FORM OF DISTRIBUTION AGREEMENT

Exhibit 10.4

FORM OF DISTRIBUTION AGREEMENT

This Distribution Agreement (“Agreement”) is made and entered into as of the          day of                     , 20     by and between Jamba Juice Company, a California corporation (“JJC”), and                                                              , a                                      corporation (“Distributor”) with respect to the following facts:

A. JJC is an operator and franchiser of retail smoothie and juice stores.

B. Distributor is a warehouser and distributor of dry, chilled and frozen food service products (“Products”).

C. The parties desire to enter into a business relationship on the following terms and conditions.

NOW, THEREFORE, in consideration of the foregoing and in consideration of the covenants, promises, obligations, and agreements of the parties contained in this Agreement and other good and valuable consideration, the receipt and adequacy and sufficiency of which are hereby acknowledged by each party hereto by its execution hereof, it is hereby agreed as follows:

AGREEMENT

 

1.	DEFINITIONS AS USED IN THIS AGREEMENT

“Distributor” shall mean                                         .

“Company Store” shall mean a store owned or operated by JJC.

“Day Deliveries” shall mean deliveries that are made between 6:00 a.m. - 11:00 a.m. or between 1:00 p.m. - 9:00 p.m.

“Default” shall mean the material failure by either party to meet any of the terms set forth in this Agreement.

“Delivered Cost” shall mean the sum of Landed Cost and the applicable distributor “mark-up”.

“Delivery Performance Standard” shall mean Distributor’s truck and driver’s obligation to arrive prepared to deliver Orders within                                          of the scheduled delivery time.

“Distribution Territory” shall mean the States of                                         .

 

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“Franchised or Licensed Store” shall mean a store operated by an entity other than JJC pursuant to a license agreement or franchise agreement between JJC and that party.

“Full Case” shall mean the case in which Distributor receives the Product from the vendor.

“General Inventory” shall mean Product that is currently stocked by Distributor and not at the special request of JJC.

“Hardpack Tubs” shall mean frozen yogurts, sherbets, sorbets, and ice cream/ice milks packed in bulk containers.

“Incremental Product Cost” shall mean the cost differential between the original delivered price of an item and the delivered price of a substituted item.

“Inventory” shall mean General Inventory, JJC Critical Inventory, JJC Proprietary Inventory, Obsolete/Dead Inventory and Slow Inventory.

“IQF” shall mean individually quick-frozen, a process used for fruit and vegetables to preserve the Product.

“Isolated Stores” shall mean Stores located more than 250 miles from the closest distribution center of Distributor.

“JJC Critical Inventory” shall mean all Hardpack Tubs, juice concentrates, IQF fruit, soymilk, fresh produce, frozen bread products, and proprietary straws, cups, lids and napkins.

“JJC Proprietary Inventory” shall mean Product that is labeled or printed with the Jamba Juice logo, which is not to be sold to any customer other than the Stores, or which is purchased at the request of JJC and not otherwise stocked by Distributor.

“Key Drop Deliveries” shall mean deliveries completed via key drop between the time of the Store closing (or 9:00 p.m., whichever is earlier; except for any Store that normally has significant sales volumes after 9:00 p.m., then the time will be 10:00 p.m.) and Store opening (or 6:00 a.m., whichever is later).

“Landed Cost” shall mean the Product cost F.O.B. origin plus inbound freight costs to Distributor’s distribution center, as may be adjusted as provided in this Agreement, excluding early pay discounts, spoilage and other allowances.

“Month” shall mean a calendar month.

 

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“Obsolete/Dead Inventory” shall mean Products that do not move in a sixty (60)--day period from the date of receipt by Distributor or that have been discontinued by JJC.

“Orders” shall mean orders for Product submitted to Distributor by JJC.

“Other Distributors” shall mean other Distribution Company’s in which JJC is currently utilizing for service to its’ stores.

“Product(s)” shall mean all products purchased by JJC under this Agreement.

“Service Levels” shall mean a fraction, expressed as a percentage, whose numerator is the total number of items in an Order actually received and whose denominator is the total number of items in an Order.

“Slow Inventory” shall mean Products that move five Full Cases or less within a 30-day period.

“Stores” shall mean, individually or collectively, Company Stores and/or Franchised or Licensed Stores, as the context so permits or requires.

“Supply” or “Supplying” has the meaning given to those terms in Section 2.

“Business Day” shall be Monday – Friday, from 8am to 5pm.

“Extreme Remote Location” shall mean any store that is 300 miles or more away from any other JJC store.

 

2.	DISTRIBUTION SERVICES

2.1 Distribution for Company Stores. During the term of this Agreement, Distributor shall be the exclusive purchaser, warehouser, and distributor of all Products (with the exception of test items, equipment, marketing items and uniforms), as needed, to JJC Stores for the Distribution Territory. Distributor’s services shall include the purchase, warehouse, and distribution of Products to meet the requirements of JJC for sale in the Company Stores as described herein. (hereafter, “Supply” or “Supplying”).

2.2 Distribution for Franchised or Licensed Stores. During the term of this Agreement, Distributor agrees to offer to Supply any Franchised or Licensed Stores within the Distribution Territory on substantially the same terms and conditions as herein contained, provided such Franchised or Licensed Store shall have established and shall have maintained its creditworthiness to Distributor’s reasonable satisfaction. Distributor may discontinue Supplying any Franchised or Licensed Store upon the material failure of such Store to comply with the applicable terms of the agreement with the Store; provided, that Distributor shall first have given written notice thereof to JJC and allowed JJC a reasonable time period (not to exceed 30 days) to contact the Franchised or Licensed

 

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Store for purposes of correcting such failure. Distributor acknowledges and agrees that JJC shall not have any liability or responsibility for any obligations of a Franchised or Licensed Store to Distributor, including, without limitation, for payment for Products Supplied to Franchised or Licensed Stores. Any failure of a Franchised Partner store to meet Credit Terms as established in section 5 of this agreement may be placed on C.O.D. terms. If a store fails to meet the requirements under C.O.D. terms, then the store can be placed on a prepayment basis.

2.3 Appointment of Liaisons. Distributor and JJC shall each designate a managerial level person as a designated liaison to facilitate the performance of this Agreement.

2.4 Master Distribution Relationship. Distributor will act as a “Master Distributor” by consolidating shipments to remote, smaller distribution centers, in which DISTRIBUTOR is selling inventory to a third party distributor. For              shipments, the following fee schedule will apply: [insert].

Product will be verified at time of delivery to California forwarder. The load becomes the responsibility of freight forwarder once invoice is signed by freight forwarder.

 

3.

TERM

This Agreement shall commence for all Distribution Territories (excluding                                  territory) on                                 .

 

4.	PRICING POLICIES AND PRICE LISTS.

This Section sets forth the basic pricing, applicable discounts and price reporting. No changes shall be made to any of these provisions without the prior written approval of the JJC Chief Financial Officer or the JJC Director, Supply Chain Management. Distributor agrees to offer the same pricing and discounts it provides to JJC to each of the Franchised or Licensed Stores.

The pricing structure for JJC shall be as follows:

4.1 Directed Pricing. JJC will provide a “Directed” pricing model to the Distribution Center on or about the 20th of each month, in which contracted products are listed with FOB origin, inbound freight, landed costs and delivered pricing to the stores for said month.

Distributor’s request for updates to pricing must be submitted to JJC’s Contract Compliance Coordinator no later than the 15^th of the month prior to the month they will take affect.

Distributor agrees to sell all Products as calculated in the “Directed” pricing model, using Distributor’s Landed Cost plus “standard mark-up” percent.

 

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It is the Distributors responsibility to review the information for accuracy and to report any discrepancies within three Business Days of receipt of directed pricing. All pricing for that month shall remain fixed with no variability in an effort to ensure consistent cost of goods and invoice accuracy. All JJC’s non-contracted items may be reviewed and submitted to JJC for pricing updates on a monthly basis.

In the event of unstable pricing due to the enactment of “act of god clauses”, pricing will be adjusted on an “as need basis.” JJC and Distributor will work together to determine fair and equitable pricing.

Distributor shall have the right of first refusal to match the delivered cost to JJC Stores for products that are not delivered by Distributor, which shall remain firm for the duration of that specific contract. Any changes to the above pricing formula must have the prior written approval of the JJC’s Director of Supply Chain Management.

4.2 Basic Prices. The pricing structure shall be as follows:

Standard Mark-Up. Unless otherwise provided in this Agreement, Distributor shall sell all Products at Distributor’s Landed Cost plus “standard mark – up” (landed cost multiplied by percentage mark-up). Standard Mark-up is defined by the following declining scale and is based upon                                     :

__________________________

4.3 Adjustments and Discounts.

(a) Ordering Discounts. Single Invoices exceeding                                 , taken immediately on the respective invoice.

(b) Minimum Order Surcharge. Order’s not meeting the minimum order requirement of                                  will be assessed a surcharge of                                 , for every dollar short of the minimum. These surcharges are not to exceed                             , and will not be applied to emergency orders, or off day orders, that are subject to the unscheduled delivery surcharges.

(c) Missed Delivery Charge. In the event that a store has signed up for 2 or 3 times a week delivery, and the 2^nd or 3^rd delivery is not utilized, the store will be charges                                  for missing a scheduled delivery.

(d) Restocking Fee. There will be a                                  restocking fee applied to any Store that returns items that were ordered and delivered or on truck to be delivered.

 

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(e) Committed Delivery Schedules. Stores must commit to a specified delivery schedule, in which adjustments can be made to their schedule on a system wide basis twice per year. The available committed delivery schedules and periods consist of one (1), two (2), or three (3) day per week delivery schedules fixed for one or more of the following periods: March — October; October — March. Distributor will notify each Store in at least two (2) weeks prior to the start of each period of its option to submit in writing to Distributor its delivery schedule commitment for the subsequent period. If a Store does not submit a delivery commitment notice to Distributor prior to the start of a period, then the delivery schedule from the preceding period will apply. Stores may change their delivery commitment once during each period without charge or other penalty and Distributor may request a change to a Store’s delivery commitment, as long as the change does not adversely affect the Store.

4.4 Pricing Information.

(a) Directed Pricing Worksheet. On or before the twentieth (20) ^th day of each Month, JJC shall provide the Distributor with “directed pricing” for the up-coming months order guide. The Distributor shall complete the template by inserting expected pricing for the up-coming month and then send the template to JJC’s Contract Compliance Coordinator via email. All variances to JJC’s Directed Price must be approved prior to producing an order guide. Once prices are agreed upon, the price for all Products designated by JJC in the Directed Pricing model shall be in effect for the entire following Month starting on the first day of that Month.

(b) Customized Order Guides. Distributor agrees to provide monthly-customized order guides for Stores as requested by JJC. Distributor will deliver to each Store a copy of the order guide by the first day of each Month.

(c) Pricing by Landed FOB points. Pricing will be based upon the following FOB points and will only be changed with written authorization from the Manager of Supply Chain & Logistics:

[inserts]

FOB pricing in                                  to begin no later than January 1, 2006.

FOB pricing in                                  will be authorized at which time store growth allows for sustainable Full Truck Load (FTL) purchasing brackets.

(d) Mark-up Review Trigger. As protection against margin diluting due to average cost of goods dropping, a review of current case cost by market area will be done periodically and a drop greater than                                  will trigger a review to determine if margin needs to be enhanced to allow Distributor to equal the GP dollars afforded at the beginning of this contract.

 

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(Example:                                  average landed cost is                                  per case. If the product value were to fall below                                  then Product margin would be increased to enable Distributor the gross profit dollars equal to what would have been gained at the                                  value.)

(e) Product “transfer” pricing. Products that are “transferred” between Distributors’ own facilities will be at the sole expense of the distributor, unless specifically requested by JJC. If JJC requests inventory to be “transferred”, the following fees schedule will apply: (i) Regular transfers between                                  will be priced at a                                  mark-up (ii) Emergency transfers at the request of JJC or JJC vendors between                                  will be priced at                                  per pallet unless otherwise mutually negotiated, at time of emergency, at a common carrier competitive rate (iii) Regular transfers from                                  will be based on a “carrier quote.” In the event Distributor exercises the option to utilize its’ own trucks, the transfer fee will be based on “full truck load” pricing.

Mark-up fees will not apply to “transfers” made to any non-recognized FOB points. Currently,                                  are handled at Distributors’ expense.

4.5 Audit Rights. Distributor shall prepare and maintain, in accordance with generally accepted accounting principles consistently applied, complete and accurate books of account and records (specifically including, without limitation, the originals or copies of documents supporting entries in the books of account) covering and limited to all transactions arising out of or relating to this Agreement. JJC and its duly authorized representatives have the right, during regular business hours, for the duration of this Agreement and for two (2) years thereafter, to examine and audit, and make extracts from, such books of account and records and all other documents and material in the possession or under the control of Distributor with respect to the subject matter and the terms of this Agreement. All such books of account, records and documents shall be kept available by Distributor for at least two (2) years after the end of the period to which they relate.

