Document:

Exhibit

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

MEMBER CORN OIL MARKETING AGREEMENT
THIS CORN OIL MARKETING AGREEMENT (the “Agreement”) is made and entered into as of July 17, 2018 with an effective date of November 1, 2018 (the “Effective Date”) by and between RPMG, INC., a Minnesota corporation (“RPMG”) and Highwater Ethanol, LLC, a Minnesota limited liability company (“Producer”), collectively referred to hereinafter as “Parties” or individually as a “Party”.
RECITALS
		
	A.
	RPMG markets corn oil (as hereinafter defined).

		
	B.
	Producer produces or shall produce corn oil at Producer’s ethanol production facility located at Lamberton, Minnesota (the “Ethanol Facility”).

		
	C.
	The Parties desire that RPMG shall market corn oil produced at the Ethanol Facility.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
AGREEMENT
		
	1.
	Marketing of Corn Oil.  Producer shall sell to RPMG, and RPMG shall purchase and market, all of Producer’s production of corn oil produced at the Ethanol Facility, including any expansion or increase in capacity at the Ethanol Facility.  RPMG shall be the exclusive marketer of corn oil and Producer shall not, either itself or through any affiliate or any third party, market any corn oil during the term of this Agreement.  Except as otherwise provided in this Agreement, RPMG shall provide management resources to market and sell corn oil, including the management of logistics and collection.

2.    Payments to Producer; Commissions; Audit Rights 
		
	(a)
	Payments to Producer.  Subject to the other terms of this Agreement, RPMG shall pay Producer for its corn oil in accordance with the terms set forth in Exhibit A.  RPMG shall use commercially reasonable efforts to make such payments to Producer on an average net ten (10) days.

		
	(b)
	RPMG Commission.  Producer shall pay RPMG commissions equal to *** each pound of corn oil sold to third party end purchasers (each, an “End Customer”). 

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

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

		
	(d)
	Late Payments.  Overdue amounts not disputed in good faith payable to either Party shall be subject to late payment fees equal to interest accrued on such amounts at the maximum rate permitted by applicable law.

		
	(e)
	No Warranty as to Prices.  RPMG shall market Producer’s corn oil using commercially reasonable efforts and the same standards it uses to market the corn oil production of third parties for whom RPMG provides corn oil marketing services.  RPMG shall endeavor to (i) maximize the corn oil price and minimize freight and other costs relevant to corn oil sales and (ii) achieve the best available return to Producer, subject to relevant market conditions.  Producer acknowledges that RPMG makes no representations, guarantees or warranties of any nature whatsoever as to the prices at which it SHALL be able to sell PRODUCER’S CORN OIL TO END CUSTOMERS.

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

		
	(g)
	Audit Rights.  Within ninety (90) days following the end of RPMG’s fiscal year end, Producer shall give written notice to RPMG of its desire to conduct an audit of its corn oil payments to Producer for the preceding year and RPMG shall provide reasonable access to all financial information necessary to complete such audit. The audit shall be conducted by an accounting firm agreeable to both Parties and shall be completed within forty-five (45) days after the completion of RPMG’s annual audit, but no later than one hundred and fifty (150) days following RPMG’s fiscal year end.  The cost of the audit shall be the responsibility of Producer unless the auditor determines that RPMG underpaid Producer by more than three percent (3%) for the period audited, in which case RPMG shall pay the cost of the audit.  If the auditor determines that RPMG underpaid Producer, RPMG shall promptly pay such underpayment to Producer and if the auditor determines that RPMG overpaid Producer, Producer shall promptly pay the overpayment to RPMG.  The determination of the auditor shall be final and binding on both Parties.  If Producer fails to exercise its right to audit as provided in this Section 2(g) for any year, it shall be deemed to have waived any rights to dispute payments made to Producer for that year.

		
	3.
	Scheduled Production 

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

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

		
	(c)
	Additional Production Notices.  Producer shall notify RPMG of anticipated production downtime or disruption in corn oil availability at least one (1) month in advance of such outage.  Producer shall timely inform RPMG of daily inventories, plant shutdowns, daily production projections, and any other information (i) to facilitate RPMG’s performance of the Agreement or (ii) that may have a material adverse effect on RPMG’s ability to perform the Agreement.

		
	(d)
	RPMG Entitled to Rely on Producer Estimates and Notices.  RPMG, in marketing and selling Producer’s corn oil, is entitled to rely upon the production estimates and other notices provided by Producer, including without limitation those described in Sections 3(a), (b), and (c).  Producer’s failure to provide accurate information to facilitate RPMG’s performance of the Agreement may negatively impact RPMG’s ability to market and sell corn oil at prevailing prices.  Producer’s failure to provide accurate information to facilitate RPMG’s performance of the Agreement may be deemed by RPMG, in its sole but reasonable discretion, a material breach of the Agreement by Producer.

		
	(e)
	Sale Commitments.  From time to time during the term of this Agreement and in order to maximize the sales price of corn oil, RPMG may enter sales contracts or other agreements with End Customers for future delivery of corn oil.  In the event Producer fails to produce corn oil in accordance with the information provided to RPMG under Sections 3(a), (b), or (c) above for reasons other than Force Majeure (as defined in Section 10 herein), and as a result RPMG is required to purchase corn oil from third parties to meet previous corn oil sale commitments that are based upon such information, RPMG may charge Producer the amount (if any) that the price of such replacement corn oil exceeded the price that RPMG would have paid to Producer for the applicable corn oil under this Agreement.

		
	4.
	Logistics and Transportation

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

		
	(b)
	Loading.  RPMG shall schedule the loading and shipping of all outbound corn oil purchased hereunder, but all labor and equipment necessary to load trucks and rail cars and other associated costs shall be supplied and borne by Producer without charge to RPMG.  Producer shall handle the corn oil in a good and workmanlike manner in accordance with RPMG’s written requirements and normal industry practice.  Producer shall maintain the truck and rail loading facilities in safe operating condition in accordance with normal industry standards and shall visually inspect all trucks and rail cars to assure (i) cleanliness so as to avoid contamination, and (ii) that such trucks and railcars are in a condition suitable for transporting the corn oil.  RPMG and RPMG’s agents shall have adequate access to the Ethanol Facility 

to load Producer’s corn oil on an industry standard basis that allows RPMG to economically market Producer’s corn oil. RPMG’s employees shall follow all reasonable safety rules and procedures promulgated by Producer and provided to RPMG reasonably in advance and in writing.  Producer shall supply product description tags, certificates of analysis, bills of lading and/or material safety data sheets that are applicable to all shipments.  In the event that Producer fails to provide the labor, equipment and facilities necessary to meet RPMG’s loading schedule, Producer shall be responsible for all costs and expenses, including without limitation actual demurrage and wait time, incurred by RPMG resulting from or arising in connection with Producer’s failure to do so.  

		
	(c)
	Transportation and Certain Transportation Costs.  RPMG shall perform certain logistics functions for Producer, including the arranging of rail and truck freight, inventory management, contract management, bills of lading, and scheduling pick-up appointments.  RPMG shall determine the method of transporting corn oil to End Customers.  Notwithstanding any provision to the contrary herein, Producer shall be solely responsible for any damage to any trucks, railcars, equipment, or vessels caused by acts or omissions of Producer and its consignees.  All truck freight charges and rail tariff rate charges shall be billed directly to RPMG and, as set forth in Exhibit A, be recouped by RPMG from the proceeds of RPMG’s sales of corn oil to End Customers.  Notwithstanding the foregoing, rail cars required to transport the corn oil will be leased directly by Producer.  If requested in writing by Producer, RPMG will make lease payments for such rail cars on behalf of Producer, and in such event RPMG shall recoup lease payments from the proceeds of RPMG’s sales of corn oil to End Customers. 

		
	(d)
	Weight.  The quantity of corn oil delivered to RPMG at the Ethanol Facility shall be established by weight certificates obtained from Producer’s scales or from such other scales as the Parties shall mutually agree, which are certified as of the time of weighing and which comply with all applicable laws, rules and regulations. Producer shall provide RPMG with a fax/emailed copy of the outbound weight certificates on a daily basis and, except as otherwise expressly agreed upon, such outbound weight certificates shall be determinative of the quantity of corn oil for which RPMG is obligated to pay Producer pursuant to this Agreement. 

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

Corn Oil ***
		
	5.
	Specifications; Quality.  

		
	(a)
	Corn oil Specifications.  Producer covenants that it shall produce corn oil that, upon delivery to RPMG at the Ethanol Facility, meets the respective specifications (“Specifications”) set forth in Exhibit B and such other specifications that may be, from time-to-time, promulgated by the industry for corn oil.  RPMG shall have the right to test each shipment of corn oil to ascertain that the Specifications are being met.  If the corn oil provided by Producer to RPMG is shown, by independent testing or analysis of a representative sample or samples taken consistent with industry standards, to not meet the Specifications through no fault of RPMG or any third party engaged by RPMG, then RPMG may, in its sole discretion, (i) reject such corn oil and require Producer to promptly replace such non-conforming corn oil with corn oil 

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

that complies with the Specifications, or (ii) accept such corn oil for marketing and, if necessary, adjust the price to reflect the inferior quality, as provided in Exhibit A.  Payment and acceptance of delivery by RPMG shall not waive RPMG’s rights if corn oil does not comply with the terms of this Agreement, including the Specifications.
		
	(b)
	Trade Rules.  This Agreement shall be governed by the then-current Feed Trade Rules of the National Grain and Feed Association (the “Trade Rules”), unless otherwise specified.  In the event the Trade Rules and the terms and conditions of this Agreement conflict, this Agreement shall control.

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

		
	(d)
	Regulatory Seizure.  Should any corn oil provided by Producer to RPMG hereunder be seized or condemned by any federal or state department or agency as a result of its failure to conform to any applicable law, rule or regulation prior to delivery to an End Customer, such seizure or condemnation shall operate as a rejection by RPMG of the goods seized or condemned and RPMG shall not be obligated to offer any defense in connection with such seizure or condemnation.  When such rejection occurs, RPMG shall deliver written notice to Producer within a reasonable time of the rejection and identify the deficiency that resulted in such rejection.  In addition to other obligations under this Agreement or at law, Producer shall reimburse RPMG for all out-of-pocket costs reasonably incurred by RPMG in storing, transporting, returning and disposing of the rejected goods in accordance with this Agreement.

		
	(e)
	Sampling.  Producer shall take one representative origin sample (pint size) from each lot of the corn oil before it leaves the Ethanol Facility (each, a “Sample”).  RPMG shall be entitled to witness the taking of Sample.   Producer shall label Sample to indicate the applicable corn oil lot numbers, date of shipment, and the truck or railcar number.    Producer shall send half of Sample to RPMG promptly upon RPMG’s request.  Producer may request that RPMG test results be provided to it at any time after the tests are completed.  Producer shall retain corn oil Sample for no less than three (3) months or any longer period required by law.  If RPMG knows or reasonably suspects that any corn oil produced by Producer at the Ethanol Facility is not in compliance with the terms of this Agreement, then RPMG may obtain independent laboratory tests of such corn oil, and, if such corn oil is found not to be in compliance with the terms of this Agreement, Producer shall, in addition to its other obligations hereunder, pay all such testing costs.

		
	6.
	Term and Termination  

		
	(a)
	Term.  This Agreement shall have an initial term of ***, commencing on the Effective Date.  This Agreement shall be automatically extended for an additional *** term following the end 

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

of the initial term and any renewal term unless either Party gives written notice to the other of non-extension not less than *** days before the termination of the initial term or the then-current renewal term.  
		
	(b)
	Producer Termination Right.  Producer may immediately terminate this Agreement upon written notice to RPMG if RPMG fails on three (3) separate occasions within any 12-month period to purchase corn oil or to market corn oil under circumstances where such breach or failure is not excused by this Agreement.    

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

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

		
	7.
	Indemnification; Limitation on Liability

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

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

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

		
	(d)
	Limitation on Liability.  NEITHER PARTY MAKES ANY GUARANTEE, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROFIT, 

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

OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS HEREUNDER.  IN NOT EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR PUNITIVE OR EXEMPLARY DAMAGES OR FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.  EXCEPTING FOR A BREACH OF ITS NONDISCLOSURE OBLIGATIONS OR PERFORMANCE OF ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, RPMG’S AGGREGATE LIABILITY TO PRODUCER SHALL IN NO EVENT EXCEED THE AMOUNT PAID BY PRODUCER TO RPMG UNDER THIS AGREEMENT.
		
	8.
	Insurance.  During the term of this Agreement, each party shall maintain insurance coverage that is standard for a company of its type and size that is engaged in the production and/or selling of corn oil.  At a minimum, each party’s insurance coverage shall include:  (i) comprehensive general product and public liability insurance, with liability limits of at least $5 million in the aggregate; (ii) property and casualty insurance adequately insuring its facilities and its other assets against theft, damage and destruction on a replacement cost basis; and (iii) workers’ compensation insurance to the extent required by law.  RPMG, or Producer, as the case may be, shall be added as a loss payee under the comprehensive general product and public liability insurance policy and the property and casualty insurance policy.  In relation to insurance requirements on the corn oil leased railcars, (a) the Producer will be responsible for the liability insurance on the corn oil leased railcars in the form and amount as required by the railcar lessor’s contract, or at a minimum in the amounts required by this Article 8 and (b) RPMG will carry property/physical damage insurance for the corn oil railcars for loss or destruction, but will not be responsible for the insurance deductible, maintenances (scheduled or otherwise), including normal wear and tear related to such corn oil railcars.  The Producer will be listed as a Loss Payee on RPMG’s Rolling Stock Policy in relation to the corn oil leased railcars.  A party shall not change its insurance coverage during the term of this Agreement, except to increase it or enhance it, without the prior written consent of the other Party which consent shall not be unreasonably withheld.

		
	9.
	Confidentiality

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

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

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

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

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

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

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

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

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

		
	(iv)  
	the receiving Party is compelled to disclose or deliver in response to a law, regulation, or governmental or court order (to the least extent necessary to comply with such order), provided that the receiving Party notifies the disclosing Party promptly after receiving such order to give the disclosing Party sufficient time to contest such order and/or to seek a protective order.

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

		
	(f) 
	Injunctive Relief for Breach.  The receiving Party acknowledges that monetary damages are an inadequate remedy at law for unauthorized disclosure or use of Confidential Information, and that the disclosing Party may be entitled, in addition to all other rights or remedies in law and equity, to obtain injunctive or other equitable relief, without the necessity of posting bond in connection therewith.  Any action to seek injunctive or other equitable relief shall not be subject to the Dispute Resolution provision in Section 11 herein to the extent that such relief cannot be obtained through NGFA arbitration.

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

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

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

		
	(b)
	If negotiations pursuant to Section 11(a) are unsuccessful, the matter shall promptly be submitted by either Party to arbitration in accordance with NGFA® ARBITRATION OF DISPUTES: The parties to this contract agree that the sole remedy for resolution of any and all disagreements or disputes arising under or related to this contract shall be through arbitration proceedings before the National Grain and Feed Association (NGFA) pursuant to the NGFA® Arbitration Rules. The decision and award determined through such arbitration shall be final and binding upon the Buyer and Seller.  Judgment upon the arbitration award may be entered and enforced in any court having jurisdiction thereof. (Copies of the NGFA® Arbitration Rules are available from the National Grain and Feed Association, 1250 Eye Street, N.W., Suite 1003, Washington, D.C. 20005; Telephone: 202-289-0873; Website: http://www.ngfa.org). If the Parties reach agreement pertaining to any dispute pursuant to the procedures set forth in this Section 11, such agreement shall be reduced to writing, signed by authorized representatives of each Party, and shall be final and binding upon the Parties.

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

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

		
	To RPMG:
	RPMG, Inc.

1157 Valley Park Drive, Suite 100
Shakopee, MN 55379
Fax: 952-465-3222

		
	To Producer:
	Highwater Ethanol, LLC

24500 US Hwy 14 
PO Box 96
Lamberton, MN 56152
Fax: 507-752-6162

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

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

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

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

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

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

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

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

		
	(j)
	Additional Rules of Interpretation.

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

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

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

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

By: /s/ Douglas E. Punke     
Name: Douglas E. Punke        
Its (title):     CEO                    

PRODUCER:
HIGHWATER ETHANOL, LLC

By:  /s/ Brian Kletscher        
Name: Brian Kletscher        
Its (title):     CEO                      

EXHIBIT  A
Terms Relating to Payment and Commission Calculation
RPMG shall pay Producer for all Standard-Grade and Non-Standard Grade corn oil loaded into railcars and trucks and weighed at the Ethanol Facility for shipment to End Customers an amount equal to *** of the estimated F.O.B. Ethanol Facility Price per pound, with RPMG being entitled to retain its commission, with settlement weights as described in Section 4(d) of the Agreement. After month-end is completed and any differences will be reconciled, RPMG will make the final payment to the Producer for corn oil shipped during the month.
“Accessorial Charges” shall mean charges imposed by third parties for the off-loading, movement and storage of Producer’s corn oil, including without limitation taxes, tonnage taxes, hard-to-unload truck or railcar charges/transloading charges, railcar repair charges, fuel surcharges, storage charges, demurrage charges, product shrinkage, detention charges, switching, and weighing charges (but excluding Tariff Freight Costs).  Neither Party shall be responsible for demurrage charges caused solely by the negligence or willful misconduct of the other Party.
“Delivered Sale Price” shall mean sales dollars received by RPMG for Producer’s corn oil, inclusive of tariff freight, as evidenced by RPMG’s invoices to End Customers.
“F.O.B. Ethanol Facility Price” shall mean the F.O.B. sale price equivalent net of applicable deductions and costs as described in this Agreement, including without limitation Accessorial Charges and Tariff Freight Costs (or, if applicable, the Delivered Sales Price net of applicable deductions and costs as described in this Agreement, including without limitation Accessorial Charges and Tariff Freight Costs) that RPMG invoices End Customers.
“Tariff Freight Costs” shall mean freight and related costs incurred by RPMG to transport Producer’s corn oil.
“Standard-Grade” shall mean corn oil that meet the Specifications set forth in this Agreement.
“Non-Standard-Grade” shall mean corn oil that fail to meet the Specifications set forth in this Agreement, but which RPMG nonetheless accepts for marketing under this Agreement.

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

EXHIBIT B
Corn Oil Specifications
Producer covenants that all corn oil shall, upon delivery to RPMG at the Ethanol Facility, conform to the following Specification:
	
			
	Component
	    Maximum %
	Minimum %

	Moisture; wt%
	***
	 

	MIU
	***
	 

	FFA; wt%
	***
	 

	Unsaponifiable Matter
	***
	 

	Insoluable Matter
	***
	 

	Total Fatty Acids
	 
	***

	 
	 
	 

	 
	 
	 

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

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

NATURAL GAS SERVICE AGREEMENT
This Natural Gas Service Agreement ("Agreement") is entered into as of the 10th day of August, 2018, and is between CenterPoint Energy Resources Corp., d.b.a. CenterPoint Energy Minnesota Gas, a Delaware corporation ("CenterPoint") and Highwater Ethanol, LLC, a Minnesota limited liability company ("Customer").
RECITALS
WHEREAS, Customer is a large industrial natural gas user who has shown that it can reasonably acquire alternatives to using natural gas from CenterPoint' distribution system and obtain energy supplies from other suppliers to its facility at 24500 US Hwy 14, Lamberton, Minnesota, 56152 ("Customer Facility"). As a result, this Agreement will be applied to all natural gas service provided at the Customer Facility through CenterPoint's meter (the "Delivery Point") number M20090288001 for current account number 7826151. 
WHEREAS, CenterPoint acknowledges Customer's competitive alternatives at Customer's Facility and agrees to deliver Customer Facility's full natural gas requirements pursuant to the terms of this Agreement for discounted delivery service ("Transportation Service") under the applicable Large Volume Firm Transportation Service Tariff, the Large Commercial/Industrial Credit Policy Rider, the Daily Balancing Service Rider Tariff, the Market Rate Service Rider Tariff, or any applicable superseding Tariff, as filed with the Minnesota Public Utilities Commission all hereinafter collectively referred to as ("Tariff(s)" or (Applicable Tariff(s)").
NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter provided, Customer and CenterPoint do hereby agree, as follows:
1.Distribution System. During the term of this Agreement, CenterPoint will operate and maintain its pipeline to deliver natural gas from the HIGHWATER ETHANOL #1 town border station ("TBS") to the Delivery Point as currently configured ("Distribution System") serving the Customer Facility. The Distribution System is expected to be capable of delivering at least 630 thousand cubic feet per hour ("MCFH") of natural gas at 60 pounds per square inch gauge ("PSIG") regulated delivery pressure, provided Northern Natural Gas Company supplies 630 MCFH and 175 PSIG delivery pressure or greater to the TBS. The TBS is currently limited to providing 315 MCFH capacity at 125 PSIG. Any request by Customer to increase the natural gas volume or pressure delivered by CenterPoint, which would require CenterPoint and/or Northern Natural Gas Company to construct new facilities or modify its existing Distribution System to serve the increased natural gas volume or pressure, shall be subject to future negotiations.
2.Purchase of Delivery Service and Net Monthly Rate.
(a)Beginning November 1, 2019 and through the term of this Agreement, Customer agrees that all of its natural gas requirements at the Customer Facility will be delivered through CenterPoint's Distribution System. Such natural gas will be supplied by Customer at HIGHWATER ETHANOL #1 town border station ("TBS") for delivery by CenterPoint under applicable Transportation Service Tariffs.
(b)Beginning November 1, 2019 through October 31, 2020, and for each subsequent 12 month period thereafter ("Contract Year") through the term of this Agreement, for all natural gas volumes delivered through CenterPoint's Distribution System to the Customer Facility, Customer agrees to pay Commodity and Demand Delivery Charges as follows:
(i)     Customer will pay Commodity Delivery Charges of  *** per Dekatherm ("Dth") plus Trackers, as defined in Section 2(c) below for Transportation Service on all natural gas volumes delivered during a Contract Year. Currently, there are no Trackers applicable to Customer for service under this Contract;
(ii)     Customer will pay monthly Demand Delivery Charges of *** on a firm demand volume equal to 5,000 Dth/day;

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

Delivery Charges are for delivery of natural gas through CenterPoint's Distribution System from the TBS to the Customer Facility only. CenterPoint shall not be responsible for costs of gas, interstate pipeline transmission costs, taxes, franchise fees or other charges that may be imposed by others. Customer shall also pay the monthly basic charge as set forth in the then Applicable Tariff(s) which is currently $900.00.
(c)    The Minnesota Public Utilities Commission ("MPUC"), under MPUC Order, allows specific cost recovery mechanisms in order to better match expenses and rate recovery. Under these mechanisms ("Trackers"), the MPUC allows specific actual costs for utilities (e.g., Conservation Improvement Program expenses) to be deferred and sets an annual value for those costs to be recovered in rates. The actual costs and the value recovered in rates are matched, or "tracked", in specific balance sheet accounts. Any mismatch of actual costs and rate recovery is trued-up at a later date. The Trackers shall equal the amount allowed to be recovered in rates during any given month. Currently, there are no Trackers applicable to Customer for service under this Contract.
(d)     Delivery Charges shall not be less than the Minimum nor greater than the Maximum Delivery Charge in CenterPoint's Market Rate Service Rider Tariff, or its superseding Tariff.
(e)    Beginning November 1, 2019, Customer agrees to purchase the equivalent annual minimum volumes ("Minimum Volume Requirement") of 1,400,000 Dth during each Contract Year from CenterPoint. If the Minimum Volume Requirement applicable a Contract Year is not met for any reason, CenterPoint may immediately invoice Customer for an amount equal to the difference between the Minimum Volume Requirement of 1,400,000 Dth and the volume of natural gas actually taken by Customer at the Delivery Point during said Contract Year multiplied ***. Such payment shall not be used as a credit for gas consumed in subsequent years.
3.    Term. This Agreement shall become effective for a primary term beginning November 1, 2019 and ending October 31, 2029, and will renew for additional 5 year terms thereafter unless terminated by either party with a minimum of twelve (12) months written notice to the other party prior to the end of the primary term or any succeeding term. If Customer cannot renew or replace their Northern Natural Gas firm transportation contract past October 31, 2024, Customer may terminate this contract by providing CenterPoint notice at least 60 days prior to that date.
4.    Governing Law and Severability. This Agreement shall be governed by and construed according to the laws of the State of Minnesota excluding, however, any conflict of laws rule that would apply the law of another jurisdiction. If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision of this Agreement.
5.    Further Assurances. The parties will execute and deliver any and all other instruments or documents and take such other and further action as may be reasonably necessary or appropriate in order to give effect to the terms and provisions of this Agreement.
6.    Compliance with Law and Regulations. This Agreement shall be subject to all valid and applicable laws and to the applicable valid rules, regulations or orders of any regulatory agency or governmental authority having jurisdiction over the parties or this Agreement. The parties shall be entitled to regard all applicable laws, rules and regulations (federal, state or local) as valid and may act in accordance therewith until such time as the same may be declared invalid by a final, non-appealable judgment of a court of competent jurisdiction. The parties shall at all times observe and comply with any and all applicable laws, rules and regulations (federal, state or local) in the performance of their obligations under this Agreement. CenterPoint may, at its discretion, terminate this Agreement by providing six (6) months written notice to Customer under any of the following conditions: 1) if current regulatory treatment is modified to limit recovery of revenue deficiencies attributable to flexible tariffs; or 2) if subsequent regulatory action requires CenterPoint to collect, or imputes for ratemaking purposes, a rate higher than provided under this Agreement. The terms and conditions of this Agreement will remain in effect during the six (6) month notice period.
7.    Events of Default by Customer. The occurrence of any of the following shall constitute an "Event of Default" by Customer:
(a)    Any representation or warranty furnished by Customer in this Agreement is false or misleading in any material respect when made;
(b)    Any payment required is not paid when due, however, any payment default, when paid in full, plus late fees, within CenterPoint's 30 days written notice of default shall be considered cured;
(c)    Customer fails to perform any of its required duties or obligations contemplated by this Agreement and no specific remedy is articulated; or

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

(d)    An order for relief shall be entered in any Federal bankruptcy proceeding in which Customer is the debtor; bankruptcy, receivership, insolvency, reorganization, relief, dissolution, liquidation or similar proceedings shall be instituted by or against Customer or all or any part of its property under the Federal Bankruptcy Code or any other law of the United States or any state of competent jurisdiction, or Customer makes an assignment for the benefit of creditors.
8.    Events of Default by CenterPoint. The occurrence of any of the following shall constitute an "Event of Default" by CenterPoint:
(a)    Any representation or warranty furnished by CenterPoint in this Agreement is false or misleading in any material respect when made;
(b)    CenterPoint fails to perform any of its required duties or obligations contemplated by this Agreement and no specific remedy is articulated; or
(c)    An order for relief shall be entered in any Federal bankruptcy proceeding in which CenterPoint is the debtor; bankruptcy, receivership, insolvency, reorganization, relief, dissolution, liquidation or similar proceedings shall be instituted by or against CenterPoint or all or any part of its property under the Federal Bankruptcy Code or any other law of the United States or any state of competent jurisdiction, or CenterPoint makes an assignment for the benefit of creditors.
9.    Remedies of CenterPoint. In case of an Event of Default by Customer not cured after 30 days written notice, CenterPoint shall have the right to:
(a)    Suspend operation until Customer shall cure such default;
(b)    Exercise all remedies available at law or at equity or other appropriate proceedings including bringing an action or actions from time to time for recover), of amounts due and unpaid by Customer, and/or for damages which shall include all costs and expenses reasonably incurred in the exercise of any remedy (including reasonable attorneys' fees), and/or specific performance; and
(c)    Terminate this Agreement.
No waiver of any default shall be construed as a waiver of any subsequent default and the failure to exercise any right or remedy hereunder shall not waive the right to exercise such right or remedy thereafter.
10.    Remedies of Customer. In case of an Event of Default by CenterPoint, which has not been cured after 30 days written notice, Customer shall have the right to:
(a)    Terminate this Agreement; and
(b)    Exercise all remedies available at law or at equity or other appropriate proceedings including bringing an action or actions from time to time for recovery of amounts due and unpaid by CenterPoint, and/or for damages which shall include all costs and expenses reasonably incurred in the exercise of any remedy (including reasonable attorneys' fees), and/or specific performance.
No waiver of any default shall be construed as a waiver of any subsequent default and the failure to exercise any right or remedy hereunder shall not waive the right to exercise such right or remedy thereafter.
11.    Force Majeure. Neither party will be liable for its failure to perform under this Agreement if such failure arises out of causes beyond the control and without the fault or negligence of such party. Such causes may include, but are not limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuation of the affected area, floods, washouts, explosions, breakage or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather related events affecting an entire geographic region, such as low temperatures which cause freezing or failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (iv) acts of others such as strikes, lockouts or other industrial disturbances, riots, sabotage, insurrections or wars; and (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation, or policy having the effect of law promulgated by a governmental authority having jurisdiction. The party whose performance is prevented by Force Majeure must provide immediate notice to the other party. Initial notice may be given orally; however, detailed written notification of the event or occurrence is required within ten (10) days. The party claiming a Force Majeure delay must use its best efforts to limit the delay's duration and adverse effects and to promptly resume performance.
12.    Waiver of Liability. Customer will indemnify, defend and hold CenterPoint harmless from all claims for damages, including any special, incidental, or consequential damages, resulting from Customer's use of natural gas service or any interruption of natural gas service.

13.    Notices. Any notice given by a party hereto upon another party hereto in connection with this Agreement must be in writing and shall be sent to such other party at its delivery address for notice set for below (i) by regular U.S. mail, private delivery service or recognized overnight courier, or (ii) by facsimile or email transmission.

Delivery address
for notice to Customer:        Highwater Ethanol, LLC
Attention: Brian Kletscher
24500 US Highway 14
Lamberton, MN 56152
Telephone No: (507) 752-6160
Email: brian.kletscher@highwaterethanol.com 

Delivery address
for notice to CenterPoint:    CenterPoint Energy Resources Corp.
Attention: Contract Administration
P.O. Box 2628
Houston, TX 77252
Telephone No.: 713-207-2911
FAX No.: 713-207-0854
Email: cerccontracts@centerpointenergy.com

with a copy to:

CenterPoint Energy Resources Corp.
Attention: Philip Reeves, Energy Sales & Transportation Services Director
1111 Louisiana - 21st Floor
                 Houston, TX 77252-2628
Telephone No.: 713-207-5655
FAX No.: 713-207-0854
Email: philip.reeves@centerpointenergy.com
 
Any party hereto may designate a different delivery address for notice to such party by (i) giving notice thereof to the other party hereto; or (ii) designating a different delivery address associated with a specific Subject Property on the respective Facility Request Confirmation.
14.    Assignment and Succession. This Agreement will not be assignable, in whole or in part, by either party without the prior written consent of the other party. Such written approval shall not be unreasonably withheld. Notwithstanding the foregoing, Customer may, without CenterPoint's consent, assign its rights and obligations under this Agreement to any Company affiliate or corporation or other person or business entity to which Company may sell or transfer all or substantially all of its assets, provided such acquiring entity expressly agrees to fully assume all responsibilities, liabilities and obligations of Customer to CenterPoint under this Agreement. In addition, CenterPoint may, without Customer's consent, assign its rights and obligations under this Agreement to any affiliate or corporation or other person or business entity to which CenterPoint may sell or transfer all or substantially all of its assets, provided such acquiring entity expressly agrees to fully assume all responsibilities, liabilities and obligations of CenterPoint to Customer under this Agreement. CenterPoint may also assign or pledge the accounts receivable from Customer under this Agreement to its lender(s) and such lender(s) shall not become obligated hereunder as a result of such assignment or pledge. The parties agree that this contract will bind the successor of either party.
15.    Representations and Warranties. Each party warrants and represents to the other that:
(a)It has all requisite power and authority to execute and deliver this Agreement and perform its obligations hereunder;

(b)Its execution, delivery, and performance of this Agreement have been duly authorized by, or are in accordance with, its organizational instruments; this Agreement has been duly executed and delivered for the respective party by the signatories so authorized; and this Agreement constitutes its legal, valid and binding obligation;
(c)Its execution, delivery, and performance of this Agreement will not result in a breach or violation of, or constitute a default under, any agreement, lease or instrument to which it is a party or by which it or its properties may be bound or affected; and
(d)It has not received any notice, nor to the best of its knowledge is there pending or threatened notice, of any violation of any applicable laws, ordinances, regulations, rules, decrees, awards, permits or orders which may have a material effect on its ability to perform hereunder.
16.    Confidentiality. Except as required by law or regulatory requirement, Customer, its agents or assigns, and CenterPoint shall keep the terms of this Agreement confidential and shall not disclose them to anyone, including other affiliated companies or entities, without the written consent of the other party. To the extent disclosure is required by law or regulatory requirement, Customer and CenterPoint agree to limit disclosure to the extent permissible and to attempt to maintain the confidentiality of this Agreement as to other parties.
17.    Entire Agreement, Amendment and Interpretation.  This Agreement, including the Applicable Tariff(s), represents the entire agreement by and between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties pertaining to the subject matter hereof. This Agreement may not be amended except by written agreement duly executed by the parties hereto. This Agreement shall not be construed as creating any third party beneficiaries hereof. The descriptive headings of the Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references in this Agreement to Sections, subsections and other subdivisions refer to the corresponding Sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. No waiver of any provision, breach or remedy under this Agreement shall be deemed to be or otherwise constitute a waiver of any other provision, breach or remedy under this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all of which together shall constitute one and the same instrument. A facsimile counterpart of this Agreement shall be sufficient to bind a party hereto to the same extent as an original.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first written above.

CENTERPOINT ENERGY RESOURCES CORP.

       By:    /s/ Brad A. Tutunjian
(signature)
                            
Brad A. Tutunjian
Vice President - Regional Operations

                    
HIGHWATER ETHANOL, LLC

      By:    /s/ Brian Kletscher
(signature)

Brian Kletscher, CEO
President

SIGNATURE PAGE TO NATURAL GAS SERVICE AGREEMENT BY AND BETWEEN
CENTERPOINT ENERGY RESOURCES CORP. AND HIGHWATER ETHANOL, LLC

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