EXHIBIT 10 A
AGREEMENT
AGREEMENT, dated the 11th day of July, 1997 between Nabisco
Brands Company, a Delaware corporation having a place of business at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
("Nabisco" or "Licensor") and Lincoln Snacks Company, a Delaware
corporation having a principal place of business at 0 Xxxx Xxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Licensee").
Recitals
WHEREAS, Nabisco is the owner of the trademarks Planters, Mr.
Peanut and the Representation of Mr. Peanut, together with
associated logos, trade dress, packaging appearance and claims to
copyrights associated therewith (hereinafter referred to as the
"IP") in the United States, its territories and possessions and in
the Commonwealth of Puerto Rico;
WHEREAS, Licensee desires the right to use the IP on and in
connection with the manufacture, distribution, advertising and sale
of its Fiddle Faddle branded snack food products and Nabisco is
willing to grant permission to do so, on the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
promises and agreements herein set forth, Nabisco and Licensee
hereby agree as follows:
Definitions
In this Agreement, the following terms have the indicated
meaning.
The "Term" of this Agreement is for an initial period of five
(5) years commencing January 1, 1998. Nabisco and Licensee may in
their unfettered discretion mutually agree to additional five year
periods at least one hundred eighty (180) days prior to the time
when the initial five year period (or extended period, as the case
may be) would otherwise expire.
"IP" means the trademarks Planters, Mr. Peanut and the
Representation of Mr. Peanut, together with associated logos, trade
dress, packaging appearance and claims to copyrights associated
therewith.
"Territory" means the United States, its territories and
possessions and the Commonwealth of Puerto Rico.
"Products" means ready-to-eat caramelized popcorn product, with
or without nuts, sold in the Territory under Licensee's Fiddle
Faddle trademark, including the products identified in Exhibit 1
hereto and any new flavor developed by Licensee and approved by
Nabisco in the manner set forth herein, said approval not to be
unreasonably withheld or delayed.
"Distribution Channels" means all channels of trade.
The "First License Year" shall mean the period from January 1,
1998 to December 31, 1998. The "Nth License Year" (N greater than
one) means the twelve (12) month period measured from January 1,
1999 or the respective (N-1) anniversary thereof.
"Associated Materials" means the labeling, packaging,
advertising and promotional materials, including retail store signs
and displays and other point of sale material, advertising and
promotional copy and strategy, television commercials and all other
written material intended to be distributed to the trade or public
on which the IP appears or is intended to be used.
The "Lincoln Operating Procedures" means the formulae,
specifications, good manufacturing practices, plant quality control
procedures, product recall and withdrawal procedures, consumer and
manufacturing complaint procedures, audit and inspection procedures,
sanitary/environmental and pest control procedures, ingredient
specifications, finished product specifications and shelf life of
the Products contained in the Standard Operating Procedures Manual
and the QA Procedures Manual as currently used by Licensee and
previously approved by Licensor, as the same may from time to time
be amended with Licensor's written approval.
"Net Sales" means the gross sales of Product less cash
discounts and returns.
"Equivalent Cases" means an aggregate of sixty (60) ounces of
Fiddle Faddle (e.g., twelve (12) packages of five (5) ounces each),
and an aggregate of fifty-one (51) ounces of Fat Free Fiddle Faddle;
provided, however, that a "bonus" pack consisting of twelve (12)
packages of six (6) ounces each (or seventy two (72) ounces in the
aggregate) shall be deemed to be one Equivalent Case.
1. License Grant
a. Subject to the terms and conditions hereof, for the Term
of this Agreement, Nabisco hereby grants to Licensee an
exclusive license to use the IP in connection with the
production, packaging, promotion, sale and exploitation of
the Products in the Distribution Channels in the
Territory, subject to the provisions of Paragraph 5 below,
so long as Licensee produces the Products substantially in
accordance with the provisions of the Lincoln Operating
Procedures and so long as the Products are manufactured
only at the Licensee's manufacturing facility in Lincoln,
Nebraska, or such other plant as Licensor shall approve in
writing, such approval not to be unreasonably withheld or
delayed (collectively, the "Plants"; "Plant" means any one
of the Plants). In the event the Plants are not operated
by Licensee, Licensee shall ensure that the Plants are
contractually obligated to comply with the quality control
provisions for the Products set forth in this Agreement
and in the Lincoln Operating Procedures, provided,
however, that Licensee shall remain fully and primarily
liable to Licensor under this Agreement for the
performance of any and all Plants.
b. Licensee shall have no right to the IP or to make, use or
sell any goods utilizing the IP, or otherwise to deal in
or with the IP, other than as expressly granted in this
Agreement. Licensee shall have no right to make, use or
sell any goods utilizing any reproduction, counterfeit,
copy or colorable imitation of the IP, or otherwise deal
in or with such IP.
c. Licensee shall be responsible for manufacturing the
Products and all costs associated therewith shall be paid
by Licensee.
d. Nothing in this Agreement shall be construed to prevent
Nabisco from granting any other license or right to make,
use or sell goods bearing the IP, or from utilizing the IP
in any manner whatsoever, other than for caramelized
ready-to-eat popcorn products with or without nuts.
2. Quality Control
a. Licensee shall comply in all material respects with the
practices, procedures, specifications and quality programs
contained in the current Lincoln Operating Procedures, a
copy of which shall be provided to Nabisco upon execution
of this Agreement and incorporated herein by reference.
No alterations, modifications or other changes to the
Products or the Lincoln Operating Procedures shall be made
without the approval of Licensor, not to be unreasonably
withheld or delayed; provided, however, Licensee may
change the packaging sizes by written notice to Licensor
and without the consent of Licensor. Upon approval by
Nabisco, the Lincoln Operating Procedures and any
alterations, modifications or other changes shall be
deemed incorporated into this Agreement. Licensee shall
provide Nabisco on an annual basis an updated version of
the Lincoln Operating Procedures signed by the appropriate
Licensee official. If no changes are made to the Lincoln
Operating Procedures in any particular year during the
Term, then Licensee shall provide Nabisco with a signed
statement to that effect.
b. Licensee agrees to manufacture Product only at the Plant.
Licensee shall ensure that all Plants and equipment used
to manufacture, store, and distribute the Products are
maintained in a clean and sanitary manner, in good working
order, and comply in all material aspects with all local,
state and federal laws, ordinances, rules and regulations
now or hereafter in effect pertaining to the operation of
the Plants or the production of the Products, including,
but not limited to, FDA's Good Manufacturing Practice
Regulations set forth at 21 C.F.R. Part 110.
c. Licensee shall comply in all material respects with the
methods of testing raw materials, ingredients and
packaging materials, and finished Products in accordance
with local, state and federal standards and in accordance
in all material respects with the Lincoln Operating
Procedures. Licensee shall conduct, at its own expense,
certain tests on the Products including microbiological
analyses and organoleptic testing pursuant to the quality
standards set forth in the Lincoln Operating Procedures
and which test results shall, upon request, be delivered
to Nabisco; provided, however, Licensee shall immediately
advise Nabisco of results that indicate material
noncompliance with the Lincoln Operating Procedures or
material noncompliance with applicable local, state or
federal laws, ordinances, rules or regulations and upon
instruction of Nabisco correct such defects within 10
business days.
d. Licensee acknowledges and agrees that, solely for the
purpose of ensuring compliance in all material respects
with the Lincoln Operating Procedures, applicable law, and
licensee's compliance with the terms of this Agreement,
Nabisco may inspect, or cause to be inspected, on
reasonable notice and during normal business hours, the
Plants and any other Product manufacturing, warehouse or
distribution facility, ingredients and raw materials,
finished and in-process Products, and may audit, or cause
be audited, Licensee's quality control and sanitation
programs and/or the quality control and sanitation
programs of the Plant, or other Product manufacturing,
warehouse or distribution facility. After each inspection
and audit, Nabisco will submit reports to Licensee,
instructing corrective action if the facility, program or
condition that does not comply in any material respect
with the Lincoln Operating Procedures or fails to comply
in any material respect with applicable local, state or
federal laws, ordinances, rules or regulations. Licensee
agrees to implement any necessary corrective action within
thirty (30) days of notice, or if the defect is such that
it cannot be remedied within thirty (30) days, Licensee
shall commence taking all reasonable and appropriate steps
to remedy the defect within such thirty (30) day period
and shall proceed thereafter with due diligence and good
faith to complete the curing as soon as possible;
provided, however, Licensee shall immediately suspend
utilizing a Plant and/or other facility in which the
Products are manufactured, warehoused, distributed, stored
or sold, when in Nabisco's reasonable judgment, a defect
or condition is found that causes or may cause a health or
safety risk if such defect or condition rises to the level
of a Class I or Class II recall. Licensee shall, for as
long as the health or safety risk is present, refrain from
utilizing the affected Plant and/or facility for the
Products. If Licensee continues to utilize the affected
Plant or facility, Nabisco shall have the right to
immediately terminate or suspend this Agreement as to the
affected Plant or facility and the Product(s)
manufactured, warehoused, distributed, stored or sold
therein. Should this Agreement be so terminated or
suspended as a result of a breach of this paragraph 2.d.,
Licensee shall have no cause of action against Nabisco in
connection with such termination or suspension, including
but not limited to any claim for damages or compensation
for losses or expenses incurred, or for lost profits.
Licensee agrees to incorporate provisions consistent
herewith into any agreement with the Plants and any third
parties whom Licensee may employ to manufacture,
warehouse, distribute or store any item of the Product.
When so warranted under the provisions of 21 C.F.R.
Section 7.3, Licensee acknowledges its obligations to
recall, at its sole cost and expense, if so instructed by
Nabisco or requested by any applicable governmental agency
or regulatory body, any Products manufactured by it and
present at any level of trade, including, but not limited
to, warehouse, wholesale or retail levels, should such
Products fail to comply in a material respect with the
Lincoln Operating Procedures or be subject to market
withdrawal or recall pursuant to standards, laws,
ordinances, rules or regulations of any applicable
governmental agency or regulatory body.
e. Licensor has the unqualified right to withdraw its
approval of any Products in the event that their quality
ceases to materially conform with the specifications set
forth in the Lincoln Operating Procedures. Licensor has
the unqualified right to withdraw its approval of any
Associated Materials in the event that their quality
ceases to materially conform with Nabisco's standards for
quality and for intellectual property protection.
f. Nabisco shall have the right to receive from Licensee,
upon request, at Nabisco's cost and expense, a reasonable
quantity of samples of Products and Associated Materials.
g. Approval by Licensor of any Product, including any prior
approval by Licensor, shall not be construed to mean that
Licensor has determined that said Product complies with
the applicable laws, regulations, ordinances or other
applicable standards, such determination being the sole
responsibility of Licensee.
3. Purchase of Ingredients
a. This Paragraph is independent of any other Paragraph of
this Agreement.
b. Licensee shall be responsible, directly or through its
contract manufacturers, for the purchase of all
flavorings, other ingredients, packaging and other
Associated Materials for the Products in accordance with
the Lincoln Operating Procedures. In no event shall
Nabisco be responsible, financially or otherwise, for such
purchases.
c. Licensee is not required to purchase ingredients,
including nuts, from Nabisco for use in the Products.
However, Licensee shall ensure that all ingredients,
including nuts, it uses in the manufacture of the Products
comply with the relevant quality standards currently in
place for the existing Products, as set forth in the
Lincoln Operating Procedures, with any changes in said
standards being subject to Nabisco's approval in
accordance with Paragraph 2.a.
4. Pure Food Guarantee, Compliance With Laws and Indemnification
a. Licensee guarantees that the Products produced by it shall
not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act, as from time to time
amended, and regulations promulgated thereunder, and are
not articles which, under the provisions of Sections 404
or 505 of said federal act, may not be introduced into
interstate commerce, and are not in violation of the
provisions of the Food Additives Amendment of 1958. This
guarantee is in like terms extended and shall be
applicable to any applicable state law or municipal
ordinance in which the definitions of adulteration or
misbranding are substantially the same as those in said
federal act.
b. Licensee warrants that the Products shall be manufactured,
sold and distributed in material compliance with all
applicable federal, state and local laws, rules and
regulations. The sale and distribution by Licensee of the
Products shall be consistent with past practice in that it
did not, and will not, in any manner reflect adversely
upon the good name of Nabisco or any of its programs,
products or properties, or the IP.
5. Marketing and Advertising
a. Subject to compliance with the requirements of paragraph
5.c., Licensor hereby approves the Associated Materials as
currently used by Planters and Licensee and hereby agrees
that any non-material changes to such Associated Material
shall not require the consent of Licensor. Licensee shall
submit to Xxxxxxxx Xxxxxxxxx, Nabisco Brands Company,
Suite 2740, Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, for prior and prompt approval, which shall not be
unreasonably withheld, (i) any material changes to
Associated Materials currently used by Licensee, and (ii)
any new associated materials. If Licensor requests
material changes, Licensee shall amend or cause to be
amended the Associated Materials to the reasonable
satisfaction of Nabisco in the manner that Nabisco shall
direct. Nabisco also reserves the right to change
unilaterally any aspect of the IP that is the subject of
this Agreement (e.g., the trade dress for planters).
Should this occur, Nabisco may, at its discretion, notify
Licensee of any changes at least six (6) months prior to
effecting any such changes, if reasonably possible. In
such event, Licensee shall have the right to utilize its
existing inventory of Associated Materials during such six
(6) month period, and shall have six (6) months in which
to make the necessary modifications to the IP on its
Associated Materials, with any material changes required
by Licensor being subject to the approval procedure set
forth in this Paragraph 5.a.
b. Licensee shall advise Nabisco, upon request, with respect
to the compliance of the Associated Materials with all
applicable federal, state and local laws or regulations,
including, but not limited, to labeling laws and
regulations, in the jurisdiction(s) in which the Products
will be manufactured, distributed, stored and/or sold. In
the event any Associated Materials fail to comply with
any applicable labeling law or regulation, Licensee
undertakes to hold Nabisco harmless from any and all
damages it may suffer as a result of failure to comply
with such laws and regulations. Approval by Licensor of
any material changes to the Associated Materials in
accordance with the procedure set forth in Paragraph 5.a.
shall not be construed to mean that Licensor has
determined that said changes to the Associated Materials
comply with the applicable laws, regulations, ordinances
or other relevant standards.
c. Licensee shall imprint or cause to be imprinted legibly on
all Associated Materials wherein the IP or related
copyrighted work may appear, an appropriate trademark
notice consisting of either the " Trademark " designation
or the " Registered Trademark " federal registration
designation and a copyright notice as directed by Nabisco.
In addition to and without detracting from the foregoing, a
marking legend shall be used in association with the Products
along the lines of the following: "Planters, Mr. Peanut and
the Rep. of Mr. Peanut are registered trademarks of Nabisco Brands
Company, used under license. Distributed by the authority
of Lincoln Snacks. Please address consumer inquiries to:
Lincoln Snacks Company
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Customer Service
d. Except as set forth herein, Licensee shall, at its sole
cost and expense, handle all consumer complaints relative
to the Products and shall respond to all such complaints
in an appropriate manner. Notwithstanding the foregoing,
Licensee shall immediately forward to Nabisco all consumer
complaints about the Products which may materially and
adversely affect the reputation or business of Nabisco or
the IP. Nabisco and Licensee shall confer, where
necessary, as to how to respond to such consumer
complaints. For the First License Year, Licensee shall
forward quarterly summaries of all consumer complaints
about the Products to Nabisco. Thereafter, Licensee shall
forward quarterly summaries of all consumer complaints
upon written request of Nabisco. Nabisco shall have the
right to respond to all such material consumer complaints
or inquiries concerning the Products. Such complaints
shall be directed to:
Xx. Xxx Xxxxxx
Director of R&D/QA
Planters Company
000 XxXxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
(000) 000-0000
or such other person as Nabisco shall designate from time
to time in writing.
6. Goodwill
Licensee recognizes the great value of the goodwill
associated with the IP and acknowledges that the IP and all
rights therein and goodwill pertaining thereto belong
exclusively to Nabisco, and that the IP has and will continue
to have a secondary meaning in the mind of the public to
signify Nabisco. Accordingly, Licensee shall not do or permit
to be done any act or thing or permit any Products to enter the
stream of commerce or be sold or distributed that may
materially impair the goodwill or other rights of Nabisco in
the IP or that would otherwise materially prejudice, tarnish
or damage the reputation of the IP, Nabisco, or the sale of
Nabisco's products.
7. Title and Protection
a. Licensee acknowledges Nabisco's title to the IP and agrees
that it shall not at any time knowingly do or suffer to be
done any act or thing or undertake any action anywhere
that in any manner might infringe or impair the validity,
scope, or title of Nabisco in the IP, or in any other
intellectual property which may be owned by Nabisco at any
time during the Term hereof. It is understood that
Licensee or any affiliate of Licensee shall not acquire
and shall not claim any title to the IP adverse to Nabisco
by virtue of this Agreement, the parties intending that
all utilization of the IP by Licensee shall at all times
inure to the exclusive benefit of Nabisco.
b. Nabisco acknowledges Licensee's title to the Lincoln IP
(as defined in paragraph 7.f.) and agrees that it shall
not at any time knowingly do or suffer to be done any act
or thing or undertake any action anywhere that in any
manner might infringe or impair the validity, scope or
title of Licensee in the Lincoln IP, or in any other
intellectual property which may be owned by Licensee at
any time during the Term hereof. It is understood that
Nabisco or any affiliate of Nabisco shall not acquire and
shall not claim any title to the Lincoln IP adverse to
Licensee by virtue of this Agreement, the parties
intending that all utilization of the Lincoln IP by
Nabisco shall at all times inure to the exclusive benefit
of Licensee.
c. Licensee agrees that it will not use the name of Nabisco
or any reproduction, counterfeit, copy or colorable
imitation thereof, as a trading designation or in any
other way, except to indicate, in the manner set forth in
Paragraph 5.c. above, that Licensee is authorized by
Nabisco to use the IP in respect of the Products.
