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EXHIBIT 10.28
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT ("Agreement"), dated as of March __,
2004, is made by and between Vermont Pure Holdings Limited, a Delaware
corporation with a place of business at 00 Xxxx Xxx Xxx Xxxx, Xxxx Xxxxxxxx, XX
00000 ("Licensor") and MicroPack Corporation, a Delaware corporation with a
place of business at 0 Xxxxxxxxxxxx Xxxx, Xxxxx 0X, Xxxxxx, XX 00000
("Licensee").
RECITALS
A. Licensor holds the right, title and interest in and to certain trademarks
and logos in the United States of America, its territories and
possessions.
B. Licensor desires to grant to Licensee, and Licensee wishes to obtain from
Licensor, the right, privilege and license to use such trademarks and
logos in connection with the manufacturing, importation, advertising,
promotion, sale and distribution of certain goods, subject to the terms
and conditions herein set forth.
NOW THEREFORE, in consideration of the premises, the mutual promises set
forth below and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensor and Licensee hereby agree
as follows:
1. Definitions.
The following definitions shall be applicable throughout this Agreement:
1.1 "AFFILIATE" shall mean any individual, corporation, limited
liability company or other entity that is controlled by, that
controls, or that is under common control with a party. "Control" or
any form of the word means ownership of at least a fifty-one percent
(51%) interest.
1.2 "GOODS" shall mean water in PET bottles of one gallon or less in
size. The water may be gaseous, still, unflavored or flavored,
provided that any flavored water may only be flavored to the extent
that a reasonable consumer would describe the product as "flavored
spring/mineral water", and not soda.
1.3 "GROSS SALES" shall mean gross amounts invoiced in respect of Goods,
less any discounts, commissions, credits for rejections and returns,
taxes, and delivery charges.
1.4 "LICENSED MARKS" shall mean the trademark and logo VERMONT PURE as
used by Licensor on the date hereof, including without limitation
the registered trademarks listed on Exhibit A hereto.
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1.5 "PRINCIPAL TRANSACTION" means Licensee's purchase of Licensor's PET
bottling business pursuant to an Asset Purchase and Sale Agreement
to be executed by the parties.
1.6 "TERRITORY" shall mean the United States of America, its territories
and possessions.
2. Grant of License; Covenant Not to Xxx.
2.1 Trademark License: Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee the royalty-free
right, license and privilege to use the Licensed Marks in connection
with Licensee's manufacture, advertising, marketing, promotion, use,
sale and distribution within the Territory of Goods. Such right,
license and privilege shall be exclusive in the Territory with
respect to Goods. The licensed rights include any U.S. federal and
state registrations of the Licensed Marks owned by the Licensor
during the term of this Agreement.
2.2 Sub-Licensees: Licensee may grant sub-licenses of the foregoing
right, license and privilege to authorized distributors of Goods
manufactured by or for Licensee ("Distributors"), provided that such
Distributors have agreed in writing to terms no less restrictive
than those imposed on Licensee in this Agreement. In addition,
Licensee may also permit its manufacturers to use the Licensed Marks
solely for purposes of packaging and labeling the Goods as requested
by Licensee.
2.3 Covenant Not to Xxx: Subject to the terms and conditions of this
Agreement, Licensor hereby covenants not to xxx Licensee for
infringement of the Licensed Marks in the event that Licensee elects
to use the Licensed Marks in connection with the manufacture,
advertising, marketing, promotion, use, sale and distribution of
Goods outside the Territory.
2.4 Representation: Licensee represents and warrants to Licensor that it
has full legal right, power and authority to enter into this
Agreement, to perform all of its obligations hereunder and to
consummate all of the transactions contemplated herein.
2.5 Goodwill: All use of the Licensed Marks by Licensee and any
Distributors shall inure to the benefit of Licensor.
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3. Term.
The term of this Agreement shall commence upon the closing of the
Principal Transaction and continue for an initial term of twenty (20)
years. This Agreement shall automatically renew for additional ten (10)
year terms unless, at least one hundred and eighty days prior to
commencement of any renewal term Licensee provides Licensor with written
notice of non-renewal.
4. Use of Licensed Marks; Advertising.
4.1 Quality of Marketing: Licensee shall keep to the established
prestige and goodwill of Licensor in selecting all of Licensee's
product labels, advertising and business materials, including
without limitation, signs, point of sale advertising material,
letterheads, business cards, order forms, invoices, checks and phone
listings (together "Marketing Materials") bearing the Licensed
Marks. Licensee shall not alter the Licensed Marks and not use the
Licensed Marks in conjunction with any other marks, logos or trade
names. Licensee shall use, employ, display and otherwise release
Marketing Materials only in accordance with Licensor's existing
labels and usage guidelines for the Licensed Marks attached hereto
as Exhibit B, as amended by Licensor and made available to Licensee
in writing from time to time, unless Licensee obtains Licensor's
prior written approval to depart from such guidelines. Such approval
shall not be unreasonably withheld. Failure of Licensor to reply
within fourteen (14) days after Licensee's written request for
approval hereunder shall be deemed to constitute approval as
referred to hereunder.
4.2 Quality of Goods: Licensee shall maintain the high quality and
standards of the Goods sold in connection with the Licensed Marks
and shall safeguard the established prestige and goodwill of the
name "Vermont Pure" and the "Vermont Pure" image, at the same level
of prestige and goodwill as heretofore maintained. The applicable
quality control standards shall be those established by the
International Bottled Water Association ("IBWA") and set forth in
the IBWA Model Code, as amended by the IBWA from time to time.
4.3 Right to Inspect and Require Compliance: Licensor may inspect
Licensee's products and premises during normal business hours and
upon reasonable notice, to ensure compliance with the requirements
set forth in this Section 4. Licensee shall have a water quality
audit conducted by an independent third party (such as the National
Sanitation Foundation or the American Institute of Baking) at least
once each calendar year. Licensee shall make the results of any
third party water quality audit available to Licensor promptly after
it is conducted. In the event such audit or premises inspection
reveals any non-compliance by Licensee with the quality requirements
set forth in Section 4.2, Licensor shall provide Licensee with
written notice thereof and Licensee shall remedy such non-compliance
within thirty (30) days after notice thereof. Failure to remedy such
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compliance within such time period shall constitute an event of
default under this Agreement.
5. Trademark and Related Rights.
5.1 Notice Requirements: Licensee shall comply with all notice and
marking requirements of any law applicable or necessary for the
protection of a Licensed Xxxx in the Territory.
5.2 Assignment; Further Actions: To the extent any rights in and to the
Licensed Marks are deemed to accrue to Licensee pursuant to this
Agreement or otherwise, Licensee hereby assigns any and all such
rights, at such time as they may deem to accrue, to Licensor.
Licensee shall co-operate in the execution of any documents, or the
taking of any other action, that Licensor reasonably requests to
create, record or perfect Licensor's sole and exclusive ownership of
the Licensed Trademarks, or to obtain, defend or protect trademark
registrations.
5.3 No Challenge: Licensee shall not (a) assert rights in the Licensed
Marks, or challenge the distinctiveness of the Licensed Marks, the
validity of Licensor's ownership of the Licensed Marks or any
application for registration thereof, or any trademark registrations
thereof in any jurisdiction; (b) take any action that could in any
way diminish, alter or adversely affect Licensor's rights in the
Licensed Marks; (c) apply to register or register any Licensed Marks
or any tradename, trademark, service xxxx, domain name or logo that
is similar to the Licensed Marks, without Licensor's prior written
consent; (d) use or adopt any trade name, trademark, service xxxx,
domain name or logo that is similar to the Licensed Marks, without
Licensor's prior written consent; or (e) contest the fact that
Licensee's rights under this Agreement (i) are solely those of a
promoter, manufacturer and distributor, and (ii) terminate upon
termination of this Agreement.
6. Validity; Infringement; Maintenance of the Licensed Marks.
6.1 Warranty: Licensor represents and warrants that: (a) Licensor is the
owner of all rights, title and interest in and to the Licensed Marks
and any and all forms or embodiments thereof, including without
limitation any and all registrations thereof; and (b) the Licensed
Marks do not infringe the trademark or other proprietary rights of
any other party in the Territory. EXCEPT FOR THE FOREGOING
WARRANTIES, LICENSOR DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING
WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED
WARRANTIES.
6.2 Obligation to Maintain: Licensor shall maintain registration of the
Licensed Marks in the Territory listed on Exhibit A hereto, and
shall make commercially
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reasonable efforts to protect the rights, privileges and licenses
granted to Licensee herein, throughout the term of this Agreement.
6.3 Notice of Infringement: Licensee shall promptly notify Licensor of
any infringement of the Licensed Marks by third parties, any act of
unfair competition relating to Goods, or any act of unfair
competition by third parties relating to the Licensed Marks
("Infringements"), promptly after such Infringement shall come to
Licensee's attention. Upon notification to Licensor by Licensee of
any such Infringement, Licensor shall at its own expense take such
action to stop such infringement or act as Licensor deems necessary,
in its absolute discretion, to protect the Licensed Marks and
Licensee's rights to use the Licensed Marks pursuant to this
Agreement. Licensee agrees that Licensor shall have the power to
take legal or other action, at Licensor's expense, before any court
or governmental authority with respect to any Infringement or the
protection of the Licensed Marks. Any financial benefits resulting
from any such action shall be distributed to Licensor, except that
any damages awarded or settlement amounts paid on account of
Licensee's lost profits shall be paid to Licensee. Licensee shall
have no right to take any action alleging infringement by a third
party of rights in the Licensed Marks, nor any other action in
connection with maintenance or enforcement of rights in the Licensed
Marks. Licensor shall keep Licensee informed on a timely basis of
its responses to notifications from Licensee of any Infringements.
The parties acknowledge that it is in both their interests to
protect and maintain the Licensed Marks, and the parties agree to
cooperate in good faith in furtherance of that goal.
7. Indemnities and Liability
7.1 Infringement Indemnity: Licensor shall indemnify, defend and hold
Licensee harmless from and against any judgments awarded or
settlement amounts agreed arising from any claim that the Licensed
Marks infringe the proprietary rights of a third party in the
Territory, provided that: (a) Licensor is notified promptly in
writing by Licensee of such claim and is given adequate information
and assistance necessary to defend and respond to such claim; and
(b) Licensor shall have the sole and exclusive control of the
defense, settlement or compromise of any such claim. Licensor's
indemnification obligations herein shall be Licensor's sole,
exclusive and entire liability to Licensee in connection with any
claim under the representations and warranties in Section 6.1 or any
claim that the Licensed Marks infringe the proprietary rights of a
third party.
7.2 Product Liability Indemnity: Licensee shall indemnify, defend and
hold Licensor harmless from and against any judgments awarded or
settlement amounts agreed arising from any product liability claim
with respect to any Goods manufactured, distributed or otherwise
made available by or on behalf of Licensee, provided that: (a)
Licensee is notified promptly in writing by Licensor of such claim
and is given adequate information and assistance necessary to defend
and respond to
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such claim; and (b) Licensee shall have the sole and exclusive
control of the defense, settlement or compromise of any such claim.
Licensee's indemnification obligations herein shall be Licensee's
sole, exclusive and entire liability to Licensor arising from any
product liability claim with respect to any Goods manufactured,
distributed or otherwise made available by or on behalf of Licensee.
7.3 EXCLUSION OF LIABILITY FOR CERTAIN DAMAGES: EXCEPT FOR LIABILITY
ARISING PURSUANT TO INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS
SECTION 7, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR DAMAGES FOR LOSS OF PROFITS, OR ANY SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN ANY WAY
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE LICENSED MARKS
OR RELATING TO THIS AGREEMENT, WHETHER SUCH DAMAGES ARISE UNDER
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, AND EVEN IF SUCH PARTY HAS BEEN MADE AWARE OF THE
POSSIBILITY OF SUCH DAMAGES.
8. Not Used.
9. Events of Default; Termination.
9.1 Each of the following shall constitute an event of default under
this Agreement:
(a) If Licensor or Licensee shall fail to perform any material
term, condition, agreement or covenant in this Agreement and
such party fails to cure such non-performance within thirty
(30) days after notice thereof by the other party;
(b) If Licensee shall fail to achieve Gross Sales of Goods of at
least $500,000 in any calendar year (or a pro rata amount for
the 2004 calendar year); or
(c) If Licensor or Licensee is adjudged bankrupt or institutes
proceedings seeking relief under the bankruptcy laws of any
jurisdiction or any similar law.
9.2 If any event of default shall occur pursuant to the provisions of
paragraph 9.1 hereof, the non-defaulting party may, in its sole
discretion, terminate this Agreement by written notice to the other
party. Termination shall be effective upon receipt of such notice.
No assignee for the benefit of creditors, receiver, trustee in
bankruptcy, sheriff, or any other officer of the court or official
charged with taking over custody of Licensee's assets or business,
shall have any right to continue performance of this Agreement.
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9.3 Licensee may terminate this Agreement for convenience at any time
upon thirty (30) days written notice to Licensor.
9.4 Licensee shall make and maintain detailed accurate books, records
and accounts containing the information required to verify whether
or not Licensee has achieved Gross Sales of Goods in accordance with
Section 9.1(b) above. No more than once per calendar year, Licensor
shall have the right, at its own expense, to audit such books,
records, accounts and customer invoices and other supporting
documentation. Licensor shall provide Licensee at least seven (7)
days' written notice of its election to conduct such an audit and
shall conduct such audit during normal business hours and while
minimizing disruption to Licensee. Licensee shall co-operate in
conducting such audit, without charge, and shall make such documents
available for inspection and copying and shall make such personnel
available for interviews as may be reasonably necessary to allow
Licensor to perform the audit.
