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EXHIBIT 10.3
TRADEMARK LICENSE AGREEMENT
This agreement ("Agreement") is made and entered into as of
the ____ day of _____ 1998, by and between Pennzoil Products Company, a
Delaware corporation ("Licensor"), and Pennzoil Company, a Delaware corporation
("Licensee").
WHEREAS, Licensor has rights in and to the xxxx PENNZOIL, and
certain design variations thereof, the use of which it wishes to license to
Licensee under the terms and conditions of this Agreement; and
WHEREAS, Licensee wishes to obtain such a license pursuant to
such terms and conditions.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the terms defined below shall
have the indicated meanings:
1.1 "Affiliate" shall have the meaning set forth in the
Distribution Agreement between Licensor and Licensee dated April 14, 1998
("Distribution Agreement").
1.2 "Effective Date" of this Agreement shall mean the
date first written above.
1.3 "Services" shall mean the activities related to oil
and gas exploration, exploitation, development, production, and energy related
transportation, it being understood that such activities shall not include the
development, manufacture, production, exploitation, distribution, marketing or
sale of automotive consumer products or any other activity included within the
Downstream Business (as defined in the Distribution Agreement).
1.4 "Term" shall have the meaning set forth in Section
7.1 below.
1.5 "Territory" shall mean the world.
1.6 "Trademark" shall mean the trademarks PENNZOIL (words
only), PENNZOIL (xxxx design) as depicted in U.S. Serial No. 75/321,680
(without the oval), PENNZOIL (xxxx and oval design) as depicted in U.S. Serial
No. 75/321,680, and PENNZENERGY (words only).
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ARTICLE II
GRANT OF RIGHTS
2.1 For good and adequate consideration, the receipt and
sufficiency of which are hereby acknowledged, as of the Effective Date,
Licensor grants to Licensee and its Affiliates an exclusive, paid up, royalty
free license to use the Trademark in connection with the Services in the
Territory, with the right, subject to Licensor's consent which shall not be
unreasonably withheld, to grant sublicenses. Licensor agrees that it will not
use, and will not license any third party during the Term to use, the Trademark
in connection with the Services. Except as provided in the preceding sentence,
Licensor hereby retains the right to use and license third parties to use the
Trademark in any manner anywhere in the Territory.
ARTICLE III
QUALITY CONTROL
3.1 Licensee agrees to use the Trademark in the Territory
only in accordance with such quality standards and specifications as may be
established by Licensor and communicated to Licensee from time to time, it
being understood that Licensor has evaluated Licensee's Services and determined
that as of the date hereof they are of a quality that justifies this grant of a
license. Licensee recognizes the substantial goodwill associated with the
Trademark and will not permit the quality of the Services with which Licensee
uses the Trademark to deteriorate so as to adversely affect the goodwill
associated with the Trademark.
3.2 Licensor may inspect Licensee's premises upon
reasonable notice to ensure compliance with the foregoing requirement.
ARTICLE IV
USE OF TRADEMARK
4.1 All ownership of the Trademark, including without
limitation any and all registrations thereof in any and every country or
jurisdiction, shall at all times belong to Licensor and all use of the
Trademark by Licensee will inure to the benefit of Licensor.
4.2 Licensee shall use the Trademark only in connection
with the Services, in the manner and style which shall have the prior approval
of Licensor in writing, such approval not to be unreasonably withheld, and in
connection with such legends, markings and notices as Licensor may require;
provided, however, that the manner and style in which the Trademark is used on
the Effective Date shall be deemed to have Licensor's approval. With respect
to any written approval
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requested of Licensor under this paragraph, failure of Licensor to respond to a
written request for approval within 45 business days of the request shall be
deemed to constitute approval.
4.3 Licensee shall cooperate in the execution of any
documents, and the taking of other actions that Licensor reasonably requests to
create, record or perfect Licensor's sole and exclusive ownership of the
Trademark, including without limitation execution and filing of appropriate
documents to qualify Licensee as a Registered User in any jurisdictions in
which such qualification is necessary or desirable and taking actions necessary
to apply for or obtain, defend, or protect trademark rights and registrations.
Licensor shall reimburse Licensee's reasonable out-of- pocket expenses in
taking actions requested by Licensor under this section.
