exv10w4






Exhibit 10.4




DISTILLER’S GRAINS MARKETING AGREEMENT




April 7, 2010



     THIS DISTILLER’S GRAINS MARKETING AGREEMENT (“Agreement”) is made as of the date first written
above and entered into and effective as of the Effective Date (as hereinafter defined) by and
between Hawkeye Gold, LLC, a Delaware limited liability company (“Gold”), and Heartland Grain
Fuels, L.P., a South Dakota limited partnership (“Producer”).


RECITALS:





	A.	 	Producer operates an ethanol plant located in or around Aberdeen, South Dakota (as it may be
expanded from time to time, the “Plant”).
	 
	B.	 	This Agreement is being entered into in connection with the execution and delivery of that
certain Backstop Commitment Agreement, dated as of the date hereof, by and between Advanced
BioEnergy, LLC, a Delaware limited liability company and Hawkeye Energy Holdings, LLC, a
Delaware limited liability company (as the same may be amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Backstop Agreement”).
	 
	C.	 	Producer desires to sell to Gold, and Gold desires to purchase from Producer, all the dried
distiller’s grains (“DDG”), wet distiller’s grains (including modified wet distiller’s grains,
“WDG”) and corn syrup produced at the Plant (collectively, the “Distiller’s Grains”), all upon
and subject to the terms and conditions set forth in this Agreement.





     NOW, THEREFORE, in consideration of the foregoing Recitals and the agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Gold and Producer agree as follows:



     1. PURCHASE AND SALE OF DISTILLER’S GRAINS. Gold shall use commercially reasonable
efforts to from time to time submit purchase orders or purchase contracts (each, a “Purchase
Order”) to Producer for purchases of the Distiller’s Grains, all upon and subject to the terms and
conditions of this Agreement. Gold may place a Purchase Order with Producer orally, by email or by
a written purchase order or contract in a form mutually acceptable to Producer and Gold. The terms
of any Purchase Order may include a request for the sale and delivery of Distiller’s Grains on a
one-time basis or on a daily, weekly, monthly or other periodic basis. Each Purchase Order shall
be irrevocable by Gold, unless and until the time at which the particular Purchase Order becomes a
Rejected Purchase Order (as that term is defined below).



     Producer may accept or reject each Purchase Order, in whole, but not in part, but Producer may
only reject a Purchase Order for and on a commercially reasonable basis. Producer shall notify
Gold of whether Producer accepts or rejects each particular Purchase Order within the time period
specified in the Purchase Order in question, or if no time period is specified in the Purchase
Order, within 24 hours of Producer’s receipt of the Purchase Order (in













 




either case, the “Acceptance Period”), and if Producer fails to notify Gold within the
Acceptance Period, Producer shall be deemed to have rejected the Purchase Order in question. Gold
reserves the right to require Producer to accept or reject any particular Purchase Order or
Purchase Orders only in writing.




     Any Purchase Order which is accepted by Producer is referred to in this Agreement as an
“Accepted Purchase Order”, and any Purchase Order which is rejected by Producer is referred to in
this Agreement as a “Rejected Purchase Order”.



     Producer shall not sell or otherwise dispose of any Distiller’s Grains to any person other
than Gold during the term of this Agreement, except only that if Gold fails to take delivery of
Distiller’s Grains from the Plant and such failure will result in the Storage Limit (as that term
is defined in Section 5(c)) being exceeded, then Producer may sell or otherwise dispose of only the
amount of Distiller’s Grains as are necessary to cause the Storage Limit to not be exceeded
provided Producer gives Gold at least 24 hours prior written notice of Producer’s intent to sell or
dispose of any Distiller’s Grains pursuant to this paragraph.



     Gold may purchase and otherwise deal in dried distiller’s grains, wet distiller’s grains, corn
syrup and other products for Gold’s own use or account, and Gold may also market and sell dried
distiller’s grains, wet distiller’s grains, corn syrup and other products of other persons
(including affiliates or related parties of Gold), and provide services to other persons, on such
terms and conditions as are determined by Gold from time to time, but subject to Gold’s compliance
with Sections 14(c) and 14(e).



     2. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE. The purchase price payable by Gold to
Producer for the Distiller’s Grains which are purchased by Gold pursuant to this Agreement is as
follows:




     (a) The purchase price for DDG shall be the F.O.B. Plant Price (as that term is defined
below) for the DDG in question, less a marketing fee equal to the greater of (i) two percent
(2%) of the F.O.B. Plant Price for the DDG, or (ii) the amount determined by multiplying the
number of tons of DDG (rounded to the nearest one hundredth decimal point) by $1.30.




     (b) The purchase price for WDG shall be the F.O.B. Plant Price for the WDG in question,
less a marketing fee equal to the greater of (i) three percent (3%) of the F.O.B. Plant
Price for the WDG, or (ii) the amount determined by multiplying the number of tons of WDG
(rounded to the nearest one hundredth decimal point) by $1.00.




     (c) The purchase price for corn syrup shall be the F.O.B. Plant Price for the corn
syrup in question, less a marketing fee equal to the amount determined by multiplying the
number of tons of corn syrup (rounded to the nearest one hundredth decimal point) by $2.00.


The marketing fee which is retained by Gold pursuant to subparagraphs (a), (b), and (c) above is at
times referred to in this Agreement as the “Marketing Fee”.






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     The term “F.O.B. Plant Price” means the sale price and other amounts billed or invoiced to the
Gold customer in question for the DDG, WDG or corn syrup in question, less both all Reimbursement
Amounts and all Freight Costs (as those terms are defined below).



     The term “Reimbursement Amounts” means the sum of all amounts which were billed to the Gold
customer in question which are for reimbursement of out-of-pocket costs and expenses of Gold. The
term “Freight Costs” means all direct and indirect costs, expenses and other amounts paid or
incurred by Gold in connection with the pick-up, shipment, delivery or other transportation of
Distiller’s Grains to the Gold customer in question, including freight, insurance, express bills
and terminal fees.



     If the Reimbursement Amounts and the Freight Costs equal or exceed the sale price for any
particular Distiller’s Grains, it will be commercially reasonable for Gold to fail to submit a
Purchase Order to Producer for those Distiller’s Grains.



     Subject to Sections 3, 9 and 38, and to possible extension as provided in Section 5(b), Gold
shall pay Producer for Distiller’s Grains which have been delivered to Gold during a given week
(i.e. Sunday through Saturday) so that the payment is received by Producer on or before the second
(2nd) following Friday which follows the close of the week in question. Each payment
shall be accompanied by a summary which identifies the Distiller’s Grains which are the subject of
the payment and which includes the gross sales prices, the F.O.B. Plant Prices, the Reimbursement
Amounts and the Freight Costs for each shipment of such Distiller’s Grains.



     3. ON-SITE MERCHANDISER. If Gold and Producer have both placed their in-itials or
signature in the margin next to this Section, then Gold shall provide and maintain a full-time
Distiller’s Grains merchandiser at the Plant (the “Merchandiser”), and Producer shall, at
Producer’s cost and expense, provide the Merchandiser with reasonable administrative support,
office space and other facilities and supplies at the Plant and shall otherwise reasonably
cooperate with and assist the Merchandiser. Producer shall also pay Gold a fee with respect to the
Merchandiser of one-half percent (.50%) of the F.O.B. Plant Price for all Distiller’s Grains
purchased by Gold pursuant to this Agreement (the “Merchandiser Fee”). The Merchandiser Fee may be
retained and withheld by Gold from the payments which are to be made by Gold to Producer pursuant
to Section 2, or Gold may invoice Producer for the Merchandiser Fee on a monthly basis. In the
latter event, the Merchandiser Fee shall be due and payable by Producer within ten days of the date
of Gold’s invoice. The Merchandiser shall be and remain an employee of Gold, and Gold may
designate and replace the Merchandiser at any time, in Gold’s discretion.



