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.
-----------------
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.
10
<PAGE>
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.
11
<PAGE>
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:
12
<PAGE>
(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.
13
<PAGE>
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
14
<PAGE>
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.
15
<PAGE>
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
