EXHIBIT 10.14
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ARTICLES OF PARTNERSHIP
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NT Xxxxxxxx X.X. ("Xxxxxxxx"), a Delaware Limited
Partnership, and Dresick Farms, Inc. ("Dresick"), a California
corporation, voluntarily associate themselves together as General
Partners pursuant to the terms and conditions set forth in these
Articles of Partnership.
ARTICLE 1 -- NATURE OF PARTNERSHIP
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Type of Business
1.01 The Partnership shall engage in the business of
acquiring and operating a produce packaging facility, and growing,
harvesting and packaging tomatoes and other fresh produce
("produce") and in such activities as may be incidental thereto.
In furtherance of its business purpose the Partnership will enter
into an independent custom farming agreement with Dresick, and may
do so with other produce growers, and will enter into a marketing
agreement with Xxxxxxxx, which agreements shall be independent and
separate and apart from the Partnership obligations of Dresick and
Xxxxxxxx.
Name of Partnership
1.02 The name of the Partnership shall be NT Xxxxxxxx &
Dresick Associates, a California General Partnership.
Term of Partnership
1.03 The Partnership commenced on 15 December 1992 and shall
continue until terminated by the Partners, provided, however,
neither Partner shall terminate the Partnership without written
consent of the other Partner for a period of three (3) years.
Place of Business
1.04 The principal administrative place of business of the
Partnership shall be in Watsonville, Santa Xxxx County, California
or at such other place or places as may from time to time be
agreed on by the Partners.
ARTICLE 2 -- FINANCIAL
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2.01 The initial capital of the Partnership shall be Seven
Hundred Fifty Thousand Dollars ($750,000) contributed by the
Partners as follows:
a. Dresick shall contribute to the Partnership the sum
of Two Hundred Fifty Thousand Dollars ($250,000) and shall have a
one-third (1/3) interest in the Partnership.
x. Xxxxxxxx shall contribute to the Partnership the
sum of Five Hundred Thousand Dollars ($500,000) and shall have a
two thirds (2/3) interest in the Partnership.
Additional Contributions to Capital
2.02 The Partners may be required to make additional
contributions to the capital of this Partnership. In the event a
Partner is unable to make a capital contribution when required,
the other Partner may make the contribution for and in behalf of
that Partner, which amount shall be treated as a loan to that
Partner, bearing interest at the prime rate or the rate at which
the individual Partners borrow funds (the higher of the two, if
there is a disparity), whichever is more. Any such sums loaned in
this manner shall be due as agreed by the Partners, or in the
absence of agreement, on demand. Neither Partner shall be allowed
to make a voluntary contribution to capital without the written
consent of the other Partner.
Withdrawal of Capital
2.03 No portion of the capital of the Partnership may be
withdrawn at any time without the express written consent of both
Partners.
Interest on Capital
2.04 Neither Partner shall be entitled to interest on its
contribution to the capital of the Partnership.
Loans to Partnership
2.05 Neither Partner may loan or advance money to the
Partnership without the written consent of the other Partner. Any
such loan by a Partner to the Partnership shall be separately
entered in the books of the Partnership as a loan to the
Partnership, shall bear interest at such rate as may be agreed on
by the lending Partner and the other Partner, and shall be
evidenced by a promissory note delivered to the lending Partner
and executed in the name of the Partnership by the other Partner.
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Books of Account
2.06 Complete and accurate accounts of all transactions of
the Partnership shall be kept in proper books, and both Partners
shall enter, or cause to be entered therein, a full and accurate
account of all its transactions on behalf of the Partnership.
Inspection of Books
2.07 The books of account and other records of the
Partnership shall, at all times, be kept in the principal
administrative place of business of the Partnership, and both of
the Partners shall, at all times, have access to, and may inspect
and copy, any of them. A duplicate set of the books of account
and other records of the Partnership shall be kept in a safe
deposit box at a bank to be selected by the Partners or with an
accountant to be selected by the Partners.
Method of Accounting
2.08 The books of account of the Partnership shall be kept
on an accrual basis.
Fiscal Year
2.09 The fiscal year of the Partnership shall end on 30 June
of each year.
Accountings
2.10 As soon after the close of each fiscal year as is
reasonably practicable, or at quarterly intervals as the Partners
shall decide, a full and accurate inventory and accounting shall
be made of the affairs of the Partnership, for the quarter or
fiscal year last ending. On such accounting being made, the net
profit or net loss sustained by the Partnership during such
quarter or fiscal year shall be ascertained and credited or
debited, as the case may be, in the books of the account of the
Partnership to the respective Partners in the proportions
specified in Paragraph 2.12 of these Articles.
Definition of Profits and Losses
2.11 The terms "net profits" and "net losses" as used in
these Articles shall mean the net profits and net losses of the
Partnership determined for each accounting period provided for in
these Articles according to rules and regulations promulgated in
the Internal Revenue Code.
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Profits and Losses
2.12 The net profits or net losses of the Partnership shall
be credited or charged, as the case may be, to the Partners as
follows: one-third (1/3) shall be credited or charged to Dresick,
two-thirds (2/3) shall be credited or charged to Xxxxxxxx.
Capital Accounts
2.13 An individual capital account shall be maintained for
each Partner consisting of its contribution to the initial capital
of the Partnership, any additional contributions to the
Partnership capital made pursuant to these Articles, and any
amounts transferred from a Partner's income account to its capital
account pursuant to these Articles. A Partner's capital account
shall be determinative of its interest in the Partnership, it
being the intent of the Partners, in the absence of express
agreement to the contrary, that Dresick shall have a one-third
(1/3) interest and Xxxxxxxx shall have a two-thirds (2/3)
interest. Additional capital contributions or transfers from the
income accounts shall be effected by or for each Partner in
accordance with these respective interests.
Income Accounts
2.14 An individual income account shall be maintained for
each Partner. At the end of each fiscal year or at quarterly
intervals as the Partners shall decide, each Partner's share of
the net profits or net losses of the Partnership shall be credited
or debited to its income account. All of each Partner's
distributive share of the net profits shall be paid to each
Partner within sixty (60) days following the close of the quarter
or fiscal year.
Bank Accounts
2.15 All funds of the Partnership shall be deposited in
accounts in the name of the Partnership at such bank or banks as
may from time to time be selected by both the Partners. All
withdrawals from any such account or accounts shall be made only
by check.
ARTICLE 3 -- RIGHTS AND DUTIES OF PARTNERS
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Time Devoted to Partnership
3.01 Both Partners shall devote as much time to the ordinary
business of the Partnership as may be required, and such
additional time as the exigencies of the business and
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extraordinary circumstances may require in the furtherance of such
business.
Compensation
3.02 Neither Partner in its capacity as a partner shall be
entitled to compensation for services rendered to the Partnership.
Dresick, in its capacity as an independent grower for the
Partnership, and Xxxxxxxx, in its capacity as the marketing agent
for the Partnership, shall each be entitled to compensation as
agreed by each with the Partnership.
Management
3.03 Xxxxxxxx shall manage the Partnership business on a
day-to-day basis. Both Partners shall have an equal voice in
major management decisions of the Partnership business such as,
for example, significantly expanding or reducing the size or
capacity or production volume of its harvesting or packaging
commitments, making major capital improvements, entering into
contracts with additional growers, or for different produce,
modifying the terms of any independent grower agreement or
marketing agreement, or encumbering or selling any of the
Partnership assets. Any differences arising between the Partners
as to matters connected with the Partnership business shall be
resolved and decided by negotiation and compromise.
Power to Incur Liabilities
3.04 Subject to the provisions of Paragraph 3.03, the power
to incur liabilities shall be distinguished as follows:
a. In its capacity as Managing Partner Xxxxxxxx shall
have sole and exclusive authority to bind the Partnership in
making contracts and incurring obligations in the name and on the
credit of the Partnership in the ordinary course of the
Partnership business. Xxxxxxxx shall be indemnified by the
Partnership for any act taken, or business decision made in good
faith in the ordinary course of business.
b. The consent and affirmative acts of both Partners
shall be required to bind the Partnership with respect to matters
outside the ordinary course of the Partnership business.
Reimbursement of Expenses
3.05 The Partnership shall indemnify a Partner for payments
made and liabilities reasonably incurred in the ordinary and
proper conduct of the Partnership business or for the preservation
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of the Partnership business or property. Direct costs shall be
reimbursed at the actual amounts expended. Indirect costs,
including overhead and administrative expenses, shall be
reimbursed as agreed by the Partners.
Prohibited Acts
3.06 Neither Partner shall, without the prior written
consent of the other Partner:
a. Sell any Partnership inventory at less than fair
market price;
b. Loan any Partnership funds to third parties;
c. Extend Partnership credit to any person a Partner
has notified the Partnership is not credit worthy, or trustworthy;
d. Incur any obligations in the name or on the credit
of the Partnership except in the ordinary course of the
Partnership business;
e. Become bail, surety, or endorser for any other
person;
f. Any loss sustained by the Partnership because of
the breach of this paragraph 3.06 by any Partner shall be deducted
from such Partner's share of the net profits of the Partnership,
or if the net profits of the Partnership for the fiscal year in
which the breach occurred are insufficient, from such Partner's
capital interest in the Partnership. In the alternative the
Partner may elect to pay the full sum in cash on demand.
