printer-friendly

Sample Business Contracts

Packaging Agreement - Hansen Beverage Co. and US Continental Packaging Inc.

Sponsored Links


April 14,1997

Mr. Hilton H. Schlosberg
Vice Chairman
Hansen Beverage Company
2401 East Katella Avenue
Suite 650
Anaheim, CA 92806

         Re:      Packaging Agreement between Hansen Beverage Company and
                  U.S. Continental Packaging, Inc.

Dear Mr. Schlosberg:

         U.S. Continental Packaging, Inc., a California corporation ("USCP"), is
pleased to provide  packaging,  bundle  wrapping and  distribution  services for
Hansen Beverage Company  ("Hansen")  beverage products pursuant to the terms and
conditions set forth herein.

1.       Primary Engagement

         a.       Hansen hereby engages USCP as its primary  distribution center
                  for Hansen beverage products for truck delivery other than for
                  products  shipped  directly  from  Hansen  Co-packers  in  the
                  "Territory"   as   described   on  Schedule  "1"  hereto  (the
                  "Territory").  As such,  USCP  shall have  responsibility  for
                  loading  trucks with Hansen  beverage  products  scheduled for
                  delivery.  USCP shall  manage  inventory  at the  distribution
                  center and  assemble  and load it, as  appropriate,  for truck
                  delivery  in  accordance  with  the  procedures  set  forth in
                  Schedule  "'2"  hereto.  USCP will provide all  personnel  and
                  equipment necessary to meet its obligations hereunder.

         b.       USCP will  provide  such dry  packaging  services  and  bundle
                  wrapping of Hansen  beverage  products as may be  requested by
                  Hansen  and in  accordance  with the  procedures  set forth in
                  Schedule "2" hereto.  The parties hereto acknowledge that USCP
                  is not responsible for filling any beverage  products in cans,
                  bottles or other containers.

         c.       USCP will case pack and hand load trucks with Hansen  beverage
                  products,  all such  loading to take place at the loading dock
                  of the "Facility" (as defined herein).

2.       Compensation

         a.       Hansen will  compensate  USCP in accordance with the terms set
                  forth in Schedule  "3" hereto for  services  rendered by USCP.
                  Prices charged to Hansen by USCP will not increase  during the
                  first year of this agreement. Thereafter, prices may increase,
                  but such  increases  shall be limited to actual  increases  in
                  direct costs incurred by USCP.  USCP shall provide  reasonable
                  support for any such increases to Hansen.

         b.       After six (6) months  from the  inception  of this  Agreement,
                  USCP  will,  in good  faith,  evaluate  its  costs  of  actual
                  operations as compared to its estimated costs of operations at
                  the  commencement  of this  agreement and in the event of such
                  actual costs being lower,  it shall pass an appropriate  price
                  reduction  onto Hansen.  Such costs shall be  determined on an
                  ongoing  basis and shall  exclude  costs  incurred  during the
                  start up phase of the business.

                                       1
<PAGE>

3.       Facility Lease and Related Expense

         a.       Hansen will lease such industrial facilities as are necessary
                  for USCP to discharge its services in accordance herewith. The
                  parties contemplate that Hansen will lease a facility (the
                  "Facility") of an appropriate size and which is estimated too
                  be approximately 50,000 square feet.  Hansen will be respon-
                  sible for and pay the rent for such facility; provided,
                  however, that if by agreement between the parties, a larger
                  facility is leased by Hansen with a view to an agreed portion
                  up to 10,000 square feet being utilized by USCP for its other
                  business activities, then USCP shall be responsible to reim-
                  burse Hanse for such excess area on the basis set out below
                  and to the extent necessary USCP will sign an appropriate
                  sublease on the same terms as the main lease mutatis mutandis,
                  but for a period of 2 years and on the basis that Hansen shall
                  be entitled to terminate such sublease on 60 days written
                  notice at any time, in the event that such excess area is
                  required for Hansen products.

         b.       In the event of any portion of the Facility being subleased to
                  USCP,  then Hansen and USCP shall be responsible  for the rent
                  as follows.  Hansen will make all payments due to the landlord
                  (or the  sublessor,  as the case may be) for its  lease of the
                  Facility. USCP shall reimburse Hansen, on a monthly basis, for
                  a portion of rent as follows:

                  Monthly Rent Reimbursement =

                  Monthly rent for the Facility x (area of the Facility occupied
                  by USCP for its own  business  divided  by  total  area of the
                  Facility)

         c.       All expenses  associated with said lease and occupation of the
                  facility including, but not limited to, utilities,  insurance,
                  repairs, maintenance and cleaning, will be paid by USCP. If so
                  paid, Hansen will reimburse USCP its agreed share on demand or
                  if paid by  Hansen,  USCP will  reimburse  Hansen on demand or
                  Hansen will deduct it from any amounts owing,  save and except
                  for the following which shall be paid for by Hansen.

                  (i)      Alarm service

                  (ii)     Insurance over Hansen Inventory,  but not relating to
                           the operations of USCP in the Facility

                  (iii)    Hansen's pro rata share of the utilities attributable
                           to that portion of the Facility  that is utilized for
                           storage of the products.  It is specifically recorded
                           that the electrical  costs of operating any equipment
                           for the  activities  of USCP  shall be borne and paid
                           for in full by USCP.  USCP  shall  procure  that such
                           electricity costs are separately monitored.

         d.       Hansen shall permit USCP to have exclusive use of the Facility
                  for the purpose of providing  services to Hansen in accordance
                  herewith  and  as  otherwise  permitted  under  Section  3 (b)
                  hereof,  except that approximately  7,000 square feet of space
                  will be set aside as office space for Hansen personnel.


                                       2
<PAGE>


4.   Obligations of USCP.  USCP shall be liable to Hansen on an annual basis for
     any  damage or loss of Hansen  products  in excess of  $25,200.00  while in
     possession  and  control  of USCP prior to  delivery  of such  products  to
     carriers (from and after which, USCP's responsibility for damage or loss of
     products  shall  cease),  except  to  the  extent  that  Hansen  employees,
     independent  contractors  acting on behalf of Hansen  (other  than USCP) or
     agents of Hansen are  responsible  for any such damage or loss.  USCP shall
     also be  responsible  for any other loss  suffered by Hansen as a result of
     USCP's breach of its obligations hereunder,  except to the extent that such
     loss is attributable to Hansen employees, independent contractors acting on
     behalf of Hansen  (other  than  USCP) or agents of  Hansen.  Damage or loss
     shall be monitored on a monthly basis.

5.  Representations, Warranties and Covenants of Parties

          5.1     Representations  and Warranties by Hansen.  Hansen  represents
                  and warrants to, and agrees with USCP as follows:

                  a.       Binding  Agreement.  This  Agreement  has  been  duly
                           executed and  delivered by Hansen and  constitutes  a
                           valid  and  legally  binding   agreement  of  Hansen,
                           enforceable in accordance  its terms  subject,  as to
                           enforcement,      to     bankruptcy,      insolvency,
                           reorganization    and   other    laws   of    general
                           applicability  relating  to or  affecting  creditors'
                           rights  and  provided  that the  remedy  of  specific
                           performance   and   injunctive  and  other  forms  of
                           equitable relief may be subject to equitable defenses
                           and to the  discretion  of the court before which any
                           proceeding therefor may be brought.

                  b.       Non-Contravention. The execution and delivery of this
                           Agreement  by  Hansen  and  the  consummation  of the
                           business  matters   contemplated   thereby  will  not
                           violate any provision of any mortgage,  lien,  lease,
                           agreement,  license or instrument to which Hansen (or
                           any affiliate thereof) is a party.

          5.2     Representations  and Warranties by USCP.  USCP  represents and
                  warrants to, and agrees with, Hansen as follows:

                  a.       Binding  Agreement.  This  Agreement  has  been  duly
                           executed  and  delivered  by USCP and  constitutes  a
                           valid  and   legally   binding   agreement   of  USCP
                           enforceable, in accordance with its terms subject, as
                           to    enforcement,    to   bankruptcy,    insolvency,
                           reorganization    and   other    laws   of    general
                           applicability  relating  to or  affecting  creditors'
                           rights  and  provided  that the  remedy  of  specific
                           performance   and   injunctive  and  other  forms  of
                           equitable relief may be subject to equitable defenses
                           and to the  discretion  of the court before which any
                           proceeding therefor may be brought.

                  b.       Non-Contravention. The execution and delivery of this
                           Agreement  by  USCP  and  the   consummation  of  the
                           business  matters   contemplated   thereby  will  not
                           violate any provision of any mortgage,  lien,  lease,
                           agreement,  license or  instrument  to which USCP (or
                           and affiliate thereof) is a party.


                                       3
<PAGE>

6.       Mutual Indemnification.

                  a.       USCP  shall be  indemnified  by  Hansen  for any loss
                           suffered by USCP due to product liability claims, any
                           negligence  or  reckless  conduct  of  Hansen  or its
                           agents and independent  contractors (other than USCP)
                           or  the  breach  of any  obligation,  representation,
                           warranty or covenant of Hansen as contained herein.

                  b.       Hansen  shall  be  indemnified  by USCP  for any loss
                           suffered by Hansen due to any  negligence or reckless
                           conduct of USCP or its  independent  contractors  and
                           agents   or   the    breach   of   any    obligation,
                           representation,  warranty  or  covenant  of  USCP  as
                           contained herein.

7.       Term; Termination Rights.

                  a.       The term of this agreement shall be co-terminous with
                           the initial period of the lease of the facility,  but
                           not  less  than  two  (2)  years   [("Term")].   This
                           agreement shall be renewed annually  thereafter (each
                           such annual renewal  constituting a "Renewal  Term"),
                           unless a party  hereto  gives the other not less than
                           sixty (60) days prior written notice of its intention
                           to  terminate  the  agreement  at the end of the then
                           current Term or Renewal Term, as the case may be.

                  b.       Notwithstanding Section 7(a), this Agreement may be
                           terminated by Hansen prior to expiration of the Term
                           in the vent that USCP fails to satisfy in material
                           respects its duties or obligations hereunder with
                           respect to Hansen beverage products on more than two
                           percent (2.0%) of the bills of lading executed in any
                           calendar month (a "Default" hereunder); provided,
                           however, that USCP shall not be deemed to be in
                           Default hereunder unless it is notified in writing by
                           Hansen of the facts constituting a Default and such
                           failure is not corrected with thirty (30) days of
                           USCP's receipt of such notice, except that in no
                           event shall Hansen be required to provide an oppor-
                           tunity to cure with respect to more than one (1)
                           Default in any consecutive twelve-month period.

                  c.       Notwithstanding  Section 7(a),  this Agreement may be
                           terminated by USCP prior to expiration of the Term in
                           the event  that  Hansen  fails to pay any  amount due
                           hereunder  within ten (10) days of being  notified by
                           USCP in writing of  Hansen's  failure to make  timely
                           payment.

8.       Obligations in the Event of Termination.

                  a.       In the event that this Agreement is terminated by
                           Hansen prior to the expiration of the Term or the
                           Renewal Term in accordance with the terms hereof,
                           then Hansen shall have the right, but not the obliga-
                           tion, to purchase and/or assume the lease of all (but
                           not less than all) equipment used by USCP at the
                           Facility for the purposes of repacking and handling
                           of Hansen product.  In the event that USCP owns
                           equipment subject to purchase by Hansen in accordance
                           herewith, the purchase price therefor shall be as
                           mutually agreed to between the parties; provided,
                           however, that if they do not agree, then the purchase
                           price shall be determined by appraisal by Rabin
                           Brothers Company.  Hansen may assume a lease for
                           equipment subject to acquisition by Hansen hereunder
                           by assuming all payment obligations thereunder and
                           indemnifying USCP for any claim of the lessor of such
                           equipment.

                                       4
<PAGE>

                  b.       In the event of any  termination  hereof,  each party
                           shall  promptly  return  property  belonging  to  the
                           other.

9.   Notices.  Any notice,  direction or instrument  required or permitted to be
     given  hereunder   shall  be  given  in  writing  by  telegram,   facsimile
     transmission or similar method if confirmed by mail as herein provided,  by
     mail,  if  mailed  postage  prepaid,  by  certified  mail,  return  receipt
     requested, or by hand delivery to any party at the address set forth below;
     and, if by telegram or  facsimile  transmission  or similar  method or hand
     delivery, shall be deemed to have been given or made on the day on which it
     is given, and if mailed,  shall be deemed to have been given or made on the
     day the fifth business day following the day after which it was mailed. Any
     party, may, from time to time by like notice,  give notice of any change of
     address,  and in such event, the address of such parties shall be deemed to
     be changed accordingly. The address for each party is:

                  (a.)     If to Hansen:
                                            Mr. Hilton H. Schlosberg
                                            Vice Chairman
                                            Hansen Beverage Company
                                            2401 East Katella Avenue
                                            Anaheim, CA 92806

                           with a copy to:
                                            Mr. Tom Kelly
                                            Hansen Beverage Company
                                            2401 East Katella Avenue
                                            Anaheim, CA 92806


                  (b.)     If to USCP:
                                            Mr. David Williams
                                            President
                                            U.S. Continental Packaging
                                            1450 North Daly Street
                                            Anaheim, CA 92806

                           with a copy to:
                                            Daniel S. Latter
                                            2029 Century Park East
                                            Suite 400
                                            Los Angeles, CA 90067

10.  Severability. In the event any provision of this Agreement shall be void or
     unenforceable  for any  reason  whatsoever,  then such  provision  shall be
     stricken  and of no force and  effect.  The  remaining  provisions  of this
     Agreement,  however,  shall  continue in full force and effect,  and to the
     extent required, shall be modified to preserve their validity.

                                       5
<PAGE>

11.  Remedies Not  Exclusive.  Except as  otherwise  specifically  provided,  no
     remedy  conferred by any of the specific  provisions  of this  Agreement is
     intended to be  exclusive  of any other  remedy,  and each and every remedy
     shall be  cumulative  and shall be in addition to every other  remedy given
     hereunder or now or hereafter existing at law or in equity or by statute or
     otherwise.  The election by a party of any one or more  remedies  shall not
     constitute a waiver of the right to pursue other available remedies.

12.  Compliance with Laws. The consummation of the transactions  hereunder shall
     be subject to compliance with all applicable laws.

13.  Expenses.  Each party shall be responsible for its own expenses,  including
     legal and  accounting  fees,  in  connection  with this  Agreement  and any
     subsequent matters pertaining to the transactions contemplated hereby.

14.  Governing Law. This Agreement shall be interpreted in accordance  with, and
     governed  by, the  internal  substantive  laws of the State of  California,
     without regard to the choice of law rules thereof.

15.  Attorney's  Fees. If any action,  arbitration  or proceeding in contract or
     tort arising out of or relating to this Agreement is commenced by any party
     to this Agreement,  the prevailing  party shall be entitled to receive from
     the other party,  in addition to any other relief that may be granted,  the
     reasonable  attorney's  fees,  costs  (including  court costs) and expenses
     incurred in the action or proceeding by the  prevailing  party,  along with
     any reasonable  attorneys'  fees, costs (including court cost) and expenses
     incurred to collect any amount  awarded in connection  with any such action
     or proceeding.

16.  Arbitration.  Any  controversy  or claim arising out of or relating to this
     Agreement,  or the making,  performance,  breach or interpretation thereof,
     shall be settled by binding  arbitration  in Orange  County,  California in
     accordance   with  the  Commercial   Arbitration   Rules  of  the  American
     Arbitration Association ("AAA") then existing. Any claim concerning whether
     a  particular  matter or issue is  subject  to  arbitration  in  accordance
     herewith shall also be so determined by arbitration.  The arbitration shall
     be held before a single arbitrator. Any award by the AAA shall be final and
     binding between the parties;  and judgment on the arbitration  award may be
     entered in any court  having  jurisdiction  over the subject  matter of the
     controversy. All parties may pursue discovery in accordance with California
     Code of Civil  Procedure  Section  1283.05,  the  provisions  of which  are
     incorporated herein by reference,  with the following  exceptions:  (i) the
     parties  hereto  may  conduct  all  discovery,  including  depositions  for
     discovery purposes, without leave of the arbitrator; and (ii) all discovery
     shall be  completed  no  later  than the  commencement  of the  arbitration
     hearing or one hundred  twenty  (120)  calendar  days after the date that a
     proper demand for arbitration is served,  whichever occurs earlier,  unless
     upon a showing of good  cause,  the  arbitrator  extends or  shortens  that
     period.  Any disputes  relating to such  discovery  will be resolved by the
     arbitrator.  The parties agree that in rendering an award,  the  arbitrator
     shall have no jurisdiction to consider  evidence with respect to, or render
     any award or  judgment  for,  punitive  or  exemplary  damages or any other
     amount  awarded  for the  purposes  of  imposing  a  penalty.  The  parties
     specifically  waive any claims for  punitive  or  exemplary  damages or any
     other amount  awarded for the purposes of imposing a penalty that arise out
     of or are related to this Agreement or the breach  thereof,  or the conduct
     of the parties in connection with this Agreement. The arbitrator shall have
     the power to award reasonable  attorneys' fees and costs.  Either party may
     submit the controversy or claim to arbitration.

                                       6
<PAGE>

17.  No Assignment. USCP may not assign any of its rights or delegate any of its
     duties  hereunder,  without  the prior  written  consent of  Hansen,  which
     consent  may be withheld  irrespective  of the reason  therefor;  provided,
     however,  that USCP may assign its duties and rights  hereunder to a wholly
     owned subsidiary of USCP.

18.  Entire Agreement;  Amendment. This Agreement, including Exhibits, Schedules
     and other documents delivered pursuant to the terms hereof, constitutes the
     entire  agreement  between the  parties  pertaining  to the subject  matter
     contained  herein  and such  agreements  supersede  any and all  prior  and
     contemporaneous  agreements,  representations  and  understandings  of  the
     parties.  No supplement,  modification or amendment of this Agreement shall
     be  binding  unless  executed  in  writing  by both  parties  hereto.  This
     Agreement  may not be  altered,  modified,  amended,  canceled,  rescinded,
     discharged or terminated,  except by an instrument in writing signed by all
     parties hereto.

19.  Multiple Counterparts;  Facsimile Signature. This Agreement may be executed
     in one or more counterparts, each of which shall be deemed an original, but
     all of which  together  shall  constitute  one and the same  instrument.  A
     signed copy of this Agreement delivered by facsimile  transmission shall be
     deemed to have the same legal effect as delivery of an original signed copy
     of this Agreement.

20.  Headings.  The  headings of this  Agreement  are  included  for purposes of
     convenience  only, do not constitute a part hereof and shall not affect the
     construction or interpretation of any of the provisions hereof.

21.  All Terms Material. The parties hereby expressly acknowledge and agree that
     each and every term and  condition  of this  Agreement is of the essence of
     this   Agreement,   constitutes  a  material  part  of  the   bargained-for
     consideration without which this Agreement would not have been executed and
     is a material part of this Agreement.

Thank you for your execution and return to USCP of this binding Agreement.  USCP
looks forward to a long mutually beneficial relationship with Hansen.

                                            U.S. Continental Packaging, Inc.
                                            a California Corporation

                                            By: ______________________________
                                                David L. Williams, President

ACCEPTED AND AGREED TO THIS
_______ DAY OF APRIL, 1997


By: ______________________________
Hilton H. Schlosberg, Vice Chairman
Hansen Beverage Company

                                       7
<PAGE>




                                   SCHEDULE 1
                                  "TERRITORY"

The "TERRITORY" consists of the following areas:

A. State of California - If during the term of this Agreement, Hansen requires a
primary repacking and bundling  facility in North  California,  it shall grant a
right of first refusal to USCP to establish and manage such facility in Northern
California  and perform the  necessary  services  contemplated  with  respect to
Hansen  Beverage  products;  provided  that its prices are at least as low as or
lower than and its terms of business are at least as or more favorable to Hansen
than,  those offered by any competitor and are consistent with the terms of this
Agreement.  USCP  shall be given  fourteen  (14) days  within  which to match or
better any competitor's offer.

B.       The State of Arizona

C.       The State of Nevada



                                       8