HAWAIIAN SUGAR TRANSPORTATION COMPANY
STANDARD SUGAR MARKETING CONTRACT
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 1
ARTICLE II - OBLIGATION TO DELIVER AND
RECEIVE SUGAR 4
ARTICLE III - DELIVERY OF SUGAR 4
SECTION 3.01 PLACE OF DELIVERY AND
DELIVERY COSTS 4
SECTION 3.02 DELIVERY SCHEDULES 5
SECTION 3.03 MANNER OF DELIVERY 5
SECTION 3.04 TRANSFER OF TITLE AND
RISK OF LOSS 5
ARTICLE IV - WEIGHING AND QUALITY DETERMINATIONS 6
SECTION 4.01 WEIGHT 6
SECTION 4.02 QUALITY DETERMINATIONS,
PREMIUMS AND DISCOUNTS 6
SECTION 4.03 TEST PERIODS 6
ARTICLE V - PAYMENT FOR SUGAR 7
SECTION 5.01 SALE OF RAW SUGAR 7
SECTION 5.02 PAYMENT FOR SUGAR 7
SECTION 5.03 CAPITAL RESERVES 9
SECTION 5.04 OVERPAYMENTS 10
SECTION 5.05 METHOD OF PAYMENT 10
SECTION 5.06 AUDITOR 10
ARTICLE VI - FORCE MAJEURE 10
SECTION 6.01 FORCE MAJEURE 10
SECTION 6.02 NOTICE 10
ARTICLE VII - THIRD PARTY BENEFICIARY 11
SECTION 7.01 INTENDED BENEFICIARY 11
SECTION 7.02 AMENDMENT AND WAIVER 11
ARTICLE VIII - GENERAL 11
SECTION 8.01 TERM 11
SECTION 8.02 ARBITRATION 11
SECTION 8.03 MISCELLANEOUS 13
STANDARD SUGAR MARKETING CONTRACT
THIS STANDARD SUGAR MARKETING CONTRACT (this "Contract"),
dated as of June 4, 1993, is made between Hawaiian Sugar
Transportation Company, Inc., an agricultural cooperative
association organized under the laws of the State of Hawaii
(the "Association"), and Oahu Sugar Company, Limited a Hawaii
corporation organized under the laws of the State of Hawaii
(the "Producer").
RECITALS
WHEREAS, the Association is organized to market raw sugar
produced from sugarcane grown in the State of Hawaii and the
byproducts thereof for the producers thereof on a cooperative
basis;
WHEREAS, the Producer is a producer of raw sugar from
sugarcane grown in the State of Hawaii;
WHEREAS, concurrently herewith the Association is entering
into an Agreement for the Delivery and Sale of Raw Sugar with
California and Hawaiian Sugar Company, a corporation organized
under the laws of the State of California ("C&H"), pursuant to
which the Association has agreed to sell raw sugar to C&H (the
"C&H Raw Sugar Agreement");
WHEREAS, C&H and A&B-Hawaii, Inc., a Hawaii corporation
("ABHI"), the Producer and each of the other principal
producers of raw sugar from sugarcane grown in the State of
Hawaii (the "Principal Producers") are concurrently herewith
entering into a Purchase Agreement pursuant to which the
Producer has agreed to enter into this Contract;
WHEREAS, each of the Principal Producers is concurrently
herewith also entering into a Standard Sugar Marketing
Contract with the Association in substantially the form of
this Contract (the "Standard Sugar Marketing Contract"); and
WHEREAS, the Producer desires to sell and deliver, and the
Association desires to purchase and receive, raw sugar on the
terms and conditions set forth below;
NOW THEREFORE, in consideration of the premises and of the
mutual covenants and agreement herein contained, the
Association and the Producer hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS.
As used in this Contract, the following terms shall have
the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Business Day" shall mean any Day on which commercial banks
in San Francisco, California and Honolulu, Hawaii are required
by law to be open for business.
"C&H" shall have the meaning set forth in the third recital
hereof.
"C&H Raw Sugar Agreement" shall have the meaning set forth
in the third recital hereof.
"Contract Year" shall mean a calendar year.
"Event of Force Majeure" shall mean an event that causes a
permanent or temporary interruption in, on the one hand, the
sale and delivery of Sugar hereunder by the Producer or, on
the other hand, the purchase and receipt of Sugar hereunder by
the Association, which is beyond the reasonable control of the
Producer or the Association, respectively, and could not, by
the exercise of due diligence, have been avoided by the
Producer or the Association, respectively, and shall include,
without limitation:
(a) an act of God, including,
without limitation, fire, flood,
earthquake, landslide, storm, hurricane,
typhoon, epidemic, an influx of pests
or similar occurrence;
(b) war, whether declared or
undeclared, blockade, port closing,
revolution, insurrection, civil
disturbances, sabotage, or acts of
public enemies;
(c) strike, boycott, lockout or
other labor disturbance;
(d) explosion, breakage, or other
damage to or failure or breakdown of
facilities or equipment related to, in
the case of the Producer, the growing or
processing of sugarcane by the Producer
or, in the case of the Association, the
storage or transporting of raw sugar by
the Association, the storage or
transporting of raw sugar by the
Association (including the loss or
substantial impairment of the sugar
delivery vessels owned, controlled or
regularly employed by the Association);
(e) power failure, unavailability
of ocean transportation, shortage or
lack of water, fuel or materials
resulting from another Event of Force
Majeure or the acts or omissions of a
person or entity not under the control
or direction of the Producer or the
Association, as the case may be; and
(f) an order, judgment, ruling,
decision or other act or failure to act
of any governmental, civil or military
or judicial to act of any governmental,
civil or military or judicial authority,
including, without limitation, any
adoption of, or change in, any law,
regulation or other legal requirement.
"Final Net Price Per Pound" shall refer to the payment
described in Section 5.02(d).
"Final Payment" shall refer to the payment described in
Section 5.02(d).
"Initial Delivery Schedule" shall have the meaning set
forth in Section 3.02(a).
"Initial Per Unit Allocation" shall refer to the payments
described in Section 5.02(a)
"Molasses" shall refer to the final or blackstrap molasses
produced, by or for the account of a Patron in connection with
the production of raw sugar by or for the account of such
Patron.
"Patrons" shall mean all of the producers of raw sugar from
sugarcane grown in the State of Hawaii, including the
Producer, who are parties to Standard Sugar Marketing
Contracts.
"Prime Rate" shall mean the "prime" or "base" rate
announced from time to time by Bank of America N.T. & S.A. at
its principal office in San Francisco, California in respect
of 90-day loans to its corporate borrowers.
"Producer's Customary Raw Sugar Terminal" shall have the
meaning set forth in Section 3.01(a).
"Raw Sugar Terminal" shall refer to each of the raw sugar
terminals located in Hawaii which heretofore has been used by
C&H to store raw sugar.
"Raw Value" of any quantity of Sugar shall mean its
equivalent in terms of ordinary commercial raw sugar testing
96 degrees by the polariscope. This conversion is to be done
for Sugar testing more than 92 degrees by the polariscope by
multiplying (i) the number of pounds, avoirdupois, thereof by
(ii) the quantity obtained by adding (A) 0.93 to (B) the
quantity obtained by multiplying (X) 0.0175 by (Y) the number
of degrees and fractions of a degree of polarization above 92
degrees for such Sugar.
"Revised Delivery Schedule" shall refer to the schedules
described in Section 3.02(a) and Section 3.02(b).
"Standard Sugar Marketing Contract" shall have the meaning
set forth in the fifth recital hereof.
"Sugar" shall mean any grade or type of saccharine product
other than molasses produced from sugarcane grown in Hawaii.
"Sugar of a Contract Year" shall mean, for any Contract
Year, all Sugar produced by the Patrons to which the
Association has taken title in accordance with Section 3.04
during such Contract Year.
"Supplemental Per Unit Allocation" shall refer to the
payments described in Section 5.02(b).
"Test Period" shall mean any of the periods described in
Section 4.03.
"Total Payment" shall have the meaning set forth in Section
5.02(e).
ARTICLE II
OBLIGATION TO DELIVER AND RECEIVE SUGAR
(a) Basic Obligation. Unless otherwise set forth in a
rider attached hereto, for the term of this Contract the
Producer agrees to sell and deliver to the Association, and
the Association agrees to purchase and receive from the
Producer, all of the Sugar produced by the Producer from
sugarcane grown in the State of Hawaii. All Sugar delivered
to the Association shall be delivered in the form of raw
centrifugal cane sugar polarizing at not less than 94 degrees
and shall be in good order and sound condition.
(b) Limitation. Nothing in this Contract shall, however,
obligate the Producer to cultivate sugarcane or, except as set
forth in Section 3.02(c), to produce Sugar for sale to the
Association. Nor shall the Association have any liability
under this Agreement for failing to purchase and receive Sugar
if such failure arises from a default by C&H under the terms
of the C&H Raw Sugar Agreement. Further, if the C&H Raw Sugar
Agreement terminates during the term hereof, this Contract
shall be amended as appropriate.
ARTICLE III
DELIVERY OF SUGAR
SECTION 3.01 PLACE OF DELIVERY AND DELIVERY COSTS.
(a) Place of Delivery. All Sugar to be delivered by the
Producer pursuant to this Contract shall be delivered to the
Raw Sugar Terminal customarily used by the Producer (the
"Producer's Customary Raw Sugar Terminal"), or to such other
place or places within the State of Hawaii, as may be directed
by the Association.
(b) Delivery Costs. All costs incurred in delivering the
Producer's Sugar to the Association in accordance with
subsection (a) above shall be borne by the Producer, except
that if the Association shall direct the Producer to deliver
any portion of its Sugar to a place or places within the State
of Hawaii other than the Producer's Customary Raw Sugar
Terminal, then the Association shall charge or pay to the
Producer, as the case may be, an amount equal to the
difference between (i) the delivery costs for such Sugar from
the Producer's mill to the place of actual delivery and (ii)
the delivery costs which would have been incurred if the Sugar
had been delivered to the Producer's Customary Raw Sugar
Terminal. Such charge or payment with respect to delivery
costs incurred during any Test Period hereunder shall be set
forth together with supporting detail in a statement presented
by the Producer to the Association promptly following the end
of such Test Period, and shall be due and payable on the tenth
(10th) day of the month next following such Test Period.
(c) Emergency Storage. Whenever conditions make it
necessary in the judgment of the Association for Sugar to be
put into emergency storage in Hawaii, the Association may
direct the Producer to deliver its Sugar into emergency
storage facilities, which may include facilities at the
Producer's mill. All costs connected with the use of such
emergency storage shall be separately accumulated and shall be
apportioned among all of the Patrons of the Association on
such fair and equitable basis as may be agreed upon by the
Association and such Patrons.
