MASTER DISTRIBUTION AND MANUFACTURING AGREEMENT

THIS AGREEMENT (“Agreement”) is entered into as of this 15th day of February,
2010 (“Effective Date”) by and between Drinks Americas Holdings, Ltd. (“DA”), a
Delaware corporation, having offices at 372 Danbury Road, Wilton, CT 06897, and
Mexcor, Inc., a Texas corporation having an office at 8950 Railwood Drive,
Houston, TX 77078 (“Mexcor”).  DA and Mexcor are sometimes referred to
individually as a “Party” or collectively as the “Parties.”

STATEMENT OF FACTS:
 
WHEREAS, DA produces, packages, stores, promotes and markets wines, spirits,
beer and other proprietary products on a worldwide basis, through designated
producers wholesalers/distributors (and those sub-distributors that DA and each
designated distributor may agree to appoint) sells such products in the United
States and in certain foreign countries (with a desire to expand distribution in
the United States and into other countries);
 
WHEREAS, DA possesses certain licensing and other rights to produce and have
produced the products subject to this Agreement as well as rights to use the
Recipes (as herein defined), certain trademarks, trade names, trade dress,
copyrights, label designs, slogans, and logos and creative material related to
iconic figures associated with the Products and/or used to identify the
Products, whether registered, pending or pursuant to common law (collectively,
the “Product Rights”) in connection the Products (as defined in the next
paragraph);
 
WHEREAS, subject to the terms and conditions set forth herein, DA desires to
have the alcoholic products now listed on Schedule A, and as amended from time
to time pursuant to this Agreement (the “Products”), brewed, produced, packaged,
labeled, stored, inventoried, warehoused, shipped, marketed, promoted, and
distributed and sold by Mexcor (collectively, the “Services”) in the United
States of America (hereinafter, “the Territory”), and Mexcor desires to provide
the Services in the Territory pursuant to the terms and conditions set forth
herein;
 
1

--------------------------------------------------------------------------------

 
WHEREAS, consistent with the foregoing, DA desires to appoint Mexcor as the
exclusive producer and master distributor for the Products in the Territory, and
Mexcor seeks to become the exclusive producer and master distributor for the
Products;
 
WHEREAS, Mexcor may appoint sub-distributors and sub-producers for the
production and distribution of the Products and may continue such relationships
now utilized by DA.
 
NOW, THEREFORE, in consideration of the premises and agreements set forth
herein, and other good and valuable considerations, the parties hereto,
intending to be legally bound, do hereby promise and agree to the terms and
conditions herein contained.

INTRODUCTION
 
1.
OVERVIEW.
   

 
a.
This Agreement contemplates that all production and distribution activities with
respect to the Products in the Territory will, during the Term (as will be
defined hereinafter) of this Agreement, and except as otherwise provided herein,
including in Section 9 hereof, be undertaken by Mexcor at Mexcor’s sole cost and
expense, in accordance with the terms of this Agreement.  This Agreement shall
be interpreted in accordance with this overall intention of the
parties.  Consistent therewith, any financial obligation not specifically
allocated to Mexcor under this Agreement which relates to the Products in the
Territory will hereinafter be borne by Mexcor.  The operational obligations of
Mexcor as set forth in the definition of “Services” are not intended to be all
inclusive, and Mexcor and DA will amend this Agreement as necessary from time to
time to deal with any operational responsibilities which were not included in
the definition of Services, so as to satisfy the intention of the parties
described herein.  Notwithstanding the foregoing, Mexcor is not responsible for
any payables of DA which have accrued prior to the Effective Date.

 
2

--------------------------------------------------------------------------------

 
b.
This is an agreement under which Mexcor will provide the Services with respect
to the Products within the United States of America (the “Territory”), as more
fully described herein.  Mexcor will perform the Services in accordance with
industry standards and practices.  For each Product initially and/or hereinafter
listed in Schedule A by way of amendment pursuant to this Agreement, Mexcor
shall have the exclusive right to perform the Services until termination of the
Agreement and/or, with respect to a specific Product, removal of the Product
from Schedule A by DA under the terms and conditions this Agreement.
     

 
c.
DA hereby grants, and Mexcor hereby accepts, an exclusive sub-license of the
Product Rights and other proprietary rights of DA to produce, brew, package,
label, store, inventory, warehouse, ship, market, promote, distribute and sell
the Products within the Territory with the right to sub-license to sub-producers
and sub-distributors in accordance with the terms hereof (collectively, the
“Mexcor Sublicense”).  The Mexcor Sublicense shall terminate upon the
termination of the Agreement and/or, with respect to a specific Product, removal
of the Product from Schedule A by DA under the terms and conditions this
Agreement.

 
3

--------------------------------------------------------------------------------

  
 
d.
DA developed either alone or with others the formulations and recipes for the
Products (the “Recipes”).  Other than for purposes of fulfilling its obligations
under this Agreement, Mexcor shall not brew or replicate any beverage product
utilizing the Recipes and shall treat the Recipes as confidential and
proprietary information belonging to DA, as provided in Section 23
hereof.  Mexcor may sub-license the Recipes to sub-producers with the consent of
DA, which will not be unreasonably withheld.

2.
PRODUCT ADDITONS.
   

 
a.
DA and Mexcor may by mutual agreement amend Schedule A to include additional
products that are in DA’s current product portfolio on such terms as they shall
agree (“Additional Products”).  Any such Additional Products shall become
Products subject to the terms and conditions of this Agreement.
     

 
b.
DA contemplates that it will develop additional alcoholic products (“New
Beverages”) and potentially license and/or create trademarks, trade and/or brand
names, logos and other similar proprietary rights with respect to such alcoholic
beverages.  If and when DA develops any such New Beverage(s), it shall advise
Mexcor in writing of its intent to introduce such New Beverage(s) into the
marketplace, together with such information it has available to it in connection
with such New Beverage.  Within twenty (20) days after Mexcor receives such
writing, DA and Mexcor will discuss whether the New Beverage(s) should be added
to Schedule A, and thereby cause the New Beverage(s) to become a Product subject
to the terms and condition of this Agreement.  Provided that DA and Mexcor agree
to the economic terms which will apply to the addition of such New Beverage(s),
Schedule A shall be amended and the New Beverage added to the product list on
Schedule A.

 
4

--------------------------------------------------------------------------------

 
3.
MODIFICATION OF PRODUCT LIST.  At DA’s sole discretion, any Product listed now
or subsequently listed on Schedule A may be removed by DA from such schedule,
and therefore no longer be a Product subject to this Agreement, in the event the
sales of the Product set forth on Schedule B attached hereto (the “Required
Product Threshold”) are not achieved.  In such case, the removed Products will
no longer be subject to this Agreement and all rights granted to Mexcor
hereunder concerning the removed Product, including all sublicenses of Product
Rights will terminate upon written notice from DA to Mexcor.  Upon removal of a
Product, Mexcor will immediately cancel new production of the removed Product,
but will be allowed to fulfill outstanding orders and distribute all finished
inventory and current production scheduled to be packaged at the time of
removal.

4.
TERM.
   

 
a.
This Agreement shall become effective on the Effective Date and shall remain in
effect for an initial period of five (5) years (the “Initial Term”), unless
terminated earlier as provided for herein.
     

 
b.
Following completion of the full five (5) year Initial Term, this Agreement
shall automatically renew and shall remain in effect for an additional period of
ten (10) years (the “Renewal Term” and, together with the Initial Term, the
“Term”), provided that (i) the aggregate net sales of the Products during the
Initial Term are at least $8,000,000 (hereinafter, “the Renewal Criteria”).  As
used throughout this Agreement, “net sales” of a Product means gross sales of
the Product less any returns.

 
5

--------------------------------------------------------------------------------

 
 
c.
DA and Mexcor shall meet not less than ninety (90) days prior to the expiration
of the Initial Term to discuss whether the Renewal Criteria will likely be
satisfied, with Mexcor providing documentation as to net sales of the Products
realized through the last practicable date, not less than ten (10) days prior to
said meeting.
     

 
d.
In the event the term of this Agreement is not automatically renewed, at DA’s
option this Agreement will remain effective for a ninety (90) day period to
allow DA to transition provision of the Services.
     

 
e.
The Parties agree that DA’s choice of Mexcor is in reliance on its current
ownership and management.  Accordingly, DA may terminate this Agreement with a
minimum of thirty (30) days written notice if Mexcor sells a substantial portion
of its assets and/or undergoes a change in ownership involving fifty-one (51%)
or more of Mexcor’s current shareholders.
     

 
f.
The Parties agree that DA’s ability to sub-license the Product Rights is
essential to this Agreement.  Therefore, and notwithstanding any provision
contained in this Agreement, DA may remove any specific Product from Schedule A
if DA loses its right to sub-license Product Rights relating to such Product,
provided, however, that any minimum sales requirements of Mexcor set forth in
this Agreement will be reduced by an amount reasonably determined by the
Executive Committee if DA’s loss of licensing rights is no fault of Mexcor’s.

 
6

--------------------------------------------------------------------------------

 
5.
PAYMENT OF LICENSE FEES AND MISCELLANEOUS FEES.  For each case or case
equivalent of Product distributed by Mexcor during the Term of this Agreement,
Mexcor will pay DA, on a per-case basis, the License Fee for the Product as set
forth in Schedule A.  The amounts accrued for each month under this paragraph
shall be payable on the fifteenth (15th) day of the succeeding month.  Mexcor
will provide, and will cause any sub-producers and/or sub-distributors to
provide, the Services in accordance with any audit and/or inspection rights of
Product Rights Owners set forth in any agreement between the Products Rights
Owners and DA.

6.
MEXCOR COMPENSATION.  In compensation for its performance of the Services,
Mexcor will be entitled to retain that portion of the net sales proceeds from
sales of the Products which remain after it has satisfied all of its obligations
hereunder, including all production costs, cost of components, marketing
expenses, expenses related to brewing and production, the production,
maintenance and warehousing of inventory, the payment of the License Fees and
the Drinks Fees referred to in Schedule A attached hereto.

7.
BRAND PARTICIPATION BY MEXCOR.  In the event that during the Term of this
Agreement DA sells any of the Product Rights and related rights relating to one
or more Products which are listed on Schedule A at the time of sale, or, if the
sale occurs after the termination of this Agreement or after the Product(s) has
been removed from Schedule A, provided that Mexcor has satisfied the Required
Product Threshold for the Product set forth in Schedule B for the eighteen (18)
months following the Effective Date, DA shall pay Mexcor:

 
7

--------------------------------------------------------------------------------

 
 
a.
for Product Rights relating to Products included in this Agreement on the
Effective Date (collectively, with Additional Products, “the Initial Products”),
five percent (5%) of the net consideration realized by DA in connection with
such sale; and
     

 
b.
for Product Rights relating to New Products, twenty percent (20%) of the net
consideration realized by DA in connection with such sale.

 
To the extent that any consideration realized by DA from such sale consists of a
promissory note, stock or securities or any other property, DA will use its best
efforts to cause the purchaser of any such Products to issue to Mexcor, on the
closing of such sale, 5% (in the event of Initial Products) or 20% (in the event
of New Products) of the notes, stock, securities or other property otherwise
payable to DA.

8.
EQUITY COMPENSATION.
   

a.
Shares.  In consideration for Mexcor’s obligations set forth in this Agreement,
within ten (10) days of the Effective Date, DA shall issue and deliver to Mexcor
twelve million (12,000,000) shares of its common stock having $0.001 par value
(the “Shares”), which shall bear the following legend:

 
 
RESTRICTIONS ON TRANSFERS
 
“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD UNLESS AND
UNTIL THEY ARE SO REGISTERED OR THE CORPORATION RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT AN EXEMPTION FROM SUCH ACT IS
AVAILABLE.”
 

 
8

--------------------------------------------------------------------------------

 
 
b.
Mexcor represents and acknowledges that:

     
 
(i)
it is an “Accredited Investor” as defined in Regulation D of the 1933 Act, and
that it understands that the Shares have not been and will not be registered
under the 1933 Act or under the securities laws of any state, territory or
jurisdiction of the United States;
     

 
(ii)
it is acquiring the Shares for itself and not for the account of any other
person and not with a view to resale or distribution of the Shares in violation
of the United States securities laws;
     

 
(iii)
it has received no representations of any type from any person with respect to
the present or future value of the Shares or the prospects of DA and that it has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks relating to an investment in the
Shares. Mexcor understands that the Shares are restricted securities in the
United States and cannot be resold in the United States or transferred in the
United States unless they are registered under the United States Securities Act
of 1933 (the “Act”) or pursuant to an exemption from such registration, and in
accordance with applicable United States and/or state securities laws, and that
prior to such sale in the United States, Mexcor will be required to and will
furnish to DA an opinion of counsel reasonably satisfactory to DA establishing
the basis on which such sale is permitted under the Act and such state
securities laws. 

 
9

--------------------------------------------------------------------------------

 
 
c.
Warrants.  In addition the forgoing, DA will issue to Mexcor warrants to acquire
two million (2,000,000) shares of DA’s common stock at such time as Mexcor
realizes $8,000,000 of net sales of Products (the “First Warrants”), and
additional warrants to acquire two million (2,000,000) shares of DA’s common
stock  at such time as Mexcor realizes twelve million dollars ($12,000,000) in
net sales of Products over a twelve (12) month look-back period (the “Second
Warrants”), provided such criteria are satisfied during the Initial Term.
     

 
d.
Furthermore DA will issue to Mexcor, warrants to acquire 2,000,000 shares of
DA’s common stock for each Product introduced by Mexcor that is added to
Schedule A such that the brand becomes a Product (“Mexcor’s Additions”),
provided that (i) Mexcor agrees in writing that DA will receive not less that
20% of any amount realized by Mexcor on the sale of Mexcor’s interest in the
Mexcor Addition consistent with the rights granted by DA to Mexcor under Section
7 hereof, and (ii) DA receives not less than $75,000 in Drinks Fees as a result
of sales of such Product in the ordinary course of business or Mexcor sells not
less than 20,000 case equivalents of a Mexcor Addition (the “Third
Warrants”).  The addition of Products to Schedule A under this subsection will
only take place if DA will receive Drinks Fees on the sales of the Mexcor
Addition consistent in amount to the fees it received with respect to the
Initial Products and DA consents to the amendment of Schedules A and B
consistent therewith.
     

 
e.
The First, Second and Third Warrants will be exercisable for a period of five
(5) years from the date of issuance at an exercise price of 75% of the average
closing price of DA common stock over the fifteen trading days immediately
preceding issuance of the warrants.

 
10

--------------------------------------------------------------------------------

 
 
f.
Mexcor agrees that with respect to the Shares and the shares of common stock it
acquires on exercise of the First, Second and Third Warrants (the “Mexcor
Securities”) that it will not sell, in any calendar week, more than 25% of the
average weekly trading volume of DA’s common stock on the OTCBB (or such other
market on which its common stock trades, if it does not trade on the OTCBB),
during the previous calendar quarter, and that prior to such sales, it will
provide DA written notice of not less than 10 trading days in advance of such
sale, of its intent to sell a specified number of shares, within 5 days of
which, DA may acquire such shares at a purchase price equal to the averaging
closing price for DA’s common stock for the five day period preceding the day
notice is given to DA.

9.
DA’S CONSULTING SERVICES.  DA will provide general consulting services (the
“Consulting Services”) with respect to iconic and general product marketing and
development, regional and national marketing services (for example, newspaper
advertising, radio advertising, billboards and similar matters), regulatory
compliance, production, relationships with Product Rights Owners (as hereinafter
defined), as well as such other items as are provided for herein and as to which
the parties may mutually agree.  DA will be primarily responsible for all such
matters.  DA will be reimbursed for any costs it incurs to third parties in
performing the Consulting Services described hereunder, provided that
reimbursement to DA will not exceed the current “Marketing Allocation” balance
set forth on Schedule A.  In order to provide the Consulting Services referenced
in this Section, DA will use it best efforts to maintain on its staff, at its
expense, a product production executive and a marketing and events manager. and
Mexcor will cooperate with such individuals by providing access to marketing and
promotional events and such individuals will interact with members of Mexcor’s
staff as well as the special staff referenced in Section 11 hereto.

 
11

--------------------------------------------------------------------------------

 
10.
DRINKS ROYALTIES.

     
 
a.
Drinks Fees.  In consideration for the licenses and sub-licenses issued by DA to
Mexcor hereunder, the other rights granted by DA to Mexcor in connection with
the Products and for the Consulting Services, Mexcor will pay to DA a per-case
or case equivalent royalty in the amount listed under the caption “Drinks Fees”
on Schedule A attached hereto, which will increase by ten percent (10%) on
August 15, 2011, with additional 10% increases (compounded) on August 15 of each
successive year during the Initial Term.  In addition to the foregoing, for each
case of Damiana 750 ml or Damiana 50 ml (collectively, “the Damiana Products”)
distributed by Mexcor during the Term of this Agreement, Mexcor will pay to DA
$10.00, provided, however, that except for this fee, the Damiana Products are
not Products within the meaning of this Agreement.
     

 
b.
Minimum Royalties.  For the first full twenty-one (21) calendar months following
the Effective Date, Mexcor will pay DA the greater of (i) the Drinks Fees
described under Section 10.a (including fees calculated on the Damiana
Products), or (ii) the following minimum royalty payments (the “Minimum
Royalties”):

 
Time Period
 
Monthly Minimum Royalty
 
Months 1–3
  $ 0  
Months 4-6,
  $ 20,000  
Months 7–9
  $ 35,000  
Months 10–21
  $ 50,000  

 
12

--------------------------------------------------------------------------------

 
 
c.
Time for Payment.  The Minimum Royalties for each month are payable on the
fifteenth (15th) day of that month.  Notwithstanding the foregoing, in the event
the accrued Drinks Fees for the preceding month under Section 10.a is greater
than the Minimum Royalty for such preceding month, such greater amount (the
“Excess Payment”) will be payable on the fifteenth (15th) day of the current
month along with the Minimum Royalty payable with respect to the current
month.  The Parties will reconcile any net over- or underpayments not less than
once every six months during the Term of this Agreement.
     

 
d.
Efficiencies.  On each anniversary of the Effective Date, Mexcor and DA will
review any cost savings with respect to the production of the Products
(including component parts) that have been realized during the previous twelve
(12) month period measured against the cost-of-goods-sold (COGS) set forth in
Schedule A on the Effective Date..  Such cost savings are anticipated to occur
as a result of Mexcor assuming the production responsibilities with respect to
the Products.  Fifteen percent (15%) of the gross production savings, measured
against the COGS set forth in the original Schedule A, will be added to the
Drinks Fees otherwise payable to DA under Section 10.a, which addition will
accrue promptly with respect to sales of Products commencing the day after such
anniversary date.

 
13

--------------------------------------------------------------------------------

 
For example, if Old Whisky River Bourbon’s Drinks Fee is ten dollars ($10)
dollars per case or case equivalent and the production costs related to Old
Whiskey River were reduced over the first year of the Agreement from the current
$73.25 to $63.25 (a net saving of $10.00), the Drinks Fee with respect to this
Product would be increased by 15% of $10, or $1.50, resulting in a revised
Drinks Fee of $11.50.  If during the second year of the Agreement, the
productions costs increased from $63.25 to $73.25 (a net increase from the first
year, but no net increase or decrease when measured against the COGS on the
Effective Date), to the extent not counterbalanced by a pricing increase, the
Drinks Free for this Product will return to $10.00.
 
 
e.
DA acknowledges that the COGS set forth in Schedule A were provided by DA to
Mexcor, and represents that those COGS are true and correct.  In the event that
actual COGS vary from that set forth in Schedule A by more than 5%, Schedule A
shall be appropriately amended.
     

 
f.
If profit margins for one or more Products increases as a result of price
increases, the parties will negotiate an adjustment in the Drinks Fees for such
Products(s) in good faith.

ADMINISTRATION
 
11.
SPECIAL STAFF.  In addition to any and all personnel required to fulfill
Mexcor’s responsibilities hereunder, Mexcor will also hire one sales manager for
the Products selected by DA who is listed on Schedule C, attached hereto, to be
compensated at substantially the rate of compensation which he/she currently
receives, provided, however, that Mexcor shall not be obligated to maintain that
position more than six months from the Effective Date if maintaining the
position is not economically justifiable.  In the event such individual were not
to continue providing services to Mexcor hereunder during the six-month period,
DA can nominate replacements, reasonably acceptable to Mexcor, who will be
similarly compensated.  Mexcor will also consider retaining one metro New York
sales representative at a level of compensation reasonably acceptable to Mexcor.

 
14

--------------------------------------------------------------------------------

 
12.
EXECUTIVE COMMITTEE.  Mexcor will use its best efforts to provide the Services
in a manner that maximizes cost efficiencies and sales of Products and in doing
so shall make the day-to-day decisions in the ordinary course of business in
connection with the matters for which it is responsible hereunder, in all cases
in accordance with the terms of this Agreement.  However, in performing the
Services, Mexcor shall report to an Executive Committee, which will have the
authority to make decisions with respect to more significant issues not
typically viewed as ordinary-course-of-business decisions.  The more significant
decisions which are not “ordinary course” decisions will be determined
exclusively by the Executive Committee.  The Executive Committee will be formed
by DA and Mexcor and consist of one nominee of DA, one nominee of Mexcor, and a
third person to be selected jointly by DA and Mexcor.  Notwithstanding the
foregoing, DA will make all decisions relating to Product Rights, relations with
Product Rights Owners (as hereinafter defined), intellectual property, the
appearance of the Product, or relationship with the iconic figures whose name,
image or likeness or is related to the brand or who otherwise sponsors the brand
or Product in any form.  In addition, decisions relating to the quality of the
brand and marketing decisions related to any of the forgoing will also be made
by DA.

 
15

--------------------------------------------------------------------------------

 
13.
DUTIES OF MEXCOR. In performing the Services, Mexcor’s obligations, which it can
satisfy through sub-contractors reasonably acceptable to DA, provided that
Mexcor causes the obligations listed hereunder to be satisfied by such
sub-contractors, which will in all cases be in accordance with applicable laws,
will include, but not be limited to the following:
   

 
a.
Mexcor shall produce each Product in quantities sufficient to meet purchase
orders for each Product.
     

 
b.
The Products shall be produced in strict accordance with the Recipes, and Mexcor
shall not change the Recipe for any Product in any manner without the prior
written consent of DA. If required by any state or federal agency, Mexcor shall
provide samples of the Product for analysis, with costs for such analysis to be
paid by Mexcor.
     

 
c.
Mexcor shall be responsible for purchasing, at its cost, all ingredients and
packaging materials for the Products based upon its sales forecasts. Mexcor
shall ensure that all ingredients and packaging materials conform to DA’s
specifications and are fit for their intended use.
     

 
d.
Mexcor shall obtain, with DA’s assistance, appropriate Certificates of Label
Approval from the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) and properly
register the Products with any federal, state or local regulatory authority and
take any other actions required to perform the Services in accordance with
applicable laws. All costs incurred in obtaining state and federal label
approvals, state brand registrations and other satisfying legal requirements
shall be borne by Mexcor.

 
16

--------------------------------------------------------------------------------

 
 
e.
Subject to any applicable laws, DA will provide to Mexcor a letter granting
Mexcor authorization to use all DA Certificates of Label Approval from the TTB
and indicating that Mexcor is the United States importer for those brands.
     

 
f.
Mexcor shall be responsible for sales of the Products and related matters
including, but not limited to invoicing, collection of receivables, payment of
taxes, and reconciliation of purchaser accounts.
     

 
g.
For each calendar month during this Agreement, Mexcor will provide DA with a
detailed report to include, but not be limited to, (i) the quantity of each
Product produced, and (ii) gross and net sales by customer for each Product,
(iii) revenues collected on a per-Product basis, (iv) taxes paid and (v) any
other description of Mexcor activities, costs or receipts reasonably requested
by DA relating to the Products.
     

 
h.
Mexcor shall be responsible to pay all federal, state of and/or local excise and
other taxes on Products including those applying with respect to the sale of
Products.  Mexcor shall also prepare and file required monthly production and
shipment reports and any other reports required under applicable laws.
     

 
i.
At any time during the Term of this Agreement, and for a period of four (4)
years thereafter, but in any event not more than once every calendar year, DA
shall be entitled to retain an independent and qualified auditor to audit the
books and records of Mexcor for the sole purpose of confirming the accuracy of
accrued royalties and payments due hereunder.  Any such audit shall be performed
during normal business hours and at DA’s expense, provided, however, that if
such audit reveals an underpayment of five percent (5%) or more of the amount
that should have accrued or should have been paid to DA for the period audited,
then Mexcor shall bear the full expense of such audit.  In the event of any
underpayment of royalties, Mexcor shall promptly remit to DA all amounts due.

