Exhibit 10.6

 

Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

MONSTER ENERGY
BELGIAN DISTRIBUTION AGREEMENT

 

This BELGIAN DISTRIBUTION AGREEMENT (“Agreement”) is entered into as of
October 3, 2008 (the “Effective Date”) between TAURANGA LTD, a company organized
and existing under the laws of the Republic of Ireland, trading as MONSTER
ENERGY (“MEL”) with offices at South Bank House, Barrow Street, Dublin 4,
Ireland, and COCA-COLA ENTERPRISES INC., a Delaware corporation with offices at
2500 Windy Ridge Parkway, Atlanta, Georgia 30339 (“Distributor”).

 

1.                                       Recitals and Definitions.

 

a.                                       MEL is a wholly owned subsidiary of
Hansen Beverage Company, a Delaware corporation (“HBC”).  HBC owns the exclusive
right, title and interest in and to the Trademarks (as defined below).  MEL has
been authorized by HBC to use the Trademarks (as defined below) and manufacture,
promote, market, distribute and sell, including without limitation through
distributors appointed by MEL, the Products (as defined below) throughout the
Territory (as defined below).

 

b.                                      Distributor is a leading producer and
distributor of beverages throughout Belgium and has substantial experience in
the distribution of beverages.  Distributor has developed and implemented
successful marketing plans and/or systems for such distribution and which are
substantially associated with the trademarks and trade name of The Coca-Cola
Company (“KO”).  KO has designated Distributor, and MEL wishes to appoint
Distributor, as a distributor of Products (as defined below) as part of
Distributor’s business operations and systems, with performance to commence as
of November 1, 2008, or such other date as may be mutually agreed by the parties
in writing, but which in no event shall be later than November 30, 2008 (the
“Commencement Date”).

 

c.                                       When used herein the word “Products”
means (i) those products identified in Exhibit A hereto with an “X” as well as
all other shelf-stable, non-alcoholic, Energy Drinks (as defined below) in ready
to drink form, that are packaged and/or marketed by HBC at any time after the
Effective Date under the primary brand name “Monster” or any other primary brand
name having “Monster” as a derivative or part of such name, and which may, but
are not required, to contain the “ “ mark, and/or the “M” icon, that HBC
distributes from time to time through its network of full-service distributors
in the United States such as, without limitation, the Anheuser-Busch
Distributors, Miller/Coors distributors, and Coke/Pepsi/Dr. Pepper-7UP Bottlers;
and (ii) such additional Energy Drinks, whether marketed under the Trademarks
(as defined below) or otherwise, as MEL, Distributor and KO shall agree from
time to time by executing an amended Exhibit A. The Products shall include all
sizes of SKUs including, without limitation, 3 oz., 8 oz., 15 oz., 16 oz., 16.9
oz., 23.5 oz., 24 oz. and 32 oz. SKUs.  When used herein (i) the word
“Territory” means the territory identified in Exhibit B hereto, (ii) the word
“Distributor’s Accounts” means those accounts or classes of accounts identified
in Exhibit C hereto other than those reserved for MEL as identified on
Exhibit C, (iii) the word “Trademarks” means those names and marks identified on
Exhibit D hereto, and (iv) the words “Energy Drink/s”  means any ***.

 

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*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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2.                                       Appointment.

 

a.                                       are excluded from the definition of
Distributor’s Accounts are expressly reserved for MEL, or such other
distributors as MEL may from time to time appoint.  Distributor shall be
entitled to appoint sub-distributors within the Territory provided that the
terms of such appointment shall provide that the sub-distributors shall not
actively seek or solicit customers for the Products outside the Territory or any
customers located within the Territory other than the Distributor’s Accounts set
forth on Exhibit C, and the terms of such appointments shall not be inconsistent
with the terms and conditions of this Agreement and shall be subject to MEL’s
rights hereunder.  MEL acknowledges that Distributor intends to appoint a
sub-distributor with respect to the Territory, as identified on Exhibit B-1
hereto.  Except for the initial sub-distributor identified on Exhibit B-1
hereto, Distributor’s appointment of sub-distributors shall be to supplement and
augment but not to replace or substitute, wholly or partially, Distributor’s
resources, performance capabilities and/or ability to fully perform all of
Distributor’s obligations under this Agreement, including without limitation, as
provided in Section 3 below, in the Territory.  Distributor will remain liable
for the actions, omissions and performance of all of Distributor’s
sub-distributors.

 

b.                                      Distributor shall not directly or
indirectly, alone or in conjunction with any other person or entity (i) actively
seek or solicit customers or accounts for the Products outside the Territory or
any customers or accounts located within the Territory other than Distributor’s
Accounts set forth on Exhibit C (in particular, but without limiting the above,
Distributor shall not actively approach customers outside the Territory or
accounts other than Distributor’s Accounts in the Territory, whether by direct
mail, visits, promotions or media advertising targeted at such customers, or
otherwise), and/or (ii) actively sell, market, distribute or otherwise dispose
of any Products to any persons or entities located outside the Territory or to
any persons or entities located within the Territory who Distributor knows or
reasonably believes will distribute or resell the Products outside the
Territory.  During the Term, Distributor shall purchase exclusively and directly
from MEL or its nominees (and from no other person or entity) all of its
requirements for Products.

 

c.                                       Distributor acknowledges and agrees
that it has no right to distribute any products of HBC other than the Products
identified in Exhibit A hereto with an “X.”  Any sales by MEL to Distributor of
any products of HBC that are not the Products identified in Exhibit A with an
“X” and/or that are not listed on Exhibit A, and/or any products sold by MEL to
Distributor and/or its sub-distributor(s) beyond the scope, term or after the
termination of this Agreement, with or without cause, for any reason or no
reason at all (i) shall not constitute, be construed as, or give rise to, any
express or implied distribution agreement, course of conduct or other
relationship between MEL and Distributor, (ii) shall not confer upon Distributor
or its sub-distributor(s) any rights of any nature whatsoever, including without
limitation to purchase, sell, market or distribute or continue to purchase,
sell, market or distribute any products, including Products, or use the
Trademarks other than with respect to products sold and delivered by MEL to
Distributor, and (iii) shall constitute a separate transaction for each shipment
of products actually delivered by MEL to Distributor and/or sub-distributor(s),
in MEL’s sole and absolute discretion, which MEL shall be entitled to exercise,
vary, withdraw and/or cease, on a case by case basis, at any time in MEL’s sole
and absolute discretion.  Distributor irrevocably waives, releases and
discharges any claims, liabilities, actions and rights, in law or in equity,
against MEL including without limitation for damages (including without
limitation, consequential, special or punitive damages), compensation or
severance payments or any other claims of whatsoever nature by Distributor
arising from or in connection with the matters referred to in this Section 2.c.
and/or any acts, omissions or conduct of MEL with regard to such matters.

 

d.                                      Distributor shall, at its sole expense,
obtain all import licenses and governmental permits and approvals which may be
necessary to permit the sale of Products in the Territory.  Distributor shall
also comply with any and all governmental laws, regulations, and orders which
are applicable to Distributor by reason of its execution of this Agreement,
including any and all laws, regulations or orders in the Territory which govern
or affect the ordering, export, shipment, import, sale, delivery or redelivery
of Products in the Territory. Distributor shall also

 

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notify MEL of the existence and content of any provision of law which to
Distributor’s knowledge conflicts with any provisions of this Agreement at the
time of its execution or thereafter. In the export of Products from the United
States, Distributor shall further comply with the applicable law of the
Territory, as well as U.S. laws and regulations governing exports, including the
Export Administration Act and regulations thereunder, and the U.S. Boycott
Regulations.

 

e.                                       MEL and its affiliates (if applicable)
will include a provision comparable to subsections 2.b.(i) and 2.b.(ii) above in
its distribution agreements with distributors in territories within the European
Economic Area.  If any other distributor appointed by MEL or its affiliates in
the European Economic Area (1) actively seeks and solicits customers in
Distributor’s exclusive accounts as identified on Exhibit C for Products in the
“Territory,” or (2) actively sells, markets, distributes or otherwise disposes
of any Products, either directly or indirectly to any persons or entities
located within its territory who such distributor knows or reasonably believes
will distribute or resell the Products inside the Territory, MEL or its
affiliates will take commercially reasonable steps to enforce MEL’s or its
affiliates (as the case may be) rights under any distribution agreement, to the
extent enforceable under applicable law, to address the importation of Products
into the Territory in violation of any applicable distribution agreement
relating to the Products.  MEL or its affiliates will take necessary
commercially reasonable steps to enforce MEL’s or its affiliates (as the case
may be) rights (A) against any other distributors to address the importation of
Products into the Territory in violation of applicable distribution agreements
with such other distributors relating to the Products to which MEL or its
affiliates are a party, and (B) to prevent such other distributors from
breaching provisions comparable to subsections 2.b.(i) and 2.b.(ii), above, to
the extent that MEL or its affiliates shall be entitled to do so pursuant to the
terms of its distribution agreements with such distributors and to the extent
enforceable under applicable law. Distributor shall cooperate and, if necessary
and required by MEL, join with MEL in all such proceedings in accordance with
the foregoing.  Distributor shall have no claim, and MEL or its affiliates shall
have no liability, arising from the sale of Products by such other distributors
in the Territory, except to require MEL or its affiliates to enforce the
above-mentioned provisions in the applicable distribution agreements.

 

f.                                         The parties acknowledge that it is
their current mutual intention that they will consider in due course entering
into a written agreement on mutually acceptable terms to provide for the
manufacture of certain Products in the Territory. This subsection 2.f shall not
be enforceable against either party unless and until an enforceable agreement
has been executed by both parties.

