Execution Copy
GRAIN PROCUREMENT AGREEMENT
THIS GRAIN PROCUREMENT AGREEMENT, (the "Agreement") is made and entered into as
of December 14, 2006, by and between NEDAK Ethanol, LLC, a Nebraska limited
liability company ("NEDAK"), and X.X. Xxxxxx Grain Co., Inc., a Nebraska
corporation ("Xxxxxx").
RECITALS
A. NEDAK is in the process of finalizing development, financial and
operational plans for an anhydrous ethanol production plant with a
forty four million (44,000,000) gallon per year nameplate capacity to
be constructed in Atkinson, Nebraska (the "Plant");
X. Xxxxxx is regularly engaged in the business of originating, storing,
handling and marketing grain and, in particular, owns and operates a
grain storage and handling facility, and other grain storage and
handling facilities, in the region surrounding Atkinson, Nebraska; and
X. Xxxxxx and NEDAK desire to provide for the terms upon which NEDAK will
purchase and receive Grain from Xxxxxx at the Plant as well as other
matters affecting the operation of the Plant.
AGREEMENT
1. DEFINITIONS. Terms not defined herein will have the meaning ascribed
thereto in Appendix A.
2. GRAIN PROCUREMENT.
2.1 Obligation to Supply and Purchase.
(a) Xxxxxx Obligation to Supply Grain. The parties acknowledge and
agree that Xxxxxx shall have the exclusive right and obligation
to provide NEDAK with No. 2 yellow corn meeting the
specifications described in this Agreement (the "Grain") in the
full amount necessary for the operation of the Plant during the
term hereof and under the conditions herein set forth. This right
and obligation shall apply to the Plant as originally constructed
and any and all alterations, modifications or expansions thereof.
(b) NEDAK to Purchase Exclusively from Xxxxxx. Except as provided by
Section 2.1(c) herein, NEDAK shall purchase from Xxxxxx all Grain
that is necessary for operation of the Plant and shall place with
Xxxxxx all actual orders for purchase of Grain to be delivered to
the Plant.
(c) Right to Direct Purchase. If, at any time, NEDAK identifies Grain
offered by a reliable supplier other than Xxxxxx at more
favorable pricing (not
including Service Fee) than offered by Xxxxxx for the same grade,
quality and delivery period, NEDAK may direct Xxxxxx, at Xxxxxx'x
sole discretion, to either (i) offer Grain to NEDAK on the same
or better terms and pricing, or (ii) purchase Grain from the
identified supplier and deliver it to NEDAK. If Xxxxxx purchases
such Grain from the identified supplier and delivers such Grain
to the Plant, the price that NEDAK pays shall be equal to price
paid by Xxxxxx, plus the Service Fee and the actual
transportation costs incurred by Xxxxxx, provided that NEDAK
shall be subject to the execution risk for such purchase.
(d) Minimum Supply. Xxxxxx shall maintain a minimum of four days'
supply of Grain in storage at the Plant at all times.
2.2 Communications Schedule, Estimated Grain Requirements.
(a) Communications Schedule. NEDAK will provide Xxxxxx with monthly
and weekly estimates of Grain required and planned production
schedules, and daily reports of actual Grain usage, operating
times and inventories as described on Schedule 2.2 (the
"Production Schedule").
(b) Grain Estimates. The parties expressly understand that NEDAK's
notice of monthly Grain requirements shall be a good faith
estimate and that the parties anticipate reasonable variations
between delivery forecast and actual delivery requirements. For
purposes of this Agreement the phrase "reasonable variations"
shall mean a variation of no more than 10% between the delivery
forecast and actual delivery requirements.
2.3 Grain Quality.
(a) Standard Grain Quality. The standard quality for Grain delivered
under this Agreement shall: (i) be No. 2 yellow corn, having no
more than a 15% moisture content; (ii) be graded in accordance
with State and Federal laws and in accordance with any reasonable
standards set by NEDAK; (iii) be merchantable and not be
adulterated; and (iv) meet such additional specifications and
standards as the parties may establish from time to time by
mutual agreement, including without limitation standards and
specifications related to test weight (determined with reference
to moisture content), foreign material and mycotoxin and other
toxin levels.
