EXHIBIT 10.2


 


StateLine Cooperative

Burt, Iowa

FEED MANUFACTURING AGREEMENT


 


This agreement, made
February 15, 2001, by and between StateLine Cooperative, with a mailing
address of 120 Walnut St., Burt, Iowa 50522 (hereinafter referred to as
“Feedmill”) and Golden Oval Eggs, a cooperative association organized under the
laws of the State of Minnesota, with a mailing address of P.O. Box 615, 340
Dupont Ave. NE, Renville, MN 56284 (hereinafter referred to as “Golden Oval
Eggs.”).


 


RECITALS


 


WHEREAS, Golden Oval Eggs desires to engage
Feedmill to manufacture various types of chicken feed according to Golden
Oval’s specifications for various ages of laying hens (all such varieties being
hereinafter referred to as “the Feed”), to be delivered to Golden Oval Eggs,
Thompson, Iowa facility.


 


WHEREAS, Feedmill desires to manufacture said
feed for Golden Oval Eggs.


 


NOW, THEREFORE, for and in consideration of
the premises and based upon the mutual covenants, conditions, and promises set
forth herein, the parties hereby agree as follows:


 


1.                                      TERM.


 


The term of this agreement shall become effective on
February 15, 2001 and
continue through August 31, 2002, unless extended by mutual written
agreement of the parties.


 


2.                                      FEED
MANUFACTURING AND PURCHASING OBLIGATIONS.


 


A.                                   Golden
Oval Eggs agrees to purchase from Feedmill and Feedmill agrees to manufacture
and sell to Golden Oval Eggs an amount of feed necessary to feed all of the
hens and pullets at the Thompson, Iowa Facility of Golden Oval Eggs.


 


B.                                     Feedmill
shall manufacture the feed at its plant in Buffalo Center, Iowa; provided,
however, that Feedmill shall have the option to Manufacture the feed at no
additional cost to Golden Oval Eggs at any other facilities owned or operated
by Feedmill.


 


3.                                      SPECIFICATIONS
AND OTHER INFORMATION; CONFIDENTIALITY.


 


A.                                   Feedmill
shall formulate and manufacture the feed utilizing the ingredient formulas to
meet the final Specifications provided by Golden Oval Eggs. Golden Oval Eggs
shall have the right to amend its ingredient formulas and specifications and
other information during the term hereof provided that no such amendment of
specifications shall be effective without consent of Feedmill (which consent
shall not be unreasonably withheld) and until Feedmill has had reasonably
sufficient time to purchase any necessary new ingredients and obtain any
necessary permits.


 


B.                                     Feedmill
shall maintain confidentiality of Golden Oval Eggs ration formulation.


 


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4.                                      DELIVERY.


 


Feedmill agrees to deliver to Golden Oval Eggs,
Thompson, Iowa facility the types and quantities of the feed requested,
provided that Golden Oval Eggs has given Feedmill at least twenty-four (24)
hours prior notice of the requested delivery.


 


A.  Feedmill
shall schedule production so as to make the Feed available within the
delivery time frame requested by Golden Oval Eggs.


 


B.  Orders for
which 24 hours notice is not given, but within the Feedmill’s ability to
provide delivery, shall cause a $1 per ton ($24.00 minimum) late charge to be
added per load order which shall be paid by Golden Oval Eggs.


 


C.  Golden Oval
Eggs shall provide an estimate of the total anticipated tonnage by month for
the contract period.  (Attachment
A)


 


5.                                      INGREDIENT
SUPPLY.


 


Feedmill shall be
responsible for purchasing all ingredients necessary to manufacture the Feed.
To the extent practicable, Feedmill shall comply with any written instructions
from Golden Oval Eggs and will from time to time forward contract for specific
ingredients at the direction of Golden Oval Eggs.


 


6.                                      FEED PRICING


 


A.  The purchase price of the Feed
manufactured and sold hereunder shall be the sum of the following:


 


1.                                       Corn
shall be invoiced at $10 per bushel above the closing Feedmill bid price which
shall be the average of the closing bid price the Tuesday and Thursday of the
previous week of manufacture;


2.                                       SBM
shall be invoiced at Feedmill cost of purchase plus 3/4% which shall be the
average of the Feedmill cost of purchase on Tuesday and Thursday of the
previous week


3.                                       All
other ingredients shall be invoiced at Feedmill cost of purchase plus 3/4%;


4.                                       $9.00
per ton fee for grinding, mixing and delivery;


 


B.  A fuel adjustment on delivery may be
added or subtracted should fuel rise or drop from the current $1.60 per gallon
retail price on diesel fuel per Attachment B.


 


C.  Feedmill will provide by fax or e-mail
to Golden Oval on Friday of every week prior to 4:00 p.m., for the fixing of
ingredient prices for the following week of deliveries.


 


D.  Prices in this section may be adjusted
pursuant to Section 12C of this agreement.


 


7.                                      PAYMENT TERMS.


 


A.                                   Feedmill
shall invoice Golden Oval Eggs weekly for deliveries made during that week. All
invoices shall be paid by Friday of the following week following purchases.


 


8.                                      QUALITY CONTROL.


 


Feedmill shall maintain records of its quality control
tests, which tests shall be in accordance with Golden Oval Eggs standard
quality assurance program. If requested by Golden Oval Eggs within 90 days
after


 


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delivery of any batch of Feed, Feedmill shall ship to
Golden Oval Eggs a retained sample and specification sheet for such batch.
Feedmill will also keep a retained sample for the period of time required by
applicable law. Feedmill shall also maintain a printed record of the weighing
of each added dry ingredient into the batch as the feed is manufactured, by a
scale licensed by the State of Iowa for sale of bulk commodities.


 


9.                                      LABELING.


 


All labeling and packaging, if required, shall comply
with all applicable laws and regulations. Feedmill shall be fully responsible
for any violation of labeling regulations pertaining to medicated feed or other
statements required by law.


 


10.                               RECORDS.


 


Feedmill agrees to maintain records relating to the
production and shipping of the Feed as reasonably requested by Golden Oval
Eggs.


 


11.                               WARRANTIES.


 


Feedmill warrants that the Feed manufactured, produced
and shipped hereunder (a) shall be in conformance with the formulas and
specifications furnished by Golden Oval Eggs; (b) will not be
(i) adulterated or misbranded within the meaning of the Federal Food, Drug
and Cosmetic Act (the “Act”), any Iowa law applicable to animal feeds, or the
regulations issued under any of the foregoing (including specifically, but not
limited to, regulations pertaining to pesticides and medications) or (ii) an
article which may not, under the provisions of Section 404 and 505 of
the Act, be introduced into interstate commerce; and (c) will conform to all
similar governmental regulations regarding processing, labeling, and delivery
of Feed.


 


12.                               FORCE MAJEURE.


 


A.  Each party shall be excused for any
inability to perform or delay in performance to the extent that such inability
for delay is due to any cause or causes beyond its reasonable control,
including, but not limited to, an act of God, storm, flood, earthquake, labor
strike, or other labor stoppage, equipment failure, rebellion, riot, sabotage,
fire, explosion drought, or government act or regulation.


 


B.  A party seeking to rely upon
subparagraph (A) above shall be required to immediately notify the other party
of the cause of its inability to perform or delay in performance, specifying
the nature and anticipated duration thereof. The affected party shall use
reasonable efforts to remove the cause of the inability to perform or delay in
performance.


 


C.  In the event Feedmill seeks to use
subparagraph (A) above, Feedmill shall have the right, subsequent to
notification, to temporarily adjust the base price involved in the manufacture
of feed until the delay can be corrected and Feedmill can resume manufacturing
on a regular schedule at the Buffalo Center mill. Golden Oval Eggs shall
have the right subsequent to notification and in the event the base price is
raised, to use another supplier until Feedmill can resume the manufacture of
feed at the agreed upon base price.


 


13.                               DEFAULT.


 


A.  In the event either party defaults in
the performance of its duties and obligations hereunder, the non-defaulting
party may give written notice to the defaulting party specifying the term or
condition which is the basis of the default. If the defaulting party does not
correct or cure the


 


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default within ten (10) days after receipt of said
notice, the non-defaulting party may immediately terminate this Agreement by
giving written notice of such termination.


 


B.  If the Feedmill cannot or will not
conform with Golden Oval Eggs existing or amended formulations and
specifications, Golden Oval Eggs has the right to terminate the agreement.


 


C.  Golden Oval Eggs has the right to
terminate this agreement due to late deliveries that affect flock performance
or nutrition.


 


D.  In the event either party files a
voluntary petition in bankruptcy, has an involuntary petition filed against it,
is insolvent, has a receiver or trustee appointed for any of its assets, or
makes an assignment for the benefit of creditors, the other party may
immediately terminate this Agreement by giving written notice; provided,
however, that in such a case the notice shall not be effective if the
proceeding, appointment or a assignment has been dismissed or stayed within
thirty (30) days or if adequate assurance of ability to perform under this
Agreement have been received by the other party thirty (30) business days after
it gave written notice.


 


E.  The right of either party to terminate
this Agreement under this Paragraph 13A shall be in addition to any other
rights and remedies at law or in equity, including the right to specific
performance, that may accrue to the terminating party because of the other
party’s default hereunder.


 


F.  The parties to this contract agree that
the sole remedy for resolution of any and all disagreements or disputes arising
under or related to this contract shall be through arbitration proceedings
before the National Grain and Feed Association (NGFA) pursuant to the NGFA
Arbitration Rules. The decision and award determined through such arbitration
shall be final and binding upon the Feedmill and Golden Oval Eggs. Judgment
upon the arbitration award may be entered and enforced in any court having
jurisdiction thereof. (Copies of the NGFA Arbitration Rules are available from
the NGFA, 1202 New York Aye, NW, Suite 830, Washington, DC 20005, or on the
Website http://www.ngfa.org/).


 


14.                               NOTICES.


 


Any notice required or permitted under this Agreement
shall be in writing and delivered personally or sent by prepaid certified or
registered U.S. Mail duly addressed as follows:


 


To Feedmill: StateLine Cooperative P.O. Box 67 Burt,
Iowa 50522.

To Golden Oval Eggs: Golden Oval Eggs, Box 615, Renville, MN 56284.


 


Or to such other address as either party may hereafter
furnish in writing to the other party.


 


15.                               MISCELLANEOUS.


 


A.  Feedmill is an independent contractor
engaged by Golden Oval Eggs to perform services under this Agreement and
neither party is hereby authorized to act as an agent of the other for any
other purpose whatsoever.


 


B.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa.


 


C.  Feedmill shall pay any Iowa tax assessed
against the Feed.


 


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D.  It is expressly understood by the
parties that the terms and conditions of this contract are exclusively between
Golden Oval Eggs and its heirs, successors and assigns and Feedmill and its
heirs, successors and assigns.


 


E.  The failure of either party at any time
to enforce any provision of this Agreement, exercise its rights under any
provision, or require a certain performance of any provision, shall in no way
be construed as a waiver of such provision, nor in any way affect the validity
of this Agreement or the right of the party thereafter to enforce the same or
any other provision.


 


F.  If any provision of this Agreement shall
be held to be unenforceable or invalid for any other reason whatsoever, the
remaining provisions shall continue in force.


 


G.  The terms and conditions hereof shall
extend to and be binding upon and inure to the benefit of the parties hereto
and their heirs, successors and assigns. An assignment or transfer of this
Agreement shall require the advance written approval of the other party.


 


H.  This Agreement constitutes the entire
understanding between the parties and supersedes all other Agreements between
the parties with respect to the subject matter hereof. There are no
understandings, representations, or warranties of any kind, express or implied,
not expressly set forth herein. No modification of this Agreement shall be
effective unless in writing and signed by the parties.


 


I.  The headings appearing in this Agreement
have been inserted for the purposes of convenience and ready reference. They do
not purport to and shall not be deemed to define, limit, or extend the scope or
intent of the provisions to which they appertain.


 


 


	
  /s/ Dana Persson

  	
   

  	
  /s/ Larry Sterk

  
	
  Dana Persson

  	
   

  	
  Larry Sterk

  
	
  President & Chief
  Executive Officer

  	
   

  	
  General Manager

  
	
  Golden Oval Eggs

  	
   

  	
  StateLine Cooperative

  
	
   

  	
   

  	
   

  
	
  Date

  	
  2/15/01

  	
   

  	
   

  	
  Date

  	
  2/20/01

  	
   

  
							



 


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  STATELINE
  COOPERATIVE

  
	
   

  
	
  P.O.
  BOX 67, BURT, LA 50522, PH: 515-924-3555

  
	
  Armstrong
  712-864-3897 Bancroft
  515-885-2642 Buffalo Center 515-562-2404 Burt 515-924-3241 N. Burt
  515-924-3266 N. Burt Ag Center 515-924-3859 Fenton 515-889-2251 HaIfa
  712-866-2671 Lakota 515-886-2461 Ledyard 515-646-2135
  Lone Rock 515-925-3590 Ringsted 712-866-0581

  
	
  Swea City 515-272-4406

  



 


September 5, 2002


 


Terry Heying, Chief Operating Officer

Golden Oval Eggs

1800 Park Avenue E

P 0 Box 615

Renville, Minnesota 56284


 


Dear Mr. Heying,


 


This letter of
understanding is to provide an extension to the Feed Manufacturing Agreement
existing between Golden Oval Eggs, a cooperative in Renville, MN, and StateLine
Cooperative, a cooperative in Burt, IA, dated February 15, 2001, and
scheduled to continue through August 31, 2002. This letter is to provide
an extension of unlimited time to that agreement, with a ninety (90) day notice
of cancellation by either party. All other terms in the agreement to remain the
same.


 


Furthermore, StateLine
Cooperative agrees to accept the responsibility of providing an alternate
source of toll milling services for feed manufacturing and timely delivery to
the Golden Oval facility at Thompson, should the lease agreement between
StateLine Cooperative and the Buffalo Center Cooperative be cancelled. The
pricing of corn and the freight rate for delivery of feed to the Thompson site
will be renegotiated in good faith by both parties, should this provision be
used.


 


Upon StateLine
Cooperative acquiring the Buffalo Center Cooperative mill in Buffalo Center,
IA, the Feed Manufacturing Agreement will be renegotiated to provide for
modifications to the mill to meet Golden Oval ingredient requirements.


 


Upon StateLine
Cooperative acquiring the Buffalo Center Cooperative mill in Buffalo Center,
IA, the Feed Manufacturing Agreement will be renegotiated to provide for
modifications to the mill to meet Golden Oval ingredient requirements.


 


 


	
  Acceptance 9/6/02

  	
  Acceptance

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Terry Heying

  	
   

  	
  /s/ Daryl Meyer

  	
   

  
	
  Terry Heying

  	
  Daryl Meyer

  
	
  Chief Operating Officer

  	
  Feed Dept. Manager

  
				



 


cc:  Dana
Persson