LIQUOR GROUP
AGREEMENT
THIS EXCLUSIVE AGREEMENT made as of the earliest date of signature below,
by and between: Happy Vodka Corporation, hereinafter referred to as
"Supplier" and Liquor Group, a Florida Corporation, hereinafter referred to
as "Distributor".
DUE TO THE SENSITIVE AND SECRETIVE NATURE OF THE BUSINESS AND TRANSACTIONAL
INFORMATION CONTAINED XXXXX, SUPPLIER AND DISTRIBUTOR HEREBY AGREE TO
MAINTAIN THE CONFIDENTIALITY OF THIS CONTRACT AS WELL AS THE SPECIFIC TERMS
AND CONDITIONS AS SPELLED OUT HEREIN. BOTH PARTIES AGREE TO PROVIDE THIS
DOCUMENTATION ONLY TO PARTIES DIRECTLY RELATED TO THE PERFORMANCE OR
ENFORCEMENT OF THIS AGREEMENT. ANY BREACH OF THIS CONFIDENTIALITY BEYOND
INDIVIDUALS OR ENTITIES NAMED XXXXX SHALL CONSTITUTE A BREACH OF THIS
AGREEMENT AND CAN BE CAUSE WITH PREJUDICE FOR TERMINATION OF THIS
AGREEMENT.
WHEREAS the Supplier is engaged as the exclusive brand
representative, sole source of production, owner, exclusive importer and/or
exclusive brand marketing entity for the products identified in Exhibit A
attached hereto and hereinafter referred to as the `Product'.
WHEREAS Supplier desires to grant to the Distributor an exclusive
license to sell and to promote the sale of the Product subject the
conditions, terms and other limitations provided in this agreement in the
sales territory identified in Exhibit B attached hereto, hereinafter
referred to as the `Sales Territory';
WHEREAS the Distributor wishes to obtain from Supplier the license
and the right to sell and promote the sale of the Product in accordance
with the terms, conditions and limitations provided in this agreement;
WHEREAS the Distributor possesses and declares that it has the
ability and proper licenses to import and distribute and promote the sale
of the Product to its client base and prospective customers in the Sales
Territory, all of who are properly licensed vendor style clients,
hereinafter referred to as Customers.
WHEREAS the term Export Sale shall hereinafter be referred to as
sales of the product from Supplier to the Distributor.
WHEREAS the word `Wholesale' shall hereinafter be referred to as
sales of the product from Distributor to licensed Customers within the
territory of this agreement.
WHEREAS the phrase `Sole Source of Import' is a term by which the
spirits, beer and wine industry commonly defines as the entity that is
responsible for all Federal Taxes due for all sales of the Product within
the Country in which the Sales Territory is established.
IT IS THEREFORE MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
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ARTICLE 1.0 GRANT OF LICENSE
1.1 License. The Supplier hereby grants to the Distributor and the
Distributor hereby accepts the appointment, permission and nontransferable right
and license to market and sell at wholesale the Product in the Sales Territory
described in Exhibit B. In addition, the Supplier grants to the Distributor the
nontransferable right and license to use the Product trade name, trademark,
labels, copyrights, and other advertising media for the sole purpose of selling
and the marketing the Product within the Sales Territory. All published
advertising and marketing shall be approved by Supplier in writing by Supplier
prior to issue, however printed materials such as flyers and restaurant menus
need not be pre-approved. The Supplier indemnifies and holds harmless the
Distributor for any claims arising out of the approved use of the brand
trademarks, labels, copyrights and other advertising media.
1.2 Relation of the Parties. This agreement does not constitute a
partnership, joint venture or employment agreement between the Supplier and the
Distributor. Neither party shall represent itself or its organization as having
any relationship to the other party other than that described in this agreement
and neither party shall have or hold itself out as having the power to make
contracts in the name of or binding the other party hereto.
1.3 Expenses. Each party shall pay and be solely liable for all expenses
incurred by it in connection with this agreement other that those specifically
addressed herein.
1.4 Brand Registrations. The Supplier shall directly register the Brands
subject to this agreement with the appropriate governmental agencies and all
expenses related to Brand registration shall be for the account of the Supplier.
Should the Supplier desire that the Distributor register the Brands, Supplier to
provide all suitable documentation required for said registration and Supplier
agrees to pay in advance for said registrations inclusive of an administrative
fee to Distributor as such registrations are to be completed by Distributor on
the Suppliers' behalf. Supplier is responsible at all times to remain compliant
with the State regulators in the Territory, including but not limited to
maintaining the current status of their Products registrations.
1.5 Taxes. Neither party shall be responsible for the collection,
withholding or payment of any taxes that are the responsibility of the other
party as identified herein. Except in cases where the Supplier has selected the
Distributor as the Sole Source Importer for a given Country, the Supplier is
responsible for any and all Federal Excise Tax in the Territory. Distributor is
responsible for any and all additional State excise taxes assessed for products
sold within the Territory.
1.6 Non-Exclusive. The Distributor acknowledges and understands that the
Exclusive license granted to import the Product and market and sell the Product
at either wholesale is an exclusive right only in the designated territory under
this agreement as assigned and described in Exhibit B.
1.7 Sales Territory. Each Sales Territory shall have a separate and
distinct Importation/Distribution Agreement unless otherwise agreed upon in
writing in exhibits herein.
1.8 Subcontractors. Should the Distributor contract distribution or any
other activity or service with any other party, the contract between
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those parties shall track the overriding Distributor agreement and any
subcontractors shall be bound by the terms and conditions therein.
ARTICLE 2.0 COVENANTS OF THE SUPPLIER
The Supplier covenants as follows:
2.1 Trademark Protection. During the life of this agreement, the Supplier
shall maintain in full force and effect Federal and International registrations
of its trade name, product name and trademarks; and shall at its own expense and
discretion exercise its common law and statutory rights against any
infringements of its trade name, trademark, labels, and copyrights. Supplier
shall hold harmless Distributor for all use of registrations held by Supplier
for the duration of this agreement.
2.2 Marketing. The Supplier shall support the Distributor through marketing
and advertising efforts. Such efforts shall be defined solely by the Supplier
and may change at any time without notice.
2.3 Strategy. The Supplier and the Distributor will strive to optimize the
exchange of information with regard to market developments and the strategic
approach of the market.
2.4 Insurance. The Supplier agrees, at its expense, to obtain and maintain
in full force and in effect at all times general liability and product liability
insurance in an amount no less than ($1,000,000) for any one incident or
occurrence. These liability limits may be reviewed annually and increased at the
reasonable request of Distributor. Supplier agrees to name Distributor as
additional insured and further agrees to hold harmless and indemnify Distributor
for any liability created by the product.
2.5 Loss and Damage. Risk of loss or damage for each order of the Product
shall pass to the Distributor upon delivery and acceptance of each order to the
Distributor. Delivery of each order shall be deemed to take place upon delivery
and acceptance of the order to the Distributor's Bailment Warehouse or other
facility as determined by Importer/Distributor via xxxx of lading.
2.6 Product Handling/Responsibilities. The Supplier shall arrange the
freight, transport and insurance of each order from the Suppliers export port to
the Distributor clients' warehouse(s) at its own cost and expense. The following
conditions must be met by Supplier during transit:
a) Temperature sensitive Product must be transported within the following
temperature range: 5 to 25 degrees centigrade (41 to 77 degrees
Fahrenheit). Exposure to temperatures outside this range could reduce
quality and/or destroy product entirely.
b) The Product must be rotated from within Suppliers stock on a first in
first out basis which should be dictated by the lot coding.
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c) When Product has been identified as out of condition it must be
isolated and destroyed in accordance with local legislation. The party
responsible for the Product condition must fund the cost of
destruction.
2.7 Supply on Hand. The Supplier shall use its best efforts to maintain an
inventory of the Product in Bailment with Distributor at all times adequate
stock of inventory to satisfy a period of thirty (30) calendar days of demand
for the Product. Any transfer of product by Supplier from the Bailment Warehouse
of Distributor for any reason shall always be in accordance with this clause.
ARTICLE 3.0 COVENANTS OF THE DISTRIBUTOR
The Distributor covenants as follows:
3.1 Distributor Responsibility. Distributor's primary responsibility under
this agreement will be to devote reasonable efforts to Wholesale the Products to
Customers in accordance with this agreement. Distributor will make presentations
of the products and meet regularly with Customers to track product sales and
services.
3.2 Importation/Distribution network. The Distributor shall use its best
efforts to import, distribute and market and sell at wholesale the Product
within the Sales Territory. To help facilitate such efforts the Distributor
shall maintain or develop and implement an importation/distribution organization
to service the Distributors Sales Territory.
3.4 Product Shall Remain in Sales Territory. Each Sales Territory shall
have separate and distinct Import/Distribution Agreements. All Product must
remain in the original territory where imported. Product cannot be brokered,
traded or re-distributed in any way, even if the territory holder has more than
one territory and desires to broker, trade or distribute within another
territory controlled by that same Distributor without the express written
agreement of the parties.
3.5 Representations. The Distributor shall not make any oral or written
representations of any kind concerning the Product; including but not limited to
statements of age, quality, warranties or guarantees, other than those provided
by the Supplier to the Distributor in writing.
3.6 Customer Lists. The Distributor will furnish the Supplier, should it so
request in writing, not more than annually, the name, address and contact
information of each person or entity that purchases the Product from the
Distributor as well as a description of Product and volume purchased directly
through Distributor if and when readily available to Distributor.
3.7 Trademarks. The Distributor acknowledges that the Distributor's license
to use the Products trade name, trademark, labels, copyrights and other
advertising media is solely for the purpose of selling and marketing the Product
within the Sales Territory. Distributor agrees not to use Supplier trademarks in
any malicious manner. In addition, the Distributor hereby represents that upon
the termination of this agreement the Distributor's right and license to use the
Products' trade name, trademark, labels, copyrights and other advertising media
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shall cease immediately and they shall be no longer utilized by the Distributor.
3.8 Care. The Distributor will ensure that good care is taken of the
Product distributed by the Distributor including safe and effective Wholesale
delivery and point of sale display as provided by the Supplier. Distributor
shall not be liable for breakage or loss through any means for Product in
transit to Distributor from Supplier, however, Distributor shall be liable for
breakage or loss through any means for Product in transit from Distributor to
Customers.
3.9 Promotional Materials / Promotions. The Distributor will receive from
the Supplier the documentation, general sales and promotional material deemed
necessary by the Supplier for the sale of the Product in sufficient quantities.
With the exception of simple media created for use in Distributors individual
customer locations, the designs, marketing materials and printed matter produced
by Distributor and not supplied by the Supplier shall first be submitted to the
Supplier for approval before being created and distributed by Distributor if
said materials are to be billed back to Supplier.
Supplier understands and agrees that the failure of the Supplier to provide
sufficient marketing and advertising for the Product will have a material
detrimental effect on sales by Distributor and may cause sales to be less
than expected results during the term of this agreement. Supplier agrees
to meet or exceed the promotional support for the Product to the
Distributor as specified in the Promotional Strategy Document attached
hereto as Exhibit C. Suppliers notified by Distributor via email, US mail
or other form of data transmission for lack of sales support as described
in this section have thirty (30) calendar days to rectify the lack of
support, thereafter Distributor may at it's discretion terminate this
agreement or facilitate the creation of and dissemination of sufficient
marketing materials to effectuate sales at Suppliers expense. Suppliers
that have been noticed under this section may not utilize lack of sales per
quota as reason for the termination this agreement.
3.10 Promotional Funding: To succeed in the market, Supplier understands
and agrees that it must aggressively support its' products though marketing,
promotion, programs and incentives. Prior to signing this agreement a
promotional budget shall be determined in accordance with Exhibit C attached and
the initial funding payment of Suppliers Promotional Account will be due and
payable to Distributor upon signing of this agreement.
3.11 Strategy. The Distributor and the Supplier will strive to optimize the
exchange of information with regard to market developments and the strategic
approach of the market.
3.12 Sales Reports. The Distributor shall provide Supplier with a monthly
report within ten (10) days of each month end period showing aggregate cash
sales, accrued sales and remaining inventory of their products. Such report
shall be generated and transmitted by email only upon request by Supplier.
3.13 Sales Goals. Sales goals shall be determined by Distributor and
Supplier and sales performance criteria of Distributor shall be dictated as
shown on Exhibit D. Both parties will shall work together to achieve these sales
goals.
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ARTICLE 4.0 TERM
4.1 Initial Term. This agreement shall have an initial term of
two (2) years, renewable in two (2) year increments, to be mutually agreed
but ultimately at the sole discretion of the Supplier. The Term shall
begin on the date this agreement has been duly executed by the Supplier and
the Distributor and shall end on the agreement anniversary date, two years
hence, subject to the following:
4.2 Termination. Either party on ninety (90) calendar days'
written notice to the other may terminate this agreement without cause, and
without prejudice to any rights of either party. Both parties agree that
such rights include monetary damages for ongoing sales due to the market
development efforts of Distributor or in the contrary monetary damages due
to losses of Supplier for wrongful termination. Moneys due to either party
become immediately due upon final agreement of termination under this
agreement. At all times during this 90 day notice time period Supplier
must comply with Clause 2.7 above. Any and all orders placed or committed
to by Distributor must be fulfilled regardless of contractual cancellation
in order for Distributor to maintain normal business activities until
termination is finalized and all damages have been calculated, accepted by
both parties and received by the prevailing party. Distributor agrees to
suffer triple damages should they fail to provide Suppliers product to the
market during the termination period or during any arbitration period
scheduled to enforce this agreement. Supplier agrees to suffer triple
damages should they fail to provide sufficient product during the
termination period or during any arbitration period scheduled to enforce
this agreement.
4.3 Suspension. The Supplier may immediately suspend this agreement
under the following conditions:
a) If the Distributor is in default of any payment due to the Supplier,
its vendors, brokers or assigns for a period of sixty (60) calendar
days,
b) If the Distributor defaults in performing any of the other terms of
this agreement and continues in default for a period of sixty (60)
calendar days after written notice thereof.
c) If the Distributor is adjudicated bankrupt or insolvent, or enters
into a composition with its creditors.
d) If a receiver is appointed for Distributor, or if a majority of its
voting stock is transferred.
The Distributor may immediately suspend this agreement under the following
conditions:
e) If the Supplier is in default of any payment due to the Distributor,
its vendors, brokers or assigns for a period of Fifteen (15) calendar
days,
f) If the Supplier defaults in performing any of the other terms of this
agreement and continues in default for a period of sixty (60) calendar
days after written notice thereof.
g) If the Supplier is adjudicated bankrupt or insolvent, or enters into a
composition with its creditors.
h) If a receiver is appointed for Supplier, or if a majority of its
voting stock is transferred.
If any of the aforementioned conditions exist, the Supplier or Distributor may
terminate this agreement without prejudice upon giving written notice to the
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Distributor at least ninety (90) calendar days before the time when such
termination is to take effect, and thereupon this agreement shall become void,
but without prejudice to the rights of either party to moneys due or to become
due under this agreement.
4.4 Discontinued Use of Trademarks/Trade name. Upon the termination of this
agreement for any reason, the Distributor shall discontinue the use of the
Supplier's trade name, trademark, labels, copyrights, and other advertising
media and shall remove all signs and displays relating thereto; and, in the
event of failure so to do, the Supplier may itself remove such articles at the
Distributors expense.
4.5 Final Inventory. Upon termination of this agreement Distributor shall
make a final inventory accounting and provide same to Supplier. Distributor to
retain, and Supplier shall provide, sufficient inventory to support customers
and normal business activities up to the termination date.
4.5 Reclamation of Inventory. Upon the termination of this agreement for
any reason, the Supplier shall have the obligation, unless otherwise required by
the Distributor, to reclaim product in the bailment warehouse of Distributor, or
to repurchase its Product then in the possession of the Distributor through
prior purchase and available for sale, at prices originally billed to the
Distributor, with deductions for moneys due or to become due to the Supplier
under this agreement. As to any of the Supplier's Product not repurchased by the
Supplier, the Distributor shall have the right to dispose of such in the regular
course of its business, and for this purpose the restrictions of Section 4.3
shall be deferred until the earlier of completion of such sale or six months
after the termination of this agreement.
4.6 Illegal Activity. At any time during this agreement should either party
violate any State or Federal or international liquor law, whether convicted or
plea-bargained, either intentional or unintentional, continuation of this
agreement shall be at the sole discretion of the other party. All standard
termination clauses shall be overridden in such an instance.
ARTICLE 5.0 ASSIGNMENT
This agreement shall not be assigned by the Distributor; however, the
Distributor shall have the right to grant sub-licenses and to utilize agents,
sub-Distributors, and employees to fulfill its duties and obligations under this
agreement; however, all of such persons shall be subject to the terms of this
agreement and the Distributor shall be liable for the performance or
non-performance of all such persons.
ARTICLE 6.0 WAREHOUSING, PRICE, ORDER & DELIVERY OF GOODS
6.1 Bailment Warehouse Structure. Distributor shall function in all ways
under this agreement as a Bailment Warehouse Distribution Organization, as is
commonly described by the National Alcohol Beverage Control Association (NABCA).
Once monthly, calculations of all Products delivered and payments received for
such product shall be tabulated and paid to the Supplier via transfer method of
Companies choice. All remaining inventory of the Product is inventoried, counted
and reported to Supplier on a monthly basis. The phases of the operation shall
be as follows:
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a) The Supplier shall receive a Bailment Order from Distributor
requesting that Supplier place Products into available inventory in
the Distributor's designated bailment warehouse in quantities
according to the terms and conditions contained herein. Products
remain in the ownership and control of the Supplier while it remains
in the bailment warehouse, however Supplier must at all times maintain
sufficient inventory in the Bailment Warehouse to sufficiently supply
for no less than ninety (90) days the Distributors Customers.
b) When the Distributor requires the removal of inventory from the
bailment warehouse to an affiliates distribution warehouse it will
provide the Supplier with a notice to draw-down and deliver the
inventoried bailment Product to the affiliate which occurs under
normal commercial terms as set forth herein; thereby creating a
payable to the Supplier for the amount of Product drawn-down.
c) The normal commercial terms between the Supplier and the Distributor
mirror the normal commercial terms between the Distributor and the
Customer, with the exception of payment term. All terms and conditions
to be advised to the Supplier by the Distributor.
d) Upon receipt of payment from the Customer, payment to the Supplier is
remitted pursuant to the payment instructions of the Supplier.
e) Defaulted payments from Distributor's customers carry an over-riding
commercial term the Supplier and the Distributor/Importer of net
ninety (90) days, irrespective of the underlying agreement between the
Distributor and the Customer or the payment performance of the
Customer.
f) The Distributor bears the full credit risk of the Customer.
g) Bailment warehouse expenses are for the account of the Distributor
with the exception of warehousing described in Sub-Section 6.1(h)
below.
h) Should the Supplier choose to use the bailment warehouse structure for
supporting sales in territories not controlled by the Distributor then
those bailment warehouse storage and transfer out expenses incurred
for product not drawn-down for sale by Distributor are for the account
of the Supplier.
i) Shipping expenses to the bailment warehouse are for the account of the
Supplier.
6.2 Terms of Sales Prices:
a) Supplier agrees to sell to Distributor and Distributor agrees to buy
from Supplier the Products in such quantities as may be necessary to meet
specific sales achieved. Distributor will place all bailment warehouse requests
and/or orders for the Products with Supplier. Supplier will prepare shipments
for all bailment warehouse requests and/orders to the bailment warehouse within
a commercially reasonable time in a commercially reasonable manner. In the event
there is an insufficient quantity of the Products to fill Distributors bailment
warehouse request and/or orders and the concurrently received orders of
Supplier's other regional Distributors, Supplier may allocate its available
Products on a prorated basis provided written notification is given to
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Distributor. In this instance Distributor shall not be liable for Bailment
Storage accrued on the Product prior to the allocation.
b) Supplier's current invoice prices for the Products are listed on Exhibit
A. Any change in price will be subject to a 90-day notice prior to change. In
the event Distributor reasonably believes that Supplier's proposed change will
adversely affect Distributor's ability to market the Products within the
Territory, Distributor will promptly notify Supplier of this belief. Distributor
and Supplier will then meet and negotiate in good faith to agree on a price
which Distributor reasonably believes will not adversely affect Distributor's
ability to market the Products within the Territory. Should the new price for
the Product not meet with the approval of Distributor, Supplier agrees that
Distributor may override all other cancellation clauses and cancel this
agreement without prejudice with 30 days written notice.
c) All quantities of the Products shipped by Supplier to Distributor must
be of merchantable quality, comparable to the quality of the Products previously
reviewed by Distributor and must be in first class condition. Distributor
reserves the right to reject any Product not of such quality or in such
condition.
6.3 Orders. The Distributor shall have the right to place requests for
bailment inventory and/or Bailment Orders with the Supplier for such quantities
of the Product as is necessary to fulfill the Distributors actual or projected
obligations under Article 3.0 hereof and such other quantities of the Product as
the Distributor shall deem necessary. All requests for inventory and/or orders
shall be placed electronically unless otherwise arranged.
6.4 Delivery of Goods. The Supplier will use its best efforts to supply
Product to bailment warehouse as soon as possible, but in any event not later
than thirty (30) days of the date of receiving a request for inventory or an
order; however, the Supplier's failure or inability for whatever reason to
supply and deliver ordered Product to the Distributor within thirty (30) days
from the date ordered does not give the Distributor any right or interest in any
claim against the Supplier for damages of any kind whatsoever. Distributor may
at anytime cancel a Bailment Order without penalty so long as the shipment of
such goods has not already commenced.
6.5 Time of Delivery. Legal delivery from the Supplier shall officially
occur when the Distributor's purchase order is presented to the Supplier and the
Distributor accepts and takes delivery of the Product from the bailment
warehouse inventory.
6.6 Minimum Order. There is no minimum order restriction, unless otherwise
mutually agreed by the parties.
6.7 Retail Pricing. The Distributor shall obtain product Retail pricing
approval from the Supplier prior to implementation based on full disclosure as
contained in Distributor's pricing guideline spreadsheet.
6.8 FET paid. As shown in section 1.5 and unless otherwise agreed in
writing and amended to this agreement by the parties, all products shall be
shipped to the Distributor on a Federal Excise Tax (FET) paid basis.
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ARTICLE 7.0 BRAND DEVELOPMENT, MARKETING & PROMOTION
7.1 Product Support. The Supplier will support the Product utilizing brand
building/product marketing efforts of the Distributor as described herein.
7.2 Promotional Support. The Supplier will assist the Distributor in the
preparation of a promotional and marketing plan, if so desired. The Supplier is
to provide advertising and marketing support above and beyond that which is
stipulated herein at their discretion, which may come in the form of television
commercials, radio spots, ad slicks, mirror web sites, promotional giveaway
items or other traditional marketing materials to the Distributor, so long as
they are provided free of charge.
7.3 Product Demonstrations. The Distributor believes that Product
Demonstrations and events are effective methods of promotion. A tasting and
promotional schedule and budget shall be prepared and mutually agreed by the
parties and is attached hereto as Exhibit C. Supplier will fund the budgeted
Product Demonstrations monthly in advance. It is understood that no
demonstrations will occur without prior funding by Supplier. Product
Demonstrations and events will be coordinated by the Distributor and billed to
Supplier accordingly following the posted Liquor Group Product Demonstration
Standard Operating Procedure. All expenses and costs for the provision of sample
products for Product Demonstrations and events shall be mutually agreed prior to
the demonstration and/or events and shall for the account of the Supplier.
7.4 Advertising Agency. The Advertising Agency of Record (AOR) for the
Supplier may make media purchases and run Government approved advertisements for
the Product and may also assist the Distributor in media purchasing and public
relations strategy. This service shall be free of charge to the Distributor, so
long as the Distributor makes all product related media placement through the
Suppliers AOR. Should Supplier not have an AOR, Supplier can utilize the
services of Distributors preferred AOR through Suppliers pre-paid program
account with Distributor.
7.5 Advertising Approval. The Supplier shall have the unquestioned right of
approval for all television, radio, promotional activities and Product that the
Distributor chooses to produce on their own, regardless of costs incurred or
committed.
7.6 DISCUS. Distributor adheres strictly to the DISCUS Code of Responsible
Practices for Beverage Alcohol Advertising and Marketing and will not condone,
participate in nor permit any activity not in accordance with the guidelines
contained therein. In some instances the guidelines adhered to by Distributor
exceed the DISCUS guidelines and Distributor reserves the right to decline to
participate in, or prohibit any promotional activity within in its Territory
that it deems in its sole discretion to be outside of its own guidelines. More
information on DISCUS guidelines can be found at: xxx.Xxxxxx.xxx
7.6 Confidentiality Agreement. The Distributor agrees to maintain
confidentiality with regards to the internal marketing and promotional strategy
of the Supplier. Any materials marked confidential and disclosed as such to
Distributor shall be handled with the sensitivity and care of general business
and professional standards.
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ARTICLE 8.0 WARRANTIES, INDEMNITY AND AUTHORITY
8.1 COLA. The Supplier guarantees the Product and labels are registered
with a Certificate of Label Approval (COLA) in accordance with the rules and
regulations of United States Treasury Office, Tax and Trade Bureau. If products
are to be marketed and sold by Distributor into the Canadian Market, then
products must meet with the Canadian Tax Authority Standards.
8.2 Sole Source of Import. If the Distributor is also selected as the
Importer of Record and/or Sole Source of Supply for the Product into the United
States or Canada, the Supplier shall provide the United States Treasury Office,
Tax and Trade Bureau and any other governmental agency at the Federal, State,
County and City level within the Distributor Territory with a letter of
authority specifically authorizing the Distributor to act as Importer and
authorize the use of Certificate of Label Approvals (COLAS) in any way deemed
appropriate by the Distributor. Supplier further agrees to amend at its own
expense the Product Labels to reflect the Distributors sole importer status.
8.3 Defect/Damage Insurance. The Supplier, as an Exporter/Importer of said
Product, must be insured against losses resulting from defective or damaged
Product delivered to the Distributor. Defective or damaged Product must be
brought to the attention of the Supplier within 48 hours of receipt of the
product by the Distributor, and must be inspected by a duly authorized
representative of the Supplier prior to credit issue or claim reimbursement.
Replacement Product will be issued for damaged or defective Product in a timely
manner, subject to insurance claim and approval of such. Distributor to use its
best efforts to support Supplier's pursuit of insurance claims to recoup costs
for damaged goods.
ARTICLE 9.0 MISCELLANEOUS
9.1 Attorney Fees. In the event any party fails to perform any of its
obligations under this Agreement or in the event a dispute arises concerning the
meaning or interpretation of any provision of this Agreement, the defaulting
party or parties or the party or parties not prevailing in such dispute as
determined in the Arbitration section below, as the case may be, shall pay any
and all costs and expenses incurred by the other party or parties in enforcing
or establishing its or their rights under this Agreement, including, without
limitation, reasonable attorney fees, whether suit be brought or not, and
whether incurred in arbitration, mediation, trial or appellate proceedings.
9.2 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration
administered in Jacksonville, Florida by election of either party of a member of
the American Arbitration Association in accordance with its Commercial
Arbitration Rules, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Both parties agree to be bound
by the findings of such arbitration and waive their rights to all other forms of
litigation.
9.3 Remedies. All rights and remedies granted in this agreement shall be
cumulative and not exclusive of all other rights and remedies which the parties
may have at law or in equity, and the parties may exercise all or any of such
rights and remedies at any one or more times without being deemed to have waived
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any or all other rights and remedies which they may have in the matter.
9.4 Notices. All notices, demands, and other communications required or
contemplated by this Agreement shall be in writing and shall be deemed given by
the sender and received by the recipient: (i) upon receipt if delivered
personally; (ii) by confirmed facsimile utilizing the number provided in this
agreement; (iii) upon confirmation of overnight delivery; or (iv) five days
after mailed by first class registered or certified mail, return receipt
requested. Addresses and contacts for such notices are provided on the signature
page below.
9.5 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and the Agreement shall be construed in all respects as if such
invalid or unenforceable provision(s) were omitted. If one or more phrases,
sentences or provisions of this Agreement is susceptible of two or more legal
interpretations, at least one of which would make the same legally enforceable,
then the legal interpretation which would render it legally enforceable shall be
used in construing this Agreement.
9.6 Counterparts; Exhibits. This Agreement may be executed in one or more
counterparts, including via facsimile signature, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. All Exhibits attached hereto are hereby incorporated into this
Agreement by reference.
9.7 Entire Agreement. This agreement constitutes the entire agreement and
supersedes all agreements previously made between the parties hereto relating to
its subject matter. There are no other agreements or understandings between them
and this agreement is the entire agreement among the parties. Amendments and
exhibits to this agreement shall only be held valid when signed by both parties
hereto.
9.8 Headings. Headings contained herein are for convenience of reference
only and are not intended to define, limit or describe the scope or intent of
any provisions of this agreement.
9.9 Governing Law. The validity, construction and effect of this Agreement
shall be construed and governed by the laws of the State of Florida. The parties
agree that the proper jurisdiction and venue for the resolution of any disputes
shall be in the City of Jacksonville, Xxxxx County, Florida.
THIS SPACE INTETIONALLY LEFT BLANK.
12
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers or representatives.
For Supplier: For Distributor:
Happy Vodka Corporation Liquor Group
0000 Xxxxxxxx Xxxx 000-00 X0X Xxxxx
Xxxxxxxxxxxx, XX 00000 Suite 155
(000) 000-0000 Xxxxx Xxxxx Xxxxx, XX 00000
(000) 000-0000 Fax (000) 000-0000 Office
(000) 000-0000 Fax
Xxxx@XxxxxxXxxxx.xxx
/s/ X.X. Xxxxx /s/ Xxxx X. Xxxxxxx
______________________________, ______________________________,
X. X. Xxxxx Xxxx X. Xxxxxxx
Date: 1/1/2005 1/1/2005
13
LIQUOR GROUP HOLDING, LLC. AGREEMENT
EXHIBIT A: PRODUCTS and PRICES:
The Products sizes and pricing covered by this agreement are as follows:
Happy Vodka, Happy Rum, Happy Tequila and Happy Gin - All available sizes.
(Product Name)
* This is the price supplier charges to Liquor Group per unit. ** Liquor
Group adheres to standardized xxxx-ups as seen in the Liquor Group
Standardized Pricing Guide spreadsheet. If the actual retail price (the
price that consumers pay for the product at a retail store) will likely
exceed the anticipated retail price listed above Liquor Group will notify
the brand of this issue. (Repeat this page by using copy and paste into a
new document as necessary to reflect all Products)
14
LIQUOR GROUP HOLDING LLC, AGREEMENT
EXHIBIT B: TERRITORY:
The territory covered by this agreement is; USA and all it's territories
15
LIQUOR GROUP HOLDING LLC, AGREEMENT
EXHIBIT C: PROMOTIONAL SUPPORT:
The Supplier agrees to support the Product through the following means per
annum of this agreement:
Support type: % of cost paid by Supplier: Quantity Available:
Point of Sale/Merchandising: 100% #:[# Here]
T-Shirts / Apparel: 100% #:[# Here]
Stickers: 100% #:[# Here]
Giveaway Trinkets: 100% #:[# Here]
Advertising/Media: 100% $:[$ Here]
Product Demonstrations: 100% $:[$ Here]
Initial Sales Samples: 100% #:[# Here]
Ongoing Sales Samples: [% Here]% #:[# Here]
Product for Product Demonstrations: [% Here]% #:[# Here]
Sales Rep Training: [% Here]% #:[# Here]
Sales Rep Rewards: [% Here]% #/$:[#/S Here]
Other: [Other Promotional Here] [% Here]% #/$:[#/S Here]
Other: [Other Promotional Here] [% Here]% #/$:[#/S Here]
Supplier hereby agrees to provide Point of Sale (POS) materials with every
shipment of Product. Should sufficient POS materials not be provided,
materials will be generated by Distributor and charged back to Supplier at
cost plus 10%.
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LIQUOR GROUP HOLDING LLC, AGREEMENT
EXHIBIT C (Continued):
PROMOTIONAL SUPPORT
Upon execution of this contract, Supplier shall deposit into Distributor's
Brand Promotional Account the following par amounts:
Category: Example: Actual:
Brand Advertising Funding: $2,000.00 $2000
Sales Program Funding: $2,000.00 $2000
Product Demonstration Funding: $5,000.00 $2000
Custom Printed Materials Funding: $1,000.00 $2000
Total: $10,000.00 $8000
These accounts to be replenished monthly by Supplier against actual documented
expenditures by Distributor so as to maintain the above par balances.
Distributor to use best efforts to maximize the efficiency of promotional
expenditures however there are no guarantees as to the effectiveness of any
campaign.
Brand Photography: Supplier agrees to provide high resolution photographs with
white background, black background and stylized background photographs of the
products contained herein for use by Distributor. Should supplier not have said
photographs, Distributor can provide said photography services for a fee of $300
per product size contained herein.
Specifications Sheet: Supplier agrees to provide Distributor with an industry
standard specification sheet including product photo, UPC & SCC codes and image
files, transportation, an image of all National Alcohol Beverage Control codes
per product size contained herein. If spec sheet is not provided Distributor
will create said sheet at a cost to supplier of $100 per brand.
Press releases: A press release and media support kit shall be prepared by
Distributor's Advertising Agent for each product under contract with final text
approval authority from Supplier. Distributor to implement the press release
through its normal media channels, with the cost of preparation and
dissemination for the press release and media support of $1,000.00 payable to
distributor prior to the release date. Supplier is encouraged to disseminate the
press release through its own channels and so advise Distributor of channels
utilized.
Web development: Supplier must have a website with information and photographs
of their product available to the public. Said website must conform to the US
Tax and Trade Bureau's alcohol advertising standards, as well as to the
standards set by the Distilled Industry Council of the United States. Should
Supplier desire that Distributor modify and improve an existing website,
Distributor may charge a consulting set-up fee of no less than $1,000.00. All
out of pocket web modification charges to be for the account of the Supplier.
17
Program Incentives: Program incentives from the Vendor are an essential
component of a successful marketing and promotional strategy in the market. A
program incentive budget shall be prepared and mutually agreed by the parties.
LIQUOR GROUP HOLDING LLC, AGREEMENT
EXHIBIT D:
PERFORMANCE CRITERIA
Performance Criteria:
During the initial year of this agreement, a baseline of historical sales per
product listed on Exhibit A will be established for each product in the
Territory shown in Exhibit B. If the products listed on Exhibit A have a
documented track record of sales over the past 12 months in the Territory shown
in Exhibit B, then such case sales should be documented to Distributor by
Supplier below. In such cases Distributor agrees to utilize Suppliers sales
figures to create the baseline of historical sales.
Distributor warrants that it will equal or exceed one hundred and ten percent
(110%) of the baseline established for the subsequent fiscal year and shall
increase such results by no less than 5% per annum thereafter; provided the
macroeconomic condition of the market remains stable at or above similar levels
as the baseline historical period.
Should Distributor not meet such performance criteria as outlined above,
Supplier must notify distributor no less than Ninety (90) days prior to the
renewal period of this agreement if they intend not to renew the agreement due
to lack of sales performance. If Distributor rectifies such issues within the 90
day period, supplier shall continue to be bound by this agreement in its'
entirety. If Supplier fails to notify Distributor of such potential breach
before the Ninety (90) day renewal period it will be assumed that Supplier is
satisfied with the performance of Distributor and the baseline of sales will be
revised to reflect the past 12 month period of performance.
Enter Case Quota per Product below based on Existing Sales in Territory as shown
in Exhibit B; If New Product to the Territory, enter New Product - No Quota for
baseline establishment:
5000 cases per annum per product.
