EXHIBIT 10.10
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
1996 GRAPE, JUICE AND WINE PURCHASE AGREEMENT
DELICATO VINEYARDS & XXXXXXXX WINE ESTATES COMPANY
THIS AGREEMENT is between DELICATO VINEYARDS, a California Corporation,
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(hereinafter referred to as "DELICATO"), and XXXXXXXX WINE ESTATES COMPANY, a
Delaware Corporation, (hereinafter referred to as "BERINGER"). DELICATO and
BERINGER are entities duly organized, validly existing, and in good standing
under the laws of the State of California, with the authority to carry on and do
business as hereinafter described. SAN XXXXXXX VINEYARDS is a wholly owned
subsidiary of DELICATO VINEYARDS representing vineyards located near King City,
Monterey County, and is hereinafter referred to as "VINEYARDS".
PURPOSE This Agreement shall provide a written confirmation of DELICATO's
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obligation to provide for BERINGER, and XXXXXXXX'x obligation to purchase from
DELICATO, grapes produced from VINEYARDS (hereinafter referred to as "GRAPES"),
and juice to be produced from grapes from VINEYARDS (hereinafter referred to as
"JUICE"), and wine to be produced from grapes from VINEYARDS (hereinafter
referred to as "WINE") in the quantity and manner described herein. Specific
schedules for quantities, pricing, vineyard identification, and production
standards are incorporated into this Agreement by way of attached Exhibits as
follows:
EXHIBIT "A": BERINGER Schedule Of GRAPES, JUICE and WINE Quantities
And Price Per Unit
EXHIBIT "B": XXXXXXXX Vineyard Block Assignment
EXHIBIT "C": XXXXXXXX Grapes, Juice and Wine Standards
TERM The term of this Agreement shall be for the period commencing with the date
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of this executed Agreement through the 2010 harvest.
PRICES The respective GRAPES prices are specified in EXHIBIT "A" and apply to
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GRAPES on an F.O.B. roadside basis. The respective JUICE prices are specified in
EXHIBIT "A" and apply to JUICE on an F.O.B. Cypress Ridge Winery, King City,
basis. The respective WINE prices are specified in EXHIBIT "A" and apply to WINE
on an F.O.B. DELICATO, Manteca, basis.
PAYMENT Payment for GRAPES shall be made according to the shipments of GRAPES to
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BERINGER as determined by Weigh Tags from certified scales by public weigh
master from where such GRAPES are received. Payment for JUICE and WINE shall be
made according to the shipments of JUICE and WINE to XXXXXXXX as determined by
Weigh Tags from certified scales by public weigh master from where such JUICE or
WINE is shipped. For each harvest, a partial payment of one-third (1/3) of total
amount due to DELICATO from BERINGER shall be made on November 1st of the year
of harvest, a partial payment of one-third (1/3) of total amount due to DELICATO
from BERINGER shall be made on December 1st of the year of harvest, and a final
payment for the balance of the total amount due to DELICATO from BERINGER shall
be made on January 15th of the year following harvest.
In the event that BERINGER fails to pay any amounts for GRAPES, JUICE or
WINE provided for BERINGER according to the terms of this Agreement within
fifteen (15) days of the scheduled due date, DELICATO shall have the right to
withhold any future deliveries of GRAPES, JUICE and WINE during this period of
delinquency, in addition to any other remedies provided for by law or in this
Agreement. In addition to withholding deliveries, DELICATO may elect to collect
a Late Payment equal to the lesser of one and one-half percent (1.5%) per month
or the maximum allowable by law, on the outstanding balance owed for the period
of delinquency.
1
12/15/96
Initials:
BERINGER DELICATO
______________ ________________
1996 Grape, Juice and Wine Purchase Agreement
revision of 12/15/96
Page 2
WARRANTY OF PLANTING AND VINEYARD MODIFICATION GRAPES or grapes that are
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utilized in the production of JUICE or WINE sold to BERINGER shall exclusively
originate from VINEYARDS located in Monterey County, California. DELICATO
represents that the vineyard block designations described in EXHIBIT "B" shall
be planted in 1997 and 1998 to the varieties of grapes on the approximate
acreage as indicated in EXHIBIT "B". DELICATO additionally warrants that
VINEYARDS shall be cultivated in accordance with good and prevailing vineyard
practices. DELICATO reserves the right to replant, remove, or graft vines in the
event that they become uneconomic to farm as a result of disease. In the event
that any such modification affects the supply commitment subject this Agreement,
DELICATO shall endeavor to substitute other suitable grapes from the vineyard
that are both acceptable to BERINGER and not committed to prior sale.
WARRANTY OF EXCLUSIVE SALE/TITLE & ENCUMBRANCES DELICATO represents that it has
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not sold or contracted to sell to anyone else GRAPES or the grapes that are
utilized in the production of JUICE and WINE herein sold to BERINGER, and that
said GRAPES, JUICE and WINE are now and will be kept free of any and all liens
and encumbrances except as may be secured for crop financing and/or working
capital with VINEYARDS' and DELICATO's lender.
Acceptance of GRAPES, JUICE and WINE by BERINGER shall occur upon the earlier of
1) shipment of GRAPES, JUICE or WINE from the respective F.O.B. point, 2)
approval by XXXXXXXX of samples of GRAPES, JUICE or WINE, or 3) payment by
XXXXXXXX for GRAPES, JUICE or WINE. It is expressly agreed that upon acceptance
of GRAPES, JUICE or WINE by XXXXXXXX, title to said GRAPES, JUICE or WINE shall
immediately vest in XXXXXXXX. XXXXXXXX hereby grants to DELICATO a security
interest in the GRAPES, JUICE and WINE in order to secure XXXXXXXX'x obligations
hereunder. DELICATO will retain such security interest and any applicable
statutory lien in any such GRAPES, JUICE and W1NE until any amounts owed to
DELICATO by BERINGER hereunder are paid in full. DELICATO may, at its
discretion, file a UCC-1 Financing Statement and Security Agreement to provide
notice of its continuing security interest in all GRAPES, JUICE or WINE until
all payments are received. BERINGER agrees to cooperate in completing any
documentation in support of such retained interest.
DELICATO agrees to execute and deliver a Xxxx of Sale for the GRAPES, JUICE or
WINE herein sold to BERINGER. BERINGER will file the fully executed Xxxx Of Sale
with the San Xxxxxxx County Recorder. Upon full payment of any amounts owed to
DELICATO by BERINGER hereunder, DELICATO hereby grants BERINGER a security
interest in the GRAPES, JUICE or WINE stored on DELICATO's premises in order to
secure XXXXXXXX'x interest therein. DELICATO agrees to execute and deliver to
BERINGER a UCC-1 Financing Statement and Security Agreement, provided by
BERINGER, so that BERINGER can provide notice of its continuing security
interest in all wine until it is shipped from DELICATO's premises.
INSURANCE, TAXES AND OTHER ASSESSMENTS As applicable to JUICE or WINE during the
-------------------------------------
term of this Agreement, BERINGER shall maintain in full force and effect, normal
property insurance in the amounts at least sufficient to protect the interests
of both DELICATO and BERINGER in the JUICE or WINE. BERINGER shall provide a
certificate of insurance to DELICATO to show evidence of such coverage. Any such
policy or policies of insurance shall include waiver of subrogation clauses as
to any insured loss arising while the JUICE or WINE is in the possession or
under the control of DELICATO except for losses arising solely from DELICATO's
negligence or willful misconduct.
As applicable to GRAPES, JUICE and WINE, BERINGER is to pay all taxes and
assessments applicable to its owned property, including "California Vintner
fees".
Initials:
BERINGER DELICATO
______________ ________________
1996 Grape, Juice and Wine Purchase Agreement
revision of 12/15/96
Page 3
PICKING & DELIVERY DELICATO shall provide BERINGER notification whereby DELICATO
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believes the GRAPES or grapes that are utilized in the production of JUICE or
WINE are expected to be within the maturity ranges specified in EXHIBIT "C".
Mechanical harvesting of grapes shall be specifically permitted.
DELICATO shall endeavor to provide a minimum of 48 hours prior notice to
BERINGER so that BERINGER may elect to inspect harvesting equipment for
cleanliness and to enter VINEYARDS for purposes of ensuring the correctness of
the varietal status of the grapes duly harvested.
Not withstanding the foregoing, BERINGER may request Pinot Noir GRAPES
sold herein to be hand harvested into BERINGER furnished 1,000 pound bins.
DELICATO will review the resulting harvest labor requirements and will try to
facilitate XXXXXXXX'x request. If hand harvesting of all or any of Pinot Noir
GRAPES is deemed unfeasible in DELICATO's sole discretion, DELICATO shall not be
required to hand harvest Pinot Noir GRAPES. BERINGER agrees to reimburse
DELICATO for all tons hand harvested by an amount equal to (i) the then-current
going rate for hand picking less (ii) the then-current going rate for mechanical
harvesting.
WARRANTY OF GRAPE STANDARDS DELICATO warrants that all grapes delivered under
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this Agreement for the production of JUICE or WINE shall at point of delivery be
sound, mature grapes of the variety and appellation represented, free from
commercial defects, in good merchantable condition, and are grapes suitable for
crushing into JUICE or WINE, at the state of maturity BERINGER specifies
hereunder, fully comply with all applicable Federal and State laws and
regulations, and at the time and at the point of delivery are not adulterated or
misbranded under the meaning of the Federal Food, Drug, and Cosmetic Act, or
regulations issued thereunder, and not an article which may not, under the
provisions of Section 404 or Section 505 of the Act, be introduced into
interstate commerce; and that there are not, in or on said grapes, pesticide
residues prohibited by, or in excess of tolerances established by the
Environmental Protection Agency or the Federal Food, Drug, and Cosmetic Act, or
regulations issued thereunder.
DELICATO further warrants that all GRAPES or grapes that are utilized in
the production of JUICE or WINE hereunder shall not have been treated with any
pesticide, the application of which does not conform to all local, state and
federal laws and regulations. The dosage and time of application of pesticides,
herbicides, nematicides, and other chemical applications must have been
controlled and recorded according to recommendations of the California
Department of Agriculture so that the residues are within tolerances for grapes
by law.
DELICATO shall become knowledgeable of the requirements of California
Proposition 65 (Safe Drinking Water and Toxic Enforcement Act of 1986),
including the continually updated list of chemicals and substances which pose a
significant risk of cancer or reproductive toxicity via ground water, food,
environment, occupational or other contamination.
No chemical listed pursuant to California Health and Safety 25249.8, as
such chemical may appear at Title 22, California Code of regulations, Section
12.000, as amended ("Proposition 65") shall be applied to any GRAPES or grapes
that are utilized in the production of JUICE or WINE without XXXXXXXX'x prior
written approval; any such approved application shall be made only for the
purpose for which BERINGER has given its prior written approval. Approval shall
require a written recommendation by a certified Pest Control Advisor. DELICATO
further guarantees and warrants that any GRAPES or grapes that are utilized in
the production of JUICE or WINE for which no request for application of
Proposition 65 chemicals is made or for which BERINGER does not approve such
application shall be free from such chemicals. BERINGER reserves the right not
to accept any GRAPES or grapes that are utilized in the production of JUICE or
WINE which do not conform to this provision and/or collect direct and
consequential damages.
Further, DELICATO agrees to make no chemical applications of any kind to
any GRAPES or grapes that are utilized in the production of JUICE or WINE
delivered hereunder
Initials:
BERINGER DELICATO
______________ ________________
1996 Grape, Juice and Wine Purchase Agreement
revision of 12/15/96
Page 4
from August 1st or veraison, whichever comes first, through harvest, without the
prior written approval of BERINGER. XXXXXXXX shall maintain complete and
accurate written records with respect to every pesticide application and shall
furnish the same to BERINGER prior to September 15th of each harvest year. As
used herein, "pesticide" includes, without limitation, all herbicides,
fungicides (including sulfur and sulfur-based compounds), insecticides and
miticides.
INSPECTION As it applies to GRAPES or grapes that are utilized in the production
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of JUICE or WINE, inspection shall be made at the point of grape delivery for
crushing. All grading and inspection shall be by the Director of the State of
California, Department of Food and Agriculture or County Agriculture
Commissioner, one of its deputies or inspectors, or other approved methods by
parties acceptable to DELICATO and BERINGER. XXXXXXXX and BERINGER agree to
accept and be bound by the methods of such parties in the sampling, testing, and
grading for establishing sugar content (/0/Brix) to the nearest tenth of a
degree, the presence of material other than grapes (M.O.G.), Volatile Acid and
Ethyl Alcohol.
During the term of this Agreement, XXXXXXXX'x representatives shall have
the right to enter VINEYARD or processing facilities during normal business
hours upon notification of their arrival, for the purpose of inspecting,
testing, or observing the harvest and delivery of any such contracted grapes or
resulting juice or wine.
REJECTIONS DELICATO agrees that BERINGER shall have the right to reject any and
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all GRAPES, JUICE or WINE delivered or tendered which do not fully comply with
the standards set forth in this Agreement for said products by giving notice
verbally or in writing of any such rejection to DELICATO, provided, however,
that the rejection of any partial delivery or deliveries shall not relieve
either DELICATO or BERINGER from their obligation to deliver and receive the
balance of products purchased hereunder and to this extent this Agreement is
severable; provided further, that failure of BERINGER to reject any products
hereunder shall not constitute a waiver on its part and does not waive any part
of the DELICATO's warranties.
All GRAPES or grapes that are utilized in the production of JUICE or
WINE delivered hereunder shall be delivered in containers containing only one
(1) grape variety. Any containers containing more than one (1) variety shall be
rejected by BERINGER. Grapes of the same varieties but from different lots shall
also be delivered in separate containers. Any container containing more than one
(1) lot will be rejected by BERINGER.
BERINGER shall make its best faith effort to contact DELICATO as soon as
possible regarding any intended rejection in order to allow DELICATO an
opportunity to minimize any additional expenses in re-marketing or disposing of
such rejected delivery of product. In the event that rejection of GRAPES, JUICE
or WINE results from the actions of any third party, such as a contract hauler,
both parties shall cooperate to process and expedite the claim for damages with
that outside party.
MISCELLANEOUS
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In the event either party is unable to carry on its normal operations or
is compelled to reduce or suspend its operations because of forces beyond its
immediate reasonable control including, but not limited to, laws, court orders,
labor disputes, fire, war, weather, or acts of God, but excluding the financial
impairment or insolvency of either party, the party so affected shall, while so
affected, be relieved to that extent from performing its obligation hereunder.
In such event such party shall take all reasonable measures to remove the
disability and resume full performance hereunder at the earliest possible date.
This Agreement shall be governed by the laws of the State of California
including as to matters of validity, construction and performance. If there is a
dispute between the parties, both parties agree to meet in a good faith effort
to resolve the dispute. If there is no resolution, the parties will choose a
method of binding arbitration. If the method of arbitration cannot be agreed
Initials:
BERINGER DELICATO
______________ ________________
1996 Grape, Juice and Wine Purchase Agreement
revision of 12/15/96
Page 5
upon in one week, then it will proceed according to the California Code of Civil
Procedure regarding arbitration.
This Agreement shall be deemed modified to the extent necessary to
comply with applicable valid State and Federal laws, rules or regulations
pursuant thereto and any applicable valid marketing order or agreement under
authority of State or Federal law.
This Agreement does not constitute either party as the agent, partner,
joint-venturer or legal representative of the other for any purpose whatsoever.
Neither party is granted an express or implied right or authority by the other
party to assume or create any obligation or responsibility on behalf of or in
the name of the other party.
No failure or omission by either party to insist upon or enforce any of
the terms hereof shall be deemed a waiver of such terms unless the same shall be
in writing and signed by the waiving party. Waiver of a term or default at any
time shall not be deemed a waiver of any other term or default, or of the same
term or default at another time.
Time is of the essence of this Agreement and each and every provision
thereof.
The titles contained in article headings of this Agreement are merely
for convenience and are not intended to give notice of all of the matter in the
articles following such titles. Said titles do not constitute any part of this
Agreement and are not to be considered in its interpretation.
If any part or parts of this Agreement are found to be illegal or
unenforceable, the remainder shall be considered severable, shall remain in full
force and effect, and shall be enforceable.
