Document:

Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION
AGREEMENT is made and entered into this _______ day of September 2014 (“Agreement”), by and between Summit Healthcare
REIT, Inc., a Maryland corporation (the “Company”), and (“Indemnitee”).

 

WHEREAS, at the request
of the Company, Indemnitee currently serves as a director or officer of the Company and may, therefore, be subjected to claims,
suits or proceedings arising as a result of his or her service (occurring before or after the execution of this Agreement); and

 

WHEREAS, in recognition
of Indemnitee’s need for (i) substantial protection against personal liability based on Indemnitee’s reliance on the
Second Articles of Amendment and Restatement of Articles of Incorporation (the “Articles”) and Bylaws, as amended (“Bylaws”)
(ii) specific contractual assurance that the protection promised by the Articles and Bylaws will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of the Articles and Bylaws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the Company), and (iii) an inducement to provide effective services to
the Company as an officer, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses
to Indemnitee to the fullest extent (whether partial or complete) permitted under Maryland law and as set forth in this Agreement,
and, to the extent insurance is maintained, to provide for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.

 

WHEREAS, as an inducement
to Indemnitee to continue to serve as such director or officer, the Company has agreed to indemnify and to advance expenses and
costs incurred by Indemnitee in connection with any such claims, suits or proceedings, subject to certain limitations set forth
herein; and

 

WHEREAS, the parties
by this Agreement desire to set forth their agreement regarding indemnification and advancement of expenses;

 

NOW, THEREFORE, in
consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1. Definitions.
For purposes of this Agreement

 

(a) “Change in
Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s
then outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds
of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest;
(ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved
by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board
of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were
directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as
of the Effective Date or whose election for nomination for election was previously so approved.

 

(b) “Corporate
Status” means the status of a person as a present or former director, officer, employee, consultant or agent of the Company
or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee, consultant or agent of any other foreign
or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the
circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at
the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by
the Company or (ii) the management of which is controlled directly or indirectly by the Company.

    	 

    	 

    

 

(c) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
and/or advance of Expenses is sought by Indemnitee.

 

(d) “Effective
Date” means the date of this Agreement.

 

(e) “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in
a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including,
without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond
or its equivalent.

 

(f) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification
agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification
or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(g) “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a
civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature,
including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically
agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate
in the institution of a Proceeding, such situation shall also be considered a Proceeding.

 

Section 2. Services
by Indemnitee. Indemnitee will serve as a director or officer of the Company. However, this Agreement shall not impose any
independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall
not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

 

Section 3. Indemnification
— General. Subject to the limitations in Section 7, the Company shall indemnify, and advance Expenses to, Indemnitee
(a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and
as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits
available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 7,
the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections
of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation
Law (the “MGCL”).

 

In the event Indemnitee
was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant
in, a Proceeding by reason of (or arising in part out of) an indemnifiable event, the Company shall indemnify Indemnitee from and
against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted
(but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the
Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement
shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification
provided by the Certificate of Incorporation, Bylaws, vote of its shareholders or disinterested directors, or applicable law.

 

    	 

    	 

    

 

Section 4. Rights
to Indemnification. Subject to the limitations in Section 7, if, by reason of Indemnitee’s Corporate Status, Indemnitee
is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties,
fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with any such Proceeding unless it is established by clear and convincing evidence that (i) an intentional act
or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property
or services or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct
was unlawful.

 

Section 5. Court-Ordered
Indemnification. Subject to the limitations in Section 7(a) and (b), a court of appropriate jurisdiction, upon application
of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee in the following circumstances:

 

(a) Section 2-418(d)(1)
of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing
such reimbursement; or

 

(b) if such court determines
that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged
liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification
as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in
which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to
Expenses.

 

Section 6. Indemnification
for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 7, to the extent
that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any
Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, he or she shall be indemnified for
all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall nevertheless indemnify Indemnitee under this Section 6 for all Expenses
actually and reasonably incurred by him or her or on his or her behalf in connection with the entire Proceeding.

 

Section 7. Limitations
on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 5), Indemnitee shall not
be entitled to:

 

(a) indemnification
for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that
the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting
on behalf of or performing services for the Company; and (iii) such indemnification is recoverable only out of the Company’s
net assets and not from the Company’s stockholders, investors or stakeholders;

 

(b) indemnification
for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following
conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities
law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee
and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any
state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations
of securities laws;

 

    	 

    	 

    

 

(c) indemnification
hereunder if the Proceeding was won by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;

 

(d) indemnification
hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging
improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or

 

(e) indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this
Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a
party expressly provide otherwise.

 

Section 8. Advance
of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be,
made a party (including as a witness or other participant) to any Proceeding, the Company shall, without requiring a preliminary
determination of Indemnitee’s ultimate entitlement to indemnification hereunder and except as set forth in the following
sentence, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding within ten
days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. The Company may not advance Expenses incurred by or on behalf of Indemnitee
in connection with a Proceeding unless (a) such Proceeding is initiated by a third party who is not a stockholder of the Company
or, if such Proceeding is initiated by a stockholder of the Company acting in his or her capacity as such, a court of competent
jurisdiction specifically approves such advancement, and (b) such Proceeding relates to acts or omissions with respect to
the performance of duties or services on behalf of the Company. The statement or statements requesting advance or advances shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation
by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company
as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially
the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect
at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, relating to claims, issues
or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard
of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 6 of this
Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding
as determined by a judicial proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking
required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without
reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security
therefor.

 

Section 9. Indemnification
and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 7, to the extent that
Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in
any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall
be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such
advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee.

 

Section 10. Procedure
for Determination of Entitlement to Indemnification.

 

(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee
is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee
deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee
shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.

 

    	 

    	 

    

 

(b) Upon written request
by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect
to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee,
which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii)
of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by
the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained,
then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested
Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii)
of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written
opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of
the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with
the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination
in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b).
Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne
by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall
indemnify and hold Indemnitee harmless therefrom.

 

(c) The Company shall
pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

 

Section 11. Presumptions
and Effect of Certain Proceedings.

 

(a) In making any determination
with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption.

 

(b) The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo
contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that
Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

 

(c) The knowledge and/or
actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes
of determining any other right to indemnification under this Agreement.

 

Section 12. Remedies
of Indemnitee.

 

(a) If (i) a determination
is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement,
(ii) advance of Expenses is not timely made pursuant to Section 8 or 9 of this Agreement, (iii) no determination
of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt
by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 6
or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification
pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of his or her entitlement to such indemnification
or advance of Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence
a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first
has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall
not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 6 of this Agreement. Except as
set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration.
The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

    	 

    	 

    

 

(b) In any judicial
proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification
or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant
to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.

 

(c) If a determination
shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent an
intentional misstatement by Indemnitee of a material fact, or an intentional omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification

 

(d) In the event that
Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from
the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in
such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee
in connection with such judicial adjudication or arbitration shall be appropriately prorated.

 

Notwithstanding the foregoing, the Company
shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or
under applicable law or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to indemnification
for indemnifiable Events, and/or (ii) recovery under directors’ and officers’ liability insurance policies maintained
by the Company, but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification or insurance
recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to
Indemnitee, subject to and in accordance with Section 4.

 

(e) Interest shall
be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings
Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing
with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Section 8
or 9 of this Agreement or the 60 th day after the date on which the Company was requested to make the determination
of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment
is made to Indemnitee by the Company.

 

Section 13. Defense
of the Underlying Proceeding.

 

    	 

    	 

    

 

(a) Indemnitee shall
notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or
other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.
The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend
in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.

 

(b) Subject to the
provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee
in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee
of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above.
The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent
to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission
of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability
in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) would
impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought
by Indemnitee under Section 12 above.

 

(c) Notwithstanding
the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld, that he or she may have separate defenses or counterclaims to assert with respect to any issue which
may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion
of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest
or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense
of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the
Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny
or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to
retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably
withheld, at the expense of the Company (subject to Section 12(d)), to represent Indemnitee in connection with any such matter.

 

Section 14. Non--Exclusivity;
Survival of Rights; Subrogation; Coordination of Payments.

 

(a) The rights of indemnification
and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may
at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders
entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing
by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status
prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised
prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise,
shall not prohibit the concurrent assertion or employment of any other right or remedy.

 

(b) In the event of
any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery
of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of
such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

    	 

    	 

    

 

(c) The Company shall
not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses
hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.

 

Section 15. Insurance.
The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee
by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company
to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any
other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the
amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements
and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous
sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or
obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery
of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under
any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is
a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

 

Section 16. Reports
to Stockholders, Investors and Stakeholders. To the extent required by the MGCL, the Company shall report in writing to its
stockholders, investors or stakeholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee
under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of investors
of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

 

Section 17. Duration
of Agreement; Binding Effect.

 

(a) This Agreement
shall continue until and terminate ten years after the date that Indemnitee’s Corporate Status shall have ceased; provided,
that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending or threatened
in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced
by Indemnitee pursuant to Section 12 of this Agreement relating thereto.

 

(b) The indemnification
and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has
ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving in such capacity at the request of
the Company, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators
and other legal representatives.

 

(c) The Company shall
require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory
to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place.

 

(d) The Company and
Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and
difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree
that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity
of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled
to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that,
in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such
requirement of such a bond or undertaking.

 

    	 

    	 

    

 

Section 18. Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal
or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and
shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed
to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section, paragraph
or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 19. Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

 

Section 20. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

 

Section 21. Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 22. Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

	 	(a)	If to Indemnitee, to the address set forth on the signature page hereto.

 

	 	(b)	If to the Company to:

 

Summit Healthcare
REIT, Inc.

2 South
Pointe Dr., Ste. 100

Lake Forest,
CA 92630

Attn: Chief
Executive Officer and Chief Financial Officer

 

or to such other address as may have been
furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

Section 23. Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland,
without regard to its conflicts of laws rules.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 

    	 

    

  

 

IN WITNESS WHEREOF,
the parties hereto have executed this Indemnification Agreement on the day and year first above written.

 

	 	 	SUMMIT HEALTHCARE REIT, INC.
	 	 	
         

        By: _______________________

	 	 	Name: ____________________
	 	 	
         

        Title: _____________________

	 	 	 
	 	 	INDEMNITEE:  
	 	 	 
	 	 	_____________________________________
	 	 	 
	 	 	 
	 	 	Address:  
	 	 	 

 

    	 

    	 

    

  

EXHIBIT A

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES
ADVANCED

 

To: The Board of Directors of Summit Healthcare REIT, Inc.

 

Re: Affirmation and Undertaking

 

Ladies and Gentlemen:

 

This Affirmation and Undertaking is being
provided pursuant to that certain Indemnification Agreement, dated the __ day of _____, 2014, by and between Summit Healthcare
REIT, Inc., a Maryland corporation (the Company”), and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).

 

Terms used herein and not otherwise defined
shall have the meanings specified in the Indemnification Agreement.

 

I am subject to the Proceeding by reason
of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief
that at all times, insofar as I was involved as a director or officer of the Company, in any of the facts or events giving rise
to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper
personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to
believe that any act or omission by me was unlawful.

 

In consideration of the advance of Expenses
by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the
“Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an
act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property
or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was
unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest
thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

 

IN WITNESS WHEREOF, I have executed this
Affirmation and Undertaking on this        day of       20       .mine_ex101.htm

Exhibit 10.1

 

DISTRIBUTION AGREEMENT

(EXCLUSIVE TERRITORY)

 

This Distribution Agreement (this “Agreement”) is made as of this 19th, day of August, 2014 (the “Effective Date”), by and between Level 5 Beverage Company (“Supplier”), and Drink King Distributing Company, Inc. (“Distributor”).

RECITALS

WHEREAS, Supplier is engaged in the business of manufacturing and selling various beverage products;

 

WHEREAS, Distributor is engaged in the business of the distribution of beverage products and other consumer products;

 

WHEREAS, Supplier desires to grant to Distributor, and Distributor desires to accept from Supplier, the exclusive right to sell and/or distribute (collectively, “Distribute”) the Products via the Channel in the Territory (each as defined below) in accordance with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, Supplier and Distributor, intending to be legally bound, agree as follows:

AGREEMENT

	
1.  

	
CERTAIN DEFINED TERMS

As used in this Agreement and the Schedules hereto, and unless otherwise expressly indicated, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

A.           “Affiliate” shall mean, with respect to a specified Person (as defined below), any Person directly or indirectly controlling, controlled by or under common control with such Person.  As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or to cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

B.           “Channel” shall mean the direct store distribution channel.

 

C.            “Person” shall mean any individual, corporation, partnership, limited liability company, trust, estate, or other entity, unincorporated organization or government, or other agency or political subdivision thereof.

 

 

  

1

  

 

D.           “Products” shall mean those consumer products distributed by Distributor pursuant to this Agreement as listed on Schedule A attached hereto which is incorporated into this Agreement by this reference.

E.           “Recall/Withdrawal Event” shall mean actions which for any reason: (i) Supplier or a government authority may take regarding a Recalled Product, or (ii) Supplier may take regarding a Withdrawn Product.

F.           “Recalled Product” shall mean Product which Supplier or a governmental authority for any reason determines: (i) may violate Applicable Law; or (ii) the use or consumption of which may pose an undue risk to public health or safety

G.           “Territory” shall mean the geographic areas listed on Schedule B attached hereto.

H.           “Withdrawn Product” shall mean Product which Supplier for any reason, in its sole discretion, elects to physically remove from sale within a geographic area that includes the Territory.

2.         TERM

           Subject to earlier termination in accordance with Paragraph 9 of this Agreement, the term of this Agreement shall be for a three (3) year period commencing as of the Effective Date.  Subject to the terms and conditions herein, upon the expiration of the initial term, the term of this Agreement shall automatically be renewed for successive one (1) year periods.

	
3.  

	
RESALE RIGHTS

A.          Supplier hereby appoints Distributor as its exclusive distributor for the Distribution of the Products via the Channel in the Territory, and Distributor agrees to use commercially reasonable efforts to resell the Products via the Channel in the Territory on the terms and conditions set forth herein.  The parties acknowledge that Schedule A may be amended from time to time upon the mutual written consent of the parties to add or modify the Products to be Distributed hereunder.  Distributor shall not solicit orders for the Products from outside the Territory.  If Distributor receives orders from outside the Territory, Distributor shall promptly refer all such orders directly to Supplier without processing such orders or accepting any payment for such orders.  Any (a) marketing or sales of Products by Distributor outside the Territory or (b) sales of Products to entities that Distributor knows or has reason to believe are reselling Products outside the Territory, shall be considered a material breach of this Agreement.

B.           If Supplier introduces any new product which is similar to the Products (including, without limitation, any reformulations of the Products) during the term of this Agreement, then Supplier shall offer Distributor the right to Distribute such product via the Channel within the Territory on the terms and conditions of this Agreement (other than pricing for such new product, which shall be agreed upon in good faith by the parties).  If Distributor accepts distribution of such new product within thirty (30) days of Distributor's receipt of written notice from Supplier, Distributor shall commence the sale and distribution of such new product within fifteen (15) days following such acceptance, and such new product shall be included within the definition of the “Products” and Schedule A shall be amended accordingly.  If Distributor does not accept distribution of such new product, Supplier may Distribute such new product via another Person; provided, however, that Supplier may not offer any Person the right to Distribute such product within the Territory on terms more favorable to such Person than those offered to Distributor without first re-offering to Distributor the right to Distribute such product in accordance with this Paragraph 3B.

 

 

  

2

  

4.  SUPPLY OF PRODUCTS; CUSTOMER SERVICE; PRODUCT REFUNDS; INVASION FEES

A.   Supplier will supply to the Distributor such quantities of the Products as shall be required by the Distributor to perform the conditions of this Agreement and the same shall be shipped on order from the Distributor subject to and consistent with the production schedules of Supplier. During any time in which demand exceeds supply of the Products, Supplier may restrict the availability of the Products to Distributor in accordance with a commercially reasonable equitable allocation program specified by Supplier.

B.            Distributor shall submit written purchase orders for all Products to be purchased hereunder.  Any provisions in a purchase order which conflict with the provisions of this Agreement will be null and void, unless otherwise agreed to in writing by Supplier and unless such provision expressly states that it is intended to supersede a provision of this Agreement and specifically identifies the provision(s) being superseded.  Purchase orders for the Products shall state the following terms, which shall be in full conformity with the terms and conditions of this Agreement:

	
(1)  

	
The purchase order number and date;

	
(2)  

	
The type and quantity of each Product ordered;

	
(3)  

	
The total price of the Products ordered;

	
(4)  

	
The suggested delivery date (Supplier shall use its commercially reasonable efforts to deliver the Products no later than ten (10) business days of the suggested delivery date whenever possible; and shall promptly notify Distributor of any inability of Supplier to make full and delivery of a purchase order within such time period); and

	
(5)  

	
All relevant shipping information.

C.           During the first twelve (12) months of the term of this Agreement, Supplier agrees to deliver to Distributor from time to time upon ten (10) business days prior written notice from Distributor (which notice specifies the type and quantity of the sample Products requested) up to an aggregate of agreed upon number of units of the Products at no cost to Distributor for use for promotional and sampling purposes.  Distributor agrees to use such Products solely for promotional purposes and agrees not to sell such sample units for a profit.  Such sample Products shall be deemed “Products” for all purposes of this Agreement (other than Distributor's obligation to pay Supplier for such sample Products).

 

 

  

3

  

D.           Supplier shall replace, at its own expense (or provide a credit to Distributor's account for the delivered price of such Products), (i) all Products which are spoiled, defective, damaged or in otherwise unsaleable condition or deficient in quality upon delivery to Distributor by Supplier (provided that any damage must be reported within 72 hours of delivery to Distributor's warehouse) or (ii) any defective Product returned to Distributor by any sub-distributor, retailer, wholesaler or other vendor of Distributor.

E.           Supplier shall cause Products to be manufactured and labeled in accordance with all applicable federal, state and local laws and regulations, including but not limited to the U.S. Food, Drug and Cosmetic Act, the Occupational Safety and Health Act, and all associated regulations, including but not limited to Good Manufacturing Practices.

F.           Supplier shall be solely responsible for all aspects of the business of manufacturing, advertising, marketing, distributing and selling the Products other than Distributor's Distribution of the Products and performance of its obligations as set forth in this Agreement and Addendum No. 1 hereto.

G.           Supplier represents warrants, covenants and agrees that all Products at the time and place of delivery to Distributor (i) shall be fit for the purpose intended, merchantable, and free from all defects; (ii) shall comply in all material respects with all Applicable Laws (as defined in Paragraph 7C) relating to Product quality, labeling, identity, quantity, packaging or any other matter applicable to Product sold hereunder, including returnable container or deposit laws; and (iii) shall not be adulterated or misbranded within the meaning of those terms under the Federal Food, Drug and Cosmetic Act, as amended, or any other Applicable Laws.

H.           Supplier shall not, directly or indirectly, and shall not authorize, permit or grant any rights to any Person other than Distributor to, during the term of this Agreement: (i) Distribute any of the Products or any products similar to the Products via any of the Channel in the Territory without the prior written consent of Distributor (except as otherwise provided in Paragraph 3B); or (ii) otherwise enter into any agreement which would conflict with or contravene the rights granted to Distributor under this Agreement.  In the event that Supplier breaches subpart (i) of this Paragraph 4H, in addition to Distributor's right to terminate this Agreement in accordance with Paragraph 9 and any other remedies available to Distributor as a result of such breach, Supplier shall to pay Distributor a fee equal to one Dollar and fifty cents  ($1.50) per unit (i.e., case) of Product (or any products similar to the Product) which Supplier Distributes, or authorizes any Person other than Distributor to Distribute, via any of the Channel in the Territory.

5.           PRICE

Sales of the Products by Supplier to Distributor shall be at such prices as set forth on Schedule A attached hereto, which may be changed by Supplier on an annual basis during the term of this Agreement upon thirty (30) days’ prior written notice to Distributor. In addition, in the event of an increase in Supplier's cost of manufacturing a Product, Supplier shall have the right to pass such costs through to Distributor by increasing the Purchase Price for any Product upon not less than thirty (30) calendar days’ prior written notice to Distributor and delivering to Distributor an updated Schedule A to reflect such price adjustment; provided that such cost-driven increases to the Purchase Price for any Product may not exceed three percent (3%) in any calendar year unless Supplier provides Distributor with reasonable evidence of such increased costs.  Supplier may also make other periodic non-cost driven price increases with the prior written consent of Distributor.  Supplier may elect to offer decreased Purchase Prices or other discounted or promotional terms for Distributor's purchase of any Product from time to time at its sole discretion.

 

 

  

4

  

6.           TERMS OF PAYMENT

A.           Supplier shall submit invoices to Distributor for Products purchased hereunder.  Distributor's payment for the Products purchased shall be 2% 10, net ninety (90) days calculated from the date that the Products have been received by Distributor and specified in an invoice for first three (3) months of purchases.  Distributor's payment for the Products purchased shall be 2% 10, net sixty (60) days calculated from the date that the Products have been received by Distributor and specified in an invoice after first three (3) months of purchases until first twelve (12) months of purchases.  Thereafter Distributor's payment for the Products purchased shall be 2% 10, net forty five (45) days calculated from the date that the Products have been received by Distributor and specified in an invoice.

B.           Distributor shall purchase the Products in its own name and for its own account from Supplier.  Supplier shall deliver each shipment of Products to Distributor FOB Distributor’s warehouse (or such other delivery location as may be designated by Distributor from time to time).

7.           PRODUCT DISTRIBUTION

A.   Distributor shall at all times use its commercially reasonable efforts to market, promote and expand the sale of Products via the Channel in the Territory.

B.           Distributor shall submit to Supplier monthly sales and inventory data within seven (7) business days following the end of such month.

C.   Distributor shall (i) store, handle and distribute its inventory of Products in clean and sanitary conditions as required to maintain Product quality and in accordance with Supplier's and any applicable manufacturers’ reasonable specifications; (ii) not alter the Products in any manner; and (iii) comply with all applicable international, federal, state and local food, health and other applicable laws, rules, regulations, standards and orders (collectively, “Applicable Laws”) in connection with the storage and Distribution of the Products; provided, however, that Supplier shall be solely responsible for complying with all Applicable Laws with regard to the composition, makeup, development, manufacture, supply, advertising and marketing of the Products (including, without limitation, any labels affixed to the Products and the content of any advertising or marketing materials relating to the Products which are provided to Distributor by Supplier) and Supplier's license, distribution and sale of the Products to Persons other than Distributor.

 

 

  

5

  

D.   If Supplier or a governmental authority notifies Distributor of a Recall/Withdrawal Event, Distributor agrees that it shall fully cooperate with Supplier and take all necessary actions reasonably requested by Supplier in connection with a market withdrawal or recall of any Recalled Products or Withdrawn Products, including but not limited to, a notification to accounts and retrieval of Recalled Products or Withdrawn Products from accounts, at Supplier's sole expense.  In the event of a Recall/Withdrawal Event, Supplier shall repurchase from Distributor, at a purchase price equal to (i) the full purchase price initially paid by Distributor to Supplier for such Recalled Products or Withdrawn Products; plus (ii) if Distributor refunds any money to its accounts in buying back unsold Recalled Product or Withdrawn Product, the difference between: (A) the amount of the refund and (B) Distributor's original purchase price paid for the unsold Recalled Product or Withdrawn Product based on the original purchase order; plus (iii) Distributor's documented freight, delivery and insurance expenses to return Recalled Product and Withdrawn Product to Supplier's designated location.

E.           Distributor shall grant Supplier or its Representatives (as defined below) access during normal business hours on twenty-four (24) hours notice: (i) to inspect Distributor's facilities, inventory of Products and transport fleet and to review compliance with health and safety requirements.

8.           MARKETING PLAN; LIMITED LICENSE TO TRADEMARKS

A.           Simultaneously with the execution hereof, and thereafter not later than June 15th and December 15th, respectively, of each year during the term of this Agreement (or more frequently as agreed by the parties), Supplier shall deliver to Distributor a reasonably detailed Product sales and marketing plan for the following six (6) months, which shall include, without limitation, proposed marketing budgets and plans (including proposed Product spokespersons, participation in trade events, etc.) and sales forecasts (the “Marketing Plan”).  Not later than July 15th and January 1st of each year during the term of this Agreement, Supplier shall deliver to Distributor a reasonably detailed report of the results of Supplier's Product sales and marketing activities for the prior six (6) month period, which shall identify all sales and marketing projections that were established for such period and a reasonably detailed explanation of whether such projections were satisfied or achieved.

