1
EPL Technologies, Inc.
Exhibit 10.12
Trademark License Agreement between
IPS Produce, Inc. and Potandon Produce LLC
2
EXHIBIT 10.12
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED ON PAGES 2, 3, 4, 6, 11, 15 AND 16 AND
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
TRADEMARK SUBLICENSE AND SERVICE AGREEMENT
THIS AGREEMENT is entered into this 22nd day of September 1997 (hereinafter the
"Effective Date"), between IPS Produce, Inc., a Pennsylvania corporation
(hereinafter referred to as "LICENSEE") and POTANDON PRODUCE LLC., a Delaware
limited liability company (hereinafter referred to as "LICENSOR").
WITNESSETH:
WHEREAS, LICENSOR entered into a Trademark License Agreement with The
Pillsbury Company ("TPC") (hereinafter referred to as the "LICENSE AGREEMENT");
WHEREAS, LICENSOR has been granted the right to use certain
trademarks and trade names including those listed in Exhibit A and the trade
dress used in connection therewith (hereinafter such trademarks and trade names
listed on Exhibit A are referred to as the "LICENSED MARKS"), which LICENSED
MARKS have been used in commerce and extensively advertised and promoted by
various means. The LICENSED MARKS are well known and recognized by the general
public and have gained a high reputation with the general public, which high
reputation and goodwill has been and continues to be a unique benefit to TPC and
LICENSOR;
WHEREAS, LICENSEE recognized the benefits to be derived from
utilizing the LICENSED MARKS and desires to utilize said LICENSED MARKS solely
upon and in connection with the marketing, advertising, sale and distribution of
fresh and perishable potatoes as defined in Exhibit B (the "Licensed Products");
WHEREAS, LICENSOR has developed a network of suppliers of potatoes
and LICENSEE wishes LICENSOR's assistance in the sourcing of potatoes and
LICENSOR is willing to provide certain services to LICENSEE on the terms and
conditions contained herein; and
WHEREAS, LICENSEE has requested LICENSOR to provide certain
marketing assistance and LICENSOR has requested THE XXXXX GROUP, INC., a
Minnesota corporation ("SGI") to provide such assistance as LICENSOR'S agent
pursuant to a separate arrangement between SGI and LICENSOR.
NOW, THEREFORE, in consideration of mutual promises contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
is expressly acknowledged, the parties agree as follows:
1
3
1. GRANT OF LICENSE
(a) Licensed Products. Upon the terms and conditions set forth in
this Agreement, as of Effective Date, LICENSOR grants to LICENSEE the right,
license and privilege to utilize the LICENSED MARKS (hereinafter the
"Sublicense") solely upon and in connection with the advertising, marketing,
sale and distribution of Licensed Product to "Non-Retail Customer" only.
Non-Retail Customers are those accounts which do not sell Licensed Product,
either directly or indirectly, to or through retail outlets such as grocery
stores.
(b) Limited License. This Sublicense is limited to Licensed
Products which meet or exceed the quality standards set forth in a quality
assurance manual to be jointly developed by LICENSEE and LICENSOR and subject to
LICENSOR's final approval prior to the production of any Licensed Products (such
quality assurance manual, with such changes thereto as LICENSOR may reasonably
determine are required in response to technological, legal, regulatory or other
industry developments, hereinafter referred to as "LICENSOR's Quality Assurance
Manual"). NO LICENSE IS GRANTED HEREUNDER FOR ANY USE OTHER THAN SOLELY IN
CONNECTION WITH THE LICENSED PRODUCTS, AND NO LICENSE IS GRANTED FOR ANY USE IN
COMBINATION WITH PRODUCTS THAT ARE NOT LICENSED PRODUCTS, AS DEFINED, WITHOUT
PRIOR WRITTEN CONSENT OF LICENSOR. Except as otherwise consented to by LICENSOR
in writing, the Licensed Products shall be sold to the public only in the manner
in which other similar articles are customarily merchandised. LICENSEE shall be
free to set the prices at which it sells or distributes License Products, and
LICENSOR shall have no right to dictate such price(s), provided, however, that
the Licensed Products shall at all times be sold and marketed as high quality
products consistent with LICENSOR's and TPC's image and reputation for overall
high quality.
(c) Exclusive Accounts. The Sublicense hereby granted shall be
with respect only to Non-Retail Customers and shall be exclusive with respect to
Non-Retail Customers. LICENSEE shall use commercially reasonable efforts to
avoid diversion of Licensed Products to accounts other than Non-Retail
Customers.
(d) Term. The term of the Sublicense granted hereunder shall
commence on the Effective Date and, unless sooner terminated as otherwise
provided for herein, shall continue until August 31, 2007 and shall continue
thereafter until terminated by either LICENSOR or LICENSEE providing the other
party not less than 180 days written notice of its election to terminate.
2. ROYALTY PAYMENT
(a) Royalties. LICENSEE shall pay LICENSOR a royalty of [ ] of all
Licensed Product "sold" during the [ ] of the term of the Sublicense and
2
4
[ ] of all Licensed Product "sold" during the [ ] of the term of the Sublicense.
The amount of royalty for each subsequent [ ] shall be [ ] of Licensed Product
"sold" times a fraction in which the numerator is the Consumer Price Index for
all Urban Consumers as published by the U.S. Department of Labor Statistics
("CPI") at the end of the preceding [ ] and the denominator is the CPI as of the
Effective Date but in no event shall such fee be less than [ ] nor more than [
]. The applicable rate shall be rounded to the [ ]. In the event the CPI data is
not available for any relevant date, LICENSOR may substitute such other
governmental index for purposes of the above computation as LICENSOR my
reasonably determine accurately reflects consumer inflation between the relevant
dates.
The [ ] payment shall be in lieu of any royalty payment during the [ ] of the
Sublicense.
Licensed Product shall be considered "sold" upon the date such Licensed Product
is billed, invoiced, or paid for, which ever event occurs first. No royalty
shall be due for Licensed Product which is returned to LICENSEE by its customer
no later than 14 days after the receipt of the Licensed Product by such
customer.
