CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

DISTILLER’S GRAIN OFF-TAKE AGREEMENT
(HERON LAKE, MINNESOTA)
THIS DISTILLER’S GRAIN OFF-TAKE AGREEMENT (“Agreement”) is dated as of September
24, 2013, by and between HERON LAKE BIOENERGY LLC a Minnesota limited liability
company (“Producer”), and GAVILON INGREDIENTS, LLC, a Delaware limited liability
company (“Gavilon”) (each, a “Party”, and collectively, the “Parties”).
RECITALS:
(a)Producer owns and operates an ethanol production facility (the “Facility”)
located in Heron Lake, Minnesota ; and
(b)    Producer has agreed to sell to Gavilon, and Gavilon has agreed to
purchase from Producer, all distiller’s grains produced at the Facility on the
terms and conditions set forth hereinafter.
AGREEMENT:
NOW THEREFORE, in consideration of these premises and for the mutual promises
and covenants contained herein, the Parties agree as follows:
1.1
Term. This Agreement shall become effective on November 1, 2013 and shall remain
in effect for [***]. Thereafter, this Agreement shall continue until terminated
by either Party upon no less than sixty (60) days prior written notice, provided
that such termination shall have no effect with respect to any Confirmed Orders
entered into prior to the effectiveness of such termination.

2.    Delivery Obligations; Price and Payment.
2.1
Delivery. During the Term, Producer shall sell and make available for delivery
to Gavilon, and Gavilon shall purchase and take delivery of all distiller’s
grains produced at the Facility. Such distiller’s grains shall meet the
applicable specifications set forth herein (“Product”).

2.2
Price; Payment Terms. The price for Product sold hereunder (the “Price”) shall
be based on market-price bids from Gavilon’s customers, less (a) Logistics Costs
and (b) the applicable Service Fee. Gavilon agrees to use commercially
reasonable efforts to achieve the highest Price available under prevailing
market conditions. Payments on all undisputed amounts shall be made within ten
(10) business days from Gavilon’s receipt of the information set forth in
Section 2.4. Payments shall be made via wire to a bank account specified by the
Producer.

2.3
Logistics Costs; Fees; Net Price. For purposes of this Agreement, “Logistics
Costs” means the costs, without markup, for providing services related to or
connected with either (i) transporting, storing, transloading, and otherwise
handling (including demurrage, and shrinkage costs unless caused by the acts or
omissions of Gavilon) Product after delivery to Gavilon, or (ii) the delivery of
Transport Vessels to the Delivery Point (as defined in Section 5.5) for loading.
The applicable Service Fee for Gavilon purchase shall be as follows:

#2419907

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2.3.1
With respect to dried distillers grains, [***].

2.3.2
With respect to wet distillers grains, [***] of wet distillers grains sold

The term “Net Price” means the delivered price of Product to the customer, less
Gavilon’s Logistics’ Costs (as communicated to Producer by Gavilon at the time
the Parties enter into a Confirmed Order) to deliver such Product from the
Facility to the customer, expressed in dollars per ton. Thereafter, any variance
in Logistics Costs occurring with respect to each such Confirmed Order shall be
for Gavilon's account.
2.4
Billing Information. For each shipment of Product to Gavilon, Producer shall
furnish the following in reasonable detail: (i) an invoice giving the actual
quantity and date of shipment of the Product, (ii) the applicable weight
certificate(s) described in Section 3.2.

2.5
Payment Verification. Any payment made pursuant to this Section will not
preclude a Party from subsequently verifying payments of the other Party as
permitted in Section 14.3 of this Agreement. Each party shall use commercially
reasonable efforts to resolve any disputed payment amounts within 72 hours of
the time notice of such dispute was received by the non-disputing party.

2.6
Taxes. Producer shall pay or cause to be paid all valid levies, assessments,
duties, rates and taxes (together “Taxes”) on Product delivered hereunder that
arise prior to, or as a result of, the sale and delivery of Product at the
Delivery Point. Gavilon shall pay or cause to be paid all Taxes, including fuel
or excise Taxes, on Product that arise after the sale (other than third-party
sales) and delivery of Product to Gavilon at the Delivery Point.

3.    Quantity and Quality.
3.1
Delivery. Delivery and receipt of Product purchased hereunder shall take place
at the applicable Delivery Point (as defined in Section 5.5) in accordance with
the corresponding Confirmed Order. The Parties shall establish a mutually agreed
Delivery Schedule as defined and described in Exhibit “A”.

3.2
Quantities. The quantity of Product delivered to Gavilon shall be established by
outbound weight certificates, as evidenced by the weight documentation provided
by Producer. The certificates shall be obtained daily from either scales or
other metering devices which are certified as of the time of weighing and which
comply with all applicable laws, rules and regulations. Gavilon shall have the
right to test such scales or devices at any time provided that such testing
shall not cause any unreasonable disruption to Producer’s operations at the
Facility.

3.3
Standards. Producer understands that Gavilon intends to sell the Product as a
primary animal feed ingredient and that such Product are subject to minimum
quality standards for such use. Producer agrees and warrants that the Product
shall be accepted in the feed trade under current industry standards, shall
fully comply with any applicable state and federal laws governing quality of
product, and shall be free and clear of liens and encumbrances.

3.4
Specifications. Producer warrants that unless otherwise mutually agreed in
writing all Product sold hereunder shall, at the time of delivery to Gavilon,
conform to the minimum quality requirements set forth in this Section 3.4. The
values quoted below are on an “as

2

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fed” basis. Each shipment of Product shall include a copy of the guaranteed
analysis, which shall be registered with the State of Minnesota. Producer may
modify the specifications set forth in this Section 3.4 upon no less than 60
days written notice to Gavilon, provided that the specifications of Product that
is the subject of a Confirmed Order may only be modified upon mutual written
agreement of Gavilon and Producer.
Dried Distillers Grains
 
Crude Protein
Crude Fat
Crude Fiber
Moisture
 
 
Min
Max
Min
Max
Min
Max
Min
Max
 
 
25
 
7.0
 
 
15
 
12.5
 
 
 
 
 
 
 
 
 
 
 
Wet Distillers Grains
 
Crude Protein
Crude Fat
Crude Fiber
Moisture
 
 
 
Min
Max
Min
Max
Min
Max
Min
Max
 
 
11
 
4.0
 
 
5.5
 
60
 

3.5
No Adulteration or Misbranding. Producer warrants that at the time of loading,
the Product will not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act and that each shipment may lawfully be
introduced into interstate commerce under such Act. Payment of invoices does not
waive Gavilon’s rights if the Product do not comply with terms or specifications
of this Agreement.

