DISTILLER’S GRAIN MARKETING AGREEMENT
THIS DISTILLER’S GRAIN MARKETING AGREEMENT (the “Agreement”), is entered into effective as of 10-11 , 2007, by Highwater Ethanol LLC, a Minnesota Limited Liability Corporation (“Seller”) and CHS, A Minnesota Cooperative Corporation (“Buyer”).
WHEREAS, Seller desires to sell and Buyer desires to purchase the Distiller’s Dried Grains with Solubles (“DDGS”), Wet Distillers Grains (“WDG”), and solubles (“Solubles”) (hereinafter DDGS, WDG and Solubles), are referred to collectively as the “Products”) output of the ethanol production plant which Seller owns in Lamberton, Minnesota.
WHEREAS, Seller and Buyer wish to agree in advance of such sale and purchase to the price formula, payment, delivery and other terms thereof in consideration of the mutually promised performance of the other;
NOW, THEREFORE, in consideration of the promises and the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties, it is hereby agreed:
1. BUYER PERFORMANCE. Buyer agrees to perform the services that it provides for Seller in a professional and competent manner.
2. PURCHASE AND SALE. