Sample Business Contracts


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


                                August 14, 2000



Mr. Hilton H. Schlosberg
Vice Chairman
Hansen Beverage Company
Suite 101
2380 Railroad St.
Corona, CA 91720

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

Dear Mr. Schlosberg:

     U.S. Continental  Marketing,  Inc., a California  corporation  ("USCM"), 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 USCM 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, USCM shall have  responsibility for loading trucks
with  Hansen  beverage  products  scheduled  for  delivery.  USCM  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.  USCM will provide all  personnel  and  equipment  necessary to meet its
obligations hereunder.

     b. USCM 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 USCM is not responsible for filling any beverage products in cans,  bottles
or other containers.
<PAGE>

     c. USCM 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  USCM in accordance  with the terms set forth in
Schedule "3" hereto for services rendered by USCM. Prices may increase, but such
increases shall be limited to actual increases in direct costs incurred by USCM.
USCM shall provide reasonable support for any such increases to Hansen.

     b. After six (6) months from the inception of this Agreement, USCM 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.

     3. Facility Lease and Related Expense.

     a. Hansen will lease such  industrial  facilities as are necessary for USCM
to discharge its services in accordance  herewith.  The parties contemplate that
Hansen will lease a facility  consisting of  approximately  113,600  square feet
with a street address of 1010 Railroad  Street,  Corona,  California  92882 (the
"Facility").  Hansen will be  responsible  for and pay the rent for the Facility
("the Hansen Lease").

     b. The parties hereto  understand  that USCM will be leasing  approximately
26,600 square foot of space adjoining the Facility (the "USCM Premises"),  which
space shall be in the same  building as the Facility.  USCM will be  responsible
for and pay the rent for the USCM Premises (the "USCM Lease").

     c. The parties hereto  acknowledge  Hansen's expansion rights into the USCM
Premises  as set forth in  Paragraph  46 of the  Hansen  Lease  (the  "Expansion
Rights").  Hansen agrees to provide USCM with a copy of the notice  delivered to
the landlord in  accordance  with said  Paragraph  46. Hansen agrees that in the
event that it exercises the Expansion Rights,  Hansen shall make payment to USCM
(the  "Relocation  Payment")  in the  amount  of (i)  $____  less (ii) (A) $____
multiplied by (B) the number of completed  months after the  commencement of the
Term of this Agreement (as set forth in Section 7(a) hereof) through the date on
which Hansen has the right to occupy the USCM Premises.  In accordance  with the
preceding  sentence,  no Relocation Payment shall be due to USCM once forty (40)
months have been completed under this Agreement.  A completed month for purposes
hereof shall be concluded on each monthly  anniversary of this Agreement  (e.g.,
if the  Term of this  Agreement  commences  on the  fifth  day of the  month,  a
completed month shall occur effective on the fifth day of each subsequent  month
during the Term of this Agreement and so forth).

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<PAGE>

     d.  Except  as  otherwise  provided  in  this  Section  3.e,  all  expenses
associated  with the lease and  occupation of the Facility,  including,  but not
limited  to,  utilities,  insurance,  repairs and  maintenance,  will be paid by
Hansen.  USCM will be responsible  for cleaning of and expenses for the Facility
and repairs necessitated by damage caused by USCM employees,  agents or invitees
to the Facility and for  providing  all  necessary  equipment  and for insurance
relating to its equipment, employees and operations. It is specifically recorded
that the electrical  costs of operating any equipment for the activities of USCM
shall be borne and paid for in full by USCM.  Among the expense for which Hansen
will be responsible are the following:

i.      Alarm service;
ii.     Insurance over Hansen inventory, but not relating to the operations of
        USCM in the Facility.

     e. Hansen shall permit USCM to have  exclusive  use of the Facility for the
purpose of  providing  services to Hansen in  accordance  herewith,  except that
approximately  12,000 square feet of space will be set aside as office space for
Hansen personnel.

     4.  Obligations of USCM.  USCM shall be liable to Hansen on an annual basis
for any damage to or loss of Hansen  products in excess of $____  while in the
possession  and control of USCM prior to  delivery of such  products to carriers
(from and after  which,  USCM'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 USCM) or agents of Hansen are
responsible  for any such damage or loss. USCM shall also be responsible for any
other loss  suffered by Hansen as a result of USCM'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 USCM)
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, USCM 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  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
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.

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<PAGE>

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

     a. Binding  Agreement.  This Agreement has been duly executed and delivered
by  USCM  and  constitutes  a valid  and  legally  binding  agreement  of  USCM,
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 USCM
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 USCM (or any affiliate thereof) is a party.

     6. Mutual Indemnification.

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

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

     7. Term; Termination Rights.

     a. The term of this Agreement  shall commence on the  commencement  date of
the Hansen Lease and continue  through July 31, 2002 (the "Term").  The existing
agreement between the parties,  as of the date hereof,  shall continue in effect
until  commencement of the Term,  after which said agreement shall be superseded
and  replaced in its  entirety by the terms of this  Agreement.  This  Agreement
shall be renewed annually after the Term (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  this 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 event  that USCM  fails to  satisfy  in
material  respects its duties or  obligations  hereunder  with respect to Hansen
beverage  products  on more than  ____% of the bills of lading  executed  in any
calendar month (a "Default" hereunder);  provided,  however, that USCM 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  within
thirty (30) days of USCM's receipt of such notice, except that in no event shall
Hansen be required to provide an  opportunity  to cure with respect to more than
one (1) Default in any consecutive twelve-month period.

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<PAGE>

     c.  Notwithstanding  Section 7(a), this Agreement may be terminated by USCM
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 USCM 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  obligation,  to purchase  and/or
assume  the lease of all (but not less than all)  equipment  used by USCM at the
Facility for the purposes of repacking  and handling of Hansen  product.  In the
event that USCM 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 USCM for any claim of the lessor
of such equipment.

     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 by hand delivery, shall be deemed to
have been given or made on the day on which it was given,  and if mailed,  shall
be deemed to have been given or made on 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:

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<PAGE>

             (a)      If to Hansen:             Mr. Hilton H. Schlosberg
                                                Vice Chairman
                                                Hansen Beverage Company
                                                1010 Railroad St.
                                                Corona, CA  91720

                      with a copy to:           Mr. Tom Kelly
                                                Hansen Beverage Company
                                                1010 Railroad St.
                                                Corona, CA 91720

             (b)      If to USCM:               Mr. David Williams
                                                President
                                                U.S. Continental Marketing, Inc.
                                                1010 Railroad St.
                                                Corona, CA 91720

                      with a copy to:           Daniel S. Latter
                                                15760 Ventura Boulevard
                                                Suite 1010
                                                Encino, CA  91436

     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.

     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.

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<PAGE>

     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.  Attorneys' 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
attorneys'  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 costs) 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.

     17. No Assignment. USCM 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
USCM may assign its duties and rights  hereunder to a wholly owned subsidiary of
USCM.

     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.

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     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 USCM of this binding  Agreement.
USCM looks forward to a long mutually beneficial relationship with Hansen.

                                               Very truly yours,

                                               U.S. CONTINENTAL MARKETING, INC.,
                                               a California corporation




                                               By:  /s/ DAVID WILLIAMS
                                                  ____________________________
                                                    David Williams, President



ACCEPTED AND AGREED TO THIS
31st DAY OF AUGUST, 2000

HANSEN BEVERAGE COMPANY




By:  /s/ RODNEY SACKS
   ________________________________
   Rodney Sacks, Chairman



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