Exhibit 10.8
NOTE: PORTIONS OF THIS EXHIBIT ARE THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST BY THE REGISTRANT TO THE SECURITIES AND EXCHANGE COMMISSION. SUCH
PORTIONS HAVE BEEN REDACTED AND ARE MARKED WITH A "[*]" IN PLACE OF THE
REDACTED LANGUAGE.
SUPPLY AGREEMENT
This Agreement is dated as of January 1, 2005, between
IRISH DISTILLERS LIMITED an Irish company having its registered office at Bow
Street Distillery, Smithfield, Dublin 7 (hereinafter called Irish Distillers);
CASTLE BRANDS SPIRITS GROUP LIMITED with its principal office at Xxxxxxxx Xxxxx,
Xxxxxxxxxx Xxxx, Xxxxxx 0 and CASTLE BRANDS (USA) CORP., a Delaware corporation
with its principal office at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000 (hereinafter collectively called CASTLE BRANDS); and
CASTLE BRANDS INC., a Delaware corporation with its principal office at 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (hereinafter called the
GUARANTOR).
WHEREAS, Irish Distillers is in the business of distilling and manufacturing
Irish whiskey;
WHEREAS, Castle Brands is in the business of selling and distributing various
Irish whiskeys and liquers;
WHEREAS, Castle Brands wishes to provide for a regular supply of Irish whiskey;
and
WHEREAS, Irish Distillers is willing to provide such supply of whiskey to Castle
Brands for certain brands specified in Exhibit 1.
In consideration of the mutual covenants, conditions and other consideration
hereinafter provided for, the receipt and sufficiency of which is irrevocably
acknowledged, IT IS AGREED as follows:
1. TERM
This Agreement shall have effect from 1 January 2005 and be for an initial
term of ten (10) calendar years commencing on the date hereof and shall
automatically renew thereafter for successive five (5) calendar year
renewal terms. Irish Distillers may terminate this Agreement either at the
end of its initial term or any time during subsequent renewal terms
provided that Irish Distillers gives Castle Brands not less than two (2)
calendar years' prior notice of such termination.
2. PROCEDURE FOR SUPPLYING WHISKEY SPIRITS
2.1. Castle Brands will notify Irish Distillers by March 31, 2005 and by
January 31 of each calendar year thereafter as to the quantity of
whiskey in litres of pure alcohol (LPAs) required during that year
("the Specified Amount") for each Brand. Unless agreed to by Irish
Distillers, these annual Specified Amounts will not exceed the
quantities opposite each Brand shown on Exhibit I. If the quantity of
whiskey depleted by Castle Brands throughout any given year ("the
Actual Amount") for any given Brand does not aggregate to the
Specified Amount for that Brand, Irish Distillers shall, at the end of
each year, invoice Castle Brands for
the shortfall between the Actual Amount and the Specified Amount. The
shortfall will be stored by Irish Distillers for collection by Castle
Brands and Castle Brands will be invoiced monthly for the storage
costs accrued at Irish Distillers' then current rates for such
storage.
2.2. Irish Distillers shall supply the whiskey for the Brands in accordance
with the samples agreed by the parties. In respect of Knappogue Single
Malt only, Irish Distillers agrees to make a reasonably sufficient
number of casks available for sampling by an expert designated by
Castle Brands to result in the selection of the Specified Amount. Any
incremental cost incurred by Irish Distillers in connection with
facilitating the selection process will be billed to, and paid by,
Castle Brands.
2.3. The price per LPA shall be as specified for each Brand listed in
Exhibit 2 and will be increased by the percentage increase in the
Irish Consumer Price Index for subsequent years or such other index as
the parties may agree in writing during the term of this Agreement.
2.4. BRANDS:- means those brands listed in Exhibit 1 and such other brand
names as shall be agreed by Irish Distillers from time to time.
2.5. ORDER TIME:- the lead time for having each whiskey consignment
available for collection shall be 45 days from receipt of order unless
otherwise agreed by Irish Distillers.
2.6. DELIVERY:- Castle Brands shall be responsible for all transport, tax
and other collection costs from Irish Distillers' properties in Fox
and Geese in Dublin, Midleton in Cork and Bushmills in Antrim.
3. PAYMENT
Castle Brands shall pay in full for each order within 30 days of the
invoice date which invoice date shall be the date of collection of the
whiskey consignment from Irish Distillers' properties.
4. TITLE
Irish Distillers represents and warrants that the whiskey purchased
hereunder shall, when the purchase price is paid in full by Castle Brands,
be free and clear of all liens, encumbrances, mortgages and charges. Title
to the various quantities of whiskey purchased hereunder shall irrevocably
vest in Castle Brands upon transfer of funds representing the applicable
purchase price, provided that Irish Distillers shall maintain and keep safe
the casks and whiskey so purchased until the collection date.
5. FORCE MAJEURE
Notwithstanding any other provision of this Agreement, neither party shall
be liable to the other for any default hereunder where the same is due to
causes beyond the control of
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the party in default, including without limitation, fire, flood, act of
God, strikes, lockouts, stoppage of work, trade disputes and any act or
omission outside the party's control, provided that any party seeking to
rely on this provision shall promptly give written notice to the other of
such cause.
6. USE/CONFIDENTIALITY
6.1. Castle Brands shall only sell whiskey supplied by Irish Distillers
pursuant to this Agreement as premium brand Irish whiskey under the
brand names previously approved in writing by Irish Distillers and
must use all whiskey supplied hereunder for approved brands only.
6.2. During the term of this Agreement and at any time up to two years
following termination, Irish Distillers and Castle Brands agree not to
disclose to any third party any information relating to this
Agreement, except insofar as may be necessary for the proper
performance of its obligations under this Agreement or to the extent
that such information is generally available to the public or
disclosure of such information is required by law or any court of
competent jurisdiction or as provided below, and will ensure that its
employees are aware of and comply with this clause.
6.3. Irish Distillers agrees that Castle Brands and its designees will have
the right to view the casks owned under clause 2.1 hereof by Castle
Brands upon reasonable notice and, so far as possible, said casks will
be stored together in an area reasonably accessible for viewing.
Castle Brands will pay Irish Distillers' usual customary storage
charges in respect of these casks.
7. TRADEMARKS
Castle Brands shall not use the name Irish Distillers in connection with
any marketing or promotion of the Brands or in any manner without the prior
written approval of Irish Distillers.
8. AGENCY
Nothing in this Agreement shall constitute either party as agent for the
other or a joint venture or partnership among the parties, or authorize
either party to pledge the other's credit or contract any liabilities on
the other party's behalf.
9. ASSIGNMENT
Neither Castle Brands nor Irish Distillers shall be entitled to assign,
subcontract, transfer, charge or otherwise dispose of any of its rights or
the performance of its obligations under this Agreement except with the
prior written consent of the other.
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10. NOTICES
10.1. Any notice required to be given hereunder shall be given in writing,
by personal delivery, by post or by facsimile transmission, and shall
be deemed to be served:
10.1.1. if given by post, 10 days after the said notice has been
posted by first class registered mail (or the equivalent thereof)
addressed to the other party at its address appearing herein or
at such other address as either party may from time to time
notify to the other as the address for the service of notice, and
10.1.2. if given by personal delivery or facsimile transmission at the
time of delivery or transmission.
10.2. All notices under this Agreement to Castle Brands shall be deemed to
be delivered, if delivered in accordance with clause 10.1, to Castle
Brands (USA) Corp.
11. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties in
connection with the subject matter of this Agreement and supersedes all
previous correspondence or negotiations between the parties relative
hereto.
12. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which when
executed and delivered shall constitute an original and all such
counterparts together constituting but one and the same instrument.
13. WAIVER OF BREACH
A waiver by any party of any breach by the other party hereto of any of the
terms, provisions or conditions of this Agreement or the acquiescence of
any party in any act (whether commission or omission) which but for the
acquiescence would be a breach as aforesaid shall not constitute a general
waiver of such term, provision or condition or an acquiescence to any
subsequent act contrary thereto.
14. VARIATION
No variation of this Agreement shall be valid unless it is in writing and
signed by or on behalf of each of the parties hereto.
15. SEVERABILITY
Each of the provisions of this Agreement is separate and severable and
enforceable accordingly and if at any time any provision is adjudged by any
court of competent
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jurisdiction to be void or unenforceable the validity, legality and
enforceability of the remaining provisions hereof and of that provision in
any other jurisdiction shall not in any way be affected or impaired
thereby.
16. BINDING AGREEMENT
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
17. FURTHER ASSURANCES
Each of the parties hereto agree to take any and all such further action
and to execute, acknowledge and deliver such instruments, documents and
other agreements as the other party may reasonably request to effectuate,
consummate or confirm the transactions contemplated hereby.
18. GOVERNING LAW
This Agreement shall be interpreted in accordance with the laws of Ireland.
19. JURISDICTION
It is irrevocably agreed that the Irish courts are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement or its performance and accordingly that any suit, action or
proceedings so arising may be brought in such courts. It is further agreed
that nothing in this clause will limit a party's right to take any suit,
action or proceedings ("Proceedings") against the other in the United
States or in any other court of competent jurisdiction if such party is
prevented by applicable law or procedure from initiating Proceedings in the
Irish courts, nor will the taking of Proceedings in one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.
20. COMPLIANCE WITH APPLICABLE LAWS
Each party hereby warrants that the supply of whiskey by Irish Distillers
pursuant to this Agreement and the terms of this Agreement do not breach
the laws of the country of its residence and hereby agrees that in the
event that any such breach does occur which causes any loss, damage, cost
or expense to the other party or the non-fulfillment of the terms of this
Agreement, that the party the laws of whose residence are breached hereby
shall be liable to and shall indemnify and keep indemnified the other party
for any loss, cost, damage or expense which it thereby incurs and hereby
further acknowledges that in the event that any term of this Agreement or
the performance of the terms thereof causes any such breach of such local
law that the other party shall have the right to terminate this Agreement
following notice of intention to do so and the failure of the parties to
agree to an amendment hereof to avoid such breach, consent to which
amendment not to be unreasonably withheld by either party.
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21. GUARANTEE
Notwithstanding any other provision including the termination of this
Agreement, the Guarantor guarantees the prompt performance of Castle Brands
of each and every obligation hereunder.
22. TERMINATION AND CONSEQUENCES OF TERMINATION
22.1. In addition to the provisions providing for termination of this
Agreement at the end of the initial term or during any renewal terms,
Irish Distillers will be entitled to terminate this Agreement by
giving not less than 30 days' written notice to Castle Brands if
22.1.1. there is at any time a material change in the control of
Castle Brands;
22.1.2. Castle Brands at any time challenges the validity of any
intellectual property right of Irish Distillers.
22.1.3. Castle Brands uses the whiskey supplied by Irish Distillers
other than for the sale of brands approved by Irish Distillers.
22.2. In addition to the provisions providing for termination of this
Agreement at the end of the initial term or during any renewal terms,
either Castle Brands or Irish Distillers will be entitled to terminate
this Agreement by giving not less than 30 days' written notice to the
other if:
22.2.1. the other party commits any material breach of any of the
provisions of this Agreement and, in the case of a breach capable
of remedy, fails to remedy the same within 30 days after receipt
of a written notice giving full particulars of the breach and
requiring it to be remedied;
22.2.2. a receiver, liquidator, administrator or analogous person is
appointed over any of the property or assets of the other party
or Guarantor;
22.2.3. the other party or Guarantor makes any voluntary arrangement
with its creditors or becomes subject to an administration order;
22.2.4. the other party or Guarantor goes into liquidation (except for
the purposes of amalgamation or reconstruction and in such manner
that the company resulting therefrom effectively agrees to be
bound by or assume the obligations imposed on that other party
under this Agreement);
22.2.5. any analogous procedure to any of the foregoing under the law
of any jurisdiction occurs in relation to the other party; or
22.2.6. the other party or the Guarantor ceases, or threatens to
cease, to carry on business.
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For the purposes of clause 22.1 above, a breach will be considered capable of
remedy if the party in breach can comply with the provision in question in all
respects other than as to the time of performance. The rights to terminate this
Agreement given by this Section 22 will be without prejudice to any other right
or remedy of either party in respect of the breach concerned (if any) or any
other breach.
22.3. Upon the termination of this Agreement for any reason:
22.3.1. Castle Brands may sell or dispose of all stocks of whiskey
which it has ordered hereunder prior to the date of termination;
22.3.2. At completion of 22.3.1 above, Castle Brands shall at its own
expense within 30 days send to Irish Distillers or otherwise
dispose of in accordance with the directions of Irish Distillers
all advertising, promotional or sales material relating
specifically to the whiskey supplied by Irish Distillers then in
the possession of Castle Brands or ordered by Castle Brands;
22.3.3. outstanding unpaid invoices rendered by Irish Distillers in
respect of the whiskey and liqueurs supplied will become
immediately payable by Castle Brands and invoices in respect of
whiskey ordered prior to termination but for which an invoice has
not been submitted will be payable immediately upon submission of
the invoice and delivery of the whiskey to Castle Brands; and
22.3.4. At completion of 22.3.1 above, Castle Brands shall cease to
promote, market or advertise the whiskey supplied or to make any
use of the trademarks or other intellectual property rights of
Irish Distillers; provided Castle Brands may make references to
the fact that it had previously purchased whiskey from Irish
Distillers.
Upon the termination of this Agreement, the provisions of Sections 3, 4, 5, 6,
18, 19, 20 and 21 shall survive.
IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
officer of Irish Distillers, Castle Brands and Castle Brands Inc the day and
year first herein written.
IRISH DISTILLERS LIMITED
By: /s/ Savinel Philippe
------------------------------------
Name: Savinel Philippe
Title: CEO
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SIGNED in the presence of:
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Witness
Production Director
CASTLE BRANDS INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and CEO
SIGNED in the presence of:
/s/ Xxxx X. Xxxxxxxxxx, III
-------------------------------------
Witness
Xxxx X. Xxxxxxxxxx, III
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attorney
CASTLE BRANDS SPIRITS GROUP LIMITED
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
SIGNED in the presence of:
/s/ Xxx X'Xxxxxx
-------------------------------------
Witness
Xxx X'Xxxxxx
Operations Manager
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CASTLE BRANDS (USA) CORP.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and CEO
SIGNED in the presence of:
/s/ Xxxx X. Xxxxxxxxxx, III
-------------------------------------
Witness
Xxxx X. Xxxxxxxxxx, III
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attorney
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EXHIBIT 1
Brands/Quantities
-----------------------------------------------------------
Clontarf Knappogue
----------------------------------- ---------------------
Year Black Label Reserve Single Malt Single Malt Premium
---- ----------- ------- ----------- ----------- -------
2005 * * * * *
2006 * * * * *
2007 * * * * *
2008 * * * * *
2009 * * * * *
2010 * * * * *
2011 * * * * *
2012 * * * * *
2013 * * * * *
2014 * * * * *
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EXHIBIT 2
PRICING
CLONTARF - YEAR 2005 EURO PER L.ALC
-------------------- --------------
Clontarf Black Label *
Clontarf Reserve *
Clontarf Malt *
KNAPPOGUE -- YEAR 2005 EURO PER L.ALC
---------------------- --------------
Knappogue Premium *
Knappogue Malt *
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