Exhibit 10.3
TRADEMARK LICENSE AGREEMENT
This Trademark License Agreement (this "Agreement") is being entered into
as of the __ day of June, 1999 and is entered into by and between Florists'
Transworld Delivery, Inc. ("FTDI" or "Licensor"), a Michigan corporation, and
xxx.xxx inc. ("xxx.xxx" or "Licensee"), a Delaware corporation.
RECITALS
A. Licensor is the owner of all right, title and interest in and to the
trademarks, service marks, trade names, copyrights, trade dress and other
intellectual property set forth in Exhibit A;
B. Licensee previously operated as part of Licensor's corporate organization
and Licensee's operations have been transferred to a separate corporate
entity;
C. Licensee has been and is engaged in the business of offering consumers the
opportunity to place floral and specialty gift orders directly with it
through its toll free telephone number (0-000-XXXX-XXX) and its Web site
(xxx.xxx.xxx) and desires to continue to use the Licensed Intellectual
Property (as defined below) in furtherance of such activities; and
D. Licensor is willing to permit such continued use of the Licensed
Intellectual Property under the terms and conditions set forth in this
Agreement.
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "Content" means any text, graphics, photographs, video, audio and/or
other data, files or information on Licensee's Internet Site.
1.2 "xxx.xxx Affiliate" means a Person directly or indirectly controlled
by, controlling or under common control with xxx.xxx, other than FTDI or any
FTDI Affiliate.
1.3 "xxx.xxx Non-Compete Period" means that period beginning on the
Effective Date and ending
(a) two years after termination of this Agreement if this Agreement is
terminated by FTDI pursuant to Section 3.2; and
(b) on termination of this Agreement if this Agreement is terminated for
any other reason, including without limitation by xxx.xxx pursuant to
Section 3.3.
1.4 "xxx.xxx Prohibited Business" means a business or component of a
business that is engaged in any significant respect in any business currently
conducted by FTDI or an FTDI Affiliate.
1.5 "FTDI Affiliate" means a Person directly or indirectly controlled by,
controlling or under common control with FTDI, other than xxx.xxx or any xxx.xxx
Affiliate.
1.6 "FTDI Non-Compete Period" means that period beginning on the Effective
Date and ending
(a) six months after termination of this Agreement, if this Agreement
is terminated by FTDI pursuant to Section 3.4 and a Person, other than FTDI or
an FTDI Affiliate, directly or beneficially owns 35% or more of the voting power
represented by the voting securities of xxx.xxx and neither FTDI nor an FTDI
Affiliate directly or beneficially owns a greater percentage of such voting
power;
(b) one year after termination of this Agreement, if this Agreement is
terminated by FTDI pursuant to Section 3.4 and a Person, other than FTDI or an
FTDI Affiliate, directly or beneficially owns 20% or more of the voting power
represented by the voting securities of xxx.xxx;
(c) two years after termination of this Agreement, if this Agreement
is terminated by xxx.xxx pursuant to Section 3.3; and
(d) on termination of this Agreement if this Agreement is terminated
for any other reason, including without limitation by FTDI pursuant to Section
3.2.
1.7 "FTDI Prohibited Business" means a business, or component of a
business, that is engaged in any significant respect in the direct sale or
marketing of (a) floral and specialty gifts or (b) products that bear or
incorporate the Licensed Intellectual Property directly to consumers; provided,
however, notwithstanding any provision herein to the contrary, in the event
xxx.xxx elects to terminate or not to renew the Florists Online Hosting
Agreement, dated as of the date hereof, between FTDI and xxx.xxx (the "FOL
Agreement"), nothing in this Agreement shall be deemed to limit in any way the
right of FTDI to (x) perform the services of the type contemplated by the FOL
Agreement, (y) acquire such services from others or (z) enter into other
agreements covering functions currently performed by xxx.xxx under the FOL
Agreement.
1.8 "Intellectual Property Rights" means all inventions, discoveries,
patents, trademarks, service marks, trade names, copyrights, moral rights,
jingles, know-how, software, shop rights, licenses (to the extent
sublicensable), developments, research data, designs, technology, trade secrets,
test procedures, processes, route lists, computer programs, computer discs,
computer tapes, literature, reports and other confidential information,
intellectual and similar intangible property rights, whether or not registrable
(or otherwise subject to legally enforceable restrictions or protections against
unauthorized third party usage), and any and all applications for, registrations
of and extensions, divisions, renewals and reissuance of, any of the foregoing,
and rights therein, including without limitation (a) rights under any royalty or
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licensing agreements and (b) programming and programming rights, whether on
film, tape or any other medium.
1.9 "Internet Site" means the location on the Internet's World Wide Web
known as xxx.xxx.xxx.
1.10 "Licensed Intellectual Property" means the registered and
unregistered trademarks, service marks, trade names, copyrights, trade dress and
other intellectual property owned and used by Licensor as of the Effective Date
and identified in Exhibit A.
1.11 "Media" means on the World Wide Web, through Licensee's toll-free
telephone number, catalogs and direct-mail pieces and for promotional purposes
in or through any other means of communication.
1.12 "Order Revenues" means the revenues and service fees of Licensee and
its subsidiaries derived from all sales of goods and services under the Licensed
Intellectual Property, including sales from xxx.xxx's Web site and its toll free
telephone number that are identified by or branded with the Licensed
Intellectual Property. Order Revenues do not include any applicable discounts
or returns.
1.13 "Person" means any natural person, legal entity or other organized
group of persons or entities. (All pronouns whether personal or impersonal,
which refer to Person include natural persons and other Persons.)
1.14 "Post-Acquisition Period" means the nine-month period following the
date of the acquisition of a business that (a) is acquired by FTDI or an FTDI
Affiliate and engages in an FTDI Prohibited Business or (b) is acquired by
xxx.xxx or an xxx.xxx Affiliate and engages in an xxx.xxx Prohibited Business.
2. LICENSE
2.1 Except as otherwise provided in this Agreement, Licensor hereby grants
to Licensee, during the Term (as defined in Section 3.1) of this Agreement and
subject to the terms and conditions contained herein, a non-exclusive,
nontransferable, irrevocable worldwide license to use the Licensed Intellectual
Property in conjunction with Licensee's marketing or sale of products and
services in the floral and specialty gift business on its Internet Site and
through its toll-free telephone number, within the Media solely for direct sales
to consumers. Nothing in this Agreement grants Licensee ownership or other
rights in or to the Licensed Intellectual Property, except in accordance with
and to the extent of this license, and Licensee shall not sublicense the
Licensed Intellectual Property to any third party or Person without the prior
written consent of Licensor, which shall not be unreasonably withheld. Except as
provided herein, this Section 2.1 shall not be construed to prohibit the use of
any Licensed Intellectual Property by Licensor, its divisions, business units,
affiliates and subsidiaries except with respect to direct sales to consumers.
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2.2 Licensor shall have the right to demand the withdrawal of any Content
that includes images of products that compete with the specified Licensor's
products or services, from Licensee's Internet Site and from any of Licensee's
advertising or other materials that in Licensor's reasonable opinion conflicts
with, interferes with or is detrimental to Licensor's reputation or business as
currently conducted or that will subject Licensor to unfavorable regulatory
action or liability for any reason, violate any law or infringe the rights of
any Person; provided, however, Licensor must give Licensee prior written notice
of its intentions to demand such withdrawal and will allow Licensee a reasonable
time to remedy the offensive situation. Upon written notice from Licensor to
withdraw any such Content, Licensee shall, in its discretion, either (a) cease
using any such Content on its Internet Site or (b) remove the Licensed
Intellectual Property from its Internet Site, in either case as soon as
commercially and technically feasible, but in any event within five business
days after Licensor's written notice. If Licensee cannot cease using such
Content or remove such Licensed Intellectual Property, as the case may be,
within five business days after the date of Licensor's written notice, Licensee
will so notify Licensor detailing why the cessation or removal cannot be
effected within five business days and stating when the cessation or removal
will be effected, subject to the terms of the preceding sentence, and, in such
event, Licensee shall cease using such Content or remove such Licensed
Intellectual Property within 20 business days after the date of such written
notice.
2.3 Licensor agrees that it will not unreasonably withhold approval of
Licensee's reasonable requests to develop and market new products that
incorporate the Licensed Intellectual Property.
3. TERM AND TERMINATION
3.1 This Agreement shall begin on the date hereof (the "Effective Date")
and shall continue for a period of ninety-nine years in full force and effect
and thereafter shall be automatically renewed for like periods of ninety-nine
years unless and until it is terminated in accordance with this Article 3 (the
"Term").
3.2 Licensor will have the right (but not the obligation) to terminate
this Agreement and the license(s) and rights granted to Licensee hereunder if:
(a) Licensee materially breaches any of its obligations arising under
Section 2.2 or Section 4.2(a).
(b) Licensee is in material breach of any of its obligations, other
than those obligations arising under Section 2.2 or Section 4.2(a), or
representations hereunder, including all obligations arising under the non-
compete provisions of Section 9, which breach is not cured within 20 days of
receipt of written notice from Licensor of such breach; provided, however, that
Licensor will not have a right to terminate this Agreement based on a breach by
Licensee of Section 8.2(iii), Section 8.2(iv) or the last sentence of Section
13.2 unless such breach arises out of the gross negligence or willful misconduct
of Licensee and the conduct constituting the breach has not ceased within such
20-day period;
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(c) Licensee is the subject of a voluntary petition in bankruptcy or
any voluntary proceeding relating to insolvency, receivership, liquidation or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing, or becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating to insolvency,
receivership, liquidation or composition for the benefit of creditors, if such
petition or proceeding is not dismissed within 90 days of filing;
(d) Licensee involuntarily dissolves or is dissolved; or
(e) Licensee is judicially adjudicated insolvent or generally is
unable to pay its debts as they mature or makes an assignment for the benefit of
its creditors.
3.3 Licensee shall have the right (but not the obligation) to terminate
this Agreement and the rights granted to Licensor hereunder if:
(a) Licensor is in material breach of any of its obligations or
representations hereunder, including all obligations arising under the non-
compete provisions of Section 9, which breach is not cured within 20 days of
receipt of written notice from Licensee of such breach;
(b) Licensor is the subject of a voluntary petition in bankruptcy or
any voluntary proceeding relating to insolvency, receivership, liquidation or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing, or becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating to insolvency,
receivership, liquidation or composition for the benefit of creditors, if such
petition or proceeding is not dismissed within 90 days of filing;
(c) Licensor involuntarily dissolves or is dissolved; or
(d) Licensor is judicially adjudicated insolvent or generally is
unable to pay its debts as they mature or makes an assignment for the benefit of
its creditors.
3.4 Licensor shall have the right (but not the obligation) to terminate
this Agreement and the rights granted to Licensee hereunder, upon 90 days
written notice to Licensee, following the acquisition of the direct or
beneficial ownership of at least 20% (the "Threshold") of the voting power
represented by the voting securities of Licensee, any successor thereto or any
Permitted Assignee (as defined in Section 13.1 of this Agreement) by any Person
or "group" within the meaning of Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding, voting or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision
thereof (a "group") other than FTD Corporation ("FTDC"), Licensor or an FTDI
Affiliate. For purposes of this Agreement, (i) the term "beneficial ownership"
shall have the meaning set forth in Rule 13d-3 of the Exchange Act or any
successor provision thereof, (ii) the term "voting securities" means the Class A
Common Stock, par value $.01 per share, and Class B Common Stock, par value $.01
per share, of Licensee and any other securities issued by Licensee having the
power to vote
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generally in the election of directors of Licensee and (iii) the
term "control" means the power, whether or not exercised, to direct the
management and policies of an entity, directly or indirectly, whether through
the ownership of voting securities, by control or otherwise. For purposes of
this Section 3.4, an acquisition shall not include (A) the acquisition by a
Person of voting securities of Licensee pursuant to an involuntary disposition
by FTDC through foreclosure or similar event or (B) the acquisition by a Person
of voting securities of Licensee pursuant to a dividend intended to be on a tax-
free basis (a "Tax-Free Spin-Off") under the Internal Revenue Code of 1986, as
amended from time to time, but shall include a subsequent acquisition of voting
securities pursuant to a disposition by the Person that acquired the voting
securities in such involuntary disposition or such Tax-Free Spin-Off. In the
event any Person acquires beneficial ownership of voting power in excess of the
Threshold as a result of a transaction described in the immediately preceding
sentence, the Threshold with respect to such Person shall be adjusted to an
amount equal to the percentage of beneficial ownership held by such Person
immediately following such transaction.
3.5 In relation to trademarks comprising the Licensed Intellectual
Property, in the event Licensee abandons its license to use any or all of the
Licensed Intellectual Property (each, an "Abandoned Xxxx"), Licensor shall have
the right (but not the obligation) to terminate this Agreement, or any portion
of this Agreement that applies to the Abandoned Xxxx, and the rights granted
hereunder to Licensee in connection with and solely to the extent related to the
license of such Abandoned Xxxx upon 90 days written notice to Licensee and any
license in the Abandoned Xxxx shall revert to Licensor.
3.6 A party may exercise its right to terminate pursuant to this Article 3
by sending appropriate written notice in accordance with Section 13.5 to the
other party. No exercise by a party of its rights under this Article 3 will
limit its remedies by reason of the other party's default, the party's rights to
exercise any other rights under this Article 3, or any of that party's other
rights.
