EXHIBIT 10.32
[***] – Indicates confidential information.
Confidential treatment requested under Rule 24b-2.
Portion omitted filed separately with the Securities
and Exchange Commission.
YOPLAIT MANUFACTURING AND
DISTRIBUTION LICENSE
AGREEMENT
Between the undersigned:
Société de Développements et
d’Innovations des Marchés Agricoles et Alimentaires
– SODIMA-Union de Coopératives Agricoles, previously
named Société de Diffusion de Marques – SODIMA - a
union of agricultural cooperatives under French law, with variable
capital, registered under N° 1274 N, with its registered
offices at 170bis, Boulevard du Montparnasse, Paris 14°,
France
hereinafter referred to as
“SODIMA”
on the one hand, and
General Mills, Inc. a Delaware corporation, with
principal Executives Offices at 9200 Wayzata Boulevard,
Minneapolis, Minnesota 55440, U.S.A.
hereinafter referred to as “the
Licensee” on the other hand.
For purposes of this Agreement, Licensee shall
include General Mills, Inc. and all of its more than 50% - owned or
controlled (directly or indirectly) domestic subsidiaries for which
General Mills, Inc. shall guarantee the full performance of the
terms and conditions of this Agreement.
WHEREAS:
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A.
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SODIMA has developed and may continue to develop
manufacturing processes, formulas and techniques, methods of
merchandising and promotion, distinctive shapes of containers and
packaging, and advertising and promotional materials (hereinafter
sometimes collectively referred to as the “SODIMA
know-how”), relating to [***] (“the Products, the
further definition and main types of which are listed in Exhibit A
hereto, which Exhibit forms an integral part of this Agreement),
which are produced and distributed under the “YOPLAIT”
Trademark, presently registered in the United States of
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America (“United States”) or other
trademarks pertaining to the YOPLAIT line registered or in the
process of registration in the United States for the Products
listed in Exhibit B hereto (collectively, the
“Trademarks” – Exhibit B forms an integral part
of this Agreement), which have attained a favorable reputation and
extensive goodwill outside the United States; and
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B.
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SODIMA proposes to grant to the Licensee and the
Licensee wishes to acquire, a license for the manufacture and
distribution of the Products (as hereinafter defined) using the
aforementioned SODIMA know-how, promotional information and
Trademarks, upon the terms and conditions hereinafter set forth, in
all of the United States and its territories and possessions,
excluding Puerto Rico (hereinafter called the
“Territory”).
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NOW, THEREFORE, on the basis of the foregoing
recitals and the mutual agreements hereinafter set forth, the
parties agree as follows:
I – Grant
of License
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I.1
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SODIMA hereby grants to the Licensee, on the terms
and conditions set forth in this Agreement, a License:
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a)
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to manufacture, in the Territory, and only in the
Territory, the Products under the Trademarks;
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b)
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to distribute and sell, in the Territory, and only
in the Territory, the Products under the Trademarks;
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c)
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to use, in the Territory, and only in the Territory,
for the foregoing purposes, the manufacturing processes, formulas
and techniques, methods of production, quality control, methods of
merchandising and promotion, the Trademarks, any copyrights and
patents owned by SODIMA in the United States, product names,
distinctive shapes of containers and packaging, advertising and
promotional materials, which have been or may hereafter be
developed, by or for SODIMA and made available to the Licensee in
accordance with the terms of this Agreement for use in connection
with the manufacture and sale of the Products.
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I.2
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The License granted pursuant hereto shall be an
exclusive license, even as to SODIMA, within the Territory so long
as this Agreement shall remain in effect. SODIMA also agrees that
so long as this Agreement shall remain in effect it will not grant
to any other party any license under the Trademarks for any product
and/or service in the Territory, which latter obligation shall
extend to any trademarks now in existence or any new or modified
trademarks of the Yoplait line which SODIMA may from time to time
adopt as provided for in paragraph VI.9 for the Products as well as
any trademarks in the Territory which incorporate “YO”
or “YOP” as an element thereof. SODIMA warrants that it
has the right to grant the licenses hereunder in accordance with
paragraphs I.1 and I.2 including the process, products improvements
and other know-how specified in paragraph I.1a), b) and c) and
other paragraphs originated and owned or to be originated by
SODIMA’s corporate or cooperative members and their corporate
or cooperative manufacturing members. SODIMA also warrants that
trademarks for the YOPLAIT line with respect to the Products
originated and owned or to be originated by SODIMA’s
corporate or cooperative members and their corporate or cooperative
manufacturing members will not be licensed by such members to any
third party in the Territory.
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II. - License Fee
and Royalties
As consideration for the initial disclosure of
know-how in accordance with paragraph III.1 and the initial
technical assistance in accordance with paragraphs III.2, III.3 and
III.4 by SODIMA, the Licensee shall pay SODIMA [***] United States
dollars as follows:
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Such payments are to be made in Paris in such manner
as SODIMA shall specify. The effective date of this Agreement means
the date when Licensee acquires (by purchase or otherwise) the last
of the rights in connection with the Products previously granted by
SODIMA within parts of the Territory to Summit Foods Company and
Michigan Cottage Cheese, Inc. For purposes of this definition of
effective date, acquire shall include any reversion of such
previously granted rights to SODIMA. Upon being acquired, such
rights shall then be cancelled and superseded by the rights granted
herein and the parties agree that this Agreement shall become
effective only if all of the said previously granted rights are
acquired as aforesaid within a period of three (3) months after the
date of execution of this Agreement; provided, however, that if
Licensee is diligently attempting to complete the acquisition of
said previously granted rights SODIMA agrees to extend such time
period for an additional three (3) months. SODIMA agrees that it
will not withhold approval of the assignment or transfer to
Licensee of the rights previously granted to Summit Foods Company
and Michigan Cottage Cheese, and SODIMA also warrants that except
for the said grants, no rights under the licensed subject matter
herein have been granted to any other party in the Territory.
SODIMA agrees that upon the effective date of this Agreement the
License fee payments to be made by Licensee under this paragraph
II.1 supersede and cancel any such license (or franchise) fee
payment obligation of Summit Foods Company under agreements between
SODIMA and Summit Foods Company.
As further consideration for this Agreement,
Licensee agrees to pay to SODIMA a royalty in United States dollars
on the Licensee’s Gross Revenues as hereinafter defined from
sales of the Products, which will be calculated as
follows:
[***]. Thereafter, the royalties shall be calculated
in accordance with the following schedule on an annualized fiscal
year basis:
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Gross Revenues Per Fiscal Year
In United States Dollars
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Royalty Rate Percent (%) of Gross
Revenues
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[***]
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[***]
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Fiscal year shall mean the period from June 1 in any
one calendar year to May 31 in the next calendar year. The first
such full fiscal year shall commence on June 1, 1978. Fiscal
quarter shall mean the three calendar month periods commencing on
June 1, September 1, December 1 and March 1 of each fiscal
year.
The royalty shall be payable to SODIMA in Paris
within 30 days after the end of each fiscal quarter during the term
of the Agreement.
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II.3
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“Gross Revenues” means the gross sales
price invoiced by Licensee to purchasers of the Products minus any
credits or allowances given as a result of return of such Products,
any quantity discounts allowed (but not promotional allowances),
and any applicable sales or use taxes.
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II.4
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The Licensee shall furnish to SODIMA monthly
statistics reflecting the Licensee’s total sales of the
Products in units, and quarterly reports of Gross Revenues. Such
statistics shall be furnished not later than twenty (20) days after
the end of the calendar month in which such sales were made and
such reports shall be furnished not later than thirty (30) days
after the end of the fiscal quarter in which such sales were
made.
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The Licensee shall keep true and accurate accounts
and records of all sales of the Products, and such accounts and
records shall be available for inspection by SODIMA, its authorized
agents or representatives, at all times during normal business
hours, provided that such SODIMA agents or representatives shall
first have to be approved by Licensee (such approval not the be
unreasonably withheld).
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II.5
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In the event Licensee is required by the United
States Government or requested by SODIMA to pay on SODIMA’s
behalf any withholding taxes imposed by the United States
governmental authorities on royalty income to SODIMA hereunder,
Licensee shall deduct the amounts so paid from the royalties due to
SODIMA and Licensee shall provide SODIMA with the appropriate
receipt for the payments of such taxes. In the event of a
significant change in the United States tax laws affecting royalty
income to SODIMA to SODIMA’s detriment, the parties shall
renegotiate in good faith the royalty rates provided for herein;
provided, however, that any such renegotiated royalty rates shall
not have a material adverse effect on either of the
parties.
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SODIMA agrees to be responsible for any other taxes
which may become due and payable by SODIMA in regard to any sums
received hereunder by SODIMA and accordingly, SODIMA indemnifies
and holds Licensee harmless from the payment of any such
taxes.
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II.6
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To the extent permitted by applicable law, any
amount not paid when due by the Licensee hereunder shall bear
interest at the official discount rate of the Bank of France in
effect on the date payment was due.
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In the event that, by reason of applicable law or
regulations relating to exchange controls, the Licensee shall be
unable to pay the amounts due under Article II herein in France,
said amounts shall be paid to an account designated by SODIMA with
a bank in the United States and shall constitute payment of such
amounts. The Licensee shall instruct such bank to advise SODIMA
promptly of the credit.
III – Undertakings of SODIMA
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III.1
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Throughout the term of this Agreement, and subject
to the provisions of paragraph III.4 hereof, SODIMA shall furnish
and communicate to Licensee the SODIMA know-how and requisite
information with respect to the manufacturing processes, formulas,
techniques and merchandising, and promotion methods for the
Products covered by the License granted hereunder.
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III.2
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Subject to the provisions of paragraph III.4 hereof,
SODIMA shall furnish all technical assistance to the Licensee
necessary for manufacture of the Products including:
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a)
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assistance in the selection and installation of
equipment and machinery;
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b)
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assistance in the planning, start-up, adjustment and
control of manufacturing operations;
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c)
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assistance in the determination of initial
quantities and available sources of supply for raw materials and
packaging materials;
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d)
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assistance in the establishment and implementation
of quality control with respect to raw materials, packaging and
finished products;
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e)
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assistance in the development of improved
productivity and profitability;
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f)
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assistance in the development of the Products and in
their adaptation to applicable laws and regulations and to consumer
tastes;
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g)
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analysis of personnel functions, definition of
personnel profiles and training of the head of manufacturing
operations of the Licensee; and
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h)
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after the commencement of operations, continuing
assistance in connection with quality control, the training of key
personnel, and the procurement of raw materials.
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III.3
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Subject to the provisions of paragraph III.4 hereof,
throughout the term of this Agreement, SODIMA shall furnish
technical assistance to the Licensee in connection with the
merchandising and promotion of the Products in the Territory
including the following:
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a)
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assistance in the development and application of
sales techniques;
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b)
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assistance in preparing and conducting market
studies;
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c)
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assistance in the development of plans for
advertising, promotion and sales operations and organization of
distribution and delivery systems;
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d)
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assistance in the selection and investigation of
sales outlets;
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e)
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assistance in the analysis of and the determination
of such adjustments as may be required;
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f)
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a study of personnel functions, the definition of
personnel profiles and the training of the head of sales operations
of the Licensee; and
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g)
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continuing assistance in the merchandising and
promotion techniques after the commencement of
production.
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III.4
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The assistance to be provided by SODIMA pursuant to
paragraphs III.1, III.2 and III.3 hereof shall be carried out at
such time and in such manner as SODIMA shall reasonably determine
and during the start-up period, such assistance shall be provided
as necessary to meet the needs of Licensee in achieving the
start-up of production and marketing of the Products under the
schedule of Exhibit C (which Exhibit forms an integral part of this
Agreement).
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SODIMA shall assign two fully qualified technical
representatives (one in the production field and one in the
marketing field) to coordinate the providing of assistance to the
Licensee in achieving the start-up production and marketing of the
Products under the schedule of Exhibit C hereto. These
representatives will be made available according to the judgment of
SODIMA to meet all reasonable requests of the Licensee in achieving
such start-up of production and marketing provided however, that
such technical representatives will devote 80% of their working
time (holidays deducted) to such assistance, unless the parties
from time to time mutually agree in good faith that some lesser %
is needed by Licensee or unless SODIMA is prevented for unforeseen
reasons from supplying the full 80%.
Such representatives shall respectively have a
background in the production and marketing of the Products and
shall be reasonably fluent in the English language. SODIMA shall
also provide such other necessary assistance by its qualified
personnel during the start-up period as shall be reasonably
determined by mutual agreement between SODIMA and Licensee to be
necessary
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to meet the needs of Licensee in achieving the
start-up of production and marketing of the Products under the
schedule of Exhibit C hereto.
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III.5
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SODIMA shall bear the expenses of furnishing the
assistance to be provided by it pursuant to paragraphs III.1,
III.2, and III.3 and III.4 hereof insofar as they relate to the
cost (including salary, travel and temporary living costs) of
qualified personnel of SODIMA; the cost of documentation and
written materials furnished by SODIMA; and the cost of any raw
materials and packaging of the Products consumed or used in
reasonable quantities in connection with such technical assistance
in any of the pilot plants of SODIMA and its affiliated companies.
All other costs of such technical assistance, including salary,
travel and temporary living costs of the Licensee’s
employees, and the use of packagings, materials and equipment at
the Licensee’s plant, shall be borne by the
Licensee.
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III.6
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SODIMA shall provide further assistance in
connection with the License granted hereunder from time to time
upon the request of the Licensee, at the times and to the extent
that SODIMA shall reasonably determine to be
practicable.
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For this purpose, the Licensee shall bear the cost
of such extra assistance which will be based on a mutually agreed
upon cost per day. In addition, such expenses as travel and
temporary living costs of personnel providing the extra assistance
shall be borne by the Licensee.
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III.7
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Subject to the other provisions in this Agreement
including the provisions of paragraph VI.3, nothing contained in
this Agreement shall be deemed to obligate SODIMA to furnish to the
Licensee any advice, technical assistance or information of any
kind whatsoever, other than that which SODIMA shall reasonably be
able to furnish on the basis of its know-how in the manufacture and
sale of Products, and SODIMA shall not be liable to the Licensee
for any loss, damage or expense of any nature suffered or incurred
by the Licensee as a result or consequence of advice,
technical
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assistance or information furnished to it by SODIMA
in good faith and without serious negligence to be proved by
Licensee.
IV – Undertakings of the Licensee
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IV.1
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The Licensee accepts the License granted herein on
the terms and conditions set forth in this Agreement and
acknowledges that the rights and privileges granted hereunder are
to be used only to the extent, for the purposes and in the manner
herein set forth.
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The Licensee undertakes:
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a)
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To commence production and marketing of the Products
in the Territory as soon as reasonably possible and in any event,
to commence such production and marketing of the Products in the
Territory at least in accordance with the schedule annexed hereto
as Exhibit C, unless Licensee demonstrates diligence in attempting
to follow the schedule but for valid business reasons has been
unable to adhere to the same, such reasons including economic
conditions, competitive situation, strategic changes, unforeseen
events and the like. Licensee will keep SODIMA appraised of the
status of plans in regard to the schedule.
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b)
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To promote sales of, and to use its best efforts to
increase demand for, the Products in the Territory by making the
Products available and be positioned as quality
products.
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c)
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To keep SODIMA informed on a regular and continuing
basis of the Licensee’s activities in manufacturing and
marketing the Products.
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IV.2
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The Licensee will not engage directly or indirectly
in any activity which constitutes an infringement, appropriation,
copying or imitation of any of the distinctive packaging,
Trademarks or trade names provided by SODIMA hereunder or which
otherwise injures the value of SODIMA’s interest therein. For
a period of five years from the effective date of the Agreement,
the Licensee will not without the prior written consent of SODIMA,
manufacture, distribute or sell products identical or substantially
similar to the Products,
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provided that direct sales by Licensee’s
restaurants to their customers or direct sales through
Licensee’s vending machines are excluded from the latter
commitment. [***].
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IV.3
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The Licensee undertakes to comply at all times with
all applicable laws and regulations in connection with the
manufacture, distribution, sale and promotion of the Products and
to be responsible in case of failure to comply with such laws and
regulations for SODIMA’s assistance (see paragraph
III.2).
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IV.4
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The Licensee shall keep confidential and shall not
cause or permit the disclosure of the processes, formulas,
techniques, and methods, and customer and marketing information,
furnished to it by SODIMA to any person other than those whose
duties require possession of such information.
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Said confidentiality requirement shall not apply to
any information which Licensee can show (a) was in the possession
of Licensee prior to receipt of any disclosure to it pursuant to
this Agreement and not heretofore directly or indirectly derived
from SODIMA, or (b) is or becomes without disclosure by Licensee
part of the public knowledge or literature, or (c) otherwise
lawfully becomes available to Licensee without restriction or
disclosure by Licensee, from sources other than SODIMA, which
sources did not acquire such information directly from
SODIMA.
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IV.5
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The Licensee shall make every reasonable effort to
employ as key people in connection with the manufacture and sale of
the Products personnel fully qualified to perform the
responsibilities of their positions. SODIMA will assist Licensee in
this regard by furnishing advice as to the qualifications of such
key personnel.
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The Licensee undertakes to send at its own expense
its key people to one YOPLAIT plant selected by SODIMA during a
period of time selected by mutual consent in the event that both
Licensee’s and SODIMA’s technical representatives deem
it reasonably necessary.
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IV.6
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The choice of packaging, graphics and designs on,
with respect to the Products must be provided to SODIMA in the
United States, or if so instructed to SODIMA in Paris for approval
(which approval shall not be unreasonably withheld) before any
production or distribution of the Products hereunder. With respect
to minor changes in such packaging, graphics and designs, SODIMA
will have three (3) business days after the reception of such
materials in the United States to give its approval or refusal
(which approval shall not be unreasonably withheld). If SODIMA
shall not have responded within this three-day period,
SODIMA’s approval will be deemed to have been given for the
submitted materials.
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V – Improvements and New Products
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V.1
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The term “new product or process” shall
mean any product or process (including packaging and equipment)
within the scope of the Products and the SODIMA know-how licensed
hereunder, the development of which would not be obvious to a
person, skilled in the art, who is thoroughly familiar with
SODIMA’s techniques. In regard to the formulas of new
products, it shall be clearly demonstrable that the same have
peculiarity and originality over the SODIMA formulas through the
inventive efforts of the person or persons developing such new
product formulas where such person or persons shall have used the
SODIMA formulas as a starting point, provided that any such new
product or process developed by Licensee shall not be known by
SODIMA-members (hereinafter defined) or shall not have already been
developed by SODIMA-members at the time Licensee made such new
product or process, the burden of proof in this respect always
residing in SODIMA-members. Licensee shall have the burden of
proving when such new product or process was made by
Licensee.
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For purposes of this Agreement, the term
“obvious” shall be construed according to the Patent
Laws of the United States.
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V.2
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Any innovation or change which does not meet the
requirements of paragraph V.1 for new product or process shall be
termed an “improvement” and therefore shall not be
deemed a new product or process for purposes of this Agreement for
example any product within the scope of the Products licensed
hereunder, of which the profitability, the quality or
characteristics, including the form of presentation and
conservation of the product (liquid, gaseous, solid, ice, etc.)
shall merely have been improved or modified, whether by
modification of the percentage of ingredients, or by the mere
addition or deletion of any element, shall not be deemed a
“new product”, regardless of the process or means
used.
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V.3
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SODIMA shall grant to the Licensee all the rights
and privileges described in this Agreement with respect to any of
its new products or processes and to each improvement in any of the
Products made or developed by SODIMA.
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V.4
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SODIMA shall have the right, from time to time upon
reasonable written notice to the Licensee, to request Licensee to
add products within the scope of the Products already developed by
SODIMA or which SODIMA may develop during the course of this
Agreement to the Products. Licensee shall have the right, however,
to decline to produce such products if Licensee deems it
economically inadvisable to do so. The parties may, however, agree
to conduct test marketing for any such product and if such test
marketing demonstrates sufficient market potential including
economic feasibility, Licensee cannot decline to produce such
product. Expenses for any such test marketing shall be shared
equally between Licensee and SODIMA.
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V.5
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SODIMA shall provide technical assistance to the
Licensee in the manner contemplated in Article III of this
Agreement with respect to all such improvements and new products
and processes.
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V.6
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a)
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The Licensee shall promptly communicate to SODIMA
and hereby grants to SODIMA and its cooperative and corporate
members and their cooperative and corporate manufacturing members
(hereafter SODIMA members) the non-exclusive, irrevocable, right to
use, manufacture and sell, including the right to grant sublicenses
without any restriction as to Territory (with the exception of
Licensee’s Territory) during the term of this Agreement and
subject to the provisions of paragraphs V.7 (a) and V.7 (d)) or
field of application within the scope of the Products and SODIMA
know-how licensed hereunder, all new products and processes, as
well as all improvements which the Licensee may develop in any of
the Products or in connection with the manufacturing and
distribution thereof. The rights granted hereunder in respect of
improvements shall be royalty-free. The rights granted hereunder to
SODIMA members in respect to new products and processes shall be
royalty-free provided however that such new products are
manufactured in France and that such new processes are carried out
in France.
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b)
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Licensee agrees that the right to grant sublicenses
under Licensee’s new products and processes as defined in
paragraphs V.1 and V.2 hereinabove to licensees or franchisees of
SODIMA-members resides in SODIMA-members and Licensee will not
undertake to grant licenses under Licensee’s new products and
processes to such licensees and franchisees of SODIMA-members.
SODIMA-members agree that the sublicensing of the new products and
processes of Licensee to the licensees and franchisees of
SODIMA-members is conditioned on the receiving of the prior
agreement or approval as set forth herein below of
Licensee.
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With respect to receiving the prior agreement of
Licensee, SODIMA members and Licensee agree to negotiate in good
faith concerning the payment of a lump-sum for the use of
Licensee’s new products or processes by any or all of the
licensees or franchisees of SODIMA-members; if any such agreement
is consumated, then SODIMA-members will not be required to share
any further royalties, lump-sum payments or both with Licensee,
from any of its licensees or franchisees for the new product or
process covered by such agreement. With respect to receiving the
prior approval of Licensee for a sublicense for the new products or
processes of Licensee, SODIMA-members agree to provide Licensee in
writing with the names of the proposed licensees or franchisees to
be sublicensed and the countries in which such sublicense would be
effective and Licensee shall have the right to approve or
disapprove any such sublicense, provided however, that the
Licensee’s approval will not be unreasonably withheld. On
further regard to such sublicenses, SODIMA-members agree to use
their best efforts to obtain from the licensees and franchisees of
SODIMA-members royalties or lump-sum payments or both under any
such sublicense consistent with the royalties and lump-sum payments
received or being received by SODIMA-members under existing
agreements with the respective licensees or franchisees. It is
hereby agreed and understood that SODIMA-members shall at their
absolute discretion have the right to determine whether they will
use the rights granted under this paragraph V.6, particularly as
regards the right to grant sublicenses for the manufacture, sale
and use of new products and processes as defined in paragraph
V.1.
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V.7.
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a)
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Any process or product developed or improved by the
Licensee within the scope of the Products and the SODIMA know-how
licensed hereunder, except new products or processes described in
paragraphs V.1 and V.2 hereinabove, shall be subject to the terms
and conditions of this Agreement in the same manner and to the same
extent as any other process and Products under this
Agreement.
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b)
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New products and processes described in paragraphs
V.1 and V.2 developed by the Licensee shall belong to the Licensee
and the Licensee shall be free to patent them, subject to the
provisions of paragraphs IV.2, IV.4, V.6, V.7 (a) and
VI.1.
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c)
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New products and processes described in paragraphs
V.1 and V.2 developed by the Licensee may be marketed freely by the
Licensee subject to the provisions of paragraphs IV.2, IV.4, V.6,
V.7 (a) and VI.1. The conditions for any use of the Trademarks and
the availability of any SODIMA technical assistance, with regard to
any new products described in this subparagraph V.7 (c), shall be
negotiated in good faith between the parties.
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d)
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To the extent that SODIMA-members receive royalties
or lump-sum payments or both under sublicenses for new products and
processes granted in accordance with paragraph V.6 (b), Licensee
shall be entitled to share in said royalties and lump-sum payments,
the share of which will be negotiated in good faith between SODIMA
and Licensee, provided, however, that in the absence of factors
indicating some other division, Licensee shall receive one-half
(1/2) of such royalties and/or lump-sum payments. No royalties
shall be payable by SODIMA-members to Licensee under any such
sublicense after expiration of the patent covering such new product
or process.
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V.8.
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SODIMA-members shall keep confidential and shall
require its or their sublicensees to keep confidential the new
products and processes and improvements of Licensee furnished to
them hereunder by Licensee (hereinafter the “Licensee
information”). Additionally, SODIMA-members and said
sublicensees shall not cause or permit the disclosure of the
Licensee information to any person other than those whose duties
required possession of such information.
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Said confidentiality requirement shall not apply to
any information which SODIMA-members and its or their sublicensees
(hereinafter collectively “SODIMA-sublicensees”) can
show (a) was in the possession of SODIMA-sublicensees prior to
receipt of the disclosure of the Licensee information to them
hereinunder, or (b) is or becomes without disclosure by
SODIMA-sublicensees part of the public knowledge or literature, or
(c) becomes available to SODIMA-sublicensees without restriction or
disclosure by SODIMA-sublicensees, from sources other than
Licensee, which sources did not acquire such information directly
from Licensee.
- 16 -
The confidentiality provisions of this paragraph V.8
and paragraph IV.4 shall apply while this Agreement remains in
effect and for a period of five (5) years after termination
hereof.
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V.9
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Licensee agrees that SODIMA-members and their
licensees or franchisees may use Licensee’s promotional ideas
and creative ideas in advertising, provided that Licensee has no
valid business or legal reason for withholding the use of same.
SODIMA-members and their licensees or franchisees shall not have
the right to use Licensee’s specific advertising and
promotional materials and copy unless Licensee gives its prior
written consent for such use. Extra copies of Licensee’s
advertisements and promotional materials will be provided at cost
to SODIMA-members at their request, provided that such copies are
available.
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IV- Industrial
Property
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VI.1
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The Licensee and SODIMA shall use their best efforts
to protect and preserve the exclusive and distinctive character of
any of the Products, processes, formulas, techniques, methods,
patents, design registrations, copyrights, Trademarks, or similar
rights covered by this Agreement.
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The Licensee shall inform SODIMA within a reasonable
period of time of any applications for patents, design
registrations, copyrights, trademarks, or similar rights made by
it, with respect to any of the Products, processes, formulas,
techniques and methods or any design, advertising material, name,
mark or symbol obtained by it from SODIMA or used by it in
connection with its business activities pursuant to this Agreement,
it being understood that the Licensee shall have to obtain the
prior written consent of SODIMA where a patent specification or
similar title to be obtained includes proprietary, confidential
information given to the Licensee by SODIMA.
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VI.2
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The Licensee shall promptly notify SODIMA in writing
of:
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a)
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Any suit or proceeding brought or threatened against
the Licensee or SODIMA in the Territory claiming infringement of
another’s trademark, tradename, patent, design patent,
copyright or other similar right, and
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b)
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any infringement or other unauthorized use in the
Territory by any other person of any of the Trademarks or any
tradename,
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- 17 -
patent, design patent, copyright or other similar
right of SODIMA licensed hereunder.
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VI.3
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Subject to paragraph VI.2 (a) in the event that
Licensee is held liable as an infringer of a third party’s
trademark, copyright or patent by reason of the use of the
Trademarks or SODIMA’s promotional material or the SODIMA
know-how as licensed herein, SODIMA agrees to indemnify Licensee
against and save Licensee harmless from the damages payable by
Licensee to such third party pursuant to a voluntary settlement or
a judgment or arbitration award in such third party’s favor
and provided that whether held liable or not SODIMA shall bear, or
reimburse Licensee for,all legal and counsel fees and expenses (not
including house counsel or internal costs).
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VI.4
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SODIMA shall have the option to undertake and
conduct the defense of any suit so brought as covered by the
provisions of paragraph VI.3 and no settlement of any such claim or
suit is to be made without the prior written consent of both SODIMA
and Licensee, which consent will not be unreasonably
withheld.
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VI.5
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Licensee shall, upon SODIMA’s request and
expense, protect SODIMA’s rights as set forth in paragraph
VI.2 (b) in the Territory against any infringement or other
unauthorized use, by instituting and prosecuting judicial
proceedings or otherwise, as appropriate.
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SODIMA shall be entitled, at its request, and at its
own expense, to conduct any such proceedings. Should Licensee
request SODIMA to initiate, or to authorize Licensee to initiate at
SODIMA’s expense, legal proceedings to protect SODIMA’s
rights in the Territory against infringement or any other
unauthorized use, SODIMA may not unreasonably withhold such action
or authorization, provided that should SODIMA authorize Licensee to
conduct such proceedings, SODIMA shall be entitled to participate
in any such proceedings.
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VI.6
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The proceeds from any successful infringement suits
or proceedings in connection with matters covered in paragraph VI.5
shall be shared equally as between SODIMA and Licensee after the
deduction therefrom of any and all expenses incurred by SODIMA and
Licensee in connection therewith and provided, further, that
neither Licensee nor SODIMA shall settle any claims in connection
with the matter covered in paragraph VI.5 without the prior written
consent of the other party, which
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- 18 -
consent will not be unreasonably
withheld.
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VI.7
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a)
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SODIMA warrants that the Trademarks granted to the
Licensee pursuant hereto are SODIMA’s property and that
SODIMA has the right to grant the licenses provided for herein and
that the YOPLAIT Trademark is presently in effect in the United
States. SODIMA undertakes to do its best to maintain in effect the
YOPLAIT Trademark in the United States during the term of the
present Agreement as well as the other Trademarks pertaining to the
YOPLAIT line which are now registered or will subsequently be
registered in the United States for the Products, provided however,
that such Trademarks are used by the Licensee.
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b)
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Should any of the Trademarks, the YOPLAIT Trademark
excepted, be declared invalid or cancelled by applicable law or as
a result of any action initiated by third parties or otherwise,
Licensee agrees that such declaration shall not effect this
Agreement or any provisions therein and Licensee shall not be
entitled to any compensation or damages or reimbursement in regard
to any sums already paid or to be paid to SODIMA.
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However, should the YOPLAIT Trademark be declared
invalid or cancelled by applicable law or as a result of any action
initiated by third parties or otherwise, the parties will
renegotiate in good faith to lower the royalty rate, provided
hereunder with respect exclusively to the Products sold under the
YOPLAIT Trademark, it being understood that Licensee shall not be
entitled to any compensation or damages or reimbursement in regard
to any sums already paid or to be paid to SODIMA.
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VI.8
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The Licensee shall not use any of the Trademarks in
connection with any other trademark or tradename not owned by
SODIMA (with the exception of the business name of Licensee) and
shall not use any of the Trademarks as corporate titles.
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VI.9
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Any new trademarks or modified trademarks pertaining
to the YOPLAIT Line which SODIMA shall adopt for use in connection
with the Products shall be offered to Licensee by mutual consent
(which consent will not
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- 19 -
be unreasonably withheld) and all such new or
modified trademarks shall be deemed to be licensed hereunder and
subject to all the provisions hereof, it being understood that
SODIMA shall have the exclusive right to register such new
trademarks and modified trademarks in the United States.
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VI.10
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All uses of the Trademarks by the Licensee shall
inure to the benefit of SODIMA, its successors and
assigns.
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VI.11
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SODIMA shall promptly notify Licensee in writing of
any suits or proceeding brought or threatened against SODIMA in the
Territory claiming misuse by Licensee of the Trademarks or
SODIMA’s patents or copyrights. In the event that SODIMA is
held liable in any such suit, Licensee agrees to indemnify SODIMA
against and save SODIMA harmless from the damages payable by SODIMA
to such third party pursuant to a voluntary settlement or a
judgment or arbitration award in such third party’s favor and
provided that whether held liable or not Licensee shall bear, or
reimburse SODIMA for, all legal and counsel fees and expenses (not
including house counsel or internal costs). Licensee shall have the
option to undertake and conduct the defense of any suit so brought
as covered by the provisions of this paragraph VI.11 and no
settlement of any such claim or suit is to be made without the
prior written consent of both Licensee and SODIMA which consent
will not be unreasonably withheld.
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VII – Advertising
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VII.1
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The Licensee shall be entitled to the use in the
promotion, sale and distribution of the Products in the Territory,
of all written, visual or audiovisual promotional material
furnished to it by or on behalf of SODIMA for that purpose,
including photoplates, type, bromide papers, matrices, films and
other materials intended for the reproduction of the Trademarks on
any supporting material.
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However, Licensee will bear the expenses due to any
alterations or additions to the materials described above which may
be necessary for their use by Licensee.
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All uses made by the Licensee of such materials
shall conform to SODIMA’s “YOPLAIT TRADEMARK IMAGE
– GRAPHICS AND TRADEMARKS STANDARDS” (a copy of which
is attached hereto as Exhibit D, which Exhibit forms an integral
part of this Agreement), provided that such IMAGE AND STANDARDS are
not in conflict with United States laws and regulations. All such
materials shall remain the property of SODIMA and shall be returned
to SODIMA upon its request by registered, insured mail, return
receipt requested. The Licensee shall be responsible for any loss,
theft, or damage to or deterioration of such materials given to it
by SODIMA and shall reimburse SODIMA for all expenses which SODIMA
may incur, in France or elsewhere, in recovering, reconstituting or
replacing such material.
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VII.2
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a)
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SODIMA shall give the Licensee its advice on the
selection of the advertising agency for the Products and as to the
quality of the advertising and promotional material for the
Products.
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b)
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Licensee shall not engage in any advertising or
promotional activities detrimental or counter to the general policy
of SODIMA, defined as the freshness, natural quality and image of
the Products, provided that such policy is not counter to the laws
and regulations of the United States.
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VIII – Working Procedures
Every six months, there will be a meeting at the
place of business of Licensee between SODIMA and Licensee in order
to discuss the major points regarding the carrying out of the
business under this Agreement. SODIMA shall keep minutes of such
working meeting between the parties, and shall send a copy of such
minutes to the Licensee, who shall be deemed to have approve such
minutes unless it shall have notified SODIMA in writing of its
exception within fifteen (15) days after receipt by it of such
copy.
- 21 -
IX – Quality Control
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IX.1
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It is recognized and understood by the parties
hereto that for the purpose of protecting their mutual interest in
their good will and reputation in the United States and abroad, of
the business, the Products, the Trademarks and the methods,
processes, formulas and techniques and similar rights covered by
this Agreement, as well as for the protection of all other persons
who may be or become franchisees or licensees of SODIMA with
respect to the Products, or any of them, substantial uniformity in
the quality and nature of the Products and in operations under this
License, and observance of appropriate standards and rules, are
necessary. The Licensee therefore undertakes:
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a)
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That in the manufacture of the Products it will
procure and use cultures from SODIMA or from sources approved in
writing by SODIMA, and such approval shall not be unreasonably
withheld;
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b)
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That in the manufacture of the Products, it will use
only materials, ingredients, packaging and accessories of such
quality, designing, standard and composition as are currently
approved in writing by SODIMA (so long as they are competitive as
to cost and quality) and will comply with the standards of
manufacture, processing, packaging and distribution which may be
reasonably prescribed by SODIMA from time to time.
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However, SODIMA, on Licensee’s request may
grant in writing some particular conditions to take into
consideration the uniqueness of the United States
market.
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c)
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That SODIMA shall have the right to visit the
manufacturing plant and control laboratory for the Products of the
Licensee from time to time, at all reasonable business hours, to
inspect the premises and equipment of the Licensee, to inspect,
test and obtain samples of the Products and raw materials,
ingredients and packaging materials relating thereto, to observe
the manner of operation of the Licensee’s establishment for
the production of the Products, and to cause its duly authorized
agents or representatives to carry out any of the foregoing. The
cost of a reasonable number of such samples shall be borne by
Licensee, provided that said samples are needed by SODIMA to
determine whether or not the Products produced
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- 22 -
by Licensee meet the quality standards set forth
herein and provided further that SODIMA agrees to report to
Licensee results of inspections and analyses of said samples
including the giving of advice to Licensee on any suggested changes
to be made in the Products. Licensee may agree to provide to SODIMA
samples in addition to the above or larger quantities of the
Products at SODIMA’s expense.
X – Third
Party Liability
Except as to matters represented, warranted or to be
performed by SODIMA under this Agreement including the provisions
of paragraphs III.7 and VI.3, the Licensee agrees to indemnify
SODIMA, hold SODIMA harmless and protect SODIMA from and against
any liability, expenses, damage or loss arising in connection with
or resulting from the Licensee’s operations pursuant to this
Agreement. The Licensee shall, at its expense, procure and maintain
liability insurance to be written by a reputable insurance company
or companies, with coverage of not less than U.S. dollars 500,000
combined personal injury and property damage arising out of any one
incident including a broad form vendors endorsement. The provisions
of the first sentence of this Section X shall survive the
termination of this Agreement.
XI – Assignment and Transfer
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XI.1
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The Licensee shall not have any right to sublicense
its rights hereunder, nor to assign, transfer or otherwise dispose
of the License or any other right granted to it pursuant to this
Agreement without the prior written consent of SODIMA; provided,
however, that Licensee shall have the right to assign its rights
hereunder with the approval of SODIMA (which approval will not be
unreasonably withheld), to the purchaser of its entire business
involved in the performance of this Agreement.
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XI.2
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SODIMA may assign this Agreement, or any portion
thereof, or delegate all or any part of its obligations hereunder
to any company which it controls, and to any company with which it
may merge or consolidate or to which it may sell or transfer all or
substantially all of its assets,
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- 23 -
provided that such company shall assume and agree to
perform the obligations of SODIMA hereunder and, provided further,
that should such assignment or transfer be made to a competitor of
Licensee in the United States, Licensee is relieved of the
obligation to supply new products and processes and improvements
covered by this Agreement to said competitor.
XII – Term
and Termination
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XII.1
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This Agreement is entered into for an initial period
of fifteen (15) years from the effective date of this Agreement and
shall thereafter be renewed automatically for successive ten-year
periods, in the absence of written notice to the contrary by
Licensee to SODIMA not less than twelve (12) months prior to the
expiration of such initial period or any such subsequent period.
The fifteen (15) year initial period is dictated by the large
capital investment expected to be made by Licensee for the
manufacture and sale of the Products. Notwithstanding the
foregoing:
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a)
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Either party may terminate this Agreement in the
event of material breach by the other, provided that it shall first
have given to such other party one hundred eighty (180) days
written notice of such breach and such other party shall have
failed to cure such breach within said period, or if said breach is
incurable, shall have failed to take all reasonable steps within
said period necessary to prevent a recurrence of said breach, it
being understood and agreed, however, that if there is a dispute as
to the occurrence or existence of such a material breach, the time
within which such other party must cure such breach or take such
steps shall be extended until ninety (90) days after final
resolution of such dispute by arbitration; and
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b)
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SODIMA shall be entitled to terminate this Agreement
as of any date by notice in writing to the Licensee in the event
that (1) the Licensee shall attempt to transfer or assign this
Agreement or any right thereunder in violation of paragraph XI.1
hereof or
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- 24 -
(2) the Licensee shall be subsequently controlled,
directly or indirectly, by a competitor of SODIMA in
France.
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c)
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Either party hereto shall be entitled to terminate
this Agreement as of any date by notice in writing to the other
party in the event t
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