(b) Grain Not Meeting Quality Requirements. NEDAK may, at its option:
(i) reject any Grain delivered by Xxxxxx or any Grain Supplier
delivering Grain on behalf of Xxxxxx that does not meet the
standards described in Schedule 2.3 (the "Discount Schedule"), or
(ii) accept such Grain and apply the discounts set forth in the
Discount Schedule on a load-by-load basis. NEDAK may also
establish daily or weekly average quality levels and may reject
Grain if such average quality levels do not meet the standards
described in Schedule 2.3.
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(c) Changes to Discount Schedule. NEDAK, in its sole discretion, may
make changes to the Discount Schedule, provided that NEDAK shall
consult with Xxxxxx regarding such changes and promptly provide
notice to Xxxxxx of such changes. Changes to the Discount
Schedule shall not apply to contracts entered into between Xxxxxx
and Grain Suppliers prior to notice of such change by NEDAK.
2.4 Purchase Price.
(a) Base Price. The base price to be offered by Xxxxxx for Grain
purchased from Grain Suppliers to supply NEDAK will be the posted
cash price (i.e., Chicago Board of Trade listing less Xxxxxx
Grain posted basis) for purchase of Grain at the Xxxxxx facility
in Xxxxxxxx for the same delivery period. NEDAK shall pay to
Xxxxxx the base price paid by Xxxxxx to the Grain Supplier for
each shipment of Grain, applying the discounts and Service Fee
applied in accordance with this Agreement. For Grain delivered
directly from Xxxxxx'x existing inventory, NEDAK shall pay the
posted cash price offered by Xxxxxx to third parties on the day
of delivery at Xxxxxxxx.
(b) Discounts. Grain discounts will be determined in accordance with
the Discount Schedule in effect at the time of purchase of Grain
by Xxxxxx. All discounts and mix-and-blend revenue on Grain
received at the Plant will be for the account of NEDAK.
(c) Service Fee. In addition to the agreed upon terms of such sales
of Grain, NEDAK agrees to pay Xxxxxx a service fee of $0.04 per
bushel of Grain delivered (the "Service Fee"). No additional
charge for transportation or other services shall be charged by
Xxxxxx.
(d) Sales Confirmation. The sale of Grain by Xxxxxx to NEDAK shall be
on a delivered-to-Plant basis, without additional charge for
transportation or storage and with price, quantity, and time of
delivery as mutually agreed upon by the parties. Each individual
sale shall be confirmed in a written Xxxxxx sale confirmation
that will incorporate all particular terms of each such sale.
(e) Hedging. Xxxxxx shall cooperate with NEDAK to allow NEDAK to
hedge future Grain needs on the Chicago Board of Trade, either
through a separate agreement between NEDAK and Xxxxxx to be
determined at a later date, or through a hedging account
maintained by NEDAK with a third party.
2.5 Administration, Delivery and Transfer of Title.
(a) Delivery. Xxxxxx shall deliver the Grain or cause the Grain to be
delivered to the Plant without additional charges for
transportation or storage. NEDAK shall make available, at no cost
to Xxxxxx and during
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operating hours consistent with area grain elevators, which may
vary seasonally, employees to receive, weigh, sample and unload
Grain delivered on behalf of Xxxxxx. Xxxxxx may observe delivery,
weighing and sampling at any time NEDAK is receiving Grain.
Xxxxxx may, at its sole discretion and expense and upon one
week's notice to NEDAK (which notice shall include the reason or
basis for the request), assign up to three Xxxxxx employees to be
stationed at the Plant to receive, weigh and take Grain samples,
provided that Xxxxxx employees shall not unload Grain or be
responsible for any other activities at the Plant.
(b) Transfer of Title. Title to the Grain and risk of loss shall pass
to NEDAK at the scale located at the Plant. NEDAK shall be
responsible for all shrink from delivery of the Grain to the
Plant until processing.
2.6 Administration and Accounting.
(a) Administration. Xxxxxx will administer all relationships with
Grain Suppliers and Freight Suppliers to the Plant and all
related activities, including without limitation price
negotiations, scheduling, settlement, inbound delivery logistics,
lien checks, collection and payment of check-off and other fees,
documentation of received weights and grades, payments,
fulfillment of other Grain Supplier and Freight Supplier contract
requirements and functions related to government loan or other
programs. NEDAK will not undertake, directly or indirectly, any
such activities, provided that, NEDAK may seek prices from third
parties to allow purchases under Section 2.1(c) hereof.
(b) Accounting. Xxxxxx shall make available to NEDAK the accounting
and order processing software utilized by Xxxxxx. NEDAK shall
provide computer hardware and will pay for communications fees
and supplies (i.e., paper, postage, etc.) for any Xxxxxx
employees located at NEDAK offices or the Plant.
2.7 Communications and Contracts with Grain Suppliers.
(a) Communications with Grain Suppliers. Xxxxxx shall maintain and
publicize a dedicated telephone line for purchase of Grain to
supply NEDAK and shall respond to calls to such line as "NEDAK
Grain." Xxxxxx shall allow for NEDAK staff to purchase and
receive Grain from local grain producers at the Plant, provided
that, any such purchases shall be (i) at the posted price for the
day of delivery, and (ii) promptly confirmed by telephone or
electronic message to Xxxxxx.
(b) Contracts with Grain Suppliers. Xxxxxx shall provide programs for
grain origination in addition to spot pricing (e.g., hedge to
arrive). Xxxxxx shall be the contracting party on all contracts
with Grain Suppliers, provided that Xxxxxx may designate the
Plant as the designated delivery point. All
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contracts and other communications with Grain Suppliers shall
reference NEDAK.
3. INVOICING AND PAYMENT.
3.1 Preparation of Invoices. Xxxxxx will issue a weekly invoice to NEDAK
on each Wednesday for Grain delivered from Tuesday of the prior week
through Monday of the current week.
3.2 Payment Terms. NEDAK shall pay by wire transfer (or other agreed
method) to Xxxxxx the amount invoiced by the close of business on the
immediately following business day.
4. WARRANTIES AND REPRESENTATIONS
4.1 Common Warranties and Representations. Each party represents and
warrants to the other party that:
(a) it is duly incorporated and in good standing in its state of
incorporation or organization; it is qualified to do business in
the State of Nebraska; it has full power and authority to enter
into and perform this Agreement;
(b) all necessary corporate action has been taken by the representing
party to authorize the execution, delivery and performance of
this Agreement; the execution, delivery and performance of this
Agreement by such representing party does not, and will not,
violate or constitute a breach of or default under any
Governmental Requirement or any indenture, contract or other
instrument to which the representing party or its assets are
bound or to which its business is subject; and
(c) upon execution and delivery of this Agreement by the representing
party, this Agreement will constitute the legal and binding
agreement of the representing party enforceable against such
representing party in accordance with its terms.
4.2 Xxxxxx Warranties and Representations.
(a) Xxxxxx, either through its own management or through lawful
contracts entered into with third parties, currently has and
shall maintain or cause to be maintained such licenses, permits
and/or authorities as may be required to lawfully engage in the
purchase and sale of the Grain.
(b) Xxxxxx warrants to NEDAK that Xxxxxx owns or has the right to
sell all of the Grain delivered to NEDAK under this Agreement and
that such Grain shall be free and clear of any security interest,
lien, penalty, charge, or encumbrance, and that Xxxxxx has
conducted such searches to identify any lienholders and has made
or will make such payments.
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4.3 NEDAK Warranties and Representations. NEDAK shall maintain such
licensing and certifications for the weigh scales, moisture
testers and truck probes to receive and obtain official weights
and other aspects of Grain delivered to the Plant.
5. TERM AND TERMINATION
5.1 Initial Term of Agreement. The initial term of this Agreement
(the "Initial Term") shall be from date hereof until the end of
the third year following the date of first delivery of Grain to
the Plant. NEDAK shall provide Xxxxxx not less than seven (7)
business days' written notice for the delivery of Grain necessary
for testing and initial production and thirty (30) days' written
notice prior to the estimated beginning of full operations.
5.2 Renewal Terms. This Agreement shall automatically renew for an
additional twenty four month period (a "Renewal Term") at the end
of the Initial Term and at the end of each Renewal Term
thereafter, unless either NEDAK or Xxxxxx provides the other with
written notice of intent not to renew the Agreement not less than
six months prior to end of the Initial Term or any subsequent
Renewal Term.
5.3 Termination.
(a) Termination Upon Default. Upon the occurrence and during the
continuance of any one or more Events of Default by a party and
the expiration of any applicable cure period, then, at the other
party's sole discretion, such other party may declare this
Agreement terminated effective immediately by issuing a written
notice to the other party.
