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.
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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.
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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.