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EXHIBIT 10.8
STANDARD CANADIAN LICENSE AGREEMENT - FORM B
THIS AGREEMENT dated as of and effective the 18th day of May, 1999 by
and between SERTA, INC., a Delaware corporation (hereinafter referred to as
"Serta"), and STAR BEDDING PRODUCTS LIMITED, a corporation organized under the
laws of the Province of New Brunswick (hereinafter referred to as "Licensee").
WITNESSETH:
WHEREAS, Serta is a service organization serving related companies
which are in the business of manufacturing and selling mattresses and other
articles suitable for bedding purposes; and
WHEREAS, Serta has heretofore adopted, or otherwise acquired, and now
owns, uses, advertises and authorizes the use and advertising of certain trade
names, trademarks and labels identifying such articles; and
WHEREAS, Serta licenses persons, firms and corporations to manufacture
such articles under standard specifications covering the method or process of
the manufacture thereof, the quality of workmanship employed in such manufacture
and the quantity and quality of the materials entering into such manufacture;
and
WHEREAS, Licensee desires to obtain from Serta an exclusive right to
manufacture or sell or manufacture and sell mattresses and other articles in the
territory hereinafter described under the specifications now and hereafter
adopted by Serta for the manufacture of such articles and to obtain the right to
attach the trademarks, trade names and labels of Serta to such articles; and
WHEREAS, Licensee desires to be a holder of Class B stock of Serta and
is willing to comply with the By-Laws of Serta now or hereafter in force and
also with the specifications, rules and regulations of Serta in force from time
to time covering the manufacture and sale of such articles and the use of such
trademarks, trade names and labels.
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NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, it is agreed as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings:
(a) "Affiliate" shall mean any person, firm or corporation
which directly or indirectly controls, is controlled by, or is under common
control with Licensee or any person who is an employee, officer, director or
partner of Licensee.
(b) "Bedding Products" shall mean mattresses, pads, box
springs, bed springs, foundations, sofa beds, studio couches, chair beds, all
other dual purpose sleep equipment, water beds, hybrid flotation systems, and
all mattresses, box springs, bed springs or foundations manufactured for use in
any furniture or products designed at least in part for sleeping.
(c) "Budget Year" shall mean the calendar year.
(d) "Canadian License Form B" shall mean the form of license
so designated by Serta pursuant to Article 37 of the By-Laws of Serta.
(e) "Canadian Licensees" shall mean all persons or entities
which hold a Canadian License Form B from Serta for territories in Canada.
(f) "Canadian National Advertising" shall be defined from time
to time by the Board of Directors of Serta and may apply to any activities
reasonably related to the creation, distribution, placement and supplementing of
advertising of the Serta name, its trademarks and Serta products for exposure or
distribution on a widespread basis throughout all or major portions of Canada.
Without limiting the foregoing, national advertising purposes may include, but
are not limited to, costs and expenses for the purchase of time on network,
regional, local, cable or other television or radio, space in magazines or
newspapers, production of advertising commercials or materials, talent fees,
agency fees, other creative costs, wallboards, cards and other promotional
materials.
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(g) "Dual Purpose Bedding Products" shall mean those Bedding
Products consisting of sofa beds, studio couches, chair
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beds and any other similar dual purpose convertible sleep equipment, whether or
not Serta Products.
(h) "Executive Committee" shall mean a committee, the members
of which shall consist of Serta's Vice President of Marketing and a
representative of each Canadian Licensee, one of whom shall serve as Chairman of
such committee and elected by the licensees.
(i) "First Base Year" shall mean the calendar year immediately
preceding the applicable Budget Year.
(j) "Sales" shall mean the total dollar amount in Canadian
dollars of gross sales of Bedding Products and Serta Products manufactured
and/or sold by Licensee and all Affiliates of Licensee, less returns and
adjusted for pricing errors, but with no deductions for trade and quantity
discounts, payments to or for the direct benefit of sales personnel of customers
and/or cash discounts. Any questions which may arise under the provisions of
this Paragraph 1(j) shall be determined in accordance with generally accepted
accounting practices by the certified public accountants of Serta.
(k) "Sales Base" shall mean, for any Budget Year, the total
dollar amount in Canadian Dollars of Sales of Bedding Products and Serta
Products, but excluding Sales of Sears Private Label Products, Dual Purpose
Bedding Products and Stationary Furniture Products; all as established by the
President of Serta in consultation with the Executive Committee and announced to
Licensee on or before September 30 of the First Base Year.
(l) "Sears Private Label Products" shall mean Bedding Products
sold to Sears and bearing a Sears private label brand.
(m) "Second Base Year" shall mean the calendar year
immediately preceding the applicable First Base Year.
(n) "Serta Canada" shall mean any entity owned, controlled or
designated by Serta from time to time which coordinates the implementation and
placement of Canadian National Advertising of Serta or Serta Products in Canada
and performs such other services to or for the benefit of Canadian Licensees as
Serta may specify.
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(o) "Serta Products" shall mean all products, whether or not
Bedding Products, to which, or to the containers in which the same are packaged,
any trade name, trademark or label of Serta is affixed or which are in any
manner identified as "Serta".
(p) "Stationary Furniture Products" shall mean stationary
upholstered chairs or sofas designed and manufactured to Serta specifications
and bearing a Serta trademark.
(q) "Supplemental Sales Base" shall mean, for any Budget Year,
the total dollar amount in Canadian Dollars of Sales of Dual Purpose Bedding
Products, Stationary Furniture Products and Sears Private Label Products, as
established by the President of Serta in consultation with the Executive
Committee and announced to Licensee on or before September 30 of the First Base
Year.
2. Grant of License.
(a) Serta hereby grants to Licensee the exclusive right and
license to manufacture or sell or manufacture and sell mattresses and other
articles suitable for bedding purposes in the territory described in Exhibit A
attached hereto (the "Territory"), in accordance with the specifications,
By-Laws, rules and regulations of Serta and Serta Canada and the resolutions of
Serta's and Serta Canada's Board of Directors (and any duly constituted
committee of either such Board) in force from time to time.
(b) Licensee shall have the right to manufacture or sell or
manufacture and sell under the license hereby granted so long as Licensee is not
in default in any of the terms, covenants and conditions contained herein to be
kept and performed by Licensee.
(c) A complete set of all specifications, By-Laws and rules
and regulations in force at the date hereof and pertaining to the manufacture or
sale or manufacture and sale under the license hereby granted are attached
hereto as Exhibit B and made a part hereof. All amendments, changes or revisions
of Exhibit B hereafter made by Serta shall become a part hereof to the same
extent as if the same had been in effect at the date hereof.
(d) Licensee shall not sell or deliver any Serta Products to
any customer located outside the Territory.
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(e) Licensee shall at all times exert its best efforts to
obtain maximum sales of Serta Products in the Territory. If Licensee shall not
meet such minimum quota of Sales of Serta Products in the Territory as may from
time to time be provided in Serta's By-Laws under a plan uniformly applicable to
all United States and Canadian Licensees, such failure may be deemed and treated
by Serta to be a default by Licensee hereunder.
3. Stock Subscription. Licensee hereby subscribes to 50 shares of Class
B capital stock of Serta at a price of $50.00 per share, payable upon demand.
Licensee agrees at all times to remain in good standing as a holder of Class B
stock of Serta and to comply with all of the provisions of the By-Laws of Serta
and Serta Canada, the terms and provisions of Exhibit B and the resolutions
adopted from time to time by Serta's or Serta Canada's Board of Directors (and
any duly constituted committee of either such Board); provided, however, that no
fees, assessments or other obligations for payment may be imposed or assessed
upon Licensee by Serta or Serta Canada except as specifically provided in this
License Agreement, as amended from time to time, or as otherwise agreed to
between Licensee and Serta.
4. National Services Requirement.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "Aggregate NSR" shall mean, for any Budget Year,
an amount equal to the greater of (A) the sum of (x) the equivalent in
United States Dollars of the total Sales Base of all Canadian Licensees
for such Budget Year multiplied by the NSR Percentage Factor plus (y)
the equivalent in United States Dollars of the total Supplemental Sales
Base of all Canadian Licensees multiplied by .33%; or (B) United States
$154,000. The equivalent in United States Dollars of Sales shall be
determined by using a conversion factor equal to the average of the
exchange rates between United States Dollars and Canadian Dollars
published in the Wall Street Journal on the 15th day of each month in
the First Base Year.
(ii) "NSR Percentage Factor" shall mean 1.00% for the
Budget Year 1995; 1.10% for the Budget Year 1996; 1.155% for the Budget
Year 1997; 1.21% for the Budget Year 1998; and for each Budget Year
thereafter, the lesser of (A)
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90% of the percentage factor for such Budget Year established by the
Serta Board of Directors pursuant to Article 55(b) of the Serta By-Laws
with respect to determination of the Base Fee payable by Class A
Stockholders of Serta or (B) 110% of the NSR Percentage Factor for the
First Base Year applicable to such Budget Year.
(iii) "Services" shall include, without limitation,
marketing advice, research and development, engineering services or
advice, technical assistance or advice and sales methods and marketing.
(iv) "Review" shall the most recently updated
Statistical Review of Canadian Business as compiled and published by
Statistics Canada.
(v) "Total Territory Bedding Retail Spending", for
the territory of any Canadian Licensee, shall mean the sum of the
products obtained by multiplying (A) the Estimated Number of Households
for each province or county comprising such Canadian Licensee's
territory, as set forth in Table 4001 of the Review, by (B) the Average
Family Expenditure for Springs, Mattresses, Boxes and Frames for such
province or county, as set forth in Table 2318 of the Review.
(vi) "Index" shall mean the fraction, expressed as a
percentage, the numerator of which is the Total Territory Bedding
Retail Spending for Licensee's Territory and the denominator of which
is the sum of the Total Territory Bedding Retail Spending for the
territories of all Canadian Licensees.
(b) In consideration of the license hereby granted and Serta's
rendition during the term hereof of Services to or for the benefit of its
stockholders and licensees, including Licensee, for each Budget Year, Licensee
shall pay to Serta in United States Dollars Licensee's National Services
Requirement ("NSR"). The NSR for Licensee for each Budget Year shall be an
amount equal to the sum of: (i) 50% of the Aggregate NSR for such Budget Year
divided by the number of Canadian Licensees; and (ii) 50% of the Aggregate NSR
for such Budget Year multiplied by the Index.
(c) Serta's Vice President of Manufacturing shall be
responsible for the development of specifications and quality
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control with respect to Serta Products manufactured or sold or manufactured and
sold by Licensee.
(d) The Canadian Regional Accounts Program shall be
administered in accordance with the Rule H of Serta's Rules and Regulations
attached hereto as part of Exhibit B.
5. National Advertising Requirement.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "NAR Percentage Factor" shall mean 1.54% for the
Budget Year 1995; 1.67% for the Budget Year 1996; 1.86% for the Budget
Year 1997; 2.00% for the Budget Year 1998; and for each Budget Year
thereafter, the percentage factor for such Budget Year established by
the Serta Board of Directors; provided, however, that the NAR
Percentage Factor for any Budget Year commencing with the Budget Year
1999 shall not exceed 110% of the NAR Percentage Factor for the First
Base Year applicable to such Budget Year.
(ii) "PAR Sales" shall mean, for any Budget year, for
any Canadian Licensee, an amount equal to the sum of (A) 50% of such
Canadian Licensee's total Sales Base for such Budget Year, and (B) 50%
of the total Sales Base of all Canadian Licensees for such Budget Year
multiplied by the Index for such Canadian Licensee.
(b) In further consideration of the license hereby granted,
for each Budget Year, Licensee shall pay to Serta Canada in Canadian Dollars for
Canadian National Advertising Licensee's National Advertising Requirement
("NAR"). The NAR for Licensee for each Budget Year shall be an amount equal to
the greater of (i) the sum of (A) Licensee's PAR Sales for such Budget Year
multiplied by the NAR Percentage Factor plus (B) .67% of Licensee's Supplemental
Sales Base for such Budget Year; or (ii) Canadian $300,000 multiplied by a
fraction, the numerator of which is the sum of (A) Licensee's PAR Sales for such
Budget Year plus (B) Licensee's Supplemental Sales Base for such Budget Year,
and the denominator of which is the sum of (C) the PAR Sales of all Canadian
Licensees for such Budget Year multiplied by the NAR Percentage Factor plus (D)
the Supplemental Sales Base of all Canadian Licensees for such Budget Year.
