-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EUyTSDIxuQjZyqn1QFVNFVndg6EMny1R8l6adWp4bfvENaR4AWvnkCiUpp1DsG/k /sGy9yXOdhzhn6tY2Lfirw== 0000897069-98-000382.txt : 19980716 0000897069-98-000382.hdr.sgml : 19980716 ACCESSION NUMBER: 0000897069-98-000382 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980701 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980715 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHLAND CRANBERRIES INC /WI/ CENTRAL INDEX KEY: 0000818010 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 391583759 STATE OF INCORPORATION: WI FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-16130 FILM NUMBER: 98666767 BUSINESS ADDRESS: STREET 1: 800 FIRST AVE SO STREET 2: P O BOX 8020 CITY: WISCONSIN RAPIDS STATE: WI ZIP: 54494 BUSINESS PHONE: 7154244444 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ____________________ Date of Report (Date of earliest event reported): July 1, 1998 NORTHLAND CRANBERRIES, INC. (Exact name of registrant as specified in its charter) Wisconsin 0-16130 39-1583759 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 800 First Avenue South, P.O. Box 8020, Wisconsin Rapids, Wisconsin 54495-8020 (Address of principal executive offices, including zip code) (715) 424-4444 (Registrant's telephone number) Item 2. Acquisition or Disposition of Assets On July 1, 1998, Northland Cranberries, Inc. ("Northland") consummated the acquisition through a subsidiary ("Acquisition Sub") of the business and substantially all of the assets and certain liabilities ("the Acquisition") of Minot Food Packers, Inc. a New Jersey corporation ("Minot"). The Acquisition was effected pursuant to an Asset Purchase Agreement, dated May 20, 1998 ("Asset Purchase Agreement") by and among Northland, Minot and Michael A. Morello, the sole shareholder of Minot ("Morello"). The Asset Purchase Agreement is filed as an exhibit to this Current Report on Form 8-K and incorporated by reference herein. Minot, located in Bridgeton, New Jersey, produces, markets, sells and distributes primarily cranberry private label products, including cranberry sauce, as well as a wide variety of non-cranberry private label juice products. Pursuant to the Asset Purchase Agreement, (i) Acquisition Sub acquired Minot's real property, inventory, personal property, trade rights, contracts, computer software, licenses, notes and accounts receivables and other assets for a purchase price consisting of (a) $35.375 million in cash (with $3 million thereof paid into an indemnity escrow fund and approximately $12.5 million thereof (subject to adjustment) used to pay certain bank debt of Minot at the closing), (b) 136,986 shares of Northland unregistered Class A Common Stock (all of which will also be deposited in the indemnity escrow fund), and (c) the assumption by Acquisition Sub of certain liabilities of Minot; (ii) Minot and Morello agreed to a five-year covenant not to compete in the private label juice and cranberry sauce business; and (iii) Minot and Morello agreed to indemnify Northland and Acquisition Sub for any breach by Minot of Minot's representations and warranties contained therein and for liabilities specifically retained by Minot under the Asset Purchase Agreement. The purchase price paid by Northland in the Acquisition was determined on the basis of arm's length negotiations between the parties. Northland has no present plans to make significant changes to Minot's business and plans to continue the business in its present form while integrating Minot's operations with and into Northland. The obligations of Minot and Morello to indemnify Northland and Acquisition Sub under the Asset Purchase Agreement for breaches of representations and warranties are subject to (i) a time limitation expiring November 20, 1999 for most representations and warranties; (ii) a $400,000 aggregate minimum threshold for damages subject to the indemnification; and (iii) an aggregate maximum amount of indemnification claims equal to the indemnity escrow funds. Minot and Morello also agreed to retain responsibility for, and to indemnify Northland and Acquisition Sub against, the cleanup and remediation of certain existing environmental contamination at Minot's production facility and to pay all costs and expenses related thereto pursuant to an environmental indemnity agreement entered into by and among Northland, Acquisition Sub, Minot and Morello. Additionally, at closing, the following events took place: (i) an Employment Agreement was entered into by and between Morello, Minot and Northland pursuant to which Morello will be employed as President of Minot for a period of three years at an annual salary of $190,000 plus participation in Northland's incentive bonus plan; and (ii) a Registration Rights Agreement was entered into by and between Morello and Northland pursuant to which Morello will have the "piggy back" right to register his Northland Class A Common Stock as part of certain future registrations initiated by Northland under the Securities Act of 1933. Pursuant to a registration statement on Form S-3 filed with the Securities and Exchange Commission on May 20, 1998 (Reg. No. 333-53173) and the related final prospectus dated June 25, 1998, Northland sold 5,000,000 shares of its Class A Common Stock at $14.00 per share in an underwritten public offering (the "Offering") to provide financing for the Acquisition on June 30, 1998. Northland used $35.375 million of the net proceeds of the Offering to pay the cash portion of the purchase price of the Acquisition. Item 7. Financial Statements and Exhibits. (a) Financial statements of Minot and pro forma financial information required by this Item 7 will be filed by amendment within sixty (60) days of the date hereof. (c) Exhibits (2) Asset Purchase Agreement, dated as of May 20, 1998, by and among Northland Cranberries, Inc., Minot Food Packers, Inc. and Michael A. Morello [Incorporated by reference to Exhibit 2.0 to Northland's Registration Statement on Form S-3 (Reg. No. 333-53173)]. 1 (10.1) Registration Rights Agreement, dated as of July 1, 1998 by and between Northland Cranberries, Inc. and Michael A. Morello. (10.2) Employment Agreement dated as of July 1, 1998, by and among Northland Cranberries, Inc., Minot Food Packers, Inc. and Michael A. Morello. -------------- 1 The schedules and exhibits to this document are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such schedule or exhibit to the Securities and Exchange Commission upon request. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NORTHLAND CRANBERRIES, INC. Date: July 14, 1998 By: /s/ John A. Pazurek John A. Pazurek Vice President-Finance, Treasurer and Chief Financial Officer NORTHLAND CRANBERRIES, INC. EXHIBIT INDEX TO FORM 8-K Report Dated July 1, 1998 Exhibit (2) Asset Purchase Agreement, dated as of May 20, 1998, by and among Northland Cranberries, Inc., Minot Food Packers, Inc. and Michael A. Morello [Incorporated by reference to Exhibit 2.0 to Northland's Registration Statement on Form S-3 (Reg. No. 333-53173)]. 1 (10.1) Registration Rights Agreement, dated as of July 1, 1998 by and between Northland Cranberries, Inc. and Michael A. Morello. (10.2) Employment Agreement dated as of July 1, 1998, by and among Northland Cranberries, Inc., Minot Food Packers, Inc. and Michael A. Morello. -------------- 1 The schedules and exhibits to this document are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such schedule or exhibit to the Securities and Exchange Commission upon request. EX-10.1 2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of July 1, 1998, by and among NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Northland"), and Fargo Acquisition Corporation, a New Jersey corporation ("Company") and Michael A. Morello, the sole shareholder of Company ("Morello"). RECITALS: A. Pursuant to the Asset Purchase Agreement dated as of May 20, 1998 (the "Purchase Agreement") by and among Northland, Company and the Shareholder, substantially all the assets and certain liabilities of Company are being acquired by a wholly-owned subsidiary of Northland. Capitalized defined terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Purchase Agreement. B. Pursuant to the Purchase Agreement, as part of the consideration for the assets of Company, the Company is entitled to receive, 136,986 shares ("Northland Shares") of Northland Class A Common Stock, $.0l par value (collectively, "Northland Class A Common Stock"), delivered to the Escrow Agent under the Escrow Agreement ("Escrow Stock"). C. It is contemplated that the Company may liquidate and dissolve and may distribute to Morello the shares of Northland Stock received under the Purchase Agreement (and its interests in the Northland Class A Common Stock deposited in the escrow pursuant to the Escrow Agreement), all in connection with the complete liquidation and dissolution of the Company. The term "Shareholder" as used in this Agreement shall mean Company prior to the distribution of the Northland Class A Common Stock to Morello and shall mean Morello following such distribution by the Company. D. Northland and the Shareholder desire to allow the Shareholder to publicly sell the Northland Shares pursuant to certain registration statements which may be filed by Northland under the Securities Act of 1933, as amended ("Act"), pursuant to the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and promises herein made and mutual benefits to be derived from this Agreement, it is hereby agreed as follows: 1. Piggy Back Registration Rights. (a) If, at any time during the period commencing on the first anniversary date hereof and evidencing on the second anniversary date hereof ("Second Anniversary Date"), Northland shall determine to register shares of Northland Class A Common Stock under the Act for the purpose of effecting an underwritten public offering thereof for cash, Northland shall give written notice thereof to the Shareholder; provided, however, that Northland shall not be required to give such notice to the Shareholder if the proposed registration (i) is not to be made on Securities and Exchange Commission ("Commission") Forms S-1, S-2 or S-3 (or the successors to such forms); and (ii) is (A) a registration of securities other than Northland Class A Common Stock; (B) a registration of a stock option, incentive compensation, profit sharing or other employee benefit plan or of securities issued or issuable pursuant to any such plan; or (C) a registration of securities proposed to be issued in exchange for securities or assets of, or in connection with a merger, share exchange, consolidation or other business combination involving, another corporation or entity. (b) Subject to paragraph (c) of this Section 1, upon receiving any notice required under paragraph (a) of Section 1, if the Shareholder desires to participate in a registration statement, then the Shareholder shall provide written notice of such desire to Northland on the form attached as Exhibit A ("Piggy Back Registration Request") within 10 days after the date of Northland's notice. Such Piggy Back Registration Request shall be accompanied by (i) the Power of Attorney attached as Exhibit B, duly executed by the Shareholder; (ii) the Letter of Transmittal and Custody Agreement attached as Exhibit C, duly executed by such Shareholder; (iii) the stock certificates representing the Northland Shares requested to be registered by the Shareholder, accompanied by stock powers duly executed in blank by or on behalf of the Shareholder; and (iv) any other documents necessary to facilitate the Shareholder's participation in such registration (collectively, "Registration Documents"). Northland will use its best efforts to register all of the Northland Shares requested to be registered by the Shareholder on such Piggy Back Registration Request concurrently with the registration of Northland Class A Common Stock by Northland on its own behalf and on the same terms and conditions of offering and sale as contemplated and agreed to by Northland ("Piggy Back Registration"). In the event the Shareholder requests to participate in any Piggy Back Registration, the Shareholder must sell the Northland Shares subject thereto on the same terms and conditions of offering and sale (including, without limitation, purchase price and underwriting discount per share, but excluding any differing allocation agreed to by Northland with respect to any over-allotment option granted) as agreed to by Northland in connection with its sale of Northland Class A Common Stock thereunder. (c) Northland shall not be required to include any Northland Shares which have been requested to be registered by the Shareholder in any Piggy Back Registration under this Section 1 if Northland believes that, in its discretionary reasonable judgment, the inclusion of Northland Shares proposed to be included by the Shareholder would materially interfere with the timing, pricing or marketing of the Northland Class A Common Stock being offered by Northland. Northland may, in its discretionary judgment for any reason whatsoever and without the consent the Shareholder, withdraw any such registration statement and abandon any proposed Piggy Back Registration in which the Shareholder has requested to participate. 2. Expenses. If the Shareholder participates in any Piggy Back Registration the Shareholder shall pay (a) the expenses of any attorneys, accountants or other advisors or professionals which the Shareholder engages in connection with a sale of Northland Shares pursuant to any Piggy Back Registration and (b) all underwriting or brokerage commissions and discounts, if any, associated with the Northland Shares being sold by the Shareholder pursuant to any Piggy Back Registration. Northland shall pay all other costs and expenses incurred by it associated with any Piggy Back Registration (including, without limitation, all legal and accounting fees and expenses, printing costs and filing fees incurred by Northland). 3. Holdback Agreement: Further Cooperation; Confidentiality. (a) By execution of this Agreement, the Shareholder hereby agrees that, prior to the Second Anniversary Date, he will not offer, sell or otherwise dispose of any Northland Shares owned by the Shareholder, in the open market, during the period when he has knowledge that a Northland registration statement (other than those, such as Form S-8 and Form S-4, as to which notice need not be given to the Shareholder by Northland under Section 1(a) hereof or nonunderwritten shelf offerings under Rule 415 under the Act and pursuant to which the Shareholder is not selling Northland Shares) is contemplated or pending or within 90 days after the effective date with the Commission of any such Northland registration statement relating to a public offering or distribution of Northland Class A Common Stock, other than as allowed under this Agreement. (b) In connection with any Piggy Back Registration, the Shareholder will furnish or cause to be furnished such further information with respect thereto, and render such further cooperation, to Northland, any underwriter and any broker-dealer as Northland, such underwriter or broker-dealer may request. The Shareholder hereby agrees to execute and enter into customary underwriting documents in connection therewith as are requested by the managing underwriter of such offering or by Northland; provided, however, that the Shareholder's obligations to indemnify any persons in connection with such registration statement shall be limited to the matters set forth in Section 4 of this Agreement, and, provided, further that such documents shall include the indemnification of the Shareholder by Northland provided for in Section 4 of this Agreement. (c) Upon receiving any notice from Northland hereunder respecting any contemplated or pending registration statement of Northland and until public disclosures by Northland thereof, the Shareholder shall strictly maintain the confidentiality of such contemplated or pending registration statement and shall make no public disclosures or comments with respect thereto. 4. Indemnification in Connection with Registration Statements. In connection with any Piggy Back Registration in which the Shareholder participates pursuant to this Agreement, the Shareholder shall indemnify and hold harmless Northland and any underwriters of such offering and their respective officers, directors and controlling persons from any and all loss, liability, claims, damages and expenses (including reasonable attorneys fees and disbursements) incurred by them insofar as such losses, liabilities, claims, damages and expenses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement or prospectus covering the Northland Shares to be sold or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Shareholder shall only be liable in any such case to the extent that any such loss arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with information relating to the Shareholder as furnished to Northland or any underwriter by or on behalf of the Shareholder expressly for use in the registration statement or prospectus covering the Northland Shares to be sold. Except to the extent set forth in the foregoing sentence, Northland shall indemnify and hold the Shareholder harmless from any and all loss, liability, claims, damages and expenses (including reasonable attorneys fees and disbursements) incurred by Shareholder in connection with any Piggy Back Registration, insofar as such losses, liabilities, claims, damages and expenses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact furnished by Northland or the underwriters for use in such registration statement or prospectus related thereto or arise out of or are based upon the omission or alleged omission to state therein a material fact pertaining to Northland or the underwriters and required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. 5. Additional Matters. (a) This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of Wisconsin applicable to contracts made and performed in Wisconsin, regardless of the fact that individuals who are a party hereto may be or become a resident of a state or jurisdiction other than Wisconsin. (b) Except as otherwise provided in this Agreement, all notices, requests, demands and other communications hereunder shall be deemed to be duly given if delivered by hand or if mailed by certified or registered mail with postage prepaid: (i) If to Northland: to Northland Cranberries, Inc., 800 First Avenue South, P.O. Box 8020, Wisconsin Rapids, Wisconsin 54495-8020, Attention: David J. Lukas (with a copy to: Steven R. Barth, Esq., Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202). (ii) If to the Shareholder: to Michael A. Morello, 3161 Silverwood Lane, Vineland, New Jersey 08361 (with a copy to: John F. Bales III, Morgan, Lewis & Bockius LLP, 2000 One Logan Square, Philadelphia, PA 19103-6993. (iii) Any person entitled to receive notice hereunder may change his address at which notice is to be received or designated another person to receive notice by giving notice to all other parties and persons entitled to receive notice in the manner provided in this Section. (c) Along with the Purchase Agreement and the Exhibits thereto and the Escrow Agreement, this instrument embodies the entire agreement between the parties hereto with respect to the transactions contemplated herein, and supersedes all prior agreements and understandings between the parties. (d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. Executed signature pages may be removed from counterpart agreements and attached to one or more fully executed copies of this Agreement. (e) Except as set forth below, this Agreement shall not be assigned by the Shareholder without the written consent of Northland and any attempted assignment without such consent shall be null and void and without legal effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto, any successor and assign of Northland and, if the consent required by this Section is properly secured, the successors and assigns of the Shareholder. Upon any assignment hereunder, the assignee shall become a "Shareholder" for all purposes under this Agreement. Any assignment in violation of this Section 5(e) shall be null and void for all purposes and the party attempting to effect such an assignment shall be jointly and severally liable for any claims against or incurred by the nonassigning parties as a result of such attempted assignment. (f) Until the second anniversary hereof, provided Minot is no longer an affiliate (as defined in Rule 144 of the Act) of Northland, Northland will make available to Shareholder such information in its possession as shall be necessary to enable Shareholder to make sales of Northland Class A Common Stock under Rule 144. Northland will, at the request of Shareholder, upon receipt therefrom of a certificate certifying (a) that Shareholder has held such Northland Class A Common Stock for a period of not less than two consecutive years and (b) that Minot has not been an affiliate of Northland for more than 90 preceding days, remove from the certificates representing such Northland Class A Common Stock that portion of any restrictive legend which related to the registration provision of the Act. (g) The headings used in this Agreement are for convenience only and shall not constitute a part of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly as of the day and year first above written. NORTHLAND CRANBERRIES, INC. ("Northland") By: /s/ John Swendrowski John Swendrowski Chairman of the Board and Chief Executive Officer MICHAEL A. MORELLO ("Shareholder") By: /s/ Michael A. Morello Michael A. Morello Exhibit A to Registration Rights Agreement PIGGY BACK REGISTRATION REQUEST FORM CERTIFIED MAIL RETURN RECEIPT REQUESTED Northland Cranberries, Inc. 800 First Avenue South P.O. Box 8020 Wisconsin Rapids, WI 54495-8020 Attention: David J. Lukas Gentlemen and/or Ladies: Reference is made to that certain Registration Rights Agreement, dated as of July 1, 1998 ("Registration Rights Agreement"), by and among Northland Cranberries, Inc. ("Company"), the undersigned and Minot Food Packers, Inc. and to the notice dated ___________ of the Company to the undersigned, receipt of which is hereby acknowledged, regarding the proposed registration and public offering of shares of the Company's Class A Common Stock (the registration, together with the related offering, the "Offering"). The undersigned agrees to keep all mailers relating to the offering strictly confidential. The undersigned hereby (indicate choice by checking one box only): 1. [ ] Requests, pursuant to Section l(b) of the Registration Rights Agreement, the inclusion in the Offering of up to __________ (fill in appropriate number of shares of Company Class A Common Stock so requested for inclusion) shares of Company Class A Common Stock held by the undersigned. Accompanying the request are (i) the Power of Attorney attached as Exhibit B to the Registration Rights Agreement, duly executed by the undersigned; (ii) the Letter of Transmittal and Custody Agreement attached as Exhibit C to the Registration Rights Agreement, duly executed by the undersigned (including the attached stock power) duly executed by the undersigned; and (iii) the undersigned's stock certificate(s) representing the shares of Company Class A Common Stock requested to be included in the Offering. 2. [ ] Does not request inclusion of the undersigned's shares of Company Class A Common Stock in the offering. Very truly yours, Sign: ________________________ Name:_______________________ Date:________________________ Business Phone:________________ Home Phone:__________________ cc: Steven R. Barth Foley & Lardner 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 NORTHLAND CRANBERRIES, INC. STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto __________________ (________) shares of the Class A Common Stock of Northland Cranberries, Inc., standing in my (our) name(s) on the books of said Corporation represented by Certificate(s) No(s). ____ herewith, and does hereby irrevocably constitute and appoint Harris Trust & Savings Bank attorney to transfer the said stock on the books of said Corporation and full power of substitution in the premises. Dated: ____________ Signature: Name: Exhibit B to Registration Rights Agreement NORTHLAND CRANBERRIES, INC. Common Stock (par value $.01 per share) POWER OF ATTORNEY OF SELLING SHAREHOLDER The undersigned shareholder ("Shareholder") of Northland Cranberries, Inc., a Wisconsin corporation (the "Company"), is a party to a Registration Rights Agreement with the Company dated as of July 1, 1998 ("Agreement") pursuant to which the Company has provided certain rights to the Shareholder to publicly sell his shares of Class A Common Stock of the Company received in connection with that certain Purchase Agreement by and among the Company, Minot Food Packers, Inc., a New Jersey corporation, and the Shareholder pursuant to certain registration statements which may be filed by the Company under the Securities Act of 1993, as amended ("Act"), subject to the terms of the Agreement. In order to facilitate the sale of his Class A Common Stock under the terms of the Agreement, the Shareholder is executing this Power of Attorney and is concurrently executing and delivering a Letter of Transmittal and Custody Agreement ("Custody Agreement") pursuant to which certificates for at least the number of shares of Class A Common Stock set forth opposite the name of the Shareholder on the signature page hereof are initially being deposited with Harris Trust & Savings Bank to hold such certificates as custodian ("Custodian"). 1. In connection with the foregoing, the Shareholder hereby appoints [__________] and [__________], acting together and not alone, the attorneys-in-fact (collectively, the "Attorneys-in-Fact" and individually, an "Attorney-in-Fact") of the Shareholder with full power and authority in the name of, and for and on behalf of, the Shareholder: (a) to do all things necessary under the Agreement to sell up to the number ("Maximum Number") of shares ("Shares") of Class A Common Stock set forth opposite the name of the Shareholder on the signature page hereof and represented by the certificates being deposited herewith by or on behalf of the Shareholder with the Custodian; (b) for the purpose of effecting such sales, to negotiate, execute and deliver any underwriting agreement (and any amendment or supplement thereto), among the Company, the Shareholder and any underwriters which are a party thereto; provided, however, that the Shareholder must sell Class A Common Stock included in any Piggy Back Registration (as defined in the Agreement) on the same terms and conditions of offering and sale (including, without limitation, purchase price and underwriting discount per share, but excluding any differing allocation agreed to by the Company with respect to any over allotment option granted) as agreed to by the Company in connection with its sale of common stock thereunder. (c) to give such orders and instruments to Northland, any underwriter, any broker-dealer or the Custodian or any other person as the Attorneys-in-Fact, acting together and not alone, may determine, including, without limitation, orders or instructions for the following: (i) the transfer on the books of the Company of the Shares in order to effect their sale (including the names in which new certificates for the Shares are to be issued and the denominations thereof); (ii) the delivery of the certificates for the Shares against receipt of the purchase price therefor; (iii) the payment out of the proceeds of any sale of the Shares to Northland or any underwriters of all commissions, fees and expenses as are to be borne by the Shareholder in accordance with the terms of the Agreement; (iv) the remittance of the net balance of the proceeds from any sale of the Shares to be sold in accordance with such payment instructions as the Attorneys-in-Fact may have received from the Shareholder; and (v) the return to the Shareholder of new certificates representing the number of shares of Class A Common Stock, if any, represented by certificates deposited with the Custodian which are in excess of the number of Shares actually sold; (d) to join the Company, if necessary, in withdrawing any registration statement if the Company should desire to withdraw such registration; (e) to retain legal counsel, accountants or other advisors in connection with any and all matters referred to herein; (f) to make, execute, acknowledge and deliver all other contracts, orders, receipts, notices, requests, instructions, certificates, letters and other writings, including communications to the Commission (including a request or requests for acceleration of the effective date of any registration statement) and state securities law authorities, any amendments to any underwriting agreement, and any certificates and other documents required to be delivered by or on behalf of the Shareholder pursuant to the Agreement or any underwriting agreement or the Custody Agreement, and specifically to execute on behalf of the undersigned stock powers and transfer instructions relating to the Shares to be sold by the undersigned Shareholder, and in general to do any and all things and to take any and all actions which the Attorneys-in-Fact, acting together and not alone, may consider necessary or proper in connection with, or to carry out and comply with, all terms and conditions of the Agreement or any underwriting agreement and the Custody Agreement with respect to the aforesaid sale of Shares. 2. This Power of Attorney and all authority conferred hereby are granted and conferred subject to the interests of the Company, any underwriters, and any broker-dealer; and, in consideration of those interests and for the purpose of completing the transactions contemplated by the Agreement and this Power of Attorney, this Power of Attorney and all authority conferred hereby, to the extent enforceable by law, shall be deemed coupled with an interest and be irrevocable and not subject to termination by the Shareholder or by operation of law, whether by the death or incapacity of the Shareholder, or by the occurrence of any other event, and the obligations of the Shareholder under the Agreement similarly are not to be subject to termination. If the Shareholder should die or become incapacitated or if any other such event should occur before the delivery of the Shares to be sold by the Shareholder under the Agreement, then the certificates representing such Shares shall be delivered by or on behalf of the Shareholder in accordance with the terms and conditions of the Agreement and any underwriting agreement and of the Custody Agreement, and actions taken by the Attorneys-in-Fact, acting together and not alone, pursuant to this Power of Attorney and by the Custodian under the Custody Agreement shall be as valid as if such death, incapacity, or other event had not occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, acting together and not alone, shall have received notice of such death or incapacity or other event. 3. The Shareholder ratifies all that the Attorneys-in-Fact shall do by virtue of his Power of Attorney. All actions must be taken by the Attorneys-in-Fact acting together and not alone. 4. The Shareholder agrees to hold the Attorneys-in-Fact, jointly and severally, free and harmless from any and all loss, damage, liability or expense incurred in connection herewith, including reasonable attorney's fees and costs, which they, or either of them acting alone, may sustain as a result of any action or inaction taken or not taken in good faith hereunder. Dated: ____________ Very truly yours, Signature of Seller 1 Michael A. Morello No. of Shares Requested For Registration: ___________________ --------------- 1 You should sign in exactly the same manner as the shares of Class A Common Stock of the Company owned by you are registered and execute a separate Agreement for each different form in which shares are registered. Exhibit C to Registration Rights Agreement NORTHLAND CRANBERRIES, INC. Class A Common Stock (par value $.0l per share) LETTER OF TRANSMITTAL AND CUSTODY AGREEMENT Harris Trust and Savings Bank 111 W. Monroe St. P.O. Box 755 Chicago, IL 60690 Gentlemen: Pursuant to the terms of the Registration Rights Agreement dated as of July 1, 1998 ("Agreement"), the undersigned is concurrently herewith requesting registration under the Securities Act of 1993, as amended ("Act"), of issued and outstanding shares of Class A Common Stock, par value $.01 per share ("Class A Common Stock"), of Northland Cranberries, Inc., a Wisconsin corporation ("Company"), owned by the undersigned shareholder ("Seller") in the amount set forth on the signature page hereto. In connection herewith, there are being delivered to you stock certificates ("Certificates"), in negotiable form (together with stock powers executed in blank in the form attached), representing such shares of Class A Common Stock. These certificates are to be held by you as Custodian for the account of the Seller and are to be disposed of by you solely in accordance with this Letter of Transmittal and Custody Agreement ("Custody Agreement"). Concurrently with the execution and delivery of the Agreement, the Seller executed a power of attorney ("Power of Attorney"), the form of which has been furnished to you, to [__________] (individually an "Attorney-in-Fact" and together the "Attorneys-in-Fact"), authorizing such Attorneys-in-Fact, acting together and not alone, to sell from the number of shares represented by the Certificates that number of shares ("Shares") of the Class A Common Stock indicated below the signature of the Seller at the end of this letter, or such lesser number as the Attorneys-in-Fact, acting together and not alone, may determine, and for that purpose to enter into any underwriting agreement ("Underwriting Agreement"), among the Company, the underwriters named therein and the Seller. You are hereby authorized and directed to hold the Certificates deposited in your custody, and prior to any sale or other required time of delivery for sale (each, a "Time of Delivery") of which you shall have been given prior notice by or on behalf of the Company, any underwriter or any broker-dealer, and upon the instructions of the Attorneys-in-Fact, acting together and not alone, you are to instruct the transfer agent and registrar for the Class A Common Stock to prepare and countersign a certificate or certificates representing the Shares which are to be sold by the Seller at such Time of Delivery registered in such names and denominations as the Company, the underwriters or any broker-dealer shall have instructed you. At each Time of Delivery you are, upon the instructions of the Attorneys-in-Fact, acting together and not alone, (i) to instruct the transfer agent and registrar for the Class A Common Stock (A) to cause the Shares that are to be sold at such Time of Delivery to be transferred upon the books of the Company into such names and in such denominations as the Company, the underwriters or any broker-dealer shall have instructed you, and (B) to deliver the Certificates against receipt by such transfer agent and registrar from you of the Certificates (or a portion thereof) deposited with you pursuant to this Custody Agreement; (ii) to purchase all transfer tax stamps (if any) necessary in connection with the transfer of such Shares as aforesaid; (iii) to deliver to such transfer agent and registrar the Certificates (or a portion thereof) against receipt of payment for such Shares; (iv) to give receipt for such payment and to (a) remit to the Company, any underwriter or broker-dealer a portion thereof equal to the amount payable by the Seller; and (b) deposit the remainder of such payment to your account as Custodian; and (v) after deducting such fees and expenses from the amount received by you as payment for the Shares sold at such Time of Delivery to distribute the balance in accordance with the payment instructions set forth below the name of the Seller at the end of this Custody Agreement or such other instructions you shall have received prior to such Time of Delivery by the Attorneys-in-Fact. Upon instructions from the Attorneys-in-Fact you shall return to the Seller new certificates (which you shall have obtained from the transfer agent and which shall be accompanied by appropriate stock powers), representing the number of shares of Class A Common Stock, if any, represented by the Certificates deposited with you on behalf of the Seller, which are in excess of the total number of Shares sold by the Seller. Under the terms of the Power of Attorney, the authority conferred thereby is granted and conferred subject to the interests of the Company, any underwriters, and any broker-dealer and, is, to the extent enforceable by law, irrevocable and not subject to termination by the Seller or by operation of law, whether by the death or incapacity of the Seller, or by the occurrence of any other event, and the obligations of the Seller under the Agreement similarly are not to be subject to termination. Accordingly, the Shares represented by the certificates deposited with you pursuant to this Custody Agreement and your authority are subject to the interests of the Company, any underwriters, and any broker-dealers, and this Custody Agreement and your authority hereunder shall be, to the extent enforceable by law, irrevocable and not subject to termination by the Seller or by operation of law, whether by the death or incapacity of the Seller or by the occurrence of any other event. If the Seller should die or become incapacitated or if any other such event should occur, before the delivery of the Shares to be sold by the Seller hereunder, then the certificates representing the Shares shall be delivered by or on behalf of the Seller in accordance with the terms and conditions of the Agreement and this Custody Agreement, and actions taken by you hereunder or by the Attorneys-in-Fact, acting together and not alone, pursuant to the Power of Attorney shall be as valid as if such death, incapacity, or other event had not occurred, regardless of whether or not you or the Attorneys-in-Fact, acting together and not alone, shall have received notice of such death, incapacity, or other event. Until delivery of the Shares to be sold by the Seller has been made as herein and in the Agreement provided, the Seller shall, except as otherwise specifically provided herein, have all the rights of ownership of such Shares and all other shares, if any, represented by the Certificates deposited on behalf of the Seller. You shall be entitled to act and rely upon any statement, request, notice or instruction respecting this Custody Agreement given to you by the Attorneys-in-Fact, acting together and not alone. It is understood that you assume no responsibility or liability to any person other than to deal with the Certificates deposited and the proceeds from the sale of the Shares represented thereby, all in accordance with the provisions of this Custody Agreement, and the Seller agrees to indemnify and hold you harmless with respect to anything done by you in good faith in accordance with the foregoing instructions. It is understood that your reasonable fees and expenses in acting hereunder will be paid by the Company. Please acknowledge your acceptance hereof as Custodian and receipt of the Certificates deposited by executing and returning one of the enclosed copies hereof to the undersigned. Dated: ____________ Very truly yours, Signature of Seller 1 Michael A. Morello No. of Shares Requested For Registration: ___________________ --------- 1 You should sign in exactly the same manner as the shares of Class A Common Stock of the Company owned by you are registered and execute a separate Agreement for each different form in which shares are registered. ACKNOWLEDGEMENT AND RECEIPT Harris Trust and Savings Bank, as Custodian, acknowledges acceptance of the duties of Custodian under the foregoing Letter of Transmittal and Custody Agreement and receipt of the Certificates representing the shares referred to therein. Dated: ___________ HARRIS TRUST AND SAVINGS BANK By: Title: Attest: Title: PAYMENT INSTRUCTIONS The balance of funds held by the Custodian representing net proceeds (after payment of expense) received upon the sale of Shares are to be remitted in accordance with the provisions of this Letter of Transmittal and Custody Agreement as follows (select one): (a) Deposit to an account of Seller with the Custodian: Account No._________________________________ Account Name________________________________ (b) Wire transfer to an account of Seller at another bank: Bank Name Bank Address_______________________ _____________________________________________ (Attention of _________________________________) Account No.__________________________________ Account Name_________________________________ (c) Mail official bank check available to the order of the Seller) to: Name _____________________________________ Address _____________________________________ (d) Other instructions: EX-10.2 3 EXHIBIT B EMPLOYMENT AGREEMENT THIS AGREEMENT by and among NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Northland"), FARGO ACQUISITION CO., a New Jersey corporation and a wholly-owned subsidiary of Northland ("Company") and MICHAEL A. MORELLO ("Executive"), dated as of July 1, 1998. R E C I T A L S A. Minot Food Packers, Inc., a New Jersey corporation ("Minot") has been engaged in the business of producing, packaging, marketing, distributing and selling under Minot's brand and customers' private labels (i) cranberry-based products, cranberry sauces, cranberry juice cocktails and blended cranberry drinks, (ii) apple juice and cider products and (iii) other shelf-stable juices and drinks and is engaged in the co-packing of such products for other branded producers (the "Business"). B. Northland, Minot and Executive are parties to an Asset Purchase Agreement ("Purchase Agreement"), dated May 20, 1998, pursuant to which Northland agreed to purchase substantially all of the assets and Business of Minot. C. Pursuant to the Purchase Agreement and an Assignment and Assumption of Agreement dated June 29, 1998, Company assumed the rights and obligations of Northland to purchase the assets and Business of Minot. D. Following the Closing (as such term is defined in the Purchase Agreement) on the date hereof, the Business will be conducted by Company. E. Prior to the Closing Executive has been an executive officer of Minot and, as a result, possesses an intimate knowledge of the Business. F. Northland recognizes that Executive's contribution to the Business has been substantial and desires to assure Executive's continued employment with Company in an executive capacity. G. Executive desires to be employed by Company on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto covenant and agree as follows: 1. Employment Period. Company shall employ Executive, and Executive shall serve Company, on the terms and conditions set forth in this Agreement, for a period commencing at the Closing (as that term is defined in the Purchase Agreement) and ending on the date immediately preceding the third anniversary of the Closing (the "Employment Period"). 2. Position and Duties. (a) The Executive shall serve as President of Company, with such duties and responsibilities as are customarily assigned to such position, and such other duties and responsibilities not inconsistent therewith as may from time to time be assigned to him by the Chief Executive Officer of Company and the Board of Directors of Company (the "Board"). (b) During the Employment Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive shall devote full business time and effort during normal business hours to the business and affairs of Company and, to the extent necessary to discharge the responsibilities assigned to Executive under this Agreement, use Executive's best efforts to carry out such responsibilities faithfully and efficiently. It shall not be considered a violation of the foregoing for Executive to serve on corporate, industry, civic or charitable boards or committees, so long as such activities do not significantly interfere with the performance of Executive's responsibilities as an employee of Company in accordance with this Agreement. (c) During the Employment Period, Executive shall have the right to perform his duties under this Agreement in Bridgeton, New Jersey and shall not be required to relocate to any other geographic area without his consent. 3. Compensation. (a) Salary. Company shall pay to Executive an annual salary ("Annual Salary") of $190,000. The amount of the Annual Salary shall be reviewed not less frequently than once a year during the Employment Period by the Board and, at the sole discretion of the Board, shall be subject to upward adjustment consistent with the salary reviews and salary adjustments of senior executive officers of Northland and the performance of Executive under this Agreement. The Annual Salary shall be payable in accordance with Company's regular payroll practice for its senior executives, as in effect from time to time, but not less frequently than monthly. (b) Additional Benefits. During the Employment Period: (A) Northland shall enable Executive to participate in all applicable incentive, savings and retirement plans, practices, policies and programs made available to executives of Northland (including, without limitation, the Amended 1995 Stock Option Plan, the 401(k) Plan and participation in Northland's Incentive Bonus Plan ("Bonus Plan") at the 50% level ("50% Level"), to the same extent and subject to the same terms and conditions as comparable senior executives of Northland (such additional benefits hereinafter referred to as "Additional Compensation"), and (B) Northland shall cause Executive and/or Executive's family, as the case may be, to be eligible for immediate participation in, and to receive all benefits under, all applicable welfare benefit plans, practices, policies and programs made available to executives of Northland, other than severance plans, practices, policies and programs but including, without limitation, medical, dental, group life insurance and accidental death and travel accident insurance plans and programs (the "Benefit Programs"), to the same extent as eligible executives of Northland. Without limiting the generality of the foregoing, Executive shall be eligible for an option grant under the Amended 1995 Stock Option Plan at the time the committee administering such Plan next grants options generally to senior management of Northland. The number of shares subject to such an option grant that will be recommended for award to Executive by such committee shall be within the range of amounts of shares granted to other employees of Northland qualifying as participants at the 50% Level under the Bonus Plan and any such grant shall be at such time and shall be on grant terms comparable to the terms applicable to such other grantees. (c) Expense Reimbursement. Company shall reimburse Executive for all reasonable and documented expenses incurred by Executive in the performance of Executive's duties under this Agreement in accordance with the policies and procedures established by the Board for its senior executive officers. (d) Automobile Lease. During the Employment Period, Northland shall provide Executive with the unrestricted use of a new automobile of the make and model of his choice; provided such automobile is generally comparable with the make and model currently provided by Northland to other similarly situated executive officers of Northland as of the date of this Agreement. All of the direct and indirect operating and maintenance expenses associated with Executive's use of such automobile shall be paid by Northland upon the Executive's request. (e) Holidays and Vacation. Executive shall be entitled to not fewer than the number of paid holidays as may be made available annually to other executives of Northland of a comparable status and shall be entitled to paid vacation of not less than the greater of (i) the amount of paid vacation made available annually to other executives of Northland of comparable status or (ii) five weeks. 4. Termination of Employment. (a) Death or Disability. Executive's employment shall terminate automatically upon Executive's death during the Employment Period. Company shall be entitled to terminate Executive's employment because of Executive's Disability during the Employment Period. "Disability" means that (i) Executive has been unable, for a period of 60 consecutive business days, to perform Executive's duties under this Agreement, as a result of physical or mental illness or injury, and (ii) a physician selected by Company or its insurers, and acceptable to Executive or Executive's legal representative, has determined that Executive's incapacity is total and permanent. A termination of Executive's employment by Company for Disability shall be communicated to Executive by written notice, and shall be effective on the 10th day after receipt of such notice by Executive (the "Disability Effective Date"), unless Executive returns to full-time performance of Executive's duties before the Disability Effective Date. (b) By Company. (i) Company may terminate Executive's employment during the Employment Period with or without Cause. "Cause" means: A. the willful and continued failure of Executive substantially to perform Executive's duties under this Agreement (other than as a result of physical or mental illness or injury). B. illegal conduct or gross misconduct by Executive, in either case that is willful and results in material and demonstrable damage to the business or reputation of Company or Northland. (c) By Executive. Executive may terminate his employment hereunder at any time for any reason upon giving the Company written notice ("Executive Notice of Termination"). The Executive Notice of Termination shall become effective as specified by the Executive in such Notice, but not earlier than 30 days after delivery of such Notice to Company, except in the case of notice for reasons set forth in Section 5(d) below in which case termination of employment may be effective upon the giving of Notice pursuant to this Section 4(c). (d) Notice to Executive. Any termination by Company under Section 4(b) hereof shall be communicated by a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated or shall state that the termination is without Cause ("Company Notice of Termination"). The Company Notice of Termination shall become effective on the date such Notice is given unless otherwise specified by Company in such Notice; provided, however, that no such Notice shall be given for Cause under clause (A) of Section 4(b) until Company has notified Executive in writing of the facts and circumstances upon which such Notice is to be given and Executive has not satisfactorily addressed the concerns set forth in such Notice within a period of 30 days after its receipt. (e) Date of Termination. The "Date of Termination" means the date of Executive's death, the Disability Effective Date, or the date on which an Executive Notice of Termination or Company Notice of Termination becomes effective as provided in Section 4(c) and Section 4(d), respectively, is given. 5. Obligations of Company upon Termination. (a) Death and Disability. If Executive's employment is terminated by reason of Executive's death or Disability during the Employment Period, Company shall pay to Executive or, in the case of Executive's death, to Executive's designated beneficiaries (or, if there is no such beneficiary, to Executive's estate or legal representative), in a lump sum in cash within 30 days after the Date of Termination, the sum of the following amounts (the "Accrued Obligations"): (1) any portion of Executive's Annual Salary through the Date of Termination that has not yet been paid; (2) an amount representing the Additional Compensation for the period that includes the Date of Termination, computed by assuming that the amount of all such Additional Compensation would be equal to the maximum amount of such Additional Compensation that Executive would have been eligible to earn for such period, and multiplying that amount by a fraction, the numerator of which is the number of days in such period through the Date of Termination, and the denominator of which is the total number of days in the relevant period; and (3) any accrued but unpaid Additional Compensation and vacation pay. In addition, Company at its expense will continue to provide for a period of not less than 180 days all Benefit Programs in which Executive and his dependents are then participating for the continued benefit of Executive and his dependents, in the case of the Disability of Executive, or the dependents of Executive, in the case of the death of Executive. (b) By Company With Cause; By Executive Without Justification. If Executive's employment is terminated by Company with Cause during the Employment Period, Company shall pay Executive the Annual Salary through the Date of Termination to the extent not yet paid, and Company shall have no further obligations under this Agreement. If Executive voluntarily terminates employment during the Employment Period for reasons other than as provided in Section 5(d), the Company shall pay the Accrued Obligations to Executive in a lump sum in cash within 30 days of the Date of Termination, and Company shall have no further obligations under this Agreement. (c) By Company Without Cause. If Company shall terminate Executive's employment without Cause, Company shall pay to Executive the Accrued Obligations to the extent not yet paid plus, in lieu of any further salary payments to Executive for periods subsequent to the Date of Termination, Company shall pay as liquidated damages, or severance pay, or both to Executive on or prior to the fifth day following the Date of Termination, a lump-sum amount equal to the Annual Salary in effect as of the Date of Termination multiplied by the number of years remaining in the Employment Period, with each remaining month or portion thereof being 1/12th of one year (the "Termination Payment"). For purposes of calculating the lump-sum payment due Executive pursuant to this paragraph, any partial month remaining in the term of employment shall be deemed a full month. In addition, Company at its expense will continue to provide to Executive and his dependents all Benefit Programs in which Executive and his dependents are then participating for a period equal to the greater of (i) the number of days remaining in the Employment Period or (ii) 180 days. (d) By Executive with Justification. If Executive voluntarily terminates employment during the Employment Period as a result of a decision by Company to terminate the Business or as a result of a material breach by Company or Northland of its obligations under this Agreement, then Executive shall be entitled to the payments and benefits provided in Section 5(c) above. 