EXHIBIT 10.8


 


JOINT VENTURE
AGREEMENT


 


BETWEEN

GOLDEN OVAL EGGS

A
DIVISION OF MIDWEST INVESTORS OF RENVILLE, INC.

AND

MIDWEST INVESTORS OF IOWA,
COOPERATIVE


 


 


Midwest
Investors of Iowa, Cooperative (“Midwest Iowa”), an Iowa Chapter 501
cooperative association and Midwest Investors of Renville, Inc. (“Golden
Oval”), a farmer owned Minnesota cooperative association, (individually
referred to as “Venturer” and collectively the “Venturers”) hereby agree to
proceed on a joint venture basis to process Iowa agricultural products and
other products under the terms of this Agreement (herein the “Project”).


 


1.                                       Midwest Iowa
Obligations.  Midwest Iowa agrees to
select a site or sites suitable for egg production and processing or other
processing facilities as jointly agreed upon by Midwest Iowa and Golden
Oval.  Upon identification of a suitable
site or sites approved by Golden Oval, Golden Oval agrees to provide financing
secured by mortgage and other security as necessary for the site acquisition.


 


Midwest Iowa
agrees to pursue and obtain all permitting, zoning, conditional use, licensing
and other approvals necessary for the processing operations.  Golden Oval agrees to advance or reimburse
all costs for the permitting, zoning approvals, licensing, and other approvals.


 


2.                                       No Interest of
Land in Golden Oval.  Midwest Iowa and
Golden Oval agree that under this agreement Golden Oval shall have no interest
in any agricultural land in Iowa and to the extent Golden Oval is alleged or
deemed to have an interest in agricultural land in Iowa during the term of this
agreement, Golden Oval shall transfer the interest to Midwest Iowa.


 


3.                                       Golden Oval
Obligations.


 


(a)                                  Golden Oval agrees to
construct and operate all Project-related processing and other facilities on
the sites acquired by Midwest Iowa.  The
purpose of the Project shall be in part to further process Iowa agricultural
products and other products.


 


(b)                                 Golden Oval shall, if
requested, provide financing to Midwest Iowa to purchase any approved sites.


 


(c)                                  Golden Oval shall
reimburse any permitting or approval expenses incurred by Midwest Iowa upon
request.


 

















 


4.                                      Joint
Efforts Towards Project. 
Midwest Iowa and Golden Oval agree that each party will use best efforts
to fulfill the purposes of the joint venture including the construction and
operation of the Project.


 


5.                                      Term.  The term of this joint venture shall be 15
years and shall automatically be renewed for an additional 15 year period
unless one of the parties notifies the other in writing that the joint venture
shall not be renewed.


 


6.                                      Right
of First Refusal Upon Termination. 
Each Venturer who desires to transfer ( “Selling Partner”) an interest
necessary for the joint venture (“Venture Property”), may transfer all or part
of its Venture Property to a person (the “Third Party Buyer”) who has made a
bona fide offer (as defined below in Section 6(d)) for all or part of such
Venture Property (the “Offered Venture Property”) owned by the Selling
Venturer, provided that the Selling Venturer grants the rights of first refusal
to the other Venturer as described below:


 


(a)                                  If
a Selling Venturer proposes to accept a bona fide offer for any Offered Venture
Property, the Selling Venturer shall send (i) a written notice to the other
Venturers which shall contain all of the material terms of the bona fide offer
including, without limitation, the name and address of the offeror and the
proposed transferee, the purchase price, the terms and conditions of payment,
the date on which the sale is to be made, and (ii) evidence furnished in
writing to the Selling Venturer by the Third Party Buyer regarding the Third
Party Buyer’s financial ability to consummate the proposed purchase or similar
information reasonably requested by the other Venturer.


 


(b)                                 The
other Venturer shall have the right, but not the obligation, to purchase the
Offered Venture Property from the Selling Venturer on the terms set forth in
the bona fide offer at a closing that shall occur on the date 60 days after the
date of the notice given pursuant to Section 6(a)(i); provided, however, that
the other Venturer shall have the right to pay the purchase price in cash
regardless of the manner of payment prescribed in the bona fide offer.  The other Venturer shall exercise such right,
if at all, by giving the Selling Venturer written notice that they propose to
purchase the Offered Venture Property by the date 20 days after the date of the
notice given pursuant to Section 6(a)(i), which notice shall constitute an
irrevocable binding commitment to the Selling Venturer.


 


(c)                                  If
no notice is given within the 20-day period provided in subsection (b) above by
the other Venturer to the Selling Venturer that they propose to purchase the
Offered Venture Property, the Selling Venturer may sell the Offered Venture
Property to the Third Party Buyer provided that the sale is made substantially
in accordance with the terms of the bona fide offer and the sale is consummated
by the date 180 days after the date of the bona fide offer.


 


(d)                                 For
purposes of this Agreement, “bona fide offer” shall mean a written bona fide
offer


 

















 


from a person or entity to acquire a Venture Property from a Selling
Venturer within 180 days of the date of such offer.


 


7.                                      Merger
Put and Call Rights.


 


(a)                                  If
Golden Oval shall propose a merger or consolidation of the joint venture with
or into any other entity (herein a “Business Combination”) and Midwest Iowa
delivers to Golden Oval a written objection to such merger or consolidation and
Golden Oval desires to consummate the merger or consolidation, Midwest Iowa shall
sell to Golden Oval or its designee and Golden Oval or its designee shall
purchase from Midwest Iowa for cash for the fair market value of Midwest Iowa’s
Venture Property on the date of such notice to Midwest Iowa.  Fair market value shall be the average of
the amounts determined by three qualified independent appraisers, one appointed
by Golden Oval, one appointed by Midwest Iowa and the third appointed by the
first two appraisers, unless one valuation is more than 25 percent greater or
less than the average of the other two, in which case the average of the other
two shall govern.  The appraisers shall
be instructed to complete the appraisal within 30 days after their appointment
and the closing shall occur 30 days thereafter.  At the closing, Midwest Iowa will transfer the Venture Property
free and clear of all liens, claims and encumbrances except any liens, claims,
or encumbrances in favor of Golden Oval and any appraisal must reduce the fair
market values of Midwest Iowa’s Venture Property by the amount of Golden Oval’s
liens, claims, and encumbrances.


 


(b)                                 If
Midwest Iowa shall propose a Business Combination, such action shall
immediately trigger Golden’s Oval’s rights outlined in Section 7(a) above
except that Golden Oval shall be entitled to pay to Midwest Iowa the calculated
purchase price for Midwest Iowa’s Venture Property on financing terms as
determined by Golden Oval in its sole discretion; provided, however that such
purchase price shall in any event be fully paid to Midwest Iowa within five (5)
years after the date such Venture Property is conveyed to Golden Oval.  If Golden Oval elects not to exercise its
rights hereunder to purchase Midwest Iowa’s Venture Property, the payment to
Golden Oval for Golden Oval’s Venture Property shall in all cases be cash at
closing.


 


8.                                      Miscellaneous.


 


(a)                                  Profits
And Losses.  Profits will be
distributed on a cooperative basis and in a manner that permits Midwest Iowa to
pay fixed costs of ownership of the Property, including without limitation (a)
insurance, (b) taxes, (c) costs of debt servicing on debt specifically related
to acquisition of the Property, and (d) any income taxes of Midwest Iowa.  All other profits shall be distributed to
Golden Oval.  Golden Oval shall advance
such sums of money as may be required to carry out the purposes of the Project.


 


(b)                                 Control
of Project.  Control of the Project
shall be vested solely with Golden Oval. 
Golden Oval shall provide personnel necessary to manage the
Project.  All decisions relating to the
activities of the parties pursuant to this Agreement, including, without
limiting the generality hereof, any and all decisions with respect to plans for
and construction of the new buildings to be erected


 


3

















 


for, and operation of, the Project, shall be made by designated Golden
Oval personnel.


 


(c)                                  Banking.  The funds for the Project shall be kept in
the Golden Oval bank account or in any other manner which may be agreed upon
between the parties, to be withdrawn upon checks signed by an officer of Golden
Oval


 


(d)                                 Contracts.  All contracts or commitments in connection
with the Project must be signed by Golden Oval, and if requested by Golden
Oval, or as otherwise required, shall be jointly signed by Midwest Iowa.


 


(e)                                  Insurance.  Golden Oval, agrees to purchase and carry in
full fore and effect at all times during the duration of this Agreement
commercial general liability insurance covering the Project in a reasonable and
customary amount, which policy shall include coverage for bodily injury,
property damage, and personal injury, and shall name Midwest Iowa as an
additional insured.


 


(f)                                    Waiver.  Notwithstanding anything herein to the
contrary, Golden Oval and Midwest Iowa hereby release one another and their
respective officers, directors, and employees from any and all liability (to
the other or anyone claiming through or under them by way of subrogation or
otherwise) for any loss or damage covered by property insurance or coverable by
customary form of policy of the insurance required by the preceding paragraph,
even if such loss or damage shall have been caused by the fault or negligence
of the other party, or anyone for whom such party may be responsible.


 


(g)                                 Notices.  Any notice required by this Agreement shall
be given by registered or certified mail, addressed to the party to whom the
notice is intended to be given at the last known address of said party or at
such other address as the parties previously have furnished, in writing, to the
other.


 


(h)                                 Modifications.  No change or modification of this Agreement
shall be valid or binding upon the parties, nor shall any waiver of any term or
condition be deemed a waiver of the term or condition in the future, unless the
change or modification or waiver shall be in writing signed by the parties.


 


(i)                                     Binding
Effect.  This Agreement shall inure
to the benefit of and be binding upon the parties, their legal representatives
and assigns.


 


(j)                                     Governing
Law.  This Agreement shall be
governed by the laws of the State of Minnesota.


 


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  MIDWEST INVESTORS OF IOWA, COOPERATIVE

  	
  GOLDEN OVAL EGGS, A DIVISION OF MIDWEST

  INVESTORS OF RENVILLE, INC.

  
	
   

  	
   

  
	
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