Document:

Exhibit 10.2

 

GUARANTY

 

This GUARANTY
(the “Guaranty”) is made as of April 18, 2013 by AgFeed Industries, Inc. a Nevada corporation (“Guarantor”),
to and for the benefit of Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Lender”).

 

RECITALS:

 

A.Lender is a party
to that certain Credit Agreement dated as of June 6, 2006, as the same has since been amended by nineteen separate amendments
executed prior to the date of this Agreement (the “Credit Agreement”) with AgFeed USA, LLC (formerly known as
M2 P2, LLC) (“AgFeed”); TS Finishing, LLC; New York Finishing, LLC; Pork Technologies, LC; New Colony Farms,
LLC; Heritage Farms, LLC; Heritage Land, LLC; Genetics Operating, LLC; M2P2 Facilities, LLC; MGM, LLC; M2P2 General Operations,
LLC; New Colony Land Company, LLC; M2P2 AF JV, LLC; and Midwest Finishing, LLC (collectively, hereinafter referred to as “Borrower”).

 

B.As of [April 16,
2013], each Borrower is indebted to Lender pursuant to the Credit Agreement in the following principal amounts (the “Principal
Indebtedness”):

 

	LOAN FACILITY	CURRENT PRINCIPAL BALANCE
	
        FACILITY A
	
        $68,839,815.11

	FACILITY F	$8,793,315.45

 

In addition to the Principal Indebtedness,
interest, fees, charges and costs have accrued and will accrue pursuant to the Credit Agreement and be payable from Borrower to
Lender (together, the “Interest, Fees and Costs”). Together, the Principal Indebtedness and Accrued Interest Fees and
Costs shall be referred to hereinafter as the Credit Agreement Debt.

 

C.Each Borrower is
in default of various obligations to Lender specified in the Credit Documents including, without limitation, the failure to pay
the Credit Agreement Debt to Lender when and as due (together, as more fully set forth in the Forbearance Agreement (as defined
below), the “Existing Events of Default”).

 

D.Lender has agreed
to enter into a Forbearance Agreement (the “Forbearance Agreement”) with each Borrower as of the date hereof. Pursuant
to the Forbearance Agreement, Lender will forbear from exercising its rights and remedies on account of the Existing Defaults,
as more fully set forth in the Forbearance Agreement, and Lender has agreed to permit Borrower to use Lender’s Collateral
to fund and pay for expenses incurred by Parent in the operation of Parent’s business, as more fully set forth in the Forbearance
Agreement. As a condition of Lender’s agreement to execute the Forbearance Agreement, Lender requires that Borrower obtain
this Guaranty duly executed by Guarantor. Lender is relying upon this Guaranty in providing forbearance to Borrower and permitting
Borrower to use Lender’s Collateral to fund Guarantor’s expenses as set forth in the Forbearance Agreement (as specifically
defined in the Forbearance Agreement, the “Forbearance Period Advances”). The forbearance provided by Lender to Borrower
and Borrower’s use of Lender’s Collateral to fund the Forbearance Period Advances is of value to Guarantor and is reasonably
expected to benefit Guarantor.

 

    	1

    	 

    

 

AGREEMENT

 

In consideration of Lender
executing the Forbearance Agreement, as an inducement to Lender to do so, and for other valuable consideration, Guarantor agrees,
warrants, represents, and covenants as follows:

 

1.Definitions.
Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Forbearance Agreement.

 

2.Guaranty.
Guarantor unconditionally, absolutely and irrevocably guarantees: (a) the full, prompt, and complete payment upon the occurrence
of a Forbearance Default of the entire amount of principal, accrued interest, and premiums due from time to time under the Credit
Agreement and all other Obligations of Borrower to Lender under or in respect of any of the Credit Agreement, including reimbursements,
late charges, interest and default interest (including post-petition interest to the extent a petition is filed by or against Borrower
under the Bankruptcy Code), damages, indemnity obligations, collection and court costs, attorneys’ fees, advances, and all
other expenses and charges of any kind, in each case whether incurred prior to or after the execution of this Guaranty and all
without set-off, counterclaim, recoupment, or deduction of any amounts owing or alleged to be owing by Lender to Borrower or Guarantor.
All of the indebtedness, obligations, and liabilities described in this Section are referred to in this Guaranty as the “Guaranteed
Obligations.” All payments made pursuant to this Guaranty shall be in U.S. dollars.

 

3.Limitation on
Amount Guaranteed. Notwithstanding the provisions of Section 2, the obligations of Guarantor pursuant to this Guaranty shall
not exceed an amount (the “Guaranteed Amount”) equal to the sum of (a) the Forbearance Period Advances;
plus (b) $1,406,250. The Guaranteed Amount shall not be subject to reduction by reason of (y) any payment of the Obligations,
except that payments by Guarantor pursuant to this Guaranty shall reduce the Guaranteed Amount. If Guarantor is entitled to the
benefits of any statute, law, decision, rule or regulation that limits or reduces the monetary liability of guarantors (a “Statutory
Limitation”), the Statutory Limitation shall be determined without regard to the limit of the Guaranteed Obligations
set forth in this Section and as if Guarantor had guaranteed 100% of the Guaranteed Obligations.

 

4.Guarantor’s
Obligations Primary. Guarantor’s obligations under this Guaranty are primary and are independent of the obligations of
Borrower, and a separate action or actions may be brought and executed against Guarantor, whether or not such action is brought
against Borrower and whether or not Borrower is joined in such action or actions.

 

5.Representations
and Warranties. Guarantor acknowledges and agrees that the representations and warranties in this Section are a material consideration
to Lender; that Lender is relying on their correctness and completeness in entering into the Forbearance Agreement and making the
Forbearance Period Advances available to Guarantor; that these representations and warranties are true and accurate as of the date
hereof regardless of any investigation or inspection by Lender. Accordingly, each Guarantor represents, warrants, and certifies
to and covenants with Lender that:

 

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(a)No permits,
consents, or approvals from any person or entity are required in connection with the authorization, execution, delivery, consummation,
or performance by Guarantor of this Guaranty;

 

(b)The
entry into and performance by Guarantor of this Guaranty does not and will not violate any judgment, order, law or regulation applicable
to Guarantor or result in any breach of, constitute an event of default under, or result in the creation of any lien, charge, security
interest or other encumbrance upon any collateral pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement
or other instrument to which Guarantor is a party or by which Guarantor’s assets are bound;

 

(c)Upon
execution by Guarantor of this Guaranty, the Guaranty shall constitute the legal, valid and binding obligations of Guarantor, enforceable
against Guarantor in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
liquidation, reorganization and other laws affecting the rights of creditors generally and general principles of equity;

 

(d)Guarantor
is and will remain in compliance in all material respects with all U.S. economic sanctions laws, Executive Orders and implementing
regulations promulgated by OFAC and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank
Secrecy Act and all regulations issued pursuant to it. Neither Guarantor nor any Affiliate of Guarantor is or will become a Person
(i) designated by the U.S. government on the SDN List or who is otherwise the target of U.S. economic sanctions laws, such that,
in either case, a U.S. Person cannot deal with or otherwise engage in business transactions with such Person; or (ii) Controlled
by, or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a foreign government that is the target
of U.S. economic sanctions prohibitions, such that the entry into, or performance under, this Guaranty or any other Loan Document
would violate Applicable Law. Guarantor and its Affiliates are and will remain in compliance with the U.S. Patriot Act and other
federal or state laws relating to “know your customer” and anti-money laundering and anti-terrorism rules and regulations.
No proceeds of any Forbearance Period Advance will be used directly or indirectly for any payments to any government official or
employee, political party, official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977. For purposes of this subsection, “Affiliate” does not include the shareholders of any
entity that is publicly traded on a recognized national United States stock exchange.

 

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(e)Guarantor
is and will remain validly existing and in good standing under the laws of the state of its formation and has and will continue
to have full power and capacity to enter into and perform its obligations hereunder;

 

(f)Guarantor
has taken all necessary action to obtain the authorization, execution, delivery, consummation, and performance of this Guaranty;

 

(g)The
individual signing this Guaranty on behalf of Guarantor is duly authorized to do so;

 

(h)The
entry into and performance by Guarantor of this Guaranty does not and will not violate any provision of Guarantor’s organizational
documents.

 

6.Nature of Guaranty;
Waivers. This is an absolute and unconditional guaranty of payment and performance and not of collection. Guarantor unconditionally
waives: (a) any requirement that Lender first make demand upon, or seek to enforce or exhaust remedies against, Borrower or any
other Person or any of the Collateral or other property of Borrower or such other Person before demanding payment from or seeking
to enforce any of the provisions of this Guaranty against such Guarantor; (b) and agrees not to assert any and all rights, benefits
and defenses which might otherwise be available under any applicable law that might operate to limit Guarantor’s liability
under, or the enforcement of, this Guaranty; (c) the benefits of any statutory or common law provision limiting the right of Lender
to recover a deficiency judgment, or to otherwise proceed, against any Person obligated for the payment of the Guaranteed Obligations,
after any foreclosure or trustee’s sale of any collateral securing payment of the Guaranteed Obligations; (d) any statute
of limitations affecting Guarantor’s liability under this Guaranty or Borrower’s obligations under the Credit Agreement;
and (e) diligence, presentment, protest, demand for performance, notice of nonperformance, notice of intent to accelerate, notice
of acceleration, notice of protest, notice of dishonor, notice of extension, renewal, alteration or amendment, notice of acceptance
of this Guaranty, notice of default under any of the Credit Agreement or any ancillary document, and all other notices whatsoever.
Guarantor agrees that this Guaranty shall remain in full effect without regard to, and shall not be affected or impaired by, any
invalidity, irregularity or unenforceability in whole or in part of any of the Credit Agreement or any ancillary documents or instruments,
or any limitation of the liability of Borrower under the Credit Agreement, including any claim that the Credit Agreement or any
ancillary agreement, document or instrument was not duly authorized, executed, or delivered on behalf of any Borrower.

 

7.Duration; Indemnification.
This Guaranty is effective when received by Lender and, except as may otherwise be specifically provided herein, shall continue
in full force and effect, until all of the Guaranteed Obligations are fully and finally paid and performed. The Guaranteed Obligations
shall not be considered fully and finally paid and performed unless and until all payments by Borrower to Lender are no longer
subject to any right on the part of any Person, including Borrower, Borrower as a debtor-in-possession, or any trustee in bankruptcy,
to require Lender to disgorge such payments or to seek to recoup all or any portion of such payments. Accordingly, this Guaranty
shall continue to be effective or be reinstated, as applicable, if at any time the payment or performance of all or any portion
of the Guaranteed Obligations is rescinded or reduced in amount or must otherwise be restored or returned by Lender, whether as
a “voidable preference” or “fraudulent conveyance,” or under any federal or state law, including the Bankruptcy
Code or otherwise, all as though such payment or performance had not been made, and Guarantor will indemnify, defend, and hold
Lender harmless for, from and against, any and all liabilities incurred by Lender in connection with such remission, rescission
or restoration; provided, however, that Guarantor shall not have any liability under this Section to Lender with
respect to any indemnified matter to the extent such liability has resulted primarily from the gross negligence or willful misconduct
of Lender, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. This Guaranty shall
remain in full force and effect and continue to be effective if (a) any petition is filed by or against Borrower or Guarantor for
relief under the Bankruptcy Code; (b) Borrower or Guarantor becomes insolvent or makes an assignment for the benefit of creditors;
or (c) a receiver or trustee is appointed for all or any significant part of Borrower’s or Guarantor’s assets.

 

    	4

    	 

    

 

8.Effect of Certain
Matters. Guarantor’s obligations under this Guaranty shall not be affected or impaired by reason of any of the following,
all without notice to, or the further consent of, Guarantor: (a) the waiver by Lender of the observance or performance by Borrower
of any of the obligations, conditions or other provisions contained in any of the Credit Agreement, except to the extent of such
waiver; (b) the extension, in whole or in part, of the time for payment of any amount owing or payable under the Credit Agreement;
(c) the modification or amendment (whether material or otherwise) of any of the obligations of Borrower under, or any other provisions
of, the Credit Agreement, except to the extent of such modification or amendment; (d) the taking or the omission of any of the
actions referred to in any of the Credit Agreement (including the giving of any consent, indulgences, or extensions); (e) any failure,
omission, delay or lack on the part of Lender to enforce, assert or exercise any right, power or remedy conferred on Lender in
any of the Credit Agreement; (f) the assignment to or assumption by any third party of any or all of the rights or obligations
of Borrower under all or any of the Credit Agreement; (g) the release or discharge of Borrower from the performance or observance
of any obligation, undertaking or condition to be performed by Borrower under any of the Credit Agreement by operation of law,
including any rejection or disaffirmance of any of the Credit Agreement in any bankruptcy or similar proceedings; (h) the receipt
and acceptance by Lender or any other Person of notes, checks or other instruments for the payment of money and extensions and
renewals thereof; (i) any action, inaction or election of remedies by Lender which results in any impairment or destruction of
any subrogation, indemnity, reimbursement or contribution rights of Guarantor or of any rights of Guarantor to proceed against
any other Person for reimbursement; (j) any setoff, defense, counterclaim, abatement, recoupment, reduction, change in law or any
other event or circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor, indemnitor
or surety under Applicable Law; or (k) the termination or renewal of any of the Guaranteed Obligations.

 

9.Waiver of Certain
Rights Against Borrower and Others. Guarantor waives any claim or other right which Guarantor may now have or hereafter acquire
against Borrower, any other obligor primarily or secondarily obligated with respect to any of the Guaranteed Obligations or the
Collateral that arises from the existence or performance of the obligations of Guarantor under this Guaranty, including any right
of subrogation, reimbursement, exoneration, contribution, indemnification or any right to participate in any claim or remedy of
Lender against Borrower or any property securing any of the Guaranteed Obligations which Lender now has or hereafter acquires,
whether or not such claim, right or remedy arises in equity or under contract, statute or common law.

 

    	5

    	 

    

 

10.Access to Borrower
Information. Guarantor now has and will continue to have independent means of obtaining information concerning the affairs,
financial condition and business of Borrower. Lender shall have no obligation to provide Guarantor with any credit or other information
concerning the affairs, financial condition or business of Borrower that is in, or may come into, Lender’s possession.

 

11.Notices.
All Notices shall be given as provided in the Credit Agreement, if to Guarantor, at the address set forth below, and if to Lender,
as provided in the Credit Agreement.

 

12.Binding Nature.
This Guaranty is binding on Guarantor and its successors and assigns, including a debtor-in-possession on behalf of Guarantor,
and shall inure to the benefit of Lender, its successors and assigns.

 

13.Severability.
Any provision of this Guaranty being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such
provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in
any other jurisdiction.

 

14.Remedies.
No delay on the part of Lender in the exercise of any right or remedy under this Guaranty shall operate as a waiver thereof. No
single or partial exercise by Lender of any right or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy. No modification or waiver of any of the provisions of this Guaranty shall be binding upon Lender except
as set forth in a writing executed by Lender.

 

15.Limitation
of Liability for Certain Damages. In no event shall Lender be liable to Guarantor or on any theory of liability for any special,
indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). GUARANTOR, FOR
ITSELF AND ITS AFFILIATES, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR

 

16.Governing Law.
THE LAWS OF THE STATE OF NEBRASKA (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF) SHALL GOVERN ALL MATTERS
ARISING OUT OF, IN CONNECTION WITH OR RELATING TO THIS GUARANTY AND THE OTHER CREDIT AGREEMENT, INCLUDING ITS VALIDITY, INTERPRETATION,
CONSTRUCTION, PERFORMANCE AND ENFORCEMENT..

 

17.Jurisdiction
and Service of Process. Any legal action or proceeding with respect to this Guaranty shall be brought exclusively in the courts
of the State of Nebraska or of the United States for the District of Nebraska, sitting in Omaha, Nebraska, and Guarantor accepts
for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Lender and
Guarantor hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum
non conveniens, that either of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
Guarantor hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other
service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America
with respect to or otherwise arising out of or in connection with this Guaranty by any means permitted by applicable law, including
by the mailing thereof to the address of Guarantor specified on the signature page hereto. Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable law.

 

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18.Waiver of July
Trial. LENDER AND GUARANTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS GUARANTY, THE OTHER CREDIT AGREEMENT AND ANY OTHER TRANSACTION
CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

 

19.Entire Agreement.
This Guaranty embodies the entire agreement of the parties and supersedes all prior agreements and understandings, oral or written,
relating to the subject matter hereof. Guarantor acknowledges and affirms that Guarantor did not rely on any statement, oral or
written, not contained in this Guaranty or the Credit Agreement in making Guarantor’s decisions to enter into this Guaranty.

 

[SIGNATURE PAGE FOLLOWS]

 

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EXECUTED effective as
of the date first set forth above.

 

	 	GUARANTOR:
	 	 	 	 
	 	AgFeed Industries, Inc.
	 	 	 	 
	 	 	 	 
	 	By:	/s/ K. Ivan F. Gothner	 
	 	Printed Name:  K. Ivan F. Gothner
	 	Its: Chairman and CEO
	 	 	 	 
	 	Address for Notices:
	 	100 Bluegrass Commons Blvd.
	 	Suite 310
	 	Hendersonville, TN  37075

 

    	8Exhibit 10.3

Contract No._________

Producer No._________

 

HORMEL FOODS CORPORATION

1 Hormel Place, Austin MN 55912-3680

 

COVER SHEET TO

HOG PROCUREMENT AGREEMENT

 

	Producer:
    Midwest Finishing, LLC                                                  
	Address1: 510 S. 170th Street, Suite 104, Ames, IA 50010      
	Address2:                                                                                              
	Contact Person: Steve Price                                                                                 
	Home/Office No.:	Cell No.:	Fax No.:	E-Mail Address:
	515-598-4640 ex. 266	402-350-1960	                                    	steve.price@agfeedinc.com

 

 

	READ YOUR AGREEMENT CAREFULLY.  This cover sheet provides only a brief summary of your Agreement.  This is not the Agreement and only the terms of the Agreement are legally binding.  The Agreement itself sets forth, in detail, the rights and obligations of both you and us.  IT IS THEREFORE IMPORTANT THAT YOU READ YOUR Agreement CAREFULLY.

 

ADDITIONAL CAPITAL INVESTMENT DISCLOSURE
STATEMENT

Federal law requires disclosure that additional
large capital investments may be required of you during the term of the Agreement.

 

MATERIAL RISK DISCLOSURE STATEMENT

Please carefully consider the following
risk factors in addition to your personal animal husbandry skills, management skills, experience and knowledge before signing the
Agreement.

 

		·	Performance under the terms of the Agreement does not ensure that you will
make a profit.

 

		·	The Agreement requires that you deliver a specific quantity of pigs for
the entire term of the Agreement. This may turn out not to be the most beneficial way for you to market hogs.

 

		·	You bear all risks of production of market hogs.

 

		·	You are responsible for compliance with all applicable federal, state and
local laws and regulations.

 

		·	We may change our policies with respect to deductions for dead, fatigued
or injured hogs and non-harvestable hogs from time to time. Such changes may mean that you are paid less for the same types of
hogs you delivered prior to the change.

 

		·	You agree to incur all freight costs to deliver hogs to our plant as marked
in the Agreement.

 

		·	If you are in default or amounts you owe us are past due, we may pay you
less than amounts you are otherwise due.

 

		·	We may terminate the Agreement prior to expiration of the term of the Agreement
if you are in default.

 

		·	We may terminate the Agreement prior to expiration of the term of the Agreement
if we stop harvesting hogs at the plant(s) designated for delivery of your hogs.

 

		·	If you are in default, we have the right to pursue any and all remedies
available to us at law or in equity.

 

		·	If you default, you must pay us damages set forth in the Agreement.

  

 

	Your Initials: 	/s/ G	 Date: 	4/18/13

 

    	i

    	Contract No._________
Producer No._________

    

 

TABLE OF CONTENTS

 

	Introduction	1
	Definition of “Agreement”	1
	Definition of “Effective Date”	1
	Definition of “PRODUCER”	1
	Definition of “HORMEL FOODS”	1
	1.  Term	1
	Definition of “Weanling Pig Agreement”	1
	2.  Additional Capital Investment Disclosure Statement	1
	3.  Hog Quantity	1
	4.  Price	1
	Definition of “Contract Price”	1
	Definition of “Base Price”	2
	Definition of “Pricing Week”	2
	Definition of “20-Week Corn”	2
	Definition of “Omaha Corn”	2
	Definition of “20-Week SBM”	2
	Definition of “Decatur Meal”	2
	5.  PRODUCER’S Obligations	3
	Definition of “DDGS”	3
	Definition of “COOL”	4
	Definition of “Delivery Locations”	5
	Definition of “HACCP”	5
	6.  HORMEL FOODS’ Obligations	6
	7.  Default; Termination	6
	Definition of “Default”	6
	8.  Remedies	7
	9.  Indemnity	7
	10.  Right Of Offset	7
	11.  No Security Interests or Liens in Hogs	7
	12.  Force Majeure	8
	Definition of “Force Majeure Event”	8
	13.  Assignment; Binding Effect	8
	14.  Waiver	8
	15.  Relationship of Parties	8
	16.  Severability	8
	17.  Survival of Provisions	8
	18.  Amendment	9
	19.  Governing Law	9
	20.  Jurisdiction and Venue	9
	21.  Mediation	9
	22.  Authorization 	9
	23.  Certification	9
	24.  Waiver of Jury Trial	9
	25.  Voluntary Agreement; No Guarantee of Profit	9
	26.  Counterparts	9

  

    	ii

    	Contract No._________
Producer No._________

    

  

Attachments:

	Exhibit A	Quality Assurance Program and Animal Care & Handling Program
	Exhibit B	Carcass Weight and Deduction Per Carcass

  

    	iii

    	Contract No._________
Producer No._________

    

 

Hormel
foods corporation

Hog
procurement agreement

 

This Hog Procurement Agreement (this
“Agreement”) is made effective April 1, 2013 (the “Effective Date”), by and between Midwest
Finishing, LLC, an Delaware limited liability company (referred to in this Agreement as “PRODUCER”) and Hormel
Foods Corporation (referred to in this Agreement as “HORMEL FOODS”).

 

WHEREAS, PRODUCER
is a hog producer who is willing to sell hogs to Hormel Foods, and Hormel
Foods is willing to purchase hogs from PRODUCER.

 

NOW, THEREFORE, in consideration
of the foregoing premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.TERM. The term of this
Agreement commences on the Effective Date and, unless terminated earlier in accordance with this Agreement, expires on the earlier
of: (i) December 31, 2013, or (ii) when the last pig under the Weanling Pig Sales Agreement dated January 1, 2010 by and between
PRODUCER and Champ, LLC, as amended by the First Amendment to Weanling Pig Sales Agreement dated as of April 1, 2013 (the “Weanling
Pig Agreement”) is delivered to HORMEL FOODS and HORMEL FOODS has made payment for such pig.

 

2. ADDITIONAL
CAPITAL INVESTMENT DISCLOSURE STATEMENT. Federal law requires disclosure that additional large capital investments may
be required of PRODUCER during the Term of this Agreement.

 

3.HOG QUANTITY.

 

(a)Quantity.
PRODUCER agrees to sell to HORMEL FOODS under this Agreement, and HORMEL FOODS agrees to buy, all of the market hogs produced by
PRODUCER from the weanling pigs purchased by PRODUCER under the Weanling Pig Agreement.

 

(b)Failure to
Meet Delivery Requirements; Assumption of Risk. PRODUCER acknowledges that it bears the risk of hog production shortfalls.
PRODUCER’S weekly quantities of hogs delivered must be as uniform as is possible. PRODUCER must provide HORMEL FOODS with
written notice of any significant changes in its scheduled market hog production as soon as PRODUCER identifies such changes.

 

4.PRICE.

 

(a)Contract Price. The “Contract
Price” for contract hogs sold to HORMEL FOODS will be a price determined as set forth below:

 

(1)The Base Price determined
pursuant to the Section titled “Base Price;”

 

    	1

    	Contract No._________
Producer No._________

    

 

(2)Minus any applicable
deduction for hogs with carcass weights less than       *      
pounds or more than * pounds calculated in accordance with Exhibit B;

 

(3)Minus any overpayments
that have not been repaid as described in the Section titled “Overpayment;”

 

(4)Minus any offset described
in the Section titled “Offset.”

 

(5)Minus, as set forth
in the Section titled “Requirements for Delivered Hogs,” deductions for (i) costs incurred by HORMEL FOODS for disposing
of dead hogs, or (ii) for fatigued or injured hogs and non-harvestable hogs.

 

		(b)	Base Price. The “Base Price” per carcass hundredweight will be determined
weekly each Friday and will be applicable for the following Pricing Week. “Pricing Week” means the 7 consecutive
days from Sunday through Saturday. The weekly Base Price will be calculated as:

 

			

			($ * + * + ( * * “20-Week Corn”)) + ( * * “20-Week SBM”).

 

			The “20-Week Corn” price will be determined weekly each Friday as the average
of all daily reported high and low bids or offers per bushel for Corn, US No 2 Yellow, Omaha location, as reported by United States
Department of Agriculture (“USDA”) Market News in Daily National Grain Market Summary, report SJ_GR850, for
the immediate 20 business weeks prior to a Pricing Week (“Omaha Corn”). The daily Omaha Corn report is available
at www.ams.usda.gov/mnreports/sj_gr850.txt.

 

			The “20-Week SBM” price will be determined weekly each Friday as the average
of all daily reported high and low bids or offers per ton for 48% Soybean Meal R(ail), Decatur location, as reported by United
States Department of Agriculture (“USDA”) Market News in Central Illinois Soybean Processor Report, report GX_GR117,
for the immediate 20 business weeks prior to a Pricing Week (“Decatur Meal”). The daily Decatur Meal report
is available at www.ams.usda.gov/mnreports/gx_gr117.txt.

 

(c)Overpayment. If HORMEL
FOODS overpays PRODUCER for hogs, PRODUCER agrees to promptly repay any overpayment upon receipt of notice of the overpayment.
If PRODUCER fails to do so, HORMEL FOODS may deduct the overpayment from the Contract Price for PRODUCER’S next delivery(ies)
of hogs.

 

(d)Offset. The Contract
Price, as adjusted by applicable premiums and discounts, to be paid to PRODUCER for contract hogs may be reduced by an offset as
provided in this Agreement.

 

* Material has been omitted pursuant to
a request for confidential treatment and filed separately with the Securities and Exchange Commission.

 

    	2

    	Contract No._________
Producer No._________

    

(e)Risk of Loss Passes at HORMEL
FOODS’ Plant. The hogs supplied under this Agreement will be sold F.O.B. destination, and title to hogs and risk of loss
of hogs pass from PRODUCER to HORMEL FOODS at HORMEL FOODS’ plant.

 

5.PRODUCER’S OBLIGATIONS.

 

(a)Promise to
Perform. PRODUCER agrees and understands that HORMEL FOODS’ payment of the Contract Price as set forth in Section 4 is
made in reliance upon PRODUCER’S promise to perform under this Agreement for the entire term of the Agreement.

 

(b)Compliance
with Laws Relevant To a Hog Production Operation. PRODUCER is solely responsible for the operation and management of its hog
production operation, including but not limited to proper animal care and handling. PRODUCER is solely responsible for compliance
of its hog production operation with all applicable federal, state and local laws and regulations, including criminal laws relating
to mistreatment of animals. Examples include laws and regulations relating to permits to operate facilities, handling and disposal
of manure, and disposal of dead hogs.

 

(c)HORMEL FOODS’
Review and Approval of PRODUCER’S Operations. PRODUCER must allow HORMEL FOODS to review and approve the following aspects
of its hog production operation at the commencement of this Agreement and any changes PRODUCER makes to these aspects:

 

(1)A genetic program
capable of producing lean, uniform sorted hogs that consistently meet HORMEL FOODS’ requirements;

 

(2)Facilities to farrow
and finish hogs year round and/or sources of weanling and/or feeder pigs;

 

(3)A balanced nutritional
swine diet where the hogs’ minimum requirements are met. All feed ingredients in the swine ration must contain only ingredients
or products that are USDA/Food and Drug Administration (“FDA”) approved for use in food animals. The feeding program
must also follow Hormel Foods’ written recommendation on feeding of dried distiller’s grains with solubles (“DDGS”).
HORMEL FOODS may in its sole discretion change the DDGS policy by providing written notice to PRODUCER;

 

(4)A cost and recordkeeping
system; and

 

(5)A tracking system to
comply with COOL (as defined in Section 5(d)(7) below).

 

(d)Requirements
for Delivered Hogs. All hogs delivered by PRODUCER under this Agreement must be as follows:

 

(1)Top quality, healthy
and wholesome hogs that pass pre and post mortem inspection;

 

    	3

    	Contract No._________
Producer No._________

    

 

(2)Free of foreign objects
(e.g., needles);

 

(3)Have a carcass weight
of at least * pounds and not more than      *       pounds;

 

(4)Not crippled, lame, sick,
overfilled or otherwise unmerchantable at time of delivery;

 

(5)Handled by PRODUCER and
transporters in such a manner so as to promote best animal care and handling;

 

(6) PRODUCER is expected
to have a veterinary-client-patient relationship (“VCPR”). PRODUCER must follow the guidelines set forth in FDA’s
published Compliance Policy Guide (“CPG”) 7125.37 (“Proper Drug Use and Residue Avoidance by Non-Veterinarians”).

 

(i)PRODUCER understands
HORMEL FOODS and USDA have the option to and expect to conduct random residue testing and any positives found are grounds for termination
of this Agreement;

 

(ii)In addition to minimum
withdrawal requirements set forth by law, HORMEL FOODS requires a 14-day withdrawal on any tetracyclines prior to delivery of hogs
to the delivery plant; and

 

(7) Designated
as exclusively having a “United States country of origin,” as such term is defined in the Agricultural Marketing Act
of 1946, as amended, or similar legislation (referred
to in this Agreement as “COOL”), and in
accordance with any corresponding labeling or tracking requirements that HORMEL FOODS may require by written notice
during the Term of this Agreement.

 

If PRODUCER brings any hogs to the delivery
location that do not meet the above requirements, they will be handled according to the following procedures:

 

(8)Dead Hogs. PRODUCER will
be assessed the costs incurred by HORMEL FOODS for disposing of any dead hogs that are delivered by PRODUCER to the delivery location
and hogs that die prior to harvest. Costs associated with dead pig disposal that will be deducted by HORMEL FOODS and will be posted
at each delivery location. These costs will be deducted from the total price to be paid to PRODUCER.

 

(9)Fatigued or Injured Hogs.
Fatigued or injured animals will be paid in accordance with HORMEL FOODS’ standard policies regarding fatigued or injured
hogs, which policy may be changed in HORMEL FOODS’ sole discretion by providing written notice to PRODUCER.

 

* Material has been omitted pursuant to
a request for confidential treatment and filed separately with the Securities and Exchange Commission.

    	4

    	Contract No._________
Producer No._________

    

 

(10)Non-Harvestable Hogs.
Non-harvestable hogs are live hogs that do not meet HORMEL FOODS’ or USDA’s requirements set forth in Section 5(d).
Non-harvestable hogs must be segregated from all other hogs on any load brought to the delivery location. Non-harvestable hogs
will be paid based on HORMEL FOODS’ standard policies regarding non-harvestable hogs, which policy may be changed in HORMEL
FOODS’ sole discretion by providing written notice to PRODUCER.

 

(e)Transportation
and Delivery of Hogs. PRODUCER agrees to deliver hogs under this Agreement by:

 

(1)Arranging transportation
with transporters certified under the Transport Quality Assurance® (“TQASM”) Program of America’s
Pork Producers, and incurring freight costs to deliver the hogs to the HORMEL FOODS plants located in Austin, Minnesota and Fremont,
Nebraska (collectively, the “Delivery Locations”);

 

(2)Delivering the hogs to
a delivery plant other than the Delivery Locations if so directed by HORMEL FOODS. HORMEL FOODS will pay PRODUCER for additional
freight costs incurred by such delivery pursuant to HORMEL FOODS’ then current standard livestock freight schedule; and

 

(3)Arranging delivery with
HORMEL FOODS’ Hog Procurement personnel by Wednesday of the week prior to delivery, with specific delivery days and times
to be determined by HORMEL FOODS. Early, late, Sunday and holiday deliveries will be required. Time is of the essence in the delivery
of hogs under this Agreement.

 

(f)HACCP; Quality
Assurance Program and Animal Care & Handling Program. PRODUCER agrees that PRODUCER is
subject to the requirements of the Quality Assurance Program and the Animal Care & Handling Program attached as Exhibit A.
PRODUCER also agrees to the following:

 

(1)To maintain certification
of the National Pork Board’s Pork Quality Assurance Plus® Program (“PQA PlusSM”) and Transport
Quality Assurance® Program (“TQASM”), a Hazard Analysis and Critical Control Points (“HACCP”)
program, or the highest Level of such PQA Program and/or TQA Program established in the future within six months of the Program
change establishing such Level. This includes the site assessment in the current PQA PlusSM Program for each location
involved in supplying hogs to HORMEL FOODS, as well as any future assessment/third party audit that may be required through the
Program or by HORMEL FOODS;

 

(2)To comply with any HACCP
or quality program established by HORMEL FOODS or any governmental agency, or by any industry-accepted group, and any change in
such a program, within six months of the establishment of the program or the change.

 

(3)HORMEL FOODS has announced
a change to the Quality Assurance Program and Animal Care & Handling Program, which change will go into effect in approximately
the fall of 2013. PRODUCER agrees that it will comply with the revised program, called “Farm Animal Care and Treatment Specifications”
(“FACTS”), within six months of receiving a written notice from HORMEL FOODS advising of the commencement date for
the new program.

 

    	5

    	Contract No._________
Producer No._________

    

 

(g)Inspection of Hogs and Facilities;
Inspection of Records. PRODUCER agrees to the following:

 

(1)To allow HORMEL FOODS
to inspect PRODUCER’S hogs and facilities during normal business hours on reasonable notice;

 

(2)To demonstrate to HORMEL
FOODS at all times the ability to produce hogs in the quantity and of the quality required during the term of this Agreement;

 

(3)To demonstrate PRODUCER’S
financial soundness to HORMEL FOODS at all times and provide evidence thereof to HORMEL FOODS upon request, including providing
financial statements, production information, and written notice to HORMEL FOODS of any default by PRODUCER under any loan agreement
with its lender(s), regardless of whether such default is declared by the lender(s).

 

6.HORMEL FOODS’ OBLIGATIONS.

 

(a)Payment for Hogs. HORMEL
FOODS agrees to pay PRODUCER for contracted hogs as set forth in Section 4 for the entire term of this Agreement.

 

(b)Inspection and weighing.
HORMEL FOODS will inspect and weigh carcasses at HORMEL FOODS’ plant.

 

(c)Records. HORMEL FOODS
will keep all necessary records with respect to receipt, weighing and payment for all carcasses in accordance with HORMEL FOODS’
regular record retention and destruction schedule. HORMEL FOODS currently retains all P&L’s and checks for two years.
Upon giving HORMEL FOODS reasonable notice, PRODUCER may inspect such records relating to its hogs during normal business hours
at locations designated by HORMEL FOODS. HORMEL FOODS will supply at PRODUCER’S expense copies of such records as PRODUCER
reasonably request.

 

7.DEFAULT; TERMINATION.

 

		(a)	Default. For purposes of this Agreement, “Default” means:

 

(1)Either party breaches
this Agreement and such breach remains uncured sixty (60) days after receipt from the non-defaulting party of a written notice
specifying the breach;

 

(2)Either party manifests
an intention not to perform any material obligation under this Agreement (for example, delivering hogs or accepting hogs) or manifests
an intention not to cure a material breach of this Agreement;

 

(3)PRODUCER or its parents,
subsidiaries or affiliates is in default under any other agreement with HORMEL FOODS or its parents, subsidiaries or affiliates;
or HORMEL FOODS or its parents, subsidiaries or affiliates is in default under any other agreement with PRODUCER or its parents,
subsidiaries or affiliates;

 

    	6

    	Contract No._________
Producer No._________

    

 

(4)(i) PRODUCER’S
pigs become endangered, as determined by HORMEL FOODS in its reasonable judgment, (ii) PRODUCER violates any local, state, or federal
laws, regulations, permits or orders pertaining to environmental safety, or (iii) PRODUCER violates any local, state, or federal
laws, regulations, permits, or orders pertaining to food safety; or

 

(5)Either party becomes
insolvent, suspends or discontinues business operations, makes an assignment for the benefit of creditors, commences voluntary
or has commenced against them involuntary bankruptcy proceedings, or voluntarily appoints or involuntarily has appointed a receiver
or trustee of all or any part of their property.

 

(b)Termination
upon Default. If the other party is in Default pursuant to Section 7(a)(1), 7(a)(2) or 7(a)(3), the non-defaulting party may
terminate this Agreement by written notice to the defaulting party. Upon delivery of such a written notice of termination this
Agreement will immediately terminate. This Agreement shall automatically terminate, without further action, if a Default occurs
pursuant to Section 7(a)(4) or 7(a)(5). The parties’ obligations under this Section will survive termination as provided
in the Section titled “Survival of Provisions”.

 

(c) Discontinuance
of Harvest Operations at Plant. If HORMEL FOODS discontinues harvesting hogs at the Delivery Locations, then HORMEL FOODS will
at its option (1) terminate this Agreement by written notice to PRODUCER, or (2) notify PRODUCER of the new designated delivery
plant(s) to which PRODUCER must deliver contracted hogs. HORMEL FOODS will pay PRODUCER for any additional freight costs incurred
by such delivery pursuant to HORMEL FOODS’ then current standard livestock freight schedule.

 

8.REMEDIES. If the other
party is in Default, the non-defaulting party will have the right to pursue any and all remedies available at law or in equity,
including without limitation any remedies granted by this Agreement. The remedies will be considered cumulative, with the pursuit
of any one or more remedies not preventing the pursuit of any other remedies that may be available.

 

9.INDEMNITY. Each party
will indemnify and hold the other party harmless for any and all liabilities, damages, claims, judgments, costs and expenses incurred
by the other party in connection with such party’s breach of this Agreement. Such expenses will include without limitation
reasonable attorneys’ fees.

 

10.RIGHT OF OFFSET. HORMEL
FOODS may offset any amounts owed to HORMEL FOODS against any amounts otherwise due and owing to PRODUCER under this Agreement
and any other agreement or transaction between the parties until all such amounts owed to HORMEL FOODS have been satisfied.

 

11.NO SECURITY INTERESTS OR LIENS
IN HOGS. PRODUCER represents to HORMEL FOODS that all hogs sold under this Agreement are free and clear of all security
interests and liens of any kind whatsoever, except the security interest of Farm Credit Services of America, FLCA and Farm Credit
Services of America, PCA and as specifically provided in a written notice received by HORMEL FOODS at least thirty (30) days prior
to delivery of the hogs to HORMEL FOODS. If hogs sold under this Agreement are subject to any security interest or lien, HORMEL
FOODS may make payments jointly to PRODUCER and the secured party or lien holder.

 

    	7

    	Contract No._________
Producer No._________

    

 

12.FORCE MAJEURE. Neither
party will be liable for damages due to delay or failure to perform any obligation under this Agreement during any period of time
when performance is commercially impossible because of a Force Majeure Event. “Force Majeure Event” means strike
or other labor difficulties, breakdown or damage to facilities, acts of war, acts of terrorism, pandemic human diseases, civil
commotions, acts of any governmental authority, interference in telephone or electronic communications, fire, flood, windstorms,
and similar causes beyond the reasonable control of the affected party. “Force Majeure Event” does not include
hog health or diseases that affect the production of hogs unless they are the subject of a mandate by any governmental authority.
“Force Majeure Event” also does not include financial or market conditions. A party claiming it is excused from
performance by a Force Majeure Event must promptly provide the other party written notice of such Force Majeure Event and its estimated
duration.

 

13.ASSIGNMENT; BINDING EFFECT.
PRODUCER does not have the right to assign this Agreement or any of its rights or obligations under this Agreement without HORMEL
FOODS’ prior written consent. PRODUCER may, however, assign this Agreement or any of its rights hereunder to its lender(s)
as collateral security for any loan. This Agreement will be binding on PRODUCER’S heirs, successors and permitted assigns
and on HORMEL FOODS’ successors and assigns.

 

14.WAIVER. Any breach
of this Agreement or any right provided by this Agreement may be waived only in a writing signed by the waiving party. Any such
waiver will not affect the validity of this Agreement, or the right of either party to thereafter enforce every provision of this
Agreement. Any breach of this Agreement or any right provided by this Agreement may not be waived by any course of dealing or prior
performance.

 

15.RELATIONSHIP OF PARTIES.
The parties are independent contractors, with neither party in any way the legal representative or agent of the other party. Neither
party has any right or authority to act for or bind the other party in any manner.

 

16.SEVERABILITY. If any
term or provision of this Agreement is held to be illegal or in conflict with any federal, state or local law or regulation, the
validity of the remainder of this Agreement will not be affected. The rights and obligations of the parties will be construed and
enforced as if this Agreement did not contain the particular term or provision held to be invalid.

 

17.SURVIVAL OF PROVISIONS.
Any provisions of this Agreement that by their terms have or may have application after the expiration or termination of this Agreement
will be deemed to the extent of such application to survive the expiration or termination of this Agreement. Examples of such provisions
are the Sections titled “Remedies,” “Indemnity,” “Right of Offset,” “Amendment,”
“Governing Law,” “Jurisdiction and Venue,” “Mediation.”

 

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    	Contract No._________
Producer No._________

    

 

18.AMENDMENT. This Agreement
may be amended or supplemented only in writing by the parties, and not by any course of dealing or prior performance.

 

19.GOVERNING LAW. This
Agreement and the rights of the parties hereunder will be governed by and interpreted in accordance with the laws of the State
of Minnesota without regard to conflict of laws principles, except to the extent that doing so is prohibited by the law of the
State in which the principal part of the performance takes place under this Agreement, in which case this Agreement and the rights
of the parties hereunder will be governed by the State in which the principal part of the performance takes place under this Agreement.

 

20.JURISDICTION AND VENUE.
All judicial proceedings and actions arising out of or relating to this Agreement shall be located in the Federal judicial district
in which the principal part of the performance takes place under this Agreement.

 

21.MEDIATION. The parties
agree to the use of mediation to attempt to resolve any dispute between the parties arising out of or relating to this Agreement.
The mediator will have no authority to impose a settlement of any such dispute. Mediation will be conducted pursuant to the Minnesota
Civil Mediation Act, Minnesota Statutes, §§ 572.31 to
572.40.

 

22.AUTHORIZATION. Each
party represents and warrants to the other party that it has taken all necessary action to duly authorize the execution, delivery
and performance of this Agreement. The individual signing this Agreement on each party’s behalf certifies that he/she is
duly authorized to execute this Agreement on behalf of such party.

 

23.CERTIFICATION. The
parties intend that this Agreement comply with the provisions of the Minnesota Agricultural Contracts Law (Minnesota Statutes,
Section 17.90 et. seq.). HORMEL FOODS intends to submit this Agreement for certification of compliance with the Minnesota
Agricultural Contracts Law. The parties determined to proceed with this Agreement prior to obtaining such certification and PRODUCER
agrees to such amendments of this Agreement as may be reasonably requested by HORMEL FOODS in order to obtain such certification.

 

24.WAIVER OF JURY TRIAL.
THE PARTIES WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT,
OR UNDER ANY RELATED DOCUMENT OR AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

 

25.VOLUNTARY
AGREEMENT; NO GUARANTEE OF PROFIT. By signing this Agreement, PRODUCER acknowledges that: (i) PRODUCER has voluntarily
entered into this Agreement on PRODUCER’S own accord; (ii) PRODUCER has had adequate opportunity to consult with PRODUCER’S
own attorney and accountant regarding all legal, accounting and tax consequences of this Agreement; and (iii) HORMEL FOODS and
its employees and agents make no representations or guarantees of any kind whatsoever regarding the consequences or profitability
of this Agreement to PRODUCER.

 

    	9

    	Contract No._________
Producer No._________

    

 

26.Counterparts.
This Agreement may be executed in one or more counterparts, and by the parties in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

 

[Signature Page Follows]

 

    	10

    	Contract No._________
Producer No._________

    

 

IN WITNESS WHEREOF, the parties have caused
this Agreement to be signed by their duly authorized representatives as of the Effective Date.

 

	HORMEL
                                                              FOODS CORPORATION

(“HORMEL FOODS”)

	 	MIDWEST
                                                              FINISHING, LLC

(“PRODUCER”)

	 	 	 	 	 	 	 
	By:	/s/ Jeff Nuytten	 	By:	 /s/ Gerry Daignault
	 	 	 	 	 	 	 
	Print Name:	Jeff Nuytten     	 	Print Name:	Gerry Daignault
	 	 	 	 	 	 	 
	Title:	Vice Pres. Operations, Refrig. Foods	 	Title:	President
	 	 	 	 	 	 	 
	Date:	4/18/13	 	Date:	4/18/13

  

    	11

    	Contract No._________
Producer No._________

    

 

EXHIBIT A

 

Quality
Assurance Program

and

Animal
Care & Handling Program

 

Hormel
Foods Corporation has established the following Quality Assurance Program, which includes recommended Animal Care and Handling
Program (together, “Programs”) requirements. Every Producer supplying hogs, whether by written contract, verbal agreement,
open market purchases, or negotiated purchases, to Hormel Foods Corporation is subject to the requirements of these Programs. Hormel
Foods Corporation’s purchases of hogs from any Producer are expressly contingent upon that Producer’s compliance with
these Programs.

 

1.Quality
Assurance Program 

 

		A.	Every Producer must demonstrate to Hormel Foods that
all of its employees who handle hogs are certified in National Pork Board’s Pork Quality Assurance Plus® Program (PQA
PlusSM) and Transport Quality Assurance® Program (TQASM) and will maintain certification during all time
periods that Producer supplies hogs to Hormel Foods. Each Producer must certify to Hormel Foods that they are complying with this
requirement, using the attached certification form. 

 

		B.	All of Producer’s sites raising hogs to be
supplied to Hormel Foods must achieve Site Status, as defined by the PQA Plus Program, by the later of (i) December 31, 2009, or
(ii) within 90 days of first delivering hogs to Hormel Foods.

 

		C.	Every Producer that purchases weaned pigs or feeder
pigs is responsible for ensuring that the weaned pig and feeder pig suppliers have established and maintain appropriate quality
assurance programs, which includes an animal care & handling program.

 

2.Animal
Care & Handling Program 

 

		A.	Every Producer must establish and maintain an internal
“Animal Care & Handling Program”. Such a program may include the following requirements:

 

		i.	Producer should provide an animal care abuse reporting
source (including a phone number with voice mail or an email address) where employees can report animal abuse or improper care.
This contact information should be posted in all swine production facilities and in all locations where legal notices are usually
posted for employees. In addition, the Producer should review and provide copies of this contact information to all employees on
at least an annual basis.

 

		ii.	Producer should educate and train its employees on
all Standard Operating Procedures which cover all animal care and handling points from the PQA Plus and TQA programs.

 

		iii.	Producer’s employees should affirm that they
have been educated, trained and understand the animal care and handling program. 

 

    	12

    	Contract No._________
Producer No._________

    

 

		iv.	Producer’s employees should affirm that they
will not abuse animals or witness abuse without reporting it immediately. Failure to report is grounds for termination.

 

		v.	Producers should have a continuous training program
in place.

 

		vi.	Producer should conduct self-audits on a regular
basis, and should consider having third-party audits conducted annually.

 

		B.	All Producers under written contract are legally
obligated to abide by Hormel Foods’ quality assurance programs, which includes an animal care & handling program. Hormel
Foods also requires that any producers selling hogs under a verbal agreement, open market purchase, or negotiated purchase, also
comply with Hormel Foods’ quality assurance programs. The actions of a Producer’s employees are solely the responsibility
of that Producer. The Producer’s employees are expected to abide by the same rules and regulations that apply to the Producer.
If after appropriate investigation, it is determined that the Producer’s employees violated these rules and regulations,
Hormel Foods expects that appropriate disciplinary action will take place.

 

		C.	Hormel Foods Corporation may review Producer’s
Animal Care & Handling Program in the normal course of business. If Producer does not have an appropriate or acceptable Animal
Care & Handling Program in place, this will be considered a Breach of any Hog Procurement Agreement between Hormel Foods and
Producer. The Hog Procurement Agreement may allow Producer time to cure its Breach by implementing an acceptable Program.

 

		D.	Every Producer that purchases weaned pigs or feeder
pigs is responsible for ensuring that the weaned pig and feeder pig suppliers also have an appropriate animal care & handling
program. 

 

3.Violation
of Animal Care & Handling Program

 

		A.	If Hormel Foods receives a report of inappropriate
animal care involving Producer or a Producer’s employees, Hormel Foods will immediately conduct an investigation into the
reported allegations. The Producer must cooperate with the investigation, with Hormel Foods Corporation, and with legal authorities.

 

		B.	During the investigation, hog shipments from the
suspected site will be suspended indefinitely. This suspension of shipments will not be deemed a breach of any written contract
or verbal agreement by Hormel Foods.

 

		C.	If after appropriate investigation, Hormel Foods
has reasonably determined that animals were wrongfully abused or handled in an inappropriate manner (inconsistent with industry
standard practices), in violation of Hormel Foods’ quality assurance programs, which includes an animal care & handling
program, this will be deemed a Default of any Hog Procurement Agreement or verbal agreement between Hormel Foods and Producer.
Upon Default, Hormel Foods reserves the right to take appropriate action up to and including immediate termination of any hog procurement
supply agreement or portion thereof from the violating Producer, or immediate termination of any outstanding orders under a verbal
agreement with the violating Producer. 

 

    	13

    	Contract No._________
Producer No._________

    

 

Producer Certification

 

The
undersigned Producer hereby certifies to Hormel Foods that:

 

		1.	All of Producer’s employees who handle hogs
have been certified in National Pork Board’s Pork Quality Assurance Plus® Program (PQA PlusSM) and Transport
Quality Assurance® Program (TQASM); 

 

		2.	Producer will ensure that all new employees who handle
hogs will be promptly certified in PQA Plus and TQA;

 

		3.	Producer will ensure that all employees who handle
hogs will maintain certification during all time periods that Producer supplies hogs to Hormel Foods; and

 

		4.	All of Producer’s sites raising hogs to be
supplied to Hormel Foods have achieved, by the later of (i) December 31, 2009, or (ii) within 90 days of first delivering hogs
to Hormel Foods, Site Status as defined by the PQA Plus Program, and that all sites will maintain Site Status during all time periods
that Producer supplies hogs to Hormel Foods.

 

		5.	Producer understands and agrees that
this Quality Assurance Program and Animal Care & Handling Program will remain in effect until such time that
it is replaced by Hormel Foods’ “Farm Animal Care and Treatment Specifications” (“FACTS”).Producer
agrees that it will comply with FACTS within six months of receiving a written notice from Hormel Foods advising of the commencement
date for FACTS.

 

	Dated:	 	 	Signature:	   
	 	 	 	 	 
	 	 	 	Print Name:	 
	 	 	 	 	 
	 	 	 	Title:	 
	 	 	 	 	 
	 	 	 	Producer’s Legal Name and Address:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

  

    	14

    	Contract No._________
Producer No._________

    

 

EXHIBIT B

 

The Contract Price for all contract hogs
shall be reduced by a sort loss deduction calculated using the carcass weight and deduction per carcass cwt. set forth in the following
table:

 

*

 

* Material has been omitted pursuant to
a request for confidential treatment and filed separately with the Securities and Exchange Commission.

 

    	15

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