Exhibit 10.4
TRADEMARK LICENSE AGREEMENT
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THIS AGREEMENT is made and entered into as of the 14th day of May, 1998, by
and among Derby International Corporation, S.A., a corporation (societe anonyme)
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incorporated under the laws of the Grand Duchy of Luxembourg, having its
registered office at 0 Xxxxxxxxx xx xx Xxxxx, X-0000 Xxxxxxxxxx, Grand Duchy of
Luxembourg (the "Licensor") and The Derby Cycle Corporation (dba Raleigh USA
Bicycle Company) a corporation organized and existing under the laws of
Delaware, having an office at 00000 00xx Xxxxxx Xxxxx, Xxxx, Xxxxxxxxxx 00000
(the "Company") (the Company and its Subsidiaries, as defined below, being
referred to together as the "Licensees").
WHEREAS, the Licensor is the exclusive owner of certain rights in the
trademark and trade name "Derby" (the "Trademark");
WHEREAS, the Licensor and the Company are parties to a certain
Recapitalization Agreement dated as of March 11, 1998, as amended (the
"Recapitalization Agreement"), pursuant to which the Licensor agreed to license
to the Licensees the Trademark in connection with certain undertakings of the
Licensees;
WHEREAS, the Licensees desire to make use of the Trademark owned by the
Licensor in connection with the Business (as defined below), and the Licensor is
willing to license the Trademark to the Licensees for such purposes, subject to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I: DEFINITIONS
1.1 Whenever used in this Agreement, unless otherwise clearly indicated by the
context, the terms defined below shall have the indicated meanings:
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(i) "Business" shall have the meaning set forth in the
Recapitalization Agreement, which is incorporated herein by this reference.
(ii) "Subsidiaries" shall have the meaning set forth in the
Recapitalization Agreement. The term "Subsidiary" shall also include any entity
engaged in the Business at least fifty percent (50%) of the voting equity of
which is held, directly or indirectly, by the Company during the term of this
Agreement, but only so long as the voting equity of such entity is held by the
Company.
(iii) "Term of this Agreement" shall mean the thirty (30) year period
from the date of this Agreement, which term shall be automatically extended for
successive twenty (20) year periods unless either party delivers written notice
of termination to the other party not less than one (1) year before the
expiration of the Term of this Agreement.
(iv) "Territory" shall mean worldwide.
ARTICLE II: GRANT OF RIGHTS
2.1 The Licensor hereby grants to the Licensees a paid-up, royalty-free
license to use the Trademark in connection with the business in the Territory.
Except for the license granted to the Licensees herein, the Licensor shall not
otherwise use, or cause or grant a license to any other party to use, the
Trademark in connection with the Business in the Territory; provided, however,
that the Licensor retains all rights to use, cause or permit the use of, and
license the Trademark in connection with a business other than the Business in
the Territory.
2.2 The Licensor acknowledges that the grant of rights set forth in this
Article II confirms the Licensor's existing grant of rights to the Company.
ARTICLE III: QUALITY CONTROL
3.1 The Licensees will not permit the quality of the products or services
advertised, produced, sold or provided by Business in connection with which the
Licensees use the Trademark to deteriorate so as to adversely affect the good
will associated with the Trademark.
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3.2 The Licensees shall, upon request of the Licensor, from time to time
furnish the Licensor, without charge, specifications and samples of products or
services advertised, produced, sold or provided Business materials in connection
with the Licensees are using the Trademark for quality review by the Licensor.
3.3 The Licensees shall, upon request of the Licensor, from time to time,
permit representatives of the Licensor to inspect any premises in which the
Business is conducted at all reasonable times for purposes of determining or
ascertaining compliance with Section 3.1.
ARTICLE IV: USE OF TRADEMARK
4.1 The Licensees shall use the Trademark only in connection with the
Business and in the manner and style which shall have the prior approval of the
Licensor in writing, such approval not to be reasonably withheld; provided,
however, that the manner and style in which the Trademark are used on the
effective date of this Agreement shall be deemed to have the Licensor's
approval.
