EXHIBIT 10(a)
AMENDED AND RESTATED
INTERTAN ADVERTISING AGREEMENT
This Agreement ("Agreement") is by and between InterTAN, Inc., a Delaware
corporation, ("InterTAN") and its subsidiaries, InterTAN Canada Ltd. and
InterTAN Australia Ltd. (InterTAN and such subsidiaries being collectively
referred to herein as "INTERTAN GROUP"), and Tandy Corporation, a Delaware
corporation:
WHEREAS, INTERTAN GROUP has requested TANDY to authorize the limited use of
certain Materials (as hereinafter defined) and Marks (as hereinafter
defined) developed by or for TANDY's Radio Shack Division during the term
of this Agreement, and
WHEREAS, INTERTAN GROUP hereby acknowledges TANDY's ownership of the
trademarks and service marks (as the case may be) and all variations
thereof: "Radio Shack Gift Express", "The Repair Shop at Radio Shack",
"You've Got Questions! We've Got Answers!" "Radio Shack Unlimited", "Radio
Shack Express" and "RadioShack Select" (hereinafter called "Marks"); and
WHEREAS, INTERTAN GROUP also hereby acknowledges TANDY's ownership
1
of certain advertising and marketing concepts, strategies and materials
related to the repositioning of TANDY as a service provider under the
Marks; and
WHEREAS, on November 4, 1993 TANDY and INTERTAN GROUP entered into license
agreements for INTERTAN GROUP to use (as provided therein) various marks
described therein in Canada and in Australia and New Zealand (hereinafter
each country listed under each license agreement is referred to as a
"Licensed Country" or "Licensed Countries" when referred to as a group and
such agreements are referred to herein as the "License Agreements").
Now, therefore the parties hereto agree as follows:
1. LICENSE.
-------
a) License of Materials.
--------------------
(i) Subject to all payments required hereunder being timely made by
INTERTAN GROUP and to INTERTAN GROUP's compliance with all the
terms of this Agreement, TANDY agrees to provide InterTAN with
the following information related to operation of Tandy's U.S.
RadioShack stores and outlets (which are collectively referred to
in this Agreement as "Materials") during the term of this
Agreement:
(a) Copies of all POP materials, visual merchandising, and
model
2
store information.
(b) Advance copies of flyers and annual catalogs. Preferably, INTERTAN
GROUP could receive these in both finished as well as at any early
proof stage, to assist in planning.
(c) Monthly breakdown of percentage of sales by series, increase or
decrease in each series as a percentage of last year's sales, and
gross margin percentage this year and last year by series.
(d) Forecast list of blockbuster and/or major promotional products for
next six months or whatever the appropriate planning horizon may
be.
(e) All training materials, preferably in hard copy and on diskette or
other magnetic media, to assist customizing language or content as
appropriate.
(f) Copies of all market and in-store research (e.g. Envirosell).
(g) Data on a monthly basis on average sales per ticket and average
tickets per store.
(h) CDs or other media with all appropriate product packaging
information and formats, designs, etc.
(i) Copies of television commercials.
(j) Advance copies of and details regarding all programs
3
involving customer credit (i.e. Answers Plus program), home
connectivity, online strategy, and other service initiatives (TSP
RSU, etc.).
(k) Summary information regarding effectiveness of mailing lists
(number of flyers mailed per store, impact of direct marketing
efforts, etc.).
(l) Regular updates on thought processes leading to strategic programs
such as those intended to enhance customer loyalty, customer
service and those pertaining to the reformatting of RadioShack
stores.
(ii) TANDY grants a non-assignable, non-exclusive license to INTERTAN GROUP to
use the Materials in the Licensed Countries in the limited manner
specified in this Agreement.
(iii) INTERTAN GROUP shall have no right to sublicense or disclose any of the
Materials to any third party other than contract managers, dealers and
franchisees duly granted a sublicense by INTERTAN GROUP in accordance
with the terms and conditions of the applicable License Agreement.
INTERTAN GROUP agrees to use the Materials provided only as a source for
concepts and ideas and will not use the actual Materials provided in any
other way.
4
(iv) INTERTAN GROUP will use only photography, talent, props and
backdrops which it currently owns, or which it purchases or
licenses for its own use, in any advertisements produced by the
INTERTAN GROUP arising from the Materials.
(v) Except as expressly provided in this Agreement, INTERTAN GROUP
agrees to keep all information specified above confidential and
not to provide this information to any third party until five
days after an item has been published or broadcast to the general
public anywhere in the United States. INTERTAN agrees to return
to TANDY or destroy all copies and originals of confidential
information within 30 days after expiration or other termination
of this Agreement.
b) License of Marks; New Marks.
