MEMBER NO.  ______

 

 

UNIFORM CATTLE DELIVERY AND MARKETING AGREEMENT

 

 

U.S. PREMIUM BEEF, LLC

P.O. BOX 20103

KANSAS CITY, MO 64195

PHONE: 866-877-2525 FAX: 816-713-8810

 

"EVEN SLOTS"

 

            THIS AGREEMENT, effective as of _______________, 20__ is between
U.S. Premium Beef, LLC (a Delaware limited liability company, referred to as
"USPB"), and the undersigned contracting producer (referred to as "Producer")
who holds Class A Units issued by USPB.  USPB desires to protect its interests
by ensuring that it will have access to an adequate supply of cattle for
delivery to cattle processing facilities owned, controlled, or contracted by
USPB on behalf of USPB and other Class A Unitholders who deliver cattle to or
through USPB; and the Producer desires to supply cattle to or through USPB for
processing.  USPB and the Producer agree that the Producer must own, control, or
associate with others to make beneficial changes in cattle breeding and
production to meet processing and beef consumer preference demands.  Subject to
the terms, conditions, and obligations of USPB and Producer in this Agreement,
similar obligations of other Class A Unitholders contracting with USPB, and in
accordance with the Limited Liability Company Agreement of USPB, the Producer
and USPB agree as follows:

 

            1.         Commitment to Supply Cattle to USPB.  The Producer agrees
to deliver and supply to USPB and USPB agrees to buy and receive one head of
cattle from the Producer for each Class A unit owned by the Producer (subject to
assignment as provided below and as provided in Paragraph 13) each year during
the term of this Agreement, except that the Board of Directors may reduce the
annual cattle delivery amount by giving advance written notice if the Board
determines in its sole discretion that the available processing capacity held,
controlled, or contracted by USPB for its Class A Members will be a lesser
amount.  The Board of Directors may, by resolution, allow a small deviation from
the above annual delivery requirements to allow for Producer's production
variances.  The Board of Directors may approve the assignment of delivery rights
under this Agreement to another Class A Member or associate of USPB; provided,
however, that the Producer remains liable for any underdeliveries or
non-deliveries. 

 

            2.         Delivery of Cattle.  The cattle committed to USPB under
Paragraph 1 must be delivered to USPB on an equal four week basis as determined
by USPB.  A uniform delivery schedule shall be prepared by USPB and given to the
Producer on a regular basis.  The Producer agrees to supply the cattle in
accordance with the delivery schedule and agrees the risk of loss for the cattle
shall remain with the Producer until the cattle are delivered to USPB at a
location designated by USPB.

 

            3.         Appointment of USPB as Purchasing Agent.  The Producer
appoints and designates USPB to act as his, her or its sole agent in the sale
and marketing or utilization of cattle committed to USPB under this Agreement
and any extensions, renewals or amendments of this Agreement.

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U.S. PREMIUM BEEF, LLC

EVEN SLOTS DELIVERY AGREEMENT

 

 

 

 

            If a Producer is unable to supply the required amount of cattle, the
Producer must obtain the cattle from any other source and deliver the cattle to
USPB, just as if the cattle had been produced by the Producer.  If the Producer
does not deliver the cattle as stated, the Producer agrees that USPB, at USPB's
option without the obligation, may act as Producer's agent for the purpose of
obtaining cattle in the name of the Producer and may charge to the Producer all
expenses, including, but not limited to, the price of the cattle, shipping,
reasonable attorneys' fees, and all incidental costs.

 

            USPB shall have no obligation to accept any cattle for marketing or
processing in an amount greater than one head of cattle for each Class A Unit
held by Producer, regardless of whether the Producer's total cattle production
has increased.

 

            4.         Minimum Quality Standards.  All cattle delivered by
Producer under this Agreement shall meet the minimum quality standards of the
industry for cattle to be processed.  Cattle of substandard quality, as
determined by USPB or the entity processing the cattle, shall be either: (1)
rejected and returned to the Producer with all costs relating to the rejection
and return charged to the Producer; or (2) accepted and handled or disposed of
in a manner customary in the industry with any necessary costs charged to the
Producer.  If the Producer intentionally delivers cattle that fail to meet
minimum quality standards (due to disease or otherwise), repeatedly delivers
cattle that fail to meet minimum quality standards (due to disease or
otherwise), or intentionally delivers cattle from a source, feedyard, or supply
that jeopardizes the quality of the meat from the cattle as determined by USPB,
it is a breach of this Agreement and USPB may terminate this Agreement and the
Producer's membership in USPB. 

 

5.         Pooling Arrangement.  USPB may pool the Producer's cattle for sale to
various markets or for processing.

 

            6.         Payment to Producer.  USPB shall market, process and
utilize the cattle and products from the cattle in a manner it deems to be in
the best interest of USPB and all of the Class A Members marketing and
delivering cattle to or through USPB.  USPB agrees to pay the Producer according
to a Pricing Schedule determined by the Board of Directors.  That Pricing
Schedule will reflect cattle payments for delivery and transfer of cattle to or
through USPB for processing that include a market based purchase price plus
consumer, market and processor based quality incentives as determined by the
Board.  To the extent possible and as determined by the Board of Directors, USPB
will base payments on a quality grid policy guide for cattle delivered to or
through USPB. 

                                                                                                                                                                       

            7.         Term.  The term of this Agreement continues as long as
the Producer holds Class A Units of USPB, provided, however, for purposes of
determining cattle commitments, contractual delivery requirements, or to
terminate this Agreement independent of the Class A Units, the term shall be
construed to be a five (5) year "evergreen" that automatically renews annually
in the beginning of USPB's fiscal year for a subsequent five year period. 
Notwithstanding the other provisions of this Paragraph 7, if USPB transfers all
or substantially all of its assets to another entity, merges or consolidates
with another entity, or dissolves and the action is approved by the unitholders
as provided in the Limited Liability Company Agreement, then USPB may terminate
this Agreement upon sixty (60) days prior written notice or coterminous with the
transfer of assets, merger, consolidation, or dissolution.

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EVEN SLOTS DELIVERY AGREEMENT

 

 

 

            8.         Liquidated Damages and Injunctive Relief.  The Producer
acknowledges that monetary damages may not be a sufficient remedy for the
Producer's failure to deliver cattle in accordance with the terms and conditions
of this Agreement or for other breach of this Agreement, and that USPB shall be
entitled, in addition to all other rights or remedies in law and equity, to seek
injunctive relief, a decree of specific performance or other equitable relief,
without the necessity of posting a bond in connection with that right or
remedy.  It is further agreed that in the event of any breach of this Agreement,
because of the impossibility of ascertaining with accuracy the damages resulting
from such a breach, USPB shall be entitled, as liquidated damages, to an amount
equal to twenty-five percent (25%) of the market value of the cattle which the
Producer has failed to deliver or improperly furnished under the terms of this
Agreement, provided however the Board at its discretion may by resolution exempt
from breach and liquidated damages a certain amount or percentage of the cattle
required to be delivered based on accepted production losses or reduce the
amount based on market or economic factors on a case by case basis.  The greater
amount of liquidated damages in the previous sentence applies if the Board of
Directors determines the breach is willful, the reason of the breach was to take
advantage of higher markets elsewhere, or the Producer is abandoning the
Producer's contractual duties to USPB and other members or unitholders of USPB. 
Should the non‑performance by the Producer of his, her, or its obligations under
this Agreement result in the termination of his, her, or its membership in USPB,
the Producer agrees that, in addition to any other remedies available to USPB,
the amount of damages as he or she may become obligated to pay USPB may be
offset by USPB in USPB's discretion against the Producer's units in USPB or
other evidences of equity.  The Producer agrees to pay all reasonable legal
costs and expenses, including attorneys' fees and court costs, incurred by USPB
in any action brought by USPB against the Producer for any breach or threatened
breach of this Agreement.

 

            9.         Compliance with USPB's Governing Instruments.  The
Producer accepts and agrees to conform to and abide by the provisions of the
Limited Liability Company Agreement during the term of this Agreement. 

 

            10.       Security Interests.  If the Producer grants a security
interest in any of his, her, or its cattle marketed to or through USPB under and
during this Agreement, USPB shall have the right, but not the obligation, after
acceptance of the cattle by USPB, to pay off all or part of the obligation
underlying the security interest.  The payment shall be for the account of the
Producer and shall be charged against the amount owing to the Producer by USPB.

 

            The Producer shall inform USPB of all security interests he or she
has granted by disclosing all security interests as provided by state or federal
law, and if not provided, then Producers shall provide disclosure separately in
writing.  The Producer shall notify USPB prior to granting any security
interest.

 

             11.       Inability of USPB to Perform.  In case of fire,
explosions, interruption of power, strikes or other labor disturbances, lack of
transportation facilities, shortage of labor supplies, floods, action of the
elements, disease or quarantine, riot, interference of civil or military
authorities, enactment of legislation or any unavoidable casualty or cause
beyond the control of USPB or processors engaged or contracted by USPB that
prevents or unreasonably restricts the receiving, handling, processing,
marketing of cattle, or other operations, USPB shall be excused for performance
during the period that USPB's business or operations are so affected.  USPB in
its judgment may, during such period, operate on a limited basis and accept for
processing the portion of cattle that can economically be handled and that USPB
has informed Producer.

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U.S. PREMIUM BEEF, LLC

EVEN SLOTS DELIVERY AGREEMENT

 

 

 

 

            USPB shall give written notice to the Producer of the inability to
perform and the specific cause or causes for the non‑performance.  The Producer
shall be paid, pursuant to this Agreement, for all cattle accepted for
processing. 

 

            12.       Complete Agreement.  USPB and Producer agree that there
are no oral or other conditions, promises, representations or inducements in
addition to or in variance with any of the terms of this Agreement, and that
this Agreement fully and completely represents the voluntary and clear
understanding of both parties.

 

             13.      Assignment by Producer.  The Producer may only assign or
transfer his, her, or its delivery rights under this Agreement, to a Class A
Member or an associate of USPB upon notification and acceptance by USPB.  No
assignment or transfer may occur without the prior written consent of USPB, and
then only to a producer who is a Class A Member or associate. 

 

             14.      Waiver of Breach.  No waiver of a breach of any of the
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.

 

             15.      Construction of Terms of Agreement.  The language and all
parts of this Agreement shall be construed as a whole and not strictly for or
against any party.  In the event any term, covenant or condition of this
Agreement is held to be invalid or void by a court, the invalidity of any such
term, covenant or condition shall in no way affect any other term, covenant or
condition of this Agreement.  This Agreement shall be interpreted under Kansas
law, without reference to the Kansas law regarding conflict of laws.

 

             16.      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 and their successors
and permitted assigns.

 

            17.       Termination of Any Prior Marketing Agreement.  USPB and
the Producer agree that this Agreement terminates, supersedes, and replaces any
prior Marketing Agreements between USPB and the Producer on the effective date
of this Agreement.

 

 

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U.S. PREMIUM BEEF, LLC

EVEN SLOTS DELIVERY AGREEMENT

 

 

            18.       Modification.  This Agreement may be amended or modified
upon a majority vote of the Class A Members who are a party to a Uniform
Delivery and Marketing Agreement (both "Odd Slots" and "Even Slots").  The
amendment must be considered at a duly held meeting of the Class A Members of
USPB for which the notice states one of its purposes is consideration of
amendments to the Uniform Cattle Delivery and Marketing Agreement by Class A
Members. 

 

 

PRODUCER

U.S. PREMIUM BEEF, LLC

 

 

 

 

  BY

 

BY

 

 

 

 

Mark Gardiner

 

 

 

Its Chair

 

 

 

 

Address

Attest:

 

 

 

 

 

 

 

 

 

 

By

 

 

 

 

Jerry Bohn

      Its Secretary

 

 

 

 

  Date:

 

Date:

 

 

 

 

 

 

 

 

 

 

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