Co-Brand License Agreement - Dannon Co. Inc. and YoCream International Inc.
CO-BRAND LICENSE AGREEMENT
THIS CO-BRAND LICENSE AGREEMENT ("Agreement") is made as of the 6th day of
September, 2001 (the "Effective Date"), by and between The Dannon Company,
Inc., with its principal place of business at 120 White Plains Road, Tarrytown,
NY 10591-5536 (hereinafter referred to as "Dannon"), and YoCream International,
Inc., with its principal place of business at 5858 N.E. 87th Avenue, Portland,
OR 97220-1312 (hereinafter referred to as "YoCream").
WITNESSETH
WHEREAS, Dannon is the owner of the trademark "DANNON" and certain logos
and other marks which incorporate such trademarks, as shown on Exhibit "B"
hereto; and
WHEREAS, YoCream is the owner of the trademark "YOCREAM" ("YoCream Mark")
and manufactures and sells mix for making soft frozen yogurt under the YoCream
Mark; and manufactures and sells mixes for other soft frozen yogurt under other
brands, and co-packing and private branding arrangements with others; and
WHEREAS, the Parties desire to enter into the arrangement contemplated by
the Asset Purchase Agreement whereby soft frozen yogurt will be manufactured,
marketed and sold by YoCream under a co-brand determined as provided in Section
1.1(a) in the definition of "Co-Brand"; and
WHEREAS, to obtain from Dannon a license to use the Dannon trademark in
connection with such manufacture, marketing and sale of the soft frozen yogurt
product, YoCream recognizes the vital importance of protecting Dannon's
exclusive and valuable rights in and to said trademark and the goodwill
symbolized thereby.
NOW, THEREFORE, in consideration of the covenants and promises hereinafter
contained, Dannon and YoCream hereby agree as follows:
ARTICLE 1
DEFINITIONS
l.l. Definitions. For purposes of this Agreement, the following terms
shall be defined as follows:
(a) "Co-Brand" means such trademark and/or branding which
incorporates the Mark (as hereafter defined) and the YoCream
Mark as the Parties may hereafter mutually agree upon. Without
limiting either party's discretion in determining whether or
not to agree to a specific proposed "Co-Brand," the parties
currently anticipate that the Co-Brand would be in the spirit
of that reflected on Exhibit "A," incorporated herein by
reference.
(b) "License Year" means the period commencing on the Effective
Date and ending on the anniversary thereof for any calendar
year that this Agreement is in effect.
(c) "Mark" means Dannon's federally registered trademark,
Registration Number 2,304,910 and Application No. 75/029,984
and Dannon's logo as set forth in Exhibit "B" hereto,
incorporated herein by reference.
(d) "Net Sales" means YoCream's invoice price for the Product to
the customers, less any applicable variable distribution
charges, rebates paid to the customer, any Product related
deduction taken by the customer in the course of business, and
cash payment term discount applicable to such customers as of
the Effective Date of this Agreement as mutually agreed by the
Parties on a customer by customer basis. Invoices will be
included in the royalty calculation after the invoice has been
paid in full, including rebates or other approved Product
related deductions.
(e) "Party" or "Parties" means Dannon and/or YoCream.
(f) "Product" means any and all soft frozen yogurt mix manufactured
and directly or indirectly sold by or on behalf of YoCream to
YoCream's customers under the Co-Brand.
(g) "Royalty" means the royalty of four percent (4%) on Net Sales
of Product to any customer of YoCream.
(h) "Term" means the period commencing on the Effective Date and
expiring on the fifth anniversary thereof, subject to any
extension thereof pursuant to Section 2.2 of this Agreement.
(i) "Territory" means the fifty States of the United States and its
territories.
ARTICLE 2
GRANT OF LICENSE
2.1 Grant. Subject to the terms and provisions set forth in this
Agreement, Dannon hereby grants to YoCream, and YoCream hereby accepts, a non-
transferable, non-assignable license, to use the Mark during the Term solely in
connection with the manufacture, marketing and sale of the Product, but only as
incorporated into, or used in conjunction with, the Co-Brand. YoCream hereby
agrees not to use the YoCream Mark in connection with any soft frozen yogurt
mix other than in conjunction with the Co-Brand hereafter manufactured,
marketed or sold by YoCream in the Territory during the term of this Agreement.
2.2 Term. The initial Term of this Agreement shall be for a period of
five (5) years commencing as of the Effective Date and ending as of September
6, 2006. At the request of either party, one year prior to the end of the
initial (or then current renewal) Term, the parties shall meet to discuss
extending the Term. The Term of this Agreement may be extended only by mutual
agreement of the parties. However, the Agreement shall expire at the end of
the initial or then current renewal) Term if the parties have not agreed to an
extension on or prior to close of business on such date as is 180 days prior to
the end thereof (with respect to the initial Term, March 10, 2006)
2.3 Limitations on Use. YoCream has no right to nor shall it use the Mark
with any items other than the Product in the form and composition in existence
on the Effective Date or as otherwise approved by Dannon. YoCream has no right
to use the Mark in connection with the sale of the Product outside of the
Territory or to any person or entity which YoCream knows or has reason to know
(based upon facts known to its management, but without any independent
obligation to investigate) will sell or market the Product outside the
Territory unless otherwise agreed between the Parties.
2.4 Limitations on Licensing. During the Term, Dannon will not license,
or in any other manner grant permission, to any other person or entity to use
the Mark on any other soft frozen yogurt product in the Territory.
Notwithstanding this provision, Dannon reserves and shall have the right to
grant to any other person or entity the right to use the Mark as long as such
use is not in connection with a soft frozen yogurt product in the Territory,
and no consent or permission of YoCream shall be necessary.
2.5 Use of Other Trademarks. During the Term of this Agreement, neither
YoCream nor any subsidiary or affiliate of YoCream will use within the
Territory any mark or name except the Co-Brand on the Product or in connection
with advertising or promotional materials for the Product. Further, neither
YoCream nor any subsidiary or affiliate of YoCream will use within the
Territory any mark or name except the Co-Brand on soft frozen yogurt; provided,
however, YoCream may sell soft frozen yogurt under its owned YOGURT STAND and
PRIVATE BRAND marks (with such soft frozen yogurt as currently formulated with
minor adjustments being acceptable, when sold under such marks), and under
private label and co-packing arrangements. YoCream will use its best efforts
to cause customers currently purchasing soft frozen yogurt mix for sale under a
brand other than the Co-Brand to convert to the Product and/or to otherwise
sell such soft frozen yogurt to consumers under the Co-Brand, subject to the
terms of this Agreement (including without limitation, the quality standards
set forth herein).
Notwithstanding the foregoing limitations, this Section 2.5 shall not
prohibit YOCREAM nor or any of its subsidiary or affiliate companies from
investing in or acquiring an entity which sells soft frozen yogurt if the soft
frozen yogurt sold by such entity is not under the YOCREAM Mark and after the
investment or acquisition YOCREAM uses its best efforts to cause customers then
purchasing soft frozen yogurt mix from such entity to convert to the Product
and/or to otherwise sell such frozen yogurt to consumers under the Co-Brand,
subject to the terms of this Agreement (including without limitation, the
quality standards set forth herein).
2.6 Registration of Co-Brand by Mutual Consent. Neither Party shall apply
for formal registration of the Co-Brand with the United States Patent and
Trademark Office, or any other governmental entity, without the prior written
consent of the other Party, and in any event, the parties will be co-registrants
of the Co-Brand. Neither party shall commercially use, or permit the commercial
use of, the Co-Brand upon termination of this Agreement, except as permitted in
Section 8.6 hereof.
ARTICLE 3
QUALITY CONTROL
3.1 Quality Control; Inspections; Approvals. In order to protect the
goodwill and reputation associated with the Mark, YoCream covenants, agrees,
represents and warrants as follows, at a minimum that:
(a) The nature and quality of the Product; all services rendered by
YoCream in connection with the Product and the Co-Brand; all goods sold under
the Co-Brand; and all related advertising, packaging, labels, publicity
materials and promotional materials used by YoCream in connection with the
Product, the Co-Brand or the Mark shall conform to the standards established
and/or approved by Dannon, including but not limited to any health,
cleanliness, sanitation and/or quality standards, and including but not limited
to those set forth in the YoCream Quality Requirements Manual as set forth in
Exhibit "C" hereto (as updated from time to time upon written notice to
YoCream). Without limiting the foregoing, Dannon shall have the right to
approve or disapprove any changes in, additions to or deletions of flavors,
line extensions or SKU's in which the Product is manufactured, marketed and
sold.
