Aseptic Packaging Agreement - Johanna Foods Inc. and Hansen Beverage Co.
ASEPTIC PACKAGING AGREEMENT
THIS AGREEMENT, December 7, 2000, between Johanna Foods, Inc., a New Jersey
corporation, having its principal office and plant location at Johanna Farms
Road, Flemington, New Jersey 08822 ("Johanna") and Hansen Beverage Company (on
it's own behalf and on behalf of its subsidiaries), a Delaware corporation,
having its principal office at 1010 Railroad Street, Corona, CA 92882
("Customer").
WITNESSETH:
WHEREAS, Johanna processes and packages for sale a variety of juice and
other beverages using specialized aseptic packaging equipment; and
WHEREAS, Customer wishes to have Johanna process and package certain 250 ml
Juice Blast and Juice Slam products using customer's unique formulae for such
products and unique label designs for the packaging thereof at Johanna's plant
in Flemington, New Jersey (the "Plant"),
NOW THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth and intending to be legally bound, the PARTIES HERETO
AGREE AS FOLLOWS:
1. PRODUCTS: Subject to the terms and conditions hereof, Johanna shall
prepare, manufacture, process, package and load for shipping for Customer the
product(s) listed in Exhibit A ("Products"). Customer supplied ingredients and
materials (if any) shall be provided to Johanna in such quantities and at such
times so as to enable Johanna to perform its obligations hereunder
2. SPECIFICATIONS: Johanna agrees to produce Products in accordance with
quality assurance standards and policies as set forth in Exhibit A hereto.
3 TERM: This Agreement shall commence upon the date first above written and
shall continue for three (3) years from the above date, and shall thereafter
continue for successive three (3) year terms, upon written agreement by both
Customer and Johanna at least six (6) months prior to the end of the initial
term or any renewal term.
4. PRODUCTION: The parties understand and agree that production under this
Agreement shall be on order-by-order basis, provided, however, that Johanna
shall use its best efforts to fulfill orders and that the terms herein shall
govern the performance of any and all orders. Customer agrees to schedule
production in minimum amounts of ____ gallons per flavor.
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5. SCHEDULING: Customer agrees to provide Johanna with a three (3) month
rolling estimated schedule of Customer's production requirements. These
schedules shall be revised monthly and submitted to Johanna not later than the
fifteenth day of the day of the month preceding the three-month period covered
by the schedule. These schedules shall include a firm production commitment for
the first scheduled month, and estimated requirements for the second and third
scheduled months. Customer agrees that orders for production shall provide a
minimum often (10) business days' lead time.
6. PAYMENT/PRICE:
(a) Johanna's fees for its performance hereunder shall be as described in
Paragraph 6 (b) hereof and as set forth in Exhibit B attached hereto, or any
then-current amendment thereto. Johanna shall forward to Customer upon shipment,
an invoice showing the payment due, and Customer shall pay that invoice net
within thirty (30) days of receipt of same. Packaging material purchased by
Johanna incorporating Customer's design will only be ordered upon receipt of
Customer's purchase order authorization. Interest shall be due and payable at
the rate of 1% per month for all sums not paid when due.
(b) As consideration for the services provided by Johanna pursuant to this
Agreement, Customer shall pay Johanna the sum of the following elements of
compensation, in amounts specified on Exhibit B, attached:
(i) Processing Charge;
(ii) Packaging Materials Charge; and
(iii) Product Ingredients Charge
(iv) Equipment Royalty, if applicable.
(c) The amounts charged pursuant to Paragraph 6 (b) and appearing on
Exhibit B, attached, are subject to adjustment as contained in Exhibit B
(i) Processing Charge
(a) Changes in the processing charge shall be accounted for
by an annual adjustment in the processing charge calculated as follows:
The processing charge multiplied by the change since the previous
period in the Producer Price Index applicable to New Jersey as
announced by the U.S. Department of Labor, Bureau of Labor
Statistics or such other index as the parties may agree upon.
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(ii) Packaging Materials Charge. When and to the extent Johanna's actual
costs change.
(iii) Product Ingredient Charge. When and to the extent Johanna's actual
costs change.
(iv) Equipment Royalty. When and to the extent Johanna's actual costs
change.
7. ADJUSTMENT OF SPECIFICATIONS: Customer may alter the packing
specifications and formulae of the Products and the formulae or specifications
of the materials it supplies, upon written notice to Johanna. If any such notice
alteration, or any other request or requirement of Customer acceptable to
Johanna, results in increased costs to Johanna or results in decreased costs to
Johanna, the payments set forth in Exhibit B shall be adjusted upward or
downward as shall be mutually agreed upon between the parties to reflect such
actual increase or decrease in costs.
8. SHIPPING:
(a) During the term of this Agreement, Johanna agrees to handle and store
finished Product up to the maximum quantities specified in Exhibit A or any
then-current amendment thereto, at no additional charge to Customer. The
compensation set forth in Paragraph 6 hereof includes the cost of such storage
in Johanna's warehouse for a period not to exceed forty five (45) days from the
date of production. Customer shall pay Johanna the amount of $____ per pallet
stored, per day, for any Product remaining in storage beyond such forty five
(45) day period. Storage beyond forty five days is at the option of Johanna and
Customer acknowledges and agrees that it may not be available.
(b) Customer agrees to issue finished products for shipping in minimum
pallet increments, and Johanna agrees to release the Product to carriers
designated by Customer within 72 hours after the furnishing of written
notification thereof by Customer. Johanna agrees to ship oldest Product first.
(c) Customer shall, at its own expense, supply enough good, usable pallets
to meet Johanna's requirements for packing, storage and shipping the Product.
Customer has the ongoing responsibility of maintaining enough pallets in the
system by arranging for pallet returns or exchange, or providing additional
pallets as required. Customer acknowledges and agrees that pallets provided by
Customer will be commingled with other pallets of Johanna. Johanna shall invoice
Customer for pallets at $____ per pallet, and Customer shall make payment for
same net within thirty (30) days of receipt of invoice.
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9. INGREDIENTS. MATERIALS AND EQUIPMENT:
(a) Johanna agrees to supply at its sole cost and expense, the equipment
and facilities necessary to perform its obligations under this Agreement.
(b) All base flavoring, syrup, fruit juice, concentrate and packaging
materials (together, "Ingredients and Materials") furnished, or paid for, by
Customer shall be used exclusively for the purpose of performance of this
Agreement. Customer warrants that any such Ingredients or Materials supplied
shall not be adulterated and shall satisfy all federal and state laws and
regulations applicable to the processing and packaging to be performed pursuant
to this Agreement. Ingredients and Materials allowances are listed on Exhibit D.
(c) Customer shall, with Johanna's approval, from time to time deliver or
cause to be delivered to Johanna's plant at Customer's expense (including all
costs of art work, plates and delivery) certain Ingredients and Materials as
identified in Exhibit B necessary to prepare and package the Product. Such
Ingredients and Materials must be to specifications and from suppliers agreed to
by Johanna and compatible with Johanna's equipment. Johanna shall furnish
certain other Ingredients and Materials and the basis for determining the costs
thereof to be as designated from time to time. Except for container paper stock
and trays, Customer hereby authorizes Johanna to order Ingredients and materials
as identified in Exhibit B, and to re-order such Ingredients and Materials, in
quantities sufficient to maintain an inventory of such Ingredients and Materials
necessary to package a minimum of ____ cases per flavor and a maximum of ____
cases per flavor of Product. Johanna will order container paper stock upon
receipt of specific authorization from Customer for each order. Johanna will
order trays based upon Customer's projections of its production requirements.
Customer acknowledges and agrees that Johanna shall have no liability for the
failure of any supplier to provide Materials in timely fashion nor for other
factors beyond Johanna's control relating to the quality or quantity of
Ingredients and materials which may interfere with Johanna's processing and
packaging of Product when Johanna is responsible for procuring such materials.
(d) In the event Johanna shall receive any Ingredients and Materials
furnished by or on behalf of Customer in a damaged condition which is evident
from a visual inspection thereof, or in the event such Ingredients and Materials
do not conform to the bill of lading corresponding thereto in respect to numbers
and product code, Johanna shall promptly notify Customer of, and shall follow
the reasonable instructions of Customer with respect to, any such discrepancy.
(e) Customer agrees to keep the packaging materials and ingredient
inventories which are supplied on its behalf at a minimum inventory level so as
not to utilize excessive warehouse space. The maximum amount of Ingredients and
Materials which may be stored without charge is set forth in Exhibit D attached
hereto; storage charges will apply to amounts in excess of the stated minimum.
Customer understands and agrees that Johanna may not segregate in storage the
Ingredients and Materials supplied by Johanna from those supplied by Customer.
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(f) Johanna may, using its reasonable discretion, test any of the
Ingredients and Materials supplied to it to confirm that such Ingredients and
Materials satisfy all applicable federal and state laws and regulations.
(g) Customer agrees to indemnify and hold Johanna harmless for any and all
damages, excluding consequential damages, to Johanna or others, resulting from
the supplying of Ingredients and Materials to Johanna which are adulterated or
fail to satisfy any and all applicable federal and state laws and regulations.
Said indemnification shall include, but is not limited, to damage to the good
will of Johanna.
10. RECORDS: Johanna agrees to make and keep full and accurate books and
weekly records currently updated with respect to production runs, inventories
and shipments, and agrees to report such data, as may be reasonably required.
11. REGULATORY COMPLIANCE: Johanna shall follow good manufacturing
practices in the production of Product and shall comply with all applicable
local, state and federal laws and regulations governing the production of the
Product. Notwithstanding the foregoing, compliance with all applicable laws and
regulations with respect to Ingredients and Materials and formulae furnished by
Customer arid with respect to labeling shall be the sole responsibility of
Customer, and Customer shall save and hold Johanna harmless from such claim or
liability based upon noncompliance with such laws and regulations, provided such
claim or liability does not arise from acts or omissions of Johanna.
12. TITLE TO PRODUCT: Title to Ingredients and Materials furnished by
Customer shall remain with Customer at all times. Risk of loss for such
Ingredients and Materials shall be borne by Johanna. Title and risk of loss to
Ingredients and Materials furnished, supplied or purchased by Johanna pursuant
to the provisions of this Agreement shall remain with Johanna. Title to Product
and risk of loss thereto shall pass to Customer at time of delivery to and
acceptance of Product by Customer or a carrier designated by Customer at
Johanna's facility.
13 TRADEMARKS: All trademarks, trade names, trade secrets, names and
addresses of customers, sources of supply, manufacturing procedures, formulae,
production data and reports and other proprietary information ("Confidential
Information"), of either party hereunder, shall at all times be and remain the
exclusive property of the appropriate party, and this Agreement shall not in any
manner constitute a license to either party to the use of the Confidential
Information of the other party. Each party shall use its best efforts to keep
confidential any and all Confidential Information acquired from the other and
shall not disclose such Confidential Information without the express written
consent of the other party .
14. INDEMNIFICATION: Johanna agrees to indemnify Customer against any
claims, loss, damage, liability or expense including but not limited to bodily
injury, death or property damage where such injury, death or damage is caused by
any ingredients, materials furnished or packaging provided by Johanna, by any
negligence of Johanna, or by any act or omission on the part of Johanna in
violation of this Agreement.
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Customer agrees to indemnify Johanna against any claims, loss, damage,
liability or expense including but not limited to bodily injury, death or
property damage where such injury , death or damage is caused by any
ingredients, materials, formulae, instructions, standards, programs or policies
furnished by Customer to Johanna, including claims of trademark infringement, by
any negligence of Customer, or by any act or omission on the part of Customer in
violation of this Agreement.
Customer and Johanna shall each maintain insurance to cover the liabilities
with respect to which the indemnities are provided for in this paragraph, such
coverage to be no less than $2,000,000 for bodily injury , including death and
property damage combined. Each party shall furnish to the other evidence of such
insurance in the form of a certificate or certificates issued by its respective
insurance carrier, which certificate shall provide that there shall be no
material If change in, or cancellation of, such insurance unless thirty (30)
days prior written notice, as cancellation is given to both parties. The
foregoing indemnifications are conditioned upon the party claiming
indemnifications promptly furnishing the other party with written notice of each
claim, loss, damage or expense for which indemnity will be claimed and
permitting the indemnifying party to assume the defense thereof at its sole cost
and expense.
15. TAXES: Johanna and Customer each agree to pay all taxes assessed on all
Ingredients and Materials to which they have title respectively.
16. FORCE MAJEURE: Neither party shall be liable to the other for any delay
or failure to perform any of its obligations hereunder which delay or failure to
perform is due to fires, storms, floods, earthquakes, other acts of God, war,
insurrection, riots, interruption or diminution of electric power, strikes,
lockouts or other labor disputes, failure of transportation, equipment,
communication or postal service or governmental actions, orders or regulations
or other matters beyond the control of said party .
17. DEFAULT:
(a) If either party shall commit a material default in the performance of
this Agreement, and that default shall continue uncorrected for thirty (30) days
after receipt by the defaulting party of written notice specifying the nature of
such defaults thereof, the other party shall be entitled to terminate this
Agreement upon ten days' written notice. Termination by a party pursuant to this
paragraph shall not relieve the party so terminating from the obligations
contained in Paragraphs 13, 18 and 21, which shall survive termination. Waiver
of any default shall not constitute waiver of a1ly subsequent default.
18. TERMINATION:
(a) This Agreement shall commence as of the date hereof and shall continue
until termination as provided in Paragraphs 3 or 17 of this Agreement.
(b) In the event that this Agreement is terminated:
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(i) Each party shall discharge within 30 days, or sooner as provided
herein, in cash or by check, any liability or liabilities to the other existing
as of the date of termination, including without limitation the purchase by
Customer of all finished Product.
(ii) Johanna shall return, at Customer's expense to a location designated
by Customer, all unused Materials and Ingredients to which Customer has title
and all finished Product within thirty days of termination.
(iii) Customer shall purchase, at Johanna's cost, unused Materials and
Ingredients specified in Exhibit B in good and usable condition in quantities
not to exceed the requirements necessary to pack Product scheduled on the most
current production forecast or the levels of inventory permitted hereunder,
whichever is greater, within thirty days of termination.
19. ASSIGNMENT: No party may assign or otherwise transfer this Agreement or
any of its rights or obligations hereunder or any portion thereof without the
prior written approval of the other, except that, without such consent, a party
may make such assignment to a corporate parent, subsidiary or affiliate of the
party provided the assignor guarantees the performance by the assignee of all it
obligations hereunder.
20. NOTICES: All notices given by the parties hereunder shall be in writing
and shall be personally delivered or mailed, by certified mail, return receipt
requested, addressed to the respective parties at their addresses first above
mentioned or at such address as either party shall designate in writing to the
other. Notices shall be effective when properly delivered or mailed unless
otherwise provided in this Agreement.
21. RESTRICTIONS: For purposes of this Paragraph, "Exclusive Territory"
includes the states specified in Exhibit C. Customer agrees that for as long as
this Agreement and any renewal or extension(s) thereof is in effect, it will not
do or cause to be done the following:
(a) package any Juice Blast or Juice Slam products within the Exclusive
Territory in Brik Pak or similar aseptic containers provided that Johanna
remains competitive excluding any isolated or once off offers from other
parties.
22. SEVERABLE CONDITIONS: If any condition, term or covenant of this
Agreement shall at any time be held to be void, invalid or unenforceable, such
condition, covenant or term shall be construed as severable and such holding
shall attach only to such condition, covenant or term and shall not in any way
affect or render void, invalid or unenforceable any other condition, covenant or
term of this Agreement, and this Agreement shall be carried out as if such void,
invalid or unenforceable term were not embodied herein in order to most closely
achieve the mutual objectives of the parties.
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23. CHOICE OF LAW: This Agreement shall be construed in accordance with the
laws of the State of New Jersey. Any dispute arising under or relating to this
Agreement shall be submitted to binding arbitration before a single arbitrator
in the State of New Jersey pursuant to the rules for commercial arbitrations of
the American Arbitration Association.
24. BENEFIT OF AGREEMENT: This Agreement shall inure to the benefit of the
parties and their successors and assigns (provided the assignment does not
violate the terms hereof) and shall be binding upon the parties, their
successors and assigns.
25. ENTIRE AGREEMENT: It is agreed that neither party has made or is making
any representations or warranties, express or implied, not explicitly set forth
in this Agreement, that this Agreement is the entire Agreement between the
parties hereto and it cancels and supersedes all earlier agreements, written or
oral, and that no waiver, modification or change of any of the terms of this
Agreement shall be valid unless in writing.
26. AMENDMENT: This agreement and any Exhibit thereto may be amended from
time to time by agreement of the parties, provided that such amendment is
committed to writing within ten days, and dated and executed by all authorized
officer of each party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the day and year first above written.
JOHANNA FOODS, INC. HANSEN BEVERAGE COMPANY
By: /s/BOB FACCHING By: /s/ HILTON SCHLOSBERG
Title: President Title: Vice Chairman
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EXHIBIT A
PRODUCTS AND QUALITY ASSURANCE STANDARDS
PRODUCTS
JUICE BLAST
JUICE SLAM
QUALITY ASSURANCE STANDARDS
o Plant must be OU Certified Kosher
o Ingredients supplied by plant must be kosher certified
o Water source for product must be potable and tested by local authority
o Plant must follow established Good Manufacturing Practices
o Plant employees must exhibit good hygienic practices
o Plant must have strict sanitation program in compliance with GMP
o Processing equipment must be clean and sanitary
o Processing areas must be clean and sanitary
o Processing areas must be segregated from the outside
o Processing equipment must be food grade material
o Rework program must be handled correctly
o Finished goods must be stored at correct temperatures
o Finished goods must be properly stored, rotated, and kept free of dust
o Finished goods must be coded as required by Hansen Beverage
o Plant must perform incoming goods inspection
o Plant must maintain receiving log of incoming goods & record lot numbers
o Ingredients and packaging must be properly rotated (FIFO)
o Plant must test finished product to ensure the product meets finished
product specification. This testing can be physical, chemical and/or
microbiological depending on the nature of the product
o Plant must have an established HACCP program
o Plant must have established pest control program
o Pesticides must be stored in secured area
o Cleaning chemicals must be stored away from food products
o All ingredients must be stored in accordance to specification
o Packaging ingredients must be stored free of dust, condensate, etc.
o Rejected materials must be properly identified and stored separately
o Lights over exposed product must be protected
o Ladders and walkways over exposed product must be protected
o Overhead pipes must be protected against leaks and condensate drips
o Plant must be in accordance to these, as well as all ASI Food Processing
guidelines
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EXHIBIT B
PRICES
24/250 mL 27/250 mL
Variety Pak Variety Pak
Processing Charge $____ $____
Miscellaneous Materials ____ ____
An anual volume incentive of $___ per case will be paid on all cases once
Customer has produced ____ cases within the period.
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EXHIBIT C
EXCLUSIVE TERRITORY
The Exclusive Territory shall include the states of Maine, New Hampshire,
Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey,
Pennsylvania, Ohio, Kentucky, Tennessee, Maryland, Delaware, Virginia, West
Virginia North Carolina, South Carolina, Georgia, Florida and the District of
Columbia.
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EXHIBIT D
INGREDIENTS AND MATERIALS
Loss Allowances
Laminate ____%
Trays ____%
Inserts ____%
Ingredients ____%
Customer Supplies FOB Flemington. NJ
o Aseptic reel stock
o Trays
o Sales sheets
o International Paper royalty
o Ingredients
Johanna Supplies FOB Flemington. NJ
o Water to reconstitute ingredients.
o Miscellaneous materials consisting of straws, glue, tray film, pallet
pad, and pallet wrap.
o Ingredients as requested at cost plus loss allowance.
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