Exhibit 10.76
MARKETING AND SALES AGREEMENT
BETWEEN
VILLAGE FARMS, L.L.C.
AND
VILLAGE FARMS OF BUFFALO, L.P.
SEPTEMBER 4, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS..........................................................1
ARTICLE II
SCOPE OF DUTIES......................................................3
Section 2.01. Performance Duties...........................3
Section 2.02. Personnel....................................3
Section 2.03. On-Site Supervisor...........................3
Section 2.04. Marketing Plan...............................3
Section 2.05. Performance Standards........................4
ARTICLE III
MARKETING and SALES..................................................4
Section 3.01. Marketing...................................4
Section 3.02. Village Farms Trademark.....................4
Section 3.03. Quality Control.............................5
Section 3.04. Promotion...................................5
Section 3.05. Sales Prices................................5
Section 3.06. Billing and Collections.....................5
Section 3.07. Packaging, Shipping and Delivery............6
Section 3.08. Obligations of Owner........................6
Section 3.09. Greenhouse Products.........................6
Section 3.10. No Obstruction..............................6
ARTICLE IV
COMPENSATION AND PAYMENT.............................................6
Section 4.01. Basic Compensation...........................6
Section 4.02. Debt Service Coverage Ratio Test.............7
Section 4.03. Bonuses......................................7
Section 4.04. Payment of Bonuses...........................7
ARTICLE V
REPRESENTATIONS AND WARRANTIES.......................................8
Section 5.01. Representations and Warranties of
the Marketing Agent.......................8
ARTICLE VI
COVENANTS OF THE MARKETING AGENT.....................................8
Section 6.01. Books, Records and Reports...................8
Section 6.02. Employment Practices.........................8
Section 6.03. Nondisclosure................................9
Section 6.04. Compliance With Governmental Rules...........9
Section 6.05. Section 8 and
Section 15 Declarations....................9
Section 6.06. Section 9 Renewal............................9
ARTICLE VII
GENERAL LIABILITY....................................................9
Section 7.01. Indemnification..............................9
ARTICLE VIII
DEFAULTS AND REMEDIES.........................................................10
Section 8.01. Defaults.....................................10
Section 8.02. Damages for Termination Without
Cause......................................11
ARTICLE IX
TERM.................................................................11
Section 9.01. Term.........................................11
ARTICLE X
MISCELLANEOUS .......................................................11
Section 10.01. Notices.....................................11
Section 10.02. Severability................................12
Section 10.03. Amendment...................................12
Section 10.04. Assignment..................................12
Section 10.05. Relationship of the Parties.................12
Section 10.06. Headings; Etc...............................12
Section 10.07. Governing Law...............................12
Section 10.08. Parties in Interest; Limitation
and Rights of Others.....................13
Section 10.09. Arbitration.................................13
MARKETING AND SALES AGREEMENT
Village Farms of Buffalo, L.P. (the "Owner") intends to construct and
operate an approximate 18 acre greenhouse in Buffalo, New York (the
"Greenhouse"). The Greenhouse will be dismantled from its present location in
Pennsylvania and reconstructed by Mountain High Greenhouse, LLC on property
leased by Owner in Buffalo, New York (the "Contractor"), Agro Power Development,
Inc. (the "General Contractor" or "APD") and the Owner. Village Farms, L.L.C.
(the "Marketing Agent") and the Owner have entered into this Marketing and Sales
Agreement dated this 4th Day of September, 1997 to market the produce grown at
the Greenhouse.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, and in
reliance upon the representations and warranties of each party set forth herein,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms when used herein shall have the following meanings:
"Affiliate" of any Person shall mean each Person which, directly or
indirectly, controls or is controlled by or is under common control with such
designated Person and, without limiting the generality of the foregoing, shall
include (a) any Person which beneficially owns or holds ten percent (10%) or
more of any class of voting securities of such designated Person or ten percent
(10%) or more of the equity interest in such designated Person and (b) any
Person of which such designated Person beneficially owns and holds ten percent
(10%) or more of any class of voting securities or in which such designated
Person beneficially owns or holds ten percent (10%) or more of the equity
interest. For the purposes of this definition, the terms "controls", "controlled
by", and "under common control with", as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through the
Ownership of voting securities or by contract or otherwise.
"Agreement" shall mean this document and any exhibits and appendices hereto
as amended, modified or supplemented from time to time.
"Business Day" shall mean any day other than Saturday, Sunday or other day
on which banks are authorized to be closed in Texas, New York, North Carolina,
or New Jersey.
"Contract Year" initially shall be the period ending on December 31 next
following the Date of Initial Services and each calendar year thereafter.
"Date of Initial Services" shall mean the later of November 1, 1997, or the
date of Substantial Completion under the Commercial Greenhouse Dismantling and
Construction Contract, dated February 28, 1997 by and between Contractor and
General Contractor, as same may be amended, modified or supplemented from time
to time.
-1-
"Governmental Rule" shall mean any law, rule, regulation, ordinance, order,
code, interpretation, judgment or similar norm or decision of any Federal,
state, local or foreign government, authority, agency, court or other body or
entity having jurisdiction over the Site.
"Lender" shall mean Village Farms International Association and its
successors and assigns.
"License Agreement" shall mean the License Agreement dated February 13,
1996 between APD and the Marketing Agent, a copy of which is attached hereto as
Exhibit A, as same may be amended from time to time.
"Loan Agreement" shall mean the Loan Agreement to be entered into between
Owner and the Lender, as the same may be amended, modified or supplemented from
time to time.
"Manager" shall mean the person described in Section 2.01.
"Management Contract" shall mean the Management, Operation, and Maintenance
Contract of even date herewith between the Owner and the Manager, as same may be
amended, modified, or supplemented from time to time.
"Marketing Plan" shall mean the marketing plan prepared annually or more
often by Marketing Agent setting forth the items described in Section 2.04.
"On-Site Supervisor" shall mean the person described in Section 2.03.
"Party" shall mean Owner or the Marketing Agent, or any of them, as
appropriate, and their successors and permitted assignees.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or agency or political subdivision thereof.
"Product" shall mean all production derived from the Greenhouse, which
shall initially consist of tomatoes.
"Revenues" shall mean the gross proceeds derived from the sale of the
Product, plus interest income, and any and all other types of income received by
the Owner, less allowances, returns, and amounts received with respect to
freight and transportation charges, and excluding insurance proceeds.
"Site" shall mean the Greenhouse and its grounds located on South Park
Avenue in Buffalo New York.
"Term" shall mean the period provided for in Section 9.01. hereof.
"Uncontrollable Force" shall mean any of the following which are beyond the
reasonable control of a Party and which materially impairs the performance by
such Party of its duties and obligations hereunder and such material impairment
continues for a period of more than thirty
-2-
(30) days: (a) severe weather, flood, fire, lightning or other natural disaster
or act of God, (b) earthquake or subsidence, whatever its cause, (c) strikes or
other labor disturbances, whether or not involving employees of a Party, (d)
action or inaction by, or inability to obtain authorization or approval from,
any governmental agency or authority, which a Party is unable, after its best
efforts, to overcome, (e) compliance with any Governmental Rule, (f) war
(whether declared or not), sabotage, act of a public enemy, insurrection, riot
or civil disturbance, (g) defects in material equipment necessary for
performance of the Agreement, (h) any act by another party (other than the Party
claiming Uncontrollable Force, any Affiliate of such Party or the respective
agents, servants or employees of such Party or Affiliates), or (i) any other
similar act.
"Work" shall mean all duties and responsibilities of the Marketing Agent
under this Agreement.
ARTICLE II
SCOPE OF DUTIES
Section 2.01. Performance of Duties. As more specifically described in
Article III, the Marketing Agent shall furnish, manage and supervise certain
personnel necessary in connection with the marketing, sale, and distribution of
the Product, in accordance with the terms of this Agreement. Commencing on the
Date of Initial Services, the Marketing Agent shall participate in the planning
and start-up of the Greenhouse. The On-Site Supervisor (as defined herein in
Section 2.03) shall be available at the Site on a full time basis, commencing on
November 1, 1997. The operation of the Greenhouse and the production of the
Product shall be the primary responsibility of Village Farms of Delaware, L.L.C.
(the "Manager") as defined in the Management Contract.
Section 2.02. Personnel. The Marketing Agent shall make available for the
performance of its duties under the Agreement, sufficient personnel (each of
whom will be properly trained and qualified to undertake their respective
assigned duties) and support systems and services as are necessary or desirable
to assure the performance of Marketing Agent's responsibilities under this
Agreement.
Section 2.03. On-Site Supervisor. The Marketing Agent shall identify one
competent individual to act in the capacity of On-Site Supervisor. The On-Site
Supervisor shall be responsible on a day-to-day basis for the marketing and
sales of the Product and shall be supervised by the Marketing Agent. The
selection and continued employment of the On-Site Supervisor shall be subject to
the approval of Owner, which approval shall not be unreasonably withheld. The
On-Site Supervisor shall be an employee of the Owner.
