EXHIBIT 10.17
FORM OF 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 ftd.com inc.
(“ftd.com” 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 (1-800-SEND-FTD) and its Web site (www.ftd.com)
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 “ftd.com Affiliate” means a
Person directly or indirectly controlled by, controlling or under
common control with ftd.com, other than FTDI or any FTDI
Affiliate.
1.3 “ftd.com 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 ftd.com pursuant to
Section 3.3. 1.4 “ftd.com 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 ftd.com or any ftd.com
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 ftd.com 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 ftd.com;
(c) two years after termination of this
Agreement, if this Agreement is terminated by ftd.com 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 ftd.com elects to terminate or not to renew the Florists
Online Hosting Agreement, dated as of the date hereof, between FTDI
and ftd.com (the “FOL Agreement”), nothing in this
Agreement shall be deemed to limit in any way the right of FTDI (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 ftd.com 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 licensing agreements and
(b) programming and programming rights, whether on film, tape or
any other medium.
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1.9 “Internet Site” means the
location on the Internet’s World Wide Web known as
www.ftd.com.
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 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 Licensee’s
Internet Site and 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
ftd.com or an ftd.com Affiliate and engages in an ftd.com
Prohibited Business.
1.15 “Telephone Number” means the
toll-free telephone number 1-800-SEND- FTD.
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 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 in this Agreement, this
Section 2.1 shall not be construed to prohibit the use of any
Licensed Intellectual Property by Licensor, its divisions, business
units, affiliates, subsidiaries and licensees.
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
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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;
(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;
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(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 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
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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 Mark”), Licensor shall have the
right (but not the obligation) to terminate this Agreement, or any
portion of this Agreement that applies to the Abandoned Mark, and
the rights granted hereunder to Licensee in connection with and
solely to the extent related to the license of such Abandoned Mark
upon 90 days written notice to Licensee and any license in the
Abandoned Mark shall revert to Licensor. One year of continuous
non-use by the Licensee of an Abandoned Mark shall constitute
abandonment for purposes of this Agreement.
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 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 t