4. INTELLECTUAL PROPERTY
4.1 The parties acknowledge that the Licensed Intellectual Property is
owned or controlled by Licensor and that all use by Licensee of the Licensed
Intellectual Property will inure to Licensor's benefit and that Licensee shall
not at any time acquire any rights in the Licensed Intellectual Property other
than such rights as are granted hereunder. Nothing contained herein shall
constitute an assignment of the Licensed Intellectual Property or grant to
Licensee any right, title or interest therein, except as specifically set forth
herein. In relation to trademarks comprising the Licensed Intellectual Property,
Licensee shall maintain Licensor's quality standards as notified by Licensor
from time to time in writing with respect to its use of the Licensed
Intellectual Property, and otherwise use the Licensed Intellectual Property
subject to any reasonable restrictions or requirements disclosed to Licensee in
writing.
4.2 (a) Licensee recognizes the validity of the Licensed Intellectual
Property and any registrations therefor, and acknowledges Licensor as the owner
of all rights, title and interest in and to the Licensed Intellectual Property
listed on Exhibit A and any registrations therefor other than such rights as are
granted hereunder. Licensee will not contest, nor assist any other party in
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contesting, Licensor's ownership of the Licensed Intellectual Property or any
registrations of Licensor for such Licensed Intellectual Property, and will not
contest the validity thereof. Except for the Licensed Intellectual Property,
Licensee agrees not to use at any time any other trademarks, names, designs,
trade dress or other intellectual property confusingly similar to the Licensed
Intellectual Property. These obligations shall survive the expiration or
earlier termination of this Agreement for any reason. Except for the Licensed
Intellectual Property, Licensee shall not file any application in any country to
register a trademark that is the same as or confusingly similar to any of the
licensed trademarks or any other trademark of Licensor that has been disclosed
to Licensee in writing. If any application for registration is filed in any
country by Licensee in contravention of this paragraph 4.2(a), Licensor shall
have the right to take appropriate action against Licensee, including seeking
injunctive relief.
(b) Licensee shall furnish Licensor in writing for review by Licensor
prior to publication proofs of all materials and products bearing any Licensed
Intellectual Property (including, without limitation, advertising and publicity
materials). Licensee will not authorize full scale production of any such
material or product until after obtaining Licensor's approval in each instance,
which approval will not be unreasonably withheld. If Licensor objects to any
portion of such materials or products, such objection will be stated and
forwarded in writing to Licensee (or by oral communication confirmed in writing
promptly thereafter) within ten (10) business days of Licensor's receipt of such
materials or products, and Licensee agrees to revise such materials or products
accordingly. If Licensor fails to respond within ten (10) business days of
receipt of such materials or products, Licensee will cease use of such materials
or products unless and until Licensor notifies Licensee that such materials or
products may be used. Any material changes in such material or product shall
also be subject to Licensor's prior approval, which approval will not be
unreasonably withheld. Approval by Licensor shall not relieve Licensee of any of
its warranties or obligations under this Agreement and all materials and
products that bear any Licensed Intellectual Property shall strictly conform
with the samples and proofs approved by Licensor. Samples, materials and
products to be approved by Licensor shall be submitted to the person designated
in writing by Licensor.
4.3 In the event that Licensee learns of any infringement, threatened
infringement or passing off of the Licensed Intellectual Property, or that any
Person claims or alleges that such Licensed Intellectual Property is liable to
cause deception or confusion to the public, then Licensee shall promptly notify
Licensor in writing of the particulars thereof. Licensor, at its option, shall
then have the sole right to determine whether or not any action shall be taken.
4.4 Upon the expiration or termination of this Agreement, Licensee shall
cease all use of the Licensed Intellectual Property, as soon as commercially and
technically practicable, and shall remove or erase the Licensed Intellectual
Property from the Internet Site, and from any advertising and promotional
materials used in connection therewith, as soon as commercially and technically
practicable, but in no event shall any such material remain on the Internet Site
more than 30 days after termination of this Agreement by Licensor or Licensee,
as the case may be, or expiration of this Agreement, as applicable, and at
Licensor's request, Licensee shall certify in writing to Licensor such removal
or erasure.
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4.5 Licensee shall cause the trademark notice "(R)" or "(TM)" and/or the
legend: "[Trademark] is a trademark of [Licensor/third party owner (as the case
may be)] and is used under license" and/or such other legend as reasonably
requested in writing by Licensor from time to time, to appear in conjunction
with promotional materials and on the Internet Site.