Section 2.04. Marketing Plan. Within thirty (30) days from receipt of a
copy of the preliminary business plan and budget for the first year of
operations of the Greenhouse, which is to be prepared by the Manager pursuant to
the Management, Operation and Maintenance Contract of even date herewith, and
approved by the Owner, the Marketing Agent will provide to the Owner and the
Lender a preliminary Marketing Plan for the first year of operations which shall
include the strategy for marketing efforts for the upcoming year, target
customers and geographic areas for penetration, and such other information which
is customarily included in a produce marketing plan, and which will also set
forth such other information as the Owner may
-3-
reasonably request. In addition, within thirty (30) days after receipt by the
Marketing Agent of each subsequent business plan and budget prepared by the
Manager (the "Business Plan"), which Business Plan is to be submitted by the
Manager forty-five (45) days prior to December 31 of each year (except for the
first Contract Year), the Marketing Agent shall submit to the Owner, with a copy
to the Lender, the Marketing Plan for the next succeeding Contract Year
corresponding to the year covered by such Business Plan. The Marketing Plan
shall always be prepared in conjunction with the Business Plan and shall set
forth in form and detail reasonably satisfactory to Owner, the Marketing Agent's
plans for such Contract Year. The Marketing Plan shall be subject to the
approval of Owner, such approval not to be unreasonably withheld.
Section 2.05. Performance Standards. The Marketing Agent shall be
responsible for the sales of the Greenhouse produce in accordance with the
Marketing Plan. The Marketing Agent shall be responsible for the means, methods
and techniques used in the marketing and sale of the produce of the Greenhouse.
ARTICLE III
MARKETING AND SALES
Section 3.01. Marketing. During the period beginning on the Date of Initial
Services and ending at the expiration of the Term of this Agreement, the
Marketing Agent shall use its best efforts to market all the Product of the
Greenhouse in accordance with the Marketing Plan in order to derive the greatest
possible Revenues therefrom. The Marketing Agent warrants that, during each
Contract Year, it will sell One Hundred (100%) Percent of the Premium Quality
tomatoes produced by the Greenhouse in accordance with the terms and conditions
of this Agreement and the Marketing Plan (as it is updated from time to time).
Section 3.02. Village Farms Trademark. Village Farms is a trademark
registered with the U. S. Patent and Trademark Office, owned by APD, a New York
Corporation, an affiliate of the Marketing Agent. APD has authorized the use of
the Village Farms trademark by the Marketing Agent and the Owner in conjunction
with this Agreement. The Owner hereby acknowledges that the Marketing Agent
and/or APD has full right and authority to the unlimited use of this trademark
on behalf of themselves and other producers located throughout the United States
and abroad, and that the trademark is not limited to use in conjunction with
tomatoes, but may be used for any other type of produce, at APD's and the
Marketing Agent's discretion. All Premium Quality tomatoes produced by the
Greenhouse will be labeled and/or otherwise identified by the Village Farms
trademark, or such other name as determined by the Marketing Agent (with the
consent of the Owner) which would provide a greater profit to the Owner. Subject
to the provisions of Section 9.01. herein, the Owner shall have the right to use
the trademark, Village Farms, following the termination of this Agreement, until
the Construction Loan Maturity Date (as defined in the Loan Agreement) provided
that (i) it pays the Marketing Agent the sum of $100,000 per year, with the
first payment due within thirty (30) days prior to the effective date of the
termination, and the subsequent payments due within thirty (30) days prior to
the anniversary of the termination, (ii) the use of the trademark is limited to
fruits and vegetables, including tomatoes produced at the Greenhouse in Buffalo
New York, and (iii) the Owner agrees in writing to abide by the conditions and
restrictions of the License Agreement, as same may be amended from time to time
provided that no amendment after the date hereof that is or would be adverse to
the Owner shall be effective against the Owner without the Owner's
-4-
-written consent. In the event the Owner fails to pay any of the required
payments, the right to use the trademark shall terminate upon the expiration of
the period for which payment was last received. The Owner may, at its sole
expense, record a memorandum of the license granted hereby with the U.S. Patent
and Trademark Office, and APD by its consent hereto agrees to sign such further
documents, including the memorandum as may be necessary to record the license
granted hereby. The terms of this provision shall survive termination of this
Agreement.
Section 3.03. Quality Control. The On-Site Supervisor shall exercise its
reasonable discretion in determining which of the Product of the Greenhouse
qualifies as Premium Quality. Best efforts will also be used to market tomatoes
which are of lesser quality, except for those tomatoes, which in the sole
discretion of the Marketing Agent, have no market value due to their inferior
quality. The Marketing Agent shall have total discretion (subject to the
requirement that it act reasonably) over which, if any of the lesser quality
tomatoes shall be labelled or identified with the trademark "Village Farms". The
Marketing Agent will have sole and absolute discretion (subject to the
requirement that it act reasonably) over the use of the trademark, in order to
maintain the high quality associated with the trademark, and to preserve the
market share of the Village Farms tomatoes, which will ultimately serve to
benefit the Owner in the sale of its Product.
Section 3.04. Promotion. Marketing Agent, in conjunction with APD, engages
in, and shall continue to engage in general advertising, marketing and
promotional efforts in the food industry, on behalf of the trademark Village
Farms, and shall maintain these general marketing efforts throughout the term of
this Agreement, on at least the same level as is currently being employed, at
the sole expense of the Marketing Agent. In the event Marketing Agent deems it
to be in the best interests of the Owner to engage in strictly local advertising
efforts for the sole benefit of the Owner, such advertising campaign efforts
shall be detailed in the Marketing Plan prepared by the Marketing Agent pursuant
to the terms of this Agreement. In the event said local advertising plan is
approved by the Owner, the Owner shall be solely responsible for the costs of
same.
Section 3.05. Sales Prices. The Owner acknowledges that the sale of its
Product by the Marketing Agent is based on market demands and price fluctuation
can occur seasonally and otherwise. Marketing Agent shall use commercially
reasonable efforts to obtain the highest possible price for the Product.
Section 3.06. Billing and Collections. At its cost, the Marketing Agent
will provide billing and collection services to the Owner consistent with the
Marketing Plan and such direction as may be reasonably given by the Owner to the
Marketing Agent from time to time. All customers of the Owner shall be billed
under the name Village Farms. The Marketing Agent will maintain accurate books
and records of all sales, billing and collections, and shall prepare a monthly
report which shall be made available to the Owner for review. Monies collected
by the Marketing Agent on behalf of the Owner, shall be held by the Marketing
Agent as trustee in a separate account for the benefit of the Owner, and shall
be remitted to Owner (without deduction) on a weekly basis. Although the
Marketing Agent is responsible for billing and collection, the Owner shall bear
the risk of nonpayment by any of its customers, and shall determine if any
customers should be dropped, due to poor payment experience.
-5-
Section 3.07. Packaging, Shipping, and Delivery. The Marketing Agent shall
be responsible for the instructing and training of Owner's employees who will
physically be responsible for the proper packaging of the Product. Marketing
Agent shall be responsible for all shipping and delivery arrangements for the
Product, at Owner's sole expense.
Section 3.08. Obligations of Owner. Throughout the Term of this Agreement,
Owner shall furnish all Product exclusively to the Marketing Agent, and shall
use its best efforts to produce Premium Quality tomatoes, in the quantity
established in the business plan and budget prepared annually by the Manager,
pursuant to the terms of the Management Contract. All personnel of the
Greenhouse operation shall at all times be employees of Owner.
Section 3.09. Greenhouse Products. It is contemplated by this Agreement
that the Product of the Greenhouse will be tomatoes. However, if in the opinion
of the Marketing Agent, the Greenhouse operation can be made more profitable by
the production of produce more profitable than tomatoes, then the Marketing
Agent, with the prior written consent of the Owner, may instruct the Manager to
produce a substitute product, and Marketing Agent's duties will also cover this
substitute product.
Section 3.10. No Obstruction. Until the termination of this Agreement,
Owner shall not, either through its agents or employees, take any action that
would prevent the Marketing Agent from marketing the Product in accordance with
this Agreement nor take any action that would materially obstruct the production
of Product at the Site, unless such prevention or obstruction is caused by
Uncontrollable Force or by the Marketing Agent or any of its Affiliates or any
of their respective employees, servants or agents.
ARTICLE IV
COMPENSATION AND PAYMENT
Section 4.01. Basic Compensation. In consideration of the performance of
Marketing Agent's obligations under the Agreement, Owner shall pay to the
Marketing Agent the sum of Two Hundred ($200,000) Thousand Dollars per Contract
Year (the "Compensation") in twelve equal monthly installments beginning on the
1st day of the second month following the Date of Initial Services and on each
anniversary thereafter. For the period from the Date of Initial Services through
the first day of the month following the Date of Initial Services, the Marketing
Agent shall be entitled to a fee equal to the product of (i) the Compensation
and (ii) a fraction which shall be the number of weeks of such period divided by
52, such amount to be payable on the first day of the month following the Date
of Initial Services. Such compensation will be adjusted each January 1 of each
Contract Year by the same percentage change in the Consumer Price Index ("CPI"),
provided the adjustment shall not cause the Compensation to be less than the
current Contract Year's Compensation. If for any reason the Marketing Agent is
unable to perform its obligations hereunder, except as a result of termination
of this Agreement because of a default by the Marketing Agent hereunder or in
accordance with Section 9.01. herein, then the Marketing Agent shall be entitled
to the continuation of the Compensation as though the Agreement had been
performed by the Marketing Agent, provided however, that in the event that the
Marketing Agent or Owner is unable to perform its obligations under this
Agreement because of an Uncontrollable Force, then the Compensation shall be
discontinued at any time after the
-6-
later of the first anniversary of the event creating the Uncontrollable Force or
the date on which the Marketing Agent's continued performance was disrupted.
Section 4.02. Debt Service Coverage Ratio Test. The provisions of this
Section 4.02. shall remain in effect only for so long as the Owner is party to
any Loan Agreement with the Lender, or is a party to any Loan Agreement related
to the refinancing of the obligations owing to the Lender. In the event Owner's
actual debt service coverage ratio as defined in the Loan Agreement ("DSCR"),
for any calendar year falls below 1.5, then, in that event, no Compensation
shall be paid for any portion of that calendar year, however, the right to
Compensation shall accrue, provided the DSCR is greater than 1.0, and shall be
paid to the Marketing Agent in one sum, immediately following Owner's
achievement of a DSCR of at least 1.5. In the event that compensation was paid
for any portion of the calendar year during which Owner's actual DSCR fell below
1.5, those payments shall be deducted from future payments due the Marketing
Agent hereunder, until the Owner has recouped same. Immediately upon the Owner
achieving a DSCR of 1.5, any payments which were withheld or recouped by Owner
shall be paid to the Marketing Agent in one sum. The Owner's DSCR shall be
measured as of December 31 of each year during the term of this Agreement.
Section 4.03. Bonuses. The Marketing Agent shall be entitled to a bonus for
each calendar year in which the Owner's actual DSCR equals or exceeds 1.5. The
Owner's DSCR shall be measured in accordance with Section 4.02. above. In the
event the Owner's actual DSCR equals or exceeds 1.5 but is less than 2.0, the
bonus shall be ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000.00); if the
actual DSCR equals or exceeds 2.0 but is less than 2.5, the bonus shall be TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00); if the actual DSCR equals or
exceeds 2.5 but is less than 3.0, the bonus shall be THREE HUNDRED SEVENTY FIVE
THOUSAND DOLLARS ($375,000.00); and, if the actual DSCR equals or exceeds 3.0,
the bonus shall be FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). The foregoing
bonus amounts shall be automatically adjusted upward each January 1 of each
Contract Year if the Consumer Price Index ("CPI") for that year shows an
increase; the adjustment shall be equal to the percentage change in the CPI for
that calendar year. In the event that the Owner has no debt service whatsoever,
under the Loan Agreement or otherwise, the Marketing Agent shall be entitled to
the maximum bonus payable hereunder, but only if the Partners of the Owner shall
have received in the aggregate cash distributions of Net Distributable Cash (as
defined in the Amended and Restated Agreement of Limited Partnership of the
Owner dated as of September 4, 1997 in a cumulative amount of $1,000,000 for
each such calendar year during which the Owner had no debt service. The terms of
this provision shall survive termination of this Agreement for the year of
termination.
Section 4.04. Payment of Bonuses. Bonuses shall be paid quarterly in
arrears based upon the projected DSCR contained in the business plan and budget
to be prepared by the Manager each year, pursuant to the Management Contract.
The Manager shall periodically review its projection of that year's DSCR, and,
if necessary, revise same to reflect the more current information available to
the Manager. If the projected DSCR is revised, either upward or downward to a
different threshold, the quarterly payment of the estimated bonus shall be
adjusted accordingly. In the event it appears, based upon the revised projected
DSCR, that the Marketing Agent has received overpayments, such overpayments
shall be deducted from future quarterly bonus payments until such overpayments
have been recouped. In the event the
-7-
Marketing Agent's projected bonus for that year has increased based upon the
revised projected DSCR, the shortfall which resulted from the quarterly payments
made based upon the prior projected DSCR shall be paid to the Marketing Agent
with its next regular adjusted quarterly bonus payment. Upon the determination
of the actual DSCR, in the event the Marketing Agent had received a Bonus for
the prior Contract Year, to which it was not entitled, and Owner has not yet
recouped same, such overpayment may be offset against either the Compensation
payable hereunder or against future Bonus payments, until it is recouped. In the
event any Bonus was earned which has not yet been paid, the balance of the Bonus
earned shall be payable in one sum within thirty (30) days of the determination
of Owner's actual DSCR. In the event this Agreement has been terminated, any
Bonuses which Marketing Agent received to which it was not entitled, shall be
immediately due and payable to the Owner, upon the determination of such
overpayment.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties of the Marketing Agent. The
Marketing Agent represents and warrants to Owner that it has substantial
experience in the marketing of tomatoes and that the On-Site Supervisor shall
either have substantial experience in the marketing of tomatoes, or shall have
been trained by a person with substantial experience in the marketing of
tomatoes. The Marketing Agent is a limited liability company duly organized and
validly existing under the laws of the State of Delaware. The Marketing Agent's
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly authorized by all requisite action on the part of the
Marketing Agent and this Agreement constitutes the Marketing Agent's legal,
valid and binding obligation, enforceable against the Marketing Agent in
accordance with its terms. The Marketing Agent's execution and delivery of this
contract and the performance of its obligations hereunder will not conflict
with, violate or result in a default under the Marketing Agent's certificate of
formation or operating agreement or any mortgage, indenture, agreement,
instrument or other contract to which the Marketing Agent is a party or by which
the Marketing Agent is bound.
ARTICLE VI
COVENANTS OF THE MARKETING AGENT
Section 6.01. Books, Records and Reports. The Marketing Agent shall
maintain books and records and shall prepare for the benefit of Owner, a monthly
report showing the sales and collections of the Product, and such other matters
as the Owner may, from time to time, reasonably request be included in such
reports. All such books, records and reports shall be the sole and exclusive
property of the Owner, and the Marketing Agent shall keep such books and records
in such place or places so as to provide Owner (and its authorized
representatives) with maximum access thereto and the ability to make copies
thereof.
Section 6.02. Employment Practices. The Marketing Agent shall comply with
the applicable requirements of Executive Orders Nos. 11246 (Equal Opportunity
and Certification of Nonsegregated Facilities), 11701 (Affirmative Action for
Disabled Veterans and Handicapped of the Viet Nam Era), 11758 (Affirmative
Action for Handicapped Workers), 11458 and 11625
-8-
(Minority Business Enterprise) and all other Governmental Rules relating to
employment practices to the extent applicable.
Section 6.03. Nondisclosure. All reports, records and other information
related to the Site, the Greenhouse, the operations of the Owner, and the
performance of the Marketing Agent of its duties hereunder shall not be used by
the Marketing Agent for any purposes other than those contemplated hereby or
pursuant to the written consent of the Owner and shall not be disclosed by the
Marketing Agent to any other party or any other person or entity except with the
prior written consent of the Owner. Furthermore, the Marketing Agent shall not
copy or reproduce any such information without the written consent of the Owner
(other than such reasonable copies as may be necessary to perform its duties and
obligations under this Agreement). The Marketing Agent shall also take
reasonable precautions to ensure against any breach of the obligations contained
herein which shall be no less stringent than the precautions and procedures that
it uses to protect its own proprietary information and which shall, at a
minimum, be deemed to include, without limitation, taking precautions to ensure
that it will only make such information available to those of its employees who
have a need to know it. Upon the expiration or termination of this Agreement,
Marketing Agent shall immediately return to the Owner all such information and
all whole or partial copies thereof and all other materials that may include, in
whole or in part, such information. All rights, whether arising under copyright,
patent, trade secret, or other laws, to such information are hereby reserved by
the Owner.
Section 6.04. Compliance With Governmental Rules. The Marketing Agent shall
at all times market the Product and perform its other duties and obligations
hereunder in accordance with all applicable Governmental Rules. The Marketing
Agent shall be liable for all fines, fees, penalties, damages or other costs
imposed by a governmental authority imposed on or incurred or suffered by the
Owner which are attributable to Marketing Agent and/or its agents, servants and
employees, in connection with the marketing and sales of the Product and the
performance of its other duties and obligations hereunder.
Section 6.05. Section 8 and Section 15 Declarations. The Marketing Agent
shall either cause APD to file, or shall itself, file during the period between
July 28, 1997 and July 28, 1998, Section 8 and Section 15 Declarations, required
under 15 U.S.C. ss. 1058 and 15 U.S.C. ss. 1065 to extend the duration of the
initial registration of the Trademark and to establish the Trademark as
incontestable.
Section 6.06. Section 9 Renewal. The Marketing Agent shall either cause APD
to file, or shall itself, file within six months prior to the expiration of the
original registration of the Trademark, or any renewal thereof, an application
for renewal of registration under 15 U.S.C. ss. 1059.
ARTICLE VII
GENERAL LIABILITY
Section 7.01. Indemnification. The Marketing Agent shall indemnify and save
harmless Owner and Lender, and their respective directors, officers, agents, and
employees from and against (i) any and all loss, damage, injury, liability and
claims thereof for injury to or death of a person, including, but not limited
to, personnel of the Marketing Agent, Lender and Owner, (ii)
-9-
any and all loss of or damage to property and (iii) any and all loss of income
by the Owner, resulting from the Marketing Agent's performance of this Agreement
to the extent the same is caused by the negligence or willful misconduct of the
Marketing Agent, any of its Affiliates, or any or their respective directors,
officers, agents or employees. Owner shall indemnify and save harmless the
Marketing Agent and Lender, and their respective directors, officers, agents,
and employees from and against (i) any and all loss, damage, injury, liability
and claims thereof for injury to or death of a person, including, but not
limited to, personnel of Owner, Lender and the Marketing Agent, (ii) any and all
loss of or damage to property, and (iii) any and all loss of income by the
Marketing Agent, resulting from the Owner's performance of this Agreement to the
extent the same is caused by the negligence or willful misconduct of Owner, any
of its Affiliates, or any of its directors, officers, agents or employees.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01. Defaults. Upon the failure of any Party to substantially
comply with any of the obligations of such Party hereunder and continued
noncompliance for a period of thirty (30) days (except in the case where such
failure will result in injury to or damage or loss of perishable Product, in
which case the cure period shall be five (5) days) after written notice of the
noncompliance is sent to such Party, the non-defaulting Party may, at its
option, by written notice to the defaulting Party, declare this Agreement to be
in default and at any time thereafter the non-defaulting Party may, at its sole
discretion, (a) exercise any right or pursue any remedy that may be available
under applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof and/or (b) terminate this
Agreement. The exercise of any rights or pursuit of any remedies pursuant to
this Agreement shall not relieve the defaulting Party of any of its obligations
and liabilities hereunder, all of which shall survive such exercise or pursuit.
To the extent permitted by law, and subject to any mandatory requirements of
applicable law, and further subject to Section 8.02. each and every right, power
and remedy herein specifically given to the non-defaulting Party or otherwise in
this Agreement shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given, or now or hereafter existing
at law, equity or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised or pursued from
time to time and as often in such order as may be deemed expedient by the
nondefaulting Party, and the exercise or pursuit or the beginning of the
exercise or pursuit of any right, power or remedy shall not be construed to be a
waiver of the right to exercise or to pursue at any time or thereafter any other
right, power or remedy. No delay or admission by a Party in the exercise of any
right or power or in the pursuit of any remedy may impair any such right, power
or remedy or be construed to be a waiver of any default on the party of the
other Party or to be an acquiescence therein. No expressed or implied waiver by
a Party of any default hereunder shall in any way be, or be construed to be, a
waiver of any future or subsequent default hereunder. Neither Party shall be
considered to be in default for failure to perform, or delay in performing, any
obligation under this Agreement if performance is prevented, hindered or delayed
by an Uncontrollable Force (but only for so long as such Uncontrollable Force
continues unabated). In such event, the Party which is unable, or anticipates
being unable, to perform shall (a) promptly notify the other Party in writing of
the nature, cause, date of commencement and expected duration of any such delay,
(b) indicate to what extent it will be prevented from performing and (c)
exercise due diligence to overcome such inability to perform with all
-10-
reasonable dispatch. In the event a Party claims excuse of performance as a
result of an Uncontrollable Force which continues unabated for more than one
hundred twenty (120) days, the Party that is not affected by such Uncontrollable
Force shall have the option to terminate this Agreement on written notice to the
other Party.
Section 8.02. Damages for Termination Without Cause. Notwithstanding
anything to the contrary in section 8.01., the Parties agree that should Owner
elect to terminate the Agreement without cause at any time, pursuant to Section
9.01. herein, then Owner shall pay as liquidated damages to the Marketing Agent
a sum equal to one-fourth (1/4) of the annual amount of Compensation in effect
at such early termination, which shall be Owner's sole and exclusive liability
and Marketing Agent's sole and exclusive remedy, for such early termination
without cause.
ARTICLE IX
TERM
Section 9.01. Term. Subject to Article VIII and Section 3.01., this
Agreement shall continue to be in effect for fifteen (15) years from the Date of
Initial Services; provided, however that the Term may be extended for additional
periods on terms acceptable to both Parties, such terms to be agreed upon not
later than three months prior to the expiration of the Term. Notwithstanding the
foregoing, the Owner shall be permitted to terminate this with or without cause,
upon ninety (90) days written notice to the Marketing Agent, subject to the
terms of the Loan Agreement. In the event the Owner terminates the Agreement
without cause, the right of the Owner to use the trademark, Village Farms, shall
terminate simultaneously with this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01. Notices. Unless otherwise specifically provided herein, all
notices, requests and demands and other communications hereunder must be in
writing and shall be deemed to have been duly given (i) when delivered
personally, (ii) when sent by telefax to the telefax number below and followed
by a confirmation transmitted by an additional mode of communication provided
for herein, (iii) the second day following the day on which the same has been
delivered prepaid to a national (only in the case of notices within the
continental United States) or an international air courier service, or (iv) when
received if sent by the mails, certified or registered, postage prepaid, in each
case addressed to the party to whom such notice is being given at the following
addresses:
OWNER: Village Farms of Buffalo, L.P.
c/o Agro Power Development, Inc.
