Exhibit 10.1


 


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

DISTRIBUTION COORDINATION AGREEMENT


 


This MONSTER ENERGY
DISTRIBUTION COORDINATION AGREEMENT (this “Agreement”) is entered into as of October 3,
2008 (the “Effective Date”) between HANSEN BEVERAGE COMPANY, a Delaware
corporation (“Hansen”) and THE COCA-COLA COMPANY, a Delaware corporation (“KO”).


 


Recitals. This
Agreement is made with reference to the following recitals of essential facts:


 


1.             Hansen and KO (each, a “Party” and
collectively, the “Parties”) are both engaged in the manufacture and sale of beverages.


 


2.             KO has relationships with an extensive
North American network of partially owned or independent distributors and/or
bottlers that engage in the manufacture, distribution and sale of KO-branded
beverages. Each such distributor or bottler that is a party to an agreement
with KO (as it may be amended, restated, and/or replaced from time to time, in
each case a “KO Bottler Agreement”) is referred to herein as a “KO Distributor”
and some or all of such distributors are collectively referred to as the “KO
Distributors.”  Certain KO Distributors
have entered into various exclusive agreements with KO pursuant to which they
need consent from KO to distribute competitive products offered by third
parties. Through this Agreement and the provisions contained herein, KO desires
to provide such consent enabling the identified KO Distributors to sell
identified Hansen beverages.


 


3.             Subject to the terms of this Agreement,
Hansen desires to enter into distribution agreements substantially in the form
of attached Exhibit A, A1, A2 and A3 (the “Distribution Agreement”)
for the specific territories described on attached Exhibit B (the “Territory”),
with certain KO Distributors for the distribution and sale of the Products (as
defined below) and KO is willing to assist with those efforts. The “Products”
collectively mean (a) each of the products identified in Exhibit C,
(b) all other shelf-stable, non-alcoholic, Energy Drinks (as defined
below) in ready to drink form, that are packaged and/or marketed by Hansen 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 Hansen distributes from time to time through
its national network of full-service distributors such as, without limitation,
the KO Distributors, Anheuser-Busch, Inc. distributors, Miller/Coors
distributors, and Coke/Pepsi/Dr. Pepper-7UP Bottlers, and (c) such
additional Energy Drinks (as defined below), whether marketed under the Hansen
Marks or otherwise, as Hansen and KO shall agree from time to time by executing
an amended Exhibit C. 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. “Energy Drink/s” means any ***. All Exhibits referred
to in this Agreement shall be deemed to be incorporated into this Agreement.


 






***   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.


 

















 


AGREEMENT


 


1.             Agreement. KO agrees to generally facilitate, consent to and
assist the on-going relationship between Hansen and the KO Distributors
contemplated by this Agreement. KO also agrees to use its commercially
reasonable efforts to (a) facilitate and assist Hansen in regard to its
evaluation of Proposed Distributors (as defined below) as contemplated under Section 2.4
below and (b) recommend to, encourage, facilitate and assist all KO
Distributors in the Territory accepted by Hansen pursuant to the terms of Section 2.5
below to enter into Distribution Agreements with Hansen for the Products for
such parts of the Territory as may be designated by Hansen and agreed to
between Hansen and such KO Distributors in accordance with the procedures set
forth in Section 2 below. Such efforts shall not obligate KO to expend
funds or extend other economic incentives to convince KO Distributors to enter
into Distribution Agreements with Hansen; it being understood by Hansen that KO
does not control KO Distributors, who will independently negotiate distribution
agreements directly with Hansen.


 


2.             Procedures for Appointment of
Distributors.


 


2.1.          CCE
Distribution Agreements.
Concurrently with execution of this Agreement, Hansen and Coca-Cola Enterprises
Inc., a Delaware corporation and Coca-Cola Bottling Company, a Nova Scotia
company (collectively “CCE”) shall each execute a Distribution Agreement, in
substantially the form of Exhibit A1 and Exhibit A2,
respectively  (collectively the “CCE
Distribution Agreements”).


 


2.2.          Subsequent Designation and Identification. The provisions of Section 2.2
through 2.7 shall apply to all Distributors other than CCE. Within thirty (30)
days of the Effective Date, and thereafter at any time required under this
Agreement or that Hansen desires to have KO Distributors distribute Products in
the United States or Canada or distribute more Products in any particular
territory/ies, Hansen will deliver written notice (the “Designation Notice”) to
KO designating: (a) the specific territories in which Hansen desires KO
Distributors to distribute the Products; (b) the Sale Volume (as defined
below) of the designated territory/ies for the period ended the last day of the
month preceding the date of the Designation Notice estimated by Hansen; and (c) the
amount estimated by Hansen to be paid by the KO Distributors to acquire from,
or to terminate the distribution rights for each of Hansen’s existing
distributors in the designated territory/ies who will be terminated and/or
replaced by one or more KO Distributor/s, including any severance or other
payment which may be payable to Anheuser-Busch, Inc. (the “Prior
Distribution Rights”), which shall be calculated by multiplying the Sale Volume
estimated by Hansen by the pre-agreed average rate set forth on attached Exhibit D
during 2008 and thereafter such rate as may be determined by Hansen (the “Estimated
Buy-Out Contribution”). Within a reasonable time of Hansen receiving the
information necessary to determine the actual Sale Volume, but in no event
later than the first anniversary of the Effective Date, as the case may be, the
Estimated Buy-Out Contribution shall be increased or decreased upon written
notice by Hansen, based on the actual Sale Volume. “Sale Volume” means the
aggregate number of physical cases of Products sold or to be sold by any prior
distributor in the Territory and to be sold by Distributor in the Territory or
referenced portion thereof for the twelve (12) month period ended on the
referenced date.


 


2.3.          Proposed Distributors. Within fourteen (14) days of its
receipt of the Designation Notice, KO will deliver written notice (the “Identification
Notice”) to Hansen identifying the specific KO Distributors (the “Proposed
Distributors”) to be appointed to distribute the Products in the respective
territory/ies identified in the Designation Notice, describing how the
Estimated Buy-Out Contribution will be allocated among such KO Distributors
(the “Estimated Buy-Out Allocation”) and any additional relevant information
concerning such KO Distributors, the territory covered by them or the Estimated
Buy-Out Allocation; provided that KO shall not be required to deliver
information that KO is contractually obligated to keep confidential pursuant to
any written agreement with a Proposed Distributor.


 


2.4.          Due Diligence Period. During the twenty-eight (28) day period
immediately following Hansen’s receipt of the Identification Notice (the
“Diligence Period”), Hansen will be entitled to conduct due diligence on the
Proposed Distributors. KO will provide Hansen with such reasonable


 


2

















 


information as may be in KO’s possession
regarding such Proposed Distributors that Hansen reasonably requests in
connection with the investigation; provided, however, that KO shall not be
required to deliver information that KO is contractually obligated to keep
confidential pursuant to any written agreement with a Proposed Distributor or
that KO in good faith believes must remain confidential due to legal reasons or
due to its status as a shareholder in such Proposed Distributor. Hansen will
also be free to contact such Proposed Distributors directly to request any
additional information Hansen reasonably believes is needed to conduct the
investigation. At anytime during the Diligence Period Hansen may, in its sole
and absolute discretion, accept or reject any Proposed Distributor and/or the
Estimated Buy-Out Allocation; provided, however, if Hansen fails to reject any
Proposed Distributor or the Estimated Buy-Out Allocation during the Diligence
Period, Hansen will be deemed to have accepted such Proposed Distributor and/or
Estimated Buy-Out Allocation.


 


2.5.          Acceptance. If Hansen accepts, or is deemed to accept, the
applicable Proposed Distributor and Estimated Buy-Out Allocation set forth in
the Identification Notice, Hansen will, within ten (10) days of the
expiration of the Diligence Period, deliver to the Proposed Distributor a
Distribution Agreement, in substantially the form of Exhibit A3,
for each Proposed Distributor accepted by Hansen (each, an “Accepted
Distributor”), subject to modification as agreed upon by Hansen and the
Proposed Distributor. The Proposed Distributor will promptly return to Hansen
copies of the Distribution Agreements executed by the Accepted Distributors who
have agreed to enter into a Distribution Agreement with Hansen together with
the applicable Estimated Buy-Out Contribution to the escrow specified in the
applicable Distribution Agreement. Within seven (7) days of receipt of any
Distribution Agreement executed by an Accepted Distributor, Hansen will deliver
the Distribution Agreement executed by Hansen to such Accepted Distributor with
a copy to KO.


 


2.6.          Rejection of Estimated Buy-Out Allocation. If Hansen rejects the Buy-Out
Allocation, the Parties agree to negotiate in good faith to reach agreement
with respect to the Estimated Buy-Out Allocation. If the Parties are unable to
reach agreement within thirty (30) days of Hansen’s rejection, either Party may
initiate dispute resolution proceedings in accordance with Section 25
below with respect to the Estimated Buy-Out Allocation.


 


2.7.          Rejection by Distributor. If KO does not identify a Proposed
Distributor in accordance with Section 2.2 above or if any Accepted
Distributor declines to enter into a Distribution Agreement with Hansen, or
fails to return a valid, executed Distribution Agreement to Hansen within
thirty (30) days of delivery of such Distribution Agreement to such Accepted
Distributor, such (a) Distribution Agreement shall be deemed void and the “Territory”
defined in such Distribution Agreement shall be deleted from Exhibit B
which amended Exhibit B shall be executed by the Parties, and (b) Hansen
may enter into an agreement to distribute the Products in the applicable “Territory”
deleted from Exhibit B without any restriction.


 


2.8.          Estimated Volume Commitment. Within thirty (30) days after the
Effective Date, Hansen will designate territories in which Hansen reasonably
estimates that its total sales of Products, including directly by Hansen and
indirectly through distributor/s, were and will at least be the number of cases
set forth on Exhibit E during the twelve (12) month period ended May 31,
2009. In the event that any Proposed Distributor declines to become an Accepted
Distributor pursuant to the terms of this Section 2, Hansen will be deemed
to have satisfied its obligation to designate the number of cases of Products
sold in the Territory assigned to such declining Proposed Distributor. If
Hansen declines to accept a Proposed Distributor that Hansen reasonably
determines is unable or unwilling to perform such Proposed Distributor’s
obligation in accordance with the terms and spirit of the Distribution
Agreement, Hansen will be deemed to have satisfied its obligation to designate
the estimated number of cases of Products sold in the territory assigned to
such Proposed Distributor.


 


3

















 


3.             KO/Hansen Distributors; Distribution
Agreements.
Each KO Distributor with whom Hansen enters into a Distribution Agreement will
hereinafter be referred to as a “KO/Hansen Distributor” but only during the
period in which a KO Bottler Agreement is in effect between KO and such
KO/Hansen Distributor. Any Distribution Agreement entered into between Hansen
and any KO Distributor pursuant to this Agreement and granting such KO Distributor
the right to distribute some or all of the Products shall fall under the terms
of this Agreement and be treated as a Distribution Agreement under this
Agreement for so long as such Distribution Agreement and the KO Bottler
Agreement with such KO Distributor remains in effect. Whenever a KO Bottler
Agreement with a KO/Hansen Distributor is terminated by KO pursuant to either a
deficiency termination procedure or any other right of termination stated in
such a KO Bottler Agreement, KO shall notify Hansen in writing within sixty
(60) days after such termination.


 


4.             KO Assistance.


 


4.1.          If a general product distribution
tracking system is utilized by KO, Hansen will require each KO/Hansen
Distributor to assign a KO-provided tracking number to each Product and Product
package (or such other actions as KO may reasonably request in the future) to
allow for tracking of inventory and sales information by any sales data
collection system then in use generally by KO and the KO Distributors, and as
required under Section 3.p. of the Distribution Agreement. Based on such
information, KO will provide to Hansen for each KO/Hansen Distributor
reasonable information regarding Product sales, Product inventory levels, and
other applicable information reasonably available to KO, provided that KO shall
not be required to deliver information that KO is contractually obligated to
keep confidential pursuant to any written agreement with a KO/Hansen
Distributor unless such KO/Hansen Distributor consents thereto.


 


5.             External Communications.


 


5.1.          Publicity. Hansen and KO 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 5.1
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 5.1 shall
not entitle a Party to damages or to terminate this Agreement.


 


5.2.         Marketing and Promotion.


 


(i)          Hansen and KO agree that the principles
set forth in Section 5.2.(ii) below are generally consistent with the
marketing and promotion guiding principles of both Hansen and KO (the “Guiding
Principles”). Notwithstanding anything set forth below, compliance with the
Guiding Principles shall not constitute an obligation of either Party 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 to
terminate this Agreement as the result of non-compliance with, or a violation
of, any Guiding Principle(s).


 


4

















 


(ii)         Neither Hansen nor KO will advertise, market, or promote the Products
in connection with: (a) material misrepresentations or material omissions
of fact about the Products branded with the Hansen Marks; (b) derogatory
statements or messages about the other Party or its products; (c) illegal
drugs, pornography, racist activities or organizations; or (d) activities,
causes, or products that are generally immoral according to applicable
community standards of the relevant consumer of the Products such that it is
materially detrimental to the other Party’s public image and/or its rights as
set forth in this Agreement.


 


6.             Commissions.


 


6.1.          Commissions Payable by Hansen. In exchange for KO’s performance of its
obligations under this Agreement, Hansen will pay KO a commission (the “Commission”)
equal to the percentage set forth on Exhibit D of the ***. (as
defined below), which percentage will be adjusted for each of the Products on
the first day of each calendar year as set forth on Exhibit D with
reference to Hansen’s then-current Gross Profit Margin (as defined below). The
Commission will be payable monthly in arrears within forty-five (45) days of
the end of each month commencing the Effective Date based on Hansen’s good
faith estimate of ***, and shall be reconciled to reflect actual *** for each
calendar quarter within sixty (60) days of the end of such calendar quarter.


 


“Base
Volume” means the number of actual cases of Products sold by Hansen to all
prior distributors in the applicable territory during the twelve (12) month
period ending the last day of the month immediately preceding the effective
date of each applicable Distribution Agreement, which amount shall be agreed to
by the Parties and shall be attached to this Agreement as Exhibit E,
and which shall be amended from time to time as appropriate in order to reflect
any additional territories that may subsequently be added to this Agreement.


 


“Cost
of Sales” for each of the Products means Hansen’s cost of sales in the United
States and Canada with respect to each such Product for any applicable period
calculated on the same basis and in the same manner that cost of sales is
calculated by Hansen for the purposes of Hansen’s periodic financial statements
from time to time prepared in accordance with generally accepted accounting
principals consistently applied.


 


“Gross
Profit” for a particular Product means Net Sales of each of such Product minus
the aggregate Cost of Sales of each of such Product sold during the applicable
period.


 


“Gross
Profit Margin” for each particular Product means the percentage determined by
multiplying by 100 a fraction having the Gross Profit for such Product as
numerator and the Net Sales for such Product as denominator.


 


***.


 


“Net
Sales” for any applicable period means the gross amount invoiced for all sales
by Hansen to KO/Hansen Distributors in the United States and Canada of each of
the Products for the applicable period, less deductions for (a) federal
and state excise tax to the extent paid for by Hansen in the United States, (b) customary
discounts and sales allowances paid, accrued or credited, (c) Products
returned during such period, and (d) permitted allowances, discounts, free
cases or allowance programs and commissions to third parties paid or incurred
by Hansen in the United States (which for sake of clarity does not include the
Commissions, the Facilitation Fees, and/or the CCL Facilitation Fee) (as
defined below).


 






***   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.


 


5

















 


6.2.          Commissions Payable by KO/Hansen
Distributors.
In exchange for KO’s performance of its obligations under this Agreement, each
KO/Hansen Distributor in the United States will pay a commission to KO computed
in accordance with the formula set forth on Exhibit D based on the
aggregate quantity of Products invoiced by Hansen to the applicable KO/Hansen
Distributor in the United States (the “Facilitation Fee”). Hansen will collect
the Facilitation Fee from the KO/Hansen Distributors in the United States on
behalf of KO as provided in this Section. Hansen agrees that it has no rights
whatsoever in the Facilitation Fees and may not (a) include any
Facilitation Fees in its revenues or list of assets, (b) pledge, grant, or
allow any lien or security interest whatsoever in any of the Facilitation Fees,
(c) retain any such Facilitation Fees as full or partial payment of any
amount(s) allegedly owed to Hansen by KO under this Agreement or by a
KO/Hansen Distributor, or (d) take any action whatsoever inconsistent with
KO’s ownership of the Facilitation Fees. All of Hansen’s invoices to KO/Hansen
Distributors in the United States will include the Facilitation Fee, which will
be payable in accordance with the terms of the Hansen invoice. Hansen will
receive the Facilitation Fees paid in accordance with such Hansen invoice and
remit all Facilitation Fee payments to KO monthly, within fifteen (15) days of
the end of each calendar month. Hansen is in no way guaranteeing payment of the
Facilitation Fees. Hansen will advise KO of any failure by a KO/Hansen
Distributor to pay on a timely basis any Facilitation Fee for which it is
liable within a reasonable time following such default, and cooperate with KO’s
reasonable requests for assistance to collect any defaulted Facilitation Fee
payments at no cost to Hansen. At KO’s request, Hansen will assign all its
rights to collect the defaulted Facilitation Fee to KO. Hansen shall have no
obligations beyond those set forth in this Section 6.2 to assist in the
collection of the Facilitation Fees. With respect to any distribution of the
Products through a KO/Hansen Distributor in Canada, KO’s Canadian subsidiary
(Coca-Cola Ltd., or “CCL”) and CCE’s Canadian subsidiary (Coca-Cola Bottling
Company, or “CCB”) will separately agree between themselves on a similar fee
(the “CCL Facilitation Fee”), which will be paid directly from CCB to CCL.


 


6.3.          Excluded Liabilities. Except as contemplated by Section 23.1
of this Agreement, KO shall not assume pursuant to the terms of this Agreement
any of Hansen’s debts, liabilities or obligations whatsoever, whether accrued,
absolute, contingent, known, unknown or otherwise; any accounts payable; or any
damages, losses, liabilities, claims, charges, actions, suits, proceedings,
deficiencies, taxes, interest, penalties, or costs and expenses arising from or
relating to claims asserted by any third party or Governmental Entity (as
defined in Section 12.3.4 below) regarding the Products.


 


7.             Confidentiality.


 


7.1.          “Confidentiality” Definition. As
used herein, “Confidential Information” means any information, observation,
data, written material, records, documents, computer programs, software,
firmware, inventions, discoveries, improvements, developments, designs,
promotional ideas, customer lists, suppliers lists, financial statements,
practices, processes, formulae, methods, techniques, trade secrets, products
and/or research, in each such case, of or related to a Party’s products,
organization, business and/or finances; provided however that Confidential
Information shall not include any information which (a) is in the public
domain except through any intentional or negligent act or omission of the
non-disclosing Party (or any agent, employee, shareholder, director, officer,
or independent contractor of or retained by such other Party or any of its
Affiliates (as defined in Section 13.1.1 below)), (b) can be shown by
clear and convincing tangible evidence to have been in the possession of the
non-disclosing Party prior to disclosure by the disclosing Party, (c) is
legally and properly provided to the non-disclosing Party without restriction
by an independent third party that is under no obligation of confidentiality to
the disclosing Party and that did not obtain such information in any illegal or
improper manner or otherwise in violation of any agreement with the disclosing
Party, (d) is disclosed without any restrictions of any kind by the
disclosing Party to third parties on a regular basis without any measures being
taken, whether explicitly or implicitly, by the disclosing Party to protect the
confidentiality of such information, or (e) is independently generated by
any employee or independent contractor of or retained by the non-disclosing
Party, and such employee or independent contractor has no knowledge of any of
the Confidential Information.


 


6

















 


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


 


7.3.          Injunctive Relief. Each Party acknowledges that the other
Party will suffer irreparable harm if such Party breaches any of the provisions
regarding confidentiality set forth in this Section 7 and that monetary
damages will be inadequate to compensate the other Party for such breach. Therefore,
if a Party (or any agent, employee, shareholder, director, officer, or
independent contractor of or retained by such other Party or any of its
Affiliates) breaches any of such provisions, then the other Party shall be
entitled to injunctive relief without bond (in addition to any other remedies
at law or equity) to enforce such provisions.


 


8.             Distribution Agreements and Amendments.


 


8.1.          Hansen’s Rights Regarding Distribution
Agreements.
Subject to the terms of Section 2 above, Hansen will have sole and
absolute discretion to determine whether or not to enter into a Distribution
Agreement with any KO Distributor. Except as expressly provided in any
Distribution Agreement with a KO/Hansen Distributor, nothing in this Agreement
should be construed as granting KO Distributors exclusive distribution rights
for the Products or otherwise prohibiting Hansen from entering or maintaining
relationships with other distributors.


 


8.2.          Amendment of Distribution Agreements.


 


8.2.1.       Section 6.b. and Exhibit F
of the Distribution Agreement sets forth, without limitation, the terms under
which the KO/Hansen Distributor pays a Facilitation Fee to Hansen (the “Facilitation
Fee Terms”). Hansen covenants and agrees not to amend, modify, or delete any of
the Facilitation Fee Terms in any of the Distribution Agreements, without KO’s
prior written consent.


 


8.2.2.       KO’s consent shall be required to amend,
modify or delete any provision of any Distribution Agreement. KO shall not
unreasonably withhold or delay its approval of any amendment, modification, or
deletion of any Distribution Agreement sought by Hansen. KO’s approval shall be
deemed to have been granted if KO does not respond within seven (7) business
days of Hansen’s written request.


 


8.3.  The
provisions of this Section 8.3 are set forth on attached Exhibit F
and incorporated in this section 8.3 by this reference.


 


9.             Competitive Product/s. The provisions of this Section 9
are set forth on attached Exhibit G and incorporated in this Section 9
by this reference.


 


10.           Termination of Distribution Agreement/s. In the event of any material breach or
default by a KO/Hansen Distributor under its Distribution Agreement with Hansen
or any other occurrence that would give rise to Hansen’s right to terminate
such Distribution Agreement, Hansen will give KO written notice of such breach,
default or occurrence at the same time as Hansen delivers notice of such
breach, default or occurrence to such KO/Hansen Distributor, and KO shall have
the same opportunity to cure such breach, default, or occurrence as is provided
to the KO/Hansen Distributor under the Distribution Agreement, if any. If the
KO/Hansen Distributor and KO fail to cure the breach, default, or occurrence
within the


 


7

















 


applicable
cure period, if any, Hansen may terminate such Distribution Agreement pursuant
to its terms and seek any remedies available under the Distribution Agreement
or applicable law, in its sole and absolute discretion. KO will not, and will
not directly or indirectly participate in or assist any KO/Hansen Distributor
to, challenge any right or remedy Hansen invokes under any Distribution
Agreement, except to the extent that such challenge may relate to a breach by
Hansen of its obligations under this Agreement or is reasonably necessary for
KO to prevent a material impairment of its rights under this Agreement. Hansen
agrees that (a) KO is not obligated, directly or indirectly, in any way
under any of the Distribution Agreements, (b) KO has not expressly or
implicitly agreed to guarantee the performance of any KO/Hansen Distributor
under its respective Distribution Agreement with Hansen, and (c) Hansen
will not take any action against KO to enforce a KO/Hansen Distributor’s
obligation/s under its Distribution Agreement with Hansen.


 


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 twentieth (20th) anniversary of the
Effective Date (the “Initial Term”). After the Initial Term, this Agreement
shall, subject to being terminated by either Party pursuant to the terms of
this Agreement, continue and remain in effect for as long as any KO/Hansen
Distributor continues to distribute some or all of the Products pursuant to the
terms of a Distribution Agreement.


 


12.           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:


 


12.1.        Material 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 material breach in reasonable
detail from the non-breaching Party; provided, however, if such breach is of a
nature that it cannot reasonably be cured within thirty (30) days, then the
breaching Party shall have an additional thirty (30) day period to cure such
breach, providing it immediately commences, and thereafter diligently uses, in
good faith, its best efforts to cure such breach.


 


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


 


12.3.        Agreement. Mutual written agreement of the Parties.


 


12.4         Termination of Related Agreements.


 


12.4.1.     If the Concurrent Agreement (as defined
below) is terminated by KO without cause or terminated by Tauranga Ltd., an
Irish Company (“MEL”) as a result of a breach by KO, then Hansen 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 Hansen to KO. Any such termination shall be effective upon KO’s
receipt of Hansen’s written notice of termination, and Hansen shall not be
liable to KO or otherwise obligated to pay to KO any Aggregate Termination Fee
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 KO or in reliance on the existence of this Agreement. Hansen’s
right to terminate this Agreement under this Section 12.4.1


 


8

















 


shall be independent of any other rights or
remedies of Hansen under this Agreement. The “Concurrent Agreement” means the
Monster Energy International Distribution Coordination Agreement dated
concurrently herewith between KO and MEL.


 


12.4.2.     If the Concurrent Agreement is terminated
by MEL without cause or terminated by KO as a result of MEL’s breach, then KO
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 KO to Hansen. Any such termination shall be
effective upon Hansen’s receipt of KO’s written notice of termination, and KO
shall not be liable to Hansen or otherwise obligated to pay to Hansen any
Aggregate Termination Fee 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 Hansen or in reliance on the existence of this
Agreement. KO’s right to terminate this Agreement under this Section 12.4.2
shall be independent of any other rights or remedies of KO under this
Agreement.


 


13.           Termination on Change of Control.


 


13.1.       Definitions. The following definitions apply to this
Section 13 and wherever else they are used in this Agreement:


 


13.1.1.     “Affiliate” of any specified Person means
any other Person directly or indirectly Controlling or Controlled by, or under
common Control with, such specified Person.


 


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


 


a.             The Board of Directors of such
corporation, and to the extent necessary, the shareholders of such corporation,
approve a definitive agreement to:


 


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


 


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


 


b.             A plan of liquidation or dissolution of
such corporation is submitted to and approved by the shareholders of such
corporation;


 


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


 


d.             Any Person or group of Persons, other
than (i) the Parent of such corporation as of the date of this Agreement,
or (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of such corporation, becomes the beneficial owner directly or
indirectly (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934) of more than 50% of the Voting Interests


 


9

















 


of such corporation, as a result of a tender
offer or exchange offer, open market purchases, privately negotiated purchases
or otherwise;


 


e.             In any share exchange, extraordinary
dividend, acquisition, disposition or recapitalization (or series of related
transactions of such nature) (other than a merger or consolidation), the
holders of Voting Interests of such corporation immediately prior thereto
continue to own directly or indirectly (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) less than 50% of the Voting
Interests of such corporation (or successor entity) immediately thereafter; or


 


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


 


13.1.3.     “Control” (including the correlative
terms “Controlled by” and “Controlling”) when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of Voting
Interests, by contract or otherwise. Without limitation (a) any Person
that, directly or indirectly, owns or controls, or has the right to own or
control (through the exercise of any outstanding option, warrant or right,
through the conversion of a security or otherwise, whether or not then
exercisable or convertible) more than 50% of the outstanding Voting Interests
of another Person or an aggregate of more than 50% of the outstanding Voting
Interests of a Person, its direct or indirect Parents or the direct or indirect
Subsidiaries of such Person shall be deemed to control such Person for purposes
of this term, and (b) any Person that through any combination of
interests, holdings or arrangements, has, or upon the exercise of any
outstanding option, warrant or right, through the conversion of a security or
otherwise, whether or not then exercisable or convertible, would have the
ability to elect more than 50% of Hansen of the members of the governing board
of any other Person shall be deemed to control such Person for purposes of this
term.


 


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


 


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


 


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


 


13.1.7.     “Subsidiary” means, with respect to any
Person, any corporation, limited liability company, partnership, association or
other organization or entity of which more than 50% of the issued and
outstanding Voting Interests or, in the case of a partnership, more than 50% of
the general partnership interests, is at the time owned by such Person (whether
directly, through one or more of such Person’s direct or indirect
Subsidiaries).


 


10
















 


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


 


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


 


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


 


14.          Termination by Hansen For Violation of
Competitive Products Provisions. Subject to the terms of Section 9.4 and the
last sentence of this Section 14, in the event of KO directly or indirectly
distributing anywhere in the Competitive Territory, through one or more KO
Distributors, a Competitive Product, Hansen may terminate this Agreement upon
(a) thirty (30) days written notice to KO and KO’s failure to cure the alleged
breach within that period, or (b) immediately upon receipt of notice and
without opportunity to cure if KO has violated Section 9 of this Agreement more
than once within any twelve (12) month period. Hansen’s right to terminate this
Agreement under this Section 14 shall be independent of and in addition to any
other rights or remedies of Hansen under this Agreement, including, without
limitation, Section 12.1 above, and the construction and interpretation of
Section 9 shall not restrict, limit or otherwise affect the construction and
interpretation of this Section 14.


 


15.           Termination Without Cause.


 


15.1.       Termination Without Cause by Hansen and
Aggregate Termination Fee.
Hansen, or any successor to Hansen, shall have the right at any time, upon
sixty (60) days written notice to KO, to terminate this Agreement without cause
or for no reason; provided, however, that such termination is expressly
conditioned on Hansen concurrently sending written notice of termination
without cause to, except as provided in the next sentence, each of the then
existing KO/Hansen Distributors pursuant to the terms of the applicable
Distribution Agreements between Hansen and each of those existing KO/Hansen
Distributors. In order to satisfy the foregoing condition, Hansen does not have
to send written notices of termination without cause to any KO/Hansen
Distributors who at that time are in the process of being terminated by Hansen
for cause pursuant to the terms of their applicable Distribution Agreements
with Hansen.


 


15.2.       Termination Without Cause by KO and
Aggregate Termination Fee.


 


(i)            KO, or any successor to KO, shall have
the right at any time to terminate this Agreement, without cause or for no
reason, upon two (2) years written notice to Hansen if such notice is given
prior to the *** of the Effective Date or upon one (1) year’s written notice if
such notice is given after the *** of the Effective Date.


 


(ii)           If KO exercises its right to terminate
this Agreement in accordance with Section 15.2.(i) above, KO shall pay to
Hansen an amount equal to the Aggregate Termination Fee defined and payable
under Section 18.1 below. If, after such notice from KO, prior to the *** of
the Effective Date, this Agreement is otherwise terminated as a result of KO’s
breach of this Agreement, 


 






***   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

















 


including without limitation, arising from the
elimination of substantially all of Hansen’s benefits arising under this
Agreement by KO or KO’s repudiation or abandonment of this Agreement
(collectively, a “Termination Breach”), within the two (2) year notice period,
then, without prejudice to any of Hansen’s other rights and/or remedies, the
Aggregate Termination Fee shall be ***. If after the *** of the Effective Date
but prior to the *** of the Effective Date termination of this Agreement occurs
due to a Termination Breach within the two (2) year notice period, then,
without prejudice to any of Hansen’s other rights and/or remedies, the
Aggregate Termination Fee shall be ***. If, after the *** of the Effective Date
termination of this Agreement occurs due to a Termination Breach within the one
(1) year notice period, then, without prejudice to any of Hansen’s other rights
and/or remedies the Aggregate Termination Fee shall be ***.


 


(iii)          At any time, and from time to time after
KO gives Hansen written notice of termination, and without prejudice to, or in
any way detracting from, KO’s obligation to pay the Aggregate Termination Fee
to Hansen, Hansen may elect to exercise its right to terminate this Agreement
prior to the expiration of any notice period, in which event Hansen shall not
be liable to KO 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 KO or in reliance on the existence of this Agreement.


 


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


 


17.           Obligations on Termination. In the event this Agreement is terminated
pursuant to Sections 12.1, 12.2, 12.3, 12.4, 13, 14 or 15.2 of this Agreement,
such termination will not terminate any Distribution Agreement that is
effective at the time of such termination. In the event that this Agreement is
terminated pursuant to Section 15.1 of this Agreement, Hansen will
simultaneously give notice of termination pursuant to Section 15.1 above to
terminate all associated KO/Hansen Distribution Agreements then in effect. Except
as provided in this Section 17, the expiration or termination of this Agreement
will not terminate any Distribution Agreement that is effective at the time of
such expiration or termination. During the period between a notice of
termination and the effective date of termination, each Party shall continue to
fully perform its obligations under this Agreement. Sections 7, 8.1, 18.1, 19,
20, 21, 22 and 23 of this Agreement shall survive the expiration or termination
of this Agreement.


 


18.           Termination Fees.


 


18.1.        “Aggregate Termination Fee” means the
aggregate of the Commissions and the Facilitation Fees (including the CCL
Facilitation Fee with respect to Canada) due to KO (and/or CCL, in the case of
Canada) for the twelve (12) month period ending on the last day of the last
calendar month preceding the effective date of termination of this Agreement
for Products sold by Hansen to KO/Hansen Distributors who are KO/Hansen
Distributors as of the effective date of such termination; provided that if
termination of this Agreement occurs before the first anniversary of the
Effective Date the Aggregate Termination Fee shall be increased by *** percent
***; and if termination of this Agreement occurs after the first anniversary of
the Effective Date but before the second anniversary of the Effective Date, the
Aggregate Termination Fee shall be increased by *** percent ***. Each
termination fee specified in this Section 18 will be due and payable no later
than thirty (30) days after the effective date of the applicable termination
and such obligation shall survive the termination or expiration of this
Agreement.


 






***   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.


 


12

















 


18.2.        If Hansen terminates this Agreement
pursuant to the terms of Section 12.1 or 14 above, KO shall, without prejudice
to Hansen’s rights and remedies available under this Agreement, equity and/or
applicable law, pay Hansen the Aggregate Termination Fee.


 


18.3.        If KO terminates this Agreement pursuant
to the terms of Section 12.1 above, Hansen shall, without prejudice to KO’s
rights and remedies available under this Agreement, equity and/or applicable
law, pay KO an amount equal to the Aggregate Termination Fee.


 


18.4.        If Hansen terminates a Distribution
Agreement with a KO/Hansen Distributor without cause and without concurrently
terminating this Agreement, Hansen will pay KO the Aggregate Termination Fee
calculated with respect to the Commissions and Facilitation Fees (including the
CCL Facilitation Fee with respect to Canada) payable with respect to the
terminated Distribution Agreement only.


 


18.5.        If Hansen terminates this Agreement
pursuant to the terms of Section 15.1 above, Hansen shall pay KO the Aggregate
Termination Fee.


 


18.6.        If Hansen only terminates a portion of
the territory specified in a particular Distribution Agreement between Hansen
and a KO/Hansen Distributor, without cause, Hansen shall pay KO a partial
termination fee (in each case, a “Partial Termination Fee”) equal to the
Aggregate Termination Fee applicable to the terminated Distribution Agreement
only, that would be owed if the applicable Distribution Agreement were fully
terminated on the date the partial termination occurs, multiplied by a
fraction, the numerator of which is the Net Sales of Products in the terminated
portion of the applicable territory during the twelve (12) months immediately
preceding such termination, and the denominator of which is the Net Sales of
Products in the entire applicable territory during the twelve (12) months
immediately preceding such termination.


