EXHIBIT 10.5
LICENSE AGREEMENT
THIS AGREEMENT, made and entered into this 29th day of September,
1999, by and between Weight Watchers International, Inc., a Virginia corporation
with offices located at 000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx, 00000
(hereinafter referred to as "Licensor"), and X. X. Xxxxx Company, a Pennsylvania
corporation with offices located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx,
00000 (together with its successors and assigns, hereinafter referred to as
"Licensee" or "Heinz").
WITNESSETH:
WHEREAS, Licensee seeks to license the right to manufacture, market,
distribute and sell certain food and beverage products, the Licensed Products
(as hereinafter defined), using the Trademarks (as hereinafter defined)
throughout the Territory (as hereinafter defined) as provided herein; and
WHEREAS, Licensor and Licensee wish to enter into a long-term
licensing relationship granting Licensee and its Sublicensees the continuing
right to use the Trademarks in connection with the manufacture, marketing,
distribution and sale of Licensed Products in the Territory, and setting forth
the terms and conditions governing such use;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration,
including the Recapitalization and Stock Purchase Agreement dated the 22nd day
of July, 1999 (the "Principal Agreement"), the receipt and adequacy of which is
hereby acknowledged, the parties intending to be legally bound agree as follows:
SECTION 1. Definitions. For the purposes of this Agreement:
"Affiliate" of any person shall mean any company controlled by,
controlling or under common control (that is, ownership of greater than 50% of
the voting securities) with a person after the Effective Date.
"Associated Food Trademarks" shall mean (i) all Food & Beverage
Trademarks the transfer of which to the LLC cannot be recorded prior to the
closing under the Principal Agreement because of required association under the
laws of a particular jurisdiction, including, but not limited to, those set
forth on Schedule A and (ii) all New Associated Food Trademarks.
"Confidential Information" shall have the meaning set forth in
Section 12.
"Derivative Food Trademark" shall have the meaning set forth in the
licenses between the LLC (as hereinafter defined) and Licensor and Licensee,
respectively.
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"Effective Date" shall mean the day and year first above written.
"Food & Beverage Trademarks" shall mean all registered trademarks,
trademark applications, and common law trademarks covering food and beverage
products, falling in or that would fall within any Food Class, owned by Weight
Watchers and the Companies as defined in the Principal Agreement as of the
Effective Date.
"Food Classes" shall mean International Classes 1, 5, 29, 30, 31,
32, and 33 (or comparable classes) in relation to food and beverage products.
"Food Trademark" shall have the meaning set forth in the licenses
between the LLC (as hereinafter defined) and Licensor and Licensee,
respectively.
"Licensed Products" shall mean, for purposes of this Agreement, food
and beverage products in categories specified in Schedule B hereto, which are
marketed and sold under the Weight Watchers brand (or any derivative or
translation thereof that has been specifically approved in writing by Licensor).
"Licensee's Food Trademarks" shall mean all trademarks identified in
Schedule C attached hereto.
"Licensee Retained Trademarks" shall mean all trademarks identified
in Schedule D attached hereto.
"LLC" shall mean WW Foods, LLC.
"LLC Trademarks" shall mean all trademark registrations and
applications owned by the LLC at any time.
"Multiclass Trademarks" shall mean all Food & Beverage Trademarks
consisting of registrations or applications for registration in multiple
registration classes, where such classes include both Food Classes and other
classes, including, but not limited to, those set forth on Schedule E.
"New Associated Food Trademarks" shall mean all trademark
registrations and applications filed in the name of Licensor from time to time
pursuant to Section 8(e) or (f) as the case may be of this Agreement.
"New Non-Recognition Food Trademarks" shall mean all trademark
registrations and applications filed in the name of Licensor from time to time
pursuant to Section 8(e) or (f) as the case may be of this Agreement.
"Non-Recognition Food Trademarks" shall mean (i) all Food & Beverage
Trademarks in jurisdictions where the local law or regulatory authority does not
permit, or will not
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recognize the validity of, ownership of trademarks by a limited liability
corporation or by any entity that owns but does not use (except through use by a
registered user or licensee) a trademark in that jurisdiction, including, but
not limited to, those set forth on Schedule F, and (ii) all New Non-Recognition
Food Trademarks.
"Non-Transferable Food Applications" shall mean all Food & Beverage
Trademarks that are pending applications or intent-to-use applications in
jurisdictions where the local law or regulatory authority does not permit, or
will not recognize the validity of, an assignment or transfer of such
applications, including, but not limited to, those set forth on Schedule G.
"Program Information" shall mean, for purposes of this Agreement
only, the terminology used in connection with any then-current Weight Watchers
Program as it may exist from time to time throughout the world (the current
Weight Watchers Program in the United States and Canada, the United Kingdom,
Australia and New Zealand, and France being identified in the attached Schedule
H).
"Program Information Trademarks" shall mean those trademarks owned
by Weight Watchers and used to identify the Program Information and Weight
Watchers Program, as such Weight Watchers Program may exist from time to time,
including but not limited to the current Program Information Trademarks set
forth in Schedule I. For purposes of this Agreement only, Program Information
Trademarks shall also include the "Just 2 Points" trademark and any xxxx based
upon, derived or translated from, or substantially similar to, the "Just 2
Points" trademark.
"Quality Control Requirements" shall mean the standards for use of
the Trademarks set forth in Schedule J.
"Smart Ones Package Design" shall mean the distinctive elements and
features used in labels and packaging for food products sold under both of the
Weight Watchers and Smart Ones brand names and uniquely associated therewith,
including the principal color and layout and configuration thereof.
"Sublicensee" shall mean any recipient, whether prior to or after
the Effective Date, of a license or sublicense for use of the Trademarks, and
shall include Licensee's Affiliates, where applicable.
"Territory" shall mean the world except when limited to specific
countries for specific Licensed Products as identified in Schedule A.
"Trademarks" shall mean all Associated Food Trademarks,
Non-Recognition Food Trademarks, Non-Transferable Food Applications, and
Multiclass Trademarks owned by the Licensor as set forth in Schedules A, F, G
and E attached hereto and made a part hereof, and any New Associated Food
Trademarks and New Non-Recognition Food Trademarks that may be acquired by the
Licensor from time to time.
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"Weight Watchers Program" shall mean current and future eating or
lifestyle regimens to facilitate weight loss or weight control employed,
designed, marketed or adopted in any part of the world by or on behalf of
Licensor or Licensor's Affiliates under the Weight Watchers trademark or service
xxxx.
"Weight Watchers Trademarks" shall mean all service marks and
trademarks owned, registered, applied for, used or intended to be used by Weight
Watchers or the Companies as defined in the Principal Agreement that are not
Food & Beverage Trademarks.
SECTION 2. Grant of License. Licensor hereby grants Licensee the
exclusive right and license to use the Trademarks in connection with the
manufacture, marketing, distribution and sale of Licensed Products in the
Territory, subject to the restrictions of Section 2(a)(ii) of this Agreement.
Licensee may sublicense the use of the Trademarks in connection with the
manufacture, marketing, distribution and sale of Licensed Products to a person
located or having its principal place of business in any country in the
Territory in which Licensee or Licensee's Affiliates are manufacturing,
marketing, distributing or selling any food or beverage products; provided,
however, that this sentence will not be interpreted as a limitation on the
territory that any such Sublicensee is authorized under such sublicense to
distribute and sell the Licensed Products. There is no limit to the number of
levels of sublicense that may be authorized by Licensee as long as such
sublicensee is an Affiliate of Licensee. Licensee and its Affiliates may grant a
sublicense to a person who is not an Affiliate (the "First Unaffiliated
Sublicensee"), provided that all use is in compliance with the terms of this
Agreement, but any such sublicense shall not include any right to sublicense to
any person not an Affiliate of the First Unaffiliated Sublicensee. Licensee
shall, and shall require Licensee's Affiliates and Sublicensees to, use the
Trademarks only in connection with Licensed Products which conform with the
Quality Control Requirements. Licensee and Licensee's Affiliates may utilize and
authorize Sublicensees to utilize the services of third party manufacturers to
produce the Licensed Products and will ensure that there are quality control
provisions in any third party manufacturing agreement or sublicense consistent
with the requirements of Section 3 of this Agreement.
Licensee acknowledges and agrees that Licensor shall own and have
the exclusive right to use all domain names or other means for providing direct
access to a website or dedicated portion of a website using, incorporating, or
derived from the Trademarks or the Weight Watchers Trademarks. Licensee shall
not use any of the Licensee Retained Trademarks as a domain name or as an
identifier for a means of providing access to a website or dedicated portion of
a website ("Licensee Retained Trademark Website") promoting, advertising or
selling Licensed Products. Licensee acknowledges and agrees further that access
to such Licensee Retained Trademark Websites shall only be through a website
controlled by or operated pursuant to a license from Licensor, the primary Heinz
website in each of the U.S. and Canada, and the Heinz Frozen Food website;
Licensee's websites promoting Licensed Products shall provide access by display
of a hyperlink or other means of transfer to a website to be designated by
Licensor, and the primary website operated using the Weight Watchers brand name
shall provide access by display of a hyperlink or other means of transfer to
Licensee Retained Trademark Websites promoting Licensed Products; and websites
controlled by Licensee which advertise, promote or sell Licensed Products shall
not include content substantially
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similar in nature to any website controlled by or operated pursuant to a license
from Licensor, but may include information concerning the nutritional aspects of
Licensed Products, recipes and the like. For the avoidance of doubt, Licensee
may promote, advertise and sell Licensed Products on a website using any of
Licensee's trademarks as a domain name or identifier, other than any domain name
or identifier using, incorporating, derived from or confusingly similar to
Licensee's Retained Trademarks, the Trademarks, the Program Information
Trademarks or the Weight Watchers Trademarks.
(a) Licensor hereby grants to Licensee a non-exclusive right
and license to use the Trademarks in connection with the manufacture,
marketing, distribution and sale of food and beverage products other than
the Licensed Products ("Other Products") throughout the world but only in
respect to and to the extent strictly necessary to fulfill obligations to
third parties as they may exist as of the Effective Date pursuant to those
existing licenses previously granted by Weight Watchers to parties
including Heinz or its Affiliates concerning rights to manufacture,
market, distribute or sell Other Products under the Trademarks ("Direct
Food Trademark Licenses"), including but not limited to those on the
attached Schedule K, which are or will be assigned to Heinz and as to
which Heinz has assumed the obligations of Weight Watchers, and
sublicenses previously granted by Heinz or its Affiliates to third parties
(pursuant to a license previously granted to Heinz or its Affiliates by
Weight Watchers) concerning the right to manufacture, market, distribute
or sell Other Products under the Trademarks ("Heinz Sublicenses"),
including but not limited to those that are identified on the attached
Schedule_L. The license granted hereby to Licensee, its Affiliates and
Sublicensees is conditioned upon the exercise and enforcement of
appropriate quality control by Heinz with respect to Other Products and
all uses of the Trademarks in connection therewith. Neither Licensee, its
Affiliates or Sublicensees shall have any right to use the Program
Information Trademarks on any product that is not marketed or sold under
the WEIGHT WATCHERS brand (or any derivative or translation thereof that
is specifically approved by Weight Watchers). The license granted pursuant
to this provision regarding Other Products shall have a term of five (5)
years following the Effective Date, and shall not be renewable. Nothing
herein shall be construed as granting to Licensee any right to enter into
any new agreement or to incur any new obligation with or to third parties
reflecting use of the Trademarks in connection with the marketing or sale
of Other Products, or as granting to Licensee or its Affiliates any right
to manufacture, distribute, market or sell Other Products for their own
account.
(b) To the extent that Licensee or any of its Affiliates is
currently manufacturing, marketing, distributing or selling Other Products
pursuant to a Direct Food Trademark License for its own account in a
manner that would violate the preceding provision if engaged in after the
Effective Date, Licensor hereby grants Licensee or its Affiliate, as may
be appropriate, a non-exclusive right and license for a transitional
period of ninety (90) days to use the Trademarks in the same manner in
which Licensee or its Affiliate is using such Trademarks as of the
Effective Date. Following such transitional period, Licensee or its
Affiliate, as may be appropriate, shall immediately cease any and all use
of such Trademarks unless it obtains a new license from Licensor with
respect to such use. All use by Licensee and its Affiliates of the
Trademarks during the transitional period shall otherwise be subject to
the terms of this
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Agreement. Licensor agrees to negotiate in good faith with Licensee or its
Affiliates with respect to any such new license.
(c) Licensor shall provide Licensee with access to all records
and materials related to the Trademarks upon request of Licensee.
(d) Licensor shall promptly notify Licensee of any change in
the status of the Trademarks of which Licensor becomes aware.
SECTION 3. Compliance with Quality Control Requirements. The
Licensed Products and Other Products will comply with the Quality Control
Requirements and shall be in conformance with good manufacturing practices.
Licensee shall, and shall cause its Sublicensees and Affiliates to, maintain a
level of quality that is commercially reasonable and customary to the food and
beverage industry. Licensee shall take such actions as may be reasonably
necessary to monitor, assess and enforce the Quality Control Requirements and
other quality-related obligations imposed herein, including, without limitation,
where necessary, engaging in appropriate quality audits of Licensee's
Sublicensees and Licensee's Affiliates.
(a) All products manufactured, marketed, distributed and sold
by Licensee, Licensee's Affiliates, or Sublicensees prior to the Effective
Date utilizing the Trademarks are deemed to be approved by Licensor and in
compliance with the Quality Control Requirements.
(b) During the term of this Agreement, Licensee, Licensee's
Affiliates and Sublicensees will comply in all material respects with any
and all laws, regulations, governmental decrees, and orders which are
applicable to the manufacture, marketing, distribution or sale of the
Licensed Products or Other Products in all relevant jurisdictions.
(c) During the term of this Agreement, Licensee, Licensee's
Affiliates and Sublicensees shall not exercise the rights granted
hereunder in any manner that would have a material tendency to denigrate
or otherwise materially diminish the value of the Trademarks or the
goodwill and reputation associated with the use of the Trademarks.
(d) Quality control provisions relating to the Trademarks in
third party manufacturing agreements and sublicenses entered into by
Licensee, Licensee's Affiliates or Sublicensees or by Licensor that were
existing on the Effective Date are deemed to be approved by the Licensor.
(e) Licensee shall submit reports on a quarterly basis to
Licensor regarding quality control procedures of Licensee, compliance by
Licensee, Licensee's Affiliates and Licensee's Sublicensee with the
Quality Control Requirements, and such other quality-related information
that Licensor may reasonably request. Licensor may, but need not, appoint
the LLC to perform its rights and obligations under this provision. In the
event that Licensor notifies Licensee that it has so appointed the LLC
under this provision, Licensee agrees that all
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submissions made by it pursuant to this provision shall be directed to the
LLC. Licensee further acknowledges and agrees that Licensor may, upon
notice to Licensee, revoke any appointment made by Licensor of the LLC,
for any reason or no reason.
SECTION 4. Licensor's Review of New Products. Licensee shall, and
shall cause Licensee's Affiliates and Sublicensees to, submit to Licensor for
Licensor's written approval a minimum of two samples of any proposed new
Licensed Product (including any packaging, labels or advertising or promotional
materials) for purposes of assuring compliance with the Quality Control
Requirements. Within twenty-one (21) days of receipt of such samples, Licensor
shall respond to the Licensee's, Licensee's Affiliates' or Sublicensees' request
for approval in writing setting forth in detail any objections, concerns or
questions with reasonable specificity. If Licensor so objects, Licensee, its
Affiliates and Sublicensees shall not commence sale of any proposed new Licensed
Product without Licensor's express written approval. If Licensor fails to
respond within twenty-one (21) days, such new Licensed Products shall be deemed
approved by Licensor as submitted. Licensor may object to any proposed new
Licensed Product pursuant to this provision only on the grounds that such
proposed new Licensed Product does not conform to the Quality Control
Requirements. Licensor may, but need not, appoint the LLC to perform its rights
and obligations under this provision. In the event that Licensor notifies
Licensee that it has so appointed LLC, Licensee agrees that all submissions to
be made by it pursuant to this provision shall be directed to the LLC. Licensee
further acknowledges and agrees that Licensor may, upon notice to Licensee,
revoke any appointment made by Licensor of the LLC, for any reason or no reason.
Nothing herein shall be construed as limiting or delegating any right of
approval that Licensor may have with respect to any new product that Licensee
proposes to sell under any other agreement by or among Licensor, Licensee or the
LLC.
SECTION 5. Quality Control Audit. On twenty-one (21) days' prior
written notice from Licensor and not more than once per calendar year, Licensee,
Licensee's Affiliates and Sublicensees shall permit the Licensor or its duly
authorized representatives during normal business hours and accompanied by a
representative of the Licensee, Licensee's Affiliates or Sublicensees, as
applicable, to visit those areas of their respective factories and premises at
which the Licensed Products are manufactured or distributed to ascertain
compliance by the Licensee, Licensee's Affiliates and Sublicensees with the
Quality Control Requirements. In connection with such visits, Licensor or its
duly authorized representatives may review appropriate documentation to
ascertain such compliance by Licensee, Licensee's Affiliates and Sublicensees,
but will not be entitled to copies of such documentation, other than the Quality
Control Reports for the Licensed Products. All information to which Licensor or
its duly authorized representatives is exposed and the contents of the Quality
Control Reports shall be treated as Confidential Information of Licensee,
Licensee's Affiliates or Sublicensees, as appropriate, and returned within
thirty (30) days of disclosure. Licensor may, but need not, appoint the LLC to
perform its rights and obligations under this provision. In the event that
Licensor notifies Licensee that it has so appointed the LLC, Licensee agrees to
accord to the LLC all rights of inspection, access, audit and review granted to
Licensor hereunder. Licensee further acknowledges and agrees that Licensor may,
upon notice to Licensee, revoke any appointment made by Licensor of the LLC, for
any reason or no reason.
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(a) In the event of a recall of a Licensed Product, Licensee,
Licensee's Affiliates or Sublicensees, as applicable, will inform Licensor
and the LLC and Licensor agrees that the handling of such matter will be
the responsibility of Licensee, Licensee's Affiliates or Sublicensees in
accordance with Licensee's product recall program in effect at the time.
Licensor or its duly authorized representatives (including the LLC, if so
authorized by Licensor) may review Licensee's current policy from time to
time upon request.
(b) Upon reasonable prior written request by Licensor or its
duly authorized representative (including the LLC, if so authorized by
Licensor), Licensee, Licensee's Affiliates and Sublicensees shall supply
to Licensor or to the LLC, as Licensor may direct, two samples of each of
the Licensed Products per year to enable Licensor or the LLC (on behalf of
Licensor, if so authorized by Licensor) to confirm compliance of Licensee,
Licensee's Affiliates and Sublicensees with the Quality Control
Requirements.
SECTION 6. Proprietary Rights. Licensee acknowledges for itself,
Licensee's Affiliates and Sublicensees that it and they will acquire no
ownership interest in or right to the Trademarks by virtue of the exercise of
rights granted to them in this Agreement except as may be provided herein, and
that Licensee, Licensee's Affiliates and Sublicensees will not contest, or take
any action or make any statement inconsistent with, Licensor's title to and
ownership of the Trademarks, or the validity of Licensor's registrations for the
Trademarks. Licensee agrees that all goodwill resulting from use of the
Trademarks by Licensee, Licensee's Affiliates, or Sublicensees shall inure to
the benefit of the owner of the Trademarks.
(a) Licensee shall cause, and shall cause Licensee's
Affiliates and Sublicensees to cause, the following notice to be placed on
all labels, advertising and promotional materials carrying the Trademarks:
"[TRADEMARK] is the registered
trademark of Weight Watchers International, Inc."
and when appropriate or required by law the addition:
"and used under license"
or words to that effect.
(i) Licensor acknowledges and shall not contest Licensee's or
its Affiliates' ownership of Licensee's Food Trademarks. Licensor
agrees that all goodwill associated with the use of Licensee's Food
Trademarks (but not the Trademarks) resulting from Licensee's use of
Licensee's Food Trademarks in connection with the sale of Licensed
Products shall inure to the benefit of Licensee or its Affiliates,
as appropriate. The parties recognize that Licensee's Food
Trademarks have been previously used together with the Trademarks
(e.g., Smart Ones and Weight Watchers,
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Heinz and Weight Watchers) on labels, advertising and promotions,
and that Licensee may continue to use Licensee's Food Trademarks
together with the Trademarks in the combinations and in the
jurisdictions in which they are in use as of the Effective Date, as
specified in the attached Schedule B. Licensor acknowledges that
distribution and use may extend beyond these countries because of
external circumstances outside of the control of Licensee, such as
manufacturing, warehousing, and distribution logistics or sales to
multinational accounts. Any other use of the Trademarks or Weight
Watchers Trademarks with any other marks that may be adopted for use
on food products from time to time by Licensee, its Affiliates or
Sublicensees, in such a manner as to create a material risk of the
establishment of a combination xxxx, shall not be permitted without
the permission of Licensor. Licensee shall make no claim of
ownership or right in any permitted use of the Trademarks or Weight
Watchers Trademarks in combination with any other xxxx, and the
parties shall take all steps necessary to cause the cancellation of
any existing registration or abandon any pending application
relating to any such combination, including but not limited to
"Weight Watchers from Heinz," at Licensee's expense.
(ii) Licensor agrees to the continued use of the appropriate
Trademarks (e.g., Main Street Bistro, Sweet Celebrations, Chocolate
Treat, etc.) by Licensee, its Affiliates and Sublicensees as
sub-brands in a subordinate manner to the Weight Watchers name
without prior Licensor approval. Licensee, its Affiliates and
Sublicensees may continue to use their names and corporate logos as
corporate identifiers in a substantially subordinate manner to the
Weight Watchers name for the purpose of identifying Licensee, its
Affiliates or Sublicensees, as the case may be, as the manufacturer
or distributor for Licensed Products.