(b) Notwithstanding any other provision of this Agreement, Dannon shall
have no liability to YoCream or third parties with respect to the Product
manufactured or sold by YoCream, its agents, contractors or sub-contractors or
its customers.
(c) YoCream will abide by any laws, rules, regulations or general industry
standards governing the operation of a food business, including, but not
limited to, procedures on health, cleanliness and sanitation.
(d) All future products produced under this Agreement will be of the
quality and nature equivalent to, or better than, those approved by Dannon as a
result of Dannon's testing of the Product prior to entering into this
Agreement.
(e) YoCream shall cooperate with Dannon in facilitating Dannon's control
of such nature and quality by permitting Dannon, as Dannon requests, to inspect
YoCream's manufacturing facilities (or those of any contract manufacturer
utilized by YoCream) or other facilities of YoCream and by supplying Dannon, as
Dannon reasonably requests, with specimens of use of the Product, the Co-Brand
and the Mark, and of all materials showing the Product and/or services
associated with the Product, the Co-Brand or the Mark.
(f) If an event has occurred with respect to the Product which may be
reasonably expected to damage or denigrate the Mark or to create a substantial
health risk, YoCream shall direct a market withdrawal, stock recovery and/or
recall of any such Product. Upon mutual agreement YOCREAM shall direct a
market withdrawal, stock recovery and/or recall of any Product which does not
materially comply with the quality requirements of this Agreement. In
addition, YoCream shall direct a recall of any Product in the event that a
recall of the Product is required, ordered or recommended by any court or
government agency or any applicable law or regulation, for any reason. YoCream
shall bear primary responsibility for market withdrawal, stock recovery and/or
recall procedures and expenses, however the Parties agree that no royalty shall
be applicable to any Product withdrawn, recovered or recalled. Any request for
a market withdrawal, stock recovery and/or recall by Dannon hereunder shall not
prejudice any other or additional right or remedy Dannon may have under this
Agreement.
(g) YoCream shall submit to Dannon, without charge, for inspection and
approval by Dannon, a sample of each advertisement, package, label, tag and
piece of publicity or promotional material that uses the Mark or the Co-Brand
at each of the following stages of development: concept, mechanical or lay-out,
finished art, pre-production and final product. YoCream shall not use any
advertisement, package, label, tag, publicity or promotional material for the
Product using the Co-Brand, the Mark or the Dannon name, which has not been
approved by Dannon in writing.
(h) Without limiting any other provision of this Agreement, the
manufacture, distribution, promotion and sale of the Product and any tags,
labels, packaging, advertising and promotional materials thereof shall comply
with all applicable laws and regulations, including but not limited to, any
industry standards.
(i) YoCream shall not use a personality or celebrity to endorse or promote
the Product unless and until it obtains approval in writing from Dannon.
(j) YoCream's policy of sale and distribution of the Product shall be of
high standard and shall in no manner reflect adversely upon the good name of
Dannon or upon the goodwill and reputation associated with the Mark.
(k) Both parties shall use their best efforts to promptly handle any
requests for approvals required under this Agreement (for example, approvals
under Section 5.3; but excluding, without limitation, amendments to this
Agreement). Unless the Parties agree otherwise, response to requests for
approval must be given within ten (10) business days from the date of request.
Lack of such response within ten (10) business days from the date of the second
notice of such request (which second request shall not be given prior to ten
(10) business days from the date of the first request) shall constitute
approval of the request.
ARTICLE 4
OWNERSHIP OF THE MARK
4.1 Ownership of Mark. YoCream acknowledges and agrees that:
(a) YoCream shall acquire no ownership rights in or to the Mark by virtue
of this Agreement or otherwise and all use by YoCream of the Mark shall be
deemed to inure to the benefit of Dannon.
(b) YoCream shall not, during the Term or thereafter, directly or
indirectly, contest or aid in contesting Dannon's ownership of the Mark or the
validity of the Mark, and
(c) YoCream shall not, during the Term or thereafter, do anything
inconsistent with or which impairs Dannon's ownership of or the validity of the
Mark.
4.2 Cooperation in Enforcing Ownership Rights. At Dannon's request,
YoCream will cooperate fully, at Dannon's expense, in confirming, perfecting,
preserving and enforcing Dannon's rights in the Mark.
4.3 Unauthorized Use. YoCream agrees to notify Dannon of any unauthorized
use, unfair competition or other infringement by other persons relating to the
Co-Brand or the Mark promptly after it comes to YoCream's attention. Dannon
agrees to notify YoCream of any unauthorized use, unfair competition or other
infringement by other persons relating to the Co-Brand or the YoCream Mark
promptly after it comes to Dannon's attention. The Parties shall have the
right to determine what action, if any, will be taken to remedy any
infringement(s) of or related to their respective trademarks or other
intellectual property rights, either standing alone or as incorporated in the
Co-Brand. The Parties shall not take any action with respect to such
infringements of the other party's trademarks or other intellectual property,
standing alone, without the prior written consent of the other Party.
Notwithstanding the foregoing, the Parties agree to cooperate in good faith in
determining what action to take regarding any infringement of the Co-Brand.
ARTICLE 5
ADDITIONAL OBLIGATIONS OF YOCREAM
5.1 Royalty Payment. During the Term, and thereafter as provided in
Section 8.9 hereof, YoCream shall pay a Royalty payment to Dannon on the
twentieth (20th) day of each month following the Effective Date with respect to
all sales of Product made during the previous month. YoCream shall provide an
accounting with each such Royalty payment showing a breakdown of the Royalty
amount and other mutually agreed documentation. Dannon shall have the right
to question and confirm the amount of a Royalty payment or any part thereof and
the right to inspect YoCream's books and records relating to such Royalty
payment for a period of one (1) year following such Royalty payment.
5.2 Marketing. YoCream agrees to use its best efforts, consistent with
its past practices and past financial expenditures, for marketing, advertising,
promoting and publicity for the Product.
5.3 Approval of Formats, etc. YoCream shall use the Mark only in the
composition, lettering, logos, print styles, forms and formats which have
received the prior written approval of Dannon.
5.4 Insurance Coverage. YoCream shall obtain from a reputable insurance
carrier acceptable to Dannon liability insurance with limits not less than
$10,000,000 (U.S. dollars) (per person, per injury) in order to protect and
insure Dannon and YoCream against any claims or liabilities with which either
or both of them may be charged because of personal injuries or injuries
suffered by any person or entity, resulting from the ingestion of the Product
or the manufacture or sale thereof, whether during the Term or thereafter.
Dannon shall be named in the policy of such insurance as an additional insured
and such policy shall provide that the insurance cannot be cancelled without
the insurer giving Dannon written notice thereof at least thirty (30) days
prior to the effective date of the cancellation and that the insurance covers
the contractual liability of YoCream to Dannon under the provisions of
paragraph 5.5 below. YoCream shall maintain such insurance in full force and
effect throughout the Term and for at least three (3) years thereafter. Within
ten (10) days after the date this Agreement is executed and on the first day of
each License Year thereafter, YoCream shall deliver to Dannon a certificate of
insurance evidencing that such insurance is in full force and effect and that
it cannot be cancelled without the insurer giving Dannon written notice thereof
at least thirty (30) days prior to the effective date of the cancellation. The
insurance described in this Section shall be primary and shall not be subject
to contribution by any other insurance, which may be available to Dannon.
5.5. Indemnity. YoCream agrees to indemnify Dannon and its directors,
officers, employees and agents and hold them harmless from and against any and
all claims, demands, actions, liabilities, damages, losses, costs and expenses
(including attorneys' fees) ("Damages") arising out of or resulting from or in
connection with YoCream's (1) performance or non-performance of its obligations
under this Agreement; or (2) negligent or willful acts or omissions (or such
actions or omissions of YoCream's agents, employees, contractors, or
consultants). In the event that a recall of the Product is required, ordered or
recommended by any court or government agency or any applicable law or
regulation, for any reason, YoCream shall comply with such requirement, order
or recommendation and shall bear all the expenses thereof. This Section shall
survive the expiration, termination, breach or alleged breach of this
Agreement.
ARTICLE 6
DANNON'S OBLIGATIONS
6.1 Notification of Unauthorized Use. Dannon agrees to notify YoCream of
any unauthorized use, unfair competition or other infringement by other persons
relating to the Co-Brand or the Mark as incorporated into the Co-Brand promptly
after such infringement comes to Dannon's attention.
6.2 Indemnity. Dannon agrees to indemnify YoCream and its directors,
officers, employees and agents and hold them harmless from and against any and
all Damages arising out of or resulting from or in connection with Dannon's (1)
performance or non-performance of its obligations under this Agreement; or (2)
negligent or willful acts or omissions of Dannon (or such acts or omissions of
Dannon's agents, employees, contractors, or consultants). This Section shall
survive the expiration, termination, breach or alleged breach of this
Agreement.
ARTICLE 7
MUTUAL NONDISCLOSURE AND CONFIDENTIALITY AGREEMENT
7.1 Confidential Information. The Parties acknowledge and agrees that the
idea, composition of and the methods of manufacture of the Product, as well as
product development, testing, marketing, quality standards, and any and all
other business or strategic information relating to the Product, the Co-Brand,
the Mark or the business of either Party hereto (collectively, the
"Information"), is proprietary, confidential and/or competitively sensitive and
shall be kept secret. Neither Party shall use the Information except as
contemplated by this Agreement without the prior written approval of an
authorized representative of the other Party.
7.2 Non-Disclosure. The Parties agree that either Party may disclose the
Information to those of its directors, officers, employees and representatives
who need to know such Information for the purpose of maintaining or evaluating
the relationship between YoCream and Dannon. Prior to disclosing this
Information, however, each Party will inform the person to receive the
Information of its confidential nature and the obligations of nondisclosure and
confidentiality as defined herein in this Article 7.
7.3 Term of Non-Disclosure Obligation. The obligations of nondisclosure
and confidentiality undertaken by each Party under this Agreement shall
continue for the Term of this Agreement and for a period of five (5) years
following the termination of this Agreement.
7.4 Limitations. The Parties agree and acknowledge that the provisions of
Sections 7.1 - 7.3 above shall not apply to any Information which (i) at the
time of disclosure or thereafter is in the public domain or becomes generally
known to the public through no fault of either Party; (ii) was available to the
receiving Party on a non-confidential basis from a source other than the
disclosing Party, providing that such source was not known by the receiving
Party to be bound by a confidentiality agreement with the disclosing Party;
(iii) is known to the receiving Party (as evidenced by its written records)
prior to receipt thereof from the disclosing Party; or (iv) is required by a
court of competent jurisdiction or by law to be disclosed by the receiving
Party, provided that the disclosing Party is given prior written notice of such
requirement.
7.5 Relief. The Parties hereby acknowledge that the disclosing Party will
be materially damaged and/or irreparably harmed by violation of the
confidentiality obligations contained in this Agreement, that the unauthorized
disclosure of Information to any third party may enable such party to compete
unfairly, directly or indirectly, with the business of the disclosing Party,
and that money damages will not be an adequate remedy.
Accordingly, in the event that either Party at any time gains knowledge of
any breach of the confidentiality of, or the misappropriation of, the
Information or gains knowledge of any other violation of the confidentiality
obligations under this Agreement, such Party shall promptly give notice thereof
to the other Party. In addition, each disclosing Party shall be entitled,
without limitation of any other remedies to which it may be entitled by law, to
injunctive relief, to specific performance of this Agreement, and to damages
(if and as appropriate) in the event of violation of this Article 7.
7.6 Return of Documents. In the event this Agreement is terminated, or
otherwise upon the request of the disclosing Party, each receiving Party shall
promptly return to the disclosing Party all documents, notes or other materials
obtained from such other Party containing any Information (including any copies
thereof and including all documents or materials which may reference or
incorporate such Information) or, at the other Party's direction, shall destroy
all such materials. Further, each Party will provide the other Party with a
statement, signed by a duly authorized officer, verifying that it has complied
with the terms of this Section 7.6.
ARTICLE 8
BREACH, DEFAULT AND TERMINATION
8.1 Termination for Cause. Either party may terminate this Agreement at
any time if the other defaults in the performance of any of its obligations
under this Agreement. In such event, the Party declaring the default shall
provide the other Party ("Recipient") with written notice thereof setting forth
the nature of the default, and:
(a) Recipient shall have ten (10) days from the date of the notice to cure
monetary defaults; provided however, in the event of more than two monetary
defaults by YoCream occurring in any calendar year, Dannon may terminate this
Agreement in such calendar year immediately without providing YoCream an
opportunity to cure such default; or
(b) Recipient shall have twenty (20) days from the date of the notice to
cure a non-monetary default (other than a default described in Section 8.1(c)),
provided, however, that if the nature of the alleged fault is such that it
cannot reasonably be cured within twenty (20) days, the Recipient may cure such
default by commencing in good faith to cure such default promptly after its
receipt of such written notice and prosecuting the cure of such default to
completion with diligence and continuity within a reasonable time thereafter; or
(c) in the event YoCream shall at any time materially breach or be in
material default of any of the provisions set forth in Section 3.1(a) - (j) of
this Agreement (a "Quality Default"), YoCream shall have ten (10) business days
from the date of Dannon's notice to YoCream of such Quality Default to cure it;
provided however, however, Dannon may terminate this Agreement immediately,
without providing YoCream an opportunity to cure, in the event of a third
Quality Default in any five (5) year term.
8.2 Termination in Event of Bankruptcy, etc. This Agreement shall
terminate automatically upon notice to a Party, in the event that with respect
to such Party: (a) there is an expropriation, confiscation or nationalization
by any government of a substantial portion of its assets or property; (b) it
becomes insolvent; (c) it seeks relief as a debtor under any applicable
bankruptcy law or other law relating to the liquidation or reorganization of
debtors or to the modification or alteration of the rights of creditors or
consents to or acquiesces in such relief; (d) it makes an assignment for the
benefit of, or enters into a composition with, its creditors; (e) it
appoints or consents to the appointment or receiver or other custodian for all
or a substantial part of its assets or property; (f) a petition seeking to have
it declared or adjudicated bankrupt or insolvent under any applicable
bankruptcy or similar law is not dismissed within sixty (60) days after filing;
(g) an order or judgment is entered by a court of competent jurisdiction for
relief against it in any case commenced under any bankruptcy or similar law or
finding it to be bankrupt or insolvent or ordering or approving its
liquidation, reorganization or any modification of the rights of its creditors
or appointing a receiver, guardian or other custodian for all or a substantial
part of its assets or property; or (h) it admits its inability to pay its debts
when due.
8.3 Termination without Cause. After this Agreement has been in effect
for a minimum of two (2) years, either Party may terminate this Agreement
without cause upon one hundred eighty (180) days' written notice to the other
Party.
8.4 Transfer of Controlling Interest in Either Party. If at any time
during the Term, including any extension, there shall occur, directly or
indirectly, a transfer of a controlling interest in either Party (other than
the transfer to an affiliate of such Party, and excluding a transfer of a
controlling interest in Groupe Danone unless the acquirer is a material
competitor to YoCream) through sale, stock transfer, merger, or otherwise, then
the other Party shall have the right to terminate this agreement upon thirty
(30) days' prior written notice.
8.5 No Waiver of Right to Terminate. Either Party's failure to exercise
or delay in exercising its right of termination hereunder for any one or more
causes shall not be deemed to prejudice its right of termination for such or
for any other subsequent cause. Termination or expiration of this Agreement for
any reason whatsoever shall not relieve the Parties from their respective
obligations accruing hereunder upon or prior to such termination or expiration.
8.6 Certain Obligations Upon Termination or Expiration. Upon any
expiration or termination of this Agreement:
(a) YoCream shall within one hundred eighty (180) days following the date
of such expiration or termination ("Transition Period") remove from, and by the
end of the Transition Period shall have ceased to use or display in any manner
the Co-Brand or the Mark in connection with the Product or any product,
package, label, tag, equipment, advertising or promotional medium of any kind
whatsoever, or any other document, device or medium; unless the Parties
expressly agree otherwise.
(b) No royalties shall be paid during the Transition Period in the event
the Agreement is terminated before the expiration of the initial five (5) year
term unless Dannon terminated the Agreement pursuant to Section 8.1 for a
material, uncured breach by YoCream of the Agreement which is either fraudulent
or in bad faith and in a circumstance where YoCream has deliberately attempted
to frustrate the spirit and intentions of the relationship established under
this Agreement. Dannon shall have the right to audit and/or inspect YoCream's
inventory of Product during the Transition Period.
8.7 Non-compete Restrictions Applicable Upon Termination or Expiration.
(a) Except in the event that Dannon terminates this Agreement pursuant
to Section 8.1 for a material, uncured, breach by YoCream of this Agreement
which is either fraudulent or in bad faith and in a circumstance where YoCream
has deliberately attempted to frustrate the spirit and intentions of the
relationship established under this Agreement, then for a period of three (3)
years after the termination or expiration of this Agreement, Dannon agrees not
to, directly or indirectly, manufacture, market or sell soft frozen yogurt in
the Territory nor license the Mark for such use by others in the Territory.
(b) Except in the event that YoCream terminates this Agreement pursuant
to Section 8.1 for a material, uncured, breach by Dannon of this Agreement
which is either fraudulent or in bad faith, and in a circumstance where Dannon
has deliberately attempted to frustrate the spirit and intentions of the
relationship established under this Agreement, then for a period of three (3)
years after the termination or expiration of this Agreement, YoCream agrees not
to directly or indirectly enter into another co-branding or licensing
relationship with a third party respecting use of a non-YoCream owned trademark
in conjunction with the YoCream Mark, excluding such use for a particular
flavor in connection with soft frozen yogurt in the Territory.
(c) Notwithstanding the foregoing, Dannon's respective obligations under
Section
8.7(a) shall not prohibit Dannon, or any of its parent, subsidiary or
affiliate companies from investing in or acquiring an entity which sells soft
frozen yogurt under trademarks other than the Mark, if:
(i) the investment or acquisition does not represent 5% or more of all
votes entitled to vote for election of directors of the subject entity or other
persons acting in a similar capacity, nor otherwise provides such right to
elect or cause others to elect such persons
or
(ii) the soft frozen yogurt business of the subject entity represents
less than 10% of the total gross sales of such entity across all product and/or
service lines it offers, and such entity has less than a 10% market share of
soft frozen yogurt in the Territory (taken as a whole, rather than market by
market), at the time of Dannon's (or such parent, subsidiary or affiliate's)
investment
and in any event
(iii) the Mark is not used in connection with the manufacturing,
marketing or sale of soft frozen yogurt by the subject entity during the period
of the non-compete.
In the event that the percentage of sales of entity, or market share, in
soft frozen yogurt exceed 10% at the time of investment or acquisition, Dannon
will not be in breach of this Section 8.7 if Dannon either (i) discontinues
soft frozen yogurt sales by such entity within a commercially reasonable period
of time from finalization of the acquisition or investment transaction; or (ii)
divests the soft frozen yogurt business (or the portion thereof in excess of
the 10% limitations set forth in section 8.7(c)ii) of such entity within a
commercially reasonable period of time (with commercial reasonableness
determined taking into account, among other things, obtaining a commercially
reasonable price for such business).
Provided further, however, that (c)(i) and (c)(ii) above shall not be used
to circumvent the intent of this provision, thus permitting Dannon to do
indirectly what it is prohibited by this Section 8.7 from doing directly.
(d) Any dispute which may arise between the parties with respect to this
Section 8.7 shall be resolved by private arbitration or another mutually agreed
form of private alternative dispute resolution ("ADR") before a panel of three
disinterested and legally qualified adjudicators, one of which is selected by
Dannon, one of which is selected by YoCream, and one of which is mutually
agreed upon. The dispute shall be resolved utilizing such rules of evidence
and procedures as are mutually agreed upon by the Parties in good faith. All
costs related to the selection of the adjudicators and the proceeding itself
shall be born one-half by Dannon and one-half by YoCream unless the
adjudicators otherwise direct as part of the dispute resolution. Attorney's
fees, and other costs associated with legal representation shall be borne by
each of the Parties, respectively. The Parties shall use their best,
commercially reasonable efforts to commence and resolve any dispute arising
pursuant to this Section 8.7 within sixty (60) days of a Party's written notice
of an intention to move to the formal ADR proceeding, provided that the Parties
shall use their best, commercially reasonable efforts in good faith to resolve
any dispute privately between them, to mutual satisfaction, in the first
instance.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 No Agency. Nothing in this Agreement shall create a partnership,
joint venture or establish the relationship of principal and agent or any other
relationship of a similar nature between the parties. In all transactions
regarding the Product or the Co-Brand, YoCream shall assume sole responsibility
for any commitments, obligations or representations made by it in connection
with the manufacture, sale, marketing, use or advertising thereof.
9.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, letters of intent,
negotiations and discussions, whether oral or written, of the Parties,
pertaining to such subject matter. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless it is set forth in a written
document signed by the Parties. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided in a written document signed by the
parties hereto.
9.3 Binding Nature of Agreement. Subject to Article 2 above, this
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and assigns.
9.4 Governing Law; Good Faith Efforts to Resolve Disputes. This
Agreement shall be construed in accordance with the internal laws of the State
of Oregon without regard to conflict of laws principles. In the event of a
controversy, claim or dispute ("Dispute") arising out of or relating to this
Agreement, the Parties shall endeavor, in good faith, to expeditiously
negotiate a mutually agreed resolution to that Dispute.
9.5 Headings. The headings and captions contained in this Agreement are
for convenience of reference only and in no way define, limit or describe the
scope or intent of this Agreement or in any way affect the interpretation of
this Agreement. Unless the context otherwise specifically requires, words
importing the singular include the plural and vice versa. The terms hereunder',
"hereto", "herein" and similar terms relate to this entire Agreement and not to
any particular paragraph or provision of this Agreement.
9.6 Voluntary Nature of Agreement. This Agreement has been entered into
after negotiation and review of its terms and conditions by parties under no
compulsion to execute and deliver a disadvantageous agreement. The Agreement
incorporates provisions, comments and suggestions proposed by both Parties. No
ambiguity or omission in this Agreement shall be construed or resolved against
either Party on the ground that this Agreement or any of its provisions was
drafted or proposed by the Party.
9.7 Notices. All notices or other communications which are required or
which may be given under the provisions of this Agreement shall be in writing
and shall be hand-delivered or mailed certified or registered mail, postage
prepaid, as follows:
To Dannon at with copy to:
The Dannon Company, Inc. Dannon Legal Department
120 White Plains Road 120 White Plains Road - 6th Floor
Tarrytown, NY 10591-5536 Tarrytown, NY 10591
Attention: Chief Financial Officer Attention: VP and General Counsel
Facsimile #: (914) 366-2805 Facsimile #: (914) 366-2865
To YoCream at: with copy to:
YoCream International, Inc. Hanna Strader
5858 N.E. 87th Avenue Attorneys at Law
Portland, OR 97220-1312 1300 SW Sixth Avenue, Suite 300
Attention: John N. Hanna, CEO Portland, Oregon 97201
Facsimile #: (503) 256-3976 Attention: Harry M. Hanna
Facsimile #: 503-273-2712
Either Party may change its address for notice by written notice to that effect
given to the other Party in accordance with this Section. All notices shall be
effective upon actual receipt at the address specified.
9.8 Remedies. Except where otherwise specifically referenced in this
Agreement as an exclusive remedy, the Parties hereto shall have all remedies
available at law or in equity, which remedies shall be cumulative and
nonexclusive, and in addition shall be entitled to such restraining orders,
injunctions, specific performance, protective orders or similar remedies as may
be appropriate.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Faxed signatures will be
accepted, provided the originally signed documents are delivered on the
following business day.
9.10 Initial Transition Period. YoCream currently markets soft frozen
yogurt product under the YoCream Mark in the Territory, and the Parties
recognize that a transition period is necessary to replace the soft frozen
yogurt sold under the YoCream Mark with Product sold under the Co-Brand. The
Parties agree that it is their mutual intent that the transition be completed
at the earliest possible date following execution of this Agreement (with 90
days to be the target date), with the Parties exercising their best efforts,
taking into account: (a) utilization of existing inventory of soft frozen
yogurt currently marketed under the YoCream Mark; (b) preparation of the
packaging and advertising material to market the Product; (c) effecting a
smooth transition to the Product so as not to adversely affect current
customers of soft frozen yogurt sold under the YoCream Mark; and (d) assuring
effective distribution of the Product.
IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound
thereby, have executed this Agreement by their duly authorized representatives
to be effective as of the day and year first above written.
THE DANNON COMPANY, INC. YOCREAM INTERNATIONAL INC.
By: By:
Signature: \s\ Rick Lees Signature: \s\ John N. Hanna
Printed Name: Printed Name:
Title: V.P. Finance/CFO Title: Chief Executive Officer
Date: September 6, 2001 Date: September 6, 2001
Exhibit A
to
Co-Brand License Agreement
Presentation of Co-Brand
Exhibit B
to
Co-Brand License Agreement
Dannon Logo
Exhibit C
to
Co-Brand License Agreement
YoCream Quality Requirements Manual