 

3.                                       Distributor’s Duties.  Distributor
shall:

 

a.                                       Use commercially reasonable good faith
efforts to actively and diligently promote, solicit and push vigorously the wide
distribution and sale of the Products to Distributor’s Accounts in the
Territory, and shall allocate and devote thereto at least such resources and
efforts as are proportional to the volume that Distributor’s sales of Products
in the Territory represent to the volume of Distributor’s sales of the principal
(Flagship) brand of Energy Drinks (including energy colas) of KO, Distributor
and their respective affiliates from time to time in the Territory.  Without
detracting from the foregoing, the resources and efforts that Distributor shall
allocate and devote to the promotion, marketing and distribution of the Products
shall in no event be less than the resources and efforts Distributor allocates
and devotes to the promotion, marketing and distribution of all Energy Drinks
(including energy colas) of KO, Distributor and their respective affiliates,
unless to do so (with respect to Distributor’s obligations under this sentence)
would not be commercially feasible based on the then-current sales volumes of
the Products;

 

b.                                      Use commercially reasonable good faith
efforts to actively and diligently develop new business opportunities for
Products in Distributor’s Accounts in the Territory, and shall allocate and
devote thereto at least

 

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such resources and efforts as are proportional to the volume that Distributor’s
sales of Products in the Territory represent to the volume of Distributor’s
sales of the principal (Flagship) brand of Energy Drinks (including energy
colas) of KO, Distributor and their respective affiliates from time to time in
the Territory.  Without detracting from the foregoing, the resources and efforts
that Distributor shall allocate and devote to develop new business opportunities
for Products at early sales presentations and during the new business
development phase shall in no event be less than the resources and efforts
Distributor allocates and devotes to develop new business opportunities for all
Energy Drinks (including energy colas) of KO, Distributor and their respective
affiliates at early sales presentations and during the new business development
phase;

 

c.                                       Use commercially reasonable efforts to
actively and diligently manage all of Distributor’s sub-distributors throughout
the Territory to gain system alignment to promote the sale and distribution of
Products;

 

d.                                      Secure extensive in-store merchandising
and optimal shelf positioning in Distributor’s Accounts in the Territory with
respect to Products;

 

e.                                       Perform complete and efficient
distribution functions to and in Distributor’s Accounts throughout the Territory
to the reasonable satisfaction of MEL;

 

f.                                         Fully implement the Annual Business
Plan (as defined and to be agreed upon from time-to-time in accordance with
Section 13.b. below), and use commercially reasonable good faith efforts to
achieve and maintain all of the objectives set with respect thereto as
contemplated in Section 13.b below;

 

g.                                      Achieve and maintain the Performance
Targets (as defined and determined each calendar year in accordance with
Section 13.d. below);

 

h.                                      In relation to the sales of the Products
only, permit MEL representatives to accompany Distributor’s salesmen on sales
routes in the Territory, upon reasonable advance notice to Distributor;

 

i.                                          Achieve optimum ambient and cold
space, position, prominence, and visibility of the Products in all Distributor’s
Accounts in the Territory;

 

j.                                          Promote and maintain an efficient,
viable and financially sound system of distribution for the Products in
Distributor’s Accounts throughout the Territory;

 

k.                                       Provide the resources necessary for the
sale, delivery, marketing, promotion and servicing of the Products in
Distributor’s Accounts within the Territory;

 

l.                                          Achieve and maintain Minimum
Distribution Levels for the Products in Distributor’s Accounts designated on
Exhibit C as exclusive to Distributor as agreed upon or determined in accordance
with Section 13.c. below from time to time;

 

m.                                    Satisfy its obligations specified in
Sections 10 and 13 below;

 

n.                                      Provide such sales and marketing
information in relation to the Products as may be reasonably requested by MEL;

 

o.                                      Distributor shall comply with any laws
and regulations of the Territory and be responsible for ensuring that all
Product deliveries by it within the Territory comply with all health, safety,
environmental and other standards, specifications and other requirements imposed
by law, regulation or order in the Territory, and applicable to the Products;

 

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p.                                      Assign such article numbers as may be
utilized by Distributor from time to time for each Product and Product package
to track sales information by its sales data collection system and its bottlers;
and

 

q.                                      Cause all of its promotional and
marketing efforts and/or activities under this Agreement to be devoted solely to
the Products. Unless approved by MEL’s prior written consent, it shall be a
violation of this subsection for (1) Products to be placed by Distributor in
equipment branded with the trademark of another energy drink, but not if branded
with another non-energy beverage trademark; (2) other energy drinks to be placed
by Distributor in equipment branded for Products; (3) sales materials created by
Distributor to include trademarks of Products and other energy drinks;
(4) Distributor’s promotional pricing and/or promotional and/or marketing
activities and/or promotional and/or marketing programs to apply to all or any
Products in combination with all or any other energy products sold by
Distributor. It is not a violation of this subsection for Products to be
ordered, sold, delivered, or merchandised by the same person or in the same
vehicles.

 

4.                                       Prices.

 

a.                                       The prices (“Selling Price”) to be paid
by Distributor to MEL for the Products shall be reviewed and determined annually
by MEL for the forthcoming year after discussion with Distributor but shall be
subject to adjustment in accordance with Section 4.c. below.  The annual
increases to the Selling Price will be communicated to the Distributor no later
than three (3) calendar months prior to implementation of price increases in a
country within the Territory.

 

b.                                      It is acknowledged that from time to
time Distributor may be required by its customer/s to fix, for a period of up to
twelve (12) months, the prices that Distributor may charge to its customer/s for
certain Products.  In this event, Distributor may request that MEL fixes the
prices to be paid by Distributor for the applicable Product/s to be resold to
such customer/s.  MEL shall promptly discuss such a request with Distributor in
good faith and the parties will prepare and record any agreement in writing. 
Provided that MEL agrees to the foregoing in writing, MEL shall not adjust, for
the same period that Distributor’s prices are fixed, the prices to be paid by
Distributor for the applicable Product/s  ***. Nothing contained in this
Section 4.b. shall be construed as imposing any agreement or restriction on the
right of either MEL to unilaterally determine the Selling Price or the right of
the Distributor to unilaterally determine Distributor’s own resale prices and 
terms of business.

 

c.                                       Notwithstanding anything to the
contrary contained in this Agreement, in the event of any material change in the
costs associated with production of the Products (including, but not limited to,
a material change in the costs of ingredients, packaging materials, energy or
freight costs related to the production and shipping of Products) at any time,
then MEL may adjust the Selling Price of Products to Distributor to reflect such
cost  ***. MEL shall provide reasonable supporting documentation evidencing the
material change in its costs of production and delivery, if requested by
Distributor.

 

d.                                      All Selling Prices are exclusive of
(1) any costs of carriage and insurance of the Products, and (2) any applicable
value added or any other sales tax, which shall be payable by Distributor.

 

e.                                       MEL shall reimburse or credit
Distributor for all of Distributor’s actual out-of-pocket expenses paid or
incurred by Distributor in relation to the promotion and trade marketing of
Products including without limitation discounts, allowances, rebates,
demonstration costs, promotional programs, racks, sampling, point-of-sale and
merchandizing aids such as promotional stickers, price tags, etc., free products
and slotting fees, shelf programs, local or customer-based promotions, and
similar out-of-pocket expenses incurred and paid by Distributor but only if, and
to the extent, previously approved by MEL in writing.

 

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*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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5.                                       Orders.  All purchase orders for
Products shall be transmitted in writing or electronically, shall specify a
reasonable date and time for delivery to locations in the Territory agreed upon
in writing between the parties from time to time with a lead time of at least
ten (10) days and shall be subject to acceptance by MEL in MEL’s reasonable
discretion.  If MEL is unable to accept an order for any reason, then MEL will
use commercially reasonable efforts to equitably allocate available Products to
fill orders from its distributors and customers, including Distributor.  In the
event of any conflict or inconsistency between the terms of this Agreement and
any purchase order, the terms of this Agreement shall govern.  All such purchase
orders shall be deemed acceptances of MEL’s offers to sell Products and shall
limit acceptance by Distributor to the terms and conditions thereof.

 

6.                                       Payment.  MEL shall invoice Distributor
on a monthly basis and Distributor shall promptly pay MEL for the Products, in
Euros for Products sold in the Territory, in full (without set off, deduction or
counter claim) by electronic transfer within  *** of the date of the relevant
invoice or such other period as may be agreed by MEL from time to time in
writing.  Distributor and MEL shall use a mutually agreeable method of
electronic settlement of accounts that Distributor reasonably approves which may
include ACH or Xign, Distributor’s current electronic invoice presentment
system.  If Distributor is delinquent in payment upon presentation of invoice
and remains delinquent for seven (7) days after written notice calling upon
Distributor to pay, Distributor shall reimburse MEL for any costs and expenses
incurred by MEL in collecting such delinquent amounts, including, without
limitation, legal fees and costs including fees of collection agencies, and
interest computed at the lesser of  *** percent  *** per month or part thereof
from the due date(s) or the maximum legally permissible.

 

7.                                       Title and Risk of Loss.  Title and risk
of loss to the Products shall pass to Distributor upon delivery of the Products
to Distributor.

 

8.                                       Forecast and Delivery.

 

a.                                       Distributor shall provide MEL with  ***
forecasts describing the volume of each SKU of Products that Distributor
projects will be ordered during each  *** week period during the Term (as
defined below) of this Agreement.  Distributor shall submit each updated
forecast monthly in a format reasonably acceptable to MEL no later than the
first day of each month during the Term.

 

b.                                      Unless otherwise agreed in writing by
the parties to this Agreement, the Products will be tendered by MEL for delivery
to Distributor in full truckload quantities of particular Product lines and
extensions but without combining different Product lines in the same truckloads.
For the avoidance of doubt, Monster and its extensions and Java Monster and its
extensions are different particular Product lines. Subject to Distributor
providing MEL forecasts in accordance with Section 8.a. above, MEL agrees to use
commercially reasonable good faith efforts to deliver Products to Distributor
within  *** of receipt by MEL of the applicable purchase orders for Products in
compliance with Sections 5 and 8.a. above to (i) Distributor, in the case of
Products delivered from the point of manufacture to Distributor by ground
transportation, and (ii) the shipper, in the case of delivery of the Products to
Distributor which involves shipment by sea.  MEL shall deliver to Distributor
Products with at least six (6) months shelf life remaining at the time of
delivery or such other period as may be agreed to between MEL and Distributor
with respect to any specific Products.  Notwithstanding the foregoing,
Distributor acknowledges that delivery dates set forth in purchase orders for
Products accepted by MEL are merely approximate and that MEL shall have no
liability for late deliveries, except only for fines, penalties and assessments
imposed by Distributor’s customers and actually paid by Distributor which arise
solely and directly as a result of MEL’s failure to comply with its obligations
under this Section 8.

 

9.                                       Trademarks.

 

a.                                       Distributor acknowledges HBC’s
exclusive right, title, and interest in and to the Trademarks and trade names,
whether or not registered, patents and patent applications (“Patents”),
copyrights (“Copyrights”) and trade secrets and know-how (“Know-How”) which HBC
may have at any time created, adopted, used, registered, or been issued in the
United States of America or in any other location in connection with HBC’s
business or the

 

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*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Products and Distributor shall not do, or cause or permit to be done, any acts
or things contesting or in any way impairing or tending to impair any portion of
HBC’s  right, title, and interest in and to the Trademarks, trade names,
Patents, Copyrights, and Know-How.  Any approval by MEL for Distributor to use
any Trademarks, trade names, Patents, Copyrights, trade secrets and Know-How in
connection with the distribution and sale of the Products shall be a mere
temporary permission, uncoupled with any right or interest, and without payment
of any fee or royalty charge for such use.

 

b.                                      Distributor shall not use any trademark,
name, brand name, logo or other production designation or symbol in connection
with Products other than the Trademarks, subject to the terms of this
Section 9.  It will not be a breach of this Section for the Products to be
delivered by the Distributor in vehicles, or using employees, agents, assigns or
sub-distributors wearing clothing, displaying any other trademark, name, brand
name, logo or other products designation or symbol.  Distributor acknowledges
that it has no right or interest in the Trademarks (except as expressly
permitted hereunder) and that any use by Distributor of the Trademarks will
inure solely to HBC’s benefit.  Distributor may only use the Trademarks in
strict accordance with MEL’s policies and instructions, and MEL reserves the
right, from time to time and at any time, at its discretion, to modify such
policies and instructions then in effect.

 

c.                                       Any proposed use by Distributor of the
Trademarks (to the extent that it either has not been previously approved by MEL
in writing or differs materially from a use previously approved by MEL in
writing) shall be subject to the prior written consent of MEL, which MEL may
withhold in its sole and absolute discretion.  Distributor shall submit to MEL
in writing each different proposed use of the Trademarks in any medium.

 

d.                                      Distributor shall not at any time alter
the Trademarks or the packaging of Products, use the Trademarks for any purpose
other than the promotion, advertising and sale of Products hereunder, or
challenge the validity, or do or refrain from doing any act which might result
in impairment of the value, of the Trademarks.  Distributor shall not cause or
permit its business name to include any of the Trademarks or its business to be
operated in a manner which is substantially associated with any of the
Trademarks.

 

e.                                       In advertising, promotions or in any
other manner so as to identify Products, Distributor shall clearly indicate
HBC’s ownership of the Trademarks.  Distributor further agrees that before
distributing or publishing any sales literature, promotional or descriptive
materials, MEL shall have the right, upon request, to inspect, edit and approve
such materials which illustrate, describe or discuss the Products.  Distributor
shall comply with any Trademark usage guidelines that MEL provides to it in
writing.

 

f.                                         Upon the termination of this
Agreement, the temporary permission granted under sub-Section 9.a. above will
terminate and the Distributor shall cease and desist from any use of the
Trademarks and any names, marks, logos or symbols similar thereto and the use of
any Patents, Copyrights and Know-How.

 

g.                                      Distributor shall (i) notify MEL of any
actual or suspected misuse or infringement of any Trademark, brand name, logo or
other production designation or symbol in the Territory, (ii) at MEL’s expense
and upon MEL’s request, assist in such legal proceedings as MEL will deem
necessary for the safeguard of any Trademark, brand name, logo or other
production designation or symbol in the Territory, and execute and deliver in
accordance with MEL’s request such documents and instruments as may be necessary
or appropriate in the conduct of such proceedings, and (iii) at MEL’s expense,
assist HBC and MEL in the registration and/or renewal of registration of any
Trademark, brand name, logo or other production designation or symbol in the
Territory as HBC or MEL may determine to be necessary or desirable, and execute
such documents and instruments as may be necessary to register or to apply for
the registration (or registration renewal) of such Trademark, brand name, logo
or other production designation or symbol.

 

h.                                      If during the term of this Agreement a
third party institutes against HBC, MEL or Distributor any claim or proceeding
that alleges that the use of any Trademark or any Know-How, Patent, trade secret
or Copyright in connection with the distribution, marketing, promotion,
merchandising and/or sales of the Products under this

 

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Agreement infringes the intellectual property rights held by such third party,
then MEL shall, 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.  Distributor shall use
all reasonable efforts to assist and cooperate with MEL in such action, subject
to MEL reimbursing Distributor for any reasonable out-of-pocket expenses
incurred by Distributor 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 MEL, such that any Know-How, Patent,
trade secret, Copyright or Trademark cannot be used in connection with the
distribution, marketing, promotion, merchandising and/or sales of the Products
under this Agreement without infringing upon the intellectual property rights of
such third party, then HBC, MEL and Distributor promptly shall cease using such
affected Know-How, Patent, trade secret Copyright or Trademark in connection
with the distribution, marketing, promotion, merchandising and/or sale of the
Products under this Agreement.  Except as otherwise specified in 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 Trademark.

 

10.                                 Promotion and Trade Marketing of Products. 
Distributor shall be responsible for promotion and “trade” marketing of the
Products to Distributor’s Accounts within the Territory.  Distributor shall use
commercially reasonable efforts to actively and diligently distribute and
encourage the utilization of merchandising aids and promotional materials in all
Distributor’s Accounts throughout the Territory.  Without in any way detracting
from the foregoing, Distributor shall reasonably participate in and diligently
implement all “trade” marketing and promotional programs that are mutually
agreed upon by MEL and Distributor from time to time.  Distributor acknowledges
that (a) MEL has no obligation to market and promote the Products, and (b) MEL
makes no, and hereby disclaims any, express or implied warranty, representation,
or covenant relating to or in connection with MEL’s marketing and promotional
activities including any Global Branding and Marketing activities (as defined in
Section 13.a. below), including without limitation, as to the value,
performance, extent, effectiveness, quantity, quality, success or results of any
such activities or the lack thereof.  Except as expressly provided in Section 19
below, Distributor shall have no claim against MEL and its affiliates and hereby
releases MEL and its affiliates from all and any claims by, and/or liability to,
Distributor of any nature for its failure to market and promote, or adequately
market and promote, the Products or arising from or relating to or in connection
with any Global Branding and Marketing activities procured, provided or
performed by MEL or MEL’s failure to procure, provide or perform such
activities.

 

11.                                 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 the fifth (5th)
anniversary of the Commencement Date (the “Initial Term”).  After the Initial
Term, this Agreement may be renewed for one (1) additional five (5)-year term
(“Additional Term”) if (a) either party gives written notice to the other at
least one hundred twenty (120) days prior to the end of the Initial Term of its
intention to renew the Agreement for an Additional Term, and (b) MEL determines
that the provisions of Sections 2.a., 2.b. and 21 of this Agreement are valid
and enforceable in accordance with their respective terms during the Additional
Term.  If MEL determines that it is necessary or desirable that the parties
execute an additional agreement or instrument in order for the provisions of
Sections 2.a., 2.b. and 21 to be valid and enforceable, then the parties agree
to execute such documents as may reasonably be required to give effect to the
foregoing.  A “Contract Year” means any calendar year during the Term and the
period from the Commencement Date until the close of business on December 31st
of the calendar year in which the Commencement Date falls.  The Initial Term and
the Additional Term are collectively referred to as the “Term.”

 

12.                                 Termination.

 

a.                                       Termination for Cause.

 

(i).                                  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:

 

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(A).                           Breach.  The other party’s material breach of a
provision of this Agreement and failure to cure such breach within thirty (30)
days after receiving written notice describing such 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 thirty (30) day period to cure such breach,
providing it immediately commences, and thereafter diligently prosecutes, in
good faith, its best efforts to cure such breach.  In the event that either MEL
or Distributor exercises its right to terminate this Agreement in accordance
with this Section 12.a.(i)(A), the breaching party shall be obligated to pay the
other party a severance payment (the “Breach Severance Payment”) in the amount
calculated as follows: the Distributor’s “average gross profit per case” (as
defined below) multiplied by the number of cases of Products sold by the
Distributor during the most recently completed twelve (12) month period ended on
the last day of the month preceding the month in which this Agreement is
terminated.  The Distributor’s “average gross profit per case” shall mean the
Distributor’s actual selling price less (i) promotion allowances, discounts,
free cases and allowance programs, and (ii) Distributor’s laid in cost of the
Products.

 

(B)                                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. § 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.

 

(C).                             Agreement.  Mutual written agreement of the
parties.

 

(ii).                               Termination by MEL.  MEL may terminate this
Agreement at any time:

 

(A) Upon written notice, and such termination will be effective immediately upon
Distributor’s receipt of such notice, (x) if Distributor sells, assigns,
delegates or transfers any of its rights and obligations under this Agreement
without having obtained MEL’s prior written consent thereto (which consent may
be withheld in MEL’s sole discretion), other than as a result of a material
change in the control of Distributor or sale by Distributor of all or
substantially all of its assets approved as provided in clause (y) below of this
Section 12.a.(ii)(A),  except if such assignment, sale, delegation or transfer
is to KO, or (y) if there is any material change in the control of Distributor
or Distributor sells all or substantially all of its assets without the prior
written consent of MEL, which MEL shall not be entitled to unreasonably
withhold, unless such control or assets are acquired by KO.

 

(B) In the event that Distributor fails to achieve the Performance Targets
(defined and determined from time to time in accordance with the provisions of
Section 13.d. below) for any calendar year, provided MEL has delivered to
Distributor written notice of the failure to achieve a Performance Target and
Distributor has failed to remedy the deficiency within ninety (90) days of
Distributor’s receipt of such notice, as determined by the Reports (as defined
in Section 13.d.(i)) for the most recent four (4) week period immediately
preceding the expiration of such ninety (90) day notice period.

 

(C) If all or any of the Concurrent Agreements (as defined below) are terminated
by Distributor or Coca-Cola Bottling Company, a Nova Scotia corporation
(“CCBC”), without cause or terminated by HBC or MEL, as the case may be, as a
result of a breach by Distributor or CCBC, as the case may be, then MEL shall
have the option to terminate this Agreement, which option may be exercised
within one hundred twenty (120) days of the occurrence of such termination, by
written notice by MEL to Distributor.  Any such termination shall be effective
upon Distributor’s receipt of MEL’s written notice of termination, and MEL shall
not be liable to Distributor or otherwise obligated to pay to Distributor any
severance payment or other amount by reason of such termination for
compensation, reimbursement or damages of whatsoever nature including, for
(i) loss of prospective compensation or earnings, (ii) goodwill or loss thereof,
or (iii) expenditures, investments, leases or any type of commitment made in
connection with the business of Distributor or in reliance on the existence of
this Agreement.

 

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MEL’s right to terminate this Agreement under this Section 12.a.(ii)(C) shall be
independent of any other rights or remedies of MEL under this Agreement.  The
“Concurrent Agreements” mean (i) the Monster Energy Distribution Agreement dated
concurrently herewith between HBC and Distributor, (ii) the Monster Energy
Canadian Distribution Agreement dated concurrently herewith between HBC and
CCBC, and (iii) the Monster Energy International Distribution Agreement dated
concurrently herewith between MEL and Distributor.

