Document:

ex10-1.htm

EXHIBIT 10.1

 

 

INTELLECTUAL PROPERTY PURCHASE AGREEMENT

 

by and between

 

AEROGROW INTERNATIONAL, INC.

 

and

 

OMS INVESTMENTS, INC.

 

dated as of

 

April 22, 2013

 

  

  

  

 

INTELLECTUAL PROPERTY PURCHASE AGREEMENT

 

THIS INTELLECTUAL PROPERTY PURCHASE AGREEMENT (“Agreement”) is made as of April 22, 2013 by and between AeroGrow International, Inc., a Nevada corporation having offices at 6075 Longbow Dr. Suite 200, Boulder, Colorado 80301 (the “Company”), and OMS Investments, Inc., a Delaware corporation having offices at 10250 Constellation Blvd., Suite 2800, Los Angeles, California 90067 (the “Purchaser”).

RECITALS:

 

A.           The Company owns certain worldwide rights in and to the IP Assets (as defined below); and

 

B.           The Purchaser wishes to purchase the Company’s entire right, title and interest in and to the IP Assets, and the Company is willing to sell its entire right, title and interest in and to the IP Assets in exchange for consideration as described below;

 

C.           Concurrently with the execution of this Agreement, Purchaser and Company will execute a Securities Purchase Agreement (the “Securities Purchase Agreement”) pursuant to which the Purchaser will acquire convertible preferred stock and warrants from the Company; and

 

D.           The Purchaser and the Company will execute certain other Transaction Agreements as set forth in the Securities Purchase Agreement.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

 

ARTICLE 1.

 

PURCHASE AND SALE OF IP ASSETS

 

Section 1.1                      Purchase and Sale of IP Assets.  On and subject to the terms and conditions of this Agreement, at the Closing, Company shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase and acquire from Company, free and clear of all Encumbrances, all of Company’s right, title and interest, as of the Closing, in and to the IP Assets, including without limitation the right to sue and recover damages for past, present and future infringement.

 

Section 1.2                      Excluded Liabilities.  Purchaser will not assume any liability or obligation of Company in connection with Purchaser’s purchase of the IP Assets pursuant to this Agreement.

 

Section 1.3                      Purchase Price.  In consideration for the sale by Company of the IP Assets to Purchaser, at the Closing, Purchaser shall pay to Company cash in the amount of Five Hundred Thousand U.S. Dollars (US $500,000.00) (the “Purchase Price”), by wire transfer of immediately available funds to the account or accounts designated in writing by Company at least two business days prior to the Closing Date.

 

  

  

  

 

Section 1.4                      Closing Transactions.

 

(a)           The purchase and sale of the IP Assets shall take place remotely via the exchange of documents and signatures, on April 24, 2013, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place are designated as the “Closing”).

 

(b)           At the Closing, Company shall deliver to Purchaser:

 

(i)           an Intellectual Property assignment in the form of Appendix A dated as of the date of Closing and duly executed by Company, assigning all of Company’s right, title and interest in and to the IP Assets to Purchaser (the “Intellectual Property Assignment”);

 

(ii)           all such other instruments of assignment and transfer as are reasonably required to effect the transfer to Purchaser of all of Company’s right, title and interest in and to the IP Assets in accordance with this Agreement, in form and substance reasonably satisfactory to Purchaser; and

 

(iii)           the compliance certificate identified in Section 4.3.

 

(c)           At the Closing, Purchaser shall deliver to Company the Purchase Price specified in Section 1.3 above.

Section 1.5                      Defined Terms Used in this Agreement.  Capitalized terms in this Agreement shall have the meanings ascribed to them in the body of this Agreement or as set forth below in this Section 1.5.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Securities Purchase Agreement.

 

(a) “Company Intellectual Property” means all Intellectual Property owned by Company or used by Company that is associated with the Company’s products, including without limitation, the IP Assets listed in Appendix A, Schedule 1 and the Excluded Trademarks listed in Appendix B.

 

(b) “Copyrights” means all published and unpublished works of authorship and copyrights therein, and copyright registrations and applications for registration thereof and all renewals, extensions, restorations and reversions thereof.

 

(c) “Encumbrance” means any charge, claim, community property interest, condition, easement, covenant, warrant, demand, encumbrance, equitable interest, lien, license, mortgage, option, purchase right, pledge, security interest, right of first refusal or other right of third parties or restriction of any kind, including any restriction on use, transfer, receipt of income or exercise of any other attribute of ownership.

 

  

  

  

 

(d) “Excluded Trademarks” means Company’s AeroGrow and AeroGarden Trademarks listed in Appendix B.

 

(e) “Intellectual Property” means all intellectual property rights of any kind, worldwide, including rights in, to and concerning (a) Patents; (b) Trademarks; (c) Copyrights; and (d) Technical Information.

 

(f) “IP Assets” means the Company Intellectual Property owned solely or jointly by Company, except for the Excluded Trademarks.

 

(g) “Patents” means all patents throughout the world (including utility patents, design patents, patents of importation, improvement patents, patents and certificates of addition, and utility models, as well as divisions, reissues, reexaminations, continuations, continuations-in-part, renewals and extensions of any of the foregoing) and applications therefore, and patents which may be issued on such applications.

 

(h) “Trademark” means a trademark, service mark, trade dress, logo, trade name, corporate name, domain name and/or other source identifier, all goodwill associated with any of the foregoing, and registrations and applications for registration thereof, including all extensions, modifications and renewals of the foregoing.

 

(i) “Technical Information” means know-how, trade secrets, confidential and proprietary information, ideas, inventions, discoveries, formulae, compositions, manufacturing and production processes and techniques, research and development information, reports, drawings, specifications, designs, plans, improvements, proposals, information and analytic methodology used in the development, testing, analysis, design, manufacturing and packaging of products and services, technology, software, computer programs, documentation, databases, data, mask works, financial, business and marketing plans, cost and pricing information, supplier lists and related information, sales data and plans, customer lists, customer accounts, and related information, recorded in any form.

 

ARTICLE 2.

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company hereby represents and warrants to the Purchaser that, except as set forth on the Disclosure Schedule attached as Appendix C to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing, except as otherwise indicated.  The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Article 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Article 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

 

For purposes of these representations and warranties (other than those in Section 2.2), the term “the Company” shall include any subsidiaries of the Company, unless otherwise noted herein.

 

  

  

  

 

Section 2.1. Organization, Good Standing, Corporate Power and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

 

Section 2.2. Authorization.  All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the Company to enter into this Agreement, and to assign and deliver the IP Assets at the Closing, has been taken or will be taken prior to the Closing.  All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company under this Agreement to be performed as of the Closing, and the assignment and delivery of the IP Assets has been taken or will be taken prior to the Closing.  This Agreement, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

Section 2.3. Intellectual Property.

 

(a) The Company owns the entire right, title and interest in and to the Company Intellectual Property.  There are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Patents, Trademarks, Copyrights, Technical Information, licenses, information, proprietary rights and processes of any other Person.  The Company Intellectual Property does not include any Intellectual Property owned by a third party and licensed to Company.

 

(b) To the Company’s knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or Persons it currently intends to hire) made prior to their employment by the Company.  Each employee and consultant has assigned to the Company, pursuant to written agreements, all Intellectual Property rights he or she owns that are related to the Company’s business as now conducted and as presently proposed to be conducted.

 

(c) Appendix A, Schedule 1 contain a complete list of all Company Intellectual Property other than the Excluded Trademarks.  Except as set forth in Appendix A, Schedule 1 and the Excluded Trademarks, the Company owns no Patents, Copyrights, or Trademarks that have been registered with the U.S. Patent and Trademark Office, the U.S. Copyright Office, or counterpart offices worldwide, and the Company has made no applications for any Patent, Trademark, or Copyright worldwide.

 

(d) No claim or action by any third party contesting the validity, enforceability, or ownership of any Company Intellectual Property has been asserted against the Company nor, to the knowledge of the Company, is threatened.  To the knowledge of Company, there is no reasonable basis for any such claim.  All of the filed, registered and/or issued items of Company Intellectual Property are being actively prosecuted and have not been abandoned or allowed to lapse. 

 

  

  

  

 

(e) To the Company’s knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by the Company, or any activities of the Company, infringes or misappropriates, or will infringe or misappropriate Intellectual Property rights of any third party.  The Company has not received any notices of, nor to the Company’s knowledge is there any reasonable basis for, an allegation of any infringement or misappropriation, by any third party with respect to the business, products, or services of Company, nor has Company received any claims of infringement or misappropriation of any Intellectual Property of any third party.

 

(f) To the knowledge of the Company, no other person is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, any of the Company Intellectual Property, nor is there any action that is pending or threatened by Company with respect thereto.

 

(g) Company has not granted any licenses with respect to any Company Intellectual Property to any third party.

 

(h) No licenses to third party Intellectual Property are required for Company to use the Company Intellectual Property.

 

(i) The Company has not embedded any open source, copyleft or community source code in any of its products generally available or in development, including but not limited to any libraries or code licensed under any General Public License, Lesser General Public License or similar license arrangement.

 

Section 2.4. Changes.  Since December 31, 2012, there has not been any sale, assignment or transfer of any Company Intellectual Property that could reasonably be expected to result in a Material Adverse Effect.

 

Section 2.5. Employee Agreements.  Each current and, to the Knowledge of the Company (as defined in the Securities Purchase Agreement), former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information, and that includes a present assignment to the Company of Intellectual Property created in the scope of employment, substantially in the form or forms delivered to the counsel for the Purchaser (the “Confidential Information Agreements”).  No current or, to the Knowledge of the Company, former Key Employee has excluded works or inventions from his or her assignment of inventions pursuant to such Key Employee’s Confidential Information Agreement.  Each current Key Employee has executed a non-competition and non-solicitation agreement substantially in the form or forms delivered to counsel for the Purchaser.  The Company is not aware that any of its Key Employees is in violation of any agreement covered by this Section 2.5.

 

  

  

  

 

ARTICLE 3.

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

 

The Purchaser hereby represents and warrants to the Company that:

 

Section 3.1. Authorization.  The Purchaser has full power and authority to enter into this Agreement.  This Agreement, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

ARTICLE 4.

 

CONDITIONS TO THE PURCHASER’S OBLIGATIONS AT CLOSING.

 

The obligations of the Purchaser to purchase the IP Assets at the Closing are subject to the fulfillment, on or before such Closing, of each of the following conditions, unless otherwise waived:

 

Section 4.1. Representations and Warranties.  The representations and warranties of the Company contained in Article 2 shall be true and correct in all respects as of such Closing.

 

Section 4.2. Performance.  The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before such Closing.

 

Section 4.3. Compliance Certificate.  The President of the Company shall deliver to the Purchaser at the Closing a certificate certifying that the conditions specified in Subsections Section 4.1 and Section 4.2 have been fulfilled.

 

Section 4.4. Intellectual Property Assignment.  The Company shall have executed and delivered the Intellectual Property Assignment.

 

Section 4.5. Material Adverse Change.  There shall not have occurred any Material Adverse Effect (or any development that, insofar as reasonably can be foreseen, is reasonably likely to result in any Material Adverse Effect).

 

Section 4.6. Securities Purchase Agreement.  The Company and Purchaser’s Affiliate, SMG Growing Media, Inc., an Ohio corporation, shall have executed and delivered the Securities Purchase Agreement.

 

Section 4.7. Amendment and Restatement of Commercial Security Agreement. The Company and First Western Trust Bank ("First Western") shall have executed and delivered, and provided a copy to the Purchaser of, an amendment and restatement of the May 21, 20120 Commercial Security Agreement between the Company and First Western, which amendment and restatement releases First Western's security interest in the IP Assets.

 

  

  

  

 

Section 4.8.  First Western UCC-3. Financing Statement Amendments. First Western shall have filed a DCC-3 financing statement amendment in all jurisdiction in which it has filed a DCC-l financing statement against assets of the Company, which DCC-3 financing statement amendment indicates that First Western does not have a security interest in the IP Assets.

 

Section 4.9.  GVC Capital. LLC DCC-3. Financing Statement Amendments. GVC Capital. LLC shall have filed a DCC-3 financing statement amendment in all jurisdiction in which it has filed a DCC-l financing statement against assets of the Company, which DCC-3 financing statement amendment indicates that GVC Capital. LLC does not have a security interest in the IP Assets.

 

Section 4.10.  Release of First Capital Security Interest. The Company and First Capital ("First Capital') shall have executed and delivered, and provided a copy to the Purchaser of, a release agreement ("Release") to the Security Agreement between the Company and First Capital, which Release releases First Capital's security interest in the IF Assets.

 

Section 4.11.  First Capital DCC-3. First Capital shall have filed a VCC-3 amendment in all jurisdiction in which it has filed a VCC-l against assets of the Company, which VCC-3 indicates that First Capital does not have a security interest in the IP Assets.

 

Section 4.12. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchaser, and the Purchaser (or its counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates.

 

ARTICLE 5.

 

CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING.

 

The obligations of the Company to sell the IP Assets to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

Section 5.1. Representations and Warranties.  The representations and warranties of the Purchaser contained in Article 3 shall be true and correct in all respects as of such Closing.

 

Section 5.2. Performance.  The Purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by them on or before such Closing.

 

Section 5.3. Securities Purchase Agreement.  The Company and Purchaser’s Affiliate, SMG Growing Media, Inc., an Ohio corporation, shall have executed and delivered the Securities Purchase Agreement.

 

  

  

  

 

ARTICLE 6.

 

CONDUCT OF BUSINESS PENDING THE CLOSING.

 

Section 6.1. Conduct of Business by the Company Pending the Closing.  During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, the Company agrees (except to the extent that the Purchaser shall otherwise consent in writing), to carry on its business in the usual, regular and ordinary course and in substantially the same manner as previously conducted, to use all reasonable efforts consistent with past practices and policies to preserve intact its Company Intellectual Property, preserve its relationships with any licensors and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired, in any material respect, at the Closing.  The Company shall promptly notify Purchaser of any material event or occurrence with respect to the Company Intellectual Property or allegations of infringement or misappropriation relating to the business, products or services of the Company.  By way of amplification and not limitation, except as contemplated by this Agreement, the Company shall not, between the date of this Agreement and the Closing, do any of the following without the prior written consent of the Purchaser:

 

(a) Grant any licenses under any Company Intellectual Property to any third party;

 

(b) Grant any liens or security interest on, or otherwise encumber, any Company Intellectual Property;

 

(c) Sell any Company Intellectual Property to any third party;

 

(d) Abandon or fail to prosecute or maintain any Company Intellectual Property; or

 

(e) Breach any license agreement relating to Company Intellectual Property.

 

Section 6.2. Litigation.  The Company shall notify the Purchaser in writing promptly after learning of any material claim, action, suit, arbitration, mediation, proceeding or investigation by or before any court, arbitrator or arbitration panel, board or other governmental entity initiated by it or against it, or known by it to be threatened against it or any of its officers, directors, employees or stockholders in their capacity as such.

 

Section 6.3. Notification of Certain Matters.  The Purchaser shall give reasonably prompt notice to the Company, and the Company shall give reasonably prompt notice to the Purchaser, of (i) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would be likely to cause (x) any representation or warranty contained in this Agreement to be untrue or inaccurate, in any material respect, or (y) any covenant, condition or agreement contained in this Agreement not to be complied with or satisfied, in any material respect; and (ii) any failure or inability of the Purchaser or the Company, as the case may be, to comply, in any material respect, with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

 

  

  

  

 

ARTICLE 7. 

 

SATISFACTION OF CLOSING CONDITIONS; TERMINATION.

 

Section 7.1. Satisfaction of Closing Conditions.  The Company and the Purchaser shall each use its reasonable best efforts to satisfy the conditions set forth in Article 4 and Article 5, respectively.

 

Section 7.2. Termination Events.  This Agreement may be terminated at any time prior to the Closing:

 

(a) by the mutual written consent of the Company and the Purchaser;

 

(b) by either the Company or the Purchaser, if the Closing shall not have been consummated by April 30, 2013 for any reason; provided, however, that the right to terminate this Agreement under this Section 7.2(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a material breach of this Agreement;

 

(c) by either Company or the Purchaser, if a governmental entity shall have issued an order, decree or ruling or taken any other action after the date hereof, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Closing, which order, decree, ruling or other action shall have become final and non-appealable;

 

(d) by the Company, upon a breach of any representation, warranty, covenant or agreement on the part of the Purchaser set forth in this Agreement, or if any representation or warranty of the Purchaser shall have become untrue, in either case such that the conditions set forth in Section 5.1 or Section 5.2 would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the Purchaser’s representations and warranties or breach by the Purchaser is curable by the Purchaser through the exercise of its commercially reasonable efforts, then the Company may not terminate this Agreement under this Section 7.2(d) for thirty (30) days after delivery of written notice from the Company to the Purchaser of such breach, provided the Purchaser continues to exercise commercially reasonable efforts to cure such breach or inaccuracy (it being understood that the Company may not terminate this Agreement pursuant to this paragraph (d) if such breach or inaccuracy by the Purchaser is cured during such thirty (30) day period);

 

(e) by the Purchaser upon a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in Section 4.1 or Section 4.2 would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the Company’s representations and warranties or breach by the Company is curable by the Company through the exercise of its commercially reasonable efforts, then the Purchaser may not terminate this Agreement under this Section 7.2(e) for thirty (30) days after delivery of written notice from the Purchaser to the Company of such breach, provided the Company continues to exercise commercially reasonable efforts to cure such breach or inaccuracy (it being understood that the Purchaser may not terminate this Agreement pursuant to this paragraph (e) if such breach or inaccuracy by the Company is cured during such thirty (30)-day period); or

 

  

  

  

 

(f) by the Purchaser, if a Material Adverse Effect has occurred prior to the Closing with respect to the Company; provided, that if such Material Adverse Effect is curable by the Company through the exercise of its commercially reasonable efforts, then the Purchaser may not terminate this Agreement under this Section 7.2(f) for thirty (30) days after delivery of written notice from the Purchaser to the Company of such Material Adverse Effect, provided the Company continues to exercise commercially reasonable efforts to cure such Material Adverse Effect (it being understood that the Purchaser may not terminate this Agreement pursuant to this paragraph (f) if such Material Adverse Effect is cured during such thirty (30)-day period).

 

Section 7.3. Effect of Termination.  In the event of the termination of this Agreement pursuant to Section 7.2, this Agreement shall forthwith become void, and there shall be no liability on the part of any party hereto or any of their respective Affiliates or the directors, officers, partners, members, managers, employees, agents or other representatives of any of them, and all rights and obligations of each party hereto shall cease, except that nothing herein shall relieve any party from liability for any willful breach of this Agreement.  Without limiting the foregoing, this Section 7.3, Section 8.2 and Article 9 shall survive the termination of this Agreement.

 

ARTICLE 8.

 

ADDITIONAL AGREEMENTS OF THE PARTIES

 

Section 8.1. Commercially Reasonable Efforts.

 

(a) Upon the terms and subject to the conditions hereof, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to vest in Purchaser good and marketable title to the IP Assets, including obtaining all consents, waivers, authorizations and approvals from governmental authorities and other third parties.

 

(b) From time to time after the Closing, at the request of Purchaser and at such requesting party’s expense, and without further consideration, Company agrees on its own behalf, as well as on behalf of its subsidiaries, Affiliates, successors, assigns and legal representatives, to execute and deliver to Purchaser any further documents or instruments and perform any further acts that may reasonably be deemed necessary or desirable by Purchaser to vest, record, perfect, support and/or confirm the rights herein conveyed, or intended so to be, to Purchaser with respect to the IP Assets, including without limitation such assignments, agreements and limited powers of attorney as may be needed for recording or effectuating the transfer of the IP Assets in the United States and in foreign countries.  Nothing herein shall be deemed a waiver by Purchaser of its right to receive at the Closing an effective assignment of such rights by Company as otherwise set forth in this Agreement.  Without limiting the generality of the foregoing, Company shall execute and deliver to Purchaser or obtain for delivery to Purchaser, at the request of Purchaser and at its expense, and without further consideration, any documents required to update record title to the owned IP Assets to reflect Purchaser as the record owner in each jurisdiction in which such IP Assets exists.  At the request of Purchaser and at its expense, and without further consideration, Company shall reasonably cooperate with Purchaser in connection with the registration of the IP Assets.

 

  

  

  

 

(c) From time to time after the Closing, at the request of Purchaser and at its expense, and without further consideration, Company shall assist Purchaser as Purchaser may reasonably require in connection with the defense or prosecution of any claim by or against any third party with respect to the ownership, validity, enforceability, infringement or other violation of or by the IP Assets.

 

Section 8.2. Public Announcements.  Each of the parties agrees that no press release or announcement concerning this Agreement shall be issued by it or any of its Affiliates without the prior consent of the other party, except as such release or announcement may be required by applicable law or the rules or regulations of any securities exchange, in which case such party shall use its commercially reasonable efforts to allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

 

ARTICLE 9.

 

INDEMNIFICATION.

 

Section 9.1. Company’s Indemnification Obligation.  Company agrees that, from and after the Closing, it shall indemnify, defend and hold harmless Purchaser, its officers, directors, Affiliates, partners, members, managers, employees, agents and other representatives (“Purchaser Indemnified Parties”) from and against any damages, claims, losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees) (each, a “Liability” and, collectively, “Liabilities”) incurred by any of the foregoing Persons arising out of (a) any inaccuracy or breach of any representation or warranty of Company contained in Article 2 of this Agreement, or (b) any breach of any covenant or agreement of Company contained in this Agreement.

 

Section 9.2. Purchaser’s Indemnification Obligation.  Purchaser agrees that, from and after the Closing, it shall indemnify, defend and hold harmless Company, its officers, directors, Affiliates, partners, members, managers, employees, agents and other representatives (“Company Indemnified Parties”) from and against any Liabilities incurred by any of the foregoing Persons arising out of (a) any inaccuracy or breach of any representation or warranty of Purchaser contained in Article 3 of this Agreement, or (b) any breach of any covenant or agreement of Purchaser contained in this Agreement.

 

Section 9.3. Procedures for Indemnification for Third Party Claims.  For purposes of this Article 9, any party entitled to be indemnified under Article 9 is referred to herein as an “Indemnified Party,” and any Party obligated to provide indemnification under Article 9 is referred to herein as an “Indemnifying Party.”  The obligations and liabilities of the parties under this Article 9 with respect to, relating to or arising out of claims of third parties (individually, a “Third Party Claim” and, collectively, the “Third Party Claims”) shall be subject to the following terms and conditions:

 

  

  

  

 

(a) The Indemnified Party shall give the Indemnifying Party prompt written notice of any Third Party Claim, and the Indemnifying Party may undertake the defense of that claim by representatives chosen by it and reasonably satisfactory to the Indemnified Party, provided, that, in such event, the Indemnified Party will have the right to participate in such defense through counsel of its own choice and at its own expense.  Any such notice of a Third Party Claim shall identify with reasonable specificity the basis for the Third Party Claim, the facts giving rise to the Third Party Claim and the amount of the Third Party Claim (or, if such amount is not yet known, a reasonable estimate of the amount of the Third Party Claim).  The Indemnified Party shall make available to the Indemnifying Party copies of all relevant documents and records in its possession.  Failure of an Indemnified Party to give prompt notice shall not relieve the Indemnifying Party of its obligation to indemnify, except to the extent that the failure to so notify materially prejudices the Indemnifying Party’s ability to defend such claim against a third party.

 

(b) Anything in this Section 9.3 to the contrary notwithstanding, the Indemnifying Party shall not, without the prior written consent of the Indemnified Party, settle or compromise any Third Party Claim or consent to the entry of judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of an unconditional release from all liability in respect of the Third Party Claim.  The Indemnified Party shall not, without the prior written consent (which shall not be unreasonably withheld or delayed) of the Indemnifying Party, settle, compromise or pay any Third Party Claim or consent to the entry of judgment with respect thereto.

 

Section 9.4. Indemnification Limitations.

 

(a) Time Limits On Indemnification.  No claim on account of a breach or inaccuracy of a representation or warranty shall be made after the expiration of the period ending twelve months after the date of Closing.  Notwithstanding the foregoing, if a written claim or written notice is given under Article 9 with respect to any representation or warranty prior to the expiration of the aforementioned survival period, the claim with respect to such representation or warranty shall continue until such claim is finally resolved.

 

(b) Limitations on Damages.

 

(i) In no event shall Company be liable for indemnification pursuant to Section 9.1 unless and until the aggregate of all Liabilities which are incurred or suffered by the Purchaser Indemnified Parties exceeds $50,000 (the “Basket”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all such Liabilities including the Basket (subject to Section 9.4(b)(ii)).  In no event shall Purchaser be liable for indemnification pursuant to Section 9.2 unless and until the aggregate of all Liabilities which are incurred or suffered by the Company Indemnified Parties exceeds the Basket, in which case the Company Indemnified Parties shall be entitled to indemnification for all such Liabilities including the Basket (subject to Section 9.4(b)(ii)).

 

  

  

  

 

(ii) Notwithstanding anything to the contrary in this Agreement, (x) the maximum aggregate liability of Company pursuant to Section 9.1 shall not exceed $1,000,000 and (y) the maximum aggregate liability of Purchaser pursuant to Section 9.2 shall not exceed $1,000,000.

 

(iii) Notwithstanding anything to the contrary contained in this Agreement or otherwise, no Party to this Agreement shall be liable to any Indemnified Party for any special, incidental, punitive, consequential or similar damages.

 

ARTICLE 10.

 

MISCELLANEOUS.

 

Section 10.1. Survival of Warranties.  Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchaser or the Company.

 

Section 10.2. Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

Section 10.3. Governing Law.  This Agreement shall be governed by the internal law of Ohio.

 

Section 10.4. Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument.  Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

Section 10.5. Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

Section 10.6. Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 10.6.  If notice is given to the Company, a copy shall also be sent to Hutchinson Black and Cook, LLC, 921 Walnut Street, Suite 200 Boulder, CO 80302, Attention: James L. Carpenter, Jr., Facsimile: (303) 442-6593; and if notice is given to the Purchaser, a copy shall also be given to Luis A. Rodriguez, Assistant Secretary, OMS Investments, Inc., 10250 Constellation Blvd., Suite 2800, Los Angeles, CA 90067, Facsimile: (310) 300-3051, with a copy to Hunton & Williams, LLP, 2200 Pennsylvania Avenue, N.W., Washington, D.C. 20036, Attention: J. Steven Patterson, Facsimile: (202) 778-2201.

 

  

  

  

 

Section 10.7. Amendments and Waivers.  Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser.  Any amendment or waiver effected in accordance with this Section 9.7 shall be binding upon the Purchaser and each transferee of the Securities (or the Conversion Shares or the Warrant Share), each future holder of all such securities, and the Company.

 

Section 10.8. Severability.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

Section 10.9. Delays or Omissions.  No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

Section 10.10. Entire Agreement.  This Agreement (including the Appendices hereto), the Securities Purchase Agreement, and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

 

Section 10.11. Dispute Resolution.  The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Colorado and to the jurisdiction of the United States District Court for the District of Colorado for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Coloradoor the United States District Court for the District ofColorado, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.  The prevailing party in any such dispute shall be entitled to recover its reasonable attorneys’ fees and costs incurred, in addition to any other damages.

 

  

  

  

 

WAIVER OF JURY TRIAL:  EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.  EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL

 

 [Signature pages follow.]

 

  

  

  

 

IN WITNESS WHEREOF, the parties have executed this Intellectual Property Purchase Agreement as of the date first written above.

 

COMPANY:

 

AEROGROW INTERNATIONAL, INC.

By:                                                              

Name:                                                              

Title:                                                               

Address:

6075 Longbow Dr. Suite 200,

Boulder, Colorado 80301

Attention:

Facsimile:

 

  

  

  

 

PURCHASER:

OMS INVESTMENTS, INC.

By:                                                             

Name:                                                                

Title:                                                             

Address:

10250 Constellation Blvd., Suite 2800

Los Angeles, California 90067

Attention:

Facsimile:

 

  

  

  

 

APPENDIX A

INTELLECTUAL PROPERTY ASSIGNMENT

WHEREAS, AeroGrow International, Inc., a Nevada corporation having offices at 6075 Longbow Dr., Suite 200, Boulder, Colorado 80301 (“ASSIGNOR”) owns all right, title and interest in and to the IP Assets (defined below); and

WHEREAS, OMS Investments, Inc., a Delaware corporation having offices at 10250 Constellation Blvd., Suite 2800, Los Angeles, California 90067 (“ASSIGNEE”) is desirous of acquiring ASSIGNOR’s entire right, title and interest in and to the IP Assets;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ASSIGNOR does hereby sell, assign, transfer and set over to ASSIGNEE, its successors and assigns, ASSIGNOR’s entire right, title and interest in and to the IP Assets.

(a) “IP Assets” means all intellectual property rights of any kind, worldwide, owned in whole or in part by ASSIGNOR, that are associated with ASSIGNOR’S products, including rights in, to and concerning: (a) all patents and patent applications throughout the world (including utility patents, design patents, patents of importation, improvement patents, patents and certificates of addition, and utility models), as well as existing and future divisions, reissues, reexaminations, continuations, continuations-in-part, renewals and extensions of any of the foregoing, and applications therefore, and patents which may be issued on such applications, (b) all trademarks, service marks, trade dress, logos, trade names, corporate names, domain names and/or other source identifiers, all goodwill associated with any of the foregoing, and registrations and applications for registration thereof, including all extensions, modifications and renewals of the foregoing; except for ASSIGNOR’S AEROGROW and AEROGARDEN trademarks which shall continue to be owned by ASSIGNOR, (c) all published and unpublished works of authorship and copyrights therein, and copyright registrations and applications for registration thereof and all renewals, extensions, restorations and reversions thereof; and (d) all know-how, trade secrets, confidential and proprietary information, ideas, inventions, discoveries, formulae, compositions, manufacturing and production processes and techniques, research and development information, reports, drawings, specifications, designs, plans, improvements, proposals, information and analytic methodology used in the development, testing, analysis, design, manufacturing and packaging of products and services, technology, software, computer programs, documentation, databases, data, mask works, financial, business and marketing plans, cost and pricing information, supplier lists and related information, sales data and plans, customer lists, customer accounts, and related information, recorded in any form.  IP Assets includes, but is not limited to, the items listed on Schedule 1 attached hereto.

 

ASSIGNOR hereby covenants that it has the full right to convey the entire interest herein assigned, and that it has not executed, and will not execute, any agreement in conflict with this Intellectual Property Assignment.

The foregoing assignment of IP Assets includes all rights to sue for past, present, and future infringement, including the right to collect and receive any damages, royalties, or settlements for such infringements, all rights to sue for injunctive or other equitable relief, and any and all causes of action relating to any of the IP Assets.

 

  

  

  

 

ASSIGNOR hereby agrees to execute without further consideration any further documents and instruments which may be necessary, lawful and proper to secure to ASSIGNEE its interest and title in the aforementioned IP Assets.

ASSIGNOR hereby agrees to execute without further consideration any further documents and instruments which may be necessary, lawful and proper in the prosecution of the IP Assets or in the preparation or prosecution of any continuation, continuation-in-part, substitute, divisional, renewal, reexamination, or reissue applications or in any amendments, extensions, or interference proceedings, or other applications for patents of any region or country, or that may be necessary to prosecute, protect, or perfect the aforementioned IP Assets.

ASSIGNOR hereby further covenants and agrees that it will communicate to ASSIGNEE any and all facts known to it respecting said IP Assets, and testify in any legal proceeding, sign all lawful papers, execute and deliver all papers and take an actions that may be necessary or desirable to perfect the title to any of the IP Assets.

ASSIGNOR does hereby authorized and request the Director of the United States Patent and Trademark Office, the Director of the United States Copyright Office, and directors of equivalent foreign intellectual property offices, to issue any and all letters patent, trademark registrations, copyright registrations, or similar rights which may be granted upon said IP Assets, or upon any improvements thereto, or any parts thereof, when granted, to said ASSIGNEE.

 

  

  

  

 

IN TESTIMONY WHEREOF, I hereunto set my hand this ____ day of _________, 2013.

AeroGrow International, Inc. (ASSIGNOR)

By:                                                              

Name:                                                              

Title:                                                               

County of                                                              )

)      ss:

State of                                                                  )

On this _________ day of ___________________, 20___, before me, a Notary Public in and for the County and State aforesaid, personally appeared _____________________, to me known and known to me to be the person of that name, who signed and sealed the foregoing instrument, and acknowledged the same to be of his free act and deed.

 

______________________________

Notary Public

(SEAL)

My Commission Expires _________

  

  

  

 

IN TESTIMONY WHEREOF, I hereunto set my hand this ____ day of _________, 2013.

OMS Investments, Inc. (ASSIGNEE)

By:                                                              

Name:                                                              

Title:                                                               

County of                                                              )

)      ss:

State of                                                                  )

On this _________ day of ___________________, 20___, before me, a Notary Public in and for the County and State aforesaid, personally appeared _____________________, to me known and known to me to be the person of that name, who signed and sealed the foregoing instrument, and acknowledged the same to be of his free act and deed.

 

______________________________

Notary Public

(SEAL)

My Commission Expires _________

 

  

  

  

SCHEDULE 1

IP ASSETS 

	
A.

	
Patents

U.S. Patents and Applications

	
Patent No.

	
Application No.

	
Publication No.

	
Title

	
Filing Date (MM/DD/YYYY)

	
Status

	
-

	
10/714,786

	
2005/0102895

	
Soil-Less Support Medium and Method for Germinating a Seed

	
11/17/2003

	
Abandoned

	
-

	
11/079,054

	
2005/0241231

	
Methods and Devices for Promoting the Growth of Plant Air Roots

	
03/14/2005

	
Abandoned

	
-

	
11/098,176

	
2005/0246954

	
Devices and Methods for Growing Plants

	
04/04/2005

	
Abandoned

	
-

	
11/111,553

	
2005/0246955

	
Devices and Methods for Growing Plants

	
04/21/2005

	
Abandoned

	
-

	
11/112,269

	
2005/0257424

	
Devices and Methods for Growing Plants

	
04/22/2005

	
Abandoned

	
-

	
10/528,110

	
2006/0179711

	
Devices and Methods for Growing Plants

	
07/15/2005

	
Abandoned

	
D586,688

	
29/235,880

	
-

	
Indoor Gardening Appliance

	
08/08/2005

	
Patented

	
7,818,916

	
11/321,023

	
2006/0254332

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
12/28/2005

	
Patented

	
-

	
11/321,368

	
2006/0254138

	
Devices and Methods for Growing Plants by Measuring Liquid or Nutrient Usage Rate

	
12/28/2005

	
Abandoned

	
-

	
11/455,364

	
2006/0272210

	
Smart Garden Device and Methods for Growing Plants

	
06/19/2006

	
Abandoned

	
-

	
11/653,121

	
2007/0271841

	
Devices and Methods for Growing Plants

	
01/12/2007

	
Abandoned

	
8,261,486

	
11/654,164

	
2007/0271842

	
Systems and Methods for Controlling Liquid Delivery and Distribution to Plants

	
01/16/2007

	
Patented

	
-

	
11/895,972

	
2008/0078118

	
Master Gardener Baskets and Methods for Growing Plants

	
08/28/2007

	
Abandoned

	
D604,196

	
29/292,564

	
-

	
Indoor Gardening Appliance

	
10/17/2007

	
Patented

	
D604,197

	
29/293,343

	
-

	
Indoor Gardening Appliance

	
11/16/2007

	
Patented

	
-

	
12/002,543

	
2008/0276534

	
Devices and Methods for Growing Plants by Measuring Liquid Consumption

	
12/17/2007

	
Abandoned

	
-

	
12/073,984

	
2008/0282610

	
Devices and Methods for Growing Plants

	
03/12/2008

	
Abandoned

	
-

	
12/073,985

	
2008/0222949

	
Devices and Methods for Growing Plants

	
03/12/2008

	
Abandoned

	
-

	
12/073,987

	
2008/0155894

	
Soil-Less Seed Support Medium and Method for Germinating a Seed

	
03/12/2008

	
Abandoned

	
-

	
12/261,821

	
2009/0151248

	
Devices and Methods for Growing Plants

	
10/30/2008

	
Abandoned

	
8,091,275

	
12/911,590

	
2011/0036009

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
10/25/2010

	
Patented

 

  

  

  

 

Foreign Patents and Applications

	
Application/ Publication No.

	
Patent No.

	
Title

	
Publication Date (MM/DD/YYYY)

	
Status

	
PCT/US2004/030168

	
WO 2005/055700

	
Devices and Methods for Growing Plants

	
06/23/2005

	
Abandoned

	
B.

	
Copyrights

	
Reg. No.

	
Description

	
Reg. Date (MM/DD/YYYY)

	
Status

	
VA0001674819

	
Cascading Petunias Seed Kit

	
09/28/2007

	
Registered

	
TX0006833384

	
Cascading Petunias Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674791

	
Cherry Tomato Seed Kit

	
09/28/2007

	
Registered

	
TX0006833400

	
Cherry Tomato Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676754

	
Chili Pepper Seed Kit

	
09/28/2007

	
Registered

	
TX0006833387

	
Chili Pepper Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674792

	
French Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833392

	
French Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676784

	
Gourmet Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833397

	
Gourmet Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674803

	
Grow Bulbs (2)

	
09/28/2007

	
Registered

	
VA0001674808

	
Grow Bulb (1)

	
09/28/2007

	
Registered

	
TX0006833380

	
Herb Appeal

	
09/28/2007

	
Registered

	
PA0001602428

	
Herb Appeal

	
09/28/2007

	
Registered

	
VA0001674793

	
International Basil Seed Kit

	
09/28/2007

	
Registered

	
TX0006833407

	
International Basil Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674799

	
Italian Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833410

	
Italian Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674800

	
Japanese Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833412

	
Japanese Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676787

	
Master Gardener Deluxe

	
09/28/2007

	
Registered

	
TX0006833139

	
Master Gardener Deluxe Guide

	
09/28/2007

	
Registered

	
TX0006833376

	
Quick Start Guide

	
09/28/2007

	
Registered

	
TX0006833137

	
Salad Bar Series Tending & Harvesting Guide

	
09/28/2007

	
Registered

 

  

  

  

 

	
C.

	
Trademarks

	
Reg. No.

	
Serial No.

	
Name of Mark

	
Filing Date (MM/DD/YYYY)

	
Status

	
-

	
78955692

	
GROWNOW

	
08/18/2006

	
Abandoned

	
-

	
78955675

	
MINIGARDEN

	
08/18/2006

	
Abandoned

	
3455606

	
78882877

	
FARMER’S MARKET FRESH

	
05/12/2006

	
Active

	
-

	
78874379

	
INTERNATIONAL GOURMET

	
05/02/2006

	
Abandoned

	
-

	
78836826

	
FARMER’S MARKET IN YOUR KITCHEN

	
03/14/2006

	
Abandoned

	
-

	
78836758

	
OFF THE PLANT AND INTO THE POT

	
03/14/2006

	
Abandoned

	
-

	
78836736

	
CUT & COOK

	
03/14/2006

	
Abandoned

	
3525830

	
78836718

	
BIO-DOME

	
03/14/2006

	
Active

	
-

	
78836659

	
WE GROW GREEN THUMBS

	
03/14/2006

	
Abandoned

	  	
78836577

	
AEROPOD

	
03/14/2006

	
Abandoned

	
-

	
78781094

	
KITCHENHARVEST

	
12/27/2005

	
Abandoned

	
-

	
78697306

	
KITCHEN SMART

	
08/22/2005

	
Abandoned

	
-

	
78671280

	
FARMERS MARKET FRESH

	
07/15/2005

	
Abandoned

	
-

	
77720608

	
AEROFOOD

	
09/01/2009

	
Abandoned

	
-

	
77655735

	
GROW ANYTHING, ANYTIME, ANYWHERE

	
01/23/2009

	
Abandoned

	
3773031

	
77651442

	
VEGGIEPRO

	
01/16/2009

	
Active

	
-

	
77584019

	
GREENSPACE

	
10/02/2008

	
Abandoned

	
-

	
77550972

		
08/19/2008

	
Abandoned

	
-

	
77550953

	
GIFT THAT KEEPS ON GROWING

	
08/19/2008

	
Abandoned

	
-

	
77550941

	
FRESH AIR

	
08/19/2008

	
Abandoned

	
3633031

	
77550915

	
HERB 'N SAVE

	
08/19/2008

	
Active

	
-

	
77478932

	
SLEEPGARDEN

	
05/20/2008

	
Abandoned

	
3570754

	
77476610

	
HERB 'N ICE

	
05/16/2008

	
Active

	
-

	
77464412

	
PATIOPONICS

	
05/02/2008

	
Abandoned

	
-

	
77440754

	
PLANT PILLOW

	
04/04/2008

	
Abandoned

	
-

	
77347256

	
MASTER CHEF IN A BOX

	
12/07/2007

	
Abandoned

	
3522253

	
77347195

	
AGS ADVANCED GROWING SYSTEM

	
12/07/2007

	
Active

	
3573608

	
77304572

	
CHEF IN A BOX

	
10/15/2007

	
Active

	
3573607

	
77304513

	
FLORIST IN A BOX

	
10/15/2007

	
Active

	
-

	
77304325

	
ADAPTIVE INTELLIGENCE

	
10/15/2007

	
Abandoned

	
-

	
77304131

	
SNIP IT CHOP IT HERB IT UP!

	
10/15/2007

	
Abandoned

	
-

	
77304079

		
10/15/2007

	
Abandoned

	
-

	
77304040

	
ORGANIC AIR

	
10/15/2007

	
Abandoned

	
-

	
77304030

	
AERO-FRESH

	
10/15/2007

	
Abandoned

	
3528760

	
77304010

	
MOUNTAIN MEADOW

	
10/15/2007

	
Active

	
3592304

	
77303344

	
SPLASH OF COLOR

	
10/12/2007

	
Active

	
3592303

	
77303340

	
ENGLISH COTTAGE

	
10/12/2007

	
Active

	
-

	
77303337

	
WHITE SATIN

	
10/12/2007

	
Abandoned

	
3659815

	
77303332

	
RED VELVET

	
10/12/2007

	
Active

	
-

	
77301478

	
CORNER MARKET

	
10/11/2007

	
Abandoned

	
-

	
77238322

	
HERB IT & SERVE IT

	
07/25/2007

	
Abandoned

	
3592160

	
77238309

	
HERB IT UP

	
07/25/2007

	
Active

	
-

	
77229666

	
MINIGARDEN

	
07/13/2007

	
Abandoned

	
-

	
77202957

	
AEROFLOWER

	
06/11/2007

	
Abandoned

	
3568213

	
77185032

	
FLORIST IN A BOX

	
05/18/2007

	
Active

	
3413666

	
77170403

	
VEG-E-GARDEN

	
05/01/2007

	
Active

	
-

	
77154135

	
GET THE GARDEN

	
04/11/2007

	
Abandoned

	
-

	
77144237

	
PRODUCE PANTRY

	
03/29/2007

	
Abandoned

	
-

	
77142761

	
EDIBLE PANTRY

	
03/28/2007

	
Abandoned

	
-

	
77132485

	
ULTIMATE KITCHEN GARDEN

	
03/15/2007

	
Abandoned

	
3392651

	
77132449

	
ULTIMATE KITCHEN GARDENER

	
03/15/2007

	
Active

	
-

	
77130024

	
PET NET

	
03/13/2007

	
Abandoned

	
3389625

	
77129826

	
WALL GARDEN

	
03/13/2007

	
Active

	
3389624

	
77129806

	
WALL FARM

	
03/13/2007

	
Active

	
-

	
77129677

	
ADAPTIVE GROWTH INTELLIGENCE

	
03/13/2007

	
Abandoned

	
3373707

	
77127173

	
CHEF IN A BOX

	
03/09/2007

	
Active

	
3376411

	
77095536

	
HERB 'N SERVE

	
01/31/2007

	
Active

	
-

	
77070519

	
EVEN BETTER THAN ORGANIC

	
12/22/2006

	
Abandoned

	
3565083

	
77058534

	
PLUG & GROW

	
12/06/2006

	
Active

	
3370002

	
77058522

	
SWEET RUBIES

	
12/06/2006

	
Active

	
-

	
77045993

	
STRAWBERRY PATCH

	
11/16/2006

	
Abandoned

	
3524683

	
77045636

	
HERB APPEAL

	
11/16/2006

	
Active

	
-

	
77009465

	
BIOTRANSPORT

	
09/28/2006

	
Abandoned

	
-

	
77007729

	
GREEN THUMB GUARANTEE

	
09/26/2006

	
Abandoned

 

  

  

  

 

Domain Names:

	
DomainName

	
CreateDate

	
ExpirationDate

	
Status

	
365GARDENING.COM

	
10/27/2008

	
10/27/2013

	
Active

	
AEROGR.COM

	
5/14/2010

	
5/14/2013

	
Active

	
AGIMARKETING.COM

	
2/24/2005

	
7/1/2013

	
Active

	
BUYTHEGARDEN.COM

	
8/29/2006

	
8/29/2013

	
Active

	
GETTHEGARDEN.COM

	
8/29/2006

	
8/29/2013

	
Active

	
GROWFLOWERS.CA

	
6/22/2011

	
6/22/2013

	
Active

	
GROWFRESH.COM

	
10/30/2006

	
7/1/2013

	
Active

	
GROWFRESHNOW.COM

	
6/7/2007

	
6/7/2013

	
Active

	
GROWNOW.COM

	
6/14/2004

	
6/14/2013

	
Active

	
INDOORGARDENDEAL.COM

	
11/11/2009

	
11/11/2013

	
Active

	
INDOORGARDENDEALS.COM

	
11/17/2009

	
11/17/2013

	
Active

	
ULTIMATEKITCHENGARDEN.COM

	
6/12/2007

	
6/12/2013

	
Active

	
ULTIMATEKITCHENGARDENER.COM

	
6/12/2007

	
6/12/2013

	
Active

 

  

  

  

 

	
D.

	
Technical Information

Software rights for AeroGarden ULTRA software, and the programs and operational settings for all AeroGrow gardens, are owned by AeroGrow.  The software may control grow-light timer settings, pump/bubbler settings, nutrient timer settings, bulb-replace timer settings, garden-type settings, and alert LEDs.  The ULTRA adds customizability, time-sensitive tips, and a detailed user interface and control screen.  There is no relevant documentation.

List of software:  AG ULTRA, AG Extra, AG 7, Pro 100, AG 6, Space Saver 6, AG3, Ultimate Kitchen Garden, and Veggie Pro (including source code)

  

  

  

 

APPENDIX B

EXCLUDED TRADEMARKS & DOMAIN NAMES

 

1.           Marks

	
Reg. No.

	
Serial No.

	
Name of Mark

	
Filing Date (MM/DD/YYYY)

	
Status

	
3252527

	
78781935

	
AEROGARDEN

	
12/28/2005

	
Active

	
-

	
78697314

	
AEROGROWN

	
08/22/2005

	
Active

	
-

	
78697293

	
AEROGROW SMART

	
08/22/2005

	
Active

	
-

	
78697264

	
AEROGROW SMART GARDEN

	
08/22/2005

	
Active

	
-

	
78654377

	
AEROGROW KITCHEN GARDEN

	
06/20/2005

	
Abandoned

	
3412797

	
78614573

	
AEROGROW

	
04/22/2005

	
Active

	
3710117

	
77573358

	
AEROGARDEN ANTICS

	
09/18/2008

	
Active

	
-

	
77304395

	
AEROGARDEN MINI

	
10/15/2007

	
Abandoned

	
3632111

	
77229682

	
AEROGARDEN

	
07/13/2007

	
Active

	
3322684

	
77073448

	
AEROGARDEN

	
12/29/2006

	
Active

	
3311062

	
77073424

	
AEROGARDEN

	
12/29/2006

	
Active

	
3311054

	
77073362

	
AEROGARDEN

	
12/29/2006

	
Active

	
3568085

	
77073345

	
AEROGARDEN

	
12/29/2006

	
Active

	
-

	
77073339

	
AEROGARDEN

	
12/29/2006

	
Active

	
-

	
77073259

	
AEROGARDEN

	
12/29/2006

	
Active

 

  

  

  

 

	
2.

	
Domain Names

	
DomainName

	
CreateDate

	
ExpirationDate

	
Status

	
AERO-GARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
AEROGARDEN.CA

	
9/12/2007

	
9/12/2013

	
Active

	
AEROGARDEN.COM

	
1/12/2005

	
7/1/2013

	
Active

	
AEROGARDEN.NET

	
2/11/2005

	
7/1/2013

	
Active

	
AEROGARDEN.ORG

	
12/28/2005

	
12/28/2013

	
Active

	
AEROGARDEN.TV

	
4/6/2006

	
4/6/2013

	
Active

	
AEROGARDEN.US

	
12/28/2005

	
12/27/2013

	
Active

	
AEROGARDEN3.COM

	
7/8/2009

	
7/8/2013

	
Active

	
AEROGARDEN365.COM

	
5/14/2008

	
5/14/2013

	
Active

	
AEROGARDENBLOG.COM

	
5/29/2009

	
5/29/2013

	
Active

	
AEROGARDENBULBS.COM

	
7/20/2007

	
7/20/2013

	
Active

	
AEROGARDENCANADA.CA

	
6/8/2009

	
6/8/2013

	
Active

	
AEROGARDENCANADA.COM

	
2/23/2007

	
2/23/2014

	
Active

	
AEROGARDENCATALOG.COM

	
7/29/2008

	
7/29/2013

	
Active

	
AEROGARDENCLUB.COM

	
3/6/2008

	
3/6/2014

	
Active

	
AEROGARDENCOMMUNITY.COM

	
1/7/2010

	
1/7/2014

	
Active

	
AEROGARDENCOUPONS.COM

	
2/13/2009

	
2/13/2014

	
Active

	
AEROGARDENDIRECT.CA

	
5/16/2008

	
5/16/2013

	
Active

	
AEROGARDENDIRECT.COM

	
8/29/2006

	
8/29/2013

	
Active

	
AEROGARDENER.COM

	
12/28/2005

	
7/1/2013

	
Active

	
AEROGARDENER.NET

	
12/28/2005

	
7/1/2013

	
Active

	
AEROGARDENGIFTS.COM

	
3/31/2008

	
3/31/2014

	
Active

	
AEROGARDENGROWBULBS.COM

	
7/20/2007

	
7/20/2013

	
Active

	
AEROGARDENGROWLIGHTS.COM

	
1/18/2011

	
1/18/2014

	
Active

	
AEROGARDENIDEAS.COM

	
11/10/2008

	
11/10/2013

	
Active

	
AEROGARDENIMAGES.COM

	
11/3/2010

	
11/3/2013

	
Active

	
AEROGARDENING.COM

	
12/28/2005

	
7/1/2013

	
Active

	
AEROGARDENMINI.COM

	
8/30/2007

	
8/30/2013

	
Active

	
AEROGARDENNUTRIENTS.COM

	
1/18/2011

	
1/18/2014

	
Active

	
AEROGARDENOFFERS.COM

	
2/18/2008

	
2/18/2014

	
Active

	
AEROGARDENONLINE.COM

	
9/27/2006

	
9/27/2013

	
Active

	
AEROGARDENONLINESTORE.COM

	
9/27/2006

	
9/27/2013

	
Active

	
AEROGARDENOUTLET.COM

	
1/20/2009

	
1/20/2014

	
Active

	
AEROGARDENREVIEWS.COM

	
12/9/2008

	
12/9/2013

	
Active

	
AEROGARDENS.COM

	
8/28/2006

	
8/28/2013

	
Active

	
AEROGARDENS.EU

	
10/15/2008

	
10/31/2014

	
Active

	
AEROGARDENSTORE.COM

	
4/28/2006

	
7/1/2013

	
Active

	
AEROGARDENSUPPORT.COM

	
4/28/2006

	
7/1/2013

	
Active

	
AEROGARDENTHREE.COM

	
7/8/2009

	
7/8/2013

	
Active

	
AEROGARDENTV.COM

	
8/27/2008

	
8/27/2013

	
Active

	
AEROGARDENUTRIENTS.COM

	
1/18/2011

	
1/18/2014

	
Active

	
AEROGARDENVIDEO.COM

	
2/22/2010

	
2/22/2014

	
Active

	
AEROGARDENVIP.COM

	
11/13/2007

	
11/13/2013

	
Active

	
AEROGARDENYOUTUBE.COM

	
11/28/2007

	
11/28/2013

	
Active

	
AEROGRO.COM

	
6/24/2002

	
7/1/2013

	
Active

	
AEROGROW.CO.UK

	
7/20/2012

	
7/20/2013

	
Active

	
AEROGROW.COM

	
6/24/2002

	
7/1/2014

	
Active

	
AEROGROW.NET

	
10/18/2005

	
7/1/2013

	
Active

	
AEROGROWDIRECT.COM

	
8/29/2006

	
8/29/2013

	
Active

	
AEROGROWOUTLET.COM

	
1/20/2009

	
1/20/2014

	
Active

	
AIROGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
AMAZINGAEROGARDEN.COM

	
11/28/2007

	
11/28/2013

	
Active

	
AROGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
AROWGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
ARROGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
ARROWGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
ARROWGROW.COM

	
6/24/2002

	
7/1/2013

	
Active

	
EROGARDEN.COM

	
1/2/2006

	
7/1/2013

	
Active

	
GETTHEAEROGARDEN.COM

	
9/27/2006

	
9/27/2013

	
Active

	
ILOVEMYAEROGARDEN.COM

	
6/19/2008

	
6/19/2013

	
Active

	
MYAEROGARDEN.COM

	
10/3/2012

	
10/3/2013

	
Active

	
THEAEROGARDEN.CA

	
9/16/2008

	
9/16/2013

	
Active

	
THEAEROGARDEN.COM

	
5/26/2006

	
5/26/2013

	
Active

	
THEAEROGARDENSTORE.COM

	
9/27/2006

	
9/27/2013

	
Active

	
aerogarden.fi

	
6/3/2010

	
6/3/2013

	
Active

	
aerogarden.com.br

	
8/4/2009

	
8/4/2013

	
Active

	
aerogarden.mx

	
7/1/2009

	
6/30/2013

	
Active

	
aerogarden.nl

	
3/23/2011

	
8/10/2013

	
Active

	
aerogarden.no

	
11/17/2008

	
9/10/2013

	
Active

	
aerogardens.ch

	
8/3/2010

	
9/29/2013

	
Active

	
aerogardens.fr

	
10/15/2008

	
10/15/2013

	
Active

	
aerogarden.es

	
10/15/2008

	
10/15/2013

	
Active

	
aerogarden.it

	
10/21/2008

	
10/21/2013

	
Active

	
aerogarden.dk

	
10/15/2008

	
10/15/2013

	
Active

	
aerogarden.asia

	
3/26/2008

	
3/26/2014

	
Active

	
aerogarden.hk

	
2/23/2008

	
3/2/2014

	
Active

	
aerogarden.kr

	
10/26/2007

	
10/26/2013

	
Active

	
theaerogarden.fr

	
10/9/2007

	
10/9/2013

	
Active

	
theaerogarden.nl

	
10/8/2007

	
10/8/2013

	
Active

	
aerogarden.ie

	
10/4/2007

	
10/16/2013

	
Active

	
aerogrow.hk

	
9/27/2007

	
8/15/2013

	
Active

	
aerogarden.com.mx

	
7/26/2006

	
7/26/2013

	
Active

	
theaerogarden.eu

	
7/20/2006

	
7/31/2013

	
Active

	
aerogarden.jp

	
7/20/2006

	
7/20/2013

	
Active

	
theaerogarden.com.au

	
10/11/2007

	
10/10/2013

	
Active

	
aerogarden.se

	
7/20/2006

	
7/20/2013

	
Active

	
aerogrow.jp

	
5/13/2011

	
5/11/2013

	
Active

	
aerogarden.co.uk

	
5/29/2007

	
10-Apr-16

	
Active

 

  

  

  

 

APPENDIX C

(Exceptions to reps and warranties)

2.3(a)  First Western Trust Bank has a security interest in the Company Intellectual Property, which must be released or satisfied prior to or contemporaneous with the Closing. GVC Capital,

LLC has a security interest in the Company Intellectual Property, which must be released or satisfied prior to or contemporaneous with the Closing. First Capital has a security interest in the Company Intellectual Property, which must be released or satisfied prior to or contemporaneous with the Closing.

2.3(d) Schedule I to Appendix A identifies those IP Assets that have been abandoned, including without limitation, patents, patent applications, trademarks, and trademark applications.

2.3(g)  The Company does permit use of the Company’s Trademarks by distributors in connection with marketing activities for international distribution of its products.

2.5  The Company’s has enforceable non-compete agreements only with Mike Wolfe, John Thompson, and former Key Employee Greg Clarke.

	  

  

  

  

 

APPENDIX A

INTELLECTUAL PROPERTY ASSIGNMENT

WHEREAS, AeroGrow International, Inc., a Nevada corporation having offices at 6075 Longbow Dr., Suite 200, Boulder, Colorado 80301 (“ASSIGNOR”) owns all right, title and interest in and to the IP Assets (defined below); and

WHEREAS, OMS Investments, Inc., a Delaware corporation having offices at 10250 Constellation Blvd., Suite 2800, Los Angeles, California 90067 (“ASSIGNEE”) is desirous of acquiring ASSIGNOR’s entire right, title and interest in and to the IP Assets;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ASSIGNOR does hereby sell, assign, transfer and set over to ASSIGNEE, its successors and assigns, ASSIGNOR’s entire right, title and interest in and to the IP Assets.

(a) “IP Assets” means all intellectual property rights of any kind, worldwide, owned in whole or in part by ASSIGNOR, including rights in, to and concerning: (a) all patents and patent applications throughout the world (including utility patents, design patents, patents of importation, improvement patents, patents and certificates of addition, and utility models), as well as existing and future divisions, reissues, reexaminations, continuations, continuations-in-part, renewals and extensions of any of the foregoing, and applications therefore, and patents which may be issued on such applications, (b) all trademarks, service marks, trade dress, logos, trade names, corporate names, domain names and/or other source identifiers, all goodwill associated with any of the foregoing, and registrations and applications for registration thereof, including all extensions, modifications and renewals of the foregoing; except for ASSIGNOR’S AEROGROW and AEROGARDEN trademarks which shall continue to be owned by ASSIGNOR, (c) all published and unpublished works of authorship and copyrights therein, and copyright registrations and applications for registration thereof and all renewals, extensions, restorations and reversions thereof; and (d) all know-how, trade secrets, confidential and proprietary information, ideas, inventions, discoveries, formulae, compositions, manufacturing and production processes and techniques, research and development information, reports, drawings, specifications, designs, plans, improvements, proposals, information and analytic methodology used in the development, testing, analysis, design, manufacturing and packaging of products and services, technology, software, computer programs, documentation, databases, data, mask works, financial, business and marketing plans, cost and pricing information, supplier lists and related information, sales data and plans, customer lists, customer accounts, and related information, recorded in any form.  IP Assets includes, but is not limited to, the items listed on Schedule 1 attached hereto.

 

ASSIGNOR hereby covenants that it has the full right to convey the entire interest herein assigned, and that it has not executed, and will not execute, any agreement in conflict with this Intellectual Property Assignment.

The foregoing assignment of IP Assets includes all rights to sue for past, present, and future infringement, including the right to collect and receive any damages, royalties, or settlements for such infringements, all rights to sue for injunctive or other equitable relief, and any and all causes of action relating to any of the IP Assets.

 

  

  

  

 

ASSIGNOR hereby agrees to execute without further consideration any further documents and instruments which may be necessary, lawful and proper to secure to ASSIGNEE its interest and title in the aforementioned IP Assets.

ASSIGNOR hereby agrees to execute without further consideration any further documents and instruments which may be necessary, lawful and proper in the prosecution of the IP Assets or in the preparation or prosecution of any continuation, continuation-in-part, substitute, divisional, renewal, reexamination, or reissue applications or in any amendments, extensions, or interference proceedings, or other applications for patents of any region or country, or that may be necessary to prosecute, protect, or perfect the aforementioned IP Assets.

ASSIGNOR hereby further covenants and agrees that it will communicate to ASSIGNEE any and all facts known to it respecting said IP Assets, and testify in any legal proceeding, sign all lawful papers, execute and deliver all papers and take an actions that may be necessary or desirable to perfect the title to any of the IP Assets.

ASSIGNOR does hereby authorized and request the Director of the United States Patent and Trademark Office, the Director of the United States Copyright Office, and directors of equivalent foreign intellectual property offices, to issue any and all letters patent, trademark registrations, copyright registrations, or similar rights which may be granted upon said IP Assets, or upon any improvements thereto, or any parts thereof, when granted, to said ASSIGNEE.

 

  

  

  

 

IN TESTIMONY WHEREOF, I hereunto set my hand this ____ day of _________, 2013.

AeroGrow International, Inc. (ASSIGNOR)

By:                                                              

Name:                                                              

Title:                                                               

County of                                                              )

)      ss:

State of                                                                  )

On this _________ day of ___________________, 20___, before me, a Notary Public in and for the County and State aforesaid, personally appeared _____________________, to me known and known to me to be the person of that name, who signed and sealed the foregoing instrument, and acknowledged the same to be of his free act and deed.

 

______________________________

Notary Public

(SEAL)

My Commission Expires _________

 

  

  

  

 

IN TESTIMONY WHEREOF, I hereunto set my hand this ____ day of _________, 2013.

OMS Investments, Inc. (ASSIGNEE)

By:                                                              

Name:                                                              

Title:                                                               

County of                                                              )

)      ss:

State of                                                                  )

On this _________ day of ___________________, 20___, before me, a Notary Public in and for the County and State aforesaid, personally appeared _____________________, to me known and known to me to be the person of that name, who signed and sealed the foregoing instrument, and acknowledged the same to be of his free act and deed.

 

______________________________

Notary Public

(SEAL)

My Commission Expires _________

 

  

  

  

SCHEDULE 1

IP ASSETS 

	
A.

	
Patents

U.S. Patents and Applications

	
Patent No.

	
Application No.

	
Publication No.

	
Title

	
Filing Date (MM/DD/YYYY)

	
Status

	
-

	
10/714,786

	
2005/0102895

	
Soil-Less Support Medium and Method for Germinating a Seed

	
11/17/2003

	
Abandoned

	
-

	
11/079,054

	
2005/0241231

	
Methods and Devices for Promoting the Growth of Plant Air Roots

	
03/14/2005

	
Abandoned

	
-

	
11/098,176

	
2005/0246954

	
Devices and Methods for Growing Plants

	
04/04/2005

	
Abandoned

	
-

	
11/111,553

	
2005/0246955

	
Devices and Methods for Growing Plants

	
04/21/2005

	
Abandoned

	
-

	
11/112,269

	
2005/0257424

	
Devices and Methods for Growing Plants

	
04/22/2005

	
Abandoned

	
-

	
10/528,110

	
2006/0179711

	
Devices and Methods for Growing Plants

	
07/15/2005

	
Abandoned

	
D586,688

	
29/235,880

	
-

	
Indoor Gardening Appliance

	
08/08/2005

	
Patented

	
7,818,916

	
11/321,023

	
2006/0254332

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
12/28/2005

	
Patented

	
-

	
11/321,368

	
2006/0254138

	
Devices and Methods for Growing Plants by Measuring Liquid or Nutrient Usage Rate

	
12/28/2005

	
Abandoned

	
-

	
11/455,364

	
2006/0272210

	
Smart Garden Device and Methods for Growing Plants

	
06/19/2006

	
Abandoned

	
-

	
11/653,121

	
2007/0271841

	
Devices and Methods for Growing Plants

	
01/12/2007

	
Abandoned

	
8,261,486

	
11/654,164

	
2007/0271842

	
Systems and Methods for Controlling Liquid Delivery and Distribution to Plants

	
01/16/2007

	
Patented

	
-

	
11/895,972

	
2008/0078118

	
Master Gardener Baskets and Methods for Growing Plants

	
08/28/2007

	
Abandoned

	
D604,196

	
29/292,564

	
-

	
Indoor Gardening Appliance

	
10/17/2007

	
Patented

	
D604,197

	
29/293,343

	
-

	
Indoor Gardening Appliance

	
11/16/2007

	
Patented

	
-

	
12/002,543

	
2008/0276534

	
Devices and Methods for Growing Plants by Measuring Liquid Consumption

	
12/17/2007

	
Abandoned

	
-

	
12/073,984

	
2008/0282610

	
Devices and Methods for Growing Plants

	
03/12/2008

	
Abandoned

	
-

	
12/073,985

	
2008/0222949

	
Devices and Methods for Growing Plants

	
03/12/2008

	
Abandoned

	
-

	
12/073,987

	
2008/0155894

	
Soil-Less Seed Support Medium and Method for Germinating a Seed

	
03/12/2008

	
Abandoned

	
-

	
12/261,821

	
2009/0151248

	
Devices and Methods for Growing Plants

	
10/30/2008

	
Abandoned

	
8,091,275

	
12/911,590

	
2011/0036009

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
10/25/2010

	
Patented

 

  

  

  

 

Foreign Patents and Applications

	
Application/ Publication No.

	
Patent No.

	
Title

	
Publication Date (MM/DD/YYYY)

	
Status

	
PCT/US2004/030168

	
WO 2005/055700

	
Devices and Methods for Growing Plants

	
06/23/2005

	
Abandoned

	
B.

	
Copyrights

	
Reg. No.

	
Description

	
Reg. Date (MM/DD/YYYY)

	
Status

	
VA0001674819

	
Cascading Petunias Seed Kit

	
09/28/2007

	
Registered

	
TX0006833384

	
Cascading Petunias Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674791

	
Cherry Tomato Seed Kit

	
09/28/2007

	
Registered

	
TX0006833400

	
Cherry Tomato Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676754

	
Chili Pepper Seed Kit

	
09/28/2007

	
Registered

	
TX0006833387

	
Chili Pepper Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674792

	
French Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833392

	
French Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676784

	
Gourmet Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833397

	
Gourmet Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674803

	
Grow Bulbs (2)

	
09/28/2007

	
Registered

	
VA0001674808

	
Grow Bulb (1)

	
09/28/2007

	
Registered

	
TX0006833380

	
Herb Appeal

	
09/28/2007

	
Registered

	
PA0001602428

	
Herb Appeal

	
09/28/2007

	
Registered

	
VA0001674793

	
International Basil Seed Kit

	
09/28/2007

	
Registered

	
TX0006833407

	
International Basil Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674799

	
Italian Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833410

	
Italian Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001674800

	
Japanese Herb Seed Kit

	
09/28/2007

	
Registered

	
TX0006833412

	
Japanese Herb Tending & Harvesting Guide

	
09/28/2007

	
Registered

	
VA0001676787

	
Master Gardener Deluxe

	
09/28/2007

	
Registered

	
TX0006833139

	
Master Gardener Deluxe Guide

	
09/28/2007

	
Registered

	
TX0006833376

	
Quick Start Guide

	
09/28/2007

	
Registered

	
TX0006833137

	
Salad Bar Series Tending & Harvesting Guide

	
09/28/2007

	
Registered

 

  

  

  

 

	
C.

	
Trademarks

	
Reg. No.

	
Serial No.

	
Name of Mark

	
Filing Date (MM/DD/YYYY)

	
Status

	
-

	
78955692

	
GROWNOW

	
08/18/2006

	
Abandoned

	
-

	
78955675

	
MINIGARDEN

	
08/18/2006

	
Abandoned

	
3455606

	
78882877

	
FARMER’S MARKET FRESH

	
05/12/2006

	
Active

	
-

	
78874379

	
INTERNATIONAL GOURMET

	
05/02/2006

	
Abandoned

	
-

	
78836826

	
FARMER’S MARKET IN YOUR KITCHEN

	
03/14/2006

	
Abandoned

	
-

	
78836758

	
OFF THE PLANT AND INTO THE POT

	
03/14/2006

	
Abandoned

	
-

	
78836736

	
CUT & COOK

	
03/14/2006

	
Abandoned

	
3525830

	
78836718

	
BIO-DOME

	
03/14/2006

	
Active

	
-

	
78836659

	
WE GROW GREEN THUMBS

	
03/14/2006

	
Abandoned

	  	
78836577

	
AEROPOD

	
03/14/2006

	
Abandoned

	
-

	
78781094

	
KITCHENHARVEST

	
12/27/2005

	
Abandoned

	
-

	
78697306

	
KITCHEN SMART

	
08/22/2005

	
Abandoned

	
-

	
78671280

	
FARMERS MARKET FRESH

	
07/15/2005

	
Abandoned

	
-

	
77720608

	
AEROFOOD

	
09/01/2009

	
Abandoned

	
-

	
77655735

	
GROW ANYTHING, ANYTIME, ANYWHERE

	
01/23/2009

	
Abandoned

	
3773031

	
77651442

	
VEGGIEPRO

	
01/16/2009

	
Active

	
-

	
77584019

	
GREENSPACE

	
10/02/2008

	
Abandoned

	
-

	
77550972

	
[Missing Graphic Reference]

	
08/19/2008

	
Abandoned

	
-

	
77550953

	
GIFT THAT KEEPS ON GROWING

	
08/19/2008

	
Abandoned

	
-

	
77550941

	
FRESH AIR

	
08/19/2008

	
Abandoned

	
3633031

	
77550915

	
HERB 'N SAVE

	
08/19/2008

	
Active

	
-

	
77478932

	
SLEEPGARDEN

	
05/20/2008

	
Abandoned

	
3570754

	
77476610

	
HERB 'N ICE

	
05/16/2008

	
Active

	
-

	
77464412

	
PATIOPONICS

	
05/02/2008

	
Abandoned

	
-

	
77440754

	
PLANT PILLOW

	
04/04/2008

	
Abandoned

	
-

	
77347256

	
MASTER CHEF IN A BOX

	
12/07/2007

	
Abandoned

	
3522253

	
77347195

	
AGS ADVANCED GROWING SYSTEM

	
12/07/2007

	
Active

	
3573608

	
77304572

	
CHEF IN A BOX

	
10/15/2007

	
Active

	
3573607

	
77304513

	
FLORIST IN A BOX

	
10/15/2007

	
Active

	
-

	
77304325

	
ADAPTIVE INTELLIGENCE

	
10/15/2007

	
Abandoned

	
-

	
77304131

	
SNIP IT CHOP IT HERB IT UP!

	
10/15/2007

	
Abandoned

	
-

	
77304079

	
[Missing Graphic Reference]

	
10/15/2007

	
Abandoned

	
-

	
77304040

	
ORGANIC AIR

	
10/15/2007

	
Abandoned

	
-

	
77304030

	
AERO-FRESH

	
10/15/2007

	
Abandoned

	
3528760

	
77304010

	
MOUNTAIN MEADOW

	
10/15/2007

	
Active

	
3592304

	
77303344

	
SPLASH OF COLOR

	
10/12/2007

	
Active

	
3592303

	
77303340

	
ENGLISH COTTAGE

	
10/12/2007

	
Active

	
-

	
77303337

	
WHITE SATIN

	
10/12/2007

	
Abandoned

	
3659815

	
77303332

	
RED VELVET

	
10/12/2007

	
Active

	
-

	
77301478

	
CORNER MARKET

	
10/11/2007

	
Abandoned

	
-

	
77238322

	
HERB IT & SERVE IT

	
07/25/2007

	
Abandoned

	
3592160

	
77238309

	
HERB IT UP

	
07/25/2007

	
Active

	
-

	
77229666

	
MINIGARDEN

	
07/13/2007

	
Abandoned

	
-

	
77202957

	
AEROFLOWER

	
06/11/2007

	
Abandoned

	
3568213

	
77185032

	
FLORIST IN A BOX

	
05/18/2007

	
Active

	
3413666

	
77170403

	
VEG-E-GARDEN

	
05/01/2007

	
Active

	
-

	
77154135

	
GET THE GARDEN

	
04/11/2007

	
Abandoned

	
-

	
77144237

	
PRODUCE PANTRY

	
03/29/2007

	
Abandoned

	
-

	
77142761

	
EDIBLE PANTRY

	
03/28/2007

	
Abandoned

	
-

	
77132485

	
ULTIMATE KITCHEN GARDEN

	
03/15/2007

	
Abandoned

	
3392651

	
77132449

	
ULTIMATE KITCHEN GARDENER

	
03/15/2007

	
Active

	
-

	
77130024

	
PET NET

	
03/13/2007

	
Abandoned

	
3389625

	
77129826

	
WALL GARDEN

	
03/13/2007

	
Active

	
3389624

	
77129806

	
WALL FARM

	
03/13/2007

	
Active

	
-

	
77129677

	
ADAPTIVE GROWTH INTELLIGENCE

	
03/13/2007

	
Abandoned

	
3373707

	
77127173

	
CHEF IN A BOX

	
03/09/2007

	
Active

	
3376411

	
77095536

	
HERB 'N SERVE

	
01/31/2007

	
Active

	
-

	
77070519

	
EVEN BETTER THAN ORGANIC

	
12/22/2006

	
Abandoned

	
3565083

	
77058534

	
PLUG & GROW

	
12/06/2006

	
Active

	
3370002

	
77058522

	
SWEET RUBIES

	
12/06/2006

	
Active

	
-

	
77045993

	
STRAWBERRY PATCH

	
11/16/2006

	
Abandoned

	
3524683

	
77045636

	
HERB APPEAL

	
11/16/2006

	
Active

	
-

	
77009465

	
BIOTRANSPORT

	
09/28/2006

	
Abandoned

	
-

	
77007729

	
GREEN THUMB GUARANTEE

	
09/26/2006

	
Abandoned

 

  

  

  

 

Domain Names:

	
DomainName

	
CreateDate

	
ExpirationDate

	
Status

	
365GARDENING.COM

	
10/27/2008

	
10/27/2013

	
Active

	
AEROGR.COM

	
5/14/2010

	
5/14/2013

	
Active

	
AGIMARKETING.COM

	
2/24/2005

	
7/1/2013

	
Active

	
BUYTHEGARDEN.COM

	
8/29/2006

	
8/29/2013

	
Active

	
GETTHEGARDEN.COM

	
8/29/2006

	
8/29/2013

	
Active

	
GROWFLOWERS.CA

	
6/22/2011

	
6/22/2013

	
Active

	
GROWFRESH.COM

	
10/30/2006

	
7/1/2013

	
Active

	
GROWFRESHNOW.COM

	
6/7/2007

	
6/7/2013

	
Active

	
GROWNOW.COM

	
6/14/2004

	
6/14/2013

	
Active

	
INDOORGARDENDEAL.COM

	
11/11/2009

	
11/11/2013

	
Active

	
INDOORGARDENDEALS.COM

	
11/17/2009

	
11/17/2013

	
Active

	
ULTIMATEKITCHENGARDEN.COM

	
6/12/2007

	
6/12/2013

	
Active

	
ULTIMATEKITCHENGARDENER.COM

	
6/12/2007

	
6/12/2013

	
Active

	
D.

	
Technical Information

Software rights for AeroGarden ULTRA software, and the programs and operational settings for all AeroGrow gardens, are owned by AeroGrow.  The software may control grow-light timer settings, pump/bubbler settings, nutrient timer settings, bulb-replace timer settings, garden-type settings, and alert LEDs.  The ULTRA adds customizability, time-sensitive tips, and a detailed user interface and control screen.  There is no relevant documentation.

List of software:  AG ULTRA, AG Extra, AG 7, Pro 100, AG 6, Space Saver 6, AG3, Ultimate Kitchen Garden, and Veggie Pro (including source code)ex10-2.htm

EXHIBIT 10.2

 

 

 

TECHNOLOGY LICENSE AGREEMENT

 

by and between

 

OMS INVESTMENTS, INC.

 

and

 

AEROGROW INTERNATIONAL, INC.

 

dated as of

 

April 22, 2013

 

  

  

  

 

TECHNOLOGY LICENSE AGREEMENT

 

THIS TECHNOLOGY LICENSE AGREEMENT (“Agreement”) is made as of April 1, 2013 (“Effective Date”) by and between OMS Investments, Inc., a Delaware corporation having offices at 10250 Constellation Blvd., Suite 2800, Los Angeles, California 90067 (“OMS”), and AeroGrow International, Inc., a Nevada corporation having offices at 6075 Longbow Dr., Suite 200, Boulder, Colorado 80301 (“AeroGrow”).  OMS and AeroGrow are sometimes referred to herein collectively as the “Parties” and individually as a “Party.”

RECITALS

 

A.           OMS owns certain Hydroponic IP (as defined below) relating to hydroponic and aeroponic growing systems.

 

B.           AeroGrow desires to obtain from OMS a license to use the Hydroponic IP in connection with the manufacture, marketing and sale of Licensed Products in the Territory.

 

C.           OMS is willing to grant such license to AeroGrow, according to the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1.  DEFINITIONS

 

Capitalized terms in this Agreement shall have the meanings ascribed to them as set forth below in this Article 1, or in the body of this Agreement.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Securities Purchase Agreement.

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

“Brand License Agreement” means that certain Brand License Agreement executed by the Parties concurrently with this Agreement.

“Contract Year” means the one-year period from April 1 of a calendar year to March 31 of the following calendar year.

 

  

  

  

 

“Copyrights” means all published and unpublished works of authorship and copyrights therein, and copyright registrations and applications for registration thereof and all renewals, extensions, restorations and reversions thereof.

“First Contract Year” means April 1, 2013 through March 31, 2014.

“Initial Term” means the term beginning on the Effective Date and ending five (5) years after the Effective Date.

“Hydroponic IP” means the OMS Intellectual Property set forth in Schedule 1 to this Agreement.

“Intellectual Property” means all intellectual property rights of any kind, worldwide, including rights in, to and concerning (a) Patents; (b) Trademarks; (c) Copyrights; and (d) Technical Information.

“Licensed Products” means the AeroGarden 3, the AeroGarden 7, the AeroGarden Extra, the AeroGarden Ultra, any additional aeroponic or hydroponic products developed by AeroGrow in the future, and associated seed kits.

“Net Sales” means the net sales of Licensed Products under U.S. GAAP.

“Patents” means all patents throughout the world (including utility patents, design patents, patents of importation, improvement patents, patents and certificates of addition, and utility models), as well as divisions, reissues, reexaminations, continuations, continuations-in-part, renewals and extensions of any of the foregoing, and applications therefore, and patents which may be issued on such applications.

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

“Protected Information” of a Party means trade secrets and information concerning the Party’s business, technology, and affairs, including without limitation current and historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, Technical Information, the names and backgrounds of key personnel, personnel training techniques and materials and current and historical financial information regarding individual products, services, departments or categories.

“Renewal Term” means a five-year period following the Initial Term.

“Research Purposes” means use of the Hydroponic IP for the purposes of (a) conducting research and development, (b) pursuing regulatory approvals, and (c) pursuing Intellectual Property protection on modifications and improvements to the Hydroponic IP.

“Securities Purchase Agreement” means that certain Securities Purchase Agreement executed between AeroGrow and OMS’s Affiliate, SMG Growing Media, Inc., effective as of _____.

 

  

  

  

 

“Series B Preferred” means the series of preferred stock of AeroGrow designated Series B Convertible Preferred Stock with a par value of $0.001 per share under the Certificate of Designations.

“Series B Preferred Conversion Price” has the meaning ascribed to such term in the Certificate of Designations of Series B Convertible Preferred Stock of AeroGrow (the “Certificate of Designations”).

“Technical Information” means know-how, trade secrets, confidential and proprietary information, ideas, inventions, discoveries, formulae, compositions, manufacturing and production processes and techniques, research and development information, reports, drawings, specifications, designs, plans, improvements, proposals, information and analytic methodology used in the development, testing, analysis, design, manufacturing and packaging of products and services, technology, software, computer programs, documentation, databases, data, mask works, financial, business and marketing plans, cost and pricing information, supplier lists and related information, sales data and plans, customer lists, customer accounts, and related information, recorded in any form.

“Term” means the Initial Term and any properly obtained Renewal Terms.

“Territory” means (a) North America and (b) on a country-by-country basis, all European countries including the United Kingdom, but excluding France and Germany, under the following conditions: (i) AeroGrow has an established European distributor for such country under a contract approved in writing by OMS, (ii) AeroGrow and OMS mutually agree in writing on annual sales volume requirements for such country, (iii) OMS has the right to terminate AeroGrow’s rights in such country if such annual sales volume requirements are not met, or for any other reason, and (iv) OMS has not already commenced sales of Licensed Products in such country.

“Trademark” means a trademark, service mark, trade dress, logo, trade name, corporate name, domain name and/or other source identifier, all goodwill associated with any of the foregoing, and registrations and applications for registration thereof, including all extensions, modifications and renewals of the foregoing.

“U.S. GAAP” means United States generally accepted accounting principles and practices applied consistently throughout the periods involved.

2.  LICENSE GRANT TO AEROGROW

 

2.1           License Grant.  Subject to the terms and conditions of this Agreement, OMS hereby grants to AeroGrow an exclusive license under the Hydroponic IP to make, use, sell, distribute, offer to sell, and import Licensed Products in the Territory during the Term of this Agreement.  Notwithstanding the foregoing exclusive license, OMS reserves the right for OMS and its Affiliates and contractors to use the Hydroponic IP to make and use products in the Territory, but only for Research Purposes.

 

  

  

  

 

2.2           No Right to Sublicense.  The license grant in Section 2.1 does not include the right for AeroGrow to grant sublicenses to others to use the Hydroponic IP in any manner or in connection with any goods or services, but Licensee may permit the distribution by third party distributors of Licensed Products in accordance with this Agreement.

 

2.3           Reservation of Rights.  OMS reserves all rights with respect to the Hydroponic IP not expressly licensed to AeroGrow hereunder.

 

2.4           Restriction on Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their successors or assigns; provided that AeroGrow may assign this Agreement only if OMS provides prior and specific written consent, which consent may be withheld in OMS’s sole and absolute discretion.  Any assignment or transfer not expressly permitted by this Section 2.4 is prohibited and will be deemed to be null and void.

 

2.5           Use of Contract Manufacturers.

 

	
  

	
(a)

	
Subject to the exception in Section 2.5(b), AeroGrow shall not use the services of contract manufacturers in the manufacture of the Licensed Products unless OMS approves such contract manufacturers, specifically and in writing, before AeroGrow engages such contract manufacturers.  AeroGrow shall require any approved contract manufacturers to execute an agreement to manufacture the Licensed Products, and the agreement must be in a form approved by OMS before the agreement is presented to the contract manufacturer.

 

	
  

	
(b)

	
AeroGrow shall be permitted to continue to use the services of its current contract manufacturers as of the Securities Purchase Agreement effective date; provided that (i) AeroGrow shall require such contract manufacturers to promptly execute the agreement identified in Section 2.5(a) to the extent such agreement is not already in place or is unacceptable to OMS, and (ii) OMS shall have the right to terminate any such existing contract manufacturer to the extent that such existing contract manufacturer is the cause of a material deficiency in manufacturing of Licensed Products.

 

3.  PAYMENTS AND REPORTS

 

3.1           Royalty Payment.  AeroGrow shall pay OMS a royalty of two percent (2%) times Net Sales of Licensed Products (“Royalty”) sold by AeroGrow during the Term of this Agreement.

3.2           Timing of Payments.  Royalties shall be payable annually for each Contract Year.  No later than April 15th of each Contract Year after the First Contract Year, and April 15th after expiration or termination of the Agreement for any reason, AeroGrow shall provide OMS with a Royalty report including the Net Sales figures for the prior Contract Year and the current Contract Year, itemized according to each product and country, and shall provide in such report all other information and calculations (including the calculation of Net Sales) necessary to allow OMS to verify the accuracy of the Royalty calculation.  Concurrently with providing each such report, AeroGrow shall pay OMS the Royalties for the prior Contract Year.

 

  

  

  

 

3.3           Form of Payment.  For Royalties and other fees due under this Agreement and accrued in Contract Years 1-4 shall be payable by AeroGrow to OMS, or to an OMS Affiliate designated in writing by OMS, in shares of AeroGrow’s common stock, par value $0.001 per share “Common Stock”), at the then-current Series B Preferred Conversion Price, and such fees must be paid in accordance with U.S. tax laws and any other relevant tax laws.  For purposes of clarity, the Series B Preferred Conversion Price shall be calculated as provided under the Certificate of Designations, regardless of whether any shares of Series B Convertible Stock are then outstanding and regardless of whether the Certificate of Designations is then an effective part of the Articles of Incorporation of AeroGrow.  Until this Agreement is terminated or expires, AeroGrow shall deliver to OMS the certificate of adjustment referred to in Section 4(k) of the Certificate of Designations, regardless of whether the Series B Preferred is then convertible pursuant to Section 4 of the Certificate of Designations.  Royalties and other fees due under this Agreement and accrued in Contract Year 5 or subsequent Contract Years shall be payable by AeroGrow to OMS, or to an OMS Affiliate designated in writing by OMS, in cash (US dollars), and such fees must continue to be paid in accordance with U.S. tax laws and any other relevant tax laws.

3.4           Interest on Late Payments.  If AeroGrow fails to make any payment to OMS hereunder on the due date for payment, without prejudice to any other right or remedy available to OMS, AeroGrow shall pay OMS interest on all such overdue amounts from the due date of such amounts until paid at a twelve percent (12%) rate per annum.

3.5           Records and Audit.  AeroGrow shall keep, maintain and preserve, at its place of business identified above, during the Initial Term, during any Renewal Terms, and for at least three (3) years following termination or expiration of this Agreement for any reason, complete and accurate books, accounts, records and other materials covering all transactions related to this Agreement, including but not limited to the information contained in or related to the accounting for and payment of Royalties, which may include customer records, invoices, correspondence and banking, financial and other records in AeroGrow’s possession or under its control (the “Records”).  During the Initial Term, during any Renewal Terms, and for three (3) years following termination or expiration of this Agreement for any reason, OMS and/or an independent third party representative of OMS, upon three (3) days’ notice and during regular business hours, shall have the right once per year to conduct an audit of the Records.  Following the audit, AeroGrow shall take immediate steps to timely resolve any issues raised therein, including payment of any monies owing and due.  OMS shall bear the costs of the audit, provided, however, that if an audit reveals an underpayment of more than five (5%) percent of the total amount payable for any Contract Year, then AeroGrow shall bear the expense of the audit.

3.6           Currency Conversion.  For purposes of computing the Royalty payment on Net Sales of Licensed Products in any country outside the United States, the Net Sales of such Licensed Products for each calendar quarter shall be converted to U.S. Dollars using the rate of exchange as reported in the Wall Street Journal on the last business day of the applicable calendar quarter.

 

  

  

  

 

4.  DEVELOPMENT OF LICENSED PRODUCTS

 

4.1           Development by AeroGrow.  AeroGrow accepts full responsibility for and agrees to pay all costs it incurs associated with the development, manufacture and promotion of the Licensed Products in the Territory.  AeroGrow will secure all plant, equipment and technical skills necessary for the development and manufacture of the Licensed Products, and OMS shall have no liability or responsibility with respect thereto.

 

4.2           Compliance with Laws.  AeroGrow shall develop, manufacture, package, label, advertise, and sell all Licensed Products in strict compliance with all applicable laws, rules and regulations.  Without limiting the foregoing, the Licensed Products will be manufactured in substantial compliance with all applicable federal, state and local laws and regulations applicable within the Territory, and will not be adulterated or misbranded within the meaning of any federal, state or local laws, rules or regulations applicable within the Territory.  AeroGrow shall obtain any required license or certification under the laws or regulation of the United States and other countries within the Territory.  Unless OMS agrees otherwise in writing, AeroGrow will destroy all inventories of Licensed Products that are not in conformity with any applicable laws, rules or regulations within the Territory.  AeroGrow agrees to notify OMS promptly of any regulatory action of which AeroGrow has knowledge that is taken in relation to it by any federal, state, foreign, county or municipal authority which relates to or affects the development, manufacture, storage, packaging, labeling, advertising, distribution, or sale of the Licensed Products.

 

5.  INTELLECTUAL PROPERTY

 

5.1           Developed IP.

	
  

	
(a)

	
During the Term of this Agreement, AeroGrow shall disclose to OMS all technical developments, inventions and improvements made by AeroGrow relating to the Licensed Products.  AeroGrow shall be responsible, at its expense, for filing, prosecution, registration, maintenance and other protection and/or perfection of Intellectual Property rights relating such developments, inventions and improvements (“Developed IP”).  AeroGrow shall provide to OMS quarterly during the term of this Agreement a report of all Developed IP created during the previous quarter and a proposed plan and strategy for securing Intellectual Property protection on such Developed IP.

	
  

	
(b)

	
AeroGrow shall provide OMS with copies of all relevant file histories, correspondence, and other papers related to the Developed IP during the Term of this Agreement.  AeroGrow shall promptly provide to OMS all information received concerning the institution or possible institution of any opposition, re-examination, reissue, review, revocation, interference, nullification or any other official proceeding involving any of the Developed IP anywhere in the Territory.  AeroGrow agrees to provide OMS with copies of substantive communications, search reports and third party observations submitted to or received from intellectual property offices during the Term of this Agreement.  AeroGrow shall also provide OMS an opportunity to review and comment on all substantive responses to the intellectual property offices with respect to Developed IP and AeroGrow shall consider in good faith all such comments received from OMS.

 

  

  

  

 

	
  

	
 (c)

	
If AeroGrow wishes to discontinue the prosecution of any patent application or maintenance of any patent included within the Developed IP, or otherwise declines to pursue Intellectual Property protection (e.g., by deciding not to file a patent application) AeroGrow shall promptly notify OMS and supply OMS with all relevant information, including copies of all written communications with the government patent office or offices involved.  OMS shall then have the right, but not the obligation, to file, maintain or continue prosecution of such application or maintain such patent application or patent, and AeroGrow shall assign all of its right, title and interest in such application to OMS at no additional cost to OMS.  AeroGrow shall fully cooperate with OMS in such filing, maintenance, and/or prosecution, including the execution and provision of all documents OMS deems necessary for such filing, prosecution and/or maintenance.

	
  

	
(d)

	
OMS shall have a right of first refusal (“ROFR”) to purchase or otherwise acquire any Developed IP owned by AeroGrow.  In the event that AeroGrow intends to begin negotiations for sale of all or a portion of the Developed IP with any third party, AeroGrow shall promptly provide to OMS written notice and any copies of such third party offer (suitably redacted to remove the name) offered by such third party and shall provide OMS with an opportunity to discuss such transaction and make a proposal to AeroGrow.  If the Parties are unable to agree on a non-binding term sheet within 20 business days following OMS’s receipt of such notice, AeroGrow shall have the right to conclude such transaction with the third party within a period of 90 days.  If such transaction does not close within such period, OMS shall have another ROFR.  The ROFR shall become effective as of the Effective Date of this Agreement and shall remain in force during the Term of this Agreement.

5.2           IP Enforcement.  If, during the term of this Agreement, either Party becomes aware of any actual or threatened infringement or misappropriation of any Hydroponic IP or Developed IP by any third party that impacts the Licensed Products or their use, the following provisions shall apply: 

	
  

	
(a)

	
The Party having such knowledge shall promptly give notice to the other Party, with all available details.

	
  

	
(b)

	
To the extent that the infringement concerns the Hydroponic IP, OMS, as the owner of the Hydroponic IP, shall have the right to enforce the Hydroponic IP, and AeroGrow, as the exclusive licensee, shall join any such enforcement action if requested by OMS.  AeroGrow agrees to cooperate with OMS by taking such actions as may be reasonably necessary, including but not limited to, producing relevant documents and signing all necessary papers and ensuring that its employees and agents also take such action.  In the event any monetary recovery in connection with such infringement action is obtained, such recovery shall be applied in the following priority: (i) to reimburse OMS to the extent of its out-of-pocket expenses (including reasonable attorneys’ fees) in prosecuting such infringement or misappropriation, (ii) ninety percent (90%) of the balance shall be paid to the OMS; and (iii) ten percent (10%) of the balance shall be paid to AeroGrow as exclusive licensee.

 

  

  

  

 

	
  

	
(c)

	
If OMS determines, in its discretion, not to enforce the Hydroponic IP against any such infringement in the Territory, AeroGrow, as the exclusive licensee of the Hydroponic IP in the Territory, shall have the right to enforce such Hydroponic IP that OMS has determined not to enforce in the Territory.  OMS shall make such determination within six (6) months of written notice from AeroGrow describing such infringement and the relevant Hydroponic IP.  If OMS declines, then OMS, as the owner, shall join any such enforcement action by AeroGrow (at the expense of AeroGrow) if requested by AeroGrow.  OMS agrees to cooperate with AeroGrow (at the expense of AeroGrow) by taking such actions as may be reasonably necessary, including but not limited to, producing relevant documents and signing all necessary papers and ensuring that its employees and agents also take such action.  In the event any monetary recovery in connection with such infringement action is obtained, such recovery shall be applied in the following priority: (i) to reimburse AeroGrow to the extent of its out-of-pocket expenses (including reasonable attorney’s fees) in prosecuting such infringement or misappropriation, (ii) fifty percent (50%) of the balance shall be paid to the AeroGrow; and (iii) fifty percent (50%) of the balance shall be paid to OMS.  If AeroGrow has not filed suit to enforce the Hydroponic IP within six (6) months after OMS has declined, then the right to enforce the Hydroponic IP in the Territory shall revert to OMS.

	
  

	
(d)

	
To the extent that the infringement concerns the Developed IP, the Parties shall meet to discuss and agree upon an appropriate course of action, and each Party shall provide reasonable assistance to the other Party with respect to enforcement of the Developed IP.

	
  

	
(e)

	
The Parties shall keep one another informed of the status of their respective activities regarding any litigation or settlement thereof concerning enforcement of the Hydroponic IP and the Developed IP; provided, that no settlement or consent judgment or other voluntary final disposition of any suit defended or action brought by a Party pursuant to this Article 5 may be entered into without the consent of the other Party if such settlement would require the other Party to be subject to an injunction or to make a monetary payment or an admission of wrongdoing or would otherwise adversely affect the other Party’s rights under this Agreement.

6.  INSURANCE

AeroGrow agrees to obtain and maintain, at its own cost and expense, Commercial General Liability Insurance (including Excess/Umbrella Insurance) in the amount not less than Five Million Dollars ($5,000,000) covering bodily injury, property damage, products -  completed operations and personal injury, including death resulting there from and Automobile Liability in an amount not less than one million dollars ($1,000,000) covering bodily injury and property damage.  This required insurance shall be written by companies licensed to do business in the state in which the service will be provided and shall have a Best’s Key rating of no less than A-VII.  Such policy shall name OMS as Additional Insured including providing defense costs and be primary with respect to any insurance or self-insurance programs maintained by OMS.  The policy must be endorsed to reflect that the Additional Insured will be provided no less than thirty (30) days advance written notice of cancellation or material change in the policy required to be carried as part of this Agreement.  AeroGrow shall deliver to OMS a certificate of insurance that specifies the required coverage immediately following execution of this Agreement.  AeroGrow shall also obtain and maintain at its own cost and expense, any and all statutorily required insurance, including, but not limited to Workers’ compensation insurance with statutory limits, and Employer’s Liability insurance.  The Commercial General Liability, Automobile Liability and Workers Compensation/Employer’s Liability policy will include a Waiver of Subrogation in favor of OMS.  The limits required to be evidenced do not limit the liability of AeroGrow in any claim or suit.

 

  

  

  

 

7.  CONFIDENTIALITY

 

7.1           Acknowledgment of Confidentiality.  Each Party understands that any Protected Information disclosed to it by the other Party under this Agreement is secret, proprietary and of great value to the disclosing Party, which value may be impaired if the secrecy of the Protected Information is not maintained.  The Party disclosing Protected Information is hereinafter sometimes referred to as the “Disclosing Party” and the Party receiving Protected Information is sometimes hereinafter referred to as the “Receiving Party.”

7.2           Reasonable Security Measures.  Each Party has taken and will continue to take reasonable security measures to preserve and protect the secrecy of the Protected Information, and each Receiving Party agrees to take all measures reasonably necessary to protect the secrecy of a Disclosing Party’s Protected Information in order to prevent it from falling into the public domain or into the possession of persons not bound to maintain the secrecy of such information.

7.3           Non-Disclosure Obligation.  Each Receiving Party agrees not to disclose the Protected Information of the Disclosing Party obtained pursuant to this Agreement, to any person or entity (other than its key officers, and employees and/or their Affiliate to whom disclosure is necessary and which person or entity is bound to confidentiality obligations at least as restrictive as those set forth in this Article 7), while this Agreement is in effect or at any time following the expiration or termination of this Agreement for any reason.

7.4           Burden of Proof.  Each Receiving Party acknowledges and agrees that if it shall disclose, divulge, reveal, report, publish, transfer or use, for any purpose whatsoever, except as authorized herein, any Protected Information of a Disclosing Party, and such Receiving Party shall assert as a defense that such information (a) was already known to it or developed prior to the execution of this Agreement, (b) was independently developed by it, (c) was disclosed to third parties without violation of this Agreement, (d) was in the public domain prior to the Effective Date of this Agreement, or (e) entered the public domain without violation of this Agreement, then such Receiving Party shall bear the burden of proof with respect to the same.

 

  

  

  

 

7.5           Permitted Use.  Neither AeroGrow nor OMS shall use the Protected Information of the other Party for any purpose except as permitted in this Agreement.

7.6           Permitted Disclosures.  The confidentiality obligations contained in this Article 7 shall not apply to the extent that any Receiving Party is required (a) to disclose the information by law, order or regulation of governmental agency or a court of competent jurisdiction, or (b) to disclose information to any governmental agency for purposes of obtaining approvals to test or market the Product; provided, that, in each such case, the Receiving Party shall give written notice thereof to the Disclosing Party and sufficient opportunity to prevent or limit any such disclosure or to request confidential treatment thereof; and provided, further, that the Receiving Party shall give reasonable assistance to the Disclosing Party to preserve the information as confidential.

7.7           Terms of this Agreement.  The terms and existence of this Agreement shall be treated by the Parties as Protected Information.  Neither Party shall issue a press release or otherwise publicize the negotiation or conclusion of this Agreement without the express written consent of the other Party.

8.  TERM AND TERMINATION

8.1           Initial Term.  The Initial Term of this Agreement, and the license granted herein, shall be five (5) years from the April 1, 2013, unless sooner terminated in accordance with the provisions hereof.

8.2           Renewal Terms.  AeroGrow may renew this Agreement, and the license granted herein, for consecutive additional five-year Renewal Terms by providing written notice of renewal to OMS at least six (6) months in advance of the expiration of the Initial Term (or the then-effective Renewal Term), provided that, at the time of the notice and at the time of the renewal, AeroGrow is not in default with respect to any of its obligations under the Agreement.

8.3           Termination.  This Agreement may be terminated as follows:

	
  

	
(a)

	
If AeroGrow defaults in the payment of any Royalties, interest, or other fees, and such default is not cured within thirty (30) business days following AeroGrow’s receipt of written notice of such default, then this Agreement and the license granted hereunder may be terminated upon written notice by OMS sent to AeroGrow after expiration of the thirty (30) day period and effective upon receipt of such notice, without prejudice to any and all other rights and remedies OMS may have hereunder or by law provided.  Notwithstanding the foregoing provision allowing AeroGrow thirty (30) business days to cure a default in payment, AeroGrow must use its best efforts to cure such default as promptly as possible within said thirty (30) business day period.

 

  

  

  

 

	
  

	
(b)

	
If AeroGrow fails to sell and commercially distribute an amount of Licensed Products equivalent to $5,000,000 in gross sales of Licensed Products for which Royalties are due under Section 3.1 for any Contract Year, and such default is not cured within thirty (30) business days following AeroGrow’s receipt of written notice of such default, then this Agreement and the license granted hereunder may be terminated upon written notice by OMS sent to AeroGrow after expiration of the thirty (30) day period and effective upon receipt of such notice, without prejudice to any and all other rights and remedies OMS may have hereunder or by law provided.

	
  

	
(c)

	
If AeroGrow fails to perform in accordance with any material term or condition of this Agreement (other than as described in Sections 8.3(a) or 8.3(b) above) and such default continues unremedied for thirty (30) days after the date on which AeroGrow receives written notice of default, then this Agreement may be terminated upon notice by OMS, effective upon receipt of such notice, without prejudice to any and all other rights and remedies OMS may have hereunder or by law provided.

	
  

	
(d)

	
If any corporate action, legal proceedings or other procedure or step is taken in relation to: (i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization of AeroGrow; (ii) a composition, compromise, assignment or arrangement with any creditor of AeroGrow; (iii) the appointment of a liquidator, trustee in bankruptcy, special administrator or other similar officer in respect of AeroGrow or any of its assets; (iv) the commencement of a case or proceeding, whether voluntary or involuntary, under any applicable bankruptcy or insolvency law; (v) enforcement of any liens over any assets of AeroGrow having an aggregate value in excess of $50,000 (or its equivalent in any other currency or currencies), or (vi) any analogous procedure or step is taken in any jurisdiction, then this Agreement and the license granted hereunder may be terminated immediately upon notice by OMS, effective upon sending such notice, without prejudice to any and all other rights and remedies OMS may have hereunder or by law provided, and the license herein granted shall not constitute an asset in reorganization, bankruptcy, or insolvency which may be assigned or which may accrue to any court or creditor appointed referee, receiver, or committee.

	
  

	
(e)

	
OMS shall have the right, but not the obligation, to terminate this Agreement by providing written notice to AeroGrow, in the event that the Brand License Agreement expires or terminates for any reason.

	
  

	
(f)

	
If AeroGrow fails to comply with its obligations under Section 4.2, as reasonably determined by OMS, and such default continues unremedied for thirty (30) days after the date on which AeroGrow receives written notice of default, then this Agreement may be terminated upon notice by OMS, effective upon receipt of such notice, without prejudice to any and all other rights and remedies OMS may have hereunder or by law provided.

 

  

  

  

 

8.4           Rights Upon Cancellation, Termination, or Expiration.  Upon any cancellation, termination, or expiration of this Agreement for any reason:

	
  

	
(a)

	
The license granted to AeroGrow in Section 2.1 shall terminate; and, except as provided in Section 8.6 below, AeroGrow shall forthwith discontinue all use of the Hydroponic IP.

	
  

	
(b)

	
AeroGrow shall promptly pay to OMS all amounts due and owing hereunder, including all unpaid, accrued Royalties under Article 3 and under Section 8.6.

	
  

	
(c)

	
Each Receiving Party shall return to the Disclosing Party (or at the Disclosing Party’s direction, destroy) all Protected Information of the Disclosing Party provided or otherwise made available by the Disclosing Party that is in the possession, custody or control of the Receiving Party; provided, however, that such obligation shall not apply to the extent that the return or destruction of such Protected Information to the Disclosing Party would materially interfere with the surviving rights of the Receiving Party under this Agreement.

8.5           Surviving Terms.  The following terms shall survive termination of this Agreement: Article 1, Sections 2.2, 2.3, 2.4, 3.2, 3.3, 3.4, 3.5, 3.6, and 3.7, Article 7, Sections 8.4, 8.5, 8.6, and 9.3, and Articles 10, 11 and 12.

8.6           Disposal of Inventory After Cancellation, Termination, or Expiration.  For a period of three (3) months after cancellation, termination, or expiration of this Agreement, AeroGrow may sell Licensed Products in AeroGrow’s inventory as provided in the Brand License Agreement (“Sell-Off Period”), except that AeroGrow shall have no right to a Sell-Off Period if OMS terminates this Agreement pursuant to any of the provisions in Sections 8.3(c) or 8.3(d).  Any sales of Licensed Products during the Sell-Off Period shall require payment of all Royalties, interest, and other fees in accordance with Article 3 and Section 8.4(b).

9.  REPRESENTATIONS AND WARRANTIES

9.1           Mutual Representations and Warranties.  AeroGrow and OMS each represents and warrants as follows:

	
  

	
(a)

	
It is a corporation duly organized, validly existing and in good standing under the laws of Nevada and Delaware, respectively, is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the performance of its obligations hereunder requires such qualification and has all requisite power and authority, corporate or otherwise, to conduct its business as now being conducted and to execute, deliver and perform this Agreement.

	
  

	
(b)

	
The execution, delivery and performance by it of this Agreement have been duly authorized by all necessary corporate actions, and do not and will not:

 

  

  

  

 

	
  

	
(i)

	
require any consent or approval of its stockholders or any government authority, or

	
  

	
(ii)

	
violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to it or any provision of its charter documents.

	
  

	
(c)

	
This Agreement is legal, valid and binding and any obligation under it is enforceable in accordance with its terms and conditions.

	
  

	
(d)

	
It is not under any contractual obligation that is materially conflicting or materially inconsistent in any respect with the terms of this Agreement or that would materially impede the diligent and complete fulfillment of its obligations.

9.2           DISCLAIMER OF WARRANTIES.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY OR REPRESENTATION BY OMS THAT THE USE OF THE HYDROPONIC IP LICENSED TO AEROGROW HEREUNDER WILL RESULT IN ANY PRODUCTS, OR AS A WARRANTY OR REPRESENTATION BY OMS THAT THE EXPLOITATION OF ANY OF THE FOREGOING WILL BE FREE FROM INFRINGEMENT OF INTELLECTUAL PROPERTY OF THIRD PARTIES.

10.  INDEMNIFICATION

10.1           OMS Indemnification.  OMS hereby indemnifies AeroGrow and forever holds AeroGrow harmless from and against all claims, suits, actions, proceedings, damages, losses, liabilities, costs, or expenses (including reasonable attorneys' fees and expenses) arising out of, based upon, or in connection with any breach of any of OMS’s representations and warranties set forth in this Agreement.

10.2           AeroGrow Indemnification.  AeroGrow hereby indemnifies OMS and forever holds OMS harmless from and against all claims, suits, actions, proceedings, damages, losses or liabilities, costs or expenses (including reasonable attorneys' fees and expenses) arising out of, based upon, or in connection with (a) any breach of any of AeroGrow’s representations and warranties as set forth in this Agreement; (b) any use of any Patent, process, method, or device, including Developed IP, by AeroGrow in connection with the Licensed Products; (c) any alleged defects or dangers inherent in the Licensed Products or the manufacture, distribution, sale, or use thereof; (d) any injuries or damages to purchasers, users, or consumers of Licensed Products or arising from or related to the use or consumption of the Licensed Products; or (e) any alleged infringement of any third party's Copyright, Patent, Trademark, or other Intellectual Property unless and to the extent such alleged infringement is directly caused by conformance by AeroGrow to product specifications for the Licensed Products provided by OMS to AeroGrow.

10.3           Conditions of Indemnification.  As a condition of indemnification under this Article 10, the Party seeking indemnification shall give the other Party (for purposes of this Article 10, the “Indemnifying Party”) immediate notice of and copies of all pleadings and correspondence related to the assertion of any such claim, proceeding, action, or suit and agrees not to settle, compromise, or otherwise dispose of any such claim, proceeding, action or suit without the prior written consent of the Indemnifying Party.  The Indemnifying Party shall have the right (but not the obligation) to assume the defense or settlement of any such claim, proceeding, action, or suit at its expense, by counsel of its choice.  If the Indemnifying Party assumes such defense, the Party seeking indemnity shall cooperate fully with the Indemnifying Party in defense of the action and the Indemnifying Party shall not be liable to pay or reimburse the other Party for attorneys' fees or expenses, except such out-of-pocket costs or expenses incurred by the indemnified Party in cooperating with the Indemnifying Party.

 

  

  

  

 

10.4           Limits.  Neither Party shall be liable to the other Party, whether pursuant to indemnification or otherwise under this Agreement, for any punitive, indirect or consequential losses, or for loss of business or goodwill, except that these limitations of liability shall not apply to (a) claims for death or physical injury, or loss or damage to tangible personal or real property; (b) damages caused by either Party’s gross negligence or willful misconduct or omission of either Party or its respective employees or representatives; or (c) damages payable pursuant to a breach of Article 7 (Confidentiality) or this Article 10 (Indemnification).

11.  NOTICES

All notices provided for in this Agreement shall be in writing and shall be given by facsimile or registered mail, postage prepaid, or by overnight courier deposited with a reputable company, addressed to the other Party at the applicable address set forth below, or to such other addresses as may be given for such purpose by such that Party by notice duly given hereunder.  Notice shall be deemed properly given on the date of a confirmed facsimile transmission, three (3) days after the date mailed if given by first class mail, or one (1) day after confirmed delivery by overnight courier:

	
TO OMS:

 

OMS Investments, Inc.

Attn.: Luis A. Rodriguez, Assistant Secretary

10250 Constellation Blvd., Suite 2800

Los Angeles, CA 90067

Facsimile: (310) 300-3051

 

WITH COPIES TO:

 

Hunton & Williams, LLP

2200 Pennsylvania Avenue, N.W.

Washington, D.C. 20036

Attention: J. Steven Patterson

Facsimile: (202) 778-2201

 

	
TO AEROGROW:

 

AeroGrow International, Inc.

Attn.: President and CEO

1026075 Longbow Dr., Suite 200

Boulder, CO 80301

Facsimile: (303) 444-0406

 

WITH COPIES TO:

 

Hutchinson Black and Cook, LLC

921 Walnut Street, Suite 200

Boulder, CO 80302

Attention: James L. Carpenter, Jr.

Facsimile: (303) 442-6593

  

  

  

12.  GENERAL PROVISIONS

12.1           No Fiduciary or Other Relationship.  The Parties understand and agree that this Agreement does not create a fiduciary relationship between them, that they are and shall be independent contractors, and that nothing in this Agreement is intended to make either Party a general or special agent, joint venture, partner, or employee of the other Party for any purpose whatsoever.  Except as expressly authorized in writing, neither OMS nor AeroGrow shall make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name or on behalf of the other, represent that their relationship is other than licensor and licensee, or be obligated by or have any liability under any agreements or representations made by the other that are not expressly authorized in writing.

12.2           Patent Marking.  AeroGrow agrees to mark all Licensed Products sold or otherwise disposed of by it under the license granted herein with the word “Patent” or “Patents” and the number or numbers of the issued Patents within the Hydroponic IP applicable thereto.

12.3           Severability.  In the event that any provision of this Agreement is deemed invalid, unenforceable or void by a final, non-appealable judgment of a court of competent jurisdiction, the remainder of the Agreement shall be interpreted to the extent possible to effect the overall intention of the Parties as of the date of this Agreement.

12.4           Waiver.  A Party may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other Party under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver.  Any waiver so granted by the waiving Party shall be without prejudice to any other rights the waiving Party may have, will be subject to continuing review by the waiving Party and may be revoked, in the waiving Party's sole discretion, at any time and for any reason, effective upon delivery to the other Party of ten (10) days' prior written notice.

12.5           Waiver by Custom or Practice.  A Party shall not be deemed to have waived or impaired any right, power or option reserved by this Agreement (including, without limitation, the right to demand exact compliance with every term, condition and covenant herein or to declare any breach thereof to be a default and to terminate this Agreement) by virtue of any custom or practice of the Parties at variance with the terms hereof.  Any failure, refusal or neglect of a Party to exercise any right under this Agreement or to insist upon exact compliance by the other with its obligations hereunder, any waiver, forbearance, delay, failure or omission by a Party to exercise any right, power or option, whether of the same, similar or different nature, or OMS’s acceptance of any payments due from AeroGrow after any breach of this Agreement, shall not be deemed a waiver or impairment of any right, power or other option provided under this Agreement.

12.6           Force Majeure.  Neither Party shall be liable for loss or damage or deemed to be in breach of this Agreement if their failure to perform obligations results from:

	
  

	
(a)

	
compliance with any law, regulation, requirement or instruction of any federal, state, municipal or foreign government or any department or agency thereof;

 

  

  

  

 

	
  

	
(b)

	
acts of God; 

 

	
  

	
(c)

	
fires, strikes, embargoes, war or riot; or 

 

	
  

	
(d)

	
any other similar event or cause.

 

Any delay resulting from any of said causes shall extend performance accordingly or excuse performance, in whole or in part, as may be reasonable, except that said causes shall not excuse payments of amounts owed at the time of such occurrence or payment of any Royalties, interest, or other fees.

12.7           Temporary Restraining Orders and Preliminary Injunctions.  Notwithstanding anything to the contrary in this Agreement, each Party shall have the right in a proper case to obtain temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction.

12.8           Rights Cumulative.  The rights of each Party hereunder are cumulative and no exercise or enforcement by a Party of any right or remedy hereunder shall preclude the exercise or enforcement by that Party of any other right or remedy hereunder which that Party is entitled by law to enforce.

12.9           Costs and Attorneys’ Fees.  If a claim for amounts owed by AeroGrow to OMS or its Affiliates is asserted in any judicial proceeding or appeal thereof, or if a Party enforces this Agreement in any judicial proceeding or appeal thereof, the Party prevailing in such proceeding shall be entitled to reimbursement of its reasonable costs and expenses, including reasonable accounting and legal fees, whether incurred prior to, in preparation for, or in contemplation of the filing of any written demand, claim, action, hearing or proceeding to enforce the obligations of this Agreement.  If OMS incurs expenses in connection with AeroGrow’s failure to pay when due amounts owing to OMS, to submit when due any reports, information or supporting records or otherwise to comply with this Agreement, including, but not limited to legal and accounting fees, OMS shall be reimbursed by AeroGrow for any reasonable costs and expenses that OMS incurs.

12.10           Governing Law.  This Agreement, and the relationship between the Parties, shall be governed by the laws of the State of Ohio, without regard to principles of conflicts of laws.

12.11           Jurisdiction.  The Parties hereby irrevocably consent and agree that any legal action, suit or proceeding arising out of or in any way in connection with this Agreement may be instituted or brought in the United States District Court for the Southern District of Ohio.  The Parties hereby irrevocably consent and submit to, for themselves and in respect of their property, generally and unconditionally, the jurisdiction of such Court, and to all proceedings in such Court.  Further, the Parties irrevocably consent to actual receipt of any summons and/or legal process at their respective addresses as set forth in this Agreement as constituting in every respect sufficient and effective service of process in any such legal action or proceeding.  The Parties further agree that final judgment in any such legal action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, whether within or outside the United States of America, by suit under judgment, a certified or exemplified copy of which will be conclusive evidence of the fact and the amount of the liability.

 

  

  

  

 

12.12           Waiver of Punitive Damages.  The Parties waive to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between them, the Party making a claim shall be limited to recovery of any actual damages it sustains; except that, the limitations of liability arising out of, under or in connection with (a) claims for death or physical injury, or loss or damage to tangible personal or real property; (b) damages caused by either Party’s gross negligence or willful misconduct or omission of either Party or their respective employees or representatives; or (c) damages payable pursuant to a breach of Article 7 (Confidentiality) and Article 10 (Indemnification).

12.13           Headings.  The headings of the several Articles and Sections hereof are for convenience only and do not define, limit or construe the contents of such Articles or Sections.

12.14           Interpretation.  Except where the context otherwise permits or requires, the use of the term “including” and inflections thereof, mean “including without limitation,” “include without limitation” or “includes without limitation.”

12.15           Entire Agreement.  This Agreement represents the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior agreements and negotiations between the Parties, including all oral, written or otherwise communicated statements in whatever form or from whatever source.

12.16           Counterparts.  This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement, binding upon all Parties hereto, notwithstanding that all Parties are not signatories to the original or the same counterpart.

12.17           Expenses.  Each Party shall bear its own expenses (including attorneys' fees and expenses) in connection with the preparation, negotiation, execution, and delivery of this Agreement.

[Signature pages follow.]

 

  

  

  

 

IN WITNESS WHEREOF, the Parties have executed this Technology License Agreement, effective as of the Effective Date first written above.

 

 

OMS INVESTMENTS, INC.

By:                                                                

Name:                                                               

Title:                                                               

AEROGROW INTERNATIONAL, INC.

By:                                                                

Name:                                                               

Title:                                                               

 

  

  

  

                                                                

SCHEDULE 1

HYDROPONIC IP

	
1.

	
Patents

U.S. Patents and Applications

	
Patent No.

	
Application No.

	
Publication No.

	
Title

	
Filing Date (MM/DD/YYYY)

	
D586,688

	
29/235,880

	
-

	
Indoor Gardening Appliance

	
08/08/2005

	
7,818,916

	
11/321,023

	
2006/0254332

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
12/28/2005

	
8,261,486

	
11/654,164

	
2007/0271842

	
Systems and Methods for Controlling Liquid Delivery and Distribution to Plants

	
01/16/2007

	
D604,196

	
29/292,564

	
-

	
Indoor Gardening Appliance

	
10/17/2007

	
D604,197

	
29/293,343

	
-

	
Indoor Gardening Appliance

	
11/16/2007

	
8,091,275

	
12/911,590

	
2011/0036009

	
PH Buffered Plant Nutrient Compositions and Methods for Growing Plants

	
10/25/2010

Foreign Patents and Applications

	
Application No.

	
Publication No.

	
Title

	
Filing Date (MM/DD/YYYY)

	
PCT/US2004/030168

	
WO 2005/055700

	
Devices and Methods for Growing Plants

	
09/15/2004

  

  

  

	
2.

	
Copyrights

	
No.

	
Description

	
Reg. Date (MM/DD/YYYY)

	
VA0001674819

	
Cascading Petunias Seed Kit

	
09/28/2007

	
TX0006833384

	
Cascading Petunias Tending & Harvesting Guide

	
09/28/2007

	
VA0001674791

	
Cherry Tomato Seed Kit

	
09/28/2007

	
TX0006833400

	
Cherry Tomato Tending & Harvesting Guide

	
09/28/2007

	
VA0001676754

	
Chili Pepper Seed Kit

	
09/28/2007

	
TX0006833387

	
Chili Pepper Tending & Harvesting Guide

	
09/28/2007

	
VA0001674792

	
French Herb Seed Kit

	
09/28/2007

	
TX0006833392

	
French Herb Tending & Harvesting Guide

	
09/28/2007

	
VA0001676784

	
Gourmet Herb Seed Kit

	
09/28/2007

	
TX0006833397

	
Gourmet Herb Tending & Harvesting Guide

	
09/28/2007

	
VA0001674803

	
Grow Bulbs (2)

	
09/28/2007

	
VA0001674808

	
Grow Bulb (1)

	
09/28/2007

	
TX0006833380

	
Herb Appeal

	
09/28/2007

	
PA0001602428

	
Herb Appeal

	
09/28/2007

	
VA0001674793

	
International Basil Seed Kit

	
09/28/2007

	
TX0006833407

	
International Basil Tending & Harvesting Guide

	
09/28/2007

	
VA0001674799

	
Italian Herb Seed Kit

	
09/28/2007

	
TX0006833410

	
Italian Herb Tending & Harvesting Guide

	
09/28/2007

	
VA0001674800

	
Japanese Herb Seed Kit

	
09/28/2007

	
TX0006833412

	
Japanese Herb Tending & Harvesting Guide

	
09/28/2007

	
VA0001676787

	
Master Gardener Deluxe

	
09/28/2007

	
TX0006833139

	
Master Gardener Deluxe Guide

	
09/28/2007

	
TX0006833376

	
Quick Start Guide

	
09/28/2007

	
TX0006833137

	
Salad Bar Series Tending & Harvesting Guide

	
09/28/2007

	
3.

	
Technical Information

Software rights for AeroGarden ULTRA software, and the programs and operational setting for all AeroGrow gardens, are owned by AeroGrow.  The software may control grow-light timer settings, pump/bubbler settings, nutrient timer settings, bulb-replace timer settings, garden-type settings, and alert LEDs.  The ULTRA adds customizability, time-sensitive tips, and a detailed user interface and control screen.  There is no relevant documentation.

List of software: AG ULTRA, AG Extra, AG 7, Pro 100, AG 6, Space Saver 6, AG3, Ultimate Kitchen Garden, and Veggie Pro.

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