Exhibit 10.50
MARKET DEVELOPMENT, GENERAL & ADMINISTRATIVE SERVICES
AGREEMENT
THIS MARKET DEVELOPMENT, GENERAL & ADMINISTRATIVE SERVICES AGREEMENT
("Agreement") is entered into effective as of September 1, 2001 ("Effective
Date") by and between:
UBSN Limited, an English company, with its registered office located at ▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ITX, England ("UBSN"),
and
Mendocino Brewing Company, Inc., a California corporation, with its
principal place of business located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, U.S.A. ("MBC"),
in reference to the following facts:
A. UBSN is engaged in the business of brewing, marketing, distributing,
and selling Kingfisher brand beer and related consumer products (the
"Products") and desires to develop a market for the Products in the
United States.
B. UBSN wishes to engage MBC to perform certain marketing and
administrative services that will benefit UBSN in its efforts to
market, sell and distribute the Products in the United States.
C. MBC is willing and able to perform such services for UBSN on the
terms and conditions set forth herein.
UBSN and MBC agree as follows:
Section 1 - Definitions
For purposes of this Agreement, the following terms shall have the
meanings described below:
1.1 "Confidential Information" shall mean and include any and all data and
information not in the public domain, including know-how and trade secrets,
relating to, or contained or embodied in, the Products and/or the business or
affairs of UBSN. Confidential Information may be communicated orally, visually,
in writing or in any other recorded or tangible form. All data and information
shall be considered to be Confidential Information hereunder (a) if UBSN has
marked them as such, (b) if UBSN, orally or in writing, has advised MBC of their
confidential nature, or (c) if, due to their character or nature, a reasonable
person in a like position and under like circumstances would treat them as
confidential.
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1.2 "Intellectual Property Rights" shall mean and include all patents,
copyrights, designs, trademarks, service marks, trade names and other
proprietary rights or applications and registrations therefor that pertain to
the Products.
1.3 "Person" shall mean and include any individual, corporation, trust,
estate, partnership, joint venture, company, association, league, governmental
bureau or agency, or any other entity regardless of the type or nature thereof.
1.4 "Services" shall mean the promotional, market development, and
administrative services performed by MBC (as more particularly described in
Section 2.1 below) to benefit UBSN in its efforts to market, sell and distribute
the Products in the United States.
Section 2 - Engagement of MBC
2.1 Engagement. Subject to the terms and conditions of this Agreement,
UBSN hereby engages MBC, and MBC hereby agrees, to perform Services on behalf of
UBSN, which may include any or all of the following:
(a) undertaking advertising or marketing projects, including developing
public relations campaigns, strategies and programs to develop brand
name recognition for the Products and to competitively position the
Products in the United States marketplace;
(b) actively and regularly promoting and advertising the Products in the
United States, including assessing and implementing the use of
various public relations alternatives, such as direct mail
campaigns, general and/or selective public advertising, attendance
at trade shows, exhibits, regional fairs, and beer, wine and food
festivals, sponsorship of sporting and other events, and radio and
television broadcasting;
(c) conceiving, creating, drafting, designing and developing sales
literature, Product announcements and descriptions, advertising
brochures, marketing pamphlets, and other promotional materials;
(d) preparing sales forecasts, marketing studies, and surveys of
marketing activities of competitors in the beer industry;
(e) providing business management systems, procedures and policies for
accounting purposes, and budgetary, financial forecasting, general
accounting, cost control and other related services;
(f) assisting UBSN with establishing and managing the distribution
channels for the Products in the United States, including developing
policies and procedures with respect to processing deliveries and
Product orders;
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(g) preparing documentation, applications for permits and other
authorizations and filings and reports with government agencies
required for UBSN to market, sell and distribute the Products in the
United States; and
(h) providing such other marketing and administrative services for UBSN
as UBSN may reasonably request from time to time.
2.2 Limitations on Engagement. MBC agrees that it shall not perform the
Services outside of the United States, unless expressly authorized by UBSN. MBC
shall have no power or authority to (a) sell any of the Products, (b) enter into
any contract or binding agreement with respect to the Products, or (c) accept or
fill any orders for the Products. All such transactions shall be entered into
directly between UBSN and its customers.
2.3 Relationship Between Parties. MBC shall act as an independent
contractor under the terms of this Agreement and not as a legal representative
of UBSN for any purpose whatsoever. Nothing in this Agreement shall be construed
to (a) give either party the power to direct or control the daily activities of
the other party, or (b) constitute the parties as employer and employee,
franchisor and franchisee, partners, joint venturers, co-owners or otherwise as
participants in a joint undertaking. MBC has no right or authority to enter into
any contract or to assume or create any obligation of any kind, express or
implied, on behalf of UBSN.
Section 3 - Obligations of MBC
3.1 General Conduct. MBC shall use its best efforts to perform the
Services hereunder. MBC agrees that it shall at all times adhere to the
instructions, requests, and policies of UBSN regarding its performance of the
Services hereunder. MBC shall conduct its activities under this Agreement in a
lawful manner and in accordance with the highest standards of fair trade, fair
competition and business ethics.
3.2 Personnel and Facilities. MBC shall occupy and maintain facilities
adequate to perform the Services and perform its other obligations under this
Agreement. MBC shall retain and have at its disposal at all times an adequate
staff of trained and qualified personnel to perform its obligations under this
Agreement.
3.3 Promotional Materials. MBC shall have the right to prepare localized
Product descriptions, advertising and promotional materials as it considers
appropriate for the promotion of the Products in the United States. MBC shall
submit all such advertising and promotional materials to UBSN for written
approval prior to commercial release or use by MBC. Any and all advertising and
promotional materials for the Products shall comply with all applicable laws and
regulations, including without limitation, the laws and regulations of the
Bureau of Alcohol, Tobacco and Firearms ("ATF") and the Department of Alcoholic
Beverage Control ("ABC") and various state and local departments of ABC.
3.4 Records. At all times during the term of this Agreement, MBC shall
maintain at its principal place of business full, complete, and accurate records
of its activities under this Agreement. Upon reasonable notice, UBSN shall have
the right to review such records at
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MBC's premises during normal business hours for purposes of verifying the
performance of MBC's obligations hereunder.
3.5 Reports. Within thirty (30) calendar days after the end of each
quarter in which this Agreement is in effect, MBC shall furnish UBSN with a
written report summarizing all Services performed by MBC during such quarter
pursuant to this Agreement.
3.6 Indemnification. MBC shall defend, indemnify and hold UBSN harmless
against any and all claims, demands, suits, proceedings, losses, liabilities,
damages, costs and expenses (including reasonable attorneys' fees) which are
attributable to MBC's performance of the Services resulting in UBSN's rights in
the Marks and Intellectual Property Rights being prejudiced in any way. MBC's
obligations under the preceding sentence are subject to the conditions that (i)
UBSN shall promptly have notified MBC in writing of any such claim, and (ii) MBC
shall have had sole control of such defense and all negotiations for any
settlement or compromise.
Section 4 - Obligations of UBSN
4.1 Marketing Materials. UBSN shall, at no cost, provide MBC with a
reasonable quantity of marketing and promotional materials to assist MBC in its
promotional and marketing activities hereunder, upon written request by MBC.
4.2 Quality Assurances. UBSN represents and warrants that any Products
produced by UBSN (a) satisfy national, local, and regional health and safety
laws, ordinances and regulations in the United States, (b) are of merchantable
quality fit for human consumption, and (c) satisfy the quality control standards
and procedures established by UBSN from time to time. UBSN shall provide MBC
with all necessary and appropriate documentation and certifications evidencing
its compliance with the above. UBSN's representation and warranty under this
Section 4.2 shall not apply to any Products produced by MBC pursuant to that
certain Brewing License Agreement between the parties dated as of , 2001.
4.3 Indemnification. UBSN shall defend, indemnify and hold MBC harmless
against any and all claims, demands, suits, proceedings, losses, liabilities,
damages, costs and expenses (including reasonable attorneys' fees) which are
attributable to any allegation that MBC's performance of the Services, in
accordance with this Agreement, infringes the patent, copyright, design,
trademark, trade secret or other proprietary right of a third party; provided,
however, that UBSN's indemnification obligation under this Section 4.3 shall not
apply to MBC's use of the "Kingfisher" trademark in the United States in
connection with any activities of MBC hereunder. UBSN's obligations under the
preceding sentence are subject to the conditions that (i) MBC shall promptly
have notified UBSN in writing of any such claim, and (ii) UBSN shall have had
sole control of such defense and all negotiations for any settlement or
compromise. Should any Product become the subject of any infringement claim,
UBSN shall have the right to instruct MBC to refrain from marketing the Products
or to take such other steps as UBSN may consider appropriate in order to limit
its liability exposure.
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Section 5 - Compensation
5.1 Service Fees. In consideration for the Services performed by MBC
hereunder, UBSN shall pay to MBC an annual fee equal to $US1,000,000 in calendar
year 2001, $US300,000 in calendar year 2002 and $US200,000 in calendar year 2003
("Service Fees").
5.2 Payments. All Service Fees payable by UBSN to MBC under this Section 5
shall be paid within thirty (30) calendar days after the end of each quarter.
All Service Fees shall be paid in United States Dollars.
Section 6 - Confidential Information
6.1 Nondisclosure Obligation. During the term of this Agreement, UBSN may
disclose certain Confidential Information to MBC solely to permit MBC to perform
its obligations under this Agreement. MBC shall refrain from using or exploiting
any and all Confidential Information for any purposes or activities other than
those specifically authorized in this Agreement, and MBC shall not disclose any
Confidential Information to any Person, except to its employees, agents, or
representatives with a need to know. MBC shall implement effective security
procedures in order to avoid disclosure or misappropriation of UBSN's
Confidential Information. Each of MBC's employees, agents, or representatives
who will have access to any of UBSN's Confidential Information shall execute a
nondisclosure agreement, in a form acceptable to UBSN, which prohibits the
unauthorized use or disclosure of any of UBSN's Confidential Information. MBC
shall immediately notify UBSN of any unauthorized disclosure or use of any
Confidential Information that comes to MBC's attention and shall take all action
that UBSN reasonably requests to prevent any further unauthorized use or
disclosure thereof.
6.2 Ownership of Materials. MBC expressly acknowledges and agrees that all
documents and materials that contain or embody any Confidential Information are
and shall remain the sole property of UBSN. Such materials shall be promptly
returned to UBSN (a) upon UBSN's reasonable request, or (b) in accordance with
Section 8.5 hereof, upon termination of this Agreement.
6.3 Exceptions. The provisions of this Section 6 shall not apply to data
and information disclosed to MBC by UBSN, if they (a) were already known to MBC
prior to disclosure, (b) have come into the public domain without breach of
confidence by MBC or any other Person, (c) were received by MBC from a third
party without restrictions on their use in favor of UBSN, or (d) are required to
be disclosed pursuant to any applicable law, rule, regulation, or government or
court order.
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Section 7 - Intellectual Property Rights
7.1 Ownership. MBC hereby acknowledges that UBSN, or its affiliate, is the
owner of all rights, title and interest in and to the Intellectual Property
Rights and that MBC shall acquire no rights whatsoever in or to any of the
Intellectual Property Rights pursuant to this Agreement. MBC shall not take any
action that may adversely affect or impair UBSN's, or its affiliate's, rights,
title and interest in or to the Intellectual Property Rights.
7.2 Trademarks and Trade Names. The parties acknowledge that MBC may,
during the term of this Agreement, use the trademarks, trade names, domain names
or similar marks and designations ("Marks") as authorized by UBSN, or its
affiliate, from time to time in connection with the performance of the Services.
Such use is expressly limited to marketing displays, trade shows, advertising
materials and any other similar activities by MBC necessary for the performance
of MBC's obligations under this Agreement. MBC shall not market the Products
under any name, sign, logo or designation other than the Marks authorized by
UBSN, or its affiliate, from time to time.
7.3 Assistance. MBC shall render to UBSN all reasonable assistance as may
be required by UBSN in order to preserve the validity and enforceability of
UBSN's, or its affiliate's, rights, title and interest in and to the
Intellectual Property Rights. MBC agrees that it shall promptly notify UBSN (a)
of any and all infringements, imitations, illegal use, or misuse, by any Person
of the Intellectual Property Rights which comes to its attention, and (b) of any
claims or objections that MBC's performance of the Services may or will infringe
the intellectual property rights of any other Person. UBSN shall be responsible
for taking any action or initiating any proceedings which UBSN, in its sole
discretion, determines to be necessary or appropriate to prevent any
infringement of the Intellectual Property Rights, and MBC shall provide UBSN
with such assistance as UBSN may reasonably request in connection with any such
action or proceeding.
Section 8 - Term and Termination
8.1 Term. This Agreement shall become effective on the Effective Date and
shall continue in force until the expiration or termination in accordance with
its terms of the Distribution Agreement dated 9 October 1998 (as subsequently
amended) between UBSN and United Breweries (UK) Limited.
8.2 Termination for Breach. In the event that a party hereto (the
"Breaching Party") shall commit any material breach or default of its
obligations under this Agreement, the other party (the "Non-Breaching Party")
may give the Breaching Party written notice thereof and demand that such breach
or default be cured immediately. If the Breaching Party fails to cure such
breach or default within thirty (30) calendar days after the date of the
Non-Breaching Party's written notice hereunder, the Non-Breaching Party may
terminate this Agreement immediately upon giving written notice of termination
hereof to the Breaching Party.
8.3 Termination for Insolvency. To the extent permitted by applicable law,
either party may terminate this Agreement immediately upon written notice of
termination to the other
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party if the other party goes into bankruptcy or voluntary or involuntary
dissolution, is declared insolvent, fails to pay its debts as they come due,
makes an assignment for the benefit of creditors, becomes subject to proceedings
under any bankruptcy or insolvency law, or suffers the appointment of a receiver
or trustee over all or substantially all of its assets or properties.
8.4 Termination by UBSN. Notwithstanding the provisions of Section 8.2
hereof, UBSN may terminate this Agreement immediately by written notice of
termination to MBC if MBC breaches any of its obligations under Sections 6 or 7
hereof.
8.5 Rights and Obligations Upon Termination. Termination of this Agreement
for any reason whatsoever shall extinguish all rights and obligations of the
parties, except for those rights and obligations accrued prior to termination,
as specified under this Section 8. Upon termination of this Agreement for any
reason whatsoever, MBC shall (a) immediately cease the performance of all
Services hereunder, (b) return to UBSN all promotional materials in its
possession which have been provided by UBSN or developed by MBC pursuant to this
Agreement, and (c) return to UBSN all documents and other materials which
contain or embody any Confidential Information which are in MBC's possession,
unless otherwise agreed to between the parties.
8.6 Status of Payments Upon Termination. If termination of this Agreement
occurs due to any event other than breach or default by MBC, then MBC shall be
entitled to all Service Fees that have accrued prior to the date of termination.
Payment of the Service Fees after termination shall be made in accordance with
Section 5 hereof.
8.7 Survival. Notwithstanding termination of this Agreement, in the event
of termination of this Agreement for any reason whatsoever, Sections 6 and 7
hereof shall survive for as long as necessary to effectuate their purposes, and
shall bind the parties and their respective representatives, successors and
assigns.
8.8 Waiver of Termination Compensation. To the extent permitted by
applicable law, neither party shall be liable to the other party for, and each
party hereby expressly waives any right to, any termination compensation of any
kind or character whatsoever, to which such party may be entitled solely by
virtue of termination of this Agreement.
Section 9 - Compliance with Laws
Each party shall at all times and at its own expense (a) strictly comply with
all applicable laws, rules, regulations and governmental orders, now or
hereafter in effect, relating to its performance of this Agreement, (b) pay all
fees and other charges required by such laws, rules, regulations and orders, and
(c) maintain in full force and effect all licenses, permits, authorizations,
registrations and qualifications from all applicable governmental departments
and agencies to the extent necessary to perform its obligations hereunder.
Without limiting the generality of the preceding sentence, MBC agrees that in
performing the Services hereunder it will comply with all laws and regulations
of the ATF and the various state [and provincial] departments of ABC.
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Section 10 - General Provisions
10.1 No Waiver. The failure of either party to assert any of its rights
under this Agreement shall not be deemed to constitute a waiver of that party's
right thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
10.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings and communications, whether written or oral,
between the parties with respect to the subject matter hereof. No modification
or amendment of this Agreement shall be effective unless in writing and executed
by a duly authorized representative of each party.
10.3 Assignment. MBC shall not have the right or power to assign any of
its rights, or delegate the performance of any of its duties, under this
Agreement without the prior written authorization of UBSN, which may be granted
or withheld by UBSN, in its sole discretion; provided, however, that no such
prior authorization shall be required for MBC to subcontract the performance of
the Services.
10.4 Force Majeure. Notwithstanding anything in this Agreement to the
contrary, neither party shall be liable to the other party for any failure to
perform or delay in the performance of any obligation hereunder, except for
payment obligations hereunder, when such failure to perform or delay in
performance is caused by an event of force majeure; provided, however, that the
party whose performance is prevented or delayed by such event of force majeure
shall give prompt notice thereof to the other party. For purposes of this
Section 10.4, the term "force majeure" shall include war, rebellion, civil
disturbance, earthquake, fire, flood, strike, lockout, labor unrest, acts of
governmental authorities, shortage of materials, acts of God, acts of the public
enemy and, in general, any other causes or conditions beyond the reasonable
control of the parties. If any event of force majeure continues for more than
ninety (90) calendar days, either party may terminate this Agreement upon notice
to the other party.
10.5 Notices. All notices, reports, invoices and other communications
between the parties hereto shall be in writing and sent by facsimile, by
registered or certified, first-class airmail, return receipt requested and
postage prepaid, or by courier. All such communications shall be sent to the
party at the address shown at the beginning of this Agreement or to such other
address of which the receiving party has given prior notice to the sending
party.
10.6 Subject Headings. The subject headings of this Agreement are included
for purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
10.7 Severability. In the event that any provision hereof is found invalid
or unenforceable pursuant to a final judicial decree or decision, the remainder
of this Agreement will remain valid and enforceable according to its terms. In
the event of such partial invalidity, the parties shall seek in good faith to
agree on replacing any such legally invalid provisions with
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provisions which, in effect, will most nearly and fairly approach the effect of
the invalid provisions.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together constitute one and the same instrument.
Section 11 - Enforcement of Agreement
11.1 Choice of Law and Jurisdiction. This Agreement, and any disputes
arising out of or in connection with this Agreement, shall be governed by and
construed in accordance with the laws of the State of California, U.S.A.,
excluding its rules governing conflicts of laws. The courts located within the
State of California, U.S.A. shall have exclusive jurisdiction to adjudicate any
disputes arising out of or in connection with this Agreement. The parties hereby
consent to the personal jurisdiction of the courts located in the State of
California, U.S.A. for the resolution of disputes hereunder.
11.2 Legal Expenses. The prevailing party in any legal proceeding brought
by one party against the other party and arising out of or in connection with
this Agreement shall be entitled to recover its legal expenses, including court
costs and reasonable attorneys' fees. The parties hereto have caused this
Agreement to be executed by their duly authorized representatives, effective as
of the day and year first written above.
UBSN LIMITED
By:
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Name:
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Title:
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MENDOCINO BREWING COMPANY, INC.
By:
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Name:
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Title:
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