Exhibit 10.2


 






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


 


CORN OIL MARKETING AGREEMENT


 


THIS
CORN OIL MARKETING AGREEMENT  (the “Agreement”) is made and entered into as of the 11 day of August,
2009 (the “Effective Date”) by and between RPMG, INC., a
Minnesota corporation (“RPMG”) and Dakota Ethanol, LLC, a South
Dakota company (“Producer”), collectively referred to hereinafter as
“Parties” or individually as a “Party”.


 


RECITALS


 


A.                                 RPMG markets CORN OIL (as hereinafter
defined).


 


B.                                   Producer produces CORN OIL at Producer’s
ethanol production facility located at Wentworth, SD (the “Ethanol Facility”).


 


C.                                   The Parties do desire that RPMG shall
market CORN OIL 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 Corn Oil.  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 corn oil  produced at
the Ethanol Facility, including any expansion or increase in capacity at the
Ethanol Facility.  RPMG shall be the
exclusive marketer of corn oil and Producer shall not, either itself (except as
set forth in the foregoing sentence) or through any affiliate or any third
party, market any corn oil during the term of this Agreement.  Except as otherwise provided in this
Agreement, RPMG shall provide management resources to market and sell corn oil,
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 corn oil in accordance with the terms set forth in Exhibit A.  RPMG shall use commercially reasonable
efforts to make such payments to Producer on an average net ten (10) days.


 


(b)                                 RPMG Commission. 
Producer shall pay RPMG commissions as follows: $*** for each pound of
corn oil sold to third party end purchasers (each, an “End Customer”).  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 corn oil 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
the maximum rate permitted by applicable law.


 


(e)                                  No Warranty as to Prices. 
RPMG shall market Producer’s corn oil using commercially reasonable
efforts and the same standards it uses to market the corn oil production of
third parties for whom RPMG provides corn oil marketing services.  RPMG shall endeavor to (i) maximize the
corn oil price and minimize freight and other costs relevant to corn oil 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 CORN OIL 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 corn oil
marketed under this Agreement, in light of varying freight and other costs, and
(ii) that RPMG may sell and market corn oil of third parties into the same
markets where RPMG sells Producer’s corn oil. 
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 give written notice to RPMG of its desire to conduct an audit of
its corn oil payments to Producer for the preceding year 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.  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 corn oil upon the Effective
Date.  If Producer is not producing corn
oil as of the Effective Date, 


 


2

















 


Producer shall, on
the Effective Date, provide RPMG with the projected date on which Producer will
first deliver corn oil 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 corn oil
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 corn oil product for that day and the next seven days.


 


(c)                                  Additional Production Notices. 
Producer shall notify RPMG of anticipated production downtime or
disruption in corn oil availability at least one (1) month 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 corn oil, 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 corn oil 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.


 


(e)                                  Sale Commitments. 
From time to time during the term of this Agreement and in order to
maximize the sales price of corn oil, RPMG may enter sales contracts or other
agreements with End Customers for future delivery of corn oil.  In the event Producer fails to produce corn
oil 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), and as a result RPMG is required to purchase corn oil from third parties
to meet previous corn oil sale commitments that are based upon such
information, RPMG may charge Producer the amount (if any) that the price of
such replacement corn oil exceeded the price that RPMG would have paid to
Producer for the applicable corn oil under this Agreement.


 


4.                                    Logistics and Transportation


 


(a)                                  No Liens, Title and Risk of Loss.  Producer warrants that corn oil
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
corn oil 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 corn oil.


 


3

















 






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


 


(b)                                 Loading.  RPMG shall
schedule the loading and shipping of all outbound corn oil 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 corn oil
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 corn oil. 
RPMG and RPMG’s agents shall have adequate access to the Ethanol
Facility to load Producer’s corn oil on an industry standard basis that allows
RPMG to economically market Producer’s corn oil. 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 corn oil 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 recouped by RPMG from the proceeds of RPMG’s sales
of corn oil to End Customers. 
Notwithstanding the foregoing, rail cars required to transport the corn
oil will be leased directly by Producer. 
If requested in writing by Producer, RPMG will make lease payments for
such rail cars on behalf of Producer, and in such event RPMG shall recoup lease
payments from the proceeds of RPMG’s sales of corn oil to End Customers.


 


(d)                                 Weight.  The quantity
of corn oil delivered to RPMG at the Ethanol Facility shall be established by
weight certificates obtained from Producer’s scales or from such 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.
Producer shall provide RPMG with a fax/emailed 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
corn oil for which RPMG is obligated to pay Producer pursuant to this
Agreement.


 


(e)                                  Corn oil Storage at Ethanol Facility. 
The estimated storage capacity of the Ethanol Facility, is as follows:


 


Corn Oil:  ***
gallons


 


4

















 


5.                                    Specifications; Quality.


 


(a)                                  Corn oil Specifications. 
Producer covenants that it shall produce corn oil that, upon delivery to
RPMG at the Ethanol Facility, meets the respective specifications (“Specifications”)
set forth in Exhibit B and such other specifications that may be,
from time-to-time, promulgated by the industry for corn oil.  RPMG shall have the right to test each
shipment of corn oil to ascertain that the Specifications are being met.  If the corn oil 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 corn oil and
require Producer to promptly replace such non-conforming corn oil with corn oil
that complies with the Specifications, or (ii) accept such corn oil 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 corn oil does not comply with the terms of this Agreement, including the
Specifications.


 


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


 


(c)                                  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, corn oil 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 corn oil 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.


 


(d)                                 Regulatory Seizure. 
Should any corn oil 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, 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.


 


5

















 


(e)                                  Sampling.  Producer
shall take one representative origin sample (pint size) from each lot of the
corn oil before it leaves the Ethanol Facility (each, a “Sample”).  RPMG shall be entitled to witness the taking
of Sample.   Producer shall label Sample
to indicate the applicable corn oil lot numbers, date of shipment, and the
truck or railcar number.    Producer
shall send half of 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 retain corn oil Sample for no
less than three (3) months or any longer period required by law RPMG knows
or reasonably suspects that any corn oil 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 corn oil, and, if such corn oil 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 one (1) year, 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 one hundred and eighty (180)
days before the termination of the initial term or the then-current renewal
term.


 


(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 corn oil or to market corn oil 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 corn oil 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.


 


6

















 


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).


 


(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)                                 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. 
EXCEPTING FOR A BREACH OF ITS NONDISCLOSURE OBLIGATIONS OR PERFORMANCE
OF ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, RPMG’S AGGREGATE LIABILITY TO
PRODUCER SHALL IN NO EVENT EXCEED THE AMOUNT PAID BY PRODUCER TO RPMG UNDER
THIS AGREEMENT.


 


8.                                    Insurance.  During the term of this Agreement, each party shall
maintain insurance coverage that is standard for a company of its type and size
that is engaged in the production and/or selling of corn oil.  At a minimum, each party’s insurance coverage
shall 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 facilities and its other assets against theft, damage
and destruction on a replacement cost basis; and (iii) workers’
compensation insurance to the extent required by law.  RPMG, or Producer, as the case may be, shall
be added as a loss payee under the comprehensive general product and public
liability insurance policy and the property and casualty insurance policy.  In relation to insurance requirements on the
corn oil leased railcars, (a) the Producer will be responsible for the
liability insurance on the 


 


7

















 


corn oil leased
railcars in the form and amount as required by the railcar lessor’s contract,
or at a minimum in the amounts required by this Article 8 and (b) RPMG
will carry property/physical damage insurance for the corn oil railcars for
loss or destruction, but will not be responsible for the insurance deductible,
maintenances (scheduled or otherwise), including normal wear and tear related
to such corn oil railcars.  The Producer
will be listed as a Loss Payee on RPMG’s Rolling Stock Policy in relation to
the corn oil leased railcars.  A party
shall not change its insurance coverage during the term of this Agreement,
except to increase it or enhance it, without the prior written consent of the
other Party 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;


 


8
















 


(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 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, 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 NGFA®
ARBITRATION OF DISPUTES: The parties to this contract agree that the sole
remedy for resolution of any and all disagreements or disputes arising under or
related to this contract shall be through arbitration proceedings before the
National Grain and Feed Association (NGFA) pursuant to the NGFA® 


 


9

















 


Arbitration Rules. The decision and award
determined through such arbitration shall be final and binding upon the Buyer
and Seller.  Judgment upon the
arbitration award may be entered and enforced in any court having jurisdiction
thereof. (Copies of the NGFA® Arbitration Rules are available from the
National Grain and Feed Association, 1250 Eye Street, N.W., Suite 1003,
Washington, D.C. 20005; Telephone: 202-289-0873; Website: http://www.ngfa.org).
If the Parties reach
agreement pertaining to any dispute pursuant to the procedures set forth in
this Section 11, such agreement shall be reduced to writing, signed by
authorized representatives of each Party, and shall be final and binding upon
the Parties.


 


12.          Miscellaneous.


 


(a)                                  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.


 


(b)                                 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:

  	
  RPMG, Inc.

  
	
   

  	
  1157 Valley Park Drive,
  Suite 100

  
	
   

  	
  Shakopee, MN 55379

  
	
   

  	
  Fax: 952-465-3222

  
	
   

  	
   

  
	
  To Producer:

  	
  Scott Mundt

  
	
   

  	
  Dakota Ethanol,
  LLC

  
	
   

  	
  PO Box 100

  
	
   

  	
  Wentworth, SD
  57075

  
	
   

  	
  Fax: 605-483-2681

  



 


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.


 


(c)                                  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.


 


(d)                                 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, 


 


10

















 


either in whole or in part, this Agreement shall continue in full force
and effect without said provision.


 


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


 


(f)                                    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.


 


(g)                                 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.


 


(h)                                 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.


 


(i)                                     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.


 


(j)                                     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.


 


(k)                                  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), 7, 9, 11, and 12.


 


11

















 


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/ Randy Hahn

  
	
   

  	
  Name:

  	
  Randy Hahn

  
	
   

  	
  Its (title):

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRODUCER

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Scott Mundt

  
	
   

  	
  Name:

  	
  Scott Mundt

  
	
   

  	
  Its
  (title):

  	
  CEO

  



 


12

















 


SCHEDULE
1


 


Entities
to which Producer sells corn oil directly:


 

















 






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


 


EXHIBIT  A


 


Terms
Relating to Payment and Commission Calculation


 


RPMG shall pay Producer for all Standard-Grade and
Non-Standard Grade corn oil loaded into railcars and trucks and weighed at the
Ethanol Facility for shipment to End Customers an amount equal to *** percent
(***%) of the estimated F.O.B. Ethanol Facility Price per pound, with RPMG
being entitled to retain its commission, with settlement weights as described
in Section 4(d) of the Agreement. After month-end is completed and
any differences will be reconciled, RPMG will make the final payment to the
Producer for corn oil shipped during the month.


 


“Accessorial Charges” shall mean charges imposed by
third parties for the off-loading, movement and storage of Producer’s corn oil,
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
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 corn oil, 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 corn oil.


 


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


 


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


 

















 






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


 


EXHIBIT
B


 


Corn Oil Specifications


 


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


 


	
  Component

  	
   

  	
  Maximum %

  	
   

  	
  Minimum %

  	
   

  
	
  Moisture;
  wt%

  	
   

  	
  ***

  	
  %

  	
   

  	
   

  
	
  Impurities;
  wt%

  	
   

  	
  ***

  	
  %

  	
   

  	
   

  
	
  Unsaponafiables;
  wt%

  	
   

  	
  ***

  	
  %

  	
   

  	
   

  
	
  FFA;
  wt%

  	
   

  	
  ***

  	
  %

  	
   

  	
   

  
	
  Iodine
  Value

  	
   

  	
   

  	
   

  	
  ***