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Exhibit 10.12
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement"), made as of the 26th day of
November, 1996, is between XXXXXXXX BRANDS, INC., having an office and place of
business at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 (the "Licensor"), and
DELICIOUS COOKIE COMPANY, INC., an Illinois corporation, having a business
address of 0000 Xxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxx 00000 (the "Licensee").
WITNESSETH:
WHEREAS, Licensor is the owner of rights in certain trademarks, such as
identified in Exhibit A, annexed hereto and made a part hereof by the parties,
under which numerous products have been sold and extensive use, advertisement
and marketing have been undertaken (collectively, the "Trademarks"); and
WHEREAS, Licensor has the right to grant Licensee the license, right and
permission to use said Trademarks; and
WHEREAS, Licensee is a manufacturer and marketer of cookies and other
similar products and is desirous of acquiring from Licensor the right, subject
to Licensor's control and supervision as hereinafter set forth, to manufacture,
advertise and sell (i) a rotary die cut banana cookie with a fudge coating and
containing Xxxxxxxx banana ingredients (the "Banana Cookie"), and (ii) a fat
free fruit bar consisting of a cake-type outer coating surrounding a
banana/strawberry filling in jam form and made with Xxxxxxxx banana ingredients
(the "Banana Strawberry Fruit Bar"), each as more specifically described in
Exhibit B and referred collectively herein as the "Products," as well as
individually as a "Product;" and
WHEREAS, Xxxxxxxx Processed Foods Division of Xxxxxxxx Brands, Inc., a
sister company of Licensor, is prepared to supply all of Licensee's requirements
for banana ingredients needed for the Products, including banana flakes, banana
extract, banana powder, banana puree and other banana ingredients; and
WHEREAS, the parties hereto desire to safeguard, promote and maintain the
value and recognition of, as well as the reputation for high quality and
wholesomeness now enjoyed by the Trademarks; and
WHEREAS, this Agreement hereby supersedes the terms and conditions of the
Agreement entered into between Licensor and Licensee on September 16, 1993 and,
as amended on May 27, 1994, March 9, 1995 and September 14, 1995.
NOW, THEREFORE, in consideration of the premises, and mutual covenants
hereinafter set forth, the parties hereto do agree as follows:
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1. Grant of License. Subject to the provisions of this agreement, Licensor
hereby grants to Licensee a non-exclusive, non-transferable license ("License")
to manufacture, sell and distribute in Canada and the United States and its
territories and military bases (the "Territory") the Product bearing the
Trademarks, which Product shall meet the quality, characteristics, and packaging
requirements of Licensor as set forth herein, and as specified by Licensor to
Licensee from time to time. The License granted herein is not an assignment, in
part or in whole, of the Trademarks or of any other trademark rights of Licensor
or Xxxxxxxx Brands, Inc., and Licensee shall not sublicense any of the
Trademarks, or any right in any of the Trademarks. Licensor specifically
reserves the right to grant to others licenses and/or endorsement licenses (e.g.
"Made with Xxxxxxxx(R) bananas") under the Trademarks.
2. Term. The term of this Agreement (the "Term") shall commence on the
date of his Agreement and expire on September 15, 1998, unless earlier
terminated hereunder.
3. Maintenance of Reputation and Quality. Licensee hereby acknowledges
that the maintenance of the reputation and quality associated with the
Trademarks requires the highest quality and utmost uniformity with respect to
the manufacture, packaging, presentation, advertisement, promotion and sale of
the Products. In order to maintain the reputation associated with the
Trademarks, the parties hereto agree as follows:
(a) Licensee shall manufacture, package, distribute, market, sell
and/or distribute Products hereunder of the highest quality, under strict
sanitary conditions and in accordance with the current Good Manufacturing
Practices regulations, or similar guidelines, of the United States Food and Drug
Administration or other regulatory organizations, and in accordance with the
specifications set forth on Exhibit B, or such modification thereof or
substitution thereof, as may be approved in writing by Licensor, or as supplied
by Licensor to Licensee.
(b) Licensee shall provide to Licensor for review and approval all
product formulations, lists of ingredients, finished product specifications,
packaging and labeling texts and designs, and advertisement and promotion
materials relating to the Products at least thirty (30) days in advance of
Licensee's proposed commitment dates for such Products.
(c) Licensee shall not manufacture any Products, or order packaging,
labeling, or conduct advertising and/or promotions relating to any Products,
that do not meet Licensor's approval. All Products made under this License shall
include only "all natural" banana ingredients within the definition of the
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U.S.D.A. and/or other applicable government policies, rules or regulations.
