1. Title to MICHAEL DAVID WINERY Products passes to Buyer when they have been loaded upon a common carrier at MICHAEL DAVID WINERY’S premises or designated warehouse and risk of loss passes to Buyer upon the earlier of delivery or placement with a carrier. Buyer shall pay all taxes and shipping costs. Payment for Products is due to MICHAEL DAVID WINERY within 30 days of invoice. Payment shall be by EFT, or otherwise as MICHAEL DAVID WINERY may direct in writing. Payments over 30 days shall be subject to interest at 1.5% per 30-day period. MICHAEL DAVID WINERY reserves the right to reassess Buyer’s creditworthiness or require payment CBD or COD at any time. Buyer acknowledges these Terms and Conditions constitute a security agreement between MICHAEL DAVID WINERY as secured creditor and Buyer as debtor for the purposes of the Uniform Commercial Code. Buyer agrees to execute and deliver to MICHAEL DAVID WINERY such financing statements and other instruments as MICHAEL DAVID WINERY may reasonably request to perfect its security interest. MICHAEL DAVID WINERY is not liable for any incidental, consequential or special damages, interest, costs or expenses, or for loss or use or lost profit or wages, incurred by Buyer in any fashion or manner in connection with the sales or use of the goods, whether or not MICHAEL DAVID WINERY knew such damages might be incurred and Buyer may not off-set any costs against the invoice payment unless approved in writing by MICHAEL DAVID WINERY.

2. Distributor buyers shall: (a) possess all necessary state and federal licenses and permits and will keep the same in force; (b) protect MICHAEL DAVID WINERY’S trademarks, confidential information and business plans and shall cooperate with MICHAEL DAVID WINERY (at MICHAEL DAVID WINERY’S cost) in the defense or prosecution of any action related to MICHAEL DAVID WINERY’S trademarks or confidential information; (c) not transfer their rights to distribute MICHAEL DAVID WINERY Products in any way unless they have obtained permission in writing from MICHAEL DAVID WINERY; (d) provide such storage, warehousing, delivery, merchandising, marketing and sales service to MICHAEL DAVID WINERY as shall be necessary to properly market, sell and protect the Products, and (e) provide such depletion, sales and other reports as MICHAEL DAVID WINERY requests.

3. If the law of the state in which Distributor does business requires procedures, times within which to act, respond to notices or cure defaults other than those set forth in these Terms and Conditions, such laws and regulations shall apply; provided, however, that the obligations, rights and responsibilities of Distributor shall be interpreted as set forth in these Terms and Conditions to the fullest extent not inconsistent with such law or regulation.

4. California law governs these Terms and Conditions. The term of Distributor’s appointment is at-will, is renewable annually on 30 days notice, and may be terminated by MICHAEL DAVID WINERY on 30 days notice at any time. Breach of any promise made by Distributor or failure of Distributor to meet depletion and account placement requirements mutually agreed to between the parties shall be “good cause” for the purposes of any state law.

5. If any dispute occurs related to MICHAEL DAVID WINERY, MICHAEL DAVID WINERY Products or Distributor’s rights in to continue distributing MICHAEL DAVID WINERY Products, Distributor agrees that the same shall be resolved by arbitration in San Francisco in accordance with the Comprehensive Rules and Procedures of JAMS or its successor then in effect, and judgment upon the award rendered shall be final and binding on the parties. The arbitrators are not empowered to award damages in excess of compensatory damages, but shall include in the final award an allocation of attorneys’ fees, costs and expenses incurred in the arbitration, whether or not such fees, costs and expenses would otherwise be recoverable under applicable statues and rules of Court. The arbitrator shall render the award in writing, explaining the factual and legal basis for the decision as to each of the principal issues. The parties and each of them expressly agree that any petition to confirm, modify or enforce the arbitral award, other than for nonpayment of goods sold and delivered, shall be resolved in a State or Federal Court of competent jurisdiction in San Francisco, to which jurisdiction the parties submit.

6. MICHAEL DAVID WINERY reserves the right to establish standards of re-sale for its Products that protect the brand image and value. MICHAEL DAVID WINERY specifically reserves the right to terminate sales to accounts that engage in below-cost price promotions that harm the brand, or in practices (such as bait and switch) that are anticompetitive or violate the law of any state. MICHAEL DAVID WINERY also reserves the right to terminate sales to accounts that repeatedly use “lost leader” advertising on its products that damages the image or reputation of the brand.

7. These Terms and Conditions apply to any goods purchased from MICHAEL DAVID WINERY.