EXCLUSIVE AGENCY AGREEMENT
This AGREEMENT is made effective as of the 2nd day of May, 1997,
("Effective Date"), between the XXXXX BREWING COMPANY, INC., a corporation
existing under the laws of the State of Louisiana with its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx, 00000 ("BREWERY"), and
AMBREW USA, INC., a corporation existing under the laws of the State of
Louisiana with its principal place of business at Xxx Xxxxxxxx Xxxx. Xxxxx 0000,
Xxxxxxxx Xxxxxxxxx, 00000, ("Company"):
WHEREAS:
A. Brewery manufactures and sells beer.
B. Company is a selling and marketing agent of beverages.
C. Brewery and Company are willing to enter into this agreement on the
following terms and conditions.
WHEREBY IT IS AGREED as follows:
1. DEFINITIONS
A. "Territory" shall mean the United States of America excluding the State of
Louisiana until resolution of the Crown Beverage lawsuit, at which time an
agreed upon addendum shall be negotiated, if possible, depending on the
outcome of said lawsuit. Company shall have the right to export Products
under the terms and conditions as set forth in Exhibit B.
B. "Product" or "Products" shall mean Xxxxx Beer, Xxxxx Jazz Xxxxx Light Beer,
Xxxxx Blackened Voodoo Xxxxx, Xxxxx Crimson Voodoo Ale and Xxxxx Xxxxx
Moose. The Company shall have the right of first refusal to purchase any
new Xxxxx Products hereafter developed by Brewery, so long as Company is in
full compliance with all of the terms and provisions of this Agreement.
C. "Trademarks" shall mean the trademarks used on or in relation to the
Products whether registered or unregistered, which term shall include trade
names, patents, copyrights, designs and all other intellectual property
rights which may be applicable to the Product and which are vested in Xxxxx
Brewing Company, Inc. and as listed on Exhibit A attached hereto and such
other trademarks and trade names as the Brewery shall allow company to use
in connection with the distribution and marketing of the Products during
the term of this Agreement, provided, however, that Company shall not have
the right to produce or sell or the right to allow others to produce or
sell promotional materials using the Trademarks without Brewery's prior
written consent.
D. "Term" means the duration of this Agreement as set out in Section 14:
"TERM."
2. APPOINTMENT AND ACCEPTANCE AS EXCLUSIVE AGENT
A. Subject to the terms and conditions of this Agreement, Brewery hereby
appoints Company as Brewery's exclusive Agent to arrange for the marketing,
sale and resale of the Products including all current Dixie products
("Xxxxx", "Jazz", "Voodoo", and "White Moose") in the Territory on behalf
of Brewery. Company accepts such appointment on the terms herein. Company
acknowledges that it is aware of the fact the Brewery has previously
contracted with other wholesalers, distributors and retailers in various
states and territories. In the case of states within the Territory where
Brewery has sold or is currently selling the Products through approved
wholesalers, distributors, or retailers, Company agrees that such existing
wholesalers, distributors, or retailers may continue to purchase the
Brewery's Products until such time as their contracts expire or are
terminated by Brewery.
In the event any claim is made by any of Brewery's existing distributors,
wholesalers or retailers concerning the exercise by Company of any of the
rights granted by Brewery to Company under this Agreement, Company agrees
to cease and desist immediately from exercising such rights as are the
subject of such claim upon written notice from Brewery. In the event that
Company fails to cease and desist from exercising such rights, Company
agrees that it shall indemnify, defend and bold Brewery harmless against
any and all such claims. Brewery and Company shall mutually agree on any
appointments and/or terminations of wholesalers for Xxxxx Products.
B. Company will not arrange for the sale or shipment of the products to
locations outside the Territory without the prior written consent of
Brewery other than as agreed to in Exhibit B. During the Term of this
Agreement and provided that Company is in full compliance with all of its
obligations hereunder, Brewery will neither appoint another marketing agent
to arrange for marketing, sale or resale of the products in or for the
Territory nor sell the Products to any customer in the Territory without
the prior written consent of Company.
3. CERTAIN OBLIGATIONS OF COMPANY
A. Company agrees to establish, promote and arrange for the resale and
distribution of the products in accordance with all Federal, State and
local requirements and to obtain and pay for all necessary permits and
licenses in accordance with the laws of the United States of America and
any other state, local and governmental authorities and in accordance with
the terms and conditions of this Agreement. Company agrees to forward
copies of
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all such permits and licenses to Brewery within fourteen (14) days of
receipt.
B. Company further agrees to use its best efforts to market, advertise,
merchandise and promote the sale of the Products with the aim of
maintaining, developing and extending the market for the Products,
increasing the placement of orders and the sale of Products within the
Territory and will endeavor to meet the sales targets for orders of the
Products for each calendar year as set forth in Exhibit C, as well as
cooperate with Brewery to make reviews of the marketplace with respect to
sales of the Products.
C. The means of advertising and promoting the Products shall be in two stages,
(i) The initial 1997 Marketing Plan attached as Exhibit C hereto in which
Company agrees to acquire point of sale promotional materials for the
products with a total laid in cost to Company of at least US$42,500
including neon signs with a laid in cost to Company of at least US$22,500
as well as US$60,000 as additional post-offs/deals from Company to
distributors during the first year; and (ii) a further plan which shall be
mutually agreed upon as part of an annual national marketing plan to be
proposed to Brewery by Company in writing prior to November 1st of each
year for the following calendar year. Said plan will include expenditures
equal to or greater than those of the first year. Any and all means of
advertising, promoting, and marketing of Products used by Company must gain
prior written approval from Brewery on the form, content and substance of
all major promotions and campaigns.
D. During the Initial Term, Company agrees to maintain Brewery's sales of
Products in the Territory at the following minimum levels during the Term
of this Agreement:
(i) during the first twelve-month period following the effective
date of this Agreement, at least one hundred ninety two thousand (192,000)
cases of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of sixteen thousand (16,000) cases per
month;
(ii) during the second twelve-month period following the effective
date of this Agreement, at least two hundred ten thousand (210,000) cases
of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of seventeen thousand five hundred
(17,500) cases per month; and
(iii) during the third twelve-month period following the effective
date of this Agreement, at least two hundred thirty thousand (230,000)
cases of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of nineteen thousand one hundred sixty
seven (19,667) cases per month.
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In order to guarantee Company's performance of its marketing obligations,
Company agrees that it will itself purchase or pay for the foregoing minimum
quantities in the event that the Brewery's Wholesale customers do not make
sufficient purchases during a given period to meet these minimum quantity
levels.
Sales of draft beer are not to be included in calculations for the determination
of guaranteed minimum product quantities, but for the purposes of this
Agreement, sales of White Moose beer in cases of twenty-four (24) seven (7)
ounce glass containers shall be considered sales of beer in twenty-four (24)
twelve (12) ounce glass containers of Products in determining guaranteed minimum
product quantities.
E. Company shall monitor the performance of its wholesalers relating to the
adequacy of their facilities for handling and storage of the products and
shall provide to Brewery on a monthly basis a full accounting of all
resales of the Products during the previous month, including the names and
addresses of each purchaser from Company, customer profiles, and the
quantities of such purchases by each customer, including depletion reports
received from wholesalers.
F. Company shall establish, organize, and maintain sufficient inventory of
Products, a competent well-trained and experienced force of sales,
supervisory, and promotional personnel sufficient to supervise and promote
the sale of Brewery's Products in the Territory.
G. Company shall promptly investigate and immediately relay to Brewery all
complaints relating to products, and cooperate with Brewery in the prompt
and appropriate disposition of such complaints.
H. Company shall at its own expense, maintain products liability, general
liability, workmen's compensation, and such other types of insurance as
reasonably necessary for Company's business operations and properties used
in marketing and arranging the distribution of the products.
I. Company shall not represent itself as being Brewery's partner or joint
venturer, nor shall Company incur any liability on behalf of Brewery, in
any way pledge or propose to pledge Brewery's credit, or accept or make any
contract binding upon Brewery.
J. Notwithstanding any other provisions hereof, Company shall be solely
responsible for all expenses incurred by Company in performance of its
duties hereunder.
K . Should Company decide to contract brew/manufacture and/or package
beer/beverages in the United States during the term of this
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Agreement, Brewery shall be given the first opportunity for the manufacture
and/or packaging of such beer/beverage.
4. CERTAIN OBLIGATIONS OF BREWERY
A. Brewery represents and warrants that the Products shall be merchantable,
free from defects or adulteration, and shall comply with all applicable
government regulations and standards.
B. With respect to all Brewery's trademarks, service marks, formulas,
processes, recipes, customer lists, sales data, marketing plans, trade
secrets, reports, patents, patent applications, copyrights, trademarks and
licenses thereof or therein regarding the products, Brewery further
represents and warrants that Brewery owns the same or has the right,
subject to the foregoing, to license, sell, sub-license and otherwise use
the same without restriction. Brewery hereby agrees to allow Company a
limited non-assignable and nontransferable right to use the Brewery's
trademarks and trade names solely in advertising and promoting the sale and
marketing of the products. Brewery shall fully indemnify and hold harmless
Company for all claims made against Company for its authorized use of the
Brewery Trademarks.
C. Brewery recognizes that a principal purpose of this Agreement is to
increase the sale of Brewery's Products through Brewery's distribution
system in the United States. To that end, Brewery shall use its best
efforts to accept and fill promptly orders for the products as they shall
be submitted by Company or its authorized customers and will take all steps
necessary to maintain and improve upon the quality of its response to
increased demand for such products as a result of Company's efforts. In the
event that Brewery is unable to fulfil its minimum production obligations,
then the Guarantee shall be adjusted accordingly.
D. Brewery shall, at its own expense, maintain in full force and effect
product liability insurance in an amount reasonably necessary for Brewery's
operations and insuring against all liabilities arising out of the
production, manufacture or consumption of products covered by this
agreement.
E. Brewery shall: 1) sell the Products to Company at the prices set forth in
Exhibit D, or as otherwise permitted by this agreement; 2) remit shipments
to Company's designated freight forwarder responsible for consolidation of
shipments; 3) forward all bills of lading and other papers in a timely
manner; 4) ship Company and authorized customers the Products set forth on
purchase orders submitted to Brewery; 5) comply with product labeling
provisions of all applicable national, state and local laws, rules and
regulations and label the Products accordingly; 6) supply products in new
glass bottles; 7) unless otherwise agreed, supply Products containing
pasteurized contents; 8) supply all draft
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Products in Xxxxxx kegs, and; 9) notify Company promptly of any
interruption in Brewery's source of supply or production which may affect
its ability to perform under this agreement.
F. Brewery shall not represent itself as being Company's partner or joint
venturer, nor shall Brewery incur any liability on behalf of Company, in
any way pledge or propose to pledge Company's credit, or accept or make any
contract binding upon Company.
5. INDEMNIFICATION
A. Brewery represents and warrants that all Products sold shall be
merchantable and salable. Brewery shall indemnify and defend the Company,
its officers, directors and employees, against all claims, demands, losses,
liabilities, damages, costs and expenses resulting from:
1) any inaccuracy in or breach of the foregoing representation and
warranty;
2) any breach or inaccuracy in any representation, warranty, covenant or
agreement made by Brewery in this agreement;
3) any products liability or other claim by third parties arising from
defective products sold to Company by Brewery.
Indemnification under Subparagraph 5(A) will not extend to claims for which
Company shall indemnify Brewery under Subparagraph 5(B).
B. Company shall indemnify Brewery, its affiliates, officers, directors and
employees against all claims, demands, losses, liabilities, damages, costs,
and expenses resulting from Company's acts or omissions in performing under
this Agreement resulting from:
1) Company's marketing, distribution and advertising activities;
2) any breach or inaccuracy in any representation, warranty, covenant or
agreement made by Company in this Agreement.
Indemnification under Subparagraph 5(B) will not extend to claims for which
Brewery shall indemnify Company under Subparagraph 5(A).
C . If either party intends to seek indemnification under this Paragraph 5,
that party shall promptly notify the other party of any claim within five
(5) days of its receipt. The indemnifying party shall conduct, at its
expense, the settlement or defense of the claim, but:
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1) the indemnifying party shall permit the other party to participate in
any settlement or defense through that party's counsel at that party's expense,
and
2) the other party may pay or settle any claim prior to settlement, but it
will automatically waive all rights to indemnification for that claim.
If the indemnifying party does not notify the other party within a
reasonable period after its receipt of a claim that it intends to defend the
claim (unless a shorter period is required by law), or gives such notice but
fails to undertake the defense promptly and in good faith, the other party may
take all actions, in its reasonable judgment, at the expense of the indemnifying
party without waiving its rights to indemnity.
D. The indemnifying party shall promptly reimburse the other party for the
full amount of any loss resulting from the claim and all related expenses
incurred by the indemnified party within the limits of paragraph 5.
E. The indemnification and hold harmless provisions of this Agreement will
survive termination or expiration of this Agreement for a period the longer
of two (2) years or the expiration of any statute of limitations on the
claim for which indemnity is sought.
6. TERMS OF SALE TO COMPANY
A. Company shall obtain orders from Brewery's existing distributors and others
and Company shall, in turn, place orders with Brewery for the Products in
accordance with the cost price list set forth on Exhibit C attached hereto,
as said list may be amended pursuant to the terms of this Agreement from
time to time. Company shall give Brewery at least four (4) weeks notice of
each order for Products. Orders shall be made on the form of purchase order
attached as Exhibit E hereto and be accompanied by a copy of the
distributor's purchase order.
B. Brewery shall from time to time issue a Product Cost Price List for the
Products, F.O.B. Brewery's plant. Brewery shall sell and Company shall
purchase Products at the F.O.B. Brewery prices listed therein. Prices
shall include the entire cost of packing. Prices for the Products in effect
as of the date of this Agreement are set forth in Exhibit C attached
hereto. Brewery may, from time to time and upon sixty (60) days' written
notice to Company, increase prices to Company for the Products. Said
increases not to occur more often than every six months. Should Brewery
adjust prices to Company during the term of this agreement, Company and
Brewery shall negotiate in good faith to adjust the Guarantees if deemed
necessary by Company. Company shall pay for pallet deposit at prices set
forth on Exhibit D.
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7. SHIPMENTS
A. Delivery, shipment and other terms with respect to the products shall be in
accordance with the terms and conditions of the purchase orders issued by
Company. Brewery agrees that it will fulfill Company's purchase orders for
Products in a timely manner as set forth in this Agreement.
B. Delivery to Company shall be deemed to occur upon delivery of the products
into a freight container at Brewery's loading dock. Company or its
authorized customers shall be responsible for the availability of a carrier
FOB Dixie warehouse on the date of shipment, shall arrange all
transportation FOB Dixie warehouse and shall assume all risk of loss or
damage to the Products purchased by it from Brewery upon delivery to the
carrier.
C. Kegs. All kegs and other bulk containers ("Kegs") in which Products are
shipped shall be and remain the property of the Brewery. Company shall
arrange and pay for all empty Kegs to be promptly returned to Brewery in
substantially the same condition as when Company received such Kegs.
Brewery shall establish and maintain records of receipt of empty Kegs from
Company, and shall provide regular statements reflecting such records to
Company. Company shall reimburse Brewery the sum of $15.00 for each Keg
which is not returned to Brewery within 180 days of shipment.
8. PAYMENT TERMS
All payments for Products made by Company to Brewery shall be by electronic
funds transfer in United States dollars, payable at fourteen (14) days from date
of Xxxx of Lading. Brewery shall provide Company with an invoice, a Xxxx of
Lading, and any additional documents reasonably requested by Company. It is
understood that the Xxxx of Lading date will be the date the Company's
designated freight forwarder picks up the Products FOB Dixie warehouse at 0000
Xxxxxx Xxxxxx, Xxx Xxxxxxx, XX. If Company places any orders prior to a price
increase taking effect, for shipment after the price increase takes effect, the
Xxxx of Lading date, for purposes of starting the fourteen (14) day payment
period, will be no longer than fourteen days from the date the order is placed,
regardless of the actual date the Products are shipped if Company wishes to
receive the pre-increase prices. As security for Company's obligations to
Brewery to pay for Products Company orders under this Agreement, Company hereby
agrees to cause an irrevocable three-year letter of credit (LC) to be issued in
the amount of US$150,000 for the first fifteen (15) months following the
Effective Date and in the amount of US $200,000 for months sixteen (16) through
thirty-six (36) following the Effective Date, such LC to be issued by Hibernia
National Bank, or other mutually
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agreed financial institution, as issuer, and with Brewery as sole beneficiary.
Said LC shall provide that Brewery shall be entitled to draw on the LC at any
time during the term of this Agreement if any one or more of the following
conditions occurs:
(a) If Company or third parties have not purchased from Brewery or paid
Brewery for at least one hundred ninety-two thousand (192,000) cases of Products
consisting of twenty-four (24) twelve (12) ounce glass containers of Products
for resale in the Territory by the end of one year from the Effective Date;
(b) If Company or third parties have not purchased from Brewery or paid
Brewery for at least two hundred ten thousand (210,000) cases of Products
consisting of twenty-four (24) twelve (12) ounce glass containers of Products
for resale in the territory during the second twelve-month period following the
Effective Date;
(c) If Company or third parties have not purchased from Brewery or paid
Brewery for at least two hundred thirty thousand (230,000) cases of Products
consisting of twenty-four (24) twelve (12) ounce glass containers of Products
for resale in the territory during the third twelve-month period following the
Effective Date;
(d) If Company or third parties have not purchased from Brewery or paid
Brewery for at least sixteen thousand (16,000) cases of Products consisting of
twenty-four (24) twelve (12) ounce glass containers of Products for resale in
the Territory during any one calendar month ("Monthly Minimum") during the first
twelve-month period following the Effective Date;
(e) If Company or third parties have not purchased from Brewery or paid
Brewery for at least seventeen thousand five hundred (17,500) cases of Products
consisting of twenty-four (24) twelve (12) ounce glass containers of Products
for resale in the Territory during any one calendar month ("Monthly Minimum")
during the second twelve-month period following the Effective Date;
(f) If Company or third parties have not purchased from Brewery or paid
Brewery for at least nineteen thousand one hundred sixty seven (19,167) cases of
Products consisting of twenty-four (24) twelve (12) ounce glass containers of
Products for resale in the Territory during any one calendar month ("Monthly
Minimum") during the third twelve-month period following the Effective Date; or
(g) If Company fails to make timely payment for any Products ordered from
Brewery during the term of this Agreement.
Brewery shall be entitled to draw on the LC such amounts as are necessary,
according to Brewery's calculations, to remedy any shortfall in purchases or
payments. The LC shall provide that Brewery, in order to remedy any shortfall
in payments, may draw up
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to the full amount of the LC at any time, upon two days written notice to
Company, and from time to time, regardless of the amount(s) previously drawn on
the LC by Brewery. Brewery shall be entitled to draw on the LC by issuing a
sight draft to the issuing bank, upon above mentioned two days written notice to
Company, to remedy the shortfall by purchasing any required minimum amount of
Products or paying for products ordered but not yet paid for. The proceeds of
draws on the LC shall be applied by Brewery as payment for Products and credited
to Company's account with Brewery. If Company disputes the amount of a draw on
the LC, Brewery shall provide to Company its calculations of the amount of the
draw within seven days of request. Brewery shall refund to Company any amount
which the parties agree should not have been drawn on the LC.
Company's failure to establish or to maintain the LC in full force and
effect as required by this Agreement shall be deemed a material breach of this
Agreement by Company.
Company shall pay Brewery the average price per case invoiced to Company
during the year times the difference between the number of cases purchased and
paid for and the Minimum Monthly Purchase Guarantee for the month. If the
Company fails to pay Brewery this amount within five (5) business days, after
written notice from Brewery, Brewery shall be entitled to draw on the entire
amount then due.
Company shall be responsible for invoicing customers and shall provide to
Brewery by the end of the next business day, copies of all invoices it issues
for sales of the Products, as well as copies of any invoice, credit memorandum,
xxxx of lading or other documents reflecting the amount and terms of any
transaction involving Products that Company sells or delivers for promotional
purposes, whether by way of discounts, "deals", donations, depletions or
other terms pertaining to marketing or promotion of the Products.
9. MONTHLY MINIMUM AND PREPAYMENT
In order to assure that Brewery receives a minimum guaranteed level of
revenues, for twelve (12) months from the Effective Date, Company agrees to
purchase from Brewery and pay Brewery for each month a minimum of sixteen
thousand (16,000) cases of Products; for months thirteen (13) through twenty-
four (24) from the Effective Date, Company agrees to purchase from Brewery and
pay Brewery for each month a minimum of seventeen thousand five hundred (17,500)
cases of Products, and; for months twenty-five (25) through thirty-six (36) from
the Effective Date, Company agrees to purchase from Brewery and pay Brewery for
each month a minimum of nineteen thousand one hundred sixty seven (19,167) cases
of Products. In any of the first twelve months that Company purchases less than
sixteen thousand (16,000) cases of Products, Company agrees to pay
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Brewery within three (3) business days of the end of the month, the difference
between sixteen thousand (16,000) cases of Products and the actual number of
cases purchased by Company during the month times the month's average invoiced
price per case. In any of the thirteenth through twenty fourth months that
Company purchases less than seventeen thousand five hundred (17,500) cases of
Products Company agrees to pay Brewery within five (5) business days of the end
of the month the difference between seventeen thousand five hundred (17,500)
cases of products and the actual number of cases purchased by Company during the
month times the month's average invoiced price per case. In any of the twenty-
fifth through thirty-sixth months that Company purchases less than nineteen
thousand one hundred sixty seven (19,167) cases of Products, Company agrees to
pay Brewery within five (5) business days of the end of the month, the
difference between nineteen thousand one hundred sixty seven (19,167) cases of
Products and the actual number of cases purchased by Company during the month
times the month's average invoiced price per case. Any such payments made as
provided above shall be deemed "Monthly Shortfall Payment". Any and all Monthly
Shortfall Payments may be credited by Company against any future invoices from
Brewery for Products purchased by Company that exceed the Minimum Monthly
Guarantee of cases in any month.
In each month of the first fifteen (15) months from the Effective Date, Company
agrees to pay to Brewery US$50,000 at the beginning of each month ("Monthly Pre-
Payment"). Brewery will credit the Monthly Pre-payment against its invoices for
Products purchased by Company during that month and against any Monthly
Shortfall Payments. Payment by Company for Products purchased in a single month
in excess of US$50,000 will be made as provided in Paragraph 8 above.
As used in this Paragraph 9, the term "month" shall mean a calendar month and
the term "case(s)" shall mean cases of Products consisting of twenty-four (24)
twelve (12) ounce glass containers of Products for resale in the Territory.
If Brewery is required to institute legal proceedings to collect any Monthly
Shortfall Payment or any Monthly Pre-payment, Company shall be responsible for
Brewery's reasonable attorney's fees but no less than twenty percent (20%) of
the amount sought to be collected.
10. INTEREST FREE LOAN
On the Effective Date, Company will make and fund an interest free loan
to Brewery of US$100,000. The loan will be repaid to Company by Brewery by the
Company reducing each invoice payment to Brewery by US$.37.5 per case invoiced
until the loan is repaid in full. After eight months, Company will consider
other terms if necessary at the request of Brewery. If Company defaults in the
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performance of any of Company's obligations under this agreement, then Brewery
shall be relieved of any obligations to repay the loan. If this Agreement is
terminated by Brewery for any reason, the unpaid balance of the loan becomes
immediately due and payable and if Brewery then fails to repay the loan balance
within thirty (30) days, the unpaid balance shall bear interest at the rate of
1.5% per month until paid. Additionally, if Company is required to refer the
loan to attorneys for collection, Brewery shall be responsible for all
attorney's fees but no less than twenty percent (20%) of the amount sought to be
collected.
11. NEW GLASS BOTTLES GUARANTEE
If required by the vendor(s) of new glass bottles for the Products, Company
agrees to provide a guarantee of payment of vendor's invoices to Supplier for
new glass bottles in the form of a letter of credit (LC), or other agreed
instrument, not to exceed US$50,000 at any time. If the vendor(s) draw on the
guarantee to fund invoices to Brewery, then Brewery agrees that the Company
shall receive credit against any unpaid invoices from Brewery then existing and
thereafter until all amounts drawn down by vendors are repaid to Company.
12. KEG EQUIPMENT
Company agrees to sell to Brewery, and have installed at Brewery's facility
at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, XX, equipment for the pasteurization and
filling of products into kegs ("Keg Equipment") as reflected on Exhibit F.
Brewery shall pay Company for the Keg Equipment in installments of US$6.00 per
keg of Products invoiced by Brewery to Company, starting one year after the
Effective Date, to be credited against Brewery's invoices. Keg Equipment shall
remain the property of Company until repaid in full by Brewery.
13. TRADEMARKS
E. Company will not use Brewery's trademarks, trade names, service marks or
trade dress except as approved by Brewery. For the purpose of advertising
and selling Products, Company recognizes the validity of Brewery's
trademarks, service marks and trade names, and acknowledges that Brewery
has the sole and exclusive right to said trademarks, service marks, and
trade names, and further, that such trademarks, service marks, and trade
names are the sole and exclusive property of Brewery. Company gains no
proprietary rights in such trademarks, service marks, or trade names under
this Agreement. Company shall not infringe upon, dilute or harm the rights
of Brewery and its trademarks, service marks, and trade names. Company
shall not use any marks or names
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other than the authorized Brewery trademarks and trade names with reference
to the Products. Company shall, in connection with the use of such
trademarks or trade names use "R" or "TM," or such other approved
designation to protect such marks and/or names.
B. Company shall promptly notify Brewery of any use by a third party of the
Trademarks or any use by a third party of similar marks which may
constitute and infringement or passing off of Brewery's marks. In its sole
discretion, Brewery may institute any proceedings against such third
parties and Company will cooperate with Brewery in any infringement action
against third parties. All expenses of any infringement action shall be
borne by Brewery and all damages or recoveries in such actions shall accrue
to Brewery.
C. Upon termination of this Agreement for any reason Company shall immediately
cease the use of any of Brewery's trademarks, service marks, and trade
names, and shall return to Brewery all documents or materials in its
possession bearing Brewery's trademarks, service marks, and/or trade names.
Brewery shall be authorized to cancel any registration of Company as a user
of such trademarks, service marks or trade names. The obligations of this
Section shall survive the termination of this Agreement.
14. TERM
Except in the case of earlier termination in accordance with the provisions
of this Agreement, the initial term of this Agreement shall be for a period of
three (3) years from the Effective Date ("Initial Term"). By the mutual
agreement of Brewery and Company, this Agreement may be renewed for three (3)
additional five-year periods ("Each Renewal period"). As a condition of renewal,
Company shall be required to demonstrate that it has complied with all of its
obligations under this Agreement prior to the date of a renewal and, in
particular, that Company has satisfied its minimum purchase obligations during
the initial Term. Company shall advise Brewery and Brewery shall advise Company
in writing at least six (6) months prior to the end of the initial Term of
Company's desire to renew this Agreement. In the event of renewal, Brewery and
Company shall agree upon sales goals for the five (5) year renewal period and
any successive five (5) year period thereafter.
15. TERMINATION
Notwithstanding any of the other terms of this Agreement, either party may
terminate this Agreement immediately by giving notice to the other party if:
A. If either (i) a material breach of a party's payment obligations under this
Agreement shall occur (without benefit of
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cure) or (ii) a material breach of a party's non-monetary payment
obligations under this Agreement shall occur and continues unremedied for a
period of thirty (30) days following such party's receipt of a written
notice of the nature of the breach, then the aggrieved party may terminate
this Agreement;
B. The other party applies for or consents to the appointment of a receiver,
trustee or liquidator for such party or for all or a substantial part of
such party's property;
C. The other party makes a general assignment for the benefit of creditors or
becomes insolvent;
D. The other party discontinues its business or the Company ceases to sell or
distribute the Product;
E. Either party is unable to perform its material obligations under this
agreement due to any newly enacted law, rule, or regulation of any
governmental or administrative agency.
F. Company fails to purchase or pay for from Brewery the following minimum
amounts of Products for resale in the Territory during the Initial Term of
this Agreement:
(i) during the first twelve-month period following the effective
date of this Agreement, at least one hundred ninety two thousand (192,000)
cases of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of sixteen thousand (16,000) cases per
month;
(ii) during the second twelve-month period following the effective
date of this Agreement, at least two hundred ten thousand (210,000) cases
of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of seventeen thousand five hundred
(17,500) per month; or
(iii) during the third twelve-month period following the effective
date of this Agreement, at least two hundred thirty thousand (230,000)
cases of Product consisting of twenty-four (24) twelve (12) ounce glass
containers of Products at the rate of nineteen thousand one hundred sixty
seven (19,167) cases per month.
Sales of draft beer are not to be included in calculations for the determination
of guaranteed minimum product quantities, but for the purposes of this Agreement
sales of White Moose beer in cases of twenty-four (24) seven (7) ounce glass
containers shall be considered sales of beer in twenty-four (24) twelve (12)
ounce glass containers of Products in determining guaranteed minimum product
quantities.
-14-
G. Company sells and/or distributes products to any person other than
authorized distributors; or Brewery sells Products to anyone other than
Company in accordance with this Agreement.
H. The other party fails to obtain timely, any license necessary for such
party to manufacture, sell, or distribute, as the case may be, Products
under this Agreement, or if such license expires, or is revoked or has been
suspended for more than thirty (30) days and the party has not cured its
failure within a period of ninety (90) days following written notice to
that party from the licensing authority of such revocation, suspension or
termination.
I. Any party assigns or subcontracts an interest in all or any part of this
Agreement except as expressly permitted in this agreement without the prior
written consent of the other party.
J. Upon the effective date of termination or expiration of this Agreement:
1) all rights, licenses and privileges granted in the Agreement will
cease, and Company shall immediately discontinue its sale of the Products;
2) each party shall return to the other party, all written documents and
materials constituting and containing any confidential information belonging
to the other party, and shall not make or retain any copies of such documents
and materials;
3) Company shall, at its expense, immediately discontinue all use or
display of trademarks or trade names relating to products;
4) Company shall deliver to Brewery the name and addresses of Company's
customers for Products, and shall turn over to Brewery all sales negotiations
with customers then in progress and all unfilled orders from Company to Brewery
shall be deemed terminated without further liability on the part of either
party; and
5) Brewery shall repurchase from Company any or all Products in Company's
inventory at the laid-in cost to Company (excluding, specifically, any handling
charges) for such Products less any and all amounts then owing, for whatever
reason, from Company to Brewery.
6) Brewery agrees that on termination or expiration of this Agreement,
that it shall buy back from Company, at Company's laid in cost less any
applicable credits, any equipment or unused promotional materials purchased by
Company on behalf of Brewery including but not limited to draft machines,
fillers, pasteurizers, sterilizers, and Point of Sale materials.
-15-
7) Brewery and Company shall, following the receipt of a notice of
termination or expiration, or during the six (6) month period preceding the
expiration of the term of this agreement then in effect, maintain its general
pricing and sales policies and shall cooperate with each other in good faith to
take whatever action is reasonably necessary to wind up this agreement in an
orderly fashion.
Acceptance of orders by Brewery after notice of termination is given
shall constitute separate transactions, and shall not operate as a renewal or
revival of this Agreement or as a waiver of such termination. The obligations
of this Section shall survive the termination of this Agreement.
16. MISCELLANEOUS
A. CONFIDENTIALITY: Neither party, nor its employees, agents or affiliates,
shall disclose or make accessible to anyone, or make use of it for its own
benefit (other than as is consistent with the terms of this agreement),
either during or after the term of this Agreement, divulge any confidential
information of the other party. Upon termination of this Agreement, each
party and its agents or affiliates shall return to the other party all
confidential information.
F. FORCE MAJEURE: The parties shall not be responsible or liable for failure
to perform any part of this Agreement or for any delay in the performance
of any part of this Agreement, directly or indirectly resulting from or
contributed to by any cause beyond its reasonable control, including, but
not limited to, force majeure, unavailability of raw materials or packaging
materials, strikes, or the laws, regulations, acts or failure to act of any
governmental authority. Nothing contained in this Section shall constitute
a release of any representation or warranty made by a party under this
Agreement. In the event of the occurrence of an event of force majeure, the
party claiming the benefit of this subsection shall give prompt notice to
the other and also shall use all reasonable efforts to alleviate or
minimize the detrimental consequences of the event. An event of force
majeure shall not excuse the obligation to make payments for goods which
are delivered or tendered for delivery hereunder.
G. INDEPENDENT CONTRACTORS/NOT PARTNERS: The relationship of Company and
Brewery shall be that of independent contractors and nothing contained in
this Agreement shall be construed to imply a partnership, joint venture or
principal and agent relationship between Company and Brewery.
-16-
H. GOVERNING LAW / ARBITRATION AND CONSENT TO JURISDICTION:
Any controversy or claim arising out of or relation to this Agreement or
the breach thereof shall be settled by binding arbitration in accordance with
the rules of commercial arbitration of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Such binding arbitration shall occur within
New Orleans, Louisiana, unless the parties mutually agree to have such
proceedings in some other locale.
I. NOTICES: All notices, directions, or other instruments required or
permitted to be given or made under this Agreement shall be in writing and
may be effected by a) personal delivery, and deemed to have been given or
made at the time of delivery; b) registered or certified mail or courier
and shall be deemed communicated three (3) days from the mailing thereof to
the other party at the address set forth below or to such other address as
either party may specify in a written notice to other party:
To Company: AmBrew USA, Inc.
Xxx Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxxxx
Xxxxx Xxx
To Brewery: Xxxxx Brewing Company, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
J. ATTORNEY'S FEES: In any dispute or controversy in contract or tort or
otherwise arising in any way under this Agreement or the relationship of
such parties created by the Agreement, and/or where any provision of this
Agreement is validly asserted as a defense, the successful party shall be
entitled to recover costs (including reasonable attorneys' fees) in
addition to any other available remedy. The terms of this paragraph shall
survive the termination of this Agreement.
