EX-10.16 3 cmw938c.htm TOLL PROCESSING AGREEMENT TOLL PROCESSING AGREEMENT BY AND BETWEEN NORTHLAND CRANBERRIES, INC. and OCEAN SPRAY CRANBERRIES, INC. September 23, 2004 Page
TOLL PROCESSING AGREEMENT
BY AND BETWEEN
NORTHLAND CRANBERRIES, INC.
and
OCEAN SPRAY CRANBERRIES, INC.
September 23, 2004
TABLE OF CONTENTS
Page | ||
---|---|---|
1. | APPOINTMENT; TERM OF AGREEMENT | 1 |
2. | PROCESSING SERVICES | 2 |
3. | GUARANTEED CONCENTRATE PRODUCED PER BARREL OF NORTHLAND DELIVERIES | 6 |
4. | DELIVERY FORECASTS; DELIVERIES | 7 |
5. | SHIPMENT FORECASTS; SHIPMENT ORDERS; PURCHASE OF NON-COMMITTED CONCENTRATE | 9 |
6. | INGREDIENTS AND PACKAGING MATERIAL | 12 |
7. | OWNERSHIP | 13 |
8. | QUALITY CONTROL | 14 |
9. | CODES AND PALLETS | 15 |
10. | SPECIFICATIONS | 15 |
11. | INSURANCE | 16 |
12. | FEES | 17 |
13. | RECORDS AND REPORTS | 18 |
14. | CONFIDENTIAL INFORMATION | 18 |
15. | LABELING AND DISCLAIMER OF INTEREST IN NORTHLAND TRADEMARKS | 19 |
16. | LIENS AND SECURITY INTERESTS | 20 |
17. | WARRANTIES | 20 |
18. | INDEMNIFICATION | 21 |
19. | TERMINATION AND RETURN OF PROPERTY | 23 |
20. | OTHER OBLIGATIONS | 24 |
21. | DEFINITIONS | 25 |
22. | MISCELLANEOUS | 28 |
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EXHIBITS
Exhibit 1 | — | Pesticide Screening Services |
Exhibit 2 | — | Procedures and Standards--Northland Products |
Exhibit 3 | — | Specifications for Concentrate |
Exhibit 4 | — | Fee Schedule |
Exhibit 5 | — | Guarantee Schedule |
Exhibit 6 | — | Initial Representatives |
Exhibit 7 | — | Allowable Acreage |
Exhibit 8 | — | Eagle River Growers and Acreage |
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TOLL PROCESSING AGREEMENT
THIS TOLL PROCESSING AGREEMENT (the “Agreement”) is entered into as of the 23rd day of September, 2004, by and between NORTHLAND CRANBERRIES, INC., a Wisconsin corporation (“Northland”), and OCEAN SPRAY CRANBERRIES, INC., a Delaware corporation (“Ocean Spray”).
RECITALS
1. APPOINTMENT; TERM OF AGREEMENT
For purposes of this Section 1.B., a “Timely Declination Notice” shall mean and include any written notice by Ocean Spray to Northland of Ocean Spray’s intention not to exercise the Excess Products Option which is delivered by Ocean Spray to Northland: (a) in the year under this Agreement during which Ocean Spray receives from Northland a notice of a Change in Control, by the later of: (i) April 1 of the relevant year; or (ii) 30 days following Ocean Spray’s receipt of Northland’s Change in Control notice; (b) in any year under this Agreement subsequent to the Year in which Ocean Spray receives a Change in Control notice from Northland, by April 1 of such year; and (c) in any year in which Northland delivers to Ocean Spray an update to the schedule of Allowable Acreage as required by Section 4.A., within fifteen (15) days of Ocean Spray’s receipt of such schedule update, in which case the Excess Products Option shall apply only to the acres listed on such schedule update.
For purposes of this Section 1.B. of this Agreement, an “Untimely Declination Notice” shall mean any notice by Ocean Spray of its decision not to exercise its Excess Products Option which is not a Timely Declination Notice.
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A. Ocean Spray’s Obligations. Subject to the provision of the Transitional Services by Northland during the Lease Term as set forth in Section 2.C. of this Agreement, Ocean Spray shall, during the Term, supply the following processing services (the “Services”) set forth in Section 2.A.1-5 with respect to the deliveries of Northland Products, including all labor, supplies, plant and equipment and the operation of the plant and equipment necessary to render the Services. Northland acknowledges that Ocean Spray may change its standards and procedures described on Exhibits 1, 2 and 3 from time to time, provided that material changes will require Northland’s prior consent, which consent will not be unreasonably withheld. Ocean Spray shall provide Northland with reasonable advance notice of all non-material changes.
1. Pesticide Screening Services. |
(i) Provide services in connection with the pesticide screening program for all Northland Products as described in Exhibit 1, subject to Northland’s obligations in Section 2.B. |
2. Receiving Services. |
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(i) Promptly receive, during the fruit receiving hours to be agreed upon by the parties, the Northland Products in quantities consistent with the forecasts provided by Northland to Ocean Spray and consistent with the schedule agreed to by the parties as provided in Sections 4.A. and B. |
(ii) Unload the deliveries of the Northland Products and reject any cranberries as provided in Section 4.C and Exhibit 2. |
(iii) Receive, clean and bin certain cranberries rejected as described in Section 4.C. |
(iv) Collect and analyze representative samples of Northland Products upon delivery according to the procedures and standards set forth on Exhibits 1 and 2 and retain samples and record and report the findings for each delivery according to the procedures and standards set forth in Exhibit 2 attached hereto. |
(v) Weigh and record the net weight results for each delivery. |
(vi) Clean and place the delivered Northland Products into bins for freezing, or, at Ocean Spray’s option, send the Northland Products directly for processing. |
(vii) Assign a Lot code to the Northland Products to allow specific identification and tracking of the Northland Products during storage and throughout processing into Concentrate. |
(viii) Provide all transportation necessary to ship the cleaned Northland Products to a freezer location, if necessary. |
3. Freezing and Storage Services for Northland Products. |
(i) Freeze (unless the Northland Products were directly processed into Concentrate), store and track the inventory of the Northland Products received (and not subject to a Final Rejection) by Ocean Spray. |
(ii) Provide all required freezer facilities for the Northland Products. |
(iii) Manage the storage and freezing process in accordance with the procedures set forth on Exhibit 3. |
(iv) Maintain the Northland Products after freezing in a frozen state as described on Exhibit 3. |
(v) Provide all transportation necessary to ship frozen Northland Products to the pressing and concentrating facility. |
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4. Pressing and Concentrating Services. |
(i) Provide all services necessary to convert the Northland Products (which are not subject to a Final Rejection) into Concentrate, including but not limited to grinding, pressing, filtering and evaporating. |
(ii) Process the Northland Products (which are not subject to a Final Rejection) in compliance with and produce Concentrate which meets the specifications set forth on Exhibit 3 attached hereto. |
(iii) Sample, analyze and retain samples of the Concentrate, and provide a certificate of analysis for each lot of Concentrate produced. |
(iv) Package the Concentrate into 50-gallon drums per the specifications in Exhibit 3 attached hereto. |
(v) Provide any transportation necessary to ship the packaged Concentrate to a freezer for storage. |
(vi) Dispose of all waste materials resulting from the receiving and cleaning of the Northland Products and the conversion of Northland Products into Concentrate hereunder in accordance with all Applicable Laws, including but not limited to debris, wastewater and pomace. |
5. Freezing and Storage Services for Concentrate. |
(i) Freeze and store the Concentrate in accordance with the procedures set forth on Exhibit 3. |
(ii) Provide pallets and palletize in accordance with Section 9.B. and load each Shipment on a carrier provided by Northland and according to instructions provided by Northland for each such Shipment. |
(iii) Provide a xxxx of lading and a manifest for each Shipment listing number of drums and drum seal numbers. |
(iv) All Shipments shall be as described in Section 5. |
B. Northland’s Obligations. During the Term, Northland shall, with respect to, marshes owned or leased by Northland and its Affiliates, and shall exercise its rights under its grower contracts as reasonably necessary to cause any third parties whose cranberries will be processed under the terms of this Agreement to (1) comply with all Applicable Laws and the pesticide screening program as described in Exhibit 1, (2) allow Ocean Spray and its Affiliates and any of its representatives, employees, or agents (i) access to the cranberry marshes and (ii) the ability to test the marshes and the cranberries, and (3) cooperate fully with Ocean Spray, its Affiliates, its representatives, employees or agents with respect to the pesticide screening services on Exhibit 1. Ocean Spray shall in writing (which may be by e-mail) notify Northland prior to inspecting or testing any marshes on the Allowable Acreage, and if Northland so requests within 3 business days of receiving notice, representatives of Northland shall accompany Ocean Spray on any such inspection or testing.
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C. Northland Transitional Services.
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Monthly Payment | Rate of Credit Per Paid Weight Barrel |
October | $1.00 |
November | $1.00 |
December | $.50 |
Notwithstanding anything to the contrary in this Agreement, Ocean Spray makes no representation or warranty concerning the condition of the Northland Products at any time prior to Northland’s completion of the Transitional Services with respect to such Northland Products, and Ocean Spray shall have no liability on account of the failure of such Northland Products to comply with Applicable Law or to be fit for human consumption as of that time.
3. GUARANTEED CONCENTRATE PRODUCED PER BARREL OF NORTHLAND DELIVERIES
Ocean Spray shall guarantee to return 1.66 gallons of 50 brix concentrate meeting the specifications set forth on Exhibit 3 for each Paid Weight Barrel of Northland Products delivered and processed into concentrate for Northland, provided the weighted average brix of such cranberries, as delivered (and which is not subject to a Final Rejection), is not less than 8.0, as further measured and calculated in accordance with Exhibit 2. If the weighted average brix of such cranberries is less than 8.0, Ocean Spray shall guarantee to return the gallons of 50 brix concentrate meeting the specifications set forth on Exhibit 3 for each Paid Weight Barrel of Northland Products delivered and processed into concentrate for Northland pursuant to a declining linear scale as illustrated in Exhibit 5.
4. DELIVERY FORECASTS; DELIVERIES
A. Delivery Estimate. Northland shall provide Ocean Spray on the Effective Date as Exhibit 7 and no later than January 15 of each calendar year of the Term a schedule itemizing the Allowable Acreage. Northland shall provide written notice to Ocean Spray within 10 business days after making any changes to the Allowable Acreage. Northland shall provide to Ocean Spray its good faith estimate, no later than September 1 of each year of the Term, of the expected volume of Northland Products for the upcoming crop year to be delivered to Ocean Spray by Northland. Prior to September 1 of each year of the Term, Northland and Ocean Spray shall use reasonable efforts to mutually agree on a fruit receiving schedule for each of Wisconsin and the West Coast, including tentative start and stop dates for the harvest and the hours for fruit receiving. At the Processing Plant and the Bandon Plant, Ocean Spray agrees that its fruit receiving station will be open to accept Northland Products for receiving on the same days as it is open for other Ocean Spray growers. Ocean Spray also agrees the receiving station at the Processing Plant will be open for hours during the harvest reasonably sufficient to allow Northland to deliver Northland Products daily in an amount not to exceed 5% of Northland’s preseason crop estimate to be delivered to the Processing Plant. Ocean Spray also agrees that the receiving station at the Bandon Plant will be open for hours during the harvest reasonably sufficient to allow Northland to deliver Northland Products daily in an amount not to exceed 5% of Northland’s preseason crop estimate to be delivered to the Bandon Plant.
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C. Deliveries of Cranberries/Rejection.
1. Excess Cranberries. Ocean Spray may choose not to receive any Northland Products which on a given calendar day are in excess of 5% of Northland’s preseason estimate to be delivered to the applicable receiving station. In the event Ocean Spray so chooses, Northland must deliver to Ocean Spray such excess Northland Products on the next day during the harvest. |
2. Rejection Generally. After following the procedure set forth in this Section 4.C., Ocean Spray may reject any Northland Products which (1) do not meet the specifications as set forth on Exhibits 1 and 2 related to excessive trash, bad fruit, foreign material and color, or (2) do not comply with Northland’s warranty in Section 4.D. For rejections based upon the foregoing, Ocean Spray must provide notice of Initial Rejection of the Northland Products within 30 days of the actual date of delivery to Ocean Spray, provided that any rejection based upon a breach of Northland’s warranty in Section 4.D. may be made at any time. OCEAN SPRAY’S FAILURE TO MAKE SUCH CLAIMS WITHIN THE SPECIFIED TIME PERIOD WILL RESULT IN AN UNCONDITIONAL WAIVER OF SUCH CLAIMS. In the absence of notifying Northland of the proper rejection of the Northland Products, Ocean Spray will be deemed to have accepted the Northland Products. |
3. Northland may have a representative on site when the Northland Products are being delivered for consultation with Ocean Spray regarding the quality of the cranberries. In the event Ocean Spray rejects the Northland Products because the color of the cranberries does not comply with the specifications on Exhibit 2, Ocean Spray shall receive, clean and bin the cranberries at the fee rate set forth on Exhibit 4, provided that, once cleaned and binned, Northland shall promptly at Ocean Spray’s request load and transfer the cranberries to a new location and Northland shall pay any applicable storage and transportation fees. In the event Ocean Spray rejects Northland Products due to pesticides (but only to the extent the presence of such pesticides breached the warranties in Section 4.D.) or other materials that are not capable of being removed in the cleaning process or in the event Ocean Spray rejects Northland Products because Ocean Spray reasonably believes the cranberries would potentially contaminate or damage other cranberries or Ocean Spray’s facilities or equipment, then Ocean Spray shall not be required to clean or bin such Northland Products and Northland shall remove such Northland Products from the receiving station at its expense within 24 hours. In the event that there is more than 20% rot and debris in any delivery of Northland Products, Ocean Spray may reject the Northland Products for purposes of processing such cranberries into concentrate, but Ocean Spray shall receive, clean and bin such Northland Products (other than the cranberries described above which Ocean Spray is not required to receive, clean and bin) at the fee rate set forth on Exhibit 4, and Northland agrees to pay the rot and debris charge as set forth on Exhibit 4. |
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4. Notice of Rejection. Ocean Spray will provide written notice (which may be by e-mail) that the fruit has been initially rejected for purposes of processing the fruit (the “Initial Rejection”) to either the representative on site or, in the event a Northland representative is not on site, to the representative set forth in Exhibit 6, specifying the reason for such Initial Rejection. Northland shall use commercially reasonable efforts to rework any properly rejected Northland Products to bring them into conformance with the specifications on Exhibit 1 and Exhibit 2 and to resubmit them to Ocean Spray for acceptance. If Northland agrees with the Initial Rejection and the fruit cannot reasonably be re-worked, Northland shall so notify Ocean Spray and it will be considered a final rejection (“Final Rejection”). If Northland disagrees with the Initial Rejection, Northland may take additional tests of the fruit or discuss the matter further with Ocean Spray. If there is a dispute as to whether Ocean Spray can reject the Northland Products, the parties agree that the fruit (other than fruit which Ocean Spray reasonably believes would potentially contaminate or damage other cranberries or Ocean Spray’s facilities or equipment) will be received, cleaned, binned and stored, until Ocean Spray agrees to accept the fruit, provided that if the fruit has not been accepted by Ocean Spray within forty five (45) days after the fruit is received by Ocean Spray, it shall be deemed a Final Rejection hereunder. If it is later determined that the Initial Rejection was proper and Ocean Spray cleaned and binned the fruit, Northland will pay the receiving, cleaning and binning fee on Exhibit 4, plus any additional reasonable storage charges. |
5. Use of Northland Products Following Rejection. There shall be no restrictions on the rights of Northland to sell or otherwise use those specific Northland Products, which are subject to a Final Rejection hereunder. The rejection of any load by Ocean Spray shall not affect the requirement that Northland shall continue to deliver the remaining cranberries from the Allowable Acreage for processing during the current harvest and any future harvests pursuant to the terms of this Agreement |
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5. SHIPMENT FORECASTS; SHIPMENT ORDERS; PURCHASE OF NON-COMMITTED CONCENTRATE
A. Shipment Forecasts. Every thirty days, Northland shall send Ocean Spray a written, rolling 90-day forecast of Shipments that identifies the estimated weekly quantity of Shipments to be delivered to Northland by Ocean Spray during such period (“Rolling Forecast”).
B. Shipment Orders. Northland shall place orders for Shipments (a “Shipment Order”) not less than two (2) weeks prior to the requested Shipment date and in amounts materially consistent with the Rolling Forecast. Ocean Spray shall have no obligation hereunder to make any Shipments prior to November 30, 2004. Ocean Spray shall either schedule production in order to satisfy each Shipment Order or have sufficient quantities of Concentrate available in storage. Ocean Spray shall not be obligated to provide Concentrate or Ocean Spray Concentrate to Northland in any Year in amounts in excess of the Concentrate produced or to be produced from the Northland Products delivered to Ocean Spray from the harvest held in the immediately preceding harvest period. In any given month of a Year, Ocean Spray shall not be obligated to ship more than 1/6 of the amount of Concentrate required to be produced in a Year from the Northland Products and Ocean Spray shall not be obligated to ship Concentrate in any month to the extent doing so would result in total shipments for the relevant Year exceeding a fraction of the concentrate to be produced that Year with a numerator equal to the months (including any partial months) elapsed during the Year plus one and a denominator of twelve. Northland acknowledges and agrees that Concentrate processed by Ocean Spray and shipped to Northland under this Agreement may only be used as an ingredient for products sold (1) under the brand names Northland, Seneca, and Tree Sweet or (2) any other brand developed, licensed or purchased by Northland. In addition, during Year One, Northland acknowledges and agrees that concentrate processed from the Oregon Contract Growers may only be used as an ingredient for products sold under (1) the brand names of Northland, Seneca, and Tree Sweet or (2) any other brand developed, licensed or purchased by Northland. Other than as provided in Section 4.C. for concentrate produced from cranberries subject to a Final Rejection, Northland acknowledges and agrees that concentrate inventory owned by Northland on and after the date hereof (including without limitation the Holdback Inventory) may only be used as an ingredient for products sold under (1) the brand names of Northland, Seneca and Tree Sweet or (2) any other brand developed, licensed or purchased by Northland. Ocean Spray shall deliver the Concentrate to Northland at Ocean Spray’s facility or outside freezer location. Northland shall be responsible for securing, scheduling and paying for all transportation for the Shipments and Ocean Spray or its subcontractor shall be responsible for loading the Shipments from the applicable processing plant or freezer location. Northland agrees that all bulk tankers carrying the Concentrate shall be food grade stainless steel, dedicated to food transportation and marked accordingly. Northland shall cause the carrier to provide to Ocean Spray’s receiving location a wash certificate and information as to the specific products carried on the tank truck’s last three loads. Ocean Spray agrees that all points of entry and discharge on bulk tankers must be secured and sealed after filling. Ocean Spray shall cause the carriers to record the serial numbers of the seals on the xxxx of lading. Northland also agrees to use commercially reasonable efforts to cause its carriers to comply with the conditions set forth on Exhibit 3.
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C. Nonconforming Goods. Northland shall have the right to reject concentrate for claims related to damages, defects, shortages and failure to meet the specifications on Exhibit 3 and for a breach of the representations in Section 17.A. The right to reject for all claims for damages, defects, shortages and failure to meet specifications on Exhibit 3 must be made within thirty (30) days of delivery of the Shipments by Ocean Spray to Northland’s carrier, provided that any claims related to a breach of Ocean Spray’s warranty in Section 17.A. may be made at any time. NORTHLAND’S FAILURE TO MAKE SUCH CLAIMS WITHIN THE SPECIFIED TIME PERIOD WILL RESULT IN AN UNCONDITIONAL WAIVER OF SUCH CLAIMS. Northland shall give Ocean Spray written notice for its basis for rejecting the Concentrate. In the absence of notifying Ocean Spray of the proper rejection of the Shipments, Northland will be deemed to have accepted the Shipments. Northland may not reject Shipments that were damaged during delivery by Northland’s common carrier after delivery to Northland F.O.B. Ocean Spray shall have the right to rework any properly rejected concentrates to bring them into conformance with the specifications on Exhibit 3 and to resubmit them to Northland for acceptance. Northland shall not have the right to reject Concentrates which are damaged or unacceptable due to a breach of Northland’s warranty in Section 4.D. In the event that Northland properly rejects the Concentrate after delivery, Ocean Spray shall pay shipping costs to have the Concentrate or Ocean Spray Concentrate delivered to the same location as previously delivered to by Northland.
D. Deferral of Shipments. In the event that Northland is in default with respect to any of its payment obligations in this Agreement and Ocean Spray has notified Northland of such default, Ocean Spray may, without incurring liability to Northland and without limiting any other right or remedy of Ocean Spray, defer further Shipments to Northland (including Concentrate under open purchase orders) until such default is remedied.
E. Purchase of Non-Committed Concentrate. On the fifth business day of each month during the Term, commencing in November 2004, Ocean Spray shall purchase from Northland an amount of Concentrate equal to the amount, if any, by which the Allowed Monthly Concentrate for the prior calendar month exceeds the Shipments for the prior calendar month(such difference, the “Non-Committed Concentrate”) and shall receive all right, title and interest in the Non-Committed Concentrate, free and clear of all liens and encumbrances, upon payment therefor. The purchase price per gallon for the Non-Committed Concentrate shall be calculated on a monthly basis and shall equal the average price per gallon (adjusted for international sales to not include freight and duty expenses) at which Ocean Spray or its Affiliates sold to third-party buyers (excluding sales for that concentrate which is used for the manufacture of Ocean Spray branded products) in arms length transactions of 50 Brix cranberry juice concentrate during the most recent six-month period preceding the month in which Ocean Spray is purchasing the Non-Committed Concentrate hereunder (the “Non-Committed Concentrate Price”). In the event the requested Shipments are greater than the Allowed Monthly Concentrate in any given month, the excess usage will be deducted from the next month’s and any subsequent months (if applicable) Allowed Monthly Concentrate solely for purposes of calculating the amount of Non-Committed Concentrate that Ocean Spray will be required to
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purchase hereunder. Northland shall issue invoices for the Non-Committed Concentrate, the payment terms of which shall be net 10 days from the date of the invoice, provided that Ocean Spray, following notice to Northland, may offset any fees (including without limitation Fees, storage fees, rot and debris fees and receiving, cleaning and binning fee) which are past due and are not being contested in good faith by Northland. If any invoice is not paid within such time, Ocean Spray shall be assessed a penalty of interest at an annual rate of 250 basis points over the three-month LIBOR rate as of the date such payment was due. All payments to Northland shall be made electronically to an account designated by Northland and shall be in United States currency or cash equivalent. Invoices may be delivered by email or facsimile transmission. Notwithstanding anything to the contrary herein, Ocean Spray shall have the ability, in its sole discretion, to purchase Northland Products in fruit form in lieu of any Non-Committed Concentrate that Ocean Spray is required to purchase pursuant to this Section 5.E. Northland shall deliver all right, title and interest in the Northland Products in fruit form in equivalent Barrels as calculated per Section 3 or Non-Committed Concentrate purchased by Ocean Spray hereunder, free and clear of all liens and encumbrances whatsoever upon receipt of payment therefor. Notwithstanding anything to the contrary herein, Ocean Spray shall not be required to purchase and may reject any Non-Committed Concentrate which may be damaged due to Northland’s breach of the warranty in Section 4.D, and there shall be no restrictions on the rights of Northland to sell or otherwise use such rejected Non-Committed Concentrate.
F. Calculation of the Non-Committed Concentrate Price. On or before the third business day of each month during the Term commencing November, 2004, Ocean Spray shall prepare and deliver to Northland (i) a statement listing the price and number of gallons (adjusted for international sales to not include freight and duty expenses) Ocean Spray or its Affiliates sold to third-party buyers (excluding sales for that concentrate which is used for the manufacture of Ocean Spray branded products) in arms length transactions of 50 Brix cranberry juice during the most recent six-month period preceding such month (which list will be itemized by customer but will not list the name of the customer) and (ii) Ocean Spray’s computation of the Non-Committed Concentrate Price for such month (the “Purchase Price Statement”), which statement shall have been certified as correct in all material regards by Ocean Spray’s chief financial officer. Ocean Spray’s auditors shall certify six months of Purchase Price Statements twice per year (by May 15 (certifying the statements from November though April and by November 15 (certifying the statements from May through October)).
G. Disagreements. If Northland disputes the Non-Committed Concentrate Price as calculated by Ocean Spray, Northland shall notify Ocean Spray in writing of such disagreement (such notice setting forth the basis for such disagreement in reasonable detail) within 185 days of receipt by Northland of the Purchase Price Statement and Northland may request during such 185 day period any additional information related thereto, but Ocean Spray shall be under no obligation to provide the names of the relevant customers to Northland. Northland and Ocean Spray shall thereafter negotiate in good faith to resolve any such disagreements. If Northland and Ocean Spray are unable to resolve any such disagreements within 15 days of the date of notification to Ocean Spray of such disagreements, Northland shall have 15 days in which it may send its chief financial officer or his designee (other than Xxxx Xxxxxxxxxxx) on its behalf to review the records relating to Ocean Spray’s top ten customers during the six-month period required to be used to calculate the Non-Committed Concentrate Price. Northland’s chief financial officer or his designee shall enter into a confidentiality agreement with Ocean Spray prior to the review of the records, which, among other things, will provide that the chief financial officer or his designee may only disclose the Revised Non-Committed
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Concentrate Price to Northland, and may not disclose any other information, including without limitation the names and sales amounts for the top ten customers, without the prior written consent of Ocean Spray. In the event Northland and Ocean Spray are not able to resolve the dispute within ten days of the chief financial officer’s or his designee’s review of the records, Northland and Ocean Spray shall submit the disagreement to an accounting firm of nationally recognized standing to be mutually selected by Northland and Ocean Spray, or if no agreement on such firm is reached, to a “big four” accounting firm other than any firm that has provided substantial services to Ocean Spray or Northland during the immediately preceding two years (the “Resolving Accounting Firm”). The Resolving Accounting Firm shall enter into a confidentiality agreement with Ocean Spray. The Resolving Accounting Firm shall only review the books and records of Ocean Spray relating to the six-month period required to be used to calculate the Non-Committed Concentrate Price. Any information, other than the Revised Non-Committed Concentrate Price, obtained during the review shall be maintained in confidence by the Resolving Accounting Firm and shall not be disclosed to Northland without the prior written consent of Ocean Spray. The resolution of such disagreements by the Resolving Accounting Firm shall be final and binding on Northland and Ocean Spray. In the event that the final determination of the Non-Committed Concentrate Price by the Resolving Accounting Firm differs from the Non-Committed Concentrate Price set forth on the Purchase Price Statement (the “Statement Differential”) by five percent or less, Northland shall pay the fees and expenses of the Resolving Accounting Firm relating to the resolution of any such disagreements. In the event that the Statement Differential is greater than five percent, such fees and expenses shall be paid by Ocean Spray. The Non-Committed Concentrate Price, as ultimately determined pursuant to this Section 5.G, shall be referred to herein as the “Revised Non-Committed Concentrate Price”. Notwithstanding anything to the contrary herein, Northland may only dispute and possibly have re-adjusted the prior six months of Purchase Price Statements.
H. Purchase Price Adjustment. For any month under this Agreement, if the Revised Non-Committed Concentrate Price is greater than the Non-Committed Concentrate Price, an amount equal to the excess of the Revised Non-Committed Concentrate Price over the Non-Committed Concentrate Price for such month, multiplied by the number of gallons of Non-Committed Concentrate for such month shall be added to the next monthly invoice to be paid by Ocean Spray. For any month under this Agreement, if the Revised Non-Committed Concentrate Price is less than the Non-Committed Concentrate Price, an amount equal to the shortage of the Revised Non-Committed Concentrate Price from the Non-Committed Concentrate Price for such month, multiplied by the number of gallons of Non-Committed Concentrate for such month shall be added to the next monthly invoice to be paid by Northland.
I. Holdback Inventory. In the event that Northland has any Holdback Inventory in its inventory eighteen (18) months after the Effective Date, Ocean Spray has the right, but not the requirement, to buy any Holdback Inventory at a price of $25.80 per gallon. If Ocean Spray does not buy the Holdback Inventory by the date that is nineteen months after the Effective Date, there shall be no restrictions on the right of Northland to sell or otherwise use such Holdback Inventory, so long as Northland has not received any Shipments under this Agreement at such date. Northland shall have the right to use the Holdback Inventory to fill open purchase orders under the Asset Purchase Agreement.
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6. INGREDIENTS AND PACKAGING MATERIAL
A. Northland shall pay for and provide the deliveries of Northland Products. The Northland Products shall be delivered in bulk to the Processing Plant or such other processing location as the parties may mutually agree; provided that the cranberries grown by the Oregon Contract Growers may be delivered to the Bandon Plant beginning with the harvest in 2005. The Northland Products harvested from the four growers subject to the Crop Purchase Agreement, executed on April 7, 1999, which are to be cleaned and binned by Eagle River Cranberry Handlers as described on Exhibit 8 may be delivered to Eagle River for so long as Eagle River Cranberry Handlers Inc. is receiving, cleaning and binning the cranberries pursuant to such Grower Agreement. After the Northland Products have been delivered to Ocean Spray, Ocean Spray shall pay for and provide all ingredients (other than cranberries) and packaging materials (including, but not limited to, bins, drums, liners, seals, and pallets) required to produce, package, and ship the Concentrate. Ocean Spray shall pay for, supply and apply labeling on each package as set forth on Exhibit 2.
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A. Standard of Performance. Ocean Spray will process, package and store all deliveries of Northland Products and Concentrate using the procedures set forth on Exhibit 2. Ocean Spray will comply with the specifications set forth on Exhibit 3.
1. Ocean Spray will allow Northland representatives to conduct inventories of Concentrate and Northland Products and inspections of the Processing Plant, the Bandon Plant and such other processing locations permitted hereunder at any time during normal business hours upon reasonable prior notice to Ocean Spray any time the Concentrate is actually being produced. Ocean Spray shall send samples of Northland Products and Concentrate to Northland at such times and in such quantities as Northland may reasonably request. Except for the raw fruit samples taken under Section 2.A.2., Northland shall reimburse Ocean Spray for the cost of taking the samples and shipping samples to Northland as provided in this Section 8.A.1. |
2. Except as otherwise provided in this Section 8.A.2, Ocean Spray shall conduct sampling and evaluation of Northland Products upon delivery to the Processing Plant, the Bandon Plant and any other receiving location permitted hereunder and/or prior to use, as described in Exhibit 2 hereto. Northland, Northland’s third-party contract growers or their respective representatives may be present at the Processing Plant, the Bandon Plant and any other receiving location to observe, sample, inspect or evaluate the Northland Products as and when delivered, and evaluate Ocean Spray’s sampling and evaluation thereof hereunder. Ocean Spray shall not use Northland Products that it knows (based solely on the testing conducted pursuant to Exhibit 1) are adulterated or otherwise are not in compliance with Applicable Laws. |
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3. If Northland and Ocean Spray reasonably determine that material, work-in-process, or Concentrate are reconditionable or salvageable, Ocean Spray shall either rework the Concentrates to bring them into conformance with the specification on Exhibit 3 or Ocean Spray shall remove all Northland (or Northland customer) identification from them and dispose of them as Ocean Spray desires. If such rework is due to a breach of Northland’s warranty in Section 4.D., Northland shall pay for any additional fees incurred by Ocean Spray. |
A. Codes. Each lot of Concentrate shall be identified by a unique code.
10. SPECIFICATIONS
A. General Specifications. Ocean Spray shall perform the Services in accordance with the following:
1. the Pesticide Screening procedures as set forth on Exhibit 1; |
2. the Procedures and Standards as set forth on Exhibit 2; and |
3. the specifications for Concentrate as set forth on Exhibit 3. |
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B. Amendments to Specifications. Northland may not change the terms of the Specifications without the prior written consent of Ocean Spray, which consent shall not be unreasonably withheld in the event that Northland pays the costs of any required changes in the processing, packaging, labeling or equipment. If any Specifications are changed in a manner that results in increases in Ocean Spray’s costs of processing and packaging the Northland Products or Concentrate, Ocean Spray shall advise Northland as to the amount of such increased costs and shall provide Northland with appropriate documentation substantiating such increased costs. If any Specifications are changed in a way that adversely affects the yield, Ocean Spray and Northland shall mutually adjust the yield guarantee in Section 3 accordingly. Ocean Spray and Northland shall mutually agree on an appropriate adjustment to the Fees (as hereinafter defined) to reflect such increased costs.
1. Such statutory worker’s compensation insurance for Ocean Spray’s employees as is required by law. |
2. Property insurance for (A) the replacement cost of Northland Products in Ocean Spray’s care, custody and control, and (B) the replacement cost of Concentrate in Ocean Spray’s care, custody and control, with Northland named as an additional insured as its interests may appear. |
3. General commercial liability insurance with combined bodily injury, property damage, product liability, and completed operations coverage in the amount of $2,000,000 per occurrence, $10,000,000 in the aggregate, which names Northland as an additional insured. |
1. Worker’s compensation insurance covering employees who may enter upon Ocean Spray’s premises in accordance with Applicable Laws and Northland shall take reasonable steps to make sure that its common carriers have worker’s compensation insurance in accordance with Applicable Laws covering any of the carriers’ employees who may enter upon Ocean Spray’s premises. |
2. General commercial liability insurance with combined bodily injury, property damage, product liability, and completed operations coverage in the amount of $2,000,000 per occurrence, $10,000,000 in the aggregate, which names Ocean Spray as an additional insured. |
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B. Eagle River Fee Adjustment. Northland shall be solely responsible for paying any amounts owing to Eagle River Cranberry Handlers, Inc.; provided that, as between Ocean Spray and Northland, to the extent Eagle River Cranberry Handlers, Inc. receives, cleans, bins and loads for transport/shipment any cranberries delivered by Alder Lake Cranberry Corporation, H.E. Query, Inc. or Xxxxxxx Xxxxxxxxxxx d/b/a/ Thunder Lake Cranberry Xxxxx and Tomahawk Cranberry Xxxxx, Northland shall receive from Ocean Spray a credit against the Fees in the amount of $1.50 for each Paid Weight Barrel of Northland Products handled by Eagle River Cranberry Handlers, Inc. during the harvest in 2004 (and not in any subsequent harvests). Thereafter, for so long as the Eagle River arrangement for receiving, cleaning and binning is in effect, Northland shall receive from Ocean Spray a credit against Fees in the amount of $1.00 for each Paid Weight Barrel of Northland Products handled by Eagle River Cranberry Handlers, Inc. The credits pursuant to this Section 12.B. shall be applied against the Fees as incurred until satisfied in full. Northland shall use commercially reasonable efforts to attempt to terminate the Eagle River Cranberry Handlers, Inc. arrangement for receiving, cleaning and binning as soon as reasonably practicable after the date of this Agreement .
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15. LABELING AND DISCLAIMER OF INTEREST IN NORTHLAND TRADEMARKS
Except as provided herein, neither this Agreement nor the performance of any Service by Ocean Spray or its Affiliates hereunder shall give or is intended to give Ocean Spray or its Affiliates any right, title or interest in or to any trademark owned or licensed by Northland and Ocean Spray hereby disclaims any right, title or interest in or to any trademark used in the packaging of Northland Products or Concentrate. Ocean Spray shall not at any time in the future use any materials or containers bearing any such trademark except in connection with the manufacturing and packaging of Northland Products or Concentrate for Northland under this Agreement.
16. LIENS AND SECURITY INTERESTS
Ocean Spray specifically waives any and all liens and/or security interests which it might acquire by operation of law or otherwise in the Northland Products or Concentrate. Ocean Spray’s continued right to possession of the Northland Products or Concentrate shall be determined solely by the terms and conditions of this Agreement, and Ocean Spray shall not at any time have the power of sale or disposal over any Northland Products or Concentrate, except upon the prior written consent and at the direction of Northland. Notwithstanding the foregoing, nothing herein shall limit or preclude Ocean Spray from exercising full ownership rights with respect to any Northland Products and Concentrate to which Ocean Spray acquires title under this Agreement.
A. By Ocean Spray. Subject to Northland’s warranty in Section 4.D., Ocean Spray represents and warrants to Northland that the Concentrate and the Ocean Spray Concentrate as of the time of delivery to Northland complies with Applicable Law, is not adulterated and is fit for human consumption. EXCEPT AS SET FORTH IN THIS SECTION 17A, OCEAN SPRAY MAKES NO OTHER REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE CONCENTRATES, WHETHER EXPRESS OR IMPLIED AND EITHER IN FACT OR BY OPERATION OF LAW, AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED AND STATUTORY WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE AND NONINFRINGEMENT.
B. Disclaimer by Northland. OCEAN SPRAY SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) NORTHLAND IS TRANSFERRING ANY NON-COMMITTED CONCENTRATE PURCHASED BY OCEAN SPRAY HEREUNDER AS IS, WHERE IS AND WITH ALL FAULTS OTHER THAN THOSE FAULTS DUE TO THE BREACH OF NORTHLAND’S WARRANTIES HEREUNDER AND (ii) NEITHER NORTHLAND NOR ANY OTHER PERSON IS MAKING, AND OCEAN SPRAY IS NOT RELYING ON, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, OTHER THAN THOSE PROVIDED IN THIS AGREEMENT, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO ANY MATTER CONCERNING THE NON-COMMITTED CONCENTRATE, OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED TO OCEAN SPRAY BY NORTHLAND OR ANY OTHER PERSON OR OTHERWISE OBTAINED BY OCEAN SPRAY CONCERNING THE NON-COMMITTED CONCENTRATE.
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C. Disclaimer by Ocean Spray. NORTHLAND SPECIFICALLY ACKNOWLEDGES AND AGREES THAT OCEAN SPRAY IS NOT MAKING ANY REPRESENTATIONS AND WARRANTIES TO NORTHLAND RELATING TO THE PESTICIDE SCREENING PROGRAMS AS DESCRIBED IN EXHIBIT 1. Notwithstanding anything to the contrary herein, the Pesticide Screening Program shall not affect the representation and warranty made by Northland in Section 2.C or Section 4.D.
A. By Ocean Spray. Ocean Spray shall defend, indemnify and hold Northland harmless from and against any and all liability, loss, damage, cost or expense incurred by Northland (including reasonable attorney’s fees) arising out of or in connection with (i) the breach of Ocean Spray’s warranties and agreements herein (unless such breach is caused by a breach of Northland’s representations, warranties and obligations hereunder), (ii) any patent infringement relating to any equipment, technology, process or method used by Ocean Spray or its Affiliates in providing the Services hereunder which is not specifically required by the Specifications, and (iii) any recall to the extent such recall is attributable to the breach of Ocean Spray’s representations and warranties herein, provided, however, that such indemnification in (i) through (iii) shall not apply to the extent that such losses, claims, damages and liabilities arise from the willful misconduct or gross negligence of Northland or its representatives .
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19. TERMINATION AND RETURN OF PROPERTY
A. By Northland. In the event Ocean Spray breaches any representation or warranty or fails to perform any obligation in this Agreement, Northland may, in its sole discretion, after providing Ocean Spray with a 60-day written notice to cure, terminate this Agreement, provided that Northland shall have the ability to terminate this Agreement in the event any nonpayment to Northland is not received within 30 days of notice of default, unless such nonpayment is disputed in good faith by Ocean Spray.
B. By Ocean Spray. If at any time Northland breaches any representation or warranty or fails to perform any obligation in this Agreement, Ocean Spray may, in its sole discretion, after providing Northland with a 60-day written notice to cure, terminate this Agreement, provided that Ocean Spray shall have the ability to terminate this Agreement in the event any nonpayment to Ocean Spray is not received within 30 days of notice of default, unless such nonpayment is disputed in good faith by Northland.
1. Ocean Spray may provide written notice to Northland prior to March 30 of a calendar year (based upon the deliveries in the immediately prior harvest), that Ocean Spray does not desire to process fruit for the following harvest and that it desires to terminate this Agreement. In such case, Ocean Spray shall terminate this Agreement effective as of October 6 of such calendar year, provided that Ocean Spray shall continue to receive, clean and bin (but not process) the Northland Products at the rate specified in Exhibit 4 for the first fall harvest after the notice of termination, and Section 2.A.2 shall continue in existence until December 1 of such calendar year. |
2. Ocean Spray may also provide written notice to Northland after March 30 of a calendar year (based upon the deliveries in the immediately prior harvest) that it desires to terminate this Agreement, Ocean Spray shall terminate this Agreement effective as of October 6 of the following calendar year, provided that Ocean Spray shall (i) continue to process fruit for the first fall harvest after the notice of termination (and all of Ocean Spray’s other obligations under this Agreement, including under Section 5.E. shall remain in effect) and (ii) continue to receive, clean and bin (but not process) the Northland Products at the rate specified in Exhibit 4 for the second fall harvest after the notice of termination, and Section 2.A.2 shall continue in existence until December 1 of such year. |
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The following capitalized terms when used herein shall have the meaning indicated below. Definitions of certain other capitalized terms are set forth elsewhere in this Agreement.
“Affiliates” shall mean any person (including but not limited to natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts and other organizations) who, controls, is controlled by or is under common control with such person.
“Allowable Acreage” shall mean (i) the total acreage of cranberry marshes owned or leased by Northland or its Affiliates, (ii) the total acreage of cranberry marshes under contract by and between Northland or its Affiliates and any third party contract growers, (iii) the total acreage of cranberry marshes owned (directly or indirectly) or leased by Xxxx Xxxxxxxxxxx, or his spouse or trusts for the benefit of his children or any entity controlled directly or indirectly by Xxxx Xxxxxxxxxxx and (iv) the total acreage of cranberry marshes under contract by and between Xxxx Xxxxxxxxxxx or his spouse or trusts for the benefit of his children, or any entity controlled directly or indirectly by Xxxx Xxxxxxxxxxx on the one hand and any third party contract growers on the other hand.
“Allowed Monthly Concentrate” shall mean (i) with respect to the month of October of each Year under this Agreement, one twelfth of the amount of Concentrate required to be produced by Ocean Spray at the yield guarantee specified in Section 3 from the Northland Products delivered to Ocean Spray from the beginning of the harvest through the end of October of such Year (the “Allowed October Concentrate”), and (ii) with respect to any of the months of November through September of each Year under this Agreement, one-eleventh of the excess of (A) the amount of concentrate required to be produced by Ocean Spray at the yield guarantee specified in Section 3 from the Northland Products delivered to Ocean Spray from the beginning of the harvest through December 1 of such Year over (B) the Allowed October Concentrate for such Year. For purposes of illustration, assuming that 600,000 Paid Weight Barrels of Northland Products were delivered to Ocean Spray by October 31, 2004, and that the yield guarantee is equal to 1.66, the Allowed Monthly Concentrate related to October 2004 would be equal to 83,000 gallons ((600,000 X 1.66)/12). Assuming that an additional 20,000 Paid Weight Barrels of Northland Products were delivered to Ocean Spray during the month of November 2004, the Allowed Monthly Concentrate related to each of the months of November 2004 through September 2005 shall be equal to 86,018.18 gallons (((620,000 X 1.66) — 83,000)/11).
“Bandon Plant” shall mean the processing plant located at Xxxxxxx 000 Xxxxx, Xxxxxx, Xxxxxx.
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“Barrel” shall mean 100 pounds of cranberries.
“Change in Control” shall mean through a single transaction or a series of transactions (i) Sun Northland LLC and their Affiliates and Xxxx Xxxxxxxxxxx, no longer own more than 50% of the voting securities of Northland (whether by stock purchase, redemption, merger or otherwise), (ii) all or substantially all of the assets of Northland are transferred to one or more non-Affiliate(s) (other than as contemplated by the Option Agreement or the Asset Purchase Agreement), (iii) the Northland trademark or brand or another trademark or brand owned by Northland is transferred to a non-Affiliate or (iv) another brand is purchased by Northland. In the event there is any other material change in Northland’s manner of conducting its business related to the Northland trademark or brand or another trademark or brand owned by Northland, including without limitation the licensing of a trademark or brand owned by Northland to a third party, entering into a marketing or distribution agreement or a joint venture agreement, or any other similar agreement, Ocean Spray shall have the right to declare such change in Northland’s business to be a Change in Control.
“Concentrate” shall mean all the cranberry juice concentrate produced by Ocean Spray from the deliveries of Northland Products.
“Dispute” shall mean any dispute or disagreement between Ocean Spray and Northland concerning the interpretation of this Agreement, the validity of this Agreement, any breach or alleged breach by any party under this Agreement or any other matter relating in any way to this Agreement; and (b) exclude any dispute or disagreement between the parties concerning the Non-Committed Concentrate Price, which shall be resolved pursuant to the provisions of Section 5.G. of this Agreement.
“Eagle River Facility” shall mean the facility located at 000 Xxxx Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxx.
“Governmental Entity” shall mean any government or subdivision thereof, domestic, foreign or supranational, any administrative, governmental or regulatory authority, agency, commission, tribunal or body, domestic, foreign or supranational, or any court or other judicial authority.
“Holdback Inventory” shall mean the cranberry juice concentrate owned by Northland as of the date of this Agreement.
“Lot” shall mean (i) those cranberries delivered from the cranberry marshes described in the definition of Allowable Acreage in (i)during any twenty four hour calendar day and (ii) each load of cranberries from cranberry marshes described in the definition of Allowable Acreage in (ii) (iii) and (iv).
“Maximum Deliveries” shall mean for any given Year under this Agreement, the amount of Northland Products harvested from the Allowable Acreage during the month of September immediately preceding such Year, and in October and November during such Year, provided that following a Change in Control the Maximum Delivery for any Year shall be equal to the Northland Products harvested from marshes comprising total acreage of no more than (x) 110% of the Allowable Acreage as of the date hereof (y) minus the acreage of any marshes sold by Northland after the date of this Agreement and prior to the Change in Control (which amount will not be subtracted if the buyer of the xxxxx becomes a Northland contract grower or Northland or its Affiliates leases the applicable xxxxx in a sale lease back arrangement.)
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“Northland Products” shall mean all cranberries harvested from the Allowable Acreage.
“Ocean Spray Concentrate” shall mean the cranberry juice concentrate provided by Ocean Spray as Substitute Goods.
“Option Agreement” shall mean the Option Agreement by and between Northland and Ocean Spray, dated as of the date hereof.
“Oregon Contract Growers” shall mean all third-party contract growers who have committed to deliver cranberries grown by them from marshes located in the states of Oregon or Washington.
“Paid Weight Barrel” shall mean one Barrel of cranberries less debris, rot and moisture as determined by sampling and evaluation at the time of delivery to Ocean Spray in accordance with Exhibit 2.
“Processing Plant” shall mean the processing plant located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxx, XX.
“Purchase Agreement” shall mean the Asset Purchase Agreement by Ocean Spray and Northland as of the date hereof.
“Shipment” shall mean an amount of Concentrate produced by Ocean Spray and ordered for use by Northland.
“Specifications” shall mean the formulae, standards and manufacturing procedures as set forth in Exhibits 1, 2 and 3 attached hereto.
“Year” shall mean, for any given year under this Agreement, the period of time from October 1 to and including September 30 of the next year. For example, any reference to Year One of this Agreement shall refer to the period of time from October 1, 2004 to and including September 30, 2005.
Each capitalized term listed below is defined in the corresponding Section listed below:
Term | Section No. |
Agreement | Preamble |
Applicable Laws | 4.D |
Confidential Information | 14.A |
CPR | 22.E.3 |
Effective Date | 1.C |
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Excess Products Option | 1.A |
Fees | 12.A |
Final Rejection | 4.C |
GMA | 9.B |
Indemnified Party | 18.C |
Indemnifying Party | 18.C |
Initial Rejection | 4.C |
Lease Term | 2.C |
Non-Committed Concentrate | 5.E |
Non-Committed Concentrate Price | 5.E |
Northland | Preamble |
Ocean Spray | Preamble |
Purchase Price Statement | 5.F |
Replacement | 22.E.11 |
Request | 22.E.3 |
Rejected Northland Products | 2.C |
Resolving Accounting Firm | 5.G |
Revised Non-Committed Concentrate Price | 5.G |
Rolling Forecast | 5.A |
Services | 2.A |
Shipment Order | 5.B |
Statement Differential | 5.G |
Substitute Goods | 7.C |
Term | 1.C |
Transitional Services | 2.C |
Unauthorized Loss | 7.C |
A. No Assignment. Neither party may assign or transfer this Agreement without the express written consent of the other party. Notwithstanding the foregoing, Northland may assign this Agreement without the consent of Ocean Spray to any person, corporation or other entity with or into which Northland may be merged, or to which all or substantially all of its assets (or its remaining assets, at any given time) or the Northland brand may be sold or otherwise transferred, and Northland hereby agrees that in connection with any such transaction, at Ocean Spray’s option, Northland shall obtain from the other party or parties to such transaction its or their agreement to assume and be responsible for all of Northland’s obligations hereunder and otherwise to be bound by the terms of this Agreement. Each party agrees to notify the other party within fifteen (15) calendar days following any assignment that does not require the other party’s consent. Northland agrees to send Ocean Spray a notice within fifteen (15) days of a Change in Control. Northland also may assign this Agreement to any of its lenders as collateral security. Ocean Spray may assign this Agreement without the consent of Northland to (i) an Affiliate or (ii) any of its lenders as collateral security, provided that Ocean Spray shall remain responsible for all of its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their permitted successors and assigns. Notwithstanding anything to the contrary herein, Ocean Spray may subcontract with third parties to provide any of its obligations hereunder including but not limited to any of its processing or storage obligations; provided that Ocean Spray may only subcontract with third parties to perform its receiving obligations with the prior consent of Northland.
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If to Northland: |
Northland Cranberries, Inc. 0000 Xxxx Xxxxx Xxxxxx Xxxxxxxxx Xxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxxx, Vice President Legal Facsimile: 000-000-0000 |
With a copy to |
Xxxxxxxx & Xxxxx LLP Attn: Xxxxxxx X. Xxxxxxx 000 Xxxx Xxxxxxxx Xxxxx Xxxxxxx, XX 00000 Facsimile: 000-000-0000 |
If to Ocean Spray: |
Ocean Spray Cranberries, Inc. Xxx Xxxxx Xxxxx Xxxxx Xxxxxxxxx-Xxxxxxxxxx, XX 00000 Attention: Xxxx X. Xxxxxx, General Counsel Facsimile: (000) 000-0000 |
With a copy to: |
Xxxxxxx & Xxxxx LLP 000 Xxxx Xxxxxxxxx Xxxxxx Xxxxx 0000 Xxxxxxxxx, XX 00000 Attention: Xxxxxxxx X. Xxxxx Facsimile: 000-000-0000 |
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D. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin without regard to principles of conflicts of law. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS, HIS OR HER OBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.
1. Process. If a Dispute arises, the parties shall follow the procedures specified in this Section 22.E. |
(i) if the parties have not agreed within ten (10) calendar days of the Request on the selection of a mediator willing to serve, CPR, upon the request of either party, shall appoint a member of the CPR Panels of Neutrals as the mediator; and |
(ii) efforts to reach a settlement will continue until the conclusion of the proceedings, which shall be deemed to occur upon the earliest of the date that: (a) a written settlement is reached; or (b) the mediator concludes and informs the parties in writing that further efforts would not be useful; or (c) the parties agree in writing that an impasse has been reached; or (d) is thirty (30) calendar days after the Request and none of the events specified in Sections 22.E.3.ii.(a), (b) or (c) have occurred. No party may withdraw before the conclusion of the proceeding. |
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7. Performance to Continue. Each party is required to continue to perform its obligations under this Agreement pending final resolution of any Dispute. |
8. Extension of Deadlines. All deadlines specified in this Section 22.E. of this Agreement may be extended by mutual agreement between Ocean Spray and Northland. |
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K. Force Majeure. If either party is prevented from carrying out its obligations under this Agreement by events beyond its reasonable control, including acts or omissions of the other party, acts of God or government (including the Cranberry Marketing Order as promulgated by the United States Department of Agriculture), natural disasters or storms, fire, act of terrorism, explosion, riot, blackout, war or political strike, labor disputes (excluding labor disputes for Ocean Spray’s own employees), failure or delay of third party transportation, or the unavailability of raw materials, then such party’s performance of its obligations prevented by such force majeure event hereunder shall be excused during the period of such event and the time for performance of such obligations shall be automatically extended by the same period. Ocean Spray will use reasonable efforts to store the Concentrate at at least two different freezer locations. If there is a force majeure which affects the Processing Plant, Ocean Spray will use reasonable efforts to receive Northland Products at Ocean Spray’s other Wisconsin locations. If there is a force majeure which affects Ocean Spray’s ability to process Northland Products hereunder, Ocean Spray, at its option, shall either (1) allow Northland to move the Northland Products to another location to be processed at Northland’s expense (and Northland shall receive a credit for all Fees previously paid with respect to such fruit less fees applicable to any completed receiving, cleaning, binning, freezing and storage services for such fruit) and there shall be no restriction on the rights of Northland to sell or otherwise use such Northland Products moved to another location, or (2) subcontract the processing of the Northland Products to a third party. If Ocean Spray has a labor dispute with its employees, Northland will take reasonable efforts to work with Ocean Spray to have the Northland Products delivered to other Ocean Spray locations.
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L. Party Representatives. Throughout the Term, Ocean Spray and Northland shall each designate representatives to facilitate cooperation between the parties regarding their respective obligations under this Agreement. Such representatives may be changed from time to time by notice from one party to the other. Attached hereto as Exhibit 6 are the initial representatives designated by each of the parties and their specific areas of responsibilities.
[Remainder of Page Left Blank Intentionally; Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Toll Processing Agreement as of the date and year first above written.
NORTHLAND CRANBERRIES, INC. | |
By: /s/ Xxxx Xxxxxxxxxxx | |
Its: Chief Executive Officer | |
OCEAN SPRAY CRANBERRIES, INC. | |
By: /s/ Xxxx Xxxxxxxxxx | |
Its: Vice President, Operations |