TORONTO-On the heels of a bitter collapse of an agreement with Weight Watchers, CoolBrands International Inc., says it reached an agreement to produce frozen desserts with the Crayola brand.

Binney & Smith Inc., which has been making Crayola crayons since 1903, is expanding into frozen novelties through the licensing agreement. It already markets confections through a similar arrangement.

CoolBrands filed a lawsuit last month against Weight Watchers International Inc. and Wells' Dairy, claiming the two companies violated a Master License Agreement (MLA) plan between CoolBrands and Weight Watchers. The Tornoto-based CoolBrands is seeking $360 million.

Wells and Weight Watchers have issued statements saying that the suit is without merit.

Specifically, CoolBrands claims that Weight Watchers entered into an agreement with Wells' Dairy in July, two months before the exclusive with CoolBrands was to expire.

The company said that these actions and false statements were an attempt to impair CoolBrands' ability to sell its popular and successful Smart Ones brand of ice cream and frozen novelties.