The terms in this section of the report relate to any item not connected to determination of base price, carcass merit premiums and discounts, noncarcass merit premiums and discounts, or application of ledger accounts.

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Quality and Weight
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General Contract Terms

Carcass Evaluation Program or Matrix

• A new carcass value comparison shall be performed each three (3) months, as set forth above. The payments to producer for the hogs delivered in the following three (3) months shall be based on each such new carcass value comparison.
• All deliveries of hogs shall meet or exceed the specifications for weight, NPPC level, and average lean yield set forth on specified schedule attached hereto and incorporated by reference herein.
• All hogs delivered by producer under this agreement must be as follows: (i) Top quality/healthy and wholesome hogs that pass pre and post mortem inspection; (ii) Free of foreign objects (e.g./needles); (iii) Have a carcass weight of at least one hundred sixty pounds (160 pounds) and not more than two hundred forty-nine (249) pounds; (iv) Not crippled/lame, sick, overfilled or otherwise unmerchantable at time of delivery; (v) Derived from approved farrowing facilities and/or approved sources of weanling and feeder pigs and finished by you in your finishing facilities; (vi) Handled by producer and transporters in such a manner so as to optimize meat quality; (vii) Supervised by a licensed veterinarian and in compliance with any applicable drug use requirements and withdrawal procedures; and (viii) Producer's weekly quantities of hogs delivered must be as uniform as is possible.
• All hogs shall be free of the following defects: (i) abscesses (ii) scars (iii) ruptures, (iv) intact males; (v) freshly castrated (vi) fresh cut or unhealed wound (vii) any defect that would result in a downgrade of the animal's carcass.
• All yield and lean premiums on such hogs shall be for the benefit of packer and shall not be applied to the price paid to producer for hogs delivered under such agreements.
• At present, size is determined by weight in pounds, and lean percentage is measured using a specified evaluation device.
• Carcass merit program means a program used by packer to determine the premium above, or the discount below, the base carcass price or spot market price (whichever is applicable) at which packer will pay producer for hogs. The carcass merit program is currently based on the hot carcass weight and the lean percentage of the hog and is attached hereto as specified schedule; provided, however, that packer may change the factors used to determine the premium above or discount below the base carcass price, or spot market base price, from time to time, subject to the restrictions set forth in specified section.
• Carcass merit program means a program used by packer to determine the premium above, or the discount below, the base carcass price or target price (whichever is applicable) at which packer will pay producer for hogs. The carcass merit program is currently based on the hot carcass weight and the lean percentage of the hog and is attached hereto as specified schedule; provided, however, that packer may change the factors used to determine the premium above or discount below the base carcass price, from time to time.
• For all loads of hogs delivered other than under forward hog contracts referred, as set forth in specified paragraph above, the price will be adjusted downward from the base price established in specified paragraph, using packer's existing premium and discount schedule in effect on the date of the delivery of such load of hogs.
• For purposes of this agreement, market hogs shall mean live barrows and gilts which (i) meet the weight ranges of packer's carcass merit program; (ii) meet USDA inspection standards; (iii) are fit for human consumption; (iv) are not defective (defective shall mean intact males; freshly castrated males; hogs with ruptures, drug residue beyond USDA limits, abscesses, fresh cuts, unhealed wounds; or hogs with any other condition which causes a down grade (i.e. decrease in value) or condemnation of a hog carcass by a USDA inspector at the plant); and (v) meet the specifications set forth on exhibit. attached hereto and made a part hereof.
• For purposes of this agreement, the carcass merit adjustment shall be the amount determined pursuant to packer's carcass merit program.
• Hogs delivered to packer by producer other than under forward hog contracts referred to in specified paragraph above shall be purchased by packer on a carcass merit basis under packer's then existing carcass merit program.
• Hogs shall be free of foreign objects (e.g., needles).
• Hogs shall be top quality, healthy and wholesome, free of foreign objects (e.g., needles) and weigh at least two hundred twenty-five (225) pounds.
• Hogs will be purchased and paid for hereunder in accordance with packer's carcass merit program, as the same may be revised from time to time.
• Hogs will meet all other quality characteristics defined in the agreement.
• If more than 50% of a lot of hogs has carcass weights between 208 and 222 pounds (or between 281 and 300 pounds live weight, when the carcass weight is divided by .74), and the lean premium in packer’s then current carcass merit program is reduced for the same weights, then the reduced dollar amount set forth in specified paragraph will not be returned to producer.
• If the initial or any of the three (3) month interval conversion tests results in a percentage comparison of the carcass value of the hogs delivered by producer to packer's carcass value that is either less than 97% or greater than 105%, then packer shall perform a second conversion test on the next scheduled delivery of hogs from such producer.
• It is mutually understood between packer and producer that producer will produce hogs with carcasses that will equal or exceed the average of all carcasses from hogs delivered to packer based on the existing carcass evaluation system at the time of delivery.
• Market hogs means hogs meeting each of standards of quality set forth or otherwise described in specified section of the agreement (including, without limitation, the specifications set forth on specified schedule attached to the agreement and incorporated by reference in specified section).
• No hogs shall be crippled, lame, sick, overfilled or otherwise unmerchantable at time of delivery.
• Packer's existing premium and discount schedules at time of kill of hogs will be the schedule of determining carcass value.
• In the event either party is prevented from performing its obligations under this agreement by circumstances beyond its reasonable control including, without limitation, fire, explosion, flood, acts of God, war and other hostilities or like events (Force Majeure events). the obligations of such party under this agreement shall be suspended for the period of the Force Majeure event. If the period of the Force Majeure event is extended for more than thirty (30) days, either party may terminate this agreement without further obligation to the other except as already incurred. In the event that packer determines, in its sole discretion and for any reason, that its operations at its hog slaughter facilities shall be suspended, significantly curtailed or permanently discontinued as a result of a Force Majeure event, then packer shall have the option to terminate this agreement by giving producer sixty (60) days notice thereof, without further obligation to producer except as already incurred hereunder. Notwithstanding anything to the contrary in this paragraph, health or other production issues shall not be considered a Force Majeure event.
• Packer maintains a carcass value standard that represents the dollar value of what packer will receive for all parts of the hogs that it slaughters. At the first delivery of hogs by producer, and at three (3) month intervals thereafter, packer shall perform a conversion test on the hogs delivered by producer to compare the carcass value of the hogs delivered by producer to packer carcass value. The comparison shall be by percentage, indicating the percentage by which the carcass value of the hogs delivered by producer compares to packer's carcass value.
• Producer agrees to raise aid supply to packer top quality, healthy and wholesome hogs. Producer shall have a genetic program capable of producing lean, uniform sorted hogs that consistently meet the quality standards of packer in existence from time to time.
• Producer shall deliver top quality, healthy and wholesome hogs that pass pre and post mortem inspection.
• Producer will receive grade and yield premiums under packer's carcass merit program, as it exists at the date of delivery of the hogs by producer. Packer reserves the right upon reasonable written notice to producer to modify its then existing carcass merit program, so long as such change is applied to producer and to all producers who sell their hogs to packer on a grade and yield basis.
• Qualifying market hogs shall mean the market hogs delivered to packer that conform to the following criteria: 1) An average scalded carcass weight per lot of 170 pounds to 222 pounds; 2) free of the following defects: (i) tail bites; (ii) uncastrated males; (iii) freshly castrated males; (iv) ruptures; (v) abscesses; (vi) freshly cut or unhealed wounds; or (vii) any defect that would result in a down-grade of the animal's carcass or value.
• The base price shall be adjusted in accordance with packer's carcass merit program in effect at the time of delivery to determine the final amount to be paid to producer. Carcass merit program premiums and discounts will be determined on the basis of the market price, except as provided in specified paragraph.
• The base price shall be subject to premiums and discounts for carcass lean and weight, which premiums and discounts will be determined in accordance with packer's carcass merit program in effect at the time of slaughter. A copy of the current carcass merit program is attached hereto as specified exhibit. The carcass merit program may be changed by packer at any time and from time to time to reflect developments in the pork industry and governmental price reporting. In the event there is a change in the utilization or definition of the USDA or specified price report set forth above, packer upon 30 days prior written notice to producer will adopt a pricing index that in its reasonable judgment most closely approximates the changed specified price report.
• The base price will be used in connection with packer's carcass merit program in effect at the time of delivery to determine the final amount to be paid to producer.
• The carcass merit adjustment shall be determined in respect of each load of hogs delivered pursuant to this agreement. Said carcass premium and discount schedule shall be in effect for the entire duration of this agreement unless modified pursuant to this agreement. The parties agree that specified exhibit shall be revised to reflect any changes in packer's then current carcass program.
• The carcass merit adjustment shall be the amount determined pursuant to packer's carcass merit program. The carcass merit program shall be the prevailing premium and discount schedule offered at packer's plant at the time of delivery.
• The premium and discount schedule shall be the prevailing premium and discount schedule offered at packer's plant at the time of delivery, changing as and when packer changes such premium and discount schedule.
• The standard pH shall mean the base pH set forth from time to time in packer's premium and discount schedule existing from time to time as described in specified section.
• The term lean premium shall mean the premium and/or discounts paid by packer to producer for carcasses above or below the standard lean percent set by packer, as the same may be adjusted from time to time.
• The term sort margin shall mean the discounts given by packer to producer for carcasses above or below the desired weight as set by packer on its then applicable premium and discount schedule.
• The term yield premium shall mean the premiums and/or discounts paid by packer to producer for carcasses above or below the standard yield percent set by packer, as the same may be adjusted from time to time.

Carcass Merit Exceptions

• Nonqualifying market hogs shall mean all market hogs that do not conform to the requirements for market hogs.

Changes in Evaluation, Target Weight or Grades

• Any proposed change to packer's carcass merit program premiums and discounts will be evaluated by packer by calculating the average carcass merit program premium/discount percentage under such change based on all hogs packer purchased in the prior twelve months. This new average carcass merit program premium/discount percentage must be 102% or more. All such calculations shall be conclusive absent manifest error.
• Except for live weight range at the time of delivery, which is specifically defined above, the definition of market hog may be reasonably amended by packer from time to time to reflect changes made by packer to all of its suppliers in general.
• If a change adversely affects producer, packer and producer agree to meet and discuss a mutually agreeable remedy to return producer to similar economic competitiveness enjoyed before said change.
• If packer and producer cannot agree on a remedy, producer shall have the option of returning to methods utilized before the change or terminating the agreement upon sixty (60) days written notice to packer, subject to any obligations under specified section above.
• If producer is to receive carcass merit premiums, packer reserves the right upon reasonable written notice to producer to modify its then existing carcass merit program, so long as such change is applied to producer and to all other producers who sell their hogs to packer on a carcass merit basis.
• Other factors that could result in changes to the cost of production schedule may include, without limitation, changes in packer's instruments for determining lean percentage or size.
• Packer agrees that no changes shall be made in such instruments unless the substitute instrument is considered by packer to be more accurate.
• Packer agrees that producer shall receive 30 days written notice prior to any changes in the premium and discount schedule or any of the factors used in determining the cost of production schedule, to include but not be limited to change in instruments used for determining lean percentage or size.
• Packer may change the cost of production schedule from time to time; provided, however, packer shall give producer 30 days written notice prior to changing the cost of production schedule.
• Packer may change the methods used to measure lean percentage in the current carcass merit program or any measurement devices in any future carcass merit programs from time to time with prior notice to producer.
• Packer may revise such standard pH from time to time. Packer shall give producer thirty (30) days notice prior to establishing or revising such standard pH. Packer may, in its discretion, determine pH by testing carcasses on a random basis or by testing each individual carcass.
• Packer reserves the right to modify its carcass merit program at any time during the term to respond to changes in industry standards, product marketability, and advances in evaluation procedures.
• Packer reserves the right upon reasonable notice to producer to modify its then existing packer carcass merit program from time to time, so long as such change is applied to each producer who sells its hogs to packer under the terms and provisions comparable to those set forth in specified section above.
• Packer shall give producer thirty (30) days written notice prior to any changes or revision to packer's premium and discount schedule.
• Packer shall have the right, from time to time, to change (i) carcass evaluation methods or the carcass merit program, and (ii) the method used to measure lean percentage in the current carcass merit program or any measurement or any measurement device in any future carcass merit program.
• Packer will provide producer written notice of any change in packer's carcass merit program.
• Packer's carcass merit program is subject to change by packer in its discretion from time to time.
• Producer acknowledges that packer's current premium and discount schedule is based upon packer's current definition for a standard carcass, which is a carcass with 50% lean and a carcass weight of approximately 188 pounds., and that such schedule may be changed by packer from time to time and that changes may reflect, among other factors, changes in packer's definition of standard carcass.
• Producer understands and acknowledges that, in light of the term of this agreement, industry standards for top quality, healthy and wholesome hogs may change over time and that packer reserves the right upon reasonable written notice to producer to modify or supplement the specifications set forth on specified schedule and the other standards of quality described herein and/or to establish additional standards of quality consistent with evolving industry standards for quality.
• Specified schedule may be reasonably amended by packer from time to time.
• The definition of hog may be reasonably amended by packer from time to time to reflect changes made by packer to all of its suppliers in general.
• These weights (i.e., live weight per hog, average live weight per load, average live weight per close-out load, and minimum and maximum live weight per hog) may be revised by packer from time to time, in the event that packer changes its standard weights, packer shall give producer thirty (30) days written notice prior to any such revision.
• Under the terms of this agreement, packer reserves the right at any time and from time to time during the term of this agreement including any extension or renewal thereof, to amend, supplement or otherwise modify its carcass merit program for any reason it deems necessary to reflect changing market conditions or other trends in the meat industry generally.

Drug Usage or Withdrawal

• Producer shall give thirty (30) days written notice prior to any use by producer of Beta Agonist, PST, Ractopamin, or any similar substance in producing the hogs, and producer shall discontinue the use of such substances if they adversely affect, as determined by packer, packer's processing of the hogs or marketing of the pork products from the hogs.
• Producer understands that as a participant in the specified pricing program, producer is required to sell 100% of his production of hogs to packer.
• Producer will, at all times during the term and any renewed or extended term hereof, be supervised by a licensed veterinarian and will properly use any applicable drugs and adhere to the required withdrawal procedures.
• Producer's hogs must be supervised by a licensed veterinarian and producer must properly use any applicable drugs and adhere to required withdrawal procedures thereto.
• For future sow units, both parties agree that packer is obligated to purchase all the hogs from these units as constructed and producer is obligated to sell all the market hogs under producer marketing control from these units when constructed.
• If for any reason beyond the control of producer, (such as financing, or permits, or any other reason whatsoever) producer is not able to construct any of these facilities, producer is not obligated to provide these hogs or any equivalent to packer.
• Producer agrees to maintain all drug withdrawals at levels that allow packer to sell pork products in all export markets in which it is currently doing, or may begin to do, business in. Producer agrees to withdraw all oral tetracycline products a minimum of two (2) weeks prior to slaughter.
• Producer shall be supervised by a licensed veterinarian and in compliance with any applicable drug use requirements and withdrawal procedures.
• Producer shall be supervised by, or maintain a regular working relationship with, a licensed veterinarian and shall properly administer all applicable drugs and follow all appropriate withdrawal procedures applicable thereto.
• Producer shall give thirty (30) days written notice prior to any use by producer of Beta Agonist, PST, Ractopamin, or any similar substance in producing the hogs, and producer shall discontinue the use of such substances if they adversely affect, as determined by packer, packer's processing of the hogs.

Failure to Meet Standards

• If during the term of this agreement, packer notifies producer in writing that, in its good faith belief, producer no longer produces hogs that meet the standards in any material respect, and such notice describes said deficiencies with reasonable specificity, then producer will have until six (6) months after its receipt of the substandard report to correct any deficiencies described in substandard report which remain in existence and bring its production up to the standards.
• If producer disputes the existence of any deficiency described in a substandard report, producer and packer shall meet within specified period after receipt of the substandard report by producer to resolve the dispute.
• In the event that producer delivers hogs that fail to conform to the requirements of this agreement, then packer may, in addition to all other remedies available to packer, either reject or accept any non-conforming hogs.
• Producer understands and acknowledges that packer may suspend, at its option and upon 30 days' notice to producer, producer's participation in the referenced program. Upon suspension of participation as provided for in this section, packer shall pay to producer all unamortized start-up costs incurred by producer in obtaining certification together with 20%of producer's start-up costs which are not subject to depreciation (all as determined by producer from its books and records) but in a total amount not to exceed specified dollar amount. Said sum shall be due and owing no later than 60 days following such notice to producer of suspension of packer's participation in said program. Packer shall not be required to make any payment hereunder (i) if producer fails to remain certified for a period of one (1) year, or (ii) if producer remains certified pursuant to the above-referenced program and packer increases the base payment percentage by .75% for certified hogs, for a period of one (1) year, as provided for in specified section.

Genetics

• All such hogs delivered by producer shall be produced under a genetic program capable of producing lean, uniform sorted hogs that consistently meet the quality standards of packer in existence from time to time.
• Producer agrees to use a genetic program capable of producing lean, uniform sorted hogs that consistently meet packer's requirements.
• Producer agrees to use improved genetic lines mutually agreed to by both packer and producer.
• Producer must have in place a genetic program capable of producing lean, uniform sorted hogs that consistently meet packer’s requirements.
• Producer warrants that the hogs delivered will continue to meet, in all material respects, the genetic and carcass attributes that are currently being delivered by producer to packer. Producer shall provide packer with sixty (60) days written notice prior to implementing any proposed material change in genetics, nutrition or production management that may have an adverse effect on the kill performance and/or value of meat derived from the hogs. Packer shall provide producer, within fifteen (15) days of receipt of producer's notice, of any objections to any such material change (any objections shall be based upon a reasonable determination by packer that such material change will have an adverse effect on the kill performance and/or value of the meat derived from the hogs). If packer has no such objections, then producer may implement such material change. If packer has such objections, then producer shall not implement such material change in a manner that results in actual delivery to packer of hogs bearing such change in attributes.
• Producer will use genetics to produce hogs that on average will have a meat quality (which includes firmness, water holding capacity, marbling, ph reading of 5.7 or higher, and color determined by a specified evaluation device reading of 48.0 or less) that equals or exceeds the meat quality of all other hogs delivered to packer for slaughter.
• Producer will use genetics to produce hogs that on average will have a meat quality (which includes, without limitation, firmness, water holding capacity and marbling as determined by tests such as ph and specified evaluation device readings) that equals or exceeds the average meat quality of all other hogs delivered to packer for slaughter.
• The genetics used by producer to produce the hogs shall be approved genetic lines for female lines and approved genetic lines (maternal) and approved genetic lines (terminal), approved genetic lines (maternal) and approved genetic lines (terminal) for sire lines. Producer shall not change such genetics without packer's prior written consent.
• Utilize terminal crosses for all hogs (except in the cases of barrows and cull gifts from internal breeding nucleus or multiplier operations).

Lean Percentage and Yield

• All hogs shall on average, over each semi-annual period, be no less than the greater of (i) 53%, or (ii) an amount which meets or exceeds the plant average (with respect to the plant to which the hogs are delivered). Such measurements shall, except as otherwise be set forth in this agreement, be made by specified evaluation device.
• All loads must be greater than or equal to 50.0 % lean.
• All loads must be no less than 50% lean.
• Any lot of hogs with an average lean percentage lower than 48% shall not count toward the minimum quantity of hogs required to be delivered by producer under this agreement.
• Carcasses will be scalded at packer’s slaughter facility. Carcass yield for carcasses will be determined after removing the head, kidneys, leaf fat, hanging tenders, and spinal cord. Carcass yield or trim loss due to health reasons, carcass defects, bruises, and any other trimming or harvesting procedures conducted by packer in its sole and absolute discretion is at producer’s expense.
• Hogs that have a minimum average lean percentage of 49% as measured by the specified evaluation device or other device which packer may subsequently use to measure the lean percentage for use in the carcass merit program.
• Hogs that have a minimum average lean percentage of 50% as measured by the specified evaluation device or other device which packer may subsequently use to measure the lean percentage for use in the carcass merit program.
• Hogs that have a minimum truckload lot average lean percentage of fifty percent (50%) as measured by the specified evaluation device or other device which packer may subsequently use to measure the lean percentage for use in the carcass merit program.
• Hogs will provide minimum lean yield of 49%.
• Hogs will provide minimum lean yield of 52%.
• Hogs will provide minimum lean yield of 54%.
• Hot dressing yield shall average, over each consecutive 6 month period, no less than the greater of (i) over 75% per load, or (ii) an amount which meets or exceeds the plant average (with respect to the plant to which the hogs are delivered).

Meat Quality or Usability

• All condemned hogs shall be producer's responsibility and packer shall make no payment to producer for any condemned hogs.
• All hogs delivered under this agreement will be purchased subject to passing inspection by the USDA with deductions and compensation for all carcasses or carcass parts that are condemned by USDA inspectors.
• Handle the hogs both at load out and in transit trucking so as to minimize stress and damage.
• Handle the hogs in such a way as to minimize the damage to muscle tissue through bruising, improper injections, or other invasive procedures.
• Handled by producer and transporters in such a manner so as to optimize meat quality.
• Hogs shall be live and must pass USDA ante mortem inspections and be disease free.
• Producer agrees to comply with packer's minimum meat quality standards as determined by a specified evaluation device reading. Compliance with such standards is currently defined as a minimum specified evaluation device reading of 49.4 or less, or as amended from time to time by packer. Packer will randomly run tests to determine if producer is complying with the performance standards. Notwithstanding the foregoing, packer may use a different method of measuring compliance with such standards without prior notice to producer.
• Producer agrees to supply to packer top quality, healthy and wholesome hogs.
• Producer and packer will work cooperatively to make quality improvements that will yield financially enhancing benefits in a way that both parties benefit from the improvements. If a change is requested by either party that is financially neutral to the other, they will use best efforts to accommodate for the benefit of the other party.
• Producer is responsible for the handling of hogs, including without limitation the handling of hogs by transporters, in such a manner so as to optimize meat quality.
• Producer must follow humane handling procedures at all times during the production, transportation and delivery of the hogs.
• Producer will use its good faith efforts to produce hogs with carcasses that will equal or exceed the average of all carcasses from hogs delivered to packer from other producers with similar operations based on the existing carcass evaluation system at the time of delivery. Producer will use its good faith efforts to employ genetics to produce hogs that on average will have a meat quality (which includes, without limitation, firmness, water holding capacity and marbling as determined by tests such as ph and Minolta readings) that equals or exceeds the average meat quality of all other hogs delivered to packer for slaughter from producers with similar production systems. Producer agrees to use for hog production a nutritional program that under normal operating conditions will produce carcasses with the characteristics described in this section.
• The carcasses from the hogs must pass USDA post-mortem inspection.
• The initial delivery of hogs shall pass a cutting test, as determined by packer. [Buyer acknowledges that producer's hogs have passed the initial cutting test.] Provided that the initial delivery of hogs passes the cutting test, each subsequent delivery of hogs shall meet or exceed the standards established by the initial cutting test.
• The carcasses from the hogs shall not have excessive insect bites (e.g., flies, mosquitoes, etc.), as determined by packer. Insect bites shall be deemed excessive if any of the following conditions are met due to the bites: trim loss is above normal, USDA requires a carcass to be trimmed, the carcass is railed out to perform the trimming, or the belly from the carcass decreases from a grade #1 to a lesser grade.
• The hogs shall not have had any diseases which result in additional handling of the carcasses and/or decreased value or yield of the carcasses, as determined by packer. Diseases shall include, but not be limited to the following: pneumonia, peritonitis, jaundice, pericardia, or arthritis. Additional handling of the carcasses and/or decreased value or yield of the carcasses shall include, but not be limited to, the following: trim loss above normal, down-time on the chain or rail, or damage or loss to portions of the carcass (e.g., ribs, belly, loins, etc.).
• The pH for each load of hogs shall meet or exceed the plant average (with respect to the plant to which the hogs are delivered). In addition, in the event that packer establishes a standard pH (as defined in another paragraph) for hogs, then each load of hogs shall also meet or exceed such standard pH.

Nutrition

• If requested by packer, producer shall modify such nutrition plan and feed the hogs in accordance with the modified plan (e.g., to provide for the use of feed inputs that are non-genetically modified organisms); provided, however, that the modified plan does not adversely affect producer's ability to produce hogs in accordance with the specifications of this agreement.
• In producing hogs, producer's health program will, at all times during the term, be monitored by a licensed veterinarian, properly use any applicable health products, and adhere to the required withdrawal procedures of such health products.
• Producer agrees to use an agreed upon feeding program.
• Producer agrees to use for hog production a nutritional program that will produce carcasses that equal or exceed the average carcass characteristics, as defined by the carcass evaluation program at the time of delivery, of all carcasses delivered to packer.
• Producer agrees to use for hog production a nutritional program that will produce carcasses that equal or exceed the carcass characteristics described in this section.
• Producer must use an approved feeding program and packer may inspect producer's hogs and facilities during reasonable business hours on reasonable notice to producer.
• Producer shall feed the hogs in accordance with the written nutrition plan which has been previously provided to packer, a copy of which is attached hereto as specified exhibit.
• Producer shall use a packer-approved feeding program and shall allow packer a reasonable opportunity upon prior written notice to inspect its hogs and facilities.
• Utilize nutrition programs that optimize the production of quality lean meat.
• Utilize nutrition programs that optimize the production of quality lean meat. Producer shall not, however, feed any items that may be detrimental to meat quality or packer's ability to market the merchandise product, such as Paylean, high oil grains, etc., without packer's prior written approval.

Out Hogs and Off Quality

• A close-out load shall be the last load of hogs from a finishing building, with each finishing building limited to a maximum of 1 close-out load in a 20 week period, and each close-out load shall be identified by producer to packer on the Thursday prior to the week of shipment.
• A market hog for the purpose of this agreement, shall meet the qualifications as described on attached schedule. Packer will purchase hogs, which are designated and delivered to the plants by producer under this agreement. Producer's hogs delivered to one of packer's plants that do not meet the definition of market hog will be offered for sale to packer's subsidiary. Further, packer and producer shall confer on an annual basis with respect to producer's out hogs which may be for sale and which are not committed under a prior contract (or if such prior contract terminated during the term). However, in no event shall producer have an obligation, whether or not delivered to packer's plants, to sell such out hogs to subsidiary.
• Any hogs that do not meet the specifications set forth on specified schedule shall be discounted per packer's then existing carcass merit pricing schedule.
• Any load of hogs or any hog sorted out at the time of delivery for not meeting the qualifications described herein, will be priced according to packer's existing weight and quality discount schedules or priced as otherwise described in this section. Such sorted hog will not be deemed a hog under this agreement.
• Any load of hogs or any hog sorted out at the time of delivery will be priced according to packer's existing premium and discount schedule.
• Currently, some of producer's hogs not meeting the definition of hog (i.e. sows, boars, light hogs, etc., referred to herein as out hogs) are sold by producer to packer's subsidiary and as long as packer's subsidiary bidding remains competitive the parties agree to continue such business in a manner consistent with past practice.
• If packer accepts out hogs or hogs which do not meet the standards (as defined in specified section below), then packer shall pay for such hogs at a price determined by packer.
• If producer producers hogs which do not meet the standards (as defined in specified section below), then packer shall pay for such hogs at the base carcass price subject to any premiums or discounts in accordance with the carcass merit program without regard to the target price, and such hogs shall not be included in the volume requirements set forth in specified section.
• If producer produces hogs which do not meet the standards (as defined in specified section below), then packer will not be required to purchase such hogs.
• In the event that packer elects to accept out hogs, the price to be paid by packer to producer for the out hogs shall be the cash price, as offered by packer at the plant of delivery, for similar hogs, on the day of delivery of such out hogs, subject to any applicable discounts under the then current discount program of packer's plant.
• Inspection, sorting and weighing shall be performed by packer at the delivery location or the plant. Packer reserves the right to reject any hog that is crippled, lame, sick, overfilled, or otherwise unmerchantable, or that is otherwise not in compliance with the specifications and other standards of quality contained in this agreement.
• Out hogs means bred females, sows, partial or non castrates, hogs with ruptures open wounds, externally apparent abscesses, or scrotal hernias; hogs which are excessively thin, sick, injured (including, but not limited to cuts, bruising, broken or injured legs), or are outside the then in effect packer acceptable weight range, or have any broken needles or other foreign objects in them, signs of illness (including, but not limited to erysipelas, pneumonia, etc.), or visible skin blemishes (including, but not limited to insect bites, mange, etc.), or any other condition which, in packer's sole discretion, renders the hog unfit for a high speed kill operation.
• Packer may, at its option, dispose of or sell such hogs according to the then current program, at packer's plant, for disposal of out hogs; provided, however, that producer shall receive all proceeds (after disposal or sale costs) and shall be responsible for all costs, resulting from such disposal or sale.
• Packer reserves the right to reject any hog that is crippled, lame, sick, overfilled, or otherwise unmerchantable, or that is otherwise not in compliance with the specifications and other standards of quality contained in specified section of this agreement and specified schedule hereto.
• Packer shall not be required to accept any hog which meets the definition of either an ambulatory disabled livestock or a non-ambulatory disabled livestock, as such terms are defined under Directives issued by USDA's Food Safety and Inspection Service (FSIS).
• Producer agrees to deliver hogs for slaughter as follows: sort off any out hogs.
• Producer agrees to sort off any out hogs and do not deliver such out hogs to the specified location.
• Producer agrees to sort off any out hogs. If producer delivers out hogs to the location or any other packer location, it acknowledges that out hogs will be sold subject to the prevailing prices of the day for out hogs.
• The parties agree all hogs that are delivered as hogs but are sorted prior to slaughter for not meeting the definition of a hog will be sold to and bought by packer in accordance with packer affiliate's prevailing market rates for hogs sorted at a plant. For hogs that producer owns, but which are nor marketed as hog (i.e. sows, boars, light hogs, etc., referred to herein as out hogs, such hogs will be offered for sale to packer affiliate; and if packer affiliate offers a program to purchase such out hogs that is competitive with the programs being offered by third parties for such out hogs, producer will sell the out hogs as under packer affiliate program.
• No hogs shall be accepted to fulfill the terms of this agreement if they do not meet the qualifications of a hog.
• Out hogs means (i) bred females or sows, partial or non castrates; or (ii) hogs with ruptures, open wounds, externally apparent abscesses, fever or any other condition rendering the hog unfit for a high speed kill operation.

Quality Improvements or Pork Quality Assurance

• Producer agrees to maintain certification at Level III of the Pork Quality Assurance Program, a Hazard Analysis and Critical Control Points program of America's Pork producers, or the highest level of such PQA program established in the future within six months of the program change establishing such level.
• Producer must also comply with any HACCP program established by packer, and any change in such a program, within six months of the establishment of the program or the change.
• All producer's of hogs supplied under this agreement will participate in packer's HACCP program.
• Commitment of producer to be certified at pork quality assurance (PQA) level 3 or will be certified at level 3 within 6 months of beginning date of this agreement.
• Each party shall agree to comply with packer's H.A.C.C.P. procedure as well as the National Pork Producers P.Q.A Level III Program.
• Hogs for delivery by producer under this agreement will, at all times during the term be on the Pork Quality Assurance Program and must be at Level III of the Pork Quality Assurance Program. If the National Pork Board, or its successors; creates a level higher than Level III, producer production facilities will attain such higher level within a reasonable period of time.
• Hogs must be within USDA limits on all residues (e.g., sulfa, tetracycline, penicillin, etc.) and be certified Level III of the NPPC Pork Quality Assurance Program.
• Hogs will be NPPC Level 3 or higher.
• In addition to producer's obligation to meet the foregoing specifications, producer shall, if requested by packer, implement programs to improve the quality of the hogs and/or packer's ability to sell pork products produced from the hogs (e.g., a farm hazard analytical control point program, an ISO 9000 program, etc.); provided, however, that any such program does not adversely affect producer's ability to produce hogs in accordance with the specifications of this agreement.
• In producing hogs, producer's health program will, at all times during the term, (i) be monitored by a licensed veterinarian, (ii) properly use any applicable health products, and (iii) adhere to the required withdrawal procedures of such health products. All production decisions including but not limited to genetics, feed rations, health practices, contract producer selection and management, and production processes will be made solely by producer. Hogs raised for delivery by producer under this agreement will, at all times during the term be on the Pork Quality Assurance Program and must be at Level III of the Pork Quality Assurance Program. If the National Pork Board, or its successors, creates a level higher than Level III, the producer's production facilities will attain such higher level within a reasonable period of time. In addition, all hogs delivered by producer under this agreement will be handled and delivered pursuant to the National Pork Board's Trucker Quality Assurance program.
• Producer agrees that upon execution hereof, it will use its best efforts to obtain certification pursuant to the Food Safety and Inspection Service Guideline Program for certifying pork intended for export to the European Union; which certification is for purposes of exporting pork products free of Beta Agonist, PST, Ractopamin or similar substances commonly known or referred to in the industry as Paylean (certified hogs).
• Producer agrees to comply with any HACCP or quality program established by packer or any governmental agency, and any change in such a program, within specified months of establishment of the program or the change.
• Producer agrees to comply with packer's animal handling guidelines and polities in effect at time of delivery and utilize only haulers that are Trucker Quality Assurance certified by the National Pork Board.
• Producer agrees to deliver hogs by arranging transportation with transporters certified under the Truckers Quality Assurance Program of America's Pork producers, and incurring freight costs to deliver the hogs to the slaughter plants designated on the cover sheet of this agreement.
• Producer agrees to maintain at least the highest quality assurance level at any given time as set by the National Pork Producers Council (currently Level III).
• Producer must be on the Pork Quality Assurance Program and must be at Level III of the Pork Quality Assurance Program.
• Producer must be on the Pork Quality Assurance Program and must be at Level III of the Pork Quality Assurance Program. If the National Pork Producers Council, or its predecessors, creates a level higher than Level III, producer will attain such higher level within a reasonable period of time.
• Producer must be on the Pork Quality Assurance Program, a HACCP program of America's Pork producers. Producer must be at Level III of such PQA Program and must obtain the highest level of such PQA Program established in the future within six months of the program change establishing such level.
• Producer shall be on the Pork Quality Assurance Program of specified pork producers, and shall be at Level III or working diligently to obtain Level III and shall be on packer's HACCP Program.
• Producer shall participate in packer's HACCP program or an equivalent acceptable to packer.
• Producer shall produce hogs in facilities owned and managed by producer in accordance with packer’s process verification standards. These standards specify genetic, feed, production management, environmental and animal welfare standard practices. Packer reserves the right to revise and modify these standards at any time and from time to time and shall give producer 90 days to comply with any revised or new standards. Producer shall notify packer of any problems or conditions that may affect producer’s ability to continue to comply with the process verification standards.
• Producer shall produce hogs in facilities owned and managed by producer in accordance with the USDA’s Food Safety and Inspection Service Guideline Program for Certifying Pork Intended for Export to the European Union. These standards specify various production and feed standard practices. Packer reserves the right to revise and modify these standards at any time and shall give producer specified period days to comply with any revised or new standards. Producer shall notify packer of any problems or conditions that may affect producer’s ability to continue to comply with these Standards.
• Producer will comply with packer's HACCP program. Packer encourages enrollment and successful completion of NPPC current PQA program.
• Producer will participate in packer's HACCP program.

Target Weights

• All hogs delivered under this agreement shall be top quality, healthy and wholesome, free of foreign objects (e.g. needles) and must weigh at least two hundred twenty-five (225) pounds.
• All hogs, to be considered deliverable pursuant to this agreement, must be between approximately 205 pounds and 350 pounds on a live weight basis at the time of delivery. Any load of hogs or any hog sorted out at the time of delivery for not meeting such weight specifications or other specifications described herein, will be priced according to packer's existing weight and quality discount schedules, or priced pursuant to specified section. Such sorted hog will not be deemed a market hog under this agreement.
• All hogs, to be considered deliverable pursuant to this agreement, must meet packer's existing weight specifications for all hogs purchased by packer's plants at lime of delivery.
• All loads must have an average live weight of no more than 310 pounds per hog.
• Each hog shall not have a live weight of less than 220 pounds or more than 290 pounds.
• Have a carcass weight of at least one hundred sixty pounds (160 lbs.) and not more than two hundred forty-nine (249) pounds;
• Hogs means finished hogs within packer's acceptable weight range at the time of delivery
• Hogs means hogs at a market weight that meets packer's then in effect minimum and maximum slaughter weights.
• Hogs means hogs at a market weight within the range of 170 to 221 pounds hot carcass weight.
• Hogs means hogs at market weight within the 210 to 320 pounds live weight range.
• Hogs means hogs at market weight within the range of 230 to 300.
• Hogs will meet a load live weight range of 221 to 290 pounds, with a 75% average carcass yield.
• Hogs will meet a weekly average/load live weight range of 230 to 260 pounds, with a 74% average carcass yield over a ten-week period.
• No hogs shall be accepted for delivery pursuant to this agreement that weigh less than two hundred ten (210) pounds or that are crippled, lame, sick, overfilled, or otherwise unmerchantable.
• Packer shall not be required to accept any hog which has a live weight of less than 220 pounds or more than 290 pounds.
• Producer shall use its best effort to achieve live weight of 255 pounds per hog. Each load shall average 240 to 270 pounds live weight per hog, except for close-out loads on finishing buildings (which shall average 230 to 270 pounds live weight per hog).
• Sell hogs within the hot carcass weight range of the then-in-effect carcass merit program.

Alternate Pricing

• Any producer value added product segregated and retained by producer will be priced pursuant to packer's weekly average price for product with like specifications, packer will invoice producer for producer's value added product plus the additional costs incurred by packer's plants to produce producer's value added products, and producer will pay the invoice pursuant to packer's standard payment terms.
• During the one year extension the price quote will be defined as a carcass merit base equal to the specified report multiplied times 0.73 plus $1.00 per live hundred weight on the day of delivery. An extra $0.50 cwt will be paid for hogs delivered FOB applicable plant. Sunday evening and delivery prior to 8:00 am.
• If the volume of hogs used in reporting the price in the specified reported price drops below a daily average of 10,000 for any week, then either producer or packer may require that the specified reported price be redefined to be equal to an average of hog prices reported by a third party industry sources agreed to in writing by producer and packer.
• If the volume of hogs used in the specified report drops below a specified volume for any week, then packer may select a substitute Report of from a third party industry sources.
• If there are material changes in the definition of the specified report and/or the price reporting practices of any competitor whose data is currently used in determining the specified report, and if either packer or producer believes such change will have a significant adverse economic effect on them under this agreement, packer and producer agree to work together in good faith to adopt an acceptable method of reducing the impact of such change. If after ninety (90) days, packer and producer fail to agree in good faith on an acceptable method, either packer or producer may give the other written notice of termination, and this contract shall terminate one hundred forty (140) days from the date of such notice.
• Non-qualifying hogs shall be priced off of the daily market at the delivery plant for each class of non-qualifying hog.

Changes in Payment Calculation

• If a party requests a review after an announced change by the USDA in its process to calculate the specified value, the parties would continue to use the 50/50 blend pricing mechanism (unless the parties mutually agree to another method, such as solely on specified program price) and at the end of the review one of the following would occur: (i) If the parties determine the change did not necessitate a change in the pricing mechanism used to calculate the base price, no adjustments would be necessary. (ii) If the parties mutually, agree on a new pricing mechanism, the price paid during the review period would be recalculated based on the new mechanism, and any difference would be paid by the appropriate party. (iii) If the parties cannot mutually agree upon a new pricing mechanism, and a party elects to terminate this agreement as provided in the paragraph immediately below, then the price paid during the review period would be recalculated based 100% on packer's specified program price, and any difference would be paid by the appropriate party.
• If less than 50% of a lot of hogs has carcass weights between 208 and 222 pounds (or between 281 and 300 pounds live weight, when the carcass weight is divided by .74), and the lean premium in packer’s then current carcass merit program is reduced for the same weight by 50%, then the reduced dollar amount set forth in specified paragraph will be returned to producer.
• If packer discontinues spot purchases of hogs and no longer establish such a plant delivered hog price, then the base price shall be equal to a rolling average of hog prices reported by an industry source as determined by packer and uniformly used in packer's hog procurement program.
• If the method of calculating the price reported in the specified price report is changed by the reporting source, then either producer or packer may require that the specified price be redefined to be equal to an average of hog prices reported by a third party industry sources agreed to in writing by producer and packer.
• If the reporting source changes the method of calculating the specified value or if a substitute specified value uses a different method of calculating the specified value, then the parties shall agree upon a revised percentage to be used in the calculation of the base price. The revised percentage shall provide a base price that is equivalent to the base price using the prior method of calculating the specified value. Packer will provide producer written notice identifying any substitute specified value and any adjusted percentage.
• If the specified reported price is discontinued by the reporting source, then the specified price shall be equal to an average of hog prices reported by a third party industry sources agreed to in writing by producer and packer.
• If the USDA announces a change in the methodology used to calculate the specified value, and a party believes such change will cause a material financial impact on the base price, within three (3) months of the change either party may notify the other party in writing that the notifying party believes the methodology for calculating the base price must be reviewed due to the change made by the USDA. After a notice of a review is initiated, the parties will gather data on the change and negotiate with respect to a new methodology for calculating that portion of the base price that is based on the specified value under the new reporting system implemented by the USDA, or to adopt an appropriate substitute for the specified value. The gathering of data and negotiation of a new pricing methodology will be completed within six (6) months of the announced change being implemented by the USDA.
• If the USDA discontinues the specified report, or makes a change in the method of calculating or collecting the price data used to calculate the base price, and in the event that the parties disagree as to a substitute method of calculation, the disputed matter will be subject to the provisions of specified section hereof (after the parties have undertaken dispute resolution pursuant to specified section). In such case, and pending completion of dispute resolution and/or termination pursuant to specified section, the base price shall be an amount equal to the sum of the base market weighted average carcass basis plant delivered price of the close of the market for specified market for negotiated sales as reported by the USDA Market News Service (copy attached as specified exhibit or the trading day prior to the day of delivery, plus specified dollar amount per carcass cwt. If the USDA Market News Service discontinues or replaces the specified carcass price report, then packer shall select a substitute report and/or methodology, which shall be used for determining the base price. Packer shall select a substitute report and/or methodology in a manner such that the base price, as determined by use of such substitute, is economically equivalent to the base price, as determined by use of the specified report.
• In the event the specified market is no longer a representative market as agreed on by both parties, packer will select a market that most closely represents the current market.
• In the event the specified reported price is no longer a representative market as agreed on by both parties, producer and packer agree to arbitrate the change.
• If there are changes in the definition of the specified price report, Process Verification Program or the Carcass Merit Program and either packer or producer believes such change will cause significant adverse economic change, producer and packer agree to work together in good faith to adopt an acceptable method of reducing the impact of such change; if after ninety (90) days, producer and packer fail to agree on an acceptable method, either packer or producer may: (a) terminate the agreement upon thirty (30) days prior written notice to producer, or (b) accept performance hereunder in accordance with the original terms of the agreement.
• The parties agree that in the event the USDA cutout which packer is currently using to establish the base carcass price changes materially, the parties will meet to discuss a change to the agreement, and in the event necessary, will renegotiate the agreement, so that both parties return to the same economic status enjoyed before such change. If the parties cannot agree regarding the changes to be made, if any, such dispute shall be resolved in accordance with specified section.
• The parties agree that in the event the USDA reported price which packer is currently using to establish the base carcass price changes materially, the parties will meet to discuss a change to the agreement, and in the event necessary, will renegotiate the agreement, so that both parties return to the same economic status enjoyed before such change. If the parties cannot agree regarding the changes to be made, if any, such dispute shall be resolved in accordance with specified section below.
• Upon certification and commencement of delivery, and continuing for a period of one (1) year or until such time that packer exercises its option under specified section, whichever is earlier, then producer shall use its best efforts to remain certified pursuant to the above-referenced program, and in consideration therefore, packer agrees to increase the base payment percentage to producer by .75% for certified hogs delivered to the specified location. For example, if the base payment percentage is 94.50 prior to certification, then upon certification it shall be 95.25. Following the date of certification, the parties shall cooperate to investigate the benefits of continuing the certification program beyond the one-year period, and shall negotiate in good faith with respect to continuing or terminating participation in the certification program and the terms and conditions thereof.
• Packer will provide producer written notice identifying any new source for the specified price and any change in definition.
• Producer agrees to deliver the hogs to any other slaughter plant designated by packer provided that packer shall pay producer the additional freight costs incurred by such delivery as determined by packer pursuant to its then current standard livestock freight schedule.
• Should the USDA no longer publish a specified price report, then packer shall select the market reported price that best approximates the specified price and that market reported price shall be the price used to determine the base price for all such deliveries thereafter.

Forward Contracts

• Producer will have the ability during the contract to utilize packer's forward contracting program. [During the initial two year contract and the one year extension the maximum basis level will be $3.00 per hundredwetght live]. [The established Chicago Mercantile Exchange price multiplied time 0.74 minus packer normal basis or The established Chicago Mercantile Exchange price multiplied time 0.74 plus or minus basis risk on the day of slaughter].
• Producer shall sell hogs to packer on a day-to-day basis at the base carcass price or pursuant to the terms of a forward contract.

Freight

• Actual freight charge differentials resulting from delivery to other sites shall be paid by packer within ten (10) days of written notification by producer. The parties shall mutually agree upon the freight charge differential in advance of any alternate site delivery.
• For hogs delivered to buying stations, the contract price shall be adjusted by packer's station delivered freight discount in effect at the time of delivery.
• If packer cannot schedule hogs for delivery to a facility based on the schedule described above, and requests producer to deliver hogs to a different packer facility, packer will reimburse producer for incremental transportation costs.
• In such event packer shall reimburse producer for any additional transportation costs between the original location or hog buying station and the new location or hog buying station.
• No freight cost adjustment shall be made on hogs delivered to the specified location.
• Packer may request that one or more lots of hogs be delivered to a slaughter facility other than one designated in this section. In the event this occurs, packer will pay the incremental freight to the alternative slaughter facility.
• Packer shall provide transportation on mutually agreeable carriers at packer's expense not to exceed specified amount per semi-trailer load to the slaughter facility of packer located at specified location. Any freight expense in excess of specified amount per semi-trailer load shall be an expense to be paid by producer. If the average load weight of total thirteen (13) week semi-trailers shipped by producer is lighter than 47,000 pounds, packer is entitled to make a payment adjustment prorated to the actual volume shipped.
• Packer will pay producer for additional freight costs incurred by such delivery pursuant to packer's then current standard livestock freight schedule.

Offsets/Overpayments

• If packer overpays producer for such hogs, producer agrees to promptly repay any overpayment upon receipt of notice of the overpayment. If producer fails to do so, packer may deduct the overpayment from the contract price for producer's next deliveries of hogs.
• In the event that packer pays the contract price for any non-conforming hogs, packer, at its option, may deduct any overpayment against current and future amounts owed by packer to producer under this agreement.
• Packer shall also have the right to offset against current and future amounts owed to producer under this agreement any and all damages sustained by packer as a result of producer's breach of this agreement, including without limitation producer's failure to deliver the quantity of hogs required under this agreement.
• Producer agrees packer will be entitled to retain proceeds from market hog deliveries until such time that sufficient proceeds have been retained by packer to pay all amounts due from producer pursuant to this section.
• The contract price, as adjusted by carcass merit program premiums and discounts, to be paid to producer for hogs may be reduced by an offset as provided in specified paragraphs.

Other Payment Provisions or Conditions

• All hogs delivered under this agreement are purchased subject to passing inspection by the USDA with deductions to the purchase price for all carcasses or carcass parts that are condemned or not unconditionally approved by the USDA inspectors. Nonqualifying hogs and lots delivered under this agreement without an accurate and fully completed specified certificate will be purchased at the base price less $1.50 per carcass cwt.
• Any compensation due producer under specified paragraph shall constitute the sole and entire payment due producer for his deliveries hereunder.
• Notwithstanding anything to the contrary herein, the parties agree and intend that the sale and purchase date for the Hogs is the date that the Hogs are physically delivered to packer at the location or the hog buying station,

Payment Calculation

• The parties understand that packer calculates a market price (referred to as the calculated market cost, typically based on packer specified pricing program) at the time market hogs are processed under specified agreements not directly tied to a cash market price.
• The term multiple index shall mean the multiple index set by packer and agreed to by producer as set forth on the attached variable index worksheet.
• The term price adjustment shall mean the price adjustment for each hog agreed to by packer and producer as set forth on the attached variable index worksheet.

Payments with Leins

• If hogs delivered under this agreement are subject to any security interest or lien, packer may make payments jointly to producer and the secured party or lien holder.

Penalties for Failure to Meet Standards

• Any lot of hogs with an average lean percentage lower than 50% shall not count toward the minimum quantity of hogs required to be delivered by producer under this agreement. Any such lot of hogs shall be priced at $1.00 under the base price established under specified section of this agreement.
• Any such lot of hogs shall be priced at $1.00 under the weighted average price for the day such hogs were slaughtered, as reported by the USDA for the specified report, rather than under specified schedule of this agreement.
• At any time producer is in default (defined in specified paragraph), packer may adjust the contract price to be equal to the lower of the specified reported prices. Carcass merit program premiums and discounts will be determined on the basis of the specified price whenever such price is used in determining the contract price. The specified price shall be determined as follows.
• If both parties agree (or it is otherwise determined) that none of the deficiencies described in the substandard report were in existence at the time the substandard report was issued, then the carcass merit program premiums will be immediately payable with respect to all hogs delivered since the date of the substandard report as if such substandard report had never been issued.
• If more than 50% of a lot of hogs has carcass weights between 308 and 233, pounds (or between 281 and 300 pounds live weight when the carcass weight is divided by 74), and the lean premium in packer’s then current carcass merit matrix is reduced for the same weights, then the reduced dollar amount set forth in spceified paragraph will not be returned to producer. If less than 50% of a lot of hogs has carcass weights between 308 and 222 pounds (or between 281 and 300 pounds live weight. when the carcass weight is divided by 74) and the lean premium in packer's then current carcass merit matrix is reduced for the same weight by 50%, then the reduced dollar amount set forth in specified paragraph will be returned to producer.
• If packer fails to make such payment, producer may suspend deliveries of hogs hereunder and sell the hogs on the open market to a third party. The exercise of such right shall be in addition and all other remedies to producer under this agreement.
• If producer delivers to packer under this agreement less than the monthly quantity of hogs specified in the delivery schedule in any month, then producer must pay packer a delivery shortage assessment.
• If producer fails to make any payment obligation required under this section or under specified sections, producer agrees packer will be entitled to retain proceeds from market hog deliveries until such time that sufficient proceeds have been retained by packer to pay all amounts due from producer pursuant to such sections.
• If producer fails to ship and deliver the hogs (including excess hogs) to packer in accordance with the schedule attached as specified exhibit, for a period of 13 consecutive weeks, then packer may, in addition to all other right and remedies that packer may have, price the hogs (including excess hogs) at the lower of (i) the agreement price, as determined under the first paragraph of specified section (by way of clarification, this provision shall specifically apply to the excess hogs, notwithstanding that the contract price of excess hogs would otherwise be determined by the second paragraph of specified Section), or (ii) the base cash price, per carcass cwt., as offered by packer at its plant on the day of delivery of the hogs (and/or the excess hogs), plus or minus (as the case may be), the carcass merit adjustment.
• In addition, no carcass merit program premiums will be paid for hogs delivered after the date of the substandard report until such time as such deficiencies have been fully corrected.
• Notwithstanding any other provisions of this agreement, should packer fail to make the payments to producer required by specified section of this agreement, and should packer fail to make such payments for a period of 5 days after notice of such failure provided by producer, producer may, in addition to the remedies set forth is this section, and in its sole discretion (i) withhold future delivery of hogs to packer; (ii) stop delivery of hogs by any affiliated producer; (iii) resell hogs to another packer or (iv) exercise any remedies available to producer under the Packers & Stockyards Act, 7 U.S.C. 181 et seq.
• Packer losses means the number of hogs producer failed to deliver as required by this agreement multiplied by the positive difference, if any, between the price packer had to pay to purchase the hogs elsewhere and the price at which packer could have purchased the hogs pursuant to this agreement.
• Producer agrees to pay packer the packer losses if producer fails to deliver hogs to the specified location.
• Producer must pay packer a delivery shortage assessment for under delivery of hogs as follows.
• Producer must pay packer the delivery shortage assessment within ten business days from the date of the statement. If packer does not receive producer's payment by the due date, packer may deduct the delivery shortage assessment from the contract price for producer's next deliveries of hogs.
• Should packer fail to make payments for a period of a specified number of days, producer may suspend deliveries of hogs hereunder, but the exercise of such right shall be in addition to any and all other remedies to producer.
• The expenses of retaking, holding, maintaining, preparing for sale, selling, or the like incurred by packer shall be for producer's account, and such expenses shall include packer's attorney fees and legal expenses.
• Packer losses means the number of hogs that producer failed to deliver as required by this agreement multiplied by the positive difference, if any between the price packer had to pay to purchase the hogs elsewhere and the price at which packer could have purchased the hogs pursuant to this agreement; plus any incidental or consequential damages that packer may incur as a result of producer's failure to deliver the hogs.
• Packer losses means the number of hogs that producer failed to deliver as required by this agreement multiplied by the positive difference, if any, between the highest base price used by pacer to procure open market hogs during the delivery periods in which producer is in default and the price at which packer could have purchased hogs pursuant to this agreement, plus any incidental or consequential damages that packer may incur as a result of producer's failure to deliver the hogs.
• Packer's direct damages shall be an amount equal to the total number of hogs to be delivered for the remaining term of this agreement multiplied by five dollars ($5.00) per hog plus any excess of the monthly/quarterly specified reported price over the monthly/quarterly specified reported price for each period up to the date of packer's demand multiplied by the number of hogs to be delivered for such period.
• Producer agrees to pay packer the packer losses if producer fails to deliver hogs to the specified location and pay off the net balance of the ledger account plus interest as required by specified section above. Payment of the net balance of the ledger account balance shall be in addition to any payment required hereunder, including but not limited to any payment required under specified section of this agreement.
• Producer loss means an amount equal to the number of hogs packer failed to purchase as required by this agreement multiplied by the positive difference, if any, between the price at which producer could have sold the hogs to packer pursuant to specified sections and the price at which producer sold the hogs after packer refused to accept delivery plus the transportation costs incurred by producer to deliver such hogs to other buyers in excess of what producer would have paid to deliver such hogs to producer.
• Should any load of hogs not average 50% lean, then all hogs in such load shall be priced as follows: the base price shall be $1.00 under the specified reported price for carcass weights on the day of delivery of such hogs to packer, plus carcass merit premiums, if any, as reflected in packer's existing premium and discount schedule in effect on the date of the delivery of such hogs.
• Should producer fail to deliver to packer the quantity of hogs required to be delivered under specified section of this agreement in any year of this agreement, then in addition to all other remedies available to packer under this agreement and under law, producer shall pay to packer as a penalty for such non-delivery the total difference as shown in the pricing data between the amounts paid to producer under this agreement and the specified reported price as published by the USDA or $5.00 per head for each hog not delivered, whichever is greater.
• Should the average lean or yield percentages of any load of hogs delivered by producer hereunder fail to meet the criteria set forth on specified schedule hereto, then each such load of hogs shall be priced as follows: (i) For all loads of hogs delivered under forward hog contracts referred to in specified paragraph above, the price will be adjusted downward from the base price established in specified paragraph, using packer's existing premium and discount schedule in effect on the date of the delivery of such load of hogs. (ii) For all loads of hogs delivered other than under forward hog contracts referred, as set forth in specified paragraph above, the price will be adjusted downward from the base price established in specified paragraph, using packer's existing premium and discount schedule in effect on the date of the delivery of such load of hogs.
• The delivery shortage assessment shall be the number of hogs not delivered in the quarter multiplied by a per hog assessment equal to five dollars ($5.00) plus the excess, if any, of the quarterly specified price over the quarterly specified price assuming a 200 lb. carcass. The quarterly specified prices shall be the specified prices calculated as the average of the daily prices for the quarter.
• Upon packer's demand, producer shall pay packer cash in the amount of such direct damages within thirty (30) days of the date of packer's demand or as otherwise agreed to by packer in its discretion. Packer's demand may be made at any time of packer's choosing within four years of the date of producer's default. Upon payment of such direct damages, producer shall no longer have any obligation to deliver hogs that are included in the calculation of such direct damages. Producer and packer agree that the above measure of packer's direct damages is a reasonable estimation of packer's direct damages. Such direct damages shall not preclude packer's recovery of other damages and shall be in addition to all other remedies packer may have. Examples of such other damages are indirect, incidental and consequential damages.

Pricing Disputes

• If the parties cannot agree if an adjustment needs to be made, or cannot agree to the terms of the adjustment, the matter will be submitted to arbitration under the terms of the agreement.
• If the parties cannot mutually agree to the adoption of a new methodology for either using the new USDA report or to a substitute report within specified period, then either party may give the other party written notice of termination even if the minimum period of the term describe in specified section has not expired. Upon receipt of the termination notice by the other party; this agreement shall terminate and be of no further force and effect except that producer will deliver, and packer will accept, hogs for an additional specified period, in accordance with the terms and condition hereof (and with base price calculated pursuant to the specified program), with deliveries being ratably reduced each month specified period, pursuant to the prorate reductions as described in specified section. At the conclusion of the specified delivery period, neither party shall have any further obligation to the other party under this agreement.

Producer or Packer Damages

• Producer’s delivery of the required quantities of hogs to packer set forth in specified paragraph above is an essential part of this agreement, and producer’s failure to supply at least 95% of the required quantities of hogs in any quarter may constitute a default hereunder. Packer may in its sole and absolute discretion assess a specified per head deficiency fee for the number of hogs falling below 95% of the required quantities.

Revenue/Cost Calculation

• During the first five (5) years of the term of the agreement the processing fee will be $6.75 per head. After the fifth year of the term, the processing fee will be calculated by packer on an annual basis and will be based on the pork packing plant average packer margin, on an EBIT basis, for processing market hogs at the plants for the prior four years. The calculation will exclude extraordinary items as reasonably determined by packer (for example, the costs of a new plant start-up).
• During the term, the processing fee will be calculated by packer on a monthly basis will be based on the pork packing plant average packer margin, on an EBIT basis, for processing market hogs at the plants for the prior thirty-six (36) months (defined in specified schedule).
• Each fiscal month of the term, packer will compare the specified price to packer sales revenue per hundredweight, and will notify producer of the results. To make this comparison, the simple average of the specified value for the month will be multiplied by 83.5%, and in no event should the result of this calculation be lower than the per hundred weight price calculated by taking 65.75% times packer sales revenue per hundredweight during such fiscal month; or higher than the per hundred weight price calculated by taking 72.15% times packer sales revenue per hundredweight for such fiscal month. The calculation will be performed by the 15th working day following each fiscal month. If the specified value falls outside the calculation for three consecutive months, during the following three months the parties will gather data to determine why the specified value fell outside the calculation, and based on such information will negotiate either a new percentage to use for the specified value or new percentages to use for the calculation.
• Excluded from net profits will be profit/loss derived by packer from cooking, pumping, marinating and case ready processes, and any profit/loss from products that are manufactured from new value added processes developed after the date of this agreement (i.e., new cooked products, pumped products, marinated products, case-ready products, etc.; however, new processes that automate current processes included in net profit/loss calculations will continue to be included in net profits) with the exception on any new revenues generated as defined in specified section of this agreement.
• Excluded from net profits will be profit/loss derived by packer from cooking, pumping, marinating and case ready processes, and any profit/loss from products that are manufactured from new value added processes developed after the date of this agreement (i.e., new cooked products, pumped products, marinated products, case-ready products, etc.; however, new processes that automate current processes included in net profit/loss calculations will continue to be included in net profits). Profits or losses occurring as a result of final payment calculations for this agreement and any similar type producer arrangements will be excluded from packer's net profits; and also excludes: (i) any allowance/recovery of bad debt expense relating to packer's specified program; and (ii) out hog business.
• Excluded from total revenues will be revenues derived by packer from skinning, cooking, marinating and case ready processes, and any revenues from products that are manufactured from new value added processes developed after the date of this agreement (i.e., new cooked products, pumped products, marinated products, case-ready products, etc., however, new processes that automate current processes included in total revenue will continue to be included in total revenue).
• For each packer fiscal month of the term of this agreement, packer will calculate a processing fee based on the prior thirty-six (36) months weighted average of packer's profit/loss on a per head basis, before interest and tax calculations. The processing fee or the current month will be included in the final payment calculations made in specified schedule.
• For each packer fiscal month of the term of this agreement, producer revenue will be calculated by determining, on a per hundred weight basis, the sales revenue (defined in specified schedule) which is based on packer's average per head pork packing plants revenue during the fiscal month, and from the sales revenue packer will subtract (i) packer's production cost (defined in specified schedule) which is based on packer's average cost for the pork packing plants to process hogs during the fiscal month, and (ii) a processing fee per market hog processed during such fiscal month.
• For each packer fiscal month of the term of this agreement, producer revenue will be calculated by determining, on a per hundred weight basis, the sales revenue (defined in specified schedule) which is based on packer's average per head pork packing plants revenue during the fiscal month.
• If packer develops a value added product that exclusively uses producer product, and to the extent revenues from such value added product would not be included in producer revenue calculation, then any incremental revenue from that program will be excluded from the calculation of packer sales revenue in specified schedule, and will be shared 50/50 between producer and packer.
• If packer's index is equal to or lower than the industry index, packer's cost of processing will be equal to or better than the average cost of processing.
• If producer revenue exceeds the estimated payment, packer will also forward to producer a check for the difference, subject to adjustments made pursuant to specified section.
• If producer revenue exceeds the estimated payment, packer will also forward to producer a check for the difference.
• Legal fees for counsel and settlements of contract disputes will be limited to on an annual basis of $17 market hog processed during such year by packer.
• Net profits shall include sales of products to outside customers, inter-company sales.
• Net profits will exclude extraordinary items as reasonably determined by packer.
• Net revenue will be based on packer's monthly financial statements.
• On the fifteenth (15th) day after the end of each fiscal month, packer shall perform the calculation, as described in specified section of specified schedule. If packer notifies producer that the calculations using the specified value are outside the range of the calculation for three consecutive months, the producer may notify packer that the producer wishes to review the underlying business records used to perform the calculation, including the underlying sales revenue. Packer will produce such information subject to the confidentiality provisions set forth in specified section and such information will not be disclosed to packer's competitors and third parties who have no reasonable need to know such information.
• Packer production costs will not include costs directly attributable to packer's misconduct or costs directly attributable to the breach of applicable governmental rules and/or regulations.
• Packer sales revenue will be adjusted to producer revenue by subtracting packer average premium and discounts and adding producer's average premium and discounts. From producer revenue, packer will subtract (i) packer's production cost (defined in specified schedule) which is based on packer's average cost for the pork packing plants to process hogs during the fiscal month, and (ii) a processing fee per hog processed during such fiscal month.
• Packer will include the profit and loss for certain stations buying hogs, and this will be referred to as the hog markets profit and loss.
• Packer's actual production cost shall be calculated each packer fiscal month as the average cost of processing per head from all plants during packer fiscal month times the number of producer's hogs sold under this agreement during that fiscal month.
• Packer's actual production cost will not include costs directly attributable to packer's misconduct or costs directly attributable to the breach of applicable governmental rules and/or regulations. Legal fees for counsel and settlements of contract disputes will be limited to on an annual basis of specified dollar amount market hog processed during such year by packer. Packer's actual production costs will exclude the costs for packer operations that are not included in sales revenue (skinning, cooking, pumping, marinating and case ready processes, and revenues from certain products that are manufactured from new value added processes developed through capital improvements after the date of this agreement). All actual depreciation included in packer actual production costs as defined above, will be excluded as shown on specified schedule.
• Producer will be responsible for any additional costs (including, without limitation, incremental production or administrative costs, or costs due to decreases in efficiency or decreases in volume) incurred by packer plants to segregate, handle or process producer value added product in any manner different than packer's normal plant operations.
• Production Cost (packer's net cost) shall include the following: All plant labor expenses including hourly pay, plant management and supervision, plant management support, payroll taxes, workers compensation, and fringe benefits; packaging; utilities; maintenance and repairs; operating supplies; insurance and taxes; depreciation ; contract services; meat inspections; incidentals (administrative services; administrative services expenses directly related to plant operations will be included in production cost at cost to packer); corporate overhead (excluding cost centers listed on specified exhibit); procurement costs; selling costs; operations costs; bonuses.
• Production cost shall be calculated each packer fiscal month as the average cost of processing per head from all plants during packer fiscal month.
• Production costs will exclude extraordinary items as reasonably determined by packer (for example, the costs of a plant closing) and the costs for packer operations that are not included in sales revenue (skinning, cooking, pumping, marinating and case ready processes, and revenues from certain products that are manufactured from new value added processes developed after the date of this agreement).
• Products sold to entities affiliated with packer are based at fair market value, as reasonably determined by packer (prices for products sold to affiliates are competitive to prices charged to third parties for similar product).
• Products sold to other entities owned or controlled by packer will be calculated at fair market value, as reasonably determined by packer. Producer may request at anytime a confirmation from packer that packer's philosophy of transfer pricing continues to be based on a fair market value. Packer will advise producer of any significant change in the transfer philosophy regarding fair market value.
• Profit/loss shall be calculated each packer fiscal month as the net profit received by packer during packer's fiscal month divided by the total head processed by the packer during packer's fiscal month.
• Sales revenue shall be calculated each fiscal month as the net revenue received by packer during packer's fiscal month divided by the total head processed by the packer during packer's fiscal month then divided by average carcass weight for that month, multiplied by 100, to determine a per hundredweight carcass value.
• Total revenue will be derived from packer's monthly pork division financial statements which shall be prepared in accordance with GAAP and which shall be consistently maintained by packer in accordance therewith throughout the term hereof.
• When packer determines the margins for market hogs processed under such agreements, which margins are then included in the calculation of the pork packing plant average packer margin, the parties agree packer will use the calculated market cost in the margin calculations.
• The gathering of data and negotiation will be completed within three (3) months of the determination that the specified value falls outside the calculation for three consecutive months. During the review the parties would continue to use the specified value as agreed upon herein, and at the end of the review one of the following would occur: (i) If the parties determine the change did not necessitate a change in the pricing mechanism used to calculate the base price, no adjustments would be necessary. (ii) If the parties mutually agree on a new percentage for the specified value, the price paid during the three months when the specified value fell outside the calculation and during the review period would be recalculated based on the new percentage, and any difference would be paid by the appropriate party. (iii) If the parties cannot mutually agree upon a new percentage or a change to the percentages used for the calculation, and a party elects to terminate this agreement as provided in the provision of specified section of this schedule, then the price paid during the review period would be recalculated based 100% on packer's program price, and any difference would be paid by the appropriate party.
• Total revenue shall include sales of products to outside customers, net inter-company sales (sales less purchases) to other packer plants or divisions, rendered product sales, offal product sales, finished product inventory variation and revenue received from all other products that typically fall into the fresh or frozen boxed pork category. Total revenue will include adjustment deductions for freight, discounts, rebates, claims, cost of outside raw material purchased and sales taxes associated with the sales of product. Packer routinely hedges long-term sales contracts of products, the paper gain or loss associated with long-term sales of products will be included in the total revenue calculation. Total revenue will be increased/decreased by any additional profit/loss generated by contracted boning operations in place at the inception of this agreement. Sales revenue will include profits or loss generated by packer's outside boning operations and profits or losses generated from packer's pumped pork operations.
• Where packer contracts with another party for a special arrangement program to process specific hogs and market pork products from those hogs uniquely; and where the purchase price of the hogs does not follow the regular market for hogs; packer will share in the gain/loss of such a program within the accounting of producer revenue. However in order to properly account for this program, packer would have to adjust the calculation of sales revenue by the impact of the incremental cost of the procurement of the hogs.
• Net revenue shall include sales of products to outside customers, inter-company sales, rendered product sales, offal product sales, finished product inventory variation and revenue received from other products that typically fall into the fresh or frozen boxed pork category.

Transmittal of Payment

• If any liens on the hogs exist at the time of delivery, packer shall jointly pay producer and such lien holders.
• Packer agrees to make available to producer (i) payment on the first working day following the slaughter of the hogs, and (ii) the documentation of the carcass merit program sheets on the first working day following the slaughter of the hogs.
• Packer agrees to make payment available to producer on the first working day following the slaughter of the hogs.
• Packer shall make prompt payment to producer within 48 hours after carcass value has been determined. Payment shall be made by check or ACH at producers request.
• Packer shall pay producer in full for each load of hogs before the close of the first business day after slaughter of each load of hogs delivered by producer to packer.
• Packer shall pay producer in full for hogs by check delivered by U.S. mail pursuant to the USDA Packers & Stockyard's regulations.
• Packer shall pay producer in full for hogs by check delivered by U.S. mail, pursuant to the USDA Packer and Stockyard's regulations upon the slaughter, USDA inspection of the hogs at a packer plant, and the determination of the final price pursuant to specified section.
• Payment will be made in the name of producer.
• Payment will be made to facilitator, who will then make payment [in Canadian dollars] less appropriate deductions for trucking, customs and brokerage to producer.
• Payments shall be deemed made when received at producer's office.
• The price shall be payable within the time required by applicable Packers & Stockyards laws and regulations. If packer fails to make a required payment within such period, producer may suspend deliveries of hogs hereunder, but the exercise of such right shall be in addition to any and all other remedies available to producer under this agreement.
• All payments hereunder shall be made by packer to producer within the time required by applicable law.
• All payments shall be by first class mail, postage prepaid, to producer's address as set forth at specified section hereof.
• All payments shall be by mail to producer's office.
• Any such payments shall be due and payable within five (5) business days of the determination of the final payment amount, which shall be determined within fifteen (15) working days of the end of each of packer's fiscal months.

Weights Used for Payment

• All shipments will be weighed at state inspected scales maintained by packer at the slaughter facility. If for any reason the carcasses are not able to be weighed, weights will be determined in accordance with producer’s historical weight amounts. Producer shall be notified in the event it becomes necessary to utilize historical weight amounts. In the event that carcass lean content can not be measured packer will utilize the historical lean values for payment purposes. Producer shall be notified if it becomes necessary to utilize historical data to determine payment values.
• All shipments will be weighed at state inspected scales maintained or approved by packer. If for any reason the carcasses are not able to be weighed, weights will be determined in accordance with producer’s historical weight amounts. Producer shall be notified in the event it becomes necessary to utilize historical weight amounts.
• All weights referenced herein are to be taken from government inspected and certified scales.
• Carcass weight for the purposes of this agreement shall mean the net weight of the hog carcass after passing USDA inspection and prior to chilling.
• Carcass weight prices will be converted to live prices by packer as necessary under this agreement.
• For purposes of payment, the weight of the dressed hog shall be the hot carcass weight of the hog.
• Hot carcass weight means the weight of the hog after the completion of kill floor operations but prior to commencement of chilling operations.
• The term live weight shall mean live weight used to calculate carcass values into dollars/cwt live.

Delivery Conditions

• Additional freight is paid if delivery to plants other than specified location is requested.
• All hogs delivered by producer under this agreement must be as follows.
• All hogs purchased hereunder shall be delivered by producer, freight prepaid by producer (subject to the provisions set forth in specified section), to slaughter facilities, designated from time to time by packer.
• All hogs sold by producer shall be delivered F.O.B. to packer's facility unless otherwise agreed to in writing.
• An extra $0.50 cwt for hogs delivered the evening prior to scheduled slaughter date and delivery prior to 8:00 a.m. will be available at the head buyers discretion. In the event the hogs don't meet the scheduled delivery time a $0.50 cwt discount will apply.
• Deliveries to any other packer plants will be mutually agreed upon by the parties.
• Delivering the hogs to a slaughter plant other than the slaughter plants designated on the cover sheet of this agreement if so directed by packer.
• All hog deliveries under the forward hog contracts referred to in specified paragraph above, must be made during the forward contract delivery month; provided, however, that hogs under specified month forward contracts shall be delivered only between specified date and specified date and hogs under specified month forward contracts shall be delivered only between specified date and specified date.
• All hogs already scheduled for delivery and loaded on trucks for a particular twenty-four (24) hour period must be delivered and accepted at the processing plant already designated by packer, e.g., if a specified number of hogs are scheduled to be delivered to packer's specified plant on a given Tuesday, with delivery to take place the following day (Wednesday), packer cannot request a change in that said delivery unless mutually agreeable to producer and said agreement shall not be unreasonably withheld by producer.
• At any time during the term of this agreement, except for those hogs scheduled to be delivered within the next twenty-four (24) hours, packer has the option to direct producer to deliver hogs produced under this agreement to slaughter facilities other than packer's specified plant provided that all of the following incremental costs, if any, incurred by producer because of the directive given by packer are paid to producer by packer: (i) incremental transportation costs, and (ii) incremental costs for shrink and/or dead on arrival (as compared to the shrink and/or dead on arrival, experienced by producer for its deliveries to the specified plant, based upon an average for the four weeks prior to any such delivery to an alternate facility).
• Delivery period means each period of the term and any renewed or extended term hereof. During the initial term of this agreement, the delivery period consists of fifty-two consecutive delivery weeks. During any permitted extension of this agreement, the delivery period consists of twenty-six consecutive delivery weeks.
• Delivery shall be by producer to packer's plants, as directed by packer.
• Each load will be accompanied by a completed specified delivery form.
• Following receipt of such estimate, packer shall give instructions as to where such deliveries shall be made.
• For purposes of this agreement, delivery means the unloading of the hogs with the freight charges paid by producer from producer's facilities.
• For the purposes of this agreement, load shall mean the quantity of hogs contained in a vehicle or trailer, which is used by producer to ship and deliver the hogs to packer; provided, however, in no event shall a load exceed the quantity that may fill a standard semi-trailer used for the purpose of transporting hogs.
• Hogs located in the following areas will be scheduled for delivery as described below: Producer's hogs located in specified state will be scheduled for shipment to packer's specified plant. If at a later time producer feeds hogs at new locations in specified state, and it would be reasonable for producer to also ship such hogs to specified plant then specified plant will be added as a delivery location for such hogs.
• Hogs may be delivered to specified location, provided that such delivery is on terms agreed in advance and acceptable to packer and producer.
• Hogs originating in a certain county may be delivered to packer's plants not covering such county if mutually agreed upon by the parties.
• Hogs shall be delivered F.O.B. to packer's specified plant.
• Hogs under this agreement will be delivered to one of packer's plants listed on attached specified schedule based on the county in which the facility is located (e.g., for hogs being delivered from a facility located in specified location, the hogs will be delivered to the specified packer's plants).
• If during the term of this agreement, producer delivers a substantial number of hogs from other finishing sites of producer's which are not located in specified location, the parties will review the delivery requirements in specified section and make mutually agreeable and reasonable adjustments to allow packer the ability to deliver hogs to at least one additional plant without having to seek the producer's consent on a delivery by delivery basis. Packer would still be obligated to pay incremental shipping costs as discussed in specified section. It is the intent of the parties to reasonably work together under this agreement to avoid production interruptions and to create operational efficiencies at each party's respective operations, and if producer's deliveries of hogs from locations outside specified location cause unreasonable interruptions or inefficiencies at packer's operations the parties will discuss the reasonable adjustments referenced herein.
• If packer chooses to close a plant, the parties will review specified schedule and re-allocate the production locations to take into account the fact that the closed plant will no longer be available for delivery.
• If packer closes a pork processing facility which is a facility listed for delivery above, the parties will mutually agree on which packer facilities will be used to replace such closed facility. If the parties cannot mutually agree, the hogs will be scheduled for delivery to any one of packer's nearest pork processing facilities.
• If producer delivers to a packer buying station, then producer shall pay freight charges from the buying station to packer facility.
• If the parties cannot mutually agree, the hogs will be scheduled for delivery to any one of packer's nearest pork processing facilities.
• In the event of the sale or temporary or permanent closure of one of packer's slaughter facilities, packer shall request producer deliver hogs to another packer facility including, without limitation, the specified location.
• In the event that producer has not loaded said hogs prior to receiving notice from packer of the need to delay shipment to, or divert shipment from, packer, producer will delay loading and shipment of said hogs for up to forty-eight (48) hours, or deliver the hogs to other facilities as directed by packer.
• Inspection, sorting and weighing of hogs shall be performed by packer at the delivery location or the plant.
• Inspection, sorting and weighing shall be performed by packer at the plant specified by packer for delivery.
• Inspection, sorting and weighing shall be performed by packer at the plant. Representatives of producer may observe such inspection, sorting, and weighing if they so desire. Packer reserves the right to reject any hog that is crippled, lame, sick, overfilled. or otherwise unmerchantable, or that is otherwise not in compliance with the specifications and other standards of quality contained in this agreement.
• Nothing contained in this agreement shall be deemed to require producer to deliver to packer's slaughter facilities at specified location more than the hogs finished by producer at the specified farm located in specified location. The remainder of the hogs delivered by producer shall be delivered to packer's specified slaughter facility.
• Notwithstanding anything to the contrary herein, the parties agree and intend that the sale and purchase data for the hogs to the date that the hogs are physically delivered to packer.
• On an annual basis, packer will provide producer with a schedule listing the distribution of the a specified number of hogs to each of packer's plants.
• Other packer's plants may be added as delivery points for hogs as mutually agreed to by the parties.
• Packer agrees to use reasonable efforts to schedule producer hogs at packer facility closest to producer production facility.
• Packer may request that one or more lots of hogs be delivered to a slaughter facility other than one designated in this section. In the event this occurs, packer will pay the incremental freight to the alternative slaughter facility.
• Packer may require producer to deliver to an alternate site within 200 miles of packer's specified plant upon twenty-four (24) hours advance notice.
• Packer will inspect, sort and weigh carcasses at packer's plant.
• Packer will unload the hogs in accordance with industry standards giving consideration to all factors affecting unloading (e.g. production requirements, weather, other deliveries, etc.).
• Producer agrees to arrange transportation with transporters certified under the Truckers Quality Assurance Program of America's pork producers, and incurring freight costs to deliver the hogs to the slaughter plants designated on the cover sheet of this agreement.
• Producer agrees to arrange with packer weekly hog deliveries to packer's plant. Packer may schedule delivery of hogs to other plants without producers consent if packer does not increase the shipping distance by more than fifty (50) miles; however, packer will be responsible for any incremental shipping costs associated with delivering the hogs to another plant. Except as provided herein, deliveries to any other plants that will increase the shipping distance by more than fifty (50) miles must be mutually agreed upon by the parties in advance. If packer is unable to schedule deliveries at the specified plant due to a Force Majeure event, or for other reasons outside of packer's control, packer can schedule deliveries of producer's hogs to other packer plants without producer's consent. In such event, packer will use good faith efforts to schedule deliveries to one of the two closest operating packer plants, and packer will be responsible for any incremental shipping costs associated with delivering hogs to another plant. Although producer will be responsible for meeting the quantity requirements specified herein, producer will solely decide when given hogs are ready for slaughter and will be eligible to be scheduled by the parties for delivery pursuant to this section.
• Producer agrees to deliver hogs under this agreement by specified date.
• Producer and packer also agree that on an annual basis approximately 10,000 to 20,000 hogs can be scheduled for delivery under this agreement to packer's plant in specified location.
• Producer and packer shall immediately notify and consult with each other concerning any temporary inability to take or deliver hogs.
• Producer and packer/facilitator shall consult with each other concerning any temporary inability to take or make deliveries.
• Producer is responsible for arranging transportation and incurring freight costs to deliver the hogs to packer's slaughter plant identified in specified paragraph.
• Producer is responsible for delivering the hogs to any other slaughter plant designated by packer, in which case packer will pay producer for additional freight costs incurred by such delivery pursuant to packer's then current standard livestock freight schedule.
• Producer may deliver hogs to a packer location or a packer hog buying station.
• Producer may deliver hogs to a packer location or a packer hog buying station. If producer delivers hogs to a packer hog buying station, the base carcass price will be adjusted downward to reimburse pacer for the freight cost to deliver the hogs to the location from said hog buying station. No freight cost adjustment shall be made on hogs delivered to the location.
• Producer shall be responsible for arranging transportation and incurring freight costs to deliver the hogs to packer's plant identified in specified paragraph.
• Producer shall deliver F.O.B. packer's facility hogs pursuant to the following terms.
• Producer shall provide transportation at producer's expense to the slaughter facility of packer located at specified location.
• Pursuant to specified section of the agreement, producer will notify procurement personnel at packer's kill operation on Thursday of producer's preliminary estimate of deliveries for the next week. Producer or affiliated producer shall provide packer with a final delivery schedule on Friday for the estimated deliveries for the next week.
• The hogs supplied under this agreement shall be sold F.O.B. destination and title to hogs and risk of loss of hogs pass from producer to packer at packer's plant as specified in the carcass pricing rules section of packer's carcass merit program.
• This agreement is plant specific and applies to packer's specified plant.
• With respect to specified paragraphs above, both packer and producer agree to use best commercial efforts to equitably distribute favorable and unfavorable delivery times (including both days during the week and times during the day) to ensure fair treatment of each party and to accommodate producer's pig flow and packer's plant production needs.

Excess Production/Expansion

• Before producer begins feeding any hogs at different production facility, and such change increases the annual number of hogs that will be delivered to one of the regions specified above, or any other region later identified by the parties, producer will contact packer and ask if packer will accept hogs from such production facility at packer plants specified for such region in the schedule above.
• During any delivery month should packer determine to purchase additional Market Hogs from Producer in excess of the amount set forth in Section 3(a)(ii) or during the Term of the Agreement should Morrell determine to purchase additional Market Hogs from Producer in excess of the Market Hog deliveries set forth in Section 3 (a), then such Market Hogs shall be delivered pursuant to negotiated terms and conditions that may be different than the Market Hogs required to be delivered and sold by Producer under the terms and conditions of this Agreement.
• During each year of the term, producer shall be entitled to sell, grant or otherwise convey to a person or entity other than packer the right to sell producer's total production of hogs in excess of the number of hogs set forth in producer's projection certificate as producer's annual projected total production for each such year, if but only if producer first (i) gives thirty (30) days prior written notice to packer of producer's intent to sell such hogs, and (ii) furnishes packer with true, accurate and complete copies of all documentation relating directly or indirectly to such proposed sale, grant or other conveyance, and (iii) the documentation relating to such sale, grant or other conveyance expressly recognizes that the right or option being sold, granted or otherwise conveyed thereby is junior and subordinate to the right granted to packer by this specified section.
• If packer chooses not to accept the additional hogs under this agreement, packer will notify producer in writing within thirty days of receipt by packer of producer's written notice of expansion. If packer chooses not to accept the additional hogs, producer will not be allowed to deliver such additional hogs under this agreement.
• If packer will not accept the hogs from such production facilities at the plants listed in the specified schedule for such region, packer will inform producer of the next closest plant where packer can accept the hogs for delivery.
• If producer begins feeding hogs at any location outside of the regions listed above, the parties will mutually agree on packer facilities where such hogs will be delivered.
• If producer chooses to feed hogs at such production facility, packer will not be responsible for any portion of the freight costs to the plant specified by packer for delivery.
• If producer plans to expand its hog production operations through new construction or acquisition, producer will inform packer by a written notice of any plans for expansion, and such notice will describe (i) the proposed size of the expansion, (ii) the estimated number of hogs to be produced at the expansion location, and (iii) a production schedule showing when producer anticipates hogs will first be ready for delivery and showing monthly production estimates up through the time such expansion is delivering hogs at full capacity.
• If producer produces hogs in excess of the quantities set forth above in specified section or which do not meet the standards (as defined in specified section below), then packer shall pay for such hogs at the base price subject to any premiums or discounts in accordance with the carcass merit program without regard to target price, and such hogs shall not be included in the volume requirements set forth in specified section. If packer accepts out hogs, packer will pay for out hogs at a price determined by packer and such out hogs shall not be included in the volume requirements set forth above in specified section.
• If producer produces hogs in excess of the quantities set forth above in specified section, then (i) packer shall pay for such hogs at the base price subject to any premiums or discounts in accordance with the Carcass Merit Program, and (ii) such hogs shall not be included in the volume requirements set forth in the specified section.
• If producer produces hogs in excess of this quantity or hogs which do not meet the standards (as defined in specified section below), then packer will not be required to purchase such hogs. If packer agrees to purchase such hogs, it shall pay for them at packer's daily market price.
• If producer produces hogs in excess of this quantity or hogs which do not meet the standards (as defined in specified section below), then packer will not be required to purchase such hogs. If packer agrees to purchase such hogs, it shall pay for them at packer's daily market price. If packer agrees to accept out hogs, it shall pay for out hogs at a price determined by packer and such out hogs shall not be included in the volume requirement set forth above.
• If producer produces hogs in excess of this quantity then packer will not be required to purchase such hogs. If packer agrees to purchase such hogs, it shall pay for them at packer's daily market price.
• If producer wishes to expand its production capacity and sell more hogs annually, producer will notify packer in writing of the planned expansion. Packer will approve or disapprove the delivery of the additional hogs under this agreement (packer's approval will be based on packer's available shackle space and long-term objectives for contracted hog procurement).
• In the event Producer delivers in excess of the required quantity, the quarterly delivery for the excess will be priced on the specified, as quoted by the USDA for the day prior of delivery. Grade and yield premiums/discounts will be applied to this price for final settlement.
• All such additional hogs shall be then delivered by producer and purchased by packer under the same terms and conditions as those hogs required to be sold by producer under the terms and conditions of this agreement.
• Notwithstanding the provisions of specified paragraph above, producer may provide an estimate which is more than 110% of producer's prior year's actual deliveries of hogs to packer. In any such event, packer shall have fifteen (15) days from receipt of producer's estimate to object to the purchase of all or a portion of the estimated deliveries in excess of such 110%. If packer does so object, packer shall purchase, and producer shall sell, the quantity of hogs determined by the estimate less the quantity subject to packer's objection. If packer does not object, packer shall purchase, and producer shall sell, no less than the estimated quantity.
• Packer shall accept and purchase, and producer shall deliver and sell the number of hogs, which are produced at the facilities, during any fiscal quarter which are in excess of 25% of the fiscal year quantity, but not exceeding the excess delivery quantity as set forth on the schedule attached as specified exhibit (excess hogs).
• Packer shall not be obligated to purchase excess hogs in excess of such approximate number.
• Packer will have thirty (30) days to inform producer if it is willing to enter an agreement with terms that are equivalent to the terms offered by the third party, and if producer is willing to offer such terms producer will sell the hogs from the expansion to packer.
• Packer will not be obligated to purchase excess hogs in excess of the difference between the annual production quantity for the finishing units as set forth in specified section, and the fiscal year quantity set forth above.
• Producer agrees to deliver all other hogs which are added to this annual production under this agreement pursuant to the terms of other agreements between the parties, and any other hogs added under this agreement pursuant to the mutual consent of both parties.
• Producer shall deliver and sell to packer, and packer shall purchase any additional hogs (if any) delivered by producer pursuant to the provisions of specified section below.
• The annual minimum will include any increase from expansion accepted by packer. In no event will the annual minimum be less than the annual number estimated in specified section above, plus any increase from expansion accepted under this agreement.
• The approximate number of excess hogs lo be produced by producer at the facilities, and the fiscal quarter during which the excess hogs will be produced, is set forth on the schedule attached as specified exhibit.
• The price for all hogs delivered to packer in excess of the agreed monthly or quarterly quantities shall be packer's daily quoted market price.
• The price for the excess hogs supplied under this agreement shall be the base cash price per carcass cwt., as offered by packer at its plant on the day of delivery of the excess hogs, plus or minus (as the case may be), the carcass merit adjustment.
• Any hogs available for sale and delivery by producer in excess of the amount in the specified subsection above may be sold by producer to anyone else, subject, however, to packer's first right to purchase such hogs as set forth in the specified paragraph of this agreement.

Right of First Refusal

• Commitment of producer to sell 100% of all healthy, merchantable hogs to packer during the committed period of specified dates.
• For all other out hogs of producer that are not currently being sold to packer affiliate, if packer affiliate offers a program to purchase such out hogs that is competitive with the programs being offered by third parties for such out hogs, producer will sell the out hogs under packer affiliate program.
• Packer agrees to accept delivery and purchase from producer, and producer agrees to deliver and sell to packer, producer's total production, subject to the following terms and conditions.
• Packer shall have the right of first refusal on any additional volume.
• Packer shall purchase from producer, and producer shall sell to packer, all hogs produced by producer.
• Producer agrees to supply all of producer's hogs to packer under this agreement, excluding hogs previously contracted for sale, and estimate that producer will supply the following quantity of hogs: specified number of hogs per month beginning specified date for delivery to the following slaughter plant (Circle One and Only One Plant).
• Producer hereby commits that it will supply all of its market hogs to packer under this agreement, excluding hogs previously contracted for sale, and estimates that it will supply the following quantity of hogs each month: specified number of hogs per month beginning specified date.
• Producer hereby grants to producer for each year of the term of this agreement the first right to purchase all of producer's production of hogs in excess of the number of hogs set forth in producer's projection certificate as producer's annual projected production for each such year.
• Producer will attempt to market all sows and cull hogs to packer.
• Producer will market all available hog production to packer which will equal a specified number of head, monthly or annually.
• Should packer determine to exercise its first right to purchase described herein, packer shall notify producer in writing of packer's decision to purchase additional hogs within fifteen (15) days of packer's receipt of producer's notice by indicating the number (or stating all) of the additional hogs to be purchased and the time period for which the notice shall be effective.
• Subject to the potential increases as provided herein, the parties agree that producer will supply and packer will purchase on an annual basis 100% of the hogs (defined in specified section) producer sells for slaughter, or which producer markets for producer affiliates, during the term.
• The parties recognize that packer cannot exactly match certain terms of a third party offer (for example, packer's plants for delivery are in different locations than other packers); however, if packer's offer contains terms substantially equivalent to the third party's offer, and the economics of packer's offer is the same or better than the third party offer, packer will be deemed to have matched the third party's offer.

Scheduling

• At least thirty (30) days prior to the commencement of each calendar quarter, during the term hereof, producer shall deliver to packer an estimate of the number of hogs to be delivered to packer in the succeeding calendar quarter and the quarter thereafter; each of which shall not be less than the quarterly amount set forth at specified section. Producer shall use its best efforts to deliver the number of hogs as set forth in such estimate.
• By Friday of the second week preceding delivery, packer will schedule and notify producer of the day of the week and the time of day that hogs should be delivered to one of the designated packer facility as discussed below.
• Changes in that schedule will be permitted only by agreement between producer and packer reached at least twenty-four/seventy-two hours prior to delivery, or unless provided for otherwise in this agreement.
• Changes in the schedule will be permitted only by agreement between packer and producer. Both parties will act reasonably in agreeing to any such scheduling changes.
• Constant flow production (this delivery schedule) is agreed to by producer and packer as part of packer specified agreement between producer and packer.
• Constant flow production means all hog production where producer can deliver the same number of hogs each month.
• Deliveries of hogs shall be made as specified by packer, including deliveries on Saturdays and/or Sundays.
• Deliveries will be made in lots of approximate pro rata quantities, subject to availability, each week during the term hereof.
• Delivery date and time will be mutually agreed upon between packer and producer with 40% of volume to be scheduled and delivered by 8:OO a.m. if workable in plant delivery schedule..
• Delivery week means each calendar week during the term or any renewed or extended term hereof beginning at 12:01 A.M. on Monday and ending at 11:59 P.M. on the following Sunday.
• Delivery year means each period of the term and any renewed or extended term hereof consisting of fifty-two consecutive delivery weeks.
• During any delivery month, producer must deliver, and packer shall purchase, a minimum of hogs, even if that number of hogs exceeds producer’s monthly production of hogs. During any delivery month, packer shall not be obligated to accept delivery and purchase from producer more than specified number of hogs.
• During the week prior to delivery, producer agrees to arrange with hog buyer assigned to producer for the delivery of the hogs under this agreement.
• Each Tuesday by noon, packer shall designate the approximate percentage of hogs to be allocated and delivered to each of packer's plants for the following week. Producer shall use its best efforts to comply with packer's request taking into consideration location of the hogs to each plant, Paylean certification, and other factors.
• Hogs will be scheduled no later than Friday 9 a.m. the week prior to the desired delivery date and time, (see attached schedule.)
• Hogs will be scheduled no later than Thursday 11:59 a.m. the week prior to the desired delivery date and time. Delivery date and time will be mutually agreed upon between producer and packer. Each week a minimum of forty percent (40%) of hogs will be scheduled and delivered prior to 7:30 am.
• Hogs will be scheduled to packer no later than Thursday afternoon the week prior to the desired delivery date and time.
• If packer operates its plants more than five days in a given week, any deliveries on the sixth or seventh day will be mutually agreed upon by the parties.
• If producer cannot reasonably meet the delivery schedule provided by packer, producer will promptly notify packer and packer will make reasonable accommodations.
• If producer has constant flow production, producer's weekly quantities of hogs delivered must be as uniform as is possible.
• If producer incurs a delivery shortage assessment pursuant to specified paragraph for any three consecutive months, then producer and packer will reassess the delivery schedule for the remaining term of this agreement. Producer and packer may mutually agree in writing to modify the delivery schedule for the remaining term of this agreement.
• If producer utilizes an all-in/all-out or batch operation, deliveries must average the monthly quantity set forth above.
• If producer's delivery estimates change, producer shall update the estimates immediately and deliver the new estimate to packer.
• If such notification does not conform with the schedule attached as an exhibit, then such notification shall include the reason for any variance from such schedule, the actions being taken by producer to remedy any such variance, and when producer expects to resume deliveries in accordance with such schedule.
• In addition to the above, producer shall furnish packer weekly, before 12:00 noon on specified day, an estimate of the quantities of excess hogs to be shipped during subsequent two (2) week period.
• In addition to the above, producer shall notify packer of the estimated number of hogs to be delivered on a daily basis before 12:00 noon on Friday previous to the week of delivery, specifying the estimated number of hogs to be delivered [each day of the week/each of the days indicated above].
• In addition to the above, such fiscal year quantities are set forth on the schedule attached as an exhibit, and are further detailed, on such schedule, on a monthly and fiscal quarter basis.
• Monthly delivery estimates will be supplied to packer at beginning of each 6 month period.
• No later than Thursday two weeks prior to the week of delivery, producer will inform packer of the actual number of hogs to be delivered in delivery week, and by Friday two weeks prior to the week of delivery packer will provide producer with a schedule of the dates and times for hogs to be delivered to one of the plants described above.
• [At the beginning of each calendar quarter/On or before March 1st and September 1st of each calendar year], producer shall provide packer an updated monthly hog delivery schedule for the next twelve months.
• Any variances in deliveries from the agreed monthly or quarterly quantities will be accepted only at packer's discretion.
• Any variances in deliveries from the quantity set forth above, including without limitation any excess quantity intended to compensate for a prior deficit quantity and vice versa, shall be accepted only at the discretion of packer.
• Both packer and producer agree to notify the other immediately of any known production changes that will affect the shipment schedules.
• Notify procurement personnel at packer's operations on Thursday of the intended deliveries for the next week.
• Notwithstanding the above, during the 12 month period provided for in specified section, the parties agree to step-down deliveries each month on a pro-rata basis, and during each month the deliveries will decrease by approximately specified number of hogs.
• On or before January 1 of each calendar year during the term or any renewed or extended term, producer shall prepare and deliver a monthly delivery estimate in the form set forth on specified exhibit to this agreement.
• On the last day of each month during the term or any extended term of this agreement, producer shall deliver to packer a five week delivery certificate, in the form of specified exhibit to this agreement, setting for the number of hogs to be scheduled for delivery by producer for each of the following five (5) weeks.
• On the Thursday of the week prior to delivery, producer will inform packer of the actual number of hogs to be delivered in the following week and packer will provide producer with a schedule of the dates and times for hogs to be delivered to a plant as described in specified schedule, which schedule will be reasonable in regards to the number of hogs to be delivered each day, and the times for delivery.
• Packer agrees to use reasonable efforts to schedule producer hogs at one of the plants named in specified section above, which is closest to producer production facility.
• Packer and producer will each use its best efforts to always provide the other with as much notice as possible of any changes required in the delivery schedule.
• Packer will conduct a review of producer's production of hogs at the beginning of each calendar quarter to establish the projected production of hogs for the upcoming calendar quarter. This projection shall be a non-binding estimate.
• Payment of the specified premium is contingent upon producer performing under each of packer's plants early morning delivery schedules, which schedules will vary from plant to plant.
• Period means each period set forth on a projection certificate.
• Producer acknowledges that it bears the risk of hog production shortfalls. Further, producer's failure to deliver the agreed monthly or quarterly hog quantities, unless excused pursuant to specified paragraph, will result in producer having to pay packer delivery shortage assessments pursuant to specified paragraph.
• Producer agrees to arrange and schedule with a designated packer representative hog deliveries to either of packer's two nearest operational plants (excluding the specified facility unless producer is an approved supplier for specified supplier).
• Producer agrees to arrange for hog deliveries to packer's specified plant by the Thursday preceding the next delivery week. Unavoidable changes in that schedule will be permitted only by agreement between producer and packer reached at least twenty-four (24) hours before delivery.
• Producer agrees to arrange for hog deliveries to packer’s plant by 11:59 am Wednesday preceding the next delivery week. Arranging for delivery on Wednesday will allow for a preference of delivery time over the producers required to prebook Thursday. Unavoidable changes in that schedule will be permitted only by agreement between producer and packer reached at least twenty-four (24) hours before delivery.
• Producer agrees to arrange with facilitator for hog deliveries to packer's specified locations by noon on the Thursday preceding the next delivery week. There will be no freight adjustments for deliveries to any of these plants. Unavoidable changes in that schedule will be permitted only by agreement between producer and facilitator reached at least twenty-four (24) hours before delivery,
• Producer agrees to arrange with packer facilitator assigned to producer, hog deliveries to packers specified locations by the Thursday preceding the next delivery week. Unavoidable changes in that schedule will be permitted only by agreement between packer and producer reached at least twenty-four (24) hours before delivery.
• Producer agrees to arrange with packer weekly hog deliveries to packer plants.
• Producer agrees to arrange with packer weekly hog deliveries to packer's plants located in specified location pursuant to packer's instructions.
• Producer agrees to deliver hogs to packer on days and times mutually agreed to by packer, and producer. Producer shall deliver a minimum of twenty percent (20%) of his hogs to packer on Sunday or by 5 a.m. Monday each week.
• Producer agrees to deliver hogs to packer on days and times specified by packer, subject to specified section.
• Producer agrees to deliver hogs to packer on days and times specified by packer.
• Producer agrees to deliver specified number of head of hogs to packer during each week of each month this agreement is in effect. Producer wlll specify the number of market hogs to be delivered during each calendar week during each such week. Packer will specity the number of head of market hogs to be delivered on each day of such delivery week. Producer shall deliver the daily number of loads, +/- 2 loads per day. The monthly and weekly schedules specified hereunder shall reasonably provide packer with evenly distributed deliveries and a consistent supply of market hogs.
• Producer agrees to delivery of hogs on a regular basis and when scheduled by packer.
• Producer agrees to sell to packer, and packer agrees to buy, the following specific quantity of market hogs during each calendar month under the agreement.
• Producer agrees to use good faith efforts to deliver the annual total production on a consistent monthly and weekly basis through each year of the term.
• Producer and packer will work together to create reasonable schedules for the delivery of hogs.
• Producer has the right to schedule the first 1200 every week at its discretion. The balance of the weekly hog sales are scheduled by specified plant procurement with notice given to producer by 10:30 A.M. day prior to day of requested delivery.
• Producer may be required to provide packer more than two weeks notice of hog deliveries if producer wishes to deliver the hogs under the early morning delivery schedule.
• Producer projects that the approximate number of market hogs on a quarterly or 3 month basis is a specified number of head.
• Producer shall arrange delivery with packer hog procurement personnel by Thursday of the week prior to delivery, with specific delivery days and times to be determined by packer (early, late, Sunday and holiday deliveries may be required). Time is of the essence in the delivery of hogs under this agreement.
• Producer shall deliver and sell to packer during each delivery period at least the number of hogs for such delivery period (as reflected on the projection certificate set forth in specified exhibit to this agreement) even if that number of hogs exceeds producers total production during such delivery period.
• Producer shall arrange delivery with packer hog procurement personnel by Wednesday of the week prior to delivery, with specific delivery days and times to be determined by packer. Packer may specify the date and time of delivery during any delivery period, by giving producer at least a two-day notice. Early, late, Sunday and holiday deliveries will be required. Time is of the essence in the delivery of hogs under this agreement.
• Producer shall deliver hogs to packer on a uniform basis during each agreement year.
• Producer shall deliver such hogs on a ratable basis throughout the term.
• Producer shall deliver to packer: (i) on a monthly basis, a forecast schedule of expected deliveries for each successive four-week period during the term hereof, and (ii) on a weekly basis, a firm commitment for the anticipated delivery of hogs on or before Wednesday noon in the week prior to the week of delivery. The commitment for delivery shall include the quantity to be delivered and the day of the week actual delivery is to occur. Failure to deliver the forecast and delivery commitment on a consistent basis may, at packer’s sole and absolute discretion, constitute a default hereunder.
• Producer shall make all deliveries to the slaughter facility requested by packer and as provided in specified section of this Agreement at any time as requested by packer. Producer is obligated to deliver a minimum of specified quantity per week of hogs. In connection herewith, during the term of this agreement, producer agrees to use commercially reasonable and economically feasible efforts to maintain its access to production capacity at a consistent level.
• Producer shall make all deliveries to the slaughter facility requested by packer and as provided in specified section of this agreement at any time as requested by packer. Producer is obligated to deliver hogs in the amounts set forth below.
• Producer shall notify packer of the estimated number of hogs to be delivered on a daily basis before 12:00 noon on specified day previous to the week of delivery, specifying the estimated number of hogs to be delivered each day of the week, Monday through Sunday (if Saturday production is not scheduled for the designated slaughter facility, then no deliveries shall be scheduled for Saturday, and if packer does not require deliveries on Sunday for Monday production at the designated slaughter facility, then no deliveries shall be scheduled for Sunday).
• Producer shall notify packer procurement personnel on specified day of the intended deliveries for the next week.
• Producer shall, at each six (6) month interval during the term or any permitted extended term of this agreement, prepare and deliver to packer a projection certificate in the form of specified exhibit to this agreement, that shall be effective as at the beginning of such six (6) month period. This projection certificate shall specify the number of hogs to be delivered each month during the following twelve (12) month period.
• Producer shall, before 12:00 noon each Thursday, furnish to packer an estimate of the number of hogs to be delivered and the date and time of each delivery for the next week. Producer shall also deliver an estimate of the total number of hogs to be delivered in the next succeeding week.
• Producer shall, before 12:00 noon each Thursday, furnish to packer an estimate of the number of hogs to be delivered for the next week, and producer's request for any specific dates and times for such deliveries. Producer shall also deliver an estimate of the total number of hogs to be delivered in the next succeeding week. By 12:00 noon Friday prior to the week of delivery packer will provide producer with the dates and times for hogs to be delivered to one of the plants described above, and packer will reasonably try to accommodate producer's requests for the dates and times of deliveries. If producer cannot reasonably meet the delivery schedule provided by packer, producer will promptly notify packer and packer will use good faith efforts to make reasonable accommodations. Packer and producer agree to use good faith efforts to equitably distribute favorable and unfavorable delivery times (including both days during the week and holidays) to ensure fair and equitable treatment to producer in comparison to other producers on average, and to reasonably accommodate producer's pig flow in relation to packer's plant production needs. Producer shall use good faith efforts to meet packer's early delivery requirements (arrival at least two hours prior to the facility start-up) for up to specified number of loads per day to specified location at mutually agreed early delivery times for such number of loads per day.
• Producer should commit by Wednesday of the week prior to the hogs to be delivered to packer at packer's designated date and time of delivery schedule.
• Producer will notify packer that hogs are ready for delivery no later than Thursday of the week prior to the week of delivery.
• Producer will notify procurement personnel at packer's kill operation by no later than Thursday of producer's deliveries for the next week.
• Producer will provide packer on a quarterly basis the estimated number of hogs that producer will deliver for each month in the following quarter (i.e. on January 1, 2001 producer will give the number of hogs estimates producer will deliver in April, May and June of 2001).
• Producer will provide packer with an estimate of the hogs that are ready for delivery no later than Thursday two weeks prior to the week of delivery.
• Producer will use its best efforts to deliver to packer the annual minimum of hogs on an even and consistent basis over each year of the term.
• Projection certificate means each certificate prepared and delivered by producer to packer pursuant to specified section of the agreement, each of which shall be substantially in the form attached hereto as exhibit.
• Pursuant to specified section of the master agreement, facilitator will conduct a review of producer's production of hogs at the beginning of each calendar quarter to establish the projected production of hogs for the upcoming calendar quarter. This projection shall be a non-binding estimate.
• Quarterly flow production means hog production that is all-in/all-out or batch production where producer cannot deliver the same number of hogs each month.
• The annual contracted total production shall be delivered to packer in even installments throughout the period of the agreement. In addition to delivering a projection certificate, the producer shall deliver a monthly delivery estimate to packer detailing each delivery installment.
• The hogs required to be delivered and sold by producer in this agreement shall be sold and delivered in substantially equal monthly quantities
• The hogs shall be delivered to packer in even installments throughout each year of the agreement. The producer shall deliver a monthly delivery estimate to packer detailing each delivery installment.
• The parties acknowledge producer delivery of the minimum required quantities of hogs to packer set forth in specified section and, that it is important to producer to have accurate delivery schedule so that production can be efficiently planned, is an essential part of this agreement. Producer agrees that it will meet the delivery schedule in the monthly forecast and will deliver in accordance with its weekly commitment.
• The parties agree that on a daily basis producer will be allowed to deliver between a specified range of head per day; however, on average producer must deliver a specified number of hogs per day during each week. For example, if packer plants operate 5 days during the week, producer must deliver a specified number of hogs during such week, but on any given, day during the week producer can deliver between a specified range of hogs.
• The parties agree to use good faith efforts to assist the other in reducing costs and creating efficient delivery and production schedules.
• The specified number of head per day is based on a five day week and excludes holidays when packer plants are not operating; however, if packer is processing hogs on Saturdays, the parties will mutually agree if hogs will be delivered under this agreement on Saturdays.
• Unless producer and packer agree otherwise, producer agrees to sell to packer during any renewal term the same quantity of hogs as were agreed upon for the last twelve calendar months under this delivery schedule.
• Volume will be evenly distributed.

Volume

• Absent marketing to another source, it is estimated that the annual volume from this source will be approximately a specified number of hogs.
• Annual projected total production means with respect to any period the number of hogs that producer in good faith believes will be produced by producer or on his behalf during such period, as set forth on specified document.
• Commencing specified date and continuing through specified date, producer shall step down deliveries to packer, and packer shall purchase, on a weekly basis, producer's orderly manner of reduced deliveries through discontinuance of deliveries at the end of the initial term. On the first day of each month, producer will provide packer an estimate of weekly deliveries through the end of the initial term.
• During the term, producer will deliver on an annual basis the follow number of hogs (annual production).
• Estimated annual volume is a specified number of head.
• Except as otherwise set forth herein, during each of the fiscal years provided for under this agreement (fiscal year, for the purposes of this agreement, shall begin specified date and end specified date), packer shall accept delivery and purchase, and producer shall deliver and sell the number of hogs per fiscal year, from the facilities, as set forth below.
• For each consecutive 12-month period commencing on specified date of each year during the term of this agreement, producer shall deliver to packer, and packer shall purchase, no less than a specified number of hogs during each agreement year, with no less than 20%, and no more than 30%, of the annual total of hogs being delivered in any calendar quarter.
• For each following agreement year, producer shall deliver and sell to packer, and packer shall purchase, no less than the estimated number of hogs (as determined by specified paragraph above).
• Lot shall mean a group of one or more hogs that has the same packer tattoo number.
• On or before January 1 of each calendar year during the term or any renewed or extended term, producer shall prepare and deliver an annual projection certificate in the form set forth on specified exhibit to this agreement.
• On or before March 1st and September 1st of each calendar year during the term or any renewed or extended term, producer shall prepare and deliver a twelve (12) month delivery estimate in the form set forth on specified exhibit to this agreement.
• On or before specified date, and each specified day thereafter, producer, after consultation with packer regarding packer's projected needs for hogs, shall deliver to packer an estimate of the number of hogs to be delivered in the following agreement year. The estimate shall be the greater of (i) the amount set forth at specified section, or (ii) the prior year's actual deliveries of hogs by producer to packer plus or minus 10%.
• Packer and producer will mutually agree on the number of hogs producer will deliver, over a given period of time.
• Packer shall not be obligated to accept delivery and purchase from producer during any delivery period more hogs than the number of contracted hogs for such delivery period (as reflected on the projection certificate set forth in specified exhibit to this agreement).
• Packer shall not be obligated to accept delivery and purchase from producer during any delivery year more hogs than the number of hogs determined by multiplying the annual projected production in effect for such delivery year by 115%.
• Packer shall purchase from producer, and producer shall sell to packer, a minimum of 99% of all hogs produced by producer from their finishing operations located in and around specified locations and committed under this agreement in specified section below, and producer shall deliver hogs to packer on a uniform basis during each agreement year pursuant to the terms of specified section below.
• Packer shall purchase from producer, and producer shall sell to packer, a specified number of hogs (+/-10%) at the base price or the forward contract price.
• Packer shall purchase from producer, and producer shall sell to packer, all hogs committed under this agreement in specified section below, and producer shall deliver hogs to packer on a uniform basis during each agreement year pursuant to the terms of specified section below.
• Packer shall purchase, and producer shall sell, the following quantity of hogs pursuant to the carcass merit program. (i) Number of hogs/year: specified number (+ or - 10%); (ii) Number of hogs/month: specified number (+ or - 10%); (iii) Number of hogs/week: specified number (+ or - 10%).
• Packer shall purchase, and producer shall sell, the quantity of hogs on specified schedule, attached, and subject to the carcass merit program and specified sections.
• Producer agrees to deliver to packer on a uniform basis during each agreement year, the number of hogs to be delivered per year as set forth in this section. Producer shall provide to packer a monthly marketing forecast a minimum of three months prior to the projected marketings. If productivity changes in producer's herd result in producer delivering less than 90% or more than 110% of the number of hogs per year, as set forth in specified section, then producer shall notify packer immediately and provide the necessary documentation to support this change in delivery numbers.
• Producer agrees to sell and deliver, and packer agrees to purchase, producer's hogs (hogs are defined on specified schedule). During the term, producer will deliver on an annual basis the following hogs (annual production).
• Producer agrees to sell to packer under this agreement, and packer agrees to buy, hogs in the exact monthly quantities specified in the delivery schedule made part of this agreement.
• Producer agrees to supply to packer under this agreement the following quantity of hogs: specified number of hogs per month/week.
• Producer represents and warrants to packer that each projection certificate delivered by producer will be true, accurate and complete in aII respects and will reflect producer's good faith projection concerning its contracted production.
• Producer shall be entitled at any time and from time to time after the date of this agreement (but not more than four (4) occasions during any period of the term or any renewed or extended term of this agreement consisting of 52 consecutive delivery weeks) to revise its projections concerning its annual projected production of hogs during the remainder of the periods by preparing and delivery to packer a projection certificate at least two (2) weeks prior to its effective date. Provided however, that no such revision shall decrease the annual projected production to a number of hogs that is less than producer's total production.
• Producer shall deliver and sell to packer during each delivery year at least the number of hogs determined by multiplying the annual projected production in effect for such delivery year by 85%, even if that number of hogs exceeds producers total production during such delivery year.
• Producer shall market to packer the following volumes: Specified date or sooner hogs from producer, the volume is anticipated to equal a specified number of hogs weekly; Specified date or sooner, hogs from producer, the volume is anticipated to equal a specified number of hogs weekly.
• Producer shall notify packer at the beginning of each fiscal quarter, of the projected quantity of hogs (including excess hogs) to be shipped and delivered by producer, on a monthly basis, for the current fiscal quarter and the subsequent fiscal quarter.
• Producer shall use its best efforts to ship and deliver to packer, the quantity of hogs, in accordance with the schedule attached as specified exhibit.
• Producer shall, on or before January 15 in each calendar year during the term or any renewed or extended term hereof, prepare and deliver to packer a projection certificate that shall be effective as of January 1 in the year such certificate is prepared and delivered. This projection certificate shall not count as one of the four projection certificates permitted by specified section.
• Producer will conduct a review of producer's production of hogs at the beginning of each calendar quarter to establish the projected production of hogs for the upcoming calendar quarter. This projection shall be a non-binding estimate that is received by packer.
• Producer will market all available production to packer which will equal a specified number of head (weekly /monthly /annually). (i) Volume will be evenly distributed (ii) packer shall have the right of first refusal on any additional volume (iii) hogs will be scheduled no later than 11:59 am Thursday the week prior to the desired delivery date and time (iv) Delivery date and time will be mutually agreed upon between buyer and seller. Packer shall have the right of first refusal on any additional volume.
• Producer will provide packer on or about September 15 of each year the approximate number of hogs to be delivered on a monthly basis for the next year, and will provide packer with the expected annual minimum, which number will be mutually agreed upon by packer.
• Producer will use best commercially reasonable efforts to deliver to packer and packer will use best commercially reasonable efforts to accept from producer, the annual total production of hogs on an even and consistent basis over the term. The parties agree that, on a weekly basis, producer will deliver, and packer will accept, a minimum of specified number of hogs and a maximum of specified number of hogs during the term, but specified number of hogs will be delivered in total during each quarter of each year of the term. Any change to the weekly delivery requirement will be mutually agreed up by the parties.
• Producer’s delivery of the required quantities of hogs to packer set forth in specified paragraph above is an essential part of this agreement, and producer’s failure to supply at least 95% of the required quantities of hogs in any quarter may constitute a default hereunder. Packer may in its sole and absolute discretion assess a $5.00 per head deficiency fee for the number of hogs falling below 95% of the required quantities.
• Subject to specified section above, packer shall purchase from producer, and producer shall sell to packer, the following quantity of hogs produced by producer at the base price subject to any premiums or discounts in accordance with the carcass merit program: Number of hogs/year: specified number.
• Subject to the potential increases as provided herein, the parties agree that producer will supply and packer will purchase on a monthly basis a specified number of hogs (defined in specified section) per day during the term.
• Subject to the potential increases or limitations provided herein, the parties agree that producer will supply and packer will purchase an annual minimum of a specified number of hogs during each year of the term.
• Subject to the provisions of specified section, in no event will less than a specified number of hogs be delivered by producer and purchased by packer under this agreement on an annual basis (the number of hogs will be prorated for any partial year within the term).
• Such daily estimate shall include, and specifically identify the number of, excess hogs to be delivered.
• The minimum number of pounds deliverable at one time shall be 20,000 pounds carcass weight, unless a lesser amount is consented to by packer.
• The Producer will sell market hog production to John Morrell that will equal _____ hogs (plus or minus 10%), evenly distributed with a volume of ______ - hogs bl-weekly. Morrell shall have the right of first refusal on any additional volume.
• The undersigned hereby certifies that the following represents his/its good faith projections concerning its annual projected total production of hogs during the periods set forth below.
• Total contracted production means, with respect to any period, the number of hogs that producer shall deliver to packer, as set forth on producer’s projection certificate.
• Total hog quantities for the first and fourth calendar quarters cannot exceed total hog quantities for the second and third calendar quarters over the term of the agreement.
• Total production means all hogs produced by producer and all hogs produced by other producers under producer's direction or control.
• Upon receipt of certification, and subject to the terms and conditions of specified section above, producer agrees to deliver, so long as it remains certified, no less than 50% of its weekly estimated hog deliveries, up to a maximum of a specified number of hogs per week, to specified location which is packer's plant that participates in the above-referenced certification program.
• Upon receipt of this notice, packer and produce will enter into negotiations for the sale of hogs from additional expansion under this agreement or another form of agreement. If the parties cannot mutually agree within 60 days to either (i) add the hogs from additional expansion under the terms of this agreement; or (ii) to purchase and sell the hogs from additional expansion under terms and conditions of another agreement, producer is free to negotiate with third parties for the sale and purchase of the hogs from such planned additional expansion.
• Volume on this contract is for every six (6) months.
• Weekly projected total production means with respect to any delivery week in any period, the annual projected total production for such period divided by the number of whole delivery weeks in such period.

Authority to Enter Agreement

• Each of the parties to this agreement represents that it has full authority to enter into and perform all of its obligations under this agreement and to bind such party to the terms hereof.
• 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.
• Producer represents and warrants that producer has taken all necessary action to duly authorize the execution, delivery and performance of this agreement. The individual signing this agreement on behalf of producer certifies that he/she is duly authorized to execute this agreement on behalf of producer.

Clear Title

• Producer represents and warrants that it has good and marketable title to all hogs delivered to packer hereunder and will provide to packer prior to delivery of the hogs to packer, the names and addresses of any person, corporation, partnership, or other entity which has a lien interest in or on the hogs, or, in the alternative, a lien release executed by such lien holder.
• Producer represents to packer that all hogs delivered under this agreement are free and clear of all security interests and liens of any kind whatsoever, except as specifically provided in a written notice received by packer at least thirty (30) days prior to delivery.
• Producer represents to packer that all hogs sold under this agreement are free and clear of all security interests and liens of any kind whatsoever except as specifically provided in a written notice received by packer at least thirty (30) days prior to delivery. If hogs sold under this agreement are subject to any security interest or lien, packer may make payments jointly to producer and the secured party or lien holder.
• Producer warrants that it or its affiliates have good and marketable title to all hogs delivered to packer hereunder.
• Producer warrants that producer has good and marketable title to all hogs delivered to the specified location and to provide to packer, prior to delivery of the hogs to packer, the names and addresses of any person, corporation, partnership, or other entity which has a lien interest in or on the hogs, or in the alternative, a lien release executed by such lien holder.

Confidentiality

• All information provided by either party to the other under this agreement, as well as the terms of this agreement and all information learned or acquired by either party concerning the other party under this agreement, before or during the term of this agreement, shall be deemed confidential information. Producer and packer agree that they will not disclose, without the prior written consent of the other party, any of such confidential information to any third parties other than for purposes of furthering performance hereunder, and that they will use such confidential information only for the consummation of the transactions contemplated by this agreement. In the event of termination of this agreement, all confidential information shall, upon request, be returned to the owner thereof and the other party hereto shall keep confidential all confidential information otherwise furnished to it unless such information is otherwise ascertainable from public or published information or trade sources.
• Except as may be required by law, the parties shall keep this agreement confidential and will not share information regarding the same except with those lenders, employees, agents and representatives who have reasonable need to know of or have access to this agreement or information related thereto.
• Neither producer or packer nor their respective agents shall disclose the terms or conditions of this agreement to any other person or entity unless a written waiver permitting the release of information is signed in advance by each of the parties hereto.
• The parties acknowledge and agree that in connection with the negotiations of this agreement and during the performance of this agreement (including, without limitation, the twelve month period after the term), each party has or may be furnishing the other party with certain financial, production and other information which is either non-public, confidential or proprietary in nature. Each party's confidential information (including, without limitation, information shared under specified section) will be kept confidential by the other party and shall not, without prior written consent, be disclosed by the other party to any other person or entity or be used by the other party for any purpose other than in connection with this agreement. Notwithstanding the above, nothing in this agreement shall be intended to prohibit a party from (i) reporting the volumes and the prices paid or received for hogs delivered under this agreement, (ii) providing a copy of this agreement to such party's attorneys, auditors, consultants, lenders; or to appropriate governmental agencies and third parties, or (iii) providing confidential information to such party's attorneys, auditors, consultants, lenders; or any appropriate governmental agency (as required by law) as long as the non-disclosing party receives advance notice of such disclosure and such third party is aware of the proprietary nature of the confidential information and appropriate steps are taken to protect such confidential information from inappropriate disclosure.
• The parties hereto agree that the existence and terms and conditions of this agreement are confidential and neither party shall disclose to any entity or person not a party to this agreement, the existence of the terms and conditions of this agreement; provided, however, that nothing herein shall prohibit packer from disclosing such information to its parent company, subsidiaries, or other affiliated companies.
• The term Confidential Information shall not include information which (i) is or becomes generally available to the public, through no fault of the other party; (ii) is or becomes known or available to the other party on a non-confidential basis and not in contravention of applicable law from any third-party source; or (iii) the other party is ordered or required to disclose by any applicable law or competent judicial, governmental or other authority.

Facilities

• All hogs delivered hereunder from time to time must be uniform in size and numbers, and must be derived from such approved facilities and sources.
• During the term of this agreement, producer shall not sell, abandon or otherwise dispose of any of the facilities, except that producer may pledge or mortgage the facilities to a bona fide third party lender.
• Grant packer employees the right of inspection to verify that production conditions are being met.
• Hogs shall be derived from approved farrowing facilities and/or approved sources of weaner and feeder pigs and finished by producer in producer's finishing facilities.
• Hogs shall be produced solely from producer's sow herd located at the facilities, and such pigs shall be finished into hogs solely at the designated production facilities.
• In addition, each party agrees to allow the other or its designees reasonable access to its production/processing facilities so as to verify a party's performance hereunder and provided that such inspection is made after reasonable prior notice and that such inspection does not unnecessarily interfere with the production/processing operations of the parties.
• Location means packer's slaughter facility or facilities located at specified location.
• Packer agrees to allow producer (upon adequate prior notification) to follow its hogs through the kill, scaling, and carcass evaluation processes, subject to packer's standard plant safety procedures.
• Packer facilities are available for health checks by producer's designated veterinarian.
• Packer shall include all operations (except operations manufacturing products discussed above that are excluded from net revenues) at packer plants located at specified locations. Pork processing facilities may be added or removed when purchased, sold, leased, contracted or closed at packer's sole discretion.
• Packer will permit producer a reasonable number of scheduled visits to packer's plants during normal operating hours to observe the handling and processing of the hogs delivered under this agreement so long as prior notice is given to packer, and provided that such visits do not unreasonably interfere with the operation of such facilities.
• Producer agrees to allow packer to inspect producer hogs and facilities during normal business hours on reasonable notice to producer.
• Producer agrees to discuss with packer any changes in producer's production facilities for hog production, and will use reasonable efforts to select new production facilities near packer facilities that need additional volumes.
• Producer agrees to grant packer employees the right of inspection to verify that production conditions are being met. This shall in no way give packer employees the right to enter producer property without proper notification and then only upon compliance with all producer health and safety requirements.
• Packer will permit producer scheduled visits to packer's processing facility during normal operating hours to observe the handling and processing of the hogs delivered under this agreement. Producer shall provide prior notice to packer, who will periodically schedule such visits so as to ensure they do not unreasonably interfere with the operation of packer's processing facility. Producer shall not be allowed to photograph, make drawings of or otherwise remove any information from the facility without the prior written permission of packer or its designated representative. No other person shall accompany producer unless producer receives prior approval of packer or its designated representative.
• Producer currently owns and operates quality hog production facilities, the locations of which are set forth below (the lands encompassed by such sites, together with equipment and structures used exclusively in connection therewith being hereinafter referred to as the facilities), from which producer shall produce market hogs to be delivered and sold to packer.
• Producer owns, operates, or has under agreement (which agreements are and shall be in writing and materially consistent with producer's currently existing production management agreement practices) hog production facilities in the specific location together with equipment and structures used in connection therewith from which producer shall produce market hogs to be delivered and sold to packer (the facilities), and which packer agrees to purchase in accordance with the terms hereof. Annually, producer will provide a list of the Facilities at which market hogs to be delivered to packer will be produced and will promptly notify packer of any material change in the control of the Facilities. A list of producer's current Facilities is set forth on an exhibit attached hereto.
• Producer shall maintain packer-approved facilities to finish year-round the hogs to be delivered hereunder.
• Producer shall permit packer a reasonable number of scheduled visits to the facilities from which the hogs are produced, during normal operating hours to observe and monitor production and quality so long as prior notice is given to producer, and provided that such visits do not unreasonably interfere with the operation of such facilities.
• Producer will periodically allow packer's employees in the facilities to observe the production of hogs, and to verify producer's performance of its obligations hereunder, so long as prior notice is given to producer and provided that such operations do not unnecessarily interfere with the operation of the facilities.
• Producer will permit packer a reasonable number of scheduled visits to producer production facilities during normal operating hours to observe handling and production processes so long as prior notice is given to producer, and provided that such visits do not unreasonably interfere with the operation of such facilities.
• To further maintain the highest health standards via proper ventilation for the hogs prior to delivery, good vermin control, thorough cleaning and disinfecting, limited access for visitors, and necessary and documented immunizations.
• To raise hogs in facilities that meet the current accepted standards for raising improved genetic animals under nutrition and management programs for maximization of quality lean meat.
• Upon reasonable notice and compliance with reasonable biosecurity requests of producer, packer, and/or it’s representatives shall have the right to inspect the facilities and records to confirm and verify that producer is fulfilling producer’s responsibilities of meeting packer’s process verification standards and all applicable health and feeding programs or other production criteria. Producer agrees to provide all supporting records and documentation upon request by packer.
• Producer facilities shall mean those facilities that are total confinement facilities that are owned or managed by producer, or which are raising contracted hogs for producer.
• Producer feeds hogs at its own facilities and has hogs custom fed by other producers.
• Producer must have facilities to farrow and finish hogs year round and/or sources of weaner and feeder pigs.
• Producer must have packer's approved facilities to farrow and finish hogs year round and/or packer's approved sources of weaner and feeder pigs.
• Producer owns, operates, or has under contract, hog production facilities in specified locations.
• Producer raises hogs on its own facilities and/or on facilities owned by others under agreement with producer, and has been recommended by facilitator to enter into this agreement.
• Producer raises hogs on its own facilities and/or on facilities owned by others under agreement with producer.

Financial Soundness

• Producer grants packer a security interest in all of producer's real and personal property, including but not limited to equipment and fixtures, accounts, goods, general intangibles, instruments, inventory of hogs, feed, farm products, chattel paper and documents, and the proceeds from the sale of any such property, (collectively referred to as the collateral) to secure the payment or performance of all of producer's obligations under this agreement.
• Producer must at all times be able to demonstrate its financial soundness and production capabilities to packer and to provide evidence thereof upon the request of packer. Producer must provide packer audited financials on an annual basis so that packer may verify the financial soundness of producer.
• Producer shall maintain, at all times, its financial condition so that it meets or exceeds producer's financial condition as set forth in producer's application for this agreement.
• Producer shall provide to packer on or before January 31 of each year of the term of this agreement, financial information with respect to producer, including producer's balance sheet and all supporting schedules thereto, showing producer's net worth and all components of such net worth.
• Producer shall provide to packer, within 30 days of packer's request, a cash flow statement and balance sheet. Such financial statements shall be current through the date of packer's request. Producer warrants that all such books and records shall be accurate, true and correct.
• Producer will execute a mortgage, UCC-1 financing statement or other documents required by packer, and producer will pay all costs associated with filing said documents with the appropriate authorities.
• Producer will maintain annual cash flow statements, annual balance sheets and its annual income tax return. Producer will allow packer, during producer's regular business hours, to review and copy such books and records.
• Producer will maintain books and records to document and verify the performance if its obligations hereunder, and such books and records shall be in a format reasonably specified by packer. Such books and records shall include, but not be limited to, production records and such records as reasonably requested by packer. In addition producer will maintain annual cash flow statements, annual balance sheets and its annual income tax return. Producer will allow packer, during producer's regular business hours, to review and copy such books and records. Further, producer will provide packer with an annual cash flow statement and an annual balance sheet on or before January 31st of each year, and with a copy of its annual tax return, within 30 days after the filing of such return. In addition, producer shall provide to packer, within 30 days of packer's request, a cash flow statement and balance sheet. Such financial statements shall be current through the date of packer's request. Producer warrants that all such books and records shall be accurate, true and correct.
• Producer will provide packer with an annual cash flow statement and an annual balance sheet, on or before specified date of each year, and with a copy of its annual tax return, within 30 days after the filing of such return.
• Producer will provide packer with its certified annual audit or other similar statement within 180 days after the close of producer's fiscal year. Packer will provide producer with a statement, certified by packer's President or Chief Financial Officer, within 180 days after the close of packer's fiscal year, certifying that packer has equity of at least $X and annual sales of at least $X.
• Provide, upon packer's request, a copy of producer's financial statements (including, but not limited to, balance sheet, income statement, and statement of cash flows), as well as other financial statements prepared by or for producer in the normal course of producer's business.
• Any excess quantities of hogs accepted by packer will not compensate for prior or future deficit monthly or quarterly quantities.
• If packer has reasonable concerns about producer's ability to repay its debt obligations, the parties will discuss packer's concerns and the parties will use reasonable good faith efforts to reach a mutual agreement on how to address packer's concerns and reduce packer's financial risk and exposure.
• If producer wants to review the underlying packer business records used to determine packer's production cost and sales revenue (as such terms are defined in schedules and which are used to determine producer revenue) the parties will enter into appropriate agreements to protect such information from packer's competitors and third parties who have no reasonable need to know such information.
• In the event that a party had reasonable grounds to believe that the other party's ability to perform under this agreement is impaired, then such party may in writing demand from the other party adequate assurance of due performance, and such party may suspend its performance under this agreement, if commercially reasonable to do so, until such adequate assurance is provided by the other party.
• In the event that packer has reasonable grounds to believe that producer's ability to perform under this agreement is impaired then packer may in writing demand from producer adequate assurance of due performance, and packer may suspend its performance under this agreement, if commercially reasonable to do so, until such adequate assurance is provided by producer.
• Packer has provided producer certain documentation demonstrating the calculation of packer's production cost and sales revenue by letter dated specified date, and if packer makes a change in its accounting practices after the date of this agreement, which change has a material affect on the calculation of packer's production cost or sales revenue, packer will notify producer of the change and the parties will discuss whether any appropriate adjustments need to be made to the calculation of packer production costs or sales revenue to take such affect into account.
• Producer agrees to demonstrate producer's financial soundness to packer at all times and provide packer evidence thereof upon packer's request, and to provide packer written notice of any default by producer under any loan agreement with producer's lenders, regardless of whether such default is declared by the lenders.

Force Majeure

• As set forth in specified section, producer shall not be relieved of its obligation to deliver and sell hogs to packer, in the quantity set forth above, for any reason that does not constitute a Force Majeure event. If any event occurs, which may possibly affect producer's obligation to deliver and sell hogs in the quantity set forth above and which is not a Force Majeure event, then producer shall give packer prompt written notice describing such event and producer's plan to remedy such event. In addition, any failure of producer to deliver and sell hogs to packer, in the fiscal year quantity set forth above, shall be a material default under this agreement.
• Either party to this agreement shall be relieved of its responsibilities and obligations hereunder when performance becomes commercially impossible because of reasons beyond the party's reasonable control including, but not limited to, fire, explosion, strike, riot, accident, governmental regulations, intervention, or acts of God, and with respect to packer, when performance is not commercially reasonable due to reduction of packer's slaughter capacity. In the even industry-wide developments occur that are beyond the control of the parties, the parties agree to negotiate in good faith a mutually acceptable strategy to address such developments.
• If an event of Force Majeure occurs and continues for a period longer than six (6) months, the party not claiming the event of Force Majeure may notify the other party in writing that it wishes to terminate this agreement, and such termination will be effective upon receipt of the written notice. Notwithstanding the above, if packer has claimed an event of Force Majeure but has been able to schedule deliveries of hogs under this agreement to other packer facilities, and packer has paid any incremental shipping charges, producer will not have the option to terminate this agreement. Similarly, if producer has claimed an event of Force Majeure but has been able to schedule deliveries of hogs by the purchase of substitute hogs from other sources, which substitute hogs meet the quality criteria specified in specified section, packer will not have the option to terminate this agreement.
• In the event either party is prevented from performing its obligations under this agreement by circumstances beyond its reasonable control including, without limitation, fire, explosion, flood, acts of God, war and other hostilities, or like events (Force Majeure events), the obligations of such party under this agreement shall be suspended for the period of the Force Majeure event. If the period of the Force Majeure event is extended for more than thirty (30) days, either party may terminate this agreement without further obligation to the other except as already incurred. In the event that packer determines, in its sole discretion and for any reason, that its operations at the locations shall be suspended, significantly curtailed or permanently discontinued as a result of a Force Majeure event, then packer shall have the option to terminate this agreement by giving producer sixty (60) days notice thereof, without further obligation to producer except as already incurred hereunder.
• Neither party shall 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, 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.
• Neither party shall be liable for damages due to delay or failure to perform any obligation under this agreement if such delay or failure results directly or indirectly from acts of war, civil commotions, riots, strikes, lockouts, acts of any government or governmental authority, interference in telephone communications, fire, flood, windstorms, or other acts of God, or any cause of a like or different kind beyond the reasonable control of such party.
• Neither party shall be liable for failure to perform or delay in performing any act hereunder if such performance is rendered impossible by reason of matters beyond the reasonable control of the party, including but not limited to acts of God, strikes, lockouts, picketing, wars. blockades, riots, disease, epidemics, fire, storms, floods or explosion. These actions shall include but not be Iimited to a failure to settle or prevent any strike or controversy with employees or with anyone purporting or seeking to represent employees shall be considered a matter beyond the reasonable control of the party affected under this subsection, provided such strike affects such party's performance of the requireinents of this agreement, or any inability of producer to supply hogs due to an outbreak of disease; a market disruption due to a contagious disease such as foot and mouth; or governmental action limiting or stopping production.
• Neither party shall be liable for failure to perform or delay in performing any act hereunder if such performance is rendered impossible by reason or matters beyond the reasonable control of the party, including but not limited to acts of God, government intervention or regulation, strikes, fire, storms, floods or explosion. If producer has used management practices at its productions facilities that equal or exceed reasonable industry standards, an interruption of production at a producer production facility due to disease or health problems shall be considered a matter beyond the reasonable control of producer.
• Neither party shall be liable for failure to perform or delay in performing any net hereunder if such performance is rendered impossible by reason or matters beyond the reasonable control of the party, including but not limited to acts of God, governmental action, strikes, lockouts, picketing, wars, blockades; riots, disease, epidemics, fire, storms, floods, explosion or producer's death or permanent disability (if an individual). A failure to settle or prevent any strike or controversy with employees or with anyone purporting or seeking to represent employees shall be considered a matter beyond the reasonable control of the party affected under this subsection, provided such strike affects said party's performance of the requirements of this agreement. The inability of a party to receive financing shall not be considered a matter beyond that party's reasonable control, and will not be a Force Majeure event pursuant to this agreement. Once performance becomes commercially possible, the responsibilities and obligations of the parties shall resume again with full force and effect. Packer agrees if a Force Majeure event affects its plants specified for delivery it will use reasonable efforts to assist producer in rescheduling the hogs at other packer plants.
• Once performance becomes commercially possible, the responsibilities and obligations of the parties shall resume again with full force and effect. Where either party claims an excuse for non-performance under this section, it shall give prompt telephonic notice promptly confirmed by written notice of the occurrence and estimated duration of the Force Majeure event to the other party and it shall give prompt written notice when the Force Majeure event has been remedied and performance can re-commence hereunder. Packer agrees that if it claims an event of Force Majeure, it will use its commercially reasonable best efforts to shift the processing of producer hogs to packer processing plants not affected by the Force Majeure event or to assist producer in finding other packers of hogs. Producer agrees that if it claims an event of Force Majeure, it will use its commercially reasonable best efforts to assist packer in finding other supplies of hogs.
• Producer shall, either wholly or partially, be relieved of its obligations hereunder during any period of time when performance becomes commercially impossible because of reasons beyond its control involving fire, explosion, strike, war, riot, final governmental regulations or intervention (specifically including any governmental intervention which mandates herd liquidation due to pseudorabies), and acts of God (each a Force Majeure event). Similarly, packer shall, either wholly or partially, be relieved of its obligations hereunder during any period of time when performance becomes commercially impossible because of a Force Majeure event involving its facilities. Market conditions are specifically excluded from this provision. Also, hog health (e.g., PRRS, pneumonia, pseudorabies where herd liquidation is not government mandated, etc.) or management problems that may impact the production of the hogs are specifically excluded from this provision. Once performance becomes commercially possible, the responsibilities and obligations of the parties shall resume again with full force and effect. Where either party claims an excuse for nonperformance under this section, it must give prompt telephonic notice, promptly confirmed by written notice, of the occurrence and estimated duration of the Force Majeure event to the other party; and shall give prompt written notice when the Force Majeure event has been remedied and performance can recommence hereunder.

Indemnity

• Each of the parties hereto agrees to indemnify and hold the other party harmless from and against any and all loss, cost, liability, damage or expense, including, without limitation, reasonable attorneys fees and disbursements, including fees and costs of experts, caused or arising from, or in connection with, any breach by such party of any obligation arising under this agreement.
• Each party covenants that it will indemnify, hold and save harmless the other from and against any and all loss, cost, liability, damage or expense, including, without limitation, reasonable attorneys' fees and disbursements, caused by or arising from or in connection with the indemnifying party's construction or operation of its facilities, or any act, breach or omission hereof, including, without limitation, any injury or death of persons or damage to property caused by or arising therefrom.
• Each party shall indemnify and hold each other harmless from and against all losses, liability and expenses arising from damage to property or the injury or death of any person, when such injury or damage arises out of or in connection with either party's performance of this agreement; provided, however, that both packer and producer shall not be responsible for injury or damage caused by the sole negligence or misconduct of the other party.
• Packer and producer agree during the term hereof to maintain adequate public liability and other insurance with reputable insurance companies and, producer further agrees upon request, to furnish packer with certificates of insurance properly executed by its insurers evidencing such fact, and requiring the insurers to give at least thirty (30) days notice to packer in the event of cancellation or material alteration of such coverage. The minimum insurance coverage to be maintained by producer shall be as follows.
• Packer covenants that it will indemnify, hold and save producer harmless from and against any and all loss, cost, liability, damage or expense, including, without limitation, reasonable attorneys' fees and disbursements, caused by or arising from, or in connection with, any act, breach or omission of packer in connection herewith including any injury or death of persons or damage to property caused by or arising therefrom.
• Producer agrees during the term hereof to maintain adequate public liability and other insurance with reputable insurance companies as hereinafter set forth and, upon request, to furnish packer with certificates of insurance properly executed by its insurers evidencing such a fact, and requiring the insurers to give at least thirty (30) days notice to packer in the event of cancellation or material alteration of such coverage. The minimum insurance coverage to be maintained by producer shall be as follows.
• Producer further agrees to protect, defend, indemnify and hold packer harmless from and against any and all claims, actions, liabilities, losses, costs and expenses, including reasonable attorneys fees and costs, arising out of any actual or alleged claim brought by the owner or operator of any such producer production facilities or any third parry claiming an interest in the hogs delivered from such producer production facilities.
• Producer shall have the right to sell any hogs rejected by packer in any reasonable manner, but packer shall not be obligated to indemnify producer for any losses pursuant to this section with respect to any rejected hogs which producer has not sold within ten (10) working days after the date packer refused to accept delivery of such hogs. Notwithstanding anything to the contrary herein, producer losses shall not include any incidental, special, punitive, exemplary, or consequential damages of any kind whatsoever.
• Packer shall be named as an additional insured. An umbrella or excess liability policy may be utilized to attain the required limits of insurance. The insurance required above shall reflect that such coverages are primary with respect to other insurance carried by packer.
• Producer will carry worker's compensation and employer's liability insurance in accordance with the statutory requirements of the state where producer conducts is operation.
• Such coverage to be written on an occurrence form, affording minimum single limit protection of no less than two million dollars ($2,000,000) per occurrence and with deductibles no greater than one hundred thousand dollars ($100,000) per occurrence.
• With respect to such claims, packer shall be named as an additional insured on producer's insurance policies.
• Each party shall 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 shall include without limitation reasonable attorneys’ fees.
• In no event shall producer be entitled to any compensation or indemnification from packer or its successors for losses or damages incurred by producer as a result of the temporary or permanent closure of a packer facility.
• Liability insurance covering personal injury and property damage sustained by other third parties, from accidents arising out of producer's premises, products, completed operations, contractual liability, or the use of owned or non-owned automobiles.

Length/Term of Agreement

• 6-month increments with 6-month notice to cancel
• Agreement shall start specified date.
• Agreement year means the twelve (12) month period commencing on the commencement date and on each anniversary of the commencement date thereafter.
• Calendar quarter means the four 3-month periods in each calendar year commencing on January 1, April 1, July 1 and October 1.
• Contract may be terminated with one day notification by packer or producer.
• If a written notice of termination is not delivered within the first three days of the execution of this agreement the term of this agreement shall begin on specified date, and shall end 36 months after either party to this agreement has given the other party a written notice of termination unless terminated earlier pursuant to the provisions of this agreement.
• Initial term of the agreement shall be a specified number of years.
• Initial term of the agreement shall be one year. Written notification with desire to terminate may be given by either party three months prior to contract expiration. If notification to terminate is not received, an autumatic year renewal will apply.
• Initial term of the agreement shall be specified perioid. Written notification with desire to terminate may be given by producer thee months prior to contract expiration. If notitication to terminate is not received, a one year extension with pricing provisions as described below will apply.
• No pre-determined length. Must give verbal notice to cancel.
• Packer and producer agree to an agreement period of specified time starting with the first delivery of hogs.
• Specified time period
• Term means the period of time during which the agreement shall remain in effect, as specified in specified sections agreement.
• The initial term of this agreement commences on the effective date set forth above and expires on specified date.
• The initial term of this agreement is specified time commencing on producer's first delivery of specified hogs. Packer will send producer a written notice of the commencement date.
• The term of this Agreement is three (3) years. Either party may extend the initial or my subsequent term of ths agreement by providing written notice to the other party no later than six (6) months before the expiration of the initial or any extended term of this agreement. Any extension of the term of this agreement shall be for a one year period. There may be successive exatensions.
• The term of this agreement shall be a period of commencing on specified date and ending on specified date, subject to the renewal provisions set forth in specified Section, the termination provisions in specified Section and unless earlier terminated in accordance with the provisions hereof.
• The term of this agreement shall be a period of specified time commencing on specified date and ending on specified date, subject to the renewal provisions set forth in specified section, and the terms of specified section.
• The term of this agreement shall be for a specific period and shall begin on specific date and end on specific date. This agreement will automatically renew for an additional one year period at the original termination date and at the end of each subsequent termination date unless and until either party provides written notice to the other of termination no less than six (6) months prior to the expiration date of the then-current term.
• The term of this agreement shall begin on specified date, and shall end 48 months after either party to this agreement has given the other party a written notice of termination.
• The term of this agreement shall commence for all hogs delivered after specified date and shall end five (5) years after one party delivers to the other party a written notice of termination.
• The term of this agreement shall commence on specified date and shall end, pursuant to the provisions of specified section occurring on specified date unless terminated earlier pursuant to specified sections of this agreement.
• This agreement shall be in effect for an initial term of 24 months beginning specified date and shall continue until either party provides written notice of termination. Notwithstanding the foregoing, written notice of termination may not be given by either party before specified date, whereafter it may be given at any time. Upon such written termination notice, producer shall continue to deliver and packer shall continue to accept hogs as provided herein for a period of 12 months, and at the end of said 12 month period, the agreement shall terminate with no further action by either party.
• This agreement shall be specified term and shall commence on specified date and expire on specified date.
• This agreement shall commence on specified date and expire on specified date.
• This agreement shall commence on specified date and expire on specified date. Twenty-four months (24) months prior to the expiration of the initial term, packer and producer agree to review the terms of this agreement as well as the performance of both parties in regard to the requirements herein with the objective of renewing or renegotiating this agreement for an additional two (2) years (renewal term); provided, however, that neither party shall be obligated to renew or renegotiate this agreement except as otherwise set forth herein.
• This agreement shall commence on specified date and shall continue indefinitely thereafter until either party gives written notice of their intent to terminate. The agreement shall terminate 6 months after receipt of such notice by the non-terminating party.
• This agreement shall commence on the date first above written and shall continue for four (4) years from such date unless sooner terminated in accordance with the terms hereof.
• This agreement shall commence on the date first above written and shall continue for four (4) years from such date, unless sooner terminated in accordance with the terms hereof, unless sooner terminated, or is extended, in accordance with the terms hereof. After the third anniversary date of this agreement, the term of this agreement shall be automatically extended for one (1) year on each anniversary date thereafter, unless either packer or producer shall, upon written notice by either to the other given prior to the date which is six months before any such anniversary date, elect not to extend the term of this agreement, in which event this agreement shall terminate at the end of the original four (4) year term or the date to which such term has been automatically extended pursuant hereto, whichever is longer.
• This agreement shall commence specified date and shall continue for six (6) months, and then indefinitely thereafter until either party gives written notice of their intent to terminate. The agreement shall terminate 6 months after receipt of such notice by the non-terminating party. The first date such termination notice may be given by either party is specified date.
• This is an interim agreement.
• Verbal for specified time through specified date
• Expires on specified date.
• From the date hereof, this agreement shall continue and remain in full force and effect during the term set forth on specified schedule hereto, unless otherwise extended by the parties hereto or unless terminated in accordance with the terms hereof.

Notice

• All notices required or permitted to be given hereunder, unless otherwise specified, shall be in writing and shall be deemed properly given when delivered in person to the party to be notified, or when sent by courier service, costs prepaid, or when sent by fax (with a copy by regular mail), to the party to be notified, at its address set forth below, or such other address within the continental United States of America as the party to be notified may have designated prior thereto by written notice to the other.
• All notices required to be given hereunder (except routine weekly hog delivery intention notices) shall be in writing and shall be sent by postage prepaid, certified or registered mail to the addresses as given herein below.
• All notices, requests, demands and other communications hereunder shall be deemed to be duly given if delivered by hand, overnight courier, facsimile, or if mailed by certified or registered mail with postage prepaid as specified in this agreement.
• All notices, requests, demands and other communications hereunder shall be deemed to be duty given if delivered by hand or if mailed by certified or registered mail, postage prepaid, at the notice addresses set forth above.

Other Agreements Between Parties

• Any hogs delivered by producer under a specified agreement (also known as the CME forward contract) will be counted as part of producer's commitment in specified section. Producer will receive the forward contract price for hog deliveries under forward contracts instead of the base price pursuant to specified section.
• All of the hogs owned by producer pursuant to specified pricing program with which such program packer is familiar; provided, however, producer may market such hogs to another source if it gives packer one year's prior notice of its intent to do so and packer declines to meet or exceed the payment terms of such other source (packer will notify producer in writing if packer chooses to meet or exceed the other sources payment terms within 30 days of receipt of producer's written notice outlining the terms of the other sources offer).
• Before entering into an agreement with a third party, producer will provide packer the opportunity to match the terms offered by any third party (which terms producer will have the third party express in writing, a copy of which will be provided to packer) for the purchase of hogs from a producer expansion.
• Except as otherwise specifically discussed herein, this agreement and the exhibits and schedules attached hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersedes in all respects any and all prior oral or written agreements or understandings between them pertaining to the transactions contemplated by this agreement.
• For all hogs delivered under contracts placed by producer on the Chicago Mercantile Exchange, which contracts must be placed at least sixty (60) days prior to the month in which such hogs are delivered to packer by producer, the price shall be such contract price, with a zero (0) basis.
• Forward contract means the hog purchase confirmation and agreement used by packer from time to time.
• Hogs owned by producer's joint ventures will be committed to the extent acceptable to producer's joint venture partners. If a joint venture dissolves, and producer controls the hogs from the joint venture after the dissolution, the hogs will be delivered under the terms of this agreement.
• If a joint venture is dissolved, and producer will not control the hogs from the joint venture, producer will provide packer with prompt notice of the dissolution, and upon the dissolution, the obligations to deliver the hogs from such dissolved joint venture will cease.
• If packer does not have an additional need for all of producer's hogs under the other method, producer can deliver up to the number of hogs packer will accept under the other method, and the balance of the annual commitment will continue to be delivered under this agreement or specified pricing program.
• If producer desires to sell hogs pursuant to a forward contract, it shall execute a forward contract with packer.
• Nothing in this agreement shall modify the provisions of the extended agreement regarding the duration or termination of the extended term. In particular, producer retain the right to terminate the extended agreement by paying packer cash in an amount equal to the negative ledger balance under the extended agreement. Nothing in this agreement shall reduce producer's obligations to packer relating to a negative ledger balance under the extended agreement. The ledger balance under the extended agreement relating to hogs sold under the terms of this agreement shall be calculated using the specified price as the market value.
• Notwithstanding specified paragraph of this agreement to the contrary, the parties acknowledge and agree that producer has entered into a separate agreement with a third party obligating producer to produce and delivery approximately specified number of head annually to packer.
• Packer and facilitator have entered into a separate agreement for facilitator to provide certain services to packer and coordinate with producers regarding the procurement and supply of hogs for slaughter at packer's specified locations pork slaughter plants.
• Packer will provide a weekly or monthly forward pricing program to producer.
• Producer and packer understand that producer shall supply at least 50% of the required annual quantity of hogs to packer priced through contracts placed on the Chicago Mercantile Exchange. All such contracts must be in place no later than sixty (60) days prior to the month in which such hogs are delivered by producer to packer.
• Producer currently supplies hogs to packer pursuant to an agreement dated specified date, as amended which provides packer a dependable supply of hogs suitable for processing at packer's plants located in specified locations.
• Producer has approached packer and requested the prior agreement be replaced with this agreement for the processing of 100% of producer's hog production to address the concerns of producer's lenders regarding producer's marketing program.
• Producer represents and warrants to packer that it has, as of the date of this agreement, no formal, written outstanding rights, options or other contractual obligations which will prevent producer fiom delivering and selling its contracted production of hogs to packer. Producer will be marketing some pigs to other parties, but these pigs may also be used to fill obligation under this agreement.
• Producer shall sell hogs to packer on a day-to-day basis at the base price or pursuant to the terms of a forward contract. Packer will provide a forward pricing program to producer. If producer desires to sell hogs pursuant to a forward contract, it shall execute a forward contract with packer. Hogs that are not sold pursuant to the forward contract will be sold at the base price.
• Producer warrants that he has read and understand the agreement and acknowledges that this agreement and the exhibits hereto set forth the only agreement between packer and producer. This agreement supersedes any verbal or implied representation and can only be modified by written agreement signed by both parties.
• Producer warrants that it has read and understands the agreement and acknowledges that this agreement and the exhibits hereto set forth the only agreement between packer and producer. This agreement supersedes any verbal or implied representation and can only be modified by written agreement signed by both parties.
• Producer will have the ability during the agreement to utilize packer's forward contracting program.
• The parties agree that producer will be allowed to consider other packer procurement methods in existence so long as producer's hogs meet the program and quality specifications of the other method, and packer has additional needs for market hogs under the other method.
• The parties expressly agree that this agreement does not supersede or cancel the terms of the confidentiality agreement between the parties dated specified date regarding the assessment of this agreement.
• The provisions contained herein, and in any addendum hereto executed by the parties hereto, constitute all of the terms and conditions of this agreement and supersede any and all prior agreements and understandings, written or oral.
• The specified agreement currently has 3 and 1/2 years remaining on the initial term. Producer will provide packer 1 year notice of individual producer expiration dates.
• This agreement and any addenda hereto contains the entire understanding of the parties. This agreement may be modified or amended only upon the written agreement of all parties hereto.
• This agreement constitutes the entire agreement among the parties and supersedes any prior oral or written agreement or understanding between them with respect to the subject matter hereof.
• This agreement constitutes the entire agreement between producer and packer with respect to the subject matter of this agreement.
• This agreement constitutes the entire agreement between the parties and can be modified only in writing signed by all parties hereto.
• This agreement constitutes the entire agreement between the parties and supersedes any prior or contemporaneous oral or written agreement or understanding between them with respect to the subject matter hereof; provided, this agreement shall not affect any prior or future written agreement between producer and packer otherwise regarding hog procurement.
• This agreement contains the entire agreement between the parties and there are no oral promises, agreements, warranties, obligations, assurances, or conditions, expressed or implied, precedent or otherwise, affecting it.
• This agreement contains the entire understanding of the parties.
• This agreement contains the entire understanding of the parties. This agreement may be modified or amended only upon the written agreement of all parties hereto. This agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that producer shall not assign this agreement in whole or in part without the prior written consent of packer. Any attempted assignment in violation of this provision shall be void.
• This agreement may be amended or supplemented only in writing by you and us, and not by any course of dealing or prior performance.
• This agreement represents the entire agreement of the parties on the subject hereof and shall supersede all prior representations and agreements whether oral or in writing between the parties with respect to any of the matters mentioned in this agreement.
• This agreement supersedes any prior or contemporaneous oral or written agreement between producer and packer relating to the hog production operation supplying hogs under this agreement, including but not limited to the previous agreement, except as provided in specified paragraph.
• Upon receipt of this notice, packer and producer can either mutually agree to include the hogs from the expansion under this agreement, or if either of the parties does not wish to add such hogs to this agreement, packer and producer will enter into good faith negotiations for the sale of hogs from expansion under another form of mutually acceptable agreement.
• Upon the commencement date of the term, this agreement will replace the prior agreement, and any ledger account balance under the prior agreement will be transferred to this agreement and will be the initial ledger account balance under this agreement.
• Upon the effective date of this agreement, and the transfer of the ledger account balances, the parties will have no further obligations under the prior agreement.

Other Business Conditions

• Agreement provides commitment by packer to provide a base meat price formula for the time period of specified dates.
• All production decisions including but not limited to genetics, feed rations, health practices, agreement producer selection and management, and production processes will be made solely by producer.
• All specified program hogs are purchased on either a live or cwt basis or on a hot carcass merit basis and are plant delivered.
• At packer's sole discretion, packer may enroll producer in packer's insurance program.
• Before proceeding with a proposed program, producer will discuss the program with packer and the parties will discuss if the program is a reasonably viable program for producer; however, producer reserves the right to access segregated product from its hogs from any of packer plants for producer value added product.
• During the term hereof, packer shall purchase from producer and producer shall sell to packer hogs according to the schedule set forth herein. The purchase price shall be determined in accordance with the terms and conditions hereof.
• Each party has the sole right to conduct its operation as it sees fit, provided only that such conduct is not to be in conflict with any of the provisions of this agreement.
• Hog quantity must be written in appropriate blank and plant must be circled in specified paragraph for this agreement to be valid.
• No guarantor shall exercise any right of subrogation until after irrevocable payment in full in cash of all obligations.
• Nothing in this agreement requires producer to make a capital investment in buildings or equipment that cost $100,000 or more and have a useful life of five or more years.
• Notwithstanding any other provision of this agreement, at any time packer refuses delivery and/or fails to pay for hogs under this agreement, producer has the right to sell said hogs on the open market to a third party.
• Packer desires to secure and producer desires to provide a dependable supply of quality premium hogs suitable for use at such plant.
• If packer discontinues slaughtering hogs at the slaughter plants designated on the cover sheet of this agreement, then packer shall at packer's option (i) terminate this agreement by written notice to producer, or (ii) notify producer of the new designated slaughter plant to which producer must deliver hogs. Packer will pay producer for any additional freight costs incurred by such delivery pursuant to our then current standard livestock freight schedule.
• If the parties cannot mutually agree to purchase and sell the hogs from additional expansion under the terms and conditions of this agreement or another mutually agreed upon agreement, within sixty days of packer receiving producer's notice, producer is free to negotiate with third parties for the sale and purchase of the hogs from such planned additional expansion.
• In the event of a change in control of producer, then packer may, at packer's sole option, terminate this agreement on sixty (60) days written notice to producer. Change in control shall mean that producer and producer, jointly, shall own less that 51% of the common, preferred, or other stock, voting, or other ownership interest entitled to vote for and/or elect the directors of producer or an individual or entity other than producer or producer exercises more than 50% of the management or day to day operational control of producer.
• Neither party has any authority to enter into any agreements, assume any obligations, incur any liabilities, or make any warranties or representations on behalf of the other party. Neither party shall have any right to exercise control with respect to the management or affairs of the other party or share any ownership interest in the property of the other party.
• Neither producer nor packer shall have, nor shall either represent itself as having, any right, power or authority to create any agreement or obligations, either express or implied, on behalf of, in the name of, or binding upon the other party, or to pledge the other's credit or to extend credit in the other's name unless the other party shall provide advance written consent thereto.
• Notwithstanding the foregoing, prior to the imposition of the requirements of specified paragraph of this section, producer may, from time to time, purchase weaned/feeder hogs (replacement hogs) for placement in producer's hog production facilities which replacement hogs are of like quality to that of the remainder of producer's herd provided that producer gives packer written notice of said purchases, the estimated marketing dates for such replacement hogs, and the positive identification of each replacement hog sufficient to allow the packer to track the replacement hogs throughout processing.
• Packer has agreed to work with producer on programs producer develops in regards to adding value to the pork products derived from hogs.
• Packer is seeking high quality animals produced by skilled producers in facilities that enable packer to market high quality pork products that meet high meat quality, animal welfare, environmental, and food safety standards. Producer has access to the necessary land, capital, facilities, equipment, labor, feed, and genetics for the purposes of fulfilling producer's obligations under this agreement.
• Packer operates pork slaughter and packing plants.
• Packer owns and operates hog processing plants in specified locations.
• Packer, with its principal place of business in specified location, desires to obtain hogs from the undersigned producer who wishes to participate in a long-term commitment program.
• Producer acknowledges it has entered into this agreement on its own accord and has adequate time to consult with its attorney and accountant as producer has deemed necessary.
• Producer acknowledges it has entered into this agreement on its own accord and has adequate time to consult with its attorney, financial agents and accountants as producer has deemed necessary.
• Producer acknowledges it has entered into this agreement on its own accord and has adequate time to consult with its attorney, financial agents and accountants as producer has deemed necessary. Packer makes no representations, warranties or guarantees of the profitability of this agreement to producer. Producer acknowledges and agrees that the production of hog, and the sales of pork products is a speculative business and this agreement does not guarantee any profits to producer.
• Producer acknowledges that it has voluntarily entered into this agreement on its own accord and that it has had adequate opportunity, and has been encouraged by packer, to consult with its own attorney and accountant regarding all legal, accounting and tax consequences relating to this agreement.
• Producer acknowledges that its hog production system was in existence at the time this agreement was executed, that producer's existing production system is able to produce the number of hogs required under this agreement, and that packer has not required producer to make any investment in buildings, equipment or livestock under this agreement. If producer has made any such investments it has been at producer's choosing and is not a requirement of packer's under this agreement.
• Producer acknowledges that packer has not required producer to make any investment in buildings or equipment under this agreement. If producer has made any such investments it has been at producer's choosing and is not a requirement of packer under this agreement.
• Producer acknowledges that packer's payment of a specified pricing program as set forth in a paragraph is made in reliance upon producer’s promise to remain in packer's program and perform under this agreement for the entire term of the agreement.
• Producer agrees to comply with all legal requirements for the handling of livestock, and producer further agrees to meet the best management practices of the hogs industry for the handling of hog.
• Producer agrees to raise and supply to packer top quality, healthy and wholesome hogs.
• Producer agrees to sell and deliver, and packer agrees to purchase, producer's hogs.
• Producer and packer have negotiated this agreement to provide producer with revenues for hogs which is partially determined by the value of pork products.
• Producer believes there is potential for selling pork products from producer's hogs at a premium through various value-added programs (producer value added products), including the use of a specified marketing program.
• Producer desires to ship and sell its hogs that meet packer's specifications from its facilities to packer.
• Producer feeds hogs and/or has hogs contracted for production both in its own facilities and/or facilities owned by others, and producer is concerned about having a long-term arrangement with a packer for committed shackle space (i.e. a packer has adequate capacity to process producers market hogs). Packer as of the date of this agreement, owns and operates hog processing plants in specified locations, and packer wishes to buy producer's hogs and producer wishes to sell and deliver such hogs for processing at packer's facilities on the following terms and conditions.
• Producer further desires to amend the means by which the revenues it receives for its hogs are determined to reflect the value of pork products, and allows producer to reduce volatility in hog prices.
• Producer has approached packer and requested this agreement, which provides producer with revenues for market hogs determined by the value of pork products and allows producer to reduce volatility in hog prices.
• Producer has requested that packer process all of its market hogs and the revenue producer will receive will be based off of the sales value of pork products less packer's cost to process hogs and an agreed upon toll charge and in return, producer commits to supply packer with an increasing share of its hogs.
• Producer in conjunction with affiliated producer will deliver hogs to packer under the following specifications.
• Producer is in the business of raising hogs for sale and delivery to hog processing plants.
• Producer is solely responsible for the operation and management of producer's hog production operation.
• Producer must allow packer to review and approve the following aspects of producer's hog production operation at the commencement of this agreement and any changes producer makes to these aspects.
• Producer shall enroll in packer's insurance program.
• Producer shall not be subject to the control or direction of packer.
• Producer will permit packer a reasonable number of scheduled visits to producer facilities during normal operating hours to observe handling and production processes so long as prior notice is given to producer, and provided that such visits do not unreasonably interfere with the operation of such facilities including producer's bio-security measures.
• Producer will solely decide when hogs are ready for slaughter and will be eligible to be scheduled by the parties for delivery pursuant to this section.
• Producer wishes to provide packer a dependable supply of quality market hogs suitable for processing at packer's plants located in specified locations.
• Subject to packer's obligation to purchase, and producer's obligation to sell, the quantity of producer's hogs as provided at specified section above, packer and producer agree that.
• The parties agree to use good faith efforts to assist the other in reducing costs and creating efficient delivery and production schedules.
• The parties understand and agree that packer's decision to enter into this agreement was made in reliance on producer being the entity to deliver hogs to packer.
• The program is a mutual agreement between producer and packer to enter into a marketing program beneficial to each party's needs. The program is designed to develop a long-term relationship between producer and packer to create mutually satisfactory results. The program enables producer to concentrate valuable time to production of high quality hogs.
• This agreement provides the opportunity to establish a value managed relationship with packer, the packer known to be the lowest cost, highest volume producer of the highest quality pork product on the market today.
• This agreement shall be binding upon the parties, provided that this agreement shall not become effective unless packer shall provide producer with written notice within fourteen (14) days of the date first written above, that the senior management of packer parent company has approved this agreement. If packer does not provide such notice within fourteen (14) days of the date first written above, then this agreement shall be of no further force or effect on either party hereto.
• This agreement shall not be exclusive to producer, but instead may be offered by packer to other parties.

Profitability

• Neither party makes any warranties or representations, express or implied, as to the profitability of the other party's operation under the terms of this agreement.
• Packer makes no representations, warranties or guarantees of the profitability of this agreement to producer.
• Producer acknowledges and agrees that the production of hogs and the sales of pork products is a speculative business and this agreement does not guarantee any profits to producer.
• Producer acknowledges and agrees that the production of hogs is a speculative business and this agreement does not guarantee any profits to producer.
• 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) packer and packer's employees and agents make no representations or guarantees of any kind whatsoever regarding the consequences or profitability of this agreement to producer.
• Producer acknowledges that it has voluntarily entered into this agreement on its own accord, that packer has not in any way required producer to enter into this agreement as a condition of selling hogs to packer, and that packer and its agents make no representations or guarantees of any kind whatsoever regarding the profitability of this agreement to producer.

Records/Documentation

• Documentation necessary to calculate packer's sales revenue, packer's production cost and/or total producer production cost will be made available for review at the disclosing party's headquarters during normal business hours within ten (10) working days of a request by the other party to review the information and the execution of the above referenced agreement.
• If the producer becomes actively engaged in pork processing operations that compete with packer's, the parties agree that producer's review of packer records shall be conducted by a third party consultant/auditor who will conduct the review of packer's business records. It shall be the responsibility of the auditor, subject to the reasonable approval of packer, to create such protocols for disclosure of any information so reviewed so as to maintain confidentiality and ensure legal compliance during and after the review process. The parties specifically agree producer or the auditor will be allowed to share such information with producer's legal counsel, auditors and appropriate governmental agencies, so long as such parties agree the information will be held in confidence. Documentation necessary to calculate packer's sales revenue will be made available for producer's or auditor's review at packer's corporate headquarters during normal business hours as soon as reasonably available, but in no event more than ten (10) working days after producer's request and delivery on the above described protocol.
• In addition, producer may review the underlying packer business records used to perform a monthly calculation one time per year during the term of this agreement, and packer will produce such information subject to the confidentiality provisions set forth in specified section and such information will not be disclosed to packer's competitors and third parties who have no reasonable need to know such information.
• In witness whereof, the undersigned has executed and delivered this certificate this specified date.
• On the 15th day after the end of each packer fiscal month, packer shall provide to producer a summary showing packer revenue for such month, and any adjustments made pursuant to specified section.
• On the 15th day after the end of each packer fiscal month, packer shall provide to producer a summary showing producer revenue for such month.
• Packer agrees that the accounting used to determine packer's production costs and sales revenue on a monthly basis will be pursuant to Generally Accepted Accounting Principles (GAAP).
• Packer agrees to make available to producer the documentation of the carcass merit program sheets on the first working day following the of the hogs slaughter.
• Packer and producer further agree that during the first year commencing with producer's certification, the parties shall work together in good faith so as to discover the true value of Paylean. Neither party shall have any obligation to provide to the other party financial or production records as a part of this process.
• Packer has given producer a copy of packer's current carcass merit program.
• Packer shall determine and make payments to producer based upon each load of hogs delivered pursuant to this agreement and shall include all pricing and other relevant information in the kill sheets which shall be mailed to producer within two days of slaughter of the hogs delivered hereunder by packer.
• Packer shall keep all necessary records with respect to the receipt, weighing and payment of all hogs in accordance with its regular record retention and destruction schedule.
• Packer shall keep all necessary records with respect to the receipt, weighing and payment of all livestock hogs in accordance with its regular record retention and destruction schedule. At the present time, all scale tickets, profit and loss statements and checks are retained for two (2) years.
• Packer shall maintain data comparing the price paid by packer to producer under the terms of this agreement with the price as published for hogs (the data). Packer shall provide a copy of such data to producer quarterly. Should producer fail to deliver to producer the quantity of hogs required to be delivered under this agreement in any year of this agreement, then in addition to all other remedies available to producer under this agreement and under law. Producer shall pay to producer as a penalty for such non-delivery the total difference as shown in the data between the amounts paid to producer under this agreement and the specified price as published or $5.00 per head for each hog not delivered, whichever is greater.
• Packer shall note on producer's trucks bills of lading, and before said delivering trucks leaves packer's plant, of the number, if any, of the hogs arriving at packer's plant that are diseased, disabled, dead, or fail to conform to the weight specifications under this agreement.
• Packer shall supply copies of such records as producer may reasonably request at producer's expense.
• Packer will calculate any delivery shortage assessment and send producer a written statement of the delivery shortage assessment.
• Commitment by packer to provide a detailed carcass report to include comparative data to illustrate how producer carcasses compare with all other hogs purchased by packer.
• Copies of the processing or slaughter reports prepared by packer (kill sheets) for the hogs delivered under this agreement will be mailed to producer within two (2) days of the hogs slaughter by packer and shall contain information to show the calculation of the price for such hogs.
• Documentation necessary to calculate packer's production cost and/or sales revenue will be made available for producer's review at packer's corporate headquarters during normal business hours within ten (10) working days of producer's request and the execution of the above referenced agreement.
• Packer will keep all necessary records with respect to receipt, weighing and payment for all carcasses in accordance with packer's regular record retention and destruction schedule. Packer currently retains all profit and loss statements and checks for two years. Upon giving packer reasonable notice, producer may inspect such records relating to producer's hogs during normal business hours at locations designated by packer. Packer will supply at producer's expense copies of such records as producer reasonably request.
• Packer will supply at producer expense copies of such records as producer reasonably requests.
• Producer agrees to allow packer to inspect all of producer's production records relating to this agreement during normal business hours on reasonable notice to producer.
• Producer agrees to provide packer a complete set of producer's production information on an annual basis and at any time upon packer's request, and to complete any standard production reports that packer request.
• Producer agrees to provide packer on request reasonable information relating to producer's production management practices.
• Producer agrees to provide packer on request reasonable information relating to the production management practices of each of producers from whom it obtains hogs.
• Producer may inspect such records during the normal business hours at locations designated by packer on reasonable notice by producer to packer.
• Producer must demonstrate at all times the ability to produce hogs in the quantity and of the quality required during the term of this agreement.
• Producer must use a packer-approved cost and recordkeeping system.
• Producer will maintain a verifiable record-keeping system that will permit the verification of the location of the birth of each hog and the location in which each hog was raised. Producer will retain all such records for a period of two years or for such longer period as may be specified in regulations issued by the USDA, and will make such records available to packer upon request.
• Producer, or producer's auditor, will be provided with reasonable access to relevant records of packer which are necessary to audit the accuracy of payments made to producer (including premiums and discounts) hereunder during normal business hours so long as prior notice is given to packer, and provided that such visits do not unreasonably interfere with packer's corporate operations.
• Provide, upon packer's request, a statement of production efficiencies and future hog flow projections (including, but not limited to, sow herd size, conception rate, farrowing rate, nursery death loss, finisher death loss, average daily gain, and herd health history), as well as other production data prepared by or for producer during the normal course of producer's business.
• Subject to a section of the master agreement, producer shall work with affiliated producer to provide, upon packer's request, a statement of production efficiencies and future hog flow projections (including, but not limited to, sow herd size, conception rate, farrowing rate, and herd health history), as well as other production data prepared by or for producer during the normal course of producer's business.
• The cost of production schedule currently offered by packer is set forth in specified exhibit attached hereto.
• This certificate is one of the certificates referred to in the agreement dated as of specified date between packer and producer.
• Upon giving packer reasonable notice, producer may inspect such records during normal business hours at locations designated by packer.
• Willingness by packer to provide information over and above the standard kill sheet information as requested by producer, such as providing feedback to changes in management practices (i.e. genetics, feed rations, etc) that may affect carcass quality.

Relationship of Parties

• Certain hogs delivered under this agreement may be delivered from facilities that are owned by third parties. Producer agrees that packer has no relationship with the owners of such producer production facilities, and packer's only obligations are to purchase hogs from producer pursuant to the terms of this agreement.
• Packer and producer agree that the relationship between them is that of independent contractors. Nothing in this agreement shall constitute either producer or packer as agent, representative, partner, joint venturer or employee of the other party.
• Packer and producer agree that the relationship between them is that of independent contractors. Nothing in this agreement shall constitute either producer or packer as agent, representative, partner, joint venturer or employee of the other party. Neither producer nor packer shall have, nor shall either represent itself as having, any right, power or authority to create any agreement or obligations, either express or implied, on behalf of, in the name of, or binding upon the other party, or to pledge the other's credit or to extend credit in the other's name unless the other party shall provide advance written consent thereto.
• Packer and producer are each independent contractors and producer, its agents and employees shall not be construed to be employees of packer for any purpose whatsoever. This agreement does not constitute any form of joint venture. Each party has the sole right to conduct his operation as it sees fit, provided only that such conduct is not to be in conflict with any of the provisions of this agreement
• 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.
• This agreement does not constitute any form of joint venture.
• Packer and producer are each independent contractors and producer, its agents, and employees shall not be construed to be the employees of packer for any purpose whatsoever. This agreement does not constitute any form of joint venture. Each party has the sole right to conduct his operation as it sees fit provided only that such conduct is not to be in conflict with any of the provisions of this agreement.
• This agreement calls for the performance of duties by the parties as independent contractors. The parties do not intend to create a partnership or joint venture, and nothing contained in this agreement shall be construed to create a partnership or joint venture between the parties, or to authorize either party to act as agent for the other party.
• This agreement calls for the performance of duties by the parties as independent contractors. The parties do not intend to create a partnership or joint venture, and nothing contained in this agreement shall be construed to create a partnership or joint venture between the parties, or to authorize either party to act as agent for the other party. Neither party has any authority to enter into any contracts, assume any obligations, incur any liabilities, or make any warranties or representations on behalf of the other party. Neither party shall have any right to exercise control with respect to the management or affairs of the other party or share any ownership interest in the property of the other party.
• This agreement is a supply and pricing agreement packer and producer are each independent contractors and producer, its agents or employees, shall not be construed to be the employees of packer for any purpose whatsoever, nor does this agreement constitute any form of joint venture. Any compensation due producer under specified section above shall constitute the sole and entire payment due producer for its performance hereunder.

Review of Agreement or Renewal

• Either party may extend the initial or any subsequent term of this agreement by providing written notice to the other party no later than six (6) months before the expiration of the initial or any extended term of this agreement. Any extension of the term of this agreement shall be for a one year period. There may be successive extensions.
• Packer shall have the right to extend the term of this agreement or any subsequent term of this agreement by providing written notice to producer no later than one hundred eighty (180) days before the expiration of the initial or any extended term of this agreement. Any extension of the term of this agreement shall be for a one year period. Packer shall have the right to six (6) one year extensions of this agreement.
• The term of this agreement is not subject to renewal.
• Thereafter this agreement shall automatically renew for successive one (1) year renewal terms until terminated.
• This agreement may be amended or supplemented only in writing by producer and packer, and not by any course of dealing or prior performance.
• This agreement may be modified or amended only upon the written agreement of all parties hereto.
• This agreement may not be altered, modified or changed except by written document duly executed by the party against which enforcement is sought.
• This agreement shall automatically renew for successive six (6) month periods; subject however, to either packer or producer providing written notice to the other, within ninety (90) days after the beginning date of any such six month extension, that the Agreement shall terminate at the end of such six (6) month extension.
• This agreement shall automatically renew for successive six-month terms unless terminated by either party at the end of the initial term or any renewal term by providing the other party at least thirty (30) days prior written notice of such termination.
• This agreement supersedes any verbal or implied representation and can only be modified by written agreement signed by both parties.
• During any extensions of the term of this agreement, all the terms and provisions of this agreement shall apply.
• Except as amended herein, the remaining terms and conditions of the agreement shall remain in full force and effect during the term of the agreement, as herein amended.
• If notification to terminate is not received an automatic one (1) year renewal will apply. There may be consecutive one (1) year renewals.
• If notification to terminate is not received an automatic year renewal will apply.
• No changes or additions hereto shall be binding upon either party unless in writing and signed by an authorized representative of each party.
• The agreement may only be amended by a written document duly executed by the parties hereto. With respect to packer, no amendment will be binding upon packer, unless such amendment is executed by senior management of packer.
• The commencement date shall be noticed in writing to producer. Thereafter this agreement shall automatically renew for successive six-month terms unless terminated by either party at the end of the initial term or any renewal term by providing the other party at least thirty (30) days prior written notice of such termination.
• The parties will enter into good faith negotiations with respect to extending the agreement or entering into a new agreement commencing on or about thirty (30) months prior to the expiration of the term. However, nothing in this section shall obligate a party to agree to any such extension or new agreement.

Right to Assign

• Neither party may assign this agreement or any of its interest herein without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed, provided that either party may assign this agreement to a successor in interest to such party without obtaining the consent of the other party. Producer may assign this agreement or any of its rights hereunder to its lenders as collateral security for any loan from such lenders. Packer may withhold consent for any reason when producer desires to assign the agreement to another party who owns or has publicly disclosed plans on acquiring or building a hog slaughter facility. This agreement shall be binding up on and inure to the benefit of the parties hereto and then respective designees, representative successors, and permitted assigns. Any assignment will not relieve the assignor from any of its obligations created hereunder; and any assignee shall become liable for all the terms and conditions of this agreement as if such party was signatory to the agreement.
• Notwithstanding the above, either may assign this agreement to any affiliated entity without receiving the other party's prior written consent.
• Notwithstanding the above, producer will not be required to obtain packer's consent if (i) a majority ownership in packer is transferred by the institutional investors holding producer securities to other investors, as long as such investors are not competitors of packer or producer; or (ii) all, or substantially all, of the assets are sold to an entity (which includes every owner and affiliate of the entity) which is not a competitor of packer or producer. If producer is selling securities or assets to a producer (competitor of producer, but producer or its affiliates are not a competitor of packer), packer's consent will not be unreasonably withheld.
• Producer does not have the right to assign this agreement or any of producer's rights or obligations under this agreement without packer's prior written consent. Producer may, however, assign this agreement or any of producer's rights hereunder to producer's lenders as collateral security for any loan. If producer desires to sell all or substantially all the assets constituting producer's hog production operation, then in addition to obtaining packer's consent, producer shall cause the purchaser to expressly assume, in a writing acceptable to packer, all of producer's obligations under this agreement. This agreement shall be binding on producer's heirs, successors and permitted assigns and on packer's successors and assigns.
• This agreement may not be assigned, nor may the performance obligations of producer to deliver hogs to packer be sold or transferred to any other person or entity without packer’s prior written approval. Packer shall have the right in its sole discretion to agree or not agree to any such proposed transfer or sale. The parties understand and agree that packer decision to enter into its agreement was made in reliance on producer being the person or entity to deliver market hogs to packer.

Rights/Obligations of Successors

• Any assignment or transfer agreed to by packer shall be subject to the terms and conditions of this agreement, a copy of which shall be provided to the assignee. The obligations of this provision shall also apply with equal force to the transfer of producer's interest to their successors and assigns.
• Except as otherwise provided, all the provisions of this agreement or personal guaranty shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that producer shall not assign this agreement in whole or in part without the prior written consent of packer. Any attempted assignment to violation of that provision shall be void.
• Subject to packer's prior written approval of any such assignment or transfer, any successor to the interest of producer and the hog farming operation from which the hogs contracted for under this agreement are supplied shall be fully responsible to continue to fulfill producer's obligations and commitments hereunder.
• The parties agree if either party merges with another company (excluding a merger of packer into another packer company) and is not the surviving party, or such company is otherwise sold or a majority ownership of the company is transferred, the party merging, selling, or transferring its business or stock must seek the other party's written 'consent to the merger, sale or transfer, and if such written consent is not received. This agreement may be terminated by the other (non-merging or non-selling) party.
• This agreement shall be binding on producer’s heirs, successors and permitted assigns and on packer’s successors and assigns.
• This guaranty shall bind the heirs, assigns and legal representatives of the undersigned.

Sale of Facilities/Operation

• Any assignment, sale or transfer of producer's interest in the hog farming operation must include notice to the assignee that any proposed assignment or transfer of this agreement is subject to receipt of packer's prior written approval as set forth in specified paragraph of this agreement.
• Any assignment, sale or transfer of producer's interests in its hog farming operation must include notice to the assignee that the assignment/transfer is subject to the terms and conditions of the agreement with packer, and a copy of this agreement shall be provided to the assignee.
• If producer desires to sell all or substantially all the assets constituting producer's hog production operation, then in addition to obtaining packer's consent, producer shall cause the purchaser to expressly assume, in a writing acceptable to us, all of producer's obligations under this agreement.
• If producer is selling securities or assets to another producer and packer reasonably withholds its consent to assign this agreement, packer will offer producer purchasing the assets or securities of producer an agreement to sell packer 100% of the hogs under packer's existing specified pricing program for the same term as the term of this agreement.

Transfer of Title

• Producer will have, and will transfer to packer, good and marketable title to the hogs free and clear of all liens, claims and encumbrances, except as follows.
• The hogs supplied under this agreement shall be sold F.O.B. destination and title to hogs and risk of loss of hogs pass from producer to packer as specified in packer's carcass merit program.
• Title and risk of loss on the hogs shall pass from producer to packer upon slaughter of the hogs at packer's plant.
• Title and risk of loss on the hogs will pass from producer to packer upon the slaughter of the hogs at packer's plant, however, producer will remain responsible for any carcasses that contain drug residue or are adulterated in any other manner which is due to producer.
• Title to and risk of loss for the hogs shall pass from producer to packer at slaughter.
• Title to and risk of loss of the hogs shall pass from producer after weighing of the carcasses at the hot weight scale at such slaughter facility.

Compliance with Applicable Laws

• During the term of this agreement, each party shall comply in all respects with all laws (including, but not limited to, regulations, rules, codes and ordinances), whether federal, state, local or otherwise, applicable to the production of hogs, the construction, operation and maintenance of the facilities, and the performance of producer's obligations hereunder, such laws to include, without limitation, those relating to protection of the environment, waste management, health or safety of persons, construction and site location of the facilities, and livestock production.
• Each party shall comply with all local, state and federal laws, regulations and orders which may pertain to operations covered under the terms of this agreement.
• The execution, delivery and performance of this agreement and the consummation of the transactions contemplated hereby will not violate any provision of law, statute, rule or regulation or violate any judgment, order, writ or decree of any court applicable to producer.
• Producer acknowledges packer has certain obligations under the federal Mandatory Price Reporting Act, which include the reporting of certain information to AMS and providing the format of this agreement to GIPSA. Packer will have no obligation to notify producer under this specified section for the reporting requirements required under MPR. If any provision of this section is determined to be illegal, invalid or unenforceable, this provision shall be replaced by a mutually acceptable valid, legal and enforceable provision that is closest to the original intention of the parties. The parties agree that this provision will survive any termination of this agreement.

Country of Origin

• As result of the Country of Origin Labeling law passed by Congress in 2002, and the regulations that are to be issued by the USDA implementing the law, all hogs delivered to packer after specified date, must be exclusively born and raised in the United States. Accordingly, if all hogs delivered to packer by producer after specified date are not exclusively born and raised in the United States, then packer, at its sole discretion, may either accept only those hogs that are exclusively born and raised in the United States or may terminate this agreement, effective specified date. It shall be producer's responsibility to provide documentation to packer, in a format as may be required by the USDA, or if the USDA does not require such documentation from producer, then in a format approved by packer, at the time of each delivery of hogs to packer that certifies that all such hogs have been exclusively born and raised in the United States.
• In the event that Country of Origin Labeling becomes mandatory, the binding terms and conditions of this contract may be [renegotiated by one or both parties/terminated].
• Producer understands and agrees if a federal, state or local government enacts any country of origin, or any similar law which requires segregation of hogs or pork product, packer may require producer to deliver hogs on certain days or at certain times to enable packer to process hogs in compliance with such law. In addition, producer will deliver with each load of hogs any affidavit or other document reasonably requested by packer to comply with any such law.
• Upon the enforcement of any "country of origin" related legislation or regulations in any part of the United States, each hog's country of origin, within the meaning of the Farm Security and Rural Investment Act of 2002 and any regulations thereunder will be the United States, and each hog will be born and raised exclusively in the United States.
• At no time will packer be responsible for any trade tariffs, duties, or barriers.
• Except as otherwise allowed by the agreement, each hog shall have been born and raise exclusively in the United States.

Default

• For purposes of this agreement, a default by producer shall be deemed to have occurred under any of the following circumstances: (i) Producer defaults in the performance of any obligation under specified sections; (ii) Producer defaults in the performance of any other obligation hereunder and, provided that default is curable, producer fails to cure such default within specified period following receipt of written notification of such default from packer. Nothwithstanding the foregoing, if producer working in good faith and with all due diligence to cure the default but such default cannot realistically be cured within such period, producer shall have up to a total of specified period to cure such default to packer's reasonable satisfaction. (iii) Producer is adjudged as bankrupt, or if a proceeding of any kind under any law relating to bankruptcy, insolvency or relief of debtors is initiated by or against Producer and is not dismissed within specified period or (iv) Producer makes an assignment for the benefit of its creditors, or ceases to carry on its business; (v) Producer has a receiver/trustee or similar person appointed or otherwise designated in respect of its business or affairs; (vi) Producer transfers, merges or sells fifty (50) percent or more of its assets, without the prior written consent of packer; (vii) Producer transfers, merges, sells or purchases fifty (50) percent or more, or otherwise effects a change in control, of its outstanding and/or non-issued shares of stock, without the prior written consent of packer; (viii) Producer's debt to equity ratio becomes greater that two (2) debt to one (1) equity; (ix) a Force Majeure event which suspends performance under this agreement for a consecutive specified period; (x) Producer fails to deliver specified volume; or (xi) Producer's financial condition changes adversely and impairs the financial responsibility of producer.
• For purposes of this agreement, a party is in default if such party: (i) Breaches this agreement and such breach remains uncured for specified period after receipt from the non-defaulting party of a written notice specifying the breach; (ii) Manifests an intention not to perform any material obligation under this agreement or manifests an intention not to cure a material breach of this agreement; (iii) 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; (iv) Is in default under any other agreement between the parties, after passage of any cure period provided for in such agreement; (v) Defaults in the performance of any loan agreement with its lenders. Each party agrees to promptly provide the other party written notice of any default by such party under any loan agreement with its lenders, regardless of whether such default is declared by the lenders, and to immediately provide the other party a copy of any notice of default such party receives from its lenders. Any such notice of default by a party in the performance of any agreement with its lenders shall be conclusive evidence of such a default; (vi) Transfers, merges or sells all or substantially all of its assets, without the prior written notice to the other.
• For purposes of this agreement, a default by packer shall be deemed to have occurred under any of the following circumstances: (i) Packer defaults in the performance of its obligations under specified sections; (ii) Packer defaults in the performance of its obligations hereunder and, provided that such default is curable, packer fails to cure such default within specified period following receipt of written notification thereof from producer; (iii) Packer is adjudged as bankrupt, or if a proceeding of any kind under any law relating to bankruptcy, insolvency or relief of debtors is initiated by or against packer and it not dismissed within specified period; (iv) Packer makes an assignment for the benefit of its creditors, or ceases to carry on its business; (v) Packer has a receiver/trustee or similar person appointed or otherwise designated in respect of its business or affairs. (vi) Packer defaults in the payment for any hogs and fails to cure such default within specified period following receipt of written notification from producer; (vii) Packer transfers all or substantially all of packer's assets in fraud of creditors or generally fails to pay its debts as they become due; (viii) A Force Majeure event suspends performance under this agreement for a specified consecutive period.

Dispute Resolution

• Notice of demand for arbitration shall be filed in writing with the other party to this agreement and with the JAMS. The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date which the applicable statute of limitations would bar institution of a legal or equitable proceeding based on such claim, dispute or other matter in question. The award rendered by an arbitrator shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction. Any mediation or arbitration proceedings shall be conducted at a location as the parties may agree, but in the absence of agreement, such proceedings shall be conducted in specified location. Unless otherwise agreed in writing, the parties shall carry on the services required hereunder during any arbitration proceedings. In the event of arbitration, the arbitrator will have no authority to award punitive or other damages not measured by the prevailing party's actual damages and may not, in any event, make any ruling, finding, or award that does not conform to the terms and conditions of this Agreement. This paragraph shall survive completion or termination of this agreement.
• The arbitration shall be conducted by one arbitrator. Persons eligible to be selected as an arbitrator shall have specified qualifications. Each party shall be entitled to strike on a peremptory basis, for any reason or no reason, any or all of the names of potential qualified arbitrators on the list submitted to the parties by the AAA. In the event the parties cannot agree on a mutually acceptable single arbitrator from the list submitted by the AAA, the AAA shall designate five persons who, in its opinion, meet the criteria set forth herein, which designees may not include persons named on the list previously submitted by the AAA. Each party shall be entitled to strike two of such five designees on a peremptory basis, and shall indicate its order of preference with respect to the remaining designees, and the selection of the arbitrator shall be made from among such designees which have not been so stricken by any party in accordance with their indicated order of mutual preference.
• This agreement contains a binding arbitration provision which may be enforced by the parties.
• All parties shall use their best efforts to settle any dispute, claim, question or disagreement arising out of or relating to this agreement or any alleged breach of this agreement. This agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the laws of the specified state applicable to contracts made and performed in specified state. Any and all disputes arising between the parties in respect of this agreement shall be brought in the state or federal courts located in specified state. The parties submit to the jurisdiction of, and do hereby agree to voluntarily appear in such court.
• Any controversy or claim arising out of or relating to this agreement, or the breach thereof, shall be settled by binding arbitration conducted in specified location in accordance with the governing rules of the American Arbitration Association. If parties cannot mutually agree on an arbitrator, each party shall appoint one arbitrator and these two arbitrators shall select a third. The third arbitrator shall be appointed by the AAA at the request of either party. Judgment upon any such decision may be entered in any court having jurisdiction thereof, or application may be made to such court for a judicial acceptance of the fees incurred in arbitration, and the parties shall share the costs of the arbitration proceedings equally. Each party shall pay for and bear the cost of its own experts, evidence and legal counsel unless otherwise agreed in writing.
• Claims, disputes or other matters in question between the parties to this agreement arising out of or relating to this agreement or breach thereof and not resolved through the foregoing mediation process shall be subject to and decided by arbitration in accordance with the rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise. Demand for arbitration shall be filed in writing with the other party to this agreement and with the American Arbitration Association. A demand for arbitration shall be made within a reasonable time after the claim; dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations: Any arbitration arising out of or relating to this agreement shall include, by consolidation or joining of any additional person or entity not a party to this Agreement who is substantially involved in a common question of fact or law, and whose presence is required if complete relief is to be afforded in the arbitration. The foregoing agreement to arbitrate shall be specifically enforceable in accordance with specified state law in the courts of the specified state and county, unless another location is mutually agreed upon.
• If the parties cannot resolve any dispute, claim, controversy or other matter relating in any way to the interpretation or enforcement of this agreement, the sole remedy of the parties will be to submit the dispute or controversy to binding arbitration.
• In the event of any litigation, legal action, or arbitration arising out of this agreement, the prevailing party will be entitled to recover its legal fees and costs from the non-prevailing party.
• 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 shall have no authority to impose a settlement of any such dispute. Mediation shall be conducted pursuant to the laws of the specified state.
• The parties waive any right to a trial by jury in any action or proceeding to enforce or defend any rights under this agreement and agree that any such action or proceeding shall be tried before a court and not before a jury.
• Any dispute arising out of, relating to or in connection with this agreement shall be resolved in accordance with the procedures specified in this section, which shall be the sole and exclusive procedures for the resolution of any such disputes. The parties shall attempt in good faith to resolve any agreement related dispute promptly by negotiation between executives who have authority to settle the controversy. Any person may give the other party written notice of any agreement related dispute not resolved in the normal course of business. Within 20 days after delivery of the initial notice, the executives of both parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. If the dispute has not been resolved as provided herein within 30 days after delivery of the initial notice of negotiation, the parties shall endeavor to settle the dispute by mediation. Unless otherwise agreed, the parties will select a mediator by mutual agreement, but in the absence of such agreement, by the Judicial Arbitration and Mediation Service (JAMS) under its mediation rules. Thereafter, any unresolved controversy or claim arising from, or relating, to this agreement, or breach thereof, shall be settled by arbitration as provided below. All fees and expenses of any mediation/arbitration proceedings shall be borne by the parties equally. However, each party shall bear the expenses of its own counsel, experts, witnesses, and preparation and presentation of evidence.
• The parties agree if a dispute, claim or controversy is over an accounting methodology, the parties agree the issue will be submitted to independent accountants for a binding resolution of the issue. If a party wishes to submit an accounting matter to binding arbitration they must notify the other party by written notice. The written notice shall specify the accounting issue the notifying party is submitting to binding arbitration. Within specified period of the delivery of the notice of arbitration, each party will appoint an independent accountant, and within specified period of the appointment of the independent accountants an arbitration hearing will be heard in specified location. The arbitration hearing on such accounting matters shall be concluded within specified period of its commencement unless otherwise ordered by the independent accountants. The accountants shall render a decision within specified period after the close of the hearing. If the two independent accountants cannot mutually agree to a resolution of the dispute, the two independent accountants will select a third independent accountant to decide the matter. A decision rendered by a majority of the accountants shall be final and binding on the parties.
• The parties hereby waive any right to trial by jury in any proceeding involving an agreement related dispute, whether now existing or hereafter arising, and whether sounding in contract, tort or otherwise. The parties agree that any of them may file a copy of this paragraph with any court as a written evidence of the knowing, voluntary and bargained for agreement month the parties irrevocably to waive trial by jury and that any proceeding whatsoever between them involving an agreement related dispute shall instead be tried in a court of competent jurisdiction by a judge sitting without a jury.
• The parties will use good faith efforts to resolve disputes, claims or controversies that arise out of or are in connection with this agreement. If the parties cannot resolve any dispute, claim, controversy or other matter relating in any way to the interpretation or enforcement of this agreement, the sole remedy of the parties will be to submit the dispute or controversy to binding arbitration. If a party wishes to submit a matter to binding arbitration they must notify the other party by written notice. The written notice shall specify the issue the notifying party is submitting to binding arbitration. Within specified period of the delivery of the notice of arbitration, each party will appoint an arbitrator from the American Arbitration Association's National Roster of Arbitrators and Mediators. The two arbitrators appointed by the parties shall select and appoint s third arbitrator from the American Arbitration Association's National Roster of Arbitrators and Mediators within specified period of the delivery of the notice of arbitration. Within specified period of the appointment of the third arbitrator an arbitration hearing will be heard in specified location. The arbitration rules of the American Arbitration Association will be applied, the laws of the specified state shall be applied as necessary, and the rules of evidence of the specified state shall govern the presentation of evidence therein. The arbitration hearing shall be concluded within specified period of its commencement unless otherwise ordered by the arbitrators. The committee may employ specialized persons to assist in any matter before the committee. The arbitrators shall renders decision within specified period after the close of the submission of evidence. An award rendered by a majority of the arbitrators shall be final and binding on the parties, and a judgment on such award may he entered by either party in a state or federal court having jurisdiction.

Jurisdiction

• All judicial proceedings and actions arising out of, relating to or based upon this agreement shall be venued in the specified state courts in the specified state if there is no jurisdictional diversity between the parties or if the amount in controversy is less than the applicable minimum required for Federal jurisdiction or the Federal Courts of the specified state if there is jurisdictional diversity and the amount in controversy exceeds the applicable minimum required for Federal jurisdiction, and each of the parties consents to the personal jurisdiction of said courts and waives any argument that such forums are not convenient.
• Subject to specified paragraph, all judicial proceedings and actions arising out of or relating to this agreement shall properly (but not exclusively) be venued in the state courts of the specified county in the state or the federal courts of the specified state. The parties consent to the personal jurisdiction of said courts and waive any argument that such forums are not convenient.
• This agreement shall be governed by and construed in accordance with the laws of specified state.
• This agreement, the relationship of the parties, and all of their respective rights and obligations shall be construed and interpreted in accordance with the laws of the specified state, without giving effect to the principles of conflict of laws thereof.
• The agreement shall be construed in accordance with the laws of the specified state, without reference to conflict of laws principles of such state.
• The agreement shall in all respects be construed in accordance with the laws of the state.
• The arbitration rules of the American Arbitration Association will be applied, the laws of specified state shall be applied as necessary, and the rules of evidence of specified state shall govern the presentation of evidence therein.
• This agreement and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the specified state without regard to conflict of laws principles.
• All judicial proceedings and actions arising out of or relating to this agreement shall be venued in the state courts in the specified county in the specified state or the Federal Courts of the specified state. The parties consent to the personal jurisdiction of said courts and waive any argument that such forums are not convenient.
• That each shall comply with all local, state and federal laws, regulations and orders which may pertain to operations covered under the terms of this agreement.
• That the agreement and the rights of the parties under this agreement shall be governed by and construed in accordance with the internal laws of the state, not withstanding its conflicts of laws rules.

Remedies

• Any provisions herein which by their terms have or may have application to this personal guaranty or the guarantors, including without limitation specified paragraphs, shall be deemed to the extent of such application to apply to this personal guaranty and the guarantors.
• If producer is in default, packer may offset any amounts owed to packer under specified paragraph against any amounts otherwise due and owing to producer under this agreement and any other agreement or transaction between producer and packer until all such amounts owed to packer has been satisfied.
• In the event of default, the non-defaulting party shall have any and all remedies that may exist at law or in equity, all such remedies being cumulative and non-exclusive and such remedies to include the right to seek indemnification; it being the agreement of the parties that each shall indemnify, defend and hold harmless the other of and from any and all loss, costs, liability, damage or expense, to include costs and attorneys' fees, caused by, arising from or in connection with the breach of this agreement by the other party.
• Nothing herein contained shall bar either party from seeking equitable remedies in a court of appropriate jurisdiction.
• The rights and remedies created by this agreement shall be cumulative and non-exclusive of those to which a party may be entitled at law or in equity, and the right of exercise of all such rights and remedies is hereby reserved. The use and availability of one remedy shall not be taken to exclude or waive the right to the use of another.
• Upon producer's default hereunder, packer may declare all obligations secured hereby immediately due and payable and may proceed to enforce payment of same and exercise any and all rights and remedies provided by law including, but not limited to, the right to: (i) enter upon producer's premises to take possession of, assemble, and collect the collateral; or (ii) require producer to assemble the collateral and make it available to packer at a time and place that are reasonably convenient to both parties.

Severability

• If any one or more of the provisions contained in this agreement shall, for any reason be held invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability shall not effect any other provision of this agreement, and this agreement shall be construed as if that invalid, illegal or unenforceable provision had never been contained in this agreement.
• If any provision of this agreement is deemed to be unenforceable or legally invalid, such provision shall be stricken from this agreement, and the parties shall continue under the remaining terms of the agreement.
• 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 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 term or provision held to be invalid.
• In the event any provision of this agreement is held to be illegal, invalid or unenforceable to any extent, the legality, validity and enforce ability of the remainder of this agreement shall not be affected thereby and shall remain in full force and effect and shall be enforced to the greatest extent permitted by law.
• In the event that any part, term, or provision of this agreement is unenforceable, illegal or in conflict with any federal, state or local laws, such part, term or provision shall be considered severable from the rest of the agreement, and the remaining portion of the agreement shall not be thereby affected and this agreement shall be construed and enforced as if the agreement did not contain such part, term or provision.

Termination

• Agreement shall terminate on [1/60] day notification by producer or packer.
• Any monies or other obligations actually due and payable by one party to the other party prior to termination of this agreement shall remain due and payable following such termination and shall continue to accrue interest hereunder (if applicable) until paid.
• Any provisions of this agreement that by their terms have or may have application after the expiration or termination of this agreement shall be deemed to the extent of such application to survive the expiration or termination of this agreement. Examples of such provisions are specified paragraphs.
• During the initial term of this agreement or any extension thereof, either party may provide written notice to the other party of its intent not to agree to any further extensions of this agreement. In the event such a notice is received, there shall be no further extensions of this agreement. Any such written notice shall be sent no later than six (6) months before the expiration of the initial or any extended term of this agreement. Such a written notice of a party's intent not to agree to a written extension of this agreement shall be effective, even if the other party has sent notice of its intent to renew this agreement.
• Either party has the right to terminate this agreement by written notice prior to its conclusion. Upon such written notice, the agreement will terminate exactly one year after notification.
• Either party may terminate the agreement within the first three days after signing the agreement by providing a written notice of termination to the other party, as further described in specified section of the agreement.
• Either party may terminate this agreement at the end of the initial term or any renewal term by providing the other party written notice of such termination at least one year prior to the end of such term. This agreement is also subject to termination pursuant to specified paragraphs.
• Either party may terminate this agreement by delivering a written notice of termination to the other party within three days of the date of execution of the agreement (date first written above).
• Either party shall have the right to terminate this agreement by written notice to the other party if such other party (i) is in breach of the agreement, (ii) commits an act of intentional fraud relating to this agreement which is materially harmful to the first party, or (iii) is insolvent declares bankruptcy, or is forced into involuntary bankruptcy.
• If an event of Force Majeure occurs and continues for a period longer than six (6) months, the party not claiming the event of Force Majeure may notify the other party that it wishes to terminate this agreement and such termination will be effective upon receipt of written notice.
• If closure is permanent, producer shall have the option of delivering under this arrangement or terminating the agreement.
• If packer and all of its subsidiaries exit the hog processing business it may terminate this agreement and their will be no further obligations by either party under this agreement.
• If producer fails to correct such deficiencies within such six (6) month period, then packer shall have the right to terminate this agreement upon thirty days written notice to producer delivered at any time thereafter before all such deficiencies have been fully corrected.
• If any party shall fail to observe or perform any covenant or agreement contained herein or if any representation or warranty given by either of them in connection herewith proves to be false or misleading, the non-breaching party shall give the breaching party written notice thereof and if the breaching party has not cured such breach within specified period of such notice the non-breaching party shall have the right to pursue any and all remedies it may have at law or in equity, including, but not limited to, termination of this agreement. The election of one remedy shall not foreclose the use of any other remedy and the remedies shall be considered cumulative not exclusive.
• If packer (which includes its subsidiaries) exits the hog processing business it may terminate this agreement. Upon such termination any negative amounts in the ledger account will be repaid by producer, within 60 days and any positive amounts in the ledger account will be repaid by packer in 10 days, and their will be no further obligations by either party under this agreement.
• If packer closes or sells one or more of its locations, packer shall have the right to terminate this agreement upon sixty (60) days' notice. In the event of the temporary or permanent closure of one location, packer may request producer to deliver hogs to the other location or a different hog buying station. In such event packer shall reimburse producer for any additional transportation costs between the original location or hog buying station and the new location or hog buying station. If closure is permanent producer shall have the option of delivering under this arrangement or terminating the agreement. In no event shall producer be entitled to any compensation or indemnification from packer or its successors for losses or damages incurred by producer as a result of the temporary or permanent closure of one or more of its locations.
• If packer terminates this agreement prior to the expiration of the term or, if applicable, the renewal term, and the ledger account has a net debit balance (i.e. producer owes packer the net balance of the ledger account), then producer shall only be required to pay packer said debit balance if packer terminated this agreement pursuant to specified sections.
• If packer’s ability to sell products is restricted or economically altered for any reason beyond its control, packer may, at its option provide notice to producer of its intent to terminate this agreement. If packer chooses this option, packer shall provide notice in writing to producer and provide a 45-day period of time to negotiate changes to the agreement. If packer and producer fail to agree to new terms for the agreement, the termination shall be effective at a mutually acceptable date but no later than the 140-day period following the notice of termination. During the wind down period, deliveries shall continue under terms hereof to provide each party sufficient time to find alternative arrangements.
• If producer fails to provide such adequate assurance within a reasonable time, not to exceed 30 days, then packer may terminate this agreement.
• If producer is in default or packer terminate this agreement for producer default, then packer shall be entitled to recover from producer direct damages pursuant to this paragraph.
• If producer shall fail to observe or perform any covenant or agreement contained herein, and such failure occurs thirty (30) days after notice from packer of such failure, packer may terminate this agreement. Notwithstanding the foregoing, packer shall have the immediate right to terminate this agreement in its sole and absolute discretion in the event it appears to packer that producer’s default is willful or based on fraud, misrepresentation or deceit. Packer shall have full recourse to all remedies under law or equity in the event of producer’s default.
• If producer terminates this agreement prior to the expiration of the term or, if applicable, the renewal term (unless producer terminated because the ledger account balance reaches zero), and if packer terminates this agreement prior to the expiration of the term or, if applicable, the renewal term (unless packer terminated because the ledger account balance reaches zero), and the ledger account has a net debit balance (i.e. producer owes packer the net balance of the ledger account), then producer shall not be required to pay packer said debit balance unless packer terminated this agreement pursuant to specified sections.
• If the other party fails to provide such adequate assurance within a reasonable time, not to exceed 30 days, then such party may terminate this agreement.
• If the other party is in default, 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 shall immediately terminate. The parties’ obligations under this agreement shall survive termination as provided in specified paragraph.
• If the percentage comparison is less than 97%, packer shall have the right to terminate producer's right to deliver any further hogs to packer under this agreement. In the event of such a termination, neither producer nor packer shall have any further obligations to the other under this agreement.
• In addition to any rights to terminate this agreement, which are expressly set forth elsewhere herein either party shall have the right to terminate this agreement immediately upon written notice to the other party if such other party (i) is in breach of the agreement, (ii) commits an act of intentional fraud relating to this agreement which is materially harmful to the first party, or (iii) is insolvent declares bankruptcy, or is forced into involuntary bankruptcy.
• In no event shall a termination of this agreement relieve either party from paying the other party for any amounts due.
• In the event of a default by either party, the other party, in addition to its other rights and remedies under applicable law, may terminate this agreement by providing written notice to the defaulting party.
• In the event of a packer default, producer may terminate this agreement by providing written notice to packer.
• This agreement is subject to immediate termination by packer at any time in the event of a default by producer or if packer discontinues the slaughtering of hogs at the plant indicated in specified paragraph below.
• This agreement is subject to termination by packer if packer discontinues the slaughtering of hogs at the plant producer's hogs are delivered to.
• This agreement is subject to termination by packer in the event of a default or at any time if packer discontinues the slaughtering of hogs.
• In the event of a packer default, producer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a party under the Uniform Commercial Code') may terminate this agreement by providing written notice to packer. The termination shall be complete upon receipt of notice by packer.
• In the event of a producer default, packer may terminate this agreement by providing written notice to producer.
• In the event of a producer default, packer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a packer under the Uniform Commercial Code), may terminate this agreement by providing written notice to producer. The termination shall be complete upon receipt of notice by producer.
• In the event of a producer default, packer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a party under the Uniform Commercial Code), may terminate this agreement by providing written notice to producer. The termination shall be complete upon receipt of notice by producer.
• In the event of an packer default, producer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a party under the Uniform Commercial Code) may terminate this agreement by providing written notice to packer. The termination shall be complete upon receipt of notice by packer. Upon termination of this agreement, packer will pay the outstanding balance of the ledger account (as defined in specified section) within ten (10) days of termination.
• In the event of termination under specified paragraphs, the required notice of termination shall be increased from 180 days to 18 months if, on the date notice of termination is given, the daily close for Chicago Mercantile Exchange Futures Price for lean hogs, averaged over -the two lean hog futures quotations for the futures months immediately following the time that notice of termination is given, is under $55 cwt. or over $75 cwt.
• In the event packer permanently withdraws from the hog slaughter business in specified locations, packer may terminate this agreement by providing written notice to producer. The termination shall be complete upon receipt of notice and shall not constitute an event of default hereunder.
• Nothing herein shall prevent any party from seeking specific performance or damages for breach in respect of any right or obligation contained in this agreement. The rights and remedies set forth in this section are nonexclusive and shall be in addition to any other rights or remedies that may otherwise be available at law or equity.
• Notwithstanding the above, neither party can deliver a written notice of termination during the first three (3) years of the term. The parties have agreed that the minimum term of this agreement will be for a period of seven (7) years.
• Notwithstanding the provisions for the term expressed in the Term provision of the agreement, either party may terminate the agreement by 'delivering a written notice of termination to the other party within three days of the date of execution of the agreement (date first written in agreement). If a written notice of termination is not delivered within the first three days of the execution of this agreement, the agreement will continue for the period expressed in the Term provision.
• Notwithstanding the provisions of specified section of the agreement to the contrary, packer may terminate the initial term of the agreement upon one (1) year's written notice to producer.
• Packer agrees except in the case of a Force Majeure event (as defined in specified section) or in the event that this agreement is terminated pursuant to specified sections, packer shall pay to producer losses if packer (i) refuses to accept delivery of the hogs as required by this agreement, or (ii) requires the hogs to be delivered to a location other than the specified location. Producer shall have the right to sell any hogs rejected by packer in any reasonable manner; provided, however, that packer shall not be obligated to indemnify producer for any losses pursuant to this section with respect to any rejected hogs which producer has not sold within ten (10) working days after the date packer refused to accept delivery of such hogs. Notwithstanding anything to the contrary herein, producer Losses shall not include any incidental, special/punitive, exemplary, or consequential damages of any kind whatsoever.
• Packer may immediately terminate this agreement in the event packer terminates and/or materially curtails its hog slaughtering operations.
• Packer will have the right to terminate this agreement upon sixty (60) days written notice to producer in the event that (i) producer is materially in default of its obligations hereunder and producer fails to cure such defaults within such sixty (60) day notice period, or (ii) producer has committed an act of intentional fraud relating to this agreement which is materially harmful to packer.
• Producer may cancel this agreement by mailing a written cancellation notice to packer at the address set forth above within three business days after producer receives a copy of the fully signed agreement. The written notice of cancellation will be deemed mailed on the date of the postmark on the envelope.
• Producer shall have the right to terminate this agreement in advance of specified date, on thirty (30) days advance written notice to the other party. If so terminated, then producer shall not be obligated to deliver any hogs to packer and packer shall not be obligated to accept any hogs from producer from the date of such termination.
• Termination of this agreement shall become effective: (i) immediately, in the event of termination under specified paragraph above; and (ii) following the end of the applicable notice period in the event of termination under specified paragraph (hereinafter the effective date of termination).
• Termination of this agreement shall not relieve any party of any liability accrued for, nor effect the continued operation or enforcement of any provision of this agreement which by its terms is to survive termination.
• The agreement shall terminate no later than specified date. After that date, producer shall not be obligated to deliver any hogs to packer and packer shall not be obligated to accept any hogs from producer.
• This agreement is also subject to termination pursuant to specified paragraph.
• This agreement is subject to immediate termination by packer at any time if producer defaults.
• Producer understands and acknowledges that packer and facilitator are not in any way affiliated with each other, other than by the terms of a written agreement between packer and facilitator, and that packer is in no way liable for or responsible for any of the requirements, responsibilities or obligations that facilitator may have to producer. Similarly, producer acknowledges and agrees that facilitator is not in any way liable for responsible for any of the requirements, responsibilities or obligations that packer may have to producer hereunder or otherwise.
• Producer will have the right to terminate this agreement upon sixty (60) days' written notice to packer in the event that (i) packer is materially in default of its payment obligations or its obligations under specified Section and packer fails to cure such defaults within such sixty (60) day notice period, or (ii) packer has committed an act of intentional fraud relating to this agreement which is materially harmful to producer.
• Pursuant to specified state law, this contract may be terminated during a three (3) day review period which commences on the execution date (date first written above), and the parties agree either party can provide a written notice of termination to the other during such review period. If neither party terminates the agreement during such three (3) day review period, the term of this agreement shall commence on specified date and, subject to earlier termination otherwise explicitly provided for in this agreement, extend through specified date. At the end of the term, producer shall continue to deliver hogs to packer, in accordance with the terms and conditions hereof, for 12 additional months, with deliveries being reduced each month as provided in specified section below. At the conclusion of such 12 month period, neither party shall have any further obligations to the other party under this agreement or otherwise unless otherwise contained in a subsequent written agreement signed by the parties.
• Termination of this agreement shall not relieve any party of any liability accrued for, nor affect the continued operation or enforcement of any provision of this agreement which by its terms is to survive termination. Nothing herein shall prevent any party from seeking specific performance or damages for breach in respect of any right or obligation contained in this agreement. In no event shall a termination of this agreement relieve producer from paying packer for any ledger balances currently accrued in the ledger account (net of amounts accrued to producer by packer. The rights and remedies set forth in this subsection are non-exclusive and shall be in addition to any other rights or remedies that may otherwise be available at law or equity.
• Termination of this agreement shall not relieve any party of any liability accrued or for any breach hereunder, nor affect the continued operation or enforcement of any provision of this agreement which by its terms is to survive termination. Nothing herein shall prevent any party from seeking specific performance or damages for breach in respect of any right or obligation contained in this agreement. The rights and remedies set forth in this section are nonexclusive and shall be in addition to any other rights or remedies that may otherwise be available at law or equity.
• Termination of this agreement shall not relieve any party of any liability accrued or for any breach then accrued hereunder, nor affect the continued operation or enforcement of any provision of this agreement or any confidentiality agreement between the parties which by its terms is to survive termination. Nothing herein shall prevent any party from seeking specific performance or damages for breach in respect of any right or obligation contained in this agreement. The rights and remedies set forth in this section are non-exclusive and shall be in addition to any other rights or remedies that may otherwise be available at law or equity.
• The party owing the balance on the ledger account upon early termination or breach, shall pay the other party said balance plus interest on such balance from the effective date of termination or expiration at a per annum rate equal to the Citibank prime rate (determined on the date of termination or expiration) plus one percent (1%) in six (6) equal installments with the first installment due on the last day of the third calendar month immediately following the effective date of termination or expiration and the subsequent installments due at the end of each three-month period thereafter, provided, however, that the party owing said balance shall have the right to prepay all or any portion of any installment or installments at any time without penalty.
• This agreement may be terminated by packer or producer by giving the other party sixty (60) days written notice as provided at specified section hereof.
• This agreement may be terminated by packer or producer, at any time, with or without cause, by giving the other party 18 months written notice, provided, however, that such notice may not be given prior to specified date.
• This agreement may be terminated by packer or producer, upon giving 180 days written notice (or 18 months written notice if the provisions of specified paragraph below apply) in the event that a dispute (as defined below) is not resolved pursuant to the provisions of specified section. Dispute for purposes of this subparagraph shall include only (i) a disagreement between the parties concerning proposed changes to the genetic carcass attributes under specified section (ii) a disagreement between the parties, relating to the first sentence of specified section, and concerning a change in the USDA's methodology for calculating the specified reported price, or if USDA discontinues or replaces the specified reported price.
• This agreement may be terminated by packer, in the event of a producer default (as defined in specified paragraph).
• This agreement may be terminated by producer, upon giving 180 days written notice (or 18 months written notice if the provisions of specified paragraph apply), in the event that packer changes the carcass merit program (as defined) pursuant to specified section.
• This agreement may be terminated prior to the expiration of the term: (i) pursuant to specified sections hereof; or (ii) pursuant to specified schedule attached hereto; or (iii) by either party, without cause, by providing the other party with at least 18 months written notice of termination; however, a written notice of termination under this section cannot be delivered by either party prior to specified date. Notwithstanding the above, at the conclusion of the 18 month notice period described above, producer shall continue to deliver hogs to packer, in accordance with the terms and conditions hereof, for 12 additional months, with deliveries being reduced each month as provided in specified section below. At the conclusion of such 12 month period, neither party shall have any further obligations to the other party under this agreement or otherwise unless otherwise contained in a subsequent written agreement signed by the parties.
• This section shall survive the expiration of the term or any renewed or extended term hereof or earlier termination of this agreement.
• Upon the expiration of the initial term or the renewal term, whichever is applicable, the party that has the positive position as determined by the ledger account shall be entitled to retain the net balance of the ledger account.
• Upon the occurrence of any of the events described in specified section, producer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a producer under the Uniform Commercial Code), may terminate this agreement by providing written notice to packer. The termination shall be complete upon receipt of notice by packer.
• Upon the occurrence of any of the events described in specified sections, packer, in addition to all of its other rights and remedies under applicable law (including, without limitation, the rights and remedies of a packer under the Uniform Commercial Code), may terminate this agreement by providing written notice to producer. The termination shall be complete upon receipt of notice by producer. The termination of this agreement as to producer shall not effect or impair the obligation of producers to deliver hogs to packer as provided in this agreement.
• Written notification with desire to terminate may be given by either party 90 days prior to the initial contract expiration or any consecutive annual renewals.
• Written notification with desire to terminate may be given by either party three months prior to agreement expiration. If notification to terminate is not received an automatic year renewal will apply.

Third Party Guarantees

• As an inducement for packer to enter into an agreement with producer, specified location, the undersigned guarantees to packer the prompt payment of all sums due and owing it under the agreement, including any interest collection costs and attorney fees incurred in enforcing the agreement. The undersigned waives notice of acceptance hereof, presentment, demand, protect, notice of protect or default, and consents that packer may, without affecting this guaranty, grant extensions or settlements, and may proceed directly against producer or against the undersigned without proceeding directly against producer of any collateral of producer. This guaranty shall bind the heirs, assigns and legal representatives of the undersigned.
• Each guarantor’s share of the obligations shall be determined by multiplying the total liability of all the guarantors under this personal guaranty times such guarantor’s percentage ownership interest in producer, as set forth below.
• Each of the parties to this agreement represents that it has full authority to enter into this agreement. Except where otherwise provided by law, this agreement shall be kept confidential and shall be known only to the parties hereto.
• Irrevocable payment means payments that cannot be set aside or required to be returned for any reason, including recovery under the provisions of the Bankruptcy Code. If any payment received by packer and applied to the obligations is subsequently set aside or required to be returned for any reason, the obligations to which such payment was applied shall be deemed to have continued in existence and this personal guaranty shall be enforceable as to such obligations.
• The guarantors hereby guarantee the satisfactory performance by producer of the agreement in accordance with all its terms and conditions. If producer defaults in performance of its obligations under the agreement, the guarantors shall be jointly and severally liable for any and all losses, damages, costs and reasonable expenses caused packer by reason of such default.
• This agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of packer and constitutes the legal, valid and binding obligation of packer enforceable in accordance with its terms.
• This agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of producer and constitutes the legal, valid and binding obligations of producer enforceable in accordance with its terms.
• This guaranty is an absolute, unconditional and continuing one and shall terminate only on the satisfaction of each and every obligation of producer under this agreement, including without limitation irrevocable payment and performance in full of the obligations. Irrevocable payment means payments that cannot be set aside or required to be returned for any reason, including recovery under the provisions of the Bankruptcy Code. If any payment received by packer and applied to the obligations is subsequently set aside or required to be returned for any reason, the obligations to which such payment was applied shall be deemed to have continued in existence and this guaranty shall be enforceable as to such obligations.
• This guaranty shall be a continuing guaranty and shall be binding upon producer with respect to all goods, shipped or delivered to packer by the undersigned under this agreement (including goods in transit), before the receipt by packer of written notice of revocation thereof.
• Unless producer is a sole proprietorship, all obligations of producer under this agreement shall be personally guaranteed by all of the individuals who are the direct or indirect shareholders, partners, members or other owners of producer (collectively, the guarantors), each of whom must execute this agreement. No corporation, partnership, limited liability company or other entity may be a guarantor. Rather, the individuals who directly or indirectly own a corporation, partnership, limited liability company or other entity which is an owner of producer shall constitute guarantors. In consideration of and as a material inducement to packer to enter into this agreement with producer (for purposes of this personal guaranty, this agreement shall include this agreement and any modification, extension and amendment thereof), the guarantors agree as follows.

Waiver of Enforcement

• Failure of packer or producer to insist upon strict performance of any of the terms and conditions hereof, or failure or delay to exercise any right or remedies provided herein, or by law, or to properly notify either party in the event of breach or the acceptance of payment for any goods hereunder, shall not release either party from any of the warranties or obligations of this agreement, and shall not be deemed a waiver of any right by either party to insist upon strict performance hereof, or any of its rights or remedies as to any such goods regardless when shipped, received or accepted, or as to any prior or subsequent default hereunder, nor shall any purported oral modification operate as a waiver of any of the agreement terms.
• No failure of either party hereto to exercise any power reserved to it by this agreement, or to insist upon strict compliance by the other party hereto with any obligation or condition hereunder, and no custom or practice by the parties at variance with the terms hereof, shall constitute a waiver of estoppel of a party's right to demand exact compliance with any of the terms herein. Waiver by a party of any particular default by the other party shall not affect or impair a party's rights with respect to any subsequent default of the same, similar, or different nature, nor shall delay, forbearance, or omission of a party to exercise any power or right arising out of any breach or default by the other party hereto constitute a waiver by a party of any right hereunder, or the right to declare any subsequent breach or default or to terminate this agreement prior to the expiration of its term.
• The failure of either party to enforce any of the provisions of this agreement, or to exercise any option which is herein provided, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a waiver of such provisions, nor in any way affect the validity of this agreement or any part thereof, or the right of either party to thereafter enforce each and every such provision.
• The failure of either party to enforce or exercise its rights under any provision of this agreement or to require at any time a certain performance of the other party of any of the provisions herein, shall in no way be construed to be a waiver of such provision, nor in any way affect the validity of this agreement or any part thereof, or the right of either party thereafter to enforce each and every such provision.
• The guarantors hereby expressly waive (i) all demands and notices of any kind with respect to any or all of the obligations, whether provided for by agreement, law or otherwise; (ii) any and all rights to cause a marshalling of producer assets or to cause packer to proceed against any security or other recourse packer may have for the obligations; and (iii) any requirements that packer institute any action or proceeding at law or in equity, or obtain any judgment, against producer or any other person, as a condition precedent to making demand on, or bringing an action or obtaining and/or enforcing a judgment against, the guarantors upon this guaranty except that the guarantors shall have the right to contest liability hereunder based on defenses to the obligations in an action or proceeding at law or in equity.
• 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 shall not affect the validity of this agreement, or the right of either party to thereafter enforce every provision of this agreement.

Warranties/Guarantees

• Producer represents and warrants to packer that the certificate dated and effective as of the date on which this agreement was executed and delivered by the parties is true, accurate and complete in all respects.
• Producer makes no warranties, either expressed or implied, to packer other than as may be specifically set forth herein. Packer expressly disclaims the making of, and producer acknowledges, that producer has not received or relied upon, any warranty or guaranty, either expressed or implied, including, but not limited to, any implied warranties of merchantability or fitness for a particular purpose, regarding genetic, medication or feeding program prescribed under this agreement, or any potential profits or success of the transactions addressed in this agreement. Producer should disregard any unauthorized information, whether oral or written, from any representative of packer concerning the volume, profitability, or chance of success of the transactions represented by this agreement. Producer recognizes and accepts the risks and hazards inherent in or associated with livestock production.
• Producer represents and warrants to packer that it has, as of the date of this agreement, no outstanding rights, options or other contractual obligations pursuant to which it is or may be obligated to sell hogs to any person or entity other than packer at any time during the term or any renewed or extended term of this agreement and that producer's grant to packer of the right described in this section does not violate, conflict with, or constitute a default under, the terms of any other agreement, commitment, instrument or understanding, written or oral, to which producer is a party or to which producer's hogs may be subject.

Review other sections of the Contract Summary Report by selecting from the list below.
Determination of base price
Premiums and discounts
Application of ledger