MASTER TRADEMARK LICENSE AGREEMENT BETWEEN SIGNAL INVESTMENT & MANAGEMENT COMPANY AND SUNDEX, INC.
EXHIBIT 10.3
SIGNAL INVESTMENT &
MANAGEMENT COMPANY
AND SUNDEX,
INC.
This
Master Trademark License Agreement is made and entered into by and between
Signal Investment & Management Co., a Delaware corporation ("Signal"),
having its principal place of business at Suite 1300, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, and SunDex, Inc., a Tennessee corporation
("SunDex"), having its principal place of business located at 0000 X. 00xx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, effective as of March 22,
2002.
WHEREAS,
Signal and Chattem are parties to that certain Trademark License Agreement
effective as of June 30, 1992, as amended and restated pursuant to which Signal
licenses to Chattem certain trademark rights; and
WHEREAS,
pursuant to a Contribution Agreement of even date herewith (the "Contribution
Agreement"), Chattem has agreed to transfer certain assets related to the
Business to SunDex as of the effective date of this Agreement;
WHEREAS,
Signal and SunDex wish to set forth a framework in this Agreement for licensing
of Signal’s marks associated with the Products to SunDex and under which the
licensing and sublicensing of all future trademark rights from Signal to SunDex
will be controlled, such licensing to take effect immediately upon the date of
Signal's future adoption, acquisition or licensing of such trademark rights in
connection with the Business;
WHEREAS,
capitalized terms used in this Agreement and not defined herein shall have the
respective meanings assigned to them in the Contribution Agreement.
NOW,
THEREFORE, in consideration of the premises and covenants herein, and in further
consideration of the mutual benefits to the parties, the parties hereby covenant
and agree as follows:
1.1 Definitions. As
used in this Agreement, the following terms shall have the following
meanings:
"Agreement":
this Master Trademark License Agreement, as amended, supplemented or otherwise
modified from time to time.
"Default":
any of the events specified in Section 3.1, provided any requirement for the
giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Effective
Date": shall mean March 22, 2002.
"FDA
Requirements": shall mean any requirements of the Federal Food, Drug and
Cosmetic Act, as amended, and any rules or regulations promulgated thereunder
which are or may be applicable to the manufacture, sale, labeling or
distribution of the Products.
"Governmental
Authority": any nation or government, any state or political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Licensed
Assets": shall mean the Trademarks, the Trade Dress and the Product
Standards.
"Licensee": SunDex,
Inc., a Tennessee corporation.
"Licensor": Signal
Investment & Management Co., a Delaware corporation.
"Net
Sales": shall mean sales of the Products at the invoiced price after
deduction of (a) all trade and promotional discounts and allowances; (b)
allowance for credits for returns; and (c) sales taxes and/or freight charges,
if any, included in the invoice.
"Person": An
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or entity of whatever nature.
"Products": shall
mean all products sold in any jurisdiction under any of the
Trademarks.
"Product
Standards": shall mean the formulas, specifications and manufacturing
procedures provided to the Licensee by the Licensor as the same shall
hereinafter be amended from time to time with the consent and approval of the
Licensor.
"Subsidiary": as
to any Person, a corporation, partnership or other entity of which shares of
stock or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership, limited liability company or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Licensee other than the undersigned.
"Termination
Date": shall mean the date on which this Agreement shall terminate
pursuant to Section 2.2 hereof.
"Trademarks": shall
mean and collectively include all trademarks, trademark registrations,
applications for trademark registration, and good will associated with all
trademarks presently owned, licensed or hereafter adopted, acquired or licensed
by Licensor for
2
use in
connection with nutraceutical, supplement and weight control products,
including, but not limited to all trademarks identified on Schedule 1 hereto as
the same may hereinafter be amended from time to time.
"Trade
Dress": shall mean the existing trade dress of the Products as the same may
hereinafter be modified from time to time with the consent and approval of the
Licensor.
1.2 Other Definitional
Provisions.
(a) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in any other document and/or certificate delivered
pursuant hereto.
(b) The
words "whereof", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole, not to any
particular provision of this Agreement, and Section, Subsection and Schedule
references are to this Agreement unless otherwise specified.
(c) The
meanings given to the terms defined herein shall be equally applicable to both
the singular and plural forms of such terms.
2.1 Grant of
License. Subject to the terms and conditions herein set forth,
Licensor hereby grants to Licensee the exclusive right and license in each
jurisdiction where a Trademark is registered, with the right to grant
sublicenses to other Subsidiaries:
(a) To
produce, have produced, process or otherwise manufacture, and to use, sell and
distribute the Products in accordance with the Product Standards;
(b) To
use any one or more of the Trademarks, alone or in conjunction with any other
trademarks or trade names of Licensee of any of its Subsidiaries, on any
Products which are sold by Licensee or by any of its sublicensed Subsidiaries
under the provisions of this Agreement;
(c) To
the extent permitted pursuant to the provisions of Section 6.1 hereof, to bring
and prosecute a suit or suits against any party (i) to preclude the unauthorized
use of any of the Trademarks or any confusingly similar trademarks, and (ii) to
preclude the unauthorized disclosure or use of any of the Product
Standards.
(d) To
the extent permitted pursuant to provisions of Section 6.1 hereof, to defend and
settle, at Licensee's expense, infringement suits brought by others based upon
the use or prospective use by Licensee and/or its affiliates of any of the
Trademarks.
(e) To
grant sublicenses to its Subsidiaries, provided such sublicenses are expressly
made subject to all the terms and conditions of this Agreement, and, if
applicable, the terms and conditions of any license to Licensor.
3
2.2 Term. This
Agreement shall commence on the effective date unless sooner terminated pursuant
to Section 3.1 hereof, and shall continue thereafter for a period of five (5)
years through and including March 22, 2007 (the "Initial Term") and for
successive renewal terms of five (5) years each (individually or collectively, a
"Renewal Term") unless the Licensor or Licensee shall give written notice of
cancellation pursuant to the notice provisions of Section 11.1(f) hereof to the
other party at least ninety (90) days prior to the end Initial Term or the
Renewal Term then ending, as the case may be.
3.1 Defaults. This
Agreement may be terminated by the Licensor at any time upon the occurrence of
one or more of the following Defaults:
(a) Licensee
or any of its sublicensed Subsidiaries shall materially breach any of the terms,
conditions or agreements contained in this Agreement which are required to be
kept, observed or performed by Licensee or its Subsidiaries if such Licensee or
Subsidiary fails to cure such breach within thirty (30) days of written notice
thereof giving reasonably full particulars.
(b) Licensee
or any of its sublicensed Subsidiaries shall become insolvent or shall suspend
business, or shall file a voluntary petition or an answer admitting the
jurisdiction of the Court and the material allegations of, or shall consent to,
an involuntary petition pursuant to or purporting to be pursuant to any
bankruptcy, reorganization or insolvency law of any jurisdiction.
4.1 Royalty. Licensee
and its sublicensed Subsidiaries shall pay to Licensor a five percent (5%)
royalty on Net Sales of all Products sold under the Trademarks (the
"Royalty"). The Royalty shall be payable quarterly within forty-five
(45) days of the end of each of the Licensee's fiscal quarters.
4.2 Sales by
Subsidiaries. In the event that Licensee grants a sublicense
to any Subsidiary, Licensee agrees to pay the five percent (5%) royalty due
under Section 4.1 on all Net Sales of Products by such Subsidiary.
4.3 When Sales
Made. For purposes of this Agreement, Products sold by
Licensee or by any sublicensed Subsidiary shall be considered sold when
invoiced, or if not invoiced, when delivered, shipped or mailed, or when paid
for, if paid for before delivery. No royalty shall be due and payable
hereunder in connection with any inter-company sale between the Licensee and any
sublicensed Subsidiary. Royalties paid on Products not accepted by
the customer and/or returned to Licensee or its Subsidiary shall be credited
against and deducted from future royalties, provided, however, that if such
returned Products are subsequently resold by Licensee or its Subsidiary,
Royalties shall then be paid thereon.
4.4 Payments. Unless
otherwise mutually agreed in writing, on or before the forty-fifth (45th) day
following the end of each of Licensee's fiscal quarters, Licensee will pay to
Licensor the Royalty applicable to sales during such quarter. All
Royalty payments hereunder shall be made in United States currency.
4
5.1 Records. Licensee,
on behalf of itself and its sublicensed Subsidiaries, agrees to keep adequate
and complete records showing all sales of Products sold under the
Trademarks. Such records shall include all information necessary to
verify the total amount of Net Sales and the royalties due hereunder and
Licensee shall make such records available to Licensor at its offices in
Wilmington, Delaware upon reasonable notice during reasonable business hours to
the extent necessary to verify the amount thereof.
5.2 Reports. Within
forty-five (45) days of the last day of the Licensee's fiscal quarters, Licensee
shall furnish to Licensor a written report, signed by an authorized
representative of the Licensee, showing (a) the total Net Sales of all Products
during such fiscal quarter; and (b) the total amount of royalties due the
Licensor hereunder.
6.1 Infringement.
(a) If
Licensee discovers third-parties infringing any enforceable rights contained in
the Licensed Assets, Licensee shall notify Licensor promptly
thereof. In the event that Licensee, at its discretion elects to
initiate and prosecute any such suit or suits pursuant to the rights granted to
Licensee in accordance with the provisions of Section 2.1(c) hereof, then (i)
all expenses incurred in such legal action shall be borne by Licensee and all
damages and costs that may be recovered or may be assessed as a result of such
suit or suits shall inure to Licensee; and (ii) Licensee shall have the right to
join Licensor as a nominal party plaintiff in any such suit or suits, and the
Licensor agrees to sign all papers and perform all acts which Licensee may
reasonable request to enable Licensee to enforce such rights.
(b) In
the event Licensee notifies Licensor that it will not initiate and/or, if
initiated, will not prosecute such suit or suits against third-party infringers,
then Licensor shall have the right to initiate and/or prosecute such suit or
suits to protect the Licensor's interest in the Licensed
Assets. Whenever Licensor exercises its rights under this Section
6.1(b), then all expenses incurred in such legal action shall be borne by
Licensor and all damages and costs that may be recovered or may be assessed as a
result of such suit or suits shall inure to the Licensor.
(c) Whenever
Licensor or Licensee discovers that a third-party has filed an application for
trademark registration in any country and/or has been granted a trademark
registration for any trademark which is confusingly similar to any of the
Trademarks, then Licensor and Licensee shall promptly exchange information
concerning such application and/or registration and either Licensor
or Licensee may, at its sole discretion and at its own expense, bring and
prosecute an appropriate proceeding under the trademark laws in the jurisdiction
in question to oppose such application and/or to cancel such
registration. Licensee shall have the right to join Licensor as an
opposer or petitioner in any such opposition and/or cancellation proceedings,
and Licensor agrees to sign all papers and perform all acts which Licensee may
reasonably request to enable Licensee to oppose such application and/or to
cancel such registration.
(d) In
the event that any third-party claims that one or more of the Trademarks or
other Licensed Assets infringe any trademark or other right of such party,
Licensee shall have the right, at its option, to contest and defend such
claim. If Licensee declines to contest or
5
defend
such claim, Licensor shall then have the right, at its option, to defend and
contest such claim. In the event that Licensee exercises it rights to
contest and defend any claim of infringement brought by a third-party in
connection with any of the Licensed Assets, Licensee agrees that it will not
settle or compromise such claim without the prior approval and consent of the
Licensor whose approval shall not be unreasonably withheld.