A Year(s) for purposes of the Agreement shall mean one year period(s) commencing
as of the Effective Date and each anniversary of the Effective Date.
(b) No Deduction. There shall be no deduction from the royalties
owed to LICENSOR for uncollectible accounts, or for taxes, fees, assessments,
allowances, advertising or other expenses of any kind which may be incurred or
paid by LICENSEE.
(c) Periodic Statements. On or before the fifth (5th) business day
of each month, LICENSEE shall furnish to LICENSOR a complete and accurate
statement showing (I) the number and description of each of the Licensed
Products covered by this Sublicense sold by LICENSEE during the preceding month
by customer name, type and quantity of Licensed Product sold and (ii) the
royalties due hereunder. Such statement shall be certified by an officer of
LICENSEE as being accurate and in compliance with generally accepted accounting
principles consistently applied. The foregoing statement shall be provided to
LICENSOR even if no royalty is due.
(d) Royalty Payments. LICENSEE shall pay all royalties owing to
LICENSOR hereunder for any month within fifteen (15) business days following the
end of such month. Payment shall be sent and made payable to Potandon Produce
LLC at the address given in Section 15 below. The receipt or acceptance by
LICENSOR of any of the statements furnished pursuant to this Sublicense or of
any royalties paid hereunder (or the cashing of any royalty checks paid
hereunder) shall not preclude LICENSOR from questioning the correctness thereof
at any time, and in the event that any inconsistencies or mistakes are
discovered in such statements or payments, they shall immediately bye rectified
and the appropriate payment made by LICENSEE.
3
5
(e) Records. LICENSEE agrees to keep accurate books of account
covering all transactions relating to the Licensed Products. LICENSOR or TPC and
their authorized representatives shall have the right at all reasonable hours of
the day at LICENSEE's usual place of business to examine and copy said books of
account and records and all other documents and material in the possession or
under the control of LICENSEE insofar as they relate to the calculation of
royalty payable hereunder. If any such examination shall reveal a deficiency in
royalties paid or payable hereunder of more than five percent (5%) of the
correct royalty for the period audited or if examination is made because of the
LICENSEE's failure to pay any amounts due hereunder, then LICENSEE shall bear
all reasonable costs incurred by LICENSOR or TPC in connection with the
examination. All books of account and records shall be kept available for at
least seven (7) years after the end of the period to which such books and
records relate.
(f) Up-front Payments. LICENSEE shall pay LICENSOR a [ ] upon
execution of this Agreement which payment shall be in lieu of any royalty
payment for all Licensed Product sold during the [ ]. Within 30 days from the
first day of each [ ], LICENSEE shall pay LICENSOR a [ ]. The [ ] shall be
applied against LICENSEE's royalty obligations for such [ ] at which time
LICENSEE will resume payment of royalty. [ ]
(g) Best Efforts. LICENSEE shall use commercially reasonable
efforts, consistent with the provisions of this Sublicense, to exploit the
LICENSED MARKS and sell the maximum volume of Licensed Products.
(h) Minimum Royalty. The minimum amount of royalty payable
hereunder shall be:
[ ]
[ ]
[ ]
[ ]
[ ]
In the event the amount of royalty paid by LICENSEE to LICENSOR in any Year is
less than the amount specified above for such Year, LICENSEE shall pay LICENSOR
an amount of money equal to the difference between such amount and the amount or
royalty actually paid by LICENSEE within thirty days from the end of such Year.
3. EXCLUSIVITY
4
6
(a) Exclusivity. The Sublicense granted herein shall be exclusive
for sale of Licensed Products to Non-Retail Customers in the United States and
Canada (the "Territory"). LICENSEE shall not knowingly sell Licensed Products to
any customer who resells such Licensed Products to any account other than a
Non-Retail Customer. LICENSEE agrees that all potato products produced, marketed
or sold by it shall be exclusively Licensed Products and LICENSEE shall not sell
any potato products under any trademark other than the LICENSED MARKS.
(b) Reservation. Notwithstanding anything contained herein to the
contrary, LICENSOR, TPC or The Xxxxx Group II, Inc.("SGII") may continue to
utilize, and grant others the right and license to utilize, the LICENSED MARKS
in connection with the sale of any products other than Licensed Products. THIS
LICENSE DOES NOT RESTRICT OR LIMIT TPC's, LICENSOR's or SGII's RIGHTS TO UTILIZE
THE LICENSED MARKS IN ANY MANNER WHATSOEVER EXCEPT SOLELY WITH RESPECT TO SALES
OF LICENSED PRODUCTS.
4. PROCUREMENT SERVICES
(a) Procurement. LICENSOR shall assist LICENSEE in the procurement
of raw potato products which are to be utilized by LICENSEE in the manufacture
of the Licensed Products.
(b) Scope. LICENSOR agrees to use all commercially reasonable
efforts to supply LICENSEE with all of its requirements of raw potatoes and
LICENSEE agreed to purchase exclusively from LICENSOR all of the LICENSEE's
requirements of potatoes to be used by the LICENSEE in the manufacture of the
Licensed Products. LICENSEE shall have the right to purchase raw potatoes from
other suppliers only in the event that LICENSOR is unable to provide such
potatoes. LICENSOR's failure to provide product with respect to any particular
transaction shall not relieve LICENSEE from its obligation to purchase from
LICENSOR with respect to future transactions. LICENSEE may request LICENSOR to
sell potatoes directly to its contract manufacturers. LICENSEE agrees that if
LICENSOR sells product to such parties at the request of LICENSEE, LICENSEE
shall promptly pay any invoice which is not paid in accordance with its terms by
such third party.
(c) Orders. LICENSEE shall submit all order for the Products to
LICENSOR in writing by facsimile or by letter which shall set forth, at a
minimum:
(I) An identification of the type of products ordered,
(II) Quantity,
(III)Requested delivery dates,
(IV) Manner and place of delivery, and
5
7
(V) Other requirements.
LICENSEE shall insure that its orders (each, an "Order") are received by
LICENSOR at least three (3) days prior to the shipment date requested in the
Order. LICENSOR shall promptly confirm all Orders upon receipt.
(d) Delivery Terms. The LICENSEE shall pay the cost of
transportation from, and storage after, the delivery point, and the LICENSEE
shall insure products with a reputable insurer for the full invoice amount of
such shipment. Such insurance shall provide for full coverage from the time the
products are delivered at the delivery point until paid for in full.
(e) Price and Payment Terms. The price for all potatoes sold to
LICENSEE hereunder shall be [ ] that LICENSOR pays for such potatoes from its
supplier [ ] In no event shall such price [ ]. In addition LICENSEE shall pay
LICENSOR [ ] of the FOB price for all product which is sold in not less than
full truckload quantities and [ ] of the delivered price for all product which
is sold on a less than truckload basis. LICENSOR shall invoice LICENSEE for the
purchase price of all product upon shipment thereof which invoices shall be due
within 21 days of the invoices. LICENSOR shall invoice LICENSEE for all Fees at
the end of each month for all product which was shipped during such month which
invoices shall be due within 21 days of the invoices. LICENSOR shall invoice
LICENSEE for all Fees at the end of each month for all product which was shipped
during such month which invoices shall be due within 21 days of the invoices.
(f) Warranty and Damages. LICENSOR warrants that as of the date of
shipment, the raw potatoes are merchantable and are not adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act and
shall comply in all material respects with applicable federal and state laws.
ALL OTHER WARRANTIES AND REPRESENTATIONS, EITHER EXPRESSED OT IMPLIED, ARE
HEREBY EXCLUDED. If any of the raw potato products are unmerchantable,
adulterated or otherwise not in compliance with any laws or regulations
("Unmarketable Products"), LICENSOR's sole obligation to LICENSEE shall be (a)
provide a credit to LICENSEE for the purchase price of the Unmarketable
Products, the Fee associated with such Unmarketable Products and the amount of
freight charges (which credit may be used for the purchase of replacement
product or other product)and (b) promptly provide replacement product. IN NO
EVENT SHALL LICENSOR BE LIABLE FOR ANY DAMAGE EXCEPT AS SPECIFIED ABOVE
INCLUDING, WITHOUT LIMITATION, ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
LICENSOR and LICENSEE agree that adjustments to the purchase price of
raw potatoes resulting from quality claims will be resolved in a manner
customary in the industry.
6
8
5. MARKETING ASSISTANCE
LICENSOR and LICENSEE will meet periodically, at the request of
either LICENSOR or LICENSEE, to review sales of the Licensed Products, marketing
programs, promotional activity and new product development. Such assistance
shall be provided by SGI, as agent for LICENSOR in accordance with a separate
agreement between SGI and LICENSOR.
6. GOODWILL, ETC.
(a) Acknowledgment. LICENSEE recognizes the great value of the
goodwill associated with the LICENSED MARKS and acknowledges that the LICENSED
MARKS and all rights therein and goodwill pertaining thereto belong exclusively
to TPC, and that the LICENSED MARKS have a secondary meaning in the minds of the
public. Upon expiration or termination of the right to use the LICENSED MARKS
pursuant to this Sublicense, except for LICENSEE's rights to sell out its
inventory pursuant to Section 13(d) below, LICENSEE shall cease all use of the
LICENSED MARKS promptly and will not use any of the LICENSED MARKS thereafter.
(b) No Impairment. LICENSEE agrees that during the term of this
Sublicense or thereafter it will not attack the title or any rights of TPC or
LICENSOR in and to the LICENSED MARKS, attack the validity of this Sublicense,
or do anything either by an act of omission or commission which might impair,
violate or infringe the LICENSED MARKS. LICENSEE will not claim adversely to TPC
or LICENSOR or anyone claiming through TPC or LICENSOR with respect to any
right, title or interest in or to said LICENSED MARKS and will not misuse or
harm or bring the LICENSED MARKS into public disrepute; provided, however, that
misuse, harm or public disrepute may not be inferred from advertising or
promotional materials with respect to which LICENSOR has given its prior
approval unless there has been a material change in applicable laws or
governmental regulations or LICENSOR has otherwise given reasonable notice to
LICENSEE withdrawing such approval. If at any time LICENSOR reasonably
determines that any such advertising or promotional material with respect to
which LICENSOR has given its prior approval do constitute misuse, or could cause
harm or public disrepute, LICENSEE will modify such advertising or promotional
material upon LICENSOR's request. LICENSEE agrees that it has not and will not
for its benefit, directly or indirectly, register(ed) or apply(ied) for
registration of the LICENSED MARKS or any xxxx which is, in LICENSOR's
reasonable opinion, the same as or confusingly similar to the LICENSED MARKS.
(c) Other Trademarks. Except as required by state law marketing
mandates, LICENSEE may not, without LICENSOR's prior written consent, use other
7
9
trademarks that are not LICENSED MARKS in connection with any Licensed Products
bearing a LICENSED XXXX (or any associated packaging, labeling or advertising);
provided that if such is granted, the LICENSED MARKS shall be the primary
trademark and other trademarks shall be secondary to the LICENSED MARKS.
(d) Cooperation. LICENSEE agrees to cooperate fully and in good
faith with TPC and/or LICENSOR, at TPC's or LICENSOR's expense, for the purpose
of securing and preserving TPC's rights in and to the LICENSED MARKS.
(e) Registration. If any of the trademarks, service marks, trade
names or logos licensed hereunder shall not be registered in the applicable
class of products hereunder, LICENSEE acknowledges that TPC may register the
LICENSED MARKS for the Licensed Products in its own name and that LICENSEE's use
thereof shall inure to the benefit of TPC for such purpose, as well as for all
other purposes. LICENSEE shall cooperate with TPC in any such registration or
application, excluding incurring or payment of any expenses of TPC.
