Contract Packer Agreement - Southeast Atlantic Beverage Corp. and Hansen Beverage Co.
CONTRACT PACKER AGREEMENT
THIS CONTRACT PACKER AGREEMENT (the "Agreement") made on JULY 24, 2004 between
SOUTHEAST ATLANTIC BEVERAGE CORPORATION, a corporation incorporated under
the laws of the State of Florida, having an office at 6001 Bowdendale
Avenue, Jacksonville, Florida 32216 (hereinafter called the "Company"),
and Hansen Beverage Company, a corporation incorporated under the laws of
the State of Delaware, having an office at 1010 Railroad Street, Corona,
California 92882 (hereinafter called the "Customer").
WHEREAS the Customer wishes the Company to produce and bottle flavored or
non-flavored, carbonated or non-carbonated beverage products under its trade
names or trademarks;
WHEREAS the Company is engaged in the business of bottling beverage products at
its place of business in Jacksonville, Florida.
AND WHEREAS the parties hereto are desirous of entering into this Agreement
pursuant to which the Company shall bottle the products as hereinafter defined
in accordance with specifications to be supplied by the Customer, all in
accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and covenants and agreements
herein container, the parties agree as follows:
1. Definitions.
1.1 In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
a. Bottling Facility means the lands, buildings, warehouse, plant
equipment and other facilities in 6045 Bowdendale. Avenue,
Jacksonville, Florida 32216 leased, or operated by the Company and
used for the bottling of beverage products.
b. Commencement Date means such date as the parties agree in writing.
c Finished Case Goods means Products bottled and made ready for delivery
pursuant to this Agreement.
d. Ingredients mean sweeteners, preservative, acidulates, CO?, flavor
components, water and all other components that are combined to
produce the Products.
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e. Packaging Materials means can bodies, can ends, bottles, caps, labels,
cartons, and all other components used to package the Products.
f. Production Run means an order by the Customer for a continuous
bottling of a scheduled quantity of each product size, flavor and
package.
h. Products means flavored and non-flavored, carbonated and
non-carbonated, beverages sold under the trademark and brand names of
the Customer, as specified on Schedule A hereto.
i. Schedule means any of the schedules designated by letters, e.g.,
Schedule "A", which are attached to and incorporated herein by
reference. The Schedules may be modified from time to time by the
mutual written consent of the parties.
l. Term means as set forth in section 2.1 hereof.
2. Term.
2.1 The Term of this Agreement shall be three (3) years commencing on the
Commencement Date subject to renewal as herein provided.
2.2 This Agreement shall be automatically extended for additional periods of
one (1) year each, unless either party notifies the other in writing at
least one hundred eighty (180) days prior to the then last day of the Term
that it does not wish to extend this Agreement or unless terminated as
provided herein.
3. Storage.
3.1 Reasonable inventories of Extracts, Packaging Materials and Finished Case
Goods shall be held by the Company. The Company agrees to hold Finished
Case Goods inventories for not more than five (5) business days after
scheduled Production Run and shall have the right to charge the Customer a
warehousing fee of $___ per Finished Case Goods per week commencing on the
sixth (6) business day after the scheduled Production Run, excluding
weekends and holidays.
4. Packaging Material and Ingredients.
4.1 The Customer shall make available to and order in for the Company prior to
the start of any Production Run, all Ingredients and Packaging Materials
needed for the bottling of the Products requested for that Production Run
and Packaging Materials set forth in Schedule "A".
4.2 The Customer shall maintain ownership of all Ingredients and Packaging
Materials set forth in Schedule "A" unless Customer is indebted to Company
for materials and/or services provided by Company at which time the Company
may take possession of all Ingredients and Packaging Materials held at the
Bottling Facility. Upon receipt of debt owed, the Company will then release
all Ingredients and Packaging Materials to the Customer.
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4.3 The Company shall supply the Ingredients and Packaging Materials set forth
in Schedule "A" or as mutually agreed to by the Company and the Customer.