d. Nabisco agrees that it will not use the name of Licensee
or any reproduction, counterfeit, copy or colorable
imitation thereof, as a trading designation or in any
other way.
e. Licensee shall notify Nabisco in writing of any
infringement and any reproduction, counterfeit, copy or
colorable imitation by others of the IP that may come to
Licensee's attention, and Nabisco shall have the sole and
exclusive right to determine whether or not any action
shall be taken on account of any such infringement,
reproduction, counterfeit, copy or imitation. Nabisco
shall control any and all infringement and unfair
competition actions and it shall have the sole and
exclusive right to commence or prosecute any claims or
suits with respect to the IP in its own name or jointly in
the name of Nabisco and Licensee at Nabisco's expense.
f. Nabisco shall notify Licensee in writing of any
infringement and any reproduction, counterfeit, copy or
colorable imitation by others of the Fiddle Faddle
trademark, together with the associated logos, trade
dress, packaging appearance and claims to copyrights
associated therewith ("Lincoln IP") that may come to
Nabisco's attention, and Licensee shall have the sole and
exclusive right to determine whether or not any action
shall be taken on account of any such infringement,
reproduction, counterfeit, copy or imitation. Licensee
shall control any and all infringement and unfair
competition actions and its shall have the sole and
exclusive right to commence or prosecute any claims or
suits with respect to the Lincoln IP in its own name or
jointly in the name of Licensee and Nabisco at Licensee's
expense.
8. Indemnifications
a. Except as otherwise provided in Paragraph 8.c. below,
Licensee hereby agrees to indemnify and hold harmless
Nabisco and its parent and affiliated companies and each
of their respective agents, officers, directors, and
employees from any and all claims, losses, demands,
damages, judgments, costs and expenses, including
reasonable attorneys' fees, that may be claimed, asserted
or rendered against Nabisco or any or all of the above
mentioned persons or their successors, arising from: (i)
any actual or alleged injury, damage, death or other
occurrence to any person or property arising or resulting
directly or indirectly out of the distribution and sale,
or the possession, use or consumption of the Products
manufactured, sold or supplied by Licensee at any time;
(ii) any actual or alleged patent, copyright or, subject
to Paragraph 8.c. below, trademark infringement or
dilution, false advertising, unfair competition or trade
secret violation, arising from the formulation,
manufacture, packaging, distribution, promotion,
exploitation or sale of the Products; or (iii) the failure
of Licensee to fulfill any of its obligations under this
Agreement. Any consents, approvals, inspections, reviews
or similar actions undertaken or not undertaken by Nabisco
or its agents under this Agreement shall not waive, reduce
or otherwise affect or diminish any rights of Nabisco or
any of the above mentioned parties or their successors to
indemnification under this Agreement.
b. Except as may be provided in Paragraph 8.c. below, Nabisco
and its parent and affiliated companies, and each of their
respective agents, officers, directors, and employees or
their successors will not be responsible, in any way, to
any party whatsoever, with respect to any warranties,
negligence, defects, or other obligations, however any of
the foregoing might arise, with respect to the
formulation, manufacture, packaging, distribution,
promotion, exploitation, or sale of the Products.
Licensee and its parent and affiliated companies, and each
of their respective agents, officers, directors, and
employees or their successors will not be responsible, in
any way, to any party whatsoever, with respect to any
warranties, negligence, defects, or other obligations,
however any of the foregoing might arise, with respect to
the formulations, manufacture, packaging, distribution,
promotion, exploitation, or sale of any of Nabisco's
products, except the Products.
c. Nabisco hereby agrees to indemnify and hold harmless
Licensee and its parent and affiliated companies and each
of their respective agents, officers, directors, and
employees from any and all claims, losses, demands,
damages, judgments, costs and expenses, including
reasonable attorneys' fees, that may be claimed or
asserted or rendered against Licensee, or any or all of
the above mentioned persons or their successors arising
from: (i) any actual or alleged injury, damage, death or
other occurrence to any person or property arising or
resulting, directly or indirectly, out of the distribution
and sale, or the possession, use or consumption of any of
Nabisco's products manufactured, sold or supplied by
Nabisco during the Term; or (ii) any actual or alleged
copyright, trademark infringement, false advertising or
unfair competition arising out of the use of the IP in the
Territory by Licensee pursuant to this Agreement. Nabisco
reserves the right to defend itself against any said
trademark infringement suit and Licensee shall assist
Nabisco in the defense of any such suit as Nabisco may
reasonably request.
d. In the event of any claim, action or proceeding for which
a person is entitled to indemnity hereunder, the person
seeking indemnity (the "Claimant") shall promptly notify
the other party (the "Indemnitor") of such matter in
writing. The Indemnitor shall then promptly assume
primary responsibility for and shall have primary control
of such matter, including settlement negotiations and the
institution and defense of any legal proceedings, provided
the Claimant shall retain the right to be represented, at
its expense, by separate counsel. The Claimant shall have
the right to approve or disapprove any proposed
settlement, provided that in the event Claimant
disapproves a proposed settlement, the Claimant shall
promptly assume responsibility for and control of such
matter and the Indemnitor shall thereafter have no further
obligation or liability for indemnification with regard to
such matter. Subject to the foregoing, the Claimant shall
otherwise fully cooperate at the Indemnitor's expense in
the Indemnitor's handling and defense of any such claims,
action or proceeding.
e. In the event of a challenge or protest by the Federal
Trade Commission, the Food and Drug Administration, any
state attorney general or any other regulatory body
alleging false or misleading advertising and/or labeling
provisions and/or adulterated or misbranded product, the
Claimant shall (to the extent permitted by law or such
governmental agency) have the right to participate in any
settlement proceedings related thereto and to be consulted
by the Indemnitor regarding such settlement, and the
Indemnitor shall not, without the prior consent (not to be
unreasonably withheld or delayed) of the Claimant: (i)
settle or compromise any such challenge or protest or (ii)
(unless required by law) release to the public any
settlement or other statement of the terms under which
such challenge or protest has been settled or compromised.
f. Licensee shall have no claim or cause of action against
Nabisco, including, but not limited to, any claim for
damages or compensation for losses or expenses incurred,
including attorneys' fees, or for lost profits, arising in
any fashion from the lawful and proper termination of this
Agreement.
9. Insurance
a. Licensee shall obtain, and at its own cost and expense,
Ten Million Dollars ($10,000,000) umbrella comprehensive
general liability insurance, including product liability
coverage, and One Million Dollars ($1,000,000)
advertiser's liability coverage, protecting Nabisco and
its parent and affiliated companies against any claim or
suits arising in any fashion from the consumption,
manufacture, distribution, advertising, promotion or sale
of the Products. Licensee shall submit to Nabisco
certificates of insurance with a thirty (30) day prior
written notice of cancellation provision, with "RJR
Nabisco, Inc., its subsidiaries, and affiliated companies
and each of their respective officers, directors, agents
and employees" named as additional insured parties, as
evidence of such insurance coverage. At least 30 days
prior to the commencement of the Term of this Agreement,
Licensee shall submit to Nabisco a binder as evidence of
insurance coverage set forth above with certificates of
insurance subsequently submitted to Nabisco within thirty
(30) days thereafter. Licensee shall keep policies in
force during the Term of this Agreement and for at least
one year thereafter, and submit to Nabisco evidence of
renewal prior to the expiration of the original term of
insurance and each renewal term thereafter.
b. It is understood and agreed that if Licensee fails to
obtain or maintain in force for a period of 30 consecutive
days such comprehensive general liability insurance and
advertiser's liability coverage, pursuant to the
requirements of Paragraph 9.a. above, Nabisco shall have
the right to terminate this Agreement should the defect
not be remedied within five (5) business days following
receipt of notice by Licensee. Should this Agreement be
so terminated, Licensee shall have no cause of action
against Nabisco or its parent or affiliated companies in
connection with such termination, including, but not
limited to, any claim for damages or compensation for
losses or expenses incurred, or for lost profits.
10. Royalties and Payments
a. The parties hereby agree on the following royalty rates:
(i) Nabisco hereby grants Licensee a royalty free license
for use of the IP on the Products in the Distribution
Channels in the Territory for the First and Second
License Year;
(ii) In the Third through Fifth License Years, Licensee
shall pay Nabisco a royalty in each such License Year
of (i) one percent (1%) of annual Net Sales of
Products in the Distribution Channels in the
Territory with respect to sales of up to 2,250,000
Equivalent Cases of Product in any such License Year;
and (ii) two percent (2%) of annual Net Sales of
Products in the Distribution Channels in the
Territory with respect to sales in excess of
2,250,000 Equivalent Cases of Product in any such
License Year.
b. Licensee shall provide Nabisco, within forty-five (45)
days after the end of each calendar quarter, during the
Third through Fifth License Years, whether or not any
royalties are due, a complete and accurate statement of
its Net Sales of Products for that quarter substantially
in the form set forth in Exhibit 2, which statement shall
be accompanied by any payment due.
11. Reports and Records
a. Licensee shall keep at its principal place of business
accurate and complete records of all matters pertaining to
its obligations under this Agreement. Nabisco, or its
authorized representative, shall have the right to audit
said records (upon thirty (30) days written notice, during
normal business hours) solely for the purpose of
determining the accuracy of any royalty statement
delivered to Licensor.
b. Licensee shall maintain records to verify accuracy of the
computation of royalty payments for a period of one (1)
year after such payments. Nabisco, or its authorized
representative, shall have the right to audit said records
for the period of one (1) year after such payments. This
Paragraph 11.b. shall survive the termination of this
Agreement.
c. In the event the audit discloses a discrepancy between
royalties due Nabisco and royalties actually paid to
Nabisco of greater than ten percent (10%), Licensee shall
pay Nabisco's audit costs under this Paragraph and the
balance due on the earned royalties, together with
interest thereon calculated from the date such deficiency
was due at an annual rate based on the then current three
month LIBOR Rate plus twelve point five (12.5) basis
points.
12. Term and Termination
a. Term. The Term shall commence as of January 1, 1998 and
shall continue for a period of five years thereafter,
unless sooner terminated or extended as set forth herein
below.
b. Termination in Event of Default, With Right to Cure. If
any of the following defaults shall have happened:
(i) If Licensee fails to make any required payment or
submit the required royalty report for a period
beyond thirty (30) days from the date such payment or
report was due, or fails to pay with interest any
amount due within three (3) business days after
notice of default; or
(ii) If Licensee fails to have affixed on any Product the
notice required by Section 5.c. hereof or as required
by applicable law or regulation, or utilizes any
Associated Materials not approved by Nabisco, where
required, in accordance with the procedure set forth
in Section 5.a.; or
(iii) In the event one or more of the following events
shall occur, which event or events do not rise
to the level of a Class I or Class II recall (as
set forth in Paragraph 12.c. herein): (A) food
pathogens are found in a Product or a Product is
otherwise adulterated; (B) Licensee has
materially deviated from the Lincoln Operating
Procedures, without obtaining the prior approval
of Licensor in accordance with the procedure set
forth in Paragraph 2.a.; or (C) Licensee has
materially altered the taste, texture, nature or
in other respects the quality of a Product
without Nabisco's prior written consent given
pursuant to Paragraph 2 above; or
(iv) If Licensee commits a material breach of this
Agreement, or defaults with respect to a material
obligation under this Agreement or otherwise fails to
perform a material obligation (other than a breach,
default or failure that rises to the level of a Class
I or Class II recall, as set forth in Paragraph 12.c.
herein), which breach, default or failure, in the
judgment of Nabisco (exercised reasonably and in good
faith), as an isolated event or a series of events in
the aggregate, has caused or resulted in:
A. material damage to the reputation or goodwill of
Nabisco; or
B. material adverse publicity to Nabisco, the IP
and/or Nabisco's marks, or material adverse
publicity to Licensee which has a material
adverse affect on Nabisco, the IP and/or
Nabisco's marks; or
C. Product that is likely to cause severe adverse
health consequences or is adulterated or
misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act has been distributed
by Licensee which in the judgment of Nabisco
(exercised reasonably and in good faith) has
resulted in material damage to the reputation or
goodwill of Nabisco or material adverse
publicity to Nabisco, the IP and/or Nabisco's
trademarks, or material adverse publicity to
Licensee which has a material adverse affect on
Nabisco, the IP and/or Nabisco's trademarks; or
(v) If Licensee otherwise defaults in the performance of
any of the other terms, conditions or provisions of
this Agreement (other than a default that rises to
the level of a Class I or Class II recall, as set
forth in Paragraph 12.c. herein) in such a manner as
to materially and adversely affect the rights of
Nabisco hereunder or the validity or enforceability
of a IP;
then in all the foregoing circumstances, Licensor may, if
it so elects, terminate this Agreement upon thirty (30)
days prior written notice; provided, however, that none of
the circumstances set forth in Paragraph 12.b. above shall
constitute a breach (with the remedy of the exercise of
the right of termination being available to Licensor) if
any such breach or default is remedied within thirty (30)
days after written notice thereof from Licensor, or if
such breach or default is of a nature that cannot be
remedied within thirty (30) days, Licensor shall have
commenced curing such breach or default within thirty (30)
days after written notice thereof from Licensor and shall
proceed thereafter with due diligence and good faith to
complete the curing as soon as possible.
c. Termination Under Extraordinary Circumstances By Nabisco
Without Right to Cure. Notwithstanding anything in this
Agreement to the contrary, Nabisco shall have the right,
in its sole discretion, to terminate this Agreement
immediately and without Licensee's right to cure, upon
notice to Licensee, if any of the following events occur:
(i) In the event of a breach, failure or default of this
Agreement, which breach, failure or default, in the
judgment of Nabisco, as an isolated event or a series
of events in the aggregate, has caused or resulted
in: Product has been distributed that qualifies as
(a) a Class I recall of the Product or (b) a Class II
recall of the Product (Class I and Class II shall
have the meanings set forth in 21 C.F.R. Section
7.3); or
(ii) If Licensee fails to obtain or maintain insurance
coverage, pursuant to the requirements of Paragraph
9; or
(iii) In the event of an actual or attempted
assignment or sublicense hereof by Licensee, or
in the event Licensee delegates its duties
hereunder or subcontracts a substantial portion
of the manufacture of any Product without
Nabisco's prior written consent in each
instance, or
(iv) Licensee commits multiple breaches previously cured
under Section 12.b., or
(v) Licensee enters into a licensing agreement in
violation of Paragraph 21.
d. Termination in the event of Bankruptcy. If Licensee files
a voluntary petition of bankruptcy, (ii) an order for
relief under the Bankruptcy Code or other insolvency law
is entered against Licensee which order is not vacated
within 20 days, (iii) Licensee is adjudicated as bankrupt,
(iv) a petition in bankruptcy is filed against Licensee
which petition is not dismissed within 90 days from the
filing thereof, (v) Licensee become insolvent or makes an
assignment for the benefit of its creditors or an
arrangement pursuant to any bankruptcy or insolvency law,
or (vi) if a receiver is appointed for it or its business,
the license hereby granted shall automatically terminate
forthwith without any notice whatsoever being necessary.
Should this Agreement be so terminated, Licensee, its
administrator, successors, or assigns shall have no right
to sell, exploit or in any way deal with or in any
Products covered by this agreement or any written or
printed or tangible matter bearing the IP, except with and
under the special consent and instructions in writing of
Nabisco.
e. Termination for Failure to Use IP. If at any time after
the end of the Second License Year of this Agreement
Licensee introduces Products in the Territory without the
IP, fails to introduce Products in the Territory bearing
the IP, or ceases to sell Products in the Territory
bearing the IP, Nabisco may: (i) terminate the license
hereby granted; or (ii) amend the license grant to a
non-exclusive license; which options may be exercised, in
Nabisco's sole discretion and at its option, by giving
written notice to Licensee. Such notice shall be
effective when mailed, without any period for cure.
f. Termination by Licensee. Licensee shall at all times have
the right to terminate this Agreement upon 30 day prior
written notice.
13. Inventory Upon Termination
a. Ten (10) days after a notice of termination is given or
the happening of an event that automatically terminates
this Agreement where no notice is required, Licensee shall
furnish to Nabisco a statement certified by the president
or chief financial officer of Licensee to be true and
correct showing the number and description of Products on
hand, held for Licensee in inventory or otherwise, or in
process.
b. After expiration of the Term or earlier termination of
this Agreement, except as otherwise provided in this
Agreement and except in the event of termination pursuant
to Paragraph 2.d. or 9.b. or subparagraph (iii), (iv) or
(v) of Paragraph 12.b. or Paragraph 12.c., Licensee shall
have the right to deplete existing inventories of Products
bearing the IP for a period not to exceed six (6) months
following the date of expiration or termination; provided,
however, that Licensee acknowledges that the use of the IP
during this 6-month period is non-exclusive. Further,
during this 6-month period, Licensee shall to the best of
its ability remove Product beyond its shelf life from
store shelves and shall fully perform all its obligations
required under this Agreement as if it had not expired or
terminated. Within thirty (30) days of the expiration of
this six month period, Licensee shall offer to sell to
Nabisco its remaining inventory of Products, finished and
in-process, and any packaging therefor together with its
inventory of Associated Materials at Licensee's cost.
Nabisco shall have thirty (30) days to accept the offer to
sell this inventory. If Nabisco does not accept the
offer, Licensee shall have an additional three (3) months
from the date of Nabisco's notice that it does not intend
to purchase such inventory in which to deplete any
remaining inventory of Products. Thereafter the inventory
shall be destroyed at Licensee's expense and a sworn
certificate of destruction shall be furnished by Licensee
to Nabisco in a form acceptable to Nabisco and executed by
the chief operating officer or chief financial officer of
Licensee.
