Document:

Exhibit 10.2

Execution
copy

 

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

 

MONSTER ENERGY

INTERNATIONAL DISTRIBUTION COORDINATION AGREEMENT

 

This MONSTER
ENERGY INTERNATIONAL DISTRIBUTION COORDINATION AGREEMENT (this “Agreement”) is
entered into as of October 3, 2008 (the “Effective Date”), between
TAURANGA LTD., a company organized and existing under the laws of the Republic
of Ireland, trading as MONSTER ENERGY (“MEL”), and THE COCA-COLA COMPANY, a
Delaware corporation (“KO”).  Capitalized
terms not otherwise defined in this Agreement shall have the meaning defined in
Section 2 below.

 

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

 

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

 

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

 

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

 

1.4.          Subject to the terms of this Agreement,
MEL desires to enter into Distribution Agreements (as defined below) for the
specific territories with certain KO Distributors for the distribution and sale
of the Products (as defined below) in the Territory (as defined below) and KO
is willing to assist with those efforts.

 

2.             Definitions. 
For the purposes of this Agreement, the following additional definitions
shall apply:

 

“Accepted
Distributor/s” shall have the meaning provided in Section 4.4 of this
Agreement.

 

“Energy Drinks”
means any ***.

 

	
   ***

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

  

 

 

“Distribution
Agreement” means one of the distribution agreements substantially in the form
attached as Exhibits A, A1 and A2 to be entered into between MEL and/or
Hansen, on the one hand, and a KO Distributor for a specific territory in the
Territory, on the other hand.

 

“Hansen Marks”
means the trademarks, trade names, brand names, and logos (whether or not
registered), copyright material and other intellectual property owned by Hansen
and used by it on the Products and/or in connection with the production,
labeling, packaging, marketing, sale, advertising, and promotion of the
Products.

 

“KO/MEL
Distributor/s” means each Accepted Distributor with whom MEL or Hansen enters
into a Distribution Agreement, but only during the period in which a KO Bottler
Agreement is in effect between KO and such KO/MEL Distributor.

 

“Products”
collectively mean (a) each of the products on Exhibit C, (b) all
other shelf-stable, non-alcoholic, Energy Drinks in ready to drink form that
are packaged and/or marketed by Hansen at any time after the Effective Date
under the primary brand name “Monster,” or other primary brand name including “Monster”
as a derivative or part of such brand name – and which may be, but are not
required, to contain the “” mark
and/or the “M” icon that Hansen distributors from time to time through its
national network of full service distributors such as, without limitation, the
KO Distributors, Anheuser-Busch, Inc. distributors, and Coke/Pepsi/Dr. Pepper
7UP Bottlers, and (c) such additional Energy Drinks, whether marketed
under the Hansen Marks or otherwise, as Hansen and KO shall agree to from time
to time by executing an amended Exhibit C.  “Products” shall also include all sizes of
SKU’s including, without limitation, 3 oz., 8 oz., 15 oz., 16 oz., 16.9 oz.,
23.5 oz., 24 oz. and 32 oz. SKU’s.

 

“Proposed
Distributor/s” means the KO Distributor identified by KO to enter into a
Distribution Agreement pursuant to Section 4.2 of this Agreement.

 

“Territory”
means the countries, regions or geographical areas described on attached Exhibit B,
as may be amended from time to time.

 

3.             Agreement.  KO
shall use its commercially reasonable efforts to (a) facilitate and assist
MEL in its evaluation of Proposed Distributors as contemplated under Section 4.3
below, (b) recommend to, encourage, facilitate, approve, and assist all
Accepted Distributors in the Territory to enter into Distribution Agreements
with MEL for the Products for such parts of the Territory as may be designated
by MEL and agreed to between MEL and such KO Distributors in accordance with
the procedures set forth in Section 4 below, and (c) generally
facilitate, consent to and assist the on-going relationship between MEL and the
KO Distributors contemplated by this Agreement. Such efforts shall not obligate
KO to expend funds or extend other economic incentives to convince KO
Distributors to enter into Distribution Agreements with MEL; it being understood
by MEL that KO does not control KO Distributors, who will independently
negotiate distribution agreements directly with MEL.

 

4.             Procedures for Appointment of
Distributors.

 

4.1.          CCE Distribution Agreements. 
Concurrently with the execution of this Agreement, Hansen and Coca-Cola
Enterprises, Inc., a Delaware corporation (“CCE”) shall execute
Distribution Agreements in substantially the form of Exhibits A and A1
(collectively the “CCE-UK Distribution Agreements”).

 

4.2.          Subsequent Designation and Identification. 
The provisions of Sections 4.2 through 4.5 shall apply to all
Distributors other than CCE.

 

4.2.1.       At any time that MEL desires to have KO
Distributors distribute Products in any additional territory/ies in the
Territory, MEL will deliver written notice (the “Designation Notice”) to KO 

 

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designating the specific territory/ies in which
MEL desires KO Distributors to distribute the Products.  Within thirty (30) days of its receipt of the
Designation Notice, KO will deliver written notice (the “Identification Notice”)
to MEL either (i) identifying the specific KO Distributors (the “Proposed
Distributors”) to be appointed to distribute the Products in the respective
territory/ies identified in the Designation Notice and any additional relevant
information concerning such KO Distributors or the territory covered by them
(provided that KO shall not be required to deliver information that KO is
contractually obligated to keep confidential pursuant to any written agreement
with a Proposed Distributor); or (ii) informing MEL that it is not
interested in appointing a KO Distributor in the relevant territory/ies.  *** Nothing contained in this Section 4.2.1
shall be construed as granting to KO any express or implied option, right of
first refusal, or similar right with regard to future distributors or other
agreements.

 

4.2.2.       The provisions of this Section 4.2.2  are set forth on attached Exhibit D
and are incorporated in this Section 4.2.2 by this reference.

 

4.3.          Due Diligence Period. 
During the twenty-eight (28) day period immediately following MEL’s
receipt of the Identification Notice (the “Diligence Period”), MEL will be
entitled to conduct due diligence on the Proposed Distributors.  KO will provide MEL with such reasonable
information as may be in KO’s possession regarding such Proposed Distributors
that MEL reasonably requests in connection with the investigation; provided,
however, that KO shall not be required to deliver information that KO is contractually
obligated to keep confidential pursuant to any written agreement with a
Proposed Distributor or that KO in good faith believes must remain confidential
due to legal reasons or due to its status as a shareholder in such Proposed
Distributor.  MEL will also be free to
contact such Proposed Distributors directly to request any additional
information MEL reasonably believes is needed to conduct the
investigation.  At anytime during the
Diligence Period MEL may, in its sole and absolute discretion, accept or reject
any Proposed Distributor; provided, however, if MEL fails to reject any
Proposed Distributor during the Diligence Period, MEL will be deemed to have
accepted such Proposed Distributor.

 

4.4.          Acceptance.  If MEL
accepts, or is deemed to accept, the applicable Proposed Distributor described
in the Identification Notice, MEL will, within fourteen (14) days of the
expiration of the Diligence Period, deliver to the Proposed Distributor a
Distribution Agreement for each Proposed Distributor accepted by MEL (each, an “Accepted
Distributor”), subject to modification as agreed upon by MEL and the Proposed
Distributor.  The Proposed Distributor
will promptly return to MEL copies of the Distribution Agreements executed by
the Accepted Distributors who have agreed to enter into a Distribution
Agreement with MEL.  Within seven (7) days
of receipt of any Distribution Agreement executed by an Accepted Distributor,
MEL will deliver the Distribution Agreement executed by MEL to such Accepted
Distributor with a copy to KO.

 

4.5.          Rejection by Distributor. 
If any Accepted Distributor fails to return a valid Distribution
Agreement duly executed by such distributor within twenty (20) days  of delivery of the Distribution Agreement to such Accepted
Distributor or such Accepted Distributor otherwise declines to enter into a
Distribution Agreement with MEL, MEL may, in its sole and absolute discretion (a)
eliminate the applicable

 

	
  ***

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

  

 

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territory from Exhibit D to the extent
included therein, and (b) enter into an agreement with another person or
entity to distribute the Products in the territory originally designated for
such Accepted Distributor.

 

4.6.          Performance.

 

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

 

4.6.2.       During the Term, KO shall:

 

a.             Work with and assist MEL where possible
in obtaining (at MEL’s expense) all import licenses and governmental approvals
which may be necessary to permit the sale of Products in the Territory and
which have not been obtained by MEL prior to the Effective Date, and provide
reasonable assistance to MEL for the renewal of any licenses or approvals which
have been obtained as of the Effective Date;

 

b.             To the extent available to KO, provide
MEL for each KO/MEL Distributor and each region or country with period sales
reports (brand, flavor, package) promptly after the end of each period; and

 

c.             KO’s obligations under this Section 4.6.2
shall not require KO to incur any out-of-pocket expenses or other costs other
than the time reasonably spent by KO personnel to comply with the terms of this
Section 4.6.2.

 

5.             Net Proceeds.

 

5.1.          The following definitions shall apply to
this Section 5 and wherever else they may appear in this Agreement, and
each calculation and or determination required by the following definitions
shall be made and/or determined, as the case may be, separately and
specifically with reference to each specific country in the Territory
referenced in each Distribution Agreement and for the applicable period:

 

“Gross
Sales” means the gross amounts invoiced by each KO/MEL Distributor to its
customers for all Products during any applicable period.

 

“Customer
Marketing Allowances (CMAs) and Trade Spending” means all costs, expenses, and
allowances associated with incentivizing, encouraging or persuading
Distributors and/or their customers and/or consumers to sell and/or purchase,
Products, as the case may be, including, without limitation, by way of on and
off invoice discounts, allowances, promotional programs and tie-ins, rebates,
slotting and listing fees, coolers, and other similar marketing and promotional
techniques and programs as may be approved by MEL in writing from time to time.

 

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“Distributor
Dead Net Net Sales Income (DN NSI)” means the gross amounts invoiced by each
KO/MEL Distributor to its customers for all Products sold by such KO/MEL
Distributor to such customers less deductions for CMAs and Trade Spending.

 

 “Cost of Sales” for the Products means MEL’s cost of
sales with respect to all of the Products over an applicable period calculated
on the same basis and in the same manner that cost of sales is calculated by
MEL for the purposes of MEL’s periodic financial statements, from time to time,
prepared in accordance with generally accepted accounting principals
consistently applied and excludes the cost of the Strategic Ingredients sold by
KO to MEL as defined in Exhibit X to this Agreement.

 

“KO/MEL
Distributor’s Gross Fee” means the Gross Sales less the purchase price paid by
each KO/MEL Distributor to MEL for all Products purchased from MEL over an
applicable period.

 

“MEL’s Global
Branding and Marketing Allowance” includes all branding and marketing
activities that are not defined in “CMAs and Trade Spending” and “Point of Sale
and Promotional Costs.”  The amount of
MEL’s Global Branding and Marketing Allowance is described on attached Exhibit Z1.

 

“Point of Sale and Promotional Costs” means all costs
and expenses related to the development, procurement and placement of
promotional items and activities that have a direct and visible impact at the
point of sale, including without limitation point of sale material,
merchandising aids, style guides, racks, stickers, shelf programs, agency fees,
storage, shipping and handling costs, old material write-offs for obsolete
promotion materials and their destruction costs, supply of Products, and free
cases and sampling in KO/MEL Distributor’s customers’ stores and outlets.

 

“Net Proceeds”
for the Products means the Gross Sales of all of the Products minus (a) all
CMAs and Trade Spending of such Products, (b) aggregate Cost of Sales of
such Products sold, (c) the amount of MEL’s Global Branding and Marketing
Allowance, (d) Point of Sale and Promotional Costs, and (e) KO/MEL
Distributor’s Gross Fee all over an applicable period.

 

An example of
the definitions described above is shown on attached Exhibit Z2.

 

5.2.          The Parties will achieve a sharing of the
Net Proceeds as determined on attached Exhibit X.

 

6.             Confidentiality.

 

6.1.          “Confidentiality” Definition.  As used herein, “Confidential Information”
means any information, observation, data, written material, records, documents,
computer programs, software, firmware, inventions, discoveries, improvements,
developments, designs, promotional ideas, customer lists, suppliers’ lists,
financial statements, practices, processes, formulae, methods, techniques,
trade secrets, products and/or research, in each such case, of or related to a
Party’s products, organization, business and/or finances; provided, however,
Confidential Information shall not include any information which (a) is in
the public domain except through any intentional or negligent act or omission
of the non-disclosing Party (or any agent, employee, shareholder, director,
officer, or independent contractor of or retained by such other Party or any of
its Affiliates (defined in Section 12.1.1 below)), (b) can be shown
by clear and convincing tangible evidence to have been in the possession of the
non-disclosing Party prior to disclosure by the disclosing Party, (c) is
legally and properly provided to the non-disclosing Party without restriction
by an independent third party that is under no obligation of confidentiality to
the disclosing Party and that did not obtain such information in any illegal or
improper manner or otherwise in violation of any agreement with the disclosing
Party, (d) is disclosed without any restrictions of any kind by the
disclosing Party to third parties on a regular basis without any measures being
taken, whether explicitly or implicitly, by the disclosing Party to protect the
confidentiality of such information, or (e) is independently generated by
any employee or independent 

 

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contractor of or retained by the non-disclosing
Party, and such employee or independent contractor has no knowledge of any of
the Confidential Information.

 

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

 

6.3.          Injunctive Relief. 
Each Party acknowledges that the other Party will suffer irreparable
harm if such Party breaches any of the provisions regarding confidentiality set
forth in this Section 6 and that monetary damages will be inadequate to
compensate the other Party for such breach. 
Therefore, if a Party (or any agent, employee, shareholder, director,
officer, or independent contractor of or retained by such other Party or any of
its Affiliates) breaches any of such provisions, then the other Party shall be
entitled to injunctive relief without bond (in addition to any other remedies
at law or equity) to enforce such provisions.

 

7.             MEL’s Rights and Obligations/Amendment/First
Offer.

 

7.1.          MEL’s Rights Regarding Distribution
Agreements.  Subject to the terms of Section 4 above,
MEL will have sole and absolute discretion to determine whether or not to enter
into a Distribution Agreement with any KO Distributor.  Except as expressly provided in any
Distribution Agreement with a KO/MEL Distributor, nothing in this Agreement
should be construed as granting KO Distributors exclusive distribution rights
for the Products or otherwise prohibiting MEL from entering or maintaining
relationships with other distributors.

 

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

 

8.             Competitive Product/s. The provisions of this Section 8
are set forth on attached Exhibit E and are incorporated in this Section 8
by this reference.

 

9.             Termination of Distribution Agreement/s. 
In the event of any material breach or default by a KO/MEL Distributor under
its Distribution Agreement with MEL or any other occurrence that would give
rise to MEL’s right to terminate such Distribution Agreement, MEL will give KO
written notice of such breach, default or occurrence at the same time as MEL
delivers notice of such breach, default or occurrence to such KO/MEL
Distributor, and KO shall have the same opportunity to cure such breach,
default, or occurrence as is provided to the KO/MEL Distributor under the
Distribution Agreement, if any.  If the
KO/MEL Distributor and KO fail to cure the breach, default, or occurrence
within the applicable cure period, if any, MEL may terminate such Distribution
Agreement pursuant to its terms and seek any remedies available under the
Distribution Agreement or applicable law, in its sole and absolute
discretion.  KO will not, and will not
directly or indirectly participate in or assist any KO/ MEL Distributor to,
challenge any right or remedy MEL invokes under any Distribution Agreement,
except to the extent that such challenge may relate to a breach by MEL of its
obligations under this Agreement or is reasonably necessary for KO to prevent a
material impairment of its rights under this Agreement.  MEL agrees that (a) KO is not obligated,
directly or 

 

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indirectly, in
any way under any of the Distribution Agreements, (b) KO has not expressly
or implicitly agreed to guarantee the performance of any KO/MEL Distributor
under its respective Distribution Agreement with MEL, and (c) MEL will not
take any action against KO to enforce a KO/MEL Distributor’s obligation/s under
its Distribution Agreement with MEL.

 

10.           Term.  Unless
terminated by either Party pursuant to the terms of this Agreement, the initial
term of this Agreement shall commence on the Effective Date and shall end on
the fifth (5th) anniversary of the Effective Date (the “Initial Term”).  After the Initial Term, this Agreement may be
renewed for up to three (3) successive five (5)-year terms (“Additional
Term/s”) if either Party gives written notice to the other at least one hundred
twenty (120) days prior to the end of the Initial Term or applicable Additional
Term, as the case may be, of its intention to renew the Agreement for an
Additional Term.  A “Contract Year” means
any calendar year during the Term and the period from the Effective Date until
the close of business on December 31st of the calendar year in which the
Effective Date falls, which shall also be considered a Contract Year for
purposes of this Agreement.

 

11.           Termination By Either Party. 
Without prejudice to its other rights and remedies under this Agreement
and those rights and remedies otherwise available in equity or at law, either
Party may terminate this Agreement on the occurrence of one or more of the following:

 

11.1.        Material Breach. 
The other Party’s breach of a material provision of this Agreement and
failure to cure such breach within thirty (30) days after receiving written
notice describing such material breach in reasonable detail from the non-breaching
Party; provided, however, if such breach is of a nature that it cannot
reasonably be cured within thirty (30) days, then the breaching Party shall
have an additional sixty (60) day period to cure such breach, providing it
immediately commences, in good faith, its best efforts to cure such breach.

 

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

 

11.3.        Agreement.  Mutual
written agreement of the Parties.

 

11.4         Termination of Related Agreements.

 

11.4.1.    If the Concurrent Agreement (as defined
below) is terminated by KO without cause or terminated by Hansen as a result of
a breach by KO, then MEL shall have the option to terminate this Agreement,
which option may be exercised within one hundred twenty (120) days of the
occurrence of such termination by written notice by MEL to KO. Any such
termination shall be effective upon KO’s receipt of MEL’s written notice of
termination, and MEL shall not be liable to KO or otherwise obligated to pay to
KO any Aggregate Termination Fee or other amount by reason of such termination
for compensation, reimbursement or damages of whatsoever nature including, for (i) loss
of prospective compensation or earnings, (ii) goodwill or loss thereof, or
(iii) expenditures, investments, leases or any type of commitment made in
connection with the business of KO or in reliance on the existence of this
Agreement. MEL’s right to terminate this Agreement under this Section 11.4.1
shall be independent of any other rights or remedies of MEL under this
Agreement. The “Concurrent Agreement” means the Monster Energy Distribution
Coordination Agreement dated concurrently herewith between Hansen and KO.

 

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11.4.2.     If the Concurrent Agreement is terminated
by Hansen without cause or terminated by KO as a result of Hansen’s breach then
KO shall have the option to terminate this Agreement, which option may be
exercised within one hundred twenty (120) days of the occurrence of such
termination by written notice by KO to MEL. 
Any such termination shall be effective upon MEL’s receipt of KO’s
written notice of termination, and KO shall not be liable to MEL or otherwise
obligated to pay to MEL any Aggregate Termination Fee or other amount by reason
of such termination for compensation, reimbursement, or damages of whatsoever
nature including, for (i) loss of prospective compensation or earnings, (ii) goodwill
or loss thereof, or (iii) expenditures, investments, leases or any type of
commitment made in connection with the business of MEL or in reliance on the
existence of this Agreement.  KO’s right
to terminate this Agreement under this Section 11.4.2 shall be independent
of any other rights or remedies of KO under this Agreement.

 

12.           Termination on Change of Control.

 

12.1.        Definitions. 
The following definitions apply to this Section 12 and wherever
else they are used in this Agreement:

 

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

 

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

 

a.             the shareholders or Board of Directors of
such corporation approve a definitive agreement to:

 

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

 

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

 

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

 

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

 

d.             any Person or group of Persons, other
than (i) the Parent of such corporation as of the date of this Agreement,
or (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of such corporation, becomes the beneficial owner directly or
indirectly (within the meaning of Rule 13d-3 under the Act) of more than
fifty percent (50%) of the Voting Interests of such corporation, as a result of
a tender offer or exchange offer, open market purchases, privately negotiated
purchases or otherwise;

 

e.             in
any share exchange, extraordinary dividend, acquisition, disposition or
recapitalization (or series of related transactions of such nature) (other than
a merger or consolidation), the  

 

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holders
of Voting Interests of such corporation immediately prior thereto continue to
own directly or indirectly (within the meaning of Rule 13d-3 under the
Act) less than fifty percent (50%) of the Voting Interests of such corporation
(or successor entity) immediately thereafter; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12.2.        Notice of Change of Control. 
As soon as is reasonably practical after the occurrence of a Change of
Control of a Party to this Agreement or its Parent, but in no event later than
sixty (60) days thereafter, the Party subject to the Change of Control or whose
Parent is subject to a Change of Control (the 

 

9

 

“Subject Party”) shall deliver written notice to
the other Party (the “Other Party”) that (a) states that a Change of
Control has occurred with respect to itself or its Parent, (b) states the
date that the Change of Control was consummated, if known, and (c) identifies
the Person/s who acquired Control (the “Change of Control Notice”).

 

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

 

13.           Termination by MEL For Violation of
Competitive Products Provisions.  Subject
to the terms of the last sentence of this Section 13, in the event of KO
directly or indirectly distributes anywhere in the Competitive Territory,
through one or more KO Distributors, a Competitive Product, MEL may terminate
this Agreement upon (a) thirty (30) days written notice to KO and KO’s
failure to cure the alleged breach within that period, or (b) immediately
upon receipt of notice and without opportunity to cure if KO has violated Section 8
of this Agreement more than once within any twelve (12) month period.  MEL’s right to terminate this Agreement under
this Section 13 shall be independent of and in addition to any other
rights or remedies of MEL under this Agreement, including, without limitation, Section 11.1
above, and the construction and interpretation of Section 8 shall not
restrict, limit or otherwise affect the construction and interpretation of this
Section 13.

 

14.           Termination Without Cause.

 

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

 

14.2.        Termination Without Cause by KO.

 

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

 

b.             If KO exercises its right to terminate
this Agreement in accordance with Section 14.2.a. above, KO shall pay to
MEL an amount equal to the Termination Fee, as defined in Section 17.1
below.  If, after such notice from KO,
this Agreement is otherwise terminated as a result of KO’s breach of this
Agreement, including without limitation, arising from the elimination of
substantially all of MEL’s benefits arising under this Agreement by KO or KO’s
repudiation or abandonment of this Agreement (collectively, a “Termination
Breach”) within such one (1) year notice period then, without prejudice to
any of MEL’s other rights and/or remedies, the Termination Fee shall be
multiplied by ***.

 

c.             At any time, and from time to time, after
KO gives MEL written notice of termination, and without prejudice to, or in any
way detracting from, KO’s obligation to pay the 
Termination Fee to MEL, MEL may elect to exercise its right to terminate
this Agreement, in which event MEL shall not be liable to KO by reason of such
termination for compensation, reimbursement, or damages of whatsoever nature
including, for (i) loss of prospective compensation or earnings, (ii) goodwill
or loss thereof, or (iii) 

 

	
  ***

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

  

 

10

 

expenditures, investments, leases or any
type of commitment made in connection with the business of KO or in reliance on
the existence of this Agreement.

 

15.           Automatic Termination. 
If neither Party has previously chosen to terminate this Agreement pursuant
to its terms and all Distribution Agreements with the KO/MEL Distributors have
been terminated for any reason and/or expired pursuant to their terms, either
Party may terminate this Agreement by notifying the other Party, in writing, of
such termination effective no earlier than ten (10) Business Days (as
defined below) after the date of such notice. 
For purposes of this Agreement, “Business Day” means each day other than
a Saturday, Sunday or other day on which commercial banks in New York are
authorized or required by law to close.

 

16.           Obligations on Termination. 
In the event this Agreement is terminated pursuant to Sections 11.1,
11.2, 11.3, 11.4, 12, 13, or 14.2 of this Agreement, such termination will not
terminate any Distribution Agreement that is effective at the time of such
termination. In the event that this Agreement is terminated pursuant to Section 14.1
of this Agreement, MEL will simultaneously give notice of termination pursuant
to Section 14.1 above to terminate all associated KO/MEL Distribution
Agreements then in effect.  Except as
provided in this Section 16, the expiration or termination of this
Agreement will not terminate any Distribution Agreement that is effective at
the time of such expiration or termination. 
During the period between a notice of termination and the effective date
of termination, each Party shall continue to fully perform its obligations
under this Agreement.  Sections 6, 7.1,
17.1, 18, 19, 20 and 22 of this Agreement shall survive the expiration or
termination of this Agreement.

 

17.           Termination Fees.

 

17.1.        “Termination Fee” means KO’s share of Net
Proceeds for the twelve (12) month period ending on the last day of the last
calendar month preceding the effective date of termination of this Agreement
for Products sold by MEL to KO/MEL Distributors who are KO/MEL Distributors as
of the effective date of such termination; provided that if termination of this
Agreement occurs before the first anniversary of the Effective Date the
Termination Fee shall be increased by *** percent ***; and if termination of
this Agreement occurs after the first anniversary of the Effective Date but
before the second anniversary of the Effective Date, the Termination Fee shall
be increased by *** percent ***.  Each
termination fee specified in this Section 17 will be due and payable no
later than thirty (30) days after the effective date of the applicable
termination and such obligation shall survive the termination or expiration of
this Agreement.

 

17.2.        If MEL terminates this Agreement pursuant
to the terms of Section 11.1 or 13 above, KO shall, without prejudice to
MEL’s rights and remedies available under this Agreement, equity and/or
applicable law, pay MEL the Termination Fee.

 

17.3.        If KO terminates this Agreement pursuant
to the terms of Section 11.1 above, MEL shall, without prejudice to KO’s
rights and remedies available under this Agreement, equity and/or applicable
law, but subject to Section 18, pay KO an amount equal to the Termination
Fee.

 

17.4.        If MEL terminates a Distribution
Agreement with a KO/MEL Distributor without cause and without concurrently
terminating this Agreement, MEL will pay KO the Termination Fee applicable to
the terminated Distribution Agreement only.

 

17.5.        If MEL terminates this Agreement pursuant
to the terms of Section 14.1 above, MEL shall pay KO the Termination Fee.

 

17.6.        If MEL only terminates a portion of the
territory specified in a particular Distribution Agreement between MEL and a
KO/MEL Distributor, without cause, MEL shall pay KO a partial 

 

	
  ***

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

  

 

11

 

termination
fee (in each case, a “Partial Termination Fee”) equal to the Termination Fee
applicable to the terminated Distribution Agreement only, that would be owed if
the applicable Distribution Agreement were fully terminated on the date the
partial termination occurs, multiplied by a fraction, the numerator of which is
the Net Sales of Products in the terminated portion of the applicable territory
during the twelve (12) months immediately preceding such termination, and the
denominator of which is the Net Sales of Products in the entire applicable
territory during the twelve (12) months immediately preceding such termination.

 

18.           Limitation of Damages; Limitation of
Liability.  EXCEPT FOR DAMAGES DIRECTLY RESULTING FROM
INDEMNITY OBLIGATIONS SET FORTH IN SECTION 22 OF THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL,
SPECIAL, OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS
OF PROFITS, LOSS OF GOODWILL, BUSINESS INTERRUPTION, LOSS OF BUSINESS
OPPORTUNITY, OR ANY OTHER PECUNIARY LOSS) SUFFERED BY SUCH PARTY RELATED TO OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, AND/OR THE USE OF OR INABILITY TO USE OR SELL THE PRODUCTS, AND/OR
FROM ANY OTHER CAUSE WHATSOEVER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.  EXCEPT FOR
DAMAGES RESULTING FROM THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 22
OF THIS AGREEMENT, THE PARTIES’ RESPECTIVE TOTAL LIABILITY FOR MONEY DAMAGES
ARISING OUT OF OR RELATED TO THIS AGREEMENT WILL NOT EXCEED THE APPLICABLE
TERMINATION FEE PAYABLE PURSUANT TO SECTION 17 ABOVE.  THESE LIMITATIONS WILL APPLY REGARDLESS OF
THE LEGAL THEORY OF LIABILITY, WHETHER UNDER CONTRACT, TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER THEORY WHATSOEVER.

 

EACH AND EVERY
PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY OR
WARRANTIES, DISCLAIMER, OR EXCLUSION OF DAMAGES, IS EXPRESSLY INTENDED TO BE
SEVERABLE AND INDEPENDENT FROM ANY OTHER PROVISION, SINCE THOSE PROVISIONS
REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE PARTIES, AND SHALL
BE SEPARATELY ENFORCED.  NEITHER PARTY
MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED (INCLUDING THE
IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE) EXCEPT THOSE SET FORTH IN THIS AGREEMENT.

 

19.           Books and Records; Examinations.

 

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

 

19.2.        For a period of at least two (2) years
following the expiration or earlier termination of this Agreement, KO shall
maintain such books and records (collectively, “KO Records”) as are necessary
to 

 

12

 

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

 

19.3.        MEL shall keep complete and true books
and other records containing data in sufficient detail necessary to determine
the Net Sales of the Products, Distributable Gross Profits for each of the
Products, any Termination Fee, and any Partial Termination Fee, as well as all
components of each of these items.

 

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

 

20.           Trademarks.

 

20.1.        KO acknowledges and agrees that all
Hansen Marks shall be and remain the exclusive property of Hansen.  No right, title or interest of any kind in or
to the Hansen Marks is transferred by this Agreement to KO.  KO agrees that it will not attempt to
register the Hansen Marks, or any marks confusingly similar thereto, in any
form or language anywhere in the world. 
KO further agrees that during the term of this Agreement it will not
contest the validity of the Hansen Marks or the ownership thereof by
Hansen.  If KO desires to reproduce any
of the Hansen Marks for promotional purposes, the reproduction will only be
made after written approval by MEL.  KO
shall only use the Hansen Marks in such a manner as to ensure and maintain the
high quality and goodwill associated therewith; provided, however, that KO may,
in consultation with MEL, submit form or template usages or specimens of
proposed use featuring the Hansen Marks that may be subsequently used on other
materials without seeking additional approval from MEL, provided that the form,
substance, content and context of such subsequent use is not materially
different from that which MEL initially approves. KO’s use of the Hansen Marks
will inure for the benefit of Hansen.

 

20.2.        Infringement of Hansen’s Marks. 
If during the term of this Agreement a third party institutes against
Hansen, MEL or KO any claim or proceeding that alleges that the use of any
Hansen Mark in connection with the marketing, promotion, merchandising and/or
sales of the Products under this Agreement infringes the intellectual property
rights held by such third party, then MEL shall, in its sole discretion, and at
its sole expense, contest, settle, and/or assume direction and control of the
defense or settlement of, such action, including all necessary appeals
thereunder.  KO shall use all reasonable
efforts to assist and cooperate with MEL in such action, subject to MEL
reimbursing KO for any reasonable out-of-pocket expenses incurred by KO in
connection with such assistance and cooperation.  If, as a result of any such action, a
judgment is entered by a court of competent jurisdiction, or settlement is
entered by MEL, such that any Hansen Mark cannot be used in connection with the
marketing, promotion, merchandising and/or sales of the Products under this
Agreement without infringing upon the intellectual property rights of such
third party, then Hansen, MEL and KO promptly shall cease using such affected
Hansen Mark in 

 

13

 

connection with the marketing, promotion,
merchandising and/or sale of the Products under this Agreement.  Neither Party shall incur any liability or
obligation to the other Party arising from any such cessation of the use of the
affected Hansen Mark.

 

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

 

20.4.        Prior Agreements. 
Notwithstanding the foregoing provisions of paragraph 20 (including the
definition of “Hansen Marks” as including both registered and unregistered
rights), the Parties acknowledge their ongoing discussions over their
respective rights in trademarks containing the term “monster,” *** regarding
Hansen’s use of its MONSTER marks (the “Monster Trademark Agreement”).  Nothing contained in this Agreement shall (a) be
deemed to be an acknowledgement by KO of Hansen’s rights in unregistered marks
containing the term “monster” or (b) limit the provisions of the Monster
Trademark Agreement.  In the case of a
conflict, the Parties agree that the terms of the Monster Trademark Agreement
shall prevail.