5. OWNERSHIP
As between Licensor and Licensee, irrespective of any termination of this
Agreement howsoever caused, Licensor is or shall be the exclusive owner of and
shall retain all right, title and interest to the Licensed Intellectual Property
set forth in Exhibit A except for such rights granted hereunder.
6. COMPENSATION
6.1 In consideration of the rights herein granted, Licensee will pay
Licensor on a quarterly basis a licensing fee equal to one percent (1%) of
Licensee's Order Revenues during the Term.
6.2 Licensee will pay Licensor for any direct third party costs incurred
by Licensor to enforce Licensee's Intellectual Property Rights for use in the
Media.
7. ACCOUNTINGS
7.1 Licensee will compute Order Revenues as of each September 30, December
31, March 31 and June 30 for the prior three (3) months. Within 90 days after
the fourth quarterly period and within 60 days after each of the first three (3)
quarterly periods concerned, Licensee will deliver to Licensor a statement
covering Order Revenues for the period due to Licensor and will pay Licensor the
licensing fee as computed in accordance with Article 6. Acceptance by Licensor
of any statement or payment shall not preclude Licensor from challenging the
accuracy thereof.
7.2 Licensee will maintain accurate books and records that report the
recognition of Order Revenues. Licensor may, at its own expenses, examine and
copy those books and records, as provided in this paragraph. Licensor may make
such an examination for a particular statement within three years after the date
when Licensee sends Licensor the statement concerned. Licensor may make such
examination only during Licensee's usual business hours, and at the place where
Licensee keeps its books and records. Licensor will be required to notify
Licensee at least ten (10) days before the date of planned examination. If an
examination has not been completed within two months from commencement, Licensee
at any time may require Licensor to terminate such examination on seven days
notice to Licensor, provided that Licensee has cooperated with Licensor in the
examination of such books and records.
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8. WARRANTIES; REPRESENTATIONS
8.1 Licensor represents and warrants that:
(i) it has full power and authority to enter into and fully perform this
Agreement;
(ii) it owns the Licensed Intellectual Property and has sufficient right
and authority to grant to Licensee all licenses and rights granted by
Licensor hereunder;
(iii) to Licensor's knowledge, the Licensed Intellectual Property and the
use thereof as permitted pursuant to this Agreement does not and will
not violate any law or infringe upon or violate any rights of any
Person;
(iv) the execution, delivery and performance by Licensor of this Agreement
will not conflict with, result in a breach or termination of, or
constitute a default under any lease, agreement, commitment or other
instrument to which Licensor is a party; and
(v) this Agreement constitutes the valid and binding obligations of
Licensor enforceable against it in accordance with its terms.
8.2 Licensee represents and warrants that:
(i) it has full power and authority to enter into and fully perform this
Agreement;
(ii) this Agreement constitutes the valid and binding obligations of
Licensee enforceable against it in accordance with its terms;
(iii) the Internet Site and any content developed or furnished by Licensee
hereunder in connection with its Internet Site and the use thereof, to
Licensee's knowledge, will not infringe upon or violate any rights of
any Person; and
(iv) Licensee will use its best efforts to ensure that its Internet Site
will be advertised, transmitted and licensed in compliance with all
applicable federal, state, local and foreign laws and in a manner that
will not reflect adversely on Licensor.
9. NON-COMPETITION OBLIGATIONS
9.1 During the FTDI Non-Compete Period, FTDI will not, and will not permit
any FTDI Affiliate to, engage in any FTDI Prohibited Business; provided,
however, in the event FTDI complies with its obligations under Section 9.4, for
a period not to exceed the Post-Acquisition Period, FTDI or an FTDI Affiliate
may engage in the acquired business related to such Post-Acquisition Period.
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9.2 During the xxx.xxx Non-Compete Period xxx.xxx shall not, and shall not
permit any xxx.xxx Affiliate to, engage in any xxx.xxx Prohibited Business;
provided, however, in the event xxx.xxx complies with its obligations under
Section 9.5, for a period not to exceed the Post-Acquisition Period, xxx.xxx or
an xxx.xxx Affiliate may engage in the acquired business related to such Post-
Acquisition Period.
9.3 Nothing contained herein shall be construed so as to preclude (a)
xxx.xxx from promoting its businesses through means other than in the Media,
including, without limitation, direct mail, online advertising and offline
advertising, or (b) FTDI from promoting its businesses in the Media or catalogs,
including, without limitation, direct mail, online advertising and offline
advertising.
9.4 First Offer/First Refusal of FTDI Prohibited Business to xxx.xxx.
(a) No later than the twentieth (20th) day following the acquisition
of an FTDI Prohibited Business by FTDI or an FTDI Affiliate from a third party,
FTDI and xxx.xxx will engage in the following procedures:
(b) FTDI will notify xxx.xxx in writing of its acquisition of an FTDI
Prohibited Business (an "FTDI First Offer Notice"), which notice will describe
the business in sufficient detail to permit xxx.xxx to make an informed decision
about whether to acquire or license that business. Upon xxx.xxx's written
request, FTDI will promptly provide xxx.xxx with such additional information as
xxx.xxx reasonably requests regarding the business, pursuant to the terms of an
appropriate confidentiality agreement between the parties.
(c) Within 90 days of the receipt of an FTDI First Offer Notice,
xxx.xxx may deliver to FTDI an offer to acquire or license the business
described in the FTDI First Offer Notice (an "xxx.xxx First Offer Proposal").
Such offer shall set forth all of the material terms and conditions pursuant to
which xxx.xxx proposes to acquire or license the business.
(d) If xxx.xxx does not deliver an xxx.xxx First Offer Proposal, then
FTDI or the FTDI Affiliate, as the case may be, prior to the conclusion of the
Post-Acquisition Period, shall cease operating or dispose of the FTDI Prohibited
Business.
(e) If xxx.xxx delivers an xxx.xxx First Offer Proposal, then, within
90 days of receipt of the xxx.xxx First Offer Proposal, FTDI shall notify
xxx.xxx of (a) its intention to accept such offer or (b) its intention to accept
a bona fide superior offer, together with a description of the material terms of
such offer, it has received from a third party to acquire or license the
business (an "FTDI Third Party Offer").
(f) Within 30 days following receipt of an FTDI Third Party Offer
(the "FTDI Matching Period"), xxx.xxx may notify FTDI of its offer to acquire
the business on the terms described in the FTDI Third Party Offer (a "FTDI
Matching Notice").
(g) If xxx.xxx delivers a FTDI Matching Notice or FTDI accepts any
other xxx.xxx offer to acquire or license such business, then xxx.xxx and FTDI
shall act in good faith to
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complete definitive documentation of the acquisition or licensing transaction
within 30 days thereafter.
(h) If xxx.xxx does not deliver a FTDI Matching Notice, then FTDI
may consummate the transaction described in the FTDI Third Party Offer; provided
such transaction is consummated within 60 days following the expiration of the
FTDI Matching Period.
9.5 First Offer/First Refusal of xxx.xxx Prohibited Business to FTDI.
(a) No later than the twentieth (20th) day following the acquisition
of an xxx.xxx Prohibited Business by xxx.xxx or any xxx.xxx Affiliate from a
third party, FTDI and xxx.xxx will engage in the following procedures:
(b) xxx.xxx will notify FTDI in writing of its acquisition of an
xxx.xxx Prohibited Business (an "xxx.xxx First Offer Notice"), which notice
shall describe the business in sufficient detail to permit FTDI to make an
informed decision about whether to acquire or license that business. Upon FTDI's
written request, xxx.xxx will promptly provide FTDI with such additional
information as FTDI reasonably requests regarding the business, pursuant to the
terms of an appropriate confidentiality agreement between the parties.
(c) Within 90 days of the xxx.xxx First Offer Notice, FTDI may
deliver to xxx.xxx an offer to acquire or license the business described in the
xxx.xxx First Offer Notice (an "FTDI First Offer Proposal"). Such offer shall
set forth all of the material terms and conditions pursuant to which FTDI
proposes to acquire or license the business.
(d) If FTDI does not deliver an FTDI First Offer Proposal, then
xxx.xxx or the xxx.xxx Affiliate, as the case may be, prior to the conclusion of
the Post-Acquisition Period, shall cease operating or dispose of the xxx.xxx
Prohibited Business.
(e) If FTDI delivers an FTDI First Offer Proposal, then, within 90
days of the FTDI First Offer Proposal, xxx.xxx shall notify FTDI of (a) its
intention to accept such offer or (b) its intention to accept a bona fide
superior offer, together with a description of the material terms of such offer,
it has received from a third party to acquire or license the business (an
"xxx.xxx Third Party Offer").
(f) Within 30 days following an xxx.xxx Third Party Offer (the
"xxx.xxx Matching Period"), FTDI may notify xxx.xxx of its offer to acquire the
business on the terms described in the xxx.xxx Third Party Offer (a "xxx.xxx
Matching Notice").
(g) If FTDI delivers a xxx.xxx Matching Notice or FTDI accepts any
other xxx.xxx offer to acquire or license such business, then FTDI and xxx.xxx
shall complete definitive documentation of the acquisition or licensing
transaction within 30 days thereafter.
(h) If FTDI does not deliver a xxx.xxx Matching Notice, then xxx.xxx
may consummate the transaction described in the xxx.xxx Third Party Offer;
provided such transaction is consummated within 60 days following the expiration
of the xxx.xxx Matching Period.
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9.6 FTDI and xxx.xxx agree not to disclose to any third party other than
its legal counsel and financial advisers any information delivered pursuant to
this Section 9, including, without limitation, the terms of any notice delivered
hereunder, without the prior written consent of the other party.
10. MUTUAL SUPPORT AGREEMENT
The license granted by Licensor to Licensee under this Agreement is subject
to the terms and restrictions imposed by the Mutual Support Agreement, dated as
of December 19, 1994, between Licensor and FTD Association, an Ohio nonprofit
corporation, as supplemented, to the same extent those terms and restrictions
remain in full force and effect.
11. DISPUTE RESOLUTION
11.1 In the event that any party to this Agreement has any claim, right or
cause of action against any other party to this Agreement, which the parties
shall be unable to settle by agreement between themselves, such claim, right or
cause of action, to the extent that the relief sought by such party is for
monetary damages or awards, shall be determined by arbitration in accordance
with the provisions of this Section 11.
11.2 The party or parties requesting arbitration shall serve upon the
other or others a demand therefor, in writing, specifying the matter to be
submitted to arbitration, and nominating a competent disinterested person to act
as an arbitrator. Within 30 days after receipt of such written demand and
nomination, the other party or parties shall, in writing, nominate a competent
disinterested person, and the two (2) arbitrators so designated shall, within 15
days thereafter, select a third arbitrator. The three (3) arbitrators shall give
immediate written notice of such selection to the parties and shall fix in said
notice a time and place of the meeting of the arbitrators which shall be as soon
as conveniently possible (but in no event later than 30 days after the
appointment of the third arbitrator), at which time and place the parties to the
controversy shall appear and be heard with respect to the right, claim or cause
of action.
11.3 In case the notified party or parties shall fail to make a selection
upon notice within the time period specified, the party asserting such claim
shall appoint an arbitrator on behalf of the notified party. In the event that
the first two (2) arbitrators selected shall fail to agree upon a third
arbitrator within 15 days after their selection, then such arbitrator may, upon
application made by either of the parties to the controversy, be appointed by
any judge of any United States court of record having jurisdiction in the State
of Illinois.
11.4 Each party shall present such testimony, examinations and
investigations in accordance with such procedures and regulations as may be
determined by the arbitrators and shall also recommend to the arbitrators a
monetary award to be adopted by the arbitrators as the complete disposition of
such claim, right or cause of action. After hearing the parties in regard to the
matter in dispute, the arbitrators shall adopt as their determination with
respect to such claim, right or cause of action, within 45 days of the
completion of the examination, by majority decision signed in writing (together
with a brief written statement of the reasons for adopting such recommendation),
one of the recommendations submitted by the parties to the dispute and
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shall grant no other relief or remedy. The decision of said arbitrators, absent
fraud, duress or manifest error, shall be final and binding upon the parties to
such controversy and may be enforced in any court of competent jurisdiction.
11.5 The expense and cost of such arbitration shall be borne by the party
or parties whose recommendation was not adopted by the arbitrators. Each party
shall pay the fees and expenses of its own counsel.
11.6 Notwithstanding any other provisions of this Section 11, in the event
that a party against whom any claim, right or cause of action is asserted
commences, or has commenced against it, bankruptcy, insolvency or similar
proceedings, the party or parties asserting such claim, right or cause of action
shall have no obligations under this Section 11 and may assert such claim, right
or cause of action in the manner and forum it deems appropriate, subject to
applicable laws. No determination or decision by the arbitrators pursuant to
this Section 11 shall limit or restrict the ability of any party hereto to
obtain or seek in any appropriate forum, any relief or remedy that is not a
monetary award or money damages.
12. INDEMNIFICATION
12.1 Licensee agrees to indemnify and hold harmless Licensor from any and
all third party allegations and claims directly or indirectly caused by
Licensee's use of the Licensed Intellectual Property outside of the Media or
otherwise in violation of this Agreement.
12.2 Licensor agrees to indemnify and hold harmless Licensee from any and
all third party allegations and claims directly or indirectly arising out of any
claim that Licensee's use of any of the Licensed Intellectual Property approved
in accordance with the provisions of this Agreement violates or infringes the
rights of any third party or violates or infringes any right granted by Licensor
to such third party.
13. GENERAL
13.1 Neither Licensor nor Licensee may assign this Agreement, or its
respective rights and obligations hereunder, in whole or in part without the
other party's prior written consent. Any attempt to assign this Agreement
without such consent shall be void and of no effect ab initio. Notwithstanding
the immediately preceding sentence, any party may assign this Agreement or all,
but not less than all, of its rights and obligations hereunder to any entity
controlled by it or to any entity that acquires it by purchase of stock or by
merger or otherwise, or by obtaining all or substantially all of its assets (a
"Permitted Assignee"), provided that any such Permitted Assignee, or any
division thereof, thereafter succeeds to all of the rights and is subject to all
of the obligations of the assignor under this Agreement; provided, however, the
provisions of this Section 13.1 shall in no way modify the provisions of Section
3.4.
13.2 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of law
principles of such State. Each party shall
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comply in all respects with all laws and regulations applicable to its
activities under this Agreement.
13.3 Notwithstanding the provisions of Section 11, each party hereto
irrevocably submits to the exclusive jurisdiction of (a) the courts of the State
of Illinois, DuPage County, or (b) the United States District Court for the
Northern District of Illinois, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
or thereby. Each party agrees to commence any such action, suit or proceeding
either in the United States District Court for the Northern District of Illinois
or if such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the courts of the State of Illinois, DuPage County.
Each party further agrees that service of any process, summons, notice or
documents by U.S. registered mail to such party's respective address set forth
below shall be effective service of process for any action, suit or proceeding
in Illinois with respect to any matters to which it has submitted to
jurisdiction in this Section 13.3. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby and
thereby in (i) the courts of the State of Illinois, DuPage County, or (ii) the
United States District Court for the Northern District of Illinois, and hereby
and thereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
13.4 If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any Person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforcability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other Persons or circumstances.
13.5 All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier
service and shall be deemed given when so delivered by hand, or if mailed, three
days after mailing (one business day in the case of express mail or overnight
courier service), as follows:
(i) if to Licensee,
xxx.xxx inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
Telecopy: 630/724-6019
(ii) if to Licensor,
Florists' Transworld Delivery, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
Telecopy: 000-000-0000
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13.6 The provisions of Sections 9, 11, 12 and 13 hereof shall survive any
termination of this Agreement.
13.7 The parties to this Agreement are independent contractors. There is
no relationship of partnership, joint venture, employment, franchise or agency
between the parties. No party shall have the power to bind the other or incur
obligations on the other's behalf without the other's prior written consent.
13.8 No failure of any party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
13.9 This Agreement, along with the Exhibits hereto, contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and, except as otherwise provided herein, supersedes all prior
agreements and understandings relating to such subject matter. No party shall be
liable or bound to any other party in any manner by any representations,
warranties or covenants relating to such subject matter except as specifically
set forth herein.
13.10 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
13.11 This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that as long
as (1) FTDC beneficially owns 25% or more of the voting power represented by the
voting securities of Licensee, and no other Person directly or beneficially owns
a greater percentage of such voting power, or (2) directors, officers or
affiliates of FTDC or its subsidiaries constitute a majority of the members of
Licensee's board of directors, no amendment of this Agreement will be valid
unless it has been approved by at least a majority of the members of Licensee's
board of directors, which majority must include at least one-half of the members
of Licensee's board of directors who are "independent" directors pursuant to the
applicable rules of Nasdaq or any national stock exchange on which Licensee's
equity securities are then traded or listed.
13.12 This Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto any legal or equitable rights hereunder.
13.13 The headings contained in this Agreement or in any Exhibit hereto are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Exhibits annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any capitalized terms used in any Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section or an Exhibit, such
reference shall be to a Section of, or an Exhibit to, this Agreement unless
otherwise indicated.
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13.14 Each of the parties acknowledges that there is no adequate remedy at
law for failure of the parties to comply with the provisions of this Agreement
and that such failure would cause immediate harm that would not be adequately
compensable in damages, and therefore agree that their agreements contained
herein may be specifically enforced without the requirement of posting a bond or
other security, in addition to all other remedies available to parties hereto
under this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
xxx.xxx inc.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Florists' Transworld Delivery, Inc.
By:
------------------------------
Name:
-----------------------------
Title:
----------------------------
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