 
17

--------------------------------------------------------------------------------

 
14.
PACKING AND QUALITY.
   

 
a.
Mexcor shall be responsible for all packing filled and sealed into containers in
sizes, only as approved by DA, and the labeling of Products, as selected by DA,
in accordance with applicable laws. Containers shall be packed in secondary
packaging approved by DA, properly sealed, and placed onto pallets in a
shrink-wrapped standard configuration.
     

 
b.
Mexcor will apply or request sub-producers apply a printed production code upon
each container indicating the date of production for the Product contained
therein, or its “Best Before Date.”
     

 
c.
The design, composition, and dimensions of all primary and secondary packaging
shall be determined by DA and shall not be changed by Mexcor without DA’s
written approval.
     

 
d.
Mexcor will monitor production and packaging of each Product in accordance with
Mexcor’s standard quality assurance procedures.
     

 
e.
Any and all consumer complaints received by Mexcor relating to the Products
shall be forwarded to DA and Mexcor shall promptly respond to the complaint.

 
18

--------------------------------------------------------------------------------

 
15.
MARKETING BUDGET. A specific per-case amount per Product, determined by the
number of cases of each Product sold, as set forth on Schedule A under the
caption “Marketing Allocation,” shall be set aside and expended by Mexcor for
marketing of each Product.  The type of marketing activities and the specific
related costs shall be subject to the agreement of DA and Mexcor, however, DA’s
consent will be required with respect to the foregoing.

16.
APPOINTMENT OF SUB-DISTRIBUTORS AND SUB-PRODUCERS.  Mexcor shall have the right
to appoint sub-distributors and/or sub-producers to distribute and/or produce
the Products, provided, however, that Mexcor shall ensure that any sub-producer,
sub-distributor, or other party that fulfills all or part of Mexcor’s
obligations hereunder will perform such services consistent with the terms of
conditions of such all this Agreement and all applicable laws.

17.
INSURANCE.
   

 
a.
Mexcor shall, at its expense, maintain product liability insurance during the
Term of the Agreement and for three (3) years after termination, in an amount of
one million dollars ($1,000,000) per incident and two million dollars
($2,000,000) in the aggregate.  Mexcor shall provide DA with a certificate of
insurance evidencing the existence of this coverage no later than thirty (30)
days after execution of this Agreement.  Mexcor’s policy shall name DA as a
co-insured and provide that DA will be given at least ten (10) days prior notice
of cancellation or expiration of the policy.

 
19

--------------------------------------------------------------------------------

 
 
b.
Mexcor shall procure and maintain in full force and effect workman’s
compensation, general liability, bodily injury, and public liability property
damage insurance policies including broad form vendor’s coverage in an amount of
not less than five-hundred thousand dollars ($500,000).  Mexcor shall, on an
annual basis, furnish DA with a certificate of insurance evidencing that it has
such insurance coverage.  Mexcor agrees to notify DA at least ten (10) days
prior to the cancellation or expiration of such policies.
     

 
c.
Mexcor shall maintain sufficient insurance to protect the Product Rights, and
shall notify DA at least ten (10) days prior to the cancellation or expiration
of such insurance.

REPRESENTATION AND WARRANTIES
 
18.
REPRESENTATIONS AND WARRANTIES.
   

 
a.
Each party represents and warrants to the other party that it is duly organized
and in good standing in its respective jurisdiction of organization, that it has
the authority to enter into and perform this Agreement, and that the
consummation of this Agreement will not violate any agreement or judicial order
to which it is a party or by which it is bound.
     

 
b.
DA represents and warrants that it is authorized to sub-license the Products
Rights to Mexcor to the extent required for Mexcor to perform the Services.  DA
warrants that the Products Rights do not, to the best of DA's knowledge,
infringe upon any copyrights, patents, trademarks, trade dress, or other
property rights of any person, firm or entity.  DA further represents and
warrants that it is unaware of any current, potential, and/or threatened claim
for infringement of a third-party’s intellectual property rights relating to the
Products Rights.

 
20

--------------------------------------------------------------------------------

 
 
c.
Mexcor represents and warrants to DA that (i) it currently has, will acquire,
and/or will maintain during the term of this Agreement, all state and federal
licenses, permits, registrations and certificates necessary to produce or have
produced, package, import, store, distribute and sell the Products and to
satisfy its obligations hereunder and that Mexcor will use its best efforts to
cause any sub-producers or sub-distributors to  have and maintain all such
licenses, permits, registrations and certificates, (ii) all Products will be
brewed and packaged in strict accordance with the Recipe and be free from
adulteration and foreign contaminants, (iii) both DA and the Product Rights
Owner, as more fully described herein, may inspect production records and
operations related to the Product upon request and during normal Mexcor business
hours, (v) it will follow and that Mexcor will use its best efforts to cause
sub-producers to follow good manufacturing practices in the production of the
Products and all Products shall be of a good and merchantable quality and fit
for the purpose for which intended, and (vi) the Recipe and production and
packaging of the Products will be in accordance with all applicable state and
federal and foreign laws.
     

 
d.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PARTIES MAKE NO OTHER WARRANTIES AND
HEREBY DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.

 
21

--------------------------------------------------------------------------------

 
19.
PRODUCT RIGHTS.
   

 
a.
Mexcor recognizes that the Product Rights have great value and acknowledges that
certain of the Product Rights are licensed and not owned by DA and all
accompanying rights thereto, including all goodwill, are the property of
the  owner of the Product Rights (the “Product Rights Owner”).  Mexcor shall
not, during the term of this Agreement or anytime thereafter, assert any right
of ownership over the Product Rights in any manner, use the Product Rights other
than in accordance with the terms of this Agreement, or otherwise misappropriate
the Product Rights for its own use and gain.
     

 
b.
Mexcor agrees that it will not, in any manner, disparage or diminish the image
and quality of any of the Products, the Product Rights, or of the  owners of the
Product Rights (the “Product Rights Owners”) and, other than as expressly
permitted under this Agreement or with the written consent of DA, shall never
(i) engage in any communications, public relations, promotion marketing, or
sales activities relating to Mexcor’s involvement with production of the
Products, or the affiliation of the Products with the Product Rights Owners, or
(ii) make use, in any way, of the Products, the Product Rights, or of the name
or likeness of the Product Rights Owner, or any affiliate thereof, except in
furtherance of this Agreement.
     

 
c.
Mexcor shall cooperate with DA in preserving and protecting the integrity and
value of the Product Rights. Mexcor agrees to indemnify and hold DA harmless for
any misuse or misappropriation of the Product Rights by any person including any
sub-distributor or sub-manufacturer, and to compensate DA for any damages
incurred as a result of such misuse or misappropriation by Mexcor or
sub-distributor or sub-producer.

 
22

--------------------------------------------------------------------------------

 
 
d.
Mexcor acknowledges and expressly agrees that the Product Rights Owners (other
than DA and its affiliates) are not a party to this Agreement, and Mexcor shall
have no recourse whatsoever, whether based in law or in equity, against the
third-party Product Rights Owner for any claim Mexcor may have arising from this
Agreement.  To the extent Mexcor may, under any law, have any claim against
third-party Product Rights Owner arising from this Agreement, Mexcor hereby
expressly and unequivocally waives such claim in its entirety and will indemnify
the third-party Product Rights Owners for any and all costs, expenses, or
damages, including attorney fees, incurred by the Product Rights Owners
resulting from Mexcor taking any action inconsistent with Mexcor’s stated waiver
and agreement contained in this paragraph.

OTHER AGREEMENTS AND ACKNOWLEDGEMNTS
 
20.
RELATIONSHIP OF THE PARTIES. Mexcor and DA shall be deemed independent
contractors and nothing herein contained shall be construed to create any
partnership, joint venture, agency, or employment relationship between the
parties.  Neither party shall have the power or right to bind the other party to
any third party.

21.
INDEMNIFICATION.
   

 
(a)
Mexcor agrees to defend, indemnify and hold DA harmless against any and all
claims, costs, damages, liabilities, expenses, losses, causes of action
(including reasonable attorneys fees) arising out of, due to, or in any way
connected with (i) Mexcor’s breach of any agreement, representation, or covenant
contained in this Agreement, (ii) Mexcor's failure to properly perform the
Services including to properly produce, package, and distribute the Products, or
(iii) any violation by Mexcor of federal or state law.

 
23

--------------------------------------------------------------------------------

 
 
(b)
DA agrees to defend indemnify and hold Mexcor harmless against any and all
claims, costs, damages, liabilities, expenses, losses, causes of action
(including reasonable attorneys fees) arising out of, due to, or in any way
connected with (i) DA’s breach of any agreement, representation or covenant
contained in this Agreement; or (ii) DA’s failure to properly perform its
obligations hereunder.

22.
TERMINATION FOR CAUSE AND DAMAGES.
   

 
a.
In addition to any other termination provision contained herein, either party
may terminate this Agreement for a material breach by the other party upon
ninety days (90) days written notice to the other party, provided, however, that
the party receiving notice shall have ninety (90) days to cure or remedy any
deficiency or alleged breach contained in the notice received.
     

 
b.
This Agreement may be terminated if either party fails to make payment for any
undisputed amounts due under this Agreement within fifty-five (55) days after
receipt of written notice.
     

 
c.
Upon termination of this Agreement, Mexcor will immediately cancel new
production of the Products, but will be allowed to fulfill outstanding orders
and distribute all finished inventory and current production scheduled to be
packaged at the time of termination.

 
24

--------------------------------------------------------------------------------

 
 
d.
Any claim by either party arising out of or relating to this Agreement must be
brought no later than 365 days after the latter of: (i) the date the claim
arises, or (ii) the date the claimant first becomes aware of the claim.  Claims
not brought within the time provided herein shall be barred.
     

 
e.
Claims for money damages arising out of any action amounting to a breach of this
Agreement by either party shall be limited to the actual damages caused by said
breach.  Neither party shall be entitled to any consequential, special or
exemplary damages.  Either party may make a claim for equitable relief.

23.
CONFIDENTIALITY AND IMPLEMENTATION.
   

 
a.
DA, in addition to granting the sub-licenses to Mexcor provided in this
Agreement, DA may provide Mexcor with designs for primary and secondary
packaging materials, marketing plans, and other information, materials, and
instructions related to the Product, the Product Rights, the Product Rights
Owner, the brand name, and the trade name (all of the foregoing is to be
considered as “Confidential Information.”  Mexcor will implement all such
designs and instructions of DA with respect to the foregoing.

 
b.
A party’s Confidential Information, and all other materials, information, data
or records provided by one party to the other relating to this Agreement shall
be the sole and exclusive property of the party providing such materials
(collectively referred to as “Confidential Information”).  The parties agree
that all Confidential information provided to either party by the other in
connection with this Agreement shall not be disclosed to any other person and
shall only be used in the performance of this Agreement and for no other reason.
 Each party shall return the original and all copies of any Confidential
Information promptly following termination of this Agreement.

 
25

--------------------------------------------------------------------------------

 
 
c.
In the event of any breach of confidentiality, the injured party may seek
injunctive relief against the other party's disclosure of the Proprietary and
Confidential Information and be entitled to damages for each individual instance
of disclosure whether or not such instances of disclosure are of the same
Proprietary and Confidential Information. This agreement of confidentiality and
non-disclosure shall not apply to information which (i) is in the public domain
at the time of the receipt from the other party, or which comes into the public
domain without breach of an obligation hereunder; (ii) is known and can be shown
to be known by one party at the time of receipt from the other party; (iii)
becomes known to one party through a third source whose acquisition was
independent of the other party and not in breach of any obligation under this
Agreement; or (iv) is required to be disclosed under applicable laws.

24.
ENTIRE AGREEMENT.  This Agreement and the exhibits referred to herein constitute
the entire Agreement between the parties pertaining to the subject matter
hereof, and supersede all prior agreements, understandings, negotiations and
discussions of the parties, whether oral or written, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein.

 
26

--------------------------------------------------------------------------------

 
25.
SEVERABILITY.  If any term or provision of this Agreement shall, to any extent,
be determined to be invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby, and each remaining term and provision of this
Agreement shall be valid and enforceable to the extent permitted by law.

26.
MISCELLANEOUS.
   

 
a.
Governing Law and Venue.  This Agreement shall be construed and interpreted
according to the laws of the State of Texas without reference to its conflicts
of laws principles.  The Parties agree that any dispute arising out of this
Agreement shall be brought Harris County, Texas or, in the case of federal
jurisdiction, the United States District Court for the Southern District of
Texas, Houston Division.
     

 
b.
Notwithstanding the foregoing, any dispute between the parties as to conformity
of Products to the Recipe shall be determined by Brewing and Distilling
Analytical Services, 128 Shady Lane, Lexington, KY 40503, at the expense of DA.
     

 
c.
Attorneys' Fees.  If either party brings an action to enforce this Agreement, or
to declare rights under this Agreement, the prevailing party in any such action
shall be entitled to its reasonable attorneys' fees to be paid by the losing
party.

 
27

--------------------------------------------------------------------------------

 
 
d.
Assignment.  Either party may assign this Agreement, subject to all of the terms
and provisions hereof and to the written consent of the non-assigning party,
which may be withheld by DA in its sole discretion but may not be unreasonably
withheld by Mexcor.  All provisions of this Agreement shall be binding upon the
respective employees, delegates, successors, heirs and permitted assignees of
the parties.
     

 
e.
Notices.  Unless otherwise specifically provided herein, all communications or
notices required or permitted by this Agreement shall be in writing and shall be
deemed to have been given at the earlier of the date when actually delivered to
an officer of the other or three (3)  days after mailing in the United States
mail via certified or registered mail, return receipt requested, and addressed
as follows, unless and until either party notifies the other of a change of
address:

If to Mexcor:
Mr. Eduardo Morales
Mexcor, Inc.
8950 Railwood Drive
Houston, Texas 77078

If to DA:
Mr. J. Patrick Kenney, CEO
Drinks Americas Holdings, Ltd.
372 Danbury Rd.
Wilton, CT 06897
 
28

--------------------------------------------------------------------------------

 
 
f.
Waiver and Modification.  Unless otherwise specifically provided herein, no
waiver or modification of any of the terms of this Agreement shall be valid
unless in writing and signed by both parties.  No waiver by either party of a
breach or default under this Agreement shall be deemed a waiver by such party of
a prior or subsequent breach or default of a like or similar nature.

 
g.
Force Majeure.  In the event that either party is prevented or delayed from
performing its obligations under this Agreement by virtue of fires, labor
strikes, labor disputes, accidents, sabotage, federal or state legislation, or
orders there under, judicial action, acts of God, war, acts of terrorism, or
civil commotion, such nonperformance shall be excused and shall not constitute a
default under this Agreement; provided, that in the event that such
nonperformance continues for a period in excess of three (3) consecutive months,
either party shall have the option to terminate this Agreement immediately upon
written notice.

 
h.
Further Instruments.  The parties shall execute and deliver any and all other
instruments and shall take any and all other actions as may be reasonably
necessary to carry out the intent of this Agreement.

 
i.
Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The descriptive headings herein are inserted for
convenience only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement. DA and Mexcor hereby acknowledge that this
Agreement shall not be construed in favor of one party more than the other based
upon which party drafted the Agreement.

 
29

--------------------------------------------------------------------------------

     
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement as of
the day and year first above written.
 

           
Drinks Americas Holding, Ltd.
 
Mexcor Distributors
By:
 
By:
Title:
 
Title:

 
30

--------------------------------------------------------------------------------