(b) Suspension of Operations. If the operation of the Plant is
suspended for six (6) months or more, then, either party may
declare this Agreement terminated effective immediately by
issuing a written notice to the other party.
6. EVENTS OF DEFAULT AND REMEDIES.
6.1 Events of Default and Notice.
(a) Events of Default by either NEDAK or Xxxxxx. Any one or more of
the following constitute an Event of Default by either Xxxxxx or
NEDAK relating to their respective obligations hereunder:
(i) if a party defaults in the performance of, or fails to
observe, any covenant, agreement, or condition contained in
this Agreement and such default or failure continues for a
period of thirty (30) days after written notice of such
default or failure has been given to the defaulting party by
the other party (other than a default described elsewhere in
this Agreement that has a shorter period);
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(ii) immediately if (A) a petition of bankruptcy under the
present or any future bankruptcy act or code or any other
act or code for the relief of debtors (I) is filed
voluntarily by a party, or (II) is filed against a party and
remains in place for more than 30 days, or (B) if a receiver
or trustee is appointed to take control of substantially all
of the assets of such party or of such party's interest
under this Agreement, or (C) if such party makes an
assignment for the benefit of creditors of a material
percentage of its assets, or (D) if a party terminates its
existence or liquidates, voluntarily or involuntarily, any
substantial part of its assets; or
(iii) if a party assigns its interest under this Agreement other
than in accordance with the provisions hereof;
notwithstanding the foregoing, Xxxxxx hereby consents to any
collateral assignment of this Agreement to NEDAK's lender,
in the event of a NEDAK Event of Default, as may be required
by any such lender from time to time.
(b) NEDAK Event of Default. If NEDAK fails to pay any outstanding
invoice for more than four (4) business days from the date of
receipt thereof, Xxxxxx may declare an Event of Default.
(c) Xxxxxx Event of Default. If Xxxxxx fails to deliver Grain as
provided under this Agreement and in accordance with previously
provided estimate of Grain required for more than two (2)
business days, NEDAK may declare an Event of Default.
6.2 Remedies.
(a) NEDAK's Remedies. If Xxxxxx fails to deliver Grain as required by
this Agreement or fails to maintain the minimum supply in
accordance with Section 2.1(d) above, or if NEDAK reasonably in
good faith believes that Xxxxxx will fail to deliver Grain as
required by this Agreement, NEDAK may: (i) in good faith and
without unreasonable delay, make any reasonable purchases of
Grain in substitution of the quantity due from Xxxxxx, (ii)
recover from Xxxxxx as damages the difference between the cost of
cover under (i) and the Xxxxxx posted price (or the average price
at the comparable location(s), if Xxxxxx has not posted a price),
plus the Service Fee, together with any incidental or
consequential damages, but less expenses saved in consequence of
Xxxxxx'x breach, (iii) seek and receive injunctive relief or a
decree of specific performance, or (iv) credit the amount of
damages Xxxxxx has become obligated to pay NEDAK, as determined
by arbitration or if arbitration fails to occur as required
hereby, a court of competent jurisdiction, to NEDAK and set off
such amount against any amounts owed by NEDAK to Xxxxxx.
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(b) Xxxxxx'x Remedies. If NEDAK fails to make any payment for Grain
delivered by Xxxxxx and accepted by NEDAK under the terms of this
Agreement, Xxxxxx may recover the payments from NEDAK. Xxxxxx may
withhold future scheduled deliveries only if NEDAK fails to pay
Xxxxxx the payments owed Xxxxxx as provided by this Agreement
within two (2) business days after NEDAK and NEDAK's lender's
receipt of Xxxxxx'x written demand for payment, and failure to
cure within such time period. Xxxxxx shall also have the right to
specifically enforce the terms of this Agreement, including, but
not limited to, the obligation of NEDAK to purchase all of the
corn needed to operate the plant from Xxxxxx.
(c) No Exclusive Remedy. No right, power or remedy conferred by this
Agreement shall be exclusive of any other right, power or remedy
now or hereafter available at law, in equity, by statute or
otherwise.
6.3 Waiver. Waiver or the lack of enforcement of its right by either party
of any breach of the terms and conditions herein contained shall not
be construed as a waiver of any subsequent breach of the same or any
other provision of this Agreement.
7. FORCE MAJEURE.
7.1 Relief from Obligation to Deliver or Accept Grain. In the event of
either party being rendered reasonably unable by Force Majeure to
perform any of its obligations in receiving or delivering Grain
hereunder, the obligations of such party shall be suspended, to the
extent it is unable, in whole or in part, to receive or deliver Grain
by reason of Force Majeure, during the continuance of any inability so
caused and the cause of such inability shall, so far as possible, be
remedied with reasonable diligence. However, the party not subject to
the Force Majeure event may, during such period, accept performance
from the other party or a third party as it may reasonably determine
under the circumstances.
7.2 Force Majeure Expenses.
(a) Notice by Xxxxxx of Force Majeure. Upon notice by Xxxxxx of Force
Majeure, NEDAK may: (i) in good faith and without unreasonable
delay, make any reasonable purchases of Grain in substitution of
the quantity due from Xxxxxx, and (ii) recover from Xxxxxx as
damages the difference between the cost of cover under (i) and
the Xxxxxx posted price (or the average price at the comparable
location(s), if Xxxxxx does not have a posted price), plus the
Service Fee, but less expenses saved in consequence of Xxxxxx'x
breach.
(b) Notice by NEDAK of Force Majeure. Upon notice by NEDAK of Force
Majeure, Xxxxxx may: (i) in good faith and without unreasonable
delay, attempt to settle any existing purchase agreements with
Grain Suppliers to release NEDAK of any obligation to take
delivery or Grain or negotiate an
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alternate purchaser for such Grain, and (ii) recover from NEDAK
as damages the settlement amount or the difference between the
cost of corn and the covering sale under, plus the Service Fee,
but less expenses saved in consequence of NEDAK's breach. The
parties understand and agree that, upon resumption of normal
operations, the obligation to pay any such Force Majeure expenses
by NEDAK shall be subordinate to payment of operating expenses
and debt service payments.
8. INDEMNITY.
8.1 Xxxxxx Duty to Indemnify. Xxxxxx agrees to indemnify and hold NEDAK
harmless against any and all claims, losses, damages or expenses by or
on behalf of any person or entity arising out of the performance of
any covenant or agreement to be performed by Xxxxxx, or arising from
any act or negligence or willful misconduct on the part of Xxxxxx, any
person or entity claiming by, through or under Xxxxxx or its agents,
contractors, employees or invitees, including reasonable attorney
fees, expenses, and liabilities, incurred in connection with any such
claim or action or proceeding brought against NEDAK.
8.2 NEDAK Duty to Indemnify. NEDAK agrees to indemnify and hold Xxxxxx
harmless against any and all claims, losses, damages or expenses by or
on behalf of any person or entity arising out of the performance of
any covenant or agreement to be performed by NEDAK, or arising from
any act or negligence or willful misconduct on the part of NEDAK, any
person or entity claiming by, through or under NEDAK or its agents,
contractors, employees or invitees, including reasonable attorney
fees, expenses, and liabilities, incurred in connection with any such
claim or action or proceeding brought against Xxxxxx.
9. NON-DISCLOSURE. Except as and to the extent required by law, neither party,
nor its employees, officers, affiliates, or agents, will disclose or permit
disclosure of the terms of this Agreement. The partieswill direct their
representatives not to make, directly or indirectly, any public comment,
statement or communication with respect to, or otherwise to disclose or to
permit the disclosure of the terms of this Agreement. If a party is
required by law to disclosure the terms of this Agreement, it must first
provide in writing to the other party the content of the proposed
disclosure, the reasons that such disclosure is required by law, and the
time and place that the disclosure will be made. Xxxxxx acknowledges and
agrees that this Agreement may be subject to public disclosure in
connection with filings of NEDAK to the Securities Exchange Commission.
10. MISCELLANEOUS PROVISIONS.
10.1 Notices. All notices, demands or requests by one party to another
party shall be given at the address provided on Schedule 10.1. Notices
may be given by facsimile. Each party shall have the right, from time
to time, to designate a different address by notice given in
conformity with this section.
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10.2 Successors in Interest. Each and all of the covenants, conditions and
restrictions in this Agreement shall inure to the benefit of and shall
be binding upon the successors, assigns, transferees, sublessees,
licensees of the parties hereto; provided, however, that if Xxxxxx
sells to or is acquired by any other cooperative, corporation or
entity, and does not retain majority ownership or control, this
Agreement shall terminate, at the option of NEDAK.
10.3 Relationship of Parties. No agency, partnership, joint venture or any
other special relationship between the parties is created by this
Agreement. Neither party will act or present itself, directly or
indirectly, as an agent of the other or in any manner assume or create
any obligation on behalf of, or in the name of, the other. All Grain
sold to NEDAK hereunder will be initially purchased by Xxxxxx in
Xxxxxx'x name and entirely for Xxxxxx'x account. NEDAK hereby consents
to establishment by Xxxxxx of the trade name "NEDAK Grain", provided
that Xxxxxx shall be responsible for any registration, licensing, or
bonding required thereby. In the event this Agreement is terminated
for any reason, Xxxxxx shall transfer all right, title and interest in
such trade name to NEDAK for no additional consideration.
10.4 Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the matters covered herein, and no other
agreement, statement or promise made by any party, to any employee,
officer, or agent of any party, which is not contained in this
Agreement shall be binding or valid.
10.5 Modification. This Agreement may not be modified or amended except in
writing duly executed by both parties and shall not be modified or
altered by any subsequent course of performance by either of the
parties, except as expressly otherwise herein provided.
10.6 Choice of Law. This Agreement shall be deemed to have been made and
executed in the State of Nebraska and the validity, construction,
interpretation, effect and enforcement thereof shall be governed by
the laws of the State of Nebraska.
10.7 Attorney's Fees and Costs. Should either party institute any action or
proceeding in court or before any arbitral body to enforce any
provision of this Agreement or any Grain sale contract or for damages
by reason of an alleged breach of any provision of this Agreement or
any Grain sale contract, the prevailing party will be entitled to
receive from the losing party such amount as the court or arbitral
body may adjudge to be reasonable attorneys' fees for the services
rendered to the prevailing party in such action or proceeding.
10.8 Headings and Captions. The headings and captions of the titles,
articles, sections, and subsections of this Agreement are inserted for
convenience of reference only, and do not constitute part of the
Agreement.
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10.9 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall in such event be deemed an
original, but all of which together shall constitute one and the same
instrument.
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The remainder of this page is intentionally left blank. Signature page
follows.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.
X.X. XXXXXX GRAIN CO., INC. NEDAK ETHANOL, LLC,
a Nebraska corporation a Nebraska Limited Liability Company
By: /s/ Xxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------- ----------------------------------
Name: Name: Xxxxxx Xxxxxxxxx
Title: Title: President and General Manager
S-1
Appendix A
Page 2
Appendix A to
Grain Procurement Agreement
Defined Terms
"Agreement" means, as referred to in the Preamble, this Grain Procurement
Agreement and all of its attached appendices, exhibits, schedules and other
attachments.
"Event of Default" means and includes any of the events set forth in Section
6.1.
"Force Majeure" means natural catastrophes, strikes, lockouts, or other
industrial disturbances, acts of the public enemy, wars, declared or undeclared,
blockades, insurrections, riots, fires, civil disturbances, explosions,
curtailment of power or natural gas, compliance with laws, governmental
regulations, orders and requests, whether valid or not, curtailment or other
inability to obtain equipment, supplies, materials, including Grain, or
transportation facilities, breakdown of facilities, machinery or equipment and
any other cause whether of the kinds herein enumerated or otherwise, not within
the reasonable control of the party claiming suspension, all of which by the
exercise of due diligence such party could not have reasonably foreseen and
provided against; provided, however, that the settlement of strikes or lockouts
shall be entirely within the discretion of the party having the difficulty.
"Freight Supplier" means any railroad, trucking company, individual trucker,
shipping container company or other freight service provider.
"Governmental Authority" means any federal, state, local or foreign court,
governmental agency, authority, instrumentality or regulatory body with
jurisdiction over the parties, the property of the parties or the activities
described in or contemplated by this Agreement.
"Governmental Requirement" means all laws, statutes, codes, ordinances and
governmental rules, regulations and requirements of any Governmental Authority
that are applicable to the parties, the property of the parties or activities
described in or contemplated by this Agreement.
"Grain" means, as referred to in Section 2.1(a), No. 2 yellow corn, and other
specialty corn and other commodities as may be mutually agreed by the parties
meeting the terms and conditions set forth in this Agreement.
