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EXHIBIT 10.8
AMENDED AND RESTATED
TRADEMARK LICENSE AGREEMENT
This Amended and Restated Agreement is made and entered into as of
January 26, 2000, by and between HALLMARK CARDS, INCORPORATED ("Hallmark") and
CROWN MEDIA, INC. ("Crown").
WHEREAS, Hallmark Cards is the owner of or has filed trademark
applications for the trademark "Hallmark Entertainment" outside the United
States as set forth on Schedule A hereto; and
WHEREAS, Crown desires to use the trademark "Hallmark Entertainment"
(the "Licensed Xxxx") on the terms and subject to the conditions specified
herein; and
WHEREAS, Hallmark desires to permit Crown to use the Licensed Xxxx
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 Crown 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 and designate a majority of the Board of Directors of
Crown and no event of Default has occurred hereunder:
a. The non-exclusive, royalty-free license outside the United
States and Canada to use the Licensed Xxxx in connection with
Crown'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 Crown's Service (as defined herein),
in any country outside the United States and Canada, but only
for so long as the Select Pictures and Other HEDL Programs (as
defined in 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 Crown 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
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Licensed Xxxx. Crown agrees to that it will not use the Licensed Xxxx in its
corporate name. Crown further agrees that it shall not enter into any
agreements with third parties committing Crown 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 motion pictures and mini-series produced by or
at the direction of Hallmark Entertainment Productions, LLC or its subsidiaries.
"Other HEDL Programs" shall mean all television motion pictures and mini-series
other than Select Pictures acquired by Crown pursuant to that certain Program
License Agreement dated as of July 1, 1999, as amended from time to time
thereafter by and between Crown 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. Crown 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 Crown 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,
Crown 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. Crown acknowledges that Hallmark Cards was founded in 1910,
is a privately owned company which enjoys a stellar reputation
for 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. Crown
further acknowledges that Hallmark would not grant this
trademark license if it did not control Crown 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. Crown agrees to designate an individual at Crown's expense
who will be responsible for monitoring the use of the Licensed
Xxxx and
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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. Crown 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, Crown 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. Crown 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 Crown
pursuant to the terms and conditions herein contained.
b. Crown 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. Crown 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. Crown, for itself, its successors 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. Crown, upon prior written approval from Hallmark, shall
have the right to enforce, at Crown'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 Crown'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.
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7. Term. The term of this Agreement shall be three years from the
initial commencement date of August 1, 1999, provided that it is not terminated
sooner in accordance with the terms and conditions set forth 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 Crown 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. Crown 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
Crown 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
Crown has removed or stopped within 10 days of written notice
from Hallmark.
c. Crown uses the Licensed Xxxx other than in accordance with
the terms of the grant herein or Crown 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.
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 fails to cure such event
within 10 days of written notice from Hallmark.
e. Crown 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 Crown is no longer an ongoing
concern.
9. Termination.
a. This Agreement shall terminate immediately and
automatically without notice in the event that
i. Crown 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;
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ii. Crown is adjudicated bankrupt, becomes insolvent,
makes any assignment for the benefit of its
creditors, has its assets placed in the hands of a
receiver, files a petition in bankruptcy, has filed
against it a petition in bankruptcy which is not
discharged within 60 days after its filing, or is
dissolved or liquidated (in which case, Crown, its
receivers, representatives, trustees, agents, or
successors shall have no right to exploit or in any
way utilize the Licensed Xxxx).
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 S
hereof.
d. Upon the termination or expiration of this Agreement, or
the Program Agreement, Crown 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. Crown 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. Crown hereby agrees that Hallmark and
its affiliates shall not have any liability or obligation to Crown on account of
the exercise of any of Hallmark's rights or remedies hereunder. Crown 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. Crown shall promptly notify Hallmark
of any apparent infringement of any rights granted by Hallmark to Crown
hereunder. Hallmark shall have the exclusive right to institute legal action (at
its own expense) against the
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infringer or to otherwise terminate such infringement. Crown 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. Crown 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 infringements shall belong to Hallmark. Hallmark may name
Crown 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. Crown 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 Crown'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. 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.
17. Security Interest. Crown hereby acknowledges the difficulty of
determining the amount of any damage arising from Crown's use of the Licensed
Xxxx other than in accordance with the grant in this Agreement, particularly
inasmuch as no payment or royalty is required for the license granted herein.
Therefore, to secure Crown's performance pursuant to this Agreement and
compensation for any damage to
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Hallmark's name or reputation due to a breach of this Agreement, Crown hereby
assigns and grants to Hallmark a first and prior lien and security interest in
and to all of Crown's right and interest in and to this Agreement pursuant to a
Security Agreement of even date between the parties.
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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CROWN MEDIA, INC.
By: /s/ XXXXXXX X. XXXXXX
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Title: CFO
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