EXHIBIT 5
AMENDED AND RESTATED SERVICEMARK LICENSE AGREEMENT
THIS AMENDED AND RESTATED SERVICEMARK LICENSE AGREEMENT is made as of
this 27th day of July, 1996, by and between ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & Co., Incorporated,
an Illinois corporation ("MW"), and ValueVision International, Inc., a Minnesota
corporation ("VVI").
R E C I T A L S
A. MW and VVI are parties to a Servicemark License Agreement, dated as
of March 13, 1995 (the "Original Servicemark Agreement"). The Original Agreement
was entered into in connection with an Operating Agreement of even date herewith
(the "Original Operating Agreement"). The Original Servicemark Agreement granted
to VVI a license to use the "Marks" (as defined in the Original Servicemark
Agreement) in connection with VVI's television home shopping business.
B. Pursuant to a Restructuring Agreement of even date herewith (the
"Restructuring Agreement"), a wholly owned subsidiary of VVI will purchase
substantially all of the assets of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Direct, L.P., a Delaware
limited partnership which is a wholly owned subsidiary of MW ("MWD"). MWD has
been engaged in the direct-mail business.
C. Pursuant to the Restructuring Agreement, the Original Operating
Agreement is being amended and restated, effective as of the date hereof, to
take into account the acquisition of the assets of MWD and its entry into the
direct-mail business (the "Amended and Restated Operating Agreement").
D. As contemplated by the Restructuring Agreement, the parties desire
to amend and restate the Original Servicemark Agreement to reflect the
acquisition of the assets of MWD and the effects of the amendment and
restatement of the Original Operating Agreement. Capitalized terms which are not
otherwise defined herein shall have the meanings ascribed to them in the Amended
and Restated Operating Agreement.
A G R E E M E N T S
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the Original
Servicemark Agreement is hereby amended and restated to read as follows:
I. LICENSE GRANT
Section 1.1 The License. During the term of this Servicemark License
Agreement, and subject to the terms and conditions hereof, MW hereby grants to
VVI the non-exclusive (except to the extent set forth in the Amended and
Restated Operating Agreement), nontransferable, nonassignable and royalty-free
right and license, without the right to grant sublicenses to any party, to use
the "Marks", as hereinafter defined, solely in the conduct of the "Permitted
Business", as herein defined, throughout the "Territory", as hereinafter
defined. For the purposes hereof, the term "Marks" shall include any future
stylized versions of any of the Marks which MW (or, in the case of the
"Lechmere" ▇▇▇▇, Lechmere, Inc.) may hereafter adopt. In connection with VVI's
television home shopping business, MW authorizes any cable system, television
station, or other cable or broadcast television outlet to which VVI provides
programming in accordance with this Servicemark License Agreement to transmit
such programming to its subscribers or viewers. For purposes of this Servicemark
License Agreement:
(a) the capitalized term "Marks" shall mean, collectively and
individually as the context may require, the MW ▇▇▇▇, as herein
defined, and the "Auxiliary Marks", as herein defined;
(b) the capitalized term "MW ▇▇▇▇" shall mean the servicemark
"▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇", which is registered with the United States Patent
Office as No. 1,170,705;
(c) the capitalized term "Auxiliary Marks" shall mean the
servicemarks set forth on Exhibit A hereof, which may be amended from
time to time upon mutual agreement of the parties;
(d) the capitalized term "Permitted Business" shall mean
"Television Home Shopping" and "Catalog Activities", as such terms are
defined in the Amended and Restated Operating Agreement; and
(e) the capitalized term "Territory" shall mean (x), with
respect to Television Home Shopping, the United States of America, its
territories and possessions, and (y) with respect to Catalog
Activities, the world.
Notwithstanding anything to the contrary contained herein or in the Amended and
Restated Operating Agreement, MW acknowledges that because of the satellite
footprint, VVI's Television Home Shopping programming may be received outside of
the Territory in portions of Canada and Mexico, and MW further acknowledges and
agrees that VVI shall not be in violation hereof simply by virtue of the
reception of VVI's programming in such locations outside of the Territory.
Section 1.2 Use of the MW ▇▇▇▇. The MW ▇▇▇▇ shall be used in any case
in which VVI promotes to its viewers or customers the use of the Card for the
making of purchases. As agreed between MW and VVI, VVI shall display the Marks
in connection with Television Home Shopping for other purposes as well, such as
an acknowledgment that a programming segment has been produced "in cooperation
with" MW or as the name of a programming segment, such as a program entitled
"Electric Ave. & More".
II. OWNERSHIP
Section 2.1 VVI Acknowledgment. VVI acknowledges (i) that MW is the
owner of the entire right, title and interest to and in the Marks, including any
inurements thereto, subject to any licenses that MW has previously granted; and
(ii) the validity of MW's title to the Marks. VVI agrees not to challenge or
cooperate in challenging MW's rights in the Marks, and, in connection therewith,
VVI further covenants and agrees that it shall not do any of the following:
(a) use the Marks or marks confusingly similar thereto, in
connection with the packaging, use, advertising, sale or distribution
of any merchandise or services other than as permitted by this
Agreement in connection with the conduct of the Permitted Business;
(b) apply for or seek registration anywhere at any time of the
Marks or marks confusingly similar thereto or assist any third party in
doing so (it being agreed that, when called upon in writing by MW
within a reasonable time after MW first learns of the registration or
use by VVI of words or marks that are confusingly similar to the Marks,
VVI shall, at the election and expense of MW, either assign to MW in
writing any rights which it might have therein or release and cancel
any rights of record which it might have therein); or
(c) use the Marks or any components or any words or marks
confusingly similar thereto, in any corporate, partnership or trade
name.
Nothing in this Section 2.1 is intended to give MW greater rights to the Marks
than are otherwise available to it under the ▇▇▇▇▇▇ Act, or any other statutory
or common law relating to marks or tradenames.
Section 2.2 MW Acknowledgment. MW shall not use or claim any rights in
any ▇▇▇▇ used by VVI in connection with the Permitted Business, other than the
Marks, other marks to which MW has rights, and marks that are confusingly
similar to the foregoing.
III. LABELING
Section 3.1 Legends. VVI shall, to the extent reasonably specified by
MW, accompany the use of the Marks with such legends as may be reasonably
required or desired for protecting the Marks or other purposes relating to this
Amended and Restated Servicemark License Agreement.
Section 3.2 Specifications. VVI shall comply with MW's reasonable
written specifications as to VVI's affixation, colors, and means of displaying
the Marks. MW shall contemporaneously herewith provide VVI with MW's written
specifications as to VVI's affixation, colors and means of displaying the Marks.
MW shall provide VVI with not less than forty-five (45) days advance written
notice of any changes to said specifications. VVI may continue to follow prior
specifications during said forty-five (45) days or until VVI has consumed all
materials prepared in accordance with said prior specifications, whichever first
occurs; provided, however, that MW may purchase said materials from VVI at VVI's
cost for said materials. The cost of preparation of any items required to comply
with revised MW specifications which are not consumable shall be borne as agreed
by the parties.
IV. QUALITY CONTROL AND COVENANTS
OF VVI
Section 4.1 Standards. In connection with the use by VVI of the Marks
in the Permitted Business, VVI expressly recognizes the importance to MW of MW's
reputation and goodwill and of maintaining high, uniformly applied standards of
quality in the selection, provision, advertising, marketing and distribution of
merchandise. Accordingly, VVI agrees that it shall:
(a) offer customer service (via a toll-free telephone number
for Television Home Shopping) for use by customers during VVI's normal
business hours, which currently are 8:30 a.m. to 5:00 p.m. Minneapolis,
Minnesota time, Monday through Friday;
(b) on average, fulfill customer orders (other than so called
"reservation orders" where the delay in shipping is disclosed to the
customer as part of the programming) within ten (10) days of receipt,
except for merchandise that is drop-shipped or that is subject to back
order or other delay on an exception basis, or for which shipment will
be delayed due to a force majeure condition (as defined in the Amended
and Restated Operating Agreement) it being expressly understood and
agreed that for purposes of this Agreement, orders shall be deemed
fulfilled when they leave the warehouse/fulfillment facility and are
loaded onto trucks for delivery to customers;
(c) offer merchandise of a quality that is substantially
similar to that offered in the television home shopping industry and
the direct-mail marketing industry in general;
(d) provide customers the right to return merchandise
purchased from VVI for a refund, on terms generally consistent with the
return policies of VVI, as provided in the Amended and Restated
Operating Agreement;
(e) provide order placement and order tracing services on a
timely basis, consistent with industry practices in the television home
shopping industry and the direct-mail industry;
(f) provide courteous customer service with respect to
customer inquiries on a timely basis, consistent with industry
practices in the television home shopping industry and the direct-mail
industry;
(g) comply in all material respects with all applicable laws
and regulations which specifically relate to consumer rights or the
performance in any material respect of VVI's obligations under this
Amended and Restated Servicemark License Agreement, the Operating
Agreement, or the Receivables Sale and Purchase Agreement, as amended;
and
(h) not offer to take or accept orders for merchandise in
quantities that materially exceed the quantities that VVI can arrange
to promptly ship within a reasonable time after the order is taken
consistent with practices in the television home shopping industry and
the direct-mail industry unless the delay in shipping is disclosed to
the customer as part of the VVI programming, including without
limitation so called "reservation orders", or unless the delay in
shipping is caused by MW.
Section 4.2 Provision of Materials for Inspection. Upon written request
of MW, VVI will provide copies or samples of the following materials (the
"Materials") to MW for its prior review and approval, which approval shall not
be unreasonably withheld or delayed:
(a) proposed written materials for use in connection with
merchandise or services offered in programming, catalogs or other
materials that utilize any of the Marks; and
(b) all advertising and promotional material and scripts of
any kind intended for use in connection with programming or direct-mail
marketing that utilizes any of the Marks.
All Materials shall be deemed to be confidential information of VVI that is
subject to Section 16 of the Amended and Restated Operating Agreement,
including, without limitation, the provisos of Section 16(b)(i), (ii) and (iii).
Section 4.3 MW Objections to the Use of the Marks. In the event that MW
reasonably objects to any of the Materials, or the merchandise or services
offered on programming or through direct- mail that utilizes the Marks
("Objectionable Products"), MW will notify VVI in writing of the specific
objectionable portions of the documents or scripts or Objectionable Products,
and VVI agrees not to (i) use the objectionable portions of the documents or
scripts to market or offer for sale merchandise or services, or (ii) offer the
Objectionable Products, in programming or through sale by direct-mail that in
any way utilizes the Marks. MW agrees that its objections will not be arbitrary
or capricious, but will be based on MW's good faith belief that the Materials or
Objectionable Products could reasonably be believed to be detrimental to MW, its
reputation, image or goodwill.
Section 4.4 Right to Inspect. VVI hereby agrees, upon reasonable
request, to permit MW, at all reasonable times, to inspect (i) the merchandise
to be marketed or sold by VVI in connection with the Marks and (ii) the methods
of VVI relating to the standards described in Section 4.1 (the "Section 4.1
Standards"), and VVI also agrees that any such inspection may occur on the
premises of VVI. Any information obtained by MW as a result of such inspection
shall be deemed to be confidential information of VVI that is subject to Section
16 of the Operating Agreement, including, without limitation, the provisos of
Section 16(b)(i), (ii) and (iii).
Section 4.5 Certain Assurances. During the term of this Servicemark
License Agreement, VVI covenants and agrees to provide MW, upon MW's reasonable
request, reasonable assurances of its material compliance with the Section 4.1
Standards. During the term of this Agreement VVI will not use or promote the use
of any credit cards or facilities other than the Card and other facilities
widely accepted by retailers generally in the market in question (including, but
not limited to, American Express, MasterCard, VISA, and Discover, but excluding
any such card or facility that uses the ValueVision trade name or servicemark,
or any other trade name or servicemark registered or controlled by VVI or its
affiliates, except as may be permitted by the Receivables Sale and Purchase
Agreement), provided that a Permitted ValueVision Card Use will be permitted (i)
during the term of the Receivables Sale and Purchase Agreement to the extent
permitted by the Receivables Sale and Purchase Agreement, and (ii) at any time
after the termination of the Receivables Sale and Purchase Agreement.
Section 4.6 Governmental Actions. During the term of this Agreement,
VVI hereby agrees that it will promptly provide MW copies of all complaints or
inquiries received by VVI from any governmental agency relating to or in
connection with the merchandise or services offered and sold in programming or
through direct-mail that in any way utilizes the Marks, including those relating
to any and all advertising or the terms and conditions with respect to the sale
of such merchandise or services to the public, provided that copies of such
complaints that are received from a governmental agency in response to isolated
customer complaints need only be so provided if they are material. VVI agrees
that, except to the extent a response is required by a governmental agency or by
applicable law, regulation or policy before it is reasonably possible to obtain
MW's comments or approval, it will not respond to any such complaint or inquiry
without submitting such response to MW for (i) MW's comments, not to be
unreasonably delayed, on the form and substance of VVI's response, and (ii) MW's
approval, not to be unreasonably withheld or delayed, of any response that
specifically relates to MW's Products, MW's Services, the Card or the Marks. In
no event shall VVI enter into any settlement agreement, consent decree, or other
arrangement with any governmental agency specifically relating to MW's
merchandise, services, credit card or Marks without the express written consent
of MW, which shall not be unreasonably withheld.
V. REGISTRATION, MAINTENANCE, POLICING AND PROTECTION
Section 5.1 Infringements or Challenges to the Marks. VVI shall
promptly advise MW of any infringements or challenges to its use of the Marks or
package simulations that shall come to VVI's attention. MW agrees to prosecute
any infringer of the MW ▇▇▇▇, or any infringer of any of the Auxiliary Marks if
such infringement of an Auxiliary ▇▇▇▇ is reasonably likely to adversely affect
the Permitted Business. VVI will not ▇▇▇ any such infringer either in its own or
in the name of MW. Any recovery from a proceeding attributable to infringement
by a third party using a ▇▇▇▇ confusingly similar to any of the Marks, whether
by judgment or settlement, shall be paid to MW, except to the extent that such
damages specifically arise from the lost profits or similar damages to the
Permitted Business and the judgment entered specifically allocates a portion of
the judgment, after recovery of all of MW's costs and expenses, to VVI's lost
profits or damages to the Permitted Business. VVI shall not enter into a
settlement regarding an infringement involving the use of the Marks without the
prior written approval of MW. MW will obtain VVI's consent, not to be
unreasonably withheld or delayed, to any such settlement if it permits a
continuing use by the alleged infringer of the Marks that could reasonably have
an adverse impact on VVI's rights under this Amended and Restated Servicemark
License Agreement.
Section 5.2 Control of Litigation. To the extent that MW initiates any
lawsuit to ▇▇▇▇▇ such infringement, as described in Section 5.1, MW shall
control such litigation, and MW shall pay all of the costs and expenses of said
lawsuit, and shall have the right to select counsel with respect thereto. VVI
agrees to cooperate in any such litigation, at MW's expense, to the extent
reasonably required by MW.
VI. TERM AND TERMINATION
Section 6.1 Term. The Servicemark License Agreement shall take effect
upon the date first written above, and shall remain in effect until the date of
termination of the Amended and Restated Operating Agreement.
Section 6.2 Termination of Use of the Marks. In the event of the
termination of this Amended and Restated Servicemark License Agreement, VVI
shall forthwith cease to use, and not thereafter resume the use, of the Marks or
any confusingly similar marks, alone or in combination with any letters, other
words, or designs, in any manner.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Servicemark License Agreement effective as
of the date first set forth above.
VALUEVISION INTERNATIONAL, INC.,
a Minnesota corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its Chairman and Chief Executive Officer
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & CO., INCORPORATED,
an Illinois corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its Executive Vice President
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Lechmere, Inc., a wholly owned subsidiary of MW, joins in the foregoing
agreement for the purposes of granting a license to the ▇▇▇▇ "Lechmere", and any
stylized versions hereof which are hereafter adopted by Lechmere, Inc., subject
to all of the terms and conditions of this Agreement.
LECHMERE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its: Secretary
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EXHIBIT A
AUXILIARY MARKS
Auto Express
Electric Ave.
Electric Ave. & More
Gold N' Gems
Home Ideas
Kids Store
Lechmere
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Direct
Romantic Moods
Rooms & More
