Exhibit 10.3


 


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 AGREEMENT


 


This MONSTER ENERGY DISTRIBUTION
AGREEMENT (the “Agreement”) is entered into as of October 3, 2008 (the “Effective
Date”) between HANSEN BEVERAGE COMPANY, a Delaware corporation (“HBC”) with
offices at 550 Monica Circle, Suite 201, Corona, California 92880, and
COCA-COLA ENTERPRISES INC., a Delaware corporation with offices at 2500 Windy
Ridge Parkway, Atlanta, Georgia 30339 (“Distributor”).


 


1.             Recitals and Definitions.


 


a.             Distributor is a leading producer and
distributor of beverages throughout the world 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 ***  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.


 






*** 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.


 

















 


Such appointment shall exclude any SKU/s
deleted from distribution pursuant to Sections 13.b. or 13.f. 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.
HBC acknowledges that Distributor intends to appoint certain sub-distributors
with respect to certain specified portions of the Territory, all as identified
on Exhibit B-1 hereto. Distributor’s appointment of
sub-distributors, other than the sub-distributors identified on Exhibit B-1
as of the Effective Date, 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 irrevocable stand-by
letter of credit (“LOC”) in favor of HBC in an amount equal to the Estimated
Buy-Out Contribution.  The LOC shall be
issued by a bank acceptable to HBC, shall be in a form and substance acceptable
to HBC, and shall otherwise be in the form of attached


 


2

















 


Exhibit H.  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”).  As soon as practicable after Distributor’s
receipt of the amount of the Final Buy-Out Contribution, the parties shall
cause the available amount of the LOC to be increased or decreased, as the case
may be, to equal the amount of the Final Buy-Out Contribution.  From time to time, as and when HBC determines
the various applicable amounts due by HBC to acquire the Prior Distribution
Rights, HBC may give one or more written notice/s (the “Payment Notice/s”) to
Distributor specifying the amount/s to be paid by Distributor to HBC from time
to time.  The aggregate amount due under
all Payment Notices shall not exceed the Estimated Buy-Out Contribution
initially, and then the Final Buy-Out Contribution, when that amount has been
determined.  If Distributor fails to pay
HBC the amount set forth in any Payment Notice/s within seven (7) business
days after delivery of such Payment Notice/s to Distributor, HBC shall be
entitled to draw under the LOC the amount/s set forth in the Payment Notice/s,
without prejudice to any other rights and remedies that HBC may have under this
Agreement or at law.  All Payment Notices
shall be sent to the address set forth in Section 36. Distributor shall be
and remain obligated to pay to HBC any shortfall between the Final Buy-Out
Contribution and the aggregate amount received by HBC under the LOC and all
Payment Notices.  Distributor, with the
commercially reasonable cooperation of HBC, may, from time to time, cause the
available amount of the LOC to be reduced to the extent of payments made by
Distributor to HBC pursuant to the Payment Notices, and may cause the
cancellation of the LOC at such time that the aggregate of such payments made
by the Distributor, plus any amounts drawn under the LOC under this Section,
equal 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 in certain portions of the Territory 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 (including without limitation, any
payments due to Anheuser-Busch, Inc.) 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.


 


f.              If HBC reasonably determines that it is
unable to deliver to Distributor any portion/s of the Territory in the United
States that has/have an aggregate Sale Volume as of the Commencement Date
estimated by HBC at not more than *** percent *** of the total Sale Volume as
of the Commencement Date in the entire Territory in the United States, then,
with reasonable notice to Distributor of the identity of the territory to be
replaced and the replacement territory, HBC may delete such portion/s of the
Territory and replace such portion/s by *** with one or more replacement
territory/ies in the United States that has/have Sale Volume for the


 






*** 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.


 


3

















 


period ended as of the Commencement Date which
is reasonably estimated by HBC to be comparable to the Sale Volume for the
period ended as of the Commencement Date of the deleted portion/s of the
Territory. Such replacement territory must be (i) territory where
Distributor has other distribution activities for KO and (ii) large enough
to support efficient operations, but may not be in  ***. 
HBC shall use commercially reasonable good faith efforts to
expeditiously inform Distributor of any Territory that is to be deleted and of
the identity of the replacement 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;


 


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);


 






***   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.


 


4

















 


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


 


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 


 






***   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

















 


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.


 


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  ***  


 






*** 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

















 


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.


 


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.


 


7

















 


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 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


 


8

















 


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.


 


(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.


 


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


 


9

















 


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


 


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


 


(A)       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; and


 


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


 


b.             Complete or Partial Termination By 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


 






***   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

















 


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.


 


(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.


 






***   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)           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  *** of the Commencement
Date 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


 






***   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

















 


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;


 


(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


 


13

















 


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 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.


 


14

















 


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 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.


 


15

















 


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:


 


(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


 






***   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.


 


16

















 


***
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.


 


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.


 






***   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.


 


17

















 


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.


 


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 (i) 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, or (ii) as set forth on attached Exhibit I which is
incorporated in this Section 19 by this reference.


 


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 


 


18

















 


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:


 


·                                          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. The provisions of Section 21 are
set forth on attached Exhibit J and are incorporated in this Section 21
by this reference.


 


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


 


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


 


24.           No Agency.  The
relationship between 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).


 


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


 


19

















 


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.


 


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 


 


20

















 


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.


 


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


 


21
















 


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.                                 Distributor Suppliers Guiding Principles.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


35.           Publicity.  HBC and Distributor each agree that the
initial public, written announcements regarding the execution of this Agreement
and the subject matter addressed herein shall be coordinated between the
parties prior to release.  Thereafter,
each party agrees to use commercially reasonable efforts to consult with the
other party regarding any public, written announcement which a party reasonably
anticipates would be materially prejudicial to the other party.  Nothing provided herein, however, will
prevent either party from (a) making and continuing to make any statements
or other disclosures it deems required, prudent or desirable under applicable
Federal or State Security Laws (including without limitation the rules,


 


22

















 


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 35
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 35 shall not entitle a party to damages or to
terminate this Agreement.


 


36.           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:


 


Coca-Cola
Enterprises Inc.


2500
Windy Ridge Parkway


Atlanta,
Georgia 30339


Attention:
Chief Financial Officer


Telecopy:  (770) 989-3784


 


For Payment Notices:


 


Coca-Cola
Enterprises Inc.


2500
Windy Ridge Parkway


Atlanta,
Georgia 30339


Attention:
Treasurer


Telecopy:  (770) 989-3061


 


with a copy to:


 


Coca-Cola
Enterprises Inc.


2500
Windy Ridge Parkway


Attention:
General Counsel


Telecopy:  (770) 989-3784


 


23

















 


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.


 


37.           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.


 


38.           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.


 


39.           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.


 


40.           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.)


 


24

















 


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

  	
  COCA-COLA
  ENTERPRISES INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Rodney Sacks

  	
   

  	
  By:

  	
  /s/
  William W. Douglass III

  
	
  Name:

  	
  Rodney
  Sacks

  	
   

  	
  Name:

  	
  William
  W. Douglass III

  
	
  Its:

  	
  Chairman

  	
   

  	
  Its:

  	
  EVP &
  Chief Financial Officer

  



 


25

















 


EXHIBIT
A

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 OZ. SKU’s (Regular, Five-O and
Cadillac) ***


 


RUMBA/SAMBA/TANGO ENERGY.  Distribution to  *** in accordance with a Marketing Plan to be
agreed upon by the parties in writing by 
***


 






***   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.


 


26

















 


EXHIBIT
B 

Monster Energy Distribution Agreement


 


THE
TERRITORY


 


See attached maps.


 


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.


 


***


 






*** 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.


 


27

















 


EXHIBIT
B-1 

Monster Energy Distribution Agreement


 


SUB-DISTRIBUTORS


 


	
  Sub-Distributor

  	
   

  	
  Territory

  
	
  BCI
  Coca-Cola Bottling Company of Los Angeles

  	
   

  	
  California,
  Oregon, and Washington

  
	
  The
  Laredo Coca-Cola Bottling Company, Inc.

  	
   

  	
  The
  area around Laredo, Texas.

  
	
  Bryan
  Coca-Cola Bottling Company

  	
   

  	
  The
  area around Bryan, Texas.

  



 


28

















 


EXHIBIT
C 

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






***   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.


 


29

















 


	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive ***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive ***, ****

  	
   

  	
  Accounts

  Reserved for HBC ***, ****

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.


 


30
















 


EXHIBIT D 

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


 


31

















 


EXHIBIT
E  

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.


 


32

















 


EXHIBIT F

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 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.


 


33

















 


EXHIBIT G

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.


 


34

















 


EXHIBIT H 

Monster Energy Distribution Agreement


 


FORM OF LETTER OF CREDIT


 


35

















 


	
  IRREVOCABLE
  LETTER OF

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT
  NO

  	
   

  	
   

  	
   

  	
  DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BENEFICIARY:

  	
   

  	
  APPLICANT:

  
									



 


WE
HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                                
IN YOUR FAVOR AS BENEFICIARY, IN AN AMOUNT NOT TO EXCEED IN THE AGGREGATE U.S.
DOLLARS (AMOUNT IN WORDS) AND 00/100 
**U.S.$                        **
FOR THE ACCOUNT OF THE APPLICANT AVAILABLE BY PAYMENT AGAINST PRESENTATION OF
YOUR DRAFT(S) DRAWN AT SIGHT ON OURSELVES ACCOMPANIED BY THE FOLLOWING
DOCUMENTS:


 


YOUR
MANUALLY EXECUTED ORIGINAL STATEMENT PURPORTED TO BE SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE BENEFICIARY STATING THE FOLLOWING:


 


“THE
UNDERSIGNED, BEING A DULY AUTHORIZED REPRESENTATIVE OF THE BENEFICIARY HEREBY
CERTIFIES THAT PAYMENT BY (APPLICANT) IS DUE UNDER ONE OR MORE OF THE TERMS OF
THAT CERTAIN AGREEMENT DATED AS OF
                      
THAT EXISTS BETWEEN
                                
AND
                                  .  (BENEFICIARY) HAS GIVEN WRITTEN NOTICE TO
                            
PURSUANT TO THE TERMS OF THE AGREEMENT AND SUCH PAYMENT HAS NOT BEEN MADE UP TO
THIS DATE OF DRAWING UNDER THIS LETTER OF CREDIT AND THE TERMS AND CONDITIONS
OF THE
                            
AGREEMENT AUTHORIZE
                                      
TO NOW DRAW DOWN ON THE LETTER OF CREDIT. 
WE FURTHER CERTIFY THAT
                              
WILL APPLY FUNDS DRAWN UNDER THIS LETTER OF CREDIT TO SATISFY [APPLICANTS]
OBLIGATIONS UNDER THE
                                
AGREEMENT AND THE AMOUNT OF USD (INSERT DRAW AMOUNT) IS NOW DUE AND PAYABLE.”


 


NOTWITHSTANDING
ANY REFERENCE IN THIS LETTER OF CREDIT TO OTHER DOCUMENTS, INSTRUMENTS OR
AGREEMENTS OR REFERENCES IN SUCH OTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS TO
THIS LETTER OF CREDIT, THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF
OUR UNDERTAKING AND ANY SUCH DOCUMENTS, INSTRUMENTS OR AGREEMENTS SHALL NOT BE
DEEMED INCORPORATED HEREIN BY SUCH REFERENCES.


 


PARTIAL
DRAWINGS MAY BE MADE UNDER THIS LETTER OF CREDIT, PROVIDED HOWEVER, THAT
EACH SUCH DEMAND THAT IS PAID BY US SHALL REDUCE THE AMOUNT AVAILABLE UNDER
THIS LETTER OF CREDIT.


 


DRAFT(S) MUST
BE PRESENTED TO THE DRAWEE NOT LATER THAN
                            
(THE “EXPIRATION DATE”) AND MUST BE MARKED “DRAWN UNDER DEUTSCHE BANK AG NEW
YORK BRANCH LETTER OF CREDIT NO.
                      
DATED
                      ”


 

















 


EXCEPT
AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS ISSUED SUBJECT
TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007
REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 600.


 


COMMUNICATIONS
TO US REGARDING THIS LETTER OF CREDIT MUST BE IN WRITING AND MUST BE ADDRESSED
TO US AT 60 WALL STREET, NEW YORK, NEW YORK 10005,
             FLOOR,
STANDBY LETTER OF CREDIT UNIT, SPECIFICALLY REFERRING TO THIS LETTER OF CREDIT
BY ITS NUMBER.


 


	
  VERY
  TRULY YOURS,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
  AUTHORIZED
  SIGNATURE

  



 

















 


EXHIBIT I 

Monster Energy Distribution Agreement


 


INDEMNIFICATION


 


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  *** and/or its
affiliates or any change in, or termination of, ***, unless solely attributable
to HBC’s alleged wrongful conduct which is unrelated to this Agreement or any
other agreement between the parties entered into concurrently herewith,
provided that HBC gives Distributor written notice of any indemnifiable claim
and HBC does not settle any claim without Distributor’s prior written consent.


 






***
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.


 


36

















 


EXHIBIT J 

Monster Energy Distribution Agreement


 


COMPETITIVE 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  ***


 






***   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