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Exhibit 10.8
TRADEMARK SUBLICENSE AGREEMENT
THIS AGREEMENT, made this 16th day of December, 1993, by and between Nestle Food
Company, a Delaware corporation with its principal place of business at 000
Xxxxx Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
"Nestle") and Delicious Cookie Company, Inc., an Illinois corporation with its
principal place of business in Des Plaines, Illinois, (hereinafter "DCC").
WHEREAS, Nestle's affiliate, Societe des Produits Nestle S.A. (hereinafter "the
Registered Trademark Owner"), is the registered owner of the Trademarks as
hereinafter defined and Nestle is the licensee thereof in the Territory as
hereinafter defined; and
WHEREAS, the Registered Trademark Owner has authorized Nestle to enter into this
sublicense agreement on the terms and conditions hereinafter set forth; and
WHEREAS, DCC desires to license the Trademarks in Section 1.1 in the Territory
identified in Section 1.2 in connection with the manufacture, marketing and sale
of certain cookie products; and
WHEREAS, Nestle is willing to grant such a sublicense to DCC subject to the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties agree as follows:
1. Definitions
The following definitions shall apply for the purposes of this Agreement:
1.1 Trademarks - The term "Trademarks" shall mean only the trademarks NESTLE(R)
BUTTERFINGER(TM) and NESTLE(R) RAISINETS(TM).
1.2 Territory - The term "Territory" shall mean only the United States and its
territories.
1.3 Licensed Products - The term "Licensed Products" shall mean packaged,
ready-to-eat cookies produced in accordance with formulas and specifications
approved by Nestle and containing Ingredients supplied by Nestle.
1.4 Net Sales - The term "Net Sales" shall mean gross sales of Licensed Products
less cash discounts and merchandising allowances.
1.5 Ingredients - The term "Ingredients" shall mean the products sold by Nestle
to DCC under the Trademarks.
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2. Grant of License
2.1 Subject to the terms and conditions set forth herein, Nestle does hereby
grant to DCC a royalty-bearing, non-exclusive license to utilize Trademarks in
Territory only in connection with the manufacture, marketing and sale of
Licensed Products. DCC hereby accepts such license.
2.2 DCC agrees not to grant any license or sublicense of Trademarks and shall
not otherwise assign or transfer any rights granted by Nestle pursuant to this
Agreement. It is understood by the parties that the manufacture of the Licensed
product(s) may be performed by a party designated by DCC if such third party
manufacturer is acceptable to Nestle and if such third party enters into an
agreement acceptable to Nestle. Notwithstanding the foregoing, DCC shall remain
responsible for the manufacturing of the licensed product(s) hereunder.
2.3 The parties agree that nothing herein shall prohibit Nestle from utilizing
or permitting third parties to utilize Trademarks on any products inside or
outside of the Territory, and Nestle expressly reserves the right to do so.
3. Term
The term of this Agreement shall commence on the day and year first above
written and shall continue for a period of two years ("Initial Term"). If
neither party has terminated this Agreement upon the expiration of the Initial
Term, then commencing upon the conclusion of the Initial Term, this Agreement
shall be automatically renewed for successive two year terms unless earlier
termination occurs as provided for in this Agreement.
4. Termination
4.1 Either party may terminate this Agreement at any time, whether during the
Initial Term or any term thereafter, with or without cause, by providing the
other party with one hundred twenty (120) days prior written notice of its
intent to terminate. The termination shall be effective at the conclusion of the
one hundred twenty (120) day period.
4.2 In the event either party elects to so terminate, DCC shall continue to
remit to Nestle the royalty payments due Nestle as the same may become due
during the 120-day notice period, which shall be deemed to commence on the date
of either party's receipt of notice, or thereafter if such payments become due
after the 120-day notice period.
4.3 In the event either party breaches any material provision of this Agreement,
the non-defaulting party may provide the breaching party with thirty (30) days
written notice and opportunity to cure. If the breach is not cured within the
thirty (30) day period, this Agreement shall automatically terminate at the end
of such period subject to DCC's right to sell off the Licensed Products as
provided herein. If the breach is cured within the thirty (30) day period, this
Agreement shall continue in full force and effect.
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4.4 In the event either party becomes insolvent; files or has filed against it
involuntarily a petition under the United States Bankruptcy Code or under or
pursuant to any state bankruptcy act or under any similar Federal or state law;
makes a general assignment for the benefit of creditors; admits in writing its
inability to pay its debts generally as they become due; or suspends or
terminates its operations or liquidates or dissolves, then, without limitation,
this Agreement shall automatically terminate.
5. Effects of Termination
5.1 Immediately upon the expiration or termination of this Agreement, DCC shall
cease all use of Trademarks; provided however, the parties agree that DCC shall
have up to one hundred eighty (180) days to sell existing inventories and use
existing packaging and/or findings of Licensed products on DCC's normal terms
and conditions. The parties further agree that Nestle may, in its sole
discretion, purchase all or a portion of Licensed Products, or any component
thereof, at DCC's actual cost.
5.2 Within a reasonable period of time following expiration or termination, but
in no event more than seven (7) months following expiration or termination, DCC
agrees to provide to Nestle a final royalty report and royalty payment.
6. Quality Assurance
6.1 DCC agrees to provide for the opportunity and allow Nestle's and the
Registered Trademark Owner's quality assurance personnel, or their designated
representatives, to inspect and approve all facilities that supply ingredients
or packaging for Licensed Products or at which Licensed Products are going to be
manufactured or stored prior to the initial manufacture and on a semi-annual
basis thereafter, provided, however, in the event Licensed Products at any time
fail to comply with the provisions set forth in Sections 7.2 and 7.3, Nestle
shall have the right to have a representative present at its own expense for all
production runs of all Licensed Products at the facility(s) that produce the
substandard product(s) until all defects are resolved to Nestle's satisfaction.
Nestle agrees to provide DCC with reasonable prior notice of such inspections.
6.2 DCC agrees to correct any reasonable defects that affect the quality of
Licensed Products noted by Nestle's or the Registered Trademark Owner's quality
assurance personnel and provide Nestle with a written response detailing the
actions taken to correct such defects within thirty (30) days after such
observations were made by Nestle's or the Registered Trademark Owner's
representative.
6.3 Contract Packing Obligations: All Licensed Products shall be produced,
packaged and distributed in accordance with DCC's obligations set forth in this
agreement and in accordance with Good Manufacturing Practices prevailing in the
industry.
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7. Quality Control
7.1 DCC acknowledges the valuable goodwill associated with Trademarks and
desires to maintain the validity of Trademarks and the goodwill associated
therewith and DCC agrees, therefore, to maintain high standards in the
manufacturing, packaging and storing of Licensed Products.
7.2 DCC agrees that Licensed Products shall be manufactured, packaged, stored,
distributed and marketed in accordance with all applicable Federal, state and/or
local laws and regulations. DCC further agrees that all facilities utilized to
manufacture, package or store Licensed Products shall be maintained in
accordance with all applicable Federal, state and/or local laws and regulations.
7.3 DCC agrees that Licensed Products shall be manufactured and packaged in
strict accordance with the formulas, product specifications, quality
specifications and samples approved by Nestle prior to the initial manufacture.
In the event Licensed Products are not manufactured and packaged in accordance
with such formulas, specifications and samples, Nestle shall have the right to
terminate this agreement pursuant to Section 4.3. Additionally, Nestle shall
have the right to require immediate corrective action and shall have the right
to place on hold any Licensed Products not meeting such formulas, specifications
and/or samples. In the event DCC desires to make any changes to the formulas or
specifications for Licensed Products, DCC shall provide Nestle with revised
formulas, product and quality specifications and samples for Nestle's approval
prior to the manufacture of the revised Licensed Products. Nestle shall respond
to such revisions as soon as reasonably possible. DCC agrees not to manufacture
revised Licensed Products without Nestle's prior consent.
7.4 DCC agrees to provide Nestle with samples of all Licensed Products upon
request from Nestle. DCC further agrees to make any reasonable changes requested
by Nestle which Nestle deems necessary to maintain the quality of Licensed
Products.
7.5 DCC shall allow Nestle to inspect a copy of all quality control manuals and
records which relate to the manufacture, packaging or storage of Licensed
Products. DCC agrees to manufacture, package and stock Licensed Products in
strict accordance with such manuals.
7.6 DCC agrees to provide for the opportunity and allow Nestle's quality control
personnel to be present at its own expense at all production runs of Licensed
Products.
8. Ingredients supplied by Nestle
8.1 The parties agree that Ingredients utilized in Licensed Products must be
provided by Nestle.
8.2 DCC agrees to provide Nestle with a forecast of DCC's requirements of
Ingredients to be supplied by Nestle at least 45 days prior to the initial
production of Licensed Products and,
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thereafter, at regular mutually agreeable intervals. The first month of such
forecast shall constitute a firm order and Nestle agrees to provide DCC with the
Ingredients it ordered in accordance with the delivery dates in the firm order.
