What happens to the Distribution Rights if the Bimbo Foods Bakeries Distribution agreement is terminated?

ble Breach uncured, triggering Bakery's right to terminate this Agreement under Section 11.1 above, if Distributor exhibits the same or materially similar behavior anytime from the expiration of the three-day cure period referenced above to 180 days thereafter.

• 11.3 ACTIONS FOLLOWING TERMINATION. If this Agreement is terminated, then the following provisions are triggered:
  • (a) Distributor continues to own the Distribution Rights until same are sold, but is no longer permitted to buy or sell Products, service any Outlets, or otherwise act in the capacity of an independent contractor/distributor of Bakery.
  • (b) Bakery may, either directly or by retaining a third-party to do so, sell Products to the Outlets. However, if Bakery elects to do so while Distributor still owns the Distribution Rights, then all such Product purchases and sales, as well as all expenses associated with operating the Distribution Rights, made during Distributor's ownership must be credited and/or charged, as applicable, to Distributor's Settlement account with Bakery. Distributor acknowledges that Bakery's expenses and costs of operation of the Distribution Rights, including short term labor and vehicle rental, will likely be higher than Distributor's costs for these same expenses.
  • (c) If Bakery, in its sole reasonable discretion, determines that Distributor would either make more money or be charged less money if service of the Distribution Rights post-termination of

this Agreement were performed solely by another Bakery independent contractor/distributor instead of Bakery, with such other independent contractor/distributor being credited and/or charged with all Product purchases and sales to the Outlets, and with such other independent contractor being responsible for its own operational costs associated with buying Product and selling same to the Outlets, then Bakery may, in lieu of the process described in Section 11.3(b) above, elect to have another Bakery independent contractor/distributor sell Product to the Outlets post termination of this Agreement in such a manner until the Distribution Rights are sold, in which case the charges and credits from selling Product to the Outlets post termination of this Agreement will not be applied to Distributor's Settlement account with Bakery.

• (d) Regardless of whether the Distribution Rights are serviced post-termination of this Agreement per the terms of Section 11.3(b) or 11.3(c), and in addition to all charges authorized during the sale or transfer of the Distribution Rights by Article 9, Bakery may continue to charge, or deduct from, Distributor's account with Bakery any charge or expense that had been authorized by Distributor as a charge or deduction prior to the termination of this Agreement, and do so until the Distribution Rights are sold. In addition, Distributor acknowledges and agrees that, without limiting that which can be charged, the following charges may be applied to Distributor's account post-termination of this Agreement:
  • a. Bakery's reasonable costs associated with removing Overcode and/or damaged Product in the Outlets, which includes reimbursement for any return credit issued to an Outlet for same;
  • b. Bakery's reasonable costs associated with remedying any Product purchase or sale by Distributor, or return credit for same, that in Bakery's sole reasonable discretion is/was unreasonably excessive when compared to historic sales for that or similar Product and that was executed by Distributor once Distributor knew or should have known that there was a reasonable likelihood of this Agreement being terminated and/or the Distribution Rights being sold; and
  • c. Bakery's reasonable costs associated with payments or other consideration Bakery provides to an Outlet, another Bakery independent contractor, or any third party to compensate said party for what Bakery, after a reasonable investigation, believes is or was fraud, theft, or damage committed or caused by Distributor, in any act or omission related to Distributor's obligations hereunder, against such party.
• (e) Termination of this Agreement requires Distributor to sell the Distribution Rights. If Distributor has not finalized a sale of the Distribution Rights that complies with all applicable provisions of this Agreement within 90 calendar days of the date of such termination, Bakery is authorized to either sell or purchase the Distribution Rights. Except when this Agreement is terminated per Section 2.2(d), any such sale or purchase of the Distribution Rights by Bakery must be for a price equal to or greater than the fair market value of such rights, which is to be

calculated by Bakery using like sales of similarly situated Bakery distribution rights, that were as close as reasonably possible in time and distance to the Closing, as comparables for such fair market value calculation. If this Agreement is terminated per Section 2.2(d), then Bakery may establish a reasonable price for such sale or purchase after taking into consideration the impact the law or final determination that triggered such termination has on the value of the Distribution Rights. The provisions of Section 9.3 apply to all sales or purchases of the Distribution Rights by Bakery as if Distributor initiated such sale.

ARTICLE 12 – TRADEMARKS, TRADE NAMES AND SOFTWARE

PERMISSION FOR USE.

Source: Item 23 — RECEIPTS (FDD pages 84–312)