Exhibit 10.15
Consulting and Exclusive Referral Agreement, by and among Seller, Purchaser and
Maxmillian
CONSULTING AND EXCLUSIVE REFERRAL AGREEMENT
This Consulting and Exclusive Referral Agreement (the
"Consulting Agreement") is dated this 9th day of December, 2002 and is
executed by and among Xxxx X. Xxxxxx, of 0000 Xxxxx Xxxxx Xxxx, Xxxxx,
Xxxxxx 00000 ("Xxxxxx"), Drinks Americas Inc., a Delaware corporation
with its principal executives offices located at 000 Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxx 00000 ("Drinks Americas"), and Maxmillian Partners,
LLC, a Delaware limited liability company with it principal executive
offices located at 000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000
("Maxmillian" and together with Drinks Americas the "Companies").
RECITALS
1. The Companies are directly or indirectly engaged in the beverage
industry.
2. Drinks Americas is purchasing a percentage interest in Old Whiskey
River Distilling Company LLC, a Hawaii limited liability company ("Old Whiskey")
and Y Sake LLC, a Hawaii limited liability company ("Y Sake") from Xxxxxx in
reliance, in part, on his agreement to advise Drinks Americas with respect to
the business of said limited liability companies and his representations,
covenant and agreements in this Consulting Agreement.
3. Drinks Americas desires to expand its business by developing new
brands, and the Companies desire to obtain Xxxxxx'x advice, knowledge,
experience and business contacts in order to expand their respective business.
4. Xxxxxx has valuable knowledge, experience and business contacts with
regard to Old Whiskey and Y Sake and the production and distribution of their
respective products and with regard to the beverage industry.
5. The Companies and Xxxxxx seek to enter into an agreement by which
Xxxxxx will provide consulting services to the Companies; and Drinks Americas
and Xxxxxx seek to enter into an agreement by which Xxxxxx will exclusively
present to Drinks Americas certain Brand (as such term is defined herein) and
assist Drinks Americas in the development, licensing, manufacturing, promotion
and/or distribution of such Brands pursuant to the terms and conditions set
forth herein.
NOW, THERFORE, for valuable consideration, the Companies herby engage
Xxxxxx, and Xxxxxx hereby accepts the engagement, to perform services for the
benefit of the Companies and their affiliates and customers on all of the
following terms and conditions:
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ARTICLE I
DEFINITIONS
"Brand" shall mean a brand by which a beverage is known, but not including
the Old Whiskey River or Y Sake Brands.
"Compensation" shall have the meaning set forth in Section 2.3.
"Consulting Services" shall mean all of those consulting services set
forth on Exhibit A hereto.
"Exclusive Referral Period" shall mean the period including the Initial
Exclusive Referral Period and the Subsequent Exclusive Referral Period, as
applicable.
"Extended Exclusive Referral Period" shall mean the period following the
Initial Exclusive Referral Period and the Subsequent Exclusive Referral Period
as applicable, the Subsequent Exclusive Referral Period, as set forth in Section
3.3 below.
"Identify" shall have the meaning set forth in Section 3.1(b) below.
"Initial Exclusive Referral Period" shall mean the eighteen month period
following the Closing Date (as such term is defined in that certain Interest
Purchase Agreement between Drinks Americas and Xxxxxx entered concurrently
herewith).
"Participate" shall have the meaning set forth in Section 3.1(a).
"Subsequent Exclusive Referral Period" shall mean the eighteen month
period following the later of: (a) the Initial Exclusive Referral Period, as set
forth in Section 3.2 below, or (b) the Extended Exclusive Referral Period with
respect to the Initial Exclusive Referral Period, if any.
"Substantially Similar Terms" shall mean the same Brand and right thereto;
financial terms, budgets, projected balance sheet, projected profit and loss and
cash flow statements, equity participation, and capital commitment with respect
to such Brand, its licensing and promotion, and its manufacture and
distribution; closing date and management.
ARTICLE II
CONSULTING SERVICES
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2.1 Consulting Services. Xxxxxx agrees to perform the Consulting Services.
2.2 Compliance. Xxxxxx shall perform all services diligently, competently
and in conformity with all standards of professional conduct generally
prevailing in the industry. In the performance of the services, the Companies
and Xxxxxx shall cooperate diligently and in good faith with the mutual
objectives of enhancing the respective business, customer relations and profits
of each of the Companies.
2.3 Compensation. As compensation for Xxxxxx'x services to Maxmillian and
Drinks Americas, Maxmillian shall issue 4.0 units of interest of Maximillian ,
representing a two percent (2%) interest in Maxmillian, subject to the terms and
conditions set forth in a certain Subscription Agreement and Maxmillian's
Operating Agreement (the "Maxmillian Compensation"). As compensation for
Xxxxxx'x services to Drinks Americas, Drinks Americas shall pay Xxxxxx $600,000
in five equal annual installments, commencing on the eighteen (18) month
anniversary of the date of this Consulting Agreement and on the succeeding four
(4) annual anniversaries of said eighteen (18) month anniversary (the "Drinks
Americas Compensation"). Drinks Americas may pay Xxxxxx all of any portion of
the Drinks Americas Compensation prior to the scheduled dates, without penalty
or premium.
2.4 Conversion of Drinks Americas Compensation
(a) Xxxxxx may, at any time after the date of this Consulting Agreement
convert the balance of the Drinks Americas Compensation due to him under this
Consulting Agreement into shares of common stock of Drinks Americas up to such
number of said shares as would represent no more than four percent (4%) of the
total number of issued and outstanding shares of capital stock of Drinks
Americas, on an as converted basis, if applicable, as of the date of such
conversion; provided: (i) Xxxxxx enters into such Subscription Agreement and
Stockholder Agreements as may be required by Drinks Americas, (ii) Xxxxxx
obtains the appropriate regulatory approvals with respect to hold an interest in
an alcoholic beverage license, and (iii) Xxxxxx'x becoming a stockholder of
Drinks Americas does not adversely affect the alcoholic beverage registrations,
permits or licenses of either of the Companies, Old Whiskey, Y Sake or their
affiliated companies. The price per share applicable to the conversion shall be
equal to: (x) if Drinks Americas is publicly traded, the market price per share
as of the tenth (10th) business day immediately preceding the conversion, or (y)
if Drinks Americas is not publicly traded, the price per share applicable to the
offering of Drinks Americas shares most recently consummated before the
conversion or, if no said offering has taken place, $1.00 per share.
(b) If at any point after the exercise of the conversion option set forth
in subsection (a) above, it is determined that Xxxxxx is ineligible or is
prohibited from retaining an interest in an alcoholic beverage licensee by any
relevant federal, state, local or any other regulatory agency, Xxxxxx hereby
agrees that Drinks Americas may divest him of his interest in Drinks Americas at
the then current fair market value of such interest as determined by a mutually
agreed upon independent accounting firm; provided, however, that in the event
such mutual agreement cannot be reached, Drinks Americas and Xxxxxx shall each
designate an accounting firm and together the two designated accounting firms
shall mutually designate a third independent accounting firm to determine the
then current fair market value of such interest.
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2.5 Relationship of the Parties. Xxxxxx shall for all purposes be an
independent contractor and not an agent, employee, or partner of Maxmillian,
Drinks Americas or any of its affiliates. Maxmillian and Drinks Americas are
interested only in the results to be achieved, and the conduct and control of
the work of Xxxxxx will lie solely with Xxxxxx. Xxxxxx shall not be considered
an employee of Maxmillian or Drinks Americas for any purpose. Xxxxxx shall not
be entitled to any benefits that Maxmillian or Drinks Americas normally provides
for their respective employees. Neither Maxmillian nor Drinks Americas is
required to use Xxxxxx exclusively with respect to such any services.
2.6 Duration. The provision of this Article II shall be in effect for a
period of seventy-eight (78) months from the date hereof, provide however that
Section 2.4(b) shall survive said period.
ARTICLE III
EXCLUSIVE REFERRAL PROVISIONS
3.1 Initial Exclusive Referral Period
(a) During the Initial Exclusive Referral Period, Xxxxxx shall exclusively
and properly Identify to Drinks Americas at least three Brands with respect to
which Drinks Americas will have an exclusive option to: (i) participate in the
ownership of each Brand with Xxxxxx, and (ii) obtain exclusive distribution
rights for each Brand (collectively, "Participate").
(b) In order to properly "Identify" a Brand, Xxxxxx shall provide to
Drinks Americas:
(i) a business plan including a projected balance sheet, pro forma profit
and loss statements, projected cash flow statements under which the new brand
would be owned, licensed, manufactured, distributed and promoted, budgets,
financial plans properly reflecting the capital participation of each of the
parties to the proposed venture;
(ii) all terms applicable to the exclusive distribution rights of the
proposed Brand, including without limitation the distributorship term, price and
volume obligations on the distributor, termination rights by the brand owners,
the distribution and licensing fees, and the distribution channels and
structure.
(iii) a proposed ownership structure of the proposed Brand and the limited
liability company under which said Brand would be owned or licensed between
Drinks Americas and Xxxxxx, wherein: (A) Drinks Americas would be able to
consolidate said Brand and limited liability company as part of its financial
statements and for tax reporting purposes, (B) Drinks Americas and Xxxxxx would
have equal rights (fifty percent (50%) each) to all distributions of cash and
other property and all allocations of liability, profit, gain, loss and other
tax items resulting from said Brand and limited liability company, but not from
said Brand's distribution, and (C) control of the venture would be allocated,
provided that such allocation will allow Drinks Americas to consolidate said
Brand and limited liability company as set forth in clause (A) above; and
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(iv) a letter of intent.
(c) Upon receipt of the material listed in subsection (b) above, Drinks
Americas shall have the option, exercisable for thirty (30) days from the date
of delivery of the proposal, to accept the proposal on substantially the terms
set forth therein. If Drinks Americas exercises the option, that transaction
must closes within forty-five (45) days from the date of the acceptance. If
Drinks Americas does not exercise its option, then the procedures set forth in
Section 3.5 hereof shall become effective.
3.2 Subsequent Exclusive Referral Period. In the event that Xxxxxx
properly Identifies at least three Brands pursuant to Section 3.1 above, and
provided the Initial Exclusive Referral Period is not terminated pursuant to
Section 3.4 below, then a Subsequent Exclusive Referral Period shall follow for
an additional eighteen (18) months during which Xxxxxx shall exclusively and
properly identify three additional Brands to Drinks Americas on the same terms
as set forth in Section 3.1 herein.
3.3 Extended Exclusive Referral Period. If during the Initial Exclusive
Referral Period or the Subsequent Exclusive Referral Period, Xxxxxx fails to
exclusively and properly Identify the proper number of Brands to Drinks
Americas, then the respective period shall be extended until such time as Xxxxxx
exclusively and properly Identifies three Brands for consideration by Drinks
Americas for each of said periods. This Extended Exclusive Referral Period shall
end only when the three Brands have been exclusively and properly Identified
pursuant to the terms set forth in Section 3.5(c).
3.4 Termination of Exclusive Referral Period. If during the Initial
Exclusive Referral Period Xxxxxx exclusively and properly Identifies three
Brands to Drinks Americas and Drinks Americas elects not to Participate in any
of the proposals, then the Initial Exclusive Referral Period shall automatically
terminate, provided that none of the three proposals are disqualified pursuant
to the terms of Section 3.5(c).
3.5 Third Party Offers.
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(a) During the Exclusive Referral Period and any Extended Exclusive
Referral Period, as applicable, Xxxxxx shall not negotiate or make any offers or
promises to enter into any venture with any third party relating to future
Brands involving their development, licensing, manufacturing, promotion,
distribution or any activity related thereto, without first complying with the
provisions set forth herein.
(b) If during the Exclusive Referral Period or any Extended Exclusive
Referral Period, Drinks Americas fails to exercise its option to Participate
within the period set forth in Section 3.1(c) with regard to a Brand properly
Identified by Xxxxxx, then Xxxxxx may offer the right to Participate to a third
party on Substantially Similar Terms as such Brand was proposed to Drinks
Americas, such terms to include those set forth in Section 3.1(b) above. If the
terms contained in the proposal to the third party are not Substantially Similar
terms to those contained in the proposal to Drinks Americas, Xxxxxx must first
present the proposal to Drinks Americas, following the procedures set forth in
Section 3.1. If at any time following a properly offered proposal to a third
party under this Section 3.5(b) and the consummation of the transaction with
such third party the terms of the proposal are altered such that they are no
long Substantially Similar Terms to those terms initially proposed to Drinks
Americas, Xxxxxx must follow the procedures set forth in Section 3.1 with regard
to such revised proposal prior to the consummation of the transaction with the
third party or such transaction with the third party will be deemed a violation
of Section 3.5(a).
