EXHIBIT 7
LICENSE AGREEMENT
This License Agreement is made this 19th day of May 1999 by and between ConAgra
Brands, Inc., a Delaware Corporation with principal offices at Xxx XxxXxxx
Xxxxx, Xxxxx, Xxxxxxxx, 00000-0000, Xxxx-Xxxxxx, Inc., a Delaware Corporation
(Licensor) with principal offices at 0000 X. Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000-0000, and Dippy Foods, Inc., a California corporation
(Licensee) with principal offices at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000.
Whereas Licensor has an exclusive license to use the xxxxx XXXXX PAN for peanut
butter and XXXXX'X XXXXX FARMS for fruit filling with the right to grant
sublicenses thereunder; and
Whereas Licensee wishes to obtain a license to use such trademarks on the terms
set out below:
NOW THEREFORE, the parties mutually agree as follows:
1. DEFINITIONS -- As used herein the following terms shall have the
meaning set out below:
1.1 Licensed Marks -- shall mean the trademarks "XXXXX PAN" and "XXXXX'X
XXXXX FARMS" and the logos associated with each trademark, as such
trademarks and logos now exist or as they may be amended or revised
hereinafter by Licensor.
1.2 Licensed Products -- shall include only individual food trays
containing fruit filling and peanut butter for use in the school lunch
program or in other institutional feeding programs. Use of the
Licensed Marks in institutional feeding programs in the military and
in export markets shall be subject to Licensor's prior written
approval.
1.3 Territory -- shall mean the United States of America.
2. THE LICENSE
2.1 Grant of License -- Licensor hereby grants to Licensee and Licensee
hereby accepts a non exclusive, royalty-free license to use the
Licensed Marks solely to identify the use of Licensor's products in
connection with the production, marketing, sale and distribution of
Licensed Products to school districts, prisons or other institutions
within the Territory.
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2.2 Authority to Grant Sublicense -- Licensor represents that it has the
exclusive license to use the Licensed Marks for peanut butter and
fruit fillings, and has the right to sublicense the Licensed Marks to
Licensee in accordance with the terms of this Agreement.
3. TERM/TERMINATION
3.1 Term -- The term of this Agreement shall commence upon execution of
this Agreement and shall continue until December 31, 2008 unless
sooner terminated in accordance with the terms of this Agreement (the
"Term").
3.2 Termination -- Notwithstanding the provisions of Section 3.1 above,
both Licensee and Licensor shall have the right, independently, to
immediately terminate this Agreement in the following circumstances:
(a) Where the other party has failed to perform or meet any
material term or condition hereof and has failed to correct the
same within thirty (30) days after written notice of such
failure by the terminating party;
(b) Where (A) the other party fails to vacate an involuntary
bankruptcy, insolvency, or reorganization petition or petition
for an arrangement or composition with creditors filed against
it within sixty (60) days after the date of such filing, or
files such a petition on a voluntary basis; or (B) the other
party fails to vacate the appointment of a receiver or trustee
for it or any interest in its business within thirty (30) days
after such appointment; or (C) the other party's interest or
rights under this Agreement, or any part thereof, pass to
another by operation of law; or (D) the other party ceases to
do business as a going concern or ceases to conduct its
operations in the normal course of business; or (E) with
respect to Licensor's termination rights, Licensee either: (i)
permits an attachment to be levied against and remain
outstanding on any of its equipment which is essential to the
production of Product or any plant at which Product is being
produced, for more than thirty (30) days; or (ii) Licensee
changes the nature of its business or there is a change in the
voting control.
4. LICENSEE PURCHASES
4.1 Requirements and Price -- Licensee shall purchase its total
requirements for peanut butter and fruit filing, whether or not
intended for use in the Licensed Products, from Licensor at the prices
set out on Exhibit A hereto; provided however, Licensor acknowledges
that with respect to certain school districts, Licensee will be
required to use "commodity" Peanut Butter which is
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provided by said school districts and Licensee shall not use the
Licensed Marks in these situations. The prices shall be firm for the
period specified in Exhibit A, but thereafter, the price of peanut
butter or fruit filling hereunder may be increased: (i) by mutual
agreement of the parties; or (ii) by Licensor upon sixty (60) days
prior written notice to Licensee, provided, however, if Licensor
increases the price of a Licensed Product by more than the amount
necessary to maintain Licensor's percentage profit margin and to
recover increases in the cost of production, warehousing, and
transportation of such product, then in such event, Licensee may
terminate this Agreement by written notice to Licensor, given within
thirty (30) days after Licensee's receipt of the notice of such price
increase.
4.2 Minimum Usage -- Licensee must purchase from Licensor a minimum annual
quantity of peanut butter and fruit filling as follows:
MINIMUM QTY. MINIMUM QTY.
CALENDAR YEAR FRUIT FILLING PEANUT BUTTER
--------------- --------------- --------------
1999 400,000 lbs. 200,000 lbs.
2000 600,000 lbs. 400,000 lbs.
2001 800,000 lbs. 500,000 lbs.
The minimum annual quantity for peanut butter and fruit filling shall
each increase ten percent (10%) over the previous year, in each
calendar year after 2001. Licensee's failure to purchase the specified
minimum quantity of each product in any year, shall given Licensor the
right to terminate this Agreement upon thirty (30) days prior written
notice to Licensee.
4.3 Quality of Purchases -- Within thirty (30) days after the date of this
Agreement, Licensor shall furnish to Licensee samples of the peanut
butter and fruit filling to be furnished to Licensee by Licensor under
this Agreement. Licensee shall have ten (10) business days after
receipt of this samples to approve them, which approval shall be
granted or withheld by Licensee in a reasonable manner. Failure of
Licensee to respond within such ten (10) day period shall be deemed an
approval of the sample. All peanut butter and fruit filling sold to
Licensee by Licensor under this Agreement shall comply in all material
respects with the approved samples.
5. APPROVALS BY LICENSOR -- Licensor shall have the right to approve all
packaging and labeling of the Licensed Products, and all advertising,
promotions and other materials containing the Licensed Marks. Such
approval shall be granted or withheld by Licensor in a reasonable manner
and within ten (10) business days of receipt of such packaging and
labeling and such advertising promotional and other
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materials containing the Licensed Marks. If Licensor should withhold its
approval of any material delivered by Licensee, Licensor shall in its
response provide in adequate detail the basis for its withholding of
approval and shall, if reasonably feasible, identify the remedial action
that should be taken for Licensor to grant such approval. A legend shall
be placed on all packaging of the Licensed Products which shall state that
the Licensed Products are distributed by Licensee under license from
Licensor and that XXXXX PAN is a registered trademark of ConAgra Brands,
Inc.
If approval is withheld for any reason whatsoever, Licensee shall be able
to continue business operations using packaging, labeling, advertising,
promotions and other materials that do not contain the Licensed Marks
without incurring any obligation or liability whatsoever to licensor for
non-use of the Licensed Marks provided, however, nothing contained herein
shall excuse Licensee's obligation to meet the minimum annual purchase
requirements set out in Paragraph 4.2 above.
6. RECORDS AND REPORTS
6.1 Records. Licensee shall record all sales of the Licensed Products and
shall keep and maintain accurate records thereof for two (2) years
after the year to which such records relate.
6.2 Inspection and Audit. Licensor shall have the right from time to time,
upon five (5) days' prior written notice, to enter Licensee's premises
or other location where records are maintained during regular business
hours, to inspect, audit, and make copies of any such records relating
to sales of the Licensed Products at Licensor's sole expense.
7. INFRINGEMENT
7.1 Claims by Third Parties. In the event that Licensee receives notice,
or is informed, of any claim, suit or demand against Licensee on
account of any alleged infringement, unfair competition, or similar
matter relating to Licensee's use of the Licensed Marks and used by
Licensee in accordance with the terms of this Agreement, Licensee
shall promptly notify Licensor of any such claim, suit, or demand.
Thereupon, Licensor shall take such action as may be necessary to
protect and defend Licensee against any such claim by any third party
and shall indemnify and hold harmless Licensee against any losses, or
reasonable expenses incurred in connection therewith. Licensee shall
not have power or authority to settle or compromise any such claim by
a third party. Licensor does not know nor does it have any reason to
believe that Licensee's use of the Licensed Marks in accordance with
the terms of this Agreement shall infringe upon another person's use
of intellectual property or cause unfair competition with, or create a
claim in favor of, another person.
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7.2 Infringement of the Licensed Marks. In the event that Licensee
believes that any third party is improperly using a trademark, trade
name or logotype confusingly similar to the Licensed Marks, Licensee
shall promptly notify Licensor of all facts known to it relating to
such use. Thereupon Licensor shall conduct its own investigation of
such alleged infringing use and shall take such action as Licensor, in
its sole discretion, determines is reasonably necessary or appropriate
to protect the Licensed Marks. Licensor does not know nor does it have
any reason to believe that any third party is improperly using any
intellectual property that is confusingly similar to the Licensed
Marks.
8. QUALITY CONTROL/RECALLS
8.1 Quality Control - Licensee shall obtain from Licensor, before selling
any Licensed Products, the approval of Licensor as to the quality and
nature of such Licensed Products, which approval shall not be
unreasonably withheld, conditioned or delayed. Once a Licensed
Product, approved by Licensor as to quality and nature, has been
developed by Licensee, such Licensed Product may thereafter be
advertised and sold by Licensee in accordance with the terms of this
Agreement, so long as no material change is made in the quality and
nature thereof. Licensee shall furnish to Licensor, at least
quarterly, a reasonable number of samples of all Licensed Products
sold by Licensee, as requested by Licensor.
8.2 Recalls - In the event it becomes necessary to recall any Licensed
Products from distribution, Licensor shall, in consultation with
Licensee, control and manage all aspects of the recall. Furthermore,
subject to the provisions set forth below, Licensee shall reimburse
Licensor for all reasonable costs and expenses incurred by Licensor in
connection with any recall of Licensed Products (whether located in
the distribution system, in stores, in Licensee's warehouses, or
elsewhere) manufactured by Licensee, provided: (i) Licensor shall be
responsible for the costs and expenses of any recall which was caused
by a defect, existing as of the date of delivery to Licensee, in
peanut butter or fruit filling delivered by Licensor to Licensee
hereunder; (ii) licensor shall give Licensee prior notice before
initiating any such recall, which notice shall include the basis for
the recall; and (iii) Licensor shall conduct all recalls in accordance
with its policies and practices applicable to its other products.
9. COMPLIANCE WITH LAWS - Licensee shall manufacture, prepare, promote, market
and distribute the Licensed Products, and Licensor shall manufacture,
prepare and deliver peanut butter sold to Licensee pursuant to this
Agreement, in compliance with all applicable laws, rules and regulations of
all governmental authorities,
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including, but not limited to, all applicable food, safety, health,
advertising and other laws and regulations of federal, state or local
governments. Each party shall furnish to the other written evidence of its
compliance as such other party may from time to time reasonably request.
10. INSPECTION - Licensor shall have the right to enter and inspect any
premises or facilities used by Licensee for or in connection with the
manufacture, preparation, promotion, marketing and distribution of the
Licensed Products, at any time during normal business hours. Any inspection
conducted by Licensor shall be made in a manner so as to minimize
interference with the operation of Licensee's business.
11. FORCE MAJEURE - It is understood and agreed that each party's obligations
as set forth therein shall be excused to the extent that such party's
performance is prevented by the unavailability of materials or utilities,
strike or labor troubles, action or interference of governmental
authorities, acts of God, or any other cause whether similar or dissimilar
to the foregoing which is reasonably beyond the control of the parties.
12. INSURANCE AND INDEMNIFICATION
12.1 Insurance Obtained by Licensee. Licensee shall purchase from insurance
companies rated not less than A by Best, and shall maintain, at all
times during the Term of this Agreement, policies of product liability
insurance covering the Licensed Products, with minimum combined single
limit coverage of Five Million Dollars ($5,000,000).
12.2 Indemnification by Licensee. Licensee hereby agrees to defend,
indemnify and hold harmless Licensor, and each shareholder, director,
officer, employee and agent of Licensor, from and against any and all
suits, actions, claims, judgments, debts, obligations or rights of
action, of any nature or description, and all reasonable costs
incurred by such indemnified person(s) in connection therewith
(collectively "Licensor's Losses"), arising out of or relating to any
misfeasance, malfeasance, nonfeasance or negligence of Licensee, or to
the rights granted to Licensee hereunder, or Licensee's manufacture,
preparation, promotion, marketing and distribution of the Licensed
Products, or any acts, omissions, statements or representations of any
employee, agent, officer or director of Licensee relating thereto,
except with respect to any of Licensor's Losses which arise out of
Licensor's breach of any of its representations or obligations under
this Agreement.
12.3 Indemnification by Licensor. Licensor hereby agrees to defend,
indemnify and hold harmless Licensee, and each shareholder, director,
officer, employee and agent of Licensee, from and against any and all
suits, actions, claims,
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judgments, debts, obligations, or rights of action, of any nature or
description, and all reasonable costs incurred by such indemnified
person(s) in connection therewith, arising out of or relating to any
misfeasance, malfeasance, nonfeasance or negligence of Licensor, or of
any employee, agent, director or officer of Licensor, in connection
with the manufacture and preparation of the products purchased from
Licensor by Licensee pursuant to this Agreement or the representations
made or covenants to be performed by Licensor under this Agreement.
12.4 Indemnification Procedure. An indemnified person shall notify the
indemnifying party of any such suit, action, claim, judgment, debt,
obligation or right of action, promptly upon receiving notice or being
informed of the existence thereof. Upon receipt of such notice from
such indemnified person, the indemnifying party shall promptly take
such action as may be necessary to protect and defend such indemnified
person against such suit, action, claim, judgment, debt, obligation,
or right of action, using counsel of its choice, and shall indemnify
such indemnified person against any losses, costs or expenses
including reasonable attorney's fees, incurred in connection
therewith. An indemnified person shall have no power or authority to
settle or compromise any such suit, action, claim, judgment, debt,
obligation or right of action, and shall cooperate fully with the
indemnifying party in connection with the defense thereof. In the
event that an indemnified party shall choose to employ counsel to
participate in the resolution of any indemnified claim, the cost of
such counsel shall be borne exclusively by the party which has
employed said counsel.
13. ASSIGNMENT
13.1 Assignment by Licensor. Licensor shall have the right to assign this
Agreement, and all of its rights and privileges hereunder, to any
other persons, firm, corporation or entity; provided that, in respect
to any assignment resulting in the subsequent performance by the
assignee of the functions of Licensor (i) the assignee shall be
financially responsible and economically capable of performing the
obligations of Licensor hereunder; (ii) the assignee shall expressly
assume and agree to perform such obligations, (iii) such assignee will
maintain the wholesome image associated with the Licensed Marks as
previously maintained by Licensor and will not diminish the goodwill
of the business symbolized by such marks, and (iv) such assignee will
produce products to maintain the quality currently marketed by
Licensor. This Agreement shall be binding upon and inure to the
benefit of any firm or corporation which shall purchase, acquire or
become the successor in interest of Licensor. However, nothing shall
be deemed to preclude Licensor from
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employing co-packers to perform some or all of Licensor's obligations
to supply peanut butter pursuant to Section 5 hereof, for so long as
Licensor shall remain responsible for said obligations under and
pursuant to Section 5.
