EXHIBIT
10.4


 


GOLDEN
OVAL EGGS

GRAIN HANDLER OPERATING AGREEMENT

WITH FARMERS COOPERATIVE COMPANY


 


THIS
GRAIN HANDLER OPERATING AGREEMENT (Agreement) is dated as of
August 1, 2001 and is between Golden
Oval Eggs (GOE) and Farmers
Cooperative Company (FCC).


 


GOE
hereby designates FCC as the Grain
Handler for grain delivered by its farmer members or grain purchased through
the corn delivery alternative by its farmer members.


 


GOE
and FCC agree as follows:


 


DUTIES OF GOLDEN OVAL EGGS


 


•                                          GOE will provide FCC with a member delivery schedule prior to each fiscal
year based on the anticipated monthly member deliveries.


•                                          GOE will send delivery notices to its
members on a monthly basis.


 


Physical Delivery of Corn


 


•                                          GOE members will notify FCC a minimum of 15 days prior to their
delivery month to schedule a delivery week.


 


Corn Delivery Alternative


 


•                                          GOE members will notify FCC a minimum of 15 days prior to delivery
time of intent to use alternative.


•                                          The
GOE member will have until the end
of the month preceding their scheduled delivery month to establish a price. All
pricing by GOE members must be done during an active session of the CBOT
between the weekday hours of 9:30 a.m. and 1:15 p.m. The GOE member will have until 1:00 p.m. On the
last business weekday of the month preceding their scheduled delivery month to
establish a price.


•                                          If
the member has not established a corn price prior to the end of the month
preceding their scheduled delivery month, FCC’s
published closing bid price, plus $.05 per bushel, on the last day of the month
will be used.


•                                          If
a member does not notify FCC of
its intent to use the corn delivery alternative, the member will either have to
deliver the commitment at a time determined by FCC or purchase the commitment at a price to be determined by FCC.


•                                          GOE member must make payment to FCC by the 10th of the scheduled delivery
month.


•                                          If
a member of GOE does not pay for
the corn that they have contracted to purchase from FCC by the specified due date, FCC will provide a list of the nonpayments and GOE agrees to pay FCC for the contracted purchase upon
demand.


 

















 


Grain Handling Charges


 


•                                          Upon
commencement of delivering corn to a feed mill facility in the Thompson area, GOE agrees to pay $0.05 per bushel for handling charges based
on usage at its Thompson facility. The fees will be charged as bushels are
delivered for feed. The fees will be payable by the end of the following month
in which they are incurred.


•                                          GOE will have until the 10th of the month
following each delivery month to sell any corn bushels remaining in the grain
bank after FCC has delivered the
quantity of corn required by feed mill for the respective month. If the bushels
are not sold, $0.035 per bushel,
per month will be assessed on all remaining bushels.


 


Business
Office:


 


	
  340 Dupont Avenue NE,
  P.O. Box 615

  
	
  Renville, Minnesota
  56284

  
	
  320-329-8182

  
	
  320-329-3246

  	
  (fax)

  
	
  Website:

  	
  www.goldenovaleggs.com

  



 


DUTIES OF FCC


 


Physical Delivery of Corn


 


FCC will schedule deliveries for the
month based on the anticipated member deliveries provided by GOE. (Delivery preference will be given in
the order in which notifications are received by FCC).


 


•                                          Deliveries
will be accepted at FCC facilities
in Rake, Britt, Bradford and Greene, Iowa. Additional delivery points may be
added with authorization from FCC
and GOE.


 


Corn Delivery Alternative


 


•                                          FCC will sell corn to GOE members at FCC’s published closing bid price plus $.05 per bushel for the
member’s scheduled delivery month, up to one month prior to that time. (i.e. If
it is currently the month of March, members may buy corn for April at FCC’s published closing bid price for
April plus $.05 per bushel).


•                                          FCC will send out a sales contract at the
time of the sale indicating terms of sale. (This will be the only notice sent
for payment due). Payments from members are due by the 10th of the scheduled
delivery month.


 


Delivery Notification to Golden Oval Eggs


 


•                                          FCC will have the responsibility of
tracking GOE member deliveries and
make notification to GOE of the
status of those deliveries. FCC will
provide a list of the previous week deliveries to GOE every Monday by 9:00 a.m. via facsimile or e-mail.


•                                          FCC will reconcile GOE grain bank position and notify GOE of its position within 5 days following
each delivery month.


 


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Grain Handling Charges


 


•                                          A
transportation fee for delivering corn from FCC
facilities to Feed Mill will be established.  FCC and
GOE will agree on transportation
rates beforehand.


 


The term of this
agreement shall be from the date of the agreement to August 31, 2002.


 


 


	
  GOLDEN
  OVAL EGGS

  	
  FARMERS
  COOPERATIVE COMPANY

  
	
   

  	
   

  
	
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