exv10w2



 




Exhibit 10.2




WATER & WASTEWATER SERVICES AGREEMENT




	 	 	 	 	 
	STATE OF TEXAS

	 	§
	 	 
	 

	 	§	 	 
	COUNTY OF MOORE

	 	§	 	 






     THIS AGREEMENT, executed by and between the CITY OF CACTUS, TEXAS, a municipal corporation
organized and operating under the constitution and laws of the State of Texas, hereinafter called
“City,” and SWIFT BEEF COMPANY, a corporation organized and existing under the law of the State of
Delaware, hereinafter called “Company:”



WITNESSETH:




     WHEREAS, the Company is the owner or lessee of property within the City (the “Property”), upon
which the Company operates a beef processing plant and a hide tanning plant (collectively, the
“Plant”);



     WHEREAS, the City owns and operates water and wastewater treatment facilities suitable to
supply the water requirements of, and to accept, treat, and dispose of wastewater from the Plant;



     WHEREAS, by this Agreement, the Company desires for the City to provide water and wastewater
service for the Plant;



     WHEREAS, the City Council of the City of Cactus adopted an Ordinance on May 15, 2007 (the
“Bond Ordinance”) authorizing the City to issue and sell its City of Cactus, Texas Sewer System
Revenue Improvement and Refunding Bonds, Taxable Series 2007 (the “Bonds”) to finance certain costs
and expenses incurred by it in connection with improvements to its wastewater collection,
treatment, and disposal system; and



     WHEREAS, the Company entered into an Installment Bond Purchase Agreement with the City on May
15, 2007 to purchase the Bonds offered for sale by the City.



     NOW, THEREFORE, in consideration of the mutual benefits, covenants, and agreements contained
herein, the City and the Company agree as follows:



ARTICLE 1

DEFINITIONS AND TERMS




     SECTION 1.01. DEFINITIONS. The following terms and expressions as used in this Agreement
shall have the following meanings:




	 	(a)	 	“Capacity Charge” means the charge required to be paid by the Company to the City
pursuant to Section 7.02(1) hereof.





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	 	(b)	 	“Operation and Maintenance Expenses” means all reasonable costs and expenses of
construction, operation, and maintenance, including, but not limited to, the improvements
required pursuant to the applicable permits, repairs and replacements, operating
personnel, utilities, sludge disposal, the use or operation of any related property or
facilities, supervision, engineering, accounting, auditing, legal services, insurance
premiums, supplies, services, administration, and payments made by the City in
satisfaction of judgments resulting from claims not covered by the City’s insurance
arising in connection with operation and maintenance. Operation and Maintenance Expenses
shall not include (i) any penalties, fines or judgments associated with noncompliance with
any applicable laws, regulations, or permits, unless the same is proven to have been
caused by an act or omission of the Company in violation of this Agreement or the
Ordinance (as defined in Section 4.03(c) below), or (ii) the costs and expenses of the
construction of the improvements to be financed with the proceeds of the issuance of the
Bonds.
	 
	 	(c)	 	“Plant Permit” means the permit issued by the City authorizing the Company to
discharge Waste to the Waste Facility.
	 
	 	(d)	 	“Usage Charge” means the charge per 1,000 gallons of Waste delivered by the Company
for treatment that is required to be paid by the Company to the City as set forth in
Section 7.02(2) hereof.
	 
	 	(e)	 	“Waste” means the wastewater, including all entrained solid substances, that results
from the beef processing, hide tanning and related activities conducted at the Plant and
are delivered for treatment at the Waste Facility.
	 
	 	(f)	 	“Waste Facility” means the wastewater treatment plant owned and operated by the City,
including all City-owned infrastructure utilized to convey wastewater from the Property to
the wastewater treatment plant and all infrastructure and property used for the
disposition of treated wastewater, as such may be upgraded or modified from time to time.
	 
	 	(g)	 	“Waste Facility Permits” means any and all permits, licenses and orders from any
local, state or federal agency that may now or hereafter have jurisdiction to authorize
the City to operate the Waste Facility.
	 
	 	(h)	 	“Water Supply System” means the system owned and operated by the City, by which fresh
water is obtained, treated as necessary, and potable water is conveyed to the Property and
other water users served by the City, as such may be upgraded or modified from time to
time.
	 
	 	(i)	 	“Water Supply System Permits” means any and all permits, licenses, and orders from
any local, state or federal agency that may now or hereafter have jurisdiction to
authorize the City to operate the Water Supply System.




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ARTICLE 2

EFFECTIVE DATE AND TERM OF AGREEMENT




     SECTION 2.01. AGREEMENT DATE — This Agreement will become effective on the date last
executed by both parties.



     SECTION 2.02. TERM OF AGREEMENT — The term of this Agreement will extend until the final
“Maturity Date” of the Bonds (as defined in the Bond Ordinance); provided, however:




	 	(a)	 	This Agreement may be terminated earlier upon written notice by the City
because it is not possible for the City to perform its obligations pursuant to this
Agreement for longer than a temporary period caused by “Force Majeure,” as provided in
Section 6.06 below, or other temporary condition; or this Agreement may be terminated
earlier by the Company because it intends to cease operating the Plant; provided
further, however, that the City shall give the Company not less than three hundred
sixty five (365) days written notice of its intention to terminate this Agreement, and
the Company shall give the City not less than ninety (90) days written notice of its
intention to terminate this Agreement.
	 
	 	(b)	 	If any of the Waste Facility Permits or Water Supply System Permits is
revoked or any order or ruling is enacted, promulgated or issued by any governmental
agency having jurisdiction, and the effect of such change, order or ruling would make
it impossible or illegal for the City to perform its obligations under this Agreement
as to Waste or water, or both, then either party may give written notice of its
intention to terminate this Agreement as to Waste or water, or both, as provided in
Section 2.02(a), immediately upon the occurrence of such change, order, or ruling.




The termination of this Agreement in accordance with Section 2.02(a) or (b) shall not relieve the
Company of its obligation to pay the Capacity Charge required in Section 7.02(1) hereof.




ARTICLE 3

REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF COMPANY




     SECTION 3.01. REPRESENTATIONS AND WARRANTIES AS TO EXECUTION — The Company represents and
warrants that it has the corporate power to execute this instrument and to perform



     all acts required in this Agreement, and that its execution and delivery of this Agreement have
been duly authorized by all necessary corporate action.



     SECTION 3.02. ASSIGNMENT AND SUBLEASING — The Company agrees not to assign any interest in
this Agreement without first obtaining the written consent of the City, which shall not be
unreasonably withheld. The consent of the City shall not be required in the event that the Company
assigns its interest in this Agreement to an affiliated entity. A sale of all, or substantially
all, of the assets of the Company, a sale of the Property or the Plant, or the sale of a
controlling interest in the Company shall not constitute an assignment for purposes of this Section
3.02. In the event of the Company’s sale of all, or substantially all, of the assets of the
Company, a sale of the Property or the Plant, or the sale of a controlling interest in the Company,
the Company agrees to make such sale conditioned upon the assumption of all obligations and



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liabilities associated with the Installment Bond Purchase Agreement and this Agreement, including
specifically the obligation to pay the Capacity Charge required in Section 7.02(1) hereof.



     SECTION 3.03. RESTRICTION ON SALE OF WATER — The Company shall not sell water received from
the City under this Agreement to any other person or entity without the express written consent of
the City.



     SECTION 3.04. OBLIGATIONS OF THE COMPANY — The obligation of the Company to make all
payments provided for in this Agreement, and to perform and observe the other agreements and
covenants on its part contained in this Agreement shall be absolute and unconditional, irrespective
of any rights to set-off, recoupment or counterclaim it might otherwise have against the City. The
Company will not suspend or discontinue any such payment or fail to perform and observe any of its
other agreements and covenants contained in this Agreement. However, the Company may, at its own
cost and expense and in its own name or in the name of the City, prosecute or defend any action or
proceedings or take any other action involving third persons which the Company believes is
reasonably necessary in order to secure or protect its rights under this Agreement. The City and
the Company will notify each other of any action or proceedings involving the Waste Facility or the
Company’s use of the Waste Facility.



ARTICLE 4

REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF THE CITY




     SECTION 4.01. WARRANTY AS TO INCORPORATION — The City represents and warrants that it is
incorporated as a general law city under the Constitution and laws of the State of Texas.



     SECTION 4.02. WATER SUPPLY — 



     (a) WATER SUPPLY SYSTEM PERMITS — The City presently maintains the Water Supply System
Permits, which allow the City to operate the Water Supply System. The City shall operate the Water
Supply System in accordance with the Water Supply System Permits and all local, state and federal
laws and regulations. The City, consistent with the terms of the Water Supply System Permits,
shall use the Water Supply System to provide potable water to the Plant on a continuous basis,
twenty-four (24) hours a day, seven (7) days a week. The City will continue to maintain and obtain
all Water Supply System Permits required for the continual operation of the Water Supply System.



     (b) QUANTITY AND QUALITY OF WATER — The City will make available to the Company a quantity of
potable water at a rate not less than 3,500,000 gallons per day. The water to be furnished to the
Company shall be of the same quality delivered by the City to the inhabitants of the City for
domestic consumption.



     SECTION 4.03. TREATMENT OF WASTE — 



     (a) WASTE FACILITY PERMITS — The City presently maintains the Waste Facility Permits, which
allow the City to operate the Waste



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Facility. The City shall operate the Waste Facility in
accordance with the Waste Facility Permits and all local, state and federal laws and regulations.
The City, consistent with the terms of the Waste Facility Permits, shall use the Waste Facility to
treat wastewater and dispose of the treated effluent on a continuous basis, twenty-four (24) hours
a day, seven (7) days a week. The City will continue to maintain and obtain all Waste Facility
Permits required for the continual operation of the Waste Facility.



     (b) QUANTITY AND QUALITY OF WASTE — The City agrees to accept the Waste, as long as the
quantity and quality of the Waste are consistent with the requirements of the Plant Permit.



     (c) PRETREATMENT OBLIGATIONS — The parties recognize that the City is obligated to establish
standards for the treatment of industrial wastes and that, as requirements of state and federal
agencies change, it will be necessary for the City to comply with the regulations of such agencies.
The ordinance adopted by the governing body of the City on the 15th day of May, 2007, entitled
“Industrial Waste Ordinance” (the “Ordinance”) is recognized as the presently governing ordinance
in this regard. The Ordinance, including any amendments to the Ordinance adopted by the City, which
may be required for the City to meet the standards of state and federal agencies having regulatory
power over the Waste Facility, shall be considered a part of this Agreement as though set forth at
length herein.



     SECTION 4.04. TRANSFER OF CONTROL OR OPERATION OF THE WATER SUPPLY SYSTEM AND WASTE FACILITY — The
City shall not transfer control or operation of the Water Supply System or the Waste
Facility to any other governmental agency or to any third party without the written consent of the
Company.



ARTICLE 5

MEASUREMENT OF WATER




     SECTION 5.01. METERING EQUIPMENT — The City maintains flow meters and other equipment at the
point of delivery of water to the Plant for properly measuring the quantity of water delivered
under this Agreement. The Company shall have access to such metering equipment at all reasonable
times, but the reading, calibration, and adjustment of the metering equipment shall be done only by
the employees or agents of the City. For the purpose of this Agreement, the original record or
reading of the meters shall be the journal or other record books maintained by the City in its
office in which the records of the employees or agents of the City who take the reading may be
transcribed. Upon written request of the Company, the City will send the Company a copy of such
journal or record books, or permit it to have access to the same in the office of the City during
reasonable business hours.



     SECTION 5.02. TESTING AND CALIBRATION — If requested in writing by the Company, the City
shall test its meters in the presence of a representative of the Company, and the Company may
observe any adjustments which are made to the meter. If the Company requests in writing that the
City calibrate its meters, then the City shall give the Company written notice of the time when
such calibration will be made. If upon any test, the percentage of inaccuracy of any metering
equipment is found to be in excess of five percent (5%), the inaccuracy shall be corrected for the
period of time from which the inaccuracy began, and if such time is not ascertainable, then for a
period extending back one-half (1/2) of the time elapsed



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since the last date of calibration, but in
no event further back than a period of six (6) months. If for any reason any meters are out of
repair so that the amount cannot be ascertained or computed from a reading of the meter, then the
amount will be estimated and agreed upon by the parties based upon the best data available.



     SECTION 5.03. UNIT OF MEASUREMENT — The unit of measurement for water delivered under this
Agreement is per 1,000 gallons, U.S. Standard Liquid Measure.



ARTICLE 6

FURTHER AGREEMENTS




     SECTION 6.01. REGULATORY PROVISIONS — This Agreement is subject to all applicable and valid
rules, regulations, and laws as promulgated by the United States of America, the State of Texas, or
any other governmental body or agency having lawful jurisdiction or any authorized representative
or agency of any of them.



     SECTION 6.02. MODIFICATION OF PROVISIONS — This Agreement may be changed and modified only
with the written consent of both parties. In the event either party requests an amendment or
modification of this agreement, the requesting party shall give the other party thirty (30) days
written notice, describing in reasonable detail the amendment or modification being requested. Not
more than thirty (30) days after such written notice, a meeting of the governing bodies or of their
duly authorized and appointed representatives will be held to consider the requested changes or
modifications. If the parties concur, this Agreement may then be modified in writing and executed
by both parties.



     SECTION 6.03. SALES OR USE TAXES — In the event any sales or use taxes, or taxes of any
similar nature, are imposed upon the sale, use or consumption of the water received by the Company
or upon Waste introduced into the Waste Facility by the Company under this Agreement, the amount of
such taxes shall be borne by the Company in addition to all other charges. Whenever the City is
required to pay, collect, or remit any such taxes on water or Waste, then the Company shall
promptly reimburse the City.



     SECTION 6.04. TITLE TO WATER OR WASTE — Title to all water received by the Company under
this Agreement will remain in the City to the point of water delivery at the Plant, the point at
which the City maintains flow meters and other equipment for properly measuring the quantity of
water delivered under this Agreement, and at which title will pass to the Company. Title to the
Waste shall remain with the Company until the point of delivery to the Waste Facility, the point at
which the Waste passes from the Property to the Waste Facility, and at which title, including the
right to reuse such Waste as a source of supply, will pass to the City. Each party agrees to save
and hold the other harmless from all claims, demands, expenses, and causes of action which may be
asserted by any third party on account of the transportation, delivery, and disposal of water or
Waste while title remains in such party.



     SECTION 6.05. EASEMENTS — The Company agrees that the City may have all reasonable easements
over any easements, right-of-way, or property held by it for the placement, maintenance, or repair
of all required equipment associated with the City’s delivery of water to the Plant and the passing
of Waste from the Plant to the Waste Facility.



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     SECTION 6.06. FORCE MAJEURE — 



     (a) The term “Force Majeure” as used in this Agreement shall mean Acts of God, strikes,
lock-outs, or other industrial disturbances, acts of public enemy, orders or actions of any kind of
the government of the United States or of the State of Texas or any civil or military authority,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, droughts, arrests, restraints of government and people, civil disturbances,
explosions, breakage or accident to dams, machinery, and any other causes not reasonably within the
control of the party claiming such inability.



     (b) If, for any reason of “Force Majeure,” either of the parties is wholly or partly unable to
carry out its obligations under this Agreement, then the party shall give notice and a full
description of the cause of the event and related circumstances in writing to the other party
within a reasonable time after the occurrence of the event. The obligation of the party giving
notice and affected by such “Force Majeure,” will be suspended during the continuance of the
inability claimed, and the affected party will undertake all reasonable efforts to remove or
overcome the inability. In the event Force Majeure is experienced, the City and the Company shall
work together to respond to such conditions to ensure the continued maintenance and operation of
the Water Supply System and Waste Facility.



     (c) If the City is unable to deliver water to the Company for any reason, the City will
promptly notify the Company in writing, and provide a description of the particular circumstances
regarding such interruption, as soon as practicable after the occurrence or the cause for such
interruption.



     (d) The Company recognizes that the City may be required to make necessary alterations,
repairs or extensions to its Water Supply System from time to time during the life of this
Agreement. Any interruption of delivery of water to the Company due to such operations shall not
be cause for claim of damage, provided that the City uses all reasonable effort to provide the
Company with water. In any such case, the City will give the Company as much advance notice as may
be practicable of the suspension of delivery and of the estimated duration of the suspension.



     SECTION 6.07. NOTICE — Any notice, notice of termination, request, demand, statement, or
bill (other than monthly service bills) provided for in this Agreement shall be in writing and
shall be sent by registered or certified mail, addressed as to the City, Attn: City Manager, 201 N.
Hwy 287, Cactus, Texas 79013, and as to the Company, to Swift Beef Company, Attn: General Counsel,
1770 Promontory Circle, Greeley, Colorado 80634. Routine communications may be sent by ordinary
mail, and either party may, by the filing of an appropriate written notice to the other, specify
some individual to whom communications may be addressed thereafter. Monthly service bills,
however, shall be sent by ordinary mail to Swift Beef Company, Attn: Plant Controller, Highway 287,
N. Schroeter Park, Cactus, Texas 79013.



     SECTION 6.08. OPERATOR OF THE WASTE FACILITY — The City shall consult with the Company in
the selection process for a Waste Facility operator in the event of a vacancy



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and shall not hire a
Waste Facility operator without the written approval of the Company, which shall not be
unreasonably withheld. The Company may not withhold consent regarding hiring a Waste Facility
operator if such consent would cause the City to be in breach of this Agreement or of any federal
or state law, rule or regulation. The City shall also permit the Company to review the performance
of the Waste Facility operator on an annual basis, and to determine at such time whether the Waste
Facility operator should remain in place. If the Company determines that the Waste Facility
operator should be replaced at such time, then the City agrees, consistent with the terms and
conditions of any agreement by and between the City and the Waste Facility operator, to release the
Waste Facility operator and initiate the selection process for a new Waste Facility operator, and
the Company agrees to pay the costs associated with the replacement of the Waste Facility operator,
including any costs associated with the early termination of the former Waste Facility operator’s
contract.



ARTICLE 7

COST OF SERVICE




     SECTION 7.01. COST OF WATER — As of the effective date of this Agreement, the rate for water
supplied by the City to the Plant shall be the current rate per 1,000 gallons.



     SECTION 7.02. COST OF WASTE TREATMENT — As of the effective date of this Agreement, payments
for the treatment of Waste shall consist of three parts: (1) a Capacity Charge equal to the amount
required to be paid by the City to pay the principal of, and interest on, the Bonds, as set forth
in the Bond Ordinance (the “Debt Service Payments”); (2) a Usage Charge of the current rate per
1,000 gallons of Waste delivered by the Company for treatment; and (3) any additional surcharges as
provided in Section 14 of the Ordinance.



     SECTION 7.03. BILLING AND RATE SCHEDULE — The City will prepare and render to the Company an
invoice with respect to the Capacity Charge semi-annually at least 30 days prior to the date that
any of the City’s Debt Service Payments is required to be made. Such Capacity Charge shall be paid
by the Company no later than five days prior to the date the City is required to make such Debt
Service Payments. Additionally, the City will render monthly Usage Charge and water usage invoices
that will be payable by the Company within 20 days of the date of such monthly invoice, and meter
readings for the amount of water provided. The monthly meter reading date for water will be
approximately the same day of each month.



     SECTION 7.04. REVIEW OF RATES — Except as provided in Section 8.02 for increases in plant
size or production, no more frequently than once per year, the City and the Company will review the
rate charged for water and the Usage Charge for the purpose of adjusting the rates either upward or
downward to reasonably compensate the City for the services provided, including all Operation and
Maintenance Expenses. The parties intend that the Usage Charge, as set out in Section 7.02(2)
above, be adjusted annually by the same relative amount that the Operation and Maintenance Expenses
of the City increase or decrease. Penalties or fines associated with noncompliance with this
Agreement or the Ordinance shall not be included in the assessment of annual rates, but shall
instead be considered to have been paid to the City’s general revenue account.



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     SECTION 7.05. RECORDS — The City agrees to keep proper financial and operating records and
books of account, pursuant to law and in accordance with generally accepted accounting principles,
pertaining to the City’s performance of its obligations under this Agreement. The Company may
inspect and audit such records and books of account at all reasonable times at its own expense.



ARTICLE 8

GENERAL AGREEMENTS




     SECTION 8.01. INCREASE IN PLANT SIZE OR PRODUCTION — Notwithstanding Sections 4.02 and
4.03(b), in the event that the Company increases the size of the Plant or otherwise expands its
operations at the Plant and requires additional water or additional treatment capacity for its
Waste, the City agrees to expand the Water Supply System or the Waste Facility, as applicable, to
accommodate the Company’s increased usage. The Company agrees to promptly notify the City in
writing at least twelve (12) months in advance of any increase in Plant size or production so that
the City may make any required



     improvements, additions or alterations to the Water Supply System or the Waste Facility, or both,
and the City agrees to increase the minimum quantity of potable water provided under Section
4.02(b) by the amount reasonably required to accommodate such increase in Plant size or production.
Any obligation to make improvements, additions, or alterations to the Water Supply System or the
Waste Facility are contingent and conditioned upon the City’s ability to secure all necessary
local, state, and federal authorizations, and financing. In the event that such improvements,
additions or alterations are made to accommodate an increase in the Company’s Plant size or
production, the parties agree to increase the rates for water or Waste treatment, or both, as
applicable, even if outside the annual schedule for rate reviews provided in Section 7.04, by an
amount sufficient to meet the annual cost to the City for such improvements, additions or
alterations, and the additional Operation and Maintenance Expenses. In the event of termination of
this Agreement at the request of the Company, the Company will be liable for its proportionate
share of the cost of the improvements, additions or alterations made for its benefit pursuant to
this Section 8.01.



     SECTION 8.02. NEW USERS OF THE WASTE FACILITY — In consideration of the Company’s commitment
to pay the Capacity Charge that will allow the City to fund the construction of the improvements
specified in the Plant Permits, as issued as of the date of this Agreement, including any Phase II
improvements (“Presently Permitted Capacity”), the City agrees that the Company shall have the
right of first refusal for any then unused Presently Permitted Capacity, and the City, at any time
and at the Company’s election, may be required to provide any then-unused Presently Permitted
Capacity, excluding capacity necessary for municipal domestic service, to the Company. If a
commercial or industrial generator of waste that is not being provided wastewater treatment
services by the City on the effective date of this Agreement (a “New Waste Facility User”) should
request the City to accept and treat its wastewater at the Waste Facility and the volume of
wastewater or the mass of any regulated pollutant in such wastewater would constitute at least 10%
of the difference in the volume of wastewater or the pollutant mass between the Presently Permitted
Capacity and what is then being treated at the Waste Facility, the City shall notify the Company in
writing of such request. If the Company elects in writing not to exercise its right of first
refusal as to the then-unused Presently Permitted Capacity, the City may provide wastewater
treatment services to the New



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Waste Facility User, but the City agrees to charge the New Waste
Facility User a usage charge for wastewater treatment, after giving appropriate consideration to
the New Waste Facility User’s wastewater flow and pollutant mass loading, not less than the Usage
Charge charged to the Company pursuant to Section 7.02(2) of this Agreement, as adjusted, and shall
(i) allocate to and charge such new Waste Facility user that proportion of the Capacity Charge that
is proportional to such New Waste Facility User’s percentage usage of the Presently Permitted
Capacity, and (ii) reduce the Capacity Charge to the Company by an equal amount. Any amounts
received by the City from the New Waste Facility User shall constitute and be treated as “Revenues”
of the “System” (each as defined in the Bond Ordinance) and solely for the purposes set forth in
the Bond Ordinance. Regardless of whether the Company elects to exercise its right of first refusal
as to any then unused Presently Permitted Capacity, the City agrees to recover exclusively from the
New Waste Facility User the cost of constructing any additional capital improvements to the Waste
Facility that are required to treat wastewater from the New Waste Facility User but are not then
required to treat the Waste from the Company. Nothing in this Section is intended to negate the
City’s ability to change the Usage Charge charged to the Company, as otherwise specified in this
Agreement.



     SECTION 8.03. NEW USERS OF WATER — If a commercial or industrial operation that is not being
provided water by the City on the effective date of this Agreement (“New Water User”) should
request the City to provide it with water, the City shall notify the Company in writing of such
request. If providing a New Water User with water service would require that the City incur
capital costs to improve the water supply system that would not otherwise be required to provide
water to the then existing customers of the City and the Company, without the written consent of
the Company, which may be provided or withheld at the Company’s unreviewable discretion, the City
shall not require the Company to pay such capital costs, either directly or through increased rates
for water supply. Nothing in this Section is intended to negate the City’s ability to change the
rate charged to the Company for water, as otherwise specified in this Agreement.



     SECTION 8.04. INDEMNITY — 



     (a) To the extent permitted by law, the City agrees to protect, indemnify and hold the Company
free and harmless from and against any and all claims, demands, causes of action, suits or other
litigation of every kind and character arising in favor of the City or any third party on account
of personal injuries, death or damage to property in any way incident to, arising out of, or
occurring in connection with the exercise by the City of any right or claim of right under this
Agreement, or in any way incident to, arising out of or occurring in connection with the City’s
operation of the Waste Facility and the Water Supply System. The City, to the extent permitted by
law, further agrees to protect, indemnify and hold the Company free and harmless from and against
all costs and attorney’s fees that may be associated with any such claim, demand, cause of action,
suit or litigation.



     (b) To the extent permitted by law, the Company agrees to protect, indemnify and hold the City
free and harmless from and against any and all claims, demands, causes of action, suits or other
litigation of every kind and character arising in favor of the Company or any third party on
account of personal injuries, death or damage to property in any way incident to, arising out of,
or occurring in connection with the exercise by the Company of any right or claim of right



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under this Agreement, or in any way incident to, arising out of or occurring in connection with the
Company’s act or omission in violation of this Agreement or the Ordinance. The Company, to the
extent permitted by law, also agrees to protect, indemnify and hold the City free and harmless from
and against all costs and attorney’s fees that may be associated with any such claim, demand, cause
of action, suit or litigation.



     (c) Except as otherwise provided in the Ordinance, in the event that penalties or fines are
assessed against or imposed upon the City in connection with the operation of the Waste Facility or
Water Supply System, including but not limited to discharges of treated effluent into waters of the
State of Texas, the City shall pay all such penalties and fines; provided, however the Company
shall pay all such penalties and fines proven to have been caused by an act or omission of the
Company in violation of this Agreement or the Ordinance.



     SECTION 8.05. ARBITRATION



     (a) Any dispute or disagreement which may arise between the City and the Company which cannot
be resolved, shall be submitted to arbitration by a board of three (3) arbitrators upon the written
request of the City or the Company, which request shall name one (1) arbitrator. The party
receiving such notice shall within ten (10) days thereafter, provide notice to the other naming the
second arbitrator, and upon the failure to do so, the second arbitrator shall be appointed by the
American Arbitration Association on the request of the party requesting arbitration in the first
instance. The two (2) appointed arbitrators shall name the third arbitrator, and if the two
appointed arbitrators should fail to do so, then within ten (10) days after appointment of the
second arbitrator, the third arbitrator shall be appointed by the American Arbitration Association
upon request of either party.



     (b) The arbitration proceeding will be held in Amarillo, Texas or any other mutually
convenient location agreed to by both parties. The appointed arbitrators shall promptly hear and
determine the question submitted pursuant to the procedures established by the Texas General
Arbitration Act and shall render their decision with all reasonable speed and dispatch, but in no
event later than thirty (30) days after the conclusion of evidence. If within this period a
decision is not rendered by the board, or a majority of the board, new arbitrators may be named
according to the procedures set forth in Section 8.05(a) and shall act at the election of either
the City or the Company as if none had been previously named.



     (c) The decision of the arbitrators or of the majority of the arbitrators shall be final and
binding upon the parties as to the question submitted, and a judgment upon an award rendered in
such arbitration proceedings may be entered in any court of competent jurisdiction. The expenses
of arbitration, including reasonable compensation to the arbitrators, shall be borne one-half (1/2)
by the City and one-half (1/2) by the Company, except that each party shall bear the compensation
and expenses of its counsel and witness.



     SECTION 8.06. ENTIRE AGREEMENT — This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof, and any other understandings and agreements,
written or oral, between the parties relating to the subject matter of this Agreement, which are
not expressly set forth in this Agreement, are cancelled and annulled.



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     SECTION 8.07. SEVERABILITY — The invalidity of any provision of this Agreement shall not
impair the validity of any other provision. If any provision of this Agreement is determined by a
court of competent jurisdiction to be unenforceable, that provision will be deemed severable and this
Agreement may be enforced with that provision severed or modified, or this Agreement may be
cancelled.



     SECTION 8.08. HEADINGS — The headings in this Agreement are for convenience only and are not
a part of this Agreement.



     SECTION 8.09. AUTHORITY TO EXECUTE — Both parties represent and warrant to the other that
this Agreement has been duly executed by an authorized officer and constitutes a valid and binding
agreement, enforceable against it in accordance with its terms, except as such enforceability may
be limited by bankruptcy laws or other similar laws relating to the enforcement of creditors’
rights generally and by general equitable principles.



     SECTION 8.10. PLACE OF PERFORMANCE — The City and the Company agree that the place of
performance of their respective obligations under this Agreement is Moore County, Texas.



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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement to be effective on
date last written below.



	 	 	 	 	 	 	 
	 	 	SWIFT BEEF COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:   /s/ Raymond P. Silcock
	 	 
	 

	 	 

	 	 
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer
	 	 
	 

	 	Date:
	 	5/21/07	 	 
	 
	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CITY OF CACTUS, TEXAS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:   /s/ Luis Aguilar
	 	 
	 

	 	 

	 	 
	 

	 	Title:
	 	Mayor	 	 
	 

	 	Date:
	 	5/15/07	 	 






ATTEST:




	 	 	 	 	 
	/s/ Jeffery Jenkins
	 	 
	 
	 	 
	Jeffery Jenkins, City Manager/City Secretary	 	 








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