Exhibit 10.1
JASPER PRODUCTS, L.L.C. and BRAVO! FOODS INTERNATIONAL CORP.
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MANUFACTURING AGREEMENT
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THIS AGREEMENT is made this 27th day of December, 2005, between
JASPER PRODUCTS, L.L.C. ("JASPER"), a Missouri Limited Liability Company
with an address of 0000 X. 00xx Xxxxxx, Xxxxxx, XX 00000, and Bravo! Foods
International Corp., ("BRAVO"), a Delaware corporation with a principal
place of business at 00000 X.X. Xxx. 0, Xxxxx 000, Xxxxx Xxxx Xxxxx, XX
00000.
TERMS AND CONDITIONS
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NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound, the parties agree as follows:
1. BASIC TERMS
(a) This Section contains basic terms of the Agreement between
JASPER and BRAVO. All other provisions of this Agreement are to be read in
accordance with the provisions herein contained.
i Commencement Date January 1, 2006
ii Termination Date September 30, 2010
iii Product Descriptions Schedule A (2(a))
iv Records Schedule B (2(d))
v Ingredients/Materials/Packaging See Schedule C
Purchased by BRAVO
vi Ingredient/Materials/Packaging See Schedule D
Purchased by JASPER
vii Shrinkage allowance See Schedule E
viii Pricing See Schedule F
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2. PRODUCTION OF PRODUCT
(a) JASPER shall produce for BRAVO, at its facility in Joplin,
Missouri (the "JASPER Facility"), the products described on Schedule A
attached hereto, which may be amended by the parties hereafter from time to
time (the "Products"). BRAVO shall provide JASPER with Purchase Orders
that, at a minimum, will give the Products and quantities ordered, and
delivery dates requested. Purchase Orders will be BRAVO's best estimate of
its current requirements, but may be amended up or down to reflect changing
demand for Products. JASPER shall notify BRAVO if requested delivery dates
cannot be met, so the parties can discuss an acceptable production
schedule.
(b) All Products manufactured, packaged and delivered by JASPER
under the terms of this Agreement shall conform to the specifications
supplied to JASPER by BRAVO as listed on Schedule A, which Schedule may
from time to time be modified by BRAVO in writing. No change in Product
specifications shall be binding on JASPER until BRAVO has provided written
Product specifications for each SKU, and each specification is signed and
dated by the parties. JASPER shall not unreasonably refuse or fail to sign
off on Product Specifications submitted by BRAVO. Any additional net cost
increases or decreases associated with any modifications to BRAVO's Product
specifications shall be borne by or credited to BRAVO (the term "net costs"
as used herein shall mean the net increase or decrease for the items
referenced in Section 3 of this Agreement, as affected by changes in the
Product specifications). JASPER also agrees to comply with all laws and
regulations applicable to production of the Products, including laws and
regulations of the United States Food and Drug Administration ("FDA"),
United States Public Health Service ("PHS"), and any and all other
applicable federal, state and local laws and regulations. JASPER warrants
that the Products shall be released free from defects in workmanship and
shall be manufactured in accordance with applicable good manufacturing
practices ("GMP"), which shall comply with Food Manufacturing GMPs that may
be adopted by the FDA and/or PHS as a minimum manufacturing standard.
JASPER further warrants that the Products, when delivered to BRAVO in
accordance with this Agreement, shall not be adulterated within the meaning
of the Federal Food, Drug and Cosmetic Act.
(c) Upon reasonable notice, and during normal operating hours,
JASPER shall permit BRAVO representatives reasonable access to portions of
the JASPER Facility used to produce the Products for the purpose of
ascertaining JASPER's compliance with good manufacturing practices and
BRAVO's specifications and quality assurance requirements. JASPER agrees to
disclose to BRAVO and provide a list, upon request, of any material
violations or deficiencies noted during any inspection of the JASPER
Facility which have a material adverse effect on the manufacture or
packaging of the Products by the United States Food and Drug
Administration, United States Department of Agriculture, United States
Public Health Service, or any other federal, state or local health or food
regulatory agency.
(d) JASPER will keep complete and accurate records in connection
with the Products with respect to manufacturing practices, quality
assurance measures, analytical procedures and their resultant data. Such
records shall include at least those listed on attached Schedule B. Upon
reasonable notice, JASPER shall allow BRAVO access to such records during
normal working hours.
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3. DELIVERY, PRICING, BILLING AND PAYMENT
(a) JASPER shall coordinate shipments to meet scheduled delivery
dates of the Products with JASPER designated transportation providers. All
shipments of the Products shall be by common carrier, F.O.B. the JASPER
Facility.
(b) JASPER shall purchase the materials identified in Schedule D to
be used in connection with the manufacture of the Products.
(c) JASPER shall charge BRAVO a tolling fee and material charges as
listed in Schedule F.
(d) The minimum production run for Products shall be 240,000
bottles per one flavor. Charges for runs less than the minimum are
addressed in Schedule F.
(e) JASPER shall supply ingredients and packaging materials as
listed in Schedule D.
(f) JASPER shall invoice BRAVO on the date the Product is released
from the required incubation period (the "Released Product").. Payment
terms for all Released Product invoices shall be net 5 days. Failure by
BRAVO to meet payment terms of any invoice shall result in interest being
imposed on any unpaid balance at the rate of one percent (1%) per month
accrued from a date 10 days after the invoice date or in the event such
rate exceeds that permitted to be charged by law, the maximum rate
permitted by law.
(g) JASPER shall keep complete and accurate records and accounts
with respect to costs incurred, credits, if any, and all materials,
ingredients, and equipment used or provided, under the provisions of this
Agreement. BRAVO shall have the right to audit, subject to reasonable
notice and during normal business hours and at BRAVO's sole cost, records
pertaining to matters set forth in Section 3 hereof.
4. STORAGE, SHIPPING AND INVENTORY
(a) During the term of this Agreement, JASPER agrees to handle and
store reasonable amounts of raw materials based upon the level of
production expected in the upcoming forty-five (45) days. With regard to
finished Released Product, JASPER agrees during the term of this Agreement
to store finished Released Products as provided in Schedule F.
(b) BRAVO agrees to issue shipping instructions in full pallet
increments of one Product per pallet and, with respect to orders from Coca-
Cola Enterprises Inc., in truckloads of 25,000 pounds or more. JASPER shall
ship oldest Released Products first, unless otherwise directed in writing
by BRAVO. Shipment of Products shall only be from Released Product
inventory that has completed any required incubation period, unless
directed otherwise by BRAVO in writing, in which case BRAVO agrees that it
waives and releases any claims it may have against JASPER for such early
release, and further agrees to indemnify and hold JASPER harmless from and
against all possible legal ramifications or liability resulting from an
early release.
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(c) JASPER shall be responsible for any loss of finished Product
prior to the issuance of an invoice to BRAVO for the Released Product,
provided however, that JASPER shall have no liability in the event such
loss occurred as the result of JASPER's compliance with BRAVO's
specifications or directions. JASPER shall also bear no responsibility or
liability for loss from acts of war, acts of civil insurrection or acts of
God, as commonly defined by standard hazard insurance policies.
(d) BRAVO shall be responsible for loss of finished Released
Products upon the issuance of an invoice for such Products by JASPER.
(e) JASPER shall provide an inventory for BRAVO on the last day of
each month and transmit inventory count to BRAVO via e-mail or facsimile
transmission. The inventory will include all ingredients and other raw
materials, packaging, goods in progress, and finished Products.
