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Sample Business Contracts

Royalty Agreement - Hansen's Juices Inc. and Hansen's Juice Creations LLC

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ROYALTY AGREEMENT

This AGREEMENT  ("Agreement") made as of April 26, 1996, by and between HANSEN'S
JUICES,  INC., a California  corporation  (hereinafter  referred to as "HJI") as
"Licensor"  and  HANSEN'S  JUICE  CREATIONS,   Limited  Liability  Company,   as
"Licensee."

HJI has obtained a license for the entire  right,  title and interest to the use
of the "trademark" which is registered in the United States Patent and Trademark
Office as set forth below,  including the goodwill of the business in connection
with  which it is used and which is  symbolized  thereby,  for fresh  juices and
fresh juice products:

Trademark:        Hansen's  (hereinafter referred to as the "Trademark.")

U.S. Trademark Registration Number:         1,258,780

Licensee  desires to use,  and to obtain from  Licensor  the right,  license and
privilege to use, the Trademark  worldwide in conjunction  with the manufacture,
sale and  distribution  of fresh juices and fresh juice  products,  (all of such
products are hereinafter sometimes referred to collectively as "Licensed Goods")
and the  Licensor is willing to grant such  license on the terms and  conditions
set forth below.

NOW, THEREFORE,  in consideration of the mutual covenants of the parties and for
other good and valuable  consideration,  receipt of which is hereby acknowledged
by the Licensor, the parties hereto agree as follows:

         1. License.  Licensor  grants to Licensee an exclusive  worldwide right
and license to use the Trademark,  under the state and federal law and under the
auspices and privileges provided by any registration covering said Trademark, on
the Licensed Goods. It is expressly agreed between the parties that the Licensor
retains the exclusive  right to use or license the use of the "Hansen's" mark in
connection with the  manufacture,  sale and/or  distribution of goods other than
the Licensed Goods.

         Licensee,  and any other entity  organized by. Licensee for the purpose
of  manufacturing,  selling,  and/or  distributing  the Licensed  Goods shall be
entitled to use the "Hansen's" name in its company name or any assumed or "doing
business" name;  provided,  however,  that Licensee's if its shares are publicly
traded on a  recognized  stock  market,  shall not be  entitled to use the words
"beverage(s)" or "juice(s)" in conjunction with the "Hansen's" name 'in the name
of such publicly traded company.

         2. Term.  The term -of this license shall  commence upon receipt by the
Licensor of written notice from Licensee of Licensee's  election to commence the
manufacture,  sale and/or  distribution of any of the Licensed  Goods,  provided
that such notice  shall have been  received by the  Licensor  within three years
following the date hereof.  (The date of such notice is hereinafter  referred to
as the "Effective Date").  The license granted hereby shall continue  thereafter
in perpetuity  unless (i) terminated by Licensee upon written notice to Licensor
given not less than ninety (90) day's prior to the end of any "License  Year" or
(ii) terminated by the Licensor if, after making the election referred to above,
Licensee shall have failed to generate (a) a minimum of $500,000.00 of aggregate
"Net Sales" (as defined below)  following the Effective Date, or (b) if Licensee
shall have failed to generate a minimum of $500,000.00 of aggregate Net Sales of
Licensed  Goods  during  any  License  Year  thereafter.   Notwithstanding   the
foregoing,  however, if Licensee shall have failed to generate minimum aggregate
Net Sales for any  License  Year,  as required in the  preceding  sentence,  but
Licensee  shall  nonetheless  elect to pay to  Licensor  an amount  equal to the
"Royalties"  (as defined  below)  which would have been  payable to Licensor had
Licensee  generated the required  minimum  aggregate net sales of Licensed Goods
for such License Year, as provided above,  then Licensee shall be deemed to have
generated  the minimum  aggregate  Net Sales for such License  Years as required
hereunder and Licensor  shall have no right to terminate  this license by reason
of Licensee's  failure to generate  minimum  aggregate Net Sales in such License
Year.

         For purposes of this  License,  a "License  Year" shall mean the twelve
(12) month period  commencing on the Effective Date and each consecutive  twelve
(12) month thereafter.

3. Quality of Goods. Licensee agrees to maintain the quality of goods sold under
the Trademark  commensurate  with the business position of the parties involved.
Licensor  reserves the right,  upon reasonable  notice, to enter the premises of
Licensee and inspect the quality of goods manufactured,  sold and/or distributed
by Licensee  under the  Trademark  to insure  that the quality of said  Licensed
Goods is maintained.

         Licensee agrees to allow Licensor's  authorized  agents to inspect said
Licensed  Goods  manufactured,  sold and/or  distributed  by Licensee  under the
Trademark  at any time  desired by Licensor  upon  reasonable  notice and during
Licensee's regular business hours.

         In the event that Licensor  shall find that the quality of the Licensed
Goods has not been maintained by Licensee as required in this Paragraph 3 above,
Licensor shall notify Licensee in writing of any such  dissatisfaction  with the
quality of said Licensed Goods and Licensee shall have thirty (30) days in which
to  bring  the  quality  of  such  Licensed  Goods  up  to  a  level  reasonably
satisfactory  to Licensor.  If Licensor's  complaints  are such that a remedy or
cure cannot  reasonably  be completed  within said thirty (30) day period,  then
Licensee shall commence to cure such dissatisfaction within such thirty (30) day
period and shall  thereafter  diligently  and  continuously  take all reasonable
steps to effect such cure or remedy.  In the event that  Licensee  shall fail to
perform its  obligation to maintain the quality of any Licensed  Goods and shall
fail to cure such failure as hereinabove provided, Licensor shall have the right
to terminate or suspend Licensee's right to manufacture,  sell and/or distribute
such Licensed  Goods so long as the quality  thereof  shall be below  acceptable
standards, but nothing herein shall be deemed to terminate, suspend or otherwise
affect  Licensee's  continued right to manufacture,  sell and/or  distribute any
other  Licensed  Goods  which  shall be of a quality  which is  consistent  with
Licensee's obligations hereunder.

         4.  Ownership of the  Trademark.  The parties agree that Licensor shall
retain full ownership of all rights and title in and to said Trademark,  subject
only to the rights and license granted to Licensee  hereunder or under any other
license agreement between the parties.

         5. Use of Trademark.  Licensee shall,  upon request,  provide  Licensor
with  representative  samples of literature,  brochures,  signs and  advertising
materials  prepared by the Licensee  bearing the Trademark at least fifteen (15)
days prior to the first use thereof.  If Licensor  reasonably  finds any of said
material  objectionable,  notice of objection citing specifics shall be given to
Licensee  within eight (8) days after receipt of the  materials by Licensor.  If
the parties cannot resolve the objections among themselves,  the matter shall be
submitted  to  arbitration  pursuant  to  Paragraph  18  hereof.  When using the
Trademark  under this  Agreement,  Licensee shall use its best efforts to comply
substantially with all laws pertaining to trademarks in force at any time in any
country  in which  said  Licensed  Goods  are  sold.  This  provisions  includes
compliance  with  trademark  marking  requirements  of the country in which said
Licensed Goods are sold.

         6. Covenants of Licensor and Licensee.

         6.1.for a period of three (3) years  following  the date  hereof and so
             long  thereafter  as this  license  shall  remain in full force and
             effect. The Licensor shall not use or grant others the right to use
             the Trademark on or in connection  with Licensed  Goods in any area
             of the world. If Licensee shall not have served written notice upon
             Licensor of it election to commence  the  manufacture,  sale and/or
             distribution of any Licensed Goods within three (3) years following
             the date hereof or if this License  shall be terminated at any time
             following  the Effective  Date,  Licensor may  thereafter  grant to
             others  the  right  or  license  to  use  the  Trademark  on  or in
             connection with Licensed Goods in any area of the world;  provided,
             however,  that if Licensor  shall  propose to grant a license  with
             respect to the use of the Trademark on Licensed  Goods to any third
             party as  permitted  above,  Licensor  shall first offer to grant a
             license  upon  the same  terms  and  conditions  to  Licensee,  and
             Licensee  shall have the right,  for a period of thirty (30).  days
             following its receipt of notice  thereof,  to elect to enter into a
             new license agreement with Licensor upon such terms and conditions.

         6.2 Licensor  agrees  to  maintain  at its sole  cost and  expense  the
             federal  registration of the Trademark in the United States in full
             force  and   effect,   including   the  filing  of  any   renewals,
             declarations or affidavits of use, or, if appropriate,  to file new
             applications  for  registration.   Upon.  written  request  of  the
             Licensee,  Licensor  shall  use its best  efforts  to  procure  the
             registration of the Trademark or any other trademark (including any
             label or logo) relating to the Licensed Goods which incorporates or
             includes the  Trademark in any  jurisdiction  outside of the United
             States  in which  Licensee  shall  have  given  written  notice  to
             Licensor of its bona fide  intention  to  manufacture,  sell and/or
             distribute the Licensed Goods,  and shall maintain the same in full
             force  and   effect,   including   the  filing  of  any   renewals,
             declarations  or affidavits  of use;  provided,  however,  that alI
             reasonable  costs and  expenses  associated  with any such  foreign
             registrations  or other filings with respect to the Trademark shall
             be  advanced  by the  Licensee  for the  account  of  Licensor  and
             Licensee shall recoup such costs and expenses only by offsetting or
             deducting  the same  from any  royalties  which may be  payable  by
             Licensee to  Licensor  on account of the sale of any goods  bearing
             the Trademark,  or any related  trademarks  licensed by Licensor to
             Licensee   under  this  and/or  any  other  license   agreement  or
             arrangement between Licensor and Licensee, or from any other monies
             owing  by  Licensee  to  Licensor  hereunder  or  under  any  other
             arrangement or agreement between the parties.  Without limiting the
             generality of the  foregoing,  Licensor shall execute all documents
             reasonably  requested by the  Licensee  for filing and  prosecuting
             such   applications  for  registration  of  the  Trademark  in  any
             jurisdiction throughout the world in which Licensee has a bona fide
             intention  to  manufacture,  sell and/or  distribute  the  Licensed
             Goods. Licensor shall also give to Licensee all assistance Licensee
             reasonably  requires including the giving of testimony in any suit,
             action or proceeding  in order to obtain,  maintain and protect the
             Licensee's  rights  therein and thereto.  If Licensor  shall not so
             execute  or  deliver   any  such   instruments   after   reasonable
             opportunity  to do so,  Licensee  shall  have the right to do so in
             Licensor's name, place and stead and Licensee is hereby irrevocably
             appointed a  Licensor's  attorney in fact for such  purpose,  which
             power is coupled with an interest.

         6.3 The Trust will take all steps  necessary  to defend,  preserve  and
             maintain all its rights 'in the Tradename.  If the Trust shall fail
             to comply with the foregoing  duties,  the Company may so comply in
             the Trust's  name to the extent  permitted by law and to the extent
             necessary  to  defend  or  preserve  such  trademarks,  tradenames,
             service marks or logos.  If the Trust shall fail to comply with the
             foregoing  duty,  the Company may so comply in the Trust's  name to
             the extent  permitted by law and to the extent necessary to defend,
             preserve,  and  maintain  the  Tradename,  but  all at the  Trust's
             expenses,  and the Trust shall  promptly  reimburse  the Company in
             full  for  all  expenses  incurred  for  the  Trust  in  defending,
             preserving and  maintaining  the  Tradename.  In the event that the
             Trust Elects to abandon or discontinue  the use of any Tradename in
             any  territory,  the Company  shall have the right to Continue  the
             usage of said Tradename in such abandoned territory,  provided that
             the  Company  pays for all  costs,  expense,  and  legal  fees with
             respect to the continued use of said Tradename.

         7. Use of Confusingly  Similar Marks.  Licensee agrees not to adopt and
use, without Licensor's written consent,  any marks that are confusingly similar
to the Trademark; provided, however, that Licensee may adopt any trademark, logo
or label which includes or  incorporates  the Trademark in conjunction  with its
sale and distribution of Licensed Goods.