(d) Licensee shall establish and maintain procedures satisfactory to
Licensor for responding to consumer complaints and inquiries, and Licensee shall
promptly inform Licensor of all complaints or other allegations involving the
safety, sanitary conditions, quality, or labeling of any Products, including,
without limitation, any complaints or allegations of poor quality or misbranding
and any complaints or allegations which may tend to impugn the reputation of
Licensor, any Products, or the Trademarks. Licensee shall establish and maintain
procedures satisfactory to Licensor to initiate and effect a market withdrawal,
recall or other product correction in accordance with applicable laws and
regulations and Licensee shall promptly inform Licensor of all complaints,
allegations, or other circumstances giving rise to or indicating a need for a
market withdrawal, recall or other product correction in connection with any
Products as soon as possible, but in no event later than eighteen (18) hours of
Licensee's first knowledge of such complaint, allegation or circumstances.
Licensee shall, at Licensee's expense, immediately withdraw or
recall from the market and cease distribution of any Products or Products
labeling, advertisement or promotion which Licensor, in its sole discretion,
believes, in good faith, is or may present a risk of injury or gross deception
or may tend to impugn the reputation of Licensor, any Product, or the
Trademarks. In the event of a market withdrawal or recall, Licensor shall
prepare and authorize any and all statements to the media and regulatory
authorities concerning the Products, subject to Licensee approval, which shall
not be unreasonably withheld. License shall promptly and fully report to
Licensor all communications in whatever form from or by regulatory authorities,
media representatives, government agencies, brokers, retailers or consumers in
connection with such market withdrawal or recall. Complete records of all
productions and shipments by code shall be maintained and promptly made
available to Licensor upon. request. Disposition of any Products involved in a
market withdrawal or recall shall be as determined by Licensor. Within sixty
(60) days of the execution of this Agreement, Licensee shall provide to Licensor
a written copy of Licensee's consumer complaint procedures and recall
procedures. In the event that such procedures are amended during the term of
this Agreement, Licensee shall provide copies of such amendments to Licensor.
(e) Licensee shall not manufacture the Products through any
subcontractor unless (i) Licensee has notified Licensor of the name and address
of such contractor proposed to be engaged by Licensee, and (ii) Licensor has
given its prior
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written approval with respect to the use of such subcontractor within ten (10)
business days after Licensor's receipt of such notice from Licensee, which
approval shall not be reasonably withheld; provided, however, that Licensor's
approval of any such subcontractor shall not relieve Licensee of its duty to
maintain the reputation, goodwill, and quality associated with the Trademarks.
Licensee shall also insure that all subcontractors agree to be bound by the
quality and Trademark usage provisions of this Agreement.
(f) Licensee shall comply with and satisfy all currently existing
and future industry standards, decrees, governmental orders, laws and
regulations in force in all applicable areas of the Territory relating to the
manufacture, packaging, storage, use, shipping, advertising, sale and
distribution of the Products.
(g) Licensee shall give Licensor and all designated representatives
of Licensor access at all reasonable times to the facilities used in the
manufacture, storage, sale and distribution of the Products, and to the records
of Licensee for the purpose of inspection and verification of Licensee's
compliance with this Agreement.
4. Insurance. Licensee shall maintain in full force and effect during the
Term and any renewal terms thereafter, a general liability insurance policy
(including products liability coverage), protecting Licensor and Licensee and
their directors, officers, employees, representative and agents against any
loss, liability or expense arising from any claim or action on account of the
manufacture, use and/or sale of the Products in an amount of not less than
$2,000,000 combined single limit. Licensor shall be a named additional insured
under such liability policy, including coverage for products liability, and such
insurance policy shall be written by an insurance company acceptable to
Licensor. The evidence of insurance shall be in the form of a certificate of
insurance that shall be delivered to Licensor no later than thirty (30) days
after the commencement of the Term. Such insurance policy shall contain a clause
that such policy cannot be canceled or altered without at least thirty (30) days
prior written notice to Licensor and Licensee. Should Licensee fail to procure
and maintain such insurance for any reason, Licensor shall have the right and
authority to procure such coverage and charge the expenses incurred to Licensee,
and/or to terminate this Agreement.
5. Indemnification by Licensee. In all cases, Licensee shall assume entire
responsibility for compliance with all federal, state, and local laws and
regulations applicable to the Products and to any statements or representations
made with
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respect to the Products; and Licensee shall indemnify and save harmless Licensor
from any and all loss, liability, damage and expense whatsoever (including
without limitation costs of court and attorneys' fees) on account of any
liability to or claims of any third parties, including governmental authorities,
in connection with the foregoing, or otherwise with respect to the Products,
including, without limitation, claims relating to products liability or patent
infringement, or with respect to the use of the Trademarks hereunder.
6. Trademark Marking.
(a) Licensee shall place on all packaging in which the Products are
distributed, marketed and sold, and on all materials used in advertising and
merchandising the Products, appropriate statutory trademark patent and other
designations, and such other statements as Licensor may reasonably request,
including but not limited to the following:
i. Wherever the XXXXXXXX word trademark is used, it shall be
followed by an asterisk referring to a legible footnote reading: "XXXXXXXX
is a trademark of Xxxxxxxx Brands, Inc. "
ii. Wherever the XXXXXXXX Logo trademark is used, it shall be
followed by an asterisk referring to a legible footnote reading: "The
XXXXXXXX Logo is a trademark of Xxxxxxxx Brands, Inc."
iii. all containers, packaging, labeling or advertising used
in connection with any Product bearing the Banana Shape Trademark as
described on Exhibit A (the "Banana Shape Trademark") shall contain a
legible notice reading: "The XXXXXXXX Banana Shape is a registered
trademark of Xxxxxxxx Brands, Inc., " and each time the Banana Shape
Trademark is used on any such container, packaging, labeling or
advertising, the xxxx shall appear with the designation (R).
In no event shall any trade name or trademark other than the trademarks be
attached to or displayed on the Products, OF any containers, packaging, labeling
or advertising relating to the Products, unless Licensor has given its prior
written approval with respect to the attachment or display or such other trade
name or trademark; provided, however, that Licensee may include Licensee's
corporate name on such packaging or a statement to the effect that such Products
are made by Licensee.
(b) The benefit of all use by Licensee of the Trademarks and of
Licensor's name shall inure to the benefit of
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Licensor and Xxxxxxxx Brands, Inc., and, except for the license granted herein,
Licensee shall not acquire by reason of this Agreement any rights to the
Trademarks, or any variation thereof, or any other means of identification used
by Licensor.
(c) Licensee acknowledges and admits the validity of the Trademarks,
as well as Licensor's exclusive rights and interest in and to the use thereof.
Licensee covenants that it will not, directly or indirectly, attack or assist
another in attacking the validity of the Trademarks and/or the applications for
registrations thereof. The acknowledgments admissions and covenants as contained
in this paragraph shall survive the termination or expiration of this Agreement.
(d) Licensee shall assist and cooperate fully with Licensor to
obtain and/or maintain registrations of the Trademarks as applied to the
Products and/or to protect and maintain the interests of Licensor in such
Trademarks.
7. Infringements. In the event that any claim, demand or suit for
infringement of a trademark shall be asserted or threatened against Licensee on
account of Licensee's use of the Trademarks (each a "Claim," and collectively,
the "Claims"), Licensee shall immediately give Licensor written notice thereof,
and Licensor, at its option, shall have the exclusive right to defend against
any such Claim in its name, in the name of Licensee, or both, through counsel
selected by Licensor in Licensor's sole discretion. If Licensor so exercises
said option, Licensor shall not be obligated to pay any attorneys' fees incurred
by Licensee in respect of any such Claim after Licensor's election of such
option to defend against such Claim. In the event that Licensee at any time
becomes aware of any infringement of the Trademarks by any third party, Licensee
shall immediately notify Licensor, and Licensor at its option shall have the
exclusive right (but shall not be obligated) to assert any claim or demand or
file any suit for infringement of the Trademarks, through counsel selected by
Licensor in Licensor's sole discretion. Licensee shall cooperate with Licensor
in the assertion of any such claim or demand and in the conduct of any suit for
infringement of the Trademarks.
8. Termination. This Agreement and all rights granted herein shall
terminate upon written notice from Licensor to Licensee in the event that: (a)
Licensee violates any of the laws or regulations of any governmental authority
in any or all of the Territory with respect to the manufacture or sale of the
Products, and Licensee fails to cure any such violation within thirty (30) days
after receiving written notice, or oral notice actually received by management
of Licensee, of such violation from any applicable governmental authority; (b)
Licensee fails to
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comply with any of its obligations under this Agreement; (c) if Licensee becomes
unable to pay its debts, becomes insolvent, and/or if a receiver is appointed or
applied for against Licensee, or if a petition in bankruptcy, insolvency, or
corporate reorganization act is filed by or against Licensee; (d) failure of
Licensee to pay royalties hereunder in the amounts and on the dates as required
by the terms of Section 9 hereof, (e) upon sixty (60) days' notice of
termination from Licensor, or (f) any competitor or any affiliate of any
competitor of Licensor, or any of Licensor's affiliates, directly or indirectly,
acquires "control" of Licensee, as that term is defined in the Securities Act of
1933, as amended, and the regulations promulgated thereunder, or if five percent
(5%) or more ownership interest in Licensee becomes owned directly or indirectly
by a competitor or any affiliate of any competitor of Licensor, or any of
Licensor's affiliates, or Licensee becomes otherwise affiliated, directly or
indirectly, with any competitor of Licensor or any of Licensor's affiliates,
without Licensor's written approval, which shall not be unreasonably withheld.
Licensee may terminate this Agreement upon written notice to Licensor in the
event of Licensor's failure under subsection 8(b), applicability of 8(c) to
Licensor, or 8(e) only.
Sixty (60) days after termination or expiration of this Agreement,
however caused, all rights and privileges of Licensee hereunder shall terminate,
and Licensee shall not thereafter make any use whatsoever of any of the
Trademarks, or of any word, design, marking, legend or slogan owned by or
associated with Licensor. During this sixty (60) day period, Licensee shall only
complete work in progress and sell off existing inventory. Furthermore, Licensee
shall, at its own expense, forthwith remove, efface or destroy all references to
any of the Trademarks from all places where they appear, and Licensee shall not
thereafter hold forth in any manner whatsoever that it has or ever has had any
connection with Licensor or the Trademarks. Licensee's obligation to pay to
Licensor any and all royalties accrued prior to any termination or expiration
hereunder shall survive such termination or expiration.
9. Consideration to Licensor.
(a) In further consideration of the License granted hereunder,
Licensee shall pay to Licensor a running royalty equal to three percent (3%) of
net sales of Products twenty-five (25) days after the calendar year end or
twenty-five (25) days after termination for any reason, whichever is applicable.
As used herein, "Net Sales" shall mean gross sales less cash discounts and
merchandising allowances, but in no case shall Net Sales price, for purposes of
royalty calculation, fall below Thirteen Dollars and Fifteen cents ($ 13.15) per
case of Banana Cookies,
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which for the purposes of this Agreement shall be defined as twelve (12) boxes
of 10.25 oz. (approximate weight) Banana Cookie packages ("Banana Cookie Case");
and Ten Dollars and Twenty-Five cents ($10.25) per case of Banana Strawberry
Fruit Bars, which for the purposes of this Agreement shall be defined as twelve
(12) boxes of 12 oz. (approximate weight) Banana Strawberry Fruit Bar packages
("Banana Strawberry Fruit Bar Case").
(b) Licensee shall pay to Licensor the following additional royalty
payments:
i. $40,000 on the date of execution hereof; and
ii. $20,000 on December 9, l996.
(c) Licensee shall keep complete books and records of all
manufacture and sales of the Products, and Licensor, or Licensor's designated
representatives, shall have the right at all reasonable times from the
commencement of the Term until two (2) years after the termination of the
License to audit the books, records and operations of Licensee with respect to
such manufacture and/or sales. By the twenty-fifth (25th) day from the end of
each calendar month, Licensee shall provide to Licensor a report generally
following the format shown in attached Exhibit C, setting forth at least the
number of cases of Products manufactured and sold, and corresponding gross sales
and applicable cash discounts and/or merchandising allowances for the previous
calendar month, and shall provide a summary report of all twelve months for each
year along with the yearly royalty payment required under subparagraph 9(a)
above.
(d) During the Term of this Agreement and afterwards, Licensee shall
not disclose to any person without the prior written consent of Licensor any
information relating to Licensor's business which comes to its knowledge in the
course of its dealings with Licensor.
(e) In order to ensure the quality and specific taste and other
desired characteristics associated with Products to be sold under the
Trademarks, it is agreed that Licensee shall obtain all its requirements of
banana related products for the manufacture of the Products from Licensor or an
affiliate of Licensor, and shall not use third party sources for such
ingredient(s) in the Products so long as Licensor is in a position to sell such
ingredient(s) to Licensee.
If Licensor is unable, for any reason, to supply Licensee's
requirements of such ingredients, Licensor shall have no liability to Licensee,
and Licensee may satisfy such shortfall with other sources, provided such
products and sources are
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approved in advance, in writing, by Licensor, and meet the quality control
provisions of paragraph 3 herein, and only for so long as Licensor is not
prepared to provide all of Licensee's requirements for such ingredient(s).
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
11. Waivers. No waiver by either Licensor or Licensee of any violations
of, or default in, any of the provisions of this Agreement shall be deemed a
waiver of any similar or other provisions hereof at the same time or at time
subsequent thereto.
12. Assignment. The License hereby granted is restricted to use by
Licensee and shall not be assigned or sublicensed to or exercised by any other
person, firm, corporation or other entity without the prior written consent of
Licensor. Subject to the foregoing sentence, this Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their respective
successors and assigns.
13. Relationship of Parties. Nothing contained herein shall be deemed to
constitute this as an employment or partnership agreement, it being fully
understood and agreed that in the course of carrying out this appointment,
Licensee will be acting as its own agent and assumes full responsibility for its
own account and for all or any of its employees which it may engage in the
furtherance of. this Agreement. Under no circumstances shall Licensee be deemed
the agent or representatives of Licensor.
14. Notices. All notices to be given hereunder shall be in writing, and
shall be deemed to have been given three (3) days after placed in the United
States mail, registered or certified, postage prepaid, return receipt requested
or upon receipt if personally delivered, addressed to the parties as follows:
Licensor: Xxxxxxxx Brands, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xx. Xxxxx XxXxxxx
With a copy to: General Counsel, Xxxxxxxx Brands, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx Xxxx 00000
Licensee: Delicious Cookie Company, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
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With a copy to: Xxxxxx X. Xxxxxx, Esq.
Stoll, Miskin, Previto & Xxxxxxx
Suite 6110, The Empire State Building
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any party may from time to time change its above address for notices upon
written notice to the other party in accordance with this paragraph.
15. Severability. Every provision of this Agreement is intended to be
severable. The validity or enforceability of any provision or provisions hereof
shall not affect the validity or enforceability of any other provision hereof.
16. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof and supersedes all prior
agreements and negotiations of the parties, oral or written, with regard
thereto. This Agreement may not be modified except by written agreement of the
parties.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Brokers. Licensee shall, at all times prior to entering into a broker
relationship with any third party, meet and negotiate in good faith with brokers
with whom Xxxxxxxx may at that time have oral or written contracts. for the sale
of Xxxxxxxx or other products ("Xxxxxxxx Brokers"). Licensee shall not
unreasonably reject the Xxxxxxxx Brokers Licensor acknowledges that at the time
of the execution of this Agreement, Licensee may have an existing contractual
relationship with a broker who is not associated with Licensor. In such case, if
that relationship subsequently terminates or if Licensee desires to establish a
new brokerage relationship, Licensee shall meet and negotiate in good faith with
Xxxxxxxx Brokers for the sale and brokerage of the Products prior to negotiating
with any third party brokers, and Licensee shall not unreasonably reject
Xxxxxxxx Brokers. Xxxxxxxx shall identify the Xxxxxxxx Brokers to Licensee on
the date of execution hereof, and from time to time during the Term hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
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"LICENSOR"
XXXXXXXX BRANDS, INC.
By: [Illegible]
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Its: COO - Domestic Div.
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"LICENSEE"
DELICIOUS COOKIE COMPANY, INC.
By: [Illegible]
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Its: Chairman
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EXHIBIT A
Trademarks:
XXXXXXXX
XXXXXXXX Logo (As shown, and in proper blue and yellow
colors)
XXXXXXXX Banana Shape Trademark (three dimensional shape
one-half of a banana sliced lengthwise)
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EXHIBIT B
[XEROX OF PACKAGING]
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EXHIBIT B
Delicious/Frookie Company, Inc.
Xxxxxxxx Banana-Strawberry Fat Free Fruit Bars
Product Specifications
March 23, 1995
Product: Xxxxxxxx Banana-Strawberry Fat Free Fruit Bars
Pack Size: 12 ounces
Manufacturing/
Formula: Product shall be manufactured in accordance with
official formula.
The fruit filling is being produced by Xxxxx Xxxxxxx in
Chicago, Illinois.
The actual cookie fruit bar (base cake and filling) is being
produced by General Xxxxx in DuQuoin, Illinois whose equipment
is 100% dedicated to fruit bar production
Shelf Life: Product has a guaranteed 6 month shelf life
Packaging: Product is packaged in a metallized film structure
(metallized polypropolene laminated to clear
polyester) which provides optimum barrier
properties required for fat free cookie products
Case: product is shipped in 12 count cases
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EXHIBIT B
[XEROX OF PACKAGING]
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EXHIBIT C
MONTH OF __________________
# OF
CASES GROSS NET ROYALTY
SOLD SALES SALES RATE ROYALTY
---- ----- ----- ---- -------
----------- ----------- ----------- ----------- -----------
TOTAL ----------- ----------- ----------- ----------- -----------