7.1 Maintenance of Product
Quality. Licensee hereby agrees that all Products sold in
connection with the Trademarks shall fully comply with (i) all FDA Requirements
(ii) all other legal requirements imposed by any other Governmental Authority,
and (iii) the applicable Product Standards. Licensee further agrees
to furnish to Licensor at its offices in Wilmington, Delaware with such samples
of its and any sublicensed Subsidiary's Products sold under the Trademarks, as
may be reasonably required by Licensor for examination and testing, to verify
compliance by Licensee and its sublicensed Subsidiary with the Product
Standards. Licensee further agrees on behalf of itself and its
affiliates to fully cooperate with Licensor and meet all Licensor's reasonable
requests intended to facilitate Licensee's compliance with its obligations under
this Section. The Product Standards may be changed only with the
consent and approval of the Licensor. As between Licensor and
Licensee, Licensee shall be fully responsible for and shall indemnify and hold
Licensor harmless against any and all products liability or negligence
claims.
8.1 Maintenance and Renewal of
Trademark Registrations. Until the Termination Date, Licensee
agrees to maintain and/or renew, as agent for Licensor, the federal
registrations and applications for all of the Trademarks by duly filing at the
United States Patent and Trademark Office in Washington, D.C. all papers,
responses, fees, applications for renewal, affidavits of use (and/or
incontestability, if appropriate) and all other necessary papers required for
such purpose by the Trademark Laws of the United States. Licensor
agrees to execute all applications for renewal and other documents, and to
perform all other acts, which Licensee may reasonably request in order to enable
Licensee to maintain and renew such registrations as agent for
Licensor. All costs incurred by Licensor in connection with such
maintenance and renewal shall be borne by Licensee.
8.2 Continued
Use. Until the Termination Date, unless otherwise agreed by
Licensor, Licensee agrees to continue to use each of the Trademarks in
accordance with applicable trademark laws and the license granted under the
provisions of this Agreement.
8.3 Confidentiality. Licensee
agrees to maintain the Product Standards as confidential and is to refrain from
disclosing such information to any third parties except as necessary in
accordance with its reasonable business judgment.
9.1 Licensor's
Representations. Licensor hereby represents and warrants to
Licensee as follows:
(a) Licensor
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.
6
(b) Licensor
has all necessary corporate power to enter into and perform its obligations
under this Agreement and, as of the effective date of this Agreement, will have
taken all necessary corporate action to authorize the execution and consummation
of this Agreement.
(c) Licensor
is not in default with respect to any term or provision of any charter, bylaw,
mortgage, indenture, statute, rule or regulation applicable to it, or with
respect to any order, writ, injunction, decree, rule or regulation of any court
or administrative agency, which would preclude the performance of its
obligations under this Agreement.
(d) Neither
the execution nor the delivery of this Agreement, nor the consummation of the
transactions herein contemplated, nor the fulfillment of or compliance with the
terms and provisions hereof will (i) violate any provision of law,
administrative regulations or court decree applicable to Licensor; or (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of or constitute a default under the charter or bylaws of Licensee,
or of any agreement or instrument to which Licensee is a party or by which it is
bound.
(e) Licensor
has good and marketable title and rights to the Licensed Assets and/or an
appropriate license for the Licensed Assets subject only to such liens as may
exist from time to time under an applicable credit or security agreement to
Licensor and/or Licensee. Licensor has no knowledge of any
third-party rights which would be infringed by the use of the Licensed
Assets.
9.2 Licensee's
Representations. Licensee hereby represents and warrants to
Licensor as follows:
(a) Licensee
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee.
(b) Licensor
has all necessary corporate power to enter into and perform its obligations
under this Agreement and, as of the effective date of this Agreement, will have
taken all necessary corporate action to authorize the execution and consummation
of this Agreement.
(c) Licensor
is not in default with respect to any term or provision of any charter, bylaw,
mortgage, indenture, statute, rule or regulation applicable to it, or with
respect to any order, writ, injunction, decree, rule or regulation of any court
or administrative agency, which would preclude the performance of its
obligations under this Agreement.
10.1 Sublicenses. All
sublicenses extended by Licensee to any Subsidiary regarding any of the Licensed
Assets shall be made expressly subject to the terms and conditions of this
Agreement, including but not limited to an express undertaking by such affiliate
to comply with all Product Standards. Prior to granting any such
sublicense, Licensee will provide a copy of the Product Standards to such
Subsidiary. No sublicensed Subsidiary shall have the right to grant a
further sublicense without the express written approval of the
Licensor.
11.1 Miscellaneous
Provisions. The following miscellaneous provisions shall apply
to this Agreement:
7
(a) Superseding
Effect. This Agreement supersedes and replaces all prior
licensing agreements between the Licensor and the Licensee with respect to the
Trademarks and Products.
(b) Non-Waiver. No
delay or omission by either party in exercising any right under this Agreement
shall operate as a waiver of that or any other right. A waiver or
consent given by a party on one occasion is effective only in that instance and
will not be construed as a bar or a waiver of any right on any other
occasion.
(c) Non-Assignment of
Trademarks. Nothing in this Agreement shall be deemed to
constitute an assignment by Licensor of the Trademarks or any right therein or
thereto, or give Licensee or any Subsidiary or affiliate of Licensee any
interest therein, except as herein provided.
(d) Binding
Effect. All terms and conditions of this Agreement shall bind
and inure to the benefit and burden of the parties hereto with respect to
successors and assigns.
(e) Governing
Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware, without giving effect to any
conflict of law provisions thereof.
(f) Notices. Any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or
delivered (i) three (3) days after depositing in the United States
mail with postage prepaid, (ii) when sent after receipt of confirmation if sent
by telecopy or by other similar facsimile transmission, (iii) one (1) business
day after deposit with a reputable overnight courier with all charges prepaid,
or (iv) when delivered, if hand delivered by messenger, all of which shall be
properly addressed to the parties to be notified and sent to the address or
number indicated as follows:
(i)
If to Licensor at:
Signal Investment & Management
Company
Xxxxx 0000
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
00000
Attention: President
Telecopy: (000)
000-0000
Confirmation: (000)
000-0000
8
(ii) If
to Licensee at:
SunDex, Inc.
X.X. Xxx 0000
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention: President
Telecopy: (000)
000-0000
Confirmation: (000)
000-0000
or to
such other address or number as each party designates to the other in the manner
herein prescribed.
(g) Entire
Understanding. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof. No modifications, extensions or waivers of any of the
provisions hereof or any release or any right there under shall be valid unless
the same is in writing signed by the party to be bound thereby.
(h) Sales of
Trademarks. Licensor reserves the right to sell one or more of
the Trademarks identified on Schedule 1 hereto on reasonable notice to the
Licensee and, upon such sale, Licensee's licensed rights to such Trademark shall
cease and terminate.
(i)
Licensing
of Trademarks to Third Parties. Upon the prior consent of
Licensee, Licensor may license one or more of the Trademarks identified on
Schedule 1 hereto to a third party and, upon such licensing, Licensee's licensed
rights to such Trademark shall cease and terminate.
(j)
Consent to
Collateral Assignment. The parties hereby acknowledge that
Licensee has assigned or may assign its right, title and interest under this
Agreement as security for financing provided to Licensee by one or more
lenders. Notwithstanding any other provisions contained in this
Agreement, the Licensor consents to the collateral assignment of this Agreement
to such lenders or their agents, for the benefit of the
lenders. Unless and until such lenders give notice to the undersigned
of their intention to succeed to the rights of Licensee under the Agreement, the
lenders shall not be obligated to perform any of the obligations of Licensee
under the Agreement.
(k) Headings. The
headings of this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction and interpretation of this
Agreement.
9
IN
WITNESS WHEREOF, Licensor and Licensee have caused this Agreement to be signed
in Wilmington, Delaware, effective as of the Effective Date.
SIGNAL INVESTMENT
& MANAGEMENT CO.
By:_________________________________
A. Xxxxxxxxx Xxxxxx XX,
President
SUNDEX, INC.
By:_________________________________
A. Xxxxxxxxx Xxxxxx XX,
President
10