---------------------------
(i) Subject to the terms and conditions of this Agreement and to the
provisions of the License Agreements, TANDY grants a non-
assignable, non-exclusive license to INTERTAN GROUP to use the
Marks as service marks in the Licensed Countries; except that the
INTERTAN GROUP is not authorized by this Agreement to use "Radio
Shack" as a trade name in Australia, and the proper licensed
trade name as stated in the License Agreement for Australia (the
proper licensed trade name being "Tandy Electronics") is hereby
5
substituted for "Radio Shack" with respect to the foregoing grant
of license to use the Marks .
(ii) The Marks in Exhibit A attached hereto are hereby acknowledged to
be permitted under the License Agreements and shall be governed
by the terms and conditions thereof for all purposes, including
but not limited to the quality control and enforcement provisions
thereof, except as otherwise set forth in this Agreement.
(iii) Where required by applicable law, INTERTAN GROUP agrees, at
its expense, to register with the appropriate governmental entity
as , or to cause the appropriate governmental entity to appoint
it as, a registered user of the Marks or any related new marks
subsequently developed (as hereinafter described) after the
effective date hereof.
(iv) The parties recognize that TANDY or INTERTAN GROUP may develop
new marks in the future arising out of or based upon the
Materials. Any such new mark developed by or for INTERTAN GROUP
shall belong to, and be owned by, TANDY exclusively. Before
INTERTAN GROUP uses any new marks arising out of or based on the
Materials, INTERTAN GROUP shall request TANDY's approval of same
in writing and such approval shall not be unreasonably withheld
or delayed by TANDY. If TANDY approves the use of a new mark by
INTERTAN GROUP, such new mark shall
6
be listed on an exhibit to this Agreement, and listed on an
exhibit to the License Agreements, and shall be governed by the
terms and conditions of the License Agreements, except as
otherwise set forth in this Agreement.
(v) This Agreement shall prevail over the License Agreements with
regard to the matters set out in this paragraph 1.b), with regard
to the duty of the INTERTAN GROUP to provide TANDY advance notice
of use of Marks as provided in paragraph 2 hereof and with regard
to consideration to be paid therefor as set out in paragraph 3.
If this Agreement expires by its terms, INTERTAN GROUP shall
continue to have rights to use the Marks developed prior to such
expiration or termination subject to the terms of this paragraph
1.b) and the License Agreements until such time as the License
Agreements terminate, provided that neither InterTAN nor INTERTAN
GROUP are then in default hereunder and that no event or
combination of events will have occurred which, if known or with
the passage of time, would constitute an event of default
hereunder, and such event is noncurable or has become noncurable
due to passage of time.
2. NOTICE OF USE.
-------------
7
TANDY acknowledges that InterTAN has disclosed that certain of the Marks
are currently being used by the INTERTAN GROUP. From and after the date
hereof, in the event INTERTAN GROUP decides to use any of the Marks, or any
related new marks subsequently added to this Agreement, in any form in any
of the Licensed Countries, INTERTAN GROUP agrees to notify TANDY in writing
at least 30 days in advance of INTERTAN GROUP's first advertisement or
announcement so that TANDY can apply for registration of its marks and
protect its rights in the appropriate countries, or request INTERTAN GROUP
to do so, in accordance with the terms of the applicable License Agreement.
In any case, such registration shall be at INTERTAN GROUP's expense, and
INTERTAN GROUP shall reimburse TANDY for all expenses incurred by TANDY in
that regard, if any.
3. CONSIDERATION BY INTERTAN GROUP. As consideration for this Agreement,
-------------------------------
InterTAN agrees to pay the following sum:
a) Annual Payments. During the term of this Agreement, InterTAN or
---------------
the INTERTAN GROUP shall pay to Tandy in readily available funds
U.S. $125,000.00 per year, payable each successive December 31.
b) Guaranty of Payment. InterTAN irrevocably and unconditionally
--------------------
guarantees to TANDY the timely payment of all amounts due
hereunder, as well as the observance and performance of all of the
obligations, terms, conditions and covenants of each of the other
members of the INTERTAN GROUP
8
pursuant to this Agreement. This Guarantee is a continuing
guarantee and shall be binding upon InterTAN, its successors and
assigns, and shall inure to the benefit of, and be enforceable by
TANDY and its successors, transferees and assigns.
4. ADDITIONAL CONSIDERATION.
------------------------
In the event INTERTAN GROUP's use of the Marks or Materials requires or
results in a payment for such use to third parties (including but not
limited to, payments under applicable union codes or applicable production,
talent or other contracts by TANDY relating to the production of
commercials or advertisements), INTERTAN GROUP, as additional consideration
for this Agreement, shall pay the same and bear all expense with respect
thereto. TANDY may separately invoice InterTAN or the INTERTAN GROUP for
such amounts when and as incurred by Tandy. Otherwise, InterTAN will pay
such amounts directly to such third parties.
5. PAYMENT TERMS.
-------------
All invoices by TANDY to InterTAN or the INTERTAN GROUP shall be due and
payable on each successive December 31 (the "Due Date") and shall be
considered past due and in default of payment after that time. Payments
shall be made to: RadioShack, Attention: Vice President and Controller, 100
Throckmorton Street, Suite 1600, Fort Worth, Texas 76102; or to such other
9
address as TANDY may designate in writing. Any amount not paid on the Due
Date shall accrue interest on a per annum basis at the prime rate published
in the Money Rates section of the Wall Street Journal on the date of first
publication of the Wall Street Journal following the Due Date, plus four
(4) percentage points per annum, until paid in full.
6. INDEMNITY.
---------
INTERTAN GROUP agrees to indemnify, defend and hold harmless TANDY and its
divisions, subsidiaries and affiliates, and its and their respective
shareholders, directors, officers and agents of and from any and all claims
by third parties that any advertisement, or representation by INTERTAN
GROUP is false, misleading, deceptive or infringes on any rights the third
party may have; or resulting from INTERTAN GROUP's breach of this Agreement
(including, but not limited to, any failure to pay third parties).
7. DEFAULT BY INTERTAN.
-------------------
a) Noncurable Events. The following are events of default for which
-----------------
no time to cure is provided:
(i) nonpayment or late payment of any amounts due hereunder; and
(ii) failure to keep information confidential as required by this
Agreement.
10
b) Curable Events. In the event INTERTAN GROUP or InterTAN defaults
--------------
under any other provision of this Agreement the INTERTAN GROUP
shall cure the default within 30 days from the date of written
notice sent by TANDY.
8. DEFAULT BY TANDY.
----------------
In the event TANDY fails to provide Materials to INTERTAN GROUP as set out
in this Agreement, TANDY shall cure the default within 30 days from the
date of written notice sent by InterTAN, provided that INTERTAN GROUP is
then in compliance with all material terms and conditions hereof.
9. REMEDIES.
--------
In the event of a noncurable event of default, or if a curable event of
default is not cured within 30 days, the non-defaulting party shall be
entitled to proceed with its legal remedies under this Agreement (including
but not limited to, suit for damages, injunction, for specific performance,
or other special relief). The non-defaulting party also shall have the
right to terminate this Agreement by written notice to the defaulting
party, such termination to be effective immediately on receipt or such
other date as the non-defaulting party may designate. Should this Agreement
be terminated due to an uncured or noncurable event of default by
11
INTERTAN GROUP, such event of default shall be a deemed breach of the
License Agreements and the Merchandise Agreement and shall be cause for
immediate termination of all other agreements between the parties. If it
becomes necessary for either party to place this Agreement in the hands of
an attorney for enforcement, the prevailing party shall be entitled to
recover, in addition to its damages and all sums due and payable to it
hereunder, its reasonable attorney fees and court costs, including
prejudgment and postjudgment interest thereon at the highest rate allowed
by law.
10. TERM.
----
The term of this Agreement is from January 1, 1999 through such date that
the License Agreements expire or terminate.
11. EXPIRATION AND TERMINATION.
--------------------------
a) Expiration. Unless the term is extended by written contract of the
----------
parties, and unless earlier terminated as hereinabove provided, this
Agreement shall automatically expire and terminate at the expiration
of the term provided in paragraph 10.
b) Automatic Termination. This Agreement also shall automatically
---------------------
terminate in the event of INTERTAN GROUP's default under the
Merchandise Agreement or the License Agreements between the parties
if such default
12
results in the termination of the agreement under which default
occurred.
12. ASSIGNABILITY.
-------------
This Agreement is not assignable by INTERTAN GROUP. TANDY, in its sole
discretion, may assign this Agreement at any time to any person affiliated
with TANDY.
13. MISCELLANEOUS.
-------------
a) Severability. In the event that any provision of this Agreement
------------
shall be determined to be invalid or prohibited by law, such provision
shall be ineffective to the extent of such invalidity or prohibition
without invalidating the remainder of this Agreement.
b) Waiver. No failure or delay in exercising any right, power or
------
remedy under any provision of this Agreement shall operate as a waiver
of or otherwise shall prejudice any of the rights, powers or remedies
of TANDY. No right, power or remedy herein conferred upon TANDY is
intended to be exclusive of any other right, power or remedy, and each
and every such right, power or remedy shall be cumulative of every
other right, power or remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.
c) Amendment. This Agreement may be amended only by a written
---------
document
13
signed by a duly authorized corporate officer of each of the parties
hereto.
d) Notices. All notices pursuant to this Agreement shall be in
-------
writing and shall be deemed given when personally delivered, or when
received (or on the third day after mailing if delivery is refused by
the addressee) if mailed by certified or registered mail, return
receipt requested, postage prepaid and properly addressed, or when
sent by legible facsimile transmission (with transmission
verification), and properly addressed as set out below, or to such
other address as is designated in writing by a party as the address
for notice under this Agreement:
If to InterTAN InterTAN, Inc.
or INTERTAN GROUP: 201 Main Street, Suite 1805
Fort Worth, Texas 76102
Attention: General Counsel Fax No. (817) 332-3071
If to TANDY: Tandy Corporation
100 Throckmorton Street, Suite 1800 P. O. Box 17180
Fort Worth, Texas 76102
Attention: Mark C. Hill
General Counsel Fax No. (817) 415-6593
14
e) Counterparts. This Agreement may be executed in counterparts, any
------------
or all of which shall constitute one and the same document.
f) Further Assurances. TANDY and INTERTAN GROUP agree that they will
------------------
at any time and from time to time, upon request of the other,
execute, acknowledge and deliver all such further instruments and
documents and to do, or cause to be done, all such further acts as
may be required to carry out the intents and purposes of this
Agreement.
g) Merger of Prior Negotiations. All prior negotiations and
----------------------------
agreements between the parties hereto with the respect to the
subject matter of this Agreement are merged herein and all such
prior negotiations and agreements are superseded hereby.
h) Binding effect. This Agreement shall be binding on the parties
--------------
hereto and their respective permitted successors and permitted
assigns.
i) Headings. The article and section headings in this Agreement are
--------
for convenience and reference only, and shall not be utilized in
any way to explain, modify, amplify or add to the interpretation,
construction or meaning of this Agreement.
15
j) Provisions Surviving Termination. Paragraphs 1.b), 2, 4, 6 and 9
--------------------------------
survive expiration or termination of this Agreement. In any event,
termination shall not extinguish or affect any monetary obligation
owing by either party under this Agreement which arose prior to
termination hereof.
14. GOVERNING LAW AND SUBMISSION TO JURISDICTION.
--------------------------------------------
THIS AGREEMENT AND ALL AMENDMENTS HERETO, AND ANY AND ALL CLAIMS, DEMANDS
OR ACTIONS OR IN ANY WAY RELATING HERETO OR INVOLVING ANY DISPUTE BETWEEN
OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT OR TORT, AT
LAW, IN EQUITY OR STATUTORILY, SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CHOICE OF LAWS OF SUCH STATE. EACH PARTY HERETO
IRREVOCABLY SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
COURTS OF THE UNITED STATES, NORTHERN DISTRICT OF TEXAS, FORT WORTH
DIVISION, AND TO THE COURTS OF THE STATE OF TEXAS LOCATED IN TARRANT
COUNTY, TEXAS, AS TO ANY LEGAL PROCEEDING DIRECTLY
16
OR INDIRECTLY RELATING TO THIS AGREEMENT, AS IT MAY BE AMENDED FROM TIME TO
TIME, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE HAD UPON IT IN
ANY SUCH DISPUTES. EACH SUBSIDIARY OF INTERTAN WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS ON IT AND IRREVOCABLY APPOINTS INTERTAN INC. AS THE
DESIGNATED REGISTERED AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS
WITHIN THE STATE OF TEXAS. INTERTAN AND ITS SUBSIDIARIES ALSO CONSENT TO
SERVICE OF PROCESS BY REGISTERED MAIL DIRECTED TO INTERTAN, INC.'S
PRINCIPAL OFFICE IN FORT WORTH, TEXAS AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED TEN (10) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED.
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
dates shown beneath their respective signatures hereto, to be effective as of
January 1, 1999.
InterTAN, Inc.
By: /s/ Brian E. Levy
-----------------------------
Title: President and C.E.O.
--------------------------
Date Signed: 1/22/99
--------------------
InterTAN Canada Ltd.
By: /s/ Brian E. Levy
-----------------------------
Title: President & Director
--------------------------
Date Signed: 1/22/99
--------------------
InterTAN Australia Ltd.
By: /s/ Brian E. Levy
-----------------------------
Title: Director
--------------------------
Date Signed: 1/22/99
--------------------
Tandy Corporation
By: /s/ Dwain H. Hughes
-------------------------------
Title: Senior Vice President & CEO
----------------------------
Date Signed: 1/22/99
----------------------
18
Exhibit A
---------
Canada
Radio Shack Unlimited(R)*
Radio Shack Gift Express(R)
The Repair Shop at Radio Shack(R)*
You've Got Questions! We've Got Answers(R)!
Radio Shack Express(R)*
RadioShack Select (common law)
* Including the unregistered, one-word "RadioShack" variation.
Australian Variations
Tandy Electronics Unlimited
Tandy Electronics Gift Express
Tandy Electronics Express
The Repair Shop at Tandy Electronics
You've Got Questions! We've Got Answers!
Tandy Electronics Select
19