10. General.
10.1 Notices: All reports, communications, requests or notices required
by or permitted under this Agreement shall be in writing and shall
be deemed to be duly given on the date same is hand delivered and
acknowledged or, if mailed, when mailed by certified or registered
mail, return receipt requested, to the party concerned at the
following address:
If to Licensor:
Vermont Pure Holdings Ltd.
00 Xxxx Xxx Xxx Xxxx
Xxxx Xxxxxxxx, XX 000000-0000
Attn: Chief Executive Officer
If to Licensee:
MicroPack Corporation
0 Xxxxxxxxxxxx Xxxx, Xxxxx 0X
Xxxxxx, XX 00000
Attn: President/CEO
Either party may change the address to which such notices and
communication shall be sent by written notice to the other party,
provided that any notice of change of address shall be effective
only upon receipt.
10.2 Assignment: The rights and obligations of Licensee under this
Agreement may be assigned by Licensee only with the prior written
consent of Licensor, which consent shall not be unreasonably
withheld, provided that this Agreement may be assigned: (a) in the
event that Licensee undergoes any merger or business combination, to
the surviving entity of any such merger or business
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combination; (b) in the event that all or substantially all of the
assets of Licensee are sold, to the purchaser of such assets; and
(c) to an Affiliate; provided that in each case such assignee shall
agree in writing addressed to Licensor to be bound by all the terms
and conditions of this Agreement. Notwithstanding anything in this
Agreement to the contrary, Licensor may, without the consent of
Licensee, collaterally assign all or any part of this Agreement or
its rights or obligations hereunder to any of its lenders.
10.3 No Sublicenses: Except as expressly set forth in this Agreement, the
rights and obligations of Licensee under this Agreement may not be
sublicensed by Licensee without the prior written consent of
Licensor, which it may give or withhold in its absolute discretion.
10.4 Governing Law: This Agreement has been entered into in the
Commonwealth of Massachusetts and shall be construed by and
interpreted and enforced in accordance with the laws of that state
without regard to principles of conflict of laws. The headings given
to the paragraphs and sub-paragraphs of this Agreement are for the
convenience of the parties only and are not to be used in any
interpretation of this Agreement. If any provision of this Agreement
is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions will not in
any way be affected or impaired thereby.
10.5 Force Majeure: If the performance of any obligation hereunder shall
be delayed due to any cause beyond the reasonable control of
Licensor or Licensee, then the party affected shall be excused from
performance of such obligation during the period of such delay,
provided however, that such party shall take all reasonable steps to
remove such causes of delay and, upon their removal, continue its
performance hereunder.
10.6 Severability: If any provision of this Agreement, or the application
thereof, shall for any reason and to any extent be determined by a
court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of this Agreement shall be interpreted so as
best to reasonably effect the intent of the parties. The parties
further agree to replace any such invalid or unenforceable
provisions with valid and enforceable provisions designed to
achieve, to the extent possible, the business purposes and intent of
such invalid or unenforceable provisions.
10.7 Waiver: No waiver by any party of a breach of any covenant or
condition of this Agreement by any other party shall be construed to
be a waiver of any succeeding breach of the same or any other
covenant or condition. This Agreement may not be changed or amended
except by a writing expressly referring to this Agreement signed by
the parties.
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10.8 Entire Agreement: This Agreement, including the exhibit hereto, sets
forth the entire agreement of the parties concerning the subject
matter hereof, and supersedes all prior agreements, arrangements or
understandings, written or oral, concerning such subject matter.
10.9 Surviving Provisions: Sections 5, 7 and 10 shall survive any
termination or expiry of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Vermont Pure Holdings, Ltd. MicroPack Corporation
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer Title: President/CEO
Signature Page of Trademark License Agreement (Vermont Pure), March 2004
Exhibit A
Registrations and Pending Applications for U.S. Trademarks
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XXXX JURISDICTION REGISTRATION
NO./APPLICATION NO.
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Vermont Pure (Stylized) USA 2053931
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Vermont Pure (Stylized) USA 78/263229
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Vermont Pure Essence USA 78/103225
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Vermont Pure Natural Spring Water USA 2292164
(and Design)
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Vermont Pure Natural Spring Water USA 2290916
Sport Source (and Design)
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Exhibit B
Trademark Usage Guidelines
Any use of the marks in text shall refer to the marks in capital letters
followed immediately by the(R)registration symbol (i.e. VERMONT PURE(R)).
Exhibit B shall also include the color labels attached hereto.
