Exhibit 10.31

 

[Portions of this Exhibit have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Exhibit with all sections intact has been filed
separately with the Securities and Exchange Commission.]

 

BEET LOADING AND HAULING AGREEMENT

 

THIS AGREEMENT is made as of April 28, 2003, by and between AMERICAN CRYSTAL
SUGAR COMPANY, a Minnesota agricultural cooperative corporation, whose address
is 101 North Third Street, Moorhead, Minnesota (hereinafter “ACSC”) and
TRANSYSTEMS LLC, a Wyoming limited liability company, whose address is 511
Central Avenue West, Suite 2, Great Falls, Montana (hereinafter “Contractor”).

 

1.                   Purposes:  This Agreement shall cover:

 

(a)                             The loading of sugarbeets from storage piles
into trucks by Contractor at ACSC’s outside sugarbeet receiving stations at the
locations designated on Exhibit A hereto (the “Outside Receiving Stations”) for
hauling by truck to ACSC’s sugarbeet factories at: Moorhead, Crookston, East
Grand Forks, Minnesota; Hillsboro and Drayton, North Dakota; (collectively, the
“Factories”);

 

(b)                            The hauling of sugarbeets by truck by Contractor
from the Outside Receiving Stations to the wet hoppers at the Factories and the
unloading thereof into the wet hoppers;

 

(c)                             The loading of sugarbeets from storage piles
into trucks by Contractor at the receiving stations at the Factories (the
“Factory Receiving Stations”), the hauling of such sugarbeets by truck to the
wet hoppers at the Factories and the unloading thereof into the wet hoppers. 
Outside Receiving Stations and Factory Receiving Stations may hereinafter be
collectively referred to as “Receiving Stations;” and

 

(d)                            Teardown services, clean up, snow removal and
other services as provided herein.

 

With all of such services as set forth above and more fully described in
Sections 3, 4, 5 and 15 below collectively referred to as the “Transportation
Services.”

 

2.                   Term:  This Agreement shall be effective as of the date
hereof and shall be in effect for and during the sugarbeet processing campaigns
with respect to the 2003 through 2007 sugarbeet crops (the “Term”), unless
cancelled or terminated earlier as hereinafter provided.  Each sugarbeet
processing campaign shall be referred to as the “Campaign Period” and each
12-month period commencing on September 1 and ending on August 31, shall be
referred to as a “Contract Year.”

 

3.                   Loading:  During each Campaign Period, Contractor agrees to
load into trucks of Contractor as directed by ACSC all sugarbeets in storage
piles as designated by ACSC at the specified Outside Receiving Stations and
shall load or replace in storage piles, all sugarbeets which may fall to the
ground during loading.  As requested by ACSC, Contractor shall deliver
designated mixes of loads of sugarbeets from Factory Receiving Stations and from
Outside Receiving Stations to assist in maintaining consistent deliveries to the
Factories.  Contractor will have at least twelve (12) loaders available at all
times during the Term hereof to fulfill the loading requirements hereunder. 
Such loaders shall be provided at the costs specified on Exhibit A.

 

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In the event ACSC requests that Contractor operate additional loaders for
sugarbeet blending purposes, ACSC will reimburse Contractor for the additional
loaders at the rate set forth on Exhibit A.

 

4.                   Hauling:

 

(a)                             Responsibility of Contractor.  During each
Campaign Period, Contractor agrees to haul by truck all sugarbeets loaded as
described in Section 3 to the Factories designated by ACSC and to unload all of
said sugarbeets, including those which may fall to the ground during transport
and unloading, into the wet hopper on the grounds at the designated Factories. 
Contractor shall assure a reliable supply of sugarbeets to each Factory such
that there is no gap in deliveries to any Factory wet hopper of more that five
minutes.

 

(b)                            Limitation of Contractor Responsibility. 
Notwithstanding the provisions of paragraph (a) above, Contractor’s
responsibility to haul sugarbeets from the Outside Receiving Stations shall be
based on the capacity of the Equipment, with such limitation to be an average of
1,152,000 ton miles per day from such Outside Receiving Stations during each
Campaign Period (the “Maximum Haul”).  In addition to the normal hauling rates
set forth on Exhibits A and D, ACSC will be responsible for all incremental
costs incurred to haul sugarbeets in excess of the Maximum Haul.  Contractor
agrees to provide ACSC with such documentation as may be requested by ACSC to
verify the incremental costs.  Subject to the preceding sentence, the rates set
forth on Exhibits A and D shall apply to hauls in excess of the Maximum Haul. 
The parties will cooperate during the Campaign Period to project the projected
ton miles per day for the Campaign Period.  In the event the parties project
that the Maximum Haul will be exceeded during any Campaign Period, the parties
will mutually agree as to methods and costs for transporting the sugarbeets in
excess of the Maximum Haul.  Should the parties be unable to reach such
agreement, ACSC may make alternate arrangements and/or retain the services of a
third party to transport sugarbeets in excess of the Maximum Haul, and
Contractor shall not be entitled to any compensation with respect to the
transportation of such sugarbeets.

 

5.                   Factory Yard Loading and Hauling:  During each Campaign
Period, Contractor agrees to load into trucks all sugarbeets in storage piles as
designated by ACSC at the specified Factory Receiving Stations and to transport
such sugarbeets to, and unload the same into, the wet hoppers or Contractor’s
Unloading Equipment at each Factory.  Contractor shall load or replace in
storage piles, all sugarbeets that may fall to the ground during loading.

 

6.                   Tear Down Services:  At ACSC’s request and upon expiration
of existing contracts between ACSC and certain third parties, Contractor agrees
to assume the responsibility for performing the “tear down” of frozen sugarbeets
at designated locations prior to loading.  Tear down services shall include the
tear down of the sugarbeet piles with a backhoe, and the removal and stacking of
ventilation tubes.  Frozen sugarbeets are located at the deep freeze piling
sites set forth on Exhibit B, attached hereto (the “Deep Freeze Beets”). 
Notwithstanding commencement of the Term of this Agreement, tear down services
shall commence on the following schedule to the extent requested in writing by
ACSC:

 

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Location of Deep Freeze Storage Piles

 

Crop Year

 

Crookston District Piles

 

2003

 

Drayton District Piles

 

2003

 

East Grand Forks District Piles

 

2004

 

Hillsboro District Piles

 

2004

 

Moorhead District Piles

 

2005

 

 

Contractor shall provide all necessary equipment to perform tear down services
on a schedule to be established by ACSC.  ACSC will provide necessary ripper
claw buckets for the backhoes.  In the event Contractor performs services
pursuant to this Section 6, such services shall be considered “Transportation
Services” and Contractor shall be paid for such services in accordance with the
terms of this Agreement, at a rate of XXXXX per hauled ton for tear down and
XXXXX per tube for tube removal and stacking. [Portions of this section have
been omitted pursuant to a request for confidentiality under Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.  A copy of this Agreement with this
section intact has been filed separately with the Securities and Exchange
Commission.]

 

7.                   Equipment:

 

(a)                             Provision of Equipment. Contractor shall supply
the necessary trucks, equipment, fuel, material, labor, parts inventory and
other items necessary to perform its obligations under this Agreement.  All
equipment shall be of appropriate size, weight and capacity to properly
accomplish the work without injury or damage to the personnel or property of
ACSC.  Except as otherwise agreed upon by ACSC, Contractor shall furnish at
least that equipment referenced in its bid proposal dated March 7, 2003 and
reflected on Exhibit C, attached hereto (the “Equipment”).  Contractor shall
develop and furnish ACSC with a plan to provide additional equipment to meet
unexpected needs.  Contractor shall maintain all trucks and semi trailers free
of dirt, debris and snow buildup in the truck or trailer box.  ACSC shall
maintain or cause to be maintained adequate electrical service and lighting at
each Outside Receiving Station and Factory Receiving Station.

 

(b)                            Unloading Equipment.  Contractor may install at
its cost additional unloading equipment (the “Contractor’s Unloading Equipment”)
at one or more of the Factories to enable Contractor to unload semi tractors
equipped with combination trailers (pups).  Contractor shall be responsible for
all costs related to the purchase, installation, maintenance, and operation of
the Contractor’s Unloading Equipment.  The Contractor’s Unloading Equipment
shall be installed pursuant to plans and at locations to be mutually agreed upon
by the parties.  Contractor will be responsible for obtaining all permits and
approvals from government authorities that are necessary for installation and
operation of the Contractor’s Unloading Equipment.  Contractor will be
responsible for staffing the Contractor’s Unloading Equipment.  Contractor will
equip each Factory’s wet hopper operating station with controls that will enable
ACSC personnel to transfer sugarbeets from Contractor’s surge tanks to the wet
hopper.  ACSC will provide electricity to operate the Contractor’s Unloading
Equipment at no additional charge to Contractor.  The Contractor’s Unloading
Equipment shall be installed and operated so as not to interfere with the
efficient operation of the Factory.  If in ACSC’s judgment the use of the
Contractor’s Unloading Equipment is adversely affecting the operation of the
Factory, upon notice by ACSC to Contractor, Contractor shall immediately modify
the operation of such equipment to rectify the adverse effect on Factory
operation, or discontinue the use of such equipment.  Contractor shall be
responsible for the costs of any such modifications.  Except as otherwise
specifically provided in Section 11 for the Drayton Factory, the installation,
use, modification and or discontinued use of the Contractor’s Unloading
Equipment shall not

 

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affect the rates charged for Transportation Services.  ACSC shall continue to
make its existing unloading equipment available to Contractor at each Factory
throughout the Term hereof.  Contractor shall retain ownership of, and insure
the Contractor’s Unloading Equipment during the Term hereof, and shall remove
such equipment from each Factory within sixty (60) days following termination of
this Agreement.

 

8.                   Work Schedules:  Contractor shall coordinate its work with
ACSC’s Management at the Factories and shall operate with sufficient equipment
and labor, twenty-four hours per day, seven days per week, so as to keep the
Factories supplied with sugarbeets at all times to permit optimum full-scale
Factory operations.  Contractor shall deliver sufficient quantities of
sugarbeets to permit each Factory to operate at its optimum daily slicing
capacity, it being understood that, through the term of this Agreement, ACSC
may, at any time, increase or decrease the slicing capacity at any of the
Factories.  ACSC shall have complete discretion in determining which Receiving
Stations or portions thereof shall be hauled at any given time and the times and
rates at which sugarbeets covered by this Agreement shall be received at the wet
hoppers at the Factories.  Notwithstanding the foregoing, at no time shall
Contractor be required to haul 100% of the total slice from the Outside
Receiving Stations to all Factories at the same time.  Each party shall keep the
other constantly advised of estimated delivery schedules and Factory operations
and shall, particularly, notify the other promptly of any matter arising which
might result in any delay or change in the anticipated time or rate of receipt
of sugarbeets covered by this Agreement.  Contractor shall furnish equipment as
necessary to transport outside piles to the Factories before removing any
sugarbeets from either ACSC’s above ground ventilation piles or ACSC’s deep
freeze storage buildings.

 

9.                   Due Care:  Contractor shall use due care in its operations
to ensure that there is minimal damage, injury, or loss of sugarbeets to be
transported and unloaded under this Agreement and to ensure that no dirt, trash
or debris is unloaded at the wet hopper at the Factories other than that already
adhering to the sugarbeets when loaded into its trucks.  All frozen chunks of
sugarbeets must be broken up prior to loading into trucks.

 

10.            Default:  In the event Contractor fails to comply with any of the
provisions of this Agreement or does not perform to ACSC’s good faith
satisfaction, ACSC may: (a) immediately employ such equipment and labor or
immediately contract with others as is necessary, in ACSC’s sole discretion, to
complete or facilitate the work of Contractor; and/or (b) terminate this
Agreement as to Contractor by 10 days notice in writing and employ such
equipment and labor or contract with others as is necessary, in ACSC’s sole
discretion, to complete the Transportation Services to be provided hereunder. 
In either the event of (a) or (b) above, Contractor shall pay ACSC, upon demand,
that portion of ACSC’s costs incurred for facilitating or completing the
Transportation Services that are in excess of the payments that would have been
made to Contractor for such work under this Agreement

 

11.            Payments:  For the work hereunder, ACSC agrees to pay, and
Contractor agrees to accept, the amounts set forth on Exhibit A hereto, subject
to the annual wage adjustments provided in Section 17 of this Agreement.  In the
event Contractor installs Contractor’s Unloading Equipment at the Drayton
Factory, the rates set forth on Exhibit D hereto shall replace the rates on
Exhibit A, with respect to the Drayton Factory only.  The installation of
Contractor’s Unloading Equipment at the other Factories shall not affect the
rates set forth on Exhibit A.  The rates on Exhibits A and D noted as “Fall
Rates” shall apply during that portion of the Campaign Period that seasonal road
weight restrictions are in effect.  The rates on Exhibits A and D noted as
“Winter Rates” shall apply during that portion of the Campaign Period that
seasonal weight

 

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restrictions are removed.  All rates are based on maximum legal weight limits on
all haul roads involved.  Contractor agrees to furnish thirty (30) full (pup)
trailers for operation of combination units having a gross vehicle weight of
105,500 pounds.  If such thirty units is not sufficient to fully service the
Outside Receiving Stations designated by ACSC, Contractor shall use its other
Equipment to meet the ACSC requirements and the rates for such Equipment set
forth on Supplement #1 to Exhibit A shall apply.  If Contractor is required to
reduce or is allowed to increase the normal truckload weights by reason of any
governmental action, the rates expressed on Exhibits A and D will be adjusted
accordingly.   For purposes of the preceding sentence, the gross vehicle weights
set forth on Exhibit A shall be the “normal” truckload weights and shall serve
as the basis for determining an increase or decrease in permitted truckload
weights.  Payments shall be made by ACSC to Contractor on the basis of
statements of weights on or before the 23rd day of each month for all sugarbeets
hauled from the 1st to the 15th of each month and on or before the 8th day of
each month for all sugarbeets hauled between the 16th and the last day of the
preceding month.  Settlement for each Outside Receiving Station shall be made
upon the satisfactory completion of all hauling from that Outside Receiving
Station

 

12.            Fuel Provisions.  The rates established by Exhibits A and D are
based on an estimated fuel cost of $1.05 per gallon delivered.  The price per
gallon for fuel for each crop year will be set at a specified rate per gallon
delivered by agreement between the parties on or before August 1st of each of
the crop years covered by this Agreement.  The rates set forth on Exhibits A and
D will be adjusted based on the agreed upon fuel price for that Campaign
Period.  Should the fuel price vary from that agreed upon, the difference will
be paid by, or credited to ACSC at the end of the Campaign Period.  Contractor
will furnish ACSC with copies of all fuel invoices for the purpose of the annual
calculation.  ACSC reserves the right to purchase and supply fuel to Contractor
at Contractor’s expense if ACSC can obtain fuel at a lower cost per gallon
delivered than can Contractor.  For the purpose of the annual rate adjustment
provided for herein, the cost of fuel to Contractor is agreed to be 15% of
Contractor’s total costs of operation.  In the event of fuel allocations,
Contractor shall furnish proof of the allocation and guarantee of sufficient
fuel to accomplish its work hereunder during any such period of allocation. 
Failure to provide such proof shall be a default hereunder.

 

13.            Payment Disputes:  In the event of any disputes with respect to
the determination of any amounts due hereunder, ACSC and Contractor, together
with their representatives, shall promptly meet, confer and negotiate in good
faith with a view to resolving any and all such disputes.  If such negotiations
fail to resolve any disputes within fifteen (15) calendar days, the parties
agree to submit the settlement of such dispute to binding arbitration pursuant
to the commercial arbitration rules of the American Arbitration Association. 
The arbitration shall be conducted in Minneapolis, Minnesota, U.S.A.  Any award
rendered shall be final and conclusive upon the parties. The parties shall
request and the American Arbitration Association shall (i) appoint a single
arbitrator who is familiar with the industry; (ii) direct the arbitrator to
follow substantive rules of law and the federal rules of evidence, where and if
applicable; (iii) allow the parties to conduct discovery pursuant to the rules
then in effect under the federal rules of civil procedure (excluding
confidential records that are not relevant to the issues being arbitrated) for a
period not to exceed thirty (30) days; (iv) require any testimony to be
transcribed; and (v) require any award or decision to be accompanied by findings
of fact and a statement of reasons for the decision.  Each party shall bear its
own costs and expenses, including reasonable attorney’s fees and expert’s fees,
incurred in any dispute that is determined and/or settled by arbitration
pursuant to this Section.  Except where clearly prevented by the area in
dispute, both parties agree to continue performing their respective obligations
under this Agreement (ex. the performance of the

 

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Transportation Services by Contractor and the payment of undisputed amounts by
ACSC) while the dispute is being resolved.

 

14.            Weight Determination: To calculate the weight to be used for
purposes of the rates set forth on Exhibits A and D for the Outside Receiving
Stations, 97% of the raw weight (2000 pounds per ton) of sugarbeets delivered by
growers at that station, less the agreed upon raw weight of sugarbeets discarded
by ACSC, shall be used.  To calculate the weight for purposes of the rates set
forth on Exhibits A and D for the Factory Receiving Stations, 91.6% of the raw
weight (2,000 pounds per ton) of sugarbeets delivered by growers to such piles,
less the agreed upon raw weight of sugarbeets discarded by ACSC shall be used. 
Raw weight shall mean the weight of purchased sugarbeets before the deduction
for tare.  The record of weights of sugarbeets hauled under this Agreement will
be kept by ACSC and statements of weights shall be furnished by ACSC to
Contractor.

 

15.            Other Responsibilities of Contractor:

 

(a)                             Clean Up.  Upon the completion of Contractor’s
operations at any Receiving Station, Contractor shall level the piling site by
backdragging with its loader and shall clean up the site and scale house,
hauling away all trash and garbage.

 

(b)                            Snow Removal.  At the request of ACSC, Contractor
shall haul snow and beet debris to separate staging areas as designated by
ACSC.  Such services will be provided to ACSC by Contractor at a rate of $40.00
per hour for a truck and driver, and $48.00 per hour for a loader and operator,
in each case to be billed to ACSC as provided in Section 11.

 

(c)                             Sugarbeet Disposal.  At the request of ACSC,
Contractor shall remove and dispose of any sugarbeets that it does not deliver
to a Factory for processing to areas designated by ACSC.  Such removal and
disposal shall be accomplished in accordance with the applicable state and
federal laws and environmental regulations.  Contractor’s obligations are
limited to the loading and hauling (in Contractor’s Equipment) of such
sugarbeets to sites designated by ACSC.  Contractor will unload such sugarbeets
at a single site for each load and will not be responsible for spreading
sugarbeets at disposal sites.  Such removal and disposal services will be
provided to ACSC by Contractor at a rate of $40.00 per hour for a truck and
driver, and $48.00 per hour for a loader and operator, in each case to be billed
to ACSC as provided in Section 11.  This paragraph does not apply with respect
to sugarbeets left at a location at the request of ACSC due to spoilage, excess
snow, or other factors.

 

(d)                            Portable Toilets.  Contractor shall furnish a
portable toilet at all Outside Receiving Stations while sugarbeets are being
hauled from that Station.

 

16.            Compliance With Laws:  Contractor shall obtain any necessary
permits, licenses or certifications and shall comply with all applicable laws,
ordinances, rules and regulations, and specifically, without limiting the
generality of the foregoing, with applicable Worker’s Compensation laws and
Unemployment Compensation laws, the Federal Insurance Contributions Act and
Federal Unemployment Tax Act, federal and state withholding tax and federal and
state labor laws and other laws affecting employers and employees with respect
to all employees of Contractor and subcontractors and such subcontractors’
employees and shall furnish evidence of such compliance to ACSC upon request. 
Contractor shall post appropriate highway warning

 

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signs at piling sites when operating and shall keep local, state, county and
township officials advised should its activities create hazardous road
conditions.  Contractor shall comply with all Federal and State environmental
laws and requirements for proper disposal of all waste material including but
not limited to tires, waste oil (including grease rags, oil filters), tires and
batteries.

 

17.            Wage Requirement:

 

(a)                             It is understood and agreed that ACSC is subject
to a collective bargaining agreement with the Bakery, Confectionery, Tobacco
Workers and Grain Millers AFL-CIO (the “Collective Bargaining Agreement”) which
provides that ACSC will obligate third parties to pay certain minimum wages to
employees moving sugarbeets within the Factory yard.  Contractor shall
compensate its affected employees in accord with this requirement, including
wage adjustments as provided in the Collective Bargaining Agreement.  The
applicable minimum as of the date of this Agreement is XXXXXX per hour.  The
rate for Factory yard loading and hauling expressed on Exhibit A will be
adjusted based on wage increases applied only to Contractor’s employees
specifically affected by the Collective Bargaining Agreement, but only on a
straight time basis.  Contractor will provide ACSC with the information relative
to the employees affected sufficient to enable ACSC to verify the rate
adjustment.  [Portions of this section have been omitted pursuant to a request
for confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

(b)                            The rates set forth on Exhibits A and D shall be
subject to annual adjustment to reflect wage increases for each of the Campaign
Periods during the Term.  For purposes of this adjustment, wages shall be deemed
to be XXXX% of the Contractor’s total rate provided in Exhibits A and D. 
Accordingly XXXXX% of each rate bid shall be adjusted annually by the percentage
of ACSC’s average annual wage rate adjustment effective as of August 1 of the
preceding year under the Collective Bargaining Agreement.  (For example, if a
rate is bid at $XXXXXXper ton and ACSC’s applicable average wage rate adjustment
effective August 1, 2003, is a XXX% increase, the rate for 2004 crop year
operations will be XXXXXX.) [Portions of this section have been omitted pursuant
to a request for confidentiality under Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.  A copy of this Agreement with this section intact has been
filed separately with the Securities and Exchange Commission.]

 

18.            Independent Contractor Status:  It is expressly understood and
agreed that Contractor, in making and entering into this Agreement and in
carrying out the same, is acting and operating as an independent contractor and
is not in any sense an employee, servant, agent, partner or joint venturer of
ACSC and is responsible for directing, hiring, paying and discharging its
employees.

 

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19.            Insurance and Indemnification:

 

(a)                             Contract must provide and maintain the following
insurance coverage:

 

(1)                                  Workers Compensation Insurance as required
by statute and Employers Liability Insurance for claims arising for bodily
injury not covered by statute, in the minimum limit required by applicable state
law or $500,000 per employee (whichever is less).

 

(2)                                  Comprehensive General Liability Insurance
with limits of not less than $1,000,000 combined single limit and $2,000,000
general aggregate for personal injury (including death) and property damage. 
Insurance shall not contain any endorsement or provisions which limit or
restrict coverage for contractual liability.

 

(3)                                  Automobile Liability insurance with limits
of not less than $1,000,000 combined single limit or $1,000,000 bodily injury
and $1,000,000 property damage, all per accident and irrespective of whether
vehicles are owned, hired or non-owned.

 

(4)                                  Umbrella/Excess Liability with limits of
not less than $10,000,000 per occurrence and annual aggregate limit, but
excluding Workers Compensation Insurance as provided for above.

 

(5)                                  All risk property coverage with respect to
the Contractor’s Unloading Equipment in an amount deemed reasonable by
Contractor.

 

Contractor’s deductibles shall not exceed $250,000 per occurrence on any of the
policies of insurance.  Contractor shall provide ACSC with insurance
certificates providing evidence of proper coverage before the start of work. 
Contractor must provide waivers of subrogation from each insurer.

 

(b)                            Contractor will indemnify, defend and hold
harmless ACSC and its subsidiaries, officers, employees, agents, successors,
assigns, from and against any loss, property loss, liability, claim, demand,
suit, action, fine, penalty, cost and expense of any nature whatsoever including
but not limited to reasonable attorneys’ fees, expenses and court costs,
incurred by ACSC or its subsidiaries, officers, employees, agents, successors,
assigns as a result of the negligent or intentional acts of Contractor in
connection with its performance under this Agreement.

 

(c)                             ACSC will indemnify, defend and hold harmless
Contractor and its subsidiaries, officers, employees, agents, successors,
assigns, from and against any loss, property loss, liability, claim, demand,
suit, action, fine, penalty, cost and expense of any nature whatsoever including
but not limited to reasonable attorneys’ fees, expenses and court costs,
incurred by Contractor or its subsidiaries, officers, employees, agents,
successors, assigns as a result of the negligent or intentional acts of ACSC in
connection with its performance under this Agreement.

 

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20.            No Guarantee by ACSC:  ACSC will exercise diligence to see that
there is an ample supply of sugarbeets to permit efficient operation hereunder. 
However, it is expressly understood and agreed that ACSC shall not be liable for
a reduction in volume of its operations or those of Contractor caused by
strikes, lock outs, shortage of materials, a reduction in the supply of
sugarbeets resulting from decisions by growers to deliver from farm fields to
Factory sites or from adverse weather conditions, or due to the physical
condition of sugarbeets making it impossible to store them, or caused by a
reduction in the Factory slice or caused by any other matter, any of which may
prevent, in whole or in part, any operations hereunder or maximum or optimum
operations.

 

21.            Sale of Sugarbeets to Third Parties:  ACSC may at any time sell
its sugarbeets to third parties.  In the event of such a sale Contractor shall
be compensated for its loss of revenue resulting from the sale of sugarbeets. 
Compensation shall be determined by multiplying the number of tons of sugarbeets
that would have been hauled but for the sale, by Contractor’s rate which would
have applied for transporting those sugarbeets to the nearest of ACSC’s
Factories.  The product of that calculation shall be multiplied by .30 to
determine the amount of the payment to be made by ACSC to the Contractor.  In
the event ACSC discards sugarbeets, Contractor shall not be entitled to
compensation for loss of revenue from discarded sugarbeets.

 

22.            Liquidated Damages:

 

(a)                             Premature Use of Deep Freeze Sugarbeets.  ACSC
and Contractor intend that sugarbeets stored in ventilated outside piles and in
buildings (“Deep Freeze Sugarbeets”) not be processed until non-deep freeze
sugarbeets have been processed.  In the event deep freeze sugarbeets are
processed because Contractor fails to deliver sufficient quantities of non-deep
freeze sugarbeets liquidated damages may apply.  The amount of the liquidated
damages is $3.00 per ton of Deep Freeze Sugarbeets, applied to all tons of Deep
Freeze Sugarbeets transported prior to completion of transporting non- Deep
Freeze Sugarbeets.  In the event of severe weather conditions, ACSC may, in its
discretion, excuse the obligation to pay damages under this paragraph.  Deep
Freeze Sugarbeets transported by Contractor at the request of ACSC for reasons
unrelated to Contractor’s failure to deliver sufficient quantities of non-Deep
Freeze Sugarbeets are not subject to the liquidated damage provisions of this
paragraph.

 

(b)                            Supply of Sugarbeets.  Should Contractor fail to
furnish a steady supply of sugarbeets at all times to permit optimum full-scale
Factory operations as required hereunder, Contractor will pay to ACSC, as
liquidated damages and not a penalty, the sum of Five Thousand Dollars
($5,000.00) per hour of Factory down time, pro-rated on 15 minute increments,
for each Factory so affected.  The parties agree that in the event Contractor
fails to supply a steady supply of sugarbeets, actual damages to ACSC would be
difficult or impossible to measure, and further that such hourly sum represents
a reasonable estimate of ACSC’s likely actual damages in such event.  In the
event of severe weather conditions, ACSC may, in its discretion, excuse the
first fifteen minutes of down time.

 

23.            Change of Receiving Stations or Closing of Factories:  ACSC
reserves the right, in its sole discretion, to close and abandon operations or
reduce operations at any Factory and/or Outside Receiving Station and to move
and/or establish new, Outside Receiving Stations.  ACSC shall not be liable to
Contractor for a reduction in Contractor’s revenue by the exercise of any of the
rights so reserved to ACSC.  In the event the Company closes an Outside
Receiving Station, Contractor shall not be entitled to compensation or damages
for the closing of the Stations.  In the event the Company opens a new Outside
Receiving Station, Contractor and

 

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Company, will negotiate the freight rate or rates from that Station to the
appropriate Factory or Factories and Exhibit A will be revised accordingly.

 

24.            Termination:  This Agreement shall terminate at the end of the
Term or may be terminated earlier by written notice as follows:

 

(a)                             By the nonbreaching party if the other party
fails to perform any obligation imposed on it by this Agreement and fails to
cure such breach within ten (10) days following receipt of written notice of the
existence of such a breach; or

 

(b)                            Immediately by either party in the event the
other party is declared insolvent or bankrupt or makes an assignment or other
arrangement for benefit of creditors.

 

Upon the completion of any notice and cure period required under this Section,
this Agreement shall be terminated (except for any on-going obligation arising
hereunder) and such date shall be deemed the “Termination Date.”

 

25.            Factory Shops:  ACSC shall provide Contractor with use of shops
at each Factory for purposes of Equipment service and related activities at a
cost of $50,000 per year to be paid by Contractor.  The shops shall be provided
pursuant to the terms of a lease agreement to be mutually agreed upon by the
parties.

 

26.            Miscellaneous Provisions:

 

(a)                             All notices, requests and demands given to or
made upon the parties hereto shall be in writing and be delivered or mailed by
United States Certified Mail Postage Prepaid, return receipt requested, to the
following addresses:

 

If to ACSC:

 

American Crystal Sugar Company

 

 

101 North Third Street

 

 

Moorhead, Minnesota 56560

 

 

Attention: Ag Operations Manager

 

 

 

With a Copy to:

 

Oppenheimer, Wolff & Donnelly, LLP

 

 

Plaza VII

 

 

45 South Seventh Street, Suite 3300

 

 

Minneapolis, Minnesota 55402

 

 

Attention:  Daniel C. Mott

 

 

 

If to Contractor:

 

Transystems LLC

 

 

511 Central Avenue West, Suite 2

 

 

Great Falls, Montana 59404-2848

 

 

Attention: President

 

Either party may, by notice hereunder to the other party, designate a change of
address.

 

(b)                            This Agreement shall be binding upon and insure
to the benefit of the parties hereto and their respective successors and
assigns, provided that this Agreement shall not be assigned by Contractor
without the prior written consent of ACSC.

 

10

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(c)                             This Agreement shall have been deemed to be made
under the laws of the State of Minnesota and for all purposes shall be construed
in accordance with and governed by the laws of the State of Minnesota.  Any
litigation arising under this Agreement shall be venued in the Courts of the
State of Minnesota.

 

(d)                            No failure on the part of either party to
exercise, and no delay in exercising, any right or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right or remedy granted hereby or by any related document
or by law.

 

(e)                             This Agreement constitutes the sole agreement
between the parties with respect to the subject hereof, and there are no
agreements or understandings with respect to such matters other than as set
forth herein and therein.

 

(f)                               Each party warrants that it has full power and
authority to enter into this Agreement and the entering into this Agreement will
not constitute a default with respect to any other agreement by which it is
bound or to which it is subject.

 

(g)                            Time is of the essence with regard to the
performance of this Agreement.

 

(h)                            This Agreement may not be assigned by either
party (either directly or by operation of law through merger, consolidation,
etc.) without the prior written consent of the other party.  This Agreement
shall be binding on the successor and permitted assigns of the parties.

 

(i)                                ACSC and Contractor agree to enter into an
agreement on substantially the same term as this Agreement with respect to the
transport of sugarbeets at the Sidney, Montana sugarbeet factory that is owned
by Sidney Sugars Incorporated, a subsidiary of ACSC.

 

(j)                                Each party shall designate an individual
representative to act of behalf of such party during the Term of this Agreement
(the “Designated Representative”).  The Designated Representative shall have the
authority to represent the party in all matters related to the administration of
this Agreement.  The initial Designated Representatives shall be as follows:

 

Contractor:                          Dan Rice

ACSC:                                                  Neil Juhnke

 

Either party may change their Designated Representative by providing written
notice of the change to the other party.

 

11

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IN WITNESS WHEREOF, the parties have executed this Agreement in their corporate
names by proper corporate officers and affix their corporate seals as to the day
and year above stated.

 

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

 

 

 

By:

/s/ David Berg

 

 

Its:

Vice President Agriculture

 

 

 

 

 

 

 

 

 

TRANSYSTEMS LLC

 

 

 

 

 

 

 

By:

/s/ Scott Lind

 

 

Its:

President

 

 

12

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FALL RATES

EXHIBIT A

 

RFQ FORM

FREIGHT FROM RECEIVING STATION TO FACTORY

 

American Crystal Sugar Company

As a Rate Per Ton for Delivery To (fill in white area only):

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

13

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RFQ FORM

FREIGHT FROM RECEIVING STATION TO FACTORY

 

American Crystal Sugar Company

 

Rate per ton mile for hauls other than those specified will be negotiated.

 

Load and haul factory yard per ton.

 

XXXXXX

Load outside stations per ton

 

XXXXXX

If an excess of twelve (12) loaders used simultaneously at request of ACS, the
additional rate per ton is

 

XXXXXX

Loader moves

 

XXXXXX

Hourly loader rate

 

XXXXXX

Percent of Fuel to Total Cost

 

XXXXXX

Percent of Labor to Total Cost

 

XXXXXX

Alternate pricing for al ACSC sites:

 

 

Teardown deep freeze and remove vent tubes

 

XXXXXX

Haul and stack deep freeze vent tubes

 

XXXXXX

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

14

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FALL GVW’S

 

 

RFQ FORM

FREIGHT FROM RECEIVING STATION TO FACTORY

 

American Crystal Sugar Company

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems.

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

15

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WINTER RATES

EXHIBIT A

 

RFQ FORM

FREIGHT FROM RECEIVING STATION TO FACTORY

 

American Crystal Sugar Company

As a Rate Per Ton for Delivery To (fill in white area only):

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

16

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WINTER GVW’S

 

 

RFQ FORM

FREIGHT FROM RECEIVING STATION TO FACTORY

 

American Crystal Sugar Company

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems.

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

17

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FALL RATES

SUPPLEMENT #1

 

RATES FOR FIVE AXLE – DRAYTON & HILLSBORO

 

American Crystal Sugar Company

As a Supplemental Rate Per Ton for Delivery To:

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

18

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FALL GVW’S

 

 

RATES FOR FIVE AXLE – DRAYTON & HILLSBORO

 

American Crystal Sugar Company
As a Supplemental Rate Per Ton for Delivery To:

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems.

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

19

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WINTER RATES

SUPPLEMENT #1

 

RATES FOR FIVE AXLE – DRAYTON & HILLSBORO

 

American Crystal Sugar Company

As a Supplemental Rate Per Ton for Delivery To:

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

20

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WINTER GVW’S

 

 

RATES FOR FIVE AXLE – DRAYTON & HILLSBORO

 

American Crystal Sugar Company
As a Supplemental Rate Per Ton for Delivery To:

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems.

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

21

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EXHIBIT B

 

DEEP FREEZE STORAGE CAPACITIES - NET TONS

 

Factory and Out-station

 

Sheds

 

Open Storage

 

Total

 

Moorhead Yard

 

100,000

 

160,000

 

260,000

 

Felton

 

 

 

220,000

 

220,000

 

Amenia

 

 

 

75,000

 

75,000

 

Hillsboro Yard

 

125,000

 

130,000

 

255,000

 

Reynolds

 

 

 

330,000

 

330,000

 

Crookston Yard

 

100,000

 

285,000

 

385,000

 

Warren

 

 

 

100,000

 

100,000

 

EGF Yard

 

175,000

 

261,000

 

436,000

 

Ardoch

 

 

 

167,000

 

167,000

 

Alvarado

 

 

 

142,000

 

142,000

 

Drayton Yard

 

175,000

 

140,000

 

315,000

 

McArthur

 

 

 

91,000

 

91,000

 

Grafton

 

 

 

91,000

 

91,000

 

RRV Total

 

675,000

 

2,192,000

 

2,867,000

 

 

22

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EXHIBIT C

 

EQUIPMENT PROPOSED

 

Transportation Equipment

 

 

 

 

 

 

 

A.

 

Tractors

 

96

 

2004 Freightliner “Columbia” model.  Equipped with Mercedes Benz 12 liter 350 hp
engines.

 

 

 

 

 

 

 

B

 

Trailers

 

96

 

Semi trailers. Combination of current and new East all-aluminum-flat decks.  The
cages are Transystems’ proprietary design.

 

 

 

 

 

 

 

C.

 

Full (pup) Trailers

 

30

 

New East all-aluminum-flat decks.  The cages are Transystems’ proprietary
design.

 

 

 

 

 

 

 

Loading, Tear Down and Supplemental Unloading Equipment

 

 

 

 

 

 

 

A.

 

Wheel Loaders

 

17

 

Combination of current and new Komatsu WA-450 and WA-500 wheel loaders with beet
buckets.  (17 units total)

 

 

 

 

 

 

 

B.

 

Backhoes

 

 

 

Combination of Komatsu PC300LC (primary tool) and PC220LC as standby tools. 
Each factory shall have a primary tool and a standby tool.

 

 

 

 

 

 

 

C.

 

Contractor’s Unloading Equipment

 

 

 

Three 85’ Transystems proprietary design tippers.  Three 260 cubic yard and two
400 cubic yard surge hoppers.  These will provide supplemental unloading
capacity and will feed existing ACSC wet hoppers.  ACSC would provide access to
its two existing portable skips.

 

 

 

 

 

 

 

 

 

 

 

 

 

Transystems’ proposal includes additional unloading equipment at each factory.

 

 

 

 

 

 

 

 

 

 

 

 

 

The Hillsboro, Drayton, and East Grand Forks factories each would receive an
additional portable tipper and unloading conveyors.  The Hillsboro and Drayton
tippers would be designed to accommodate semi-pup side dump units.

 

 

 

 

 

 

 

 

 

 

 

 

 

The existing ACSC portable skips would be used at Crookston and Moorhead.

 

 

 

 

 

 

 

 

 

 

 

 

 

All locations would receive additional hoppers that would allow the temporary
storage of 250 to 500 tons of beets.

 

 

 

 

 

 

 

Loader Fuel Trailers

 

 

 

 

 

 

 

A.

 

Loader Fuel Trailers

 

15

 

(250 gallons US) with portable toilets

 

23

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FALL RATES

EXHIBIT D

 

FIVE & SEVEN AXLE DRAYTON RATES

 

American Crystal Sugar Company

As a Rate Per Ton for Delivery To (fill in white area only):

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

24

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WINTER RATES

 

 

FIVE & SEVEN AXLE DRAYTON RATES

 

American Crystal Sugar Company
As a Rate Per Ton for Delivery To (fill in white area only):

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

25

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WINTER GVW’S

 

 

FIVE & SEVEN AXLE DRAYTON RATES

 

American Crystal Sugar Company

As a Rate Per Ton for Delivery To (fill in white area only):

 

Station

 

Moorhead

 

Hillsboro

 

Crookston

 

E.G.F.

 

Drayton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:  The first figure in the cells indicates the number of axles and the
second series of numbers is the maximum GVW for that number of axles.  This
information is for the exclusive use of ACS and Transystems

 

[Portions of this section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.  A copy of this Agreement with this section intact has been filed
separately with the Securities and Exchange Commission.]

 

26

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