8.3 Nestle agrees that the price for Ingredients shall be in accordance with
Nestle's then-current published price list for such Ingredients F.O.B. Nestle's
plant. The contract manufacturer to whom the Ingredients are shipped shall pay
Nestle for all Ingredients invoiced within thirty days of the date of the
invoice, DCC guarantees the payment of all such amounts.
8.4 Nestle agrees that the Ingredients that it sells to DCC shall, as of the
date of shipment, not be adulterated or misbranded within the meaning of any
local, state or Federal law, regulation, ordinance, rule or procedures and shall
not be a product which may not be sold in interstate commerce pursuant to the
Food, Drug and Cosmetic Act, as amended.
9. Royalty
9.1 The parties agree that during all terms of this Agreement DCC shall pay to
Nestle a royalty in the amount of two (2) percent of Net Sales.
9.2 The parties agree that all royalty payments shall be made by DCC within
thirty (30) days following the end of each calendar quarter during the terms of
this Agreement.
10. Advertising/Promotional Materials
DCC shall submit to Nestle and Nestle shall have the right to approve prior to
use, samples of all materials including, without limitation, all packaging,
labeling, advertising and promotional materials, that utilize or incorporate
Trademarks in any way. Nestle shall use its best efforts to approve or
communicate any objection of such samples within ten (10) business days
following Nestle's receipt of such materials. DCC agrees to make all reasonable
changes requested by Nestle.
11. Trademarks
11.1 DCC agrees that nothing herein shall give DCC any rights, title or interest
in or to Trademarks, except the right to utilize Trademarks in accordance with
the terms of this Agreement, and that Trademarks are the sole property of Nestle
and The Registered Trademark Owner and any goodwill generated from any and all
uses of Trademarks shall inure to the benefit of Nestle and the Registered
Trademark Owner.
11.2 DCC agrees to assign to the Registered Trademark Owner, on the expiration
or termination of this Agreement and without any additional consideration, any
rights and equities related to Trademarks and any goodwill incidental to such
rights that may be vested in DCC as a result of the activities of DCC pursuant
to this Agreement.
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11.3 DCC acknowledges the valuable goodwill associated with the Trademarks and
it desires to maintain the validity of the Trademarks and the goodwill
associated with the Trademarks for the benefit of the Nestle and the Registered
Trademark Owner. DCC agrees, therefore, to utilize Trademarks in strict
accordance with proper Trademark usage and the directions of Nestle. DCC shall
not, directly or indirectly, attack or assist a third party in attacking the
validity of Trademarks.
11.4 DCC agrees not to act, directly or indirectly, in any manner which might
lead a third party to believe that Trademarks are owned by DCC.
11.5 On the packaging, labels, advertising and other materials which utilize
Trademarks, DCC agrees that:
(a) The registered trademark symbol "(R)" shall be utilized in conjunction
with NESTLE.
(b) The trademark Symbol "TM" shall be utilized in conjunction with
BUTTERFINGER and RAISINETS.
(c) The statement "NESTLE, BUTTERFINGER, and RAISINETS are trademarks of
Nestle" shall be clearly displayed.
11.6 DCC agrees not to seek any trademark registration anywhere in connection
with its use of Trademarks.
11.7 DCC agrees not to adopt or use any xxxx, symbol or trade dress that is
similar to Trademarks or any of Nestle's other trademarks, trade names, or trade
dress.
11.8 DCC agrees not to utilize Trademarks in any unauthorized manner.
11.9 DCC agrees upon the request of and at the expense of Nestle, to reasonably
aid and assist Nestle in the registration and maintenance of Trademarks and in
any litigation or resolution of claims with respect to Trademarks.
11.10 DCC shall have no right to expand the scope of protection afforded the
Trademarks. DCC shall use the Trademarks only in the manner and style as is
provided by Nestle or approved by it, and shall not use any marks confusingly
similar to Trademarks, including any modified version thereof, in any way.
11.11 DCC agrees to notify Nestle of any non-Nestle trademark or trade names
which are similar in sight, sound, or appearance to Trademarks. DCC expressly
agrees that it shall take no action with regards to such trademarks or trade
names other than notification of Nestle. Nestle shall have the sole right to
decide whether or not to take action against such trademarks or trade names.
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12. Delicious Trademark Protection
12.1 Nestle agrees that nothing herein shall give Nestle any rights, title or
interest in or to any of DCC's trademarks, and that such trademarks are the sole
property of DCC and any goodwill generated from any and all uses of such
trademarks shall inure to the benefit of DCC. Nestle shall not, directly or
indirectly, attack or assist a third party in attacking the validity of DCC's
trademarks.
12.2 Nestle agrees not to adopt or use any xxxx or symbol that is likely to
cause confusion with the trademark DELICIOUS for cookies or baked goods in the
Territory or with any trademark symbol of DCC for cookies or baked goods in the
Territory.
13. Representations and Warranties of DCC
DCC hereby makes the following representations and warranties:
13.1 The making of this Agreement does not violate any rights or obligations
existing between DCC and any third party; and
13.2 Licensed Products shall not be adulterated or misbranded within the meaning
of any local, state or Federal law, regulation, ordinance, rule or procedures
and shall not be a product which may not be sold in interstate commerce pursuant
to the Food, Drug and Cosmetic Act, as amended; and
13.3 Licensed Products shall be in compliance with all local, state and Federal
laws, regulations, ordinances, rules and procedures; and
13.4 Licensed Products shall be in strict compliance with all formulas,
specifications and samples provided or approved by Nestle.
14. Representations and Warranties of Nestle
Nestle hereby makes the following representations and warranties:
14.1 The making of this Agreement does not violate any rights or obligations
existing between Nestle and any third party or the Registered Trademark Owner
and any third party; and
14.2 Nestle has the right to grant this sublicense to Licensed Trademarks in
accordance with the terms and conditions of this Agreement.
14.3 Ingredients provided by Nestle shall be in compliance with all local, state
and Federal laws, regulations, ordinances, rules and procedures.
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15. Indemnification
15.1 DCC hereby indemnifies and holds harmless Nestle and the Registered
Trademark Owner, and will defend or cause them to be defended, from and against
any and all claims, demands, causes of action, losses, damages, costs and
expenses (including reasonable attorneys' fees) arising out of or in any way
connected with a breach by DCC of any of the representations or warranties set
forth in Section 13 above or arising from or in any way connected with the
intentional acts or omissions or negligence of DCC or arising from or in any way
connected with DCC's failure to perform or failure to perform properly any of
its contractual obligations.
15.2 DCC hereby indemnifies and holds harmless Nestle and the Registered
Trademark Owner, and will defend or cause Nestle and the Registered Trademark
Owner to be defended, from and against any and all claims, demands, causes of
action, losses, damages, costs and expenses (including reasonable attorneys'
fees) arising out of or in any way connected with Licensed Products, except
claims arising out of or in any connected with Trademarks.
15.3 Nestle hereby indemnifies and holds harmless DCC and will defend or cause
DCC to be defended, from and against, any and all claims, demands, causes of
action, losses, damages, costs and expenses (including reasonable attorneys'
fees) arising out of or in any way connected with Nestle's breach of any of its
representations or warranties set forth in Section 14 above or arising out of or
in any way connected with Nestle's intentional acts or omissions or negligence
or arising out of or in any way connected with Nestle's failure to perform or
failure to perform properly any of its contractual obligations, or arising out
of or in any way connected with Nestle's breach of the provisions set forth in
Section 8.3.
16. Insurance
16.1 At all times during the term of this Agreement and for at least one (1)
year following the expiration or termination of this Agreement, DCC shall
provide to Nestle documents evidencing the existence of Comprehensive General
Liability Insurance combined with single limits of not less that $7,000,000 per
occurrence per property damage and bodily injury. This insurance shall include
the following coverages:
(a) Contractual Liability covering the indemnity provisions contained in
this Agreement; and
(b) Products Liability, including completed operations, covering all
Licensed Products manufactured pursuant to this Agreement.
16.2 DCC agrees to make certain that there is carried at all times during the
term(s) of this Agreement workmen's compensation insurance in accordance with
the statutory limits required by the state in which Licensed Products are
manufactured.
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16.3 The insurance policies required by this Section shall provide that all such
policies may not be canceled or the coverage changed in any material way without
at least thirty (30) days written notice to Nestle.
17. Product Recovery
Nestle or DCC may determine whether or not to implement a product recall
recovery or retrieval relating to Licensed Products. DCC agrees to carry out, in
accordance with the procedures mutually agreed upon by the parties, all product
recalls, recoveries and retrievals for Licensed Products and shall bear all
costs and expenses associated therewith, unless such product recall, recovery or
retrieval is due solely to a defect traced to Nestle in which case Nestle shall
bear all costs and expenses associated therewith. Nestle's Withdrawal and Recall
Policy is attached hereto as Exhibit A.
18. Records
18.1 DCC agrees to retain and maintain all records relating to Licensed
Products, including, but not limited to, production records, quality control
records, records relating to the type and cost of advertising Licensed Products,
records relating to the sales (gross and net) and other transfers of Licensed
Products, and all other related records for a period of at least three (3) years
following the date for which those records apply.
18.2 DCC agrees that Nestle shall be given access to and shall have the right to
inspect all such records on a confidential basis at any time during DCC's normal
business hours; provided, however, Nestle agrees to provide DCC with reasonable
prior notice of such inspection.
19. Force Majeure
Either party's failure to perform the terms and conditions of this Agreement, in
whole or in part, shall not be deemed a breach or a default hereunder or give
rise to any liability of either party to the other if such failure is
attributable to any act of God, riot, public enemy, fire, explosion, flood,
drought, war, sabotage, accident, action by governmental authority or any other
conditions beyond the reasonable control of the other party.
20. Relationship of Parties
This Agreement is not intended and shall not be construed to constitute either
party the joint venture or franchising partner, agent, or legal representative
of the other, and neither party shall have any authority, expressed, implied or
apparent, to assume or create any obligations on behalf of or in the name of the
other party.
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21. Severability
The provisions of this Agreement shall be severable and the invalidity of any
provision, or portion thereof, shall not affect the enforceability of the
remaining provisions of this Agreement.
22. Waiver
Failure of any party hereto to enforce any of the provisions of this Agreement,
or any rights with respect thereto, or failure to exercise any election provided
for herein, shall in no way constitute a waiver of such provisions, rights, or
elections, or in any way affect the validity of this Agreement. Failure of any
party hereto to enforce any of said provisions, rights, or elections shall not
prejudice such party from later enforcing or exercising some or any other
provisions, rights or elections which it may have under this Agreement.
23. Notice
Any notice required or permitted under this Agreement shall be deemed to have
been received within two (2) business days after written notice shall be
deposited, first class, postage prepaid, in the United States mail addressed to
the respective parties as set forth below or to such address as each party may
hereafter designate by written notice to the other party:
To: Nestle Food Company
c/o Nestle USA, Inc. Legal Department
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
With a copy to: Societe des Produits Nestle S.A.
Attn: Trademark Service
1800 Vevey
Switzerland
IN WITNESS WHEREOF, authorized representatives of the parties hereto have
executed this Agreement effective the day and year first above written.
DELICIOUS COOKIE COMPANY, INC. NESTLE FOOD COMPANY
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Its: Chairman & CEO Its: President & Chief
Executive Officer
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EXHIBIT A
WITHDRAWAL AND RECALL POLICY
It is Nestle's policy to remove from distribution and sale any manufactured or
marketed product, should consumer safety and well-being be threatened or should
a product's quality seriously impair consumer confidence in our products and/or
Nestle's reputation. It should be stressed that in the event of a recall action,
Nestle will act responsibly and ethically with the consumer, government agencies
and our suppliers and licensed or authorized packers. The following comments
reflect Nestle policy and may be helpful to licensees and authorized packers.
A. The decision to recall, and the implementation of any recall action
involving products bearing Nestle's name or any trademarks owned by or
licensed to Nestle, is the responsibility of Nestle.
B. The FDA "enforcement policy" Recalls - Guidelines on Policy Procedures and
Industry Procedures (43 FR 26202-21, 6/17/78) is to be used as a general
guideline in implementing a recall action.
C. It should be understood that Nestle should not institute a product recall
regarding Product manufactured, distributed to sold by licensees and
authorized packers without informing licensees and authorized packers of
such product recall. Likewise, licensees and authorized packers should
immediately inform Nestle should it be necessary for them to recall any
product made for itself or other customers.
D. Nestle shall prepare and authorize any and all statements to regulatory
authorizes, media, consumers and customers concerning products bearing
Nestle's name or any trademarks owned by or licensed to Nestle.
E. In the event of a recall action, licensees and authorized packers shall
immediately make available full reports of all phone calls, conversations,
meetings, and written communications with any government agencies, media
representatives, customers or consumers.
F. Complete records of all production and shipment, by code, shall be
maintained and promptly made available to Nestle upon request.
G. Disposition of any affected product shall be determined by Nestle.
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