BLOW MOLDING AGREEMENT
This Blow Molding Agreement ("Agreement") is made effective as of the date
below, by and between Hawaiian Natural Water Co., Inc. ("Customer"), and Bottles
Packaging, Inc. ("Supplier"). The parties agree as follows:
BLOW MOLDING BUSINESS ("Enterprise"). Undertake all the necessary steps to
assure the successful conclusion of mutually beneficial Enterprise, where by the
Supplier will place a blow molding equipment on Customer premises with an
obligation to provide the Customer with plastic (PET) bottles. Beginning with
February of 1996 the Supplier will provide 100% of Customer annual requirement
for plastic (PET) bottles.
CONDUCT OF BUSINESS. The Enterprise conducted by the Supplier is an independent
and autonomous business operating on the property provided by the Customer. The
Supplier obligates to provide the bottles to the Customer on a priority basis.
The Supplier grants the Customer exclusive rights to sell the PET bottles in the
State of Hawaii. The total volume of bottles sold in the State of Hawaii will
determine the volume pricing and other volume related provisions of this
agreement. The Supplier is free to sell the excess available bottles, not of the
Customer proprietary design, on the open market outside the State of Hawaii.
Volume sold outside the State of Hawaii will not affect the volume related
provisions of this agreement.
TERM. The Agreement term will begin on the effective date of this agreement and
will terminate three (3) years form the date of the first bottle delivery.
RENEWAL TERMS. This Agreement shall automatically renew for an additional period
of one year per renewal term on the same terms as this Agreement, unless either
party gives written notice of the termination no later then sixty days prior to
the end of the term or renewal term.
BOTTLE SIZE. Initial bottle sizes will be one and one half liter (1.5 1.), one
liter (1.0 1.) and one half liter (0.5 1.), followed by additional size(s) as
required by Customer.
BOTTLE DESIGN. The Customer will provide the Supplier with drawings and
technical specifications for the bottles of choice.
BOTTLE VOLUME. Customer obligates to purchase from Supplier 100% of the
requirements of the agreed bottle sizes. In the event the Supplier can not
provide 100% of the requirements, the Customer is free to purchase bottles from
alternate sources.
Bottles Packaging, Inc.
00000 Xxxxxx Xxxxx, Xxxx Xxxxxx, XX 00000 Tel.(000)000-0000 Fax (000) 000-0000
Blow Molding Agreement 2 of 3
MINIMUM PURCHASE GUARANTEE. The Customer obligates to purchase a minimum of
bottles in the amount of $750,000 annually. The bottle size mix of the one half
liter (0.5 1.) will not exceed 50% of the total volume. The remaining 50% of the
one liter (1.0 1.) and one and one half liter (1.5 1.) can be divided freely.
BOTTLE PRICES. The table below outlines pricing based on volume. The price will
be reviewed annually and is based on market conditions and PET resin cost as of
the date of this agreement; any decrease or increase in the cost of resin will
be passed on to the Customer at cost.
Volume 0.5 Liter 1.0 Liter 1.5 Liter
------ --------- --------- ---------
Up to 3,499,000 .1700 .2200 .3000
3,500,000 to 4,999,000 .1650 .2200 .2850
4,500,000 to 5,999,000 .1600 .2200 .2800
6,000,000 to 7,999,000 .1550 .2200 .2750
8,000,000 to 9,999,000 .1500 .2200 .2700
10,000,000 and up .1350 .2200 .2400
TERMS OF PAYMENT. All invoices for the bottles supplied are due and payable
thirty (30) days from the date of the invoice.
QUALITY. Supplier will maintain all quality and technological standards to meet
industry and legal requirements.
BLOW MOLDING EQUIPMENT. Supplier will procure and install at it's own expense
all the necessary machinery and equipment to produce plastic (PET) bottles on
Customer premises at a location provided by the Customer.
BLOW MOLDING EQUIPMENT RE-PURCHASE. The Customer can re-purchase the equipment
from the Supplier for $ 1.00 after the equipment has been operating at full
capacity producing a minimum of 15,000,000 bottles per year for a minimum of
full three (3) years.
LICENCES AND PERMITS. Supplier will obtain all necessary licenses and permits
required for the operation of the blow molding business.
TAXES. Taxes attributable to the conduct of the Blow Molding business will be
paid by Supplier.
Blow Molding Agreement 3 of 3
SEVERABILITY. If any portion of this Agreement shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Agreement is
invalid or unenforceable, but that by limiting such provision, it would become
valid and enforceable, then such provision shall be deemed to be written,
construed and enforced as so limited.
WAIVER. The failure of either party to enforce any provisions of this Agreement
shall not be construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every provision of this
Agreement.
CUMULATIVE RIGHTS. The rights of the parties under this Agreement are
cumulative, and shall not be construed as exclusive unless otherwise required by
law.
ARBITRATION. Any controversy or claim arising out of or relating to this
agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the Arbitrator(s) will be binding on
both parties.
GOVERNING LAW. This Agreement shall be construed in accordance with the laws of
the state of Hawaii.
CUSTOMER: SUPPLIER:
Hawaiian Natural Water Co., Inc. Bottles Packaging Inc.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
------------------------------- -----------------------
Xxxxxx Xxxxxx Xxxxxx Xxxxxx
President C.E.O.
Date 12/1/95 Date 11/30/95
[LOGO]
HAWAIIAN
NATURAL
WATER COMPANY, INC.
June 12, 1996
Xx. XXXX XXXXXX, BPI
REF: BOTTLES PACKAGING, INC. (BPI), - ADDENDUM TO BLOW MOLDING AGREEMENT
ORIGINALLY DATED DEC. 1996.
CONFIRMING PURCHASE ORDER ARRANGEMENT - with Xx. Xxxx Xxxxxx, CFO, BPI for the
purchase of 10,000,000 bottles at HNWC plant at Keaau, Hawaii
--------------------------------------------------------------------------------
NEW SCHEDULE OF LOWEST PRICE BOTTLE COST AT THE 10,000,000 LEVEL:
One third liter $.1350 Note A
One half liter size $.1350 5,000,000 $675,000
One liter size $.22 Note B 2,500,000 $550,000
One and one-half size $.24 2,500,000 $600,000
---------- ----------
10,000,000 $1,825,000
---------- ----------
Note A - Price to be renegotiated in three months for the one third liter size.
Volume to be provided after additional market planning is performed. Quantity
will be shared with the one half liter size.
Note B - The price of the one liter is $.22 cents based upon the 36 gram
preform. BPI will renegotiate the cost when BPI obtains a lighter weight
preform.
HNWC will purchase 10,000,000 bottles from BPI beginning on July 1, 1996 for a
total cost of $1,825,000 for the period July 1, 1996 to June 30, 1997. HNWC will
provide three month estimates to BPI for the quantity to be drawn down.
Estimates will be provided one month in advance and updated each month for
subsequent months. Payment terms for these purchases will be net 15 days for the
first three months and beginning Oct. 1, 1996 the payment terms will be net 30
days.
/s/ Xxxxxx Xxxxxx /s/ Xxxx Xxxxxx
XXXXXX XXXXXX, PRESIDENT ACCEPTED BY: XXXX XXXXXX, BPI
DATE: 6/12/96 DATE: 6/13/96
Hawaiian Natural Water, Inc.
Corporate Office: 0000 Xxxxxxx Xxxxxx * Suite 201 * Xxxxxxxx, Xxxxxx 00000 XXX
* (000) 000-0000 * FAX (000) 000-0000
Bottling Plant: 00-000 Xxx Xxxxxxx Xxxx * Xxxxx. Xxxxxx 00000 XXX
* (000) 000-0000
