Exhibit 10.22

 

Confidential Treatment Requested.  Confidential portions of this document have
been redacted and have been separately filed with the Commission.

 

*** Confidential material redacted and filed separately with the Commission.

 

DISTILLERS GRAINS MARKETING AGREEMENT

 

THIS DISTILLERS GRAINS MARKETING AGREEMENT (the “Agreement”) is made and entered
into as of the 10th day of December, 2010 (the “Effective Date”) by and between
RENEWABLE PRODUCTS MARKETING GROUP, INC., a Delaware corporation (“RPMG”) and
Golden Grain Energy, LLC, an Iowa limited liability company (“Producer”),
collectively referred to hereinafter as “Parties” or individually as a “Party”.

 

RECITALS

 

A.                                   RPMG markets DG (as hereinafter defined).

 

B.                                     Producer produces DG at Producer’s
ethanol production facility located at 1822 43rd Street SW, Mason City, Iowa
50401  (the “Ethanol Facility”).

 

C.                                     The Parties do desire that RPMG shall
market the DG produced at the Ethanol Facility.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows.

 

AGREEMENT

 

1.                                      Marketing of Distilled Grains.  Producer
shall sell to RPMG, and RPMG shall purchase and market, all of Producer’s
production, excluding such production Producer sells directly to the entities
set forth on Schedule 1 attached hereto, of distiller’s dried grains (“DDG”),
modified distiller’s dried grains, (“MDDG”), distiller’s dried grains with
solubles (“DDGS”), distiller’s wet grains (“DWG”), modified distiller’s wet
grains (“MDWG”), and condensed distiller’s solubles (“CDG”) produced from corn
at the Ethanol Facility (collectively, “DG”), including any expansion or
increase in capacity at the Ethanol Facility.  RPMG shall be the exclusive
marketer of DG, and Producer shall not, either itself (except as set forth in
the foregoing sentence) or through any affiliate or any third party, market any
DG during the term of this Agreement.  Except as otherwise provided in this
Agreement, RPMG shall provide management resources to market and sell DG,
including the management of logistics and collection.

 

2.                                      Payments to Producer; Commissions; Audit
Rights

 

(a)                                  Payments to Producer.  Subject to the other
terms of this Agreement, RPMG shall pay Producer for its DG in accordance with
the terms set forth in Exhibit A.  RPMG shall use commercially reasonable
efforts to make such payments to Producer net ten (10) days.

 

(b)                                 RPMG Commission.  Producer shall pay RPMG
commissions based on *** each ton of DDG or DDGS sold to third party end
purchasers (each, an “End Customer”) and *** each ton of MDDG, DWG, or MDWG sold
to End

 

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Customers. These actual costs to market the DG shall be as reported to the
equity owners of RPMG and as adjusted based on actual marketing costs.  As used
herein, a “ton” means 2,000 lbs.  Parties shall from time to time, or upon the
reasonable request of RPMG, negotiate in good faith adjustments to the foregoing
commissions to reflect prevailing commissions being paid to marketers of DG
produced by third parties in the United States.

 

(c)                                  Accessorial Charges.  As set forth on
Exhibit A, RPMG shall be responsible for payment of Accessorial Charges (as
defined in Exhibit A) to third parties; provided, however, that Producer agrees
(i) to promptly reimburse RPMG for such Accessorial Charges upon submission to
Producer of an invoice itemizing such Accessorial Charges, and (ii) that RPMG
may deduct and setoff the Accessorial Charges from and against payments due to
Producer by RPMG.

 

(d)                                 Late Payments.  Overdue amounts not disputed
in good faith payable to either Party shall be subject to late payment fees
equal to interest accrued on such amounts at an annual rate of ten percent
(10%).

 

(e)                                  No Warranty as to Prices.  RPMG shall
market Producer’s DG using commercially reasonable efforts and the same
standards it uses to market the DG production of third parties for whom RPMG
provides DG marketing services.  RPMG shall endeavor to (i) maximize the DG
price and minimize freight and other costs relevant to DG sales and (ii) achieve
the best available return to Producer, subject to relevant market conditions. 
PRODUCER ACKNOWLEDGES THAT RPMG MAKES NO REPRESENTATIONS, GUARANTEES OR
WARRANTIES OF ANY NATURE WHATSOEVER AS TO THE PRICES AT WHICH IT SHALL BE ABLE
TO SELL PRODUCER’S DG TO END CUSTOMERS.

 

(f)                                    Waiver of Certain Claims.  Producer
acknowledges (i) that RPMG shall use its reasonable judgment in making decisions
related to the quantity and price of DG marketed under this Agreement, in light
of varying freight and other costs, and (ii) that RPMG may sell and market DG of
third parties into the same markets where RPMG sells Producer’s DG.  Producer
waives any claim of conflict of interest against RPMG or for failure by RPMG to
maximize the economic benefits of this Agreement for Producer in light of the
foregoing.

 

(g)                                 Audit Rights.  Within ninety (90) days
following the end of RPMG’s fiscal year end, Producer shall have the right to
inspect the books and records of RPMG for the purpose of auditing calculations
of the payments to Producer for the preceding year made in connection with this
Agreement.  Producer shall give written notice to RPMG of its desire to conduct
an audit and RPMG shall provide reasonable access to all financial information
necessary to complete such audit.  The audit shall be conducted by an accounting
firm agreeable to both Parties and shall be completed within forty-five (45)
days after the completion of RPMG’s annual audit, but no later than one hundred
and fifty (150) days following RPMG’s fiscal year end.  The cost of the audit
shall be the responsibility of Producer unless the auditor determines that RPMG
underpaid Producer by more than three percent (3%) for the period audited, in
which case RPMG shall pay the cost of the audit.

 

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If the auditor determines that RPMG underpaid Producer, RPMG shall promptly pay
such underpayment to Producer and if the auditor determines that RPMG overpaid
Producer, Producer shall promptly pay the overpayment to RPMG.  The
determination of the auditor shall be final and binding on both Parties. If
Producer fails to exercise its right to audit as provided in this
Section 2(g) for any year, it shall be deemed to have waived any rights to
dispute payments made to Producer for that year.

 

3.                                      Scheduled Production

 

(a)                                  Notice of First Delivery.  RPMG may begin
to market Producer’s DG upon the Effective Date.  If Producer is not producing
DG as of the Effective Date, Producer shall, on the Effective Date, provide RPMG
with the projected date on which Producer will first deliver DG produced at the
Ethanol Facility to RPMG (the “Projected Date of First Delivery”).  Producer
shall notify RPMG as soon as possible of any revisions to the Projected Date of
First Delivery.

 

(b)                                 Notices of Scheduled Production.  Beginning
on the Effective Date, and on the 1st and 15th of each month thereafter,
Producer shall provide to RPMG a rolling best estimate of production and
inventory by DG product for that month and each of the following twelve (12)
months.  Beginning on the Effective Date and each Wednesday thereafter, Producer
shall provide to RPMG a best estimate of production and inventory by DG product
for that day and the next seven days.

 

(c)                                  Additional Production Notices.  Producer
shall notify RPMG of anticipated production downtime or disruption in DG
availability at least three (3) months in advance of such outage.  Producer
shall timely inform RPMG of daily inventories, plant shutdowns, daily production
projections, and any other information (i) to facilitate RPMG’s performance of
the Agreement or (ii) that may have a material adverse effect on RPMG’s ability
to perform the Agreement.

 

(d)                                 RPMG Entitled to Rely on Producer Estimates
and Notices.  RPMG, in marketing and selling Producer’s DG, is entitled to rely
upon the production estimates and other notices provided by Producer, including
without limitation those described in Sections 3(a), (b), and (c).  Producer’s
failure to provide accurate information to facilitate RPMG’s performance of the
Agreement may negatively impact RPMG’s ability to market and sell DG at
prevailing prices.  Producer’s failure to provide accurate information to
facilitate RPMG’s performance of the Agreement may be deemed by RPMG, in its
sole but reasonable discretion, a material breach of the Agreement by Producer. 
No information or estimate provided by Producer shall be deemed a breach of the
Agreement unless such estimate was not provided by Producer in good faith or was
inaccurate due to Producer’s gross negligence.

 

(e)                                  Sale Commitments.  From time to time during
the term of this Agreement and in order to maximize the sales price of DG, RPMG
may enter sales contracts or other agreements with End Customers for future
delivery of DG.  In the event Producer fails to produce DG in accordance with
the information provided to RPMG under Sections 3(a), (b), or (c) above for
reasons other than Force Majeure (as defined in Section 10 herein) or terminates
this Agreement other than in

 

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accordance with the provisions of Section 6 below, and as a result RPMG is
required to purchase DG from third parties to meet previous DG sale commitments
that are based upon such information, RPMG may charge Producer the amount (if
any) that the price of such replacement DG exceeded the price that RPMG would
have paid to Producer for the applicable DG under this Agreement.

 

4.                                      Logistics and Transportation

 

(a)                                  No Liens, Title and Risk of Loss.  Producer
warrants that DG delivered to RPMG hereunder shall be free and clear of all
liens and encumbrances of any nature whatsoever other than liens in favor of
RPMG.  Title to and risk of loss of each load of DG shall pass to RPMG at the
time such load passes across the scale into rail cars or trucks at the Ethanol
Facility (the “Title Transfer Point”).  Until such time, Producer shall be
deemed to be in control of and in possession of the DG.

 

(b)                                 Loading.  RPMG shall schedule the loading
and shipping of all outbound DG purchased hereunder, but all labor and equipment
necessary to load trucks and rail cars and other associated costs shall be
supplied and borne by Producer without charge to RPMG. Producer shall handle the
DG in a good and workmanlike manner in accordance with RPMG’s written
requirements and normal industry practice.  Producer shall maintain the truck
and rail loading facilities in safe operating condition in accordance with
normal industry standards and shall visually inspect all trucks and rail cars to
assure (i) cleanliness so as to avoid contamination, and (ii) that such trucks
and railcars are in a condition suitable for transporting the DG.  RPMG and
RPMG’s agents shall be given access to the Ethanol Facility in accordance with
the terms set forth in Exhibit B, which may be amended by agreement of the
Parties in writing, from time to time.  RPMG’s employees shall follow all
reasonable safety rules and procedures promulgated by Producer and provided to
RPMG reasonably in advance and in writing. Producer shall supply product
description tags, certificates of analysis, bills of lading and/or material
safety data sheets that are applicable to all shipments.  In the event that
Producer fails to provide the labor, equipment and facilities necessary to meet
RPMG’s loading schedule, Producer shall be responsible for all costs and
expenses, including without limitation actual demurrage and wait time, incurred
by RPMG resulting from or arising in connection with Producer’s failure to do
so.

 

(c)                                  Transportation and Certain Transportation
Costs.  RPMG shall perform certain logistics functions for Producer, including
the arranging of rail and truck freight, inventory management, contract
management, bills of lading, and scheduling pick-up appointments.  RPMG shall
determine the method of transporting DG to End Customers.  Notwithstanding any
provision to the contrary herein, Producer shall be solely responsible for any
damage to any trucks, railcars, equipment, or vessels caused by acts or
omissions of Producer and its consignees.  All truck freight charges and rail
tariff rate charges shall be billed directly to RPMG and, as set forth in
Exhibit A, be deducted by RPMG from the proceeds of RPMG’s sales of DG to End
Customers.

 

(d)                                 Weight.  The quantity of DG delivered to
RPMG at the Ethanol Facility shall be established by weight certificates
obtained from Producer’s scales or from such

 

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*** Confidential material redacted and filed separately with the Commission.

 

other scales as the Parties shall mutually agree, which are certified as of the
time of weighing and which comply with all applicable laws, rules and
regulations; provided, however, that if the weights obtained from Producer’s
scales conflict with destination weights from certified scales at the End
Customer’s destination point, destination weights shall govern and Producer
shall be solely responsible for any shortage, unless the weight at the End
Customer’s scale is clearly erroneous. In the case of rail shipments, the
official railroad weights shall govern establishment of said quantities.
Producer shall provide RPMG with a fax copy of the outbound weight certificates
on a daily basis and, except as otherwise expressly agreed upon, such outbound
weight certificates shall be determinative of the quantity of DG for which RPMG
is obligated to pay Producer pursuant to this Agreement.

 

(e)                                  DG Storage at Ethanol Facility.  The
estimated storage capacity of the Ethanol Facility, by DG product, is as
follows:

 

DDGS                                                               *** tons

 

MDWG                                                      *** tons

 

5.                                      Specifications; Quality.

 

(a)                                  DG Specifications.  Producer covenants that
it shall produce DG that, upon delivery to RPMG at the Ethanol Facility, meets
the respective specifications (“Specifications”) set forth in Exhibit C.  RPMG
shall have the right to test each shipment of DG to ascertain that the
Specifications are being met.  If the DG provided by Producer to RPMG is shown,
by independent testing or analysis of a representative sample or samples taken
consistent with industry standards, to not meet the Specifications through no
fault of RPMG or any third party engaged by RPMG, then RPMG may, in its sole
discretion, (i) reject such DG and require Producer to promptly replace such
non-conforming DG with DG that complies with the Specifications, or (ii) accept
such DG for marketing and, if necessary, adjust the price to reflect the
inferior quality, as provided in Exhibit A. Payment and acceptance of delivery
by RPMG shall not waive RPMG’s rights if DG does not comply with the terms of
this Agreement, including the Specifications.

 

(b)                                 Feed Ingredient Standards.  Producer
understands that RPMG intends to market Producer’s DG as a primary animal feed
ingredient, and that said products are subject to minimum standards for such
use.  Producer warrants that, unless caused by the negligence or intentional
misconduct of RPMG or a third party engaged by RPMG, DG delivered by Producer to
RPMG shall be acceptable in the feed trade under current industry standards and
shall be an approved feed ingredient under applicable standards promulgated by
the Association of American Feed Control Officials Incorporated.

 

(c)                                  Trade Rules.  This Agreement shall be
governed by the then-current Feed Trade Rules of the National Grain and Feed
Association (the “Trade Rules”), unless

 

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otherwise specified.  In the event the Trade Rules and the terms and conditions
of this Agreement conflict, this Agreement shall control.

 

(d)                                 Compliance With FDA and Other Standards.
Producer warrants that, unless caused by the negligence or intentional
misconduct of RPMG or a third party engaged by RPMG, DG provided by Producer to
RPMG (i) shall not be “adulterated” or “misbranded” within the meaning of the
Federal Food, Drug and Cosmetic Act (the “Act”), (ii) may lawfully be introduced
into interstate commerce under the Act, and (iii) shall comply with all state
and federal laws, rules and regulations (including without limitation the Trade
Rules) including those governing quality, naming and labeling of bulk product. 
If Producer knows or reasonably suspects that any DG produced at the Ethanol
Facility is adulterated or misbranded, or otherwise not in compliance with the
terms of the Agreement, Producer shall immediately so notify RPMG in writing.

 

(e)                                  Regulatory Seizure.  Should any DG provided
by Producer to RPMG hereunder be seized or condemned by any federal or state
department or agency as a result of its failure to conform to any applicable
law, rule or regulation prior to delivery to an End Customer through no fault of
RPMG, such seizure or condemnation shall operate as a rejection by RPMG of the
goods seized or condemned and RPMG shall not be obligated to offer any defense
in connection with such seizure or condemnation.  When such rejection occurs,
RPMG shall deliver written notice to Producer within a reasonable time of the
rejection and identify the deficiency that resulted in such rejection.  In
addition to other obligations under this Agreement or at law, Producer shall
reimburse RPMG for all out-of-pocket costs reasonably incurred by RPMG in
storing, transporting, returning and disposing of the rejected goods in
accordance with this Agreement.

 

(f)                                    Recalls.  Producer shall, at its sole
cost and expense, comply and cooperate with any recall of DG reasonably
determined to be necessary by RPMG.  If it is deemed necessary or appropriate by
RPMG in its reasonable discretion, either in response to government action or
otherwise, to recall any DG produced by Producer pursuant to this Agreement due
to non-conformance with the terms of this Agreement through no fault of RPMG,
Producer shall be responsible for all reasonable out-of-pocket costs of such
recall and recovery, including, but not limited to, loss of products,
transportation of products, notices and communications necessary or appropriate
to effecting such recall and all reasonable out-of-pocket costs and expenses
incurred in defending actions brought in connection with such recall.

 

(g)                                 Sampling.  Producer shall take a minimum of
two (2) origin, representative samples from each lot of the DG before it leaves
the Ethanol Facility.  RPMG shall be entitled to witness the taking of
samples.   Producer shall label these samples to indicate the applicable DG lot
numbers, date of shipment, and the truck or railcar number. Producer shall send
one sample to RPMG promptly upon RPMG’s request.  Producer may request that RPMG
test results be provided to it at any time after the tests are completed. 
Producer shall also retain the samples and labeling information for no less than
six (6) months or any longer period required by law.  If RPMG knows or
reasonably suspects that any DG

 

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produced by Producer at the Ethanol Facility is not in compliance with the terms
of this Agreement, then RPMG may obtain independent laboratory tests of such DG,
and, if such DG is found not to be in compliance with the terms of this
Agreement, Producer shall, in addition to its other obligations hereunder, pay
all such testing costs.

 

6.                                      Term and Termination

 

(a)                                  Term.  This Agreement shall have an initial
term of nine (9) months, commencing on the Effective Date.  This Agreement shall
be automatically extended for an additional one (1) year term following the end
of the initial term and any renewal term unless either Party gives written
notice to the other of non-extension not less than two hundred and seventy (270)
days before the termination of the initial term or the then-current renewal
term.  Notwithstanding the foregoing, Producer shall have the right to terminate
this Agreement for any reason or no reason upon ninety (90) days prior written
notice after the first nine (9) month period.

 

(b)                                 Producer Termination Right.  Producer may
immediately terminate this Agreement upon written notice to RPMG if RPMG fails
on three (3) separate occasions within any 12-month period to purchase DG or to
market DG under circumstances where such breach or failure is not excused by
this Agreement.

 

(c)                                  RPMG Termination Right.  RPMG may
immediately terminate this Agreement upon written notice to Producer, if, for
reasons other than a Force Majeure (as defined in Section 10 herein) event,
during any consecutive three (3) months, Producer’s actual production or
inventory of any DG product at the Ethanol Facility varies by twenty percent
(20%) or more from the monthly production and inventory estimates provided by
Producer to RPMG pursuant to Section 3(b) hereunder.

 

(d)                                 Termination for Insolvency.  Either Party
may immediately terminate the Agreement upon written notice to the other Party
if the other Party files a voluntary petition in bankruptcy, has filed against
it an involuntary petition in bankruptcy, makes an assignment for the benefit of
creditors, has a trustee or receiver appointed for any or all of its assets, is
insolvent or fails or is generally unable to pay its debts when due, in each
case where such petition, appointment or insolvency is not dismissed, discharged
or remedied, as applicable, within sixty (60) days.

 

7.                                      Indemnification; Limitation on Liability

 

(a)                                  Producer’s Indemnification Obligation. 
Producer shall indemnify, defend and hold harmless RPMG and its shareholders,
directors, officers, employees, agents and representatives, from and against any
and all Damage (as defined in Section 7(c) herein) to the extent arising out of
(i) any fraud, negligence or willful misconduct of Producer or any of its
directors/governors, officers, employees, agents, representatives or contractors
or (ii) any breach of this Agreement by Producer.  RPMG shall promptly notify
Producer of any suit, proceeding, action or claim for which Producer may have
liability pursuant to this Section 7(a).

 

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(b)                                RPMG’s Indemnification Obligation.  RPMG
shall indemnify, defend and hold harmless Producer and its shareholders/members,
directors/governors, officers, employees, agents and representatives from and
against any and all Damages to the extent arising out of (i) any fraud,
negligence or willful misconduct of RPMG or any of its directors, officers,
employees, agents, representatives or contractors or (ii) any breach of this
Agreement by RPMG.  Producer shall promptly notify RPMG of any suit, proceeding,
action or claim for which Producer may have liability pursuant to this
Section 7(b).

 

(c)                                 Definition of Damages.  As used in this
Agreement, the capitalized term “Damages” means any and all losses, costs,
damages, expenses, obligations, injuries, liabilities, insurance deductibles and
excesses, claims, proceedings, actions, causes of action, demands, deficiencies,
lawsuits, judgments or awards, fines, penalties and interest, including
reasonable attorneys’ fees, but excluding any indirect, incidental, special,
exemplary, consequential or punitive damages.

 

(d)                                Setoff Rights.  If Producer defaults on any
of its obligations hereunder or with respect to any order made pursuant to this
Agreement or breaches this Agreement, then (i) RPMG may, upon delivery of
written notice to Producer, hold any amounts otherwise payable by RPMG to
Producer for an additional twenty-five (25) days, (ii) Producer shall be liable
for any and all Damages (as defined in Section 7(c) herein) incurred by RPMG in
connection with such default or breach, and (iii) RPMG may, upon delivery of
prior written notice to Producer, offset the amount of such Damages against any
amounts otherwise payable by RPMG to Producer.

 

(e)                                 Recoupment of Overpayments.  RPMG shall have
the right to recoup the amount of any overpayments made by RPMG to Producer
hereunder or with respect to any order made pursuant to this Agreement. 
Producer shall have the right to recoup the amount of any underpayments not made
by RPMG hereunder.

 

(f)                                   Limitation on Liability.  NEITHER PARTY
MAKES ANY GUARANTEE, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS
HEREUNDER.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
PUNITIVE OR EXEMPLARY DAMAGES OR FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES, PROVIDED THAT DAMAGES SUFFERED BY RPMG RELATED TO SALE
COMMITMENTS SHALL BE DEEMED DIRECT DAMAGES.

 

8.                                     Insurance.  During the term of this
Agreement, Producer shall maintain insurance coverage that is standard, in the
reasonable opinion of RPMG, for a company of its type and size that is engaged
in the production and selling of DG.  At a minimum, Producer’s insurance
coverage must include:  (i) comprehensive general product and public liability
insurance, with liability limits of at least $5 million in the aggregate; (ii)
property and casualty insurance adequately insuring its production facilities
and its other assets against theft, damage and destruction on a replacement cost
basis; (iii) RPMG added as an additional insured under the comprehensive general
product and public liability insurance

 

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policy and the property and casualty insurance policy; and (iv) workers’
compensation insurance to the extent required by law. Producer may not change
its insurance coverage during the term of this Agreement, except to increase it
or enhance it, without the prior written consent of RPMG which consent shall not
be unreasonably withheld.

 

9.                                     Confidentiality

 

(a)                                 Confidential Information.  As used in this
Agreement, the capitalized term “Confidential Information” means (i) the terms
and conditions of this Agreement and (ii) any information disclosed by one Party
to the other, including, without limitation, trade secrets, strategies,
marketing and/or development plans, End Customer lists and other End Customer
information, prospective End Customer lists and other prospective End Customer
information, vendor lists and other vendor information, pricing information,
financial information, production or inventory information, and/or other
information with respect to the operation of its business and assets, in
whatever form or medium provided.

 

(b)                                Nondisclosure.  Each Party shall maintain all
Confidential Information of the other in trust and confidence and shall not
without the prior written consent of the other Party:

 

(i)                                   disclose, disseminate or publish
Confidential Information to any person or entity without the prior written
consent of the disclosing Party, except to employees of the receiving Party who
have a need to know, who have been informed of the receiving Party’s obligations
hereunder, and who have agreed not to disclose Confidential Information or to
use Confidential Information except as permitted herein, or

 

(ii)                                use Confidential Information for any purpose
other than the performance of its obligations under the Agreement.

 

(c)                                 Standard of Care.  The receiving Party shall
protect the Confidential Information of the disclosing Party from inadvertent
disclosure with the same level of care (but in no event less than reasonable
care) with which the receiving Party protects its own Confidential Information
from inadvertent disclosure.

 

(d)                                Exceptions.  The receiving Party shall have
no obligation under this Agreement to maintain in confidence any information
which it can prove:

 

(i)                                   is in the public domain at the time of
disclosure or subsequently becomes part of the public domain through no act or
failure to act on the part of the receiving Party or persons or entities to whom
the receiving Party has disclosed such information;

 

(ii)                               is in the possession of the receiving Party
prior to the time of disclosure by the disclosing Party and is not subject to
any duty of confidentiality;

 

(iii)                            the receiving Party obtains from any third
party not under any obligation to keep such information confidential; or

 

(iv)                           the receiving Party is compelled to disclose or
deliver in response to a law, regulation, or governmental or court order (to the
least extent necessary to

 

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comply with such order), provided that the receiving Party notifies the
disclosing Party promptly after receiving such order to give the disclosing
Party sufficient time to contest such order and/or to seek a protective order.

 

(e)                                 Ownership of Confidential Information.  All
Confidential Information shall remain the exclusive property of the disclosing
Party.

 

(f)                                   Injunctive Relief for Breach.  The
receiving Party acknowledges that monetary damages may not be a sufficient
remedy for unauthorized disclosure or use of Confidential Information, and that
the disclosing Party may be entitled, in addition to all other rights or
remedies in law and equity, to obtain injunctive or other equitable relief,
without the necessity of posting bond in connection therewith.

 

10.                              Force Majeure.  In the event either Party is
unable by Force Majeure (as defined below) to carry out its obligations under
this Agreement, it is agreed that on such Party’s giving notice in writing, or
by telephone and confirmed in writing, to the other Party as soon as possible
after the commencement of such Force Majeure event, the obligations of the Party
giving such notice, so far as and to the extent they are affected by such Force
Majeure, shall be suspended from the commencement of such Force Majeure and
during the remaining period of such Force Majeure, but for no longer period, and
such Force Majeure shall so far as possible be remedied with all reasonable
dispatch; provided, however, the obligation to make payments then accrued
hereunder prior to the occurrence of such Force Majeure shall not be suspended
and Producer shall remain obligated for any loss or expense to the extent
otherwise provided in this Agreement. The capitalized term “Force Majeure” as
used in this Agreement shall mean events beyond the reasonable control and
without the fault of the Party claiming Force Majeure, including acts of God,
war, riots, insurrections, laws, proclamations, regulations, strikes of a
regional or national nature, acts of terrorism, sabotage, floods, fires,
explosions, and acts of any government body.

 

11.                              Dispute Resolution.  In the event a dispute
arises under this Agreement that cannot be resolved by those with direct
responsibility for the matter in dispute, such dispute shall be resolved by way
of the following process:

 

(a)                                 Senior management from Producer and from
RPMG shall meet to discuss the basis for the dispute and shall use their best
efforts to reach a reasonable resolution to the dispute.

 

(b)                                If negotiations pursuant to Section 11(a) are
unsuccessful, the matter shall promptly be submitted by either Party to
arbitration in accordance with the Commercial Arbitration Rules, then in effect,
of the American Arbitration Association (“AAA”), except to the extent modified
herein. The arbitration shall be held in a neutral location selected by the
Parties.  Judgment on the award rendered may be entered in any court having
jurisdiction thereof.  The Parties shall bear their respective costs incurred in
connection with the procedures described in this Section 11.  If the Parties
reach agreement pertaining to any dispute pursuant to the procedures set forth
in this Section 11, such agreement

 

10

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shall be reduced to writing, signed by authorized representatives of each Party,
and shall be final and binding upon the Parties.

 

12.                              Miscellaneous.

 

(a)                                 Remedies Non-Exclusive.  Except as otherwise
expressly provided in this Agreement, any remedy provided for in this Agreement
shall be cumulative and in addition to, and not in lieu of, any other remedy set
forth herein or any other remedy otherwise available at law or in equity.

 

(b)                                Successors and Assigns; Assignment.  All of
the terms, covenants, and conditions of this Agreement shall be binding upon,
and inure to the benefit of and be enforceable by the Parties and their
respective successors, heirs, executors and permitted assigns.  No Party may
assign its rights, duties or obligations under this Agreement to any other
person or entity without the prior written consent of the other Party, such
consent not to be unreasonably withheld or delayed; notwithstanding the
foregoing, a Party may, without the consent of the other Party, assign its
rights and obligations under this Agreement to (i) its parent, a subsidiary, or
affiliate under common control with the Party or (ii) a third party acquiring
all or substantially all of the assets or business of such Party.

 

(c)                                 Notices.  Any notice or other communication
required or permitted hereunder shall be in writing and shall be considered
delivered in all respects when delivered by hand, mailed by first class mail
postage prepaid, or sent by facsimile with delivery confirmed, addressed as
follows:

 

To RPMG:                                     Renewable Products Marketing Group,
Inc.

1157 Valley Park Drive, Suite 100

Shakopee, MN 55379

Fax: 952-465-3222

 

To Producer:                        Golden Grain Energy, LLC

1822 43rd Street SW

Mason City, Iowa 50401

Fax: 641-421-8457

 

Either Party may, from time to time, furnish, in writing, to the other Party,
notice of a change in the address and/or fax number(s) to which notices are to
be given hereunder.

 

(d)                                Applicable Law.  This Agreement shall be
governed in all respects by the laws of the State of Minnesota, except with
respect to its choice of law provisions.

 

(e)                                 Severability.  In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, either in whole or in part,
this Agreement shall continue in full force and effect without said provision.

 

(f)                                   No Third Party Beneficiaries.  No
provision of this Agreement is intended, or shall be construed, to be for the
benefit of any third party.

 

11

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(g)                                Entire Agreement; Amendment.  This Agreement
constitutes the entire understanding and agreement between the Parties with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous understandings and/or agreements, written or oral, regarding the
subject matter of this Agreement.  No amendment or modification to this
Agreement shall be binding unless in writing and signed by a duly authorized
officer of both Parties.

 

(h)                                Counterparts.  This Agreement may be executed
in counterparts, including facsimile counterparts, each of which shall be deemed
an original but together shall constitute but one and the same instrument.

 

(i)                                    Waiver.  The failure of either Party at
any time to require performance of any provision of the Agreement or to exercise
any right provided for in the Agreement shall not be deemed a waiver of such
provision or right unless made in writing and executed by the Party waiving such
performance or right. No waiver by either Party of any breach of any provision
of the Agreement or of any right provided for in the Agreement shall be
construed as a waiver of any continuing or succeeding breach of such provision
or right or a waiver of the provision or right itself.

 

(j)                                    Independent Contractors.  The Parties to
this Agreement are independent contractors. There is no relationship of
partnership, joint venture, employment, franchise, or agency between the
Parties, and no Party shall make any representation to the contrary.

 

(k)                                 Additional Rules of Interpretation.

 

(i)                                  The words “include,” “includes” and
“including” as used in this Agreement shall be deemed to be followed by the
phrase “without limitation” and shall not be construed to mean that the examples
given are an exclusive list of the topics covered.

 

(ii)                               The headings as to contents of particular
sections of this Agreement are inserted for convenience and shall not be
construed as part of the Agreement or as a limitation on the scope of any terms
or provisions of this Agreement.

 

(l)                                    Survival.  The following provisions of
this Agreement shall survive its termination: (i) to the extent of outstanding
payment obligations, Sections 2(a), 2(b), 2(c), and 2(d) and (ii) Sections 2(e),
2(f), 3(e), 7, 9, 11, and 12.

 

12

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IN WITNESS THEREOF, each of the Parties hereto has caused this Agreement to be
executed by its respective duly authorized representative as of the day and year
first above written.

 

 

RPMG

 

 

 

 

 

By:

/s/  Steve Dietz

 

Name:

Steve Dietz

 

Its (title):

COO

 

 

 

 

 

PRODUCER

 

 

 

 

 

By:

/s/  Walter Wendland

 

Name:

Walter Wendland

 

Its (title):

President, CEO

 

13

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SCHEDULE 1

 

Entities to which Producer sells DG directly:

 

--------------------------------------------------------------------------------

 

EXHIBIT  A

 

Terms Relating to Payment and Commission Calculation

 

RPMG shall pay Producer for all Standard-Grade DDG and DDGS loaded into railcars
and trucks and weighed at the Ethanol Facility for shipment to End Customers an
amount equal to the F.O.B. Ethanol Facility Price per ton, with RPMG being
entitled to retain its commission, with settlement weights as described in
Section 4(d) of the Agreement.

 

RPMG shall pay Producer for all Non-Standard-Grade DDG and DDGS loaded into
railcars and trucks and weighed at the Ethanol Facility for shipment to End
Customers an amount equal to the F.O.B. Ethanol Facility Price per ton, with
RPMG being entitled to retain its commission, with settlement weights as
described in Section 4(d) of the Agreement.

 

RPMG shall pay Producer for all Standard-Grade and Non-Standard-Grade DWG, MDWG,
MDDG, and CDS loaded into railcars and trucks and weighed at the Ethanol
Facility for shipment to End Customers an amount equal to the F.O.B. Ethanol
Facility price per ton, with RPMG being entitled to retain its commission, with
settlement weights as described in Section 4(d) of the Agreement.

 

“Accessorial Charges” shall mean charges imposed by third parties for the
off-loading, movement and storage of Producer’s DG, including without limitation
taxes, tonnage taxes, hard-to-unload truck or railcar charges/transloading
charges, railcar repair charges, fuel surcharges, storage charges, demurrage
charges, product shrinkage, detention charges, switching, and weighing charges
(but excluding Tariff Freight Costs).  Neither Party shall be responsible for
any charges, including demurrage charges, caused solely by the negligence or
willful misconduct of the other Party.

 

“Delivered Sale Price” shall mean sales dollars received by RPMG for Producer’s
DG, inclusive of tariff freight, as evidenced by RPMG’s invoices to End
Customers.

 

“F.O.B. Ethanol Facility Price” shall mean the F.O.B. sale price equivalent net
of applicable deductions and costs as described in this Agreement, including
without limitation Accessorial Charges and Tariff Freight Costs (or, if
applicable, the Delivered Sales Price net of applicable deductions and costs as
described in this Agreement, including without limitation Accessorial Charges
and Tariff Freight Costs) that RPMG invoices End Customers.

 

“Tariff Freight Costs” shall mean freight and related costs incurred by RPMG to
transport Producer’s DG.

 

“Standard-Grade” shall mean DG that meet the Specifications set forth in this
Agreement.

 

“Non-Standard-Grade” shall mean DG that fail to meet the Specifications set
forth in this Agreement, but which RPMG nonetheless accepts for marketing under
this Agreement.

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Terms and Procedures Relating to Loading and Shipment

 

Except by special arrangement(s) in advance, DG shall be available for loading
and shipment twenty-four (24) hours per day, Monday through Sunday, except on
scheduled holidays.  Trailers and rail cars shall be visually inspected by
Producer prior to loading.  If unsanitary conditions exist and cannot be
corrected on site, the trailer or rail car shall be rejected by Producer and
RPMG notified.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT C

 

DG Specifications

 

Producer covenants that all DDGS shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

Producer covenants that all DWG shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

Producer covenants that all DDG shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

Producer covenants that all MDWG shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

--------------------------------------------------------------------------------

 

*** Confidential material redacted and filed separately with the Commission.

 

Producer covenants that all MDDG shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

Producer covenants that all CDS shall, upon delivery to RPMG at the Ethanol
Facility, conform to the following Specification:

 

Component

 

Maximum %

 

Minimum %

Protein

 

***

 

***

Fat

 

***

 

***

Fiber

 

***

 

***

Moisture

 

***

 

***

Ash

 

***

 

***

 

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