EXHIBIT 10.6
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 H. J. Heinz Company, a Pennsylvania
corporation with offices located at 600 Grant Street, Pittsburgh, Pennsylvania,
15219 (together with its successors and assigns, hereinafter referred to as
"Licensee" or "Heinz").
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) and
Program Information (as hereinafter defined) throughout the Territory (as
hereinafter defined) as provided herein; and
WHEREAS, Licensor and Licensee wish to enter into a long-term
licensing relationship granting Licensee and its Sublicensees the continuing
right to use the Food Trademarks and the Program Information 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 Weight Watchers 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, food
and beverage products in the categories specified in Schedule B hereto, which
are marketed and sold under the WEIGHT WATCHERS brand (or any derivative or
translation thereof that has been specifically approved in writing by Weight
Watchers).
"Licensee's Food Trademarks" shall mean the trademarks identified in
Schedule C attached hereto.
"Licensee Retained Trademarks" shall mean the trademarks identified
in Schedule D hereto.
"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 Weight Watchers 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
and Canada, the United Kingdom, Australia and New Zealand, and France being
identified in the attached Schedule E), 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
knowhow as may be developed by Licensee through use of Program Information
pursuant to this Agreement that 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 F. 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 G pertaining to use of the Program
Information Trademarks.
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"Quality Control Requirements" shall mean the standards for use of
the Food Trademarks set forth in Schedule G.
"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, and shall include Licensee's Affiliates, where applicable.
"Territory" shall mean the world, except when limited to specific
countries for specific Licensed Products as identified in Schedule 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. Subject to the restrictions of Section
2(a)(ii) of this Agreement, Licensor hereby grants Licensee the exclusive right
and license to use the Food Trademarks and Program Information in connection
with the manufacture, marketing, distribution and sale of Licensed Products in
the Territory. Licensee may sublicense the use of the Food Trademarks and
Program Information in connection with the manufacture, marketing, distribution
and sale of Licensed Products to a person located or having a principal place of
business in any country in the Territory in which Licensee or Licensee's
Affiliates are manufacturing, marketing, distributing or selling any food or
beverage products; provided, however, that this sentence will not be interpreted
as a limitation on the territory that any such Sublicensee is authorized under
such sublicense to distribute and sell the Licensed Products. There is no limit
to the number of levels of sublicense that may be authorized by Licensee as long
as such sublicensee is an Affiliate of Licensee. Licensee and its Affiliates may
grant a sublicense to a person who is not an Affiliate (the "First Unaffiliated
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Sublicensee"), provided that all use is in compliance with the terms of this
Agreement, but any such sublicense shall not include any right to sublicense to
any person not an Affiliate of the First Unaffiliated Sublicensee. Licensee
shall, and shall require Licensee's Affiliates and Sublicensees to, use the Food
Trademarks and Program Information 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.
The Program Information Trademarks shall be used only to identify the Program
Information or the Weight Watchers Program and not as brands or sub-brands for
Licensed Products.
(a) Licensee acknowledges and agrees that Weight Watchers
shall own and have the exclusive right to use all domain names or other
means for providing direct access to a website or dedicated portion of a
website using, incorporating, or derived from the Food Trademarks, the
Program Information or the Weight Watchers Trademarks. Licensee shall not
use any of the Licensee Retained Trademarks as a domain name or as an
identifier for a means of providing access to a website or dedicated
portion of a website promoting, advertising or selling Licensed Products
("Licensee Retained Trademark Website"). Licensee acknowledges and agrees
further that access to such Licensee Retained Trademark Websites shall
only be through a website controlled by or operated pursuant to license
from Weight Watchers, the primary Heinz website in each of the U.S. and
Canada, and the Heinz Frozen Food website; Licensee's websites promoting
Licensed Products shall provide access by display of a hyperlink or other
means of transfer to a website to be designated by Weight Watchers, and
the primary website operated under the Weight Watchers brand name shall
provide access by display of a hyperlink or other means of transfer to
Licensee's websites promoting Licensed Products; and websites controlled
by Licensee which advertise, promote or sell Licensed Products shall not
include content substantially similar in nature to any website controlled
by or operated pursuant to license from Weight Watchers, but may include
information concerning the nutritional aspects of Licensed Products,
recipes and the like. For the avoidance of doubt, Licensee may promote,
advertise and sell Licensed Products on a website using any trademark as a
domain name or identifier, other than any domain name or identifier using,
incorporating, derived from or confusingly similar to Licensee Retained
Trademarks, the Food Trademarks, the Program Information Trademarks or the
Weight Watchers Trademarks.
(b) Licensor hereby grants Licensee a non-exclusive right and
license to use the Food Trademarks and Program Information in connection
with the manufacture, marketing, distribution and sale of food and
beverage products other than the Licensed Products ("Other Products")
throughout the world, but only in respect to and to the extent strictly
necessary to fulfill Licensee's obligations to third parties as they may
exist as of the Effective Date pursuant to those existing (i) licenses
previously granted by Weight Watchers to parties including Heinz or its
Affiliates concerning rights to manufacture, market, distribute or sell
Other Products under the Food Trademarks ("Direct Food Trademark
Licenses"), which are or will be assigned
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to Licensee and as to which Licensee has assumed the obligations of Weight
Watchers, including but not limited to those identified on the attached
Schedule H, and (ii) sublicenses previously granted by Heinz or its
Affiliates to third parties (pursuant to a license previously granted to
Heinz or its Affiliates by Weight Watchers) concerning the right to
manufacture, market, distribute or sell Other Products under the Food
Trademarks ("Heinz Sublicenses"), including but not limited to those
identified on the attached Schedule I. The license granted hereby to
Licensee, its Affiliates and Sublicensees is conditioned upon the exercise
and enforcement of appropriate quality control by Licensee with respect to
Other Products and all uses of the Food Trademarks and Program Information
in connection therewith. Neither Licensee, its Affiliates or Sublicensees
shall have any right to use the Program Information Trademarks on any
product that is not marketed or sold under the WEIGHT WATCHERS brand (or
any derivative or translation thereof that is specifically approved in
writing by Weight Watchers). The license granted pursuant to this
provision regarding Other Products shall have a term of five (5) years
following the Effective Date, and shall not be renewable. Nothing herein
shall be construed as granting to Licensee any right to enter into any new
agreement or to incur any new obligation with or to third parties
respecting use of the Food Trademarks or Program Information in connection
with the marketing or sale of Other Products, or as granting to Licensee
any right to manufacture, distribute, market or sell Other Products for
their own account.
(c) To the extent that Licensee or any of its Affiliates is
currently manufacturing, marketing, distributing or selling Other Products
pursuant to a Direct Food Trademark License for its own account in a
manner that would violate the preceding provision if engaged in after the
Effective Date, Licensor hereby grants Licensee or its Affiliates, as may
be appropriate, a non-exclusive right and license for a transitional
period of ninety (90) days to use the Food Trademarks and Program
Information in the same manner in which Licensee or its Affiliate is using
such Food Trademarks or Program Information as of the Effective Date.
Following such transitional period, Licensee or its Affiliates, as may be
appropriate, shall immediately cease any and all use of such Food
Trademarks and Program Information unless it obtains a new sublicense from
Licensor's other licensee with respect to such use. All use by Licensee
and its Affiliates of the Food Trademarks and Program Information during
the transitional period shall otherwise be subject to the terms of this
Agreement.
(d) Licensor shall provide Licensee with access to all records
and materials related to the Food Trademarks and Program Information upon
request of Licensee.
(e) Licensor shall promptly notify Licensee of any change in
the Program Information 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 Improvements (including a right of use on new applications
and Program Information Improvements developed or adopted by or on behalf of
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Licensee, its 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. Program
Information Improvements 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, including, without limitation,
where necessary, engaging in appropriate quality audits of Licensee's
Sublicensees and Licensee's Affiliates.
(a) All products manufactured, marketed, distributed and sold
by Licensee, Licensee's Affiliates, or Sublicensees prior to the Effective
Date utilizing the 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 or Other Products in all relevant jurisdictions.
(c) During the term of this Agreement, Licensee, Licensee's
Affiliates and Sublicensees shall not exercise the rights granted
hereunder in any manner that would have a material tendency to denigrate
or otherwise materially diminish the value of the Food Trademarks or the
goodwill and reputation associated with the use of the Food Trademarks.
(d) Quality control provisions relating to the Food Trademarks
in third party manufacturing agreements and sublicenses entered into by
Licensee, its Affiliates or Sublicensees or 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, its 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
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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 pursuant to this
provision only on the 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 and Program Information
Trademarks. All products using or displaying the Program Information and Program
Information Trademarks that were manufactured, marketed, distributed or sold by
Licensee, its Affiliates, or Sublicensees prior to the Effective Date are deemed
to be approved by Licensor and Licensor's other licensee.
(a) Licensee, Licensee's Affiliates or Sublicensees, as the
case may be, shall
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submit copies of all new or changed labels, packaging, promotional or
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 a written explanation setting forth
with reasonable 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) Licensee, its Affiliates or Sublicensees, as the case may
be, shall 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 Weight Watchers for approval prior to commercial use. Weight
Watchers shall have twenty-one (21) days from receipt of such materials to
respond to the party making such request for approval. Weight Watchers
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 Weight Watchers fails to respond within twenty-one (21) days
of receipt, such materials will be deemed approved as submitted. If Weight
Watchers indicates within such twenty-one (21) day period that it does not
approve such materials, Weight Watchers 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. Weight Watchers 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) Licensee, its Affiliates and Sublicensees shall submit to
Weight Watchers a minimum of two samples of any proposed new Licensed
Product utilizing the Program Information (including any packaging,
labels, advertising or promotional materials) or information sufficient to
allow Weight Watchers 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, Weight Watchers shall respond to the party making such
request for approval. Weight Watchers shall approve such new Licensed
Product or the proposed use of Program Information terminology in
connection therewith if the 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
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terminology (including the calculation of Points values). If Weight
Watchers fails to respond within twenty-one (21) days of receipt, such new
Licensed Product or related materials shall be deemed approved as
submitted. If Weight Watchers indicates within such twenty-one (21) day
period that it does not approve such new Licensed Product or related
materials, Weight Watchers 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 sell the new Licensed Product utilizing the
Program Information or engage in the proposed display or use without
Weight Watchers express written approval. Weight Watchers 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 presentation, application or
calculation of Proposed Information terminology (including Points values).
(d) Nothing herein shall be construed as limiting any right of
approval that Licensor's other licensee or Licensor may otherwise have
with respect to the sale of new products by Licensee, its Affiliates or
Sublicensees, as may be set forth in any agreement between or among
Licensor, Licensee and Licensor's other licensee.
(e) Licensee, on behalf of itself and its Affiliates,
acknowledges that Weight Watchers may change the Weight Watchers Program
and Program Information in a particular jurisdiction at any time without
Licensee's consent. If Weight Watchers makes a change in the Program
Information of a nature that requires 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 Weight Watchers for use in such jurisdiction,
Weight Watchers shall so notify Licensee and furnish Licensee with such
new Program Information as may reasonably be required by 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. Within six (6) months
following receipt of such notice, all Licensed Products in such
jurisdiction utilizing Program Information manufactured by Licensee or its
Affiliates shall conform to the new Program Information and Program
Information terminology. 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, its
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.
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(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"
and when appropriate or required by local law the addition:
"and used under license"
or words to that effect.
(b) Licensee acknowledges for itself, its Affiliates and
Sublicensees that Weight Watchers is the sole and exclusive owner of the
Program Information, that Licensee's rights of access and use of the
Program Information have been granted to Licensee by Licensor who has been
licensed rights of access and use and the right to license the Program
Information to Licensee, Licensee's Affiliates and Sublicensees. Licensee,
Licensee's Affiliates and Sublicensees will not contest, or take any
action or make any statement inconsistent with Weight Watchers exclusive
title to and ownership of the Program Information and Program Information
Trademarks, or the validity of Weight Watchers registrations of the
Program Information Trademarks. Licensee agrees that all goodwill
resulting from use of the Program Information by Licensee, Licensee's
Affiliates and Sublicensees shall inure to the benefit of Weight Watchers.
(c) Licensee shall cause, and shall cause 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 service mark [or
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.
(i) Licensor acknowledges and shall not contest Licensee's or
its Affiliates' ownership of Program Information Improvements and of
Licensee's Food Trademarks. Licensor agrees that all goodwill
resulting from use of Licensee's Food Trademarks (but not the Food
Trademarks) in connection with the sale of Licensed Products shall
inure to the benefit of Licensee or its Affiliates, as appropriate.
The parties recognize that Licensee's Food Trademarks have been
previously used together with the Food
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Trademarks (e.g., Smart Ones and Weight Watchers, Heinz and Weight
Watchers) on labels, advertising and promotions, and that Licensee
may continue to use Licensee's Food Trademarks together with the
Food Trademarks in the combinations and in the jurisdictions in
which they are in use as of the Effective Date, as specified in the
attached Schedule F. Licensor acknowledges that distribution and use
may extend beyond these countries because of external circumstances
outside of the control of Licensee, such as manufacturing,
warehousing, and distribution logistics or sales to multinational
accounts. Licensee, its Affiliates and Sublicensees shall not use
the Food Trademarks with Licensee's Food Trademarks or any other
trademarks that may be adopted for use on food products from time to
time by Licensee, its Affiliates or Sublicensees, in such a manner
as to create a material risk of the establishment of a combination
mark, without the permission of Licensor and Licensor's other
licensee. Licensee shall make no claim of ownership or right in any
permitted use of the Food Trademarks in combination with any other
mark, and the parties shall take all steps necessary to cause the
cancellation of any existing registration or abandon any pending
application relating to any such combination, including but not
limited to "Weight Watchers from Heinz," at Licensee's expense.
