ON-PREMISE DISTRIBUTION COORDINATION AGREEMENT

 

This ON-PREMISE DISTRIBUTION COORDINATION AGREEMENT (this “Agreement”) is
entered into as of February 8, 2007 (the “Effective Date”), between HANSEN
BEVERAGE COMPANY, a Delaware corporation (“Hansen”), and ANHEUSER-BUSCH,
INCORPORATED, a Missouri Corporation (“AB”).

RECITALS

 

1.

The parties are both engaged in the manufacture and sale of beverages.

2.            AB has an extensive network of distributors for sales of beverages
in the United States of America including the District of Columbia (“U.S.”).
Each such distributor that is a party to an Anheuser-Busch, Inc. Wholesaler
Equity Agreement (as it may be amended, restated, and/or replaced from time to
time, in each case an “AB Equity Agreement”) is referred to herein as an “AB
Distributor” and some or all of such distributors are collectively referred to
as the “AB Distributors.”

3.            AB has employees (the “AB Sales Force”) who are collectively
dedicated to marketing, promoting, selling and merchandising products to
accounts which sell alcohol beverages for on-premise consumption pursuant to
licenses granted by applicable governmental authority (the “On-Premise
Accounts”). It is the intention of AB and Hansen that in the event a customer or
account is licensed or otherwise sells Products (as defined below) for both
on-premise and off-premise consumption at one location (e.g., a hotel with a
nightclub and a convenience store), this Agreement will apply only to the
On-Premise Account/s at such location.

4.            Subject to the terms of this Agreement, Hansen desires to enter
into distribution agreements for specific territories, substantially in the form
of attached Exhibit A (the “On-Premise Distribution Agreement/s”), with certain
AB Distributors for the distribution and sale to On-Premise Accounts only of the
Products (as defined below) and AB is willing to assist with those efforts as
specified in Sections 1 and 2 below. The “Products” collectively mean each of
the specific brands of non-alcoholic energy drinks, in ready to drink form, that
are packaged in 8.3 ounce cans and such other packages and sizes as may be
listed on attached Exhibit B (as may be amended in writing by Hansen and AB from
time to time).

5.            Subject to the terms of this Agreement, Hansen desires to assign
to AB, and AB desires to accept, primary responsibility for the marketing,
promotion, merchandising and sales of the Products to On-Premise Accounts only
and managing and coordinating the promotional, marketing, sales, merchandising
and distribution activities and efforts of the AB/Hansen Distributors (as
defined in Section 2.8 below) in respect of the Products to On-Premise Accounts
only, throughout the AB Territory (as defined in Section 2.8 below) through the
use of the AB Sales Force and the AB/Hansen Distributors (collectively, the
“Management Activities”).

6.            In exchange for AB providing the benefits set forth in this
Agreement, Hansen shall pay AB a fee based on the volume of Products purchased
by such AB/Hansen Distributors from Hansen, but calculated only with respect to
those of the Products that are sold by such AB/Hansen Distributors to On-Premise
Accounts within the AB Territory.

Now, therefore, the parties agree as follows:

AGREEMENT

1.            Engagement. Hansen hereby engages AB, and AB accepts such
engagement to generally facilitate and assist the on-going relationship between
Hansen and the AB Distributors contemplated by this Agreement. AB also agrees to
(a) use its best efforts to facilitate and assist Hansen in regard to its
evaluation of Proposed Distributors (defined below) pursuant to the terms of
Section 2.4 below, (b) use its best efforts to recommend to, encourage,
facilitate and assist all AB Distributors accepted by Hansen pursuant to the
terms of Section 2.5 below to enter into On-Premise Distribution Agreement/s
with Hansen for the sale of Products to On-Premise Accounts only in such
territories as may be designated by Hansen and agreed to between Hansen and such
AB Distributors in accordance with the procedures set forth in Section 2 below,
(c) assume primary responsibility for, execute and perform the Management
Activities, (d) prepare, manage and implement the Annual Business Plans and
Annual Marketing Plans (each as defined below) for the Products for each
calendar year, and (f) use its best efforts to cause each AB Distributor to
diligently market, promote, merchandise and sell the Products to all On-Premise
Accounts serviced by that AB Distributor throughout its assigned territory, and
such additional On-Premise Accounts within the assigned territory that are now
or may in the future be appropriate for the Products. Such efforts shall
include, without limitation, AB revising the AB Wholesaler Exclusivity Incentive
program by adding the Products thereto so that AB Distributors may carry and
distribute the Products and remain exclusive under the program for so as long as
this Agreement, and such program remain in effect, but such efforts shall not
obligate AB to expend funds or extend other economic incentives to convince AB
Distributors to enter into On-Premise Distribution Agreement/s with Hansen.

2.            General Agreement and Procedures for Appointment of Distributors.
Hansen will, subject to the other terms of this Section 2, offer to all the AB
Distributors the exclusive rights to distribute the Products to On-Premise
Accounts only throughout the Available Territory (as defined in Section 2.1
below) in accordance with the On-Premise Distribution Agreement/s.

2.1.         Existing Hansen Distributors. As of the Effective Date Hansen
distributes the Products to On-Premise Accounts in the U.S. pursuant to
distribution agreements with various distributors, many of which are not AB
Distributors (in each case, a “Non-AB Distribution Agreement”). A “No Fault
Termination Agreement” means any Non-AB Distribution Agreement under the terms
of which Hansen is expressly, legally, contractually and unilaterally entitled
to terminate the applicable Distributor’s right to distribute Products to
On-Premise Accounts without cause and without Hansen breaching such Non-AB
Distribution Agreement or incurring any liability or obligation except to pay
the applicable distributor a pre-determined fixed amount previously agreed to by
Hansen in writing under such Non-AB Distribution Agreement (e.g., average gross
profit per case per product line multiplied by the number of cases of products
sold during the most recently completed twelve (12) month period) solely related
to sales of the Products to On-Premise Accounts only. Each portion of the U.S.
that is either (a) not covered by a distribution agreement for sale of Products
to On-Premise Accounts, or (b) is covered by a No-Fault Termination Agreement is
an “Available Territory” and all such Available Territories are collectively
referred to in this Agreement as the “Available Territory.”

2.2.         Designation Notice. During the first twelve (12) months after the
Effective Date, Hansen will notify AB, in writing, from time to time, of the
specific territories within the Available Territory that Hansen is prepared to
offer to one or more AB Distributors (in each case, a “Designation Notice”).
Hansen agrees that the territory collectively covered by the Designation Notices
delivered during such twelve (12) month period will be no less than the
Available Territory.

2.3.         Identification of Distributors. Within sixty (60) days after
receipt of a Designation Notice, AB will identify to Hansen, in writing
(“Identification Notice”), the specific AB Distributor/s (the “Proposed
Distributors”) to be appointed to distribute the Products to On-Premise Accounts
only throughout the specific territory/ies identified in the Designation Notice.
If AB fails to identify Proposed Distributors throughout all of the specific
territory/ies identified in the Designation Notice within the applicable sixty
(60) day period, Hansen shall have the right to appoint distributors in its sole
discretion for the territories which were designated by Hansen in the
Designation Notice but were not identified by AB in the Identification Notice.

2.4         Rejection of Distributors. Within thirty (30) days after receipt of
the Identification Notice (the “Rejection Period”), Hansen and AB may mutually
agree not to appoint a particular Proposed Distributor, or Hansen may
unilaterally reject a particular Proposed Distributor upon delivery of written
notice (a ‘Rejection Notice”) to AB specifying one of the following reasons: (i)
the Proposed Distributor has, as of the date of the Designation Notice, refused
to enter into the Allied Products Distribution Agreement (as defined below)
offered to such Proposed Distributor, (ii) Hansen and the Proposed Distributor
are engaged in a dispute, (iii) the Proposed Distributor or Distribution
Agreement is prohibited or regulated by applicable laws or regulations such that
entering into the Distribution Agreement is likely to have a material adverse
effect on Hansen or is likely to expose Hansen to any liability or penalty, as
determined by Hansen in its reasonable discretion, or (iv) entering into a
Distribution Agreement with the Proposed Distributor is likely, in Hansen’s
reasonable judgment, to have a material adverse effect on Hansen (provided that,
for purposes of this item (iv), a less advantageous financial arrangement or
economic effect solely and in and of itself shall not be a material adverse
effect). Hansen’s Rejection Notice shall contain a good faith description, in
reasonable detail, of the facts relevant to Hansen’s decision to reject a
Proposed Distributor. In no event, however, shall such Rejection Notice be
deemed a final or complete statement or admission by Hansen with respect to its
rejection of a Proposed Distributor, and Hansen shall have the right to
subsequently amend or supplement the Rejection Notice as Hansen deems necessary
including without limitation by inclusion of any facts acquired by Hansen before
or after the date of Hansen Rejection Notice. If Hansen and AB mutually agree
not to appoint a particular Proposed Distributor, or if Hansen rejects a
particular Proposed Distributor for one of the reasons specified in this
Section, AB shall have the right, subject to Hansen’s prior written approval,
which Hansen may withhold in its sole discretion, to appoint another Person (a
“Substitute Distributor”) to distribute the Products to On-Premise Accounts only
in the applicable designated territory. If such Substitute Distributor is not
approved by Hansen, Hansen may enter into a distribution agreement with respect
to the applicable designated territory with any other Person (other than the
Substitute Distributor rejected by Hansen) who shall not be an AB/Hansen
Distributor (as defined below). The Proposed Distributors who are not rejected
either by mutual agreement of Hansen and AB or by Hansen for one of the
specified reasons set forth above, and the Substitute Distributors approved by
Hansen, shall be referred to collectively as the “Designated Distributors.” For
purposes of this Section 2.4, “Allied Products Distribution Agreement” means
such distribution agreement entered into pursuant to the Amended and Restated
Allied Products

Distribution Coordination Agreement entered into between Hansen and AB effective
as of May 8, 2006.

2.5.         Appointment of Distributors. AB will, within ten (10) days of the
end of the Rejection Period, deliver to each Designated Distributor an
On-Premise Distribution Agreement/s, in substantially the form of Exhibit A,
subject to modification as agreed upon by Hansen and AB. AB will deliver the
respective On-Premise Distribution Agreement/s to each Designated Distributor
and use its best efforts to recommend to, encourage, facilitate and assist each
Designated Distributor to enter into the On-Premise Distribution Agreement/s
with Hansen; provided, that such efforts shall not obligate AB to expend funds
or extend other economic incentives to any Designated Distributor to convince
them to enter into a On-Premise Distribution Agreement/s with Hansen. AB will
promptly return to Hansen copies of the On-Premise Distribution Agreement/s
executed by the Designated Distributors who have agreed to enter into a
On-Premise Distribution Agreement/s with Hansen. Within seven (7) days of
receipt of any On-Premise Distribution Agreement/s executed by a Designated
Distributor, Hansen will deliver the On-Premise Distribution Agreement/s
executed by Hansen to such Designated Distributor with a copy to AB.

2.6.         Rejection by Distributor. If any Designated Distributor declines to
enter into an On-Premise Distribution Agreement/s with Hansen, AB shall have the
right, subject to Hansen’s prior written approval, which Hansen may withhold in
Hansen’s sole discretion, to appoint a Substitute Distributor to distribute the
Products to On-Premise Accounts only in the applicable designated territory. If
Hansen does not approve such Substitute Distributor, Hansen may enter into a
distribution agreement with respect to the applicable designated territory with
any other Person designated by Hansen who shall not be an AB/Hansen Distributor
(as defined below).

2.7.         AB/Hansen Distributors; On-Premise Distribution Agreement/s; AB
Territory. Each Designated Distributor with whom Hansen enters into an
On-Premise Distribution Agreement/s will hereinafter be referred to as an
“AB/Hansen Distributor”. Except with respect to those AB/Hansen Distributors
with whom no Equity Agreement exists at the time the On-Premise Distribution
Agreement was entered into, each AB/Hansen Distributor shall only be AB/Hansen
Distributors during the period in which an AB Equity Agreement is in effect
between AB and such AB/Hansen Distributor. Any On-Premise Distribution
Agreement/s between Hansen and any AB Distributor granting such AB Distributor
the right to distribute Products to On-Premise Accounts shall fall under the
terms of this Agreement and be treated as an On-Premise Distribution Agreement/s
under this Agreement for so long as such On-Premise Distribution Agreement/s and
the AB Equity Agreement with such AB Distributor remains in effect. Whenever an
AB Equity Agreement with an AB/Hansen Distributor (other than those AB/Hansen
Distributors with whom no Equity Agreement exists at the time the On-Premise
Distribution Agreement was entered into) is terminated by AB pursuant to either
the deficiency termination procedure or the right of immediate termination
stated in such AB Equity Agreement, AB shall notify Hansen in writing within
sixty (60) days after such termination. The term “AB Territory” shall mean the
territory collectively covered at any particular time by all On-Premise
Distribution Agreement/s in effect at that time with AB/Hansen Distributors.

3.            Marketing, Promotion, Merchandising and Sales of the Products to
On-Premise Accounts. AB agrees to be primarily responsible during the Term for
the marketing, promotion, merchandising and sales of Products to On-Premise
Accounts throughout the AB Territory through the use of the AB Sales Force and
the AB/Hansen Distributors. Without limiting the terms of the

preceding sentence and pursuant to the direction provided by each applicable
Annual Business Plan (as defined in Section 4 below) and each applicable Annual
Marketing Plan (as defined in Section 6 below), during the Term (a) the AB Sales
Force will be directly responsible for the marketing and promotion of the
Products to On-Premise Accounts in the AB Territory, and (b) the AB Sales Force
shall encourage, assist, monitor and coordinate the merchandising and sales of
the Products to On-Premise Accounts in the AB Territory either directly or by
and through the AB/Hansen Distributors. Consistent with the direction provided
by each Annual Plan and each Annual Marketing Plan, Hansen agrees to reasonably
cooperate with AB’s efforts to satisfy its obligations under this Section 3. AB
shall monitor and manage compliance by AB/Hansen Distributors with the terms and
requirements of their respective On-Premise Distribution Agreement/s, including,
without limitation, the provisions of Sections 3 and 10 thereof.

4.            Annual Business Plan. Not less than sixty (60) days before the end
of each calendar year, AB will, in consultation with Hansen, prepare an annual
business plan for the following calendar year which shall include annual
management activities, specific On-Premise Account placement performance
objectives, merchandising, marketing and promotional goals, specific On-Premise
Account and channel objectives for specified distribution channels, and annual
sales volume goals, which shall not become effective unless it is approved in
writing by both Hansen and AB (the “Annual Business Plan”). AB will implement
and manage each Annual Business Plan in the following calendar year and, except
as otherwise expressly set forth in this Agreement, will pay all costs
associated with the Annual Business Plan including the implementation thereof.
Within sixty (60) days of the Effective Date, AB will prepare an Annual Business
Plan for the portion of calendar year 2007 commencing sixty (60) days after the
Effective Date.

5.            On-Premise Management Team. Within sixty (60) days after execution
of this Agreement, AB and Hansen shall create an account management team (the
“On-Premise Management Team”) in accordance with the terms of Section 5.1 below
and the On-Premise Management Team shall have the responsibilities set forth in
Sections 5.2-5.4 as well as the responsibilities expressly reserved for the
On-Premise Management Team in Section 6 below.

5.1.         The On-Premise Account Management Team shall be comprised of an
equal number of Hansen employees (“Hansen Team Members”), each chosen by Hansen,
and AB employees (“AB Team Members”), each chosen by AB. Hansen may at any time
replace any Hansen Team Member and AB may at any time replace any AB Team
Member. A majority of each of the Hansen Team Members and each of the AB Team
Members respectively must affirmatively agree before any action of the
On-Premise Account Management Team is approved or deemed approved.

5.2.         The On-Premise Management Team shall have responsibility for the
overall operational implementation of the provisions of this Agreement.

5.3.         The On-Premise Management Team shall conduct regular telephone
conferences, and participate in regular operations meetings of each party
pertaining to the implementation of the provisions of this Agreement. At least
once each calendar quarter (“Quarter”), the On-Premise Management Team shall
meet at locations to be determined from time to time, to among other things (a)
evaluate the parties activities under this Agreement, (b) discuss opportunities
and issues pertinent to this Agreement, (c) develop, implement and monitor
future

supply chain efficiencies and improvements, and (d) develop marketing,
promotional, merchandising and sales plans as may be appropriate under the
circumstances.

 

6.

Marketing Program.

6.1.         Annual Marketing Plans. Not less than sixty (60) days before the
end of each calendar year the On-Premise Management Team shall review the
conditions of the marketplace, the efforts to achieve sales of the Products to
On-Premise Accounts in the AB Territory as well as actual results, including
year over year performance, and shall prepare an annual marketing plan for the
next calendar year (as more specifically described below in this Section 6.1, in
each case an “Annual Marketing Plan”). Such Annual Marketing Plan shall include
specific On-Premise Account placement performance objectives, merchandising
goals, specific On-Premise Account and channel objectives for specified
distribution channels, distribution goals, a sales and marketing spending plan
and a strategy for maximizing sales and growth of market share. Additionally, if
the AB Territory has an ethnic market or concentration, the Annual Marketing
Plan shall address such specific ethnic segments, including retail promotions,
point-of-sale allocations and special events for ethnic segments. Within sixty
(60) days of the Effective Date, the On-Premise Management Team will prepare an
Annual Marketing Plan for the portion of calendar year 2007 commencing sixty
(60) days after the Effective Date. No Annual Marketing Plan shall become
effective unless it is approved by the On-Premise Management Team.

6.2.         Implementation of each Annual Marketing Plan. Subject to the terms
of Section 6.3 below, AB will implement each Annual Marketing Plan (as may be
adjusted from time to time each calendar year in accordance with Sections 6.3
and 6.4 below), and, subject to Hansen’s reimbursement obligation specified
below, AB shall be responsible for paying all expenses incurred in implementing
each Annual Marketing Plan and any other costs incurred by AB in connection with
the marketing and sales of the Products. All such costs and expenses incurred by
AB in connection with implementation of an Annual Marketing Plan are
collectively referred to in this Agreement as “Annual Marketing Plan Costs,”
provided, however, that unless expressly agreed to in writing by Hansen, the
Annual Marketing Plan Costs (a) may not include any fixed, indirect or ancillary
costs incurred by AB including, without limitation, costs of salaries, wages or
other benefits of whatsoever nature paid to any persons employed by AB and/or
who form a portion of the AB Sales Force, but (b) may include, without
limitation and without limiting the terms of 6.2(a), each of the following costs
incurred by AB from time to time to implement an Annual Marketing Plan: all
advertising and promotional agency fees and other payments for (i) radio,
television, Internet, and other electronic media advertising, (ii) billboards
and other outdoor advertising, (iii) advertising in magazines, newspapers and
other print media, (iv) sports, entertainment and event sponsorships and
promotional products, (iv) point of sale displays, materials, and sampling, (v)
on-premise promotions, (vi) coupons and sweepstakes, (vii) third party research
and third party analyses of trade and consumer issues and trends, (viii) third
party creative development and materials production needed for any of the
foregoing forms of advertising, promotion, and merchandising, and (ix)
reimbursement of reasonable trade spending by the AB Sales Force for the
purchase of Products in On-Premise Accounts in relation to the promotion of
Products. Within thirty (30) days of the end of each Quarter, AB will deliver to
Hansen an accounting of the Annual Marketing Plan Costs incurred by AB during
such Quarter to implement the applicable Annual Marketing Plan. Within
forty-five (45) days of the end of each Quarter, Hansen will reimburse AB for
fifty percent (50%) of such Annual Marketing Plan Costs. Notwithstanding the
foregoing, each party may undertake any marketing, advertising or promotional
plans or activities that they wish involving any of the

Products and one or more of the On-Premise Accounts at such party’s sole cost
and expense; provided, however, that any such plans or activities that may be
undertaken by AB shall always be subject to the prior reasonable written
approval of Hansen.

6.3.         Adjustment of an Annual Marketing Plan. The members of the
On-Premise Management Team shall discuss on a Quarterly basis (or more
frequently if appropriate) the Annual Marketing Plan and strategies for the
marketing and sales of the Products and within thirty (30) days of the end of
each Quarter implement any agreed upon changes to the Annual Marketing Plan then
in effect. Not less than once each Quarter the On-Premise Management Team shall
review the sales during the prior Quarter and projected sales and mutually agree
upon appropriate adjustments to the Annual Marketing Plan, including reductions
or increases in the amount that may be spent thereunder having regard to (a) the
level of sales of the Products during the prior Quarter, (b) projected sales of
the Products for the next two Quarters, (c) changed market conditions, and (d)
the Annual Marketing Plan Costs budgeted or planned for the remainder of the
calendar year, including, without limitation, any Annual Marketing Plan Costs
resolved in accordance with Section 6.4 below.

 

6.4.

Resolution of Disputes.

6.4.1.      If the parties are unable to reach agreement on an Annual Marketing
Plan including the Annual Marketing Plan Costs under any such plan for any
calendar year, the parties shall attempt resolution of such dispute through good
faith consultations between the Vice President of AB with responsibility for the
Products and the Chief Executive Officer of Hansen or his designee. If no
settlement can be reached through such consultations within thirty (30) days
after either party has notified the other party in writing of the existence of
such dispute, then the dispute shall be referred to mediation and failing
resolution to arbitration in accordance with Section 24 below. Notwithstanding
anything to the contrary, the arbitrators shall not have the authority or power
to and shall not issue an award or order that (a) requires Hansen’s fifty
percent (50%) reimbursement of Annual Marketing Plan Costs for the 2007 calendar
year to exceed fifty percent (50%) of the Grossed Up Fee (as defined below), (b)
requires Hansen’s fifty percent (50%) reimbursement of Annual Marketing Plan
Costs for any calendar year after 2007 to exceed the Fee (as defined in Section
9 below) relating to the Products sold by Hansen to AB/Hansen Distributors
during the immediately preceding calendar year, or (c) results in Hansen
incurring any obligation or liability to reimburse AB for Annual Marketing Plan
Costs in an amount exceeding the Fee during the then-current calendar year. The
parties agree to adjust any award or order as soon as possible under the
circumstances but in no event less frequently than at the end of each Quarter
thereafter to give effect to the foregoing. For purposes of this Section 6.4,
the term “Grossed-Up Fee” means an amount equal to the product of (a) the
aggregate amount of the Fees incurred during the period between January 1, 2007,
and the date of the arbitration award (the “Assessment Period”) multiplied by
(b) a fraction, the numerator of which is 365, and the denominator of which is
the total number of days in the Assessment Period.

6.4.2.      Each party will continue to perform its obligations under this
Agreement pending final resolution of any such dispute set forth in this Section
6.4. For any calendar year in which a new Annual Marketing Plan has not been
agreed, AB shall continue to market and sell the Products with Annual Marketing
Plan Costs that do not exceed (a) during 2007, the Grossed Up Fee, and (b)
during any calendar year after 2007, total Annual Marketing Plan Costs for the
prior calendar year, to be estimated on a per-case basis, until an award or
order is issued by the arbitrators.

 

7.

Access to AB Sales Meetings; Hansen Sales Meetings.

7.1.        At Hansen’s request, Hansen will be permitted to attend all
national, regional and state sales meetings AB holds with AB Distributors on a
group basis. Hansen will be allocated a reasonable amount of time to address
issues related to the Products and to promote and maximize distribution and sale
of the Products to On-Premise Accounts (a) at all such state meetings Hansen
elects to attend, and (b) at one regional meeting in each AB region each
calendar year so long as a regional meeting is actually held in the applicable
region. AB will provide Hansen at least thirty (30) days prior written notice of
all national sales meetings and as much advance notice as reasonably possible
for all regional and state sales meetings, as such meetings may be arranged on
less than thirty (30) days notice.

7.2.        AB will, at no additional expense to AB, support and facilitate
additional meetings of AB/Hansen Distributors reasonably requested by Hansen.

 

8.

Miscellaneous AB and Hansen Assistance.

8.1.        Hansen will require each AB/Hansen Distributor to assign an AB
provided tracking number to each Product and Product package (or such other
actions as AB may reasonably request in the future) to allow for tracking of
inventory and sales information by BudNet or any replacement sales data
collection system then in use generally by AB and the AB Distributors, and as
required under Section 3.j of the On-Premise Distribution Agreement/s. Based on
such information, AB will regularly provide to Hansen for each AB/Hansen
Distributor: (a) sales reports regarding the Products, (b) inventory levels of
the Products, (c) On-Premise Accounts and potential On-Premise Accounts coverage
related to the Products, and (d) demographic and other retail consumer
attributes applicable to On-Premise Accounts and potential On-Premise Accounts
where the Products are sold. AB will provide such information and summaries
thereof in formats as mutually agreed to from time to time by AB and Hansen.

8.2.        AB and Hansen will review and analyze Hansen’s existing freight and
delivery systems in order to improve the efficiencies of such system. To the
extent savings or other efficiencies are created, AB will make its wholesaler
support centers and other intermediate delivery locations (collectively, “WSCs”)
utilized by AB for its malt beverage products available to Hansen for use in
connection with storage and delivery of the Products. To the extent Hansen
decides to utilize the WSCs it agrees to reimburse AB for the actual, direct,
incremental costs incurred by AB for such use.

8.3.        At Hansen’s request, AB agrees, to the extent legally permissible,
to advise Hansen on the negotiation of purchasing arrangements for some or all
of the raw materials and packaging components required to make and package the
Products.

8.4.        AB’s respective obligations under this Section 8 do not require AB
to incur any out-of-pocket expenses or other costs other than the time
reasonably spent by their personnel to comply with the terms of this Section 8.

 

9.

Fees.  

9.1.         Payable by Hansen. In exchange for AB’s performance of its
obligations under this Agreement, Hansen will pay AB a fee (the “Fee”) equal to
the percentage set forth on

Exhibit C of the Gross Margin (defined below) of the Products sold by Hansen to
AB/Hansen Distributors during the applicable period under the terms of the
applicable On-Premise Distribution Agreement/s with such AB/Hansen Distributors,
but calculated only with respect to those of the Products that are sold by such
AB/Hansen Distributors to On-Premise Accounts within the AB Territory in
accordance with the applicable On-Premise Distribution Agreement/s. For purposes
of determining this calculation, Hansen and AB shall initially utilize the
reports provided by AB or the AB/Hansen Distributors in accordance with Section
8.1 above; provided, however, in the event a report is subsequently shown to be
inaccurate, Hansen and AB shall utilize the actual figures, and Hansen and AB
shall promptly adjust the Fee as appropriate. The Fee shall be payable monthly
in arrears within thirty (30) days of the end of each calendar month.

“Gross Margin” shall mean for any applicable period the Wholesale Sales Amount
(defined below) for such period less the Cost of Sales (defined below) for such
period, but calculated only with respect to those of the Products that are sold
by such AB/Hansen Distributors to On-Premise Accounts within the AB Territory in
accordance with the applicable On-Premise Distribution Agreement/s. Exhibit D
attached to this Agreement specifies for illustrative purposes only how the
Gross Margin for the 8.3 ounce Monster Energy 24-pack loose was calculated for
the calendar quarter ending September 30, 2006. The parties acknowledge and
agree that the deductions reflected in Exhibit D are estimates only and have
been calculated with reference to non-on premise categories of business. In the
event of any inconsistency or conflict between what is specified in Exhibit D,
on the one hand, and the terms in this Section 9.1 that specify how the Gross
Margin and its various elements should be calculated, on the other, the terms of
this Section 9.1 shall prevail.

“Wholesale Sales Amount” shall mean for any applicable period the gross amount
invoiced by Hansen to AB/Hansen Distributors for Products sold to AB/Hansen
Distributors during such period that are sold by such AB/Hansen Distributor/s to
On-Premise Accounts within the AB Territory in accordance with the applicable
On-Premise Distribution Agreement/s, less deductions for (a) federal and state
excise tax to the extent paid for by Hansen, (b) customary discounts and sales
allowances paid, accrued or credited, (c) Products returned during such period,
and (d) permitted allowances, discounts, free cases or allowance programs (other
than to the extent allowances, discounts, free case or allowance programs are
agreed by the parties as part of the Annual Marketing Plan costs, as provided
for in Section 6 above) and commissions to third parties paid or incurred by
Hansen (which for sake of clarity does not include the Fees or the AB
Commissions) but calculated only with respect to those of the Products that are
sold by such AB/Hansen Distributors to On-Premise Accounts within the AB
Territory in accordance with the applicable On-Premise Distribution Agreement/s.

“Cost of Sales” shall mean for any applicable period Hansen’s cost of sales with
respect to Products sold to AB/Hansen Distributors during such period under the
terms of the applicable On-Premise Distribution Agreement/s calculated on the
same basis and in the same manner that cost of sales is calculated by Hansen for
the purposes of Hansen’s periodic financial statements from time to time
prepared in accordance with generally accepted accounting principals
consistently applied, plus an amount equal to five percent (5%) of the Wholesale
Sales Amount for such period as an allowance for freight and delivery costs out
plus a further amount equal to ten percent (10%) of the Wholesale Sales Amount
for such period as an allowance for indirect costs incurred by Hansen for, and
in connection with, the production of the Products but calculated only with
respect to those of the Products that are sold by such AB/Hansen Distributors to
On-Premise Accounts within the AB

Territory in accordance with the applicable On-Premise Distribution Agreement/s,
provided that no portion of such allowances shall be included in Cost of Sales.

9.2.         Commissions Payable by AB/Hansen Distributors. In exchange for AB’s
performance of its obligations under this Agreement, each AB/Hansen Distributor
will pay a commission to AB equal to the percentage set forth on Exhibit C of
the aggregate prices of Products invoiced by Hansen to that AB/Hansen
Distributor under the applicable On-Premise Distribution Agreement/s (the “AB
Commission/s”), but calculated only with respect to those of the Products that
are sold by such AB/Hansen Distributors to On-Premise Accounts within the
Territory. Hansen will collect the AB Commission/s from the AB/Hansen
Distributors on behalf of AB as provided in this Section. Except as set forth in
Section 9.3 below, Hansen agrees that it has no rights whatsoever in the AB
Commission/s and may not (a) include any AB Commission/s in its revenues or list
of assets, (b) pledge, grant, or allow any lien or security interest whatsoever
in any of the AB Commission/s, (c) retain any such AB Commission/s as full or
partial payment of any amount(s) allegedly owed to Hansen by AB under this
Agreement or by a AB/Hansen Distributor, or (d) take any action whatsoever
inconsistent with AB’s ownership of the AB Commission/s. All of Hansen’s
invoices to AB/Hansen Distributors will include the AB Commission/s, which will
be payable in accordance with the terms of the Hansen invoice. Hansen will
receive the AB Commission/s paid in accordance with such Hansen invoice and
subject to Section 9.3 below, remit the percentage set forth in Exhibit C of the
AB Commission/s payments to AB monthly, within fifteen (15) days of the end of
each calendar month. Hansen is in no way guaranteeing payment of the AB
Commission/s. Hansen will advise AB of any failure by an AB/Hansen Distributor
to pay on a timely basis any AB Commission/s for which it is liable within a
reasonable time following such default, and cooperate with AB’s reasonable
requests for assistance to collect AB’s share of any defaulted AB Commission/s
payments at no cost to Hansen. At AB’s request, Hansen will assign all its
rights to collect the defaulted AB Commission/s to AB. Hansen shall have no
obligations beyond those set forth in this Section to assist in the collection
of the AB Commission/s.

9.3.         Application of AB Commission/s to Marketing Expenses. Hansen will
be entitled to retain the percentage set forth on Exhibit C of all AB
Commission/s as a contribution towards its share of the approved Annual
Marketing Plan costs it is required to pay to AB in accordance with the
provisions of Section 6.2 above.

9.4          On-Premise and Off-Premise Sales of Products at One Location. In
the event a customer or account is licensed to sell alcohol beverages for
on-premise consumption, and/or otherwise sells Products for both on-premise and
off-premise consumption at one location, this Agreement will only apply to, and
the Fee and the AB Commission will only be computed with respect to, the sales
of Products for on-premise consumption by the On-Premise Account. With respect
to such customers or accounts, AB shall have the burden of providing or causing
the AB/Hansen Distributor/s to provide reliable and commercially reasonable
evidence sufficient to enable AB and Hansen to determine the actual amount of
on-premise sales of Products by the On-Premise Account at each such location. If
AB or the AB/Hansen Distributor/s provides such evidence, AB and Hansen shall
cooperate in good faith to establish an allocation of the sales of Products by
such customers or accounts based on such evidence. If AB and Hansen are unable
to reach an agreement with respect to such allocation, the matter shall be
resolved pursuant to the dispute resolution procedures set forth in Section 24,
providing that AB shall, at all times, bear the burden of proof by a
preponderance of the evidence, based on reliable and commercially reasonable

evidence, of on-premise sales of Products by such On-Premise Account.
Notwithstanding the foregoing, because the applicable laws and regulations of
the State of Pennsylvania permit bars and taverns in Pennsylvania to sell cold
alcohol beverages for off-premise consumption, AB and Hansen agree that all
sales of Products by such bars and taverns in Pennsylvania (that fall within the
definition of On-Premise Accounts) will be considered On-Premise Account sales
whether or not such Products are actually consumed on-premise.

 

10.

Confidentiality.

10.1.       Definition. As used herein, “Confidential Information” means any
information, observation, data, written material, records, documents, computer
programs, software, firmware, inventions, discoveries, improvements,
developments, designs, promotional ideas, customer lists, suppliers lists,
financial statements, practices, processes, formulae, methods, techniques, trade
secrets, products and/or research, in each such case, of or related to a party’s
products, organization, business and/or finances; provided, however,
Confidential Information shall not include any information which (a) is in the
public domain except through any intentional or negligent act or omission of the
non-disclosing party (or any agent, employee, shareholder, director, officer, or
independent contractor of or retained by such other party or any of its
Affiliates (defined in Section 16.1.1 below)), (b) can be shown by clear and
convincing tangible evidence to have been in the possession of the
non-disclosing party prior to disclosure by the disclosing party, (c) is legally
and properly provided to the non-disclosing party without restriction by an
independent third party that is under no obligation of confidentiality to the
disclosing party and that did not obtain such information in any illegal or
improper manner or otherwise in violation of any agreement with the disclosing
party, (d) is disclosed without any restrictions of any kind by the disclosing
party to third parties on a regular basis without any measures being taken,
whether explicitly or implicitly, by the disclosing party to protect the
confidentiality of such information, or (e) is independently generated by any
employee or independent contractor of or retained by the non-disclosing party,
and such employee or independent contractor has no knowledge of any of the
Confidential Information.

10.2.       Non-Disclosure Obligations. It is contemplated that in the course of
the performance of this Agreement each party may, from time to time, disclose
its Confidential Information to the other. Each party agrees that any such
Confidential Information (a) will be used solely as provided by the terms and
conditions of this Agreement, and (b) is intended solely for the information and
assistance of the other party in the performance of such party’s obligations or
exercise of such party’s rights under this Agreement and is not to be otherwise
disclosed. Each party will use its best efforts to protect the confidentiality
of the other party’s Confidential Information, which efforts shall be at least
as extensive as the measures such party uses to protect its own most valued
Confidential Information.

10.3.       Injunctive Relief. Each party acknowledges that the other party will
suffer irreparable harm if such party breaches any of the provisions regarding
confidentiality set forth in this Section 10 and that monetary damages will be
inadequate to compensate the other party for such breach. Therefore, if a party
(or any agent, employee, shareholder, director, officer, or independent
contractor of or retained by such other party or any of its Affiliates) breaches
any of such provisions, then the other party shall be entitled to injunctive
relief without bond (in addition to any other remedies at law or equity) to
enforce such provisions.

 

11.

Hansen’s Rights/Amendment/First Offer.

11.1.       Hansen’s Rights Regarding On-Premise Distribution Agreement/s.
Nothing in this Agreement should be construed as (a) granting AB Distributors
exclusive distribution rights for the Products, or (b) except as provided in
this Agreement, otherwise prohibiting Hansen from entering or maintaining
relationships with other distributors.

 

11.2.

Amendment of On-Premise Distribution Agreement/s.

11.2.1.       Section 6.b. and Exhibit E of the On-Premise Distribution
Agreement/s sets forth, without limitation, the terms under which the AB/Hansen
Distributor pays the AB Commission to Hansen (the “AB Commission Terms”). Hansen
covenants and agrees not to amend, modify, or delete any of the AB Commission
Terms in any of the On-Premise Distribution Agreement/s, without AB’s prior
written consent.

11.2.2.       Hansen covenants and agrees not to amend or modify the terms of
Section 21 (Competing Products) of any On-Premise Distribution Agreement/s with
an AB/Hansen Distributor (the “Competing Products Terms”), without AB’s prior
written consent.

11.2.3.       Hansen is entitled, without AB’s consent, to amend, modify, or
delete any provision of any On-Premise Distribution Agreement/s (other than the
AB Commission Terms and the Competing Products Terms), provided, however, that
any AB/Hansen Distributor terminated by Hansen for cause shall be treated as a
termination without cause for purposes of this Agreement if Hansen would not
have been entitled to terminate such AB/Hansen Distributor for cause had the
terms of the On-Premise Distribution Agreement/s originally entered into between
Hansen and such AB/Hansen Distributor instead been in effect.

11.3.       Right of First Offer for New Territories. If Hansen desires during
the term of this Agreement to enter into a distribution agreement with any
Person for distribution of any of the Products to On-Premise Accounts in a
territory in the U.S. and such territory is not already serviced by an AB/Hansen
Distributor under a On-Premise Distribution Agreement/s (in each case a “New
Territory”), Hansen shall notify AB in writing thereof (a “New Territory
Notice”). AB shall, within ten (10) days of its receipt of a New Territory
Notice, identify to Hansen the specific AB Distributor/s (the “Proposed New
Distributors”) to be appointed to distribute the Products to On-Premise Accounts
only in the respective New Territory/ies identified in the New Territory Notice.
Within fourteen (14) days after the date AB identifies the Proposed New
Distributor/s, Hansen may notify AB in writing that Hansen has rejected the
Proposed New Distributor/s for one of the reasons set forth in Section 2.4.
Hansen shall not be obligated to give a New Territory Notice for any territory
for which an AB Distributor/s has been rejected or has declined to enter into a
Distribution Agreement. If Hansen does not reject the Proposed New Distributor/s
within such fourteen (14) day period, AB shall promptly thereafter deliver to
the Proposed New Distributors an On-Premise Distribution Agreement/s, in
substantially the form of Exhibit A, subject to modification as agreed upon by
Hansen and AB. AB will deliver the respective On-Premise Distribution
Agreement/s to each Proposed New Distributor and use its best efforts to
recommend to, encourage, facilitate and assist each Proposed New Distributor to
enter into the On-Premise Distribution Agreement/s with Hansen; provided, that
such efforts shall not obligate AB to expend funds or extend other economic
incentives to any Proposed New Distributor to convince them to enter into
On-Premise Distribution Agreement/s with Hansen. AB will promptly return to
Hansen copies of the On-Premise Distribution Agreement/s executed by the
Proposed New Distributors who have agreed to enter into On-Premise Distribution
Agreement/s with Hansen. Within ten (10)

days of receipt of any On-Premise Distribution Agreement/s executed by a
Proposed New Distributor, Hansen will deliver the On-Premise Distribution
Agreement/s executed by Hansen to such Proposed New Distributor with a copy to
AB. If Hansen rejects a Proposed New Distributor, or if a Proposed New
Distributor declines to enter into an On-Premise Distribution Agreement/s with
Hansen, AB shall have the right, subject to Hansen’s prior written approval,
which Hansen may withhold in its sole discretion, to appoint a Substitute
Distributor to distribute the Products to On-Premise Accounts only in the New
Territory originally designated for such Proposed New Distributor. If AB does
not appoint a Substitute Distributor within fourteen (14) days of Hansen’s
rejection of a Proposed New Distributor, or if Hansen does not approve the
Substitute Distributor, Hansen shall have the right to appoint any Person (other
than the Substitute Distributor rejected by Hansen) as its distributor of
Products to On-Premise Accounts in the New Territory originally designated for
such Proposed New Distributor.

11.4.       Existing Other Products. Hansen shall promptly notify AB in writing
(an “EOP Option Notice”) if, during the term of this Agreement, Hansen elects,
in its discretion, to distribute any other non-alcoholic energy drink brands
which Hansen manufactures in ready to drink form that are substantially similar
to or competitive with the Products as of the date of this Agreement (other than
Joker, Ace, Blue Sky or Hansen’s ), including, without limitation, Unbound, Lost
and Rumba (the “Existing Other Products”) to On-Premise Accounts in the AB
Territory. AB shall have an option, for a period of thirty (30) days from
receipt of the EOP Option Notice, to elect to add the Existing Other Products
listed in the EOP Option Notice (the “Subject EOP”) to Exhibit B of this
Agreement. If AB fails or refuses to exercise such option by delivering written
notice thereof to Hansen prior to the expiration of such thirty (30) day option
period, then (i) AB’s option with respect to the Subject EOP shall be deemed to
have lapsed and shall be of no further force or effect only with respect to the
Subject EOP, and (ii) Hansen may thereafter enter into one or more agreements
with any other Person/s with respect to the distribution of the Subject EOP.
Notwithstanding the foregoing, Hansen and AB agree that neither of Hansen’s
existing energy drink products which are marketed and sold by or under the brand
names “Joker”, “Ace”, “Blue Sky” or “Hansen’s” shall be deemed to be Existing
Other Products for purposes of this Section 11.4.

11.5        Future Other Products. If, during the term of this Agreement, Hansen
elects, in its discretion, to distribute any non-alcoholic energy drinks in
ready to drink form that are developed or acquired by Hansen after the date of
this Agreement and are substantially similar to and competitive with the
Products (the “Future Other Products”), to On-Premise Accounts in the AB
Territory, Hansen may, in its discretion, either:

11.5.1.  Provide to AB, by written notice thereof (a “FOP Option Notice”), an
option to add one or more of the Future Other Products to Exhibit B of this
Agreement. AB shall have a period of thirty (30) days from receipt of the FOP
Option Notice, to elect to add the Future Other Products listed in the FOP
Option Notice (the “Subject FOP”) to Exhibit B of this Agreement. If AB fails or
refuses to exercise such option by delivering written notice thereof to Hansen
prior to the expiration of such thirty (30) day option period, then (i) AB’s
option with respect to the Subject FOP shall be deemed to have lapsed and shall
be of no further force or effect only with respect to the Subject FOP, and (ii)
Hansen may thereafter enter into one or more agreements with any other Person/s
with respect to the distribution of the Subject FOP; or

11.5.2.  Provide written notice to AB that Hansen has elected not to provide an
option to AB pursuant to Section 11.5.1 with respect to the applicable FOP, in
which case (i)

Hansen may enter into one or more agreements with any other Person/s with
respect to the distribution of any applicable FOP and any other future products,
providing such agreement does not become effective until not less than ninety
(90) days after the date of Hansen’s notice to AB, and (ii) upon the 90th day
after the date of Hansen’s notice to AB, the provisions of this Section 11.5 and
Section 12.1(b) below shall automatically terminate and shall thereafter be of
no further force or effect.

Notwithstanding the foregoing, Hansen and AB agree that Future Other Products
shall not include any other non-alcoholic energy drinks in ready to drink form
that are developed or acquired by Hansen after the date of this Agreement and
that are not designed or marketed to significantly compete with the Products in
On-Premise Accounts.

 

12.

Competitive Product/s.

 

12.1.

AB.

(a)         The following definitions apply solely to this Section 12.1 and
Section 17.2 below.

(i)          Except as otherwise provided in the next sentence, a “Competitive
Agreement” means any agreement, understanding or relationship similar in nature,
purpose or effect to this Agreement for the marketing or distribution of any
Competitive Product/s to On-Premise Accounts in any portion of the Competitive
Territory. A Competitive Agreement does not include (1) any distribution
agreement between AB and an AB Affiliate under which AB acts as master
distributor to On-Premise Accounts of products owned by such AB Affiliate (a
“Master Distributor Agreement”), or (2) any agreement pursuant to which AB
authorizes, permits, or obligates an AB Distributor or other distributor to
distribute to On-Premise Accounts, Competitive Product/s that (A) were
internally developed by AB or an Existing Affiliate, at any time, (B) were
acquired by AB or an AB Affiliate after the Effective Date, or (C) AB has the
right to distribute pursuant to a Master Distributor Agreement.

(ii)         “Competitive Product/s” means any shelf stable, non-alcoholic,
energy drink, in ready to drink form generally sold or merchandized in
On-Premise Accounts.

(iii)        “Competitive Territory” shall mean the territory collectively
covered by all On-Premise Distribution Agreement/s with AB/Hansen Distributors
that are in effect on the date any particular event specified in Section
12.1(b), Section 12.1(c), or Section 17.2 occurs; provided, however, that the
Competitive Territory shall not include (a) any territory covered by a
On-Premise Distribution Agreement/s in which Hansen has distributed to
On-Premise Accounts through means other than an AB/Hansen Distributor more than
one-third (1/3) of the cases of Products sold to On-Premise Accounts in such
territory during the shorter of (I) the 12-month period immediately preceding
the date of any such event, or (II) the period commencing on the Effective Date
and ending on the date of any such event, or (b) any territory in which AB is a
party to a Competitive Agreement that is in effect on the date Hansen and one or
more AB/Hansen Distributors enter into a On-Premise Distribution Agreement/s for
Products with respect to On-Premise Accounts in all or some of that territory.

(iv)         “Existing Affiliate” means any Person that is an Affiliate of AB on
the Effective Date.

(b)         AB agrees not to enter into a Competitive Agreement with any Person;
provided, however, that such restriction does not apply to any Competitive
Agreement under which each Competitive Product covered by such Competitive
Agreement was internally developed before or after the Effective Date by AB or
an Existing Affiliate.

(c)         Except for any Competitive Agreement not prohibited by the terms of
Section 12.1(b), AB will not (a) encourage or request that any AB Affiliate
enter into a Competitive Agreement with another Person, (b) consent to any AB
Affiliate entering into a Competitive Agreement with another Person so long as
AB has the contractual right to withhold its consent, or (c) facilitate or
assist in the negotiation or formation of any Competitive Agreement between an
AB Affiliate and another Person.

 

12.2.

Hansen.

 

(a)

The following definitions apply solely to this Section 12.2.

(i)          “Competitive Agreement” means any agreement, understanding or
relationship similar in nature, purpose or effect to this Agreement for the
distribution of the Products to On-Premise Accounts in any portion of the
Competitive Territory.

(ii)         “Competitive Territory” shall mean the territory collectively
covered by the On-Premise Distribution Agreement/s with AB/Hansen Distributors
that are in effect on the date the particular event specified in Section 12.2(b)
occurs; provided, however, that the Competitive Territory shall not include (a)
any territory covered by a On-Premise Distribution Agreement/s in which Hansen
has distributed to On-Premise Accounts through means other than an AB/Hansen
Distributor more than one-third (1/3) of the cases of Products sold in such
territory during the shorter of (I) the 12-month period immediately preceding
the date of any such event, or (II) the period commencing on the Effective Date
and ending on date of any such event, or (b) any territory in which Hansen is a
party to a Competitive Agreement that is in effect on the date Hansen and one or
more AB/Hansen Distributors enter into a On-Premise Distribution Agreement/s
relating to On-Premise Accounts in all or some of that territory.

(b)         Hansen agrees not to enter into a Competitive Agreement with any
Person.

13.          Termination of On-Premise Distribution Agreement/s. In the event of
any breach or default by an AB/Hansen Distributor under its On-Premise
Distribution Agreement/s with Hansen or any other occurrence that would give
rise to Hansen’s right to terminate such On-Premise Distribution Agreement/s,
Hansen will give AB written notice of such breach, default or occurrence at the
same time as Hansen delivers notice of such breach, default or occurrence to
such AB/Hansen Distributor, and AB shall have the same opportunity to cure such
breach, default, or occurrence as is provided to the AB/Hansen Distributor under
the On-Premise Distribution Agreement/s, if any. If the AB/Hansen Distributor
and AB fail to cure the breach, default, or occurrence within the applicable
cure period, if any, Hansen may terminate such On-Premise Distribution
Agreement/s pursuant to its terms and seek any remedies available under the On-

Premise Distribution Agreement/s or applicable law, in its sole and absolute
discretion. AB will not, and will not directly or indirectly participate in or
assist any Distributor to, challenge any right or remedy Hansen invokes under
any On-Premise Distribution Agreement/s, except to the extent that such
challenge may relate to a breach by Hansen of its obligations under this
Agreement or is reasonably necessary for AB to prevent a material impairment of
its rights under this Agreement. Hansen agrees that (a) AB is not obligated,
directly or indirectly, in any way under any of the On-Premise Distribution
Agreement/s, (b) AB has not expressly or implicitly agreed to guarantee the
performance of any AB/Hansen Distributor under its respective On-Premise
Distribution Agreement/s with Hansen, and (c) Hansen will not take any action
against AB to enforce an AB/Hansen Distributor’s obligation/s under its
On-Premise Distribution Agreement/s with Hansen. Hansen agrees that without the
prior written consent of AB, Hansen will not enter into a new agreement or
arrangement to distribute any of the Products with an AB/Hansen Distributor who
was terminated by Hansen without cause for a period of two (2) years from the
effective date of such termination.

14.          Term. Unless terminated by either party pursuant to the terms of
this Agreement, the initial term of this Agreement shall commence on the
Effective Date and shall end on May 8, 2026. After the Initial Term, this
Agreement shall, subject to being terminated by either party pursuant to the
terms of this Agreement, continue and remain in effect for as long as any
AB/Hansen Distributor continues to distribute some or all of the Products
pursuant to the terms of a On-Premise Distribution Agreement/s.

15.          Termination By Either Party. Without prejudice to its other rights
and remedies under this Agreement and those rights and remedies otherwise
available in equity or at law, either party may terminate this Agreement on the
occurrence of one or more of the following:

15.1.       Material Breach. The other party’s breach of a material provision of
this Agreement and failure to cure such breach within thirty (30) days after
receiving written notice describing such material breach in reasonable detail
from the non-breaching party; provided, however, if such breach is of a nature
that it cannot reasonably be cured within thirty (30) days, then the breaching
party shall have an additional sixty (60) day period to cure such breach,
providing it immediately commences, in good faith, its best efforts to cure such
breach.

15.2.       Insolvency. The other party: (a) makes any general arrangement or
assignment for the benefit of creditors; (b) becomes bankrupt, insolvent or a
“debtor” as defined in 11 U.S.C. Section 101 or any successor statute (unless
such petition is dismissed within sixty (60) days after its original filing);
(c) has appointed a trustee or receiver to take possession of substantially all
of such party’s assets or interest in this Agreement (unless possession is
restored to such party within sixty (60) days after such taking); or (d) has
substantially all of such party’s assets or interest in this Agreement (unless
such attachment, execution or judicial seizure is discharged within sixty (60)
days after such attachment, execution or judicial seizure) attached, executed,
or judicially seized.

 

15.3.

Agreement. Mutual written agreement of the parties.

 

16.

Termination on Change of Control.

16.1.       Definitions. The following definitions apply to this Section 16 and
wherever else they are used in this Agreement:

16.1.1. “Affiliate” of any specified Person means any other Person directly or
indirectly Controlling or Controlled by, or under common Control with, such
specified Person; provided, however, that it is agreed that AB does not Control
Grupo Modelo SA de CV (“Modelo”) or Modelo’s Affiliates.

16.1.2. A “Change of Control” shall have occurred with respect to a corporation
for purposes of this Agreement upon completion or consummation of any of the
following by or with respect to such corporation:

(a)          the shareholders or Board of Directors of such corporation approve
a definitive agreement to:

(i)           merge or consolidate with any other Person or in which all the
Voting Interests of such corporation outstanding immediately prior thereto
represent (either by remaining outstanding or being converted into Voting
Interests of the surviving corporation) less than 50% of the Voting Interests of
such corporation or the surviving entity immediately after such merger or
consolidation; or

(ii)          the sale or disposition by such corporation (in one transaction or
a series of transactions) of all or substantially all of such corporation’s
assets;

(b)         a plan of liquidation or dissolution of such corporation is
submitted to and approved by the shareholders of such corporation;

(c)           the sale or disposition by such corporation (in one transaction or
a series of transactions) of, (i) in the case of AB or its Parent, their alcohol
malt beverage business, or (ii) in the case of Hansen or its Parent, their
energy drink business;

(d)         any Person or group of Persons, other than (i) the Parent of such
corporation as of the date of this Agreement, or (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of such corporation,
becomes the beneficial owner directly or indirectly (within the meaning of Rule
13d-3 under the Act) of more than 50% of the Voting Interests of such
corporation, as a result of a tender offer or exchange offer, open market
purchases, privately negotiated purchases or otherwise;

(e)          in any share exchange, extraordinary dividend, acquisition,
disposition or recapitalization (or series of related transactions of such
nature) (other than a merger or consolidation), the holders of Voting Interests
of such corporation immediately prior thereto continue to own directly or
indirectly (within the meaning of Rule 13d-3 under the Act) less than 50% of the
Voting Interests of such corporation (or successor entity) immediately
thereafter; or

(f)           any group of Persons acting in concert in Control of such
corporation changes such that a different Person or group of Persons acting in
concert Control such corporation.

In addition, a Change of Control of Hansen or Hansen’s Parent shall be deemed to
have occurred if any Global Brewer, together with its Affiliates, becomes the
beneficial owner directly or indirectly (within the meaning of Rule 13d-3 under
the Act) of more than 20% of the Voting Interests of Hansen or Hansen’s Parent.

16.1.3. “Control” (including the correlative terms “Controlled by” and
“Controlling”) when used with respect to any specified Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Interests, by contract or otherwise.
Without limitation (a) any Person that, directly or indirectly, owns or
controls, or has the right to own or control (through the exercise of any
outstanding option, warrant or right, through the conversion of a security or
otherwise, whether or not then exercisable or convertible) 25% or more of the
outstanding Voting Interests of another Person or an aggregate of 25% or more of
the outstanding Voting Interests of a Person, its direct or indirect Parents or
the direct or indirect Subsidiaries of such Person shall be deemed to control
such Person for purposes of this term; and (b) any Person, that through any
combination of interests, holdings or arrangements, has, or upon the exercise of
any outstanding option, warrant or right, through the conversion of a security
or otherwise, whether or not then exercisable or convertible, would have, the
ability to elect 25% or more of the members of the governing board of any other
Person shall be deemed to control such Person for purposes of this term.

