Exhibit 10.31
MHW, LTD.
ALCOHOLIC BEVERAGE IMPORTERS, DISTRIBUTORS, & SERVICES
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TEL: (▇▇▇) ▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
As of December 1, 2004
Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Chief Executive Officer
Castle Brands Inc.
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Dear ▇▇. ▇▇▇▇▇▇▇:
I am writing with reference to our understanding and agreement concerning
certain Distribution Services to be rendered by MHW, Ltd. ("MHW") to Castle
Brands (USA) Corp. ("CB"). Effective December 1, 2004, MHW Ltd. (MHW) will serve
as the importer and national distributor for CB brands "Knappogue Castle
Whiskey", "Celtic Crossing Liquor", "▇▇▇▇ Vodka", "Sea Wynde Rum", "British
Royal Navy Imperial Rum", "▇▇▇▇▇'▇ Irish Cream", "Pallini Limoncello" and
"Gosling's Rum" and ship to these wholesalers in various states (registered by
MHW) designated and approved by CB from stock delivered and owned by CB at duly
licensed public beverage alcohol warehouses including Western Carriers, Inc. in
New Jersey (or shipped direct to wholesalers in the case of Direct Import
orders). MHW will receive orders from your customers, take title to such
products as are necessary to fill orders, coordinate pick-up from the warehouse,
then invoice (at prices agreed upon with CB and properly filed with state
agencies), collect, and deposit the remittances into one MHW account designated
for CB. MHW will also file all required state reports to the applicable state
agencies and pay all relevant beverage excise taxes. On a weekly basis (or as
necessary) MHW will remit "Funds Due" CB.
It is agreed that MHW will earn a monthly service fee of $4,900.00 plus $1.00
per case on all cases sold during the month. Additional brands can be added if
mutually agreed upon. Both parties agree to periodically re-visit the monthly
fee and adjust it accordingly based upon the number of brands, markets covered,
and cases sold. The term of this agreement shall commence December 1, 2004
through March 31, 2006 and shall continue automatically thereafter on a month to
month basis unless specifically terminated by either party with at least four
months prior written notice.
"Funds Due" CB are defined as the net wholesale selling price received less any
applicable warehousing, ocean freight, delivery, federal & state (if applicable)
taxes / duties, registration fees, insurance, promotional expenses, sales broker
commission payments, etc. and the MHW service fee. At the express request of CB
(and availability of Funds Due), MHW may also process supplier payments
pertaining to CB brands imported by MHW on behalf of CB. Otherwise, CB shall
satisfy all product supplier obligations. Any advances given to MHW for costs
associated with CB brands will be credited to your account. MHW will keep you
informed
on the status of sales, receivables, collections, cash balances, and expenses
associated with your activity and file reports as required by Section 7(b) of
Distributor Agreement dated March 17, 1998, between CB and Gaelic Heritage
Company Limited.
As agreed, in the event a wholesaler refuses to pay on an order shipped to one
of your accounts, MHW will not be liable for the payment. However, we will take
necessary actions to try and secure payment from the wholesaler. In the event CB
instructs MHW to institute legal action to collect the outstanding monies, MHW
will agree to do so and to prosecute such action fully, in consultation with but
at the sole cost of CB. Title to any products subject to contested sales as
described above shall revert from MHW to CB.
In consideration of the services to be performed by MHW, CB hereby agrees to
indemnify MHW and its officers, directors and employees and hold it harmless
against any claims, actions, demands, liabilities, damages, losses, costs and
expenses (including reasonable attorneys' fees) arising out of, or arising from
MHW's performance of its obligations, pursuant to this service agreement, for
claims brought by third parties for product liability, infringement of
intellectual property rights, or non-compliance with regulatory requirements.
This indemnification does not cover any third party claims or actions against CB
and/or its designated distributor or MHW arising through the act, omission,
neglect of MHW, its officers, directors, employees, servants or agents.
If you are in agreement with these terms, please sign below. This letter
replaces the April 15, 1998, May 2, 2002 and December 1, 2003 letters between
this firm and CB or its predecessors.
We look forward to continuing to work with you and enjoying a mutually
prosperous relationship.
Sincerely,
MHW Ltd.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
ACCEPTED and AGREED to,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title: Chairman and CEO
Company: Castle Brands (USA) Corp.