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Exhibit 10.19
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT (this "Agreement"), is entered into as
of January 10, 2005 (the "Effective Date") by and between Web Service Company,
Inc., a California Corporation ("Licensor") and Mac-Gray Services, Inc., a
Delaware corporation ("Licensee").
WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of
the date hereof (the "Purchase Agreement") by and between Licensor and Licensee,
Licensee has acquired from Licensor substantially all of the property, assets
and business comprising the laundry route business of Licensor in the states of
Alabama, Arkansas, Arizona (except for the counties of Mojave and Yuma,
Arizona), Colorado, Louisiana, Mississippi, Oregon, New Mexico, Oklahoma, Texas,
Utah (except for the counties of Iron and Washington, Utah), Washington, and
Wyoming, and only in the counties of Modoc and Siskiyou, California and the
county of Elko, Nevada;
WHEREAS, in connection with the transactions contemplated in the
Purchase Agreement to be executed concurrently with the execution of this
Agreement, Licensor has agreed to grant Licensee (a) a license to use the
tradename "Web" and the trademark "WEB" which is the subject of U.S. Trademark
Registration No. 1645075 (collectively, the "Tradenames" and each a
"Tradename"), and (b) a limited license to use the trademarks and service marks
set forth on the attached Exhibit A (collectively, the "Trademarks" and each a
"Trademark") in the states of Alaska, Arizona (other than the counties of Mojave
and Yuma, Arizona), Arkansas, Colorado, Idaho, Iowa, Kansas, Louisiana,
Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma,
Oregon, South Dakota, Texas, Utah (other than the counties of Iron and
Washington, Utah), Washington and Wyoming, and only in the counties of Modoc and
Siskiyou, California and the county of Elko Nevada (collectively, the
"Territory") , subject to the restrictions, terms and conditions herein; and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the consummation of the transactions contemplated by the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. GRANT OF LICENSE.
1.1 LICENSE. Licensor hereby grants to Licensee:
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a. an exclusive (to the extent set forth in Section 1.2 below),
perpetual (except as provided in Section 2 below), irrevocable (except as
provided in Section 2 below), fully paid-up, royalty-free right and license (the
"Tradename License") to display and use the Tradenames in the Territory in
connection with the Subject Assets (as defined in the Purchase Agreement), the
laundry route business acquired by Licensee from Licensor and Licensor's
subsidiary pursuant to the Purchase Agreement, as Licensee may conduct such
business, and/or Licensee's business relating to the sale of commercial laundry
equipment in the Territory (collectively, the "Licensed Services"), provided
that the Tradename License shall not include, and Licensee shall not use, the
tagline "multifamily laundry system", or the same typefont, design, or style
used by Licensor, including but not limited to those which are the subject of
U.S. Registration Nos. 2605945 (tornado design only), 2605944 (WEB stylized),
and 1645076 (WEB stylized). The parties agree that the Tradename License
includes, without limitation and subject to the requirements of Section 3 below,
the right to use and display the Tradenames in accordance with this Section
1.1(a): (i) at trade shows within and outside the Territory, (ii) on world wide
web sites and (iii) in trade journals and similar publications distributed
within and outside of the Territory.
b. an exclusive (to the extent set forth in Section 1.2 below),
irrevocable (except as provided in Section 2 below), fully paid-up, royalty-free
right and license (the "Trademark License") to display and use the Trademarks,
provided that the Trademark License shall only apply to (i) Printed Materials
(as defined below), (ii) Vehicles (as defined in the Purchase Agreement) and
Machines (as defined in the Purchase Agreement) (the foregoing Printed
Materials, Vehicles, and Machines shall be collectively referred to as the
"Licensed Goods"). Printed Materials means only those signs and pre-printed
brochures, stationary, business cards and business forms as are in existence on
the Closing Date and located at the Licensor branch office locations that are to
be occupied by Licensee under the Occupancy Agreement (as defined in the
Purchase Agreement). On and after the one year anniversary date of this
Agreement, Licensee shall destroy all remaining Printed Materials and shall not
use the Trademarks on any other Printed Materials after that date. Also on and
after the one year anniversary date of this Agreement, Licensee shall remove the
Trademarks from all Vehicles, but Licensee shall thereafter have the right to
use the Tradenames on the Vehicles in accordance with the Tradename License
requirements provided in Section 1.1(a). The Trademark License with respect to
the Machines shall apply only to any existing identification marks appearing on
Machines acquired by Licensee as of the Closing Date, and only for so long as
such Machines remain in service; provided that the Trademark License shall
terminate with respect to any remaining Machines in service on the 10th
anniversary date of this Agreement. The parties agree that the Trademark License
does not include any right to use the Trademarks: (i) in any general advertising
in any media whatsoever, (ii) at any trade shows within or outside the
Territory, (iii) on any world wide web sites, or (iv) in any trade journals or
similar publications in any location, whether within or outside of the
Territory.