5. TRADEMARKS
(a) BRAVO represents and warrants that it owns or otherwise has the
right to use all trademarks (the "Trademarks") and copyrighted material
(the "Copyrights") provided by BRAVO to JASPER for use in connection with
the manufacture or packaging of the Products. JASPER will not use any of
the Trademarks or Copyrights owned or licensed by BRAVO for any other
purpose without the prior written consent of BRAVO in each instance.
6. QUALITY CONTROL
(a) JASPER agrees to perform, at its expense, sampling and testing
procedures for the Products in accordance with Schedule B, which is
attached, and applicable governmental regulations. If additional testing,
not identified in Schedule B, is required by BRAVO, a reasonable additional
fee will be agreed upon between JASPER and BRAVO to cover the associated
incremental cost. Other quality control items to be performed under this
Agreement are as follows:
i Normal production runs shall require BRAVO to provide at least
two (2) non-work hour phone numbers for BRAVO employees who can
be contacted in the event a problem occurs during a production
run not being conducted during normal business hours.
ii JASPER shall keep retention samples in accordance with Schedule
B.
iii All formulas will be submitted to JASPER in a standard Product
Format that will be provided by JASPER to BRAVO.
iv BRAVO shall be responsible for compliance with any federal or
state labeling requirements.
v All manufacturing instructions and all Kosher certificates,
shall be obtained by JASPER at least thirty (30) days prior to
production runs.
vi JASPER shall perform ingredient testing, and JASPER shall be
responsible for obtaining Certificates of Analysis (COA)
required for all incoming items.
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7. INDEMNITY
(a) BRAVO shall indemnify, defend and hold JASPER harmless from and
against any and all loss, cost, expense, claim, suit, damage or liability
(including reasonable attorneys' fees and court costs) arising out of or
relating to an infringement or alleged infringement of any Trademarks or
Copyrights. In addition, BRAVO shall indemnify, defend and hold JASPER
harmless from and against any and all loss, cost, suit, expense, claim,
damage or liability arising out of or relating to: (i) JASPER's adherence
to the Product Specifications or written orders or instructions given by
BRAVO to JASPER relating to the manufacture or packaging of Products; (ii)
BRAVO's breach of any of its obligations contained herein; and (iii) the
storage, sale, marketing, distribution and consumption of the Products,
other than any loss, claim, liability, suit, expense or damage which would
be covered under Section 7(b) hereof.
(b) JASPER shall indemnify, defend and hold BRAVO harmless from and
against any loss, cost, expense, claim, suit, damage or liability arising
out of or resulting from JASPER's negligent manufacturing and packaging of
the Products. In the event of damage or liability arising from a defect in
any materials purchased by JASPER on behalf of XXXXX, XXXXXX agrees to work
in conjunction with BRAVO in pursuing a legal remedy for the damage or
liability against the vendor of the material, including asserting any
claims JASPER has against the vendor. Notwithstanding the above, JASPER
shall not be responsible for any loss, claim, expense, suit, damage, or
liability arising out or attributable to JASPER's adherence to Product
Specifications or to any written orders or instruction(s) from BRAVO
regarding the manufacture or packaging of the Products, as set forth in
Section 7(a) above.
(c) The party seeking indemnification shall send the other party
hereto written notice of any suit, claim, or damage for which such party
has notice and to which these provisions may apply. In the event suit is
commenced, the indemnifying party shall have the right to appear in defense
of any such suit at its own cost. The appearance of the indemnifying party
in such proceeding shall not be construed as an admission of liability and
shall not constitute a waiver of any of its rights.
8. RISK OF LOSS AND INSURANCE
(a) Title to the Products shall be in and remain with BRAVO from
the date JASPER issues an invoice to BRAVO for the Released Products.
JASPER shall bear the risk of loss to the Products until the Released
Products are invoiced. JASPER shall bear no responsibility for loss to
Products resulting from acts of war, acts of civil insurrection or acts of
God, as commonly defined by standard hazard insurance policies.