         8.  Royalties.  Licensee  shall pay to  Licensor  percentage  royalties
("Royalties")  based upon "Net Sales" of Licensed Goods sold by Licensee  during
each License Year at the percentage rages set forth on Schedule A annexed hereto
or at such other percentage rates as may be agreed between Licensor and Licensee
with  respect  to  specific  product  categories.  Royalties  shall  be  payable
quarterly  within forty five (45) days  following the end of each quarter during
the License Year.

         As used herein,  the term "Net Sales" shall mean (i) the invoice  price
charged  by  Licensee  on account of the sale of  Licensed  Goods to  customers,
sublicensees,  distributors or others,  less all credits and allowances  granted
for  returned or defective  goods,  by  customers  against  payment for Licensed
Goods; or (ii) all royalties actually received from sublicensees pursuant to any
sublicense  agreement  or  arrangement  with respect to the  manufacturer,  sale
and/or distribution of the Licensed Goods.

         9.  Royalty  Reports  and  Payments.  Licensee  agrees to make  written
reports and make royalty payments to Licensor quarterly during each License Year
of the term hereof with respect to any Royalties payable to Licensor as provided
in Paragraph 8 above.  Such written  reports  shall include an accounting of all
Net  Sales of  Licensed  Goods  during  the  preceding  quarter  and upon  which
Royalties are payable  hereunder.  Said reports shall accompany full payment for
the  Royalties  due for the  reporting  quarter.  Licensee also agrees to make a
written  report to Licensor  within forty five (45) days after any expiration or
termination  of this  license,  stating in such report an  accounting of all Net
Sales  upon  which  Royalties  are  payable  hereunder,  but  which  have not be
previously reported to or paid to Licensor.

         10.  Records.  Licensee  shall obtain and keep records  showing all Net
Sales of  Licensed  Goods  and any  Royalties  due  and/or  paid as set forth in
Paragraph 8 of this license in sufficient detail to enable the Royalties payable
to be determined and Licensee  agrees to permit such records to be examined from
time to time  upon  reasonable  notice to the  extent  necessary  to verify  the
reports  provided for hereunder.  Such  examination to be made at the expense of
Licensor  by any  auditor  appointed  by  Licensor  who shall be  acceptable  to
Licensee,  or, at the option and expense of Licensee by a certified  independent
public accountant appointed by Licensor and approved by Licensee, which approval
shall not be unreasonable withheld.

         11. Default and Termination. Licensor shall have the right to terminate
this  Agreement  by reason of a material  breach by  Licensee  of its duties and
obligations  hereunder  provided that such  material  breach shall not have been
remedied  or cured  within  thirty  (30) days  following  receipt by Licensee of
written notice thereof from Licensor,  of if Licensor's  complaint of a material
breach is such that remedy or cure cannot  reasonably  be completed  within said
thirty (30) day period, then Licensee shall have commenced to cure such material
breach within such thirty (30) day period and shall  thereafter  have diligently
and continuously  taken all reasonable steps to effect such remedy or cure. Such
termination shall be without prejudice to any rights that Licensor may otherwise
have against Licensee for damages or otherwise.

         In the event of a breach or  threatened  breach by either  party of its
obligations under this license, each party acknowledges that the other party may
not have any adequate  remedy at law and may be entitled to seek such  equitable
and  injunctive  relief as may be available to restrain the other party from any
violation of the provisions  hereof. The prevailing party in any such proceeding
shall be  entitled  to  reimbursement  from  the  other  party  of any  expenses
(including,   without  limitation,   reasonable  attorney's  fees)  incurred  in
connection  with  such   proceeding.   Nothing  herein  shall  be  construed  as
prohibiting  either party from  pursuing any other  remedies  available for such
breach or threatened breach, including the recovery of damages.

         12. Effect of Termination or Expiration.  Upon and after the expiration
or termination of this license,  all rights granted to Licensee  hereunder shall
forthwith  revert to Licensor and Licensee shall refrain from any further use of
the Trademark on Licensed Goods pursuant to this  Agreement;  provided,  however
that  Licensee  may,  for a period of one  hundred  eighty  (180) days after the
expiration  and  termination  of this  license,  dispose of any  Licensed  Goods
remaining in the Licensee's  inventory or in process of manufactured at the date
of  termination of this license.  In any such event,  Licensee shall continue to
pay Royalties and furnish  statements  with respect to any period  subsequent to
the  termination of this license in accordance with the terms of this license as
though the same were still in effect.

         13.  Infringement.  In the event that  either  party  shall learn or be
advised  that the  Trademark is being  infringed by a third party in  connection
with the sale of Licensed Goods or any other goods under  circumstances in which
there is created a  likelihood  of confusion  with the  Licensed  Goods or which
could diminish the value of the Trademark,  the party having  knowledge  thereof
shall promptly notify the other party of such infringement.  Licensor shall have
the right to commence an action for infringement,  to select counsel and control
the  prosecution  of such action  (except that Licensee  shall have the right to
participate with its own counsel, at its own cost and expense).  Should Licensor
commence any such action for  infringement,  Licensor  and Licensee  shall share
equally all damages recovered from that suit after Licensor's costs and expenses
of suit have been  recouped.  In the event that  Licensor does not desire to sue
for  infringement,  it shall so notify Licensee promptly that it does not desire
to sue, and Licensee shall thereafter have the right, but not the obligation, to
sue for infringement in its own name or in the name of the Licensor and Licensee
may retain all damages recovered therefrom.  The party bringing the infringement
suit shall be responsible  for all costs and expenses of the suit and shall have
the right to select counsel and control and  prosecution of such suit.  Licensee
and Licensor agree to cooperate in any such suit for infringement, at no expense
to the  other,  and  provide  any  needed  assistance  to the other  party.  The
foregoing  notwithstanding,  the parties may otherwise agree in writing to share
the costs of and recoveries from any such suit.

         14.  Indemnification.  Licensor  assumes no liability to Licensee or to
third parties which respect to the sale of Licensed  Goods by Licensee under the
Trademark,  and Licensee shall  indemnify  Licensor  against losses  incurred by
claims of third  parties  against  Licensor  involving  the sale by  Licensee of
Licensed  Goods  and  obtain  product  liability  insurance  in  the  amount  of
$1,000,000.00 naming Licensor as an insured party and excess liability insurance
in the amount of $5,000,000.00  applicable to product liability claims. Licensee
shall provide written notice to Licensor of said product liability insurance and
shall not cancel the same without  thirty (30) days  written  Notice to Licensor
prior to cancellation of the same.

         15.  Sublicenses.  Licensee  may  sublicense  and/or.  subcontract  the
manufacture,  sale and/or  distribution  of Licensed  Goods,  provided  that any
sublicense  shall be consistent with this license.  However,  Licensee shall not
have the right to grant to third parties  licenses  relating to the Trademark on
any products other than Licensed Goods without the express written permission of
Licensor,  except pursuant to any other license  agreement or other  arrangement
between the parties.

16. Notices. Any notices or other communications required or permitted hereunder
shall be  sufficiently  given if  delivered  personally  or three (3) days after
being sent by registered or certified mail,  return receipt  requested,  postage
prepaid, or transmitted by telecopy with oral confirmation, addressed as follows
or to such other  address of which the parties may be given notice in accordance
with this paragraph:

       In the case of the Licensor:

                                                          Gary Hansen, President
                                                           Hansen's Juices, Inc.
                                                             875 West 8th Street
                                                         Azusa, California 91702
                            Telecopy: (818) 812-6077

       with a copy to: Burton S. Rosky, Esq.

                          Rosky, Landau, Stahl & Sheehy
                       8383 Wilshire Boulevard, Suite 528
                         Beverly Hills, California 90211
                            Telecopy: (213) 655-0412

         In the case of Licensee:                       Hansen's Juice Creations
                                          11777 San Vicente Boulevard, Suite 860
                          Los Angeles, California 90049
                            Telecopy: (310) 826-1252

                     and to:                                     Harvey Laderman
                                          11777 San Vicente Boulevard, Suite 860
                          Los Angeles, California 90049
                            Telecopy: (310) 826-1252


with a copy to:
                                                              Roger Howard, Esq.
                                       Christensen, White, Miller, Fink, Jacobs,
                                                           Glaser & Shapiro, LLP
                                            2121 Avenue of the Stars, 18th Floor
                       Los Angeles, California 90067-5010
                            Telecopy: (310) 556-2920

         17.  Assignability.  It is  mutually  understood  and agreed  that this
license  shall  inure  to the  benefit  of and be  binding  upon  Licensor,  its
successors and/or assigns, and on Licensee,  its successors and/or assigns. This
license and any of the rights or obligations created herein may be assigned,  in
whole or in part,  by  Licensee;  provided,  however,  that  without the written
consent  of the  Licensor  no such  assignment  shall be  permitted  to a direct
competitor of HJI which manufactures  and/or sells fresh juices and/or any other
Licensed  Goods (as  defined in that  certain  Fresh  Juices  License  Agreement
between  Licensor and HJI of even date hereof).  Without limiting the generality
of the foregoing, it is specifically agreed that any bank, financial institution
or other  lender or any  transferee  of any such entity may be  substituted  for
Licensee as a party to this license.

         18.   Arbitration.   The  parties  hereby   expressly  agree  that  any
controversy  or claim arising out of or relating to this license,  or the breach
thereof,  shall be settled by  arbitration  in  accordance  with the  Commercial
Arbitration  Rules of the American  Arbitration  Association  (the "AAA") in Los
Angeles,  California,  before three (3) arbitrators  selected from the panels of
arbitrators  of the AAA.  Any  arbitration  award  shall be final,  binding  and
conclusive upon the parties and judgment  rendered thereon may be entered in any
court having jurisdiction  thereof. The prevailing party in any such arbitration
shall be  entitled  to  reimbursement  from  the  other  party  of any  expenses
(including,  without  limitation,  reasonable  attorney's  fees) incurred in the
connection with such arbitration.

         19.  Miscellaneous.   Nothing  in  this  license  shall  be  deemed  to
constitute or create between  Licensor or Licensee a  partnership,  association,
joint  venture or agency nor shall  either  party  have  power or  authority  to
obligate  or bind the  other  in any  manner  whatsoever,  except  as  expressly
provided  for herein and  neither  such party shall make any  representation  or
warranty on behalf or for the other party.

         No change,  modification,  amendment,  addition to this  license or any
part thereof  shall be valid unless in writing and signed by or on behalf of the
party to be charged therewith.

         This license  constitutes the entire agreement  between the parties and
supersedes all prior  understandings and agreements regarding the subject matter
hereof. Each of the parties  acknowledges and agrees that the other has not made
and is not making and in executing  this license  neither  party has relied upon
any representations,  promises or inducements except to the extent that the same
are expressly set forth in this license.

         If any clause,  paragraph,  sections or part of this  license  shall be
held or declared  to be void,  invalid or illegal for any reason by any court of
competent jurisdiction, such provision shall be ineffective but shall not in any
way  invalidate or affect any other clause,  paragraph,  section or part of this
license.

         This license shall be governed by and construed in accordance  with the
laws  of the  State  of  California  applicable  to  agreements  made  and to be
performed therein.

         IN WITNESS  WHEREOF,  the parties have caused this license to be signed
as of the date and year first above written,



Licensor:         HANSEN'S JUICES, INC.
by:               /s/ Gary Hansen, President
by:               /s/ Jeffrey Heavirland, Secretary



Licensee:         HANSEN'S JUICE CREATIONS, a LIMITED LIABILITY COMPANY
by:               /s/ Timothy Kane, President
by:               /s/ Harvey Laderman, Chairman


SCHEDULE A
Royalties:

         One percent (1%) of Net sales: