EXHIBIT 10.b
EXHIBIT 10(b)
UNIFORM MEMBER BEET SUGAR MARKETING AGREEMENT
THIS AGREEMENT, Made as of the 1st day of December, 1997, by and
between United Sugars Corporation, a cooperative association organized under the
laws of the State of Minnesota (hereinafter referred to as "Marketing Agent"),
and Minn-Dak Farmers Cooperative, a cooperative association organized under the
laws of the State of (hereinafter referred to as "Processor").
WITNESSETH
WHEREAS, Processor is a producer-owned and Producer operated
agricultural cooperative which is organized and operated so as to adhere to the
provisions of Section 15(a) of the Agricultural Marketing Act (12 U.S.C., Sec.
1141j(a)), as amended, and the Capper-Volstead Act of 1922 (7 U.S.C., Sec. 291,
292), and which is engaged in the operation of one or more beet sugar processing
plants for the purpose of producing one or more forms of refined sugar; and
WHEREAS, Marketing Agent is organized and operated so as to adhere
to the provisions of Section 15(a) of the Agricultural Marketing Act (12 U.S.C.,
Sec. 1141j(a)), as amended, and the Capper-Volstead Act of 1922 (7 U.S.C., Sec.
291, 292), for the mutual help and benefit of its members and for the purposes
of acting as a marketing agency for its members and of engaging in the business
of marketing the refined sugar (whether sold in packages or in bulk) produced by
its members, including but not limited to, granulated, liquid, blends, specialty
products and corn sweetener (hereinafter referred to as the "Products"); and
WHEREAS, Processor is a member of Marketing Agent and wishes to
participate with other members of Marketing Agent in developing and maintaining
a dependable market for such Products; and
WHEREAS, Marketing Agent and Processor desire to enter into a member
marketing agreement on a pool basis.
NOW, THEREFORE, in consideration of the above, subject to the
respective terms, conditions, and obligations of Processor and Marketing Agent
herein and the pooling obligations of the other members of Marketing Agent,
Marketing Agent and Processor agree as follows:
1. Appointment of Marketing Agent as Sales Agent.
(a) Processor appoints and employs Marketing Agent to act as its
sole agent in the sales and marketing of all Product produced by Processor
during the Term (as hereinafter defined) of this Agreement, and Marketing Agent
accepts such appointment and employment and agrees to act as the sales agent and
pool administrator in accordance with the terms of this Agreement.
(b) Processor agrees that Marketing Agent may employ all such
persons and agencies as it determines to be necessary to carry out its
obligations under this Agreement. It is understood and agreed that Marketing
Agent may market Products under the various trademarks and trade names of
Processor (if any) pursuant to a royalty free license agreement with respect to
such trademarks and trade names, the form of which agreement shall be mutually
agreed upon by Processor and Marketing Agent.
(c) Marketing Agent agrees, and is hereby empowered by Processor,
to sell in its own name, and pass title on behalf of Processor to, all Product
produced by Processor during the Term of this Agreement to such purchasers, at
such time or times, at such place or places, in such manner and on such prices
or terms as Marketing Agent determines to be in the best interests of Processor
and other members of Marketing Agent.
(d) Marketing Agent shall have no rights, and nothing herein
contained shall be deemed to create rights in Marketing Agent in and to any
other products produced by Processor (other than refined sugar), including
without limitation, molasses.
(e) It is understood and agreed that Marketing Agent may from
time to time procure certain Products from third parties in order to meet the
requirements of sales contracts or as otherwise determined to be in the best
interest of Processor and the other members of Marketing Agent. Processor and
Marketing Agent agree that Marketing Agent shall act as an agent for Processor
in connection with such purchases of Products and that the costs of acquiring
such Products and revenues received from the sale of such Products shall be
allocated to Processor and other members of Marketing Agent on the same basis as
allocations from the pool for which the Products were purchased.
2. Packaging. Processor intends to have the capacity to sell Product
in bulk as well as in packages in the sizes set forth on Schedule A hereto. It
is understood that production and packaging constraints will limit the volume
and mix of packages that can be produced at any one time, and accordingly,
Marketing Agent agrees to coordinate orders for packaged Product taking into
consideration Processor's production and packaging limitations.
3. Production and Delivery. It is anticipated that Processor will
produce Products during its campaign on an approximately even monthly schedule.
However, Processor acknowledges that Marketing Agent's requirements may be
greater in certain specified months and less in others. Accordingly, subject to
mutual agreement of the parties, Marketing Agent will endeavor to coordinate
demands with Processor's production and storage capacities. At Marketing Agent's
request, Processor will attempt to maximize production in any month in order to
accommodate customer demand.
3.1 Product Production Schedules. Processor shall provide to
Marketing Agent by June 1 of each Fiscal Year (as hereinafter defined) during
the Term a preliminary estimated production schedule (specifying volume and
dates) for the next following Fiscal Year and will provide a revised estimated
production schedule by July 1 of each such year, reflecting any changes from the
June preliminary estimate. Thereafter, the estimated production schedule shall
be updated each month. For the purposes of this Agreement, the term "Fiscal
Year" shall mean each twelve month period from September 1 through August 31 of
the next following calendar
year. Marketing Agent and Processor shall jointly develop a production and
delivery schedule plan for each Fiscal Year that will attempt to accommodate, as
much as reasonably possible, the dual goals of maximizing the price to be paid
to Processor and maximizing production efficiencies, with the objective of
selling all of Processor's production of Product each year.
3.2 Weekly Delivery Amounts. Estimated weekly delivery schedules,
including quantities, and bulk and packaging requirements for each week of each
month, shall be agreed upon by the parties at least seven (7) days in advance of
the month to which they apply. The parties shall use reasonable efforts,
recognizing customer demand, to accommodate each other in setting such
schedules.
4. Billing and Collection. All sales made by Marketing Agent shall
be billed on invoices of Marketing Agent and all receipts shall be collected by
Marketing Agent.
5. Pool Years. Processor's members processes beets and thick juice
into refined sugar, generally from September through May ("Beet Processing
Season"). Certain other of Marketing Agent's members process cane into feedstock
for their refinery from mid-October through March ("Cane Processing Season), and
cane feedstock is processed into Product throughout the year, from November
through October. Marketing Agent markets Product in one or more pools, each of
which begins on September 1 and ends on or about the last day of the applicable
Fiscal Year (August 31). Each Beet Processing Season falls substantially within
a corresponding Fiscal Year (pool year) of Marketing Agent. In order to include
sales of carry-over Product produced by Processor in a given Beet Processing
Season in the pool applicable to the Fiscal Year in which the Beet Processing
Season occurred, even though delivery may occur following August 31 of such
year, the Product to be included in calculating Marketing Agent's pool in each
Fiscal Year shall be the amount of Product produced during the applicable Fiscal
Year.
6. Price for Product.
6.1 Price. Marketing Agent shall pay to Processor for all Product
delivered hereunder, Processor's pro rata share of the Net Pool Price (as
hereinafter defined) for each product pool in which Processor participates.
6.2 Product Pools. Marketing Agent and Processor agree that the
Products to be sold by Marketing Agent hereunder shall be pooled for each Fiscal
Year with Products of the other members of Marketing Agent, as set forth in
Section 5 hereof There shall initially be the following three (3) pools for
Products: (a) Primary Pool, (b) Export Option Pool, and (c) High Fructose Syrup
("HFS") Pool. The Marketing Agent by action of its Executive Committee shall
have the discretion to create additional pools as deemed reasonably necessary
for the equitable treatment of all members. As sales are made, the proceeds
received by Marketing Agent from the sale of pooled Products received from its
members, shall be deposited into the pools for the appropriate Fiscal Year and
shall be credited to Processor and the other members of Marketing Agent on the
basis of their respective pro rata shares. Processor's pro rata share of the Net
Pool Price (as hereinafter defined) of each pool shall be distributed to
Processor by Marketing Agent as rapidly as collection and accounting procedures
permit.
6.3 Primary Pool. Processor's pro-rata share for the Primary Pool
for each Fiscal Year shall be based upon total production, less the amount of
Product designated for other alternative or separate pools. With respect to the
Primary Pool for each Fiscal Year covered by this Agreement, distributions of
the Net Pool Price shall initially be based on Marketing Agent's best estimate
of the amount of the Products anticipated to be produced in such year by
Processor and each other participant in the pool, and shall be adjusted by
Marketing Agent periodically as production figures are more precisely
determined. Such adjustments shall reflect an interest charge to be paid by any
pool participant who has received excess distributions based on the preliminary
production estimates and such interest shall be paid to the pool participant(s)
who received less than full distributions. For purposes of this paragraph,
interest charges shall be equal to the average of (i) the monthly Commodity
Credit Corporation loan rate for the period in question and (ii) the rate
charged by Marketing Agent's principal lender for thirty (30) day seasonal fixed
rate financing for the period in question. As soon as exact information and
production figures are available, Marketing Agent shall determine Processor's
final Product price for the Fiscal Year, and appropriate adjustments, together
with interest, as provided above, shall be made. Estimated payments shall be
made by Marketing Agent to Processor no less frequently than weekly during the
Term, and final accounting for each Fiscal Year shall be made no later than the
ninetieth day following the last day of each Fiscal Year.
6.4 Export Option and Other Pools. The distribution of Net Pool
Price from the Export Option Pool and the HFS Pool (and any other pool
established by the Marketing Agent) shall be based on the Product committed by
each member to such pool and payments shall be made following the procedure set
forth above for Primary Pool payments.
7. Marketing Agent's Books and Records. Marketing Agent shall keep
accurate records of costs, sales, and pool proceeds in accordance with sound and
generally accepted accounting practices. Said records shall be at all reasonable
times fully available for copying and inspection by Processor and/or its
certified public accountants. All records of each pool shall be audited annually
by independent certified public accountants selected by Marketing Agent. Such
audit shall be made available to Processor promptly after completion.
8. Definitions of Net Pool Price. The net proceeds of the product
pools for each Fiscal Year (the "Net Pool Price") shall be defined as the gross
proceeds realized by Marketing Agent from sales of Products produced by
Processor and the other members in each pool, less expenses directly
attributable to such pool in accordance with authorized and established rules of
Marketing Agent as follows:
(a) All costs, charges or expenses attributable to the marketing
and sale of pooled Products, including without limitation salaries, wages and
other benefits of Marketing Agent's employees, office expense and appropriate
consulting fees;
(b) All costs of transportation of the pooled Products; provided,
however, that to the extent rail transportation is not available from the
location of Processor's plants, transportation costs shall be adjusted to
reflect the added cost related to transportation from such plants;
(c) Insurance premiums paid by Marketing Agent;
(d) Interest expense for financing obtained by Marketing Agent;
(e) State inspection fees and all other fees and taxes incurred
in the marketing of the pooled Products;
(f) All charges, fees and expenses paid by Marketing Agent to
Processor, any other member of Marketing Agent, or any other person, for
advertising or use of trademarks;
(g) All costs and expenses reimbursed to Processor or any other
member pursuant to Section 16 hereof;
(h) All amounts paid by Marketing Agent to any third person for
shipping, storage, warehousing or packaging costs or expenses described in
Section 16 hereof;
(i) All other direct and indirect charges or expenses, including
administrative and overhead, attributable to the sale of the pooled Products in
the operation of the relevant Product pool; and
(j) Depreciation of property and equipment of Marketing Agent.
All losses incurred by Marketing Agent as a result of uncollectible accounts
receivable shall be allocated to the appropriate Product pool and shall be
regarded as a marketing expense in determining the Net Pool Price of that
Product pool.
9. Budget and Advance of Marketing Costs. Marketing Agent shall
prepare a monthly budget or estimate of all direct and indirect marketing costs
for the pools. It is the intention of Marketing Agent to secure independent
financing for costs associated with the marketing of Products as reflected in
the budget.
10. Product Warranties, Quality Standards, Transfer of Title:
Handling of Products of Substandard Quality.
(a) It is understood and agreed that title to Products shall
remain in the name of Processor until the earlier of (i) such time as title is
transferred to a buyer by Marketing Agent on behalf of Processor or (ii) risk of
loss passes to Marketing Agent, as provided in Section 12(a)(ii) hereof. All
Processor's Products which are delivered to buyers pursuant to Marketing Agent's
shipping orders or are delivered to Marketing Agent shall at the time of
delivery be free and clear of any liens, attachments, security interests, claims
or encumbrances of any kind whatsoever.
(b) Marketing Agent shall furnish to Processor from time to time
customer specifications for Products prescribing standards and procedures for
quality control, storing and shipping of such Products. Initially such standards
shall be mutually agreed upon by Marketing Agent and its members, and thereafter
from time to time revised in a manner consistent with the Quality Assurance
Policy attached hereto as Schedule B. In the absence of an agreement by the
parties to another set of standards, the applicable standards shall be those set
forth on Schedule C attached hereto.
(c) Processor shall observe and comply with any buyer
specifications furnished by Marketing Agent. Also, all Products delivered to or
at the order of Marketing Agent shall conform to quality and other standards
prescribed by applicable state and federal rules and regulations.
(d) Product which fails to meet the customer specifications and
the agreed standards, or in the absence of agreed standards, the standards set
forth on Schedule D hereto shall be considered substandard for purposes of this
Agreement. Product of substandard quality, shall, on the joint agreement of
Processor and Marketing Agent: (i) be withheld from the product pool and
marketed by Marketing Agent as shall be mutually agreed by Marketing Agent and
Processor with proceeds of the sale of such Product, less all direct and
indirect selling expenses, distributed to Processor, or (ii) remain in the
product pool and be charged with the additional costs relating to the
substandard quality of the Product.
11. Storage of Product. Processor shall store its Product as the
parties shall mutually agree. At the earliest reasonable time after processing
commences in each Fiscal Year and as soon as Product has begun to be placed in
storage, Processor shall deliver daily inventory reports to Marketing Agent of
both feedstock and Product. All Product included in the daily inventory shall be
included in the product pool for the appropriate Fiscal Year even though the
Product remains on the premises of Processor. Certain storage and warehousing
costs and expenses associated with the Products shall be charged to Marketing
Agent and be included in the calculation of the Net Pool Price of the Product
Pools, as provided in Sections 8(g) and (h) and 16 of this Agreement.
12. Risk of Loss: Insurance: Indemnification.
(a) Processor covenants and agrees that it shall bear the risk of
loss of all Products produced by Processor or any portion thereof until earlier
of the time (i) the Products are shipped to the buyer of the same; or (ii) at
the time it is no longer possible to identify the Product as that of Processor
(i.e., commingled or processed Product), at which time the risk of loss shall
pass to Marketing Agent; provided, however, that Processor shall continue to be
the owner of the Product until the Product is sold to the buyer. Whenever
Marketing Agent shall have possession or control over the Product prior to sale
to the buyer, Marketing Agent shall act strictly as custodian thereof in
accordance with the provisions of this Agreement.
(b) Processor covenants and agrees, at its sole cost and at all
times during the Term (as hereinafter defined) to maintain in force an insurance
policy or policies covering loss, theft or damage to the Products from any cause
whatsoever until the shipment of the same to the buyer, in amounts not less than
the full insurable value thereof, and product liability insurance in amounts
required by Marketing Agent from time to time, which product liability insurance
shall name Marketing Agent as an additional or a named insured.
(c) Marketing Agent covenants and agrees, at all times during the
Term of this Agreement, to maintain in force during the period for which it
bears the risk of loss, an
insurance policy or policies covering loss, theft or damage to the Products from
any cause whatsoever in amounts not less than the full insurable value thereof,
and product liability insurance in amounts deemed reasonable by Marketing Agent,
which product liability insurance shall name Processor as an additional or named
insured.
(d) Insurance policies shall be taken out with responsible
insurance companies licensed to write insurance in Minnesota, in the case of
Marketing Agent, and Florida, in the case of Processor, and each shall not be
canceled or altered without ten days' written notice to Marketing Agent and
Processor. Each party shall furnish the other party with certificates of
insurance for policies required hereunder, together with a summary of the terms
and conditions of the policy or policies, and the date on which the same expire.
(e) Processor hereby agrees to indemnify and hold harmless,
Marketing Agent, its members, and their respective employees, from and against
any claims, losses or liabilities arising out of, or resulting from, the
production, on-site storage or loading of any Products which are marketed by
Marketing Agent pursuant to this Agreement.
(f) Marketing Agent hereby agrees to indemnify and hold harmless,
Processor, and its employees, agents and shareholders from and against any
claims, losses or liabilities arising out of, or resulting from, the actions or
omissions of Marketing Agent, its employees or agents with respect to the
Product, from and after the time risk of loss of Processor's Product transfers.
13. Orders. Regardless of factory or warehouse designation, the
proceeds from sales orders shall be credited to the Product pool for the
appropriate Fiscal Year as provided in Section 5 hereof Marketing Agent shall
consider car loadings, points of destination, capacity of tanks or warehouses,
size of inventories stored therein and other pertinent factors in selecting the
factory, warehouse or warehouses from which delivery shall be made.
14. Traffic Function. Marketing Agent shall be responsible for
performing all normal traffic functions relating to the shipment of all Products
produced at Processor's plant, and at the request of Processor, will perform the
traffic function for Processor's production inputs. Direct or indirect costs of
Marketing Agent associated with the performance of the traffic functions related
to Products shall be as a pooled marketing expense in accordance with Section 8
of this Agreement. Marketing Agent's traffic function costs attributable to
production inputs shall be allocated to the Processor or member(s) of the pool
for whom the input traffic function is provided under this Section 14.
15. Information from Processor. Processor shall, whenever requested
by Marketing Agent, furnish to Marketing Agent pooled Products production and
related statistical data prepared on a daily basis, and shall make its books and
records related thereto available at all reasonable times for inspection by
Marketing Agent. Processor shall not be required to release information
concerning Processor's proprietary processes or costs (other than reimbursable
Asset Costs and Operating Costs (as hereinafter defined)), which costs shall be
provided in sufficient detail to satisfy Marketing Agent's reasonable
requirements in connection with the reimbursements provided for in Section 16
hereto) or other confidential financial information.
Processor further agrees, upon request of Marketing Agent, to furnish Marketing
Agent with samples of Products for grading or selling purposes.
16. Reimbursement to Processor.
(a) Processor shall be reimbursed by Marketing Agent for its (i)
carrying costs of assets associated with Product shipping, packaging,
warehousing (including all costs historically included by Marketing Agent as
warehousing costs), and storage functions (including storage costs of thick
juice from beets or desugarization), including depreciation and interest, and
its (ii) operating costs associated with Product shipping, packaging,
warehousing (including all costs historically included by Marketing Agent as
warehousing costs) and storage functions (including storage costs of thick juice
from beets or desugarization) including, without limitation, labor (including
direct and indirect costs, such as employee benefits, insurance, etc.), supplies
and utilities ("Operating Costs"). Notwithstanding the foregoing, costs
associated with thick juice storage shall not be charged to Marketing Agent for
any month during which Processor elects to use such storage capacity for
purposes other than thick juice storage.
(b) Reimbursement for Asset Costs and Operating Costs shall be
made monthly and Processor shall provide monthly to Marketing Agent a breakdown
of Asset and Operating Costs. Marketing Agent shall pay to Processor the Asset
and Operating Costs specified within thirty (30) days of submission of
Processor's cost breakdown. In the event there is a dispute regarding the amount
of such reimbursement, Marketing Agent shall pay the undisputed amount and if
the parties are unable to resolve the disputed amounts within thirty (30) days
from the date payment is due, the controversy shall be resolved in the manner
provided in Section 23 hereof.
17. Term of Agreement: Termination.
(a) Term. The term of this Agreement shall commence on the date
hereof and shall continue through August 31, 2001 (the "initial term") and from
Fiscal Year to Fiscal Year thereafter (the "renewal terms") until terminated as
provided herein. "Term" shall mean the initial term and any renewal terms, as
provided herein.
(b) Termination by Producer by Reason of Dissent. During the
Term, Processor shall have the right to terminate this Agreement, without
penalty, by Notice delivered to Marketing Agent twelve months prior to the
effective date of termination, if the Processor dissents from any of the
following actions taken by the Marketing Agent: (i) changes in Marketing Agent's
strategic plan; (ii) merger of or acquisition by Marketing Agent; (iii)
amendment to the Articles of Incorporation or By-Laws of Marketing Agent; or
(iv) admission of a new member into the Marketing Agent.
(c) Termination by Either Party After the Initial Term. Either
party has the right to terminate this Agreement at the end of the initial term
and thereafter by giving written notice by registered mail to the other party of
such termination as follows:
(i) Notice of termination to be effective at the conclusion
of the initial term shall be given prior to May 1, 2000.
(ii) Notice of termination to be effective at the conclusion
of a renewal term shall be given prior to May 1 of a given year to be effective
on August 31 of the subsequent year.
(d) Termination Pursuant to the By-Laws of the Marketing Agent.
In the event membership in the Marketing Agent is terminated pursuant to the
provisions of the By-Laws of the Marketing Agent, this Agreement shall terminate
effective the date of termination of membership; provided, however, that the
Marketing Agent shall have the obligation to purchase from Processor and the
Processor shall have the obligation to sell Products in the quantities and under
the payment terms provided in this Agreement for the next succeeding twelve (12)
month period following termination; further provided, that in no event shall
Marketing Agent or Processor be required to take any actions that could
jeopardize Marketing Agent's status as a common marketing agent under
Capper-Volstead Act.
(e) Performance Following Termination.
(i) Following termination of this Agreement, as provided in
clauses (a), (b), or (c) above, Processor shall have the obligation to sell its
pro-rata share of any Product for which Marketing Agent has, as of the date of
notice of termination, made commitment to deliver to a third party buyer under
the payment terms provided for in this Agreement.
(ii) The rights and obligations with respect to the marketing
of Processor's Products shall continue in effect until all of such pooled
Products have been sold by Marketing Agent and Processor's pro-rata share of the
Net Pool Price from sales of pooled Products produced by Marketing Agent's
members during such years and reimbursable costs and expenses have been
distributed to Processor and Marketing Agent's members.
(f) Return of Capital. Upon termination of this Agreement,
Processor shall be entitled to have its then capital account returned in five
equal annual installments, without interest, in exchange for the cancellation of
capital equities held by Processor in the Marketing Agent. Upon the return to
Processor of such capital contribution, the Marketing Agent shall cancel capital
equities equal to such capital contributions.
18. Marketing Commitments: Indemnifications.
(a) Processor represents and warrants that it is not under
contract or obligation to sell, market, consign or deliver any of the Products
committed to the pools under this Agreement to any other person, firm,
association, corporation or other entity. Further, Processor shall defend and
hold harmless Marketing Agent from any costs, claims, liabilities, suits or
other proceedings or actions of any nature or kind whatsoever arising from or
connected with any such prior agreement, contract or arrangement or the
termination or cancellation of any prior agreements, contracts or arrangements.
(b) Marketing Agent represents and warrants that it has the power
and authority to enter into this Agreement, sell the Products committed to the
pools and otherwise to fulfill its obligations under this Agreement. Further,
Marketing Agent shall defend and hold
harmless Processor and its employees, agents and shareholders, from any costs,
claims, liabilities, suits or other proceedings or actions of any nature or kind
whatsoever arising from or connected with any sales by Marketing Agent of
Products hereunder.
19. Compliance with Marketing Agent's Governing Instruments.
Processor accepts and agrees to conform to and abide by the provisions of the
Articles of Incorporation and Bylaws of Marketing Agent and all amendments
thereto during the Term of this Agreement.
20. Marketing Allotments. It is the intention of the parties that
all Products produced by Processor during the Term hereof will be marketed by
Marketing Agent. In the event government marketing allotments are imposed during
the Term hereof, Marketing Agent will continue to market all of Processor's
Products; provided that products in excess of Processor's allocated volume shall
not be included in the Primary Pool but will be marked as part of an alternative
or separate pool. It is the intention of the parties that Processor may elect to
have Product in excess of its allocation marketed by Marketing Agent in the
current year (in the export market) or carried over by Marketing Agent to the
next Fiscal Year. The Net Pool Price of non-pool Product shall be determined in
a manner consistent with the provisions of Sections 6.1 and 8 of this Agreement.
Marketing allotments attributable to Processor shall be the property of
Processor. This provision shall survive the termination or expiration of this
Agreement.
21. Interdependent Agreement. Processor agrees that Marketing Agent
shall have all fights and remedies provided by law and in the Bylaws of
Marketing Agent in the event of a breach or threatened breach by Processor of
this Agreement. Marketing Agent represents that all other members either have
entered into or will be required to enter into substantially identical member
marketing agreements for the marketing of pooled Products produced by the other
members.
22. Force Majeure.
(a) Neither party shall be liable to the other for failure to
perform any part of this Agreement if such failure results from the occurrence
of an event of Force Majeure (as hereinafter defined), provided that the party
affected by the event (i) notifies the other party of such event promptly upon
learning of the occurrence of the event, such Notice (as hereinafter defined) to
include the anticipated effect of such event on the performance of such party
under this Agreement and (ii) uses its best efforts to minimize delays and/or
non-performance caused by such event.
(b) Each party shall be completely released from all liability to
the other arising as a consequence of any excused performance caused by an event
of Force Majeure, including, but not limited to, all claims for incidental,
special or consequential damages.
(c) For purposes of this Agreement, the term "Force Majeure"
shall mean any (i) fire, freeze, accident, explosion, construction delay,
hurricane, flood, act of God, inability to obtain electric power or fuel,
inability to obtain any required permits or licenses, government law, directive
or regulation, or the effect of the application of any governmental law,
directive or regulation, or any like contingency, beyond a party's reasonable
ability to control or avoid; and
(ii) labor dispute or strike, from whatever cause arising and regardless of
whether the demands of the employees involved are reasonable and within the
affected party's power to concede.
23. Dispute Resolution.
23.1 Any dispute, controversy or claim arising out of or relating to
this Agreement that cannot be resolved amicably between the parties shall be
finally resolved by arbitration in Chicago, Illinois, or such other location as
may be mutually agreed upon, in accordance with the Commercial Arbitration Rules
of the American Arbitration Association ("AAA"), as modified by this Section 23;
provided however, that the plaintiff in any claim for damages exceeding $
10,000,000 may seek judicial resolution in any court of competent Jurisdiction
and shall not be subject to this Section 23. Any arbitration shall be held
before a panel of three (3) arbitrators mutually agreed to between the parties,
one of whom shall be familiar with the sugar industry. If the parties are unable
to agree upon the selection and appointment of arbitrators within thirty (30)
days of a written demand for arbitration, then arbitrators shall be appointed by
the AAA pursuant to its Commercial Arbitration Rules.
23.2 In connection with any such arbitration, the parties further
agree to participate in the exchange of information and documentation through
discovery pursuant to the rules established by the arbitrators.
23.3 The arbitrators shall have full authority to render any form of
legal or equitable relief to address the parties' dispute, including an award of
monetary damages and/or injunctive relief, provided, however, that in no event
shall the arbitrators have the power to include any element of punitive or
exemplary damages in the arbitration award. Judgment upon any award for any
legal or equitable relief so rendered by the arbitrators shall be considered
final and binding and may be entered in any state or federal court of competent
jurisdiction.
24. Complete Agreement. The parties agree that this Agreement
constitutes the complete agreement of the parties with respect to the subject
matter hereto and there are no oral or other conditions, promises,
representations or inducements in addition to oral variance with any of the
terms hereof, and that this contract represents the voluntary and clear
understanding of both parties fully and completely.
25. Assignment. Neither Processor nor Marketing Agent may assign
this agreement without prior written consent of the other party and the other
members who have entered into identical pool marketing agreements with Marketing
Agent.
26. Waiver of Breach. No waiver of a breach of any of the agreements
or provisions contained in this agreement shall be construed to be a waiver of
any subsequent breach of the same or of any other provision of this Agreement.
27. Notices. Whenever notice is required by the terms hereof, it
shall be given in writing by delivery or by certified or registered mail
addressed to the other party at the following address or such other address as a
party shall designate by appropriate notice:
If to Marketing Agent:
United Sugars Corporation
0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
With a copy to:
Xxxxx Xxxxxx, Esq.
Xxxxxxx, Rumble & Butler, P.A.
2800 Minnesota World Trade Center
00 X. 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 0000x
If to Processor:
Minn-Dak Farmers Cooperative
0000 Xxx Xxxxx Xxxx
Xxxxx 1, Box 10
Wahpeton, North Dakota 58075
Attention: CEO
If notice is given by mail, it shall be effective two (2) days after mailing.
28. Construction of Terms of Agreement: Modification. The language
in all parts of this Agreement shall be constructed as a whole according to its
fair meaning and not strictly for or against any party hereto. Headings in this
Agreement are for convenience only and are not construed as a part of this
Agreement or in any defining, limiting or amplifying the provisions hereof This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and shall not be modified in any manner except by an
instrument in writing executed by the parties hereto. In the event any term,
covenant, or condition herein contained is held to be invalid or void by any
court of competent jurisdiction the invalidity of any such term, covenant or
condition shall in no way affect any other term, covenant or condition herein
contained.
29. Successors and Assigns. Subject to the other provisions of this
Agreement, all of the terms, covenants and conditions of this Agreement shall
inure to the benefit of and shall bind the parties hereto and their successors
and assigns.
IN WITNESS WHEREOF, Marketing Agent and Processor have executed this
Agreement effective the day and year first above written.
UNITED SUGARS CORPORATION
By:_________________________________
Its:__________________________________
MINN-DAK FARMERS COOPERATIVE
By:_________________________________
Its:__________________________________
SCHEDULE A
PACKAGE SIZES
SCHEDULE B
QUALITY ASSURANCE
MARKETING AGENT SUGARS
PURPOSE:
The purpose of the Quality Assurance function at Marketing Agent is to provide
guidance and direction to operational groups in the development, implementation
and maintenance of Quality Systems. Quality Systems are those systems designed
to assure products and services of the member companies meet the expectations of
the targeted customer segments.
The Quality Assurance group will accomplish this through development,
implementation and audit of systems and standards will be developed and
implemented that define customer expectations as well as documenting the
performance of the member companies against those standards.
STRATEGY:
The vehicle through which the above will be accomplished will be a system of
documented policies and procedures defining the activities that will occur
within each of the operational groups providing product for sale.
The basis for those policies and procedures will be a combination of FDA
requirements as well as standards communicated by Marketing Agent's primary
customer segments.
Policies and procedures that will be defined, include but are not limited to:
Product Safety/Regulatory (FDA):
Good Manufacturing Practices (21 CFR Part 110 of the Food Drug and
Cosmetic Act).
HACCP (Hazards Analysis and Critical Control Points)
(The two systems noted above are made up of a number of audit and
process management activities designed to assure the safety of the
product that is produced, stored and distributed by internal
facilities as well as outside agents of the company [i.e. copack
facilities, facilities that produce and ship product under agreement
with Marketing Agent and Outside Distribution Facilities/Public
Warehouses]).
Product Quality/Functionality:
Product Standards for each product sold and distributed through
Marketing Agent will be defined. Standards (for product as shipped)
will typically be defined by any or all of the following:
*Flavor/Odor
*Color
*Moisture
*Ash
*Sediment
*Visible Specks
*Floc
*Invert
*Specific Rotation
*Granulation
*Density
*Flowability
*Pesticides/heavy metals
*Specific trace element analysis
As defined by the customer segment (i.e. bottling and National
Formulary)
*Microbiology standards
Process Control Systems/Documentation
Process Control Systems are those control systems by which
each producing facility manages their process to produce
product which meet the approved product standards as shipped.
Each member facility will document, through a Standard
Operating Procedures format, the methods utilized to assure
processes are operated in a consistent controllable manner.
SCHEDULE C
FINE GRAINED SUGARS UNITED SUGARS
Our fine grained sugars are produced by crystallizing a thick juice syrup from
sugar beets. The crystals are then dried and screened to provide a number of
fine grained sugar products which are used in a wide variety of products by food
processors. All of our fine grained sugars can be certified to meet
specifications of the National Food Processors Association and the National Soft
Drink Association upon request.
FINE GRANULATED
This is the basic sugar used by most food processors. Its fine
crystals are ideal for bakery products, cereals, candies, powdered
mixes, dairy products and pharmaceutical products.
CORDIAL
Designed for mixing in liquids, this low-color sugar won't cloud
drinks, is free from floc and is very stable when used in alcohol
oils. It's used in pharmaceutical products, cordial liquors and
specialty candies.
GELATIN
The fine granulation and faster dissolving properties of Gelatin
Sugar make it ideal for powdered drink and gelatine mixes. Its very
fine and uniform granulation reduces stratification in the final
product.
BAKERS SPECIAL
Bakers Special is our finest granulated sugar and was developed for
the baking industry. It provides fine crumb texture and dissolves
easily. It is used in bakery products, cocoa mixes and powdered
mixes. It's also used in coating doughnuts and cookies.
FINE GRAINED PRODUCTS:
Fine Granulated: Cordial: Gelatin: Bakers Special:
25 LB Bag 100 LB Bag 50 LB Bag 50 LB Bag
50 LB Bag 2,000 LB Totes 100 LB Bag 100 LB Bag
100 LB Bag Bulk Rail or Truck 2,000 LB Totes 2,000 LB Totes
2,000 LB Totes Bulk Rail or Truck
2,100 LB Supersack
Bulk Rail or Truck
FINE GRAINED SUGARS -- TYPICAL ANALYSIS
FINE GRANULATED SUGAR
COLOR ASH MOISTURE
Not more than 35 Not more Not more
RBU than .015% than .035%
CORDIAL SUGAR
COLOR ASH MOISTURE FLOC IRON TURSIDITY
Not more than 15 Not more Not more Negative Not more Not less than
RBU than .015% than .035% than .05 ppm 100% transmission
at 720 nm
GELATIN SUGAR
COLOR ASH MOISTURE
Not more than 45 Not more Not more
RBU than .015% than .030%
BAKERS SPECIAL SUGAR
COLOR ASH MOISTURE
Not more than 45 Not more Not more
RBU than .015% than .030%
GRAIN SIZE - CUMULATIVE PERCENT RETAINED
FINE GRANULATED SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
20 20 -- -- 0.5
28 30 1.0 -- 6.5
35 40 21.0 -- 46.5
60 60 56.0 -- 93.5
Passing 80 Passing 80 -- -- 7.0
Passing 100 Passing 100 -- -- 5.0
CORDIAL SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
20 20 -- -- 0.5
28 30 1.0 -- 6.5
35 40 21.0 -- 46.5
60 60 56.0 -- 93.5
Passing 80 Passing 80 -- -- 7.0
Passing 100 Passing 100 -- -- 5.0
GELATIN SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
28 30 -- 0.1 0.5
35 40 -- 5.0 6.0
60 60 -- 64.0 73.0
Passing 100 Passing 100 -- 6.0 8.0
BAKERS SPECIAL SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
35 40 -- 0.1 0.4
48 50 -- 1.7 2.0
Passing 48 Passing 50 98.0 98.3 100.0
COARSE GRAINED SPECIALTY
SUGARS UNITED SUGARS
Our course grained, easy-handling sugars resist caking, and provide better
flowability. As the larger crystals reflect light, they create a sparkling
appearance that's ideal for decorating. All of our course grained sugars can be
certified to meet specifications of the National Food Processors Association and
the National Soft Drink Association upon request.
SANDING
Our largest grain size, sanding sugar adds a sparkle to baked goods,
jelly candies, gumdrops, cotton candy and cookies.
COARSE SUGAR
With a slightly smaller grain size than sanding, coarse granulated
is ideal for pneumatic systems. It provides greater resistance to
caking, and is used in candy, dairy products, powdered drink mixes,
canning and snack foods.
UNIGRAN SUGAR
With virtually no fines and a uniform grain size, Unigran was
developed specifically for use in hot drink dispensing machines. Its
uniform grain size makes it ideal for use in coffee and cocoa mixes,
powdered mixes and cereal products.
COARSE GRAINED PRODUCTS:
Sanding: Coarse: Unigran:
100 LB Bag Bulk Rail or Truck 100 LB Bag
COARSE GRAINED SPECIALTY
SUGARS UNITED SUGARS
TYPICAL ANALYSIS
SANDING SUGAR
COLOR ASH MOISTURE
Not more than 35 RBU Not more than .015% Not more than .030%
COARSE GRANULATED SUGAR
COLOR ASH MOISTURE
Not more than 35 RBU Not more than .015% Not more than .030%
UNIGRAN SUGAR
COLOR ASH MOISTURE
Not more than 35 RBU Not more than .015% Not more than .030%
GRAIN SIZE - CUMULATIVE PERCENT RETAINED
SANDING SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
20 20 3.0 8.0 10.0
28 30 50.0 65.0 70.0
48 50 98.0 99.3 100.0
Passing 48 Passing 50 -- 0.7 2.0
COARSE GRANULATED SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
20 20 -- 5.0 10.0
28 30 5.0 25.0 50.0
35 40 50.0 75.0 100.0
Passing 60 Passing 60 -- 2.0 5.0
Passing 80 Passing 80 -- 1.0 2.0
Passing 100 Passing 100 -- 0.5 1.0
UNIGRAN SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
28 30 4.0 12.0 20.0
Passing 48 Passing 50 -- -- 10.0
POWDERED SUGARS UNITED SUGARS
All our powdered sugars are milled with 3% corn starch to prevent caking to
produce a fine, powdered product. In confectionery products it provides
excellent mouthfeel and appearance, and its smooth, light texture promotes
spreadability in icings.
6X POWDERED SUGAR
With its small, uniform particle size, 6X powdered sugar is perfect
for a wide range of bakery and confectionery products. It creates
smooth, easy-to-spread icings, and when dusted on baked goods, it
adds a pleasant sweetness and appearance.
10X POWDERED SUGAR
10X powdered sugar is more finely milled than 6X, and is also ideal
for dusting and icing a wide range of bakery and confectionery
products.
FONDANT AND ICING SUGAR
Our finest milled powdered sugar, Fondant Sugar provides excellent
smoothness and spreadability. It is an excellent choice for use in
cream fillings of candies, icings and dusting bakery products.
POWDERED PRODUCTS:
6X: 10X: Fondant & Icing:
25 LB Bag 50 LB Bag 50 LB Bag
50 LB Bag 100 LB Bag
100 LB Bag
POWDERED SUGARS UNITED SUGARS
TYPICAL ANALYSIS
6X POWDERED SUGAR
SUCROSE STARCH MOISTURE
Approximately 97.0% Approximately 3.0% Not more than 0.30%
10X POWDERED SUGAR
SUCROSE STARCH MOISTURE
Approximately 97.0% Approximately 3.0% Not more than 0.30%
FONDANT AND ICING SUGAR
SUCROSE STARCH MOISTURE
Approximately 97.0% Approximately 3.0% Not more than .030%
GRAIN SIZE - CUMULATIVE PERCENT RETAINED
6X POWDERED SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
100 100 -- 0.5 1.0
150 140 -- 2.0 3.0
200 200 -- 5.0 6.5
Passing 200 Passing 200 93.5 95.0 --
10X POWDERED SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
100 100 -- 0.01 0.01
150 140 -- 1.0 1.4
200 200 -- 3.0 3.8
270 270 -- 6.0 7.8
325 325 -- 12.5 14.8
Passing 325 Passing 325 85.2 87.8
FONDANT AND ICING SUGAR
XXXXX XXXXX U.S. SIEVE MINIMUM TARGET MAXIMUM
Passing 325 Passing 325 98.0 99.0 --
XXXXX SUGARS UNITED SUGARS
Our xxxxx sugars are coated with a uniquely blended syrup for a rich, molasses
flavor and attractive coloring. Their exceptional texture and taste make them
ideal for use in a variety of products.
LIGHT XXXXX
This xxxxx sugar has a light, golden xxxxx color. It provides a mild
sweet caramel flavor, and is ideal for use in icing, caramel corn
and bakery products.
DARK XXXXX
This xxxxx sugar has a rich, deep xxxxx color. It provides a rich,
full-bodied molasses flavor and is ideal for use in baked beans,
smoked meats, bakery and confectionery products.
XXXXX PRODUCTS:
Light Xxxxx: Dark Xxxxx:
25 LB Bag 50 LB Bag
50 LB Bag 2,000 LB Totes
100 LB Bag
2,000 LB Totes
TYPICAL ANALYSIS
LIGHT XXXXX SUGAR
SUCROSE REDUCING SUGARS ASH MOISTURE pH AT 20 C
94.0% +/- 2.0% 3.5% - 4.5% 0.8% - 1.2% 1.7% - 2.4% 5.2 - 6.5
DARK XXXXX SUGAR
SUCROSE REDUCING SUGARS ASH MOISTURE pH AT 20 C
94.0% +/- 2.0% 3.5% - 4.5% 0.8% - 1.2% 1.7% - 2.4% 5.2 - 6.5
LIQUID TYPE O SUGAR UNITED SUGARS
The exacting chemical, physical and microbiological standards of this sugar make
it ideal for use in products whose formulation receives limited processing. It
is used in dairy products, processed foods, confectionery and beverages. Liquid
Type O Sugar can be certified to meet specifications of the National Food
Processors Association and the National Soft Drink Association upon request.
TYPICAL ANALYSIS
LIQUID SUGAR TYPE O
ASH TOTAL SOLIDS WEIGHT
BY CONDUCTIVITY FLOC SEDIMENT % BY XXXXXXXXXXXXX xX, 00 C PER GALLON 20 C COLOR
Not more than .025% Negative Not more than 1 ppm 67.5+/-0.2 7.5 Per Gallon 20 C White
11.105 lbs.
