Document:

aena_ex108.htm

 

Exhibit 10.8

 

 

 

DISTRIBUTION AGREEMENT

 

This Distribution Agreement (the "Agreement") is entered into as of January  , 2013 ("Effective Date"), by and between COMMONWEALTH WHOLESALE CORPORATION ("CWC"), a Florida corporation, located at 1250 East Hallandale Beach Boulevard, Hallandale Beach, Florida, 33009 and ADRENALINA INCORPORATED ("Adrenalina"), a Florida corporation, whose principal address is 1250 East Hallandale Beach Boulevard, Hallandale Beach, FL 33009.

 

Whereas Adrenalina is a manufacturer/marketer of certain colognes and perfumes pursuant to licensing agreements with celebrities, including but not limited to Selena Gomez and Adam Levine; and

 

WHEREAS Adrenalina projects that sales of its products to Elizabeth Arden for the year 2013 will reach or exceed Ten Million ($10,000,000.00) dollars; and

 

WHEREAS, CWC is a distributor of, among other things, cosmetics and fragrance products of similar nature, target-market and type as that manufactured or marketed by Adrenalina; and

 

WHEREAS, CWC and Adrenalina wish to enter into an agreement regarding CWC's distribution of certain product manufactured or marketed by Adrenalina upon the terms and conditions set forth in this Agreement.

 

NOW THEREFORE CWC and Adrenalina agree as follows:

 

1. RECITALS. The above recitals are true and correct.

 

2. DEFINITIONS. In this Agreement, the terms listed below have the following meanings:

 

(a) "Product" mean any and all perfume/cologne/fragrance and all other cosmetic products manufactured or marketed by Adrenalina, including but not limited to products manufactured or marketed by Adrenalina pursuant to licensing

agreements and such other products that Adrenalina develops and or markets during the term of this Agreement, including all renewal terms.

 

(b) "Elizabeth Arden" means that certain publicly traded company known as Elizabeth Arden Inc., located in 2400 SW 145th Avenue, Miramar, FL., specializing in the sale and distribution of cosmetics, perfumes, colognes and other similar personal grooming products to the retailers and consumers.

 

(c) "Price" means the price as set forth for the Product on the respective purchase order.

 

(d) "Advance" means the sum of one million dollar ($1,000,000.00) being advanced by CWC to Adrenalina in accordance to the terms set forth below.

 

(e) "PO" means purchase order.

 

(f) "Delivery" means receipt of product by CWC at Adrenalina's warehouse facilities in South Brunswick or Edison, New Jersey or via direct shipment to the purchaser or such other location as agreed to by the parties.

 

(g) "Wire" means a transfer of funds by CWC to Adrenalina via electronic banking in the amount corresponding to a respective PO.

 

(h) "Term" means the initial term and all renewal terms. 3. APPOINTMENT AS A DISTRIBUTOR.

 

 

  

  

  

 

(a) Adrenalina appoints CWC as its exclusive distributor of Product to Elizabeth Arden. Solely as to Elizabeth Arden, Adrenalina will market Product to, and procure POs from, Elizabeth Arden and assign said POs to CWC. During the Term of this Agreement, Adrenalina shall not accept a PO nor provide or sell Product to any other distributer, entity, person or third-party other than for the benefit of CWC, for sale of Product to Elizabeth Arden.

 

Adrenalina shall take all action necessary to prevent any third parties from providing Product to Elizabeth Arden, including but not limited to the filing and prosecution of legal proceedings against the third-party.

 

(b) In consideration of being appointed as exclusive distributor of Product to Elizabeth Arden, and the other promises and obligations created by this Agreement, CWC agrees to provide Adrenalina the Advance, which Advance shall be held by Adrenalina and applied in accordance with the provisions of this Agreement. Upon the termination of the Agreement the balance of the advance shall be refunded to CWC as provided for herein, without set-off or discount of any kind.

 

(c) CWC shall also have the right to purchase for re-sale or distribution, up to Three Million ($3,000,000.00) dollars of Product from Adrenalina, at the rate of seventy-five (70%) per cent of list price for product under the Selena Gomez product line and at the rate of seventy (75.%).per cent of list price for product under the Adam Levine product line.

 

4. TERMS OF PAYMENT ORDERS AND DELIVERY.

 

(a) Adrenalina shall ship Product promptly upon receipt of the Wire but no later than 75 days from receipt of the Wire.

 

(b) Upon the submission of the PO from Elizabeth Arden, CWC will wire to Adrenalina an amount equal to forty three and 1/2 percent (43.5%) of the respective PO. Upon receipt of the PO and Wire, Adrenalina will be entitled to draw down from the Advance an amount equal to the Wire (exclusive of freight, insurance, taxes and other such cost) which shall constitute full and final payment to Adrenalina for the particular PO.

 

(c) Notwithstanding the foregoing, there shall a forty five (45) day moratorium commencing the day immediately following CWC's funding of the Advance, during which 45 day period, Adrenalina shall not submit any POs from Elizabeth Arden for which CWC would have to advance 43.5% of the PO. Should Elizabeth Arden submit a PO for Product during the 45 day moratorium, CWC shall pay Adrenalina the sum equal to 87% of the PO at Delivery, 1/2 via wire and 1/2 via draw down from the Advance, as payment in full of the Product identified in the PO.

 

(d) Regardless of any other term in this Agreement to the contrary, the maximum amount CWC shall be required to fund to Adrenalina at any one point in time is One Million Five Hundred Thousand ($1,500,000.00), inclusive of the Advance. The Parties agree to coordinate the submission of Elizabeth Arden POs accordingly to comply with this provision limiting CWC's maximum funding to $1,500,000.00 (inclusive of the Advance).

 

(e) CWC will take Delivery of Product F.O.B. Adrenalina's distribution facilities. All freight, insurance, duty, and taxes applicable to the PO shall be paid by CWC. The prices, terms and conditions stated in this Agreement shall apply to orders for Product by CWC regardless of the provisions of Adrenalina's invoices, purchase orders or other business forms.

 

(f) CWC will be responsible for arranging terms for delivery of the Product to the respective purchaser.

 

(g) In the event Adrenalina does not make Delivery of the Product within seventy five (75) days of the Wire, CWC shall be entitled to an additional two (2%) percent discount off the sum due to Adrenalina (i.e., CWC would tender payment equal to 85% not 87% of the PO to Adrenalina).

 

(h) In the event Adrenalina fails to make Delivery of the Product within 90 days of the Wire, Adrenalina shall refund to CWC the Wire and the sum drawn down against the Advance for the particular PO.

 

 

  

  

  

 

5. DUTIES OF CWC. CWC shall:

 

(a) Maintain any proprietary information pertaining to Adrenalina's business practices gleaned from operation of the transactions contemplated by the Agreement in confidence.

 

(b) Use its best efforts to protect copyrights, trademarks, and other proprietary rights of Adrenalina in the Product.

 

(c) Replenish the Advance upon shipment by Adrenalina of $2,000,000.00 of Product to Elizabeth Arden pursuant to POs submitted on behalf of CWC.

 

(d) Be responsible for arranging terms for delivery of the Product to respective purchaser.

 

6. DUTIES OF ADRENALINA. Adrenalina shall:

 

(a) Subject to the 45 day moratorium referred to in Paragraph 4(c) above, Adrenalina shall submit POs from Elizabeth Arden totaling no less than $500,000.00 within 120 days of the effective date of this Agreement.

 

(b) Refrain from selling Product directly to Elizabeth Arden or to any person other than CWC who is engaged in selling or reselling Product to Elizabeth Arden and will not permit any other CWC or third-party to sell Product directly or indirectly to Elizabeth Arden.

 

(c) Indemnify, defend and hold harmless CWC of any claims, suits, costs of losses, including but not limited to damages, attorney's fees and cost of litigation against all claims arising from a claim that a permitted sale of the Product under this Agreement infringes on any trademark, trade name, copyright, other property rights, licensing rights and all other such claims arising from the distribution of Product by CWC.

 

(d) Maintain any proprietary information pertaining to CWC's business practices gleaned from operation of the transactions contemplated by the Agreement in confidence and implement safeguards against disclosure.

 

(e) Deliver to CWC the personal guarantee of Ilia Lekach and Deborah Lekach, in the form and substance satisfactory to CWC, in its sole and absolute discretion.

 

7. NO RESALE RESTRICTIONS. Adrenalina shall not impose any re-sale restriction on CWC's re-sale or distribution of Product in regard to POs submitted by CWC for customers other than Elizabeth Arden,

 

8. RELATIONSHIP OF PARTIES. The relationship between Adrenalina and CWC shall at all times be that of vendor and vendee (supplier and CWC). The relationship established by CWC and Adrenalina under this Agreement is that of appointing CWC as exclusive CWC of Product to Elizabeth Arden and non­exclusive CWC of Product to other clients and customers of CWC. Under no circumstances shall CWC be considered as a representative or agent of Adrenalina. Likewise, Adrenalina shall not be considered as a representative or agent of CWC. Neither party has the right or authority to enter into any contractual obligations or make any representation in the name of or on behalf of the other. CWC may indicate, in signs, advertising, publicity, or other sales or marketing media or

materials, that it is an authorized dealer or CWC of Manufacturer's Products. Nothing in this Agreement shall be construed as precluding or preventing CWC from distributing any other similar brands or products, whether or not marketed by Adrenalina.

 

 

  

  

  

 

9. TERM AND TERMINATION.

 

(a) This Agreement shall be effective for a term of Thirteen (13) months from the Effective Date, and may be extend for one additional year by either party giving written notice no less than 60 days prior to the expiration of the pending term.

 

(b) Should Adrenalina sell or otherwise dispose of its rights to either the Selena brand or Adam Levine brand, or both, or should Adrenalina's principals transfer their interests in Adrenalina, this agreement shall terminate at the option of CWC as of effective the date of the closing of said sale or transfer of interests.

 

Adrenalina shall refund to CWC at closing of the sale or transfer, the remaining balance of the advance

 

any other monies tendered by CWC in connection with any pending Elizabeth

 

Arden POs for which the delivery was not completed as of the date of closing.

 

(c) In addition to section (b) above, CWC shall have the right to terminate this agreement for cause, including but limited to the following:

 

	
i.  

	
Adrenalina's financial situation;

 

Adrenalina's failure to timely deliver the Product;

 

Adrenalina's breach of this Agreement;

 

	
iv.  

	
Adrenalina's submission of false or fraudulent reports, forms, or license agreements;

 

	
v.  

	
after 30 days' written notice and demand to cure from CWC, if Adrenalina is in default in the performance of any material obligation under this Agreement; provided, however, if Adrenalina cures any such default within the 30 day notice period, then such notice shall be of no force or effect.

 

	
vi.  

	
Failure of Adrenalina to procure $500,000.00 in POs from Elizabeth Arden within 90 days of CWC's funding of the Advance

 

(d) In addition to section (b) above, Adrenalina shall have the right to terminate this agreement for cause, including but limited to the following:

 

	
i.  

	
CWC's financial situation;

 

CWC's failure to timely deliver the Product; CWC's breach of this Agreement;

  

	
iv.  

	
CWC's submission of false or fraudulent reports, forms, or license agreements;

 

	
v.  

	
after 30 days' written notice and demand to cure from Adrenalina, if CWC is in default in the performance of any material obligation under this Agreement; provided, however, if CWC cures any such default within the 30 day notice period, then such notice shall be of no force or effect.

 

(e) Termination of this Agreement by CWC for cause will be effective upon the date of delivery of notice of termination to Adrenalina.

 

(f) Upon the termination of the Agreement by virtue of non-renewal or for cause by either party, Adrenalina shall immediately refund to CWC the Advance and any other monies wired by CWC in connection with any pending Elizabeth Arden POs for which the delivery was not completed.

 

(f) In the event of termination for cause under provision 9(c) vi, CWC shall receive the return of the Advance, plus any sums received by Adrenalina for POs yet to be delivered, in addition to the sum of One Hundred Thousand ($1)30,000.00) dollars.

 

 

 

  

  

  

 

10. WARRANTIES

 

(a) Adrenalina warrants to CWC that the Products shall be original ones, free from defect and suitable for its intended use.

 

(b) Adrenalina is authorized to enter into this Agreement.

 

(c) Adrenalina warrants this Agreement does not violate any law, statute, rule, or other agreement/contract pertaining to the Product amongst Adrenalina and its licensors, suppliers, providers or the manufacturer of the Products.

11. NONASSIGNABILITY.

 

Neither this Agreement nor any rights or obligations of either party hereunder shall be assignable or transferable, in whole or in part, by operation of law or otherwise, without the prior written consent of the non-assigning party. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their permitted successors and assigns.

 

12. NOTICES.

 

Any notices or other communications required or permitted hereunder

 

shall be in writing and personally delivered at the principal business addresses designated at the beginning of this Agreement, or mailed by registered or certified mail, return receipt requested, postage prepaid, at the address set forth above, or to such other address or addresses as may be hereafter furnished by one party to the other party in compliance with the terms hereof.

 

13. FORCE MAJEURE. Neither party shall be liable for failure or delay in performance of any of its obligations hereunder if such delay or failure to perform is caused by circumstances beyond its control, provided performance is accomplished within a reasonable time of the anticipated date had the Force Majure event not interrupted performance.

 

14. GOVERNING LAWS. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida, U.S.A. Venue for any legal action or proceeding with respect to this Agreement shall be the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. If any legal action or proceeding is initiated, the prevailing party shall be entitled to all attorney fees, court costs, and expenses, at the trial and appellate levels, in addition to any other relief to which such prevailing party may be entitled.

 

15. MISCELLANEOUS.

 

(a) This Agreement constitutes the entire agreement and

understanding of the parties with respect to the subject matter hereof and supersedes and terminates all other prior commitments, arrangements or understandings, both oral and written, between the parties with respect thereto. This Agreement may not be modified or amended except by an instrument in writing executed by each of the parties. None of the provisions of this Agreement shall be deemed to have been waived by any act or acquiescence on the part of either party, their agents or employees, but may be waived only by an instrument in writing signed by an officer of the waiving party. No waiver of any provision of this Agreement on one occasion shall constitute a waiver of any other provision or of the same provision on another occasion.

 

(b) Nothing in this Agreement shall be construed as precluding CWC from distributing or selling products similar to or in competition with any and all products manufactured or marketed by Adrenalina.

 

(c) This Agreement does not create any relationship of principal and agent, partnership, join venture or employer and employee between CWC and Adrenalina. CWC is an independent contractor to Adrenalina and both parties acknowledge that it does not possess the authority to and shall not assume or create obligations on behalf of the other.

 

 

  

  

  

 

16. TITLES FOR CONVENIENCE. Titles used in this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants, or conditions of this Agreement.

 

17. SEVERABILITY. Nothing contained in this Agreement shall be construed as requiring the commission of any act contrary to law. Whenever there is any conflict between any provision of this Agreement and any present or future statute, law, ordinance or regulation contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event the provision of this Agreement thus affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. In the event that any part, article, paragraph, sentence or clause of this Agreement shall be held to be indefinite, invalid or otherwise unenforceable, the indefinite, invalid or unenforceable provision shall be deemed deleted, and the remaining part of the Agreement shall continue in full force and effect. If any tribunal or court of competent jurisdiction deems any

provision hereof unenforceable, such provision shall be modified only to the extent necessary to render it enforceable and this Agreement shall be valid and enforceable and the parties hereto agree to be bound by and perform same as thus modified.

 

17. WAIVER OF JURY TRIAL. ADRENALIA AND CWC AGREE THAT, TO THE

 

EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY CWC OR ADRENALIAN ON OR WITH RESPECT TO THIS AGREEMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. CWC AND ADRENALIA EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, ADRENALINA WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. GUARANTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT CWC WOULD NOT ENTER INTO THIS AGREEMENT IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.

 

  

  

  

 

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

 

 

 

 

 

  

  

  

 

 

PERSONAL GUARANTEE OF PERFORMANCE AND PAYMENT

 

The undersigned, ILIA LEKACH and DEBORAH LEKACH, ("Guarantors"), the sole share­holders of Adrenalina Incorporated, hereby request Commonwealth Wholesale Corporation, a Flor­ida corporation ("CWC") to execute a Distribution Agreement ("Agreement") which may now or hereafter be entered into between Adrenalina and CWC for the distribution of Adrenalina product by CWC.

 

In consideration of CWCTs entering into such Agreement, Guarantors hereby agree as follows:

 

1. The word "Indebtedness" herein means and includes any and all obligations of Adrenalina arising under or pursuant to the Agreement, and all other obligations, whether now existing or hereafter arising, of Adrenalina to CWC of whatever nature.

2. Guarantors promise to pay to CWC or to CWC's order any and all Indebtedness of Adrenalina to CWC and to perform any and all obligations of Adrenalina including, without limitation, obliga­tions under the Agreement or any other agreement, instrument or lease relating to, evidencing or securing any Indebtedness.

3. No exercise or non-exercise by CWC of any right hereunder, no dealing by CWC with Adrenalina or any other person, and no change, impairment or suspension of any right or remedy of CWC shall in any way affect any Indebtedness of Guarantors hereunder.

 

4. Guarantors waive and agree not to assert or take advantage of (a) any right to require CWC to proceed against Adrenalina or any other person, firm or corporation or to proceed against or exhaust any security held by CWC at any time or to pursue any other remedy in C WC's power; (b) any stat­ute of limitations in any action hereunder to collect any Indebtedness guaranteed hereby; (c) any defense that may arise by reason of Adrenalina's incapacity, lack of authority, insolvency or bank­ruptcy or CWC's failure to file or enforce a claim against the estate (either in bankruptcy, or other

proceeding) of Adrenalina, any other or others; (d) demand, protest and notice of any kind includ­ing, without limitation, notice of the existence, creation or incurring of new or additional Indebted­ness or obligations or of any action or non-action on the part of Adrenalina, CWC, any endorser, creditor of Adrenalina or Guarantor under this or any other instrument, or any other person, in con­nection with any obligation or evidence of indebtedness held by CWC or in connection with any Indebtedness hereby guaranteed; (e) any defense based upon an election of remedies by CWC in­cluding, without [imitation, an election to proceed by non-judicial rather than judicial foreclosure, which election destroys or otherwise impairs subrogation and/or other rights of Guarantors or the right of Guarantors to proceed against Adrenalina for reimbursement, or both; and (0 any duty of CWC to disclose to Guarantors any facts that CWC may now or hereafter know about Adrenalina, regardless of whether CWC has reason to believe that any such facts materially increase the risk beyond that which Guarantors intend to assume or has reason to believe that such Facts are unknown to Guarantors or has a reasonable opportunity to communicate such facts to Guarantors, it being understood and agreed that Guarantors are responsible to be and to keep informed of Adrenalina's financial condition and of all circumstances bearing on the risk of nonpayment of any Indebtedness hereby guaranteed.

5. Until all Indebtedness to CWC is paid in full and all Adrenalina's obligations to CWC are fully performed, Guarantors shall have no right of subrogation and waive any right to enforce any remedy that CWC now has or may hereafter have against Adrenalina.

 

6. All existing or future Indebtedness of Adrenalina to Guarantors and, any right to withdraw any capital of Guarantor invested in Adrenalina, is hereby subordinated to all Indebtedness hereby guaranteed.

7. Guarantors' liabilities and all rights, powers and remedies of CWC hereunder and under any other agreement now or at any time hereafter in force between CWC and Guarantors shall be cu­mulative and not alternative and such rights, powers and remedies shall be additional to all rights, powers and remedies given to CWC by law.

8. Upon an Event of Default, all liabilities of Guarantors hereunder shall become immediately due and payable without demand or notice and, in addition to any other remedies provided by law, CWC may:

 

8.1.1. Enforce the obligations of Guarantors under this Guaranty.

 

8.1.2. To the extent not prohibited by, and in addition to any other remedy provided by law, set­off against any of the Liabilities any sum owed by CWC in any capacity to Guarantor whether due or not.

 

8.2. Settlement of any claim by CWC against Adrenalina, whether in any proceeding or not, and whether voluntary or involuntary, shall not reduce the amount due under the terms of this Guaranty, except to the extent of the amount actually paid by Adrenalina or any other obligated party.

 

 

  

  

  

 

9. Guarantors' obligations hereunder are joint and several, and independent of Adrenalina’s ob­ligations. In the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantors, or any of them, regardless of whether action is brought against Adrenalina or whether Adrenalina is joined in any such action or actions. CWC may maintain suc­cessive actions for other defaults. CWCTs rights hereunder shall not be exhausted by CWC's exer­cise of any rights or remedies or by any such action or by any number of successive actions until and unless all Indebtedness has fully been paid and performed.

10. This is a Continuing Guarantee. It shall be irrevocable during the initial and any renewal term or extensions of the Agreement and until all Indebtedness has been fully paid and the obliga-

tions guaranteed have been fully performed. Thereafter, this Guarantee may be revoked only by written notice by Guarantors to CWC after CWC's receipt of such notice. The rights and remedies of CWC, as provided herein and in the Agreement, shall be cumulative and concurrent, may be pursued separately, successively or together, may be exercised as often as occasion therefore shall arise, and shall be in addition to any other rights or remedies conferred upon CWC at law or in eq­uity. The failure, at any one or more times, of CWC to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. CWC shall have the right to take any action it deems appropriate without the necessity of resorting to any collateral securing this Guaranty.

 

11. Nether any provision of this Guarantee nor right of CWC hereunder can be waived, nor can Guarantors, or any of them, be released from Guarantors' obligations hereunder except by a writing duly executed by CWC. Should any provision(s) or portion(s) of any provisions of this Guarantee be found by a court of competent jurisdiction to be illegal or unenforceable, all other provisions nevertheless shall be effective. This Guarantee shall be governed by and construed in accordance with the law off Florida.

 

12. The obligation of each Guarantor shall be primary, joint and several.

 

13. Each of the following shall constitute a default (each, an "Event of Default") hereunder:

 

13.        Non-payment when due of any sum required to be paid to CWC under the Agreement;

 

13.2. A breach by Guarantors of any other term, covenant, condition, obligation or agreement under this Guaranty, and the continuance of such breach for a period of thirty (30) days after written notice thereof shall have been given to Guarantors;

13.3. Any representation or warranty made by Guarantors in this Guaranty shall prove to be false, incorrect or misleading in any material respect as of the date when made;

 

13.4. The death or either or both Guarantors; or

 

13.5. An Event of Default under the Agreement.

 

14. This Guarantee constitutes the entire agreement of Guarantors and CWC with respect to the subject matter hereof and no representation, understanding, promise or condition concerning the subject matter hereof shall bind CWC unless expressed herein.

 

15. There is no action, suit, or proceeding at law or in equity or by or before any governmental authority, agency or other instrumentality now pending or, to the knowledge of Guarantors, threat­ened against or affecting Guarantors or any of Guarantors' properties or rights which, if adversely determined, would materially impair or affect: (i) Guarantors right to carry on his business substan­tially as now conducted (and as now contemplated); (ii) Guarantors' financial condition; or (ii) Guarantor's capacity to consummate and perform his obligations under this Guaranty

 

16. Venue for any dispute or enforcement arising under this Guarantee shall be the Seventeenth Judicial Circuit in and for Broward County, FL. This Guaranty shall be governed by and construed in accordance with the substantive laws of the State of Florida without reference to conflict of laws principles

 

17. If CWC retains the services of counsel by reason of a claim of a default or an Event of De-fault hereunder or under the Agreement, or on account of any matter involving this Guaranty, all costs of suit and all reasonable attorneys' fees and such other expenses so incurred by CWC shall forthwith, on demand, become due and payable and shall be secured hereby

 

18. If, after receipt of any payment of all or any part of the Liabilities, CWC is compelled or agrees, for settlement purposes, to surrender such payment to any person or entity for any reason (including, without limitation, a determination that such payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff, or a diversion of trust funds), then this Guaranty shall continue in full force and effect or be reinstated, as the case may be, and Guarantor shall be liable for, and shall indemnify, defend and hold harmless CWC with respect to the full amount so surrendered. The provisions of this Section shall survive the termination of this Guaranty and shall remain effective notwithstanding the payment of the Indebtedness, the cancellation of the Agree­ment, this Guaranty or any other action which CWC may have taken in reliance upon its receipt of such payment. Any cancellation, release or other such action shall be deemed to have been condi­tioned upon any payment of the Liabilities having become Final and irrevocable.

 

  

  

  

 

19. WAIVER OF JURY TRIAL. GUARANTORS AND CWC AGREE THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY CWC OR GUARANTOR ON OR WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. CWC AND GUARANTORS EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLI­GENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, GUARANTORS WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUEN­TIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAM­AGES. GUARANTORS ACKNOWLEDGE AND AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS GUARANTY AND THAT CWC WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS GUARANTY.

 

 

  

  

  

 

 

INTENDING TO BE BOUND, Guarantors, intending to be legally bound, has duly executed and delivered this Guaranty Agreement this 22- day of January 2013.srbl_ex101.htm

EXHIBIT 10.1

 

ADVISORY AGREEMENT

THIS ADVISORY AGREEMENT (the “Agreement”) is made effective as of May 20, 2013, by and between Mr. John Rud, the founder and principal of GeoXplor corporation, with his principal place of business at  3655 West Anthem Way, Suite 109-293, Anthem, Arkansas 85086 ( the “Advisor”) and Great American Energy, Inc., a Delaware corporation with its principal place of business at 999 18th Street, Suite 3000

Denver, Colorado, 80202 (the “Company”).

WHEREAS, Advisor is a geologist and has substantial experience in identifying, exploring and processing a wide variety of mineral deposits, and in all aspects of putting mining properties into production that may be useful to the Company, which the Company desires to obtain; and

WHEREAS, the Company desires Advisor to provide certain advisory services to the Board and Advisor is agreeable to performing such services for the Company.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Advisor agree as follows:

	
1.

	
Engagement; Title

The Company hereby retains Advisor, effective as of the date hereof (the “Effective Date”) and continuing until termination, as provided herein, to provide the Company with such regular and customary advisory services in connection with mining and exploration and as are otherwise reasonably requested by the Company (collectively the “Services”), provided that Advisor shall not be required to undertake duties not reasonably within the scope of the advisory services in which he is generally engaged.  In performance of his duties, Advisor shall provide the Company with the benefits of his best judgment and efforts.

	
2.

	
Term

This Agreement shall have a term of twelve months (12) months (the “Primary Term”), commencing with the Effective Date.  The Parties may mutually agree to extend the term of the Agreement in writing, for such term as is mutually agreed upon (“Extension Period”).

	
3.

	
Time and Effort of Advisor

Advisor shall allocate such time as he deems necessary to provide the Services.  The particular amount of time may vary from day-to-day or week-to-week.  Except as otherwise agreed, if reasonably requested by the Company, Advisor’s statement identifying, in general, tasks performed for the Company shall be conclusive evidence that the Services have been performed.

	
4.

	
Compensation

As full compensation for his Services, Company agrees to issue Advisor or his designee (GeoXplor Corporation)100,000 shares of restricted common stock, valued at the fair market price of $0.50 per share which is the closing price quoted on the OTCBB on May 20, 2013 (“Consulting Fee”)

	
5.

	
Other Engagement or Employment

The Advisor may accept engagement, consultancy or may be employed by another business entity during the term of this Agreement, provided his duties of confidentiality are maintained as set forth in this Agreement.

	
6.

	
Place of Services

The Services provided by Advisor will be performed at Advisor's offices  except as otherwise mutually agreed by Advisor and the Company.

 

 

  

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7.

	
Independent Contractor

Advisor will act as an independent contractor in the performance of his duties under this Agreement.  Accordingly, Advisor will be responsible for payment of all federal, state, and local taxes, if any, on compensation paid under this Agreement, including income and social security taxes, unemployment insurance, and any other taxes, and any and all business license fees as may be required.  This Agreement neither expressly nor impliedly creates a relationship of principal and agent, or employee and employer, between Advisor and the Company.  Neither Advisor nor Advisor’s personnel are authorized to enter into any agreements on behalf of the Company.  Advisor understands and agrees that this Agreement sets forth the entire compensation to be paid by the Company to Advisor resulting from the Services to be performed by Advisor, that Company’s liability hereunder will be limited to payment of the compensation provided in this Agreement, and that under no circumstances will Advisor be eligible for any benefits or rights under any employee benefit plan of the Company, including without limitation any medical, unemployment or disability benefits, even if a government agency or taxing authority re-characterizes the relationship between the parties as an employment relationship.

	
8.

	
Termination

(a)           Either the Company or Advisor may terminate this Agreement at any time, with or without cause, upon ten (10) days prior written notice.  In the event this Agreement is terminated prior to the expiration of the Primary Term or any Extension Period by mutual written agreement, the Company shall only be responsible to pay Advisor for the Consulting Fee Compensation due pursuant to Section 4 above accrued up to and including the effective date of termination.

(b)           Notwithstanding anything to the contrary herein, in the event Advisor willfully breaches or neglects the duties required to be performed hereunder, the Company shall have the right to immediately terminate this Agreement.

(c)           The Advisor’s engagement shall terminate immediately upon his death or disability which shall mean such physical or mental impairment as would render the Advisor unable to perform his duties under this Agreement.

9.           Confidentiality and Restriction on Trading on Material Non-Public Information

The Advisor acknowledges that the business carried on by the Company is a competitive business and that the disclosure of any confidential information about the business, including, but not limited to, intellectual property, research, product development, business models and methods, “know-how,” trade secrets, marketing and advertising strategy, customer lists or financial affairs of the Company (“Confidential Information”) would place the Company at a competitive disadvantage. In addition the Advisor acknowledges that the Company has a class of stock registered under the Securities Exchange Act of 1934, as amended, and that certain rules and regulation promulgated thereunder restrict the ability to trade in securities while in possession of material non-public information, and any such action may result in civil and/or criminal liability.  The Advisor shall well and faithfully serve the Company and use his best efforts to promote the interests of the Company and the Advisor.

	
(a)  

	
The Advisor shall not, either during this Agreement, or at any time thereafter:

	
(i)  

	
Disclose Confidential Information about the Company to or with any person or organization, other than for the sole purpose of performing his job functions and carrying out his responsibilities as set out in this Agreement,

	
(ii)  

	
Use Confidential Information about the Company for his own purpose or benefit or that of a third party or to the detriment or intended or probable detriment of the Company, or

	
(iii)  

	
Purchase or sell any securities of the Company on the basis of material non-public information, or communicating such information to anyone.

