EXHIBIT 10.37
PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE ACT OF
1934, AS AMENDED, CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN
PROVISIONS OF THIS AGREEMENT. SUCH CONFIDENTIAL INFORMATION HAS BEEN (I) OMITTED
FROM THIS VERSION OF THE AGREEMENT, (II) MARKED WITH ASTERISKS (**) TO INDICATE
SUCH DELETIONS AND (III) FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT ("Agreement") is made as of the 26th day
of December, 1996 ("Effective Date"), by and between Tropicana Products, Inc., a
Delaware corporation, having a place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Tropicana"), and Integrated Brands, Inc., a New
Jersey corporation, having a place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Licensee").
WHEREAS, Tropicana is the owner of the Trademarks (as defined below); and
WHEREAS, Licensee desires a license from Tropicana to use the Trademarks
solely in connection with the development, manufacture, contract manufacture,
marketing, distribution, promotion, advertising and sale of certain frozen
confection products.
NOW, THEREFORE, in consideration of the premises and mutual covenants in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
1. Definitions.
a. Fruit Based Mixture: The term "Fruit Based Mixture" shall mean a fruit
based mixture, such as fruit juice ice, fruit ice, sorbet and sherbet, which
contains at least **__**percent (**__**) by volume fruit and/or single
strength or reconstituted fruit juice.
▇. ▇▇▇▇▇ Revenues: The term "Gross Revenues" shall mean the gross sales
price invoiced by Licensee to purchasers of the Licensed Products minus any
credits or allowances given as a result of destruction of such Licensed
Products, any off-invoice allowances (but not promotional billback allowances),
and any applicable sales or use taxes.
c. Licensed Products: The term "Licensed Products" shall mean the following
prepackaged frozen confection novelty products which consist solely of a Fruit
Based Mixture, or, if made from a Fruit Based Mixture in combination with other
ingredients (including ice cream or frozen yogurt), shall contain at least
thirty percent (30%) by volume of a Fruit Based Mixture: pops, bars, cups,
cones, parfaits, sorbet filled fruit shells, push-ups, squeeze-ups, sandwiches
and nuggets. In addition, "Licensed Products" shall include retail package goods
which are packaged in quart size containers or smaller containers and consist
solely of (i) a Fruit Based Mixture, or (ii) a Fruit Based Mixture in
combination with other ingredients, so long as such retail package goods
contains at least thirty percent (30%) by volume of a Fruit Based Mixture and
the other ingredients consist solely of any type, flavoring or variety of ice
cream or frozen yogurt. "Licensed Products" also shall include machine dispensed
soft serve products. Licensed Products shall expressly exclude frozen
concentrated juice products, juice beverages and non-novelty items, including,
without limitation, ice cream, frozen yogurt, water ice, or any other frozen
items which would be considered substitutes for any of the foregoing, except as
expressly provided in the definition of "Licensed Products" above. For example,
"Licensed Products" shall include frozen juice bars.
d. Territory: The term "Territory" shall mean the United States, its
territories and possessions (including Puerto Rico) and Canada.
e. Trademarks: The term "Trademarks" shall mean (i) the trademarks and
logos owned by Tropicana set forth on Exhibit A, attached hereto; (ii) any
designs, trade dress, copyrights and unregistered trademarks provided by
Tropicana to Licensee for use in connection with labels or packaging for
Licensed Products; (iii) any and all variations or modifications thereto which
have been approved by Tropicana for use hereunder; and (iv) any new trademarks
owned by Tropicana added to Exhibit A, in Tropicana's sole discretion.
2. Grant of License.
a. Licensed Products:
i. Upon the terms and conditions hereinafter set forth, Tropicana
hereby grants to Licensee, and Licensee hereby accepts, the exclusive
royalty-bearing right and license to use the Trademarks solely in
connection with the development, manufacture, marketing, distribution,
promotion, advertising and sale of Licensed Products (expressly excluding
machine dispensed soft serve products) within the Territory.
ii. Upon the terms and conditions hereinafter set forth, Tropicana
hereby grants to Licensee, and Licensee hereby accepts, a non-exclusive
royalty-bearing right and license to use the Trademarks solely in
connection with the development, manufacture, marketing, distribution,
promotion, advertising and sale of machine dispensed soft serve products
within the Territory.
b. Sublicense/Contract Manufacture: Licensee shall have the right to grant
sublicenses and to have third parties manufacture Licensed Products solely
pursuant to Section 8 hereof.
c. Restrictions: Licensee shall not use the Trademarks in connection with
any Licensed Products distributed as premiums or giveaways or otherwise to be
used as aids in the advertisement or promotion of any products or business of
Licensee or any third party (other than the sale of Licensed Products).
d. Exclusivity: During the term of this Agreement, Tropicana agrees that it
will not use or license to anyone else the right to use the Trademarks in the
Territory, in connection with the Licensed Products.
e. Reservation of Rights: No other rights or licenses, express or implied,
other than those granted in Section 2(a) and 2(b) above, are granted to Licensee
in and to any intellectual property of Tropicana. It is understood that
Tropicana reserves to itself the right to use and license to others the right to
use the Trademarks outside the Territory in connection with any products and/or
services, and inside the Territory in connection with any products and/or
services not included within the definition of Licensed Products, including, but
not limited to, any refrigerated products, including refrigerated products of
similar or same description as the Licensed Products (but not frozen).
3. Royalty.
a. Fees:
i. Concurrent with signing this Agreement, Licensee shall pay to
Tropicana a one time non-refundable up-front license fee of $**____**.
ii. In addition to the up-front fee set forth above, Licensee agrees
to pay to Tropicana a royalty of **_______** percent (**_**%) of Licensee's
Gross Revenues of Licensed Products sold by Licensee using the Trademarks;
provided, however, no royalty shall be due on Licensed Products sold to
Tropicana using the Trademarks so long as said Licensed Products are sold
to Tropicana at Licensee's lowest wholesale price. In addition, Licensee,
in its sole discretion, from time to time may voluntarily elect to make
additional royalty payments to Tropicana based upon assistance Tropicana,
in Tropicana's sole discretion, may provide to Licensee with respect to the
sale of Licensed Products. In connection with any Licensed Products sold
and/or distributed by Licensee to a related company of Licensee at a price
lower than the price otherwise charged in the normal equivalent channels of
trade, the royalty payable herein shall be equal to the
**_________________________________________________________________________
_______________________________________________________________________**.
b. Date of Sale of Licensed Products: For purposes of this Agreement, the
royalty shall accrue on the sale of the Licensed Products and the Licensed
Products shall be considered sold when shipped or billed out, whichever occurs
earlier.
c. Royalty Payments and Records: Licensee agrees to keep full, accurate and
complete books of account, and other records in sufficient detail so that the
royalty payable hereunder may be ascertained properly. Within thirty (30) days
after the end of each of Tropicana's fiscal quarters which commence July 1,
October 1, January 1 and April 1, Licensee shall furnish to Tropicana complete
and accurate statements of sales of Licensed Products using the Trademarks
during such previous fiscal quarter certified to be accurate by the chief
financial or accounting officer of Licensee showing the number, description,
Gross Revenues of such Licensed Products and permitted deductions therefrom.
Such statements shall be furnished to Tropicana whether or not any of the
Licensed Products utilizing the Trademarks have been sold during the preceding
quarter and whether or not a royalty is due. Each such report shall be
accompanied by a check for the amount of royalty payments due with respect to
the period covered by such report. The receipt or acceptance by Tropicana of any
of the statements furnished pursuant to this Agreement or of any royalties paid
hereunder (or the cashing of any royalty checks paid hereunder) shall not
preclude Tropicana from questioning the correctness thereof at any time.
d. Deficiency of Royalty Due: In the event that inconsistencies or mistakes
are discovered in such statements or payments, they shall be rectified and the
appropriate payments made by Licensee upon demand by Tropicana. Any royalty
payments, including accrued royalties, and audit findings, not paid when due
shall be paid immediately upon demand and shall bear interest at an annual rate
of two percent (2%) over the rate of interest publicly announced by Citibank,
N.A. in New York as its base rate in effect as of the date on which such overdue
royalty amount should have been paid to Tropicana.
e. Audit Rights: Licensee agrees, upon request by Tropicana, to permit
Tropicana or its authorized representative to have access to such books or
records as may be necessary to determine the royalty in respect to any
accounting period covered by this Agreement and obtain any information as to the
amount payable in case of failure to report. Such audits shall be at the expense
of Tropicana unless they show that Licensee has understated the royalties by
five percent (5%) or more or Five Thousand Dollars ($5,000) or more for any
quarter, in which case Licensee shall reimburse Tropicana for its out-of-pocket
expenses incurred in connection with the audit as well as pay to Tropicana the
required amount of additional royalties with the accrued interest as stated
above.
f. Records Retention: All books of account and records shall be kept
available by Licensee for at least two (2) years after submission of the
relevant statement.
4. Tropicana's Authorized Representative/Approval Rights.
a. Authorized Representative: Wherever Licensee is directed to furnish or
supply to or otherwise take some action or perform some obligation in respect of
Tropicana in this Agreement, the term "Tropicana" shall be deemed to include "or
Tropicana's authorized representative" unless written advice to the contrary is
received from Tropicana.
b. Approval Rights: Tropicana shall approve or reject (along with a basis
for rejection) all materials, information and other requests submitted by
Licensee to Tropicana for approval pursuant to Sections 6, 7, and 8 within
fifteen (15) business days of receipt of same by Tropicana.
5. Trademark Acknowledgement/Protection.
a. Acknowledgement of Rights:
i. Licensee acknowledges that the Trademarks have acquired a valuable
secondary meaning, goodwill with the public, prestige and public acceptance
and that goods and services bearing the Trademarks have acquired a
reputation of the highest quality within the respective categories that
such goods and services bearing the Trademarks are competing. Accordingly,
Licensee undertakes and agrees not to use the Trademarks in any manner
whatsoever which, directly or indirectly, would dilute, or demean, ridicule
or otherwise tarnish the image of the Trademarks or Tropicana.
ii. Licensee recognizes the great value of the goodwill associated
with the Trademarks and acknowledges that the Trademarks and all rights
therein and the goodwill pertaining thereto belong exclusively to
Tropicana. During the term of this Agreement and thereafter, Licensee shall
not contest the validity or enforceability of the Trademarks and shall not
challenge, contest or dispute Tropicana's rights in the Trademarks or
perform any material act or omission adverse to said rights.
iii. Licensee hereby agrees that its every use of the Trademarks shall
inure to the benefit of Tropicana, and that Licensee shall not at any time
acquire any rights in the Trademarks by virtue of any use it may make of
the Trademarks, other than the licensed rights granted herein.
iv. Licensee agrees that it will use the Trademarks only on the
Licensed Products, and that during the term of this Agreement and
thereafter, it will not adopt or use as its own a trademark the same or
similar to the Trademarks.
b. Trademark Protection:
i. Tropicana shall have the right, but not the obligation, to apply
for, register and maintain protection for the Trademarks, and shall pay all
costs and expenses associated therewith.
ii. Tropicana shall have the right, but not the obligation, in its
sole discretion, to use the Trademarks and/or the name of Licensee so as to
give the Trademarks, Licensee, Tropicana and/or Tropicana's products full
and favorable prominence and publicity. Tropicana shall not be under any
obligation whatsoever to continue using the Trademarks in connection with
its products or services.
iii. Subject to being reimbursed for its out-of-pocket expenses,
Licensee agrees to cooperate fully and in good faith with Tropicana for the
purpose of securing, preserving and protecting Tropicana's rights or any
grantor of Tropicana's rights in and to the Trademarks.
c. Trademark Enforcement:
i. Licensee shall report to Tropicana in writing any infringement or
imitation of the Trademarks it becomes aware of on or in connection with
Licensed Products or products similar to Licensed Products.
ii. Tropicana shall have the sole right to determine whether to
institute litigation with respect to any such infringements as well as the
sole right to select counsel. If Tropicana decides to institute such
litigation, Tropicana, in its sole discretion, may offer Licensee an
opportunity to voluntarily join in any such action. If Licensee voluntarily
joins in any such action, any damages awarded as the result of a lawsuit or
settlement of such action shall be split fifty/fifty (50/50) by the parties
after the out-of-pocket expenses have been reimbursed. If Licensee chooses
not to voluntarily join in any such action, Tropicana shall be free to join
Licensee as a party thereto. If Tropicana elects not to allow Licensee to
join any such action, or if Licensee does not join the suit voluntarily,
Licensee agrees to cooperate with Tropicana in any such suit subject to
being reimbursed for its out-of-pocket expenses, but all recoveries and
awards shall be fully retained by Tropicana.
iii. If Tropicana decides not to institute such litigation, Tropicana,
in its sole discretion, may authorize Licensee to institute such litigation
in which event Licensee shall be solely responsible for the costs of such
litigation and shall be entitled to keep any recoveries therefrom.
iv. Except as set forth in Section 9 hereof, each party shall be
responsible for the defense and settlement of, and shall pay all expenses
(including attorneys' fees) related to, any and all claims by third parties
that the Trademarks licensed hereunder infringe any intellectual property
rights of such third parties. Each party agrees to cooperate fully with the
other, at
the defending party's reasonable request and expense, in connection with
the defense of any such claim.
6. Quality Control.
a. Trademark Use:
i. Licensee acknowledges that the Trademarks have become associated
generally with products that possess a high quality, positive and wholesome
image within the respective categories such products are competing, and
Licensee agrees not to use the Trademarks in any manner, or in connection
with the production, manufacture, marketing, distribution and/or sale of
any Licensed Products, inconsistent with such image within the respective
categories that such Licensed Products are, or will be, competing.
ii. Licensee shall use the Trademarks in such form and manner as
currently used by Tropicana as of the date hereof and shall faithfully and
accurately reproduce the Trademarks as shown in Exhibit A and the
attachments thereto. No partial version or variations of the Trademarks may
be used by Licensee at any time for any purpose without the prior written
approval of Tropicana in each instance. Licensee shall not have the right
to use the Trademarks as, or as part of, any trade name. Licensee shall not
use the Trademarks in combination, juxtaposition or conjunction with, or as
part of, any other service marks or trademarks without the express prior
written approval of Tropicana. Tropicana shall own any approved composite
▇▇▇▇ (excluding any element thereof owned by a third party or any purely
descriptive or generic term) but Licensee shall have the exclusive right to
the use thereof solely on or in connection with the Licensed Products in
the Territory during the term hereof and subject to and in accordance with
the terms and conditions of this Agreement.
b. Quality Control Standards:
i. Licensee agrees to maintain the high quality control standards that
are substantially equivalent to those standards approved by Tropicana or
used by Tropicana as of the Effective Date or thereafter in connection with
its products and/or the Licensed Products, including, but not limited to,
quality control procedures, product sampling procedures and inspection
procedures, labeling requirements and Licensed Product formulas and
specifications.
ii. Licensee shall be solely responsible for and shall comply with all
laws, rules and regulations, if any, of governmental authorities in
connection with the production, manufacture, distribution, sale, labeling,
packaging, advertising and promotion of the Licensed Products. In addition,
the policy of sale, distribution, and/or exploitation by Licensee shall be
of advantageous and high standard and that the same shall in no
manner reflect adversely upon the good name of Tropicana or any of its
activities or the Trademarks.
iii. Licensee shall not use the Trademarks in connection with any
Licensed Products that do not meet the quality control standards set forth
above.
c. Licensed Product Formulas and Specifications: Licensee shall submit to
Tropicana all proposed formulas and specifications for the Licensed Products and
all adjustments thereto for Tropicana's approval, such approval to be consistent
with (and based on equivalent standards to) products previously approved by, or
sold by, Tropicana, and subject to the Licensed Products passing Tropicana's
taste tests. Licensee shall not develop and market new Licensed Products using
the Trademarks without the prior written approval of Tropicana. Licensee's
formulas and specifications for the Licensed Products shall at all times remain
the property of Licensee, whether during the term of this Agreement or
thereafter.
d. Inspection Procedures:
i. In order to determine whether Licensee is maintaining the quality
standards set forth above, Licensee, before selling or distributing any
Licensed Products, shall furnish to Tropicana, at Licensee's cost, a
reasonable number of each of the Licensed Products. The quality of such
Licensed Products shall be subject to the prior written approval of
Tropicana, such approval to be consistent with (and based on equivalent
standards to) products previously approved by, or sold by, Tropicana, and
subject to the Licensed Products passing Tropicana's taste tests. At the
request of Tropicana, Licensee shall supply to Tropicana any manufacturing
information requested by Tropicana to help Tropicana in evaluating the
quality and style of such Licensed Products.
ii. In addition, upon two days prior advance notice and during normal
business hours, Tropicana shall have access to Licensee's facilities and
the facilities of Licensee's sublicensees and/or contract manufacturers
where the Licensed Products are manufactured and/or stored, for the purpose
of inspecting the Licensed Products to the extent necessary to determine
whether Tropicana's quality standards are being met. Notwithstanding the
foregoing, Tropicana shall have access at any time and upon immediate
notice to such plants and/or facilities to determine whether any health or
safety issues may exist.
iii. Licensee represents and warrants that the Licensed Products
manufactured, distributed and sold by Licensee, and, if applicable, its
sublicensees and contract manufacturers, and the manufacturing and
sanitation practices used by Licensee, and, if applicable, its sublicensees
and contract manufacturers, to produce the Licensed Products will comply
with all applicable federal, state and local laws, including, but not
limited to, good manufacturing practices.
iv. Licensee shall not manufacture the Licensed Products from
inherently dangerous materials or substances and will not design the
Licensed Products so as to constitute any inherent danger.
v. After samples of the Licensed Products have been approved pursuant
to this Section 6, Licensee shall not depart therefrom in any material
respect without Tropicana's prior written approval, and Tropicana shall not
withdraw its approval of the approved Licensed Products or of any approved
plant except for good cause when Tropicana may in good faith have reason to
believe that the approved Licensed Products or the manufacture of Licensed
Products by the approved plant may be detrimental to the health or safety
of the public or otherwise fails to satisfy the specifications therefor
which have been previously approved by Tropicana.
e. Plant Approval: The following proposed plants to be used by Licensee
shall be subject to Tropicana's prior written approval, such approval to be
consistent with Tropicana's standards for approving plants which are used by
Tropicana in the Territory:
**_____________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_____________**. Any and all additional proposed plants to be used by Licensee
shall be subject to Tropicana's prior written approval, such approval to be
consistent with Tropicana's standards for approving the plants listed above.
7. Labeling, Promotion, Advertising and Use
a. Labeling: Licensee shall submit to Tropicana for its prior written
approval, all proposed tags, labels, containers, packaging, advertising,
promotional or display materials or the like for the Licensed Products
containing or referring to the Trademarks.
b. Notices: Licensee shall apply such trademark, copyright and/or
proprietary rights notices, as may be deemed necessary or desirable by Tropicana
under applicable laws or regulations. Licensee shall also include on all labels
and packaging any consumer inquiry or complaint information (such as an address
or telephone number) which customarily appears on other products of Licensee. In
addition, Licensee shall include on any Licensed Product label or packaging on
which any Trademark appears a statement in substantially the following form
(subject to such modifications as may be required by any applicable laws, rules
or regulations): "Manufactured by, or under the authority of, Integrated Brands,
Inc. and under license from Tropicana Products, Inc."
c. Prominence. Licensee agrees that no other name or trademark shall appear
more prominently than the "TROPICANA"
brand name on any Licensed Product label, packaging or advertising.
d. Compliance: Licensee warrants that all tags, labels, containers,
packaging, advertising, promotional or display materials or the like bearing the
Trademarks shall comply with all applicable federal, state, and local laws.
8. Sublicense/Contract Manufacture.
a. Right to Sublicense:
i. Licensee shall be entitled to utilize one or more contract
manufacturers in connection with the production, manufacture, and/or
packing of the Licensed Products for and on behalf of Licensee and under
Licensee's direction and control, subject to Tropicana's prior written
approval, such approval not to be unreasonably withheld. Licensee shall
have the right to sublicense the right to use the Trademarks hereunder to
any such contract manufacturer to the limited extent necessary to enable
such third party to perform the particular functions for which such third
party is engaged, subject to Tropicana's prior written approval, such
approval not to be unreasonably withheld.
ii. In the event of any sublicense, Licensee shall remain primarily
obligated under all of the provisions of this Agreement. Licensee shall
cause each sublicensee and contract manufacturer to enter into a written
agreement which shall include provisions, stated in such agreement to be
for the express benefit of Tropicana, consistent with the provisions of
this Agreement including, but not limited to, Sections 6, 7, 12 and 14. No
sublicense agreement shall contain any terms or conditions, and Licensee
shall not take or authorize any actions in connection with any sublicense
agreement, inconsistent with the terms and conditions hereof. Licensee
shall, upon reasonable request by Tropicana, provide Tropicana with
reasonable evidence that each sublicense agreement entered into pursuant
hereto complies with the requirements hereof. While Licensee shall be
responsible for insuring that its sublicensees and contract manufacturers
comply with the terms of this Agreement, Tropicana shall have the
independent right to exercise quality control, in accordance with the terms
of this Agreement, directly over all sublicensees and contract
manufacturers.
iii. Tropicana shall have the right, pursuant to terms substantively
similar to Section 11 hereof, to require Licensee to terminate any
agreement entered into with a sublicensee and contract manufacturer in
violation of the terms hereof. In addition, Tropicana shall have the right
to pursue all other rights or remedies available to it in connection
therewith. Licensee will take all steps reasonably necessary or desirable
to enforce the terms of this Agreement against its sublicensees and/or
contract manufacturers.
iv. Tropicana acknowledges that Licensee may elect to have Licensed
Products manufactured by third parties who are also retailers of the
Licensed Products, and that the Licensed Products may be manufactured by
and sold to such third parties without Licensee taking actual physical
possession of such Licensed Products.
9. Indemnification and Product Liability Insurance.
a. Indemnification:
i. Licensee shall indemnify and hold harmless Tropicana, its
affiliates and their officers, directors, agents, employees, successors and
assigns from and against any and all claims, suits, demands, actions,
proceedings, costs, damages, expenses (including, but not limited to, legal
fees and out-of-pocket expenses) and losses arising out of or relating to:
(x) the activities of Licensee under this Agreement and Licensee's
sublicensees, third-party distributors and/or contract manufacturers
utilized or appointed by Licensee (other than the use of the Trademarks as
authorized herein) including, but not limited to, the unauthorized use of
the Trademarks or any other trademark, copyright, trade secret, patent,
process, idea, method or device by Licensee in connection with the Licensed
Products covered by this Agreement; or (y) Licensee's breach of, or
noncompliance with, its obligations under this Agreement. Licensee, upon
written request by Tropicana, promptly shall defend or settle such claim,
suit, demand, action or proceeding at Licensee's expense. Nothing herein
shall prevent Tropicana from defending or settling, if it so desires in its
own discretion, any such claim, suit, demand, action or proceeding at its
own expense through its own counsel.
ii. Tropicana shall indemnify and hold harmless Licensee, its
affiliates, Licensee's sublicensees, third-party distributors and contract
manufacturers, and their officers, directors, agents, employees, successors
and assigns from and against any and all claims, suits, demands, actions,
proceedings, costs, damages, expenses (including, but not limited to, legal
fees and out-of-pocket expenses) and losses solely arising out of or
relating to (x) the authorized use of the Trademarks pursuant to this
Agreement; or (y) Tropicana's breach of, or noncompliance with, its
obligations under this Agreement. Tropicana, upon written request by
Licensee, promptly shall defend or settle such claim, suit, demand, action
or proceeding at Tropicana's expense. Nothing herein shall prevent Licensee
from defending or settling, if it so desires in its own discretion, any
such claim, suit, demand, action or proceeding at its own expense through
its own counsel.
b. Insurance: Licensee agrees that it will obtain and maintain throughout
the term of this Agreement and for a period of three years thereafter, at its
own expense, liability insurance including product liability with a broad form
vendors endorsement from an insurance company reasonably acceptable to
Tropicana providing adequate protection (at least in the amount of Ten Million
Dollars ($10,000,000)) against any claims, suits, demands, actions, proceedings,
costs, damages, expenses (including, but not limited to, legal fees and
out-of-pocket expenses) and losses arising out of or relating to Licensee's
operations pursuant to this Agreement. Such insurance shall include coverage of
Tropicana and its officers, directors, agents, employees, successors and
assigns. As proof of such insurance, a certificate of insurance naming Tropicana
as an additional insured party will be submitted to Tropicana by Licensee for
prior approval before any Licensed Products using the Trademarks are distributed
or sold, and at the latest within thirty (30) days after the Effective Date.
Tropicana shall be entitled to a copy of the prevailing certificate(s) of
insurance which shall be furnished to Tropicana by Licensee. Licensee and its
insurer shall provide Tropicana with thirty (30) days advance notice in the
event of the cancellation of, or any modification to, said insurance.
10. Additional Covenants.
a. Reasonable Efforts: Each party agrees to exercise good faith reasonable
efforts in the performances of this Agreement.
b. Licensee: Licensee agrees to keep Tropicana informed on a regular basis
of Licensee's activities in manufacturing and marketing the Licensed Products
covered by this Agreement.
c. Tropicana: Tropicana shall supply to Licensee, solely
for use in connection with the manufacture of Licensed Products,
single strength orange juice and orange juice concentrate (and
subject to Tropicana's discretion and availability, other juice
concentrates) on a purchase order basis and at the following
price:
**_____________________________________________________________________________
_______________________________________________________________________________
_____________________________________________________________________________**
. Licensee shall not sell or otherwise distribute any orange juice or any juice
concentrate purchased pursuant to this Section 10(c) to any third party (except
to its sublicensees and/or contract manufacturers in accordance with this
Agreement). For purposes of this Agreement,
**_____________________________________________________________________________
__________________________**.
11. Term and Termination.
a. Term: The term of this Agreement shall commence on the Effective Date
and shall end on December 31, 2011, unless sooner terminated in accordance
herewith.
b. Termination for Breach:
i. Tropicana shall have the right to terminate this Agreement if
Licensee shall be in material default of any
obligation, excluding payment obligations, by giving Licensee not less than
thirty (30) days' written notice to Licensee specifying such breach and
stating that the Agreement will terminate at the expiration of thirty (30)
days from receipt of such notice by Licensee, unless such breach is cured
within the thirty (30) day time period or if the breach cannot be cured
within the thirty (30) days, Licensee has in good faith initiated steps to
cure such breach within the thirty (30) day notice period. Failure of
Tropicana to terminate this Agreement for any such default or breach shall
not be determined a waiver of the right subsequently to do so under the
same or any other such default or breach, either of the same or different
character.
ii. Tropicana shall have the right to terminate this Agreement if
Licensee shall be in material default of any payment obligation by giving
Licensee not less than fifteen (15) days' written notice to Licensee
specifying such breach and stating that the Agreement will terminate at the
expiration of fifteen (15) days from receipt of such notice by Licensee,
unless such breach is cured within the fifteen (15) day time period.
Failure of Tropicana to terminate this Agreement for any such default or
breach shall not be determined a waiver of the right subsequently to do so
under the same or any other such default or breach, either of the same or
different character.
c. Termination for Failure to Meet Minimum Royalties: Tropicana shall have
the right to terminate this Agreement immediately if Licensee fails to make
royalty payments of **____________** or more during the 1998 calendar year or
during any calendar year thereafter. Notwithstanding the foregoing, if Licensee
fails to generate sales of Licensed Products to achieve the minimum royalty
payment in any given calendar year, Licensee shall have the right to pay
Tropicana the amount of any resulting shortfall in order to satisfy its minimum
royalty obligation. Any such shortfall royalty payments shall be made in
accordance with Section 3(c) hereof and shall be due and payable within thirty
(30) days after the end of the calendar year in which such shortfall occurred.
d. Termination by Licensee: Licensee may terminate this Agreement for any
reason upon six (6) months' prior written notice.
e. Termination for Bankruptcy:
i. The license hereby granted shall automatically terminate forthwith
without any notice whatsoever being necessary if Licensee discontinues its
business or Licensee voluntarily submits to, or is ordered by the
bankruptcy court to undergo, liquidation pursuant to Chapter 7 of the
bankruptcy code. In the event this license is so terminated, Licensee, its
receivers, representatives, trustees, agents, administrators, successors
and/or assigns shall have no right to sell, exploit or in any way deal with
or in any Licensed Products covered by this Agreement, or any carton,
container, packaging or wrapping material,
advertising, promotional or display materials pertaining thereto, except
with and under the special consent and instruction of Tropicana in writing,
which they shall be obligated to follow.
ii. Should Licensee file a petition in bankruptcy or is otherwise
adjudicated a bankrupt or if a petition in bankruptcy is filed against
Licensee and the Licensed Products are attached and such petition is not
discharged or dismissed within ninety (90) days thereafter, or if an
involuntary receiver is appointed for it or its business and is not
discharged or dismissed within ninety (90) days thereafter, this Agreement
shall automatically terminate.
f. Effect of Termination:
i. Termination of this Agreement shall not release either party from
any obligation accrued prior to the date of such termination or from any
obligations continuing beyond the termination of this Agreement. The
minimum royalty obligation set forth in Section 11(c) hereof owed by
Licensee shall be pro rated to the effective date of termination.
ii. Termination of this Agreement for any reason shall be without
prejudice to any rights which either party may otherwise have against the
other.
iii. Licensee shall have no further right and license to use the
Trademarks. Notwithstanding the foregoing, so long as this Agreement was
not terminated by Tropicana pursuant to Section 11(e) hereof, Licensee
shall have a period of three hundred sixty-five (365) days after the date
of termination in which to phase out its use of the Trademarks provided all
Licensed Products to be sold, and all uses of the Trademark, by Licensee
during such three hundred sixty-five (365) day period shall comply with the
terms hereof. This limited license shall not apply to any of the Licensed
Products which fails to comply with Sections 6, 7 and 14 hereof and/or
which may be the subject of any health or safety issues.
iv. Licensee shall report to Tropicana with respect to sales made
pursuant to Section 11(f)(iii) above and make the requisite royalty payment
within thirty (30) days after the end of each month during the aforesaid
three hundred sixty-five (365) day period.
v. All duties and obligations of Licensee under this Agreement shall
remain in force during the sell-off period as set forth in Section
11(f)(iii) above.
12. Confidentiality.
a. Obligation: Both parties shall keep confidential and shall not cause or
permit the disclosure to any third party, other than those whose duties require
possession of such information and who agree to be bound by the confidentiality
obligations set forth in this Section 12(a), such as sublicensees, third-party
distributors and contract manufacturers, of any confidential information
disclosed by either party to the other pursuant to this Agreement. Confidential
information may include, but is not limited to formulas, production processes,
research, marketing, and sales information. Said confidentiality requirement
shall not apply to any information which (i) has entered into the public domain
through no wrongful act or breach of any obligation of confidentiality on the
receiving party's or any third party's part; (ii) was in the lawful knowledge
and possession of, or was independently developed by, the receiving party prior
to the time it was disclosed to, or learned by, the receiving party as evidenced
by written records kept in the ordinary course of business by the receiving
party; (iii) was rightfully received from a third party not in violation of any
contractual, legal or fiduciary obligation of such third party; or (iv) was
approved for release by written authorization by the party having rights in such
information.
b. Compelled Disclosure. In the event that a party is required by law or
court order to disclose any confidential information of the other party, that
party shall: (i) notify the other party in writing as soon as possible, but in
no event less than ten (10) calendar days prior to any such disclosure; (ii)
cooperate with the other party to preserve the confidentiality of such
confidential information consistent with applicable law; and (iii) use its best
efforts to limit any such disclosure to the minimum disclosure necessary to
comply with such law or court order.
13. Remedies.
Licensee acknowledges that a breach or failure to comply with any of the
provisions of this Agreement (other than payment obligations) will irreparably
harm Tropicana and that Tropicana will not have an adequate remedy at law in the
event of such breach or non-compliance. Therefore, Licensee acknowledges that
Tropicana shall be entitled to injunctive relief and/or specific performance
without the posting of bond or other security, in addition to whatever other
remedies it may have, at law or in equity, in any court of competent
jurisdiction against any acts of such breach or non-compliance.
14. Warranty and Consumer Response.
a. Governmental Inquiries. Licensee shall immediately notify Tropicana in
writing of any investigation, inquiry, claim or sanction by any governmental
authority regarding any quality, labeling, advertising or other regulatory
matter relating to the Licensed Products and shall keep Tropicana advised of the
progress and findings of such investigation or inquiry.
b. Deficiency Procedures.
i. If Tropicana reasonably determines that any particular Licensed
Product does not meet the required standards of quality set forth in
Section 6 hereof, Tropicana shall notify Licensee in writing of such defect
(a "Deficiency Notice"), providing Licensee with reasonable detail
regarding the deficiency therein. If Licensee disputes Tropicana's
determination of deficiency and the parties are not able to resolve the
dispute between themselves,they shall refer the dispute to a mutually
agreed upon third party for resolution; provided, however, that the
foregoing shall not apply with respect to any notice from Tropicana of a
deficiency involving a risk to public health or safety. Upon receipt of
such Deficiency Notice, if Licensee or, if applicable, the mutually agreed
upon third party, concurs in the determination of deficiency, Licensee
shall cure such deficiency within a commercially reasonable amount of time,
and shall provide Tropicana with evidence of such cure including samples of
such Licensed Product; provided, however, that in the event that any
deficiency poses a risk to public health or safety, Licensee shall take all
steps necessary to cure the deficiency or otherwise eliminate the risk to
public health or safety immediately. If any deficiency is not cured within
the applicable time period set forth herein, the Licensee shall cease all
use of the Trademarks in connection with the production, manufacture,
distribution, sale, advertising and promotion of the Licensed Products in
issue unless and until such cure is achieved.
ii. If Tropicana reasonably determines that any deficiency is such
that any such Licensed Products are subject, or may be subject, to market
withdrawal, quarantine, recall or correction based on applicable Food and
Drug Administration ("FDA") or other applicable governmental authority
guidelines, including good manufacturing practices, Licensee agrees to
immediately implement such withdrawal, recall or correction procedures at
Licensee's sole cost and expense (except as provided in Section 9(a)(ii)
hereof) and shall coordinate and cooperate with Tropicana in connection
therewith, including with respect to all press releases and other public
relations aspects thereof. If Licensee is otherwise required or determines
to withdraw from market, recall or correct any such Licensed Products,
Licensee shall give Tropicana prior notice of such withdrawal, recall or
correction as soon as practicable and the parties shall coordinate and
cooperate with each other in connection therewith, including with respect
to all press releases and other public relations aspects thereof. Tropicana
shall be granted complete and immediate access to all sites at which such
deficient Licensed Product has been produced and/or stored.
c. Compliance; Fitness for Use.
i. Licensee represents and warrants that the Licensed Products and all
materials related thereto (x) shall be in all respects non-injurious, (y)
shall not be adulterated or misbranded within the meaning of any applicable
laws, rules or
regulations of any governmental authority, (z) shall not purposely be
packaged or sold in damaged containers, and (aa) shall not violate the
rights of any other person or entity.
ii. Licensee will, at no cost to Tropicana, handle all warrantee
(guarantee) satisfaction, response and compliance and all consumer response
relating to any of the Licensed Products. Tropicana shall promptly forward
to Licensee, for handling, any and all such consumer inquiries that it
receives. Licensee shall use commercially reasonable efforts to keep
Tropicana generally informed of consumer complaints relating to the
Licensed Products.
15. No Joint Venture.
Nothing herein shall be construed to create any relationship of employer
and employee, agent and principal, partnership or joint venture between the
parties. Neither party shall assume, either directly or indirectly, any
liability of or for the other party. Neither party shall have the authority to
bind or obligate the other party and neither party shall represent that it has
such authority.
16. Assignment, Sublicense or Change of Control.
a. No Assignment by Licensee:
i. This Agreement and all rights and duties hereunder are personal to
Licensee. Except as set forth in Section 16(a)(ii), this Agreement or any
portion thereof, or any right or responsibility hereunder, shall not be
assignable by Licensee without the prior written approval of Tropicana. In
no event may Licensee assign this Agreement or any portion thereunder to a
competitor of Tropicana in the juice or juice beverage category.
ii. Except as provided below, any change in direct or indirect control
over Licensee or any assignee of rights of Licensee under this Agreement
shall not be subject to the prior written approval of Tropicana. However,
the occurrence of any of the following events shall not be permitted:
(1) any competitor of Tropicana in the juice or juice beverage
category becomes the beneficial owner, directly or indirectly, of a
majority of the issued and outstanding shares of Licensee entitled to
vote for the election of directors;
(2) the stockholders of Licensee approve an agreement providing
for a transaction in which Licensee will cease to be an independent
corporation and the entity which will control it is a competitor of
Tropicana in the juice or juice beverage category, or pursuant to
which Licensee sells or otherwise disposes of all or substantially all
of the assets of Licensee to a major competitor of Tropicana in the
juice or juice beverage category.
iii. Any attempted assignment by Licensee which does not comply with
the terms of this Section 16(a) shall be void and of no effect.
b. Assignment by Tropicana: Tropicana may assign this Agreement to any
third party, provided that such third party is also assigned all of Tropicana's
right, title and interest in the Trademarks in the Territory and Tropicana shall
furnish written notice of such assignment to Licensee.
17. Notices.
All notices to be made hereunder shall be in writing sent via certified,
overnight or registered mail (return receipt requested). Any Licensed Products
or materials submitted for approval under this Agreement shall not be governed
by the mailing type requirements of this Notice provision. Such notices and
statements shall be given to or made at the respective addresses of the parties
as set forth below unless notification of a change of address is given in
writing, and the date of receipt shall be deemed the date the notice or
statement is received:
To Tropicana: To Licensee:
Tropicana Products, Inc. Integrated Brands, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
18. Waiver.
None of the terms of this Agreement shall be deemed to be waived or amended
by either party unless such a waiver or amendment specifically references this
Agreement and is in a writing signed by the party to be bound.
19. Survival of Provisions.
Sections 3(e), 3(f), 5(a)(ii), 5(c)(iv), 11(f) and Articles 9, 12, 19 and
22 shall survive the termination of this Agreement for any reason.
20. Entire Agreement.
This Agreement and all Exhibits attached hereto and incorporated herein by
this reference contain the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes any previous understandings
or
agreements, whether written or oral, in respect of such subject matter. This
Agreement shall be binding upon and inure to the benefit of the parties, their
successors and assigns.
21. Severability.
The illegality, invalidity or unenforceability of any part of this
Agreement shall not affect the legality, validity or enforceability of the
remainder of this Agreement. If any part of this Agreement shall be found to be
illegal, invalid or unenforceable, this Agreement shall be given such meaning as
would make this Agreement legal, valid and enforceable in order to give effect
to the intent of the parties.
22. Choice of Law.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York.
23. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the date and year first above written.
TROPICANA PRODUCTS, INC. INTEGRATED BRANDS, INC.
By: By:
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Name: Name:
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Title: Title:
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EXHIBIT A
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TRADEMARKS
TROPICANA
PURE PREMIUM
GROVESTAND
PURE TROPICS