 

(iii).                            Termination by Distributor.  Distributor may
terminate this Agreement at any time:

 

(A)  If MEL fails to deliver to Distributor at  *** percent  *** of the
aggregate volume of all Products ordered by Distributor in accordance with
Sections 5 and 8 above over a continuous period of ninety (90) days after the
initial due date/s for delivery in accordance with Section 8.b. above, provided
Distributor has delivered to MEL written notice of such failure and MEL has
failed to remedy such deficiency within thirty (30) days of MEL’s receipt of
such notice; and

 

(B) If all or any of the Concurrent Agreements are terminated by HBC or MEL, as
the case may be, without cause or terminated by Distributor or CCBC, as the case
may be, as a result of HBC’s or MEL’s breach, as the case may be, then
Distributor shall have the option to terminate this Agreement, which option may
be exercised within one hundred twenty (120) days of the occurrence of such
termination, by written notice by Distributor to MEL.  Any such termination
shall be effective upon MEL’s receipt of Distributor’s written notice of
termination, and Distributor shall not be liable to MEL or otherwise obligated
to pay to MEL any severance payment or other amount by reason of such
termination for compensation, reimbursement, or damages of whatsoever nature
including, for (i) loss of prospective compensation or earnings, (ii) goodwill
or loss thereof, or (iii) expenditures, investments, leases or any type of
commitment made in connection with the business of MEL or in reliance on the
existence of this Agreement.  Distributor’s right to terminate this Agreement
under this Section 12.a.(iii)(B) shall be independent of any other rights or
remedies of Distributor under this Agreement.

 

b.                                      Complete or Partial Termination By MEL
Without Cause and Severance Payment.

 

(i).                                  MEL or any successor to MEL, shall have
the right at any time, upon sixty (60) days written notice (or such longer
period as MEL may determine, in its sole discretion), to terminate, without
cause or for no reason (A) this Agreement in its entirety (a “Complete
Termination”), and/or (B) Distributor’s right to sell any one or more of the
brands of Products identified in Exhibit A hereto, as amended from time to time
(a “Partial Product Termination”).

 

(ii).                               In the event of a Complete Termination or
Partial Product Termination, MEL or its successor, as the case may be, shall pay
to Distributor a severance payment measured as a genuine pre-estimate of the
Distributor’s losses and not as a penalty and calculated with respect to the
Products which are the subject of the termination (the “Product Severance
Payment”), calculated as follows: the Distributor’s “average gross profit per
case” (as defined above) per Product line multiplied by the number of cases of
such Products sold by Distributor during the most recently completed twelve (12)
month period ending on the last day of the month preceding the month in which
the Complete Termination or Partial Product Termination, as the case may be,
occurs.  The Product Severance Payment shall be paid by MEL to Distributor
within thirty (30) days of the later of (A) the date of the applicable
termination, and (B) MEL’s receipt of all information reasonably necessary to
support computation of the Product Severance Payment, in a form and substance
satisfactory to MEL.

 

c.                                       Distributor Right to Terminate Without
Cause and Severance Payment.

 

(i).                                  Distributor, or any successor to
Distributor, shall have the right at any time to terminate this Agreement,
without cause or for no reason, upon at least one (1) year’s written notice to
MEL or such shorter period as MEL shall agree in writing.

 

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

*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

10

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(ii).                               If Distributor exercises its right to
terminate this Agreement in accordance with Section 12.c.(i) above, Distributor
shall pay to MEL a severance payment (the “Distributor Severance Payment”) in an
amount equal to Distributor’s “average gross profit per case” (as defined above)
multiplied by the number of cases of Products sold by the Distributor during the
most recently completed twelve (12) month period ended on the last day of the
month preceding the month in which this Agreement is terminated.  If, such
notice is given by Distributor and thereafter this Agreement is otherwise
terminated as a result of Distributor’s breach of this Agreement, including
without limitation, arising from the elimination of substantially all of MEL’s
benefits under this Agreement by Distributor or Distributor’s repudiation or
abandonment of this Agreement within such one (1) year notice period then,
without prejudice to any of MEL’s other rights and/or remedies, the Distributor
Severance Payment shall be multiplied by  ***.

 

(iii).                            At any time, and from time to time, after
Distributor gives MEL written notice of termination, and without prejudice to,
or in any way detracting from, Distributor’s obligation to pay the Distributor
Severance Payment, MEL may elect to exercise its right to terminate this
Agreement wholly or partially with respect to any part of the Territory or one
or more of the Products, prior to the expiration of any notice period, in which
event MEL shall not be liable to Distributor by reason of such termination for
compensation, reimbursement, or damages of whatsoever nature including, for
(A) loss of prospective compensation or earnings, (B) goodwill or loss thereof,
or (C) expenditures, investments, leases or any type of commitment made in
connection with the business of Distributor or in reliance on the existence of
this Agreement.

 

d.                                      Sole Remedy.

 

(i).                                  The Breach Severance Payment and/or the
Product Severance Payment payable by MEL to Distributor pursuant to the
provisions of Section 12.a.(i)(A) and/or Section 12.b.(ii) above respectively,
if any, and MEL’s repurchase of Distributor’s inventory of Products and
advertising materials pursuant to this Agreement, or Distributor’s right to sell
such inventory if not so repurchased by MEL, shall constitute Distributor’s sole
and exclusive remedy for the termination or non-renewal of this Agreement,
including, without limitation, in the case of a breach and shall be in lieu of
all other claims that Distributor may have against MEL as a result thereof. 
Without in any way detracting from or limiting the provisions of
Section 12.e.(iii) below and, in addition thereto, under no circumstances shall
MEL be liable to Distributor by reason of the termination or non-renewal of this
Agreement for compensation, reimbursement or damages of whatsoever nature
including, without limitation, for (A) loss of prospective compensation or
earnings, (B) goodwill or loss thereof, or (C) expenditures, investments, leases
or any type of commitment made in connection with the business of Distributor or
in reliance on the existence of this Agreement.

 

(ii).                               The Breach Severance Payment and/or the
Distributor Severance Payment payable by Distributor to MEL pursuant to the
provisions of Section 12.a.(i)(A) and Section 12.c.(ii) above respectively, if
any, and MEL’s repurchase of Distributor’s inventory of Products and advertising
materials pursuant to Section 12.e.(iv) below, or Distributor’s right to sell
such inventory if not so repurchased by MEL, shall constitute MEL’s sole and
exclusive remedy for the termination or non-renewal of this Agreement,
including, without limitation, in the case of a breach and shall be in lieu of
all other claims that MEL may have against Distributor as a result thereof. 
Without in any way detracting from or limiting the provisions of
Section 12.e.(iii) below and, in addition thereto, under no circumstances shall
Distributor be liable to MEL by reason of the termination or non-renewal of this
Agreement for compensation, reimbursement or damages of whatsoever nature
including, without limitation, for (A) loss of prospective compensation or
earnings, (B) goodwill or loss thereof, or (C) expenditures, investments, leases
or any type of commitment made in connection with the business of MEL or in
reliance on the existence of this Agreement.

 

e.                                       Other Terms Pertaining to Termination. 
In the event of the termination of this Agreement for any reason whatsoever (and
whether such termination is due to the breach of any of the provisions of this
Agreement by any party and/or itself is in breach of the Agreement or
otherwise):

 

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

*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

11

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(i).                                  MEL shall have the right to cancel all of
Distributor’s purchase orders for affected Products accepted but remaining
unfilled as of the date of termination;

 

(ii).                               all amounts payable by Distributor to MEL or
by MEL to Distributor shall be accelerated and shall immediately become due
unless such termination results from the other’s breach of this Agreement;

 

(iii).                            except for the sole remedy provisions in
Sections 12.d.(i) and (ii), neither party shall be liable to the other party in
contract, tort or on any other theory of liability for any damage, loss, cost or
expense (whether general, special, indirect, incidental, consequential or
punitive) suffered, incurred or claimed by the other party as a result of or
related to such breach and/or termination (even if the termination results from
a breach and the breaching party has been advised of the possibility of such
damages), including, without limitation, loss of anticipated profits or
goodwill, loss of or damage to goodwill or business reputation or any loss of
investments or payments made by either party in anticipation of performing under
this Agreement; and

 

(iv).                           MEL and Distributor shall each have the option,
exercisable upon written notice to the other within thirty (30) days after the
date of termination hereof, to cause MEL to repurchase all affected Products in
Distributor’s inventory and current advertising materials (providing such
Products and advertising materials are in saleable condition) at the prices paid
or payable for such Products by Distributor (less any freight and insurance
charges), F.O.B., Distributor’s premises.

 

(v).                          Any Breach Severance Payment, Product Severance
Payment, and/or Distributor Severance Payment, and any applicable multiple,
percentage or variation thereof (each, for purposes of this Section 12e.(v), a
“Severance Payment”) payable in accordance with this Agreement by either MEL or
Distributor in the event of termination of this Agreement shall constitute
reasonable liquidated damages and is not intended as a forfeiture or penalty. 
MEL and Distributor agree that it would be impractical and extremely difficult
to estimate the total detriment suffered by either party as a result of
termination of this Agreement pursuant to this Section 12, and that under the
circumstances existing as of the Effective Date, the applicable Severance
Payment represents a reasonable estimate of the damages which either MEL or
Distributor will incur as a result of such applicable termination.  Therefore,
MEL and Distributor agree that a reasonable estimate of the total detriment that
either party would suffer in the event of termination of this Agreement pursuant
to this Section 12 is an amount equal to the applicable Severance Payment.  The
foregoing provision shall not waive or affect either party’s indemnity
obligations or the parties’ respective rights to enforce those indemnity
obligations under this Agreement, or waive or affect either party’s obligations
with respect to any other provision of this Agreement which by its terms
survives the termination of this Agreement.

 

f.                                         Continued Supply of Products After
Termination.  In the event MEL continues to supply Products to Distributor for
any reason following the termination of this Agreement, Distributor acknowledges
and agrees that any such action shall not constitute a waiver of MEL’s rights
under this Agreement or a reinstatement, renewal or continuation of the term of
this Agreement.  MEL and Distributor agree that if MEL continues to supply
Products to Distributor following the termination of this Agreement,
(i) Distributor shall not actively seek or solicit customers for the Products
outside the Territory or any customers located within the Territory other than
the Distributor’s Accounts, (ii) Distributor shall promptly pay the prices of
the Products in full (without deduction or set-off for any reason) in accordance
with the payment terms set forth in MEL’s invoice, and (iii) MEL shall have the
right, in its sole discretion, to discontinue supplying Products to Distributor
at any time, without notice to Distributor.

 

g.                                      Distributor’s Obligations After Notice
of Termination.

 

(i).                                  During any period after either party gives
the other notice of termination of this Agreement and until actual termination
of this Agreement, Distributor shall (A) continue to perform of all of
Distributor’s obligations under this Agreement, including without limitation,
all of Distributor’s obligations under Section 3 above, (B) not cause or permit
the Products or the Trademarks to be prejudiced in any manner, (C) not
eliminate, reduce or replace the listings, shelf space, positioning and/or other
benefits enjoyed by the Products, and

 

12

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(D) generally cooperate with MEL in relation to the transition to any new
distributor appointed by MEL for the Territory.

