EXHIBIT 10.2
LICENSE AGREEMENT
LICENSE AGREEMENT (the "AGREEMENT"), dated as of [ ], 2000, by
and among [NEWCO], a Delaware corporation ("NEWCO"), Xxxxxxxxxx.xxx Inc., a
California corporation ("STYLECLICK"), Internet Shopping Network LLC, a Delaware
limited liability company ("ISN"), and USA Networks, Inc., a Delaware
corporation ("USA").
WHEREAS, Styleclick and USANi Sub LLC, a Delaware limited liability company
and an Affiliate of ISN ("PARENT"), have entered into an Agreement and Plan of
Merger, dated as of January 24, 2000 (the "MERGER AGREEMENT"), which provides
for, among other things, the merger (the "MERGER") of Styleclick with a
subsidiary of Newco and the concurrent contribution by Parent to Newco of all of
the outstanding limited liability interests of ISN;
WHEREAS, Newco, Styleclick, ISN and their respective controlled Affiliates
as they exist from time to time (each, a "LICENSOR" and collectively, the
"LICENSORS") have developed and will develop technologies that enable enhanced
shopping for and selling of merchandise on the Internet;
WHEREAS, USA (together with its Affiliates, other than the Licensors, as
they exist from time to time, collectively the "LICENSEE") desires to use such
technologies in the ongoing business activities of Licensee; and
WHEREAS, the execution and delivery of this Agreement is a condition to
Closing under, and as defined in, the Merger Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed thereto in the Merger
Agreement.
1.1 "LICENSED TECHNOLOGY" means all proprietary technology owned or
developed (whether before or after the date hereof) by any of the Licensors
at any stage of development, including any software, patents, patent
applications, techniques, methods or other know-how, whether patentable or
not.
1.2 "ENHANCED TECHNOLOGY" means (a) any Licensed Technology that is an
improvement, enhancement or add-on to any technology owned or developed
(whether before or after the date hereof) by a Third Party (such Licensed
Technology being referred to as the "OWNED ENHANCED TECHNOLOGY") and
(b) the technology so owned or developed by such Third Party (the "THIRD
PARTY TECHNOLOGY") to the extent of any Licensor's rights and interests
therein or in respect thereof (the "THIRD PARTY LICENSE").
1.3 "CONFIDENTIAL INFORMATION" shall mean all non-public information
of a party and its Affiliates including, without limitation, information
relating to such party's technology, business strategy (either as then being
conducted or proposed to be conducted), know-how, marketing, suppliers,
customers, sources of materials, finances, accounting, business
relationships, employees, and trade secrets. Confidential Information shall
not include (i) any information that enters the public domain through no
fault of a party bound hereby, (ii) any information that is made available
to a party from a source other than the other party that is not bound by a
confidentiality agreement with the Company, or (iii) any information that is
developed by a party independently.
1.4 "INTELLECTUAL PROPERTY" means all of the following as they exist
in all jurisdictions throughout the world: (i) patents, patent applications
and other patent rights; (ii) trademarks,
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service marks, trade dress, Internet domain names, designs, whether
registered or unregistered; (iii) copyrights, including all source code,
object code and documentation related thereto; (iv) concepts, ideas,
designs, research, processes, procedures, techniques, methods, know-how,
data, mask works, discoveries, inventions (whether or not patentable), and
other proprietary rights.
2. LICENSE TERMS
2.1 The Licensors hereby grant Licensee a perpetual, non-exclusive,
worldwide right to use the Licensed Technology in any field of use.
2.2 The Licensors further grant Licensee the right to sublicense the
rights granted to Licensee hereunder solely as needed for Licensee to
license, sell, or distribute any bona fide products or services offered from
time to time by Licensee that may incorporate the Licensed Technology;
PROVIDED that no such sublicense shall be made if the portion of such
product or service being offered by Licensee that is not comprised of the
Licensed Technology is immaterial to such product or services offered.
2.3 The Licensors further grant Licensee the right to prepare
derivative works based upon, make copies of and/or distribute any software
that embodies the Licensed Technology solely to the extent necessary for
Licensee to exercise all of its rights granted by paragraphs 2.1 and 2.2 of
this section.
2.4 Any rights not expressly granted hereunder are reserved by
Licensors.
2.5 If and when Licensee seeks to use an Enhanced Technology, each
Licensor shall use its best efforts to obtain the right to sublicense that
component of the Enhanced Technology that is Third Party Technology under
the same terms and conditions as the Third Party License in respect of such
Third Party Technology and to sublicense such rights to the Third Party
Technology to (and permit the sublicense by) Licensee on the same terms as
the Third Party License. Notwithstanding anything to the contrary herein, in
the event that a Third Party License requires the payment of any non-cash
consideration by a Licensor, such requirement shall not apply to the
sublicense of such Third Party Technology to or by Licensee hereunder.
