EXHIBIT 10.5


 


CERTAIN
INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPERATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406.


 


LITTER
HANDLING AGREEMENT


 


This Agreement (“Agreement”) is effective as of the 1st day
of January, 2002 by and between Farmers Cooperative Company, an Iowa
cooperative association (“FC”) and Golden Oval Eggs, a division of Midwest
Investors of Renville, Inc., a Minnesota cooperative association (“GOE”).


 


WHEREAS, pullets and layer hens owned by GOE generate litter which must
be removed periodically; and


 


WHEREAS, FC possesses certain tangible and intangible assets which can
facilitate litter removal; and


 


WHEREAS, GOE has requested that FC provide certain services to assist
GOE in removing and land apply this litter on the terms provided in this
Agreement.


 


NOW, THEREFORE, the parties agree as follows:


 


1.                                       Description
of Services.  During the term of
this Agreement, FC shall provide to GOE the following litter removal services:


 


(a)                                  Soil
and litter testing;


(b)                                 Record
keeping as required by the Iowa Department of Agriculture;


(c)                                  Billing
and collection;


(d)                                 Sales
and marketing;


(e)                                  Removal
of litter from barns;


(f)                                    Transportation
and disposal of litter; and


(g)                                 Any
and all land application of litter required to be in accordance with any
applicable Iowa Department of Agriculture regulations.


 


FC shall have the right and obligation to perform the above services
with respect to GOE’s existing Thompson site and related pullet facilities, and
any newly constructed buildings associated therewith.  In addition, FC shall have a right of first refusal on performing
the above services and removing litter under the terms of this Agreement from
any newly constructed or hereafter acquired GOE sites, facilities or buildings
located within FC’s trade territory.


 


2.                                       Personnel.  FC shall make available such of its
personnel (either employees and/or contractors) and facilities as may be
necessary to perform the services outlined in paragraph 1 above.


 


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3.                                       Condition
of Litter; Facilities.  GOE agrees
that the litter to be removed by FC hereunder shall be free of any pests,
diseases or contaminates, recognizing that the litter may without further
processing be land applied by FC, which could give rise to the contamination or
infestation of fields or adjoining properties. 
GOE shall indemnify FC against any liability or costs (including
reasonable attorney fees) arising from damages to person or property arising
from the litter being contaminated.  GOE
further agrees that the litter shall have a moisture content of not more than
35% at time of removal, understanding that excessive moisture will increase
FC’s cost to remove litter from GOE’s facilities.  If the moisture level of a load exceeds 35%, the parties shall
negotiate an appropriate price adjustment. 
If the parties are unable to agree upon an appropriate price, then at
FC’s option GOE shall be required to make other arrangements for the removal of
the litter having excessive moisture. 
FC shall not be required to remove litter from any facility or building
under a federal, state or local quarantine.


 


4.                                       Title
to Litter.  The title to and right
to immediate possession of the litter removed from GOE barns transfer to FC
upon removal and loading into transportation vehicles under FC’s control.


 


5.                                       Compensation
for Litter.  For removal occurring
between April 1, 2001 and March 31, 2002, FC will pay GOE a fee of [***] per ton of litter removed.  For removal occurring between April 1,
2002 and March 31, 2003, FC will pay GOE a fee of [***] per ton of litter removed.  For the balance of the term of this
Agreement, FC will pay GOE a fee of [***]
per ton of litter removed.  Such payment
shall be made within thirty (30) days of litter being transported from GOE’s
sites.


 


Notwithstanding the foregoing pricing arrangement, should the removal
or disposal (including land application) become subject to additional federal,
state or local regulations or other factors beyond FC’s control (including,
without being limited hereto, GOE adding phytase to feed which greatly reduces
the phosphorus content of the litter, or the practical market area of FC for
the litter becoming so saturated with livestock (and therefore animal waste)
that FC must transport the litter greater distances) develop, which materially
impact FC’s costs or ability to perform the services provided for hereunder,
then at FC’s request the parties agree that they shall in good faith attempt to
renegotiate the terms of this Agreement. 
If the parties are unable to agree upon mutually acceptable revisions to
the Agreement, then upon two (2) months advance written notice to the other
party, either FC or GOE may terminate this Agreement.  Upon such termination, this Agreement shall be canceled and of no
further force or effect except as to the fulfillment of obligations for
performance or payment having accrued prior to the date of termination.


 


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6.                                       Regulatory
Compliance.  In performing the
services under this Agreement, FC and its employees shall comply with all
local, state and federal rules and regulations applicable to removal,
transportation, piling, and application of litter.  FC shall indemnify GOE against any liability or loss suffered by
GOE as a result of FC failure to comply with these regulations while performing
services under this Agreement.


 


7.                                       Independent
Contractor Status.  Nothing
contained in this Agreement shall constitute making either party hereto the
agent of the other party for any purpose. 
FC and its employees shall be deemed to be independent contractors with
full control over the manner and method of performance hereunder, except as
otherwise provided herein.  During the term
of this Agreement, any of the employees of FC which are rendering services on
behalf of GOE under this Agreement, shall remain employees of FC and shall
continue to be paid by FC and to enjoy the benefits to which they are entitled
as employees of FC.


 


8.                                       Separate
Entities.  GOE and FC are separate
entities, and nothing in this Agreement or otherwise shall be construed to
create any rights or liabilities of either party hereto for any rights,
privileges, duties or liabilities of the other party to this Agreement, except
to the extent otherwise provided herein or in any other agreement between the
parties.


 


9.                                       Term.  The term of this Agreement shall commence
January 1, 2002, and end December 31, 2012.  This Agreement shall be reviewed on or before December 31,
2011.  Except as otherwise set out
herein, this Agreement may be terminated only by mutual written consent of GOE
and FC.


 


10.                                 Uses.  Initially FC will be land applying the
litter as a fertilizer for its member-patrons. 
However, if FC is able to market or use the litter for a purpose other
than land application, FC shall have a right to do so under this
Agreement.  Should GOE develop a market
or use for the litter other than land application (and other than a market or
use developed by FC) (hereafter “New GOE Use”), then subject to the following
sentence, GOE shall have the right to the litter for the New GOE Use, and any
litter disposed of for the New GOE Use shall not be covered by this
Agreement.  Unless otherwise agreed by
FC, no litter shall be utilized for any New GOE Use until after January 1,
2006.


 


11.                                 Timing
of Removal.  GOE will review with FC
a timeline for starting and completion dates for removal.  GOE will give consideration to FC to allow
removal to start as early as possible. 
FC will reclean the barns as may be necessary or perform any other
necessary functions to accommodate GOE Best Management Practices as it pertains
to pest control programs.


 


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12.                                 Installing
Loading Pads.  FC will construct and
maintain at its own cost loading pads as needed to facilitate removal of
litter.


 


13.                                 Miscellaneous.   No party may assign or transfer all or any
part of this Agreement without the prior written consent of the other, which
consent shall not be unreasonably withheld. 
This Agreement shall be governed by the laws of the State of Iowa.  This Agreement may only be modified or
amended by an instrument in writing duly executed and delivered by the
parties.  In the event of any litigation
or arbitration to enforce this Agreement, the prevailing party shall be
entitled to reasonable attorney’s fees and costs as fixed by the court or
arbitrator.  The terms and conditions
set forth above constitute the complete and exclusive statement of the
Agreement between the parties relating to the subject matter of this Agreement,
superseding all previous negotiations and understandings.


 


IN WITNESS WHEREOF, this Agreement has been
executed and delivered by the duly authorized officers or representatives of
each party hereto, as of the date set forth above.


 


 


	
  FARMERS COOPERATIVE COMPANY

  	
   

  	
  GOLDEN OVAL EGGS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY

  	
   

  	
   

  	
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  ITS

  	
   

  	
   

  	
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  DATE

  	
   

  	
   

  	
  DATE

  	
   

  
									



 


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