Exhibit 10.7
TRADEMARK CO-EXISTENCE AGREEMENT
This Trademark Co-Existence Agreement (this "Agreement") is made and
entered into as of this June 30, 2005, by and between Xxxxxx X. Xxxxxx, an
individual ("Popeil"), and Ronco Marketing Corporation, a Delaware corporation
("RMC").
RECITALS
A. Reference is hereby made to that certain Asset Purchase Agreement (the
"Asset Purchase Agreement"), dated December 10, 2004, by and among Popeil, Ronco
Inventions, LLC, Popeil Inventions, Inc., RP Productions, Inc., RMP Family Trust
(collectively, the "Popeil Entities"), on the one hand, and RMC, on the other
hand.
B. Pursuant to the Asset Purchase Agreement, the Popeil Entities have
agreed to sell, transfer, convey, assign and deliver certain assets to RMC,
including without limitation the Intellectual Property (as defined in the Asset
Purchase Agreement), which includes all of the Popeil Entities' right, title and
interest in and to the trademarks POPEIL and XXX XXXXXX (collectively, the marks
POPEIL and XXX XXXXXX, together with the name, approved likeness, approved
silhouette and voice of Popeil shall be referred to herein as the "Marks").
C. Pursuant to the Asset Purchase Agreement, the parties hereto have
agreed that Popeil shall retain certain use and approval rights in and to the
Marks for only specified purposes as set forth herein.
X. Xxxxxx and RMC desire to assure worldwide peaceful co-existence of
their respective exclusive use rights in and to the Marks in accordance with the
terms set forth herein.
AGREEMENT
In consideration of the mutual covenants and undertakings set forth in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Consent to Co-Exist.
(a) RMC hereby acknowledges and agrees that Popeil shall have the
right to use and exploit the Retained Rights (as defined below) in connection
with the Marks throughout the universe in perpetuity, in accordance with the
terms and conditions set forth herein. RMC shall not object to, oppose or
otherwise seek to limit in any way Popeil's exercise of the Retained Rights; nor
shall RMC use or exploit the Retained Rights in any manner.
(b) Popeil hereby acknowledges and agrees that, except as set forth
herein with respect to Popeil's rights to the Retained Rights and Popeil's
rights under paragraph 10 below, RMC shall have the right to use and exploit the
Marks throughout the universe in perpetuity in accordance with the terms and
conditions set forth herein. Except as otherwise provided for herein, Popeil
shall not object to, oppose or otherwise seek to limit in any way RMC's exercise
of its rights to the Marks.
(c) Given the disparate channels of trade, different targeted
consumers, and dissimilar focus of the parties' goods and services, the parties
have determined that their respective uses of the Marks are not likely to cause
confusion, mistake, or deception as to the source or sponsorship of each of the
parties' goods and services.
(d) The parties agree that in the event that any confusion arises,
they will cooperate and find ways to eliminate or minimize the confusion,
without the obligation for either party to cease or further restrict their
respective uses of the Marks.
2. Term. The term of this Agreement shall commence upon the Closing Date
(as such term is defined in the Asset Purchase Agreement) and shall continue in
perpetuity.
3. Retained Rights.
(a) Further to the Asset Purchase Agreement, Popeil shall retain the
following worldwide royalty-free perpetual exclusive rights in and to the Marks
(collectively, the "Retained Rights"):
(i) Popeil or his designees will have the right to use the
Marks and/or license the Marks to any third party for use in connection with any
Exempted Works, as such term is defined in the New Product Development
Agreement, and any products or works derived or resulting from such Exempted
Works;
(ii) Popeil or his designees will have the right to use and
license the phrase "invented by Xxx Xxxxxx" or "created by Xxx Xxxxxx" (each as
and only to the extent permitted under the New Product Development Agreement);
(iii) Popeil or his designees will retain the right to use the
Marks in connection with, and to the extent licensed pursuant to that certain
agreement between IGT and Popeil, dated February 27, 2004;
(iv) Popeil shall have the right to use the Marks and/or to
license the Marks to any third party for use (a) in any book or article
(collectively, any "Publication"), or any motion picture, television or home
video production (collectively, any "Production") featuring, about and/or
created by Xxxxxx X. Xxxxxx including, without limitation, the motion picture
tentatively entitled "Salesman of the Century" and any television program or
series (including, by way of example but not limitation, any cooking show on
which Xxxxxx X. Xxxxxx appears and/or any reality-based or fictional program or
series, but not including any home shopping or infomercial-type program, the
principal purpose of which is to obtain and fulfill sales orders); (b) on the
advertising, marketing, promotional and/or packaging materials for any
Publication or Production; (c) on any ancillary merchandise usually and
customarily offered in connection with motion pictures and television
productions (e.g., t-shirts, sweatshirts, hats, aprons and other clothing,
companion books and other printed materials, mugs, posters, and soundtrack
albums, videocassettes and DVD's, theme park attractions, etc.) offered in
connection with any Publication or Production (but specifically excluding any
merchandise that competes with any of the 5 Product Line Categories set forth in
the New Product Development Agreement of even date entered into among Popeil,
Xxxx X. Xxxxxx and RMC); and (d) on or in connection with any slot machine or
other such gaming device featuring the Marks;
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(v) Popeil or his designees will have the right to utilize and
depict any or all of the Ronco (as defined in the Asset Purchase Agreement)
products in and in connection with any of the foregoing retained rights,
including, without limitation, in motion pictures, IGT gaming devices and
related goods (e.g., signs, seats and promotional materials); and
(vi) Popeil will retain the right to enter into a licensing or other
arrangement with Xxxx Xxx Corporation on behalf of RMC under which such
manufacturer(s) or distributor(s) will have the right to manufacture and sell
food products bearing the Popeil or Ronco name; provided, that 100% of any
royalties, minimum guarantees or similar payments received by RMC from any such
arrangement will be applied to repayment of the Notes issued by RMC pursuant to
the Asset Purchase Agreement until all obligations under such Notes have been
repaid in full (such payments to be made to the holder of the Notes or to a
designee duly acting on behalf of such holder), and thereafter Popeil, in his
individual capacity, will be entitled to 50% of any such gross royalties or
gross payments received by RMC and RMC will be entitled to the remaining 50% of
any such royalties or payments received by RMC.
4. Existing Third Party Rights To Marks. RMC hereby further acknowledges
that its rights in and to the Marks as acquired under the Asset Purchase
Agreement are subject to the third party rights to Popeil's name and likeness
previously granted to QVC pursuant to that certain agreement dated as of April
2, 2000, between QVC, Inc. and Ronco, Inc.
5. Consideration. In consideration of the rights granted to each party
hereunder and under the Asset Purchase Agreement, each party agrees to be bound
by the applicable terms and conditions hereof and all of their respective
representations, warranties and agreements hereunder and thereunder.
6. Quality Control.
(a) The quality of all of the goods and products in connection with
which RMC uses the Marks (collectively, the "Products") shall equal or exceed
the quality of the products in connection with which the Marks have been
previously used by Popeil. Without limiting the foregoing, any infomercial
produced in connection with any Product shall be truthful and shall not mislead
consumers in any manner whatsoever, and, in the event RMC changes any existing
infomercial conveyed to RMC pursuant to the Asset Purchase Agreement in any
manner whatsoever, the resulting infomercial shall also be truthful and shall
not mislead consumers in any manner whatsoever.
(b) Each party shall accurately reproduce the Marks. No partial
version of the Marks, or any fragments thereof, nor any modified or derivative
version of the Marks, may be used at any time for any purpose without the
express written consent of the other party in each instance. Neither party shall
combine any other trademark, service xxxx or trade name with the Marks, without
the express prior written consent of the other party in each instance.
(c) Popeil shall have the right to inspect and approve in writing
(which approval shall not be unreasonably withheld or delayed) the products and
all packaging and marketing materials to be used in connection therewith prior
to their introduction into the market to ensure that they are in compliance with
the provisions of this paragraph.
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7. Registration and Protection of the Xxxx. Popeil shall reasonably
cooperate with RMC in protecting all rights in and to the Marks. Notwithstanding
the foregoing, in no event shall Popeil be required to bear any costs or incur
any expenses in connection with the protection of the Marks.
8. Approval Rights. Notwithstanding the assignment of the Marks to RMC
under the Asset Purchase Agreement, Popeil will retain the right to approve all
uses of the Marks for any purpose including without limitation in connection
with the quality of the Products and the Products, the quality of packaging and
packaging, the quality of advertising and advertising and the quality of
displays and displays, but such approval is not to be unreasonably withheld or
delayed. In the event that RMC does not receive such express written approval
within ten (10) business days after submission of a proposed use to Popeil, such
use shall be deemed disapproved. Without limiting the circumstances under which
Popeil may withhold his approval, the parties agree that it would be reasonable
for Popeil to withhold his approval with respect to a use of the Marks which is,
in Popeil's good faith judgment, inconsistent with the personal identity of
Xxxxxx X. Xxxxxx (e.g., if his name or likeness was used to market cigarettes,
sexual devices, etc.) or if the Marks were to be used for products that are, in
Popeil's good faith judgment, inferior to existing products marketed and/or sold
by Popeil or the Popeil Entities. At such time as Popeil dies or becomes
permanently incapacitated, Xxxxx X. Xxxxx, as Popeil's representative and agent
for purposes of the approval rights described herein, shall exercise the right
of approval described above; provided, that Popeil may, during his lifetime,
from time to time upon written notice to RMC, remove Xx. Xxxxx and appoint any
of Xxxx X. Xxxxxx, Xxx Xxxxxx and/or Xxxxxx Xxxxxx (each (including Xx. Xxxxx),
a "Permitted Representative" and collectively, including Xx. Xxxxx, "Permitted
Representatives") to exercise the approval rights described herein; provided,
however, that at all times Popeil, during his lifetime, has a designated
Permitted Representative upon his death. If, after Popeil dies or becomes
permanently incapacitated, any of the Permitted Representatives exercising the
approval rights described herein (an "Outgoing Representative") dies, becomes
permanently incapacitated or resigns, then such approval rights shall
automatically pass to the Permitted Representative who accepts the
responsibilities of a Permitted Representatives hereunder, who has not
previously died or become permanently incapacitated and whose name next occurs
after that of the Outgoing Representative in the following list: Xxxxx X. Xxxxx,
Xxxx X. Xxxxxx, Xxx Xxxxxx and Xxxxxx Xxxxxx. Notwithstanding the foregoing,
Popeil's approval rights hereunder will cease upon the earlier to occur of (i)
the date that is 10 years after the date of Popeil's death or (ii) 20 years
after the Closing Date under the Asset Purchase Agreement. RMC will have the
right to rely upon any action taken by a Permitted Representative in his/her
capacity as Popeil's representative as contemplated hereunder.
9. Indemnification. RMC does hereby indemnify and agree to save and hold
Popeil, the Permitted Representatives, the Popeil Entities, its and their
respective affiliates, successors, licensees, heirs and assigns, and the
officers, directors, agents and employees of each of them, harmless of and from
any and all liability, claims, causes of action, suits, losses, settlements,
damages, fines, penalties and expenses (including, but not limited to,
reasonable attorneys' fees and expenses) for which they or any of them may
become liable or may incur or be compelled to pay in any action or claim against
them or any of them, by reason of or in connection with (a) any breach or
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alleged breach by RMC of this Agreement or any of RMC's representations,
warranties or agreements hereunder, (b) the use by RMC of the Marks, and/or (c)
the production, distribution, provision, advertising and promotion by RMC of the
Products. The indemnitees shall give RMC prompt written notice of any such
action or claim, and RMC shall take such action as is reasonably advisable to
defend such action or claim on behalf of the indemnitees. The indemnitees shall
have the independent right to defend such action or claim with attorneys of the
indemnitees' selection at the sole expense of RMC. In any case, the indemnitees
and RMC shall keep each other fully advised of all developments and shall
cooperate fully with each other in all respects in connection with any such
defense. The foregoing duty of indemnification shall survive the expiration of
this Agreement. For so long as any of the Marks are used by RMC (or by any
affiliate, subsidiary, or other person or entity on its behalf) in connection
with the Products or otherwise, RMC shall include Popeil and/or his estate a
named insured under RMC's product, general liability and errors and omissions
insurance policies (with combined limits of not less than Ten Million Dollars
(US$10,000,000)), all of which policies shall be issued by reputable insurers
with top A.M. Best (or substantially equivalent) ratings, and shall provide
Popeil with certificates of insurance evidencing such coverage prior to any use
of any Products or any marketing, advertising or promotion of or for any
Products.
