Document:

Exhibit 10.7
	 

	 
		EXECUTION COPY
	 

	 
		DISTILLERS GRAINS MARKETING AGREEMENT
		
	 

	 
		 
	 

	 
		THIS DISTILLERS GRAINS MARKETING
		AGREEMENT (the “Agreement”)
		is made and entered into as of the 25th day of
		September, 2006 (the “Effective
		Date”) by and between CARGILL,
		INCORPORATED (“Cargill”)
		acting through its the Non-Grain Feed Ingredients Business Unit and Buffalo
		Lake Energy, LLC (“Producer”),
		collectively referred to hereinafter as “Parties” or
		individually as a “Party”.
	 

	 
		RECITALS
	 

	  

	 
		 
	 

	  

	 
		WHEREAS,
		Cargill markets and distributes DG (as defined below); and
	 

	 
		WHEREAS, Producer will
		produce DG upon construction and start-up of a commercial facility at Fairmont,
		Minnesota that will produce denatured fuel-grade ethanol (the
		“Facility”), which Facility is anticipated to produce
		approximately 115 million net gallons per year; and
	 

	 
		WHEREAS, Cargill desires to market and
		distribute Producer’s DG; and
	 

	 
		 
	 

	 
		WHEREAS, Cargill and Producer have executed
		that certain Master Agreement of even date herewith (the “Master Agreement”); and
	 

	 
		 
	 

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

	 
		 
	 

	 
		AGREEMENT
	 

	 
		1. MARKETING. 
	 

	  

	 
		 
	 

	 
		1.1 Exclusivity.
		Producer hereby agrees to sell to Cargill, and Cargill agrees to purchase and
		market, 100% of Producer’s production of distiller’s dried grains,
		distiller’s dried grains with solubles, wet distiller’s grains,
		modified wet distiller’s grains, modified dried distiller’s grains
		and condensed distiller’s solubles produced from corn (collectively,
		“DG”) produced at the Facility, including any
		expansion or increase in capacity at the Facility. Producer agrees that Cargill
		will be the exclusive marketer of Producer’s DG and that Producer will not
		market any DG during the term of this Agreement. Notwithstanding any other
		provision of this Agreement, in the event Cargill delivers to Producer written
		notice of a Force Majeure as provided in Section 3(b) of the Master Agreement,
		Producer may, upon delivery of written notice to Cargill but subject to the
		terms of the Confidentiality Agreement, market, either directly or indirectly,
		the DG produced or stored at the Facility during the expected duration of the
		Force Majeure, as determined in consultation with Cargill. 
	 

	 
		 
	 

	 
		1.2 Marketing Objectives. Cargill and Producer shall consult regularly with
		respect to Cargill’s marketing efforts and strategies for Producer’s
		DG purchased by Cargill, and shall provide Producer with information related to
		industry trends, quality feedback, potential product improvements and customer
		developments. Once each week during the term of this Agreement, 
	 

	 
		 
	 

	 
 

	 
		Cargill shall provide Producer with a report
		(in a form to be agreed upon by the Parties not less than thirty (30) days
		prior to the Projected Date of First Delivery) that shall include fixed price,
		total sales, and guidance on product mix storage information relating to
		Producer’s DG. Producer intends to use this weekly report to update its
		distillers grains position sheet (“DGPS”) and
		as a basis for potentially entering into hedging transactions with third
		parties. Producer shall provide its DGPS to Cargill, and Cargill shall use the
		DGPS as a source of sales guidance for selling up to a given quantity of DG at
		certain price intervals for a specified delivery period. From time to time
		during the term of this Agreement, Cargill may enter sales agreements with
		third-party purchasers of the DG, which contracts are dependent on the
		availability of DG from Producer. Cargill shall notify Producer prior to
		entering into any sales agreement for Producer’s DG for quantities of DG
		exceeding 10,000 tons. Producer agrees that it will not share any competitively
		sensitive information provided by Cargill (including without limitation
		information related to DG prices, marketing plans, and ongoing or proposed
		customer negotiations) with Producer’s Affiliates, if any, which compete
		with Cargill for sales of DG. The DGPS shall not be binding on either
		Party.
	 

	 
		 
	 

	 
		1.3 Final Authority; Long Term Sales
		Agreements. Notwithstanding anything to
		the contrary herein but without limiting the obligations of Cargill hereunder,
		Cargill shall have the authority to make final determinations with respect to
		all marketing and sales decisions and strategies, and Producer agrees to accept
		such determinations; provided,
		however, that Producer’s consent (not to be unreasonably
		withheld or delayed) shall be required prior to Cargill entering into any
		long-term sales agreement for Producer’s DG. For purposes of this Article,
		a “long-term sales agreement” shall be a sales agreement for
		Producer’s DG with a term in excess of thirty-two (32) weeks and for
		quantities of distiller’s wet or modified distiller’s wet grains
		equal to or exceeding 75,000 tons and for quantities of distiller’s dried
		or modified distiller’s dried grains equal to or exceeding 25,000
		tons. 
	 

	 
		 
	 

	 
		1.4 Agency Sales.
		Notwithstanding any other provision of this Agreement, in the event Cargill
		proposes to market Producer’s DG to a third party pursuant to a long-term
		sales agreement, Cargill shall enter into a contract for the sale of such DG to
		such third party as agent for Producer pursuant to which Cargill shall assume
		the credit risk under such third party contract and bear all sales, marketing,
		logistic services/management costs and collection costs after the DG produced
		at the Facility passes across the Title Transfer Point. 
	 

	 
		 
	 

	 
		2. MASTER AGREEMENT AND TRADE
		RULES. The terms and conditions of the
		Master Agreement are hereby incorporated herein by reference. To the extent any
		provision of the Master Agreement conflicts with a provision contained herein,
		the provision contained herein will control. Terms capitalized but not defined
		in this Agreement shall have the meanings ascribed to them by the Master
		Agreement. 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.
	 

	 
		 
	 

	 
		 
	 

	 
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		3. PRICE AND COMMISSION. 
	 

	 
		3.1 Price and Commission. Cargill shall pay Producer for its DG in accordance
		with the terms set forth in Exhibit
		A. Producer shall pay Cargill a
		commission for its DG marketing as calculated in Exhibit A.
		Cargill shall deduct this commission as provided in Exhibit A.
	 

	 
		 
	 

	 
		3.2 Minimum Annual Commission. In the event the DG production at the Facility does
		not equal 247,500 tons (on a dry equivalent basis) per Contract Year
		(i.e., a twelve month period beginning on the Projected Date
		of First Delivery and each anniversary of such date), Producer will, promptly
		upon Cargill’s demand, pay to Cargill a minimum commission on the
		deficiency volume. The minimum commission shall be calculated as follows: the
		deficiency volume for such Contract Year (i.e., 247,500 tons less the number of
		tons actually produced during such Contract Year and provided to Cargill for
		removal) shall be split between dry products and wet products based on the
		ratio of dry products to wet products produced at the Facility during such
		Contract Year. Producer shall pay Cargill $2/ton on the deficiency volume
		allocable to dry products, and $3/ton on the deficiency volume allocable to wet
		products.
	 

	 
		 
	 

	 
		3.3 Commission Adjustment. On the fifth (5th) anniversary of the
		Effective Date of this Agreement, upon the written request of either Party, the
		Parties shall negotiate in good faith an adjustment to the commission to take
		into account changes in market conditions, operating conditions or costs,
		including overhead costs, inflation or other factors; provided,
		however, that in the event the Parties are unable to agree to
		any such adjustments within thirty (30) days following commencement of such
		negotiations, no adjustment to the commission will be made. 
	 

	 
		 
	 

	 
		4. PAYMENT. 
	 

	 
		 
	 

	 
		4.1 Payment Procedures. Cargill shall invoice each customer within one
		Business Day of shipment of each load of DG from the Facility. Cargill shall
		pay Producer for all such DG within thirty (30) days of invoicing each
		customer, in accordance with the terms set forth in Exhibit A.
		Notwithstanding the foregoing, Producer acknowledges that Cargill may, with the
		prior consent of Producer (such consent not to be unreasonably withheld or
		delayed), arrange for DG to be transported from the Facility in railcars to a
		facility where such DG will be unloaded from such railcars and loaded into
		trucks for distribution to customers (each such transaction, a
		“Transload Sale”). With respect to Transload Sales, Cargill shall
		invoice customers within one (1) Business Day of the transfer of DG from a
		railcar to a truck, and shall pay Producer for such DG within thirty (30) days
		of such invoice, in accordance with the terms set forth in Exhibit A.
		
	 

	 
		 
	 

	 
		4.2 Storage.
		Producer acknowledges that Cargill may place its DG in storage rather than
		selling it to customers due to market conditions. However, if, following
		consultation with Cargill in accordance with Section 1.2,
		Producer desires that the DG be sold to customers rather than placed in
		storage, (a) Cargill, at its option, shall either (x) sell such DG to its
		customers rather than placing it in storage, or (y) place such DG in storage
		and pay to Producer the current fair market value of such DG as determined by
		the Parties, which value shall be deemed to be the “F.O.B. Facility
		Price” or the “Delivered Sale Price” (as applicable, for
		purposes of Exhibit A) for such DG; and (b) Cargill shall, with respect to
		such DG, be relieved of the obligation imposed by Section 9.1 to
		maximize the DG price and achieve the best available return to Producer. If
		Producer consents to such storage, then the cost of transportation to and from
		storage and the cost of maintaining such outside storage shall be considered
		Accessorial Charges 
	 

	 
		 
	 

	 
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		and Producer shall be responsible for
		reimbursing Cargill for such Accessorial Charges in accordance with
		Section 5.
	 

	 
		 
	 

	 
		5. COSTS; TITLE AND RISK OF LOSS.
		Except as otherwise provided in this
		Agreement, Cargill will bear all sales, marketing, logistics
		services/management costs and collection costs after the DG produced at the
		Facility passes across the scale into outbound railcars or trucks at the
		Facility (the “Title Transfer
		Point”). Title and risk of loss to
		the DG shall transfer from Producer to Cargill at the Title Transfer Point.
		Until such time, Producer shall be deemed to be in control of and in possession
		of and shall have title to and risk in the DG. Cargill shall also assume
		responsibility for payment of Accessorial Charges (as defined in
		Exhibit A) to third parties; provided,
		however, that Producer agrees that, except as specified in the
		next succeeding sentence, Cargill shall deduct and setoff the Accessorial
		Charges from and against payments due to Producer by Cargill. In the event any
		specified Accessorial Charge (as evidenced in writing) exceeds $50,000, Cargill
		may demand, in writing, that Producer reimburse Cargill for such Accessorial
		Charge, in which case Producer shall reimburse Cargill as aforesaid within ten
		(10) calendar days of receipt of Cargill’s demand.
	 

	 
		 
	 

	 
		6. LOGISTICS AND TRANSPORTATION; FACILITY
		STORAGE. 
	 

	 
		 
	 

	 
		6.1 Logistics and Transportation. Cargill shall perform certain logistics functions for
		Producer, including the arranging of rail and truck freight, bills of lading,
		and scheduling pick-up appointments, provided that Producer shall be a party
		to, or third party beneficiary of, each rail or truck transportation agreement.
		Transportation by truck may be provided at Cargill’s discretion. Cargill
		shall determine the method of transporting DG to third parties. Notwithstanding
		anything to the contrary herein, Producer shall be solely responsible for any
		damage to any trucks, railcars or equipment caused by its acts or omissions.
		Further, Producer agrees that it shall be solely responsible for furnishing a
		minimum of 265 covered hopper railcars to service the Facility and transport DG
		via railcar to customers. The time and place of delivery for DG marketed
		pursuant to this Agreement shall be such time and place as such DG is unloaded
		at a customer’s facility and accepted by such customer. 
	 

	 
		 
	 

	 
		6.2 Loading. Cargill
		shall schedule the loading and shipping of all outbound DG purchased hereunder,
		but all labor and equipment necessary to load trucks and railcars and other
		associated costs shall be supplied and borne by Producer without charge to
		Cargill. DG shall be available for loading and shipment twenty-four (24) hours
		per day, Monday through Sunday, except on Scheduled Holidays. For purposes of
		this Agreement, “Scheduled Holidays” are New Years Day, Presidents
		Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving
		Day, the day after Thanksgiving Day, Christmas Eve Day and Christmas Day.
		Producer agrees to handle the DG in a good and workmanlike manner in accordance
		with Cargill’s reasonable written requirements and normal industry
		practice. Producer shall maintain the truck and railcar loading facilities in
		safe operating condition in accordance with normal industry standards and will
		visually inspect all trucks and railcars to ensure: (a) their cleanliness so as
		to avoid adulteration and contamination; and (b) that such trucks and railcars
		are in a condition suitable for transporting the DG under applicable law.
		Cargill agrees that its employees will follow all reasonable safety rules and
		procedures promulgated by Producer and provided to Cargill in writing. Producer
		will supply product description tags, certificates of analysis, bills of lading
		
	 

	 
		 
	 

	 
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		and/or material safety data sheets that are
		applicable to all shipments.
	 

	 
		 
	 

	 
		6.3 Facility Storage. Producer shall have storage space at the Facility, at
		its sole cost, for not less than 12,650 tons of distiller’s dried grains
		and dried distiller’s grains with solubles, which shall be continuously
		available for storage of DG so as to provide flexibility in marketing efforts.
		If Producer expands its ethanol production capacity, Producer shall
		correspondingly expand its DG storage capacity. Further, Producer shall be
		responsible at all times for the quality and condition of DG in storage at the
		Facility. Cargill shall schedule for removal by truck or railcar the actual
		quantity of DG produced by Producer in the relevant week less the amount of DG
		that Cargill requests Producer to store at the Facility. Subject to the terms
		and conditions of the railcar exchange agreement to be entered into between the
		Parties, Cargill shall use commercially reasonable efforts to arrange
		transportation and deliveries of DG so that excess inventories do not limit
		ethanol production at the Facility. All truck freight charges and rail tariff
		rate charges shall be billed directly to Cargill and deducted by Cargill from
		the proceeds of Cargill’s DG sales to customers. 
	 

	 
		6.4 Demurrage. In
		the event demurrage, detention or wait time is incurred before and after
		loading, and except as provided in the next succeeding sentence, Cargill shall
		make a reasonable effort to recover an amount equal to such demurrage from the
		party responsible for the demurrage; provided,
		however, that if Cargill is not successful in recovering such
		amount, Producer shall promptly pay such amount to Cargill as an Accessorial
		Charge. In the event that additional costs or expenses (included without
		limitation demurrage and wait time) are incurred by Cargill as a result of any
		act or omission by Producer (including without limitation Producer’s
		failure to provide the labor, equipment and facilities necessary to meet
		Cargill’s loading schedule), then Producer shall be responsible for all
		such costs and expenses incurred by Cargill resulting from or arising in
		connection with Producer’s act or omission. 
	 

	 
		 7. QUALITY.
	 

	 
		7.1 DG Specifications. Producer covenants that at all times during the term
		of this Agreement it shall produce DG that, upon unload and acceptance at the
		customer’s facility, meets the respective specifications set forth in
		Exhibit B (the “Specifications”) and is free-flowing. Cargill shall have the
		right (but not the obligation) to test each shipment of DG to ascertain that
		the Specifications are being met. In the event the DG, upon unload and
		acceptance at the customer’s facility, does not meet the Specifications
		and the terms of this Agreement or is not free-flowing, Cargill may, in its
		sole discretion (i) reject such DG and require Producer to promptly replace
		such non-conforming DG with DG that complies with the Specifications and/or is
		free-flowing; or (ii) accept the DG for marketing and adjust the price based on
		market demand to reflect the inferior quality, as provided in Exhibit A. If
		Cargill rejects any non-conforming DG, Cargill will use reasonable efforts to
		assist Producer in identifying a use or market for the non-conforming DG, which
		may include sale of the non-conforming DG or, with Producer’s consent,
		reprocessing at the Facility. 
	 

	 
		7.2 Feed Ingredient Standards. Producer understands that Cargill intends to market DG
		produced under this Agreement as a primary animal feed ingredient, and that
		said products are subject to minimum standards for such use. Producer agrees
		and warrants that DG, upon unload and acceptance at the customer’s
		facility, shall be acceptable in the feed trade under then-
	 

	 
		 
	 

	 
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		current industry standards and shall be an
		approved feed ingredient under applicable standards promulgated by the
		Association of American Feed Control Officials Incorporated. 
	 

	 
		7.3 Compliance with FDA and Other Standards. Producer covenants that the DG, upon unload and
		acceptance at the customer’s facility, will not be “adulterated”
		or “misbranded” within the meaning of the Federal Food, Drug and
		Cosmetic Act (the “Act”) and
		that each shipment may lawfully be introduced into interstate commerce under
		the Act. Improper cleaning of trucks or railcars that have previously hauled
		prohibited mammalian protein products may render the next load of product
		adulterated and/or misbranded under federal law. Accordingly, Producer
		covenants that it shall comply with the clean-out procedures set forth in the
		FDA regulation at 21 CFR 589.2000, as amended. Furthermore, Producer covenants
		that the DG, upon unload at the customer’s facility, 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
		products. 
	 

	 
		7.4 Regulatory Seizure. Should any of the DG delivered hereunder be seized or
		condemned by any federal or state department or agency as a result of its
		failure to conform to this Agreement prior to delivery, such seizure or
		condemnation shall operate as a rejection by Cargill of the goods seized or
		condemned and Cargill shall not be obligated to offer any defense in connection
		with such seizure or condemnation. When rejection occurs, Cargill shall deliver
		written notice to Producer within a reasonable time of the rejection and
		identify the deficiency that resulted in the rejection and at its option,
		Cargill may:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (a)
				

			 	
				
				  Dispose of the rejected goods in
				  accordance with applicable laws, rules and regulations after first offering
				  Producer a reasonable opportunity of examining and taking possession thereof,
				  if the condition of the goods reasonably appears to Cargill to permit such
				  delay in making disposition; 
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (b)
				

			 	
				
				  Dispose of the rejected goods in any
				  manner directed by Producer which Cargill can accomplish without violation of
				  applicable laws, rules or regulations; or
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  (c)
				

			 	
				
				  If Cargill has no available means of
				  disposal of rejected goods and Producer fails to direct Cargill to dispose of
				  the rejected goods as provided herein, Cargill will return the rejected goods
				  to Producer, upon which event Cargill’s obligations with respect to said
				  rejected goods shall be deemed fulfilled.
				

			 

 

	 
		 
	 

	 
		In addition to other obligations under this
		Agreement or at law, Producer shall promptly reimburse Cargill for all
		out-of-pocket costs reasonably incurred by Cargill in storing, transporting,
		returning and disposing of the rejected goods in accordance with this
		Agreement. 
	 

	 
		 
	 

	 
		7.5 Adultered DG. If
		Producer knows or reasonably suspects that any DG produced at the Facility is
		adulterated or misbranded, or is not in compliance with the Specifications or
		the other terms of the Agreement, Producer shall immediately so notify Cargill
		in writing so that such DG can be tested before entering interstate commerce.
		If Cargill knows or reasonably suspects that any DG produced by Producer at the
		Facility is adulterated, misbranded or otherwise not in compliance with the
		terms of this Agreement, then Cargill may obtain independent laboratory tests
		of the affected DG. If such DG is tested and found to comply in all 
	 

	 
		 
	 

	 
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		respects with the Specifications and the
		terms of this Agreement, Cargill shall pay all testing costs, and if the DG is
		found not to comply in all respects with the Specifications and the terms of
		this Agreement, Producer will pay all testing costs; provided,
		however, that if such testing was prompted by Producer’s
		notice to Cargill under this Section
		7.5, Producer will pay all testing
		costs. 
	 

	 
		7.6 Recalls.
		Producer shall, at its sole cost and expense, comply and cooperate with any
		recall of DG reasonably determined to be necessary by Cargill. In the event
		that it is deemed necessary or appropriate by Cargill in its reasonable
		determination, either in response to government action or otherwise, to recall
		any DG produced by Producer pursuant to this Agreement due to non-conformance
		with the Specifications or the terms of this Agreement, Producer agrees to be
		responsible for all reasonable out-of-pocket costs of such recall and recovery,
		including, but not limited to, loss of products, transportation of products,
		notices and communications necessary or appropriate to effecting such recall
		and all reasonable out-of-pocket costs and expenses incurred in defending
		actions brought in connection with such recall. 
	 

	 
		7.7 Sampling.
		Producer will take a minimum of one (1) origin, representative sample from each
		lot (i.e., each truck or railcar load) of the DG before it leaves the Facility,
		and shall, at a minimum, test such lots for conformance with the Specifications
		relating to moisture content. Cargill shall be entitled to witness the taking
		of samples. Producer will label these samples to indicate the DG’s lot
		numbers, date of shipment, and the truck or railcar number. Producer shall send
		one sample to Cargill promptly upon Cargill’s request. Producer may
		request that the Cargill test results be provided to it at any time after the
		tests are completed. Producer will also retain the samples and labeling
		information for no less than one (1) year or any longer period required by law.
		If destination samples at the customer’s facility indicate that the DG
		does not conform to the Specifications, or otherwise fails to meet the
		requirements of this Agreement, those samples shall be determinative. 
	 

	 
		7.8 No Liens.
		Producer warrants that DG delivered to Cargill hereunder shall be free and
		clear of all liens and encumbrances of any nature whatsoever.
	 

	 
		7.9 Customer Claims.
		If any customer makes a claim against Cargill as a result of Producer’s DG
		failing to meet the Specifications or to the requirements of this Agreement,
		Producer shall indemnify Cargill against any damages or losses that it incurs
		as a result of such claim; provided, that Producer shall not be required to
		indemnify Cargill for such claims to the extent (i) the DG conformed in all
		respects to the Specifications and the other requirements of this Agreement
		upon unload and acceptance at the customer’s facility; (ii) the railcar or
		truck used to transport the DG from the Facility was in a clean and sanitary
		condition, compliant with all applicable laws and regulations and suitable for
		the loading and transportation of the DG; and (iii) the seals on the railcar or
		truck used to transport the DG from the Facility were in good working order and
		were properly secured prior to leaving the Facility. Producer’s liability
		for such claims shall not be subject to the limitations set forth in Section 8
		of the Master Agreement.
	 

	 
		8. QUANTITY AND WEIGHTS. 
	 

	 
		 
	 

	 
		8.1 Purchase of DG.
		Subject to the terms and conditions of this Agreement, Cargill shall purchase
		from Producer all of the DG produced at the Facility. In the event that
		Producer increases the capacity of the Facility pursuant to the installation of
		new or additional equipment, 
	 

	 
		 
	 

	 
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		upon reasonable notice to Cargill, such
		additional volume shall be added to this Agreement and purchased by Cargill
		pursuant to the terms of this Agreement. On the first Cargill Working Day of
		each month (commencing on the month during which the Projected Date of First
		Delivery is to occur) Producer shall notify Cargill of its scheduled
		production, determined by Producer good faith on a monthly basis, for the
		upcoming three (3) month period (the amount scheduled for each month in such
		production schedule notice being called the “Scheduled Monthly Production”). Once the Scheduled Monthly Production has been
		established for a month, Producer may increase but may not reduce the Scheduled
		Monthly Production for such month in a subsequent production schedule notice
		unless the reduction will not cause or result in a breach by Cargill of sales
		commitments it has made with respect to the month or Cargill otherwise approves
		such reduction. Producer shall notify Cargill of anticipated production
		downtime or disruption in DG availability at least three (3) months in advance
		of such outage. In addition to the production schedule notice, Producer shall
		provide a written estimate to Cargill of the volume of DG to be produced and
		delivered by Producer at least five (5) days prior to the beginning of the week
		during which it is to be removed by Cargill, together with a notice of the
		amount of DG in storage as of the date of the notice. “Cargill Working Day” means Monday, Tuesday, Wednesday, Thursday or
		Friday except for Cargill Holidays. “Cargill Holidays” are New Years Day, Presidents Day, Good Friday,
		Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day after
		Thanksgiving Day, Christmas Eve Day and Christmas Day (or, with respect to
		Christmas, the Cargill Holidays may differ from actual Christmas Eve Day and
		Christmas Day if such days fall on a weekend).
	 

	 
		 
	 

	 
		8.2 Date of First Delivery. Producer shall notify Cargill, in writing, at least
		thirty (30) days prior to the date it expects to make first delivery of DG to
		Cargill (the “Projected Date of
		First Delivery”). Additionally,
		Producer shall provide a best estimate of production on a daily basis for the
		six (6) month period following the date of first delivery. For the avoidance of
		doubt, Cargill shall not be obligated to enter into sales agreements for DG or
		arrange for any rail or truck freight until Producer has provided Cargill with
		written notice of the Projected Date of First Delivery. 
	 

	 
		 
	 

	 
		8.3 Failure to Produce/Deliver. In the event Producer fails to produce DG in
		accordance with the Scheduled Monthly Production for a month for reasons other
		than an event of Force Majeure (as defined in Section 3 of the Master
		Agreement) affecting Producer or a default by Cargill, and as a result Cargill
		is required to purchase DG from third parties to meet previous DG sale
		commitments that are based upon the Scheduled Monthly Production for the month,
		Cargill may charge Producer, and Producer shall promptly pay to Cargill, an
		amount equal to the deficiency volume multiplied by the positive difference (if
		any) between the per ton price of replacement DG and the price per ton that
		Cargill would have paid to Producer for such DG under this Agreement, plus
		Cargill’s commission on the deficiency volume, as set forth in
		Exhibit A.
		 
	 

	 
		 
	 

	 
		8.4 Weighing. The
		quantity of DG delivered to Cargill at the 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.
		In the case of railcar shipments, the official railroad weights will govern
		establishment of said quantities. Producer shall provide Cargill with 
	 

	 
		 
	 

	 
		8
	 

	 
 

	 
		a fax copy of the outbound weight
		certificates on a daily basis and such outbound weight certificates shall be
		determinative of the quantity of DG for which Cargill is obligated to pay
		pursuant to Section 3.
	 

	 
		 
	 

	 
		8.5 Facility Product Mix. On an ongoing basis during the term of this Agreement,
		Cargill shall, after consultation with Producer and based on the production
		capabilities of the Facility, determine the quantities of distiller’s
		dried grains, distiller’s dried grains with solubles, wet distiller’s
		grains, modified wet distiller’s grains, modified dried distiller’s
		grains and condensed distiller’s solubles that Producer shall be obligated
		to produce and make available to Cargill. Cargill shall use commercially
		reasonable efforts to select a facility product mix that is reasonably
		satisfactory to Producer. 
	 

	 
		 
	 

	 
		8.6 Cargill Force Majeure Event Indemnity. Producer agrees to indemnify and hold harmless
		Cargill, its Affiliates and their respective officers, directors, employees,
		agents, shareholders and representatives with respect to any claim by the
		intended purchaser of Producer’s DG for a breach of Cargill’s
		delivery obligations arising in connection with Cargill’s exercise of its
		force majeure rights upon the occurrence of an event of Force Majeure affecting
		Producer, provided that
		Producer shall not be required to so indemnify if, and only if, Cargill (a)
		failed to issue its standard form sales contract to such intended purchaser
		containing the force majeure provisions described in Exhibit C hereto
		(as such force majeure provisions may be amended from time to time by Cargill
		with the consent of Producer, such consent not to be unreasonably withheld,
		delayed or conditioned); and (b) did not otherwise have a negotiated supply
		agreement with such intended purchaser containing force majeure provisions
		reasonably acceptable to Producer. At Cargill’s option, Producer shall be
		required at its expense to defend Cargill with counsel reasonably acceptable to
		Cargill in connection with any such third-party claim to the extent the
		indemnity contained in this Section
		8.6 applies. 
	 

	 
		 
	 

	 
		9. MARKETING
		EFFICIENCIES. 
	 

	 
		 
	 

	 
		9.1 Standard of Care. Cargill agrees to market Producer’s DG using the
		same standards it uses to market its own DG production and the DG production of
		third parties for whom Cargill provides DG marketing services to (a) maximize
		the DG price and minimize freight and other costs relevant to DG sales and (b)
		achieve the best available return to Producer and Cargill, subject to relevant
		market conditions. Producer acknowledges that Cargill will use its reasonable
		judgment in making decisions related to the quantity and price of DG marketed
		under this Agreement, in light varying freight and other costs, and the fact
		that Cargill may sell and market DG on its own account and/or on the account of
		third parties into the same markets where Cargill sells Producer’s DG.
		
	 

	 
		 
	 

	 
		9.2 Conflict of Interest. In light of the inherent uncertainties associated with
		marketing DG in the relevant markets, Producer waives any claim of conflict of
		interest against Cargill for failure to use commercially reasonable efforts to
		maximize the DG price, minimize freight and other costs relevant to DG sales,
		or to achieve the best available return to Producer to the extent such claims
		relate to any such conflict of interest or alleged preference to third parties
		for whom Cargill provides distiller’s grains marketing services;
		provided, however, that
		Producer does not waive its right to terminate this Agreement for any such
		conflict of interest that directly 
	 

	 
		 
	 

	 
		9
	 

	 
 

	 
		results in material quantifiable pecuniary
		loss to Producer. If Cargill disputes the existence or impact of the conflict
		of interest, Producer and Cargill shall follow the dispute resolution
		procedures set forth in Section 6 of the Master Agreement in order to determine
		whether Producer may terminate this Agreement, and Cargill and Producer shall
		continue to perform their obligations under this Agreement in good faith during
		the pendency of such dispute resolution proceedings. 
	 

	 
		 
	 

	 
		10. TERM. The term of this Agreement is ten (10) years, commencing
		as of the Effective Date.
	 

	 
		11. EVENTS OF DEFAULT. 
	 

	  

	 
		 
	 

	 
		11.1 Cargill Event of Default. The following shall constitute events of default on
		the part of Cargill (each, a “Cargill Event of Default”) under this Agreement: 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Cargill fails on three (3) separate
				  occasions within any twelve (12) month period to purchase DG in accordance with
				  Section 1.1 under circumstances where such breach or failure is not
				  excused by this Agreement, including by a Force Majeure condition;
				  provided, however, that
				  any such breach or failure shall not constitute a triggering occurrence
				  hereunder unless such breach or failure causes Producer to shut down or suspend
				  operations at the Facility due to excess quantities of DG at the Facility, and
				  Producer has provided Cargill with written notice of each such failure;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  Cargill fails to pay any amount that
				  is due to Producer under this Agreement that is not excused by this Agreement,
				  and (i) Producer provides written notice to Cargill of such failure, and (ii)
				  Cargill fails to pay to Producer such past-due amount (plus amounts payable
				  pursuant to Section
				  11.3(a)(1), if any) within seven (7)
				  days of Cargill’s receipt of such confirmation.
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  willful misconduct by Cargill in the
				  performance of its obligations hereunder and Producer provides Cargill with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Producer or the Facility; and (ii) such willful
				  misconduct is done under the direction of or otherwise sanctioned by an officer
				  of Cargill within the Cargill Non-Grain Feed Ingredients Business Unit;
				  or
				

			 
	 	d)	 Cargill 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 unable to pay its debts generally when
				due, in each case where such petition, appointment or insolvency is not
				dismissed, discharged or remedied, as applicable, within sixty (60)
				days.

 

	 
		 
	 

	 
		11.2 Producer Event of Default. The following shall constitute events of default on
		the part of Producer (each, a “Producer Event of Default”) under this Agreement: 
	 

	 
		 
	 

	 
		10
	 

	 
 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Producer fails to pay any amount
				  that is due to Cargill under this Agreement that is not excused by this
				  Agreement, and (i) Cargill provides written notice to Producer of such failure,
				  and (ii) Producer fails to pay to Cargill such past-due amount (plus amounts
				  payable pursuant to Section
				  11.3(a)(1), if any) within seven (7)
				  days;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  willful misconduct by Producer in
				  the performance of its obligations hereunder and Cargill provides Producer with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Cargill; and (ii) such willful misconduct is done
				  under the direction of or otherwise sanctioned by an officer of Producer;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  Producer 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 unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days.
				

			 

 

	 
		11.3 Remedies and Procedures. 
	 

	 
		a) Remedies for Breach Not Constituting an Event of
		Default. In the event that either Party
		breaches or fails to perform any commitment or obligation contained herein,
		under circumstances where such breach or failure does not constitute a Cargill
		Event of Default or a Producer Event of Default (each, as the context requires,
		an “Event of
		Default”), and such breach or
		failure is not excused by this Agreement, including by a Force Majeure
		condition, the other Party (the “Non-Defaulting Party”) may exercise any remedy or right specified in
		the Master Agreement or this Agreement in connection with such breach or
		failure. In addition, and without limiting the foregoing:
	 

	 
		(1) in
		the event either Party fails to pay any amounts due to the other Party when
		due, the Non-Defaulting Party shall be entitled to charge and receive interest
		accrued on the unpaid amount from the date it was due until the date actually
		paid at the Default Rate;
	 

	 
		(2) if a
		Party breaches or fails to perform in any material respect any of its
		commitments or agreements contained in this Agreement, the defaulting Party
		shall be liable to the Non-Defaulting Party for Damages arising out of or
		resulting from such breach as provided in Section 8 of the Master Agreement
		(subject to the Non-Defaulting Party’s duty to mitigate its Damages);
		provided, however, in the
		event of a material breach by Cargill hereunder of its obligation to purchase
		or market DG, the measure for Damages arising from such breach shall include
		the loss of revenues suffered by Producer as a result of such breach, so long
		as (A) the Damages payable under this proviso in connection with each such
		breach, on a per occurrence basis, exceed Ten Thousand Dollars ($10,000) and
		(B) such Damages payable exclude Damages to the extent arising out of breaches
		by third parties under the rail and truck transportation agreements referred to
		in 
	 

	 
		 
	 

	 
		11
	 

	 
 

	 
		Section 6.1. For the avoidance of doubt, the amount of revenues
		lost shall be calculated by reference to the average price of DG from the
		Facility sold by Cargill to its customers for the 7-day period ending on the
		date of the breach; and
	 

	 
		(3) if a Party
		breaches or fails to perform in any material respect any of its commitments or
		agreements contained in any Principal Document, and such breach or failure is
		of a continuing nature, the Non-Defaulting Party may (A) request the defaulting
		Party, as a condition of continuing its performance under this Agreement, to
		provide adequate assurance of performance of the defaulting Party’s
		obligations under this Agreement; and/or (B) seek injunctive relief. 
	 

	 
		b) Remedies for Events of Default. Upon the occurrence of an Event of Default that has
		not been waived by the Non-Defaulting Party, the Non-Defaulting Party shall
		have all of the following rights and remedies in addition to the rights and
		remedies specified in Section
		11.3(a) above, which may be exercised
		in such order or combination as such Non-Defaulting Party may determine:(i)
		terminate this Agreement, or (ii) subject to the limitations set forth in
		Section 8(c) of the Master Agreement (relating to consequential damages),
		pursue any other remedies available at law or in equity.
	 

