**EXHIBIT10.30**

 

**FIVE YEAR AGREEMENTBETWEEN**

 

**(Shareholder)andAMERICAN CRYSTAL SUGAR COMPANY(Company)**

 

1.                     PLANTINGAND DELIVERY OBLIGATIONS. Shareholder agrees during the Initial Term and any Renewal Term hereofto prepare land, plant, cultivate, harvest and deliver, the number of acres ofsugarbeets equal to the number of Preferred Shares of Company then owned byShareholder, subject to the provisions of Sections 2 and 3 of thisAgreement.  Company shall not be obligatedto purchase sugarbeets, and Shareholder agrees to destroy prior to August 15,sugarbeets from all acres planted in excess of that authorized by Company.  Land to be used for sugarbeet production,cultural and harvest practice requirements, and other matters shall bespecified by annual contract to be entered into between Company and Shareholderas a supplement to this Agreement (the “Annual Contract”).  Company hereby reserves the right todisapprove of any field proposed to be used by a shareholder to grow sugarbeetsif in the judgment of Company the field is not appropriate for sugarbeets dueto disease, soil type, drainage conditions, or other factors.  Shareholder agrees to abide by any croprotation policies that may be established by Company.  Shareholder agrees to comply with policies regarding destructionof damaged or diseased sugarbeets as established from time to time by Company.

 

2.                     TOLERANCES.  The total number of acres of sugarbeets tobe planted by Shareholder shall be subject to overplant and underplanttolerances as established from time to time by Company pursuant to thisAgreement.  Shareholder herebyacknowledges and agrees that said tolerances may be established and/or modifiedfrom time to time by Company as determined to be appropriate to respond toplanting, crop conditions, and/or government imposed marketingallocations.  The initial tolerance andany modification thereof shall be effective upon communication of the same toShareholder by Company, and the Annual Contract shall be deemed amended to theextent of the modified tolerance.

 

3.                     PRORATION.  Company hereby reserves the right toprorating delivery rights with regard to any crop to be deliveredhereunder.  Any such proration shall beestablished by Company after a determination by the Board of Directors that Companymay not be able to economically process the entire crop for any reason,including, but not limited to government imposed marketing allocations and fora larger than anticipated crop yield.  Aproration shall be communicated to, and applied against, all shareholders ofCompany on a uniform and equitable basis as determined by the Board ofDirectors.  The Annual Contract shall bedeemed modified to the extent of any such proration.

 

4.                     TERM.  The initial term of this Agreement shall befor the 2003, 2004, 2005, 2006 and 2007 crop years (the “Initial Term”).  This Agreement shall automatically renew forsuccessive five (5) crop year terms (“Renewal Terms”) unless one party provideswritten notice to the other party on or before August 31 of the final crop yearof the then current Initial or Renewal Term, of such parties intent toterminate this Agreement.  Theprovisions of this Agreement that are applicable to the final crop year of thethen current Initial or Renewal Term shall remain in effect following notice oftermination until performance has been completed with respect to such finalcrop year.

 

5.                     PAYMENTFOR SUGARBEETS.  Payment forsugarbeets delivered each crop year shall be made as set forth in this Section5 (using the definitions set forth in Section 18).

 

(a)                                  TheGross Beet Payment for sugarbeets delivered shall be the “per hundredweightvalue of recovered sugar” multiplied by the number of hundredweight of“recovered sugar” contained in the sugarbeets delivered by Shareholder.  Shareholder’s share of “agri-productsrevenue” will be added while Shareholder’s share of “operating costs” will besubtracted, both allocated on a per net ton of sugarbeets delivered basis.  Company reserves the right to establish foreach crop year, a marketing allocation adjustment program to provide forequitable treatment among shareholders from year to year as a result oflimitations on production due to government imposed marketing allocations.  The costs and/or adjustments associated withthis program will be used to determine the Gross Beet Payment in a mannerconsistent with the program, as approved by the Board of Directors.

 

(b)                                 Thefollowing allowances, costs and deductions, if applicable, will be used inadjusting Shareholder’s Gross Beet Payment to Shareholder’s Net Beet Payment:

 

(i)                                     FreightAnd Hauling Allowance Program: Company reserves the right to establish for each crop year covered bythis Agreement, a freight and hauling allowance program and in connectiontherewith to allocate the cost of the freight and hauling allowance programamong shareholders of Company in a manner consistent with the program asapproved from time to time by the Board of Directors.

 

(ii)                                  EarlyDelivery Allowance Program:  Companyreserves the right to establish for each crop year, an early delivery allowanceprogram in partial compensation to shareholders for the delivery of sugarbeetsprior to the commencement of the piling campaign.  The cost of this program will be shared equally each crop year ona per net ton of sugarbeets delivered basis by all shareholders who havedelivered sugarbeets to Company.

 

(iii)                               MinimumPayment Allowance Program:  Companyreserves the right to establish for each crop year, a minimum payment allowanceprogram.  The cost of this program willbe shared equally each crop year on a per net ton of sugarbeets delivered basisby all shareholders who have delivered sugarbeets to Company.

 

(iv)                              TareIncentive Program:  Company reservesthe right to establish for each crop year, a tare incentive program to encouragegrowers to reduce tare.  The cost ofthis program will be allocated among shareholders of Company in a mannerconsistent with the program, as approved by the Board of Directors.

 

(v)                                 UnitRetain:  A unit retain  may be declared by the Board of Directorsand the amount of such unit retain shall be deducted from the final payment tobe made for sugarbeets, and Company may deduct the estimated unit retain fromthe periodic payments to be made pursuant to Section 6 of this Agreement.  The Board of Directors may estimate anamount of unit retain to be declared prior to its declaration.  Company reserves the right to determine thetax treatment of any unit retain at a date subsequent to the date that theamount of the unit retain is declared by the Board of Directors.  Shareholder consents to the provisions ofCompany’s Bylaws with respect to the tax treatment to Shareholder of unitretains.

 

(c)                                  Companyreserves the right to establish for each crop year, a program to discouragelate harvest by shareholders.  Thecharges associated with this program will be allocated among shareholders in amanner consistent with the program, as approved by the Board of Directors andwill be reflected as an adjustment to one or more of the payments to be made toshareholder under this Agreement.

 

6.                     PAYMENTSCHEDULE.  Payment for sugarbeetsdelivered shall be made as follows:

 

(a)                                  Aninitial payment shall be made on or about November 15.  Such payment shall be sixty-five  percent (65%) of Company’s then currentestimate of Shareholder’s Net Beet Payment for that crop year.

 

(b)                                 Asecond payment will be made on or about March 31.  Such payment shall be an amount which will bring that paymentplus the November payment to ninety percent (90%) of Company’s then currentestimate of Shareholder’s Net Beet Payment for that  crop year.

 

(c)                                  Thefinal payment, which together with the prior payments shall equal one hundredpercent (100%) of the Net Beet Payment, shall be made no later than 15 daysafter the approval of the Company’s audited financial statements as of its lastfiscal year end.

 

Shareholder mayfrom time to time request that Company deduct certain amounts from the paymentsto be made hereunder to satisfy payment obligations to third parties.  Company reserves the right to approve theform of such requests.  To the extentCompany elects to honor such request(s), Shareholder shall defend and indemnifyCompany from all losses, costs, and damages (including attorneys’ fees andcosts) incurred by Company as a result of payments to a third party.

 

THE PROVISIONS OFPARAGRAPH NO. 7 TO PARAGRAPH NO. 18, BOTH INCLUSIVE, AS SHOWN ON THE REVERSEHEREOF, ARE PART OF THIS AGREEMENT.  THE UNDERSIGNED REPRESENTS THAT HE/SHE IS AN AUTHORIZED REPRESENTATIVESOF SHAREHOLDER AND THAT HE/SHE HAS THE AUTHORITY TO BIND SHAREHOLDER TO THETERMS OF THIS AGREEMENT.

 

Dated this           day of                        ,       .

 

 
| **AMERICAN CRYSTAL SUGAR COMPANY** |   | **SHAREHOLDER** |
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7.                     BREACHAND REMEDIES.  Shareholder agrees toabide by the Articles of Incorporation and the Bylaws of Company, to complywith all applicable federal, state and local laws, ordinances, regulations andrulings, as well as Company’s operational and agricultural regulations andpolicies (collectively referred to herein as “Applicable Law and Policy”).  Shareholder acknowledges and agrees thatShareholder is required, pursuant to this Agreement, the Annual Contract, andthe Bylaws of Company, to grow and deliver the sugarbeet crop to Company ineach year at the times specified by Company. Any one or more of the following shall constitute a breach of thisAgreement by Shareholder: (i) the failure of Shareholder to plant, grow anddeliver said crop to Company; (ii) the failure of Shareholder to comply withApplicable Law and Policy, (iii) the failure of Shareholder to comply with anyprovision of this Agreement, or (iv) the breach by Shareholder of any otheragreement with Company.  Upon a breachof this Agreement, the Shareholder may be subject to one or more of thefollowing remedies as determined by Company :

 

(a)                                  Expulsionas a member of Company;

 

(b)                                 Forfeitureof Shareholder’s Common Stock in Company and qualification to be a preferredshareholder of Company;

 

(c)                                  Terminationof this Agreement and the right to deliver sugarbeets to Company forprocessing;

 

(d)                                 Paymentof liquidated damages to Company, which liquidated damages are hereby declaredand stated to be an amount equal to Shareholder’s share of Company fixed costsfor processing of the crop; and

 

(e)                                  Anyother legal or equitable remedy that may be available to Company underapplicable law.

 

8.                     SOILTESTS.  Shareholder agrees toundertake and conduct soil testing on an annual basis on all land Shareholderutilizes for growing of sugarbeets pursuant to this Agreement.  Shareholder further agrees to report andmake available  the results of saidsoil  tests to the agriculturaldepartment of Company, together with information as to the amounts and kinds offertilizer applied to the soil tested.

 

9.                     AGRICULTUREPRACTICES.  Shareholder agrees toplant only those seed varieties that have been approved from time to time byCompany.  Shareholder agrees that itshall use no pesticide, chemical or other substances in a manner which couldresult in any residue in or on sugarbeets grown for Company under this Agreement, or in any sugar orby-products produced from such sugarbeets, beyond the limits permitted by lawor governmental regulations. Shareholder acknowledges and agrees that Company shall have the right toreject and refuse delivery of any sugarbeets to which have been applied, orwhich have been grown on ground to which has been applied, any unauthorized,non-registered, non-approved or prohibited pesticide, chemical or other substance.  Shareholder further acknowledges and agreesthat Company’s right to reject or refuse delivery of any  of said sugarbeets  may be invoked by Company at its sole option, regardless ofwhether or not use of, or application of, an unauthorized, non-registered,non-approved, or prohibited pesticide, chemical or other substance results in,or may result in, a residue in or on the sugarbeets grown, or sugar orby-products produced from such sugarbeets.

 

10.               INDEMNIFICATION.  Shareholder agrees to hold harmless andindemnify Company and all shareholders of Company from any and all losses,costs, or damages (including attorneys’ fees and costs) Company or itsshareholders may incur as a result of Shareholder (i) delivering sugarbeets toCompany grown from non-approved seed varieties, or to which have been applied,or which have been grown on ground upon or to which any unauthorized,non-registered, non-approved or prohibited pesticide, chemical or othersubstance has been applied; or (ii) breaching any provision of this Agreement.

 

11.               DELIVERYOF SUGARBEETS.  Delivery ofsugarbeets shall be made by Shareholder at such times, in such quantities, andto such receiving stations as may be designated by Company.

 

(a)                                  Titleand all risk of loss to said sugarbeets shall be and remain with Shareholderuntil such time as Shareholder completes delivery to Company at the designatedreceiving station, at which time title and risk of loss shall pass toCompany.  The sugarbeets shall be protectedfrom sun and frost after removal from ground, including sugarbeets that areloaded on truck.  Company has the optionof rejecting any diseased, frozen or damaged sugarbeets, sugarbeets having lessthan 12% sugar or less than 80% purity, sugarbeets which, in Company’s opinion,are not suitable for storage or for the manufacture of sugar, sugarbeets as towhich, in Company’s opinion, the terms and conditions of this Agreement havenot been properly complied with, or for any other bona fide reason.

 

(b)                                 Allsugarbeets delivered shall be properly defoliated and free from excess dirt,stones, trash and other foreign substances of any kind which might interferewith handling and processing at Company’s factories.  All sugarbeets shall be subject to a deduction for tare.  Tare determination, sugar percentage, andsugar loss to molasses shall be determined at quality laboratories operated byCompany.

 

12.               SHAREHOLDERINDEBTEDNESS TO COMPANY.  It isagreed that the amount charged for all sugarbeet seed purchased from Company byShareholder, and any and all other indebtedness to Company by Shareholder,whether due or not, shall constitute a debt which Company shall have the rightto collect as it would any other contractual obligation.  Any such amounts or indebtedness that is dueand payable or that hereafter may become due and payable to Company fromShareholder shall be, become and remain a first priority lien on the crop ofsugarbeets to be grown and may, if not previously paid by Shareholder, bededucted by Company from any payments from Company to Shareholder that shallbecome due under this Agreement or any subsequent beet contract between Companyand Shareholder.  Shareholder agrees torepay Company at the time of Shareholder’s initial beet payment for each cropyear all such amounts or indebtedness, together with interest at a rate toShareholder as may be set by Company, but not to exceed the highest rateallowed by law.  Shareholder herebygrants Company a security interest in any beet payments to be made to, or unitretains held in the name of Shareholder, for purposes of securing payment ofsuch indebtedness.  Notwithstanding anyother remedy which may be available, Company shall have the right, exercisableat its option, to offset any indebtedness to Company against the beet paymentsto be made to Shareholder hereunder and/or unit retains held in the name ofShareholder.

 

13.               NOLIABILITY.  In no event shallCompany be liable to Shareholder for partial or complete failure of crop or forany injury or damage to sugarbeets prior to the time of delivery to Company.

 

14.               FORCEMAJEURE.  Fire, strikes, accidents,acts of God and the public enemy, or other causes beyond the reasonable controlof the parties which prevent Shareholder from the performance of thisAgreement, or Company  from utilizing thesugarbeets contracted for in the manufacture of sugar, shall excuse therespective parties from the performance of this Agreement.

 

15.               PREVENTEDPLANTING.  Shareholder shall beunconditionally obligated to plant the sugarbeet crop unless such planting isprevented as a result of acts of God or other causes beyond the reasonablecontrol of Shareholder, as provided in Section 14 of this Agreement.  If, after making all reasonable efforts,Shareholder has been prevented from planting the sugarbeet crop on or beforeJune 1 of the applicable crop year, or such later date as may be establishedfrom time to time under federal crop insurance policies to enable a sugarbeetgrower to receive prevented planting coverage at an unreduced level, (the“Prevented Planting Date”), Shareholder shall be relieved of its obligation toplant such sugarbeet crop.  Shareholdermay elect to plant the sugarbeet crop at any time after the Prevented PlantingDate.  A determination as to whetherShareholder is prevented from planting shall be mutually determined byShareholder and a representative of Company based on Shareholder’s plantingconditions for the period leading up to and including the Prevented PlantingDate.

 

16.               BINDINGEFFECT.  Subject to the limitationsset forth in the Articles of Incorporation and Bylaws of Company, thisAgreement shall be binding upon Shareholder, its heirs, legal representatives,successors and permitted assigns; and upon Company, its successors andassigns.  This Agreement shall not betransferable by Shareholder without written consent of Company.  No agent of Company has any authority tochange, waive, or modify any of the terms or provisions of this Agreement.

 

17.               AMENDMENT.  Company reserves the right to amend anyprovisions of this Agreement as follows:

 

(a)                                  ThisAgreement may be amended by a resolution approved by the Board of Directors tothe extent that such amendment does not have material adverse effect on theshareholders of Company, taken as a whole. Such amendment shall be effective upon written notice to Shareholder.

 

(b)                                 ThisAgreement may be amended by a resolution approved at any regular or specialmeeting of shareholders of Company at which a quorum is registered as beingpresent or represented by mail vote, by a majority of shareholders so presentor represented by mail vote, where the notice of such meeting contains astatement of the proposed amendment.

 

18.               DEFINITIONS.  The following definitions shall apply withrespect to terms used herein:

 

(a)                                  The“per hundredweight value of recovered sugar” shall be the “net selling priceper hundredweight of sugar”, as hereinafter defined, recovered from that year’scrop, adjusted for the difference between the opening inventory book value andits actual net selling price, and adjusted by valuing the closing inventory atits estimated net realizable value.

 

(b)                                 “Recoveredsugar” contained in the sugarbeets delivered by Shareholder shall be determinedby Company deducting  from gross sugar(i) sugar loss to molasses on a fresh beet basis using the British SugarCorporation’s Impurity Index Formula as modified by Company, and (ii)Shareholder’s share of other sugar losses incurred in the storage andprocessing of the sugarbeets, allocated on a per net ton of sugarbeetsdelivered basis, and increased by (iii) Shareholder’s share of additional sugarrecovered through the molasses desugarization process on a per net ton ofsugarbeets delivered basis.

 

(c)                                  The“net selling price per hundredweight of sugar” sold shall be determined bydeducting from the gross sales price all such charges and expenditures as areregularly and customarily deducted from such gross sales price of sugar inaccordance with Company’s system of accounting used to determine the “netselling price of sugar” sold.

 

(d)                                 “Agri-productsrevenue” shall be determined by using the net selling price of pulp, molasses,and any other by-product produced by Company, of that crop year as determinedin accordance with Company’s system of accounting.

 

(e)                                  Operatingcosts shall be determined in accordance with Company’s system of accounting,and shall include all costs and expenses not otherwise accounted for withrespect to business done with members, and shall be net of results from beetseed and other miscellaneous member business.

 

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