Exhibit 10(v)
SECOND AMENDED AND RESTATED
LICENSE AGREEMENT
(Canada)
This Second Amended and Restated License Agreement (Canada) (the
"Agreement") is dated to be effective as of May 1, 2001 between TRS Quality,
Inc. ("TRS") and InterTAN Canada Ltd. ("ITC").
WHEREAS, TRS is a corporation organized under the laws of the State of
Delaware, having its principal place of business in Wilmington, Delaware, and is
a wholly-owned subsidiary of RadioShack Corporation (formerly Tandy Corporation)
("RadioShack").
WHEREAS, ITC is an entity organized under the laws of the Province of
Alberta, and continued into British Columbia, Canada, having a principal place
of business at 279 Bayview Drive, Barrie, Ontario, Canada, and is a wholly-owned
subsidiary of InterTAN, Inc. ("ITI").
WHEREAS, TRS has adopted, used, and owns "RADIOSHACK" as a trade name
and service mark in Canada in connection with the operation of retail store
services dealing primarily in consumer electronic products and computers and
distribution of catalogs in Canada; TRS also owns those trademarks identified in
attached Exhibit 1.
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WHEREAS, ITC wishes to continue to use "RADIOSHACK" as a trade name and
service mark for the operation of ITC owned (or managed) or ITC franchised
retail stores in Canada dealing primarily in consumer electronic products and
related services including catalog, mail order and repair services in Canada.
ITC also wishes to make or to have made certain products under certain
trademarks identified in Exhibit 1.
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WHEREAS, RadioShack previously assigned to TRS all of its rights, title
and interest to those certain trade names, trademarks and service marks
identified in this Agreement or any exhibit hereto.
NOW, THEREFORE, it is agreed as follows:
1. TRS grants an exclusive nonassignable license to ITC, provided ITC
is duly appointed a registered user if so required by applicable law, to use and
to grant sublicenses to others as herein provided, to use "RADIO SHACK" or
"RADIOSHACK" as a trade name and service mark in Canada in connection with the
operation of ITC owned or ITC franchised retail stores dealing primarily in
electronic products and related services including catalog, mail order and
repair services rendered in such stores in Canada, such use being subject to
royalties payable in accordance with Section 5 hereof.
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2. TRS grants to ITC a nonexclusive, nonassignable, royalty-free
license under all trademarks owned by TRS and used currently (or formerly) in
the United States by RadioShack, and which are identified in Exhibit 1 attached
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to this Agreement, for use in Canada in connection with the advertising and sale
of products purchased through RadioShack International Procurement Limited
Partnership (formerly A&A International, Inc.), a wholly owned subsidiary of
RadioShack ("RIPLP"), and on (a) those products on which such trademark is used
currently (or formerly) in the United States by RadioShack which ITC does not
purchase through RIPLP and which, as of the date hereof, ITC makes or has made
for it by anyone other than RadioShack or one of its subsidiaries, all as
identified in Exhibit 2 attached to this Agreement, and which shall be sold only
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in accordance with the provisions of this Agreement in Canada or (b) such other
products as TRS may approve (collectively, the "Products"). The license granted
under this Section 2 shall be limited to use of the trademarks on and
advertising of the Products. All flyers, catalogs or other printed materials
used to advertise trademarked products must contain a notice identifying by name
the TRS trademarks used therein (as identified in Exhibit 1) and must explicitly
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state that these trademarks are owned by TRS and are used under license. TRS
agrees that it will be sufficient for such notice to identify TRS trademarks
with an asterisk, together with an explanatory note that the asterisk identifies
a trademark of TRS which is used under license.
3. The licenses granted in Sections 1 and 2 shall include the right to
grant sublicenses, subject to the terms of this Agreement, only to (a) dealers
for use with ITC dealer programs in Canada and (b) franchisees for use with ITC
franchise programs in Canada, to resell products on which the trademarks are
used. All sublicenses shall conform with the terms of this license and shall be
subject to similar terms and conditions, subject to the last sentence of this
Section 3, as the dealer and franchise agreements heretofore in use by ITC, as
exemplified by the attached Exhibit 3(a) and Exhibit 3(b). Any provisions in any
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agreement pertaining to RadioShack or TRS not in conformity with Exhibit 3(a)
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and Exhibit 3(b), and any changes to provisions pertaining to RadioShack or TRS
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in any previously approved agreements, must be approved in writing by RadioShack
or TRS, as the case may be, prior to use by ITC. No sublicense shall be granted
unless TRS's rights to the trademarks and service marks sublicensed are secured
under applicable law, pursuant to appropriate filings of applications for
registrations and the filing and procuring of appropriate approvals for such use
including, but not limited to, registered user registrations, where applicable.
All dealer and franchise agreements entered into or received after the date
hereof shall disclose that TRS is the owner of the trade name, trademark and
service mark being sublicensed, as well as all trademarks identified in
Exhibit 1, and, to the extent ITC can, shall give TRS the right to inspect the
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premises of each dealer,
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and franchisee to assure the quality of service and merchandise.
3A. Attached hereto and made a part of this Agreement is Addendum A
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which sets forth the terms and conditions relating specifically to the
authorized sublicense from ITC to Chapters Online Inc. regarding certain
intellectual property rights owned by TRS.
3B. Attached hereto and made a part of this Agreement is Addendum B
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which sets forth the terms and conditions relating specifically to the
authorized sublicense from ITC to AOL Canada regarding certain intellectual
property rights owned by TRS.
4. (a) The term of this Agreement shall be from May 1, 2001 to
June 30, 2010.
Either party may terminate this Agreement at any time without cause during the
term by providing the other party five (5) years prior written notice of
termination. Such termination shall be effective on June 30 next following the
expiration of five (5) years from the date appearing on the written notice of
termination. Any and all of the foregoing notwithstanding, this Agreement shall
automatically terminate on the termination of the Second Amended and Restated
Merchandise Agreement (herein so called) among, RadioShack, RIPLP, ITI and ITC,
dated effective as of May 1, 2001. On or before June 30, 2005, the parties agree
to discuss further extension of this Agreement, however, such discussions shall
not imply any duty whatsoever on the part of TRS to do anything beyond
discussing the matter.
(b) Any extensions of the licenses herein granted beyond the terms set
forth in Section 4(a) of this Agreement shall be at the sole discretion of TRS.
It is hereby agreed that any such extensions that are granted by TRS will
include payment of royalties from ITC to TRS at a rate which shall be negotiated
and agreed by the parties in good faith prior to any such extension.
(c) TRS may permit other uses by ITC of the above-licensed trade name,
service mark and trademark (e.g., use of trade name and service mark on the
Internet), such use being subject to (i) whatever rules, regulations,
procedures, conditions and restrictions as TRS may impose upon ITC, and (ii)
royalties payable in accordance with paragraph 5 hereof.
5. (a) During the term of this Agreement (including any "run-off"
period as contemplated in Sections 7 and 14 below), ITC shall pay to TRS a
royalty on Gross Revenue derived from all retail stores or other facilities of
any kind or nature using or deriving benefit directly or indirectly from the use
of service marks or trade names licensed under Section 1 hereof. Such royalty
shall be calculated, on a consolidated basis with the other members of the
ITI-Group, and paid by ITC, in U.S. dollars to TRS in Fort Worth, Texas, U.S.A.
concurrently with the
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submission of the Royalty and Sales Report specified in Section 5(c) at the
following rates:
(i) On ITI-Group Gross Revenue (excluding income from
Services) derived from sales of product purchased through RIPLP ("RIPLP-sourced
Products") the rate shall be determined as follows:
SCHEDULE OF ROYALTIES FOR RIPLP-SOURCED PRODUCTS
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Percent of ITI-Group Gross Revenue ITI-Group
(excluding income from services) Royalty Percentage
From RIPLP-sourced Products
46.9% or less 1.00%
47.0% - 51.9% 0.80%
52.0% - 56.9% 0.60%
57.0% - 61.9% 0.45%
62% or greater 0.35%
By September 30 of each year ITC and the ITI-Group shall calculate its
consolidated revenue from sales of RIPLP-sourced Products (excluding income from
services) for the most recently completed fiscal year ended June 30 and its
total Gross Revenue (both excluding income from services and including income
from services) from sales of all products and services for the most recently
completed fiscal year ended June 30. The percentage of Gross Revenue represented
by sales of RIPLP-sourced Products will be calculated by dividing the total
Gross Revenue from sales of RIPLP-sourced Products (excluding income from
services) by the total Gross Revenue from sales of all Products. The resulting
percentage of Gross Revenue from RIPLP-sourced Products will be compared to the
percentages listed in the column entitled "Percent of ITI-Group Gross Revenue
from RIPLP-sourced Products (excluding income from services)" in the Schedule of
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Royalties for RIPLP-sourced Products set out above in order to determine the
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Royalty Percentage applicable to Gross Revenue from sales of RIPLP-sourced
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Products (excluding income from services) for the then-current fiscal year.
EXAMPLE:
FY 2000 Total Gross Revenue
(excluding income from services) = 100
FY 2000 Gross Revenue (excluding income
from services) from RIPLP-sourced Products = 50
50 / 100 = 50% of Gross Revenue of ITI-Group as a whole (excluding income from
services) are from sales of RIPLP-sourced Products.
If 50% is compared to the first column of the Schedule of
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Royalties for RIPLP-sourced Products, then for FY 2000, the Royalty Percentage
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is 0.80% on revenue from RIPLP-
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sourced Products (excluding income from services), to be calculated and paid in
accordance with this Section 5(a) and Section 5(c) below.
(ii) On Gross Revenue derived from any and all other sources
(including income from services), the rate shall be 1.00% of such Gross Revenue.
Except where expressly stated otherwise, "Gross Revenue" as
used herein shall mean all revenue of the ITI-Group derived from the sale or
lease of products, and the rendering of services, minus any returns or
allowances.
(b) In the event of the sale or distribution at a special price,
directly or indirectly, to itself including without limitation any subsidiary of
ITC, or to any person, firm, or corporation related in any manner to ITC or its
officers, directors, or major stockholders, ITC shall pay a royalty with respect
to such sales or distribution based upon the price generally charged to a third
party by ITC in an arm's length transaction. It is hereby expressly understood,
however, that in the event any products are sold by ITC to a subsidiary or
division of ITC, or to another member of the ITI-Group, for the purpose of
resale by such subsidiary, division, or ITI-Group company, then in that event
the sale between ITC and such subsidiary, division or ITI-Group company, shall
not be included in the calculation of Gross Revenue.
(c) On or before the 30th day following the close of each
calendar quarter during the term of this Agreement, ITC and the ITI-Group shall
furnish to TRS a complete and accurate report, certified to be accurate by an
officer of ITI. Such report shall show ITI-Group consolidated figures on the
following: gross sales, itemized discounts and allowances deducted from gross
sales price, and returns of all products and services sold during the preceding
calendar quarter (all in U.S. dollars calculated using the average exchange rate
for such quarter) for each of Sections 5.(a)(i) and 5.(a)(ii). Each such report
is to be accompanied by payment in full by ITC of its portion of the amount of
royalties due. Receipt or acceptance by TRS of any report furnished pursuant to
this Agreement, or of any sums paid hereunder shall not preclude TRS from
questioning the correctness thereof at any time. In the event that any
inconsistencies or mistakes are discovered in such reports or payments, they
shall be rectified immediately and the appropriate payment made by ITC or
refunded to ITC by TRS, as the case may be, within 30 days of discovery.
(d) ITC shall keep, maintain and preserve in ITC's principal
place of business for at least two (2) years following termination or expiration
of the term of this Agreement, or any renewals hereof, complete and accurate
records of accounts including without limitation invoices, production and
receiving
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records, correspondence, banking and financial and other records pertaining to
the various items required to be shown on the reports to be submitted by ITC.
Such records and accounts shall be available for inspection and/or audit at any
time or times during or after the term of this Agreement during usual business
hours and upon reasonable request by TRS or its nominees. ITC agrees not to
cause or permit any interference with TRS or its nominees in the performance of
their duties of inspection and/or audit.
(e) If any such inspection and/or audit shows that the amount of
royalties paid by ITC to TRS during the time period covered by such inspection
and/or audit is less than the actual royalties that should have been paid by ITC
by more than five percent (5%) of the amount actually paid to TRS, then the
reasonable cost of such inspection and/or audit shall be paid for by ITC.
(f) The exercise by TRS in whole or in part, at any time or
times, of the right to inspect or audit records and accounts, or of any other
right herein granted, or the acceptance by TRS of any report, or the receipt or
deposit by TRS of any payment from ITC shall be without prejudice to any other
rights or remedies of TRS and shall not stop or prevent TRS from thereafter
disputing the accuracy of any such report or payment.
6. [RESERVED]
7. On termination of the licenses to one or more trade names,
trademarks or service marks granted under Sections 1 and 2, ITC shall, within
six months or such lesser period of time as is practical, cease all use of such
trade names, trademarks and service marks so licensed and shall cause all those
in privity with it to similarly terminate such use. ITC shall also sign or have
signed such documents as may be necessary to formally terminate such use, vest
in TRS all goodwill associated with such trade names, trademarks and service
marks for which use has terminated, and to cancel any registered user
registrations which may then be in effect or to otherwise rectify the applicable
government records to the extent as may be required by law or by TRS.
8. All products made or services offered for sale under the licenses
to one or more trade names, trademarks or service marks granted under Sections 1
or 2 shall be sold by ITC (a) at retail in Canada through retail stores owned,
managed, or franchised by ITC, or through duly appointed dealers for use with
dealer programs, or through franchisees for use with franchise programs, or (b)
in such other manner as permitted by TRS.
9. (a) The licenses granted hereunder may be terminated by TRS on
written notice in the event of the occurrence of any of the following events of
default:
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(i) ITC materially breaches this Agreement or fails to
diligently enforce the obligations of dealers and franchisees under sublicenses
and when permitted by law, after a request by TRS, terminate such sublicenses
when compliance by dealers and franchisees with their obligations related
thereto is not seasonably made;
(ii) ITC fails to make payments of sums that may become due
hereunder, or under royalty bearing extensions as provided under Section 4;
(iii) ITC fails to perform any other obligation under this
Agreement;
(iv) an event of default occurs under the Second Amended and
Restated Merchandise Agreement;
(v) any member of the ITI-Group defaults on any agreement,
including lease agreements, to which any member of the ITI-Group and RadioShack,
or any of its affiliates, are parties or are in privity with third parties; or
(vi) there is a change of control of ITC or ITI (which entities,
together with their subsidiaries, comprise and are referred to collectively
herein as the "ITI-Group").
For purposes of this Section 9, a "change of control" means:
(A) The acquisition by any person, corporation, partnership,
association, joint stock company, trust, unincorporated organization, or
government, including a political subdivision thereof, (or any combination
thereof acting for the purpose of acquiring, holding, voting, or disposing of
equity securities of ITI) of the beneficial ownership of at least twenty percent
(20%) of the then issued and outstanding shares of capital stock of ITI carrying
voting rights in all circumstances;
(B) The acquisition of ITC by any person, corporation, partnership,
association, joint stock company, trust, unincorporated organization, or
government, including a political subdivision thereof, (or any combination
thereof acting for the purpose of acquiring, holding, voting, or disposing of
equity securities of ITC) unless, as the result of such acquisition, not more
than twenty percent (20%) of the then issued and outstanding capital stock of
ITC carrying voting rights in all circumstances is acquired by persons other
than ITI;
(C) ITI or ITC merges or amalgamates with one or more other
corporations unless, as a result of such merger or amalgamation, not more than
twenty percent (20%) of the issued and outstanding shares in the capital stock
of the merged or amalgamated
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corporation carrying voting rights in all circumstances are held by persons
other than ITI or ITI's shareholders as existing before the merger or
amalgamation;
(D) A change in the composition of the Board of Directors of ITI or ITC
that results in, on any day, a Board of Directors more than fifty percent (50%)
of the members of which (excluding those members elected or appointed to replace
deceased Directors or replacing any executive officer of ITI or ITC who was a
Director on or prior to May 1, 2001) were not members of the Board of Directors
two (2) years prior to such date; or
(E) Substantially all the assets of ITI or ITC are sold.
(b) ITC shall have the right to cure certain events of default as
follows:
(i) in the event of the occurrence of an event of default under
Section 9(a)(i) through 9(a)(iii) above, the ITI-Group shall have the right to
cure such event of default within thirty (30) days from and after the date of
written notice by TRS of such event of default; provided, however, that the
right to cure any such event of default shall be limited and shall not exceed a
total of three times during each fiscal year on defaults under 9(a)(i) and
9(a)(iii) and payment defaults under 9(a)(ii) on monthly amounts due; or once
each fiscal year on payment defaults under 9(a)(ii) on quarterly amounts due;
(ii) in the event of the occurrence of an event of default under
the provisions of paragraph 9(a)(iv) above, ITC shall have the right to cure
such event of default in accordance with the provisions of the Second Amended
and Restated Merchandise Agreement;
(iii) in the event of the occurrence of an event of default under
paragraph 9(a)(v) above, ITC shall have the right to cure such event of default
in accordance with the provisions, if any, relating to the cure of an event of
default contained in any agreement included within the scope of the provisions
of such paragraph.
(c) ITC shall not have the right to cure an event of default resulting
from a "change of control" of ITI or ITC, as described in paragraph 9(a)(vi)
above.
9.1 In the event any entity of the ITI-Group: (a) becomes insolvent,
(b) initiates or otherwise becomes the subject of a bankruptcy or liquidation
proceeding, or (c) enters into an arrangement for the benefit of creditors, TRS
may, on written notice and at its option, terminate or partially terminate or
make non-exclusive the licenses herein granted.
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10. Nothing in the licenses herein granted shall vest in ITC or any
party operating under a sublicense from ITC any title or ownership rights in any
trade name, trademark or service mark owned by TRS, or any goodwill appurtenant
thereto. Except to the extent as may be required by law to register "RADIO
SHACK" or "RADIOSHACK" as a trade name used by ITC, ITC expressly agrees not to
register in any commercial register a trade name that includes "RADIO SHACK" or
"RADIOSHACK" as a part thereof for operation of its business or the business of
a subsidiary or affiliate nor to permit a dealer, export dealer, or franchisee
to do the same without the written authorization of TRS. In the event that
"RADIO SHACK" or "RADIOSHACK" is registered as a trade name hereunder, ITC shall
promptly on termination of the licenses herein granted or on termination of use
of "RADIO SHACK" or "RADIOSHACK" as a trade name, whichever is first, cancel
such registration. In the event such registration is not promptly canceled by
ITC hereunder, ITC does hereby give TRS the full right and authority and power
of attorney to take such steps as may be required to cancel said registration.
11. ITC agrees to execute such additional documents and agreements as
may be reasonably necessary to maintain in TRS all rights, title, and interest
in and to all trade names, trademarks and service marks currently owned by TRS
and licensed hereunder, and further, to execute such additional documents and
filings including but not limited to registered user agreements, applications
and affidavits that are reasonably necessary to effect the terms and purposes of
this license.
12. ITC agrees not to (a) infringe upon any trade name, trademark or
service mark herein licensed; (b) use without the consent of TRS any trade name,
trademark or service mark that is a colorable imitation of or is likely to be
confused with any trade name, trademark or service mark licensed hereunder; (c)
use or permit the use of any trade name, trademark or service mark licensed
hereunder except in accordance with the terms of this license or as expressly
authorized pursuant to modifications or extensions agreed to in writing by TRS;
(d) register under the trademark laws or service mark laws of any government in
its own name or the name of a controlled entity or an entity in privity with it
any trademark or service mark licensed hereunder unless so authorized in writing
by TRS; (e) use or permit a controlled company or those in privity with it to
use or register with any governmental agency as part of the name of an entity,
domestic or foreign, any trademark or service mark herein licensed, (f) commit
any act of passing off which is likely to damage TRS or to dilute the value of
any trade name, trademark, service mark or goodwill of TRS and (g) sell products
bearing the trademarks herein licensed except for products obtained through
RIPLP or its designated and approved sources until duly appointed as a
registered user, if such registration is required by law.
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13. As used in this Agreement, the words, trade name, trademark,
service mark and plurals thereof shall have meanings normally attributed to them
under the laws of the United States.
14. ITC agrees that after a period of six months or such lesser period
of time as is practical following the termination or expiration of the licenses
herein granted, it will not directly or indirectly own or operate in Canada
retail facilities under, or use or advertise, any trade name, trademark or
service mark which comprises or includes "RADIO SHACK", "RADIOSHACK", "THE
SHACK", "SHACK", "TANDY", "TANDY ELECTRONICS" or any other mark used or owned by
TRS or any colorable imitations thereof without the express written permission
of TRS.
15. ITC agrees that products sold under any trademark licensed
hereunder and all packaging materials therefore shall be of first-class
merchantable quality, manufactured in accordance with first-class quality
standards prevailing in the industry and consistent with those maintained by
RadioShack in connection with comparable products. ITC further agrees that all
products sold under any trademark herein licensed shall be made, sold, and
advertised in conformity with all applicable laws, rules, regulations, and
insurance requirements for the country in which such products are made and sold.