 

5.	CREDIT TERMS

[insert]

 

6.	DELIVERY SERVICE

6.1 Delivery Schedule. Distributor shall provide Stores with one (1), two (2) or three (3) deliveries per week.

6.2 Delivery Method. Distributor shall deliver Products to the Stores with trucks predominantly dedicated to the Products. Stores unable to accept a Key Drop delivery will have Day Deliveries. Distributor may from time to time utilize common or

 

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other delivery services (for example, UPS or Federal Express) to ship Product to the Stores as long as the Delivered Cost is equal to or less than the Delivered Cost then in effect for the Product. Any increase in Delivered Cost as a result of utilizing an alternative delivery system must be approved in writing by JJC Purchasing prior to invoicing.

6.3 Order Procedure. All Orders will be faxed or called into Distributor by the mutually agreed-upon cut-off time (Distributor’s cut-off time is Noon). Ordering deadlines may be varied by region, and may be adjusted as necessary with mutual agreement in order to accommodate increased Store ordering activity. A late fee of                                  shall be added to Orders that are received after the applicable deadline, unless Distributor caused the delay. Distributor shall offer a toll-free 800 number for placing Orders and for responding to customer service issues.

6.4 Customer Service Matters. If requested by JJC, Distributor agrees to develop a computer based ordering system that is compatible with each Store and JJC’s corporate office computer network during the term of the Agreement. Distributor agrees to provide a dedicated sales representative at a managerial level for JJC who will have no involvement with any other retailers that have juice and/or smoothies as their core business. Distributor’s sales representative will be available 12 hours a day by a toll-free 800 number pager. Response time will be within two (2) hours Monday through Friday, between 8:00 a.m. and 6 p.m., and within four (4) hours on weekends, after hours, and holidays. Distributor shall provide Jamba Juice Company corporate offices restricted remote access to Distributor computers specifically for the purpose of accessing velocity and Inventory data regarding Store activity.

6.5 Day Deliveries. For Day Deliveries, there will be a two-hour delivery window from the scheduled delivery time. No deliveries to be made between the hours of 11:00 a.m. and 1:00 p.m., unless agreed to be store management. Should Distributor fail to deliver within such two-hour window, or deliver less Product than ordered to the Store, Distributor will pay Incremental Product Costs that the Store incurs, plus                                 , to cover the shortage (Incremental Product Costs will be limited to a maximum usage for a normal 24-hour period). The Distributor’s driver will be responsible for bringing the product into the store and placing the cases near their respective storage areas. The driver must check in the order with store personnel and verify invoicing accuracy. The driver must note all discrepancies on the invoice prior to obtaining a team member’s signature.

The parties may by mutual written agreement, change the scheduled delivery windows from time to time. Distributor will communicate needed changes on the delivery schedule to the Stores in writing at least one week prior to any change. Any major changes to delivery schedules must be communicated to JJC Manager of Supply Chain and Logistics for review and approval at least two weeks in advance of any proposed change.

All “day drop” deliveries, in which the driver has missed their delivery window, will be subject to the requirements of a “key drop” delivery. The driver will be

 

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responsible for putting the product on the shelves. We anticipate that stores routinely have product rotated and prepared for day deliveries.

6.6 Key Drop Deliveries.

(a) Delivery Procedures. For Stores participating in Key Drop Deliveries, Distributor’s driver will be responsible for delivering all freezer and chilled Products into the respective walk-ins via dolly, and shall stock Products on the shelves. All dry Products are to be placed together in the storage areas located in the back of each Store. Store management is responsible for preparing walk-in units for deliveries by moving all existing merchandise to the front of the walk-ins. When space is not available or Product has not been properly rotated prior to the delivery, Distributor’s driver may place Product on the floor of the walk-in. If Distributor’s driver is not able to make a scheduled delivery to a Store due to the fault of a JJC employee (i.e., locks or security codes changed without informing Distributor in advance), JJC will pay Distributor                                 , plus any applicable non-scheduled delivery surcharge for returning to the Store to make the delivery.

All “key-drop” deliveries, in which the driver has missed their delivery window, will continue to be subject to the above requirements.

(b) Honor System. Stores participating in Key Drop Deliveries will receive Product on an honor system. Any invoice or delivery discrepancies shall be brought to the attention of Distributor within four hours after the Store opening on the following day, and any credit will be reflected on the invoice for the following regular delivery date.

(c) Access Security. If a driver leaves a Store unlocked after a Key Drop Delivery, leaves keys in the lock or leaves a security system unarmed, Distributor will be charged                                  for each instance. The charge will be waived if the driver is not able to set an alarm due to a system malfunction or other cause beyond the reasonable control of the driver. The driver shall immediately inform Distributor’s Customer Service and the Store manager of such problem. The                                  charge will not be waived if the driver fails to timely notify such parties. If a Store experiences theft, burglary, vandalism or other loss as a result of a driver’s failure to secure a Store, Distributor will be liable for any resulting losses or damages to person or property.

6.7 Delivery Access. JJC shall ensure that Company Stores shall provide reasonable delivery access for Distributor’s drivers. Reasonable delivery access shall include parking for a truck with a minimum twenty-eight (28) foot trailer within one hundred fifty (150) feet of the Store’s receiving door and the ability to utilize a standard ice cream cart and/or dolly for making deliveries. Any Store that does not provide the aforementioned access is subject to a fair and reasonable delivery surcharge that is to be

 

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negotiated with JJC prior to the Store opening. Distributor shall inspect all new Store locations prior to accepting the Store’s opening Order and notify JJC Manager of Supply Chain and Logistics if a delivery surcharge is applicable.

6.8 Off-Day Delivery/Emergency Orders. Off-Day Delivery/Emergency Orders. Stores may request an unscheduled off-day delivery. For Stores other than Isolated Stores (i) all non-scheduled Sunday deliveries will be assessed a                                  surcharge and all non-scheduled deliveries made Monday through Saturday, that can be accommodated on a regularly scheduled route, will result in a                                  surcharge and (ii) all emergency Orders for same day delivery must be placed by 9:00 a.m. and will be subject to a                                  surcharge. For Isolated Stores (i) all non-scheduled Sunday deliveries will be assessed a                                  surcharge and all non-scheduled deliveries made Monday through Saturday, that can be accommodated on a regularly scheduled route, will result in a                                  surcharge and (ii) all emergency Orders for same day delivery must be placed by 9:00 a.m. and will be subject to a                                  surcharge, or applicable third party freight costs if Distributor is unable to accommodate the delivery on its own equipment. A DM or GM must approve any charges exceeding                                 , and approval must be submitted in writing (either via e-mail or fax). If a Distributor is able to UPS or airfreights overnight the necessary items, the                                  surcharge will be waived and the Store will only be charged the related UPS or airfreight fees.

6.9 Resolution of Shortages.

(a) JJC Critical Inventory-Shortages Caused by Distributor. Shortages of JJC Critical Inventory caused by Distributor will be handled in the following manner. If a Store is not able to wait for the next scheduled delivery, shortages will be remedied by Distributor and resolved at Distributor’s sole cost as quickly as possible but within a maximum of six (6) hours, except for Isolated Stores where the maximum will be twenty four (24) hours for such Stores. “Extreme Remote Locations” will be remedied within a maximum of forty-eight (48) hours. Should Distributor fail to deliver JJC Critical Inventory within a 24-hour period, unless otherwise noted, it may be held financially responsible for lost sales (documented via Store historical sales records) for any lost sales that Store may incur.

(b) All Other Shortages. All other Product shortages will be resolved within 24 hours at the cost of the party responsible for the shortage. Should Distributor fail to meet this commitment, Distributor shall reimburse Incremental Product Costs, plus                                 , that the Store incurs to cover the shortage. The Incremental Product Cost will be limited to a maximum usage of a normal 24-hour period.

 

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(c) Expedited Orders. If the Distributor has run out of product at the Distribution facility due to poor inventory management, inadequate safety stocks, etc. it is Jamba’s expectation that product will be Expedited (air freight, etc.) to ensure no interruption of service, at the Distributor’s expense.

The Distributor will expedite critical items when it is not an error on the part of the Distributor. Jamba will support the Distributor in identifying who the responsible party shall be for costs surrounding redelivery, deliveries may be done by a third party carrier at which time the responsible party will be billed by the Distributor once the third party carrier invoices the Distributor.

6.10 New Stores. JJC agrees to inform Distributor in writing at least thirty (30) days in advance of each new Store opening within the Distribution Territory. New Stores will place their opening Orders with Distributor at least ten (10) days prior to the requested delivery date and Distributor will confirm the opening Order delivery date three (3) days prior to the delivery. Any change by the Store to the opening Order delivery date once the Order has been placed with Distributor must be made at least two (2) days prior to the opening Order delivery date or the Store shall be subject to a one-time special handling charge of                                 .

 

7.	SERVICE LEVEL

7.1 Service Level. Distributor shall maintain a minimum Service Level of                                  on JJC Critical Inventory and                                  on all other Inventory, unless due to: (i) a negligent or wrongful act or omission on the part of JJC, or (ii) mechanical failure beyond the reasonable control of Distributor or (iii) unusual and unexpected traffic conditions (e.g., “sig alert” conditions) (iv) failure on behalf of Jamba Juice vendors to deliver based upon specific delivery dates.

7.2 Delivery Performance Standard. Distributor shall maintain a Delivery Performance Standard of                                  for On-time deliveries;                                  for Deliveries without Complaint;                                  Perfect Order Rate;                                  aggregate Inventory Accuracy per item. Failure to meet the Delivery Performance Standards will be evidenced by a copy of the invoice relating to the delayed delivery, with a brief explanation of why delivery was late, signed, time noted, and dated by the Store Manager.

7.3 Performance Review. Distributor and JJC shall review Distributor’s actual performance against the Service Level and the Delivery Performance Standard on a quarterly basis. Failure by Distributor to meet the Service Level and/or the Delivery Performance Standard for two (2) consecutive quarters shall constitute an incurable Default and will result in (i) JJC’s right to cancel this Agreement without penalty to JJC pursuant to Section 24 and 25 hereof, and (ii) at JJC’s option, transfer of the Inventory to JJC’s designated agent at Distributor’s Landed Cost without mark-up following thirty (30) days’ notice to Distributor.

 

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7.4 Service Contacts. The Distributor will offer a toll-free number for placing orders and customer service issues. The Distributor agrees to provide a customer service representative for the JJC account. The Distributor will provide JJC store management with a list of contact telephone numbers to reach someone after hours or for emergencies.

7.5 No substitutions. will not be permitted without the prior approval of JJC. The purchase price for any substituted items, provided the substitution is the result of an error by Distributor, shall be based upon the lower of (i) the Landed Cost of the substituted item, or (ii) the Landed Cost of the original item ordered. If the substitution is the result of a negligent or wrongful act or omission on the part of JJC or other causes beyond the reasonable control of Distributor, then the purchase price shall be Distributor’s Landed Cost plus the applicable mark-up as provided in Section 4.

 

8.	CONFIDENTIALITY

Distributor recognizes that it may require or be provided with Confidential Information (as hereinafter defined) of JJC in the course of performing its obligations hereunder, and acknowledges that such Confidential Information is unique in nature and of great proprietary value to JJC. Accordingly, in consideration of the Distributor’s receipt of such Confidential Information, Distributor agrees that it shall not, at any time, for as long as any Confidential Information shall remain confidential or otherwise remain wholly or partially protectable, directly or indirectly, use or disclose any such Confidential Information for any purposes other than strictly for the purposes described in this Agreement. Distributor shall take all measures necessary, including limiting disclosure to those of its employees who need to know Confidential Information in order to perform their duties, to safeguard such Confidential Information in order to prevent it from falling into the public domain or into the possession of persons other than those persons authorized to have any such information, and will not remove any copyright notice, trademark notice or other proprietary legend set forth on or contained within any of the Confidential Information. Distributor shall return all Confidential Information of JJC immediately upon the request JJC. For purposes of this Agreement, “Confidential Information” shall mean the following, whether in written, oral, electronic, or other form: any and all trade secrets, technology, knowledge, designs, concepts, ideas, information, formulas, patterns, compilations, programs, devices, methods, techniques or processes that derive independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from their disclosure or use, including, but not limited to, any study, plan, report or data pertaining to JJC, any information about JJC’s products, methods of doing business, profit or sales, information about markets, information about customers, and all other matters concerning JJC’s business methods, and information that Distributor develops, assists in developing, or discovers as a result of its relationship with JJC.

The obligations set forth in the immediately preceding paragraph shall not apply to Confidential Information to the extent that Distributor can demonstrate that such

 

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Confidential Information: (i) has been in Distributor ‘s possession prior to disclosure to it by JJC; (ii) has been approved for release by written authorization of JJC; (iii) is or becomes part of information in the public domain through no fault of the Distributor; or (iv) properly comes into the possession of Distributor from a third party not under any obligation to maintain the confidentiality of such Confidential Information. In addition, Distributor may disclose Confidential Information pursuant to a judicial or other government order, in which case the Distributor agrees to notify JJC prior to making any disclosure so that JJC may seek other legal remedies to maintain the confidentiality of such Confidential Information and to comply with any protective orders obtained by the JJC with respect to such disclosure.

Distributor shall ensure that all its employees and sub-contractors pursuant to this Agreement (if any) who have access to any Confidential Information shall be made aware of and subject to these obligations.