Exhibit 10.4
EXECUTION COPY
BRANDING AGREEMENT
between
VERIZON LICENSING
COMPANY
and
IDEARC MEDIA CORP.
November 17,
2006
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BRANDING AGREEMENT
This Branding Agreement (the “
Branding Agreement ”), dated as of November 17,
2006, is between Verizon Licensing Company, a Delaware corporation
(“ Licensor ”), and Idearc Media Corp., a
Delaware corporation (“ IMC ” or “
Licensee ”) (Licensor and Licensee being hereinafter
referred to individually as a “ Party ” and
collectively as the “ Parties ”).
WHEREAS, Licensor is the owner of,
or has a valid license to use and sublicense the use of, the
trademarks, service marks, domain names, slogans, geographical
indications, trademark designs, logos and trade names identified on
Schedules A, B and C attached hereto and hereby made a part of this
Branding Agreement (the “ Licensed Marks
”);
WHEREAS, Verizon Communications Inc.
(“ Parent ”) and Idearc Inc. (“
Spinco ”) have entered into the Distribution
Agreement, dated as of November 13, 2006 (the “
Distribution Agreement ”), pursuant to which (
i ) Parent shall separate the Spinco Assets (as defined
in the Distribution Agreement) from the Verizon Assets (as defined
in the Distribution Agreement), ( ii ) in exchange for
the contribution to Spinco, directly or indirectly, of the Spinco
Assets, Spinco shall issue to Parent the Spinco Common Stock (as
defined in the Distribution Agreement) and distribute to Parent the
Spinco Exchange Debt (as defined in the Distribution Agreement) and
cash and ( iii ) Parent shall distribute all of the
issued and outstanding shares of Spinco Common Stock to
Parent’s stockholders;
WHEREAS, IMC, Parent and Verizon
Services Corp. (“ Verizon ”) have entered in to
Publishing Agreement, dated as of the date hereof, (the “
Publishing Agreement ”) pursuant to which IMC is
willing to fulfill the Publishing Obligations (as defined in the
Publishing Agreement) of the Parent on the terms and conditions set
forth in the Publishing Agreement;
WHEREAS, for a limited period of
time following the closing of the transactions described in the
Distribution Agreement (such date, the “ Closing Date
,” and such event, the “ Closing ”),
Licensee desires to obtain a nonexclusive, limited license to phase
out use of the Licensed Marks identified in Schedule A (the “
Licensed Schedule A Marks ”) in connection with the
conduct of the Business (as defined below);
WHEREAS, following the Closing,
Licensee desires to obtain an exclusive, limited license to
continue to use the Licensed Marks identified in Schedule B (the
“ Licensed Schedule B Marks ”) in connection
with the printing and distribution of the Primary Directories
(other than Internet Services) and a nonexclusive, limited license
to continue to use the Licensed Schedule B Marks in connection with
the printing and distribution of Special Directory Products
(defined below);
WHEREAS, following the Closing,
Licensee desires to obtain a nonexclusive, limited license to
continue to use the Licensed Marks identified in Schedule C (the
“ Licensed Schedule C Marks ”) in connection
with the conduct of portions of the
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Internet Services in the delivery of Directory
Products in electronic media; and
WHEREAS, in connection with and
furtherance of, and as consideration for, the performance by
Licensee of its obligations under the Publishing Agreement,
Licensor is willing to grant Licensee the aforementioned limited
licenses to use the Licensed Marks in connection with the conduct
of the Business but only for so long and to the extent that
Licensee performs the Publishing Obligation pursuant to the
Publishing Agreement, and upon the following terms and
conditions.
AGREEMENT
In consideration of the mutual
promises contained herein and intending to be legally bound, the
Parties agree as follows:
Capitalized terms used but not
defined herein have the meanings assigned to them in the
Intellectual Property Agreement (as defined below). Other
capitalized terms, as used herein, have the meanings set forth
below or in the body of this Branding Agreement.
“ Activity Default
Notice ” is defined in Section 11(d)(v).
“ Affiliate ” is
defined in the Publishing Agreement.
