The application, signed by the member and approved by the board of directors, is the legal proof that a patron is a member. A cooperative should have a completed membership application on file from every member. Membership and the amount of business done with members and nonmembers are important factors for certain antitrust and taxation provisions.

Membership Application and Marketing Contract

THIS AGREEMENT between the ________________________ , Inc., hereinafter referred to as the Association, and the undersigned Producer, witnesseth:

The Producer

1.     Applies for membership in the Association, and if accepted as a member, agrees to be bound by its articles of incorporation, bylaws, rules, and regulations as now or hereafter adopted.
2.     Appoints the Association as agent to sell all the __________________ of marketable quality produced an any farm in control of or operated by the Producer, except that required for consumption on the farm.
3.     Will deliver such products at such times and to such places in unadulterated form under such conditions as may be prescribed by proper authorities.
4.     Will notify the Association of any lien on the products delivered hereunder, and authorizes the Association to pay the holder of said lien from the net proceeds derived from the sale of such products before any payment is made to the Producer hereunder.
5.     Will provide capital in such amounts and in such a manner as may be provided in the bylaws.

The Association:

1.     Accepts the application of Producer for membership in the Association.
2.     Agrees to act as agent for the marketing of products of Producer as herein provided.
3.     Will dispose of Producer's products in a manner deemed to be most advantageous for its members.
4.     Will account to the Producer in accordance with this contract for all amounts received from the sale of products as herein provided.
5.     Will reflect in an appropriate capital account the capital received from each patron.

The Producer and the Association mutually agree that the Association shall have the power:

1.     To establish various plans for making returns to the Producer.
2.     To blend or pool proceeds from sales of products of the Producer with the proceeds of the sales of products of other Producers, and to account to or settle with Producer therefore in accordance with established plans.
3.     To process or cause to be processed products of the Producer and dispose of the same in the manner deemed most advantageous to its members.
4.     To collect from buyers of products the purchase price therefore and to remit the same to Producer under a plan authorized by this contract after making uniform deductions deemed adequate for all necessary expenses and for capital purposes.

In case of a breach of this contract by the Producer, the actual damage to the Association and other producers cannot be determined. Therefore, Producer agrees to pay to the Association as liquidated damages for such breach, the sum of _________ dollars (        ) per ____________ on all products that would have been delivered had the Producer not breached the said contract.

And the Association shall further be entitled to equitable relief by injunction or otherwise to prevent any such breach or threatened breach thereof and the payment of all costs of litigation in connection with the exercise of any or all of the remedies available to the Association.

This contract shall remain in effect for an initial term of (     ) years from the date hereof. Following the initial term, the contract may be cancelled by notice given in writing by either party to the other within ten (10) days after any yearly anniversary date, and such cancellation shall become effective on the last day of the second calendar month following the month during which such notice is given.

Date _______________

Producer's signature _______________________   (____________________)

Address

__________________________________________________________

Social Security No. ______-_____-_______   County _______________

Accepted this day of ____________. 19______.

________________________, Inc.

By ________________________, Pres.

By ________________________, Secy.

(Some State laws provide for filling or recording cooperative marketing contracts in a county recorder's office to give notice to third parties that the contract exists. And acknowledgment if the contract is to be filed or recorded.)

This certifies that ______________________________ of _____________________ is a member of _________________________________ Association and is entitiled to all of the rights, benefits, and privileges of the Association.

Date ______________________.