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EXHIBIT 10.21
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made and entered into
as of the 19TH day of July , 1996, by and between Beverage Works, Inc. a
California corporation ("BW"), and Riverside Brewing Company, a California
corporation ( "Riverside" ) .
WHEREAS,-Riverside currently operates a craft microbrewery and brewpub
in the State of California (the "Business"); and
WHEREAS, BW and Riverside are concurrently herewith negotiating an
agreement (the "Acquisition Agreement") pursuant to which BW will, upon the
closing of the transactions contemplated thereby, acquire from the shareholders
of Riverside all of the issued and outstanding shares of common stock of
Riverside (the "business Transaction"); and
WHEREAS, BW desires, subject to the terms and conditions hereof, to
manage and operate the Business conducted by Riverside , effective as of 8 a.m.
on June 10, l996 and until the closing of the transactions contemplated by the
Acquisition Agreement;
NOW , THEREFORE , in consideration of the mutual covenants, agreements,
representations and warranties set forth in the Agreement, and for other good
and valuable consideration had and received, the parties hereto hereby agree as
follows:
MANAGEMENT AND OPERATION OF BUSINESS
SECTION 1.1. Appointment of BW. BW and Riverside intend for the
Business to be exclusively operated and managed by BW from and as of the date
hereof until this Agreement terminates as hereinafter provided. Accordingly,
Riverside hereby appoints BW, and BW hereby accepts such appointment, on the
terms and conditions hereinafter provided, to be the exclusive manager and
operator of the Business during the term of this Agreement. Riverside hereby
grants BW all power and authority, including, without limitation, the power and
authority to negotiate contracts (including sales contracts) and other written
instruments in the name and on behalf of Riverside, necessary to carry out the
terms of this appointment; provided, however, that BW shall not have the power
and authority to execute and deliver anything other than sales contracts.
Riverside hereby agrees, from time to time after the date hereof, upon the
request of BW,
to take all appropriate actions and execute any documents, instruments or
conveyances of any kind or nature, including, without limitation, powers of
attorney and other written instruments generally authorizing specified BW
personnel to take action with respect to the Business, the Riverside bank
accounts used in the operation of the Business, etc., necessary or conducive to
the performance of BW's obligations hereunder;
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provided however that no officer, director, employee, independent contractor or
agent of BW shall have authority to sign checks for or on behalf of Riversides
SECTION 1.2 . Compensation and Reimbursement of BW. As its sole
compensation for the management services provided hereunder, BW shall be
entitled to receive compensation in the amount of $6,500 per month, plus
reimbursement of expenses; provided, however, that such amounts shall only be
due and payable if the Business Transaction does not close by December 31, 1996
in which event payment of such amounts shall be made by Riverside to BW within
thirty (30) days after December 31, 1996.
SECTION 1.3. Reimbursement of Riverside. If the Business Transaction
does not close by December 31, 1996, BW agrees to reimburse Riverside for
expenditures made by Riverside on behalf of BW that do not remain with Riverside
or benefit Riverside after December 31, 1996. Any payments due to Riverside
pursuant hereto shall be made within thirty (30) days after December 31, 1996.
II.
REPRESENTATIONS AND WARRANTIES OF RIVERSIDE
To induce BW to enter into this Agreement, and to consummate the other
transactions contemplated hereby, Riverside hereby represents and warrants to BW
as follows:
SECTION 2.1. Organization of Riverside. Riverside is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Riverside is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the conduct of its business
requires it to be so qualified. Riverside has all necessary corporate power and
authority to carry on its business as it is now being conducted and to own or
lease and operate its properties and assets.
SECTION 2.2. Authorization and Validitv. Riverside has the full
corporate power and authority to execute, deliver and perform this Agreement.
This Agreement has been duly executed and delivered on behalf of Riverside and
constitutes the legal, valid and binding obligation of Riverside, enforceable
against Riverside in accordance with its terms, except that (a) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now and hereafter in effect relating to creditors rights, and (b)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought; The execution, delivery and
performance of this Agreement by Riverside has been duly authorized by all
requisite corporate action, including, without limitation, approval and
authorization by its Board of Directors, and no registration or filing with, or
consent or approval of, or any other action by, any governmental agency or
instrumentality or any other person is or will be necessary for the valid
execution, delivery and performance of this Agreement by Riverside.
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SECTION 2.3. Absence of Conflicting Agreements, Etc. Neither the
execution, delivery or performance of this Agreement by Riverside nor the
consummation by Riverside of the transactions contemplated hereby will violate
any provisions of law, any order of any court or other agency of government, the
Articles; of Incorporation or Bylaws of Riverside, or any provisions of any
indenture, agreement or other instrument to which Riverside or any of the
properties or assets of Riverside is bound, or conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under,
any such indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
the properties or assets of Riverside.
REPRESENTATION AND WARRANTIES OF BW
In order to induce Riverside to enter into this Agreement, and to
consummate the other transactions contemplated hereby, BW hereby represents and
warrants to Riverside as follows:
SECTION 3.1 Organization of BW. BW is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
BW is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the conduct of its business requires it
to be so qualified.
SECTION 3.2. Authorization and Validity. BW has the full corporate
power and authority to execute, deliver and perform this Agreement. This
Agreement when duly executed and delivered by BW constitutes the legal, valid
and binding obligation of BW, enforceable against it in accordance with its
terms, except that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar
laws nor or hereafter in effect relating to credits' rights, and (b) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. The execution, delivery and performance
of this Agreement by BW has been duly authorized by all requisite corporate
action, including approval and authorization by its Board of Directors, and no
registration or filing with, or consent of approval of or any other action by,
any governmental agency or instrumentality or any other person is or will be
necessary for the valid execution, delivery and performance of this Agreement by
BW.
SECTION 3.3. Absence of Conflicting Agreements, Etc. The execution,
delivery and performance of this Agreement by BW and the consummation by BW of
the transactions contemplated hereby will not violate any provisions of law, any
order of any court or other agency of government, the Articles of Incorporation
or By-laws of BW, or any provision of any indenture, agreement or other
instrument to which BW or any of the properties or assets of BW is bound,
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of BW.
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IV.
INDEMNIFICATION
SECTION 4.1. Indemnification by Riverside. Riverside shall defend,
indemnify and hold BW and its officers, directors, employees, attorneys and
agents harmless from and against any and all claims, damages, demands,
liabilities, losses, costs, interest, penalties and expense (including, without
limitation, attorney's fees, accountant's fees, investigative fees, expert
witness fees and the costs associated therewith) which may be asserted against
or sustained or incurred by BW, its officers, directors, employees, attorneys
and agents, arising out of or in connection with BW's activities on behalf of
Riverside in accordance with the provisions of this Agreement; provided,
however, that BW shall not be entitled to such indemnification for willful
misconduct.
SECTION 4.2. Defense of Claims. If a claim for Damages is to be made by
BW, BW shall give written notice to Riverside as soon as practicable after BW
becomes aware of any fact, condition or event which may give rise to Damages for
which indemnification may be sought under this Agreement. If any lawsuit or
enforcement action is filed against BW for which indemnification shall be
sought, written notice thereof shall be given to Riverside as promptly as
practicable (and in any event within thirty (30) days after the service of any
citation or summons); provided, however, that the failure of BW to give timely
notice shall not affect its rights to indemnification under this Agreement
except to the extent Riverside demonstrates actual damage caused by such
failure. Riverside shall be entitled to take control of the defense and
investigation of such lawsuit or action, and to employ and engage attorneys of
its own choice to handle and defend the same. BW, if it so chooses, shall also
be entitled to be represented by its own counsel of choice (at its sole cost,
risk and expense) in connection with the investigation, trial or defense of any
such lawsuit or action; provided, however, that if a conflict or potential
conflict of interest arises regarding the same attorney representing both
Riverside and BW, BW shall then be entitled to be represented by its own counsel
of choice (at the sole cost, risk and expense of Riverside).
V.
TERM AND TERMINATION
SECTION 5.1. Term. This Agreement shall become effective on the date
hereof and shall continue in full force and effect until it terminates as
provided in Section 5.2 hereof.
SECTION 5.2. Termination. This Agreement shall terminate as follows:
(i) by mutual written consent of the parties at any time; or
(ii) upon consummation of the Business Transaction; or
(iii) after a breach by either party hereto of any representation,
warranty, covenant or agreement set forth herein, upon the other party giving
notice to the breaching party of its desire to terminate this Agreement; or
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(iv) on ________, 1996, unless both of the parties hereto agree in
writing to extend the term hereof.
VI.
MISCELLANEOUS
SECTION 6.1. Expenses. Except as otherwise expressly provided for
herein, each party hereto will pay its own expenses in connection with the
transactions contemplated hereby, whether or not such transactions shall be
consummated.
SECTION 6.2. Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement, and any investigation made by or on behalf of either party hereto.
SECTION 6.3 Brokerage. Each party hereto will indemnity, defend and
hold harmless the other against and in respect of any claim for brokerage or
other commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 6.4. Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. Neither party may transfer or assign its respective
rights or obligations under this Agreement without obtaining the prior written
consent of the other.
SECTION 6.5 Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any person other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relive or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
SECTION 6.6. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be effective upon
receipt, in each case address:
If to BW:
Beverage Works, Inc.
9800 S. Sepulveda Blvd, Suite 720
Los Angeles, California 90045
Attention: Lyle Maul
Telephone: (310) 642-5643
Telecopier: (310) 642-5645
If to Riverside:
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Riverside Brewing Company
1229 Columbia Avenue, Suite C-4
Riverside, California 92507
Attention
Telephone- (909) 682-5465
Telecopier: (909) 682-5487
or, in any such case, at such other address or addresses as shall have been
furnished in writing to the other parties hereto in accordance with the
provisions of this Section 6.6.
SECTION 6.7. Law Governing Arbitration. This Agreement shall be
governed by and construed in accordance with the internal substantive laws of
the State of California without regard to its choice of law or conflicts of law
principles.
The parties will attempt through good faith negotiation to resolve
their disputes, if any, arising hereunder or in relation hereto. The term
"disputes" includes, without limitation, any disagreements between the parties
concerning the existence, formation and interpretation of this Agreement, any
disagreements regarding the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement. If the parties hereto are unable to resolve
their dispute by negotiation, they shall attempt to resolve such dispute through
mediation. If that proves unsuccessful, either party may commence arbitration by
sending a written notice of arbitration to the other party. The notice will
state the dispute with particularity As part of his or her decision, the
arbitrator may allocate the Coat of arbitration, including fees of attorneys and
experts as he or she deems fair and equitable in light of all relevant
circumstances. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration by one party to the
other. If the parties reasonably believe that the amount in controversy will be
less than Twenty-Five Thousand Dollars $25,000.00), such arbitration shall be
conducted in Los Angeles County, California by an arbitrator selected by the
parties, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association as then in effect. If, on the other hand, the amount in
controversy will likely exceed the sum of Twenty-Five Thousand Dollars
($25,000.00), such arbitration shall be conducted by the Judicial Arbitration
and Mediation Services, Inc. ("JAMS'), as arbitrator. Such arbitration shall be
conducted in Low Angeles County, California in accordance with the rules
promulgated by JAMS (with the widest rights of discovery as provided in the
California Code of Civil Procedure by all parties), and each party shall retain
the right to cross-examine the opposing party's witnesses, either through legal
counsel, expert witnesses or both. In either case, the decision of the
arbitrator shall be final, binding and conclusive on all parties (without any
right or appeal therefrom) and shall not be subject to judicial review.
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SECTION 6.8. Entire Agreement;Modiciations;Waiver. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be modified or amended except in a writing signed by
both of the parties. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
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SECTION 6.9. Further Action . Each of the parties hereto shall use all
reasonable efforts to take or cause to be taken all appropriate action, do or
cause to be done all things necessary, proper or advisable, and execute and
deliver such documents and other papers as may be required, to carry out the
provisions of this Agreement and consummate and make effective the transactions
contemplated by this Agreement.
SECTION 6.10. Severability; Construction: Headings. In the event any
provision hereof is held to be invalid or unenforceable, the remaining
provisions hereof shall be deemed severable therefrom and shall remain in full
force and effect to the maximum extent permitted by applicable law. Words and
phrases defined herein in the plural shall also be used in the singular and vice
versa and be construed in the plural or singular as appropriate and apparent in
the context used. The Article and Section headings used herein are for reference
purposes only, and shall not in any way affect the meaning or interpretation of
this Agreement.
SECTION 6.11. 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.
SECTION 6.12. Independent Contractor. In performing its duties
hereunder, BW will be an independent contractor and not an employee, partner or
joint venturer of Riverside. In this regard, BW shall have the absolute right to
determine in its sole discretion the manner, means and methods by which it shall
perform its obligations hereunder and Riverside shall have no right to control
any aspect thereof.
IN WITNESS WHEREOF , BW and Riverside have executed this Agreement to
be effective as of 9:00 a.m. on the day and year first above written.
BEVERAGE WORKS, INC.
a California corporation
By:
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Name: Lyle Maul
Title Chief Financial Officer
RIVERSIDE BREWING COMPANY
a California corporation
By:
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Name: Norm E. Kretschmar
Title: President
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