3.6
Product Certification. Weekly samples from Product will be sent to an outside
laboratory for testing by Producer to ensure the Product conform to the
specifications in Section 3.4. The results of such test will be forwarded from
Producer to Gavilon upon receipt at the Facility.

3.7
Samples. Producer agrees to maintain a representative daily aggregate sample for
a period of three (3) months. Producer will retain these samples and shall
provide Gavilon access to such samples promptly upon request.

3.8
Nonconforming Product. If within five (5) days after arrival at customer Product
are found to be out of specification by Gavilon or by an independent laboratory
using industry approved analysis and sampling methods (“Nonconforming Product”),
such condition will be promptly communicated to Producer. Gavilon will provide a
copy of the certified laboratory report(s) evidencing the Nonconforming Product
along with available chain of custody documentation. Producer may, within the
succeeding five (5) days of receipt of such notice, take steps to refute or
verify such nonconformance, including by obtaining an independent certified lab
test and by observing conditions at the customer’s site that may impact test
results including chain of custody of sample. All disputes regarding
nonconforming product shall be settled pursuant to NGFA rules. Upon verification
of such nonconformance, Producer will then direct Gavilon to either (i) sell the
Nonconforming Product at a discounted

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price, or (ii) return the Nonconforming Product to Producer. If such
Nonconforming Product are not discountable, Producer may replace the
Nonconforming Product with an acceptable type and/or quality of Product within
five (5) days of receipt of written notice that the delivered Product are
nonconforming and that such nonconformance has been confirmed. In the event
Producer cannot replace the Nonconforming Product within the five (5) day
period, Gavilon shall have the option to return the Nonconforming Product,
withhold payment therefor and purchase replacement Product. Producer will be
responsible for all direct costs of replacing or disposing of any Nonconforming
Product, including any costs reasonably incurred by Gavilon as a result of the
Nonconforming Product and/or any unreasonable delay by Producer in obtaining
conforming Product. Such costs may include, without limitation, reasonably
incurred storage costs or costs reasonably incurred by Gavilon to return such
Nonconforming Product to Producer. If such Nonconforming Product are sold by
Gavilon at a discount, the Price payable by Gavilon will be calculated in the
normal manner.
3.9
Quality Control Procedures. Upon Producer’s receipt of the applicable truck or
railcar, as (the “Transport Vessel”) and prior to product loading in each such
Transport Vessel, Producer will visually inspect for equipment integrity,
safety, and potential contamination. Producer shall notify Gavilon immediately
in the event any Transport Vessel does not meet the minimum requirements. In the
event a Transport Vessel provided by Gavilon is unsuitable for loading due to
any of the aforementioned reasons, Gavilon shall arrange for a substitute
Transport Vessel to arrive for loading within twenty-four (24) hours of
Producer’s notification to Gavilon, or such longer period of time as may be
agreed between Producer and Gavilon acting in a commercially-reasonable manner.

4.    Third-Party Sales; Shortfalls.
4.1
Third-Party Sales. Section 2.1 notwithstanding, should Producer receive offers
to purchase Product (i) in which delivery would occur more than fifteen (15)
days forward, and (ii) at prices that would be more favorable to Producer than
the gross price (exclusive of Service Fee) offered by Gavilon (but on terms that
are otherwise customary and comparable to those set forth herein), Producer
shall give Gavilon written notice of the delivery terms, quantity and sales
price available to Producer as well as the third party offering those more
favorable terms. If Gavilon does not match the third-party terms within one (1)
business day of receipt of such notice, Producer may then sell Product to such
third party in the quantities and prices as notified to Gavilon. In such event,
at Producer’s written request, Gavilon shall generally assist Producer with the
logistics relating to third-party sales. To the extent Producer requests Gavilon
to assist with logistics of third-party sales, Producer shall pay Gavilon a
service fee equal to [***]. No third-party sales shall affect any Confirmed
Orders (as defined in Exhibit “A”) previously established between the Parties
unless agreed upon in writing by both Parties.

4.2
Purchase Shortfall. If Gavilon fails to purchase and take delivery of any
quantities of Product specified in Confirmed Orders, and Producer after using
commercially reasonable efforts to mitigate any damage, has produced and must
sell such Product to a substitute purchaser at a price lower than the applicable
Price, Gavilon shall pay Producer the amount by which the applicable Price
exceeds the actual sales price per ton, multiplied by the number of tons sold to
the substitute purchaser. If Producer exercises commercially reasonable efforts
and is still unable to sell any such Product to a substitute purchaser, then
Gavilon

4

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shall pay Producer an amount equal to the Price multiplied by the entire unsold
portion. Gavilon shall remit payment within five (5) business days following the
invoice date and receipt of supporting documentation. In either case, Gavilon
shall also pay any additional costs solely and directly incurred by Producer to
identify a substitute purchaser, to store the Product until they can be sold or
disposed of, or to dispose of the Product remedy specified in this Section 4.2
shall be Producer’s sole and exclusive remedy in the event Gavilon fails to
purchase and take delivery of the Product specified in the Confirmed Order.
4.3
Delivery Shortfall. If Producer fails to make available for purchase the
quantity of Product specified in Confirmed Orders, and Gavilon, using
commercially reasonable efforts to mitigate any damage, is unable to obtain a
substitute supply of Product at a price equal to or less than the Price,
Producer shall pay Gavilon the amount by which the Price is less than the price
paid by Gavilon for substitute supply, multiplied by the delivery shortfall
(Confirmed Order quantity less the amount actually delivered by Producer); plus
any additional costs solely and directly incurred by Gavilon to identify a
substitute purchaser. Such payment shall be remitted within five (5) business
days following the invoice date and receipt of supporting documentation. The
remedy specified in this Section 4.3 shall be Gavilon’s sole and exclusive
remedy in the event that Producer fails to supply the quantity of Product
specified in the Confirmed Order.

5.    Transportation and Logistics.
5.1
Logistics Responsibilities. Gavilon shall be responsible for the management of
logistics which arise prior to the Transport Vessel reaching the Delivery Point,
and which arise after the Product is completely loaded onto the Transport Vessel
(“Delivery”). This responsibility will include the management of Producer’s
railcar fleet as further described in Section 5.6. Producer shall be responsible
for all logistics that arise once the Transport Vessel has reached the Delivery
Point up through Delivery. Gavilon will be responsible for monitoring logistics
while the Transport Vessel is at destination to ensure efficient offloading.
Gavilon will secure and maintain all licenses, documents and contracts necessary
to transport Product following Delivery.

5.2
Hours of Operation. Producer shall use commercially reasonable efforts to keep
the Facility open for truck delivery between the hours of 7:00 am to 5:00 pm
Monday through Friday (“Normal Operating Hours”). Gavilon may from time to time
request that the Facility be accessible during other times or days. Producer
will attempt to accommodate these requests provided Gavilon pays for any
associated overtime costs incurred by Producer. Producer will promptly notify
Gavilon in advance of scheduled events where truck delivery will not be
possible. In instances where an unscheduled event makes truck delivery
impossible, Producer will immediately notify Gavilon so that Gavilon may contact
the applicable carriers.

5.3
Producer’s Demurrage Obligations. Producer’s responsibility for Demurrage if
actual Demurrage compensation is sought, for trucks will begin to accrue after
the second (2nd) hour waiting to load at the Facility provided the truck arrived
during Normal Operating Hours. For purposes of this Agreement, the term
“Demurrage” includes all costs, damages, penalties and charges resulting from
any delay in loading and/or unloading of DDG shipments, whether due to
mechanical failure or other event outside the course of normal

5

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operations but not including delays resulting from the occurrence of multiple
trucks arriving to load within the same general time period.
5.4
Notification of Problems with Delivery. Producer shall inform Gavilon of any
problem regarding any shipment of Product, without delay, by fax, telephone, or
email, after Producer becomes aware of any such problem. This may include an
event that could result in an unscheduled Facility shutdown, or the possible
event that one or more Product orders are not available from Producer in the
quantity originally set out in the Confirmed Order. Gavilon shall inform
Producer of any problems in delivering Transport Vessels in accordance with the
Delivery Schedule.

5.5
Delivery Point. For purposes of this Agreement, the term “Delivery Point” means,
with respect to Transport Vessels, the location at the Facility where the
Transport Vessel is received for loading, as follows: the Delivery Point for
railcar shipments is the railroads’ “constructively placed” designation; and the
Delivery Point for trucks is the arrival of the truck at the Facility within the
loading hours specified in this Agreement. “Delivery Point” means, with respect
to Product, the location at the Facility where the loading of Product is
completed on railcars or trucks, as follows: the Delivery Point for railcar
shipments is the railroads’ “constructively placed” designation and the Delivery
Point for truck shipments is the departure of the loaded truck from the
Facility.

5.6
Railcars. Producer will provide at its cost and expense all railcars required
for Gavilon to deliver the Product sold hereunder. Consequently, railcar lease
costs will not be included in Logistics Costs. In the event Producer experiences
a shortage of railcars, Gavilon will sublease, on a monthly basis, such railcars
as it may have available upon request by Producer. The monthly sublease charges
will be based on market value (values proposed by Gavilon and accepted by
Producer) lease costs and will be deducted from amounts otherwise payable by
Gavilon to Producer.

6.    Possession and Title.
6.1
Title; Risk of Loss. Title to and risk of loss in Product purchased hereunder
shall pass from Producer to Gavilon upon Delivery. Until such time, Producer
shall be deemed to be in control of and in possession of and shall have title to
and risk of loss in the Product.

6.2
Responsibility for Product. Gavilon shall have no responsibility or liability
with respect to any Product until Delivery thereof pursuant to this Agreement.
Without prejudice to Gavilon’s right to reject Nonconforming Product as set
forth in Section 3 and without affecting Producer’s liability for the Delivery
of Nonconforming Product, Producer shall have no responsibility or liability
with respect to Product after its Delivery.

7.    Producer Representation
7.1
Producer represents and warrants that entry into this Agreement with Gavilon
will not cause and/or result in a breach of any agreement in existence between
Producer and any other party and that Producer is fully able to perform the
terms of this Agreement and doing so will not result in or cause a breach of any
obligation and/or duty that Producer has to any other Party.

8.    Default and Termination.

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8.1
Events of Default. The occurrence of any of the following shall be an “Event of
Default” under this Agreement:

8.1.1
Breach by either Party in the performance of any material covenant or agreement
set forth in this Agreement (subject to Section 8.1.3) and such breach continues
uncured for more than thirty (30) days following written notice thereof from the
non-defaulting Party; or

8.1.2
If either Party becomes insolvent or generally fails to pay its debts as they
come due, or makes a general assignment for the benefit of creditors or to an
agent authorized to liquidate any substantial amount of its assets, or is
adjudicated bankrupt or has a receiver or custodian appointed with respect to a
substantial part of its property, or files a petition in bankruptcy, or applies
to a court for the appointment of a receiver for any of its assets or
properties; or

8.1.3
If either Party fails to make payment hereunder within five (5) business days
following receipt of written notice from the non-defaulting Party; or

8.1.4
The making of a materially incorrect or misleading representation or warranty
under this Agreement; or

8.2
Remedies; Termination. Upon an Event of Default, the non-defaulting Party shall
notify the other Party thereof and shall have available all remedies set forth
in this Agreement. Without limiting the foregoing, if an Event of Default occurs
and is not waived, the non-defaulting Party may immediately terminate or suspend
performance under this Agreement by promptly thereafter delivering written
notice thereof to the other Party. The defaulting Party shall be responsible for
any other costs and expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) incurred by the non-defaulting Party in
connection with an Event of Default.

8.3
Right to Close Out Transactions. Upon an Event of Default, the non-defaulting
Party shall (in addition to any other rights or remedies available to it,
whether at law or in equity, by contract or otherwise) have the right, upon
twenty four (24) hours notice to the defaulting Party to liquidate and terminate
any or all transactions then outstanding between the Parties (except to the
extent that in the good faith opinion of the non-defaulting Party certain of
such transactions may not be closed out and liquidated under applicable law) at
any time and from time to time. No such notice shall be required with respect to
termination pursuant to Section 8.2. The non-defaulting Party shall then
calculate, in a commercially reasonable manner, a Settlement Amount (as defined
below) for each transaction as of the time of its termination or as soon
thereafter as is reasonably practicable and shall net such Settlement Amounts in
the manner provided for below.

The Settlement Amount shall be due to or from the non-defaulting Party as
appropriate. In calculating a Settlement Amount, the non-defaulting Party shall
discount to present value (in a commercially reasonable manner based on rates
for the applicable period) any amount which would otherwise have been due at a
later date and shall add interest (at a rate determined in the same manner) to
any amount due prior to the date of the calculation.
The non-defaulting Party shall set off (i) all such Settlement Amounts that are
due to the defaulting Party, plus any margin then held by the non-defaulting
Party, plus (at the non-

7

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defaulting Party’s election) any or all other amounts due to the defaulting
Party under this Agreement, against (ii) all such Settlement Amounts that are
due to the non-defaulting Party, plus (at the non-defaulting Party’s election)
any or all other amounts due to the non-defaulting Party under this Agreement or
otherwise, so that all such amounts shall be netted to a single liquidated
amount (“Net Settlement Amount”) payable by one Party to the other. The Party
with the Net Settlement Amount shall pay such amount to the other Party within
one (1) business day of demand therefor.
If an Event of Default occurs, the non-defaulting Party (at its election) may
set off any or all amounts which the defaulting Party owes to it (whether under
this Agreement or otherwise and whether or not then due) against any or all
amounts which it owes to the defaulting Party (whether under this Agreement or
otherwise and whether or not then due), provided that any amount not then due
which is included in such setoff shall be discounted to present value as at the
time of setoff (to take account of the period between the date of setoff and the
date on which such amount would have otherwise been due).
For purposes of this Agreement, “Settlement Amount” means, with respect to each
transaction arising under a Confirmed Order, the losses and costs (or gains),
which the non-defaulting Party incurs as a result of a liquidation pursuant to
this Section 8.3 including, but not limited to, losses and costs (or gains)
based upon the then-current replacement value of such transaction (taking into
account any portion of the Confirmed Order quantity already delivered as of the
liquidation), together with, at the non-defaulting Party’s option but without
duplication, all losses and costs which such Party incurs as a result of
maintaining, terminating, obtaining, or re-establishing any hedge or related
trading positions.
9.    Confidentiality.
9.1
Nondisclosure of Confidential Information. Each Party acknowledges that, by
reason of this Agreement it and its principals, employees, advisors, lenders,
and affiliates may receive confidential or proprietary information belonging to
the other Party. In no event will the terms and conditions of this Agreement be
disclosed except to the extent required by applicable law or as agreed upon in
writing by both Parties. The confidentiality obligations hereunder shall survive
any expiration or termination of this Agreement. Notwithstanding the foregoing,
confidential information may be delivered to third parties for the sole purpose
of calculating a published pricing index.

9.2
Announcements.  Any public statements, press releases, and similar
announcements concerning the negotiation or consummation of the transactions
contemplated hereby, including such statements made by any representative of the
Parties, shall be jointly planned and coordinated by the Parties.  Neither Party
shall issue any such statement without the prior review (for which the reviewing
Party shall have a minimum of five (5) business days) and consent of the other
Party, which consent shall not be unreasonably withheld or delayed. In no event
will the terms and conditions of this Agreement be disclosed except to the
extent required by applicable law.

10.    Limitation of Liability; Indemnification; Insurance.
10.1
Limitation of Liability. Without limiting any express remedies set forth in this
Agreement, and except for any acts of willful misconduct or fraud, or damages
arising from third-party product liability and product warranty claims, neither
Producer nor Gavilon will be liable

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to each other or any third party for any indirect, consequential, punitive,
exemplary or special damages, loss of business expectations, lost profits, or
business or facility interruption or shut-down costs.
10.2
Indemnification. Each Party (the “Indemnitor”) shall release, defend, indemnify
and hold harmless the other party, its affiliates, its contractors, and their
respective members, partners, directors, officers, shareholders, managers,
employees, agents and representatives from and against any and all losses,
damages, fines, liens, levies, penalties, claims, demands, causes of action,
suits, legal or administrative proceedings, orders, governmental actions and
judgments of every kind and character, and any and all costs and expenses
(including, without limitation, reasonable attorneys’ fees, reasonable expert
witness fees, and court costs) related thereto (collectively, “Claims”) which
arise out of, result from or relate in any way, directly or indirectly, to (a) a
breach of this Agreement by the Indemnitor, or (b) the acts or omissions
hereunder of the Indemnitor or its affiliates, contractors, and their respective
members, partners, directors, officers, shareholders, managers, employees,
agents and representatives.

Producer shall specifically defend, indemnify and hold Gavilon (and its
respective Indemnitee Group) harmless from and against any and all Claims
asserted by third parties that arise from the condition or quality of the
Product sold hereunder, except to the extent such Claims are the result of the
acts or omissions of Gavilon, its agents or any third party following Delivery
hereunder.
The Party claiming indemnification shall give prompt written notice to the
Indemnitor of any matter for which the Indemnitor may become liable under this
provision. Such notice shall contain full details of the matter in order to
provide the Indemnitor with sufficient information to assess its potential
liability and to undertake defense of the Claim. The indemnified Party shall
have the right at all times to participate in the preparation for and conducting
of any hearing, trial or other proceeding related to the provisions of this
Section, as well as the right to appear on its own behalf at any such hearing,
trial or other proceeding. Any such participation or appearance by the
indemnified Party shall be at its sole cost and expense. The indemnified Party
shall cooperate in all reasonable respects with the Indemnitor and its counsel
in defending any Claims and shall not take any action that is reasonably likely
to be detrimental to such defense. The Indemnitor shall obtain written approval
from the indemnified Party prior to any settlement that might impose obligations
or restrictions on the indemnified Party.
10.3
Insurance. Each Party shall, during the Term, provide the insurance coverages as
set forth in Exhibit “B”.

11.    Force Majeure.
11.1
Force Majeure. In the event either Party hereto is rendered unable by reason of
Force Majeure, to carry out its obligations under this Agreement, such Party
shall promptly give written notice and reasonably complete particulars of such
Force Majeure to the other Party stating the obligation(s) the performance of
which are, or are expected to be, delayed or prevented. Notwithstanding anything
herein to the contrary, the obligations of the notifying Party shall be
suspended during and to the extent affected by Force Majeure and such event
shall, so far as possible, be remedied with all reasonable dispatch.

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11.2
Definition of Force Majeure. The term “Force Majeure” shall mean any act, event
or circumstance not reasonably within the control of the Party claiming
suspension and which, by the exercise of due diligence, such Party is unable to
prevent or overcome. Such term shall include, but not be limited to: (i) acts of
God, (ii) strikes, lockouts or other industrial acts of the public enemy, (iii)
wars, blockades, insurrections, riots, epidemics, acts of terrorism, (iv)
transportation shortages, (v) landslides, lightning, earthquakes, fires, storms,
floods, washouts, (vi) civil disturbances, and (vii) explosions. The term “Force
Majeure” shall specifically include those events affecting any of Gavilon’s
transporters of Product as well as regulatory changes which make the production
and sale of Product unfeasible, but shall otherwise exclude any economic or
commercial changes involving the production of Product.

12.    Risk Management; Reporting.
12.1
Monitoring of DDG Positions. Gavilon will monitor DDG sales made hereunder and
may, from time to time, make suggestions concerning Producer’s risk management
program and the position of its DDG sales for future physical delivery.

12.2
Marketing Conditions. On an as needed basis, but not less frequently than
weekly, Gavilon will review with Producer market conditions relating to Product,
and forward marketing strategies in an attempt to assist Producer in maximizing
its revenue on DDG sales. It is understood by Producer that all risk management
services must be tied to a valid written purchase contract requiring physical
delivery of Product to Gavilon.

12.3
No Liability. Producer recognizes that Gavilon’s monitoring of DDG positions,
periodic suggestions, review of market conditions and risk management services
are informational and optional, and that the final decisions considering sales
and risk management strategies, and the implementation of such strategies, will
be made by, and is the sole responsibility of, Producer. Gavilon is not
responsible for any Producer losses or entitled to any Producer gains resulting
from risk management information supplied by Gavilon.

13.    Notices. Except as specifically otherwise provided herein, any notice or
other written matter required or permitted to be given hereunder by one Party to
the other Party shall be deemed to be sufficiently given if delivered by hand or
by nationally-recognized overnight courier, or sent by U.S. mail (certified
mail, return receipt requested), and addressed as follows:
If to Gavilon:    Gavilon Ingredients, LLC
Eleven ConAgra Drive, STE 11-160
Omaha, NE 68102-5011
Attn:    VP, Ingredients

With copy to:    Legal Department
Gavilon Ingredients, LLC
Eleven ConAgra Drive, STE 11-160
Omaha, NE 68102

If to Producer:                 Heron Lake BioEnergy, LLC
91246 390th Avenue
Heron Lake, MN 56137

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Attn: Eric Baukol

    
Any notice or other written matter shall be deemed to have been given and
received: if delivered by hand, on the date of delivery; and, if sent by
telecopy, on the business day following the sending of the notice.
14.    Miscellaneous.
14.1
Assignment. Neither Party may assign any of its rights or obligations under this
Agreement without the prior written consent of the other Party, not to be
unreasonably withheld. A change in fifty percent (50%) or more in the ownership
of a Party shall be construed to be an assignment for purposes of this Section.
The above notwithstanding, either Party may, without the need for consent from
the other Party: (i) transfer, sell, pledge, encumber or assign this Agreement,
including the revenues or proceeds hereof, in connection with any financing
arrangements; (ii) transfer or assign this Agreement to an affiliate as long as
the affiliate is at least as creditworthy as the other Party; or (iii) transfer
or assign this Agreement to an entity succeeding to all or substantially all of
the assets of the other Party by way of merger, reorganization or otherwise. No
assignment permitted hereunder shall in any way relieve the assigning Party from
liability for full performance hereunder.

14.2
Records. Each Party will establish and maintain true and accurate books, records
and accounts relating to their own transactions under this Agreement with
respect to all Prices charged, payments made, and quantities of Product
delivered hereunder. These books, records and accounts will be preserved by the
applicable Party for a period of at least one (1) year after the expiration of
the term of this Agreement, but in no event longer than seven (7) years from the
date of creation.

14.3
Audit Rights. Upon five (5) business days notice and during normal business
hours each Party has the right to audit such books, records and accounts of the
other Party to the extent necessary in order to verify the accuracy of any
statement, charge, computation or demand made under or pursuant to any provision
of this Agreement. If any material error is discovered in any statement rendered
hereunder, such error will be adjusted within seven (7) days from the date of
discovery, but no adjustment will be made for errors discovered more than two
years after delivery and receipt of such statements. Any error or discrepancy
detected which has led to an overpayment or an underpayment between the Parties
shall be corrected by an appropriate balancing payment to the underpaid Party or
by a refund by the overpaid Party.

14.4
Inurement. This Agreement will inure to the benefit of and be binding upon the
respective successors and permitted assigns of the Parties.

14.5
Entire Agreement. This Agreement and the Exhibits attached hereto constitute the
entire agreement between the Parties with respect to the subject matter
contained herein and any and all previous agreements, written or oral, express
or implied, between the Parties or on their behalf relating to the matters
contained herein are hereby terminated and canceled. In the event of a conflict
between the terms of this Agreement and any Confirmed Orders, this Agreement
shall govern.

For avoidance of doubt, the Parties agree that the provisions of Sections 8, 9,
10, and 12 of the Terms and Conditions of a sales contract sent for any
Confirmed Orders between Producer

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and Gavilon shall not apply provided that, such exclusion shall in no way render
any provisions of this Agreement (including, without limitation, Section 8 of
this Agreement) inapplicable.
14.6
Amendments. There will be no modification of the term and provisions hereof
except by the mutual agreement in writing signed by the Parties.

14.7
Financial Information. If requested by a Party hereto, the other Party shall
deliver within one hundred twenty (120) days following the end of each fiscal
year, a copy of its audited consolidated financial statements for such fiscal
year certified by independent certified public accountants. In all cases the
statements shall be for the most recent accounting period and prepared in
accordance with generally accepted accounting principles, consistently applied;
provided, however, should any such statements not be available timely due to a
delay in preparation or certification, such delay shall not be considered a
default so long as the Party providing the statements diligently pursues the
preparation, certification and delivery of the statements. Notwithstanding the
foregoing, Gavilon shall not be obligated to provide such financial information
until Producer signs a nondisclosure agreement, in a form acceptable to Gavilon,
pertaining to such information.

14.8
Trade Rules; Governing Law; Venue. All purchases and sales made hereunder shall
be governed by the Feed Trade Rules of the National Grain and Feed Association
(“NGFA”). In the event of a conflict between the terms set forth in this
Agreement and the NGFA Rules the terms set forth herein shall control. The
Agreement will otherwise be interpreted, construed and enforced in accordance
with the procedural, substantive and other laws of the State of Nebraska without
giving effect to principles and provisions thereof relating to conflict or
choice of law even though one or more of the Parties is now or may do business
in or become a resident of a different state. All disputes arising out of this
Agreement shall be submitted to binding arbitration in accordance with the NGFA
Rules. EACH PARTY HEREIN WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH
RESPECT TO ANY LITIGATION ARISING UNDER, OR IN CONNECTION WITH, THIS AGREEMENT
OR ANY CONFIRMED ORDER.

14.9
Cumulative Remedies. Unless otherwise specifically provided in this Agreement,
the rights, powers, and remedies of each of the Parties provided in this
Agreement are cumulative and the exercise of any right, power or remedy under
this Agreement does not affect any other right, power or remedy that may be
available to either Party under this Agreement or otherwise at law or in equity.

14.10
No Partnership. This Agreement shall not create or be construed to create in any
respect a partnership or any agency or joint venture relationship between the
Parties.

14.11
Costs To Be Borne by Each Party. Producer and Gavilon shall pay its own costs
and expenses incurred in the negotiation, preparation and execution of this
Agreement and of all documents referred to in it.

14.12
Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if Producer and Gavilon had signed the same document and all
counterparts will be construed together and constituted as one and the same
instrument.

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14.13
Severability. Any provision of this Agreement, which is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate or impair the remaining
provisions of this Agreement, and the remaining terms of this Agreement shall
continue in full force and effect.

14.14
Forward Contract/Forward Contract Merchants. The Parties agree that each of them
is a forward contract merchant as set forth in 11 U.S.C. §101 (25). The Parties
also agree that this Agreement is a forward contract as defined in 11 U.S.C.
§101 (25). The payments and transfers described herein shall constitute
“Settlement Payments” or margin as set forth in 11 U.S.C. §§ 101 (51A) and (38).

14.15
Headings; Construction. The article and section headings used herein are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. Unless the context of this Agreement otherwise
requires, (i) words using the singular or plural number shall also include the
plural or singular number, respectively; and (ii) the terms “hereof,” “herein,”
“hereby,” “hereto,” and derivative or similar words shall refer to this entire
Agreement. The Agreement is the product of negotiation by and among the Parties
hereto. The Agreement shall be interpreted and constructed neutrally as to all
Parties, without any Party deemed to be the drafter of the Agreement. Any word,
phrase or expression that is not defined in this Agreement and that has a
generally accepted meaning in the custom and usage in the renewable fuels
industry shall have that meaning in this Agreement.

14.16
Waiver. No delay or omission in the exercise of any right, power, or remedy
hereunder shall impair such right, power, or remedy or be construed to be a
waiver of any default or acquiescence therein.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first
above written.
GAVILON INGREDIENTS, LLC            HERON LAKE BIOENERGY, LLC

By:     /s/ Corey Dencklau                By:     /s/ Steve A.
Christensen        
Name:     Corey Dencklau                    Name:     Steve A.
Christensen            
Title:     VP of Ingredients                Title:         CEO & GM            

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EXHIBIT “A”

PLANNING, ORDERING AND DELIVERY OF PRODUCT
1.    Delivery Schedule. The parties shall jointly develop a schedule (the
“Delivery Schedule”) that will serve as the formal planning tool for Product to
be delivered.
The specific format of the Delivery Schedule will be mutually created by the
Parties. Gavilon shall review the initial draft of the Delivery Schedule and
advise Producer of inventory management, transportation and logistics issues
upon receipt. Gavilon shall amend the Delivery Schedule to reflect dates and
quantities for each Delivery of Product under Confirmed Orders, and the expected
mode of transport for these shipments. The Delivery Schedule will be updated and
submitted daily each morning to reflect prior day’s Deliveries or other
operational changes. Producer will be notified immediately when new truck orders
for Delivery added during a day to be picked up that same day occur. Producer
and Gavilon will establish at the start of each week how many rail Deliveries
are to be expected and which days they will occur on. Producer will update
Gavilon as needed on changes to this schedule.
2.    Confirmed Orders. Each purchase and sale of Product hereunder shall be
consummated by conversational approval via phone, email or instant message
acknowledged by Gavilon and Producer (each, a “Confirmed Order”) and shall be
evidenced by a separate sales contract, sent by Gavilon to Producer,
substantially in the form of Exhibit “C” attached hereto. Each Confirmed Order
shall specify the quantity, Delivery date(s), the Price, or Price referenced to
a Market Value, and any such other information as the Parties may agree to
include. Producer shall execute the applicable Confirmed Order and email the
executed document to Gavilon. Confirmed Orders may be executed in counterpart
and signatures exchanged by email shall be binding to the same extent as the
original, with the executing Party waiving any requirement that the receiving
Party produce or otherwise evidence the existence or delivery of the original.
To the extent that any terms of any Confirmed Order conflict with the terms of
this Agreement, the terms of this Agreement shall govern, unless, both Parties
have specifically expressed their intent in writing to supersede the terms of
this Agreement.
3.    Forward Liquidity and Market Tenor. It is understood that the forward
tenor on all bids will be based on, and limited by, market volatility and other
factors including Producer’s creditworthiness.
4.    Delivery Schedule Deviations. The Parties recognize the need to maintain a
degree of flexibility to accommodate unexpected changes in the Facility
operating capacity, and changing Product market conditions. Upon notification by
either Party of any deviations that potentially impact the normal business
operations of the Producer, Gavilon or the end user to the Delivery Schedule,
the Parties agree to work in good faith to jointly resolve any such discovered
deviations and correct such deviations within fifteen (15) days following first
notification.
5.    Liability Disclaimer. Each of the Parties understands and agrees that
except for quantity, type, quality and price quotations confirmed by the Parties
in Confirmed Orders pursuant to this Exhibit “A”, the planned production rates,
estimated costs, pricing and market information, and all other information
furnished by the Parties in the preparation of the Delivery Schedules is for
planning and informational purposes only. Neither Party shall be responsible to
the other for any actions taken in reliance on such estimates, plans and other
information.

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6.    Contact Information. Each Party shall appoint at least one (1) person to
act as the point of contact regarding delivery coordination, preparation of
Delivery Schedules, orders and order confirmation, and other technical and
logistical questions relating to Product or the delivery thereof. The respective
contact persons shall, unless notified otherwise, be as follows:
Producer:            
Eric Baukol
Heron Lake BioEnergy, LLC
91246 390th Avenue
Heron Lake, MN 56137        
Phone:        320-564-3100
E-Mail:        ebaukol@granitefallsenergy.com

Gavilon:            Corey Dencklau
Eleven ConAgra Drive (11-160)
Omaha, NE 68102
Phone:        (402) 889-4397
E-Mail:     Corey.Dencklau@gavilon.com
 

 

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EXHIBIT “B”

INSURANCE COVERAGES
Each Party shall purchase, maintain and provide proof (via Certificate of
Insurance) of the following insurance:
A.    Commercial General Liability Insurance - $2,000,000 per occurrence and
$2,000,000 aggregate. Such Policy shall include coverage for liability resulting
from Premises/Operations, Products and Completed Operations, Blanket and
Contractual Liability, Products Liability, Personal Injury and Advertising
Injury. Policy shall also included coverage for Broad Form Property Damage,
including explosion, collapse and underground hazards. Such insurance shall be
on an occurrence basis.

B.    Workers’ Compensation and Employers Liability Insurance including a waiver
of subrogation. Such insurance shall include but not be limited to:

(i) Statutory liability under the workers’ compensation laws of the state of
Minnesota.
(ii) Employers’ Liability (Part B) with limits of at least $1,000,000 each
accident, $1,000,000 by disease policy limit, $1,000,000 by disease each
employee.
C.    Commercial Automobile Liability Insurance with a $1,000,000 Combined
Single Limit, and including coverage for liability resulting from the operation
of all owned, non-owned and hired automobiles. Such insurance shall be on an
occurrence basis.
D.    Each Party shall also carry excess or umbrella liability insurance with
limits of at least $4,000,000 per occurrence for bodily injury or property
damage in excess of the limits afforded for general liability and automobile
liability provided above.
Each party shall name the other as “additional insured” on policies listed in A
and C above. All required policies of insurance shall be endorsed to provide
that the insurance company shall notify the certificate holder at least thirty
(30) days prior to the effective date of any cancellation or material change of
such policies. All insurance companies shall have an A.M. Best rating of A- VII
or better.

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EXHIBIT “C”
FORM OF SALES CONTRACT
BUYER AND SELLER HEREBY AGREE TO, AND CONFIRM, THE PURCHASE AND SALE OF THE
REFERENCED COMMODITIES, SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON
THE REVERSE SIDE OF THIS CONFIRMATION. FAILURE TO ADVISE GAVILON VIA E-MAIL,
FAX, OR OTHER WRITTEN FORM WITHIN FIVE (5) BUSINESS DAYS FOLLOWING YOUR RECEIPT
OF THIS CONFIRMATION OF ANY DISCREPANCY, OBJECTION TO, OR DISAGREEMENT WITH THIS
CONFIRMATION SHALL RESULT IN THIS CONFIRMATION'S AUTOMATICALLY BEING DEEMED
ACCEPTED BY YOU.
[Letterhead]
Contract of Purchase

Seller:     Date: _________________
[SELLER ADDRESS]    Our No: _______________
_________________    Your No: ______________
_________________    Broker: Broker No: _______
_________________    Broker Cont. ____________
Buyer:
GAVILON INGREDIENTS, LLC-OMAHA 11 CONAGRA DRIVE OMAHA NE 68102 Ph#:
(402)889-4371
Commodity:         DISTILLER'S GRAINS
Quantity:                                 Vomitoxin: Not to exceed 5 ppm
Shipment:                             Aflatoxin: Not to exceed 20 ppb
Price:                         
Shipping Basis:                     
Weights To Apply:                     
Terns:                         
Remarks:     
        
        
GAVILON INGREDIENTS, LLC – OMAHA    [SELLER]

By ____________________________    By: ___________________________
NOTE: The lack of a signature shall not prevent a valid and binding agreement
from being formed between the parties.
The provisions of: (a) the Electronic Signatures in Global and National Commerce
Act ("E-Sign"); (b) the Uniform Electronic Transactions Act ("UETA"); and (c)
Amended Article 2 of the Uniform Commercial Code relating to electronic
contracting ("Amended Article 2") shall apply to this contract. In the event of
a conflict between or among the provisions of any of the foregoing, such
conflict shall be resolved as follows: (y) the provisions of E-Sign shall have
precedence over those of UETA; and (z) the provisions of UETA shall have
precedence over those of Amended Article 2. However, all such provisions shall
be reasonably interpreted so as to avoid conflicts between or among them.
Nothing in this provision shall be interpreted or deemed to be a waiver of any
other rule of evidence governing the admissibility of an Imaged Document.

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Terms and Conditions

1. Whether or not Seller is an active member of any of the following
associations, and to the extent not inconsistent with the terms and conditions
of this Contract, the rules, regulations and standards of the following
associations (the "Associations") shall apply respectively to each of the
commodities governed thereby: the National Grain and Feed Association, the
American Fats and Oils Association, the National Oilseed Processors Association,
the American Dehydrators Association, the Canadian Oilseed Processors
Association, and the National Cottonseed Products Association. If more than one
Association purports to govern a given commodity, the rules and regulations of
the association appearing later in the list shall apply.
2. Buyer and Seller may be collectively referred to as "the Parties" or
individually as "the Party".
3. Whether or not an active member of any of the Associations referenced in
Paragraph I hereof, Seller acknowledges that it understands the provisions of
the applicable Association's rules, regulations and standards, and Seller agrees
to be bound thereby. The Parties agree to settle any controversies hereunder by
arbitration, that the arbitration rules of the applicable Association shall be
the basis of said arbitration or if the applicable Association does not have
arbitration rules, then according to the rules of the American Arbitration
Association, and that the decision and award determined by such arbitration
shall be final and binding upon the Parties.
4. It is agreed that neither Party to this Contract shall delegate the
performance of any obligation hereunder nor assign any rights arising hereunder,
to any third person without the prior written consent of the other Party.
5. Seller warrants that commodities delivered under this Contract will be free
and clear, from and after time of delivery, of any security interest, lien,
claim or encumbrance and that Seller has good and merchantable title thereto.
Seller agrees that should any lien, security interest or encumbrance be claimed
against any commodity sold hereunder, Seller will immediately cause the same to
be discharged and terminated; and, will hold Buyer harmless therefrom; and,
indemnity Buyer from any costs or losses incurred as a result of such claim.
6. Seller expressly represents and warrants that the commodity or commodities
hereby purchased are of the grade indicated, and if none is indicated, that the
commodity or commodities are suitable for feeding to poultry and livestock and
in no event shall have a vomitoxin content exceeding 5 parts per million or an
aflatoxin content exceeding 20 parts per billion. Seller indemnifies and holds
Buyer harmless against any liability, loss, cost, expense or damage related to
the failure of any portion of the commodities purchased hereunder to meet Food
and Drug Administration or other applicable governmental agency's rules,
regulations and standards for said commodity, as well as the applicable
Association's (as referenced in paragraph I hereof) rules, regulations, and
standards for such commodity. Buyer's payment will not constitute acceptance of
a commodity sold hereunder or serve to waive Buyer's rights to reject the
commodity or recover damages should the commodity fail to comply with the terms
or specifications of this Contract. Buyer specifically reserves all rights and
remedies available to it under the applicable Association's (referenced in
Paragraph I hereof) rules, regulations, and standards; and the Uniform
Commercial Code in effect within the jurisdiction under which this Contract is
governed, if any of the commodity sold hereunder fails to comply with the
warranties, descriptions, and requirements set forth in this Contract, or the
applicable Association's rules, regulations, and standards. In addition to and
without waiving any of Buyer's other remedies hereunder, Buyer may, at its sole
option, request that the Seller replace any or all portions of any shipment of
commodities hereunder which fails to comply with the terms of this Contract;
said replacement shipment to be at Sellers sole cost and expense and occur
within seven (7)days of Sellers receipt of Buyer’s notice of the commodity's
non-compliance with this Contract.
7. Buyer expressly reserves the right to cancel this Contract within the meaning
of UCC section 2106 based upon the occurrence of any of the following: (a) the
insolvency or financial condition of Seller; (b) the appointment for taking
possession of any Seller's assets or any part thereof by any third party,
including a trustee, receiver, creditor or other party; (c) the breach of any
warranty; or, (d) any other defaults hereunder.
8. This Contract assumes Buyer is purchasing free-flowing commodities. In the
event any commodity arrives at its destination and does not freely flow, Buyer
reserves the right to reject the shipment. If Buyer rejects the shipment Seller
shall be responsible for all transportation, rail, freight and delivery charges.
9. In the event Seller breaches this Contract in any manner, Seller shall be
liable to Buyer for any and all damages, including consequential damages,
incidental damages, and any lost profits incurred as a result thereof and shall
pay Buyers reasonable attorney fees, court costs and expenses incurred in the
enforcement of this Contract and any collection activities related thereto.
10. In the event that a party hereto (the "Defaulting Party") becomes insolvent,
or suffers or consents to or applies for the appointment of a receiver, trustee,
custodian or liquidator of itself or any obits property, or generally fails to
pay its debts as they become due, or makes a general assignment for the benefit
of creditors, or files a voluntary petition in bankruptcy, or seeks
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Code, Title II of the United States Code,
as amended or recodified from time to time, or under any state or federal law
granting relief to debtors then the other party (the ''Non-defaulting Party")
may (i) immediately cancel this Contract and all other Contracts between the
parties hereto, (ii) liquidate such cancelled Contracts in a commercially
reasonable manner, and (iii) aggregate such liquidated amounts into a single
liquidated settlement amount (the "Settlement Amount") due, which shall be due
and payable two (2) business days after written notice by the Non-defaulting
Party. In addition, the Non-defaulting Party may set-off any amounts owed by the
Defaulting Party to the Non-defaulting Party under any other agreements between
the parties against any Settlement Amount owed by the Non-defaulting Party to
the Defaulting Party hereunder. The parties agree that each of them is a forward
contract merchant as set forth in II U.S.C. Section 101(25). The parties also
agree that this Contract and any other commodity contract between the parties
are all forward contracts as defined in II U.S.C. Section 101(25). The payments
and transfers described herein shall constitute "Settlement Payments" or "Margin
Payments" as set forth in II U.S.C. Sections 101(5IA) and (38).
11. Railcars must be loaded to capacity as required by railroad companies.
Seller to pay weighing, inspection, trackage, and interest charges, if any.
reconsigned rail cars cannot be utilized on this Contract unless consented to by
Buyer in writing prior to loading. Buyer reserves the right to change
destination offal shipments prior to departure of the railcar from Sellers
facility.
12. If confirmation calls for delivery beyond fourteen (14) days from the date
of this Contract, Buyer may demand from Seller a margin deposit often percent
(10%) of the gross value of this Contract to be considered as margin on equity,
and Buyer may demand such further payments from Seller as may be necessary to
maintain a deposit on this Contract often percent (10%) of the gross value of
this Contract, plus an amount equal to the difference between the
contract-price-value and the prevailing market price-value, if the market is
above the Contract price. Seller agrees to pay such margin on demand and if not
paid, Buyer may exercise the same rights as if Seller had defaulted on this
Contract.
13. Each Party consents to the recording of all telephone conversations between
its representatives and the representatives of the other Party.
14. Any provision of this Contract which is prohibited or unenforceable in any
jurisdiction shall, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
15. Seller warrants it has read this Contract in its entirety and understands
its terms and legal effect. This Contract constitutes the entire understanding
between the Parties hereto and no modification or amendment of this Contract
shall be valid or binding unless agreed to by both Parties and confirmed by a
writing signed by the party to be charged. Seller agrees that the terms hereof
are acceptable and that Seller intends to be bound by the terms of this Contract
even if said terms differ from or conflict with the terms or conditions
contained in Sellers offer, acceptance on form of contract for such purchase.
16. Unless otherwise exempt, this Contract incorporates by reference the EEO
Clause contained in 41 C.F.R. Sections 60-1.4, 60-741.5, and 60-250.5.
17. Any original contract and/or transaction confirmation relating to a
transaction between the parties may be converted to and saved in electronic
format (the "Imaged Document"). Each party waives any objection it may have to
the admissibility of such Imaged Document in any judicial, arbitration,
mediation, administrative, or other proceeding involving the parties to the
extent such objection is based on any rule of evidence that: (a) requires

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authentication or identification of the Imaged Document; (b) requires an
original document; or (c) governs the admissibility of duplicates. In addition,
each party acknowledges that Imaged Documents are business records within the
meaning of the business records exception to the hearsay rule.

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