 

(ii).                             For a period of thirty (30) days after
termination of this Agreement for any reason, Distributor shall not tortiously
interfere with any listings, shelf space, or positioning for the Products.

 

13.                                 Annual Business Plan; Minimum Distribution
Levels; Promotion.

 

a.                                       During the Term, MEL  shall have
primary responsibility for the overall global branding and positioning of the
Products, as well as brand and image marketing for the Products, in such form
and manner and of such nature and to such extent as may be determined by MEL in
its sole and absolute discretion from time to time (“Global Branding and
Marketing”).  Distributor acknowledges and agrees that MEL makes no express or
implied warranty, representation or covenant relating to or in connection with
any Global Branding and Marketing activities, including without limitation, as
to the value, performance, extent, effectiveness, quantity, quality, success or
results of any such activities or the lack thereof.  Except as set forth in
Section 19 below, Distributor shall not have any claim against MEL and its
affiliates and hereby releases MEL and its affiliates from all and any claims
by, and liability to, Distributor of any nature for its failure to market and
promote, or adequately market and promote, the Products or arising from or
relating to or in connection with any Global Branding and Marketing activities
procured, provided or performed by MEL or MEL’s failure to procure, provide or
perform such activities.

 

b.                                      Not less than sixty (60) days before the
end of each Contract Year, MEL and Distributor shall mutually review the
conditions of the marketplace, Distributor’s efforts to achieve sales and its
results, including year over year performance, as well as a proposed annual
sales, promotion, and trade marketing plan (“Annual Business Plan”) for the next
Contract Year prepared by Distributor.  Such review shall include discussion on
marketing efforts and proposed programs to be implemented to improve the
distribution and/or sales velocity of the very lowest selling (measured by sales
velocity) SKU/s of Products, if appropriate, and/or the possible deletion from
distribution, if appropriate, of the very lowest selling (measured by sales
velocity) SKU/s of Products but in accordance with and subject to the provisions
of Section 13.f. below.   Such Annual Business Plan shall cover such matters as
may be appropriate including specific account placement performance objectives,
merchandising goals, specific 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 Territory has an ethnic market or concentration, the Annual Business Plan
shall address such specific ethnic segments, including retail promotions,
point-of-sale allocations and special events for ethnic segments.  The Annual
Business Plan shall not detract from the provisions of Section 10 above. 
Distributor shall fully implement such Annual Business Plan in the following
Year in accordance with Section 3.f. above.

 

c.                                       Not less than sixty (60) days before
the end of the then-current Contract Year, MEL and Distributor shall mutually
agree, in writing, on the minimum distribution levels to be achieved and
maintained by Distributor for the Products throughout the next Contract Year
(the “Minimum Distribution Levels”).  Should the parties have failed, for
whatsoever reason, to mutually agree upon the Minimum Distribution Levels to be
achieved and maintained by Distributor for the Products throughout the next
Contract Year, the same shall be determined by reference to the process
described in Section 13.d below.  The parties shall perform all of their
respective obligations under this Section except that Distributor shall not be
obligated to achieve and maintain the Minimum Distribution Levels until the
expiration of the six (6) month period immediately following the Effective Date
of this Agreement.

 

d.                                      MEL and Distributor shall also agree in
writing to performance targets to be achieved and maintained by Distributor for
the forthcoming calendar year of this Agreement (collectively, the “Performance
Targets”).  The Performance Target for the 2009 calendar year will be to
integrate Products into the Distributor’s distribution system and within a
reasonable time to improve the distribution levels and quality thereof and
extent of SKU’s in distribution in all Distributor’s Accounts within the
Territory above existing levels at the commencement of this Agreement and to
meet the other Performance Targets that will be mutually agreed by the parties. 
In years subsequent to 2009 Performance Targets shall consist of executional
measures such as distribution levels, quality of

 

13

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distribution, extent of SKU’s in distribution, displays and shelf space and
positioning on shelves and in coolers, as mutually agreed. For the avoidance of
doubt, neither Minimum Distribution Levels nor Performance Targets will include
volume requirements.

 

If the parties are unable to agree to the Performance Targets for any calendar
year commencing with the 2010 calendar year, prior to the commencement of each
such calendar year, then the Performance Targets for such year shall be as
follows:

 

(i).                                  the Minimum Distribution Levels that shall
be required to be achieved and maintained on average during the year for the
Monster Energy brand measured at the commencement of each applicable quarter,
and primarily determined with reference to the Nielsen reports (Scantrack) or
IRI (Infoscan) or equivalent reports (the “Reports”) shall be no less than the
Distribution Levels of the leading energy brand within the Distributor’s
portfolio in the Territory.  If the Monster Energy brand is, during such year,
the leading energy brand within the Territory, then such Minimum Distribution
Levels shall at a minimum be not less than the national average distribution
levels of the second leading energy brand within the Territory measured at the
commencement of each applicable year.

 

(ii).  the Minimum Distribution Levels that shall be required to be achieved and
maintained for Products other than Monster Energy brand, shall be commercially
reasonable levels from time to time in light of the distribution levels and
velocities of comparable products in the Territory and the distribution levels
and velocities achieved by Distributor and/or its sub-distributors with regard
to Distributor’s other energy brands at the time;

 

(iii).  a commercially reasonable representation of all SKU’s of Products shall
be required to be in distribution throughout the year in reasonable positioning
on shelves, which shall take into account retailer willingness to sell all of
the SKU’s of Products, shelf space limitations and other commercially reasonable
factors that may be applicable in the market; and

 

e.                                       The Minimum Distribution Levels for the
Products that shall be required to be achieved and maintained by Distributor for
the Products shall be reduced to the extent only that actual distribution levels
are eroded as a direct result of (A) MEL’s failure to deliver Products in
accordance with this Agreement or (B) MEL’s failure to reimburse all costs
pursuant to Section 4.e above.

 

f.                                         The parties agree to periodically
meet in order to discuss performance of the lowest selling SKU/s of Products and
to delete from distribution in the Territory any SKU/s the parties mutually
agree in writing, provided that MEL will not unreasonably withhold its approval
to the deletion of any applicable SKU/s. MEL may withhold its approval to
deletion of any SKU/s if any applicable SKU/s has/have sufficient sales velocity
or is or are capable of delivering sufficient sales velocity in any one or more
of Distributor’s Accounts or any one or more regions or countries, as the case
may be, to make such SKU/s economically viable to continue in distribution in
such one or more of Distributor’s Accounts or in any one or more regions or
countries, as the case may be.  Notwithstanding the foregoing, unless mutually
agreed in writing, in no event shall more than  *** percent  *** of the total
number of SKU’s, rounded down to the nearest whole number (*** percent *** of
the total number of SKU’s is less than  *** but more than  ***, in which case
the number will be rounded up to  ***), be deleted from distribution in any  ***
period.

 

g.                                      Promotional activities shall be
regulated as follows:

 

(i).  MEL and Distributor shall periodically meet and may mutually agree to
additional promotional activities including further programs and campaigns not
included in the promotional activities contemplated in Section 4.e. above. The
promotional activities costs that are so agreed to between the parties shall be
shared between, and paid by, Distributor and MEL as may be agreed in writing
from time to time.

 

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

*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

14

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(ii).  Distributor shall continue its business in the ordinary course including
the provision, utilization, and maintenance of coolers, other refrigeration
equipment, and vending machines.  Distributor shall be responsible for creating
marketing materials for submission to MEL for its final written approval. 
Distributor shall not use marketing materials unless approved by MEL in writing;
provided that if MEL does not notify Distributor that it objects to any
suggested marketing materials within fifteen (15) days after receipt of such
materials from Distributor, MEL shall be deemed to have approved such suggested
marketing materials.

 

14.                                 Distribution Accounts and MOLOP Accounts.

 

a.                                       Distributor and its sub-distributors
shall have the primary relationship with retail and other customers throughout
the Territory as defined in Exhibit C and shall be responsible for negotiating
the terms of sale of the Products within the Territory; provided that without
detracting therefrom MEL shall retain the right to provide input to Distributor
and its sub-distributors regarding sales strategy and other matters as well as
to provide sales, marketing, promotional and merchandising support and programs
to retail and other customers as well as the right to meet directly with and
make presentations to retail and other customers within the Territory as may be
appropriate from time to time; and provided further that MEL will advise
Distributor of such meetings beforehand to the extent practicable and
Distributor shall be entitled to accompany MEL to the meetings.  Additionally,
MEL may accompany, assist and support Distributor and/or its sub-distributors
from time to time on sales calls to Distributor Accounts in the Territory.  For
the sake of clarity, MEL shall not offer or agree terms of supply and/or terms
of sale of the Products within the Territory to any of Distributor’s Accounts
without the prior agreement of Distributor, which agreement will not be
unreasonably withheld.

 

b.                                      “MOLOP Accounts” shall mean (i) any
account/s having at least ten (10) outlets and that is/are licensed by
applicable governmental authorities to sell alcoholic beverages for on-premise
consumption, and/or (ii) any trophy or prestige account/s that is/are licensed
to sell alcoholic beverages for on-premise consumption.  The parties recognize
that it is in their respective interests to work together to formulate the
approach to be followed by them jointly or separately with various customers
and/or channels of trade, including MOLOP Accounts, from time to time, both to
take advantage of a coordinated approach and to avoid the negative impact of a
lack of coordination. MEL and Distributor therefore agree that an aligned
customer/channel approach is a key part of each Annual Business Plan and that
they will engage in regular communication to adopt such plans as well as to deal
with further opportunities that may arise from time to time during each calendar
year, so as to avoid either party acting in an uncoordinated way towards
customers.  Subject to Section 14.a. above, if MEL deems it desirable for
Products to be sold to any MOLOP Account, MEL shall be entitled, in its
discretion, to make arrangements directly with such MOLOP Account including the
terms of sale of Products to the MOLOP Account and the prices therefore, which
shall take into account the prices and funding then offered by Distributor and
its sub-distributors to MOLOP Accounts and similar categories of customers, in
the Territory.  MEL shall use commercially reasonable efforts to arrange for all
outlets of any such MOLOP Account within the Territory to be serviced by
Distributor and/or its sub-distributors and for delivery of the Products and
other arrangements with regard thereto, to be made directly by Distributor and
its sub-distributors or their warehouse system.  Notwithstanding the foregoing,
should the MOLOP Account concerned not agree to its outlets within the Territory
being serviced by Distributor or should Distributor elect not to service such
outlets, MEL shall be entitled to service the outlets directly.  In the event
MEL services the outlets directly, MEL shall bear sole liability and
responsibility related to such Account and MEL shall pay to Distributor during
the remaining term of this Agreement an amount equal to  *** percent  *** of
Distributor’s average gross profit per case per Product line sold to and
calculated with respect to MOLOP Accounts in the channel in question but
otherwise in accordance with the provisions of Section 12.a.(i)(A) above for
each one of the Product lines sold by MEL to the outlets concerned, within a
reasonable time after receipt by MEL of all information necessary for the
computation of the amount due under this Section 14, but in no event more
frequently than twice per calendar year. For the purposes of this Agreement, the
number of cases of Products sold by MEL to the outlets during any period shall
be determined by multiplying the total number of cases of Products sold by MEL
directly to such MOLOP Account or regional division of such MOLOP Account, as
the case may be, during the period concerned, by a fraction, the numerator of
which shall be the number of outlets within the

 

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*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Territory and the denominator of which shall be the total number of outlets that
the MOLOP Account has anywhere in the world participating in the applicable
program.