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(c) All amounts paid to Serta Canada for NAR shall be budgeted
and expended solely for the purposes of Canadian National Advertising as
determined by Serta's Vice President of Marketing, Serta's Vice President of
Advertising and the Chairman of the Executive Committee.
(c) Any amount expended by Licensee for Canadian National
Advertising separate and apart from amounts paid to Serta Canada or Serta shall
not be counted or computed in satisfaction of Licensee's NAR hereunder. If, for
whatever reason, Serta Canada shall not be in existence, fail to function, be
unable to conduct Canadian National Advertising or be unable or unwilling to
receive Licensee's full NAR, Licensee shall pay to Serta in each Budget Year a
fee ("Advertising Fee") in an amount equal to Licensee's NAR, or such portion of
it as may be unpaid from time to time, in monthly installments in United States
Dollars equivalent in value at the time of each installment to the NAR then due,
and in accordance with such procedures as Serta may from time to time prescribe.
Any Advertising Fee so received by Serta shall be budgeted and expended by Serta
solely for the purposes of Canadian National Advertising.
6. Payment; Records.
(a) As a condition to the continuance of the license hereby
granted, so long as Serta Canada shall be in existence and conduct Canadian
National Advertising, Licensee shall pay its NAR to Serta Canada in each Budget
Year and shall enter into such standard agreements, arrangements or contracts
with Serta Canada as Serta Canada may from time to time reasonably require in
connection with its undertaking to conduct Canadian National Advertising.
(b) Licensee's NSR, NAR and, if applicable, Advertising Fee
shall be due and owing on the 12th day of January of each Budget Year and shall
be payable in twelve equal monthly installments on the 12th day of each month of
each such Budget Year. Licensee agrees that on or before January 1 of each
Budget Year it will execute installment notes for each such fee in favor of
Serta or Serta Canada, as the case may be, in the form attached hereto as
Exhibit C and Exhibit D, respectively. Each note shall provide that the payee
may, in its sole discretion, in the event payment of any installment shall not
be made within 10 days after the date it due, place the note with any bank or
banks selected by it for the purpose of collection of such delinquent
installment and
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any other installment that may be due and unpaid. Each note shall further
provide that in the event the note is so placed for collection, the maker
thereof shall be required to pay all costs of collection, including, but not
limited to, attorney's fees.
(c) All fees and requirements required by this License
Agreement to be paid directly to Serta shall be payable in lawful money of the
United States of America. Licensee shall, if directed by Serta, deposit moneys
in payment of such fees in a bank or banks designated by Serta, which may be a
United States bank or banks, a Canadian bank or banks, or any combination
thereof. Although it is understood that Serta is not subject to Canadian income
taxes in respect of the fees provided for in this License Agreement under
present law, in the event that any such taxes are imposed by any Canadian,
provincial or local authority, Licensee may, if required by law, withhold and
pay such taxes. In the event such taxes are imposed, all rates hereunder for
fees shall be adjusted to produce net receipts thereof to Serta or Serta Canada,
as the case may be, in the amounts set forth in this License Agreement without
reduction by reason of any such tax imposed.
(d) On or before the 15th day of each calendar month, Licensee
shall submit to Serta written reports showing the total Sales of Licensee and
its Affiliates of Bedding Products, whether or not Serta Products, and all other
Serta Products, if any, during the preceding calendar month. In addition, within
150 days after the end of each fiscal year of Licensee, Licensee shall furnish
to Serta a copy of the annual audit report of Licensee certified by Licensee's
independent certified public accountants. Licensee shall furnish such further
information, reports and breakdowns concerning such Sales, and Sales of any
items competitive to Serta Products, in such form and at such times as Serta
shall reasonably require from time to time. All such reports and information
shall be signed and certified by an executive officer of Licensee. Licensee
shall permit authorized agents of Serta to examine, at any and all reasonable
times, the books of account and records of Licensee and its Affiliates
pertaining to Sales and its annual financial statements and reports, together
with any reports of data thereon.
7. Additional Assessments. Notwithstanding anything to the contrary
contained in this License Agreement, to the extent that the actual expenses
incurred in any Budget Year for Canadian National Advertising exceed the amount
budgeted for the Aggregate
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NAR, Licensee shall pay to Serta Canada, Licensee's pro rata share of such
excess amount, based on the ratio of Licensee's Sales Base for the First Base
Year to the Sales Base of all Canadian Licensees for the First Base Year. Any
such amount required to be paid by Licensee under this Paragraph 7 shall be
payable upon demand therefor by Serta Canada.
8. Infringement. Serta shall at all times, so long as Licensee is not
in default hereunder, exert its best efforts to protect Licensee in its
exclusive license for the Territory. Serta shall prosecute or defend any and all
litigation to which Licensee may be made a party arising out of the use by the
Licensee of the trade marks, trade names and labels adopted by Serta from time
to time or arising out of the infringement of any patents in connection with the
method of manufacturing Serta Products or in connection with any articles or
materials used in the manufacture of such products, provided that Licensee gives
Serta timely notice of any and all litigation so as to enable Serta to appear in
such litigation and prepare properly for the prosecution of defense thereof.
Serta agrees to save Licensee harmless from any and all loss, costs or damages
sustained by Licensee arising out of any such litigation, so long as Licensee is
not in default in the performance of any of the terms, covenants and conditions
hereof.
9. Termination. If Licensee shall default in the prompt and full
compliance with or performance of any of the provisions of this License
Agreement, Serta may terminate the license hereby granted and the rights and
interests of Licensee as a stockholder of Serta upon not less than 30 days'
prior written notice to Licensee specifying such default or defaults and the
effective date of such termination. Licensee shall have the right to cure any
such default or defaults prior to the date of termination as specified in such
notice. Nothing contained in this Paragraph 9 shall limit or affect the
consequences of a prohibited assignment or sub-licensing by Licensee under
Paragraph 11 of this License Agreement.
10. Good Will. The good will created in connection with the manufacture
or sale or manufacture and sale by Licensee of Serta Products shall at all times
be the property of Serta. In the event the license granted hereby shall be
terminated pursuant to the provisions of this License Agreement, all rights of
Licensee to use such trademarks or to enjoy the benefits of such good will shall
terminate and revert to Serta. From and after the date of such
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termination, Licensee shall not manufacture or sell any Serta Products and shall
not use or affix any of the trade name, trademarks or labels theretofore used by
it in connection therewith under the terms of the license granted hereby upon
any articles thereafter manufactured or sold by Licensee and Licensee shall not
hold itself out to the public as a licensee of Serta or as having any rights in
the Serta name or good will. Serta shall have the right to enforce by injunction
the full and faithful performance by Licensee of this covenant and Licensee
hereby consents to the granting of a temporary injunction and a permanent
injunction, without bond, against Licensee.
11. Assignment. (a) Neither the license granted hereby nor any of the
rights or privileges granted to Licensee hereunder shall be assignable by
Licensee or by operation of law or otherwise to any other person, firm or
corporation. Licensee shall not sub-license or sub-contract any of such rights
or privileges, including, without limitation, the right to manufacture or sell
or manufacture and sell Serta Products, to any other person, firm or corporation
whomsoever. Notwithstanding any other provision of this License Agreement, any
such assignment or sub-license shall forthwith terminate, without notice, the
license hereby granted to Licensee and the rights and interests of Licensee as a
stockholder of Serta and any such sub-contract shall constitute a default
referred to in Paragraph 9 above.
(b) As used in this Paragraph 11, the following terms shall
have the following meanings:
(i) The term "voting shares" shall mean the issued
and outstanding voting shares in a corporation and the voting rights or
beneficial interest in its voting shares.
(ii) The term "majority shares" shall mean such
number of the voting shares in a corporation as shall amount to more
than one-half thereof.
(iii) The term "control stockholder" shall mean the
owner or owners of the majority shares in a corporation.
(c) Each of the following events shall be deemed and treated
to be an assignment of the license hereby granted prohibited by the provisions
of Paragraph 11(a) above:
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(i) The filing by Licensee, or by the control
stockholder of Licensee, of a voluntary petition or similar pleading
under any section or sections of any Bankruptcy Act or in any court to
declare Licensee, or its control stockholder, insolvent;
(ii) An assignment for the benefit of creditors by
Licensee or by its control stockholder;
(iii) The filing against Licensee or its control
stockholder of any involuntary petition or similar pleading under any
section or sections of any Bankruptcy Act or any involuntary petition
or similar pleading in any court to declare Licensee or its control
stockholder insolvent, or the appointment of a receiver for Licensee or
its assets or for the control stockholder or his assets; provided,
however, that if such petition or pleading shall be dismissed or
withdrawn, or such appointment shall be vacated within 30 days after
the filing or occurrence thereof, the provisions of this Paragraph
11(c)(iii) shall not apply.
(d) Subject to the provisions of Paragraphs 11(e) and 11(f)
below, each of the following events shall also be deemed and treated to be an
assignment of the license hereby granted prohibited by the provisions of
Paragraph 11(a) above:
(i) The transfer, by sale or otherwise, of the
majority shares in Licensee.
(ii) The exchange of the majority shares in Licensee
for less than the majority shares in another corporation pursuant to a
merger with, consolidation into or other form of reorganization
involving another corporation.
(iii) The transfer of the majority shares in Licensee
by the control stockholder to another person or persons by successive
transfers of such number of voting shares in Licensee as will total the
majority shares in Licensee, or as the result of the issuance or
successive issuances of additional voting shares in Licensee, or as the
result of the sale or successive sales of treasury shares by Licensee
for cash or other consideration or in satisfaction of any debt or debts
of Licensee, or as consideration for the acquisition of shares or other
interests in another
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corporation, firm or proprietorship, or as the result of the merger of
another corporation into Licensee, or as the result of any combination
of the foregoing events. Two or more transfers or issuances of voting
shares in Licensee shall be deemed and treated to be successive
transfers or successive issuances regardless of the period in which the
same shall be effected.
(iv) If the majority shares in Licensee are owned,
directly or indirectly, by another corporation and any event set forth
above in this Paragraph 11(d) shall occur in respect of such
corporation, the occurrence of such event shall be deemed and treated
to be an assignment of this license prohibited by the provisions of
Paragraph 11(a) above, with the same force and effect as if such event
had occurred with respect to Licensee.
(e) Transfers to the following described classes of persons
shall not be deemed or treated to be transfers for purposes of Paragraph 11(d)
above:
(i) The spouse, father, mother, brothers, sisters,
children or grandchildren of the transferor, including, but not in
limitation, such persons as are so related through adoption.
(ii) A donee by bona fide gift or legatee or heir
through inheritance, in trust or otherwise, of a transferor.
(iii) A person or persons who shall acquire their
voting shares in Licensee pursuant to a contract or contracts in force
and effect on the date of execution of this license; provided that
concurrently with the execution of this License Agreement, Licensee
furnishes to Serta a written statement setting forth the date of the
execution of any such contract or contracts, the persons signatory
thereto and their addresses, and the number of voting shares in
Licensee subject thereto.
(iv) A transferee of the control stockholder of
Licensee provided that one or more classes of the voting shares of
Licensee is registered under Section 12(b) or Section 12(g) of the
Securities Exchange Act of 1934 or any successor statute then in effect
or any comparable provisions
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of Canadian law, and provided further that after giving effect to such
transfer, at least one of the classes of voting shares of Licensee so
registered remains, and is required to remain, so registered.
(v) A transferee of the control stockholder of any
corporation ("parent corporation") which directly or through or
together with one or more subsidiaries owns the majority shares in
Licensee, provided that one or more classes of the voting shares of
parent corporation or any of such subsidiaries is registered under
Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934
or any successor statute then in effect or any comparable provision of
Canadian law, and provided further that after giving effect to such
transfer, at least one of the classes of voting shares so registered
remains, and is required to remain, so registered.