Partner's Separate Debts
3.07 Each Partner shall pay and discharge as they become due
its separate obligations, and protect the other Partner and the
Partnership from all related costs, claims and demands.
Assignment of Interest
3.08 In the event either Partner elects to sell, assign,
mortgage, hypothecate or encumber all or any portion of its
interest in the Partnership, the other Partner shall have a right
of first refusal to purchase, accept the assignment, or otherwise
take the interest, or any part, being offering. A change for any
reason in the control of Dresick or Xxxxxxxx shall be deemed an
assignment by that Partner and permit exercise of a right of first
refusal by the other Partner, the purchase price to be determined
as set forth in Paragraph 4.04.
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ARTICLE 4 -- TERMINATION OF PARTNERSHIP
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Dissolution of Partner
4.01 The voluntary or involuntary dissolution of either
Partner shall effect a termination of that Partner's interest in
the Partnership.
Bankruptcy and Charging Order
4.02 The remaining Partner may by service of a written
notice stating the effective date thereon on both the Partner and
on the trustee in bankruptcy of such Partner or the judgment
creditor of such Partner who has obtained a charging order against
such Partner's interest, terminate such Partner's interest in the
Partnership:
a. If a Partner has been adjudged bankrupt pursuant to
a petition in bankruptcy filed by or against it under the
Bankruptcy Act of the United States;
b. Against whose interest in the Partnership a
charging order has been issued pursuant to Section 15028 of the
California Corporations Code and not removed within thirty (30)
days after it is issued.
Withdrawal of a Partner
4.03 Either Partner may voluntarily withdraw from the
Partnership by giving the other Partner at least thirty (30) days
notice of tis intention to do so; however, there shall be no such
voluntary withdrawal for a period of three (3) years from the
commencement of the partnership.
Option to Purchase Terminated Interest
4.04 On termination of the Partnership, or withdrawal of a
Partner, the remaining Partner shall have the option to purchase
the interest of the terminated or withdrawing Partner in the
assets and goodwill of the Partnership business by paying to such
Partner or the person legally entitled thereto the value of such
interest determined as provided in Paragraph 4.05 of these
Articles. The remaining Partner shall give notice of its exercise
of such option in the following manner:
a. If the Partnership is dissolved due to the
dissolution of the corporate Partner, by serving written notice of
exercise of such option on all of the shareholders of the
dissolved or dissolving corporate Partner within thirty (30) days
of receiving notification of the pending corporate dissolution.
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b. If the Partnership is dissolved by the voluntary
withdrawal of a Partner, by serving written notice of the exercise
of such option on the withdrawing Partner within thirty days after
service on the remaining Partner of the notice of withdrawal
provided in Paragraph 4.03 of these Articles.
c. If the Partnership is dissolved for the reasons
specified in Paragraph 4.02(a) or (b) of these Articles, by
serving written notice of the exercise of such option on both the
terminated Partner and its trustee in bankruptcy, or the judgment
creditor who secured a charging order against such Partner's
interest, at the same time the notice of termination of such
Partner's Partnership interest is served on said persons.
2. All accounts receivable due the Partnership that
are more than ninety calendar days old and not barred by the statute of
limitations at one-half their face value;
3. All accounts receivable due the Partnership that
are less than ninety (90) calendar days old at their full face value;
4. Goodwill and other intangible assets of the
Partnership at their fair cash market value.
Payment and Purchase Price
4.06 On exercise of the option to purchase the Partnership
interest of a withdrawing or terminated Partner, the remaining
Partner shall pay to the person or entity legally entitled thereto
the value of such interest determined as provided in Paragraph
4.05 of these Articles in the following manner:
One-fourth thereof in cash within ninety (90) days of
withdrawal or termination, if the Partners agreed on the price, or
within ninety (90) days of receipt by them of the report of the
appraisers provided for in Paragraph 4.05, and the balance in
thirty six (36) equal monthly installments commencing not later
than ninety days after the receipt of such report of appraisers.
Each monthly installment shall be applied first to interest at the
rate of ten percent (10%) per annum on the then remaining unpaid
principal balance of such purchase price from the date the
appraiser's report was received by the remaining Partner and then
to the reduction of the principal thereof.
Assumption of Partnership Obligations
4.07 On any purchase or sale of a Partnership interest being
made as in this Article provided, the remaining Partner shall
assume all the Partnership obligations and shall protect and
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indemnify the withdrawing or terminated Partner and the property
of such withdrawing or terminated Partner from liability for any
such obligation.
Publication of Notice
4.08 On any purchase and sale of a Partnership interest
being made as in this Article provided, the remaining Partner
shall at its own cost and expense, as soon as reasonably
practicable after giving notice of exercise of option to purchase
such interest, cause to be prepared, published, filed and served
such notices as may be required by law to protect the withdrawing
or terminated Partner from liability for future obligations of the
Partnership business.
Dissolution Without Sale
4.09 On dissolution of the Partnership other than as
provided in Paragraphs 4.01 through 4.08 of these Articles, the
affairs of the Partnership shall be wound up, the assets
liquidated, the debts paid and the remaining funds divided among
the Partners according to their respective interests in the
Partnership business.
ARTICLE 5 -- MISCELLANEOUS
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Notices
5.01 Any notices between the parties provided for or
permitted under these Articles or by law shall be in writing and
shall be deemed duly served when personally delivered to a
Partner, or in lieu of such personal service, when deposited in
the United States mail, certified, postage prepaid, addressed to
such Partner at the address given or to such other place as may
from time to time be specified in a notice given pursuant to this
paragraph as the address for service of notice on such Partner:
Dresick Farms, Inc. NT Gargiulo, L.P.
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxx XX Xxxxxxxxxxx, XX 00000
and
00000 Xxx 00 Xxxxx
Xxxxxx, XX 00000
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Consents and Agreements
5.02 Any and all consents and agreements provided for or
permitted by these Articles shall be in writing and a signed copy
thereof shall be filed and kept with the books of the Partnership.
Attorneys' Fees
5.03 Should any litigation be commenced between the parties
concerning any provision of these Articles or the rights and
duties of any person in relation thereof, the party prevailing in
such litigation shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum as and for
attorney's fees in such litigation which shall be determined by
the court in such litigation or in a separate action brought for
that purpose.
Sole and Only Agreement
5.04 This instrument contains the only agreement of the
parties relating to their Partnership and correctly sets forth the
rights, duties and obligations of each to the other as of its
date. Any prior agreements, promises, negotiations, or
representations not expressly set forth in these Articles are of
no force and effect.
Successors
5.05 This agreement and each of its terms and provisions
shall be binding upon the parties, and their successors and
assigns.
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Executed in Santa Xxxx County, California on __ January 1993
by NT Xxxxxxxx X.X. and in Fresno County, California on __ January
1993 by Dresick Farms, Inc.
NT Xxxxxxxx X.X.
a Limited Partnership
By: NT Xxxxxxxx X.X. Inc.
Its General Partner
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Vice President
Dresick Farms, Inc.
a California Corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
President
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FIRST AMENDMENT
TO
ARTICLES OF PARTNERSHIP
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This Amendment, effective 1 June 1993, is between NT
XXXXXXXX, X.X., a Delaware limited partnership ("Xxxxxxxx") and
DRESICK FARMS, INC., a California corporation ("Dresick").
RECITALS
X. Xxxxxxxx and Dresick formed a California general
partnership named "NT Xxxxxxxx & Dresick Associates" pursuant to
Articles of Partnership dated 14 January 1993 ("Articles of
Partnership").
B. The parties desire to amend the Articles of Partnership
as here set forth.
C. For good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as
follows:
1. The Articles of Partnership are amended by deleting
Section 3.03 (entitled "Management") in its entirety, and by
substituting the following:
Management.
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3.03 Xxxxxxxx shall manage the Partnership business
on a day-to-day basis. Notwithstanding the foregoing,
action on the following matters shall require the
approval of Dresick:
(i) Sale of all or substantially all of the
assets of the Partnership, whether by direct sale,
merger, consolidation or otherwise.
(ii) Pledging or otherwise encumbering all
or substantially all of the Partnership assets.
(iii) Making capital improvements having a
cost in excess of One Hundred Thousand and no/100
Dollars ($100,000.00) for each such capital
improvement.
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In the event of disagreement between the Partners
with respect to any matter which requires the approval
of both Partners, the Partners shall first attempt to
resolve such dispute by negotiation and compromise.
2. Except as here amended, the Articles of Partnership
remain in full force and effect.
Executed by Xxxx X. Xxxxxxxx for NT Xxxxxxxx, X.X., Inc. and
Xxxx Xxxxxxx for Dresick Farms, Inc., at Firebaugh, California on
25 June 1993.
NT XXXXXXXX, X.X.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Vice President
NT Xxxxxxxx, X.X., Inc.,
Its General Partner
DRESICK FARMS, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President
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