DISTILLER'S GRAINS MARKETING AGREEMENT
EXHIBIT
10.7
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
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.
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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)
two percent (2%) 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 $1.30.
(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) three percent (3%) 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
$1.00.
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).
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
and expenses 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.
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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
at the Plant during a given week (i.e. Sunday through Saturday) so that the
payment is received by Producer on or before the second (2nd)
following Friday 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. Any late payments shall accrue interest
in
accordance with Section 37.
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 fulltime 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 one-half
percent (.50%) 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, if mutually agreed by Gold and
Producer, 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) estimate 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 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. No loading of Distiller's Grains at the Plant
shall occur outside of Producer's normal and ordinary course business hours
without Producer's consent, which consent shall not be unreasonably delayed,
withheld or conditioned.
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Gold
and
Producer 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 load out and
storage areas for Distiller's Grains at the Plant and to the scales at 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 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 8 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 all trucks and railcars to be at the Plant
for pick-up of Distiller's Grains in accordance with Gold's loading schedules
as
provided to Producer 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 ordinary wear and tear and
depreciation.
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(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 xxxx 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, and Producer agrees to use
Producer's commercially reasonable efforts to obtain access to and the use
of
railcars, through a railcar lease or other arrangement, for the shipment and
transportation of the Distiller's Grains and to make such of those railcars
as
are designated by Producer 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.
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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, at the time of delivery by Producer to
Gold, 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 (i) such failure shall not be caused by
Gold, Gold's ultimate customer or another third party after Producer's delivery
of such Distiller's Grains to Gold, and (ii) 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 12 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 in accordance with this Section (the
"Rejected Grains"), Gold will, in the following order:
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(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, in Producer's
discretion and at Producer's cost and expense;
(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 in accordance with this Section
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 loading, and will retain the samples for not
less than six months.
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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 any kind or 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 Xxxx by Producer shall not grant Producer any rights in the Xxxx, 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.
Except
as may be otherwise stated in this Agreement, 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 and facilities.
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(b) 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.
(c) Producer
shall provide Gold with not less than three months prior written notice of
any
change in any of the technology which is from time to time utilized at the
Plant
if such change may have a material effect on the Distiller's Grains, including
on the quantity or quality of the Distiller's Grains.
(d) 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.
(e) 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.
(f) Producer
shall promptly, but in any event within 48 hours, advise Gold in writing of
any
material problems with respect to any Distiller's Grains.
(g) Producer
shall promptly, but in any event within 48 hours, advise Gold in writing 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.
(h) 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.
(i) 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.
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00. 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 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 in the case of a Producer Identified Purchaser (as that term is
defined in Section 14(j)) and with respect to allocations of sales during times
of excess supply of distiller's grains, 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.
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(g) Gold
shall promptly, but in any event within 48 hours, advise Producer in writing
of
any material problems or questions raised by any customer with respect to any
Distiller's Grains.
(h) Gold
shall promptly, but in any event within 48 hours, advise Producer in writing
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.
(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 (i) freight rates, (ii) prices
and trends in the distiller's grains markets, and (iii) any bona fide purchaser
of distiller's grains which is identified by Producer and which purchaser is
offering to purchase distiller's grains at a price which is higher than the
F.O.B. Plant Price last offered to Producer by Gold and for a similar amount
of
distiller's grains and for a similar delivery period (each, a "Producer
Identified Purchaser").
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.
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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 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.
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 good will, 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.
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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
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.
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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 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
the following (i) general, nontargeted solicitation such as general
advertisements; or (ii) discussions with any employee of the other where such
employee initiates the contact on the employee's own initiative and without
any
contact, solicitation or prompting, whether directly or indirectly, by Gold
or
Producer, as the case may be.
Without
limiting 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, solicits, contacts,
employs or otherwise engages any individual in violation of the preceding
paragraph, Gold or Producer, as the case may be, shall 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.
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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 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.
Gold
and
Producer also agree that a 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 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 two years 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 12 month period following
the
Effective Date, 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 after
the Effective Date as follows:
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(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 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 and 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.
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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 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 reasonable 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.
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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 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.
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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 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.
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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. 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 13(i), but it is not intended
that
any such third parties shall have any direct rights or remedies against Producer
under this Agreement.
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 five 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 five 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%).
E-20
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 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 and Producer hereby object to any additional, different or
inconsistent terms which may be set forth in any purchase order or any other
document that Producer or Gold, as the case may be, may at any time and from
time to time submit to the other, 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 or Gold hereunder, the terms and
conditions of this Agreement shall govern and control to the full extent of
such
conflict or inconsistency.
E-21
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.
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
similar 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 of 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,
on
the one hand, and Producer, on the other hand, 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, or
otherwise bind Producer in any manner.
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.
E-22
IN
WITNESS WHEREOF, Gold and Producer have executed and entered into this Agreement
as of the 1st day of October, 2007.
|
HAWKEYE
GOLD, LLC
|
||||
|
By:
|
/s/
Xxxxxxx Xxxxx
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
|
Name:
X.X. Xxxxx
|
Name:
Xxxxx Xxxxxxx
|
|||
|
Title:
President
|
Title:
Director Marketing & Transportation
|
|||
|
00000
X. Xxxxxxx Xxx.
|
X.X.
Xxx 0000 - 000 X. Xxxx
|
|||
|
Xxxxxx,
Xxxx 00000
|
Ames,
Iowa 50010-2523
|
|||
|
Attn:
Xxxx Xxxxx
|
Attn:
Xxxxx Xxxx
|
|||
|
Fax
Number: 000-000-0000
|
Fax
Number: 000-000-0000
|
|||
|
Email
Address: xxxxxx@xxxxxxxxxxxxxxxx.xxx
|
Email
Address: xxxxx@xxxxxxxx.xxx
|
|||
|
Location
of Plant: Nevada, Iowa [Recital A]
|
Termination
Fee Amount: $125,000 Section 24(a)]
|
|||
|
Monthly
Production: 13,400 Tons [Section 7]
|
||||
|
Effective
Date; October 1, 2007 [Section 22]
|
||||
|
Producer
Representative: Xxxxx Xxxxxxxxx
|
||||
|
or
Xxxx Xxxxx [Section 12(c)]
|
||||
|
Exhibit
A - Minimum
Quality Standards [Section 8]
|
||||
|
Exhibit
B - Composite
Analysis Matters [Section 10]
|
||||
E-23
EXHIBIT
A
MINIMUM
QUALITY STANDARDS
|
Component
|
Minimum
|
Maximum
|
|||
|
DDG
|
Protein
|
26
%
|
N/A
|
||
|
Fat
|
7.5
%
|
N/A
|
|||
|
Fiber
|
N/A
|
15
%
|
|||
|
Ash
|
N/A
|
5
%
|
|||
|
Moisture
|
10
%
|
13
%
|
|||
|
Component
|
Minimum
|
Maximum
|
|||
|
WDG
|
Protein
|
10.5
%
|
N/A
|
||
|
Fat
|
3
%
|
N/A
|
|||
|
Fiber
|
N/A
|
5
%
|
|||
|
Ash
|
N/A
|
2.5
%
|
|||
|
Moisture
|
60
%
|
N/A
|
|||
|
Component
|
Minimum
|
Maximum
|
|||
|
Modified
WDG
|
Protein
|
15.0
%
|
N/A
|
||
|
Fat
|
4.5
%
|
N/A
|
|||
|
Fiber
|
N/A
|
9.0
%
|
|||
|
Ash
|
N/A
|
4.0
%
|
|||
|
Moisture
|
50
%
|
55
%
|
The
Distiller's Grains shall have Aflatoxin levels of less than 20 pbb. The
Distiller's Grains shall be no warmer than the higher of (i) the daily high
of
the ambient outside temperature or (ii) 60 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.
E-24
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
SIZE
E-25