(iii) Licensor and Licensee hereby grant to each other, to the
extent of their respective rights therein, a royalty-free right and
license to use (A) all proprietary elements and features (regardless
of the nature of the proprietary rights therein) of all labels or
packaging used by either of them, their respective Affiliates or
Sublicensees in connection with the marketing and sale of food and
beverage products under the Weight Watchers brand name prior to the
Effective Date, and (B) all proprietary elements and features
(regardless of the nature of the proprietary rights therein) of all
labels or packaging that either of them, their respective Affiliates
or Sublicensees may create after the Effective Date that are derived
therefrom, for the purpose of advertising, promoting, marketing or
distributing Licensed Products (as defined in their respective
licenses from the LLC); provided, however, that this provision shall
not grant to Licensor any proprietary right or ownership interest in
the Smart Ones Package Design, any of Licensee's Food Trademarks, or
the Heinz shield and/or keystone design (as used in the United
Kingdom). The licenses granted hereunder shall be exclusive with
respect to each party's Licensed Products (as defined in their
respective licenses from the LLC); provided, however, that uses
permitted to Licensor pursuant to Section 2(a)(ii) of the license
running from the LLC to Weight Watchers
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shall not be deemed to violate the exclusive rights granted
hereunder to Licensee, and uses permitted to Licensee pursuant to
Section 2(b) of the license running from the LLC to Heinz or Section
2(b) of this Agreement shall not be deemed to violate the exclusive
rights granted hereunder to Licensor.
(iv) Licensee further grants to Licensor, to the extent of
Licensee's rights therein, a royalty-free right and license to use
all proprietary elements and features (regardless of the nature of
the proprietary rights therein) of all labels and packaging used by
Licensee, its Affiliates or Sublicensees in connection with the
marketing and sale of Other Products pursuant to any Heinz
Sublicense: (A) for the purpose of continuing to perform under those
Heinz Sublicenses as they are transferred to Licensor, and (B)
subject to the rights of any other party to the applicable Heinz
Sublicense and to the limitations of the preceding paragraph, for
the purpose of advertising, promoting, marketing or distributing
Licensed Products (as defined in the license running from the LLC to
Weight Watchers). In addition, Licensee grants to Licensor a
royalty-free right and license to use the Smart Ones Package Design
or any of the Licensee Retained Trademarks used by Licensee, its
Affiliates or Sublicensees in connection with the advertising,
promotion, marketing or distribution of Other Products pursuant to
any particular Heinz Sublicense, but only in respect to and the
extent strictly necessary to fulfill obligations to third parties
existing as of the time such Heinz Sublicense is transferred to
Licensor. Nothing herein shall be construed as granting to Licensor
any right to enter into any new agreement or to incur any new
obligation with or to third parties respecting use of the Licensee
Retained Trademarks or the Smart Ones Package Design in connection
with the sale of Licensed Products (as defined in the license
running from the LLC to Weight Watchers) or granting the right to
Licensor or its Affiliates to use the Licensee Retained Trademarks
or Smart Ones Package Design in connection with the manufacture,
marketing, distribution or sale of such Licensed Products for its
own account.
(b) Licensor acknowledges Licensee's (or Licensee's
Affiliates' or Sublicensees', in appropriate circumstances) ownership of
the Licensed Products (but not any use of the Trademarks in connection
therewith), as well as the specifications, recipes, processes or other
confidential or proprietary information related to the Licensed Products.
Licensor further acknowledges that all such information shall be
considered Licensee's (or Licensee's Affiliates' or Sublicensees' in
appropriate circumstances) Confidential Information.
SECTION 7. Term and Termination. This Agreement shall take effect as
of the Effective Date and shall continue for an initial term of twenty-five (25)
years at which time this Agreement will automatically renew for consecutive
terms of twenty-five (25) years each, unless sooner terminated pursuant to
Section 7(b) or (c).
(a) Notwithstanding anything herein to the contrary, Licensor
shall have the right to terminate this Agreement effective upon 365 days'
written notice to Licensee if
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Licensee is no longer engaged in the bona fide commercial sale of at least
one of the Licensed Products anywhere in the world for a continuous period
in excess of twenty-four (24) months and does not commence the bona fide
commercial sale of at least one of the Licensed Products in any country
within such 365 day notice period.
(b) Either party has the right to terminate this Agreement
upon the written consent of the other party.
(c) Upon termination of this Agreement pursuant to this
Section 7, Licensee, Licensee's Affiliates and Sublicensees shall, unless
otherwise agreed in writing with the Licensor, cease any and all use of
the Trademarks and the obligations set forth in Sections 9, 10, 12 and 14
shall survive any termination of this Agreement.
SECTION 8. Preservation of Trademarks. Maintenance and Renewal of
Trademarks. Licensor agrees to act on such reasonable instructions as Licensee
shall provide to maintain and renew registrations for use of the Trademarks in
connection with the Licensed Products. Licensor will use its reasonable efforts
to provide Licensee with at least one hundred twenty (120) days' written notice
of Trademark renewal and maintenance due dates, except for intention to use
applications, in which case Licensor will use reasonable efforts to provide
sixty (60) days' written notice. Unless otherwise instructed by Licensee,
Licensor shall renew and maintain all such Trademarks. Licensor may, but need
not, appoint the LLC to perform its duties and obligations under this provision.
In the event that Licensor notifies Licensee that it has so appointed the LLC,
Licensee agrees to direct all instructions or other communications to be made
pursuant to this provision to the LLC. Licensee further acknowledges and agrees
that Licensor may, upon notice to Licensee, revoke any appointment made by
Licensor of the LLC, for any reason or no reason. The costs of maintaining and
renewing registrations shall be shared equally among Licensor and Licensee. If
Licensor does not appoint the LLC, Licensor shall, in the first instance, make
any necessary payments and invoice Licensee for its portion thereof, which
Licensee shall pay within thirty (30) days. If Licensor does appoint the LLC,
the LLC may make appropriate arrangements respecting any necessary payments and
reimbursement therefor by Licensee.
(a) Splitting Multiclass Trademarks. Licensor agrees to
cooperate with Licensee, at Licensee's initiative and expense, to attempt
to cause the registrations for Food & Beverage Trademarks included in the
Multiclass Trademarks to be split into two (2) registrations, one of which
covers only Food Classes (unless such separate registration, if assigned
to the LLC, would constitute an Associated Food Trademark or a
Non-Recognition Food Trademark). If any such Multiclass Trademark cannot
be split into two (2) registrations, Licensor shall apply for a new
registration covering only the Food Classes included in such Multiclass
Trademark. Upon the issuance of such new registration, Licensor shall
cancel so much of the Multiclass Trademark as is covered by the new
registration and assign and contribute the new registration to the LLC.
Such Multiclass Trademark will then be removed from the Trademarks subject
to this Agreement, with all classes other than Food Classes belonging
exclusively to Licensor and Licensee having no rights therein or thereto.
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(b) Disassociating Associated Food Trademarks. Licensor shall
further cooperate, at Licensee's initiative and expense, to attempt to
cause the Associated Food Trademarks to be disassociated from the Weight
Watchers Trademarks where permissible under local law in such a manner as
would permit the assignment of the Associated Food Trademarks to the LLC.
Licensor shall have no obligation to do so in any jurisdiction concerning
which it receives advice from counsel of its choice having expertise in
the trademark law of that jurisdiction ("Qualified Counsel") that the
Associated Food Trademarks cannot be disassociated from the Weight
Watchers Trademarks or assigned to the LLC without incurring a significant
risk that any of the Associated Food Trademarks or Weight Watchers
Trademarks will be materially adversely affected by such disassociation or
assignment. If any Associated Food Trademark is disassociated from the
Weight Watchers Trademarks, and such Associated Food Trademark is not also
a Non-Recognition Trademark, Licensor shall assign and contribute such
Associated Food Trademark to the LLC for licensing to each of Licensor and
Licensee, and such Associated Food Trademark shall be removed from the
Trademarks subject to this Agreement.
(c) Changes in Status of Trademarks. If Licensee believes that
any Non-Recognition Food Trademark is no longer required to be classified
as such under the laws of the relevant jurisdiction, it may so advise
Licensor. Licensor shall thereupon obtain, at Licensee's expense, advice
from Qualified Counsel as to whether such Non-Recognition Food Trademark
can be owned by the LLC without incurring a significant risk that any of
the Trademarks or Weight Watchers Trademarks in that jurisdiction will be
materially adversely affected thereby. If Licensor determines that any
Non-Recognition Food Trademark can be owned by the LLC without any such
risk, such Non-Recognition Food Trademark shall be assigned and
contributed to the LLC (at Licensee's expense) for licensing to Licensee
and Licensor, and shall be removed from the Trademarks subject to this
Agreement.
(d) New Registrations in Jurisdictions with Existing
Trademarks. Licensee shall not apply to register any trademark that is
substantially similar to, based upon, translated or derived from any
Trademark (a "Derivative Trademark") or any Weight Watchers Trademark in
any jurisdiction with an existing Trademark (an "Included Jurisdiction").
Licensor shall, at Licensee's request and expense, file and prosecute an
application for a Derivative Trademark in an Included Jurisdiction unless
Licensor obtains advice from Qualified Counsel that such application or
registration is likely to materially adversely affect the Trademarks or
Weight Watchers Trademarks as used by Licensor or Licensee in that
Included Jurisdiction. Upon allowance, any Derivative Trademark applied
for by Licensor (at Licensee's request or upon Licensor's own initiative)
in an Included Jurisdiction shall be included in the Trademarks subject to
this Agreement as a New Associated Food Trademark or New Non-Recognition
Food Trademark as the case may be.
(e) Registrations in New Jurisdictions. Licensor shall, at
Licensee's request and expense, apply to register Derivative Trademarks,
or Derivative Food Trademarks that the LLC has declined to apply to
register, in any jurisdiction where there is no existing Trademark
13
or Food Trademark unless Licensor obtains advice from Qualified Counsel
that such application or registration is likely to materially adversely
affect the Weight Watchers Trademarks in that jurisdiction. Upon
allowance, any Derivative Trademark or Derivative Food Trademark applied
for by Licensor (at Licensee's request or at Licensor's own initiative) in
any jurisdiction in which there is no existing Trademark or Food Trademark
shall be included in the Trademarks subject to this Agreement.
(f) Mutual Cooperation. The parties agree to cooperate with
each other and with the LLC in protecting and defending the Trademarks.
Licensee will periodically (no less than once per year or otherwise upon
reasonable written request) furnish to Licensor or, if requested by
Licensor, to the LLC with samples of all labels, promotional, advertising,
and marketing material showing its use of the Trademarks. Licensee also
agrees to cooperate with Licensor and the LLC to furnish such other
information that is required for trademark maintenance and enforcement
purposes, including information concerning sales volume and dollar value
of Licensed Products.
(g) Without limiting the generality of the foregoing, Licensee
shall not, and shall cause Licensee's Affiliates and Licensee's
Sublicensees not to, apply to register or otherwise acquire in its own
name in any jurisdiction any trademark based upon, derived or translated
from, identical or confusingly similar to any Trademark for use in
relation to any food and beverage products.
(h) The parties agree to execute such documents from time to
time as may be reasonably necessary to carry out the intent of this
Section 8.
(i) Unauthorized Use.
(i) Each party agrees to notify the other in writing of any
unauthorized use of the Trademarks by a third party promptly after
such unauthorized use comes to that party's attention. Either party
may, but shall not be obligated to, bring or cause to be brought, at
its own cost and expense, any prosecution, lawsuit, action, or
proceeding for infringement, unauthorized use, or interference with
or violation of any right granted to or by it hereunder to the
extent permissible under local law.
(ii) With respect to any infringement, unauthorized use, or
interference with or violation of the Trademarks by a third party
which does not primarily affect Licensed Products, Licensee may, at
its cost and expense, bring or cause to be brought any prosecution,
lawsuit, action, or proceeding for infringement, unauthorized use,
or interference with or violation of any of the rights of Licensee
or Licensor, provided that Licensor does not bring prompt legal
action.
(iii) Licensor shall promptly notify Licensee in writing of
any action commenced by or against Licensor (or Licensor's
Affiliates or Sublicensees) with respect to the
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Trademarks. Licensee may, but shall not be obligated to, join as a
party in such action unless the action is brought by Licensor and
Licensee's joinder is necessary under local law for the action to
proceed.
(iv) In the event of any action as described above in
Subsections (j)(i) or (j)(ii) brought by Licensee (or Licensee's
Affiliates or Sublicensees), Licensor may, but shall not be
obligated to, join as a party in any such action unless its joinder
is necessary under local law for the action to proceed. If
Licensor's joinder is necessary, it shall join in such action at
Licensee's expense.
(j) Licensee and Licensor shall each provide the other with
such assistance and information and advice as may be reasonably available
to it and which may reasonably be expected to be of assistance to the
other in respect of proceedings involving a third party concerning the
Trademarks, including being joined as a party to such proceedings (at the
expense of the other party if its joinder is necessary under local law for
the action to proceed), executing any and all documents and cooperating as
may reasonably be necessary to assist the other party's counsel in the
conduct of such defense or bringing such enforcement actions.
(k) Licensor agrees to take such action or to execute such
documents as may be necessary to empower Licensee to bring such action on
its behalf. Licensee will pay its own costs and will pay the out-of-pocket
costs of Licensor in connection with any action taken in respect to this
Section. The party bringing or defending proceedings against a third party
will have the benefit or burden of any settlement, recovery, award, loss
or expense resulting from such proceeding.
(l) Licensee, on behalf of itself, its Affiliates and
Sublicensees, agrees that Licensor shall not be liable for any damages of
any nature resulting from actions taken or not taken by Licensor pursuant
to Section 8(a) through (f) above in response to a request made by
Licensee, its Affiliates and Sublicensees, and further agrees that
Licensor shall not be held to any duty of care with respect to the
performance of its obligations thereunder other than to act in good faith
using reasonable efforts.
(m) Any determination or evaluation to be made pursuant to
Section 8(b) through (f) above concerning the substance of the advice of
Qualified Counsel received by Licensor, including the assessment of the
significance or likelihood of any risk or required treatment under the
local law of any relevant jurisdiction, shall be made by Licensor in its
sole discretion and shall not be subject to formal challenge by Licensee.
SECTION 9. Dispute Resolution. If either party commits a breach of
or is in default under this Agreement, the other party shall provide written
notice thereof specifying the nature of the breach or default and identifying
the steps required to cure the same.
(a) Upon the occurrence of any breach or default under this
Agreement,
15
Licensor or Licensee, as the case may be, in addition to any other right
provided in this Agreement or otherwise, shall have the right to make
application for a temporary, preliminary or permanent injunction, and/or
specific performance in order to prevent the continuation of such breach
or default. Each party waives any requirement that the other party be
required to post a bond in connection with any request for an injunction.
Each party acknowledges that an injunction or an order of specific
performance may be necessary to protect the Trademarks and Licensor's and
Licensee's rights hereunder as the case may be, because the Trademarks are
unique and the success and viability of the sales and marketing of
Licensed Products by Licensee and the sales and marketing of goods and
services by Licensor (whether actual or potential) depend upon Licensor's
and Licensee's compliance with the terms of this Agreement.
(b) Except as provided in Section 7, it is agreed expressly by
the parties to this Agreement that termination is not available as a
remedy for any breach or default committed by another party under this
Agreement.
SECTION 10. Indemnification. Licensee shall indemnify and agrees to
defend Licensor from any and all claims, liabilities and damages (but excluding
any incidental or consequential damages, or claims for lost profits) resulting
from or arising out of (i) the manufacture, packaging, distribution, selling,
handling, consumption or marketing of the Licensed Products, (ii) the use of the
Trademarks by Licensee, Licensee's Affiliates and Sublicensees after the
Effective Date, (iii) any action commenced by Licensee pursuant to
Section_8(j)(i) or (ii) above, whether or not Licensor joins in any such action,
or (iv) any action taken by Licensor in response to a request made by Licensee
pursuant to Section_8(a) through (f) above.
(a) Licensor shall provide Licensee with reasonable notice of
any claim for which it seeks indemnification under this Section 10 and
shall cooperate with the defense of any such claim.
