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EXHIBIT 10.1
MARKETING AGREEMENT
CITRUS WORLD, INC.
THIS AGREEMENT, made as of the 1st day of September, 1994, between
CITRUS WORLD, INC., a cooperative association organized under the laws of the
State of Florida with its principal place of business at Lake Wales, Florida
(hereinafter referred to as "Citrus World") and CONSOLIDATED-TOMOKA LAND CO. of
LAKE PLACID, Florida (hereinafter referred to as "Member").
W I T N E S S E T H:
WHEREAS, Citrus World owns and operates a citrus fruit canning,
packaging, and processing plant at Lake Wales, Florida, as well as other
facilities both within and without the State of Florida for the extraction,
canning, and/or processing, warehousing, and marketing of processed citrus
fruit products; and
WHEREAS, Member is a member-stockholder of Citrus World and desires to
arrange for the sale and delivery of citrus fruit to Citrus World for
processing and marketing of the products derived therefrom.
NOW, THEREFORE, in consideration of the premises and other valuable
considerations, it is mutually agreed as follows:
1. Definitions. For the purposes of this Agreement:
(a) "Grower-Members" shall mean citrus fruit growers who
are members of Member where Member is a cooperative
association.
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(b) "Non-Member Patrons" shall mean citrus fruit growers
who are not Grower-Members but who have agreed as of
or prior to October 1, 1992, to sell fruit to Member
(if a cooperative) for marketing; to allow pooling of
such fruit on a cooperative basis; and to accept the
pool proceeds (after deduction of all costs and
expenses) as the total amount due for such fruit.
(c) "Growers" shall include both Grower-Members and
Non-Member Patrons.
(d) "Committed Fruit" shall mean all citrus fruit from
Member which is not packed as fresh fruit and which
is either produced by Member itself or which, where
Member is a cooperative association, is committed to
Member by means of valid Grower Marketing Agreements.
(e) "Grower Marketing Agreements" shall mean valid
agreements between Member if a cooperative and
Member's Growers whereby each Grower will have agreed
(i) to sell and deliver citrus fruit to Member for
marketing; (ii) that such fruit will be grown on
specific groves the description of which has been
furnished to Member; and (iii) that such agreements
shall not be terminable except upon two years notice
(subject, however, to the provisions of paragraph 17
hereof).
(f) "Limited Fruit" shall mean all citrus fruit from
Member the quantity of which has been set, in terms
of a specified number of boxes, by Citrus World's
Board of Directors less an allowance, not to exceed
five percent (5%) of such set quantity, to
accommodate Member's fresh fruit packing house
operations.
(g) "Grove Property" shall mean all planted grove
properties owned or leased as of October 1, 1992 by
Member, or by a Grower, the fruit from which will be
Committed Fruit. Such properties may be comprised of
actual producing groves or young groves not producing
fruit as of October 1, 1992. Former groves destroyed
by blight, disease or freeze that are to be replanted
but which may not have been replanted as of October
1, 1992, may be included provided they are, in fact,
replanted by September 1, 1995. But such acreage that
is not planted shall not be eligible for replacement
as provided in Paragraph 11 hereof.
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(h) "Fruit Owned or Controlled by Member" shall include
all Committed Fruit and Limited Fruit, either or both.
(i) "Florida Citrus Season" means the period each year
commencing on September 1 and ending on the following
August 31.
2. Delivery and Transfer of Title. Subject to the terms of this
Agreement, Member agrees to deliver to Citrus World all Fruit Owned or
Controlled by Member, and Member hereby assigns and transfers to Citrus World
upon such delivery absolute title and ownership to all such fruit that is
accepted by Citrus World. Member agrees to deliver the same to such place as
Citrus World may direct and Member hereby warrants that Member will have good
and lawful authority to sell and transfer said fruit at the time of such
delivery and warrants title to said fruit against the lawful claims of all
persons whomsoever.
3. Estimate and Identity of Fruit. On or before October 1st of
each year this Agreement is in effect, Member agrees to furnish to Citrus World
the estimated quantity by varieties of Fruit Owned or Controlled by Member. In
addition, Member shall at the same time clearly identify all Committed Fruit by
delivering to Citrus World a list specifying the Grove Property (including the
information specified in paragraph 4 below) from whence the same is to be
harvested. And, except as provided in paragraph 10 hereof, Grove Property
included in such list may not be removed therefrom except upon 2 years written
notice to Citrus World. If applicable, Member will furnish at such time the
varieties and quantities of Limited Fruit to be delivered to Citrus World
pursuant to this Agreement, provided that any changes in the varieties of fruit
and quantities thereof from that delivered during the previous Florida Citrus
Season must be approved by Citrus World's Board of Directors, unless management
determines a varietal change is beneficial to Citrus World.
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4. Records. So long as this agreement remains in effect, Member
will maintain adequate records, and will furnish copies thereof to Citrus
World, so as to be able to describe fully all Grove Properties listed by Member
pursuant to paragraph 3 above, including acreage, block by variety, and the
number and age of the trees in each block.
5. Certificate of Compliance. Each year, within 30 days following
the close of Member's fiscal year, Member will deliver to Citrus World a
certificate of compliance in the form of Exhibit "A" attached hereto and made a
part hereof signed by Member, and accompanied by an opinion of Member's
independent auditor to be based on Member's records and in the form of Exhibit
"B" also attached hereto and made a part hereof, attesting to the fact (a) that
all fruit delivered by Member to Citrus World during the preceding Florida
citrus season was in fact Fruit Owned or Controlled by Member as herein
defined; and (b) that the total quantity of all such Fruit Owned or Controlled
by member was in fact delivered to Citrus World by Member.
6. Acceptance of Fruit by Citrus World. Subject to the provisions
of paragraph 13 hereof, Citrus World shall accept for processing and marketing
all Fruit Owned or Controlled by Member which is (a) included in the estimate
made pursuant to paragraph 3 above and derived from the Grove Property
designated pursuant to said paragraph; or (b) consists of Limited Fruit.
However, Citrus World shall not accept any fruit which does not comprise fruit
from the Grove Property specified or is in excess of the number of boxes of
Limited Fruit, and no waiver of the provisions of this paragraph shall be valid
unless approved by Citrus World's Board of Directors, Executive Committee or
Marketing Committee.
7. Purchase Price. Citrus World agrees to sell the product
manufactured from fruit delivered by member hereunder, pooled with products
manufactured from fruit delivered by other members or any other source, and to
pay over ratably as the agreed purchase price
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due Member hereunder the net amount received from such sale, as final
settlement in full to Member, less any and all advances to Member and less
Citrus World's usual uniform and regular charges and expenses for handling and
processing the fruit and from marketing the products therefrom including all
commonly accepted business expenses and conventional reserves. Member further
agrees to accept capital equity certificates or credits of the type and in the
form authorized by the By-Laws of Citrus World as payment of that part of such
purchase price which is equal to the retained amounts for capital purchases
fixed by the Board of Directors of Citrus World.
8. Advances. Citrus World agrees to make advances to Member upon
the delivery of fruit to it as may from time to time be established by Citrus
World's Board of Directors; however, Citrus World shall not be obligated to
make any final settlement on account of such deliveries until the end of its
fiscal year, or later at the discretion of its Board of Directors.
9. Excess Fruit. Any and all fruit acquired by Member but which
Member could not include in the estimate made pursuant to paragraph 3 above,
shall first be offered to Citrus World for purchase on a cash or participation
basis and Member agrees not to sell such fruit to others at a price lower than
that offered by Citrus World, or on a participation basis upon terms less
favorable than those offered by Citrus World.
10. Diversion of Fruit. Member agrees it will not permit any
citrus fruit now or hereafter comprising Fruit Owned or Controlled by Member to
be delivered to any canning or processing plant other than those of Citrus
World or designated by Citrus World during the period covered by this
Agreement, except:
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(a) Where a Grower or Member has made a bona fide sale or
transfer of ownership of all or part of a grove such
that the fruit therefrom is no longer available to
Member; or
(b) Where a Grower dies and such deceased Grower's heirs,
administrators, or executors desire to withdraw the
deceased Grower's groves such that the fruit
therefrom is no longer available to Member; or
(c) Where the Board of Directors of Citrus World has
permitted Member to make specified deliveries to
others.
11. Replacement of Grove Property. Whenever Member should occasion
a reduction in Member's designated Grove Property pursuant to the provisions of
paragraph 10(a) or (b) above, or due to the withdrawal of a Grower or for any
other reason, then Member may replace such property, provided, however, that:
(a) Member has actually suffered a reduction in the
amount of Member's Grove Property;
(b) the property to be replaced consists only of planted
acreage;
(c) the replacement shall be completed within two (2)
years from the date of the loss;
(d) Member will immediately notify Citrus World upon the
making of any such replacement; and
(e) the varieties of citrus fruit grown on the
replacement acreage shall be substantially the same
as that grown on the lost property unless otherwise
approved by Citrus World's Board of Directors.
All grove property added as replacement property pursuant to this paragraph
shall be deemed to be Grove Property as herein defined and included in the
properties identified pursuant to paragraph 3 hereof, but nothing herein shall
be deemed or construed as modifying the two year notice requirement for the
addition or removal of the replacement property or any other properties as set
forth in said paragraph 3, nor the obligation of Member to deliver to Citrus
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World the quantities of fruit specified by Member in the then current estimate
delivered by Member to Citrus World pursuant to said paragraph 3.
12. Fruit Exchange. If for pooling considerations, or in the
interest of Citrus World's plant efficiency, Fruit Owned or Controlled by
Member is, with the knowledge and consent of Citrus World, exchanged for other
fruit of like type and quality, then such exchange fruit shall nevertheless be
deemed to be Fruit Owned or Controlled by Member for the purposes of this
Agreement. Any such exchanges will be noted in the Certificate and opinion to
be submitted by Member pursuant to paragraph 5 hereof.
13. Origin and Rejection of Fruit. All fruit to be delivered by
Member under this agreement shall consist only of fruit grown upon groves
located within the State of Florida and such fruit, together with the
horticultural practices used in growing and harvesting the same, shall conform
in all respects to all applicable laws and regulations of the United States and
the State of Florida. Citrus World may, at its option, reject any and all fruit
that fails to pass State and/or Federal inspection or to conform with this
Agreement, and any loss or additional cost Citrus World may suffer thereby
shall be charged against Member.
14. Increase in Grove Property Acreage or Amount of Fruit. The
quantity of Member's Grove Property and/or the amount of fruit may be increased
but only in the following manner:
(a) On or before June 1 of each year, Citrus World will
consider an increase in the amount of Grove Property
acreage and/or total quantity of fruit to be handled
by it for the next ensuing Florida Citrus Season.
Beginning September 1, 1994, should Citrus World
determine to increase such acreage or fruit quantity
then such increase will be allocated to the then
current members of Citrus World in proportion to the
total number of shares of A, B
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and C stock held by each such member as of the
preceding August 31.
(b) The quantity of Grove Property listed by Member
pursuant to paragraph 3 may be increased or decreased
whenever such change is to consist solely of grove
properties that have been acquired by Citrus World
Employee option holders exercise of their options.
15. Liquidated Damages. Inasmuch as the remedy at law would be
inadequate and inasmuch as it would be impracticable and extremely difficult to
determine the actual damage resulting to Citrus World should Member fail to
deliver fruit hereunder, regardless of the cause of such failure (except as
provided in paragraph 18 hereof) Member hereby agrees to pay to Citrus World as
liquidated damages for breach of this agreement for all fruit which Member has
agreed to deliver hereunder but which Member has failed to deliver, the sum of
Seven Hundred and Fifty Dollars ($750.00) per acre for each acre the fruit from
which was not delivered in its entirety or Two Dollars ($2.00) per standard
field box for all diverted fruit. Both parties agree that this Agreement is one
of a series dependent for its true value upon the adherence by each and all of
the contracting parties to each and all of the said agreements, but the
cancellation of any other similar agreement or the failure of any of the
parties thereto to comply with the same, shall not affect the validity of this
Agreement.
16. Attorney's Fees. If any action whatsoever by reason of breach
or threatened breach of this Agreement is brought, the party that does not
prevail shall pay all costs thereof, including reasonable attorneys fees
expended or incurred in such proceedings.
17. Term and Termination. This Agreement shall commence upon its
execution by both parties and shall remain in effect until terminated by Member
which may be accomplished only as of September 1st of any year and only by
notifying Citrus World in writing at least two (2) years prior to the September
1st upon which such termination is to be
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effective. Provided, however, that Citrus World shall not be obligated to
release Member from this Agreement as long as Member is indebted to Citrus
World in any sum.
18. Force Majeure. Neither party to this Agreement shall be liable
for damages for failure to perform hereunder to the extent that performance by
either of them is made impossible or delayed by Act of God, war, fire,
equipment breakdown, strike, embargo, lockout, inability to obtain materials,
supplies or transportation or any other cause beyond the control of either of
said parties.
19. Bylaws and Rules. The By-Laws of Citrus World now in existence
and as hereafter amended, and all rules, regulations and orders promulgated by
Citrus World from time to time shall be parts of this Agreement and binding
upon the parties thereto.
20. Right of Offset. Citrus World shall have the right to offset
and deduct any sums that may become due to it from Member from amounts accruing
to Member under this Agreement whether such indebtedness to Citrus World arises
under this Agreement or otherwise.
21. No Oral Agreement. The parties agree that there are no oral or
other conditions, promises, covenants, representations or inducements in
addition to or at variance with any of the terms hereof, and that this contract
represents the voluntary and clear understanding of both parties fully and
completely.
22. Successors and Assigns. This Agreement shall inure to and be
binding upon the successors, assigns and/or legal representatives of both of
the parties hereto.
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IN WITNESS WHEREOF, both parties have executed this agreement as of
the day and year first above written by their duly authorized representatives.
Attest or Witness:
Patricia Lagoni CONSOLIDATED-TOMOKA LAND CO.
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Secretary
SEAL By: Hugh J. Veley
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V.P. Citrus
Attest or Witness:
David C. Ratha CITRUS WORLD, INC.
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Corporate Secretary
SEAL By: F.M. Hunt
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CITRUS WORLD
1994-95 UNIFORM MARKETING AGREEMENT
EXHIBIT "A"
CERTIFICATE OF COMPLIANCE
To the best of our knowledge and belief, the undersigned member of
Citrus World hereby certifies (a) that all fruit delivered to Citrus World by
the undersigned during the 1994-1995 Florida Citrus Season consisted of Fruit
Owned or Controlled by the undersigned as such terms are defined in Paragraph 1
of the Citrus World Uniform Marketing Agreement; and (b) that the total
quantity of such fruit has been delivered to Citrus World in accordance with
Paragraph 2 of said Agreement.
CONSOLIDATED-TOMOKA LAND CO.
By:
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Date
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CITRUS WORLD
1994-95 UNIFORM MARKETING AGREEMENT
EXHIBIT "B"
CERTIFICATE OF MEMBER'S INDEPENDENT AUDITOR
We have examined the accompanying Certificate of Compliance with the
Citrus World Marketing Agreement, Paragraphs 1 and 2, for the 1994-1995 Florida
Citrus Season as executed by Consolidated-Tomoka Land Co. (hereinafter referred
to as "Member.") Our examination was made in accordance with standards
established by the American Institute of Certified Public Accounts and,
accordingly, included such procedures as we considered necessary in the
circumstances.
In our opinion, based upon the books and records of Member, the
Certificate of Compliance referred to above correctly reflects compliance by
Member with the criteria established in the Citrus World Marketing Agreement,
Paragraphs 1 and 2.
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Auditor
By:
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Date
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