EXHIBIT 10.1
BRAVO MASTER DISTRIBUTION AGREEMENT
THIS MASTER DISTRIBUTION AGREEMENT (the "Agreement") is made by and
between Bravo! Foods International Corp. (the "Company"), a corporation
organized and existing under the laws of the State of Delaware and having
its principal place of business at 11300 US Highway No. 1, North Palm
Beach, FL 33408, and Coca-Cola Enterprises Inc., a corporation organized
and existing under the laws of the State of Delaware, having its principal
place of business at 2500 Windy Ridge Parkway, Atlanta, GA 30339
("Distributor, " and as Distributor is defined further below).
To achieve the purposes referred to below, and in consideration of
the mutual covenants and agreements set forth in this Agreement, Company
and Distributor hereby agree as follows:
1. Statement of Purpose and Mutual Intention.
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Company is the developer, marketer and seller of various nonalcoholic
beverages (the "Products") and the owner or licensee of the trademarks on
Exhibit 1 in connection with non-alcoholic beverages (the "Marks") Company
desires to authorize Distributor as its exclusive master distributor for
the Products in all of the United States and Canada and certain countries
in Europe (defined as the Territory below), and further for Distributor to
authorize the subdistribution of the Products in the Territory by
subdistributors selected by Distributor.
2. Definitions.
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As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" of a specified Person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified Person. For purposes of
this definition, "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of the
management and polices of a person, whether through the ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise.
"Beverage Competitor" means PepsiCo, Inc., Cadbury Schweppes, Inc. or
any other company engaged in the manufacturing or distribution of
nonalcoholic beverage products.
"Case" means a 12-count physical case of Products.
"Distributor" means Coca-Cola Enterprises Inc., a corporation
organized and existing under the laws of the State of Delaware, its
divisions, Subsidiaries, and Affiliates.
"Change of Control" means such time as (a) any persons other than the
current shareowners or Distributor becomes the beneficial owner (as such
term is used in Section 13(d) of the Securities Exchange Act of 1934 or the
rules promulgated thereunder), directly or indirectly, of more than 50% of
the total voting power of Company or has, directly or indirectly, acquired
any significant rights to the Marks, or (b) any Beverage Competitor becomes
the
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beneficial owner of any of the voting power of Company or has, directly or
indirectly, acquired any significant rights to the Marks.
"Governmental Authority" means any U.S. federal, state or local
government or governmental entity or any foreign government or governmental
entity or any political or other subdivision, department or branch thereof
or any regulatory, administrative or other agency or any court, tribunal or
other judicial or quasi judicial authority of any of the foregoing.
"Laws" means any applicable national, European Union, federal, state,
parish, provincial or local law, statute, ordinance, rule, regulation,
code, order, judgment, injunction or decree of any country.
"Losses" means any damages, losses, liabilities, claims, charges,
actions, suits, proceedings, deficiencies, taxes, interest, penalties, and
costs and expenses (including court costs and reasonable attorneys' fees
and expenses).
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, group, trust,
association or other organization or entity or government, political
subdivision, agency or instrumentality of a government.
"Products" means those products that the Company, currently or in the
future during the Term, produces, markets or distributes for sale in the
Territory; the Company's current Products are listed in Exhibit 2, which
Exhibit may be amended from time to time to add new products, if
applicable, in accordance with Section 6 below;
"Subdistributor" means any entity appointed by Distributor to
distribute Products pursuant to a Subdistribution Agreement consistent with
the terms of this Agreement.
"Subdistribution Agreement" means an agreement for the
subdistribution of Products in the Territory.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (i) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (ii) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(iii) the beneficial interest in such trust or estate, is at the time
directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
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"Territory" means the entirety of the United States, all U.S.
possessions, Canada, Belgium, continental France, Great Britain,
Luxembourg, Monaco and the Netherlands, as well as any other geographic
territory to which, during the term of this Agreement, Distributor obtains
the license to distribute beverages of The Coca-Cola Company.
The following additional terms have the meanings set forth in the
Sections set forth below:
Definition Location
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<s> <c>
A.A.A. [SECTION] 27.2
Act [SECTION] 10.3
Agreement Preamble
Assumption Date [SECTION] 3.6
Company Preamble
Delay [SECTION] 3.3.2
Distributor Preamble and 2
Effective Date [SECTION] 3.1
Effective Distribution Date [SECTION] 3.1
Excluded Liabilities [SECTION] 4.6
Load-In Cases [SECTION] 3.8
Marks [SECTION] 1
Products [SECTION] 1 and 2
Term [SECTION] 11
3. Establishment of Distributorship; Cooperation; "Load In".
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3.1 This Agreement shall become effective and binding upon all
parties that are signatories hereto upon the full execution of this
Agreement by all such parties (the "Effective Date"). Except as otherwise
specifically provided in this Agreement, Company hereby appoints
Distributor to be the exclusive master distributor of the Products in all
packages and sizes in the Territory for all existing and future channels of
distribution and customer accounts. This appointment is to be effective as
of October 31, 2005 (the "Effective Distribution Date"). Distributor and/or
Subdistributors shall buy the Products only from Company or its duly
authorized appointee(s). Except as otherwise specifically provided in this
Agreement, or as authorized in writing by Distributor, Distributor shall be
the exclusive distributor of Products in the Territory, and Company shall
not sell or distribute Products in the Territory from and after the
Effective Distribution Date.
3.2 As of the Effective Distribution Date, Distributor will
promptly begin distribution in the portions of the United States where
Distributor currently operates. Distribution in the rest of the Territory
shall occur later as notified by Distributor to Company.
3.3 The procedure for the transition of the Company's current
distribution system to Distributor's system (initially in the United States
as noted above) shall be governed by the following:
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3.3.1 By August 15, 2005, Company will provide (i) a list of
all of its retail accounts within the Territory to which the Company
sells through brokers or directly and copies of all agreements with
such retail accounts or brokers; (ii) a list of all distributors
within the Territory and copies of all agreements with such
distributors, (iii) to the extent possible, a designation of retail
accounts currently serviced by each listed distributor; and (iv) the
details of all retail account-specific distribution arrangements and
copies of any retail account agreements governing such arrangements
(e.g. 7-Eleven and Walgreen's). The Company will provide accurate
contact information to Distributor for all retail accounts,
distributors and brokers.
3.3.2 Based on the information provided under Section 3.3.1,
and after consultation between Company and Distributor, on or before
August 31, 2005, Company and Distributor shall agree on Exhibit 3.3.2
to be attached and incorporated into this Agreement, which Exhibit
shall set forth which retail accounts, brokers and distributors
Company will continue to supply, subject to Sections 3.3.3 and 3.6.
Except as otherwise specifically provided in Exhibit 3.3.2 attached
to this Agreement, and except as provided in Section 3.6 below, on or
before the Effective Distribution Date, Company will properly and
lawfully terminate all current distribution agreements in the
Territory. If the termination of any existing distribution agreement
is legally challenged and Distributor is not legally permitted to
begin distribution on the Effective Distribution Date (a "Delay"),
the portion of the Territory at issue will not be subject to this
Agreement during the pendency of the Delay, and Distributor will
assume the portion of the Territory at issue once the legal issues
related to the challenge have been resolved to Company's
satisfaction.
3.3.3 While the Company will use best efforts to transfer all
of its distribution to Distributor, the parties understand and
acknowledge that certain retail accounts' agreements with Company as
set forth on Exhibit 3.3.2 may require methods of delivery other than
direct store delivery (DSD) distribution, and the Company reserves
the right to continue such methods of delivery for such retail
accounts. However, except for Company's arrangement with Tabatchnick
Fine Foods, Inc. described on Exhibit 3.3.2, such arrangements shall
immediately cease at such time as Distributor provides the
distribution methods required by the applicable retail account, and
the provisions of Section 3.7 with respect to sharing of cost savings
shall apply to all Cases sold to these customers until Distributor
does so.
3.4 Company and Distributor shall cooperate with each other during
the period commencing on the Effective Date hereof and through the
Effective Distribution Date to ensure the orderly transition of the
Products' distribution in the Territory to Distributor and/or
Subdistributor, and to minimize the disruption to the marketing and sale of
the Products in the Territory during such transition.
3.5 Except as provided in Section 3.6 below and Exhibit 3.3.2, in
the event that additional territories later are made subject to this
Agreement in the future, and except as may be otherwise specifically
provided in connection with such additional territories, Company shall
properly and lawfully terminate all distribution agreements in such
additional territories, on or before the effective date that such
additional territories are made subject to this Agreement.
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3.6 Distributor reserves the right to permit the continuation of
existing distribution arrangements by Company and its other distributors
after the Effective Distribution Date as set forth on Exhibit 3.3.2.
However, except for Company's arrangement with Tabatchnick Fine Foods, Inc.
described on Exhibit 3.3.2, Distributor shall have the right, on not less
than 30 days' prior written notice, to assume such existing arrangements,
and at such time (the "Assumption Date") Company shall immediately comply
with section 3.3.2 or 3.5 above, as applicable. In determining when and if
to exercise its right to assume existing distribution arrangements,
Distributor shall use commercially reasonable best efforts to develop plans
designed to prevent the loss of a material portion of the volume of
Products sold pursuant to such arrangements.
3.7 Company agrees that it shall actively work to achieve cost
savings on the Products from its suppliers of raw materials, ingredients
and services. Company shall share one-half of all such cost savings (where
such cost is reduced below the cost per bottle shown on Exhibit 3.7 by
Product) with Distributor on a per-Case basis for all Products sold to
others during the Term pursuant to Section 3.3.3 and 3.6. All such cost
savings shall be paid quarterly by Company, along with a detailed report
and accounting reasonably satisfactory to Distributor. Distributor shall
have the right throughout the Term to have access to and right to examine
directly pertinent books, papers, documents, accounts and records of
Company relating to the above-mentioned cost savings to ensure the
provisions of this Section 3.7 are being carried out.
3.8 Company shall ensure that its current distributors, brokers or
retail accounts do not "load-in" excess amounts of Products into the market
prior to the Effective Distribution Date. For purposes of this Agreement,
"Load-In Cases" shall be defined as any volume of Cases of Products sold to
Company's existing distributors following notification of termination that
is in excess of 10% over the average amount of monthly volume sold to the
applicable retail account during the 3 month period prior to notification.
Company will provide Distributor with monthly distributor shipment
information for 2005 year to date and prior year.
4. Distributor's Responsibilities; Excluded Liabilities.
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Except as otherwise described in this Agreement, following the
Effective Distribution Date, Distributor will manage, in reasonable
consultation with Company, all aspects of the sale and distribution of the
Products in the Territory, either itself or through Subdistributors. In
this regard, Distributor shall be responsible for:
4.1 Using all commercially reasonable efforts to solicit, procure
and obtain orders of the Products and actively promoting the sale of the
Products in the Territory by, among other things, calling on customers;
distributing point-of-sale materials furnished by Company; rendering
written reports to Company, in form and substance and at such times as
Company reasonably requests. Such efforts shall be commercially reasonable
and will be consistent with Distributor's efforts on behalf of other shelf
stable dairy drink brands, if any, as well as consistent with the Products'
sales volume, required days of supply, velocity and other equivalent
measures.
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4.2 Merchandising the Products using only advertising materials
supplied by or pre-approved by Company. Distributor will not alter the
Product logo, or create any slogans, claims or other advertising materials
to market the Products, without written approval from Company. Company
shall not unreasonably withhold approval of the advertising materials or
the suppliers thereof, subject to the approval by the applicable licensor
of the use of the licensed Marks, in accordance with the approval
procedures set forth in the applicable license agreement.
4.3 Delivering to its customers within the Territory, either
directly to the stores or through warehouses or brokers.
4.4 Keeping accurate accounts, books and records relating to the
business of Distributor and making available information with respect to
all of its transactions in connection with the sale of the Products.
4.5 Conducting its business in accordance with all applicable Laws,
including obtaining and maintaining in effect all necessary permits,
liability insurance and licenses.
4.6 Distributor shall not assume pursuant to the provisions hereof
any of Company's debts, liabilities or obligations whatsoever, whether
accrued, absolute, contingent, known, unknown or otherwise; any accounts
payable; or any Losses arising from or relating to claims asserted by any
third party or Governmental Authority to the extent caused by any Products
manufactured, produced, distributed, advertised, marketed or sold prior to
the Effective Date, (collectively the "Excluded Liabilities").
5. Company Obligations.
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Company shall be responsible for:
5.1 All other aspects of the business of the Products in the
Territory not covered in section 4 above, including, without limitation:
the strategic direction of the Products; sales force education and support;
marketing and advertising the Products, including design and development of
point of sale materials and advertising; consumer inquiries; product
development; and the manufacture and supply of the Products; maintenance of
the intellectual property rights necessary for Company to produce, market
and/or distribute and for Distributor to sell the Products in the Territory
during the Term.
5.2 Obtaining, at its own expense, all legal and regulatory
clearances necessary to the manufacture and distribution of the Products in
a particular geography pursuant to this Agreement, and all filings,
maintenance, clearance and enforcement of any trademarks or trade dress
associated with the Products.