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1.2 EXCLUSIVITY. Licensor shall not use or display or grant licenses
or rights to or otherwise permit third parties to use or display the Tradenames
or the Trademarks in the Territory, except that (i) Licensor may continue to
permit Azuma Leasing CT, L.P. ("Azuma"), to refer to itself as the successor to
Licensor for the domestic rental business, as provided for in Section 14.3 of
the Amended and Restated Asset Purchase Agreement, dated as of July 31, 2003, by
and between Licensor and Azuma and (ii) Licensor may continue to permit Web
Internet, LLC to continue to use the name "Web" in connection with its internet
hosting business conducted throughout the world.
2. TERM AND TERMINATION.
2.1 The Tradename License and the Trademark License shall become
effective on the Effective Date and shall continue for the applicable periods
respectively provided in Section 1.1(a) and (b); however, Sections 2.5, 2.6,
3.5, 4.3, 6, and 7 shall survive termination of either or both of the Tradename
License and the Trademark License.
2.2 Licensee may terminate the Tradename License or the Trademark
License at any time upon written notice to Licensor.
2.3 Licensor shall have the right to seek and obtain an order
against Licensee for specific performance with respect to any unlawful or
unauthorized use of the Tradenames or the Trademarks or to enjoin any continuing
breach of this Agreement by Licensee of Sections 1, 3.1, 3.2, 3.3 and/or 3.5.
2.4 Licensor may terminate the Tradename License and/or the
Trademark License only upon a material breach by Licensee of any of the
following Sections of this Agreement, which breach is not cured by Licensee
within forty-five (45) days after receiving written notice from Licensor:
Section 1, 3.1, 3.3, 6 or 7.8. Licensor shall have no right to terminate the
Tradename License or the Trademark License as a result of any other breach of
this Agreement by Licensee, but, subject to Section 7.4 below, Licensee shall
have any and all other rights available to it under this Agreement or under
applicable law with respect to any other breach of this Agreement by Licensee.
2.5 The exercise of Licensor's rights pursuant to Sections 2.3
and/or 2.4 hereof shall be in addition to and shall not prejudice any other
rights or claims that Licensor may have against Licensee; provided that in no
event shall such other rights or claims modify Licensor's remedies Set forth in
Sections 2.3 and 2.4 with respect to seeking specific performance and the right
to terminate, as applicable.
2.6 Upon termination of this Agreement for any reason whatsoever:
a. The Tradename License and the Trademark License granted
herein, if not expired, shall immediately terminate; and
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b. Licensee shall immediately cease all use of the Tradenames
and the Trademarks in connection with the Licensed Services and the Licensed
Goods.
3. RESTRICTIONS ON USE.
3.1 NO REGISTRATION OF SIMILAR TRADEMARKS BY LICENSEE. Licensee
agrees that it shall not register in the Territory any mark which is the same or
substantially similar to the Tradenames or the Trademarks. Notwithstanding the
foregoing, the parties agree that Licensee shall have the right to register to
conduct business anywhere in the Territory under fictitious business name(s)
which include "Web" in accordance with the applicable laws of any state or local
municipality in the Territory and register the Internet domain name
WWW.WEB-ILS.COM, and such other Internet domain names as shall be approved in
writing by Licensor prior to registration by Licensee, provided that Licensee is
otherwise in compliance with the terms of the Tradename License.