(b) During the term of this Agreement, JASPER shall carry and
maintain (i) Product Liability Insurance in the amount of Five Million
Dollars ($5,000,000.00) combined single limit, for bodily injury and
property damage; (ii) Commercial General Liability Insurance in the amount
of Five Million Dollars ($5,000,000.00) combined single limit, for bodily
injury and property damage, and (iii) property insurance having limits of
liability of Two Million Dollars ($2,000,000.00). BRAVO shall be named as
an additional insured on JASPER's product liability and CGL policies. The
policies shall not be cancelled or materially modified without notifying
BRAVO at least 30
5
days in advance. Upon request, but no more frequently than annually, JASPER
shall provide BRAVO with evidence of such insurance coverage.
9. CONFIDENTIALITY
(a) Each party recognizes that in the performance of this Agreement
it may acquire, directly or indirectly, proprietary, confidential or trade
secret information of the other. Each party shall treat and regard as
confidential, proprietary and trade secret that information received from
the other which was not previously in the public domain, independently
developed by such other party, or later disclosed to such party by a third
party as a matter of right hereafter (the "Confidential Information") and
shall not utilize, divulge or communicate such information to third parties
except for the direct benefit of the other party, or with such party's
prior consent. Each party shall maintain control of all proprietary,
confidential or trade secret documents and shall return the same to the
appropriate party upon the termination of this Agreement. Each party
acknowledges that the value of the other party's Confidential Information
is unique and substantial, and it may be impractical or difficult to assess
its value in monetary terms. Accordingly, in the event of an actual or
potential violation of this paragraph, the violating party expressly
consents to the enforcement of this Agreement by injunctive relief or
specific performance in addition to any and all other remedies available to
them. JASPER acknowledges that, to the best of its knowledge and without
any independent investigation on the part of JASPER, BRAVO is the sole and
exclusive owner of the Product formula, production recipes, instructions,
manufacturing process sheets and special processes ("Formulations"). JASPER
further acknowledges that BRAVO's Confidential Information includes the
Formulations, that the Formulations are trade secrets that would be
valuable to competitors, and that BRAVO will be irreparably harmed if the
Formulations are directly or indirectly disclosed to, or used, in whole or
in part, for the benefit of BRAVO's competitors. The parties also agree to
treat the terms and conditions of this Agreement as Confidential
Information.
10. FORCE MAJEURE
In the event that either party shall be totally or partially unable
to fulfill one or more of its obligations hereunder as a result of acts or
occurrences beyond the control of the party affected, such as, but not
limited to, actions, omissions or impositions by local, state or federal
governmental authorities (except such actions, omissions or impositions
resulting from or in response to JASPER's violation of or failure to comply
with any governmental or regulatory law, rule, regulation, directive or
ordinance effecting or pertaining to JASPER's business), fire, flood,
earthquake or other natural disasters, acts of God, revolution, strikes or
fuel shortages, the party so affected shall be totally or partially
relieved from fulfilling its obligations under this Agreement during the
period of such force majeure; provided, however, that the affected party
shall notify the other party of the circumstances as soon as reasonably
possible; and further provided that if such period of force majeure shall
continue for a period of three (3) months or more, the party not affected
shall be entitled to terminate this Agreement by giving notice to take
effect immediately. The foregoing shall not relieve either party of any
obligation to make payments required pursuant to this Agreement in
accordance with the terms hereof.
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11. TERMINATION
(a) This Agreement shall commence upon execution by both parties
hereto and shall terminate automatically and without notice on September
30, 2010, unless the parties agree in writing to extend the term of the
Agreement. Either party may terminate this Agreement immediately without
notice should the other party fail to cure, within thirty (30) days after
receipt of written notice thereof, any material breach of its obligations
or duties hereunder, provided, however that in the event of a material
breach that cannot be cured within t thirty (30) days, a party shall not be
deemed in default if it commences curing such default within the thirty
(30) day period and thereafter diligently prosecutes such matter until
cured.
(b) If either party shall file a voluntary petition in bankruptcy,
be declared bankrupt, make an assignment for the benefit of the creditors,
or suffer the appointment of a receiver or a trustee of its assets (who is
not removed or as to which an appropriate bond is not posted by BRAVO
within forty five (45) days of such appointment), that party shall be in
breach of this Agreement and the other party shall have the right to
terminate this Agreement by giving written notice to take effect
immediately.
(c) Upon termination or expiration of this Agreement under any
circumstances, any releasable Product in JASPER's possession shall be
promptly delivered to BRAVO within thirty (30) days of the date of such
termination or expiration or from the date Products are released for sale,
whichever date is later. In addition, BRAVO shall have the option to
purchase all Products and ingredients, packaging and material JASPER has on
hand and not previously billed to BRAVO at the time of the termination that
are used solely for the production of the Products, if any exist. The cost
of all ingredients and packaging material to be purchased by BRAVO shall be
at JASPER's cost FOB Jasper facility.
12. GOVERNING LAW
Venue for any litigation arising out of this Agreement shall be a
federal court in the State of Missouri. The parties hereby submit to the
jurisdiction of that state for such purposes. All matters relating to this
Agreement, the rights of the parties hereunder and the construction of the
terms hereof shall be governed by the laws of the State of Missouri.
13. NOTICES
Except as otherwise expressly set forth in this Agreement, all
notices, demands and other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been given when delivered personally or by documented
overnight delivery services, or sent by facsimile or other electronic
transmission service provided a confirmation copy is also sent no later
than the next business day by first class mail, return receipt requested.
Notices, demands, and communications to the respective parties shall,
unless another address is specified in writing, be sent to the address
indicated below:
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Notice to BRAVO:
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Xxxxxxxx Xxxxxx, Chief Operating Officer: Fax 000-000-0000
Xxx X. Xxxxxx, Xx., General Counsel: Fax 000-000-0000
Bravo Foods International Corp.
00000 X.X. Xxx. 0, Xxxxx 000
Xxxxx Xxxx Xxxxx, XX 00000.
Notice to JASPER:
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Xxxxxxx X. Xxxxxxx: Fax 000-000-0000
Jasper Products, L.L.C.
0000 X. 00xx Xx.
Xxxxxx, XX 00000
14. CONFLICTING TERMS
The terms of this Agreement shall supersede and take precedent over
any conflicting terms found in any purchase order issued by BRAVO.
15. NO WAIVER
The failure of either party to assert a right hereunder or to insist
upon compliance with any terms 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.
16. ENTIRE AGREEMENT AND HEADINGS
This Agreement, and exhibits, schedules or addenda attached hereto
and incorporated herein, as amended from time to time, constitute the
entire agreement of the parties relating to the manufacture, packaging,
storage, and shipping of the Products, and any prior or contemporaneous
agreements or understandings relating thereto are merged herein or
superseded hereby. This Agreement may not be amended except by an
instrument in writing duly executed on behalf of the party against whom
such amendment is sought to be enforced. All headings utilized herein are
inserted for reference only and shall have no effect on the meaning or
construction of any terms of this Agreement. Notwithstanding the above,
BRAVO shall have the right to supplement, modify or amend, from time to
time, the product specifications set forth on Schedule A attached hereto;
provided, however, that no such modification or amendment shall become part
of this Agreement until the same is delivered in writing to JASPER.
17. BINDING EFFECT
This Agreement, and exhibits, schedules or addenda attached hereto
and incorporated herein, shall be binding upon and shall inure to the
benefit of the parties hereto and their respective assignees and successors
in interest. This agreement is not assignable or transferable by either
party, in whole or in part, without the prior written consent of the other
party.
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18. ATTORNEY FEES
Should either JASPER or BRAVO be required to institute legal action to
enforce any of its rights set forth in this Agreement, then the prevailing
party shall be entitled to reimbursement for all reasonable attorneys' fees
and costs incurred as determined by the court in any such action.