16. (a) ITC shall, on reasonable request from TRS, make available to
TRS samples of products which are being sold under any trademark licensed
pursuant to this Agreement together with packaging, promotional and advertising
material. TRS shall have the right to make a reasonable determination that such
products, packaging, promotional and/or the advertising material conform with
standards of quality as herein required. In the event that TRS determines that
the standards of quality have not been maintained, it shall notify ITC in
writing and ITC shall within 30 days of notification correct the items which do
not conform to the standards of quality, in accordance with the reasonable
requests of TRS. In the event that the necessary corrections to such
nonconforming items cannot be effected within the 30-day period, ITC shall
refrain from further manufacture, shipping and/or sale of such nonconforming
items until appropriate compliance with this provision can be effected. Failure
to comply with standards of quality as herein set forth shall be deemed a
material breach of this Agreement.
(b) i. No less than 60 calendar days prior to production of any
Products to be sold under any trademark licensed pursuant to Section 2, ITC
shall submit to TRS specification sheets on and samples of such Products
together with packaging, promotional and advertising material ITC intends to use
in connection with such Products.
ii. In the event that ITC is planning to source Products with a
unit cost of goods to ITC of less than US$20.00
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to be manufactured in non-Far East countries ("Locally Sourced Products"), then
all time periods specified in Section 16.(b)i. shall be decreased to fifteen
(15) calendar days after receipt by TRS of the material required by such Section
16.(b)i., and, subject to Section 16.(a) and for the purposes of Section
16.(b)ii. only, in the absence of TRS's written response to ITC within said 15
day period, ITC may proceed with production of such Locally Sourced Products.
TRS may, but is not obligated to, authorize ITC to inspect and test Locally
Sourced Products in strict compliance with standards, methods and procedures
provided in writing to ITC by TRS, and, in that event, ITC will allow TRS access
to its testing facilities at any time during normal business hours without
notice for the purpose of verifying such compliance. All of TRS's travel costs
associated with such verification shall be borne by TRS. TRS may in its sole
discretion raise or lower the unit cost of goods figure above at any time on 30
days prior written notice.
iii. In the event that TRS thereafter determines that any such
Product does not meet the standards of quality required herein or has a
trademark thereon inconsistent with the license granted in Section 2, TRS shall
so notify ITC in writing and ITC shall within 30 calendar days of notification
correct the standards of quality and/or affix a trademark in accordance with the
reasonable requests of TRS. In the event that the necessary corrections to the
quality standards of or the trademark on such Products cannot be effected within
the 30-day period, ITC shall refrain from further manufacture of such Products
until appropriate compliance with this provision can be effected. Failure to
comply with standards of quality and trademarks as herein set forth shall be
deemed a material breach of this Agreement.
iv. Any notice required or permitted hereunder shall be in writing
and shall be sufficiently given if personally delivered or mailed by certified
or registered mail, return receipt requested, or by confirmed telecopy,
addressed as follows:
If to TRS:
c/o RadioShack Corporation
100 Throckmorton Street, Ste. 1900
Fort Worth, Texas 76102
Attn: Mr. David Christopher
Fax: (817)415-2647
with a copy to:
RadioShack Corporation
100 Throckmorton, Ste. 1700
Fort Worth, Texas 76102
Attn: Vice President - Law
Fax: (817)415-6593
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If to ITC:
InterTAN, Inc.
The Royal Centre
3300 Highway #7
Suite 904
Concord, Ontario L4K 4M3
Attn: General Counsel
Fax: (905)760-9722
(or to such other address as any party shall specify by written notice so
given), and shall be deemed to have been delivered as of the date so personally
delivered, mailed, or telecopied.
(c) Products sold under any trademark licensed pursuant to Section 2
and which are (1) identical (as to form, fit, function, quality, specifications
and trademark affixed) to Products sold in the United States by RadioShack and
(2) purchased from the same vendor as RadioShack - U.S. shall not be subject to
the pre-production submission requirements of paragraph 16(b). TRS, however, may
ascertain the compliance of such Products with the license terms herein by
invoking the procedures provided and rights conferred in paragraph 16(a).
17. In addition to complying with laws relating to packaging, ITC shall if
requested by TRS, imprint on all packaging and/or advertising material a legend
in a form and substance satisfactory to TRS to the effect that the trademarks
used on the products are licensed and/or are used with the permission of TRS.
18. ITC agrees it will not use any licensed trademark, service mark or
trade name in a manner which would be offensive to good taste, or which would
injure the reputation or goodwill of TRS or RadioShack, or of the products sold
by RadioShack. ITC agrees that it will actively use and promote the trade names,
trademarks and service marks during the term of the license thereof, and that it
will not abandon or take action which may be reasonably construed as an
abandonment thereof. ITC agrees that it will not use the "RADIO SHACK" or
"RADIOSHACK" trade name or service mark in conjunction with any other trade name
or service mark during the term of this Agreement. ITC further agrees that for
the term hereof it will not sell products which are to be sold under trademarks
licensed hereunder at any ITC-owned retail store not bearing the "RADIO SHACK"
or "RADIOSHACK" trade name.
19. ITC agrees, upon request, to provide TRS with the names and addresses
of its supplier of products which are to be sold under trademarks licensed
hereunder. ITC agrees to permit TRS to inspect the premises owned, managed or
operated by ITC and, to the extent ITC can, shall obtain permission from such
licensees whose licenses are granted after the date hereof, and cooperate in
obtaining permission from suppliers, and from sublicensees existing as of the
date hereof, to allow a representative of TRS to inspect the premises in which
products bearing licensed trade
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names, trademarks and service marks are used and in which products to be sold
under trademarks licensed hereunder are manufactured, stored, or sold by or for
ITC, at reasonable times during normal business hours, for purposes of enabling
TRS to determine whether or not ITC is meeting acceptable standards of quality.
