EXHIBIT 2.17
TRADEMARK LICENSE AGREEMENT
TRADEMARK LICENSE AGREEMENT (this "Agreement") is entered into as of
February 1, 1999, by and between APS Management Services, Inc., a Delaware
corporation, with offices at 00000 Xxxx X. Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxx,
Xxxxx 00000, and a debtor and debtor-in-possession in a case pending under
Chapter 11 of the Bankruptcy Code ("Licensee"), and Auto Parts Express, LLC, a
Delaware limited liability company, with offices at c/o 00000 Xxxx X. Xxxxxxx
Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000 ("Licensor"). Capitalized terms used but
not otherwise defined in this Agreement have the meanings given in the Asset
Purchase Agreement.
RECITALS
WHEREAS, in connection with the sale of certain assets (the
"Purchased Assets") by Licensee to Licensor pursuant to that certain asset
purchase agreement (the "Asset Purchase Agreement") dated as of January 11,
1999, and the assignment of the right, title and interest in and to the Marks,
subject to any and all rights of any parties other than Licensee in the Marks,
which such interests and rights may have arisen by prior grants by Licensee or
otherwise, by Licensee to Licensor pursuant to that certain Trademark Assignment
dated as of even date herewith (the "Trademark Assignment"), 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/or sale and leasing of automotive
replacement parts, accessories, supplies and other inventory, property, business
locations and fixed assets owned by Licensee on the Closing Date (the
"Business");
WHEREAS, as a result of the assignment by Licensee pursuant to the
Trademark Assignment of all of its right, title and interest in and to the
Marks, subject to any and all rights of any parties other than Licensee in the
Marks, Licensor is the owner of all right, title and interest in and to the
trademarks set forth on Schedule "A" attached hereto (the "Marks");
WHEREAS, Licensee wishes to use the Marks in connection with sales
of automotive parts inventory and other property of Licensee by methods
including, but not limited to, sales of business locations of Licensee,
liquidation or going out of business sales or other dispositions of inventory
and other goods of Licensee in bulk or in or outside of the ordinary course of
business; and
WHEREAS, Licensor wishes to grant Licensee a license to use the
Marks for the purposes set forth herein, including, but not limited to, sales of
automotive parts inventory and other property of Licensee by methods including,
but not limited to, sales of business locations of Licensee, liquidation or
going out of business sales and other dispositions of inventory and other goods
of Licensee in bulk or in or outside of the ordinary course of 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, the parties 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 and Licensee's
subsidiaries and Affiliates: (a) a transferable, exclusive and royalty-free
license to use and sublicense the Marks for a period of six (6) months,
commencing on the date of this Agreement and terminating on the date occurring
six (6) months from the date of this Agreement (the "Licensee Exclusive
Period"), in those market areas for each location where Licensee, its
subsidiaries or Affiliates continues to conduct business or own or lease real
property in such market areas immediately following the Closing (the "Defined
Territory"); and (b) a transferable, non-exclusive and royalty-free license to
use and sublicense the Marks anywhere in the Defined Territory for a period of
eighteen (18) months, commencing on the termination of the Licensee Exclusive
Period and ending on the date occurring twenty four (24) months from the date of
this Agreement, with the option to extend the non-exclusive license for an
additional twelve (12) months upon thirty (30) days prior written notice to
Licensor given at any time prior to three hundred sixty (360) days after the
commencement of the Licensee Non-Exclusive Period as defined herein (the
"Licensee Non-Exclusive Period"); PROVIDED, HOWEVER that the exclusive license
granted herein shall not prohibit or restrict the use of the Marks by Licensor:
(i) in the Houston, Texas market area in connection with Licensor's corporate
office operations; (ii) in connection with sales to associate jobbers of the
Hartford Distribution Center, (iii) in any territory solely in connection with
the collection of the accounts allocable to (a) the Hartford Distribution Center
or (b) the Purchased Locations; or (iv) in connection with national advertising
or marketing efforts.
1.2. PERMITTED USE OF MARKS. Licensee's license to use the Marks
shall be limited to: (a) uses by Licensee, its agents or sublicensees relating
to the carrying on of the Business (including, without limitation, acquisitions
of inventory in the ordinary course of business) by Licensee and / or by such
agent or sublicensee who, by means of sales or transfers of assets or the
business locations of Licensee may, at any time within the Licensee Exclusive
Period or the Licensee Non-Exclusive Period, sell or otherwise dispose of assets
acquired from Licensee and / or conduct business at the business locations at
which Licensee continues to conduct business or own or lease real property
immediately following the Closing Date; and (b) any uses for which Licensee, its
agents or sublicensees may require use of the
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Marks in connection with sales of automotive inventory or other property of
Licensee, by means of, including but not limited to, sales of the business
locations of Licensee, liquidation or going out of business sales, or other
dispositions in bulk or in the ordinary course of business of automotive
inventory or other property of Licensee (including, but not limited to,
dispositions by way of assignment, consignment or sales to third parties for the
purposes of liquidation and / or resale), PROVIDED, HOWEVER that so long as a
purchaser of Licensee's or any sublicensee's inventory is not conducting
business under any APS trade name or name of Licensor or holding itself out to
be an authorized agent of Licensor or Licensee, nothing contained in this
Agreement or the Trademark Assignment shall prohibit any such purchaser from
reselling or disposing of such property worldwide or require the grant of a
license hereunder for such purposes. Except as otherwise provided herein,
Licensee shall not use the Marks in a manner inconsistent with Licensee's past
practices in using the Marks or in a manner which materially disparages or is
materially detrimental to Licensor's assets or business. Licensee shall have the
right to sublicense and assign all, or any part, of its rights in the Marks
under this Agreement to any third party it reasonably and in good faith believes
will uphold the terms of this Agreement, PROVIDED, however that any such
sublicense or assignment shall: (i) provide for a right of termination and
recovery of damages from the respective sublicensee or assignee in the event of
a breach of the terms of this Agreement by such sublicensee or assignee; and
(ii) be enforceable by Licensor in the event Licensee fails or refuses to
enforce such sublicense or assignment. Licensor hereby acknowledges and agrees
that it hereby irrevocably waives any and all right of Licensor to object to the
assignment or sublicense by Licensee on such terms of all, or any part, of its
rights in the Marks under this Agreement to any third party that Licensee
reasonably and in good faith believes will uphold the terms of this Agreement.
Licensor hereby further acknowledges and agrees that nothing contained within
this Agreement shall entitle, or shall be construed to entitle, Licensor to any
portion of the proceeds of any sales or transfers by Licensee or any third party
of products or assets bearing the Marks.
2. RESERVATION OF LICENSOR'S RIGHTS. All rights in and to the Marks not
specifically granted to Licensee by this Agreement are reserved to Licensor.
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3. OWNERSHIP OF MARKS.
3.1. RIGHTS IN MARKS. Licensee hereby acknowledges that the Marks
are the exclusive property of Licensor, subject to any and all rights or
interests of any parties other than Licensor in the Marks, which such rights or
interests may have arisen by prior grants by Licensee or otherwise and, except
as provided in or contemplated by this Agreement, none of Licensee, and, to the
extent their actions are within the control of Licensee, its subsidiaries or its
Affiliates, shall manufacture, market, advertise, promote, ship, distribute or
sell (or permit, to the extent that granting such permission is within the
control of Licensee, 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. None of Licensee, or any of its subsidiaries,
Affiliates, sublicensees, agents or subcontractors, has any right, title or
interest in or to the Marks other than the rights granted herein or authorized
hereby. Licensee agrees that it shall not take (or permit, to the extent that
granting such permission is within the control of Licensee, or cause to be
taken) any action to impair, attack or interfere with Licensor's rights in the
Marks and that all use of the Marks under or contemplated by this Agreement
shall inure solely to the benefit of Licensor. Licensee shall not seek to
register any of the Marks anywhere in the world.
During the Licensee Exclusive Period, Licensor shall not grant to
any third party any rights to use the Marks in the Defined Territory.
4. QUALITY CONTROL.
All goods and services distributed, sold and provided by Licensee
bearing the Marks shall be of standards of quality which are equivalent to those
standards used by Licensee in connection with the Business at the Closing Date.
Any private label goods which Licensee purchased from its customary
manufacturers, vendors or sources, prior to the Closing Date, which are in
Licensee's inventory prior to the Closing Date or which are returned to Licensee
or its agent by a third party for any reason other than the quality of such
goods after the Closing Date shall be deemed to meet Licensor's quality
standards. Subject to Paragraph 15(h), to the extent that sales and promotional
materials are not generally of the same kind or quality as those used by
Licensee prior to the Closing, all sales and promotional materials produced or
distributed by Licensee or its agents that include any of the Marks shall be
approved in advance by Licensor, which approval shall not be unreasonably
withheld. Any sales and promotional materials submitted to Licensor for approval
or disapproval shall be deemed approved if Licensor neither approves or
disapproves such material within five (5) business days after receipt by
Licensor.
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5. ENFORCEMENT; INDEMNIFICATION.