10. Event of Default Under Notes. At such time as (a) there is an Event of
Default under the Notes issued by RMC pursuant to the Asset Purchase Agreement,
(b) if such Event of Default is a payment default, the amount available to draw
down under the Letter of Credit (or any supplementary letters of credit), as
contemplated by the Asset Purchase Agreement, is insufficient to cure such
payment default and (c) the amount borrowed from the Purchase Money Lender (as
defined in the Asset Purchase Agreement) who, as of the closing of the Asset
Purchase Agreement, has the senior secured position on the Marks has either been
repaid or refinanced, then, at Popeil's election, RMC will xxxxx Xxxxxx a
non-exclusive license (at no cost to Popeil) to use the Marks in connection with
the manufacturing, marketing and sale of the specific new products as to which
Popeil (or any Seller under the Asset Purchase Agreement) elects to re-acquire,
pursuant to the New Product Development Agreement by, for example, electing to
terminate the applicable patent and other intellectual property licenses
previously granted to RMC or any of its affiliates. Such non-exclusive license
in favor of Popeil shall be irrevocable with respect to any products as to which
Popeil has taken any substantial steps toward the manufacture, marketing and/or
sale of such products. Popeil agrees that as to any Marks used to identify any
of the Included Products (as defined in the Asset Purchase Agreement), he will
not, thereafter, license them to a third party, except in connection with an
agreement for such third party to distribute the products on Popeil's behalf.
11. Notices. All notices, requests, demands and other communication under
this Agreement shall be deemed to have been sufficiently given either when
delivered by hand, first class mail (postage pre-paid, return receipt
requested), private courier service or facsimile addressed to either party.
Notices shall be effective only when addressed as follows (or as otherwise
designated by proper notice under this Agreement):
To RMC: Ronco Marketing Corporation
Attention: Xxxxxxx Xxxxx
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Xxxxxxx Azafrani, Esq.
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To Popeil: Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx, Esq.
12. Specific Performance; Injunctive Relief. Popeil will be entitled to
injunctive relief, without any requirement for the posting of a bond, to enjoin
any breach or prevent any threatened breach by RMC of any provision of this
Trademark Co-Existence Agreement, the Consulting Agreement or the New Product
Development Agreement. Popeil will additionally be entitled to specifically
enforce the due and timely performance by RMC of its obligations hereunder.
13. Assignment. Popeil may freely assign this Agreement, or any part
hereof, without limitation, including the right to receive payments hereunder.
RMC may not assign this Agreement, or any part hereof, unless in each instance
(i) the proposed assignee agrees in writing (in a form reasonably acceptable to
Popeil) to be bound by the terms and conditions (including without limitation
Popeil's approval rights and the quality control provisions) of this Agreement;
and (ii) RMC first obtains Popeil's prior written consent, which consent shall
not be unreasonably withheld.
14. Relationship of the Parties. This Agreement does not constitute either
party as, and neither party shall represent itself as, the agent of the other,
or create a partnership or joint venture between the parties, and, except as
specifically set forth herein, neither party shall have the power to obligate or
bind the other in any manner whatsoever.
15. Severability. If any provision of this Agreement is determined to be
invalid, illegal or unenforceable, the remaining provisions of this Agreement
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shall remain in full force and effect, provided that the economic and legal
substance of the transactions contemplated is not affected in any manner
materially adverse to any party.
16. Entire Agreement. This Agreement and the Asset Purchase Agreement
contain the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof, supersede all prior oral and written
understandings, arrangements and agreements relating thereto, and may not be
modified, amended, extended, discharged, or terminated except by a written
instrument signed by both parties.
17. Arbitration; Attorneys' Fees and Costs. Any dispute arising out of or
relating to this Agreement, including, without limitation, any dispute arising
out of or in connection with Popeil's approval rights under Paragraph 1 hereof
or Popeil's exercise of such approval rights, shall be resolved in accordance
with the procedures set forth in Section 11.10 of the Asset Purchase Agreement,
which section shall be incorporated herein by reference. In the event of any
arbitration or other action for the breach of this Agreement or
misrepresentation by any party, the prevailing party in such arbitration or
other action shall be entitled, in addition to all other relief, to reasonable
attorneys' and experts' fees relating to such arbitration or other action,
including attorneys' and experts' fees incurred in any proceeding to compel
arbitration. The non-prevailing party shall be responsible for all costs of the
arbitration or litigation, including but not limited to, the arbitration fees,
court reporter fees, etc.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to
conflict of laws.
19. Waiver. Any waiver by Popeil of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of Popeil to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive Popeil of the right thereafter to insist upon strict adherence to that
term or any other term of this Agreement. Any waiver must be in writing.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
Ronco Marketing Corporation ("RMC")
By: /s/ Xxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxx
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Name: Xxxx Xxxxxxx XXXXXX X. XXXXXX ("Popeil")
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Its: President
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