HAWTHORNE MOUNTAIN VINEYARDS
GRAPE GROWERS CONTRACT
THIS CONTRACT made this 20th day of March, 2001.
BETWEEN: HAWTHORNE MOUNTAIN VINEYARDS
Box 480
Okanagan Falls, British Columbia VOH 1RO
(hereinafter called the "Company")
OF THE FIRST PART
AND: RMA Enterprises Ltd.
000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(hereinafter called the "Grower")
OF THE SECOND PART
WHEREAS,
A. The Company is the holder of a winery license issued by the Government of
British Columbia authorizing the Company to manufacturer, produce and sell
wine from its facilities known as the "Winery" located in Okanagan Falls,
British Columbia,
B. The Company has heretofore entered into contracts with growers of grapes in
British Columbia for the purchase and sales of grapes;
C. In furtherance, the Company and the Grower have agreed to enter into this
contract for the sale and purchase of grapes grown by the Grower,
THAT in consideration of the payment of the sum of ONE ($1.00) dollar by each
party to the other and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged) the parties hereto agree as
follows:
TERM
1.0 The initial term of this contract shall be for a period of THREE (3) years
from Decemeber 1st, 2000 to November 30th, 2003 inclusive.
1.1 This contract is an evergreen contract of (3) years and will renew each
year on its anniversary date of December 1st for a new (3) year term unless
written notice is given by the Company to the Grower, or the Grower to the
Company, by November 1st of that year. If such notice is given by one party
to the other, then the remaining (2) years of that contract will be in
effect until the contract is completed.
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PURCHASE AND SALE OF GRAPES
2.0 The Grower shall sell and the Company shall purchase all the varieties of
all grapes grown by the Grower on the acreage described in Schedule "A"
that meet the quality standards described in Schedule "B".
2.1 The Company shall, not later than the 30th day of November in each of the
years of this contract or such other date as is mutually agreed by the
parties, pay to the Grower for the quantity of each variety of the grapes
sold and purchased hereunder, that percentage of the reference price set
out in Schedule "C" specified for the individual quality standards for each
grape variety.
2.2 In the event that the sale and purchase of grapes for the price determined
in accordance with Section 2.1 is prohibited by reason of or pursuant to
the authority of any legislation or regulation enacted by the Governments
of British Columbia and/or Canada, this contract shall be suspended for so
long as the prohibition is in effect.
2.3 The Grower agrees that the Company is entitled to all the grapes produced
from the acreage described in Schedule "A" and agrees not to sell any
grapes to other purchasers without the prior written consent of the
Company.
2.4 In the event that the Grower sells grapes to which the Company is entitled
from Schedule "A" to other purchasers without the prior written consent of
the Company, then the Grower will pay to the Company the greater of five
thousand ($5,000.00) dollars or fifty (50%) percent of the proceeds of the
unauthorized sale at the time of such sale.
Notwithstanding Section 2.3 and 2.4 above, the Company hereby acknowledges that
the Grower is entitled to retain a reasonable amount of grapes for his own
personal use from the acreage described in Schedule "A". This does not include
grapes to be used by the Grower for any commercial venture.
ARBITRATION
3.0 Any disagreement between the parties arising out of this contract, the
interpretation of any of its provisions, or any alleged breach thereof
shall be submitted to arbitration pursuant to the Commercial Arbitration
Act of British Columbia, S.B.C. 1986, c. 3, upon either party giving to the
other party at least thirty (30) days written notice of its desire to have
the matter arbitrated, in which case this section and the following
sections shall apply.
3.1 Whenever any matter is to be submitted to arbitration pursuant to this
contract:
a) the Grower shall appoint a person to be his nominee; and
b) the Company shall appoint a person to be its nominee; and
c) the appointees of the Grower and the Company shall be appointed within
fifteen (15) days following the notice of the desire to arbitrate; and
PROVIDED HOWEVER, that if a party has not made the appointment within the
time hereinafter stipulated, then the other party shall be
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entitled under the Commercial Arbitration Act of British Columbia S.B.C.
1986, c. 3, to have a person appointed for such party; and
d) the Grower's appointee and the Company's appointee shall then appoint a
chairperson for the arbitration within fifteen (15) days following of the
last appointment of the Grower's appointee or the Company's appointee.
Failing the appointment of a chairperson within the stipulated time, either
party shall be entitled to apply under the Commercial Arbitration Act of
British Columbia S.B.C. 1986, c. 3, to have a chairperson appointed.
e) the site of the arbitration shall be Penticton or Kelowna as determined by
the Company and the rules of the British Columbia International Centre for
the domestic commercial arbitration proceedings shall not apply.
