Document:

EXHIBIT
10.30

 

FIVE YEAR AGREEMENT

BETWEEN

 

(Shareholder)

and

AMERICAN CRYSTAL SUGAR COMPANY

(Company)

 

1.                     PLANTING
AND DELIVERY OBLIGATIONS. 
Shareholder agrees during the Initial Term and any Renewal Term hereof
to prepare land, plant, cultivate, harvest and deliver, the number of acres of
sugarbeets equal to the number of Preferred Shares of Company then owned by
Shareholder, subject to the provisions of Sections 2 and 3 of this
Agreement.  Company shall not be obligated
to 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 be
specified by annual contract to be entered into between Company and Shareholder
as a supplement to this Agreement (the “Annual Contract”).  Company hereby reserves the right to
disapprove of any field proposed to be used by a shareholder to grow sugarbeets
if in the judgment of Company the field is not appropriate for sugarbeets due
to disease, soil type, drainage conditions, or other factors.  Shareholder agrees to abide by any crop
rotation policies that may be established by Company.  Shareholder agrees to comply with policies regarding destruction
of damaged or diseased sugarbeets as established from time to time by Company.

 

2.                     TOLERANCES.  The total number of acres of sugarbeets to
be planted by Shareholder shall be subject to overplant and underplant
tolerances as established from time to time by Company pursuant to this
Agreement.  Shareholder hereby
acknowledges and agrees that said tolerances may be established and/or modified
from time to time by Company as determined to be appropriate to respond to
planting, crop conditions, and/or government imposed marketing
allocations.  The initial tolerance and
any modification thereof shall be effective upon communication of the same to
Shareholder by Company, and the Annual Contract shall be deemed amended to the
extent of the modified tolerance.

 

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

 

4.                     TERM.  The initial term of this Agreement shall be
for the 2003, 2004, 2005, 2006 and 2007 crop years (the “Initial Term”).  This Agreement shall automatically renew for
successive five (5) crop year terms (“Renewal Terms”) unless one party provides
written notice to the other party on or before August 31 of the final crop year
of the then current Initial or Renewal Term, of such parties intent to
terminate this Agreement.  The
provisions of this Agreement that are applicable to the final crop year of the
then current Initial or Renewal Term shall remain in effect following notice of
termination until performance has been completed with respect to such final
crop year.

 

5.                     PAYMENT
FOR SUGARBEETS.  Payment for
sugarbeets delivered each crop year shall be made as set forth in this Section
5 (using the definitions set forth in Section 18).

 

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

 

(b)                                 The
following allowances, costs and deductions, if applicable, will be used in
adjusting Shareholder’s Gross Beet Payment to Shareholder’s Net Beet Payment:

 

(i)                                     Freight
And Hauling Allowance Program: 
Company reserves the right to establish for each crop year covered by
this Agreement, a freight and hauling allowance program and in connection
therewith to allocate the cost of the freight and hauling allowance program
among shareholders of Company in a manner consistent with the program as
approved from time to time by the Board of Directors.

 

(ii)                                  Early
Delivery Allowance Program:  Company
reserves the right to establish for each crop year, an early delivery allowance
program in partial compensation to shareholders for the delivery of sugarbeets
prior to the commencement of the piling campaign.  The cost of this program will be shared equally each crop year on
a per net ton of sugarbeets delivered basis by all shareholders who have
delivered sugarbeets to Company.

 

(iii)                               Minimum
Payment Allowance Program:  Company
reserves the right to establish for each crop year, a minimum payment allowance
program.  The cost of this program will
be shared equally each crop year on a per net ton of sugarbeets delivered basis
by all shareholders who have delivered sugarbeets to Company.

 

(iv)                              Tare
Incentive Program:  Company reserves
the right to establish for each crop year, a tare incentive program to encourage
growers to reduce tare.  The cost of
this program will be allocated among shareholders of Company in a manner
consistent with the program, as approved by the Board of Directors.

 

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

 

(c)                                  Company
reserves the right to establish for each crop year, a program to discourage
late harvest by shareholders.  The
charges associated with this program will be allocated among shareholders in a
manner consistent with the program, as approved by the Board of Directors and
will be reflected as an adjustment to one or more of the payments to be made to
shareholder under this Agreement.

 

6.                     PAYMENT
SCHEDULE.  Payment for sugarbeets
delivered shall be made as follows:

 

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

 

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

 

(c)                                  The
final payment, which together with the prior payments shall equal one hundred
percent (100%) of the Net Beet Payment, shall be made no later than 15 days
after the approval of the Company’s audited financial statements as of its last
fiscal year end.

 

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

 

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

 

Dated this
           day of
                        ,
       .

 

 

	
  AMERICAN CRYSTAL SUGAR COMPANY

  	
   

  	
  SHAREHOLDER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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7.                     BREACH
AND REMEDIES.  Shareholder agrees to
abide by the Articles of Incorporation and the Bylaws of Company, to comply
with all applicable federal, state and local laws, ordinances, regulations and
rulings, as well as Company’s operational and agricultural regulations and
policies (collectively referred to herein as “Applicable Law and Policy”).  Shareholder acknowledges and agrees that
Shareholder is required, pursuant to this Agreement, the Annual Contract, and
the Bylaws of Company, to grow and deliver the sugarbeet crop to Company in
each year at the times specified by Company. 
Any one or more of the following shall constitute a breach of this
Agreement by Shareholder: (i) the failure of Shareholder to plant, grow and
deliver said crop to Company; (ii) the failure of Shareholder to comply with
Applicable Law and Policy, (iii) the failure of Shareholder to comply with any
provision of this Agreement, or (iv) the breach by Shareholder of any other
agreement with Company.  Upon a breach
of this Agreement, the Shareholder may be subject to one or more of the
following remedies as determined by Company :

 

(a)                                  Expulsion
as a member of Company;

 

(b)                                 Forfeiture
of Shareholder’s Common Stock in Company and qualification to be a preferred
shareholder of Company;

 

(c)                                  Termination
of this Agreement and the right to deliver sugarbeets to Company for
processing;

 

(d)                                 Payment
of liquidated damages to Company, which liquidated damages are hereby declared
and stated to be an amount equal to Shareholder’s share of Company fixed costs
for processing of the crop; and

 

(e)                                  Any
other legal or equitable remedy that may be available to Company under
applicable law.

 

8.                     SOIL
TESTS.  Shareholder agrees to
undertake and conduct soil testing on an annual basis on all land Shareholder
utilizes for growing of sugarbeets pursuant to this Agreement.  Shareholder further agrees to report and
make available  the results of said
soil  tests to the agricultural
department of Company, together with information as to the amounts and kinds of
fertilizer applied to the soil tested.

 

9.                     AGRICULTURE
PRACTICES.  Shareholder agrees to
plant only those seed varieties that have been approved from time to time by
Company.  Shareholder agrees that it
shall use no pesticide, chemical or other substances in a manner which could
result in any residue in or on 
sugarbeets grown for Company under this Agreement, or in any sugar or
by-products produced from such sugarbeets, beyond the limits permitted by law
or governmental regulations. 
Shareholder acknowledges and agrees that Company shall have the right to
reject and refuse delivery of any sugarbeets to which have been applied, or
which 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 agrees
that Company’s right to reject or refuse delivery of any  of said sugarbeets  may be invoked by Company at its sole option, regardless of
whether 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 or
by-products produced from such sugarbeets.

 

10.               INDEMNIFICATION.  Shareholder agrees to hold harmless and
indemnify Company and all shareholders of Company from any and all losses,
costs, or damages (including attorneys’ fees and costs) Company or its
shareholders may incur as a result of Shareholder (i) delivering sugarbeets to
Company 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 other
substance has been applied; or (ii) breaching any provision of this Agreement.

 

11.               DELIVERY
OF SUGARBEETS.  Delivery of
sugarbeets shall be made by Shareholder at such times, in such quantities, and
to such receiving stations as may be designated by Company.

 

(a)                                  Title
and all risk of loss to said sugarbeets shall be and remain with Shareholder
until such time as Shareholder completes delivery to Company at the designated
receiving station, at which time title and risk of loss shall pass to
Company.  The sugarbeets shall be protected
from sun and frost after removal from ground, including sugarbeets that are
loaded on truck.  Company has the option
of rejecting any diseased, frozen or damaged sugarbeets, sugarbeets having less
than 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 to
which, in Company’s opinion, the terms and conditions of this Agreement have
not been properly complied with, or for any other bona fide reason.

 

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

 

12.               SHAREHOLDER
INDEBTEDNESS TO COMPANY.  It is
agreed that the amount charged for all sugarbeet seed purchased from Company by
Shareholder, and any and all other indebtedness to Company by Shareholder,
whether due or not, shall constitute a debt which Company shall have the right
to collect as it would any other contractual obligation.  Any such amounts or indebtedness that is due
and payable or that hereafter may become due and payable to Company from
Shareholder shall be, become and remain a first priority lien on the crop of
sugarbeets to be grown and may, if not previously paid by Shareholder, be
deducted by Company from any payments from Company to Shareholder that shall
become due under this Agreement or any subsequent beet contract between Company
and Shareholder.  Shareholder agrees to
repay Company at the time of Shareholder’s initial beet payment for each crop
year all such amounts or indebtedness, together with interest at a rate to
Shareholder as may be set by Company, but not to exceed the highest rate
allowed by law.  Shareholder hereby
grants Company a security interest in any beet payments to be made to, or unit
retains held in the name of Shareholder, for purposes of securing payment of
such indebtedness.  Notwithstanding any
other remedy which may be available, Company shall have the right, exercisable
at its option, to offset any indebtedness to Company against the beet payments
to be made to Shareholder hereunder and/or unit retains held in the name of
Shareholder.

 

13.               NO
LIABILITY.  In no event shall
Company be liable to Shareholder for partial or complete failure of crop or for
any injury or damage to sugarbeets prior to the time of delivery to Company.

 

14.               FORCE
MAJEURE.  Fire, strikes, accidents,
acts of God and the public enemy, or other causes beyond the reasonable control
of the parties which prevent Shareholder from the performance of this
Agreement, or Company  from utilizing the
sugarbeets contracted for in the manufacture of sugar, shall excuse the
respective parties from the performance of this Agreement.

 

15.               PREVENTED
PLANTING.  Shareholder shall be
unconditionally obligated to plant the sugarbeet crop unless such planting is
prevented as a result of acts of God or other causes beyond the reasonable
control 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 before
June 1 of the applicable crop year, or such later date as may be established
from time to time under federal crop insurance policies to enable a sugarbeet
grower to receive prevented planting coverage at an unreduced level, (the
“Prevented Planting Date”), Shareholder shall be relieved of its obligation to
plant such sugarbeet crop.  Shareholder
may elect to plant the sugarbeet crop at any time after the Prevented Planting
Date.  A determination as to whether
Shareholder is prevented from planting shall be mutually determined by
Shareholder and a representative of Company based on Shareholder’s planting
conditions for the period leading up to and including the Prevented Planting
Date.

 

16.               BINDING
EFFECT.  Subject to the limitations
set forth in the Articles of Incorporation and Bylaws of Company, this
Agreement shall be binding upon Shareholder, its heirs, legal representatives,
successors and permitted assigns; and upon Company, its successors and
assigns.  This Agreement shall not be
transferable by Shareholder without written consent of Company.  No agent of Company has any authority to
change, waive, or modify any of the terms or provisions of this Agreement.

 

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

 

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

 

(b)                                 This
Agreement may be amended by a resolution approved at any regular or special
meeting of shareholders of Company at which a quorum is registered as being
present or represented by mail vote, by a majority of shareholders so present
or represented by mail vote, where the notice of such meeting contains a
statement of the proposed amendment.

 

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

 

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

 

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

 

(c)                                  The
“net selling price per hundredweight of sugar” sold shall be determined by
deducting from the gross sales price all such charges and expenditures as are
regularly and customarily deducted from such gross sales price of sugar in
accordance with Company’s system of accounting used to determine the “net
selling price of sugar” sold.

 

(d)                                 “Agri-products
revenue” 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 determined
in accordance with Company’s system of accounting.

 

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

 

2EXHIBIT
10.31

 

2003 ANNUAL CONTRACT

 

This Agreement is
entered into as of
                                              ,
2003 by and between American Crystal Sugar Company (the “Company”) and
                                                                                                                                                                                   
shareholder #                                       (the
“Shareholder”).

 

WHEREAS, the
Shareholder is a shareholder of the Company, and as such has entered into a
Five Year Agreement with the Company with regard to the growing and delivery of
sugarbeets to the Company; and

 

WHEREAS, the
parties desire to supplement the Five Year Agreement as provided therein with
regard to the 2003 sugarbeet crop.

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants set forth herein, the
parties agree as follows:

 

1.                                       Delivery
Obligation.  In
accordance with the terms of the Five Year Agreement, the Shareholder agrees to
prepare land, plant, cultivate, harvest and deliver the 2003 sugarbeet crop
from such number of acres and such fields as set forth on the Annual GPS
Information form to be separately completed in an electronic format by the
parties, and which shall thereafter be deemed to become an integral part of
this Agreement.  The Company shall
provide a copy of the Annual GPS Information form to the Shareholder at the
Shareholder’s request.

 

2.                                       Deductions.  The Shareholder hereby authorizes and
directs the Company to:

 

(a)                                  Deduct
an amount specified by the Red River Valley Sugarbeet Growers Association,
Inc., which amount shall not exceed 171⁄2¢ per ton, from the beet payments to be
made by the Company to the Shareholder for sugarbeets delivered for the 2003
crop; provided, that, such deduction shall not be made in the event the
Shareholder notifies the Company in writing prior to June 1, 2003 that such
deduction should not be made.  Amounts
deducted under this provision shall be paid by the Company to the Red River
Valley Sugarbeet Growers Association, Inc.; and

 

(b)                                 Deduct
such per ton amount, as may be necessary, from the beet payments to be made by
the Company to the Shareholder for sugarbeets delivered for the 2003 crop to
reimburse the Company for all costs incurred in the operation of the Truck Haul
Committee for the piling location to which the Shareholder delivers
sugarbeets.  The amount charged to the
Shareholder shall be determined on a per ton basis, reflecting a proration of
the costs based on the total tonnage delivered to the respective piling
locations.

 

3.                                       Certification.  The Shareholder hereby certifies that:

 

(a)                                  It
is a bona fide sugarbeet farm operator who will: (i) be the legal owner of the
2003 sugarbeet crop; (ii) have the majority financial interest in the 2003
crop, and (iii) have general control of the sugarbeet operations on the farm
where the 2003 crop will be grown.

 

(b)                                 It
has no agreements or understanding with third parties (i.e., owners, partners,
shareholders, etc.) providing for guaranteed cash payments.

 

4.                                       Nature of
Agreement.  This
Agreement is intended to supplement the Five Year Agreement as contemplated
therein, and except as specifically provided herein, this Agreement shall not
be deemed to amend or modify the terms of the Five Year Agreement.  This Agreement and the related Five Year
Agreement may be terminated by the Company upon ten (10) days written notice to
the Shareholder in the event the Shareholder is, as of April 1, 2003, in
default on any payment obligation owed to the Company.

 

5.                                       No Modification.  No agent of the Company has any authority to
change, waive, or modify any of the terms of this Agreement.

 

IN WITNESS WHEREOF, this Agreement has been
executed as of the date set forth above.

 

	
  AMERICAN CRYSTAL SUGAR COMPANY

  	
   

  	
  SHAREHOLDER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
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