1
EXHIBIT 10.40
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT (this "Agreement") dated as of the 31st
day of October, 1997 between Culligan International Company, a Delaware
corporation (the "Licensor"), and Packaged Ice, Inc., a Texas corporation (the
"Company").
WHEREAS, the Licensor has agreed to license to the Company the right to
use the "Water by Culligan" and "Ice by Culligan" trademark and logo (as more
fully described below) in connection with the Products (as defined below) in
the Territory (as defined below), subject to the terms and conditions set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
(a) The term "Xxxx" shall be used herein to mean the trademark
"Culligan" used solely in the phrases "Water by Culligan" and "Ice by Culligan"
solely in the accompanying logos in the full and complete form identified in
Exhibit A hereto, as modified from time to time in writing by the Licensor.
(b) The term "Products" shall mean comestible ice sold from machines
that make and package and merchandise ice that are located in retail outlets
where ice is sold to consumers.
(c) The term "Revenues" shall mean gross revenues which arise from
the sale of Products in connection with the Xxxx, less (i) promotional and cash
discounts, (ii) rebates, allowances, refunds, charge-backs and credits, (iii)
amounts collected for sales, excise and value-added taxes and (iv) duties,
handling and shipping charges billed as separate items.
(d) The term "Territory" shall mean the United States of America and
Mexico.
2
2. LICENSE.
(a) The Licensor hereby grants to the Company an exclusive (except as
provided in Section 14 hereof) license to use the Xxxx in connection with the
advertising, promotion, distribution, and sale of Products in the Territory
during the Term (as defined below) and subject to the terms and conditions
hereof. The license granted hereby is non-transferable and non-assignable
(except as provided in Section 15.5 hereof) and may not be directly or
indirectly sub-licensed.
(b) The Company warrants, represents and agrees that it shall not use
the Xxxx, alone or in combination with other terms, as part of a corporate
name.
3. TERM. The "Term" of this Agreement shall commence on the date
hereof (the date hereof through December 31, 1997 constituting the "Initial
Term") and, subject to earlier termination as provided below, shall
automatically renew for successive one year terms beginning on January 1 and
ending on December 31 of each subsequent calendar year (the "Renewal Terms").
4. ROYALTIES.
(a) The Company agrees to pay to the Licensor $1,750,000 on the date
hereof as a one-time, non-refundable fee which has been fully earned by the
Licensor as of the date hereof.
(b) The Company further agrees to pay to the Licensor as a minimum
royalty ("Minimum Royalties") the following sums for the Initial Term and each
Renewal Term:
Initial and Renewal Terms Minimum Royalties
------------------------- -----------------
1997 $ 0
1998 $ 50,000
1999 $ 500,000
2000 $1,000,000
2001 $1,500,000
The Licensor and the Company shall negotiate in good faith the Minimum
Royalties for the Renewal Terms after 2001. In the event that the Licensor and
the Company do not agree in writing by June 1, 2001 to Minimum Royalties for
the Renewal Terms subsequent to 2001, this Agreement shall automatically
terminate on December 31, 2001.
2
3
(c) Minimum Royalties for each Renewal Term shall be payable on a
quarterly basis (i.e., one-quarter of the Minimum Royalties for each Renewal
Term shall be payable in cash on the March 31, June 30, September 30, and
December 31 of such Renewal Term, respectively). All of the payments made by
the Company as Minimum Royalties in any calendar year shall be credited against
Earned Royalties (hereinafter defined) payable for such calendar year. No
credit shall be permitted against Minimum Royalties payable for any Renewal
Term on account of Earned Royalties (as defined below) or Minimum Royalties
paid for any other Renewal Term, and Minimum Royalties shall be non-refundable.
