EXHIBIT 2.7
EXECUTION COPY
TRADEMARK LICENSE AGREEMENT
TRADEMARK LICENSE AGREEMENT (this "Agreement") is entered into as of
October 9, 1998, by and between APS Management Services, Inc., a Delaware
corporation ("Licensor") and a debtor and debtor-in-possession in a case pending
under Chapter 11 of the Bankruptcy Code, and General Parts, Inc., a North
Carolina corporation ("Licensee"). Capitalized terms used but not otherwise
defined in this Agreement have the meanings given in the Asset Purchase
Agreement.
RECITALS
WHEREAS, Licensor is the owner of the trademarks (the "Marks")
set forth on Schedule "A" attached hereto; and
WHEREAS, in connection with the sale of certain assets (the
"Purchased Assets") to Licensee pursuant to that certain asset purchase
agreement (the "Asset Purchase Agreement") dated as of even date herewith,
Licensor and Licensee wish to enter into this Agreement to set forth the terms
and conditions upon which Licensor will grant a license to Licensee to use the
Marks in connection with the distribution and sale of automotive replacement
parts, accessories and supplies (the "Business").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Licensor and Licensee agree as follows:
1. GRANT OF LICENSE.
1.1. GRANT AND TERMS OF LICENSE. Subject to the terms and conditions
of this Agreement, Licensor hereby grants to Licensee a non-transferable,
limited and royalty-free license to use the Marks for a period of twenty-four
(24) months from the date of this Agreement (the "Defined Term") in the limited
geographical areas in which, immediately prior to the Closing Date, Licensor
conducted the Business from the Purchased Locations (excluding Closed Locations)
(such areas, collectively, the "Defined Territory"). This license shall be
exclusive to Licensee within the Defined Territory for the Defined Term, except
to the extent provided in Paragraph 2.2 of this Agreement. Such use shall
include the use of the Marks by wholly-owned subsidiaries of Licensee.
1.2. PERMITTED USE OF MARKS. Licensee's right to use the Marks shall
be limited: (i) to uses relating to the Licensee's use of the Purchased Assets;
and (ii) to uses relating to Licensee's carrying on of the Business conducted by
Licensor
at the Purchased Locations prior to the date hereof. Licensee shall not use the
Marks in a manner inconsistent with Licensor's past practices in using the Marks
at or in connection with the Purchased Locations, or in a manner which
disparages or is detrimental to Licensor's assets or business.
1.3. RESERVATION OF LICENSOR'S RIGHTS. All rights in and to the
Marks not specifically granted to Licensee by this Agreement are reserved to
Licensor for Licensor's own use and benefit.
2. OWNERSHIP OF MARKS.
2.1. RIGHTS IN MARKS. The Marks are the exclusive property of
Licensor and, except as provided in Section 1.2, Licensee shall not manufacture,
market, advertise, promote, ship, distribute or sell (or permit or cause any
such actions by others, within its control with respect to) any goods or
materials bearing any of the Marks or any services associated with the Marks.
Neither Licensee nor any of its Affiliates or subcontractors, nor any third
parties related in any way to any of the foregoing persons or entities, has any
right, title or interest in or to the Marks other than the limited rights
granted herein.
2.2. PROHIBITED ACTIONS. Licensee shall not take (or permit or cause
to be taken) any action to impair, attack or interfere with Licensor's exclusive
rights in the Marks. In its use of the Marks, Licensee shall not make or allow
to be made any alterations or changes to the appearance of the Marks, including,
but not limited to, any changes to the graphic representation of the Marks, the
color scheme of the Marks, or the font or type face in which the Marks are
portrayed. Licensee shall not seek to register any of the Marks anywhere in the
world or use the Marks in any manner that may lead to a material loss of the
value of the Marks. Licensee will give Licensor notice of any claim made by any
third party of which Licensor has knowledge, that would adversely affect the
Marks.
During the Defined Term, Licensor shall not grant to any third party
any rights to use the Marks in the Defined Territory, PROVIDED, HOWEVER that
this limitation shall in no way affect grants, if any, of rights in the Marks
made by Licensor or any of its affiliates to third parties in the Defined
Territory prior to the date hereof, and FURTHER PROVIDED that Licensor
represents that it has not previously granted a license to use the Marks in the
Defined Territory to any warehouse distributor of automotive parts.
