1
EXHIBIT 10.8
TRADEMARK LICENSE AGREEMENT
AGREEMENT made this 4th day of September, 1997, by and between
SOUTHERN FOODS GROUP, L.P., a Delaware limited partnership ("Licensor"), and
XXXXXX FOODS CORPORATION, a Delaware corporation ("Licensee").
W I T N E S S E T H :
WHEREAS, Licensor owns the MEADOW GOLD trademarks used in
connection with sweetened condensed milk, and has obtained United States
federal trademark registrations therefor; and
WHEREAS, Licensee desires that Licensee and its permitted
assignees and sublicensees be allowed to process, sell and distribute sweetened
condensed milk under the MEADOW GOLD trademark and certain related designs of
Licensor and seeks to have Licensor grant it the right to do so, all on the
terms and conditions hereinafter set out.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 The following terms shall have the meanings set
forth below:
"Initial Term" shall have the meaning set forth in Article IX,
Section 9.1.
"Licensed Trademarks" shall mean (i) the trademarks listed and
described in Appendix A, attached hereto, including the United States federal
trademark registrations and applications therefor and all common law rights in
such
2
trademarks and any trade dress or label designs associated with such
trademarks, and (ii) any such other marks and trade dress or label designs as
the parties may agree in writing to add to Appendix A during the Term.
"Products" shall mean sweetened condensed milk and any other
product that the parties agree in the future shall bear a Licensed Trademark.
"Renewal Period" shall have the meaning set forth in Article
IX, Section 9.1.
"Term" shall mean the Initial Term and any Renewal Period.
"Territory" shall mean the United States.
"United States" shall mean only the 50 states comprising the
United States of America, and the District of Columbia, excluding without
limitation any U.S. possessions and territories.
ARTICLE II
GRANT OF LICENSE
Section 2.1. (a) Subject to the terms and conditions herein,
Licensor hereby grants to Licensee during the Initial Term of this Agreement
and any Renewal Periods an exclusive license to use the Licensed Trademarks on
or in connection with the Products in the Territory.
(b) This license is being entered into in connection with the
Stock Purchase and Merger Agreement dated as of May 22, 1997, among Mid-America
Dairymen, Inc., Xxxxxx, Inc., BDH Two, Inc. and Xxxxxx/Meadow Gold Dairies
Holdings, Inc. (the
-2-
3
"Acquisition Agreement"), and the consummation by Xxxxxx, Inc. and BDH Two,
Inc., each of which is an affiliate of Licensee, will be treated as
consideration for the license granted under Section 2.1(a). No other
consideration shall be payable as consideration for the license granted
hereunder.
Section 2.2. Subject to the terms and conditions herein,
Licensee may use the Licensed Trademarks on Product containers, labels,
packaging and shipping cases and on delivery vehicles and in any other way
suitable to promote or advertise the Licensed Trademarks and the Products.
Section 2.3. Other than as expressly stated herein, Licensee
shall have no other right to use or interest in the Licensed Trademarks.
Specifically, Licensee may not use any of the Licensed Trademarks in its trade
name or as its business name or in connection with any products, goods or
services of any kind or nature whatsoever, whether or not the same as or
similar to the Products, other than the Products. Notwithstanding the
foregoing, Licensee shall have the right to use any pre-existing materials
bearing the Licensed Trademarks for a transitional phase-out period of 120
days, after which all use of such materials must cease. Nothing contained in
this Article or any other provision of this Agreement shall restrict Licensor
from the sale of other products different from the Products bearing the
Licensed Trademarks anywhere in the world.
-3-
4
ARTICLE III
OWNERSHIP OF TRADEMARKS
Section 3.1. Licensee acknowledges that Licensor is the sole
owner of the Licensed Trademarks. Licensee shall not directly or indirectly
question, attack, contest, or in any other manner impugn the validity or
Licensor's ownership of the Licensed Trademarks, nor shall Licensee willingly
become an adverse party to Licensor in litigation contesting the validity of
Licensor's ownership and other rights in and to the Licensed Trademarks.
Section 3.2. Licensee shall be deemed a "related company"
under the U.S. Xxxxxx Act, such that any use of the Licensed Trademarks by
Licensee, and any goodwill generated thereby, shall inure to the sole benefit
of Licensor.
ARTICLE IV
FORM OF USE
Section 4.1. Licensee hereby acknowledges and agrees that its
use of the Licensed Trademarks shall be subject at all times during the Term to
the reasonable control of Licensor in order for Licensor to maintain the
consistent standard of quality associated with the Licensed Trademarks.
Licensee will preserve the good appearance of the Licensed Trademarks wherever
and whenever they are used and shall not use any Licensed Trademark in a manner
which is likely to derogate from the integrity, distinctiveness, goodwill,
value or strength of such Licensed Trademark.
-4-
5
Section 4.2. From time to time, Licensor may determine that a
previously published use of the Licensed Trademarks by Licensee may threaten
the value of the Licensed Trademarks, or is otherwise inconsistent with
Licensor's quality standards. Upon written notice from Licensor, Licensee
shall implement Licensor's directions regarding the proper use of the Licensed
Trademarks as promptly as practicable using its best efforts and, in any event,
within thirty (30) days.
Section 4.3. Except as required by law, Licensee agrees not
to use the Licensed Trademarks in connection or combination with any other
third-party trademarks, names or logotypes, without Licensor's prior written
approval, such approval not to be withheld unreasonably. Licensee shall at no
time adopt or use any variation of the Licensed Trademarks or any word or marks
confusingly similar thereto without Licensor's prior written approval.
Section 4.4. Licensee shall not take any action to cause an
abandonment or forfeiture of any of Licensor's rights in the Licensed
Trademarks and shall not take any action to cancel any registration in the
Territory of any Licensed Trademark in the name of Licensor or to interfere
with any renewal of any such registration. Licensee shall reasonably cooperate
with and shall not oppose any application by or on behalf of Licensor to
register or renew any registration of any Licensed Trademark in the Territory.
-5-
6
ARTICLE V
QUALITY CONTROL
Section 5.1. Licensee agrees that all Products bearing a
Licensed Trademark pursuant to the Agreement shall be of a high standard and of
such quality as to protect and enhance the Licensed Trademarks and the goodwill
and value pertaining thereto and shall meet Licensee's quality standards.
Licensee and its Manufacturing Agents (as defined in Section 5.5 below) shall
manufacture, sell, distribute and promote the Products in accordance with all
applicable federal, state and local laws.
Section 5.2. In order to assure that Licensee meets
Licensor's quality standards and specifications, once each quarter of the Term
and/or for good cause shown, Licensee shall submit comprehensive affidavits
that meet with Licensor's reasonable approval from all of Licensee's quality
control department managers responsible for the quality standards of the
Products produced by that part of Licensee's or its Manufacturing Agents'
business for which they are responsible, attesting under oath that Licensor's
quality standards and Product specifications have been fully complied with
during the prior quarter, also submitting representative Product samples, if
any, and listing the number of customer complaints relating to Product quality
during that quarter and a summary of the actions taken by Licensee in response
to such complaints.
Section 5.3. Licensor also reserves the right periodically to
conduct quality control inspections, upon reasonable notice and during normal
business hours, at Licensee's
-6-
7
plants to determine if the Licensee's standards for the Products and the
processing thereof are being complied with.
Section 5.4. In the event that Licensor or its agents shall
determine that any Products sold or distributed by Licensee and/or its
Manufacturing Agents bearing or using Licensed Trademarks do not conform to
Licensee's standards, and/or otherwise violate the provisions of this Article
V, Licensee agrees, at its expense, to take such action as Licensor directs in
writing, including, but not limited to, withdrawal and/or recall of such
Products from the market and to refrain and cause its Manufacturing Agents to
refrain from further sale and/or distribution of such Products under the
Licensed Trademarks unless and until Licensee and/or its Manufacturing Agents
have demonstrated to the reasonable satisfaction of Licensor that said Products
conform to said standards and/or the provisions of the Article V, as the case
may be.
Section 5.5. If Licensee enters into co-packing agreements
with suppliers or any other arrangement with respect to the processing or
packaging of final Products by any person who is not a subsidiary of Licensee,
who will process or package final Products for the Licensee, for sale in the
Territory ("Manufacturing Agents"), Licensee must submit such co-packing
agreements in draft form to Licensor or an individual designated by Licensor
("Licensor's License Coordinator") for prior approval to ensure they include
trademark protection and quality control provisions that safeguard the rights
of both the Licensor and Licensee under this Agreement. Licensor agrees that
such prior
-7-
8
approval shall not be withheld or delayed unreasonably, and that Licensor shall
respond promptly to any request for approval. If Licensor fails to respond to
such request within thirty (30) days, Licensor's approval shall be deemed
given.
Section 5.6. On a semi-annual basis, Licensee shall review
with Licensor's License Coordinator and obtain prior approval for, all
advertising, promotional and point-of-purchase materials published or
distributed by Licensee in connection with Products bearing Licensed
Trademarks. Licensor agrees that such prior approval shall not be withheld or
delayed unreasonably, and that Licensor shall respond promptly to any request
for approval. If Licensor fails to respond to such request within thirty (30)
days, Licensor's approval shall be deemed given.
Section 5.7. If Licensee desires to adopt new cartons or
packaging bearing the Licensed Trademarks, which package designs or trade dress
are different from those presently used by Licensor, Licensee shall submit to
Licensor's License Coordinator at least one (1) representative sample of each
such new carton and packaging material and may not use any such materials in
connection with the Licensed Trademarks without Licensor's prior written
approval. Licensor agrees that such prior approval shall not be withheld or
delayed unreasonably, and that Licensor shall respond promptly to any request
for approval. If Licensor fails to respond to such request within thirty (30)
days, Licensor's approval shall be deemed given.
-8-
9
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.1. Subject to the limitations of Section 6.2,
Licensor represents that it is the owner of or has the exclusive right to
license the Licensed Trademarks and is not aware of any other party with
ownership rights in the Territory in any of the Licensed Trademarks.
Section 6.2. Licensor represents that during the Term, it
will not license any other party to use the Licensed Trademarks on the Products
in the Territory and will not itself sell Products identified by the Licensed
Trademarks in the Territory. Nothing herein shall restrict Licensor's right or
ability to sell (or license others to sell) goods or services other than the
Products identified by the Licensed Trademarks or similar marks anywhere in the
world.
Section 6.3 Licensor shall take all steps necessary to insure
the continued registration of, including, but not limited to, filing all timely
renewals of registrations for the Licensed Trademarks.
Section 6.4. Licensee shall cooperate with Licensor in the
protection of the Licensed Trademarks and in connection therewith shall:
(a) promptly inform Licensor of any third-party use of any
Licensed Trademarks or any infringement or encroachment upon or any misuse
whatsoever of any Licensed Trademarks which comes to Licensee's attention; and
-9-
10
(b) promptly inform Licensor of any claim against Licensee
that the use of any Licensed Trademark infringes the rights of others or of the
institution of any proceeding against Licensee predicated upon any such claimed
infringement.
Section 6.5. Without limiting the effect of Section 3.1
hereof, Licensor and Licensee shall both have the right to take action in
respect of any Products bearing the Licensed Trademarks for any alleged
infringements of, or other impairments to, such Products. The party taking any
such action shall bear all expenses, have complete control over, and recover
all proceeds, settlements and damages with respect to the action.
Notwithstanding the foregoing sentence, the other party retains the right to
join such action and share evenly all expenses, control, proceeds, settlements
and damages with respect thereto, if such other party joins such action within
a reasonable time period following its commencement.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
Section 7.1. Licensor will hold Licensee harmless from and
against all suits, claims or actions by third parties against Licensee alleging
trademark infringement arising from Licensee's authorized use of any of the
Licensed Trademarks; provided that Licensee gives Licensor prompt written
notice of such suit, claim or action and cooperates fully with Licensor in
defending the same.
Section 7.2. Licensee hereby indemnifies and undertakes to
defend and hold Licensor harmless from and against
-10-
11
any and all claims, suits, losses, damages, fines, penalties, and/or expenses,
including, but not limited to, attorneys' fees, arising out of or based upon:
(a) Licensee's or its Manufacturing Agents' processing,
distribution or sale of Products bearing a Licensed Trademark; or
(b) any breach by Licensee or its Manufacturing Agents of
their obligations hereunder; or
(c) any proceeding brought by any person, governmental agency
or consumer group in connection with the Products processed, sold or
distributed by Licensee or its Manufacturing Agents bearing or using a Licensed
Trademark; or
(d) any violations of any applicable law or regulation or
civil claims relating to the manufacture, processing, sale, distribution,
promotion or advertising of Products bearing or using a Licensed Trademark
unless attributable to Licensor's breach of its obligations under this
Agreement. Licensor may participate in the defense of any such litigation.
Section 7.3. Licensee shall be solely responsible for the
acts and omissions of those with whom it or its Manufacturing Agents contract
for any aspect of the processing, distribution or sale of Products bearing or
using a Licensed Trademark.
Section 7.4. In order to assure its ability to discharge its
obligations to Licensor, Licensee agrees that it will maintain throughout the
Term at its expense, comprehensive general liability insurance, including
product liability insurance and contractual liability coverage specifically
-11-
12
endorsed to cover the indemnity provisions in this Agreement, from a carrier
satisfactory to Licensor, in a minimum amount of Five Million Dollars
($5,000,000) combined single limit for each single occurrence, for bodily
injury and property damage, which shall designate Licensor as an additional
insured therein. The policy shall provide for thirty (30) days prior written
notice to Licensor from the insurer in the event of any material modification,
cancellation or termination. Licensee shall deliver certificates of such
insurance coverage to Licensor prior to the sale and/or distribution of any
Products bearing a Licensed Trademark.
ARTICLE VIII
RELATIONSHIP
Section 8.1. The relationship between Licensor and the
Licensee is that of licensor and licensee; the Licensee, its contractors,
agents and employees shall under no circumstances be deemed agents,
franchisees, representatives, employees or partners of Licensor.
ARTICLE IX
TERM AND TERMINATION
Section 9.1. Subject to the provisions of Sections 9.2 and
9.3 hereof, the term of this Agreement shall be a period of five (5) years from
the date hereof (the "Initial Term") and for continuous subsequent five (5)
year terms (the "Renewal Period(s)").
Section 9.2. Licensee may cancel this Agreement upon no less
than one (1) year's written notice delivered to Licensor
-12-
13
prior to the end of the Initial Term or the then-effective Renewal Period,
provided that, if Licensee does not give the required notice of termination,
the Agreement shall be automatically renewed for a subsequent Renewal Period.
Section 9.3. Licensor shall have the right to cancel and
terminate this Agreement immediately by written notice to Licensee upon the
occurrence of any one (1) or more of the following events:
(a) Licensee fails to deliver to Licensor or to maintain in
full force and effect the insurance referred to in Section 7.4; or
(b) Except as provided in 9.3(c), Licensee or its
Manufacturing Agents fail to commence and diligently pursue the cure of any
breach by them of a material provision of this Agreement within ten (10) days
of receipt of Licensor's written notice of such breach or to effect such cure
within twenty (20) days of receipt of such written notice; or
(c) The failure or refusal of Licensee or its Manufacturing
Agents:
(i) to, within ten (10) days of receipt of Licensor's
reasonable written instructions issued regarding the quality standards
of the Licensed Trademarks and Products, respond to such instructions
and commence a diligent attempt at cure, or to effect such cure within
twenty (20) days of receipt of such instructions; or
(ii) to perform, or comply with, any provision contained
in Article V which failure results in the
-13-
14
production for sale of Products that are unsafe or unfit for human
consumption; or
(d) The insolvency of Licensee; an assignment by Licensee for
the benefit of creditors; the failure of Licensee to obtain the dismissal of
any involuntary bankruptcy or reorganization petition filed against it within
sixty (60) days from the date of such filing; the failure of Licensee to vacate
the appointment of a receiver for all or any part of its business within sixty
(60) days from the date of such appointment; or the dissolution of Licensee; or
(e) An involuntary recall of Products bearing the Licensed
Trademarks for reasons directly or indirectly related to the safety of such
Products and attributable to the negligence or intentional wrongdoing of
Licensee or its Manufacturing Agents; provided that Licensor determines in its
reasonable judgment that such event has had or is reasonably likely to have a
material adverse effect on the integrity, goodwill, value or strength of any of
the Licensed Trademarks; provided, further, that Licensor may terminate this
license under this Section 9.3(e) without regard to the immediately preceding
proviso upon or after the third occurrence within any 12-month period of an
event referred to in this Section 9.3(e).
Section 9.4. In the event that this Agreement is terminated
or expires, Licensee shall, and shall cause its Manufacturing Agents to,
immediately cease all use of the Licensed Trademarks, provided that Licensee
may dispose of inventory on hand of Products in the ordinary course of
business,
-14-
15
which shall be no longer than 120 days, if Licensee complies with its
obligations under this Agreement. Upon the request of Licensor, Licensee will
immediately remove or obliterate any Licensed Trademark from all signs,
billboards, vehicles and from each and every other place and medium in which
they appear and destroy or surrender to Licensor all other materials of
whatever nature which bear or refer in any way to the Licensed Trademarks.
Section 9.5. Licensee hereby acknowledges and agrees that in
the event it breaches or otherwise defaults under Articles IV, V or X of this
Agreement, Licensor shall suffer immediate and irreparable harm for which there
is not an adequate remedy at law. Licensee agrees that Licensor shall be
entitled to equitable relief by way of injunction, in addition to any other
remedy available at law or in equity.
ARTICLE X
ASSIGNMENTS AND SUBLICENSES
Section 10.1. This Agreement shall not be assigned by
Licensee, in whole or in part, without the prior written consent of Licensor,
provided that Licensee may assign this Agreement or any part hereof without
Licensor's consent to any person or group of affiliated persons that acquire
all or a significant portion of the sweetened condensed milk business of
Licensee and its affiliates on the date hereof. From and after any permitted
assignment pursuant to this Section 10.1, the assignee shall be deemed to be a
Licensee for all purposes hereof.