3.2 The costs, expenses and fees of the Grower's appointee and the Company's
appointee shall be borne respectively by the Grower and the Company; all
the other costs of the arbitration including the expenses and fees of the
chairperson shall be shared equally between the Grower and the Company.
Nothing herein shall prevent the Grower or Company from being reimbursed in
respect of the costs incurred by the respective parties in connection with
the arbitration by another individual, company or association.
GROWING AND HARVESTING PRACTICES
4.0 The Grower agrees to produce the grapes from the acreage described in
Schedule "A" in a manner consistent with recognized viticultural and
agricultural practices and in conformity with the other standards related
matters set out in Section B of Schedule "B" and agrees to use his best
efforts to produce grapes which will meet the highest attainable premium
standards set out in Section A of Schedule "B". The Company's field
representative may, at any reasonable time, examine the Grower's grape
crops, vines and soil and upon the request of the field representative, the
Grower shall provide information relating to fertilizers, insecticides,
fungicides and other substances utilized in the growing of the grapes, as
well as records that show the dates and hours irrigated and the gallons per
minutes flow rate.
4.1 The Grower shall consult with the Company on the methods used in the
cultivation of the grapes and shall use those methods which meet
agricultural standards of good farming practice. The Grower agrees that he
will not apply irrigation to the Vineyard within the last fourteen (14)
days prior to estimated harvest without the permission of the Company.
4.2 In the event that the Grower acquires or brings under cultivation for grape
growing, acreage in addition to that described in Schedule "A", the Grower
shall give to the company not less than thirty (30) days notice of his
intention to sell those grapes. In the event that the Grower is offered a
contract by another winery for these grapes, the Company shall have the
first right of refusal to contract these grapes at the price offered by the
other winery.
4.3 The Grower agrees that he will only use in his vineyard operation those
materials, sprays and chemicals that have been approved for use by both
federal and provincial agricultural regulations in the quantities and time
prescribed by the manufacturer and within legal tolerances. Should the
Grower use illegal or unapproved materials in his vineyard operation, then
he will be responsible for, and shall indemnify and save harmless the
Company from and against any damages, lawsuits, costs including
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product removal, replacement and lost revenue suffered by the Company
as a result of the illegal or unregistered material, sprays or chemicals
used by the Grower.
4.4 The Grower agrees that he will make every effort to be current on
viticultural practices and changes as they arise. The Company agrees to
make every effort to disseminate viticultural information to which it has
access to its contracted growers.
4.5 Notwithstanding anything contained in this Agreement, the Company at its
sole option, shall have no obligation to purchase grapes grown by the
Grower, where such grapes have not been picked by the Grower on or before
the 31st day of October in each year of the term of this contract. This
will not apply in the case of grapes hold for specialty wines, such as ice
wine or late harvest, or where the Company has given the Grower written
permission to pick at a date later than October 31st.
TERMINATION
5.0 This contract may be terminated by the parties hereto under the following
circumstances:
a) in the event that a party is placed in receivership or bankruptcy, this
contract may be terminated by the other party upon five (5) days notice;
b) in the event that a party breaches any material or substantive provision of
this contract, the other party may give written notice of the breach and
the contact shall terminate ninety (90) days after giving of this notice,
unless the breach is cured prior to the expiry of that period; or
c) the Company may terminate this contract in the event that, in the opinion
of the Company, the Grower is not following good farming practices in the
planting, cultivation, growing or harvesting of the grapes; PROVIDED
HOWEVER, the Company shall first give to the Grower ninety (90) days
written notice of termination specifying the improper farming practices of
the Grower. Within thirty (30) days of the receipt of such notice, the
Grower shall have the right to request of Association of British Columbia
Grape Growers to appoint a chairman of a committee to investigate the
complaint of the Company and to arbitrate the dispute. The committee shall
be composed of a nominee of the Association of British Columbia Grape
Growers, a grape specialist of the British Columbia Ministry of
Agriculture, Fisheries and Food, and a representative of the Federal
Department of Agriculture. The committee shall, within ninety (90) days
from the request of the Grower, deliver to the parties a written
determination as to whether or not the allegations of the Company are
correct. In the event the committee determines that the Grower is following
good farming practices, then the right of the Company to terminate the
contract shall expire and the contract shall remain valid and in force. If
the Grower does not request the appointment of a chairman of a committee
within the time allowed, the contract shall terminate at the end of the
ninety (90) days notice. If the committee determines that the Grower is not
following good farming practices, the contract shall terminate forthwith.
The Company shall have the option of continuing with the contract if the
Grower agrees to correct the improper practices.
RENEGOTIATION
6.0 The provisions of this contract may be the subject of renegotiation and the
contract thereby amended whenever any legislation, regulation,
administrative policy or administrative practice of the
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governments of British Columbia and/or Canada pertaining the
manufacture, production, pricing, LDB xxxx-up, distribution or sale
of domestic or imported wine in or from British Columbia is made,
amended, rescinded, invalidated or suspended or the general market
competitive conditions (the "Event"), and such Event causes or is likely
to cause a significant impact on the financial performance of the Company
in the opinion of the Company acting reasonably. For the purposes of this
Section 6.0, the Company shall be deemed to be a legal entity separate
from the Company, and the impact of the Event on the financial
performance of the Company shall be determined using financial records of
the Company prepared in a manner consistent with the historical accounting
and financial practices of the Company in respect of the Company prior
to November 30, 1994.
6.1 The renegotiation referred to in Section 6.0 shall be initiated by the
Company giving fifteen (15) days written notice to the Grower:
a) citing the Event:
b) giving the particulars of the extent to which the financial performance of
the Company has been or may be detrimentally affected;
c) specifying the provision of the contract to be renegotiated; and
d) the nature of the amendment sought.
6.2 The parties shall forthwith upon the expiry of the notice under Section
6.1, diligently undertake the renegotiation referred in the notice. If
agreement on the amendment sought is not reached within forty--five (45)
days from the giving of the notice, the matter shall be a disagreement
between the parties and referred to arbitration pursuant to Section 3.0.
6.3 In the event any provision of this contract is amended pursuant to Section
6.0 (the "Amendment'), the Grower may at any time thereafter request the
Company to renegotiate to delete or amend the Amendment if, in the opinion
of the Grower acting reasonably, the reason or basis for the Amendment no
longer applies or does not apply to the same extent as originally
considered.
6.4 The renegotiation referred to in Section 6.3 shall be initiated by the
Grower giving fifteen (15) days notice to the Company:
a) specifying the Amendment to be deleted or amended and the particulars upon
which the Grower relies, and
b) the nature of the amendment sought.
6.5 The parties shall forthwith upon the expiry of the notice under Section 6.4
diligently undertake the renegotiation referred to in the notice. If the
agreement on the deletion of or the amendment to the Amendment is not
reached within forty-five (45) days of giving of the notice, the matter
shall be a disagreement between the parties and referred to arbitration
pursuant to Section 3.0
6.6 In the event that a renegotiation under Section 6.3 results in the deletion
or amendment of the Amendment, either by way of agreement between the
parties or the arbitration process, the agreement or arbitration shall
include the following:
a) the effective date of the deletion or amendment;
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b) the entitlement of the Grower to be compensated for any direct loss of
income from the sale and purchase of grapes as a result of the Amendment
and, if so entitled, the amount of such said compensation.
FORCE MAJEURE
7.0 If any of the following events occur so as to prevent the performance by
either party of its obligations hereunder, or to such a degree as to impact
significantly on the sales of wine manufactured or produced by the Company
under its British Columbia winery license for the Company then, upon the
giving notice referred to In Section 7.1, the parties shall be relieved of
their respective obligations under this contract during the continuance of
the event and neither party shall have any claim against the other for
damages arising from such relief:
a) failure of the grape crop due to natural causes or man-made incidents
beyond the reasonable control of the Grower;
b) work stoppages due to labour disputes;
c) insufficient labour supply;
d) natural disasters, fire, equipment damage or other happenings beyond the
control of the Company or the Grower rendering a winery or vineyard
partially or wholly inoperative;
e) acts of war;
f) any legislation or regulatory action whereby the production, distribution
or sale of domestic or imported wine, in or from British Columbia, by the
Company is prohibited or significantly altered;
g) in the event the purchase of the grapes under this contract would render
the Company insolvent as defined pursuant to the provision of the
Bankruptcy ActR.S.C. 1985, c. B-3; or
h) refusal of the Government of British Columbia to renew a winery license
held by the Company save on account of the breach of a condition of such
license. This event shall be deemed not to continue if the Company or its
majority shareholder acquires a winery license in respect of another
winery, or a twenty-five (25%) percent or greater interest In the holder of
a winery license.
7.1 Upon the occurrence of any other events enumerated in Section 7.0, the
party which deems itself affected by the event shall forthwith give written
notice to the other party describing the event, the effect thereof and the
estimated duration of the event.
ASSIGNMENT
8.0 The Grower may, with the consent of the Company, assign this contract to
the purchaser of the Grower's vineyard situate on the lands described on
Schedule "A" who is or becomes a bonafide producer and who enters into
written covenants in favour of the Company to assume and perform all of the
obligations of the Grower hereunder, but such assignment shall not release
the Grower from his
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obligations herein. This contract shall be deemed to run with the land and
the Grower shall not be entitled to sell the lands as described in
Schedule "A", unless the purchaser of such lands in writing and in such
form and content acceptable to the Company, agrees to assume and perform
all of the obligations of the Grower hereunder. Such consent by the
Company will not be unreasonably withheld.
8.1 The Company may assign this contract, without the consent of the Grower, to
any person who is or becomes the holder of a winery license in British
Columbia and who in writing covenants in favour of the Grower to assume and
perform all of the obligations of the Company hereunder, but such
assignment shall not release the Company from its obligations herein.
TIME
9.0 Time is of the essence in this contract.
EFFECTIVE DATE
10.0 This contract shall come into effect on the date of commencement of the
term of this contract as set out in paragraph 1.0 of this contract.
10.1 Contemporaneously with the coming into effect of this contract, all grape
purchase contracts heretofore entered into between the Grower and the
Company, shall be cancelled and of no further force and effect save and
except for the performance of any obligation to have been performed on or
before such date.
10.2 The Grower represents, warrants, covenants and agrees that he is and will
be free from any liability or obligation with respect to the sale of grapes
from the acreage described in Schedule "A" to any person, corporation or
other legal entity other than the Company, and the Grower covenants and
agrees to indemnify and save the Company harmless from any loss, costs,
damages, claim or demand and all expenses incident thereto in the event
that the representation, warranty, covenant and agreement herein contained
is not true or is breached at any time during the terrn of this contract.
INDEMNIFY
11.0 In consideration of the Company entering into this Agreement with the
Grower which is an advantage to the Principal and is conditional upon the
Principal executing this Agreement, the Principal represents, warrants,
covenants and agrees with the Company as follows:
a) to indemnify and save harmless the Company from and against any and all
loss, costs, claims or demands resulting from any misrepresentation, breach
of warranty or nonfulfillment of any covenant or agreement on the part of
the Grower under this Agreement and any and all actions suits, proceedings,
demands, assessments, judgments, costs and legal and other expenses
incident to any of the foregoing.
b) to cause the Grower to perform all of the obligations on the part of the
Grower contained in this Agreement at the times and In the manner set forth
in this Agreement;
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c) where there is more than one principal, the obligations of the principal
with respect hereto shall be joint as well as several.
MISCELLANEOUS
12.0 This contract supersedes all prior negotiations and there are not other
understandings, oral or written, except as contained herein and this
contract may be amended only in writing signed by authorized
representatives of all parties.
12.1 Failure by either of the parties hereto to insist upon strict compliance
with any of the terms and conditions of this contract shall not be
considered to be a waiver of any such terms or conditions, nor shall it
mitigate against the right of either party to insist upon strict compliance
herewith at any time thereafter in connection with any term, condition,
provision, right, interest, duty or obligation contained in this contract.
12.2 Any of the parties hereto may by written notice given to the other, waive
compliance with or performance of any of the terms and conditions of this
contract which are for the benefit of such parties. Such waiver may be
general or restricted as to scope or duration to the extent set out in the
notice.
12.3 This contract shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and assigns.
12.4 All notices which may or are required to be given herein shall be in
writing and shall be well and sufficiently given if sent by prepaid
registered mail to or delivered to the recipient party at their respective
addresses as follows:
Company: Xxxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxx 000
Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx VOH IRO
Grower: RMA Enterprises Ltd.
000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X XX0
Principals: Xxx Xxxxxx
ATTACHED:
(SEE POWER OF ATTORNEY IN FAVOR OF XXXXXXX XXXXXXXXX)
Any such notice shall be deemed to have been given if delivered, and if mailed,
on the third business day following that on which it was mailed.
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IN WITNESS WHEREOF the parties hereunto have executed this agreement as of
the day and year first above written.
The Corporate Seal of Hawthorne Mountain
Vineyards was hereunto affixed in the
presence of:
/s/ "signature"
Per: ___________________________ (C/S)
(Authorized Signatory)
"Xxxxx Xxxxxxxxx"
Per: ___________________________
(Authorized Signatory)
Witness:
Address:
Occupation:
SIGNED, SEALED AND DELIVERED
on behalf of the Grower in the presence of:
/s/ "signature"
________________________________ _______________________________
Grower (if individual)
Witness: /s/ "signature"
Address: 0000 X. 0xx Xxx.
Occupation: Lawyer
The Corporate Seal of ______________________
was hereunto affixed in the presence of:
_______________________________
(Authorized Signatory)
If the Grower is a Corporation.
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SCHEDULE "A"
VARIETY ACREAGE LEGAL DESCRIPTION
------- ------- -----------------
RIESLING 3.75 XXX 0,
Xxxxxxx Xxxxx Xxxxxxxxxxx
XXXXXXXXXX 3.75 PID - 010 - 285 = 890
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SCHEDULE "B"
A. GRAPE QUALITY STANDARDS
Glossary
--------
Premium Grade - grapes whose test results place in Level 1 standards for
each of the categories of sugar, titratable acid (T.A.) and pH set out in Table
B.1.
Standard Grade - grapes whose test results place outside the Premium Grade
but within the standards for each of the minimum categories of sugar, T.A. and
pH set out in Table B.1.
Reject - grapes which fail to qualify as Standard Grade and
are below the minimum quality standards acceptable for good winemaking.
B. OTHER STANDARDS RELATED MATTERS
Yield Levels
-------------
1. It is the Company's endeavour to produce the highest quality wines possible
to raise the quality level and image of wines produced in British Columbia.
This can only be attained by acquiring grapes with optimal flavour
intensity. With this in mind, the Company wishes to encourage the Grower to
produce fruit within acceptable crop levels.
2. The Grower thereby agrees to the terms and will abide by the recommended
maximum yield per acre levels as set out in section C.6 of Schedule "C" of
this Agreement.
Sampling Procedures
--------------------
1. Sampling for determining the composition of grapes (sugar, T.A. and pH)
shall be done by the Company representative in the presence of, or with the
knowledge, of the Grower within forty- eight (48) working hours (2 full
working days) of a request by the Grower but nor more frequently than once
within a seven day period unless otherwise agreed to by the Company.
2. Sampling by variety will be site specific small parts of individuals
vineyards.
3. A fair and representative sample of not less than ten (10) clusters per
block and including not less than three (3) clusters per acre for larger
blocks will be taken and analyzed for sugar, T.A.,and pH by the Company
using standard analytic procedures. The pH meter used must be reliable to
within - 0.03 pH units. Sugar readings will be conducted using a reliable
refractometer calibrated within 0.2% units.
4. The Company representative shall report his analysis to the Grower within
twenty-four (24) hours (if picking is to commence) and indicate the date on
which the Company would require that particular block of that variety to be
harvested. If picking is not to commence, Growers can receive analysis
results upon request from the Company. The forms for reporting sugar, total
acids and pH readings will be supplied by the Company without charge.
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5. Should the Grower agree with the report of the Company representative, he
shall sign the report and such report shall constitute the basis for
payment for the said block.
6. Should the parties fail to agree on the analysis, the Grower can request
either or both of the following procedures:
a) to have a new representative sample taken in the presence of the Grower and
have this new sample analyzed in the presence of the Grower;
b) to have a new representative sample taken by an officer of the British
Columbia Ministry of Agricufture, Fisheries and Food and have It analyzed
at an authorized independent laboratory.
If the procedure in (b) is followed, the findings of this analysis shall be
final and binding on both parties. The cost of the analysis in procedure
(b) will be the Growers responsibility.
7. Should a Company fail to make an inspection within forty-eight (48) working
hours (2 full working days) after being requested to do so, the Grower can
request an officer of the BritishColumbia Ministry of Agriculture,
Fisheries and Food to take a representative sample and have it analyzed at
an authorized independent laboratory. The findings of this analysis shall
be final and binding on both parties. The cost of this analysis will be the
Company's responsibility.
Harvesting and Delivery Procedures
-------------------------------------
1. In the normal course, the Company will determine the date for the
commencement of the harvesting of each variety of grapes. This will be done
following a sampling by the field representative of the Company who will
then issue a pick release to the Grower. It is understood by the Grower and
the Company that harvesting shall be done by the hand-picking method unless
otherwise agreed to by both the Company and the Grower.
2. Notwithstanding the provision for the Company to determine the date for the
commencement of the harvest, the Grower will have the right to consult with
the Company and have input into selecting a harvest date in order that the
Grower may:
a) try to achieve the highest possible standard and maximum payment; or
b) commence harvesting in the event of danger of frost or a freeze which would
damage the crop or vines; or
c) avoid damage that the Grower is satisfied that the crop may sustain due to
disease.
Notwithstanding the above, the Company will give due consideration to the
long-term interests of both the Company and the Grower and compensate the Grower
should it request that the Grower pick early, or in the case of a late harvest
wine should it request the Grower to pick later.
In any case, the Company will give the Grower forty-eight (48) hours notice of a
requirement to commence picking. Once the picking of a variety has begun, the
Grower must complete the picking of that variety within forty-eight (48) hours.
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3. The Company will deliver containers to the Grower, or the Grower will pick
up container in accordance with Schedule "E" of this contract in a
reasonable time for the Grower to commence picking at the predetermined
picking time. Pick releases, and any agreement pertaining thereto, may be
given orally so that harvest can commence immediately but must be confirmed
in writing and hand delivered, mailed or faxed, etc., within twenty-four
(24) hours.
4. If the Grower has not completed delivery of grapes within forty-eight (48)
hours of the supply or availability of containers, the Company may reassess
the quality of the grapes and issue a new pick release which will apply to
the remaining non-harvested grapes. In the event that the delay in
completing the harvest is caused by the Company, one day will be added to
the forty-eight (48) hours harvest period for each day of delay, and the
right of the Company to issue a new pick release is suspended until that
harvest period is ended for that variety.
5. In order to maximize grape quality, every attempt will be made by the
Grower and the Company to minimize the time between harvesting and
crushing. The hauling of grapes is the responsibility of the Winery. The
harvested grapes must be available for loading and hauling within twelve
(12) hours of picking. The loading is the responsibility of the Grower and
any costs incurred by the Company as a result of delays in loading will be
the responsibility of the Grower.
6. At the time of the issuance of the first pick order, the Company shall
advise the Grower of its operating hours. It is the responsibility of the
Grower to have grapes available for delivery within the operating hours of
the Company.
Harvesting Containers
----------------------
1. Shallow bins of other containers acceptable to the Grower and the company
shall be supplied by the Company in reasonable time for the operation of
the Grower upon the issuance of a pick release. Should the Company fall to
supply the Grower with these acceptable containers required for
uninterrupted harvesting, after forty-eight (48) hours written notice (such
notice to be directed to the Company at its principal location, the field
man, or other designated pick up locations and delivered personally, by
special delivery post, telegram or fax), the Grower may rent or otherwise
acquire such reasonable number of the same size containers as may be
required for the harvest, and all costs incurred by the Grower thereby
shall be payable by the Company.
2. It is the Grower's responsibility to have unused bins retumed to the
Company by October 31st, of each year. These may be returned with the last
load of grapes picked up by the Company. The Grower may be charged for any
containers not accounted for at the end of a crop year at current
replacement costs.
3. The Company retains the right to insist on the use by the Grower of bin
liners provided at the Company's cost to the Grower.
4. The Grower agrees that his picking containers (i.e. buckets, bins, etc.)
will be cleaned at the end of each day to avoid bacterial growth and
contamination of grapes.
5. The harvest bins supplied by the Company to the Grower shall be clean and
in a state of good repair. The Grower agrees that he is responsible for any
damage to the harvest containers while they are on his property. It is also
the responsibility of the Grower to have proper forklift
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equipment to safely load and unload harvest containers on his property.
For greater certainty, it shall be the responsibility of the Grower to
unload empty harvest bins and to load grapes on the property of the
Grower, and the Grower shall carry out all loading and unloading
which is the responsibility of the Grower in a prompt and efficient
manner.
Assembly or Pick Up Areas
-----------------------------
The prices to which the Grower is entitled, based upon the grape quality
standards achieved under the Grape Purchase Contract, shall be payable F.O.B.
the Grower's vineyard.
Diseased or Damaged Fruit
----------------------------
1. A bin or gondola may be rejected if material other than grapes (MOG) i.e.
leaves, rocks, etc., exceeds two (2%) percent of the weight or volume of
that container. The Grower agrees that if the Company suffers mechanical
damage or its personnel injured as a result of material other than grapes
(MOG) coming from the Grower's crop, then the Grower will be liable for
such damages and costs.
2. A bin or gondola may be rejected if a representative sampling of grapes
from that container yields an analysis greater than 0.12 grams per litre or
volatile acidity expressed as acetic acid. Volatile acidity shall be
determined by using the cash volatile distillation method. All questionable
volatile acids shall be re-analyzed using a 0.01 normal NaOH solution for
titration. All volatile acid readings will be corrected for free sulphur
before reporting. The Grower must be informed of the possibility of
rejected fruit within four (4) winery working hours of its arrival at the
Company or designated Company depot.
3. A shipment of grapes may be rejected if diseased, infested, and/or moldy
fruit exceeds four (4%) percent of the weight of the shipment. The
percentage of diseased or damaged fruit will have to be determined by
assessing a representative sample from that shipment in the presence of the
Grower.
4. The picking and shipment of frozen grapes will be by mutual consent between
the Grower and the Company. When the harvest of frozen grapes is allowed,
the technical conditions for handling must be defined and adhered to, in
order to minimize the decline in flavour that occurs with freezing and
thawing of grapes.
5. In the event of a killing frost before maturity is reached by the grapes,
the Company reserves the right to refuse to accept grapes that are below
minimum standard levels.
Use of Sprays & Fertilizers
-------------------------------
The application of sprays and fertilizers shall only be carried out in
accordance with the recommendations in the most current edition of the Grape
Production Guide. Each Grower will keep records identifying the type and
quantity of spray and fertilizer applied and date of application, and will make
such records available on request.
Accounting
----------
1. The Company shall, not later than November 30" in each year, send to the
Grower and the British Columbia Wine Institute, a detailed statement
showing the quantity of each variety of
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grapes received from the Grower, the date of receipt, the sugar, T.A. and
pH test results for those grapes, and the total payment made to the Grower
in respect of each variety of grapes according to the classifications set
out in Schedule "B".
