Virginia Winery Distribution Company

Winery Registration:
To set up an account with the VWDC onlineorderdesk, please fill in the information requested below and then click the Submit button
Winery Information:

Winery Name:	*	Phone:	*
ABC Number:	*	Fax:
License Type:	*	ABC Wholesale Number:	* Not yet Registered with Wholesale Number	Toll Free:
Address:	*	Website:
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I wish to have the following user(s) granted access to the Virginia Wine Distribution Co. OnlineOrderDesk:

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System access rights:
Edit Company information	Change prices & discounts
Maintain other contacts	Generate invoices
Manage products	Manage Licensees

Last Name:

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Operating Agreement

THE FOLLOWING OPERATING AGREEMENT (“AGREEMENT”) BETWEEN THE VIRGINIA WINE DISTRIBUTION COMPANY (“VWDC”) AND YOU, A VIRGINIA FARM WINERY (“WINERY”), SUPERCEDES ANY PREVIOUS OPERATING AGREEMENT BETWEEN THE PARTIES AND IS EFFECTIVE UPON THE ACKNOWLEDGEMENT OF THE WINERY BELOW. THIS AGREEMENT HAS BEEN REVISED, AND MAY DIFFER FROM ANY PREVIOUS OPERATING AGREEMENT BETWEEN THE PARTIES. THE WINERY SHOULD READ THIS AGREEMENT IN ITS ENTIRETY BEFORE ENTERING AN ACKNOWLEDGEMENT BELOW. WHEREAS, Winery is a Virginia winery or farm winery that is licensed to produce and sell wine in Virginia; and WHEREAS, VWDC was established pursuant to authority granted by Va. Code § 3.2-102, is licensed as a wine wholesaler by the Virginia Board of Alcoholic Beverage Control (“ABC”) pursuant to Va. Code § 4.1-207.1, as well as by the U.S. Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (“TTB”), and maintains a principal office in Virginia as a wholesaler of Virginia wine; and WHEREAS, the Code of Virginia authorizes VWDC to act as a wine wholesaler of not more than 3,000 cases per year of Winery’s wine (“Wine”) to restaurants and shops for resale (“Retail Licensees”) in a designated sales territory within Virginia as set forth herein; and WHEREAS, the Parties desire that VWDC utilize space within the bonded warehouse of Winery and utilize Winery workers as agents acting under the management and control of VWDC to distribute Wine to Retail Licensees as set forth herein. NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants and conditions contained herein, the receipt and sufficiency of which are acknowledged by the Parties, Winery and VWDC hereby agree as follows: I. Term of Agreement A. The initial term of this Agreement shall commence on the effective date set forth above and shall continue until June 30, of the following calendar year unless sooner terminated pursuant to this Agreement. B. This Agreement shall automatically renew for additional one (1) year periods beginning on July 1 and ending June 30 of every succeeding year unless terminated as set forth herein. C. This Agreement shall be voidable at the sole option of VWDC if the General Assembly of the Commonwealth of Virginia fails to appropriate funding to VWDC to accomplish the purposes set forth in Va. Code § 3.2-102 and in this Agreement. D. Upon any termination of this Agreement, each Party shall immediately pay to the other party all unpaid amounts due, if any. E. All liabilities or claims of either Party which shall have accrued or arisen prior to termination shall survive the termination of this Agreement. II. Termination of Agreement This Agreement is terminable in the manner provided by Virginia law or pursuant to the mutual agreement of the Parties following written notice seven (7) days in advance to the other Party. III. Agency Created A. Winery workers shall act as temporary agents (“Agent” or “Agents”) of VWDC to promote, sell and deliver Wine to Retail Licensees on behalf of VWDC pursuant to the management and control of VWDC. 1. Winery workers shall act as Agents only when promoting, selling and delivering Wine to Retail Licensees on behalf of VWDC under the provisions of this Agreement. 2. Agents shall comply with the Operating Rules as posted on the VWDC operated Internet site, and as amended from time to time by VWDC, and shall comply with the terms and conditions for use of the transactional software comprising the Order System as defined and described below. 3. Agents shall comply with all state and federal laws governing licensed wholesale wine distributors. 4. Agents must perform only functions relating to VWDC business during time that Agents are acting on behalf of VWDC. Any Winery functions that Agents may be asked to perform must occur during time when Agents are acting as Winery employees. To ensure proper separation between the three tiers of distribution, all VWDC Agents must maintain records that show when Winery personnel are acting as VWDC Agents. Activities of a VWDC Agent include, but are not limited to, soliciting retail licensees, providing samples to retail licensees, moving orders into VWDC licensed space, processing purchase orders and invoices, and delivering orders. 5. Winery shall comply with all required state and federal employment laws and shall maintain personnel records, process payroll, pay wages, maintain necessary benefits and insurance, and withhold necessary taxes and social security payments as required, including separate records for time Agents spend performing duties as Agents and time Agents spend performing Winery duties. 6. Winery agrees to indemnify and hold harmless VWDC for acts or omissions of its workers acting as Agents that result in loss or liability to VWDC or to Winery. 7. Winery shall have the sole and exclusive right to select its workers and to determine the terms and conditions of their employment. From all its workers Winery shall provide a list of those workers it deems to be qualified to perform VWDC tasks, from which VWDC has the sole and exclusive right to designate those that will act as agents of VWDC (“Agents”). 8. All Winery workers authorized by Winery to act as Agents shall be designated in writing by Winery as Agents and provided to VWDC. Winery shall immediately notify VWDC in writing of the termination or addition of Winery workers on that list. 9. Winery shall provide to VWDC in writing all contact information for its Agents at all times during this Agreement, to include a business telephone number, fax number, e-mail address and mobile telephone number, as applicable. 10. Winery shall use only the designated Agents to sell and deliver Wine to Retail Licensees on behalf of VWDC. VWDC shall provide such advice and direction to Agents as it deems necessary and appropriate to fulfill VWDC’s obligations under this Agreement and Virginia Law. Winery may use other licensed wholesalers not affiliated with VWDC as appropriate. 11. Winery agrees to provide Agents to VWDC at no cost in exchange for wholesale distribution services rendered by VWDC to Winery under this Agreement. B. Winery Vehicles for Temporary Use by Agents 1. Agents shall use a Winery vehicle (“Agency Vehicle”) for delivery of Wine to Retail Licensees. 2. Winery is solely responsible for the licensing, insurance, maintenance and operation of the Agency Vehicle. 3. Winery agrees to indemnify and hold harmless VWDC for any acts or omissions of Agents while operating an Agency Vehicle on VWDC business. 4. Winery agrees to provide use of an Agency Vehicle to VWDC at no cost in exchange for the services rendered by VWDC for Winery under this Agreement. C. No Partnership Created 1. VWDC and Winery workers selected by VWDC shall have the relationship of Principal and Agent under this Agreement; nevertheless, they are otherwise independent legal entities. Nothing in this Agreement shall be construed to create a partnership, joint venture, co-employer, or joint employer relationship between the Parties. IV. License of VWDC Space in Winery’s Bonded Warehouse A. Winery hereby licenses to VWDC that portion of the Winery premises outlined on the written floor plan as provided to VWDC (“VWDC Licensed Space”). Agents shall, at Winery’s sole expense, install and maintain the Licensed Space as a distinct and physically secure area at which all Wine sold to VWDC by Winery shall come to rest prior to distribution to Retail Licensees. Any failure to properly maintain the VWDC Licensed Space may result in termination of this contract and loss of Winery’s VWDC License. a. The VWDC Licensed Space must be separate and secure from all other items in the area and physically secured from being accessed by anyone other than authorized Agents, VWDC personnel, and ABC or TTB agents. b. The VWDC Licensed Space must be appropriately sized to accommodate the regular and expected level of products to be processed through the VWDC Licensed Space. Winery may be required to adjust the size of its VWDC Licensed Space accordingly, and shall report all changes to the VWDC Licensed Space to VWDC and to TTB. c. The VWDC Licensed Space may only contain the following: VWDC records, wine invoiced from the Winery to the VWDC license, wine invoiced from the VWDC license to a licensed retailer awaiting delivery, wine invoiced as VWDC samples, and any equipment specifically used for orders processed through the VWDC license. The VWDC Licensed Space may not be used as storage for any product or equipment that is not properly invoiced to VWDC. B. VWDC shall secure all necessary wholesale wine licenses from ABC and TTB for the VWDC Licensed Space at its sole cost. Winery agrees to provide information and assist VWDC in procuring these necessary licenses. C. VWDC shall have exclusive right to use and occupy the VWDC Licensed Space, and Winery shall secure the VWDC Licensed Space to ensure that VWDC inventory, records and equipment contained within are maintained. 1. VWDC and Winery shall prohibit access to the VWDC Licensed Space by all persons other than ABC and TTB agents, VWDC management and VWDC Agents designated herein and other representatives of VWDC. 2. Winery shall invoice all wine used for sampling by VWDC Agents in accordance with ABC requirements. When not in use by VWDC Agents, partially used samples shall be stored in the VWDC Licensed Space until spoiled or depleted. 3. Agents shall maintain all VWDC records required to be maintained in the VWDC Licensed Space or electronically accessible from the VWDC Licensed Space, including, but not limited to, Winery invoices, VWDC purchase orders, wine sample invoices, retail delivery tickets and other documents required by ABC and TTB. The appropriate valid VWDC license from ABC shall be posted at the entrance to the VWDC Licensed Space at all times. 4. VWDC shall have the right, at its discretion, to have stored in the VWDC Licensed Space wines produced by other Wineries affiliated with VWDC, and Winery and Agents shall secure and protect such wine with an appropriate standard of care. Agents shall deliver such wine of other Wineries to licensed retailers as requested by VWDC. Such storage and delivery shall be in accordance with the Operating Rules and applicable laws, including laws and regulations of ABC and TTB. D. VWDC use of the VWDC Licensed Space shall be subject to such reasonable limitations as Winery may impose, including, but not limited to, restricting the hours of VWDC access to the VWDC Licensed Space to times when the Winery facility is open to Winery workers. Winery shall allow access to the VWDC Licensed Space by ABC or TTB at any time without restriction. E. Winery and VWDC Agents shall cooperate in the establishment of all reasonable precautions to protect all items in the VWDC Licensed Space from loss or damage due to vandalism, negligence or misuse. a. Winery shall reimburse VWDC for the cost of replacing items in the VWDC Licensed Space if they are damaged or destroyed as a result of the negligence of Winery workers. b. Should the VWDC Licensed Space or its contents be destroyed or damaged for reasons beyond the control of VWDC, VWDC bears no risk of loss. F. Winery warrants that this Agreement to license the VWDC Licensed Space to VWDC does not violate any other agreement, lease or restrictive covenant. G. Winery agrees to provide the VWDC Licensed Space to VWDC at no cost in exchange for the services rendered by VWDC to Winery under this Agreement. V. Initial Setup Requirements A. Government Licensure a. Winery shall be solely responsible for maintaining its winery license under federal, state and local laws. Failure to maintain Winery’s licenses shall be grounds for termination of this Agreement. b. VWDC shall be solely responsible for maintaining its wholesale license under federal, state and local laws. Failure to maintain VWDC’s licenses shall be grounds for termination of this Agreement. c. Winery agrees to assist VWDC as requested in securing and maintaining an ABC wine wholesale license for the VWDC Licensed Space. VWDC will be responsible for preparing and submitting the ABC wine wholesale license application, and VWDC is responsible for any fees and renewal applications relating to such ABC wine wholesale license. d. Winery shall amend its TTB basic permit to comply with any TTB regulations required to allow the transactions contemplated by this Agreement, including, but not limited to, enabling the licensure of the VWDC Licensed Space. B. Primary Area of Responsibility (Sales Territory) 1. The Primary Area of Responsibility (Sales Territory) assigned to VWDC by Winery shall be the geographic area designated by independent cities and counties in the Commonwealth of Virginia (“Territory”), set forth in writing on an approved form. 2. Winery grants to VWDC, and VWDC accepts from Winery, the primary responsibility for the solicitation of orders for and distribution of up to 3,000 cases per year of Wine to Retail Licensees in the Territory. As a rule in monitoring distribution, ABC has considered a case of wine to be equal to 9 liters. 3. The Territory shall not include any geographic areas, cities and counties that have been assigned by Winery to other licensed wine wholesalers. Winery shall be restrained by VWDC from selling wine through VWDC to retailers located outside Territory. Nothing in this agreement shall exempt or limit Winery’s responsibility to comply with applicable laws or imply VWDC has any responsibility or liability for Winery’s sales and compliance with applicable laws. 4. Winery agrees to allow VWDC to notify ABC of its assignment of this Territory to VWDC. C. Order System 1. VWDC shall secure and utilize the hardware and software necessary to enable the transactions anticipated by this Agreement at its sole cost and expense (“Order System”), except that Winery shall be required to provide the hardware necessary to access the Internet. 2. VWDC currently uses OnlineOrderDesk.com for its Order System. The Winery shall maintain a registered account with OnlineOrderDesk, or any successor system as designated by VWDC, and all orders processed by VWDC Agents shall be processed through such account. The Winery shall be responsible for familiarizing all Agents and winery-designated administrators on the use and features of the Order System. 3. The Winery shall have and is solely responsible for maintaining access to the Internet to receive the necessary wholesale purchase orders from VWDC, to send to VWDC Winery’s invoices for Wine purchases and any other statements or information that the Order system is designed to facilitate. Winery is responsible for the accuracy of the information Winery, its designated administrators, or its VWDC Agents inputs into the Order System. 4. VWDC will offer periodic training sessions for Winery workers to learn the operation of the Order System. VWDC shall make technical assistance available by telephone to Winery as set out in the Operation Rules. D. Winery Banking Information 1. Winery shall provide VWDC with wiring instructions for electronic funds transfer of all payments by VWDC to Winery in writing on an approved form. 2. Any payments required by this Agreement to be made between the parties may be made by check, electronic funds transfer or wire transfer. 3. Agents that physically collect payment from Retail Licensees at the time of delivery for deliveries of Wine shall promptly transmit such funds to VWDC in such manner as VWDC may specify in the Operating Rules. 4. Winery’s VWDC Agents shall be responsible for ensuring that complete funds are collected promptly from each retail licensee upon delivery of any product in accordance with ABC rules and other applicable laws. Repeated failure to promptly submit collected funds to VWDC may result in termination of VWDC’s obligations to Winery under this Agreement. E. Wine Pricing List 1. Winery will provide VWDC or its authorized representatives with a list of all Wines to be distributed by VWDC, including the ABC product code and individual product pricing that Winery will charge VWDC in writing on an approved form. Winery shall refer to the Operating Rules for details about such pricing. 2. VWDC shall consult with the Winery on the VWDC price to Retail Licensee for Wines, but such pricing shall be in the sole discretion of VWDC and in compliance with all applicable ABC laws and regulations. 3. Prices charged by VWDC to Retail Licensees for Wine purchased by VWDC from Winery shall include the Virginia wine excise taxes and the VWDC Transaction Fee. VI. Transaction Fees A. Fees for the wholesale services provided by the VWDC shall be set by its Board of Directors and may be changed at any time at its sole discretion 1. For the initial term of this Agreement, VWDC shall be entitled to deduct from each payment to Winery a fee of $5.00 per transaction for each delivery to each Retail Licensee, plus a $1.00 fee per transaction to support the administration of the Order System, for a total fee of $6.00 per transaction (“Transaction Fee”). 2. Every transaction initiated by Winery shall be charged this Transaction Fee, regardless of the quantity of wine being distributed in the transaction and regardless of whether it is the initial transaction, a replacement transaction, or a correction transaction. B. Any change in the Transaction Fee by the VWDC shall be effective when posted as an Operating Rule. C. Payments by VWDC to Winery for Wine shall be by electronic funds transfer only. Winery shall provide the bank name, account number, branch location, contact name and telephone number in writing on an approved form. VII. Additional Obligations of VWDC A. VWDC shall: 1. Enable the promotion, sale and distribution of Wine to existing and new Retail Licensees in the Territory; 2. Process, maintain records and remit applicable taxes on sales and deliveries of Wine by Agents; 3. Pay Winery invoices within 30 days of receipt; 4. File public reports as required by law on the quantity of Wine sold by VWDC for Winery; 5. Maintain a reasonable level of general liability insurance for the protection of VWDC, Winery and Agents when doing business of VWDC; and 6. Verify Retail Licensee information with the ABC and maintain the database of Retail Licensee names, ABC license numbers, vendor numbers and other information necessary to comply with this Agreement. VIII. Additional Obligations of Winery A. Winery shall: 1. Through it VWDC Agents, use its best efforts to promote interest among Retail Licensees in its Wine and support VWDC’s mission to distribute and sell Virginia Wine to Retail Licensees; 2. Use its best efforts to support and accommodate VWDC’s Agents’ efforts to maintain the security of the VWDC Leased Premises; 3. Register its Wine labels and ensure that all Wine sold and distributed hereunder shall be packaged and labeled in conformity with federal, state and local laws; 4. Ensure that all Wine sold and distributed hereunder shall be merchantable and shall meet all standards of quality imposed by federal law and by the laws of the Commonwealth of Virginia; 5. Maintain appropriate worker’s compensation and employer’s liability insurance for all Winery employees who act as Agents; and 6. Read and comply with the Operating Rules and the terms of this agreement, including any updates to the Operating Rules which may be made by VWDC at VWDC’s sole discretion. IX. Operating Rules A. The Operating Rules shall be posted by VWDC on its website, www.vwdc.org, for use by all participating Wineries. B. The Operating Rules may be revised by VWDC at any time. It is the responsibility of the Winery to use the most recent version of these Operating Rules as shown on the VWDC website, www.vwdc.org. C. Questions regarding the Operating Rules should be directed to the VWDC Chairman or his designee at the e-mail address listed in the Operating Rules. X. Miscellaneous A. All notices, demands and requests contemplated hereunder by each Party to the other shall be in writing, and shall be deemed given when delivered by hand, or national recognized overnight courier, or by FAX, or postage prepaid, registered, or certified US mail with return receipt requested: If to Winery (Please provide to VWDC in writing appropriate contact information as Winery wishes to be contacted. VWDC shall not be responsible for any failure of Winery to receive communication from VWDC if Winery’s provided contact information is incomplete or incorrect). If to the VWDC: Virginia Department of Agriculture & Consumer Services 102 Governor Street Richmond, VA 23219 Attn: Commissioner’s Office Telephone: (804) 786-3501 FAX: (804) 371-2945 or to such other address or to such other person as may be designated by notice given from time to time during the term by one Party to the other. B. This Agreement and each Party’s rights and obligations hereunder shall not be transferred or assigned by either Party without the prior written consent of the other Party. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of each Party’s permitted successors and assigns. C. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party to be charged. No waiver by either Party of any breach or default of any of the covenants or agreements herein shall be deemed to be a waiver to any subsequent or similar breach or default. D. This Agreement contains all the terms, provisions and agreements between the Parties hereto concerning the subject matter set forth herein, and supersede any prior negotiations, agreements, letters of intent, understandings or arrangements between the Parties hereto with respect to the subject matter hereof. No right or remedy conferred by this Agreement on either Party is exclusive of any other right or remedy herein and the Parties, and each of them, shall have all additional rights provided by law under the laws of the Commonwealth of Virginia. E. If any provision of this Agreement shall be held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law. If this cannot be accomplished, the provision shall be stricken, and the remaining provisions of this Agreement shall remain in full force and effect. F. This Agreement may be executed in several copies, each of which shall be an original and all of which shall constitute the same instrument. A facsimile of this Agreement, including the signature pages hereto, will be deemed an original. G. Provisions of this Agreement which, by their terms, contain continuing obligations shall survive termination of this Agreement. H. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. I. This Agreement shall be deemed to have been made and shall be construed and interpreted in accordance with the laws of the Commonwealth of Virginia, without regard to any choice of law provisions. J. Except for payments due under this Agreement, neither Party will be responsible for any failure to perform due to causes beyond its reasonable control including, but not limited to, acts of God, war, riot, embargoes, acts of civil or military authorities, changes in applicable law, denial of or delays in processing of export license applications, fire, floods, earthquakes, accidents, strikes, or fuel crises. The affected Party shall reasonably attempt to give prompt written notice thereof to the other Party, and shall make reasonable efforts to fully perform after the event has subsided. K. In the event of litigation relating to this Agreement, each Party shall be entitled to collect from the other all costs and expenses incurred by the prevailing Party relating to such litigation, including attorneys fees, as determined by a court of law. No provision herein shall be considered a waiver of sovereign immunity. L. In exercising its rights and performing its obligations hereunder, each Party hereto and its officers, directors, workers and agents shall not, during the term of this Agreement, engage in activity or conduct which may be reasonably expected to harm or damage the other Party or its reputation among its customers or suppliers. M. In exercising its rights and performing its obligations hereunder, each Party hereto and its officers, directors, workers and agents shall at all times have a working knowledge or and comply with all applicable laws and regulations, including but not limited to, the state and federal laws and regulations governing the production, distribution and sale of alcoholic beverages.
I have read and agree that winery will comply with the Operating Agreement.I am authorized to make this agreement on behalf of winery.
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Operating Rules:

Click to read the Operating Rules

I have read and understand the Virginia Winery Distribution Company's Operating Rules.