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EXHIBIT 10.9
AMENDED AND RESTATED
TRADEMARK LICENSE AGREEMENT (UK)
This Agreement is made and entered into as of January 1, 2000, by and
between HALLMARK CARDS, INCORPORATED ("Hallmark") and HALLMARK ENTERTAINMENT
NETWORKS (UK) LIMITED ("HEN (UK)").
WHEREAS, HEN (UK) has entered into that certain Digital DTH
Distribution with British Sky Broadcasting Limited ("Distribution Agreement");
and
WHEREAS, Hallmark is the owner of or has filed trademark applications
for the trademark "Hallmark Entertainment" in the Territory (as defined herein);
and
WHEREAS, HEN (UK) desires to use the trademark "Hallmark Entertainment"
(the "Licensed Xxxx") in the Territory on the terms and subject to the
conditions specified herein; and
WHEREAS, Hallmark desires to permit HEN (UK) to use the Licensed Xxxx
in the Territory subject to the terms and conditions herein provided, and not
otherwise.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Grant. To the extent of its present and future ownership interest
therein, and subject to the terms and conditions of this Agreement, Hallmark
hereby grants to HEN (UK) the rights below listed for the term of this
Agreement, but only for so long as Hallmark and/or its wholly owned subsidiaries
collectively beneficially own at least 51% of the voting interest and 35% of the
equity interest of Crown Media, Inc. and designate a majority of the Board of
Directors of Crown Media, Inc. and no event of Default has occurred hereunder:
a. The non-exclusive, royalty-free license in the United Kingdom
of Great Britain and Northern Ireland, the Republic of Ireland,
the Isle of Man and the Channel Isles (the "Territory") to use the
Licensed Xxxx in connection with HEN (UK)'s promotion, marketing,
advertising, distribution and sale of the Select Pictures (and not
in connection with Other HEDL Programs); and
b. The non-exclusive, royalty-free license to use the Licensed
Xxxx in connection with the promotion, marketing, advertising,
distribution and sale of HEN (UK)'s Service (as defined herein),
in the Territory, but only for so long as the Select Pictures and
Other HEDL Programs (as defined in
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Section 3) constitute at least 50% of the hours of programming per
month of the Service (as defined in Section 3) in such country
where the Service is distributed; provided, however that for the
first six months after a launch in any given country, the Select
Pictures and Other HEDL Programs need only constitute at least
20%.
2. Limitations. In no event shall HEN (UK) be permitted to use the name
"Hallmark" alone or combined with any other name besides the Licensed Xxxx, or
to abbreviate, shorten or otherwise alter the Licensed Xxxx nor shall it be
permitted to emphasize "Hallmark" in different size, format, or boldness than
the balance of the Licensed Xxxx. HEN (UK) agrees to change its corporate name
by March 1, 2000 and agrees that thereafter it will not use the Licensed Xxxx in
its corporate name. HEN (UK) further agrees that it shall not enter into any
agreements with third parties committing HEN (UK) to use the Licensed Xxxx
beyond the term of this Agreement.
3. Select Pictures, Other HEDL Programs and the Service. "Select
Pictures" shall mean television or theatrical motion pictures produced by or at
the direction of Hallmark Entertainment Productions, LLC or its subsidiaries.
"Other HEDL Programs" shall mean all television or theatrical motion pictures
other than Select Pictures acquired by Crown Media, Inc. pursuant to that
certain Program License Agreement dated as of July 1, 1999, as amended from time
to time thereafter by and between Crown Media, Inc. and Hallmark Entertainment
Distribution, LLC (the "Program Agreement"). The "Service" shall mean the
distribution of a channel (or network presenting a channel) of the Select
Pictures and Other HEDL Programs and other high-quality, family oriented
television programming of a character, nature and quality consistent with the
image of Hallmark ("Third Party Programs").
