Exhibit 10(oo) to Form 10-K
For Year Ended December 31, 2001
JOINT VENTURE AGREEMENT
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THIS AGREEMENT, made and entered into as of this 1st day of September, 2001
by and between THE DELTONA CORPORATION, a Delaware corporation authorized to do
business in the State of Florida ("Deltona") and FIVE POINTS TITLE SERVICES
COMPANY, INC., AS TRUSTEE FOR SCAFHOLDING B.V., a Netherlands corporation
("Scafholding") , Deltona and Scafholding being hereinafter sometimes jointly
called the "Venturers" and individually called "Venturer".
RECITALS
A. Deltona has and will be applying to the Xxxxxx County Tax Collector and
the Washington County Tax Collector to purchase tax certificates on properties
owned by others in its subdivisions where delinquent taxes exist (the
"Property"). Deltona and/or Scafholding may have purchased or may in the future
purchase from others Property located in Xxxxxx Xxxx Subdivision and Sunny Hills
Subdivision, Florida, respectively. If tax certificates are not paid by the
owners of the Property, a tax deed may be applied for by Deltona, as Developer
of the Property.
B. Scafholding is prepared to finance the purchase of the Property, the tax
certificates for the Property and eventually the tax deeds for the Property.
C. The Venturers desire to enter into a joint venture for the purpose of
administration of the purchase of the tax certificates, applications for the tax
deeds, administration, acquisition and sale of the Property and payment of costs
associated therewith.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged and of the mutual covenants and undertakings contained
herein and benefits to accrue to each of the parties hereto, the Venturers agree
as follows:
1. Formation and Purpose of the Venture.
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The Venturers hereby associate themselves into and form a joint venture
(the "Venture"), under the laws of the State of Florida for the purposes of
owning and selling Land, for sale, marketing and administration of the Property
in order to generate maximum profit to the venture.
2. Name of the Venture.
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The Venture created hereunder shall be known as the Scafholding Venture.
Fictitious name certificates shall be filed in any jurisdiction in which the
filing of a fictitious name certificate is required by law.
3. Term of the Venture.
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The term of the Venture shall commence on the date hereof and shall
terminate on December 31, 2011, unless sooner dissolved pursuant to any
provisions hereof, or unless extended beyond such period by agreement of both
Venturers; however, the Venture shall continue after the dissolution date for
the sole purpose of winding up its business and affairs as provided for in this
Agreement.
4. Office of the Venture.
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The principal office of the Venture shall be 0000 XX 000xx Xxxxxx Xxxx,
Xxxxx, Xxxxxxx 00000, or at such other place as shall be agreed upon from time
to time by the Venturers.
5. Contributions to the Venture.
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A. Scafholding shall provide the Scafholding Venture with funds sufficient
for acquisition of Property and the tax certificates and the tax deeds for
Property, as well as provide working capital as determined to be necessary to
carry out the purposes of this Agreement. The interest rate on the outstanding
debt shall be equal to the prime rate as of July 1, 2001 plus one percent. The
Scafholding Venture shall not be required to make interest payments. A capital
contributions account shall be established and maintained for Scafholding.
Scafholding shall be credited with the amount of all cash contributions to the
capital of the Venture, plus all interest accrued thereon.
B. Deltona shall provide administrative and managerial services to the
venture as well as access to its sales and marketing organizations for marketing
of the Properties. For these services, the Scafholding Venture will reimburse
Deltona for all commissions and other marketing costs paid on behalf of
Scafholding Venture plus an administrative fee of ten percent (10%) of sales
consummated.
6. Percentage Interests of the Venturers in the Venture.
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Scafholding and Deltona shall each own a fifty percent (50%) interest in
the Venture. Reimbursement to Scafholding for all capital contributions and
reimbursement to Deltona for all commissions, marketing and other costs paid on
behalf of Scafholding Venture plus administrative fees shall occur before
distributions of any net proceeds to the venturers.
7. Management of the Venture.
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A. Deltona shall be the Manager of the Venture, which will be responsible
for the management and operation of the affairs, activities and business of the
Venture. Deltona shall report the activities of the Venture to Scafholding on a
regular basis, including all receipts and expenditures of the Venture.
Notwithstanding the foregoing, Deltona shall not have the authority to take any
of the following actions on behalf of the Venture without the written
authorization of Scafholding:
(i) the execution of any mortgage or security agreement covering all
or any portion of the Property in the Venture;
(ii) the sale, lease or other disposition of any portion of the
Properties except in the normal and ordinary course of business
of the Venture, provided that the sale of lots shall constitute
the normal and ordinary course of business of the Venture;
(iii) confess a judgement against the Venture; or
(iv) any act which would make it impossible to carry on the ordinary
business of the Venture.
B. As manager of the Venture, Deltona shall use its best efforts to cause
the Venture to market and sell the Property as expeditiously as possible
consistent with sound development and marketing principles in order to generate
the maximum profit from the sale of the Properties.
C. Scafholding BV reserves the right to have the final approval authority
over any transaction be it ordinary or otherwise.
8. Payments to the Venturers
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No distributions or other compensation shall be paid by the Venture to
either Venturer until all debts of the Venture are paid and Scafholding and
Deltona are reimbursed as provided for in paragraph 5 above. Thereafter, each
Venturer shall be entitled to receive fifty percent (50%) of the net proceeds of
the Venture. Net proceeds consist of proceeds from tax payments and interest
thereon and proceeds from contracts receivable, less and except all direct and
indirect marketing and administration costs including, but not limited to,
payment of real estate taxes, payment of
commissions to real estate brokers and salespersons, other costs associated with
the sales or administration of the Property. Distributions will be made on a
monthly basis to the Venturers and may be made in the form of cash or accounts
receivable of the Venture.
9. Indemnity
The Venturers agree to indemnify each other or any subsidiary or affiliate
of the other or any of their respective employees, agents, representatives and
officers or directors and agrees to hold each other harmless from and against
all liability, claims, damages, loses and expenses, including court costs and
attorneys' fees arising out of actions resulting from breach of any duty or
obligation or representation of the other. Deltona, as Manager of the Venture,
shall cause the Venture to defend, at the Ventures expense, any and all suits
brought against the Venture, or otherwise settle or compromise such suits or
claims. The venture indemnifies and will defend the venturers regarding any
claim for negligence or other claims asserted against the venture that result in
joining the venture parties.
10. Dissolution of the Venture
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This Venture shall be dissolved upon the occurrence of any of the following
events:
A. the expiration of the term of the Venture or of any extension or renewal
thereof as provided for in this Agreement;
B. the sale by the Venture of all Property and the receipt of all money
payable to the Venture on the sale of such Property;
C. upon mutual written consent of the Venturers;
D. upon filing of a petition under any provision of the Federal Bankruptcy
Act or a decree or order by a court of competent jurisdiction declaring a
Venturer insolvent or bankrupt ;
E. upon consent by either Venturer to the appointment of a receiver or
trustee or assignee for the benefit of creditors; or
F. upon the failure of either Venturer to perform its duties and
obligations hereunder and continuation of such failure or default for a period
of thirty (30) days after written notice from the other Venturer.
11. Liquidation of the Venture
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Upon the dissolution of the Venture for any reason, all of the assets and
Property of the Venture, including but not limited to any Property held by or on
behalf of the Venture, any sales proceeds held on account for the Venture, any
cash held on behalf of the Venture and any contracts or mortgages receivable
held on behalf of the Venture, shall be applied and distributed in cash or in
kind in the following order:
A. all of the debts of the Venture, including interest, costs , liabilities
and commissions incurred by or on behalf of the Venture;
B. repayment of the capital contributions made by Scafholding to the
Venture and administrative fees to Deltona; and finally
C. equal distribution of the remainder to the Venturers.
12. Accounting and Reports of the Venture
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A. The Venture shall adopt methods of accounting in accordance with sound
and generally accepted accounting principles and format for state and federal,
income tax reporting purposes. Its fiscal year shall end
December 31 of each year for such tax reporting purposes. All other decisions as
to tax a accounting elections, accounting principles including decisions with
respect to the assets of the Venture whether for book or tax purposes shall be
made by mutual agreement of the Venturers.