 


19.           Limitation of Damages; Limitation of
Liability.
EXCEPT FOR DAMAGES DIRECTLY RESULTING FROM INDEMNITY OBLIGATIONS SET FORTH IN
SECTION 23 OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES (INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF GOODWILL, BUSINESS
INTERRUPTION, LOSS OF BUSINESS OPPORTUNITY, OR ANY OTHER PECUNIARY LOSS)
SUFFERED BY SUCH PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND/OR THE USE OF OR INABILITY TO
USE OR SELL THE PRODUCTS, AND/OR FROM ANY OTHER CAUSE WHATSOEVER, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR DAMAGES
RESULTING FROM THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 23 OF THIS
AGREEMENT, THE PARTIES’ RESPECTIVE TOTAL LIABILITY FOR MONEY DAMAGES ARISING
OUT OF OR RELATED TO THIS AGREEMENT WILL NOT EXCEED THE APPLICABLE AGGREGATE
TERMINATION FEE PAYABLE PURSUANT TO SECTION 18 ABOVE OR THE APPLICABLE PARTIAL
TERMINATION FEE PAYABLE PURSUANT TO SECTION 18.6 ABOVE. THESE LIMITATIONS WILL
APPLY REGARDLESS OF THE LEGAL THEORY OF LIABILITY, WHETHER UNDER CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER THEORY WHATSOEVER.


 


EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH
PROVIDES FOR A LIMITATION OF LIABILITY OR WARRANTIES, DISCLAIMER, OR EXCLUSION
OF DAMAGES, IS EXPRESSLY INTENDED TO BE SEVERABLE AND INDEPENDENT FROM ANY
OTHER PROVISION, SINCE THOSE PROVISIONS REPRESENT SEPARATE ELEMENTS OF RISK
ALLOCATION BETWEEN THE PARTIES, AND SHALL BE SEPARATELY ENFORCED. NEITHER PARTY
MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR


 


13

















 


IMPLIED (INCLUDING THE IMPLIED WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) EXCEPT
THOSE SET FORTH IN THIS AGREEMENT.


 


20.           Books and Records; Examinations.


 


20.1.        For a period of at least two (2) years
following the expiration or earlier termination of this Agreement, Hansen shall
maintain such books and records (collectively, “Hansen Records”) as are
necessary to substantiate that no payments have been made, directly or
indirectly, by or on behalf of Hansen to or for the benefit of any KO employee
or agent who may reasonably be expected to influence KO’s decision to enter
into this Agreement or the amount to be paid by KO pursuant hereto. (As used
herein, “payments” shall include money, property, services and all other forms
of consideration.)  All Hansen Records
shall be maintained in accordance with generally accepted accounting principles
as consistently applied by Hansen. KO and/or its representative shall have the
right at any time during normal business hours, upon seven (7) days written
notice, to examine the Hansen Records, but not more than once per year. The provisions
of this paragraph shall survive the expiration or earlier termination of this
Agreement.


 


20.2.        For a period of at least two (2) years
following the expiration of earlier termination of this Agreement, KO shall
maintain such books and records (collectively, “KO Records”) as are necessary
to substantiate that no payments have been made, directly or indirectly, by or
on behalf of KO to or for the benefit of any Hansen employee or agent who may
reasonably be expected to influence Hansen’s decision to enter into this
Agreement or the amount to be paid by Hansen pursuant hereto. (As used herein, “payments”
shall include money, property, services and all other forms of
consideration.)  All KO Records shall be
maintained in accordance with generally accepted accounting principles as
consistently applied by KO. Hansen and/or its representative shall have the
right at any time during normal business hours, upon seven (7) days written
notice, to examine the KO Records, but not more than once per year. The provisions
of this paragraph shall survive the expiration or earlier termination of this
Agreement.


 


20.3.        Hansen shall keep complete and true books
and other records containing data in sufficient detail necessary to determine
the Commission, the Facilitation Fee, *** of the Products, Gross Profit for
each of the Products, Gross Profit Margin for each of the Products, any
Aggregate Termination Fee, any Partial Termination Fee, and/or any components
of each of these items. 


 


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


 


21.           Trademarks.


 


21.1.        “Hansen Marks” means the trademarks,
trade names, brand names, and logos, copyright material and other intellectual
property owned by Hansen (whether or not registered) and used by it on the
Products and/or in connection with the production, labeling, packaging,
marketing, sale, advertising, and promotion of the Products. KO acknowledges
and agrees that all Hansen Marks shall be and remain the exclusive property of
Hansen. No right, title or interest of any kind in or to the Hansen Marks is
transferred by this Agreement to KO. KO agrees that it will not attempt to
register the Hansen Marks, or any marks 


 






***   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

















 


confusingly similar thereto, in any form or
language anywhere in the world. KO further agrees that during the term of this
Agreement it will not contest the validity of the Hansen Marks or the ownership
thereof by Hansen. If KO desires to reproduce any of the Hansen Marks for
promotional purposes, the reproduction will only be made after written approval
by Hansen. KO shall only use the Hansen Marks in such a manner as to ensure and
maintain the high quality and goodwill associated therewith; provided, however,
that KO may, in consultation with Hansen, submit form or template usages or
specimens of proposed use featuring the Hansen Marks that may be subsequently
used on other materials without seeking additional approval from Hansen,
provided that the form, substance, content and context of such subsequent use
is not materially different from that which Hansen initially approves. KO’s use
of the Hansen Marks will inure for the benefit of Hansen.


 


21.2.        Infringement of Hansen’s Marks. If during the term of this Agreement a third party institutes against
Hansen or KO any claim or proceeding that alleges that the use of any Hansen
Mark in connection with the marketing, promotion, merchandising and/or sales of
the Products under this Agreement infringes the intellectual property rights
held by such third party, then Hansen 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. KO shall use all reasonable efforts to assist and cooperate with
Hansen in such action, subject to Hansen reimbursing KO for any reasonable
out-of-pocket expenses incurred by KO in connection with such assistance and
cooperation. If, as a result of any such action, a judgment is entered by a
court of competent jurisdiction, or settlement is entered by Hansen, such that
any Hansen Mark cannot be used in connection with the marketing, promotion, merchandising
and/or sales of the Products under this Agreement without infringing upon the
intellectual property rights of such third party, then Hansen and KO promptly
shall cease using such affected Hansen Mark in connection with the marketing,
promotion, merchandising and/or sale of the Products under this Agreement. Neither
Party shall incur any liability or obligation to the other Party arising from
any such cessation of the use of the affected Hansen Mark.


 


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


 


21.4.        Prior Agreements. Notwithstanding
the foregoing provisions of paragraph 21 (including the definition of “Hansen
Marks” as including both registered and unregistered rights), the Parties
acknowledge their ongoing discussions over their respective rights in
trademarks containing the term “monster,” *** regarding Hansen’s use of its
MONSTER marks (the “Monster Trademark Agreement”). Nothing contained in this
Agreement shall (a) be deemed to be an acknowledgement by KO of Hansen’s rights
in unregistered marks containing the term “monster” or (b) limit the provisions
of the Monster Trademark Agreement. In the case of a conflict between this
Section 21 and the Monster Trademark Agreement, the Parties agree that the
terms of the Monster Trademark Agreement shall prevail.


 


22.          Representations and Warranties.


 


22.1.        Hansen represents and warrants to KO 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 Hansen to breach
any obligation to, or agreement or confidence with, any other person or entity.


 


22.2.        Hansen 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 Hansen to, or on the order of, KO
and/or any KO/Hansen Distributor are hereby guaranteed as of the date of such
shipment to be, on such date, not adulterated or misbranded within the meaning
of the Federal Food,


 






***   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.


 


15

















 


Drug
and Cosmetic Act, as amended, including the Food Additives Amendment of 1958
(the “Act”), or within the meaning of any substantially identical and
applicable state food and drug law, if any, and not articles which may not
under the provisions of Sections 404, 505, or 512 of the Act, be introduced
into interstate commerce, the Canadian Food and Drugs Act, and the Natural
Health Product Regulations promulgated thereunder.


 


22.3.        Hansen warrants that all Products shall be merchantable.


 


22.4.        KO’s sole and exclusive remedy for Hansen’s breach of Hansen’s
representations in Sections 22.2. and 22.3. above shall be as provided for in
Section 23.3. below.


 


23.           Indemnification and Insurance.


 


23.1. KO agrees to indemnify
and defend Hansen against any third party claims and hold Hansen harmless from
and against any and all damages, losses, liabilities, claims, charges, actions,
suits, proceedings, deficiencies, taxes, interest, penalties, and costs and
expenses arising out of, resulting from or otherwise connected with and to the
extent attributable to (a) any willfully negligent act, misfeasance or
nonfeasance by KO, its Subsidiaries, or any of their respective officers,
employees, directors or agents regarding the sale, distribution or marketing of
the Products, (b) the failure of any representation or warranty made by KO
contained in this Agreement to be true or correct in any material respect
(without regard to any references to materiality contained therein), (c) any
claim, advertising or representation by KO regarding Products that has not been
approved by Hansen, and (d) any claim by CCE arising from the Facilitation Fee
and/or the CCL Facilitation Fee, and as set forth on attached Exhibit H,
which is incorporated in this Section 23.1 by this reference.


 


23.2.        Intentionally omitted.


 


23.3.        Hansen agrees to indemnify and defend KO against any third party claims
and hold KO harmless from and against any and all damages, losses, liabilities,
claims, charges, actions, suits, proceedings, deficiencies, taxes, interest,
penalties, and costs and expenses arising out of, resulting from or otherwise
connected with and to the extent attributable to (a) the formulation,
manufacture, labeling, bottling or packaging of the Products, including, but
not limited to, product defects, product integrity/quality failures, any
ingredient safety issue, product recalls, any violation of applicable law or
regulation, or any injury to or death of any person caused by the Products or
any ingredient contained therein, (b) any willfully negligent act,
misfeasance or nonfeasance by Hansen or any of its respective Subsidiaries,
officers, employees, directors or agents, (c) any claim, advertising or
representation by Hansen or by any agent or representative of Hansen regarding
the Products, (d) the failure of any representation or warranty made by Hansen
contained in this Agreement to be true or correct in any material respect
(without regard to any references to materiality contained therein),
(e) any claim that the authorized use by KO of any of the Hansen Marks
pursuant to this Agreement infringes the trademark, trade dress or trade name
of another, (f) any claim that any packaging for the Products furnished by
Hansen infringes any patent, trade secret or other intellectual property right
of any third party, or (g) the termination or transfer of any of Hansen’s
existing distribution agreements in anticipation or furtherance of the rights
granted to KO in this Agreement.


 


23.4.       During the term of this Agreement and for
a period of two (2) years thereafter, Hansen and KO 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 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:


 


16

















 


·              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.


 


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.


 


23.5.        An indemnified party under this Section 23 shall give to the
indemnifying party prompt notice of the third party claim for which such
indemnified party is seeking indemnification. Until such time as the
indemnifying party acknowledges in writing its obligation to indemnify the
indemnified party under this Section 23, the indemnified party will have
the right to direct, through counsel of its choosing, the defense of any matter
the subject of such indemnification claim. At such time as the indemnifying
party acknowledges in writing its obligation to indemnify the indemnified party
against any and all damages, losses, liabilities, claims, charges, actions,
suits, proceedings, deficiencies, taxes, interest, penalties, and costs and
expenses that may result from such matter, the indemnifying party shall have
the right to direct, through counsel of its own choosing, the defense or
settlement of any matter the subject of indemnification hereunder at its
expense. The indemnified party may thereafter retain its own counsel to
participate in the defense of the matter, at the indemnified party’s own
expense. The indemnified party shall provide the indemnifying parties with
reasonable and relevant access to its records and personnel relating to any
such matter during normal business hours and shall otherwise cooperate with the
indemnifying party in the defense or settlement of any such matter, and the
indemnifying party shall reimburse the indemnified party for all its reasonable
out-of-pocket expenses in connection with such matter. No settlement in respect
of any third party claim may be effected by the indemnifying party without the
indemnified party’s prior written approval. If the indemnifying party shall
fail to undertake any such defense, the indemnified party shall have the right
to undertake the defense or settlement thereof at the indemnifying party’s
expense, provided the indemnifying party has received reasonable notice of, and
opportunity to participate in, any proposed settlement.


