COFCO UK COMMITMENT FORM

1.  Definitions and Interpretation

1.1   In these Conditions, unless the context otherwise requires:

“Appointment” means the appointment of the Company as the agent of the Producer for the sale of Crops and ancillary matters pursuant to Condition 3;

1.2   “Closing Date” means the closing dates for receipt by the Company of signed Commitment Forms, such dates being stated in the Introduction Pack issued from time to time by the Company;

1.3   “Commitment Form” means the form by which the Producer indicates the description and volumes of the Crops to be committed for sale by the Company;

1.4   “Committed Tonnage” means the total tonnage of Crops which the Producer undertakes to make available to the Company to sell in accordance with clause 2 below;

1.5   “Company” means COFCO Intl UK Limited (registered no 165772) or an assignee of its rights hereunder;

1.6   “Conditions” means these terms and conditions of trading as amended from time to time and the references to a “Condition” shall be construed accordingly;

1.7   “Crops” means those crops which the Company agrees to Market on behalf of the Producer as stated in a COFCO Intl Purchase Contract;

1.8   “Introduction Pack” means the explanatory materials briefly describing the operation of the Company’s crop marketing schemes;

1.9   “COFCO Intl Purchase Contract” means a purchase agreement in the Company’s usual form for the purchase of the relevant Crop issued in accordance with clause 2,usually incorporating by reference the relevant industry standard purchase terms (e.g. AIC or FOSFA standard terms);

1.10   “Payment Date” means the date when the Company pays the Producer the sums due to be remitted to the Producer in respect of the sale of Crops, net of the Company’s commissions, such dates being set out in the Introduction Pack in force from time to time.

1.11   Producer” means any person, company or entity who enters into arrangements for the sale of Crops with the Company on the basis of these Conditions;

2. Procedure for Confirming Appointment

2.1   If a Producer wishes to appoint the Company to sell Crops on the Producer’s behalf in the manner described in the Principal Documentation, the Producer shall submit a duly completed and signed Commitment Form to the Company.

2.2   If the Company accepts the description and volumes stated on the Commitment Form, the Company shall issue a COFCO Intl Purchase Contract in respect of the Crops specified in the Commitment Form and send it to the Producer.

2.3   The Company shall not become legally bound to market, buy or sell on any of the Crops until the Producer has received a valid Commitment Form signed by the Producer.

2.4   The COFCO Intl Purchase Contracts shall not normally state the purchase price of the Crops to be bought as it will not have been ascertained at the time of issue but the Producer accepts that such COFCO Intl Purchase Contracts will not be invalid or inchoate contracts as a consequence of requiring a price to be fixed after the date of the contract.

2.5   A Commitment Form which is not received by the Company on or before the Closing Date will not be valid unless otherwise agreed by the Company in its absolute discretion.

3. Nature of the Company’s Appointment

3.1   The Producer hereby appoints the Company as its agent for the marketing of the Crops but the purchase of the Crops by the Company under the COFCO Intl Purchase Contract shall be as principal unless otherwise stated therein.

3.2   The Company will use all reasonable endeavours to market and sell the Crops on behalf of the Producer in accordance with the Principal Documentation.

3.3   Insofar as the Company acts as agent for the Producer in the marketing and sale of the Crops,  the Producer hereby authorises the Company to take all steps which the Company in its absolute discretion deems necessary or expedient to market and sell the Producers’ Crops and the Producer shall ratify and affirm any act, matter or thing which the Company may lawfully do as the agent of the Producer under these Conditions.

3.4   The Producer shall allow the Company’s personnel or sub-contractors to inspect the Crops at reasonable times and upon reasonable notice and shall furnish the Company with such information concerning the Crops as the Company shall reasonably require.

3.5   The Producer warrants to the Company that all Crops to be sold on the Producer’s behalf shall at all times prior to such sale be the absolute property of the Producer free from all liens, charges and encumbrances and that the Producer has authority to sell the same with full title guarantee.

3.6   The terms upon which the Company shall purchase and uplift Crops (including without limitation the right to reject Crops or claim allowances/discounts for quality shortfalls) shall be governed by the COFCO Intl Purchase Contract which shall prevail over these Conditions in the event of any conflict between these Conditions and the relevant COFCO Intl Purchase Contract in relation to the said matters.

4. Commission due to the Company

4.1   The Company shall be entitled to charge a commission on each tonne of Crops which are sold by the Company in accordance with these Conditions.

4.2  The rate of commission shall be the rate stated on the Commitment Form.

4.3   The rate of commission shall apply in respect of the marketing periods of the crop managed funds listed on the Commitment Form (“a Crop Year”) and be applicable to all Crops due to be sold in a crop managed fund the dates of which are within that particular Crop Year.  The Company reserves the right to review the rate of commission payable on any particular commodity annually before the commencement of the next Crop Year in which such reviewed rates are to apply and shall advise the Producer in writing of such reviewed commission rates.

4.4   The Commission shall be payable by the Producer but the Company is hereby authorised to deduct any commission due to it from the sums it receives from the sale of Crops and remit a net amount to the Producer on the relevant Payment Date.  The Company shall provide the Producer with an appropriate VAT invoice in respect of the commissions which it charges to the Producer.

5. Payments and Shortfalls

5.1   The sums due to the Producer by the Company in respect of the purchase and sale of Crops (net of sums allowed to be deducted under these conditions) shall be paid on the relevant Payment Days regardless of whether the Company has itself received payment in full for the sale of the Crops purchased from the Producer.

5.2   In the event of the Producer being in default under the COFCO Intl Purchase Contract, the commissions due to the Company shall be claimable by the Company in addition to any damages or compensation agreed or held to be due to the Company under the dispute resolution process adopted in relation to such default save to the extent that the commissions due in accordance with these Conditions have been expressly included in any settlement or determination under such dispute resolution process. In this clause, a “dispute resolution process” includes (without limitation) arbitration, mediation and/or court proceedings).

6. Limitation of Liability

6.1   The Company’s liability relating to the performance of its obligations under these Conditions or for a breach thereof shall not include any indirect or consequential loss.

Termination and Contract for Sale

7.1   Without prejudice to Conditions 7.2 and 7.3, and unless a Producer has contracted to sell Crops through the agency of the Company after such termination would take effect, the Company and the Producer may terminate the Appointment with respect to future Crop sales by giving not less than 12 complete calendar months written notice served on the other if they do not wish to trade Crops to be harvested and/or marketed in the immediately following  calendar year, but such termination shall be without prejudice to the rights, duties and obligations of the Company or the Producer in respect of the Appointment whensoever arising in respect of Crops harvested and/or marketed in or prior to the expiry of the notice  period.

7.2   If a Producer commits or there occurs in relation to a Producer an Event of Default, the Company shall cease to be obliged to endeavour to market or sell the Crops without prejudice to the Company’s rights against the Producer. For the purposes of Conditions 7.2 and 7.3:

7.3   “Event of Default” means any of the following:

(a)       if the Company so stipulates in a written notice to the Producer any material breach of these Conditions which, in the case of breach capable of remedy has not been remedied to the satisfaction of the Company within 14 days from service of such written notice; and

(b)        a Producer ceasing to trade or being unable to pay his debts as they fall due or the appointment of a Liquidator over any of the Producer’s business or assets or the passing of a resolution for winding-up or being the subject of any application, petition or order for administration, winding-up, dissolution or bankruptcy or entering into any compulsory or voluntary arrangement with creditors or if the Company reasonably suspects that the Producer is likely to be subject to any of the same:

7.3   Following an Event of Default, the Company shall (without prejudice to clause 7.4) be entitled to withhold any sums which it would otherwise be obliged to remit to the Producer on a Payment Date and to set off the sums so held against any commissions which will fall due in respect of sales of Crops for which the Company has, at the date upon which it becomes aware of the Event of Default, made commitments to third parties to sell Crops.

7.4   On termination of the Appointment for any reason, any sums due to or from the Producer (in any capacity) are immediately due and payable and such amounts shall in any event be paid by the Producer to the Company.

7.5   On the death of a Producer the Appointment and these Conditions shall bind his personal representatives in respect of Crops then contracted by such Producer to be sold by the Company but shall impose no future obligations on such personal representatives to offer Crops for sale by the Company.

Notices

8.1   Any notice or information required to be given under these Conditions shall be in writing and shall be left at or sent by first class post to, in the case of the Company, its registered office and in the case of a Producer, the address most recently notified to the Company. Any such notice shall be deemed to be served at the time when it is handed to or left at the address of the party to be served or, if served by post, on the day (not being a Saturday, Sunday or public holiday) next following the day of posting.

8.2  With the Producer’s and the Company’s consent (but not otherwise), all communications can be made using electronic media.

Assignment

9.1   The Producer may not assign his rights under these Conditions without the consent of the Company in writing.

9.2   The Company may assign or transfer any of its rights and/or obligations under these Conditions to a company which is a holding company of the Company or a subsidiary of the Company or of any such holding company (as “subsidiary” and “holding company” are defined in the Companies Act 2006).

Variation

   10.1   The Company shall be entitled to alter or vary these Conditions or to substitute these Conditions with revised terms or conditions of trading (each such alteration, variation or substitution being a “Revision”) by serving on the Producer at least thirty days’ written notice to expire on 1 December in any year and any such Revision shall be binding on the Producer in respect of trading in the following calendar year.