2. The Company shall deduct from any money due to the Grower in respect of
grapes purchased from that Grower the amount of the levies declared by the
British Columbia Wine Institute to be payable as a service charge by the
Grower. The deduction shall be based upon the levies established on or
before September 15th of each year and shall be payable to the British
Columbia Wine Institute by the Company on behalf of the Grower, not later
than November 30th in each year.
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SCHEDULE "C"
PRICING DETERMINATION
REFERENCE PRICE DETERMINATION
C.1 Using the grape quality standards in Table B.1 achieved by the quantity of
each variety of grapes purchased, the percentages applicable under C.2 of
this Schedule "C", shall be determined. Utilizing that percentage, a price
per ton shall be calculated for each variety.
C.2 Premium grade grapesare those grapes which fall within the premium quality
parameters or windows as laid out in Table B.I for Sugar, Titratable Acids
(T.A.), and pH.
a) If a variety falls within all the premium quality windows, it is rated as
premium grade and will receive the maximum price per ton for that variety.
b) if a variety falls in the premium quality windows for two of the three
quality measures and third is within the minimum "standard grade" windows,
the Grower will be paid the maximum price per ton less a ton (10%) percent
penalty.
c) if a variety falls in only one of the premium quality windows and the other
two quality standards are within the minimum "standard grade" level, the
Grower will be paid the maximum price per ton less a twenty (20%) percent
penalty.
Standard Grade Grapesare those grapes that fall within the "standard" quality
windows as laid out in Table B. I for Sugar, Titratable Acids (T.A.), and pH.
d) If a variety falls outside the minimum premium quality windows for all
three quality measures but is within the minimum acceptable "standard
grade" level for all three measurements, the Grower will be paid the
maximum price per ton less a thirty-five (35%) percent penalty.
C.3 If any of the quality standards for a particular variety are outside the
minimum parameters for "standard grade" grapes, then the Company is under
no obligation to purchase the grapes from the Grower for that particular
vintage.
C.4 The maximum price to be paid by variety for the crop years 2001 - 2003 is
laid out in Sub-section (C.5) of Schedule C.
a) All future negotiations will be agreed to on a three (3) year fixed base,
the first commencing on or before December 1, 2003 for the crop years 2004,
2005 and 2006.
b) It is agreed by the Company and the Grower that the increase or decrease
will not fluctuate more than fffteen (15%) percent (up or down) from the
previous year's reference price.
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C.5 The maximum price for each variety of Premium Grapes for the 2001 TO 2003
crop years inclusive will be:
Variety Dollars/Ton Dollar/Ton
-------------------- ----------
RIESLING 1200.00
CHARDONNAY 1350.00
ALL PLANTINGS AND/OR CHANGES IN THE ABOVE PLANTING SCHEDULE MUST BE BY MUTUAL
AGREEMENT.
C.6 As indicated in Schedule "B" it is the Company's desire to encourage the
production of the highest quality grapes by placing percentage pricing
penalties to be deducted from the price calculated under Section C1, C2 and
C3, for excessive yields per plant in order to produce the highest possible
quality wine. The Grower and the Company hereby agree that the table listed
below will constitute the schedule for percentage pricing penalties per
plant by variety in determining the price paid to the Grower.
Yield Per Vine - lbs.
Penalty Percentages
Variety Maximum 5% 15% 25% 40%
------- ------- -- --- --- ---
Chardonnay 10 11 12 13 14
Riesling 10 11 12 13 14
By way of clarification, assuming there were 1000 vines per acre and the maximum
price for a particular grape variety is $1,200 per ton, at 5 tons per acres (10
lbs/vine) the Grower would receive $1,200 per ton assuming the other quality
factors are all in the premium category. At 6 tons per acre (12 lbs./vine), the
Grower would receive $1,020 per ton.
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TABLE B.1
GRAPE STANDARDS
SUGAR
VARIETY GRADE DEGREES BRIX TRITRATABLE ACIDS PH
------- ------------ ------------- ----------------- -----------
Chardonnay (1) Premium 20.0 - 23.0 8.00 - 10.00 3.20 - 3.40
(2) Standard 18.0 - 19.9 10.00 - 12.00 3.00 - 3.19
(3) Standard 23.1 - 25.0 5.90 - 7.99 3.41 - 3.55
Pinot Blanc (1) Premium 20.0 - 23.0 8.00 - 10.00 3.20 - 3.40
(2) Standard 18.0 - 19.9 10.00 - 12.00 3.00 - 3.19
(3) Standard 23.1 - 25.0 5.90 - 7.99 3.41 - 3.55
Sauvignon Blanc (1) Premium 20.0 - 23.0 8.00 - 10.00 3.20 - 3.40
(2) Standard 18.0 - 19.9 10.00 - 12.00 3.00 - 3.19
(3) Standard 23.1 - 25.0 5.90 - 7.99 3.41 - 3.55
Semillion (1) Premium 20.0 - 23.0 8.00 - 10.00 3.20 - 3.40
(2) Standard 18.0 - 19.9 10.00 - 12.00 3.00 - 3.19
(3) Standard 23.1 - 25.0 5.90 - 7.99 3.41 - 3.55
Riesling (1) Premium 20.0 - 23.0 7.50 - 9.50 3.10 - 3.35
(2) Standard 18.0 - 19.9 9.51 - 11.50 3.00 - 3.19
(3) Standard 23.1 - 25.0 5.50 - 7.49 3.41 - 3.55
Gewurztraminer (1) Premium 20.0 - 22.0 7.75 - 9.50 3.15 - 3.30
(2) Standard 18.0 - 19.9 9.51 - 11.50 3.00 - 3.14
(3) Standard 23.0 - 25.0 6.00 - 7.74 3.31 - 3.55
Ehrenfelser (1) Premium 20.5 - 22.9 7.75 - 9.50 3.10 - 3.40
(2) Standard 18.0 - 20.4 9.51 - 11.50 2.90 - 3.09
(3) Standard 23.0 - 25.0 5.50 - 7.74 3.41 - 3.55
Perle of Csaba (1) Premium 18.0 - 22.0 5.00 - 7.50 3.25 - 3.45
(2) Standard 17.0 - 17.9 7.51 - 11.00 3.10 - 3.24
(3) Standard 22.1 - 25.0 3.00 - 4.99 3.46 - 3.60
Morio Muscat (1) Premium 18.0 - 22.0 7.00 - 10.00 3.10 - 3.40
(2) Standard 17.0 - 17.9 10.01 - 12.00 2.90 - 3.09
(3) Standard 22.1 - 25.0 5.00 - 6.99 3.41 - 3.55
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Zala (1) Premium 18.0 - 22.0 7.00 - 10.00 3.10 - 3.40
(2) Standard 16.9 - 17.9 10.01 - 12.00 2.90 - 3.09
(3) Standard 22.1 - 25.0 5.00 - 6.99 3.41 - 3.55
Xxxxxxxx Sylvaner (1) Premium 18.0 - 22.0 3.00 - 6.50 3.40 - 3.80
(2) Standard 16.9 - 17.9 1.51 - 7.50 3.25 - 3.39
(3) Standard 22.1 - 25.0 2.00 - 2.99 3.81 - 4.00
Merlot (1) Premium 20.9 - 23.5 7.80 - 10.00 3.25 - 3.45
(2) Standard 18.0 - 20.8 10.01 - 12.00 2.90 - 3.24
(3) Standard 23.6 - 26.0 5.00 - 7.79 3.46 - 3.55
Cabernet (1) Premium 21.9 - 26.5 7.80 - 10.00 3.25 - 3.45
Sauvignon (2) Standard 19.0 - 21.8 10.01 - 12.00 2.90 - 3.24
(3) Standard 24.6 - 27.0 5.00 - 7.79 3.46 - 3.55
Cabernet Franc (1) Premium 20.9 - 23.5 7.80 - 10.00 3.25 - 3.45
(2) Standard 18.0 - 20.8 10.01 - 12.00 2.90 - 3.24
(3) Standard 23.6 - 26.0 5.00 - 7.79 3.46 - 3.55
Pinot Noir (1) Premium 20.9 - 23.5 7.80 - 10.00 3.25 - 3.45
(2) Standard 18.0 - 20.8 10.01 - 12.00 2.90 - 3.24
(3) Standard 23.6 - 26.0 5.00 - 7.79 3.46 - 3.55
Other Red (1) Premium 20.9 - 23.5 7.80 - 10.00 3.25 - 3.45
Vinifera* (2) Standard 18.0 - 20.8 10.01 - 12.00 2.90 - 3.24
(3) Standard 23.6 - 26.0 5.00 - 7.79 3.46 - 3.55
Red & White (1) Premium 18.5 - 20.5 9.00 - 11.00 3.00 - 3.25
Vinifera for (2) Standard 17.0 - 18.4 11.01 - 13.99 2.85 - 2.99
Sparkling Wine (3) Standard 20.6 - 21.5 7.50 - 8.99 3.46 - 3.55
Red Vinifera may be adjusted at a later date as improved data on the following
varieties is collected. These viniferas include Merlot, Cabernet Sauvignon,
Cabernet Franc and Pinot Noir.
These standards do not apply to specialty wines such as ice wine or late harvest
wines which will have to be mutually agreed upon between the Grower and the
Company.
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