00 Xxxxx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: President
Telefax: 000-000-0000
and
-11-
Village Farms of Buffalo, L.P.
c/o Cogentrix of Buffalo, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telefax: 000-000-0000
MARKETING
AGENT: Village Farms, L.L.C.
00 Xxxxx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: President
Telefax: 000-000-0000
Any Party may change the address(es) to which notices to it are to be sent by
giving notice of such change to the other Parties in accordance with this
section.
Section 10.02. Severability. Any provision of this Agreement that shall be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent permitted
by applicable law, the Marketing Agent and Owner hereby waive any provision by
law that renders any provision hereof prohibited or unenforceable in any
respect.
Section 10.03. Amendment. Neither this Agreement nor any other terms hereof
may be terminated, amended, supplemented, waived or modified orally, but only by
an instrument in writing signed by the Party against which enforcement of the
termination, amendment, supplement, waiver or modification shall be signed.
Section 10.04. Assignment. Neither Party may assign any of their respective
rights under this Agreement without the prior written consent of the other
Party; provided, however, that Owner may assign its rights hereunder to the
Lender. Any assignment not permitted by this Section 10.04 shall be void.
Section 10.05. Relationship of the Parties. It is agreed and understood by
the Parties that the Marketing Agent is an independent contractor with respect
to Owner. No action, admission or instruction shall be deemed to make the
Marketing Agent an employee, agent or partner of Owner or to create any other
relationship among the Parties.
Section 10.06. Headings; Etc. The Table of Contents and headings of the
various articles and sections of this Agreement are for the convenience of
reference only and shall not modify, define or limit any other terms and
provisions of this Agreement.
Section 10.07. Governing Law. This Agreement shall in all respects,
including all matters of construction, validity and performance, be governed by
and construed in accordance with the laws of the State of New York.
-12-
Section 10.08. Parties in Interest; Limitation and Rights of Others. The
provisions of this Agreement shall be binding upon, and inure to the benefit of,
the Parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, whether expressed or implied, shall be construed to
give any Person (other than the Parties hereto and their respective successors
and permitted assignees) any legal or equitable right, remedy or claim under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
Section 10.09. Arbitration. (a) In the event a dispute arises between or
among the Parties relating to the terms of this Agreement and any Party gives
written notice of such dispute to the other Party, then each of the Parties
involved in such dispute shall refer the dispute to its senior management. The
senior management of each Party shall meet and confer regarding the resolution
of the dispute. In the event a resolution of such dispute is not reached within
30 days of the written notice, then either of the Parties may submit the dispute
to arbitration in accordance with Section 10.09.(b).
(b) Arbitration of disputes pursuant to this Section 10.09.(b) shall be
held in New York, New York, unless otherwise agreed to by the Parties, under the
commercial arbitration rules of the American Arbitration Association, and shall
be heard by three arbitrators selected in accordance with such rules. Each
arbitrator shall have at least five years experience in the United States in a
profession or professions related to the subject matter involved in the dispute
and shall not be a past or present officer, director or employee of, or have any
interest in or material relationship with, any Partner or any Affiliate of any
Partner. Any arbitral award shall be final and binding and may be entered by any
Party in any state or Federal court having jurisdiction thereof. Costs of
arbitration (including reasonable attorney's fees and arbitration costs) shall
be paid either equally or by the Parties to the arbitration or in accordance
with the decision of the arbitrators.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed by the respective officers thereunto duly authorized as of the date and
year first above written.
VILLAGE FARMS, L.L.C.
By: Agro Power Development, Inc., its
managing member
By:_____________________________________
Name: J. Xxxxx Xxxx
Title: Senior Vice President
VILLAGE FARMS OF BUFFALO, L.P.
By: Cogentrix of Buffalo, Inc.,
Partner
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
-13-
Consent and Agreement
Agro Power Development, Inc. ("APD") hereby joins in this Marketing and
Sales Agreement (the "Agreement") (a) for the express purpose of agreeing to the
terms and provisions set forth in Section 3.02. hereof; (b) to represent and
warrant to Village Farms of Buffalo, L.P. (the "Owner") that APD owns all right,
title and interest in and to the trademark "Village Farms" (the "Trademark") and
that APD has the right to enter into the agreement set forth in this consent and
agreement; and (c) certifying that a true and correct copy of the License
Agreement between APD and Village Farms, L.L.C. ("VF") licensing the Trademark
to VF is attached to the Agreement as Exhibit A.
AGRO POWER DEVELOPMENT, INC.
By:_________________________________
J. Xxxxx Xxxx
Senior Vice President
-14-
