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EXHIBIT 10.2
Newman's Own Lightly Sparkling Fruit Juices Distribution
Agreement
AGREEMENT
This Agreement is made this 6th day of April, 2004 (the
"Agreement"),
between Paul Newman, individually ("P.N."), Newman's Own, Inc.,
246 Post Road
East, Westport, CT 06880 ("N.O.") and Drinks America, Inc.
("D.A."), 372 Danbury
Road, Suite 163, Wilton, CT 06897.
WHEREAS:
1. N.O. desires to provide for the bottling, marketing and
distribution at
retail of single-serve, lightly sparkling lemonades/fruit juice
drink products
which it has created under the trademarks and copyrights of Paul
Newman, and
2. D.A. desires to obtain a limited license for the recipes,
formulae,
trademarks, copyrights, name and image of Paul Newman and N.O.
in order to
bottle and distribute said lightly sparkling, single-serve
lemonades/fruit juice
drink products in glass bottles for which it will pay a royalty
to Paul Newman
and Newman's Own, therefore
IN CONSIDERATION of the mutual promises and rights granted
herein and
other good and valuable consideration, the parties agree as
follows:
I. Definitions and Terms
A. "Paul Newman" ("P.N.") is the owner and Licensor to N.O. of
Copyrights
and Licensed Trademarks licensed herein.
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Note: Certain confidential portions of this Exhibit 10.2 have
been omitted and
are indicated by a blank underline. Such confidential portions
of this Agreement
have been filed separately with the Securities and Exchange
Commission.
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B. Newman's Own, Inc., holds licenses from P.N. for some or all
of the
Copyrights and Trademarks licensed herein.
C. Drinks America, Inc.,("D.A."), shall hold a limited licensee
for the
Copyrights and Licensed Trademarks licensed herein for the
purpose of arranging
for and managing the manufacture, bottling and distribution of
single-serve,
sparkling lemonades/fruit juice drink products pursuant to the
terms of this
Agreement.
D. "D.A.'s Affiliates" shall collectively refer to the
bottlers,
distributors, employees, agents, consultants and independent
contractors, if
any, of D.A. who have actual responsibilities in connection with
the performance
of this Agreement.
E. "Licensed Trademarks" shall mean the Newman's Own U.S.
Trademark Reg.
No. 1581795, only as it pertain to lightly sparkling
lemonades/fruit juice drink
products in International Class 32 when used in the Territory in
connection with
the Product(s) together with other Trademarks, trade secrets and
trade dress
that N.O. or P. N., individually, possess for lightly sparkling
lemonades/ fruit
juice drink products now in existence or to be developed,
manufactured or sold
pursuant to this Agreement.
F. "Copyrights" shall mean any common law, statutory or
registered
copyright of P.N. and N.O. for the labeling, packaging or
promotion of N.O.'s
products or for the name and image of P.N.
G. "Case of Product" shall mean a case containing 12
single-serve, lightly
sparkling lemonades/fruit juice drinks in glass bottles.
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H. "Territory" shall mean the Metro New York Marketing Area as
shown on
the Map attached to this Agreement as Attachment A.
I. "Term" shall begin on the date when this Agreement is
executed by both
parties and conclude eighteen months (18) following the date
when Products are
first shipped by D.A. to any distributor so long as such
eighteen month period
begins within 100 days following the execution of this
Agreement.
J. "Product" shall refer to each individual, single-serve N.O.
glass
bottle of lightly sparkling lemonades/ fruit juice drink
products namely
lemonade, orange mango, lemon lime, raspberry and black berry,
to be
manufactured, distributed, advertised and sold pursuant to this
Agreement.
K. "Gross Dollar Sales" shall be defined for the purposes of the
market
test provided for by this Agreement as the net Selling Price per
Case of Product
less 20% which amount shall constitute an allowance by N.O. for
all of D.A.'s
expenses for "free goods," advertising and promotional spending,
co-op monies,
returns, damaged goods and any other adjustment of the Selling
Price on which
D.A. is obliged to pay a royalty to N.O. under this
Agreement.
II. Roles and Responsibilities of the Parties
1. A. D.A.
D.A. shall contract in writing with each bottler and distributor
to
provide for the bottling, distribution, promotion, advertising
and marketing of
the Products. Each contract shall be in writing and submitted by
D.A. to P.N.
and N.O, for their written approval.
2. D.A. shall:
(a) supervise and manage the performance of bottler(s) and
distributor(s) who are under contract to D.A. in order to
perform this
Agreement;
(b) Consult with and obtain N.O.'s recommendation as to pricing
of
the Products at retail;
(c) Assure that the Products are available and will remain
available
at retail in sufficient quantities to satisfy demand throughout
the Term in at
least:
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(i) ___% of retail outlets within 6 months of first shipment
by
D.A. to a distributor;
(ii) ___% of retail outlets within 9 months of first shipment
by
D.A. to a distributor;
(iii) ___% of retail outlets within 12 months of first shipment
by
D.A. to a distributor.
[Percentage of distribution shall be computed on the basis
of
a list of distribution outlets to be provided by D.A. prior
to
execution of this Agreement and made part of this Agreement
as
Attachment C. This list may be amended from time-to-time if
both parties agree.]
(d) In consultation with N.O., develop a detailed co-op
marketing
and advertising plan based on the delivery of campaign materials
from N.O.,
develop a budget that requires distributors to invest in
marketing and promotion
on a co-op basis with D.A. and provide schedules to be
coordinated with product
rollout to meet sales goals, all to be submitted to P.N. and
N.O. for their
approval.
2. Royalties
A. D.A., as Licensee, shall pay to N.O., as Licensor, a royalty
of ___% of
Gross Dollars Sales. Such royalty shall be calculated and
payable to N. O. on or
before the thirtieth day following each shipment of Products to
a distributor of
Product. If the royalty payment due to N.O. has not been paid by
the 30th day,
D.A. will forthwith remit the appropriate payment to N.O. plus
1%/month from the
date of shipment.
1. D.A. shall provide N.O. with access to real time, on-line
data which
reflects sales to each distributor, the actual date, dollar
amount and type of
product for each sale and pending orders for Products by
distributor and
retailer, if known.
B. D.A. shall submit to N.O. within fifteen (15) days of the end
of each
month and at end of each Contract Year, (concluding 12 months
after the first
date on which this Agreement has become effective and at the
conclusion of any
phase out period), a statement of Products manufactured and
sales by type and
numbers of cases of Products sold by each distributor and
retailer. N.O. shall
have the right to require confirmation of these figures by a
certified
accounting statement of the figures to be delivered to N.O.
within three (3)
months of the end of the previous year or phase out period. D.A.
shall permit
N.O. to audit such of D.A.'s books pertaining to the
manufacture, distribution
and sales of Product provided for by this Agreement.
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B. N.O.
A. It shall be the responsibility of N.O. to:
(a) Create and select the recipe and/or formula for each Product
to
be manufactured, bottled and distributed pursuant to this
Agreement.
(i) D.A. may propose or recommend a Product to be developed
and distributed pursuant to this Agreement but N.O. shall retain
the exclusive
right to initiate such Product development and shall own all
rights to said
Products.
(b) Monitor and evaluate the quality of the Products
manufactured
and bottled and the performance of D.A., its bottlers and
distributors.
(c) Design and develop marketing and advertising materials,
campaigns and schedules for implementation by D.A., the bottlers
and
distributors, and
(d) Recommend wholesale and retail pricing of the Products.
III. License
A. Interest Granted
Subject to the terms and conditions specified in this Agreement,
and
the performance by D.A. of its legal obligations hereunder, N.O.
grants a
limited license to D.A. to use the recipes, formulae, Trademarks
and Copyrights
as specified by this Agreement within the Territory in
connection with sale of
the Products in all sales channels including convenience stores,
club and
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grocery stores during the Term, subject to the approval of N.
O.
B. Licensed Trademarks/Copyrights
1. D.A.s Use of the Licensed Copyrights and Trademarks.
D.A. shall:
(i) use such trademark and copyright notices with the
Copyrights and Licensed Trademarks and any associated
copyrighted works, which
N.O. or P.N. may reasonably specify from time to time, and
(ii) not take any action that is inconsistent with P.N.'s or
N.O.'s ownership of the Copyrights and Licensed Trademarks.
2. Ownership of Licensed Copyrights and Licensed Trademarks,
Formulas and Recipes.
A. D.A. acknowledges that, as between N.O, P.N. and D.A., P.N.
is
the owner of the Copyrights and Licensed Trademarks, formulae
and recipes, some
of which he has licensed to N.O., with the right to sublicense,
together with
all goodwill attaching thereto. D.A. covenants that it shall
not, whether
directly or indirectly, at any time, contest the ownership or
the validity of
the Copyrights or Licensed Trademarks, Copyrights, formulae,
recipes or any
other ownership interest therein, or will it make any
application or
registration thereof. N.O. and P.N. shall have the right to
register trademarks
and copyrights for each and every such product, which
registrations D.A. will
not challenge.
B. N.O, P.N. and D.A. acknowledge and agree that N.O. does and
will
own any and all products developed and/or sold pursuant to this
Agreement,
without reservation of any kind and that no rights of any kind
in the Products
or their distribution are or will be vested in D.A. as a result
of this
Agreement or its performance except those specifically referred
to by this
Agreement.
3. Infringement
(a) Neither this Agreement nor the operations of D.A. or its
Affiliates under this Agreement shall in any way give to D.A. or
its Affiliates
any rights in the Copyrights, Licensed Trademarks, Trade Secrets
or recipes and
product formulations except for its right to use them pursuant
to the terms of
this Agreement. Any unauthorized use of the Copyrights or
Licensed Trademarks by
D.A. shall constitute an infringement of N.O.'s and P.N.'s
rights in the
Copyrights, Licensed Trademarks, recipes, formulae or Trade
Secrets, and shall
be deemed a breach of this Agreement.
(b) Whenever any party learns of an actual or potential
infringement or violation of the Copyrights or Licensed
Trademarks, any actual
or intended passing-off, or any third party claim that any of
the Copyrights or
Licensed Trademarks causes deception or confusion with or
infringes or violates
any third party propriety rights in any manner, that party shall
give prompt
notice thereof to the other party and provide it with all
information it
reasonably requires with respect thereto. The parties shall
consult with one
another with respect to each infringement, violation,
passing-off or third party
claim relating to the Copyrights or Licensed Trademarks; however
P.N. and N.O.
shall determine, in their absolute discretion, what action
should be taken with
regard to the Copyrights or Licensed Trademarks.
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4. Registrations
(a) N.O. or P.N. shall, at their own expense, take all
reasonable
steps to register, maintain, protect and enforce the Copyrights
and Licensed
Trademarks described herein or created as a consequence of
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