"Grain Supplier" means any producer, reseller, marketer, handler or other
merchant of Grain.
"Plant" has the meaning ascribed thereto in Recital A.
"Service Fee" has the meaning ascribed thereto in Section 2.4(c) of this
Agreement.
Schedule 2.2
Page 2
Schedule 2.2 to
Grain Procurement Agreement
Communications Schedule
I. NEDAK Reports. NEDAK will provide Xxxxxx with estimates of Grain required and
other information regarding estimated production schedules as follows:
o Monthly - At least 10 business days before the beginning of each
month:
o Production schedule for coming month, with any maintenance or
other planned operation down times identified
o Daily projected Grain needs for coming month based on planned
operation schedule
o Estimated Grain needs for 2 months following immediately
succeeding month, with any scheduled down time periods of than
more 24 hours identified
o Weekly - Not later than 11:00 AM on each Wednesday:
o Production schedule (with scheduled down time identified) and
estimated Grain required for Monday through Sunday of following
week
o Revisions to previously provided estimate of Grain required for
Thursday through Sunday of current week
o Recap / Summary of prior week's (Monday through Sunday) Grain
usage, ethanol production and operation times
o Daily - Not later than 11:00 AM each day:
o Prior day's corn grind and operation schedule (including
scheduled and unscheduled down time)
o Grain deliveries received prior day
o Estimated Grain inventory as of 8:00 AM
o Immediately - NEDAK will notify Xxxxxx of any unscheduled interruption
of operations that either lasts or is expected to last more than 4
hours
Daily inventories based on Grain on hand at Plant as of 8:00 AM. Daily Grain
usage and production information based on use and production from 8:00 AM on
prior day to 8:00 AM of day of report.
II. Xxxxxx Reports. Xxxxxx will provide NEDAK with the information regarding
Grain contracted for delivery to the Plant as follows:
o Grain contracted with producers for delivery during coming week,
month, and quarter.
Schedule 2.3
Page 2
Schedule 2.3 to
Grain Procurement Agreement
Discount Schedule
All Grain purchased will be based on U.S. No. 2 Yellow Corn - 15.0% moisture
The following discounts will apply on Grain not meeting No. 2 Standards:
-------------------------------------- -------------- --------------------------------------------- ------------------
Standard
Factor Quality Adjustment Minimum/ Maximum
------ ------- ---------- ----------------
o Moisture: 15.0% $ 0.025 for each 0.5% over 15.0% 16.0% Max
-------------------------------------- -------------- --------------------------------------------- ------------------
o Damage: 5.0% $ 0.01 for each point over 5.0% 10.0% Max
-------------------------------------- -------------- --------------------------------------------- ------------------
o Test Weight: 54 lbs $ 0.02 for each lb below 54 lbs 52 lbs min
-------------------------------------- -------------- --------------------------------------------- ------------------
o Broken Grain and Foreign 3.0% $ 0.02 for each point over 3.0% 5.0% max
Material:
-------------------------------------- -------------- --------------------------------------------- ------------------
o Sour: $ 0.10 per bushel
-------------------------------------- -------------- --------------------------------------------- ------------------
o Musty: $ 0.05 per bushel
-------------------------------------- -------------- --------------------------------------------- ------------------
o Commercially Objectionable $ 0.10 per bushel
Foreign Odor (COFO):
-------------------------------------- -------------- --------------------------------------------- ------------------
o Weevil Damage: $ 0.10 per bushel (Grain rejected if
evidence of live Weevils)
-------------------------------------- -------------- --------------------------------------------- ------------------
o Heat Damage: - $ 0.01 for each 1/10th of 1% over
0.5%
- $ 0.02 for each 1/10th of 1% over
1%
-------------------------------------- -------------- --------------------------------------------- ------------------
All discounts will be assessed as a reduction to price on a per bushel basis.
NEDAK reserves the right to refuse delivery of any Grain that does not meet
specifications as purchased.
Subject to change by NEDAK without notice.
Schedule 2.2
Page 2
Schedule 10.1 to
Grain Procurement Agreement
Notice Addresses
For NEDAK: NEDAK Ethanol, LLC
Attn: Xxxxxx Xxxxxxxxx
00000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx, LLP
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
For Xxxxxx: X.X. Xxxxxx Grain Co., Inc.
Attn: Xxx Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
