Document:

Exhibit 10.19

 

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

 

DISTILLER’S GRAINS
MARKETING AGREEMENT

 

                THIS
DISTILLER’S GRAINS MARKETING AGREEMENT (“Agreement”) is made and entered into
as of the date set forth above the signatures to this Agreement by and between
Hawkeye Gold, LLC, a Delaware limited liability company (“Gold”), and the
entity whose name appears on the signature page to this Agreement (“Producer”).

 

RECITALS:

 

A.                                   Producer
operates an ethanol plant located in or around the location set forth below
Producer’s signature to this Agreement (as it may be expanded from time to
time, the “Plant”).

 

B.                                     Producer
desires to sell to Gold, and Gold desires to purchase from Producer, all the
dried distiller’s grains (“DDG”) and wet distiller’s grains (including modified
wet distiller’s grains, “WDG”) produced at the Plant (collectively, the “Distiller’s
Grains”), all upon and subject to the terms and conditions set forth in this
Agreement.

 

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

 

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

 

Producer may accept or
reject each Purchase Order, in whole, but not in part, but Producer may only
reject a Purchase Order for and on a commercially reasonable basis.  Producer shall notify Gold of whether
Producer accepts or rejects each particular Purchase Order within the time
period specified in the Purchase Order in question, or if no time period is
specified in the Purchase Order, within 24 hours of Producer’s receipt of the
Purchase Order (in either case, the “Acceptance Period”), and if Producer fails
to notify Gold within the Acceptance Period, Producer shall be deemed to have
rejected the Purchase Order in question. 
Gold reserves the right to require Producer to accept or reject any
particular Purchase Order or Purchase Orders only in writing.

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

Gold shall schedule the
loading and shipping of all Distiller’s Grains at the Plant, and shall provide
Producer with daily or other periodic loading schedules specifying the
quantities of 

 

3

 

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

 

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

 

                5.             DELIVERY, STORAGE, LOADING,
TITLE.

 

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

 

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

 

(c)           Producer Storage.  Producer shall provide storage space at the
Plant for not less than 5 full days of combined Distiller’s Grains production
at the Plant (the “Storage Limit”), based on the Plant’s then normal operating
capacity, and such storage space shall be continuously available for Gold’s use
for storage of Distiller’s Grains, without charge to Gold.

 

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

 

Producer
shall provide and supply, without charge to Gold, all facilities, equipment and
labor necessary to load the Distiller’s Grains into the trucks or railcars at
the Plant in accordance with the loading schedules provided by Gold pursuant to
Section 4.  Producer agrees that all
railcars shall be loaded to full visible capacity at the Plant.  Producer shall maintain all loading
facilities and equipment at the Plant in accordance with industry standards and
in good and safe operating condition and repair, subject to 

 

4

 

ordinary wear and tear and
depreciation.

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)             Offer Producer a
reasonable opportunity, but in no event to exceed 48 hours following rejection,
to examine and take possession of the Rejected Grains, at 

 

6

 

Producer’s cost and expense, if Gold reasonably determines that the
condition of the Rejected Grains and the other circumstances permit such
examination and delivery prior to disposal of the Rejected Grains; or

 

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

 

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

 

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

 

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

 

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

 

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

 

Producer will take an origin
sample of Distiller’s Grains from every truck and railcar loaded with Distiller’s
Grains at the Plant, using sampling methodology that is consistent with then
prevailing industry standards.  Producer
will label the samples to indicate the date of 

 

7

 

loading, and will retain the samples for not
less than six months.

 

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

 

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

 

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

 

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

 

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

 

(a)           Producer shall cooperate with Gold in
the performance of Gold’s services under this Agreement, including by (i)
providing Gold in a timely manner with any records or information that Gold may
reasonably request from time to time as part of Gold’s marketing of the
Distiller’s Grains, and (ii) furnishing any representative of Gold who may be
working at the Plant from time to time with reasonable administrative support,
office space and other facilities and supplies.

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

                14.           DUTIES OF GOLD.  In addition to Gold’s other duties and
obligations under this Agreement, Gold agrees as follows:

 

(a)           Gold shall use commercially reasonable efforts to achieve
the highest

 

9

 

F.O.B. Plant Price available
for Distiller’s Grains under the prevailing market conditions at the time of
sale by Gold.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           This Agreement has
been duly authorized, executed and delivered by Producer, and constitutes the
legal, valid and binding obligation of Producer, enforceable against Producer
in accordance with its terms.  Producer
has and shall maintain all 

 

11

 

requisite
power and authority to enter into and perform this Agreement, and all necessary
actions and proceedings of Producer have been taken to authorize the execution,
delivery and performance of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

                Notwithstanding
the foregoing or any other term of this Agreement which may appear to be the
contrary, however, Gold and Producer acknowledge and agree that the preceding
paragraph is not applicable to, and accordingly does not limit the scope or
extent of Gold’s or Producer’s liability with respect to (i) Sections 19 or 20;
or (ii) any act or omission of Gold or Producer, as the case may be, or of
their respective employees or agents, which is, in whole or in part, grossly
negligent or reckless or which constitutes willful or wanton misconduct, fraud
or an 

 

12

 

intentional tort.

 

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

 

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

 

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

 

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

 

13

 

potential participants, assignees or
transferees of any such lender or in connection with a foreclosure, assignment
in lieu of foreclosure or the exercise of any rights or remedies by any such
lender.  Gold or Producer shall, where
reasonably practicable, give the other prior written notice of the fact that
they intend to make a disclosure pursuant to the preceding sentence.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

22.           EFFECTIVE DATE.  This Agreement shall be effective as of the
date set forth below Producer’s signature to this Agreement (the “Effective
Date”).

 

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

 

24.           TERMINATION.

 

(a)           Without Cause.  Gold or Producer may terminate this Agreement
after the Effective Date, with or without cause, for any reason or no reason,
by providing the other with at least 90 days prior written notice of such
termination.  If, however, Producer terminates
this Agreement pursuant to this subparagraph during the Initial Term, then
Producer shall pay Gold, within 10 days of the effective date of the
termination of this Agreement, an amount equal to the Marketing Fees retained
by Gold during the three full calendar months which preceded the effective date
of the termination of this Agreement, but in no event less than the termination
fee amount set forth below Gold’s signature to this Agreement.

 

(b)           For Cause.  Producer and Gold shall also have the right to
terminate this Agreement as follows:

 

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

 

15

 

voluntary
or involuntary) under any bankruptcy, insolvency, debtor/creditor, receivership
or similar or related law by or against, Gold.

 

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

 

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

 

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

 

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

 

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

 

If
Gold’s or Producer’s review of the Records of the other reveals any shortages
or deficiencies in the amount of any payments required to be made by Gold to
Producer, or by 

 

16

 

Producer to Gold, as the
case may be, pursuant to this Agreement (an “Unpaid Amount”), Gold or Producer,
as the case may be, shall pay the Unpaid Amount to the other within 15 days of
Gold’s or Producer’s, as the case may be, written notice to the other of the
Unpaid Amount.  The party which owes the
Unpaid Amount is referred to as the “UA Payer,” and the party to which the
Unpaid Amount is owed is referred to as the “UA Recipient.”  The UA Recipient’s written notice must
include the basis for the calculation of the Unpaid Amount.  The UA Payer shall also pay, or reimburse the
UA Recipient for, the out-of-pocket costs and expenses incurred by the UA
Recipient in connection with the review of the Records in question if such
review revealed a shortage or deficiency of two percent (2%) or more in the
aggregate amount of payments that were required to be made to the UA Recipient
by the UA Payer with respect to the period of time which was the subject of the
review in question.  In addition, if Gold
or Producer, as the case may be, review the Records of the other more than once
during any six month period, and the costs and expenses of such review are not
allocated to Gold or Producer pursuant to the preceding sentence, the party
conducting the review shall reimburse the costs and expenses incurred by the
other (including employee time) in connection with such review or reviews
within 10 days of the receipt of an invoice therefor from the other.

 

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

 

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

 

17

 

proceedings shall be heard
and determined before those three arbitrators, with the decision of a majority
of the arbitrators to govern.

 

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

 

Gold
and Producer agree that, in connection with any arbitration proceeding, they
shall file any compulsory counterclaim (as defined under the federal rules of
civil procedure) within 30 days after the date of the filing of the claim to
which it relates.

 

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

 

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

 

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

 

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

 

30.           ASSIGNMENT. 
This Agreement shall be assignable by Gold or Producer, as the case may
be, only with the prior written consent of the other, which consent shall not
be unreasonably delayed, conditioned or withheld; provided, however, that Gold
and Producer may, without the consent of the other (i) assign this Agreement or
any or all of its rights and obligations under this Agreement to any affiliate
of Gold or Producer, as the case may be, (ii) assign this Agreement or any or
all of its rights and obligations under this Agreement in connection with any
sale of all or substantially all of the assets of Gold or Producer, as the case
may be, and (iii) assign this Agreement as collateral, security or otherwise to
any lender of Gold or Producer, as the case may be, and any such lender may in
turn assign this Agreement upon 

 

18

 

any foreclosure or other exercise of any rights or remedies
against Gold or Producer, as the case may be.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

agents shall have the rights provided in,
respectively, Sections 36 and 37.

 

                35.           SEVERABILITY.  In the event any provision of this Agreement
is held invalid, illegal or unenforceable, in whole or in part, the remaining
provisions of this Agreement shall not be affected thereby and shall continue
to be valid and enforceable.  In the
event any provision of this Agreement is held to be invalid, illegal or
unenforceable as written, but valid, legal and enforceable if modified, then
such provision shall be deemed to be amended to such extent as shall be
necessary for such provision to be valid, legal and enforceable and it shall be
enforced to that extent.  Any finding of
invalidity, illegality or unenforceability in any jurisdiction shall not
invalidate or render illegal or unenforceable such provision in any other
jurisdiction.

 

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

 

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

 

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

 

                39.           NO WAIVER; MODIFICATIONS IN
WRITING.  No failure or delay on the
part of Gold or Producer in exercising any right, power or remedy under this
Agreement shall operate

 

20

 

as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. Except as provided in Section
18, the remedies provided for in this Agreement are cumulative and are not
exclusive of any remedies that may be available to Gold or Producer at law, in
equity or otherwise.  No amendment,
modification, supplement, termination or waiver of or to any provision of this
Agreement, or consent to any departure therefrom, shall be effective unless the
same shall be in writing and signed by Gold and Producer.  Producer and Gold may amend this Agreement
pursuant to an Accepted Purchase Order which is signed by both Producer and
Gold and which specifically provides that specified terms of such Accepted
Purchase Order constitute an amendment of specified terms of this Agreement (a “PO
Amendment”).  A PO Amendment and any
other amendment, modification or supplement of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to
any departure from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
made or given.  A PO Amendment shall also
be effective only with respect to the particular Accepted Purchase Order in
question.

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

IN WITNESS WHEREOF, Gold and
Producer have executed and entered into this Agreement as of the13th day of
November, 2007.

 

	
  GOLDEN GRAIN ENERGY, LLC

  	
   

  	
  HAWKEYE GOLD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Walter Wendland

  	
   

  	
  By:

  	
  /s/ Randy Ives

  
	
  Name:

  	
  Walter Wendland

  	
   

  	
  Name:

  	
  Randy Ives

  
	
  Title:

  	
  President/CEO

  	
   

  	
  Title: 

  	
  Senior Vice President

  

 

22

 

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

 

	
  1822 43rd
  Street S.W.

  	
   

  	
  P.O. Box 2523 - 224 S.
  Bell

  
	
  Mason City, IA 50401

  	
   

  	
  Ames, Iowa 50010-2523

  
	
   

  	
   

  	
  Attn: Randy Ives

  
	
  Attn: Walter Wendland

  	
   

  	
  Fax Number: 515-233-5902

  
	
  Fax Number: 641-421-8457

  	
   

  	
  Email Address:
  rives@hawkgold.com

  
	
  Email
  Address: walt@ggecorn.com

  	
   

  	
  Termination
  Fee Amount: $ *** [Section 24(a)]

  
	
  Location
  of Plant: Mason City, IA Recital A]

  	
   

  	
   

  
	
  Monthly
  Production: *** Tons [Section 7]

  	
   

  	
   

  
	
  Effective Date: December 1st,
  2007 [Section 22]

  	
   

  
	
  Producer Representative:
  Steve Dietz and or Walter Wendland [Section 13(c)]

  
	
   

  
	
  Exhibit A - Minimum
  Quality Standards [Section 8]

  	
   

  
	
  Exhibit B - Composite
  Analysis Matters [Section 10]

  	
   

  

 

23

 

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

 

EXHIBIT A

 

MINIMUM QUALITY STANDARDS

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  DDG

  	
   

  	
  Protein

  	
   

  	
  ***
  %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  *** %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  *** %

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  *** %

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  *** %

  	
   

  	
  *** %

  

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  WDG

  	
   

  	
  Protein

  	
   

  	
  ***
  %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  *** %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  *** %

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  *** %

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  *** %

  	
   

  	
  N/A

  

 

	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  Modified WDG

  	
   

  	
  Protein

  	
   

  	
  *** %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  ***
  %

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  ***
  %

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  ***
  %

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  ***
  %

  	
   

  	
  ***
  %

  

 

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

 

 

 

EXHIBIT
B

 

COMPOSITE
ANALYSIS MATTERS

 

MOISTURE, %

DRY MATTER, %

CRUDE PROTEIN, %

A.D. FIBER, %

N.D. FIBER, %

CRUDE FIBER, %

ASH, %

TOTAL DIGEST NUTRS., %

NET ENERGY, MAIN.

NET ENERGY, GAIN

NET ENERGY, LACT.

DIG. ENERGY, SWINE

MET. ENERGY, SWINE

CALCIUM, %

PHOSPHORUS, %

ACID FAT, %

SULFUR, %

COLOR SCORE

COMPLETE MYCOTOXINS

COMPLETE AMINO ACIDS

PARTICLE SIZEExhibit
10.1

 

MUTUAL TERMINATION AGREEMENT

 

This Mutual Termination Agreement (this “Agreement”),
dated as of January 15, 2008 (the “Termination Date”), is made by and
between EQUITABLE RESOURCES, INC., a Pennsylvania corporation (“Equitable”),
and DOMINION RESOURCES, INC., a Virginia corporation (“Dominion”).

 

WITNESSETH:

 

WHEREAS, Equitable and Dominion (as successor
by merger to Consolidated Natural Gas Company) are parties to that certain
Stock Purchase Agreement, dated as of March 1, 2006, as amended (the “SPA”);
and

 

WHEREAS, the Parties desire to terminate the
SPA and abandon the transactions contemplated therein, pursuant to the terms
and conditions set forth below.

 

NOW, THEREFORE, in consideration of the
mutual promises, covenants, conditions and agreements contained herein, and for
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

 

1.               Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
SPA.

 

2.               Pursuant to Section 9.1(a) of
the SPA, the Parties hereby elect to terminate the SPA, effective as of the
Termination Date.

 

3.               In accordance with Section 9.2(b) of
the SPA, the Confidentiality Agreement shall survive in its entirety the
termination of the SPA until the earlier of December 31, 2009 or the
Pennsylvania Public Utility Commission’s issuance of a final order in a
proceeding for regulatory approval of a subsequent sale of the Companies.  The Amended and Restated Confidentiality
Agreement between the Parties, dated July 26, 2006, as amended (the “Sensitive
Information Confidentiality Agreement”) also survives in its entirety the
termination of the SPA; provided that the reference to return or destruction
requirements of Section 2 thereof shall not be triggered until notice
thereof is provided by Dominion. 
Dominion agrees not to demand return or destruction pursuant to the
foregoing agreements during the pendancy of the matters known as (a) Federal Trade Commission v. Equitable Resources, Inc. et al.
before the United States Court of Appeals for the Third Circuit,
Case No. 07-2499, and all appeals thereof and (b) In the Matter of: Equitable Resources, Inc. et al before the
Federal Trade Commission, Docket No. 9322 (collectively, the “FTC
Litigation”).  Equitable shall take
commercially reasonable measures to sequester any and all materials subject to
the confidentiality obligations of the Confidentiality Agreement and the
Sensitive Confidentiality Agreement, and shall access such materials solely as
required in connection with the FTC Litigation and for no other purpose.

 

 

 

 

 

4.               Each Party hereby releases
the other Party and its trustees, directors, officers, employees, agents and
Affiliates from each and all of their obligations and any claims and demands,
in each case arising out of or in connection with the SPA, except with respect
to (a) the Confidentiality Agreement; (b) the Sensitive Information
Confidentiality Agreement; (c) claims of fraud; and (d) this Mutual
Termination Agreement.  UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY, OR ITS AFFILIATES, DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS, BE RESPONSIBLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE,
SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES
RELATED TO LOST BUSINESS, LOST PROFITS, LOSS OF USE, AND LOSS OF DATA, OR
FAILURE TO REALIZE SAVINGS OR BENEFITS) ARISING UNDER THE SPA, EVEN IF ADVISED
OF THE POSSIBILITY OF SUCH LOSS.

 

[Remainder of this Page Intentionally
Left Blank]

 

 

 

IN WITNESS WHEREOF, Equitable and Dominion
have executed this Agreement effective as of the date first written above.

 

	
  EQUITABLE RESOURCES, INC.,

  	
   

  	
  DOMINION RESOURCES, INC.

  
	
  a Pennsylvania corporation

  	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Murry S. Gerber

  	
   

  	
  By:

  	
  /s/Thomas N. Chewning

  	
   

  	 

	
  Name:

  	
  Murry S. Gerber

  	
   

  	
  Name:

  	
  Thomas N. Chewning

  	
   

  
	
  Title: 

  	
  Chairman and 

  	
   

  	
  Title:

  	
  Executive Vice President
  and

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
  Chief Financial Officer

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