EXHIBIT 10O
PRODUCTION AGREEMENT
THIS PRODUCTION AGREEMENT ("Agreement") is entered into and effective this
__6__ day of _______August_________, 2001, by and between NORDIC ASEPTIC, INC.,
a Minnesota corporation ("Nordic") and THE HAIN CELESTIAL GROUP, a Delaware
corporation ("Hain").
WHEREAS, Hain desires that Nordic produce and package certain of its
products and Nordic desires to perform such work, all as herein specified;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Hain and Nordic hereby agree as
follows:
1. Product Definition. The term "Product" shall be defined to mean only
aseptic packaged product (not extended shelf life container product or fresh
serve container product), produced by Nordic for Hain or for the Westsoy
products of Hain, or for the private label business of Hain, or for any Heinz
business, or for any affiliate of Hain, and produced in the size and flavors
specified in Exhibit A attached hereto, which Exhibit may be updated and revised
from time to time by the parties. For purposes of this Agreement, "affiliate"
shall mean any individual, partnership, limited liability company, limited
liability partnership, corporation, trust or other entity which is owned or
controlled by a party hereto, or which owns or controls a party hereto, or is
under the common control of a party hereto.
2. Product Specifications. Hain shall promptly provide to Nordic in
writing detailed specifications for the Products, including all ingredients,
recipes, manufacturing processes and packaging information. All ingredients and
food substances included in the formula for the Products and all packaging
material required for such Products are collectively hereinafter referred to as
the "Raw Materials." The Product specifications provided by Hain hereunder shall
be listed on and attached hereto as Exhibit B, except for those certain Raw
Materials which are unique to the Products and proprietary to Hain which will be
separately listed on and attached hereto as Exhibit C. The Products shall be
manufactured and packaged in a manner that meets the Product specifications
supplied by Hain. Hain may alter, change or amend the Product specifications
upon thirty (30) days prior written notice to Nordic, subject to Nordic's
consent, which consent shall not be unreasonably withheld and provided that
Nordic shall be entitled to charge and/or recover from Hain any resulting
increase in Nordic's costs.
3. Production Obligations.
3.1 After receipt of the Product specifications, Nordic shall
produce and package all quantities of the Products ordered by Hain in
accordance with Product purchase orders delivered by Hain to Nordic from
time to time pursuant to this Agreement. All Product purchase orders shall
be in writing and may be delivered by fax or any other means of delivery
to Nordic and shall specify the type of Product, quantity and shipment
date and shall be subject to the provisions of this Agreement. Such
Product
purchase orders shall not be deemed to contradict or modify the provisions
of this Agreement.
3.2 All Products ordered by Hain shall be produced and packaged by
Nordic in accordance with the terms of this Agreement and the Product
purchase order. If Nordic is unable to meet the scheduled shipment date,
it shall promptly notify Hain accordingly and specify the date by which
Nordic anticipates that the Product purchase order can be completed and
ready for shipment. Upon such notification, Hain shall have the option to
rescind or accept the order with the modified delivery terms. After
agreement as to the scheduled production date, Nordic shall pay Hain fifty
cents ($0.50) per case for any shortfall in production in the event Nordic
does not have such agreed production completed within seven (7) working
days after the agreed upon production completion date provided such
shortfall causes Hain to short shipments to customers or be out of stock
of such Product.
3.3 In the event Hain maintains the minimum weekly production
specified in Section 3.7 hereof, then Hain may use alternative packers to
produce Products for any production in excess of such minimum requirements
("Excess Production"), only after allowing Nordic a first option to
produce such Excess Production at costs equal to or less than that
proposed by the alternative packers. All such bid proposals and related
correspondence to and from alternative packers concerning Excess
Production shall be immediately and fully shared with Nordic.
3.4 Production and packaging of Products for Hain shall take
priority over all other items produced and packaged by Nordic, limited,
however by Nordic's filler line production capacity (which production is
assumed to be 15.5 hours per day and 5 days per week). Such Product
production limitation by filler line is specified on Exhibit D attached
hereto. In the event Hain requires case capacities in excess of those
specified in Exhibit D, then Hain shall notify Nordic accordingly and the
parties will work together to attempt to accommodate such increased
production being handled by Nordic.
3.5 By the close of Nordic's business on Wednesday of each week
during the term of this Agreement, Hain shall supply to Nordic a 6 week
rolling production forecast representing its best estimate of ordering
needs for the upcoming 6 week period. Such ordering estimates shall be
provided for purposes of assisting Nordic in production scheduling. The
first week in each forecast shall be considered a fixed commitment
(whether or not pursuant to a Product purchase order received by Nordic
from Hain), and the next 5 weeks shall be considered an estimate of orders
(unless Product purchase orders have been received by Nordic from Hain, in
which event such 5 week forecast shall be considered a fixed commitment to
the extent of Product purchase orders received). Both Nordic and Hain
agree to regularly communicate and to reasonably work together to assist
Nordic in its production scheduling and to assist Hain in its Product
ordering. Notwithstanding anything herein contained to the contrary,
weekly production orders shall not exceed 120% of the weekly average of
the 6 week forecast without Nordic's prior written approval.
2
3.6 In the event Nordic has failed to produce at least 75% of Hain's
Product orders for 6 consecutive weeks, then Hain shall have the option to
either: (i) accept such production and use an alternate source of
production for such shortfall; (ii) give Nordic notice of such production
shortfalls and that Hain intends to terminate this Agreement ("Notice of
Intent to Terminate"); or (iii) purchase Nordic. In the event Hain
provides Notice of Intent to Terminate, then Nordic shall have thirty (30)
days from receipt of Notice of Intent to Terminate to remedy such
production shortfalls. If not remedied in such time, Hain may immediately
terminate this Agreement by giving notice to Nordic. If Hain elects to
purchase Nordic then the parties will have thirty (30) days to agree upon
a purchase price of the Nordic stock and agree upon how any and all
corporate or personal guarantees provided for the benefit of Nordic will
be assumed by Hain or its affiliates. If the parties cannot agree in that
time, then Hain will ensure that Hain or its affiliates assume all
liability for guaranties given for the benefit of Nordic and that such
guarantors are fully released from all liability on such guaranties and
Hain will purchase all of the stock of Nordic (which stock is wholly owned
by an affiliate of Nordic), for cash in an amount determined as follows:
(i) Hain will select an appraiser; (ii) Nordic will select an appraiser;
(ii) those two appraisers will select a third appraiser; (iv) the three
appraisers will each individually appraise the Nordic stock (and to the
extent necessary the Nordic business); and (v) the three appraisals will
be averaged to determine the selling price of the Nordic stock.
3.7 Notwithstanding anything herein contained to the contrary, Hain
guarantees to Nordic that it will maintain minimum production per week of
***(1) cases on the 4 fillers Lines A, B, C, and E, with no filler line
capacity usage of more than 15.5 hours per day for five (5) working days
in a seven (7) day calendar period. Minimum production volume requirements
shall take effect on the later of when the 1/2 Gallon Filler and the Wedge
filler have been installed and commissioned, or November 1, 2001. In the
event total cases ordered by Hain from Nordic on a calendar quarter basis
is less than ***(1) cases, then Hain shall pay Nordic a fee of ***(1) per
case on such shortfall. Nordic shall, within ten days of the end of each
calendar quarter, invoice Hain for such shortfall and Hain shall pay such
invoice within 7 days of receipt of invoice. In the event total cases
ordered by Hain from Nordic on a calendar quarter basis exceeds ***(1)
cases, then Nordic shall credit Hain an amount equal to ***(1) per case on
such excess. Nordic shall credit Hain's account within ten days of the end
of each calendar quarter for such amount and shall mail written
confirmation of such credit to Hain. (1)
4. Ingredients, Packaging and Certification.
4.1 Hain shall be responsible for negotiating and contracting for
the acquisition of all Raw Materials for the manufacture of the Products
by Nordic. Such contracts for Raw Materials shall be evidenced by written
agreements ("Hain Contracts"), copies of which shall be delivered to
Nordic.
----------
(1) Blacked out information deemed confidential and filed separately with the
Securities and Exchange Commission
3
4.2 Nordic shall order Raw Materials under the Hain Contracts as
needed to meet Hain's production requirements and Nordic shall pay for
such items directly to the Raw Material vendors.
4.3 Hain shall, at its sole cost and expense, secure Kosher and
organic certification for Nordic's operations, the Products and the Raw
Materials, and Nordic shall be responsible for maintaining such
certification. If Nordic compromises such kosher certification, then
Nordic shall bear the cost of renewing the kosher certification. However,
if Hain compromises the kosher certification, then Hain shall bear the
cost to renew the Kosher certification.
4.4 Hain shall only order and use soy base provided by Sunrich,
Inc., an affiliate of Nordic, for the production of all Products, within
the Nodic facility, provided such soy base can be provided by Sunrich,
Inc. in the quantities required and at prices competitive to comparable
quality soy base available in the market.
4.5 Hain shall reimburse Nordic for any and all Raw Materials
purchased by Nordic which become obsolete. Nordic will invoice Hain for
such obsolete Raw Materials and Hain will pay Nordic within 7 days of
receipt of such invoice, provided Nordic uses the inventory on a first-in,
first-out basis
5. Storage.
5.1 All finished Products shall be held and incubated by Nordic for
bacterial analysis for the periods specified in Exhibit E attached hereto
("Incubation").
5.2 In addition to the other charges herein specified, Nordic shall charge
Hain a storage fee of ***(1) per pallet of Product per day commencing 21 days
after the packaging date of the Product through and including the date upon
which the Product is shipped from Nordic. Nordic shall provide warehousing
capacity for up to 450,000 cases of Product at any one time. In the event Hain
requires warehousing needs in excess of this limit, Hain shall, at its own cost
and expense, contract for and obtain such other warehousing requirements.
Notwithstanding anything herein contained to the contrary, Nordic shall invoice
Hain for the storage costs on the day the Product is shipped from Nordic and
Hain shall pay such invoice within 7 days of the date of invoice. Nordic will
not be responsible to Hain for any drop charges incurred by Hain's haulers due
to picking up loads at 2 or more Nordic warehouses. Hain will be solely
responsible for any aged, obsolete or discontinued Product in storage at Nordic
and shall remove and dispose of such Product at Hain's own cost and expense or
reimburse Nordic for such costs and expenses if Nordic is required to remove and
dispose of such Product, provided however, that Nordic has properly rotated the
Product inventory and maintained an accurate Product inventory evidencing the
same. Title and risk of loss of the Product shall pass to Hain upon the date on
which the Product leaves Incubation and Nordic invoices Hain for
----------
(1) Blacked out information deemed confidential and filed separately with the
Securities and Exchange Commission
4
the production of such Product. Hain shall take all reasonable acts to remove
and dispose of finished Product as soon as possible but shall ensure that all
finished Product is removed and disposed of within 30 days after the Product's
expiration date. Where Nordic is responsible for providing warehousing of
Product, such warehouse facilities shall comply with all requirements to ensure
organic certificate or similar standards. Nordic shall establish and maintain
Lot Control Procedures as specified by Hain in Exhibit F attached hereto, and
Nordic shall also provide for a physical inventory of the Product to be taken up
to two times per year.
6. Shipment. Hain shall arrange for all shipping of finished Product and shall
pay all the costs of such shipment FOB Nordic loading docks. Hain shall ensure
that all shipments of Product from Nordic are coordinated with truckers and
haulers having appointments with Nordic during the hours of 8:00 AM to 4:00 PM
central time, Monday through Friday, excluding holidays. Any additional costs
for palletizing and shipping multiple SKU's on a single pallet will be charged
to Hain at the costs incurred by Nordic, charges not to exceed $15.00/ pallet.
Nordic shall coordinate all shipments of finished Product pursuant to the
written directions and policies of Hain which shall be delivered by Hain to
Nordic at least 7 days prior to their application. In the event Nordic does not
comply with such directions and policies, then Nordic shall be responsible for
and shall reimburse Hain for its costs and losses attributable or caused by
Nordic's non-compliance.
7. Compensation to Nordic.
7.1 In addition to the other charges specified herein, Hain shall pay
Nordic for its services in the amounts specified in Exhibit G (2) attached
hereto.
----------
(1) Blacked out and Exhibit information deemed confidential and filed
separately with the Securities and Exchange Commission
5
7.2 For Hain orders that are less than the minimum case runs
specified on Exhibit H attached hereto, Hain shall pay Nordic an amount
equal to ***(1) per hour of run time with a minimum charge for 8 hours.
Such per hour rate shall increase by 5% each year for the duration of this
Agreement.
7.3 For test runs, Hain shall pay Nordic an amount equal to ***(1)
per hour of run time, with a minimum charge for 8 hours, plus an amount
sufficient to reimburse Nordic for all direct costs incurred in conducting
such test runs. The ***(1) per hour rate amount may increase by 5% each
year for the duration of this Agreement. In the event the Product for
which the test run is conducted goes into production, then one-half of all
of the Nordic incurred direct costs, which have been reimbursed to Nordic
by Hain, will be refunded to Hain. For purposes of this section, a Product
will be considered to have gone into production once Nordic has produced
50,000 cases of the same product category produced at the same time of
such Product.
7.4 Nordic also shall invoice Hain as follows:
a. For warehouse storage charges pursuant to Section 5.2
hereof, Nordic shall invoice Hain on the day the Product
is shipped;
b. For Nordic incurred disposal costs of the Product and
Raw Materials, Nordic shall invoice Hain as incurred;
c. For Product production and packaging pursuant to Exhibit
G, Nordic shall invoice Hain on the day the Product
leaves Incubation;
d. For production shortfalls and overages pursuant to
Section 3.7 hereof, Nordic shall invoice or credit Hain
as incurred on a calendar quarter basis;
e. For product run fees and costs pursuant to Sections 7.2
and 7.3 hereof, Nordic shall invoice Hain as soon as
such runs are complete.
7.5 All Nordic invoices shall be paid by Hain within 7 days of the
date of such invoice. Hain shall not deduct any amounts, for disputed
Nordic invoices without the prior written consent of Nordic except for
errors in invoicing due to incorrect quantities or incorrect prices.
Notwithstanding the above, the parties will meet at least quarterly to
discuss and mutually resolve any invoicing discrepancies.
----------
(1) Blacked out and Exhibit information deemed confidential and filed
separately with the Securities and Exchange Commission
6
8. Confirmation. Nordic agrees to provide Hain with access to all quality
control and other reports Nordic would otherwise undertake or generate to ensure
that Nordic has met its internal standards of production for the Products.
9. Product Warranty.
9.1 Nordic warrants and represents to Hain that all packaging and
processing services performed by Nordic hereunder regarding the Products
shall be performed in a good and ▇▇▇▇▇▇▇ like manner in accordance with
the specifications provided by Hain.
9.2 Hain warrants and represents to Nordic that all Raw Materials
and production and packaging specifications and labels specified by Hain
shall be of a quality sufficient to produce, package, ship and deliver
finished Product consistent with the standards specified by Hain and all
such items shall be merchantable and comply with all relevant state and
federal statutes and regulations, including standards for labeling, and
that the same shall not infringe in any manner on any trademark,
tradename, patent, copyright, or other intellectual property rights.
Nordic shall be responsible for testing incoming receipts of all Raw
Materials to ensure compliance with Hain Contracts specifications.
9.3 Hain represents and warrants to Nordic that all formula for
Product supplied by Hain to Nordic shall be sufficient to meet the
standards specified by Hain as well as reasonable merchantability
standards and shall comply with all relevant state and federal statutes
and regulations.
9.4 The parties agree that the representations and warranties
contained in this Agreement shall survive any termination of this
Agreement.
10. Nonconforming Product. In the event of the negligence of Nordic which
causes the Products manufactured hereunder to not conform to the Product
specifications as provided by Hain, or to the terms of the Product purchase
order or to the terms of this Agreement, then Hain, at its option, may reject
the Products within10 days after receipt of production samples by Hain or accept
the Products with a reduction in the purchase price to be agreed upon in writing
by Hain and Nordic. In the event of the negligence of Hain which causes the
Products manufactured hereunder to not conform to the Product specifications as
provided by Hain, or to the terms of the Product purchase order or to the terms
of this Agreement, then Hain shall accept and pay for the Product. In any event,
each party shall reasonably notify the other party of any nonconformity with
respect to the Products. The remedies herein set forth shall be Hain's exclusive
remedy for non-conforming Product.
11. Inspection and Quality Control. Nordic shall permit authorized
representatives of Hain to enter Nordic's plant during normal business hours for
the purpose of inspecting and testing the Products manufactured by Nordic,
evaluating the methods of manufacturing the Products, and evaluating the
cleanliness and condition of the equipment used in the manufacturing and storage
process. Nordic shall at all times comply with all requirements of the FDA and
other regulatory authorities as to the manufacturing and packaging processes,
including
7
quality control procedures. All such quality control standards shall be
acceptable to Hain and shall be diligently implemented on a consistent basis in
accordance with industry standards. Nordic shall at all times maintain the
necessary licensing from regulatory authorities to permit production of the
Products within its plant in compliance with all applicable laws and
regulations.
In the event any Product manufactured hereunder is determined by Hain or
regulatory authorities to be defective, adulterated, unfit for human
consumption, or in violation of applicable regulatory provisions, Hain may
require and Nordic shall implement, at Nordic's own cost, additional testing
procedures to identify the problem with the manufacturing process or materials,
including the use of off-site lab testing. If any recall is required due to
Product defects, which are the responsibility of, or caused by the negligence of
Nordic, then Nordic shall reimburse Hain for all costs incurred by Hain in such
recall including, but not limited to, fines and reasonable attorneys fees,
provided that Nordic's maximum liability shall not exceed $5,000,000. If any
recall is required due to Product defects which are the responsibility of or
caused by the negligence of Hain, then Hain shall reimburse Nordic for all costs
incurred by Nordic in such recall including, but not limited to, fines and
reasonable attorneys fees, provided that Hain's maximum liability shall not
exceed $5 million.
12. Trademarks, Other Rights and Compensation to Hain.
12.1 It is hereby acknowledged and agreed that Nordic will be
packaging the Products using Hain's labels, tradenames and trademarks.
Nordic shall use only labeling approved by Hain and containing all of the
necessary copyright, tradename and trademark notices, as determined by
Hain. Nordic shall make no other use of said trademarks, tradenames or
copyrighted materials. Nordic acknowledges and agrees that Hain is the
sole and exclusive owner of the trade names, trademarks, formulas and
copyrights for the Products and will not directly or indirectly challenge
or impair the validity thereof. Hain hereby agrees to permit and fully
authorizes Nordic to use any and all of Hain's trademarks, trade names,
copyrights, formulas and other intellectual property to the extent
required for Nordic to produce and package the Product, for Hain's use
only, as herein provided. Nordic agrees not to use Hain's Trademarks and
formulas for any other customer.
12.2 For purposes of this section: (1) "Private Label Product" shall
mean soy based liquid product produced by Nordic or any of its affiliates
for subsequent sale to customers under a private label brand, which
production occurs after the date of this Agreement and which production
does not include production for ***(1) and the quart sizes for ***;(1) and
(2) "Gross Profit Margin" shall mean the difference between: (i) the net
sales (net of returns), of Private Label Product by Nordic or its
affiliates; less (ii) the cost of goods sold, freight,
----------
(1) Blacked out and Exhibit information deemed confidential and filed
separately with the Securities and Exchange Commission
8
broker fees, third party warehouse costs and taxes (other than income
taxes), related to the Private Label Product. Hain hereby grants to Nordic
and its affiliates a license to use all of Hain's proprietary ingredients
for the production and sale of Private Label Products. As consideration
for such license, Nordic shall pay to Hain a fee equal to 50% of the Gross
Profit Margin. Such fee shall be payable each calendar quarter by Nordic,
within 45 days of the end of each calendar quarter. Nordic shall provide
adequate evidence of the calculations of the Gross Profit Margin to Hain
along with the invoice.
13. Production Support. Should either party determine that a problem
exists with the manufacturing process for a Product, such party shall
immediately contact the other party to resolve the problem. The cost to resolve
the problem shall be borne by the party who is responsible for the problem. If
co-responsibility for the problem is the case, then the parties shall agree to
bear a negotiated percent each. Both parties will mutually resolve third party
actions.
14. Indemnity.
14.1 Except for the limitation specified in Section 10 above, Nordic
shall indemnify, defend, and hold Hain harmless from and against any and
all losses, damages, costs or liabilities (including reasonable attorneys'
fees) incurred by Hain arising in any way out of the failure, breach or
nonfulfillment by Nordic of any representation, warranty, covenant or
agreement of Nordic herein, including but not limited to, those with
respect to production process, Product storage, quality control and
testing, except to the extent caused by the negligence or willful
misconduct of Hain or any of its agents, employees, officers or directors.
14.2 Except for the limitation specified in Section 10 above, Hain
shall indemnify, defend and hold Nordic harmless from and against any and
all losses, damages, costs or liabilities (including reasonable attorneys'
fees) incurred by Nordic arising in any way out of the failure, breach or
nonfulfillment by Hain of any representation, warranty, covenant or
agreement of Hain herein, including but not limited to, those with respect
to delivery to Nordic of ingredients, packaging and labeling information,
except to the extent caused by the negligence or willful misconduct of
Nordic or any of its agents, employees, officers or directors.
14.3 A party will be liable for indemnification under this Section
only if the party demanding indemnification delivers written notice to the
other party setting forth in reasonable detail the identity and nature of
the claims for which indemnification is sought within a reasonable period
of time after the party demanding indemnification has actual knowledge of
such claim or claims. The above indemnifications shall survive the
termination of this Agreement.
15. Insurance. Each party shall maintain general accident and liability
insurance, including contractual liability, with responsible insurance companies
reasonably acceptable to the other party, with waiver of subrogation and
completed operations coverage, in an amount of at least $5,000,000 combined
single limit, with a deductible of $10,000 or less. Hain shall
9
maintain casualty insurance on all Raw Materials and finished Product. Each
party shall provide satisfactory evidence to the other party of such insurance
upon reasonable request. All such insurance shall require at least 30 days prior
written notice before termination, cancellation or material modification of the
policy and shall name the other party as an additional insured.
16. Lien on Finished Product. Hain recognizes and agrees that, until
Nordic is paid for its invoices, Nordic has a producer's security interest on
the applicable finished Product. Hain shall ensure that this lien shall be prior
to all other liens placed on the Product and agrees that it will, at the request
of Nordic, execute a separate Security Agreement, such Uniform Commercial Code
Financing Statements and such other documents as shall be required to evidence
and perfect the same.
17. Force Majeure. Nordic shall not be responsible to Hain for
non-performance or delay in performance of the terms, conditions and covenants
of this Agreement due to war, warlike operations, riot, insurrection, orders of
government, strikes, lockouts, fire, explosion, or any act of God. However, if
any such cause shall continue for a period of three (3) months, Hain may at the
end of such three (3) month period, by thereafter giving two (2) week's notice
to Nordic, terminate this Agreement.
18. Term. This Agreement shall have a term of three (3) years and shall be
automatically renewed from year-to-year on an annual basis thereafter, unless
written termination is received by a party at least nine (9) months prior to the
annual renewal of this Agreement or unless terminated as herein provided.
19. Termination.
19.1 Either party may terminate this Agreement, with such
termination becoming effective upon delivery of and receipt by the other
party of written notice of termination, in the event that:
a. The other party is in breach of any of its
representations, warranties, covenants, and/or
obligations under this Agreement, provided the
terminating party has given the other party written
notice specifying such breach, requesting that the other
party remedy the same, and the other party has failed to
remedy such breach within twenty (20) business days
after receipt of notice; or
b. The other party is adjudicated a bankrupt, or makes an
assignment for the benefit of creditors, or a voluntary
or involuntary petition in bankruptcy is filed against
such party, or proceedings appointing a receiver over
the assets of the party or a proceeding concerning the
reorganization of such party are instituted.
19.2 Except where an advance notice period is specified herein, any
termination hereunder shall be effective upon delivery of and receipt by
the other party of written notice of termination. Upon termination
pursuant to the provisions hereof, neither party
10
shall have any further obligations with respect to the purchase, sale or
manufacture of future orders of Products. Notwithstanding the foregoing,
each party shall remain liable for performing all obligations to the date
of termination, including payment for services rendered to such date.
Within 20 days following termination of this Agreement, Hain shall remove
all Products from storage at Nordic and pay all charges due Nordic and
remove: (i) all ingredients comprising the Raw Materials at Nordic
provided the supply of such ingredients does not exceed 90 days of
production needs; and (ii) all packaging materials comprising the Raw
Materials provided such packaging materials have been purchased pursuant
to Hain Contracts. Notwithstanding the foregoing, the confidentiality and
indemnification provisions along with the warranties and representation
contained in this Agreement shall survive termination.
20. Board of Directors. Hain shall be given notice of, and may attend, all
Board of Directors' meetings of Nordic, which shall be held quarterly. Hain may
participate in such meetings on an advisory basis but will have no voting powers
and no rights as a board member.
21. Confidentiality.
21.1 The parties acknowledge that each party ("Receiving Party") may
acquire knowledge of certain of the other party's ("Protected Party")
trade secrets and confidential information relating to each party's
businesses and products including the Products, ingredients, recipes,
manufacturing processes, packaging processes, technical data, other
proprietary information, and the identity of customers and potential
customers during the term of this Agreement. All such information, whether
it is proprietary to the Protected Party or proprietary to others and
entrusted to the Protected Party and whether or not it or they constitute
trade secrets, is hereinafter referred to as "Confidential Information."
Confidential Information shall not include information which:
a. Is, or shall have been in the possession of the
Receiving Party prior to disclosure thereof by the
Protected Party; dating to the beginning of the parties
commercial relationship.
b. Is, or through no fault of the Receiving Party becomes,
published or otherwise available to others or the public
under circumstances such that others or the public may
utilize the same without any direct or indirect
obligation to the Protected Party;
c. Is, or at any time may be, acquired by the Receiving
Party from any third party rightfully possessed of the
same and having no direct or indirect obligation to the
Protected Party with respect to the same; or
d. Is requested or required by legal process or court order
to be disclosed; provided, however, the Receiving Party
will provide the Protected Party with prompt notice of
any such requirement or order so that the Protected
Party may seek an appropriate
11
protective order or waive compliance with the provisions
of this Agreement.
21.2 The Receiving Party acknowledges that the Confidential
Information, whether written or oral, is of substantial value to the
Protected Party's business and agrees to keep the same confidential, and
shall not in any manner or fashion, disclose, transfer, or divulge it to
any person during or after the term hereof for any purpose other than the
manufacture of Products for Hain. This covenant of confidentiality shall
apply in all respects to each party's directors, officers, shareholders
and employees and shall survive the termination of this agreement.
21.3 The Receiving Party further agrees and acknowledges that any
breach of any of the covenants or agreements set forth in this Section
will cause the Protected Party irreparable harm for which there is no
adequate remedy at law, and the Receiving Party hereby consents to any
issuance of an injunction or other equitable relief in favor of the
Protected Party enjoining the breach of any such covenants or agreements.
If any of such covenants or agreements are held to be unenforceable
because of their scope or duration, or the area or subject matter covered
thereby, the parties agree that the court making such determination shall
have the power to reduce or modify the scope, duration, subject matter,
and/or area of such covenant or agreement to the extent such reduction or
modification allows the maximum scope, duration, subject matter and/or
area permitted by applicable law. The parties further agree and
acknowledge that the covenants, agreements and remedies provided for
herein are in addition to, and are not to be construed as replacements for
or limited by, rights or remedies otherwise available including, but not
limited to, those rights and remedies contained in any relevant state or
federal law.
22. Notices. All notices required hereunder shall be in writing and
delivered personally or mailed by certified mail, postage prepaid, or sent by
nationally recognized overnight courier addressed to the parties at the
following addresses:
If to Nordic Aseptic: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
C/o Sunrich, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
C/o Northern Food & Dairy, Inc.
▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
C/o Lindquist & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12
If to Hain: ▇▇▇▇ ▇. ▇▇▇▇▇▇ CFO
THE HAIN CELESTIAL GROUP, INC.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
THE HAIN CLESTIAL GROUP, INC.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
THE HAIN CELESTIAL GROUP, INC.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any party may change its address by giving notice of its new address in
writing to the other party. Unless otherwise provided herein, notice shall be
considered as properly given upon the date of mailing such notice.
23. No Relationship. The parties agree that no relationship between them
exists or is created by their execution and performance of this Agreement except
the independent contractor relationship specifically created herein.
Specifically, the parties are not, have not, and have never intended to create,
a relationship, which could be characterized as a partnership, a joint venture,
or any other similar relationship.
24. Counterparts. This Agreement may be executed in counterparts and by
different parties on different counterparts with the same effect as if the
signatures thereto were on the same instrument. This Agreement shall be
effective and binding upon all parties hereto at such time as all parties have
executed a counterpart of this Agreement.
25. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of each party hereto and its respective
successors and assigns. Notwithstanding the foregoing, neither party shall
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
26. Entire Agreement. This Agreement represents the entire understanding
of and all agreements between the parties concerning the subject matter hereof
and supersedes all prior agreements whether written or oral, relating thereto.
27. Modifications and Waiver. No purported amendment, modification or
waiver of any provision hereof shall be binding unless set forth in a written
document signed by all parties (in the case of amendments or modifications) or
by the party to be charged thereby (in the case of waivers), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of either party to
exercise or delay in
13
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
28. Governing Law, Dispute Resolution. This Agreement and the legal
relations between the parties shall be governed by and construed in accordance
with the laws of the State of Minnesota. Disputes arising hereunder shall be
arbitrated using the American Arbitration Association and applying the rules of
the American Arbitration Association. The parties shall share the cost of
arbitration equally and be responsible for their own counsel and expert witness
fees. All arbitrations shall be binding.
29. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but, if any provision of this Agreement shall be held to be
prohibited or invalid in any jurisdiction under such applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
30. Headings. Section headings provided herein are strictly for ease of
reference and shall not be used to interpret, expand or limit the provisions
hereof.
31. Sale of Nordic. In the event the directors and shareholders of Nordic
intend to explore selling the assets or the stock of Nordic to any person or
entity other than to an affiliate of Nordic or an affiliate of any parent or
subsidiary of Nordic, then Nordic will notify Hain and Hain shall have 45 days
to make an offer to acquire all of the stock of Nordic. In the event Hain does
not make such an offer or if the directors and/or shareholders of Nordic
determine that such offer is not acceptable, then the Nordic stock and assets
may be sold to any other entity without any further obligation, option, notice
or liability to Hain, other than the acquiring party shall be bound by the
existing contract with Hain. If an unsolicited offer to acquire the assets or
the stock of Nordic is received from an entity other than an affiliate of Nordic
or an affiliate of any parent or subsidiary of Nordic, then Nordic will notify
Hain and Hain shall have 45 days to match the unsolicited offer. In the event
Hain does not match such offer in such time period, then Nordic may complete a
sale pursuant to the unsolicited offer providing such transaction is closed
within 180 days of the expiration of the 45 day response period.
32. Control of Hain. In the event the ownership or control of Hain
changes, or if Hain is merged into or acquired by any other entity, or if a
material portion of Hain's assets are acquired by any other entity, this
Agreement shall be specifically assumed by such successor party. In such event,
Hain and the successor party shall execute any and all documents reasonably
requested by Nordic to ensure and confirm the continuation of this Agreement.
33. Control of State Technology Ltd. In the event the ownership or control
of Stake Technology changes, or if Stake is merged into or acquired by any other
entity or if a material portion of Stake's assets are acquired by any other
entity, this Agreement shall be specifically assumed by such successor party. In
such event, Stake and the successor party shall execute any
14
and all documents reasonably requested by Hain to ensure and confirm the
continuation of this Agreement. If Sake is sold to a competitor of Hain, or a
company that becomes a competitor of Hain within one year of acquisition Hain
shall have the right to terminate the Agreement.
34. Nordic will document and achieve ***(1) of cost savings to Hain for
the 12 month period commencing with the effective date of this Agreement
(estimated to be March 15, 20002). As detailed on attachment Exhibit I. (1) In
the event the savings are not achieved, Hain has the right to terminate the
contract, or Nordic has the right to pay the difference to Hain to maintain the
Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed in the manner appropriate to each, to be effective as of the day
and year first above written.
NORDIC ASEPTIC, INC THE HAIN CELESTIALGROUP, INC.
By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇" By: ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ---------------------------------
Its Its EVP Finance
------------------------------ ---------------------------------
The undersigned hereby executes this Agreement for the purposes of Sections 3.6
and 31 hereof, in that the undersigned owns all of the outstanding stock of
Nordic and agrees to be bound by the terms of such Sections only as the owner of
such stock and not otherwise as a party, guarantor or indemnitor of this
Agreement.
SUNRICH FOOD GROUP, INC.
By "▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇"
----------------------------------
Its Chairman
---------------------------------
15
EXHIBIT A
PRODUCTS
--------------------------------------------------------------------------------
96015 Unsweetened 98073 Tropical Smoothie
--------------------------------------------------------------------------------
96049 Lite Plain 98076 Banana ▇▇▇▇▇ Smoothie
--------------------------------------------------------------------------------
96079 Lite Vanilla HZ73010 Heinz Original
--------------------------------------------------------------------------------
96109 Lite Coco HZ73020 Heinz Vanilla
--------------------------------------------------------------------------------
96200 Plus Plain HZ73030 Heinz Chocolate
--------------------------------------------------------------------------------
96225 Plus Vanilla 98506 Lite Plain Wedge
--------------------------------------------------------------------------------
96229 Club Pk - Plus Vanilla 98507 Lite Vanilla Wedge
--------------------------------------------------------------------------------
96282 Smart Plus Vanilla 98515 Plus Plain Wedge
--------------------------------------------------------------------------------
96287 Smart Plus Plain 98517 Plus Vanilla Wedge
--------------------------------------------------------------------------------
96402 Low Fat Chocolate 98536 Rice Plain Wedge
--------------------------------------------------------------------------------
96810 Low Fat Plain 98537 Rice Vanilla Wedge
--------------------------------------------------------------------------------
96860 Low Fat Vanilla 98546 Cafe WB Coffee Wedge
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇ Vanilla Wedge
--------------------------------------------------------------------------------
96950 Green Tea Chai 98548 Cafe WB Mocha Wedge
--------------------------------------------------------------------------------
97000 Rice Drink Plain 98556 Chai Wedge
--------------------------------------------------------------------------------
97001 Rice Drink Vanilla 98566 Juice Bar Apple Wedge
--------------------------------------------------------------------------------
97004 Fat Free Vanilla 98567 Juice ▇▇▇ ▇▇▇▇▇ Wedge
--------------------------------------------------------------------------------
97005 Fat Free Plain 98568 Juice Bar Orange Wedge
--------------------------------------------------------------------------------
97450 Vanilla Drink Shake 98826 Non Fat Plain Wedge
--------------------------------------------------------------------------------
97453 Chocolate Drink Shake 98827 Non Fat Vanilla Wedge
--------------------------------------------------------------------------------
Dated: 08/06/01 NORDIC ASEPTIC, INC.
-------------------
By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"
--------------------------------
Its: Vice President
--------------------------------
Dated: 08/06/01 THE HAIN CELESTIAL GROUP, INC.
-------------------
By: "▇▇▇▇ ▇. ▇▇▇▇▇"
--------------------------------
Its: EVP Finance
--------------------------------
16
EXHIBIT B
PRODUCT SPECIFICATIONS
"Schedule never completed"
17
EXHIBIT C
PROPRIETARY INGREDIENTS
"Schedule never completed"
18
EXHIBIT D
CAPACITY PER DAY PER FILLER LINE ASSUMING OPERATIONS OF 15.5 HOURS PER DAY AND 5
DAYS PER WEEK
FILLER A - SLIM LINE QUART 7,800 per day (12 pack Case)
FILLER B - SLIM LINE QUART 7,800 per day (12 pack Case)
FILLER C - SCREWTOP QUART 13,100 per day (6 Pack Case)
FILLER D - WEDGE 6,510 per day (12 Pack Case)
FILLER E - (1/2GALLON) 9,750 per day (8 Pack Case)
(to be installed)
19
EXHIBIT E
INCUBATION PERIOD BY PRODUCT
--------------------------------------------------------------- -----------------------------------------------------------------
SKU# Product Description Size Incubation SKU# Product Description Size Incubation
Time Time
--------------------------------------------------------------- -----------------------------------------------------------------
96049 Lite Plain 32 oz. 7 day 98543 Cafe Mocha 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98501 Lite Plain 6.3 oz. 7 day 98548 Cafe Mocha Case Pk 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98506 Lite Plain Case Pk 6.3 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
96602 Lite Plain Canadian 946 mL 7 day 98050 Juice Bar Apple 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96079 Lite Vanilla 32 oz. 7 day 98561 Juice Bar Apple 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98502 Lite Vanilla 6.3 oz. 7 day 98566 Juice Bar Apple Case Pk 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98507 Lite Vanilla Case Pk 6.3 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
96601 Lite Vanilla Canada 946 mL 7 day 98060 Juice Bar Orange 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98563 Juice Bar Orange 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96200 Plus Plain 32 oz. 7 day 98568 Juice Bar Orange Case Pk 6.3 oz 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98511 Plus Plain 6.3 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
98060 Juice ▇▇▇ ▇▇▇▇▇ 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98515 Plus Plain Case Pk 6.3 oz. 7 day 98562 Juice ▇▇▇ ▇▇▇▇▇ 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96225 Plus Vanilla 32 oz. 7 day 98567 Juice ▇▇▇ ▇▇▇▇▇ Case Pk 6.3 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96229 Plus Vanilla Club Pk 32 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
98512 Plus Vanilla 6.3 oz. 7 day 96109 Lite Cocoa 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98517 Plus Vanilla Case Pk 6.3 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
96240 Plus Cocoa 32 oz 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96810 Lowfat Plain 32 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
96860 Lowfat Vanilla 32 oz. 7 day 96400 Low Fat Chocolate 32 oz 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
---------------------------------------------------------------
97004 Nonfat Vanilla 32 oz. 7 day
---------------------------------------------------------------
98522 Nonfat Vanilla 6.3 oz. 7 day
---------------------------------------------------------------
98827 Nonfat Vanilla Case Pk 6.3 oz. 7 day
---------------------------------------------------------------
97005 Nonfat Plain 32 oz. 7 day New Products
--------------------------------------------------------------- -----------------------------------------------------------------
98521 Nonfat Plain 6.3 oz. 7 day SKU# Product Description Size Incubation
Time
--------------------------------------------------------------- -----------------------------------------------------------------
98826 Nonfat Plain Case Pk 6.3 oz. 7 day 96950 Green Tea Chai* 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
--------------------------------------------------------------- -----------------------------------------------------------------
96280 Smart Plus Vanilla 32 oz. 7 day 97083 Unsweetened Vanilla* 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96285 Smart Plus Plain 32 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
97450 Vanilla Shake* 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96015 Unsweetened Organic 32 oz. 7 day 97453 Chocolate Shake** 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
96025 Original Organic 32 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
96033 Org. Organic Canada 946 mL 7 day 98073 Tropic Whip Smoothie** 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98076 Banana ▇▇▇▇▇ Smoothie** 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
97000 Rice Drink Plain 32 oz. 7 day
--------------------------------------------------------------- -----------------------------------------------------------------
98531 Rice Drink Plain 6.3 oz. 7 day HZ73030 Heinz Chocolate 32 oz. 14 day
--------------------------------------------------------------- -----------------------------------------------------------------
98536 Rice Drink Plain Case Pk 6.3 oz. 7 day * Incubation will be 14 days for the first 3 months
of production. At that time the incubation period
will be reviewed and might be reduced to 7 days.
