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EXHIBIT 10.2
MARKETING AGREEMENT
This agreement made as of the first day of April, 1996 by and between
TROPICAL HAWAIIAN PRODUCTS, INC., a Hawaiian corporation whose address is ▇▇ ▇▇▇
▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ (hereinafter called "THP"), and CALAVO GROWERS OF
CALIFORNIA, a California corporation, whose address is ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Calavo").
WHEREAS THP is engaged in the growing and packing of papaya in the Puna
district of the Island of Hawaii,
WHEREAS Calavo is engaged in the receiving and packing of various food
products and in marketing these products and certain processed food products in
the United States of America and elsewhere, and
WHEREAS THP and Calavo desire to enter into a papaya marketing agreement
(hereinafter "Agreement"), and Calavo desires to license THP to employ the
Calavo trademark on papaya to be marketed by Calavo for THP hereunder.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, THP and Calavo agree as follows:
Article 1. APPOINTMENT. THP hereby appoints Calavo to be a non-exclusive
marketer of its papaya in the territory set forth in Article 2 below, subject to
the terms and conditions herein contained, and Calavo accepts such appointment.
THP intends to market in the same market areas under its brand name and will not
interfere with Calavo's customer base.
Article 2. TERRITORY. The territory covered by this Agreement is the
continental United States of America, Canada and Europe.
Article 3. TERM. The term of this Agreement shall be for a period of five
(5) years commencing on the first day of April, 1996 and shall continue on a
year-to-year basis unless either party gives the other six (6) months prior
written notice of its intention to terminate the Agreement. For purposes of this
Agreement, the fiscal year shall be deemed to be from November 1 until October
31.
Article 4. PRICES AND TERMS.
4.1 QUANTITY. THP agrees to provide on consignment to Calavo a minimum
sufficient to meet Calavo's marketing needs of its export grade production
not sold in State of Hawaii from the Puna district of the Island of
Hawaii, subject to the following paragraph, destined for the geographical
marketing area defined in Article 2, above.
4.2 MARKETING. Calavo will use its best efforts to market such papaya at
such prices and terms as are reasonably satisfactory and profitable to THP
and shall return to THP the FOB Hilo price less Calavo's marketing
commission pertaining thereto.
4.3 PRICE. For purposes of this Agreement, the FOB Hilo price is defined
as the gross sales proceeds less the deduction for Calavo's actual costs,
without markup, for transportation and, when necessary, warehousing,
insurance, handling and palletization from the proceeds of papaya sold by
Calavo on a basis other than FOB port of entry. Proceeds shall include any
credits issued to customers by Calavo in compensation for unsatisfactory
papaya. Calavo may use its warehouse facilities to store product in which
case THP agrees to Calavo's billing rate as its "actual cost."
4.4 MARKETING COMMISSION. Calavo shall be entitled to deduct from the FOB
Hilo price a marketing commission for that volume of THP papaya marketed
by it under any label or brand controlled by THP or any label or brand
owned or controlled by Calavo.
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Article 5. PAYMENT AND YEAR-END ACCOUNTING
5.1 PAYMENTS. Calavo shall provide to THP a summary showing the
distribution of all papaya sold including the port of entry, volume, sales
price, distribution costs and such other information as required to carry
out this Agreement. Payment to THP for the total net proceeds due THP for
the reported period shall accompany the summary. Calavo shall make
available to persons designated in writing by THP all records of Calavo
which are used in the preparation of the monthly summary and payment to
THP. Said records will be made available at least once each month at
Calavo's principal place of business. Payment dates are shown on Exhibit
A.
5.2 YEAR-END ACCOUNTING. At the end of each fiscal year, Calavo shall make
available to THP a written final accounting of all THP papaya delivered to
and marketed by Calavo, said accounting to include a physical inventory of
all papaya in storage.
5.3 YEAR-END PAYMENTS. Any payments due either Calavo or THP pursuant to
this Agreement shall be made not later than thirty (30) days following the
completion of the annual audit of the fiscal year with respect to which
such payments are due.
5.4 ADVANCES. Calavo will advance the estimated value, less deductions, of
the unsold units made available to Calavo by the last Saturday of each
calendar month. The advance will be recovered with the next settlement
payment. If there are insufficient funds available to recover the advance
amount, THP will refund the balance upon demand.
Interest will be deducted at the rate charged by CoBank to Calavo for its
seasonal term loans for the applicable advance period. Interest charges
will be for one calendar month.
The advance will be included in the regular monthly payment.
Article 6. RESTRICTIVE COVENANT. During the term of this Agreement, Calavo
shall not engage in marketing or selling, directly or indirectly, of THP
papaya in the state of Hawaii unless requested by THP in writing.
Article 7. CANCELLATION. either party may cancel this Agreement at any
time and for any reason upon providing to the other party six (6) months
prior written notice.
Article 8. RESPONSIBILITIES OF THP. THP shall be responsible for growing,
preparation for market and delivery of papaya, loaded into containers or
individual cases as specified by Calavo, to the air or ocean carrier. THP
shall approve the design of, and be responsible for procurement of,
packaging material. THP shall be responsible for all losses due to arrival
of unsatisfactory fruit at Calavo's customers when such arrival results
from the unsatisfactory condition of fruit on delivery.
Article 9. RESPONSIBILITIES OF CALAVO. Calavo shall be responsible for
arranging for and payment of transportation from ports of entry to its
mainland warehouse facilities to customers' addresses and for pricing
schedules, invoicing of customers and collection of accounts receivable.
Calavo shall be responsible for all bad debts arising from Calavo's sale
of fresh papaya. Calavo shall be responsible for advertising, promotion
and all other appropriate marketing functions and shall perform these with
diligence. Calavo shall be the sole judge of the quality and quantity of
these marketing functions, and no liability shall be incurred by THP in
connection with any of these functions.
Article 10. DELIVERY, CUSTODY AND CONTROL. All papaya delivered by THP for
sale will be produced, prepared and delivered in condition to meet quality
standards reasonably satisfactory to Calavo. Such fruit as delivered will,
moreover, be of such quality and condition as is necessary to satisfy
federal food and drug laws and regulations, and any similar laws or
regulations which may from time to time apply to the product delivered. No
papaya delivered by THP to Calavo hereunder will, when delivered, be
adulterated or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act of 1938, as amended, and that such products will not be
produced or delivered to Calavo in violation of Section 404 of said act.
Fruit quality is a condition precedent for this Agreement.
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Custody and control of papaya shall pass from THP to Calavo upon delivery
to and receipt by the air or ocean carrier.
Article 11. MARKETING COOPERATION. The parties recognize that close
cooperation is essential to the success of this Agreement and each shall
accord to the other a high degree of cooperation in scheduling the
production, handling and distribution of papaya marketed hereunder.
Calavo shall provide to THP, quarterly, an updated 12 month papaya sales
projection. THP will use its best efforts to arrange its production
schedules to meet these sales requirements. The parties shall work out
between themselves an information system to provide THP with order data to
enable THP to schedule its production activities efficiently. THP, in
turn, will provide fiscal year projected production information to Calavo
by month. In addition, THP will provide to Calavo updated production
forecasts in a timely manner.
Article 12. EXCUSE OF PERFORMANCE. The performance of this Agreement on
the parts of THP and Calavo shall be excused for any contingency beyond
their control, similar or dissimilar to strikes, labor controversies,
fires, war, acts of God or the elements, embargoes, governmental orders or
restrictions as to the growing, sale or delivery of papaya, inability to
secure transportation, strikes or lockouts or stoppage of work in the
plants of THP or Calavo which prevent orderly operation, or inability for
any other reason not due to gross negligence or misconduct of THP or
Calavo to fulfill their respective performances under this Agreement. Said
excuse of performance shall continue only for the duration of said
contingency.
Article 13. TRADEMARK
13.1 LICENSE. All papaya marketed hereunder shall be marketed under the
Calavo ▇▇▇▇. Accordingly, Calavo grants to THP the right to use the
trademark "Calavo" on, and only on, papaya delivered by THP to Calavo
hereunder.
13.2 INSPECTION. THP will permit duly authorized representatives of Calavo
to inspect the premises of THP where papaya are produced, processed and/or
packaged at all reasonable times and upon advance written notice to THP.
Further, THP shall, upon written request of Calavo, submit to Calavo or to
its duly authorized representatives samples of papaya which it intends to
deliver for sale under the trademark for the purpose of ascertaining or
determining compliance with reasonable standards of quality established
from time to time by Calavo.
13.3 USE OF TRADEMARK. THP shall not use the trademark in connection with
papaya delivered and sold hereunder in a manner harmful to Calavo's
ownership of the trademark. THP shall provide Calavo with samples of all
literature, packages, labels and labeling prepared by THP and using
Calavo's trademark, none of which shall be used without Calavo's prior
consent. When using the trademark under this Agreement, THP shall
undertake to comply substantially with all laws pertaining to trademarks
in force in countries where the papaya is sold.
13.4 REGISTRATION OF LICENSE. If the law requires, Calavo shall make
application to register THP as a Permitted User or Registered User of the
trademark and, if necessary, THP shall undertake to join in such
application and to execute and such documents as may be necessary to
implement such application.
13.5 EXTENT OF LICENSE. The right granted in this Article 13 shall be
nonexclusive and shall not be transferable without Calavo's prior written
consent.
13.6 MAINTENANCE OF TRADEMARK. Calavo will use its best efforts to
register and maintain, or cause to be registered and maintained, the
trademark to enable THP's papaya to be distributed and sold under the
trademark as provided herein.
13.7 TERMINATION. Upon termination of this Agreement (regardless of how
terminated), all rights of THP with respect to the Calavo trademark shall
thereby immediately terminate. THP shall execute such documents and shall
take such actions as Calavo may reasonable require to confirm the
termination of THP's interest in said trademark.
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Article 14. INSURANCE. Each party shall obtain and keep in effect product
liability insurance naming the other party as additional insured which
covers liabilities arising from the growing, packaging, marketing and
selling of papaya with liability limits of not less than one million
dollars ($1,000,000.00).
Article 15. INDEMNIFICATION. Except as otherwise provided herein, THP and
Calavo each will indemnify, defend and hold the other harmless from any
and all claims, actions, damages, liabilities, costs and expenses,
including reasonable attorneys' fees and expenses, arising out of the
performance of their respective obligations under this Agreement.
Article 16. IMMEDIATE TERMINATION. In the event of the filing of a
petition by or against either party for its adjudication as a bankrupt or
for any reorganization or arrangement of the party under any bankruptcy,
insolvency or similar law, which within thirty (30) days of the filing
thereof has not been dismissed, or any assignment made for the benefit of
either party's creditors, this Agreement shall immediately become void and
unenforceable, and no further rights or liabilities shall accrue to either
party hereunder.
Article 17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on the
successors and assigns of either party, but shall not be assigned by
either party hereto without the prior written consent of the other party.
Article 18. MODIFICATION. No termination hereof or modification or waiver
of any of the provisions herein contained, or any future representations,
promises or conditions in connection with the subject matter hereof, shall
be binding upon either THP or Calavo unless made in writing and signed on
the parties' behalf by their duly authorized representatives.
Article 19. ARBITRATION. Any dispute under this Agreement shall be settled
by arbitration in Los Angeles, California pursuant to the rules, then
prevailing, of the American Arbitration Association.
Article 20. CONSTRUCTION AND INTERPRETATION. This Agreement shall be
governed by and interpreted and construed in accordance with the laws of
and applicable to the State of California.
Article 21. NOTICE. All notices required of THP or Calavo shall be sent by
mail to the parties' above-listed addresses.
Article 22. INTEGRATION AND EFFECT. this Agreement represent and
integrates all of the terms and conditions and representations made by
either party and supersedes any other contract heretofore entered into or
discussed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
TROPICAL HAWAIIAN PRODUCTS, INC. CALAVO GROWERS OF CALIFORNIA
FEDERAL ID # ▇▇-▇▇▇▇▇▇▇ FEDERAL ID # ▇▇-▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Date 4-8-96 Date 4/9/96
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By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Date 4/9/96
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MARKETING AGREEMENT BETWEEN CALAVO AND THP
EXHIBIT A
DETAIL:
1. Payment shall be by wire transfer to THP's bank account as follows:
a. Sales from the first day of the month to the last day of the month,
payment will be made no later than ten (10) days after cut off.
Account Number
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Bank Name
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Bank Address
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ABA Number
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2. Payment for all Calavo marketed fruit will be made as follows:
a. Customer Invoiced Amount (C & F)
b. Less: Freight and Charges to Port of Entry or Customer
c. Less: Cooling/Conditioning Charge @ 30 cents/Box
d. Equals: FOB Hilo
e. Less: Commission @ 10% (FOB Hilo)
f. Net Due to THP
g. Plus: Cooling/Conditioning Charge
h. Less: Repacking, Inspection, Etc. Fees Incurred
▇. ▇▇▇▇▇ Proceeds to THP
3. Rebate from United Airlines based upon volume discount will be paid to
THP when the credit is utilized less 10% commission based on detail
supplied by carrier. Travel credits will be used 60% THP, 40% Calavo;
it is understood and agreed that all travel credit used by Calavo will
be for the promotion of papayas. THP will deliver sufficient volumes to
qualify for "minimum guarantees" as detailed in United Airlines Cargo
Agreement.
4. THP will reimburse Calavo for all advertising and promotion expenses.
THP will approve all programs by the first of each quarter. Calavo will
deduct the cost from each settlement and deliver supporting
documentation with each deduction.
