LARSEN COOPERATIVE COMPANY STORAGE AGREEMENT FOR AGRICULURTAL GRAIN PRODUCTS THIS AGREEMENT, hereinafter referred to from time to time as Agreement, is entered into the day set forth below by and between Larsen Cooperative Company, hereinafter referred to from time to time as the Cooperative, and hereinafter referred to from time to time as the Member. RECITALS WHEREAS, the Member desires to obtain from the Cooperative storage space in the storage facility hereinafter described to be used for the storage of Member s agricultural grain products. WHEREAS, the Cooperative desires to provide to the Member storage space in a storage facility at a location to be mutually agreed upon, for the storage of Member s agricultural grain products. NOW THEREFORE, in consideration of the terms, covenants, warranties and conditions as set forth herein, the parties mutually agree as follows: TERMS 1. DESCRIPTION OF MEMBER S STORAGE. The Cooperative agrees to provide storage space to the Member for the Member to store the Member s agricultural grain products for the term, at the cost of the storage fee, and pursuant to all the conditions further set forth herein. Such storage space is limited to the space described in this Agreement and will be located at the storage facility in Readfield, Center Valley, Amherst or Seymour, Wisconsin. It is agreed and understood that Member s product may be commingled to the extent that it is the same agricultural grain products. 2. TERM. The initial term of this Agreement shall be for Twenty (20) years, commencing September 1, 2011 and continuing until midnight August 31,2031, unless earlier terminated as provided herein. 3. MEMBER S BUSHELS AND MINIMUM STORAGE BUSHELS. The minimum Member s bushels of storage to be purchased of agricultural grain products shall be Ten Thousand (10,000) bushels of storage. Thereafter, additional Five Thousand (5,000) bushel increments of storage may be acquired. 4. PREPAID STORAGE FEE. The prepaid storage fee, to be paid by the 1
Member and further set forth in this item, is contingent upon the Member, and other Members commitment to enter into similar agreements, for storage of agricultural grain products. At the commencement of this Agreement, a one-time prepayment storage fee shall be paid by the Member in an amount equal to $ 1.98 per bushel. The Member shall pay an amount equal to twenty (20%) percent of the prepayment fee at the execution of this agreement with the balance to be paid on or before April 15, 2011. The Cooperative agrees to provide a storage commitment for a period not to exceed twenty (20) years from the date the facility is determined to be available by the Cooperative for the storage of the Member s agricultural grain products. 5. MAINTENANCE FEE. The Member agrees to pay an annual maintenance fee necessary to operate the agricultural grain storage facility. Maintenance Fee shall be defined as the costs for electricity, taxes, general maintenance and insurance. The initial annual Maintenance fee shall be in the amount of five and one-half cents (5 1/2) per bushel and shall be fixed for a period of three (3) years. At the end of the three (3) year period, the Maintenance Fee shall be reviewed and at that point adjusted as the Cooperative determines to be appropriate, and annually thereafter. Commencing August 2011, the maintenance fee will be invoiced in August of each year and shall be payable in September of each year. 6. PRODUCT STANDARDS AND GUIDELINES FOR STORAGE. The Cooperative shall establish standards and guidelines for the receipt, storage, and removal of agricultural grain products in the storage facility. It is anticipated that such standards and guidelines shall include, but may not be limited to, an assessment of the Member for product shrinkage, dockage or charges for moisture content, and charges for the removal of product. Guidelines shall be established for the maximum moisture content of the product to be received into the storage facility and that the Cooperative may refuse to be allowed into storage any product that does not meet those standards and guidelines. The Member shall inform the Cooperative no later than August 1 st of each year the particular agricultural grain product that the Member intends to store in the storage space which the Member intends to utilize at the particular agricultural grain storage facility. 7. COMMENCEMENT DATE FOR STORAGE OF PRODUCT. The date the Member may begin to store its product at the agricultural storage facility described herein on September 1, 2011. 8. TITLE TO STORAGE FACILITY. Title to the storage facility shall remain in the Cooperative or its successors or assigns. 2
9. USE AND SALE OF PRODUCT TO THE COOPERATIVE. The grain storage facility shall be used only for the storage of agricultural grain products. Agricultural grain products are defined as corn, soybeans, and wheat. The agricultural products, or a portion thereof stored by the Member in the storage facility may, pursuant to such terms and conditions as may be further agreed to from, time to time, by the Cooperative and the member, be sold to the Cooperative. 10. USE OF MEMBER S STORAGE BY THIRD PARTY AND ASSIGNMENT. The Member shall notify the Cooperative, prior to September 1 st of each year, in the event the Member does not intend to utilize all or a part of the Member s storage in the storage facility. If the Member timely notifies the Cooperative, the Cooperative agrees to assist the Member and attempt to find other Members of the Cooperative, or other individuals, desiring to store agricultural grain products in the storage facility. The Cooperative and member agree to notify other Members entering into an agreement similar to this Agreement with the Cooperative that the Member s storage is available. Under no circumstances shall a member be allowed to assign or sublet less than 5,000 bushels of storage space or any less than 5,000 bushels incrementally thereafter. It is agreed that the Member shall not assign its obligations under this agreement without the written consent of the Cooperative and pursuant to such terms and conditions, as may be approved by Cooperative. It is agreed and understood that the Cooperative s consent may not be unreasonably withheld. Any third party that the Cooperative may agree and allow to use Member s storage space, shall be a member of Cooperative and shall be credit worthy as determined by Cooperative. It is anticipated that the Member may assign the member s leasehold interest in this Agreement to a family owned business, in which the Member has an equity investment, or to the member s immediate family. Immediate family is defined to be a spouse, son, daughter, brother, sister, father, mother, father-in-law or mother-in-law. No assignment for the benefit of creditors, or by operation of law, shall be effective to transfer any right to an assignee without the written consent of Cooperative. It is agreed that if this Agreement is assigned, or if the storage facility or any party is allowed to be used or occupied by anyone other than Member, Member shall remain fully liable pursuant to the terms of this Agreement and the member shall not be released from performing any of the terms, covenants and condition of this Agreement. 11. ASSIGNMENTS OR ENCUMBRANCE OF MEMBER S LEASEHOLD INTEREST. Cooperative and Member agree that the Member s leasehold interest pursuant to this Agreement may be assigned, or pledged during the term. After first obtaining the written consent of the Cooperative (which consent shall not unreasonably be withheld), the Member may at any time, assign, pledge the 3
Member s interest provided, however, that the Member is not in default under the terms of the Agreement. Any assignment of the Member s leasehold interest shall be subject to the terms and conditions of this Agreement, including any amount owed pursuant to the terms of this Agreement by the Member, and the Member shall obtain an acknowledgement from any such third party, in a form acceptable to the Cooperative, acknowledging that the third party is subject to the terms of this Agreement. When making application to the Cooperative for such consent, the Member shall provide evidence of the financial responsibility of the Member s intended assignee in a form acceptable to the Cooperative. 12. INSURANCE. Cooperative shall be responsible to obtain and maintain during the term of this Agreement a policy of comprehensive public liability insurance insuring against any liability arising out of the ownership, use, occupancy, or maintenance of the grain storage facility. At all times during the terms of this Agreement, Cooperative shall also keep and maintain fire and hazard insurance coverage on the storage grain facility. The cost of all insurance shall be included by the Cooperative as part of the annual Maintenance fee and paid by the Member as set forth in this Agreement. 13. DEFAULT. The occurrence of any one or more of the following events, in the sole discretion of the non-defaulting party hereto, shall constitute a default and breach of this Agreement, hereinafter referred to in this Agreement from time to time as Event of Default. a) Vacating or abandonment of the grain storage space by the Member or failure to respond to an inquiry thirty (30) days after written notice thereof from the Cooperative whether Member has vacated or abandoned the storage space. b) Failure by Member to make any payment pursuant to this Agreement or by Cooperative or Member to make any other payment required to be made by Cooperative or Member after the same is due under this Agreement for a period of thirty (30) days after written notice thereof, provided that the Cooperative shall not be obligated to give written notice of monetary default more than once in any calendar year. c.) Failure by Member or Cooperative to observe or perform any of the conditions or provisions of this Agreement where such failure shall continue, except as otherwise provided herein, for a period of thirty (30) days after written notice thereof. 14. REMEDIES UPON DEFAULT. a) Remedies. In the event of Default, the Cooperative may sell any grain product in the storage facility owned by, stored by or belonging to the Member and apply the proceeds to any indebtedness owed by Member to the Cooperative. Following an event of Default, which is not cured by the Member, 4
the Cooperative may proceed in accordance with the provisions of the Wisconsin Statutes, or such similar law(s) as may be adopted in replacement thereof. Upon the occurrence of an Event of Default, the Cooperative shall have the option, in its sole discretion, to (i) continue this Agreement in full force and effect and collect, by legal proceedings or otherwise, each payment and any other charges payable to Cooperative hereunder at any time after the same become due and to enforce, by legal proceedings or otherwise, every term and provision of this Agreement; (ii) Without terminating this Agreement, allow others to use the Member s storage for a fee, determined by the Cooperative, with such fee to be paid Cooperative and credited against monies owed the Cooperative by the Member; or (iii) To terminate this Agreement and collect any monies owed Cooperative by Member at the time of termination. b.) Re-entry Not Termination. Taking possession of the Member s storage space or allowing others to use the Member s storage by Cooperative pursuant to legal proceedings or otherwise shall not constitute an election to terminate this Agreement, unless written notice of such intention is given to member by Cooperative or unless termination thereof be decreed by a court of competent jurisdiction. Member shall have rights for Cooperative s specific performance of this Agreement, but only after providing Cooperative with written notice explicitly stating how Cooperative has allegedly not fulfilled its required performance, and providing Cooperative ninety (90) days form the date that notice is received to address the issues in such written notice. c.) Remedies Cumulative. The specified remedies available to the parties under the terms of this Agreement are cumulative and are not intended to be exclusive of any other remedies or means of redress to which a party may be entitled, at law or in equity or by statute or otherwise, in case of any Event of Default. The failure of a party to insist in any one or more cases upon the strict performance of any of the covenants of this Agreement shall not be considered to be a waiver of a party s right to insist upon performance or exercise of such right thereafter. A receipt by Cooperative of payment with knowledge of the breach of any covenant, condition, or provision shall not be deemed a waiver of such breach, and no waiver by Cooperative of any provision of this Agreement shall be deemed to have been made unless expressed in writing and signed by Cooperative. 15. SURRENDER OF POSSESSON. The Member agrees to surrender to the Cooperative Member s leasehold interest in the grain storage facility at the expiration or termination of this agreement except as otherwise provided herein. 16. MISCELLANEOUS PROVISIONS. a) Successors. All the terms, covenants, and conditions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by the partied hereto and their respective successors, heirs, executors and assigns. This Agreement and the rights and obligations of any party hereunder shall not be 5
assignable except with the written consent of the other parties hereto, which consent shall not be unreasonably withheld. b) Notices. Any notice, request, demand, statement or consent required or permitted to be given hereunder shall be in writing, shall be signed by or on behalf of the party giving notice, and shall be personally delivered or sent by express service, telecopy or certified or registers mail, return receipt requested, postage prepaid, to the other party to the respective address given herein below: Larsen Cooperative Company 1104 Mulligan Drive P.O. Box 308 New London, WI 54961 MEMBER Either party may, from time to time, furnish, in writing, to the other party, notice of a change in the address to which notices are to be given hereunder. c.) Governing Law. This Agreement shall be governed, construed, and interpreted in accordance with the laws of the State of Wisconsin. Any action brought and involving this Agreement shall be brought in Waupaca County, Wisconsin. d) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretations of this Agreement. e.) Costs and Attorney s Fees. If by reason of any default on the part of Member, it becomes necessary for the Cooperative to employ an attorney or in case Cooperative shall bring suit to recover any monies due hereunder, or for breach of any provision of this Agreement, or if Member shall bring any action for relief against Cooperative, declaratory or otherwise, arising out of this Agreement, then and in any such event the losing party shall pay to the prevailing party reasonable attorney s fees and all cost and expended or incurred by the prevailing party in connection with such default or action. f) Entire Agreement. This Agreement as set forth the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede all prior agreements, arrangements, and understandings, written or oral, relating to the subject matter hereof. g) Advise of Counsel. The Member acknowledges that the Member has had an opportunity to seek the advise of independent legal counsel as to this Agreement and is encouraged by Larsen Cooperative to do so. Further, Member is executing this Agreement voluntarily and of the Member s own free will. 6
h) Authority & Other Agreements. The Member understands that the Cooperative may enter into other Agreements with the terms and conditions differing from this Agreement. WHEREFORE, the parties have executed this Agreement in duplicate this day of 2011. Larsen Cooperative Company By: LeRoy K. Peterson, General Manager Member By: Title: Bushels of Storage to Prepay Location Down Payment Amount $ Balance Due on April 15, 2011 This document prepared by Omholt & Forsythe S.C. PO Box 215 105 Pine Crest Lane Iola, WI 54945 715-445-2511 7