SECTION 3.02 DELIVERY SCHEDULES.
(a) Initial and Revised Delivery Schedules. On or before
the first day of October and each Contract Year, the Producer
shall furnish the Association with a delivery schedule setting
forth the quantity of Sugar it expects to deliver to the
Association during each calendar week of the immediately
succeeding Contract Year (the "Initial Delivery Schedule").
On the next to the last Business Day of each calendar week the
Producer shall furnish the Association with an update of the
delivery schedule last furnished to the Association, with such
adjustments, if any, as may be appropriate to reflect new
information pertinent to the quantities of Sugar the Producer
expects to deliver in each calendar week of the Contract Year;
provided, however, that no adjustments shall be made to the
Sixteen Week Best Efforts Supply Commitment described in
Section 3.02(c) except as made necessary by an Event of Force
Majeure. Initial Delivery Schedules as updated are referred
to herein as "Revised Delivery Schedules".
(b) Delivery Schedules for 1993 Contract Year. On or
before the next to the last Business Day of the first calendar
week beginning after the date of this Contract, the Producer
shall furnish the Association with a delivery schedule setting
forth the quantity of Sugar it expects to delivery to the
Association during each calendar week of the 1993 Contract
Year. On the next to the last Business Day of each succeeding
calendar week of the 1993 Contract Year, the Producer shall
furnish the Association with updated delivery schedules
("Revised Delivery Schedules") conforming in all respects to
Revised Delivery Schedules as described in Section 3.02(a).
(c) Sixteen Week Best Efforts Supply Commitment. The
Producer shall use its efforts to deliver the Sugar scheduled
under a Revised Delivery Schedule for delivery during each of
the sixteen consecutive calendar weeks commencing with the
calendar week next following the week in which the Revised
Delivery Schedule is delivered to the Association.
(d) The Producer shall exercise due diligence and
reasonable care in the preparation of delivery schedules
hereunder and shall furnish the Association with such other
information as the Association may reasonably request
regarding the Producer's expected deliveries of Sugar to the
Association.
SECTION 3.03 MANNER OF DELIVERY.
(a) Suitable Vehicles. The Producer shall deliver all
Sugar to the Association in bulk and by vehicles equipped for
the transportation of raw sugar.
(b) Commingled Sugar. When Sugar produced by the Producer
is commingled with Sugar from other Patrons for transportation
to the designated point of delivery, the Producer's share of
any such shipment shall be determined by a method to be
mutually agreed upon by the Producer and the Association.
SECTION 3.04 TRANSFER OF TITLE AND RISK OF LOSS.
Notwithstanding any other provision hereof, title and risk
of loss to Sugar subject to this Contract shall pass from the
Producer to the Association: (i) when such Sugar is loaded by
the Producer aboard ground transportation equipment for
movement to the Producer's Customary Raw Sugar Terminal or any
alternative delivery point designated by the Association or
(ii) if emergency storage at the Producer's mill has been
authorized by the Association pursuant to Section 3.01(c), as
Sugar is put into such storage pursuant to the Association's
authorization. Upon such passage of title, all such Sugar
shall become the property of and shall be subject to the order
of the Association and any and all warehouse receipts or other
documents of title or accountability related to such Sugar
shall be delivered to and issued in the name of the
Association.
ARTICLE IV
WEIGHING AND QUALITY DETERMINATIONS
SECTION 4.01 WEIGHT.
The Association shall weigh, or cause to be weighed, all
Sugar delivered to the Association by the Producer. The
methods of weighing shall be in accordance with the
established practice for each place of delivery, or as may be
agreed upon between the Association and the Patrons. Weighing
shall be subject to check by representatives of the Producer.
SECTION 4.02 QUALITY DETERMINATIONS
PREMIUMS AND DISCOUNTS.
(a) Sampling and Testing. All Sugar delivered by the
Producer to the Association shall be sampled in accordance
with the procedures last employed by C&H as of the date of
this Contract and shall be tested by the Association or its
designee in accordance with the procedures set forth in the
C&H Raw Sugar Agreement, as amended from time to time.
(b) Premiums and Discounts. Quality premiums and
discounts for all Sugar delivered by the Producer to the
Association shall be calculated in accordance with the
provisions of the C&H Sugar Agreement, as amended from time to
time, except that the "Basis Price" for purposes of such
calculations shall mean the weighted average of the Basis
Prices determined under the C&H Raw Sugar Agreement with
respect to all Sugar delivered by the Association to C&H under
such Agreement. A premium for Aiea Quality Raw Sugar shall be
paid only on Aiea Quality Raw Sugar that is delivered to C&H's
Aiea refinery pursuant to the authorization or direction of
the Association. The Association shall allocate among the
Patrons the opportunity to deliver Aiea Quality Raw Sugar to
the C&H Refinery on a fair and equitable basis that takes into
account the ability to produce Aiea Quality Raw Sugar in a
manner that will enable the Association to fulfill its
obligations under the C&H Raw Sugar Agreement and the costs to
the Association of fulfilling such obligation.
(c) Costs. The cost of all test and determinations
required by this Section 4.02 shall be borne by the
Association.
(d) Commingling. The quality determination referred to in
this Section shall be made before the Producer's Sugar is
commingled with the Sugar of other Patrons. However, if more
than one Patron shall have its sugarcane ground at the same
mill, the sugarcane may at the option of such Patrons be
commingled prior to grinding or milled separately and the
juices and other after-products therefrom commingled. In such
case, the quality determinations referred to in the Section
4.02 shall be made with respect to the resulting commingled
Sugar and the Sugar of each of the Patrons whose sugarcane or
sugarcane juices or other after-products were commingled shall
be deemed equal in quality for purposes of this Section.
SECTION 4.03 TEST PERIODS.
(a) Separate Determinations. Quality determinations shall
be made and premiums and discounts computed separately for the
Sugar delivered by the Producer to the Association in each of
the Test Periods in each Contract Year hereunder.
(b) Twelve Periods. There shall be twelve Test Periods in
each Contract Year. The first Test Period in each Contract
Year shall commence on January 1 and end at midnight on the
Saturday preceding the last Sunday of such month provided,
however, that in the case of the 1993 Contract Year, the first
Test Period shall commence on the date hereof and end at
midnight on the Saturday preceding the last Sunday of the
month in which such Test Period commences. Each succeeding
Test Period shall commence at the end of the preceding Test
Period and continue until midnight on the Saturday preceding
the last Sunday of the next succeeding calendar month;
provided, however, that the last Test Period in each Contract
Year shall commence at midnight on the Saturday preceding the
last Sunday in November and continue through December 31 of
such year.
(c) Advice to Producer. Quality determinations shall be
made and discounts and premiums computed for each Test Period
with respect to all Sugar of the Producer delivered to the
Association during such Test Period. Promptly following the
close of each Test Period there shall be furnished by the
Association to the Producer full information as to the
quantity and quality of all of the Sugar of the Producer for
which quality determinations were made during such Test
Period.
ARTICLE V
PAYMENT FOR SUGAR
SECTION 5.01 SALE OF RAW SUGAR.
The Producer acknowledges that all of the raw Sugar
delivered to the Association by the Producer and the other
Patrons shall be sold by the Association under or subject to
the terms of the C&H Raw Sugar Agreement.
SECTION 5.02 PAYMENT FOR SUGAR.
The Association shall make payment to the Producer, as full
return and payment for all Sugar of the Contract Year
delivered by the Producer to the Association, in amounts and
at times as follows:
(a) Initial Per Unit Allocation. The Association shall, at
the end of each Test Period, compute the total number of
pounds, Raw Value, of all Sugar delivered by the Producer to
the Association during such Test Period. In addition, at such
time the Association shall also estimate the Final Net Price
Per Pound (as described in Section 5.02(d)) to be realized
from all sales of Sugar during the Contract Year. Ninety
percent (90%), of the amount so determined or such larger or
smaller percentage as the Board of Directors of the
Association, in its sole discretion, may from time to time
determine, shall be the Initial Per Unit Allocation per pound,
Raw Value, payable by the Association with respect to all
Sugar of the Contract Year delivered during such Test Period.
The product of such Initial Per Unit Allocation multiplied by
the number of pounds, Raw Value, of Sugar delivered by the
Producer to the Association during such Test Period shall be
paid on the tenth (10th) day of the month following the close
of the Test Period.
(b) Supplemental Per Unit Allocations. Supplemental Per
Unit Allocations may be paid to the Producer from time to time
with respect to Sugar of the Contract Year which has
theretofore qualified for an Initial Per Unit Allocation in
such amounts and at such times during each Contract Year as
determined in the sole discretion of the Board of Directors of
the Association provided that in the judgment of the
Association, such payments can be made without risk of
overpayment to the Patrons and without prejudicing the
financial position of the Association.
(c) Equal Per Unit Allocations. Notwithstanding
subsections (a) and (b)above, Initial Per Unit Allocations and
Supplemental Per Unit Allocations shall be paid to the Patrons
in such manner that the aggregate amount of Initial Per Unit
Allocations and Supplemental Per Unit Allocations paid to each
Patron, including the Producer, per pound of Sugar, Raw Value,
shall at all times be as nearly equal as is practicable;
provided, however, that if the Board of Directors determines
that payment to the Producer of aggregate Initial Per Unit
Allocations and Supplemental Per Unit Allocations per pound of
Sugar, Raw Value, equal to such allocations per pound paid to
the other Patrons may create a risk of overpayment to the
Producer, it may direct that Initial Per Unit Allocations or
Supplemental Per Unit Allocations otherwise payable to the
Producer be reduced so as to avoid such overpayment, provided
that to the extent any such reduction exceeds the overpayment
that could have occurred but for such reductions, the Producer
shall be paid at the time of Final Payment such excess
together with interest at a rate equal to the Prime Rate.
(d) Final Payment. Within 60 days following the date on
which the Association shall complete the sale of all of the
Sugar of the Contract Year for each Contract Year, the Final
Payment for the Sugar of the Contract Year shall be made to
the Producer in an amount computed as follows:
(i) The net sum of all quality premiums and
discounts applicable to all Sugar of the Contract Year,
calculated in accordance with Section 4.02, shall be
determined. If the total of such premiums and discounts is a
negative figure, the sum thereof shall be added to the Total
Payment for Sugar of the Contract Year as determined pursuant
to subsection (e) below. If the total of such premiums and
discounts is a positive figure, the sum thereof shall be
subtracted from the Total Payment for Sugar of the Contract
Year. In either event, the resulting amount shall then be
divided by the number of pounds of Sugar of the Contract Year
(the "Final Net Price per Pound").
(ii) Such Final Net Price Per Pound shall then be
multiplied by the number of pounds of Sugar of the Contract
Year delivered by the Producer to the Association. From the
result thereof there shall then be deducted:
(A) The aggregate amount of all Initial Per
Unit Allocations paid by the Association to the Producer
with respect to Sugar of the Contract Year; and
(B) The aggregate amount of all Supplemental
Per Unit Allocations paid by the Association to the
Producer with respect to Sugar of the Contract Year.
(iii)The amount so determined shall, subject
to the adjustments required by subsections (f) and (g)
below, be the Final Payment due from the Association to
the Producer with respect to the Sugar of the Contract
Year.
(e) Total Payment. The total payment to be made by the
Association for all of the Sugar of any Contract Year to all
Patrons who delivered Sugar to the Association pursuant to a
Standard Sugar Marketing Contract during such year shall be
calculated as follows:
(i) There shall first be added together:
(A) The gross proceeds received by the
Association from the sale of all Sugar of the Contract
Year. In determining the gross proceeds from the sale of
Sugar of the Contract Year the Association shall consider
that all sales of Sugar are sales of Sugar of a given
Contract Year until such time as the total amount of Sugar
sold or otherwise accounted for and not allocated to a
prior Contract Year is equivalent to the total amount of
Sugar of the given Contract Year. Sale of Sugar
thereafter shall be considered to be sales of Sugar of the
subsequent Contract Year.
(B) All other receipts of the Association
in the nature of income received or accrued during the
Contract Year, which, insofar as practicable by the
application of proper accounting principles, are
attributable to Sugar of the Contract Year, but not
including any proceeds from the sale or other disposition
by the Association of molasses.
(ii) From the sum of the items described in
subsection (i) above, there shall be deducted all marketing,
operating distribution, transportation and other expenses of
the Association of whatever kind or nature, whether paid or
accrued, including, without limitation, depreciation, bonuses,
contribution to pension, insurance and disability plans,
charitable contributions, and all other types of expenses
which by the application of proper accounting principles are
allocable to Sugar of the Contract Year.
The remainder determined pursuant to the foregoing
calculation shall constitute the Total Payment for the Sugar
of the Contract Year.
(f) Terminal Costs. The Association shall determine,
separately for each Raw Sugar Terminal, all costs incurred
during each Contract Year for receiving, weighing, sampling,
sorting, loading, wharfage, loading laytime, and any other
expenses relating to Sugar of the Contract Year after its
delivery at such terminal and prior to completion of loading
and the commencement of ocean transportation. The sum so
determined shall be dived by the number of pounds of Sugar of
the Contract Year delivered at each terminal by all Patrons.
If the amount per pound so computed for any Raw Sugar Terminal
exceeds the Contract Year's average of such costs for all Raw
Sugar Terminals, then the Final Payment for all Sugar of the
Contract Year delivered at such terminal shall be reduced by
the amount of such excess, and if the amount per pound so
computed for any Raw Sugar Terminal is less than the average
of such costs for all Raw Sugar Terminals, then the Final
Payment for all Sugar of the Contract Year delivered at such
terminal shall be similarly increased. For purposes of the
foregoing computations, Sugar delivered pursuant to Section
3.01 to a place other than the Producer's Customary Raw Sugar
Terminal shall be deemed to have been delivered to such
terminal and the costs incurred with respect to such terminal
shall include the costs that would have been incurred had such
sugar actually been delivered to the terminal.
(g) Quality Premiums and Discounts. The quality premiums
and discounts applicable to the Producer's Sugar of a Contract
Year, calculated in accordance with Section 4.02, shall be
accumulated until the time for Final Payment for Sugar of the
Contract Year, at which time the sum thereof, after adjustment
to reflect the payment of Initial and Supplemental Per Unit
Allocations on a Raw Value basis, shall be added to the amount
of the Final Payment to be made by the Association to the
Producer, or shall be deducted by the Association from the
Final Payment otherwise payable to the Producer, as the case
may be.
SECTION 5.03 CAPITAL RESERVES.
If during any Contract Year the Board of Directors of the
Association has determined to withhold a sum from the members
of the Association for the purpose of a capital reserve, as
permitted by the Bylaws of the Association, then the portion
of such sum allocable to the Producer shall be subtracted from
such payment or payments due hereunder to the Producer for
such Contract Year as the Board of Directors of the
Association may determine. The Association shall maintain
records of all sums so withheld by it from the patronage
allocation of the Producer and shall advise the Producer in
writing of the dollar amount of any sum so withheld.
SECTION 5.04 OVERPAYMENTS.
If for any reason the aggregate amount of the Initial Per
Unit Allocations and the Supplemental Per Unit Allocations
paid to the Producer for Sugar of a Contract Year exceeds the
total net amount due to such Producer for such Contract Year
as computed under Section 5.02, less any sum directed to be
withheld from such Producer pursuant to Section 5.03 for
capital reserves of the Association, then the Association may,
at its option, either (i) invoice such Producer for the amount
of the overpayment so determined and the Producer shall
promptly, and in any event with five (5) Business Days, pay
the Association such amount following receipt of such invoice
or (ii) deduct such overpayment from any amount or amounts
payable to the Producer with respect to Sugar of the next
succeeding Contract Year, or both.
SECTION 5.05 METHOD OF PAYMENT.
The Association shall make all payments by check or wire
transfer; provided, however, that at all times the Association
shall have the option of making any payment due hereunder, in
whole or in part, by means of an unsecured note due within
thirty days, bearing a rate of interest to be mutually agreed
upon between the Association and the Producer.