5.3 Spending a minimum of $[REDACTED] in the remainder of 2005 and
2006 and thereafter, beginning in 2007, an amount per year in each country
in the Territory equal or greater than [REDACTED]% of Company's total
revenue in such country as reported in Company's Form 10-K on national and
local advertising for Products, including actively marketing the Slammers
mark, based on a plan to be mutually agreed each year.
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5.4 Complying with all license agreements and paying all licensing
fees necessary to ensure Distributor's continued ability to purchase and
distribute the Products.
5.5 Conducting its business in accordance with all applicable
local, state and federal laws and regulations, including obtaining and
maintaining in effect all necessary permits, liability insurance and
licenses and filing of all required tax returns, reports and disclosures.
Failure to file such tax returns, etc., or to correct existing failures to
file by October 31, 2005 shall be deemed to be a material breach hereof.
5.6 Providing Distributor in writing with any handling or other
quality instructions regarding the Products.
5.7 By January 1, 2006, changing the labels on the Products to a
label that is satisfactory to Distributor, e.g, to a label that does not
contain PVC but is similar visually.
5.8 By January 1, 2006, changing to a package for the Products that
vends without issue in Distributor's can/bottle vending machines,
satisfactory to Distributor.
5.9 Ensuring that Products are not released to Distributor or any
other customer prior to all microbiological test results being reviewed and
determined to be in accordance with the copacker's standards and
specifications as approved by Distributor.
5.10 Notifying Distributor of any changes to Product formulations,
manufacturing procedures, handling procedures, ingredients, identity of
copackers, standard operating procedures, GMP's, quality standards or any
changes that impact Product stability, flavor profiles, cost of goods, etc.
so as to obtain Distributor's review and approval of same prior to
implementation.
5.11 By January 1, 2006, documenting a process for handling consumer
complaints, calls and product recalls satisfactory to Distributor and
implementing the documented process.
5.12 Ensuring that appropriate Product stability testing
satisfactory to Distributor is conducted.
5.13 By the Effective Distribution Date, changing the case design to
an open design satisfactory to Distributor.
6. New Products and Packages.
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6.1 Company grants to Distributor a right of first refusal to
negotiate in good faith with Company for the exclusive right to distribute
any additional non-alcoholic beverage products subsequently produced and/or
marketed by Company (whether such additional beverages are marketed under
the Marks, sub-brands of the Marks, in new containers, new trade dress or
line extensions, or as new products or trademarks) under terms and
conditions to be negotiated by Company and Distributor. Company will notify
Distributor in writing of its intention to introduce such additional
beverage products and will negotiate exclusively with Distributor for a 45-
day period from the date of such notification. During the 45 days and
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thereafter, Company will not enter into any agreement with a third party
for such additional product without first offering the same terms and
conditions to Distributor. Distributor will have 15 days to respond to such
an offer. Should Distributor decline the right of first refusal and/or to
meet the offer terms by a third party, or if Company and Distributor are
unable to reach agreement regarding terms of distribution during the 45-day
exclusive negotiation period, Company reserves the right to use another
distributor in the Territory for those products, provided, however, that
beginning one year after Distributor has declined the right of first
refusal, Distributor shall have the right, with 90 days notice to Company,
to later initiate negotiations pursuant to the above procedure for such
additional non-alcoholic beverage products.
6.2 Company shall give Distributor 60 days notice before
introducing an existing Product into a part of the Territory where it had
not been sold before.
7. Competing Products.
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7.1 Distributor shall not cause or authorize the sale or
distribution of Products or the use of the trademarks, or any trade name,
advertising matter or copyrighted materials associated with the Products
except as specifically authorized in this Agreement.
7.2 Distributor agrees that, during the Term, it shall not produce,
promote, advertise, distribute, sell or offer for sale, directly or
indirectly or through an Affiliate, without the prior written consent of
the Company, any beverage bearing a trademark or trade dress that
constitutes an infringement of the Company's intellectual property rights
as set forth in this Agreement, or which is likely to be confused with
Company's intellectual property rights as set forth in this Agreement.
7.3 Except as set forth in Section 7.2 above, nothing contained in
this Agreement shall prohibit Distributor and/or its Subdistributor(s) from
manufacturing, distributing, selling, marketing, and/or advertising any
other beverages, be they dairy drinks or otherwise, and regardless of
whether they are existing products or new products.
8. Recall.
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8.1 Distributor and/or its Subdistributor(s) shall promptly refer
to Company for response to all customer or consumer complaints involving
the health, safety, quality, ingredients or packaging of the Products, or
which in any way could be detrimental to the image or reputation of Company
or the Products, and shall notify Company of any governmental, customer or
consumer inquiries regarding the Products about which Distributor shall
become aware. In the event Company becomes aware of the existence of any
quality or other technical problem relating to the Products or other
packaging for the Products, Company may require Distributor immediately to
take all necessary measures to withdraw or recall the Products concerned
from the market. Company shall notify Distributor by telephone, telefax or
any other form of immediate communication that the Products concerned are
to be withdrawn from the market. Upon receipt of such notice, Distributor
shall immediately cease the distribution of such Products and take all
other measures that are reasonably necessary or reasonably required by
Company in connection with the withdrawal of such Products from the market.
The parties to
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this Agreement shall employ good faith in assisting one another in the
prompt and prudent resolution of any Products crises that may arise.
8.2 Any costs associated with recall and disposal of Products that
arise out of Distributor's or a Subdistributor's failure properly to
handle, store, deliver or rotate the Products in accordance with the
instructions provided by Company to Distributor shall be the responsibility
of Distributor or applicable Subdistributor, as the case may be. Any costs
associated with recall and disposal of Products that arise from any other
cause shall be borne by Company, and promptly paid by Company to
Distributor.
9. Products Pricing and Supply.
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9.1 Company shall sell Products directly to the Distributor and, at
Distributor's option, to Subdistributor(s) in the Territory, at the prices
set forth on Exhibit 9.1A and on the terms and conditions on Exhibit 9.1B,
and on 45 day credit terms. If the terms and conditions on Exhibit 9.1B
conflict with this Agreement, this Agreement shall control. Order
fulfillment and lead time requirements shall be as set forth in Exhibit
9.1C attached to this Agreement.
9.2 Products orders shall be placed directly by Distributor or the
Subdistributor(s). In the event that Company is unable to supply Products
or deliver the same in accordance with the terms hereof because of fires,
strikes, lockouts, accidents, wars, embargoes, delays by carriers, or other
contingencies of the same or a different nature beyond the control of
Company, then Company shall not be liable or responsible for any loss,
damage or delay which may be caused thereby, but if such cause and
Company's failure continues for one hundred and twenty days, then
Distributor may terminate this Agreement upon thirty days' written notice
to Company.
9.3 Company shall maintain sufficient production capacity to
satisfy Distributor and any Subdistributor's forecasted requirements, and
in the event of Company being unable to maintain such capacity or to
otherwise supply Distributor or Subdistributor(s) with sufficient Products
to satisfy their demand, Company shall promptly notify Distributor of such
event and use its best efforts to reallocate demand for the Products so as
to give Distributor priority over other purchasers of the Products.
Distributor shall have the right to terminate if Company is unable to
supply the forecasted amount of Products to Distributor for a period of
time in excess of 59 days. If Company is unable to supply the forecasted
amount of Products to Distributor for a period of time from 15 to 59 days,
Company shall pay Distributor a penalty equal to two times the daily
average, over the past previous 60 day period, of Distributor's aggregate
Net Sales Income on sales of Products, times the number of days that
Company failed to supply Distributor. This penalty shall be reduced in
proportion to the amount by which Company's failure to supply was only a
partial failure. Distributor agrees to provide to Company a rolling three-
month forecast of its requirements, but such forecast shall not create a
binding purchase commitment. In developing the forecast, Distributor will
give due consideration to the Company's existing and anticipated production
capacity during the forecast period, which capacity as of the date of this
Agreement is 2.5 million bottles per month until April 2006, and then 7
million bottles per month thereafter. As Company's capacity changes,
capacity information shall be supplied by the Company within ten (10) days
of the change.
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Company shall use its commercially reasonable best efforts to increase its
access to production capacity to meet Distributor's sales projections as
such projections grow in excess of Company's current and anticipated
capacity set forth above.
9.4 Company agrees that all Products delivered to Distributor or
any Subdistributor shall have a minimum of 20 weeks remaining shelf life.
During the first six months of the Term, Bravo may deliver Products with as
little as 15 weeks remaining shelf life.
9.5 Company will maintain a binding production and capacity
agreement with Jasper Products that will provide for (i) minimum capacity
requirements on a staged basis over the term, (ii) minimum shelf life
requirements (iii) pricing and capacity pursuant to a Guaranteed Capacity
Program, (iv) appropriate Product stability testing, (v) minimum four year
term with automatic extension provisions at Company's sole discretion and
(vi) microbiological testing requirements in accordance with defined
standards and specifications, subject to Distributor's approval. Company
shall ensure that Distributor has the right to conduct production reviews
and inspections at Jaspar and at any other copackers' operations.
10. Representations, Warranties and Covenants.
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10.1 Company and Distributor each represent and warrant that
(a) this Agreement has been duly authorized, executed and delivered by such
party, and constitutes a legal, valid and binding obligation of such party
enforceable against it in accordance with its terms, and (b) the execution
and delivery of this Agreement by such party do not contravene the articles
or certificate of incorporation or by-laws of such party, or contravene or
constitute a default under any material agreement, judgment, injunction,
order, decree or other instrument binding upon such party.
10.2 Company represents, warrants and covenants as follows:
(a) Except for the Tabatchnik agreement described in Exhibit 3.3.2
of this Agreement, it is legally entitled to terminate and/or transfer
without liability to Distributor any existing distribution agreements or
arrangements in the Territory and to grant Distributor the exclusive
distribution rights outlined herein as of the Effective Distribution Date
without violating the rights of any third party, be they contractual or
otherwise.
(b) Except for the Tabatchnik agreement described in Exhibit 3.3.2
of this Agreement, neither Company nor any Affiliate of Company has any
obligation of any kind to existing distributors or anyone else relating to
the Products in the Territory that would affect or impair the rights
granted to Distributor as set forth in this Agreement.
(c) No authorization, consent or approval of any third party or any
Governmental Authority is necessary for Company to consummate the
transactions contemplated by this Agreement.
(d) It now has and throughout the Term will make commercially
reasonable best efforts to secure the legal right and authority to use the
Marks on the Products and all other intellectual property necessary to
manufacture and distribute the Products, in the territories as described on
Exhibit 10.2 attached and to expand such legal right and authority to the
entire
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Territory. Company, with the approval of Distributor, may forgo a license
or the use of a licensed Mark in favor of a substitute licensed mark using
new intellectual property ("New IP Product"). Distributor shall not
unreasonably withhold such approval. Further, Company represents, warrants
and covenants that it exclusively owns all right, title and interest in all
the registered trademarks under the "Owned Trademarks and Other
Intellectual Property Rights" heading on Exhibit 10.2 attached, and has the
right to license and use the names, likenesses, marks and characters under
the "Licensed Trademarks and Other Intellectual Property Rights" heading as
of the Effective Distribution Date as set forth on Exhibit 10.2 attached.
In the event that at any time during the Term Company no longer owns any of
the registered trademarks under "Owned Trademarks and Other Intellectual
Property Rights" on Exhibit 10.2 or the trademark "Pro Slammer",
Distributor shall have the right, at its option, to terminate this
Agreement without penalty upon 30 days' prior written notice. In the event
that at any time during the Term Company no longer owns or holds valid
licenses with respect to the names, likenesses, marks and characters
identified under the "Licensed Trademarks and other Intellectual Property
Rights" heading that derive from the agreement with Masterfoods USA, a
division of Mars, Incorporated set forth on Exhibit 10.2 or any other
intellectual propery rights that are present on Products representing 50%
or more of Distributor's volume at the time (collectively, "Masterfoods-
type License"), Company shall use its commercially reasonable best efforts
to obtain new intellectual property for a New IP Product and Company shall
pay Distributor all of the costs associated from the loss of the affected
Products and the change to the New IP Product (eg, new POS, UPC charges,
slotting fees, etc.). If the Distributor's sales volume of such New IP
Product in the first 12 months after its introduction is less than 90% of
Distributor's sales volume of the previous Products in the 12 months
preceding the termination of the Masterfoods-type License, then Distributor
shall have the right, at its option, to terminate this Agreement without
penalty upon 30 days' prior written notice.
10.3 Company warrants that (a) the Products delivered to Distributor
and/or its Subdistributor(s) shall comply in all respects with the Federal
Food, Drug and Cosmetic Act, as amended (the "Act"), and all applicable
federal, state and local laws, rules, regulations and guidelines applicable
in the Territory, including in Canada and the other countries in the
Territory. Specifically, Company warrants that all Products shipped to
Distributor and/or its Subdistributor(s), and all packaging and other
materials that come in contact with such Products, will not at the time of
shipment to Distributor and/or its Subdistributor(s) be adulterated or
misbranded within the meaning of the Act or any other federal, state or
local law, rule or regulation applicable in the Territory, and that such
Products, packaging and other materials will not constitute articles
prohibited from introduction into interstate commerce under the provisions
of Section 301(d), 404 or 505 of the Act, and (b) the Products will be
handled, stored and transported properly up until time of delivery to
Distributor and/or its Subdistributor and will be fresh by commercially
reasonable standards at the time of delivery.
10.4 Company represents and warrants that there are no actions,
suits or proceedings, either pending or threatened, before any Governmental
Authority or arbitrator during the previous three years, with respect to
the Products or the Marks in or relating to the Territory, or which could
adversely affect Distributor's rights under this Agreement (including the
right of its Subdistributor(s) to distribute the Products), and that to
Company's knowledge no Governmental Authority has undertaken, or has
indicated that it intends to undertake, any regulatory or enforcement
action with respect to the Products, whether by means of a warning
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letter, a notice of violation, a request for information, or any other
means, either at present or during the previous three years. If Company
receives any notice from any Governmental Authority of any such action or
proceeding, Company shall immediately notify Distributor thereof and keep
Distributor apprised at all times of the status and all material
developments related thereto.
10.5 Company represents and warrants that its business is currently
being conducted, and during the previous three years has been conducted, in
all material respects in compliance with all applicable Laws. Company has
all governmental and other licenses, permits, certificates and other
authorizations and approvals necessary for the conduct of its business and
the manufacture, marketing, advertising, and sale of the Products as
currently conducted. Company shall use commercially reasonable best efforts
to obtain all governmental and other licenses, permits, certificates and
other authorizations and approvals necessary for the conduct of its
business and the manufacture, marketing, advertising, and sale of the
Products and as contemplated by this Agreement. Company has been and
currently is in compliance with all such licenses, permits, certificates
and other authorizations and approvals necessary for the conduct of its
current business.
10.6 Except as set forth in Exhibit 10.6, Company represents and
warrants that there have been no recalls or withdrawals related to the
Products during the previous three years, and that there have been no
tampering incidents relating to the Products during the previous three
years.
10.7 Company represents, warrants and covenants that (a) Exhibit 1
sets forth a complete and accurate list of all Marks used in connection
with the Products, including all registrations and applications therefore
as filed in the Territory, (b) Company is the sole and exclusive owner or a
non-exclusive licensee (as indicated on Exhibit 1) of the entire right,
title and interest in and to each of the Marks, (c) the registered Marks
are valid, subsisting and enforceable and have not been adjudged invalid or
unenforceable, in whole or in part, anywhere in the Territory, (d) except
as set forth on Exhibit 1, no claims, litigation, threatened litigation,
oppositions or cancellation proceedings or administrative actions are
pending or have been instituted over the prior three years that concern or
relate to the Marks, (e) Company has taken and will take all actions
reasonably necessary to prevent infringement of the Marks by third parties,
and (f) Company has the right to use all of the packaging, formulas, or
manufacturing processes used by Company for the Products and none of the
packaging, formulas, or manufacturing processes used by Company for the
Products infringes any patent, trademark, trade dress, copyright, trade
secret, or other intellectual property right of any third party.
11. Term of Agreement.
-----------------
This Agreement shall commence on the Effective Date hereof, and shall
expire on August 15, 2015 (the "Term"). Distributor shall have the sole
option to renew the Agreement for two subsequent periods of ten additional
years, provided it notifies Company of its desire to do so in writing at
least 90 days prior to the expiration of the Term.
12. Termination of Agreement.
------------------------
12
12.1 Either Company or Distributor, whichever is the non-defaulting
party, shall be entitled to terminate this Agreement in the event of (a) a
material breach by the other party of any material term or material
condition hereof, which breach shall occur and continue uncured for 90 days
after written notice thereof from the non-defaulting party is given to the
defaulting party, or (b) if any of the following events shall occur and the
defaulting party or any of the Subsidiaries has failed to cure within
ninety days after the non-defaulting party has given written notice
thereof:
(a) Either party, or any of their respective Subsidiaries, shall
become insolvent or admit in writing its inability to pay debts as they
mature, or shall apply for, consent to, or acquiesce in, the appointment of
a trustee or receiver for any of its property; or in the absence of an
application, consent or acquiescence, a trustee or receiver shall be
appointed for either party, or any of its respective material Subsidiaries,
or for a substantial part of any of their property; or
(b) either party, or any of its respective Subsidiaries, otherwise
shall commit an act of bankruptcy, or any bankruptcy, reorganization, debt
arrangement, or other proceeding under any bankruptcy or insolvency law or
any dissolution or liquidation proceeding shall be instituted in respect of
either party, or any of its respective Subsidiaries, and be consented to,
or acquiesced in, by such party, or any of its respective Subsidiaries.
12.2 Distributor may also terminate this Agreement upon six months
written notice to Company (a) following notification by Company to
Distributor of the occurrence of a Change of Control, provided that Company
must notify Distributor as soon as it has notice of an impending Change of
Control of Company, (b) if any Governmental Authority has undertaken, or
has indicated that it intends to undertake, any material regulatory or
enforcement action with respect to the Products, whether by means of a
warning letter, notice of violation, request for information, or otherwise,
or any Governmental Authority or other party has initiated or threatened
litigation which, in the reasonable judgment of Distributor, will have a
material adverse consumer or sales impact with respect to the Products, or
(c) if Company fails to expend any mutually agreed upon marketing
investment in the Products. In the event of a regulatory or enforcement
action as referred to in (b) above, Company will work to reformulate the
Products to address any regulatory issue as a first course of action to
attempt to cure any such breach.
12.3 This Agreement may also be terminated with or without cause by
Distributor by a written notice sent at any time on or after August 15,
2006, such termination to be effective twelve months after such written
notice.
13. Disposition of Product on Termination; Orderly Transition.
---------------------------------------------------------
13.1 In the event this Agreement shall be terminated for any reason,
Distributor and/or its Subdistributor(s) shall sell, in accordance with the
terms of this Agreement, the Products in their possession, or, if agreed by
the parties, Distributor and/or its Subdistributors shall sell to Company
and Company agrees to buy, at the price charged by Company to the
Distributor and/or Subdistributor(s), plus all handling and shipping costs,
all saleable Products owned by it in unbroken original finished cases.
13
13.2 It shall be the obligation of Distributor and/or its
Subdistributor(s) to fill customer orders unfilled as of the date of
termination or cancellation of this Agreement. Distributor and/or its
Subdistributor(s) shall provide Company with a list of all unfilled
customer orders as of the date of such termination, and Company shall have
the right to fill such orders directly and to receive payment therefore if
Distributor and/or its Subdistributor(s) fail to fill such orders promptly.
13.3 In the event of termination of this Agreement, the parties
agree to act in good faith in all respects and to take all reasonable steps
to give effect to the transfer of all of the Products from Distributor
and/or its Subdistributor(s) to Company or its designee with minimal
disruption to the distribution of the Products.
13.4 In the event of termination of this Agreement, Company shall
reimburse Distributor for all third party costs and obligations incurred by
Distributor with respect to the promotion and sale of the Products during
the Term for which Distributor may become liable after termination,
provided that such costs had been agreed to be paid by Company or had
typically been paid for by Company during the Term, except that Company
shall be entitled to set off any amounts owning to Company by Distributor
as a result of the breach. In addition, Distributor shall discontinue use
of the Marks, and shall return to Company all property belonging to Company
in Distributor's possession or control promptly after the effective date of
the termination, at Company's expense.
14. Trademarks and Trade Names.
--------------------------
14.1 Distributor acknowledges that Company is the owner or licensee
of the Marks, and all of the goodwill attributable to the Marks and such
indicia of origin and quality. Distributor acknowledges that nothing in
this Agreement gives Distributor the right, title, or interest in or to
such Marks and such indicia of origin and quality, other than as
Distributor of the Products pursuant to this Agreement. Distributor shall
make no contrary representation.
14.2 If Distributor desires to reproduce the Marks or any indicia
for promotional purposes, the reproduction will only be made after approval
of the artwork and designs by Company or its authorized representative(s)
as designated in writing by Company. Distributor shall only use the Marks
in such a manner as to ensure and maintain the high quality and goodwill
associated therewith. All form or template usages or specimens of proposed
uses featuring the Marks may be subsequently used on other materials only
with the approval from Company and the applicable licensors. With respect
to the use of licensed Marks, Company shall be required to obtain all
necessary approvals from licensors or other relevant third parties in a
timely manner.
14.3 Distributor agrees to notify Company promptly of any attempt
that may come to its attention to simulate, counterfeit, or infringe the
Marks used by Company for its products; or any labels, advertisements, or
advertising matter or other material which may constitute infringement of
the Marks, or which may be acts constituting unfair competition.
Distributor shall fully cooperate, at Company's expense, with Company in
any action or preceding that Company may deem necessary to protect the
Marks.
14
15. Non-Agency.
----------
The parties to this Agreement specifically understand and agree that
Distributor is an independent contractor and that this Agreement does not
render Distributor or Company, the agent, partner, joint venturer,
employee, servant or legal representative of the other for any purpose
whatsoever. Neither Company nor Distributor is granted any right or
authority to assume or to create any obligation or responsibility,
expressed or implied, on behalf of or in the name of the other or to bind
the other in any manner whatsoever.
16. Indemnification and Insurance.
-----------------------------
16.1 Distributor agrees to indemnify and hold Company harmless from
and against any and all Losses, arising out of, resulting from or otherwise
connected with and to the extent attributable to: (i) any negligent act,
misfeasance or nonfeasance by Distributor, its Subsidiaries, or any of
their respective officers, employees, directors or agents in the sale,
distribution or marketing of the Products; or (ii) the failure of any
representation or warranty made by Distributor contained in this Agreement
to be true or correct in any material respect (without regard to any
reference to materiality contained therein).
16.2 Upon request Distributor agrees to provide Company with a
certificate of insurance evidencing insurance coverage in amounts of not
less than $1,500,000 per occurrence to cover its liabilities hereunder.
Such certificate shall provide that such insurance coverage may be
terminated or materially modified only upon at least thirty days' prior
written notice by the insurance carrier to Company. Distributor, at its own
expense, shall list Company as an additional insured to such insurance
policies, as its interests shall appear.
16.3 Company agrees to indemnify and hold Distributor and
Subdistributors harmless from and against any and all Losses, arising out
of, resulting from or otherwise connected with and to the extent
attributable to (i) the formulation, manufacture, labeling, bottling or
packaging of Products, including, but not limited to, Product defects,
Product integrity/quality failures, any ingredient safety issue, Product
recalls, any violation of applicable Law or any injury to or death of any
person caused by the Products or any ingredient (ii) any negligent act,
misfeasance or nonfeasance by Company, its Subsidiaries, or any of their
respective officers, employees, directors or agents, (iii) any claim,
advertising or representation by Company or by any agent or representative
of Company regarding Products, (iv) the failure of any representation or
warranty made by Company contained in this Agreement to be true or correct
in any material respect (without regard to any references to materiality
contained therein), (v) any Excluded Liabilities, (vi) any claim that the
sale of Products or use by Distributor or Subdistributors of any trademark,
trade dress or trade name of Company pursuant to this Agreement infringes
the trademark, trade dress or trade name of another, (vii) any claim that
any packaging or manufacturing process for the Products furnished by
Company infringes any patent, trade secret or other intellectual property
right of any third party, (viii) the termination or transfer of any of
Company's existing distribution agreements in anticipation or furtherance
of the exclusive distribution rights granted to Distributor in this
Agreement, or (ix) any documented harm to Distributor, its reputation or
its trademarks as a result of Company's marketing activities hereunder or
the use of the Marks on products other than non-alcoholic beverages.
15
16.4 Upon request after September 12, 2005, Company agrees to
provide Distributor with a certificate of insurance satisfactory to
Distributor evidencing insurance coverage in amounts of not less than
$4,000,000 per occurrence, plus the insurance referenced in Section 16 of
Exhibit 9.1B hereto, to cover its liabilities hereunder. Such certificate
shall provide that such insurance coverage may be terminated or materially
modified only upon at least thirty days' prior written notice by the
insurance carrier to Distributor. Company, at its own expense, shall add
Distributor as an additional insured to such insurance policies. For any
claims relating to this Agreement, the Company's insurance shall be deemed
to be primary and not contributing to or in excess of any similar coverage
purchased by Distributor. All policy deductibles will remain the
responsibility of the Company, its agents or its subcontractors. All
insurance provided by Company shall be written by companies authorized to
do business in the state or states where Company does business. Distributor
reserves the right to refuse policies from companies with a rating of less
than A- VII by the A.M. Best Company.
16.5 An indemnified party under this Section 16.5 shall give to the
indemnifying party prompt notice in accordance with Section 18 of the
matter in respect of which such indemnified party is seeking
indemnification. Until such time as the indemnifying party acknowledges in
writing its obligation to indemnify the indemnified party under this
Section 16.5, the indemnified party will have the right to direct, through
counsel of its choosing, the defense of any matter the subject of such
indemnification claim. At such time as the indemnifying party acknowledges
in writing its obligation to indemnify the indemnified party against any
Losses that may result from such matter, the indemnifying party shall have
the right to direct, through counsel of its own choosing, the defense or
settlement of any matter the subject of indemnification hereunder at its
expense. The indemnified party may retain its own counsel to participate in
the defense of the matter, at the indemnified party's own expense. The
indemnified party shall provide the indemnifying parties with reasonable
and relevant access to its records and personnel relating to any such
matter during normal business hours and shall otherwise cooperate with the
indemnifying party in the defense or settlement of any such matter, and the
indemnifying party shall reimburse the indemnified party for all its
reasonable out-of-pocket expenses in connection with such matter. No
settlement in respect of any third-party claim may be effected by the
indemnifying party without the indemnified party's prior written approval.
If the indemnifying party shall fail to undertake any such defense, the
indemnified party shall have the right to undertake the defense or
settlement thereof, at the indemnifying party's expense.
17. Compliance with Laws.
--------------------
Distributor and Company agree to comply in all material respects with
the requirements of all applicable Laws relating to the production,
marketing, promotion, sale and distribution of the Products and to the
performance of the terms of this Agreement, and to cooperate fully with
each other in order to facilitate compliance with such requirements by each
party hereto.
18. Notice.
------
16
Any notice required or permitted to be given under this Agreement
shall be in writing, by registered or certified mail, and shall be deemed
duly given five (5) days after mailing to the addresses stated below for
Company and Distributor. A copy of the notice must be sent by facsimile
when mailed. The parties hereto may from time to time designate in writing
other addresses expressly for the purpose of receipt of notice hereunder.
If to the Company: Roy G. Warren, Chief Executive Officer
Bravo! Foods International Corp.
11300 U.S. Highway 1, Suite 202
North Palm Beach, FL 33408
Facsimile: 561-625-1413
With a copy to: Roy D. Toulan, Jr.
Vice President, General Counsel
At the above address
Facsimile: 978-283-4692
If to Distributor: Coca-Cola Enterprises Inc.
2500 Windy Ridge Parkway
Atlanta, GA 30339
Attention: VP Business Development and
Chief Revenue Officer
Facsimile: 770-989-3297
With a copy to: General Counsel
At the above address
Facsimile: 770-989-3619
19. Waiver.
------
No waiver of any breach of this Agreement or of any provision or
agreement hereof shall be effective unless in writing, and no waiver shall
constitute a waiver of any subsequent breach, or of the right to later
enforce such provision.
20. Amendments, Modifications and Changes.
-------------------------------------
This Agreement may not be amended, modified, changed or supplemented,
nor may extensions of time for performance be granted, except by written
instrument signed by the party to be charged, or by its duly authorized
agent or otherwise expressly permitted herein, and no extension of the time
for performance shall be deemed an extension of the time for performance of
any other obligation to act, except insofar as the performance of such
other act is inextricably bound to the extended performance.
21. Assignment.
----------
17
This Agreement may not be assigned by either Distributor or Company,
nor shall the performance required of any of the parties hereunder be
delegated without the prior written consent of the other; provided,
however, that either party may assign any of their rights and obligations
hereunder to an Affiliate, so long as the assignor remains liable for all
of its obligations hereunder, and further that Distributor may freely
assign its rights and obligations hereunder to The Coca-Cola Company or any
Subdistributor, so long as Distributor remains liable for all its
obligations hereunder.
22. Severability.
------------
This Agreement shall be deemed severable, and if any portion hereof
shall be held to be invalid or breached for any reason, the remainder shall
not necessarily be deemed invalid but shall remain in full force and
effect. Company and Distributor each reserve the right to terminate a
portion of this Agreement without terminating the other Sections or
invalidating the terms and conditions of this Agreement.
23. Governing Law; Jurisdiction; Injunctive Relief and Damages.
----------------------------------------------------------
23.1 This Agreement shall be governed and construed in accordance
with the laws of the State of Georgia, excluding, however, so much of said
laws as relates to conflicts of law and/or choice of law. Section 27 below
notwithstanding, any lawsuit between the parties relating to this Agreement
or the relationship among the parties shall be brought in the state or
federal courts situated in the city of Atlanta, Georgia.
23.2 In the event of termination of this Agreement or the
distributorship relationship between the parties, both parties agree that
they have an adequate remedy at law and that termination of this Agreement
or such relationship shall not cause either party irreparable injury.
24. Entire Agreement.
----------------
This Agreement constitutes the entire agreement among the parties and
supersedes all prior understandings or agreements, oral and written, of any
nature whatsoever. In making this Agreement, the parties acknowledge that
they are not relying upon any statements or representations made prior to
or contemporaneous with the execution of this Agreement. It is also
specifically agreed that this Agreement shall become effective only upon
execution and signature by each of the parties hereto.
25. Waiver of Jury Trial.
--------------------
The parties hereto agree that in the event of any litigation among
them, they waive any and all rights to trial by jury.
18
26. Confidentiality, Publicity.
--------------------------
26.1 The parties agree that during the term of this Agreement each
may disclose to the other proprietary information regarding matters dealing
with actions necessary to carry out the terms of this Agreement, including
the details of this Agreement, business, sales, media, and marketing plans,
business and technical information about products, and related proprietary
information. The parties agree that all such information is proprietary and
each will keep such proprietary information and all related matters
confidential during the term of this Agreement and for a period of five
years thereafter, and will prevent disclosure of such information by its
agents, employees, or representatives.
26.2 Company acknowledges and understands that Distributor
manufactures, sells and distributes a wide variety of products, including
other brands of dairy drinks and products which may be considered to be in
direct competition with Products. Each party acknowledges that such
proprietary information would be useful to the other's competitors, and if
furnished to such competitors, would cause the other party great harm in
the marketplace.
26.3 Company and Distributor each acknowledge and agree that they
will make no public announcement, press release or other public statement
about this agreement without the prior approval of the other. In addition,
Company agrees that, on an ongoing basis, it will not refer to Distributor
in public statements without the prior approval of Distributor The parties
will work on approved language for either party to use for routine public
announcements that may be used with notice to the other but without further
approval.
27. Dispute Resolution.
------------------
27.1 In the event that Company and Distributor are unable to reach
an agreement as to any material issue arising under this Agreement, the
President of Distributor and the chief executive officer of Company will
consult with each other and attempt to resolve the issue within 30 days.
During such period of consultation by the officers, Company will continue
to supply, and Distributor and/or its Subdistributor(s) will continue to
distribute, Products in accordance with the methods used by it during the
period immediately prior to such dispute and otherwise in accordance with,
and subject to, the terms of this Agreement.
27.2 Any and all disputes, controversies or claims arising under
this Agreement that cannot be resolved by the parties hereto in accordance
with the provisions of Section 27.1 above, shall be submitted to mediation
under the then prevailing commercial mediation rules of the American
Arbitration Association ("A.A.A.") and, if not resolvable through
mediation, then such shall be submitted to binding arbitration pursuant to
the then prevailing commercial arbitration rules of the A.A.A., such
mediation or arbitration to be conducted in Atlanta, GA. The number of
arbitrators shall be three, with each of Company and Distributor appointing
one arbitrator within thirty days of the referral of any dispute to binding
arbitration in accordance with the immediately preceding sentence, and the
third arbitrator to be a qualified, suitable and neutral individual jointly
selected by such two arbitrators within forty five days of the referral of
any dispute to binding arbitration in accordance with the immediately
preceding sentence. The failure of Company or Distributor to appoint the
arbitrator to be appointed by it, or the failure by the first two
arbitrators to select a third arbitrator, as applicable, shall result in
the selection by
19
the A.A.A. of such arbitrator or mediator, as applicable, in accordance
with its then prevailing rules.
28. Attorney and Other Fees.
-----------------------
Should any party institute an action, suit or proceeding to enforce
this Agreement or any provision hereof, or should any action, suit or
proceeding be brought in connection with this Agreement (mediation, only,
notwithstanding, in which case each party shall pay for its own costs and
shall equally share in the costs of the mediation), or for damages for any
alleged breach of this Agreement or of any provision hereof, or for a
declaration of rights hereunder, the prevailing party in any such action,
suit or proceeding shall be entitled to receive from the other party all
costs, fees and expenses, including reasonable attorneys fees, incurred by
the prevailing party in connection with such action or proceeding.
29. Survival of Obligations.
-----------------------
Upon any termination of this Agreement, the respective obligations of
Company and Distributor under this Agreement shall terminate; provided,
however, the following obligations shall survive termination:
(a) obligations accruing prior to termination to the extent the same remain
unperformed; and (b) obligations pursuant to Sections 8, 12, 13, 16, 23, 25
through 28. Nothing contained in this Section 29 shall be deemed or
construed to relieve any party in breach of this Agreement from any
liability therefore.
30. Interpretation.
--------------
For purposes of this Agreement (a) whenever the action of a party is
subject to the approval of another party, the approval of such other party
will not be unreasonably withheld or delayed, and (b) the words
"Distributor will require its Subdistributors to" with respect to a
particular action to be taken by the Subdistributors means (i) that the
Subdistribution Agreement will provide that each Subdistributor will take
such action, and (ii) Distributor will enforce such provisions of the
Subdistribution Agreement as if such provisions pertained to one of
Distributor's own brands.
20
31. Counterparts.
------------
This Agreement may be executed by facsimile and in multiple
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written by their respective
officers thereunto duly authorized.
BRAVO! FOODS INTERNATIONAL CORP. COCA-COLA ENTERPRISES INC.
By: By:
------------------------- --------------------------------
Name: Name:
----------------------- ------------------------------
Title: Title:
---------------------- -----------------------------
21
Exhibit 1
Owned Trademarks and Other Intellectual Property Rights:
Marks and design trade dress for
* Bravo!
* Slammers Ultimate Milk Shake
* Slammers Ultimate Milk
* Slammers Ultimate Smoothie
* Pro Slammers
* Slim Slammers
[Exhibit 1 continued on next page]
22
- -----------------------------------------------------------------------------------
Country Trademark Serial No./ Status
Registration No.
- -----------------------------------------------------------------------------------
<s> <c> <c> <c>
USA BLENDERS 78/661,707 Pending
- -----------------------------------------------------------------------------------
USA METRECARB 78/369,965 Pending, Opposed
- -----------------------------------------------------------------------------------
USA NUTRITION BAR IN A BOTTLE 78/667,224 Pending
- -----------------------------------------------------------------------------------
USA POWER SLAMMERS 78/667,231 Pending
- -----------------------------------------------------------------------------------
Canada SLAMMERS 1,264,851 Pending
- -----------------------------------------------------------------------------------
Egypt SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Lebanon SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Mexico SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Oman SLAMMERS 36953 Pending
- -----------------------------------------------------------------------------------
Saudi Arabia SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
USA SLAMMERS (for tea) 78/512,874 Pending/suspended
- -----------------------------------------------------------------------------------
USA SLAMMERS & Design 2,798,883 Registered
- -----------------------------------------------------------------------------------
Canada SLAMMERS FORTIFIED MILK 1,147,967 Pending, Allowed
- -----------------------------------------------------------------------------------
European SLAMMERS FORTIFIED MILK 2 827 855 Registered
Community
- -----------------------------------------------------------------------------------
Mexico SLAMMERS FORTIFIED MILK 781763 Registered
- -----------------------------------------------------------------------------------
USA SLAMMERS FORTIFIED REDUCED 2,798,884 Registered
FAT MILK & Design
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS & Design 2,798,885 Registered
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS FORTIFIED 2,798,882 Registered
LOWFAT MILK & Design
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS FORTIFIED 2,803,268 Registered
MILK
- -----------------------------------------------------------------------------------
Licensed Trademarks and Other Intellectual Property Rights
- ------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Masterfoods USA Names and Diabetes Research Marvel MD Enterprises
Starburst, Likenesses on Institute Foundation Characters; see Moon Pie; see
MilkyWay Pro Slammers DIABETES Exhibit 10.2 Exhibit 10.2
3 Musketeers RESEARCH
see Exhibit 10.2 INSTITUTE
service mark and
Design see
Exhibit 10.2
- ------------------------------------------------------------------------------------------
23
Exhibit 2
List of All Current Products
Starburst(R) Ultimate Smoothie
Fruit & Cream Smoothie
Slammers(R) Ultimate Milk *
Ultimate Milk
Slammers(R) MILKY WAY(r)
Chocolate Milk
Slammers(R) 3 MUSKETEERS(r)
Chocolate Milk
Slim Slammers(R)
PRO Slammers
Sport Protein Milk Blast MILK WITH AN ATTITUDE!
*The parties agree that Distributor shall not immediately distribute the
Products with Marvel marks and characters.
24
Exhibit 3.3.2
Distributors Not Terminated
[REDACTED}
25
Exhibit 3.7
- ------------------------------------------------------------
Product / SKU Bottle Cost
- ------------- -----------
[Redacted]
- ------------------------------------------------------------
<s> <c>
Slim Slammers / Vanilla
- ------------------------------------------------------------
Slim Slammers / Chocolate
- ------------------------------------------------------------
Pro Slammers / Vanilla
- ------------------------------------------------------------
Pro Slammers / Chocolate
- ------------------------------------------------------------
Milky Way
- ------------------------------------------------------------
3 Musketeers
- ------------------------------------------------------------
Starburst flavors
- ------------------------------------------------------------
Starburst 9-pack
- ------------------------------------------------------------
Marvel Slammers Ultimate Milk Vanilla
- ------------------------------------------------------------
Marvel Slammers Ultimate Milk Chocolate
- ------------------------------------------------------------
Marvel Slammers Ultimate Milk Strawberry
- ------------------------------------------------------------
Marvel Slammers Ultimate Milk Cookies/Green
- ------------------------------------------------------------
MoonPie (both flavors)
- ------------------------------------------------------------
26
Exhibit 9.1A
Prices
The following maximum price shall be good In the United States for the
remainder of 2005 and all of 2006.
All Products currently on Exhibit 2:$[REDACTED]plus taxes, deposits and
handling fees, if any. Distributor shall use its commercially reasonable
best efforts to take its deliveries in full truckloads.
Prices for new Products and for other countries shall be negotiated.
After 12/31/2006, the maximum prices shall be negotiated but may not
increase by more than the greater of (a) increase in the Consumer Price
Index for All Urban Consumers (CPI-U) (US City average) (1982-84=100) from
December 31, 2005 (if the CPI-U is not available, the parties will agree on
a substitute index), or (b) the price which is determined by passing along
to Distributor the weighted average increases in Cost of Goods Sold for
milk and PET resin.
Company agrees that it shall actively work to achieve cost savings on the
Products from its suppliers of raw materials, ingredients and services.
Company shall pay one-half of such cost savings (including where its cost
of goods sold is reduced below $[REDACTED] per bottle) with Distributor on
a per-Case basis for all Products purchased by Distributor during the Term.
All such cost savings shall at Distributor's election be reflected in a
reduced price or shall be paid quarterly by Company, along with a detailed
report and accounting reasonably satisfactory to Distributor.
Distributor shall have the right throughout the Term to have access to and
right to examine directly pertinent books, papers, documents, accounts and
records of Company relating to the above-mentioned cost savings and
increases to ensure the provisions of this Exhibit 9.1A are being carried
out.
27
Exhibit 9.1B
Purchase Order Terms and Conditions
The term "Seller" refers to Company and the term "Buyer" refers to
Distributor. The term "goods" refers to all materials, supplies, equipment,
parts, accessories, ingredients and other items to be sold or leased to
Buyer hereunder, and unless the context otherwise requires, shall also
include installation and other services related to the goods which Seller
may agree to provide. The term "services" refers to all services of any
nature whatsoever ordered or required by Buyer hereunder.
1. Acceptance; Applicable Terms and Conditions of Purchase
-------------------------------------------------------
(a) Upon receipt by Buyer of an express acceptance by Seller, or upon
Seller's commencement of work on the goods subject to this Purchase
Order ("this Order"), or upon shipment of such goods, or Seller's
commencement of installation of services, whichever occurs first,
this Order shall become a contract with the terms and conditions
herein set forth.
(b) Acceptance of this Order is expressly limited to the terms and
conditions herein contained on both sides hereof. Buyer shall not be
bound by any provisions in Seller's order acknowledgement or
acceptance forms or other documents (including counter offers) which
propose any terms or conditions in addition to or differing with the
terms and conditions set forth herein, and any such terms and
conditions of Seller and any other modification to this Order shall
have no force or effect and shall not constitute any part of the
terms and conditions of purchase or lease, except to the extent
separately and specifically agreed to in writing by the Buyer.
Buyer's failure to object to provisions contained in Seller's
documents shall not be deemed a waiver of the terms and conditions
set forth herein, which shall constitute the entire agreement between
the parties.
(c) No amendment, deletion, supplement or change in terms and conditions
contained herein shall be binding on Buyer unless approved in writing
by the Buyer.
2. Price
-----
(a) Prices shall be firm and not subject to adjustment or variation
unless specifically approved in writing by the Buyer.
(b) Seller warrants that, except for late code liquidations of Products,
the prices herein specified are as low as any net prices now given by
Seller to any other customer for goods or services of like grade and
quality in like quantities, and Seller agrees that if at any time
during the pendency of this Order lower net prices are quoted under
similar conditions, said lower net prices shall be from that time
substituted for the prices herein. Seller agrees that any price
reductions made in the goods or services covered by this Order
subsequent to its acceptance but prior to payment thereof will be
applicable to this Order.
28
(c) Except as otherwise provided herein, the prices herein include all
costs and charges to be incurred by Seller, including, without
limitation, installation and other service charges, all applicable
federal, state and local taxes and duties, all wages and fees for
services and materials, all charges for transportation, packing,
packaging and returnable containers, all costs of design,
engineering, and development, and all costs for tooling, gauges,
jigs, fixtures, dies, molds, patterns, and similar property that may
be obtained or required by Seller for use in the manufacture,
fabrication or assembly of the goods or performance of the services
called for by this Order.
3. Specifications
--------------
(a) Unless otherwise authorized in writing by Buyer, Seller shall deliver
goods or render services, or both, per all specification designs,
drawings and performance criteria, if any, furnished by Buyer or
furnished to Buyer by Seller, without variation.
(b) Where applicable, Seller shall comply with the specifications of The
Coca-Cola Company for the goods and services and shall comply with
the requirements of any agreement entered into between Seller and The
Coca-Cola Company which authorizes Seller to supply Buyer, including
but not limited to those agreements known as Master Authorization
Agreements.
(c) Buyer may, by written order, change any one or more of the following
terms of this Order: (i) the specifications, designs, drawings or
performance criteria; (ii) method of shipping or packing; (iii) place
of inspection, acceptance or point of delivery; (iv) delivery
schedule; and (v) quantity. In this event and if appropriate, Buyer
may in writing request an equitable adjustment in the prices or
delivery terms of this Order, and Seller may in writing make claim
for the cost of any redundant material or work in process, but not
for any cost of design, engineering or development, special tooling
or general purpose equipment unless such items have been specifically
ordered and separately priced in this Order; provided, however, that
Seller shall, in all events, proceed diligently to supply the goods
or services contracted for under this Order as so changed. Any and
all claims and requests by Seller under this subsection (b) shall be
deemed waived unless made in writing and received by Buyer within ten
(10) business days from the receipt by Seller of the written order
change.
4. Assurance of Performance
------------------------
In the event Seller fails to perform when due any delivery and/or
service required by this Order, or Buyer in good faith has any other reason
to question the Seller's intent or ability to perform, Buyer may, at its
election, demand adequate assurance of performance, including that Seller
furnish a performance bond or letter of credit, conditioned to indemnify
Buyer for any loss Buyer may sustain by failure of Seller to perform its
obligations. In the event Seller fails to comply with such demand within
ten (10) business days thereafter, Buyer may treat this failure as a
default.
5. Termination
-----------
29
(a) This Order may be terminated by Buyer: (i) promptly upon written
notice to Seller for the convenience of Buyer, or (ii) at any time if
Seller is in default under this Order, fails to use properly skilled
personnel, fails to make prompt payment to any subcontractors it may
have, fails to make prompt payment for any materials, labor or any
other expenses it incurs in the production or construction of the
goods or the performance of any services, or (iii) at any time upon
the insolvency of Seller or in the event of the institution of any
proceeding by or against Seller in bankruptcy or insolvency or under
any provisions of the Bankruptcy Act or for the appointment of a
receiver or trustee or any assignment for the benefit of creditors of
Seller. Buyer may require a financial statement from Seller at any
time during the term of this Order for the purpose of determining
Seller's financial responsibility. Any termination pursuant to parts
(ii), (iii) or (iv) of this subsection (a) shall be deemed to be a
termination for default.
(b) In the event of termination for the convenience of Buyer, Seller may
in writing make claim for the cost of any work or service, or both,
in process, but not for any cost of design, engineering or
development, special tooling or general purpose equipment unless such
items have been specifically ordered and separately priced in this
Order. Other than as specified in the preceding sentence, Seller
shall not be entitled to any claim, remedy or damages from Buyer. Any
and all claims or requests by Seller under this subsection (b) shall
be deemed waived unless made in writing and received by Buyer within
ten (10) business days from the date of termination.
(c) In the event of termination by Buyer pursuant to (ii),(iii) or (iv)
of subsection (a) above, Seller shall be entitled to no claim for
damages or for the cost of any work or service, or both, in process.
At Buyer's option, Buyer may produce or purchase or otherwise acquire
goods or services elsewhere on such terms or in such manner as Buyer
may deem appropriate and Seller shall be liable to Buyer for any
excess cost or other expenses incurred by Buyer; and/or Seller shall
deliver to Buyer any of the goods or services for which Buyer makes
written request at or after termination, and Buyer will pay Seller
the lesser of the herein contained or fair value of any of such goods
or services so requested.
30
6. Warranties
----------
(a) Seller warrants that it will diligently perform its services to the
highest degree of workmanship and that all goods and services shall
be free from defects in workmanship and material and shall be in
conformity with specifications, drawings, samples, advertising
materials, descriptions or performance criteria referred to herein,
if any, and if of Seller's design, shall be free from design defects.
Seller further warrants that all goods shall be merchantable and that
all goods and services shall be fit for Buyer's particular purposes,
if any, as have been made known to Seller, and shall be safe and
appropriate for the purpose for which goods and services of that kind
are normally used. Seller warrants that the goods, services and
production, packaging and delivery thereof, shall be in compliance
with all applicable federal, state and local laws, rules,
regulations, requirements, ordinances and orders, including without
limitation, all provisions of (i) the Occupational Safety and Health
Act of 1970, as amended, (ii) Executive Order 11246 issued September
24, 1965, as amended, (iii) the Federal Food, Drug and Cosmetic Act,
as amended, (iv) Fair Labor Standards Act, as amended, and (v) Title
42, U.S.C.A. [SECTION] 2000, et. seq., as amended, and (vi) the
Immigration Reform and Control Act, as amended; and all rules,
regulations and orders thereunder (collectively, "Applicable Laws").
Seller shall also comply with all Applicable Laws in the manufacture and
distribution of goods and services to Buyer and in providing services
to Buyer, including but not limited to those relating to basic human
rights. Seller warrants that all foods, food additives or all
substances for use in, with or for foods, including soft drinks,
comprising each shipment or other delivery hereby made by the Seller
to, or on the order of, Buyer are hereby warranted as of the date of
such shipment to be, on such date, not adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended, including the Food Additives Amendment of 1958 (the "Act")
or within the meaning of any state food and drug law, the
adulteration and misbranding provisions of which are similar to those
of the Act and are not articles which may not under the provisions of
Section 404 or 505 of the Act be introduced into interstate commerce.
For goods and services delivered in the state of California, this
Order and the goods and services delivered hereunder must be in
compliance with the Safety Orders of the State of California Division
of Industrial Safety and Proposition 65. On request Seller shall
furnish Buyer certificates of compliance with all Applicable Laws
which apply to this Order. Seller shall, at time of delivery or
invoicing, certify that goods sold hereunder were manufactured or
produced in full compliance with Section 12 of the Fair Labor
Standards Act, as amended, to the date of certification and all
applicable United States Department of Labor Regulations promulgated
thereunder.
31
6. Warranties (Cont'd)
-------------------
(b) Seller further warrants that it has full power to enter into, and to
perform fully pursuant to the provisions of, this Order and that no
goods or services or the provision, use or sale thereof shall in any
way infringe upon or violate any rights of any party whether they be
patent, trademark, trade secret, copyright, contractual or otherwise.
Seller warrants that it is not owned by or affiliated with an
employee of the federal government who does business with Buyer in
his/her capacity as a federal employee.
(c) All express warranties shall survive inspection, testing, and
acceptance of the goods by Buyer and expiration or termination of
this Order and shall be in addition to all warranties, express,
implied or statutory.
(d) All warranties shall inure to Buyer, its customers and subsequent
owners or consumers of the goods or services covered hereunder or the
end products of which they are a part.
(e) Seller agrees, at its expense and at Buyer's option to defend or
assist in the defense of any action against Buyer which action, in
whole or in part, whether by way of claim, counterclaim or defense,
is based upon an alleged breach of any of Seller's warranties.
(f) All warranties shall be construed as conditions as well as promises.
7. Buyer's Remedies and Damages
----------------------------
(a) Seller shall, at its own sole cost and expense, defend, indemnify and
hold harmless Buyer and its affiliates, subsidiaries, officers,
agents, employees and customers and all subsequent owners of the
goods or services against all claims, expenses (including, without
limitation, attorney's fees, all special, indirect, incidental or
consequential damages, including lost profits, of every kind
whatsoever) losses, costs, damages, liabilities and suits arising
from any breach or violation of the terms hereof, or from Seller's
negligence, failure to warn, strict liability or any alleged defect
in the goods or services hereunder, including but not limited to any
breach or alleged breach of any implied warranty or any of the
warranties described herein, or any alleged acts or omissions of
Seller or its affiliates, subsidiaries, officers, agents, employees
or subcontractors. Buyer reserves the right at any time to control
its own defense
(b) In the event any claim should be made against Buyer at any time
during the term hereof, that by virtue of its use or resale of the
goods or services or otherwise, Buyer is infringing or contributing
to the infringement of any actual or alleged industrial property
rights, Buyer may at its option, thereupon or at any time during the
continuance of such claim refuse to accept deliveries hereunder and
terminate this Order and shall, in such case, be entitled to the
indemnity set forth in subsection (a) above, or Buyer may require
Seller, at Seller's expense, to (i) either procure within 30 days for
Seller the right to continue using said goods, or (ii) modify same so
the goods and services become noninfringing, or (iii) replace the
goods with noninfringing goods.
(c) Seller shall not assert against Buyer or its customers any industrial
property rights relating to the use or sale of goods or services.
32
8. Packaging and Shipping; Risk of Loss
------------------------------------
(a) All packing and packaging shall be in accordance with specific
instructions from Buyer on the face hereof or in separate
notification. In the absence of specific instructions, all packing
and packaging shall comply with good commercial practice, applicable
carrier's tariffs and all applicable state, federal and local law and
shall consist of suitable containers for optimum protection of the
goods and for in-plant handling and storage.
(b) Delivery shall be made by the carrier and route specified by Buyer.
In the absence of instructions, shipments shall be routed via the
most economical mode of commercially reasonable transportation
available consistent with the time requirements established for this
Order.
(c) The number of the Order must be shown on all packing slips and
invoices, and except in the case of ingredients, on all packages,
crates or other containers, together with the destination party and
address specified by Buyer.
(d) If invoices are subject to discount for prepayment, Seller shall
state such terms clearly on such invoices. Buyer's opportunity for
prepayment shall not be prejudiced by delays beyond Buyer's control.
(e) Delivery shall not be deemed complete until the goods have actually
been received and accepted by Buyer, or by the person to whom the
goods were delivered, and the risk of loss on the goods shall he
borne by Seller until such delivery and acceptance, Seller shall also
bear the risk of loss on the goods rejected by Buyer, from the time
of shipment thereof to Seller until the redelivery thereof to Buyer.
9. Delivery or Performance Schedule; Quantities
--------------------------------------------
(a) Time is of the essence.
(b) Buyer may cancel this Order for any nonconformity in any lot or
installment delivered or services performed hereunder, including
without limitation failure of Seller to deliver the goods or perform
services when due, delivery of defective or otherwise nonconforming
goods, delivery of an insufficient quantity of goods, or deficient,
defective or incomplete performance of services.
(c) Seller shall promptly advise Buyer of any delay or anticipated delay
in delivery or performance and shall pay Buyer for any losses
sustained or costs incurred by Buyer as a result of a late delivery.
(d) Seller shall not, without Buyer's prior written consent, manufacture
or procure materials in advance of Seller's normal flow time or
deliver goods or perform services in advance of schedule. In the
event of termination or change in the terms of this Order, no claim
by Seller will be allowed for any such manufacture or procurement of
performance of services in advance of such normal flow time without
the prior written consent of Buyer.
(e) Unless specified otherwise on the face hereof, this Order shall not
be deemed separable as to the goods and services ordered herein.
(f) Goods which are to be shipped shall be shipped F.O.B. destination
unless otherwise specified by Buyer. Any shipments which are sent
C.O.D. without Buyer's consent will not be accepted and will be made
at Seller's risk.
33
10. Inspection and Testing
----------------------
All goods and services are subject to inspection and rejection by
Buyer at any time, including during their manufacture, construction or
preparation, notwithstanding any prior payment or inspection. Goods or
services may at any time be rejected for defects or defaults revealed by
inspection, analysis or by manufacturing operations or use after delivery
even though such goods or services may have previously been inspected and
accepted. Without limiting any of the rights it may have, Buyer at its
option may require Seller, at Seller's expense (i) promptly to repair or
replace any or all rejected goods, or to cure or reperform any or all
rejected services, or (ii) to refund the price of any or all rejected goods
or services. All such rejected goods will be held for Seller's prompt
instruction and at Seller's risk. Nothing contained herein shall relieve in
any way Seller from the obligation of testing, inspection and quality
control.
11. Force Majeure
-------------
(a) Whenever any causes of the type specified in subsection (b) below
delay or prevent full and timely performance of this Order or
threaten to, Seller shall promptly give notice to Buyer.
(b) Neither party shall be liable to the other for any delay or failure
to perform fully where such delay or failure is caused by acts of
public enemy, acts of a sovereign nation or any state or political
subdivision or fires, floods or explosions, where such cause is
beyond the reasonable control of the affected party and renders
performance commercially impracticable as defined under the Uniform
Commercial Code. In the event of such a failure or delay in
performance by Seller, Buyer may at its option (i) reject any partial
or future performance by Seller upon giving reasonable notice in
writing to Seller, and this Order shall thereupon be terminated and
neither party shall be liable to the other hereunder, or (ii) where
limited production by Seller is possible, Buyer may require Seller to
apportion its materials and resources so as to produce for Buyer that
quantity of goods ordered by Buyer which bears the same relationship
to Seller's total production for all customers as the scheduled
production of goods for Buyer bears to the Seller's total scheduled
production.
34
12. Industrial Property
-------------------
(a) In the event Seller, or any subcontractor or other third party
working for Seller, creates or develops any designs or goods or
services especially for Buyer, the proprietary rights to such
designs, goods or services shall vest in Buyer, and Seller hereby
assigns and conveys and shall assign and convey or cause to be
assigned or conveyed all such proprietary rights, including but not
limited to all copyright, trademark and patent rights therein.
(b) Except as provided in the preceding subsection, in the event Seller,
or any subcontractor or other third party working for Seller, designs
or incorporates any new features of design or improvements in any
designs or goods made, or services furnished, pursuant to this Order
as a result of Seller's or such third party's compliance with the
drawings, specifications or directions of Buyer, Seller grants to
Buyer the right to reproduce such designs or goods or to perform such
services together with, if applicable, a royalty-free, nonexclusive,
irrevocable license covering such new feature of design or
improvement.
(c) Seller shall assert no claim of any proprietary interest in or to any
drawings, specifications or other material furnished by Buyer to
Seller in connection herewith, and Seller shall not use such
drawings, specifications or other material (other than in connection
with this Order) without the prior written consent of Buyer.
(d) Seller shall execute, and shall cause subcontractors and other third
parties working for it to execute, any and all instruments deemed by
Buyer to be necessary or appropriate under subsections (a) and (b)
hereof.
(e) Any information which Seller may disclose to Buyer with respect to
the design, manufacture, sale or use of the goods or services shall
be deemed to have been disclosed as part of the consideration for
this Order, and Seller shall not assert any claim (other than a claim
for patent infringement) against Buyer by reason of Buyer's use
thereof. Buyer does not grant indemnity to Seller for infringement of
any patent, trademark, copyright or data rights.
(f) In no event shall Seller sell or distribute in any manner whatsoever
to persons other than Buyer or parties authorized in writing by
Buyer, goods, supplies, materials or objects of any kind which are
imprinted with or contain Buyer's logo, trade names, trademarks or
labels, even though rejected by Buyer as nonconforming.
35
13. Disclosure of Information; Confidentiality of Order
---------------------------------------------------
(a) Seller shall not use or disclose any data, designs, or other
information belonging to, supplied by or on behalf of Buyer. Upon
completion by Seller of its obligations under this Order or upon
Buyer's request, such data, designs and other information or any
copies thereof shall be returned to Buyer. Where in accordance with
Buyer's written authorization, Buyer's data, designs or other
information is furnished to Seller's suppliers for procurement of
supplies by Seller for use in the performance of this Order, Seller
shall insert the substance of this provision in its own purchase
order.
(b) This Order is confidential, and Seller shall not, without prior
written consent of Buyer, disclose any information relative to or
derived under this Order, except as may be required to ensure
performance. Unless otherwise authorized by Buyer, Seller shall not
advertise or publish the fact that Seller has contracted to furnish
Buyer the goods or services.
14. Assignment and Delegation
-------------------------
Neither this Order, or any part thereof, may be assigned,
subcontracted or otherwise transferred by Seller, voluntarily or by
operation of law, even with a majority of the stock or assets of Seller,
without the prior written consent of Buyer, and any such assignment or
transfer without such consent shall be null and void and of no force or
effect whatsoever. The terms and conditions of this Order shall bind any
permitted successors and assigns of Seller. Any consent by Buyer to
assignment shall not be deemed to waive Buyer's right to recoupment and/or
set off of claims arising out of this or any other transactions with
Seller, its divisions, affiliates or subsidiaries, or to settle or adjust
matters with Seller without notice to permitted successors and assigns.
Seller has no authority to bind Buyer to any obligation to third parties.
Seller shall indemnify and hold Buyer harmless against any claims arising
out of acts of subcontractors or its employees performing services on
Buyer's premises.
15. Responsibility for Property; Indemnification
--------------------------------------------
(a) Any materials, items or equipment (including, but not limited to, for
purposes of this Section, all tools, dies, mechanicals, negatives,
plates, drawings, sketches, and artwork) furnished, funded or paid
for by Buyer, provided or made available to Seller in connection with
this Order, shall be deemed as held by Seller upon consignment. All
such materials, items and equipment not used in the manufacture of
the goods shall, as directed, be returned to Buyer at Buyer's
expense, and, if not accounted for or so returned, shall be paid for
by Seller. In no event shall Seller transfer or move such materials,
items or equipment to the premises of any third party without the
written permission of Buyer. Seller shall not use such materials,
items or equipment for any purposes or for any party not authorized
in writing by Buyer. Seller shall be fully responsible and indemnify
Buyer for any loss or destruction of or damage to such materials,
items or equipment until the same are returned to the possession of
Buyer,
36
whether or not such loss, destruction or damage is attributable to
acts or omissions of Seller or its representatives, officers, agents
or employees (normal wear and tear for authorized purposes and
parties excepted).
(b) Seller shall obtain and maintain property insurance upon all such
materials, items or equipment to the full replacement value thereof.
This insurance shall be specifically so endorsed, and Buyer shall be
named as an additional insured.
16. Insurance
---------
(a) Seller shall maintain at all times during this agreement, the
following minimum insurance coverages (or self-insurance in
equivalent amounts):
<s> <c> <c>
Commercial General Liability $1,000,000 Per Occurrence
Bodily Injury & Property Damage
$1,000,000 Personal & Advertising Injury
$1,000,000 Products/Completed Operations
$2,000,000 General Aggregate
Commercial Auto Liability $1,000,000 Combined Single Limit- Any Auto
Workers Compensation Statutory
Employers Liability $1,000,000 Each Accident
$1,000,000 Disease - Each Employee
$1,000,000 Disease - Policy Limit
Excess/Umbrella Liability $3,000,000 Per Occurrence
(b) Seller shall furnish Buyer with a certificate evidencing the
aforementioned insurance coverage. Such certificate shall provide for
thirty (30) days written notice to Buyer in the event of
cancellation, material modification of coverage, or non-renewal.
Buyer, its subsidiary companies, officers and employees shall be
named as additional insureds on all policies except for workers
compensation. Any subcontractors used by Seller are required to
maintain the coverage terms stated above.
(c) Compliance by Seller with the insurance provisions of this Order
shall not relieve Seller of any liabilities with respect to the
agreements contained herein and the goods and/or services provided
hereunder.
17. Payment
-------
Invoices will normally be paid according to discount terms, or if no
discount is offered, within thirty (30) to sixty (60) days after receipt
and acceptance of the goods or completion and acceptance of services or
according to other agreed upon payment terms. At least five (5) working
days are requested to process payments from the date of receipt of invoices
irrespective of when goods and services are received. Unless specified
otherwise, discount periods will be computed from either the date of
delivery plus three days' allowance for inspection or the date of receipt
of correct invoices, prepared in accordance with the terms of this Order,
whichever date is later. Payment shall not be construed to limit Buyer's
right of inspection, acceptance, set-off, or any other right.
37
18. Paid Stock
----------
(a) Any goods for which Buyer has paid Seller but which have not been
delivered to Buyer or shipped pursuant to Buyer's instruction shall
constitute "paid stock" of Buyer. Paid stock shall not be commingled
or stored with Seller's own inventory of goods for customers other
than Buyer and shall be physically separated from Seller's inventory
in an area designated by prominent signs and markings which shall
identify the paid stock stored within the warehouse area as the sole
property of Buyer.
(b) Seller shall bear all risk of loss, injury or destruction to the paid
stock while it is warehoused with Seller, except remaining shelf
issues, and shall obtain and maintain insurance insuring the paid
stock against loss, damage or destruction due to accident, theft,
fire, flood, abuse or vandalism or other hazards commonly covered by
extended coverage insurance.
(c) Seller shall not sell, lease, assign, transfer, pledge, hypothecate
or otherwise encumber, except as specifically permitted in writing by
Buyer, any paid stock warehoused with Seller or any interest therein.
In addition, Seller shall execute such financing statements, security
documents and other instruments as Buyer shall deem appropriate to
protect Buyer's ownership of the paid stock against claims of
creditors of Seller and other third persons. Seller shall and does
hereby indemnify and hold harmless Buyer from and against the payment
of any sum of money and against any expenses whatsoever, including
attorneys' fees and court costs, which Buyer may be called upon to
pay or incur resulting from any loss or damage to the goods while
warehoused with Seller or resulting from a creditor's or other third
party's claim of interest, lien or right in or to any paid stock
warehoused with Seller.
19. Taxes and Other Exactions
-------------------------
a) Buyer shall be responsible for all transfer, sales, use, value-added
taxes, duties, levies, tariffs or similar charges of any kind imposed
by any federal, state, local, or other governmental authority for
goods or services provided under this Agreement ("Taxes"). b) Seller
shall be responsible for 1) remittance of the Taxes for which Buyer
shall be responsible where required by operation of law [i.e., where
Buyer is not allowed by the taxing jurisdiction to self-assess and
directly remit such taxes], and the filing of any related tax
returns; and 2) all other taxes, assessments, charges, duties, fees,
levies or other governmental charges, including federal, state, city,
county, parish, foreign or other income, franchise, capital stock,
real property, personal property, escheatment or unclaimed property,
intangible, withholding, FICA (or similar), unemployment
compensation, disability, environmental (including taxes under
section 59A of the Internal Revenue Code of 1986, as amended, fuel,
excise, gross receipts, alternative or add-on-minimum, estimated and
all other taxes of any kind for which Seller may have any liability
imposed by any governmental authority (including interest, penalties
or additions associated therewith) whether disputed or not, and
including any transferee or secondary liability in respect of any tax
(whether imposed by law, contractual agreement or otherwise) and any
liability in respect of any tax as a result of being a member of any
affiliated, consolidated, combined, unitary or similar group. c) Each
of the parties will
38
use its reasonable, good faith efforts legally to minimize any taxes
associated with the transactions contemplated in this Agreement. The
party requesting that such efforts be made by the other party shall
be responsible for all reasonable costs associated with such request.
20. Examination of Seller's Records and Place of Business
-----------------------------------------------------
Upon request by Buyer, any duly authorized representative of Buyer
shall, until three (3) years after final payment under this Order, have
access to and right to examine directly pertinent books, papers, documents,
accounts and records of Seller involving transactions related to this Order
and to examine Seller's place of business as necessary to determine whether
the terms of this Order are being carried out.
21. Waiver
------
Buyer shall not, by any act, delay, omission or otherwise, be deemed
to have waived any of the rights or remedies under this Order, and no
waiver whatever shall be valid as against Buyer unless in writing, signed
by an authorized representative of Buyer, and then only to the extent set
forth therein. Buyer's waiver of any right or remedy under the terms of
this Order on any one occasion shall not be construed as a waiver of any
right or remedy which Buyer would otherwise have on a future occasion.
22. Set Off
-------
Seller agrees that Buyer shall have the right to set off against
amounts which may become payable by Buyer to Seller under this contract or
otherwise, any present or future indebtedness of Seller to Buyer, money,
prepaid inventory or otherwise, whether arising under this Order or
otherwise.
39
23. Miscellaneous
-------------
(a) Except as otherwise expressly provided herein, any notice or
communication required or permitted hereunder shall be sufficiently
given if sent in writing by registered or certified mail, postage
prepaid, to Seller and Buyer at their respective addresses as the
same appear on the reverse side hereof. Any such notice, if so
mailed, shall be deemed to have been received the third business day
following such mailing. Either party hereto may change its address
for notice purposes by written notice to the other party as specified
herein.
(b) All rights and obligations under this Order, including matters of
construction, validity and performance, shall be governed by the laws
of the State of Georgia.
(c) The various provisions of this Order are severable and any
determination of invalidity or unenforceability of any one provision
hereof shall have no bearing on the continuing force and effect of
the remaining valid provisions hereof.
(d) Captions given to various sections herein are for convenience only
and are not intended to modify or affect the meaning of any of the
substantive provisions hereof.
(e) Seller shall be deemed in respect of all activities of Seller
contemplated hereunder to be an independent Seller and neither Seller
nor any of its agents or employees shall have the right or authority
to bind Buyer in any way.
(f) Nondiscrimination in Employment- Unless this contract is exempted,
there is incorporated herein by reference the provisions of Section
202, the equal opportunity clause of Executive Order 11246, as
amended, Section 60.7415, the affirmative action clause of the
regulations under the Rehabilitation Act of 1973, and Section
60.250.5, the affirmative action clause of the regulations under 38
U.S.C. 4212, the Vietnam Era Veterans' Readjustment Assistance Act of
1974.
(g) This order contains the entire agreement between Buyer and Seller
regarding the subject matter hereof, and there have been no other
representations or inducements, oral or otherwise, made by any party
in connection herewith.
40
Exhibit 9.1C
Order Fulfillment and Lead Time Requirments
[REDACTED]
41
Exhibit 10.2
Company's Intellectual Property
Owned Trademarks and other Intellectual Property Rights:
Marks and design trade dress for
* Bravo!
* Slammers Ultimate Milk Shake
* Slammers Ultimate Milk
* Slammers Ultimate Smoothie
* Pro Slammers
* Slim Slammers
[Exhibit 10.2 continued on next page]
42
- -----------------------------------------------------------------------------------
Country Trademark Serial No./ Status
Registration No.
- -----------------------------------------------------------------------------------
<s> <c> <c> <c>
USA BLENDERS 78/661,707 Pending
- -----------------------------------------------------------------------------------
USA METRECARB 78/369,965 Pending, Opposed
- -----------------------------------------------------------------------------------
USA NUTRITION BAR IN A BOTTLE 78/667,224 Pending
- -----------------------------------------------------------------------------------
USA POWER SLAMMERS 78/667,231 Pending
- -----------------------------------------------------------------------------------
Canada SLAMMERS 1,264,851 Pending
- -----------------------------------------------------------------------------------
Egypt SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Lebanon SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Mexico SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
Oman SLAMMERS 36953 Pending
- -----------------------------------------------------------------------------------
Saudi Arabia SLAMMERS Not yet assigned Pending
- -----------------------------------------------------------------------------------
USA SLAMMERS (for tea) 78/512,874 Pending/suspended
- -----------------------------------------------------------------------------------
USA SLAMMERS & Design 2,798,883 Registered
- -----------------------------------------------------------------------------------
Canada SLAMMERS FORTIFIED MILK 1,147,967 Pending, Allowed
- -----------------------------------------------------------------------------------
European SLAMMERS FORTIFIED MILK 2 827 855 Registered
Community
- -----------------------------------------------------------------------------------
Mexico SLAMMERS FORTIFIED MILK 781763 Registered
- -----------------------------------------------------------------------------------
USA SLAMMERS FORTIFIED REDUCED 2,798,884 Registered
FAT MILK & Design
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS & Design 2,798,885 Registered
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS FORTIFIED 2,798,882 Registered
LOWFAT MILK & Design
- -----------------------------------------------------------------------------------
USA SLIM SLAMMERS FORTIFIED 2,803,268 Registered
MILK
- -----------------------------------------------------------------------------------
Licensed Trademarks and other Intellectual Property Rights:
Names and Likenesses on Pro Slammers
MARVEL (NORTH AMERICA)
(continued on next page)
43
- -------------------------------------------------------------------------------
(a) Licensor:
--------
Contact
Marvel Enterprises, Inc. Marvel Enterprises, Inc.
417 Fifth Avenue, Mezzanine, Paul Gitter
212-576-4026
New York, NY 10016
and
Marvel Characters, Inc.,
10474 Santa Monica Boulevard,
Suite 206,
Los Angeles, California 90025
- -------------------------------------------------------------------------------
(b) Characters/Marks: Licensee shall only use one character per Licensed
---------------- Article. Co-mingling of more than one character on a
Licensed Article shall require prior written approval
from Marvel.
The following characters as they appear in Marvel's
comic book publications sold at retail (excluding
characters and/or the portrayal of characters in
comics based upon motion picture, television, video
games or any other entertainment products) ("Classic
Characters") limited to:
Spider-Man, Peter Parker, Aunt May, Mary Jane Watson
Parker, J. Jonah Jameson, Green Goblin, Doc Ock,
Venom, Black Cat, Kraven the Hunter (collectively,
"Spider-Man Family").
Beast, Colossus, Cyclops, Gambit, Archangel, Jean
Grey, Professor X, Psylocke, Rogue, Storm, Wolverine,
Nightcrawler, Iceman, Bishop and Cable, Juggernaut,
Magneto, Sabretooth, Sentinels, Blob, Apocalypse,
Mystique and Toad.
Mr. Fantastic, The Thing, The Human Torch, The
Invisible Woman, Dr. Doom and Mole Man.
Silver-Surfer, Shalla Bal and Galactus.
The Incredible Hulk, Abomination, The Leader.
Captain America, Iron Man
- -------------------------------------------------------------------------------
44
- -------------------------------------------------------------------------------
Daredevil, Elektra and Kingpin.
The following characters as they appear in the
Spider-Man and Friends kids toy style guide limited
to: Spider-Man, Spider-Girl, Storm, Wolverine, Hulk,
Thor, Lizard, Rhino, and Captain America. The
characters must appear in a group of at least three
or more and must include Captain America or Thor.
However, individual characters may appear if the
multiple character heads logo prominently appears
and is 25% of the size of the actual character image
on the Licensed Article. No one character may be more
prominent than another.
- -------------------------------------------------------------------------------
(c) Licensed Articles: 1) Extended shelf life and aseptic UHT flavored milk
----------------- in the following sizes: 8 oz., 11.2 oz. and 16 oz.
2) Licensee may sell kits to Authorized Sublicensees
(defined below) which consist of the ingredients
necessary to manufacture Licensed Article #1
("Kits").
All Licensed Articles using the Spider-Man
Family or Spider-Man and/or Spider-Girl of Spider-
Man and Friends shall be (x) single-serving, (y)
Non-Branded, and (z) are in a shape or contain
prominent artwork addressed primarily to children
under the age of 10. "Non-Branded" means a container
in which the name of the Licensee, manufacturer
and/or distributor is displayed, if at all, only in
a non-prominent manner. For the avoidance of doubt,
Licensee's "Slammers" trademark is not the name of
the Licensee, the manufacturer and/or the
distributor.
- -------------------------------------------------------------------------------
(d) Territory/Channels
------------------
of Distribution:
- ---------------
(i) Territory: United States, its territories and possessions,
--------- Canada and Mexico
1. Gift
- --------------------- 2. Specialty
3. Catalog
(ii) Channels of 4. Drug Stores
----------- 5. Mid-Tier
Distribution: 6. Internet-may only be sold or shipped within the
- ------------ territory specified in Section 1(d) (i)
7. Comic Book
8. Mass Market
- -------------------------------------------------------------------------------
45
- -------------------------------------------------------------------------------
9. Grocery
10. Upstairs
11. Vending Machines - all locations
12. Schools
13. Direct Sales method, including internet direct
sales-may only be sold or shipped within the
Territory specified in Section 1(d)(i)
14. Club Stores
15. Theme Parks
16. Movie Theaters
17. Dollar stores
18. Discount Stores
- -------------------------------------------------------------------------------
(e) Term:
----
Commencement
Date: Upon the date of execution by both parties
Expiration Date: April 1, 2006
- -------------------------------------------------------------------------------
(f) Exclusive/Non- Non-Exclusive
--------------
Exclusive:
---------
- -------------------------------------------------------------------------------
(g) Royalty Rate: [REDACTED]
------------
(i) Percentage:
----------
- -------------------------------------------------------------------------------
46
- -------------------------------------------------------------------------------
(ii) Per Article
-----------
Royalty:
-------
- -------------------------------------------------------------------------------
(h) Minimum Royalty
---------------
Guarantee: [REDACTED].
---------
- -------------------------------------------------------------------------------
Advance: [REDACTED]
-------
- -------------------------------------------------------------------------------
Balance: [REDACTED]
------- For the avoidance of doubt, Licensee
acknowledges and agrees that (I) Royalties earned
from the sale of the Articles in United States its
territories and possessions and Canada shall be
calculated separately and shall be offset solely
against the Minimum Royalty Guarantee amount defined
in A. above and (II) Royalties earned from the sale
of the Articles in Mexico shall be calculated
separately and shall be offset solely against the
Minimum Royalty Guarantee amount defined in B. above.
- -------------------------------------------------------------------------------
(i) Advertising/Promotion Commitment/Common Marketing Fund:
------------------------------------------------------
(A) [REDACTED]
(B) CMF: N/A
- -------------------------------------------------------------------------------
(j) Mandatory Artwork Fee: Two Thousand Dollars ($2,000) payable upon the
--------------------- signing of this Agreement by Licensee.
- -------------------------------------------------------------------------------
(k) Insurance: Combined Single Limit of $3,000,000 per occurrence.
---------
- -------------------------------------------------------------------------------
(l) Product Development/Submission Date: June 25, 2005
-----------------------------------
- -------------------------------------------------------------------------------
(m) Trade Introduction Date: July 30, 2005
-----------------------
- -------------------------------------------------------------------------------
(n) Consumer Introduction Marketing Date: August 15, 2005
------------------------------------
- -------------------------------------------------------------------------------
(o) Post-Expiration Disposal Period 60 Days
-------------------------------
- -------------------------------------------------------------------------------
47
MARVEL (UK)
- -------------------------------------------------------------------------------
(a) Licensor: Contact: Marvel Enterprises
-------- International Ltd
Marvel Enterprises, Inc.
Address: 7 Portland Place
417 Fifth Avenue, Mezzanine,
London
New York, NY 10016
W1B 1PP
and
Attention: Bruno Maglione
Marvel Characters, Inc.,
Tel: 20 7031 0415
10474 Santa Monica Boulevard,
Fax: 20 7031 7416
Suite 206,
Email: bmaglione@marvel.com
Los Angeles, California 90025
- -------------------------------------------------------------------------------
(b) Characters/Marks: The following characters as they appear in Marvel's
---------------- comic book publications sold at retail (excluding
characters and/or the portrayal of characters in
comics based upon motion picture, television or home
video versions) ("Marvel Classic Characters")
limited to:
Marvel Heroes Classic Characters: Classic Marvel
artwork for the co-mingled character program known
as Marvel Heroes and taken only and exclusively from
the dedicated Marvel Heroes Style Guide, as in effect
from time to time during the Term of the Agreement,
featuring the character families of Spider Man,
X-Men, Hulk, Fantastic Four, Silver Surfer, Captain
America, Thor, Iron Man, Daredevil, Namor, Dr.
Strange and Nick Fury as well as other character as
may be added to this program and featured in its
style guide from time to time. Marvel Heroes is
specifically a co-mingled character program meaning
that all Marvel Heroes licenses shall feature
multiple characters in either of the two following
ways: a) not less than three equally represented
characters on a single SKU (for example a bed duvet,
T-shirt or play-tent) or, subject to Marvel approval
in writing on a case-by-case basis, b) not less than
four characters, one character per SKU, equally
represented on a repeat purchase collectible SKU line
(for example ballpoint pens, lollipops) whereby the
product line is conceived, branded, marketed,
packaged and merchandised as a collectible multiple
character product line at all times.
- -------------------------------------------------------------------------------
48
- -------------------------------------------------------------------------------
(c) Licensed Articles: Extended Shelf Life and Aseptic UHT Flavored Milk-
----------------- limited to the following sizes: 8 oz., eleven 11.2
oz., and 16 oz.
- -------------------------------------------------------------------------------
(i) Territory/Channels
------------------
of Distribution:
---------------
(i) Territory: United Kingdom and Ireland
---------
- -------------------------------------------------------------------------------
(ii) Channels of
-----------
Distribution: 1. Mass Market
------------ 2. High Street retail
3. Direct Sales method, including internet direct
sales-may only be sold or shipped within the
Territory specified in Section 1(d)(i)
- -------------------------------------------------------------------------------
(j) Term:
----
Commencement
Date: December 1, 2004
Expiration Date: March 31, 2006
- -------------------------------------------------------------------------------
(k) Exclusive/Non-
--------------
Exclusive: Non-Exclusive
---------
- -------------------------------------------------------------------------------
(l) Royalty Rate: [REDACTED]
------------
(i) Percentage:
----------
(ii) Per Article
-----------
Royalty:
-------
- -------------------------------------------------------------------------------
(m) Minimum Royalty
---------------
Guarantee: [REDACTED]
---------
- -------------------------------------------------------------------------------
Advance: [REDACTED]
------- Twenty Thousand United Kingdom Pounds ([POUND]20,000)
payable on or before September 1, 2006.
Balance:
-------
- -------------------------------------------------------------------------------
(i) (a) Mandatory Artwork Fee: N/A
---------------------
- -------------------------------------------------------------------------------
49
- -------------------------------------------------------------------------------
(b) Marvel Marketing Fund (MMF) Commitment: One Thousand United Kingdom
-------------------------------------- Pounds ([POUND]1,000) United
Kingdom Pounds (GBP1,000)
payable by Licensee within
thirty days of invoice by
Marvel Enterprises
International.
- -------------------------------------------------------------------------------
(j) Insurance: Combined Single Limit of $3,000,000 per occurrence.
---------
- -------------------------------------------------------------------------------
(k) Product Development/Submission Date: January 1, 2005
-----------------------------------
- -------------------------------------------------------------------------------
(l) Trade Introduction Date: March 1, 2005
-----------------------
- -------------------------------------------------------------------------------
(m) Consumer Introduction Marketing Date: October 1, 2005
------------------------------------
- -------------------------------------------------------------------------------
(n) Post-Expiration Disposal Period: 90 Days
-------------------------------
- -------------------------------------------------------------------------------
50
MASTERFOODS (US)
- -------------------------------------------------------------------------------
Licensor Contact: Masterfoods USA,
- --------
Masterfoods USA,(a division of Mars, Attention: Commercial Manager
Incorporated) Telecopy: 908-813-4654
800 High Street
Hackettstown
New Jersey 07840
- -------------------------------------------------------------------------------
(b) Marks: MILKY WAY(R) Brand
----- STARBURST(R) Brand
3 MUSKETEERS(R) Brand
- -------------------------------------------------------------------------------
(c) Licensed Articles: MILKY WAY(R) Brand Flavored Milk Drink - single
----------------- serving
STARBURST(R) Brand Flavored Milk Drink - single
serving
3 MUSKETEERS(R) Brand Flavored Milk Drink - single
serving
- -------------------------------------------------------------------------------
(n) Territory/Channels
------------------
of Distribution:
--------------- The United States and its Territories and
(i) Territory: Possessions, and U.S. Military installations
------------- worldwide
- -------------------------------------------------------------------------------
(ii) Channels of Grocery, Schools, foodservice, vending, bodega,
----------- convenience, club stores, medical institutions, Gift,
Distribution: Specialty, Drug Stores, Mid-Tier and Mass Market,
------------ Vending Machines, Theme Parks, and Movie Theaters
- -------------------------------------------------------------------------------
(o) Term:
----
Commencement
Date: July 1, 2004
Expiration Date: December 31, 2007
- -------------------------------------------------------------------------------
(p) Exclusive/Non-
--------------
Exclusive: Non-Exclusive, with right of first refusal
---------
- -------------------------------------------------------------------------------
(q) Royalty Rate: Type of Sale % of Net Sales Value
------------ -----------------------------------------------------
(i) Percentage: [REDACTED]
----------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
To Distributor F.O.B. outside n/a n/a n/a n/a
Territory:
-----------------------------------------------------
51
- -------------------------------------------------------------------------------
N/A
(ii) Per Article
-----------
Royalty:
-------
- -------------------------------------------------------------------------------
(r) Minimum Royalty Contract Year Amount Due Date
--------------- -----------------------------------------------------
Guarantee: U.S. Canada Mexico Total
-----------------------------------------------------
(s) [REDACTED]
-----------------------------------------------------
Advance: Contract Year Amount Due Date
------- -----------------------------------------------------
U.S. Canada Mexico Total
-----------------------------------------------------
[REDACTED]
-----------------------------------------------------
(i) (a) Mandatory Artwork Fee: N/A
---------------------
- -------------------------------------------------------------------------------
(j) Insurance:
---------
Bodily Injury and Property Damage $1 million per occurrence, with
(per occurrence): not less than $5 million in
excess coverage
Personal Injury and Advertising Injury $1 million per occurrence, with
(per occurrence): not less than $5 million in
excess coverage
Products/Completed Operations $1 million per occurrence, with
(aggregate): not less than $5 million in
excess coverage
General Aggregate per location: $1 million per occurrence, with
not less than $5 million in
excess coverage
- -------------------------------------------------------------------------------
Product Activity Dates:
- ----------------------
- -------------------------------------------------------------------------------
Activity Performance Date (on or before)
Initial preview of Licensed Products to potential customers 1 August 2004
Initial receipt of Licensed Product orders 1 August 2004
Initial shipment of Licensed Products to customers 1 September 2004
- -------------------------------------------------------------------------------
(n) Post-Expiration Disposal Period: 90 Days
-------------------------------
- -------------------------------------------------------------------------------
52
MD ENTERPRISES (US)
- -------------------------------------------------------------------------------
Licensor Contact:
- --------
MD Enterprises, Inc.
MD Enterprises, Inc.
405 Metcalf Avenue, Suite 518 Attn: Mark E. Dowey
Overland Park, Kansas 66202 Title: President, Chief Executive Officer
Fax: (913) 362-0059
- -------------------------------------------------------------------------------
(b) Marks: Moon Pie
-----
- -------------------------------------------------------------------------------
(c) Licensed Articles: MoonPie(R) Milk
-----------------
- -------------------------------------------------------------------------------
(t) Territory/Channels
------------------
of Distribution:
---------------
(i) Territory: United States
---------
- -------------------------------------------------------------------------------
(ii) Channels of Unlimited
-----------
Distribution:
------------
- -------------------------------------------------------------------------------
(u) Term:
----
Commencement
Date: January 15, 2004
Expiration Date: January 14, 2006
- -------------------------------------------------------------------------------
(v) Exclusive/Non-
--------------
Exclusive: Exclusive
---------
- -------------------------------------------------------------------------------
(w) Royalty Rate:
------------
Units of Volume* Royalty**
(i) Percentage: [REDACTED]
---------- *Unit of volume is one container of milk (e.g., 11.2
oz. container, 16 oz. container, etc.)
**Royalty is the percentage set forth in the
preceding schedule of the net wholesale price of one
unit of volume of milk shipped, net of reclamation
N/A
(ii) Per Article
-----------
Royalty:
-------
- -------------------------------------------------------------------------------
(x) Minimum Royalty
---------------
Guarantee: N/A.
---------
- -------------------------------------------------------------------------------
53
- -------------------------------------------------------------------------------
Advance:
-------
N/A
Balance:
-------
- -------------------------------------------------------------------------------
(i) (a) Mandatory Artwork Fee: N/A
---------------------
- -------------------------------------------------------------------------------
(j) Insurance: N/A.
---------
- -------------------------------------------------------------------------------
(k) Product Development/Submission Date: N/A
-----------------------------------
- -------------------------------------------------------------------------------
(l) Trade Introduction Date: N/A
-----------------------
- -------------------------------------------------------------------------------
(m) Consumer Introduction Marketing Date: N/A
------------------------------------
- -------------------------------------------------------------------------------
(n) Post-Expiration Disposal Period: 120 Days
-------------------------------
- -------------------------------------------------------------------------------
54
DIABETES RESEARCH INSTITUTE FOUNDATION, INC.
- -------------------------------------------------------------------------------
Licensor Contact:
- --------
Diabetes Research Institute Diabetes Research Institute Foundation
Foundation, Inc. Attention: Robert A. Pearlman, President
3440 Hollywood Boulevard and Chief Operating Officer
Telephone No.: (954) 964-4040
Suite 100 Facsimile No.: (954) 966-7203
Hollywood FL 33021
- -------------------------------------------------------------------------------
(b) Marks: the service mark DIABETES RESEARCH INSTITUTE and
----- Design
- -------------------------------------------------------------------------------
(c) Licensed Articles: Licensee's artificially sweetened and flavored milk
----------------- beverage goods sold under the trademark SLIM
SLAMMERS.
- -------------------------------------------------------------------------------
(y) Territory/Channels
------------------
of Distribution:
---------------
(i) Territory: worldwide
---------
- -------------------------------------------------------------------------------
(ii) Channels of Unlimited
-----------
Distribution:
------------
- -------------------------------------------------------------------------------
(z) Term:
----
Commencement
Date: May 1, 2003
Expiration Date: Extended to June 30, 2006
- -------------------------------------------------------------------------------
(aa) Exclusive/Non-
--------------
Exclusive: Non-Exclusive
---------
- -------------------------------------------------------------------------------
(bb) Royalty Rate:
------------
[REDACTED]
(i) Percentage:
---------- N/A
(ii) Per Article
-----------
Royalty:
-------
- -------------------------------------------------------------------------------
(cc) Minimum Royalty
---------------
- -------------------------------------------------------------------------------
55
Guarantee: [REDACTED]
---------
- -------------------------------------------------------------------------------
Advance: [REDACTED]
-------
Balance:
-------
- -------------------------------------------------------------------------------
(i) (a) Mandatory Artwork Fee: N/A
---------------------
- -------------------------------------------------------------------------------
(j) Insurance: $2,000,000 per claim and $10,000,000 excess liability coverage.
---------
- -------------------------------------------------------------------------------
(k) Product Development/Submission Date: N/A
-----------------------------------
- -------------------------------------------------------------------------------
(l) Trade Introduction Date: N/A
-----------------------
- -------------------------------------------------------------------------------
(m) Consumer Introduction Marketing Date: N/A
------------------------------------
- -------------------------------------------------------------------------------
(n) Post-Expiration Disposal Period: Six (6) months
-------------------------------
- -------------------------------------------------------------------------------
56
Exhibit 10.6
Recalls/Withdrawals/Regulatory Actions
In the prior three years, in January 2003 Jasper Products engaged in a
voluntary withdrawal of Bravo! Foods' Prisma Looney Tunes Slammers product
from the distribution level (not from retail). Jasper did this to be
conservative and the withdrawal was not required by the FDA.
The reason Jasper took this action resulted from its practice to accept a
water flush in between runs of differing allergens. For example, Jasper
would run soy, then do a full water rinse of the system and then start on a
dairy product. The FDA expressed its preference going forward for the
utilization of an alternative flush methodology. Jasper now requires a full
CIP of the system with cleaning compounds (acid/caustic). To show its good
intentions Jasper voluntarily "dumped" any product in the supply chain that
had only a water rinse in between differing allergens.
57