Exhibit 10.37


 


DISTILLER’S
GRAIN PURCHASE AGREEMENT


 


THIS DISTILLER’S GRAIN PURCHASE AGREEMENT
(the “Agreement”), is entered into effective
as of January 11, 2008 (the “Effective
Date”), by Ottertail Ag. Enterprises LLC, a Minnesota Limited
Liability Company whose address is 24096 170th Avenue, Fergus Falls Minnesota,
56537 (“Seller”) and Bilden Farms,
LLC, a Minnesota Limited Liability Company whose address is 20898 County
Highway 24, Erhard, MN 56534 (“Buyer”).


 


W I T
N E S S E T H:


 


WHEREAS, Seller desires to sell and Buyer
desires to purchase the Seller’s production of Wet Distiller’s Grains (“WDG”)
and Modified Distiller’s Grain (“MDG”) (hereinafter WDG and MDG are referred to
collectively as the “Products”) output of the Seller’s ethanol production plant
which Seller has underdevelopment near Fergus Falls Minnesota, commencing on or
about March 1, 2008 or such later or earlier date as production of the
Products commences (the “Start Date”).


 


WHEREAS, Seller and Buyer wish to agree in
writing on the terms and conditions of such sale and purchase of the Products
and the price formula, payment, delivery and other terms thereof in
consideration of the mutually promised performance of the other;


 


NOW, THEREFORE, in consideration of the
promises and the mutual covenants and conditions herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by both parties, it is hereby agreed:


 


BUYER PERFORMANCE. Buyer agrees to peform its
obligations hereunder in a timely and professional manner.


 


1.             PURCHASE
AND SALE. Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, the Products at Seller’s plant located at 24096 170th Avenue, Fergus
Falls Minnesota, 56537 (the “Plant”), subject to all terms and conditions set
forth in this Agreement. Buyer is purchasing the Products for its own account
and resale, and is not a sales representative or other agent of Seller. Buyer
shall label all Product that is sold by Buyer.


 


2.             EXCLUSIVITY.
Buyer shall have the first right and option to purchase (the “Option”) the
Products, with no minimum production requirement on Seller and no minimum
purchase requirement or obligation other than Buyer shall utilize its best
efforts to purchase and resell the Products. Seller may sell the Products to
other parties with the prior consent of Buyer.


 


Seller shall have the right at any time to
sell, without the consent of Buyer, the Products to Jerry Enderson or Enderson
Farms. Seller is not restricted in any manner by this Agreement from
producting, processing or selling Dried Distiller’s Grains (“DDG”).


 


3.                                       TERM. The
initial term of this Agreement shall be for a two (2) year period commencing
as of the Start Date (the “Initial Term”). Upon expiration of the Initial Term,
this Agreement shall automatically renew for up to two (2) consecutive
terms of one (1) year each (each an “Extension Term”).   During any Extension Term, this Agreement
may be terminated by


 

















 


either party, at its unqualified option, by providing the other party
hereto not less than ninety (90) days written notice of its election to
terminate this Agreement. This Agreement shall, in such event, terminate
effective the ninetieth (90th) day after the date such notice of termination is
given.  This Agreement may be terminated
by Seller in the event Buyer does not purchase any Products for a rolling
period of ninety (90) days. In no event shall this Agreement have a term
exceeding four (4) years, absent the mutual written agreement of the
parties.


 


4.                                 DELIVERY
AND TITLE.


 


A.                            The
place of delivery for all the Products sold pursuant to this Agreement shall be
FOB Plant. Buyer and Buyer’s agents shall be given access to Seller’s Plant in
a manner and at all times reasonably necessary and convenient for Buyer to take
delivery as provided herein. Buyer shall schedule the loading and shipping of
all outbound Products purchased hereunder which is shipped by truck and
trailer. Buyer shall supply adequate trucks and trailers to timely accept loads
of Product ordered. All labor and equipment necessary to load trailers shall be
supplied by Seller without charge to Buyer. Title to the Products, and risk of
loss of the Products, shall shift to Buyer upon loading. All freight charges
shall be the responsibility of Buyer and shall be paid directly by Buyer.


 


B.                              Buyer
shall give to Seller a schedule of quantities of the Products to be removed by truck
and trailer by forty-eight (48) hours advance written or electronic notice to
allow Seller to provide the required quantity of Product. Product availability
may be limited by Seller at any time. A minimum purchase of five (5) tons
per order of Product is required. Purchase orders shall be directed to Seller’s
main office address or email address(es) provided by Seller to Buyer.


 


5.                                PRICE
AND PAYMENT Buyer agrees to pay Seller as follows: for all WDG removed by Buyer
from the Plant a price equal to _ per ton of Product; and for MDG removed by
Buyer from the Plant a price equal to _ per ton of Product. The pricing set
forth herein shall be adjusted by notice from Seller to Buyer from time to time
on sixty (60) day intervals. Price changes shall be applicable to Product
produced after the price change notice date.


 


Invoices for Product purchases will be
invoiced daily on each date of individual loading of Product and are due and
payable not later than the 10th day after each invoice date. An interest rate
of 18% APR or 1.5% per month is applicable to all over due invoices. A
financial statement and letter of credit or other security may be required to
be provided by Buyer to Seller to secure payment of invoices. Seller shall not
be obligated to make any deliveries of Product if Buyer is delinquent on
invoices. In the event Product is ordered but is not accepted for delivery by
Buyer, Buyer shall pay to Seller the purchase price for the ordered Product.


 


6.                                 QUANTITY
AND WEIGHTS.


 


A.                            It is
understood that the output of the Products shall be determined by Seller’s production
schedule and that no warranty or representation has been made by Seller as to
the exact quantities of Products to be sold pursuant to this Agreement.


 


B.                              The
quantity of Products delivered to Buyer from Seller’s Plant shall be
established by weight certificates obtained from Seller’s scale at the Plant
which is certified as of the


 


2

















 


time of weighing and which complies with all applicable laws, rules and
regulations or in the event that the scale at the Plant is inoperable then at
other scales which are certified as of the time of weighing and which comply
with all applicable laws, rules and regulations. The outbound weight
certificates shall be determinative of the quantity of the Products for which
Buyer is obligated to pay pursuant to Section 5.


 


7.                                 QUALITY.


 


A.                            Seller
understands that Buyer intends to sell the Products purchased from Seller as a
livestock feed ingredient. Seller agrees and warrants that the Products
produced at its Plant at the time it is delivered to Buyer shall have a
moisture content for the WDG of 70% or less and the moisture content for the
MDG of 50% or less.


 


B.                              Buyer
shall inspect any shipment of Product upon delivery to Buyer’s trucks and trailers,
and either accept or then reject any shipment of Product at the time of
loading. Shipments not then rejected shall be deemed acceptable to Buyer and
not subject to return or disposal by Seller.


 


C.                              Seller
will provide Buyer, free of charge, with labels and up-to-date nutrient/feed analysis
of the Products. Buyer may reproduce the labels for distribution to its
customers. Labels shall include: Seller as the manufacturer of the Products:
all items required by Minn. Stat. 25.35; the dry matter/moisture content of the
Product and the presence and quantity of any micro toxins, sulfur, phosphorous
and antibiotics, if any, in the Product. Seller shall obtain and maintain a
commercial feed license, and assume full responsibility for the tonnage
inspection fee under Minn. Stat. 25.31 through 25.43.


 


8.                                 REPRESENTATIONS
AND WARRANTIES


 


Other than as expressly set forth herein,
Buyer accepts the Product in its condition upon delivery to Buyer, in an “as-is,”
“where is,” “with all faults” condition, with no warranties or representations
of any nature, express or implied, and any warranties and representations of
any nature or type whatsoever are hereby expressly disclaimed by Seller and
released by Buyer. Buyer waives any disclosures, warranties, or representations
whatsoever concerning such matters, and Buyer relies upon its own inspection
and knowledge concerning such matters. Buyer shall hold harmless and indemnify
Seller from and against any and all claims, causes, damages, liability and
related expenses arising out of or related to further sales of the Product.


 


9.                                EVENTS
OF DEFAULT. The occurrence of any of the following shall be an event of default
under this Agreement: (1) failure of either party to make payment to the
other when due; (2) default by either party in the performance of the
covenants and agreements set forth in this Agreement; (3) if either party
shall become insolvent, or make a general assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial amount of its assets,
or be adjudicated bankrupt, or file a petition in bankruptcy, or apply to a
court for the appointment of a receiver for any of its assets or properties
with or without consent, and such receiver shall not be discharged within sixty
(60) days following appointment.


 


3

















 


10.                          REMEDIES.
Upon the happening of an Event of Default, the parties hereto shall have all
remedies available under applicable law with respect to a Event of Default by
the other parrty.  Without limiting the
foregoing, the parties shall have the following remedies whether in addition to
or as one the remedies otherwise available to them; (l) to declare all amounts
owed immediately due and payable; and (2) immediately to terminate this
Agreement effective upon receipt by the party in default of the notice of
termination, provided, however, the parties shall be allowed 30 days from the
date of receipt of notice of default for to cure any default, except for
payment defaults which shall not be subject to cure or notice.


 


11.                          INDEMNIFICATION.


 


A.                            Seller
shall indemnify, defend and hold Buyer and its officers, governors, employees
and agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys’ fees), costs, claims, demands, that Buyer or
its officers, governors, employees or agents may suffer, sustain or become
subject to, or as a result of (i) any misrepresentation or breach of
warranty, covenant or agreement of Seller contained herein or (ii) the Seller’s
negligence or willful misconduct.


 


B.                              Buyer
shall indemnify, defend and hold Seller and its officers, governors, employees
and agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys’ fees), costs, claims, demands, that Seller or
its officers, governors, employees or agents may suffer, sustain or become subject
to, or as a result of (i) any misrepresentation or breach of warranty,
covenant or agreement of Buyer contained herein or (ii) the Buyer’s negligence
or willful misconduct.


 


C.                              Where
personal injury, death or loss of or damage to property is the result of negligence
on the part of both Seller and Buyer, each party’s duty of indemnification
shall be in proportion to the percentage of that party’s negligence or faults.


 


D.                             Notwithstanding
any other provision in this Agreement, or any remedy available at law or in
equity to Buyer, in no event shall the liability of Seller to Buyer, its
officers, governors, employees and agents exceed the cost of the Products
purchased by Buyer in a year  year
period.


 


12.                          RELATIONSHIP
OF PARTIES. This Agreement creates no relationship other than that of buyer and
seller between the parties hereto. Specifically, there is no agency,
partnership, joint venture or other joint or mutual enterprise or undertaking
created hereby. Nothing contained in this Agreement authorizes one party to act
for or on behalf of the other and neither party is entitled to commissions from
the other.


 


13.                          MISCELLANEOUS.


 


A.                            This
writing is intended by the parties as a final expression of their agreement and
a complete and exclusive statement of the terms thereof.


 


4

















 


B.                              No
course of prior dealings between the parties and no usage of trade, except where
expressly incorporated by reference, shall be relevant or admissible to
supplement, explain, or vary any of the terms of this Agreement.


 


C.                              No
representations, understandings or agreements have been made or relied upon in
the making of this Agreement other than as specifically set forth herein.


 


D.                             This
Agreement can only be modified by a writing signed by all of the parties or their
duly authorized agents.


 


E.                               This
Agreement shall be construed and performed in accordance with the laws of the
State of Minnesota.


 


F.                               This
Agreement, and the respective rights, obligations and liabilities of the
parties under this Agreement, are not assignable or delegable without the prior
written consent of the other party, which consent will not unreasonably be
withheld, delayed or conditioned.


 


G.                              Any
notices required or given under this Agreement shall be mailed to the addresses
of the parties set forth above, or such other address directed by a party in
writing to the other, via certified mail, return receipt requested and shall be
deemed received three (3) days after deposit in the mail.


 


IN WITNESS THEREOF, the parties have caused
this Agreement to be executed the day and year first above written.


 


	
   

  	
  BILDEN FARMS, LLC

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Ed Bilden

  	
   

  
	
   

  	
  Title 

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OTTER TAIL AG ENTERPRISES, LLC

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Kelly Longtin

  	
   

  
	
   

  	
  Title CEO

  
					



 


5