3.2 QUALITY CONTROL AND COOPERATION.
a. Licensor shall have the right to monitor the use of the
Tradenames and the Trademarks by Licensee for the purpose of protecting and
maintaining the standards of quality established by Licensor. If Licensor at any
time finds that Licensee's use of the Tradenames or the Trademarks is not
consistent with Licensor's reasonable standards of quality, Licensor may notify
Licensee in writing of such deficiencies, and if Licensee fails to correct such
deficiencies within forty-five (45) days after receipt of such notice, Licensor
may, at its election, pursue its remedies under Sections 2.3 and 2.5 of this
Agreement.
b. Licensor and Licensee shall cooperate in good faith to
minimize any consumer confusion between Licensor and Licensee and their
respective geographic territories among consumers and the trade.
3.3 RESERVATION OF RIGHTS. Nothing in this Agreement shall give
Licensee any right, title, or interest in the Tradenames or the Trademarks other
than the right to use the Tradenames and the Trademarks pursuant to the terms of
this Agreement. Licensee agrees that it shall not use the Tradenames or the
Trademarks outside of the Territory, except as provided in Section 1.1(a) of
this Agreement with respect to the Tradenames. Licensor reserves all rights to
the Tradenames and the Trademarks except as expressly granted herein to
Licensee.
3.4 LICENSEE'S USE OF TAGLINES. Licensor and Licensee acknowledge
that Licensee may use taglines developed by Licensee in association with the
Tradenames, including, without limitation, Licensee's taglines "Intelligent
Laundry" and "Intelligent Laundry Systems." Licensor expressly acknowledges that
Licensee's use of any tagline developed by Licensee in association with the
Tradenames hereunder inures to the sole benefit of Licensee and shall not
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confer on Licensor any proprietary rights in or to any such tagline, which shall
at all times remain with Licensee.
3.5 LICENSEE'S ACKNOWLEDGMENTS. Licensee expressly acknowledges that
its use of the Tradenames and the Trademarks pursuant to the Tradename License
and the Trademark License inures to the benefit of Licensor and shall not confer
on Licensee any proprietary rights to the Tradenames or the Trademarks, which
shall at all times remain with Licensor. Licensee acknowledges and agrees that,
subject to the rights and licenses granted in this Agreement, the Tradenames and
the Trademarks, and any variations of any of the foregoing which prominently
include "WEB" which may be adopted by Licensor (collectively, "Licensor's
Marks") are and shall remain the sole and exclusive property of Licensor.
Licensee's right to use the Tradenames and the Trademarks arises only pursuant
to this Agreement. Licensee shall not at any time, either during the term of the
Tradename License or the Trademark License or thereafter (a) challenge
Licensor's right, title or interest in Licensor's Marks, (b) challenge the
validity of the Tradename License or the Trademark License, or (c) challenge the
validity, enforceability, or scope of Licensor's Marks, or any applications or
registrations thereof owned by Licensor, or (c) claim any right, title or
interest in and to Licensor's Marks adverse to Licensor.
4. PROTECTION AND DEFENSE OF TRADENAMES AND TRADEMARKS.
4.1 RIGHT OF LICENSOR TO BRING ACTION. Licensee and Licensor shall
each promptly notify the other party in writing if and when such party knows of
any actual, threatened or suspected infringement or dilution of the Tradenames
or any Trademark. Licensor has the right, but not the obligation, to take any
action with respect to any actual, threatened or suspected infringement,
misappropriation or dilution of the Tradenames or any Trademark as Licensor
deems advisable to protect and/or enforce such Tradename or Trademark. Licensee,
at Licensor's expense, shall reasonably cooperate with Licensor in all respects
in such action. In no event shall Licensor be required to take any action if
Licensor deems it inadvisable to so do.
4.2 RIGHT OF LICENSEE TO BRING ACTION. Notwithstanding any of the
foregoing, if Licensor does not file any such action above to restrain or pursue
remedies based on any actual, threatened or suspected infringement or dilution
of any Tradename or any Trademark within forty-five (45) days after the receipt
of a written request to do so from Licensee, then the Licensee, at the
Licensee's expense and discretion, shall have the right, but not the obligation,
to take such action to restrain or pursue remedies based on any infringement,
threatened infringement or suspected infringement of any Tradename or any
Trademark, provided that Licensee's rights with respect to the Tradenames
pursuant to this Section 4.2 shall only arise during the term of the Tradename
License, and that Licensee's rights with respect to the Trademarks pursuant to
this Section 4.2 shall arise only during the term of the Trademark License.
Licensee shall provide written notice to Licensor within five (5) business days
of the commencement of any such action, and shall, upon Licensor's request
provide Licensor with
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copies of all correspondence and court documents in connection with such action.
Licensor, at Licensee's expense, shall reasonably cooperate with the Licensee in
all respects in such action. Licensor, at its option and expense, may actively
participate as a party in such action. Licensee shall have the sole and
exclusive right to control prosecution of such action, and the right to settle
and compromise such action or dispute; provided that Licensee will obtain
Licensor's prior written consent before settling any such action in a manner
that affects Licensor's rights in any such Trademark, such consent not to be
unreasonably withheld or delayed. In the event any monetary recovery in
connection with such action or settlement is obtained, such recovery shall be
applied in the following priority: first, to reimburse the Licensee for its
total expenses incurred in connection with such action; second, to reimburse
Licensor for any and all of its expenses incurred in connection with such
action; and third, the balance, if any, to Licensee.
4.3 DEFENSE OF LITIGATION. Licensor hereby agrees to indemnify,
defend and hold Licensee harmless from and against any loss, liability, damage,
cost or expense (including reasonable attorney fees) resulting from any third
party claim of infringement or dilution arising out of or related to the use of
the Tradenames or the Trademarks by Licensee in the Territory in a manner
authorized by this Agreement, provided that the claim is filed within one (1)
year of the date of this Agreement. Licensee shall provide Licensor prompt
notice of any such claim.
5. MAINTENANCE OF TRADEMARKS AND TRADENAMES.
5.1 TRADEMARKS. During the term of the Trademark License, Licensor
will take all necessary or desirable steps that are consistent with reputable
industry practice to prosecute and/or maintain each Trademark application or
registration identified in Exhibit A hereto, including, without limitation,
making timely payment of all applicable registration and maintenance fees. If
during the term of the Trademark License Licensor fails to so properly prosecute
and/or maintain any of the Trademark applications or registrations identified in
Exhibit A hereto in a timely manner following written notice to Licensor at
least forty-five (45) days' opportunity to cure, Licensee shall have the right,
at Licensee's own expense, during the term of the Trademark License to take all
acts as necessary to prosecute and/or maintain the validity and enforceability
of any Trademark application or registration identified in Exhibit A hereto, and
Licensor hereby irrevocably designates and appoints each officer of the Licensee
as its agent and attorney-in-fact to execute any papers on Licensor's behalf,
and to take any and all actions as the Licensee may deem necessary or desirable
in order to so prosecute and/or maintain the validity and enforceability of any
such Trademark application or registration.
5.2 During the term of the Tradename License, Licensor will take all
necessary or desirable steps that are consistent with reputable industry
practice to prosecute and/or maintain the Tradename which is the subject of U.S.
Trademark Registration No. 1645075, including, without limitation, making timely
payment of all applicable registration and maintenance fees. If during the term
of the Tradename License Licensor fails to so properly prosecute and/or maintain
such Tradename in a timely manner following written notice to
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Licensor at least forty-five (45) days' opportunity to cure, Licensee shall have
the right, at Licensee's own expense, during the term of the Tradename License
to take all acts as necessary to prosecute and/or maintain the validity and
enforceability of such Tradename, and Licensor hereby irrevocably designates and
appoints each officer of the Licensee as its agent and attorney-in-fact to
execute any papers on Licensor's behalf, and to take any and all actions as the
Licensee may deem necessary or desirable in order to so prosecute and/or
maintain the validity and enforceability of such Tradename.
