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 technology proprietary to any
of the Licensors and 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 except for technology developed by
any Licensor under a contract with a third party pursuant to which such
Licensor has assigned or will assign such technology to such third party.
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, 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; provided that a Licensor shall not be
obligated to use its best efforts to obtain the right to sublicense any
Enhanced Technology that is licensed by the Licensor solely for office
management purposes. 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.
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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 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 (or in the case of future grants, will have obtained by
the time of such grant) 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
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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 communica-tions 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 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: [_____________]
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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 and
PROVIDED FURTHER that Newco may assign its rights provided by Section 5 to a
controlled affiliate of Newco. 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, 13 and 14 shall remain in full force and
effect.
11. LIMITATION OF WARRANTY. EXCEPT FOR THOSE EXPRESS REPRESENTATIONS
AND WARRANTIES PROVIDED IN SECTION 6 OF THIS AGREEMENT, NEITHER PARTY MAKES
ANY, AND BOTH PARTIES HEREBY EXPRESSLY DISCLAIM, ALL OTHER REPRESENTATIONS
AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES AND
ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR
USE UNDER THE LAWS OF ANY JURISDICTION.
12. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, EXCEPT FOR THE INDEMNIFICATION AND CONFIDENTIALITY
OBLIGATIONS SET FORTH HEREIN, NEITHER PARTY SHALL BE LIABLE UNDER THIS
AGREEMENT OR OTHERWISE FOR ANY FORM OF CONSEQUENTIAL, EXEMPLARY, SPECIAL,
INCIDENTAL OR PUNITIVE DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
13. 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.
14. MISCELLANEOUS.
14.1 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.
14.2 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.
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14.3 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.
14.4 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.
14.5 This Agreement shall not become effective until executed by the
parties hereto.
14.6 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.
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.
