Sample Business Contracts

Aseptic Packaging Agreement - Johanna Foods Inc. and Hansen Beverage Co.

Sponsored Links

                           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


     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

     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.


     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.


     (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.


     (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

     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.




     (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.


     (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.


     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.


     (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:



     (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

     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.


     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.


By: /s/BOB FACCHING                             By: /s/ HILTON SCHLOSBERG

Title: President                                Title: Vice Chairman


                                    EXHIBIT A




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



                                    EXHIBIT B


                                      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.



                                    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


                                    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.