COLLATERAL PLEDGE AGREEMENT
Date: April 13, 2000
BORROWER: NORTHLAND CRANBERRIES, INC.
800 First Avenue South
Wisconsin Rapids, Wisconsin 54495-8020
AGENT: FIRSTAR BANK, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Randy D. Olver, Senior Vice President
1. Security Interest and Collateral. To secure the payment and performance
of each and every debt, liability and obligation of every type and description
which Northland Cranberries, Inc., a Wisconsin corporation (the "Company"), may
now or at any time hereafter owe under or arising out of that certain Credit
Agreement dated as of March 15, 1999, as amended as of May 1, 1999, December 29,
1999 and on the date hereof (as so amended, the "Credit Agreement"), among the
Company, Firstar Bank, N.A., as agent (the "Agent") and certain financial
institutions (together with their respective successors and assigns, the
"Banks") enumerated in the Credit Agreement (whether such debt, liability or
obligation now exists or is hereafter created or incurred, and whether it is or
may be direct or indirect, due or to become due, absolute or contingent, primary
or secondary, liquidated or unliquidated, or joint, several or joint and
several; all such debts, liabilities and obligations being herein collectively
referred to as the "Obligations"), the Company hereby grants the Agent, as agent
for itself and the other Banks, a security interest (herein called the "Security
Interest") in and with respect to the entire right, title and interest of the
Company in that certain Promissory Note dated March 8, 2000 in the original
principal amount of $28,000,000 payable by Cliffstar Corporation ("Cliffstar")
to the Company (the "Cliffstar Note"), together with all rights in connection
with such property, including, without limitation, all principal and interest
payable on the Cliffstar Note (herein called the "Collateral"). Capitalized
terms used herein and not defined shall have the meanings assigned thereto in
the Credit Agreement.
2. Representations, Warranties and Covenants. The Company represents,
warrants and covenants that:
(a) The Company will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if requested by the Agent.
(b) The Company is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the
Security Interest, any restrictive legend appearing on any instrument
constituting Collateral and any Permitted Liens.
(c) The Company will keep the Collateral free and clear of all liens
encumbrances and security interests, except the Security Interest and
Permitted Liens.
(d) The Company will pay, when due, all taxes and other governmental
charges levied or assessed upon or against the Collateral.
(e) At any time, upon request by the Agent, the Company will deliver
to the Agent all notices, financial statements, reports or other
communications received by the Company as an owner or holder of the
Collateral.
3. Rights of the Agent. The Company agrees that the Agent may at any time
after the occurrence of a Default and without notice or demand of any kind to
the Company, (i) notify Cliffstar or the obligor on or issuer of any Collateral
to make payment to the Agent of any amounts due or distributable thereon for the
pro-rata accounts of the Banks; (ii) in the Company's name or the Agent's name
enforce collection of any Collateral by suit or otherwise, or surrender, release
or exchange all or any part of it, or compromise, extend or renew for any period
any obligation evidenced by the Collateral; (iii) receive all proceeds of the
Collateral; and (iv) hold any increase or profits received from the Collateral
as additional security for the Obligations, except that any money received from
the Collateral shall, at the Agent's option, be applied in reduction of the
Obligations for the pro-rata accounts of the Banks, in such order of application
as the Agent may determine, or be remitted to the Company.
4. Events of Default. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called "Event of Default"): (i)
the Company shall fail to pay any or all of the Obligations when due after
giving effect to any grace or cure period or shall fail to observe or perform
any covenant or agreement herein binding on it contained herein; (ii) any
representation or warranty by the Company set forth in this Agreement or made to
the Agent in any financial statements or reports submitted to the Agent by or on
behalf of the Company shall prove materially false or misleading as of the date
when made; or (iii) an Event of Default shall occur under the Credit Agreement.
5. Remedies upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default and in addition to any remedies the Agent may
have under Paragraph 3, above, the Agent may exercise, upon instruction of the
Required Banks, any one or more of the following rights or remedies on behalf of
the Banks: (i) declare all unmatured Obligations to be immediately due and
payable in accordance with the terms of the Credit Agreement, and the same shall
thereupon be immediately due and payable, without presentment or other notice or
demand; (ii) exercise and enforce any or all rights and remedies available upon
default to the Banks under the Uniform Commercial Code as in effect from time to
time in the State of Wisconsin, including the right, upon thirty (30) days prior
written notice to Company by the Agent of its intent to sell the Collateral, to
offer and sell the Collateral privately to purchasers who will agree to take the
Collateral for investment and not with a view to distribution and who will agree
to the imposition of restrictive legends on the instruments representing the
Collateral, and the right to arrange for a sale which would otherwise qualify as
exempt from registration under the Securities Act of 1933; and (iii) upon thirty
(30) days prior written notice to Company
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by the Agent exercise or enforce any or all other rights or remedies available
to the Agent by law or agreement against the Collateral or against the Company
or any other person with respect to the Collateral.
6. Miscellaneous. Any disposition of the Collateral in the manner provided
in Paragraph 5 shall be deemed commercially reasonable. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security Interest
can be released, only explicitly in a writing made in accordance with the Credit
Agreement. Any modification or amendment to this Agreement must be in writing
signed by the Company, the Agent, and the Required Banks. A waiver signed by the
Agent and the Required Banks shall be effective only in the specific instance
and for the specific purpose given. Mere delay or failure to act shall not
preclude the exercise or enforcement of any of the rights or remedies of the
Banks. All rights and remedies of the Banks shall be cumulative and may be
exercised singularly or concurrently, at the option of the Required Banks, and
the exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other. All notices
hereunder shall be deemed sufficiently given if delivered or mailed in
accordance with the applicable notice provisions of the Credit Agreement. The
Agent's duty of care with respect to Collateral in its possession (as imposed by
law) shall be deemed fulfilled if the Agent exercises reasonable care in
physically safekeeping such Collateral or, in the case of Collateral in the
custody or possession of a bailee or other third person, exercises reasonable
care in the selection of the bailee or other third person, and the Agent need
not otherwise preserve, protect, insure or care for any Collateral. The Agent
shall not be obligated to preserve any rights the Company may have against prior
parties, to exercise at all or in any particular manner any voting rights which
may be available with respect to any Collateral, to realize on the Collateral at
all or in any particular manner or order, or to apply any cash proceeds of
Collateral in any particular order of application. The Company will reimburse
the Agent for all expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Agent in the protection, defense or enforcement of the
Security Interest, including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of the Company and the Banks and their respective heirs,
representatives, successors and assigns and shall take effect when signed by the
Company and delivered to the Agent, and the Company waives notice of the Agent's
or the Banks' acceptance hereof. If any provision or application of this
Agreement is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can be
given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Obligations. This Agreement shall
be governed by the internal laws (other than conflict laws) of the State of
Wisconsin. Each party consents to the personal jurisdiction of the state and
federal courts located in the Milwaukee, Wisconsin, in connection with any
controversy related to this Agreement.
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THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED ON OR PERTAINING TO THIS AGREEMENT.
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
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Chairman and Chief Executive Officer
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