** Incubation will remain at 14 days after 3 months
---------------------------------------------------------------
97001 Rice Drink Vanilla 32 oz. 7 day
---------------------------------------------------------------
98532 Rice Drink Vanilla 6.3 oz. 7 day
---------------------------------------------------------------
98537 Rice Drink Vanilla Case 6.3 oz. 7 day
Pk
---------------------------------------------------------------
---------------------------------------------------------------
71001 Hain Plain 6.3 oz. 7 day
---------------------------------------------------------------
71011 Hain Vanilla 6.3 oz. 7 day
---------------------------------------------------------------
---------------------------------------------------------------
96920 Chai 32 oz. 7 day
---------------------------------------------------------------
98551 Chai 6.3 oz. 7 day
---------------------------------------------------------------
98556 Chai Case Pk 6.3 oz. 7 day
---------------------------------------------------------------
---------------------------------------------------------------
98541 Cafe Coffee 6.3 oz. 7 day
---------------------------------------------------------------
98546 Cafe Coffee Case Pk 6.3 oz. 7 day
---------------------------------------------------------------
---------------------------------------------------------------
98542 Cafe French Vanilla 6.3 oz. 7 day
---------------------------------------------------------------
98547 Cafe French Vanilla Case 6.3 oz. 7 day
---------------------------------------------------------------
---------------------------------------------------------------
HZ73010 Heinz Original 32 oz. 7 day
---------------------------------------------------------------
HZ73020 Heinz Vanilla 32 oz. 7 day
---------------------------------------------------------------
20
EXHIBIT F
LOT CONTROL PROCEDURES
"Schedule never completed"
21
EXHIBIT G (1)
SCHEDULE OF FEES FOR SERVICES
----------
(1) Exhibit information deemed confidential and filed separately with the
Securities and Exchange Commission
22
EXHIBIT G
Schedule 1
Hain Formula for Each SKU
"Schedule never completed, formulas provided on an ongoing basis which are
maintained separately in a strictly confidential binder."
----------
(1) Exhibit information deemed confidential and filed separately with the
Securities and Exchange Commission
23
EXHIBIT G
Schedule 2
System for Calculating Packaging Costs
"Schedule never completed"
NORDIC ASEPTIC, INC
PACKAGING COSTS-CLUB PAK
COMPONENT ITEM $/CS $/CARTON
--------- ---- --- --------
TETRA PACKAGING CARTON $ $
PEP $ $
PULL TAB $ $
RECAP $ $
PPP $ $
TOTAL TETRA PCKG COST $ $
CASE SHIPPER $ $
TOTAL CASE PCKG COST $ $
MISCELLANEOUS PEROXIDE $ $
NITROGEN $ $
STRETCH WRAP $ $
LOCATOR TICKET $ $
PALLET $ $
SLIP SHEET $ $
LOCK-N-POP $ $
CASE CODE $ $
CAP GLUE $ $
CASE GLUE $ $
CLUB HANDLE $ $
CLUB TAPE $ $
CLUB UPC $ $
CLUB WRAP $ $
TOTAL MISC PCKG COST $ $
24
NORDIC ASEPTIC, INC
PACKAGING COSTS-SLIM LITER
COMPONENT ITEM $/CS $/CARTON
--------- ---- --- --------
TETRA PACKAGING CARTON $ $
PEP $ $
PULL TAB $ $
RECAP $ $
PPP $ $
TOTAL TETRA PCKG COST $ $
CASE SHIPPER $ $
TOTAL CASE PCKG COST $ $
MISCELLANEOUS PEROXIDE $ $
NITROGEN $ $
STRETCH WRAP $ $
LOCATOR TICKET $ $
PALLET $ $
SLIP SHEET $ $
LOCK-N-POP $ $
CASE CODE $ $
CAP GLUE $ $
CASE GLUE $ $
TOTAL MISC PCKG COST $ $
25
NORDIC ASEPTIC, INC
PACKAGING COSTS-SQUARE QUART
COMPONENT ITEM $/CS $/CARTON
--------- ---- --- --------
TETRA PACKAGING CARTON $ $
PEP $ $
PULL TAB $ $
SCREW CAP $ $
PPP $ $
TOTAL TETRA PCKG COST $ $
CASE SHIPPER $ $
TOTAL CASE PCKG COST $ $
MISCELLANEOUS PEROXIDE $ $
NITROGEN $ $
STRETCH WRAP $ $
LOCATOR TICKET $ $
PALLET $ $
SLIP SHEET $ $
LOCK-N-POP $ $
CASE CODE $ $
CAP GLUE $ $
CASE GLUE $ $
TOTAL MISC PCKG COST $ $
26
NORDIC ASEPTIC, INC
PACKAGING COSTS-WEDGE
COMPONENT ITEM $/CS $/CARTON
--------- ---- --- --------
TETRA PACKAGING CARTON $ $
PEP $ $
PULL TAB $ $
RECAP $ $
PPP $ $
TOTAL TETRA PCKG COST $ $
CASE SHIPPER $ $
TOTAL CASE PCKG COST $ $
MISCELLANEOUS PEROXIDE $ $
NITROGEN $ $
STRETCH WRAP $ $
LOCATOR TICKET $ $
PALLET $ $
SLIP SHEET $ $
CASE CODE $ $
STRAW $ $
STRAW GLUE $ $
CASE GLUE $ $
TOTAL MISC PCKG COST $ $
27
EXHIBIT H
Following are the minimum production run quantities for manufacture of Hain
products
--------------------------------------------------------------------------------
SKU DESCRIPTION MIN. RUN SIZE
--------------------------------------------------------------------------------
96015 UNSWEETENED 5,000
--------------------------------------------------------------------------------
96049 LITE PLAIN 5,000
--------------------------------------------------------------------------------
96079 LITE VANILLA 5,000
--------------------------------------------------------------------------------
96109 LITE COCO 5,000
--------------------------------------------------------------------------------
96200 PLUS PLAIN 5,000
--------------------------------------------------------------------------------
96225 PLUS VANILLA 5,000
--------------------------------------------------------------------------------
96229 CLUB PK PLUS VANILLA 5,000
--------------------------------------------------------------------------------
96282 SMART PLUS VANILLA 5,000
--------------------------------------------------------------------------------
96287 SMART PLUS PLAIN 5,000
--------------------------------------------------------------------------------
96402 LOW FAT CHOCOLATE 5,000
--------------------------------------------------------------------------------
96810 LOW FAT PLAIN 5,000
--------------------------------------------------------------------------------
96860 LOW FAT VANILLA 5,000
--------------------------------------------------------------------------------
97000 RICE DRINK PLAIN 5,000
--------------------------------------------------------------------------------
97001 RICE DRINK VANILLA 5,000
--------------------------------------------------------------------------------
97004 FAT FREE VANILLA 5,000
--------------------------------------------------------------------------------
97005 FAT FREE PLAIN 5,000
--------------------------------------------------------------------------------
98506 LITE PLAIN WEDGE 4,000
--------------------------------------------------------------------------------
98507 LITE VANILLA WEDGE 4,000
--------------------------------------------------------------------------------
98515 PLUS PLAIN WEDGE 4,000
--------------------------------------------------------------------------------
98517 PLUS VANILLA WEDGE 4,000
--------------------------------------------------------------------------------
98536 RICE PLAIN WEDGE 4,000
--------------------------------------------------------------------------------
98537 RICE PLAIN VANILLA WEDGE 4,000
--------------------------------------------------------------------------------
98546 CAFE WB COFFEE WEDGE 4,000
--------------------------------------------------------------------------------
98547 CAFE ▇▇ ▇▇▇▇▇▇ VANILLA WEDGE 4,000
--------------------------------------------------------------------------------
98548 CAFE WB MOCHA WEDGE 4,000
--------------------------------------------------------------------------------
98556 CHIA WEDGE 4,000
--------------------------------------------------------------------------------
98566 JUICE BAR APPLE WEDGE 4,000
--------------------------------------------------------------------------------
98567 JUICE ▇▇▇ ▇▇▇▇▇ WEDGE 4,000
--------------------------------------------------------------------------------
98568 JUICE BAR ORANGE WEDGE 4,000
--------------------------------------------------------------------------------
98826 NONFAT PLAIN WEDGE 4,000
--------------------------------------------------------------------------------
98827 NONFAT VANILLA WEDGE 4,000
--------------------------------------------------------------------------------
Notes:
In general, run sizes should be calculated to use up all perishable
ingredients. All unused perishable ingredients at the end of a
production run will be destroyed.
