<PAGE>
Exhibit 10.1
EXECUTION COPY
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.
EXPORT AGREEMENT
This Export
Agreement (this "Agreement") is entered into as of February 14,
2005, between Gosling Partners Inc., a
Delaware corporation (the "Company") and
Gosling's Export (Bermuda) Limited ("GXB"),
a company organized under the laws
of Bermuda.
WHEREAS, the
parties are interested in pursuing global sales of GXB's
Products (as defined below) and to maximize
the distribution of the Products in
the Territory (as defined below).
NOW, THEREFORE,
for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged,
and in consideration of the mutual
promises set forth below, the parties
hereto, intending to be legally bound,
agree as follows:
1. Definitions.
a. "Case" shall mean twelve
(12) bottles of 750 ml. each (nine liters) or
equivalent volume of rum in different bottle sizes.
b. "Castle" shall mean Castle
Brands Inc.
c. "Contract Year" shall mean
any twelve (12) month period beginning on
the first day of April and ending on the last day of March of
the
following calendar year.
d. "Industry Buyer" shall mean
an entity whose primary business is the
sale of beverage alcohol products.
e. "Initial Term" shall mean
the period commencing on April 1, 2005 and
continuing for fifteen (15) years thereafter.
f. "Intellectual Property
Rights" shall mean registered or unregistered
trademarks, trade names, including, but not limited to,
Gosling's
Black Seal(R) Rum, Gosling's Gold Rum(R) and Gosling's Old
Rum(R),
patents, patent applications, patent rights (including any
patents
issuing on such applications or rights), service marks, trade
dress,
licenses, technology and all other intellectual property,
including,
without limitation, all computer programs, formulas, databases,
know-how, trade secrets used or held for use in connection with
the
Products.
g. "Renewal Term" shall mean
the period commencing the first day
following the end of the "Initial Term" or any subsequent
"Renewal
Term" and continuing for fifteen (15) years thereafter.
h. "Person" shall mean any
individual, corporation, limited liability
company, partnership, joint venture, trust, association,
unincorporated organization, or other entity.
i. "Products" shall mean all of
the products set forth on Schedule I
hereto.
<PAGE>
j. "Territory" shall include
all national or international markets with
the exception of Bermuda.
k. "Trademarks" shall mean all
trademarks, brand names and logo design
used on or in connection with Products.
2. Assignment of Rights.
(a) GXB hereby
assigns its global distribution rights (excluding Bermuda)
to all Products to the Company for the Term
of this Agreement and hereby
appoints the Company as its exclusive
authorized global exporter of the Products
in the Territory. In connection therewith,
GXB hereby grants the Company an
exclusive license for the use of its global
Trademarks for the Products for the
Term of this Agreement.
(b) The
compensation to GXB by the Company for the assignment of these
global distribution rights is a total
payment of $2,500,000, payable in four
equal installments of $625,000 at April 1,
2005, October 1, 2005, April 1, 2006
and October 1, 2006.
(c) On April 1,
2005, the beginning of the Initial Term, GXB shall assign
all of its rights, title and interest in
and to the National Distribution
Agreement, effective January 1, 2005,
between GXB and Castle (as amended to
reflect an initial term of fifteen (15)
years, commencing from April 1, 2005)
(the "National Distribution Agreement") to
the Company.
(d) GXB further
agrees to assign all of its rights, title and interests in
and to that certain distribution agreement
to be entered into at a subsequent
date between GXB and Castle with respect to
the United Kingdom market (the "UK
Distribution Agreement").
All rights and obligations of the parties specified in the
National
Distribution Agreement and the UK
Distribution Agreement shall remain in full
force and effect to the extent that those
two agreements are not inconsistent
with the terms and conditions of this
Agreement. If there are inconsistencies
between those agreements and this
Agreement, the terms and conditions of this
Agreement shall prevail.
3. Intellectual Property
Rights.
a.
Acknowledgement. The Company acknowledges GXB's exclusive right,
title
and interest in and to any and all
Intellectual Property Rights embodied in or
pertaining to the Products and that, except
as to the sales proceeds specified
in Section 4 of this Agreement, or any
other agreement between the parties, the
Company shall acquire no rights whatsoever
in or to any of such Intellectual
Property Rights and that all usage of such
Intellectual Property Rights by the
Company shall inure to the benefit of
GXB.
b. Notices,
Marks, Legends and Name. The Company shall not alter, remove,
cover, or add to, in any manner whatsoever,
any patent notice, copyright notice,
trademark, service mark, trade name, serial
number, model number, brand name or
legend that GXB may attach or affix to the
Products. The Company shall not
market the Products under any name, sign or
logo other than the trademarks
authorized to be used by GXB from time to
time.
-2-
<PAGE>
c. Third Party
Claims. The Company shall promptly notify GXB (a) of any
claims or objections that its use of the
Intellectual Property Rights in
connection with the distribution of the
Products has or may infringe the
Intellectual Property Rights of any other
Person, and (b) of any and all
infringements, imitations, illegal use, or
misuse, by any Person, of GXB
Intellectual Property Rights which come to
its attention; provided, however,
that the Company shall not take any legal
action relating to the protection of
GXB Intellectual Property Rights without
the prior written approval of GXB; and
provided further that the Company shall
render to GXB at GXB's expense, all
reasonable assistance in connection with
any matter pertaining to the protection
of GXB's Intellectual Property Rights.
d. Indemnity.
GXB shall defend at its own expense any action brought
against the Company to the extent that such
action is based on a claim that the
use or supply of any Product in the
Territory infringes the Intellectual
Property Rights of any other Person and
shall pay any costs and damages finally
awarded against the Company in any such
action which are attributable to any
such claim. GXB's obligation under the
preceding sentence is subject to the
conditions that (a) the Company shall
promptly have notified GXB in writing of
any such claim, and (b) GXB shall have had
sole control of such defense and all
negotiations for any settlement or
compromise. In the event any Product shall
become, or in GXB's opinion is likely to
become, the subject of any infringement
claim, GXB shall have the right to instruct
the Company to refrain from
supplying the Product or to take such other
steps as GXB may consider
appropriate in order to limit its liability
exposure.
4. Sale of Trademarks and Right
of First Refusal.
a. GXB shall
retain title to the Trademarks and its other Intellectual
Property for all of its portfolio brands.
In the event GXB decides to sell any
or all of its Trademarks or other
Intellectual Property during any term of this
Agreement, the Company shall have a right
of first refusal to purchase said
Trademark(s) and Intellectual Property at
the same price being offered by a bona
fide third party offeror. Within 30 days of
receipt of a third party offer GXB
shall give written notice to the Company
stating the price, terms and the
potential purchaser of the Trademarks and
Intellectual Property. The option to
purchase the Trademarks and Intellectual
Property shall be exercisable by notice
given to GXB by the Company at any time
within 20 days of the receipt of the
notice.
In the event the
Company waives its right of first refusal then, in said
event, Castle shall acquire an identical
right of first refusal and GXB shall
give written notice to Castle stating the
price, terms and the potential
purchaser of the Trademarks and
Intellectual Property. The option to purchase
the Trademarks and Intellectual Property
shall be exercisable by notice given to
GXB at any time within 20 days of the
receipt of the notice to the Company. If
either the Company or Castle exercises its
right of first refusal, the party
exercising such right shall have 90 days
within which to consummate the purchase
of such Trademarks and Intellectual
Property on the terms set forth in the
notice.
If neither the
Company nor Castle exercises its option within the
applicable time period set forth above, GXB
may, at any time within 90 days
following the expiration of the 20 day
option period, sell the Trademarks and
Intellectual Property to the third party
offeror.
-3-
<PAGE>
If an offer is
reduced following the Company's or Castle's waiver of its
right of first refusal, the Company shall
have a new right of first refusal at
the reduced price.
b. In the event
GXB should decide to sell any or all of its portfolio
Products and/or Trademark(s), whether sold
directly or indirectly through the
sale of stock of GXB or its parent company,
to a third party, the Company or
Castle, then, in recognition of the facts
that (1) the Company has enhanced the
value of the Trademarks through its
marketing investments and sales performance
under this Agreement, and (2) the Company
may henceforth no longer have the
opportunity to earn a full return on its
investments in the brand(s) being sold,
GXB agrees to share the proceeds of any
such sale with the Company pursuant to
the following formula:
i. If total Case
sales by GXB to the Company are less than *
Cases for the last twelve full months prior to the time of a
sale, the Company shall receive * of the sale proceeds.
ii. To the extent that
Case sales are greater than * Cases but
less than * cases, the Company shall be entitled to an
additional * of the proceeds for each additional * Cases sold
during the prior