(b) Each party agrees that the provisions of this Section 10
shall survive any termination of this Agreement for the period of any
applicable statute of limitations.
SECTION 11. Insurance. At all times during the term of this
Agreement, Licensee will maintain adequate professional/product liability
insurance sufficient to cover all claims related to the Licensed Products and
the business conducted by Licensee. Licensee's insurance policy shall name
Licensor as an additional insured. A copy of Licensee's current policy will be
available to Licensor upon request. Licensor acknowledges that $10,000,000 of
coverage is adequate.
(a) The insurance requirements of the first sentence of
Section 11(a) are waived as long as Licensee has a senior unsecured
long-term debt rating of at least A or its equivalent with at least two of
the following rating agencies:
(i) Standard and Poor's;
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(ii) Xxxxx'x;
(iii) I.B.C.A.;
(iv) Duff and Xxxxxx; and
(v) Fitch.
In the event that at least two of the agencies listed above are no longer
available, the parties will use rating agencies of equivalent standing.
SECTION 12. Obligations Concerning Confidentiality. The parties
acknowledge that they will exchange certain confidential or proprietary business
information and know-how (collectively, the "Confidential Information"). Except
as otherwise provided in this Agreement, all information that a party wishes to
have treated as Confidential Information shall be designated as such at the time
of its disclosure to the other party by an appropriate marking or other form of
written identification. The receiving party shall not disclose such Confidential
Information to any unauthorized third party. Confidential Information of another
party may be disclosed internally by the receiving party only to those who have
a "need-to-know" such Confidential Information. The receiving party will make no
copies of the Confidential Information except upon the written permission of the
disclosing party. The obligation of confidentiality set forth herein shall not
apply to information which was publicly available at the time of the disclosure
to the receiving party; subsequently becomes publicly available through no fault
of the receiving party; is rightfully acquired by the receiving party from a
third party who is not in breach of a confidential obligation with regard to
such information; is independently known by the receiving party whether prior to
or during the term of this Agreement; or is disclosed with the written consent
of the party who owns the Confidential Information.
SECTION 13. Assignment; Transfer. Except as provided herein, neither
party shall assign or transfer any or all its rights or obligations under this
Agreement, directly or indirectly, without the express written consent of the
other party.
(a) Either party hereto can assign or transfer its rights, but
not any partial interest therein, under this Agreement with the consent of
the other party or without the consent of any other party or person if the
assignment or transfer is made (i) to an Affiliate or (ii) to a purchaser
of all or substantially all of the assets to which the transferor or
assignor party's use of the Trademarks relates, provided that (x) the
Affiliate or purchaser agrees in writing to be bound to all of the terms
of this Agreement and (y) the Affiliate or purchaser will also assume
ownership of the transferor or assignor party's membership interest in the
LLC and of its rights and obligations under the Limited Liability Company
Agreement of WW Foods, LLC, dated September 29, 1999 (the "LLC
Agreement").
(b) For the avoidance of doubt, it is expressly understood and
agreed that neither the sale nor issuance of stock by a party, nor the
granting of any security interest in or pledge of a collateral interest in
a party's rights in or to the Trademarks or this Agreement, standing
alone, shall constitute an assignment or transfer subject to this Section
13 or otherwise require the consent of any other party or person.
17
(c) Any attempt at assignment or transfer by any party in
violation of the provisions hereof shall be void. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns.
SECTION 14. Costs and Expenses. Except as expressly provided herein,
each party agrees to be responsible for its respective costs and expenses
arising from their entry into this Agreement.
SECTION 15. Notices. Unless otherwise specified herein, notices to
the parties shall be sent by prepaid certified or registered mail, or by a
national overnight courier service, to the parties at the following addresses
(or at such other address as shall be specified by like notice) and notice will
be deemed to have been received by the other party two days after mailing in the
case of certified or registered mail and the day after mailing in the case of
notice sent by overnight courier. Notices shall be addressed as follows:
(i) if to Licensee:
X. X. Xxxxx Company
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President with a copy to the General Counsel
(ii) if to Licensor:
Weight Watchers International, Inc.
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx, 00000
Attn: President with a copy to the General Counsel
SECTION 16. Governing Law. This Agreement is entered into in the
State of New York and the validity, construction and effect of this Agreement
(and all performance related thereto) shall be governed, enforced and
interpreted under the laws of the State of New York relating to contracts
entered into and to be fully performed therein.
SECTION 17. Miscellaneous. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person
other than Licensor or Licensee any rights or remedies under this Agreement.
(a) The failure of either party to insist on compliance with
any provision hereof shall not constitute a waiver or modification of such
provision or any other provision nor shall resort to a remedy constitute a
waiver of the right to resort to another remedy provided for under this
Agreement.
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(b) If any provision hereof is held to be invalid or
unenforceable by any court of competent jurisdiction or any other
authority vested with jurisdiction, such holding shall not affect the
validity or enforceability of any other provision hereto.
(c) The section order and headings are for convenience only
and shall not be deemed to affect in any way the language, obligations or
the provisions to which they refer.
(d) The parties will not be deemed to have a relationship of
joint venturer, partner or employer/employee with the other. Neither party
shall have the right to incur any obligation on behalf of the other or
have any interest in the profit or liabilities of the other.
(e) This Agreement, including this provision of this
Agreement, may be amended or modified only in writing and when executed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
WEIGHT WATCHERS INTERNATIONAL
By: ______________________________________
Name:
Title:
X. X. XXXXX COMPANY
By: ______________________________________
Name:
Title:
