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EXHIBIT 10.9
TRADEMARK SUBLICENSE AGREEMENT
AGREEMENT made this 4th day of September, 1997, by and between
XXXXXX FOODS CORPORATION, a Delaware corporation ("Sublicensor"), and
SOUTHERN FOODS GROUP, L.P., a Delaware limited partnership ("Sublicensee").
W I T N E S S E T H :
WHEREAS, Sublicensor is the licensee of the EAGLE brand
trademarks used in connection with ice cream, and BDS Four Inc., a Delaware
corporation, composed of T.M.I. Associates, L.P., a Delaware limited
partnership ("Owner"), has obtained United States federal trademark
registrations therefor; and
WHEREAS, Sublicensee desires that Sublicensee and its
permitted assignees and sublicensees be allowed to process, sell and distribute
ice cream under the EAGLE BRAND trademark and certain related designs of
Sublicensor and seeks to have Sublicensor 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:
"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
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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 ice cream and any other product that the
parties agree in the future shall bear a Licensed Trademark.
"Term" shall have the meaning set forth in Article IX, Section
9.1.
"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,
Sublicensor hereby grants to Sublicensee during the Term of this Agreement an
exclusive license to use the Licensed Trademarks solely 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 "Acquisition Agreement"), and the consummation by
Mid-America Dairymen, Inc., which is an affiliate of Sublicensee, will be
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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,
Sublicensee 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,
Sublicensee shall have no other right to use or interest in the Licensed
Trademarks. Specifically, Sublicensee 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, upon termination of this Agreement, Sublicensee
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 Sublicensor from the sale of other
products different from the Products bearing the Licensed Trademarks anywhere
in the world.
ARTICLE III
OWNERSHIP OF TRADEMARKS
Section 3.1. Sublicensee acknowledges and agrees that
Sublicensee will not gain any ownership interest in the Licensed
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Trademarks under any circumstances. Sublicensee agrees not to directly or
indirectly question, attack, contest, or in any other manner impugn the
validity of the Licensed Trademarks, nor shall Sublicensee willingly become an
adverse party to Sublicensor or Owner in litigation contesting the
Sublicensor's or Owner's rights in and to the Licensed Trademarks.
Section 3.2. Sublicensee recognizes the value of the goodwill
associated with the Licensed Trademarks and acknowledges that the Licensed
Trademarks have acquired secondary meaning. Sublicensee shall be deemed a
"related company" under the U.S. Xxxxxx Act, such that any use of the Licensed
Trademarks by Sublicensee, and any goodwill generated thereby, shall inure to
the sole benefit of Sublicensor and/or Owner. Sublicensee shall not take any
action that could be detrimental to the Licensed Trademarks or the goodwill
associated with the Licensed Trademarks, Sublicensor or Owner.
ARTICLE IV
FORM OF USE
Section 4.1. Sublicensee 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 Sublicensor in order for Sublicensor to
maintain the consistent standard of quality associated with the Licensed
Trademarks. Sublicensee 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
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from the integrity, distinctiveness, goodwill, value or strength of such
Licensed Trademark.
Section 4.2. From time to time, Sublicensor may determine
that a previously published use of the Licensed Trademarks by Sublicensee may
threaten the value of the Licensed Trademarks, or is otherwise inconsistent
with Sublicensor's quality standards. Upon written notice from Sublicensor,
Sublicensee shall implement Sublicensor'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, Sublicensee agrees
not to use the Licensed Trademarks in connection or combination with any other
third-party trademarks, names or logotypes, without Sublicensor's prior written
approval, such approval not to be withheld unreasonably. Sublicensee shall at
no time adopt or use any variation of the Licensed Trademarks or any word or
marks confusingly similar thereto without Sublicensor's prior written approval.
Section 4.4. Sublicensee shall not take any action to cause
an abandonment or forfeiture of any of Sublicensor's or Owner'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 Sublicensor or Owner or
to interfere with any renewal of any such registration. Sublicensee shall
reasonably cooperate with and shall not oppose any application by or on behalf
of Sublicensor or Owner to register
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or renew any registration of any Licensed Trademark in the Territory.
ARTICLE V
QUALITY CONTROL
Section 5.1. Sublicensee 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 Sublicensee's quality standards.
Sublicensee 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 Sublicensee meets
Sublicensor's quality standards and specifications, once each quarter of the
Term and/or for good cause shown, Sublicensee shall submit comprehensive
affidavits that meet with Sublicensor's reasonable approval from all of
Sublicensee's quality control department managers responsible for the quality
standards of the Products produced by that part of Sublicensee's or its
Manufacturing Agents' business for which they are responsible, attesting under
oath that Sublicensor'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
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summary of the actions taken by Sublicensee in response to such complaints.
Section 5.3. Sublicensor reserves the right periodically to
conduct quality control inspections, upon reasonable notice and during normal
business hours, at Sublicensee's plants to determine if the Sublicensee's
standards are being complied with.
Section 5.4. In the event that Sublicensor or its agents
shall determine that any Products sold or distributed by Sublicensee and/or its
Manufacturing Agents bearing or using Licensed Trademarks do not conform to
Sublicensee's standards, and/or otherwise violate the provisions of this
Article V, Sublicensee agrees, at its expense, to take such action as
Sublicensor 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 Sublicensee and/or its
Manufacturing Agents have demonstrated to the reasonable satisfaction of
Sublicensor that said Products conform to said standards and/or the provisions
of the Article V, as the case may be.
Section 5.5. If Sublicensee 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
Sublicensee, who will process or package final Products for the Sublicensee,
for sale in the
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Territory ("Manufacturing Agents"), Sublicensee must submit such co-packing
agreements in draft form to Sublicensor or an individual designated by
Sublicensor ("Sublicensor's License Coordinator") for prior approval to ensure
they include trademark protection and quality control provisions that safeguard
the rights of both the Sublicensor and Sublicensee under this Agreement.
Sublicensor agrees that such prior approval shall not be withheld or delayed
unreasonably, and that Sublicensor shall respond promptly to any request for
approval. If Sublicensor fails to respond to such request within thirty (30)
days, Sublicensor's approval shall be deemed given.
Section 5.6. On a quarterly basis, Sublicensee shall review
with Sublicensor's License Coordinator and obtain prior approval for, all
advertising, promotional and point-of-purchase materials published or
distributed by Sublicensee in connection with Products bearing Licensed
Trademarks. Sublicensor agrees that such prior approval shall not be withheld
or delayed unreasonably, and that Sublicensor shall respond promptly to any
request for approval. If Sublicensor fails to respond to such request within
thirty (30) days, Sublicensor's approval shall be deemed given.
Section 5.7. If Sublicensee desires to adopt new cartons or
packaging bearing the Licensed Trademarks, which package designs or trade dress
are different from those presently used by Sublicensor, Sublicensee shall
submit to Sublicensor's License Coordinator at least one (1) representative
sample of each such new carton and packaging material and may not use any
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such materials in connection with the Licensed Trademarks without Sublicensor's
prior written approval. Sublicensor agrees that such prior approval shall not
be withheld or delayed unreasonably, and that Sublicensor shall respond
promptly to any request for approval. If Sublicensor fails to respond to such
request within thirty (30) days, Sublicensor's approval shall be deemed given.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.1. SUBLICENSEE ACKNOWLEDGES THAT SUBLICENSOR MAKES
NO REPRESENTATION OR WARRANTY WHATSOEVER AS TO OWNERSHIP OR VALUE OF THE
LICENSED MARKS. THE LICENSED MARKS ARE HEREBY LICENSED TO SUBLICENSEE ON AN
"AS IS" BASIS, AND SUBLICENSEE SHALL BEAR THE ECONOMIC AND LEGAL RISK THAT
SUBLICENSOR'S RIGHT TO USE THE LICENSED MARKS SHALL BE OTHER THAN GOOD AND
MARKETABLE AND FREE FROM ENCUMBRANCES AND THAT THE LICENSED MARKS SHALL BE
VALID AND FREE FROM CONFLICT IN THE TERRITORY.
Section 6.2. Sublicensor 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 Sublicensor'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 Sublicensor shall take all steps necessary to
insure the continued registration of, including, but not
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limited to, filing all timely renewals of registrations for the Licensed
Trademarks.
Section 6.4. Sublicensee shall cooperate with Sublicensor in
the protection of the Licensed Trademarks and in connection therewith shall:
(a) promptly inform Sublicensor 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 Sublicensee's attention;
and
(b) promptly inform Sublicensor of any claim against
Sublicensee that the use of any Licensed Trademark infringes the rights of
others or of the institution of any proceeding against Sublicensee predicated
upon any such claimed infringement.
Section 6.5. Without limiting the effect of Section 3.1
hereof, Sublicensor and Sublicensee 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.
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ARTICLE VII
INDEMNIFICATION AND INSURANCE
Section 7.1. Sublicensor will hold Sublicensee harmless from
and against all suits, claims or actions by third parties against Sublicensee
alleging trademark infringement arising from Sublicensee's authorized use of
any of the Licensed Trademarks; provided that Sublicensee gives Sublicensor
prompt written notice of such suit, claim or action and cooperates fully with
Sublicensor in defending the same.
Section 7.2. Sublicensee hereby indemnifies and undertakes to
defend and hold Sublicensor harmless from and against 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) Sublicensee's or its Manufacturing Agents' processing,
distribution or sale of Products bearing a Licensed Trademark; or
(b) any breach by Sublicensee 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 Sublicensee 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 Sublicensor's
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breach of its obligations under this Agreement. Sublicensor may participate in
the defense of any such litigation.
Section 7.3. Sublicensee 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 Sublicensor, Sublicensee agrees that it will maintain throughout
the Term at its expense, comprehensive general liability insurance, including
product liability insurance and contractual liability coverage specifically
endorsed to cover the indemnity provisions in this Agreement, from a carrier
satisfactory to Sublicensor, 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 Sublicensor as an additional
insured therein. The policy shall provide for thirty (30) days prior written
notice to Sublicensor from the insurer in the event of any material
modification, cancellation or termination. Sublicensee shall deliver
certificates of such insurance coverage to Sublicensor prior to the sale and/or
distribution of any Products bearing a Licensed Trademark.
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ARTICLE VIII
RELATIONSHIP
Section 8.1. The relationship between Sublicensor and the
Sublicensee is that of licensor and licensee; the Sublicensee, its contractors,
agents and employees shall under no circumstances be deemed agents,
franchisees, representatives, employees or partners of Sublicensor.
ARTICLE IX
TERM AND TERMINATION
Section 9.1. Subject to the provisions of Sections 9.2
hereof, the term of this Agreement (the "Term") shall be a period of one (1)
year from the date hereof .
Section 9.2. Sublicensor shall have the right to cancel and
terminate this Agreement immediately by written notice to Sublicensee upon the
occurrence of any one (1) or more of the following events:
(a) Sublicensee fails to deliver to Sublicensor 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), Sublicensee 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 Sublicensor'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 Sublicensee or its
Manufacturing Agents:
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(i) to, within ten (10) days of receipt of Sublicensor'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 production for sale of
Products that are unsafe or unfit for human consumption; or
(d) The insolvency of Sublicensee; an assignment by
Sublicensee for the benefit of creditors; the failure of Sublicensee 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
Sublicensee 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 Sublicensee; 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
Sublicensee or its Manufacturing Agents; provided that Sublicensor 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 Sublicensor may
terminate this license under this Section
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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 9.3. In the event that this Agreement is terminated
or expires, Sublicensee shall, and shall cause its Manufacturing Agents to,
immediately cease all use of the Licensed Trademarks, provided that Sublicensee
may dispose of inventory on hand of Products in the ordinary course of
business, which shall be no longer than 120 days, if Sublicensee complies with
its obligations under this Agreement. Upon the request of Sublicensor,
Sublicensee 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 Sublicensor all other
materials of whatever nature which bear or refer in any way to the Licensed
Trademarks.
Section 9.4. Sublicensee hereby acknowledges and agrees that
in the event it breaches or otherwise defaults under Articles IV, V or X of
this Agreement, Sublicensor shall suffer immediate and irreparable harm for
which there is not an adequate remedy at law. Sublicensee agrees that
Sublicensor shall be entitled to equitable relief by way of injunction, in
addition to any other remedy available at law or in equity.
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ARTICLE X
ASSIGNMENTS AND SUBLICENSES
Section 10.1. This Agreement shall not be assigned by
Sublicensee, in whole or in part, without the prior written consent of
Sublicensor.
Section 10.2. The license granted under Article II, Section
2.1(a) of this Agreement shall not be sublicensed by Sublicensee, in whole or
in part, without the prior written consent of Sublicensor, which consent shall
not be unreasonably withheld. In no event shall any sublicense under this
section relieve Sublicensee 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 Sublicensee: Xxx Xxxx
Southern Foods Group, L.P.
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 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
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and
Xxxxxx X. Xxxxx, Esq.
General Counsel
Xxxxxx/Meadow Gold Dairies, Inc.
0000 X. Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxx 00000
If to Sublicensor: 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
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 Sublicensee and Sublicensor.
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Section 12.2. All rights and remedies which Sublicensor or
Sublicensee 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. Sublicensor or Sublicensee'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 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. Sublicensee and Sublicensor 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.
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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.
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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SOUTHERN FOODS GROUP, L.P.
By SFG Management Limited Liability
Company, its General Partner
By: /s/ XXXX XXXXXXXX
------------------------------------
Title: President & CEO
XXXXXX FOODS CORPORATION
By: /s/
------------------------------------
Title:
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Xxxxxxxx X - Xxxxxxxx Xxxxxxxxxx
XXXXXX XXXXXX TRADEMARK U.S. REG. NO.
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EAGLE 1,499,835