B. At the end of each month, Deltona, as manager of the Venture, shall
deliver to Scafholding a statement showing the results of operations during the
preceding month and for year to date and containing a balance sheet as of the
end of each quarter.
C. At the end of each month, Deltona, as manager of the Venture, shall
deliver to Scafholding a trial balance and final proof showing the contracts
receivable in the Venture identified by separate factor code "T" as well as a
report of any distributions to the Venturers of net proceeds in the form of
assignment of contracts or mortgages receivable.
13. Bank Accounts
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The Venture will maintain bank accounts in its name in such banks as the
Venturers mutually designate, which accounts shall be exclusively for the
deposit and disbursement of all funds from the Venture. All funds of the Venture
shall be promptly deposited into such accounts.
14. General Warranties and Representations
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A. Deltona shall act as bidder on behalf of the Venture at tax certificate
sales and at auctions for tax deed sales. Tax certificates and Property acquired
by Deltona as Manager of the Venture shall be held by Deltona free and clear of
all liens and encumbrances, for the benefit of the Venturers.
B. Deltona is the Developer of Xxxxxx Xxxx Units 1 -12 in Xxxxxx County,
Florida and Sunny Hills Units 1-19 in Washington County, Florida and is
registered as such with the Division of Florida Land Sales, Condominiums and
Mobile Homes of the Department of Business and Professional Regulation, HUD and
certain other state agencies.
15. Insurance
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The venture shall obtain casualty and liability insurance as deemed
necessary as determined by Deltona. The cost shall be paid by the venture.
16. Notices
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Any notice to be given or to be served upon either Venturer in connection
with this Agreement must be in writing and shall be deemed to be given when
deposited in the mails and verified through facsimile transmission and received
by the party to whom it is addressed. Such notices shall be sent to the parties
hereto at the following addresses, unless such addresses are amended in writing
by either Venturer:
SCAFHOLDING
Five Points as Trustee for Scafholding BV
0000 XX 000xx Xxxxxx Xxxx
Xxxxx, XX 00000
DELTONA
Xx. Xxxxxx Xxxxxxxxxxx, Executive Vice President
The Deltona Corporation
0000 XX 000xx Xxxxxx Xxxx
Xxxxx, XX 00000
17. Binding Effect
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This Agreement and the covenants, obligations, undertakings, rights and
benefits hereof shall be binding upon. And shall inure to the benefit of the
respective parties hereto and their respective heirs, legal representatives,
successors and assigns.
18. Entire Agreement; Modifications
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This Agreement constitutes the entire understanding between the parties
with respect to the formation of the Venture. Neither this Agreement nor any
provision hereof may be waived, modified, amended, discharged or terminated
except by an instrument in writing signed by both parties.
19. Severability
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If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, the legality, validity and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
20. Interpretation and Construction
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Whenever the context hereof shall require, the singular shall include the
plural, the male gender shall include the female gender and the neuter and vice
versa. This Agreement and the rights and obligations hereunder shall be
construed in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement
as of the day and year first above written.
THE DELTONA CORPORATION FIVE POINT TITLE SERVICES
COMPANY, INC., AS TRUSTEE FOR
SCAFHOLDING B.V.
By: /s/ Xxxxxx X. Xxxxxxxxxxx By: /s/Xxxxx Xxxxx
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Xxxxxx X. Xxxxxxxxxxx, Exec. VP Xxxxx Xxxxx, President