20. ITC shall not during or subsequent to the term of any license
hereunder contest TRS's sole and exclusive ownership rights to any trade names,
trademarks and service marks herein licensed, or raise or cause to be raised any
questions or objections to registrations of same or to their validity. All uses
by ITC and sublicensees of the trademarks, service marks and trade names herein
licensed shall enure to the benefit of TRS.
21. TRS shall, at its option, file and diligently pursue applications for
registration of those trademarks which are used on products sold in RadioShack
company-owned stores in the United States in those countries in which ITC
resells such products as are purchased by it from TRS. Failure to file and
prosecute such applications, however, shall not be deemed a breach of this
Agreement but shall only give rise to permit ITC to file such application and
prosecute them in TRS's name, if TRS fails to do so within 60 days of request by
ITC. If TRS deems it advisable to seek registration or recordal of any trademark
or service mark herein licensed or used by TRS on products sold by it or under
its authorization to ITC now or at any time during the term of this Agreement,
ITC agrees to supply TRS with such material as TRS may reasonably request for
such purposes and to give TRS its full cooperation in connection therewith. In
the event that ITC, for any reason, obtains a registration for any trademark or
service mark herein licensed, or any part thereof, the same shall be assigned to
TRS promptly. In the event that a product upon which a mark licensed hereunder
is sold by ITC but not by TRS in a particular country and such product is not
sold by TRS in RadioShack company-owned stores in the United States, it shall be
the responsibility of ITC to register such mark, at its own expense, in the name
of TRS and to become a registered user to the extent so required. TRS, however,
may on written notice assume responsibility for such proceedings. TRS shall be
kept fully informed of all such proceedings.
22. This Agreement shall not be deemed to constitute a partnership or
joint venture between the parties or any other relation other than that of
licensor and licensee. ITC shall have no authority to create or incur any
liability or obligation binding on TRS, and TRS shall have no liability with
respect to the manufacture or sale of products for which marks are herein
licensed, their containers or other packing, promotion, or advertising of their
fitness, quality, workmanship, character, or compliance with applicable law.
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23. In the event ITC learns of a third party use of a mark or name that
may infringe upon or otherwise erode or diminish rights herein licensed, ITC
shall promptly inform TRS in writing.
24. TRS shall have the sole right to take such measures as its counsel
deems reasonable and advisable under the circumstances to police and enforce its
rights to any mark herein licensed, and Tandy shall have no liability to ITC by
reason of any action or inaction on TRS's part, whether such action or inaction
results in the inability of ITC to use any trade names, trademarks, or service
marks herein licensed or to prevent others from using the same.
25. TRS shall have the initial right and responsibility but at ITC's
entire expense to take such measures as its counsel deems reasonable and
advisable under the circumstances to police and enforce its rights in respect to
the trade names, trademarks and service marks herein licensed, but TRS shall
have no liability to ITC by reason of any inaction on TRS's part with respect to
such enforcement. In the event that TRS requests in writing, ITC shall, at its
own expense, initiate and diligently pursue any third-party use of a trade name,
trademark or service mark that, in the written opinion of TRS's trademark
counsel, infringes rights granted under Section 1. In any proceeding initiated
by ITC, TRS shall have the right to participate actively in the proceeding, at
its own expense. ITC shall reimburse TRS within 30 days of receipt of an
itemized invoice therefor regarding all out-of-pocket expenses incurred
hereunder.
26. ITC agrees at its own cost and expense to defend and indemnify and
save TRS or its affiliates, including without limitation RadioShack, and its or
their respective subsidiaries, stockholders, directors, officers, employees, and
agents, harmless from and against any and all losses, liabilities, claims,
suits, actions, proceedings, judgments, awards, damages, and expense including
without limitation reasonable attorney fees that they or any of them may incur
or suffer, which arise out of or is claimed by a claimant to arise from a state
of facts which would constitute a breach by ITC of any of the terms of this
Agreement. TRS agrees to notify ITC promptly of any such claim. TRS may at its
own expense have counsel of its own choice represent it or its affiliates in
such matter. However, if ITC fails to promptly and diligently defend, TRS or its
affiliate may, but shall have no obligation to, defend or settle the same
without ITC's consent. ITC agrees to pay the cost of defense and/or settlement
including without limitations reasonable counsel fees and judgments, awards, and
settlements incurred by TRS or its affiliates related thereto. Notwithstanding
the foregoing, TRS and its affiliates shall have sole control of such
proceedings and settlements at ITC's expense if (a) the same would adversely
affect a trade name, trademark or service mark herein licensed; or (b) an
adverse result would damage the goodwill of TRS or RadioShack; or (c) ITC fails
to provide TRS at its request proof satisfactory to TRS of the
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financial responsibility of ITC or of its insurers for any judgment which may be
entered or, in the absence of such proof, with a satisfactory surety bond to
assure such payment.
27. ITC agrees to carry product liability insurance for such coverage and
in such amounts and with such insurers as shall be satisfactory to TRS so long
as it continues to use trade names, trademarks and service marks herein
licensed. ITC agrees to name TRS and its affiliates as additional insureds
thereunder with provision that the insurer will not cancel such insurance
without giving TRS 30-days written notice by certified mail of any cancellation
or of any other expiration of such insurance. ITC shall deliver to TRS a
certificate of its insurer to the foregoing effect upon the execution of this
Agreement and upon any renewal or substitution of coverage.