(ii) Licensor agrees to the continued use of the appropriate
Formation Trademarks (e.g., Main Street Bistro, Sweet Celebrations,
Chocolate Treat, etc.) by Licensee, its Affiliates or Sublicensees
as sub-brands in a subordinate manner to the Weight Watchers name
without prior approval by Licensor. Licensee, its Affiliates and
Sublicensees may continue to use their names and corporate logos as
corporate identifiers in a substantially subordinate manner to the
Weight Watchers name for the purpose of identifying them, its
Affiliates or Sublicensees, as the case may be, as the manufacturer
or distributor for Licensed Products.
(d) 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 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.
(e) 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
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terminated pursuant to Section 9(b) or 9(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, (i) 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 Program Information, including the Program
Information Trademarks and (ii) 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 the 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, translated or
derived from any Food Trademark (a "Derivative Food Trademark") in any
jurisdiction in the world, except pursuant to this provision. Licensee may
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: 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 or Program Information Trademarks as
used by one or more licensees of Licensor, or such licensee's Affiliates
or Sublicensees in that jurisdiction; 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 Licensor's other licensee that it has
received advice from Qualified Counsel retained by it,
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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 Weight Watchers 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 Licensor's other licensee may proceed to make such
application, at Licensee's initiative and expense, if Licensee agrees to
include 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 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 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 Licensor's other
licensee may proceed to make such application, at Licensee's initiative
and expense, if Licensee agrees to include 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. 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 request that Licensor's other
licensee make such application, at Licensee's initiative and expense, if
Licensee 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, or Licensee may
request that Licensor make such application, in which case the procedure
set forth in subsections (ii) and (iii) above shall be followed, but
Licensee shall pay the reasonable expenses of Licensor and Licensor's
other licensee with respect to the obtaining of opinion or advice by
Qualified Counsel with respect thereto. Any determination or evaluation to
be made concerning the substance of the opinion or advice of Qualified
Counsel by either Licensor or Licensor's other licensee, respectively,
including the assessment of the likelihood of any risk or required
treatment under the local law of any relevant jurisdiction, shall be made
by Licensor or Licensor's other licensee in their respective sole
discretion and shall not be subject to formal challenge by Licensee.
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 possible without violating
any applicable privilege, of the substantive conclusion of any opinion of
counsel received by Licensor with respect thereto. 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
purposes 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,
14
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, Licensee
shall not, and shall cause Licensee's Affiliates and Licensee's
Sublicensees not to, apply to register or otherwise acquire in its own
name in any jurisdiction any trademark based upon, derived or translated
from, identical or confusingly similar to any Food Trademark or Program
Information Trademark for use in relation to any food and beverage
products.
(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 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)
15
brought by Licensee 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 Licensee to bring such
action on its behalf. Licensee will pay its own costs and will pay the
out-of-pocket costs of Licensor in connection with any action taken in
respect to this Section. The party bringing or defending proceedings
against a third party will have the benefit or burden of any settlement,
recovery, award, loss or expense resulting from such proceeding.
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 by Licensee and of the marketing and sales of services
and products by Licensor's other licensee (whether actual or potential)
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 and Licensor's other 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
16
manufacture, packaging, distribution, selling, handling, consumption or
marketing of Licensed Products; (ii) the 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 and pursuant to a license
granted by Licensor; (ii) use of Food Trademarks, Program Information and
Program Information Improvements by Licensor's other licensee, its
Affiliates and Sublicensees 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.
(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.
17
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 (a)
was publicly available at the time of the disclosure to the receiving
party; (b) subsequently becomes publicly available through no fault of the
receiving party; (c) 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; (d) is independently known by the receiving party
whether prior to or during the term of this Agreement; or (e) 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
18
Trademarks or the Program Information without the consent of Licensee and
Licensor's other 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.
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:
H. J. Heinz Company
600 Grant Street
Pittsburgh, PA 15230
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
19
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.
(b) If any provision hereof is held to be invalid or
unenforceable by any court of competent jurisdiction or any other
authority vested with jurisdiction, such holding shall not affect the
validity or enforceability of any other provision hereto.
(c) The section order and headings are for convenience only
and shall not be deemed to affect in any way the language, obligations or
the provisions to which they refer.
(d) The parties will not be deemed to have a relationship of
joint venturer, partner or employer/employee with the other. Neither party
shall have the right to incur any obligation on behalf of the other or
have any interest in the profit or liabilities of the other.
(e) This Agreement, including this provision of this
Agreement, may be amended or modified only in writing and when executed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
WW FOODS, LLC
By:__________________________________
Name:
Title:
H. J. HEINZ COMPANY
By:__________________________________
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Name:
Title: