Exhibit 10.33
EXCESS FEEDER PIG PURCHASE AGREEMENT
THIS EXCESS FEEDER PIG PURCHASE AGREEMENT (this "Agreement") is entered
into as of this 28th day of February, 1997, by and between ALLIANCE FARMS
COOPERATIVE ASSOCIATION (hereinafter "Association"), and FARMLAND INDUSTRIES,
INC. (hereinafter "Purchaser").
WHEREAS, Association is engaged in the production and sale of feeder pigs;
and
WHEREAS, Purchaser is a purchaser of feeder pigs, possesses expertise in
swine production and management, and desires to enter into this Agreement for
purposes of acquiring feeder pigs;
WHEREAS, Purchaser and Association are parties to a Swine Production
Services Agreement, dated as of July 13, 1994, pursuant to which Purchaser has
been granted the right to purchase all, or any portion, of Association's Excess
Pigs (as defined in Section 2).
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
1. PURCHASE/SALE OF EXCESS FEEDER PIGS.
(a) GENERAL. Upon and subject to all terms and conditions set forth
in this Agreement, Purchaser shall purchase from Association, and Association
shall sell to Purchaser, Excess Pigs produced by Association, in lots
(hereinafter "Lot" or "Lots") of no less than 900, and no more than 1,000,
Qualifying Pigs (as defined in Section 2) per Lot, as determined by Association,
which Lots shall be made available to Purchaser from one or more of
Association's existing or future feeder pig production facilities. Purchaser's
purchase obligation hereunder shall not exceed 46 Lots per any 12-month period
occurring within the term of this Agreement.
(b) AVAILABILITY. The number of Lots made available to Purchaser and
the frequency of availability of such Lots is not determinable by the parties,
but shall be comparable to the availability and frequency that would be
applicable to a member of Association owning 17 shares of Association's common
stock, $0.01 par value, to which Lots are made available on a rotating schedule
with other members of the Association. Purchaser acknowledges that Lots will
not be made available to Purchaser under this Agreement until Qualifying Pigs
are produced and available from the facilities constructed using the proceeds of
the Farmland Debt (as defined in Section 2), and that the number of Lots made
available to Purchaser and the frequency of availability of such Lots will be
subject to actual production of Qualifying Pigs from all facilities of
Association. Association shall give notice to Purchaser when a Lot is available
for purchase by Purchaser hereunder, which notice shall specify the anticipated
number of Qualifying Pigs in such Lot and the scheduled shipment date.
2. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
EXCESS PIGS shall mean (a) Qualifying Pigs produced by Association that are
in excess of the Qualifying Pigs (i) made available by Association for
purchase under the Feeder Pig Purchase Agreements between Association and
its members or (ii) used by Association in its breeding stock multiplier
units, and (b) Qualifying Pigs that a member of Association has failed to
purchase pursuant to a Feeder Pig Purchase Agreement between Association
and such member.
FARMLAND DEBT shall mean the loan to Association made by Purchaser pursuant
to that certain Loan Agreement, dated as of November 27, 1996, by and
between Purchaser and Association, and evidenced by that certain Promissory
Note, dated November 27, 1996, of Association to Purchaser in the principal
amount of $1,360,000.
QUALIFYING PIGS shall mean feeder pigs having a minimum weight of 35
pounds, managed in accordance with Section 7, and free of the following
defects (with terms used in reference to defects being given the meaning
generally utilized in the swine industry) at the time of loading:
(a) uncastrated or freshly castrated males;
(b) ruptures, umbilical or scrotal hernia larger than a two-inch
diameter;
(c) observable Atrophic Rhinitis, evidenced by deformed or twisted
snout with or without bleeding;
(d) evidence of chronic, untreatable respiratory disease;
(e) unthrifty, poor-doing pigs;
(f) observable signs of lameness, stiffness, or other locomotor
disorders evidenced by swelling or malformed joints;
(g) severe diarrhea or transmissible gastroenteritis;
(h) observable abscesses; and
(i) anal prolapse.
3. PURCHASE PRICE OF PIGS.
(a) PRICE. The purchase price for each Qualifying Pig purchased by
Purchaser under this Agreement shall be an amount equal to the sum of the
following:
Financing Cost Per Pig, plus
Operating Cost Per Pig, plus
Production Margin.
Purchaser acknowledges that Association has constructed, or is in the process of
constructing, or both, Production Units as a result of completed offers and
sales of shares of its capital stock and the provision of the Farmland Debt. In
light of the foregoing, the determination of the Financing Cost Per Pig portion
of the purchase price for a Qualifying Pig hereunder shall be made in relation
to the Production Unit that is being constructed using the proceeds of the
Farmland Debt.
(b) DEFINITIONS. As used in this Section 3, the following terms
shall have the following meanings:
FINANCING COST PER PIG shall be determined on a prospective rolling 12-
month basis and shall mean an amount equal to the quotient of (i) the sum
of the required payments of interest and principal (including any scheduled
sinking fund payments) to be made during the upcoming 12-month period with
respect to Purchaser's Debt, divided by (ii) Pigs Shipped.
OPERATING COST PER PIG shall be determined on a rolling 12-month historical
basis and shall mean an amount equal to the quotient of (i) the sum of (A)
all direct and indirect production, operating, selling, general,
administrative, and other expenses incurred by Association in the 12 months
preceding the then present month of shipment as determined by Association's
accountants utilizing generally accepted accounting principles consistently
applied (excluding any provision for interest expense or depreciation or
amortization of the cost of buildings, equipment, breeding stock or other
capitalized costs which were purchased as a result of Purchaser's Debt and
Farmland Debt or as a result of the issuance of any capital stock of
Association to any third party), plus (B) the net cash flow cost of all
capital expenditures by Association (including any capital sinking fund
payments) for production facility and breeding stock improvements and
replacements in the 12 months preceding the then present month of shipment
as determined by Association's accountants, divided by (ii) Pigs Shipped.
The direct and indirect production and operating expenses attributable to a
Production Unit which is in the process of commencing production shall not
be included in the determination of Operating Cost Per Pig, and shipments
of pigs attributable to such Production Unit shall not be included in Pigs
Shipped, until such Production Unit has completed one entire month of full
production, shipping pigs in each week thereof. The net cash flow with
respect to capital expenditures for production facility and breeding stock
improvements and replacements (which net cash flow shall be determined
after taking into account the breeding stock and production facility
retirements attributable to a Production Unit which is in the process of
commencing production) shall not be included in the determination of
Operating Cost Per Pig until the respective Production Unit has completed
one entire month of full production, shipping pigs in each week thereof.
PRODUCTION MARGIN shall mean an amount equal to zero dollars ($0.00).
PIGS SHIPPED shall mean the number of Qualifying Pigs produced and shipped
from Association over the same 12-month period in determining the Operating
Cost Per Pig and the estimated number of Qualifying Pigs that will be
produced and shipped by Association over the 12-month period in determining
the Financing Cost Per Pig. For purposes of determining the Financing Cost
Per Pig, Pigs Shipped shall be equal to the product of (i) Association's
total estimated number of Qualifying Pigs to be produced and shipped by
Association during such 12-month period, multiplied by (ii) a fraction, the
numerator of which shall be one (i.e., the number of Production Units being
constructed using the proceeds of the Farmland Debt), and the denominator
of which shall be the total number of Production Units constructed by
Association with respect to all issuances of its capital stock or
constructed using the proceeds of the Farmland Debt. All estimates
relating to Pigs Shipped shall be made by Association using such historical
data and projections as are available to Association.
PRODUCTION UNIT shall mean the land and facilities necessary to house, feed
and care for a group of 2,450 sows and the attendant offspring thereof.
PURCHASER'S DEBT shall mean (i) the debt, excluding the Farmland Debt,
incurred by Association for the Production Unit being constructed using the
proceeds of the Farmland Debt, including any debt incurred for purposes of
financing the acquisition of land for, and construction of, such Production
Unit, (ii) any debt, excluding the Farmland Debt, incurred for the initial
working capital requirements with respect to the operation of such
Production Unit, and (iii) any debt incurred for purposes of refinancing
any such debt.
4. PAYMENT OF PURCHASE PRICE. Association shall furnish to Purchaser, at
the time Association notifies Purchaser that a Lot is available for purchase by
Purchaser hereunder, an estimate of the total purchase price of the Qualifying
Pigs included in the Lot, and Purchaser shall, not less than one day prior to
the scheduled shipment date as specified in the notice by Association to
Purchaser, pay such estimated total purchase price to Association in cash, or by
such other means as may be acceptable to Association in its sole and absolute
discretion. Association shall have no obligation to commence transportation of
such Qualifying Pigs to Purchaser prior to full payment of such estimated total
purchase price for such Qualifying Pigs as herein provided. The actual total
purchase price of all Qualifying Pigs included in a Lot shall be based upon
weight at the time of loading and settlement of any adjustments shall be made
within five days following delivery.
5. WEIGHT ADJUSTMENT. The purchase price for each Qualifying Pig as
provided in Section 3 is for a Lot of Qualifying Pigs having an average weight
of 45 pounds. In the event that the average weight of the Qualifying Pigs in a
Lot sold to Purchaser exceeds 45 pounds, Purchaser shall pay Association an
additional twenty-five cents ($0.25) per pound per Qualifying Pig on the number
of pounds (not to exceed five pounds) that the Lot's average shipping weight per
pig exceeds 45 pounds, and an additional fifteen cents ($0.15) per pound per
Qualifying Pig on the number of pounds (not to exceed ten pounds) that the Lot's
average shipping weight per pig exceeds 50 pounds. To the extent that the
average weight of the Qualifying Pigs in a Lot sold to Purchaser is less than 45
pounds, twenty-five cents ($0.25) per pound on the number of pounds that the
Lot's average shipping weight per pig is less than 45 pounds shall be deducted
from the purchase price that Purchaser is to pay to Association for each
Qualifying Pig. Purchaser shall have the right to, but shall not be obligated
to, purchase a Lot of Qualifying Pigs hereunder at an average weight of less
than 40 pounds per pig.
6. GENETIC QUALITY. Qualifying Pigs initially produced by Association
will be progeny from (a) DeKalb hybrid gilts/sows from lines DK 31, DK 33,
DK 43, D 3 and D 9, to the extent such gilts/sows are reasonably available to
Association, mated with DeKalb hybrid boars from lines DK 77, DK 97 and C 4, to
the extent such boars are reasonably available to Association, (b) genetic stock
that is substantially equivalent to or greater quality than such DeKalb genetic
stock described in subsection (a) above (as determined in Association's sole and
absolute discretion), to the extent such genetic stock is reasonably available
to Association from DeKalb or any other producer (including Association or a
member of Association) of genetic stock, or (c) terminal cross gilts/sows mated
with DeKalb hybrid boars from lines DK 77 and DK 97, to the extent such boars
are reasonably available to Association, which terminal cross gilts/sows shall
be progeny of DeKalb hybrid gilts/sows from lines DK 31, DK 33, DK 43, or D 9
stock, to the extent such gilts/sows are reasonably available to Association,
mated with DeKalb hybrid boars from lines DK 77 or DK 97, to the extent such
boars are reasonably available to Association. Association will replace
terminal cross gilts/sows with DeKalb DK 31, DK 33, DK 43, D 3 or D 9 hybrid
genetic stock or genetic stock substantially equivalent to or greater quality
than such DeKalb genetic stock, as such genetic stock becomes reasonably
available to Association from DeKalb or any other producer (including
Association or a member of Association) of genetic stock. Thereafter,
Qualifying Pigs produced by Association will be progeny from genetic stock
described in subsections (a) or (b), or both, of this Section 6, to the extent
such genetic stock is reasonably available to Association from DeKalb or any
other producer (including Association or a member of Association) of genetic
stock.
7. MANAGEMENT OF HEALTH AND NUTRITION. Association agrees to comply with
the following health and nutrition programs with respect to all pigs to be
purchased under this Agreement:
(a) Association shall dock tails within 48 hours of a pig's
birth.
(b) Association shall castrate male pigs within ten days of the pig's
birth.
(c) Association shall, to the extent that Association reasonably
determines that the following procedures are necessary or advisable with
respect to a herd, (i) administer Ivomec to all feeder pigs, (ii) deworm
breeding herd with Atgard or Safe-guard, (iii) spray breeding herd with
Tacktic or Prolate, (iv) vaccinate breeding herd and all offspring with a
federally licensed Atrophic Rhinitis bacterin containing Bordetella and
Pasteurella Multocida, types A & D, (v) inoculate pigs with Erysipelas
Bactrin (or such other inoculum that is substantially equivalent to or
greater quality than Erysipelas Bactrin as determined by Association in its
sole and absolute discretion), and (vi) perform such other procedures that
are reasonably determined by Association to be necessary or advisable with
respect to a herd.
(d) Association shall maintain Association's swine free from the
pseudorabies virus ("PRV") or any swine disease that would prohibit
interstate shipment of pigs produced by Association, or that might
otherwise materially impair Purchaser's ability to utilize the pigs to be
purchased under this Agreement. If, in the opinion of two veterinarians
selected by Association and reasonably acceptable to Purchaser, any of the
swine produced by Association or used in the production of feeder pigs for
delivery hereunder contracts PRV, Association shall have the opportunity to
cure such impairment within a reasonable period of time and to suspend, at
any time and from time to time, the sale and purchase of feeder pigs
hereunder until such time as said veterinarians determine that PRV no
longer exists.
(e) Association shall use a feeding regimen, feed products, and herd
health products developed or marketed by Farmland Industries, Inc., or any
of its affiliates.
8. RIGHT OF INSPECTION. Upon reasonable notice to Association, Purchaser
or its representative shall have the right to inspect Association's production
records to verify the genetic quality and management of nutrition and health
programs prescribed by this Agreement during normal business hours.
9. ADJUSTMENT FOR NON-QUALIFYING PIGS. Purchaser shall have the right to
inspect Purchaser's Lot of Qualifying Pigs prior to loading. In the event that,
after delivery of such Lot, Purchaser believes that any pig was not a Qualifying
Pig prior to loading (a "Subject Pig"), Purchaser shall notify Association by
telephone of such belief within one (1) business day following delivery as well
as promptly notify Association of such belief in the manner provided in Section
19 hereof. Association shall have the right to inspect any and all Subject Pigs
in investigation of Purchaser's belief, and thereafter Association and Purchaser
shall agree in good faith upon an appropriate adjustment, if any, with respect
to such Subject Pigs. Purchaser hereby acknowledges and agrees that such
adjustment described above shall be Purchaser's sole and exclusive remedy as
against Association arising out of the purchase hereunder of a pig that was not
a Qualifying Pig at the time of loading and that the failure of Association to
deliver Qualifying Pigs as otherwise required hereunder shall not give rise to a
right of Purchaser to terminate this Agreement. Furthermore, in no event shall
Purchaser reject delivery of a Lot of pigs hereunder, but in lieu thereof
Purchaser shall accept each delivery of a Lot of pigs hereunder and, with
respect to any and all pigs that Purchaser believes were not Qualifying Pigs
prior to loading, shall comply with the provisions of this Section 9 and, until
such adjustment, if any, is agreed upon by Association and Purchaser, shall, at
Purchaser's expense, feed, water, treat and care for any and all such pigs as if
Purchaser believed such pigs were Qualifying Pigs prior to loading.
10. HEALTH PERMITS. Association shall provide Purchaser, at Association's
expense, all health permits necessary to qualify all Qualifying Pigs for
interstate shipment.
11. WEIGHING CONDITIONS. All Lots of Qualifying Pigs shall be weighed at
Association's expense at a state-inspected scale in close proximity to
Association's production facility. A copy of all scale tickets will be provided
to Association and to Purchaser.
12. IDENTIFICATION. Association shall appropriately identify, prior to
shipment, all Qualifying Pigs in accordance with the rules that will allow
interstate shipment to the states to which the pigs are being shipped.
13. TRANSPORTATION OF PIGS. Qualifying Pigs shall be shipped to Purchaser
FOB shipping point. Association shall at Purchaser's expense arrange for
transportation of Qualifying Pigs from any of Association's production
facilities as determined by Association; provided, however, that Purchaser shall
pay such transportation costs no later than the time of delivery. Trucks shall
be thoroughly cleaned and disinfected prior to hauling any pigs from
Association's production facilities and after any previously hauled pigs.
14. TERM OF AGREEMENT. The term of this Agreement shall commence on the
date first written above and shall continue for twelve (12) months after the
month in which the first Lot of Qualifying Pigs is shipped by Association to
Purchaser hereunder, subject to the following:
(a) In the event that Purchaser fails to purchase, pay for, and take
delivery of any two Lots when and as made available to Purchaser in
accordance with the terms of this Agreement, Association shall have the
right, in its sole discretion, to terminate this Agreement and to exercise
its remedies as provided in Section 17 hereof. The occurrence of any such
failure to purchase, pay for, and take delivery of any two Lots shall not
constitute, trigger or be deemed a default or breach under any Feeder Pig
Purchase Agreement between Purchaser and Association.
(b) In the event of a material breach of any agreement or covenant of
Association contained in this Agreement, Purchaser may give written notice
of such breach to Association and, in the event that such breach is not
cured within a period (the "Cure Period") of thirty (30) days following
such notice of breach by Purchaser to Association, Purchaser shall have the
right to terminate this Agreement upon notice to Association, provided that
such notice of termination is given by Purchaser to Association within
thirty (30) days following the Cure Period.
(c) If the first Lot of Qualifying Pigs is not shipped to Purchaser
hereunder within twenty-four (24) months of the date of this Agreement,
Purchaser shall have the right to terminate this Agreement upon notice to
Association, provided that such notice of termination is given by Purchaser
to Association within three (3) months after the expiration of such twenty-
four (24) month period; provided, however, that any such termination shall
not terminate or otherwise affect any Feeder Pig Purchase Agreement between
Purchaser and Association.
(d) Upon the repayment in full of the Farmland Debt (whether by
prepayment, payment as a result of acceleration or payment at maturity),
this Agreement automatically shall terminate.
(e) This Agreement shall be extended automatically for
succeeding and consecutive twelve (12) month terms unless either party
gives to the other party, not less than two (2) months prior to the
expiration of the initial term or any extended term hereof, notice
that such party desires to terminate this Agreement as of the
expiration of such initial or extended term.
Notwithstanding the foregoing, however, the rights of Association to collect
damages and to exercise its remedies under Section 17 hereunder shall survive
any termination of this Agreement.
15. WARRANTIES. ASSOCIATION MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED
TO PURCHASER OTHER THAN AS HEREIN EXPRESSLY PROVIDED, AND SPECIFICALLY (A) MAKES
NO WARRANTY AS TO ANY SPECIFIC LEVEL OF PERFORMANCE WITH RESPECT TO ANY PIGS
SOLD HEREUNDER, AND (B) DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR OF
FITNESS FOR A PARTICULAR PURPOSE.
16. FORCE MAJEURE. Either party to this Agreement shall be relieved of
its responsibility and obligations hereunder during any period when performance
is commercially impossible because of reasons beyond its control such as, but
not limited to, fire, explosion, strike, accident, governmental regulations or
intervention, and acts of God.
17. DEFAULT BY PURCHASER; GRANT OF SECURITY INTEREST. Purchaser
acknowledges that the damages suffered by Association in the event of any
failure by Purchaser to purchase, pay for, and take delivery of any Lot when and
as made available to Purchaser in accordance with the terms hereof shall equal,
and Purchaser shall be liable to Association for and shall pay to Association
upon demand, the sum of the following: (a) the difference between the price
payable by Purchaser hereunder for Qualifying Pigs included in such Lot and the
then current market price (as of the scheduled shipment date for such Lot) for
Qualifying Pigs as quoted in any independent industry publication or source
selected by Association, multiplied by the number of Qualifying Pigs in such Lot
that Purchaser has failed to purchase, pay for, and take delivery of, in
accordance with the terms hereof; plus (b) administrative and other costs and
expenses relating to such Lot, which are hereby agreed to equal the amount of
$3,000; plus (c) costs of collection, enforcement, and prosecution of
Association's rights and remedies hereunder or otherwise arising, whether or not
involving a case, action, or other proceeding before any state or federal court
or other body, including, but not limited to, reasonable attorney's fees,
collection agency fees, and other costs of collection; provided, however, that
to the extent applicable law prohibits collection of attorney's fees and/or
costs, this subsection (c) shall be null and void to the extent of such
prohibition, except to preserve Association's rights pursuant to 11 U.S.C.
' 506(b). During any period in which Purchaser has been notified that it is
obligated to pay an amount for damages pursuant to the immediately preceding
sentence and has not paid such amount within three days of such demand,
Association shall not make any future Lots available to Purchaser for purchase
hereunder until Purchaser has paid such amount. In the event that Purchaser is
not made available any Lot for purchase hereunder pursuant to the immediately
preceding sentence that Association otherwise would have made available to
Purchaser for purchase hereunder, then Purchaser shall be deemed to have failed
to purchase, pay for, and take delivery of such Lot, and Purchaser shall be
liable for damages with respect to such Lot computed in accordance with the
first sentence of this Section. Upon any termination of this Agreement,
Purchaser's liability for damages incurred by Association with respect to
Purchaser's obligation to purchase, pay for and take delivery of Lots made
available to the Purchaser shall be limited to the damages with respect to such
Lots computed in accordance with the preceding provisions of this Section 17,
and Purchaser shall not be liable for any other damages for the failure to
purchase, pay for or take delivery of Lots hereunder after the termination of
this Agreement.
If Purchaser shall be in default under this Agreement, Association may
exercise any and all rights and remedies available to Association hereunder,
under any applicable Uniform Commercial Code, or otherwise at law or in equity.
The rights and remedies afforded to Association hereunder shall be cumulative
and in addition to, and not in limitation of, any rights and remedies which
Association may otherwise have under applicable law, including any applicable
Uniform Commercial Code. The exercise or partial exercise of any right or
remedy of Association hereunder or under applicable law shall not preclude or
prejudice the further exercise of that right or remedy or the exercise of any
other right or remedy of Association. No delay or omission on the part of
Association in exercising any right hereunder or otherwise shall operate as a
waiver of such right. A waiver on any one occasion shall not be construed as a
bar or waiver of any right or remedy on any future occasion.
18. ARBITRATION. In the event of any controversy arising out of or
relating to this Agreement, or any breach hereof, other than any controversy
arising out of or relating to Section 17 hereof or the exercise of any rights or
remedies thereunder, the parties agree to submit the dispute to binding
arbitration in accordance with the Commercial Arbitration Rules then in force of
the American Arbitration Association. Such arbitration shall be initiated by
either party by notifying the other party in writing and requesting a panel of
five (5) arbitrators from the American Arbitration Association, which
arbitrators shall be individuals skilled in the legal and business aspects of
the subject matter of this Agreement and of the dispute. Alternate strikes
shall be made to the panel commencing with the party requesting the arbitration
until one individual remains. Such individual shall be the arbitrator for the
controversy. The party requesting the arbitration shall notify the arbitrator
who shall hold a hearing(s) within 60 days of the notice. Any hearing(s) shall
take place in Denver, Colorado, or such other location as the parties may agree
upon. The arbitrator shall render a decision, including a written opinion in
support thereof, within 30 days after the conclusion of the hearing(s), which
decision shall be final and binding upon the parties without right of appeal.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Costs of the arbitration will be assessed by the
arbitrator against either or both of the parties, and will be paid promptly by
the party or parties so assessed.
19. NOTICES. Any notice given or required to be given hereunder shall be
deemed to have been effectively given when delivered personally or sent by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed or transmitted to Association at Alliance Farms Cooperative
Association, c/o Farmland Industries, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
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to Purchaser at the address set forth below Purchaser's signature, and/or to
such other (or additional) address(es) requested by a notice given in accordance
with this Section.
20. ENTIRE AGREEMENT. This Agreement contains all of the terms agreed
upon by the parties with respect to the subject matter hereof and supersedes all
prior agreements of the parties as to the subject matter hereof; provided,
however, any and all Feeder Pig Purchase Agreements between Purchaser and
Association shall not be superseded, modified or otherwise affected by this
Agreement. This Agreement may not be modified except in writing, signed by the
parties hereto, that specifically references this Agreement.
21. ASSIGNMENT. This Agreement may not be assigned by either party
without prior written consent of the other party; provided, however, that
Association may assign Association's rights herein and hereto to any lender that
may provide financing to Association in connection with the construction of
facilities or the operation thereof, or both. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors, and permitted assigns.
22. CONSTRUCTION. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado. The parties hereto hereby
agree that if any part, term or provision of this Agreement is held by a court
of competent jurisdiction to be illegal or unenforceable or in conflict with any
controlling state law, the validity of the remaining parts, terms and provisions
of this Agreement shall not be affected, and the rights and obligations of the
parties shall be construed and enforced as if this Agreement did not contain the
particular part, term or provision held to be illegal or unenforceable or in
conflict with any controlling state law. This Agreement and the transactions
contemplated hereunder constitute commercial, and not consumer, transactions.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION CLAUSE THAT MAY BE ENFORCED
BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the
day and year first above written.
ASSOCIATION: PURCHASER:
ALLIANCE FARMS COOPERATIVE FARMLAND INDUSTRIES, INC.
ASSOCIATION
By: By:
Name: Name:
Title: Title:
Purchaser's Address:
Farmland Industries, Inc.
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Attention: ▇▇▇▇▇ ▇▇▇▇▇