14. Effect of Termination
a. Upon termination of this Agreement, all rights granted to
Licensee hereunder shall forthwith revert to Nabisco, and
Licensee shall stop all further use of the IP or any
further reference to them, direct or indirect, or any
reproduction, counterfeit, copy or colorable imitation
thereof, in connection with the manufacture, sale or
distribution of Licensee's goods or other items of
tangible or intangible property except as provided in
Paragraph 13 above or otherwise in this Agreement.
Licensee shall not initiate any new use of the IP or any
colorable imitation thereof on its Associated Materials.
Licensee shall be permitted to use its inventories of
approved Associated Materials and to use the IP in
existence at the time of service of a notice of
termination hereunder, only for promotion or advertising
in connection with its depletion of the Products.
Licensee shall promptly execute and deliver, at Nabisco's
expense, to Nabisco or its designee any and all documents
required to transfer to Nabisco or its designee any IP
rights or equities that may be vested in Licensee as a
result of Licensee's use of the IP pursuant to this
Agreement and, if any of the foregoing are not
transferable, shall execute and file, at Nabisco's
expense, with the appropriate authorities any and all
documents required to effectuate or to evidence the
surrender by Licensee of the right to use the IP.
b. Licensee acknowledges that its manufacture, sale or
distribution of the Products, or any other goods bearing
the IP, after termination of this Agreement, except as
provided in Paragraph 13 above, shall result in immediate
and irreparable damage to which there is no remedy in law
to Nabisco and to the rights of any subsequent Licensee.
Licensee acknowledges and admits that there is no adequate
remedy of law for its failure to cease such activities and
that, in such event, Nabisco shall be entitled to
equitable relief by way of such temporary and permanent
injunctive relief as a court may deem just and proper.
c. Licensee shall not be able to claim from Nabisco any
damages or compensation for losses or expenses incurred or
for loss of profits arising in any fashion from Nabisco's
proper and lawful termination of this Agreement.
d. Licensor shall not be able to claim from Licensee any
damages or compensation for losses or expenses incurred or
for loss of profits arising in any fashion from Licensee's
proper and lawful termination of this Agreement.
e. Termination of this Agreement for any reason shall not
affect those obligations that have theretofor accrued or
that, from the context hereof, are intended to survive
termination of this Agreement.
15. Representations
a. In addition to all of the agreements, promises,
guarantees, covenants, warranties and obligations herein
contained, Licensee represents and warrants to Nabisco
that it is a corporation organized and validly existing
under the laws of the state of its incorporation with full
power and authority to execute, deliver and fully perform
the terms and conditions hereof, and that it is under no
restriction or prohibition limiting its ability or right
to execute, deliver and fully perform its obligations
hereunder.
b. In addition to all of the agreements, promises,
guarantees, covenants, warranties and obligations herein
contained, Licensor represents and warrants to Licensee
that it is a corporation organized and validly existing
under the laws of the state of its incorporation with full
power and authority to execute, deliver and fully perform
all terms and conditions hereof, and that it is under no
restriction or prohibition limiting its ability or right
to execute, deliver and fully perform its obligations
hereunder. Licensor further represents that use of the IP
by Licensee pursuant to this Agreement will not conflict
with the rights of any third parties.
16. Disclaimer of Warranties and Representations by Nabisco
Nabisco and Licensee make no warranty or representation
whatsoever, express or implied, as to the amount of gross
sales, net sales, profits or volume that Nabisco or Licensee,
as the case may be, will derive from or may expect with respect
to the sale of the Products.
17. Notices
Any notice or report sent pursuant to any provision of
this Agreement shall be sent and shall be deemed given four (4)
days after being sent by certified mail, return receipt
requested, or will be deemed given when delivered in person or
by facsimile transmission if confirmation copy is received by
overnight courier on the following day, to the following
addresses or such other addresses as shall be hereafter
notified:
If to Nabisco: Nabisco Brands Company
Xxxxx 0000
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxx
Fax: 000-000-0000
with a copy to: Planters Company
000 XxXxxxxx Xxxxxx
Xxxx Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xx Xxxxx
Fax: 000-000-0000
If to Licensee: Lincoln Snacks Company
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: R. Xxxxx Xxxx
Fax: 000-000-0000
with a copy to: Xxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Fax: 000-000-0000
18. Applicable Law
This Agreement shall be construed in accordance with the
laws of the State of Illinois applicable to contracts executed
and to be fully performed in such jurisdiction.
19. No Joint Venture
Nothing herein contained shall be construed to place the
parties in the relationship of principal and agent, partners or
joint venturers, and Licensee shall have no power to obligate
or bind Nabisco in any manner whatsoever.
20. Assignment or Sublicense
a. Neither party may assign, convey or transfer this
Agreement or any part of its rights or obligations
hereunder without the prior written consent of the other
party. Notwithstanding the foregoing, (i) Nabisco
acknowledges that Licensee is a party to a certain
Revolving Credit, Term Loan and Security Agreement dated
December 3, 1993, as amended, with the Bank of New York
Commercial Corporation ("BNYCC"), pursuant to which
Licensee has assigned its interest under this Agreement to
BNYCC as collateral security for the performance of its
obligations thereunder, and that the collateral security
interest held by BNYCC or any other successor financial
institution shall not be deemed to be an assignment of
this Agreement, (ii) Licensee may assign, convey or
transfer this Agreement in the event of a Change of
Control provided that Nabisco shall not have exercised its
right to terminate in accordance with and in the manner
set forth in Paragraph 20.b. of this Agreement, and (iii)
Nabisco may assign, convey or transfer this Agreement in
connection with a sale of all or substantially all of the
business or assets of Planters; provided, however, that
the prior written consent of Licensee shall be required to
assign this Agreement to any person who is engaged,
directly or indirectly, in the ready-to-eat caramel
popcorn business. In the event of a permitted assignment,
conveyance or transfer, the holder or holders through
assignment, transfer or conveyance of this Agreement or
the rights granted hereunder shall be bound by all of the
terms and conditions hereof applicable to its transferor.
b. Licensee shall provide prompt written notice to Nabisco in
the event of a Change of Control (as hereinafter defined).
In such event, Nabisco shall have the right, exercisable
within thirty days of the date of notice of a Change of
Control, to terminate this Agreement by written notice,
effective thirty days after the date of such notice of
termination. In the event of termination of this
Agreement as a result of a Change of Control, the
provisions of Paragraph 14 shall apply. A "Change of
Control" shall mean (i) a sale of substantially all of the
business and assets of Licensee and (ii) any transaction
or series of transactions (including, without limitation,
a tender offer, merger or consolidation) the result of
which is that any "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) other than
Xxxx Group, Inc. ("Xxxx") becomes the "beneficial owner"
(as defined in Rule 13(d)(3) under the Exchange Act) of
more than 50% of the total aggregate voting power of all
classes of the voting stock of Licensee, and/or warrants
or options to acquire such voting stock, calculated on a
fully diluted basis. Notwithstanding anything to the
contrary herein, a transfer by Xxxx of its interest in
Licensee to a "liquidating trust" will not be deemed to be
an assignment hereof.
c. Notwithstanding Paragraph 20.b., the acquisition of any
majority interest (i.e., 50% or more) of Licensee or Xxxx
by a person or entity that is a competitor of Nabisco in
the snack foods business shall be deemed an assignment for
purposes of this Paragraph 20.
d. During the term of this Agreement and any renewal period,
Licensee shall promptly provide Licensor with copies of
all Schedule 13D's and Schedule 13G's (and all amendments
thereto) filed with the Securities and Exchange Commission
relating to the beneficial ownership of Licensee's common
stock.
e. In the event Licensee assigns any benefits, rights, or
duties hereunder without Nabisco's prior written consent,
Nabisco may, at its sole discretion, terminate the
agreement. Should this agreement be so terminated,
Licensee shall have no cause of action against Nabisco in
connection with such termination, including, but not
limited to, any claim for damages or compensation for
losses or expenses incurred, or for lost profits.
21. Exclusivity
During the Term and any Renewal Term of this Agreement,
Licensee or any other corporate entity in which Licensee has a
majority interest shall not enter into any licensing agreement
with any other person or entity for the development,
manufacture, marketing or sale in the Territory of any ready-to-eat
caramelized popcorn or nut product utilizing trademarks
of any competitor of Nabisco in the nut, candy or snack food
category; provided, however, that nothing in the foregoing
shall prevent Licensee from entering into co-packing
arrangements with any other person or entity that is a
competitor of Nabisco in the nut, candy, or snack food
category, including, without limitation, co-packing
arrangements for private label manufacture; and further
provided that Licensee may, with Nabisco's prior written
approval, which shall not be unreasonably withheld or delayed,
enter into a licensing agreement with another person or entity
that is a competitor of Nabisco in the nut, candy or snack food
category to utilize trademarks of that person or entity solely
for Licensee's Screaming Yellow Zonkers and Poppycock
caramelized popcorn products.
22. Waiver
The failure of any party hereto to enforce any provision
of this Agreement, or any right with respect thereto, or
failure to exercise any election provided for herein, shall in
no way be considered a waiver of such provision, right, or
election, or in any way affect the validity of this Agreement.
The failure of any party hereto to enforce any provision, right
or election shall not prejudice such party from later enforcing
or exercising that provision, right, or election which it has
under this Agreement.
23. Severability
In the event that any provision of this Agreement or any
part thereof is held by a court to be invalid, the remainder of
this Agreement shall be binding on the parties and construed as
if the invalid provisions or parts thereof have been deleted
from this Agreement.
24. Paragraph/Paragraph Order and Headings
The section/paragraph 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.
25. Entire Agreement
This Agreement sets forth the entire understanding of the
parties in respect of the subject matter hereof, and it may be
amended or modified only in writing executed by each party
hereto.
26. Confidentiality
Except as otherwise required by law, each party to this
Agreement shall maintain the terms of this Agreement in
confidence and shall not disclose the terms to any person
except only to the extent necessary to that party's employees
or, in the case of Nabisco, to the employees of its parent
company, Nabisco, Inc., or to that party's legal, accounting
and banking counsel as required to implement the Agreement.
Neither party shall issue a public statement concerning or
announcing this Agreement without the written consent of the
other party, which shall not be unreasonably withheld or
delayed.
NABISCO BRANDS COMPANY LINCOLN SNACKS COMPANY
By: /s/ X. Xxxxx By: /s/ Xxxxx Xxxxxxx
Name: Xxxx Xxxxx Name: Xxxxx Xxxxxxx
Title: Assistant Secretary Title: Chairman/CEO
EXHIBIT 1
FIDDLE FADDLE SKUs
CASE
UPC PRODUCT PACK/SIZE
98231-0 5 oz. Butter Toffee Fiddle Faddle 12/5 oz.
98250-0 5 oz. Caramel Fiddle Faddle 12/5 oz.
98431-0 4.25 oz. Fat Free Fiddle Faddle 12/4.25 oz.
98214-0 10 oz. Caramel Fiddle Faddle 12/10 oz.
98233-0 10 oz. Butter Toffee Fiddle Faddle 12/10 oz.
98433-0 8.5 oz. Fat Free Fiddle Faddle 12/8.5 oz.
98228-0 15 oz. Caramel Fiddle Faddle 12/15 oz.
98247-0 15 oz. Butter Toffee Fiddle Faddle 12/15 oz.
98447-0 12.7 oz. Fat Free Fiddle Faddle 12/12.7 oz.
98238-0 .5 oz. Snax Pack Caramel Fiddle Faddle 12/7.5 oz.
98239-0 .5 oz. Snax Pack Butter Toffee Fiddle Faddle 12/7.5 oz.
98240-0 .5 oz. Snax Pack Assorted Fiddle Faddle 12/8.5 oz.
EXHIBIT 2
EARNED NET SALES STATEMENT
FOR
PRODUCT:____________________________________________________
QUARTER ENDED:_____________________________________________
SALES CURRENT QUARTER
# of Units Sold _____ Gross Sales _____
Less: Cash discounts and returns. ( )
Documentation submitted herewith.
Net Sales _____
SALES CONTRACT YEAR TO DATE
# of Units Sold _____ Gross Sales _____
Less: Cash Discounts and returns. ( )
Documentation to be submitted herewith.
Net Sales _____