 

21.           Representations, Warranties and Covenants.

 

21.1.        MEL Representations, Warranties and Covenants.

 

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

 

b.             MEL warrants that all Products, all food
additives in the Products, or all substances for use in, with, or for the
Products, comprising each shipment or other delivery hereby made by MEL to, or
on the order of, KO and/or any KO/MEL Distributor are hereby guaranteed as of
the date of such shipment to be, on such date, (i) not adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended, including the Food Additives Amendment of 1958, and (ii) in
compliance with all health, safety and labeling standards imposed by law,
regulations or orders applicable in the territory in which the Products will be
sold.

 

c.             MEL warrants that all Products shall be
merchantable.

 

d.             KO’s sole and exclusive remedy for MEL’s
breach of MEL’s representations in Sections 21.1.b. and 21.1.c. above shall be
as provided for in Section 22.3. below.

 

21.2.        The provisions of this Section 21.2
are set forth on attached Exhibit F and are incorporated in this Section 21.2
by this reference.

 

22.           Indemnification and Insurance.

 

22.1.  KO agrees to indemnify MEL against any third
party claims and hold MEL harmless from and against any and all damages,
losses, liabilities, claims, charges, actions, suits, proceedings,
deficiencies, taxes, interest, penalties, and costs and expenses arising out
of, resulting from or otherwise connected with and to the extent attributable
to (a) any willfully negligent act, misfeasance or nonfeasance by KO, its
Subsidiaries, or any of their respective officers, employees, directors or
agents regarding the sale, distribution or marketing of the Products, (b) the
failure of any representation or warranty made by KO contained in this
Agreement to be true or correct in any material respect (without regard to any
references to materiality contained therein), and (c) any claim,
advertising or representation by KO regarding Products that has not been
approved by MEL.

 

22.2.        Intentionally omitted.

 

	
  ***

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

  

 

14

 

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

 

22.4.       During the term of this Agreement and for
a period of two (2) years thereafter, MEL and KO agree to maintain
policies of insurance of the nature and amounts specified below, which shall
provide the other Party as an additional insured (providing for a waiver of
subrogation rights and endeavoring to provide for not less than thirty (30)
days written notice of any modification or termination of coverage), and each
Party shall provide to the other Party with a certificate of insurance
evidencing such insurance, in a form satisfactory to such Party:

 

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

 

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

 

For any claims
under this Agreement, the applicable Party’s insurance shall be deemed to be
primary and not contributing to or in excess of any similar coverage purchased
by the other Party.  All deductibles
payable under an applicable policy shall be paid by the Party responsible for
purchasing such policy.  All such
insurance shall be written by companies authorized to do business in the state
or states where the work is to be performed and having at least the ratings of
the respective Parties current insurers, unless not obtainable at commercially
reasonable rates in light of previous premiums.

 

22.5.        An indemnified party under this Section 22
shall give to the indemnifying party prompt notice of the third party claim for
which such indemnified party is seeking indemnification.  Until such time as the indemnifying party
acknowledges in writing its obligation to indemnify the indemnified party under
this Section 22, the indemnified party will have the right to direct,
through counsel of its choosing, the defense of any matter the subject of such
indemnification claim.  At such time as
the indemnifying party acknowledges in writing its obligation to indemnify the
indemnified party against any and all damages, losses, liabilities, claims,
charges, actions, suits, proceedings, deficiencies, taxes, interest, penalties,
and costs and expenses that may result from such matter, the indemnifying party
shall have the right to direct, through counsel of its own choosing, the
defense or settlement of any matter the subject of indemnification hereunder at
its expense.  The indemnified party may
thereafter retain its own counsel to participate in the defense of the matter,
at the indemnified party’s own expense. 
The indemnified party shall provide the indemnifying parties with
reasonable and relevant access to its records and personnel relating to any
such matter during normal 

 

15

 

business
hours and shall otherwise cooperate with the indemnifying party in the defense
or settlement of any such matter, and the indemnifying party shall reimburse
the indemnified party for all its reasonable out-of-pocket expenses in
connection with such matter.  No
settlement in respect of any third party claim may be effected by the
indemnifying party without the indemnified party’s prior written approval.  If the indemnifying party shall fail to
undertake any such defense, the indemnified party shall have the right to
undertake the defense or settlement thereof at the indemnifying party’s expense,
provided the indemnifying party has received reasonable notice of, and
opportunity to participate in, any proposed settlement.

 

23.           Miscellaneous.

 

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

 

23.2.        Integration. 
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter of this Agreement and is intended by the Parties
to be a final expression of their understanding and a complete and exclusive
statement of the terms and conditions of the agreement.  This Agreement supersedes any and all agreements,
either oral or in writing, between the Parties concerning the subject contained
herein and contains all of the covenants, agreements, understandings,
representations, conditions, and warranties mutually agreed to between the
Parties.  This Agreement may be modified
or rescinded only by a writing signed by the Parties hereto or their duly
authorized agents.

 

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

 

23.4.        Assignment.  This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective heirs, executors, administrators, legal administrators, legal
representatives, successors and assigns. 
This Agreement shall not be assignable by either Party without the prior
written consent of the other Party; provided, however, that in the event of the
Change of Control of a Party to this Agreement (the “Change of Control Party”)
or its Parent in which the other Party to this Agreement chooses not to
exercise its termination rights under Section 12.3 above and this
Agreement is assumed by the surviving entity or successor to the Change of
Control Party, or by the acquirer of substantially all of the Change of Control
Party’s assets as a matter of law, the Change of Control Party shall be
entitled to assign all of its rights and obligations under this Agreement to
such Person without the other Party’s consent so long as such successor,
surviving entity or acquirer agrees in writing to unconditionally assume all
of  the Change of Control Party’s rights
and obligations under this Agreement.

 

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

 

16

 

23.6.        Partial Invalidity. 
Each provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law.  If any
provision of this Agreement or the application of the provision to any person
or circumstance will, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or the application of the provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
will not be affected by such invalidity or unenforceability, unless the
provision or its application is essential to this Agreement.  The Parties shall replace any invalid and/or
unenforceable provision with a valid and enforceable provision that most
closely meets the aims and objectives of the invalid and/or unenforceable provision.

 

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

 

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

 

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

 

If
to Hansen and MEL:

 

Monster Energy
Ltd.

c/o Mason Hayes &
Curran

South Bank
House, Barrow Street, Dublin 4, Ireland

Attention: Tony
Burke

Telecopy:
+353-1-614-5001

 

and

 

Hansen Beverage
Company

550 Monica Circle, Suite 201

Corona, California 92880

Attention:  Chief Executive Officer

Telecopy:  (951) 739-6210

 

with
a copy to:

 

Solomon
Ward Seidenwurm & Smith LLP 

401
B Street, Suite 1200 

San
Diego, California  92101 

Attention:  Norman L. Smith, Esq.

Telecopy:  (619) 231-4755

 

If
to KO:

 

The
Coca-Cola Company

P.O. Box
1734

Atlanta,
Georgia 30301

Attention:  President, Coca-Cola North America

 

17

 

European
Union Finance Director

Telecopy:  44 208 2373476

 

with
a copy to:

 

The
Coca-Cola Company

P.O. Box
1734

Atlanta,
Georgia 30301

Attention:  General Counsel, European Union

Telecopy:  44 208 237 3705

 

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

 

23.10.     Third-Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended or shall be construed to give any person or entity, other
than the Parties to this Agreement and their successors and permitted assigns,
any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained in this Agreement.

 

24.           Dispute Resolution.

 

24.1.       Any controversy, claim or dispute of whatever nature arising out of or
in connection with this Agreement or the breach, termination, performance or
enforceability hereof or out of the relationship created by this Agreement (a “Dispute”)
shall be finally resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) in
effect on the date of this Agreement. 
The Parties understand and agree that they each have the right to apply
to a court of competent jurisdiction for a temporary restraining order, a
preliminary injunction or other equitable relief to preserve the status quo or
prevent irreparable harm.  Unless
otherwise agreed in writing by the Parties hereto, the arbitral panel shall
consist of three (3) arbitrators, each of whom shall be a retired judge from a
State other than California or Georgia and shall be appointed by the AAA in
accordance with Section 24.2 below. 
The place of arbitration shall be Dallas, Texas.  Judgment upon the award may be entered, and
application for judicial confirmation or enforcement of the award may be made,
in any competent court having jurisdiction thereof.  Other than as required or permitted by an
applicable governmental entity, each Party will continue to perform its
obligations under this Agreement pending final resolution of any such
Dispute.  The Parties knowingly and
voluntarily waive their rights to have any Dispute tried and adjudicated by a
judge or a jury.

 

24.2.        Immediately after the filing of the submission or the answering
statement or the expiration of the time within which the answering statement is
filed, the AAA shall send simultaneously to each Party to the dispute an
identical list of ten (10) (unless the AAA decides that a larger number is
appropriate) names of retired judges from the National Roster from States other
than California or Georgia.  The Parties
shall attempt to agree on the three (3) arbitrators from the submitted
list and advise the AAA of their agreement. 
If the Parties are unable to agree upon the three (3) arbitrators,
each Party to the dispute shall have fifteen (15) days from the transmittal
date in which to strike no more than three (3) names objected to, number
the remaining names in order of preference, and return the list to the
AAA.  If a Party does not return the list
within the time specified, all persons named therein shall be deemed
acceptable.  From among the persons who
have been approved on both lists, and in accordance with the designated order
of mutual preference, the AAA shall invite the acceptance of the three (3) arbitrators
to serve.  If the Parties fail to agree
on any of the 

 

18

 

persons named, or if
acceptable arbitrators are unable to act, or if for any other reason the
appointment cannot be made from the submitted lists, the AAA shall have the
power to make the appointment from among other retired judges on the National
Roster from States other than California or Georgia without the submission of
additional lists.

 

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

 

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

 

24.5.        EXCEPT FOR THE DAMAGES DIRECTLY RESULTING
FROM THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 22 OF THIS AGREEMENT,
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EACH PARTY WAIVES
THE RIGHT IN ANY ARBITRATION OR JUDICIAL PROCEEDING TO RECEIVE CONSEQUENTIAL,
PUNITIVE, OR EXEMPLARY DAMAGES.  THE
ARBITRATORS SHALL NOT HAVE THE POWER TO AWARD CONSEQUENTIAL, PUNITIVE, OR
EXEMPLARY DAMAGES.

 

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

 

26.           Force Majeure.

 

26.1.        Neither Party shall be liable for any
delays in delivery or failure to perform or other loss due directly or
indirectly to unforeseen circumstances or causes beyond such Party’s reasonable
control (each, individually, a “Force Majeure Event”) including, without
limitation: (a) acts of God, act (including failure to act) of any
governmental authority (de jure or de facto), wars (declared or undeclared),
governmental priorities, port congestion, riots, revolutions, strikes or other
labor disputes, fires, floods, sabotage, nuclear incidents, earthquakes,
storms, epidemics; or (b) inability to timely obtain either necessary and
proper labor, materials, ingredients, components, facilities, production
facilities, energy, fuel, transportation, governmental authorizations or
instructions, material or information. The foregoing shall apply even though
any Force Majeure Event occurs after such Party’s performance of its
obligations is delayed for other causes.

 

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

 

19

 

27.           Ethical Standards.

 

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

 

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

 

28.           External Communications.

 

28.1.        Publicity.  MEL and KO each agree that the initial
public, written announcements regarding the execution of this Agreement and the
subject matter addressed herein shall be coordinated between the Parties prior
to release.  Thereafter, each Party
agrees to use commercially reasonable efforts to consult with the other Party
regarding any public, written announcement which a Party reasonably anticipates
would be materially prejudicial to the other Party.  Nothing provided herein, however, will
prevent either Party from (a) making and continuing to make any statements
or other disclosures it deems required, prudent or desirable under applicable
Federal or State Security Laws and/or such Party’s customary business
practices, or (b) engaging in oral discussions or oral or written
presentations with actual or prospective investors or analysts regarding the
subject matter of this Agreement, provided no Confidential Information is
disclosed.  If a Party breaches this Section 28.1
it shall have a seven (7) day period in which to cure its breach after
written notice from the other Party.  A
breach of this Section 28.1 shall not entitle a Party to damages or to
terminate this Agreement.

 

28.2.        Marketing and Promotion.

 

a.            MEL and KO agree that the principles set
forth in Section 28.2.(b) below are generally consistent with the
marketing and promotion guiding principles of both MEL and KO (the “Guiding
Principles”). Notwithstanding anything set forth below, compliance with the
Guiding Principles shall not constitute an obligation of either Party under
this Agreement.  The Guiding Principles
shall constitute unenforceable goals only of the Parties and neither Party
shall be entitled to make any claim for breach against the other or enforce any
remedy under this Agreement or to terminate this Agreement as the result of
non-compliance with, or a violation of, any Guiding Principle(s).

 

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

 

20

 

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

 

[Signature page follows.]

 

21

 

SIGNATURE PAGE TO MONSTER ENERGY INTERNATIONAL DISTRIBUTION

COORDINATION AGREEMENT BETWEEN HANSEN BEVERAGE COMPANY AND 

THE COCA- COLA COMPANY

 

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

 

	
  TAURANGA LTD.,

  	
  THE COCA-COLA COMPANY,

  
	
  an
  Irish company

  	
  a
  Delaware corporation

  

 

 

	
  By:
  

  	
  /s/
  Rodney Sacks

  	
   

  	
   By: 

  	
  /s/
  William D. Hawkins III

  
	
   

  	
     
   Rodney Sacks

  	
   

  	
  [Name]

  	
     
   William D. Hawkins III

  
	
   

  	
    
    Chief Executive Officer

  	
   

  	
  [Title]

  	
     
   Vice President & General Counsel

  

 

22

 

EXHIBIT
A

Monster
Energy International Distribution Coordination Agreement

 

[form of
monster energy international distribution agreement]

 

 

MONSTER ENERGY

[form of] INTERNATIONAL
DISTRIBUTION AGREEMENT

 

This
INTERNATIONAL DISTRIBUTION AGREEMENT (“Agreement”) is entered into as of            ,
2008 (the “Effective Date”) between TAURANGA LTD, a company organized and
existing under the laws of the Republic of Ireland, trading as MONSTER ENERGY
LTD (“MEL”) with offices at South Bank House, Barrow Street, Dublin 4, Ireland,
and                                                                                                                                               
                        (“Distributor”).

 

1.             Recitals and Definitions.

 

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

 

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

 

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

 

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

 

1

 

2.             Appointment.

 

a.             With effect from the Commencement Date,
MEL appoints Distributor, and Distributor accepts appointment, as a distributor
and seller of Products to Distributor’s Accounts within the Territory.  Such appointment shall only be non-exclusive,
except if and to the extent specifically designated as exclusive on Exhibit C
hereto.  Such appointment shall exclude
any SKU/s deleted from distribution pursuant to Section 13.b. and 13.f.
below.  Those categories of customers
which are excluded from the definition of Distributor’s Accounts are expressly
reserved for MEL, or such other distributors as MEL may from time to time
appoint.  Distributor shall be entitled
to appoint sub-distributors within the Territory provided that the terms of such
appointment shall provide that the sub-distributors shall not actively seek or
solicit customers for the Products outside the Territory or any customers
located within the Territory other than the Distributor’s Accounts set forth on
Exhibit C, and the terms of such appointments shall not be
inconsistent with the terms and conditions of this Agreement and shall be
subject to MEL’s rights hereunder. 
Distributor’s appointment of sub-distributors shall be to supplement and
augment but not to replace or substitute, wholly or partially, Distributor’s
resources, performance capabilities and/or ability to fully perform all of
Distributor’s obligations under this Agreement, including without limitation,
as provided in Section 3 below, in the Territory.  Distributor will remain liable for the
actions, omissions and performance of all of Distributor’s sub-distributors.

 

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

 

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

 

d.             Distributor shall, at its sole expense,
obtain all import licenses and governmental permits and approvals which may be
necessary to permit the sale of Products in the Territory.  Distributor shall also comply with any and
all governmental laws, regulations, and orders which are applicable to
Distributor by reason of its execution of this Agreement, including any and all
laws, regulations or orders in the Territory which govern or affect the
ordering, export, shipment, import, sale, delivery or redelivery of Products in
the Territory. Distributor shall also notify MEL of the existence and content
of any provision of law which to Distributor’s knowledge conflicts with any
provisions of this Agreement at the time of its execution or thereafter. In the
export of Products from the 

 

2

 

United States, Distributor shall further comply
with the applicable law of the Territory, as well as U.S. laws and regulations
governing exports, including the Export Administration Act and regulations
thereunder, and the U.S. Boycott Regulations.

 

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

 

3.             Distributor’s Duties. 
Distributor shall:

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.             Prices.

 

a.             The prices (“Selling Price”) to be paid
by Distributor to MEL for the Products shall be reviewed and determined
annually by MEL for the forthcoming year after discussion with Distributor but
shall be subject to adjustment in accordance with Section 4.c. below.  The annual increases to the Selling Price
will be communicated to 

 

4

 

the Distributor no later than three (3) calendar
months prior to implementation of price increases in a country within the
Territory.

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  ***

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

  

 

5

 

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

 

8.             Forecast and Delivery.

 

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

 

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

 

9.             Trademarks.

 

a.             Distributor acknowledges HBC’s exclusive right,
title, and interest in and to the Trademarks and trade names, whether or not
registered, patents and patent applications (“Patents”), copyrights (“Copyrights”)
and trade secrets and know-how (“Know-How”) which HBC may have at any time
created, adopted, used, registered, or been issued in the United States of
America or in any other location in connection with HBC’s business or the
Products and Distributor shall not do, or cause or permit to be done, any acts
or things contesting or in any way impairing or tending to impair any portion
of HBC’s  right, title, and interest in
and to the Trademarks, trade names, Patents, Copyrights, and Know-How.  Any approval by MEL for Distributor to use
any Trademarks, trade names, Patents, Copyrights, trade secrets and Know-How in
connection with the distribution and sale of the Products shall be a mere
temporary permission, uncoupled with any right or interest, and without payment
of any fee or royalty charge for such use.

 

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

 

c.             Any proposed use by Distributor of the
Trademarks (to the extent that it either has not been previously approved by
MEL in writing or differs materially from a use previously approved by MEL in
writing) 

 

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

 

6

 

shall be subject to the prior written consent of
MEL, which MEL may withhold in its sole and absolute discretion.  Distributor shall submit to MEL in writing each
different proposed use of the Trademarks in any medium.

 

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

 

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

 

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

 

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

 

h.             If during the term of this Agreement a
third party institutes against HBC, MEL or Distributor any claim or proceeding
that alleges that the use of any Trademark or any Know-How, Patent, trade
secret or Copyright in connection with the distribution, marketing, promotion,
merchandising and/or sales of the Products under this Agreement infringes the
intellectual property rights held by such third party, then MEL shall, in its
sole discretion, and at its sole expense, contest, settle, and/or assume
direction and control of the defense or settlement of, such action, including
all necessary appeals thereunder. 
Distributor shall use all reasonable efforts to assist and cooperate
with MEL in such action, subject to MEL reimbursing Distributor for any
reasonable out-of-pocket expenses incurred by Distributor in connection with
such assistance and cooperation.  If, as
a result of any such action, a judgment is entered by a court of competent
jurisdiction, or settlement is entered by MEL, such that any Know-How, Patent,
trade secret, Copyright or Trademark cannot be used in connection with the
distribution, marketing, promotion, merchandising and/or sales of the Products
under this Agreement without infringing upon the intellectual property rights
of such third party, then HBC, MEL and Distributor promptly shall cease using
such affected Know-How, Patent, trade secret Copyright or Trademark in
connection with the distribution, marketing, promotion, merchandising and/or
sale of the Products under this Agreement. 
Except as otherwise specified in this Agreement, neither party shall
incur any liability or obligation to the other party arising from any such cessation
of the use of the affected Trademark.

 

10.           Promotion and Trade Marketing of Products. 
Distributor shall be responsible for promotion and “trade” marketing of
the Products to Distributor’s Accounts within the Territory.  Distributor shall use commercially reasonable
efforts to actively and diligently distribute and encourage the utilization of
merchandising aids and promotional materials in all Distributor’s Accounts
throughout the Territory.  Without in any
way detracting from the foregoing, Distributor shall reasonably participate in
and diligently implement all “trade” marketing and 

 

7

 

promotional
programs that are mutually agreed upon by MEL and Distributor from time to
time.  Distributor acknowledges that (a) MEL
has no obligation to market and promote the Products, and (b) MEL makes
no, and hereby disclaims any, express or implied warranty, representation, or
covenant relating to or in connection with MEL’s marketing and promotional
activities including any Global Branding and Marketing activities (as defined
in Section 13.a. below), including without limitation, as to the value,
performance, extent, effectiveness, quantity, quality, success or results of
any such activities or the lack thereof. 
Except as expressly provided in Section 19 below, Distributor shall
have no claim against MEL and its affiliates and hereby releases MEL and its
affiliates from all and any claims by, and/or liability to, Distributor of any
nature for its failure to market and promote, or adequately market and promote,
the Products or arising from or relating to or in connection with any Global
Branding and Marketing activities procured, provided or performed by MEL or MEL’s
failure to procure, provide or perform such activities.

 

11.           Term.  Unless
terminated by either party pursuant to the terms of this Agreement, the initial
term of this Agreement shall commence on the Effective Date and shall end on
the fifth (5th) anniversary of the Commencement Date (the “Initial Term”).  After the Initial Term, this Agreement may be
renewed for up to three (3) further successive five (5)-year terms (“Additional
Term/s”) if (a) either party gives written notice to the other at least
one hundred twenty (120) days prior to the end of the Initial Term or
applicable Additional Term, as the case may be, of its intention to renew the
Agreement for an Additional Term, and (b) MEL determines that the
provisions of Sections 2.a., 2.b. and 21 of this Agreement are valid and
enforceable in accordance with their respective terms during the applicable
Additional Period.  If MEL determines
that it is necessary or desirable that the parties execute an additional
agreement or instrument in order for the provisions of Sections 2.a., 2.b. and
21 to be valid and enforceable, then the parties agree to execute such
documents as may reasonably be required to give effect to the foregoing.  A “Contract Year” means any calendar year
during the Term and the period from the Commencement Date until the close of
business on December 31st of the calendar year in which the Commencement
Date falls.

 

12.           Termination.

 

a.             Termination for Cause.

 

(i).           Termination By Either Party. 
Without prejudice to its other rights and remedies under this Agreement
and those rights and remedies otherwise available in equity or at law, either
party may terminate this Agreement on the occurrence of one or more of the
following:

 

(A).           Breach.  The
other party’s material breach of a provision of this Agreement and failure to
cure such breach within thirty (30) days after receiving written notice
describing such breach in reasonable detail from the non-breaching party;
provided, however, if such breach is of a nature that it cannot reasonably be
cured within thirty (30) days, then the breaching party shall have an
additional thirty (30) day period to cure such breach, providing it immediately
commences, and thereafter diligently prosecutes, in good faith, its best
efforts to cure such breach.  In the
event that either MEL or Distributor exercises its right to terminate this
Agreement in accordance with this Section 12.a.(i)(A), the breaching party
shall be obligated to pay the other party a severance payment (the “Breach
Severance Payment”) in the amount calculated as follows: the Distributor’s “average
gross profit per case” (as defined below) multiplied by the number of cases of
Products sold by the Distributor during the most recently completed twelve (12)
month period ended on the last day of the month preceding the month in which
this Agreement is terminated.  The
Distributor’s “average gross profit per case” shall mean the Distributor’s
actual selling price less (i) promotion allowances, discounts, free cases
and allowance programs, and (ii) Distributor’s laid in cost of the
Products.  The Initial Term and any
Additional terms are collectively referred to as the “Term.”

 

(B)           Insolvency.           The other party (a) makes any
general arrangement or assignment for the benefit of creditors, (b) becomes
bankrupt, insolvent or a “debtor” as defined in 11 U.S.C. § 101, or any
successor statute (unless such petition is dismissed within sixty (60) days
after its original filing), (c) has appointed a trustee or receiver to
take possession of substantially all of such party’s assets or interest in this
Agreement (unless 

 

8

 

possession
is restored to such party within sixty (60) days after such taking), or (d) has
substantially all of such party’s assets or interest in this Agreement (unless such
attachment, execution or judicial seizure is discharged within sixty (60) days
after such attachment, execution or judicial seizure) attached, executed, or
judicially seized.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  ***

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

  

 

9

 

(iii).         In the event of a Partial Territory
Termination,  MEL or its successor, as
the case may be, shall pay to Distributor a severance payment with respect to
the Products which are the subject of the termination, calculated on the same
basis as the Product Severance Payment, but only with respect to that portion
of the Territory which is the subject of the Partial Territory Termination,
less the amount, if any, Distributor may receive from the assignee of its
rights under this Agreement, and shall be paid within the period provided in Section 12.b.(ii) above
(the “Territory Severance Payment”).

 

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

 

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

 

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

 

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

 

d.             Sole
Remedy.

 

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

 

(ii).          The Breach Severance
Payment and/or the Distributor Severance Payment payable by Distributor to MEL
pursuant to the provisions of Section 12.a.(i)(A) and Section 12.c.(ii) above
respectively, if any, and MEL’s repurchase of Distributor’s inventory of
Products and advertising materials pursuant to Section 12.e.(iv) below,
or Distributor’s right to sell such inventory if not so repurchased by MEL,
shall constitute MEL’s sole and 

 

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

 

10

 

exclusive
remedy for the termination or non-renewal of this Agreement, including, without
limitation, in the case of a breach and shall be in lieu of all other claims
that MEL may have against Distributor as a result thereof.  Without in any way detracting from or limiting
the provisions of Section 12.e.(iii) below and, in addition thereto,
under no circumstances shall Distributor be liable to MEL by reason of the
termination or non-renewal of this Agreement for compensation, reimbursement or
damages of whatsoever nature including, without limitation, for (A) loss
of prospective compensation or earnings, (B) goodwill or loss thereof, or (C) expenditures,
investments, leases or any type of commitment made in connection with the
business of MEL or in reliance on the existence of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

f.              Continued
Supply of Products After Termination.  In the event MEL continues to
supply Products to Distributor for any reason following the termination of this
Agreement, Distributor acknowledges and agrees that any such action shall not
constitute a waiver of MEL’s rights under this Agreement or a reinstatement,
renewal or continuation of the term of this Agreement.  MEL and Distributor agree that if MEL
continues to supply Products 

 

11

 

to Distributor following the
termination of this Agreement, (i) Distributor shall not actively seek or
solicit customers for the Products outside the Territory or any customers
located within the Territory other than the Distributor’s Accounts, (ii) Distributor
shall promptly pay the prices of the Products in full (without deduction or
set-off for any reason) in accordance with the payment terms set forth in MEL’s
invoice, and (iii) MEL shall have the right, in its sole discretion, to
discontinue supplying Products to Distributor at any time, without notice to
Distributor.

 

g.             Distributor’s
Obligations After Notice of Termination.

 

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

 

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

 

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

 

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

 

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

 

c.             Not
less than sixty (60) days before the end of the then-current Contract Year, MEL
and Distributor shall mutually agree, in writing, on the minimum distribution
levels to be achieved and maintained by Distributor for the Products throughout
the next Contract Year (the “Minimum Distribution Levels”).  Should the 

 

12

 

parties have failed, for
whatsoever reason, to mutually agree upon the Minimum Distribution Levels to be
achieved and maintained by Distributor for the Products throughout the next
Contract Year, the same shall be determined by reference to the process
described in Section 13.d below. 
The parties shall perform all of their respective obligations under this
Section except that Distributor shall not be obligated to achieve and
maintain the Minimum Distribution Levels until the expiration of the six (6) month
period immediately following the Effective Date of this Agreement.

 

d.             MEL
and Distributor shall also agree in writing to performance targets to be
achieved and maintained by Distributor for the forthcoming calendar year of
this Agreement (collectively, the “Performance Targets”).  The Performance Target for the 2009 calendar
year will be to integrate Products into the Distributor’s distribution system
and within a reasonable time to improve the distribution levels and quality
thereof and extent of SKU’s in distribution in all Distributor’s Accounts
within the Territory above existing levels at the commencement of this
Agreement and to meet the other Performance Targets that will be mutually
agreed by the parties.  In years
subsequent to 2009 Performance Targets shall consist of executional measures
such as distribution levels, quality of distribution, extent of SKU’s in
distribution, displays and shelf space and positioning on shelves and in
coolers, as mutually agreed. For the avoidance of doubt, neither Minimum
Distribution Levels nor Performance Targets will include volume requirements.

 

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

 

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

 

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

 

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

 

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

 

f.              The
parties agree to periodically meet in order to discuss performance of the
lowest selling SKU/s of Products and to delete from distribution in the
Territory any SKU/s the parties mutually agree in writing, provided that MEL
will not unreasonably withhold its approval to the deletion of any applicable
SKU/s. MEL may withhold its approval to deletion of any SKU/s if any applicable
SKU/s has/have sufficient sales velocity or is or are capable of delivering
sufficient sales velocity in any one or more of Distributor’s Accounts or any
one or more regions or countries, as the case may be, to make such SKU/s
economically viable to continue in distribution in such one or more of
Distributor’s Accounts or in any one or more regions or countries, as the case
may be. 

 

13

 

Notwithstanding the
foregoing, unless mutually agreed in writing, in no event shall more than ***
percent *** of the total
number of SKU’s, rounded down to the nearest whole number (unless *** percent *** of the total number of SKU’s is less than one (1) but more than *** in which case the number will be rounded up
to ***), be deleted from
distribution in any rolling twelve (12) month period.

 

g.             Promotional
activities shall be regulated as follows:

 

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

 

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

 

14.           Distribution Accounts and MOLOP Accounts.

 

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

 

b.              “MOLOP Accounts” shall mean (i) any
account/s having at least ten (10) outlets and that is/are licensed by
applicable governmental authorities to sell alcoholic beverages for on-premise
consumption, and/or (ii) any trophy or prestige account/s that is/are
licensed to sell alcoholic beverages for on-premise consumption.  The
parties recognize that it is in their respective interests to work together to
formulate the approach to be followed by them jointly or separately with
various customers and/or channels of trade, including MOLOP Accounts, from time
to time, both to take advantage of a coordinated approach and to avoid the
negative impact of a lack of coordination. MEL and Distributor therefore agree
that an aligned customer/channel approach is a key part of each Annual Business
Plan and that they will engage in regular communication to adopt such plans as
well as to deal with further opportunities that may arise from time to time
during each calendar year, so as to avoid either party acting in an
uncoordinated way towards customers. 
Subject to Section 14.a. above, if MEL deems it desirable for Products
to be sold to any MOLOP Account, MEL shall be entitled, in its discretion, to
make arrangements directly with such MOLOP Account including the terms of sale
of Products to the MOLOP Account and the prices therefore, which shall take
into account the prices and funding then offered by Distributor and its
sub-distributors to MOLOP Accounts and similar categories of customers, in the
Territory.  MEL shall use commercially reasonable efforts to arrange for
all outlets of any such MOLOP Account within the Territory to be serviced by
Distributor and/or its sub-distributors and for delivery of the Products and
other arrangements with regard thereto, to be made directly by Distributor and
its sub-distributors or their warehouse system.  Notwithstanding the foregoing,
should the MOLOP Account concerned not agree to its outlets within the
Territory being serviced by Distributor or should Distributor 

 

	
  ***

  	
   

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

  

 

14

 

elect not to
service such outlets, MEL shall be entitled to service the outlets
directly.  In the event MEL services the outlets directly, MEL shall bear
sole liability and responsibility related to such Account and MEL shall pay to
Distributor during the remaining term of this Agreement an amount equal to ***
percent *** of Distributor’s average gross profit per case per Product line
sold to and calculated with respect to MOLOP Accounts in the channel in
question but otherwise in accordance with the provisions of Section 12.a.(i)(A)
above for each one of the Product lines sold by MEL to the outlets concerned,
within a reasonable time after receipt by MEL of all information necessary for
the computation of the amount due under this Section 14, but in no event
more frequently than twice per calendar year. For the purposes of this Agreement, the number of
cases of Products sold by MEL to the outlets during any period shall be
determined by multiplying the total number of cases of Products sold by MEL
directly to such MOLOP Account or regional division of such MOLOP Account, as
the case may be, during the period concerned, by a fraction, the numerator of
which shall be the number of outlets within the Territory and the denominator
of which shall be the total number of outlets that the MOLOP Account has
anywhere in the world participating in the applicable program.

 

15.           Exclusion of Damages.

 

a.             EXCEPT
FOR DAMAGES DIRECTLY RESULTING FROM INDEMNITY OBLIGATIONS PROVIDED IN SECTION 19,
WITHOUT IN ANY WAY DETRACTING FROM OR LIMITING THE PROVISIONS OF SECTIONS 12.d.
or 12.e.(iii) ABOVE AND, IN ADDITION THERETO, NEITHER PARTY SHALL BE
LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF GOODWILL,
BUSINESS INTERRUPTION, LOSS OF BUSINESS OPPORTUNITY, OR ANY OTHER PECUNIARY
LOSS) SUFFERED BY THE OTHER RELATED TO OR ARISING OUT OF THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND/OR THE USE OF OR INABILITY TO
USE OR SELL THE PRODUCTS, AND/OR FROM ANY OTHER CAUSE WHATSOEVER, EVEN IF IT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

b.             EACH
AND EVERY PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF
LIABILITY OR WARRANTIES, DISCLAIMER, OR EXCLUSION OF DAMAGES, IS EXPRESSLY
INTENDED TO BE SEVERABLE AND INDEPENDENT FROM ANY OTHER PROVISION, SINCE THOSE
PROVISIONS REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE PARTIES,
AND SHALL BE SEPARATELY ENFORCED.

 

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

 

17.           MEL’s Representation.

 

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

 

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

 

	
  ***

  	
   

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

  

 

15

 

regulation or order in the Territory in which
the Products will be sold by the Distributor and which are applicable to the
Products.

 

c.             MEL
warrants that all Products shall be merchantable.

 

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

 

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

 

19.           Indemnification.

 

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

 

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

 

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

 

16

 

action, suit or proceeding,
Indemnified Party may defend such action, suit or proceeding using counsel
selected by Indemnified Party, and the Indemnifying Party shall reimburse
Indemnified Party for any resulting loss, damages, costs, charges, attorney’s
fees, and other expenses and the related costs of defending such action, suit
or proceeding.

 

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

 

20.           Insurance.  During
the term of this Agreement and for a period of two (2) years thereafter, MEL
and Distributor agree to maintain policies of insurance of the nature and
amounts specified below, which shall provide the other party as an additional
insured (providing for a waiver of subrogation rights and endeavoring to
provide for not less than thirty (30) days written notice of any modification
or termination of coverage), and each party shall provide to the other party
with a certificate of insurance evidencing such insurance, in a form
satisfactory to such party:

 

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

 

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

 

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

 

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

 

21.           Competing Products. 
During the term of this Agreement, Distributor shall not market, sell or
distribute in the Territory Energy Drink/s (the “Competing Products”), or
product/s likely to be confused with, any of the Products, except that
Distributor may market, sell and distribute in the Territory Competing Products
that ***.  “Existing Affiliate” means any
person that is an affiliate of KO on the Effective Date.

 

	
  ***

  	
   

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

  

 

17

 

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

 

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

 

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

 

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

 

26.           Arbitration. 
Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach or termination hereof shall be settled by binding
arbitration conducted by JAMS/Endispute (“JAMS”) in accordance with JAMS
Comprehensive Arbitration Rules and Procedures (the “Rules”).  The arbitration shall be heard by one
arbitrator to be selected in accordance with the Rules, in Orange County,
California.  Judgment upon any award
rendered may be entered in any court having jurisdiction thereof.  Within seven (7) calendar days after
appointment the arbitrator shall set the hearing date, which shall be within
ninety (90) days after the filing date of the demand for arbitration unless a
later date is required for good cause shown and shall order a mutual exchange
of what he/she determines to be relevant documents and the dates thereafter for
the taking of up to a maximum of five (5) depositions by each party to
last no more than five (5) days in aggregate for each party.  Both parties waive the right, if any, to
obtain any award for exemplary or punitive damages or any other amount for the
purpose or imposing a penalty from the other in any arbitration or judicial
proceeding or other adjudication arising out of or with respect to this Agreement,
or any breach hereof, including any claim that said Agreement, or any part
hereof, is invalid, illegal or otherwise voidable or void.  In addition to all other relief, the
arbitrator shall have the power to award reasonable attorneys’ fees and costs
to the prevailing party.  The arbitrator
shall make his or her award no later than seven (7) calendar days after
the close of evidence or the submission of final briefs, whichever occurs
later.  The decision of the arbitrator
shall be final and conclusive upon all parties. 
Notwithstanding anything to the contrary, if either party desires to
seek injunctive or other equitable relief that does not involve the payment of
money, then those claims shall be brought in a state or federal court located
in Orange County, California, and the parties hereby irrevocably and
unconditionally consent to personal jurisdiction of such courts and venue in
Orange County, California in any such action for injunctive relief or equitable
relief.

 

27.           Force Majeure.

 

a.             Neither party shall be liable for any
delays in delivery or failure to perform or other loss due directly or
indirectly to unforeseen circumstances or causes beyond such party’s reasonable
control (each, individually, a “Force Majeure Event”), including, without
limitation: (a) acts of God, act (including failure to act) of any
governmental authority (de jure or de facto), wars (declared or undeclared),
governmental priorities, port congestion, riots, revolutions, strikes or other
labor disputes, fires, floods, sabotage, nuclear incidents, earthquakes,
storms, epidemics; or (b) inability to timely obtain either necessary and
proper labor, materials, ingredients, components, facilities, production
facilities, energy, fuel, transportation, governmental authorizations or instructions,
material or 

 

18

 

information. The foregoing shall apply even
though any Force Majeure Event occurs after such party’s performance of its
obligations is delayed for other causes but only during the period of the
applicable Force Majeure Event.

 

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

 

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

 

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

 

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

 

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

 

32.           Partial Invalidity. 
Each provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law.  If any
provision of this Agreement or the application of the provision to any person
or circumstance will, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or the application of the provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
will not be affected by such invalidity or unenforceability, unless the
provision or its application is essential to this Agreement.  The parties shall replace any invalid and/or
unenforceable provision with a valid and enforceable provision that most
closely meets the aims and objectives of the invalid and/or unenforceable
provision.

 

33.           Third-Party Beneficiaries. 
Nothing in this Agreement, express or implied, is intended or shall be
construed to give any person or entity, other than the parties to this
Agreement and their successors and permitted assigns, any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision
contained in this Agreement.

 

34.           Sales Information
and Books and Records; Examination. 
Not later than thirty (30) days after the end of each calendar month
Distributor shall deliver to MEL full, complete and accurate written details,
separately in respect of each country within the Territory, of the following
with respect to Distributor’s sale of Products in the 

 

19

 

Territory: (a) total sales, (b) taxes
and/or duties, (c) discounts and sales allowances paid, accrued or
credited, (d) Products returned during such period, (e) other
permitted allowances, rebates, and allowance programs granted, paid, payable,
reimbursed, credited or incurred by Distributor, and (f) other records
containing data in sufficient detail reasonably necessary to determine all
amounts payable to or reimbursable by MEL under this Agreement (collectively,
the “Records”).  Distributor shall keep
and maintain complete and true books and other records containing data in
sufficient detail reasonably necessary to determine all amounts payable to or
reimbursable by MEL under this Agreement. 
MEL shall have the right, at its own expense, on sixty (60) days prior
written notice to have such books and records and the Records (and all
reasonably related work papers and other reasonable information and documents
necessary for any determination under this Agreement or other related
agreements) kept by Distributor examined once per Calendar Quarter by a public
accounting firm appointed by MEL to verify the completeness and accuracy of the
Records.

 

35.           Ethical Standards.

 

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

 

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

 

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

 

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

 

If to HBC and MEL:

 

	
   

  	
  Tauranga
  Ltd.

  
	
   

  	
  c/o
  Mason Hayes & Curran

  
	
   

  	
  South
  Bank House, Barrow Street, Dublin 4, Ireland

  
	
   

  	
  Attention:
  Tony Burke

  
	
   

  	
  Telecopy:
  +353-1-614-5001

  
	
   

  	
   

  
	
   

  	
  Hansen
  Beverage Company

  
	
   

  	
  550 Monica Circle, Suite 201

  
	
   

  	
  Corona, California 92880

  
	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
  Telecopy:
  (951) 739-6210

  

 

20

 

	
            with
  a copy to:

  
	
   

  	
   

  
	
   

  	
  Solomon Ward
  Seidenwurm & Smith LLP

  
	
   

  	
  401 B Street,
  Suite 1200

  
	
   

  	
  San Diego, California
  92101

  
	
   

  	
  Attention: Norman L.
  Smith, Esq.

  
	
   

  	
  Telecopy: (619) 231-4755

  
	
   

  	
   

  
	
  If to Distributor:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopy: 

  
	
   

  	
   

  
	
            with
  a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopy:

  

 

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

 

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

 

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

 

40.           Confidentiality. 
During the Term, each party shall maintain in strict confidence all
commercial information disclosed by the other party (which obligations shall
expressly survive termination of this Agreement for any reason); provided
however that such commercial information shall not include any information
which (a) is in the public domain except through any intentional or
negligent act or omission of the non-disclosing party (or any agent, employee,
shareholder, director, officer, or independent contractor of or retained by
such other party or any of its affiliates, (b) can be shown by clear and
convincing tangible evidence to have been in the possession of the
non-disclosing party prior to disclosure by the disclosing party, (c) is
legally and properly provided to the non-disclosing party without restriction
by an independent third party that is under no obligation of confidentiality to
the disclosing party and that did not obtain such information in any illegal or
improper manner or otherwise in violation of any agreement with the disclosing
party, (d) is disclosed without any restrictions of any kind by the
disclosing party to third parties on a regular basis without any measures being
taken, whether explicitly or implicitly, by the disclosing party to protect the
confidentiality of such information, or (e) is independently generated by
any employee or independent contractor of or retained by the non-disclosing
party, and such employee or independent contractor has no knowledge of any of
such commercial information.

 

21

 

(Signature page/s follows.)

 

22

 

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

 

	
  TAURANGA
  LTD

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:
  Rodney Sacks

  	
   

  	
  Name:

  	
   

  
	
  Its:
  Chairman

  	
   

  	
  Its:

  	
   

  
							

 

23

 

EXHIBIT A

[form of]  Monster Energy
International Distribution Agreement

 

INITIAL
PRODUCT LIST

 

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER LO CARB

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER RIPPER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER EXPORT

  	
   

  	
  X

  	
   

  

 

24

 

EXHIBIT B 

[form of] Monster Energy International
Distribution Agreement

 

THE
TERRITORY

 

 

EXHIBIT C 

[form of] Monster Energy International
Distribution Agreement

 

THE
ACCOUNTS

 

	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive***,****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive***,****

  	
   

  	
  Accounts

  Reserved for MEL***,****

  
	
  Convenience
  Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain
  Convenience Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deli’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Independent
  Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mass
  Merchandisers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Drug Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schools

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hospitals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Health Food
  Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  ***

  	
   

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

  
	
  ****

  	
   

  	
  Delineations
  of exclusivity for accounts have been redacted.

  

 

 

	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive***,****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive***,****

  	
   

  	
  Accounts

  Reserved for MEL***,****

  
	
  Alcoholic
  Lic. On-Premise*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Club Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vending

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other
  accounts not falling within the descriptions listed above.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

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

 

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

 

	
   

  	
  MEL Initials:

  	
   

  
	
   

  	
  Distributor Initials:

  	
   

  

 

 

EXHIBIT
D 

[form of] Monster Energy International
Distribution Agreement

 

THE TRADEMARKS

 

HANSEN’S

 

HANSEN’S NATURAL

 

MONSTER ENERGY

 

MONSTER

 

 MONSTER

 MONSTER ENERGY

 

UNLEASH THE BEAST

 

MONSTER LO CARB

 

MONSTER RIPPER

 

MONSTER EXPORT

 

 

EXHIBIT A1

Monster
Energy International Distribution Coordination Agreement

 

See
Monster Energy International Distribution Agreement, filed as Exhibit 10.5
to the Hansen Natural Corporation Form 10-Q filed on November 10,
2008.

 

 

EXHIBIT A2

Monster
Energy International Distribution Coordination Agreement

 

See
Monster Energy Belgian Distribution Agreement, filed as Exhibit 10.6 to
the Hansen Natural Corporation Form 10-Q filed on November 10, 2008.

 

 

EXHIBIT B

Monster
Energy International Distribution Coordination Agreement

 

TERRITORY

 

The world, excluding the
United States and Canada.

 

 

EXHIBIT C

Monster
Energy International Distribution Coordination Agreement

 

INITIAL PRODUCT LIST

 

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER LO CARB

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER RIPPER

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MONSTER EXPORT

  	
   

  	
  X

  	
   

  

 

 

EXHIBIT D

Monster Energy International Distribution
Coordination Agreement

 

4.2.2        The
Parties acknowledge that it is their mutual present intention that Hansen will
not grant any distribution rights regarding the Products *** in the Territory without informing KO.  Notwithstanding anything to the contrary set
forth in this Section 4.2.2, this provision will not be enforceable by or
against either of the Parties, and neither Party shall be entitled to make any
claim for breach against the other or enforce any remedy under this Agreement
or terminate this Agreement as a result of non-compliance or a violation of the
preceding sentence. This provision shall not be construed as granting to or
conferring upon KO or any of its Affiliates (as defined below) any express or
implied right of refusal, option or other rights with respect to any territory,
other than as expressly set forth in this Agreement.

 

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

 

 

EXHIBIT E

Monster Energy International Distribution Coordination Agreement

 

8.             Competitive
Product/s.

 

8.1.          The following definitions apply solely to this Section 8 and Section 13.1.

 

a.             “Competitive Product/s” means any Energy
Drink/s, except Energy Drinks ***.

 

b.             “Competitive Territory” shall mean the
territory collectively covered by all Distribution Agreement/s with KO/MEL
Distributors in the Territory that are in effect on the date any particular
event that is alleged to violate this Section 8 occurs.

 

c.             “Existing Affiliate” means any Person that is
an Affiliate of KO (as defined in Section 12.1.1 below) on the Effective
Date.

 

8.2.          KO shall not actively seek or solicit any customers for any of the
Competitive Product/s in the Competitive Territory/s.

 

8.3.          ***

 

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

 

 

EXHIBIT F

Monster Energy International Distribution Coordination Agreement

 

21.2.        KO’s
Representations and Warranties.  KO represents and warrants that it is KO’s
present intention that it will not market, promote or distribute *** in the
Territory without informing Hansen and/or MEL. 
Notwithstanding that fact, this provision will not be enforceable by or
against any of the Parties, and no Party shall be entitled to make any claim
for breach against another or enforce any remedy under this Agreement or
terminate this Agreement as a result of non-compliance or a violation of the
preceding sentence.  This provision shall
not be construed as granting to or conferring upon Hansen and/or MEL any
express or implied right of refusal, option or other rights with respect to any
Territory, other than as expressly set forth in this Agreement.

 

	
  ***

  	
   

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

  

 

 

EXHIBIT X

Monster
Energy International Distribution Coordination Agreement

 

1.1.          This Exhibit X
expresses the Parties’ mutual intentions as to the method by which KO and MEL
shall each share *** of the Net Proceeds. 
The Parties shall negotiate, in good faith, such additional terms and
conditions to be memorialized in one or more agreements to give full effect and
to implement such intentions, including the sale by KO to Mel of certain
strategic ingredients including, without limitation, *** (“Strategic Ingredients”).

 

1.2.          KO
shall earn its share of the Net Proceeds through the sale of Strategic
Ingredients (as defined above) to MEL. 
Strategic Ingredients include, but are not limited to, ***.

 

1.3.          Prices
of Strategic Ingredients charged by KO to MEL shall be set in accordance with
applicable law and be based on mutual agreement by KO and MEL ***.

 

1.4.          KO
and MEL agree to disclose to each other all relevant financial information
needed to determine the Net Proceeds so as to timely set Strategic Ingredients
prices.  The Parties shall keep and
maintain complete and accurate books and other records containing data in
sufficient detail reasonably necessary to determine Net Proceeds and the
allocation thereof to KO and MEL in accordance with Section 5 of this
Agreement.  Each Party shall have the
right, at its own expense, on sixty (60) days prior written notice, to have
such books and records (and all reasonably related work papers and other
reasonable information and documents necessary for any determination under Section 5)
kept by the other Party examined once per calendar quarter by a public
accounting firm appointed by the inspecting Party, to verify the completeness
and accuracy of such books and records.

 

1.5.          In
each calendar year, KO and MEL shall jointly determine on a quarterly basis (or
more or less often as KO and MEL may deem appropriate) whether such *** sharing of Net Proceeds has been achieved
and, to the extent it has not been achieved, shall take reasonable actions to
correct *** within thirty (30)
days of the determination of ***.  For example, if KO receives more than *** of the Net Proceeds through Strategic
Ingredients sales to MEL, the ***
will be corrected through an appropriate mechanism to be determined such as a
rebate on the price of Strategic Ingredients or by a compensating or offsetting
payment by KO in favor of MEL. 
Similarly, if KO receives less than *** of the Net Proceeds through Strategic Ingredients sales to MEL, the *** will be corrected through an appropriate
mechanism to be determined such as adjustment to the price of Strategic
Ingredients or by a compensating or offsetting payment by MEL in favor of
KO.  Neither Party shall receive more
than *** of the Net Proceeds,
whether by or through Strategic Ingredients sold by KO to MEL, rebates,
compensating payments or otherwise.

 

1.6.          Prior to March 1 of each year, KO and
MEL shall jointly review and agree to the total amount of the Net Proceeds for
the prior calendar year and the method of allocation thereof between them.  Any disagreement shall be referred to the
Group Financial Officer of KO and the Financial Officer of MEL or their
respective designees to attempt resolution of any differences.  If  such attempt at resolution does not
provide resolution within thirty (30) days of submission by either Party, then
the dispute shall be adjudicated by arbitration in accordance with Section 24
of this Agreement.

 

1.7.          Not less than sixty
(60) days before the end of each calendar year, KO and MEL agree to jointly
develop a forecast of Net Proceeds for the subsequent year.

 

	
  ***

  	
   

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

  

 

 

EXHIBIT Z1  

Monster Energy International Distribution Coordination Agreement

 

MEL’S GLOBAL BRANDING
AND MARKETING ALLOWANCE

 

“MEL’s Global Branding and Marketing
Allowance” shall be set as a percentage of the  Distributor Dead Net Net Sales Income
(DN NSI) for each country as indicated below. 
These percentages may change if agreed to in writing between MEL and KO.

 

In CCE’s European
territories listed below, MEL’s Global Branding and Marketing Allowance as a
percentage of DN NSI ***.

 

In non-CCE territories around the world, MEL’s
Global Branding and Marketing Allowance as a percentage of DN NSI shall be set
based on mutual agreement between KO and MEL.

 

	
  Country

  	
   

  	
  Percentage of DN NSI

  
	
   

  	
   

  	
   

  
	
  Great
  Britain, Isle of Man

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  France
  and Monaco

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Belgium,
  The Netherlands, and Luxembourg

  	
   

  	
  ***

  

 

	
  ***

  	
   

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

  

 

 

EXHIBIT Z2

Monster Energy International Distribution Coordination Agreement

 

NET PROCEEDS LINE ITEM DEFINITION – EXAMPLE

 

Assumption: Volume = ***
Cases 

 

	
   

  	
   

  	
  Per Physical

  Case Amount

  (Illustrative)

  	
   

  	
  Total

  Amount

  (Illustrative)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gross Sales

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CMAs (Customer Marketing
  Allowances) and Trade Spending

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dead Net Net Sales Income (DN
  NSI)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost of Sales

  	
   

  	
   

  	
   

  	
   

  
	
  Blend

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Cans

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Sugar

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Secondary
  Pkg

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Haulage

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Packing
  Fees

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Total

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MEL’s Global Branding and
  Marketing Allowance

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *** for this example ***

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Point of Sale

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KO/MEL Distributor’s Gross
  Fee

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Proceeds

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KO
  Portion of Net Proceeds =*** *

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEL
  Portion of Net Proceeds = ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

*Note:  KO Net Proceeds
paid/satisfied through Strategic Ingredients sales to MEL.

 

	
  ***

  	
   

  	
  Portions hereof have
  been omitted and filed separately with the Securities and Exchange Commission
  pursuant to a request for confidential treatment in accordance with
  Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Exhibit 10.3

 

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

 

MONSTER
ENERGY

DISTRIBUTION AGREEMENT

 

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

 

1.             Recitals and Definitions.

 

a.             Distributor is a leading producer and
distributor of beverages throughout the world and has substantial experience in
the distribution of beverages. 
Distributor has developed and implemented successful marketing plans
and/or systems for such distribution and which are substantially associated
with the trademarks and trade name of The Coca-Cola Company (“KO”).  KO has designated Distributor, and HBC wishes
to appoint Distributor, as a distributor of Products (as defined below) as part
of Distributor’s business operations and systems, with performance to commence
as of November 10, 2008, or such other date as may be mutually agreed by
the parties in writing, but which in no event shall be later than November 30,
2008 (the “Commencement Date”).

 

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

 

2.             Appointment.

 

a.             With effect from the Commencement Date,
HBC appoints Distributor, and Distributor accepts appointment, as a distributor
of Products only to Distributor’s Accounts within the Territory.  Such appointment shall only be exclusive if
and to the extent so designated on Exhibit C hereto.

 

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

 

 

Such appointment shall exclude any SKU/s
deleted from distribution pursuant to Sections 13.b. or 13.f. below.  Unless otherwise agreed in writing by HBC,
Distributor specifically covenants not to sell, market, distribute, assign or
otherwise transfer (collectively, “Transfer”) in any manner any Products except
to the Distributor’s Accounts which are set forth on Exhibit C,
within the Territory.  Distributor shall
be entitled to appoint sub-distributors within the Territory provided that the
terms of such appointments shall not be inconsistent with the terms and
conditions of this Agreement and shall be subject to HBC’s rights hereunder.
HBC acknowledges that Distributor intends to appoint certain sub-distributors
with respect to certain specified portions of the Territory, all as identified
on Exhibit B-1 hereto. Distributor’s appointment of
sub-distributors, other than the sub-distributors identified on Exhibit B-1
as of the Effective Date, shall be to supplement and augment but not to replace
or substitute, wholly or partially, any of Distributor’s obligations or any of
Distributor’s resources, performance capabilities and/or ability to fully
perform all of Distributor’s obligations under this Agreement, including
without limitation, as provided in Section 3 below, in the Territory.  Distributor will remain liable for the
actions, omissions and performance of all of Distributor’s sub-distributors.

 

b.             Distributor hereby agrees not to Transfer
any Products, either directly or indirectly, to any other persons and/or
entities located outside the Territory nor to any persons and/or entities
within the Territory for Transfer, or to persons or entities with regard to
whom Distributor has knowledge or reasonable belief will distribute and/or sell
the Products outside of the Territory, except that, subject to all of the terms
and conditions of this Agreement, Distributor may Transfer Products to other
bottlers or distributors designated by KO that are authorized in writing by HBC
for Transfer into such distributor’s or bottler’s territory.

 

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

 

d.             Distributor has agreed to acquire certain
distribution rights held by prior HBC distributors (“Prior Distributor Rights”)
for the Territory by paying an amount which Distributor and HBC have agreed
shall be calculated in accordance with the formula set forth in Exhibit E
hereto.  As soon as practicable after the
Effective Date, HBC shall calculate the estimated amount payable by Distributor
in accordance with the formula agreed to between Distributor and HBC as set
forth in Exhibit E hereto, which shall be calculated based upon the
estimated Sale Volume (as defined below) for the Territory for the period ended
October 31, 2008 (the “Estimated Buy-Out Contribution”).  No later than fifteen (15) days prior to the
Commencement Date, Distributor shall deliver to HBC an irrevocable stand-by
letter of credit (“LOC”) in favor of HBC in an amount equal to the Estimated
Buy-Out Contribution.  The LOC shall be
issued by a bank acceptable to HBC, shall be in a form and substance acceptable
to HBC, and shall otherwise be in the form of attached

 

2

 

Exhibit H.  As soon
as practicable after October 31, 2008, HBC shall determine the actual Sale
Volume for the Territory for the period ended October 31, 2008 in order to
calculate the final amount due by Distributor in accordance with the formula
set forth in Exhibit E (the “Final Buy-Out Contribution”).  As soon as practicable after Distributor’s
receipt of the amount of the Final Buy-Out Contribution, the parties shall
cause the available amount of the LOC to be increased or decreased, as the case
may be, to equal the amount of the Final Buy-Out Contribution.  From time to time, as and when HBC determines
the various applicable amounts due by HBC to acquire the Prior Distribution
Rights, HBC may give one or more written notice/s (the “Payment Notice/s”) to
Distributor specifying the amount/s to be paid by Distributor to HBC from time
to time.  The aggregate amount due under
all Payment Notices shall not exceed the Estimated Buy-Out Contribution
initially, and then the Final Buy-Out Contribution, when that amount has been
determined.  If Distributor fails to pay
HBC the amount set forth in any Payment Notice/s within seven (7) business
days after delivery of such Payment Notice/s to Distributor, HBC shall be
entitled to draw under the LOC the amount/s set forth in the Payment Notice/s,
without prejudice to any other rights and remedies that HBC may have under this
Agreement or at law.  All Payment Notices
shall be sent to the address set forth in Section 36. Distributor shall be
and remain obligated to pay to HBC any shortfall between the Final Buy-Out
Contribution and the aggregate amount received by HBC under the LOC and all
Payment Notices.  Distributor, with the
commercially reasonable cooperation of HBC, may, from time to time, cause the
available amount of the LOC to be reduced to the extent of payments made by
Distributor to HBC pursuant to the Payment Notices, and may cause the
cancellation of the LOC at such time that the aggregate of such payments made
by the Distributor, plus any amounts drawn under the LOC under this Section,
equal the Final Buy-Out Contribution. 
The parties acknowledge and agree that in determining the Final Buy-Out
Contribution it will be necessary for HBC to make allocations and estimates of
the Sales Volumes of the Products in certain portions of the Territory based
upon such information as may be made available to it by prior HBC
distributors.  HBC agrees that in making
any such allocations or estimates it shall be required to and shall act
reasonably and in good faith. HBC shall provide to Distributor copies of the
written records relied upon by HBC to reasonably allocate, estimate and
determine the Final Buy-Out Contribution, for review by Distributor, and
Distributor hereby agrees to maintain such information and records in strict
confidence.  The Final Buy-Out
Contribution paid by Distributor to HBC shall be used by HBC to acquire or
terminate the Prior Distributor Rights (including without limitation, any
payments due to Anheuser-Busch, Inc.) and any shortfall necessary to
accomplish that goal shall be borne by HBC and any excess shall be paid to
and/or retained by HBC.  “Sale Volume”
means the aggregate number of cases of Products sold and to be sold by any
prior distributors and to be sold by Distributor in the Territory or referenced
portion thereof during the twelve (12) month period ended on a referenced
date.  For the avoidance of doubt, HBC
shall acquire, terminate or replace the Prior Distributor Rights and bear the
deficiency, if any, between the amount of the Final Buy-Out Contribution and
the cost of acquiring or terminating the Prior Distributor Rights, whether or
not the Final Buy-Out Contribution is sufficient.  

 

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

 

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

 

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

 

3

 

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

 

3.             Distributor’s Duties. 
Distributor shall:

 

a.             Use commercially reasonable good faith
efforts to aggressively promote, solicit and push vigorously the wide
distribution and sale of the Products to Distributor’s Accounts in the
Territory (except to accounts reserved for HBC pursuant to Exhibit C
and those National Accounts (as defined below) that are serviced directly by
HBC in accordance with Section 14). 
Distributor shall allocate and devote thereto at least such resources
and efforts as are proportional to the volume that Distributor’s sales of
Products in the Territory represent to the volume of Distributor’s sales of the
principal (Flagship) brand of Energy Drinks (including energy colas) of KO,
Distributor and their respective affiliates from time to time in the
Territory.  Without detracting from the
foregoing, the resources and efforts that Distributor shall allocate and devote
to the promotion, marketing and distribution of the Products shall in no event
be less than the resources and efforts Distributor allocates and devotes to the
promotion, marketing and distribution of all Energy Drinks (including energy
colas) of Distributor, KO, and their respective affiliates, unless to do so
(with respect to Distributor’s obligations under this sentence) would not be
commercially feasible based on the then-current sales volumes of the Products;

 

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

 

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

 

d.             Secure extensive in-store merchandising
and optimal shelf positioning in Distributor’s Accounts in the Territory with
respect to Products, except for those National Accounts serviced directly by
HBC in accordance with Section 14 below;

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

n.             Provide such sales and marketing
information as may be reasonably requested by HBC;

 

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

 

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

 

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

 

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

 

5.             Orders.  All
purchase orders for Products shall be transmitted in writing or electronically,
shall specify a reasonable date and time for delivery with a lead time of at
least ten (10) days and shall be subject to acceptance by HBC in HBC’s
reasonable discretion.  If HBC is unable
to accept an order for any reason, then HBC will use commercially reasonable
efforts to equitably allocate available Products to fill orders from its
distributors and customers, including Distributor.  In the event of any conflict or 

 

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

 

5

 

inconsistency between the terms of this
Agreement and any purchase order, the terms of this Agreement shall
govern.  All such purchase orders shall
be deemed acceptances of HBC’s offers to sell Products and shall limit
acceptance by Distributor to the terms and conditions thereof.

 

6.             Payment.

 

a.             Distributor shall promptly pay the prices
of Products in full (without deduction or set off for any reason) no later than
*** from date of invoice unless HBC otherwise agrees in writing.  Distributor and HBC shall use a mutually
agreeable method of electronic settlement of accounts that Distributor
reasonably approves which may include ACH or Xign, Distributor’s current
electronic invoice presentment system. 
If Distributor is delinquent in payment upon presentation of invoice and
remains delinquent for seven (7) days after written notice calling upon
Distributor to pay, Distributor shall reimburse HBC for any costs and expenses
incurred by HBC in collecting such delinquent amounts, including, without
limitation, legal fees and costs including fees of collection agencies, and
interest computed at the  ***
percent  *** per month or part thereof
from the due date(s) or the maximum legally permissible.

 

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

 

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

 

8.             Forecasts and Delivery.

 

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

 

b.             Unless otherwise
agreed in writing by the parties to this Agreement, the Products will be
tendered by HBC for delivery to Distributor in full truckload quantities of
particular Product lines and extensions but without combining different Product
lines in the same truckloads.  For the
avoidance of doubt, Monster and its extensions and Java Monster and its
extensions are different particular Product lines.  Subject to Distributor providing HBC
forecasts in accordance with Section 8.a. above, HBC agrees to (i) use
commercially reasonable good faith efforts to deliver Products to Distributor
within  ***, in the case of Monster and
Monster LoCarb Products sold in 24-pack/16 oz. cases, and within  *** in the case of all other Products, of HBC’s
receipt of purchase orders for Products in compliance with Sections 5 and 8.a.
above, and (ii) deliver Products to Distributor with at least  ***  

 

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

 

6

 

of shelf life remaining at the time of
delivery.  Notwithstanding the foregoing,
Distributor acknowledges that delivery dates set forth in purchase orders for
Products accepted by HBC are merely approximate and that HBC shall have no
liability for late deliveries, except only for fines, penalties and assessments
imposed by Distributor’s customers and actually paid by Distributor which arise
solely and directly as a result of HBC’s failure to comply with its obligations
under this Section 8.

 

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

 

9.             Trademarks.

 

a.             Distributor acknowledges HBC’s exclusive
right, title, and interest in and to the Trademarks and trade names, whether or
not registered, patents and patent applications (“Patents”), copyrights (“Copyrights”)
and trade secrets and know-how (“Know-How”) which HBC may have at any time
created, adopted, used, registered, or been issued in the United States of
America or in any other location in connection with HBC’s business or the
Products and Distributor shall not do, or cause or permit to be done, any acts
or things contesting or in any way impairing or tending to impair any portion
of HBC’s right, title, and interest in and to the Trademarks, trade names,
Patents, Copyrights, and Know-How.

 

b.             Distributor shall not use any trademark,
name, brand name, logo or other production designation or symbol in connection
with Products other than the Trademarks. 
Distributor acknowledges that it has no right or interest in the
Trademarks (except as expressly permitted hereunder) and that any use by Distributor
of the Trademarks will inure solely to HBC’s benefit.  Distributor may only use the Trademarks in
strict accordance with HBC’s policies and instructions, and HBC reserves the
right, from time to time and at any time, at its discretion, to modify such
policies and instructions then in effect.

 

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

 

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

 

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

 

f.              Upon the termination of this Agreement,
Distributor shall cease and desist from any use of the Trademarks and any
names, marks, logos or symbols similar thereto and the use of any Patents,
Copyrights and Know-How.

 

7

 

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

 

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

 

11.           Term.  Unless
terminated by either party pursuant to the terms of this Agreement, the initial
term of this Agreement shall commence on the Effective Date and shall end on
the twentieth (20th) anniversary of the Commencement Date (the “Initial Term”).  After the Initial Term, this Agreement shall,
subject to being terminated by either party pursuant to the terms of this
Agreement, continue and remain in effect, unless either party gives written
notice of non-renewal to the other party at least ninety (90) days prior to the
end of the Initial Term or any subsequent anniversary of the Commencement Date,
as the case may be (collectively, the “Term”). 
A “Contract Year” means any calendar year during the Term and the period
from the Commencement Date until the close of business on December 31st of
the calendar year in which the Commencement Date falls.

 

12.           Termination.

 

a.             Termination for Cause.

 

(i)            Termination By Either Party. 
Without prejudice to its other rights and remedies under this Agreement
and those rights and remedies otherwise available in equity or at law, either
party may terminate this Agreement on the occurrence of one or more of the
following:

 

(A)            Breach.  The
other party’s material breach of a provision of this Agreement and failure to
cure such breach within thirty (30) days after receiving written notice
describing such breach in reasonable detail from the non-breaching party;
provided, however, if such breach is of a nature that it can not reasonably be
cured within thirty (30) days, then the breaching party shall have an
additional thirty (30) day period to cure such breach, providing it immediately
commences, and thereafter diligently prosecutes, in good faith, its best
efforts to cure such breach.  In the
event that either HBC or

 

8

 

Distributor exercises its right to
terminate this Agreement in accordance with this Section 12.a.(i)(A), the
breaching party shall be obligated to pay to the other party a severance
payment (the “Breach Severance Payment”) in the amount calculated as
follows:  the Distributor’s “average
gross profit per case” (as defined below) multiplied by the number of cases of
Products sold by the Distributor during the most recently completed twelve (12)
month period ended on the last day of the month preceding the month in which
this Agreement is terminated.  The
Distributor’s “average gross profit per case” shall mean the Distributor’s
actual selling price less (i) promotion allowances, discounts, free cases
and allowance programs, and (ii) Distributor’s laid in cost of the
Products. The computation of the Distributor’s “average gross profit per case”
shall exclude the Facilitation Fee; provided that if this Agreement is
terminated by Distributor within three (3) years of the Effective Date as
a result of HBC’s breach, the severance payment shall be equal to the Breach
Severance Payment or the Final Buy-Out Contribution (as defined above),
whichever is greater.

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)           In the event of a Complete Termination or
Partial Product Termination, HBC or its successor, as the case may be, shall
pay to Distributor a severance payment calculated with respect to the Products
which are the subject of the termination (the “Product Severance Payment”),
calculated as follows: the Distributor’s “average gross profit per case” (as
defined above) per Product line multiplied by the number of cases of such
Products sold by Distributor during the most recently completed twelve (12)
month period ending on the last day of the month preceding the month in which
the Complete Termination, or

 

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

 

10

 

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

 

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

 

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

 

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

 

c.           Distributor Termination Without Cause and
Severance Payment.

 

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

 

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

 

11

 

(ii)           If Distributor exercises its right to
terminate this Agreement in accordance with Section 12.c.(i) above,
Distributor shall pay to HBC a severance payment (the “Distributor Severance
Payment”) in an amount equal to Distributor’s “average gross profit per case”
(as defined above) multiplied by the number of cases of Products sold by the
Distributor during the most recently completed twelve (12) month period ended
on the last day of the month preceding the month in which this Agreement is
terminated. The computation of the Distributor’s “average gross profit per case”
shall exclude the Facilitation Fee. If such notice is given by Distributor and
thereafter, prior to the  *** of the
Commencement Date, this Agreement is otherwise terminated as a result of Distributor’s
breach of this Agreement, including without limitation, arising from the
elimination of substantially all of HBC’s benefits under this Agreement by
Distributor or Distributor’s repudiation or abandonment of this Agreement
(collectively, a “Termination Breach”), within the two (2) year notice
period, then, without prejudice to any of HBC’s other rights and/or remedies,
the Distributor Severance Payment shall be 
***.  If after the  *** of the Commencement Date but prior to the  *** of the Commencement Date termination of
this Agreement occurs due to a Termination Breach within the two (2) year
notice period then, without prejudice to any of HBC’s other rights and/or
remedies, the Distributor Severance Payment shall be  ***. 
If, after  *** of the Commencement
Date termination of this Agreement occurs due to a Termination Breach within
the one (1) year notice period, then, without prejudice to any of HBC’s
other rights and/or remedies, the Distributor Severance Payment shall be  ***.

 

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

 

d.             Sole Remedy.

 

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

 

(ii)           The Breach Severance Payment and/or the
Distributor Severance Payment payable by Distributor to HBC pursuant to the
provisions of Section 12.a.(i)(A). and Section 12.c.(ii) above
respectively, if any, and HBC’s repurchase of Distributor’s inventory of
Products and advertising materials pursuant to Section 12.e.(iv) below,
or Distributor’s right to sell such inventory if not so repurchased by HBC,
shall constitute HBC’s sole and exclusive remedy for the termination or
non-renewal of this Agreement, including, without limitation, in the case of a
breach and shall be in lieu of all other claims that

 

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

 

12

 

HBC
may have against Distributor as a result thereof.  Without in any way detracting from or
limiting the provisions of Section 12.e.(iii) below and, in addition
thereto, under no circumstances shall Distributor be liable to HBC by reason of
the termination or non-renewal of this Agreement for compensation,
reimbursement or damages of whatsoever nature including, without limitation,
for (A) loss of prospective compensation or earnings, (B) goodwill or
loss thereof, or (C) expenditures, investments, leases or any type of
commitment made in connection with the business of HBC or in reliance on the
existence of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

f.              Continued Supply of Products After
Termination.  In the event HBC continues to supply Products
to Distributor for any reason following the termination of this Agreement,
Distributor acknowledges and agrees that any such action shall not constitute a
waiver of HBC’s rights under this

 

13

 

Agreement
or a reinstatement, renewal or continuation of the term of this Agreement.  HBC and Distributor agree that if HBC
continues to supply Products to Distributor following the termination of this
Agreement, (i) Distributor shall be prohibited from selling or otherwise
transferring Products except to Distributor’s Accounts within the Territory, (ii) Distributor
shall promptly pay the prices of the Products in full (without deduction or
set-off for any reason) in accordance with the payment terms set forth in HBC’s
invoice, and (iii) HBC shall have the right, in its sole discretion, to
discontinue supplying Products to Distributor at any time, without notice to
Distributor.

 

g.             Distributor’s Obligations After Notice of
Termination.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

d.             HBC and Distributor shall also agree to
performance targets to be achieved and maintained by Distributor for the
forthcoming calendar year of this Agreement (collectively, the “Performance
Targets”).  The Performance Target for
the 2008 calendar year will be to integrate Products into the Distributor
distribution system and within a reasonable time to improve the distribution
levels and quality thereof and extent of SKU’s in distribution in all
Distributor’s Accounts within the Territory above existing levels at the
commencement of this Agreement.  In years
subsequent to 2008 Performance Targets shall consist of executional measures
such as distribution levels, quality of distribution, extent of SKU’s in
distribution, displays and shelf space and positioning on shelves and in
coolers, as mutually agreed.  For the
avoidance of doubt, neither Minimum Distribution Levels nor Performance Targets
will include volume requirements.

 

If the parties
are unable to agree to the Performance Targets for any calendar year commencing
with the 2009 calendar year, prior to the commencement of each such calendar
year, then the Performance Targets for such year shall be as follows:

 

(i)            The Minimum Distribution Levels that
shall be required to be achieved and maintained on average during the year for
the Monster Energy brand shall be not less than the national average
distribution levels of the leading energy brand within the Territory measured
at the commencement of each applicable year, which shall be primarily
determined with reference to the Nielsen reports (Scantrack) or IRI (Infoscan)
or equivalent reports (the “Reports”). 
If the Monster Energy brand is, during such year, the leading energy
brand within the Territory, then such Minimum Distribution Levels shall at a
minimum be not less than the national average distribution levels of the second
leading energy brand within the Territory measured at the commencement of each applicable
year;

 

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

 

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

 

e.             The Minimum Distribution Levels for the
Products that shall be required to be achieved and maintained by Distributor
for the Products shall be reduced to the extent only that actual distribution
levels are eroded as a direct result of (A) HBC’s failure to deliver
Products in accordance with this Agreement or (B) HBC’s failure to obtain
the listing of a Product SKU in a retail chain for which HBC and Distributor
have agreed in writing that HBC is to be solely responsible, or (C) HBC’s
failure to contribute its agreed share of the parties funding obligation as set
forth in Exhibit G.

 

15

 

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

 

g.             Promotional activities shall be regulated
as follows:

 

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

 

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

 

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

 

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

 

14.           National Accounts. 
The provisions of this Section shall apply only to accounts that
have been assigned exclusively to Distributor in terms of Exhibit C
hereto.  Distributor agrees that should
HBC wish to supply Products to any National Account (as defined below), HBC shall
be entitled to make arrangements directly with such National Account and
establish the terms of sale of Products to such National Account and the prices
therefor, which shall take into account the prices then being offered by
Distributor and/or other distributors within whose territory the National
Account has outlets, to such National Account or similar categories of
customer.  “National Account” shall mean
a customer that sells at retail in more than fifty (50) stores and in multiple
states.  Should such National Account
have one or more outlets within the Territory (“Outlets”), and agree to Outlets
being serviced by Distributor, Distributor agrees to service the Outlets in
accordance with such arrangements and on the same terms and at the same prices
as HBC shall have agreed with the National Account concerned.  Notwithstanding the foregoing, Distributor
shall be entitled to elect not to service the Outlets by giving prompt written
notice of such election to HBC.  Should
the National Account not agree to the Outlets being serviced by Distributor or
should Distributor elect not to service the Outlets, HBC shall be entitled to
service the Outlets directly.  Both
Distributor and HBC agree to use reasonable commercial good faith efforts to
obtain the agreement of National Accounts to use DSD distribution with respect
to the National Accounts.  To the extent
HBC services the Outlets directly and to the extent that HBC makes a commitment
for funds or support in excess of what was agreed to by Distributor, any such
excess shall be borne by HBC.  In the
event HBC services the Outlets directly, HBC shall pay to Distributor, during
the remaining term of this Agreement, an amount equal to  *** percent

 

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

 

16

 

***
of the Distributor’s average gross profit per case per Product line, calculated
in accordance with the provisions of Section 12.a.(i)(A) above, for
each case of Products sold by HBC to the Outlets within a reasonable time after
receipt by HBC of all information necessary for the computation of the amount
due under this Section 14, but in no event more frequently than twice per
calendar year.  For the purposes of this
Agreement, the number of cases of Products sold by HBC to the Outlets during
any period shall be determined by multiplying the total number of cases of
Products sold by HBC directly to such National Account or regional division of
such National Account, as the case may be, during the period concerned, by a
fraction, the numerator of which shall be the number of Outlets within the
Territory and the denominator of which shall be the total number of Outlets
that the National Account has within the United States or within the regional
division of such customer, as the case may be. 
Distributor shall not be liable to pay the Facilitation Fee on HBC’s
direct sales to National Accounts.

 

15.           Exclusion of Damages.

 

a.             EXCEPT FOR DAMAGES DIRECTLY RESULTING
FROM INDEMNITY OBLIGATIONS PROVIDED IN SECTION 19, WITHOUT IN ANY WAY
DETRACTING FROM OR LIMITING THE PROVISIONS OF SECTIONS 12.d. or 12.e.(iii) ABOVE
AND, IN ADDITION THERETO, NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL,
INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR LOSS OF PROFITS, LOSS OF GOODWILL, BUSINESS INTERRUPTION, LOSS OF BUSINESS
OPPORTUNITY, OR ANY OTHER PECUNIARY LOSS) SUFFERED BY THE OTHER RELATED TO OR
ARISING OUT OF THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AND/OR THE USE OF OR INABILITY TO USE OR SELL THE PRODUCTS, AND/OR FROM ANY
OTHER CAUSE WHATSOEVER, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

 

b.             EACH AND EVERY PROVISION OF THIS
AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY OR WARRANTIES,
DISCLAIMER, OR EXCLUSION OF DAMAGES, IS EXPRESSLY INTENDED TO BE SEVERABLE AND
INDEPENDENT FROM ANY OTHER PROVISION, SINCE THOSE PROVISIONS REPRESENT SEPARATE
ELEMENTS OF RISK ALLOCATION BETWEEN THE PARTIES, AND SHALL BE SEPARATELY
ENFORCED.

 

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

 

17.           HBC’s Representations and Warranties.

 

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

 

b.             HBC warrants that all Products, all food
additives in the Products, or all substances for use in, with, or for the
Products, comprising each shipment or other delivery hereby made by HBC to, or
on the order of, Distributor are hereby guaranteed as of the date of such
shipment to be, on such date, not adulterated or misbranded within the meaning
of the Federal Food, Drug and Cosmetic Act, as amended, including the Food
Additives Amendment of 1958 (the “Act”) or within the meaning of any
substantially identical and applicable state food and drug law, if any, and are
not articles which may not under the provisions of Sections 404, 505, or 512 of
the Act, be introduced into interstate commerce.

 

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

 

17

 

c.             HBC warrants that all Products shall be
merchantable.

 

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

 

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

 

19.           Indemnification.

 

a.             Distributor shall indemnify, defend, and
hold harmless HBC and its officers, directors, agents, employees, shareholders,
legal representatives, successors and assigns, and each of them, from loss,
liability, costs, damages, or expenses from any and all claims, actions and
suits, instituted by any third party, whether groundless or otherwise, and from
and against any and all third party claims, liabilities, judgments, losses,
damages, costs, charges, attorney’s fees, and other expenses of every nature
and character arising from (i) the breach of Distributor’s express
representations and warranties under this Agreement by Distributor or its
agents, employees, subcontractors, sub-distributors or others acting on its
behalf, provided that HBC gives Distributor written notice of any indemnifiable
claim and HBC does not settle any claim without Distributor’s prior written
consent, or (ii) as set forth on attached Exhibit I which is
incorporated in this Section 19 by this reference.

 

b.             HBC shall indemnify, defend, and hold
harmless Distributor and its officers, directors, agents, employees,
shareholders, legal representatives, successors, assigns, and customers, and
each of them, from loss, liability, costs, damages, or expenses from any and
all claims, actions and suits instituted by any third party, whether groundless
or otherwise, and from and against any and all such third party claims,
liabilities, judgments, losses, damages, costs, charges, attorney’s fees, and
other expenses of every nature and character and all Distributor’s direct
documented costs to store, transport, test and destroy all unsellable Products
and advertising materials arising from (i) the breach of HBC’s express
representations and warranties under this Agreement or those of its agents,
employees, subcontractors or others acting on its behalf, (ii) any
impurity, adulteration, deterioration in or misbranding of any Products sold to
Distributor by HBC, (iii) any prior distributor of Products in the
Territory, (iv) any HBC marketing, advertising, promotion, labeling,
Global Branding and Marketing, and the Trademarks, Copyrights, Patents,
Know-How or other intellectual property relating to the Products, or (v) the
fact that  the Products (A) are not safe for
the purposes for which goods of that kind are normally used, (B) do not
comply with applicable health, safety, and environmental standards imposed in
the Territory, or (C) do not comply with the Safety Orders of the State of
California Division of Industrial Safety and Proposition 65; provided that
Distributor gives HBC written notice of any indemnifiable claim and Distributor
does not settle any claim without HBC’s prior written consent.

 

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

 

18

 

Indemnifying
Party shall reimburse Indemnified Party for any resulting loss, damages, costs,
charges, attorney’s fees, and other expenses and the related costs of defending
such action, suit or proceeding.

 

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

 

20.           Insurance.  During
the term of this Agreement and for a period of two (2) years thereafter,
HBC and Distributor agree to maintain policies of insurance of the nature and
amounts specified below, which shall provide the other party as an additional
insured (providing for a waiver of subrogation rights and endeavoring to
provide for not less than thirty (30) days written notice of any modification
or termination of coverage), and each party shall provide to the other party
with a certificate of insurance evidencing such insurance, in a form
satisfactory to such party:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25.           Governing Law. 
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California (without reference to its law of conflict
of laws).

 

26.           Arbitration. 
Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach or termination hereof shall be settled by binding
arbitration conducted by JAMS/Endispute (“JAMS”) in accordance with JAMS
Comprehensive Arbitration Rules and Procedures (the “Rules”).  The

 

19

 

arbitration
shall be heard by one arbitrator to be selected in accordance with the Rules,
in Orange County, California.  Judgment
upon any award rendered may be entered in any court having jurisdiction
thereof.  Within seven (7) calendar
days after appointment the arbitrator shall set the hearing date, which shall
be within ninety (90) days after the filing date of the demand for arbitration
unless a later date is required for good cause shown and shall order a mutual
exchange of what he/she determines to be relevant documents and the dates
thereafter for the taking of up to a maximum of five (5) depositions by
each party to last no more than five (5) days in aggregate for each
party.  Both parties waive the right, if
any, to obtain any award for exemplary or punitive damages or any other amount
for the purpose or imposing a penalty from the other in any arbitration or
judicial proceeding or other adjudication arising out of or with respect to
this Agreement, or any breach hereof, including any claim that said Agreement,
or any part hereof, is invalid, illegal or otherwise voidable or void.  In addition to all other relief, the
arbitrator shall have the power to award reasonable attorneys’ fees and costs
to the prevailing party.  The arbitrator
shall make his or her award no later than seven (7) calendar days after
the close of evidence or the submission of final briefs, whichever occurs
later.  The decision of the arbitrator
shall be final and conclusive upon all parties. 
Notwithstanding anything to the contrary, if either party desires to
seek injunctive or other equitable relief that does not involve the payment of
money, then those claims shall be brought in a state or federal court located
in Orange County, California, and the parties hereby irrevocably and unconditionally
consent to personal jurisdiction of such courts and venue in Orange County,
California in any such action for injunctive relief or equitable relief.

 

27.           Force Majeure.

 

a.             Neither party shall be liable for any
delays in delivery or failure to perform or other loss due directly or
indirectly to unforeseen circumstances or causes beyond such party’s reasonable
control (each, individually, a “Force Majeure Event”) including, without
limitation: (a) acts of God, act (including failure to act) of any governmental
authority (de jure or de facto), wars (declared or undeclared), governmental
priorities, port congestion, riots, revolutions, strikes or other labor
disputes, fires, floods, sabotage, nuclear incidents, earthquakes, storms,
epidemics; or (b) inability to timely obtain either necessary and proper
labor, materials, ingredients, components, facilities, production facilities,
energy, fuel, transportation, governmental authorizations or instructions,
material or information. The foregoing shall apply even though any Force
Majeure Event occurs after such party’s performance of its obligations is
delayed for other causes but only during the period of the applicable Force
Majeure Event.

 

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

 

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

 

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

 

30.           Product Recall.  If
any governmental agency or authority issues a recall or takes similar action in
connection with the Products, or if HBC determines that an event, incident or
circumstance has 

 

20

 

occurred which may require a recall or
market withdrawal, HBC shall advise Distributor of the circumstances by
telephone or facsimile.  HBC shall have
the right to control the arrangement of any Product recall, and Distributor
shall cooperate in the event of a Product recall with respect the reshipment,
storage or disposal of recalled Products, the preparation and maintenance of
relevant records and reports, and notification to any recipients or end
users.  HBC shall pay all reasonable
expenses incurred by Distributor of such a recall, including the costs of
destroying Products.  Distributor, shall
promptly refer to HBC for exclusive response to all customer or consumer
complaints involving the health, safety, quality, composition or packaging of
the Products, or which in any way could be detrimental to the image or
reputation of HBC or the Products, and shall notify HBC of any governmental,
customer or consumer inquiries regarding the Products about which Distributor
becomes aware.

 

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

 

32.           Severability. 
Each provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law.  If any
provision of this Agreement or the application of the provision to any person
or circumstance will, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or the application of the provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, will not be
affected by such invalidity or unenforceability, unless the provision or its
application is essential to this Agreement. 
The parties shall replace any invalid and/or unenforceable provision
with a valid and enforceable provision that most closely meets the aims and
objectives of the invalid and/or unenforceable provision.

 

33.           Provisions Required of a Federal
Contractor.  If reasonably required by Distributor, HBC
shall use its commercially reasonable best efforts to deliver to Distributor
such warranties and/or representations in the form that HBC has customarily
provided to governmental authorities and/or agencies to facilitate sales by
Distributor to Distributor’s Accounts requiring such warranties and/or
representations.  Such representations
shall be in favor of such governmental authorities and/or agencies and may
include one or more or all of the following topics:

 

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

 

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

 

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

 

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

 

If HBC fails to provide or comply with any
such warranty and/or representation in a timely fashion or at all, then such
failure shall not entitle Distributor to make any claim for breach or
termination of this Agreement

 

21

 

or
allow Distributor to enforce any remedy under this Agreement as a result of
non-compliance with or a violation of any such warranties or representations.

 

34.                                 Distributor Suppliers Guiding Principles.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

regulations and directives of the
Securities and Exchange Commission) and/or such party’s customary business
practices, or (b) engaging in oral discussions or oral or written
presentations with actual or prospective investors or analysts regarding the
subject matter of this Agreement, provided no confidential information is
disclosed.  If a party breaches this Section 35
it shall have a seven (7) day period in which to cure its breach after
written notice from the other party.  A
breach of this Section 35 shall not entitle a party to damages or to
terminate this Agreement.

 

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

 

If to HBC:

 

Hansen
Beverage Company

550 Monica Circle, Suite 201

Corona, California 92880

Attention:  Chief Executive Officer

Telecopy:  (951) 739-6210

 

with a copy to:

 

Solomon
Ward Seidenwurm & Smith LLP

401
B Street, Suite 1200

San
Diego, California  92101

Attention:  Norman L. Smith, Esq.

Telecopy:  (619) 231-4755

 

If to Distributor:

 

Coca-Cola
Enterprises Inc.

2500
Windy Ridge Parkway

Atlanta,
Georgia 30339

Attention:
Chief Financial Officer

Telecopy:  (770) 989-3784

 

For Payment Notices:

 

Coca-Cola
Enterprises Inc.

2500
Windy Ridge Parkway

Atlanta,
Georgia 30339

Attention:
Treasurer

Telecopy:  (770) 989-3061

 

with a copy to:

 

Coca-Cola
Enterprises Inc.

2500
Windy Ridge Parkway

Attention:
General Counsel

Telecopy:  (770) 989-3784

 

23

 

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

 

37.           Third-Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended or shall be construed to give any person or entity, other
than the parties to this Agreement and their successors and permitted assigns,
any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained in this Agreement.

 

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

 

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

 

40.           Confidentiality.  During the Term, each party shall maintain in
strict confidence all commercial information disclosed by the other party
(which obligation shall expressly survive termination of this Agreement for any
reason); provided however that such commercial information shall not include
any information which (a) is in the public domain except through any
intentional or negligent act or omission of the non-disclosing party (or any
agent, employee, shareholder, director, officer, or independent contractor of
or retained by such other party or any of its affiliates, (b) can be shown
by clear and convincing tangible evidence to have been in the possession of the
non-disclosing party prior to disclosure by the disclosing party, (c) is
legally and properly provided to the non-disclosing party without restriction
by an independent third party that is under no obligation of confidentiality to
the disclosing party and that did not obtain such information in any illegal or
improper manner or otherwise in violation of any agreement with the disclosing
party, (d) is disclosed without any restrictions of any kind by the
disclosing party to third parties on a regular basis without any measures being
taken, whether explicitly or implicitly, by the disclosing party to protect the
confidentiality of such information, or (e) is independently generated by
any employee or independent contractor of or retained by the non-disclosing
party, and such employee or independent contractor has no knowledge of any of
such commercial information.

 

(Signature page/s follows.)

 

24

 

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

 

	
  HANSEN
  BEVERAGE COMPANY

  	
  COCA-COLA
  ENTERPRISES INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Rodney Sacks

  	
   

  	
  By:

  	
  /s/
  William W. Douglass III

  
	
  Name:

  	
  Rodney
  Sacks

  	
   

  	
  Name:

  	
  William
  W. Douglass III

  
	
  Its:

  	
  Chairman

  	
   

  	
  Its:

  	
  EVP &
  Chief Financial Officer

  

 

25

 

EXHIBIT
A

Monster Energy Distribution Agreement

 

INITIAL
PRODUCT LIST

 

Category (All SKU’s)

 

	
  MONSTER

  	
   

  	
  x

  
	
   

  	
   

  	
   

  
	
  MONSTER ASSAULT

  	
  x

  	
   

  
	
   

  	
   

  	
   

  
	
  MONSTER BFC

  	
  x

  	
   

  
	
   

  	
   

  	
   

  
	
  MONSTER KHAOS

  	
   

  	
  x

  
	
   

  	
   

  	
   

  
	
  MONSTER LO CARB

  	
  x

  	
   

  
	
   

  	
   

  	
   

  
	
  MONSTER M80

  	
  x

  	
   

  
	
   

  	
   

  	
   

  
	
  MONSTER MIXXD

  	
   

  	
  x

  
	
   

  	
   

  	
   

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

  
	
  x

  

 

	
  MONSTER HITMAN ENERGY SHOOTER

  	
   

  	
  x

  
	
   

  	
   

  	
   

  
	
  MONSTER HEAVY METAL

  	
  x

  	
   

  
				

 

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

 

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

 

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

 

26

 

EXHIBIT
B 

Monster Energy Distribution Agreement

 

THE
TERRITORY

 

See attached maps.

 

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

 

***

 

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

 

27

 

EXHIBIT
B-1 

Monster Energy Distribution Agreement

 

SUB-DISTRIBUTORS

 

	
  Sub-Distributor

  	
   

  	
  Territory

  
	
  BCI
  Coca-Cola Bottling Company of Los Angeles

  	
   

  	
  California,
  Oregon, and Washington

  
	
  The
  Laredo Coca-Cola Bottling Company, Inc.

  	
   

  	
  The
  area around Laredo, Texas.

  
	
  Bryan
  Coca-Cola Bottling Company

  	
   

  	
  The
  area around Bryan, Texas.

  

 

28

 

EXHIBIT
C 

Monster Energy Distribution Agreement

 

THE
ACCOUNTS

 

	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive ***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive ***, ****

  	
   

  	
  Accounts

  Reserved for HBC ***, ****

  
	
  Convenience Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain Convenience Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deli’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Independent Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chain Grocery

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mass Merchandisers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Drug Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schools

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hospitals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Health Food Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

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

 

29

 

	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive ***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive ***, ****

  	
   

  	
  Accounts

  Reserved for HBC ***, ****

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alcoholic Lic. On-Premise*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trader Joe’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Club Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vending

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other accounts not falling within the
  descriptions listed above

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

	
   

  	
   

  	
  HBC Initials:

  	
   

  	
   

  
	
   

  	
   

  	
  Distributor Initials:

  	
   

  	
   

  

 

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

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

 

30

 

EXHIBIT D 

Monster Energy Distribution Agreement

 

THE
TRADEMARKS

 

HANSEN’S

 

HANSEN’S
NATURAL

 

MONSTER ENERGY

 

MONSTER

 

 

 MONSTER

 

 MONSTER ENERGY

 

MONSTER ASSAULT

 

MONSTER BFC

 

MONSTER KHAOS

 

MONSTER LO CARB

 

UNLEASH THE
BEAST

 

MONSTER M80

 

MONSTER MIXXD

 

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

 

MONSTER HITMAN
ENERGY SHOOTER

 

MONSTER HEAVY
METAL

 

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

 

RUMBA ENERGY JUICE

 

SAMBA ENERGY JUICE

 

TANGO ENERGY
JUICE

 

31

 

EXHIBIT
E  

Monster Energy Distribution Agreement

 

(Section 2.d)

 

ESTIMATED
BUY-OUT CONTRIBUTION

 

The
pre-agreed rate shall be  ***.

 

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

 

32

 

EXHIBIT F

Monster Energy Distribution Agreement

 

(Section 6.b.)

 

FACILITATION FEE

 

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

 

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

 

33

 

EXHIBIT G

Monster Energy Distribution Agreement

 

PROMOTIONAL ACTIVITIES COSTS

 

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

 

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

 

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

 

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

 

Equipment.

 

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

 

Miscellaneous.

 

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

 

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

 

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

 

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

 

34

 

EXHIBIT H 

Monster Energy Distribution Agreement

 

FORM OF LETTER OF CREDIT

 

35

 

	
  IRREVOCABLE
  LETTER OF

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT
  NO

  	
   

  	
   

  	
   

  	
  DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BENEFICIARY:

  	
   

  	
  APPLICANT:

  
									

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

	
  VERY
  TRULY YOURS,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
  AUTHORIZED
  SIGNATURE

  

 

 

EXHIBIT I 

Monster Energy Distribution Agreement

 

INDEMNIFICATION

 

Distributor
shall indemnify, defend, and hold harmless HBC and its officers, directors,
agents, employees, shareholders, legal representatives, successors and assigns,
and each of them, from loss, liability, costs, damages, or expenses from any
and all claims, actions and suits, instituted by any third party  ***, whether groundless or otherwise, and
from and against any and all third party claims ***, liabilities, judgments,
losses, damages, costs, charges, attorney’s fees, and other expenses of every
nature and character  *** and/or its
affiliates or any change in, or termination of, ***, unless solely attributable
to HBC’s alleged wrongful conduct which is unrelated to this Agreement or any
other agreement between the parties entered into concurrently herewith,
provided that HBC gives Distributor written notice of any indemnifiable claim
and HBC does not settle any claim without Distributor’s prior written consent.

 

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

 

36

 

EXHIBIT J 

Monster Energy Distribution Agreement

 

COMPETITIVE PRODUCTS

 

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

 

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

 

37

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