Member No. ______
UNIFORM CATTLE DELIVERY AND
MARKETING AGREEMENT
U.S. PREMIUM BEEF, LLC
P.O. BOX 20103
KANSAS CITY, MO 64195
PHONE: (866) 877-2525 FAX: (816) 713-8810
"ODD SLOTS"
THIS AGREEMENT , effective as of _______________, 20___, is
between U.S. Premium Beef, LLC (a Delaware limited liability
company, referred to as "USPB"), and the undersigned contracting
producer (referred to as "Producer") who holds Class A Units issued
by USPB. USPB desires to protect its interests by ensuring
that it will have access to an adequate supply of cattle for
delivery to cattle processing facilities owned, controlled or
contracted by USPB on behalf of USPB and other Class A Unitholders
who deliver cattle to or through USPB; and the Producer desires to
supply cattle to or through USPB for further processing. USPB
and the Producer agree that the Producer must own, control, or
associate with others to make beneficial changes in cattle breeding
and production to meet processing and beef consumer preference
demands. Subject to the terms, conditions, and obligations of
USPB and Producer in this Agreement, similar obligations of other
Class A Unitholders contracting with USPB, and in accordance with
the Limited Liability Company Agreement of USPB, the Producer and
USPB agree as follows:
1.
Commitment to Supply Cattle to USPB. Producer agrees
to deliver and supply to or through USPB and USPB agrees to market
or receive for processing one head of cattle from the Producer for
each Class A Unit owned by the Producer (subject to assignment as
provided below and as provided in Paragraph 13) each year during
the term of this Agreement, except that the Board of Directors may
reduce the annual cattle delivery amount by giving advance written
notice, if the Board determines in its sole discretion that the
available processing capacity held, controlled, or contracted by
USPB for its Class A Members will be a lesser amount. The
Board of Directors may, by resolution, allow a small deviation from
the above annual delivery requirements to allow for Producer's
production variances. The Board of Directors may approve the
assignment of delivery rights under this Agreement to another Class
A Member, or an associate of USPB; provided, however, that the
Producer remains liable for any underdeliveries or
non-deliveries. USPB shall attempt to limit odd slot delivery
agreements to allow all cattle committed to delivery to be
delivered. However, if there are more cattle committed than
available slots for processing, USPB will accept delivery
commitments on a first-come, first-served basis for the available
slots or utilize a selection method for delivery commitments
described in Paragraph 2.
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Odd Slots Delivery Agreement
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2.
Delivery of Cattle. USPB will attempt to accommodate the Producer's
preference for delivery as indicated in Paragraph 1. However,
for delivery slots that are overfilled, USPB intends to use a
selection procedure that may include closing certain delivery slots
or incentives to fill underfilled delivery. If the Producer
selects an overfilled slot, the Producer may select an underfilled
slot or participate in a selection procedure with other Producers
to determine how the odd slots will be filled. A uniform
delivery schedule shall be prepared by USPB and given to the
Producer with the actual delivery period(s). The Producer
agrees to supply the cattle in accordance with the delivery
schedule and agrees the risk of loss for the cattle shall remain
with the Producer until the cattle are delivered to USPB at a
location designated by USPB.
3. Appointment of
USPB as Purchasing Agent. The Producer appoints and designates
USPB to act as his, her or its sole agent in the sale and marketing
or utilization of cattle committed to USPB under this Agreement and
any extensions, renewals or amendments of this
Agreement.
If a Producer is unable to supply the required amount of cattle,
the Producer must obtain the cattle from any other source and
deliver the cattle to USPB, just as if the cattle had been produced
by the Producer. If the Producer does not deliver the cattle
as stated, the Producer agrees that USPB, at USPB's option without
the obligation, may act as Producer's agent for the purpose of
obtaining cattle in the name of the Producer and may charge to the
Producer all expenses, including, but not limited to, the price of
the cattle, shipping, reasonable attorneys' fees, and all
incidental costs.
USPB shall have no obligation to accept any cattle for marketing or
processing in an amount greater than one head of cattle for each
Class A Unit held by Producer, regardless of whether the Producer's
total cattle production has increased.
4. Minimum
Quality Standards. All cattle delivered by Producer
under this Agreement shall meet the minimum quality standards of
the industry for cattle to be processed. Cattle of
substandard quality, as determined by USPB or the entity processing
the cattle, shall be either: (1) rejected and returned to the
Producer with all costs relating to the rejection and return
charged to the Producer; or (2) accepted and handled or disposed of
in a manner customary in the industry with any necessary costs
charged to the Producer. If the Producer intentionally
delivers cattle that fail to meet minimum quality standards (due to
disease or otherwise), repeatedly delivers cattle that fail to meet
minimum quality standards (due to disease or otherwise), or
intentionally delivers cattle from a source, feedyard, or supply
that jeopardizes the quality of the meat from the cattle as
determined by USPB, it is a breach of this Agreement and USPB may
terminate this Agreement and the Producer's membership in
USPB.
5. Pooling
Arrangement. USPB may pool the Producer's cattle for
sale to various markets or for processing.
6. Payment to
Producer. USPB shall market, process