4.4 Licensee agrees not to claim or to assert any right
of ownership in or to the Trademark and shall not initiate any regulatory or
other action that could destroy, damage, or impair in any way the ownership or
rights of Licensor in and to the Trademark. Licensee shall not register the
Trademark anywhere in the Territory in its own name, or on behalf of any other
person or entity, and shall not associate the Trademark with any article or
service other than the Services and shall, at the request and expense of
Licensor (with respect to reasonable out-of-pocket costs of Licensee), do all
such lawful acts and things and execute all such documents as Licensor shall,
in its reasonable discretion, consider necessary or proper to register the
Trademark in any country. Should usage of the Trademark in any country vest
title thereto in Licensee, then Licensee shall at Licensor's expense (with
respect to reasonable out-of-pocket costs of Licensee) immediately assign and
transfer such title to Licensor for no additional consideration.
ARTICLE V
INFRINGEMENT OF TRADEMARK
5.1 In the event that Licensee learns that the Trademark
is being misused or infringed or possibly infringed in the Territory by any
third party, it shall promptly notify Licensor of such infringement. Licensor
shall decide in its sole and exclusive discretion what action to take or not to
take in response, and Licensee shall take no action in response to any such
misuse or infringement unless instructed in writing to do so by Licensor.
Licensor shall have the right to act to terminate any such third-party
infringement, including, without limitation, prosecuting a lawsuit or other
legal proceeding at its own expense and Licensor may retain any recovery it may
receive as a result of its actions to terminate such infringement. Licensee
shall fully cooperate with Licensor in any such action taken by Licensor
including without limitation agreeing to be joined as party plaintiff and
approving any reasonable settlement agreement achieved by Licensor and shall be
reimbursed by Licensor for all reasonable out-of-pocket expenses incurred in
connection therewith.
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ARTICLE VI
WARRANTIES AND INDEMNITIES
6.1 Nothing contained in this Agreement shall be
construed as (a) a warranty or representation by Licensor as to the validity or
scope of the Trademark; (b) a warranty or representation that any good or
service using the Trademark will not infringe any trademark of any third party;
or (c) an agreement to defend the Licensee against actions or suits of any
nature brought by any third parties regarding the Trademark. Licensee
acknowledges that, based upon its information and belief, it is familiar with
the Trademark and the history and background thereof.
6.2 Licensee agrees that during the term of this
Agreement, Licensee shall be responsible for complying with and assuring
compliance with all laws and regulations applicable to its or its Licensees' or
designees' performance of the Services.
6.3 Licensee agrees to indemnify and hold Licensor and
its Affiliates harmless against any action, claims, damages, injuries, losses,
costs and expenses, including reasonable attorneys' fees and disbursements,
arising from or claimed to arise from (i) the Services and (ii) any material
breach by Licensee of its obligations or warranties under this Agreement.
6.4 The provisions and obligations of this Article VI
shall survive expiration or any termination of this Agreement.
ARTICLE VII
TERM AND TERMINATION
7.1 This Agreement shall become effective upon the
Effective Date and shall remain in full force and effect for a term of three
(3) years, unless earlier terminated in accordance with provision 7.2, 7.3, or
7.4 of this Article VII (the period from the Effective Date until termination,
the "Term").
7.2 This Agreement may be sooner terminated by Licensor
if Licensee materially breaches provisions 3.1 or 3.2 of Article III, or
Section 4.2 of Article IV, and such breach is not cured within 60 days after
delivery of a written notice thereof by Licensor to Licensee.
7.3 This Agreement may be sooner terminated by Licensor
if there has been a "Change of Control" of Licensee. For purposes of this
Agreement, "Change of Control" shall mean a change in control of the Licensee
after the date hereof in any one of the following circumstances (1) there shall
have occurred an event required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Licensee is then subject to such reporting
requirement; (2) any "person" (as such term is used in Section 13(d)
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and 14(d) of the Act) shall have become the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Licensee representing 30% or more of the combined voting power of the
Licensee's then outstanding voting securities without prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (3) the Licensee is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; (4) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Licensee's stockholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute
at least a majority of the Board of Directors.
7.4 If either party shall (i) become insolvent, (ii) make
an assignment for the benefit of creditors, (iii) file or become subject to a
filing for reorganization, receivership or bankruptcy under the insolvency or
bankruptcy laws of the U.S., provided that such filing is made without the
acquiescence of the party subject to such filing, and such filing remains
undismissed for 60 days, or (iv) be dissolved, liquidated, wound up or
otherwise cease or be compelled to cease business, then in any such event, this
Agreement shall automatically terminate.
7.5 Immediately upon the end of the Term, Licensee shall
cease and discontinue, effective upon the date of such termination, all use of
the Trademark in the Territory (including, without limitation, any use of the
Trademark as a company name) and Licensor may take (or require Licensee to
take) all commercially reasonable actions needed to evidence such
discontinuance of use, including without limitation filing any termination
statement with respect to d.b.a. elections filed by Licensee or its Affiliates.
Within 90 days of the end of the Term, Licensor shall receive a letter from
Licensee certifying that all materials of Licensee (or its Affiliates) bearing
the Trademark have been destroyed. All costs relating to the filing or
recordation of documents evidencing the termination of Licensee's permitted use
will be borne by Licensee. Licensee will take all action necessary (at
Licensee's expense) to authorize, no later than the shareholders' meeting
immediately preceding the anticipated end of the Term, an amendment to the
Certificate of Incorporation of Licensee to remove the Trademark.
ARTICLE VIII
MISCELLANEOUS
8.1 Licensee agrees to carry out this Agreement as an
independent contractor and not as an employee, servant, or agent of or joint
venturer with Licensor. Except as specifically provided herein, neither party
shall have authority to bind or otherwise render the other party liable in any
way, whether by agreement, contract, or representation, written or oral, or by
instrument or action of any kind. Unless otherwise specifically provided for
herein, the obligations undertaken by each party hereto and set forth in this
Agreement shall be at the expense of the party which incurred
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the expense. All relationships entered into by Licensee shall be for its
exclusive account and risk and Licensee shall have no power to bind Licensor in
any way with respect to third parties unless previously authorized in writing.
8.2 This Agreement shall not be assignable by Licensee
without the prior written consent of Licensor, such consent not to be
unreasonably withheld. This Agreement shall be assignable by Licensor. In
connection with any such assignments, prior written notice shall be given by
the assigning party to the other party and shall not affect either party's
obligations under this Agreement.
8.3 All communications required or permitted to be given
by one party to the other hereunder (collectively, "notice") shall be given in
the manner and subject to the provisions of Section 8.05 of the Distribution
Agreement, which is incorporated herein by this reference.
8.4 Any part or provision of this Agreement which may be
held for any reason to be illegal, invalid, unenforceable, or in conflict with
the applicable laws or regulations of any jurisdiction shall be ineffective to
the extent of such illegality and validity and enforceability or conflict, and
shall be replaced with a part or provision that accomplishes, to the extent
possible, the original purpose of such part or provision in a valid and
enforceable manner without affecting, impairing, or invalidating the remaining
provisions in any other jurisdiction, which provisions shall remain binding
upon the parties hereto and in full force and effect.
8.5 Each party acknowledges that a breach of its
obligations under this Agreement would cause the other party irreparable and
significant harm and that, in addition to any other remedies available to it,
such party may obtain immediate injunctive relief.
8.6 No right or remedy given to a party under this
Agreement or by applicable law is intended to be exclusive of or constitute a
waiver of any other right or remedy. Each right or remedy may be pursued
singly, concurrently, successively or otherwise at the sole discretion of
either party.
8.7 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without reference to the choice
of law principles thereof.
8.8 The provisions of this Agreement, together with the
provisions of the Transaction Agreements (as defined in the Distribution
Agreement) to the extent relevant to the Trademark, and in addition to the
extent incorporated herein by reference, represent the entire understanding and
agreement between the parties with respect to the subject matter hereof, and
supersede all previous agreements, statements, representations, promises,
warranties, covenants, undertakings, or writing related thereto, other than
those contained herein. Any changes in or amendments to this Agreement shall
be in writing and signed by duly authorized representatives of each of the
parties hereto.
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IN WITNESS WHEREOF, the parties have through their duly
authorized representatives placed their respective names as of the date first
written above.
PENNZOIL COMPANY PENNZOIL PRODUCTS COMPANY
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By: By:
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Title: Title:
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Date: Date:
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