6.1
Trademark License Agreement between
▇▇▇. ▇▇▇▇▇▇ Development and ▇▇▇▇▇▇▇▇, Inc.
Dated August 14, 1994
TRADEMARK LICENSE AGREEMENT
between
▇▇▇. ▇▇▇▇▇▇ DEVELOPMENT CORPORATION
a Delaware corporation
and
▇▇▇▇▇▇▇▇, INC.
a California corporation
DATED: August 17, 1994
TABLE OF CONTENTS
RECITALS ................................................................... 1
AGREEMENT .................................................................. 1
1. DEFINITIONS ..................................................... 1
2. GRANT OF LICENSE ................................................ 3
3. RESERVATION OF RIGHTS AND PRODUCT RIGHTS ........................ 4
4. LICENSE TRANSFER ................................................ 5
5. LICENSE FEE AND ROYALTIES ....................................... 5
6. VOLUME COMMITMENT ............................................... 6
7. LICENSE RETENTION ............................................... 7
8. ▇▇▇▇▇▇▇▇ REPORTS ................................................ 7
9. DEVELOPMENT OF ROYALTY BEARING PRODUCTS ......................... 8
10. ADVERTISING AND PROMOTION REQUIREMENTS .......................... 9
11. ROYALTY-BEARING PRODUCTS APPROVAL STANDARDS ..................... 10
12. USE OF LICENSED NAMES AND MARKS ................................. 11
13. INFRINGEMENT .................................................... 12
14. INSURANCE ....................................................... 12
15. CONFIDENTIALITY ................................................. 13
16. TERM AND TERMINATION ............................................ 14
17. DISPOSAL OF INVENTORY UPON EXPIRATION ........................... 17
18. FINAL STATEMENT UPON TERMINATION OR EXPIRATION .................. 17
19. REPRESENTATIONS AND WARRANTIES .................................. 18
20. INDEMNIFICATION ................................................. 18
21. NOTICES ......................................................... 19
22. GENERAL PROVISIONS .............................................. 20
EXHIBIT "A" - LICENSED NAMES AND MARKS
EXHIBIT "B" - ROYALTY BEARING PRODUCTS
i
TRADEMARK LICENSE AGREEMENT
THIS AGREEMENT is made and entered into this __ day of August 1994, by and
between ▇▇▇. ▇▇▇▇▇▇ DEVELOPMENT CORPORATION, a Delaware corporation ("▇▇▇.
▇▇▇▇▇▇"), and ▇▇▇▇▇▇▇▇, INC., a California corporation ("▇▇▇▇▇▇▇▇").
RECITALS
WHEREAS, ▇▇▇. ▇▇▇▇▇▇ is the sole owner of certain trademarks, service
marks, and trade names, including "▇▇▇. ▇▇▇▇▇▇", which have become associated
with high quality food products;
WHEREAS, ▇▇▇▇▇▇▇▇ is desirous of obtaining a license to utilize the
trademarks, service marks and trade names in connection with the development,
distribution, and sale of certain high quality, pre-packaged for retail sale,
dry mix cookie dough products; and
WHEREAS, ▇▇▇. ▇▇▇▇▇▇ is agreeable to such use by ▇▇▇▇▇▇▇▇ of such
trademarks, service marks, and trade names, subject to the provisions of this
Agreement;
AGREEMENT
NOW THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
(a) "Designated Distribution Channels" shall mean grocery stores,
supermarkets, convenience stores, club stores, and other similar retail
prepackaged food and snack distribution channels.
(b) "Guaranteed Amounts" shall have the meaning set forth in Section
5 hereof.
(c) "Initial Term" shall have the meaning set forth in Section 16
hereof.
(d) "Licensed Names and Marks" shall mean those trademarks, trade
names and service marks identified on Exhibit A hereto and such other
marks as ▇▇▇. ▇▇▇▇▇▇ may later adopt which include the name "▇▇▇. ▇▇▇▇▇▇"
in any format.
(e) "Option" shall have the meaning set forth in Section 16 hereof.
(f) "Packaging Specifications" shall mean those specifications for
packaging approved by ▇▇▇. ▇▇▇▇▇▇ pursuant to Section 11 hereof.
(g) "Product Specifications" shall mean those specifications for
Royalty Bearing Products approved by ▇▇▇. ▇▇▇▇▇▇ pursuant to Section 11
hereof.
(h) "Protected Information" shall mean ▇▇▇. ▇▇▇▇▇▇' recipes, formulations,
systems, programs, procedures, manuals, confidential reports and communications,
marketing techniques and arrangements, purchasing information, pricing policies,
quoting procedures, financial information, employee, customer, supplier and
distributor data, all of the materials or information relating to the business
or activities of ▇▇▇. ▇▇▇▇▇▇' which were not otherwise known to ▇▇▇▇▇▇▇▇ prior
to the commencement of the negotiations leading to this Agreement, or generally
known to others engaged in similar businesses or activities, and all
modifications, improvements and enhancements which are derived from or relate to
▇▇▇▇▇▇▇▇'▇ access to or knowledge of any of the above enumerated materials or
information (whether or not any of the above are reduced to writing or whether
or not patentable or protectable by copyright) which ▇▇▇▇▇▇▇▇'▇ receives,
receives access to, conceives or develops or has received, received access to,
conceived or developed, in whole or in part, directly or indirectly, in
connection with ▇▇▇▇▇▇▇▇'▇ license hereunder. Information which is independently
developed by ▇▇▇▇▇▇▇▇, or which was already in the possession of ▇▇▇▇▇▇▇▇ prior
to the date of this Agreement and which was not obtained in connection with the
transactions contemplated by this Agreement, or information which is or becomes
publicly available without breach of (i) this Agreement, (ii) any other
agreement or instrument to which ▇▇▇▇▇▇▇▇ is a party or a beneficiary, or (iii)
any duty owed to ▇▇▇. ▇▇▇▇▇▇ by ▇▇▇▇▇▇▇▇, shall not be considered Protected
Information hereunder.
(i) "Royalty-Bearing Product(s)" shall mean the items, articles or
food products described on Exhibit B hereto, and any other products which
become Royalty Bearing Products pursuant to the terms hereof, which
products are sold as prepackaged products using the Licensed Names and
Marks.
(j) "Royalty Default Rate" shall mean the interest rate which is the
lesser of (i) the annual rate from time to time publicly announced by
Citibank, N.A. at its "base rate" or "prime rate" (or any successor rate)
plus two percent (2%) or (ii) the highest applicable legal rate.
(k) "Running Royalty" or "Running Royalties" shall mean the royalty
or royalties from time to time payable pursuant to Section 5.
(l) "Territory" shall mean North America, Hawaii and Puerto Rico.
(m) "Volume Commitment" shall have the meaning set forth in Section
6 hereof.
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2. GRANT OF LICENSE
(a) Grant. Subject to the terms and conditions of this Agreement,
▇▇▇. ▇▇▇▇▇▇ hereby grants to ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ hereby accepts the
grant by ▇▇▇. ▇▇▇▇▇▇ of, the exclusive right and license to use the
Licensed Names and Marks to market Royalty-Bearing Products through
Designated Distribution Channels throughout the Territory. Except as
stated in Section 3, ▇▇▇. ▇▇▇▇▇▇ shall not compete with ▇▇▇▇▇▇▇▇ in the
(i) use of any trademark, service ▇▇▇▇ or tradename which includes the
name "▇▇▇. ▇▇▇▇▇▇" in any format in marketing Royalty Bearing Products in
Designated Distribution Channels in the Territory or (ii) license any
third party to use the same in marketing any Royalty Bearing Products in
Designated Distribution Channels in the Territory.
(b) First Right of Refusal - Territory. ▇▇▇. ▇▇▇▇▇▇ hereby grants to
▇▇▇▇▇▇▇▇ the first-right-of-refusal to acquire the license for the sale of
Royalty Bearing Products in, and include in the definition of Territory,
any and all European countries at an amount equal to seventy-five percent
(75 %) of the price and on the terms set forth in writing by any ready,
willing and able prospective licensee (the "First Offeror") who has made a
bona fide, enforceable offer in writing to ▇▇▇. ▇▇▇▇▇▇ containing no
contingencies (the "First Offer"). ▇▇▇. ▇▇▇▇▇▇ shall be obligated to give
▇▇▇▇▇▇▇▇ written notice and a copy of such First Offer and ▇▇▇▇▇▇▇▇ shall
have sixty (60) days after receipt of such notice to exercise its first
right of refusal by giving written notice to ▇▇▇. ▇▇▇▇▇▇ of its intention
to acquire the license for a price equal to 75% of the price and upon the
terms and conditions set forth in such First Offer. In the event ▇▇▇▇▇▇▇▇
exercises its first right of refusal, the acquisition shall occur within
thirty (30) days of the date of exercise or on such later date as may be
provided for closing in the First Offer. In the event that ▇▇▇▇▇▇▇▇ does
not exercise its right of first refusal, ▇▇▇. ▇▇▇▇▇▇ shall be free for
ninety (90) days after the expiration of ▇▇▇▇▇▇▇▇'▇ sixty (60) day period
to agree to sell to the First Offeror on the precise terms and conditions
set forth in the First Offer. Any proposed sale by ▇▇▇. ▇▇▇▇▇▇ containing
different terms or conditions or beyond the ninety (90) day period shall
be subject to a further right of refusal on the terms set forth herein.