6. INDEMNITY BY LICENSEE. Except as otherwise set forth in this
Agreement, Licensor shall have no liability or responsibility for Licensee's use
of the Tradenames or the Trademarks. Except for matters which are the subject of
Licensor's indemnification obligations under Section 4.3 above, Licensee shall
indemnify, defend and hold harmless Licensor and its officers, directors,
employees, shareholders, affiliates, parent and subsidiary companies, customers,
vendors, partners, representatives and agents from and against any and all
claims, demands, lawsuits, actions, proceedings, liabilities, losses, damages,
fees, costs and expenses (including without limitation attorneys' fees and costs
of investigation and experts) arising out of, resulting from or relating to (a)
any claims of third parties against the Licensor or the foregoing individuals
and/or entities involving the Licensed Services and/or the Licensed Goods in the
Territory, or the promotion, marketing, advertising or other use of the
Tradenames or Trademarks by Licensee in connection therewith; (b) any claims of
third parties against the Licensor or the foregoing individuals and/or entities
arising from Licensee's use of any and all marks, letters, words, symbols,
characters, designs, and the like in connection with the Licensed Services
and/or the Licensed Goods, irrespective of Licensor's approval thereof, or (c)
Licensee's filings with any trademark office pursuant to Section 5 of this
Agreement.
7. MISCELLANEOUS.
7.1 SEVERABILITY. In the event that any provision of this Agreement
is found to be unenforceable, such provision will be reformed only to the extent
necessary to make it enforceable, and the remainder will continue in effect, to
the extent consistent with the intent of the parties as of the Effective Date.
7.2 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be
construed to place the parties hereto in an agency, employment, franchise, joint
venture, or partnership relationship. Neither party will have the authority to
obligate or bind the other in any manner, and nothing herein contained shall
give rise or is intended to give rise to any rights of any kind to any third
parties. Neither party will represent to the contrary, either expressly,
implicitly or otherwise.
7.3 GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws of the State of Delaware without regard to its
conflict of laws provisions.
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7.4 ARBITRATION. Except with respect to injunctive relief, which may
be sought in a court of competent jurisdiction, as more specifically set forth
below, all disputes, claims, or controversies arising out of or relating to this
Agreement or any other agreement executed and delivered pursuant to this
Agreement or the negotiation, validity or performance hereof and thereof or the
transactions contemplated hereby and thereby that are not resolved by mutual
agreement shall be resolved solely and exclusively by binding arbitration to be
conducted before J.A.M.S./Endispute, Inc. or its successor. The arbitration
shall be held in Miami, Florida before a single arbitrator and shall be
conducted in accordance with the rules and regulations promulgated by
J.A.M.S./Endispute, Inc. unless specifically modified herein.
The parties covenant and agree that the arbitration shall commence
within ninety (90) days of the date on which any party files a written demand
for arbitration hereto. In connection with the arbitration proceeding, the
arbitrator shall have the power to order the production of documents by each
party and any third-party witnesses. In addition, each party may take up to
three depositions as of right, and the arbitrator may in his or her discretion
allow additional depositions upon good cause shown by the moving party. However,
the arbitrator shall not have the power to order the answering of
interrogatories or the response to requests for admission. In connection with
any arbitration, each party shall provide to the other, no later than seven (7)
business days before the date of the arbitration, the identity of all persons
that may testify at the arbitration and a copy of all documents that may be
introduced at the arbitration or considered or used by a party's witness or
expert. The arbitrator's decision and award shall be made and delivered within
six (6) months of the selection of the arbitrator. The arbitrator's decision
shall set forth a reasoned basis for any award of damages or finding of
liability. The arbitrator shall not have the power to award damages in excess of
actual compensatory damages and shall not multiply actual damages or award
punitive damages or any other damages that are specifically excluded under this
Agreement, and each party hereby irrevocably waives any claim to such damages.
The parties covenant and agree that they will participate in the
arbitration in good faith, that they will share equally the fees and expenses of
J.A.M.S./Endispute, Inc. and that they will each bear their own attorneys' fees
and expenses, except as otherwise provided herein. The arbitrator may in his or
her discretion assess costs and expenses (including the reasonable attorneys'
and experts' fees and expenses of the prevailing party) against any party to a
proceeding. Any party unsuccessfully refusing to comply with an order of the
arbitrators shall be liable for costs and expenses, including attorneys' fees,
incurred by the other party in enforcing the award. This Section applies equally
to requests for temporary, preliminary or permanent injunctive relief, except
that in the case of temporary or preliminary injunctive relief any party may
proceed in court without prior arbitration for the limited purpose of avoiding
immediate and irreparable harm. The provisions of this Section shall be
enforceable in any court of competent jurisdiction. The prevailing party in any
action for injunctive relief will be entitled to payment of reasonable
attorneys' fees and expenses. Each of the parties hereto irrevocably and
unconditionally consents to the exclusive jurisdiction of J.A.M.S./Endispute,
Inc. to resolve all
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disputes, claims or controversies arising out of or relating to this Agreement
or any other agreement executed and delivered pursuant to this Agreement or the
negotiation, validity or performance hereof and thereof or the transactions
contemplated hereby and thereby and further consents to the jurisdiction of the
courts of Florida for the purposes of enforcing the arbitration provisions of
this Section. Each party further irrevocably waives any objection to proceeding
before J.A.M.S./Endispute, Inc. based upon lack of personal jurisdiction or to
the laying of the venue and further irrevocably and unconditionally waives and
agrees not to make a claim in any court that arbitration before
J.A.M.S./Endispute, Inc. has been brought in an inconvenient forum. Each of the
parties hereto hereby consents to service of process by registered mail return
receipt requested at the address to which notices are to be given. Each of the
parties hereto agrees that its or his submission to jurisdiction and its or his
consent to service of process by mail are made for the express benefit of the
other parties hereto.
7.5 NOTICES. All notices or other communications required or
permitted to be given by either party to the other party hereunder shall be
given in the manner and to the addresses specified in Section 10.2 of the
Purchase Agreement.
7.6 CONSTRUCTION. This Agreement has been negotiated by each of the
parties hereto and each of their respective counsel. This Agreement will be
fairly interpreted in accordance with its terms and without any strict
construction in favor of or against either party.
7.7 COMPLETE AGREEMENT; NO WAIVER. This Agreement, together with the
Purchase Agreement, constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement. It supersedes and replaces all
prior or contemporaneous understandings or agreements, written or oral,
regarding such subject matter, and prevails over any conflicting terms or
conditions contained on printed forms submitted with purchase orders, sales
acknowledgments or quotations. This Agreement may not be modified or waived, in
whole or part, except in writing and signed by an officer or duly authorized
representative of each party. Failure by either party to enforce any provision
of this Agreement will not be deemed a waiver of future enforcement of that or
any other provision.
7.8 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns. Licensee may not assign or sublicense any of its rights hereunder
without the prior written consent of Licensor.
7.9 NO THIRD PARTY RIGHTS. This Agreement is not for the benefit of
any third party and shall not be considered to grant any right or remedy to any
third party whether or not referred to in this Agreement.
7.10 SECTION HEADINGS. The section headings used herein are for the
convenience of the parties only, are not substantive and shall not be used to
interpret or construe any of the provisions contained herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
LICENSOR: LICENSEE:
- -------- --------
Web Service Company, Inc. Mac-Gray Services, Inc.
By ________________________ By __________________________
Name: _____________________ Name: _______________________
Title: ______________________ Title: ________________________
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EXHIBIT A
TRADEMARKS
Design Only (Tornado) (Registration No. 2605945), registered 08/06/2002
[GRAPHIC OF A TORNADO SYMBOL]
WEB (Stylized) (Registration No. 2605944), registered 08/06/2002
[GRAPHIC OF THE WORD "WEB"]
WEB (Stylized) (Registration No. 1645076), registered 05/21/1991
[ANOTHER GRAPHIC OF THE WORD "WEB"]
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