At the request of either party, the parties shall, execute, acknowledge,
and record a memorandum of this Agreement.
Neither party shall make public this Agreement or any announcements
related to this Agreement or the operations performed under this Agreement
without the written consent of the other party, except to the extent such
information is disclosed: (1) to any governmental or regulatory authority in the
course of its duties, (2) pursuant to subpoena or other legal process, (3) to
either party's lender or lenders, or (4) to a third party, in connection with
the sale of goods or products to such party, provided, however, such permitted
disclosure shall be limited to source information and, provided further, that
the financial details of this Agreement may not be disclosed to such party.
No renewal of this Agreement or modification or waiver of any of its
provisions, or any future representations, promises, conditions in connection
with its subject matter, shall be binding upon the parties unless made in
writing and signed on each of the parties behalf by its authorized officer.
This Agreement is binding upon the successors and assigns of the
parties; provided however this Agreement and the rights hereunder cannot be
assigned, in whole or in part, without the prior written consent of the parties.
Such consent shall not be unreasonably withheld. In the case of an assignment by
BERINGER, XXXXXXXX'x failure to consent will not be deemed unreasonable if
DELICATO reasonably believes that the assignee will be unable to perform its
obligations under this Agreement. Either party may assign any rights to payment
which may accrue to it hereunder to any third party, including a bank or
financial institution.
All notices shall be in writing, unless otherwise specifically provided
herein, and shall be deemed to have been given if delivered by hand or mailed by
registered or certified mail, postage prepaid, addressed as follows:
DELICATO: BERINGER:
Xx. Xxxxxxx Xxxxxxxxxx Xxxxxx X. Xxxxxxxxxx and/or
DELICATO VINEYARDS Xxxxxx Xxxxxxxxxxx
00000 X. Xxx 00, Xxxxxxxx Xxxx Xxxxxxx Co.
Xxxxxxx, Xx. 00000 X.X. Xxx 000
Xx. Xxxxxx, XX 00000
(Fed. Express: 0000 Xxxxx Xxx.)
Initials:
BERINGER DELICATO
______________ ________________
1996 Grape, Juice and Wine Purchase Agreement
revision of 12/15/96
Page 6
Phone: (000)000-0000 Phone: (000)000-0000
FAX: (000) 000-0000 FAX: (000) 000-0000
ENTIRE AGREEMENT: This 1996 Grape, Juice and Wine Purchase Agreement contains
----------------
the entire agreement between the parties concerning the subject matter herein
and there are no understandings or agreements which are not set forth herein.
All EXHIBITS to this Agreement are hereby incorporated by this reference as if
set out in full.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
31st day of December, 1996.
DELICATO VINEYARDS XXXXXXXX WINE ESTATES COMPANY
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
______________________________ ______________________________
XXXXXXX XXXXXXXXXX
Its: President Its: Sr. Vice President - Vineyard
Operations
This Agreement is not valid unless signed or countersigned by a BERINGER and
XXXXXXXX officer or duly authorized agent of BERINGER and DELICATO, with all
such signatures being executed within 30 days of the date shown above.
Initials:
BERINGER DELICATO
______________ ________________
EXHIBIT "A"
1996 GRAPE, JUICE AND WINE PURCHASE AGREEMENT
BERINGER SCHEDULE OF GRAPES, JUICE AND WINE
QUANTITIES AND PRICE PER UNIT
For each harvest during the term of this Agreement, DELICATO is obligated to
provide for BERINGER, and BERINGER is obligated to purchase from DELICATO,
1) Pinot Noir GRAPES in the quantities stated below; and,
2) Chardornnay JUICE in the quantities stated below; and,
3) Chenin Blanc WINE in the quantities stated below; and,
4) Cabernet Sauvignon WINE in the quantities stated below;
5) Cabernet Franc WINE in the quantities stated below; and,
6) Merlot WINE in the quantities stated below.
The following quantities apply to each harvest for the entire duration of this
Agreement:
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1997 Acres Planted
1998 Acres Planted ***
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Harvest
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1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
The quantities shown above reflect an estimate of VINEYARDS grape production
levels expected from the specific Block assignments and allocations described in
Exhibit "B". The final GRAPE quantities to be delivered by DELICATO to BERINGER
under this Agreement for each year shall be the actual grapes produced for each
of the respective Block assignments and allocations described in Exhibit "B".
The final JUICE or WINE quantities to be delivered by DELICATO to BERINGER under
this Agreement for each year shall be calculated by multiplying the actual
grapes produced for each of the respective Block assignments and allocations
described in Exhibit "B", by a yield factor of 170 gallons per ton of grapes.
EXHIBIT "A"
***[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
1
Initials:
BERINGER DELICATO
______________ ________________
DELICATO shall promptly notify BERINGER of any change in the physical condition
of the Block assignments and allocations contained herein, or any projected
production shortfall, which might reasonably be expected to result in a change
of the estimated quantities shown above.
Not withstanding the foregoing, the maximum GRAPE, JUICE or WINE quantities to
be delivered by DELICATO to BERINGER under this Agreement for each year, and for
each variety, respectively, shall not exceed 105% of the quantities shown above.
For GRAPES delivered under this Agreement, F.O.B. roadside, and JUICE delivered
under this Agreement, F.O.B. Cypress Ridge Winery, King City, and for WINE
delivered under this Agreement, F.O.B. Delicato, Manteca, the following pricing
shall apply.
Harvest Year *** Harvest Year ***
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1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
Harvest Year Harvest Year
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1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
EXHIBIT "A"
***[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
2
BERINGER DELICATO
______________ ________________
Harvest Year *** Harvest Year ***
------------ ------------
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
In addition to the above Chenin Blanc Wine Price, BERINGER shall reimburse
DELICATO for the cost to ship juice from GRAPES crushed at Cypress Ridge Winery
to DELICATO's Manteca facility.
EXHIBIT "A"
***[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
3
BERINGER DELICATO
______________ ________________
EXHIBIT "B"
1996 GRAPE, JUICE AND WINE PURCHASE AGREEMENT
XXXXXXXX VINEYARD BLOCK ASSIGNMENT
The following Block assignments and allocations shall be amended after the
vineyard has been planted.
***
EXHIBIT "B"
***[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
1
BERINGER DELICATO
______________ ________________
[2 PAGES OF MAPS SHOWING ALLOCATION OF VINEYARD ACREAGE]
EXHIBIT "C"
1996 GRAPE, JUICE AND WINE PURCHASE AGREEMENT
XXXXXXXX GRAPES, JUICE AND WINE STANDARDS
For all GRAPES, JUICE or WINE herein delivered by DELICATO to XXXXXXXX, the
following standards shall apply.
I.
GRAPES or grapes to be utilized in the production of JUICE or WINE for
BERINGER shall be harvested upon 48 hours advanced notice by VINEYARDS,
subject to reasonable harvesting, delivery and crushing availability by
DELICATO. Sugar content ranges are as indicated below. DELICATO shall sample
grapes no less than once every 10 days or at the request of BERINGER and
provide such fresh samples to either BERINGER or DELICATO for Brix and pH
analysis. Based on those results, BERINGER may advise DELICATO as to the time
of harvest. Grapes shall be deemed suitable for crushing for JUICE or WINE
only if at the time and place of delivery not less than 97.0% of the grapes
are free from defects and MOG combined as herein defined, and only if foreign
material as herein defined does not exceed 1.0% and Rot and/or Mold does not
exceed 2.0% by weight in each load or lot of grapes, and said grapes meet
such other standards as are provided for in this Agreement, in accordance
with normal wine industry standards then in effect.
BERINGER and XXXXXXXX recognize that year to year variations in growing and
harvest conditions may result in slight variations of the GRAPES or grapes
used to produce JUICE or WINE in any given year, and both parties pledge to
cooperate in applying regional standards by competent farmers practicing good
husbandry in determining the GRAPE suitability, and reasonable industry
standards in determining JUICE or WINE suitability.
"Defect" is defined as decomposition or decay of the xxxxx induced by
fungi or bacteria involving shrinkage or change in xxxxx form, and sometimes
accompanied by open breaks in the skin not caused by mechanical means.
"Foreign Material Other Than Grapes" is defined as leaves, leaf stems,
canes, and any other materials foreign to grapes which may be in a load or
lot of grapes.
II.
Varietal verification shall be strictly tracked from origin to the point of
departure from DELICATO, King City, or DELICATO, Manteca. Such documentation
includes, but is not limited to, weight tags of each load representing such
load's vineyard name, block number, grape variety, date of delivery, location
of the vineyard, vehicle license number, point of receipt for crushing,
applicable cellar records, sufficient reference by map to identify the
vineyard and a statement or affidavit by DELICATO's representative certifying
the variety.
These documents and records necessary to prove that the GRAPES, JUICE or WINE
delivered to XXXXXXXX was produced from the variety or vineyard specified
will be accurately maintained and available to XXXXXXXX or applicable
regulatory inspectors for a period of three years after each shipment. These
records and documents will be available for inspection at DELICATO's Manteca
offices. Each transfer document showing movement of GRAPES, JUICE or WINE
from DELICATO to XXXXXXXX will fully and accurately represent the correct
variety, vineyard, gallonage or other information pertinent to the lot
shipped.
For all JUICE herein delivered by DELICATO to XXXXXXXX, the following standards
shall apply.
a) JUICE processing shall employ the use of "tank press" type pressing only.
b) The maximum temperature of JUICE shall be 40/o/ F at time of shipment.
c) JUICE shall have a maximum spin-solids content of 2 percent at time of
shipment.
"EXHIBIT "C"
1
XXXXXXXX DELICATO
______________ ________________
d) DELICATO shall add to the sulfur dioxide levels of JUICE at the discretion
of XXXXXXXX.
e) XXXXXXXX shall take delivery of JUICE within 48 hours of DELICATO's
notification of availability for shipment.
f) DELICATO and XXXXXXXX agree to address additional reasonable industry
juicing standards as directed by XXXXXXXX.
For all WINE herein delivered by DELICATO to XXXXXXXX, the following standards
shall apply.
a) All WINE from white grape varieties, shall be processed to a heat and co1d
stable state of processing within the meaning of reasonable industry
standards.
b) All WINE from red grape varieties shall not include cold stabilization or
bentonite treatments, but shall include the option of one powder
filtration, at no additional charge, at XXXXXXXX'x option. Fermentation of
red grape varieties shall take place in increments of not more than 100
tons, and DELICATO shall endeavor to ferment in increments as small as it
has cooperage available. Upon mutual consent, the method and duration of
pumping over wine during red fermentation shall be determined by XXXXXXXX.
c) XXXXXXXX shall provide its own standard yeast strain, xxxx-xxxxx strain and
bentonite if desired by XXXXXXXX. Should XXXXXXXX prefer to provide one or
more of these additives in place or in addition to DELICATO's standard
additives, DELICATO shall apply them without any addition or reduction of
charge to DELICATO or XXXXXXXX.
d) XXXXXXXX shall provide storage of WINE extending through July 31st of the
year following the respective year of harvest.
e) DELICATO and XXXXXXXX agree to address additional reasonable industry wine-
making standards as directed by XXXXXXXX.
The following sugar content standards for GRAPES or grapes used in the
production of JUICE or WINE shall apply. Measurement of such sugar content shall
be made on a load by load basis at the point of grape delivery for crushing as
provided for in this Agreement. XXXXXXXX shall not be obligated to purchase
GRAPES, or JUICE or WINE produced from grapes, with a sugar content below the
Minimum Brix Level or above the Maximum Brix Level shown below.
Minimum Target Maximum
Variety Brix Level Brix Level Brix Level
-------------------- ---------- ---------- ----------
Pinot Noir 22.00/o/ 23.50/o/ 26.00/o/
Chardonnay 22.00/o/ 23.50/o/ 26.00/o/
Chenin Blanc 20.00/o/ 22.00/o/ 24.00/o/
Cabernet Sauvignon 22.00/o/ 23.50/o/ 26.00/o/
Cabernet Franc 22.00/o/ 23.50/o/ 26.00/o/
Merlot 22.00/o/ 23.50/o/ 26.00/o/
EXHIBIT "C"
2
XXXXXXXX DELICATO
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