 

15.                                 Exclusion of Damages.

 

a.                                       EXCEPT FOR DAMAGES DIRECTLY RESULTING
FROM INDEMNITY OBLIGATIONS PROVIDED IN SECTION 19, WITHOUT IN ANY WAY DETRACTING
FROM OR LIMITING THE PROVISIONS OF SECTIONS 12.d. or 12.e.(iii) ABOVE AND, IN
ADDITION THERETO, NEITHER PARTY SHALL BE LIABLE 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 THE OTHER RELATED
TO OR ARISING OUT OF THIS AGREEMENT, 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 IT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.

 

b.                                      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.

 

16.                                 Distributor’s Representations and
Warranties.  Distributor represents and warrants to MEL that (a) it has the
right and lawful authority to enter into this Agreement, and (b) the execution,
delivery and performance of this Agreement will not cause or require Distributor
to breach any obligation to, or agreement or confidence with, any other person
or entity.

 

17.                                 MEL’s Representation.

 

a.                                       MEL represents and warrants to
Distributor that (i) it has the right and lawful authority to enter into this
Agreement, and (ii) the execution, delivery and performance of this Agreement
will not cause or require MEL to breach any obligation to, or agreement or
confidence with, any other person or entity.

 

b.                                      MEL warrants that all Products, all food
additives in the Products, or all substances for use in, with, or for the
Products, comprising each shipment or other delivery hereby made by MEL to, or
on the order of, Distributor are hereby guaranteed as of the date of delivery to
be, on such date, (1) for Products imported by the Distributor from the United
States, not adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act, as amended, including the Food Additives Amendment of
1958 (the “Act”) and are not articles which may not under the provisions of
Sections 404, 505, or 512 of the Act, be introduced into interstate commerce,
and (2) for all Products supplied by MEL to the Distributor (whether or not
imported from the United States) to be in compliance with all health, safety,
and labeling standards and specifications imposed by law, regulation or order in
the Territory in which the Products will be sold by the Distributor and which
are applicable to the Products.

 

c.                                       MEL warrants that all Products shall be
merchantable.

 

d.                                      Distributor’s sole and exclusive remedy
for MEL’s breach of MEL’s representations in Sections 17.b. and 17.c. above
shall be as provided for in Section 19.b. below.

 

18.                                 Limitation of Warranty.  MEL MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE IMPLIED
WARRANTIES OF NON-INFRINGEMENT,

 

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MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) EXCEPT THOSE SET FORTH IN
SECTION 17 ABOVE.

 

19.                                 Indemnification.

 

a.                                       Distributor shall indemnify, defend,
and hold harmless MEL and its officers, directors, agents, employees,
shareholders, legal representatives, successors and assigns, and each of them,
from loss, liability, costs, damages, or expenses from any and all claims,
actions and suits, instituted by any third party, whether groundless or
otherwise, and from and against any and all third party claims, liabilities,
judgments, losses, damages, costs, charges, attorney’s fees, and other expenses
of every nature and character arising from the breach of Distributor’s express
representations and warranties under this Agreement by Distributor or its
agents, employees, subcontractors, sub-distributors or others acting on its
behalf, provided that (1) MEL gives Distributor written notice of any
indemnifiable claim and MEL does not settle any claim without Distributor’s
prior written consent, and (2) MEL does all things reasonably required by
applicable law to mitigate the claim, loss, damage, liability, cost, suit,
action, judgment or expense (including without limitation attorney’s fees) to
the fullest possible extent.

 

b.                                    MEL shall indemnify, defend, and hold
harmless Distributor and its officers, directors, agents, employees,
shareholders, legal representatives, successors, assigns, and customers, and
each of them, from loss, liability, costs, damages, or expenses from any and all
claims, actions and suits instituted by any third party, whether groundless or
otherwise, and from and against any and all such third party claims,
liabilities, judgments, losses, damages, costs, charges, attorney’s fees, and
other expenses of every nature and character and all Distributor’s direct
documented costs to store, transport, test and destroy all unsellable Products
and advertising materials arising from (i) the breach of MEL’s express
representations and warranties under this Agreement or those of its agents,
employees, subcontractors or others acting on its behalf, (ii) any impurity,
adulteration, deterioration in or misbranding of any Products sold to
Distributor by MEL, (iii) any prior distributor of Products in the Territory,
(iv) any MEL marketing, advertising, promotion, labeling, Global Branding and
Marketing, and the Trademarks, Copyrights, Patents, Know-How or other
intellectual property relating to the Products, or (v) the fact that the
Products (A) are not safe for the purposes for which goods of that kind are
normally used; or (B) do not comply with any applicable health, safety, or
environmental laws, regulations, orders or standards imposed in the Territory;
provided that (1) Distributor gives MEL written notice of any indemnifiable
claim and Distributor does not settle any claim without MEL’s prior written
consent, and (2) Distributor does all things reasonably required by applicable
law to mitigate the claim, loss, damage, liability, cost, suit, action, judgment
or expense (including without limitation attorney’s fees) to the fullest
possible extent.

 

c.                                       If any action or proceeding is brought
against Distributor, MEL or any other indemnified party under Section 19.a. or
19.b. (the “Indemnified Party”), the Indemnified Party shall promptly notify the
party required to provide indemnification (the “Indemnifying Party”) in writing
to that effect.  If the Indemnified Party fails to promptly notify the
Indemnifying Party, the Indemnified Party shall be deemed to have waived any
right of indemnification with respect to such claim to the extent (but only to
the extent) any delay in such notice prejudice’s the Indemnifying Party’s
ability to defend such action, suit or proceeding.  The Indemnifying Party shall
have the right to defend such action or proceeding at the Indemnifying Party’s
sole cost by counsel satisfactory to Indemnifying Party. If the Indemnifying
Party fails to promptly defend or otherwise settle or finally resolve such
action, suit or proceeding, Indemnified Party may defend such action, suit or
proceeding using counsel selected by Indemnified Party, and the Indemnifying
Party shall reimburse Indemnified Party for any resulting loss, damages, costs,
charges, attorney’s fees, and other expenses and the related costs of defending
such action, suit or proceeding.

 

d.                                      The parties agree that the provisions
contained in this Section shall survive the termination or expiration of this
Agreement.

 

20.                                 Insurance.  During the term of this
Agreement and for a period of two (2) years thereafter, MEL and Distributor
agree to maintain policies of insurance of the nature and amounts specified
below, which shall provide the other party as an additional insured (providing
for a waiver of subrogation rights and endeavoring to provide for

 

17

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not less than thirty (30) days written notice of any modification or termination
of coverage), and each party shall provide to the other party with a certificate
of insurance evidencing such insurance, in a form satisfactory to such party:

 

·                                          Commercial General Liability,
including contractual liability coverage, with limits of at least $1,000,000 per
occurrence; Bodily Injury and Property Damage / $1,000,000; Personal and
Advertising Injury / $1,000,000; Products/Completed Operations / $2,000,000
General Aggregate.

 

·                                          Excess or Umbrella Liability with a
limit of not less than $5,000,000 per occurrence over the insurance coverage
described above.

 

·                                          Other statutory insurance required by
the applicable laws of the Territory.

 

For any claims under this Agreement, the applicable party’s insurance shall be
deemed to be primary and not contributing to or in excess of any similar
coverage purchased by the other party.  All deductibles payable under an
applicable policy shall be paid by the party responsible for purchasing such
policy.   All such insurance shall be written by companies authorized to do
business in the state or states where the work is to be performed and having at
least the ratings of the respective parties current insurers, unless not
obtainable at commercially reasonable rates in light of previous premiums.  The
parties will ensure that the insurance policies obtained pursuant to this
Section are effective and enforceable for any liability, claims or other
insurable event arising in the Territory.

 

21.                                 Competing Products.  The provisions of
Section 21 are set forth in attached Exhibit E and are incorporated in this
Section 21 by this reference.

 

22.                                 Amendment.  Except to the extent otherwise
expressly permitted by this Agreement, no amendment of, or addition to, this
Agreement shall be effective unless reduced to a writing executed by the duly
authorized representatives of both parties.

 

23.                                 Assignment.  Neither party may assign its
rights or delegate its obligations hereunder without the prior written consent
of the other.  Any purported assignment or delegation, in the absence of written
consent, shall be void.

 

24.                                 No Agency.  The relationship between MEL and
Distributor is that of a vendor to its vendee and nothing herein contained shall
be construed as constituting either party the employee, agent, independent
contractor, partner or co-venturer of the other party.  Neither party shall have
any authority to create or assume any obligation binding on the other party.

 

25.                                 Governing Law.  This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
California (without reference to its law of conflict of laws) and the provisions
of the United Nations Convention On Contracts For The International Sale Of
Goods will expressly be excluded and not apply.  The place of the making and
execution of this Agreement is California, United States of America. 
Distributor hereby waives any rights that it may otherwise have to assert any
rights or defenses under the laws of the Territory or to require that litigation
brought by or against it in connection with this Agreement be conducted in the
courts or other forums of the Territory.

 

26.                                 Arbitration.  Any dispute, controversy or
claim arising out of or relating to this Agreement or the breach or termination
hereof shall be settled by binding arbitration conducted by JAMS/Endispute
(“JAMS”) in accordance with JAMS Comprehensive Arbitration Rules and Procedures
(the “Rules”).  The arbitration shall be heard by one arbitrator to be selected
in accordance with the Rules, in Orange County, California.  Judgment upon any
award rendered may be entered in any court having jurisdiction thereof.  Within
seven (7) calendar days after appointment the arbitrator shall set the hearing
date, which shall be within ninety (90) days after the filing date of the demand
for arbitration unless a later date is required for good cause shown and shall
order a mutual exchange of what he/she

 

18

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determines to be relevant documents and the dates thereafter for the taking of
up to a maximum of five (5) depositions by each party to last no more than five
(5) days in aggregate for each party.  Both parties waive the right, if any, to
obtain any award for exemplary or punitive damages or any other amount for the
purpose or imposing a penalty from the other in any arbitration or judicial
proceeding or other adjudication arising out of or with respect to this
Agreement, or any breach hereof, including any claim that said Agreement, or any
part hereof, is invalid, illegal or otherwise voidable or void.  In addition to
all other relief, the arbitrator shall have the power to award reasonable
attorneys’ fees and costs to the prevailing party.  The arbitrator shall make
his or her award no later than seven (7) calendar days after the close of
evidence or the submission of final briefs, whichever occurs later.  The
decision of the arbitrator shall be final and conclusive upon all parties. 
Notwithstanding anything to the contrary, if either party desires to seek
injunctive or other equitable relief that does not involve the payment of money,
then those claims shall be brought in a state or federal court located in Orange
County, California, and the parties hereby irrevocably and unconditionally
consent to personal jurisdiction of such courts and venue in Orange County,
California in any such action for injunctive relief or equitable relief.