“ Business ”
means the business of publishing and providing directory products
and services, consisting principally of searchable (e.g., by
alphabet letter or category) multiple wireline telephone listings
and classified advertisements primarily of Persons located in the
Territory that are targeted primarily at and distributed primarily
to end users located in the Territory in tangible media (e.g.,
paper directories), electronic media (e.g., Internet) and digital
media (e.g., PDA download) and soliciting and entering into
agreements with advertisers to place advertising in the foregoing
directory products; provided, however, the foregoing shall not
include directory products and services comprised primarily or
substantially of wireless telephone listings.
“ Business Day ”
means a day (excluding Saturday and Sunday) on which banks
generally are open for the transaction of business in New York, New
York.
“ Closing ” is
defined in the Recitals of this Branding Agreement.
“ Closing Date ”
is defined in the Recitals of this Branding Agreement.
“ Directory Product
” means a telephone directory product consisting principally
of searchable (e.g., by alphabet letter or category of products or
services) multiple wireline telephone listings and/or classified
advertisements that is delivered or otherwise made available to end
users in tangible media (e.g., paper directories, CD-ROM) or
digital media (e.g., PDA download).
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“ Expanded License Area
” or “ ELA ” is defined in
Section 2(b)(iii) of this Branding Agreement.
“ ILEC ” means an
incumbent local exchange carrier.
“ IMC ” is
defined in the Preamble of this Branding Agreement.
“ Intellectual Property
Agreement ” means the Intellectual Property Agreement
dated as of the Closing by and between Verizon Services Corp. and
Spinco.
“ Internet Services
” means the marketing, advertising, sale and/or provision of
services offered by Company as of the Effective Date, delivered
over wireless networks to the handsets of end users, which are
known as “SuperPages On the Go” services.
“ Licensee ” is
defined in the Preamble of this Branding Agreement.
“ Licensed Marks
” is defined in the Recitals of this Branding
Agreement.
“ Licensed Schedule A
Marks ” is defined in the Recitals of this Branding
Agreement.
“ Licensed Schedule B
Marks ” is defined in the Recitals of this Branding
Agreement.
“ Licensed Schedule C
Marks ” is defined in the Recitals of this Branding
Agreement.
“ License Term ”
means the Section 2(a) License Term, the Section 2(b)
License Term, and/or the Section 2(c) License Term, as
applicable.
“ Licensor ” is
defined in the Preamble of this Branding Agreement.
“Non-Compete
Agreement” means
the Non-Competition Agreement entered into as of the date hereof
between Parent and IMC.
“ Person ” is
defined in the Publishing Agreement.
“ Primary Directories
” is defined in the Publishing Agreement. Without limiting
the foregoing, Primary Directories shall also include: (i) any
Directory Product Licensee is required to Publish pursuant to the
terms of the Publishing Agreement; and (ii) any underlay or
overlay (as such terms are generally used in the telephone
directories publishing business) print Directories Products that
cover all or a portion of a geographic area covered by a Primary
Directory.
“ Publish ” or
“ Publisher ” is defined in the Publishing
Agreement.
“ Publishing Agreement
” is defined in the Preamble of this Branding
Agreement.
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“ Related Agreements
” means the Intellectual Property Agreement, the Software
Support and License Agreement, the Publishing Agreement, the
Branding Agreement and the Transition Services
Agreement.
“ Restricted Activity
Default ” is defined in Section 11(d)(v).
“ Section 2(a) License
” is defined in Section 11(a) of this Branding
Agreement.
“ Section 2(a) License
Term ” is defined in Section 11(a) of this Branding
Agreement.
“ Section 2(b) License
” is defined in Section 11(b) of this Branding
Agreement.
“ Section 2(b) License
Term ” is defined in Section 11(b) of this Branding
Agreement.
“ Section 2(c) License
” is defined in Section 11(c) of this Branding
Agreement.
“ Section 2(c) License
Term ” is defined in Section 11(c) of this Branding
Agreement.
“ Service Area(s)
” is defined in the Publishing Agreement.
“ Special Directory
Products ” means Directory Products (other than Primary
Directories) (i) in any Service Area of a type in existence,
or substantially similar to those in existence, as of the Closing
Date in such Service Area, (ii) in any geographic area in
which a Subsidiary of Parent is not the ILEC and Licensee is
Publishing Directory Products as of the Closing Date, of a type in
existence, or substantially similar to those in existence, as of
the Closing Date in such geographic area (as set forth on Schedule
A-1), (iii) in the geographic areas set forth in Schedule A-2
(attached hereto) of a type in existence, or substantially similar
to those in existence, as of the Closing Date in any area set forth
on Schedule A-1, provided that any such geographic area(s) shall be
removed from Schedule A-2 to the extent Company has not published a
tangible media Directory Product in substantially all of such
geographic area using the Licensed Schedule B Marks within eighteen
(18) months of the Effective Date, (iv) in an Expanded
License Area pursuant to the terms of Section 2(b)(iii), or
(v) as may be approved in writing by Licensor for designated
geographic areas during the term of this Branding
Agreement.
“ Spinco ” is
defined in the Recitals of this Branding Agreement.
“ Standards ” is
defined in Section 4 of this Branding Agreement.
“ Subsidiary ”
means, with respect to any Person, any Person in which such Person
has a direct or indirect equity or ownership interest in excess of
50%.
“ Telecommunications
Services ” is defined in Section 11(d)(v) of this
Branding Agreement.
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“ Territory ”
means (A) with respect to tangible media Directory Products,
the then current Service Area(s); and (B) with respect to
digital media Directory Products and Internet Services, the United
States of America, excluding its territories or possessions, in
each case as modified, from time to time, pursuant to:
(i) Section 3.9 of the Publishing Agreement;
(ii) any partial termination/cancellation pursuant to
Section 11 hereof of the licenses granted hereunder;
(iii) any termination of the Non-Competition Agreement
pursuant to Section 4.2(e) of the Non-Compete Agreement and
(iv) any termination/cancellation of a Service Area(s)
pursuant to Section 6.2(e) of the Publishing
Agreement.
“ Transition Services
Agreement ” means the transition services agreement dated
as of between Verizon Information Technology LLC and
Spinco.
“ Video Services
” is defined in Section 11(d)(v) of this Branding
Agreement.
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2.
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Grant of
Licenses and Rights .
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(a)
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Subject to
previously granted rights and licenses, if any, and subject to the
terms and conditions of this Branding Agreement (including the
Section 2(b) License and Section 2(c) License), and
effective upon the Distribution (as defined in the Distribution
Agreement), Licensor hereby grants to Licensee and to
Licensee’s Subsidiaries a limited, personal, royalty-free,
fully paid-up, nonexclusive and nontransferable right and license
for Licensee and its Subsidiaries to use the Licensed Schedule A
Marks in connection with the conduct of the Business (which, solely
for purposes of this Section 2(a), will include all products
and services sold by Licensee which, as of the Effective Time, use
the Licensed Schedule A Marks, wherever sold by the Licensee in the
United States Time) during the period of time set forth in this
Section 2(a):
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(i)
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Licensee shall cease and shall
cause the Subsidiaries of the Licensee to cease, immediately, but
not later than sixty (60) calendar days after the Closing
Date, any and all use of the Licensed Schedule A Marks in any
fashion or combination on stationery, contracts, purchase orders,
agreements and other business forms and writings which could result
after the Closing Date in a legal commitment of or which could
reasonably result in causing any Person to believe it had obtained
a legal commitment from any of Verizon Communications Inc. or any
of its Affiliates. Licensee shall cease and shall cause the
Affiliates of Licensee to cease, immediately after the Closing
Date, any use of the Licensed Schedule A Marks in any fashion or
combination, as well as of any other designation indicating
affiliation after the Closing Date with any of Verizon
Communications Inc. or any of its Affiliates, other than as
expressly permitted by Sections 2(b) and 2(c) hereof. As promptly
as possible, but no later than within thirty (30) calendar
days after the Closing Date, Licensee shall notify, in writing,
all
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customers, suppliers and
financial institutions having current business relationships with
IMC or its Affiliates that IMC has become a separate entity and is
no longer affiliated with Licensor or any of its Affiliates.
Notwithstanding the foregoing, on the Closing Date IMC shall file
the forms and related documents required to change the name of IMC
to a name that does not include any Licensed Schedule A
Marks;
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(ii)
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After the
Closing, except as otherwise expressly permitted hereunder, all
Licensed Schedule A Marks on all other materials in the possession
or under the control of Licensee shall be replaced, removed or
covered-over by Licensee, at Licensee’s expense, as soon as
possible, but in no event later than one hundred eighty
(180) calendar days after the Closing Date for items existing
as of the Closing Date with Licensed Schedule A Marks affixed to
them that are used by Licensee and its Subsidiaries in their
operation of the Business, including, without limitation, use of
Licensed Schedule A Marks on buildings, vehicles, equipment, kits,
signs, billboards, manual covers and notebooks; provided, however,
that the Licensee and its Subsidiaries shall have a period of up to
nine (9) months to remove Licensed Schedule A Marks from signs
(including signs on buildings and vehicles) to the extent Licensee
and its Subsidiaries undertake efforts immediately to remove such
Licensed Schedule A Marks from such signs. In addition, Licensee
and its Subsidiaries shall not be deemed to have violated this
Branding Agreement or to have infringed the rights of Licensor or
its Affiliates by reason of: (A) the appearance of the
Licensed Schedule A Marks in or on any archival business records or
in or on any third party’s publications, marketing materials,
brochures, equipment or products that IMC or its Subsidiaries
distributed in the ordinary course of business prior to the Closing
Date, and that generally are in the public domain, or any other
similar uses by any such third party over which the Licensee or its
Subsidiaries have no control; provided that Licensee and its
Subsidiaries take reasonable steps to notify such third party of
such usage of which it becomes aware, or (B) the use, provided
that such use shall exist for no more than one (1) year after
the Closing Date, by the Licensee or its Subsidiaries of the
Licensed Schedule A Marks in a non-trademark manner for purposes of
conveying to customers or the general public that the name of their
businesses have changed or the change in ownership;
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(iii)
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Subject to Section 2(a)(i)
above, from and after the Closing, Licensee shall not use or
include, and Licensee shall cause its Subsidiaries not to use or
include, the Licensed Schedule A Marks as or in their corporate,
popular or trade names, or in any advertising or publications
placed or published after the Closing
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Date. Any such advertising and
publications placed or published on or before the Closing shall be
discontinued and not be renewed after the Closing; provided that
with respect to directory publications that are in production and
cannot be reasonably modified to delete the applicable Licensed
Schedule A Marks, that have already been distributed by IMC to end
users, or that are in the process of being distributed by IMC to
end users, Licensee shall not be required to discontinue any such
directory publication until the end of the scheduled term of such
directory publication (which for the purposes of this proviso shall
be deemed to be no later than eighteen (18) months from the
Closing Date); and
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(iv)
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From and after
the Closing, Licensee shall not use or include, and Licensee shall
cause the Subsidiaries of the Licensee not to use or include, the
Licensed Schedule A Marks in the sale or offer for sale of any
products or services, except as otherwise provided in subsections
2(a)(i), 2(a)(ii) and 2(a)(iii) above.
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(b)
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Subject to
previously granted rights and licenses, if any, and subject to the
terms and conditions of this Branding Agreement and effective upon
the Closing, Licensor hereby grants to Licensee and to its
Subsidiaries the following licenses:
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(i)
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a personal,
royalty-free, fully paid-up, (A) exclusive and nontransferable
(except and to the extent expressly permitted pursuant to
Section 16 below) right and license to use the Licensed
Schedule B Marks in connection with the conduct of the Business in
the Territory (excluding digital media Directory Products and
Internet Services) by IMC and its Subsidiaries during the
Section 2(b) License Term of this Branding Agreement; and
without limiting the grant of rights pursuant to Sections 2(b) and
2(c), (B) nonexclusive and nontransferable (except as
expressly permitted pursuant to Section 16 below) right and
license to use the Licensed Schedule B Marks in connection with the
publishing, printing and distribution of Special Directory Products
and the distribution of digital media Directory Products, in each
case only in the specified geographic area in which such Special
Directory Product and the Territory in which such digital media
directory Product is authorized to be Published and for the license
term specified below;
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(ii)
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a personal, royalty-free, fully
paid-up, (A) exclusive and nontransferable (except as
expressly permitted pursuant to Section 16 below) right and
license to use the Licensed Schedule B Marks in connection with the
solicitation of and sale to Persons solely located in or solely
conducting business in the Territory of classified advertising and
telephone listings for inclusion in tangible media Directory
Products in the Territory during the Section 2(b)
License
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Term; and (B) nonexclusive
and nontransferable (except as expressly permitted pursuant to
Section 16 below) right and license to use the Licensed
Schedule B Marks in connection with the solicitation of and sale to
(1) Persons located in or conducting business in the Territory
of classified advertising and telephone listings for inclusion in
Directory Products during the Section 2(b) License Term; and
(2) Persons of classified advertising and telephone listings
for inclusion in Special Directory Products during the shorter of
the term approved for such Special Directory Products or the use of
Licensed Schedule B Marks on such Special Directory
Products;
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(iii)
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during the term of this Branding
Agreement and provided Licensee and its Affiliates are in full
compliance with the terms of this Branding Agreement, Licensee may
request and, subject to the following, Licensor shall grant,
additional personal, royalty-free, fully paid-up, non-exclusive
rights and licenses to Licensee to use the Licensed Schedule B
Marks in connection with Special Directory Products in a specified
geographic area of the United States of America (excluding its
territories, possessions and the State of Hawaii) other than
(A) any current or future Service Area, (B) any
geographic area set forth on Schedule A-1 or Schedule A-2,
(C) any geographic area as to which a previously granted
License to Licensee was terminated, cancelled or expired, or
(D) any geographic area in which Licensor or its Affiliates
has announced, commenced or developed definitive business plans to
provide services as a LEC and to provide any Directory Products
using any of the Licensed Schedule B Marks, provided that this
exception shall terminate if Licensor or its Affiliates have not
commenced operations as a LEC within eighteen (18) months of
the date notice was given to Licensor as provided below (any such
specified geographic area, other than the excluded geographic
area(s), an “Expanded License Area” or
“ELA” ); such Expanded License Area Licenses
shall, unless sooner terminated/cancelled, expire on the thirtieth
(30 th ) anniversary of the Effective
Date, and shall be subject to the same terms and conditions of this
Branding Agreement as Licenses granted for the markets listed on
Schedule A-2, including the termination/cancellation provisions,
provided that Licensee shall provide notice to Licensor of its
request for license not less than ninety (90) days prior to
commencing any marketing, sales, or other activity involving the
use of the Licensed Schedule B Marks in the proposed ELA and the
ELA License shall automatically be granted thirty (30) days
after delivery of such notice unless Licensor has notified Licensee
that the conditions for receipt of an ELA License have not been
met, further provided that any ELA License granted hereunder shall
automatically terminate if Licensee or its Affiliate has not
published a tangible media Special
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Directory Product in
substantially all of such ELA using the Licensed Schedule B Marks
within eighteen (18) months of the date notice was first given
to Licensor; and, notwithstanding any other term or condition of
this Branding Agreement, an Expanded License Area License shall
automatically terminate/cancel with respect to any Expanded License
Area in which Verizon or any of its Affiliates becomes a LEC by
merger, acquisition of assets or stock or otherwise and is subject
to Publishing Obligations with respect to such ELA, such
termination/cancellation becoming effective on the eighteenth
(18th) month anniversary of the occurrence of such event;
and
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(iv)
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notwithstanding
the provisions of Section 2(a), a personal, royalty-free,
fully paid-up, nonexclusive and nontransferable (except as
expressly permitted pursuant to Section 16 below) right and
license, during the Section 2(b) License Term, to identify
Licensee (including on business cards, correspondence, order forms,
approved signage for Primary Directories or Special Directory
Products, customer bills and sales collateral, provided they
include, respectively, billing and sales collateral for Primary
Directories or Special Directory Products bearing Licensed Schedule
B Mark or Licensed Schedule C Mark) as “the official
publisher of Verizon print directories” in a form and content
approved by Licensor pursuant to Section 4.
