March 13, 1998
TO WHOM IT MAY CONCERN:
This agreement is made and entered into this 11th day of November,
1997 by and between Nebraska Beef, Omaha, Nebraska
And
Red Oak Farms, Inc., Xxx Xxx, Xxxx 00000.
Whereas Nebraska Beef is engaged in the business of slaughtering
and fabricating beef and owns and operates a plant to do so in
Omaha, Nebraska which is subject to United States Department of
Agriculture (USDA) inspection. Nebraska Beef desires to provide
fee-based xxxxxxxxx and fabrication services to Red Oak Farms, Inc.
as well as purchase designated offal; by products and cattle that
Red Oak may choose to sell them.
Whereas, Red Oak Farms is engaged in the business of purchasing
Certified Hereford Beef cattle and marketing and selling fabricated
beef. Red Oak Farms, Inc. desires to solicit xxxxxxxxx and
fabrication services for beef animals meeting Certified Hereford
Beef certification. Red Oak Hereford Farms, Inc. desires to sell
to Nebraska Beef certain offal and by-product items of which Red
Oak Hereford Farms, Inc. does not market and sell at the present
time. Red Oak Hereford Farms also desires to sell to Nebraska Beef
certain carcasses that do not meet the USDA certification for
Certified Hereford Beef.
Now therefore in consideration of the promises and mutual covenants
set forth in the agreement the parties agree as follows:
Nebraska Beef will xxxxxxxxx and fabricate 500 to 4,500 CHB
carcasses per week. Red Oak will make a best effort attempt to
harvest cattle each week.
Nebraska Beef and Red Oak Farms will negotiate premiums and
discounts on all cattle weekly.
Nebraska Beef will purchase offal and hide items at what they sell
theirs for on an average weekly basis.
Nebraska Beef will purchase from Red Oak Farms, Inc. all hides from
cattle under this agreement. The purchase price will be what
Nebraska Beef receives. Red Oak Farms retains the right to market
hides if they want.
Nebraska Beef's payment to Red Oak Farms, Inc. will be a net
payment (payment for non-certified cattle, plus offal, plus hides,
minus the xxxxxxxxx and fabrication fee) closed out weekly with
check issued to Red Oak Hereford Farms, Inc. within seven (7) days
of xxxxxxxxx.
Nebraska Beef
March 13, 1998
Page (2)
Red Oak Farms, Inc. will pay Nebraska Beef $35.00 for every carcass
slaughtered but not fabricated (non-certified cattle). Red Oak
Farms, Inc. will pay Nebraska Beef according to the following
schedule which includes boxes and bags, xxxxxxxxx and
fabrication.
Number of Head Fabricated Fee Per Head
First 1,500 $93.50
Next 1,000 $89.50
Next 1,000 $86.50
6a. Cost revised annually for actual cost increases
Red Oak Farms, Inc. will deliver the cattle for weekly or daily
xxxxxxxxx to the plant either the evening before or the morning of
the xxxxxxxxx to be scheduled with Nebraska Beef cattle buyers.
Red Oak Farms, Inc. will notify the Omaha office (Xxxx Xxxxxx) as
to the number of cattle to be delivered each week.
Red Oak Farms will communicate with Nebraska Beef fabrication as to
fabrication instruction or changes each week.
Red Oak Farms Inc. will provide Nebraska Beef with boxed beef
shipping orders and truck schedules daily. Nebraska Beef will
store all boxes in their facility.
Red Oak Farms, Inc. will have a representative present at the plant
the day of xxxxxxxxx, grading and also the day of fabrication.
Terms: This agreement commences this 1st day of December, 1997
and shall terminate December 1st, 2000, unless terminated or
extended sooner by a) mutual consent of both parties; b) if
either party becomes solvent or bankrupt; c) violation of the
terms of this agreement (with a 30 day continuation period); or d)
by either party for any reason after 120 day written notification.
Section c) is not applicable to paragraph 2.
Amendments: This agreement may be amended at any time by mutual
consent.
Binding Effect: This agreement shall be binding on the parties
hereto and their respective heirs, executors, successors, and
assigns.
______________________________ ______________________________
President Date President Date
Nebraska Beef Red Oak Farms, Inc.
GMR:kjt
