EXHIBIT 10.4
LICENSE AGREEMENT
THIS AGREEMENT, made and entered into this 29th day of September,
1999, by and between WW Foods, LLC, a Delaware limited liability company with
offices located at Suite 603, 877 West Main Street, Boise, Idaho 83702
(hereinafter referred to as "Licensor"), and Weight Watchers International,
Inc., a Virginia corporation with offices located at 175 Crossways Park West,
Woodbury, New York, 11797 (together with its successors and assigns, hereinafter
referred to as "Licensee" or "Weight Watchers").
WITNESSETH:
WHEREAS, Licensee seeks to obtain the right to manufacture, market,
distribute and sell certain food and beverage products, the Licensed Products
(as hereinafter defined), using the Food 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 right to use
the Food Trademarks and Program Information Improvements in connection with the
manufacture, marketing, distribution and sale of such Licensed Products in the
Territory and setting forth the terms and conditions governing such use;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and promises hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Licensor and Licensee, intending to be legally bound, hereby 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 have the meaning set forth in the
License Agreement between Licensee and Licensor's other licensee dated September
29, 1999.
"Confidential Information" shall have the meaning set forth in
Section_14.
"Effective Date" shall mean the day and year first above written.
"Food Trademarks" shall mean the Formation Trademarks and New Food
Trademarks.
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"Formation Trademarks" shall mean the registered trademarks,
trademark applications, and common law trademarks identified in Schedule A.
"Licensed Products" shall mean, for purposes of this Agreement, all
food and beverage products in categories other than those specified in Schedule
B hereto, which are marketed and sold under the WEIGHT WATCHERS brand (or any
derivative or translation thereof that may be adopted by Weight Watchers for use
in the Weight Watchers Business in its sole discretion).
"New Food Trademarks" shall mean all new common law trademarks,
trademark applications and trademark registrations that may be acquired by or
contributed to Licensor from time to time.
"Non-Recognition Food Trademarks" shall have the meaning set forth
in the License Agreement between Licensee and Licensor's other licensee dated
September 29, 1999.
"Program Information" shall mean 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,
Canada, the United Kingdom, Australia, New Zealand and France being identified
in the attached Schedule C), such information owned by Weight Watchers as is
reasonably necessary to develop, manufacture, market and distribute food and
beverage products in accordance with such Weight Watchers Program and to
calculate Points(R) or other measurements relating thereto, as well as the
Program Information Trademarks.
"Program Information Improvements" shall mean such information and
know-how as may be developed by Licensor's other licensee through use of Program
Information pursuant to this Agreement that Licensor's other licensee determines
would be useful for Weight Watchers in the development and application of
Program Information.
"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 those current Program Information Trademarks set
forth in Schedule D. Notwithstanding the foregoing, Program Information
Trademarks shall not include "Just 2 Points" or any derivative thereof.
"Program Information Trademark Standards" shall mean the quality
control standards set forth in Schedule E pertaining to use of the Program
Information Trademarks.
"Quality Control Requirements" shall mean the standards for use of
the Food Trademarks set forth in Schedule E.
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"Sublicensee" shall mean any recipient, whether prior to or after
the Effective Date, of a license or sublicense for use of the Food Trademarks or
Program Information Improvements, and shall include Licensee's Affiliates, where
applicable.
"Territory" shall mean the world, but excluding the specific
countries for the specific products set forth in Schedule B.
"Weight Watchers" shall mean Weight Watchers International, Inc.
"Weight Watchers Business" shall mean the weight control classroom
meetings, business and related activities owned or controlled by Weight Watchers
or Weight Watchers Affiliates, and conducted under the Weight Watchers name
including the Weight Watchers Program, and all promotional activities relating
thereto, including without limitation any program materials, Program
Information, Weight Watchers meeting rooms, recipes, publications, newsletters,
direct mail solicitations, advertising materials, posters, and other classroom
media, public relations programs, and Internet websites.
"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 Weight
Watchers or Weight Watchers Affiliates under the Weight Watchers trademark or
service mark.
"Weight Watchers Trademarks" shall mean all service marks and
trademarks owned, registered, applied for, used or intended to be used by Weight
Watchers, its Affiliates or Sublicensees, that are not Food & Beverage
Trademarks. For purposes of this Agreement only, "Weight Watchers Trademarks"
shall include "Just 2 Points" and any mark based upon, derived or translated
from, or substantially similar to, "Just 2 Points."
Section 2. Grant of License. (a) (i) Licensor hereby grants Licensee
the exclusive right and license to use the Food Trademarks and Program
Information Improvements in connection with the manufacture, marketing,
distribution and sale of Licensed Products throughout the Territory. Licensee
may sublicense the use of the Food Trademarks in connection with the
manufacture, marketing, distribution and sale of Licensed Products in any
country in the Territory. There is no limit to the number of levels of
sublicense that may be authorized by Licensee to an Affiliate. Licensee and its
Affiliates may grant a sublicense to a person who is not an Affiliate (the
"First Unaffiliated Sublicense"), 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. Notwithstanding the foregoing, Licensee may grant a sublicense to
any entity that operates a website under the Weight Watchers brand pursuant to a
license from Weight Watchers as if such entity were an Affiliate of Licensee,
whether or not such entity meets the definition of an Affiliate set forth
herein, and may authorize such entity to sublicense an unlimited number of
levels of Affiliates of such entity and a First Unaffiliated Sublicensee of such
entity, but any sublicense to a First Unaffiliated
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Sublicensee 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 Food 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 4 of this Agreement.
(ii) Licensor hereby grants to Licensee a non-exclusive,
royalty-free right and license to use the Food Trademarks and Program
Information Improvements in connection with the manufacture, marketing,
distribution and sale of all food and beverage products (and products comparable
thereto) ("Other Products") that were sold by Licensee in a particular country
within the year prior to the Effective Date (whether or not such products are
Licensed Products) and to retain all proceeds therefrom, but only for the
purpose of sale of such products through the same channels of distribution in
the Weight Watchers Business (it being understood that this does not limit
Licensee to sales made through the classrooms) through which Licensee sold such
products in that country within the year prior to the Effective Date.
(b) Licensor shall provide Licensee with access to all records and
materials related to the Food Trademarks and Program Information Improvements
upon request of Licensee.
(c) Licensor shall promptly notify Licensee of any change in the
Program Information Improvements of which Licensor becomes aware.
Section 3. Consideration for License. As part of the consideration
for the grant of this license, Licensee hereby grants Licensor access to and the
right to grant to Licensor's other licensee a non-exclusive right to use the
Program Information (including a right of use on new applications and any new
Program Information, including calculation of Points(R) values, developed or
adopted by or on behalf of Licensee, Licensee's Affiliates or Sublicensees after
the Effective Date) in connection with the manufacture, marketing, distribution
and sale of those food and beverage products that Licensor's other licensee is
licensed to sell, but only pursuant to and conditioned upon Licensor's
compliance with Sections 7, 8(c) and 8(g) of this Agreement and compliance by
Licensor's other licensee with the corresponding terms of the license to be
granted to Licensor's other licensee as of the Effective Date. All such new
information shall automatically be included in the definition of Program
Information and shall be made available to Licensor and, through Licensor, to
Licensor's other licensee.
Section 4. 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,
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including, without limitation, where necessary, engaging in appropriate quality
audits of Licensee's Sublicensees and Affiliates.
(a) All products manufactured, marketed, distributed and sold by
Licensee, Licensee's Affiliates, or Sublicensees prior to the Effective Date
utilizing the Food Trademarks and of a quality comparable to those manufactured,
marketed, distributed or sold by Licensor's other licensee prior to the
Effective Date utilizing the Food 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 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 Food Trademarks or the goodwill and
reputation associated with the use of the Food Trademarks.
(d) Quality control provisions relating to the Food Trademarks
contained in third party manufacturing agreements and sublicenses entered into
by Licensee, Licensee's Affiliates or Sublicensees or comparable to such
provisions contained in such agreements that were entered into by Licensor's
other licensee, that were existing on the Effective Date are deemed to be
approved by the Licensor.
(e) Licensee shall submit reports to Licensor on a quarterly basis
regarding quality control procedures of Licensee, compliance by Licensee,
Licensee's Affiliates and Sublicensees with the Quality Control Requirements,
and such other quality-related information that Licensor may reasonably request
of all of its licensees, as will be determined by the Quality Control Managers
of Licensor.
Section 5. 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, advertising or promotional
materials) prior to commercial sale. 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 only on the
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grounds that such proposed new Licensed Product does not conform to the Quality
Control Requirements.
Section 6. 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.
(a) In the event of a recall of a Licensed Product, Licensee,
Licensee's Affiliates or Sublicensees, as applicable, will inform Licensor 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 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, Licensee, Licensee's Affiliates and Sublicensees
shall supply to Licensor two samples of each of the Licensed Products per year
to enable Licensor to confirm compliance of Licensee, Licensee's Affiliates and
Sublicensees with the Quality Control Requirements.
Section 7. Use of Program Information by Licensor's Other Licensee.
All products using or displaying the Program Information and Program Information
Trademarks that were manufactured, marketed, distributed or sold by Licensor's
other licensee, its Affiliates or Sublicensees prior to the Effective Date are
deemed to be approved by Licensor and Licensee.
(a) Licensor will cause Licensor's other licensee, its Affiliates
and Sublicensees to submit copies of all new or changed labels, packaging and
advertising materials for Licensed Products displaying or using the Program
Information Trademarks (a "New Use") to Licensor for approval prior to
commercial use. Licensor shall have twenty-one (21) days from receipt of such
materials to respond to the party making such request for approval. Licensor
shall approve the New Use of Program Information Trademarks if it is in
accordance with the Program Information Trademark Standards. If Licensor fails
to respond within twenty-one (21) days of receipt, such materials will be deemed
approved as submitted. If Licensor indicates within such twenty-one (21) day
period that it does not approve such materials. Licensor will provide written
explanation setting forth with reasonable
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specificity why the proposed New Use is not in conformance with the Program
Information Trademark Standards, and Licensee, its Affiliates and Sublicensees
shall not engage in the New Use without Licensor's express written approval.
(b) Licensor will cause Licensor's other licensee, its Affiliates or
Sublicensees, as the case may be, to submit copies of all new or changed labels,
packaging, promotional or advertising materials for Licensed Products displaying
or using Program Information terminology (including the calculation of Points
values) to Licensee for approval prior to commercial use. Licensee shall have
twenty-one (21) days from receipt of such materials to respond to the party
making such request for approval. Licensee shall approve the new or changed use
of Program Information terminology if the proposed display or use of Program
Information terminology is substantially accurate in its presentation,
application and calculation of Program Information terminology (including the
calculation of Points values). If Licensee fails to respond within twenty-one
(21) days of receipt, such materials will be deemed approved as submitted. If
Licensee indicates within such twenty-one (21) days period that it does not
approve such materials, Licensee will provide a written explanation setting
forth with reasonable specificity why it objects to the proposed display or use
of Program Information terminology and Licensee, its Affiliates and Sublicensees
shall not engage in the proposed display or use without Weight Watchers express
written approval. Licensee may object to the new or changed use of Program
Information terminology pursuant to this provision only on grounds of
substantial inaccuracy in the presentation, application or calculation of
Program Information terminology (including Points values).
(c) Licensor shall impose an obligation upon Licensor's other
licensee, its Affiliates and Sublicenses to submit to Licensee a minimum of two
samples of any proposed new Licensed Product utilizing Program Information
(including any packaging, labels, advertising or promotional materials), or
information sufficient to allow Licensee to determine with reasonable facility
whether the Program Information terminology (including the calculation of Points
values) is being presented, applied and calculated correctly, prior to
commercial sale. Within twenty-one (21) days of receipt of such samples or other
information, Licensee shall respond to the party making such request for
approval. Licensee shall approve such new Licensed Product or the proposed use
of Program Information terminology in connection therewith if the proposed
display or use of Program Information terminology in connection with such
Licensed Product is substantially accurate in its presentation, application and
calculation of Program Information terminology (including the calculation of
Points values). If Licensee fails to respond within twenty-one (21) days of
receipt, such new Licensed Product or related materials shall be deemed approved
as submitted. If Licensee indicates within such twenty-one (21) day period that
it does not approve such new Licensed Product or related materials, Licensee
will provide a written explanation setting forth with reasonable specificity why
it objects to the proposed display or use of Program Information terminology,
and Licensor's other licensee shall not, and shall cause its Affiliates and
Sublicensees not to, sell the new Licensed Product utilizing the Program
Information or engage in the proposed display or use without Weight Watchers
express written approval. Licensee may object to the new Licensed Product or
proposed use of Program Information terminology in connection therewith pursuant
to this provision only on grounds of substantial inaccuracy in the
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presentation, application or calculation of Program Information terminology
(including the calculation of Points values).
(d) Nothing herein shall be construed as limiting any right of
approval that Licensee may otherwise have with respect to the sale of new
products by Licensor's other licensee, its Affiliates and Sublicensees, as may
be set forth in any agreement between Licensor, Licensee and Licensor's other
licensee. Licensor acknowledges and agrees that, in performing its obligations
to Licensee pursuant to Section 7(b) above regarding the exercise of quality
control over Licensor's other licensee, such licensee's Affiliates and
Sublicensees, it is acting pursuant to appointment by Licensee (which
appointment may be revoked at any time), and that Licensor will follow
Licensee's instructions with respect to its performance of such obligations.
(e) Licensor acknowledges, and shall cause Licensor's other licensee
and its Affiliates to acknowledge, that Licensee may change the Weight Watchers
Program and Program Information in a particular jurisdiction at any time without
Licensor or Licensor's other licensee's consent. If Licensee makes a change in
the Program Information of a nature that requires Licensor's other licensee, its
Affiliates or Sublicensees to make a change in labels, packaging, advertising or
promotional materials utilizing Program Information terminology that was
previously approved by Licensee for use in such jurisdiction, Licensee shall so
notify Licensor and furnish Licensor with such new Program Information as may
reasonably be required by Licensor's other licensee to change such materials so
that the display or use of Program Information in such materials is
substantially accurate in its presentation, application or calculation of
Program Information terminology. Licensor shall cause Licensor's other licensee
to agree (i) that within six (6) months following receipt of such notice, all
Licensed Products utilizing Program Information manufactured by Licensor's other
licensee or its Affiliates shall conform to the new Program Information and
Program Information terminology; and (ii) that following receipt of such notice,
Licensee and its Affiliates shall also use their best efforts to try to cause
their Sublicensees utilizing Program Information or Program Information
terminology to conform their use in such jurisdiction to the new Program
Information within a reasonable period of time.
Section 8. Proprietary Rights. Licensee acknowledges for itself,
Licensee's Affiliates and Sublicensees that Licensor is the sole and exclusive
owner of the Food Trademarks, and that Licensee, Licensee's Affiliates and
Sublicensees will not contest, or take any action or make any statement
inconsistent with, Licensor's exclusive title to and ownership of the Food
Trademarks, or the validity of Licensor's registrations for the Food Trademarks.
Licensee agrees that all goodwill resulting from use of the Food Trademarks by
Licensee, Licensee's Affiliates, or Sublicensees shall inure to the benefit of
Licensor.
(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 Food Trademarks:
"[FOOD TRADEMARK] is the registered trademark of WW Foods LLC."
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and when appropriate or required by local law the addition:
"and used under license"
or words to that effect.
(b) Licensor acknowledges for itself, and shall cause its other
licensee, its Affiliates and Sublicensees to acknowledge that Licensee is the
sole and exclusive owner of the Program Information and that Licensor, its other
licensee, its other licensee's Affiliates and Sublicensees will not contest, or
take any action or make any statement inconsistent with, Licensee's exclusive
title to and ownership of the Program Information or the validity of Licensee's
registrations of the Program Information Trademarks. Licensor agrees, and shall
cause its other licensee, its other licensee's Affiliates and Sublicensees to
agree, that all goodwill resulting from use of the Program Information
Trademarks by Licensor's other licensee, its Affiliates or Sublicensees shall
inure to the benefit of Licensee.
(c) Licensor shall cause its other licensee, its Affiliates and
Sublicensees to cause the following notice to be placed on all labels,
advertising and promotional materials carrying the Program Information
Trademarks:
"[PROGRAM INFORMATION TRADEMARK]" is the registered trademark of
Weight Watchers International, Inc."
and when appropriate or required by local law the addition:
"and used under license"
or words to that effect.
(d) With respect to products or services sold in connection with the
Weight Watchers business other than the Licensed Products, Licensee shall, and
shall cause its Affiliates and Sublicensees to, place the following notice on
all labels, advertising and promotional materials carrying the WEIGHT WATCHERS
trademark or service mark:
"WEIGHT WATCHERS is the registered trademark of Weight Watchers
International, Inc."
or
"WEIGHT WATCHERS is the registered service mark of Weight Watchers
International, Inc."
as appropriate.
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(e) Licensor acknowledges and shall not contest Licensee's or its
Affiliates' ownership of the Program Information, including Program Information
Trademarks. Licensor agrees and shall cause its other licensee, its Affiliates
and Sublicensees to agree, that all goodwill resulting from use of the Program
Information (including Program Information terminology and Program Information
Trademarks) shall inure to the benefit of Licensee or its Affiliates, as
appropriate.
(f) Licensor acknowledges Licensee's (or Licensee's Affiliates' or
Sublicensees', in appropriate circumstances) ownership of the Licensed Products
(but not any use of the Food Trademarks or Program Information Improvements in
connection therewith), as well as of 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 its Affiliates' or Sublicensees', in appropriate circumstances)
Confidential Information.
(g) Licensor shall take such steps as may be appropriate to enforce
against each of its licensees the quality control and other obligations of such
licensee's respective license in a manner consistent with the LLC Agreement.
Section 9. 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 9(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 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 9,
Licensee, Licensee's Affiliates and Sublicensees shall, unless otherwise agreed
in writing with the Licensor, cease any and all use of the Food Trademarks and
the obligations set forth in Sections 11, 12, 14 and 16 shall survive any
termination of this Agreement.
Section 10. Preservation of Food Trademarks. Maintenance and Renewal
of Food Trademarks. Licensor agrees to act on such reasonable instructions as
Licensee shall provide to maintain and renew registrations for use of the Food
Trademarks in connection with
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Licensed Products. Licensor will use its best efforts to provide Licensee with
at least one hundred twenty (120) days' written notice of Food Trademark renewal
and maintenance due dates except for intention to use applications, with respect
to which Licensor will provide sixty (60) days' written notice. Unless otherwise
instructed by Licensee and Licensor's other licensee, Licensor shall renew and
maintain all such Food Trademark registrations.
(a) New Registrations. Licensee shall not apply to register any
trademark that is substantially similar to, based upon, or translated or derived
from any Food Trademark (a "Derivative Food Trademark") in any jurisdiction in
the world, except pursuant to this provision. Licensee shall request Licensor to
file and prosecute such applications at Licensee's request and at Licensee's
expense. Licensor shall then promptly seek and obtain an opinion of independent
counsel of its choice having expertise in the trademark law of the relevant
jurisdiction(s) ("Qualified Counsel") with respect to such requested
registration concerning the following subjects, and Licensor shall not apply for
a registration requested by Licensee in a particular jurisdiction if: (i)
Qualified Counsel retained by Licensor opines, or Licensor receives notice from
Licensor's other Licensee that it has received advice from Qualified Counsel
retained by it, that such application or registration is likely to materially
adversely affect the Food Trademarks as used by one or more licensees of
Licensor or such licensee's Affiliates or Sublicensees in that jurisdiction;
(ii) if there is no existing Food Trademark, Associated Food Trademark or
Non-Recognition Food Trademark in that jurisdiction, Qualified Counsel retained
by Licensor opines, or Licensor receives notice from Licensee or Licensor's
other licensee that it has received advice from Qualified Counsel retained by
it, that the law or regulatory authority of such jurisdiction likely will or
would require association with another service mark or trademark registration or
pending application filed or which may be filed for services or goods other than
foods or beverages by Licensee for any of the Weight Watchers Trademarks (or any
derivative or translation thereof) in that jurisdiction, in which case Licensor
shall not make such application and Licensee may proceed to make such
application if Licensee includes such application (together with any trademark
registration resulting therefrom) in the definition of Associated Food
Trademarks for purposes of the license between Weight Watchers and Heinz; or
(iii) if there is no existing Food Trademark, Associated Food Trademark or
Non-Recognition Food Trademark in that jurisdiction, Qualified Counsel retained
by Licensor opines, or Licensor receives notice from Licensee or Licensor's
other Licensee that it has received advice from Qualified Counsel retained by
it, that the law or regulatory authority of such jurisdiction likely will not or
would not register or permit the enforcement of trademarks by the LLC or an
entity that owns but does not use (except through use by a registered user or
licensee) a trademark in that jurisdiction, in which case Licensor shall not
make such application and Licensee may proceed to make such application if
Licensee includes such application (together with any trademark registration
resulting therefrom) in the definition of Non-Recognition Food Trademarks for
purposes of the license between Weight Watchers and Heinz. Any determination or
evaluation to be made concerning the substance of the opinion or advice of
Qualified Counsel, including the assessment of the likelihood of any risk or
required treatment under the local law of any relevant jurisdiction, shall be
made by
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Licensee, Licensor or Licensor's other licensee in their respective sole
discretion and shall not be subject to formal challenge by any other party.
Licensor shall give each of its licensees prompt notice of any request made by
the other licensee to apply for any new trademark registration pursuant to this
provision and, to the extent permissible without violating any applicable
privilege, of the substantive conclusion of any opinion of counsel received by
Licensor with respect thereto. In any jurisdiction in which there is no existing
Food Trademark but there is an existing Associated Food Trademark or
Non-Recognition Food Trademark, Licensee may proceed to make such application,
at its own initiative and expense, provided that it gives notice thereof to
Licensor and Licensor's other licensee and agrees to include such application
(together with any trademark registration resulting therefrom) in the
appropriate definition for purposes of the license between Weight Watchers and
Heinz. Any new registration made by Licensor at the request of Licensee shall
become a New Food Trademark and shall be included in the definition of Food
Trademarks for purpose of this Agreement.
(b) Mutual Cooperation. The parties agree to cooperate with each
other and with the other licensee of Licensor in protecting and defending the
Food Trademarks and the Program Information. Licensee will periodically (no less
than once per year or otherwise upon reasonable written request) furnish
Licensor with samples of all labels, promotional, advertising, and marketing
material showing its use of the Food Trademarks. Licensee also agrees to
cooperate with Licensor 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.
(c) Without limiting the generality of the foregoing, except as the
parties may otherwise agree, 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 identical or
confusingly similar to any Food Trademark for use in relation to any food and
beverage products, whether or not any such Food Trademark is registered by
Licensor in such jurisdiction.
(d) The parties agree to execute such documents from time to time as
may be reasonably necessary to carry out the intent of this Section 10.
(e) Unauthorized Use.
(i) Each party agrees to notify the other in writing of any
unauthorized use of the Food Trademarks or Program Information 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 with respect to the use of the Food Trademarks
and Program Information
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hereunder to the extent permissible under local law; provided,
however, that Weight Watchers, as Licensor's licensor of the Program
Information, shall have sole discretion regarding any action to be
taken with respect to Program Information.
(ii) With respect to any infringement, unauthorized use, or
interference with or violation of the Food Trademarks by a third
party which does not primarily affect Licensed Products, Licensee
may, in its sole discretion and at its own 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's other licensee whose licensed uses of the Food
Trademarks are primarily affected 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 other
licensee (or such licensee's Affiliates or Sublicensees) with
respect to the Food Trademarks. Licensee may, but shall not be
obligated to, join as a party in such action unless the action is
brought by Licensor or Licensor's other licensee 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 (f)(i) or (f)(ii) brought by Licensee, Licensee's
Affiliates or Sublicensees or Licensor's other licensee (or such
licensee's Affiliates or Sublicensees), Licensor agrees to join any
such action at the request of such licensee at such licensee's
expense.
(f) 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 Food 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.
(g) Licensor agrees to take such action or to execute such documents
as may reasonably be necessary to empower the other party to bring such action
on its behalf. Licensee will pay its own costs and will pay the out-of-pockets
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.
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Section 11. 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, 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 Food Trademarks, Program Information and Licensor's and
Licensee's rights hereunder as the case may be, because the Food Trademarks and
Program Information are unique and the success and viability of the marketing
and sales of Licensed Products and of all other goods and services sold by
Licensee (whether actual or potential), and the marketing and sales of Licensed
Products by Licensor's other licensee, depend upon Licensor's and Licensee's
compliance with the terms of this Agreement.
(b) Except as provided in Section 9, 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 12. 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 Licensed Products; (ii) use of the Food
Trademarks, Program Information or Program Information Improvements by Licensee,
its Affiliates and Sublicensees after the Effective Date; or (iii) any action
commenced by Licensee pursuant to Section 10(f)(i) and (ii) above, or in which
Licensor joins pursuant to Section 10(f)(iv) above.
(a) Licensor shall cause Licensor's other licensee to indemnify and
to agree to defend Licensee 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 Licensed Products
as defined in and pursuant to a license granted by Licensor; (ii) use of the
Food Trademarks, Program Information and Program Information Improvements by
Licensor's other licensee, its Affiliates and Sublicenses after the Effective
Date; or (iii) any action brought or commenced by Licensor's other licensee
respecting the Food Trademarks, Program Information or Program Information
Improvements.
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(b) Each party shall provide the other party with reasonable notice
of any claim for which it seeks indemnification under this Section 12 and shall
cooperate with the defense of any such claim.
(c) Each party agrees that the provisions of this Section 12 shall
survive any termination of this Agreement for the period of any applicable
statute of limitations.
Section 13. Insurance. At all times during the term of this
Agreement, Licensee will maintain adequate professional/product liability
insurance sufficient to cover claims related to the Licensed Products and the
business conducted by Licensee. Licensee's insurance policy shall name Licensor
and Licensor's other licensee as additional insureds. 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
13(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;
(ii) Moody's;
(iii) I.B.C.A.;
(iv) Duff and Phelps; 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 14. 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
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of this Agreement; or is disclosed with the written consent of the party who
owns the Confidential Information.
Section 15. Assignment; Transfer. Except as provided herein, neither
party may 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 and Licensor's other licensee.
(a) Licensee may assign or transfer its rights, but not any partial
interest therein, under this Agreement with the consent of Licensor and
Licensor's other licensee, or without any consent if the assignment or transfer
is made: to an Affiliate or to a purchaser from Licensee of all or substantially
all of the assets to which Licensee's use of the Food 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) that the Affiliate or purchaser will
also assume ownership in the Licensee's membership interest in WW Foods, LLC and
of its rights and obligations in 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 the sale or issuance of stock by a party, or the granting of any
security interest in or pledge of a collateral interest in or to Licensee's
rights under this Agreement, standing alone, shall not constitute an assignment
or transfer subject to this Section 15 or otherwise require the consent of any
other party or person.
(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.
(d) Licensor shall not transfer, encumber, license or dispose of any
of the Food Trademarks or the Program Information without the consent of
Licensee.
(e) Licensor shall not borrow money, and shall incur liabilities
solely in the ordinary course of its business.
(f) Licensor shall not amend its certificate of formation or the LLC
Agreement without the consent of Licensee and Licensor's other licensee.
(g) Licensor shall not enter into or amend any license of the Food
Trademarks or the Program Information without consent of Licensee and Licensor's
other licensee.
Section 16. Costs and Expenses. Each party agrees to be responsible
for its respective costs and expenses arising from their entry into this
Agreement.
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Section 17. 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:
Weight Watchers International, Inc.
175 Crossway Parkway
Woodbury, New York 11797
Attn: President with a copy to the General Counsel
(ii) if to Licensor:
WW Foods, LLC
877 West Main Street
Suite 603
Boise, Idaho 83702
Attn: Administrative Manager
Section 18. 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 19. Notice From Other Licensees. If Licensor receives from
any licensee any notice related to the Food Trademarks, Program Information,
Program Information Improvements or any of Licensor's license agreements with
such licensee, its Affiliates or Sublicensees, Licensor shall provide such
notice to all other licensees.
Section 20. 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 the Agreement, may
be amended or modified only in writing and when executed by both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
WW FOODS, LLC
By:
Name:
Title:
WEIGHT WATCHERS INTERNATIONAL
By:
Name:
Title: