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Exhibit 10.10
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.
AMENDED AND RESTATED
WORLDWIDE DISTRIBUTION AGREEMENT
AGREEMENT made as of the 16th day of April, 2001 (the "Agreement"),
by
and between Great Spirits Company LLC (hereinafter referred to as
"Great
Spirits"), a Delaware limited liability company having its
principal place of
business at 1331 Lamar, Suite 1125, Houston, Texas 77010, USA, and
Gaelic
Heritage Corporation Limited (hereinafter referred to as the
"Supplier"), an
Irish corporation having its principal place of business at
Institute Road,
Bailieboro, Co. Cavan, Republic of Ireland.
1. Definitions:
when used in this Agreement:
(a)
"Products" shall mean all items sold under the name "Celtic
Crossing"
including the current liqueur and any items subsequently added
pursuant to
Paragraph 10(b) below.
(b)
"Old Territory" shall mean the United States of America,
Canada,
Mexico, Puerto Rico, the Caribbean, including all islands situated
between
North and South America, and all United States territories and
possessions,
including duty free shops located therein, U.S. military bases
(wherever
located), and flights and cruises originating in any of the
above-mentioned
places.
(c)
"New Territory" shall mean the remainder of the world such that the
Old
Territory and the New Territory (collectively, the "Territory")
shall mean
the
world and all commercial disposition of Products.
(d)
"Case" shall mean the various case sizes set forth in Exhibit A,
which
is
attached and made part of this agreement, and any other
configurations
which Supplier and Great Spirits may subsequently agree to add.
(e)
"Royalty" for the purposes of this Agreement shall mean a payment
on a
per
Case basis as set out in Exhibit B, which is attached to and made
part
of
this agreement, and shall be payable in accordance with Paragraph
5(f).
(f)
"Brand" shall mean the Celtic Crossing brand and label,
including
tradename, trademark and tradedress.
2. Sales of
Ownership Rights and Product
(a)
Supplier has heretofore sold to Great Spirits 65% of the ownership
of
the
Brand in the Old territory.
(b) In consideration
for services rendered, Great Spirits and the Supplier
each
assigned 5% of the Brand in the Old Territory to MHW, Ltd., with
the
result that the
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Brand in the Old Territory is owned 60% by Great Spirits, 30% by
the
Supplier and 10% by MHW Ltd.
(c)
For a period of three years from the execution of this Agreement,
Great
Spirits will have the right, but not the obligation, to purchase
70% of the
ownership of the Brand in the New Territory for Irish L140,000
(the
"Purchase Option"). After the third anniversary of the execution of
this
Agreement, Great Spirits shall continue to have the right, but not
the
obligation, to purchase 70% of the ownership of the Brand in the
New
Territory, but the option price shall be adjusted from Irish
L140,000 by
the
change from year to year of the Irish Consumer Price Index. In
the
event of such purchase, Supplier will execute and deliver such
instruments
as
Great Spirits shall reasonably request to give full effect to
such
purchase and prior purchases.
(d)
In the event of the sale of the Brand rights by either Great
Spirits or
the
Supplier, the non-selling party shall have (i) a pre-emptive right
of
first refusal to purchase the interest to be sold at the same price
as the
proposed sale and (ii) the right to sell alongside the other and
share pro
rata
in the sales proceeds. MHW, Ltd. will not have the right to dispose
of
its
interest in the Brand except in conjunction with a sale by
Great
Spirits and the Supplier. In the event of such sale, MHW, Ltd. will
be
required to sell and will be entitled to receive its pro rata share
of the
sales proceeds. In addition, upon a disposition of the Brand by
the
Supplier where Great Spirits retains its interest, Supplier shall
either
(i)
continue to be fully obligated to supply Products hereunder
without
amendment to this Agreement or (ii) terminate the Agreement upon
six-month
notice and release the formula and right to produce the Products to
Great
Spirits as described in Paragraph 18.
(e)
Supplier shall not sell or encumber any interest in the Brand or
make
any
assignment or take any other action which would limit Great
Spirits'
rights under this Section.
3.
Appointment
(a)
Supplier hereby appoints Great Spirits (itself or acting through
Great
Spirits' agents) as the sole and exclusive importer and distributor
of the
Products in the Territory. Supplier irrevocably grants Great
Spirits (on
the
terms of this Agreement) sole and exclusive rights to use the Brand
in
the
Territory.
(b)
Great Spirits and Supplier shall devise mutually acceptable methods
of
operation in order to expedite the production, shipment and
handling of the
Products so as to provide Great Spirits with timely supply of
Products. The
parties shall cooperate on other joint activities intended by
this
Agreement.
4. Duration
This
Agreement shall continue until terminated in accordance with
Paragraph
11.
2
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5. Terms of Sale
and Payment
(a)
Great Spirits shall provide Supplier with annual forecasts of
requirements reflecting anticipated needs of Products by Case and
type of
bottle, such forecasts to be delivered to Supplier on or before the
last
day
of February commencing with 2002. Great Spirits shall be obligated
to
order the aggregate amounts set forth in each such forecast within
the year
of
such forecast. Payment shall be made as provided in (b) below.
(b)
Except as provided, all sales of the Products by the Supplier to
Great
Spirits shall be FOB Irish Port at the prices set in accordance
with
subsections 5(c),(d) and (e) and payment by Great Spirits for the
Products
shall be due 60 days from date of shipment by carrier designated by
Great
Spirits.
(c)
The prices at which Cases of Products will be sold by Supplier to
Great
Spirits during 2001 are set forth on Exhibit C which is attached to
and
made
a part of this agreement.
(d)
For each year after 2001, Supplier, based upon the annual
forecasts,
shall seek to achieve reductions and savings in costs related to
production
and
bottling of the Products. All such costs, reductions and savings
shall
be
reflected in the price per Case of the Products. Supplier and
Great
Spirits shall cooperate to achieve the least expensive cost for
the
Products and shall mutually agree the prices at which Cases of
Products
will
be sold by Supplier to Great Spirits.
(e)
At any time during the term of this Agreement, Supplier may
decrease
the
prices of the Products. Such decrease in prices shall become
effective
upon
Great Spirits receipt of written notice thereof.
(f)
Royalty payments in respect of Products purchased by Great
Spirits
pursuant to Paragraph 5 shall be paid at the same time as each
purchase
invoice is payable in respect of such Products.
6. Marketing and
Advertising; Additional Supplier Services
(a)
Great Spirits will work with the Supplier to develop mutually
satisfactory marketing and advertising plans for the Products in
the
Territory. However, final authority on all matters relating to this
plan
will
rest with Great Spirits. Marketing and advertising shall include
all
selling, marketing, promotion, commissions and administrative
expenses,
payments to MHW, Ltd. and travel and entertainment expenses related
to the
Products ("Marketing and Advertising Expenses"). (Marketing and
Advertising
Expenses related to other products which Great Spirits may sell
will not
qualify as Marketing and Advertising Expenses under this
Agreement.) In
2001
and 2002, Great Spirits will commit to expend at least 50% of
gross
profits (gross profits is defined as gross margin per Case
multiplied by
the
number of Cases sold) from the sale of the Products in the
Territory on
Marketing and Advertising Expenses except to the
3
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extent necessary to pay members' tax obligations arising out of
their
interests in Great Spirits and to pay financing obligations of
Great
Spirits. Aside from
the foregoing, Great Spirits shall have no other
obligation with regard to marketing and advertising.
(b)
At the election of Great Spirits, Supplier will provide shipping
and
invoicing services from bond to bond. Great Spirits shall provide
Supplier
with
customers' duty and excise number and all other relevant
information
and
documents as deemed necessary in order to execute shipment.
Supplier
shall receive mutually agreed upon fees for such services. Great
Spirits
shall indemnify Supplier from all duty and VAT liability for
Products
shipped pursuant to this Section 6(b).
7.
Representation and Warranties of Great Spirits
Great Spirits represents, warrants and covenants, during the term
of this
Agreement, to Supplier as follows:
(a)
Great Spirits or its agents shall be a duly licensed importer
of
alcoholic beverages and shall have at the time of signing this
Agreement,
in
full force and effect, such federal, state and local licenses as
may be
necessary to conduct its business as an importer and marketer of
alcoholic
beverages.
(b)
Great Spirits shall submit to the Supplier:
(i) Annual sales reports showing the performance of each Product
in
the Territory.
(ii) Annual reports showing the amount and allocation of
expenditures
on Marketing and Advertising Expenses. Upon written request,
the
Supplier shall have the right to verify these expenditures.
(c)
Great Spirits or its agents shall file such price schedules and
reports
as
may be prescribed by applicable laws and regulations.
(d)
During the period of this Agreement, Great Spirits shall not
distribute, within the Territory, any other Irish liqueur (cordial)
product
not
bottled in Supplier's facilities without the written consent of
the
Supplier.
8.
Representations and Warranties of Supplier
Supplier represents, warrants and covenants, during