13.2 Assignment by Licensee. This Agreement is being entered into in
reliance upon and in consideration of the singular experience,
knowledge, skills, and qualifications of, and trust and confidence
reposed by Licensor in Licensee. Therefore, neither Licensee's
interest in this Agreement nor any of its rights or privileges
hereunder shall be assigned, transferred, shared or divided,
voluntarily or involuntarily, by operation of law or otherwise, in any
manner, without the prior written consent of Licensor which may be
granted or withheld by Licensor in its sole judgment, exercised in
good faith. A change in control of Licensee shall be deemed an
assignment by Licensee of this Agreement. For purposes of the previous
sentence, a "change in control of Licensee" shall occur if the
existing shareholders of Licensee cease to own a majority of
Licensee's equity interests or a majority of its present assets.
Without limiting the generality of the foregoing, Licensee shall not
sublicense to any third party the rights licensed to it hereunder, nor
subcontract with any third party respecting any of Licensee's
obligations hereunder.
14. DISCONTINUANCE OF USE OF LICENSED MARKS. In the event of expiration or
termination of this Agreement, whether by reason of default, lapse of time,
or other cause, Licensee shall forthwith discontinue the use of Licensed
Marks, and shall not thereafter use, in any manner, or for any purpose,
directly or indirectly, any of the Licensed Marks or any marks or symbols
deceptively similar thereto.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or any breach hereof, including, without limitation, any claim
that this Agreement, or any part hereof, is invalid, illegal or otherwise
voidable or void, shall be submitted to arbitration before an arbitrator in
accordance with the Commercial Rules of Arbitration of the American
Arbitration Association and judgment upon the award may be entered in any
court having jurisdiction thereof; provided, however, that this clause
shall not be construed to limit or to preclude either party from bringing
any action in any court of competent jurisdiction for injunctive or other
provisional relief as such party deems necessary or appropriate to compel
the other party to comply with its obligations hereunder or, in the case of
any action brought by Licensor, to protect the Licensed Marks. In the event
that either party shall make demand for arbitration, such arbitration shall
be conducted in Orange County, California. Any arbitrator shall be
reasonably experienced in the manufacture and/or licensing of food
products. The arbitration shall be governed by the provisions of the
Federal Arbitration Act, 9 U.S.C. sections 1 et seq.
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16. GENERAL CONDITIONS AND PROVISIONS.
16.1 Headings. Section headings used in this Agreement are for convenience
only and are not a part of the text hereof.
16.2 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter (and into which all
prior negotiations, commitments, representations and undertakings of
the parties are merged) and except as herein provided there are no
other oral or written understandings or agreements between the parties
hereto relating to the subject matter hereof.
16.3 Amendments. No amendment or other modification of this AGreement shall
be valid or binding on either party hereto, unless reduced to writing
and executed by the parties hereto.
16.4 Relationship of Parties. The parties hereto are independent and
neither party is the agent, joint venturer, partner or employee of the
other, and neither party shall be obligated by any agreements,
representations or warranties made by the other party to any person,
nor with respect to any other action or omission to act of the other
party, nor shall either party be obligated solely by reason of each
party's entry into this Agreement for any damages to any person
whether caused by the other party's action, failure to act,
negligence, or willful misconduct.
16.5 Waiver. No waiver by either party of any breach or series of breaches
or defaults in performance by the other party, and no failure, refusal
or neglect to exercise any right, power or option given to either
party hereunder or to insist upon strict compliance with or
performance of the obligations under this Agreement, shall constitute
a waiver of the provisions of this Agreement with respect to any
subsequent breach thereof or a waiver by such party of its rights at
any time thereafter to require exact and strict compliance with the
provisions thereof.
16.6 Governing Law. This Agreement shall be governed and construed under
and in accordance with the laws of the State of California.
16.7 Severability. All provisions of this Agreement shall be severable and
no such provision shall be affected by the invalidity of any other
such provision to the extent that such invalidity does not also render
such other provision invalid. In the event of the invalidity of any
provision of this Agreement, it shall be interpreted and enforced as
if all provisions thereby rendered invalid were not contained herein.
If any provision of this Agreement shall be susceptible of
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two interpretations, one which would render the provision invalid and
the other of which would cause the provision to be valid, shall be
deemed to have the meaning which would cause it to be valid.
16.8 Attorney's Fees. In the event that any suit, action or arbitration
shall be commenced by either party to enforce any right or obligation
created hereby, the prevailing party in such suit, action or
arbitration shall be entitled to receive the costs incurred by such
party in connection therewith, including reasonable attorneys' fees.
16.9 Notices. All notices permitted or required to be delivered by the
provisions of this Agreement shall be in writing and shall be given by
personal delivery, by confirmed telecopy, by nationally recognized
overnight courier with proof of delivery, or by registered or
certified mail, return receipt requested. Notices shall be deemed
given upon actual receipt if by personal delivery or confirmed
facsimile, next day if by overnight courier, or two (2) days after
delivery if notice is given by mail. Notices shall be addressed to the
parties at the addresess set forth hereinbelow, or to such other
address or addresses as the parties shall from time to time designate
in writing:
If to Licensor: XXXX-XXXXXX, INC.
0000 X. Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 000000-0000
Attn. V.P. Marketing - Xxxxx Pan
cc: Xxxx-Xxxxxx Legal Department
0000 X. Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
CONAGRA BRANDS, INC.
Xxx XxxXxxx Xxxxx
Xxxxx, Xxxxxxxx 00000-0000
If to Licensee: DIPPY FOODS, INC.
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx, President
17. CONFIDENTIALITY - The parties recognize that during the term of this
Agreement, Licensee shall disclose to Licensor, and Licensor shall be
given access to, confidential and proprietary information and
documentation relating to Licensee's business, including without
limitation, formulas, processes, marketing and sales data and
promotional information (collectively the "Proprietary Information").
The
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Licensor hereby agrees to (i) hold such Proprietary Information in
strict confidence and to take all reasonable precautions to protect
such Proprietary Information from disclosure to third parties,
utilizing all precautions that the Licensor would generally employ
with respect to its most confidential information, (ii) not to divulge
any such Proprietary Information or any information derived therefrom
to any third party and (iii) not to make any use whatsoever at any
time, or attempt to benefit, financially or otherwise, from such
Proprietary Information. The requirement to maintain the
confidentiality of Licensee's Proprietary Information shall not apply
to any information that the Licensor can document is or through no
improper action or inaction by Licensor or any of its affiliates
becomes generally known to the public, was in its possession or known
by it prior to receipt from the Licensee or was rightfully disclosed
to Licensor by a third party having the right to do so.
IN WITNESS WHEREOF, the parties hereto have executed this License Agreement
on the day and year first written above.
XXXX-XXXXXX, INC., a Delaware Corporation
By: /s/ illegible
-------------------------------------
CONAGRA BRANDS, INC., a Delaware Corporation
By: /s/ illegible
-------------------------------------
DIPPY FOODS, INC., a California Corporation
By: /s/ Xxx Xxxxxxxxx
-------------------------------------
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EXHIBIT A
FRUIT FILLING
PRICE F.O.B.
PRODUCT LICENSOR'S PLANT
FLAVOR CODE SIZE PLACENTIA, CA
------ ------- ---- ----------------
Apple Cherry 47205 475 lb. drum $332.50
Apple Raspberry 47208 475 lb. drum $332.50
Pineapple Apple 77207 475 lb. drum $327.75
Prices firm till September 30, 1999
PEANUT BUTTER
PRICE DELIVERED
PRODUCT LICENSEE'S PLANT
VARIETY CODE SIZE ANAHEIM, CA
------- ------- ---- ----------------
Creamy Reduced Fat 45920 500 lb. drum $442.50
Price firm till December 31, 1999
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