**Exhibit 10.18**

 

**AMENDED AND RESTATED**

 

**UNIFORM MEMBERMARKETING AGREEMENT**

 

**POOL BASIS**

 

**THIS AGREEMENT**, made effective as of the 1st day of September 2009,by and between **MIDWEST AGRI-COMMODITIESCOMPANY**, a cooperative association organized under the laws of theState of North Dakota (hereinafter referred to as “**MIDWEST**”) and **AMERICANCRYSTAL SUGAR COMPANY**, a cooperative association organized under thelaws 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 andproducer-operated agricultural cooperative which is organized and operated soas to adhere to the provisions of Section 15(a) of the AgriculturalMarketing Act (12 U.S.C., Sec. 1141j(a)), as amended, and the Capper-VolsteadAct of 1922 (7 U.S.C., Sec. 291, 292), and which is engaged in the operation ofone 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 asto adhere to the provisions of Section 15(a) of the AgriculturalMarketing Act (12 U.S.C., Sec. 1141j(a)), as amended, and the Capper-VolsteadAct of 1922 (7 U.S.C., Sec. 291,292), for the mutual help and benefit of itsprocessor-members for the purposes of acting as a marketing agency for itsmembers 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 withother members (collectively the “Members”) and pooled contract patrons (“Patrons”)of MIDWEST in developing and maintaining a dependable market for certainproducts produced by PROCESSOR; and

 

**WHEREAS**, MIDWEST and PROCESSOR desire to enterinto a membership marketing agreement on a pool basis.

 

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

 

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

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## **(a)          **Dried beet pulp;

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

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

 

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## **(d)          **Betaine; and

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

 

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

 

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

 

**3.            ****Product Pools**. MIDWEST and PROCESSOR agree that the Co-Products to be sold by MIDWESThereunder shall be pooled for each crop year with products of the Members ofMIDWEST.  Separate pools shall bemaintained for each of the Co-Products. Additional pools may be established byunanimous agreement of the Members of MIDWEST to market new or related productsdeveloped by the Members and Patrons.  Assales are made, the proceeds received by MIDWEST from the sale of theCo-Products received from PROCESSOR shall be deposited into the appropriatepool, and shall be credited to PROCESSOR and the Members on the basis of theirrespective pro rata shares, as defined below in this Section 3 (the “Pro-RataShares”), of the net proceeds of each sale. PROCESSOR’s share of net proceeds as defined in Section 5 hereofand after adjustments for advances paid under Section 6 hereof shall bedistributed to PROCESSOR by MIDWEST as rapidly as collection and accountingprocedures permit.

 

With respect to each poolyear covered by this Agreement, distributions of the net proceeds shallinitially be based on MIDWEST’S best estimate of the amount of Co-Productanticipated to be produced by each participant in the pool, and shall beadjusted by MIDWEST periodically as production figures are more preciselydetermined.  Accordingly, the Pro-RataShare of PROCESSOR for each product pool shall be initially equal to a fractionwith PROCESSOR’s estimated annual production of that product to be pooled asthe numerator and total estimated annual pool production of that product forPROCESSOR and the other MIDWEST Members and Patrons as the denominator.  As soon as practicable after the close ofMIDWEST’s fiscal year, and exact production is determined, precise Pro-RataShares shall be established and any appropriate adjustments shall be made amongthe pool participants.

 

**4.            ****MIDWEST’s Books andRecords****.**  MIDWEST shall keep accurate records of salesand distribution of pool proceeds in accordance with sound and generallyaccepted accounting practices.  Saidrecords shall be at all reasonable times fully available for inspection byPROCESSOR.  All records of the pools shallbe audited annually by MIDWEST’s regular Independent Certified Public Auditorsand the Audit report made available to PROCESSOR.

 

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# **5.            ****Definition of NetProceeds****.**  The net proceeds for each product pool shallbe defined as the gross sales from such pool by MIDWEST, less:

 

## **(a)          **All costs, charges or expenses directlyattributable to the sale of the Co-Product;

 

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

 

## **(c)          **Insurance premiums paid by MIDWEST;

 

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

 

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

 

**(f)           **All losses incurred by MIDWEST as aresult of uncollectible accounts receivable shall be allocated to theappropriate product pool and shall be regarded as a marketing expense indetermining the net proceeds of that product pool.

 

# **6.            ****Budget and Advance ofMarketing Costs****.**  MIDWEST shallprepare a monthly budget or estimate of all direct and indirect marketing costsfor each product pool.  Each Member orPatron involved in the pool shall pay in advance its estimated Pro-Rata shareof such marketing costs for the month. In the alternative, the PROCESSOR authorizes MIDWEST to borrow fundspursuant to its bank line of credit to pay direct and indirect marketing costs,provided that the Members and Patrons shall reimburse MIDWEST for the marketingexpenses incurred during the previous month no later than the 8th business day ofthe following month.

 

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

 

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

 

# **8.            ****Storage of Product****.**  PROCESSORshall store its Co-Products in tanks, bins, and warehouses that are approved inadvance by MIDWEST.  At the earliestreasonable time after processing commences each year and as soon as Co-Productsare placed in storage,

 

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

 

# **9.             Riskof Loss; Insurance**.

 

**(a)           Riskof Loss**.  PROCESSOR covenants and agrees that it shallbear the risk of loss of the Co-Products until the Co-Products are transferredfrom the various PROCESSOR facilities to a common carrier for delivery toMIDWEST or to the Purchaser.  Regardlessof which party bears the risk of loss, PROCESSOR shall continue to be the ownerof its Co-Products and shall retain title to the Co-Products until theCo-Products are sold to the Purchaser. Whenever MIDWEST shall have possession or control over such Co-Productsprior to sale to the Purchaser, MIDWEST shall act strictly as custodian thereofin accordance with the provisions of this Agreement.

 

**(b)           Insuranceby PROCESSOR. **Until such time as the Co-Products areturned 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 theterm of this Agreement, to maintain in force an insurance policy or policiescovering loss, theft or damage to the Co-Products from any cause whatsoever, inamounts not less than the full insurable value thereof, and product liabilityinsurance in amounts required by MIDWEST from time to time, which productliability insurance shall name MIDWEST as an additional or named insured.  Said policies shall be taken out withresponsible insurance companies, and shall not be canceled or altered withoutten days’ written notice to MIDWEST. PROCESSOR shall furnish MIDWEST with certificates of insurance, togetherwith a summary of the terms and conditions of the policy or policies, and thedate on which they expire.

 

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

 

# **10.         ****Logistics Function****.** MIDWEST shall be responsible for performing all normal logisticsfunctions relating to the shipment of Co-Products from PROCESSOR’s plants.  MIDWEST shall use its business judgment indetermining the factory, warehouse, Member, or Patron from which to drawproduct, considering such factors as, but not limited to, car loadings, pointsof destination, capacity of tanks or warehouses, and size of inventories storedtherein.  Direct or indirect costs ofMIDWEST associated with the performance of the logistics function shall beallocated to PROCESSOR in accordance with Section 5 of this Agreement.

 

# **11.         ****Information fromPROCESSOR****.**  PROCESSOR shall, whenever requested byMIDWEST, furnish MIDWEST product production and related statistical datarelated to the Co-Products, and shall make its books and records related to theCo-Products and statistics available

 

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# at all reasonable times for inspection by MIDWEST.  PROCESSOR further agrees, upon request ofMIDWEST, to furnish MIDWEST with samples of the Co-Products for grading orselling purposes.  MIDWEST shall furnishmonthly performance reports of sales and operating costs against budget nolater than 15 working days from the end of the month.

 

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

 

# **13.          Termof Agreement; Termination.**

 

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

 

## **(b)           Termination**.  Either party has the right to terminate thisAgreement at the end of the Initial Term and thereafter by giving writtennotice by registered mail to the other party of such termination as follows:

 

## **(i)           **Notice of termination to be effective atthe conclusion of the Initial Term shall be given prior to May 1, 2010;

 

## **(ii)          **Notice of termination to be effective atthe conclusion of a renewal term shall be given prior to May 1 of a givenyear to be effective on August 31 of the subsequent year (e.g., noticegiven on April 30, 2011 is effective August 31, 2012).

 

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

 

**(d)           Continuing Obligations**. Following the termination of this Agreement for any reason, MIDWESTshall remain obligated to distribute the net proceeds of each pool to PROCESSORas provided herein.

 

**14.          PatronageRelationship. **MIDWEST and PROCESSOR agree that thebusiness to be transacted under this Agreement will be done on a cooperativebasis.  PROCESSOR agrees to treat thefull amount of any patronage distribution, in excess of the net proceeds to bereturned to PROCESSOR as provided herein, which is made in a written notice ofallocation (as defined in 26 U.S.C. §1388) which it receives, as incomereceived in the year in which such written notice of allocation is received atits stated dollar amount in the manner provided in 26 U.S.C. §1385(a).

 

# **15.         ****Compliance with MIDWEST’sGoverning Instruments****.**  PROCESSORaccepts and agrees to conform to and abide by the provisions of the Articles ofAssociation and Bylaws of MIDWEST and all amendments thereto during the term ofthis Agreement.

 

# **16.          Representationsby PROCESSOR.**  PROCESSOR hereby represents and warrants toMIDWEST that:

 

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**(a)          ****Cooperative Status**.** **PROCESSOR is a grower-ownedagricultural cooperative which is organized and operated so as to adhere to theprovisions of Section 15(a) of the Agricultural Marketing Act (12U.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 allCo-Products which are delivered to MIDWEST or to Purchasers are free and clearof any liens, attachments, security interests, claims or encumbrances of anykind whatsoever;

 

## **(c)          ****No Prior Obligation**.  Exceptas previously disclosed to MIDWEST, PROCESSOR is not under contract orobligation to sell, market, consign or deliver any of the Co-Products to anyother 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 isproduced in whole or in part from biotech seed or other genetically modifiedorganisms used by PROCESSOR, PROCESSOR’s growers, or which is in any manneracquired by PROCESSOR from another party (“Biotech Product”).  PROCESSOR shall indemnify, defend and holdMIDWEST and each of its Members and their respective directors, officers,employees, representatives and agents (each an “Indemnitee”) harmless from andagainst all liabilities, obligations, claims, damages, penalties, causes ofaction, costs and expenses (including, without limitation, attorneys’ fees andexpenses, 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 resultdirectly from the supply by PROCESSOR of any Biotech Product to MIDWESTpursuant to this Agreement.

 

## **17.         ****Indemnification byPROCESSOR**.  PROCESSOR hereby agrees to indemnify and holdharmless, MIDWEST, its members, and their respective employees, from andagainst any claims, losses or liabilities, including attorneys fees incurred,arising out of, or resulting from, the production, on-site storage or loadingof any product which is marketed by MIDWEST pursuant to this Agreement.  In addition, PROCESSOR shall defend and holdharmless MIDWEST from any costs, claims, liabilities, suits or otherproceedings or actions of any kind whatsoever, including attorney feesincurred, arising from or connected with a breach of any of the representationscontained in Section 16 of this Agreement.

 

## **18.          Representationsby MIDWEST.**  MIDWEST hereby represents and warrants toPROCESSOR that:

 

**(a)          ****Cooperative Status**. MIDWEST is a grower-owned agricultural cooperative which is organizedand operated so as to adhere to the provisions of Section 15(a) ofthe Agricultural Marketing Act (12 U.S.C. Sec. 1141j(a)), as amended, and theCapper-Volstead Act of 1922 (7. U.S.C., Sec. 291, 292).

 

**(b)          ****Member Agreements**. ** **All other Members either have orwill be required to enter into identical pool marketing agreements for themarketing 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 andthat this contract represents the voluntary and clear understanding of bothparties fully and completely.

 

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

 

# **21.         ****Waiver of Breach****.** No waiver of any of the agreements or provisions contained in thisAgreement shall be construed to be a waiver of any subsequent breach of thesame or of any other provision of this Agreement.

 

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

 

# **23.         ****Construction of Terms ofAgreement; Modification****.**  The languagein all parts of this Agreement shall be constructed as a whole according to itsfair meaning and not strictly for or against any party hereto.  Headings in this Agreement are forconvenience only and are not to be construed as a part of this Agreement or asdefining, limiting or amplifying the provisions hereof.  This Agreement contains the entire agreementbetween the parties and shall not be modified in any manner except by aninstrument in writing executed by the parties hereto.  In the event any terms, covenant or conditionherein contained is held to be invalid or void by any court of competentjurisdiction, the invalidity of any such term, covenant or condition shall inno 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 andshall bind the parties hereto and their successors and permitted assigns.

 

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**INWITNESS WHEREOF,**MIDWEST and PROCESSOR have executed this Agreement effective the day and yearfirst 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**

 

TheCo-Products supplied under this Agreement shall be of sound and merchantablequality and shall conform to the following specifications:

 

**Driedbeet pulp**

Beetpulp pellets

5/16”diameter pellets

Moisture- maximum 11 %

Sucrose- maximum 10.5% dry basis

Ash-maximum 8%dry basis

Fines- maximum 3%

Length3/4”- 1 1/4” target

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

ShippingWeight - as agreed from time to time and subject to car size

 

BeetPulp 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

 

BeetPulp Shreds- with molasses

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

Moisture- not more than 11.0%

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

 

**BeetMolasses**

Beetmolasses as produced in the normal operations of the factory

DoubleDilution Brix - minimum 79.5 degree

Totalsugars expressed as invert - minimum 48%

 

**Raffinate(de-sugared beet molasses)**

Drymatter – minimum 60%

CrudeProtein - minimum 9%

 

**Betaine**

Dry matter - not lessthan 60%

Betaine content - notless than 32% by weight

 

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