(g) Upon the written request of Licensee to Serta and the
submission to Serta by Licensee of such facts and information as Serta shall
request, Serta may, by the affirmative vote of a majority of its Board of
Directors, consent to any assignment referred to in Paragraph 11(d) above. Such
consent shall not be unreasonably withheld. If, following a request by Licensee
that Serta consent to such an assignment, a majority of Serta's Board of
Directors shall not consent thereto, or shall not take action thereon within 30
days after Serta receives from Licensee such facts and information as it shall
have requested concerning such assignment, License may, by written notice to
Serta, request that such consent be considered and acted upon by the Canadian
Licensees at the next annual stockholders' meeting or, if so requested by
Licensee, at a special meeting of the Canadian Licensees called by Serta for
such purpose within 10 days after it receives such request. At such meeting the
Canadian Licensees may consent to such assignment by affirmatively voting
therefor in accordance with Serta's By-laws. Such vote shall be final and
binding on Serta and Licensee.
12. Option to Purchase. In the event that the license hereby granted is
terminated for any reason whatsoever, or in the event Licensee ceases to be a
stockholder of Serta, then in either such event Serta shall have an exclusive,
irrevocable option to purchase within 90 days of the occurrence of such event
any and all materials, such as units, ticking, border, etc., then on hand with
the Licensee specified for use in or as Serta Products at the
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market price of such materials determined as of the date of the occurrence of
such event.
13. Construction. This License Agreement supersedes all prior
agreements and contracts whatsoever between the parties, provided, however, that
this License Agreement is subject to a Memorandum of Agreement of even date
herewith, in the form attached to this License Agreement. The terms and
provisions of this License Agreement are severable and, if any part hereof shall
be held invalid of unenforceable for any reason, the remaining provisions hereof
shall not be invalidated but shall remain in full force and effect.
14. Assignment of Trademarks and Trade Names. Licensee hereby assigns
to Serta all trademarks and trade names now or hereafter registered and used by
Licensee in conjunction with the name Serta or any of the trademarks or trade
names now or hereafter owned by Serta; provided, however, in the event Licensee
wishes to employ, register or cause to be registered a trademark or trade name
in conjunction with the name Serta or any of the trademarks or trade names now
or hereafter owned by Serta, Licensee shall first obtain the written consent of
Serta, which will not be unreasonably withheld, and all such trademarks and
trade names shall thereafter be the property of Serta and rights thereunder
shall be granted to Licensee in accordance with the terms and conditions of this
Licensee Agreement, as amended from time to time.
15. Notices. All notices to be given hereunder shall be sent by United
States or Canadian, as the case may be, certified mail, postage prepaid, and
shall be addressed to Serta at the principal office of Serta and to Licensee at
____________________________ . All notices mailed as herein provided shall be
deemed to have been received 5 days after the date of mailing. Serta and
Licensee shall have the right, by notice given as herein provided, to change the
mailing address to which notices to it shall be sent by the other party.
16. Amendment. This License Agreement may be amended at any time or
times, but only upon the occurrence of both of the following:
(a) approval by two-thirds of the whole Board of Directors of
Serta; and
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(b) approval on a per capita basis of two-thirds of all
Canadian Licensees at the time such action is taken; provided, however, that for
the purposes of this Paragraph 16, Licensees who hold more than one license from
Serta or who are Affiliates of each other shall be counted as and may vote as
one Canadian Licensee, regardless of the number of licenses held.
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IN WITNESS WHEREOF, Serta and Licensee have caused this License
Agreement to be signed in their respective corporate names by their duly
authorized officers, as of the day and year first above written.
SERTA, INC. STAR BEDDING PRODUCTS LIMITED
By:_____________________ By: ______________________________
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19
EXHIBIT A
DESCRIPTION OF TERRITORY
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EXHIBIT B
SPECIFICATIONS, BY-LAWS AND RULES AND REGULATIONS
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EXHIBIT C
FORM OF INSTALLMENT NOTE FOR NSR
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EXHIBIT D
FORM OF INSTALLMENT NOTE FOR NAR
