Document:

EXCLUSIVE
LICENSE AND DISTRIBUTION AGREEMENT

 

 

THIS AGREEMENT
made as of the 22 of January 2014.

 

 

BETWEEN:

 

ME
RESOURCE CORP., a corporation incorporated under the laws of the Province of British Columbia and having its head office at Suite
900 555 Burrard Street, Vancouver, British Columbia, Canada V7X 1M8.

 

(hereinafter
called “MEC”)

 

OF
THE FIRST PART

 

AND

 

WELL
POWER INC., a company incorporated under the laws of the NEVADA, and having its head office at No. 16D, Jalan 6/5 Taman Komersial,
Pandan Indah, Malaysia

 

(hereinafter
called the “WPI”)

 

OF
THE SECOND PART

 

 

WHEREAS
MEC is the developer and manufacturer of the products listed and described in technical detail in Schedule “A”
attached hereto (the “Products”);

 

WHEREAS,
MEC and WPI understand that prior to exclusivity being granted to WPI, a full-scale pilot project will have to be established
within the prescribed Territory, at a site determined by WPI and agreed upon by all parties.

AND WHEREAS,
WPI wishes to obtain from MEC the exclusive right to distribute and deploy the Products in Texas and first right of refusal
to additional territories within the United States for oil and gas producers, operators, and service providers (hereto after referred
to as the “Territory”) on the terms and subject to the conditions herein contained.

  

NOW THEREFORE
THIS AGREEMENT WITNESSES that in consideration of the respective covenants and agreements of the parties contained herein,
the sum of one dollar now paid by each party hereto to each of the other parties hereto, and other good and valuable consideration
(the receipt and sufficiency of which hereby acknowledged by each of the parties hereto), it is agreed as follows:

  

		1.	Appointment
                                         of Distribution

 

		1.1.	MEC
                                         appoints WPI as its exclusive distributor in the Territory for the Products upon the
                                         terms and conditions herein set out.

 

		1.2.	The
                                         WPI hereby accepts its appointment as its exclusive distributor in the Territory and
                                         agrees to purchase the Products from MEC in accordance with the provisions herein set
                                         out.

 

		1.3.	As
                                         the exclusive distributor, WPI agrees to use its best commercial efforts to promote the
                                         Products in the Territory.

 

		2.	Exclusivity
                                         of Appointment

 

		2.1	A
                                         $400,000 non-refundable license payment for the exclusive distribution rights to distribute
                                         or deploy the Products in the Territory, except as herein provided. The fee will be used
                                         towards the engineering and development of a Territory specific full-scale pilot project.
                                         The payment is due by two installments i) $100,000 within thirty (30) days after the
                                         filing of the Super 8-K with the US Securities and Exchange Commission and ii) balance
                                         of $300,000 within ninety (90) days after the filing of the Super 8-K with the US Securities
                                         and Exchange Commission. WRI understands the Products are in the development stage and
                                         MEC does not accept liabilities or obligations to refund any portion of these payments.

 

		2.2	Providing
                                         WPI has paid the license payment and has not breached any of the provisions of this Agreement
                                         and providing further that WPI meets its purchase targets of two units in the first year
                                         and four units per annum in the second year and in each subsequent year (after ramp up
                                         period of one year) and diligently and faithfully carries out its duties and obligations
                                         imposed on it by this Agreement. WPI, shall during the duration of this Agreement will
                                         be the exclusive Distributor of MEC to deploy the Products within the Territory and MEC
                                         shall not appoint any other sales or services representative nor otherwise distribute
                                         or deploy the Products in the Territory, except as herein provided.

 

    	 

    	 

    

		3.	WPIs
                                         Customers

 

		3.1	WPI
                                         shall be restricted to distribution and deployment of MEC’s Products in the Territory
                                         to oil and gas producers, oil and gas operators, oil and gas service providers.

 

 

		4.	Status
                                         of WPI

 

		4.1	The
                                         status of WPI shall be that of an independent contractor and WPI shall have no authority
                                         to assume or create any obligation whatsoever, expressed or implied, in the name of MEC,
                                         nor to bind MEC in any manner whatsoever. WPI shall have no authority hereunder to enter
                                         into any contract of sale or employment on behalf of MEC, nor to endorse MEC’s
                                         cheques, nor to make allowances or adjustments on MEC’s accounts for the return
                                         of merchandise, except pursuant to the written authorization of MEC.

 

		5.	Sub-WPIs,
                                         Assignment

 

		5.1.1	WPI
                                         may not assign the Distribution rights under this agreement to a third party, nor may
                                         WPI appoint a sub-WPI without the prior written consent of MEC.

 

		6.	Expenses

 

		6.1	All
                                         expenses in connection with WPI’s performance of this Agreement and its activities
                                         as distributor, sales and services representative for MEC, including but not limited
                                         to travel, automobile, salaries, supplies, transportation, meals, lodging, insurance,
                                         advertising, sales promotion and taxes shall be borne by WPI and WPI shall be solely
                                         responsible for the payment thereof.

 

		7.	Purchase
                                         and Sale of the Products

 

		7.1	Subject
                                         to and in accordance with the terms and conditions of this Agreement, MEC hereby agrees
                                         to deploy to WPI, and WPI agrees to buy from MEC, the Products at a price (the “Purchase
                                         Price”) as set forth in Schedule “A” attached hereto.

 

		7.2	The
                                         prices set out in Schedule “A” hereto, shall remain in full force and effect
                                         from the date of the execution of this Agreement until and unless written notice is provided
                                         to WPI by MEC, setting out an amended price list. Any price increase provided by MEC
                                         to WPI shall take effect ninety (90) days from the date the WPI is deemed to have received
                                         the Notice as provided herein. Any reduction in price shall be deemed to be effective
                                         immediately and WPI shall have the benefit of the lower price.

 

		7.3	All
                                         prices for the Products referred to herein are payable by WPI to MEC in the currency
                                         of Canada.

 

		8.	Shipping
                                         and Payment Arrangements

 

		8.1	All
                                         purchases of Product by WPI shall be made by Purchase Orders issued by WPI directly to
                                         MEC. The Products will be shipped to the destination stated on Purchase Orders by MEC
                                         upon receipt by MEC of the purchase order. The Products shall be sold F.O.B. MEC’s
                                         warehouse from which the shipment is made, where title and risk shall pass to WPI. All
                                         costs of shipping to the destination stipulated on the Purchase Orders shall be to the
                                         account of the WPI.

 

		8.2	Terms
                                         of payment will be thirty percent (30%) deposit with the acceptance of Purchase Order
                                         and the balance net sixty (60) days from the date of MEC’s invoices. MEC shall
                                         not date any invoice earlier than the date of shipment. WPI will pay interest on overdue
                                         accounts at a rate of one percent (1%) per month (twelve per cent (12%) per annum). On
                                         any accounts overdue in excess of sixty days (60) days WPI will pay interest at a rate
                                         of two percent (2%) per month beyond the sixty days.

 

 

		9.	Improvement
                                         of Product

 

		9.1	MEC
                                         shall be continuously increasing the efficiency of the Products and will pass on all
                                         incremental improvements to WPI.

 

		10.	WPI
                                         Training

 

		10.1	MEC
                                         shall use its best commercial efforts to educate, train and inform WPI about the Products
                                         so that WPI may fulfill its obligations under this Agreement. The training shall take
                                         place at the premises of MEC, or, alternatively, at WPIs expense, at a location mutually
                                         agreed upon by the parties.

 

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		11.	Obligations
                                         of MEC

 

MEC
agrees that during the term of this Agreement, it shall:

 

		(a)	Sell
                                         to WPI, at a Purchase Price, such quantities of the Products as are ordered by WPI from
                                         time to time;

 

		(b)	Deliver
                                         all orders of the Products ordered by WPI, upon the terms otherwise set out herein, within
                                         and not later than sixty (60) days from the date of the receipt by MEC of the said order;

 

		(c)	Refund
                                         or credit to the account of WPI the amounts paid or owing by WPI for any Products which
                                         are defective or faulty so as to be unsalable and which WPI returns to MEC, provided
                                         that the fault or defect does not arise as a result of the action of WPI or breach of
                                         WPI’s obligations under this Agreement;

 

		(d)	Use
                                         its best commercial efforts to maintain or improve the quality and standards of the Products;

 

		(e)	Provide
                                         toWPI the resources so that WPI may print and produce sales promotional material, at
                                         WPI’s expense.

 

		(f)	Assist
                                         WPI by all means in deploying and distributing the Products to customers, including,
                                         without limitation, coordinating sales programmes with WPI.

 

12.Responsibilities
of WPI

 

		12.1	WPI
                                         agrees that during the term of this Agreement, it shall:

 

		(a)	Comply
                                         with all applicable laws in the Territory relating to the advertising and distribution
                                         of the Products and with the terms and conditions of this Agreement;

 

		(b)	Devote
                                         its best commercial efforts to the performance of its obligations under this Agreement;

 

		(c)	Make
                                         every reasonable effort and use proper means to develop the market potential for trade
                                         in the Products, and actively solicit orders for the deployment of the Products, provided
                                         that in no event shall WPI be acquired to expend any monies on advertising or other marketing
                                         and sales techniques, except as WPI, in its sole discretion, determines appropriate;
                                         and

 

		(d)	Develop,
                                         promote and maintain with customers the goodwill and reputation of the Products.

 

		(f)	Furnish
                                         technical research services if necessary, including but not limited to reviewing and
                                         evaluating the requirements for the products and participating in the selection and designation
                                         of the proper products and specifications thereof;

 

		(g)	Furnish
                                         proper technical and operational services to all users of the Products distributed in
                                         the Territory and the performance of warranty obligations on the products in the manner
                                         specified from time to time by MEC.

 

		(h)	Maintain
                                         in the Territory suitable premises, equipment and current technical and promotional literature
                                         for the Products; and employ sufficient and suitably qualified and trained technical
                                         and other competent personnel necessary to carry out the duties of WPI under this Agreement.
                                         WPI and its personnel shall maintain a working knowledge and familiarity with the Products,
                                         including associated services and attend training sessions as appropriate to maintain
                                         such knowledge and familiarity.

 

		(i)	Keep
                                         MEC fully informed of commercial and market conditions within the Territory and of the
                                         activities of customers and competitors and regularly covers the trade industry for the
                                         purposes of furthering deployment of the Products.

 

		12.2	WPI
                                         agrees that during the term of this Agreement it shall not:

 

		(a)	Directly
                                         or indirectly distribute, deploy or solicit orders for the Products outside the Territory,
                                         except as may expressly be authorized by MEC.

 

13.Representations
and Warranties

 

		13.1	WPI
                                         acknowledges that MEC is relying upon the representations and warranties set out in this
                                         Agreement and in connection with its entering into this Agreement WPI represents and
                                         warrants as follows:

 

		(a)	WPI
                                         is a valid subsisting corporation incorporated pursuant to the laws of the Nevada;

 

		(b)	WPI
                                         has all requisite power and authority to execute and deliver this Agreement and has all
                                         necessary power and authority to perform the obligations of WPI as set out herein;

 

		(c)	the
                                         entering into of this Agreement will not result in the violation of any of the terms
                                         and provisions of any Agreement, written or oral, to which WPI may be a party; and

 

		(d)	the
                                         execution and delivery of this Agreement has been duly authorized by all necessary actions
                                         on the part of WPI and this Agreement a legal and binding obligation of WPI enforceable
                                         in accordance with its terms.

 

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		13.2	MEC
                                         acknowledges that WPI is relying upon the representations and warranties set out in this
                                         Agreement and in connection with its entering into this Agreement MEC represents and
                                         warrants as follows:

 

		(a)	MEC
                                         is a valid subsisting corporation incorporated pursuant to the laws of the Province of
                                         British Columbia;

 

		(b)	MEC
                                         has all requisite power and authority to execute and deliver this Agreement and has all
                                         necessary power and authority to perform the obligations as set out herein;

 

		(c)	the
                                         entering into of this Agreement will not result in the violation of any of the terms
                                         and provisions of any Agreement, written or oral, to which MEC may be a party;

 

		(d)	the
                                         execution and delivery of this Agreement has been duly authorized by all necessary actions
                                         on the part of MEC and this Agreement when duly executed and delivered by MEC will constitute
                                         a legal and binding obligation or MEC enforceable in accordance with its terms; and

 

		(e)	MEC
                                         is the owner of any and all certifications, patents or patents pending (the "Patents")
                                         with respect to the Products and no other person has any interest whatsoever in the Patents.

 

14. Terms
of Agreement

 

		14.1	This
                                         Agreement shall come into effect on its date of execution and shall continue in full
                                         force and effect, unless terminated earlier in accordance with the terms set out below,
                                         until the fifth (5th) anniversary of the date of execution (the "Initial
                                         Term").

 

		14.2	WPI
                                         may terminate this Agreement at any time for any reason whatsoever by providing ninety
                                         (90) days written notice to MEC, provided that prior to providing such notice, WPI shall
                                         have paid all monies owing to MEC by WPI and returned to MEC all displays for the Products
                                         and other promotional materials provided by MEC to WPI.

 

		14.3	Provided
                                         that MEC and WPI have complied with all the terms and conditions hereof, this Agreement
                                         may be renewed by the mutual consent of MEC and WPI at the completion of the Initial
                                         Term and shall continue on the same terms and conditions as contained herein for two
                                         (2) successive periods of an additional five (5) year period each.

 

		14.4	Notwithstanding
                                         the provisions contained in Section 14.01 above, the parties hereto agree that this Agreement
                                         shall immediately terminate without notice to either party upon the occurrence of any
                                         one or more of the following events:

 

		(a)	if
                                         MEC (or WPI) shall file an assignment in bankruptcy or be or become bankrupt upon the
                                         appointment of a receiver for all or substantially all of the property or assets of MEC(or
                                         WPI) or upon the making by MEC (or WPI) of any assignment or attempted assignment for
                                         the benefit of creditors or upon the institution by MEC (or WPI) of any act or proceeding
                                         for the winding up of its business or upon the sale or other disposition by MEC (or WPI)
                                         of all or substantially all of its property and assets or upon any governmental authority
                                         exercising any power or authority resulting in expropriation or, confiscation of the
                                         property of or intervention in the affairs of MEC (or WPI) in such a manner and to such
                                         an extent as to materially affect the ability of MEC(or WPI) to manufacture, promote,
                                         distribute, deploy or create a demand for the Products in the Territory. In the event
                                         that MEC (or WPI) fails to carry out and perform any of its obligations whatsoever or
                                         breaches any of its covenants whatsoever hereunder, the other party may give notice to
                                         the defaulting party specifying the nature of the default and indicating the intention
                                         of the party giving the notice to terminate this agreement effective on the last day
                                         of the month following the month in which such notice was given unless such default has
                                         been remedied by that date. In the event that the default is not remedied by the party
                                         receiving such notice on or before the thirtieth (30th) day after the giving of such
                                         notice, unless the party giving notice of the default shall give notice that the default
                                         is waived, this Agreement and WPI distributorship hereby created shall forthwith terminate
                                         as indicated in the notice.

 

		14.5	Upon
                                         termination of this Agreement:

 

		(a)	WPI
                                         shall discontinue any and all representations or implications that it is a Distributor
                                         for or is otherwise affiliated with MEC; and

 

		(b) 	MEC
                                         shall have the option to repurchase from WPI any of the Products in WPI’s inventory
                                         at the cost to WPI for such Products, less any amount than owing from WPI to MEC. Neither
                                         MEC nor the WPI shall be liable to the other by reason of the termination of this Agreement
                                         for any damages, whether direct, consequential or incidental, on account of the loss
                                         of prospective profits on anticipated sales or on account of expenditures, investments,
                                         leases or commitments in connection with the business or goodwill for the other or otherwise,
                                         arising from the termination of this Agreement.

 

15.Use
of Trade-marks

 

		15.1	With
                                         respect to the use of any of the trade-marks associated with the Products, now or at
                                         any time registered in the name of MEC (the "Trade-marks"), the parties agree
                                         as follows:

 

		(a)	all
                                         representations of any Trade-marks which WPI intends to use in any promotional materials
                                         (the "Materials”) shall be submitted to MEC for prior approval of design,
                                         colour and other details and no Materials containing any of the Trademarks shall be distributed
                                         by WPI or on behalf of WPI without the written approval of MEC; and

 

		(b)	MEC
                                         shall not withhold its approval unreasonably and, unless MEC has advised WPI in writing
                                         within three (3) business days of receipt of the Materials for approval that MEC does
                                         not approve of the use of such Materials, MEC shall be deemed to have approved of the
                                         use of such materials.

 

		15.2	WPI
                                         shall not change or vary any of the Trade-marks nor use any other Trade-marks which are
                                         similar to or substantially similar to or so nearly resembling the Trade-marks so as
                                         to be likely to cause deception or confusion to the public.

 

		15.3	Unless
                                         otherwise provided in this Agreement, WPI shall accompany any and all print use of the
                                         Trade-marks with an asterisk printed closely adjacent to each printed representation
                                         of the Trade-marks.

 

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		15.4	With
                                         respect to the use of the Trade-marks WPI agrees as follows:

 

		(a)	WPI
                                         recognizes that MEC is the owner of the Trade-marks and all the goodwill therein and
                                         agrees that the same shall remain vested in MEC both during the term of this Agreement
                                         and thereafter and that the use of the Trade-marks by WPI shall be used on behalf and
                                         for the benefit of MEC. WPI agrees not to challenge the validity or ownership of the
                                         Trade-marks and/or the goodwill therein; and

 

		(b)	any
                                         goodwill which WPI may acquire from the use of the Trade-marks shall vest in and become
                                         the absolute property of MEC and WPI undertakes and agrees at the request of this Agreement,
                                         to execute all such instruments and to do all such acts as may be necessary and desirable
                                         to vest absolutely in MEC the said goodwill.

 

16.
Non-Competition

 

		16.1	WPI
                                         hereby covenants and agrees that during the term of this Agreement, and for a period
                                         of two (2) year following the termination of this Agreement, WPI shall not, for whatever
                                         reason and with or without cause, either individually or in partnership or jointly or
                                         in conjunction with any persons, firm, association, syndicate, company, corporation or
                                         entity as principal, agent, employee, shareholder, owner, investor, partner or in any
                                         other manner whatsoever, directly or indirectly, carry on or be engaged in or be concerned
                                         with or interested in or advise, lend money to, guarantee the debts or obligations of
                                         or permit its name or any part thereof to be used or employed by any persons, firm, association,
                                         syndicate, company, corporation or entity engaged in or concerned with or interested
                                         in the business of manufacturing, producing, marketing, distributing or deploying, for
                                         wholesale or retail, any Products similar to or competitive with the Products within
                                         the Territory.

 

		16.2	WPI
                                         agrees that the remedy at law for any breach by it of the provisions hereof may be inadequate
                                         and that in the event of such breach MEC shall be entitled to make an application to
                                         the appropriate court granting MEC temporary and/or permanent injunctive relief against
                                         WPI.

 

		16.3	WPI
                                         agrees that waiver by MEC of any breach of a covenant or provision contained herein shall
                                         only be a waiver in respect of the particular breach thereof giving rise to such waiver.

 

		16.4	If
                                         WPI is in breach of any of such restrictions the running of the period of proscription
                                         shall be stayed and shall recommence upon the date WPI ceases to be in breach thereof,
                                         whether voluntarily or by injunction.

 

17.Confidential
Information

 

		17.1	WPI
                                         agrees that all information, knowledge and data of a confidential nature (“Confidential
                                         Information”) which it shall acquire or which may come to its knowledge during
                                         the term this Agreement shall at all times (both during the term of this Agreement and
                                         subsequent to the termination thereof) and for all purposes be held by WPI in confidence
                                         and WPI agrees that it shall not (both during the term of this Agreement and subsequent
                                         to the termination thereof) disclose, divulge, communicate orally, in writing or otherwise
                                         to any person or persons any Confidential Information. Notwithstanding the above, WPI
                                         shall be entitled to disclose such Confidential Information to its duly appointed Sub
                                         distributors. For the purposes hereof, “Confidential information” includes,
                                         but is not limited to information emanating from NDA, its associates, affiliates, agents
                                         or suppliers or conceived or developed by MEC concerning research, development, patents,
                                         copyright, industrial property rights, marketing plans and strategies, profits, costs,
                                         pricing and systems of procedure.

 

		17.2	Immediately
                                         following the termination of this Agreement, WPI agrees to transfer and deliver to MEC
                                         all documents, notebooks, charts, files and records containing or in referencing Confidential
                                         Information including copies, summaries, and notes in its possession or control.

 

 

		18.	Suggested
                                         Trade Prices

 

			WPI acknowledges
                                         that it is under no obligation to accept any suggested trade price for the Products which
                                         may from time to time be communicated to WPI by MEC. Such suggested trade prices are
                                         provided by MEC for guidance only. MEC acknowledges that WPI shall in no way suffer in
                                         its business relations with MEC or any other person if it fails to accept such suggested
                                         trade prices.

 

		19.	Acceptance
                                         and Warranty

 

		19.1	In
                                         the event of any shortage, damage or discrepancy in or to a shipment of Products, WPI
                                         shall promptly report the same to MEC and furnish such written evidence or other documentation
                                         within 10 days of arrival of the Products at WPI’s shipping address as MEC may
                                         reasonably request. If the substantiating evidence delivered by WPI demonstrates to MEC’s
                                         reasonable satisfaction that MEC is responsible for such shortage, damage or discrepancy,
                                         MEC shall promptly deliver additional or substitute Products to WPI in accordance with
                                         the delivery procedures set forth herein; provided that in no event shall MEC be liable
                                         for any additional costs, expenses or damages incurred by WPI directly or indirectly
                                         as a result of such shortage, damage or discrepancy in or to a shipment.

 

		19.2	Product
                                         Warranty. MEC shall provide warrants for a period of twelve (12) months after the
                                         date of delivery in accordance with Section 4.3 that the Workmanship shall be free from
                                         defects. All other materials shall be warranted under the same terms and conditions as
                                         have been provided to MEC from the manufacturers of the components of the Micro Refinery.
                                         WPI shall return all Products that WPI believes are defective and that are subject to
                                         the foregoing warranty for MEC’s inspection. The determination of whether a Product
                                         is defective shall be made by MEC with reasonable discretion. All such replaced Products
                                         shall become the property of MEC upon their replacement.

 

		19.3	Notice.
                                         Warranty claims hereunder must be made promptly and in writing; must recite the nature
                                         and details of the claim, the date the cause of the claim was first observed and the
                                         manufacturing lot and serial number of the Product concerned; and must be received by
                                         MEC no later than 10 days after the expiration of the warranty period provided for in
                                         Section 19.2.

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		19.4	Excluded
                                         Claims. MEC shall have no obligation under Section 19.2 in the event that: Repair
                                         or replacement of Products shall have been required through normal wear and tear or necessitated
                                         in whole or in part by force, or by the fault or negligence of WPI or its customers;
                                         or The Products have not been properly used, maintained or stored in accordance with
                                         MEC then applicable instructions regarding the Products, whether by WPI or its customers,
                                         or shall have been modified in any manner.

 

		19.5	Limited
                                         Warranty. THE WARRANTIES SET FORTH IN THIS ARTICLE 19 ARE INTENDED SOLELY FOR THE
                                         BENEFIT OF WPI. ALL CLAIMS HEREUNDER SHALL BE MADE BY WPI AND MAY NOT BE MADE BY WPI’S
                                         CUSTOMERS. THE WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
                                         OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY MEC, INCLUDING WITHOUT LIMITATION
                                         ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE AND ALL OBLIGATIONS
                                         OR LIABILITIES ON THE PART OF MECFOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE
                                         USE, STORAGE OR PERFORMANCE OF THE PRODUCTS.

 

		20.	Assignment
                                         Rights

 

		21.1	The
                                         parties hereto agree that WPI shall not be entitled, to assign this Agreement to a third
                                         party unless agreed upon by MEC.

 

 

22.GENERAL
CONTRACT PROVISIONS

 

		22.1	All
                                         notices, requests, demands, purchase orders or other communications (collectively, “Notices”)
                                         by the terms hereof required or permitted to be given by one party to any other party,
                                         or to any other person shall be given in writing by personal delivery or by registered
                                         mail, postage prepaid, and by facsimile transmission to such other party as follows:

 

(a)
To MEC at:

			ME
                                         Resource Corp.

Suite
900, 555 Burrard Street,

Vancouver,
British Columbia, Canada V7X 1M8

Tel:
(604) 893 7033

Fax:
(604) 692 2801

 

(b)
To WPI at:

	 	 	Well
                                         Power Inc.
			C/o: Cane
                                         and Clark

			3273 Warm
                                         Springs Rd.

                                         Las Vegas, NV 89120

                                         Tel: 702.312.6255 

                                         Fax: 702.944.7100

 

or
at such other address as may be given by such person to the other parties hereto in writing from time to time. If any party bound
hereby or any permitted transferee of shares hereunder shall not have given the parties hereto notice setting forth an address
for the giving of Notices, the Notice for such person shall be deemed to have been properly given if given in accordance with
the terms hereof as if given to the transferor(s) of such shares.

 

All
such Notices shall be deemed to have been received when delivered or transmitted, or, if mailed, 48 hours after 12:01 a.m. on
the day following the day of the mailing thereof. If any Notice shall have been mailed and if regular mail service shall be interrupted
by strikes or other irregularities, such Notice shall be deemed to have been received 48 hours after 12:01 a.m. on the day following
the resumption of normal mail service, provided that during the period that regular mail service shall be interrupted all Notices
shall be given by personal delivery or by facsimile transmission.

 

		22.2	The
                                         parties shall sign such further and other documents, cause such meetings to be held,
                                         resolutions passed and by-laws enacted, exercise their cote and influence, do and perform
                                         and cause to be done and performed such further and other acts and things as may be necessary
                                         or desirable in order to give full effect to this Agreement and every part thereof.

 

		22.3	This
                                         Agreement may be executed in several counterparts, each of which so executed shall be
                                         deemed to be an original and such counterparts together shall be but one and the same
                                         instrument.

 

		22.4	Time
                                         shall be of the essence of this Agreement and or every part hereof and no extensions
                                         or variation of this Agreement shall deploy as a waiver of this provision.

 

		22.5	This
                                         Agreement constitutes the entire Agreement between the parties with respect to all of
                                         the matters herein and its execution has not been induced by, nor do any of the parties
                                         rely upon or regard as material, any representations or writings whatever not incorporated
                                         herein and made a part hereof and may not be amended or modified in any respect except
                                         by written instrument signed by the parties hereto. The Schedules referred to herein
                                         are incorporated herein by reference and form part of the Agreement.

 

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		22.6	This
                                         Agreement shall ensure to the benefit of and be binding upon the parties and their respective
                                         heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

		22.7	Unless
                                         otherwise provided for herein, all monetary amounts referred to herein shall refer to
                                         the lawful money of Canada.

 

		22.8	The
                                         division of this Agreement into articles and sections is for convenience of reference
                                         only and shall not affect the interpretation or construction of this Agreement.

 

		22.9	This
                                         Agreement shall be governed by and construed in accordance with the laws of the Province
                                         of British Columbia and the federal laws of Canada applicable therein and each of the
                                         parties hereto agrees irrevocably to conform to the non-exclusive jurisdiction of the
                                         Courts of such Province.

 

		22.10	In
                                         this Agreement, words importing the singular number shall include the plural and vice
                                         versa, and words importing the use of any gender shall include the masculine, feminine
                                         and neuter genders and the word “person” shall include an individual, a trust,
                                         a partnership, a body corporate, an association or other incorporated or unincorporated
                                         organization or entity.

 

		22.11	When
                                         calculating the period of time within which or following which any act is to be done
                                         or step taken pursuant to this Agreement, the date which is the reference date in calculating
                                         such period shall be excluded. If the last day of such period is not a Business Day,
                                         then the time period in question shall end on the first business day following such non-business
                                         day.

 

		22.12	Any
                                         references in the Agreement to any law, by-law, rule, regulation, order or act of any
                                         government, governmental body or other regulatory body shall be construed as a reference
                                         thereto as amended or re-enacted from time to time or as a reference to any successor
                                         thereto.

 

		22.13	If
                                         any Article, Section or any portion of any Section of this Agreement is determined to
                                         be unenforceable or invalid for any reason whatsoever that unenforceability or invalidity
                                         shall not affect the enforceability or validity of the remaining portions of this Agreement
                                         and such unenforceable or invalid Article, Section or portion thereof shall be severed
                                         from the remainder of this Agreement.

 

		22.14	The
                                         parties hereto agree that this Agreement may be transmitted by facsimile or such similar
                                         devise and the reproduction of signatures by facsimile or such similar device will be
                                         treated as binding as if original and each party hereto undertakes to provide each and
                                         every other party hereto with a copy of the Agreement bearing original signatures forthwith
                                         upon demand.

  

IN WITNESS
WHEREOF the parties have duly executed this Distribution Agreement as of the date first above written.

 

 

ME
Resource Corp.

  

Per:
/s/ Navchand Jagpal

[Authorized
Signing Officer]

 

 

Well
Power Inc.

 

Per:/s/
Cristian Neagoe

[Authorized
Signing Officer]

 

    	7

    	 

    

SCHEDULE
“A” Product Pricing

 

 

The
Schedule would consist of the current product being manufactured by MEC for which WPI is being retained to market, distribute,
and deploy.

 

Micro
Refinery Unit (MRU100) as protected by the Patent Application

 

Patent
Information:

 

Patent
Application in United States No. 61/899,523

Filing
Date: November 4, 2012

Title:
METHOD AND APPARATUS FOR PRODUCING CHEMICALS FROM A METHANE COINTAINING GAS

 

Patent
Summary:

 

The
present invention relates to a method and an apparatus for producing chemicals and/or heat/energy and/or water from a methane-containing
gas. More specifically, the present invention is concerned with a method and an apparatus, which make use of heterogeneous catalysts,
beginning with the partial oxidation of methane to produce synthesis gas followed by a second catalytic reaction to produce chemicals
and/or heat/energy and/or water.

 

Unit
Cost: The total cost of the MRU100 will be no more than $800,000 for a Micro Refinery unit which includes a container sized unit
with the capability to process 100 mcf/day of natural gas (with H2S of no more than 50ppm) into Engineered Fuels (up
to 10 bbls/day), Clean Power (min 35kW) and fracking quality water (up to 80bbls/day). MEC retains the right to increase this
cost if there are significant additional expenses in the manufacturing process but to no more than manufacturing cost plus 40%.

 

Development
of Pilot: The License Fee will be applied to the technical and engineering development of the first demonstration unit in the
territory and may be used to develop catalyst for specific Engineered Fuels.

 

Revenue
Sharing: Upon mutual consent of both Parties, MEC will retain ownership and provide MRU100 as a leased unit over a term of 10
years at 50% of Unit Cost and earn 50% of the net revenue from the operation of each unit.

 

Right
of First Refusal: MEC will give WPI the right of first refusal to additional territories within the United States providing WPI
maintains the financial, operational, and technical resources to expand into those additional territories.

 

    	810.76 - Corn Oil Marketing Agreement

CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

CORN OIL MARKETING AGREEMENT

THIS CORN OIL MARKETING AGREEMENT (the “Agreement”) is made and entered into as of the 4th day of September, 2013, and effective as of September 16th, 2013 (the “Effective Date”) by and between RPMG, INC., a Minnesota corporation (“RPMG”) and Heron Lake BioEnergy, 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 or to be located at Heron Lake, 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.  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 make payments for Producer’s corn oil in accordance with the terms set forth in Exhibit A.  RPMG shall use commercially reasonable efforts to make such payments to Producer on an average net ten (10) days.

		
	(b)
	RPMG Commission.  Producer shall pay RPMG commissions as follows:  [***] for each pound of corn oil sold to third party end purchasers (each, an “End Customer”).  Parties shall from time to time, but no more than once per year, or upon the reasonable request of RPMG, negotiate in good faith adjustments to the foregoing commissions to reflect prevailing commissions being paid to marketers of corn oil produced by third parties in the United States.

		
	(c)
	Accessorial Charges.  As set forth on Exhibit A, RPMG shall be responsible for payment of Accessorial Charges (as defined in Exhibit A) to third parties; provided, however, that Producer agrees (1) to promptly reimburse RPMG for such Accessorial Charges upon submission to Producer of an invoice itemizing such Accessorial Charges, and (ii) that RPMG 

#2419568

may deduct and setoff the Accessorial Charges from and against payments due to Producer by RPMG.

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

		
	(e)
	No Warranty as to Prices.  RPMG shall market Producer’s corn oil using commercially reasonable efforts and the same standards it uses to market the corn oil production of third parties for whom RPMG provides corn oil marketing services.  RPMG shall endeavor to (i) maximize the corn oil price and minimize freight and other costs relevant to corn oil sales and (ii) achieve the best available return to Producer, subject to relevant market conditions.  PRODUCER ACKNOWLEDGES THAT RPMG MAKES NO REPRESENTATIONS, GUARANTEES OR WARRANTIES OF ANY NATURE WHATSOEVER AS TO THE PRICES AT WHICH IT SHALL BE ABLE TO SELL PRODUCER’S CORN OIL TO END CUSTOMERS.

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

		
	(g)
	Audit Rights.  Within ninety (90) days following the end of RPMG’s fiscal year end, Producer shall give written notice to RPMG of its desire to conduct an audit of its corn oil payments to Producer for the preceding fiscal year of RPMG 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)
	Notices of Scheduled Production.  Beginning on the Effective Date, and on the 1st and 15th of each month thereafter, Producer shall provide to RPMG a rolling best estimate of production and inventory by corn oil product for that month and each of the following twelve (12) months.  Beginning on the Effective Date and each Wednesday thereafter, Producer shall provide to RPMG a best estimate of production and inventory by corn oil product for that day and the next seven days.

2

		
	(b)
	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.

		
	(c)
	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) or (b).  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 (e) 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) or (b) 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.  

3

In the event that Producer fails to provide the labor, equipment and facilities necessary to meet RPMG’s loading schedule, Producer shall be responsible for all costs and expenses, including without limitation actual demurrage and wait time, incurred by RPMG resulting from or arising in connection with Producer’s failure to do so.

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

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

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

Corn Oil    [***]     gallons

		
	5.
	Specifications; Quality.

		
	(a)
	Corn oil Specifications.  Producer covenants that it shall produce corn oil that, upon delivery to RPMG at the Ethanol Facility, meets the respective specifications (“Specifications”) set forth in Exhibit B and such other specifications that may be, from time-to-time, promulgated by the industry for corn oil.  RPMG shall have the right to test each shipment of corn oil to ascertain that the Specifications are being met.  If the corn oil provided by Producer to RPMG is shown, by independent testing or analysis of a representative sample or samples taken consistent with industry standards, to not meet the Specifications through no fault of RPMG or any third party engaged by RPMG, then RPMG may, in its sole discretion, (i) reject such corn oil and require Producer to promptly replace such non-conforming corn oil with corn oil that complies with the Specifications, or (ii) accept such corn oil for marketing and, if necessary, adjust the price to reflect the inferior quality, as provided in Exhibit A.  Payment and acceptance of delivery by RPMG shall not waive RPMG’s rights if corn oil does not comply with the terms of this Agreement, including the Specifications.

4

		
	(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 (1) 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.  The initial term of this Agreement shall commence on the date hereof and continue for [***] from the Effective Date.  Thereafter, this Agreement shall remain in effect until terminated by either party at its unqualified option by providing the other party hereto not less than [***] written notice of its election to terminate this agreement.  Either party may terminate this Agreement if the other party breaches this Agreement and fails to cure the breach within 30 days after receipt of notice of such breach or if the other party becomes 

5

insolvent, files or has filed against it a petition in bankruptcy that is not dismissed within 30 days, or has a receiver appointed over its assets.   

		
	(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 thirty (30) 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.

6

		
	(d)
	Limitation on Liability.  NEITHER PARTY MAKES ANY GUARANTEE, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS HEREUNDER.  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

7

		
	(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 may not be a sufficient remedy for unauthorized disclosure or use of Confidential Information, and that the disclosing Party may be entitled, in addition to all other rights or remedies in law and equity, to obtain injunctive or other equitable relief, without the necessity of posting bond in connection therewith.

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

8

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

9

To Producer:    Heron Lake Bioenergy, LLC
    
    
    
Fax:  

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, including, without limitation, the Designee.

		
	(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 or .pdf 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.

10

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

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

11

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

RPMG, INC.

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

PRODUCER:
HERON LAKE BIOENERGY, LLC

By: /s/ Steve A. Christensen    
Name: Steve A. Christensen    
Its (title): CEO & General Manager     

12

CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

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.

CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

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 %

	Moisture; wt%
	[***]

	Impurities; wt%
	[***]

	Unsaponafiables; wt%
	[***]

	FFA; wt%
	[***]

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