505+-+Midwest+Dairy+Agreement.pdf

DAIRY RESEARCH, PROMOTION AND ADMINISTRATIVE SERVICES

AGREEMENT

THIS AGREEMENT is between the State of North Dakota, through its NORTH DAKOTA DAIRY PROMOTION COMMISSION, an entity created under North Dakota Century Code, Chapter 4.1-05 (“NDDPC”), and MIDWEST DAIRY ASSOCIATION, a Minnesota nonprofit corporation (“Midwest Dairy”).

WHEREAS, NDDPC has the responsibility for conducting dairy promotion, research, and educational programs on behalf of North Dakota dairy producers; and

WHEREAS, Midwest Dairy has been established for the purpose of coordinating and implementing the dairy promotion, research, and education programs conducted on behalf of dairy producers in portions of the midwestern United States, including the State of North Dakota; and

WHEREAS, NDDPC desires to contract with Midwest Dairy to provide certain services to implement and administer the dairy promotion, research, and educational programs in North Dakota; and

WHEREAS, Midwest Dairy desires to provide such services under the terms of this Agreement.

NOW, THEREFORE, in consideration of the terms in this Agreement, the parties agree as follows:

SECTION 1. SERVICES TO BE PROVIDED. Midwest Dairy shall provide the following services to NDDPC:

(i) All necessary services related to the administration and implementation of dairy promotion, research, and educational programs described on Exhibit A, attached and incorporated herein; and

(ii) General administrative services described on Exhibit B, attached and incorporated herein.

SECTION 2. COMPENSATION. NDDPC shall pay Midwest Dairy for the services Midwest Dairy provides under this agreement. NDDPC will pay Midwest Dairy monthly contractual payments on or before the last day of each month commencing on January 1, 2025 in an amount equal to the unexpended fund balance of the NDDPC. In the event NDDPC does not have sufficient funds to make a full payment, the amount of the shortfall shall be deferred to and paid with subsequent monthly payments.

Notwithstanding anything to the contrary in this Agreement, NDDPC shall not be obligated to make payments to Midwest Dairy under this Agreement that exceed the cumulative total of revenue received by NDDPC during the term of this Agreement. All funds received by Midwest Dairy from NDDPC must be deposited into accounts maintained by Midwest Dairy and expended in accordance with the terms of this Agreement. Any funds received by Midwest Dairy from NDDPC that are not expended by December 31, 2025 shall be refunded to NDDPC no later than May 31, 2026, but only if (i) the funds that have not been expended amount to more than one percent (1%) of the Midwest Dairy budget for the 2025 fiscal year, and (ii) the reserves of Midwest

Docusign Envelope ID: 9CE838FB-8179-4131-8259-CFFD70176270

Dairy as of December 31, 2025 exceed ten percent (10%) of Midwest Dairy’s annual operating budget.

SECTION 3. RESPONSIBILITIES OF THE PARTIES.

(a) Standard of Care. Midwest Dairy shall use due care in providing services under this Agreement, and do so in a diligent manner consistent with reasonable business practices and in accordance with North Dakota Century Code chapter 4.1-05.

(b) Staff. Midwest Dairy shall employ such staff as it reasonably determines is necessary to provide the services. The compensation and benefits provided to Midwest Dairy employees shall be determined by Midwest Dairy.

(c) Records and Audits. With respect to its activities and expenditures, Midwest Dairy shall maintain records customarily retained by business organization. Midwest Dairy will provide periodic reports to NDDPC concerning its programs in such form and at such times as may be reasonably requested by NDDPC. If the North Dakota State Auditor conducts an audit of NDDPC, or if the NDDPC undertakes its own audit, Midwest Dairy will cooperate with the audit.

All records, regardless of physical form, and the accounting practices and procedures of Midwest Dairy relevant to this Agreement are subject to examination by NDDPC and by the North Dakota State Auditor. Midwest Dairy shall maintain all such records for at least three years following completion of this Agreement

(d) Indemnification. Midwest Dairy agrees to defend, indemnify, and hold harmless the state of North Dakota, its agencies, officers and employees (“State”) from and against claims based on vicarious liability of the State or its agents, but not against claims based on NDDPC’s contributory negligence, comparative and/or contributory negligence or fault, sole negligence, or intentional misconduct. The legal defense provided by Midwest Dairy to the State under this provision must be free of any conflicts of interest, even if retention of separate legal counsel for the State is necessary. Midwest Dairy also agrees to defend, indemnify, and hold the State harmless for all costs, expenses and attorneys’ fees incurred if the State prevails in an action against Midwest Dairy in establishing and litigating the indemnification coverage provided herein. This indemnification obligation continues after the termination of this Agreement.

(e) Insurance.

(1) Required Coverages. Midwest Dairy shall secure and keep in force during the term of this Agreement, from insurance companies, government self-insurance pools, or government self-retention funds, authorized to do business in North Dakota, the following insurance coverages:

(i.) Commercial general liability, including premises or operations, contractual, and products or completed operations coverages, with minimum liability limits of $250,000 per person and $1,000,000 per occurrence.

(ii.) Automobile liability, including Owned, Hired, and Non-Owned automobiles, with minimum liability limits of $250,000 per person and $1,000,000 per occurrence.

(iii.) Workers compensation coverage meeting all statutory requirements. The policy shall provide coverage for all states of operation that apply to the performance of this contract.

(iv.) Employer's liability or "stop gap" insurance of not less than $1,000,000 as an endorsement on the workers compensation or commercial general liability insurance.

(2) General Insurance Requirements. The insurance coverages listed above must meet the following additional requirements:

(i.) Any deductible or self insured retention amount or other similar obligation under the policies shall be the sole responsibility of Midwest Dairy. The amount of any deductible or self-retention is subject to approval by NDDPC.

(ii.) This insurance may be in policy or policies of insurance, primary and excess, including the so called umbrella or catastrophe form and must be placed with insurers rated “A-” or better by A.M. Best Company, Inc., provided any excess policy follows form for coverage. Less than an “A- “rating must be approved by NDDPC. The policies shall be in form and terms approved by NDDPC.

(iii.) The duty to defend, indemnify, and hold harmless the State under this Agreement shall not be limited by the insurance required in this Agreement.

(iv.) The State of North Dakota, through NDDPC shall be endorsed on the commercial general liability policy, including any excess policies (to the extent applicable), as additional insureds. NDDPC shall have all the benefits, rights and coverages of an additional insured under these policies. In addition, NDDPC is a named insured on Midwest Dairy’s commercial general liability, excess umbrella liability, and directors and officers professional liability policies.

(v.) The insurance required in this Agreement, through a policy or endorsement, shall include:

a. a “Waiver of Subrogation” waiving any right of recovery the insurance company may have against the State;

b. a provision that the policy and endorsements may not be canceled or modified without thirty (30) days’ prior written notice to the undersigned NDDPC representative;

c. a provision that any attorney who represents NDDPC under this policy must first qualify as and be appointed by the North Dakota Attorney General as a Special Assistant Attorney General as required under N.D.C.C.

§ 54-12-08;

d. a provision that Midwest Dairy’s insurance coverage shall be primary (i.e., pay first) as respects any insurance, self-insurance or self-retention maintained by NDDPC and that any insurance, self-insurance or self-retention maintained by NDDPC shall be excess of Midwest Dairy’s insurance and shall not contribute with it;

e. cross liability/severability of interest for all policies and endorsements.

(vi.) The legal defense provided to NDDPC under the policy and any endorsements must be free of conflicts of interest, even if retention of separate legal counsel for NDDPC is necessary;

(vii.) The insolvency or bankruptcy of Midwest Dairy shall not release the insurer from payment under the policy, even when such insolvency or bankruptcy prevents Midwest Dairy from meeting the retention limit under the policy.

(viii.) Midwest Dairy shall furnish a certificate of insurance to the undersigned NDDPC representative prior to commencement of this Agreement. All endorsements shall be provided as soon as practicable.

(ix.) Failure to provide insurance as required in this section is a material breach of contract entitling NDDPC to immediately terminate this Agreement.

SECTION 4. TERM AND TERMINATION.

(a) Term. The term of this Agreement commences on January 1, 2025 and continues through December 31, 2025, unless sooner terminated as provided herein.

(b) No Automatic Renewal. This Agreement will not automatically renew.