(d) The Company further agrees to pay to the Licensor earned
royalties ("Earned Royalties") in an amount in cash equal to 2.5% of all
Revenues. Within thirty days after the end of the Initial Term and each
Renewal Term (each, a "Preceding Term"), the Company shall prepare and furnish
to the Licensor a statement certified by the chief accounting officer of the
Company (the "Statement") setting forth in reasonable detail (i) a description,
including the total quantity, of Products sold during the Preceding Term, (ii)
a description, including the total quantity, of Products sold in connection
with the Xxxx during the Preceding Term, (iii) the gross revenues from all
Products sold during the Preceding Term, (iv) the gross revenues from all
Products sold in connection with the Xxxx during the Preceding Term, (v) a de-
scription of, including the amount of and reasons for, each deduction from
gross revenues from all Products to determine Revenues, and (v) the Earned
Royalties attributable to the Preceding Term. In the event that the Earned
Royalties attributable to such Preceding Term exceed the amount of Minimum
Royalties paid during such Preceding Term, the Company shall pay to the
Licensor at the time that it furnishes the Statement (but not later than the
30th day following the end of such Preceding Term) an amount in cash equal to
the excess of the amount of Earned Royalties for such term over the amount of
Minimum Royalties paid in respect of such term. This Section 4(d) shall
survive any termination or expiration of this Agreement.
5. AUDIT. The Company shall keep true, complete and accurate
records, books of account and related information containing particulars
showing (i) all of its shipments and sales of Products, (ii) all of its
shipments and sales of Products in connection with the Xxxx, (iii) all
deductions from gross revenues from Products to determine Revenues, and (iv)
all other information which may be necessary for the purpose of verifying the
amount of Earned Royalties due and payable to the Licensor. Such records,
books of account and related information shall be kept in the principal place
of business of the Company and said records, books and the supporting data
shall be available, upon reasonable advance notice and
3
4
during normal business hours, at the request of the Licensor for inspection by
an independent certified public accountant retained by the Licensor at the
Licensor's expense for the purpose of verifying any matter relevant to this
Agreement. In the event that an inspection reveals that the amount of Earned
Royalties reported and paid to the Licensor for any Preceding Term was under-
reported in an amount which exceeds 3% of the total amount due for such
Preceding Term, the Company shall be required to pay to the Licensor the
reasonable fees charged by the independent certified public accountant to
determine the underpayment. In any event, the Company shall pay any Earned
Royalties determined to be due by reason of such inspection. This Section 5
shall survive any termination or expiration of this Agreement.
6. MARKING. The Company agrees to use the Xxxx with the appropriate
common law or statutory trademark notice to maintain and enhance the validity
and protectability of the Xxxx (for example, the trademark notice would consist
of "Water by Culligan(R)" or "Ice by Culligan(R)," as the case may be). Such
notice shall be placed on all packaging and machines for the Products bearing
the Xxxx (or otherwise utilizing the Xxxx in connection with sales thereof) and
in all other ways customary in the trade.
7. QUALITY OF GOODS AND SERVICES. The design, manufacture, styling,
workmanship, safety and quality of all Products, packaging for Products,
machines dispensing Products used in connection with the Xxxx (including all
services in connection therewith), and all advertising, marketing and
promotional materials relating or referring to the Xxxx and every use of the
Xxxx shall at all times be in conformance with applicable industry standards,
shall at all times comply in all material respects with all applicable laws and
regulations of any relevant jurisdiction, and shall at no time be at a level
below that maintained by the Company as of the date of this Agreement. Within
60 days of the execution of this Agreement, the Licensor and the Company shall
create and adopt written guidelines (the "Guidelines") with respect to the
acceptable quality of the Products, packaging for Products, machines dispensing
Products and all other materials (including but not limited to all advertising,
marketing and promotional materials) using the Xxxx. The Company shall furnish
to the Licensor, at the Licensor's request not more than once every six (6)
months, representative samples of Products, packaging for Products, photographs
of machines dispensing Products and all other materials (including but not
limited to all advertising, marketing and promotional materials) using the
Xxxx. In the event the Licensor provides written notice to the Company stating
that any Products, packaging for Products, machines dispensing Products or
materials used in connection with the Xxxx (including all services in
connection therewith), do not meet the quality standards set forth in the
Guidelines (or if such Guidelines have not yet been adopted,
4
5
such Products, machines or materials do not in the reasonable judgment of the
Licensor meet the level of quality generally associated with the Xxxx or
otherwise tarnish the goodwill or reputation associated with the Xxxx) or the
other quality standards in this Section 7, then the Licensor or its authorized
agents and representatives shall have the right, at the Licensor's expense, to
inspect all facilities or premises maintained by or on behalf of the Company
and all facilities and premises at which Products are sold, including, without
limitation, the retail stores at which the Products are sold, the Company's
showrooms and the plants, factories or other manufacturing, production or
warehouse facilities of the Company at which the Products, packaging, machines
or materials using the Xxxx are being or are proposed to be manufactured,
produced, displayed or stored to ascertain whether the quality standards
provided for in this Section 7 are being satisfied. Such inspection shall be
conducted in a manner that shall not unreasonably interfere with the business
operations of the Company. In the event the Company receives written notice
from the Licensor setting forth a reasonable basis and with reasonable
specificity that the Products, machines, or materials using the Xxxx do not
comply with the Guidelines (or if such Guidelines have not yet been adopted,
such Products, machines, or materials do not in the reasonable judgment of the
Licensor meet the level of quality generally associated with the Xxxx or
otherwise tarnish the goodwill or reputation associated with the Xxxx) or the
other quality standards in this Section 7, the Company shall achieve conformity
with such standards within 30 days of receipt of such notice, or, if conformity
with such standards is not reasonably achievable within such 30-day period,
then the Company shall have an additional 90 days to achieve such conformity
provided that the Company promptly commences and vigorously pursues remedial
steps during the initial 30-day period and diligently pursues remedial steps
thereafter.