SECTION 5.06 AUDITOR.
The Producer may at his own expense employ a certified
public accountant satisfactory to the Association to audit
such accounts of the Association as may be necessary in order
to ascertain the correctness of an amounts allocated by the
Association to the Producer under this Contract. The
Association agrees to extend necessary facilities to such
auditor.
ARTICLE VI
FORCE MAJEURE
SECTION 6.01 FORCE MAJEURE.
In the event that an Event of Force Majeure shall prevent
the Producer or the Association from taking any action
required hereunder, then the Producer's or the Association's
obligations, as the case may be, shall be suspended for the
duration of such event.
SECTION 6.02 NOTICE.
If the Producer or the Association shall be prevented from
performing its obligations hereunder in full or in part as a
result of the occurrence of an Event of Force Majeure, such
party shall give prompt notice thereof to the other (but in no
event more than ten (10) days after the disabled party is
aware that its performance will be prevented) which notice
shall specify the nature of such occurrence, the steps being
taken and intended to be taken to remove the disability, and
an estimate of the date when full performance will be resumed
hereunder. The disabled party shall keep the other party
informed of a material developments with respect to such Event
of Force Majeure.
ARTICLE VII
THIRD PARTY BENEFICIARY
SECTION 7.01 INTENDED BENEFICIARY.
The Producer and the Association acknowledge and agree the
C&H is an intended third party beneficiary of this Contract
and shall be entitled to enforce any and all obligations of
the Producer under this Contract.
SECTION 7.02 AMENDMENT AND WAIVER.
This Contract, including the riders and exhibits hereto, if
any, may be amended, any right, obligation or condition
hereunder waived, and any departure from any provision hereof
permitted, only upon the prior written consent of C&H, which
consent shall not be unreasonably withheld.
ARTICLE VIII
GENERAL
SECTION 8.01 TERM.
The term of the Contract shall commence June 4, 1993 and
shall end on June 3, 2003.
SECTION 8.02 ARBITRATION.
(a) General. Except for any controversy or disagreement
arising out of or relating to the interpretation or
enforcement of this Section 8.02 any controversy or
disagreement arising out of or relating to this Contract or
any breach hereof shall be submitted by the parties to
arbitration in Honolulu, Hawaii, under the Commercial
Arbitration Rules of the American Arbitration Association for
commercial arbitration and, to the extent not inconsistent
therewith or with the terms hereof, the laws of the State of
Hawaii. Such arbitration shall be undertaken by three
disinterested arbitrators (the "Arbitrators") one of whom
shall be selected by the Producer, one by the Association, and
one of whom shall be the chairman of the arbitral tribunal and
shall be chosen by agreement between the first and second
Arbitrators. The Producer and the Association shall select
such Arbitrators within fifteen (15) days after the party
desiring arbitration has notified the other party in writing.
Such notice demanding arbitration shall state specifically the
question or questions to be submitted for decision or the
point or points in controversy and shall include such party's
selection of an Arbitrator. If, at the expiration of fifteen
(15) days from receipt of such notice, the party receiving
such notice has not informed the party demanding the
arbitration of its selection of a second arbitrator, the party
making the demand may make such selection. The first and
second Arbitrators shall select a third Arbitrator within
fifteen (15) days from the date of the appointment of the
second Arbitrator. If the first and second Arbitrators cannot
agree as to a third Arbitrator, such third Arbitrator may be
appointed upon ten days' notice upon application of either
party to the chief or presiding judge, or judge acting as
chief of presiding judge, of the First Circuit Court of the
State of Hawaii. The arbitral tribunal shall set the date,
time and place for each hearing, shall give to each of the
parties at least 10 days' advance written notice of the date,
time and place of the initial hearing and shall proceed
without delay to hear and determine the matters in dispute.
Each of the parties hereto may be represented by counsel or
other authorized representative at any hearing. The party
intending to be so represented shall notify the Arbitrators
and the other party of the name and address of the
representative at least three days prior to the date set for
the hearing. Such arbitration shall be conducted in such
manner as the Arbitrators shall determine, consistent with the
above referred to Commercial Arbitration Rules. A written
transcript of the proceedings shall be prepared at the expense
of the party requesting such transcript, if any, or if both
parties hereto shall so request, they shall share the cost
equally.
(b) Expenses. Each party shall bear any expenses incurred
by it prior to arbitration, including legal and accounting
fees, if any, with respect to any disagreement hereunder. If
the matter is submitted to arbitration, the Arbitrators shall
designate the party or parties to bear the expenses of such
arbitration and/or the respective amounts to be borne by each
party. In making such an allocation of costs, the Arbitrators
shall be expressly instructed by the parties that, absent
extraordinary circumstances, the prevailing party in such a
proceeding shall be entitled to reimbursement for its
reasonable attorneys' fees and other reasonable expenses
incurred in connection therewith by the non-prevailing party.
(c) Remedies. The Arbitrators shall have the authority to
resolve any dispute under this Contract that is submitted to
them, including, without limitation the right to determine (a)
whether any party is in breach of any of its obligations under
this Contract, (b) whether such breach has resulted in damage
to another party to this Contract (c) the amount of money
necessary to compensate such damage, and (d) any equitable
relief appropriate under the circumstances. The Arbitrators
shall render their written decision in respect of the
controversy at issue within 90 days after the date on which a
notice demanding arbitration is first given. The
determination of the Arbitrators as to any matter submitted to
arbitration shall be conclusive and binding upon the parties
hereto. Each party shall immediately make such changes in the
conduct of such party's business or such payment of damages,
as the case may be, as required by such determination and
award, if any.
(d) Enforcement. Judgment upon any award rendered by the
Arbitrators may be entered in any court having jurisdiction
over the parties and the subject matter. In the event that
either party hereto shall be required to take any action to
enforce any such judgment, such party shall be entitled to
reimbursement for its reasonable attorneys' fees and other
reasonable expenses incurred in connection therewith by the
non-prevailing party.
(e) Discovery. Discovery in such proceedings shall be
limited to the taking of depositions and document production.
Unless ordered by the Arbitrators, the submission of
interrogatories will not be permitted. The Arbitrator shall
have the power to enforce the discovery rights and obligations
set forth in this Section. The books and papers of the
parties hereto, so far as they relate to matters submitted to
arbitration, shall be open to the investigation of the
Arbitrators.
(f) Chairman. In an arbitration proceeding conducted
pursuant to this Section, the chairman of the arbitral
tribunal shall be a citizen of the United States who shall (i)
be admitted to practice law in one of the states of the United
States, (ii) shall have had at least 20 years' experience as
an attorney or a judge and (iii) have expertise in the area of
commercial law.
(g) Notice to C&H. The party initiating an arbitration
shall give C&H a copy of the notice demanding arbitration at
the same time it serves the other party with such notice. C&H
shall be entitled to intervene in such arbitration and, to the
extent its interest are affected, to participate in such
arbitration.
(h) Cooperation. The parties hereto agree that they will
cooperate in good faith in such proceedings in order to work
toward the prompt resolution of the subject dispute.
SECTION 8.03 MISCELLANEOUS
(a) Interpretation of Agreement. Any reference in this
Contract to an Article, a Section, an Appendix or an Exhibit
is a reference to an article hereof, a section hereof, an
appendix hereto or an exhibit hereto, respectively, and to a
subsection or a clause is, unless otherwise stated, a
reference to a subsection or a clause of the Section or
subsection in which the reference appears. The words
"hereof", "herein", "hereto", "hereunder" and the like mean
and refer to this Contract as a whole and not merely to the
specific Article, Section, subsection or clause in which the
respective word appears. References to agreements and other
contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are
not prohibited by the terms of this Contract. References to
statutes or regulations are to be construed as including all
statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation referred to. The captions
and headings used in the Contract are for the convenience of
reference only and shall not affect the construction of this
Contract.
(b) Execution and Effect of Amendments. If approved by not
less than sixty-seven percent (67%) of the votes of the
Patrons who are parties to Standard Sugar Marketing Contracts,
with such Patrons voting as hereinafter described, and if
approved by the written consent of C&H, as provided under
Section 7.02, the Board of Directors of the Association may
adopt amendments so approved to all, and not less than all, of
the Standard Sugar Marketing Contracts, including this
Contract; provided, however, that if the Association enters
into any contract or agreement contingent on the continuance
of any of the terms of the Standard Sugar Marketing Contract,
then, so long as such contract or agreement remains in effect,
the Standard Sugar Marketing Contract shall not be amended in
any way that might be in violation of any commitment of the
Association in connection with such contract or agreement; and
provided further that no amendment extending the period of,
changing materially the payment provisions of, or imposing
supply commitments under the Standard Sugar Marketing Contract
shall be adopted without the approval of all of the Patrons
who are parties to the Standard Sugar Marketing Contracts. In
voting on any proposed amendment to the Standard Sugar
Marketing Contract, each Patron shall be entitled to one vote
for each Raw Value ton of Sugar of the preceding two (2)
Contract Years credited to such Patron in the Association's
final accounting for such Contract Years. If a Patron was not
a party to the Standard Sugar Marketing Contract for the whole
of such period, it shall be entitled to votes equal to the
product of the tons of Sugar which were supplied by such
Patron, during the immediately preceding twelve months
multiplied by two (2). Upon the adoption of any amendment to
the Standard Sugar Marketing Contract, in the manner provided
herein, the provisions of such amendment shall, from and after
the specified effective date of such amendment, be treated for
all purposes as provisions of the Standard Sugar Marketing
Contract, and shall be binding on all parties to the Standard
Sugar Marketing Contract.
(c) Entire Agreement. This Contract, including the riders
and exhibits hereto, if any, together with the provisions of
the C&H Raw Sugar Agreement and the other agreements and
documents expressly referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect
of the transactions contemplated by such agreements. There
are no restrictions, promises, inducements, representations,
warranties, covenants or undertakings, other than those
expressly set forth or referred to herein or therein. This
Contract supersedes all prior agreements and understandings
between the parties with respect to such transactions.
(d) Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto (or C&H) to
the other party hereto (or to C&H) shall be in writing, shall
be deemed to have been duly given or delivered when (i)
delivered personally, (ii) telecopied (receipt confirmed, with
a copy sent by certified or registered mail), (iii) telexed
(and the appropriate answer back received, with a copy sent by
certified or registered mail), or (iv) sent by certified or
registered mail, postage prepaid, return receipt requested, or
by Federal Express or other overnight delivery service, to the
address of the party (or C&H) set forth below or to such
address as the person to whom notice is to be given shall
provide in a written notice to the other party (or C&H).
(i) To the Association:
Hawaiian Sugar Transportation Company
c/o C. Brewer and Company, Limited
827 Fort Street
Honolulu, Hawaii 96813
Telecopier: (808) 544-6182
Telephone: (808) 536-4461
Attention: President
with copies to:
Hawaiian Sugar Transportation Company
830 Loring Avenue
Crockett, CA 94525-1199
Telecopier: (510) 787-3196
Telephone: (510) 787-4242
Attention: Vice President - Operations
(ii) To the Producer: c/o Amfac/JMB Hawaii, Inc.
900 N. Michigan Avenue
Chicago, IL 60611
Telecopier:_____________________
Telephone:______________________
Attention: President
with copies to:
Telecopier:_____________________
Telephone:______________________
Attention: General Counsel
(iii) To C&H:
C&H Sugar Company
830 Loring Avenue
Crockett, CA 94525-1199
Telecopier: (510) 787-2058
Telephone: (510) 787-4205
Attention: President
With copies to:
C&H Sugar Company
830 Loring Avenue
Crockett, CA 94525-1199
Telecopier: (510) 787-2058
Telephone: (510) 787-4209
Attention: General Counsel
(e) No Strict Constructions. This Contract has been
prepared jointly by representatives of the parties hereto and
shall not be strictly construed against either party.
(f) Successors and Assigns. All the covenants and
provisions of this Contract by or for the benefit of the
Producer or the Association shall bind and inure to the
benefit of their respective successors and assigns; provided,
however, that no assignment of this Contract or any portion
hereof shall relieve the assigning party of any of its duties
or obligations hereunder. Neither party shall assign this
Contract without the written consent of the other party and
C&H.
(g) Severability. If any term, provision, covenant or
restriction of this covenant is held by a court of competent
jurisdiction or other authority of arbitral tribunal to be
invalid, illegal, void or unenforceable under applicable law,
such term, provision, covenant or restriction shall be
excluded from this Contract and the balance of the Contract
shall be interpreted as if such term, provision, covenant or
restriction were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by
law.
(h) Further Assurances. Each of the parties shall, without
further consideration, use reasonable efforts to execute and
deliver to the other such additional documents and take such
other action, as the other may reasonably request to carry out
the intent of this Contract and the transaction contemplated
hereby.
(i) Governing Law. This Contract shall be governed by, and
construed in accordance with, the internal laws of the State
of Hawaii (without reference to its conflict of law rules) as
applied to agreements among Hawaii residents entered into and
to be performed entirely within Hawaii.
(j) Counterparts. This Contract may be executed in any
number of counterparts, each of which when so executed shall
be deemed an original, and all of which taken together shall
constitute but one and the same agreement.
(k) Approval of Bylaws. The Producer agrees to be and is
bound by the Bylaws of the Association, including all
amendments thereto. In the event of a conflict between this
Agreement and the Bylaws, the terms of this Agreement shall
prevail with respect to the subject matter hereof.
DATE: June 4, 1993
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title: President
PRODUCER
[HAWAII GROWER]
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to by duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
OAHU SUGAR COMPANY, LTD.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
LIHUE PLANTATION COMPANY, LTD.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
KEKAHA SUGAR COMPANY, LTD.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
PIONEER MILL COMPANY, LIMITED
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
OLOKELE SUGAR COMPANY, LTD.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
MAUNA KEA AGRIBUSINESS CO., INC.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
KA'U AGRIBUSINESS CO., INC.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
WAIALUA SUGAR COMPANY, INC.
By:_____________________
Title:__________________
IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be duly executed as of the date first above
written.
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:_____________________
Title:__________________
PRODUCER
GAY & ROBINSON, INC.
By:_____________________
Title:__________________
STANDARD SUGAR MARKETING CONTRACT
RIDER 5.02
WHEREAS, the transfer before the close of the 1993 Contract
Year from the Association's Standard Sugar Transportation
Contract to the Association's Standard Sugar Marketing
Contract of the costs of ocean transportation of Sugar
delivered by the Patrons to the Association would result in
the Patrons bearing different per ton costs for the ocean
transportation of Sugar delivered to the Association depending
upon when during such year the Patrons delivered Sugar to the
Association;
WHEREAS, the Association and the Patrons desire that all
Sugar delivered to the Association during the course of a
Contract Year bear the same per on cost of ocean
transportation without regard to when within such year such
Sugar is delivered to the Association; and
WHEREAS, the desired allocation of ocean transportation
costs is in accordance with the past practice of the Hawaiian
sugar industry and is fair and equitable to all Patrons of the
Association;
THE PARTIES AGREE AS FOLLOWS:
The cost of ocean transportation of the Sugar of the
1993 Contract Year shall be borne by the Patrons,
including the Producer, on a pooled basis pursuant to
the existing Standard Sugar Transportation Contracts
between the Association and its Patrons. All amounts
payable under the Standard Sugar Transportation
Contract between the Producer and the Association with
respect to Sugar of the 1993 Contract Year shall be
deducted from amounts payable under this Contract. If
the Association does not require 1993 Contract Year
Sugar delivered by the Producer to be transported
pursuant to such Standard Sugar Transportation
Contract, the Association shall charge to the Producer
an amount equal to the cost of ocean transportation
which would otherwise have been borne by the Producer.
DATE:_________________
ASSOCIATION
HAWAIIAN SUGAR TRANSPORTATION COMPANY, INC.
By:____________________
Title:_________________
PRODUCER
[HAWAII GROWER]
By:____________________
Title:_________________