Exhibit 10(a)
GROWERS AGREEMENT
(REVISED 3-08-96)
(Applicable to all Farmer-Grower-Stockholders
of Minn-Dak Farmers Cooperative)
This agreement is entered into between____________________________,
a farmer-grower-stockholder of Minn-Dak Farmers Cooperative, Wahpeton, North
Dakota, whose mailing address is:
__________________________________________________________________________, and
MINN-DAK FARMERS COOPERATIVE of Wahpeton, North Dakota.
This Growers Agreement provides as follows:
1. The Grower agrees to prepare the land, plant, care for, harvest and
deliver the product of _______ Units of stock times 1.35 acres of sugar beets
each year for the farming years commencing on January 1, 1996 and continuing for
a period of one (1) year. (Each Unit consists of one share of the Company's
Class A Preferred Stock, par value $105 per share, one share of the Company's
Class B Preferred Stock, par value $75 per share and one share of the Company's
Class C Preferred Stock, par value $76 per share). At the end of each "farming
year" the term of this agreement shall automatically be renewed for an
additional period of one (1) year so that at the commencement of each year of
farming, there shall be a term of one (1) year remaining, unless notice of
termination shall have been given by the Cooperative to the grower prior to the
beginning any farming year with the termination effective as of the end of that
year. For purposes of this agreement, a "farming year" shall commence on January
1 and run through December 31 of each year.
(a) The Grower agrees that in the planting of said sugar beets he will
follow a crop rotation plan which will be established by the Cooperative from
time to time.
(b) The Grower agrees that annually he will furnish and enter into an
annual requirement agreement with the Cooperative setting forth the description
of the land on which said sugar beets will be grown and including such other
information as may be required by the Cooperative.
(c) The Grower agrees that his designations of acreage location shall
be subject to approval of the Cooperative based on location, soil type and
drainage considerations.
(d) The Grower further agrees to notify and receive approval from an
Agricultural Staff Member before acreage is destroyed.
2. The Grower agrees to furnish the Cooperative with such information
as it may request from time to time regarding the crop or crops covered by this
agreement. Representatives of the Cooperative shall also have the right to enter
the Grower's beet fields from time to time during the growing and harvesting
seasons to inspect the crops thereon and to take samples for testing in
ascertaining the quality of the beets.
3. The Grower will harvest and deliver to the Cooperative all beets
grown by him under this contract, said delivery to be made at such times and in
such quantities and to such place or places as may be designated by the
Cooperative. All beets delivered hereunder shall be properly topped as
designated by the Cooperative's Agricultural Department. All beets shall be
subject to a proper deduction for tare. There shall be deducted from the gross
weight of beets delivered hereunder, before net tons are determined, the
Grower's tare weight, as determined by the Cooperative's method of sampling
loads of tare and through the use of the Cooperative's laboratory which measures
each Grower's beet sample for dirt, stones, trash and other foreign substances.
Each Grower's daily average tare percentage, as determined by all load samples
of the Grower for that delivery day or delivery day by field, if field method is
used by Grower, is used to determine the rate weight of all beets delivered by
the Grower for that delivery day. The beets shall be protected from sun and
frost after removal from the ground, including beets that are loaded on trucks.
The Cooperative has the option of rejecting any diseased, frozen or damaged
beets; beets which, in the Cooperative's opinion, are not suitable for the
manufacture of sugar; beets as to which in the Cooperative's opinion, the terms
and conditions of this contract have not been properly complied with or for any
other bona fide reason.
4. Any grower deciding not to plant 1.25 acres per unit of Cooperative
stock owned by him in any one year, shall be subject to cancellation of his
membership in the Cooperative and recall of all his stock following a hearing by
the Board of Directors. Such grower would be paid the established book value of
his stock as determined by the Cooperative. Provided, however, if weather
conditions or an act of God prevented said grower from planting all his acreage
and after a review has been conducted by the Director and Agricultural
Department Staff person from the grower's district, and a finding to that effect
is made by the Board of Directors, such failure may be excused.
5. Any Cooperative member grower refusing to replant acreage where
necessary through June 20, will be required to pay the Cooperative a sum equal
to 100% of the Cooperative's direct overhead costs per acre. The Cooperative's
direct overhead costs per acre shall be determined by dividing the Cooperative's
total overhead costs by the number of acres harvested. For Example: (Projected
1995 - 1996(Overhead Cost
$11,916,000 Overhead Costs) = $ 159.02 per Acre)
74,932 ( 1995 Harvested Acres)
Such penalty will be assessed on all of the acres, up to 1.25 acres per unit
of stock owned, which such grower fails to replant through June 20.
6. Any Cooperative member grower failing to properly care for his crop
will be assessed a penalty for each acre not properly cared for. Such penalty
shall be calculated as set forth in provision 5 above.
7. Any grower harvesting any unreported and unmeasured acres over and
above his contracted acres plus the over-plant permitted in that year, will be
penalized for such excess of unreported and unmeasured acres in the following
manner. First, there shall be a hearing before the Board of Directors and a
finding made as to the number of acres in violation. Second, the Board of
Directors shall reduce the grower's contracted acres by a number equal to the
unreported and unmeasured acres in violation. Third, upon the recall and
cancellation of the units of stock backing up such canceled acres, the grower
shall be paid the book value of said units of stock as last determined by the
Cooperative.
8. It is understood and agreed that if any Governmental authority shall
establish any restrictions, allotment or quota upon the growing, production or
processing of beets, or the output, transportation or sale of beet sugar, then
the Cooperative may reduce to the extent which it deems necessary the acreage of
beets herein contracted for, and shall be obligated to purchase beets only from
such reduced acreage.
9. Grower also agrees not to apply to the crop or land on which the
crop is grown any pesticide chemical, or other substance, as defined in the
Federal Food, Drug and Cosmetic Act, as amended, unless a regulation shall then
be in effect under said Act, exempting such chemical from the necessity of a
tolerance or establishing a tolerance for such chemical, in which event such
chemical shall be applied to the crop or land only at such time and in such
manner and quantities as shall be specified in the labeling of such chemical and
so that any residue of such chemical on beets delivered hereunder shall be
within the tolerance specified in such regulation. The Cooperative reserves the
right to reject the delivery of any beets not complying with this provision.
10. The Grower agrees that, in connection with the growing and delivery
of beets under this contract, he will comply with all applicable laws, including
but not limited to child and migrant labor laws, and all regulations or rulings
relating thereto issued by any duly authorized governmental authority.
11. Seed varieties to be planted by Growers must be approved by the
Cooperative's Seed Committee. All sugar beet seed to be planted by the Growers
must be purchased by the Grower from the Cooperative. The Cooperative agrees to
use its best efforts to obtain its seed inventory at the best possible prices
and terms and to resell such seed to the Grower at no profit to the Cooperative.
The Cooperative makes no warranty of merchantability, fitness for a particular
purpose, productiveness or any other warranty as to any seed furnished by the
Cooperative, except that seed furnished by the Cooperative is warranted, to the
extent of the purchase price only, to be as described on the seed containers
within recognized tolerances. It is also expressly agreed that the Cooperative
does not guarantee a crop.
12. It is agreed that the amount charged for all beet seed furnished by
the Cooperative to Grower hereunder, and all advances made to the Grower by the
Cooperative shall constitute a debt from the Grower to the Cooperative which the
Cooperative shall have the right to collect as in the case of any other
contractual obligation. The Cooperative shall have the right, at its option, to
treat any such amounts, advances or indebtedness as part payment for beets grown
and delivered under this contract. Any such amounts, advances, or indebtedness
which are due and payable or which hereafter may become due and payable from the
Grower to the Cooperative shall be, become, and remain a first and prior lien on
the crop of sugar beets to be grown hereunder and shall be deducted by the
Cooperative from the initial payment or any subsequent payment from the
Cooperative to the Grower which shall become due hereunder, or under any
subsequent beet contract between the Cooperative and the Grower.
13. The Cooperative will furnish all loading equipment at the loading
stations, pay all freight charges from outside piling stations, and pay mileage
on beets assigned to and delivered to all receiving stations in accordance with
policies determined by the Cooperative. Upon delivery to and acceptance by the
Cooperative of the sugar beets as provided for herein, title thereto shall be
deemed to vest, and shall be vested, in the Cooperative.
14. Each year of this agreement, the Cooperative will pay to the Grower
for beets delivered and accepted at the time and in the manner hereinafter
provided, a price per pound of extractable sugar, determined to be as follows:
(a) Extractable pounds of sugar will be determined by the Cooperative
in its laboratory from beet samples statistically taken from each Grower at its
receiving stations. The beet samples will be tested for sugar content and
purity, and said results used in a formula to determine extractable pounds of
sugar delivered.
(b) In addition, each Grower will be reviewed for eligibility for early
harvest bonus extractable pounds of sugar. The bonus extractable pounds of sugar
will be determined by a formula that takes into account the delivery date in
early harvest, as well as the extractable pounds of sugar delivered on that same
date.
(c) Payment to the Grower will be an amount equal to the individual
Grower's total delivered extractable pounds of sugar (as determined in 14a.)
plus the calculated pounds of early harvest bonus sugar (as determined in 14b.),
multiplied by the price to be paid per pound of extractable sugar to all
Growers.
(d) The price per pound of extractable sugar to all Growers will be
determined by dividing the total Grower proceeds by the total pounds of
extractable and bonus sugar delivered from all Growers. Growers proceeds are
defined as the amount after deducting from gross sales, all costs, charges,
expenses, and margins (including reserves but excluding payments to growers) as
are regularly and customarily deducted from gross sales in accordance with the
Cooperative's system of accounting heretofore established.
(e) If in the opinion of the Board of Directors of the Cooperative, the
working capital position of the Cooperative is at any time insufficient, the
Cooperative may and shall retain from the price to be paid for beets such
amount(s) as are deemed necessary by the Board of Directors, the deduction(s) to
be made at such time(s) as the Board of Directors shall require; and such
amount(s) as may be retained shall be evidenced in the records of the
Cooperative by equity credits in favor of the Growers.
15. Settlements shall be made as follows:
For all beets delivered from the beginning of harvest up to and
including October 31st, initial payments shall be made on or about November 15th
of the year in which beets are delivered to the Cooperative; for all beets
delivered after October 31st, initial payment shall be made on the 15th day of
each month for beets delivered during the previous calendar month. Further, each
Grower agrees to the following:
(a) The first payment shall not exceed 65 percent of the price to be
paid per pound of extractable sugar to all Growers;
(b) The second payment shall be paid on the first Friday in February,
and shall bring the total of the first and second payments to an amount not to
exceed 70 percent of the price to be paid per pound of extractable sugar to all
Growers;
(c) The third payment shall be paid on the first Friday in April, and
shall bring the total of the first, second and third payments to an amount not
to exceed 80 percent of the price to be paid per pound of extractable sugar to
all Growers;
(d) The fourth payment shall be paid on the first Friday in July, and
shall bring the total of the first, second, third and fourth payments to an
amount not to exceed 95 percent of the price to be paid per pound of extractable
sugar to all Growers;
(e) The final payment shall be determined as of the end of the
Cooperative's fiscal year, after the Board of Directors has reviewed the final
audited financial statements of the Cooperative; and shall bring the total of
the payments to an amount equal to the price to be paid per pound of extractable
sugar to all Growers.
16. The Grower is an independent contractor. Agricultural or other
advice may be offered the Grower by the Cooperative's representatives, but the
Grower's status as an independent contractor shall not be thereby affected. In
no event shall the Cooperative be responsible for any failures or partial
failures of the crop or damage to the beets.
17. In case of the bankruptcy of the Association or of the total
destruction of the factory and the Cooperative's failure to rebuild the same,
the Cooperative shall not be subject to any damage for failing to receive the
sugar beets of the Grower, the Grower hereby waiving and abandoning any rights
or claims which he may have for such damages, if any. Furthermore, such
bankruptcy or total destruction of the factory shall exempt the respective
parties hereto from the performance of this contract; provided, however, in the
event the Bank shall through foreclosure or otherwise acquire in whole or in
part the assets of the Cooperative, the growers shall remain obligated hereunder
as though the contract were originally entered into between the Growers and the
Bank.
18. Fire, strikes, accidents, acts of God and the public enemy, or
other causes beyond the control of the parties which prevent the Grower from the
performance of this contract or the Cooperative from utilizing the beets
contracted for in the manufacture of sugar therefrom, shall excuse the
respective parties hereto from the performance of this contract.
19. In no event shall the Cooperative be liable to the Grower for
partial or complete failure of crop or for any injury or damage to beets.
20. The parties agree that this contract is one of a series depending
for its true value upon the compliance by all of the Growers obligating them to
plant a total minimum of 79,008acres of sugar beets in crop year 1996,
90,405acres of sugar beets in crop year 1997, and 97,470in crop year 1998 and
each year thereafter, but no breach, waiver of breach, cancellation or recision
of any other contract of this series shall affect this agreement. It is mutually
agreed that there are no other or different documents, representations, promises
or agreements affecting this agreement, and that this agreement, the Articles of
Incorporation and By-Laws of the Cooperative, constitute the full, free and
complete understanding of the parties.
21. This agreement shall be binding upon both the Grower, his heirs,
legal representative, and assigns, and upon the Cooperative, its successors and
assigns, and shall not be transferable by the Grower without the written consent
of the Cooperative, its successors and assigns; and shall apply equally to
owned, rented or leased acres.
22. No agent of the Cooperative has any authority to change, waive, or
modify any of the terms or provisions of this contract.
IN WITNESS WHEREOF, the Grower has hereunto executed this Growers
Agreement on this _______ day of ______________________________, 19 _______.
- ----------------------------------- ----------------------------------------
Stockholder Stockholder
- --------------------------------------------------------------------------------
ACCEPTANCE BY COOPERATIVE
This Growers Agreement is hereby accepted by the Board of Directors of
Minn-Dak
Farmers Cooperative on this _______ day of _________________________, 19_______.
MINN-DAK FARMERS COOPERATIVE
By _________________________________