(c) First Right of Refusal - Products. ▇▇▇. ▇▇▇▇▇▇ hereby grants to
▇▇▇▇▇▇▇▇ the first-right-of-refusal to acquire the License to sell in the
Territory, and include in the definition of Royalty Bearing Products, all
other dry mix food products at an amount equal to seventy-five percent
(75%) of the price and on the terms set forth in writing by any ready,
willing and able prospective licensee (the "first Offeror") who has made a
bona fide, enforceable offer in writing to ▇▇▇. ▇▇▇▇▇▇ containing no
contingencies (the "First Offer"). ▇▇▇. ▇▇▇▇▇▇ shall be obligated to give
▇▇▇▇▇▇▇▇ written notice and a copy of such First Offer and ▇▇▇▇▇▇▇▇ shall
have sixty (60) days after receipt of such notice to exercise its first
right of refusal by giving written notice to ▇▇▇. ▇▇▇▇▇▇ of its intention
to acquire the license for a price equal to 75% of the price and upon the
terms and conditions set forth in such First Offer. In the event ▇▇▇▇▇▇▇▇
exercises its first right of refusal, the acquisition shall occur within
thirty (30) days of the date of exercise or on such later date as may be
provided for closing in the First Offer. In the event that ▇▇▇▇▇▇▇▇ does
not exercise its right of first refusal, ▇▇▇. ▇▇▇▇▇▇ shall be free for
ninety
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(90) days after the expiration of ▇▇▇▇▇▇▇▇'▇ sixty (60) day period to
agree to sell to the First Offeror on the precise terms and conditions set
forth in the First Offer. Any proposed sale by ▇▇▇. ▇▇▇▇▇▇ containing
different terms or conditions or beyond the ninety (90) day period shall
be subject to a further right of refusal on the terms set forth herein.
(d) Expansion. In the event ▇▇▇▇▇▇▇▇ desires to expand the
definition of Territory to include additional areas, it may do so at no
additional fee, upon written notice to ▇▇▇. ▇▇▇▇▇▇ and upon receiving ▇▇▇.
▇▇▇▇▇▇' written consent which shall not be unreasonably withheld. Upon
express or deemed consent, the Territory shall be automatically expanded
to include the additional areas set forth in the Notice. Consent shall be
deemed given sixty (60) days after receipt of ▇▇▇▇▇▇▇▇'▇ notice unless
▇▇▇. ▇▇▇▇▇▇ has notified ▇▇▇▇▇▇▇▇ that consent is withheld. It shall not
be unreasonable for ▇▇▇. ▇▇▇▇▇▇ to withhold consent if it has received an
offer from a third party at which time ▇▇▇▇▇▇▇▇'▇ expansion request shall
be governed by Paragraph 2(b).
3. RESERVATION OF RIGHTS AND PRODUCT RIGHTS
(a) Reservation. ▇▇▇. ▇▇▇▇▇▇ reserves all rights with respect to the
Licensed Names and Marks not expressly licensed to ▇▇▇▇▇▇▇▇ hereunder, and
▇▇▇. ▇▇▇▇▇▇ may use or grant licenses to others to use the Licensed Names
and Marks in any other manner or in connection with any goods or services,
other than for sale of Royalty Bearing Products in Designated Distribution
Channels in the Territory. Without limiting the foregoing, the license
granted pursuant to this Agreement shall be exclusive to ▇▇▇▇▇▇▇▇ except
that ▇▇▇. ▇▇▇▇▇▇ shall not be precluded from, and hereby expressly retains
the right to: (i) own, operate, and grant or license others the right to
own and operate ▇▇▇. ▇▇▇▇▇▇ Cookies stores which sell cookie, bakery
and/or ice cream products (whether or not such products are Royalty
Bearing Products) under the Licensed Names and Marks at locations within
the Territory on such terms and conditions, as ▇▇▇. ▇▇▇▇▇▇, in its sole
discretion, deems appropriate, and (ii) offer for sale and sell, and
license others to offer for sale and sell, any products or services under
the Licensed Names and Marks which are not Royalty Bearing Products.
(b) Products. ▇▇▇. ▇▇▇▇▇▇ shall have the right to purchase from
▇▇▇▇▇▇▇▇, at a "most favored nations" price, and sell Royalty-Bearing
Products at ▇▇▇. ▇▇▇▇▇▇ Cookies store locations owned and operated by ▇▇▇.
▇▇▇▇▇▇, its franchisees and licensees which are licensed by ▇▇▇. ▇▇▇▇▇▇ to
operate ▇▇▇. ▇▇▇▇▇▇ Cookies stores pursuant to ▇▇▇. ▇▇▇▇▇▇' Uniform
Franchise Offering Circular or under an exemption to the Federal Trade
Commission Regulations governing the sale of franchises.
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4. LICENSE TRANSFER
This Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their successors or assigns; provided, that
the rights of the parties under this Agreement may only be assigned (i)
upon written consent by ▇▇▇. ▇▇▇▇▇▇ or (ii) without consent to a parent
corporation which owns at least fifty-one percent (51%) of such assigning
party, a fifty-one percent (51%) owned subsidiary corporation of such
party, a fifty-one percent (51%) owned subsidiary of a parent of such
party if such parent owns at least fifty-one percent (51%) of such party,
or to such other business organization which shall succeed to
substantially all of the assets and business of the parties, a parent, or
a subsidiary. ▇▇▇▇▇▇▇▇ shall not have the right to grant sublicenses under
this Agreement; provided, that ▇▇▇▇▇▇▇▇ shall have the right to contract
with a third party for the actual manufacturing of the Royalty-Bearing
Products ("co-pack agreements"), if such co-packer and the co-pack
agreement (with respect to Royalty Bearing Products) are approved in
writing by ▇▇▇. ▇▇▇▇▇▇, which approval will not be unreasonably withheld,
and provided further that such co-packer signs a confidentiality agreement
with ▇▇▇. ▇▇▇▇▇▇, containing substantially the obligations of ▇▇▇▇▇▇▇▇ as
set forth in paragraph 15 hereof. ▇▇▇▇▇▇▇▇'▇ obligations as set forth in
this Agreement shall not be altered in any manner as a result of the
existence of any co-pack agreements with third party manufacturers. Any
assignment, franchise, sublicense, or transfer, not expressly permitted by
this Section 4, is prohibited and will be deemed to be null and void.
5. LICENSE FEE AND ROYALTIES
(a) Guaranteed Pre-paid Royalty Fees and Running Royalties. ▇▇▇▇▇▇▇▇
shall pay to ▇▇▇. ▇▇▇▇▇▇ a non-refundable, pre-paid royalty fee of
$500,000 on July 1, 1995 (date subject to discussion). The foregoing
pre-paid royalty fee payment is hereinafter referred to as the "Guaranteed
Amounts" and shall represent a payment of $0.75 per case, for the first
3,333,334 cases sold, or retail packages of Royalty Bearing Products sold
("Running Royalties"), (over and above the Running Royalty of $0.75 per
case referenced below). Throughout the term (including Option Periods) of
this Agreement the Running Royalty shall be reduced to $0.75 per each case
of twelve retail packages of Royalty Bearing Products sold, less damages,
returns and credits. In the event that ▇▇▇▇▇▇▇▇ distributes in cases
containing less than twelve retail packages, then the Running Royalty will
be adjusted proportionately and accordingly to the number of individual
retail packages per case. ▇▇▇▇▇▇▇▇ shall remit such Running Royalties to
▇▇▇. ▇▇▇▇▇▇ on the last day of the month following the end of each
calendar quarter covered by the Agreement. All Guaranteed Amounts and
Running Royalties shall be fully earned when paid and ▇▇▇▇▇▇▇▇ shall not
be entitled to any refund with respect to such amounts for any reason
whatsoever.
(b) Payments. All fees, royalties, and amounts payable hereunder
shall be paid to ▇▇▇. ▇▇▇▇▇▇ in U.S. currency in immediately available
funds at such address or to such account as shall be designated in writing
by ▇▇▇. ▇▇▇▇▇▇.
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(c) Interest on Late Payments. ▇▇▇▇▇▇▇▇ shall pay interest on all
overdue amounts hereunder from the due date of such amounts until paid at
the Royalty Default Rate.