8. OWNERSHIP OF XXXX. The Company acknowledges that the Licensor is
the sole and exclusive owner of the Xxxx, and the Company shall not contest the
Licensor's rights in the Xxxx or the validity of this Agreement. The Company
will cooperate with the Licensor and execute any and all documents during and
following the Term of this Agreement, reasonably requested by the Licensor and
at the Licensor's reasonable expense, in order to protect and maintain the
Licensor's exclusive rights and title to the Xxxx including, without
limitation, filing any applications, recordings of this Agreement or other
documentation regarding the Xxxx with governmental authorities having
jurisdiction over the granting and maintaining of trademark registrations. The
Company further agrees to notify the Licensor of any infringing use of the Xxxx
by others promptly after such infringing use comes to the attention of the
Company. The Licensor shall have the sole right to bring infringement or
unfair competition proceedings involving the Xxxx.
5
6
9. TERMINATION. The Licensor shall have the right to terminate this
Agreement upon 30-days' prior written notice to the Company if (a) any
Insolvency Event (as defined below) occurs, or (b) the Company breaches any of
its duties or obligations under this Agreement and such breach is not remedied
by the Company within 30 days of receipt of written notice from the Licensor
setting forth such breach, or if such breach can not be reasonably cured within
such 30-day period the Company shall have up to an additional 90 days to cure
such breach provided that the Company promptly commences and vigorously pursues
remedial steps during the initial 30-day period and diligently pursues remedial
steps thereafter. An "Insolvency Event" shall have occurred if (A) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of the
Company or any significant subsidiary (as defined in Regulation S-X under the
Securities Act of 1933) of the Company, or of a substantial part of the
property or assets of the Company or any such significant subsidiary, under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator, liquidator, administrator or similar official for
the Company or any such significant subsidiary or for a substantial part of the
property or assets of the Company or any such significant subsidiary or (iii)
the winding-up or liquidation of the Company; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered; or (B) the Company or any such
significant subsidiary shall (i) voluntarily commence any proceeding or file
any petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceedings or the filing of any petition described in (A) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator, liquidator, administrator or similar official for
the Company or any such significant subsidiary or for a substantial part of the
property or assets of the Company or any such significant subsidiary, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail generally
to pay its debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing. The Company shall have the right to terminate
this Agreement effective on the last day of any Renewal Term provided that it
has given at least 90 days' prior written notice to the Licensor; provided,
however, that no such termination by the Company shall limit the Licensor's
right to terminate this Agreement as provided above.
10. EFFECT OF TERMINATION. Upon the effective date of termination
6
7
of this Agreement, the Company shall immediately cease all use of the Xxxx or
any term confusingly similar thereto and shall cease selling any additional
inventory bearing the Xxxx and (at the option of the Company) destroy, modify
(with the consent of the Licensor) or surrender to the Licensor all signs,
letterhead, product name plates and other materials in the possession, custody
or control of the Company which use the Xxxx or any term confusingly similar
thereto so as to cease using the Xxxx or any term confusingly similar thereto;
provided, however, that upon the date of notice of termination pursuant to
Section 9, the Company shall have the right to sell inventory on hand or on
order in the ordinary course of business for an additional 90 days (subject to
the payment of Earned Royalties that exceed Minimum Royalties paid for such
time period) after receipt of such notice of termination (unless such inventory
poses a significant risk to the safety or health of consumers). The Company
acknowledges that all rights in, to and under the Xxxx and the goodwill
connected therewith shall remain the property of the Licensor.
