Document:

Exhibit 10.4

 

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

 

MONSTER ENERGY

CANADIAN DISTRIBUTION AGREEMENT

 

This MONSTER ENERGY CANADIAN 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 BOTTLING COMPANY, a Nova Scotia corporation (“Distributor”), with
offices at 42 Overlea Boulevard, Toronto, Canada ON MH4 1B8.

 

1.             Recitals
and Definitions.

 

a.             Distributor
is a leading producer and distributor of beverages throughout Canada 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”).  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 January 1, 2009, or as soon as practicable after all necessary
approvals are obtained by HBC and Distributor (the “Commencement Date”).

 

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

 

c.             Coca-Cola
Ltd, a corporation organized and existing under the laws of Canada, with
principal offices at 3389 Steeles Avenue East, Suite 500, Toronto,
Ontario, M2H 3S8 – Canada (“CCL”) is willing to provide the services set forth
in Section 6.b of this Agreement, and Distributor wishes to appoint CCL to
perform such services with respect to the Products as part of Distributor’s
sale of Products in the Territory, with performance to commence as 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.

 

 

2.             Appointment.

 

a.             With
effect from the Commencement Date, HBC appoints Distributor, and Distributor
accepts appointment, as a distributor of Products only to Distributor’s
Accounts within the Territory.  Such
appointment shall only be exclusive if and to the extent so designated on Exhibit C
hereto.  Such appointment shall exclude
any SKU/s deleted from distribution pursuant to Sections 13.b. or 13.f.
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.  Distributor’s appointment of sub-distributors
shall be to supplement and augment but not to replace or substitute, wholly or
partially, any of Distributor’s obligations or any of Distributor’s resources,
performance capabilities, and/or ability to fully perform all of Distributor’s
obligations under this Agreement, including without limitation, as provided in Section 3
below, in the Territory.  Distributor
will remain liable for the actions, omissions and performance of all of
Distributor’s sub-distributors.

 

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

 

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31,
2008 (the “Estimated Buy-Out Contribution”). 
No later than fifteen (15) days prior to the Commencement Date,
Distributor shall deliver to HBC an amount equal to the Estimated Buy-Out Contribution.  As soon as practicable after December 31,
2008, HBC shall determine the actual Sale Volume for the Territory for the
period ended December 31, 2008 in order to calculate the final amount due
by Distributor in accordance with the formula set forth in Exhibit E
(the “Final Buy-Out Contribution”). Distributor shall be and remain obligated
to pay to HBC any shortfall between the Final Buy-Out Contribution and the
amount received by HBC for the Estimated Buy-Out Contribution and HBC shall pay
to Distributor the amount by which the Estimated Buy-Out Contribution actually
received by HBC exceeds the amount of the Final Buy-Out Contribution. The
parties acknowledge and agree that in determining the Final Buy-Out
Contribution it will be necessary for HBC to make allocations and estimates of
the Sales Volumes of the Products based upon such information as may be made
available to it by prior HBC distributor. 
HBC agrees that in making any such allocations or estimates it shall be
required to and shall act reasonably and in good faith. HBC shall provide to
Distributor copies of the written records relied upon by HBC to reasonably
allocate, estimate and determine the Final Buy-Out Contribution, for review by
Distributor, and Distributor hereby agrees to maintain such information and
records in strict confidence. The Final Buy-Out Contribution paid by
Distributor to HBC shall be used by HBC to acquire or terminate the Prior
Distributor Rights and any shortfall necessary to accomplish that goal shall be
borne by HBC and any excess shall be paid to and/or retained by HBC.  “Sale Volume” means the aggregate number of
cases of Products sold and to be sold by any prior distributors and to be sold
by Distributor in the Territory or referenced portion thereof during the twelve
(12) month period ended on a referenced date. 
For the avoidance of doubt, HBC shall acquire or terminate 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.              The
parties acknowledge that it is their current mutual intention that they will
consider in due course entering into a written agreement on mutually acceptable
terms to provide for the manufacture of certain Products in the Territory. This
subsection 2.f shall not be enforceable against either party unless and until
an enforceable agreement has been executed by both parties.

 

g.             With
effect from the Commencement Date, Distributor appoints CCL, and CCL accepts
appointment, as a provider of the services set forth in Section 6.b of
this Agreement with respect to the Products only to Distributor’s Accounts
within the 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

 

3

 

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);

 

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;

 

4

 

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;

 

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; and

 

r.              Both
parties will work together where possible in obtaining (at HBC’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 HBC prior
to the Effective Date, and provide reasonable assistance to each other for the
renewal or amendment of any licenses or approvals which have been obtained as
of the Effective Date.  Distributor shall
also comply with all registration requirements in the Territory, and comply with
any and all governmental laws, regulations, and orders which may be applicable
to Distributor by reason of its execution of this Agreement, including any and
all laws, regulations or orders which govern or affect the ordering, export,
shipment, import, sale, delivery or redelivery of Products in the
Territory.  Distributor shall also notify
HBC of the existence and content of any provision of law which to Distributor’s
knowledge conflicts with any provision of this Agreement at the time of its
execution or thereafter.

 

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

 

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

 

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

 

5

 

6.             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.             CCL
shall facilitate and coordinate HBC and Distributor’s 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, and provide other assistance.  In consideration thereof, Distributor agrees
to pay to CCL a fee calculated in accordance with the formula set forth on
attached Exhibit F (the “CCL Facilitation Fee”).  The CCL Facilitation Fee will be payable by
Distributor to CCL in accordance with the terms of the applicable CCL
invoice.  HBC shall have no
responsibility or liability with respect to the collection or payment of the
CCL Facilitation Fee.

 

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, including Distributor’s hubs in
Canada as may be mutually agreed upon, 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 Reduced Carb Products sold in 24-pack/16 oz. cases, and within  *** in the case of all other Products, of HBC’s
receipt of purchase orders for Products in compliance with Sections 5 and 8.a.
above, and (ii) deliver Products to Distributor with at least  *** of shelf life remaining at the time of
delivery.  Notwithstanding the foregoing,
Distributor acknowledges that delivery dates set forth in purchase orders for
Products accepted by HBC are merely approximate and that HBC shall have no
liability for late deliveries, except only for fines, penalties and assessments
imposed by Distributor’s customers and actually paid by Distributor which arise
solely and directly as a result of HBC’s failure to comply with its obligations
under this Section 8.

 

c.             HBC
shall use commercially reasonable means to cause packing and packaging to
comply with all applicable laws in the Territory.

 

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

 

***   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

 

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.

 

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,

 

7

 

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 or upon termination of the Hansen Beverage Company
Distribution Agreement between HBC and Coca-Cola Enterprises Inc., whichever
occurs first (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 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 CCL 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

 

8

 

(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 without cause or terminated by HBC or MEL, as the case may be, as a
result of a breach by Distributor 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 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
Coca-Cola Enterprises Inc., a Delaware corporation (“CCE”), (ii) the
Monster Energy Belgian Distribution Agreement dated concurrently herewith
between MEL and CCE, and (iii) the Monster Energy Distribution Agreement
dated concurrently herewith between HBC and CCE.

 

(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

 

***   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

 

(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 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”), and/or (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”).

 

(ii)           In
the event of a Complete Termination or Partial Product Termination, HBC or its
successor, as the case may be, shall pay to Distributor a severance payment
calculated with respect to the Products which are the subject of the
termination (the “Product Severance Payment”), calculated as follows: the
Distributor’s “average gross profit per case” (as defined above) per Product
line multiplied by the number of cases of such Products sold by Distributor
during the most recently completed twelve (12) month period ending on the last
day of the month preceding the month in which the Complete Termination, or
Partial Product Termination, as the case may be, occurs.  The Product Severance Payment shall be paid
by HBC to Distributor within thirty (30) days of the later of (A) the date
of the applicable termination, and (B) HBC’s receipt of all information
reasonably necessary to support computation of the Product Severance Payment,
in a form and substance satisfactory to HBC.  
The computation of the Distributor’s “average gross profit per case”
shall exclude the CCL Facilitation Fee.

 

(iii)          Proviso.  If this Agreement is terminated prior to the
third anniversary of the Commencement Date and if a Product Severance Payment
is payable under Section 12.b.(ii) above, then the Product Severance
Payment 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 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 Product Severance Payment under this Section 12.b.(iii), 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

 

***   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

 

immediately preceding the
month in which the Partial Product Termination occurs and the denominator of
which shall be the total number of cases of Products sold by Distributor for
the same period.

 

c.            Distributor
Termination Without Cause and Severance Payment.

 

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

 

(ii)         If Distributor exercises its right to
terminate this Agreement in accordance with Section 12.c.(i) above,
Distributor shall pay to HBC a severance payment (the “Distributor Severance
Payment”) in an amount equal to Distributor’s “average gross profit per case”
(as defined above) multiplied by the number of cases of Products sold by the
Distributor during the most recently completed twelve (12) month period ended
on the last day of the month preceding the month in which this Agreement is
terminated. The computation of the Distributor’s “average gross profit per case”
shall exclude the CCL 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 trebled.  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
doubled.  If, after the  *** 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 (1) loss
of prospective compensation or earnings, (2) goodwill or loss thereof, or (3) 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 and/or
Product Severance Payment payable by HBC to Distributor pursuant to the
provisions of Section 12.a.(i)(A) and/or Section 12.b.(ii) 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

 

***
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

 

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

 

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

 

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

 

(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 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

 

12

 

of termination of this
Agreement pursuant to this Section 12 is an amount equal to the applicable
Severance Payment.  The foregoing
provision shall not waive or affect either party’s indemnity obligations or the
parties’ respective rights to enforce those indemnity obligations under this
Agreement, or waive or affect either party’s obligations with respect to any
other provision of this Agreement which by its terms survives the termination
of this Agreement.

 

f.              Continued
Supply of Products After Termination.  In the event HBC continues to supply Products
to Distributor for any reason following the termination of this Agreement,
Distributor acknowledges and agrees that any such action shall not constitute a
waiver of HBC’s rights under this Agreement or a reinstatement, renewal or
continuation of the term of this Agreement. 
HBC and Distributor agree that if HBC continues to supply Products to
Distributor following the termination of this Agreement, (i) Distributor
shall be prohibited from selling or otherwise transferring Products except to
Distributor’s Accounts within the Territory, (ii) Distributor shall
promptly pay the prices of the Products in full (without deduction or set-off
for any reason) in accordance with the payment terms set forth in HBC’s
invoice, and (iii) HBC shall have the right, in its sole discretion, to
discontinue supplying Products to Distributor at any time, without notice to
Distributor.

 

g.             Distributor’s
Obligations After Notice of Termination.

 

(i)            During any period
after either party gives the other notice of termination of this Agreement and
until actual termination of this Agreement, Distributor shall (A) continue
to perform of all of Distributor’s obligations under this Agreement, including
without limitation, all of Distributor’s obligations under Section 3
above, (B) not cause or permit the Products or the Trademarks to be
prejudiced 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

 

13

 

(measured by sales
velocity) SKU/s of Products but in accordance with and subject to the
provisions of Section 13.f. below. 
Such Annual Business Plan shall cover such matters as may be appropriate
including specific account placement performance objectives, merchandising
goals, specific account and channel objectives for specified distribution
channels, distribution goals, a sales and marketing spending plan and a
strategy for maximizing sales and growth of market share.  Additionally, if the Territory has an ethnic
market or concentration, the Annual Business Plan shall address such specific
ethnic segments, including retail promotions, point-of-sale allocations and
special events for ethnic segments.  The
Annual Business Plan shall not detract from the provisions of Section 10
above.  Distributor shall fully implement
such Annual Business Plan in the following Year.

 

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

 

d.             HBC
and Distributor shall also agree to performance targets to be achieved and
maintained by Distributor for the forthcoming calendar year of this Agreement
(collectively, the “Performance Targets”). 
The Performance Target for the 2008 calendar year will be to integrate
Products 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

 

14

 

take into account
retailer willingness to sell all of the SKU’s of Products, shelf space
limitations and other commercially reasonable factors that may be applicable in
the market; and

 

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

 

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

 

g.             Promotional
activities shall be regulated as follows:

 

(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.

 

a.            Distributor and its sub-distributors
shall have the primary relationship with retail and other customers throughout
the Territory and shall be responsible for negotiating the terms of sale of the
Products within the Territory; provided that without detracting therefrom HBC
shall retain the right to provide input to Distributor and its sub-distributors
respecting sales strategy and other matters as well as to provide sales,
promotional and merchandising support and programs to retail and other
customers as well as the right to meet directly with and make sales
presentations to retail and other customers within the Territory as may be
appropriate from time to time; and provided further that HBC will advise Distributor
of such

 

***
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

 

meetings beforehand to the extent practicable and Distributor shall be
entitled to accompany HBC to the meetings. 
Additionally, HBC may accompany, assist and support Distributor and/or
its sub-distributors from time to time on sales calls to retail and other
customers.

 

b.           “National Account” shall mean a
customer that sells at retail in more than fifty (50) stores and in multiple
states of the United States and in extensive areas of the Territory including,
but not limited to, customers such as Wal-Mart, Safeway and Costco, and has the
ability to make a central decision for the sales of a Product in the United
States and the Territory. The provisions of this Agreement shall not in any way
whatsoever detract from or interfere with or constitute any limitation on any
of HBC’s rights to deal directly with any National Account with regard to the
sale by HBC and/or any distributor and/or any other third party of Products to
any National Account in the United States or any other country in the world
outside of the Territory.  If HBC deems
it desirable for Products to be sold to any National Account pursuant to an
indivisible arrangement that encompasses all outlets of the National Account
including those within the Territory, on a uniform basis, HBC shall be entitled
in its discretion to make arrangements directly with such National Account
including the terms of sale of Products to the National Account and the prices
therefor, which shall take into account the prices and funding then being
offered by Distributor and its sub-distributors to such National Account and
similar categories of customers, in the Territory.  HBC shall use commercially reasonable efforts
to arrange for all outlets of any such National 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
National Account concerned not agree to their outlets within the Territory
being serviced by Distributor or should Distributor elect not to service such
outlets, HBC shall be entitled to service the outlets directly.  In the event HBC services the outlets
directly, HBC shall pay to Distributor during the remaining term of this
Agreement, an amount equal to  ***
percent  *** of the Distributor’s average
gross profit per case per Product line, calculated in accordance with the
provisions of Section 12.a.(i)(A) above, for each case of Products
sold by HBC to the outlets within a reasonable time after receipt by HBC of all
information necessary for the computation of the amount due under this Section 14,
but in no event more frequently than twice per calendar year.  For the purposes of this Agreement, the
number of cases of Products sold by HBC to the outlets during any period shall
be determined by multiplying the total number of cases of Products sold by HBC
directly to such National Account or regional division of such National
Account, as the case may be, during the period concerned, by a fraction, the
numerator of which shall be the number of outlets within the Territory and the
denominator of which shall be the total number of outlets that the National
Account has within the United States or within the regional division of such
customer (including the outlets in the Territory), as the case may be.  Distributor shall not be liable to pay the
CCL 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

 

***
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

 

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 mislabeled in accordance with the Canadian Food and Drugs Act
and the Natural Health Products Regulations promulgated thereunder.

 

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 H
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

 

17

 

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

 

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

 

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

 

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

 

·                                          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

 

18

 

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 in attached Exhibit I  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 all parties.

 

23.           Assignment.  No party may assign its rights or delegate
its obligations hereunder without the prior written consent of the others.  Any purported assignment or delegation, in
the absence of written consent, shall be void.

 

24.           No
Agency.  The relationship of each of the parties to
this Agreement to the others 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.

 

19

 

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.  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
HBC determines that an event, incident or circumstance has occurred which may
require a recall or market withdrawal, HBC shall advise Distributor of the
circumstances by telephone or facsimile. 
HBC shall have the right to control the arrangement of any Product
recall, and Distributor shall cooperate in the event of a Product recall with
respect the reshipment, storage or disposal of recalled Products, the
preparation and maintenance of relevant records and reports, and notification
to any recipients or end users.  HBC
shall pay all reasonable expenses incurred by Distributor of such a recall,
including the costs of destroying Products. 
Distributor, shall promptly refer to HBC for exclusive response to all
customer or consumer complaints involving the health, safety, quality,
composition or packaging of the Products, or which in any way could be
detrimental to the image or reputation of HBC or the Products, and shall notify
HBC of any governmental, customer or consumer inquiries regarding the Products
about which Distributor becomes aware.  
Distributor may consult with HBC regarding issues which Distributor
believes may require a product recall; provided, that the final decision as to
whether to implement a recall shall be made by HBC or a government agency or authority
and not by Distributor.

 

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

 

20

 

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.           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.

 

34.           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

 

21

 

consult with the other
party regarding any public, written announcement which a party reasonably
anticipates would be materially prejudicial to the other party.  Nothing provided herein, however, will prevent
either party from (a) making and continuing to make any statements or
other disclosures it deems required, prudent or desirable under applicable
Federal or State Security Laws (including without limitation the rules,
regulations and directives of the Securities and Exchange Commission) and/or
such party’s customary business practices, or (b) engaging in oral
discussions or oral or written presentations with actual or prospective
investors or analysts regarding the subject matter of this Agreement, provided
no confidential information is disclosed. 
If a party breaches this Section 34 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 34
shall not entitle a party to damages or to terminate this Agreement.

 

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 HBC 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.  HBC 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.

 

c.  CCL 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 the Products to any individual, corporation, government
official or agency or other entity.  No
gift, benefit or contribution in any way related to HBC 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 or effect in the interpretation of
this Agreement or in a determination of the intent of either party hereto.

 

37.           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.

 

38.           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.

 

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.

 

22

 

40.           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

 

                with
a copy to:

 

Coca-Cola Enterprises
Inc.

2500 Windy Ridge Parkway

Atlanta, Georgia 30339

Attention: General
Counsel

Telecopy:  (770) 989-3784

 

If to CCL:

 

Coca-Cola Ltd.

42 Overlea Blvd.

Toronto, Ontario M4H 1B8

CANADA

Attention:  Vice President, Finance

Telecopy:  (416) 756-8153

 

                with
a copy to:

 

Coca-Cola Ltd.

42 Overlea Blvd.

Toronto, Ontario M4H 1B8

 

23

 

CANADA

Attention:  Division Counsel

Telecopy:  (416) 467-2212

 

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.

 

41.           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 BOTTLING
  COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Rodney Sacks

  	
   

  	
  By:

  	
  /s/ William B.
  Douglass III

  
	
  Name:

  	
  Rodney Sacks

  	
   

  	
  Name:

  	
  William B. Douglass
  III

  
	
  Its:

  	
  Chairman

  	
   

  	
  Its:

  	
  Executive Vice
  President

  
								

 

 

Acknowledged and agreed
as to the rights and obligations of and COCA-COLA LTD, a corporation organized
and existing under the laws of Canada, with principal offices at 3389 Steeles
Avenue East, Suite 500, Toronto, Ontario, M2H 3S8 – Canada set forth in
Sections 1.c, 2.g, 6.b, 22, 23, 24, 35.c, 40 and 41.

 

COCA-COLA LTD

 

	
  By:

  	
  /s/ Silvi [Illegible]

  	
   

  
	
  Name:

  	
  Silvi [Illegible]

  	
   

  
	
  Its:

  	
  V.P.
  Secretary & Division Counsel

  	
   

  
					

 

25

 

EXHIBIT
A

Monster Energy Canadian Distribution Agreement

 

INITIAL PRODUCT LIST

 

	
  Category (All SKU’s)

  	
   

  
	
   

  	
   

  
	
  MONSTER

  	
  X

  
	
   

  	
   

  
	
  MONSTER ASSAULT

  	
  X

  
	
   

  	
   

  
	
  MONSTER KHAOS

  	
  X

  
	
   

  	
   

  
	
  MONSTER REDUCED CARB

  	
  X

  
	
   

  	
   

  
	
  MONSTER M80

  	
  X

  
	
   

  	
   

  
	
  MONSTER MIXXD (2009)

  	
  X

  
	
   

  	
   

  
	
  ALL JAVA MONSTER SKU’s
  - Mean Bean, Loca Moca, Russian, LO-BALL (2009)

  	
  X

  
	
   

  	
   

  
	
  MONSTER HITMAN ENERGY
  SHOOTER (2009)

  	
  X

  
	
   

  	
   

  
	
  LOST ENERGY 16 OZ.
  SKU’s - Regular and Five-O

  	
  X

  
	
   

  	
   

  
	
  HANSEN ENERGY PRO

  	
  X

  

 

26

 

EXHIBIT
B 

Monster Energy Canadian Distribution Agreement

 

THE TERRITORY

 

ALL OF CANADA

 

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.

 

27

 

EXHIBIT C

Monster Energy Canadian
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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canadian Military

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.

 

28

 

	
  Account Type

  	
   

  	
  The Distributor’s

  Accounts

  Exclusive ***, ****

  	
   

  	
  The Distributor’s

  Accounts

  Non-Exclusive ***, ****

  	
   

  	
  Accounts

  Reserved for HBC ***,

  ****

  
	
  Alcoholic Lic.
  On-Premise*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trader Joe’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Club Stores

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vending

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other accounts not
  falling within the descriptions listed above

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

	
   

  	
  HBC Initials: 

  	
   

  
	
   

  	
  Distributor Initials:

  	
   

  

 

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

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

 

29

 

EXHIBIT D 

Monster Energy Canadian Distribution Agreement

 

THE TRADEMARKS

 

HANSEN’S

 

HANSEN’S
NATURAL

 

MONSTER
ENERGY

 

MONSTER

 

 MONSTER

 MONSTER ENERGY

 

MONSTER
ASSAULT

 

MONSTER
KHAOS

 

MONSTER
REDUCED CARB

 

UNLEASH
THE BEAST

 

MONSTER
M80

 

MONSTER
MIXXD

 

JAVA
MONSTER - Mean Bean, Loca Moca, Russian, and Lo-Ball

 

MONSTER
HITMAN ENERGY SHOOTER

 

LOST
ENERGY – Regular and Five-0

 

30

 

EXHIBIT E  

Monster Energy Canadian 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.

 

31

 

EXHIBIT F

Monster Energy Canadian Distribution Agreement

 

(Section 6.b.)

 

CCL FACILITATION FEE

 

The CCL Facilitation Fee payable by
Distributor to CCL 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 CCL.

 

***   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 G

Monster Energy Canadian Distribution Agreement

 

PROMOTIONAL ACTIVITIES COSTS

 

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

 

Distributor shall contribute an amount
equal to HBC’s contribution 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 and of which HBC is able to obtain possession 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.

 

33

 

EXHIBIT H

Monster Energy Canadian 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 arising from Distributor’s  *** 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.

 

34

 

EXHIBIT I

Monster Energy Canadian Distribution Agreement

 

COMPETING PRODUCTS

 

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

 

***   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.

 

35Exhibit 10.5

 

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 AGREEMENT

 

This
INTERNATIONAL DISTRIBUTION AGREEMENT (“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”)
with offices at South Bank House, Barrow Street, Dublin 4, Ireland, and
COCA-COLA ENTERPRISES INC., a Delaware corporation with offices at 2500 Windy
Ridge Parkway, Atlanta, Georgia 30339 (“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 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 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, 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 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.

 

 

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.  MEL
acknowledges that Distributor intends to appoint certain sub-distributors with
respect to each country in the Territory, all as identified on Exhibit B-1
hereto.  Except for the initial
sub-distributors identified on Exhibit B-1 hereto, 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

 

2

 

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 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.  MEL or its affiliates will take necessary
commercially reasonable steps to  enforce
MEL’s or its affiliates (as the case may be) rights (A) against any other
distributors to address the importation of Products into the Territory in
violation of applicable distribution agreements with such other distributors
relating to the Products to which MEL or its affiliates are a party, and (B) to
prevent such other distributors from breaching provisions comparable to
subsections 2.b.(i) and 2.b.(ii), above, to the extent that MEL or its
affiliates shall be entitled to do so pursuant to the terms of its distribution
agreements with such distributors and to the extent enforceable under
applicable law. 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.

 

f.            The parties acknowledge that it is
their current mutual intention that they will consider in due course entering
into a written agreement on mutually acceptable terms to provide for the
manufacture of certain Products in the Territory. This subsection 2.f shall not
be enforceable against either party unless and until an enforceable agreement
has been executed by both parties.

 

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

 

3

 

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;

 

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;

 

4

 

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 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.  ***.  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.

 

 ***  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

 

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 Sterling for
Products sold in Great Britain and the Isle of Man, and in Euros for Products
sold in the rest of the Territory, in full (without set off, deduction or
counter claim) by electronic transfer  *** 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 the  *** percent 
*** per month or part thereof from the due date(s) or the maximum
legally permissible.

 

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 

 

***   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

 

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) 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

 

7

 

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 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 Term.  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.  The Initial
Term and any Additional Terms are collectively referred to as the “Term.”

 

8

 

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.

 

(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 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.

 

(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 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 Distributor.  Any such
termination shall be effective upon Distributor’s receipt of MEL’s written
notice of termination, and MEL shall not be liable to 

 

9

 

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 business of Distributor or in reliance on the existence of
this Agreement.  MEL’s right to terminate
this Agreement under this Section 12.a.(ii)(C) shall be independent
of any other rights or remedies of MEL under this Agreement.  The “Concurrent Agreements” mean (i) the
Monster Energy Distribution Agreement dated concurrently herewith between HBC
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 MEL fails to deliver to Distributor at 
*** 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; 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 MEL.  Any such termination shall be effective upon
MEL’s receipt of Distributor’s written notice of termination, and Distributor
shall not be liable to MEL or otherwise obligated to pay to MEL 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 MEL 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 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 an entire Country Group (as defined below) that
constitutes a portion of the Territory (a “Partial Territory Termination”).  A “Country Group” means each one of the
following:  (x) Great Britain and
the Isle of Man, collectively; (y) France and Monaco, collectively; and (z) The
Netherlands and Luxembourg, collectively.

 

(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.

 

10

 

(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,

 

***  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

 

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 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

 

12

 

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 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.

 

13

 

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 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 

 

14

 

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.  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 0.5, in which case the number will be rounded up to
***), be deleted from distribution in any 
*** 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 

 

***  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

 

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 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 

 

***  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

 

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, 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 

 

17

 

the Indemnifying Party’s ability to defend such
action, suit or proceeding.  The
Indemnifying Party shall have the right to defend such action or proceeding at
the Indemnifying Party’s sole cost by counsel satisfactory to Indemnifying
Party. If the Indemnifying Party fails to promptly defend or otherwise settle
or finally resolve such action, suit or proceeding, Indemnified Party may
defend such action, suit or proceeding using counsel selected by Indemnified
Party, and the Indemnifying Party shall reimburse Indemnified Party for any
resulting loss, damages, costs, charges, attorney’s fees, and other expenses
and the related costs of defending such action, suit or proceeding.

 

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

 

20.           Insurance.  During the term of this Agreement and for a
period of two (2) years thereafter, 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.  The provisions of Section 21 are set
forth in attached Exhibit E 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 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

 

18

 

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 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.

 

19

 

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.           Distributor Suppliers Guiding
Principles.  MEL 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
MEL 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.

 

20

 

·              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.

 

34.           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.

 

35.           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 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.

 

36.           TUPE:

 

a.             This Section 36 applies to the extent
that the provisions of the Transfer of Undertakings (Protection of Employment)
Regulations 2006 (or any equivalent legislation in the Territory which is
derived from the Acquired Rights Directive (Directive 77/187 as amended by
Directive 98/50/EC and consolidated in 2001/23/EC (the “Regulations”) apply in
respect of those MEL employees (or those of its distributors/sub-contractors
other than Distributor) working exclusively on the sales and marketing of the
Products immediately prior to the Effective Date or in respect of those
employees of the Distributor or any sub-distributor working exclusively on the
sales and marketing of the Products immediately prior to the date of
termination or expiry of this Agreement (the “Employees”).

 

b.             Subject to the provisions of clause 36(c), (d) and
(e) below MEL shall indemnify Distributor from and against all losses,
costs, liabilities, expenses (including reasonable legal fees and
disbursements), actions, proceedings, claims and demands (“Losses”) arising out
of or in connection with:

 

(i).           any claim by any Employee (or
representative on the Employee’s behalf) for any remedy including but not
limited to any breach of contract, unfair dismissal, redundancy, statutory
redundancy, equal pay,

 

21

 

unlawful discrimination, unlawful
deduction from wages, a protective award, an award under the National Minimum
Wage Act 1998 or the Working Time Regulations 1998 or for breach of statutory
duty or of any other nature as a result of anything done or omitted to be done
by MEL (or its distributors/sub-contractors other than Distributor) in relation
to their employment or termination of such employment prior to the Effective
Date;

 

(ii).          any claim by any person (other than an
Employee) who asserts that his rights and liabilities as a result of his
employment with MEL or its distributors/sub-contractors (other than
Distributor)  (or the termination of such
employment) whether before or after the Effective Date transfer to Distributor
arising solely under the Regulations;

 

(iii).         any failure by MEL (or those of its
distributors/sub-contractors other than Distributor) to comply with their
obligations under the Regulations, including but not limited to its obligations
to inform and consult with the Employees in relation to the transfer of the
sales and marketing services for the Products;

 

c.             In the event that the Regulations are deemed
or alleged to apply to transfer the employment of any person (other than an
Employee) from MEL (or its distributors/sub-contractors other than Distributor)
to Distributor at any time, Distributor shall have the right to terminate such
employment with immediate effect and MEL shall indemnify Distributor and keep
Distributor indemnified against all Losses arising out of such employment or
termination of such employment subject to such termination of employment being
carried out in accordance with the lawful and reasonable directions of MEL.

 

d.             In the event that either (i) Distributor
informs MEL before the Effective Date that it does not require the services of
any or all of the Employees or (ii) MEL informs Distributor before the
Effective Date that it wishes to retain all or any of the Employees, then MEL
shall be fully responsible for those Employees 
(even if the Regulations are alleged to apply) and Distributor shall
have the right to terminate such Employees’ employment with immediate effect
(should the Regulations be alleged to apply) and MEL shall indemnify
Distributor and keep Distributor indemnified against all Losses arising out of
such employment or termination of such employment (including any protective
award) subject to such termination of employment being carried out in
accordance with the lawful and reasonable directions of MEL.

 

e.             In the event that Distributor informs MEL
within three (3) months of the Effective Date that it does not require the
services of any or all of the Employees, then Distributor shall have the right
to terminate such Employees’ employment with immediate effect and MEL shall
indemnify Distributor and keep Distributor indemnified against all Losses
arising out of such employment from the Effective Date and/or arising out of
the termination of such employment (including any protective award) subject to
such termination of employment being carried out in accordance with the lawful
and reasonable directions of MEL.

 

f.              Subject to the provisions of clause 36(b),
(c), (d) and (e) above, Distributor shall indemnify MEL from and
against all losses, costs, liabilities, expenses (including reasonable legal
fees and disbursements), actions, proceedings, claims and demands (“Losses”)
arising out of or in connection with:

 

(i).           any claim by any Employee (or
representative on the Employee’s behalf) for any remedy including but not
limited to any breach of contract, unfair dismissal, redundancy, statutory
redundancy, equal pay, unlawful discrimination, unlawful deduction from wages,
a protective award, an award under the National Minimum Wage Act 1998 or the
Working Time Regulations 1998 or for breach of statutory duty or of any other
nature as a result of anything done or omitted to be done by Distributor or any
sub-distributor in relation to their employment or termination of such
employment after the Effective Date but prior to the date of termination or
expiry of this Agreement;

 

(ii).          any claim by any person (other than an
Employee) who asserts that his rights and liabilities as a result of his
employment with Distributor or its sub-distributor (or the termination of such
employment)

 

22

 

whether before or after the date of
termination or expiry of this Agreement transfer to MEL or its distributors
arising solely under the Regulations;

 

(iii).         any failure by Distributor or its
sub-distributors to comply with its or their obligations under the Regulations,
including but not limited to its obligations to inform and consult with the
Employees in relation to the transfer of the sales and marketing services for
the Products;

 

g.             In the event that the Regulations are deemed
or alleged to apply to transfer the employment of any person (other than an
Employee) from Distributor or its sub-distributor to MEL or another of its
distributors at any time, MEL or its distributors shall have the right to
terminate such employment with immediate effect and Distributor shall indemnify
MEL and keep MEL indemnified against all Losses arising out of such employment
or termination of such employment subject to such termination of employment
being carried out in accordance with the lawful and reasonable directions of
Distributor.

 

h.             In the event that either (i) MEL informs
Distributor before the date of termination or expiry of this Agreement that it
or its distributors do not require the services of any or all of the Employees
or (ii) Distributor informs MEL before the date of termination or expiry
of this Agreement that it wishes to retain all or any of the Employees, then
Distributor shall be fully responsible for those Employees (even if the
Regulations are alleged to apply) and MEL or its distributors shall have the
right to terminate such Employees’ employment with immediate effect (should the
Regulations be alleged to apply) and Distributor shall indemnify MEL and keep
MEL indemnified against all Losses arising out of such employment or
termination of such employment (including any protective award) subject to such
termination of employment being carried out in accordance with the lawful and
reasonable directions of Distributor.

 

i.              In the event that MEL informs Distributor
within three (3) months of the date of termination or expiry of this
Agreement that it or its distributors do not require the services of any or all
of the Employees, then MEL or its distributors shall have the right to
terminate such Employees’ employment with immediate effect and Distributor
shall indemnify MEL and keep MEL indemnified against all Losses arising out of
such employment from the Effective Date and/or arising out of the termination
of such employment (including any protective award) subject to such termination
of employment being carried out in accordance with the lawful and reasonable
directions of Distributor.

 

37.           Publicity. MEL 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,
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 37 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 37
shall not entitle a party to damages or to terminate this Agreement.

 

38.           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

 

23

 

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.

 

39.           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.

 

40.           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

  
	
   

  	
   

  	
   

  
	
  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 Distributor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Coca-Cola Enterprises Inc.

  
	
   

  	
   

  	
  2500 Windy Ridge Parkway

  
	
   

  	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
   

  	
  Attention: Chief Financial
  Officer

  
	
   

  	
   

  	
  Telecopy: (770) 989-3784

  

 

24

 

	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Coca-Cola Enterprises Inc.

  
	
   

  	
   

  	
  2500 Windy Ridge Parkway

  
	
   

  	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telecopy: (770) 989-3784

  

 

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.

 

41.           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.

 

42.            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.

 

43.           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.

 

(Signature page/s follows.)

 

25

 

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

 

	
  TAURANGA LTD

  	
   

  	
  COCA-COLA ENTERPRISES INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Rodney Sacks

  	
   

  	
  By:

  	
   /s/ William W. Douglass III

  
	
  Name:
  Rodney Sacks

  	
   

  	
  Name:

  	
   William W. Douglass III

  
	
  Its:
  Director

  	
   

  	
  Its:
  

  	
  EVP &
  Client Financial Officer

  
					

 

26

 

EXHIBIT
A

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

  	
   

  

 

27

 

EXHIBIT
B 

Monster Energy International Distribution Agreement

 

THE
TERRITORY

 

Great
Britain and the Isle of Man

 

France

 

Monaco

 

The
Netherlands

 

Luxembourg

 

28

 

EXHIBIT
B 

Monster Energy International Distribution Agreement

 

INITIAL
SUB-DISTRIBUTORS

 

	
  Country

  	
   

  	
  Sub-Distributors

  
	
  Great
  Britain and the Isle of Man

  	
   

  	
  Coca-Cola
  Enterprises Ltd.

  
	
  France

  	
   

  	
  Coca-Cola
  Entreprise SAS

  
	
  Monaco

  	
   

  	
  Coca-Cola
  Entreprise SAS

  
	
  The
  Netherlands

  	
   

  	
  Coca-Cola
  Enterprises Nederland BV

  
	
  Luxembourg

  	
   

  	
  Soutirages
  Luxembourgeois SARL

  

 

29

 

EXHIBIT
C 

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.

  

 

30

 

	
  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.

 

	
   

  	
   

  	
  MEL 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.

  

 

31

 

EXHIBIT
D 

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

 

32

 

EXHIBIT
E

Monster Energy International Distribution Agreement

 

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 ***.

 

***             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

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