K. SEVERABILITY: If any term, provision, covenant or condition of this
Agreement or the application thereof is held to be invalid, void, or
unenforceable, the remainder of the provisions shall remain in full force
and effect and shall in no way be affected, impaired, or invalidated
thereby, and each remaining term, provision, covenant or condition of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
-17-
L. ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement between
the parties hereto relating to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understanding, negotiations and
discussions, whether oral or written, of parties and there are no general
or specific warranties, representations or other agreements by or among the
parties in connection with the entering into of this Agreement or the
subject matter hereof except as specifically set forth herein.
M. FURTHER ASSISTANCE: The parties hereto and each of them do hereby covenant
and agree to do such things and execute such further documents, agreements
and assurances as may be necessary or advisable from time to time in order
to carry out the terms and conditions of this Agreement in accordance with
their true intent.
N. AMENDMENTS: This agreement may be altered or amended in any of its
provisions when any such changes are reduced to writing and signed by the
parties hereto but not otherwise.
0. WAIVER: Failure on the part of either party to complain of any act or
failure to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a
waiver by such party of its rights hereunder unless specified herein.
P. HEADINGS: The headings in this Agreement have been inserted for reference
and as a matter of convenience only and in no way define, limit or enlarge
the scope or meaning of this Agreement or any provision hereof.
Q. ASSIGNMENT: No assignment of this Agreement or any right accruing hereunder
shall be made, in whole or in part, by either party without the prior
written consent of the other.
R. COUNTERPARTS: This Agreement may be signed in any number of counterparts,
each of which shall be original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
S. THIRD PARTY BENEFICIARIES: The parties to this Agreement do not intend
(either expressly or by implication) to confer any rights and/or benefits
upon any third parties by virtue of this Agreement and/or any rights,
duties, and/or obligations arising thereunder.
T. SUCCESSORS AND ASSIGNS: The terms of this Agreement are binding upon
Brewery and Company as well as, to the extent allowed by this Agreement,
each of their respective successors, heirs and assigns.
Q. The parties agree that this Agreement shall not be construed as a wholesale
distribution arrangement, but as a marketing agency
-18-
relationship. The purposes of requiring Company to purchase Products from
Brewery are to assure a level stream of revenues to Brewery, to provide a
minimum guaranteed level of revenues to Brewery, and to facilitate the
resale of Products to Brewery's existing wholesalers through the use of
Company as a marketing agent of Brewery. Nothing in this Agreement shall in
any way confer upon Company any exclusive or non-exclusive right as a
wholesaler or distributor under the laws of any state, nor shall this
Agreement in any way affect, impair or modify the rights of the Brewery's
existing wholesalers and distributors under any agreement or letter of
appointment to which Brewery is a party. Nothing in this Agreement shall be
construed to impose on Brewery any obligation as a supplier of beer or malt
beverages under any state law regulating the business relations between
suppliers and wholesalers of beer or malt beverages, including without
limitation such state laws which impose notice, good faith, or good cause
or similar requirements for termination, amendment, modification,
discontinuance, forced resignation, cancellation, or non-renewal of
wholesaler agreements.
R. American Craft Brewing International, Ltd. hereby intervenes into this
Agreement and expressly guarantees the Company's performance of all of
Company's obligations to Brewery under this Agreement.
S. Notwithstanding anything herein to the contrary, if Brewery receives a bona
fide offer to purchase any or all of its assets, and Brewery desires to
sell such assets pursuant to such offer, then it shall notify Company and
shall provide Company with a copy of such offer, the identity of the
offeror (including such offeror's beneficial owners and such other
information as Company may request, and as is readily available to Brewery,
to substantiate the offeror's ability to consummate the proposed
transaction. Failure of Brewery to promptly provide such information
results in the tolling of the thirty day period referred to in the next
sentence until such reasonably requested information is provided to
Company. For a period of thirty days following the giving of such notice
referenced above, Company has the option to acquire any or all of the
Brewery assets on the same terms and conditions as set forth in the offer.
If Brewery desires to sell the brewery, Brewery shall first notify Company.
-19-
IN WITNESS WHEREOF the parties have executed this Agreement through their duly
authorized officers, effective on the day and year first above written.
ATTEST: XXXXX BREWING COMPANY, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxx X. Xxxxx
___________________________ ______________________________
Secretary Its: Chairman
ATTEST: AMBREW USA, INC.
/s/ Xxxxx X. Xxx By: /s/ Xxxxx X. Xxx
___________________________ ______________________________
Secretary Its: President
By: /s/ Xxxxxxx Xxxxxxxxx
______________________________
Its: Vice-President
ATTEST: AMERICAN CRAFT BREWING INTL., LTD.
/s/ Xxxxx X. Xxx By: /s/ Xxxxx X. Xxx
___________________________ ______________________________
Secretary Its: Executive Vice President
-20-
EXHIBIT A
Xxxxx Beer
Xxxxx Xxxxx Light Beer
Xxxxx Blackened Voodoo Lager Beer
Xxxxx Jazz Xxxxx Light
Xxxxx Crimson Voodoo Ale
Xxxxx Xxxxx Moose
-21-