6. VOLUME COMMITMENT
(a) ▇▇▇▇▇▇▇▇ will sell a minimum number of cases of Royalty Bearing
Products during the Initial Term hereof and during each Option Period as
set forth on the following schedule:
INITIAL TERM
1995 750,000 cases
1996 900,000 cases
1997 l,000,000 cases
1998 l,100,000 cases
1999 1,200,000 cases
1ST OPTION PERIOD
2000 1,260,000 cases
2001 1,323,000 cases
2002 1,389,150 cases
2003 1,458,608 cases
2004 1,531,538 cases
2ND OPTION PERIOD
2005 1,608,ll5 cases
2006 1,688,521 cases
2007 1,772,9
47 cases
2008 1,861,594 cases
2009 1,954,674 cases
3RD OPTION PERIOD
2010 2,052,407 cases
2011 2,155,028 cases
2012 2,262,779 cases
2013 2,375,918 cases
2014 2,494,714 cases
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(b) The foregoing numbers of cases shall be referred to herein as
the "Volume Commitment".
7. LICENSE RETENTION
If ▇▇▇▇▇▇▇▇ fails to meet its Volume Commitment as set forth in Section
6(a) hereof with respect to Royalty Bearing Products, ▇▇▇▇▇▇▇▇ shall have
the option to pay Running Royalties to ▇▇▇. ▇▇▇▇▇▇ in the manner and in an
amount equal to the Running Royalties that would have been paid had
▇▇▇▇▇▇▇▇ met its Volume Commitment, and if paid, ▇▇▇▇▇▇▇▇ shall have the
right to retain the exclusive license described herein.
8. ▇▇▇▇▇▇▇▇ REPORTS
(a) Periodic Reports. On or before the last day of the month
following the last month of each calendar quarter covered by this
Agreement, ▇▇▇▇▇▇▇▇ shall deliver to ▇▇▇. ▇▇▇▇▇▇ a written statement
prepared, signed, and certified to be true and correct by ▇▇▇▇▇▇▇▇'▇ chief
financial officer, or his designee, setting forth the amount of
Royalty-Bearing Products sold, including sufficient information and detail
to confirm the calculations, which report shall be accompanied by payment
in full of the amount of Running Royalties then due.
(b) Annual Reports. Within ninety (90) days following the end of
each calendar year of this Agreement, beginning with the first such year
in which ▇▇▇▇▇▇▇▇ has sales of Royalty-Bearing Products, ▇▇▇▇▇▇▇▇ shall
deliver to ▇▇▇. ▇▇▇▇▇▇ a written statement setting forth the amount of
Royalty-Bearing Products sold and the calculations, including sufficient
information and detail to confirm the calculations, used to determine such
amounts, which calculations shall be signed and certified as true and
correct by an independent certified public accounting firm chosen by
▇▇▇▇▇▇▇▇ and acceptable to ▇▇▇. ▇▇▇▇▇▇, which acceptance shall not be
withheld unreasonably. If this statement discloses that the amount of
Running Royalties paid during any period to which the report relates was
less than the amount required to be paid or that any other amount is due
▇▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ immediately shall pay such amounts, together with
accrued interest at the Royalty Default Rate in cash or other immediately
available funds.
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9. DEVELOPMENT OF ROYALTY BEARING PRODUCTS
▇▇▇▇▇▇▇▇ hereby covenants, agrees, warrants and represents that:
(a) Product Development. All Royalty-Bearing Products shall be
developed, manufactured, marketed, and sold as "premium" products
containing all natural ingredients or as otherwise may be consistent with
▇▇▇. ▇▇▇▇▇▇ then existing image. ▇▇▇▇▇▇▇▇ accepts full responsibility for
and agrees to pay all costs it incurs associated with the development of
all Royalty-Bearing Products and all advertising and promotion, packaging
design, graphics, and packaging materials for Royalty-Bearing Products.
▇▇▇. ▇▇▇▇▇▇ shall cooperate with ▇▇▇▇▇▇▇▇ in development of
Royalty-Bearing Products, primarily through the suggestion of ideas,
concepts, and recipes for products and packaging; provided, however, that
▇▇▇. ▇▇▇▇▇▇ shall have no obligation to develop Royalty-Bearing Products
or any other products.
(b) ▇▇▇. ▇▇▇▇▇▇ Approval. ▇▇▇▇▇▇▇▇ shall not sell any initial
Royalty Bearing Product or any newly flavored Royalty Bearing Products
until ▇▇▇. ▇▇▇▇▇▇, in its reasonable judgment, funds that such product in
mass production quantities is satisfactory to ▇▇▇. ▇▇▇▇▇▇, pursuant to
Section 11 hereof. The license to ▇▇▇▇▇▇▇▇ granted by this Agreement to
distribute the Royalty Bearing Products under the Licensed Names and Marks
is expressly contingent upon such final approval by ▇▇▇. ▇▇▇▇▇▇ which
approval shall not be unreasonably withheld.
(c) Compliance with Specifications. ▇▇▇▇▇▇▇▇ will manufacture, sell
and distribute the Royalty Bearing Products in accordance with the Product
Specifications and will package and label the Royalty Bearing Products in
accordance with the Packaging Specifications.
(d) Capital Costs. ▇▇▇▇▇▇▇▇ will secure all plant, equipment and
technical skills necessary for the manufacture of the Royalty Bearing
Products according to the Product and Packaging Specifications, and ▇▇▇.
▇▇▇▇▇▇ shall have no liability or responsibility with respect thereto.
(e) Compliance with Laws. The Royalty Bearing Products will be
manufactured in compliance with, and will not be adulterated or misbranded
within the meaning of, the Federal Food, Drug and Cosmetic Act of 1938, or
any other federal, state, foreign or local laws or regulations applicable
thereto, will not constitute an article which may not be introduced into
interstate commerce and will be manufactured in substantial compliance
with all applicable federal, state, foreign or local laws and regulations
applicable thereto. Unless ▇▇▇. ▇▇▇▇▇▇ otherwise agrees in writing,
▇▇▇▇▇▇▇▇ will destroy all inventories which are not in conformity with
Food and Drug Administration rules and regulations and all applicable
federal, state, foreign and local laws. ▇▇▇▇▇▇▇▇ agrees to notify ▇▇▇.
▇▇▇▇▇▇ promptly of any regulatory action of which ▇▇▇▇▇▇▇▇ has knowledge
that is taken in relation to it by any federal, state, foreign, county or
municipal authority which relates to or affects the manufacture, storage,
distribution or sale of the Royalty Bearing Products.
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(f) Customer Complaints. ▇▇▇▇▇▇▇▇ shall provide ▇▇▇. ▇▇▇▇▇▇ a
summary of all written consumer complaints received regarding the quality
of the Royalty-Bearing Products and shall maintain all written consumer
complaints and a telephone log for all consumer complaints received by
telephone for a period of one year. ▇▇▇▇▇▇▇▇ will send a written report to
▇▇▇. ▇▇▇▇▇▇ each month containing the comments received, names of
complaining persons, with addresses and telephone numbers (if available).
Comments will be organized and summarized by type of comment or complaint
and by the geographical location of the complaint. Such information will
also be available for inspection by ▇▇▇. ▇▇▇▇▇▇ during normal working
hours upon reasonable notice. ▇▇▇▇▇▇▇▇ further agrees that it will respond
to any written customer complaint within fourteen (14) days of receipt of
such complaint by written response with either a refund of the customer's
money or a coupon for the same type of Royalty Bearing Product purchased,
depending upon the complaining customer's request. ▇▇▇▇▇▇▇▇ further agrees
that any complaints about ▇▇▇. ▇▇▇▇▇▇ products which are not Royalty
Bearing Products will be forwarded to ▇▇▇. ▇▇▇▇▇▇ within five (5) days of
receipt. ▇▇▇. ▇▇▇▇▇▇ agrees that all customer complaints and comments
received by it with respect to Royalty Bearing Products will be forwarded
to ▇▇▇▇▇▇▇▇ within five (5) days of receipt. ▇▇▇▇▇▇▇▇ shall further
provide ▇▇▇. ▇▇▇▇▇▇ with copies of all responses to complaints, upon
request.
(g) Ingredient Approval. ▇▇▇▇▇▇▇▇ will purchase for its own account
all flavoring ingredients, raw materials and packaging which is
proprietary to ▇▇▇. ▇▇▇▇▇▇ from sources which are approved by ▇▇▇. ▇▇▇▇▇▇,
which approval shall not be unreasonably withheld.
10. ADVERTISING AND PROMOTION REQUIREMENTS
(a) ▇▇▇▇▇▇▇▇ Promotion. ▇▇▇▇▇▇▇▇ shall market Royalty-Bearing
Products as premium products or as is otherwise consistent with ▇▇▇.
▇▇▇▇▇▇' then existing image so that such marketing shall not reflect
adversely upon Royalty-Bearing Products, the good name of ▇▇▇. ▇▇▇▇▇▇, or
the Licensed Names and Marks. ▇▇▇. ▇▇▇▇▇▇ shall have a prior-to-use
reasonable right of approval for all promotional, marketing and
advertising materials and concepts for each promotional campaign ▇▇▇▇▇▇▇▇
uses to market Royalty-Bearing Products. In that regard, ▇▇▇. ▇▇▇▇▇▇ shall
have a right of reasonable approval, prior to the development of final
television, radio or printed advertisements, the final "story boards" with
respect to television advertising, the final "script" with respect to
radio spots and the final "layouts" with respect to printed
advertisements. ▇▇▇. ▇▇▇▇▇▇ shall also have a right of reasonable approval
with respect to the actors or actresses used in connection with any such
advertising campaigns; provided, that ▇▇▇▇▇▇▇▇ shall have the right to
make minor variations in promotional, marketing and advertising materials
used in connection with the approved promotional campaigns. All
advertisements and advertising campaigns shall conform in all material
respects to the approvals given by ▇▇▇. ▇▇▇▇▇▇. ▇▇▇. ▇▇▇▇▇▇ shall have
five (5) business days following the receipt of the proposed promotional,
marketing or advertising materials to send ▇▇▇▇▇▇▇▇ written notice of its
disapproval which shall include an explanation of the basis for
disapproval. If such written disapproval is not received by ▇▇▇▇▇▇▇▇
within this five (5) business day period, the marketing, promotional or
advertising material submitted to ▇▇▇. ▇▇▇▇▇▇ shall be
9
deemed approved. Any material modifications to any such materials
previously approved by ▇▇▇. ▇▇▇▇▇▇ shall be subject to approval pursuant
to this Section 10. Once a promotional campaign has been approved by ▇▇▇.
▇▇▇▇▇▇, if no material changes are made to it by ▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇▇
shall not rescind its approval and ▇▇▇▇▇▇▇▇ may proceed accordingly on the
basis that it is approved.
11. ROYALTY-BEARING PRODUCTS APPROVAL STANDARDS
(a) Approval Standards. Prior to initial marketing of each
Royalty-Bearing Product, ▇▇▇▇▇▇▇▇ shall provide ▇▇▇. ▇▇▇▇▇▇ with (i)
notice of the proposed predetermined product content specifications for
approval (as so approved by ▇▇▇. ▇▇▇▇▇▇, the "Product Specifications"),
and (ii) without charge, representative samples of the proposed product
and related packaging materials, labels, and package inserts, for approval
(as so approved by ▇▇▇. ▇▇▇▇▇▇, the "Packaging Specifications"). Approval
of product content specifications, product quality, packaging, labels and
inserts shall be in ▇▇▇. ▇▇▇▇▇▇' reasonable discretion. Unless within ten
(10) business days after sending the above notice and samples ▇▇▇▇▇▇▇▇
receives from ▇▇▇. ▇▇▇▇▇▇' notice indicating disapproval of proposed
predetermined product content specifications, product quality or other
items described above, together with an explanation of the basis of
disapproval, such predetermined product content specifications, product
quality, or other items shall be deemed approved. ▇▇▇▇▇▇▇▇ shall market
all Royalty Bearing Products in accordance with the approval received from
▇▇▇. ▇▇▇▇▇▇ with respect to product content specifications, quality,
packaging and labeling, and in accordance with all governmental laws,
rules, and regulations applicable in the Territory.
(b) Examination By ▇▇▇. ▇▇▇▇▇▇. Periodically ▇▇▇. ▇▇▇▇▇▇ shall have
the right to request and upon such request ▇▇▇▇▇▇▇▇ shall provide to ▇▇▇.
▇▇▇▇▇▇, free of charge, representative samples of any Royalty-Bearing
Products then being sold, together with any packaging, packaging inserts,
labels, wrapping, advertising, marketing and promotional material then in
use. ▇▇▇. ▇▇▇▇▇▇ shall examine any such samples, packaging, promotional or
marketing materials, and advertisements within ten (10) days after
receipt. If as a result of such examination ▇▇▇. ▇▇▇▇▇▇ believes that any
Royalty-Bearing Product is not in substantial conformity with the Product
Specifications or product quality approved by ▇▇▇. ▇▇▇▇▇▇, or that any
packaging, advertising, marketing or promotional materials are not in
substantial conformity with any previous approvals given by ▇▇▇. ▇▇▇▇▇▇,
or any Licensed Names or Marks are not being used in conformity with the
requirements of this Agreement, ▇▇▇. ▇▇▇▇▇▇ shall promptly notify
▇▇▇▇▇▇▇▇. After receipt of any such notice from ▇▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
shall have ten (10) business days to correct the lack of conformity
identified by ▇▇▇. ▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ recognizes that representatives of
▇▇▇. ▇▇▇▇▇▇ may also inspect Royalty-Bearing Products after delivery into
Designated Distribution Channels and ▇▇▇▇▇▇▇▇ shall cooperate with ▇▇▇.
▇▇▇▇▇▇ in obtaining ▇▇▇▇▇▇▇▇'▇ customers cooperation in such inspections.
Notwithstanding the foregoing, ▇▇▇. ▇▇▇▇▇▇' right to request and receive
samples shall be limited to once per calendar quarter, unless in any
quarter such samples are non-conforming as described above in which case
▇▇▇. ▇▇▇▇▇▇ may request additional samples from time to time during such
quarter and the next succeeding calendar quarter to ensure conformity.
10
(c) Labelling; Trademark Notices. Whenever ▇▇▇▇▇▇▇▇ uses the
Licensed Names and Marks, ▇▇▇▇▇▇▇▇ shall affix the appropriate trademark
notice and agrees to use the registration symbol of "R" in connection with
its use of the Licensed Names and Marks, or "TM" where the ▇▇▇▇ has not
been registered federally, and in each instance where appropriate
accompanied by the words "Reg. TM of ▇▇▇. ▇▇▇▇▇▇" or a reasonable
facsimile thereof or such other reference as may be designated by ▇▇▇.
▇▇▇▇▇▇ from time to time. Where a Licensed Name and ▇▇▇▇ is used more than
once on packaging, in copy or advertising or on the Royalty Bearing
Products, the "(R)" or "TM" designation need only be used once either on
the most prominent use of the Licensed Name and ▇▇▇▇, or if all uses are
of equal prominence, then on the first use of the Licensed Name and ▇▇▇▇
in or on each package, copy, advertisement, or product. ▇▇▇▇▇▇▇▇ shall use
the Licensed Names and Marks only as trademarks, service marks, or trade
names and shall affix the notice as specified. ▇▇▇▇▇▇▇▇ shall not have the
right, unless previously agreed in writing by ▇▇▇. ▇▇▇▇▇▇, to use other
trademarks, service marks, or trade names in marketing and promoting
Royalty-Bearing Products. ▇▇▇. ▇▇▇▇▇▇ shall have the right to own and
register any such other trademark, service ▇▇▇▇, or trade name which is
registerable, including a Licensed Name or ▇▇▇▇ or "Fields" in any format,
and such trademarks, service marks, and trade names owned or registered by
▇▇▇. ▇▇▇▇▇▇ shall be included in the Licensed Names and Marks, and
▇▇▇▇▇▇▇▇ shall cooperate with ▇▇▇. ▇▇▇▇▇▇ by providing packaging,
labelling, and documentation as may be required to obtain and maintain
such registration.
12. USE OF LICENSED NAMES AND MARKS
(a) Restrictions On Use. Unless ▇▇▇ ▇▇▇▇▇▇ consents in writing which
consent shall not be unreasonably withheld, ▇▇▇▇▇▇▇▇ shall use the
Licensed Names and Marks:
(i) only for the purposes of and pursuant to this Agreement,
(ii) only in a manner consistent with the scope of the
relevant registration of the Licensed Names and Marks or
applications therefor in the Territory,
(iii) only in the manner permitted and prescribed by ▇▇▇
▇▇▇▇▇▇ as set forth herein,
(iv) only with respect to Royalty Bearing Products, and
(v) only to sell Royalty Bearing Products through Designated
Distribution Channels.
11
(b) Recognition of Goodwill. ▇▇▇▇▇▇▇▇ recognizes the value of the
goodwill associated with the Licensed Names and Marks and acknowledges
that the Licensed Names and Marks and all rights therein and goodwill
pertaining thereto belong exclusively to ▇▇▇. ▇▇▇▇▇▇.
(c) Validity of Other Agreements. ▇▇▇▇▇▇▇▇ agrees that it will not,
during the term of this Agreement or thereafter, attack the title or any
rights of ▇▇▇. ▇▇▇▇▇▇ in and to the Licensed Names and Marks, or any other
license agreement involving the Licensed Names and Marks to which ▇▇▇.
▇▇▇▇▇▇ is a party.
(d) Validity of Licensed Names and Marks. ▇▇▇▇▇▇▇▇ agrees that it
will not intentionally destroy, impair or in any way impede the effect and
validity of the Licensed Names and Marks.
13. INFRINGEMENT
▇▇▇▇▇▇▇▇ agrees to assist ▇▇▇. ▇▇▇▇▇▇, at ▇▇▇. ▇▇▇▇▇▇'▇ cost and expense,
to the extent necessary in the procurement of any protection or to protect
any of ▇▇▇. ▇▇▇▇▇▇'▇ rights to the Licensed Names and Marks, and ▇▇▇.