7. INFRINGEMENT
(a) Notice of Infringement. LICENSEE and LICENSOR shall each
notify the other in writing of any infringements, misappropriation or imitations
by others of the LICENSED MARKS which may come to their attention, and LICENSOR
and TPC shall have the right to determine whether or not any action shall be
taken on account of any such infringements or misappropriation of the LICENSED
MARKS. Either LICENSOR or TPC, if it so desires, may at its own expense commence
or prosecute any claims or suits in its own name or in the name of LICENSOR
and/or LICENSEE or join LICENSOR and/or LICENSEE as a party thereto, but it is
understood and agreed that neither LICENSOR or TPC is under any obligation
whatsoever to institute any suit or take any action on account of any such
infringement, misappropriation or imitation.
(b) Irreparable Harm. LICENSEE expressly recognizes that the
LICENSED MARKS possess a special, unique and extraordinary character which makes
difficult the assessment of monetary damages which LICENSOR or TPC would sustain
by unauthorized use. LICENSEE expressly recognizes and agrees that an
irreparable injury would be caused to LICENSOR and TPC by unauthorized or
improper use or any use in breach of this Sublicense, and agrees that
preliminary and permanent injunctive and other equitable relief (including but
not limited to attorneys' fees)would be appropriate in the event of a breach of
this Sublicense by LICENSEE, provided that such remedy shall not be exclusive of
legal remedies otherwise available.
8
10
8. LICENSED PRODUCT, APPROVAL
(a) Quality. LICENSEE hereby covenants and agrees that the
Licensed Products (including all advertising) covered by this Agreement shall
meet or exceed the quality standards set forth in LICENSOR'S Quality Assurance
Manual, comply with approved specifications, and be of high standards and of
such quality, style and appearance as shall be reasonably adequate and suited to
their exploitation to the best advantage and to the protection and enhancement
of the LICENSED MARKS and goodwill pertaining thereto; that such Licensed
Products shall be manufactured, sold and distributed in accordance with all
applicable laws; and that the policy of sale, distribution and/or exploitation
by LICENSEE shall be of high standards and to the best advantage of the LICENSED
MARKS and that the same shall in no manner reflect adversely upon the good name
of LICENSOR or TPC, or any of their programs or of the LICENSED MARKS. LICENSEE
agrees that it shall not sell or distribute any Licensed Product which was
returned to it or other wise rejected due to quality reasons without the prior
consent of LICENSOR.
(b) Production Facility Approval. LICENSEE agrees to produce
Licensed Products only in facilities which have been reviewed on site by
LICENSOR or a designated agent or LICENSOR and found through inspection and
review to meet or exceed the standards set forth in LICENSOR's Quality Assurance
Manual for "Approval". LICENSOR may elect to rely upon LICENSEE's representation
that a facility meets or exceeds the standards set forth in LICENSOR's Quality
Assurance Manual for "Approval" instead of itself reviewing such facility. In
the event LICENSOR elects to review the facility itself it shall do so at its
own cost and shall do so promptly so as not to delay production at such
facility.
LICENSEE also agrees that authorized representatives of LICENSOR
and TPC will be permitted to inspect and audit any and all facilities from time
to time to determine the facility's degree of compliance to LICENSOR's Quality
Assurance Manual. LICENSOR shall bear the costs for these facility reviews.
In the event that LICENSOR or TPC reasonably determines through
inspection, audit or other resalable means that a facility supplying LICENSEE
has not been approved by LICENSOR or fails to meet the standards defined in
LICENSOR's Quality Assurance Manual in the reasonable judgement of LICENSOR's or
TPC's authorised representative, LICENSOR reserves the right to take one of the
following actions:
(1) Place the facility in a "conditionally approved" status for
minor noncompliances from LICENSOR's Quality Assurance
Manual and/or agreed upon specifications and request a written
corrective action plan from LICENSEE within ten days of LICENSOR's
conditional approval. In the event a corrective action plan is
submitted by LICENSEE and approved by LICENSOR, which approval shall
not be unreasonably withheld and in any case such approval shall be
granted or
9
11
withheld within 48 hours of submission of the corrective action to
LICENSOR or, if LICENSOR is required to submit the corrective action
plan to TPC, within 48 hours of submission of the corrective action
plan to TPC (if LICENSOR does not respond within such time period,
LICENSEE's plan as submitted shall be deemed to have been approved),
it is LICENSEE's responsibility to verify that corrective actions are
completed as prescribed and in a timely manner. Any costs of
corrective action shall be the responsibility of LICENSEE or the
facility, and not LICENSOR or TPC. LICENSEE may restore the
"conditionally approved" facility to "Approved" status once LICENSOR
is reasonably satisfied that corrective actions are complete.
LICENSOR and TPC reserve the right to re-inspect any facility which
has been restored to "Approved" status. In the absence of an approved
corrective action plan, LICENSOR or TPC may require discontinuance of
production at the conditionally approved facility. This will result
in a rating change to "Unapproved" for the facility of concern.
LICENSEE shall be responsible for any and all costs of
discontinuation.
(2) Place the facility in an "Unapproved" status for major
non-compliances from LICENSOR's Quality Assurance Manual and/or
agreed upon specifications, require LICENSEE to discontinue
production immediately and request a written corrective action plan
from LICENSEE. LICENSOR shall either grant or withhold its approval
within 48 hours of the submission of the plan to LICENSOR or, if
LICENSOR is required to submit the corrective action plan to TPC,
within 48 hours of submission of the corrective action plan to TPC.
LICENSOR shall not unreasonably withhold its approval. LICENSEE shall
be responsible for any and all costs of discontinuation of production
and LICENSEE or facility shall bear any costs of corrective action.
Once LICENSOR is reasonable satisfied with the corrective action,
LICENSEE may request LICENSOR to re-inspect the unapproved facility and restore
it to a "Conditionally Approved" or "Approved" status. The costs reasonably
incurred by LICENSOR or TPC of this reinspection shall be the responsibility of
LICENSEE.
(c) Quality Assurance Manual. LICENSEE agrees to comply in all
respects with LICENSOR's Quality Assurance Manual. If LICENSOR makes changes to
LICENSOR's Quality Assurance Manual, LICENSEE will be allowed a reasonable
period of time in which to come into compliance with the changed requirement.
(d) Confidential. LICENSEE agrees that LICENSOR's Quality
Assurance Manual is the confidential and proprietary information of TPC and
LICENSOR and shall be retained in confidence in accordance with the provisions
and restrictions of Section 13 below.
(e) Excessive Complaints and Defective Products. In the event that
10
12
LICENSOR reasonably determines that Licensed Products contain serious defects
and/or are causing increased levels of consumer dissatisfaction, LICENSOR
reserves the right to request reasonable corrective action by LICENSEE to
minimize the negative impact on consumers and protect the LICENSED MARKS. The
corrective action will be conducted within a time frame reasonably acceptable to
LICENSOR and the costs of corrective action shall be for the sole account of
LICENSEE. In the event LICENSEE is negligent in addressing LICENSOR identified
priorities for defects or excessive complaints, LICENSOR reserved the right to
require immediate discontinuation of the Licensed Product of concern.
(f) Compliance with Laws. LICENSEE warrants and represents that
all Licensed Products procured, sold or distributed by it shall not be
adulterated, contaminated or misbranded within the meaning of the U.S. Food,
Drug and Cosmetic Act or any other applicable law or regulation. LICENSEE agrees
to comply with all applicable laws and regulations in connection with the
processing, distribution or sale of Licensed Products including, without
limitation, the laws and regulations of Canada and its provinces.
(g) [ ] and [ ] Manufacturer. LICENSEE agrees that in the event it
elects to retain the services of a contract manufacturer of Licensed ProductS in
(i) the [ ], it shall consult with LICENSOR and with [ ] and will give due
consideration to [ ] as LICENSEE's contract manufacturer for such region and
(ii) [ ], it shall consult with LICENSOR and with [ ] and will give due
consideration to [ ] as LICENSEE's contract manufacturer for such region.
9. ADVERTISING, PROMOTION AND MERCHANDISING
(a) Submission for Approval. LICENSEE shall submit all advertising
and promotional copy pertaining to the Licensed Products to LICENSOR for written
approval before release for publication, which approval shall not be
unreasonably withheld, provided, it is agreed that if TPC withholds approval for
any reason, LICENSOR's refusal to grant approval shall not be deemed
unreasonable. LICENSOR reserves the right to disapprove any proposed release
without the necessity of stating a reason, provided that LICENSOR does suggest
how the submitted material will obtain LICENSOR's approval.
(b) TPC or LICENSOR Advertising. If LICENSOR or TPC believes it is
desirable to produce or place catalogs, promotional brochures or inserts, point
of sale displays or other advertising matter displaying the Licensed Products in
conjunction with other product of TPC or LICENSOR and/or others, LICENSOR and
TPC shall each have the right to do so without payment or obligation to
LICENSEE.
(c) Use of LICENSEE's Name. LICENSOR and TPC shall have the right,
but not the obligation, to use the name of LICENSEE in LICENSOR's or TPC's
programs without any payment or obligation to LICENSEE whatsoever. LICENSOR
agrees that such publicity will be in good tasted in accordance with accepted
industry standards. Any and
11
13
each use of any trademark or trade name of LICENSEE must have the prior written
approval of LICENSEE, which approval shall not be unreasonably withheld.
10. INDEMNIFICATION AND INSURANCE
(a) By LICENSEE. LICENSEE hereby agrees to indemnify LICENSOR and
TPC and their respective directors, officers, agents and employees and to hold
each of them harmless in all respects, including reasonable attorneys' fees,
from and against any and all claims, demands, suits or causes of action of
whatever kind or nature and resulting settlements, awards of judgements arising
directly or indirectly out of any act or omission or alleged activity of
LICENSEE in connection with the Licensed Products and/or the Sublicense,
including any defects or alleged defects in the Licensed Products but excluding
(I) the use of the LICENSED MARKS in any manner permitted hereunder, and (ii)
any act carried out by LICENSEE at the specific written request of LICENSOR so
long as carried out with due care and in compliance with applicable laws and
regulations; provided LICENSEE is given prompt notice of such claim, demand,
suit, or cause of action, and the opportunity to defend, with LICENSOR's and/or
TPC's cooperation. This indemnity shall survive the termination of this
Agreement.
(b) Insurance. LICENSEE shall, at its own expense, obtain and
maintain throughout the term of this Sublicense, Commercial General Liability
Insurance, on an "occurrence" form, with minimum limits of U.S. $2,000,000
combined single limit per occurrence, U.S. $4,000,000 general aggregate, and
U.S. $2,000,000 products/completed operations aggregate. If requested by
LICENSOR, the foregoing minimum policy limits shall be increased by a percentage
equal to the percentage increase in the Consumer Price Index for all Urban
Consumers as published by the U.S. Department of Labor Statistics since the date
of this Agreement. Such insurance shall be provided by insurance carrier(s) with
a financial condition comparable to, or better than, Best's "A" rating, and
shall not contain any endorsement or policy provision which in any way limits or
restricts coverage for contractual liability provided in the policy. Each policy
shall be endorsed to name LICENSOR and TPC as an additional insures and to
provide that it cannot be canceled without thirty (30) days prior written notice
to LICENSOR. As proof of insurance, LICENSEE shall furnish to LICENSOR a
Certificate of Insurance at least ten (10) days before any Licensed Products are
distributed and/or sold, and thereafter prior to the expiration of any policy.
Compliance with this Section concerning insurance shall in no way limit or
restrict LICENSEE's indemnification obligations.
11. RIGHT OF TERMINATION BY LICENSOR; AUTOMATIC TERMINATION
A. Without prejudice to any other rights that LICENSOR may have,
LICENSOR shall have the right to terminate this Sublicense upon five (5) days
written notice sent by
12
14
registered or certified mail:
(a) If LICENSEE shall be unable to pay its liabilities
when due or shall become subject to any bankruptcy, insolvency or
receivership proceeding of any nature (other than an involuntary
proceeding of which LICENSEE obtains a dismissal within 60 days after
filing), or it is business is placed in the hands of a receiver or
trustee by the exercise of any judicial power of a court of competent
jurisdiction;
(b) If LICENSEE assigns or sublicenses this Sublicense of
any of its rights hereunder;
(c) If LICENSEE fails to abide by any of the material
requirements of this agreement or otherwise fails to perform any of
its other obligations hereunder, and LICENSEE fails to cure such
breach or failure within thirty (30) days after notice from LICENSOR;
or
(d) If LICENSEE fails to attain the Minimum Requirements
in any Year as specified in Section 2 (h).
B. This Sublicense shall terminate automatically if the LICENSE
AGREEMENT is terminated for any reason whatsoever other than an election by TPC
to terminate the LICENSE AGREEMENT pursuant to Section 11 of the LICENSE
AGREEMENT. In the event of termination by TPC pursuant to Section 11 of the
LICENSE AGREEMENT, TPC may elect to allow this Sublicense to continue in effect
as between LICENSEE and TPC or may elect to terminate the Sublicense in the
manner prescribed in Section 12 below. Without regard to the manner in which the
LICENSE AGREEMENT may be terminated, including termination by TPC for cause,
LICENSOR shall have no liability to LICENSEE arising from such termination.
12. TERMINATION OPTION
(a) In addition to LICENSOR's rights to terminate this Sublicense
pursuant to Section 11 above, and whether or not any of the events described in
Section 11 above have occurred or exist, TPC shall have the irrevocable right
and option (the "Termination Option") to terminate LICENSEE's rights hereunder,
whether or not it elects to terminate the LICENSE AGREEMENT, in consideration of
the payment by TPC of a cancellation fee equal to the fair market value, as of
the date of the Termination Option is exercised, of LICENSEE's rights under this
Sublicense as determined pursuant to (c) below.
(b) To exercise the Termination Option, TPC shall deliver to
LICENSEE a written notice (the "Termination Notice") indicating TPC's election
to exercise the Termination Option pursuant to this Section. For a period of 30
days after exercise of the
13
15
Termination Option, LICENSEE shall afford TPC full access to all of LICENSEE's
documents and information which TPC may request. TPC may rescind the Termination
Notice at any time within 15 days after such 30-day due diligence period or
after the final determination of the appraisers pursuant to (C) below. Such
rescission shall be by written notice and be without liability to either party;
provided that TPC may not exercise the Termination Option more than once in any
calendar year. If the Termination Option is exercised and the Termination Notice
is not rescinded, TPC shall pay the Termination Notice is not rescinded, TPC
shall pay the Termination Payment in cash and LICENSEE's sublicense rights
hereunder shall thereupon terminate.
(c) The fair market value of LICENSEE's rights under this
Sublicense as of the date of exercise of the Termination Option (i.e. the
Termination Option exercise price) shall be determined by appraisal by one
mutually acceptable appraiser; provided that, if TPC and LICENSEE are unable to
agree on a single appraiser within ten days after exercise of the Termination
Option, each party shall designate one appraiser and the two appraisers so
designated shall, within ten days after their designation, jointly designate a
third appraiser or, if they are unable to agree, such third appraiser shall,
upon the petition of either party, be designated by the Senior Judge of the
District Court for Hennepin County, State of Minnesota. All appraisers shall be
experienced in business appraisal. The appraisers shall accomplish the appraisal
under such rules and procedures as they may reasonably establish to determine
the fair value of LICENSEE's right to use the LICENSED MARKS in its operations
(independent of the value of any other tangible or intangible assets or business
operations of LICENSEE) as of the date of exercise of the Termination Option
based on the success of LICENSEE's exploitation of the LICENSED MARKS to such
date and after deducting royalties due hereunder. Each party will cooperate with
such appraisers to the fullest extent. The decision of the appraisers shall be
rendered in writing by a majority within thirty (30) days after the selection of
the third appraiser, which decision shall be final and binding upon all parties.
The fees and expenses of the appraisers shall be divided equally between the
parties.
(d) LICENSOR shall have no liability to LICENSEE arising from a
termination pursuant to this Section 12.
13. EFFECT OF TERMINATION
(a) Cessation of Rights. Subject to the limited right to dispose
of inventory pursuant to Section 13(d), upon expiration or termination of this
Sublicense, all rights granted to LICENSEE hereunder shall cease and LICENSEE
will refrain from further use of the LICENSED MARKS or anything confusingly
similar to the LICENSED MARKS in connection with the growing, harvesting, sale
or distribution of LICENSEE's products.
(b) LICENSOR's and TPC's Remedies. LICENSEE acknowledges that its
failure (except as otherwise provided herein) to cease use of the LICENSED
14
16
MARKS at the termination or expiration of this Sublicense will result in
immediate and irreparable damage to TPC and LICENSOR and to the rights of any
subsequent licensee. LICENSEE acknowledges and admits that there is no adequate
remedy at law for such failure, and LICENSEE agrees that in the event of such
failure TPC and/or LICENSOR shall be entitled to equitable relief by way of
temporary and permanent injunctions and such other further relief as any court
with jurisdiction may deem just and proper. Resort to any remedies referred to
herein shall not be construed as a waiver of any other rights
and remedies to which TPC and/or LICENSOR is entitled under this Sublicense or
otherwise.
(c) Final Statement. Thirty (30) days after the expiration or
termination of this Sublicense, a statement showing the number and description
of Licensed Product on hand or in process shall be furnished by LICENSEE to
LICENSOR. LICENSOR shall have the right to take a physical inventory count to
ascertain or verify such inventory and statement, and failure of LICENSEE to
furnish such statement or refusal by LICENSEE to submit to such physical
inventory count by LICENSOR shall forfeit LICENSEE's right to dispose of such
inventory, TPC and LICENSOR retaining all other legal and equitable rights they
may have under such circumstances.
