TERMS AND CONDITIONS
PART I
1.
Terms and Acceptance. Only the occurrence of one of the following
events shall constitute acceptance of the terms and conditions hereof by your
company (“Supplier”): (a) Supplier’s execution of this purchase order (“Order”)
and the receipt thereof by our company (“Distributor”); or (b) Supplier’s
commencement of performance on account of this Order (including, without limitation,
a promise to ship or the shipment of conforming or non-conforming Products);
provided, however, that in the event Distributor does not receive notice of
Supplier’s commencement of such performance within a reasonable time,
Distributor may treat its offer made hereunder as having lapsed before
acceptance. The offer contained in this
Order is made on the terms and conditions stated herein and no others. Accordingly, Supplier’s acceptance of this
Order is expressly limited to the terms and conditions hereof. Notice of objection is hereby given to any
proposed term or condition or any alteration whether perceived as major or
minor in nature. No additions, subtractions, or other modification of the terms
and conditions of this Order shall be binding upon Distributor unless expressly
accepted in writing by Distributor.
2.
Definitions. (a) The term “Person” means any natural person, corporation, division of
a corporation, Supplier, Alternate Supplier, brewer, partnership,
proprietorship, joint venture, association, trust, estate, foundation or any
other entity, whether or not incorporated, and any governmental authority, unit
or agency.
(b) The term “Products” means (i) the types of beverages specified on the face of this
Order together with all enhancements and modifications to, and changes in
ingredients of, any of such beverages, irrespective of whether or not the term “new”
or “improved” or words of similar import are added thereto or if Supplier uses
a different product code or name therefor; and (ii) any existing products and
new products in any way associated with any of the Marks to the extent
Distributor agrees to distribute those products.
(c) The term “Territory” means the geographical
area within which Distributor distributes the Products, or as otherwise
mutually agreed in writing between Supplier and Distributor.
(d) The term “Marks” means those trademarks,
trade names, copyrighted materials, logos, slogans, designs and distinctive
bottles, advertising and packaging which are used, at any time during the term
hereof, in connection with the production, sale, marketing or distribution of
Products or to otherwise identify the Products (including, without limitation,
those set forth herein) and any enhancements, modifications or derivatives
thereof and changes thereto.
3.
Delivery, Risk
of Loss and Related Matters. (a) With respect to
this Order, Supplier shall deliver conforming Products on the delivery dates
specified herein. Such delivery dates
will comply with Supplier’s applicable lead time requirements made available
for its most preferred distributors on the date this Order is issued. Products will not be delivered sooner than
three (3) days prior to the stated delivery date or more than five (5) days
thereafter. This Order may be issued
electronically or in writing.
(b) Should Distributor desire to cancel this
Order or any other purchase orders submitted to Supplier, Distributor will
notify Supplier and Supplier will make good faith efforts to redirect the
Products covered hereunder to another distributor. If Supplier is unable to do so despite such
efforts, shipment of the Products pursuant to this Order will be made to
Distributor who will make payment therefor in accordance with the provisions
hereunder.
(c) Products ordered pursuant to this Order shall
be tendered by Supplier in a single delivery.
Deliveries will be made in accordance with the mercantile symbol or
trade term, as the case may be, set forth on the face hereof.
4.
Purchase Price and Payment Terms. (a) Subject to paragraph 14(b), the price
payable for Products is set forth on the face of this Order. Distributor shall pay each invoice within 90 days from release of brewery, at Distributor’s warehouse, of the Products to which such invoice
pertains. Distributor may make such
payment by company check.
(b) The wholesale price charged for Products
pursuant to paragraph 4(a) is not subject to increase and includes all
transportation and shipping charges, crating, packaging, insurance premiums and
all federal, state and local sales, use, excise and other taxes, duties and
governmental charges imposed on or with respect to the sale or transport of
such Products to Distributor.
5.
Inspection. Within sixty (60) days after Supplier duly
tenders delivery of the Products ordered pursuant hereto, Distributor shall
have the right, but not the obligation, to inspect the Products before
accepting them. Inspections performed by
Distributor will not constitute acceptance nor relieve Supplier of its
obligation to tender conforming Products in accordance herewith.
6.
Packaging. All Products delivered pursuant hereto shall
(i) be placed in containers conforming to
Distributor’s requests, or in the absence of such requests, in recognized
commercial containers suitable for the Products for domestic or international
shipping, as the case may be, with such containers numbered and labeled with
the order number, stock number, contents, and weight; and (ii) contain an
itemized packing slip. Distributor’s
count or weight shall be final and conclusive on shipments of Products not
accompanied by appropriate packing slip.
7.
Representations and Warranties of Supplier. Supplier hereby represents and
warrants to Distributor that on the date of the issuance of this Order, and
upon the delivery and acceptance of the Products which are the subject of this
Order:
(a) all Products sold by Supplier to Distributor
shall be manufactured, bottled, packaged and labeled in conformity with all
applicable federal, state and local laws, rules and regulations of the United
States (including, without limitation, the Territory) and the country in which
each Product is produced;
(b) Products delivered pursuant hereto are fit
for human consumption, are merchantable, of good average quality, and are free
from any and all defects; and
(c) Supplier owns or has the right to use all
intellectual property rights relating to the Products, including, without
limitation, all Marks, free from any claims concerning infringement or the
like, has the right to grant a license to Distributor to use the Marks, and the
use of such intellectual property in connection with the sale of the Products
by Distributor will not subject Distributor to any such infringement claims.
8.
Non-Conformities; Remedies; Waivers and
Related Matters. (a) The
occurrence of any one or more of the following events shall constitute an
“Event of Default”: (i) tendering delivery of any
Products which fail to conform in all respects to any of the provisions hereof
(“Non-conforming Products”); (ii) Supplier’s breach of or failure to perform
any of its obligations under this Order; or (iii) Supplier’s breach or
misrepresentation of any representation or warranty made by Supplier hereunder.
(b)
Upon the occurrence of an Event of Default, Distributor shall be entitled, but
shall not be required, to exercise all, any one or any number of the following
rights and remedies: (i) with respect to late
deliveries, Distributor may extend the time for delivery, in which case such
Products shall be shipped in the manner specified by Distributor, including,
without limitation, shipment by air. Any
additional expenses incurred for expedited shipping shall be paid by Supplier;
(ii) with respect to Non-conforming Products,
Distributor shall have the right to obtain replacement Products from
Supplier. Such Products shall be
replaced with Products which are in strict compliance with the provisions
hereof; (iii) reject or revoke acceptance, as the case may be, of all or any
portion of the shipment of Products containing any Non-conforming Products; and
(iv) exercise any other rights and remedies specified in paragraphs 10, 15 and
16. Distributor shall exercise any one
or more of the foregoing rights and remedies by giving written notice to
Supplier of its intention to do so.
Distributor shall not be liable to Supplier on account of exercising any
such rights or remedies. Supplier hereby
acknowledges and agrees that the occurrence of an Event of Default shall
constitute a substantial impairment of value to Distributor of the particular
shipment in question, this entire Order, any then pending Other Orders and, if
applicable, the Distribution Relationship, so as to entitle Distributor to
exercise any one or all of the remedies specified in this Order and Supplier
hereby waives its right to cure the default in question.
9.
Indemnification. Supplier hereby agrees to indemnify, protect
and hold harmless Distributor, its directors, officers, shareholders,
employees, agents and affiliates (Distributor and each such persons being
collectively referred to as the “Indemnified Parties”), from and against any
and all liabilities, losses, claims, obligations, damages, actions,
proceedings, costs, expenses (including, without limitation, reasonable legal
fees) and judgments (collectively, “Damages”) of whatsoever kind and nature,
imposed upon, incurred by or asserted, threatened or awarded against any of the
Indemnified Parties directly or indirectly arising out of, relating to, or
resulting from: (i) the breach of any representation
or warranty made by Supplier to Distributor under this Order concerning the
quality or attributes of the Products; (ii) Distributor’s use of the Marks
in the Territory; (iii) the quality or condition of or inherent defect in the
Products at that time of delivery to Distributor; and (iv) any injury or damage
to person or property as a result of the consumption of the Products. Such indemnity shall include, but shall not
be limited to, reasonable expenses, attorneys’ fees, court costs,
investigations, proceedings, litigation and the settlement of any such claim,
provided, however, that Supplier shall not be liable pursuant to the foregoing
indemnification provision in respect of Damages that a court of competent
jurisdiction shall have determined by final judgment (not subject to further
appeal) to be primarily and directly the result of the willful misfeasance or
gross negligence of any of the Indemnified Parties.
