LICENSE AGREEMENT
EXHIBIT
10.2
This
License Agreement ("Agreement") dated as of April 26, 2007, recites the
agreement between Seven Cellos, LLC ("DDV") and Harbrew Imports Limited, a New
York corporation ("Company") with respect
to the manufacture, distribution, and promotion of an alcoholic beverage
(liqueur) which will be known
as "Xxxxx XxXxxx'x Premium Limoncello. (the "Beverage").
RECITALS
This
Agreement is made with reference to the following:
A.
Company
has requested to use Xxxxx XxXxxx'x ("Xxxxxx") name and likeness and obtain
XxXxxx'x endorsement in connection with the Company's manufacture, distribution
and promotion of the Beverage.
B.
In order
to effectuate the foregoing, Company has requested that DDV enter into this
Agreement for the limited license of certain rights in and to XxXxxx'x name,
likeness and biography for the use by Company in connection with the name for,
and advertising, publicity and promotion of, the Beverage. Company has also
requested that XxXxxx provide certain personal publicity services in connection
with the promotion of the Beverage.
C.
DDV desires to grant to Company a limited license of certain rights in and to
XxXxxx'x name, likeness and biography and agrees to cause XxXxxx to perform
certain personal publicity services for the Beverage, upon the terms and
conditions set forth in this Agreement.
Accordingly,
the parties agree as follows:
1.
Conditions Precedent: All of
DDV's obligations hereunder are subject to Company applying for a trademark for
the brand name "Xxxxx XxXxxx'x Premium Limoncelle and DDV being designated as a
fifty percent (50%) co-owner (tenants-n-common) of such
trademark.
2. Recitals: The Recitals are
material hereto and incorporated herein by this reference.
3.
License: DDV grants to
Company, for the Term (as defined in paragraph 4., below), subject to the terms
and conditions contained in this Agreement, a limited, exclusive, license for
the Beverage (subject to revocation in accordance with the terms of this
Agreement) to utilize XxXxxx'x name, approved likeness, and approved
biographical material in connection with the name for, and advertising,
publicity and promotion of, the Beverage ("Licensed Rights").
4. Term:
The term of this Agreement shall commence on the later of the date of
signature by all parties of this Agreement and satisfaction of the Conditions
Precedent set forth in paragraph 1., above, and shall continue in perpetuity
unless the parties either mutually agree to terminate this Agreement or this
Agreement is otherwise terminated in accordance with its terms (the
"Term").
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5. Compensation:
In consideration for
the license and the performance of DDV's obligations under
this Agreement, Company
shall pay royalties as follows:
a.
BAK. Company shall
directly pay XxXxxx'x attorneys,
Behr Xxxxxxxx & Xxxxxx, LLP ("BAK"), or their designee, five percent (5%) of
the Net Profits (as defined below). This five percent (5%) amount shall not be deducted
from payments due to DDV.
b.
DDV After
the payment described in
Section 5(a) above, Company shall pay DDV a royalty equal to fifty percent (50%)
of the remaining Net Profits.
c.
SRFF After the royalty payment of 50% of net profits is paid to DDV, Company
shall pay its attorneys, Sichenzia Xxxx Xxxxxxxx Xxxxxxx, LLP, ("SRFF"), or its
designees, two per percent (2%) of the Net Profits (as defined below).
d.
Net
Profits. For purposes of this Agreement, "Net Profits" shall mean the
gross revenue generated by the sale of the Beverage and the related products
utilizing the Licensed Rights, less expenses incurred in the manufacture,
distribution, sale and promotion of the Beverage and the related products, as
determined by the Company's regular outside accountants. In calculating Net
Profits the parties agree that the expenses will only include actual
out-of-pocket costs incurred by the Company and will not include (i) an
allocation for unspecified overhead or (ii) depreciation or other non-cash
expenses. All amounts due pursuant to this Section 5 shall be paid every 3
months ("Quarterly
Period") within 30 days after the last day of each Quarterly Period.
Company shall deliver to DDV with each royalty payment a detailed report setting
forth the Net Profit for the Quarterly Period.
e.
Additional Consideration. As
additiona consideration hereunder, DDV shall be granted a warrant to purchase
100,000 shares of the issued and outstanding stock of Company, for an exercise
price equal to the lower of $1.00 per share, or 85% of the 30 day average bid
and ask price as reported by the PinkSheets, OTC Bulletin Board or whatever
exchange or service that lists the Company's Common Stock; provided, however, that in no event shall the
exercise price be less than $0.50 per share BAK shall also be granted a warrant
to purchase 20,000 shares of the issued and outstanding stock of Company, for an
exercise price of the lower of $1.00 per share, or 85% of the 30 day average tai
and ask price as recorded on the PinkSheets, OTC Bulletin Board or whatever
exchange or service that lists the Company's Common Stock- provided, however, that in no event shall the
exercise price be less than $0.50 per share. Attached hereto as Exhibits "A" and
"B" are Warrant Forms for DDV and BAK.
6. License
Territory: Company shall be entitled to utilize the Licensed Rights
throughout the world.
7. DDV Approval Rights: Company shall
consult with DDV with respect to (i) the taste, quality, and manufacture of the
Beverage and (ii) all concepts, designs and other creative elements for the
marketing and promotion of the Beverage, including without limitation, how,
when, and where the Beverage is marketed and promoted and the engagement of any
marketing or publicity personnel to market or promote the Beverage. The Company
shall develop not less frequently than annually a marketing plan describing the
proposed marketing and promotion of the Beverage, which shall be submitted to
DDV for approval. In connection with the foregoing, DDV shall have the following
specific approval rights:
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a. Likeness Approvals:
i.
Photographic
Approval. DDV shall have the right of approval of any and all photographs
in which XxXxxx appears (whether alone or with others) which are proposed to be
used in any way in connection with the Beverage. DDV shall exercise his approval
right in good faith, provided the foregoing shall not limit DDV's right to
provide photographs to be used by Company in lieu of those photographs for which
approval is sought.
ii.
Artwork
Likeness Approval. DDV shall have the right of approval over all artwork
renderings or artwork incorporating any image or part thereof of XxXxxx. DDV
shall have no obligation to approve any artwork rendering (including any
caricature artwork representation of his image).
iii.
Magazine
Covers/Website. Company shall resubmit to DEN for further approval all
photographs or artwork that have been previously approved by DDV, which Company
proposes to use for the cover of or inclusion in, a magazine or other similar
publication, whether print or otherwise (e.g. on Beverage website, if
any).
iv. Tabloids.
Company shall not furnish any photographs or artwork containing the likeness of
XxXxxx to the "National Enquirer," "The Star" or "The Globe" or similar domestic
or foreign tabloids.
v.
Photographic
sessions. If requested by Company, DDV shall cause XxXxxx to participate
in a photographic session for Company at a time, date and location and with a
photographer, hair and makeup personnel, acceptable to DDV. All expenses
associated with such photo session shall be paid by Company. The photographs
produced shall be subject in all regards to DDV's approval rights
hereunder.
vi. No
Circumventing Approvals. No sound-alike or look-alike or digital
doubles whose voice or physical attributes (i.e., hair color, height and
physical stature) could reasonably be identified as XxXxxx may be used to
circumvent DDV's approval rights with respect to his likeness
hereunder.
b. Use
of Name. DDV shall have the right of approval over any and all uses of
XxXxxx'x name and likeness and biography in connection with the Beverage,
including without limitation any modifications or extensions to the brand name.
The brand name "Xxxxx XxXxxx'x Premium Limoncello" is pre-approved.
c.
Manufacture,
Advertising, Marketing and Promotion. DDV shall have the right to approve of
material aspects of manufacture, bottling, advertising, marketing and
promotional campaign for the Beverage, including the flavor of the Beverage, the
alcoholic content, labeling, all major marketing and promotional materials
(irrespective of whether or not such materials contain XxXxxx'x name, likeness
or biography) and any other branding for the Beverage.
d.
Press
Releases. DDV shall have the right to approve all press releases regarding
the Beverage (irrespective of whether or not such materials contain reference to
XxXxxx).
e.
Cross
Promotional Activities/Tie Ins. DDV shall have the right to approve
any and all so-called cross promotions and tie-ins in and to the Beverage,
including without limitation promotional partnerships, if any, and any
products or services relating to the Beverage and "product placements" of
the Peerage or Beverage branded items in any media. DDV shall have approval over
any "behind-the-scenes" or "making-of' productions in connection with the
Beverage.
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f. Merchandising. DDV shall have the
right to approve any merchandising or services
in connection with the Beverage (irrespective of whether such
merchandising contains XxXxxx'x name, likeness of biographical materials). If
approved, Company shall not depict XxXxxx as personally endorsing any such
merchandise or service without DDV's prior written consent.
g.
Biography.
DDV shall have the right of approval over all of XxXxxx'x
biographical materials used in connection with the Beverage. DDV shall furnish
Company with approved XxXxxx biographical materials for Company's reference
within fifteen (15) business days of receipt of Company's
written request therefor.
h. Further
Ventures. All proposed ventures between the parties other than the
Beverage, including but not limited to other beverages or products, and all
proposed ventures between Company and any third party relating to the Beverage,
as well as any sale of the Beverage and any material distributing agreements
respecting the Beverage (other than in the ordinary course of business), are
subject to DDV's
approval. In the event of a proposed sale of the Beverage assets of tee
Company (collectively, a
"Sale"), DDV shall have the right to approve such Sale, and if DDV seal'
not approve such Sale (which approval shah be given, if at all, in DDV's sole
discretion), this Agreement
shall terminate.
i.
Timing of
Approval. Reasonableness. Unless otherwise expressly provided herein
to the contrary, the approval of DDV to any action under this Agreement shall
not be unreasonably withheld or delayed, Additionally, except to the extent
otherwise expressly provided herein to the contrary, approval (or disapproval)
shall be furnished within ten (10) business days of notice of any
action to be taken (except where the nature of the action requiring approval
requires a faster response in which case approval or disapproval shall be within
five (5) business days provided that DDV has been so notified that a faster
response is required and the reason why). The failure to timely respond shall be
deemed an approval of any such action. In the event of disapproval, the notice
shall describe the basis for the disapproval.
8. Right of First Refusal: DDV and XxXxxx
hereby grant the Company a Right of First Refusal to license any
other liquors, spirits, alcoholic beverages which DDV or XxXxxx determine to endorse or
develop for a period of five years from the date of this
Agreement.
9. Personal Appearances: During each
consecutive twelve (12) month period of the Term, DDV shall use reasonable
efforts to make XxXxxx available for a reasonable number of promotional
appearances including Company sponsored or coordinated events, media
opportunities and plug opportunities as mutually agreed upon by DDV and the
Company ("Personal and Media Appearance Days") the duration of which shall not
exceed two (2) days, unless otherwise agreed by DDV. The timing of Personal and
Media Appearance Days shall be subject to XxXxxx'x schedule, and any
failure to appear for any or all of Personal and Media appearances shall not be
deemed a breach of this Agreement if such failure is due to XxXxxx'x
professional unavailability due to contractual commitments in the entertainment
industry or for any cause beyond the reasonable control of XxXxxx. DDV shall
have approval over all publicity and promotional activities that Company
requests XxXxxx participate during the Personal Appearance Days. DDV agree to
cause XxXxxx to attend and participate in the annual spirits tradeshow on April
30, 2007, in connection with the introduction of the Beverage, subject to
DDV's approval rights of the marketing and promotional materials as
set forth in Section 7 above. Company agrees that Xxxx and Xxxxx Xxxx will
be XxXxxx'x pre-approved guests, within the meaning of Section 10(a) below, in
connection with such promotional appearance at the annual spirit
tradeshow on April 30, 2007.
10.
Transportation Accommodations and Expenses:
XxXxxx shall be provided with the following
transportation, accommodations and expenses in connection with each promotional
appearance
whether in accordance with paragraph 9, above or
as otherwise agreed):
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a. Air
Transportation. Roundtrip air
transportation for XxXxxx, his wife Xxxx Xxxxxxx, and pre-approved guests
including Xxxx Xxxxxxxxxx, by means of first-class commercial air-transportation
from XxXxxx'x then location;
b. Accommodations
and Expenses. First class hotel suite for XxXxxx and his pre-approved
guests in a hotel of XxXxxx'x choice and expenses
for first class incidentals during each visit;
c. First
class. First class exclusive ground transportation (car and driver)
between
airports, accommodations and appearance location; and
d. Rental
Car. An
exclusive full-sized luxury rental car or, at XxXxxx'x
election,
luxury SUV, and driver for XxXxxx'x exclusive use.
11. Company Representations and
Warranties: Company hereby represents and warrants: (i) It is and shall
remain a Company in good standing in the State of its incorporation; (ii) no
shareholder or officer of the Company has ever been charged with or found guilty
of a criminal offense, or is or has been the subject of a criminal
investigation; (iii) Company will secure at the required times any and all
necessary licenses and approvals from the applicable regulatory authorities and
will be in full compliance with all laws and regulations applicable to its
activities, including without limitation all alcoholic beverage control laws and
regulations and any other laws and regulations applicable to the manufacture,
importation, distribution, and promotion of alcoholic beverages; (iv) all
employees and contractors engaged by Company shall be required to provide and
maintain valid work authorizations:(v)
Company will inform and train (as required by any applicable laws and
regulations
) all employees and independent contractors regarding relevant applicable
laws and regulations
regarding the importation, marketing and sale of alcoholic beverages;
(vi) ail
advertising and promotion will comply with applicable laws and will be
entirely true and accurate and will not defame or
disparage any individual or organization; (vii) Company is not affiliated
with any political party or
organization affiliated to any political party or makes or will make
contributions to any cal party
or
organization affiliated with any political party; (viii) Company shall
maintain at all timer the
insurance set forth in paragraph 14., below.
12.
DDV
Representations
and Warranties: DDV represents and warrants that he has the
power to enter
into this
Agreement and grant the rights
herein granted.
13. Indemnification: Except to the extent
that DDV is in breach of a material term or material condition or any of his
representations or warranties hereunder and such breach or default relates to
the claim or demand for which DDV is seeking indemnity, Company shall indemnify,
defend and hold harmless DDV and XxXxxx against any and all claims, liabilities,
demands, damages, costs and expenses including attorneys' fees,
arising in connection with this Agreement, the Beverage, and or any
activities of Company. DDV and XxXxxx shall have the right at their own
expense to instigate or defend suits or proceedings to which this indemnity may
apply. Company shall not dispose of or compromise any action without the prior
written consent of DDV (which shall not be unreasonably withheld or delayed).
Except to the extent that Company is in breach of a material term or material
condition or any of its representations or warranties hereunder and such breach
or default relates to the claim or demand for which Company is seeking
indemnity, DDV shall indemnify, defend and hold harmless Company against any and
all claims, liabilities, demands, damages, costs and expenses, including
attcrneys' fees, arising in connection with the breach by DDV of its
obligations, representations and warranties hereunder. Company shall have the
right at its own expense to instigate or defend suits or proceedings to which
this indemnity may apply. DDV shall not dispose of or compromise any action
without the prior written consent of Company (which shall not be condition
on of this Agreement shall be deemed a waiver of any preceding or
succeeding breach or non-fulfillment of the same or of any other term
or condition hereof. This Agreement shall be construed in accordance with the of
the State of California. The parties agree that this Agreement may be executed
in counterpart. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted. In the event of any default hereunder, all remedies at
law and in equity shall he available. In the event of litigation concerning this
Agreement, the prevailing party shall be entitled to receive its cost, and
reasonable attorneys' fees, through and including all appeals, from the
non-prevailing party. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect other provision of this
Agreement, and the Agreement shall otherwise remain in full force and
effect. This Agreement may be executed via facsimile, in which event facsimile
signatures shall be treated as original signatures for all purposes.
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| AGREED | |||
| "DDV" | |||
| SEVEN CELLOS, LLC | |||
|
|
/s/ Xxxxx Xxxxxx | ||
| By: Xxxxx Xxxxxx, President | |||
| "Company" | |||
| HARBREW IMPORTS, LTD. | |||
| a New York corporation | |||
| /s/ Xxxxxxx XxXxxxx | |||
| By: Xxxxxxx XxXxxxx, President |
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