(d) Disposal of Inventory. LICENSEE may sell on a non-exclusive
basis, for a period of (3) months after expiration or termination of this
Sublicense, Licensed Products that utilized the LICENSED MARKS covered by this
Sublicense which are on hand or in processing at the time of expiration or
termination, provided that royalties with respect to such period are paid and
statements are furnished for that period in accordance with Section 2 of this
Sublicense and such Licensed Products otherwise comply in all respects with the
terms of this Sublicense. During such period, LICENSEE may also use up its
remaining inventory of LICENSOR approved packaging, boxes and labels using the
LICENSED MARKS. Any inventory of packaging, boxes or labels using the LICENSED
MARKS remaining after such 3 month period shall be destroyed or otherwise be
disposed of in a manner approved by LICENSOR in writing and LICENSEE shall
provide LICENSOR with a statement certifying the proper handling of such
packaging, boxes and labels in the manner prescribed herein.
(e) Compliance With Other Terms. Notwithstanding anything to the
contrary herein, LICENSEE shall not manufacture, sell or dispose of any Licensed
Product utilizing the LICENSED MARKS after termination because of the departure
by LICENSEE from the quality requirements of this Agreement.
14. JOINT VENTURE OPTION
LICENSOR shall have the option, [ ] of this Agreement, to
participate in LICENSEE's business of manufacturing, marketing and selling of
LICENSED
15
17
PRODUCTS by providing LICENSEE written notice of its election to so participate.
In the event LICENSOR exercises its option, this Sublicense shall terminate with
effect upon start-up of business of the "Joint Venture". If LICENSOR exercises
its option, the parties shall negotiate in good faith (I) the information of a
limited liability company or such other form of business entity the parties may
agree upon (the "Joint Venture") and (ii) all other terms and conditions of the
Joint Venture. LICENSOR shall [ ] to the LICENSED MARKS and shall [ ]. LICENSEE
will provide [ ].
15. NOTICES
All notices and requests and statements to be given and all
payments to be made hereunder shall be given or made at the respective addresses
of LICENSOR and LICENSEE set forth below unless notification of a change of
address is given in writing. Such notices and requests and statements shall be
deemed to have been duly given if in writing and delivered personally or sent by
certified mail.
As to LICENSEE:
IPS Produce Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xx. 00000-0000
As to LICENSOR:
Potandon Produce LLC
0000 Xxxxxx Xxx.
Xxxxx Xxxxx, Xx. 00000
16. CONFIDENTIALITY
LICENSOR and LICENSEE acknowledges that a confidential
relationship exists between them by virtue of the relationship contemplated by
this Sublicense and, accordingly, the parties acknowledge and agree that:
A. Confidential information will be disclosed by one party
to the other solely for the purposes incidental to the business
relationship contemplated by this Sublicense.
B. Each party will treat all confidential information
disclosed to it by the other party as secret and confidential and
shall strictly protect and safeguard such
16
18
confidential information from disclosure to third parties.
C. Neither party hereto will use any confidential
information of the other party for any purpose not incidental to the
purposes contemplated by this Sublicense and
will not disclose any such information to anyone other than its
employees, agents, or representative having a need to know such
information for purposes incidental to this Sublicense and who have
executed a confidentiality agreement in a form that is acceptable to
the other party.
D. Each party acknowledges that irreparable injury may be
caused to the other party in the event of any disclosure of
confidential information in violation of this Sublicense and each
party agrees that, if it should make or attempt to make, any such
disclosure in violation of the provisions hereof, the other party
shall be entitled, in addition to such other remedies, damages and
relief as may be available under applicable law, to an injunction
prohibiting such a disclosure or specifically enforcing the
provisions of this article, as the case may be. The obligations of
the parties as set forth in this Section 16 shall survive termination
of this Sublicense.
E. For purposes of this Section, "confidential information"
shall mean any trade secrets or other unpublished information which
has blue by virtue of not being generally known and which has been
disclosed by one of the parties hereto to the other in writing and
which has been clearly marked as confidential. Both parties agree
that it shall not submit confidential information to the other party
unless it first notifies the other party in writing of its intention
of doing so and describing in such communication the general nature
of what it intends to disclose. If the recipient of such
communication requests in writing, within 10 days of receipt of
such communication, that such information not be disclosed to it and
the other party nevertheless sends such information, such information
shall not be confidential information. LICENSOR acknowledges that
LICENSEE may xxxx statements or reports that it is required to
provide to LICENSOR as "confidential". The fact that such statements
or reports are marked confidential shall render the material
contained therein confidential if such material is not of a
confidential nature or such material is subject to any of the
following exceptions. The parties agree that the identity of certain
large or well-known foodservice accounts are not confidential.
LICENSOR and LICENSEE agree that confidential information shall not
include, and that the obligations of secrecy, confidence and non-use
set forth herein shall not apply to any information that (I) is or
becomes publicly known without the fault of the recipient; (ii) was
known by the recipient prior to its disclosure by the other party as
evidenced by written and dated records kept in the ordinary course of
business by the other party; or (iii) is independently disclosed to
the recipient by a third party source without breach of a
confidential relationship to the other party with regard to such
information.
17
19
17. NO JOINT VENTURE
Nothing herein contained shall be construed to place LICENSOR and
LICENSEE in the relationship of partners or joint venturers and neither shall
have any power to obligate or bind the other in any manner whatsoever.
18. CONSENT TO ASSIGNMENT OR SUBLICENSE
This Agreement and any rights granted herein may not be assigned,
transferred, mortgaged, sublicensed or otherwise encumbered by LICENSEE without
the prior written consent of LICENSOR. No transfer by operation of law shall be
effective against LICENSOR or TPC.
19. LICENSOR AUTHORITY
LICENSOR does hereby represent and warrant to LICENSEE that it
has the right and authority to grant the sublicense to LICENSEE on the terms and
conditions herein contained.
20. NO WAIVER; MODIFICATION; SEVERABILITY
None of the terms of this Agreement can be waived or modified
except expressly in writing signed by both parties. The failure of either party
to insist on compliance with any provision hereof shall not constitute a waiver
or modification of such provision. If any provision hereof is held to be invalid
or unenforceable by any court of competent jurisdiction or any other authority
vested with jurisdiction, such holding shall not affect the validity or
enforceability of any other provision hereto.