4. Standards.
a. HEN (UK) acknowledges its familiarity with the high standards
of quality and guidelines maintained by Hallmark for the use of
the Licensed Xxxx and the name "Hallmark," and HEN (UK) agrees to
faithfully maintain these same standards in connection with its
programming of the Service, including but not limited to complying
with the broadcast standards set forth on Schedule A, as amended
by Hallmark from time to time. Furthermore, HEN (UK) agrees to
comply with any guidelines or rules for use of the Licensed Xxxx
as Hallmark may in its sole discretion, from time to time,
promulgate in order to protect the quality image and reputation
which the Licensed Xxxx and the name "Hallmark" presently enjoy
and such guidelines or rules shall be incorporated herein as a
part of this Agreement.
b. HEN (UK) acknowledges that Hallmark Cards was founded in 1910,
is a privately owned company which enjoys a stellar reputation for
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excellence, quality, adherence to high ethical and moral values,
and whose brand "Hallmark" consistently rates in the top ten
brands in the U.S. for consumer recognition, consumer trust and
quality. Further, "Hallmark Hall of Fame" productions have won 78
Emmys over the past 40 years. HEN (UK) further acknowledges that
Hallmark would not grant this trademark license if it did not
control Crown Media, Inc., HEN (UK) and Hallmark's wholly owned
subsidiaries, Hallmark Entertainment, Inc., Hallmark Entertainment
Productions, LLC and Hallmark Entertainment Distribution, LLC,
which produce and distribute the Select Pictures and Other HEDL
Programs for which use of this license is granted.
c. HEN (UK) agrees to designate an individual at HEN (UK)'s
expense who will be responsible for monitoring the use of the
Licensed Xxxx and ensuring that the Licensed Xxxx are utilized in
accordance with this Agreement and that all required requests for
approval are properly submitted to Hallmark.
5. Approval. HEN (UK) agrees to comply with the brand identity
standards of the branding committee established by Hallmark ("Branding
Committee") which standards shall include, but not be limited to, logo, program
headers, visual/verbal standards, uses and positioning of logo, application of
logo to any marketing materials, uses by any MSOs, uses in other media such as
print advertising. Further, HEN (UK) agrees that Select Pictures, Other HEDL
Programs and Third Party Programs shall also comply with the broadcast standards
on Schedule A as amended by Hallmark from time to time. HEN (UK) shall, at the
request of Hallmark, submit to Hallmark pictures, programs, film credits, press
releases, advertising and promotional materials, and other materials utilizing
the Licensed Xxxx or broadcast on the Service for Hallmark's approval, which may
be withheld for any reason. Submissions shall be directed to the attention of
Xxx Xxxxxx, or such other person designated by Hallmark from time to time.
6. Trademark Protection.
a. Hallmark will use its reasonable efforts to maintain existing
registrations for the Licensed Xxxx for use by HEN (UK) pursuant
to the terms and conditions herein contained.
b. HEN (UK) agrees to cooperate with Hallmark in obtaining and
preserving for Hallmark trademark protection for the Licensed Xxxx
and the name "Hallmark," to execute all documents which in
Hallmark's judgment are necessary therefor, and to give Hallmark
advance notice of all contemplated uses of the Licensed Xxxx. HEN
(UK) agrees to recognize Hallmark's trademark rights in the
Licensed Xxxx and to do nothing in derogation or dilution thereof,
either during the term of this Agreement or at any time
thereafter. HEN (UK), for itself, its successors
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and assigns, does hereby absolutely grant, convey, and assign to
Hallmark any and all legal and equitable right, title and
interest, both tangible and intangible, which it has or may
hereafter acquire in the Licensed Xxxx, including, but not limited
to, any goodwill hereinafter generated or created by it or anyone
acting or claiming under it.
c. HEN (UK), upon prior written approval from Hallmark, shall have
the right to enforce, at HEN (UK)'s sole expense, its rights in
the Licensed Xxxx granted hereunder against third parties that are
or may be infringing the Licensed Xxxx so as to affect HEN (UK)'s
rights granted hereunder.
d. Except as expressly set forth herein, Hallmark shall have the
right to take any action without regard to the effect of such
action on the rights granted in Section 1 hereof.
7. Term. The term of this Agreement shall be five years from the Launch
Date as that term is defined in the Distribution Agreement, provided that
neither the Distribution Agreement nor this Agreement is terminated sooner in
accordance with the terms and conditions set forth therein or herein. No course
of dealing, lack of notice of intent not to renew, implied consent or other
doctrine of law or equity shall be deemed to give HEN (UK) the right to
continued use of the Licensed Xxxx beyond the stated term of this Agreement, or
to create any duty (fiduciary or otherwise) on Hallmark to permit any such use
beyond the term of this Agreement.
8. Default. It shall be a Default hereunder in the case of the
happening and during the continuance of any of the following:
a. HEN (UK) distributes any program or picture in connection with
the Service which in Hallmark's sole discretion fails to comply
with the standards set forth in Section 4 hereof and HEN (UK)
fails to remove and stop the distribution, exhibition and
broadcast of such non-complying program or picture within 10 days
of written notice from Hallmark;
b. A Default occurs pursuant to Section 8(a) hereof three or more
times in any given 12 month period, regardless of whether HEN (UK)
has removed or stopped within 10 days of written notice from
Hallmark.
c. HEN (UK) uses the Licensed Xxxx other than in accordance with
the terms of the grant herein or HEN (UK) fails to comply with any
term or obligation of this Agreement (other than 8(a) above) and,
if curable, fails to cure such unapproved use or breach within 10
days of the date of written notice from Hallmark specifying such
breach.
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d. An event occurs (other than that described in 8(a) above) which
with the passage of time or the giving of notice, or both, would
constitute an event of default under the Program Agreement and, if
curable, Crown Media, Inc. fails to cure such event within 10 days
of written notice from Hallmark.
e. HEN (UK) fails to make any payment when due under any loan
agreement with any financial institution and fails to make such
payment within 5 days thereafter.
f. Auditors determine that HEN (UK) is no longer an ongoing
concern.
g. HEN (UK) is in default pursuant to the terms of the
Distribution Agreement.
h. Crown Media, Inc. is in default pursuant to the terms of its
Trademark License Agreement with Hallmark dated as of August
1,1999.
9. Termination.
a. This Agreement shall terminate immediately and automatically
without notice in the event that
i. HEN (UK) attempts to assign, sublicense, pledge, transfer
or otherwise convey by operation of law or otherwise, all or
any interest in, directly or indirectly ("Transfer") its rights
hereunder;
ii. HEN (UK) ceases to trade; has a winding up petition or
petition for the appointment of an administrator presented
against it which is not dismissed or withdrawn within 21 days;
goes into voluntary liquidation (other than for the bona fide
purposes of amalgamation or reconstruction); makes or offers to
make any composition with its creditors; has an administrator,
receiver or administrative receiver or similar officer
appointed to take over all or a substantial part of its assets
and undertaking, and such an appointment is not discharged
within 21 days (save where such appointment is pursuant to
frivolous third party claims); or stops payment of its debts as
and when they fall due or is deemed unable to pay its debts
within the meaning of Section 123 of the Insolvency Xxx 0000.
In any of the foregoing events, HEN (UK), its receivers,
administrators, representatives, trustees or other agents shall
have no right to exploit or in any way utilize the Licensed
Xxxx.
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iii. The Distribution Agreement is terminated for any reason.
b. This Agreement shall terminate immediately with respect to any
specific country in the event that the Select Pictures and Other
HEDL Programs, collectively comprise less than 50% of the
programming of the Service, determined in each country based on
actual hours broadcast in such country.
c. This Agreement shall terminate immediately upon the occurrence
of an event of Default pursuant to Section 8 hereof.
d. Upon the termination or expiration of this Agreement, or the
Program Agreement, HEN (UK) agrees to immediately and permanently
discontinue the use of the Licensed Xxxx, including any
adaptations thereof except that in the case of Section 9(b) above,
such use shall cease only in such country.
e. HEN (UK) hereby acknowledges that its misuse of the Licensed
Xxxx or failure to cease the use of the Licensed Xxxx upon the
termination or expiration of such rights or this Agreement will
result in damage to Hallmark for which there is no adequate remedy
at law. Accordingly, in the event of such misuse or failure,
Hallmark shall be entitled to equitable relief by way of temporary
and permanent injunctions and such other relief as any court of
competent jurisdiction may deem just and proper.
10. Additional Agreement. HEN (UK) hereby agrees that Hallmark and its
affiliates shall not have any liability or obligation to HEN (UK) on account of
the exercise of any of Hallmark's rights or remedies hereunder. HEN (UK) hereby
waives and releases any right to commence or pursue any legal action (whether
suit, counterclaim, cross claim or other action) against Hallmark or any of its
affiliates challenging the termination by Hallmark of the trademark license
granted herein based on a theory of breach of fiduciary obligation or conflicts
of interest of Hallmark or any of its affiliates or similar theories or premised
on the exercise of control or influence over management by Hallmark or its
affiliates.
11. Third Party Infringement. HEN (UK) shall promptly notify Hallmark
of any apparent infringement of any rights granted by Hallmark to HEN (UK)
hereunder. Hallmark shall have the exclusive right to institute legal action (at
its own expense) against the infringer or to otherwise terminate such
infringement. HEN (UK) shall have no right to make any demands or claims, bring
suit, effect any settlements or take any other action with respect to such an
infringement without the prior written consent of Hallmark. HEN (UK) agrees to
cooperate at its cost with Hallmark with respect to any suits or other action
taken under this paragraph and that all recoveries for such
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infringements shall belong to Hallmark. Hallmark may name HEN (UK) as a party to
any suit against third party infringers if Hallmark, in its sole opinion,
determines that it is desirable to any infringement suit.
12. Nonassignability. HEN (UK) agrees that without the prior written
consent of Hallmark it may not Transfer the rights granted hereunder or permit
any third party to utilize the Licensed Xxxx (e.g. as a channel name) other than
third party use incidental to HEN (UK)'s use described in Section 1(b) hereof
and any such Transfer shall be null and void ab initio upon such proposed
Transfer.
13. Applicable Law. The validity, construction and performance of this
Agreement shall be governed by, and interpreted in accordance with, the laws of
the State of Missouri, except for clause 9(a)(ii), which shall be governed by,
and interpreted in accordance with, the laws of England and Wales. In any
dispute relating to this Agreement, the parties hereto submit themselves to the
exclusive jurisdiction of the tribunals of the State of Missouri and the United
States Courts within the State of Missouri, expressly waiving any venue to which
they may be entitled by their present or future domiciles and any objection
based on forum non conveniens.
14. No Agency. Nothing in this Agreement shall be construed to make
either party hereto the agent or representative of the other party and neither
party shall so hold itself out nor shall either party be liable or be bound by
any act or omission of the other party.
15. Waiver. Failure of either party at any time to require the
performance of any provision under this Agreement shall not affect the right of
such party to require full performance thereafter and a waiver by either party
of a breach of any provision of this Agreement shall not be taken or held to be
a waiver of any further or similar breach or as nullifying the effectiveness of
such provision.
16. Amendments. This Agreement expresses the entire understanding of
the parties hereto and replaces any prior oral or written agreements concerning
the subject matter hereof and Licensee acknowledges that it has not executed
this Agreement in reliance upon any promise, agreement, representation or
warranty not expressly set forth in this Agreement. No amendment modification,
or supplementation hereof shall be effective or binding on either party hereto
unless reduced to writing and executed by the duly authorized representatives of
both parties hereto.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
HALLMARK CARDS, INCORPORATED
By /s/ XXXXXX XXXXXXXXX
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Title Vice President - General Counsel
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HALLMARK ENTERTAINMENT NETWORKS (UK) LIMITED
By /s/ XXXXX XXXXX
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Title President & CEO
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