"Cooperative" means SAKALA International and its franchise network, including all current and future franchise sites operating under SAKALA governance.
"Processor" means Agripure, a division or affiliate of Agriglobal Group S.A., and its designated facilities.
"Products" means moringa oil, vetiver oil, essential oils, and processed agricultural goods derived from Raw Materials.
"Raw Materials" means moringa leaves, vetiver roots, medicinal plants, peppers, peanuts, and other agricultural inputs sourced by or through the Cooperative.
"Certification" means documented competency in a specific processing skill, verified by Processor personnel, resulting in issuance of a SAKALA Processing Certificate.
"Network Standards" means the processing standard operating procedures (SOPs) applicable to all 344 planned franchise sites within the Cooperative network.
2.1 Initial term: five (5) years from date of execution by all parties.
2.2 Renewable by mutual written agreement for additional two (2) year terms.
2.3 Either party may exit with six (6) months written notice after Year 3, subject to the termination provisions of Section 14.
3.1 Processor shall send one (1) to two (2) qualified technicians to Cooperative sites for general processing instruction. Minimum forty (40) hours of instruction per quarter.
3.2 Cooperative shall send two (2) to four (4) youth to Processor facility for specialized certification training. Minimum one hundred sixty (160) hours per youth per certification track.
3.3 Cost: Zero ($0) cash exchange. Each party bears its own personnel costs, including travel, housing, and per diem for its own personnel.
3.4 Certification tracks available:
3.5 Each certification requires:
4.1 Cooperative delivers Raw Materials to Processor for processing into Products.
4.2 Cooperative retains ownership of Raw Materials and Products at all times. This is a tolling arrangement: Processor provides processing services only and at no point acquires title to Cooperative goods.
4.3 Processing volume allocation and profit share shift based on Cooperative youth certification levels:
| Certification Status | Cooperative Processes | Processor Processes | Processor Profit Share | Cooperative Profit Share |
|---|---|---|---|---|
| Phase 1 0 youth certified |
30% | 70% | 60% | 40% |
| Phase 2 2-3 youth certified |
50% | 50% | 45% | 55% |
| Phase 3 5+ youth certified |
75% | 25% | 30% | 70% |
| Phase 4 All youth certified |
90% | 10% | 15% | 85% |
| Phase 5 Independent |
100% | 0% | 0% (advisory only) | 100% |
4.4 Phase transitions are triggered by certification milestones, not by calendar dates. Cooperative may advance to any phase upon meeting the stated certification threshold.
4.5 Processor acknowledges that accelerated training results in accelerated phase transition, and that this outcome is consistent with the purpose of this partnership.
In exchange for Phase 1-2 majority profit share, Processor provides the following:
5.1 Processing equipment specifications and sourcing guidance for Cooperative's own facility development.
5.2 Quality testing and laboratory validation for the first certified batch of each Product type.
5.3 Export documentation templates, including customs declarations, phytosanitary certificates, and CBERA compliance documentation.
5.4 Direct buyer introductions, subject to the terms of Section 8.
5.5 On-site equipment installation assistance when Cooperative acquires its own processing equipment.
5.6 Development of Network-Wide Processing Standards applicable to all 344 planned franchise sites within the Cooperative network.
5.7 Network Standards become the property of Cooperative upon delivery and may be used, modified, and distributed across the Cooperative network without restriction or additional compensation.
6.1 During Phases 1 through 3, processing occurs at Processor's existing facility.
6.2 Processor may, at its option, lease processing equipment to Cooperative under a separate Equipment Lease Agreement (see Exhibit C).
6.3 Any Equipment Lease shall include a purchase option at depreciated book value after five (5) years.
6.4 Equipment installed at Cooperative sites becomes Cooperative property upon exercise of the purchase option.
7.1 Processor establishes quality standards for each Product type, including grading criteria, testing protocols, and documentation requirements.
7.2 Quality standards are documented in writing and transferred to Cooperative.
7.3 Processor performs quality validation for each new Product certification.
7.4 After certification of a Product, Cooperative self-validates using the transferred standards.
7.5 Processor retains the right to audit Cooperative quality on a quarterly basis during Phases 1 through 4.
8.1 Processor introduces Cooperative to Processor's existing export buyers.
8.2 All introductions shall include: buyer name, contact person, email address, telephone number, purchase history, preferred products, and pricing terms.
8.3 Cooperative may communicate directly with introduced buyers from the date of introduction.
8.4 Processor shall not serve as exclusive intermediary between Cooperative and any buyer.
8.5 Cooperative may independently develop buyer relationships without Processor involvement or notification.
8.6 For buyer relationships initiated by Processor introduction: Processor receives a ten percent (10%) introduction fee on the first twelve (12) months of revenue from that buyer. The fee expires automatically after twelve (12) months. No renewal or extension.
9.1 All training materials, process documentation, SOPs, quality manuals, and certification curricula created during this partnership become joint property of Cooperative and Processor.
9.2 Cooperative has an irrevocable, perpetual right to use, modify, and distribute all transferred knowledge within its network.
9.3 Processor retains the right to use the same knowledge in its own operations.
9.4 Neither party may license transferred knowledge to third parties without prior written consent of the other party.
9.5 All knowledge transfer shall be documented via:
10.1 Processor provides a monthly processing report including: volumes received, volumes processed, volumes returned, quality grades assigned, rejection rates, and pricing applied.
10.2 Cooperative has the right to audit Processor's processing costs with thirty (30) days written notice, not to exceed two (2) audits per calendar year.
10.3 Audit scope covers: labor costs, equipment usage, utilities, overhead allocation, and margin calculation.
10.4 Audit costs are borne by the requesting party unless a discrepancy exceeding ten percent (10%) is found, in which case Processor bears all audit costs.
11.1 During the term and for twenty-four (24) months after termination, Processor shall not establish, fund, or materially support a competing youth agricultural cooperative using knowledge, processes, or network information gained through this partnership.
11.2 Processor may continue all existing business operations unrelated to Cooperative's network.
12.1 Processor represents that it has the authority to enter into this agreement and the capacity to perform its obligations hereunder.
12.2 Cooperative represents that it has the authority to enter into this agreement and that the EIN holder has approved the terms herein.
12.3 All parties acknowledge that this is a partnership of equals, not an employment, agency, or franchise relationship. No party has the authority to bind another without express written consent.
13.1 Any dispute arising under this agreement shall first be submitted to good-faith negotiation between the parties for a period not to exceed thirty (30) days.
13.2 If unresolved, the dispute shall be submitted to mediation by a mutually agreed mediator for a period not to exceed sixty (60) days.
13.3 If still unresolved, the dispute shall be submitted to binding arbitration under the rules of the International Chamber of Commerce, seated in Port-au-Prince, Haiti.
14.1 Either party may terminate this agreement with six (6) months written notice after Year 3.
14.2 Upon termination:
14.3 Processor acknowledges that partnership success is measured by Cooperative's eventual independence, and that termination due to Cooperative self-sufficiency constitutes the intended outcome of this agreement.
IN WITNESS WHEREOF, the undersigned have executed this Term Sheet as of the date set forth below.