Exhibit 10.27
TRANSITIONAL LICENSE AGREEMENT
TRANSITIONAL LICENSE AGREEMENT ("Agreement") made as of the 30th day
of June, 1999, between Cendant Corporation, a Delaware corporation ("Licensor"),
and Avis Fleet Leasing and Management Corporation, a Texas corporation
("Licensee"), and a wholly owned subsidiary of Avis Rent A Car, Inc., a Delaware
corporation ("Acquiror").
WITNESSETH:
WHEREAS, Licensor owns the trade names, trademarks, and service
marks set forth in Annex I and Annex II hereto (hereafter referred to
collectively as the "Licensed Marks");
WHEREAS, PHH Corporation ("PHH"), a Maryland corporation and a
wholly owned subsidiary of Licensor, PHH Holdings Corporation, a Texas
corporation and a wholly owned subsidiary of PHH ("Holdings"), Acquiror and
Acquiror Sub, entered into an Agreement and Plan of Merger and Reorganization
dated as of May 22, 1999 ("Merger Agreement"), as amended by the Amendment to
the Agreement and Plan of Merger and Reorganization, dated as of June 30, 1999,
providing for the merger of Acquiror Sub and Holdings (the "Merger") pursuant to
the Texas Business Corporation Act (the "TBCA"), on the terms and subject to the
conditions set forth therein (capitalized terms not otherwise defined herein
shall have the respective meanings assigned to such terms in the Merger
Agreement);
WHEREAS, upon consummation of the Merger, Acquiror Sub shall acquire
the vehicle fleet management and fuel card businesses of Holdings (collectively,
the "Business");
WHEREAS, pursuant to the Merger Agreement, PHH agreed to cause its
parent, Licensor, to grant to Licensee a limited license to use the Licensed
Marks to sell off, deplete, or dispose of, existing inventory of products and
business materials used in connection with the Business;
WHEREAS, Licensee desires to obtain from Licensor the right and
license to use the Licensed Marks to sell off, deplete, or dispose of, existing
inventory of products and business materials used in connection with the
Business; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Grant of License.
(a) Licensor hereby grants to Licensee and its affiliates a limited
license to use the Licensed Marks set forth on Annex I for the sole purpose of
selling off, depleting, or otherwise disposing of, any existing inventory of
products or business materials of the Business in the United Kingdom.
1
(b) Licensor hereby grants to Licensee and its affiliates a limited
license to use the Licensed Xxxx set forth on Annex II for the sole purpose of
selling off, depleting, or otherwise disposing of, any existing inventory of
products or business materials of the Business in the United States.
2. Term. This license shall commence as of the date hereof and shall
terminate as soon as practicable, but in no event later than the earlier of: (i)
the depletion or disposal of all existing inventory of products or business
materials using the Licensed Marks or (ii) the first anniversary of the date
hereof.
3. Ownership of Licensed Marks. Licensee acknowledges that Licensor
is the owner of the Licensed Marks, that use of the Licensed Marks by Licensee
shall not create in Licensee's favor any ownership interest therein, and that
all goodwill arising out of Licensee's use of the Licensed Marks shall inure to
the benefit of Licensor.
4. Quality Control.
(a) Licensee acknowledges that the Licensed Marks have established
extremely valuable goodwill and are well recognized in the minds of the relevant
class of customers, and Licensee agrees that the products distributed and
services performed by Licensee under the Licensed Marks shall equal or exceed
the standard of quality heretofore established and maintained by Licensor and
its affiliates in the operation of the Business. Licensor acknowledges and
agrees that the manner in which Licensor and its affiliates conducted the
operation of the Business immediately prior to the effective date of this
Agreement satisfies this requisite standard of quality.
(b) If the quality of any products or services offered by the
Licensee under the Licensed Marks fails to meet the standard of quality set
forth in Section 4(a), then Licensor shall so notify Licensee in writing,
specifying, in reasonable detail, the reason for such disapproval. Licensee will
have thirty (30) days to cure the deficiency and, if such deficiency is not
cured with respect to such products and/or services to Licensor's reasonable
satisfaction, Licensee will not sell or deliver such products and/or services
until the deficiency is cured to Licensor's reasonable satisfaction.
5. Use of Licensed Marks.
(a) Licensee agrees to comply with all laws and regulations relating
to the use of the Licensed Marks including, but not limited to, those laws and
regulations which require Licensee to indicate that it is a Licensee of the
Licensed Marks, that Licensor owns the Licensed Marks, and/or that Licensee is
the source of the products and/or services sold thereunder. Licensee agrees to
apply statutory notice of trademark registration, where desirable.
(b) Licensee shall comply with all applicable international,
federal, state and local laws and regulations, and obtain all foreign and
domestic government approvals, pertaining to the publication, sale,
distribution, provision, advertising and promotion of any products and/or
services under the Licensed Marks.
2
(c) Licensee shall not, by any act or omission, tarnish, disparage,
degrade or injure the reputation of the Licensed Marks or Licensor, and the
goodwill associated therewith.
(d) Licensee shall use the Licensed Marks only in the form and
manner set forth on Exhibit A, attached hereto.
(e) Licensee shall not use any Licensed Xxxx except as authorized
hereunder and shall not use any xxxx confusingly similar to any Licensed Xxxx.
6. Termination. If either party to this Agreement materially
breaches any of its obligations under this Agreement, then the other party may
terminate this Agreement on fifteen (15) days' written notice to the defaulting
party; provided that such notice of termination shall be of no further force or
effect if the default is cured by the defaulting party to the reasonable
satisfaction of the non-defaulting party within thirty (30) days after receipt
of such notice.
7. Effect of Termination.
(a) Upon the termination of this Agreement, Licensee shall (i) as of
the effective date of the termination, cease all use of the Licensed Marks and
all names, trademarks and service marks that are confusingly similar thereto,
including without limitation all names, trademarks and service marks that
incorporate any Licensed Xxxx, (ii) do all things reasonably necessary on its
part to remove Licensee's name from any published indication of Licensee's
former right to or actual use of the Licensed Marks and shall consent to the
cancellation of its registration as a registered user of the Licensed Marks, if
any, and (iii) shall furthermore take all necessary and appropriate steps to
comply with the foregoing.
(b) Licensee hereby agrees that, upon the termination of this
Agreement, it will be deemed to have assigned to Licensor any right, equity,
goodwill, title or other rights in and to the Licensed Marks which may have been
vested in Licensee during the term of this Agreement. Licensee agrees to execute
any instruments reasonably requested by Licensor to accomplish the foregoing.
Any such assignment shall be without consideration, other than the mutual
covenants and considerations set forth in this Agreement.
(c) Termination of this Agreement for any reason shall not affect
(i) those obligations which have accrued as of the date of termination and (ii)
those obligations which, from the context thereof, are intended to survive
termination of this Agreement.
8. . All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given, upon receipt, if mailed by
registered or certified mail, postage prepaid, return receipt requested,
overnight delivery, confirmed facsimile transmission or hand delivered, as
follows:
(a) If to Licensor, to:
Cendant Corporation
0 Xxxx 00xx Xxxxxx
37th Floor
3
New York, New York 10019
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLC
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx Chuff
Facsimile: (000) 000-0000
(b) If to Licensees, to:
Avis Rent A Car, Inc.
000 Xxx Xxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the other party in writing in accordance herewith.
9. Representations, Warranties and Covenants of Licensor. Licensor
represents and warrants to Licensee as follows:
(a) Licensor owns the Licensed Marks and has the right and authority
to grant the licenses and rights it grants hereunder upon the terms and
conditions provided herein; and
(b) The use of the Licensed Marks as permitted herein does not
constitute an unauthorized use or misappropriation of any Intellectual Property
Right or any other property or proprietary right of any Person.
10. Indemnification.
(a) Licensee shall defend, indemnify, and hold Licensor and its
officers, directors, employees, shareholders and affiliates harmless from and
against (i) any third-party claim, demand, suit, loss, liability, or damage,
including, but not limited to, any amounts paid in settlement thereof and
reasonable attorney fees (collectively, "Claims") arising out of or based
4
upon a material breach of Licensee's representations, warranties or covenants
hereunder, and (ii) any third-party Claim relating to Intellectual Property
Rights arising out of or based upon the operation of the Business or the
products or services offered or sold by Licensee or any subsidiary or permitted
sublicensee thereof, except for such Claims which are based on or derived from
the use of the Licensed Marks, as expressly authorized hereunder.
(b) Licensor shall defend, indemnify, and hold Licensee and its
officers, directors, employees, shareholders and affiliates harmless from and
against any third-party Claim arising out of or based upon (i) a material breach
of Licensor's representations, warranties or covenants hereunder, and (ii)
Licensee's use of the Licensed Marks, as expressly authorized hereunder.
(c) Each party shall give the other prompt notice of any Claim for
which indemnification is sought; shall provide the indemnifying party with
complete control over the defense of such Claim; and shall provide all
reasonable assistance in connection with the defense of such Claim. Neither
party shall be entitled to indemnification for Claims to the extent attributable
to such party's gross negligence or willful misconduct.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to the principles of conflict of laws thereof. The parties consent
specifically to the non-exclusive jurisdiction of the federal courts of the
United States sitting in the Southern District of New York and the courts of the
State of New York sitting in the County of New York (and any court to which an
appeal therefrom may be taken) for purposes of all legal proceedings arising out
of or relating to this Agreement, and the parties hereby waive all defenses of
improper venue or that the forum is inconvenient in the Southern District of New
York and New York State courts in the County of New York.
12. Miscellaneous.
(i) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof.
(ii) Amendments. This Agreement may not be amended, modified or
supplemented except by written agreement of the parties hereto.
(iii) No Waiver. Nothing contained in this Agreement shall cause the
failure of either party to insist upon strict compliance with any covenant,
obligation, condition or agreement contained herein to operate as a waiver of,
or estoppel with respect to, any such covenant, obligation, condition or
agreement by the party entitled to the benefit thereof.
(iv) Headings. The headings contained in this Agreement are for
reference purposes only and shall not control or affect in any way the meaning
or interpretation of any of the terms or provisions of this Agreement.
5
(v) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.
(vi) Severability. If any provisions hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof; provided,
however, that the parties shall use reasonable efforts, including, but not
limited to, the amendment of this Agreement, to ensure that this Agreement shall
reflect as closely as practicable the intent of the parties hereto.
(vii) Specific Performance. Each of the parties hereto acknowledges
and agrees that the other party hereto would be irreparably damaged in the event
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, each of the
parties hereto agrees that they each shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions thereof in any
action instituted in any court of the United States or any state or jurisdiction
having subject matter jurisdiction, in addition to any other remedy to which
such party may be entitled, at law or in equity.
(viii) Independent Contractors. Nothing herein contained shall be
construed to place the parties in the relationship of partners or joint
venturers, and neither party shall have any power to obligate or bind the other
in any manner whatsoever, except as otherwise provided for herein.
(ix) Schedules. Each of the Schedules and Annexes attached hereto is
fully incorporated herein and made part hereof.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the duly authorized officers of the parties
hereto have executed this Agreement as of the day and year first written above.
Licensor: CENDANT CORPORATION
By:_______________________________________
Name:
Title:
Licensee: AVIS FLEET LEASING AND MANAGEMENT
CORPORATION
By:_______________________________________
Name:
Title:
7