Any and all amounts due for
indemnity hereunder shall be promptly paid by the Supplier as Damages are incurred, and in any event within thirty (30) days after
demand therefor. Payments will be made
in accordance with the instructions of the Indemnified Party in question at the
time.
10.
Cumulative Remedies. Subject to paragraph 16, all of Distributor’s
rights and remedies hereunder shall be cumulative and not exclusive and shall
be in addition to all other rights and remedies available under applicable
law. Failure by Distributor to exercise
any right, remedy or option hereunder or under applicable law, or delay in exercising same, will not operate as a
waiver, it being understood that no waiver by Distributor will be effective
unless it is in writing and signed by Distributor, and then only to the extent specifically stated.
11.
Miscellaneous Provisions. (a) Notices. All notices permitted, required or provided
for by this Order shall be made in writing, and shall be deemed adequately
delivered if delivered by hand or by the mailing of the notice in the U.S.
mail, pre-paid certified or registered mail, return receipt requested, or by
facsimile or by a recognized courier service that regularly maintains records
of its pick-ups and deliveries, to the parties at their respective addresses
set forth above or to any other address designated by a party hereto by written
notice of such address change. Notices
delivered by mail shall be deemed given when deposited in a U.S. mailbox or delivered to a U.S. post office and it will be deemed received
two (2) days thereafter, where the recipient’s address is located in the United States. Notices sent by courier service will be
deemed given when deposited with the courier service and it will be deemed
received the next day, where the recipient’s address is located in the United
States, and three (3) days thereafter, where the recipient’s address is located
outside the United States.
(b) Modification or Amendment. This Order may not be modified or amended
except by an instrument in writing signed by the party or parties against whom
enforcement is sought. For purposes of
class=WordSection2>
this
Agreement, a modification includes, without limitation, a change in the
competitive circumstances under which this Agreement was entered into and is
performed which is caused by Supplier without fault on the part of Distributor.
(c)
Invalidity of Provision. Any term or provision of this Order
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Order or affecting the validity or enforceability of any
of the terms or provisions of this Order in any other jurisdiction.
(d)
Governing Law. All
questions pertaining to the validity, construction, execution and performance
of this Order shall be construed and governed in accordance with the laws of
the United States of America, State of New York, without giving effect to the
principles of (i) comity of nations or (ii) conflicts
or choice of law provisions thereof, and this Order shall not be governed by
the provisions of the U.N. Convention on Contracts for the International Sale
of Goods. Any actions or proceedings
commenced in connection with this Order shall be brought in a federal or state
court located in the State of New York, Kings County, and to the extent not
otherwise subject to the jurisdiction of such courts, each of the parties
agrees to waive any objection to such jurisdiction and to subject itself to the
jurisdiction of such courts. Both
Distributor and Supplier further agree that service of process for any such
action or proceeding shall be made by either a recognized courier service that
regularly maintains records of its pick-ups and deliveries or by certified mail,
return receipt requested, addressed to the parties at their respective
addresses set forth on the face hereof.
In addition, a party may at its option, elect to use any other method of
service of process authorized by applicable law.
(e)
Waiver of Breach. Any
waiver of any of the provisions herein, or of any inaccuracy in or
non-fulfillment of any of the representations, warranties or obligations
hereunder or contemplated hereby, shall not be effective unless made in writing
and signed by the party against whom the enforcement of any such waiver is
sought.
(f) Assignment. Supplier may not assign or otherwise delegate
any of its rights or obligations hereunder, and Distributor may not assign any
of its rights hereunder, without the prior written consent of the other party,
which consent will not be unreasonably withheld. In the event Distributor seeks to assign any
of its rights hereunder,
Supplier will not unreasonably withhold its consent and will give
its consent if the proposed assignee is in reasonably sufficient financial
condition to perform its obligations hereunder and has experience distributing
alcoholic beverages. Supplier shall give
Distributor written notice of its decision whether to give or withhold its
consent within sixty (60) days after Distributor’s request to assign its rights
under this Agreement. If Supplier fails
to give such written notice to Distributor within that time, Supplier shall be
deemed to have given its consent to Distributor. The parties acknowledge and agree that if the
proposed assignee satisfies the aforementioned criteria, then the assignment of
Distributor’s rights under this Agreement will not be deemed to materially
change the duty of the Supplier, or increase materially the burden or risk
imposed upon the Supplier by this Agreement or impair materially the Supplier’s
chance of obtaining return performance.
Notwithstanding anything to the contrary contained herein, Distributor
shall have the right to assign this Agreement without Supplier’s consent to an
affiliate of Distributor upon giving Supplier at least thirty (30) days prior
written notice of Distributor’s intention to do so. For purposes hereof, an “affiliate” of
Distributor is any Person directly or indirectly controlling, controlled by or
under common control with Distributor.
Any attempted assignment in violation of this paragraph 11(f) shall be
null and void, without legal force or effect.
(g)
Survival. The terms of
this paragraph 11(g) and paragraphs 7, 9, 10, 16, and 17 shall survive the
acceptance of this Order.
(h) Entire
Agreement. This Order, the
Distribution Relationship as defined below, all Other Orders issued pursuant to
the Distribution Relationship and any written agreement signed by Supplier and
Distributor relating to the Distribution Relationship constitute and contain
the entire agreement and understanding between the parties, and supersedes and
replaces all prior negotiations and all prior agreements, proposed or
otherwise, whether written or oral, concerning the subject matter hereof. No course of dealing, usage of trade or
course of performance shall be relevant to explain, supplement or modify any
express provision of this Order.
(i) Governing Language. The parties hereto agree that all written
documents between them be prepared in the English language only and such
language shall be the governing language. Les parties
aux presentes confirment qu’elles ont agreé
que tous les documents
entre eux par écrit soit redigé dans
la langue anglaise seulement,
et telle langue sera lan
langue de contrôle.
PART II
In addition to the
provisions set forth in Part I hereof, the provisions of this Part II are also
applicable in the event this Order is issued pursuant to a Distribution
Relationship. For purposes of this Order,
the term “Distribution Relationship” means that (i)
Supplier has granted Distributor the right to purchase Products from Supplier
for the purpose of distributing the Products in a particular geographic
territory; and (ii) Distributor has issued, or in the contemplation of the
parties will issue, multiple purchase orders for Products under circumstances
where Supplier knows or should know that said purchase orders are being issued
for the purpose of distributing Products in such territory.
12.
Application of Governing Statute. Supplier
and Distributor acknowledge and agree that Distributor, through its
distribution, marketing and promotion of the Products in the Territory, is
building the brand recognition and goodwill of the Products, as contemplated
and recognized under New York Alcoholic Beverage Control Law (“ABC Law”) §
55-c. Therefore, the parties agree that the provisions of ABC Law §
55-c will govern and control the terms of this Order and the Distribution
Relationship whether or not the Products sold by Supplier to Distributor
under the terms of this Order are “beer” within the meaning of ABC Law. For the purposes of this Order, (i) Supplier will be deemed to be a “brewer” within the
meaning ABC Law § 55-c; (ii) Distributor will be deemed to be a “beer
wholesaler” within the meaning of ABC Law § 55-c; and (iii) the Distribution
Relationship between Distributor and Supplier will be deemed to be an
“agreement” within the meaning of ABC Law § 55-c.
13.
Appointment; Exclusive Territory.
(a) By
Supplier’s acceptance of (i) this Order; (ii) any
previous order issued by Distributor pursuant to the Distribution Relationship;
or (iii) any Other Order, and as a result of the Distribution Relationship,
Supplier hereby appoints Distributor as the exclusive distributor of Products
within the Territory, and hereby grants to Distributor the related distribution
rights to do so. Accordingly, Supplier
will not directly or indirectly sell or otherwise distribute Products to any Person
located within the Territory or authorize or permit any other Person to do so,
other than Distributor.
(b)
Supplier agrees that it will not directly or indirectly sell or
otherwise distribute to an authorized distributor of Supplier located outside
of the Territory, Products (i) that Supplier knows or
has reason to believe are destined for sale or have been sold, directly or
indirectly, to Persons within the Territory; or (ii) in quantities that
Supplier knows or has reason to believe are in excess of reasonable sales
expectancies within that distributor’s specific assigned market or
territory. Supplier will also use
commercially reasonable efforts to protect Distributor’s exclusive rights to
sell Products in the Territory including, without limitation, discontinuing
sales to infringing resellers.
(c) Distributor may market, sell and otherwise
distribute Products to any Person located or taking delivery within the
Territory in any reasonable commercial manner not inconsistent with
Distributor’s licenses and permits.
However, Distributor has the right to sell Products to another
authorized distributor of Supplier located outside of the Territory for the
purpose of eliminating Product shortages or inventory imbalances.
(d) Notwithstanding anything to the contrary
contained herein or under applicable law, Distributor’s obligation to market,
distribute, sell or otherwise promote the sale of Products pursuant to the
Distribution Relationship will be based on reasonable commercial efforts, and
no greater. It is acknowledged that in
addition to Supplier’s right to market, promote and advertise the Products in
the Territory, Distributor will market, advertise or promote the Products at
such times, and in such manner, as is mutually agreed, in writing, between
Distributor and Supplier. In addition,
Supplier hereby acknowledges that Distributor is currently, and will be in the
future, engaged in the business of marketing, selling, promoting and
distributing other beverage products, some of which are or may be competitive
with, or constitute substitutes for, Products.
As such, it is specifically understood and agreed that such activities
shall not be deemed improper or violative of any
obligation of Distributor hereunder, under the Distribution Relationship or
under applicable law. Supplier will
periodically provide Distributor with reasonable contributions toward the costs
to be incurred by Distributor in any mutually agreed upon promotion, marketing
or other support of the Products.
(e) Supplier hereby grants to Distributor the
right and license to use the Marks (i) for purposes
of marketing, selling, promoting and otherwise distributing Products within the
Territory; and (ii) for purposes of manufacturing and distributing promotional
materials in connection with the promotion and sale of the Products.
14.
Supply. (a) During the term
of the Distribution Relationship, Supplier hereby agrees to sell to
Distributor, and Distributor agrees to purchase from Supplier, Distributor’s
requirements for Products to be distributed to Persons located or taking
delivery within the Territory.
Distributor’s requirements for Products are as set forth in this Order,
and as set forth in other purchase orders subsequently issued from time to time
by Distributor pursuant to the Distribution Relationship (such other subsequent
orders are collectively “Other Orders”).
Supplier will accept this Order and the Other Orders and fulfill
Distributor’s requirements for Products pursuant to the provisions hereof and
thereof.
(b) Prices payable by Distributor for Products
pursuant to the Distribution Relationship will be Supplier’s established
wholesale or export prices for the Products, effective at the time Distributor
issues the purchase order in question.
If Supplier has more than one (1) wholesale or export price, the
wholesale or export price to be paid by Distributor will be the lowest
wholesale or export price being offered to any other distributor at the time of
Distributor’s issuance of such purchase order.
(c) Supplier will use its reasonable efforts to
advertise and promote the sale of the Products in the Territory under the
Marks. Supplier will provide Distributor
with display, merchandising and point of sale materials for placement in
on-premise and off-premise accounts.
(d) It is understood and acknowledged by Supplier
and Distributor that the Distribution Relationship constitutes, and will be
deemed to constitute, an installment contract within the meaning of the New
York Uniform Commercial Code and that this Order and Other Orders, shall be
construed to be orders issued under an installment contract constituting the
Distribution Relationship, and are not to be construed as individual unitary
contracts.
15. Term; Termination. (a)
The term of the Distribution Relationship will continue until terminated
pursuant to paragraphs 15(b), 15(c) or 15(d).
(b)
Supplier shall only have the right to terminate the Distribution
Relationship (i) pursuant to paragraph 15(c); or (ii)
in the event Distributor breaches any material provision contained herein or in
any of the Other Orders and fails to cure same after receiving written notice
thereof and an opportunity to cure pursuant to the provisions of this paragraph
15(b). Supplier shall initiate such termination
procedure by providing written notice to Distributor of such breach which shall
state with particularity the basis for Supplier’s determination of
noncompliance and Supplier’s intent to terminate the Distribution
Relationship. Upon Distributor’s written
request within ten (10) days of receipt of said notice, Supplier will
supplement said notice by submitting to Distributor, in writing, Supplier’s
recommended plan of corrective action to cure the claimed defaults or
deficiencies in a manner satisfactory to it.
Subject to extensions that Supplier may grant, Distributor shall then
have fifteen (15) days after receiving such notice to submit a plan of
corrective action and an additional seventy-five (75) days to cure such
noncompliance in substantial conformity with such plan. If Distributor fails to cure on a timely
basis, Supplier shall have the right to terminate the Distribution Relationship
by giving Distributor an additional ten (10) days written notice of its
intention to do so (the “Ten Day Notice”).
Should Distributor dispute the
termination in writing within the ten (10) day period following the giving of
the Ten Day Notice, the parties will continue to perform their respective
obligations under this Order until the dispute is finally adjudicated by a
court of competent jurisdiction.
(c) If any of the following
events occur, Supplier shall have the right to terminate the Distribution
Relationship by giving at least thirty (30) days prior written notice to
Distributor:
(i) Distributor makes
a general assignment for the benefit of creditors, or consents to the
appointment of a receiver, liquidator or similar official of all or
substantially all of its assets, or if a receiver is appointed for all or a
substantial portion of Distributor’s assets and such appointment is not discharged
for a period of ninety (90) days; or
(ii) Distributor commences an action or proceeding
or takes advantage of or files under any federal or state insolvency statutes
including, without limitation, the United States Bankruptcy code, seeking to
have an order of relief entered with respect to it, or seeking adjudication as
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or other relief with respect to its debts;
(iii) there shall be commenced against Distributor
any action or proceeding of the nature referred to in the immediately preceding
sub-paragraph which is not stayed or dismissed within ninety (90) days;
(iv) in the event of a conviction or plea of
guilty or no contest to a felony by Distributor or a principal owner of
Distributor which in the reasonable judgment of the Supplier may adversely
affect the goodwill or interests of Products in the Territory; or
(v) court established
fraudulent conduct on the part of Distributor in its dealings with the
Supplier.
(d) Distributor shall have the right to terminate
the Distribution Relationship as follows: (i)
immediately, upon the occurrence of an Event of Default. Distributor shall exercise such right by
giving Supplier written notice of its intention to do so; or (ii) at any time,
for any reason or no reason at all, by giving at least thirty (30) days prior
written notice of its intention to do so (the “Convenience Termination
Period”).
(e)
If Supplier initiates termination procedures or otherwise exercises its
right to terminate under paragraph 15(b), then during any notice or cure period
specified in paragraph 15(b), the parties will continue to perform their
respective obligations hereunder and under the then pending Other Orders and
under the Distribution Relationship.
Likewise, if Distributor terminates the Distribution Relationship
pursuant to paragraph 15(d)(ii), the parties shall be
obligated to continue to perform their respective obligations hereunder during
the Convenience Termination Period.
16.
Post-termination Obligations. (a) If
Supplier cancels all or a portion of the Distribution Relationship other than
pursuant to paragraphs 15(b) or 15(c), or if Distributor terminates the
Distribution Relationship pursuant to paragraph 15(d)(i),
Supplier will immediately pay to Distributor a lump sum payment equal to
reasonable compensation for damages sustained by Distributor as a result of
such termination including future lost profits and the value of Distributor’s
distribution rights associated with distributing the Products in the
Territory. Both parties agree that it
would be difficult to determine the reasonable compensation for damages
sustained by Distributor as a result of the cancellation of the Distribution
Relationship; and that as reasonable compensation for such damages, Supplier
shall pay Distributor, within ten (10) days after the termination of the
Distribution Relationship, liquidated damages for each type of Product covered
under this Order and the Distribution Relationship.
The amount of such
liquidated damages for each type of Product will be equal to five (5) times the
Gross Profit of the particular type of Product in question, multiplied by the
quantity of that Product sold by Distributor during the Last 12 Month Period
(such quantity is hereinafter referred to as the “12 Month Quantity”). For purposes of this paragraph 16(a), the
following terms shall have the following meanings: the term “Last 12 Month Period” means the
twelve (12) consecutive complete calendar months immediately preceding the date
of notice of termination. The term
“Gross Profit” means, for each particular Product, twenty-five (25%) percent of
the Selling Price for that Product during the Last 12 Month Period, as
reasonably determined by Distributor.
The term “Selling Price” means, for each particular Product, one hundred
thirty-five percent (135%) of the average laid-in-cost for that Product during
the Last 12 Month Period, as reasonably determined by Distributor. Supplier and Distributor acknowledge and
agree that such liquidated damages plus the amounts paid to Distributor for
inventory under paragraph 16(b)(i),
is a reasonable forecast of the probable loss as a result of such termination
because of the inconvenience and difficulty of estimating with exactness the
damages which may result. Accordingly,
the liquidated amount specified in this paragraph 16(a) is agreed upon as
liquidated damages and not as a penalty.
Notwithstanding
the foregoing, in the event that the Distribution Relationship for a particular
Product is less than twelve (12) consecutive complete calendar months as of the
date of notice of termination, the 12 Month Quantity for that Product will be
determined on a pro-rated, annualized basis calculated by multiplying the
quantity of that Product actually sold during the Lesser Period by a fraction
where the numerator is 12 and the denominator is the Lesser Period. The term “Lesser Period” means the number of
complete calendar months the Product in question was subject to the
Distribution Relationship immediately prior to the date of the notice of
termination. By way of illustration, and
not by way of limitation, if the Lesser Period is four (4) calendar months and
the quantity of Product sold during the Lesser Period is 10,000 units, then the
12 Month Quantity will be deemed to equal 30,000 units (10,000 units multiplied
by 12/4).
Supplier will be deemed to have cancelled
a portion of the Distribution Relationship for purposes of this paragraph 16 in
the event Supplier cancels only a particular brand or brands of Products, as
opposed to all of the Products. In such
event (i) Supplier will be deemed to have cancelled
the Distribution Relationship only with respect to the cancelled Products in
question (the “Affected Products”); and (ii) Supplier will then immediately pay
to Distributor liquidated damages specified in this paragraph 16(a) calculated
in the manner set forth above for the Affected Products only. Thereafter, the Distribution Relationship will
continue in full force and effect for the remainder of the brand or brands of
Products not so terminated, all in accordance with the terms and conditions
hereof.
Notwithstanding Distributor’s right to
receive compensation pursuant to this paragraph 16(a), Distributor hereby
reserves the right to pursue equitable remedies such as injunctive relief and
specific performance in the event Supplier breaches any of the provisions of
this Order, any Other Orders or the Distribution Relationship or otherwise attempts
to cancel all or a portion of the Distribution Relationship.
(b) If either party terminates the Distribution
Relationship for any reason whatsoever, then:
(i) Supplier will
purchase from Distributor and Distributor will sell to Supplier all of Distributor’s then saleable inventory at
laid-in-cost, f.o.b. Distributor’s warehouse.
Such purchase and sale of inventory will be consummated within ten (10)
days following the effective date of termination. “Saleable inventory” means undamaged Products
within Supplier’s then published date code or freshness policies, and that are
free from any and all liens, security interests and encumbrances. “Laid-in-cost” means the price paid by
Distributor for the Products or P.O.S. in question for delivery at the
applicable f.o.b. shipping point plus freight charges incurred by
Distributor in transporting same from such shipping point to its warehouse, plus
all federal, state and local taxes paid by Distributor with respect to the
purchase of such Product or P.O.S., as the case may be. Supplier will pay for such inventory when
delivered at Distributor’s warehouses; such payment will be by Supplier check;
and
(ii) Supplier will refund deposits on kegs
returned by Distributor within thirty (30) days following the date of the
termination.
17.
Confidential Information. During the course of Distributor’s
performance under the Distribution Relationship, Distributor may disclose
Confidential Information (as defined below) to Supplier. Supplier agrees not to disclose any
Confidential Information or any portion thereof to any Person and to only use
such information to
promote the Distribution Relationship between Supplier and Distributor, it
being understood that since such information is not generally known in the
trade, such information provides Distributor with a competitive advantage in
its market area. In that regard,
Supplier acknowledges and agrees that Distributor has taken and is taking
reasonable steps to protect the confidentiality of, and its legitimate
interests in, the Confidential Information.
The term “Confidential Information” means information concerning
Distributor’s business, financial and marketing plans, intellectual property
rights (including, without limitation, patents, trademarks, copyrights and
trade secrets), forecasts, strategies and statements, and customer related
information.