Section 10.2. The license granted under Article II, Section
2.1(a) of this Agreement shall not be sublicensed by
-15-
16
Licensee, in whole or in part, without the prior written consent of Licensor,
which consent shall not be unreasonably withheld. In no event shall any
sublicense under this section relieve Licensee of any of its obligations under
this Agreement.
ARTICLE XI
NOTICE
All notices pursuant to this Agreement shall be in writing and
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, as follows:
If to Licensor: Xxx Xxxx
Southern Foods Group, L.P.
0000 Xxxxx Xxxxxxx
Xxxxxx, XX 00000
With copies thereof to: Xxxxxxx X. Xxxx, President and
Chief Executive Officer
Xxxxxx/Meadow Gold Dairies, Inc.
0000 X. Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxx 00000
and
Xxxxxx X. Xxxxx, Esq.
General Counsel
Xxxxxx/Meadow Gold Dairies, Inc.
0000 X. Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxx 00000
If to Licensee: Xxxxx Xxxxx, Esq.
General Counsel
Xxxxxx Foods Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
With a copy thereof to: Xxxxxxx X. Xxxxx, General Counsel
Xxxxxx, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
-16-
17
Any notice delivered personally shall be deemed to have been given on the date
it is so delivered, and any notice delivered by registered or certified mail
shall be deemed to have been given on the date it is received. Either party by
notice in writing delivered or mailed to the other may change the name or
address or both to which future notices to such party shall be delivered.
ARTICLE XII
MISCELLANEOUS
Section 12.1. This Agreement and each of the appendices and
exhibits thereto constitute the entire understanding of the parties with
respect to the subject matter hereof, and supersede and merge all prior
agreements and discussions between the parties relating hereto. No changes in
the terms of this Agreement shall be valid, except when and if reduced to
writing and signed by both Licensee and Licensor.
Section 12.2. All rights and remedies which Licensor or
Licensee may have hereunder or by operation of law are cumulative, and the
pursuit of one right or remedy shall not be deemed an election to waive or
renounce any other right or remedy. Licensor or Licensee's failure to enforce
any provision hereof on any occasion shall not be deemed to waive any other
breach of any provision hereof. Any waiver of any provision of this Agreement
must be in writing and executed by the waiving party. No waiver of any breach
or default under this Agreement shall waive any other breach or default.
Section 12.3. The parties agree that each provision of this
Agreement shall be construed as separable and divisible from
-17-
18
every other provision. Enforceability of any one provision shall not limit the
enforceability, in whole or in part, of any other provision hereof. If any
term or provision of this Agreement (or the application thereof to any party or
set of circumstances) shall be held invalid or unenforceable in any
jurisdiction and to any extent, it shall be ineffective only to the extent of
such invalidity or unenforceability and shall not invalidate or render
unenforceable any other terms or provisions of this Agreement (or such
applicability thereof).
Section 12.4. Licensee and Licensor agree to execute such
further documentation and perform such further actions as may be reasonably
requested by the other party hereto to evidence and effectuate further the
purposes and intents set forth in this Agreement.
Section 12.5. All representations, warranties and indemnities
contained in this Agreement shall survive any independent investigation made by
the benefiting party and the suspension, expiration or termination of this
Agreement.
Section 12.6. This Agreement, irrespective of place of
execution or performance, shall be construed and enforced in accordance with
the laws of the State of Delaware applicable to contracts executed and wholly
performed therein. Any and all actions or proceedings concerning this
Agreement shall, if brought by any party hereto, be instituted and resolved in
the courts of the State of Delaware or any federal court sitting in the State
of Delaware. Each party hereby consents to jurisdiction and service of process
in such locale.
-18-
19
Section 12.7. Article and section headings and captions are
for convenience only and shall not be used in the construction or
interpretation of this Agreement or any terms herein.
Section 12.8. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXX FOODS CORPORATION
By: /s/
------------------------------------
Title:
SOUTHERN FOODS GROUP, L.P.
by SFG Management Limited Liability
Company, its General Partner
By: /s/ XXXX XXXXXXXX
------------------------------------
Title: President & CEO
-19-
20
Appendix A - Licensed Trademarks
UNITED STATES TRADEMARK U.S. REG. NO.
----------------------- -------------
MEADOW GOLD (stylized letters) 582,470
Shield Design 644,259
Milkwagon Design 1,412,503