 

27.                                 Force Majeure.

 

a.                                       Neither party shall be liable for any
delays in delivery or failure to perform or other loss due directly or
indirectly to unforeseen circumstances or causes beyond such party’s reasonable
control (each, individually, a “Force Majeure Event”), including, without
limitation: (a) 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 (b) 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 but only during the period of the applicable Force Majeure Event.

 

b.                                      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.

 

28.                                 Merger.  Except for any letter agreement/s
executed by the parties concurrently herewith, this Agreement and the attached
Exhibits contains the entire agreement between the parties to this Agreement
with respect to the subject matter of this Agreement, is intended as a final
expression of such parties’ agreement with respect to such terms as are included
in this Agreement, is intended as a complete and exclusive statement of the
terms of such agreement, and supersedes all negotiations, stipulations,
understandings, agreements, representations and warranties, if any, with respect
to such subject matter, which precede the execution of this Agreement.

 

29.                                 Waivers.  No waiver of any provision hereof
or of any terms or conditions will be effective unless in writing and signed by
the party against which enforcement of the waiver is sought.

 

30.                                 Product Recall.  If any governmental agency
or authority issues a recall or takes similar action in connection with the
Products, or if MEL determines that an event, incident or circumstance has
occurred which may require a recall or market withdrawal, MEL shall advise
Distributor of the circumstances by telephone or facsimile.  MEL shall have the
right to control the arrangement of any Product recall, and Distributor shall
cooperate in the event of a Product recall with respect the reshipment, storage
or disposal of recalled Products, the preparation and maintenance of relevant
records and reports, and notification to any recipients or end users. MEL shall
pay all reasonable expenses incurred by Distributor of such a recall, including
the costs of destroying Products. Distributor, shall promptly refer to MEL for
exclusive response to all customer or consumer complaints involving the health,
safety, quality, composition or packaging of the Products, or which in any way
could be detrimental to the image or

 

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reputation of MEL or the Products, and shall notify MEL of any governmental,
customer or consumer inquiries regarding the Products about which Distributor
becomes aware.

 

31.                                 Interpretation.  In the event of any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.  No provision of this Agreement
shall be construed against any party on the grounds that such party or its
counsel drafted that provision.

 

32.                                 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.  The parties shall
replace any invalid and/or unenforceable provision with a valid and enforceable
provision that most closely meets the aims and objectives of the invalid and/or
unenforceable provision.

 

33.                                 Distributor Suppliers Guiding Principles. 
MEL has been informed by Distributor that the following are Distributor
Suppliers Guiding Principles (the “Guiding Principles”). Notwithstanding
anything set forth below, compliance with the Guiding Principles shall not
constitute an obligation of MEL under this Agreement.  The Guiding Principles
shall constitute unenforceable goals only of the parties and neither party shall
be entitled to make any claim for breach against the other or enforce any remedy
under this Agreement or terminate this Agreement as the result of non-compliance
with, or a violation of, any Guiding Principle(s). The preceding sentence shall
not detract from the parties respective rights and obligations under Section 19
above.

 

·                                          Laws and Regulations – Each party
will use commercially reasonable good faith efforts to comply with all
applicable local and national laws, rules, regulations and requirements in the
manufacturing and distribution of Products.

 

·                                          Child Labor - Each party will use
commercially reasonable good faith efforts to comply with all applicable local
and national child labor laws.

 

·                                          Forced Labor - Each party will use
commercially reasonable good faith efforts to not use forced, bonded, prison,
military or compulsory labor.

 

·                                          Abuse of Labor - Each party will use
commercially reasonable good faith efforts to comply with all applicable local
and national laws on abuse of employees and will not physically abuse employees.

 

·                                          Freedom of Association and Collective
Bargaining - Each party will use commercially reasonable good faith efforts to
comply with all applicable local and national laws on freedom of association and
collective bargaining.

 

·                                          Discrimination - Each party will use
commercially reasonable good faith efforts to comply with all applicable local
and national discrimination laws.

 

·                                          Wages and Benefits - Each party will
use commercially reasonable good faith efforts to comply with all applicable
local and national wages and benefits laws.

 

·                                          Work Hours and Overtime - Each party
will use commercially reasonable good faith efforts to comply with all
applicable local and national work hours and overtime laws.

 

·                                          Health and Safety - Each party will
use commercially reasonable good faith efforts to comply with all applicable
local and national health and safety laws.

 

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•              Environment - Each party will use commercially reasonable good
faith efforts to comply with all applicable local and national environmental
laws.

 

34.           Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended or shall be construed to give any person or entity, 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.

 

35.           Sales Information and Books and Records; Examination. Not later
than thirty (30) days after the end of each calendar month Distributor shall
deliver to MEL full, complete and accurate written details, of the following
with respect to Distributor’s sale of Products in the Territory: (a) total
sales, (b) taxes and/or duties, (c) discounts and sales allowances paid, accrued
or credited, (d) Products returned during such period, (e) other permitted
allowances, rebates, and allowance programs granted, paid, payable, reimbursed,
credited or incurred by Distributor, and (f) other records containing data in
sufficient detail reasonably necessary to determine all amounts payable to or
reimbursable by MEL under this Agreement (collectively, the “Records”).
Distributor shall keep and maintain complete and true books and other records
containing data in sufficient detail reasonably necessary to determine all
amounts payable to or reimbursable by MEL under this Agreement. MEL shall have
the right, at its own expense, on sixty (60) days prior written notice to have
such books and records and the Records (and all reasonably related work papers
and other reasonable information and documents necessary for any determination
under this Agreement or other related agreements) kept by Distributor examined
once per Calendar Quarter by a public accounting firm appointed by MEL to verify
the completeness and accuracy of the Records.

 

36.           TUPE:

 

a.             This Section 36 applies to the extent that the provisions of the
Transfer of Undertakings (Protection of Employment) Regulations 2006 (or any
equivalent legislation in the Territory which is derived from the Acquired
Rights Directive (Directive 77/187 as amended by Directive 98/50/EC and
consolidated in 2001/23/EC (the “Regulations”) apply in respect of those MEL
employees (or those of its distributors/sub-contractors other than Distributor)
working exclusively on the sales and marketing of the Products immediately prior
to the Effective Date or in respect of those employees of the Distributor or any
sub-distributor working exclusively on the sales and marketing of the Products
immediately prior to the date of termination or expiry of this Agreement (the
“Employees”).

 

b.             Subject to the provisions of clause 36(c), (d) and (e) below, MEL
shall indemnify Distributor from and against all losses, costs, liabilities,
expenses (including reasonable legal fees and disbursements), actions,
proceedings, claims and demands (“Losses”) arising out of or in connection with:

 

(i).           any claim by any Employee (or representative on the Employee’s
behalf) for any remedy including but not limited to any breach of contract,
unfair dismissal, redundancy, statutory redundancy, equal pay, unlawful
discrimination, unlawful deduction from wages, a protective award, an award
under the National Minimum Wage Act 1998 or the Working Time Regulations 1998
(or any legislation in the Territory that is substantially identical and
functionally equivalent) or for breach of statutory duty or of any other nature
as a result of anything done or omitted to be done by MEL (or its
distributors/sub-contractors other than Distributor) in relation to their
employment or termination of such employment prior to the Effective Date;

 

(ii).          any claim by any person (other than an Employee) who asserts that
his rights and liabilities as a result of his employment with MEL or its
distributors/sub-contractors (other than Distributor)  (or the termination of
such employment) whether before or after the Effective Date transfer to
Distributor arising solely under the Regulations;

 

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(iii).         any failure by MEL (or its distributors/sub-contractors other
than Distributor) to comply with its obligations under the Regulations,
including but not limited to its obligations to inform and consult with the
Employees in relation to the transfer of the sales and marketing services for
the Products;

 

c.             In the event that the Regulations are deemed or alleged to apply
to transfer the employment of any person (other than an Employee) from MEL (or
its distributors/sub-contractors other than Distributor) to Distributor at any
time, Distributor shall have the right to terminate such employment with
immediate effect and MEL shall indemnify Distributor and keep Distributor
indemnified against all Losses arising out of such employment or termination of
such employment subject to such termination of employment being carried out in
accordance with the lawful and reasonable directions of MEL.

 

d.             In the event that either (i) Distributor informs MEL before the
Effective Date that it does not require the services of any or all of the
Employees or (ii) MEL informs Distributor before the Effective Date that it
wishes to retain all or any of the Employees, then MEL shall be fully
responsible for those Employees  (even if the Regulations are alleged to apply)
and Distributor shall have the right to terminate such Employees’ employment
with immediate effect (should the Regulations be alleged to apply) and MEL shall
indemnify Distributor and keep Distributor indemnified against all Losses
arising out of such employment or termination of such employment (including any
protective award) subject to such termination of employment being carried out in
accordance with the lawful and reasonable directions of MEL.

 

e.             In the event that Distributor informs MEL within three (3) months
of the Effective Date that it does not require the services of any or all of the
Employees, then Distributor shall have the right to terminate such Employees’
employment with immediate effect and MEL shall indemnify Distributor and keep
Distributor indemnified against all Losses arising out of such employment from
the Effective Date and/or arising out of the termination of such employment
(including any protective award) subject to such termination of employment being
carried out in accordance with the lawful and reasonable directions of MEL.

