Services, in addition to the "(R)" symbol displayed adjacent
to the Mark, as appropriate, Licensee shall use the following
notice at least once in each such document: "Licensed
Trademark of Xxxxx & Wesson Corp."
c. Licensee recognizes that the XXXXX & XXXXXX name, all trade
dress and associated marks are world famous and that, even if
not registered in any country, the unauthorized use thereof
would seriously dilute the distinctiveness of such name, trade
dress and the associated marks and would irreparably harm the
Licensor.
d. Licensee shall immediately notify Licensor in writing of any
infringements or third party imitations of any Mark or other
act of a third party which may concern the mark(s), of which
Licensee becomes
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aware. Licensor shall have the sole right to determine whether
or not any action shall be taken on account of such
infringements or imitations. Licensee shall not institute any
suit or take any action on account of any such infringements
or imitations without first obtaining the written consent of
Licensor to do so.
e. Licensor shall undertake to apply for and obtain registration,
in its name and at its own expense, of any of the Marks in
association with the Licensed Articles and Licensed Services
in any country in which Licensee may request and as deemed by
Licensor to be necessary or appropriate to protect the Marks
and the goodwill associated therewith, provided Licensee
provides Licensor with bona fide evidence of use or intended
imminent use of such Marks in association with any of the
Licensed Articles or Licensed Services in such country.
5. Assignment of Marks
If Licensee shall acquire by act or operation of law by deed or
operation of law any rights in the marks in any country, Licensee shall
notify Licensor and immediately assign such rights to Licensor,
together with any goodwill that may have inured to the benefit of the
Licensee. Licensee shall not permit any other person to use any of the
Marks without Licensor's prior written consent, and shall cause any
sub-licensee, manufacturer or other person involved in the production,
promotion, sale or provision of Licensed Articles and Licensed Services
to agree to assign to Licensor any rights in any Mark acquired by such
sub-licensee, manufacturer or other person.
6. Indemnification
a. Licensee shall at all times, and to the fullest extent
permitted by law, indemnify and hold harmless Licensor and its
successors, assigns, franchisees, subsidiaries, affiliates,
licensing agents and distributors, and the directors,
officers, agents and employees of each of the foregoing
entities, from and against any and all damages, demands,
claims, suits, actions, investigations, charges, costs and
expenses including, without limitation, attorneys fees and
court costs, settlement amounts, judgments, compensation for
damages to Licensor's reputation and any losses of any nature
which arise out of or are based upon any of the following:
(1) Any actual or alleged design defect, manufacturing defect,
failure to warn or instruct, breach of warranty, negligence,
strict liability in tort, or any other product liability legal
theory associated with Licensed Articles and Licensed
Services;
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(2) The infringement, alleged infringement or any other
violation or alleged violation of any patent, trademark or
copyright rights or other proprietary rights owned or
controlled by third parties by reason of the manufacture, use,
advertising, sale, distribution or provision of the Licensed
Articles and Licensed Services;
(3) The violation, or alleged violation, of any federal, state
or local law, regulation, ruling, standard or directive or of
any industry standard with respect to the Licensed Articles
and Licensed Services;
(4) Licensee's breach of any warranty, representation,
agreement or obligation hereunder; or
(5) Any other acts or omissions of Licenses, or its agents,
servants or contractors with respect to the manufacture,
promotion, provision or sale of Licensed Articles and Licensed
Services.
b. Licensee shall promptly give Licensor notice of any action,
suit, proceeding, claim, demand, inquiry or investigation
relating to the Marks or Licensed Articles and Licensed
Services. Licensor may, at its sole option, elect to undertake
the defense of any such action, suit, proceeding, claim,
demand, inquiry or investigation, provided that such an
undertaking by Licensor shall not diminish Licensee's
obligation hereunder to indemnify Licensor and to hold it
harmless. Licensor may, at any time and without notice, order
or consent to a recall, the making of refunds or settlements,
or the giving of notice to consumers or similar remedies with
respect to the Licensed Articles and Licensed Services. All
losses and expenses incurred under this Section shall be
chargeable to License pursuant to its obligations to indemnity
under this Section, regardless of any actions, activity or
defense undertaken by Licensor or Licensee or the subsequent
success or failure of such actions, activity or defense.
c. Licensor assumes no liability whatsoever for the acts and
omissions of Licensee, or any of those with whom Licensee may
contract for the promotion, manufacture, distribution, sale or
provision of Licensed Articles and Licensed Services,
notwithstanding any prior consent by Licensor to such
contract.
7. Insurance
Licensee shall maintain, throughout the term of this Agreement, at its
own expense, liability insurance from an insurance company, with such
liability coverages and limits as are acceptable to Licensor with an
amount of ($5,000,000) five million dollars per occurrence, including a
contracted
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liability endorsement. Such policies shall name Licensor as an
additional insured and shall provide that Licensor shall receive at
least 30 days prior written notice of intent to cancel, alter or amend
such policy. Licensee shall provide Licensor within thirty (30) days of
the execution of this Agreement and upon Licensor's request from time
to time thereafter, with certificates or other evidence of insurance
required by this Section. Licensee shall keep all insurance coverages
required by this Agreement in full force and effect for a period of
three years after the termination of this Agreement.
8. Quality of Licensed Articles
a. Licensee agrees, represents and warrants to Licensor, that all
Licensed Articles and Services shall be state-of-the-art, of
high safety and structural standards, of such style,
appearance, quality and consistency as shall be suitable for
distribution and satisfactory for consumer usage, and
otherwise merchantable and fit for the purposes for which they
are intended to be used. At least 30 days before manufacturing
or promoting, and again before distributing, selling or
providing any Licensed Article or Licensed Service, and upon
Licensor's request from time to time, Licensee shall submit to
Licensor, for its written approval, not to be unreasonably
withheld, of the Mark usage, samples or description of each
Licensed Article or Licensed Service together with any
labeling, packaging, or promotion material and literature in
respect of which such Licensed Article is to be marketed, sold
or provided. The number of samples to be furnished by Licensee
shall be such reasonable number as Licensor may from time to
time request. All samples shall be provided without charge to
Licensor. No Licensed Article or Service shall be distributed,
sold or provided pursuant to this Agreement until Licensee has
obtained Licensor's written approval of the samples submitted.
It is understood, however, that failure of the Licensor to
provide Licensee with written approval or rejection of the
samples submitted within twenty (20) business days of the
Licensor's receipt of such samples shall be deemed to
constitute approval on the part of the Licensor of such
samples.
b. All Licensed Articles and Licensed Services shall be
of the same quality and workmanship as the approved
sample, and in the manufacture and provision thereof,
Licensee shall cause to be used state-of-the-art
manufacturing processes, techniques and quality
control procedures in order to ensure that the
Licensed Articles and Licensed Services will
consistently comply with the highest product quality
standards. Under no circumstances shall Licensee
sell, distribute, give away or otherwise deal or
cause to have sold, distributed, given away or
otherwise dealt Licensed Articles or Licensed
Services that are seconds or
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sub-standard, that bear a distortion of the Marks or
that otherwise do not comply with this Agreement.
c. Licensee shall consistently distinguish the Licensed
Articles and Licensed Services from other products
and services manufactured, sold and provided by
Licensee and shall avoid any confusing similarity
between such other products and services and the
Licensed Articles and Licensed Services. Licensee
shall take such actions as are necessary to maintain
the Licensed Articles and Licensed Services as
separate and distinct lines of styling, design and
merchandising from any other product and service
manufactured, sold or provided by Licensee.
d. Licensee shall, no later than 90 days before the
expiration of any Contract Year, furnish Licensor a
statement showing the number and description of
Licensed Articles in inventory and in process and of
Licensed Services being provided.
9. Compliance with Government, Regulations, Industry Standards and Product
Testing
a. Licensee agrees that the manufacture, distribution
and sale of the Licensed Articles and rendering of
Licensed Services will conform at all times to all
applicable federal, state and local laws,
regulations, industry standards, ordinances and other
enactments, including, without limitation, those
relating to product and service safety.
b. The Licensed Articles and Licensed Services shall
comply with all relevant government regulations and
meet all industry standards applicable thereto. All
those individuals engaged in the offering of the
Licensed Services shall be the highest ethical and
moral character and shall be certified by the
appropriate industry boards and/or government
agencies to the highest level appropriate to each
individual's respective position.
10. Promotional Material
Licensee shall not use the Marks or any reproduction thereof
in any advertising, promotional or display material without
Licensor's prior written approval. Under no circumstances will
promotional materials or programs be used by Licensee that
reflect unfavorably on the Marks or disparage marks of third
parties. All advertising, display or promotional copy
utilizing or in any way connected with the Marks, shall carry
a
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notice that the Marks are the property of Licensor, and at
least six copies of such advertising, display or promotional
copy shall be submitted to Licensor for prior written
approval, not to be unreasonably withheld, at least 30 days in
advance of production and upon Licensor's request from time to
time thereafter. Any approval granted by Licensor under this
Section will extend only to Licensee's use of the Marks. It is
understood, however, that failure of the Licensor to provide
Licensee with written approval or rejection of the copies
submitted within twenty (20) business days of the Licensor's
receipt of such copies shall be deemed to constitute approval
on the part of the Licensor of such copies. Licensor shall not
be liable for content or accuracy of such advertising,
promotional or display material nor for infringement of
patents, copyrights, trademarks, or any other proprietary
rights owned, used, or controlled by third parties, by reason
of Licensee's promotional activities.
11. Records
a. Licensee shall keep accurate books of account and records
covering all transactions relating to the license herein
granted. Licensor and its duly authorized independent
accountants or other representatives shall, from time to time,
have the right at reasonable times upon Licensor's prior
written request of at least five (5) business days to examine
such books of account and records and other documents and
material in Licensee's possession or under its control with
respect to Licensee's activities in connection with this
Agreement, and such persons shall have free and full access
for such purposes and may make copies thereof or extracts
therefrom. Licensee shall keep all such records available to
Licensor for at least three years after expiration or
termination of this Agreement. Licensee will designate a
symbol or number which will be used exclusively in connection
with the Licensed Articles and Licensed Services and with no
other articles or services which Licensee may manufacture,
sell or distribute, and that duplicates of all xxxxxxxx by
Licensee to its customers with respect to Licensed Articles
and Licensed Services shall be kept by Licensee for inspection
as is herein provided.
b. If any audit by Licensor shall reveal a shortfall of royalties
and gross revenue share paid by Licensee against royalties and
gross revenue share actually due in accordance with this
Agreement, Licensee shall within fifteen (15) days make
payment to Licensor of such shortfall, plus simple interest at
the rate of 1.5 percent per month or if lower, the highest
rate permitted by Massachusetts law, for the period of such
shortfall. In addition, if such audit shall reveal a shortfall
of more than five percent of royalty and gross revenue share
due, Licensee shall
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reimburse Licensor for the services of its accountant and for
any other expenses of Licensor incident thereto including,
without limitation, any attorneys' fees and costs of
collection.
12. Licensor's Obligations
a. Within thirty (30) days of the execution of this Agreement,
Licensor will provide Licensee with its current customer list
and will provide Licensee with updates thereon at the
commencement of each Contract Year. Licensee acknowledges that
the customer list is a valuable asset of the Licensor and
remains Licensor's exclusive property. Licensee will not
divulge any contents of the list nor make any use of the list
not contemplated by this Agreement.
b. Within seven (7) days of the execution of this Agreement,
Licensor will issue a press release announcing the execution
of this Agreement.
c. Licensor will, at the sole expense of Licensee, undertake to
expand the contents of its annual catalogue to illustrate
therein the Licensed Articles and Licensed Services
contemplated by this Agreement.
d. Licensor will provide Licensee access to and full information
as to its existing distribution channels and will endeavor to
enable Licensee to make full use thereof.
e. Licensor will advise each of its existing Licensees of the
nature of the Licensed Articles and Licensed Services covered
by this Agreement.
13. Termination
In addition to any other rights which Licensor may otherwise have, Licensor may
terminate this Agreement at any time, immediately upon written notice:
a. If within six (6) months from the date of this Agreement,
Licensee shall not have begun the bona fide design,
specification and/or concluded contracts for production,
distribution, sale and provision of the Licensed Articles and
Licensed Services; or
b. If Licensee shall, after said written notice, fail for a
period in excess of three consecutive months to continue the
bona fide design, specification, distribution, sale or
provision of the Licensed Articles and Licensed Services; or
c. If Licensee shall fail to make any payment due hereunder or to
deliver any of the statements required hereunder, and if such
default shall
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continue for a period of 15 days after notice of such default
by Licensor to Licensee or if such a failure shall occur twice
in any consecutive 12-month period even if both failures are
corrected as provided hereunder; or
d. If Licensee or its property:
1) Becomes subject to a receiver or trustee; or
2) Becomes insolvent; or
3) Becomes subject to an involuntary or voluntary
petition under the Canadian Bankruptcy Laws, or
4) Makes an assignment for the benefit of its creditors;
or
e. If there is any deliberate deficiency in the Licensee's
reporting which affects royalties or gross revenue share
payable or any other aspect of this Agreement; or;
f. If any warranty, representation or covenant made by Licensee
hereunder, or any information as to product quality or safety
provided .by Licensee hereunder, is false or misleading; or
g. If Licensee fails to comply with any term or condition of this
Agreement, other than those specifically set forth in clauses
a. through f. above, and such non-compliance continues beyond
a period of 15 days after notice thereof is given by the
Licensor.
Any termination by Licensor shall be without prejudice to any of Licensor's
other rights or remedies.
14. Effect of Termination
a. After expiration or other termination of this Agreement,
Licensee shall have no further right to manufacture,
distribute, sell, exploit, provide, render or otherwise deal
in any Licensed Articles and Licensed Services which utilize
the Marks, except that Licensee may dispose of Licensed
Articles which are on hand or in process or complete the
Licensed Services already in force or to be provided at the
time of expiration or termination so long as (1) Licensee
reports in writing to Licensor, no later than 30 days after
termination of this Agreement, the total number of Licensed
Articles which will be disposed of, (2) the total number of
contracts for Licensed Services which are in force or to be
provided, (3) the sale or provision thereof is completed
within six
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months, (4) all payments when due are made to Licensor, (5)
such disposal or provision of Licensed Articles and Licensed
Services shall be in accordance with the terms of this
Agreement, and (6) statements and royalty and gross revenue
share payments with respect to that period are made by
Licensee in accordance with Section 3. Notwithstanding the
foregoing, in the event this Agreement is terminated pursuant
to Sections 13(c), 13(d), 13(e), 13(f), or 13(g), Licensee
shall not dispose of or provide any Licensed Articles or
Licensed Services which are on hand, in process, in force or
to be provided at the time of termination in association with
the Marks. A final statement and payment shall be made by
Licensee within 15 days after the end of such six-month
period. Upon expiration of such six-month period herein, all
molds, plates, prints and other materials used to reproduce
the Marks for the manufacture or provision of the Licensed
Articles and advertising of Licensed Services shall be
destroyed and evidence of such destruction shall be given to
the Licensor.
b. In the event this Agreement expires or is otherwise terminated
for any reason, Licensee shall, and hereby does agree to
assign to Licensor any and all rights of Licensee in the
Marks, including associated goodwill, and the designs trade
dress and styles of the Licensed Articles and Licensed
Services to the extent such design or styles contain or employ
any of the Marks, and shall not thereafter market, manufacture
or sell any such designs or styles or use the Marks in any
manner in connection with any provided services.
c. Except as provided in subsection (a) of this paragraph, upon
the expiration or termination of this Agreement, Licensee
shall immediately cease all further use of the Marks and any
names, trademarks, characters, symbols, designs, likenesses or
visual representations as might be likely to cause confusion
or deceive purchasers or prospective purchasers or dilute any
trade name, trademark, trade dress or service mark of Licensor
including, without limitation, Licensor's corporate and
private names, other trademarks, symbols, designations,
indices, slogans and other means of identifying products or
services of Licensor, whether or not identified herein as a
Mark.
d. Licensee agrees that the Marks are distinctive and possess
special, unique and extraordinary characteristics which make
difficult the assessment of the monetary damages that Licensor
would sustain by unauthorized use. Licensee recognizes that
irreparable injury would be caused to Licensor by any
unauthorized use of the Marks and agrees that preliminary
and/or permanent injunctive and other equitable relief
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would be appropriate in the event of a breach of this
Agreement by Licensee provided, however, that such remedy
shall not be exclusive of other legal remedies otherwise
available.
e. Licensee's obligations and agreements set forth in Sections 3
through 11, 14, 15, 18, 20 and 21 shall survive any
termination or expiration of this Agreement.
