CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT 10.1, AS INDICATED BY
"***", PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT, AND HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
[logo of Urban Juice & Soda]
[letterhead of Urban Juice & Soda]
Bottling Agreement:
World Choice Bottling Corp.
1. PERIOD AND TERM
This Agreement between Urban Juice & Soda and World Choice Bottling
commences on February 24, 1999 and extends for a period of three
years, expiring on February 23, 2002. At the termination of this three
year term, this contract between Urban Juice & Soda and World Choice
Bottling may be renewed for a second term of three years, subject to
the mutual Agreement of both Urban Juice & Soda and World Choice
Bottling.
2. VOLUME GUARANTEE
Urban Juice & Soda agrees to produce a minimum of 1,600,000 cases
during the three (3) year term of this Agreement. If, at the end of
this (3) year Agreement, Urban Juice & Soda has not purchased the
required number of cases, Urban Juice & Soda will pay $***/case for
every case short of 1,600,000 cases.
3. PACKAGE AND PRODUCTS
This Agreement covers the following package and products produced in
12 oz. X.X. Xxxxx Soda Glass in trays or Tab-Lock RSC cartons and 28
xx X.X.X.X. closures, with a full wrap-around paper label (dim: 8" x
3 1/4").
Brand Size Products Case Pack
------------------------------------------------------------
Xxxxx Soda 12 oz. (355 ml) 16 SKUs 24 (bottles) per case
Xxxxx Soda 4 x 12 oz. (355 ml) 6 SKUs 6 (4-packs) per case
Flavors, packages and/or SKUs may be changed or added at any time
without notice from Urban Juice & Soda.
4. QUALITY ASSURANCE PROCEDURES
World Choice agrees to abide by all Standards and Procedures as set in
the Urban Copacker Manual. World Choice will not be held liable, or be
required to incur any additional production cost over and above
industry standards, in complying with the Standards and Procedures as
set out by Urban Juice & Soda. Inability to reasonably comply with all
of Urban's Standards and Procedures may result in immediate
termination of this Agreement and as such, World Choice will not be
entitled to compensation as outlined in Section 2.
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[logo of Urban Juice & Soda]
5. SUPPLY AND MANAGEMENT OF INGREDIENTS AND PACKAGING MATERIALS
World Choice Bottling will purchase all ingredients as listed in
Schedule "A" (sweetener, acidulates, and preservatives) with the
exclusion of Concentrates, and then calculate a per case price back
(in addition to the $*** copack fee) to Urban based on the Xxxxx Soda
Formulations provided by Urban and with costs according to Schedule
"A". The costs set forth in Schedule "A" may change with 30 days prior
written notice and only as a direct result of a supplier price
increase or decrease to World Choice Bottling.
Urban Juice will supply required amounts of packaging materials for
the manufacturing and packing of the products as set out in Schedule
"A". World Choice Bottling will schedule delivery of packaging
materials as required (with the exclusion of labels & concentrate)
from the supply as ordered and/or purchased by Urban. Each material
supplier will invoice Urban directly for all such materials.
At the conclusion of each production run, World Choice Bottling will
provide receipt documentation of all materials received and a full
inventory of left-over materials. World Choice Bottling will be held
responsible for all materials received to World Choice's Bottling
facility in accordance with wastage allowances and costs as in
Schedule "A".
6. PACKAGING FEES
World Choice Bottling will charge $*** CAD per case inclusive of
water, labour and all incidental packaging materials (glue, stretch
wrap, shrink-wrap, ink, etc.) for the manufacture of Xxxxx Soda.
7. LABEL CHANGES
World Choice Bottling will allow one (1) extra label change (first
label is not considered a change) per SKU at no extra charge. Urban
Juice & Soda will pay $*** for every change on the same SKU thereafter.
8. MINIMUM RUNS
Urban Juice & Soda agrees to schedule minimum total production runs of
20,000 total cases. In addition, the minimum run per package (single
serve or 4-packs) must be no less than 15,000 cases.
9. ADDITIONAL LABOUR COSTS
In the event that 4-packs must be erected by hand, Urban Juice & Soda
agrees to pay (for 4-pack production only) either $***/cs or World
Choice labour cost, whichever is less.
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[logo of Urban Juice & Xxxx]
00. WAREHOUSING STORAGE AND HANDLING (RAW MATERIALS/FINISHED GOODS)
World Choice Bottling will store all required raw materials to a
maximum of 2000 square feet at no additional cost to Urban Juice &
Soda Co. In addition, World Choice will store all Xxxxx Soda finished
product produced at World Choice for a flat fee of $***/case including
all storage and handling. Urban Juice & Soda will pay an additional
order picking charge of $***/case for shipments other than 60 cases (1
pallet) per flavor. Urban Juice & Soda will require storage space for
a maximum of 75,000 cases stacked two pallets high (or approximately
11,000 square feet) at any given time. Urban Juice & Soda will also
have right of first refusal to any space available in addition to the
allowed maximum. If at any such time during the course of this
Agreement World Choice does not have sufficient space to store product
produced at its own facility under the allowed maximum, arrangements
may be made by World Choice to store the extra product, at World
Choice's cost, at an outside facility with prior written approval by
Urban Juice & Soda. Conversely, the same such arrangements will be the
responsibility of Urban Juice & Soda if there is not sufficient space
to store any product produced at World Choice over the allowed maximum.
11. INSURANCE
World Choice Bottling will maintain product liability insurance of CDN
$10,000,000 for all Urban Juice & Soda products produced at World
Choice Bottling.
12. VOLUME DISCOUNT
The following earned credit program is based on annual case volumes
and is discounted off aggregate Packaging Fees. During the course of
this agreement, the Annual Volume for the previous year will be
calculated and immediately payable to Urban Juice & Soda upon
completion of World Choice Bottling annual independent audit, but not
later than February 15. Should audit completion occur after February
15, the Volume Discount shall be subject to verification and
correction by said audit.
Annual Volume Discount
-------------------------------------
200,000 - 500,000 cases $***/case
500,000 - 1,000,000 cases $***/case
> 1,000,000 cases $***/case
13. EQUIPMENT
World Choice will purchase and install equipment to facilitate the
following: receipt of glass bottles in bulk configuration, form trays
3-1/4" in height), and shrink-wrap the finished product. In addition,
World Choice is receptive to further negotiation for any additional
equipment that may be required.
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14. ASSIGNMENT
This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither party shall assign this Agreement without
the prior written consent of the other party, assign to anyone including
a subsidiary or affiliate, or such party's rights, but not obligations, to
any lender of such party. Subject to obtaining the written consent of
World Choice, Urban Juice & Soda agrees that in the event Urban Juice &
Soda conveys the bulk of its business to a third party (whether pursuant
to an asset sale, stock sale or otherwise) during the term of this
Agreement, Urban Juice & Soda shall cause the purchaser of such assets,
stock or otherwise, as the case may be, to assume the obligations of
Urban Juice & Soda under this Agreement.
15. TERMS
Net 30 days from the final date of finished goods production. In the event
that any monetary obligations of any nature owed by the Company to World
Choice hereunder are not paid by the Company when due, the Company shall,
in addition to the unpaid monetary obligations, pay to World Choice
hereunder interest on such unpaid amount at a rate equal to ***(***%)
per cent per annum in excess of the prime interest rate charged by The
Royal Bank of Canada at Vancouver, British Columbia until such monies are
totally paid. In addition, after thirty (30) days from the due date of any
unpaid monetary obligations by the Company, World Choice may withhold
shipments of any kind until all invoices are paid current, or unless it
has been mutually agreed upon to extend. Further, after sixty (60) days
from the due date of any unpaid monetary obligations by the Company, World
Choice as a partial recourse may sell or otherwise dispose of any
Ingredients, Packaging and Products in the ordinary course of business but
must express, in writing to Urban Juice & Soda, its intentions to exercise
that recourse thirty (30) days prior to such action.
