Common use of Rights and Duties on Termination Clause in Contracts

Rights and Duties on Termination. (a) Upon any termination of this Agreement, and irrespective of the reason for termination, Hawthorne shall have the right to (i) sell any Product inventory (which shall be owned by Hawthorne until sold to third parties or Product Owner) to Product Owner at Hawthorne's cost, and if Hawthorne exercises such option as to some or all of the inventory of Product, the Product Owner shall pay for the Product contemporaneously with the delivery thereof, with title to pass at the time of shipment from Hawthorne's warehouse, and with the Product Owner to pay all freight and insurance in connection with the shipment, and (ii) to sell any unsold Product Inventory, through any marketing channels Hawthorne is permitted to utilize under this Agreement, for a period of 24 months after such termination. (b) Upon any termination of this Agreement by Product Owner for any reason other than a material default hereunder by Hawthorne or a termination as a result of Hawthorne not selling the number of Product Units necessary to extend the term of this Agreement, as, for example, a termination on account of a breach of this Agreement by Product Owner, the Product Owner recognizes that Hawthorne may not have had the opportunity to earn the discount that it is providing by virtue of being paid only an amount approximating Hawthorne's cost in connection with the production of the Commercial, and by virtue of Hawthorne not being paid for certain other services hereunder as, for example, services in establishing agreements and procedures with Telemarketers, Product Suppliers, Merchant Accounts, and the like. Accordingly, the damages to Hawthorne as the result of any such termination shall include, but not limited to, the cost that Hawthorne would have been paid for the Commercial, but for the discount herein, and the fair value of any other services paid for by Hawthorne and not compensated for hereunder.