3. WARRANTY DISCLAIMER; INDEMNIFICATION.
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3.1. WARRANTY DISCLAIMER. LICENSOR MAKES NO WARRANTIES OF ANY KIND,
WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY PRODUCT'S FITNESS FOR A
PARTICULAR PURPOSE. Licensee shall not make any statements, representations or
warranties whatsoever to any third party which are in any way inconsistent with
this Section 3.1.
3.2. LICENSOR REPRESENTATIONS; INDEMNIFICATION. Licensor represents
and warrants that (i) it has the right to grant to Licensee the license of the
Marks hereunder; (ii) it has no knowledge or notice of any actions pending or
threatened which impair its right to grant the rights in the Marks licensed
hereunder; and (iii), to its knowledge, the rights licensed hereunder do not
violate any obligations of Licensor to any third parties. Licensor hereby
indemnifies Licensee and parent, subsidiary and affiliated companies, and
officers, directors and employees of each of the foregoing and each of them, and
undertakes to hold them harmless against any and all claims, demands, damages,
losses and expenses of any nature (including reasonable attorney's fees) which
arise solely in connection with the breach by Licensor of any warranty or
representation made by Licensor hereunder, including but not limited to loss or
damage resulting from copyright, design patent and trademark infringement,
provided that said breach does not occur as a result of the negligence of
Licensee or the breach by Licensee of any of its representations or obligations
hereunder, that prompt notice is given to Licensor of any such claim or suit
and, provided further, that Licensor shall have the option to undertake and
conduct the defense of any suit so brought.
3.3 LICENSEE INDEMNIFICATION. Licensee shall defend, indemnify and
hold harmless Licensor and each of its Affiliates, employees, and agents from
and against any and all claims, demands, damages, losses and expenses of any
nature (including reasonable attorneys' fees), including, without limitation,
those related to death, personal injury, property damage and product liability,
which arise from or in connection with Licensee's use of the Marks, (i) in a
manner not consistent with: (a) Licensee's normal business practices or (b) any
known right of a third party; or (ii) in a manner which disparages or is
detrimental to Licensor's assets or business.
4. TERMINATION. This Agreement shall automatically terminate without prior
notice to Licensee:
(a) at 5:00 p.m. Eastern time on the last day of the Defined Term;
or
(b) if Licensee is in material breach of any of the terms or
conditions of this Agreement, and Licensee fails to cure
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such breach within ten (10) days from Licensee's receipt of written notice of
such breach from Licensor.
5. EFFECTS OF TERMINATION. Upon termination of this Agreement, all rights
granted hereunder to Licensee shall terminate and Licensee shall immediately:
(a) cease all use of the Marks in any form;
(b) cease representing itself as a licensee of Licensor; and
(c) promptly take such actions as may be necessary to cease doing
business under the Marks, including, but not limited to, (i) modifying the name
of Licensee or any of its subsidiaries, (ii) removing, modifying or destroying
all signs, advertising, packaging and promotional materials containing any of
the Marks.
Licensee agrees to furnish evidence reasonably satisfactory to
Licensor of compliance with Licensee's obligations under this Agreement within
fifteen (15) Business Days after termination of this Agreement.
6. NOTICES. All notices, requests, demands, consents and other
communications required or permitted hereunder shall be in writing and shall be
delivered personally or by overnight mail with a reputable courier service or by
telecopy. If notice is sent by telecopy, notices shall be deemed given upon
confirmation at the sender's telecopy machine of receipt at the recipient's
telecopy machine. All communications hereunder shall be delivered to the
respective parties at the following addresses (or to such other person or at
such other address for a party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt
thereof):
If to Purchaser: General Parts, Inc.
X.X. Xxx 00000
Xxxxxxx, XX 00000
Attention: O. Temple Xxxxx, Jr.
Facsimile No.: 000-000-0000
With a copy Xxxxxxx, Xxxxxx & Xxxxxxx, P.A.