11. THE LICENSOR'S RIGHTS. All use of the Xxxx by the Company and in
any variation thereof shall inure to the exclusive benefit of the Licensor.
All rights in the Xxxx other than those specifically retained by or granted to
the Company hereunder are reserved to the Licensor.
12. INDEMNIFICATION AND INSURANCE.
(a) The Company agrees to indemnify and hold harmless the Licensor
and each of its shareholders, officers, directors, employees and agents against
any and all liability, claims, causes of action, suits, damages and expenses
for which they or any of them may become liable or may incur or be compelled to
pay in any action or claim against them or any of them by any party, other than
the Licensor, its officers, directors, employees or agents, for or by reason of
(i) the infringement of patents, trade secret rights or rights to any
intellectual property of a third party, other than the Xxxx, as a result of the
manufacture, warehousing, marketing, promotion, publicity, advertising, sale or
distribution of the Products by the Company or any of its agents,
representatives, contractors, sublicensees or assigns, (ii) any acts, whether
of omission or commission, that may be committed or suffered by the Company or
any of its agents, representatives, contractors, sublicensees or assigns in
connection with this Agreement, (iii) any liability (including, without
limitation, any personal injury or property damage) arising out of the
manufacture, warehousing, marketing, promotion, publicity, sale, advertising,
or distribution of or the use by any consumer of, the Products, or any
violation of any warranty, representation or agreement made by the Company or
any of its agents, representatives, contractors, sublicensees or assigns with
respect to the Products, or (iv) the breach by the Company of any of its
representations, warranties or covenants in this Agreement. The Licensor shall
give
7
8
the Company written notice of any such claim promptly following its receipt
thereof. The Company shall have the opportunity to undertake and to control
the defense and settlement thereof through attorneys selected by the Company.
Notwithstanding the foregoing, the Company shall not, without the consent of
the Licensor, which consent shall not be unreasonably withheld or delayed,
settle or compromise any claim or consent to the entry of any judgment which
settlement, compromise or judgment would adversely affect the Licensor or the
value, reputation or prestige of the Xxxx. The Licensor will cooperate with
the Company in the investigation, defense and settlement of any such claim and
shall have the right to participate in (but not to control) any such defense
through counsel of its own choice, and at the Licensor's own expense. If the
Company elects not to undertake the defense of any such claim, it will be
responsible for reimbursing the Licensor for any expenses reasonably incurred
by the Licensor, including but not limited to reasonable attorneys',
accountants', and other experts' fees and expenses in the investigation,
defense and settlement of such claim and in enforcing its rights pursuant to
this Section 12(a), in addition to any damages ultimately awarded against the
Licensor.
(b) Without limiting the indemnification provided in Section 12(a)
above, the Company agrees to carry and maintain, throughout the Term of this
Agreement and for five years thereafter, with an insurance carrier authorized
to do business in the State of Illinois and having a rating of A VI or better
according to Best's Insurance Reports, a broad form Comprehensive General
Liability Insurance Policy or, if such policy is not reasonably available, such
other policy as would provide substantially the same protection to the Licensor
and the Company written on an occurrence basis covering the activities of the
Company with respect to the Products which includes but is not limited to
coverage for contractual liability, premises operations, products liability,
personal injury and advertising injury liability and broad form property damage
liability, which shall provide protection to the Licensor of at least One
Million Dollars ($1,000,000) per occurrence and Ten Million Dollars
($10,000,000) in the aggregate; provided that the Company may have a deductible
or self-insured retainage in an amount of not in excess of $500,000. The
Company shall have the Licensor named as an additional insured on such
policies. The Company shall, within thirty (30) days after the date hereof,
provide to the Licensor a certificate of such insurance from the insurance
carrier which sets forth the scope of coverage and the limits of liability
stated above and further provides that the policies may not be materially
changed or cancelled without at least thirty (30) days' prior written notice to
the Licensor. Prior to any such cancellation, the Company shall provide the
Licensor with a certificate of insurance evidencing that a new insurance policy
with the same coverage and terms described above will be in place prior to such
termination. Upon reasonable request by the Licensor during the Initial Term
and each Renewal Term, the Company shall deliver to the Licensor evidence in
form and
8
9
substance reasonably satisfactory to the Licensor, of the maintenance and
renewal of the required insurance, including without limitation, renewal
certificates and copies of those portions of policies, riders and endorsements
pertaining to this Agreement. Any insurance policy purchased by or carried by
the Licensor shall not be required to contribute in case of any loss by any
third party, including the Licensor or the Company, relating to the Products
and either the certificate of insurance to be provided hereunder or an
endorsement to such policy shall so state.