EXHIBIT I (1)
POTENTIAL COST SAVINGS RELATED TO NEW NORDIC AGREEMENT
----------
(1) Exhibit information deemed confidential and filed separately with the
Securities and Exchange Commission
ADDENDUM TO THE PRODUCTION AGREEMENT BETWEEN NORDIC ASEPTIC, INC. AND HAIN
CELESTIAL GROUP DATED August, 2001
This Addendum to the Production Agreement ("Agreement") between Nordic Aseptic,
Inc.("Nordic") and Hain Celestial Group ("Hain") is entered into and effective
this 6 day of August, 2001. Whereas Nordic and Hain desire to provide certain
changes to that Production Agreement as follows:
1. Nordic agrees to obtain credit approval of all Raw Material and
Packaging Vendors in sufficient dollar amount to fulfill Nordic's
obligations under the Agreement. Hain agrees to provide Nordic a
complete listing of these vendors to include name, address, contact
person and telephone number. In addition, Hain agrees to send a
letter to each vendor explaining that Nordic will be purchasing the
Raw Materials under the Hain Contract(s). Hain agrees to complete
the above by August __15th____, 2001, and Nordic agrees to have
obtained credit approval four (4) weeks after Hain has provided the
above list to Nordic
2. Nordic will take appropriate efforts to ensure that Stake Technology
Ltd. ("Stake") will provide to Nordic any financial commitment to
Nordic, if necessary, to fulfill Nordic's obligations under the
agreement, provided Hain is in full compliance with the Agreement at
such time. Nordic will provide this assurance to Hain by August 15,
2001 with a written letter from Stake.
3. Nordic agrees to use its best efforts to retain existing management
personnel at Nordic during the term of the Agreement. All of
Nordic's employees work "at will". At this point in time Nordic is
not aware of employee issues in this regard.
4. Nordic agrees to pursue mutually beneficial cost savings/process
improvement opportunities in concert with Hain and further agrees
that both parties will work together to determine the appropriate
capital cost and savings allocation, with both parties acting
reasonably and in good faith.
5. For Nordic to produce the required production volumes for Hain under
the Agreement, Nordic must complete certain capital expenditures.
Nordic agrees to complete the following at their sole expense with
in the following timelines:
A) Install second Boiler at the Plant not later than
December 15, 2001.
B) Install two 15,000 Gallon Storage Tanks not later than
December 15, 2001.
C) Install an enhanced Mix/CIP System not later than
January 25, 2002.
D) Install a new Sterile Manifold System for the Surge
Tanks not later than January 25, 2001.
It is understood by Nordic and Hain, that in the event
Nordic's vendors for the above items, do not deliver in
their quoted timeframes, then Nordic may be unable to
meet the above dates. In the event of this both parties
agree to extend the above dates to reflect Nordic's
vendors actual performance dates. Nordic has been
provided the above timelines by its vendors. Assuming
the delay in not caused by Nordic and such extension
would not be granted for more than 60 days.
6. Nordic agrees to install a Combibloc 1/2 gallon filler and related
downline equipment at Nordic's sole expense. Nordic agrees to have
the filler installed and commissioned not later that January 15,
2002, and the downline equipment to be installed and operational not
later that March 15, 2002. The parties agree Nordic's performance as
to the dates, is subject to Combibloc meeting their time commitment
to Nordic for delivery of the above equipment and their field
installation of the same. From January 15 to March 15, 2002 Nordic
will commit to 6000 cases per week. This would require extra labor
to hand pack and would cost an additional $0.15 per case to Hain.
7. Nordic agrees to install electronic
Inventory/Warehouse/Manufacturing Requirements Planning (MRP)
software at Nordic's sole expense. Nordic will immediately begin
implementation of the above items with spreadsheet applications. Not
later than November 15, 2001 Nordic will have converted to and
implemented the above software modules available from Nordic's
current software vendor, DSI. Not later than November 30, 2001
Nordic will have the technology implemented whereby Hain will be
able to access via the Internet, Hain's Finished Goods Inventory.
This Finished Goods Inventory will provide SKU, warehouse location,
row location, allocated to ship, on hold, available for shipment and
date produced. This will include a warehouse management system and
Nordic agrees to work with Hain to improve warehouse control
procedures.
Nordic's opinion is that when items 1 thru 7 above are completed, Nordic will
have excess case capacity to meet its volume obligations under the Production
Agreement.
Nordic and Hain agree that if Nordic fails to accomplish any of the above items
within the timeframes above, then at Hain's option, Hain may terminate the
Production Agreement by giving Nordic written notice of their intent to
terminate and the reasons for termination. Nordic shall be given 30 days to
remedy such reason for termination. If not remedied by Nordic within 30 days
Hain may immediately terminate the Production Agreement by giving written notice
to Nordic. Notices shall be sent to the addresses and parties as provided for in
the Production Agreement, Paragraph 22.
In Witness Whereof, each of the parties hereto have caused this Addendum to be
executed in the manner appropriate to each, effective as of the day and year
first above written.
NORDIC ASEPTIC, INC. THE HAIN CELESTIAL GROUP, INC.
By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇" By: "▇▇▇▇ ▇. ▇▇▇▇▇"
----------------------------- --------------------------
Its: Vice President Its: EVP Finance
----------------------------- --------------------------