5. Quality Standards and Specifications.
5.1 The Company, shall bottle the Products and store the Ingredients, Packaging
Materials and Finished Goods in compliance with the Product Specifications,
normal industry standards and all applicable federal, state and local laws
and regulations in effect as of the date of this Agreement and as they may
exist from time to time. The Company shall maintain pest control and
sanitation practices in strict compliance with the federal, state and local
laws and regulations in effect as of the date of this Agreement and as they
may be amended from time to time.
5.2 The Company represents and warrants that the manufacture, storage and
handling of the Finished Goods and the component parts thereof will take
place under conditions that conform to the standards of sound storage,
handling, mixing, bottling, manufacturing, sanitation and safety practices
in the soft drink manufacturing industry.
6. Maximum Loss Allowance.
6.1 Subject to sections 6.2 and 6.3 herein, in bottling the Products, the
Company shall be allowed the percentage loss allowance of ____% for
Finished Case Goods, Ingredients, and Packaging Materials.
6.2 If Ingredients of unacceptable quality, based on the Company's standards or
any applicable laws and regulations, are received from the customer and
rejected by the Company for use during any Production Run, the Company
shall notify and report to the Customer quantity of such material and the
Customer shall deduct that amount in calculating the Company's maximum Loss
Allowance. The Customer is then responsible for all disposing cost of
unacceptable materials.
6.3 The Maximum Loss Allowance referred to herein shall not apply to any
Production Run which is less than the minimum run and flavor quantity of
______Finished Case Goods rounded to formula yield.
7. Bottling Schedule.
7.1 On or before the Commencement Date and thereafter the Company and the
Customer shall agree upon a production schedule for the Products in terms
of quantity, package size and flavor mix.
7.2 The Customer agrees that the Company, in its sole discretion may change the
Bottling Schedule upon five (5) business days written notice to the
Customer, however, should not delay the production more than fifteen (15)
days.
7.3 All Production Runs must conform with the Company's minimum run of _____
cases and minimum flavor of _____ Finished Case Goods, rounded to formula
yield unless otherwise agreed to by the Company.
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8. Pallets.
8.1 The Company will make available to the Customer 48 x 40 four-way hardwood
pallets in quantities sufficient to store and ship all Finished Case Goods
at a cost of $___ each.
8.2 The Customer shall be allowed to return 48 x 40 four-way hardwood pallets
and to receive credit for those returned as long as the Company is
satisfied with the condition of such pallet.
9. Payment of Fees.
9.1 In consideration of the services provided by the Company under this
Agreement, the Customer shall pay to the Company the fees set out in
Schedule "A".
9.2 Payment of fees shall be due and payable within ten (10) days after
submission of an invoice to Customer following Production.
9.3 Confirmation of fees shall be invoiced weekly upon completion of each
Production Run.
9.4 The fees referred to herein are exclusive of all federal, state and local
sales, goods, and services and similar taxes which shall be the
responsibility of the Customer.
9.5 The Company shall provide to the Customer written notification not less
than thirty (30) days of any changes to the fees referred to herein due to
direct increase/decrease costs by Company.
10. Warranties and Representation.
10.1 The Company hereby covenants, represents and warrants to the Customer that:
(a). It is a corporation duly organized and validly existing under the laws
of the State of Florida.
(b). It has all necessary corporate power, authority and capacity and is
properly authorized and licensed to enter into this Agreement and to
perform it obligations hereunder. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereby
have been duly authorized by it.
(c). The Company acknowledges and agrees that all Products shall be
produced, bottled and stored in strict compliance with all applicable
federal, state and local laws and regulations, including but not
limited to , the Federal Food, Drug and Cosmetic Act of 1938, as
amended, in force and as they may be amended from time to time.
(d). It has and during the term of this Agreement shall maintain all
applicable state licenses required.
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CONTRACT PACKER AGREEMENT
10.2 The Customer hereby covenants, represents and warrants to the Company that:
(a). It is a corporation duly organized and validly existing under the laws
of the Delaware.
(b). It has all necessary corporate power, authority and capacity and is
properly authorized and licensed to enter into this Agreement and to
perform it's obligations hereunder. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereby
have been duly authorized by it.
(c). To the best of the Customer's knowledge, all Product Specification,
Ingredients and Packaging Materials supplied by the Customer to the
Company, pertaining to the Products, shall comply with all federal,
state and local laws and regulations in force, and as they may be
amended from time to time, including by not limited to, the Federal
Food, Drug and Cosmetic Act of, as amended from time to time.
(d). It has and during the term of this Agreement shall maintain all
applicable state licenses required.
Trademarks and Confidentiality.
11 All trademarks, trade names and all trade secrets, technical know-how,
specifications, formulae, standards, procedures, new product ideas,
manufacturing processes and the like (the "Proprietary information" owned by
Customer shall at all times be and remain the exclusive property of Customer,
and this Agreement shall not in any manner constitute a license to company to
use the trademarks, trade names or proprietary information of Customer except to
the extent required to satisfy its obligations under this agreement.
11.1 At all times during the term of this Agreement and thereafter, both
parties agree not to disclose to anyone outside of the Company or the Customer,
nor use for any purpose other than in connection with the performance of the
services pursuant to the Agreement, or unless prior written consent is obtained,
(a) any confidential information, proprietary information or trade secrets of
the Company or the Customer, including, without limitation concepts, Product
Specifications, formulas, techniques, methods, systems, designs, pricing, sale
projections, production volumes, research, computer programs, development or
experimental work, clients, suppliers, companies, and service providers, (b) any
information the parties have received from others which they are obligated to
treat as confidential or proprietary, or (c) and confidential, or proprietary
information which is circulated within the Company or the Customer via its
internal mail system or otherwise (collectively, the "Confidential
Information"). The obligation not to use or disclose any of the Confidential
Information shall not apply to any information that is or becomes public
knowledge in the industry, through no fault of the Company or the Customer, and
that may be utilized by the public without any direct or indirect obligation to
the Company or the Customer; provided, that the termination of the obligation
for non-use or non-disclosure by reason of such information becoming public
shall be only from the date such information becomes public knowledge.
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11.2 The Customer agrees that all business records and documents, including,
but not limited to, notes, manuals, photographs or the like, and any copies
thereof, provided to the Customer or kept or made by the Customer relating to
the business of the Company shall remain the property of the Company. The
Customer agrees that upon termination of this Agreement, the Customer shall
immediately cease using and surrender and deliver to the Company all of the
property and other materials in its possession, or in the possession of any
person or entity under its control, that relate, directly or indirectly, to any
Confidential Information or to the business of the Company, including without
limitation, all personal notes, drawings, manuals, documents, photographs,
videos, and computer disks and software and any copies thereof.
11.3 The Company agrees business records and documents, including, but
not limited to, notes, manuals, photographs or the like, and any copies thereof,
provided to the Company or kept or made by the Company relating to the business
of the Customer shall remain the property of the Customer. The Company agrees
that upon termination of this Agreement, the Company shall immediately cease
using and surrender and deliver to the Customer all of the property and other
materials in its possession, or in the possession of any person or entity under
its control, that relate, directly or indirectly, to any Confidential
Information or to the business of the Customer, including without limitation,
all personal notes, drawings, manuals, documents, photographs, videos, and
computer disks and software and any copies thereof.
12. Indemnification, Damages and Insurance.
12.1 The Company agrees to defend, indemnify and hold the Customer harmless
against any and all claims, expenses, losses, causes of action (including, but
not limited to, reasonable attorney's fees and court costs), damages or
liabilities (collectively, in this paragraph, called "Losses") on account of the
death of and/or injury to any person(s) or damage to any property arising out
of, due to, or in any way connected with any Finished Case Goods, Ingredients,
Packaging Materials or other substances furnished by the Company and/or any act,
omission or failure to act by the Company, its employees, agents or
representatives which act, omission or failure to act is in violation of the
Company's obligations under this Agreement; provided however that in no event
shall the Company be liable under this paragraph for Losses resulting from the
negligence or willful or reckless misconduct of the Customer or its employees,
agents, or representatives.
12.2 The Customer agrees to defend, indemnify and hold the Company harmless
against any and all claims, expenses, losses, causes of action (including, but
not limited to, reasonable attorney's fees and court costs), damages or
liabilities (collectively, in this paragraph, called "Losses") on account of the
death of and/or injury to any person(s) or damage to any property arising out
of, due to, or in any way connected with any Ingredients, Packaging Materials or
other substances furnished by the Customer to the Company and/or any act,
omission or failure to act by the Customer, its employees, agents or
representatives which act, omission or failure to act is in violation of the
Customer's obligations under this Agreement; provided however that in no event
shall the Customer be liable under this paragraph for Losses resulting from the
negligence or willful or reckless misconduct of the Company or its employees,
agents, or representatives.
12.3 Notwithstanding any other term or condition of this Agreement, neither
party shall be liable to the other for any indirect, punitive, special or
consequential losses or damages arising out of or in connection with this
Agreement.
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12.4 Each of the parties hereto shall maintain and keep in full force and
effect Comprehensive General Liability Insurance in reference to their
respective obligations and liabilities hereunder including coverage for personal
injury, product liability and contractual liability insuring it and the other
party and their officers, directors and employees in the amount of US $1 million
in aggregate. The Company shall additionally maintain and keep in full force and
effect insurance sufficient to provide coverage for the Customer's Ingredients,
Packaging Materials, Finished Case Goods, and other personal property stored or
used at the Bottling Facility; including but not limited to fire and windstorm
insurance. It is further stipulated that each party shall furnish the other with
evidence of such insurance in the form of a certificate issued by an insurance
carrier. These certificates must provide that there shall be no change in the
areas of vendor liability or our contractual assumptions or reduction of the
above referenced limits or cancellations of the insurance unless 30 days prior
written notice of such change is given to the party to whom the certificate is
addressed.
13. Default and Termination.
13.1 In the event that either party hereto fails to comply with any of
its obligations hereunder, becomes insolvent or goes into liquidation or has a
receiver appointed to any of its assets, then such party shall be in default and
upon receipt of written notice from the non-defaulting party, the defaulting
party shall have thirty (30) days in which to cure a monetary default or fifteen
(15) days in which to cure a non-monetary default provided, however, that if a
party is in default because it becomes insolvent or goes in liquidation or has a
Receiver appointed to any of its assets, it shall have ninety (90) days in which
to cure. If a default is not timely cured, the non-defaulting party shall have
the option to terminate this Agreement effective immediately. The defaulting
party shall be fully liable for all monies owed by the defaulting party under
this Agreement.
13.2 In the event this Agreement is terminated, the Customer shall
be responsible for payment within fifteen (15) business days to the Company for
any inventory of Finished Case Goods, Raw Materials, Ingredients and any other
substances which the Customer required the Company to purchase for the
production of the Customer's products. The Company shall have the right to take
title, possess and sell all or any part of the Finished Case Goods, Raw
Materials and Ingredients to offset any monies owed by the Customer after giving
fifteen (15) business days notice.
13.3 In the event of a significant change in the Company's' Direct Store
Delivery (DSD) business or a change in national level contract packing
arrangements, the Company may provide 90 day notice to the Customer of the
intent to terminate the contract. The Company may terminate the contract without
cause and at no liability to the Company.
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14. Notice.
14.1 Any notice required or permitted to be given hereunder shall be in
writing and may be given by serving personally or mailing the same by registered
mail, postage pre-paid, return receipt requested or, by sending the same by
telex, facsimile or of the similar form of communication, and such notice shall
be sufficiently given by the Customer to the Company, if addressed to:
Southeast Atlantic Corporation
6001 Bowdendale Avenue
Jacksonville, Florida 32216
Telephone: (904) 739-1000
Tele-fax: (904) 737-2880
Attn: Steve Landsgaard, Director of Operations
Copy To: Chris Paul: President/ COO
and to the Customer, if addressed to:
Hansen Beverage Company
Attn: Rodney C. Sacks, Chairman
Address:
1010 Railroad Street
Corona, CA 92882
Phone: (951) 739-6200
Fax: (951) 739-6210
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Any such notice shall be deemed to have been received on the date on which it is
delivered if served personally or by telex, facsimile or other similar form of
communication or on the fifth (5th) business day following mailing, if sent by
registered mail, unless there is an interruption of postal service in which case
it shall be deemed to have been received on the fifth (5th) business day
following resumption of postage service.
15. Assignment.
15.1 Neither party shall transfer or assign this Agreement or any interest
in this Agreement, either voluntarily or by operation of law or otherwise,
without the prior written consent of the other. Any attempted transfer or
assignment by a party without prior consent of the other party shall be null and
void and shall permit the other party, at its option, to immediately terminate
this Agreement.
16. Force Majeure.
16.1 Failure of either party to perform any of its obligations under this
Agreement as a result of reasons beyond its reasonable control, including but
not limited to, strikes, labor disputes, suits, fire, acts of God, acts or
orders of any government relating to civil disturbances or war, shall not
constitute default or breach of this Agreement; provided, however, that if such
an event shall prevent the Company from performing hereunder during a period of
ninety (90) consecutive days during which all or part of a Production Run is
scheduled, the Company or the Customer, at its option, may terminate this
Agreement by giving thirty (30) days written notice to the other party.
17. No Waiver.
17.1 The failure of either party to assert any right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse the subsequent performance or
non-performance of any such term or condition by the other party or constitute a
waiver of either party's right to demand exact compliance with the terms of this
Agreement.
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18. Independent Contractors.
18.1 The parties hereto acknowledge and confirm that in performing their
obligations under this Agreement, each is acting as an independent contractor
and they are not and shall not be considered as joint ventures, partners,
agents, franchisers/franchisees, or employers/employees of each other and
neither shall have the power to bind or obligate the other or contract in the
other's name.
19. Entire Agreement.
19.1 This Agreement sets forth the entire agreement and understanding between
the parties and supersedes all prior agreements and understanding between them
with respect to the subject matter hereof and not representations, inducements,
promise or agreement, oral or otherwise, not embodied herein, shall be of any
force or effect.
20. Records.
20.1 The Company agrees to maintain complete records on Products bottled
under this Agreement in a form reasonably satisfactory to the Customer.
21. Applicable Law.
21.1 This agreement shall be governed by the laws of the State of Florida.
21.2 If either party brings suit to enforce any of the terms and conditions
of this Agreement, the parties agree that venue shall be the state and federal
courts located in Miami-Dade County, Florida. In addition and without limiting
the foregoing, the Company may initiate and prosecute any legal proceeding in
any state or jurisdiction in which the Customer may be domiciled or does
business, or seek enforcement of any judgment o\in any other proper court having
jurisdiction in any other state in the United States.
21.3 In the event of any litigation or proceeding arising out of or in
connection with this Agreement, the prevailing party, in addition to any other
remedy that may be awarded, shall be entitled to recover from the other party
its reasonable attorneys' fees and costs.
22. Survival of Warranties and Indemnifications.
22.1 The warranties, representations, guarantees indemnifications contained
herein shall continue in full force and effect notwithstanding any expiration or
other termination of the Agreement.
23. Counterparts.
23.1 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one agreement.
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the date and year first above written.
Southeast-Atlantic Beverage Corporation
/s/Steve Landsgaard
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Print Name: Steve Landsgaard
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Title:Director of Operations
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Date: August 10, 2004
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HANSEN BEVERAGE COMPANY
/s/Rodney C. Sacks
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Print Name: Rodney C. Sacks
Title:Chairman
Date: August 2, 2004
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