(c) The Licensor agrees to indemnify and hold harmless the Company
and each of its shareholders, officers, directors, employees and agents against
any and all liability, claims, causes of action, suits, damages and expenses
for which they or any of them may become liable or may incur or be compelled to
pay in any action or claim against them or any of them by any party, other than
the Company, its officers, directors, employees or agents, for or by reason of
(i) the infringement of the Xxxx, as a result of the manufacture, warehousing,
marketing, promotion, publicity, advertising, sale or distribution of the
Products by the Licensor or the Company or any of its agents, representatives,
contractors, sublicensees or assigns, (ii) any wrongful acts, whether of
omission or commission, that may be committed or suffered by the Licensor or
any of its agents, representatives, contractors, sublicensees or assigns in
connection with this Agreement, or (iii) the breach, in any material respect,
by the Licensor of any of its representations, warranties or covenants in this
Agreement. The Company shall give the Licensor written notice of any such
claim promptly following its receipt thereof. The Licensor shall have the
opportunity to undertake and to control the claim and settlement thereof
through attorneys selected by the Licensor after notice to and consultation
with the Company and good faith negotiations regarding alternative counsel if
the Company has reasonable objections to the Licensor's choice of counsel.
Notwithstanding the foregoing, the Licensor shall not, without the consent of
the Company, which consent shall not be unreasonably withheld or delayed,
settle or compromise any claim or consent to the entry of any judgment which
settlement, compromise or judgment would materially and adversely affect the
Company. The Company will cooperate with the Licensor in the investigation,
defense and settlement of any such claim and shall have the right to
participate in (but not to control) any such defense through counsel of its own
choice, but at the Company's own expense. If the Licensor elects not to
undertake any such claim, it will be responsible for reimbursing the Company
for any expenses reasonably incurred by the Company, including but not limited
to reasonable attorneys', accountants', and other experts' fees and expenses in
the investigation, defense and settlement of such claim and in enforcing its
rights pursuant to this Section 12, in addition to any damages ultimately
awarded against the Company. This Section 12 shall survive any termination or
expiration of this Agreement.
9
10
13. INFRINGEMENT.
(a) The Company agrees that if during the Term of this Agreement, the
Xxxx shall in the opinion of the Company or the Licensor be infringed or used
without authorization by any other person, firm, corporation or other entity,
the Licensor shall have the sole and exclusive right, but not the obligation,
to take any and all steps in its name, or in the name of the Company or in
their joint names, as the Licensor (in its sole discretion) may deem advisable,
including, without limitation, the institution of any action or proceeding to
seek damages for and/or to enjoin such infringement or unauthorized use, and to
prosecute, settle, compromise or otherwise dispose of the same. Notwith-
standing the foregoing, the Company shall have an opportunity to participate in
the decision-making process related thereto, but the final decision shall be
controlled by the Licensor. In the event of any such action or proceeding, the
Company agrees to execute any and all papers deemed necessary or advisable by
counsel for the Licensor and, at the Licensor's reasonable expense (except in
the case of an action or proceeding taken or initiated by the Company), to do
whatever else may be deemed necessary or advisable by such counsel to assist in
the prosecution of such action or proceeding. The Licensor shall be entitled
to the full recovery of any money or other property collected by way of
judgment, settlement (whether prior to or after institution of any action or
proceeding) or otherwise in connection with any such action except to the
extent of actual damages suffered by the Company.
(b) In the event that the Company is made a party defendant in any
action or proceeding for infringement based on or arising from the use during
the Term hereof of any Xxxx on or in connection with the Products, then the
Company shall promptly give written notice to the Licensor thereof and the
Licensor shall have the right to join in the defense of such action or proceed-
ing at its own cost and expense and, at its option, the Licensor may take over,
on behalf and in the name of the Company, the conduct of the defense of such
action or proceeding.
14. RIGHT OF FIRST REFUSAL. During the Term of this Agreement, the
Company shall have the right (subject to agreement on price, structure and
other material terms which shall be negotiated in good faith) to purchase from
the Licensor any on-premise comestible ice making and merchandising machine
business which the Licensor may acquire. Such negotiations shall commence
following the time that such an acquisition by the Licensor is consummated. If
the Company fails to exercise the right of first refusal set forth herein, then
the license to use the Xxxx granted herein shall not be exclusive with respect
to the business or assets in respect of which the right of first refusal has
not been exercised and nothing contained herein shall prevent the Licensor from
licensing or using the Xxxx in connection therewith. In addition,
10
11
notwithstanding the foregoing, during the term of this Agreement, the Licensor
shall not (a) purchase Reddy Ice ("Reddy"), a subsidiary of Suiza Foods, Inc.,
or acquire, directly or indirectly, more than 5.0% of the outstanding voting
securities of Reddy, or license the Xxxx or any other xxxx containing the xxxx
"Culligan" to Reddy for Products, without the Company's prior written consent,
which consent may be withheld in the sole discretion of the Company, or (b)
purchase any other business that is principally engaged in the selling of ice
or any direct or indirect controlling interest in such a business, without the
Company's prior written consent, which consent shall not be unreasonably
withheld or delayed.
15. MISCELLANEOUS.
15.1 ENTIRE AGREEMENT. This Agreement, together with the Exhibit
hereto, sets forth the entire understanding of the parties with respect to its
subject matter and merges and supersedes all prior understandings of the
parties hereto with respect to its subject matter.
15.2 AMENDMENTS; WAIVERS. This Agreement (including the Exhibit
hereto) may be amended by the parties only if set forth in an instrument in
writing signed by the parties. Either the Licensor or the Company may waive
compliance by the other party with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
waiver shall be valid only if set forth in an instrument in writing signed by
the parties. The failure of any party to this Agreement to assert any of its
rights under, or to enforce any provision of, this Agreement or otherwise shall
not constitute a waiver of its rights under such provision or any other
provision.
15.3 NO AGENCY. Nothing in this Agreement shall constitute the
parties hereto as principal and agent, partners or joint venturers for any
purpose and the Company shall have no power or authority to bind the Licensor
or to incur any obligations on the Licensor's behalf.
15.4 COMMUNICATIONS. All notices and other communications given under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand or by Federal Express or a similar overnight courier
to, (b) five days after being deposited in any United States Post Office
enclosed in a postage prepaid registered or certified envelope addressed to, or
(c) when successfully transmitted by facsimile transmission (with a confirming
copy of such communication to be sent as provided in clauses (a) or (b) above)
to, the party for whom intended, at the address or facsimile number for such
party set forth below, or to such other address or facsimile number as may be
furnished by such party by notice in the
11
12
manner provided herein; provided, however, that any notice of change of address
or facsimile number shall be effective only upon receipt.
If to the Licensor:
Culligan International Company
c/o Culligan Water Technologies, Inc.
Xxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile No. (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile No. (000) 000-0000
If to the Company:
Packaged Ice, Inc.
Attn: Chief Executive Officer
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
With a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 XxxxxxxXxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxxx, P.C.
15.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on,
enforceable against and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and nothing herein is intended to
confer any right, remedy or benefit upon any other person. The Company may
not, directly or indirectly (by merger, consolidation or otherwise), assign or
otherwise transfer any of
12
13
its rights or delegate any of its obligations under this Agreement except (i)
in connection with the sale of the Company or substantially all of the assets
of the Company, which sale shall require the express written consent of the
Licensor, which consent shall not be unreasonably withheld or delayed, or (ii)
to a wholly-owned subsidiary of the Company, in which case the consent of the
Licensor shall not be required.
15.6 COMPLIANCE WITH LAWS. The Company shall comply with all laws,
rules, regulations, and requirements of any governmental body which may be
applicable to the operations of the Company contemplated hereby, including,
without limitation, as they relate to the Products, packaging for Products,
machines dispensing Products and materials (including but not limited to adver-
tising, marketing and promotional materials) used in connection with the Xxxx
or any services in connection therewith, notwithstanding the fact that Licensor
may have approved such item or conduct. The Company shall advise Licensor
promptly upon obtaining knowledge that any Product, packaging for Product,
machine dispensing Products or materials (including but not limited to
advertising, marketing and promotional materials) used in connection with the
Xxxx or any service in connection therewith does not comply with any such law,
rule, regulation or requirement.
15.7 GOVERNING LAW; JURISDICTION; ARBITRATION. THIS AGREEMENT SHALL
IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO APPLICABLE CONFLICTS OF LAW PRINCIPLES.
EACH OF THE PARTIES HERETO EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-
EXCLUSIVE PERSONAL JURISDICTION OF THE UNITED STATES DISTRICT COURT AND TO THE
JURISDICTION OF ANY OTHER COMPETENT COURT OF THE STATE OF ILLINOIS LOCATED IN
XXXX COUNTY, IN CONNECTION WITH ALL LAWSUITS IN AID OF ARBITRATION ARISING OUT
OF THIS AGREEMENT. ALL DISPUTES, CONTROVERSIES, OR DIFFERENCES WHICH MAY ARISE
OUT OF OR IN RELATION TO OR IN CONNECTION WITH THIS AGREEMENT, OR FOR THE
BREACH THEREOF, AND WHICH CANNOT BE AMICABLY SETTLED BETWEEN THE PARTIES
HERETO, SHALL BE FINALLY SETTLED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
RULES OF THE AMERICAN ARBITRATION ASSOCIATION BY ONE ARBITRATOR SELECTED IN
ACCORDANCE WITH SAID RULES. THE SEAT OF ARBITRATION SHALL BE ST. LOUIS,
MISSOURI. THE ARBITRATOR SHALL DECIDE ALL PROCEDURAL AND SUBSTANTIVE ISSUES,
AND SHALL MAKE EVERY EFFORT TO RENDER AS SOON AS POSSIBLE A DECISION AND AWARD.
THE DECISION AND
13
14
AWARD RENDERED BY THE ARBITRATOR SHALL BE FINAL AND BINDING UPON LICENSOR AND
THE COMPANY AND JUDGMENT MAY BE ENTERED IN ACCORDANCE WITH APPLICABLE LAW IN
ANY COURT HAVING PROPER JURISDICTION.
15.8 SAVINGS CLAUSE. If any provision of this Agreement is held to
be invalid or unenforceable by any court or tribunal of competent jurisdiction,
the remainder of this Agreement shall not be affected thereby, and such
provision shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
15.9 EQUITABLE REMEDIES. The Company acknowledges that its failure
to comply with the provisions of this Agreement may cause irreparable harm and
damage to the Licensor, including, without limitation to the Licensor's name,
reputation, goodwill and trademarks, for which no adequate remedy at law would
exist and that the Licensor, therefore, would in such event be entitled to
specific performance and other forms of injunctive and equitable relief
(without having to post a bond) hereunder. Without limiting the generality of
the foregoing, the Company acknowledges and agrees that (a) its covenants and
obligations hereunder are special, unique and relate to matters of
extraordinary importance to the Licensor, that in the event that the Company
fails to perform, observe or discharge any of its obligations hereunder the
Licensor will be irreparably harmed and, therefore, that no remedy at law will
provide adequate relief to the Licensor and (b) the Licensor shall be entitled
to seek, after notice to the Company, a temporary restraining order and
temporary and permanent injunctive and other equitable relief in the case of
any failure by the Company to perform, observe or discharge any of its
covenants or obligations hereunder and without the necessity of proving actual
damages or posting a bond. The remedies provided herein shall be cumulative
and shall not preclude assertion of any other rights or the seeking of other
remedies, either legal or equitable.
15.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
15.11 CONSTRUCTION. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to the Agreement shall be deemed to include Exhibit A hereto.
As used herein, the singular includes the plural, and the masculine, feminine
and neuter gender each includes the others where the context so indicates.
14
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Culligan International Company
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President, General Counsel
and Secretary
Packaged Ice, Inc.
By:
-----------------------------------------
Name: X. X. Xxxxx, III
Title: President and Chief Operating
Officer
16
EXHIBIT A
Trademark and Logo
[to be added]