16.1.4. “Global Brewer” means any Person that, together with its Affiliates, has
produced and sold alcohol malt beverage products exceeding 15,000,000 Barrels in
the calendar year immediately preceding the date on which the provision of this
Agreement using this term is to be applied. A “Barrel” shall be equal to 31 U.S.
gallons.

16.1.5. “Governmental Entity” means any (a) nation, state, county, city, town,
village, district, or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); or (d)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any
nature.

16.1.6. “Parent” means (i) with respect to any corporation, limited liability
company, association or similar organization or entity, any Person (whether
directly, through one or more of its direct or indirect Subsidiaries) owning
more than 50% of the issued and outstanding Voting Interests of such
corporation, limited liability company, association or similar organization or
entity and (ii) with respect to any partnership, any Person (whether directly or
through one of its direct or indirect Affiliates) owning more than 50% of the
issued and outstanding general and/or limited partnership interests.

16.1.7. “Person/s” means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, corporation, or other entity or any
Governmental Entity.

16.1.8. “Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other organization or entity of
which more than 50% of the issued and outstanding Voting Interests or, in the
case of a partnership, more than 50% of the general partnership interests, is at
the time owned by such Person (whether directly, through one or more of such
Person’s direct or indirect Subsidiaries). For the avoidance of doubt, neither
Modelo nor any of its Subsidiaries is a Subsidiary of AB.

16.1.9. “Voting Interest” means equity interests in any entity of any class or
classes (however designated) having ordinary voting power for the election of
members of the governing body of such entity.

16.2.     Notice of Change of Control. As soon as is reasonably practical after
the occurrence of a Change of Control of a party to this Agreement or its
Parent, but in no event later than sixty (60) days thereafter, the party subject
to the Change of Control or whose Parent is subject to a Change of Control (the
“Subject Party”) shall deliver written notice to the other party (the “Other
Party”) that (a) states that a Change of Control has occurred with respect to
itself or its Parent; (b) states the date that the Change of Control was
consummated, if known; and (c) identifies the Person/s who acquired Control (the
“Change of Control Notice”).

16.3.     Termination on Change of Control. Within sixty (60) days of the Other
Party’s receipt of a Change of Control Notice, (a) the Other Party may terminate
this Agreement upon written notice to the Subject Party, without paying, or
incurring any liability or obligation to pay, any termination fee, penalty,
damages, or other compensation or (b) the Subject Party may terminate this
Agreement upon written notice to the Other Party.

 

17.

Termination by Hansen.

17.1.     Hansen may terminate this Agreement within sixty (60) days after
written notice to AB, without paying or incurring any liability or obligation to
pay any termination fee, penalty, damages, or other compensation, if less than
fifty percent (50%) of the AB Distributors offered by Hansen pursuant to the
terms of Section 2 and not rejected by Hansen pursuant to the terms of Section
2.6 have signed and delivered an On-Premise Distribution Agreement/s to Hansen
within fourteen (14) months after the Effective Date.

 

17.2.

17.2.1. Subject to the terms of Section 17.2.2 below, upon written notice to AB,
Hansen may terminate this Agreement within sixty (60) days after Hansen has
actual knowledge of either of the following occurrences: (a) AB distributes
anywhere in the Competitive Territory, through one or more AB Distributors, a
Competitive Product that was acquired by AB or an AB Affiliate from another
Person after the Effective Date, or (b) AB distributes anywhere in the
Competitive Territory, through one or more AB Distributors, a Competitive
Product of an AB Affiliate. Hansen’s right to terminate this Agreement under
this Section 17.2 shall be independent of and in addition to any other rights or
remedies of Hansen under this Agreement, including, without limitation, Sections
12.1 and 15.1 above, and the construction and interpretation of Section 12.1
shall not restrict, limit or otherwise affect the construction and
interpretation of this Section 17.2.

17.2.2. Hansen shall not be entitled to terminate this Agreement pursuant to the
terms of this Section 17.2 if the Competitive Product being distributed by AB,
through one or more AB Distributors, was internally developed before or after
the Effective Date by AB or an Existing Affiliate.

17.3.

17.3.1.  Without limiting any of its other rights under this Section 17, Hansen
shall have the right at any time after the Effective Date and prior to or on the
third anniversary of the Effective Date, upon written notice to AB, to terminate
this Agreement without cause or for no reason; provided, however, that such
termination is expressly conditioned on Hansen concurrently:

(i) terminating, without cause, the Amended and Restated Monster Beverages
Off-Premise Distribution Coordination Agreement effective as of May 8, 2006 (as
amended from time to time, the “Monster Beverages Coordination Agreement”); and

(ii) sending written notice of termination without cause to, except as provided
in the next sentence, each of the then existing AB/Hansen Distributors pursuant
to the terms of the applicable On-Premise Distribution Agreement/s and the
Distribution Agreement/s (as defined in, and attached as Exhibit A, to the
Monster Beverages Distribution Coordination Agreement) between Hansen and each
of those existing AB/Hansen Distributors. In order to satisfy the foregoing
condition, Hansen does not have to send written notices of termination without
cause to any AB/Hansen Distributors who at that time are in the process of being
terminated by Hansen for cause pursuant to the terms of their applicable
On-Premise Distribution Agreement/s and/or the Distribution Agreement/s (as
defined in, and attached as Exhibit A, to the Monster Beverages Distribution
Coordination Agreement) with Hansen.

17.3.2.  Without limiting any of its other rights under this Section 17, Hansen
shall have the right at any time after the third anniversary of the Effective
Date, upon written notice to AB, to terminate this Agreement without cause or
for no reason. Promptly after delivery of such termination notice, Hansen shall
either:

(a) Give written notice of termination without cause to, except as provided in
the next sentence, each of the then existing AB/Hansen Distributors pursuant to
the terms of the applicable On-Premise Distribution Agreement/s between Hansen
and each of those existing AB/Hansen Distributors. Notwithstanding the preceding
sentence, Hansen does not have to send written notices of termination without
cause to any AB/Hansen Distributors who at that time are in the process of being
terminated by Hansen for cause pursuant to the terms of their applicable
On-Premise Distribution Agreement/s with Hansen; or

(b) To the extent Hansen does not give written notice of termination without
cause to all then existing AB/Hansen Distributor/s of the applicable On-Premise
Distribution Agreement/s (other than those who at the time are in the process of
being terminated for cause) then the Monster Beverages Coordination Agreement
(if then subsisting between Hansen and AB) shall be deemed to include all sales
of Products by AB Distributors to On-Premise Accounts in the AB Territory under
the respective On-Premise Distribution Agreement/s that remain in effect, for
the purpose only of computing Net Sales (as defined in Section 6.1 of the
Monster Beverages Coordination Agreement) for the limited purpose of computing
the Commission defined in, and payable under, Section 6.1 of the Monster
Beverages Coordination Agreement. By way of example, such amendment will result
in sales of Products by Hansen to the AB/Hansen Distributors that are sold by
such AB/Hansen Distributors to On-Premise Accounts being subject to the
Commission and the AB Commission specified in the Monster Beverages Coordination
Agreement. Hansen shall notify each of then-existing AB/Hansen Distributors, in
writing, promptly after such termination,

and Hansen shall use its best efforts to amend each of the applicable On-Premise
Distribution Agreement/s to define the term “Coordination Agreement” in the
On-Premise Distribution Agreement/s as meaning the Monster Beverages
Coordination Agreement; provided, that such efforts shall not obligate Hansen to
expend funds or extend other economic incentives to any AB/Hansen Distributor to
convince them to so amend its On-Premise Distribution Agreement/s.

18.          Termination by AB. AB shall have the right, at any time, upon
written notice to Hansen, to terminate this Agreement without cause or for no
reason.

19.          Automatic Termination. If neither party has previously chosen to
terminate this Agreement pursuant to its terms and all On-Premise Distribution
Agreement/s with the AB/Hansen Distributors have been terminated for any reason
and/or expired pursuant to their terms, either party may terminate this
Agreement by notifying the other party, in writing, of such termination
effective no earlier than ten (10) business days after the date of such notice.

20.          Obligations on Termination. The expiration or termination of this
Agreement will not terminate any On-Premise Distribution Agreement/s that is
effective at the time of such expiration or termination. During the period
between a notice of termination and the effective date of termination, each
party shall continue to perform its obligations under this Agreement. Sections
10, 11.1, 21.1, 22, 23, 24, 25, 26 and 27 of this Agreement shall survive the
expiration or termination of this Agreement.

 

21.

Termination Fees.

21.1.       “Aggregate Termination Fee” means the aggregate of the Fees and the
percentage set forth on Exhibit C with respect to Section 9.3 of the AB
Commissions due to AB for the 12-month period ending on the last day of the last
calendar month preceding the effective date of termination of this Agreement,
for Products sold by Hansen under the On-Premise Distribution Agreement/s to
AB/Hansen Distributors who are AB/Hansen Distributors as of the effective date
of such termination but calculated only with respect to those of the Products
that are sold by such AB/Hansen Distributors to On-Premise Accounts within the
AB Territory. Each termination fee specified in this Section 21 will be due and
payable no later than thirty (30) days after the effective date of the
applicable termination and such obligation shall survive the termination or
expiration of this Agreement.

21.2.     If Hansen terminates this Agreement pursuant to the terms of Section
15.1 above, AB shall, without prejudice to Hansen’s rights and remedies
available under this Agreement, equity and/or applicable law, pay Hansen an
amount equal to the Aggregate Termination Fee multiplied by two.

21.3.     If AB terminates this Agreement pursuant to the terms of Section 15.1
above, Hansen shall, without prejudice to AB’s rights and remedies available
under this Agreement, equity and/or applicable law, pay AB an amount equal to
the Aggregate Termination Fee multiplied by two.

21.4.     If Hansen terminates this Agreement pursuant to the terms of Section
17.2 above, AB shall pay Hansen the Aggregate Termination Fee.

21.5.     If AB terminates this Agreement pursuant to terms of Section 18 above,
AB shall pay Hansen the Aggregate Termination Fee multiplied by two.

21.6.     If Hansen terminates this Agreement pursuant to the terms of Section
16.3.(b) above, Hansen shall pay AB the Aggregate Termination Fee.

21.7.     If Hansen terminates this Agreement pursuant to the terms of Section
17.3.above, Hansen shall pay AB the Aggregate Termination Fee multiplied by two.

21.8.     If Hansen terminates a On-Premise Distribution Agreement/s with an
AB/Hansen Distributor without cause, Hansen will pay AB a termination fee (in
each case, a “DA Termination Fee”) equal to the aggregate of the Fees and the
percentage of the AB Commissions set forth on Exhibit C with respect to Section
9.3 of this Agreement due AB in respect of the terminated On-Premise
Distribution Agreement/s during the 12-month period ending on the last day of
the last calendar month preceding termination multiplied by two.

21.9.     If AB terminates this Agreement pursuant to the terms of Section
16.3(b) above, AB shall pay Hansen the Aggregate Termination Fee.

21.10.   If Hansen only terminates a portion of the territory specified in a
particular On-Premise Distribution Agreement/s between Hansen and an AB/Hansen
Distributor, without cause, Hansen shall pay AB a partial termination fee (in
each case, a “Partial DA Termination Fee”) equal to the DA Termination Fee that
would be owed if the applicable On-Premise Distribution Agreement/s were fully
terminated on the date the partial termination occurs, multiplied by a fraction,
the numerator of which is the Wholesale Sales Amount for Products sold by Hansen
to such AB/Hansen Distributor under such On-Premise Distribution Agreement/s in
the terminated portion of the applicable territory during the twelve (12) months
immediately preceding such termination, and the denominator of which is the
Wholesale Sales Amount for Products sold by Hansen to such AB/Hansen Distributor
under such On-Premise Distribution Agreement/s in the entire applicable
territory during the twelve (12) months immediately preceding such termination
but in both instances calculated only with respect to those of the Products that
are sold by such AB/Hansen Distributors to On-Premise Accounts within the
portion of the applicable territory being terminated and the entire territory
specified in the applicable On-Premise Distribution Agreement/s, as the case may
be.

22.          Limitation of Damages; Limitation of Liability. EXCEPT FOR DAMAGES
RESULTING FROM INTENTIONAL TORTIOUS MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF GOODWILL,
BUSINESS INTERRUPTION, LOSS OF BUSINESS OPPORTUNITY, OR ANY OTHER PECUNIARY
LOSS) SUFFERED BY SUCH PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND/OR THE USE OF OR INABILITY
TO USE OR SELL THE PRODUCTS, AND/OR FROM ANY OTHER CAUSE WHATSOEVER, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES’
RESPECTIVE TOTAL LIABILITY FOR MONEY DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT WILL NOT EXCEED THE APPLICABLE

TERMINATION FEE PAYABLE PURSUANT TO SECTION 21 ABOVE. THESE LIMITATIONS WILL
APPLY REGARDLESS OF THE LEGAL THEORY OF LIABILITY, WHETHER UNDER CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER THEORY WHATSOEVER.

EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF
LIABILITY OR WARRANTIES, DISCLAIMER, OR EXCLUSION OF DAMAGES, IS EXPRESSLY
INTENDED TO BE SEVERABLE AND INDEPENDENT FROM ANY OTHER PROVISION, SINCE THOSE
PROVISIONS REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE PARTIES,
AND SHALL BE SEPARATELY ENFORCED. NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE IMPLIED WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) EXCEPT
THOSE SET FORTH IN THIS AGREEMENT.

 

23.

Books and Records; Examinations.

23.1.       For a period of at least two years following the expiration or
earlier termination of this Agreement, Hansen shall maintain such books and
records (collectively, “Hansen Records”) as are necessary to substantiate that
no payments have been made, directly or indirectly, by or on behalf of Hansen to
or for the benefit of any AB employee or agent who may reasonably be expected to
influence AB’s decision to enter into this Agreement or the amount to be paid by
AB pursuant hereto. (As used herein, “payments” shall include money, property,
services and all other forms of consideration.) All Hansen Records shall be
maintained in accordance with generally accepted accounting principles as
consistently applied by Hansen. AB and/or its representative shall have the
right at any time during normal business hours, upon seven (7) days written
notice, to examine the Hansen Records, but not more than once per year. The
provisions of this paragraph shall survive the expiration or earlier termination
of this Agreement.

23.2.       For a period of at least two years following the expiration or
earlier termination of this Agreement, AB shall maintain such books and records
(collectively, “AB Records”) as are necessary to substantiate that no payments
have been made, directly or indirectly, by or on behalf of AB to or for the
benefit of any Hansen employee or agent who may reasonably be expected to
influence Hansen’s decision to enter into this Agreement or the amount to be
paid by Hansen pursuant hereto. (As used herein, “payments” shall include money,
property, services and all other forms of consideration.) All AB Records shall
be maintained in accordance with generally accepted accounting principles as
consistently applied by AB. Hansen and/or its representative shall have the
right at any time during normal business hours, upon seven (7) days written
notice, to examine the AB Records, but not more than once per year. The
provisions of this paragraph shall survive the expiration or earlier termination
of this Agreement.

23.3.       Hansen shall keep complete and true books and other records
containing data in sufficient detail necessary to determine the Fee, the AB
Commission, the Gross Margin for each of the Products, the Cost of Sales for
each of the Products, the Wholesale Sales Amount for each of the Products, any
Aggregate Termination Fee, any DA Termination Fee, and any Partial DA
Termination Fee, as well as all components of each of these items.

23.4.       No more than once per calendar year, AB shall have the right, at its
own expense, to have the books and records kept by Hansen (and all related work
papers and other information and documents) examined by a nationally recognized
public accounting firm appointed by AB (in each case, an “Accounting Firm”) to
(a) verify the calculations of the Fee, the AB Commission, the Gross Margin for
each of the Products, the Cost of Sales for the Products, the Wholesale Sales
Amount for the Products, any Aggregate Termination Fee, any DA Termination Fee,
any Partial DA Termination Fee, and/or any component of any of the foregoing,
and (b) and to verify the resulting payments required under this Agreement.
Prior to conducting any such examination, the Accounting Firm shall have agreed
to hold in confidence and not disclose to anyone, other than the parties or
unless required by applicable law, all information reviewed by or disclosed to
the Accounting Firm during such examination.

23.5.       AB shall keep complete and true books and other records containing
data in sufficient detail necessary to determine the Annual Marketing Plan Costs
incurred by AB in connection with the implementation of the Annual Marketing
Plan in accordance with Section 6.2 above.

23.6.       No more than once per calendar year, Hansen shall have the right, at
its own expense, to have the books and records kept by AB (and all related work
papers and other information and documents) examined by an Accounting Firm (a)
to verify the Annual Marketing Plan Costs incurred by AB in accordance with
Section 6.2 above and (b) to verify the resulting reimbursement due AB from
Hansen under this Agreement. Prior to conducting any such examination, the
Accounting Firm shall have agreed to hold in confidence and not disclose to
anyone, other than the parties or unless required by applicable law, all
information reviewed by or disclosed to the Accounting Firm during such
examination.

 

24.

Dispute Resolution.

24.1.       Subject to the terms of Section 6.4, any controversy, claim or
dispute of whatever nature arising out of or in connection with this Agreement
or the breach, termination, performance or enforceability hereof or out of the
relationship created by this Agreement (a “Dispute”) shall be finally resolved
by arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (“AAA”) in effect on the date of this
Agreement. The parties understand and agree that they each have the right to
apply to a court of competent jurisdiction for a temporary restraining order, a
preliminary injunction or other equitable relief to preserve the status quo or
prevent irreparable harm. Unless otherwise agreed in writing by the parties
hereto, the arbitral panel shall consist of three (3) arbitrators, each of whom
shall be a retired judge from a State other than California or Missouri and
shall be appointed by the AAA in accordance with Section 24.2 below. The place
of arbitration shall be Dallas, Texas. Judgment upon the award may be entered,
and application for judicial confirmation or enforcement of the award may be
made, in any competent court having jurisdiction thereof. Other than as required
or permitted by an applicable governmental entity, each party will continue to
perform its obligations under this Agreement pending final resolution of any
such Dispute. The parties knowingly and voluntarily waive their rights to have
any Dispute tried and adjudicated by a judge or a jury.

24.2.       Immediately after the filing of the submission or the answering
statement or the expiration of the time within which the answering statement is
filed, the AAA shall send simultaneously to each party to the dispute an
identical list of ten (10) (unless the AAA decides that

a larger number is appropriate) names of retired judges from the National Roster
from States other than California or Missouri. The parties shall attempt to
agree on the three arbitrators from the submitted list and advise the AAA of
their agreement. If the parties are unable to agree upon the three arbitrators,
each party to the dispute shall have 15 days from the transmittal date in which
to strike no more than three (3) names objected to, number the remaining names
in order of preference, and return the list to the AAA. If a party does not
return the list within the time specified, all persons named therein shall be
deemed acceptable. From among the persons who have been approved on both lists,
and in accordance with the designated order of mutual preference, the AAA shall
invite the acceptance of the three arbitrators to serve. If the parties fail to
agree on any of the persons named, or if acceptable arbitrators are unable to
act, or if for any other reason the appointment cannot be made from the
submitted lists, the AAA shall have the power to make the appointment from among
other retired judges on the National Roster from States other than California or
Missouri without the submission of additional lists.

24.3.       The arbitration shall be governed by the laws of the State of
California, without regard to its conflicts-of-law rules, and by the arbitration
law of the Federal Arbitration Act (Title 9, U.S. Code). The arbitrators shall
base the award on the applicable law and judicial precedent that would apply,
and the arbitrators shall have no authority to render an award that is
inconsistent therewith. The award shall be in writing and include the findings
of fact and conclusions of law upon which is it based if so requested by either
party. Except as may be awarded to the prevailing party, each party shall bear
the expense of its own attorneys, experts, and out of pocket costs as well as
fifty percent (50%) of the expense of administration and arbitrators’ fees.

24.4.       Except as otherwise required by law, the parties and the arbitrators
shall keep confidential and not disclose to third parties any information or
documents obtained in connection with the arbitration process, including the
resolution of the Dispute.

24.5.       Notwithstanding anything to the contrary in this Agreement, EACH
PARTY WAIVES THE RIGHT IN ANY ARBITRATION OR JUDICIAL PROCEEDING TO RECEIVE
CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES. THE ARBITRATORS SHALL NOT HAVE
THE POWER TO AWARD CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES.

25.          Attorney’s Fees. In the event any litigation, arbitration,
mediation, or other proceeding (“Proceeding”) is initiated by any party against
any other party to enforce, interpret or otherwise obtain judicial or
quasi-judicial relief in connection with this Agreement, the prevailing party in
such Proceeding shall be entitled to recover from the unsuccessful party
reasonable attorneys fees and costs directly related to (1) such Proceeding
(whether or not such Proceeding proceeds to judgment), and (2) any post-judgment
or post-award proceeding including, without limitation, one to enforce any
judgment or award resulting from any such Proceeding.

 

26.

Hansen Marks.

26.1.       Hansen hereby grants to AB, upon the terms and conditions set forth
in this Agreement, the non-exclusive, non-transferable right during the term of
this Agreement to use the Hansen Marks (as defined below) solely in connection
with marketing, promotion, merchandising and sales of Products to On-Premise
Accounts only throughout the AB Territory, in accordance with this Agreement.
“Hansen Marks” means the trademarks, trade names, brand names, and logos

(whether or not registered), copyright material and other intellectual property
owned by Hansen and used by it on the Products and/or in connection with the
production, labeling, packaging, marketing, sale, advertising, and promotion of
the Products. AB acknowledges and agrees that all Hansen Marks shall be and
remain the exclusive property of Hansen. No right, title or interest of any kind
in or to the Hansen Marks is transferred by this Agreement to AB, except a
non-exclusive license to use the Hansen Marks, subject to the terms and
conditions of this Agreement. AB agrees that it will not attempt to register the
Hansen Marks, or any marks confusingly similar thereto, in any form or language
anywhere in the world. AB further agrees that during the term of this Agreement
it will not contest the validity of the Hansen Marks or the ownership thereof by
Hansen, or take any action that would in any way impair or tend to impair any
portion of the rights of Hansen in and to the Hansen Marks. AB’s use of the
Hansen Marks will inure for the benefit of Hansen.

 

26.2.

Infringement of Hansen’s Marks.

26.2.1.  If during the term of this Agreement a third party institutes against
Hansen or AB any claim or proceeding that alleges that the use of any Hansen
Mark in connection with the marketing, promotion, merchandising and/or sales of
the Products under this Agreement infringes the intellectual property rights
held by such third party (in each case, an “Infringement Claim”), then Hansen
shall subject to the terms of Section 26.2.2 below, in its sole discretion, and
at its sole expense, contest, settle, and/or assume direction and control of the
defense or settlement of, such action, including all necessary appeals
thereunder. AB shall use all reasonable efforts to assist and cooperate with
Hansen in such action, subject to Hansen reimbursing AB for any reasonable
out-of-pocket expenses incurred by AB in connection with such assistance and
cooperation. If, as a result of any such action, a judgment is entered by a
court of competent jurisdiction, or settlement is entered by Hansen, such that
any Hansen Mark cannot be used in connection with the marketing, promotion,
merchandising and/or sales of the Products under this Agreement without
infringing upon the intellectual property rights of such third party, then
Hansen and AB promptly shall cease using such affected Hansen Mark in connection
with the marketing, promotion, merchandising and/or sale of the Products under
this Agreement. Neither party shall incur any liability or obligation to the
other party arising from any such cessation of the use of the affected Hansen
Mark.

26.2.2. Hansen agrees to indemnify, protect and defend AB, AB’s Parent, and AB’s
Affiliates, and its and their respective directors, officers, employees and
agents (the “AB Indemnified Parties”) from and against any and all injuries,
claims, liabilities, losses, expenses, damages, actions, and judgments of
whatsoever type or nature, including, without limitation, reasonable third party
attorneys' fees and expenses, court costs, and other third party legal expenses
(“Liabilities”) incurred by any AB Indemnified Party solely in connection with
any Infringement Claim; provided that Hansen’s indemnification obligations under
this Section 26.2.2 shall not apply to any Liabilities incurred by any AB
Indemnified Party as a result of such AB Indemnified Party’s use of any Hansen
Marks not approved or authorized by Hansen.

26.3.       Termination. Upon expiration or termination of this Agreement, AB
shall cease and desist from any use of the Hansen Marks and any names, marks,
logos or symbols confusingly similar thereto.

 

27.

Miscellaneous Provisions.

27.1.       No Employment Relationship. Notwithstanding any language in this
Agreement to the contrary, the parties intend that their relationship will be
only as set forth in this Agreement. Neither party nor any employee, agent,
officer, or independent contractor of or retained by either party shall be
considered an agent or employee of the other party for any purpose or entitled
to any of the benefits that the other party provides for any of the other
party’s employees. Furthermore, each party acknowledges that it shall be
responsible for all federal, state and local taxes for it and its employees and
reports relative to fees under this Agreement and each party will indemnify and
hold the other party harmless from any failure to file necessary reports or pay
such taxes.

27.2.       Integration. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter of this Agreement and is intended
by the parties to be a final expression of their understanding and a complete
and exclusive statement of the terms and conditions of the agreement. This
Agreement supersedes any and all agreements, either oral or in writing, between
the parties concerning the subject contained herein and contains all of the
covenants, agreements, understandings, representations, conditions, and
warranties mutually agreed to between the parties. This Agreement may be
modified or rescinded only by a writing signed by the parties hereto or their
duly authorized agents.

27.3.       Choice of Law. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of California, without giving
effect to any conflict-of-law rules requiring the application of the substantive
laws of any other jurisdiction.

27.4.       Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, executors, administrators,
legal administrators, legal representatives, successors and assigns. This
Agreement shall not be assignable by either party without the prior written
consent of the other party; provided, however, that in the event of the Change
of Control of a party to this Agreement (the “Change of Control Party”) or its
Parent in which the other party to this Agreement chooses not to exercise its
termination rights under Section 16.3 above and this Agreement is assumed by the
surviving entity or successor to the Change of Control Party, or by the acquirer
of substantially all of the Change of Control Party’s assets as a matter of law,
the Change of Control Party shall be entitled to assign all of its rights and
obligations under this Agreement to such Person without the other party’s
consent so long as such successor, surviving entity or acquirer agrees in
writing to unconditionally assume all of the Change of Control Party’s rights
and obligations under this Agreement.

27.5.       Counterparts. This Agreement may be signed in one (1) or more
counterparts, each of which shall constitute an original but all of which
together shall be one (1) and the same document. Signatures received by
facsimile shall be deemed to be original signatures.

27.6.       Partial Invalidity. Each provision of this Agreement will be valid
and enforceable to the fullest extent permitted by law. If any provision of this
Agreement or the application of the provision to any person or circumstance
will, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of the provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, will not be affected
by

such invalidity or unenforceability, unless the provision or its application is
essential to this Agreement.

27.7.       Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

27.8.       Drafting Ambiguities. Each party to this Agreement and their legal
counsel have reviewed and revised this Agreement. The rule of construction that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any amendments or exhibits
to this Agreement.

27.9.       Notices. All notices or other communications required or permitted
to be given to a party to this Agreement shall be in writing and shall be
personally delivered, sent by certified mail, postage prepaid, return receipt
requested, or sent by an overnight express courier service that provides written
confirmation of delivery, to such party at the following respective address:

If to Hansen:

Hansen Beverage Company

 

1010 Railroad Street

 

Corona, California 92882

 

Attention: Chief Executive Officer

 

Telecopy: (951) 739-6210

 

with a copy to:

 

Solomon Ward Seidenwurm & Smith LLP

 

401 B Street, Suite 1200

 

San Diego, California 92101

 

Attention: Norman L. Smith, Esq.

 

Telecopy: (619) 231-4755

 

If to AB:

 

Anheuser Busch, Incorporated

 

One Busch Place

 

St. Louis, Missouri 63118

 

Attention: Vice President, Business and Wholesaler Development

 

Telecopy: (314) 577-4846

 

with a copy to:

 

Anheuser-Busch Companies, Inc.

 

One Busch Place 202-6

 

St. Louis, MO 63118

 

Attention: General Counsel

 

Telecopy: (314) 577-0776

Each such notice or other communication shall be deemed given, delivered and
received upon its actual receipt, except that if it is sent by mail in
accordance with this Section, then it shall be deemed given, delivered and
received three (3) days after the date such notice or other communication is
deposited with the U.S. Postal Service in accordance with this Section. Any
party to this Agreement may give a notice of a change of its address to the
other party to this Agreement.

27.10.       Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended or shall be construed to give any Person, other than the
parties to this Agreement and their successors and permitted assigns, any legal
or equitable right, remedy or claim under or in respect of any agreement or any
provision contained in this Agreement.

 

28.

Force Majeure.

28.1.     Neither party shall be liable for delays in delivery or failure to
perform due directly or indirectly to causes beyond such party’s reasonable
control (each, individually, a “Force Majeure Event”) including, without
limitation: (1) acts of God, act (including failure to act) of any governmental
authority (de jure or de facto), wars (declared or undeclared), governmental
priorities, port congestion, riots, revolutions, strikes or other labor
disputes, fires, floods, sabotage, nuclear incidents, earthquakes, storms,
epidemics; or (2) inability to timely obtain either necessary and proper labor,
materials, ingredients, components, facilities, production facilities, energy,
fuel, transportation, governmental authorizations or instructions, material or
information. The foregoing shall apply even though any Force Majeure Event
occurs after such party’s performance of its obligations is delayed for other
causes.

28.2.       The party affected by a Force Majeure Event shall give written
notice to the other party of the Force Majeure Event within a reasonable time
after the occurrence thereof, stating therein the nature of the suspension of
performance and reasons therefore. Such party shall use its commercially
reasonable efforts to resume performance as soon as reasonably possible. Upon
restoration of the affected party’s ability to perform its obligations
hereunder, the affected Party shall give written notice to the other party
within a reasonable time.

 

29.

Insurance.

 

29.1.     Hansen records that as of September 30, 2006 it maintained the
following types and amounts of insurance (“Current Insurance”):

 

A.) Commercial General Liability insurance with Product Liability coverage for
the sale of products in an amount of $1,000,000 each occurrence and $2,000,000
in the aggregate.

 

B.) Umbrella Liability insurance which provides excess coverage to the insurance
outlined in A above in an amount of $20,000,000 each occurrence and $40,000,000
in the aggregate.

 

29.2.     Hansen agrees that during the term of this Agreement it will use
reasonable commercial efforts to maintain in effect policies of insurance with
reasonably comparable terms and benefits to the Current Insurance provided,
however, that Hansen is able to procure and maintain such insurance at
comparable cost and premiums, and on terms and with benefits that are comparable
to the Current Insurance. Notwithstanding the foregoing and in addition thereto,
Hansen shall be entitled to alter the types and/or terms and/or reduce the
benefits of the insurance

to such levels as Hansen reasonably determines are commercially reasonable or
appropriate in the circumstances and which may include, without limitation, a
drop in Hansen sales levels or a change in financial conditions but to no less
Product Liability insurance coverage than $10,000,000 each occurrence and
$20,000,000 in the aggregate (the “Reduced Minimum Insurance”), provided that
the insurance premium/s payable by Hansen for the Reduced Minimum Insurance at
any time (including without limitation any additional premium/s that may be
necessary to provide all material terms and benefits, including without
limitation the applicable deductible and excess requirements and coverage
benefits that are provided under the Current Insurance), do not exceed 50% of
the premium/s payable with respect to the Current Insurance multiplied by a
fraction of the nominator of which is Hansen’s net income during the twelve (12)
month period ended on the last day of the calendar month preceding the proposed
insurance policy/ies effective date and the denominator is Hansen’s net income
for the 2006 calendar year.

 

29.3.     Hansen agrees to procure that the insurers of the policies of
insurance maintained in accordance with this Section 29 shall issue to AB a
certificate naming AB as an additional named insured thereunder, and Hansen
shall, from time to time, provide AB with evidence of such insurance.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized officers as of the Effective Date.

 

HANSEN BEVERAGE COMPANY,

ANHEUSER-BUSCH, INCORPORATED,

a Delaware corporation

a Missouri Corporation

 

By:__/s/Rodney Sacks_____________

By:___/s/David A. Peacock_______

 

Rodney Sacks

David A. Peacock

 

Chief Executive Officer

Vice President