Trademark License Agree Dtd 5-14-98

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)
--------------- incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 5 Boulevard de la Foire, L-1528 Luxembourg, 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 22710 72nd Avenue South, Kent, Washington 98032 (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 mark 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 Busi ...