▇▇▇▇▇▇, if it so desires, may commence or prosecute any claims or suits in
its own name or, with ▇▇▇▇▇▇▇▇'▇ consent, in the name of ▇▇▇▇▇▇▇▇ or join
▇▇▇▇▇▇▇▇ as a party thereto. ▇▇▇▇▇▇▇▇ shall notify ▇▇▇. ▇▇▇▇▇▇ in writing
of any infringements or imitations by others of the Licensed Names and
Marks which may come to ▇▇▇▇▇▇▇▇'▇ attention, and ▇▇▇. ▇▇▇▇▇▇ shall have
the sole right to determine whether or not any action shall be taken on
account of any such infringements or imitations at ▇▇▇. ▇▇▇▇▇▇' cost and
expense. ▇▇▇▇▇▇▇▇ shall not institute any suit or take any action on
account of any such infringements or imitations without first obtaining
the written consent of ▇▇▇. ▇▇▇▇▇▇ so to do.
14. INSURANCE
▇▇▇▇▇▇▇▇ shall obtain and keep in force, at its sole expense, product
liability insurance providing adequate insurance for ▇▇▇. ▇▇▇▇▇▇ against
any claims and suits involving product liability arising out of, or with
respect to, the transactions contemplated by this Agreement, in no less
than ten million dollars ($10,000,000) combined single limit on bodily
injuries and/or property damage. Within thirty (30) days after the date of
this Agreement, ▇▇▇▇▇▇▇▇ shall submit to ▇▇▇. ▇▇▇▇▇▇ a certificate of
insurance naming ▇▇▇. ▇▇▇▇▇▇ as an additional insured and providing that
any cancellation or material change or alteration which reduces coverage
or any benefits accruing to ▇▇▇. ▇▇▇▇▇▇ shall become effective only upon
thirty (30) days prior notice to ▇▇▇. ▇▇▇▇▇▇.
12
15. CONFIDENTIALITY
(a) Acknowledgment of Confidentiality. ▇▇▇▇▇▇▇▇ understands that any
Protected Information disclosed to it by ▇▇▇. ▇▇▇▇▇▇ under this Agreement
is secret, proprietary and of great value to ▇▇▇▇▇▇▇▇, which value may be
impaired if the secrecy of the Protected Information is not maintained.
(b) Reasonable Security Measures. ▇▇▇. ▇▇▇▇▇▇ has taken and will
continue to take reasonable security measures to preserve and protect the
secrecy of the Protected Information and ▇▇▇▇▇▇▇▇ agrees to take all
measures reasonably necessary to protect the secrecy of such information
in order to prevent it from falling into the public domain or into the
possession of persons not bound to maintain the secrecy of such
information.
(c) Non-Disclosure Obligation. ▇▇▇▇▇▇▇▇ agrees not to disclose the
Protected Information obtained pursuant to this Agreement, to any person
or entity (other than ▇▇▇▇▇▇▇▇'▇ key officers and employees to whom
disclosure is necessary), during the term of this Agreement or at any time
following the expiration or termination of this Agreement.
(d) Burden of Proof. ▇▇▇▇▇▇▇▇ hereby acknowledges and agrees that if
▇▇▇▇▇▇▇▇ shall disclose, divulge, reveal, report, publish, transfer or
use, for any purpose whatsoever, except as authorized herein, any
Protected Information, and ▇▇▇▇▇▇▇▇ shall assert as a defense that such
information (i) was already known to ▇▇▇▇▇▇▇▇ or developed prior to the
execution of this Agreement, (ii) was independently developed by ▇▇▇▇▇▇▇▇,
(iii) was disclosed to third parties without violation of this Agreement,
(vi) was already in the public domain prior to the execution of this
Agreement, or (v) entered the public domain without violation of this
Agreement, ▇▇▇▇▇▇▇▇ shall bear the burden of proof with respect to the
same.
(e) Mutuality of Obligations. ▇▇▇. ▇▇▇▇▇▇ hereby agrees that any
information which it receives from ▇▇▇▇▇▇▇▇ which is within the scope of
the definition of Protected Information, shall be treated as confidential
by ▇▇▇. ▇▇▇▇▇▇, and ▇▇▇. ▇▇▇▇▇▇ hereby agrees to be bound by the terms of
this Agreement with respect to any such information it receives from
▇▇▇▇▇▇▇▇, to the same extent that ▇▇▇▇▇▇▇▇ is bound by the terms of this
Agreement with respect to Protected Information, as set forth above in
paragraphs 15(a), (b), (c) and (d).
13
16. TERM AND TERMINATION
(a) Term. The initial term of this Agreement shall begin upon the
execution hereof and extend through December 31, 1999 ("Initial Term"). So
long as ▇▇▇▇▇▇▇▇ is not in material default and has met and/or paid
Running Royalties based on its Volume Commitment as described in paragraph
6(a) hereof, ▇▇▇▇▇▇▇▇ shall have the option ("Option") to extend this
Agreement for five (5) consecutive five (5) year Option Periods, until
December 31, 2024. The Options may be exercised by ▇▇▇▇▇▇▇▇, in its sole
discretion, by the giving of written notice to ▇▇▇. ▇▇▇▇▇▇, not later than
ninety (90) days prior to the expiration of the Initial Term (or current
Option Period) hereof.
(b) Termination. This Agreement may be terminated as follows:
(c) If ▇▇▇▇▇▇▇▇ defaults in the payment of any Running Royalties or
Guaranteed Amounts to ▇▇▇. ▇▇▇▇▇▇ when the same become due and payable
hereunder, then this Agreement and the license granted hereunder may be
terminated upon notice by ▇▇▇. ▇▇▇▇▇▇ effective thirty (30) days after
receipt of such notice, without prejudice to any and all other rights and
remedies ▇▇▇. ▇▇▇▇▇▇ may have hereunder or by law provided, and all rights
of ▇▇▇▇▇▇▇▇ hereunder shall cease.
(i) If ▇▇▇▇▇▇▇▇ fails to meet its Volume Commitment as set
forth in paragraph 6(a) hereof, then, except as provided in Section
7, this Agreement and the license granted hereunder may be
terminated upon receipt of such notice, unless cured by ▇▇▇▇▇▇▇▇
during such thirty (30) day period by payment of amounts due
together with interest on such amounts pursuant to Paragraph 5(c),
without prejudice to any and all other rights and remedies ▇▇▇.
▇▇▇▇▇▇ may have hereunder or by law provided, and all rights of
▇▇▇▇▇▇▇▇ hereunder shall cease.
(ii) If ▇▇▇▇▇▇▇▇ fails to perform in accordance with any
material term or condition of this Agreement (other than as
described in paragraph l6(b)(i) and (ii) above) and such default
continues unremedied for thirty (30) days after the date on which
▇▇▇▇▇▇▇▇ receives written notice of default, unless such remedy
cannot be accomplished in such time period and ▇▇▇▇▇▇▇▇ has
commenced diligent efforts within such time period and continues
such effort until the remedy is complete, then this Agreement may be
terminated upon notice by ▇▇▇. ▇▇▇▇▇▇, effective upon receipt of
such notice, without prejudice to any and all other rights and
remedies ▇▇▇. ▇▇▇▇▇▇ may have hereunder or by law provided.
14
(iii) If ▇▇▇▇▇▇▇▇ is determined to be insolvent, or files a
petition in bankruptcy or for reorganization, or takes advantage of
any insolvency statute, or makes an assignment for the benefit of
creditors, or undertakes any similar action, under any federal,
state or foreign bankruptcy, insolvency or similar law, unless such
is dismissed, removed or otherwise cured within thirty (30) days or
unless ▇▇▇▇▇▇▇▇ has filed for Chapter 11 Reorganization protection
under Federal Bankruptcy Laws, then this Agreement and the License
granted hereunder may be terminated upon notice by ▇▇▇. ▇▇▇▇▇▇,
effective upon receipt of such notice, without prejudice to any and
all other rights and remedies ▇▇▇. ▇▇▇▇▇▇ may have hereunder or by
law provided, and the license herein granted shall not constitute an
asset in reorganization, bankruptcy, or insolvency which may be
assigned or which may accrue to any court or creditor appointed
referee, receiver, or committee.