(c) Extension Option. NDDPC reserves the right to extend the Agreement for an additional period of time, not to exceed twelve (12) months, beyond the termination date of the Agreement.

(d) Renewal Option. NDDPC may renew this Agreement upon satisfactory completion of the initial Term. NDDPC reserves the right to execute up to three (3) options to renew this Agreement under the same terms and conditions, except as to Compensation and Program Services. NDDPC and Midwest Dairy shall agree to Compensation and Program Services for each Extension Option period.

(e) Termination for Lack of Funding, Authority, or License. NDDPC by written notice to Midwest Dairy, may terminate the whole or any part of this Agreement under any of the following conditions:

(i.) If funding from federal, state, or other sources is not obtained and continued at levels sufficient to allow for purchase of the services.

(ii.) If federal or state laws are modified or interpreted in a way that the services are no longer allowable or appropriate for purchase under this Agreement or are no longer eligible for the funding proposed for payments authorized by the Agreement.

(iii.) If any license, permit, or certificate required by law is for any reason denied, revoked, suspended, or not renewed.

Termination of this Agreement under this subsection is without prejudice to any obligations or liabilities of either party accrued prior to termination.

(f) Termination for Cause. NDDPC may terminate this Agreement effective upon delivery of written notice to Midwest Dairy, or any later date stated in the notice if:

(i.) Midwest Dairy fails to provide the services within the time specified or any extension agreed to by NDDPC; or (ii.) Midwest Dairy fails to perform any of the other provisions of this Agreement or fails to pursue the work as to endanger performance of this Agreement in accordance with its terms.

The rights and remedies of NDDPC provided in the above clause related to defaults by Midwest Dairy are not exclusive and are in addition to any other rights and remedies provided by law or under this Agreement.

(g) Termination Without Cause. NDDPC may terminate this Agreement without cause and without liability to NDDPC, upon 90-days written notice to Midwest Dairy.

SECTION 5. CAPITAL CONTRIBUTION.

(a) Contribution and Valuation. In order to enable Midwest Dairy to commence operation on July 1, 1993, and to conduct the activities contemplated by this Agreement, the parties acknowledge that NDDPC made a capital contribution to Midwest Dairy in the amount of One Hundred Fifty-five Thousand One Hundred Seventy Dollars ($155,170), paid in cash as of July 1, 1993.

(b) Return of Capital Contributions. In the event this Agreement is terminated or if a new agreement is not entered for 2026 NDDPC’s capital contribution shall be promptly returned to NDDPC by Midwest Dairy. Any portion of NDDPC’s capital contribution that is not promptly returned to NDDPC shall continue to be reflected as contributed capital of NDDPC on the books and records of Midwest Dairy until such capital is returned to NDDPC.

SECTION 6. MISCELLANEOUS PROVISIONS.

(a) Entire Agreement. This Agreement embodies the entire understanding between the parties hereto and shall supersede all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof. Neither party shall be liable or bound to the other in any manner by any warranties or representations not set forth herein.

(b) Assignment. Midwest Dairy may not, without NDDPC’s express written consent, assign, transfer or delegate any right or duty under this Agreement nor enter into any subcontract.

If NDDPC’s consents to a subcontract, Midwest Dairy shall enter into a written agreement with the subcontractor and that agreement must incorporate this contract and contain a term by which the subcontractor acknowledges the binding nature of this Agreement. Midwest Dairy is solely responsible for the performance of a subcontractor. Midwest Dairy does not have authority to contract for or incur obligations on behalf of NDDPC.

(c) Successors. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto.

(d) Notices. All notices or other communications required under this Agreement shall be by registered or certified mail and are complete on the date mailed when addressed as follows:

(i) If to NDDPC:

Sue Kleingartner, Chair North Dakota Dairy Promotion Commission 6032 60th St. SE Gackle, ND 58442

(ii) If to Midwest Dairy:

Corey Scott Midwest Dairy Association 2015 Rice Street St. Paul, Minnesota 55113

Or to such other address as such party shall designate by written notice to the other party.

Notice provided under this provision does not meet the notice requirements for monetary claims against the State of North Dakota or NDDPC under N.D.C.C. § 32-12.2-04.

(e) Merger and Modification. This Agreement constitutes the entire agreement between the parties. There are no understandings, agreements, or representations—oral or written—not specified within this Agreement. This Agreement may not be modified, supplemented, or amended, in any manner, except by written agreement signed by both parties.

(f) Severability. If any term of this Agreement is declared by a court having jurisdiction to be illegal or unenforceable, the validity of the remaining terms are unaffected, and, if possible, the rights and obligations of the parties are to be construed and enforced as if the Agreement did not contain that term.

(g) Applicable Law. This Agreement is governed by and construed in accordance with the laws of the State of North Dakota without reference to the choice of law provisions of North Dakota law. Any action to enforce this Agreement must be adjudicated exclusively in the State District Court of Burleigh County, North Dakota.

(h) Spoliation – Notice of Potential Claims. Midwest Dairy shall promptly notify NDDPC of all potential claims that arise or result from this Agreement. Midwest Dairy shall also take all reasonable steps to preserve all physical evidence and information that may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and grants to NDDPC the opportunity to review and inspect the evidence, including the scene of the accident.

(i) Attorney Fees. In the event a lawsuit is instituted by NDDPC to obtain performance due under this Agreement, and NDDPC is the prevailing party, Midwest Dairy shall, except when prohibited by N.D.C.C. § 28-26-04, pay NDDPC’s reasonable attorney fees and costs in connection with the lawsuit.

(j) Alternative Dispute Resolution – Jury Trial. NDDPC does not agree to any form of binding arbitration, mediation, or other forms of mandatory alternative dispute resolution. The parties have the right to enforce their rights and remedies in judicial proceedings. NDDPC does not waive any right to a jury trial.

(k) Confidentiality. Midwest Dairy shall not use or disclose any information it receives from NDDPC under this Agreement that NDDPC has previously identified as confidential or exempt from mandatory public disclosure. NDDPC shall not disclose any information it receives from Midwest Dairy that Midwest Dairy has previously identified as confidential and that NDDPC determines in its sole discretion is protected from mandatory public disclosure under a specific exception to the North Dakota open records law, N.D.C.C. § 44-04-18. The duty of NDDPC and Midwest Dairy to maintain confidentiality of information under this section continues beyond the term of this Agreement, or any extensions or renewals of it.

(l) Compliance with Open Records Law.

NDDPC may be required, under North Dakota’s open records law, to disclose to the public any records it receives from Midwest Dairy. Further, all records obtained or generated by Midwest Dairy or NDDPC under this contract may be open to the public. Midwest Dairy shall contact NDDPC immediately upon receiving a request for information that relates to this contract, and to comply with NDDPC’s instructions on how to respond to the request. The duty of the NDDPC and Midwest Dairy under this section continues beyond the term of this contract.

(m) Independent Entity. Midwest Dairy is an independent entity under this Agreement and is not an employee of NDDPC for any purpose, including but not limited to the application of the Social Security Act, the Fair Labor Standards Act, the Federal Insurance Contribution Act, the North Dakota Unemployment Compensation Law and the North Dakota Workforce Safety and Insurance Act. Midwest Dairy retains sole and absolute discretion in the manner and means of carrying out Midwest Dairy’s activities and responsibilities under this Agreement, except to the extent specified in this Agreement.

(n) Nondiscrimination and Compliance with Laws. Midwest Dairy shall comply with all laws, including those relating to nondiscrimination, accessibility, and civil rights. Midwest Dairy shall timely file all required reports, make required payroll deductions, and timely pay all taxes and premiums owed, including sales and use taxes, unemployment compensation, and workers' compensation premiums. Midwest Dairy shall have and keep current at all times during the term of this Agreement all licenses and permits required by law.

(o) Force Majeure. Midwest Dairy shall not be liable for delay or default caused by fire, flood, riot, acts of God or war if the event is beyond Midwest Dairy’s reasonable control and Midwest Dairy gives notice to NDDPC immediately upon occurrence of the event causing the delay or default or that is reasonably expected to cause a delay or default.

(p) Taxpayer ID. Midwest’s North Dakota tax ID number is: 0743860. Midwest Dairy’s federal employer ID number is: 41-0433125.

(q) Renewal. This Agreement will not automatically renew.

(r) Work Product. All work product, equipment, or materials created or purchased under this Agreement belong to NDDPC and must be delivered to NDDPC at NDDPC’s request upon termination of this Agreement. Midwest Dairy agrees that all materials prepared under this Agreement are “works for hire” within the meaning of the copyright laws of the United States and assigns to NDDPC all rights and interests Midwest Dairy may have in the materials it prepares under this Agreement, including any right to derivative use of the material. Midwest Dairy shall execute all necessary documents to enable NDDPC to protect its rights under this section.

(s) Prepayment. NDDPC will not make any advance payments before performance by Midwest Dairy under this Agreement.

(t) Payment of Taxes by NDDPC. NDDPC is not responsible for and will not pay local, state, or federal taxes. State sales tax exemption number is E-2001, and certificates will be furnished upon request by the purchasing agency.

(u) Effective date. NDDPC This Agreement is not effective until fully executed by both parties.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed. This Agreement is not effective until fully executed by both parties.

NORTH DAKOTA DAIRY MIDWEST DAIRY ASSOCIATION

PROMOTION COMMISSION

By: ________________________________ By: ______________________________ Sue Kleingartner Corey Scott Its Chair Its CEO

Date: ______________________________ Date: ____________________________

12/4/2024 12/4/2024

EXHIBIT A

PROGRAM SERVICES

Midwest Dairy will implement and administer programs intended to contribute to the betterment of North Dakota’s dairy farmers and the state’s dairy industry, including 1) the local components of the national Unified Marketing Plan (UMP) programs provided by Dairy Management, Inc., and National Dairy Council, 2) the national UMP funding commitment and 3) other promotion programs in North Dakota that reflect the Midwest Dairy strategic plan and that are consistent with the interests of North Dakota dairy producers. The UMP programs include:

• Pre-Competitive Export Services o Culinary and University partnerships o Partnerships for menu creation o Retail Partnerships o Promote U.S. ingredients in health and wellness segments o Trade Promotion o Address regulatory barriers

• International Branded Partnerships o Checkoff team works as a consultant with short list of partners in confidential and contractual basis

• Social Responsibility o Align dairy value chain on best in class practices, protocols, goals and metrics o Build and update dairy story to position the economic, environmental and social benefits of diary o Bring Undeniably Dairy campaign to next level of awareness, participation and two-way consumer conversation

• Sustainable Nutrition Affairs & Research o Integrate nutrition and environmental research to strengthen dairy’s position as essential to health and sustainable food systems o Drive pre-competitive science and research to fuel new dairy product and ingredient opportunities o Grow trust in dairy’s contributions to health and sustainable food systems o Engage pre-professional students and educations in sustainable nutrition dialogue o Address food security in local communities

• Youth Wellness o Consult with priority school districts and other partnerships to increase overall school meal participation and consumption o Utilize dairy optimization o Integrated Marketing & Communications o Continue to execute Undeniably Dairy campaign o Empower key dairy community stakeholders o Engage national and local farmer leadership and empower them to be strong advocates

• Dairy Product and Economic Research:

o Coordination of Research through the National Research Plan and the Midwest Dairy Foods Research Center

EXHIBIT B

ADMINISTRATIVE SERVICES

1. Administrative Services

a. Facilitate official meetings, actions and activities of NDDPC;

b. Advise the NDDPC on organizational options relative to available advertising, promotion, and nutrition related programs;

c. Provide NDDPC with information on industry related developments;

d. Represent NDDPC at inter-industry and other professional association activities;

e. Monitor activities of other NDDPC contractors.

f. Manage NDDPC official records.

2. Financial Services

a. Monitor the annual budget for NDDPC approval;

b. Assist in preparation of NDDPC financial and compliance audit;

c. Present recommendations on expenditure priorities;

d. Monitor ongoing financial position;

3. Reporting Services

a. Prepare financial reports for NDDPC as NDDPC may request;

b. Provide full and detailed progress reports of services provided by all NDDPC contractors.

4. Services to the Division of Midwest Dairy Association

Midwest Dairy will provide such administrative, financial and reporting services to the North Dakota Division of Midwest Dairy Association as may be agreed upon by Midwest Dairy and the North Dakota Division of Midwest Dairy Association.