(c) If neither Drinks Americas nor a third party chooses to accept the
terms of a proposed Brand's proposal, then, notwithstanding anything set forth
herein, such Brand shall not be counted as a properly Identified Brand as
required pursuant to this Section 3.
ARTICLE IV
MISCELLANEOUS
4.1 Amendment or Modification. This Consulting Agreement may not be
amended, modified or supplemented by the parties in any manner except by an
instrument in writing signed on behalf of each party by its duly authorized
officer or representative.
4.2 Waiver. Any of the terms or conditions set forth in this Consulting
Agreement may be waived at any time by the party entitled to the benefit
thereof; provided, however, that no such waiver shall be effective unless
contained in a written instrument signed by the waiving party. The failure of
any party to enforce at any time any of the provisions of this Consulting
Agreement shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Consulting Agreement or any part
thereof or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Consulting Agreement shall be held to
be a waiver of any other or subsequent breach.
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4.3 Assignability. This Consulting Agreement may be assigned by Drinks
Americas and/or Maxmillian without Xxxxxx'x prior consent; however, being that
the services to be performed by Xxxxxx are personal in nature, Xxxxxx may not
assign his obligation and agreements hereunder without the prior written consent
of the Companies.
4.5 Severability. If any provision of this Consulting Agreement shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
such determination shall not affect the remaining provisions of this Consulting
Agreement, all of which shall remain in full force and effect.
4.6 Governing Law. This Consulting Agreement shall be governed by, and be
construed in accordance with, the laws of the State of New York, excluding its
conflict of laws rules.
4.7 Choice of Law and Disputes. Any controversy, claim, dispute arising
out of, or in connection with, or relating to this Consulting Agreement, or the
breach or performance thereof, shall be submitted to arbitration in the City of
New York, pursuant to the rules then obtaining of the American Arbitration
Association. Any decision or award rendered by such arbitration shall be final
and binding upon the parties hereto and judgment may be entered in any Court
having authority to do so. Any decision or award by the arbitrator(s) rendered
pursuant to this Consulting Agreement shall be limited to the specific parties
involved and the specific issues determined therein. The decision and award of
the arbitrator(s) shall not be given any collateral estoppel effect with regard
to issues of fact or law determined or necessarily determined thereby.
4.7 Counterparts. This Consulting Agreement may be executed and endorsed
in one or more original or facsimile counterparts and each such facsimile
counterparts shall, for all purposes, be deemed to be an original, and all
counterparts shall together constitute one and the same instrument.
4.8 Notices. All notices, requests, demands or other communications under
or with respect to this Consulting Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by certified or
registered mail, return receipt requested, postage prepaid, a nationally
recognized overnight courier service or sent by facsimile transmission to the
parties at the respective addresses set forth below such party's name on
Schedule I attached hereto, or at such other address as shall be designated by a
party in a written notice to other parties.
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IN WITNESS WHEREOF the parties have executed this Consulting Agreement on
the day and year first above written.
DRINKS AMERICAS INC.
By: /s/ J. Xxxxxxx Xxxxx
----------------------------
Name: J. Xxxxxxx Xxxxx
Title: Chief Executive Officer
/s/ Xxxx X. Xxxxxx
XXXX X. XXXXXX
XXXXXXXXXX PARTNERS, LLC
By: /s/ J. Xxxxxxx Xxxxx
----------------------------
Name: J. Xxxxxxx Xxxxx
Title: Manager
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EXHIBIT A
Consulting Services
To bring celebrity status to new brands developed by the Companies and
existing brands with which the Companies, Old Whiskey and Y Sake have an
existing relationship and to leverage celebrity personalities in the marketing
of spirits, resulting in considerable economic benefit to the Companies, Old
Whiskey and Y Sake.
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SCHEDULE I
Notice
Name and Address
Drinks Americas Inc.
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxx Xxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx, Xxxxxxx & Xxxxx
The Xxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
Maxmillian Partners, LLC
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
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Schedule I
Address of Subscriber
Xxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxx 00000
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