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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.
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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
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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. Representat