     4. PRODUCTION AND LOADING SCHEDULES. Producer shall provide to Gold, by the second
business day of each week, production schedules that will (i) accurately specify the Distiller’s
Grains production schedule at the Plant for the following six calendar weeks (the “Six Week
Schedule”), and (ii) estimate the Distiller’s Grains production schedule at the Plant for the six
calendar weeks which follow the Six Week Schedule. Producer shall also provide to Gold, on a daily
basis by 8:30 a.m. Central Standard Time, a status report regarding that day’s Distiller’s Grain
inventory and production schedule for the Plant.



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     Gold shall schedule the loading and shipping of all Distiller’s Grains at the Plant, and shall
provide Producer with daily or other periodic loading schedules specifying the quantities of
Distiller’s Grains to be removed from the Plant each day, and specifying the method of removal
(i.e., by truck or rail), with sufficient advance notice so as to allow Producer, acting in a
commercially reasonable manner, to timely perform Producer’s drying, loading and related
obligations under this Agreement.



     Producer and Gold shall cooperate in coordinating production and loading schedules, including
by promptly notifying the other of any changes in any production or loading schedules delivered
hereunder; provided, however, that Gold shall be entitled to act and rely upon each Six Week
Schedule provided by Producer and each loading schedule provided by Gold.



     5. DELIVERY, STORAGE, LOADING, TITLE.




     (a) Delivery. The place of delivery for all Distiller’s Grains purchased by
Gold under this Agreement shall be F.O.B. the Plant. Producer shall grant and allow Gold
and its agents (including all truck and rail carriers) access to the Plant in a manner and
at all times reasonably necessary and appropriate for Gold to take delivery of Distiller’s
Grains in accordance with the loading schedules provided by Gold pursuant to Section 4.




     (b) Producer Delivery Reports. Producer shall provide Gold each day, weekends
and holidays excluded, with meter or weight certificates and, with respect to truck
deliveries, bills of lading, for the previous day’s deliveries of Distiller’s Grains to
Gold. The meter or weight certificates and bills of lading with respect to any deliveries
which are made on a weekend or a holiday will be provided to Gold on the next succeeding
business day. Gold shall in no event be obligated to pay for a shipment of Distiller’s
Grains (whether by rail or by truck) until Gold has received the meter or weight
certificates and also the bills of lading for such Distiller’s Grains, and Gold’s obligation
to pay for Distiller’s Grains shall be extended one week for each four days late that such
meter or weight certificates and/or bills of lading are provided to Gold.




     (c) Producer Storage. Producer shall provide storage space at the Plant for
not less than 7 full days of combined Distiller’s Grains production at the Plant (the
“Storage Limit”), based on the Plant’s then normal operating capacity, and such storage
space shall be continuously available for Gold’s use for storage of Distiller’s Grains,
without charge to Gold.




     (d) Loading. Subject to Section 6, Gold shall arrange for trucks or railcars
to be at the Plant for pick-up of Distiller’s Grains in accordance with the loading
schedules provided by Gold pursuant to Section 4.




     Producer shall provide and supply, without charge to Gold, all facilities, equipment
and labor necessary to load the Distiller’s Grains into the trucks or railcars at the Plant
in accordance with the loading schedules provided by Gold pursuant to Section



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4. Producer agrees that all railcars shall be loaded to full visible capacity at the
Plant. Producer shall maintain all loading facilities and equipment at the Plant in
accordance with industry standards and in good and safe operating condition and repair,
subject to ordinary wear and tear and depreciation.




     (e) Handling of Distiller’s Grains. Gold and Producer shall each handle the
Distiller’s Grains during the loading process in a good and workmanlike manner in accordance
with the other’s reasonable requirements and customary industry practices.




     (f) Title and Risk of Loss. Subject to Section 9, title, risk of loss, and
shipping responsibility for Distiller’s Grains which are loaded into trucks at the Plant
shall pass from Producer to Gold upon the loading of such Distiller’s Grains into the trucks
at the Plant and Producer’s delivery to the truck carrier of a bill of lading for the
Distiller’s Grains in question. Subject to Section 9, title, risk of loss, and shipping
responsibility for Distiller’s Grains which are loaded into railcars at the Plant shall pass
from Producer to Gold upon the loading of such Distiller’s Grains into the railcars at the
Plant and Gold’s receipt of written notice (the “Railcar Loading Notice”) from Producer that
such Distiller’s Grains have been loaded and are available for billing. Producer shall give
each Railcar Loading Notice to Gold within 12 hours of the loading of the railcars in
question, weekends and holidays excluded. A Railcar Loading Notice with respect to any
deliveries which are made on a weekend or a holiday shall be provided to Gold within 12
hours of the start of the next succeeding business day.



     6. PRODUCER MUST PROVIDE RAILCARS. Gold shall consult with Producer regarding the
number of railcars that may be needed from time to time to ship the Distiller’s Grains. Producer
agrees to use Producer’s best efforts to obtain access to and the use of the number of railcars,
through a railcar lease or other arrangement, as are necessary from time to time for the timely and
efficient shipment and transportation of the Distiller’s Grains and to make the railcars available
to Gold for the loading, shipment and transportation of Distiller’s Grains. Gold shall not have
any liability or responsibility with respect to or for the lease or other arrangements of Producer
regarding the railcars. Gold shall utilize commercially reasonable efforts to coordinate the use
of Producer’s railcars in a cost effective manner, but Producer acknowledges that the efficient use
of Producer’s railcars depends on various factors, many of which are outside of Gold’s control,
including general market conditions for distiller’s grains, general railroad and freight
conditions, the frequency of Accepted Purchase Orders, the delivery times under Accepted Purchase
Orders and the locations and related transportation periods which apply to Gold’s customers for
Distiller’s Grains.



     7. QUANTITY OF DISTILLER’S GRAINS. The quantity of Distiller’s Grains delivered to
Gold under this Agreement by truck shall be definitively established by outbound meter and weight
certificates obtained from meters and scales of Producer or another person that are properly
certified as of the time of loading in accordance with any requirements imposed by any governmental
or regulatory authorities and that otherwise comply in all material respects with all applicable
laws, rules and regulations. Producer agrees to maintain at the Plant, in good and safe operating
condition and repair and in accordance in all material respects with all applicable laws, rules and
regulations, truck weights suitable for weighing Distiller’s Grains. All



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costs and expenses incurred in connection with obtaining such certificates, and maintaining
such truck weights, shall be borne by Producer.




     In the case of rail shipments, the first official railroad weights will govern and
definitively establish the quantity of Distiller’s Grains delivered to Gold under this Agreement.



     Gold acknowledges that the current estimated monthly production of Distiller’s Grains at the
Plant at full operation is set forth below Producer’s signature to this Agreement, but that
Producer may, but is not required to, expand the capacity of Plant. If Producer determines to
expand the capacity of the Plant, Producer shall give Gold written notice of such expansion, and of
the estimated monthly production of Distiller’s Grains at the Plant after such expansion, at least
six months before the estimated completion date of the construction activities related to such
expansion.



     8. QUALITY OF DISTILLER’S GRAINS. Producer acknowledges that (i) Gold intends to sell
the Distiller’s Grains as a primary animal feed ingredient, (ii) the Distiller’s Grains are subject
to certain industry and governmental standards, and (iii) consistent quality is important to
achieving an optimal sales price for the Distiller’s Grains. Producer agrees that Producer shall
use commercially reasonable efforts to produce and deliver Distiller’s Grains of consistent quality
and composition, and, in addition, but without limiting the generality of the foregoing, Producer
represents and warrants to Gold that all Distiller’s Grains: (i) shall be suitable and safe for
use as an animal feed ingredient, (ii) shall meet the minimum quality standards set forth in
Exhibit “A”, (iii) shall not be adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act, as amended from time to time (the “Act”), and (iv) may lawfully be
introduced into interstate commerce under the Act.



     9. REJECTION OF DISTILLER’S GRAINS BY GOLD. Gold may reject, before or after
delivery, any Distiller’s Grains that fail to conform to Section 8 or are otherwise unsaleable
because of a failure to meet industry standards or the requirements of any applicable law, rule or
regulation; provided, however, that Producer must receive written notice of rejection of a load of
Distiller’s Grains on such basis from Gold within 48 hours of the delivery of such Distiller’s
Grains to the ultimate customer or such Distiller’s Grains shall be deemed to be accepted by Gold.



     If any Distiller’s Grains are seized or condemned by any governmental authority for any reason
other than the failure of Gold to comply with any term of this Agreement (a “Governmental
Seizure”), the Governmental Seizure shall automatically constitute a rejection by Gold of the
Distiller’s Grains which are the subject of the Governmental Seizure, and Gold shall have no
obligation to offer any defense in connection with the Governmental Seizure. Gold shall, however,
notify Producer of the Governmental Seizure within 48 hours of Gold receiving notice of the
Governmental Seizure. Gold shall also reasonably cooperate with Producer, but at Producer’s cost
and expense, in defending against or otherwise contesting the Governmental Seizure.



     If any Distiller’s Grains are rejected by Gold (the “Rejected Grains”), Gold will, in the
following order:



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     (a) Offer Producer a reasonable opportunity, but in no event to exceed 48 hours
following rejection, to examine and take possession of the Rejected Grains, at Producer’s
cost and expense, if Gold reasonably determines that the condition of the Rejected Grains
and the other circumstances permit such examination and delivery prior to disposal of the
Rejected Grains; or




     (b) Dispose of the Rejected Grains in the manner as directed by Producer, and at
Producer’s cost and expense, subject to the requirements of applicable laws, rules and
regulations and to any customer or other third party rights; or




     (c) If Gold has no reasonably available means of disposing of the Rejected Grains, and
if Producer fails to direct Gold to dispose of the Rejected Grains or directs Gold to
dispose of the Rejected Grains in a manner inconsistent with applicable laws, rules or
regulations or with any customer or other third party rights, then Gold may return the
Rejected Grains to Producer, at Producer’s cost and expense.



     Gold’s obligation with respect to any Rejected Grains shall be fulfilled upon Producer taking
possession of the Rejected Grains, the disposal of the Rejected Grains or the return of the
Rejected Grains to Producer, as the case may be, in accordance with subparagraphs (a), (b) or (c)
above.



     Producer shall reimburse Gold for all costs and expenses incurred by Gold for storing,
transporting, returning, disposing of, or otherwise handling Rejected Grains, and Gold shall
provide Producer with reasonable substantiating documentation for all such costs and expenses.
Producer shall also refund any amounts paid by Gold to Producer for Rejected Grains within 10 days
of the date of Producer’s receipt of Gold’s written notice of the rejection. Gold has no
obligation to pay Producer for Rejected Grains, and Gold may deduct from payments otherwise due
from Gold to Producer under this Agreement the amount of any reimbursable costs or any required
refund by Producer as described above.



     If any Distiller’s Grains are rejected by Gold following the transfer of title and risk of
loss to Gold under Section 5(f), title and risk of loss shall automatically revert to Producer
effective upon the rejection of the Distiller’s Grains.



     10. TESTING AND SAMPLES. If Producer knows or has reason to believe that any
Distiller’s Grains do not comply with Section 8 or may be subject to rejection under Section 9,
Producer shall promptly notify Gold so that such Distiller’s Grains can be tested before entering
interstate commerce. If Gold knows or has reason to believe that any Distiller’s Grains do not
comply with Section 8 or may be subject to rejection under Section 9, then Gold may obtain
independent laboratory tests of such Distiller’s Grains. If the test was initiated by Gold
pursuant to the preceding sentence and if the Distiller’s Grains are tested and found to comply
with Section 8 and to not be subject to rejection, then Gold shall be responsible for the costs of
testing such Distiller’s Grains. Producer shall be responsible for all testing costs in all other
circumstances.



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     Producer will take an origin sample of Distiller’s Grains from every truck and railcar loaded
with Distiller’s Grains at the Plant, using sampling methodology that is consistent with then
prevailing industry standards. Producer will label the samples to indicate the date of loading,
and will retain the samples for not less than six months.



     Producer shall, within 3 days of the close of each calendar week, deliver to Gold a composite
analysis of all Distiller’s Grains produced at the Plant during such week, and also at such other
times and for such production periods as are requested by Gold from time to time. The composite
analysis shall address, without limitation, the matters set forth in Exhibit “B” and shall be in a
format reasonably acceptable to Gold and Producer.



     11. GOLD MARKS. Gold may market and sell the Distiller’s Grains under such names,
marks, brands and logos as are determined by Gold from time to time, in its sole discretion
(collectively, the “Marks”). The Marks shall at all times be the sole and exclusive property of
Gold, and Gold reserves to itself all rights, entitlements and benefits of ownership and property
of every kind and nature whatsoever in, to or in any way arising from or related to the Marks,
including all goodwill.



     Producer shall not utilize any of the Marks without the prior written consent of Gold, which
consent may be withheld in Gold’s sole discretion. Any permitted use of any Mark by Producer shall
not grant Producer any rights in the Mark, other than as a nonexclusive licensee, and shall in each
event be (i) limited in scope, area, use and otherwise in accordance with the express consent as
granted by Gold, (ii) in strict accordance with Gold’s policies and requirements as established by
Gold from time to time, in its sole discretion, regarding the use of the Marks, (ii) nonassignable
and nontransferable, whether voluntarily or involuntarily, and (iv) terminable at any time upon the
giving of written notice by Gold, with or without cause, and in the absence of any such written
notice, terminated automatically and immediately upon the effective time of the termination of this
Agreement.



     12. FEES AND EXPENSES. Producer shall be responsible for all fees and charges
assessed or imposed on the Distiller’s Grains by any governmental authority or industry
organization with respect to the sale and delivery of the Distiller’s Grains to Gold as
contemplated by this Agreement, including for branding, packaging, inspection, or otherwise. If any
such fees or charges are paid by Gold, Producer shall reimburse Gold for such fees and charges
within 10 days of the date of Gold’s invoice therefor to Producer, which invoice shall be
accompanied by reasonable supporting documentation. Gold shall consult with Producer regarding any
fees or charges payable by Producer under this Section and the related governmental or industry
requirements and standards.



     13. DUTIES OF PRODUCER. In addition to Producer’s other duties and obligations under
this Agreement, Producer agrees as follows:




     (a) Producer shall cooperate with Gold in the performance of Gold’s services under this
Agreement, including by (i) providing Gold in a timely manner with any records or
information that Gold may reasonably request from time to time as part of Gold’s marketing
of the Distiller’s Grains, and (ii) furnishing any representative of Gold



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who may be working at the Plant from time to time with reasonable administrative
support, office space and other facilities and supplies.




     (b) Producer shall maintain the Plant, including the Distiller’s Grains drying
equipment, in good and safe operating repair and condition, subject to ordinary wear and
tear and depreciation.




     (c) Producer shall at all times have designated to Gold one or more employees of
Producer who shall have authority to act for and on behalf of Producer under this Agreement,
including for purposes of accepting Purchase Orders (each, a “Producer Representative”).
Producer may change the identity of any Producer Representative at any time, but no change
shall be effective with respect to Gold unless and until Gold has received written notice of
such change. Any action taken by a Producer Representative shall bind Producer and may be
relied upon, and acted on, by Gold without inquiry to, or confirmation from, Producer or any
other Producer Representative. Producer’s initial Producer Representative is identified
below Producer’s signature to this Agreement.




     (d) Producer shall provide Gold with not less than six months prior written notice of
any material change in any of the technology which is from time to time utilized at the
Plant.




     (e) Producer shall allocate Producer’s production of distiller’s grains among dried
distiller’s grains, wet distiller’s grains and modified wet distiller’s grains as necessary
to comply with Accepted Purchase Orders and Gold’s related loading schedules.




     (f) Producer shall perform its duties and obligations under this Agreement in a
commercially reasonable manner and in compliance in all material respects with all
governmental laws, rules and regulations which are applicable to Producer’s duties and
obligations under this Agreement.




     (g) Producer shall promptly advise Gold of any material problems with respect to any
Distiller’s Grains.




     (h) Producer shall promptly advise Gold of any matter regarding any Distiller’s Grains
which raises an issue of compliance of the Distiller’s Grains with applicable governmental
laws, rules or regulations or industry standards.




     (i) Producer shall obtain and continuously maintain in effect any and all governmental
or other consents, approvals, authorizations, registrations, licenses or permits which are
necessary or appropriate for Producer to fully and timely perform all of its duties and
obligations under this Agreement, including any state feed inspection tax and all other
state licenses, permits or other approvals which are necessary or appropriate to market and
sell the Distiller’s Grains.



     14. DUTIES OF GOLD. In addition to Gold’s other duties and obligations under this



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Agreement, Gold agrees as follows:





     (a) Gold shall use commercially reasonable efforts to achieve the highest F.O.B. Plant
Price available for Distiller’s Grains under the prevailing market conditions at the time of
sale by Gold.




     (b) Gold shall perform its duties and obligations under this Agreement in a
commercially reasonable manner and in compliance in all material respects with all
governmental laws, rules and regulations which are applicable to its services under this
Agreement.




     (c) In the event of a conflict of interest between the interests of Producer and one or
more other ethanol plants from which Gold purchases dried distiller’s grains or wet
distiller’s grains and/or markets them for sale (each, an “Other Client”), including with
respect to allocations of sales during times of excess supply of distiller’s grains and with
respect to sales price or other sales terms, Gold shall purchase and market the Distiller’s
Grains for sale in a consistent and commercially reasonable manner in relation to the dried
distiller’s grains and/or wet distiller’s grains, as the case may be, of the Other Clients.




     (d) Gold will deliver to Producer (i) a weekly report showing all of Gold’s sales of,
or trades in, distiller’s grains during the prior week, and (ii) a monthly report showing
all then outstanding contractual commitments that Gold has in place regarding any
Distiller’s Grains. Any proprietary positions held by Gold which are disclosed in such
reports will be identified or listed separately in such reports. The reports contemplated
by this subparagraph need not disclose the names or identities of any Other Clients or other
third parties to Gold’s transactions in any distiller’s grains, but Gold does not make any
assurances that Other Clients will not be able to determine the identity of Producer or
other Producer specific information from the reports.




     (e) Gold shall not accept for its own behalf or account any offer of a third party for
the purchase of any dried distiller’s grains or wet distiller’s grains unless a
corresponding purchase order from Gold has been rejected by Producer and the Other Clients.




     (f) Gold shall be responsible and liable for Gold’s relationship and dealings with all
third party purchasers of the Distiller’s Grains from Gold, including with respect to and
for billing, collections and account servicing and management, and Gold shall bear all
credit and collection risk with respect to Gold’s sales of Distiller’s Grains to third
parties.




     (g) Gold shall promptly advise Producer of any material problems or questions raised by
any customer with respect to any Distiller’s Grains.




     (h) Gold shall promptly advise Producer of any matter regarding the Distiller’s Grains
which comes to the attention of Gold which raises an issue of compliance of the



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Distiller’s Grains with applicable governmental laws, rules or regulations or industry
standards.




     (i) Gold shall obtain and continuously maintain in effect any and all governmental or
other consents, approvals, authorizations, registrations, licenses or permits which are
necessary or appropriate for Gold to fully and timely perform all of its services, duties
and obligations under this Agreement.




     (j) Gold shall reasonably consult with Producer regarding freight rates and prices and
trends in the distiller’s grains markets.



     15. REPRESENTATIONS AND WARRANTIES OF GOLD. Gold represents and warrants to Producer
as follows:




     (a) Gold is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has and shall maintain all requisite
power and authority to own or otherwise hold and use its property and carry on its business
as now conducted and as to be conducted pursuant to this Agreement.




     (b) This Agreement has been duly authorized, executed and delivered by Gold, and
constitutes the legal, valid and binding obligation of Gold, enforceable against Gold in
accordance with its terms. Gold has and shall maintain all requisite power and authority to
enter into and perform this Agreement, and all necessary actions and proceedings of Gold
have been taken to authorize the execution, delivery and performance of this Agreement.




     (c) The execution and performance of this Agreement do not and will not conflict with,
breach or otherwise violate any of the terms or provisions of the organizational or
governing documents of Gold or of any agreement, document or instrument to which Gold is a
party or by which Gold or any of its assets or properties are bound.




     (d) There is no civil, criminal or other litigation, action, suit, investigation, claim
or demand pending or, to the knowledge of Gold, threatened, against Gold, which may have a
material adverse effect upon the transactions contemplated by this Agreement or Gold’s
ability to perform its duties and obligations under, or to otherwise comply with, this
Agreement.



     16. REPRESENTATIONS AND WARRANTIES OF PRODUCER. Producer represents and warrants to
Gold as follows:




     (a) Producer is duly organized, validly existing and in good standing under the laws of
the state under which Producer was organized, and has and shall maintain all requisite power
and authority to own or otherwise hold and use its property and carry on its business as now
conducted and as to be conducted pursuant to this Agreement.



11









 






     (b) This Agreement has been duly authorized, executed and delivered by Producer, and
constitutes the legal, valid and binding obligation of Producer, enforceable against
Producer in accordance with its terms. Producer has and shall maintain all requisite power
and authority to enter into and perform this Agreement, and all necessary actions and
proceedings of Producer have been taken to authorize the execution, delivery and performance
of this Agreement.




     (c) The execution and performance of this Agreement do not and will not conflict with,
breach or otherwise violate any of the terms or provisions of the organizational or
governing documents of Producer or of any agreement, document or instrument to which
Producer is a party or by which Producer or any of its assets or properties are bound.




     (d) There is no civil, criminal or other litigation, action, suit, investigation, claim
or demand pending or, to the knowledge of Producer, threatened, against Producer, which may
have a material adverse effect upon the transactions contemplated by this Agreement or
Producer’s ability to perform its duties and obligations under, or to otherwise comply with,
this Agreement.




     (e) All Distiller’s Grains shall be delivered and sold to Gold by Producer free and
clear of all liens, restrictions on transferability, reservations, security interests,
financing statements, licenses, mortgages, tax liens, charges, contracts of sale, mechanics’
and statutory liens and all other liens, claims, demands, restrictions or encumbrances
whatsoever.



     17. NO OTHER WARRANTIES. Except for the express warranties set forth in Sections 8,
15 and 16 of this Agreement, neither Gold nor Producer make any express warranties whatsoever
regarding the Distiller’s Grains or any other matter whatsoever, and Gold and Producer hereby
exclude and disclaim in entirety all implied warranties whatsoever, including the implied
warranties of merchantability, noninfringement and fitness for a particular purpose, with respect
to all Distiller’s Grains and all other matters whatsoever. For example, Gold makes no
representation or warranty that Gold will be able to sell the Distiller’s Grains at profitable
prices or at all.



     18. NO INDIRECT DAMAGES. Except as otherwise provided below in this Section, under no
circumstances or theories (including breach of this Agreement) will Gold or Producer be liable to
the other for any lost profits, business or goodwill, or for any exemplary, special, incidental,
consequential or indirect damages whatsoever, which are in any way related to or connected with or
arise out of this Agreement (and even if Gold and/or Producer, as the case may be, knew or should
have known of the possibility of any of those damages) including to, with or out of any performance
or nonperformance by Gold, Producer or any Distiller’s Grains.



     Notwithstanding the foregoing or any other term of this Agreement which may appear to be the
contrary, however, Gold and Producer acknowledge and agree that the preceding paragraph is not
applicable to, and accordingly does not limit the scope or extent of Gold’s or



12









 




Producer’s liability with respect to (i) Sections 19 or 20; or (ii) any act or omission of Gold or
Producer, as the case may be, or of their respective employees or agents, which is, in whole or in
part, grossly negligent or reckless or which constitutes willful or wanton misconduct, fraud or an
intentional tort.




     19. CONFIDENTIALITY. Gold and Producer acknowledge that they may have access to
confidential information (as that term is defined below) of the other, and that it is necessary for
the other to prevent the unauthorized use or disclosure of confidential information. Accordingly,
and in further consideration for this Agreement, Gold and Producer covenant and agree that they
shall not, during the term of this Agreement or at any time within one year following the
termination of this Agreement (whether this Agreement is terminated by Gold, by Producer or by
mutual consent, and for whatever reason or for no reason), directly or indirectly, engage in or
take or refrain from taking any action or inaction which may lead to the use or disclosure of any
confidential information of the other by or to any person, or use or disclose any confidential
information of the other for their own benefit; provided, however, that Gold and Producer may use
and disclose the other’s confidential information during the term of this Agreement as necessary or
appropriate to Gold’s or Producer’s, as the case may be, performance of their duties and
obligations under this Agreement, including, with respect to Gold, its marketing and sale of the
Distiller’s Grains to third parties.



     The term “confidential information” means all information in any form which is proprietary or
confidential to, respectively, Gold or Producer, as the case may be, whether regarding their
services, products, business or otherwise, and whether or not designated as such when received,
obtained, compiled or observed by Gold or Producer, as the case may be.



     Notwithstanding the foregoing, however, the term “confidential information” shall in no event
include any information which: (i) is already lawfully known to, or in the possession of, Gold or
Producer, as the case may be, at the time of disclosure by the other; (ii) is or subsequently
becomes publicly available or publicly known through no wrongful act of Gold or Producer, as the
case may be; (iii) is disclosed or provided to Gold or Producer, as the case may be, by a person
having the right to make an unrestricted disclosure of the information; or (iv) is developed
independently by Gold or Producer, as the case may be, without the use of the other’s confidential
information.



     In addition, and notwithstanding any of the foregoing, Gold and Producer may disclose
confidential information of the other as may be required from time to time by any court order,
governmental action, legal process or by applicable law, rule or regulation; provided, however,
that in such event they shall, if permitted under the terms of such order, action, process, law,
rule or regulation, first give written notice to the other and shall reasonably cooperate, but at
the other’s sole cost and expense, in the other’s attempt to obtain a protective order or other
waiver or exclusion from the court or other applicable governmental or other authority.
Notwithstanding the preceding sentence, however, Gold and Producer may, without the consent of the
other, make such disclosures and filings of this Agreement and the transactions contemplated hereby
as Gold or Producer, as the case may be, from time to time determines to be necessary or
appropriate under, or as may be required in connection with, (i) the federal and applicable state
securities laws, rules or regulations, including the Securities Exchange Act of 1934 and the
various rules



13









 




and regulations promulgated pursuant thereto; and (ii) any debt or equity financing as may
from time to time be pursued or obtained by Gold or Producer or any affiliate of Gold or Producer,
as the case may be, including to any prospective or actual lenders or investors and to actual or
potential participants, assignees or transferees of any such lender or in connection with a
foreclosure, assignment in lieu of foreclosure or the exercise of any rights or remedies by any
such lender. Gold or Producer shall, where reasonably practicable, give the other prior written
notice of the fact that they intend to make a disclosure pursuant to the preceding sentence.




     As provided above, Gold’s and Producer’s respective obligations under this Section shall in
all events end and terminate on the date which is one year following the effective date of the
termination of this Agreement.



     Nothing in this Section is intended or shall be construed as requiring Gold or Producer to
furnish any confidential information to the other, except to the extent necessary or appropriate
for the other to perform and provide the services and duties required of such party under this
Agreement.



     20. NONSOLICITATION COVENANTS. Gold and Producer shall not, respectively, during the
term of this Agreement or at any time within one year of the effective date of the termination of
this Agreement (whether this Agreement is terminated by Gold, by Producer or by mutual consent, and
for whatever reason or for no reason), directly or indirectly, solicit or contact any employee of
the other for purposes of employing or otherwise retaining such employee without the express prior
written consent of the other, which consent may be withheld in Gold’s or Producer’s, as the case
may be, sole discretion. This paragraph shall not, however, prohibit general, nontargeted
solicitation such as general advertisements.



     Without limiting the preceding paragraph or any other rights or remedies as may be available
to Gold or Producer, as the case may be, if Gold or Producer, as the case may be, employs or
otherwise engages any individual who was at any time during the term of this Agreement an employee
of the other, Gold or Producer, as the case may be, shall, on the effective date of such employment
or other engagement, pay the other an amount equal to the total salary and other compensation that
was paid by the other to the individual during the individual’s last twelve months of employment or
other service to the other.



     21. REASONABLENESS OF COVENANTS. Gold and Producer acknowledge and agree that the
covenants set forth in Section 19 and Section 20 are reasonable and are necessary and appropriate
to protect the justifiable business interests of, respectively, Gold and Producer, and are not to
be limited or restricted in any way or found to be or held by any court or other applicable
authority to be unenforceable or invalid because of the scope of the area, actions subject thereto
or restricted thereby, the time period over which the covenants are applicable, or otherwise.
Without limiting Section 35, and in addition thereto, in the event any of the covenants set forth
in Section 19 or Section 20 are deemed by a court or other applicable authority, notwithstanding
the foregoing, to be too broad in terms of the scope of the area, actions subject thereto or
restricted thereby, the time period over which the covenants are applicable, or otherwise, Gold and
Producer expressly authorize and direct the court and/or such other applicable authority to enforce
each and all of the covenants contained in Section 19 and



14









 




Section 20 to the full and maximum extent the court or such other applicable authority, as the
case may be, deems permissible.




     Gold and Producer also agree that a breach or imminent breach of Section 19 or Section 20 by
them shall constitute a material breach of this Agreement for which the other will not have an
adequate remedy at law, and that the other’s remedies upon a breach or imminent breach of Section
19 or Section 20 by them therefore include the right to preliminary, temporary and permanent
injunctive relief restraining them and their employees and agents from any further violation of
Section 19 or Section 20, as the case may be, and without any requirement that the party pursuing
such injunctive relief post any bond or other form of collateral or security in order to be able to
pursue, obtain or maintain any such injunctive relief.



     22. EFFECTIVE DATE. This Agreement shall be effective as of the earlier of (a) the
date that is six months after the date first set forth above, and (b) such earlier date as Producer
and Gold, through their mutual exercise of commercially reasonable efforts, are able to implement
the terms hereof (the “Effective Date”).



     23. TERM. The initial term of this Agreement shall be for a period of three years
following the Effective Date (the “Initial Term”), unless terminated earlier under Section 24.
This Agreement shall automatically renew for successive additional one year terms (each, a “Renewal
Term”) following the expiration of the Initial Term or the Renewal Term then in effect, as the case
may be, unless Gold or Producer gives the other written notice of their election not to renew, for
whatever reason or for no reason, no later than 90 days prior to the end of the Initial Term or the
Renewal Term then in effect, as the case may be.



     24. TERMINATION. Producer and Gold shall also have the right to terminate this
Agreement as follows:




     (a) Producer may terminate this Agreement in any of the following events: (i) the
failure by Gold to make any payment to Producer when due, if such nonpayment has not been
fully cured within 5 days of Gold’s receipt of written notice thereof from Producer; (ii)
any breach or nonfulfillment of or any default under any term or condition of this Agreement
by Gold (other than a payment obligation), if such breach, nonfulfillment or default is not
fully cured by Gold within 10 days of Gold’s receipt of written notice thereof from
Producer; or (iii) upon the giving of written notice by Producer to Gold, without any
opportunity for cure by Gold, in the event of the insolvency of, business failure of,
appointment of a receiver of or for any part of the property of, assignment for the benefit
of creditors by, or the commencement of any proceeding (whether voluntary or involuntary)
under any bankruptcy, insolvency, debtor/creditor, receivership or similar or related law by
or against, Gold.




     (b) Gold may terminate this Agreement in any of the following events: (i) the failure
by Producer to make any payment to Gold when due, if such nonpayment has not been fully
cured within 5 days of Producer’s receipt of written notice thereof from Gold; (ii) any
breach or nonfulfillment of or any default under any term or condition of this Agreement by
Producer (other than a payment obligation), if such breach, nonfulfillment



15









 







or default is not fully cured by Producer within 10 days of Producer’s receipt of
written notice thereof from Gold; or (iii) upon the giving of written notice by Gold to
Producer, without any opportunity for cure by Producer, in the event of the insolvency of,
business failure of, appointment of a receiver of or for any part of the property of,
assignment for the benefit of creditors by, or the commencement of any proceeding (whether
voluntary or involuntary) under any bankruptcy, insolvency, debtor/creditor, receivership or
similar or related law by or against, Producer.




	This Agreement may also be terminated as provided in Section 27.





     25. EFFECT OF TERMINATION. The termination of this Agreement, by Gold or Producer,
and for whatever reason or for no reason, shall not affect any liability or obligation of Gold or
Producer under this Agreement which shall have accrued prior to or as a result of such termination,
including any liability for loss or damage on account of breach, nor shall the termination of this
Agreement (by Gold or Producer, and for whatever reason or for no reason) affect the terms or
provisions of this Agreement which contemplate performance or continuing obligations beyond the
termination of this Agreement, including the obligations of, as applicable, Gold and/or Producer
under Sections 11, 19, 20, 36 and 37.



     Upon the termination of this Agreement by Gold or Producer, and for whatever reason or for no
reason, Producer and Gold shall be and remain responsible for selling and purchasing, in accordance
with the terms and conditions of this Agreement, any Distiller’s Grains which are the subject of an
Accepted Purchase Order which has not yet been performed on the effective date of the termination
of this Agreement, and this Agreement shall also continue for that limited purpose.



     26. AUDIT RIGHTS. Gold and Producer shall each maintain complete, accurate and
up-to-date records of their activities with respect to, as applicable, the production, delivery,
shipment and sale of Distiller’s Grains pursuant to this Agreement (collectively, and in general,
the “Records”). Gold and Producer shall each have the right, upon reasonable notice to the other,
to examine the Records of the other during normal business hours for the purpose of determining the
accuracy of any payment, statement or other document provided by the other under this Agreement.
Gold and Producer shall maintain each of their respective Records for a period of two years from
the date of the creation of the particular Record in question.



     If Gold’s or Producer’s review of the Records of the other reveals any shortages or
deficiencies in the amount of any payments required to be made by Gold to Producer, or by Producer
to Gold, as the case may be, pursuant to this Agreement (an “Unpaid Amount”), Gold or Producer, as
the case may be, shall pay the Unpaid Amount to the other within 15 days of Gold’s or Producer’s,
as the case may be, written notice to the other of the Unpaid Amount. The party which owes the
Unpaid Amount is referred to as the “UA Payer,” and the party to which the Unpaid Amount is owed is
referred to as the “UA Recipient.” The UA Recipient’s written notice must include the basis for
the calculation of the Unpaid Amount. The UA Payer shall also pay, or reimburse the UA Recipient
for, the out-of-pocket costs and expenses incurred by the UA Recipient in connection with the
review of the Records in question if such review revealed a shortage or deficiency of two percent
(2%) or more in the aggregate amount of payments that



16









 




were required to be made to the UA Recipient by the UA Payer with respect to the period of
time which was the subject of the review in question. In addition, if Gold or Producer, as the
case may be, review the Records of the other more than once during any six month period, and the
costs and expenses of such review are not allocated to Gold or Producer pursuant to the preceding
sentence, the party conducting the review shall reimburse the costs and expenses incurred by the
other (including employee time) in connection with such review or reviews within 10 days of the
receipt of an invoice therefor from the other.




     27. FORCE MAJEURE. If any term or condition of this Agreement to be performed or
observed by Gold or Producer (other than a payment or indemnification obligation) is rendered
impossible of performance or observance due to any force majeure or any other act, omission,
matter, circumstance, event or occurrence beyond the commercially reasonable control of Gold or
Producer, as the case may be (each, an “Impossibility Event”), the affected party shall, for so
long as such Impossibility Event exists, be excused from such performance or observance, provided
the affected party (i) promptly notifies the other party of the occurrence of the Impossibility
Event, (ii) takes all such steps as are reasonably necessary or appropriate to terminate, remedy or
otherwise discontinue the effects of the Impossibility Event, and (iii) recommences performance
after the termination or discontinuance of the Impossibility Event; provided, however, that if
after 30 days from the occurrence of the Impossibility Event the affected party is still unable to
perform its obligations under this Agreement, the other party may, in such party’s sole discretion,
terminate this Agreement effective upon the giving of written notice to the affected party. The
term “Impossibility Event” includes an actual or threatened act or acts of war or terrorism, fire,
storm, flood, earthquake, acts of God, civil disturbances or disorders, riots, sabotage, strikes,
lockouts and labor disputes; provided, however, that nothing in this Section is intended to or
shall be interpreted as to require the resolution of labor disputes by acceding to the demands of
labor when such course is inadvisable in the discretion of the party subject to such dispute.



     28. ARBITRATION. Except as provided below, all controversies, disputes or claims
between Gold and Producer in any way related to, arising out of or connected with this Agreement
shall be resolved solely and exclusively through binding arbitration in accordance with the then
current commercial arbitration rules of the American Arbitration Association. The arbitration
proceeding shall be conducted in Des Moines, Iowa and shall be heard by one arbitrator mutually
agreed to by Gold and Producer; provided, however, that if Gold and Producer are unable to agree on
an arbitrator within 15 days of the date of a written demand for arbitration given by either Gold
or Producer, then Gold and Producer shall each select one arbitrator, and those two arbitrators
shall in turn select a third arbitrator, and the arbitration proceedings shall be heard and
determined before those three arbitrators, with the decision of a majority of the arbitrators to
govern.



     The arbitrator or arbitrators shall have the right to award or include in the award any relief
deemed appropriate under the circumstances, including money damages, specific performance,
injunctive relief and attorneys’ fees and costs in accordance with this Agreement, but subject to
Section 18.



     Gold and Producer agree that, in connection with any arbitration proceeding, they shall



17









 




file any compulsory counterclaim (as defined under the federal rules of civil procedure)
within 30 days after the date of the filing of the claim to which it relates.




     The award and decision of the arbitrator or arbitrators shall be conclusive and binding upon
Gold and Producer and judgment upon the award may be entered in any court of competent
jurisdiction.



     Gold and Producer shall share the costs of the arbitration equally, and shall pay their own
attorneys’ fees and other costs and expenses, except that the arbitrator or arbitrators may award
costs and fees to the prevailing party as the arbitrator or arbitrators deem appropriate.



     Notwithstanding the foregoing, no controversy, dispute or claim in any way related to, arising
out of or connected with Sections 19 or 20 or any action by Gold or Producer seeking specific
performance or injunctive relief shall be subject to arbitration under this Section unless Gold and
Producer, in their respective sole discretion, consent in writing to the arbitration of any such
particular controversy, dispute or claim.



     29. INSURANCE. Gold and Producer shall each maintain during the term of this
Agreement commercial general liability insurance with combined single limits of not less than
$2,000,000. The respective commercial general liability insurance policies issued to Gold and to
Producer must be reasonably acceptable to the other, and must (i) name the other as an additional
insured, (ii) provide for a minimum of 30 days written notice to the other prior to any
cancellation, termination, nonrenewal, amendment or other change of such insurance policy, and
(iii) provide that in the event of payment of any loss or damage the respective insurers will have
no rights of recovery against the other. Gold and Producer shall, respectively, provide reasonable
proof of such insurance to the other upon the reasonable request of the other from time to time.



     30. ASSIGNMENT. This Agreement shall be assignable by Gold or Producer, as the case
may be, only with the prior written consent of the other, which consent shall not be unreasonably
delayed, conditioned or withheld; provided, however, that Gold and Producer may,
respectively, without the consent of the other (i) assign this Agreement or any or all of its
rights and obligations under this Agreement to any Affiliate of Gold or Producer, as the case may
be; and (ii) assign this Agreement as collateral, security or otherwise to any financing source of
Gold or Producer, as the case may be, and any such financing source may in turn assign this
Agreement upon any foreclosure or other exercise of any rights or remedies against Gold or
Producer, as the case may be. Gold or Producer, as the case may be, shall give prompt written
notice to the other of any assignment by them pursuant to either of subclauses (i)
or (ii) in the preceding sentence. “Affiliate” shall mean, with respect to Gold or
Producer, any person controlling, controlled by or under common control with Gold or Producer, as
applicable.



     31. GOVERNING LAW. This Agreement is entered into and is performable in material part
in Iowa, and shall be governed by and construed in accordance with the laws of the State of Iowa,
but with regard to or application of the choice of law or conflicts of law provisions thereof.



18









 





     32. TRADE RULES. All purchases and sales of Distiller’s Grains under this Agreement
shall be governed by the Feed Trade Rules of the National Grain and Feed Association (as amended
from time to time, the “Trade Rules”) if and only to the extent that the Trade Rules are expressly
applicable to such purchases and sales; provided, however, that in the event of any conflict or
inconsistency between any term or provision of the Trade Rules and any term or condition of this
Agreement, this Agreement shall govern and control to the full extent of such conflict or
inconsistency. Notwithstanding the foregoing, the Arbitration Rules of the National Grain and Feed
Association shall not apply to this Agreement.



     33. NOTICES. Subject to the last paragraph in this Section, all notices and demands
desired or required to be given under this Agreement (“Notices”) shall be given in writing and
shall be given by (i) hand delivery to the address for Notices; (ii) delivery by overnight courier
service to the address for Notices; or (iii) sending the Notice by United States mail, postage
prepaid, certified mail, addressed to the address for Notices.



     All Notices shall be deemed given and effective upon the earliest to occur of (i) the hand
delivery of the Notice to the address for Notices, (ii) delivery by overnight courier service to
the address for Notices, or (iii) three business days after the depositing of the Notice in the
United States mail as provided in the foregoing paragraph.



     All Notices shall be addressed to the addresses set forth below the signatures to this
Agreement or to such other person or at such other address as Gold or Producer may from time to
time by Notice designate to the other as a place for service of Notice.



     Notwithstanding the foregoing, production schedules, loading schedules, delivery reports,
bills of lading, Railcar Loading Notices, rejection notices and invoices to be provided under this
Agreement may be delivered by facsimile or email to the facsimile numbers or email addresses set
forth below the signatures to this Agreement or to such other number or email address as Gold or
Producer may from time to time by Notice designate to the other.



     34. BINDING EFFECT ON SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of Gold and Producer and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person
other than Gold and Producer (and their respective successors and permitted assigns) any rights,
remedies, liabilities or obligations under or by reason of this Agreement, except that (i) Producer
acknowledges that Gold shall sell the Distiller’s Grains to third parties based upon and in
reliance on Producer’s representations and warranties set forth in Section 8 and Section 16(e), and
(ii) Gold’s and Producer’s respective affiliates, employees and agents shall have the rights
provided in, respectively, Sections 36 and 37.



     35. SEVERABILITY. In the event any provision of this Agreement is held invalid,
illegal or unenforceable, in whole or in part, the remaining provisions of this Agreement shall not
be affected thereby and shall continue to be valid and enforceable. In the event any provision of
this Agreement is held to be invalid, illegal or unenforceable as written, but valid, legal and
enforceable if modified, then such provision shall be deemed to be amended to such extent as



19









 




shall be necessary for such provision to be valid, legal and enforceable and it shall be enforced
to that extent. Any finding of invalidity, illegality or unenforceability in any jurisdiction
shall not invalidate or render illegal or unenforceable such provision in any other jurisdiction.




     36. INDEMNIFICATION BY PRODUCER. Subject to Section 18, Producer shall indemnify,
defend and hold Gold and Gold’s affiliates, employees and agents harmless from and against any and
all suits, actions, proceedings, claims, counterclaims, losses, damages, liabilities, costs and
expenses (including attorneys’ fees) in any way arising in connection with or resulting from (i)
any breach or nonfulfillment of or default under any term or condition of this Agreement by
Producer, or (ii) any act or omission of Producer which is, in whole or in part, grossly negligent
or reckless or which constitutes willful or wanton misconduct, fraud or an intentional tort. Any
payment owed by Producer to Gold under this Agreement which is not made within two days of the date
on which the payment was due shall bear interest from the date such payment was due until it is
paid at the Prime Rate as published in The Wall Street Journal from time to time, plus four percent
(4%).



     37. INDEMNIFICATION BY GOLD. Subject to Section 18, Gold shall indemnify, defend and
hold Producer and Producer’s affiliates, employees and agents harmless from and against any and all
suits, actions, proceedings, claims, counterclaims, losses, damages, liabilities, costs and
expenses (including attorneys’ fees) in any way arising in connection with or resulting from (i)
any breach or nonfulfillment of or default under any term or condition of this Agreement by Gold,
or (ii) any act or omission of Gold which is, in whole or in part, grossly negligent or reckless or
which constitutes willful or wanton misconduct, fraud or an intentional tort. Any payment owed by
Gold to Producer under this Agreement which is not made within two days of the date on which the
payment was due shall bear interest from the date such payment was due until it is paid at the
Prime Rate as published in The Wall Street Journal from time to time, plus four percent (4%).



     38. RIGHT OF OFFSET. Gold has and hereby reserves the right to setoff against and
withhold from any amounts due or owing to Producer by Gold under this Agreement any and all amounts
of whatever kind or nature as may from time to time be due or owing to Gold from Producer and which
are past due or which arise out of or under Section 36. Producer has and hereby reserves the right
to setoff against and withhold from any amounts due or owing to Gold by Producer under this
Agreement any and all amounts of whatever kind or nature as may from time to time be due or owing
to Producer from Gold and which are past due or which arise out of or under Section 37.



     39. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on the part of Gold or
Producer in exercising any right, power or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. Except as
provided in Section 18, the remedies provided for in this Agreement are cumulative and are not
exclusive of any remedies that may be available to Gold or Producer at law, in equity or otherwise.
No amendment, modification, supplement, termination or waiver of or to any provision of this
Agreement, or consent to any departure therefrom, shall be effective unless the same shall be in
writing and signed by Gold and Producer. Producer and Gold may amend this



20









 




Agreement pursuant to an Accepted Purchase Order which is signed by both Producer and Gold and
which specifically provides that specified terms of such Accepted Purchase Order constitute an
amendment of specified terms of this Agreement (a “PO Amendment”). A PO Amendment and any other
amendment, modification or supplement of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the specific purpose for
which made or given. A PO Amendment shall also be effective only with respect to the particular
Accepted Purchase Order in question.




     40. COUNTERPARTS; DELIVERY BY FACSIMILE TRANSMISSION. This Agreement may be executed
in counterparts (including by facsimile or email), each of which shall be deemed an original and
shall constitute one and the same Agreement.



     41. ENTIRE AGREEMENT. This Agreement and any exhibits and schedules to this Agreement
constitute the entire agreement between Gold and Producer relating to the subject matters of this
Agreement, and supersede all negotiations, preliminary agreements and all prior or contemporaneous
discussions and understandings of Gold and Producer in connection with the subject matters of this
Agreement. No course of dealing or usage of trade, except only as expressly provided in Section
32, shall be relevant or admissible to supplement, explain, or vary any of the terms of this
Agreement. Gold hereby objects to any additional, different or inconsistent terms which may be set
forth in any purchase order or any other document that Producer may at any time and from time to
time submit to Gold, and no such additional, different or inconsistent terms shall be a part of
this Agreement or shall have any force or effect whatsoever. In the event of any conflict or
inconsistency between any terms and conditions of this Agreement and any purchase order or any
other document as may be submitted by Producer hereunder, the terms and conditions of this
Agreement shall govern and control to the full extent of such conflict or inconsistency.



     42. RECORDING OF TELEPHONE CONVERSATIONS. Producer consents to the recording by Gold
of all telephone conversations between Gold and Producer. Gold also consents to the recording by
Producer of all telephone conversations between Producer and Gold.



     43. CONSTRUCTION; CERTAIN DEFINITIONS; GENDER AND NUMBER. This Agreement shall not be
construed more strongly against Gold or Producer, regardless of who is more responsible for its
preparation.



     The use of the words “herein,” “hereof,” “hereunder” and other similar compounds of the word
“here” in this Agreement mean and refer to this entire Agreement, and not to any particular
section, paragraph or provision. The words “include,” “includes” and “including” are used in this
Agreement in a nonexclusive manner and fashion, that is so as to include, but without limitation,
the facts, items or matters in question. Any references in this Agreement to a “Section,”
“Exhibit” or “Schedule” shall, unless otherwise expressly indicated, be a reference to the section
in this Agreement or to such exhibit or schedule to this Agreement. Words and phrases in this
Agreement shall be construed as in the singular or plural number and as masculine, feminine or
neuter gender, according to the context. The titles or captions of sections and paragraphs in this
Agreement are provided for convenience of reference only, and shall not be considered a part of



21









 




this Agreement for purposes of interpreting or applying this Agreement and such titles or captions
do not define, limit, extend, explain or describe the scope or extent of this Agreement or any of
its terms or conditions. The word “person” as used in this Agreement includes natural persons and
all forms and types of entities.




     44. NATURE OF RELATIONSHIP. Nothing contained in this Agreement and no action taken
or omitted to be taken by Gold or Producer pursuant to this Agreement shall be deemed to constitute
Gold and Producer a partnership, an association, a joint venture or other entity whatsoever. Gold
shall at all times be acting as an independent contractor under this Agreement, and Gold does not
have the authority to enter into any contract or agreement on behalf of Producer.



     45. TIME IS OF THE ESSENCE. Gold and Producer each acknowledge and agree that time is
of the essence in the performance by them of their respective duties and obligations under this
Agreement.



     46. WAIVER OF JURY TRIAL; JURISDICTION. Without limiting Section 28, Producer and
Gold waive any right to a jury trial in and with respect to any suit, action, proceeding, claim,
counterclaim, demand or other matter whatsoever arising out of this Agreement. Producer and Gold
submit to the nonexclusive jurisdiction of any United States or Iowa court sitting in Des Moines,
Iowa in any action or proceeding arising out of or relating to this Agreement which is not subject
to Section 28 and with respect to the enforcement of any arbitration award under Section 28.



[Remainder of Page Intentionally Left Blank – Signature Page Follows]









22









 








     IN WITNESS WHEREOF, Gold and Producer have executed this Agreement as of the date first
written above, to be effective as of the Effective Date.



	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 
	HEARTLAND GRAIN FUELS, L.P.	 	HAWKEYE GOLD, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By: 
	/s/ Richard R. Peterson
	 	By:
	 	/s/ Timothy B. Callahan	 	 
	 

	 
	 	 	 	 	 	 
	 

	Name: Richard R. Peterson
	 	 	 	Name: Timothy B. Callahan	 	 
	 

	Title: CFO
	 	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 	 	 
	Address:	 	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	224 S. Bell Ave.	 	 
	 

	 	 	 	 	 	Ames, Iowa 50010	 	 
	Attn:

	 	 	 	 	Attn: Timothy B. Callahan	 	 
	 

	 	 	 	 	 	 	 	 
	Fax Number:
	 	 	 	Fax Number: 515-233-5902	 	 
	Email:

	 	 	 	 	Email: tcallahan@hawkeye-energy.com	 	 
	 

	 	 	 	 	 	 	 	 





Location of Plant: Aberdeen, SD [Recital A]

Monthly Production:                      Tons [Section 7]

Producer Representative:




                                                            [Section 13(c)]




Exhibit A: Minimum Quality Standards [Section 8]

Exhibit B: Composite Analysis Matters [Section 10]




[Signature Page to Hawkeye Gold Distillers Grains Agreement]







 









 








EXHIBIT A




MINIMUM QUALITY STANDARDS

FOR

WET AND DRY DISTILLER’S GRAINS AND CORN SYRUP



	 	 	 	 	 	 	 	 	 	 	 
	 	 	Component	 	Minimum	 	Maximum
	DDG
	 	Protein	 	 	26	%	 	 	N/A	 
	 
	 	Fat	 	 	7.5	%	 	 	N/A	 
	 
	 	Fiber	 	 	N/A	 	 	 	15	%
	 
	 	Ash	 	 	N/A	 	 	 	5	%
	 
	 	Moisture	 	 	10	%	 	 	13	%






	 	 	 	 	 	 	 	 	 	 	 
	 	 	Component	 	Minimum	 	Maximum
	WDG
	 	Protein	 	 	10.5	%	 	 	N/A	 
	 
	 	Fat	 	 	3	%	 	 	N/A	 
	 
	 	Fiber	 	 	N/A	 	 	 	5	%
	 
	 	Ash	 	 	N/A	 	 	 	2.5	%
	 
	 	Moisture	 	 	60	%	 	 	N/A	 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	Component	 	Minimum	 	Maximum
	Modified WDG
	 	Protein	 	 	15.0	%	 	 	N/A	 
	 
	 	Fat	 	 	4.5	%	 	 	N/A	 
	 
	 	Fiber	 	 	N/A	 	 	 	9.0	%
	 
	 	Ash	 	 	N/A	 	 	 	4.0	%
	 
	 	Moisture	 	 	50	%	 	 	55	%





The Distiller’s Grains shall have Aflatoxin levels of less than 20 ppb. The Distiller’s Grains
shall be no warmer than the higher of (i) the daily high of the ambient outside temperature or (ii)
60 degrees Fahrenheit. The Distiller’s Grains shall not have a musty, moldy or sour smell or other
commercially objectionable odor. The Distiller’s Grains shall be cool and sweet and must be able
to pour freely into the shipping container.




All Corn Syrup shall meet industry standards.




[Exhibit to Hawkeye Gold Distillers Grains Agreement]




 









 





EXHIBIT B




COMPOSITE ANALYSIS MATTERS



MOISTURE, %

DRY MATTER, %

CRUDE PROTEIN, %

A.D. FIBER, %

N.D. FIBER, %

CRUDE FIBER, %

ASH, %

TOTAL DIGEST NUTRS., %

NET ENERGY, MAIN.

NET ENERGY, GAIN

NET ENERGY, LACT.

DIG. ENERGY, SWINE

MET. ENERGY, SWINE

CALCIUM, %

PHOSPHORUS, %

ACID FAT, %

SULFUR, %

COLOR SCORE

COMPLETE MYCOTOXINS

COMPLETE AMINO ACIDS

PARTICLE SIZE




[Exhibit to Hawkeye Gold Distillers Grains Agreement]