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EXHIBIT 10.44
SECOND AMENDED AND RESTATED SERVICEMARK LICENSE AGREEMENT
THIS SECOND AMENDED AND RESTATED SERVICEMARK LICENSE AGREEMENT is made
as of this 1st day of November, 1997, or the Effective Date of the Stipulation
(as defined below), if later, by and between Xxxxxxxxxx Xxxx & Co.,
Incorporated, an Illinois corporation ("MW"), and ValueVision International,
Inc., a Minnesota corporation ("VVI").
RECITALS
A. MW and VVI are parties to a Servicemark License Agreement,
dated as of March 13, 1995 (the "Original Servicemark Agreement"). The
Original Servicemark Agreement was entered into in connection with an Operating
Agreement of even date therewith (the "Original Operating Agreement"). The
Original Servicemark Agreement granted to VVI a license to use the "Marks" (as
defined in the Original Servicemark Agreement) in connection with VVI's
television home shopping business.
B. Pursuant to a Restructuring Agreement dated July 27, 1996 (the
"Restructuring Agreement"), a wholly owned subsidiary of VVI purchased
substantially all of the assets of Xxxxxxxxxx Xxxx Direct, L.P., a Delaware
limited partnership which is wholly owned by MW ("MWD"). MWD had been engaged
in the direct-mail catalog business.
C. Pursuant to the Restructuring Agreement, the Original
Servicemark Agreement was amended and restated, effective as of the date
thereof (the "Amended and Restated Servicemark Agreement"), and the Original
Operating Agreement referred to therein was amended and restated, effective as
of the date thereof (the "Amended and Restated Operating Agreement") to take
into account the acquisition of substantially all of the assets of MWD and
VVI's entry into the direct-mail catalog business (referred to sometimes as
"Catalog Activities").
D. MW has filed for protection under the U.S. Bankruptcy Code.
As a result of MW's filing, as contemplated by the Stipulation entered into
between MW and VVI of even date herewith (the "Stipulation"), the parties have
amended the Amended and Restated Operating Agreement effective as of the date
hereof (the "Second Amended and Restated Operating Agreement") and the parties
desire to amend and restate the Amended and Restated Servicemark Agreement as
set forth herein to reflect the future termination of VVI's right to use the
Marks in connection with Catalog Activities.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the Amended and
Restated Servicemark Agreement is hereby amended and restated to read as
follows:
I. LICENSE GRANT
Section 1.1 The License. During the term of this Second Amended and
Restated Servicemark License Agreement, and subject to the terms and conditions
hereof, MW hereby grants to VVI the non-exclusive (except to the extent set
forth in the Second Amended and Restated Operating Agreement), nontransferable,
nonassignable and royalty-free right and license, without the right to grant
sublicenses to any party, to use the "Marks," as hereinafter defined, solely in
the conduct of the "Permitted Business," as herein
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defined, throughout the "Territory," as hereinafter defined. For the purposes
hereof, the term "Marks" shall include any future stylized versions of any of
the Marks that MW may hereafter adopt. In connection with VVI's television
home shopping business, MW authorizes any cable system, television station, or
other cable or broadcast television outlet to which VVI provides programming in
accordance with this Servicemark License Agreement to transmit such programming
to its subscribers or viewers. For purposes of this Servicemark License
Agreement:
(a) the capitalized term "Marks" shall mean, collectively
and individually as the context may require, the MW Xxxx, as herein
defined;
(b) the capitalized term "MW Xxxx" shall mean the
servicemark "Xxxxxxxxxx Xxxx", which is registered with the United
States Patent Office as No. 1,170,705 and Xxxxxxxxxx Xxxx Direct;
(c) the capitalized term "Permitted Business" shall mean
(i) "Television Home Shopping" and (ii) "Catalog Activities," as such
terms are defined in the Second Amended and Restated Operating
Agreement; provided however, that after March 31, 1998, the use of the
MW Xxxx in connection with Catalog Activities and Television Home
Shopping will be permitted only as provided in the Stipulation, and
(iii) promotion of and use of the Card as defined in the Second
Amended and Restated Operating Agreement and the Amended and Restated
Credit Card Agreement between the parties of even date herewith; and
(d) the capitalized term "Territory" shall mean (x), with
respect to Television Home Shopping, the United States of America,
its territories and possessions, and (y) with respect to Catalog
Activities, the world.
Notwithstanding anything to the contrary contained herein or in the Second
Amended and Restated Operating Agreement, MW acknowledges that because of the
satellite footprint, VVI's Television Home Shopping programming may be received
outside of the Territory in portions of Canada and Mexico, and MW further
acknowledges and agrees that VVI shall not be in violation hereof simply by
virtue of the reception of VVI's programming in such locations outside of the
Territory.
Section 1.2 Use of the MW Xxxx. The MW Xxxx shall be used in any
case in which VVI promotes to its viewers or customers the use of the Card for
the making of purchases in connection with the Permitted Business or the
availability of Card applications.
Section 1.3 Use of "Direct". Nothing in this Agreement shall limit,
and MW specifically acknowledges and agrees to, VVI's right to use the stylized
bar and word "Direct" similar to that used in the Xxxx "Xxxxxxxxxx Xxxx
Direct."
II. OWNERSHIP
Section 2.1 VVI Acknowledgment. VVI acknowledges (i) that MW is the
owner of the entire right, title and interest to and in the Marks, including
any inurements thereto, subject to any licenses that MW has previously granted;
and (ii) the validity of MW's title to the Marks. VVI agrees not to challenge
or cooperate in challenging MW's rights in the Marks, and, in connection
therewith, VVI further covenants and agrees that it shall not do any of the
following:
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(a) use the Marks or marks confusingly similar thereto,
in connection with the packaging, use, advertising, sale or
distribution of any merchandise or services other than as permitted by
this Agreement in connection with the conduct of the Permitted
Business;
(b) apply for or seek registration anywhere at any time
of the Marks or marks, confusingly similar thereto or assist any third
party in doing so (it being agreed that, when called upon in writing
by MW within a reasonable time after MW first learns of the
registration or use by VVI of words or marks that are confusingly
similar to the Marks, VVI shall, at the election and expense of MW,
either assign to MW in writing any rights which it might have therein
or release and cancel any rights of record which it might have
therein); or
(c) use the Marks or any components or any words or marks
confusingly similar thereto, in any corporate, partnership or trade
name.
Nothing in this Section 2.1 is intended to give MW greater rights to the Marks
than are otherwise available to it under the Xxxxxx Act, or any other statutory
or common law relating to marks or trade names.
Section 2.2 MW Acknowledgment. MW shall not use or claim any rights
in any xxxx used by VVI in connection with the Permitted Business, other than
the Marks, other marks to which MW has rights, and marks that are confusingly
similar to the foregoing.
III. LABELING
Section 3.1 Legends. VVI shall, to the extent reasonably specified
by MW, accompany the use of the Marks with such legends as may be reasonably
required or desired for protecting the Marks or other purposes relating to this
Second Amended and Restated Servicemark License Agreement.
Section 3.2 Specifications. VVI shall comply with MW's reasonable
written specifications as to VVI's affixation, colors, and means of displaying
the Marks. MW shall contemporaneously herewith provide VVI with MW's written
specifications as to VVI's affixation, colors and means of displaying the
Marks. MW shall provide VVI with not less than forty-five (45) days advance
written notice of any changes to said specifications. VVI may continue to
follow prior specifications during said forty-five (45) days or until VVI has
consumed all materials prepared in accordance with said prior specifications,
whichever first occurs; provided, however, that MW may purchase said materials
from VVI at VVI's cost for said materials. The cost of preparation of any
items required to comply with revised MW specifications which are not
consumable shall be borne as agreed by the parties.
IV. QUALITY CONTROL AND COVENANTS OF VVI
Section 4.1 Standards. In connection with the use by VVI of the
Marks in the Permitted Business, VVI expressly recognizes the importance to MW
of MW's reputation and goodwill and of maintaining high, uniformly applied
standards of quality in the selection, provision, advertising, marketing and
distribution of merchandise. Accordingly, VVI agrees that it shall:
(a) offer customer service (via a toll-free telephone
number for Television Home Shopping) for use by customers during VVI's
normal business hours, which currently are 8:30 a.m. to 5:00 p.m.
Minneapolis, Minnesota time, Monday through Friday;
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(b) on average, fulfill customer orders (other than so
called "reservation orders" where the delay in shipping is disclosed
to the customer as part of the programming) within ten (10) days of
receipt, except for merchandise that is drop-shipped or that is
subject to back order or other delay on an exception basis, or for
which shipment will be delayed due to a Force Majeure condition (as
defined in the Second Amended and Restated Operating Agreement) it
being expressly understood and agreed that for purposes of this
Agreement, orders shall be deemed fulfilled when they leave the
warehouse/fulfillment facility and are loaded onto trucks for delivery
to customers;
(c) offer merchandise of a quality that is substantially
similar to that offered in the television home shopping industry and
the direct-mail marketing industry in general;
(d) provide customers the right to return merchandise
purchased from VVI for a refund, on terms generally consistent with
the return policies of VVI, as provided in the Second Amended and
Restated Operating Agreement;
(e) provide order placement and order tracing services on
a timely basis, consistent with industry practices in the television
home shopping industry and the direct-mail industry;
(f) provide courteous customer service with respect to
customer inquiries on a timely basis, consistent with industry
practices in the television home shopping industry and the direct-mail
industry;
(g) comply in all material respects with all applicable
laws and regulations which specifically relate to consumer rights or
the performance in any material respect of VVI's obligations under
this Second Amended and Restated Servicemark License Agreement, the
Second Amended and Restated Operating Agreement, or the Amended and
Restated Credit Card Amendment between the parties of even date
herewith; and
(h) not offer to take or accept orders for merchandise in
quantities that materially exceed the quantities that VVI can arrange
to promptly ship within a reasonable time after the order is taken
consistent with practices in the television home shopping industry and
the direct-mail industry unless the delay in shipping is disclosed to
the customer as part of the VVI programming, including without
limitation so called "reservation orders," or unless the delay in
shipping is caused by MW.
Section 4.2 Provision of Materials for Inspection. Upon written
request of MW, VVI will provide copies or samples of the following materials
(the "Materials") to MW for its prior review and approval, which approval shall
not be unreasonably withheld or delayed:
(a) proposed written materials for use in connection with
merchandise or services offered in programming, catalogs or other
materials that utilize any of the Marks; and
(b) all advertising and promotional material and scripts
of any kind intended for use in connection with programming or
direct-mail marketing that utilizes any of the Marks.
All Materials shall be deemed to be confidential information of VVI that is
subject to Section 10 of the Second Amended and Restated Operating Agreement.
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Section 4.3 MW Objections to the Use of the Marks. In the event that
MW reasonably objects to any of the Materials, or the merchandise or services
offered on programming or through direct-mail that utilizes the Marks
("Objectionable Products"), MW will notify VVI in writing of the specific
objectionable portions of the documents or scripts or Objectionable Products,
and VVI agrees not to (i) use the objectionable portions of the documents or
scripts to market or offer for sale merchandise or services, or (ii) offer the
Objectionable Products, in programming or through sale by direct-mail that in
any way utilizes the Marks. MW agrees that its objections will not be
arbitrary or capricious, but will be based on MW's good faith belief that the
Materials or Objectionable Products could reasonably be believed to be
detrimental to MW, its reputation, image or goodwill.
Section 4.4 Right to Inspect. VVI hereby agrees, upon reasonable
request, to permit MW, at all reasonable times, to inspect (i) the merchandise
to be marketed or sold by VVI in connection with the Marks and (ii) the methods
of VVI relating to the standards described in Section 4.1 (the "Section 4.1
Standards"), and VVI also agrees that any such inspection may occur on the
premises of VVI. Any information obtained by MW as a result of such inspection
shall be deemed to be confidential information of VVI that is subject to
Section 10 of the Second Amended and Restated Operating Agreement.
Section 4.5 Certain Assurances. During the term of this Servicemark
License Agreement, VVI covenants and agrees to provide MW, upon MW's reasonable
request, reasonable assurances of its material compliance with the Section 4.1
Standards.
Section 4.6 Governmental Actions. During the term of this Agreement,
VVI hereby agrees that it will promptly provide MW copies of all complaints or
inquiries received by VVI from any governmental agency relating to or in
connection with the merchandise or services offered and sold in programming or
through direct-mail that in any way utilizes the Marks, including those
relating to any and all advertising or the terms and conditions with respect to
the sale of such merchandise or services to the public, provided that copies of
such complaints that are received from a governmental agency in response to
isolated customer complaints need only be so provided if they are material.
VVI agrees that, except to the extent a response is required by a governmental
agency or by applicable law, regulation or policy before it is reasonably
possible to obtain MW's comments or approval, it will not respond to any such
complaint or inquiry without submitting such response to MW for (i) MW's
comments, not to be unreasonably delayed, on the form and substance of VVI's
response, and (ii) MW's approval, not to be unreasonably withheld or delayed,
of any response that specifically relates to MW's Products, MW's Services, the
Card or the Marks. In no event shall VVI enter into any settlement agreement,
consent decree, or other arrangement with any governmental agency specifically
relating to MW's merchandise, services, credit card or Marks without the
express written consent of MW, which shall not be unreasonably withheld.
V. REGISTRATION, MAINTENANCE, POLICING AND PROTECTION
Section 5.1 Infringements or Challenges to the Marks. VVI shall
promptly advise MW of any infringements or challenges to its use of the Marks
or package simulations that shall come to WI's attention. MW agrees to
prosecute any infringer of the MW Xxxx, or any infringer of any of the
Auxiliary Marks if such infringement of an Auxiliary Xxxx is reasonably likely
to adversely affect the Permitted Business. VVI will not xxx any such
infringer either in its own or in the name of MW. Any recovery from a
proceeding attributable to infringement by a third party using a xxxx
confusingly similar to any of the Marks, whether by judgment or settlement,
shall be paid to MW, except to the extent that such damages specifically arise
from the lost profits or similar damages to the Permitted Business and the
judgment entered specifically allocates a portion of the judgment, after
recovery of all of MW's costs and expenses, to VVI's lost profits or damages to
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the Permitted Business. VVI shall not enter into a settlement regarding an
infringement involving the use of the Marks without the prior written approval
of MW. MW will obtain WI's consent, not to be unreasonably withheld or
delayed, to any such settlement if it permits a continuing use by the alleged
infringer of the Marks that could reasonably have an adverse impact on VVI's
rights under this Amended and Restated Servicemark License Agreement.
Section 5.2 Control of Litigation. To the extent that MW initiates
any lawsuit to xxxxx such infringement, as described in Section 5.1, MW shall
control such litigation, and MW shall pay all of the costs and expenses of said
lawsuit, and shall have the right to select counsel with respect thereto. VVI
agrees to cooperate in any such litigation, at MW's expense, to the extent
reasonably required by MW.
VI. TERM AND TERMINATION
Section 6.1 Term. This Second Amended and Restated Servicemark
License Agreement shall take effect upon the date first written above, and
shall remain in effect until July 31, 2008.
Section 6.2 Termination of Use of the Marks. In the event of the
termination of this Second Amended and Restated Servicemark License Agreement,
VVI shall forthwith cease to use, and not thereafter resume the use, of the
Marks or any confusingly similar marks, alone or in combination with any
letters, other words, or designs, in any manner.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Servicemark License Agreement effective as of the date first set forth
above.
VALUEVISION INTERNATIONAL, INC.,
a Minnesota corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: SVP Finance and CFO
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XXXXXXXXXX XXXX & CO., INCORPORATED,
an Illinois corporation
By /s/ Xxxx Xxxxxxx
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Its: Executive Vice President
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