6. Limitation on Payments. (a) Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment, or any other payment under this Agreement, or under any other agreement with or plan of Company or its affiliates (in the aggregate "Total Payments"), would constitute an "excess parachute payment," then the Total Payments to be made to Executive shall be reduced such that the value of the aggregate Total Payments that Executive is entitled to receive shall be one dollar less than the maximum amount which Executive may receive without becoming subject to the tax imposed by Section 4999 (or any successor provision) of the Internal Revenue Code of 1986, as amended (the "Code") or which Company may pay without loss of deduction under Section 280G(a) of the Code (or any successor provision). For purposes of this Agreement, the terms "excess parachute payment" and "parachute payments" shall have the meanings assigned to them in Section 280G of the Code (or any successor provision), and such "parachute payments" shall be valued as provided therein. Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Within fifteen days following the Date of Termination or notice by Company to Executive of its belief that there is a payment or benefit due Executive which will result in an excess parachute payment as defined in Section 280G of the Code (or any successor provision), Executive and Company, at Company's expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel selected by Company's independent auditors and acceptable to Executive in his sole discretion (which may be regular outside counsel to Company), which opinion sets forth (i) the amount of the Base Period Income, (ii) the amount and present value of Total Payments and (iii) the amount and present value of any excess parachute payments determined without regard to the limitations of this paragraph (a) of Section 6. As used in this Agreement, the term "Base Period Income" means an amount equal to Executive's "annualized includible compensation for the base period" as defined in Section 280G(d)(1) of the Code (or any successor provision). For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to Company and Executive. Such opinion shall be dated as of the Date of Termination and addressed to Company and Executive and shall be binding upon Company and Executive. If such opinion determines that there would be an excess parachute payment, any payment or benefit determined by such counsel to be includible in Total Payments shall be reduced or eliminated as specified by Executive in writing delivered to Company within thirty days of his receipt of such opinion or, if Executive fails to so notify the Company, then as Company shall reasonably determine, so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. If such legal counsel so requests in connection with the opinion required by this paragraph (a) of Section 6, Executive and Company shall obtain, at Company's expense, and the legal counsel may rely on in providing the opinion, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by Executive. If the provisions of Sections 280G and 4999 of the Code (or any successor provisions) are repealed without succession, then this paragraph (a) of Section 6 shall be of no further force or effect. (b) If, notwithstanding the provisions of paragraph (a) of Section 6, it is ultimately determined by a court or pursuant to a final determination by the Internal Revenue Service that any portion of Total Payments is subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or any successor provision), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive after deduction of any Excise Tax and any interest charges or penalties in respect of the imposition of such Excise Tax (but not any federal, state or local income tax) on the Total Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this paragraph (b) of Section 6, shall be equal to the Total Payments. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of Executive's domicile for income tax purposes on the date the Gross-Up Payment is made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 7. Successors. (a) This Agreement is personal to Executive and, without the prior written consent of Company, shall not be assignable by Executive. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Company would have been required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean both Company as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise. 8. Miscellaneous. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Executive: Michael A. Morello 3161 Silverwood Lane Vineland, New Jersey 08361 Facsimile: (609) 690-0751 With a copy to: John F. Bales, III, Esq. Morgan, Lewis and Bockius LLP 2000 One Logan Square Philadelphia, Pennsylvania 10103-6093 Facsimile: (215) 963-5299 If to Northland or Company: Northland Cranberries, Inc. 800 First Avenue South P.O. Box 8020 Wisconsin Rapids, Wisconsin 54495-8020 Attention: John Swendrowski Facsimile: (715) 422-6844 With a copy to: Jeffrey J. Jones c/o Foley & Lardner 777 East Wisconsin Avenue Milwaukee, WI 53202-5367 Facsimile: (414) 297-5900 or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 8. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. (d) Notwithstanding any other provisions of this Agreement, Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (e) Executive's or Company's failure to insist upon strict compliance with any provisions of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement. (f) The rights and benefits of Executive under this Agreement may not be anticipated, assigned, alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process except as required by law. Any attempt by Executive to anticipate, alienate, assign, sell, transfer, pledge, encumber or charge the same shall be void. Payments hereunder shall not be considered assets of Executive in the event of insolvency or bankruptcy. (g) This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. (h) This Agreement has been jointly drafted by the respective representatives of Company and Executive and no party shall be considered as being responsible for such drafting for the purpose of applying any rule construing ambiguities against the drafter or otherwise. No draft of this Agreement shall be taken into account in construing this Agreement. (i) If Company fails to pay any amount due to Executive under the terms of this Agreement within the time periods provided herein for such payment, Company will pay to Executive, in addition to any other sums required to be paid under this Agreement, (i) interest on any amount remaining unpaid from the date payment is required under this Agreement until payment is received by Executive at the prime rate published daily in The Wall Street Journal and (ii) the amount necessary to reimburse Executive for all reasonable expenses incurred by Executive in enforcing any of the obligations of Company under this Agreement, it being the intent of the parties that Executive not incur any expenses associated with enforcing his rights under this Agreement because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. 9. Effectiveness of Agreement. The effectiveness of this Agreement is subject to Closing (as defined in the Purchase Agreement). If for any reason the Closing does not take place, this Agreement shall be null and void, ab initio. 10. Northland Guaranty. This Agreement shall inure to the benefit of, and be binding upon, Northland; and Northland hereby guarantees the full and prompt payment and performance by Company of its obligations to Executive under this Agreement. 11. Enforcement. Venue for enforcement of the terms and conditions of this Agreement shall be the federal or state courts of the State of New Jersey with service of process by notice as provided herein. IN WITNESS WHEREOF, Executive, Company and Northland have duly executed this Agreement under seal as of the date first above written. EXECUTIVE /s/ Michael A. Morello Michael A. Morello FARGO ACQUISITION CO. ("COMPANY") By /s/ John Swendrowski John Swendrowski Chairman of the Board and Chief Executive Officer NORTHLAND CRANBERRIES, INC. ("NORTHLAND") By /s/ John Swendrowski John Swendrowski Chairman of the Board and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----