15. Notices:
All notices and statements to be given hereunder shall be in writing, any such
notice or statement shall be deemed duly given if mailed by certified mail,
return receipt requested, if to Licensor, at:
Xxxxx & Wesson Corp.
0000 Xxxxxxxxx Xxxxxx
P.O. Box 2208 Springfield, MA 01102-2208
Attention: Xxxxxx X. Xxxxx
Vice President Sales & Marketing
and if to Licensee, at:
Canadian Security Agency, Inc.
0000 Xxxx xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxxxxxxx
President
16. No Joint Venture
Nothing in this Agreement shall be construed to place the parties in
the relationship of partners or joint ventures, and Licensee shall have
no power to bind Licensor in any manner whatsoever.
17. Cancellation
Licensee acknowledges that Licensor and its subsidiaries, affiliates
and franchisees use the Marks to advance and promote Licenser's
business, and that Licensor has a paramount obligation to preserve its
ability to so use such Marks. Should the use by Licensee of any mark on
Licensed Articles or Services be deemed by Licensor in its discretion
to be in violation of any federal, state or local law or to adversely
affect the reputation of Licensor or affect the validity,
enforceability or distinctiveness of the Mark as a
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20
designation or origin for Licenser's own products, then Licensor may
terminate this Agreement on one hundred and eighty (180) days notice to
Licensee.
18. Assignments, Transfers and Sublicenses
Without the prior written consent of Licensor, which may be withheld in
Licenser's sole and reasonable discretion, a) Licensee shall not
voluntarily or by operation of law, assign or transfer this Agreement
or any of Licensee's rights or duties hereunder ore any interest of
Licensee herein, except to a third party which is controlled by
Licensee, nor shall Licensee enter into any sublicense for use of the
Marks by other persons otherwise than as contemplated by this
Agreement; b) Licensee shall not sell or otherwise transmit or transfer
to any party engaged in the design or manufacture of items similar to
any of the Licensed Articles or Licensed Services, any design, style,
know-how, technology or other item or knowledge of a technical or
competitive nature, furnished to Licensee by or through Licensor. Any
transfer or attempt to transfer of this license to any entity in which
the present directors of Licensee do not have voting control shall be
deemed an assignment prohibited hereunder. The consent of Licensor to
one assignment, transfer or sublicense shall not be deemed to be
consent to any subsequent assignment, transfer or sublicense. Nothing
provided herein shall limit Licensor's right to transfer and/or assign
any of its rights hereunder.
19. Scope and Modification
This Agreement sets forth the entire agreement between the parties, and
supersedes all prior agreements and understandings between the parties,
relating to the subject matter hereof. None of the terms of this
Agreement may be waived or modified except as expressly agreed in
writing by both parties.
20. Severability
Should any provision of this Agreement be declared void or
unenforceable, the validity of the remaining provisions shall not be
affected thereby.
21. Governing Laws
This Agreement shall be made in the Commonwealth of Massachusetts and
its terms shall be interpreted in accordance with and governed by the
laws thereof.
The parties hereto have executed this Agreement as of the date at the
beginning hereof.
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Licensor:
XXXXX & WESSON CORP.