16. ARBITRATION
World Choice Bottling and Urban Juice & Soda agree to use their best
efforts to settle any controversy, dispute or claim arising out of or in
connection with this Agreement quickly, amicably and in the most cost
effective manner. Each party agrees before taking any other action to
notify the other party in writing of any dispute or claim arising out of
or relating to this Agreement. The parties agree to use their best efforts
to communicate with each other to attempt to resolve the dispute or claim.
If the dispute or claim has not been resolved within 30 days after receipt
of written notification of the dispute or claim, the parties then agree to
submit the matter to arbitration, in accordance with the provisions of the
Commercial Arbitration Act of British Columbia. Arbitration shall be
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before a single arbitrator. If the parties cannot agree on a single
arbitrator, then the arbitrator shall be appointed by a Justice of the
Supreme Court of British Columbia. The decision of the arbitrator shall be
final and binding upon the parties.
This agreement is governed by the laws of British Columbia, Canada. The
undersigned hereby agree that jurisdiction and venue for any litigation
arising out of this Agreement shall be in Vancouver, British Columbia,
Canada. In the event of such litigation the prevailing party shall be
entitled to its reasonable attorney's fees and costs of suit.
17. FORCE MAJEURE
Neither party shall be held liable for its failure to perform any of its
obligations under this Agreement due to a cause beyond its reasonable
control including, but not limited to, acts of God, fire, storm, flood,
explosion, equipment failure (other than failure due to negligence on
behalf of World Choice), strike, lockout or other industrial disturbance,
act of public enemy, war, riot, laws, rules and regulations or orders of
any duly constituted government authority, or non-availability of
materials or transportation (each an "Intervening Event"). Each party
shall take all reasonable steps to eliminate any Intervening Event and
will perform all its obligations under this Agreement as far as
practicable, but nothing herein will require either party to complete its
obligations under this Agreement if the Intervening Event renders
completion impossible. The inability of World Choice to produce Xxxxx
Soda for a period of more than 30 days due to any Intervening Event,
including those due to negligence, may result in the immediate
termination of this Agreement and as such, World Choice will not be
entitled to compensation as outlined in Section 2.
18. AGREEMENT
This Agreement contains the entire understanding between the parties with
respect to the subject matter hereof, superseding all prior written or
oral understandings or agreements. This Agreement may only be amended in
writing, signed by both parties.
Accepted and Approved: Sincerely,
WORLD CHOICE BOTTLING CO. XXXXX XXXXX & SODA CO.
By: /s/ Xxxxx Xxxx /s/ Xxxxxxxx Cue
----------------------------- Xxxxxxxx Cue,
Xxxxx Xxxx Chief Financial Officer
Title: Vice President
-------------------------- /s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx,
Operations Manager
Date: February 26, 1999
---------------------------
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SCHEDULE "A"
LIST OF INGREDIENTS, PACKAGING MATERIALS,
WASTE ALLOWANCE AND PRICES
ITEM PRICE (Cdn) LOSS ALLOWANCE
-----------------------------------------------------------------------------------
INGREDIENTS (PURCHASED BY WORLD CHOICE)
Fructose "55" $***/kg 3.0%
Citric Acid $***/kg 3.0%
Malic Acid $***/kg 3.0%
Phosphoric Acid $***/kg 3.0%
Sodium Benzoate $***/kg 3.0%
Potassium Sorbate $***/kg 3.0%
CO2 $***/kg 3.0%
PACKAGING MATERIALS & CONCENTRATES (PURCHASED BY URBAN JUICE & SODA)
Concentrate *** 3.0%
Color & Caffeine *** 3.0%
Bottles (12 oz.) $***/gross 2.0%
Labels $***/1000 2.0%
Closures (X.X.X.X.) $***/1000 1.0%
Trays $***/1000 1.0%
Pallets $*** each 0.0%
**Loss allowance factors may be changed by mutual consent.**
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