(v) Beginning with the first Option Period and thereafter, if
not more than twelve (12) months nor less than three (3) months
prior to the end of the any Option Period ▇▇▇. ▇▇▇▇▇▇ provides
written notice to ▇▇▇▇▇▇▇▇ that it intends to terminate this License
Agreement as of the end of such Option Period and by providing
written acknowledgement of ▇▇▇. ▇▇▇▇▇▇' obligation to pay ▇▇▇▇▇▇▇▇ a
Buy Out Amount equal to three (3) times, the average gross margin
for sales reported by ▇▇▇▇▇▇▇▇ over the last three years of the
current Option Period term. Average gross margin shall be calculated
by taking net sales (gross revenues from Royalty-Bearing Product
sales less any discounts), minus allowance for spoilage, returns,
and costs of goods sold (amounts paid by ▇▇▇▇▇▇▇▇ for Licensed
Products FOB the co-packet). The Buy Out Amount shall be paid to
▇▇▇▇▇▇▇▇ in cash over three (3) years in twelve (12) equal quarterly
installments with interest on the unpaid balance at the previous
quarter's average reference rate reported from time to time by the
Bank of America NT&SA San Francisco headquarters branch on
commercial loans to its most creditworthy commercial borrowers, with
the first payment due on the last day of the first calendar quarter
following the termination. The "previous quarter's average reference
rate" to be applied during a quarter shall be calculated by taking
the average of the reference rates in effect on the first day of
each of the three (3) months of the preceding quarter. ▇▇▇. ▇▇▇▇▇▇
may repay this obligation in whole or in part at any time without
prepayment premium or penalty.
15
(vi) If ▇▇▇. ▇▇▇▇▇▇ is determined to be insolvent, or files a
petition in bankruptcy or for reorganization, or takes advantage of
any insolvency statute, or makes an assignment for the benefit of
creditors, or undertakes any similar action, under any federal,
state or foreign bankruptcy, insolvency or similar law, or fails to
perform in accordance with any material term or condition of this
Agreement and such default continues for thirty (30) days after ▇▇▇.
▇▇▇▇▇▇ receives written notice of default, then this Agreement and
the License granted hereunder may be terminated upon notice by
▇▇▇▇▇▇▇▇, effective upon receipt of such notice, without prejudice
to any and all other rights and remedies ▇▇▇▇▇▇▇▇ may have hereunder
or by law provided, and the license herein granted shall not
constitute an asset in reorganization, bankruptcy, or insolvency
which may be assigned or which may accrue to any court or creditor
appointed referee, receiver, or committee.
(vii) If ▇▇▇. ▇▇▇▇▇▇ fails to perform in accordance with any
material term or condition of this Agreement and such default
continues unremedied for thirty (30) days after the date on which
▇▇▇. ▇▇▇▇▇▇ receives written notice of default, then this Agreement
may be terminated upon notice by ▇▇▇▇▇▇▇▇, effective upon receipt of
such notice, without prejudice to any and all other rights and
remedies ▇▇▇▇▇▇▇▇ may have hereunder or by law provided.
(d) Rights Upon Termination or Cancellation. On any cancellation,
termination or expiration of this Agreement;
(i) ▇▇▇▇▇▇▇▇ agrees to immediately pay to ▇▇▇. ▇▇▇▇▇▇ all
amounts due and owing hereunder and to return all Protected
Information, confidential documents and other material supplied by
▇▇▇. ▇▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ and agrees never to use, disclose to others,
nor assist others in using the Protected Information.
(ii) ▇▇▇▇▇▇▇▇ will be deemed to have automatically and
irrevocably assigned, transferred, and conveyed to ▇▇▇. ▇▇▇▇▇▇ any
rights, equities, good will, titles or other rights in and to the
Licensed Names and Marks which may have been obtained by ▇▇▇▇▇▇▇▇ or
which may have vested in ▇▇▇▇▇▇▇▇ in pursuance of any endeavors
covered hereby, and ▇▇▇▇▇▇▇▇ will execute any instruments requested
by ▇▇▇. ▇▇▇▇▇▇ to accomplish or confirm the foregoing. Any such
assignment, transfer or conveyance shall be without other
consideration than the mutual covenants and considerations of this
Agreement.
(iii) Except as provided in Section 17 below, ▇▇▇▇▇▇▇▇ further
agrees that it shall forthwith discontinue the use of all Licensed
Names and Marks, including packaging and other paper goods and other
objects bearing any Licensed Names and Marks.
16
(e) Licensing of Licensed Names and Marks, After Termination. Upon
any expiration or earlier termination of this Agreement, ▇▇▇. ▇▇▇▇▇▇ may
license others to use the Licensed Names and Marks to produce, sell,
market and advertise products similar or identical to the Royalty Bearing
Products through Designated Distribution Channels in the Territory.
(f) Packaging Designs. In the event this Agreement is properly
terminated, ▇▇▇. ▇▇▇▇▇▇ shall have the right to purchase the packaging
designs for the Royalty-Bearing Products from ▇▇▇▇▇▇▇▇ at a price equal to
the amount expended by ▇▇▇▇▇▇▇▇ on such packaging designs. To exercise
this right, ▇▇▇. ▇▇▇▇▇▇ shall notify ▇▇▇▇▇▇▇▇ in writing of ▇▇▇. ▇▇▇▇▇▇'
intent to purchase the packaging design, not later than 30 days after
termination. Upon receipt of such notice, ▇▇▇▇▇▇▇▇ shall provide ▇▇▇.
▇▇▇▇▇▇ with the amount of ▇▇▇▇▇▇▇▇'▇ cost for packaging design, whereupon,
▇▇▇. ▇▇▇▇▇▇ may rescind its offer within five (5) business days of receipt
of the price of such costs for packaging design, otherwise ▇▇▇. ▇▇▇▇▇▇
shall be deemed to have accepted such cost as the purchase price for such
packaging.
17. DISPOSAL OF INVENTORY UPON EXPIRATION
For a period of six (6) months following the termination or expiration of
this Agreement, ▇▇▇▇▇▇▇▇ shall have the right to sell any Royalty Bearing
Products in ▇▇▇▇▇▇▇▇'▇ inventory which have been packaged in packages
bearing the Licensed Names and Marks, and ▇▇▇. ▇▇▇▇▇▇ shall have the right
to purchase at ▇▇▇▇▇▇▇▇'▇ fully allocated cost, any packaging materials
using the Licensed Names and Marks then in ▇▇▇▇▇▇▇▇'▇ inventory. Any sales
of Royalty Bearing Products under this Section shall be, at all times, in
accordance with the policies, prices, and standards established for
marketing and distribution of Royalty-Bearing Products pursuant to this
Agreement, and shall include payment of all Running Royalties accrued in
accordance with Section 5 hereof.
18. FINAL STATEMENT UPON TERMINATION OR EXPIRATION
As soon as practicable after termination or expiration of the license
granted hereunder, but in no event more than thirty (30) days thereafter,
▇▇▇▇▇▇▇▇ shall deliver to ▇▇▇. ▇▇▇▇▇▇ a statement indicating the number
and description of Royalty Bearing Products packaged in packaging using
the Licensed Names and Marks then in ▇▇▇▇▇▇▇▇'▇ inventory and the number
and description of unused packaging materials bearing the Licensed Names
and Marks then in ▇▇▇▇▇▇▇▇'▇ inventory. ▇▇▇. ▇▇▇▇▇▇ shall have the option
to conduct a physical inventory to ascertain or verify such statement.
With respect to a partial termination due to a failure by ▇▇▇▇▇▇▇▇ to meet
its Volume Commitment, this paragraph shall only apply to the items for
which the Agreement is terminated.
17
19. REPRESENTATIONS AND WARRANTIES
(a) Title. ▇▇▇. ▇▇▇▇▇▇ represents and warrants and ▇▇▇▇▇▇▇▇
acknowledges that ▇▇▇. ▇▇▇▇▇▇ has represented that ▇▇▇. ▇▇▇▇▇▇ is the
owner of all right, title, and interest in and to the Licensed Names and
Marks. ▇▇▇▇▇▇▇▇ further acknowledges the good will associated with the
Licensed Names and Marks and that such Licensed Names and Marks have
acquired secondary meaning in the mind of the public. ▇▇▇▇▇▇▇▇ shall not
during the term of this Agreement dispute or contest, directly or
indirectly, or due or cause to be done, any action which in any way
contests, impairs, or tends to impair ▇▇▇. ▇▇▇▇▇▇' exclusive rights and
title to the Licensed Names and Marks or the validity of any registrations
thereof and ▇▇▇▇▇▇▇▇ shall not assist others in so doing. ▇▇▇▇▇▇▇▇ shall
not in any manner represent that it owns any rights in the Licensed Names
and Marks (and/or registrations therefor), but may, only during the term
of this Agreement, and only if ▇▇▇▇▇▇▇▇ has complied with all laws,
regulations and registration requirements within the jurisdiction for so
doing, represent that it is a "licensee" or "official licensee" hereunder.
▇▇▇▇▇▇▇▇ shall not register or attempt to register in its own name, or
that of any third party, any Licensed Name or ▇▇▇▇. Subject to the terms
and conditions of this Agreement, ▇▇▇▇▇▇▇▇ agrees that any and all uses by
▇▇▇▇▇▇▇▇ of the Licensed Names and Marks under this Agreement shall be on
behalf of and accrue and inure to the benefit of ▇▇▇. ▇▇▇▇▇▇.
(b) Right To Enter Into This Agreement. ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
each warrant and represent for itself that it has the right to enter into
this Agreement, that it will not knowingly subsequently take any action
contrary to this Agreement, and that the entering into of this Agreement
will not knowingly violate any other agreement to which it is a party or
conflict with or violate any law, rule or regulation by which it is bound.
not
(c) ▇▇▇. ▇▇▇▇▇▇' Image. ▇▇▇. ▇▇▇▇▇▇ represents and warrants that it
will intentionally do anything to destroy or impair its existing image.
20. INDEMNIFICATION
(a) ▇▇▇. ▇▇▇▇▇▇ Indemnification. ▇▇▇ ▇▇▇▇▇▇ hereby indemnifies
▇▇▇▇▇▇▇▇ and forever holds ▇▇▇▇▇▇▇▇ harmless from and against all claims,
suits, actions, proceedings, damages, losses or liabilities, costs or
expenses (including reasonable attorneys' fees and expenses) arising out
of, based upon, or in connection with (i) any breach of any of ▇▇▇. ▇▇▇▇▇▇
warranties or representations set forth in this Agreement or (ii) any
claim that the use by ▇▇▇▇▇▇▇▇ of the Licensed Names and Marks as provided
in this Agreement infringes upon any third party trademark, service ▇▇▇▇,
or trade name.
18
(b) ▇▇▇▇▇▇▇▇ Indemnification. ▇▇▇▇▇▇▇▇ hereby indemnifies ▇▇▇.
▇▇▇▇▇▇ and forever holds ▇▇▇. ▇▇▇▇▇▇ harmless from and against all claims,
suits, actions, proceedings, damages, losses or liabilities, costs or
expenses (including reasonable attorneys' fees and expenses) arising out
of, based upon, or in connection with, unless it is at the direction of
▇▇▇. ▇▇▇▇▇▇ (i) any breach of any of ▇▇▇▇▇▇▇▇'▇ warranties or
representations set forth in this Agreement, (ii) any use of any patent,
process, method, or device by ▇▇▇▇▇▇▇▇ in connection with the
Royalty-Bearing Products; (iii) any alleged defects or dangers inherent in
the Royalty-Bearing Products or the manufacture, distribution, sale, or
use thereof; (iv) any injuries or damages to purchasers, users, or
consumers of Royalty-Bearing Products arising from or related to the use
or consumption of Royalty-Bearing Products; (v) any injuries or damages
arising from ▇▇▇▇▇▇▇▇'▇ or any of ▇▇▇▇▇▇▇▇'▇ customers, advertising,
marketing or promotion of the Licensed Names and Marks or Royalty-Bearing
Products; or (vi) any alleged infringement of any third party's copyright,
patent, or trademark unless and to the extent such alleged infringement is
based upon ▇▇▇▇▇▇▇▇'▇ use of the Licensed Names and Marks as authorized in
this Agreement.
(c) Conditions of Indemnification. As a condition of indemnification
under this Section 20, the party seeking indemnification shall give the
other party (for purposes of this Section 20 called the "Indemnifying
Party") immediate notice of and copies of all pleadings and correspondence
related to the assertion of any such claim, proceeding, action, or suit
and agrees not to settle, compromise, or otherwise dispose of any such
claim, proceeding, action or suit without the prior written consent of the
Indemnifying Party. The Indemnifying Party shall have the right (but not
the obligation) to assume the defense or settlement of any such claim,
proceeding, action, or suit at its expense, by counsel of its choice. If
the Indemnifying Parry assumes such defense, the Party seeking indemnity
shall cooperate fully with the Indemnifying Party in defense of the action
and the Indemnifying Party shall not be liable to pay or reimburse the
other party for attorneys' fees or expenses, except such out-of-pocket
costs or expenses incurred by the Indemnified Party in cooperating with
the Indemnifying Party.
21. NOTICES
All notices Provided by this Agreement shall be in writing and shall be
given by facsimile or registered mail, postage prepaid, or by personal
delivery, by one party to the other, addressed to such other Party at the
applicable address set forth below, or to such other addresses as may be
given for such purpose by such other party by notice duly given hereunder.
Notice shall be deemed properly given on the date of a confirmed facsimile
transmission, three (3) days after the date mailed if given by first class
mail. or on the date of delivery, which ever applies:
19
To ▇▇▇. ▇▇▇▇▇▇: ▇▇▇. ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
22. GENERAL PROVISIONS
(a) No Fiduciary or Other Relationship. It is understood and agreed
by the parties hereto that this Agreement does not create a fiduciary
relationship between them, that ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ are and shall be
independent contractors and that nothing in this Agreement is intended to
make either party a general or special agent, joint venturer, partner or
employee of the other for any purpose whatsoever.
(b) Use of Licensed Names and Marks in Contracts. ▇▇▇▇▇▇▇▇ shall not
employ any of the Licensed Names and Marks in sighing any contract or
applying for any license or permit or in a manner that may result in ▇▇▇.
▇▇▇▇▇▇' liability for any of ▇▇▇▇▇▇▇▇'▇ indebtedness or obligations, nor
may ▇▇▇▇▇▇▇▇ use the Licensed Names and Marks in any way not expressly
authorized by ▇▇▇. ▇▇▇▇▇▇. Except as expressly authorized in writing,
neither ▇▇▇. ▇▇▇▇▇▇ nor ▇▇▇▇▇▇▇▇ shall make any express or implied
agreements, warranties, guarantees or representations or incur any debt in
the name or on behalf of the other, represent that their relationship is
other than licensor and licensee or be obligated by or have any liability
under any agreements or representations made by the other that are not
expressly authorized in writing.
20
(c) Severability. Except as expressly provided to the contrary
herein, each Section, paragraph, term and provision of this Agreement, and
any portion thereof, shall be considered severable and if, for any reason,
any such provision of this Agreement is held to be invalid, contrary to or
in conflict with any applicable present or future law or regulation in a
final, unappealable ruling issued by any court, agency or tribunal with
competent jurisdiction in a proceeding to which ▇▇▇. ▇▇▇▇▇▇ is a party,
that ruling shall not impair the operation of, or have any other effect
upon, such other portions of this Agreement as may remain otherwise
intelligible, which shall continue to be given full force and effect and
bind the parties hereto, although any portion held to be invalid shall be
deemed not to be a part of this Agreement from the date the time for
appeal expires, if ▇▇▇▇▇▇▇▇ is a party thereto, otherwise upon ▇▇▇▇▇▇▇▇'▇
receipt of a notice of non-enforcement thereof from ▇▇▇. ▇▇▇▇▇▇. If any
covenant herein which restricts competitive activity is deemed
unenforceable by virtue of its scope in terms of area, business activity
prohibited and/or length of time, but would be enforceable by reducing any
part or all thereof, ▇▇▇▇▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇ agree that the same shall be
enforced to the fullest extent permissible under the laws and public
policies applied in the jurisdiction in which enforcement is sought.
(d) Substitution of Provisions. If any applicable and binding law or
rule of any jurisdiction requires a greater prior notice of the
termination of this Agreement than is required hereunder, or the taking of
some other action not required hereunder, or if, under any applicable and
binding law or rule of any jurisdiction, any provision of this Agreement
is invalid or unenforceable, the prior notice and/or other action required
by such law or rule shall be substituted for the comparable provisions
hereof. ▇▇▇▇▇▇▇▇ agrees to be bound by any promise or covenant imposing
the maximum duty permitted by law which is subsumed within the terms of
any provision hereof, as though it were separately articulated in and made
a part of this Agreement, that may result from striking from any of the
provisions hereof, any portion or portions which a court may hold to be
unenforceable in a final decision to which ▇▇▇. ▇▇▇▇▇▇ is a party, or from
reducing the scope of any promise or covenant to the extent required to
comply with such a court order. Such modifications to this Agreement shall
be effective only in such jurisdiction, unless ▇▇▇. ▇▇▇▇▇▇ elects to give
them greater applicability, and shall be enforced as originally made and
entered into in all other jurisdictions.
(e) Waiver. ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ may by written instrument
unilaterally waive or reduce any obligation of or restriction upon the
other under this Agreement, effective upon delivery of written notice
thereof to the other or such other effective date stated in the notice of
waiver. Any waiver so granted by the waiving party shall be without
prejudice to any other rights the waiving party may have, will be subject
to continuing review by the waiving party and may be revoked, in the
waiving party's sole discretion, at any time and for any reason, effective
upon delivery to the other party of ten (10) days' prior written notice.
21
(f) Waiver by Custom or Practice. ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall not
be deemed to have waived or impaired any right, power or option reserved
by this Agreement (including, without limitation, the right to demand
exact compliance with every term, condition and covenant herein or to
declare any breach thereof to be a default and to terminate this Agreement
prior to the expiration of its term) by virtue of any custom or practice
of the parties at variance with the terms hereof; any failure, refusal or
neglect of ▇▇▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ to exercise any right under this
Agreement or to insist upon exact compliance by the other with its
obligations hereunder, any waiver, forbearance, delay, failure or omission
by ▇▇▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ to exercise any right, power or option, whether
of the same, similar or different nature, or ▇▇▇. ▇▇▇▇▇▇' acceptance of
any payments due from ▇▇▇▇▇▇▇▇ after any breach of this Agreement.