	 
		 12. NEW PRODUCTS. The Parties acknowledge that this Agreement
		contemplates the production and marketing of certain types of DG, meeting
		certain specifications, generally intended for use as animal feed products.
		Nonetheless, it is the intent of the Parties that the following provisions
		shall apply if Producer desires to produce new products derived from DG or any
		component thereof (including without limitation fats, carbohydrates or protein)
		that are created or developed during the term of this Agreement, whether or not
		intended for use as animal feed products (collectively, “New Products”): 
	 

	 
		 
	 

	 
		12.1 Producer shall provide Cargill with
		ninety (90) days’ prior written notice of its intent to produce New
		Products (the “New Product
		Notice”). The New Product Notice
		shall contain detailed information about the New Products, including without
		limitation a detailed description of the New Products, intended markets, and
		anticipated volume;
	 

	 
		 
	 

	 
		12.2 If Cargill contracted to sell any of
		Producer’s DG to third parties at the time of receipt of the New Product
		Notice (“Contracted
		Volume”), then Producer shall pay
		Cargill the difference if any between (a) the price that Cargill pays to
		replace the Contracted Volume, and (b) the price that Cargill would have paid
		Producer for such Contracted Volume under this Agreement; 
	 

	 
		12.3 With respect to New Products that are
		substantially similar to DG in terms of their characteristics and intended end
		use, Producer agrees to engage Cargill to distribute and market, and Cargill
		agrees to distribute and market, 100% of Producer’s production of such New
		Products produced at the Facility, on terms and conditions identical to the
		terms and conditions set forth in this Agreement, with amendments as necessary
		to provide the specifications and anticipated volumes applicable to such New
		Products; and
	 

	 
		 
	 

	 
		12
	 

	 
 

	 
		12.4 With respect to New Products that are
		not substantially similar to DG, within sixty (60) days of its receipt of the
		New Product Notice, Cargill shall notify Producer in writing as to whether
		Cargill desires to distribute and market such New Products. If Cargill so
		determines to distribute and market such New Products, then (a) Cargill shall
		use commercially reasonable efforts to aid Producer in its development of such
		New Products; (b) Producer and Cargill shall in good faith negotiate amendments
		to this Agreement to accommodate such New Products; and (c) Cargill shall have
		a right of first refusal to distribute and market such New Products. 
	 

	 
		 
	 

	 
		[Signature page follows]
	 

	 
		 
	 

	 
		13
	 

	 
 

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

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  CARGILL, INCORPORATED
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By: 
				

			 	
				
				  /s/ George Schember
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: George Schember

				  Title: VP Commercial Manager Horizon
				  Milling
				

			 

 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  BUFFALO LAKE ENERGY,
				  LLC
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By: 
				

			 	
				
				   /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: Scott H. Pearce

				  Title: Authorized Representative
				

			 

 

	  

	 
		 
	 

	 
		14
	 

	 
 

	 
	 

	 
		EXHIBIT A
	 

	 
		 
	 

	 
		Terms relating to payment and commission
		calculation
	 

	 
		 
	 

	 
		Cargill agrees to pay Producer for all
		Standard-Grade DDG and DDGS loaded into railcars and trucks and weighed at the
		Facility for shipment to customers an amount equal to the lesser of (i)
		ninety-seven percent (97%) of the F.O.B. Facility Price or (ii) the F.O.B.
		Facility Price minus $2.00 per ton, with Cargill being entitled to retain as
		its commission the greater of the remaining three percent (3%) or $2.00 per
		ton(“Initial Price”), with settlement weights as described in Section
		8.4 of the Agreement. 
	 

	 
		 
	 

	 
		Cargill agrees to pay Producer for all
		Non-Standard-Grade DDG and DDGS loaded into railcars and trucks at the Facility
		and weighed for shipment to customers, an amount equal to the lesser of either
		(i) the F.O.B. Facility Price for such Non-Standard-Grade DDG or DDGS less
		three percent (3%) of the weighted average F.O.B. Facility Price of all
		Standard-Grade DDG or DDGS sold by Cargill to third parties in a rolling thirty
		(30) day period preceding the date of Producer’s invoice, or (ii) the
		F.O.B. Facility Price for such Non-Standard DG less $2.00 per ton, with Cargill
		being entitled to retain as its commission the greater of the remaining three
		percent (3%) or $2.00 per ton (“Non-Standard Initial Price”). 

	 

	 
		 
	 

	 
		Cargill agrees to pay Producer for all
		Standard-Grade and Non-Standard-Grade DWG, MDWG, MDDG, and CDS loaded into
		railcars and trucks at the Facility and weighed for shipment to customers an
		amount equal to the F.O.B. Facility Price for such material minus $3.00 per ton
		with Cargill entitled to retain such $3.00 per ton as its commission. 
	 

	 
		 
	 

	 
		“Accessorial Charges” shall mean charges imposed by third parties for
		the off-loading, movement and storage of Producer’s DG, including without
		limitation taxes, tonnage taxes, hard-to-unload truck or railcar
		charges/transloading charges, bad order railcar repair charges, fuel
		surcharges, storage charges, demurrage charges, product shrinkage, detention
		charges, switching, and weighing charges. 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 Cargill for
		Producer’s DG, inclusive of tariff freight, as evidenced by Cargill’s
		invoices to its own customers.
	 

	 
		 
	 

	 
		“F.O.B. 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 Cargill invoices its third party customers.
		
	 

	 
		 
	 

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

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

	 
		 
	 

	 
		15
	 

	 
 

	 
		 “Non-Standard-Grade” shall mean DG that fail to meet the
		Specifications set forth in this Agreement, but which Cargill nonetheless
		accepts for marketing under this Agreement. For purposes of illustration only,
		assume that Cargill purchases ten (10) tons of Standard DG from Producer, and
		resells said Standard DG to a third-party purchaser at $100/ton (the F.O.B.
		Facility Price) plus a $50/ton tariff rate charge, resulting in a $1,500 sale
		invoice to said third party. Assume also that Cargill incurs and pays $3 per
		ton in Accessorial Charges. In such instance, Cargill would pay, or cause to be
		paid, the freight of $500, and the remaining $1,000 would be split as follows:
		$970 to the Producer and $30 to Cargill. Since 3% of $100 equals $3.00 and is
		greater than the $2.00 per ton minimum flat fee, $3.00 per ton. Producer shall
		a lso promptly reimburse Cargill for $30 in Accessorial Charges.
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its DG within thirty (30) days from the date that Cargill
		invoices each customer for such DG, despite the fact that actual Accessorial
		Charges and Tariff Freight Costs may not be determined during such timeframe.
		Accordingly, Cargill will pay Producer based on the actual Delivered Sales
		Price less estimated Accessorial Charges and Tariff Freight Costs. Once the
		actual Accessorial Charges and Tariff Freight Costs for each shipment are
		known, Cargill will true-up the difference with Producer based on the actual,
		as opposed to the estimated, amounts and will provide Producer with reasonable
		information supporting such amounts. If the actual Accessorial Charges and
		Tariff Freight Costs are less than the estimated Accessorial Charges and Tariff
		Freight Costs, Cargill will remit the difference to Producer. If the actual
		Accessorial Charges and Tariff Freight Costs are greater than the estimated
		Accessorial Charges and Tariff Freight Costs, Producer will remit the
		difference to Cargill, or Cargill will offset the total amount against other
		monies due to Producer from Cargill.
	 

	 
		 
	 

	 
		Whenever in Cargill’s reasonable
		judgment it is in the best interests of both Cargill and Producer, Cargill
		shall be permitted to purchase DG for its own account. In every such instance,
		Cargill shall pay for all DDG and DDGS loaded into railcars and trucks and
		weighed for shipment to customers, an amount equal to the lesser of either (i)
		the weighted average F.O.B. Facility Price of all DDG and DDGS sold by Cargill
		to its customers in the week in which Cargill takes delivery for its own
		account less three percent (3%), with Cargill being entitled to retain such 3%
		as its commission; or (ii) the weighted average F.O.B. Facility Price of all
		DDG and DDGS sold by Cargill to its customers in the week in which Cargill
		takes delivery for its own account less $2.00 per ton, with Cargill being
		entitled to retain such $2.00 per ton as its commission. Alternatively, the
		Parties may mutually agree on a price for such DG.
	 

	 
		 
	 

	 
		With respect to DWG, MDWG, MDDG, and CDS
		that Cargill purchases for its own account, Cargill shall pay Producer for such
		material that is loaded into railcars and trucks at the Facility and weighed
		for shipment to customers an amount equal to the weighted average F.O.B.
		Facility Price of such DWG, MDWG, MDDG, and CDS sold by Cargill to its
		customers in the week in which Cargill takes delivery for its own account minus
		$3.00 per ton, with Cargill being entitled to retain such $3.00 per ton as its
		commission. Alternatively, the Parties may mutually agree on a price for such
		DG.
	 

	 
		 
	 

	 
		16
	 

	 
 

	 
	 

	 
		EXHIBIT B
	 

	 
		 
	 

	 
		Specifications
	 

	 
		 
	 

	 
		Producer covenants that all dried
		distiller’s grains with solubles (“DDGS”) shall, at the time of
		unload and acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  -
				

			 	
				
				  27
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  9
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  15
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  12
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  6
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		Producer covenants that all distiller’s
		wet grains (“DWG”) shall, at the time of unload and acceptance at the
		customer’s facility, conform to the following Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  -
				

			 	
				
				  10.5
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  3
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  5
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  65
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  2.5
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		Producer covenants that all dried
		distiller’s grains (“DDG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  -
				

			 	
				
				  27
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  7.5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  13
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  12
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  3
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		Producer covenants that all modified
		distiller’s wet grains (“MDWG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  27
				

			 	
				
				  16
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  8.5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  8.4
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  50
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  2.7
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		17
	 

	 
 

	 
		Producer covenants that all modified
		distiller’s dry grains (“MDDG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  27
				

			 	
				
				  15
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  12
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  40
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  3
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		Producer covenants that all condensed
		distiller’s solubles (“CDS”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				  Maximum %
				

			 	
				
				  Minimum %
				

			 
	 	
				
 	
				
 	
				
 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				  -
				

			 	
				
				  16
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				  -
				

			 	
				
				  19
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				  1
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				  65
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				  9
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		For the avoidance of doubt, the Parties
		agree that each of the foregoing Specifications are commercial specifications
		and are not to be calculated on a 100% dry matter basis.
	 

	 
		 
	 

	 
		18
	 

	 
 

	 
		 
	 

	 
		EXHIBIT C
	 

	 
		 
	 

	 
		Cargill Sales Contract Force Majeure
		Provision
	 

	 
		 
	 

	 
		Neither seller nor buyer shall be deemed in
		default of any terms or conditions of this contract for any delay in
		performance or for nonperformance if the delay or nonperformance is caused by
		(a) compliance with or changes in applicable law, bad weather, war, fire, civil
		commotion, acts of terrorism, riots, strikes, lockouts, labor disputes, acts of
		God, electrical shortage, or releases of hazardous materials, (b) the
		disruption, breakdown or unavailability of production, transportation or
		storage facilities, any machinery or equipment or other unusual or
		extraordinary breakdowns or the failure to obtain production, transportation or
		storage on reasonable terms, (c) the failure by any party with whom seller has
		contracted for the purchase of distiller’s grains, or (d) any other cause,
		whether or not of the same class or kind described in (a) through (c) hereof,
		beyond the reasonable control of such party (each, a “Force Majeure
		Event”). In the event of a delay in performance or nonperformance, the
		delaying or non-performing party shall immediately notify the other party in
		writing specifying the cause of delay or nonperformance and the estimated time
		of performance.
	 

	 
		If a Force Majeure Event occurs, then the
		delaying or non-performing party, without liability for failure to comply with
		the terms of this contract, may discontinue or curtail the amount of
		distiller’s grains which it tenders or accepts; provided that delaying or
		non-performing party shall immediately give notice of that fact to the other
		party and shall likewise give a second notice upon elimination or cessation of
		the Force Majeure Event.
	 

	 
		 In the event that delay in performance or a
		nonperformance due to a Force Majeure Event continues or will continue for more
		than fifteen (15) consecutive days, the other party shall have the right to
		terminate this contract upon ten (10) days’ written notice to the delaying
		or non-performing party. If, because of a Force Majeure Event, there is a
		shortage of seller’s supply of distiller’s grains sold hereunder such
		that seller is unable to meet its requirements for its own use and for the sale
		to customers of all kinds (including buyer), seller may allocate its supply in
		good faith according to its discretion. Under no circumstance shall seller be
		required to acquire distiller’s grains to replace supplies that are
		unavailable due to a Force Majeure Event, and should seller acquire additional
		distiller’s grains, seller shall not be required to allocate any such
		distiller’s grains to buyer.Exhibit 10.8
	 

	 
		EXECUTION COPY
	 

	 
		 
	 

	 
		DISTILLERS GRAINS MARKETING
		AGREEMENT
	 

	 
		THIS DISTILLERS GRAINS MARKETING AGREEMENT
		(the “Agreement”) is made and entered into as of the
		25th day of September, 2006 (the “Effective Date”) by and between CARGILL, INCORPORATED
		(“Cargill”) acting through its the Non-Grain Feed
		Ingredients Business Unit and Pioneer Trail Energy, LLC (“Producer”),
		collectively referred to hereinafter as “Parties” or
		individually as a “Party”.
	 

	 
		RECITALS
	 

	 
		WHEREAS, Cargill markets and distributes DG
		(as defined below); and
	 

	 
		WHEREAS, Producer will produce DG upon
		construction and start-up of a commercial facility at Wood River, Nebraska that
		will produce denatured fuel-grade ethanol (the “Facility”),
		which Facility is anticipated to produce approximately 115 million net gallons
		per year; and
	 

	 
		WHEREAS, Cargill desires to market and
		distribute Producer’s DG; and
	 

	 
		WHEREAS, Cargill and Producer have executed
		that certain Master Agreement of even date herewith (the “Master Agreement”); and
	 

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

	 
		AGREEMENT
	 

	 
		1. MARKETING.
	 

	 
		1.1 Exclusivity.
		Producer hereby agrees to sell to Cargill, and Cargill agrees to purchase and
		market, 100% of Producer’s production of distiller’s dried grains,
		distiller’s dried grains with solubles, wet distiller’s grains,
		modified wet distiller’s grains, modified dried distiller’s grains
		and condensed distiller’s solubles produced from corn (collectively,
		“DG”) produced at the Facility, including any
		expansion or increase in capacity at the Facility. Producer agrees that Cargill
		will be the exclusive marketer of Producer’s DG and that Producer will not
		market any DG during the term of this Agreement. Notwithstanding any other
		provision of this Agreement, in the event Cargill delivers to Producer written
		notice of a Force Majeure as provided in Section 3(b) of the Master Agreement,
		Producer may, upon delivery of written notice to Cargill but subject to the
		terms of the Confidentiality Agreement, market, either directly or indirectly,
		the DG produced or stored at the Facility during the expected duration of the
		Force Majeure, as determined in consultation with Cargill.
	 

	 
		1.2 Marketing Objectives. Cargill and Producer shall consult regularly with
		respect to Cargill’s marketing efforts and strategies for Producer’s
		DG purchased by Cargill, and shall provide Producer with information related to
		industry trends, quality feedback, potential product improvements and customer
		developments. Once each week during the term of this Agreement, 
	 

	 
		 
	 

	 
		 
	 

	 
 

	 
		Cargill shall provide Producer with a report
		(in a form to be agreed upon by the Parties not less than thirty (30) days
		prior to the Projected Date of First Delivery) that shall include fixed price,
		total sales, and guidance on product mix storage information relating to
		Producer’s DG. Producer intends to use this weekly report to update its
		distillers grains position sheet (“DGPS”) and
		as a basis for potentially entering into hedging transactions with third
		parties. Producer shall provide its DGPS to Cargill, and Cargill shall use the
		DGPS as a source of sales guidance for selling up to a given quantity of DG at
		certain price intervals for a specified delivery period. From time to time
		during the term of this Agreement, Cargill may enter sales agreements with
		third-party purchasers of the DG, which contracts are dependent on the
		availability of DG from Producer. Cargill shall notify Producer prior to
		entering into any sales agreement for Producer’s DG for quantities of DG
		exceeding 10,000 tons. Producer agrees that it will not share any competitively
		sensitive information provided by Cargill (including without limitation
		information related to DG prices, marketing plans, and ongoing or proposed
		customer negotiations) with Producer’s Affiliates, if any, which compete
		with Cargill for sales of DG. The DGPS shall not be binding on either
		Party.
	 

	 
		1.3 Final Authority; Long Term Sales
		Agreements. Notwithstanding anything to
		the contrary herein but without limiting the obligations of Cargill hereunder,
		Cargill shall have the authority to make final determinations with respect to
		all marketing and sales decisions and strategies, and Producer agrees to accept
		such determinations; provided,
		however, that Producer’s consent (not to be unreasonably
		withheld or delayed) shall be required prior to Cargill entering into any
		long-term sales agreement for Producer’s DG. For purposes of this Article,
		a “long-term sales agreement” shall be a sales agreement for
		Producer’s DG with a term in excess of thirty-two (32) weeks and for
		quantities of distiller’s wet or modified distiller’s wet grains
		equal to or exceeding 75,000 tons and for quantities of distiller’s dried
		or modified distiller’s dried grains equal to or exceeding 25,000
		tons.
	 

	 
		1.4 Agency Sales.
		Notwithstanding any other provision of this Agreement, in the event Cargill
		proposes to market Producer’s DG to a third party pursuant to a long-term
		sales agreement, Cargill shall enter into a contract for the sale of such DG to
		such third party as agent for Producer pursuant to which Cargill shall assume
		the credit risk under such third party contract and bear all sales, marketing,
		logistic services/management costs and collection costs after the DG produced
		at the Facility passes across the Title Transfer Point.
	 

	 
		2. MASTER AGREEMENT AND TRADE RULES.
		 The terms and conditions of the Master
		Agreement are hereby incorporated herein by reference. To the extent any
		provision of the Master Agreement conflicts with a provision contained herein,
		the provision contained herein will control. Terms capitalized but not defined
		in this Agreement shall have the meanings ascribed to them by the Master
		Agreement. 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.
	 

	 
		 
	 

	 
		 
	 

	 
		2
	 

	 
		 
	 

	 
 

	 
		3. PRICE AND COMMISSION.
	 

	 
		3.1 Price and Commission. Cargill shall pay Producer for its DG in accordance
		with the terms set forth in Exhibit
		A. Producer shall pay Cargill a
		commission for its DG marketing as calculated in Exhibit A.
		Cargill shall deduct this commission as provided in Exhibit A.
	 

	 
		3.2 Minimum Annual Commission. In the event the DG production at the Facility does
		not equal 247,500 tons (on a dry equivalent basis) per Contract Year
		(i.e., a twelve month period beginning on the Projected Date
		of First Delivery and each anniversary of such date), Producer will, promptly
		upon Cargill’s demand, pay to Cargill a minimum commission on the
		deficiency volume. The minimum commission shall be calculated as follows: the
		deficiency volume for such Contract Year (i.e., 247,500 tons less the number of
		tons actually produced during such Contract Year and provided to Cargill for
		removal) shall be split between dry products and wet products based on the
		ratio of dry products to wet products produced at the Facility during such
		Contract Year. Producer shall pay Cargill $2/ton on the deficiency volume
		allocable to dry products, and $3/ton on the deficiency volume allocable to wet
		products.
	 

	 
		3.3 Commission Adjustment. On the fifth (5th) anniversary of the
		Effective Date of this Agreement, upon the written request of either Party, the
		Parties shall negotiate in good faith an adjustment to the commission to take
		into account changes in market conditions, operating conditions or costs,
		including overhead costs, inflation or other factors; provided,
		however, that in the event the Parties are unable to agree to
		any such adjustments within thirty (30) days following commencement of such
		negotiations, no adjustment to the commission will be made.
	 

	 
		4. PAYMENT.
	 

	 
		4.1 Payment Procedures. Cargill shall invoice each customer within one
		Business Day of shipment of each load of DG from the Facility. Cargill shall
		pay Producer for all such DG within thirty (30) days of invoicing each
		customer, in accordance with the terms set forth in Exhibit A.
		Notwithstanding the foregoing, Producer acknowledges that Cargill may, with the
		prior consent of Producer (such consent not to be unreasonably withheld or
		delayed), arrange for DG to be transported from the Facility in railcars to a
		facility where such DG will be unloaded from such railcars and loaded into
		trucks for distribution to customers (each such transaction, a
		“Transload Sale”). With respect to Transload Sales, Cargill shall
		invoice customers within one (1) Business Day of the transfer of DG from a
		railcar to a truck, and shall pay Producer for such DG within thirty (30) days
		of such invoice, in accordance with the terms set forth in Exhibit A.
	 

	 
		4.2 Storage.
		Producer acknowledges that Cargill may place its DG in storage rather than
		selling it to customers due to market conditions. However, if, following
		consultation with Cargill in accordance with Section 1.2,
		Producer desires that the DG be sold to customers rather than placed in
		storage, (a) Cargill, at its option, shall either (x) sell such DG to its
		customers rather than placing it in storage, or (y) place such DG in storage
		and pay to Producer the current fair market value of such DG as determined by
		the Parties, which value shall be deemed to be the “F.O.B. Facility
		Price” or the “Delivered Sale Price” (as applicable, for
		purposes of Exhibit A) for such DG; and (b) Cargill shall, with respect to
		such DG, be relieved of the obligation imposed by Section 9.1 to
		maximize the DG price and achieve the best available return to Producer. If
		Producer consents to such storage, then the cost of transportation to and from
		storage and the cost of maintaining such outside storage shall be considered
		Accessorial Charges 
	 

	 
		 
	 

	 
		 
	 

	 
		3
	 

	 
		 
	 

	 
 

	 
		and Producer shall be responsible for
		reimbursing Cargill for such Accessorial Charges in accordance with
		Section 5.
	 

	 
		5. COSTS; TITLE AND RISK OF LOSS.
		Except as otherwise provided in this
		Agreement, Cargill will bear all sales, marketing, logistics
		services/management costs and collection costs after the DG produced at the
		Facility passes across the scale into outbound railcars or trucks at the
		Facility (the “Title Transfer
		Point”). Title and risk of loss to
		the DG shall transfer from Producer to Cargill at the Title Transfer Point.
		Until such time, Producer shall be deemed to be in control of and in possession
		of and shall have title to and risk in the DG. Cargill shall also assume
		responsibility for payment of Accessorial Charges (as defined in
		Exhibit A) to third parties; provided,
		however, that Producer agrees that, except as specified in the
		next succeeding sentence, Cargill shall deduct and setoff the Accessorial
		Charges from and against payments due to Producer by Cargill. In the event any
		specified Accessorial Charge (as evidenced in writing) exceeds $50,000, Cargill
		may demand, in writing, that Producer reimburse Cargill for such Accessorial
		Charge, in which case Producer shall reimburse Cargill as aforesaid within ten
		(10) calendar days of receipt of Cargill’s demand.
	 

	 
		6. LOGISTICS AND TRANSPORTATION; FACILITY
		STORAGE.
	 

	 
		6.1 Logistics and Transportation. Cargill shall perform certain logistics functions for
		Producer, including the arranging of rail and truck freight, bills of lading,
		and scheduling pick-up appointments, provided that Producer shall be a party
		to, or third party beneficiary of, each rail or truck transportation agreement.
		Transportation by truck may be provided at Cargill’s discretion. Cargill
		shall determine the method of transporting DG to third parties. Notwithstanding
		anything to the contrary herein, Producer shall be solely responsible for any
		damage to any trucks, railcars or equipment caused by its acts or omissions.
		Further, Producer agrees that it shall be solely responsible for furnishing a
		minimum of 200 covered hopper railcars to service the Facility and transport DG
		via railcar to customers. The time and place of delivery for DG marketed
		pursuant to this Agreement shall be such time and place as such DG is unloaded
		at a customer’s facility and accepted by such customer.
	 

	 
		6.2 Loading. Cargill
		shall schedule the loading and shipping of all outbound DG purchased hereunder,
		but all labor and equipment necessary to load trucks and railcars and other
		associated costs shall be supplied and borne by Producer without charge to
		Cargill. DG shall be available for loading and shipment twenty-four (24) hours
		per day, Monday through Sunday, except on Scheduled Holidays. For purposes of
		this Agreement, “Scheduled Holidays” are New Years Day, Presidents
		Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving
		Day, the day after Thanksgiving Day, Christmas Eve Day and Christmas Day.
		Producer agrees to handle the DG in a good and workmanlike manner in accordance
		with Cargill’s reasonable written requirements and normal industry
		practice. Producer shall maintain the truck and railcar loading facilities in
		safe operating condition in accordance with normal industry standards and will
		visually inspect all trucks and railcars to ensure: (a) their cleanliness so as
		to avoid adulteration and contamination; and (b) that such trucks and railcars
		are in a condition suitable for transporting the DG under applicable law.
		Cargill agrees that its employees will follow all reasonable safety rules and
		procedures promulgated by Producer and provided to Cargill in writing. Producer
		will supply product description tags, certificates of analysis, bills of lading
		
	 

	 
		 
	 

	 
		 
	 

	 
		4
	 

	 
		 
	 

	 
 

	 
		and/or material safety data sheets that are
		applicable to all shipments.
	 

	 
		6.3 Facility Storage. Producer shall have storage space at the Facility, at
		its sole cost, for not less than 12,650 tons of distiller’s dried grains
		and dried distiller’s grains with solubles, which shall be continuously
		available for storage of DG so as to provide flexibility in marketing efforts.
		If Producer expands its ethanol production capacity, Producer shall
		correspondingly expand its DG storage capacity. Further, Producer shall be
		responsible at all times for the quality and condition of DG in storage at the
		Facility. Cargill shall schedule for removal by truck or railcar the actual
		quantity of DG produced by Producer in the relevant week less the amount of DG
		that Cargill requests Producer to store at the Facility. Subject to the terms
		and conditions of the railcar exchange agreement to be entered into between the
		Parties, Cargill shall use commercially reasonable efforts to arrange
		transportation and deliveries of DG so that excess inventories do not limit
		ethanol production at the Facility. All truck freight charges and rail tariff
		rate charges shall be billed directly to Cargill and deducted by Cargill from
		the proceeds of Cargill’s DG sales to customers.
	 

	 
		6.4 Demurrage. In
		the event demurrage, detention or wait time is incurred before and after
		loading, and except as provided in the next succeeding sentence, Cargill shall
		make a reasonable effort to recover an amount equal to such demurrage from the
		party responsible for the demurrage; provided,
		however, that if Cargill is not successful in recovering such
		amount, Producer shall promptly pay such amount to Cargill as an Accessorial
		Charge. In the event that additional costs or expenses (included without
		limitation demurrage and wait time) are incurred by Cargill as a result of any
		act or omission by Producer (including without limitation Producer’s
		failure to provide the labor, equipment and facilities necessary to meet
		Cargill’s loading schedule), then Producer shall be responsible for all
		such costs and expenses incurred by Cargill resulting from or arising in
		connection with Producer’s act or omission.
	 

	 
		7. QUALITY.
	 

	 
		7.1 DG Specifications. Producer covenants that at all times during the term
		of this Agreement it shall produce DG that, upon unload and acceptance at the
		customer’s facility, meets the respective specifications set forth in
		Exhibit B (the “Specifications”) and is free-flowing. Cargill shall have the
		right (but not the obligation) to test each shipment of DG to ascertain that
		the Specifications are being met. In the event the DG, upon unload and
		acceptance at the customer’s facility, does not meet the Specifications
		and the terms of this Agreement or is not free-flowing, Cargill may, in its
		sole discretion (i) reject such DG and require Producer to promptly replace
		such non-conforming DG with DG that complies with the Specifications and/or is
		free-flowing; or (ii) accept the DG for marketing and adjust the price based on
		market demand to reflect the inferior quality, as provided in Exhibit A. If
		Cargill rejects any non-conforming DG, Cargill will use reasonable efforts to
		assist Producer in identifying a use or market for the non-conforming DG, which
		may include sale of the non-conforming DG or, with Producer’s consent,
		reprocessing at the Facility.
	 

	 
		7.2 Feed Ingredient Standards. Producer understands that Cargill intends to market DG
		produced under this Agreement as a primary animal feed ingredient, and that
		said products are subject to minimum standards for such use. Producer agrees
		and warrants that DG, upon unload and acceptance at the customer’s
		facility, shall be acceptable in the feed trade under then-
	 

	 
		 
	 

	 
		 
	 

	 
		5
	 

	 
		 
	 

	 
 

	 
		current industry standards and shall be an
		approved feed ingredient under applicable standards promulgated by the
		Association of American Feed Control Officials Incorporated.
	 

	 
		7.3 Compliance with FDA and Other Standards. Producer covenants that the DG, upon unload and
		acceptance at the customer’s facility, will not be “adulterated”
		or “misbranded” within the meaning of the Federal Food, Drug and
		Cosmetic Act (the “Act”) and
		that each shipment may lawfully be introduced into interstate commerce under
		the Act. Improper cleaning of trucks or railcars that have previously hauled
		prohibited mammalian protein products may render the next load of product
		adulterated and/or misbranded under federal law. Accordingly, Producer
		covenants that it shall comply with the clean-out procedures set forth in the
		FDA regulation at 21 CFR 589.2000, as amended. Furthermore, Producer covenants
		that the DG, upon unload at the customer’s facility, 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
		products.
	 

	 
		7.4 Regulatory Seizure. Should any of the DG delivered hereunder be seized or
		condemned by any federal or state department or agency as a result of its
		failure to conform to this Agreement prior to delivery, such seizure or
		condemnation shall operate as a rejection by Cargill of the goods seized or
		condemned and Cargill shall not be obligated to offer any defense in connection
		with such seizure or condemnation. When rejection occurs, Cargill shall deliver
		written notice to Producer within a reasonable time of the rejection and
		identify the deficiency that resulted in the rejection and at its option,
		Cargill may:
	 

	 
			
				
				   
				

			 	
				
				  (a)
				

			 	
				
				  Dispose of the rejected goods in
				  accordance with applicable laws, rules and regulations after first offering
				  Producer a reasonable opportunity of examining and taking possession thereof,
				  if the condition of the goods reasonably appears to Cargill to permit such
				  delay in making disposition;
				

			 

 

	 
			
				
				   
				

			 	
				
				  (b)
				

			 	
				
				  Dispose of the rejected goods in any
				  manner directed by Producer which Cargill can accomplish without violation of
				  applicable laws, rules or regulations; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  (c)
				

			 	
				
				  If Cargill has no available means of
				  disposal of rejected goods and Producer fails to direct Cargill to dispose of
				  the rejected goods as provided herein, Cargill will return the rejected goods
				  to Producer, upon which event Cargill’s obligations with respect to said
				  rejected goods shall be deemed fulfilled.
				

			 

 

	 
		In addition to other obligations under this
		Agreement or at law, Producer shall promptly reimburse Cargill for all
		out-of-pocket costs reasonably incurred by Cargill in storing, transporting,
		returning and disposing of the rejected goods in accordance with this
		Agreement.
	 

	 
		7.5 Adultered DG. If
		Producer knows or reasonably suspects that any DG produced at the Facility is
		adulterated or misbranded, or is not in compliance with the Specifications or
		the other terms of the Agreement, Producer shall immediately so notify Cargill
		in writing so that such DG can be tested before entering interstate commerce.
		If Cargill knows or reasonably suspects that any DG produced by Producer at the
		Facility is adulterated, misbranded or otherwise not in compliance with the
		terms of this Agreement, then Cargill may obtain independent laboratory tests
		of the affected DG. If such DG is tested and found to comply in all 
	 

	 
		 
	 

	 
		 
	 

	 
		6
	 

	 
		 
	 

	 
 

	 
		respects with the Specifications and the
		terms of this Agreement, Cargill shall pay all testing costs, and if the DG is
		found not to comply in all respects with the Specifications and the terms of
		this Agreement, Producer will pay all testing costs; provided,
		however, that if such testing was prompted by Producer’s
		notice to Cargill under this Section
		7.5, Producer will pay all testing
		costs.
	 

	 
		7.6 Recalls.
		Producer shall, at its sole cost and expense, comply and cooperate with any
		recall of DG reasonably determined to be necessary by Cargill. In the event
		that it is deemed necessary or appropriate by Cargill in its reasonable
		determination, either in response to government action or otherwise, to recall
		any DG produced by Producer pursuant to this Agreement due to non-conformance
		with the Specifications or the terms of this Agreement, Producer agrees to be
		responsible for all reasonable out-of-pocket costs of such recall and recovery,
		including, but not limited to, loss of products, transportation of products,
		notices and communications necessary or appropriate to effecting such recall
		and all reasonable out-of-pocket costs and expenses incurred in defending
		actions brought in connection with such recall.
	 

	 
		7.7 Sampling.
		Producer will take a minimum of one (1) origin, representative sample from each
		lot (i.e., each truck or railcar load) of the DG before it leaves the Facility,
		and shall, at a minimum, test such lots for conformance with the Specifications
		relating to moisture content. Cargill shall be entitled to witness the taking
		of samples. Producer will label these samples to indicate the DG’s lot
		numbers, date of shipment, and the truck or railcar number. Producer shall send
		one sample to Cargill promptly upon Cargill’s request. Producer may
		request that the Cargill test results be provided to it at any time after the
		tests are completed. Producer will also retain the samples and labeling
		information for no less than one (1) year or any longer period required by law.
		If destination samples at the customer’s facility indicate that the DG
		does not conform to the Specifications, or otherwise fails to meet the
		requirements of this Agreement, those samples shall be determinative.
	 

	 
		7.8 No Liens.
		Producer warrants that DG delivered to Cargill hereunder shall be free and
		clear of all liens and encumbrances of any nature whatsoever.
	 

	 
		7.9 Customer Claims.
		If any customer makes a claim against Cargill as a result of Producer’s DG
		failing to meet the Specifications or to the requirements of this Agreement,
		Producer shall indemnify Cargill against any damages or losses that it incurs
		as a result of such claim; provided, that Producer shall not be required to
		indemnify Cargill for such claims to the extent (i) the DG conformed in all
		respects to the Specifications and the other requirements of this Agreement
		upon unload and acceptance at the customer’s facility; (ii) the railcar or
		truck used to transport the DG from the Facility was in a clean and sanitary
		condition, compliant with all applicable laws and regulations and suitable for
		the loading and transportation of the DG; and (iii) the seals on the railcar or
		truck used to transport the DG from the Facility were in good working order and
		were properly secured prior to leaving the Facility. Producer’s liability
		for such claims shall not be subject to the limitations set forth in Section 8
		of the Master Agreement.
	 

	 
		8. QUANTITY AND WEIGHTS.
	 

	 
		8.1 Purchase of DG.
		Subject to the terms and conditions of this Agreement, Cargill shall purchase
		from Producer all of the DG produced at the Facility. In the event that
		Producer increases the capacity of the Facility pursuant to the installation of
		new or additional equipment, 
	 

	 
		 
	 

	 
		 
	 

	 
		7
	 

	 
		 
	 

	 
 

	 
		upon reasonable notice to Cargill, such
		additional volume shall be added to this Agreement and purchased by Cargill
		pursuant to the terms of this Agreement. On the first Cargill Working Day of
		each month (commencing on the month during which the Projected Date of First
		Delivery is to occur) Producer shall notify Cargill of its scheduled
		production, determined by Producer good faith on a monthly basis, for the
		upcoming three (3) month period (the amount scheduled for each month in such
		production schedule notice being called the “Scheduled Monthly Production”). Once the Scheduled Monthly Production has been
		established for a month, Producer may increase but may not reduce the Scheduled
		Monthly Production for such month in a subsequent production schedule notice
		unless the reduction will not cause or result in a breach by Cargill of sales
		commitments it has made with respect to the month or Cargill otherwise approves
		such reduction. Producer shall notify Cargill of anticipated production
		downtime or disruption in DG availability at least three (3) months in advance
		of such outage. In addition to the production schedule notice, Producer shall
		provide a written estimate to Cargill of the volume of DG to be produced and
		delivered by Producer at least five (5) days prior to the beginning of the week
		during which it is to be removed by Cargill, together with a notice of the
		amount of DG in storage as of the date of the notice. “Cargill Working Day” means Monday, Tuesday, Wednesday, Thursday or
		Friday except for Cargill Holidays. “Cargill Holidays” are New Years Day, Presidents Day, Good Friday,
		Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day after
		Thanksgiving Day, Christmas Eve Day and Christmas Day (or, with respect to
		Christmas, the Cargill Holidays may differ from actual Christmas Eve Day and
		Christmas Day if such days fall on a weekend).
	 

	 
		8.2 Date of First Delivery. Producer shall notify Cargill, in writing, at least
		thirty (30) days prior to the date it expects to make first delivery of DG to
		Cargill (the “Projected Date of
		First Delivery”). Additionally,
		Producer shall provide a best estimate of production on a daily basis for the
		six (6) month period following the date of first delivery. For the avoidance of
		doubt, Cargill shall not be obligated to enter into sales agreements for DG or
		arrange for any rail or truck freight until Producer has provided Cargill with
		written notice of the Projected Date of First Delivery.
	 

	 
		8.3 Failure to Produce/Deliver. In the event Producer fails to produce DG in
		accordance with the Scheduled Monthly Production for a month for reasons other
		than an event of Force Majeure (as defined in Section 3 of the Master
		Agreement) affecting Producer or a default by Cargill, and as a result Cargill
		is required to purchase DG from third parties to meet previous DG sale
		commitments that are based upon the Scheduled Monthly Production for the month,
		Cargill may charge Producer, and Producer shall promptly pay to Cargill, an
		amount equal to the deficiency volume multiplied by the positive difference (if
		any) between the per ton price of replacement DG and the price per ton that
		Cargill would have paid to Producer for such DG under this Agreement, plus
		Cargill’s commission on the deficiency volume, as set forth in
		Exhibit A.
	 

	 
		8.4 Weighing. The
		quantity of DG delivered to Cargill at the 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.
		In the case of railcar shipments, the official railroad weights will govern
		establishment of said quantities. Producer shall provide Cargill with 
	 

	 
		 
	 

	 
		 
	 

	 
		8
	 

	 
		 
	 

	 
 

	 
		a fax copy of the outbound weight
		certificates on a daily basis and such outbound weight certificates shall be
		determinative of the quantity of DG for which Cargill is obligated to pay
		pursuant to Section 3.
	 

	 
		8.5 Facility Product Mix. On an ongoing basis during the term of this Agreement,
		Cargill shall, after consultation with Producer and based on the production
		capabilities of the Facility, determine the quantities of distiller’s
		dried grains, distiller’s dried grains with solubles, wet distiller’s
		grains, modified wet distiller’s grains, modified dried distiller’s
		grains and condensed distiller’s solubles that Producer shall be obligated
		to produce and make available to Cargill. Cargill shall use commercially
		reasonable efforts to select a facility product mix that is reasonably
		satisfactory to Producer.
	 

	 
		8.6 Cargill Force Majeure Event Indemnity. Producer agrees to indemnify and hold harmless
		Cargill, its Affiliates and their respective officers, directors, employees,
		agents, shareholders and representatives with respect to any claim by the
		intended purchaser of Producer’s DG for a breach of Cargill’s
		delivery obligations arising in connection with Cargill’s exercise of its
		force majeure rights upon the occurrence of an event of Force Majeure affecting
		Producer, provided that
		Producer shall not be required to so indemnify if, and only if, Cargill (a)
		failed to issue its standard form sales contract to such intended purchaser
		containing the force majeure provisions described in Exhibit C hereto
		(as such force majeure provisions may be amended from time to time by Cargill
		with the consent of Producer, such consent not to be unreasonably withheld,
		delayed or conditioned); and (b) did not otherwise have a negotiated supply
		agreement with such intended purchaser containing force majeure provisions
		reasonably acceptable to Producer. At Cargill’s option, Producer shall be
		required at its expense to defend Cargill with counsel reasonably acceptable to
		Cargill in connection with any such third-party claim to the extent the
		indemnity contained in this Section
		8.6 applies.
	 

	 
		9. MARKETING
		EFFICIENCIES.
	 

	 
		9.1 Standard of Care. Cargill agrees to market Producer’s DG using the
		same standards it uses to market its own DG production and the DG production of
		third parties for whom Cargill provides DG marketing services to (a) maximize
		the DG price and minimize freight and other costs relevant to DG sales and (b)
		achieve the best available return to Producer and Cargill, subject to relevant
		market conditions. Producer acknowledges that Cargill will use its reasonable
		judgment in making decisions related to the quantity and price of DG marketed
		under this Agreement, in light varying freight and other costs, and the fact
		that Cargill may sell and market DG on its own account and/or on the account of
		third parties into the same markets where Cargill sells Producer’s
		DG.
	 

	 
		9.2 Conflict of Interest. In light of the inherent uncertainties associated with
		marketing DG in the relevant markets, Producer waives any claim of conflict of
		interest against Cargill for failure to use commercially reasonable efforts to
		maximize the DG price, minimize freight and other costs relevant to DG sales,
		or to achieve the best available return to Producer to the extent such claims
		relate to any such conflict of interest or alleged preference to third parties
		for whom Cargill provides distiller’s grains marketing services;
		provided, however, that
		Producer does not waive its right to terminate this Agreement for any such
		conflict of interest that directly 
	 

	 
		 
	 

	 
		 
	 

	 
		9
	 

	 
		 
	 

	 
 

	 
		results in material quantifiable pecuniary
		loss to Producer. If Cargill disputes the existence or impact of the conflict
		of interest, Producer and Cargill shall follow the dispute resolution
		procedures set forth in Section 6 of the Master Agreement in order to determine
		whether Producer may terminate this Agreement, and Cargill and Producer shall
		continue to perform their obligations under this Agreement in good faith during
		the pendency of such dispute resolution proceedings.
	 

	 
		10. TERM. The term of this Agreement is ten (10) years, commencing
		as of the Effective Date.
	 

	 
		11. EVENTS OF DEFAULT.
	 

	 
		11.1 Cargill Event of Default. The following shall constitute events of default on
		the part of Cargill (each, a “Cargill Event of Default”) under this Agreement:
	 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Cargill fails on three (3) separate
				  occasions within any twelve (12) month period to purchase DG in accordance with
				  Section 1.1 under circumstances where such breach or failure is not
				  excused by this Agreement, including by a Force Majeure condition;
				  provided, however, that
				  any such breach or failure shall not constitute a triggering occurrence
				  hereunder unless such breach or failure causes Producer to shut down or suspend
				  operations at the Facility due to excess quantities of DG at the Facility, and
				  Producer has provided Cargill with written notice of each such failure;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  Cargill fails to pay any amount that
				  is due to Producer under this Agreement that is not excused by this Agreement,
				  and (i) Producer provides written notice to Cargill of such failure, and (ii)
				  Cargill fails to pay to Producer such past-due amount (plus amounts payable
				  pursuant to Section
				  11.3(a)(1), if any) within seven (7)
				  days of Cargill’s receipt of such confirmation.
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  willful misconduct by Cargill in the
				  performance of its obligations hereunder and Producer provides Cargill with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Producer or the Facility; and (ii) such willful
				  misconduct is done under the direction of or otherwise sanctioned by an officer
				  of Cargill within the Cargill Non-Grain Feed Ingredients Business Unit;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  d)
				

			 	
				
				  Cargill 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 unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days.
				

			 

 

	 
		11.2 Producer Event of Default. The following shall constitute events of default on
		the part of Producer (each, a “Producer Event of Default”) under this Agreement:
	 

	 
		 
	 

	 
		 
	 

	 
		10
	 

	 
		 
	 

	 
 

	 
			
				
				   
				

			 	
				
				  a)
				

			 	
				
				  Producer fails to pay any amount
				  that is due to Cargill under this Agreement that is not excused by this
				  Agreement, and (i) Cargill provides written notice to Producer of such failure,
				  and (ii) Producer fails to pay to Cargill such past-due amount (plus amounts
				  payable pursuant to Section
				  11.3(a)(1), if any) within seven (7)
				  days;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b)
				

			 	
				
				  willful misconduct by Producer in
				  the performance of its obligations hereunder and Cargill provides Producer with
				  written notice of such incident where (i) such willful misconduct has a
				  Material Adverse Effect on Cargill; and (ii) such willful misconduct is done
				  under the direction of or otherwise sanctioned by an officer of Producer;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  c)
				

			 	
				
				  Producer 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 unable to
				  pay its debts generally when due, in each case where such petition, appointment
				  or insolvency is not dismissed, discharged or remedied, as applicable, within
				  sixty (60) days.
				

			 

 

	 
		11.3 Remedies and Procedures.
	 

	 
		a) Remedies for Breach Not Constituting an Event of
		Default. In the event that either Party
		breaches or fails to perform any commitment or obligation contained herein,
		under circumstances where such breach or failure does not constitute a Cargill
		Event of Default or a Producer Event of Default (each, as the context requires,
		an “Event of
		Default”), and such breach or
		failure is not excused by this Agreement, including by a Force Majeure
		condition, the other Party (the “Non-Defaulting Party”) may exercise any remedy or right specified in
		the Master Agreement or this Agreement in connection with such breach or
		failure. In addition, and without limiting the foregoing:
	 

	 
		(1) in the event either Party fails to pay
		any amounts due to the other Party when due, the Non-Defaulting Party shall be
		entitled to charge and receive interest accrued on the unpaid amount from the
		date it was due until the date actually paid at the Default Rate;
	 

	 
		(2) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in this
		Agreement, the defaulting Party shall be liable to the Non-Defaulting Party for
		Damages arising out of or resulting from such breach as provided in Section 8
		of the Master Agreement (subject to the Non-Defaulting Party’s duty to
		mitigate its Damages); provided,
		however, in the event of a material breach by Cargill hereunder
		of its obligation to purchase or market DG, the measure for Damages arising
		from such breach shall include the loss of revenues suffered by Producer as a
		result of such breach, so long as (A) the Damages payable under this proviso in
		connection with each such breach, on a per occurrence basis, exceed Ten
		Thousand Dollars ($10,000) and (B) such Damages payable exclude Damages to the
		extent arising out of breaches by third parties under the rail and truck
		transportation agreements referred to in 
	 

	 
		 
	 

	 
		 
	 

	 
		11
	 

	 
		 
	 

	 
 

	 
		Section 6.1. For the avoidance of doubt, the amount of revenues
		lost shall be calculated by reference to the average price of DG from the
		Facility sold by Cargill to its customers for the 7-day period ending on the
		date of the breach; and
	 

	 
		(3) if a Party breaches or fails to perform
		in any material respect any of its commitments or agreements contained in any
		Principal Document, and such breach or failure is of a continuing nature, the
		Non-Defaulting Party may (A) request the defaulting Party, as a condition of
		continuing its performance under this Agreement, to provide adequate assurance
		of performance of the defaulting Party’s obligations under this Agreement;
		and/or (B) seek injunctive relief.
	 

	 
		b) Remedies for Events of Default. Upon the occurrence of an Event of Default that has
		not been waived by the Non-Defaulting Party, the Non-Defaulting Party shall
		have all of the following rights and remedies in addition to the rights and
		remedies specified in Section
		11.3(a) above, which may be exercised
		in such order or combination as such Non-Defaulting Party may determine: (i)
		terminate this Agreement, or (ii) subject to the limitations set forth in
		Section 8(c) of the Master Agreement (relating to consequential damages),
		pursue any other remedies available at law or in equity.
	 

	 
		12. NEW PRODUCTS. The Parties acknowledge that this Agreement contemplates
		the production and marketing of certain types of DG, meeting certain
		specifications, generally intended for use as animal feed products.
		Nonetheless, it is the intent of the Parties that the following provisions
		shall apply if Producer desires to produce new products derived from DG or any
		component thereof (including without limitation fats, carbohydrates or protein)
		that are created or developed during the term of this Agreement, whether or not
		intended for use as animal feed products (collectively, “New Products”):
	 

	 
		12.1 Producer shall provide Cargill with
		ninety (90) days’ prior written notice of its intent to produce New
		Products (the “New Product
		Notice”). The New Product Notice
		shall contain detailed information about the New Products, including without
		limitation a detailed description of the New Products, intended markets, and
		anticipated volume;
	 

	 
		12.2 If Cargill contracted to sell any of
		Producer’s DG to third parties at the time of receipt of the New Product
		Notice (“Contracted
		Volume”), then Producer shall pay
		Cargill the difference if any between (a) the price that Cargill pays to
		replace the Contracted Volume, and (b) the price that Cargill would have paid
		Producer for such Contracted Volume under this Agreement;
	 

	 
		12.3 With respect to New Products that are
		substantially similar to DG in terms of their characteristics and intended end
		use, Producer agrees to engage Cargill to distribute and market, and Cargill
		agrees to distribute and market, 100% of Producer’s production of such New
		Products produced at the Facility, on terms and conditions identical to the
		terms and conditions set forth in this Agreement, with amendments as necessary
		to provide the specifications and anticipated volumes applicable to such New
		Products; and
	 

	 
		 
	 

	 
		 
	 

	 
		12
	 

	 
		 
	 

	 
 

	 
		12.4 With respect to New Products that are
		not substantially similar to DG, within sixty (60) days of its receipt of the
		New Product Notice, Cargill shall notify Producer in writing as to whether
		Cargill desires to distribute and market such New Products. If Cargill so
		determines to distribute and market such New Products, then (a) Cargill shall
		use commercially reasonable efforts to aid Producer in its development of such
		New Products; (b) Producer and Cargill shall in good faith negotiate amendments
		to this Agreement to accommodate such New Products; and (c) Cargill shall have
		a right of first refusal to distribute and market such New Products.
	 

