                                 CODE OF VIRGINIA

NOTICE OF INTENT TO TERMINATE (§ 4.1-506)

A. Except as provided in subsection F, a brewery shall provide a wholesaler at
least ninety days&#8217; prior written notice of any intent to amend, terminate,
cancel or not renew any agreement. The notice, a copy of which shall be mailed
at the same time to the Board, shall state all the reasons for the intended
amendment, termination, cancellation or nonrenewal.

B. Where the reason relates to a condition or conditions which may be rectified
by action of the wholesaler, he shall have sixty days in which to take such
action and shall, within the sixty-day period, give written notice to the
brewery if and when such action is taken. A copy of the notice shall be mailed
at the same time to the Board. If such condition has been rectified by action of
the wholesaler, then the proposed amendment, termination, cancellation or
nonrenewal shall be void and without legal effect. However, where the brewery
contends that action on the part of the wholesaler has not rectified one or more
of such conditions the brewery shall within fifteen days after the expiration of
such sixty-day period request a hearing before the Board to determine if the
condition has been rectified by action of the wholesaler.

C. Where the reason relates to a condition which may not be rectified by the
wholesaler within the sixty-day period, the wholesaler may request a hearing
before the Board to determine if there is good cause for the amendment,
termination, cancellation or nonrenewal of the agreement.

D. Upon request in writing within the ninety-day period provided in subsection A
from such brewery or wholesaler for a hearing, the Board shall, after notice and
hearing, determine if the action of the wholesaler has rectified the condition
or, as the case may be, if good cause exists for the amendment, termination,
cancellation or nonrenewal of the agreement.

E. In any proceeding brought pursuant to this section in which the existence of
good cause is an issue, the brewery shall have the burden of proving the
existence of good cause. Where a petition is made to the Board in a timely
manner for a determination, the agreement in question shall continue in effect
pending the Board&#8217;s decision and any judicial review thereof, except in
any case in which the Board makes a finding that there is good cause, as defined
in &#xA7; 4.1-505, for the amendment, termination, cancellation, or nonrenewal,
in which case the brewery may, unless otherwise ordered by a court of record,
discontinue the agreement in question.

F. No notice shall be required and an agreement may be immediately amended,
terminated, cancelled or allowed to expire if the reason for the amendment,
termination, cancellation or nonrenewal is:

   1. The bankruptcy or receivership of the wholesaler;

   2. An assignment for the benefit of creditors or similar disposition of the
   assets of the business other than the creation of a security interest in the
   assets of a wholesaler for the purpose of securing financing in the ordinary
   course of business; or

   3. Revocation of the wholesaler&#8217;s license.

HISTORY: 1978, c. 579, § 4-118.8; 1985, c. 549; 1993, c. 866; 1997, c. 183.