 


24.           Miscellaneous.


 


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


 


24.2.        Integration. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter of this
Agreement and is intended by the Parties to be a final expression of their
understanding and a complete and exclusive statement of the terms and
conditions of the agreement. This Agreement supersedes any and all agreements,
either oral or in writing, between the Parties concerning the subject contained
herein and contains all of the covenants, agreements, understandings,
representations,


 


17

















 


conditions, and warranties mutually agreed to
between the Parties. This Agreement may be modified or rescinded only by a
writing signed by the Parties hereto or their duly authorized agents.


 


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


 


24.4.        Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective heirs, executors,
administrators, legal administrators, legal representatives, successors and
assigns. This Agreement shall not be assignable by either Party without the
prior written consent of the other Party; provided, however, that in the event
of the Change of Control of a Party to this Agreement (the “Change of Control
Party”) or its Parent in which the other Party to this Agreement chooses not to
exercise its termination rights under Section 13.3 above and this Agreement is
assumed by the surviving entity or successor to the Change of Control Party, or
by the acquirer of substantially all of the Change of Control Party’s assets as
a matter of law, the Change of Control Party shall be entitled to assign all of
its rights and obligations under this Agreement to such Person without the
other Party’s consent so long as such successor, surviving entity or acquirer
agrees in writing to unconditionally assume all of the Change of Control Party’s
rights and obligations under this Agreement.


 


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


 


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


 


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


 


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


 


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


 


If to Hansen:


 


Hansen
Beverage Company

550 Monica Circle, Suite 201

Corona, California 92880

Attention:  Chief Executive Officer

Telecopy:  (951) 739-6210


 


18

















 


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 KO:


 


The
Coca-Cola Company

P.O. Box 1734

Atlanta, Georgia 30301

Attention:  President, Coca-Cola North
America

Telecopy:  (404) 598-4421


 


with a copy to:


 


The Coca-Cola Company


P.O. Box 1734


Atlanta, GA 30301


Attention: General
Counsel, Coca-Cola North America


Telecopy: 
(404) 598-1088


 


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


 


24.10.      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.


 


25.           Dispute Resolution.


 


25.1.        Arbitration. Any
controversy, claim or dispute of whatever nature arising out of or in
connection with this Agreement or the breach, termination, performance or
enforceability hereof or out of the relationship created by this Agreement (a “Dispute”)
shall be finally resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) in effect on
the date of this Agreement. The Parties understand and agree that they each
have the right to apply to a court of competent jurisdiction for a temporary
restraining order, a preliminary injunction or other equitable relief to
preserve the status quo or prevent irreparable harm. Unless otherwise agreed in
writing by the Parties hereto, the arbitral panel shall consist of three (3)
arbitrators, each of whom shall be a retired judge from a State other than
California or Georgia and shall be appointed by the AAA in accordance with
Section 25.2 below. The place of arbitration shall be Dallas, Texas. Judgment
upon the award may be entered, and application for judicial confirmation or
enforcement of the award may be made, in any competent court having
jurisdiction thereof. Other than as required or permitted by an applicable
governmental entity, each Party will continue


 


19

















 


to perform its obligations under this
Agreement pending final resolution of any such Dispute. The Parties knowingly
and voluntarily waive their rights to have any Dispute tried and adjudicated by
a judge or a jury.


 


25.2.        Immediately after the filing of the submission or the answering
statement or the expiration of the time within which the answering statement is
filed, the AAA shall send simultaneously to each Party to the dispute an
identical list of ten (10) (unless the AAA decides that a larger number is
appropriate) names of retired judges from the National Roster from States other
than California or Georgia. The Parties shall attempt to agree on the three (3)
arbitrators from the submitted list and advise the AAA of their agreement. If
the Parties are unable to agree upon the three (3) arbitrators, each Party to
the dispute shall have fifteen (15) days from the transmittal date in which to
strike no more than three (3) names objected to, number the remaining names in
order of preference, and return the list to the AAA. If a Party does not return
the list within the time specified, all persons named therein shall be deemed
acceptable. From among the persons who have been approved on both lists, and in
accordance with the designated order of mutual preference, the AAA shall invite
the acceptance of the three (3) arbitrators to serve. If the Parties fail to
agree on any of the persons named, or if acceptable arbitrators are unable to
act, or if for any other reason the appointment cannot be made from the
submitted lists, the AAA shall have the power to make the appointment from
among other retired judges on the National Roster from States other than
California or Georgia without the submission of additional lists.


 


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


 


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


 


25.5.        Except for damages directly resulting from indemnity obligations set
forth in Section 23 above, notwithstanding anything to the contrary in this
Agreement, each Party waives the right in any arbitration or judicial
proceeding to receive consequential, punitive, or exemplary damages. The
arbitrators shall not have the power to award consequential, punitive, or
exemplary damages.


 


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


 


27.           Force Majeure.


 


27.1.        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, 


 


20

















 


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.


 


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


 


[THE
NEXT PAGE IS THE SIGNATURE PAGE]


 


21

















 


SIGNATURE PAGE TO MONSTER ENERGY DISTRIBUTION COORDINATION AGREEMENT
BETWEEN HANSEN BEVERAGE COMPANY AND THE COCA COLA COMPANY


 


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


 


 


	
  HANSEN BEVERAGE COMPANY,THE
  COCA-COLA COMPANY,

  
	
  a Delaware corporation

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Rodney Sacks

  	
   

  	
  By:

  	
  /s/ William D. Hawkins III

  
	
   

  	
  Rodney
  Sacks

  	
   

  	
  [Name]

  	
  William D. Hawkins III

  
	
   

  	
  Chief
  Executive Officer

  	
   

  	
  [Title]

  	
  Vice President & General Counsel

  



 
















 


EXHIBIT A


Monster Energy Distribution Coordination Agreement


 


FORM DISTRIBUTION AGREEMENTS


 

















 


[FORM
OF]


MONSTER ENERGY

DISTRIBUTION AGREEMENT


 


This MONSTER ENERGY DISTRIBUTION AGREEMENT (the “Agreement”)
is entered into as of
                          ,
2008 (the “Effective Date”) between HANSEN BEVERAGE COMPANY, a Delaware
corporation (“HBC”) with offices at 550 Monica Circle, Suite 201, Corona,
California 92880, and
                                                                  
(“Distributor”).


 


1.             Recitals and Definitions.


 


a.             Distributor is a leading producer and
distributor of beverages 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 HBC 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 10, 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”).


 


b.             When used herein the word “Products”
means (a) 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 national network of
full-service distributors such as, without limitation, the Anheuser-Busch
Distributors, Miller/Coors distributors, and Coke/Pepsi/Dr. Pepper-7UP
Bottlers and (b) such additional Energy Drinks, whether marketed under the
Trademarks (as defined below) or otherwise, as HBC, 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 HBC 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 ***. All Exhibits referred to in this
Agreement shall be deemed to be incorporated into this Agreement.


 


2.             Appointment.


 


a.             With effect from the Commencement Date,
HBC appoints Distributor, and Distributor accepts appointment, as a distributor
of Products only to Distributor’s Accounts within the Territory. Such appointment
shall only be exclusive if and to the extent so designated on Exhibit C
hereto. Such appointment shall exclude any SKU/s deleted from distribution
pursuant to Sections 13.b. or 13.f. 


 






***   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.


 

















 


below. Unless otherwise agreed
in writing by HBC, Distributor specifically covenants not to sell, market, distribute,
assign or otherwise transfer (collectively, “Transfer”) in any manner any
Products except to the Distributor’s Accounts which are set forth on Exhibit C,
within the Territory. Distributor shall be entitled to appoint sub-distributors
within the Territory provided that the terms of such appointments shall not be
inconsistent with the terms and conditions of this Agreement and shall be
subject to HBC’s rights hereunder. Distributor’s appointment of
sub-distributors shall be to supplement and augment but not to replace or
substitute, wholly or partially, any of Distributor’s obligations or any of
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 hereby agrees not to Transfer
any Products, either directly or indirectly, to any other persons and/or
entities located outside the Territory nor to any persons and/or entities
within the Territory for Transfer, or to persons or entities with regard to
whom Distributor has knowledge or reasonable belief will distribute and/or sell
the Products outside of the Territory, except that, subject to all of the terms
and conditions of this Agreement, Distributor may Transfer Products to other
bottlers or distributors designated by KO that are authorized in writing by HBC
for Transfer into such distributor’s or bottler’s territory.


 


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 HBC 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 HBC 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 HBC and Distributor, (ii) shall
not confer upon Distributor or its sub-distributor(s) any rights of any
nature whatsoever, including without limitation to purchase and/or Transfer or
continue to purchase and/or Transfer any products, including Products, or use
the Trademarks other than with respect to products sold and delivered by HBC to
Distributor, and (iii) shall constitute a separate transaction for each
shipment of products actually delivered by HBC to Distributor and/or
sub-distributor(s), in HBC’s sole and absolute discretion, which HBC shall be
entitled to exercise, vary, withdraw and/or cease, on a case by case basis, at
any time in HBC’s sole and absolute discretion. Distributor irrevocably waives,
releases and discharges any claims, liabilities, actions and rights, in law or
in equity, against HBC 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 HBC with regard to such matters.


 


d.           Distributor has agreed to acquire certain
distribution rights held by prior HBC distributors (“Prior Distributor Rights”)
for the Territory by paying an amount which Distributor and HBC have agreed
shall be calculated in accordance with the formula set forth in Exhibit E
hereto. As soon as practicable after the Effective Date, HBC shall calculate
the estimated amount payable by Distributor in accordance with the formula
agreed to between Distributor and HBC as set forth in Exhibit E
hereto, which shall be calculated based upon the estimated Sale Volume (as
defined below) for the Territory for the period ended October 31, 2008
(the “Estimated Buy-Out Contribution”). No later than fifteen (15) days prior
to the Commencement Date, Distributor shall deliver to HBC an amount equal to
the Estimated Buy-Out Contribution. As soon as practicable after October 31,
2008, HBC shall determine the actual Sale Volume for the Territory for the
period ended October 31, 2008 in order to calculate the final amount due
by Distributor in accordance with the formula set forth in Exhibit E
(the “Final Buy-Out Contribution”). Distributor shall be and remain obligated
to pay to HBC any shortfall between the Final Buy-Out Contribution and the
amount received by HBC for the Estimated Buy-Out Contribution and HBC shall pay
to Distributor the amount by which the Estimated Buy-Out Contribution actually
received by HBC exceeds 


 


2

















 


the amount of the Final Buy-Out
Contribution. The parties acknowledge and agree that in determining the Final
Buy-Out Contribution it will be necessary for HBC to make allocations and
estimates of the Sales Volumes of the Products based upon such information as
may be made available to it by prior HBC distributors. HBC agrees that in
making any such allocations or estimates it shall be required to and shall act
reasonably and in good faith. HBC shall provide to Distributor copies of the
written records relied upon by HBC to reasonably allocate, estimate and
determine the Final Buy-Out Contribution, for review by Distributor, and
Distributor hereby agrees to maintain such information and records in strict
confidence. The Final Buy-Out Contribution paid by Distributor to HBC shall be
used by HBC to acquire or terminate the Prior Distributor Rights and any
shortfall necessary to accomplish that goal shall be borne by HBC and any
excess shall be paid to and/or retained by HBC. “Sale Volume” means the
aggregate number of cases of Products sold and to be sold by any prior
distributors and to be sold by Distributor in the Territory or referenced
portion thereof during the twelve (12) month period ended on a referenced date.
For the avoidance of doubt, HBC shall acquire, terminate or replace the Prior
Distributor Rights and bear the deficiency, if any, between the amount of the
Final Buy-Out Contribution and the cost of acquiring or terminating the Prior
Distributor Rights, whether or not the Final Buy-Out Contribution is
sufficient.


 


e.            HBC may from time to time designate
additional territory (“Additional Territory”), which HBC reasonably determines
to be within such proximity to the Territory as to make incorporation of the
Additional Territory desirable. If HBC gives Distributor written notice of such
designation of Additional Territory, Distributor shall use its commercially
reasonable good faith efforts to add the Additional Territory by execution of
an amendment of Exhibit B to this Agreement if Distributor has
other distribution activities in the Additional Territory.


 


3.             Distributor’s Duties. Distributor shall:


 


a.             Use commercially reasonable good faith
efforts to aggressively promote, solicit and push vigorously the wide
distribution and sale of the Products to Distributor’s Accounts in the
Territory (except to accounts reserved for HBC pursuant to Exhibit C
and those National Accounts (as defined below) that are serviced directly by
HBC in accordance with Section 14). Distributor 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 Distributor, KO, 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 develop new business opportunities for Products in 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 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 Distributor, KO, and their
respective affiliates at early sales presentations and during the new business
development phase;


 


3

















 


c.             Use commercially reasonable good faith
efforts to manage all Distributor 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, except for those National Accounts serviced directly by
HBC in accordance with Section 14 below;


 


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


 


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.             Permit HBC representatives to work sales
routes with Distributor’s salesmen in the Territory, upon reasonable advance
notice to Distributor;


 


i.              Achieve optimum warm and cold space, position,
prominence, and visibility of the Products in all Distributor’s Accounts in the
Territory, except for those National Accounts serviced directly by HBC in
accordance with Section 14 below;


 


j.              Promote and maintain an efficient, viable
and financially sound system of distribution for the Products in Distributor’s
Accounts throughout the Territory, except for those National Accounts serviced
directly by HBC in accordance with Section 14 below;


 


k.             Provide the resources necessary for the
sale, delivery, marketing, promotion and servicing of the Products in
Distributor’s Accounts within the Territory, except for those National Accounts
serviced directly by HBC in accordance with Section 14 below;


 


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 as may be reasonably requested by HBC;


 


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;


 


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


 


4

















 


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 HBC’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. The prices of Products shall be as set forth
in HBC’s then current price list as the same may be changed from time to time
by HBC upon *** prior written notice to Distributor.


 


5.             Orders. All purchase orders for Products shall be
transmitted in writing or electronically, shall specify a reasonable date and
time for delivery with a lead time of at least ten (10) days and shall be
subject to acceptance by HBC in HBC’s reasonable discretion. If HBC is unable
to accept an order for any reason, then HBC 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 HBC’s offers to sell Products and shall limit acceptance
by Distributor to the terms and conditions thereof.


 


6.             Payment.


 


a.             Distributor shall promptly pay the prices
of Products in full (without deduction or set off for any reason) no later than
*** from date of invoice unless HBC otherwise agrees in writing. Distributor
and HBC 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 HBC for any costs and expenses incurred by HBC in
collecting such delinquent amounts, including, without limitation, legal fees
and costs including fees of collection agencies, and interest computed at the
*** percent *** per month or part thereof from the due date(s) or the
maximum legally permissible.


 


b.           Distributor acknowledges that it is aware
that HBC and KO have entered into a distribution coordination agreement (as it
may be amended from time to time, the “Distribution Coordination Agreement”)
under the terms of which KO has agreed to facilitate and coordinate HBC and
certain KO Bottlers entering into distribution arrangements, and after such
arrangements have been entered into, to provide assistance with the collection
and analyses of sales and marketing information concerning the Products, review
and potentially make available for the benefit of HBC and KO various
Distributor logistical arrangements, facilities and systems, and provide other
assistance. In consideration thereof, Distributor agrees to pay to KO a fee
calculated in accordance with the formula set forth on attached Exhibit F
(the “Facilitation Fee”). Each HBC invoice to Distributor will include the
Facilitation Fee, which shall be payable by Distributor in accordance with the
terms of the applicable HBC invoice. HBC will in turn remit the Facilitation
Fee received from Distributor to KO on a monthly basis. Distributor
acknowledges and agrees that (i) HBC may, at any time, assign to KO its
rights to collect the Facilitation Fee, which will allow KO to directly take
action against Distributor to collect any Facilitation Fee owing from
Distributor, (ii) HBC may agree to pay or provide KO with other fees or
benefits as consideration for KO’s performance of its obligations under the
Distribution Coordination Agreement, and (iii) to the extent necessary,
Distributor consents to the provisions of this Section 6.b.


 






***   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.


 


5

















 


7.             Title. Title to the Products shall pass to
Distributor upon delivery of the Products to Distributor.


 


8.             Forecasts and Delivery.


 


a.             Distributor shall provide HBC with *** forecasts
describing the volume of each SKU of Products that Distributor projects will be
ordered during each *** period during the Term (as defined below) of this
Agreement. Distributor shall submit each updated forecast monthly in a format
reasonably acceptable to HBC 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 HBC 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 HBC forecasts in accordance with Section 8.a. above, HBC agrees
to (i) use commercially reasonable good faith efforts to deliver Products
to Distributor within ***, in the case of Monster and Monster LoCarb Products
sold in 24-pack/16 oz. cases, and within *** in the case of all other Products,
of HBC’s receipt of purchase orders for Products in compliance with Sections 5
and 8.a. above, and (ii) deliver Products to Distributor with at least ***
of shelf life remaining at the time of delivery. Notwithstanding the foregoing,
Distributor acknowledges that delivery dates set forth in purchase orders for
Products accepted by HBC are merely approximate and that HBC 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 HBC’s failure to comply with its obligations
under this Section 8.


 


c.            HBC shall use commercially reasonable means
to cause packing and packaging to comply with all applicable state, federal and
local law and packing and packaging to be accompanied by bills of lading or
pallet tags or other documentation to comply with the Public Health Security
and Bioterrorism Preparedness and Response Act of 2002.


 


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
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.


 


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. 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 HBC’s policies and instructions, and HBC 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
HBC in writing or differs materially from a use previously approved by HBC in
writing) shall be subject to the prior written consent of HBC, which HBC may
withhold in its sole and absolute discretion. Distributor shall submit to HBC
in writing each different proposed use of the Trademarks in any medium.


 






***   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.


 


6

















 


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, HBC 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 HBC provides to it in
writing.


 


f.              Upon the termination of this Agreement,
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 HBC 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
HBC’s expense and upon HBC’s request, assist in such legal proceedings as HBC
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 HBC’s request such documents and instruments as may
be necessary or appropriate in the conduct of such proceedings, and (iii) at
HBC’s expense, assist HBC 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 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.


 


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 aggressively 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 HBC and Distributor from time to time. Distributor acknowledges
that (a) HBC has no obligation to market and promote the Products, and (b) HBC
makes no, and hereby disclaims any, express or implied warranty,
representation, or covenant relating to or in connection with HBC’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 HBC and its affiliates and hereby releases HBC 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 HBC or HBC’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 twentieth (20th) anniversary of the
Commencement Date (the “Initial Term”). After the Initial Term, this Agreement
shall, subject to being terminated by either party pursuant to the terms of
this Agreement, continue and remain in effect, unless either party gives written
notice of non-renewal to the other party at least ninety (90) days prior to the
end of the Initial Term or any subsequent anniversary of the Commencement Date,
as the case may be (collectively, the “Term”). A “Contract Year” means any
calendar year during the Term and the period from


 


7

















 


the Commencement Date until the close of
business on December 31st of the calendar year in which the Commencement
Date falls.


 


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:


 


(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 can not 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 HBC
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 to 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. The computation of the Distributor’s “average
gross profit per case” shall exclude the Facilitation Fee; provided that if
this Agreement is terminated by Distributor within three (3) years of the
Effective Date as a result of HBC’s breach, the severance payment shall be
equal to the Breach Severance Payment or the Final Buy-Out Contribution (as
defined above), whichever is greater.


 


(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 HBC. HBC 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, if (x) Distributor sells, assigns, delegates or transfers any of
its rights and obligations under this Agreement without having obtained HBC’s
prior written consent thereto (which consent may be withheld in HBC’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) 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 HBC,
which HBC shall not be entitled to unreasonably withhold, unless such control
or assets are acquired by KO.


 


8

















 


(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 Contract
Year, provided HBC 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.


 


(iii)          Termination by Distributor. Distributor may terminate this
Agreement at any time if HBC fails to deliver to Distributor at least *** 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 HBC written notice of such failure
and HBC has failed to remedy such deficiency within thirty (30) days of HBC’s
receipt of such notice.


 


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


 


(i)            HBC or any successor to HBC, shall have
the right at any time, upon sixty (60) days written notice (or such longer
period as HBC may determine, in its sole discretion) to terminate, without
cause or for no reason (A) this Agreement in its entirety (a “Complete
Termination”), (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”) and/or (C) Distributor’s
right to sell Products in a portion of the Territory (a “Partial Territory
Termination”). Without in any way detracting from the foregoing, to the extent
that any Partial Territory Termination by HBC relates to any portion/s of the
Territory that represents more than *** percent *** of the Sale Volume of the
entire Territory for the period ended as of the last day of the month preceding
such Partial Territory Termination, then HBC shall be obligated to make
available to Distributor replacement territory/ies reasonably satisfactory to
Distributor as set forth in Section 2(f) having Sale Volume for the
period ended the same date comparable to the Sale Volume of the portion of the
Territory/ies terminated, but only to the extent exceeding *** percent *** of
the Sale Volume of the entire Territory for the period ended the same date.


 


(ii)           In the event of a Complete Termination or
Partial Product Termination, HBC or its successor, as the case may be, shall
pay to Distributor a severance payment 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 HBC to Distributor
within thirty (30) days of the later of (A) the date of the applicable
termination, and (B) HBC’s receipt of all information reasonably necessary
to support computation of the Product Severance Payment, in a form and substance
satisfactory to HBC. The computation of the Distributor’s “average gross profit
per case” shall exclude the Facilitation Fee.


 


(iii)          In the event of a Partial Territory
Termination, HBC or its successor, as the case may be, shall pay to Distributor
a severance payment with respect to the Products which are the subject of the
termination, calculated on the same basis as the Product Severance Payment, but
only with respect to that portion of the Territory which is the subject of the
Partial Territory Termination, less the amount, if any, Distributor may receive
from the assignee of its rights under this Agreement, and shall be paid within
the period provided in Section 12.b.(ii) above (the “Territory
Severance Payment”). No Territory Severance Payment shall be payable by HBC to
Distributor if, and to the extent, HBC delivers to Distributor replacement
territory/ies in accordance with Sections 2.f. and 12.b.(i) above.


 






***   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.


 


9
















 


(iv)          Proviso. If this Agreement is terminated prior to the third anniversary of the
Commencement Date and if a Product Severance Payment or Territory Severance
Payment is payable under Section 12.b.(ii) or 12.b.(iii) above, respectively,
then the Product Severance Payment or Territory Severance Payment, as
applicable, shall, subject to the last sentence of this Proviso, be no less
than (A)  *** percent *** of the “Final
Buy-Out Contribution” (as defined above) if such termination occurs within six
(6) months of the Commencement Date, (B) *** percent *** of the Final Buy-Out
Contribution if such termination occurs after six (6) months of the
Commencement Date but prior to the first anniversary of the Commencement Date,
(C) *** percent *** of the Final Buy-Out Contribution if such termination
occurs after the first anniversary of the Commencement Date, but prior to the
second anniversary of the Commencement Date, and (D) the Final Buy-Out
Contribution if such termination occurs after the second anniversary of the
Commencement Date, but prior to the third anniversary of the Commencement Date.
If such termination occurs after the third anniversary of the Commencement
Date, the provisions of this Proviso shall fall away and be of no further force
and effect and any Product Severance Payment or Territory Severance Payment
that may be payable by HBC or its successor to Distributor shall not be
increased or adjusted in any way pursuant to the provisions of this Proviso.


 


For
purposes of computing the Territory Severance Payment under this Section
12.b.(iv), the Final Buy-Out Contribution shall be multiplied by a fraction,
the numerator of which shall be the Sale Volume in the terminated Territory for
the period ended on the last day of the month immediately preceding the month
in which the Partial Territory Termination occurs and the denominator of which
shall be the Sale Volume in the entire Territory for the same period. For
purposes of computing the Product Severance Payment under this Proviso, in the
event of a Partial Product Termination, the Final Buy-Out Contribution shall be
multiplied by a fraction, the numerator of which shall be the number of cases
of Products terminated by such Partial Product Termination sold by Distributor
during the twelve (12) month period ending on the last day of the month
immediately preceding the month in which the Partial Product Termination occurs
and the denominator of which shall be the total number of cases of Products
sold by Distributor for the same period.


 


c.            Distributor Termination 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 two (2) years written notice to HBC if such notice is given
prior to the *** of the Commencement Date, or upon one (1) year’s written
notice if such notice is given after the *** of the Commencement Date.


 


(ii)           If Distributor exercises its right to terminate this Agreement in
accordance with Section 12.c.(i) above, Distributor shall pay to HBC 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. The computation of
the Distributor’s “average gross profit per case” shall exclude the
Facilitation Fee. If such notice is given by Distributor and thereafter, prior
to the *** of the Commencement Date, 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 HBC’s benefits
under this Agreement by Distributor or Distributor’s repudiation or abandonment
of this Agreement (collectively, a “Termination Breach”), within the two (2)
year notice period, then, without prejudice to any of HBC’s other rights and/or
remedies, the Distributor Severance Payment shall be ***. If after the *** of
the Commencement Date but prior to the *** of the Commencement Date termination
of this Agreement occurs due to a Termination Breach within the two (2) year
notice period then, without prejudice to any of HBC’s other rights and/or
remedies, the Distributor Severance Payment shall be ***. If, after the *** of
the Commencement Date


 






***   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

















 


termination
of this Agreement occurs due to a Termination Breach within the one (1) year
notice period, then, without prejudice to any of HBC’s other rights and/or
remedies, the Distributor Severance Payment shall be ***.


 


(iii)          At any time, and from time to time after Distributor gives HBC written
notice of termination, and without prejudice to, or in any way detracting from,
Distributor’s obligation to pay the Distributor Severance Payment, HBC 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 HBC 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, Product
Severance Payment and/or the Territory Severance Payment payable by HBC to
Distributor pursuant to the provisions of Section 12.a.(i)A., Section 12.b.(ii)
and/or Section 12.b.(iii) above respectively, if any, and HBC’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 HBC, 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 HBC 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 HBC 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 HBC pursuant to the
provisions of Section 12.a.(i)(A). and Section 12.c.(ii) above respectively, if
any, and HBC’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 HBC, shall constitute HBC’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 HBC 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 HBC 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 HBC 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):


 


(i)            HBC 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;


 






***   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

















 


(ii)           All amounts payable by Distributor to HBC or by HBC 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)          HBC 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 HBC 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, Territory
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 HBC or Distributor in the event of termination of this Agreement shall
constitute reasonable liquidated damages and is not intended as a forfeiture or
penalty. HBC 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 HBC or
Distributor will incur as a result of such applicable termination. Therefore,
HBC 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 HBC 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 HBC’s rights under
this Agreement or a reinstatement, renewal or continuation of the term of this
Agreement. HBC and Distributor agree that if HBC continues to supply Products
to Distributor following the termination of this Agreement, (i) Distributor
shall be prohibited from selling or otherwise transferring Products except to
Distributor’s Accounts within the Territory, (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 HBC’s invoice, and
(iii) HBC 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


 


12

















 


in any manner, (C) not eliminate, reduce or
replace the listings, shelf space, positioning and/or other benefits enjoyed by
the Products, and (D) generally cooperate with HBC in relation to the
transition to any new distributor appointed by HBC 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, HBC 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 HBC in its sole
and absolute discretion from time to time (“Global Branding and Marketing”). Distributor
acknowledges and agrees that HBC 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 HBC and its
affiliates and hereby releases HBC 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 HBC or HBC’s failure to procure, provide or
perform such activities.


 


b.             Not less than sixty (60) days before the
end of each Contract Year, HBC 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.


 


c.             Not less than sixty (60) days before the
end of the then-current Contract Year, HBC 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 Commencement
Date of this Agreement.


 


d.             HBC and Distributor shall also agree 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 2008 calendar year will be to
integrate Products 


 


13

















 


into the Distributor 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. In years
subsequent to 2008 Performance Targets shall consist of executional measures
such as distribution levels, quality of 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 2009 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 shall be not less than the national average
distribution levels of the leading energy brand within the Territory measured
at the commencement of each applicable year, which shall be primarily
determined with reference to the Nielsen reports (Scantrack) or IRI (Infoscan)
or equivalent reports (the “Reports”). 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) HBC’s failure to deliver Products
in accordance with this Agreement or (B) HBC’s failure to obtain the listing of
a Product SKU in a retail chain for which HBC and Distributor have agreed in
writing that HBC is to be solely responsible, or (C) HBC’s failure to
contribute its agreed share of the parties funding obligation as set forth in Exhibit
G.


 


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 HBC will not unreasonably withhold its approval to
the deletion of any applicable SKU/s. HBC may withhold its approval to deletion
of any SKU/s if any applicable SKU/s has/have sufficient sales velocity or
is/are capable of delivering sufficient sales velocity in any one or more of
Distributor’s Accounts or any one or more regions, 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, 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 be
deleted from distribution in any rolling *** period.


 


g.             Promotional activities shall be regulated
as follows:


 






***   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

















 


(i)            The estimated costs of promotional
activities shall be allocated equally between HBC and Distributor thirty (30)
days prior to the commencement of a calendar year on a cost per-case basis of
Products.


 


(ii)           The promotional activities costs are to
be shared between Distributor and HBC as set forth in Exhibit G. The
parties agree that the costs for the Promotional Activities shall be reconciled
each quarter and that the estimate for the costs of Promotional Activities in
the subsequent quarter may be adjusted provided there is mutual agreement.


 


(iii)          HBC and Distributor shall periodically
meet and may mutually agree to further programs and campaigns not included in
the Promotional Activities.


 


(iv)          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 HBC for its
final written approval. Distributor shall not use marketing materials unless
approved by HBC in writing; provided that if HBC does not notify Distributor
that it objects to any suggested marketing materials within fifteen (15) days
after receipt of such materials from Distributor, HBC shall be deemed to have
approved such suggested marketing materials.


 


14.           National Accounts. The provisions of this Section shall
apply only to accounts that have been assigned exclusively to Distributor in
terms of Exhibit C hereto. Distributor agrees that should HBC wish to
supply Products to any National Account (as defined below), HBC shall be
entitled to make arrangements directly with such National Account and establish
the terms of sale of Products to such National Account and the prices therefor,
which shall take into account the prices then being offered by Distributor
and/or other distributors within whose territory the National Account has
outlets, to such National Account or similar categories of customer. “National
Account” shall mean a customer that sells at retail in more than fifty (50)
stores and in multiple states. Should such National Account have one or more
outlets within the Territory (“Outlets”), and agree to Outlets being serviced
by Distributor, Distributor agrees to service the Outlets in accordance with
such arrangements and on the same terms and at the same prices as HBC shall
have agreed with the National Account concerned. Notwithstanding the foregoing,
Distributor shall be entitled to elect not to service the Outlets by giving
prompt written notice of such election to HBC. Should the National Account not
agree to the Outlets being serviced by Distributor or should Distributor elect
not to service the Outlets, HBC shall be entitled to service the Outlets
directly. Both Distributor and HBC agree to use reasonable commercial good
faith efforts to obtain the agreement of National Accounts to use DSD
distribution with respect to the National Accounts. To the extent HBC services
the Outlets directly and to the extent that HBC makes a commitment for funds or
support in excess of what was agreed to by Distributor, any such excess shall
be borne by HBC. In the event HBC services the Outlets directly, HBC shall pay
to Distributor, during the remaining term of this Agreement, an amount equal to
***  percent *** of the Distributor’s
average gross profit per case per Product line, calculated in accordance with
the provisions of Section 12.a.(i)(A) above, for each case of Products sold by
HBC to the Outlets within a reasonable time after receipt by HBC 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 HBC to the
Outlets during any period shall be determined by multiplying the total number
of cases of Products sold by HBC directly to such National Account or regional
division of such National 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 Territory and the denominator of which shall be the total number of
Outlets that the National Account has within the United States or within the
regional division of such customer, as the case may be. Distributor shall not
be liable to pay the Facilitation Fee on HBC’s direct sales to National
Accounts.


 






***   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.


 


15

















 


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 HBC 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.           HBC’s Representations and Warranties.


 


a.             HBC
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 HBC to breach any
obligation to, or agreement or confidence with, any other person or entity.


 


b.             HBC 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 HBC to, or
on the order of, Distributor are hereby guaranteed as of the date of such
shipment to be, on such date, 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”) or within the meaning of any
substantially identical and applicable state food and drug law, if any, and are
not articles which may not under the provisions of Sections 404, 505, or 512 of
the Act, be introduced into interstate commerce.


 


c.             HBC warrants that all Products shall be
merchantable.


 


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


 


18.           Limitation of Warranty. HBC MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE IMPLIED WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) EXCEPT
THOSE SET FORTH IN SECTION 17 ABOVE.


 


16

















 


19.           Indemnification.


 


a.             Distributor shall indemnify, defend, and
hold harmless HBC 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 HBC
gives Distributor written notice of any indemnifiable claim and HBC does not
settle any claim without Distributor’s prior written consent.


 


b.             HBC 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 HBC’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 HBC, (iii) any prior distributor of Products in the Territory,
(iv) any HBC 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, (B) do not comply with applicable health,
safety, and environmental standards imposed in the Territory, or (C) do not
comply with the Safety Orders of the State of California Division of Industrial
Safety and Proposition 65; provided that Distributor gives HBC written notice
of any indemnifiable claim and Distributor does not settle any claim without
HBC’s prior written consent.


 


c.             If any action or proceeding is brought
against Distributor, HBC 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, HBC 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 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:


 


17

















 


·              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.


 


21.          Competing Products. 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  ***.


 


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 HBC 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).


 






***   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.


 


18

















 


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 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. 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.


 


19
















 


30.           Product Recall. If any governmental agency or authority
issues a recall or takes similar action in connection with the Products, or if
HBC determines that an event, incident or circumstance has occurred which may
require a recall or market withdrawal, HBC shall advise Distributor of the
circumstances by telephone or facsimile. HBC 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. HBC shall pay all
reasonable expenses incurred by Distributor of such a recall, including the
costs of destroying Products. Distributor, shall promptly refer to HBC 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 reputation of HBC or the Products, and
shall notify HBC 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.           Severability. 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.           Provisions Required of a Federal
Contractor.
If reasonably required by Distributor, HBC shall use its commercially
reasonable best efforts to deliver to Distributor such warranties and/or
representations in the form that HBC has customarily provided to governmental
authorities and/or agencies to facilitate sales by Distributor to Distributor’s
Accounts requiring such warranties and/or representations. Such representations
shall be in favor of such governmental authorities and/or agencies and may
include one or more or all of the following topics:


 


a.             Made in America. The Products were mined or produced in the
50 United States, the District of Columbia, or such other U.S. possession as is
permitted by The Buy American Act, or that the Aluminum Bottles qualify as a
domestic end product under said Act.


 


b.           Nondiscrimination in Employment. Unless this contract is exempted, there is
be incorporated in an applicable warranty and/or representation reference to
the provisions of Section 202, the equal opportunity clause of Executive Order
11246, as amended, Section 60.7415, the affirmative action clause of the
regulations under the Rehabilitation Act of 1973, and Section 60.250.5, the
affirmative action clause of the regulations under 38 U.S.C. § 4212, the
Vietnam Era Veterans’ Readjustment Assistance Act of 1974,  and similar state and local law requirements.


 


c.            Executive Order 13201 Compliance (Beck
Rights). If applicable, HBC
agrees to comply with the provisions of 29 C.F.R. Part 470.


 


d.           31 U.S.C.S. Section 1352 Compliance. If applicable, HBC shall comply with 31
U.S.C.S. § 1352.


 


20

















 


If HBC fails to provide or
comply with any such warranty and/or representation in a timely fashion or at
all, then such failure shall not entitle Distributor to make any claim for
breach or termination of this Agreement or allow Distributor to enforce any remedy
under this Agreement as a result of non-compliance with or a violation of any
such warranties or representations.


 


34.           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:


 


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:


 


 


Attention:
                                  


Telecopy:


 


with a copy to:


 


 


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


 


35.           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.


 


21

















 


36.           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.


 


37.           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.


 


38.           Confidentiality. During the Term, each party shall
maintain in strict confidence all commercial information disclosed by the other
party (which obligation 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.)


 


22

















 


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


 


HANSEN
BEVERAGE COMPANY


 


	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  



 


23

















 


EXHIBIT
A

[form of] Monster Energy Distribution
Agreement


 


INITIAL PRODUCT LIST


 


	
  Category (All SKU’s)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER ASSAULT

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER BFC

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER KHAOS

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER LO CARB

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER M80

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER MIXXD

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ALL JAVA MONSTER SKU’s (including
  Originale, Mean Bean, Loca Moca, Nut-UP, Russian, Irish Blend, Lo-Ball, and
  Chai Hai)

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER HITMAN ENERGY SHOOTER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER HEAVY METAL

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LOST ENERGY 16 02. SKU’s (Regular, Five-O and Cadillac)

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RUMBA/SAMBA/TANGO ENERGY

  	
   

  	
  X

  	
   

  



 


24

















 


EXHIBIT
B 

[form of] Monster Energy
Distribution Agreement


 


THE TERRITORY


 


To
be provided by HBC


 


In
the event of a dispute with respect to territorial boundaries between two
adjacent distributors, Hansen Beverage Company shall have the right to decide
such dispute in its sole discretion, and any such decision shall be final and
binding upon the parties.


 


25

















 


EXHIBIT
C 

[form of] Monster Energy
Distribution Agreement


 


THE ACCOUNTS


 


	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive***, ****

  	
   

  	
  Accounts

  Reserved for HBC***,

  ****

  	
   

  
	
  Convenience
  Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain
  Convenience Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deli’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Independent
  Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain
  Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mass
  Merchandisers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Drug
  Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schools

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hospitals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Health
  Food Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.


 


26

















 


	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive***, ****

  	
   

  	
  Accounts

  Reserved for HBC***,

  ****

  	
   

  
	
  Alcoholic
  Lic. On-Premise*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trader
  Joe’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General
  Sports Retailers (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.


 


	
  HBC 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.


 


27
















 


EXHIBIT
D 

[form of] Monster Energy
Distribution Agreement


 


THE TRADEMARKS


 


HANSEN’S


 


HANSEN’S
NATURAL


 


MONSTER
ENERGY


 


MONSTER


 





 


 MONSTER


 


 MONSTER ENERGY


 


MONSTER
ASSAULT


 


MONSTER
BFC


 


MONSTER
KHAOS


 


MONSTER
LO CARB


 


UNLEASH
THE BEAST


 


MONSTER
M80


 


MONSTER
MIXXD


 


JAVA
MONSTER (including Originale, Mean Bean, Loca Moca, Nut-UP, Russian, Irish
Blend, Lo-Ball, and Chai Hai)


 


MONSTER
HITMAN ENERGY SHOOTER


 


MONSTER
HEAVY METAL


 


LOST
ENERGY (including Regular, 5-0, and Cadillac)


 


RUMBA ENERGY JUICE


 


SAMBA ENERGY JUICE


 


TANGO
ENERGY JUICE


 


28

















 


EXHIBIT E


[form of] Monster Energy
Distribution Agreement


 


(Section
2.d)


 


ESTIMATED BUY-OUT CONTRIBUTION


 


The pre-agreed rate shall be***.


 






***   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.


 


29

















 


EXHIBIT
F

[form of] Monster Energy
Distribution Agreement


 


(Section 6.b.)


 


FACILITATION FEE


 


The Facilitation Fee payable by
Distributor to HBC and then by HBC to KO shall be equal to *** per case of 24
units and *** per case of 12 units of Products sold by HBC to the Distributor,
but excluding any free or bonus unit or units used for sampling. Any other case
configuration to be mutually agreed between Distributor and KO.


 






***   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.


 


30

















 


EXHIBIT
G

[form of] Monster Energy
Distribution Agreement


 


PROMOTIONAL ACTIVITIES COSTS


 


Discount and allowances, price promotions
and other customer discount activities (“D&A”):


 


Distributor shall contribute *** for
D&A up to a total of *** per 24-unit 16 oz. case, (reduced or increased on
a pro rata basis for cases containing less than 24 units or a larger number of
units) sold at a discounted price by Distributor to Distributor’s Accounts. Thus,
Distributor’s contribution shall be no more than *** per 24-unit 16 oz. case of
Products (reduced or increased on a pro rata basis for cases containing less
than 24 units or a larger number of units) sold at a discounted price on the
above programs. If additional D&A is necessary to achieve a promotional
price to be offered to a customer as agreed by HBC and Distributor, then HBC
shall contribute any amount required above ***. The frequency of customer
promotional discount programs requiring D&A shall be agreed in the Annual
Business Plan. D&A may be paid by either HBC or Distributor to the customer
and reconciled periodically.


 


Trade Marketing Programs including shelf
buys, CMA’s, free cases, coupons, corporate/retailer rebates, sales force
incentives, POS, samples, meeting competition price offers (“TMP”).


 


Distributor shall contribute an amount
equal to *** on all TMP programs. All TMP programs shall be agreed upon and
form part of the Annual Business Plans and shall include such additional TMP
programs as may be mutually agreed upon from time to time by the parties. In
exceptional cases, such as Trophy or Prestige accounts, either party may
voluntarily agree to contribute more than its *** share to cover any specific
TMP programs. TMP may be paid by either HBC or Distributor to the customer and
reconciled periodically.


 


Equipment.


 


HBC shall permit Distributor to manage
all equipment that HBC owns in the Territory as of the Effective Date. Distributor
shall not be required to repair or service such HBC equipment owned by HBC as
of the Effective Date. Distributor shall use commercially reasonable efforts to
place Products in all Distributor’s equipment where appropriate and desired by
the Distributor’s Account. Distributor shall reimburse HBC for *** of the cost
of equipment that Distributor and HBC agree that HBC purchase for the Territory
in the future and which shall be managed by Distributor.


 


Miscellaneous.


 


If HBC calls on or assists Distributor in
calling on Distributor’s Accounts, to the extent that HBC makes a commitment
for funds or support in excess of what is provided above or was agreed to by
Distributor and HBC, any such excess shall be borne by ***.


 


The parties’ respective rights and
obligations under this Exhibit G shall be revised and amended from time
to time to reflect then-prevailing conditions by written agreement of the
parties to be arrived at after good faith discussions and negotiation. If the
parties are unable to agree upon an amendment requested by either party, such
disagreement shall be referred to arbitration in accordance with Section 26 of
the Agreement.


 


All amounts provided above shall be
adjusted from time to time to account for changes in selling prices or other
adjustments that may occur from time to time to conform to prevailing beverage
industry practices relating to the Energy Drink category. The amounts of such
adjustments shall be mutually agreed in writing by the parties 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.


 


31

















 


EXHIBIT A1


Monster Energy Distribution Coordination Agreement


 


CCE DISTRIBUTION AGREEMENT


 


See
Monster Energy Distribution Agreement, filed as Exhibit 10.3 to the Hansen
Natural Corporation Form 10-Q filed on November 10, 2008.


 


32

















 


EXHIBIT A2


Monster Energy Distribution Coordination Agreement


 


CCE (CANADA) FORM DISTRIBUTION AGREEMENT


 


See
Monster Energy Canadian Distribution Agreement, filed as Exhibit 10.4 to the
Hansen Natural Corporation Form 10-Q filed on November 10, 2008.


 

















 


EXHIBIT A3


 


KO DISTRIBUTOR DISTRIBUTION AGREEMENT


 


See
Monster Energy International Distribution Coordination Agreement, filed as
Exhibit 10.2 to the Hansen Natural Corporation Form 10-Q filed on November
10, 2008.


 
















 


EXHIBIT B


Monster Energy Distribution Coordination Agreement


 


TERRITORY


 


The
United States and Canada


 


***


 






***   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.


 

















 


EXHIBIT C


Monster Energy Distribution Coordination Agreement


 


INITIAL PRODUCT LIST


 


	
  Category

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER ASSAULT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER BFC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER KHAOS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER LO CARB

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER M80

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER MIXXD

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JAVA MONSTER - Originale, Mean Bean, Loca
  Moca, Nut-UP, Russian, Irish Blend, Lo-Ball, and Chai Hai

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER HITMAN ENERGY SHOOTER

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER HEAVY METAL

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LOST ENERGY - Regular, 5-0, and Cadillac

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RUMBA/SAMBA/TANGO ENERGY JUICE

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT D


Monster Energy Distribution
Coordination Agreement


 


ESTIMATED BUY-OUT CONTRIBUTION


ADDITIONAL PROVISIONS


 


The
Parties hereby agree that the provisions set forth below shall be deemed to be
a part of the Monster Energy Distribution Coordination Agreement (the “Coordination
Agreement”). All references to Section numbers below are references to Sections
in the Coordination Agreement. Capitalized terms used but not defined herein
shall have the meaning set forth in the Coordination Agreement.


 


Section 2.1 – The pre-agreed average rate shall be ***.


 


Section 6.1 – If Hansen’s then-current Gross Profit
Margin on any particular Product or package is: ***.


 


Section 6.2 – The Facilitation Fee payable by
Distributors in the United States to Hansen and then by Hansen KO shall be
equal to ***  Products sold by HBC to the
Distributor, but excluding any free or bonus unit or units used for sampling. Any
other case configuration to be mutually agreed between the CCE and KO.


 






***
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.


 


37

















 


EXHIBIT E


Monster
Energy Distribution Coordination Agreement


 


ESTIMATED VOLUME COMMITTED UNDER SECTION
2.8


 


The
“Estimated Volume committed under Section 2.8” shall mean *** physical cases.


 






***   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.


 

















 


EXHIBIT F


Monster Energy Distribution Coordination
Agreement


 


8.3           ***. The Parties acknowledge that it is
their mutual present intention that Hansen will not grant any distribution
rights regarding the Products to *** without informing KO. Notwithstanding
anything to the contrary set forth in this Section 8.3, this provision shall
not be enforceable by or against either 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 a result of
non-compliance with, or a violation of, the preceding sentence. This provision
shall not be construed as granting to or conferring upon KO or any of its
Affiliates (as defined below), any express or implied right of first refusal,
option or other rights with respect to any territory, other than as expressly
set forth in this Agreement.


 






***   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.


 

















 


EXHIBIT G

Monster Energy Distribution Coordination Agreement


 


9.             Competitive Product/s.


 


9.1.          The following definitions apply solely to
this Section 9 and Section 14 below.


 


9.1.1.       “Competitive Product/s” means any Energy
Drink/s, except Energy Drinks (i) ***.


 


9.1.2.       “Competitive Territory” shall mean the
territory collectively covered by all Distribution Agreement/s with KO/Hansen
Distributors in the United States and Canada that are in effect on the date any
particular event that is alleged to violate this Section 9 or Section 14
occurs.


 


9.1.3.       “Existing Affiliate” means any Person (as
defined in Section 13.1.6 below) that is an Affiliate of KO on the Effective
Date.


 


9.2.          KO shall not market, sell and/or
distribute any Competitive Product/s in the Competitive Territory/s.


 


9.3.          ***.


 


9.4.          ***.


 






***   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.


 

















 


EXHIBIT H


Monster Energy Distribution Coordination
Agreement


 


KO
agrees to indemnify and defend Hansen against any third party claims and hold
Hansen harmless from and against any and all damages, losses, liabilities,
claims, charges, actions, suits, proceedings, deficiencies, taxes, interest,
penalties, costs and expenses arising out of, resulting from, or otherwise
connected with and to the extent attributable to, *** unless solely
attributable to Hansen’s alleged wrongful conduct which is unrelated to this
Agreement or any other agreement between the Parties dated concurrently
herewith.


 






***   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.