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EXHIBIT 10.39
STANDARD LICENSE AGREEMENT
SERTA, INC.
THIS AGREEMENT, dated this 1st day of December, 1969 by and between SERTA,
Associates, INC., a Delaware corporation (hereinafter referred to as "Serta"),
and Adam Wuest, Inc., Cincinnati, Ohio, an Ohio Corporation (hereinafter
referred to as "Licensee").
W I T N E S S E T H:
WHEREAS, Serta is a service corporation serving related companies which are
in the business of manufacturing and selling mattresses, other bedding products
and other products of any kind or nature; and
WHEREAS, Serta has heretofore adopted, or otherwise acquired, and now owns,
uses, advertises and authorizes the use and advertising of certain trade names,
trade-marks and labels identifying the aforementioned products and by reason
thereof has created valuable good will in connection with the manufacture and
sale thereof under said trade names, trade-marks and labels, and
WHEREAS, Serta licenses persons, firms and corporations to manufacture the
aforementioned products under standard specifications covering the method or
process of the manufacture thereof, the quality of worksmanship employed in such
manufacture and the quantity and quality of the materials entering in such
manufacture, and to attach or otherwise affix thereto and to the containers in
which the same are packaged, the trade names, trade-marks and labels of Serta
(such products so manufactured and identified are hereinafter referred to as
"Serta products"); and
WHEREAS, Licensee desires to obtain from Serta a license to manufacture and
sell Serta products as a related company of Serta, and
WHEREAS, Licensee has agreed to comply with the provisions of this agreement
and with Serta's by-laws, specifications, rules, resolutions and regulations
covering the manufacture and sale of Serta products and the use of said trade
names, trade-marks and labels now and hereafter in force and effect;
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NOW, THEREFORE, in consideration of the premises and of other good and
valuable considerations, and in further consideration of the covenants
hereinafter contained to be kept and performed by the parties hereto, it is
agreed as follows:
1. (a) Serta hereby gives to Licensee, under the terms and conditions
hereinafter set forth, the right to manufacture and sell Serta products in
accordance with and subject to Serta's by-laws, rules, regulations, resolutions
and specifications from time to time adopted or established by Serta. If at any
time or times hereafter Serta shall adopt or otherwise acquire any additional
trade name, trade-mark or label identifying any of the aforementioned products,
such trade name, trade-mark or label shall be deemed and treated to be included
within the scope of this agreement.
(b) This agreement shall become effective on December 1, 1969 and shall
remain in full force and effect until terminated by the mutual written agreement
of Serta and Licensee or under and shall remain in any of the provisions
hereinafter set forth.
2. Licensee shall have the right to manufacture Serta products pursuant to
this agreement only in the following territory: The TERRITORY OUTLINED IN RED ON
THE ATTACHED MAP.
(hereinafter referred to as the "manufacturing territory"). Serta shall not,
during the term of this agreement, suffer or permit any other person, firm or
corporation to manufacture Serta products in said manufacturing territory;
provided, however, that Serta may authorize other persons, firms or corporations
to manufacture Serta products other than mattresses and box springs for the sole
purpose of supply and shipment thereof to Serta licensees with exclusive
manufacturing territories in the United States (hereinafter sometimes referred
to as "U.S. primary licensees").
3. Licensee's manufacturing territory shall be deemed to be its Area of
Primary Responsibility for the promotion and sale of Serta products. Licensee
shall at all times exert its best efforts to obtain maximum sales of Serta
products in said manufacturing territory. If Licensee shall not meet such
minimum quota of sales of Serta products in its manufacturing territory as may
from time to time be provided by Serta's by-laws under a plan uniformly
applicable to all U.S. primary licensees, such a failure may be deemed and
treated by Serta to be an event of default by Licensee hereunder.
4. Nothing herein contained shall be deemed or treated to limit or restrict
Licensee in any substantial way from selling Serta products to any person, firm
or corporation or from selling and delivering Serta products anywhere in the
United States of America; provided, however, that if, pursuant to any
modification of the Final Judgment entered in the cause of action entitled
"UNITED STATES OF AMERICA vs SERTA ASSOCIATES, INC., No. 60 C 8043, IN THE
UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION"
or to any legislation by the Congress of the United States, it shall become
lawful and proper at any time hereafter for Serta to give and grant to its U.S.
primary licensees exclusive sales territories, then in any such event, upon the
written approval of not less than two-thirds (2/3) of its U.S. primary
1licensees, Serta may, by written notice to such licensees, constitute their
respective exclusive manufacturing territories as exclusive selling territories.
In such event, the
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Licensee shall abide by and comply with the by-laws of Serta from time to time
adopted by its stockholders to implement, protect and control the exclusivity of
such selling territories.
5. In order to control the nature and quality of Serta products, and to
provide for the proper and effective establishment of policy for and
administration of the business of Serta, a complete sot of by-laws, rules,
regulations, resolutions and specifications pertaining to the manufacture and
sale of Serta products is presently in full force and effect and is on file at
the principal office of Serta, Inc. Licensee shall comply with the by-laws,
rules, regulations, resolutions and specifications now and hereafter adopted or
established by Serta or its stockholders.
6. Licensee shall at all times own and hold such number of shares in Serta
as may be required by Serta's by-laws under a plan uniformly applicable to all
U.S. primary licensees. Licensee shall pay any and all fees and assessments
levied against stockholders under any plan approved by Serta's stockholders in
accordance with the by-laws from time to time in force and effect.
7. Serta shall defend any and all litigation to which Licensee may be made
a party arising out of its proper use of the trade names, trade-marks and labels
from time to time adopted by Serta or arising out of the alleged infringement by
Licensee of any patent specified by Serta in connection with the method of
manufacturing Serta products or the proper use of any articles or materials
specified by Serta in the manufacture of such products, provided Licensee gives
Serta timely written notice of any such litigation so as to enable Serta to
appear in such litigation and prepare for the defense thereof. Serta hereby
agrees to save the Licensee harmless from any and all loss, costs or damages
sustained by it arising out of any such litigation, provided that Licensee gives
Serta the notice herein provided and is not in default in the performance of any
of the terms, covenants and conditions hereof.
8. Licensee shall not permit or suffer any of its officers, employees or
agents to injure the good will and business of Serta and Serta trade names and
trade-marks by discrediting the Serta products, the selling policies, the
financial responsibility or the business reputation of any other Serta Licensee.
9. Licensee shall not violate the provisions of said Final Judgment
described in paragraph 4 above, or any modification thereof.
10. (a)Neither this license nor any of the rights or privileges granted to
the Licensee hereunder shall be assignable by Licensee or by operation of law or
otherwise to any other person, firm or corporation. Licensee shall not
sub-license or sub-contract any of said rights or privileges, including, but not
in limitation, the right to manufacture Serta products, to any other person,
firm or corporation whomsoever. Notwithstanding any other provision of this
agreement, any such assignment or sub-license shall forthwith terminate, without
notice, the license hereby granted to Licensee and the rights and interests of
Licensee as a stockholder of Serta and any such sub-contract shall constitute a
default referred to in paragraph 11 below.
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(b) For the purpose of this paragraph 10(b), and paragraphs 10(c) and
10(d) below, the following definitions shall apply:
"Voting shares" shall mean the issued and outstanding voting shares in a
corporation and the voting rights or beneficial interest in its voting
shares.
"Majority shares" shall mean such number of the voting shares in a
corporation as shall amount to more than one-half thereof.
"Control stockholder" shall mean (individually and collectively and
singly or in the aggregate with affiliates) the owner or owners of the
majority shares in a corporation or those shareholders exercising effective
voting control of a corporation pursuant to any written agreement.
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Each of the following events shall be deemed and treated to be an assignment
of this license prohibited by the provisions of paragraph 10(a) next preceding:
i. The filing by Licensee, or by the control stockholder of Licensee, or by
the control partner of Licensee of a voluntary petition or similar pleading
under any section or sections of any Bankruptcy Act or in any Court to
declare Licensee, or such control stockholder or control partner, insolvent;
ii. An assignment for the benefit of creditors by Licensee or by its control
stockholder;
iii. The filing, against Licensee or such control stockholder or control
partner of an involuntary petition or similar pleading under any section or
sections of any Bankruptcy Act or any involuntary petition or similar
pleading in any court to declare Licensee or such control stockholder or
control partner insolvent, or the appointment of a receiver for Licensee or
its assets or for such control stockholder or its assets or such control
partner or its assets provided, however, that if such petition or pleading
shall be dismissed or withdrawn, or such appointment shall be vacated within
thirty (30) days after the filing or occurrence thereof, the provisions of
this paragraph 10(b) (iii) shall not apply.
(c) Subject to the provisions of paragraphs 10(d) and 10(e) below, each of
the following events shall likewise be deemed and treated to be an assignment of
this license prohibited by the provisions of paragraph 10(a) above:
(i) The transfer, by sale or otherwise, of the majority shares in Licensee.
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(ii) The exchange of the majority shares in Licensee for less than the
majority shares in another corporation pursuant to a merger with,
consolidation into or other form of reorganization involving another
corporation.
(iii) The transfer of the majority shares in Licensee by the control
stockholder to another person or persons by successive transfer of such
number of voting, shares in Licensee as will total the majority shares in
Licensee, or as the result of the issuance or successive issuances of
additional voting shares in Licensee, or as the result of the sale or
successive sales of treasury shares by Licensee for cash or other
consideration or in satisfaction of any debt or debts of Licensee, or as
consideration for the acquisition of shares or other interests in another
corporation, firm or proprietorship, or as the result of the merger of
another corporation into the Licensee, or as the result of any combination
of the foregoing events. Two or more transfers or issuances of voting shares
in Licensee shall be deemed and treated to be successive transfers or
successive issuances regardless of the period in which the same shall be
effected.
(iv) If the majority shares in Licensee are owned directly or indirectly, by
another corporation and any event hereinabove set forth in paragraph 10(c)
shall occur in respect of such corporation, the occurrence of such event
shall be deemed and treated to be an assignment of this license prohibited
by the provisions of paragraph 10(a) above, with the same force and effect
as if such event had occurred with respect to Licensee.
(d) Transfers to the following described classes of persons shall not be
deemed or treated to be transfers for purposes of paragraph 10(c) (i),
10(c)(iii) or 10(c)(iv) above:
(i) The spouse, father, mother, brothers, sisters, children or grandchildren
of the transferor, including, but not in limitation, such persons as are so
related through adoption.
(ii) A donee by bona fide gift or a legatee or heir through inheritance,
intrust or otherwise, of a transferor.
(iii) A person or persons who shall acquire their voting shares in Licensee
pursuant to a contract or contracts in force and effect on the date of
execution of this license; provided that concurrently with the execution of
this license, Licensee furnishes to Serta a written statement setting forth
the date of the execution of any such contract or contracts, the persons
signatory thereto and their addresses, and the number of voting shares in
Licensee subject thereto.
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(e) (i) Upon the written request of Licensee to Serta and the submission to
Serta by Licensee of such facts and information as Serta shall request,
Serta may, by the affirmative vote of a majority of its Board of Directors,
consent to any assignment referred to in paragraph 10(c) above. Such consent
shall not be unreasonably withheld.
(ii) If, following a request by Licensee that Serta consent to such an
assignment, a majority of Serta's Board of Directors shall not consent
thereto, or shall not take action thereon within thirty (30) days after
Serta receives from Licensee such facts and information as it shall have
requested concerning such assignment, Licensee may, by written notice to
Serta, request that such consent be considered and acted upon by the
stockholders of Serta at the next annual stockholders' meeting or, if so
requested by Licensee, at a special meeting of the stockholders called by
Serta for such purpose within ten (10) days after it receives such request.
At such meeting the stockholders may consent to such assignment by
affirmatively voting therefor in accordance with Serta's by-laws. Such vote
shall be final and binding on Serta and Licensee.
11. If Licensee shall default in the prompt and full compliance with or
performance of any of the provisions hereof, Serta may terminate the license
hereby granted to Licensee and the rights and interests of Licensee as a
stockholder in Serta upon not less than thirty (30) days prior written notice to
Licensee specifying such default or defaults and the effective date of such
termination. Licensee shall have the right to cure any such default or defaults
prior to the date of termination of this license as specified in such notice.
Nothing contained in this paragraph 11 shall limit or affect the consequences of
a prohibited assignment or sub-licensing by Licensee under paragraph 10(a),
10(b) or 10(c) above.
12. Failure of Serta to notify Licensee of any default hereunder or to take
action with respect thereof shall not constitute a waiver of such default or the
provisions hereof defaulted. Waiver by
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Serta of any remedy, including, but not in limitation, the right to terminate
this license, arising out of any default by Licensee, shall not constitute a
waiver of Serta's right to terminate this license, as provided in paragraph 11
above or to resort to any other remedies on account of any subsequent or
different default.
13. The good will created in connection with the manufacture and sale by
Licensee of Serta products shall at all times be the property of Serta. In the
event this license shall be terminated pursuant to the provisions hereof, all
rights of Licensee to use said trade-marks or to enjoy the benefits of said good
will shall terminate and revert to Serta. From and after the date of such
termination. Licensee shall not manufacture or sell any Serta products and shall
not use or affix any of the trade names, trade-marks or labels theretofore used
by it in connection therewith under the terms of this license upon any articles
thereafter manufactured or sold by Licensee, and shall not hold itself out to
the public as a licensee of Serta, or as having any rights in the Serta name or
good will. Serta shall have the right to enforce by injunction the full and
faithful performance by Licensee of this covenant, and Licensee hereby consents
to the granting of a temporary injunction and a permanent injunction, without
bond, against Licensee.
14. Any territory in the United States which, during the term of this
agreement, shall not be licensed as an exclusive manufacturing territory to any
person, firm or corporation shall, until so licensed, be referred to as "open
territory." If such territory shall remain open territory for more than six
months, and if an exclusive license to manufacture Serta products therein shall
thereafter be granted by Serta, then, in such event, Licensee agrees that in
order to encourage the Licensee under such new license to expend the sums
necessary to establish a factory and full facilities for the manufacture and
sale of Serta products and to create good will for itself and Serta in its
manufacturing territory, Serta may require all, but not less than all, other
U.S. primary Licensees, including, but not in limitation, the Licensee
hereunder, not to sell and deliver Serta products for a period not exceeding
five (5) years to dealers and other persons, firms and corporations in such
manufacturing territory.
15. Except where it is hereinabove specifically stated that any action by
Serta shall be upon the authority or direction of its stockholders, all rights,
powers, authorities and discretions reserved by or granted to Serta hereunder
shall be vested in and exercised by Serta's Board of Directors in accordance
with its by-laws.
16. All notices to be given hereunder shall be sent by United States
certified mail, postage prepaid, and shall be addressed to Serta at 911 Evans
Street, Cincinnati, Ohio 45204. All notices mailed as hereinabove provided shall
be deemed and treated to have been received five (5) days after the date of
mailing. Serta and Licensee shall have the right, by notice given as herein
provided, to change the mailing address to which notices to it shall be sent by
the other party hereto.
17. This agreement supersedes all previous license or franchise agreements
between the parties hereto. The terms and provisions of this agreement are
severable, and if any part hereof shall be held invalid or unenforceable for any
reason, the remaining provisions hereof shall not
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be invalidated but shall remain in full force and effect. This agreement shall
be construed under and in accordance with the laws of the State of Illinois.
18. If there shall be any conflict between any of the terms and provisions
of this agreement and the by-laws of Serta from time to time in force and
effect, then in any such event the terms and provisions of this agreement shall
be controlling.
IN WITNESS WHEREOF, Serta and Licensee have caused these presents to be
signed in their respective corporate names by their duly authorized officers,
all on the day and year first above written.
ATTEST: SERTA ASSOCIATES, INC.
By
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Secretary President
SEAL
ATTEST: ADAM WUEST, INC.
By
- ----------------------------- ---------------------------
Secretary President
SEAL
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MEMORANDUM OF AGREEMENT
SERTA ASSOCIATES, INC.
THIS MEMORANDUM OF AGREEMENT dated this 1st day of December, 1969, by
and between SERTA ASSOCIATES, INC., a Delaware corporation, party of the first
part, hereinafter sometimes referred to as "Serta," and
Adam Wuest, Inc.
911 Evans Street
Cincinnati, Ohio 45204
party of the second part, hereinafter sometimes referred to as "Member,"
WITNESSETH:
WHEREAS, the parties hereto have heretofore entered into a Standard
License Agreement under the terms of which the Member has been given the right
to manufacture and sell certain articles in accordance with Serta's by-laws,
rules, regulations, resolutions and specifications; and
WHEREAS, under the terms of said Standard License Agreement the Member
is also given the right to use certain trade-marks, trade names and labels in
connection with the manufacture and sale of said articles; and
WHEREAS, Serta engages in national advertising of its specification
products; and
WHEREAS, the Member is desirous of gaining the consent of Serta to the
use of the word "Serta" in the corporate name or in the firm name and style
under which the Member is engaged in the manufacture and sale of such articles
in accordance with the terms of said Standard License Agreement; and
WHEREAS, it is to the mutual advantage of the parties hereto to permit
the Member to use the word "Serta" in such corporate or firm name under the
restrictions and upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and in further
consideration of the execution and delivery of said Standard License Agreement
and of the terms, covenants and conditions hereof to be kept and performed by
the parties hereto, it is covenanted and agreed as follows:
(a) The Member shall not appropriate for use or use any corporate
name or firm name and style embodying, the word "Serta" in its business
done under said Standard License Agreement unless and until the Member
has obtained the written
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consent of Serta to such appropriation or use by the Member of such
corporate name or firm name and style.
(b) Such corporate name or firm name and style shall be
sufficiently distinctive so as to prevent the public from confusing such
corporate name or firm name and style with the corporate name of Serta
or with the corporate name or firm name and style of any other
stockholder and licensee of Serta.
(c) The Member shall, in using such corporate name or firm name
and style upon its stationery, billheads and in its advertising, state
in substance upon such stationery and billheads and in such advertising
that the Member is a member or licensee of Serta Associates, Inc., a
Delaware corporation or is engaged in the manufacture and sale of
articles in accordance with specifications formulated by Serta.
(d) The Member hereby consents to the appropriation and use by
any other stockholder and licensee of Serta of a corporate name or firm
name and style embodying the word "Serta" which is approved by Serta
pursuant to an agreement between Serta and such other stockholder and
licensee containing the same provisions as contained in this agreement.
The Member shall, from time to time, upon request, execute and deliver
such documents as may be necessary or proper in Serta's opinion to
permit and consent to such appropriation and use by other stockholders
and licensees of Serta.
(e) The Member shall not manufacture and sell any article under
any corporate name or firm name and style which includes the word
"Serta" unless said article is manufactured and sold in full compliance
with Serta's by-laws, rules, regulations, resolutions and
specifications.
(f) The Member shall not manufacture and sell any article under
any trade name, trade-mark, or label unless such trade name, trade-mark,
or label is adopted and specified by Serta for use generally by all of
its licensees and stockholders.
(g) In the event the Member ceases to be a stockholder of Serta,
or in the event the said Standard License Agreement is terminated by
reason of some default of the Member in the terms, covenants and
conditions of said Standard License Agreement, or in the event of any
default by the Member of any of the terms, covenants and conditions of
this agreement and such default continues for a period of thirty (30)
days after a written demand by Serta upon the Member to remedy such
default, then in either such event this agreement shall terminate and
the Member shall immediately, upon such termination of said Standard
License Agreement, or upon ceasing to be a stockholder of Serta, or upon
the expiration of said thirty (30) day period for remedying any default
under the terms of this agreement, as the case may be, cease and abandon
the use of such corporate name or firm name and style.
(h) In the event of a termination of this agreement in the manner
specified in paragraph (g) hereof, the Member shall, within thirty (30)
days of the date of termination
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of this agreement, cause such corporate name to be changed by deleting
the word "Serta" therefrom. In the event such firm name and style can be
registered under the provisions of any state law for the exclusive use
by the registrant, then, in the event of the termination of this
agreement as provided in paragraph (g), the Member shall, within thirty
(30) days of such termination, take such legal steps as may be necessary
to change the registration of such firm name and style by deleting the
word "Serta" therefrom.
(i) In the event of the termination of this agreement by reason
of a default of the Member as herein specified and the Member fails or
refuses to cease and desist from the use of such corporate name or firm
name and style embodying the word "Serta" therein, or fails and refuses
to change such corporate name or such firm name and style by deleting
the word "Serta" therefrom, then in either such event Serta shall have
the right, without notice to the Member, to obtain an injunction
enjoining the Member from the use of any corporate name or firm name and
style which embodies the word "Serta" therein.
(j) In the event Serta desires to become qualified as a foreign
corporation in the state or states in which the Member is doing business
under such corporate name or such firm name and style, the Member shall,
upon request of Serta, execute a written consent to the qualification of
Serta in such state or states.
(k) In the event the Member does not cease from using such
corporate name or firm name and style as provided in paragraphs (g) and
(h) hereof, it is understood and agreed that Serta will suffer material
damages, the exact amount of which would be difficult, if not
impossible, of ascertainment. Therefore, the Member shall pay to Serta,
upon demand, the sum of Twenty-Five Dollars ($25.00) per day as
liquidated damages for each and every day in which the Member fails to
cease and desist from the use of such corporate name or firm name and
style as required by the terms of this agreement. In addition to the
foregoing penalty, the Member shall pay to Serta its reasonable costs,
expenses and attorneys' fees incurred in and about the collection of
such penalty or in and about the obtaining of an injunction against the
Member, or in and about any litigation to which Serta is made a party by
reason of the fault of the Member.
(l) In the event the Member is declared a bankrupt, or in the
event any corporation organized by the Member under a corporate name
embodying the word "Serta" is declared bankrupt, then in either such
event this agreement shall be terminated as of the date upon which the
Member or such corporation is declared a bankrupt. The occurrence of
such event shall constitute a default.
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IN WITNESS WHEREOF, Serta has caused these presents to be signed in its
corporate name by its duly authorized officers, and the Member has caused these
presents to be signed in its corporate name or in its firm name and style by its
duly authorized officers or partners, as the case may be, all on the day and
year first above written.
SERTA ASSOCIATES, INC.
By
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President.
ATTEST:
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Secretary.
SEAL
ADAM WUEST, INC
By
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President.
ATTEST:
/s/
- --------------------------------------
Secretary.
SEAL
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