4.2 If any of the Licensor or the Licensees deems it necessary to record
this Agreement with the authorities of any jurisdiction in the Territory, the
other party agrees to execute any applications or documentation necessary or
desirable, in recording party's reasonable judgement, to complete such recordal
at the recording party's expense.
4.3 Except as provided in Article II, the Licensees agree not to claim or to
assert any right of ownership in or to the Trademark or the goodwill associated
therewith and shall not initiate any regulatory or other action respecting the
Trademark which may destroy, damage or impair in any way the ownership or rights
of the Licensor in and to the Trademark. In connection with the use of the
Trademark, none of the Licensees shall in any manner represent that it has any
ownership in the Trademark or registrations thereof, and the Licensees
acknowledge that use of the Trademark shall not create in the Licensees' favor
any right, title or interest in or to the Trademark, but any and all uses of the
Trademark by the Licensees shall inure to the benefit of the Licensor. Upon
termination of this Agreement, the Licensees will
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3.2 The Licensees shall, upon request of the Licensor, from time to time
furnish the Licensor, without charge, specifications and samples of products or
services advertised, produced, sold or provided Business materials in connection
with which the Licensees are using the Trademark for quality review by the
Licensor.
3.3 The Licensees shall, upon request of the Licensor, from time to time,
permit representatives of the Licensor to inspect any premises in which the
Business is conducted at all reasonable times for purposes of determining or
ascertaining compliance with Section 3.1.
ARTICLE IV: USE OF TRADEMARK
4.1 The Licensees shall use the Trademark only in connection with the
Business and in the manner and style which shall have the prior approval of the
Licensor in writing, such approval not to be unreasonably withheld; provided,
however, that the manner and style in which the Trademark are used on the
effective date of this Agreement shall be deemed to have the Licensor's
approval.
4.2 If any of the Licensor or the Licensees deems it necessary to record
this Agreement with the authorities of any jurisdiction in the Territory, the
other party agrees to execute any applications or documentation necessary or
desirable, in recording party's reasonable judgment, to complete such recordal
at the recording party's expense.
4.3 Except as provided in Article II, the Licensees agree not to claim or
to assert any right of ownership in or to the Trademark or the goodwill
associated therewith and shall not initiate any regulatory or other action
respecting the Trademark which may destroy, damage or impair in any way the
ownership or rights of the Licensor in and to the Trademark. In connection with
the use of the Trademark, none of the Licensees shall in any manner represent
that it has any ownership in the Trademark or registrations thereof, and the
Licensees acknowledge that use of the Trademark shall not create in the
Licensees' favor any right, title or interest in or to the Trademark, but any
and all uses of the Trademark by the Licensees shall inure to the benefit of the
Licensor. Upon termination of this Agreement, the Licensees will
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cease and desist from all use of the Trademark in any way, and the Licensees
shall at no time adopt or use, without the Licensor's prior written consent, any
name or xxxx which is likely to be similar to or confusing with the Trademark.
None of the Licensees shall register anywhere in the world in its own name, or
on behalf of any other person or entity, the Trademark. None of the Licensees
shall associate the Trademark with any business other than the Business. The
Licensees shall, upon request by the Licensor with respect to the use of the
Trademark used in connection with the business in any country, do all such
lawful acts and things and execute all such documents, at the Licensor's
expense, as the Licensor shall in its reasonable discretion consider necessary
or proper to register the Trademark in the name of the Licensor in such country.
If any of the Licensees' acts or omissions which constitute a breach of this
Agreement which breach materially injures, damages or renders less valuable the
Trademark as it may be used outside of the Business or the goodwill associated
therewith owned and retained by the Licensor, the Licensees' rights to use the
Trademark in any jurisdiction in which the Trademark is affected by such act or
omission shall terminate.
ARTICLE V: INFRINGEMENT OF TRADEMARK
5.1 In the event of any of the Licensees or the Licensor learns that any
Trademark pertaining to the Business is being infringed in the Territory by any
third party, it shall promptly notify the other of such infringement. The
Licensees shall (subject to the terms contained in this Section 5.1) use all
commercially reasonable efforts to terminate any such third-party infringement,
including, without limitation, prosecuting a lawsuit or other legal proceeding,
at the Licensees' own expense; and the Licensees may retain any recovery it may
receive as a result of its actions to terminate such infringement.
Notwithstanding anything to the contrary contained herein, the Licensees may
deliver a written notice to the Licensor of the Licensees' desire not to pursue
a particular action to terminate a third-party infringement, which notice shall
constitute an acknowledgment of the Licensees that they have forfeited any
right to use the Trademark (a "Forfeited Trademark") in the affected
jurisdictions (a "Forfeited Jurisdiction") immediately upon receipt of such
notice. The Licensees shall remain responsible for any costs and expenses
required to "wind down" any action already commenced or joined by any Licensee
with respect to a Forfeited Trademark in any Forfeited Jurisdiction. The
Licensor shall fully cooperate with the Licensees in any such action taken by
the Licensees, including
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without limitation agreeing to be joined as party plaintiff and approving any
reasonable settlement agreement achieved by the Licensees, and shall be
reimbursed by the Licensees for all reasonable expenses incurred in connection
with such request by the Licensees, including legal costs and expenses.
5.2 If the Licensees fail to take any action with respect to such
third-party infringement within sixty (60) days after the Licensor's request,
the Licensor shall have the right but not the duty to act as it sees fit and in
its sole discretion to terminate the infringement, including without limitation,
prosecuting a lawsuit or other legal proceeding, at the Licensor's expense; and
the Licensor may retain any recovery it may receive as a result of its actions
to terminate such infringement. The Licensees shall fully cooperate with the
Licensor in any such action taken by the Licensor to terminate any such
infringement, including without limitation agreeing to be joined as party
plaintiff and approving any reasonable settlement agreement achieved by the
Licensor, and shall be reimbursed by the Licensor for all reasonable expenses
incurred in connection with such request by the Licensees, including legal costs
and expenses; provided, however, that the Licensees shall not be entitled to
reimbursement for any expense incurred to the extent that the Licensees derive
any benefit, economic or otherwise, from any action taken by the Licensor in
terminating such infringement.
ARTICLE VI: WARRANTIES AND INDEMNITIES
6.1 The Licensor warrants that, to its knowledge, it is the owner of the
Trademark and that the Licensees are and shall be free to use the same pursuant
to the terms and conditions of this Agreement. To the knowledge of the Licensor,
there is no unauthorized use, infringement or misappropriation of the Trademark
in connection with the Business by any third party, including without limitation
any employee or former employee of the Licensor. To the Licensor's knowledge, no
person or entity has asserted or threatened to assert any claim with respect to
the Trademark. To the Licensor's knowledge, the Licensees' use of the Trademark
in connection with the Business in accordance with this Agreement will not
infringe, misappropriate or otherwise conflict with any proprietary rights of
third parties.
6.2 The Licensor shall have no obligation to register, maintain or renew any
registrations of the Trademark. The Licensees shall have the right to register,
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maintain and renew, in Licensor's name, any registrations of the Trademark in
connection with the Business provided that (i) the Licensees shall assume all
costs relevant to the maintenance and renewal of such Trademark; (ii) Licensees
shall first consult with the Licensor as to the registration, maintenance and
renewal of the Trademark; and (iii) the Licensees shall furnish to the Licensor
promptly copies of documents relevant to any such registration, maintenance or
renewal. The Licensor agrees to cooperate with the Licensees to execute all
papers and instruments necessary to enable the Licensee to register, maintain
and renew the Trademark in connection with the Business. The Licensees shall
provide to the Licensor prompt notice as to all material matters which come to
their attention and which may affect the registration, maintenance or renewal of
any such Trademark. If the Licensees elect to no longer pay the expenses of
registration, maintenance or renewal of such Trademark in connection with the
Business, the Licensees shall notify the Licensors not less than sixty (60) days
prior to such action and shall thereby surrender their rights with respect to
such Trademark in any affected jurisdiction.
6.3 The Licensees agree to indemnify and hold the Licensor and its
officers, directors, employees, and agents harmless against any action, claims,
damages, injuries, losses, costs and expenses (including reasonable attorney's
fees and disbursements) arising from or claimed to arise from (i) the use of the
Trademark in the operation of the Business, and (ii) any material breach by the
Licensees of their obligations or warranties under this Agreement.
Notwithstanding the foregoing, the Licensees shall have no liability or
obligation hereunder unless the Licensor notifies the Licensees promptly in
writing of any such claim or suit and give the Licensees full and complete
authority, information and assistance to defend such claim or proceeding, and
further provided that the Licensor gives the Licensees sole control of the
defense of any such claim or suit and all negotiation for its compromise or
settlement.
6.4 In the event that the Licensor intends to terminate any Licensee's
right to use the Trademark, the Licensor shall deliver to the Company written
notice of such intent, with such notice including reasonable detail about the
basis for such intended termination, and provide the relevant Licensee and the
Company a sixty (60) day period in which to cure or otherwise eliminate such
basis. In the event the Licensees' right to use the Trademark is terminated with
respect to a jurisdiction, during the term of this Agreement, the Licensor shall
refrain from using the Trade-
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xxxx in that jurisdiction in connection with the Business and shall refrain from
licensing the Trademark in that jurisdiction if such use or such license would
permit the Trademark to be used, directly or indirectly, in competition with the
Business.
6.5 The provisions and obligations of this Article VI shall survive any
termination of this Agreement.
ARTICLE VII: TERM AND TERMINATION
7.1 This Agreement shall remain in full force and effect for the Term of
this Agreement, unless earlier terminated in accordance with provision 7.2 of
this Article VII.
7.2 The Licensor may terminate this Agreement (a) in accordance with
provision 1.1(iii); (b) for any reason by assigning the Trademark in question
and the goodwill associated therewith to the Licensees; (c) if the Licensees
materially breach any of the provisions of this Agreement, and such breach is
not cured within sixty (60) days after delivery of a written notice thereof by
the Licensor to the Licensees; and (d) in accordance with provision 7.3 below.
Notwithstanding the foregoing a Licensee's actions or failures to act which
directly result in the forfeit of the rights to use the Trademark in a
particular jurisdiction as set forth in: (1) the last sentence of Section 4.3:
(2) the third sentence of Section 5.1; (3) the last sentence of Section 6.2; and
(4) the first sentence of Section 6.4 (provided that such basis is cured or
eliminated in accordance with such provision); shall not constitute a "material
breach" for purposes of Section 6.3 or this Section 7.2, and the forfeit of such
rights shall be the sole remedy of the Licensor with respect to such actions or
omissions.
7.3 (a) If the Company 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 any insolvency or
bankruptcy laws, provided that if such filing is made without the acquiescence
of the party subject to such filing, such filing remains undismissed for ninety
(90) days, or (iv) be dissolved, liquidated or wound-up or otherwise cease or be
compelled to cease business, then in any such event, this Agreement shall
automatically terminate one hundred twenty (120) days after written notice is
received from the Licensor.
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(b) If any Licensee other than the Company shall (i) become
insolvent, (ii) make an assignment for the benefit of creditors, (iii) file or
become subject to an filing for reorganization, receivership or bankruptcy under
any insolvency or bankruptcy laws, provided that if such filing is made without
the acquiescence of the party subject to such filing, such filing remains
undismissed for ninety (90) days, or (iv) be dissolved, liquidated or wound-up
or otherwise cease or be compelled to cease business, then in any such event,
such Licensee and its subsidiaries shall cease to be Subsidiaries for purposes
of this Agreement.
7.4 Upon the termination of this Agreement pursuant to provision 7.2 by
reason of the Company's insolvency, the Licensees shall cease and discontinue
all use of the Trademark in the Territory, effective upon the date of such
termination, and the Licensor may take, and the Licensees shall cooperate at
their expense in taking, all necessary actions to cancel any entry of the
Licensees as registered users.
ARTICLE VIII: MISCELLANEOUS
8.1 The Licensees agree to carry out this Agreement as an independent
contractor and not as an employee, servant or agent of or joint venturer with
the 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, representation or order, 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 the expense. All
relationships entered into by any Licensee shall be for its exclusive account
and risk, and the Licensees shall have no power to bind the Licensor in any way
with respect to third parties unless previously specifically authorized in
writing.
8.2 This Agreement shall not be assignable by the Licensees, in whole or
in part, without the prior written consent of the Licensor, which consent shall
not be unreasonably withheld, provided that assignment shall not affect the
Licensees' obligations under Article VI of this Agreement.
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8.3 All communications required or permitted to be given by one party to
the other hereunder (each, a "Notice") shall be given in the manner and subject
to the provisions of Section 15.8 of the Recapitalization Agreement, which is
incorporated herein by this reference.
8.4 The failure of a party at any time to require or enforce the strict
performance by the other party of any term or condition of this Agreement shall
not constitute a surrender or waiver of that particular breach or failure, or of
any subsequent breach or failure by said other party with respect to any term or
condition of this Agreement, or the waiver by a party of a breach or default
committed by the other party with respect to any term or condition of this
Agreement, and shall not to any extent prejudice or adversely effect the other
party's rights, interest or remedies available or provided to it by law or
otherwise which it may exercise or invoke with respect to that particular breach
or failure or any subsequent breach or failure.
8.5 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.
8.6 All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York. Any legal action
or proceeding with respect to any matter arising under or in connection with
this Agreement or the subject matter hereof may be brought in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, each party hereto
hereby accepts for themselves and in respect of their property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each party hereto
hereby waives, and agrees not to assert, as a defense in any action, suit or
proceeding provided for in this Section 8.7 that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that this Agreement may not be enforced in or by said courts
or that its property is exempt or immune from execution, that the suit, action
or proceeding is
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brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or (provided that process shall be served in any manner
referred to in the following sentence) that service or process upon such party
is ineffective. Each of the parties hereto agrees that service of process in any
such action, suit or proceeding may be made upon it in any manner permitted by
the laws of the State of New York or the federal laws of the United States or as
follows; (a) by personal service or by certified or registered mail to the
party's designated agent for such service in such state, or (b) by certified or
registered mail to the party for which intended at its address set forth herein.
Service of process in any manner referred to in the preceding sentence shall be
deemed, in every respect, effective service of process upon such party.
8.7 The provisions of this Agreement, together with the provisions of the
Recapitalization 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
relating thereto, other than those contained herein. Any changes in or
amendments to the terms of this Agreement shall be in writing and signed by duly
authorized representatives of each of the parties hereto.
8.8 The parties represent to each other that each has all the requisite
power and authority to enter into this Agreement and to perform each and every
provision of this Agreement. Neither the execution nor delivery nor performance
of this Agreement will conflict with or result in a breach of the provisions
of, or constitute a default under, any other agreement under which the party is
obligated.
8.9 Each person executing this Agreement individually and personally
represents and warrants that he or she is duly authorized to execute and deliver
the same on behalf of the corporation for which he or she is signing and that
this Agreement is binding upon the corporation in accordance with its terms.
8.10 Any part or provision of this Agreement which may be held for any
reason to be illegal, invalid, unenforceable in or in conflict with the
applicable laws or regulations of any jurisdiction shall be ineffective to the
extent of such illegality, invalidity, unenforceability or conflict, and shall
be replaced with a provision that
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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.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the date first above
written.
DERBY INTERNATIONAL THE DERBY CYCLE
CORPORATION S.A. CORPORATION
By: By:
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Title: Title:
