EXHIBIT 10.1
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL
TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.
TRADEMARK LICENSE AND SUPPLY AGREEMENT
This
Trademark License and Supply Agreement (this “
Agreement ”)
is made as of October 5, 2007, by and between United Fuel &
Energy, a Nevada corporation (the “
UFEN ”),
and Southern Counties Oil Co., a California limited partnership,
d.b.a. SC Fuels (“
SC Fuels ”).
WHEREAS,
SC Fuels is the owner of the trademark and tradename “SC
Fuels” and federal registrations therefor in the forms
set forth on
Schedule A attached
hereto (the “
Licensed Trademark(s) ”).
WHEREAS,
UFEN, among other things, is in the
business of distributing fuel to commercial vehicles at
unmanned locations through the use of an access or keycard
system (the
“
UFEN Business ”)
and UFEN is in the process of acquiring all the capital stock of
Cardlock Fuels System, Inc., a California corporation
(“
CFS ”),
that currently distributes fuel to commercial vehicles at unmanned
locations through the use of an access or keycard system under the
Licensed Trademarks (the “
Acquired Sites ”).
WHEREAS,
following the closing of the acquisition of CFS, UFEN desires
to continue to use the Licensed Trademark(s) in connection
with the UFEN Business for a period of time and SC Fuels is
willing to grant to UFEN the right to use the Licensed
Trademark(s) in connection with the UFEN Business, subject to
the terms and conditions of this Agreement.
NOW
THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties, intending to be
legally bound, hereto agree as follows:
ARTICLE 1 - GRANT OF LICENSE
1.1
SC
Fuels hereby grants to UFEN, and UFEN hereby accepts, a
non-exclusive, royalty-free license to use the Licensed
Trademark(s) solely in connection with the UFEN Business
during the Term and in the Territory, subject to the terms,
conditions and limitations set forth in this
Agreement.
1.2
Except
as provided in this Article, the license granted herein shall
be nontransferable, non-assignable, and shall not be
sublicensed without the prior written consent of SC
Fuels.
1.3
The
Territory covered by this Agreement shall be the United
States.
ARTICLE 2 - OWNERSHIP AND USE OF THE LICENSED
TRADEMARKS
2.1
UFEN
acknowledges that SC Fuels owns the Licensed Trademark(s), all
goodwill associated therewith, and all rights therein and that
nothing in this Agreement shall give UFEN any right, title or
interest in or to the Licensed Trademark(s) other than
pursuant to the license granted hereby. UFEN agrees that its
use of the Licensed Trademark(s) shall inure to the benefit of
SC Fuels.
2.2
UFEN
agrees that it will do nothing inconsistent with SC
Fuels’ ownership of the Licensed Trademark(s) and shall
not make any claim adverse to SC Fuels, or assist any third
party in attempting to make any claim adverse to SC Fuels with
regard to such ownership. UFEN agrees that it will not
challenge the title of SC Fuels to the Licensed Trademark(s),
oppose any application thereof, petition to cancel any
registration thereof, or challenge the validity of this
Agreement or the license granted herein. Furthermore, UFEN
will not register, nor attempt to register, any tradename or
trademark which, in whole or in part, incorporates or is
confusingly similar to the Licensed Trademark(s).
2.3
Without
the prior written approval of SC Fuels, UFEN is not authorized
to use the Licensed Trademark(s) in connection with any
business activity unrelated to the UFEN Business at the
Acquired Sites.
2.4
Notwithstanding
the license granted herein and any of the provisions hereof,
no rights or licenses are granted to UFEN with respect to any
other trademark, service mark, and/or trade name not listed
on
Schedule A hereto.
2.5
The
license granted herein is conditioned upon UFEN’s full
and complete compliance with the marking provisions of the
trademark laws of the United States. UFEN agrees
that it will display the Licensed Trademark(s) only in such
form or manner as shall be specifically approved by SC Fuels.
UFEN also shall cause to appear on all materials on or in
connection with which the Licensed Trademark(s) is/are used,
such legends, markings and notices as SC Fuels may request in
order to give appropriate notice of any trademark rights
therein, namely, “Used under license from SC
Fuels.”
2.6
Upon
reasonable request by SC Fuels, UFEN shall allow SC Fuels to
inspect the Acquired Sites where the Licensed Trademark(s) are
used during normal business hours, and any materials produced
by or on behalf of UFEN that bear the Licensed
Trademark(s).
2.7
UFEN
agrees to assist SC Fuels in recording this Agreement with
appropriate government authorities in the Territory, where
such recording is required by law or regulation or where such
recording is permitted or desired by SC Fuels.
2.8
All
costs associated with recording this Agreement and the license
granted herein shall be borne by UFEN. All costs associated
with registering, maintaining and/or renewing any Licensed
Trademark(s) shall be borne by SC Fuels.
ARTICLE 3 - NEW TRADEMARKS
3.1
Should
UFEN desire to develop a trademark using the name “SC
Fuels” in any form other than the Licensed Trademark(s),
it must first consult with and obtain the written approval of
SC Fuels, which may be withheld in its sole discretion. Such
newly developed trademarks will be registered in the name of
SC Fuels, and will be deemed to be Licensed Trademark(s)
licensed to UFEN hereunder and will be subject to all of the
terms and conditions of this Agreement. Use of any such
developed trademarks shall inure to the benefit of SC Fuels.
SC Fuels’ approval will not be contingent upon the
payment of any fee or royalties to SC Fuels; however, the cost
of obtaining and maintaining such new trademarks shall be
borne solely by UFEN.
ARTICLE 4 - SUPPLY PROVISIONS
4.1
As
partial consideration of the granting of the license herein,
UFEN agrees that SC Fuels shall be the primary supplier of
motor fuels to UFEN at the Acquired Sites, subject to the
availability of supply from SC Fuels. SC Fuels’ motor
fuels purchased by UFEN shall at all times be the brands and
grades generally offered and/or approved for sale by SC Fuels
in the geographic area in which the Acquired Sites are
located. Three of the Acquired Sites are subject to branded
supply agreements with major oil companies and are therefore
not included in this supply agreement.
4.2
The
purchase price to be paid by UFEN to SC Fuels for the motor
fuel sold and delivered to UFEN is
set forth on
Schedule B attached
hereto .
4.3
The
freight rate to be paid by UFEN to SC Fuels for the motor
fuels delivered to UFEN is set forth on
Schedule B attached
hereto. The following services shall be provided in connection with
payment of this freight rate: tank monitoring, dispatch, transport,
fuel surcharges and demurrage. Deliveries of motor fuels purchased
by UFEN from SC Fuels shall be made at times determined by SC Fuels
and upon UFEN ordering no less than a full truck and trailer
quantity. UFEN also agrees to permit SC Fuels to utilize the
Acquired Sites for the delivery of product retains.
4.4
Although
SC Fuels will make every reasonable effort to accommodate UFEN
with respect to short notice and off-hour deliveries, in no
instance shall SC Fuels be required to make or arrange for
deliveries to the Acquired Sites: (a) sooner than forty-eight
(48) hours following UFEN’s order for such delivery; (b)
during other than normal business hours; or (c) on Sundays or
legal holidays.
4.5
Title
to and risk of loss of motor fuel sold and delivered by SC
Fuels to UFEN shall pass to UFEN at the time the motor fuel
enters the Acquired Sites. UFEN expressly waives any claim
against SC Fuels as to quantity or quality of motor fuel sold
and delivered under this Agreement, unless notice is presented
in writing to SC Fuels by UFEN within forty-eight (48) hours
after delivery.
4.6
SC
Fuels and UFEN agree that the prices for gasoline and diesel
fuel are subject to annual review and adjustment following
full and open negotiation. At the annual review, if the
parties fail to agree on the prices for gasoline and diesel
fuel, this Agreement will terminate.
4.7
If
UFEN fails to pay in accordance with agreed terms of payment,
or if UFEN’s financial capabilities or creditworthiness
shall, in SC Fuels’ sole judgment, deteriorate, SC Fuels
may, without prejudice to any other lawful remedies, defer
shipments until payment is made, demand cash payments from
UFEN, demand advance payments, or cancel this Agreement. No
payment made to SC Fuels by check, electronic funds transfer,
or by any other instrument shall contain a restrictive
endorsement of any kind, and any such restrictive endorsement
shall have no legal effect even if the instrument
restrictively endorsed is processed for payment and SC Fuels
retains the proceeds.
4.8
The
obligation of the parties to deliver and receive motor fuel
under this Agreement shall be suspended and excused if SC
Fuels is prevented from or delayed in transporting, or
delivering, in its normal manner, products, or if UFEN is
prevented from receiving or selling products, because of acts
of God, earthquake, fire, flood or the elements generally,
malicious mischief, riots, strikes, lockouts, boycotts,
picketing, labor disputes or disturbances, war, compliance
with any directive, order or regulation of any governmental
authority or representative thereof acting under claim or
color of authority, or from any other cause beyond SC
Fuels’ or UFEN’s reasonable control, whether or
not similar to the foregoing enumerated causes. Whenever such
causes, in SC Fuels’ judgment, require restriction of
deliveries, SC Fuels reserves the right in its sole discretion
to restrict deliveries to UFEN without liability, whether or
not SC Fuels is delivering products to others.
ARTICLE 5 - DURATION OF LICENSE AND
TERMINATION
5.1
This
Agreement and the license granted herein shall be effective as
of the closing of the acquisition of the Acquired Sites, and
shall terminate upon the earlier of (i) three (3) years
following the date thereof; or (ii) termination pursuant to
this Article 5 (the “
Term ”).
5.2
Either
party hereto shall have the right to immediately
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