Witnessed By:
By: /s/ Xxxxxx X. Xxxxx
---------------------------------- --------------------------------------
(Title)
----------------------------------
Vice President & Sales & Marketing
Licensee:
CANADIAN SECURITY AGENCY
Witnessed By:
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------------- --------------------------------------
(Title)
----------------------------------
President
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EXHIBIT "A" -Licensed Marks
XXXXX & WESSON - Canadian Registration No. 87/21255
S & W MONOGRAM - Canadian Registration No. 92/22375
S & W - Canadian Registration No. 90/21947
S & W MONOGRAM - U.S. Registration No. 93,766
S & W - U.S. Registration No. 93,767
XXXXX & XXXXXX - U.S. Registration No. 95,164
23
EXHIBIT B - Licensed Articles
Electronic Security Products and
Systems:
- Personal - Business
o Briefcase Lock Sensors o Panic Button/Automatic Dial
o Telephone Security Devices o Controllers
o Child Find Receivers/ o Card Access
Transmitters o Closed Circuit Television
o Joggers Alarm Cameras/ Monitors
o Medical Alert Alarm o Electronic Article Surveillance
o Bicycle Alarm o X-Ray Equipment
o Police Emergency Automatic
Dial - Vehicle
o Telephone Scramblers o Tracking Modules (Satellite,
o Communication Line Emitters)
o Analyzers o Visual Alarms
o Marine Alarms o Audible Alarms
o Automatic Panic Dial Controllers
- Domicile o Perimeter Alarms
o Seismic Intrusion Detectors o Glass Break Detectors
o Keypads o Motion/Gravity Change
o Infrared Sensors Sensors
o Main Panel Circuit Boxes o Remote Start Controllers
o Closed Circuit Television o Ignition "Kill" Switches
o Camera/Monitors o Bomb Detectors
o Automatic Lighting
o Thermal Detectors - Crime Detection
o Automatic Wireless o Voice Stress Analyzers
o Dial Controllers o Night Vision Systems
o Hardware and Tape Alarms o Thermal Sensors
o External Motion Detectors o Covert Camera Equipment
o Theft Detection Powders/
Pigments
- Business o RF Detectors
o Letter Scanners o Telephone Analyzers
o Metal Detectors o Lie Detectors
o Shredders
o Facsimile Encryption - Data Recording
o Automated Anti-Intrusion o Loggers
Software/Hardware o Tape Recorders
o Telephone Security o Video Recorders/Monitors
24
EXHIBIT B - Licensed Articles (continued)
- Data Recording (continued) - Surveillance (continued)
o Alarm Triggered Video o Scanners
o Transmitters o Scopes
o Telephone Recorders
o Video Analyzers - Illumination
o Spot Illuminators
Safety Products: o Road Flairs
- Protective o High Powered Beam Lights
o Smoke Detectors o Light Sticks
o Carbon Monoxide o Strobes
Detectors
o Fire Extinguishers - Detection
o First Aid Kits o Chemical Sensors
o Noise Abatement Equipment o Water Seepage Analyzers
o Safety Ladders o Pipe Burst Monitors (Gas
o Safety Cones Liquid)
- Surveillance - - Measuring
o Wireless Microphones o Alcho-Test
o "Walkie Talkies" o Breathalyzers
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EXHIBIT C -Licensed Services
Security Service:
- Monitoring Station - Tracking Systems (continued)
o Underwriter Laboratory o Automated Video, Audio,
o Certified Computer Systems Data Transmitters
o Analog and Digital Reception o Mobile Patrol Stations
Equipment o Airborne Trackers
o Telephone Response -
Personal - Investigative
o Telephone Response - o Loss Prevention
Automated o Private Investigation
o Guard Response o Personnel Certification
o Video Analyzers
o Post Alarm Response - Surveillance
Recorders o Uniformed Guard Services
o Guard/Police o Closed Circuit Video
Communication Systems Monitoring
o Remote Response (Voice, o Intelligence Gathering (Air,
Alarm) Controllers Vehicle, Stationary)
o Service and Integrity Testing
- Tracking System o Undercover
o Satellite Date Processing o Executive Protection
o Computers
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EXHIBIT D - Licensed Services
INSURANCE COVERAGE:
- Personal
o Life Insurance
o Disability Income Insurance
o Medical and Hospitalization Insurance
o Group Insurance (Medical, Dental)
- Domicile
o Home Owner Insurance Policy
o Tenant Insurance
o Condominium Insurance
o Supplemental and Travel Insurance
- Vehicle
o Collision Insurance
o Fire and Theft Insurance
o Loss of Use Insurance
o Replacement Cost Insurance
o Accident Benefit Insurance
o Personal Liability Insurance
- Business
o Comprehensive General Liability
o Business Interruption Insurance
o Umbrella Policy Coverage
o Failure to Perform Insurance
