Sample Business Contracts

Product Manufacture and Supply Agreement - Hansen Beverage Co. and Seven-Up/RC Bottling Co. of Southern California Inc.

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                               (The "Agreement")

This Agreement  made this 15th day of April 2003 by and between Hansen  Beverage
Company,  a Delaware  corporation,  having a principal place of business at 1010
Railroad  Street,  Corona,  CA 92882,  ("Purchaser")  and  Seven-Up/RC  Bottling
Company of Southern California, Inc., a Delaware corporation, having a principal
place of business at 3220 East 26th St., Los Angeles, CA 90023 ("7UP/RC").

WHEREAS,  the Purchaser  desires 7UP/RC to manufacture and supply Purchaser with
Monster  Energy Drink in 16 oz.  packages and 7UP/RC agrees to  manufacture  and
supply such products under the terms and conditions contained herein.

NOW THEREFORE,  in consideration of the mutual covenants hereinafter  expressed,
the parties agree as follows:

                                I - DEFINITIONS

     1.1  "FDA" means the United States Food and Drug Administration.

     1.2  "Product(s)" means an energy drink, more fully described in Exhibit A,
          meeting  Purchaser's  specifications and manufactured for Purchaser by
          7UP/RC in finished form suitable for use by the consumer, packaged and
          labeled under the Purchaser's  trademark for marketing by Purchaser or
          its   subsidiaries   in  the  United  States,   its   territories  and

     1.3  "Specifications"   mean  the   written   specifications   for  Product
          including,  but not limited to, written formulations,  specifications,
          process   instructions,   bottle  quantity,   packaging  and  labeling
          instructions, which are attached as Exhibit A.

     1.4  "Branded Materials" means all finished Product and raw materials which
          are  unique  to  Product  and may only be used by  7UP/RC  to  produce

                       II - PURCHASE AND SALE OF PRODUCTS

     2.1  Obligations of Parties.  Purchaser shall purchase Products from 7UP/RC
          from  time  to  time  on the  terms  and  conditions  set  out in this
          Agreement,  during the Term of this  Agreement.  7UP/RC shall process,
          test, label,  store, and sell Products to Purchaser in accordance with
          the terms and conditions set out in this Agreement, during the term of
          this Agreement.


          7UP/RC agrees that it shall not use the  Equipment  referred to in 2.8
          below for the production,  at its Buena Park,  California facility, of
          any  competitive  energy  drinks  without  Purchaser's  prior  written
          approval; provided however that if Purchaser fails to purchase _______
          cases of Products  with a tolerance  of 20% i.e., a minimum of _______
          cases, per year from 7UP/RC during the term of this Agreement,  7UP/RC
          shall  thereafter be entitled to use the Equipment for the  production
          of other  energy  drinks  provided  that in such event 7UP/RC shall be
          obliged to make payment to the  Purchaser of an agreed  royalty fee in
          respect of such  other  energy  drinks on a per case  basis  until the
          Purchaser is reimbursed  for the costs  incurred by it to purchase the
          Equipment concerned.

     2.2  Forecasts.  Prior to the beginning of each calendar quarter, Purchaser
          shall  provide to 7UP/RC a written  forecast of the number of cases of
          Product  by flavor  and  package  size  expected  to be ordered in the
          following three (3) month period. Based on the forecast,  7UP/RC shall
          purchase raw materials (sodium citrate,  citric acid), in amounts,  in
          7UP/RC's reasonable  opinion,  are required to fill orders during such
          period.  All other raw materials shall be supplied by Purchaser at its
          expense  including the expense of delivering raw materials to 7UP/RC's
          facility for  production of Product.  Purchaser  shall be  financially
          responsible for all out-of-date Product and raw materials.

     2.3  Orders.  Purchaser shall fax a purchase order for Product to 7UP/RC at
          least ten (10)  business  days prior to the  expected  delivery  date.
          Product will be  scheduled  for  production  by 7UP/RC at the earliest
          possible date.  All orders shall be for full  truckload  quantities of
          Product.  The terms and conditions  contained in any order form issued
          by Purchaser  under this Agreement shall be null and void and entirely
          surpassed by the terms and  conditions  of this  Agreement  except for
          those terms proposed by Purchaser and specifically accepted by 7UP/RC.

     2.4  Rejected Products/Shortages.  Purchaser shall notify 7UP/RC in writing
          of any claim relating to damaged,  defective or nonconforming  Product
          or any shortage in quantity of any  shipment of Product.  In the event
          such  rejection or shortage is due to 7UP/RC fault,  error or neglect,
          7UP/RC shall  replace the rejected  Product or make up the shortage in
          the next production run following receipt of such notice at no cost to
          Purchaser  and  shall  make   arrangements   with  Purchaser  for  the
          disposition of any rejected Product.

     2.5  Title and Risk of Loss.  Purchaser shall assume title and risk of loss
          for Product ordered upon delivery of Product to transport.


     2.6  Price and Payment.  7UP/RC shall charge  Purchaser and Purchaser shall
          pay for Product as specified in Exhibit A, unless 7UP/RC and Purchaser
          agree in writing to a  different  price.  Such  prices  shall be fixed
          during the term of this Agreement  except as provided by Paragraph 2.7
          below. 7UP/RC shall invoice Purchaser for each shipment of Product and
          Purchaser  shall  receive a 2% discount to the extent such  invoice is
          paid within ten (10) days from the  invoice  date with all amounts due
          within thirty (30) days of the invoice date.

     2.7  Pass  Through  Costs.  At any time during the term of this  Agreement,
          7UP/RC may pass through and  otherwise  charge  Purchaser for any cost
          increases  for raw  materials,  labor or as a  result  of  changes  in
          specifications.  Further,  if any  law or  regulation  is  enacted  or
          imposed  anywhere,  the effect of which is to impose  upon or to cause
          7UP/RC to incur any cost or  expense  (which did not exist on the date
          of this Agreement) with respect to container  deposits,  used or empty
          container  collection,  container  recycling or disposal,  beverage or
          package  labeling  requirements,  any tax or duty in the  nature of an
          excise  tax or  otherwise,  upon or with  respect  to  Product  or the
          performance of 7UP/RC  services,  7UP/RC shall be entitled to increase
          the price of Product by an amount sufficient and in such manner and to
          such extent that none of the burden of such costs or expenses is borne
          by 7UP/RC.  If requested by Purchaser,  7UP/RC shall provide Purchaser
          with suitable evidence establishing that a cost increase did occur.

     2.8  Equipment. Purchaser shall purchase the equipment specified in Exhibit
          B (the "Equipment') at its sole cost and expense. All payments for the
          Equipment  shall  be  made  by  Purchaser  directly  to the  Equipment
          supplier.  Exhibit  B is  only an  estimate  of the  Equipment  costs.
          Purchaser  shall be responsible  for the actual cost of the Equipment.
          Purchaser  shall also be  responsible  for all  property  taxes on the
          equipment.  7UP/RC agrees to supervise and direct the  procurement and
          installation   of  the   Equipment.   7UP/RC  shall  perform   routine
          maintenance on the Equipment and shall be financially  responsible for
          minor  repairs.  7UP/RC  agrees  not  to use  the  Equipment  for  the
          production,  at its  Buena  Park,  California  facility,  of any other
          energy drink reasonably  similar to Product without  Purchaser's prior
          written approval. At the end of the term of this Agreement, 7UP/RC may
          use the Equipment to produce  Products as well as other energy drinks.
          Should this Agreement terminate early, 7UP/RC shall have the right but
          not the obligation to purchase the Equipment at the fair value thereof
          at that time.

                           III - TERM AND TERMINATION

     3.1  Term. This Agreement will commence on April 1, 2003 and shall continue
          until March 31, 2008 unless  sooner  terminated  pursuant to paragraph
          3.2 herein.


     3.2  Termination.  This Agreement may be terminated prior to the end of its
          term (i) upon written notice by either party to the other party in the
          event that the other party  breaches  any  material  provision of this
          Agreement  and fails to remedy the breach prior to  expiration  of the
          thirty (30) day period or (ii) following notice by either party to the
          other upon the insolvency or bankruptcy of the other party.

                               IV - RAW MATERIALS

     4.1  Purchase of Raw Materials. 7UP/RC shall acquire and store, at its sole
          cost and expense,  the raw materials  identified in Section 2.2 herein
          to meet the quarterly forecast.

     4.2  Branded  Materials.  Purchaser shall reimburse 7UP/RC for any finished
          Product  and  Branded  Materials  which  remain in  7UP/RC  possession
          following  the   termination   of  this   Agreement  or  a  change  in
          Specifications  or other  decisions  of  Purchaser  which  render such
          Branded Materials obsolete or not useable by 7UP/RC.

     4.3  Pallets.  7UP/RC shall ship Product using pallets and a pallet pattern
          reflected in Exhibit A. Pallets  shall be exchanged  upon  delivery of
          Product or purchased by Purchaser of 7UP/RC  standard  cost if pallets
          are not exchanged.

     4.4  Shells. To the extent requested by Purchaser, Product shall be shipped
          to Purchaser in plastic  shells.  Purchaser shall pay 7UP/RC a deposit
          equal to 7UP/RC  standard  rate which shall be  refunded to  Purchaser
          when the shells are returned.


     5.1  Product. 7UP/RC shall test or cause to be tested each batch of Product
          purchased  pursuant to this  Agreement  before  delivery to Purchaser.
          Such  testing  shall be  conducted  according  to  7UP/RC  established
          practice  and  procedures,  which  Purchaser  has  reviewed and deemed

     5.2  Manufacturing  Compliance.  While  manufacturing,  bottling,  canning,
          labeling, packaging and storing Product, 7UP/RC shall conform strictly
          with the  formula,  methods of  manufacture,  standards of quality and
          sanitation,  bottling, canning, labeling, package design and packaging
          instructions and other specifications and instructions which Purchaser
          shall furnish from time to time. 7UP/RC shall also:


          (a)  maintain and operate its bottling and canning plants at all times
               in good and sanitary operating order, condition and repair and in
               compliance  with any standards  required by applicable  law, with
               sufficient   production   and  storage   capacity  to  fully  and
               faithfully to perform its obligations under this Agreement;

          (b)  date and production  code each production run of the Product by a
               legible  means to identify at least the date when and the packing
               such Product were produced,  and keep Purchaser fully apprised of
               the coding systems used and all changes therein; and

          (c)  package all Product in accordance  with  manufacturing  standards
               (if any)  specified  by  Purchaser  and to such  standards as are
               required by applicable law.

                               VI-PRODUCT RECALLS

     In the event (a) any government  authority  issues a request,  directive or
order that Product be recalled, or (b) a court of competent  jurisdiction orders
such a recall,  or (c) 7UP/RC  reasonably  determines  after  consultation  with
Purchaser  that  Product  should  be  recalled,   the  parties  shall  take  all
appropriate  corrective  actions. In the event that such recall results from any
cause or event  arising  from  defective  manufacture  of the Product by 7UP/RC,
7UP/RC shall be responsible for all expenses of the recall.  For the purposes of
this Agreement,  the expenses of recall shall include,  without limitation,  the
expenses of notification  and destruction or return of the recalled  Product and
Purchaser's  cost for  Product  recalled  but not the  expense  or  service  fee
associated with sales representatives' or management's time which shall be borne
by Purchaser.

                                VII - WARRANTIES

     7.1  Compliance  with the  Federal  Food,  Drug and  Cosmetic  Act.  7UP/RC
          warrants  that all Product  delivered  to  Purchaser  pursuant to this
          Agreement  will at the time of such  delivery  not be  adulterated  or
          misbranded  within the meaning of the Federal Food,  Drug and Cosmetic
          Act, as amended, ("Act") or within the meaning of any applicable state
          or  municipal  law  in  which  the  definitions  of  adulteration  and
          misbranding are  substantially  the same as that contained in the Act,
          as such Act and such laws are constituted and effective at the time of
          delivery  and  will  not  be an  article  which  may  not,  under  the
          provisions of such Act, be introduced into interstate commerce.

     7.2  Conformity with Specifications.  7UP/RC warrants that Product sold and
          delivered  pursuant to this  Agreement  will conform when delivered to
          the Specifications.

     7.3  Extent of  Warranty.  Except as  provided  in  Paragraphs  7.1 and 7.2
          herein,  7UP/RC  does not make any  warranty  of any kind,  express or
          implied,  with respect to Product including,  without limitation,  any
          warranty of fitness for a particular purpose or merchantability.