	
(b)  

	
The Advisor shall use his best endeavors to prevent the unauthorized publication or disclosure of any Confidential Information of the Company or any of its customers or any of its dealings, transactions or affairs which may come to the knowledge of the Advisor during the term of this Agreement.  The Advisor shall (i) use at least the same degree of care in safeguarding Confidential Information as he uses for his own proprietary information, but no less than reasonable care, (ii) limit access to Confidential Information to those of his personnel who have a need to know and cause such personnel to execute a confidentiality agreement containing the provisions herein, and (iii) upon discovery of any inadvertent disclosure or unauthorized use of Confidential Information, promptly use reasonable efforts to prevent any further inadvertent disclosure or unauthorized use and promptly notify the Company in writing.

 

 

  

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10.

	
Indemnification

Subject to the provisions herein, the Company and Advisor agree to indemnify, defend and hold each other harmless from and against all demands, claims, actions, losses, damages, liabilities, costs and expenses, including without limitation, interest, penalties and attorneys' fees and expenses asserted against or imposed or incurred by either party by reason of or resulting from any action or a breach of any representation, warranty, covenant, condition, or agreement of the other party to this Agreement.

	
11.

	
Remedies

Advisor and the Company acknowledge that in the event of a breach of this Agreement by either party, money damages would be inadequate and the non-breaching party would have no adequate remedy at law.  Accordingly, in the event of any controversy concerning the rights or obligations under this Agreement, such rights or obligations shall be enforceable in a court of equity by a decree of specific performance.  Such remedy, however, shall be cumulative and nonexclusive and shall be in addition to any other remedy to which the parties may be entitled.

12.           Miscellaneous

(a)           Subsequent Events.  Advisor and the Company each agree to notify the other party if, subsequent to the date of this Agreement, either party incurs obligations which could compromise its efforts and obligations under this Agreement.

(b)           Amendment.  This Agreement may be amended or modified at any time and in any manner only by an instrument in writing executed by the parties hereto.

(c)           Further Actions and Assurances.  At any time and from time to time, each party agrees, at its or their expense, to take actions and to execute and deliver documents as may be reasonably necessary to effectuate the purposes of this Agreement.

(d)           Waiver.  Any failure of any party to this Agreement to comply with any of its obligations, agreements, or conditions hereunder may be waived in writing by the party to whom such compliance is owed.  The failure of any party to this Agreement to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision or a waiver of the right of such party thereafter to enforce each and every such provision.  No waiver of any breach of or noncompliance with this Agreement shall be held to be a waiver of any other or subsequent breach or noncompliance.

(e)           Assignment.  Neither this Agreement nor any right created by it shall be assignable by either party without the prior written consent of the other.

(f)           Notices.  Any notice or other communication required or permitted by this Agreement must be in writing and shall be deemed to be properly given when delivered in person to an officer of the other party, when deposited in the United States mails for transmittal by certified or registered mail, postage prepaid, or when deposited with a public telegraph company for transmittal, or when sent by facsimile transmission charges prepared, provided that the communication is addressed to those addresses set forth in the introductory paragraph to this Agreement or to such other person or address designated in writing by the Company or Advisor to receive notice.

(g)           Headings.  The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(h)           Governing Law.  This Agreement shall be governed by the laws of the State of California notwithstanding any conflict-of-law provision to the contrary.

(i)           Binding Effect.  This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors, and assigns.

(j)           Entire Agreement.  This Agreement contains the entire agreement between the parties hereto and supersedes any and all prior agreements, arrangements, or understandings between the parties relating to the subject matter of this Agreement.

(k)           Severability.  If any part of this Agreement is deemed to be unenforceable, the balance of the Agreement shall remain in full force and effect.

(l)           Counterparts.  A facsimile, telecopy, or other reproduction of this Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen.

(Signature Page Follows)

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the above date.

 

 

	COMPANY 	 	 	ADVISOR	 
	GREAT AMERICAN ENERGY, INC.	 	 	JOHN RUD	 
	 	 	 	 	 
	
/s/ Felipe Pimienta

	 	 	
/s/ John Rud

	 
	By:	
 
Felipe Pimienta

	 	 	
 

	 
	
Its:       Chief Executive Officer 

	 	 	
 

	 

 

 

 

 

4

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