Exhibit 10(b)
AMENDED AND RESTATED
UNIFORM MEMBER SUGAR MARKETING
AGREEMENT
POOL BASIS
THIS AGREEMENT is made
effective as of September 20
, 2007
by and between UNITED SUGARS CORPORATION, a
cooperative association organized under the laws of the State of
Minnesota (“UNITED”), and MINN-DAK FARMERS COOPERATIVE,
a cooperative association organized under the laws of the State of
North Dakota (“MDFC”).
WITNESSETH
WHEREAS , MDFC is an
association of agricultural producers or an agricultural producer
organized and operated so as to adhere to the provisions of Section
15(a) of the Agricultural Marketing Act (12 U.S.C.
§ 1141j (a)), as amended, and the Capper-Volstead Act of
1922 (7 U.S.C. §§ 291, 292), and is engaged in the
operation of one or more sugar processing plants for the purpose of
producing one or more forms of refined sugar; and
WHEREAS , UNITED is
organized and operated so as to adhere to the provisions of Section
15(a) of the Agricultural Marketing Act (12 U.S.C.
§ 1141j (a)), as amended, and the Capper-Volstead Act of
1922 (7 U.S.C. §§ 291,292), for the mutual help and
benefit of its members (currently United States Sugar Corporation
(“USSC”), American Crystal Sugar Company
(“ACSC”), and MDFC, and all future members, each a
“MEMBER” or collectively, “MEMBERS”) and
for the purposes of acting as a marketing agency for its MEMBERS
and of engaging in the business of marketing the refined sugar
(whether sold in packages or in bulk) produced by its MEMBERS,
including but not limited to, granulated, liquid, blends, and
specialty products; and
WHEREAS , MDFC is a
MEMBER of UNITED and wishes to participate with other MEMBERS in
developing and maintaining a dependable market for certain products
it produces; and
WHEREAS , UNITED and
MDFC 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 MDFC and UNITED herein, UNITED and
MDFC agree as follows:
Definitions .
As used in this Agreement, the following terms shall
have the following meanings:
“ Allocation ” means the amount
of sugar a MEMBER is authorized to market as established by the
United States Department of Agriculture under the Allotment Statute
(defined below).
“ Allotments ” means an overall
allotment of sugar processed from domestically produced sugarcane
and sugar beets, as defined and contemplated by the Allotment
Statute.
“ Allotment
Statute ” means the Agricultural
Adjustment Act of 1938 (7 U.S.C. § 359aa et seq. (2007)),
and amendments thereto, or subsequent statutes providing for sugar
marketing allotments.
“ Assets
Costs ” shall mean carrying costs
of assets associated with Product shipping, packaging, warehousing
(including all costs historically included by UNITED as warehousing
costs), and storage functions, including depreciation and
interest.
“ Beet Processing
Season ” means the period of time
generally from September through August during which a Beet
Producer processes beets, thick juice and extract into refined
sugar.
“ Beet
Producer ” means a MEMBER that
processes sugar beets into refined sugar.
“ Buyer
” is a third party purchaser of Finished
Product from UNITED.
“ Commingle ” means (i) Finished
Product of a MEMBER that is stored by UNITED in a warehouse or
stationary storage facility that is owned or leased by UNITED; or
(ii) Product which has been further processed by UNITED.
“ Cane Processing
Season ” means the period of time
generally from mid-October through April during which time a Cane
Producer processes sugarcane into feedstock for a
refinery.
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“ Cane
Producer ” means a MEMBER that
processes cane into refined sugar.
“ Crop
Year ” means the crop year
established by the Beet Producers for their own business
operations.
“ Excess
Product ” means that amount of
Product exceeding a Beet Producer’s Allocation.
“ Fiscal
Year ” means the fiscal year of
UNITED, which begins on September 1 and ends on August
31.
“ Force
Majeure ” means any (i) fire,
freeze, accident, explosion, construction delay, hurricane, flood,
act of God, inability to obtain electric power or fuel, inability
to obtain any required permits or licenses, government law,
directive or regulation; or the effect of the application of any
governmental law, directive or regulation, or any like contingency,
beyond a party’s reasonable ability to control or avoid; and
(ii) labor dispute or strike, from whatever cause arising and
regardless of whether the demands of the employees involved are
reasonable and within the affected party’s power to
concede.
“ Finished
Product ” or “
Finished Products ” means those Products that have been granulated or
otherwise made ready for marketing to third parties.
“ MEMBER
” means a member or shareholder of UNITED who
is entitled to vote, presently ACSC, USSC, and MDFC.
“ Net Selling
Price ” means the gross proceeds
realized by UNITED from sales of Products produced by MEMBERS in
the Primary Pool, less expenses directly attributable to the
Primary Pool, including all Operating Costs, charges or expenses
attributable to the marketing and sale of pooled Products,
including without limitation salaries, wages and other benefits of
UNITED’s employees, office expense and appropriate consulting
fees, and all costs of transportation of the pooled
Products.
“ Operating
Costs ” means operating costs
associated with Product shipping, packaging, warehousing (including
all costs historically included by UNITED as warehousing costs) and
storage functions, including without limitation labor (including
direct and indirect costs, such as employee benefits, insurance,
etc.), supplies, and utilities.
“ Pool
Year ” means the pool year of the
Primary Pool, which coincides with the Fiscal Year of UNITED, which
begins on September 1 and ends on August 31.
“ Primary
Pool ” means Product of each MEMBER
that is pooled for each Fiscal Year with Products of other MEMBERS
as agreed to in Section 6.1.
“ Product
” or “ Products ” means refined sugar
produced by a MEMBER, or purchased by a MEMBER or by UNITED on
behalf of a MEMBER, during the term of this Agreement, including,
but not limited to, granulated, liquid, blends, specialty products,
standard liquor, thick juice, extract and other forms of
ungranulated sugar.
“ Pro Rata
Share ” shall be equal to a
fraction, with each MEMBER’S annual production of Product (on
a sugar equivalent basis) included in the Primary Pool as the
numerator and total annual pool production of Product (on a sugar
equivalent basis) for all MEMBERS included in the Primary Pool as
the denominator.
“ Purchased
Sugar ” means Product that is
purchased by a MEMBER from a third party or from another
MEMBER.
“Separate Pool”
means Excess Product or other Product of a MEMBER
that is not eligible for the Primary Pool that is separately
handled by UNITED for each Fiscal Year as agreed to in Section
6.1.
“ Sidney Storage
Facility ” means the approximately
1,910,000 CWT capacity sugar storage facilities that are owned or
accessible by Sidney Sugars Incorporated, a wholly owned subsidiary
of ACSC (“SSI”), in Sidney, Montana.
“ Term
” has the meaning set forth in Section
17.
“ Transgenic ”
or “
Transgenic Variety ” means a variety of sugar beet or sugarcane that
contains a gene or genes that has or have been artificially
inserted instead of the plant acquiring the gene or genes through
pollination or standard sugarcane reproduction.
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Appointment of UNITED as Sales
Agent .
UNITED Appointed Sales Agent
. MDFC appoints and designates UNITED to act as its
sole worldwide agent in the sale and marketing of MDFC Products.
UNITED accepts such appointment and agrees to act as the sales
agent and pool administrator in accordance with the terms of this
Agreement, and subject to Section 19.2 hereof. MDFC agrees that
UNITED may employ all such persons and agencies as it determines to
be necessary to carry out its obligations under this Agreement. It
is understood and agreed that UNITED may market Products under the
various trademarks and trade names of MDFC (if any) pursuant to a
royalty-free license agreement with respect to such trademarks and
trade names, the form of which agreement shall be mutually agreed
upon by MDFC and UNITED.
UNITED Authorized to Pass Title
. UNITED agrees, and is hereby empowered by MDFC, to
sell in its own name, and pass title on behalf of MDFC, all Product
during the Term of this Agreement to such purchasers, at such time
or times, at such place or places, in such manner and on such
prices or terms as UNITED determines to be in the best interests of
MDFC.
Products not included in this
Agreement . UNITED shall have no rights,
and nothing herein contained shall be deemed to create rights in
UNITED, in and to any other products produced by MDFC other than
Product or Products as herein defined.
Procurement of Additional Product
. It is understood and agreed that UNITED may from
time to time procure certain Products from third parties in order
to meet the requirements of sales contracts or as otherwise
determined to be in the best interest of the MEMBERS. MDFC and
UNITED agree that UNITED shall act as an agent for MDFC in
connection with such purchases of Products and that the costs of
acquiring such Products and revenues received from the sale of such
Products shall be included in the Primary Pool.
Packaging .
MDFC intends to have the capacity to sell Product in
bulk as well as in packages. It is understood that production and
packaging constraints may limit the volume and mix of packages that
can be produced at any one time, and, accordingly, UNITED agrees to
coordinate orders for packaged Product taking into consideration
MDFC’s production and packaging limitations.
Production and Delivery
.
Timing of Production .
It is anticipated that MDFC will produce Finished Products during
its campaign on an approximately even monthly schedule. However,
MDFC acknowledges that UNITED’s requirements may be greater
in certain specified months and less in others. Accordingly,
subject to mutual agreement of the parties, UNITED will endeavor to
coordinate demands with MDFC’s production and storage
capacities. At UNITED’s request, and for an agreed upon
payment, MDFC may agree to maximize its production in any month in
order to accommodate customer demand.
Product Production Schedules
. MDFC shall provide to UNITED by June 1 of each
Fiscal Year during the Term a preliminary estimated production
schedule (specifying volume and dates) of Product for the next
following Fiscal Year and will provide a revised estimated
production schedule of Product by July 1 and each month thereafter
of each such year, reflecting any changes from the June preliminary
estimate. UNITED and MDFC shall jointly develop a production and
delivery schedule plan for MDFC for each Fiscal Year that will
attempt to accommodate, as much as reasonably possible, the dual
goals of maximizing the price to be paid to MDFC and maximizing
production efficiencies, with the objective of selling all of
MDFC’s production of Product each year.
Weekly Delivery Amounts . Estimated weekly delivery schedules of Finished Product,
including quantities, and bulk and packaging requirements for each
week of each month, shall be agreed upon by UNITED and MDFC at
least seven (7) days in advance of the month to which they apply.
The parties shall use reasonable efforts, recognizing customer
demand, to accommodate each other in setting such
schedules.
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Billing and Collection
.
All sales made by UNITED shall be billed on invoices
of UNITED and all receipts shall be collected by UNITED.
Pooling of Product
.
Agreement to Pool Product . UNITED and MDFC agree that the Products to be sold by UNITED
hereunder shall be pooled for each Fiscal Year with Products of the
other MEMBERS of UNITED in the Primary Pool. UNITED by action of
its Executive Committee shall have the discretion to create
additional pools as deemed reasonably necessary for the equitable
treatment of all MEMBERS and to create accounting standards for
such additional pools.
Adjustments for Beet Producers
. The amount of Product to be included in the
Primary Pool for a Beet Producer shall be the amount of Product
produced by the Beet Producer during the applicable Crop Year, not
to exceed the Beet Producer’s Allocation. Any Excess Product
of a Beet Producer shall be marketed as provided in Section 19.2,
below.
Adjustments for Cane Producers
. In order to coordinate the Cane Processing Season
with the Beet Processing Season, the amount of cane Product for a
Cane Producer to be included in the Primary Pool for each Fiscal
Year shall be the amount of cane Product (on a sugar equivalent
basis) produced by the Cane Producer during the applicable Fiscal
Year, less the cane Product (on a sugar equivalent basis) produced
by the Cane Producer that was allocated to the prior Fiscal Year,
with the difference multiplied by 1.141.
Price for Product
.
Price . UNITED shall
pay to MDFC its Pro Rata Share of the Net Selling Price for all
Products sold by UNITED hereunder.
Timing of Payment to MEMBERS
. As sales of Finished Product are made by UNITED
from the Primary Pool, the gross cash receipts received by UNITED
from the sale of such Finished Products shall be paid daily to MDFC
and each other Primary Pool participant on the basis of the
estimated Pro Rata Share of the Finished Product, reduced by
in-process inventories on hand at the beginning of the year (which
are included in the prior year’s Primary Pool), to be
produced by MDFC and each of the other participants in the Primary
Pool during that Fiscal year. The formula set forth in Section 6.3
(Adjustments for Cane Producers) shall be utilized to adjust Cane
Producer’s production during the Fiscal Year for the purpose
of determining Cane Producer’s estimated Pro Rata Share, and
the payment of gross cash receipts to Cane Producer shall be
adjusted accordingly. Because gross cash receipts are distributed
daily, UNITED shall borrow from its line of credit in order to
cover its monthly Operating Costs. Such monthly Operating Costs
shall be promptly reimbursed to UNITED by each MEMBER on the same
basis described above regarding daily cash distributions so that
each MEMBER pays its Pro Rata Share of the expenses that are
incurred by UNITED during the month.
Adjustments for Changes to Production
Estimates . The determination of
MDFC’s Pro Rata Share of gross cash receipts shall be based
on UNITED’s best estimate of the amount of Finished Products
anticipated to be produced in such Fiscal Year by MDFC and each
other participant in the Primary Pool, and shall be adjusted by
UNITED periodically as production figures are more precisely
determined. Such adjustments shall reflect an interest charge to be
paid by any Primary Pool participant who has received excess
distributions based on the preliminary production estimates and
such interest shall be paid to the Primary Pool participant(s) who
received less than full distributions. For purposes of this
paragraph, interest charges shall be the prime rate as published in
the Wall Street Journal on the first business day of each month. As
soon as exact information and production figures are available,
UNITED shall determine MDFC’s final Pro Rata Share of the
gross cash receipts for the Primary Pool during the Fiscal Year,
and appropriate adjustments, together with interest charges/credits
as provided above, shall be made. The final accounting for the
Primary Pool shall be made no later than the ninetieth day
following the last day of each Fiscal Year.
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UNITED’s Books and
Records .
UNITED shall keep accurate records of costs, sales,
and distributions of Primary Pool proceeds in accordance with sound
and generally accepted accounting practices. Said records shall be
at all reasonable times fully available for inspection and copying
by MDFC or its certified public accountants. All records of the
Primary Pool and any Separate Pool that is created shall be audited
annually by UNITED’s regular Independent Certified Public
Auditors and the audit report made available to MDFC. !
Budget of Marketing Costs
.
UNITED shall prepare an annual budget or estimate of
all direct and indirect marketing costs for the Primary Pool. It is
the intention of UNITED to secure independent financing for costs
associated with the marketing of Products as reflected in the
budget.
Product Specifications, Quality Standards and
Handling of Products of Substandard Quality
.
Specifications . MDFC
agrees to comply with UNITED’s Specifications for Products,
which specifications prescribe standards and procedures for quality
control, storage, and shipment of Products, and which are attached
hereto as Schedule A. In addition, MDFC agrees to comply with
UNITED’s Quality Assurance Policy that is attached hereto as
Schedule B. Any changes to the specifications or Quality Assurance
Policy shall be mutually agreed upon by UNITED and the
MEMBERS.
State and Federal Regulations
. All Products delivered to or at the order of
UNITED shall conform to quality and other standards prescribed by
applicable state and federal rules and regulations.
Substandard Product .
Product that fails to meet the specifications or the Quality
Assurance Policy and which cannot be sold without discounting shall
be considered substandard for purposes of this Agreement. Product
of substandard quality shall be withheld from the Primary Pool and
marketed by UNITED in a Separate Pool, with proceeds of the sale of
such Product, less all direct and indirect selling expenses,
distributed to the MEMBER that produced such Product; in the
alternative, this MEMBER and UNITED may mutually agree that the
Product of substandard quality may remain in the Primary Pool and
the MEMBER will be charged with the additional costs relating to
the substandard quality of the Product, including any necessary
discounts.
Storage of Product
.
MDFC shall store its Product as the parties shall
mutually agree; provided, however, that with respect to storage by
MEMBERS or UNITED, the parties shall utilize reasonably available
storage methods that result in the lowest total cost to the Primary
Pool. At the earliest reasonable time after processing commences in
each Fiscal Year and as soon as Product has begun to be placed in
storage, MDFC shall deliver daily Product inventory reports to
UNITED. All Product included in the daily inventory shall be
included in the Primary Pool for the appropriate Fiscal Year even
though the Product remains on the premises of MDFC.
Portion of Sidney Storage Facility Controlled by
UNITED . UNITED will have the exclusive
right to store 910,000 CWT of sugar in the Sidney Storage Facility
(the “UNITED Controlled Storage”). UNITED shall be
responsible for reimbursing ACSC for the Asset Costs and Operating
Costs of the UNITED Controlled Storage pursuant to Section 16
hereof. The parties acknowledge that a portion of such reimbursable
Asset Costs and Operating Costs may include costs charged to ACSC
by a third party.
Portion of Sidney Storage Facility Controlled by
ACSC . ACSC retains the exclusive rights
with respect to that portion of the Sidney Storage Facility not
constituting UNITED Controlled Storage (the “ACSC Controlled
Storage”). In the event UNITED desires to utilize the ACSC
Controlled Storage that is not otherwise being utilized by ACSC, it
shall notify ACSC in writing at least thirty (30) days in advance
of the date UNITED anticipates utilizing such storage. The notice
shall state the volume of storage UNITED desires and the
anticipated duration of the storage. ACSC shall provide a written
response to UNITED within fifteen (15) days after receipt of the
notice to confirm whether or not UNITED may utilize the requested
portion of the ACSC Controlled Storage. UNITED’s use of the
ACSC Controlled Storage shall at all times be subject to the
continuing rights of ACSC as provided in paragraph
11.2.2.
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In the event UNITED is utilizing the ACSC Controlled
Storage and ACSC desires to exercise its rights to utilize such
storage due to government imposed marketing restrictions or due to
higher than anticipated production output of SSI or ACSC, ACSC
shall provide UNITED with thirty (30) days advance written notice
to vacate the portion of the ACSC Controlled Storage that ACSC
desires to utilize and UNITED shall use its best efforts to vacate
the portion of the ACSC Controlled Storage needed by ACSC. In the
event that UNITED is unable to vacate all or a portion of the ACSC
Controlled Storage during such thirty-day period due to load-out
limitations at the facility, then, if such action would relieve
ACSC’s shortage of storage, UNITED and ACSC will execute
appropriate accounting transfers between UNITED and ACSC to provide
that up to 1,000,0000 CWT of the sugar stored at the Sidney Storage
Facility is being stored for the account of ACSC rather than for
the account of UNITED. If UNITED is unable to vacate sufficient
storage as required by ACSC and if the above referenced accounting
transfer would not relieve ACSC’s shortage of storage, then
at the conclusion of the thirty-day period, UNITED shall (i)
continue to be responsible for the reimbursement of costs provided
in paragraph 11.2.3 of this Agreement; and (ii) shall be obligated
to reimburse ACSC for all storage costs ACSC may incur as a result
of not having the ACSC Controlled Storage available which is over
and above the amount ACSC would have incurred if the storage had
been made available to ACSC, including, but not limited to,
packaging, shipping, handling, in and out charges, storage fees,
reprocessing, and other costs associated with ACSC’s use of
an outside storage facility.
Subject to the provisions set forth in this
paragraph 11.2.3 regarding the calculation of utilization, UNITED
shall reimburse ACSC for the Operating Costs of the ACSC Controlled
Storage. The parties acknowledge that ACSC’s Operating Costs
shall include actual Operating Costs billed to ACSC by SSI. The
parties agree that UNITED shall reimburse ACSC for the Asset Costs
of the ACSC Controlled Storage, but that the Asset Costs shall be
based upon the fixed amount of $0.042 per CWT per month. With
respect to reimbursement for Operating Costs and Assets Costs, the
reimbursement for the ACSC Controlled Storage shall be based on
UNITED’s average monthly utilization (in CWTs) of the ACSC
Controlled Storage. The average monthly utilization shall be the
sum of the number of CWTs in storage on the first day and the last
day of the month divided by two.
Risk of Loss and Insurance
.
Risk of Loss . MDFC
covenants and agrees that it shall bear the risk of loss of any
Product produced by MDFC until the risk of loss for such Product
passes to the Buyer; provided, however, that risk of loss shall
pass to UNITED before delivery to the Buyer if the Product is
Commingled. Regardless of which party bears the risk of loss, MDFC
shall continue to be the owner of its Product until the Product is
sold to the Buyer. Whenever UNITED shall have possession or control
over such Product prior to sale to the Buyer, UNITED shall act
strictly as custodian thereof in accordance with the provisions of
this Agreement.
MDFC to Maintain Insurance . MDFC covenants and agrees, at its sole cost and at all times
during the Term of this Agreement, to maintain in force during the
period for which it bears the risk of loss, (i) an all risk
property insurance policy or policies covering loss, theft or
damage to the Products produced by MDFC in an amount not less than
the full replacement cost thereof; and (ii) product liability
insurance in an amount required by UNITED from time to time naming
UNITED as an additional insured.
UNITED to Maintain Insurance
. UNITED covenants and agrees, at its sole cost and
at all times during the Term of this Agreement, to maintain in
force during the period for which it bears the risk of loss, (i) an
all risk property insurance policy or policies covering loss, theft
or damage to the Products in an amount not less than the full
replacement cost thereof; and (ii) product liability insurance in
an amount approved by UNITED from time to time, naming MDFC as an
additional insured on a primary and noncontributory basis.
!
Certificates of Insurance . Insurance policies shall be taken out with responsible
insurance companies with a Best rating of no less than A-, and such
policies shall not be canceled or materially altered without ten
days’ written notice to UNITED and MDFC. Each party shall
furnish the other party with certificates of insurance for policies
required hereunder, together with a summary of the terms and
conditions of the policy or policies, and the date on which the
same expire.
Waiver of Subrogation .
UNITED and MDFC hereby waive subrogation rights as to the other
party with respect to all insurance coverages.
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Orders .
Regardless of factory or warehouse designation, the
proceeds from sales orders shall be credited to the Primary Pool
for the appropriate Fiscal Year. UNITED shall consider car
loadings, points of destination, capacity of tanks or warehouses,
size of inventories stored therein, costs and other pertinent
factors in selecting the factory, warehouse or warehouses from
which delivery shall be made.
Logistics Function
.
UNITED shall be responsible for performing all
normal logistics functions relating to the shipment of all Products
produced at MDFC’s plant. Direct or indirect costs of UNITED
associated with the performance of the logistics functions related
to Products shall be a marketing expense of the Primary
Pool.
Information from MDFC
.
MDFC shall, whenever requested by UNITED, furnish to
UNITED production and related statistical data for Products
prepared on a daily basis, and shall make its books and records
related thereto available at all reasonable times for inspection by
UNITED. MDFC shall not be required to release information
concerning MDFC’s proprietary processes or costs (other than
reimbursable Asset Costs and Operating Costs) which costs shall be
provided in sufficient detail to satisfy UNITED’s reasonable
requirements in connection with the reimbursements provided for in
Section 16 hereof, or other confidential financial information.
MDFC further agrees, upon request of UNITED, to furnish UNITED with
samples of Products for grading or selling purposes.
Pool Expenses Incurred by MDFC
.
MDFC shall be reimbursed out of the Primary Pool for
its Assets Costs and Operating Costs; provided, however, that
storage costs of thick juice or standard liquor from beets or raw
cane sugar refinery feedstock shall only be reimbursable pursuant
to the Storage Reimbursement Guidelines set forth in Schedule
C.
UNITED shall credit MDFC for its Asset Costs and
Operating Costs within thirty (30) days of submission of
MDFC’s written cost breakdown. In the event there is a
dispute regarding the amount of such reimbursement, UNITED shall
credit the undisputed amount and if the parties are unable to
resolve the disputed amounts within thirty (30) days from the date
payment is due, the controversy shall be resolved in the manner
provided in Section 21 hereof.
MDFC shall, prior to the construction or
installation of any new assets to be charged to the Primary Pool,
obtain approval from UNITED for such construction or
installation.
Term of Agreement; Termination
.
Term . The term of this
Agreement shall commence on the date hereof and shall continue
through August 31, 2008 (the “Initial Term”) and from
Fiscal Year to Fiscal Year thereafter (the “Renewal
Terms”) until terminated as provided herein.
“Term” means the Initial Term and any Renewal
Terms.
Termination by UNITED or MDFC
. After the end of the Initial Term, either UNITED
or MDFC has the right to terminate this Agreement by giving written
notice by registered mail to the other party of such termination.
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, 2008 is effective August 31, 2009).
Termination Pursuant to the Bylaws of
UNITED . In the event membership in
UNITED is terminated pursuant to the provisions of the Bylaws of
UNITED, MDFC’s participation in this Agreement shall
terminate effective the date of termination of membership;
provided, however, that UNITED shall have the obligation to
purchase from MDFC and MDFC shall have the obligation to sell
Products in the quantities and under the payment terms provided in
this Agreement for the next succeeding twelve (12) month period
following termination; further provided, that in no event shall
UNITED or MDFC be required to take any actions that could
jeopardize UNITED’s status as a common marketing agent under
the Capper-Volstead Act.
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Performance Following Termination
.
Following termination of MDFC’s participation
in this Agreement, as provided in Sections 17.2 or 17.3 above, MDFC
shall have the obligation to sell its Pro Rata Share of any Product
for which UNITED has, as of the date of notice of termination, made
commitment to deliver to a third party Buyer, under the payment
terms provided for in this Agreement.
The rights and obligations with respect to the
marketing of MDFC’s Products shall continue in effect until
all of such pooled Products have been sold by UNITED and
MDFC’s Pro Rata Share of the Net Selling Price from sales of
Primary Pool Products produced by UNITED’s MEMBERS during
such years and reimbursable costs and expenses have been
distributed.
Representations, Warranties, and
Indemnifications .
Representations By MDFC . MDFC represents and warrants that it is not under contract or
obligation to sell, market, consign or deliver any of the Products
committed to the pools under this Agreement to any other person,
firm, association, corporation or other entity. Further, MDFC shall
defend and hold harmless UNITED from any costs, claims,
liabilities, suits or other proceedings or actions of any nature or
kind whatsoever arising from or connected with any such prior
agreement, contract or arrangement or the termination or
cancellation of any prior agreements, contracts or
arrangements.
Representations By UNITED . UNITED represents and warrants that it has the power and
authority to enter into this Agreement, sell the Products committed
to the pools and otherwise to fulfill its obligations under this
Agreement. Further, UNITED shall defend and hold har
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