                              VIII - FORCE MAJEURE

     Failure of either  party to perform its  obligations  under this  Agreement
(except the  obligation  to make  payments)  shall not subject such party to any
liability  to the other if such  failure  is  caused  by acts  such as,  but not
limited to, acts of God, fire,  explosion,  flood, drought, war, riot, sabotage,
embargo,  strikes  or  other  labor  trouble,  failure  in  whole  or in part of
suppliers to deliver on schedule materials, equipment or machinery, interruption
of or delay in  transportation,  compliance  with any order or regulation of any
government  entity  acting with color of right or by any other cause  beyond the
reasonable control of the parties.

                              IX - CONFIDENTIALITY

7-Up/ RC shall not be liable for indirect, special, incidental, consequential or
penal damages,  based on or attributable to the formulation of Product, but this
limitation shall not apply to or have any effect in respect of any damages based
on or attributable to any defects in the manufacture of Product or the packaging

                              X - CONFIDENTIALITY

     10.1 Confidentiality. Each party hereto shall not disclose any confidential
          information  received  by it pursuant  to this  Agreement  without the
          prior written consent of the other.  This  obligation  shall not apply

          (a)  information  which is known to the receiving party at the time of
               disclosure  and  documented by written  records made prior to the
               date of this Agreement;

          (b)  information disclosed to the receiving party by a third party who
               has a right to make such disclosure;

          (c)  information which becomes  patented,  published or otherwise part
               of the public domain or information from a third person obtaining
               such information as a matter of right.

This obligation will continue for a period of three (3) years after  termination
of this Agreement or any extension thereof.

     10.2 Disclosure to Government.  Nothing  contained in this Article shall be
          construed to restrict Purchaser or 7UP/RC from disclosing confidential
          information as required:

          (a)  for regulatory, tax, customs or other governmental reasons;
          (b)  for audit purposes;
          (c)  by court order;
          (d)  from  using  such  confidential   information  as  is  reasonably
               necessary to perform acts permitted by this Agreement.


                              XI - INDEMNIFICATION

     11.1 By  Purchaser.  Purchaser  will  indemnify  and hold  7UP/RC  harmless
          against  any and all  liability,  damages,  losses,  costs or expenses
          resulting  from any third party claims made or suits  brought  against
          7UP/RC  which  arise  out  of  the   promotion,   storage,   handling,
          distribution,   sale  of  Product  by  Purchaser,   from   Purchaser's
          negligence or from the negligence of Purchaser's  officers,  agents or

     11.2 By 7UP/RC.  7UP/RC will indemnify and hold Purchaser  harmless against
          any and all liability,  damages,  costs or expenses resulting from any
          third party claims made or suits brought against Purchaser which arise
          out of the manufacture of Product by 7UP/RC, from 7UP/RC negligence or
          from the negligence of 7UP/RC's officers, agents or employees.

     11.3 Conditions of  Indemnification.  The  obligations of the  indemnifying
          party under this Article XI are conditioned upon the written notice to
          the  indemnifying  party with  regard to a claim or  lawsuit  which is
          alleged to be covered within  fifteen (15) days after the  indemnified
          party  has  received  notice  of said  claim  or  lawsuit.  The  above
          indemnities  are  further  conditioned  upon  the  cooperation  of the
          indemnified  party  with the  indemnifying  party in any regard in the
          investigation  and  defense  of any  claim or  lawsuit  alleged  to be
          covered by the above  indemnities.  Any indemnity  shall be void as to
          any  claim  or legal  action  for  which  settlement  or any  offer of
          settlement  is  made  without  the  prior   written   consent  of  the
          indemnifying party.

                               XII - ARBITRATION

Any dispute,  controversy  or claim arising out of or relating to this Agreement
or the breach or  termination  hereof  shall be  settled by binding  arbitration
conducted by  JAMS/Endispute.  ("JAMS") in  accordance  with JAMS  Comprehensive
Arbitration  Rules and Procedures (the "Rules").  The arbitration shall be heard
by one arbitrator to be selected in accordance with the Rules, in Orange County,
California.  Judgment upon any award rendered may be entered in any court having
jurisdiction  thereof.  Within seven (7)  calendar  days after  appointment  the
arbitrator  shall set the hearing date,  which shall be within 90 days after the
filing date of the demand for  arbitration  unless a later date is required  for
good cause shown and shall order a mutual exchange of what he/she  determines to
be relevant documents and the dates thereafter for the taking of up to a maximum
of 5 depositions by each party to last no more than 2 days in aggregate for each
party.  Both parties waive the right,  if any, to obtain any award for exemplary
or  punitive  damages or any other  amount for the purpose or imposing a penalty
from the other in any arbitration or judicial  proceeding or other  adjudication
arising  out of or  with  respect  to  this  Agreement,  or any  breach  hereof,
including any claim that said Agreement, or any part hereof, is invalid, illegal
or otherwise  voidable or void. In addition to all other relief,  the arbitrator
shall  have the  power to award  reasonable  attorneys'  fees to the  prevailing
party.  The arbitrator shall make his or her award no later than 7 calendar days
after the close of evidence or the submission of final briefs,  whichever occurs


                           XIII - GENERAL PROVISIONS

     13.1 Notices.  Any notices permitted or required by this Agreement shall be
          sent by telex,  telecopy,  registered mail or other recognized private
          mail carrier  service and shall be effective when received if sent and
          addressed as follows or to such other  address as may be designated by
          a party in writing:

               If to Purchaser: Hansens Beverage Company

                                1010 Railroad St

                                Corona, Ca 92882

               Attention:       Rodney Sacks

               Copy to:         Hilton Schlosberg

               If to 7UP/RC:    3220 East 26th St.
                                Los Angeles, CA  90023

               Attention:       Steve Walb

               Copy to:         Mike Nelson, Esq.

     13.2 Entire Agreement,  Amendment. The parties hereto acknowledge that this
          document  sets forth the entire  agreement  and  understanding  of the
          parties  and  supersedes  all  prior  written  or oral  agreements  or
          understandings   with  respect  to  the  subject  matter  hereof.   No
          modification  of any of the terms of this Agreement shall be deemed to
          be valid unless it is in writing and signed by the party  against whom
          enforcement is sought. No course of dealing or usage of trade shall be
          used to modify the terms and conditions herein.

     13.3 Waiver.  No waiver by either  party of any default  shall be effective
          unless in writing,  nor shall any such  waiver  operate as a waiver of
          any other default or of the same default on a future occasion.


     13.4 Assignment.  This  Agreement  shall be  binding  upon and inure to the
          benefit of the successors or permitted  assigns of each of the parties
          and may not be assigned or  transferred  by either  party  without the
          prior written consent of the other.

     13.5 Governing Law. This Agreement shall be governed by and construed under
          the laws of the State of New York, U.S.A.

     13.6 Severability.  In the  event  that  any  term  or  provision  of  this
          Agreement shall violate any applicable  statute,  ordinance or rule of
          law in any  jurisdiction  in which it is used, such provision shall be
          ineffective to the extent of such violation  without  invalidating any
          other provision hereof.

     13.7 Heading,  Interpretation.  The headings  used in the Agreement are for
          convenience only and are not a part of this Agreement.

     IN WITNESS  WHEREOF,  the parties hereto have each caused this Agreement to
be duly executed as of the date first above written.

Seven-Up/RC Bottling Company                            (Purchaser)
Of Southern California, Inc.

By:  /s/Charles F. Shanley                              By:  /s/ Rodney C. Sacks
     ---------------------                                   -------------------
Name: Charles F. Shanley                                Name:  Rodney C. Sacks
     ---------------------                                   -------------------
Title:  President                                       Title:  Chairman
     ---------------------                                   -------------------



                                  ADDENDUM TO
                            HANSEN BEVERAGE COMPANY
                              DATED APRIL 15, 2003
                               ("The Agreement")

     This  Addendum  to the  Agreement  ("Addendum)  is made this  _9th__ day of
December,  2003  by  and  between  Hansen  Beverage  Company  ("Purchaser")  and
Seven-Up/RC  Bottling  Company of  Southern  California,  Inc.  ("7UP/RC")  with
reference to the following:


     A.   On April 15, 2003 Purchaser and 7UP/RC entered into the Agreement.

     B.   Pursuant to the Agreement the Purchaser  purchased  certain  equipment
          specified in Exhibit B to the  Agreement  ("Exhibit B") which has been
          installed at 7UP/RC and 7UP/RC has commenced with the  manufacture and
          supply to Purchaser of Monster  Energy(tm)  drinks in 16 oz.  packages
          pursuant thereto.

     C.   Subsequent to the commencement of production,  7UP/RC determined that,
          to enable  them to meet the  Purchaser's  volume  requirements,  it is
          necessary that certain further equipment be purchased and installed on
          their line and have requested the Purchaser to purchase such equipment
          in  connection  with the  Agreement.  The  Purchaser  is  agreeable to
          purchasing  the further  equipment  concerned and to the  installation
          thereof on the 7UP/RC line  provided that and subject to the Agreement
          being  amended in  accordance  with the terms set out in this Addendum
          and 7UP/RC is agreeable thereto.

     NOW, THEREFORE, it is agreed as follows:

     1.   The  "Products"  as  defined  in  the  Agreement   shall  include  any
          additional  energy  drinks in 16 oz.  packages  that the Purchaser may
          require  7UP/RC to  manufacture  and supply to it from time to time in
          terms of and during the term of the Agreement.

     2.   Clause 2.8 of the  Agreement  is amended by the addition at the end of
          that clause of the following:  "Purchaser shall, in addition, purchase
          and pay for a 30 h.p. 4329  Tri-Blender  Tri-Clover  machine  together
          with two 328 Waukesha  transfer  pumps with 10 h.p.  wash down motors,
          interconnecting  piping,  control panels,  etc. ("New  Equipment") and
          assume  financial  responsibility  for  the  installation  and  wiring
          thereof,  in accordance with the estimate from BEECO which is attached
          hereto as Exhibit C. Purchaser  shall pay for the New Equipment  after
          confirmation  from  7UP/RC  that the same has been  supplied  and duly
          installed at 7UP/RC and is fully operational.  Purchaser shall also be
          financially  responsible  for all taxes and freight in connection with
          the New  Equipment.  7UP/RC  assumes  responsibility  to supervise the
          installation of the New Equipment and to perform  routine  maintenance
          on the New Equipment and to be financially responsible for all repairs
          to the New Equipment during the term of this Agreement.


     3.   7UP/RC  represents to the Purchaser that the purchase and installation
          of the New Equipment  will enable it to produce  larger  quantities of
          Products with less lead time and enable 7UP/RC to meet  unexpected and
          increased  volume  demands from  Purchaser for the Products  including
          during  Buena  Park's peak  season and will  eliminate  conflicts  and
          achieve more consistent emulsification and result in superior products
          being produced by 7UP/RC for Purchaser.

     4.   The term of the  Agreement  is  extended  until  March 31, 2009 unless
          sooner  terminated  pursuant to the provisions of Paragraph 3.2 of the

     5.   7UP/RC agrees not to use the New Equipment for the production,  at its
          Buena Park,  California facility of any other energy drinks similar to
          the Products, without Purchaser's prior written consent.

     6.   Upon the termination of the Agreement for whatever  reason,  Purchaser
          shall be entitled to remove the New  Equipment or,  alternatively,  to
          negotiate  the sale of the New  Equipment to 7UP/RC at the fair market
          value thereof at that time.  Should 7UP/RC and the Purchaser  agree to
          the sale of the New Equipment to 7UP/RC upon the  termination  of this
          Agreement,  7UP/RC  shall  be  entitled  to use the New  Equipment  to
          produce other energy drinks as well as Products.

     7.   Save as aforesaid the Agreement  shall be unaffected  hereby and shall
          continue in full force and effect between the parties.

     IN WITNESS WHEREOF, the parties hereto have each caused this Addendum to be
duly executed as of the date first above written.

Seven-Up Bottling Company of                         Hansen Beverage Company
Southern California, Inc.

By: /s/Charles F. Shanley                            By: /s/Rodney C. Sacks
    ------------------------------                       -----------------------
Name: Charles F. Shanley                             Name:Rodney C. Sacks
    ------------------------------                       -----------------------
Title:President                                      Title:Chairman of the Board
    ------------------------------                       -----------------------