Common use of Wholesale Business Clause in Contracts

Wholesale Business. (1) Licensee may make Wholesale Sales of Licensed Goods and Services, solely to Approved Wholesalers in the Territory. (2) Notwithstanding anything to the contrary in this Agreement, Licensee shall not sell Licensed Goods and Services to any Approved Wholesaler (a) unless Licensee believes in good-faith that such Approved Wholesaler has a reputation and standing as a high-quality store selling Goods and Services consistent with the high quality of the Licensed Goods and Services and the reputation, image and prestige of the Marks or meets the Quality Standard; and/or (b) if Licensee has or should have reason to believe that the Approved Wholesaler intends to sell, ship or otherwise divert such Licensed Goods and Services outside the Territory. Additionally, if Licensor in its good-faith judgment should ever determine that a particular account constituting an Approved Wholesaler for any reason has failed to acquire and/or maintain a reputation and standing as an account selling Goods and Services consistent, in all material respects, with the reputation, image and prestige of the Marks, then upon Licensor’s written notice to Licensee sufficiently detailing Licensor’s concern Licensee shall participate in good faith discussion with Licensor around a solution to mitigate Licensor’s concern, and Licensee shall consider in good faith removing such account from the definition of Approved Wholesaler, with any such removal effective upon notice to Licensor; provided, however, that Licensee shall have the right to fulfill any then-existing orders already received from such account, with any such sales constituting Net Sales for purposes of the Agreement. The removal of any account from the list of Approved Wholesaler shall not result in any reduction of any minimum payment obligations, minimum sales obligations and/or minimum renewal thresholds under this Agreement. Licensee shall have no obligation to remove the account of any Affiliated Approved Wholesaler. (3) Licensee shall have the right to set its wholesale pricing to Approved Wholesalers in its good faith discretion; provided, however, such pricing shall be consistent with the prestige of the Licensed Property and high-quality products associated therewith. (4) The parties agree that Royalties accrue on Retail Sales by any Affiliate of Licensee to a non-Affiliate third-party, and that no Royalties accrue on any Wholesale Sales to an Approved Wholesaler that is an Affiliate of Licensee.