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(c)
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Subject to
previously granted rights and licenses, if any, and subject to the
terms and conditions of this Branding Agreement and effective upon
the Closing, Licensor hereby grants to Licensee and to its
Subsidiaries the following licenses:
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(i)
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a personal,
royalty-free, fully paid-up, nonexclusive and nontransferable
(except and to the extent expressly permitted pursuant to
Section 16 below) right and license to use the Licensed
Schedule C Marks in connection with the marketing, advertising,
sale and provision of the Internet Services by IMC and its
Subsidiaries during the Section 2(c) License Term;
and
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(ii)
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a personal,
royalty-free, fully paid-up, nonexclusive and nontransferable
(except and to the extent expressly permitted pursuant to
Section 16 below) right and license to use the Licensed
Schedule C Marks in connection with the solicitation of and sale
primarily to Persons located in or conducting business in the
Territory or the then current geographic areas covered by the
Special Directory Products of classified advertising and telephone
listings for inclusion in the Internet Services of the Business
during the Section 2(c) License Term.
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(d)
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Licensee shall
have the right to grant sublicenses during the License Term of its
licensed rights with respect to the Licensed Schedule B Marks and
Licensed Schedule C Marks to its Subsidiaries, resellers, agents,
distributors and dealers in connection with the conduct solely in
the Territory and the then current geographic areas covered by the
Special Directory Products of the applicable portion of the
Business of Licensee and Licensee’s Subsidiaries during the
applicable License Term; provided that:
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(i)
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Licensee shall
not grant any other sublicense without the prior written approval
of Licensor, which approval shall not be unreasonably withheld or
delayed;
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(ii)
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Such
sublicenses shall be in writing, shall be subject to compliance
with the terms of this Branding Agreement, shall provide for a term
not to exceed the applicable License Term, shall terminate when
this Branding Agreement or the applicable license terminates, is
cancelled or expires, whichever occurs first, and shall prohibit
further sublicensing without Licensor’s prior written
consent;
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(iii)
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Such
sublicenses shall provide that should the sublicensee or any of its
Affiliates become bankrupt or file a petition in bankruptcy, or
should the business of any such entity be placed in the hands of a
receiver, assignee or trustee for the benefit of creditors, whether
by voluntary act of the entity or otherwise, all licenses and
rights granted pursuant to such sublicense to such entity
(including its Affiliates, if any) shall terminate
automatically;
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(iv)
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Such
sublicenses do not include any rights or licenses under the
Licensed Schedule A Marks; and
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(v)
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Licensee shall
not have the right to grant any sublicenses to any provider of
Telecommunication Services or Video Services.
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(e)
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Licensee may
sublicense the Licensed Schedule B Marks and Licensed Schedule C
Marks to any Person (other than any provider of Telecommunication
Services or Video Services) with which Licensee forms a joint
venture, marketing alliance, co-branding alliance or strategic
alliance, in each instance solely to permit such joint venture,
marketing alliance, co-branding alliance or strategic alliance to
market, advertise, sell and provide products and services in the
conduct solely in the Territory of the applicable portion of the
Business by Licensee and Licensee’s Subsidiaries in
connection with the Licensed Schedule B Marks and Licensed Schedule
C Marks; provided that:
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(i)
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Licensee shall
not grant such sublicenses without the prior written approval of
Licensor, which approval shall not be unreasonably withheld or
delayed;
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(ii)
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Such
sublicenses shall be in writing, shall be subject to compliance
with the terms of this Branding Agreement, shall provide for a term
not to exceed the applicable License Term, shall terminate when
this Branding Agreement or the applicable license terminates, is
cancelled or expires or when the joint venture or alliance
terminates, is cancelled or expires, whichever occurs first, and
shall prohibit further sublicensing without Licensor’s prior
written consent;
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(iii)
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Such
sublicenses shall provide that should the sublicensee, any Person
in such joint venture or alliance, or any Affiliates of any of the
foregoing become bankrupt or file a petition in bankruptcy, or
should the business of any such entity be placed in the hands of a
receiver, assignee or trustee for the benefit of creditors, whether
by voluntary act of the entity or otherwise, all licenses and
rights granted pursuant to such sublicense to such entity
(including its Affiliates, if any) shall terminate automatically;
and
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(iv)
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Such
sublicenses do not include any rights or licenses under the
Licensed Schedule A Marks.
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(f)
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Except and to the extent
expressly permitted pursuant to Sections 2(b) and 2(c) hereof,
Licensee, its Subsidiaries and Licensee’s
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