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EXHIBIT 10.22
MANUFACTURING AND DISTRIBUTION AGREEMENT BY
AND BETWEEN THE COMPANY AND MISTIC BRANDS, INC.
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MANUFACTURING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT dated as of July , 1996 , between SARATOGA BEVERAGE GROUP, INC.,
a Delaware corporation ("SARATOGA"), and MISTIC BRANDS, INC., a Delaware
corporation ("MISTIC").
WITNESS:
WHEREAS, SARATOGA is the owner and the licensor of the trademark Saratoga Splash
(the "TRADEMARK"); and
WHEREAS, MISTIC is desirous of being granted a license by SARATOGA to
manufacture and package certain sweetened, flavored, non-carbonated beverages
made with spring water, as specifically set forth in Exhibit A hereto (the
"BEVERAGES") for sale under the TRADEMARK within the defined and limited
territory described in Exhibit B hereto (the "TERRITORY"); and
WHEREAS, SARATOGA is willing to grant such license to MISTIC upon the terms and
subject to the conditions herein set forth:
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
SARATOGA and MISTIC hereby agree as follows:
SECTION 1. GRANT OF LICENSE BY SARATOGA TO MISTIC
(1.1) EXCLUSIVE LICENSE. SARATOGA hereby grants to MISTIC an
exclusive license to manufacture, package, and sell the
BEVERAGES within the TERRITORY, subject to the terms set forth
in this Agreement.
(1.2) MANUFACTURING. The BEVERAGES shall be manufactured in
accordance with the standards, formulae, and procedures
established and revised by MISTIC from time to time, subject
to approval by SARATOGA, which approval will not be withheld
unreasonably. MISTIC and/or third party co-packers contracted
by MISTIC shall furnish all ingredients other than water
necessary to manufacture the BEVERAGES, including sweetener,
sodium benzoate, potassium sorbate, citric acid and packaging
materials. MISTIC will obtain water either from SARATOGA or
from another spring source in accordance with Section 2.3
hereof.
(1.3) PACKAGING. The BEVERAGES shall be packaged in containers of
the types, designs and sizes specified in Exhibit A.
(1.4) SALE. MISTIC is authorized to distribute and sell the
BEVERAGES within the TERRITORY. Any sub-distributorship
arrangements of MISTIC for the BEVERAGES shall be subject to
approval by SARATOGA, which approval will not be withheld
unreasonably.
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(1.5) USE OF TRADEMARK. MISTIC is authorized and licensed to use the
TRADEMARK on containers for the BEVERAGES in such form and
manner as shall be permitted by SARATOGA.
(1.6) ROYALTIES. For each physical case of BEVERAGES sold in any
part of the TERRITORY east of the Mississippi River, MISTIC
shall pay to SARATOGA a royalty of $.50, and for each physical
case of BEVERAGES sold in any part of the TERRITORY west of
the Mississippi River, MISTIC shall pay to SARATOGA a royalty
of $.25, provided, however, that the per case royalties shall
be reduced by 20% for each case sold after the first 500,000
physical cases in any calendar year. Royalties will be
calculated based on shipments to MISTIC customers, net of
returns for sub-standard product and shall be payable thirty
(30) days after the end of each month. For purposes of this
Section 1.6, a "physical case" will consist of either 24
16-ounce or 16.9-ounce bottles or 12 one-liter bottles.
SECTION 2. MISTIC'S COVENANTS
(2.1) MANUFACTURE AND PACKAGING. MISTIC shall comply with all
instructions, formulae, standards, manufacturing
specifications, production and warehousing procedures and
quality control criteria and procedures in the manufacture and
packaging of the BEVERAGES which are from time to time
prescribed by MISTIC for the purpose of assuring production
and sale of BEVERAGES of uniform standards and quality. The
standards, specifications, criteria and procedures prescribed
by MISTIC shall be consistent with industry standards. MISTIC
will comply with all applicable laws and regulations with
respect to the manufacture, packaging and labeling of the
BEVERAGES and the operation of its business.
(2.2) SUB-STANDARD PRODUCT. In the event of a failure by MISTIC to
comply with any required standards, formulae and procedures
which would cause the BEVERAGES to be sub-standard, or should
any of the BEVERAGES not comply with the standards for any
reason, then MISTIC will immediately cease all further
production and shipment of the subject BEVERAGES until such
failure is corrected and, if requested by SARATOGA, MISTIC
will promptly recall to MISTIC's warehouse(s) or plant(s) any
such sub-standard product, at MISTIC's sole expense. MISTIC
will conduct any such recall in accordance with industry
standards.
(2.3) SARATOGA WATER. MISTIC may, but is not obligated to, purchase
water necessary to manufacture BEVERAGES from SARATOGA.
SARATOGA shall fill all orders placed by MISTIC for water
necessary to manufacture the BEVERAGES. The price for such
water supplied by SARATOGA shall be equal to SARATOGA's direct
costs, i.e. the cost incurred by SARATOGA to get the water
from the ground into a tanker or other container for shipment.
MISTIC shall bear the costs of freight to the production
location. Any water obtained by MISTIC from sources other than
SARATOGA used in the manufacture of the BEVERAGES shall be
subject to approval by SARATOGA, which approval will not be
withheld unreasonably.
(2.4) QUALITY CONTROL. MISTIC shall develop quality control sampling
and reporting procedures for the BEVERAGES which are similar
to the quality control sampling and
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reporting procedures MISTIC uses with respect to its branded
products. At SARATOGA's request, MISTIC shall furnish product
samples to SARATOGA.
(2.5) SALES PROMOTION AND ADVERTISING. MISTIC shall develop
point-of-sale material bearing the TRADEMARK. MISTIC shall
submit such material and all other sales, promotional and
advertising materials not prepared by SARATOGA and depicting
the TRADEMARK in writing to SARATOGA for its prior written
approval.
(2.6) BOOKS AND RECORDS. MISTIC shall maintain full and accurate
books and records showing production and sales of the
BEVERAGES and shall furnish monthly reports with respect
thereto to SARATOGA.
(2.7) INDEMNIFICATION OF SARATOGA. MISTIC shall protect, indemnify
and save and hold SARATOGA harmless from and against any and
all fines, claims, costs, expenses (including attorney fees
and court costs), demands, damages, actions, causes of action
and other liabilities of every kind and nature whether
involving negligence, breach of warranty, product liability,
strict liability of other underlying theory of liability,
arising or resulting directly or indirectly from the
manufacture, distribution and sale of any BEVERAGES and not
due to any impurity, adulteration or misbranding of water
supplied by SARATOGA as of the time of delivery to MISTIC by
SARATOGA. At the request of SARATOGA, MISTIC will defend
SARATOGA in connection with any claim, suit, action or
proceeding covered by such indemnification.
(2.8) PRODUCT LIABILITY INSURANCE. MISTIC will obtain and maintain
product liability insurance at least in the amounts of
$10,000,000 for bodily injury to any person per any one
occurrence, $10,000,000 for bodily injury sustained by two or
more persons per any one occurrence, and $5,000,000 for
property damage per any one occurrence, and shall furnish to
SARATOGA within fifteen (15) days after the date of this
Agreement a certificate of insurance establishing that such
insurance is in effect and shall not be canceled or modified
on less than thirty (30) days' prior written notice to
SARATOGA.
SECTION 3. SARATOGA COVENANTS
(3.1) FOOD, DRUG, AND COSMETIC ACT AND OTHER GUARANTEES. SARATOGA
hereby guarantees to MISTIC that all articles comprising each
shipment or other delivery of water pursuant to this
Agreement, as of the time of delivery, shall not be
adulterated or misbranded within the meaning of the Federal
Food, Drug, and Cosmetic Act and shall not be an article or
articles which may not under the provisions of said Act be
introduced into interstate commerce. SARATOGA further
guarantees that all said articles shall comply with and be
manufactured and shipped under and in accordance with all
other applicable federal laws, rules and regulations as of the
time of delivery, and that such articles shall be merchantable
and fit for the intended purpose as of the time of delivery.
(3.2) INDEMNIFICATION OF MISTIC. SARATOGA shall indemnify and save
harmless LICENSEE from and against any loss, claim or damage,
including reasonable attorney's fees, resulting from any
breach of the above stated warranties by SARATOGA in
connection with the shipment and delivery of water sold to
MISTIC.
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(3.3) THE TRADEMARK.
(1) SARATOGA represents and warrants to MISTIC that
SARATOGA has the right to grant the license with
respect to the use of the TRADEMARK hereby granted in
accordance with the terms hereof.
(2) SARATOGA agrees that it will indemnify and hold
MISTIC harmless from and against any and all costs,
losses and liabilities, including reasonable attorney
fees, arising out of or resulting from any claims
that the authorized use by MISTIC of the TRADEMARK
pursuant hereto, and any and all other of SARATOGA's
distinctive markings, designs, labels or other marks
used by LICENSEE pursuant to this Agreement infringe
the trademarks of another, and SARATOGA will defend
any such trademark infringement claim, suit, action
or proceeding by any person, firm or corporation
against MISTIC.
(3) Subject to Section 3.3 (1) hereof, MISTIC
acknowledges the validity of and ownership by
SARATOGA of the TRADEMARK and in connection with the
sale of the BEVERAGES agrees to take no action which
would prejudice or interfere with such validity or
such ownership.
(3.4) OTHER LICENSEES. So long as this Agreement remains in effect,
SARATOGA agrees that it will not license any other individual,
corporation, partnership, unincorporated association or other
entity to manufacture or package and to distribute, sell or
deal in the BEVERAGES for sale under the TRADEMARK within the
TERRITORY and SARATOGA will not itself distribute, sell or
deal in the BEVERAGES for sale under the TRADEMARK within the
TERRITORY.
(3.5) RIGHTS TO DESIGN AND FORMULAE. SARATOGA acknowledges that
MISTIC owns the rights to the formulae, design and processes
of the BEVERAGES.
SECTION 4. COVENANTS OF BOTH PARTIES
(4.1) FORCE MAJEURE. Neither MISTIC nor SARATOGA shall be held
liable for any failure to comply with any of the terms of this
Agreement to the extent any such failure is caused directly or
indirectly by fire, strike, union or other labor problems, war
(whether or not declared), riots, insurrection, government
restrictions or other acts, or other causes beyond the control
of or without fault on the part of either of them. Upon the
occurrence of any event of the type referred to herein, the
party affected thereby shall give prompt notice thereof to the
other party, together with a description of such event and the
duration for which such party expects its ability to comply
with the provisions of this Agreements to be affected thereby.
The party affected shall thereafter devote its best efforts to
remedy to the extent possible the condition giving rise to
such event and to resume performance of its obligations
hereunder as promptly as possible.
(4.2) INDEPENDENT CONTRACTOR. Nothing herein shall be deemed to
constitute MISTIC and SARATOGA as partners, joint venturers or
otherwise associated in or with the business of the other.
MISTIC is and shall always remain an independent contractor
and neither party shall be liable for any debts, accounts,
obligations or other liabilities of the other party, its
agents or employees. Neither party is authorized to incur
debts or other obligations of any kind on the part of or as
agent for the other except as may be
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specifically authorized in writing. It is expressly recognized
that no fiduciary relationship exists between the parties.
SECTION 5. THIRD PARTY PRODUCTION
(5.1) MISTIC ARRANGEMENTS. MISTIC will arrange for the manufacture
and packaging of the BEVERAGES by third party producers. Such
third party producers shall be subject to approval by
SARATOGA, which approval will not be withheld unreasonably.
SECTION 6. TERMINATION OF LICENSE
(6.1) TERMINATION WITHOUT NOTICE. This Agreement and any and all
rights of MISTIC hereunder and any and all obligations of
SARATOGA hereunder shall immediately terminate upon the
occurrence of any of the following:
(1) The cessation by MISTIC of its business; or
(2) The insolvency of MISTIC, the filing by or against
MISTIC of a voluntary or involuntary petition
pursuant to any present or future act of the Federal
Congress on the subject of bankruptcy, or the
institution of any proceeding or arrangement by or
against MISTIC relating to or in the nature of a
bankruptcy, insolvency or assignment for the benefit
of creditors, which proceeding or arrangement is
consented to by MISTIC or is not dismissed or
discontinued within thirty (30) days after the
institution of such proceeding or arrangement.
(6.2) TERMINATION BY SARATOGA UPON NOTICE. This Agreement may be
terminated at any time by SARATOGA in the event that MISTIC
shall fail to perform any of the covenants and obligations
herein contained to be performed by MISTIC by written notice
of such failure delivered to MISTIC by SARATOGA, stating the
nature and character thereof and allowing MISTIC a reasonable
period of time as determined and specified by SARATOGA in such
notice to correct such failure, unless such failure of
performance has resulted from an event of the type described
in Section 4.1, in which case such notice shall allow MISTIC
the period of time specified in the notice of such event from
MISTIC to SARATOGA as necessary to correct such failure. If
such failure has not been corrected by MISTIC within the
period specified in the notice given under this Section 6.2,
or under Section 4.1, SARATOGA may terminate this Agreement
forthwith.
(6.3) TERMINATION BY SARATOGA UPON CHANGE IN CONTROL. In the event
of a change in control of MISTIC, SARATOGA may terminate this
Agreement immediately upon written notice. For purposes of
this Agreement, the term "change in control" shall mean (i)
the acquisition by any person of 50% or more of the combined
voting power of MISTIC or Triarc Companies, Inc. ("Triarc") or
(ii) a majority of the directors of MISTIC or Triarc being
individuals who are not nominated by the board of directors of
MISTIC or Triarc, as the case may be. The acquisition of any
portion of the combined voting power
of MISTIC or Triarc by Triarc Acquisition Group, L. P., Xxxxxx
Xxxxx or Xxxxx Xxx, or by any person affiliated with such
persons, shall in no event constitute a change in control.
(6.4) TERMINATION BY MISTIC UPON NOTICE. This Agreement may be
terminated at any time by MISTIC in the event that SARATOGA
shall fail to perform any of the covenants and obligations
herein contained to be performed by SARATOGA upon sixty (60)
days
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prior written notice to SARATOGA by MISTIC stating the nature
and character thereof and allowing SARATOGA ninety (90)
consecutive calendar days from the date of such notice to
correct such failure, unless such failure of performance has
resulted from an event of the type described in Section 4.1,
in which case such notice shall allow SARATOGA the period of
time specified in the notice of such event from SARATOGA to
MISTIC as necessary to correct such failure. If such failure
has not been corrected by SARATOGA within the period specified
in the notice given under this Section 6.3, or under Section
4.1, MISTIC may terminate this Agreement forthwith.
(6.5) VOLUNTARY TERMINATION BY MISTIC. MISTIC may elect at any time
to cease its business under this Agreement entirely. If it so
elects, it shall give SARATOGA sixty (60) days' prior written
notice of its intention to do so. The termination of this
Agreement shall be effective as of the expiration of such
sixty (60) day period or such earlier date as any new licensee
appointed by SARATOGA may commence business.
(6.6) WAIVER. The failure of either party to give notice of
non-performance or termination shall not constitute a waiver
of the covenants, terms or conditions herein, or of the rights
of either party thereafter to enforce such covenants, terms or
conditions or to terminate this Agreement upon any subsequent
occurrence or date.
SECTION 7. MISCELLANEOUS
(7.1) TERM. This Agreement shall commence on the date this Agreement
has been signed by both parties hereto and shall remain in
force indefinitely unless terminated in accordance with
Section 6 of this Agreement.
(7.2) NOTICES. Any notice to be given pursuant to the provisions of
this Agreement shall be in writing and shall be sent by
registered mail, addressed in the case of SARATOGA to:
Saratoga Beverage Group, Inc.
Attention: President
00 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx
and in the case of notice to MISTIC to:
Mistic Brands, Inc.
Attention: President
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
(7.3) ONLY AGREEMENT. This Agreement (which terms for the purpose
hereof shall mean and include any and all Exhibits hereto)
contains the complete agreement between the parties in respect
of the subject matter hereof, and any and all prior agreements
relating to the subject matter hereof are superseded in their
entirety hereby. Except as specifically provided herein, this
Agreement may not be amended or supplemented , nor
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any of the provisions hereof waived, except by an agreement in
writing signed by SARATOGA and MISTIC.
(7.4) GOVERNING LAW. This Agreement shall be interpreted and
governed by the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized representative as of the date first above
written.
SARATOGA BEVERAGE GROUP, INC.
Attest:
By: /s/
-------------------------- --------------------------
Xxxxx Xxxxxx
(CORPORATE SEAL)
MISTIC BRANDS, INC.
Attest:
By: /s/
-------------------------- -------------------------
Xxxxxxx Xxxxxxxxx
(CORPORATE SEAL)
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EXHIBIT A
SARATOGA SPLASH FLAVORS:
CONTAINERS: 16-ounce, 1/2 liter and 1 liter colored PET bottles with sports
caps.
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XXXXXXX X
XXXXXXXXX: Xxx Xxxxxx Xxxxxx and its territories, excluding the New York
counties of Kings, Queens, Bronx, Brooklyn, Richmond, Nassau and Suffolk, plus
the islands located in the Caribbean Sea.
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