EXHIBIT 10.9
 
LICENSE AGREEMENT

Entenmann’s Products, Inc., a Delaware corporation with a principal place of
business at 1724 5th Avenue, Bay Shore, New York 11706 (“Licensor”) enters into
this License Agreement (“Agreement”) with COFFEE HOLDING COMPANY, INC., a
corporation with its principal place of business at 4401 1st Avenue, Brooklyn,
NY 11232 (“Licensee”) as of the 1st day of April, 2007 (“Effective Date”).

Introduction

A. Licensor owns certain intellectual property, including but not limited, to
trademarks, trade dress, names, logos, designs, slogans, copyrights and other
proprietary materials set forth on Exhibit A of this Agreement (the
“Intellectual Property”).

B. Licensee desires to obtain a license to use the Intellectual Property on and
in connection with the manufacturing, distribution and sale of Licensed Products
in the Territory (as defined in this Agreement) under certain terms and
conditions, and Licensor is willing to grant such license.

Terms

In consideration of and incorporating the above premises, and of the mutual
covenants, conditions and agreements contained in this Agreement and for other
good and valuable consideration, the adequacy of which the parties acknowledge,
the parties intending to be legally bound agree as follows:

License Grant

1.1 Grant. Subject to the terms and conditions specified below, Licensee shall
have the nonexclusive license to use the Intellectual Property in the Territory
solely upon and in connection with the manufacturing, distribution, marketing,
promotion, advertising and sale of the products specified on Exhibit B (the
“Licensed Products”).

1.2 Retail Distribution of Licensed Products. Licensee shall place in
distribution the Licensed Products manufactured under this Agreement by or for
Licensee in a fully finished condition and sold only in or to the channels of
distribution set forth on Exhibit B (“Channels of Distribution”). Licensee may
not, directly or indirectly, distribute Licensed Products to any channels not
specified on Exhibit B without Licensor’s prior written consent, which Licensor
may withhold at its sole discretion. Licensee may not sell the Licensed Products
to third parties who intend or are likely to resell them outside such Channels
of Distribution. If Licensee discovers that its customers are reselling Licensed
Products outside the Channels of Distribution, Licensee shall immediately cease
selling the Licensed Products to such third parties. In no event shall Licensee
sell the Licensed Products to any third party if the Licensee knows, or should
have known, that the Licensed Products will be thereafter altered, modified,
re-packaged, filled, made part of something else or used in any other
unauthorized manner by any third party inside or outside the Channels of
Distribution.

 
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1.3 Reservation of Rights; Exclusions

(a) Licensor retains all rights not expressly and exclusively granted to
Licensee under this Agreement. Licensor may use and grant licenses to others to
use the Intellectual Property inside and outside the Territory in connection
with products that are not Licensed Products in any Channels of Distribution and
with Licensed Products inside the Territory distributed outside the Channels of
Distribution.

(b) Licensee’s rights under this Agreement shall not include the right to, and
Licensee warrants and represents that it will not, use the Intellectual Property
or the Licensed Products for an endorsement of any product or service. Licensee
shall not (i) use or permit the use of any Licensed Products as a Premium except
with Licensor’s prior written consent, which Licensor may withhold at its sole
discretion, and/or (ii) distribute any Licensed Products to any third party that
Licensee has reason to believe would distribute such Licensed Products in
contravention of the foregoing. “Premium” shall mean any Licensed Products
distributed below cost or at no charge for the purpose of increasing the sale of
any other article of merchandise or product, or any service, including without
limitation, any Licensed Products distributed for publicity purposes, for
combination sales, giveaways, traffic-building or any similar scheme or device
or arrangement.

(c) If Licensor becomes aware of the inability or unwillingness of Licensee to
fill an order for the Licensed Products for Licensor or any customer, Licensor
shall have the right to seek and license other parties to fill said order(s).

Territory

2. The license granted under this Agreement extends only to the geographic area
set forth on Exhibit B (“Territory”). Licensee shall not (i) use or authorize
any use of the Intellectual Property, directly or indirectly, outside the
Territory, or (ii) sell the Licensed Products to third parties who intend or are
likely to resell them outside the Territory. If Licensee discovers that third
parties to whom it sells the Licensed Products are reselling them outside the
Territory, Licensee shall immediately cease selling the Licensed Products to
such third parties.

Term

3. This Agreement shall commence on the Effective Date and continue for three
(3) years and nine (9) months unless sooner terminated in accordance with the
terms and conditions of this Agreement (“Term”). The parties may extend the Term
only upon written agreement and for not more than two (2) renewal terms each of
three (3) years. The Term shall be divided into periods of twelve months or more
(each, a "Contract Year") as indicated below:

Contract Year 1: 04/01/2007- 12/31/2008
Contract Year 2: 01/01/2009 - 12/31/2009
Contract Year 3:  01/01/2010 - 12/31/2010

 
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Representative

4. From time to time, Licensor may designate one or more representatives
(“Representative”) upon written notice to Licensee, to act generally on behalf
of Licensor, sometimes in conjunction with Licensor and sometimes in its stead,
such as, but not limited to, receiving payments and statements and performing
the various quality control functions as set forth in this Agreement. In the
event such a Representative is designated in this Agreement, all references to
administrative duties of the Licensor in this Agreement may be construed as
referring to the Representative as appropriate to carry out the purposes of this
Agreement. Licensor will be bound by any authorized communications of its
Representative and cannot repudiate the same; provided, however, in the event of
a dispute between Licensor and Representative as to communications to Licensee,
Licensor’s communications shall control. Licensor, at its complete discretion,
may replace Representative upon written notice to Licensee, without affecting
the validity of this Agreement. Until further notice, Licensor’s Representative
for the foregoing purposes shall be: The Joester Loria Group, LLC, 860 Broadway,
Third Floor, New York, New York 10003. Unless stated otherwise in writing by
Representative and Licensor subsequently with a copy to Licensee, all statements
and payments under this Agreement shall be sent and paid to said Representative
rather than Licensor and Licensor appoints Representative to act as Licensor for
approvals and submissions under this Agreement.

Payments

5.1 Royalties. Licensee shall pay to Licensor (or its Representative) the
royalty at the rates specified in Exhibit B (“Royalties”) based upon all Net
Sales (defined below) by or on behalf of Licensee of the Licensed Products.
Royalties shall accrue when the Licensed Products are invoiced or shipped,
whichever occurs first, and shall be payable concurrently with the periodic
statements required in Section 6. The term “Net Sales” shall mean the number of
units sold multiplied by the full wholesale or distributor list price billed to
retail customers or distributors less actual trade discounts and promotions, if
any, not to exceed ten percent (10%). No other deductions shall be made for any
reason, including without limitation, cash payments, early payments,
uncollectible accounts, or costs incurred in the manufacture, distribution,
sale, exploitation or advertisement of the Licensed Products. Sales to any
affiliated or related party of Licensee shall be deemed to have been made at
Licensee’s wholesale or distributor selling price generally charged by Licensee
to third parties in the normal equivalent Channels of Distribution. Net Sales
shall include any amounts or the value of other consideration received by
Licensee in connection with the exploitation of the Licensed Products.

5.2 Advertising/Marketing. Licensee agrees to spend no less than three percent
(3%) of total annual Net Sales or total annual Minimum Net Sales Revenue,
whichever is greater, each Contract Year to advertise and promote the Licensed
Articles. Approved expenditures may include trade and consumer advertising,
direct mail to consumers, "gift with purchase" (GWP), "purchase with purchase"
(PWP) programs, off shelf merchandising vehicles, local and regional FSI's (Free
Standing Insert) and other marketing initiatives approved by Licensor, in
writing, as advertising and promotion. Any amounts not expended during any
Contract Year shall be paid to Licensor within thirty (30) days of the end of
said contract year.

 
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Notwithstanding the foregoing, Licensee may apply up to twenty five percent
(25%) of the Advertising/Marketing Commitment, capped at $100,000 in total for
each Contract Year, towards Slotting Fees for the Licensed Products. For the
purpose of this Agreement, Slotting Fees shall be defined as a fixed-per- SKU
one-time payment paid by the Licensee to a new retail account in exchange for
shelf space for Licensed Products. Licensee may not deduct in store circulars
from advertising/marketing fund. In addition to the advertising requirements
defined herein, Licensee agrees for each Contract Year to create dedicated 4
color sales materials that are of a quality consistent to other premium brands.

Licensee will create a dedicated section on their website, to be approved by
Licensor, promoting the Licensed Product.

Licensee will provide Licensor with a full marketing and product rollout plan
within 45 days of signing this Agreement. No later than thirty (30) days prior
to the beginning of each calendar year, Licensee shall develop and submit for
Licensor's written approval, a marketing plan, which includes a timeline
detailing product roll-out and distribution plans as well as advertising,
promotion and PR plans.

5.3 Advance. Licensee shall pay to Licensor (or its Representative) the amount
set forth on Exhibit B as an advance (“Advance”). The Advance is guaranteed and
nonrefundable, except as otherwise set forth in this Agreement. In addition,
Licensee shall timely pay the amounts set forth in Exhibit B as minimum royalty
guarantees (“Guaranteed Minimum Royalties”). The Advance and Guaranteed Minimum
Royalties shall be credited toward Royalties due for the Term only (including
any permitted Sell-Off Period), and such payments shall not be refunded for any
reason, except as otherwise provided in this Agreement.

5.4 First Shipment Date. Licensee shall begin commercial distribution in
reasonable quantities of a Licensed Product bearing the Intellectual Property
and which has received Licensor’s written approval no later than September 01,
2007.

Statements and Records

6.1 Statements.

(a) Within 20 days of the end of each calendar quarter during the Term,
commencing with the first full calendar quarter of the Term, Licensee shall
deliver to Licensor (or its Representative), a complete and accurate statement
of all sales activity, Net Sales and Royalties owed, for sales of Licensed
Products during the preceding calendar quarter in the format set forth in
Exhibit C, certified to be accurate by Licensee (if Licensee is a corporation,
by an officer or authorized independent accountant of Licensee). Unless
otherwise agreed by Licensor in writing, each statement must show, without
limitation, the following:

(i)  the number of units sold of each Licensed Product,

(ii)  the unit price of each Licensed Product,

 
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(iii)  the gross sales for each Licensed Product,

(iv)  the deductions taken from gross sales and the reasons therefor,

(v)  Net Sales for each Licensed Product,

(vi) a computation of Royalties due, taking into account any Guaranteed Minimum
Royalties which may be due to the extent that the Guaranteed Minimum Royalties
for the preceding calendar quarter exceed earned Royalties, and

(vii) a listing of retail purchasers and distributors of Licensed Products who
purchased directly from Licensee during the statement period.

(b) Each statement delivered pursuant to this Section shall be accompanied by a
check payable to Licensor (or its Representative).

(c) Licensee shall deliver to Licensor (or its Representative), no later than 45
days after the close of each annual period during the term of this Agreement (or
portion thereof in the event of prior termination for any reason) a statement
signed and certified either by its regular certified public accountants or by a
financial officer of Licensee relating to said entire annual period, setting
forth the same information required to be submitted by Licensee in accordance
with this Section. Such statements shall be furnished by Licensee whether or not
any of the Licensed Products have been shipped or sold during the relevant
period. Within ten (10) business days after demand by Licensor (or its
Representative), Licensee shall, at its own expense, furnish a detailed
statement by the chief financial officer of Licensee showing the number,
description, gross sales price, itemized deductions from gross sales price and
Net Sales of the Licensed Products distributed and/or sold by Licensee to the
end of the month next preceding the date of the demand.

6.2 Records. Licensee shall keep and maintain in Licensee’s principal place of
business during the Term and for at least three (3) years following the date of
the relevant statement, complete and accurate records and accounts covering all
transactions relating to this Agreement including, without limitation, invoices,
correspondence, banking, financial and all other pertinent records and accounts.
Such records and accounts shall be maintained in accordance with generally
accepted accounting procedures and principles and shall be available for
inspection and audit at any time during the Term and for three years thereafter,
during reasonable business hours for Licensor (or its Representative) (and
accountants acting on their behalf) to inspect and make extracts or copies of
such records for the purpose of ascertaining the correctness of such statements.
Licensee will not cause or permit any interference with Licensor (or its
Representative) in the performance of any such inspection and audit. In the
event any errors or discrepancies are discovered in any records, statements or
accounts or in payments resulting therefrom, they shall immediately be rectified
and the appropriate payments made by Licensee, together with interest at the
then prime rate per annum (announced by Citibank, NA or its successor)
compounded from the date the payment was originally due. If discrepancy of 3% or
more is found, Licensee shall pay, in addition to the discrepancy, the actual
cost of such inspection and audit. Should any willful and material misstatements
or discrepancies be disclosed as a result of the inspection or audit or
otherwise, then in addition to all other relief to which Licensor may be
entitled, Licensor may immediately terminate this Agreement.
 
 
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6.3 Right to Dispute Records. Receipt or acceptance by Licensor (or its
Representative) of any of the statements furnished pursuant to this Agreement,
or the receipt or deposit by Licensor (or its Representative) of any payment
tendered by or on behalf of Licensee shall be without prejudice to any rights or
remedies of Licensor and shall not prevent Licensor from thereafter disputing
the accuracy of any such statements, payments, records and accounts. Licensee
waives all claims to return of any Advance, Guaranteed Minimum Royalties or
other Royalty payments once made, except as otherwise provided in this
Agreement, and for claims for refund of payments for returns of Licensed
Products in subsequent reporting periods. As time is of the essence with respect
to all payments made under this Agreement, interest at the rate of one and
one-half percent (1 ½%) per month or three percentage points over prime
(whichever is greater but in no event more than the maximum amount permitted by
law) shall accrue on any amount due, from the date upon which the payment is due
until the date of payment.

Quality Standards and Control

7.1 Quality Control Standards

(a) If the Licensed Products manufactured and sold by Licensee are of inferior
quality in design, material or workmanship, the substantial goodwill which
Licensor has established and possesses in the Intellectual Property would be
impaired. Accordingly, Licensee will maintain high quality control standards
that are substantially equivalent to those standards approved by Licensor or
used by Licensor as of the Effective Date or thereafter in connection with its
products and/or the Licensed Products, including, but not limited to, quality
control procedures, product sampling procedures and inspection procedures,
labeling requirements and Licensed Product formulas and specifications as
applicable.

(b) Licensee shall comply with all federal, state, and local laws, rules and
regulations, if any, of governmental authorities in connection with the
production, manufacturing, distribution, sale, labeling, packaging, advertising
and promotion of the Licensed Products.

(c) Licensee is not authorized to sell Licensed Products which do not completely
meet the quality standards of approved samples nor “irregular,” “distressed” or
other than “first quality” Licensed Products. Licensee shall not otherwise use
the Intellectual Property in connection with any Licensed Products that do not
meet the quality control standards in this Agreement.

7.2. Licensed Product Formulas and Specifications. Licensee shall submit to
Licensor all proposed new formulas and specifications for the Licensed Products
and all adjustments thereto for Licensor’s approval, such approval to be
consistent with (and based on equivalent standards to) products previously
approved by, or sold by, Licensor, and subject to the Licensed Products passing
Licensor’s taste and consumer tests as required by Licensor. The actual and
reasonable costs of such tests shall be paid by Licensee. Licensee shall not
market any Licensed Products using the Intellectual Property without the prior
written approval of Licensor, which Licensor shall not unreasonably withhold or
delay. Formulas and specifications for the Licensed Products shall at all times
remain the confidential property of Licensor.
 
 
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7.3 Inspection Procedures

(a) In order to determine whether Licensee is maintaining the quality standards
set forth above, Licensee, before selling or distributing any Licensed Products,
including any modified or reformulated versions thereof, shall furnish to
Licensor (or its Representative), at Licensee’s cost, a reasonable number of
each of the Licensed Products. The quality of such new Licensed Products shall
be subject to the prior written approval of Licensor, such approval to be
consistent with (and based on equivalent standards to) products previously
approved by, or sold by, Licensor, and subject to the Licensed Products passing
Licensor’s taste and consumer tests if applicable. At the request of Licensor,
Licensee shall supply any manufacturing information requested by Licensor to
help Licensor in evaluating the quality and style of such Licensed Products.

(b) In addition, during normal business hours, Licensor (or its Representative)
shall have access to Licensee’s facilities and the facilities of Licensee’s
permitted sublicensees and/or contract manufacturers where the Licensed Products
are manufactured and/or stored, for the purpose of inspecting the Licensed
Products to the extent necessary to determine whether Licensor’s quality
standards are being met and to determine whether any health or safety issues may
exist at such plants and/or facilities.

(c) Licensee represents and warrants that the Licensed Products manufactured,
distributed and sold by Licensee, and, if applicable, its permitted contract
manufacturers, and the manufacturing and sanitation practices used by Licensee,
and, if applicable, its permitted contract manufacturers, to produce the
Licensed Products will comply with all applicable federal, state and local laws,
including, but not limited to, good manufacturing practices.

(d) Licensee shall not manufacture the Licensed Products from inherently
dangerous materials or substances and will not design the Licensed Products so
as to constitute or create any inherent danger.

(e) After samples of the Licensed Products have been approved by Licensor (or
its Representative) pursuant to this Section 7, Licensee shall not depart from
the quality and characteristics of those samples in any material respect without
Licensor’s prior written approval, and Licensor shall not withdraw its approval
of the approved Licensed Products or of any approved plant except for good cause
when Licensor may in good faith have reason to believe that the approved
Licensed Products or the manufacture of Licensed Products by the approved plant
may be detrimental to the health or safety of the public or otherwise fails to
satisfy the specifications which have been previously approved by Licensor.

 
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7.4 Plant Approval. All plants proposed to be used by Licensee shall be subject
to Licensor’s prior written approval, such approval to be consistent with
Licensor’s standards for approving plants which are used by Licensor in the
Territory. Licensee proposes the following plants initially: _________. Any and
all additional proposed plants to be used by Licensee shall be subject to
Licensor’s prior written approval, such approval to be consistent with
Licensor’s standards for approving the plants listed above.

7.5  Prior Approval.

(a) No Licensed Product shall be manufactured, distributed, sold or used by
Licensee prior to Licensor’s written approval of pre-production prototypes or
samples of each such Licensed Product, as well as proofs, manuscripts, artwork
layout or the like, of any cartons, containers, tags, labels, other packaging,
advertising, publicity and display materials to be used in connection with the
Licensed Products (the “Related Materials”). Within 15 business days after its
receipt of the foregoing, Licensor shall use reasonable efforts to advise
Licensee, in writing, of its approval or disapproval of such material, and no
items shall be deemed approved by Licensor unless such approval is given.
Further written approval will be necessary if there is any change proposed by
Licensor or Licensee in type, style, model, grade, description or the like from
any previously approved Licensed Products or Related Materials. In the event any
Licensed Products or any Related Materials differ materially from the approved
samples, Licensor shall have the right, in its sole discretion, to withdraw its
approval of such Licensed Products or Related Materials and/or to terminate this
Agreement unless Licensee cures such breach within thirty days of notice of
same. Approval by Licensor and by any other parties designated by Licensor shall
not relieve Licensee of any of its obligations or warranties under this
Agreement.

(b) All costs associated with the approval process, including all costs incurred
by Licensee, Licensor, Representative or any third party approved by Licensor,
in connection with the development, modification or formatting of artwork and
Related Materials for the Licensed Products, shall be borne by Licensee.
Licensee shall pay Licensor, or such third party, within thirty days of
receiving an invoice for such expenses. Although Licensee is not obligated to
utilize the artwork services of Licensor or an approved third party, Licensee is
encouraged to do so if Licensor offers such services in order to minimize delays
which may occur if unapproved artists do renditions of the Intellectual
Property.

(c) Concurrently with the initial shipment of Licensed Products, Licensee shall
furnish to Licensor (or its Representative) at no cost, 30 royalty-free samples
of each “SKU” of the Licensed Products and thereafter shall furnish to
Representative 25 samples of each SKU of the Licensed Products at the beginning
of each subsequent year of the Term. In addition, upon Licensor’s request,
Licensee shall provide, at no cost, a reasonable number of royalty-free samples
of the Licensed Products in each year of the Term for use by Licensor in
connection with promotions, contests or sweepstakes not to exceed 25 samples per
year. Any Licensed Products requested by Licensor in excess of the foregoing
quantity shall be billed at Licensee’s cost for the Licensed Product plus ten
percent (10%).

 
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7.6 Deficiency. Promptly upon receipt from Licensor (or its Representative) of
information or notice that any Licensed Products or Related Materials
manufactured, sold or used by Licensee do not or have not met the specifications
or standards of nature and quality prescribed by Licensor, Licensee shall
correct such deficiency at Licensee’s expense. Licensee shall thereafter
immediately submit samples of the corrected Licensed Products or Related
Materials pursuant to Section 7.3 for approval. In the event the deficiency is
that of substandard Licensed Product or that of material misuse of the
Intellectual Property, all existing inventory or work in progress of Licensed
Products and Related Materials containing the deficiency shall, at Licensee’s
expense, either be corrected to Licensor’s satisfaction or shall be destroyed.
The foregoing shall not preclude or otherwise limit in any way Licensor’s rights
under this Agreement.

Proprietary Rights

8.1 Licensor’s Title, Ownership, and Goodwill.

(a) All right, title and interest in and to the Intellectual Property (including
all associated goodwill) shall be and remain the exclusive and complete property
of Licensor, and all use of the Intellectual Property will inure to the benefit
of Licensor. Licensee shall not, during or after the Term, dispute or contest,
directly or indirectly, or do or cause to be done, any act which in any way
questions, contests, impairs or tends to impair Licensor’s right, title and
interest in and to the Intellectual Property. Licensee will at no time use or
authorize the use of any trademark, logo, trade dress, service mark, trade name,
domain name or other designation identical or confusingly similar to the
Intellectual Property. Except as otherwise provided in this Agreement for a
sell-off period, if any, upon the expiration or earlier termination of the Term,
all rights to use the Intellectual Property shall automatically revert to
Licensor, and Licensee shall immediately discontinue all use.

(b) As between Licensor, Representative, and Licensee, Licensor shall be deemed
to be the owner of all materials created for the Licensed Products under this
Agreement, including but not limited to artwork. Licensee acknowledges that such
materials created and furnished by Licensee, its employees, or contractors shall
(if applicable) be considered “works made for hire” pursuant to U.S. copyright
law and all rights in and to the copyrights (and any other intellectual property
rights) to such materials shall be owned by Licensor. If any such materials or
elements shall not be deemed a “work made for hire,” Licensee assigns to
Licensor all rights, including copyright, title and interest in and to all such
materials and elements. Licensee will, without further consideration, execute
any documents that Licensor may determine is necessary to perfect such
assignment. In the event Licensee fails or refuses to do so after a reasonable
period of time, Licensee appoints Licensor as its attorney-in-fact to execute
such documents. Notwithstanding the foregoing, Licensor acknowledges that
Licensee’s UPC Codes are solely owned by Licensee, and Licensor shall have no
right, title or interest in them.

(c) Licensee acknowledges the tremendous value and goodwill of the Intellectual
Property and therefore will not use the Intellectual Property in any manner
which may, in Licensor’s judgment, be in bad taste, be inconsistent with
Licensor’s public image or which may in any way disparage Licensor or its
reputation, including, but not limited to, types and placement of advertising
and types of Channels of Distribution, nor take any action which will harm or
jeopardize the Intellectual Property or Licensor’s ownership, protection, and/or
registration thereof, in any way.
 
 
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8.2 Intellectual Property Registration. At Licensor’s cost, Licensee will
fully cooperate with and assist Licensor in the prosecution and maintenance of
any patent, copyright, trademark, service mark or domain name applications or
registrations concerning the Intellectual Property that Licensor may desire to
file or maintain, and for that purpose, Licensee shall, upon request, supply to
Licensor enough samples of the Licensed Products or other material as may be
required in connection with any such application or registration.

8.3 No Representations of Ownership by Licensee Restrictions on Other
Marks. Licensee shall not in any manner represent that it has any ownership in
the Intellectual Property, in whole or in part, or in any other intellectual
property owned by Licensor, or its affiliates, but may only, during the Term of
this Agreement, and only if Licensee has complied with all laws and its
obligations under this Agreement, represent that it is a “Licensee” under this
Agreement. During or after the Term, Licensee shall not register or attempt to
register any patent, trademark, service mark, domain name, copyright, domain
name, or similar proprietary right in any portion of the Intellectual Property
or in any intellectual property owned by Licensor that are not licensed under
this Agreement, in its own name or that of any third party, nor shall it assist
any third party in doing so. Licensee shall not use any other trademarks or
other intellectual property similar to the Intellectual Property.

8.4 Approval. Licensee shall use the Intellectual Property only in such form
and manner as is specifically approved in writing by Licensor and, upon request
by Licensor, affix to the Licensed Products and Related Materials any legends,
markings and notices of trademark registration or Licensor-Licensee relationship
specified by Licensor, or any other notice of Licensor’s ownership, including
copyright. Licensor shall have the right to approve all advertising, displays
and other material using the Intellectual Property prepared by Licensee.
Licensee will promptly follow Licensor’s instructions and guidelines regarding
proper usage of the Intellectual Property in all respects.

8.5 Copyright and Trademark Notices

(a) Licensee shall print, stamp, mold or otherwise affix the Copyright Notice
(i.e., “© [Year of first publication] Entenmann’s Products, Inc. Used under
license.”) on all packaging for the Licensed Products and on all of the Related
Materials, all in accordance with instructions from Licensor, including without
limitation, instructions with respect to position and type size. No Licensed
Product packaging or Related Materials upon which the Copyright Notice is
printed, stamped, molded or otherwise affixed pursuant to the foregoing shall
contain any other copyright notice whatsoever without Licensor’s prior written
consent. Licensor, may, at any time and from time to time, require the addition
of a Copyright Notice, or change of the Copyright Notice, effective not less
than thirty days after receipt by Licensee of notice of such addition or change;
notwithstanding this, Licensee shall have the right to continue to distribute
any inventory already manufactured and/or Licensed Product packaging already
printed at the time it receives such notice.
 
 
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(b) Licensee shall comply with all requirements of the United States Copyright
Act, the Universal Copyright Convention, the Berne Convention and any other
treaty and convention to which the United States is or becomes a party, as
Licensor deems necessary to obtain or maintain copyright protection for the
Licensed Products and/or Related Materials in the Territory. Licensee shall
cooperate fully with Licensor in connection with Licensor’s obtaining of
copyright and trademark protection in the name of Licensor or, if Licensor shall
so direct, in the name of a copyright or trademark proprietor other than
Licensor.

(c) Licensee shall print, stamp, mold or otherwise affix the Trademark Notice
(i.e., “___________ is a registered trademark of Entenmann’s Products, Inc. Used
under license.”) in proximity to the Intellectual Property wherever used,
including without limitation on the Licensed Products and on each of the Related
Materials, all in accordance with instruction from Licensor, including without
limitation, instructions with respect to position, content and type size.
Licensor may, at any time and from time to time, require Licensee to change or
add to the Trademark Notice by giving Licensee not less than thirty days’ notice
of such change; notwithstanding this, Licensee shall have the right to continue
to distribute any inventory already manufactured and/or Licensed Product
packaging already printed at the time it receives such notice.

(d) Licensee’s name, trade name (or a trademark of Licensee which Licensee has
advised Licensor in writing that it is using) shall appear on permanently
affixed labeling on each Licensed Product and, if the Licensed Product is sold
to the public in packaging or a container, printed on such packaging or
container so that the public can identify the supplier of the Licensed Product
in a manner acceptable to Licensor. On soft goods, “permanently affixed” shall
mean sewn onto the goods; on hard goods, it means molded into the product; and
on packaging, printed on the package. Licensee shall advise Licensor in writing
of all trade names or trademarks it is using on Licensed Products being sold
under this license if such names or marks differ from Licensee’s corporate name.

(e) Licensee shall affix to the Licensed Products and/or Related Materials any
other legends, markings and notices required by any law or regulation in the
Territory or which Licensor reasonably may request.

8.6 Protection and Defense.

(a) In its discretion and at its sole cost and expense, Licensor will protect
and defend the Intellectual Property. Licensee shall promptly advise Licensor in
writing of any claims that its use of the Intellectual Property infringes the
rights of a third party and any potentially infringing uses by others involving
the Intellectual Property. Decisions involving the protection and defense of the
Intellectual Property shall be solely in the discretion of Licensor; Licensee
shall take no actions in this regard without the express written permission of
Licensor.

(b) Licensee will join with Licensor in any application to enter Licensee as a
registered or permitted user, or the like, of the Intellectual Property with any
appropriate governmental agency or entity. Upon termination or expiration of
this Agreement for any reason whatsoever, Licensor may immediately apply to
cancel Licensee’s status as a registered or permitted user and Licensee shall
consent in writing to the cancellation and shall join in any cancellation
request. The expense of any of the foregoing recording registered or permitted
user activities shall be borne by Licensor.
 
 
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8.7 Changes to Intellectual Property. Licensor shall have the right at any time,
upon notice, to make additions to, deletions from, and other changes in the
Intellectual Property at its sole and complete discretion, and Licensee shall
adopt and use any and all such additions, deletions and changes as soon as
practicable (i.e., after depletion of raw or finished inventory at time notice
was received by Licensee) in all new production of the Licensed Products and
Related Materials.

9.1 Third-Party Manufacturing.

(a) Licensee shall have the right to subcontract for the manufacture and
production of the Licensed Products or Related Materials with Licensor’s prior
written consent (not to be unreasonably withheld or delayed) and such
subcontractor shall execute a subcontractor agreement. In addition, Licensee
shall ensure that any subcontractor shall:

(i)  be fully subject to, and bound by, every applicable provision of this
Agreement;

(ii) be made aware and agree that it may not sell any Licensed Products
manufactured by it to anyone but Licensee;

(iii) agree that any related designs, labels, packaging or other materials
incorporating or associated with the Intellectual Property shall become the sole
property of Licensor and that Licensee shall be responsible for obtaining any
relevant supporting legal documentation; and

(iv) agree to immediately cease all manufacture of Licensed Products upon notice
of termination or expiration of this Agreement.

(b) In addition, (v) a breach by a subcontractor of any provision of this
Agreement shall be considered a breach by Licensee; (vi) Licensee shall remain
primarily and completely obligated under all of the provisions of this
Agreement; (vii) Licensee shall promptly furnish to Licensor a list of all such
subcontractors and shall update this list once annually on or before the 31 st
day of January; and (viii) Licensee shall immediately notify any subcontractor
in writing upon termination or expiration of this Agreement, with a copy sent to
Licensor. In no event shall any subcontractor agreement include the right to
grant any sublicenses. Licensee shall ensure that each subcontractor agreement
provides that Licensor is a third party beneficiary of the agreement with an
independent right to enforce its terms relating to quality control and
protection of Intellectual Property and shall provide to Licensor (or its
Representative) copies of all subcontractor agreements within 15 days of
execution.

 
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9.2 Licensee’s Best Efforts

(a) Licensee shall in accordance with the annual Marketing Plan (defined below),
use its persistent commercially reasonable efforts to continuously design,
manufacture, promote, sell and ship all of the Licensed Products that have
received Licensor’s written approval in all of the Territory in commercially
reasonable quantities and shall continuously and diligently during the Term use
commercially reasonable efforts to produce an inventory of Licensed Products and
procure and maintain facilities and trained personnel sufficient and adequate to
accomplish the foregoing. Once sales have commenced, in no event shall Licensee
allow a period of more than ninety days to elapse during which it does not
manufacture, sell or distribute the Licensed Products in commercially reasonable
quantities sufficient to meet changing customer demand.

(b) In addition to any other remedies available to Licensor, failure to comply
with any of the foregoing in Section 9.2 may result in removal from this License
of one or more of the unused or unexploited Licensed Products and/or brands,
Licensed Products or Territories, upon written notice from Licensor; provided,
however, before exercising such right of removal, Licensor will give Licensee 90
days advance written notice and Licensee shall have said ninety days in which to
commence using commercially reasonable efforts to exploit the respective brands,
Licensed Products and/or Territories in order to prevent any removal from this
License.

9.3 Compliance with Laws

(a) The Licensed Products shall be manufactured, distributed, promoted,
advertised and sold in accordance, and Licensee shall comply with all applicable
international, national, federal, state, provincial and local laws, treaties and
governmental orders and regulations, including, without limiting the generality
of the foregoing, the Federal Food, Drug and Cosmetic Act, the Federal Hazardous
Substance Act, the Flammable Fabrics Act, the Consumers Products Safety Act, and
the ASTM Standard Consumer Safety Specifications on Toy Safety (Toy
Manufacturers of America Voluntary Toy Safety Standard) or other acts and
standards laws, regulations, ordinances, governmental standards and the like in
any countries in which the Licensed Products are manufactured, shipped, stored,
and/or sold (collectively, “Local Manufacturing Laws and Standards”).

(b) In order to ensure that the Licensed Products meet the above standards,
Licensee shall, where appropriate or upon request, prior to the date of first
distribution of the Licensed Products, submit to Representative certificates in
writing that the Licensed Products conform to the applicable laws and standards.
Upon request by Representative, Licensee shall provide specific test data and
laboratory reports.

(c) Where applicable, tests on Licensed Products must be performed by a national
testing laboratory or an independent laboratory that is nationally approved
unless another laboratory is otherwise approved by Licensor. Such testing
laboratory or independent laboratory will provide written test reports
indicating that the Licensed Products conform to the applicable laws and
standards.

 
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(d) Licensee shall use its best efforts to ensure that any and all third party
manufacturers of the Licensed Products or any component thereof comply with the
applicable Local Manufacturing Laws and Standards. The Local Manufacturing Laws
and Standards include, but are not limited to, laws concerning import, export,
certificate licenses, quota allocations, country of origin, safety (including
fire code rules), employment standards, wages and benefits, and employee health
and safety. All manufacturers of the Licensed Products shall comply with Local
Manufacturing Laws and Standards concerning working hours and compensation. In
countries where there are no such existing Local Manufacturing Laws and
Standards, a manufacturer's suitability under this Agreement should be evaluated
carefully, taking into account regional and United States standards.

(e) The employment or use by Licensee, or by any third-party manufacturer
engaged by Licensee, of children for the manufacture, assembly, or conversion of
the Licensed Products, or any component thereof, either directly or indirectly,
shall not be permitted.

(f) No manufacturer of the Licensed Products will use forced or prison labor.
Manufacturers must maintain a strict policy of employment on a voluntary basis.

9.4 Consumer Response

(a) Licensee shall immediately notify Licensor in writing of any investigation,
inquiry, claim or sanction by any governmental authority regarding any quality,
labeling, advertising or other regulatory matter relating to the Licensed
Products and shall keep Licensor fully advised of the progress and findings of
such investigation or inquiry.

(b) If Licensor reasonably determines that any particular Licensed Product does
not meet the required standards of quality set forth in Section 7, Licensor
shall notify Licensee in writing of such defect (a “Deficiency Notice”),
providing Licensee with reasonable detail regarding the deficiency. Upon receipt
of such Deficiency Notice, Licensee shall cure such deficiency within thirty
days, and shall provide Licensor with evidence of such cure, including samples
of such Licensed Product; provided, however, that in the event that any
deficiency poses a risk to public health or safety, Licensee shall take all
steps necessary to cure the deficiency or otherwise eliminate the risk to public
health or safety immediately. If any deficiency is not cured within the
applicable time period, Licensee shall cease all use of the Intellectual
Property in connection with the production, manufacture, distribution, sale,
advertising and promotion of the Licensed Products in issue.

(c) If Licensor reasonably determines that any deficiency is such that any such
Licensed Products are subject, or may be subject, to market withdrawal,
quarantine, recall or correction based on applicable Food and Drug
Administration or other applicable governmental authority guidelines, including
good manufacturing practices, Licensee shall immediately implement such
withdrawal, recall or correction procedures at Licensee’s sole cost and expense
and shall coordinate and cooperate with Licensor, including with respect to all
press releases and other public relations aspects thereof. If Licensee is
otherwise required or determines to withdraw from market, recall or correct any
such Licensed Products, Licensee shall give Licensor prior notice of such
withdrawal, recall or correction as soon as practicable and the parties shall
coordinate and cooperate with each other, including with respect to all press
releases and other public relations aspects thereof. Licensor shall be granted
complete and immediate access to all sites at which such deficient Licensed
Product has been produced or stored.
 
 
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9.5  Confidentiality.

(a) During and after the Term, the parties shall keep confidential any
confidential proprietary information, knowledge or trade secrets
(“Information”), such as but not limited to, the terms of this Agreement,
marketing and advertising plans, licensing plans, market research data, flavors
and flavor components and other information regarding any Food Elements,
disclosed by the other party under this Agreement during the course of their
mutual relationship. (Notwithstanding the foregoing, the parties may disclose
Information to their attorneys, accountants and permitted successors and
assigns.) The parties shall not use the Information for any purpose except in
furtherance of this Agreement. If either party is uncertain about the status of
a particular piece of Information, it shall consult with the other party to
determine such status. The obligations of this Section shall not be binding on
either party with respect to Information that (i) is already in the possession
of the receiving party at the time of disclosure, (ii) is or becomes known to
the public generally through no fault or other action of the receiving party,
(iii) is obtained lawfully from a third party, directly or indirectly, without
breach of an obligation to keep such Information confidential, (iv) is developed
by the employees, agents or representatives of the receiving party wholly
independently, as a result of its own efforts and without the knowledge or
benefit of the Information received under this Agreement, or (v) is required to
be disclosed by law or any court or other judicial entity empowered by law to
compel such disclosure (subject to the notice obligations below).
 
(b) This confidentiality obligation shall cease when and to the extent that the
Information becomes generally known to the public other than through the fault
or other act or omission of the receiving party. In the event a party is
required by law or court order to disclose any Information of the other party,
that party shall (i) notify the other party in writing as soon as possible, but
in no event less than ten calendar days prior to such disclosure, (ii) cooperate
with the other party to preserve the confidentiality of such Information
consistent with applicable law, and (iii) use its best efforts to limit any such
disclosure to the minimum disclosure necessary to comply with such law or court
order.

9.6 Public Statements. Subject to Section 9.5, Licensee shall not make any
statements to the press or any media service or distribute or circulate any
written release, promotional literature, news story, advertising, publicity or
communications of any kind to any party regarding the subject matter of this
Agreement, the Licensor, their respective affiliates, employees, programming
services, operation, businesses and/or activities, or the Representative without
Licensor’s prior written approval.

9.7 Insurance. Licensee shall obtain and keep in force, at its own
expense, Comprehensive General Liability insurance, including Products Liability
coverage, with respect to the Licensed Products, with a thirty day written
notice of cancellation provision to Licensor and Representative, from a
recognized and responsible insurance company authorized to conduct an insurance
business in New York with an A.M. Best Company rating of no less than A-10. Such
insurance company shall name Licensor and Representative and each of their
respective officers, directors, agents and employees as additional insureds, and
provide protection in the amount of coverage not less than ten million dollars
$10,000,000 per occurrence. Licensee shall, within ten days after the Effective
Date and before any Licensed Product is distributed or sold under this
Agreement, submit to Licensor and Representative a copy of such insurance policy
or a copy of a fully paid certificate of insurance therefor. Maintenance of such
insurance and performance of Licensee of its obligations under this Agreement
shall not relieve Licensee of liability under any of its indemnity under this
Agreement. Licensee shall maintain such product liability insurance for a period
coextensive with that for which indemnification might be required under the
provisions of this Agreement and in no event less than five years beyond
termination of this Agreement. Any subcontract manufacturer of Licensed Products
for Licensee under this Agreement shall also be required by Licensee to obtain
and maintain and keep in force, at its own expense, the same insurance coverage
with same named insureds and limits as provided with respect to Licensee in this
paragraph.

 
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9.8 Consumer Inquiries. Licensee shall, at no cost to Licensor, promptly and
courteously handle all warranty (guarantee) satisfaction, response and
compliance and all consumer response relating to any of the Licensed Products.
Licensor shall promptly forward to Licensee, for handling, any and all such
consumer inquiries that it receives. Licensee shall use commercially reasonable
efforts to keep Licensor generally informed of consumer complaints relating to
the Licensed Products and their resolution.

Warranties and Indemnification

10.1  Licensee Warranties.  Licensee represents and warrants as follows:

(a)  Licensee is free to enter into and fully perform this Agreement;

(b)  All ideas, creations, works, designs, materials and intellectual property
furnished by Licensee in connection with each of the Licensed Products and
Related Materials will be Licensee’s own and original creation (except for
matters in the public domain or material which Licensee is fully licensed to use
for such purposes);

(c) The Licensed Products and the manufacture, advertisement, distribution and
sale thereof under this Agreement will not infringe upon or violate any rights
of any third party of any nature whatsoever, including third party patent
rights;

(d) The Licensed Products and Related Materials will be of high standards in
style, appearance and quality, will be safe for use by consumers, and will
comply with all applicable governmental rules, guidelines, safety codes and
regulations;

(e) Licensee will not manufacture, advertise, distribute or sell and will not
authorize the manufacture, advertising, distribution or sale of the Licensed
Products or Related Materials in any manner, at any time or in any place not
specifically licensed under this Agreement.

 
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(f) The Licensed Products and Related Materials (i) shall be in all respects
noninjurious, (ii) shall not be adulterated or misbranded within the meaning of
any applicable laws, rules or regulations of any governmental authority, and
(iii) shall not purposely be packaged or sold in damaged containers.

10.2  Licensee Indemnification.

(a) Licensee shall indemnify, defend and hold harmless Licensor (and its parent,
subsidiaries, legal representatives, associated and affiliated companies,
including each of their respective officers, directors, shareholders, agents and
employees) and Representative (and its parent, subsidiaries, associated and
affiliated companies, including each of their respective officers, directors,
shareholders, agents and employees) from and against all damages, costs,
reasonable attorney’s fees and expenses based upon or arising out of:

(i)  breach of any warranty or representation by Licensee,
 
(ii)  unauthorized use of the Intellectual Property,

(iii) any actual or alleged defect in the Licensed Products or their packaging,
whether latent or patent, including failure of said Licensed Products or their
packaging, distribution promotion, sale or exploitation to meet any Federal,
State or local laws or standards,

(iv) any other actual or alleged unauthorized action of Licensee, including
without limitation, a breach of any term of this Agreement, or
 
(v)  violations of any Local Manufacturing Laws and Standards.

(b)  Licensor and/or Representative shall provide prompt written notice of any
claim and cooperate fully with Licensee. With respect to such claims, Licensor
and/or Representative may, at their election, individually or collectively,
defend any action, by their own counsel and at Licensee’s expense. Licensee will
cause its counsel to cooperate fully in the defense of such action. Licensee
shall not admit any liability or compromise any suit without Licensor’s prior
written consent, which Licensor may withhold at its sole discretion. The
obligation for indemnification shall survive termination of the Agreement.

10.3. Licensor Warranties. Licensor warrants and represents that it is free to
enter into and fully perform the duties and obligations of this Agreement, and
that to the best of its knowledge, the use of the Intellectual Property, as
authorized under this Agreement, does not infringe the rights of any third
party.

10.4 Licensor Indemnification. Licensor shall indemnify, defend and hold
harmless Licensee (and its parent, subsidiary, associated and affiliated
companies, including each of their respective officers, directors, agents and
employees) from and against all damages, costs, reasonable attorney’s fees and
expenses based upon or arising out of breach of the warranties and
representations in Section 10.3 including those solely and strictly related to
the Intellectual Property as properly used by Licensee in compliance with this
Agreement; provided, however, that (i) prompt written notice is given to
Licensor of such claim or suit, (ii) Licensor shall have the option to undertake
and conduct the defense and/or settlement of any such claim or suit, (iii)
Licensee shall cooperate with Licensor in the defense of any such claim or suit,
(iv) Licensee acts to mitigate any damages, and (v) no settlement of any claim
or suit may be made without Licensee’s prior written consent. If Licensor
undertakes the defense of a claim brought against Licensee, Licensor shall not
be responsible for attorney’s fees, costs and expenses incurred by Licensee
after Licensor undertakes the defense of the claim. The obligation for
indemnification shall survive termination of the Agreement.

 
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Termination and Expiration

11.1  Termination for Default by Licensee.

(a) Upon the occurrence of any of the following events (each of which is a
“Default”), then in addition and without prejudice to any rights that it may
have at law, in equity or otherwise, Licensor shall have the right to terminate
this Agreement, to delete from this Agreement any elements of the Intellectual
Property or any Licensed Products, and/or to require the immediate payment of
any Guaranteed Minimum Royalties and Royalty due or to become due under this
Agreement if:

(i) Licensee materially defaults in the performance of any of its obligations,
representations or warranties provided for in this Agreement;

(ii) Licensee fails to take the necessary steps to ensure that the Licensed
Articles are of high quality and are only distributed through the Channels of
Distribution and only sold in the Territory;

(iii) any court, arbitration panel, government agency or similar body finds that
the Licensed Products manufactured, sold or distributed by Licensee are
defective, injurious, or unsafe in any way, manner or form;

(iv) a voluntary petition in bankruptcy is filed by Licensee and is not
dismissed within thirty days thereafter, a receiver or trustee of any of
Licensee’s property is appointed and such appointment is not vacated within
forty-five days thereafter, Licensee takes advantage of any insolvency law,
Licensee makes an assignment for the benefit of its creditors, or an event of
default (declared and not cured) occurs under any effective security agreement,
financing statement, equivalent security or lien instrument, or continuation
statement entered into by Licensee and a third party (a “Secured Party”)
covering all or part of the Licensed Products or any inventory thereof that
enables such Secured Party to exercise any of its rights and remedies under this
Agreement with respect to such Licensed Products. In such event, Licensor
appoints Licensee as its bailee for the purposes of this Agreement, including
the collection of Royalties under this Agreement. Licensee accepts such
appointment. Licensor’s Intellectual Property shall be owned by and shall be the
exclusive property of Licensor, and no proceeding of the type set forth in this
subparagraph shall in any way affect Licensor’s right to the same in accordance
with this Agreement;

 
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(v) a subcontractor engages in conduct which, if engaged in by Licensee, would
entitle Licensor to terminate this Agreement. If reasonably feasible, however,
Licensor will endeavor to discuss with Licensee what action Licensee must take
or cause to be taken to remedy any damages to Licensor resulting from such
subcontractor’s conduct. The nature and extent of the action to be taken shall
be at Licensor’s sole and absolute discretion, except that this Agreement may
not be terminated by Licensor unless Licensee has failed to secure the
correction of the Default by the subcontractor or obtain assurances to
Licensor’s satisfaction that appropriate corrective measures are being taken by
the subcontractor within thirty days after written notice by Licensor;

(vi) Licensee fails to make any required payment or furnish any required
statement, and such failure continues for five business days after written
notice of such failure is sent; or

(vii) any assignment, transfer or material change in Licensee in contravention
of this Agreement.

(b) Notwithstanding anything to the contrary set forth in this Agreement,
Licensee shall maintain Minimum Net Sales Revenue (if applicable) of Licensed
Products in each annual period as set forth in Exhibit B. If Licensee fails to
maintain the required Minimum Net Sales Revenue as provided in Exhibit B,
Licensor shall have the right to terminate this Agreement by written notice
delivered to Licensee within 30 days after the end of any annual period in which
Licensee shall fail to maintain such required Minimum Net Sales Revenue.
Notwithstanding the provisions of the foregoing paragraph, the Licensee may have
a one-time option to avoid Licensor’s right to terminate the license granted
under this Agreement by paying to Licensor, within said 30 day period after
notice from Licensor, the difference between the aggregate royalty paid by
Licensee during said year and the royalty that would have been paid to the
Licensor during said year if Licensee maintained the required Minimum Net Sales
Revenue as provided on Exhibit B during said year.

11.2 Notice of Termination and Right of Correction. In the event any of the
foregoing Defaults occurs, Licensor may give notice of termination. Subject to
the provisions of Section.
 
11.3 and excepting a default in any payment due under this Agreement or any
default related to sanction and/or Product quality that must be corrected within
five (5) days of receipt of the notice and in the case of payment default can
only be corrected by payment, Licensee shall have thirty days after the receipt
of notice in which to correct the situation giving rise to the notice, or to
assure to Licensor’s satisfaction that appropriate corrective measures are being
taken. Failing such correction or assurance, this Agreement shall terminate.
Nothing contained in provision Section 7 above shall preclude or limit
Licensor’s rights under this Agreement.

11.3 Exceptions to Right of Correction. Notwithstanding the provisions of
Section 11.2, Licensee shall have no right of correction in the event: (i) of
willful and material misstatements or discrepancies in Licensee’s required
records; (b) required statements or payments are late by more than thirty days
three or more times in any year during the Term; (c) of the occurrence of the
same Default, other than concerning required statements or payments, more than
twice during the Term, or during any renewal period; or (d) of termination under
Sections 11.1(c) or (f).

 
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11.4  Post-Termination/Expiration Obligations

(a) Delivery of Final Statement. Licensee shall within thirty days after any
termination or the expiration of this Agreement, deliver to Licensor a final
statement certifying the number and description of Licensed Products on hand or
in process of manufacture and make all payments due Licensor. Licensor shall
also have the right to conduct a physical inventory in order to ascertain such
inventory or verify such statement. There shall be no right of disposal of
Licensed Products in the event of termination.

(b) Payment. If this Agreement is terminated by Licensor for Default by
Licensee, any and all payments then or later due from Licensee, including all
prospective Guaranteed Minimum Royalties due for the full Term during which the
termination takes place, but not including any CMF payments relating to years or
parts of years after termination, shall then be accelerated and immediately due
and payable to Licensor, less any Royalties or Advances already paid, and no
portion of any prior payments shall be repayable to Licensee. Notwithstanding
the foregoing, upon termination of this Agreement for failure to meet Minimum
Net Sales Revenue, Licensee shall only be required to pay Guaranteed Minimum
Royalties due within the twelve month period following the date of the
termination.

(c) Delivery of Intellectual Property Materials. Upon any termination or the
expiration of this Agreement, all labels, signs, packages, wrappers, cartons,
circulars, advertisements and other items bearing or containing any reproduction
or representation of any of the Intellectual Property shall automatically and
without cost to Licensor become the property of Licensor, and Licensee shall
immediately deliver the same to Licensor’s place of business or any other
location designated by Licensor. The reasonable cost of such delivery shall be
paid by Licensor. Such inventory shall, at Licensor’s option, be destroyed by
Licensee (in which event a certificate of destruction, certified by an officer
of Licensee, shall be delivered to Licensor), or purchased by Licensor at
Licensee’s cost of manufacture. Disposition of any plates, molds, forms,
lithographs and other material relating thereto then remaining on hand shall be
subject to written instructions from Licensor to Licensee either to destroy or
to deliver same to Licensor or its designee. In the event that Licensor requests
Licensee to destroy the Licensed Intellectual Property or Related Materials,
Licensor may require Licensee to deliver to Licensor an affidavit by an officer
of Licensee, attesting to such destruction in such form as Licensor may in its
sole discretion require. Notwithstanding anything to the contrary set forth
above, all such packaging materials bearing information identifying Licensee as
the manufacturer, supplier or distributor of the Licensed Products, including
without limitation UPC numbers or bar codes of Licensee, shall be destroyed by
Licensee and shall not become the property of Licensor, provided that Licensee
shall in such event deliver to Licensor an affidavit by an officer of Licensee
attesting to such destruction in such form as Licensor may in its sole
discretion require.

(d) Infringement Prohibited. Upon any termination or the expiration of this
Agreement, Licensee shall not directly or indirectly (and shall not assist a
third party to) manufacture, advertise, distribute or sell the Licensed Products
containing or including the Intellectual Property or any product that infringes
upon Licensor’ proprietary rights, or use any name, logo or design that is
confusingly similar to Licensor’s trademarks on any product in any place
whatsoever. Licensee acknowledges that (i) any unauthorized use of the
Intellectual Property shall be deemed an infringement, and (ii) such
unauthorized use would cause irreparable harm for which monetary damages are
insufficient and therefore Licensor shall be entitled to injunctive relief.

 
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(e) Delivery of Customer and Contractor Lists. Upon any termination or the
expiration of this Agreement, Licensee shall promptly deliver to Licensor a copy
of the most recent lists of all accounts to which it sells Licensed Products and
a list of all subcontractors or manufacturers of Licensee.

(f) Disposal Rights upon Expiration. Upon expiration of this Agreement, provided
that Licensee is not in default or has cured such default in accordance with the
terms of the Agreement, Licensee may continue to use up and sell any Licensed
Products previously manufactured and approved by Licensor under Section 7, and
on hand or in process of production on a nonexclusive basis for ninety days (the
“Sell-Off Period”) after expiration in accordance with all of the terms and
conditions contained in this Agreement, provided that Licensee does not
manufacture any Licensed Products during the Sell-Off Period except that
Licensee may be permitted to manufacture the Licensed Products required to
fulfill existing orders within the Sell-Off Period. It is understood that
Royalties are owed for Licensed Products sold during the Sell-Off Period, and a
final report and payment is due thirty days after the close of such period. Any
Royalties earned during the Sell-Off Period may not be applied to any Guaranteed
Minimum Royalties, such amount being due at the time of termination or
expiration. After the Sell-Off Period has expired, all remaining inventory
shall, at Licensor’s option, be destroyed by Licensee or purchased by Licensor
at Licensee’s cost of manufacture. Disposition of any plates, molds, forms,
lithographs and other material relating thereto then remaining on hand shall be
subject to written instructions from Licensor to Licensee either to destroy or
to deliver same to Licensor or its designee. In the event that Licensor requests
Licensee to destroy the Licensed Products or Related Materials relating to them,
Licensor may require Licensee to deliver to Licensor an affidavit by an officer
of Licensee, attesting to such destruction in such form as Licensor may in its
sole discretion require. Notwithstanding the foregoing, the Sell-Off Period
shall not apply in the event of termination of this Agreement by Licensor under
Sections 11.1 (c) or (f). Any right of disposal by Licensee shall not prohibit
Licensor from granting rights to others to use the Intellectual Property on
Licensed Products during the Sell-Off Period, provided that distribution of such
Licensed Products does not take effect until after the Sell-Off Period has
ended.
 
(g) Nothing in this Section shall be construed to limit Licensor’s rights or
remedies.

11.5 Termination Due To Cessation of Sales of Licensor’s Primary Product(s). If
Licensor discontinues the sale in the Territory during the Term one or more of
its own primary branded products and/or key products using any Food Elements, it
may at its option also terminate this Agreement or that portion of it that
relates to the terminated branded product of Licensor or the Food Element. If it
does so, Licensee may continue to complete manufacturing in process and deplete
existing inventory of Licensed Products in accordance with average quantities
sold during the Term. In either event, (i) the parties shall come to a mutually
acceptable resolution regarding a reasonable date for the prompt cessation of
Licensee’s sales of those Licensed Products displaying the relevant brand(s) (or
any flavor or other variation thereof) within the relevant Territory, (ii) to
the extent affected, Licensee shall be entitled to the proportional waiver of
Licensee’s obligation to pay any future guarantees, to meet any relevant
shipment guarantees or any other obligations for the period after date of
cessation; and (iii) to the extent affected, Licensee shall be entitled to the
refund of any unearned Advance or Guaranteed Minimum Royalties. Licensee shall
have no other recourse against Licensor in this event.

 
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Assignment

12. The license and all rights and obligations granted by this Agreement are
personal to Licensee and may not be sublicensed, assigned, transferred,
delegated, pledged, mortgaged or otherwise encumbered by Licensee in whole or in
part without Licensor’s prior written consent, which may be withheld at
Licensor’s sole discretion. Any transfer in violation of this provision shall be
without force and effect. In addition, Licensor shall have the right to
terminate this Agreement if there is any material change in the ownership or
controlling interest of Licensee, its parent or subsidiaries. “Material change”
with respect to “ownership or controlling interest” shall mean a sale or other
transfer of more than ten percent (10%) of the stock or assets of Licensee to
any third party other than a current disclosed shareholder of Licensee or a
subsidiary or affiliate of Licensee, unless such sale or transfer is approved in
writing by Licensor in its sole discretion. With notice to Licensee but without
consent of Licensee, Licensor may freely assign or delegate any or all of its
rights and/or obligations under this Agreement. If assigned as permitted under
this Agreement, this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns.

Noncompetition

13. During and for two (2) years after the Term, Licensee shall not enter into
an agreement or otherwise produce and/or distribute products under any other
brands (with the exception of Licensed Product co-branded with retail stores)
that are competitive with Licensor’s brands set forth in Exhibit D which is
attached hereto and incorporated by reference herein. Breach of this provision
by Licensee will give Licensor the right to immediately terminate this Agreement
upon written notice to Licensee.

Notices

14. All notices and other communications which either party is required or may
desire to give to the other, except for payments and statements which shall be
sent to the party designated by Licensor (i.e. Representative), shall be given
by addressing the same to the other with a copy to Representative at the address
set forth in this paragraph, or at such other address as may be designated in
writing by any party in a notice to the other given in the manner prescribed in
this paragraph. All such notices shall be deemed given when sent so addressed by
certified or registered mail, postage prepaid or by hand delivery, with proof of
receipt, or by a reputable express delivery company which requires proof of
receipt, such as, but not limited to, Federal Express, UPS, DHL, USPS or
Airborne. The addresses to which the foregoing shall be given are the following:

 
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If to Licensor If to Licensee:    
Entenmann’s Products, Inc.
c/o Weston Foods, Inc.
255 Business Center Drive
Horsham, Pennsylvania  19044  
Attention:   General Counsel
COFFEE HOLDING COMPANY, INC.
4401 1st Avenue
Brooklyn, NY 11232
Attention: Mr. Andrew Gordon
    with a copy to:

The Joester Loria Group, LLC
860 Broadway, Third Floor,
New York, New York  10003
Attention: President
 

 
Miscellaneous

15.1 Remedy For Breach. A breach by Licensee (other than payment obligations)
of any of the covenants, agreements or undertakings under this Agreement will
cause Licensor irreparable injury that cannot be readily remedied in damages or
solely by termination of this Agreement. Licensor, in addition to all other
legal and equitable remedies including costs and reasonable attorneys’ fees,
shall have the right of injunction for any breach of this Agreement by Licensee.

15.2 Relationship Between Licensor and Licensee. Nothing in this Agreement
shall create, be deemed to create or be construed as creating any partnership,
employer-employee, franchise, joint venture, or agency relationship between the
parties or shall be deemed to render Licensor (or its Representative)s liable
for any of the debts or obligations of Licensee. Licensee shall in no way be
considered an agent or representative of Licensor in any dealings which Licensee
may have with any third party and neither of the parties nor any of their
employees or agents shall have the power or authority to bind or obligate the
other party.

15.3 Survival of Provisions. The expiration or termination of this Agreement
shall not affect those provisions, and the rights and obligations in them, set
forth in this Agreement which either (i) by their terms state, or evidence the
intent of the parties, that the provisions survive the expiration or termination
of the Agreement, or (b) must survive to give effect to the provisions of this
Agreement.

15.4 Effectiveness and Entirety of Agreement; Amendment. The submission of
this form of license agreement for examination and/or execution does not
constitute an option and shall vest no right in either party. No rights of any
kind to use the Intellectual Property shall vest in Licensee, and Licensor shall
have no obligations to Licensee under this Agreement, unless and until (i) this
Agreement has been executed by an authorized signatory of each party and (ii)
the Advance payment has been paid in full. Licensee acknowledges that drafts of
this Agreement and any oral negotiations preceding its execution are merely a
proposal by Licensee to acquire a license, which Licensor is not obligated to
consider or accept until the foregoing conditions are met. Once properly
executed by authorized signatories of each party, this Agreement constitutes and
contains the entire agreement of the parties relating to the subject matter of
this Agreement, and no oral or written statements, representations, documents,
promises or any other prior materials not embodied in it shall be of any force
or effect. This Agreement cannot be amended, altered or modified except by a
written instrument executed by both parties. Once so executed, such amendments
shall become an integral part of this Agreement, subject to all its terms and
conditions and shall have full force and effect.

 
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15.5 No Waiver. The failure or delay of Licensor to exercise its rights under
this Agreement or to complain of any act, omission or default on the part of
Licensee, no matter how long the same may continue, or to insist upon a strict
performance of any of the terms or provisions herein, shall not be deemed or
construed to be a waiver by Licensor of its rights under this Agreement or a
waiver of any subsequent breach or default of the terms or provisions of this
Agreement.

15.6 Invalidity. If this Agreement is subject to the approval of any government
or government agency or similar entity, and such approval is not obtained, or is
obtained but later revoked, it is understood and agreed to by the parties that
this Agreement is immediately rendered null and void and terminated (except with
respect to any valid outstanding payment obligations and all obligations of
confidentiality), with neither party liable for any resultant damages, costs or
expenses of the other. But for the foregoing, if any term, covenant, condition
or provision of this Agreement or the application thereof to any person, entity
or circumstance, shall to any extent be held to be invalid, illegal or
unenforceable in any respect, the remainder of this Agreement, or application of
such term or provision to a person, entity or circumstance other than to those
as to which it is held invalid, illegal or unenforceable, shall not be affected
thereby, and each term, covenant, condition or provision of this Agreement shall
be valid and shall be enforced to the fullest extent provided by law. In such
case, the partied will immediately negotiate in good faith provision(s) with
comparable terms and obligations to that stricken but that corrects the defect
that led to the holding of invalidity, illegality or unenforceability.

15.7 Construction. This Agreement shall be governed by and construed in
accordance with the federal trademark statute and the laws of the State of New
York of the United States of America without regard to its conflicts of laws
principles; and the Courts of the State of New York and/or the federal courts in
New York shall have sole and exclusive jurisdiction over all disputes arising
out of this Agreement.

15.8 Headings. The headings as to contents of particular provisions in this
Agreement are inserted only for convenience and are in no way to be construed as
part of this Agreement or as a modification of the scope of any terms or
provisions of this Agreement.

15.9 Force Majeure. In the event of a force majeure event (i.e., act of God,
war, natural disaster, strike or boycott) that prevents or hinders performance
under this Agreement, no default or liability for noncompliance occasioned by
such event during the continuance thereof shall exist or arise; provided that,
the prevented or hindered party resumes full performance under this Agreement
promptly upon the cessation of the force majeure event; and provided further,
that the other party shall have the right to terminate the Agreement with no
further obligation if the force majeure event continues for a period in excess
of two months.
 
 
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15.10 Miscellaneous. This Agreement is the result of negotiation, and all
parties had opportunity to involve legal counsel. Therefore, there is no
presumption against the drafter with respect to interpretation of any of the
provisions. If this Agreement is executed by more than one person as Licensee,
any liability on the part of such persons shall be joint and several.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
 

ENTENMANN’S PRODUCTS, INC.     COFFEE HOLDING COMPANY, INC.       By: /s/   By:
/s/ Andrew Gordon        Name:   Name:Andrew Gordon       Title:   Title:
President & Chief Executive Officer         Date:   Date:

 
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EXHIBIT A

Intellectual Property

ENTENMANN'S

 
 

 

 
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EXHIBIT B

Terms

Licensed Products:

ENTENMANN’S® brand ground and whole bean coffee. Estimated retail price $1.99 to
$3.99 (per 11.5 to 12 oz.).

Territory: United States of America, its territories and possessions including
United States Military Exchanges worldwide

Channels of Distribution:

Supermarkets
Grocery Stores
Membership clubs
Specialty stores
Vending machines

Royalties:  5% of Net Sales

Notwithstanding the foregoing, 20% of gross sales of all Licensed Products
bearing the Intellectual Property that have not been approved pursuant to the
Agreement; of gross sales outside the Territory without Licensor’s prior
approval and of gross sales outside the Channels of Distribution specifically
allowed herein. Such royalties may not be credited toward Minimum Guaranteed
Royalty Payments due herein.

The parties agree that:

(1) distribution of Licensed Products bearing the Intellectual Property that
have not been approved by Licensor pursuant to the Agreement and distribution of
Licensed Products bearing the Intellectual Property outside the Territory or
outside the Channels of Distribution specifically granted under this Agreement
is a material violation of the Agreement and subject to termination under
Paragraph 10 hereof;
 
(2) even if the increased royalty is reported and/or paid, such Licensed
Products are still deemed unauthorized use of the Intellectual Property and
therefore, Licensee remains responsible for the indemnification and defense of
third party claims, as set forth in Paragraph 9.7 herein; and
 
(3) the increased royalty payable on unauthorized sales shall not limit
Licensor’s rights and remedies for damages.

 
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Marketing/Advertising:

Licensee agrees to spend no less than three percent (3%) of total annual Net
Sales or total annual Minimum Net Sales Revenue, whichever is greater, each
contract year in accordance with the terms specified in Section 5.3 herein.

Advance:  $75,000.00 to be paid upon execution of this Agreement.

Guaranteed Minimum Royalties (including Advance):  $300,000.00 to be paid as
follows:

DUE DATES:
 
AMOUNTS:
 
REMARKS:
Due Upon Signing
  $ 75,000.00  
Advance
Due on or before July 30, 2008
  $ 25,000.00  
Guarantee
Due on or before January 30, 2009
  $ 50,000.00  
Guarantee
Due on or before July 30, 2009
  $ 50,000.00  
Guarantee
Due on or before January 30, 2010
  $ 50,000.00  
Guarantee
Due on or before July 30, 2010
  $ 50,000.00  
Guarantee

Minimum Sales Revenue (annual):

Licensee shall achieve Minimum Net Sales Revenue for the Licensed Products
during the Term of this Agreement as follows:

$2,000,000.00
Contract Year 1: 04/01/2007 - 12/31/2008
$2,000,000.00
Contract Year 2: 01/01/2009 - 12/31/2009
$2,000,000.00
Contract Year 3: 01/01/2010 - 12/31/2010

 
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EXHIBIT C

ROYALTY STATEMENT

Quarter Ending____________________

    Licensee Name:     COFFEE HOLDING COMPANY, INC.        
Licensed
ENTENMANN’S
           
Intellectual
             
Property:
             
Contract Ref.#:
17065
                           
Date:
             

 
Customer Name
(Retailer)
Product
Description
Wholesale price
per Unit
FOB or other
price* per unit
Quantity Shipped
Discount Allowance
(if contractually
allowed)
Please specify
Returns
(if contractually  
allowed)
Sales Total 
(as defined in contract)
                                                                               
                                               

          TOTAL SALES REVENUE               ROYALTY RATE %     Royalty reporting
due each quarter even           x if sales are zero.             GROSS ROYALTIES
$                                 LESS UNEARNED   Send check and applicable
statement to:           ADVANCE/GUARANTEES  (           )          
    (IF APPLICABLE                   ROYALTY DUE     The Joester Loria Group    
          860 Broadway, 3rd Floor               New York, NY 10003              
                               

 
 
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EXHIBIT D

BRAND

ARCHWAY
BIMBO
BLUE BIRD
CINNABON
CLOVERHILL BAKERIES
DANISH KITCHENS DOLLY
MADISON BAKERY
DRAKE’S
DUNKIN DONUTS
DUTCH MAID
FAMOUS AMOS
FLOWERS/MRS. FRESHLEY
GRANDMA’S COOKIES
HEINEMANN’S
HOSTESS
INTERSTATE
JOEY’S KRISPY
KREME LADY
LINDA
LIL’ DUTCH MAID
LITTLE DEBBIE
LU
MARINELA
MCKEE FOODS
MERITA
MOTHER’S
MRS. FIELDS
MURRAY
NELLIE DUNCAN
NEMO’S
OTIS SPUNKMEYER
PANERA CAFÉ
PEAK FREANS SARA
LEE
STELLA D’ORO
SVENHARD’S
TABLE TALK
TASTYKAKE
UNCLE WALLY’S
VOORTMAN
 
 
 
 
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