Exhibit 10.24
FIVE
YEAR AGREEMENT
BETWEEN
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(Shareholder)
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Growing
Unit:
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and
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Shareholder:
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AMERICAN CRYSTAL SUGAR
COMPANY
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(Company)
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1.
PLANTING AND DELIVERY
OBLIGATIONS . Shareholder agrees during
the Initial Term and any Renewal Term hereof to prepare land,
plant, replant, 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. Shareholder agrees to replant any
sugarbeets that are lost due to flooding, weather conditions or any
other cause, provided that such replanting can be reasonably
accomplished on or before June 10 of the then current crop year.
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 shall not be obligated to purchase
sugarbeets, and Shareholder agrees to destroy prior to August 15,
or such other date specified by the Company and communicated to
Shareholder, sugarbeets from all acres planted in excess of that
contracted pursuant to this Agreement. 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 policies that may be established from time to time by
Company related to rotation, destruction of damaged or diseased
sugarbeets, and/or other agronomic and operational matters.
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 prorate
delivery rights with regard to any crop to be delivered hereunder.
Any such proration shall be made 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 or a
larger than anticipated crop yield. A proration may be accomplished
on the basis of a percentage of stock acres, planted acres or any
other means determined by the Board of Directors to be fair and
equitable. Any 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.
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 15 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.
5.
TERM .
The initial term of this Agreement shall be for the crops to be
planted in 2008, 2009, 2010, 2011 and 2012 (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 party’s 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 by both parties with respect to such
final crop year.
6.
PAYMENT FOR SUGARBEETS
. Payment for sugarbeets delivered each crop
year shall be made as set forth in this Section 6 (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 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:
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(i)
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Hauling Allowance Program : Company
reserves the right to establish a hauling allowance program and in
connection therewith to allocate the cost of the 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.
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(ii)
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Pre-Pile Quality Premium Program :
Company reserves the right to establish a pre-pile quality premium
program as 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.
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(iii)
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Minimum Payment Allowance Program :
Company reserves the right to establish 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.
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(iv)
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Tare Incentive Program : Company
reserves the right to establish 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.
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(v)
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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 7 of this
Agreement. 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.
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(c)
Company reserves the right to establish a program to encourage
timely 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.
(d)
Company reserves the right to establish a freight charge program to
recover certain charges associated with the transportation of sugar
beets. The freight adjustment shall be charged to shareholders of
Company in a manner consistent with the program as approved from
time to time 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.
(e)
Company reserves the right to establish a program to encourage
shareholders to comply with pre-pile delivery policies. 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.
7.
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 Share