	 
		[Signature page follows]
	 

	 
		 
	 

	 
		13
	 

	 
		 
	 

	 
 

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

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  CARGILL, INCORPORATED
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By: 
				

			 	
				
				  /s/ George Schember
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: George Schember

				  Title: VP Commercial Manager Horizon
				  Milling
				

			 

 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  PIONEER TRAIL ENERGY,
				  LLC
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 By: 
				

			 	
				
				   /s/ Scott H. Pearce
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: Scott H. Pearce

				  Title: Authorized Representative
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		14
	 

	 
		 
	 

	 
 
	 
		EXHIBIT A
	 

	 
		Terms relating to payment and commission
		calculation
	 

	 
		Cargill agrees to pay Producer for all
		Standard-Grade DDG and DDGS loaded into railcars and trucks and weighed at the
		Facility for shipment to customers an amount equal to the lesser of (i)
		ninety-seven percent (97%) of the F.O.B. Facility Price or (ii) the F.O.B.
		Facility Price minus $2.00 per ton, with Cargill being entitled to retain as
		its commission the greater of the remaining three percent (3%) or $2.00 per
		ton(“Initial Price”), with settlement weights as described in Section
		8.4 of the Agreement.
	 

	 
		Cargill agrees to pay Producer for all
		Non-Standard-Grade DDG and DDGS loaded into railcars and trucks at the Facility
		and weighed for shipment to customers, an amount equal to the lesser of either
		(i) the F.O.B. Facility Price for such Non-Standard-Grade DDG or DDGS less
		three percent (3%) of the weighted average F.O.B. Facility Price of all
		Standard-Grade DDG or DDGS sold by Cargill to third parties in a rolling thirty
		(30) day period preceding the date of Producer’s invoice, or (ii) the
		F.O.B. Facility Price for such Non-Standard DG less $2.00 per ton, with Cargill
		being entitled to retain as its commission the greater of the remaining three
		percent (3%) or $2.00 per ton (“Non-Standard Initial Price”).
	 

	 
		Cargill agrees to pay Producer for all
		Standard-Grade and Non-Standard-Grade DWG, MDWG, MDDG, and CDS loaded into
		railcars and trucks at the Facility and weighed for shipment to customers an
		amount equal to the F.O.B. Facility Price for such material minus $3.00 per ton
		with Cargill entitled to retain such $3.00 per ton as its commission.
	 

	 
		“Accessorial Charges” shall mean charges imposed by third parties for
		the off-loading, movement and storage of Producer’s DG, including without
		limitation taxes, tonnage taxes, hard-to-unload truck or railcar
		charges/transloading charges, bad order railcar repair charges, fuel
		surcharges, storage charges, demurrage charges, product shrinkage, detention
		charges, switching, and weighing charges. 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 Cargill for
		Producer’s DG, inclusive of tariff freight, as evidenced by Cargill’s
		invoices to its own customers.
	 

	 
		“F.O.B. 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 Cargill invoices its third party
		customers.
	 

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

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

	 
		 
	 

	 
		 
	 

	 
		15
	 

	 
		 
	 

	 
 

	 
		“Non-Standard-Grade” shall mean DG that fail to meet the
		Specifications set forth in this Agreement, but which Cargill nonetheless
		accepts for marketing under this Agreement. For purposes of illustration only,
		assume that Cargill purchases ten (10) tons of Standard DG from Producer, and
		resells said Standard DG to a third-party purchaser at $100/ton (the F.O.B.
		Facility Price) plus a $50/ton tariff rate charge, resulting in a $1,500 sale
		invoice to said third party. Assume also that Cargill incurs and pays $3 per
		ton in Accessorial Charges. In such instance, Cargill would pay, or cause to be
		paid, the freight of $500, and the remaining $1,000 would be split as follows:
		$970 to the Producer and $30 to Cargill. Since 3% of $100 equals $3.00 and is
		greater than the $2.00 per ton minimum flat fee, $3.00 per ton. Producer shall
		also promptly reimburse Cargill for $30 in Accessorial Charges.
	 

	 
		The Parties acknowledge that Cargill will
		pay Producer for its DG within thirty (30) days from the date that Cargill
		invoices each customer for such DG, despite the fact that actual Accessorial
		Charges and Tariff Freight Costs may not be determined during such timeframe.
		Accordingly, Cargill will pay Producer based on the actual Delivered Sales
		Price less estimated Accessorial Charges and Tariff Freight Costs. Once the
		actual Accessorial Charges and Tariff Freight Costs for each shipment are
		known, Cargill will true-up the difference with Producer based on the actual,
		as opposed to the estimated, amounts and will provide Producer with reasonable
		information supporting such amounts. If the actual Accessorial Charges and
		Tariff Freight Costs are less than the estimated Accessorial Charges and Tariff
		Freight Costs, Cargill will remit the difference to Producer. If the actual
		Accessorial Charges and Tariff Freight Costs are greater than the estimated
		Accessorial Charges and Tariff Freight Costs, Producer will remit the
		difference to Cargill, or Cargill will offset the total amount against other
		monies due to Producer from Cargill.
	 

	 
		Whenever in Cargill’s reasonable
		judgment it is in the best interests of both Cargill and Producer, Cargill
		shall be permitted to purchase DG for its own account. In every such instance,
		Cargill shall pay for all DDG and DDGS loaded into railcars and trucks and
		weighed for shipment to customers, an amount equal to the lesser of either (i)
		the weighted average F.O.B. Facility Price of all DDG and DDGS sold by Cargill
		to its customers in the week in which Cargill takes delivery for its own
		account less three percent (3%), with Cargill being entitled to retain such 3%
		as its commission; or (ii) the weighted average F.O.B. Facility Price of all
		DDG and DDGS sold by Cargill to its customers in the week in which Cargill
		takes delivery for its own account less $2.00 per ton, with Cargill being
		entitled to retain such $2.00 per ton as its commission. Alternatively, the
		Parties may mutually agree on a price for such DG.
	 

	 
		With respect to DWG, MDWG, MDDG, and CDS
		that Cargill purchases for its own account, Cargill shall pay Producer for such
		material that is loaded into railcars and trucks at the Facility and weighed
		for shipment to customers an amount equal to the weighted average F.O.B.
		Facility Price of such DWG, MDWG, MDDG, and CDS sold by Cargill to its
		customers in the week in which Cargill takes delivery for its own account minus
		$3.00 per ton, with Cargill being entitled to retain such $3.00 per ton as its
		commission. Alternatively, the Parties may mutually agree on a price for such
		DG.
	 

	 
		 
	 

	 
		 
	 

	 
		16
	 

	 
		 
	 

	 
 

	 
		EXHIBIT B
	 

	 
		Specifications
	 

	 
		Producer covenants that all dried
		distiller’s grains with solubles (“DDGS”) shall, at the time of
		unload and acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  27
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  9
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  15
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  12
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  6
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		Producer covenants that all distiller’s
		wet grains (“DWG”) shall, at the time of unload and acceptance at the
		customer’s facility, conform to the following Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  10.5
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  3
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  5
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  65
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  2.5
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		Producer covenants that all dried
		distiller’s grains (“DDG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  27
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  7.5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  13
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  12
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  3
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		Producer covenants that all modified
		distiller’s wet grains (“MDWG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  27
				

			 	
				
				   
				

			 	
				
				  16
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  8.5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  8.4
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  50
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  2.7
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		17
	 

	 
		 
	 

	 
 

	 
		Producer covenants that all modified
		distiller’s dry grains (“MDDG”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  27
				

			 	
				
				   
				

			 	
				
				  15
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  5
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  12
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  40
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  3
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		Producer covenants that all condensed
		distiller’s solubles (“CDS”) shall, at the time of unload and
		acceptance at the customer’s facility, conform to the following
		Specification:
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  Component
				

			 	
				
				   
				

			 	
				
				  Maximum %
				

			 	
				
				   
				

			 	
				
				  Minimum %
				

			 
	
				
				   
				

			 	
				
				  Protein
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  16
				

			 
	
				
				   
				

			 	
				
				  Fat
				

			 	
				
				   
				

			 	
				
				  -
				

			 	
				
				   
				

			 	
				
				  19
				

			 
	
				
				   
				

			 	
				
				  Fiber
				

			 	
				
				   
				

			 	
				
				  1
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Moisture
				

			 	
				
				   
				

			 	
				
				  65
				

			 	
				
				   
				

			 	
				
				  -
				

			 
	
				
				   
				

			 	
				
				  Ash
				

			 	
				
				   
				

			 	
				
				  9
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		For the avoidance of doubt, the Parties
		agree that each of the foregoing Specifications are commercial specifications
		and are not to be calculated on a 100% dry matter basis.
	 

	 
		 
	 

	 
		18
	 

	 
		 
	 

	 
 

	 
		EXHIBIT C
	 

	 
		Cargill Sales Contract Force Majeure
		Provision
	 

	 
		Neither seller nor buyer shall be deemed in
		default of any terms or conditions of this contract for any delay in
		performance or for nonperformance if the delay or nonperformance is caused by
		(a) compliance with or changes in applicable law, bad weather, war, fire, civil
		commotion, acts of terrorism, riots, strikes, lockouts, labor disputes, acts of
		God, electrical shortage, or releases of hazardous materials, (b) the
		disruption, breakdown or unavailability of production, transportation or
		storage facilities, any machinery or equipment or other unusual or
		extraordinary breakdowns or the failure to obtain production, transportation or
		storage on reasonable terms, (c) the failure by any party with whom seller has
		contracted for the purchase of distiller’s grains, or (d) any other cause,
		whether or not of the same class or kind described in (a) through (c) hereof,
		beyond the reasonable control of such party (each, a “Force Majeure
		Event”). In the event of a delay in performance or nonperformance, the
		delaying or non-performing party shall immediately notify the other party in
		writing specifying the cause of delay or nonperformance and the estimated time
		of performance.
	 

	 
		If a Force Majeure Event occurs, then the
		delaying or non-performing party, without liability for failure to comply with
		the terms of this contract, may discontinue or curtail the amount of
		distiller’s grains which it tenders or accepts; provided that delaying or
		non-performing party shall immediately give notice of that fact to the other
		party and shall likewise give a second notice upon elimination or cessation of
		the Force Majeure Event.
	 

	 
		 In the event that delay in performance or a
		nonperformance due to a Force Majeure Event continues or will continue for more
		than fifteen (15) consecutive days, the other party shall have the right to
		terminate this contract upon ten (10) days’ written notice to the delaying
		or non-performing party. If, because of a Force Majeure Event, there is a
		shortage of seller’s supply of distiller’s grains sold hereunder such
		that seller is unable to meet its requirements for its own use and for the sale
		to customers of all kinds (including buyer), seller may allocate its supply in
		good faith according to its discretion. Under no circumstance shall seller be
		required to acquire distiller’s grains to replace supplies that are
		unavailable due to a Force Majeure Event, and should seller acquire additional
		distiller’s grains, seller shall not be required to allocate any such
		distiller’s grains to buyer.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]