(g) Force Majeure. Neither ▇▇▇. ▇▇▇▇▇▇ nor ▇▇▇▇▇▇▇▇ shall be liable
for loss or damage or deemed to be in breach of this Agreement if their
failure to perform obligations results from:
(i) compliance with any law, regulation, requirement or
instruction of any federal, state, municipal or foreign
government or any department or agency thereof;
(ii) acts of God;
(iii) fires, strikes, embargoes, war or riot; or
(iv) any other similar event or cause.
Any delay resulting from any of said causes shall extend performance
accordingly or excuse performance, in whole or in part, as may be
reasonable, except that said causes shall not excuse payments of amounts
owed at the time of such occurrence or payment of any Running Royalties or
Guaranteed Amounts for Royalty Bearing Products due on any sales
thereafter.
(h) Temporary Restraining Orders. Notwithstanding anything to the
contrary contained in this Agreement, ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall each
have the right in a proper case to obtain temporary restraining orders and
temporary or preliminary injunctive relief from a court of competent
jurisdiction.
(i) Rights Cumulative. The rights of ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
hereunder are cumulative and no exercise or enforcement by ▇▇▇. ▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ of any right or remedy hereunder shall preclude the exercise or
enforcement by ▇▇▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ of any other right or remedy
hereunder which ▇▇▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ is entitled by law to enforce.
22
(j) Costs and Attorney Fees. If a claim for amounts owed by ▇▇▇▇▇▇▇▇
to ▇▇▇. ▇▇▇▇▇▇ or its affiliates is asserted in any judicial proceeding or
appeal thereof, or if ▇▇▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ is required to enforce this
Agreement in any judicial proceeding or appeal thereof, the party
prevailing in such proceeding shall be entitled to reimbursement of its
reasonable costs and expenses, including reasonable accounting and legal
fees, whether incurred prior to, in preparation for, or in contemplation
of the filing of any written demand, claim, action, hearing or proceeding
to enforce the obligations of this Agreement. If ▇▇▇. ▇▇▇▇▇▇ incurs
expenses in connection with ▇▇▇▇▇▇▇▇'▇ failure to pay when due amounts
owing to ▇▇▇. ▇▇▇▇▇▇, to submit when due any reports, information or
supporting records or otherwise to comply with this Agreement, or if
▇▇▇▇▇▇▇▇ incurs expenses in connection with ▇▇▇. ▇▇▇▇▇▇ failure to comply
with this Agreement, including, but not limited to legal and accounting
fees, the party incurring the expense shall be reimbursed by the other
party for any such reasonable costs and expenses which it incurs.
(k) Governing Law. Except to the extent governed by the United
States Trademark Act of 1946 (▇▇▇▇▇▇ Act, 15 U.S.C. ▇▇.▇▇. 1051 et seq.)
or other federal law, this Agreement, and the relationship between
▇▇▇▇▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇, shall be governed by the laws of the State of
Utah.
(l) Jurisdiction. ▇▇▇▇▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇ hereby irrevocably
consent and agree that any legal action, suit or proceeding arising out of
or in any way in connection with this Agreement may be instituted or
brought in the United States District Court for the District of
California, or if that venue is unavailable due to lack of federal
jurisdiction, then in the state courts of Arizona, and ▇▇▇▇▇▇▇▇ and ▇▇▇.
▇▇▇▇▇▇ hereby irrevocably consent and submit to, for themselves and in
respect of their property, generally and unconditionally, the jurisdiction
of such Court, and to all proceedings in such Court. Further, ▇▇▇▇▇▇▇▇ and
▇▇▇. ▇▇▇▇▇▇ irrevocably consent to actual receipt of any summons and/or
legal process at their respective addresses as set forth in this Agreement
as constituting in every respect sufficient and effective service of
process in any such legal action or proceeding. ▇▇▇▇▇▇▇▇ and ▇▇▇. ▇▇▇▇▇▇
further agree that final judgment in any such legal action, suit or
proceeding shall be conclusive and may be enforced in any other
jurisdiction, whether within or outside the United States of America, by
suit under judgment, a certified or exemplified copy of which will be
conclusive evidence of the fact and the amount of the liability.
(m) Waiver of Punitive Damages. Except with respect to the
indemnification obligations of the parties hereunder, the parties waive to
the fullest extent permitted by law any right to or claim for any punitive
or exemplary damages against the other and agree that, in the event of a
dispute between them, the party making a claim shall be limited to
recovery of any actual damages it sustains.
23
(n) Headings. The headings of the several sections and paragraphs
hereof are for convenience only and do not define, limit or construe the
contents of such sections or paragraphs.
(o) Entire Agreement. This Agreement and the Exhibits hereto
represent the entire agreement between ▇▇▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ with
respect to the subject matter hereof and supersede any prior agreements
and negotiations between the parties.
(p) Exhibits. All Exhibits hereto form part of this Agreement.
(q) Counterparts. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same agreement, binding upon
both parties hereto, notwithstanding that both parties are not signatories
to the original or the same counterpart.
(r) Expenses. Each party shall bear its own expenses (including
attorneys' fees and expenses) in connection with the preparation,
negotiation, execution, and delivery of this Agreement.
IN WITNESS THEREOF, this Agreement has been executed by the Parties hereto
as of the date and year first written above.
▇▇▇▇▇▇▇▇ INC.
By: /s/ [illegible]
---------------------------------------
Its: President and C.E.O.
August 18, 1994
MRS. FIELD DEVELOPMENT CORPORATION
By: /s/ [illegible]
---------------------------------------
Its: President C.E.O.
24
EXHIBIT "A"
LICENSED NAMES AND MARKS
25
Int. Cl.: 30
Prior U.S. Cl.: 46
Reg. No. 1,791,781
United States Patent and Trademark Office Registered Sep. 7, 1993
--------------------------------------------------------------------------------
TRADEMARK
PRINCIPAL REGISTER
[Insert ▇▇▇. ▇▇▇▇▇▇ logo]
▇▇▇. ▇▇▇▇▇▇ DEVELOPMENT CORPORA-
TION (DELAWARE CORPORATION), DBA
▇▇▇. ▇▇▇▇▇▇ ICE CREAM
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FOR: ICE CREAM, IN CLASS 30 (U.S. CL. 46).
FIRST USE 4-1-1992; IN COMMERCE
4-1-1992.
OWNER OF U.S. REG. NOS. 449,876, 1,299,149
AND OTHERS.
THE NAME "▇▇▇. ▇▇▇▇▇▇" IS THE NAME
OF A LIVING INDIVIDUAL WHOSE CON-
SENT IS OF RECORD.
"▇▇▇. ▇▇▇▇▇▇" IS THE NAME OF A LIVING
INDIVIDUAL WHOSE CONSENT TO THE USE
OF HER NAME IS OF RECORD.
SER. NO. 74-319,021, FILED 10-1-1992.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, EXAMINING AT-
▇▇▇▇▇▇
Int. Cl.: 30
Prior U.S. Cl.: 46
Reg. No. 1,456,702
United States Patent and Trademark Office Registered Sep. 8, 1987
--------------------------------------------------------------------------------
TRADEMARK
PRINCIPAL REGISTER
[Insert ▇▇▇. ▇▇▇▇▇▇ logo]
▇▇▇. ▇▇▇▇▇▇ COOKIES (CALIFORNIA COR-
PORATION)
SUITE F200
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FOR: BAKERY GOODS, NAMELY COOKIES
AND BROWNIES, IN CLASS 30 (U.S. CL. 46).
FIRST USE 11-15-1981: IN COMMERCE
11-15-1981.
OWNER OF U.S. REG. NOS. 1,197,025, 1,299,149
AND OTHERS.
SEC. 2(F).
SER. NO. 530,088, FILED 4-1-1985.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, EXAMINING ATTOR-
NEY
Int. Cl.: 30
Prior U.S. Cl.: 46
Reg. No. 1,256,315
United States Patent and Trademark Office Registered Nov. 1, 1983
--------------------------------------------------------------------------------
TRADEMARK
PRINCIPAL REGISTER
[Insert ▇▇▇. ▇▇▇▇▇▇ logo]
▇▇▇. ▇▇▇▇▇▇' Chocolate Chippery (California
corporation)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇. ▇▇▇▇▇
For: BAKERY GOODS--NAMELY, COOKIES
AND BROWNIES, in CLASS 30 (U.S. Cl. 46).
First use Nov. 15, 1981; in commerce Nov. 15,
1981.
Owner of U.S. Reg. Nos. 1,197,025, 1,206,373 and
others.
No claim is made to the exclusive right to use the
word "Cookies", apart from the ▇▇▇▇ as shown.
"▇▇▇. ▇▇▇▇▇▇" is the name of a living individual
whose consent is of record.
Ser. No. 368,469, filed Jun. 7, 1982.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Examining Attorney
EXHIBIT "B"
ROYALTY BEARING PRODUCTS
Dry mix for cookie dough pre-packaged for retail sale
26