(which shall not X.X. Xxx 00000
constitute notice) Xxxxxxx, XX 00000-0000
to: Attention: W. Xxxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
If to Seller: APS Holding Corporation
15710 Xxxx X. Xxxxxxx Blvd.
Suite 700
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Houston, Texas 77032-2347
Attention: Xxxxxxx Xxxxx
Facsimile No. 000-000-0000
With a copy Xxxxxxx Xxxx & Xxxxxxxxx
(which shall not 000 Xxxxxxx Xxxxxx
constitute notice) Xxx Xxxx, Xxx Xxxx 00000-0000
to: Attention: Xxxxxxxxx X.
Xxxxxxxx III, Esq.
Facsimile No. (000) 000-0000
7. CONFIDENTIALITY. Other than as may be required by any applicable law,
government order or regulation, or by order or decree of any court of competent
jurisdiction, Licensee shall not publicly divulge or announce, or in any manner
disclose to any third party, any information or matters revealed to Licensee
pursuant hereto, or any of the specific terms and conditions of this Agreement.
8. RELATIONSHIP OF PARTIES. Licensee's relationship with Licensor is
solely as an independent contractor, and Licensee shall have no legal power or
authority, express or implied, to act for, bind or commit Licensor in any manner
or to anything whatsoever. Licensor and Licensee agree that nothing in this
Agreement shall make Licensee an agent of Licensor or create or evidence a joint
venture or partnership between the parties or any relationship other than that
of independent contractors.
9. ASSIGNMENT. This Agreement shall be binding on the parties hereto and
on their respective successors and permitted assigns; PROVIDED, HOWEVER, that
Licensee may not assign, transfer or hypothecate its obligations under this
Agreement or sub-license or grant any right, title or interest in any of its
rights hereunder in whole or in part, directly or indirectly, by operation of
law or otherwise, except as expressly agreed in writing in advance by Licensor.
Notwithstanding the foregoing, Licensee may grant to Xxxxxx and Strafco rights
to use the Marks upon and subject to the terms of, and the obligations contained
in, this Agreement (but the Marks may be so used only with respect to the
business conducted at Purchased Locations that are subject to the Assigned GPI
Affiliate Leases and Xxxxxx Subleases), provided that such assignment shall not
relieve Licensee from any of its obligations under this Agreement, and Licensee
shall remain liable for any breach of this Agreement by Xxxxxx or Strafco.
10. GOVERNING LAW. This Agreement and any dispute between the parties
arising from this Agreement or the subject matter hereof, shall be governed by
the laws of the State of Delaware, without regard to its conflict or choice of
laws principles, and of the United States of America.
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11. REMEDIES. Notwithstanding anything to the contrary contained in this
Agreement, Licensee acknowledges that its failure to comply with its obligations
under this Agreement could cause immediate and irreparable harm to Licensor for
which money damages would be inadequate. Accordingly, in the event of Licensee's
breach of this Agreement, Licensor may seek equitable relief, including, but not
limited to, specific performance of Licensee's obligations hereunder, and
injunctive relief to prevent Licensee's continued use of the Marks. Any remedies
contemplated by this Section 11 shall not be deemed to be an exclusive remedy
for breach of this Agreement, but shall be in addition to all other remedies
available at law or in equity.
12. MISCELLANEOUS.
(a) Paragraph headings contained in this Agreement are included for
convenience only and shall not be considered for any purpose in governing,
limiting, modifying, construing or affecting the provisions of this Agreement
and shall not otherwise be given any legal effect.
(b) The determination that any provision of this Agreement is
invalid or unenforceable shall not invalidate this Agreement, and the remainder
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.
(c) This Agreement represents the entire understanding between the
Parties with respect to the subject matter hereof and supersedes all previous
representations, understandings or agreements, oral or written, between the
Parties with respect to the subject matter hereof.
(d) Paragraphs 3, 5, 7 and 9 shall survive termination of this
Agreement.
(e) The Schedules attached to this Agreement and the limitations
described therein constitute an integral part of the Agreement.
(f) No waiver, modification or cancellation of any term or condition
or this Agreement shall be effective unless executed in writing by both Licensee
and Licensor. No waiver by either party of any breach of this Agreement shall be
deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision hereof.
(g) This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the authorized representatives of the Parties have
signed this Agreement:
APS MANAGEMENT SERVICES, INC., as Licensor
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: President
GENERAL PARTS, INC., as Licensee
By: /s/ XXXX XXXXXXXXXX
Name: Xxxx Xxxxxxxxxx
Title: V.P. of Finance
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