Buy-Out Contribution"). No
later than fifteen (15) days prior to the Commencement Date, Distributor shall
deliver to HBC an amount equal to the Estimated Buy-Out Contribution. As soon as
practicable after October 31, 2008, HBC shall determine the actual Sale Volume
for the Territory for the period ended October 31, 2008 in order to calculate
the final amount due by Distributor in accordance with the formula set forth in
Exhibit E (the "Final Buy-Out Contribution"). Distributor shall be and remain
obligated to pay to HBC any shortfall between the Final Buy-Out Contribution and
the amount received by HBC for the Estimated Buy-Out Contribution and HBC shall
pay to Distributor the amount by which the Estimated Buy-Out Contribution
actually received by HBC exceeds
2
the amount of the Final Buy-Out Contribution. The parties acknowledge and agree
that in determining the Final Buy-Out Contribution it will be necessary for HBC
to make allocations and estimates of the Sales Volumes of the Products based
upon such information as may be made available to it by prior HBC distributors.
HBC agrees that in making any such allocations or estimates it shall be required
to and shall act reasonably and in good faith. HBC shall provide to Distributor
copies of the written records relied upon by HBC to reasonably allocate,
estimate and determine the Final Buy-Out Contribution, for review by
Distributor, and Distributor hereby agrees to maintain such information and
records in strict confidence. The Final Buy-Out Contribution paid by Distributor
to HBC shall be used by HBC to acquire or terminate the Prior Distributor Rights
and any shortfall necessary to accomplish that goal shall be borne by HBC and
any excess shall be paid to and/or retained by HBC. "Sale Volume" means the
aggregate number of cases of Products sold and to be sold by any prior
distributors and to be sold by Distributor in the Territory or referenced
portion thereof during the twelve (12) month period ended on a referenced date.
For the avoidance of doubt, HBC shall acquire, terminate or replace the Prior
Distributor Rights and bear the deficiency, if any, between the amount of the
Final Buy-Out Contribution and the cost of acquiring or terminating the Prior
Distributor Rights, whether or not the Final Buy-Out Contribution is sufficient.
e.
HBC may from time to time designate additional territory
("Additional Territory"), which HBC reasonably determines to be within such
proximity to the Territory as to make incorporation of the Additional Territory
desirable. If HBC gives Distributor written notice of such designation of
Additional Territory, Distributor shall use its commercially reasonable good
faith efforts to add the Additional Territory by execution of an amendment of
Exhibit B to this Agreement if Distributor has other distribution activities in
the Additional Territory.
3.
Distributor's Duties. Distributor shall:
a.
Use commercially reasonable good faith efforts to aggressively
promote, solicit and push vigorously the wide distribution and sale of the
Products to Distributor's Accounts in the Territory (except to accounts reserved
for HBC pursuant to Exhibit