5.1. LICENSOR REPRESENTATIONS; INDEMNIFICATION. Licensor represents
and warrants that: (i) it owns all right, title and interest in and to the
Marks, subject to any and all rights or interests whatsoever of any parties
other than Licensor in the Marks, which such rights or interests may have arisen
by prior grants by Licensee or otherwise; (ii) it has the right to grant to
Licensee the license of the Marks hereunder; (iii) 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 (iv), to its knowledge, the rights licensed
hereunder do not violate any obligations of Licensor to any third parties.
Licensor shall defend, indemnify and hold harmless Licensee and its
subsidiaries, Affiliates, sublicensees, subcontractors and officers, directors
and employees of each of the foregoing and each of them, against any and all
claims, demands, damages, losses and expenses in any amounts or of any nature
(including reasonable attorney's fees) which arise from or in connection with
any inaccuracy in or in connection with the breach of any of Licensor's
warranties, representations or obligations under this Agreement.
6. TERMINATION. This Agreement shall automatically terminate without prior
notice to Licensee at 5:00 p.m. Eastern time on the last day of the Licensee
Non-Exclusive Period. Solely as to any assignee or sublicensee that acquires
rights in the Marks subsequent to the date hereof (other than a Plan Assignee,
as hereinafter defined), Licensor shall have the right to terminate any
sublicense or assignment made pursuant to this Agreement if the respective
sublicensee or assignee is in material breach of any of the terms or conditions
of this Agreement and fails to cure such breach within twenty (20) days of
receipt of written notice of such breach from Licensor.
7. EFFECTS OF TERMINATION. Upon termination of this Agreement, all rights,
licenses and privileges granted hereunder to Licensee, its agents, subsidiaries
and its Affiliates shall automatically terminate and Licensee shall promptly:
(a) cease all use of the Marks in any form;
(b) cease representing itself as a licensee of Licensor; and
(c) promptly (or as soon as is practicable) 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 in its possession or control that contain any of the
Marks.
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8. 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 Licensor: Auto Parts Express, LLC
c/o 00000 Xxxx X. Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: E. Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy Verner, Liipfert, Bernhard,
(which shall not XxXxxxxxx and Hand, Chartered
constitute notice) 1111 Xxxxx, Suite 4700
to: Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile No.: (000) 000-0000
If to Licensee: APS Holding Corporation
00000 Xxxx X. Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
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: Xxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
9. CONFIDENTIALITY. Each of Licensor and Licensee agrees to keep, and to
cause each of its affiliates, directors, officers, and employees to keep,
confidential any and all confidential information of the other party that it
receives in the course of performing its obligations hereunder (except that such
information may be shared, on a confidential basis, with the party's
professionals and agents) and each will not, without the other party's written
consent, use any of such confidential information except as reasonably necessary
to perform its duties under this or another of its agreements with the other
party. Upon termination of this Agreement, each party will return, and will
cause its affiliates to return, to the other party, all original documents and
copies of the confidential information
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which are in its possession. Notwithstanding the foregoing, Licensee shall be
permitted to provide copies of this Agreement to its lenders and the Bankruptcy
Court and to prospective sublicensees. This Paragraph 9 shall survive the
termination of this Agreement.
10. 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.
11. ASSIGNMENT. This Agreement shall be binding on the parties hereto and
on their respective successors and permitted assigns. Licensor hereby
acknowledges and agrees that Licensee may, upon five (5) days' notice to
Licensor, assign, transfer and / or hypothecate its obligations and / or rights
under this Agreement in whole or in part, directly or indirectly, by operation
of law or otherwise. Licensee shall give Licensor notice of all executed
sublicenses within twenty (20) days of execution thereof. Licensor hereby
expressly acknowledges and agrees that Licensee shall have the right to assign
all, or any part of, its rights and obligations hereunder to a liquidating trust
or other vehicle created pursuant to a plan of reorganization (such liquidating
trust or other vehicle, a "Plan Assignee").
12. GOVERNING LAW; VENUE. 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. For so long as
Licensee is subject to the jurisdiction of the Bankruptcy Court, the parties
hereto and all assignees and sublicensees permitted hereunder irrevocably elect
as the sole judicial forum for the adjudication of any matter arising under or
in connection with this Agreement, and consent to the jurisdiction of, the
Bankruptcy Court.
13. BREACH AND OPPORTUNITY TO CURE. Licensor hereby agrees and
acknowledges that it will promptly provide written notice to Licensee of any
breach or suspected breach by Licensee of the terms of this Agreement. Licensor
hereby agrees and acknowledges that Licensee shall have thirty (30) days' time
from the date of Licensee's receipt of such notice to cure any breach of this
Agreement before Licensor shall have any right to seek the remedies allotted
Licensor under the terms of this Agreement.
14. REMEDIES. Licensor expressly acknowledges and agrees that,
notwithstanding anything to the contrary contained in this Agreement, in the
event of Licensee's breach of this Agreement and subsequent failure to cure such
breach in the time allotted
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Licensee to cure such breach under the terms of this Agreement, Licensor's sole
and exclusive remedy shall be: (a) to seek appropriate specific performance of
Licensee's obligations hereunder and; (b) solely to the extent that such breach
and continued use of the Marks would materially and adversely affect the
business of Licensor, to seek injunctive relief to prevent Licensee's continued
use of the Marks. Licensor hereby expressly acknowledges and agrees that
Licensee shall not be liable for any monetary damages, to which Licensor might
otherwise be entitled, as a result of any conduct by Licensee or its agents,
sublicensees or assigns under this Agreement, including, but not limited to,
sales of property of Licensee bearing the Marks following termination of this
Agreement. The limitations set forth in this Section 14 shall not apply to the
remedies of Licensor against any assignees or sublicensees of Licensee, other
than a Plan Assignee.
15. 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 5, 7, 9, 11, 12, 13, 14 and 15 hereof 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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(h) Licensor hereby agrees and acknowledges that nothing in this
agreement shall, or shall be construed or interpreted to, limit or restrict in
any way the (1) price, quantity, and, except as to sales and promotional
materials, to the extent otherwise required by Paragraph 4 hereof, method or
means by which or in which Licensee may sell, assign or otherwise dispose of any
property of Licensee bearing the Marks and (2) the use of the Marks in legal
proceedings including the Chapter 11 cases of Licensee and its Affiliates.
Licensor hereby expressly agrees and acknowledges that nothing herein shall
prohibit Licensee or its agents from conducting "going out of business" or
similar type sales at business locations in the Defined Territory following the
Closing Date.
IN WITNESS WHEREOF, the authorized representatives of the Parties have
signed this Agreement as of the Closing Date:
AUTO PARTS EXPRESS, LLC, as Licensor
By: /s/ E. XXXXXX XXXXXX
Name: E. Xxxxxx Xxxxxx
Title: Executive Vice President
APS MANAGEMENT SERVICES, INC., as Licensee
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: President
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SCHEDULE A
TRADEMARK REGISTRATIONS
XXXX REG. NO. REG. DATE
---- -------- ---------
FREEZE-TEST 882,122 December 9, 1969
POWER 90 and Design 1,653,852 August 13, 1991
BIG A PLUS 1,709,036 August 18, 1992
"HUSKY" (Stylized) 559,898 June 10, 1952
A AMERICAN PARTS (Stylized) 776,950 September 15, 1964
VALU-TEST 864,239 January 28, 1969
BIG A 1,140,510 October 14, 1980
GENERAL SERVICE LINE 1,088,954 April 4, 1978
POWERREADY 1,332,869 April 30, 1985
STRAIGHT AWAY (Stylized) 1,541,510 May 30, 1989
BIG A (Stylized) 1,388,039 April 1, 1986
THE FIRST LETTER IN AUTO 1,374,295 December 3, 1985
PARTS
AUTOPRO 1,122,026 July 10, 1979
INSTALLERS' EXPRESS 1,840,109 June 14, 1994
AUTOPRO 1,869,237 December 27, 1994
A and Design 1,014,372 June 24, 1975
INSTALLERS' SERVICE WAREHOUSE 1,945,971 January 2, 1996
and Design
INSTALLERS' SERVICE WAREHOUSE 1,962,687 March 19, 1999
and Design
TIME IS THE NEW MONEY 2,010,795 October 22, 1996
I S W 2,021,267 December 3, 1996
HERO TEAM (Stylized) 2,010,023 October 22, 1996
TECHKNOWLEDGE (Stylized) 2,125,540 December 30, 1997
APS 1,341,411 June 11, 1985
COMMON LAW TRADEMARKS
XXXX DESCRIPTION OF XXXX
---- -------------------
CARRYALL
TRAIL BLAZER
AUTOPRO PROFESSIONAL PARTS
PEOPLE and Design [GRAPHIC OMITTED - The graphic depicts
the image subject to the common
law trademark]
BIG A (Stylized) [GRAPHIC OMITTED - The graphic
depicts the image subject to the
common law trademark]
ISW UNDERCAR PARTS SPECIALISTS
and Design [GRAPHIC OMITTED - The graphic
depicts the image subject to
the common law trademark]