19. INDEPENDENT CONTRACTOR
The relationship of JASPER to BRAVO under this Agreement shall be that
of an independent contractor and no agency or employment relationship shall
be implied by this Agreement. Accordingly, JASPER shall be responsible for
payment of all taxes including federal, state and local taxes arising out of
JASPER's activities under this Agreement, including, but not limited to,
federal and state income tax, social security tax, unemployment insurance
tax, and any other taxes or business license fees as required.
20. PRODUCT RECALLS
BRAVO shall have the sole right, exercisable in its discretion, to
initiate and direct the content and scope of a recall, market withdrawal,
stock recovery, product correction and/or advisory safety communication
(any one or more referred to as a "Recall Action") regarding the Products.
At BRAVO's option, BRAVO can direct JASPER to, and upon such direction
JASPER shall, conduct such Recall Action. BRAVO shall determine, in its
sole discretion, the manner, text and timing of any publicity to be given
such matters upon prior consultation with JASPER. In the event a Recall
Action is initiated or directed by XXXXX, XXXXXX agrees to fully cooperate
and take all such steps as are reasonably requested to implement the Recall
Action in a timely and complete manner. Any and all action to be taken in
connection with a Recall Action shall be in accordance with FDA policies
and other applicable laws and regulations. JASPER shall bear the costs
associated with any Recall Action which results from JASPER's failure to
comply with Product specifications set forth on Schedule B. In all other
cases, BRAVO shall bear all costs associated with any Recall Action.
21. SETOFF
Notwithstanding anything herein to the contrary, unless prohibited by
law, BRAVO hereby expressly waives any right it may have to setoff any
amount of money it owes to JASPER against any amount of money JASPER may
owe BRAVO.
[Signature Page Next Following]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by a duly authorized officer on the day and year first above
written.
"JASPER"
JASPER PRODUCTS, L.L.C.
By: /s/ Xxxxxxx Xxxxxxx
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(Print Name) Xxxxxxx Xxxxxxx
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(Title) President
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"BRAVO"
By: /s/ Xxx X. Xxxxxx
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(Print Name) Xxx X. Xxxxxx,
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(Title) Chief Executive Officer
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Schedules:
A. The Products and Product Specifications
X. XXXXXX Records
C. Ingredients & Materials to be supplied by BRAVO
D. Ingredients & Materials to be supplied by XXXXXX
X. Shrinkage allowance
F. Volume pricing schedule/Minimum volume requirements
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule A
Product Description Specification Number
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule B
In accordance with paragraph 2(d) of the Agreement, JASPER shall keep, at a
minimum, the following records.
1.0 Batch Records
1.1 Ingredients lot numbers used in batch
1.2 Amount of each ingredient used in batch
1.3 Temperatures and times as applicable
2.0 Testing Records
2.1 pH readings
2.2 Total Solids (Omnimark)
2.3 Micro and incubation results
2.4 Packaging integrity testing records
3.0 Retention Samples
3.1 JASPER shall maintain retention samples of all lots of Products
for the designated life of the product plus three months.
3.2 Retention samples consist of a minimum of two serving packs
from each batch.
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule C
BRAVO shall supply the following ingredients and materials:
None.
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule D
JASPER shall supply the following ingredients and materials:
All materials used for producing Products
Case glue, ink for coding and stretchwrap are included in the Toll
Fee.
All other materials are procured by Jasper and charged to Bravo in
the Turn Key case cost as noted in Schedule F.
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule E
* redacted
RAW MATERIAL INGREDIENTS PACKAGING EXTRA EXTRA
ALLOWABLE SHRINKAGE FACTOR
(90 million bottles/yr) *% *% % %
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Manufacturing Agreement - Jasper Products and
Bravo Foods International Corp.
Schedule F*
* redacted
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