GRAIN SUPPLY AGREEMENT
THIS
GRAIN SUPPLY AGREEMENT is
made
and entered into as of this first day of March, 2006, by and between Show Me
Ethanol, LLC, a Missouri limited liability company (the “Company”), and
Xxx-Xxxxxxx Grain Growers, Inc., a Missouri cooperative association (the
“Supplier”).
WITNESSETH:
WHEREAS,
the
Supplier is engaged in the business of sourcing and selling corn (the
“Product”), milo and other grains; and
WHEREAS,
the
Company desires to purchase its requirements for the Product from the Supplier
and to assure itself of a supply of the Product which the Company uses in its
ethanol distillation operations; and
WHEREAS,
the
Supplier is willing to source and sell the Product to the Company in quantities
sufficient to satisfy the Company’s requirements during the entire term of this
Agreement;
NOW,
THEREFORE,
for and
in consideration of the premises and the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. Quantity.
Subject
to the terms and conditions herein stated, the Company agrees to buy from the
Supplier all of its requirements for the Product for the operation of a 50-65
million gallon per year ethanol facility, and the Supplier agrees to supply
the
Product in a timely manner to satisfy such requirements during the term of
this
Agreement and any extension thereof. The Supplier hereby represents, warrants
and agrees that the Supplier’s capacity is sufficient to satisfy the Company’s
projected requirements for the Product of up to 22 million bushels per year
for
the entire term of this Agreement.
2. Quality
Control.
(a) Product
delivered to Company shall be Number 2, yellow corn at 15% moisture (Milo may
be
substituted as Product with the agreement of both parties and if so substituted,
FM shall be eliminated as a grade factor). Supplier shall test for alfatoxin
to
meet industry requirements for sales of distillers grains derived from the
Product.
(b) Company
shall be entitled to sample Product delivered by Supplier pursuant to this
Agreement (“Graded Product”). Any samples of Graded Product that deviate from
the standards set forth in 2 (a) shall be subject to grading by a licensed
Missouri or Federal inspection service. The findings of such service based
on a
composite sample shall be binding on Supplier and Company .
(c) Discounts
and bonuses to the pricing set forth in Section 3 for Graded Product shall
be
based on Supplier’s established discounts and bonuses for like grades on corn
delivered to Supplier.
3. Pricing.
Supplier shall use commercially reasonable efforts to supply Product to the
Company at a competitive price. Pricing for purchases pursuant to 3(a) and
3(b)
shall be done as of 9:00 am for the previous days sales, or as otherwise agreed
by the parties. All sales of Product shall be priced on a grain basis as follows
(the “Purchase Price”):
(a) Product
sourced by Supplier, other than for specific purchases covered by (b) and (c)
below, shall be priced at $0.116 per bushel (“Put Through Charge”) over
Supplier’s posted bid at its Highway 24 East facility at Carrollton, Missouri
(the “Supply Facility”).
(b) Product
sourced by Supplier other than through deliveries by corn producers directly
to
the Supply Facility shall be priced at the Put Through Charge above Supplier’s
delivered cost ( rounded to the nearest $0.001 per bushel) to the Supply
Facility.
(c) Advance
purchases of Product shall be negotiated between the Supplier and the
Company.
(d) The
Put
Through Charge shall be increased by 3% effective each anniversary date of
the
Agreement.
(e) Company
shall have the right to audit annually, at its own expense, the records of
Supplier to determine if the Purchase Price paid for Product has been in
accordance with the pricing set forth herein. Any adjustments necessary to
meet
the pricing set forth herein shall be made within 10 days of the audit
completion.
(f) In
the
event that crop production in Xxxxxxx county for any year falls below 50% of
the
average Xxxxxxx County yields established by the USDA, Supplier and Company
shall jointly determine the best course of action to control cost and continue
a
sufficient supply of Product to Company for the operation of its ethanol
facility.
4. Orders
and Terms of Shipment.
Shipments of Product by Supplier shall be weighed via an automatic bulk weighing
system certified by the State of Missouri or other licensed agency. Title to
the
Product shall transfer from Supplier to Company immediately after the Product
passes through the bulk weighing system.
5. Notice
of Scheduled Downtime.
Not
less than thirty days prior to the commencement of any planned maintenance
or
downtime, the Company shall deliver to the Supplier a written notice of such
downtime. Failure to notify Supplier thirty days prior to such planned
maintenance or downtime shall result in a $2,500 per day fee for each day less
than thirty days that Supplier is given notice.
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6. Terms
of Payment.
The
terms of payment of the Purchase Price hereunder shall be made weekly on Tuesday
of each week for the immediately preceding week’s deliveries. Payments shall be
made to the Supplier at its office in Richmond, Missouri, in lawful money of
the
United States of America (or by wire transfer as directed by Supplier). Any
payment to Company not received pursuant to this section shall be assessed
a
daily interest charge equal to the prorated monthly charge Supplier is then
charging its farm customers.
7. Term
of Agreement.
(a) This
Agreement shall be in effect for a term of 20 years from the first delivery
of
Product by Supplier to Company and thereafter shall continue in effect for
successive one year terms unless and until terminated by either party hereto,
with or without cause, by written notice given to the other party not less
than
60 days prior to the expiration of the initial term hereof or any subsequent
extension thereof, as the case may be; provided, however, that this Agreement
may be terminated earlier by either party, for cause, as hereinafter
provided.
(b) In
the
event that either party hereto shall default in the performance of any of its
obligations hereunder and (except as otherwise provided in paragraph 7(c))
if
such default shall not be remedied within ten days following the giving of
written notice of such default by the nondefaulting party to the defaulting
party then the nondefaulting party may, but shall not be obligated to, terminate
this Agreement immediately and without further notice. Failure of either party
in any instance to terminate upon default by the other party in the performance
of any obligation hereunder shall not constitute a waiver of any future rights
of termination. Any such termination hereof shall not waive any legal or
equitable remedy available to the nondefaulting party against the defaulting
party by reason of such default.
(c) Either
party hereto shall be deemed to be in default hereunder if at any time it shall
be adjudicated a bankrupt or insolvent, or an order shall be entered, remaining
unstayed by appeal or otherwise for sixty days, appointing a receiver or trustee
for such party or any of its properties, or approving a petition seeking
reorganization or other relief under the bankruptcy or similar laws of the
United States or any state, or such party shall file a petition to take
advantage of any statutes for the protection of debtors, or make a general
assignment for the benefit of creditors. Upon the occurrence of any such default
under the provisions of this subparagraph, the nondefaulting party shall be
entitled to terminate this Agreement immediately upon written notice given
to
the defaulting party.
8. Force
Majeure.
In the
event either party is prevented from performing this contract by circumstances
beyond its control, including without limitation labor disputes, fire,
explosion, flood, acts of God, war or other hostilities, civil commotion,
domestic or foreign governmental acts, orders or regulations, the obligation
of
the Supplier to deliver and the obligation of the Company to accept delivery
of
the Product during the period of such disability shall be suspended and the
quantities so affected shall be eliminated from this Agreement without liability
to either party.
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9. Notice.
Any
notice which either party may be required or shall desire to give hereunder
shall be deemed to be duly given when personally delivered or when mailed by
certified or registered mail, postage prepaid, to the other party at the address
indicated below or at such other address as either party hereafter may designate
to the other party in writing:
Company:
Xxxxxxx
00 Xxxx
Xxxxxxxx,
XX 00000
FAX:
000-000-0000
ATTN:
Chairman of the Board
Supplier:
Xxx-Xxxxxxx
County Grain Growers, Inc.
Xxxxxxx
00 Xxxx, X.X. Xxx 000
Xxxxxxxx,
XX 00000
FAX:
000-000-0000
ATTN:
General Manager
10. Entire
Agreement.
This
Agreement cancels, merges and supersedes all prior and contemporaneous
understandings and agreements relating to the subject matter of this Agreement,
written or oral, between the parties hereto and contains the entire agreement
of
the parties hereto, and the parties hereto have no agreements, representations
or warranties relating to the subject matter of this Agreement which are not
set
forth herein. This Agreement shall not be amended, modified or supplemented
in
any manner whatsoever except as otherwise provided herein or in writing signed
by each of the parties hereto. Any terms or conditions of any shipping
instructions, order forms or other documents used in connection with the
operation of this Agreement which conflict with any of the provisions hereof
shall be void and of no effect.
11. Assignment;
Binding.
Neither
this Agreement, nor any of the rights, duties or obligations of either party
hereunder, may be assigned or otherwise delegated by such party without the
prior written consent of the other party hereto, except that either party is
entitled to assign this Agreement to its lenders as collateral. This Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and
their
successors and permitted assigns.
12. Amendment.
This
Agreement may be amended or modified only by a writing signed by each of the
parties hereto. The parties agree to meet every three years after the first
delivery date of Product under this Agreement to discuss any adjustments that
may be necessary or advisable given the changing market conditions. If the
parties fail to agree to any modifications to this Agreement, it shall continue
in full force and effect as written.
13. Law
Governing.
This
Agreement shall be governed by and construed and interpreted in accordance
with
the laws of the State of Missouri applicable to agreements made and to be
performed entirely within such State, including all matters of construction,
validity and performance.
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IN
WITNESS WHEREOF,
the
parties hereto have caused this All Requirements Agreement t to be duly executed
as of the day and year first above written.
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By
Xxxxx
Xxxxxx
Chairman
of the Board
“COMPANY”
XXX-XXXXXXX
COUNTY GRAIN ROWERS, INC.
By
Xxxx
Xxxxxxx
General
Manager
“SUPPLIER”
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