3. ROYALTY FEES.
3.1 FIRST TIME LICENSING FEES. The royalty fees payable for the use of
any Licensed Technology that, as of the time Licensee begins to use such
Licensed Technology, no Licensor has licensed to a Third Party, shall be
determined by the parties hereto based on a good faith mutually satisfactory
determination of the fair market value of Licensee's rights hereunder in
respect of such Licensed Technology, taking into account all attendant
circumstances that may affect such determination including, without
limitation, (i) the breadth of the intended field of usage, (ii) the
expected volume of usage and (iii) the expected term of usage (as so
determined, the "FAIR MARKET VALUE"). The royalty fee so determined shall
remain in effect for the duration of the term of this Agreement or until
such earlier time as any Licensor executes a license granting use of such
Licensed Technology to a Third Party, in which case Section 3.2 shall govern
the royalties payable by Licensee for the rights granted hereunder in
respect of such Licensed Technology.
3.2 FEES FOR OTHERWISE LICENSED TECHNOLOGY. The royalty fees payable
for the use of any Licensed Technology (including any Enhanced Technology)
that, as of the time Licensee begins to use such Licensed Technology, a
Licensor has licensed to a Third Party, shall be the lowest fee payable by
any Third Party for a comparable license with respect to such Licensed
Technology and shall be on terms no less favorable than the terms granted to
such Third Party; PROVIDED that in no event shall such royalty fees exceed
the Fair Market Value (determined in accordance with Section 3.1) of
Licensee's rights hereunder in respect of such Licensed Technology. To the
extent that any consideration to be paid by such Third Party is other than
in the form of cash, Licensee shall
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have the right to pay such consideration in cash in an amount equal to the
fair market value of such non-cash consideration as reasonably determined by
the parties hereto.
3.3 FIRST TIME ENHANCED TECHNOLOGY SUBLICENSE. Without duplication,
the royalty fees payable for use of any Enhanced Technology that, as of the
time Licensee has begun to use such Licensed Technology, no Licensor has
licensed to a Third Party, shall be the sum of (i) the royalties payable
under Section 3.1 in respect of the Owned Enhanced Technology plus (ii) the
royalty fee for use of the Third Party Technology provided under the terms
of the Third Party License in respect of such Third Party Technology. In the
event that a Third Party License requires consideration from any License in
the form of equity, barter of services or some other non-cash consideration,
such requirement shall not apply to Licensee.
4. OWNERSHIP OF INTELLECTUAL PROPERTY. Each party hereby covenants and
agrees that as between the parties, the Intellectual Property of the other party
are and shall remain the sole and exclusive property of that party and neither
party shall hold itself out as having any ownership rights with respect thereto.
5. USA SERVICES TO NEWCO. For so long as Newco is a controlled Affiliate
of USA, USA shall offer to provide to Newco the business services described on
Schedule A attached hereto; PROVIDED that such services are available from USA
or any of its controlled affiliates to third parties and only so long as USA has
the existing capacity to provide such services. Such services shall be provided
on terms and conditions that are determined through good faith negotiations
between USA and Newco; PROVIDED that, if such services are provided by USA to a
Third Party, then such terms and conditions shall be at least as favorable to
Newco as those offered by USA to such Third Party for comparable services.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each party hereto
represents and warrants to each other party hereto that (i) it has the right and
power to enter into and fully perform this Agreement and to make the commitments
it makes herein and to perform fully its obligations hereunder; (ii) it has
obtained all necessary licenses, permissions and consents required to license
Licensee to use and/or distribute the Licensed Technology or the Enhanced
Technology in accordance with the terms of this Agreement or as otherwise
necessary in connection with any of the transactions contemplated hereby.
7. INDEMNIFICATION. Each Licensor at its own expense, will indemnify,
defend and hold harmless USA and its Affiliates (other than Newco or any of its
subsidiaries) and their respective employees, officers, directors,
representatives and agents (each such party an "USA PARTY"), from and against
any and all claims, damages, liabilities, costs and expenses (including legal
expenses and reasonable counsel fees) brought against an USA Party arising from
a claim that any Licensed Technology, offered or provided by any Licensor for
use and/or distribution by Licensee infringes in any manner any copyright,
patent, trademark, trade secret or any other intellectual property right of any
third party, or that violates any law or regulation, or that otherwise violates
any rights of any person or entity, including, without limitation, rights of
publicity, privacy or personality, or has otherwise resulted in any consumer
fraud, product liability, tort, breach of contract, injury, damage or harm of
any kind to any third party; PROVIDED, HOWEVER, that in any such case: (i) USA
shall provide Newco with prompt notice of any such claim and (ii) USA shall
permit Newco to assume and control the defense of such action upon Newco's
written notice to Licensee of its intention to so indemnify, so long as Newco
does not enter into any settlement or compromise of any such claim which would
result in any liability to USA or its Affiliates without USA's prior written
consent. Newco will reimburse each USA Party and/or each of their respective
licensees on demand for any payment made at any time after the date hereof in
respect of any liability or claim in respect of which an USA Party is entitled
to be indemnified hereunder.
8. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally, upon a receipt of a
transmittal confirmation if sent by facsimile or like transmission, and on the
next Business Day when sent by Federal Express, Express Mail or
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similar overnight courier service to the parties at the following addresses or
facsimile numbers (or at such other address or facsimile number for a party as
shall be specified by like notice):
(i) If to Newco, to:
[NEWCO]
[____________]
[ ]
Attention: [ ]
Facsimile: [ ]
(ii) If to Styleclick, to:
Xxxxxxxxxx.xxx Inc.
[____________]
[ ]
Attention: [ ]
Facsimile:
(iii) If to ISN, to:
Internet Shopping Network LLC
[____________]
[____________]
Attention: [ ]
Facsimile: [ ]
(iv) If to Licensee, to:
c/o USA Networks, Inc.
[____________]
[____________]
Attention: [ ]
Facsimile: [ ]
9. ASSIGNMENT. Without the prior written approval of the other parties
hereto, no party hereto may assign its rights or obligations hereunder in whole
or in part to any Person; PROVIDED, that USA may assign any or all of its rights
and obligations hereunder to any of its controlled Affiliates. Any assignment in
violation of this Section 9 shall be null and void.
10. TERMINATION.
10.1 TERMINATION. USA or Newco may terminate this Agreement at any
time in the event of (a) a material breach by a Licensor or USA,
respectively, of any material term, representation or warranty which remains
uncured for sixty (60) days following written notice of such breach
delivered by the terminating party or (b) if Newco or USA, respectively,
becomes or is declared insolvent or bankrupt, is the subject of any
proceeding related to its liquidation or insolvency which is not dismissed
within ninety (90) calendar days or makes an assignment for the benefit of
creditors.
Notwithstanding any termination of this Agreement, this Section 10 and
Sections 4, 7, 8, 9, 11, 12 and 13 shall remain in full force and effect.
11. LIMITATION OF LIABILITY. THE LICENSORS HAVE PROVIDED AND USA HAS
ACCEPTED THE LICENSED TECHNOLOGY AND THE ENHANCED TECHNOLOGY AS IS AND WITHOUT
ANY REPRESENTATION OR WARRANTY WHETHER EXPRESS OR IMPLIED.
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12. CONFIDENTIALITY. Each party covenants to the other party that it will
not, either directly or indirectly through any officer, director, employee,
agent or otherwise, disclose this Agreement, any provisions of this Agreement
(except to the extent such disclosure is required by law to be disclosed or this
Agreement becomes generally available to the public other than as a result of a
disclosure in violation of this Agreement) nor any Confidential Information of
the other party either in whole or in part, without the prior written consent of
the other party.
13. MISCELLANEOUS.
13.1 This Agreement contains the entire understanding of the parties
hereto relating to the subject matter hereof and cannot be changed or
terminated except by an instrument signed by an officer of USA and an
officer of Newco. A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed as a waiver of
such term or condition for the future, or of any subsequent breach thereof.
All remedies, rights, undertakings, obligations and agreements contained in
this Agreement shall be cumulative and none of them shall be in limitation
of any other remedy, right, undertaking, obligation or agreement of either
party.
13.2 Notwithstanding anything to the contrary herein, the parties
hereto shall be deemed independent contractors and nothing herein shall be
construed as establishing a joint venture or partnership.
13.3 This Agreement shall be deemed entered into the State of New York,
and the validity, interpretation and legal effect of this Agreement shall be
governed by the laws of the State of New York applicable to contracts
entered into and performed entirely within the State of New York, with
respect to the determination of any claim, dispute or disagreement which may
arise out of the interpretation, performance, or breach of this Agreement.
13.4 The parties hereto are sophisticated and have had the opportunity
to be represented by lawyers throughout the negotiation of this Agreement.
As a consequence, the parties do not believe that the presumptions of any
laws or rules relating to the interpretation of contracts against the
drafter of any particular clause should be applied in this case and
therefore waive their effects.
13.5 This Agreement shall not become effective until executed by the
parties hereto.
13.6 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which, when taken together,
shall constitute one and the same instrument.
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ACCEPTED AND AGREED:
USA NETWORKS, INC.
By:
-----------------------------------------
Title:
INTERNET SHOPPING NETWORK LLC
By:
-----------------------------------------
Title:
[NEWCO]
BY:
-----------------------------------------
Title:
[NEWCO]
BY:
-----------------------------------------
Title:
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SCHEDULE A
- Fulfillment
- Teleservices
- Direct Selling Commercials
- Database Marketing
- Call Center Operations
- Internet Customer Care
- Any other services provided to third parties from time to time by USA's
Electronic Commerce and Services Division or any successor thereof
controlled by USA.
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