DHL Corporation and Subsidiaries - Page 125

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          would sell to DHLI an interest in the non-U.S. rights to the DHL            
          trademark.  DHL would also sell to DHLI the U.S. rights to the              
          DHL trademark, to be encumbered by the 15-year royalty-free                 
          license to DHL.  Both royalty-free licenses, as well as the                 
          elimination of DHL’s right to terminate the agreement at will,              
          could reduce the value of the DHL trademark sold by DHL.  The               
          value of the rights sold was to be determined by an appraiser but           
          would be valued as encumbered.  The transfer of the DHL trademark           
          from DHL to DHLI followed this basic structure.                             
               On April 27, 1990, DHL’s representative indicated that an              
          appraisal of the DHL trademark would have to be obtained in order           
          to set the exercise price.  Because the transaction was taxable             
          to DHL, the representative did not want the exercise price to               
          exceed fair market value, and he noted that the DHL trademark               
          would be encumbered at the time the option was granted by                   
          reciprocal long-term royalty-free licenses to DHLI and DHL, and             
          the trademark should therefore be diminished in value.                      
               The July 9, 1990, trademark option agreement provided that,            
          upon exercise of DHLI’s option to purchase DHL’s trademark                  
          rights, DHL would “retain an interest in the [DHL] Trademarks in            
          the form of a fifteen-year royalty-free license to use the                  
          Trademarks in the United States”.  At the time the trademark                
          option agreement was signed, the parties were still working on a            
          form of trademark license.  Although there were drafts of a                 
          trademark license agreement and negotiations concerning a license           




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