21. WHOLE AGREEMENT; GOVERNING LAW; CONSTRUCTION; BENEFIT
(a) Whole Agreement. Upon execution, this Sublicense cancels,
terminates and supersedes any prior agreement or understanding relating to the
subject matter between the parties, including any which may have existed between
LICENSOR and EPL TECHNOLOGIES, INC. ("EPL"), and there are no representations,
promises, warranties,, covenants, projections, or undertakings other than those
contained herein. Notwithstanding the foregoing, that certain confidentiality
agreement dated April 10, 1995, between EPL and LICENSOR shall remain in effect
in accordance with its terms with respect only to those formulas provided to
LICENSOR by EPL, which formulas are attached to that certain letter sent to
Xxxxxx Xxxxxx from LICENSOR dated September 10, 1997, a copy of which letter has
been sent to EPL.
18
20
(b) Governing Laws. This Sublicense shall be governed by and
interpreted in accordance with the laws of the State of Delaware including all
matters of construction, validity, enforcement and performance, without giving
effect to principles of conflict of laws.
(c) Titles and Headings; Construction. This Agreement shall be
construed without regard to any presumption or other rule requiring construction
hereof against the party causing this Agreement to be drafted.
(d) Benefit. Nothing in this Agreement or the agreements referred
to herein, expressed or implied, shall confer on any person other than the
parties hereto or thereto, or their respective permitted successors or assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, the agreements referred to herein, of the transactions contemplated
herein or therein. Notwithstanding the foregoing, the parties acknowledge that
there are numerous provisions in this Sublicense which refer provisions which
refer to any rights of TPC and TPC is entitled to the rights conferred upon it
herein all as if it were a party hereto. LICENSEE acknowledges that LICENSOR has
various obligations to TPC pursuant to the License including certain obligations
to obtain TPC's approval or consent. LICENSEE agrees that if TPC refuses to
grant any approval or consent to LICENSOR with respect to which LICENSEE is
seeking LICENSOR's approval or consent, LICENSOR's subsequent refusal to grant
approval or consent to LICENSEE shall not be deemed to be unreasonable.
(e) Public Announcement. No press releases, announcements or
other disclosure related to this Sublicense or the transactions contemplated
herein will be issued or made without the written approval of each of TPC,
LICENSOR and LICENSEE, except for any public disclosure which TPC, LICENSOR or
LICENSEE in good faith believes is required by law (in which case the disclosing
party will consult with the other parties prior to making such disclosure).
IN WITNESS WHEREOF, the parties hereto have executed this Trademark
Sublicense Agreement as of the day and year first above written.
POTANDON PRODUCE LLC
By: /s/ Xxxxx Xxxxx
---------------------------
IPS PRODUCE, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
19
21
EXHIBIT A
Licensed Marks
The following LICENSED MARKS (and any modifications thereto made by
LICENSOR or TPC or its successor in interest during the term of this Agreement)
may be used by LICENSEE only in connection with the Licensed Products and in
accordance with the terms and conditions of the Sublicense:
(1) "Green Giant Fresh"
(2) "Green Giant" and logo
22
EXHIBIT B
Licensed Products
1) Definition
Potatoes shall be "Licensed Products" hereunder if and only to the
extent that (1) such potatoes are "fresh and perishable", (2) any of the
LICENSED MARKS are used in connection with the advertising, marketing, sale or
distribution thereof, (3) such potatoes are (I) whole peeled or (ii) cut, diced
or sliced and not whole and (4) the product utilizes technology disclosed in
United States Patent #4,937,085.
For purposes of this Sublicense, "fresh and perishable" shall mean
that (I) such potatoes have a shelf life (measured from the date such potatoes
are distributed into the food service channels) not longer than specified below,
(ii) no chemicals or preservatives (except as specified in (4) above and in the
growing and harvesting thereof), except for coatings and other current customary
practices used in marketing of fresh vegetables have been added or applied to
such potatoes or the packaging thereof having the effect of extending the shelf
life thereof, (iii) such potatoes have not been blanched, cooked, or heat
treated for purposes of preservation, frozen, dehydrated, refrigerated (except
normal refrigeration used in the manufacturing process and in the delivery of
the product), irradiated and (iv) such potatoes have not been placed in a can,
jar, or bottle, nor in any other container or packaging intended to prolong the
shelf life in excess of the respective shelf life set forth below from the date
distributed into the food service channels.
2) Shelf Life
180 days
1
23
GUARANTY AND INDEMNITY
To induce LICENSOR to execute and deliver to LICENSEE, the attached
Agreement (the "Agreement") and to perform its obligations thereunder, EPL
TECHNOLOGIES INC., a Colorado corporation ("EPL") does hereby:
(a) absolutely and unconditionally guarantee to LICENSOR, the full,
faithful and punctual performance by LICENSEE of all of LICENSEE's obligations
under the Agreement;
(b) indemnify and hold harmless LICENSOR from and against any and all
losses, damages and costs which LICENSOR at any time shall or may sustain or
incur by reason of the failure of LICENSEE to fully, faithfully, and punctually
perform its obligations under the Agreement; and
(c) waive notice of, consent to, and agree that this Guaranty and
Indemnity shall not be affected or impaired by, any amendments, extensions,
settlements, compromises, favors, releases, renewals, indulgences or changes in,
or modifications of, any of the obligations of LICENSEE under the Agreement, or
any neglect or omission on the part of LICENSOR to realize upon any of such
obligations or liabilities thereunder.
EPL waives any rights to require a proceeding first against LICENSEE,
presentment, demand of payment, protest, notice of dishonor or nonpayment and
demands of any kind.
Capitalized terms used herein without definition which are defined in
the Agreement are used herein as therein defined.
This Guaranty and Indemnity shall be binding upon EPL and its
successors and assigns and shall be governed and construed in accordance with
the laws of Idaho.
IN WITNESS WHEREOF, EPL has caused this Guaranty and Indemnity to be
executed as of this 22 day of September, 1997.
EPL TECHNOLOGIES INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------
2