28. ITC acknowledges that TRS has no adequate remedy hereunder at law for
use of trade names, trademarks, or service marks in violation of this Agreement,
and that TRS shall be entitled to injunctive relief therefore.
29. There are no representations or warranties that use of any trade name,
trademark or service mark herein licensed will not infringe upon rights of
others, or that TRS's rights therein are sufficient to permit the licensed use
herein set forth. Nor is there any representation or warranty by TRS that the
trademarks, trade names and service marks are duly registered or, if registered,
will be maintained, or that new applications for registration will be filed.
30. These licenses hereunder and this Agreement may be assigned by TRS but
may not be assigned by ITC, except with the written permission of TRS.
31. This Agreement is entered into in and under the laws of the State of
Texas, United States of America, and the terms and the conditions shall be
construed thereunder. The parties to this Agreement expressly agree that the
State of Texas shall have jurisdiction and venue in respect to any dispute
arising under this Agreement. TRS may, at its election, seek to enforce any
provision of this Agreement or seek to negatively or affirmatively enjoin ITC
from doing, or compelling it to do, any act prohibited or required by this
Agreement, by instituting a lawsuit in any venue in a court of competent
jurisdiction within or without the United States of America where the parties to
this Agreement, or any of them, are "found" or are "doing business" as those
terms are construed and interpreted under the laws of the State of Texas.
32. Any provision of this Agreement found to be prohibited by law shall be
ineffective to the extent of such prohibition without invalidating the rest of
this Agreement.
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33. This Agreement may not be terminated or modified except by written
instruments signed by an authorized officer of each party hereto.
34. ITC agrees to pay TRS all reasonable costs and expenses including, but
not limited to, reasonable attorneys' fees, expenses and court costs incurred by
TRS in enforcing any provision of this Agreement.
35. Notwithstanding anything herein to the contrary, TRS may, in its sole
discretion, waive any breach, default, or event of default arising under the
terms of this Agreement. 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 TRS. No
right, power or remedy herein conferred upon TRS 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.
36. TRS shall fully and promptly comply with the obligations of RadioShack
under the letter agreement dated April 6, 2001 between RadioShack and ITI as
though TRS were RadioShack and all references therein to the "License Agreement"
were references to this Agreement. Nothing in this Agreement shall supersede or
modify the terms of such letter agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
TRS Quality Inc.
By: /s/ Joel H. Tiede
---------------------------
Title: President
------------------------
INTERTAN CANADA LTD.
By: /s/ Brian E. Levy
---------------------------
Title: Director & President
------------------------
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Addendum A
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InterTAN Canada Ltd. Sublicense to Chapters Online Inc.
General Statement
-----------------
ITC entered into as of June 1, 2000 with Chapters Online Inc. ("Chapters") that
certain Electronic Commerce Strategic Alliance Agreement (the "ITC/Chapters
Agreement").
The ITC/Chapters Agreement contemplates the grant of certain sublicense rights
from ITC to Chapters relating to the use of certain intellectual property rights
owned by TRS (the "RadioShack Marks") and licensed from TRS to ITC under the
Agreement to which this Addendum A is attached. TRS hereby authorizes the
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sublicense from ITC to Chapters on the terms and conditions as specified below,
which shall each be in addition to any of the terms and conditions of the
Agreement. Any capitalized term used herein which is not otherwise defined shall
have the meaning as set forth in the Agreement.
Sublicense Terms and Conditions
-------------------------------
1. ITC is hereby authorized to grant to Chapters a sublicense to use the
RadioShack Marks as contemplated under the ITC/Chapters Agreement, the form
and content of which has been approved by TRS. ITC agrees to use its best
efforts to police Chapter's use of the RadioShack Marks consistent with its
current obligations under the Agreement.
2. ITC shall have no rights of further sublicense to any party other than
Chapters. ITC shall have no right to assign its interest under the
ITC/Chapters Agreement, nor shall ITC permit Chapters to assign its rights
under the ITC/Chapters Agreement, unless and until the prior written
consent of TRS is obtained. TRS may withhold such consent, in either event,
with or without cause in its sole discretion.
3. As contemplated under the ITC/Chapters Agreement, any time ITC and Chapters
determine in the future to jointly make decisions regarding, among other
things, the use of product tagging or labeling, graphical depictions,
taglines, promotional materials, etc., which involve in any manner the use
of a RadioShack Mark, ITC shall seek the prior written approval of TRS,
unless it is clear to ITC under all of the relevant circumstances, that
such proposed usage of any RadioShack Mark is in full accordance with TRS's
or RadioShack's then current Graphics Standards Manual and the Agreement.
In the event ITC is required to obtain TRS's prior written approval, TRS
will respond to ITC in a prompt manner, which in any event will not exceed
three (3) business days after TRS's receipt of ITC's written request for
such approval.
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4. TRS shall have the right to audit such books and records of ITC from time
to time upon reasonable request and prior notice, relating to (i) the
performance of ITC under the ITC/Chapters Agreement with respect to ITC's
obligations thereunder to prevent the shipment by ITC of any consumer
electronics products (whether private label or nationally branded) from
Canada into the United States, including in the District of Columbia,
Puerto Rico and the U.S. Virgin Islands; (ii) the gross sales recorded by
ITC as a result of the transactions contemplated under the ITC/Chapters
Agreement; and (iii) the proper usage of the RadioShack Marks in ITC's
advertising and packaging.
5. TRS may revoke ITC's right to sublicense the RadioShack Marks to Chapters
at any time, with immediate effect and without any liability therefor in
any manner whatsoever, upon the occurrence of the following:
(i) TRS's discovery that consumer electronic product has been or is being
shipped by ITC into the territories identified in 4(i) above in
violation of the terms of the ITC/Chapters Agreement;
(ii) TRS's discovery of any under-reporting by ITC of its gross sales
generated under the ITC/Chapters Agreement; or
(iii) ITC permits the persistence of an uncured breach, either by ITC or by
Chapters, under the ITC/Chapters Agreement which directly or
indirectly relates to or has an effect on any RadioShack Mark as
determined in TRS's sole discretion, acting reasonably.
6. Any breach by ITC of the terms and conditions of this Addendum A may, in
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TRS's sole discretion, be deemed to constitute a breach of the Agreement.
7. ITC agrees to further indemnify and hold harmless TRS and those other
entities or persons identified in Section 26 of the Agreement, to the
fullest extent provided in the indemnity provisions of Section 26 of the
Agreement, for any breach by Chapters of any provisions of the ITC/Chapters
Agreement.
8. To clarify the understanding and intentions of TRS and ITC, it is agreed
that the gross sales generated by ITC under the ITC/Chapters Agreement
shall be subject to the royalty payment contemplated in Section 5 of the
Agreement.
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Addendum B
----------
InterTAN Canada Ltd. Sublicense to AOL Canada Inc.
General Statement
-----------------
ITC contemplates that it will enter into during June 2001 with AOL Canada Inc.
("AOL") that certain Strategic Marketing Agreement (the "ITC/AOL Agreement"),
the form of which TRS has reviewed and determined to be acceptable for its
purposes.
The ITC/AOL Agreement contemplates the grant of certain sublicense rights from
ITC to AOL relating to the use of certain intellectual property rights owned by
TRS (the "RadioShack Marks") and licensed from TRS to ITC under the Agreement to
which this Addendum B is attached. TRS hereby authorizes the sublicense from ITC
----------
to AOL on the terms and conditions as specified below, which shall each be in
addition to any of the terms and conditions of the Agreement. Any capitalized
term used herein which is not otherwise defined shall have the meaning as set
forth in the Agreement.
Sublicense Terms and Conditions
-------------------------------
1. ITC is hereby authorized to grant to AOL a sublicense to use the RadioShack
Marks as contemplated under the ITC/AOL Agreement, the form and content of
which has been approved by TRS. ITC agrees to use its best efforts to
police AOL's use of the RadioShack Marks consistent with its current
obligations under the Agreement.
2. ITC shall have no rights of further sublicense to any party other than AOL.
ITC shall have no right to assign its interest under the ITC/AOL Agreement,
nor shall ITC permit AOL to assign its rights under the ITC/AOL Agreement,
unless and until the prior written consent of TRS is obtained. TRS may
withhold such consent, in either event, with or without cause in its sole
discretion.
3. As contemplated under the ITC/AOL Agreement, any time ITC and AOL determine
in the future to jointly make decisions regarding, among other things, the
use of product tagging or labeling, graphical depictions, taglines,
promotional materials, etc., which involve in any manner the use of a
RadioShack Mark, ITC shall seek the prior written approval of TRS, unless
it is clear to ITC under all of the relevant circumstances, that such
proposed usage of any RadioShack Mark is in full accordance with TRS's or
RadioShack's then current Graphics Standards Manual and the Agreement. In
the event ITC is required to obtain TRS's prior written approval, TRS will
respond to ITC in a prompt manner, which in any event will not exceed three
(3) business days after TRS's receipt of ITC's written request for such
approval.
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4. TRS shall have the right to audit such books and records of ITC from time
to time upon reasonable request and prior notice, relating to (i) the
performance of ITC under the ITC/AOL Agreement with respect to ITC's
obligations thereunder to prevent the shipment by ITC of any consumer
electronics products (whether private label or nationally branded) from
Canada into the United States, including in the District of Columbia,
Puerto Rico and the U.S. Virgin Islands; (ii) the gross sales recorded by
ITC as a result of the transactions contemplated under the ITC/AOL
Agreement; and (iii) the proper usage of the RadioShack Marks in ITC's
advertising and packaging.
5. TRS may revoke ITC's right to sublicense the RadioShack Marks to AOL at any
time, with immediate effect and without any liability therefor in any
manner whatsoever, upon the occurrence of the following:
(i) TRS's discovery that consumer electronic product has been or is being
shipped by ITC into the territories identified in 4(i) above in
violation of the terms of the ITC/AOL Agreement;
(ii) TRS's discovery of any under-reporting by ITC of its gross sales
generated under the ITC/AOL Agreement; or
(iii) ITC permits the persistence of an uncured breach, either by ITC or by
AOL, under the ITC/AOL Agreement which directly or indirectly relates
to or has an effect on any RadioShack Mark as determined in TRS's
sole discretion, acting reasonably.
6. Any breach by ITC of the terms and conditions of this Addendum B may, in
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TRS's sole discretion, be deemed to constitute a breach of the Agreement.
7. ITC agrees to further indemnify and hold harmless TRS and those other
entities or persons identified in Section 26 of the Agreement, to the
fullest extent provided in the indemnity provisions of Section 26 of the
Agreement, for any breach by AOL of any provisions of the ITC/AOL
Agreement.
8. To clarify the understanding and intentions of TRS and ITC, it is agreed
that the gross sales generated by ITC under the ITC/AOL Agreement shall be
subject to the royalty payment contemplated in Section 5 of the Agreement.
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