Exhibit 10.18


 


AMENDED AND RESTATED


 


UNIFORM MEMBER
MARKETING AGREEMENT


 


POOL BASIS


 


THIS AGREEMENT, made effective as of the 1st day of September 2009,
by and between MIDWEST AGRI-COMMODITIES
COMPANY, a cooperative association organized under the laws of the
State of North Dakota (hereinafter referred to as “MIDWEST”) and AMERICAN
CRYSTAL SUGAR COMPANY, a cooperative association organized under the
laws of the State of Minnesota (hereinafter referred to as “PROCESSOR”).


 


W I T N E S S E T H:


 


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 sugar beet processing plants for the purposes of producing sugar,
beet pulp, beet molasses, and related products from sugar beets; and


 


WHEREAS, MIDWEST 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
processor-members for the purposes of acting as a marketing agency for its
members and of engaging in the business of marketing the dried beet pulp, beet molasses,
and related products produced by its members; and


 


WHEREAS, PROCESSOR wishes to participate with
other members (collectively the “Members”) and pooled contract patrons (“Patrons”)
of MIDWEST in developing and maintaining a dependable market for certain
products produced by PROCESSOR; and


 


WHEREAS, MIDWEST and PROCESSOR desire to enter
into a membership marketing agreement on a pool basis.


 


NOW, THEREFORE, in consideration of the above, subject to the
respective terms, conditions, and obligations of the PROCESSOR and MIDWEST
herein, MIDWEST and PROCESSOR agree as follows:


 


1.             Appointment of MIDWEST as Sales Agent.  PROCESSOR appoints and designates MIDWEST to act as
its sole worldwide agent in the sale and marketing of the following products
(hereinafter collectively the “Co-Products”) produced by PROCESSOR during the
term of this Agreement:


 


(a)           Dried beet pulp;


(b)           Beet molasses (excluding any beet molasses
used by PROCESSOR for further sugar processing or in the production of yeast);


(c)           Raffinate (de-sugared beet molasses);


 

















 


(d)           Betaine; and


(e)           Any other product for which the Members
of MIDWEST have, by unanimous vote, created a separate pool.


 


MIDWEST accepts such
appointment and agrees to act as the sales agent and pool administrator in
accordance with the terms of this Agreement. 
PROCESSOR agrees that MIDWEST may employ all such persons and agencies
as it determines to be necessary to carry out its obligations under this
Agreement.  MIDWEST agrees, and is hereby
empowered by PROCESSOR, to sell in its own name, and pass title on behalf of
PROCESSOR to, all Co-Products produced by PROCESSOR during the term of this
Agreement to such third party purchasers (hereinafter “Purchaser” or “Purchasers”),
in such markets, at such time or times, at such place or places, in such manner
and on such prices or terms as MIDWEST determines to be in the best interests
of PROCESSOR and the Members and Patrons of Midwest.  It is understood and agreed that this
Agreement applies to all Co-Products produced by PROCESSOR in any state or
location.


 


2.             Billing and Collection. 
All sales made by MIDWEST shall be billed on invoices of MIDWEST and all
receipts shall be collected by MIDWEST.


 


3.             Product Pools. 
MIDWEST and PROCESSOR agree that the Co-Products to be sold by MIDWEST
hereunder shall be pooled for each crop year with products of the Members of
MIDWEST.  Separate pools shall be
maintained for each of the Co-Products. Additional pools may be established by
unanimous agreement of the Members of MIDWEST to market new or related products
developed by the Members and Patrons.  As
sales are made, the proceeds received by MIDWEST from the sale of the
Co-Products received from PROCESSOR shall be deposited into the appropriate
pool, and shall be credited to PROCESSOR and the Members on the basis of their
respective pro rata shares, as defined below in this Section 3 (the “Pro-Rata
Shares”), of the net proceeds of each sale. 
PROCESSOR’s share of net proceeds as defined in Section 5 hereof
and after adjustments for advances paid under Section 6 hereof shall be
distributed to PROCESSOR by MIDWEST as rapidly as collection and accounting
procedures permit.


 


With respect to each pool
year covered by this Agreement, distributions of the net proceeds shall
initially be based on MIDWEST’S best estimate of the amount of Co-Product
anticipated to be produced by each participant in the pool, and shall be
adjusted by MIDWEST periodically as production figures are more precisely
determined.  Accordingly, the Pro-Rata
Share of PROCESSOR for each product pool shall be initially equal to a fraction
with PROCESSOR’s estimated annual production of that product to be pooled as
the numerator and total estimated annual pool production of that product for
PROCESSOR and the other MIDWEST Members and Patrons as the denominator.  As soon as practicable after the close of
MIDWEST’s fiscal year, and exact production is determined, precise Pro-Rata
Shares shall be established and any appropriate adjustments shall be made among
the pool participants.


 


4.             MIDWEST’s Books and
Records.  MIDWEST shall keep accurate records of sales
and distribution of pool proceeds in accordance with sound and generally
accepted accounting practices.  Said
records shall be at all reasonable times fully available for inspection by
PROCESSOR.  All records of the pools shall
be audited annually by MIDWEST’s regular Independent Certified Public Auditors
and the Audit report made available to PROCESSOR.


 


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5.             Definition of Net
Proceeds.  The net proceeds for each product pool shall
be defined as the gross sales from such pool by MIDWEST, less:


 


(a)           All costs, charges or expenses directly
attributable to the sale of the Co-Product;


 


(b)           All costs of transportation and handling
of the Co-Product, including storage costs incurred by MIDWEST;


 


(c)           Insurance premiums paid by MIDWEST;


 


(d)           State feed inspection and all other fees
and taxes incurred in the marketing of the Co-Product;


 


(e)           All other direct and indirect charges or
expenses, including administrative and overhead, attributable to the sale of
the Co-Product in the operation of the product pools; and


 


(f)            All losses incurred by MIDWEST 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 proceeds of that product pool.


 


6.             Budget and Advance of
Marketing Costs.  MIDWEST shall
prepare a monthly budget or estimate of all direct and indirect marketing costs
for each product pool.  Each Member or
Patron involved in the pool shall pay in advance its estimated Pro-Rata share
of such marketing costs for the month. 
In the alternative, the PROCESSOR authorizes MIDWEST to borrow funds
pursuant to its bank line of credit to pay direct and indirect marketing costs,
provided that the Members and Patrons shall reimburse MIDWEST for the marketing
expenses incurred during the previous month no later than the 8th business day of
the following month.


 


7.             Product Warranties and
Quality Standards; Handling of Product of Substandard Quality. 
MIDWEST shall furnish to PROCESSOR from time to time with Purchaser
specifications for Co-Products prescribing standards and procedures for quality
control, storing and shipping of such product. 
Initially such standards shall be those set forth on Schedule “A”
attached hereto.  PROCESSOR shall observe
and comply with any such specifications furnished by MIDWEST.  In addition, all Co-Products delivered to or
at the order of MIDWEST shall conform to quality and other standards that are
prescribed by applicable state and federal rules and regulations.


 


Co-Product of substandard
quality, as determined by MIDWEST, shall, on the joint agreement of PROCESSOR
and MIDWEST, or if no agreement has been reached, at the option of
Midwest:  (a) be withheld from the
pool and marketed by Midwest with input from PROCESSOR on an individual agency
basis with proceeds from the sale of such Co-Product, less all direct and indirect
selling expenses, distributed to PROCESSOR, or (b) remain in the pool and
be charged with the additional costs relating to the substandard quality of the
Co-Product.


 


8.             Storage of Product.  PROCESSOR
shall store its Co-Products in tanks, bins, and warehouses that are approved in
advance by MIDWEST.  At the earliest
reasonable time after processing commences each year and as soon as Co-Products
are placed in storage,


 


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PROCESSOR shall deliver regular inventory reports to MIDWEST.  All production included in the regular
inventory report shall be included in the pool for the appropriate crop year
even though the Co-Products remain on the property of the PROCESSOR.  All on-site storage expenses and on-site
labor, materials, and other expenses incurred at the PROCESSOR facilities for
the preparation, loading and shipment of Co-Products produced by PROCESSOR
shall be paid directly by PROCESSOR and shall not be a pool expense.


 


9.             Risk
of Loss; Insurance.


 


(a)           Risk
of Loss.  PROCESSOR covenants and agrees that it shall
bear the risk of loss of the Co-Products until the Co-Products are transferred
from the various PROCESSOR facilities to a common carrier for delivery to
MIDWEST or to the Purchaser.  Regardless
of which party bears the risk of loss, PROCESSOR shall continue to be the owner
of its Co-Products and shall retain title to the Co-Products until the
Co-Products are sold to the Purchaser. 
Whenever MIDWEST shall have possession or control over such Co-Products
prior to sale to the Purchaser, MIDWEST shall act strictly as custodian thereof
in accordance with the provisions of this Agreement.


 


(b)           Insurance
by PROCESSOR.  Until such time as the Co-Products are
turned over to a common carrier for delivery to MIDWEST or to the Purchaser,
PROCESSOR covenants and agrees, at its sole cost and at all times during the
term of this Agreement, to maintain in force an insurance policy or policies
covering loss, theft or damage to the Co-Products from any cause whatsoever, in
amounts not less than the full insurable value thereof, and product liability
insurance in amounts required by MIDWEST from time to time, which product
liability insurance shall name MIDWEST as an additional or named insured.  Said policies shall be taken out with
responsible insurance companies, and shall not be canceled or altered without
ten days’ written notice to MIDWEST. 
PROCESSOR shall furnish MIDWEST with certificates of insurance, together
with a summary of the terms and conditions of the policy or policies, and the
date on which they expire.


 


(c)           Insurance
by MIDWEST.  From the time of the delivery of the
Co-Products to a common carrier at the various PROCESSOR facilities, MIDWEST
shall, to the extent not already covered by existing PROCESSOR insurance
policies, maintain in force an insurance policy or policies covering product
liability and loss, theft or damage to the Co-Products in amounts not less than
the full insurable value of the Co-Products. 
Premiums paid for any such insurance shall be a pool expense under Section 5
of the Agreement.


 


10.          Logistics Function. 
MIDWEST shall be responsible for performing all normal logistics
functions relating to the shipment of Co-Products from PROCESSOR’s plants.  MIDWEST shall use its business judgment in
determining the factory, warehouse, Member, or Patron from which to draw
product, considering such factors as, but not limited to, car loadings, points
of destination, capacity of tanks or warehouses, and size of inventories stored
therein.  Direct or indirect costs of
MIDWEST associated with the performance of the logistics function shall be
allocated to PROCESSOR in accordance with Section 5 of this Agreement.


 


11.          Information from
PROCESSOR.  PROCESSOR shall, whenever requested by
MIDWEST, furnish MIDWEST product production and related statistical data
related to the Co-Products, and shall make its books and records related to the
Co-Products and statistics available


 


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at all reasonable times for inspection by MIDWEST.  PROCESSOR further agrees, upon request of
MIDWEST, to furnish MIDWEST with samples of the Co-Products for grading or
selling purposes.  MIDWEST shall furnish
monthly performance reports of sales and operating costs against budget no
later than 15 working days from the end of the month.


 


12.          Sales Promotion. 
MIDWEST agrees to do any and all things reasonably necessary and proper
to stimulate demand for the Co-Products in efforts to improve the markets and
proceeds related thereto.


 


13.          Term
of Agreement; Termination.


 


(a)           Term. 
The term of this Agreement shall be for 2 (two) consecutive crop years
commencing on September 1, 2009 and continuing through August 31,
2011 (the “Initial Term”) and from year to year thereafter until terminated as
provided herein.


 


(b)           Termination.  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, 2010;


 


(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 (e.g., notice
given on April 30, 2011 is effective August 31, 2012).


 


(c)           Breach by PROCESSOR.  PROCESSOR agrees that MIDWEST shall have all rights
and remedies provided by law and in the Bylaws of MIDWEST in the event of a
breach or threatened breach by PROCESSOR of this Agreement.


 


(d)           Continuing Obligations. 
Following the termination of this Agreement for any reason, MIDWEST
shall remain obligated to distribute the net proceeds of each pool to PROCESSOR
as provided herein.


 


14.          Patronage
Relationship.  MIDWEST and PROCESSOR agree that the
business to be transacted under this Agreement will be done on a cooperative
basis.  PROCESSOR agrees to treat the
full amount of any patronage distribution, in excess of the net proceeds to be
returned to PROCESSOR as provided herein, which is made in a written notice of
allocation (as defined in 26 U.S.C. §1388) which it receives, as income
received in the year in which such written notice of allocation is received at
its stated dollar amount in the manner provided in 26 U.S.C. §1385(a).


 


15.          Compliance with MIDWEST’s
Governing Instruments.  PROCESSOR
accepts and agrees to conform to and abide by the provisions of the Articles of
Association and Bylaws of MIDWEST and all amendments thereto during the term of
this Agreement.


 


16.          Representations
by PROCESSOR.  PROCESSOR hereby represents and warrants to
MIDWEST that:


 


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(a)           Cooperative Status.  PROCESSOR is a grower-owned
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);


 


(b)           Marketable Title. 
PROCESSOR has good and marketable title to the Co-Products, and all
Co-Products which are delivered to MIDWEST or to Purchasers are free and clear
of any liens, attachments, security interests, claims or encumbrances of any
kind whatsoever;


 


(c)           No Prior Obligation.  Except
as previously disclosed to MIDWEST, PROCESSOR is not under contract or
obligation to sell, market, consign or deliver any of the Co-Products to any
other person, firm, association, corporation or other entity; and


 


(d)           Biotech Product. 
PROCESSOR warrants and represents that it will not knowingly deliver,
without the prior written consent of MIDWEST, any Co-Product to MIDWEST that is
produced in whole or in part from biotech seed or other genetically modified
organisms used by PROCESSOR, PROCESSOR’s growers, or which is in any manner
acquired by PROCESSOR from another party (“Biotech Product”).  PROCESSOR shall indemnify, defend and hold
MIDWEST and each of its Members and their respective directors, officers,
employees, representatives and agents (each an “Indemnitee”) harmless from and
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys’ fees and
expenses, product recall and/or re-routing expenses and other incidental,
consequential, special and punitive damages) (collectively, the “Liabilities”)
imposed upon, incurred by or asserted against the Indemnitee that result
directly from the supply by PROCESSOR of any Biotech Product to MIDWEST
pursuant to this Agreement.


 


17.          Indemnification by
PROCESSOR.  PROCESSOR hereby agrees to indemnify and hold
harmless, MIDWEST, its members, and their respective employees, from and
against any claims, losses or liabilities, including attorneys fees incurred,
arising out of, or resulting from, the production, on-site storage or loading
of any product which is marketed by MIDWEST pursuant to this Agreement.  In addition, PROCESSOR shall defend and hold
harmless MIDWEST from any costs, claims, liabilities, suits or other
proceedings or actions of any kind whatsoever, including attorney fees
incurred, arising from or connected with a breach of any of the representations
contained in Section 16 of this Agreement.


 


18.          Representations
by MIDWEST.  MIDWEST hereby represents and warrants to
PROCESSOR that:


 


(a)           Cooperative Status. 
MIDWEST is a grower-owned 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).


 


(b)           Member Agreements.  All other Members either have or
will be required to enter into identical pool marketing agreements for the
marketing of the Co-Products.


 


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19.          Complete Agreement. 
The parties agree that there are no oral or other conditions, promises,
representations or inducements at variance with any of the terms hereof and
that this contract represents the voluntary and clear understanding of both
parties fully and completely.


 


20.          Assignment. 
Neither PROCESSOR nor MIDWEST may assign this Agreement without the
prior written consent of the other party.


 


21.          Waiver of Breach. 
No waiver 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.


 


22.          Notices. 
Whenever notice is required by the terms hereof, it shall be given in
writing by delivery or by certified or registered mail to the other party at
the address found at the end of this Agreement or such other address as a party
shall designate by appropriate notice. 
If notice is given by mail, it shall be effective two (2) days
after mailing.


 


23.          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 to be construed as a part of this Agreement or as
defining, limiting or amplifying the provisions hereof.  This Agreement contains the entire agreement
between the parties and shall not be modified in any manner except by an
instrument in writing executed by the parties hereto.  In the event any terms, 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.


 


24.          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 permitted assigns.


 


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IN
WITNESS WHEREOF,
MIDWEST and PROCESSOR have executed this Agreement effective the day and year
first above written.


 


	
   

  	
  FOR
  MIDWEST:

  	
   

  
	
   

  	
  MIDWEST
  AGRI-COMMODITIES COMPANY

  	
   

  
	
   

  	
  999
  Fifth Avenue, Suite 500

  	
   

  
	
   

  	
  San Rafael, CA 94901

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  J. R. Eichenberger

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOR
  PROCESSOR:

  	
   

  
	
   

  	
  AMERICAN
  CRYSTAL SUGAR COMPANY

  	
   

  
	
   

  	
  101
  North Third Street

  	
   

  
	
   

  	
  Moorhead,
  MN 56560

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  David Berg

  	
   

  
	
   

  	
   

  	
  Its

  	
  President/CEO

  	
   

  



 


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Schedule A


 


The
Co-Products supplied under this Agreement shall be of sound and merchantable
quality and shall conform to the following specifications:


 


Dried
beet pulp


Beet
pulp pellets


5/16”
diameter pellets


Moisture
- maximum 11 %


Sucrose
- maximum 10.5% dry basis


Ash-
maximum 8%dry basis


Fines
- maximum 3%


Length
3/4”- 1 1/4” target


Additives
- Molasses or de-sugared beet molasses may be added, subject to Midwest
approval


Shipping
Weight - as agreed from time to time and subject to car size


 


Beet
Pulp Shreds- Plain


Shreds
- plain packed in 40 Lb. paper bags


Moisture
- not more than 11.0%


Sucrose-
maximum 10.5% dry basis


Ash-
maximum 8% dry basis


Product
- composed only of pulp from sugar beets


 


Beet
Pulp Shreds- with molasses


Shreds - with beet molasses added packed in 40
Lb. paper bags


Moisture
- not more than 11.0%


Product
- composed only of pulp from sugar beets with added beet molasses


 


Beet
Molasses


Beet
molasses as produced in the normal operations of the factory


Double
Dilution Brix - minimum 79.5 degree


Total
sugars expressed as invert - minimum 48%


 


Raffinate
(de-sugared beet molasses)


Dry
matter – minimum 60%


Crude
Protein - minimum 9%


 


Betaine


Dry matter - not less
than 60%


Betaine content - not
less than 32% by weight