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HomeMy WebLinkAboutContracts & Agreements_3-1983_CCv0001.pdf �F �v 41�_ GBESHAM V,ARNER, SAVAGE, NOLAN &r TILDEN ALLEN B.GRESHAM BRUCE D.VARNE8 LAW OFFICES PHILIP M.SAVAGE,III 398 WEST FO DONALD SCS JORDAN JOHN C.NOLAN FOURTH STREET JOHN B,LONE$GAN SANBERNARDINO,CALL RNIIA 9'.:941 -- M.WILII" TILDEN OF COUNSEL ur JAMES E.GOOD MARE A.OSTOICH - THOMAS X.JAOOBSON 840BERT W.RrrTEB,JB. (714)884-9171 STEPHAN G.SALESON (714)894-98u LISTA A. CLS CAMPBELL IasA aJanuary 21 , 1983 CRAIG C.INa' EN Mr. Dallas Holmes Best, Best & Krieger P.O. Box 1028 Riverside, CA 92502 RE: Redlands Foothill Groves Dear Mr. Holmes: As you know, we represent Redlands Foothill Groves. The purpose of this letter is to set forth our client' s proposal relative to the packing and shipping of Valencia oranges grown on lands owned by the City of Redlands. Our client' s proposal is as follows: 1. The City of Redlands shall become a nonmember patron of Redlands Foothill Groves, 2. As a nonmember patron, the City of Redlands shall not undertake the liability described in the last para- graph of the Grower' s Contract previously submitted to the City of Redlands for execution; namely: "Said Grower further agrees to be and become, and said Grower does hereby become, liable for an equal share of all obligations of the Association existing at the date of this Con- tract, or which may be hereafter con- tracted by said Association during the life of this Contract. " 3 . As a nonmember patron, the City of Redlands shall not have a vote in matters normally voted on by members of Redlands Foothill Groves. 4 . As a nonmember patron, the City of Redlands shall be subject to the following specific financial obligations: RECEIVED JAN 2 51983 GRESHAM,VARNER,SAVAGE,'NOL&N & TILDEN LAW OFFICES Mr. Dallas Holmes January 21 , 1983 Page 2 a. A packing retain to cover the estimated ex- penses of operation of Redlands Foothill Groves. If such retain is in excess of the actual expenses of operation of Redlands Foothill Groves , the difference will be refunded to the City of Redlands. b. A revolving fund contribution, to cover the capital needs of Redlands Foothill Groves. Each time that a revolving fund contribution is made by the City of Redlands, the City of Redlands shall receive a credit relative to the revolv- ing fund in question and shall be entitled to a return of such contribution (with interest if the Board so determines , but subject to limitations within the Agricultural Code and the In- ternal Revenue Code) , at the end of the normal cycle of the revolving fund. At the present time, the revolving funds of Redlands Foothill Groves have ten (10) year cycles. 5 . As a nonmember patron, the City of Redlands shall be subject to all of the provisions of the Articles of Incor- poration, the Bylaws and the Rules and Regulations of Redlands Foothill Groves , except that it shall not have voting rights. The foregoing procedures are typical of a tax-exempt farmer cooperative and, to a great extent, are dictated by the provi- sions of the Agricultural Code and of the Internal Revenue Code. Since a tax-exempt farmer cooperative, by its nature , does not make a profit (distribution of what would otherwise be profit at the corporate level is required to be made to members and non- member patrons , on an equitable basis) , the system is one which facilitates equitable treatment of member patrons and nonmember patrons alike. In connection with the foregoing, we are enclosing copies of the following for your review: A. Amended Articles of Incorporation of Redlands Foothill Groves. B. Bylaws of Redlands Foothill Groves. C. Standard Nonmember Patron Agreement of Redlands Foothill Groves. We understand that, following your review of this letter and the enclosures and following your further conversations with GRESHAM,VARNER,SAVAGE, NOLAN & TILDEN L&W OFFICES Mr. Dallas Holmes January 21 , 1983 Page 3 representatives of the City of Redlands , you will recommend that the question of whether the City of Redlands should enter into a nonmember patron relationship with Redlands Foothill Groves will be referred to the Redlands City Council for determination. Since our client is anxious to establish a relationship with the City of Redlands , we would appreciate receiving ample advance notice of any such meeting so that a representative of our client can be present to answer any questions that may arise. If you have further questions regarding the foregoing, do not hesitate to contact us. Very truly yours, /WZ 6�t L4W�Al Mark A. Ostoich of GRESHAM, VARNER, SAVAGE, NOLAN & TILDEN MAO/kas Enclosures (3) CC: William T. Hardy, Jr. NONMEMBER PATRON AGREEMENT This Nonmember Patron Agreement ("Agreement" ) is en- tered into on rob . 1 ' 1983 , between REDLANDS FOOTHILL GROVES ("Association" ) and THE CITY OF REDLANDS ("Nonmember Patron" ) . Operative Provisions 1 . Warranty. Nonmember Patron warrants to Asso- ciation that it is a producer within the meaning of the Agricul- tural Code of the State of California. 2 . Agency. Nonmember Patron appoints and desig- nates Association as general agent for Nonmember Patron and agrees to market through the facilities of Association all Navel oranges grown on the lands identified at the end of this Agreement. 3 . Articles of Incorporation , Bylaws and Rules and Regulations of Association. (a) Nonmember Patron has read the Articles of Incorporation, the Bylaws and the Rules and Regulations of Asso- ciation, adopts the same , makes the same applicable to Nonmember Patron , except with respect to voting (which Nonmember Patron acknowledges that it has no right to do) and agrees to abide by the same as they may be amended from time to time. (b) Any amendment of the Articles of Incor- poration, the Bylaws or the Rules and Regulations of Association shall automatically modify the provisions of this Agreement. (c) In the event of any conflict or inconsis- tency between the provisions of any of the Articles of Incorpor- ation, the Bylaws , the Rules and Regulations of Association and this Agreement, the provisions of the Articles of Incorporation and the Bylaws shall supersede and control the provisions of the Rules and Regulations, the provisions of the Articles of Incor- poration shall supersede and control the provisions of the By- laws and the provisions of all of the Articles of Incorporation, the Bylaws and the Rul-es and Regulations shall supersede and control the provisions of this Agreement. 4 . Income Tax Consent. Nonmember Patron consents and agrees that it shall take into account, at their stated dollar amounts , in the manner provided in Subsection 1385 (a) of the Internal Revenue Cade in the taxable near in which received by him: (a) The amount of any distribution of patron- age dividends as defined in Subsection 1388 (a) of the Internal Revenue Code when made in qualified written notices of alloca- tion as defined in Subsection 1388 (b) of the Internal Revenue Cade and received by Nonmember Patron from Association. (b) The amount of any distribution referred to in Subsection 1382 (c) (2) (A) of the Internal Revenue Code of income derived by Association from business done within the United States , its agencies or :From sources other than Patron- age, when made in qualified written notices of allocation as de- fined in Subsection 1388 (b) of the Internal Revenue Code and re- ceived by Nonmember Patron from Association. (c) The amount of any per unit retain alloca- tion as defined in Subsection 1388 (f) of the Internal Revenue Code when made in qualified per unit retain certificates as defined in Subsection 1388 (h) of the Internal Revenue Code and received by Nonmember Patron from Association. 5 . Revocation of Existing 'Nonmember Patron A ree- ment. Entry into this Agreement revokes any and all other agreements 'between Association and Nonmember Patron relative to the Marketing by Association of Nonmember Patron' s Navel oranges. 6 . Notices. Any notice, consent or request re- quired or permitted by the Articles of Incorporation, by the Bylaws, by the Rules and Regulations of Association or by this Agreement shall be in writing and any such notice, consent, re- quest or other instrument required or perritted to be served on or delivered to either Association or Nonrember Patron by the Articles of Incorporation, by the Bylaws, by the Rules and Reg- ulations of Association or by this Agreement shall be deemed properly served or delivered when personally delivered or when enclosed in an envelope, first-class postage prepaid and deposi- ted in the United States mail addressed to Association at P.O. Box 366 , Redlands, California, or to Nonmember Patron at 30 Cajon Boulevard, Redlands , California 92373 . Notices, con- sents, requests or other instruments personally delivered shall be deemed given as of delivery. Notices , consents, requests or other instruments mailed as provided in this paragraph shall be deemed given on the second (2nd) day follcwing the date of de- posit in the. United States mail. 7 . Tera. The terra of this Agreement shall com- mence effective the date of execution hereof by bath Association and Nonmember Patron and shall continue u.-t.Ll terminated in the 2 same manner as provided in the Bylaws for termination of Membership Agreements. ASSOCIATION: NONMEMBER PATRON: REDLANDS FOOTHILL GROVES THE CITYF-, REDLANDS j rr I s President s I'll Ap By: yam. Its Secreta LANDS SUBJECT TO THIS AGREEMENT Location Number of Acres Variety Southwest corner of Colton and Wabash, Crafton Park S Navels Southwest corner of Highland and Cajon, Prospect Park 22 Navels North side of Brookside, 2 groves east of Terracina Avenue 9 . 2 Navels 304 Fifth Street and Marion Street 12 Navels North side of San Bernardino Avenue 2 groves west of Tennessee Street w 8 Navels t