 

f.              Subject to the provisions of clause 36(b), (c), (d) and (e)
above, Distributor shall indemnify MEL from and against all losses, costs,
liabilities, expenses (including reasonable legal fees and disbursements),
actions, proceedings, claims and demands (“Losses”) arising out of or in
connection with:

 

(i).           any claim by any Employee (or representative on the Employee’s
behalf) for any remedy including but not limited to any breach of contract,
unfair dismissal, redundancy, statutory redundancy, equal pay, unlawful
discrimination, unlawful deduction from wages, a protective award, an award
under the National Minimum Wage Act 1998 or the Working Time Regulations 1998 or
for breach of statutory duty or of any other nature as a result of anything done
or omitted to be done by Distributor or any sub-distributor in relation to their
employment or termination of such employment after the Effective Date but prior
to the date of termination or expiry of this Agreement;

 

(ii).          any claim by any person (other than an Employee) who asserts that
his rights and liabilities as a result of his employment with Distributor or its
sub-distributor (or the termination of such employment) whether before or after
the date of termination or expiry of this Agreement transfer to MEL or its
distributors arising solely under the Regulations;

 

(iii).         any failure by Distributor or its sub-distributors to comply with
its or their obligations under the Regulations, including but not limited to its
obligations to inform and consult with the Employees in relation to the transfer
of the sales and marketing services for the Products;

 

g.             In the event that the Regulations are deemed or alleged to apply
to transfer the employment of any person (other than an Employee) from
Distributor or its sub-distributor to MEL or another of its distributors at any
time, MEL or its distributors shall have the right to terminate such employment
with immediate effect and Distributor shall indemnify MEL and keep MEL
indemnified against all Losses arising out of such employment or

 

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termination of such employment subject to such termination of employment being
carried out in accordance with the lawful and reasonable directions of
Distributor.

 

h.             In the event that either (i) MEL informs Distributor before the
date of termination or expiry of this Agreement that it or its distributors do
not require the services of any or all of the Employees or (ii) Distributor
informs MEL before the date of termination or expiry of this Agreement that it
wishes to retain all or any of the Employees, then Distributor shall be fully
responsible for those Employees (even if the Regulations are alleged to apply)
and MEL or its distributors shall have the right to terminate such Employees’
employment with immediate effect (should the Regulations be alleged to apply)
and Distributor shall indemnify MEL and keep MEL indemnified against all Losses
arising out of such employment or termination of such employment (including any
protective award) subject to such termination of employment being carried out in
accordance with the lawful and reasonable directions of Distributor.

 

i.              In the event that MEL informs Distributor within three (3)
months of the date of termination or expiry of this Agreement that it or its
distributors do not require the services of any or all of the Employees, then
MEL or its distributors shall have the right to terminate such Employees’
employment with immediate effect and Distributor shall indemnify MEL and keep
MEL indemnified against all Losses arising out of such employment from the
Effective Date and/or arising out of the termination of such employment
(including any protective award) subject to such termination of employment being
carried out in accordance with the lawful and reasonable directions of
Distributor.

 

37.           Publicity. MEL and Distributor each agree that the initial public,
written announcements regarding the execution of this Agreement and the subject
matter addressed herein shall be coordinated between the parties prior to
release. Thereafter, each party agrees to use commercially reasonable efforts to
consult with the other party regarding any public, written announcement which a
party reasonably anticipates would be materially prejudicial to the other party.
Nothing provided herein, however, will prevent either party from (a) making and
continuing to make any statements or other disclosures it deems required,
prudent or desirable under applicable Federal or State Security Laws (including
without limitation the rules, regulations and directives of the Securities and
Exchange Commission) and/or such party’s customary business practices, or (b)
engaging in oral discussions or oral or written presentations with actual or
prospective investors or analysts regarding the subject matter of this
Agreement, provided no confidential information is disclosed. If a party
breaches this Section 37 it shall have a seven (7) day period in which to cure
its breach after written notice from the other party. A breach of this Section
37 shall not entitle a party to damages or to terminate this Agreement.

 

38.           Ethical Standards.

 

a. Distributor and each of its sub-distributors will comply with the United
States Foreign Corrupt Practice Act and without derogating from the generality
of the foregoing, will not have its directors, officers or employees, directly
or indirectly, offer, promise or pay any bribes or other improper payments for
the purposes of promoting and/or selling Products to any individual,
corporation, government official or agency or other entity. No gift, benefit or
contribution in any way related to MEL or the promotion and/or sale of Products
will be made to political or public officials or candidates for public office or
to political organizations, regardless of whether such contributions are
permitted by local laws.

 

b. MEL will comply with the United States Foreign Corrupt Practice Act and
without derogating from the generality of the foregoing, will not have its
directors, officers or employees, directly or indirectly, offer, promise or pay
any bribes or other improper payments for the purposes of promoting and/or
selling Products to any individual, corporation, government official or agency
or other entity. No gift, benefit or contribution in any way related to
Distributor or the promotion and/or sale of Products will be made to political
or public officials or candidates for public office or to political
organizations, regardless of whether such contributions are permitted by local
laws.

 

23

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39.           Controlling Language.        This Agreement is in the English
language only, which will be controlling in all respects. No translation, if
any, of this Agreement into any other language will be of any force of effect in
the interpretation of this Agreement or in a determination of the intent of
either party hereto.

 

40.           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 HBC and MEL:

 

Tauranga Ltd.
c/o Mason Hayes & Curran

South Bank House, Barrow Street, Dublin 4, Ireland

Attention: Tony Burke

Telecopy:  +353-1-614-5001

 

And:

 

Hansen Beverage Company

550 Monica Circle, Suite 201

Corona, California 92880

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 Distributor:

 

Coca-Cola Enterprises Inc.
2500 Windy Ridge Parkway

Atlanta, Georgia 30339
Attention:  Chief Financial Officer
Telecopy:  (770) 989-3784

 

with a copy to:

 

Coca-Cola Enterprises Inc.
2500 Windy Ridge Parkway

Atlanta, Georgia 30339
Attention: General Counsel

Telecopy:  (770) 989-3784

 

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

 

24

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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.

 

41.           Further Assurances. Each party to this Agreement will execute all
instruments and documents and take all actions as may be reasonably required to
effectuate this Agreement.

 

42.           Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one document.

 

43.           Confidentiality. During the Term, each party shall maintain in
strict confidence all commercial information disclosed by the other party (which
obligations shall expressly survive termination of this Agreement for any
reason); provided however that such commercial 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, (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 such commercial information.

 

(Signature page/s follows.)

 

25

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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.

 

TAURANGA LTD

 

COCA-COLA ENTERPRISES INC.

 

 

 

 

 

By:

/s/ Rodney Sacks

 

By:

/s/ William W. Douglass III

Name:

Rodney Sacks

 

Name:

William W. Douglass III

Its:

Director

 

Its:

EVP & Chief Financial Officer

 

26

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EXHIBIT A

Monster Energy Belgian Distribution Agreement

 

INITIAL PRODUCT LIST

 

Category  (500 milliliter cans, 500 milliliter bottles and 250 milliliter cans)

 

 

 

 

 

MONSTER

 

X

 

 

 

MONSTER LO CARB

 

X

 

 

 

MONSTER RIPPER

 

X

 

 

 

MONSTER EXPORT

 

X

 

27

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EXHIBIT B

Monster Energy Belgian Distribution Agreement

 

THE TERRITORY

 

Belgium

 

28

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EXHIBIT B-1

Monster Energy International Distribution Agreement

 

INITIAL SUB-DISTRIBUTOR

 

Coca-Cola Enterprises Belgium b.v.b.a

 

29

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EXHIBIT C

Monster Energy Belgian Distribution Agreement

 

THE ACCOUNTS

 

Account Type

 

The Distributor’s 
Accounts
Exclusive ***, ****

 

The Distributor’s
Accounts
Non-Exclusive ***, ****

 

Accounts
Reserved for MEL ***,
****

 

Convenience Stores

 

 

 

 

 

 

 

Chain Convenience Stores

 

 

 

 

 

 

 

Deli’s

 

 

 

 

 

 

 

Independent Grocery

 

 

 

 

 

 

 

Chain Grocery

 

 

 

 

 

 

 

Mass Merchandisers

 

 

 

 

 

 

 

Drug Stores

 

 

 

 

 

 

 

Schools

 

 

 

 

 

 

 

Hospitals

 

 

 

 

 

 

 

Health Food Stores

 

 

 

 

 

 

 

U.S. Military –ONLY AAFES, NEXCOM, MCX, and USCG for Exchanges / Shopettes /
Convenience Stores / Class 6 Stores / vending for the Continental United States
(“CONUS”)

 

 

 

 

 

 

 

U.S. Military –ONLY AAFES, NEXCOM, MCX, and USCG for Exchanges / Shopettes /
Convenience Stores / Class 6 Stores / vending for Outside the Continental United
States (“OCONUS”)

 

 

 

 

 

 

 

U.S. Military – Morale, Welfare & Recreation (i.e. including but not limited to
bowling alleys, golf courses, officers clubs, etc.) for both CONUS & OCONUS

 

 

 

 

 

 

 

U.S. Military – all others including, but not limited to, DeCA, Ships-A-Float,
Troop Feeding for both CONUS & OCONUS

 

 

 

 

 

 

 

Marine Foods Service (e.g. cruise ships, service ships, and oil rigs)

 

 

 

 

 

 

 

 

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

***        Portions hereof have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment in accordance with Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

**** Delineations of exclusivity for accounts have been redacted.

 

30

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Account Type

 

The Distributor’s 
Accounts
Exclusive ***, ****

 

The Distributor’s
Accounts
Non-Exclusive ***, ****

 

Accounts
Reserved for MEL ***,
****

 

Alcoholic Lic. On-Premise*

 

 

 

 

 

 

 

General Sports Retailers non beverage outlets (i.e. including but not limited to
extreme sports retailers, motorcycle dealers and resellers, and all similar
retailers and distributors servicing such sports retailers)

 

 

 

 

 

 

 

Club Stores

 

 

 

 

 

 

 

Vending

 

 

 

 

 

 

 

All other accounts not falling within the descriptions listed above.

 

 

 

 

 

 

 

 

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

*  “Alcoholic Licensed On-Premise Accounts” means accounts licensed by
applicable governmental authority to sell alcoholic beverages for on-premise
consumption.

 

MEL Initials:

 

 

Distributor Initials:

 

 

 

***        Portions hereof have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment in accordance with Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

**** Delineations of exclusivity for accounts have been redacted.

 

31

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EXHIBIT D

Monster Energy Belgian Distribution Agreement

 

THE TRADEMARKS

 

HANSEN’S

 

HANSEN’S NATURAL

 

MONSTER ENERGY

 

MONSTER

 

[g258171ku07i001.jpg]

[g258171ku07i001.jpg] MONSTER

[g258171ku07i001.jpg] MONSTER ENERGY

 

UNLEASH THE BEAST

 

MONSTER LO CARB

 

MONSTER RIPPER

 

MONSTER EXPORT

 

32

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EXHIBIT E

Monster Energy Belgian Distribution Agreement

 

COMPETING PRODUCTS

 

During the term of this Agreement, Distributor shall not market, sell or
distribute in the Territory Energy Drink/s (the “Competing Products”), or
product/s likely to be confused with, any of the Products, except that
Distributor may market, sell and distribute in the Territory Competing Products
that  ***.

 

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

***        Portions hereof have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment in accordance with Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

 

33

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