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Sample Business Contracts

Royalty Agreement - Gary Hansen, Anthony Kane, Burton S. Rosky and Hansen's Juice Creations LLC

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ROYALTY AGREEMENT

         This AGREEMENT  ("Agreement") made as of April 26, 1996, by and between
GARY  HANSEN,  ANTHONY  KANE and  BURTON  S.  ROSKY,  as  Trustees  (hereinafter
collectively  referred to as the "Trustees")  under that certain Trust Agreement
dated as of July 27, 1992 for the benefit of Hansen's Juices, Inc., a California
corporation  (hereinafter referred to as "HJI") as "Licensor" and HANSEN'S JUICE
CREATIONS, Limited Liability Company, as "Licensee."

         The Trustees have obtained by  assignment  the entire right,  title and
interest in and to 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:

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 brewed  coffee,  coffee  flavored
drinks, coffee beans and/or ground coffee, food spreads, and baked goods (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) days 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  there-after  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 night, 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.

         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 night 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,  if 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:
                                                       c/o Burton S. Rosky, Esq.
                                                   Rosky, Landau, Stahl & Sheehy
                                              8383 Wilshire Boulevard, Suite 528
                                                 Beverly Hills, California 90211
                                                        Telecopy: (213) 655-0412

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

         In the case of the 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 H. 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 TRUST
By:               /s/ Gary Hansen, as Trustee
by:               /s/ Anthony Kane, as Trustee


By:               /s/Burton S. Rosky, as Trustee



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: