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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 Victoria House,
Haddington Road, Dublin 2 and CASTLE BRANDS
(USA) CORP., a Delaware corporation
with its principal office at 570 Lexington
Avenue, 29th Floor, New York, NY
10022 (hereinafter collectively called
CASTLE BRANDS); and
CASTLE BRANDS INC., a Delaware corporation
with its principal office at 570
Lexington Avenue, 29th Floor, New York, NY
10022 (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
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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, tran