B.           Supplier may provide to Distributor, at Supplier's cost, any point-of-sale or display equipment for use in marketing or displaying Products at accounts to whom Distributor sells the Products which Supplier typically provides to other distributors of the Products or which Distributor otherwise reasonably requests to support the Distribution of the Products (collectively, “Display Equipment”).  Supplier shall retain ownership of all items of Display Equipment that Supplier permits Distributor or its accounts to use.  Distributor shall use, and shall use its commercially reasonable efforts to cause its accounts to use, Display Equipment only to store and display Product, and shall not use, and shall use its commercially reasonable efforts to cause its accounts not to use, Display Equipment to store or display any other item or for any other purpose.  Supplier may change the features of Display Equipment or add or delete specific models of Display Equipment at any time upon thirty (30) days prior written notice to Distributor.  Supplier may change the instructions for using Display Equipment or the Marks (as defined below) required to appear on Display Equipment at any time effective upon thirty (30) days prior written notice to Distributor. Distributor shall comply with all requirements and modifications at Supplier's sole cost and expense and cease using any discontinued models of Display Equipment in accordance with Supplier's instructions and shall return to Supplier, at Supplier's sole cost and expense, any such discontinued models of Display Equipment as promptly as practicable following Supplier's written request therefor.

 

 

  

6

  

C.           Supplier hereby grants to Distributor the limited, non-exclusive, non-sub licensable license during the term of this Agreement to use within the Territory (i) the name of Supplier and (ii) the trademarks, service marks or any other intellectual property of Supplier or any of its affiliates relating to the Products, including, without limitation, the intellectual property set forth on Schedule C attached hereto and incorporated herein (collectively, the “Marks”).  Distributor acknowledges that the Marks are owned by Supplier, that Distributor has no right or title therein and that all goodwill in the Marks belongs and shall accrue solely to Supplier.  Distributor shall (i) use the Marks only to the extent required to fulfill Distributor's obligations under this Agreement; (ii) use the Marks in accordance with Supplier's policies and directions; and (iii) not, directly or indirectly, challenge the validity of or Supplier's rights in and to the Marks.  Distributor shall promptly inform Supplier in writing if Distributor becomes aware of any facts indicating that any Person is infringing any of the Marks.

9.           TERMINATION

A.          This Agreement may be terminated upon the mutual written agreement of the parties hereto.

 

B.   This Agreement may be terminated by either party (i) upon thirty (30) days' prior written notice to the other party upon the material breach by the other party of any of its covenants, agreements, representations or warranties set forth in this Agreement, unless, if such breach is capable of being cured, such breach is cured within such thirty (30) day notice period, or, if such breach is capable of being cured but is of a nature that cannot be cured within such period, the breaching party has commenced substantial efforts to cure within such period, and the breach is actually cured within sixty (60) days following written notice of breach.

C.   Distributor may terminate this Agreement without cause at any time by providing Supplier with sixty (60) days prior written notice.

D.          From and after the one (1) year anniversary of the Effective Date, Supplier may terminate this Agreement without cause at any time by providing Distributor with sixty (60) days prior written notice and paying the “Termination Fee” (as defined below) on the effective date of termination (such termination shall not be effective until the Termination Fee has been paid).  The “Termination Fee” shall mean an amount equal to the “Gross Profit” (as defined below) earned by Distributor for the sale of Products during the twelve (12) full calendar months immediately preceding the effective date of termination (the “Determination Period”).  For purposes of this Agreement, “Gross Profits” means Distributor's revenues from the sale of the Products during the Determination Period less the net invoice price paid by Distributor to Supplier.  “Net invoice” means Supplier's total invoice price for all Products sold to Distributor less any allowances or bill backs paid or owed to Distributor (e.g. discounts, off invoice allowances, rebates and price reductions, and Supplier promotional activities in which Distributor has agreed to participate).  The parties recognize and agree that it would be extremely difficult to ascertain the actual economic effects, if any, that a termination by Supplier under this Paragraph 9D could have on Distributor, as such effects would encompass Distributor's loss of future profits and the fair market value of Distributor's business of the Distribution of the Products.  Supplier acknowledges and agrees that the amount of the Termination Fee is fair and represents a good faith estimate of possible damages to Distributor for Supplier's termination of this Agreement without cause, and the payment of the Termination Fee is not intended as a forfeiture or penalty within the meaning of California Civil Code sections 3275 or 3369 but is intended to constitute liquidated damages to Distributor to approximately compensate Distributor for the early termination of this Agreement.

 

 

  

7

  

Supplier INITIALS _______                                                      Distributor INITIALS _______

In the event that Supplier assigns this Agreement or any of Supplier's rights or obligations hereunder to any third party, Supplier shall remain liable for the payment of any Termination Fee pursuant this Paragraph 9D in the event such third party fails to pay such Termination Fees upon a subsequent termination hereof pursuant to this Paragraph 9D.

E.           This Agreement may be terminated immediately by either party upon written notice to the other party upon (a) the discontinuance, dissolution, liquidation and/or winding up of the other party’s business or (b) the making, by the other party, of any general assignment or arrangement for the benefit of creditors; the filing by or against the other party of a petition to have it adjudged bankrupt under bankruptcy or insolvency laws, unless such petition shall be dismissed or discharged within sixty (60) days; the appointment of a trustee or receiver to take possession of all or substantially all of such party’s assets, where possession is not restored to the appropriate party within thirty (30) days; or the attachment, execution or judicial seizure of all or substantially all of the other party’s assets where attachment, execution or judicial seizure is not discharged within thirty (30) days.

F.           Upon the termination of this Agreement for any reason:

(a)           At Distributor's election, (i) cause Supplier to repurchase from Distributor within fifteen (15) days of the effective date of the termination of this Agreement, at Distributor's actual landed cost (calculated on a FIFO basis) plus a reasonable handling fee, all saleable Products and promotional items held by Distributor as of the effective date of termination or (ii) "sell-off' all Products and promotional items held by Distributor as of the effective date of termination via the Channel in the Territory for a three (3) month period following the termination of this Agreement, at the end of which Supplier shall be required to repurchase from Distributor, at Distributor's actual landed cost (calculated on a FIFO basis) plus a reasonable handling fee, all saleable Products and promotional items then held by Distributor.  Such Products(s) shall be delivered to Supplier at a location designated by Supplier (which location must be within Fifty (50) miles of Distributor’s warehouse) or, at Supplier's option upon written notice to Distributor prior to the effective date of termination, Supplier may elect to pick up all such Products at Distributor's warehouse not later than fourteen (14) days following the effective date of termination or the expiration of the "sell-off" period, as the case may be.

(b)           All rights granted to Distributor under this Agreement shall terminate and all such rights shall revert back to Supplier.

 

 

  

8

  

(c)           Distributor shall (i) return to Supplier or destroy, at Supplier's cost and expense (with a certificate of destruction to Supplier, if Supplier so requests), any and all Confidential Information of Supplier in its possession or control, (ii) remove any Product branding or other references to the Products or intellectual property relating thereto from any Branded Vehicles (as defined in the Addendum No. 1 hereto) which Distributor then owns or leases, and (iii) return to Supplier, at Supplier's cost and expense, any Display Equipment in its possession or control, or use its commercially reasonable efforts to cause any Display Equipment in the possession or control of Distributor's accounts to be returned to Supplier.

(d)           Distributor shall submit a final accounting report to Supplier showing all Monthly Payment Amounts (as defined in the Addendum No. 1 hereto), termination payments, or other amounts owed by Supplier to Distributor hereunder as of the effective date of termination, which amounts shall be paid by Supplier to Distributor not later than thirty (30) days following Distributor's delivery of such report, subject to offset for any amounts then owing by Distributor to Supplier for any invoices delivered by Supplier hereunder.

G.           Except as provided in Paragraph 9D of this Agreement with respect to the Termination Fee, neither party shall be liable to the other party as a result of termination of this Agreement; provided that termination in accordance with this Agreement shall be without prejudice to any of the rights or liabilities of either party accrued as of the date of termination.

H.           Paragraphs 8C, 9, 10, 11, 13, 14, 16, 17, 18, and 20 shall survive the termination of this Agreement.

 

 

  

9

  

10.           INDEMNIFICATION; INSURANCE

A.           Except as provided in Paragraph 10B below, Supplier shall defend, indemnify and hold Distributor and its Affiliates and its and their respective shareholders, members, managers, directors, officers, agents, employees, and representatives, as the case may be (collectively, “Representatives”), harmless from and against all claims, suits, demands, actions, costs, liabilities, damages, fines, fees, penalties, losses and expenses of any kind whatsoever, including but not limited to, injury to person (including death) or property, including reasonable attorneys fees and other experts or other reasonable expenses of litigation or other actions (collectively, “Losses”), arising out of, resulting from or in any way connected with any allegation of:

	
(i)  

	
any product liability claim or claim for harm, injury, damage or loss arising out of or in connection with consumer use or consumption of the Products;

	
(ii)  

	
the defective manufacture, bottling or packaging of the Products;

	
(iii)  

	
any negligent act, misfeasance or nonfeasance by Supplier;

	
(iv)  

	
any misleading claim, advertising or representation made by Supplier or by any authorized agent or representative of Supplier regarding the Products or any other claims or actions arising out of the failure by Supplier to comply with any Applicable Laws relating to the development, manufacturing, advertising, marketing, labeling, distribution or sale of the Products;

	
(v)  

	
any actual or alleged infringement by the Products or any intellectual property rights relating thereto, or any advertising materials with respect thereto provided by Supplier, of any intellectual property rights of any third parties or misappropriation of any trade secrets of any third parties;

	
(vi)  

	
a Recall/Withdrawal Event; or

	
(vii)  

	
Supplier's breach of any representations, warranties, covenants or agreements contained in this Agreement, unless the Loss arises from the wrongdoing or negligence of Distributor or any of its Representatives.

B.           Except as provided by Paragraph 10A above, Distributor shall defend, indemnify and hold Supplier and its Affiliates, and its and their Representatives harmless from and against all Losses arising out of, resulting from or in any way connected with (i) Distributor's breach of any representations, warranties, covenants or agreements contained in this Agreement, unless the Loss arises from the wrongdoing or negligence of Supplier or any of its Representatives, or (ii) any negligent act, misfeasance or nonfeasance by Distributor.

C.           Any party seeking indemnity under this Paragraph 10 (the “Indemnified Party”) shall notify the other party (the “Indemnifying Party”) of such claim as soon as practicable after the Indemnified Party first obtains knowledge of such claim (provided that failure to give such notice shall not affect the Indemnifying Party's obligations except to the extent it can show actual prejudice).  The Indemnifying Party will defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such action and all related proceedings, which proceedings will be diligently defended or prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages; which admits guilt, liability or culpability on the part of the Indemnified Party; or which could be reasonably expected to have an adverse impact on the Indemnified Party’s business operations or reputation).  The Indemnifying Party will have control of such defense and proceedings, including any compromise or settlement thereof (subject to the preceding sentence), provided, however, that if (i) the Indemnifying Party fails to diligently defend, prosecute or settle any action (subject to the Indemnified Party’s approval as provided above), (ii) the claim for indemnification relates to or arises in connection with any criminal or quasi-criminal proceeding, action, indictment, allegation or investigation involving an Indemnified Party, (iii) the action seeks an injunction or equitable relief against the Indemnified Party or (iv) the Indemnified Party has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnifying Party and the Indemnified Party, then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the action by all appropriate proceedings, which proceedings will be defended or prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party which shall not be unreasonably withheld); provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any action which the Indemnified Party is contesting.  In any action the defense of which the Indemnifying Party shall assume, the Indemnified Party shall have the right to participate in (but not control) the defense and resolution of such action and to retain its own counsel at such Indemnified Party’s own expense, so long as such participation does not interfere with the Indemnifying Party’s control of such litigation.

 

 

  

10

  

D.            During the Term of this Agreement and for a period of two (2) years thereafter, each party shall procure, within thirty (30) days of the Effective Date, and maintain, at its sole cost and expense, in full force and effect its own:

 

(a)           Comprehensive general business liability insurance policy, consistent with commercial practices or standards for similar industries, insuring against any and all loss, liability or business interruption arising from the obligations and activities of that party hereunder including, without limitation, those arising from, product liability, personal injury, wrongful death or property damage and contractual liability with respect to the indemnity obligations set forth in this Paragraph 10.  The coverage amount of such insurance policy shall not be less than Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00)  in the aggregate.

 

(b)           Errors and Omissions/Professional Liability with a limit of not less than Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00)  in the aggregate.

 

(c)           Worker's compensation insurance in amounts as may be required by Applicable Laws.

 

E.   The insurance companies providing such insurance required under Paragraph 10D must have an A.M. Best rating of A-VII or better and be licensed or authorized to conduct business in all fifty (50) of the United States.  The policies shall contain a waiver of subrogation with respect to the Indemnifying Party and each policy shall contain all appropriate riders and endorsements based on the nature of any Product manufactured or sold hereunder and its intended use.  Each party shall name the other party as an “additional insured” on all required insurance policies and shall provide the other party with originals or copies of certificates of insurance so reflecting.  Such insurance shall also provide that the other party shall be notified in writing by the insurance carrier of any change or modification in the policy (including termination) not less than thirty (30) days prior to the effective date of such change (including termination).

 

 

  

11

  

11.           GOVERNING LAW; DISPUTE RESOLUTION

A.           This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to any principles or rules regarding conflicts of laws (either of the State of California or any other jurisdiction) that would cause the application of the law of any other jurisdiction other than the State of California.

B.           In the event of any dispute or controversy arising out of or in any way related to this Agreement, the matters referred to herein, or the Products to be supplied by Supplier pursuant to this Agreement (each, a “Dispute”), the parties will attempt in good faith to resolve through negotiation such Dispute.  Either party may initiate negotiations of any Dispute by providing written notice to the other party, setting forth the subject of the Dispute.  The recipient of such notice will respond in writing within ten (10) calendar days with a statement of its position on and recommended solution to the Dispute.  If the Dispute is not resolved by this exchange of correspondence, then representatives of each party with full settlement authority will meet at a mutually agreeable time and place within thirty (30) calendar days of the date of the initial notice in order to exchange relevant information and perspectives, and to attempt to resolve the Dispute.

C.             If the Dispute is not resolved by these negotiations, such Dispute shall be settled exclusively by final and binding arbitration in Los Angeles, California in accordance with the then current rules of the American Arbitration Association (“AAA”).  The parties agree that any and all Disputes that are submitted to arbitration in accordance with this Agreement shall be decided by one (1) neutral arbitrator who is a retired judge or attorney licensed to practice law in California with at least fifteen (15) years of experience in complex commercial transactions.  If the parties are unable to agree on an arbitrator, AAA shall designate the arbitrator.  The parties will cooperate with AAA and with one another in selecting the arbitrator and in scheduling the arbitration proceedings in accordance with applicable AAA procedures.  All arbitration proceedings shall be confidential.  Neither party shall disclose any information about the evidence produced by the other party in the arbitration proceedings, except in the course of judicial, regulatory, or arbitration proceeding, or as may be demanded by government authority.  Before making any disclosure permitted by the preceding sentence, a party shall give the other party reasonable advance written notice of the intended disclosure and an opportunity to prevent disclosure.  Any award issued as a result of such arbitration shall be final and binding between the parties thereto and shall be enforceable by any court having jurisdiction over the party against whom enforcement is sought.  By entering into this Agreement, the parties are waiving their constitutional right to have any Disputes decided in a court of law or before a jury and waive the right of appeal, and instead of relying on said rights, each party is solely and knowingly accepting the use of arbitration as a means of resolution of any Disputes.  The prevailing party in such arbitration shall be awarded its costs and reasonable attorneys’ fees.  The parties agree that this clause has been included to rapidly and inexpensively resolve any disputes between them with respect to this Agreement, and that this clause shall be grounds for dismissal of any court action commenced by with respect to this Agreement, other than post-arbitration actions seeking to enforce an arbitration award and actions seeking equitable, injunctive or other similar relief in accordance with Paragraph 11D hereof, which shall be resolved exclusively in the state or federal courts sitting in the County of Los Angeles.

 

 

  

12

  

D.           Each party agrees that a breach of its obligations under Paragraph 14 will result in irreparable harm to the other party and, in the event of such breach, or threatened breach, the breaching party agrees that the other party will have available the right to preliminary and permanent injunctive relief and other equitable relief issued by any court of competent jurisdiction to prevent or curtail any such breach, or threatened breach, and to specific performance of any covenant contained herein, in each case without the proof of actual damage or any bond or similar security being posted, in order that the breach, or threatened breach, of such provisions may be effectively restrained.  The parties agree that this remedy shall be in addition to all other remedies set forth in the Agreement or as set forth herein. The parties further agrees that they will not assert as a claim or defense in any action or proceeding to enforce any provision hereof that the other party has or had an adequate remedy at law.

12.           FORCE MAJEURE

To the extent that the performance by Supplier or Distributor of any of its obligations is prevented due to unforeseeable circumstances beyond the control of that party, including but not limited to, any act of God, new law, regulation or ordinance, war or war conditions, or failure of transport or supply then such performance (except for the payment of money) shall be excused and this Agreement shall be deemed suspended during the continuation of such circumstances provided such party continues to attempt to recommence performance or observance to the greatest extent possible without delay.

13.          INDEPENDENT RELATIONSHIP

Distributor and Supplier understand and agree that each is an independent principal and not an agent, employee, partner, joint venturer, or franchiser or franchisee of the other in the performance of this Agreement, and that each party retains the right to conduct its business as it shall determine, including without limitation the manner in which it shall fulfill its obligations under this Agreement.  Neither party, nor its agents, shall in any way act, or undertake to act, on behalf of, or hold itself out as, the agent of the other party without the express prior written consent of such other party.  The parties will each be responsible for the payment of their respective compensation, wages, taxes, dues, employment benefits and other operating expenses in connection with the separate operations of their respective businesses and companies.

 

 

  

13

  

14.           CONFIDENTIAL INFORMATION

A.           Supplier and Distributor shall keep confidential, during the duration of this Agreement and for five (5) years thereafter, all confidential and non-public proprietary information of the other or relating to the other’s business, products, marketing efforts, financial data, information regarding info the Products and other company information which may be deemed a trade secret or is sensitive in nature and not otherwise known to the public (“Confidential Information”).

B.           Each party agrees (i) to keep all Confidential Information of the other party confidential and not to disclose or reveal any Confidential Information to any other Person except (A) to such of its pre-approved Representatives of such party who have a need to know such Confidential Information in connection with Distributor's Distribution of the Products in accordance with the terms and conditions hereof and have been advised of the confidential nature of such Confidential Information and such party's obligations hereunder in respect thereof, (B) to any governmental, regulatory or administrative agency, authority, board or body having jurisdiction over the recipient where such disclosure is required in accordance with Applicable Laws, or (C) to any other Person pursuant to subpoena or the process, whether legal, administrative or other (and the disclosing party agrees to provide the other party with prompt notice of any such subpoena or other similar notice); and (ii) not to use such Confidential Information for any purpose other than in connection with the Distribution of the Products in accordance with the terms and conditions hereof.

C.           If either party is requested pursuant to, or required by, legal process to disclose any Confidential Information to any third party then such party agrees to provide the other party with prompt notice of such request(s) to enable the other party to seek an appropriate protective order.

D.           Confidential  Information shall not include information of a party that (i) is or becomes generally available to the public other than as a result of a disclosure to the other party or its representatives, (ii) was available to the other party on a non-confidential and lawful basis prior to its disclosure by the disclosing party, or (iii) becomes available to the other party on a non-confidential and lawful basis from a Person who is not otherwise bound by a confidentiality agreement with respect to such information, or is not otherwise prohibited from transmitting such information to such party.

E.           Each party understands and agrees that no license or other right is granted under this Agreement to any aspect of Confidential Information of the other party; or, other than as set forth in Paragraph 8C, to or under any existing or future patent, trademark, trade secret, or other intellectual property or tangible property and that no rights are granted other than for the limited purpose contemplated by this Agreement.

 

 

14

 

15.  WAIVER

The failure of any party, in any one or more instances, to insist upon full performance of any of the terms, covenants and conditions of this Agreement or to exercise any right to terminate this Agreement shall not be deemed a waiver of such provisions or right.

16.  ENTIRE AGREEMENT AND MODIFICATIONS

A.           This Agreement together with its Schedules and Addenda hereto collectively contain the entire understanding of the parties relating to the subject matter hereof and supersedes, revokes and cancels, without any other consideration being due, any and all other inducements, arrangements, understandings, agreements, representations and warranties, whether oral or written, between the parties hereto or their predecessors, relating to the subject matter of this Agreement.

B.   The parties agree that this Agreement may be modified or amended only by a written agreement signed by authorized officers of both parties.

17.  HEADINGS

Paragraph headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any purpose.

 

18.  SEVERABILITY

 

Should any provision of this Agreement be illegal, invalid or unenforceable, all other terms and conditions of this Agreement shall remain in full force and effect.

 

19.  REPRESENTATIONS AND WARRANTIES

 

 

A.           Each party represents and warrants to the other party that it has the complete right, power and authority to enter into this Agreement and the ability, power, and authority to perform all of its obligations hereunder, and this Agreement constitutes a valid and legally binding obligation of such party, enforceable against such party in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors' rights generally.

 

B.           Distributor represents and warrants to Supplier that:

 

(a)           no consent or approval is required by any Person for Distributor to enter into this Agreement or for Distributor to exercise the rights granted hereunder;

 

(b)           there are no pending or threatened actions, suits or claims against Distributor or any of it Affiliates that would impair Distributor's ability to enter into this Agreement; and

 

 

  

15

  

 

 

(c)           Distributor is now in compliance in all material respects with all Applicable Laws relating to its business and the marketing, sale and distribution of beverages.

 

C.           Supplier represents and warrants to Distributor the following:

 

(a)           no consent or approval is required by any third party for Supplier to enter into this Agreement or for Supplier to grant the rights granted hereunder;

 

(b)           there are no pending or threatened actions, suits or claims against Supplier or any of Supplier’s Affiliates (i) relating to the Products or (ii) that would impair Supplier's ability to enter into this Agreement;

 

(c)           Supplier has not entered into any contract with any third party which would impair the rights granted to Distributor under this Agreement, or limit the effectiveness of this Agreement, nor is it aware of any claims or actions which may limit or impair any of the rights granted to Distributor hereunder;

 

(d)           all intellectual property rights, materials and work product relating to the Products are owned by, and/or exclusively licensed to Supplier and, to Supplier’s knowledge, do not infringe or violate any copyrights, trademarks, trade secrets, patents or other proprietary rights of any kind belonging to any third party or violate any right of privacy, right to publicity, misappropriate anyone’s name or likeness or contain any defamatory, obscene or illegal material; and

 

 (e)           Supplier is now in compliance in all material respects with all Applicable Laws relating to its business and the development, manufacturing, advertising, marketing, sale and distribution of the Products.

 

20.  NOTICES

 

Whenever notice is required to be given under the terms of this Agreement to either party, it shall be given to the other party by personal delivery, or by registered or certified mail, return receipt requested or by overnight courier or by facsimile confirmed by first class mail and machine confirmation at the addresses and/or facsimile numbers designated below.

If to Supplier, addressed as follows:

Level 5 Beverage Company

800 Bering Drive, #201

Houston, Texas 77057

Attn: V. Scott Vanis

Phone: 888-473-5150

 

 

  

16

  

          If to Distributor, addressed as follows:

Drink King Distributing Company Inc

120 Fieldcrest Ave

Edison, NJ 08837

Attn: Peter Strahm

or to such other or further address as either party may specify to the other, by notice in accordance with the provisions of this Paragraph 20.

Any notice that is delivered (i) personally will be deemed given only when acknowledged in writing by the Person to whom it is delivered, (ii) by registered or certified mail will be deemed given on the date of certification or registry thereof, (iii) by facsimile will be deemed given upon receipt of written confirmation of receipt of the facsimile or (iv) by overnight carrier will be deemed given upon written confirmation of receipt.

21.  EXECUTION.

 

This Agreement may be executed in one or more counterparts, including by facsimile transmission, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.

 

[signatures on following page]

 

 

  

17

  

 

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

Supplier:

LEVEL 5 BEVERAGE COMPANY, INC.

 

By: /s/ V. Scott Vanis                                 

Name: V. Scott Vanis

Title: CEO

Distributor:

DRINK KING DISTRIBUTION COMPANY, INC.

 

By: /s/ Peter Strahm                                      

Name: Peter Strahm

Title: CEO

 

 

  

18

  

 

SCHEDULE “A”

PRODUCTS

 

[Products and product pricing to be inserted].

 

	
Product

	
Purchase Price

	
VITAMINFIZZ (all flavors)

	
$7 – 10 /12 count case -17oz PET*

	
COFFEE BOOST

	
$12 – 14 per Case*

	  	  

  

19

  

 

 

SCHEDULE “B”

TERRITORY

Brooklyn (Kings County)

Staten Island (Richmond County)

Queens (Queens County)

Bronx (Bronx County)

Manhattan (New York County)

Long Island (Suffolk and Nassau Counties)

Westchester County

Rockland County

  

20

 

SCHEDULE “C”

SUPPLIER MARKS

 

 

 

VITAMINFIZZ®

 

 

 

  

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}]]