Exhibit 10(e)
UNIFORM MEMBER MARKETING AGREEMENT
POOL BASIS
THIS AGREEMENT , made effective as of the 1 st
day of September 2001, by and between MIDWEST AGRI-COMMODITIES
COMPANY , a cooperative association organized under the laws of
the State of North Dakota (hereinafter referred to as “
MIDWEST ”) and MINN-DAK FARMERS COOPERATIVE , a
cooperative association organized under the laws of the State of
North Dakota (hereinafter referred to as “ PROCESSOR
”).
WITNESSETH:
WHEREAS , PROCESSOR is a producer-owned and
producer-operated agricultural cooperative which is organized and
operated so as to adhere to the provisions of Section 15(a) of the
Agricultural Marketing Act (12 U.S.C., Sec. 1141j(a)), as amended,
and the Capper-Volstead Act of 1922 (7 U.S.C., Sec. 291, 292), and
which is engaged in the operation of one or more sugar beet
processing plants for the purposes of producing sugar, beet pulp,
molasses, and related products from sugar beets; and
WHEREAS , MIDWEST is organized and operated so as to adhere
to the provisions of Section 15(a) of the Agricultural Marketing
Act (12 U.S.C., Sec. 1141j(a)), as amended, and the Capper Volstead
Act of 1922 (7 U.S.C., Sec. 291,292), for the mutual help and
benefit of its processor-members for the purposes of acting as a
marketing agency for its members and of engaging in the business of
marketing the beet pulp, molasses, and related products produced by
its members; and
WHEREAS , PROCESSOR wishes to participate with other members
(collectively the “Members”) and pooled contract
patrons (“Patrons”) of MIDWEST in developing and
maintaining a dependable market for certain products produced by
PROCESSOR; and
WHEREAS , MIDWEST and PROCESSOR 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 the PROCESSOR
and MIDWEST herein, MIDWEST and PROCESSOR agree as
follows:
1. Appointment of MIDWEST as Sales Agent . PROCESSOR
appoints and designates MIDWEST to act as its sole worldwide agent
in the sale and marketing of the following products (hereinafter
collectively the “Co-Products”) produced by PROCESSOR
during the term of this Agreement:
(a)
Beet pulp;
(b)
Molasses;
(c)
Separator Molasses
Solubles;
(d)
Concentrated Separator
By-Product; and
(e)
Any other product for which
the Members of MIDWEST have, by unanimous vote, created a separate
pool.
MIDWEST
accepts such appointment and agrees to act as the sales agent and
pool administrator in accordance with the terms of this Agreement.
PROCESSOR agrees that MIDWEST may employ all such persons and
agencies as it determines to be necessary to carry out its
obligations under this Agreement. MIDWEST agrees, and is hereby
empowered by PROCESSOR, to sell in its own name, and pass title to,
all Co-Products produced by PROCESSOR during the term of this
Agreement to such third party purchasers (hereinafter
“Purchaser” or “Purchasers”), in such
markets, at such time or times, at such place or places, in such
manner and on such prices or terms as MIDWEST determines to be in
the best interests of PROCESSOR and the Members and Patrons of
Midwest. It is understood and agreed that this Agreement applies to
all Co-Products produced by PROCESSOR in any state or
location.
2. Billing and Collection . All sales made by
MIDWEST shall be billed on invoices of MIDWEST and all receipts
shall be collected by MIDWEST.
3. Product Pools . MIDWEST and PROCESSOR agree that
the Co-Products to be sold by MIDWEST hereunder shall be pooled for
each crop year with products of the Members of MIDWEST. Separate
pools shall be maintained for each of the Co-Products. Additional
pools may be established by unanimous agreement of the Members of
MIDWEST to market new or related products developed by the Members
and Patrons. As sales are made, the proceeds received by MIDWEST
from the sale of the Co-Products received from PROCESSOR shall be
deposited into the appropriate pool, and shall be credited to
PROCESSOR and the Members on the basis of their respective pro rata
shares, as defined below in this Section 3 (the “Pro-Rata
Shares”), of the net proceeds of each sale. PROCESSOR’s
share of net proceeds as defined in Section 5 hereof and after
adjustments for advances paid under Section 6 hereof shall be
distributed to PROCESSOR by MIDWEST as rapidly as collection and
accounting procedures permit.
With
respect to each pool year covered by this Agreement, distributions
of the net proceeds shall initially be based on MIDWEST’S
best estimate of the amount of Co-Product anticipated to be
produced by each participant in the pool, and shall be adjusted by
MIDWEST periodically as production figures are more precisely
determined. Accordingly, the Pro-Rata Share of PROCESSOR for each
product pool shall be initially equal to a fraction with
PROCESSOR’s estimated annual production of that product to be
pooled as the numerator and total estimated annual pool production
of that product for PROCESSOR and the other MIDWEST Members and
Patrons as the denominator. As soon as the processing campaigns are
concluded, and exact production is determined, precise Pro-Rata
Shares shall be established and any appropriate adjustments shall
be made among the pool participants.
4. MIDWEST’s Books and Records . MIDWEST
shall keep accurate records of sales and distribution of pool
proceeds in accordance with sound and generally accepted accounting
practices. Said records shall be at all reasonable times fully
available for inspection by PROCESSOR. All records of the pools
shall be audited annually by MIDWEST’s regular Independent
Certified Public Auditors and the Audit report made available to
PROCESSOR.
5. Definition of Net Proceeds . The net proceeds for
each product pool shall be defined as the gross sales from such
pool by MIDWEST, less:
(a) All costs, charges or expenses directly
attributable to the sale of the Co-Product;
(b)
All costs of transportation
and handling of the Co-Product, including storage costs incurred by
MIDWEST;
(c)
Insurance premiums paid by
MIDWEST;
(d) State feed inspection and all other fees and taxes
incurred in the marketing of the Co-Product;
(e)
All other direct and indirect
charges or expenses, including administrative and overhead,
attributable to the sale of the Co-Product in the operation of the
product pools; and
(f)
All losses incurred by MIDWEST
as a result of uncollectible accounts receivable shall be allocated
to the appropriate product pool and shall be regarded as a
marketing expense in determining the net proceeds of that product
pool.
6. Budget and Advance of Marketing Costs . MIDWEST
shall prepare a monthly budget or estimate of all direct and
indirect marketing costs for each product pool. Each Member or
Patron involved in the pool shall pay in advance its estimated
Pro-Rata share of such marketing costs for the month. In the
alternative, the PROCESSOR authorizes MIDWEST to borrow funds
pursuant to its bank line of credit to pay direct and indirect
marketing costs, provided that the Members and Patrons shall
reimburse MIDWEST for the marketing expenses incurred during the
previous month no later than the 8 th business day of
the following month.
7. Product Warranties and Quality Standards; Handling
of Product of Substandard Quality . MIDWEST shall furnish
to PROCESSOR from time to time with Purchaser specifications for
Co-Products prescribing standards and procedures for quality
control, storing and shipping of such product. Initially such
standards shall be those set forth on Schedule “A”
attached hereto. PROCESSOR shall observe and comply with any such
specifications furnished by MIDWEST. In addition, all Co-Products
delivered to or at the order of MIDWEST shall conform to quality
and other standards that are prescribed by applicable state and
federal rules and regulations.
Co-Product
of substandard quality, as determined by MIDWEST, shall, on the
joint agreement of PROCES
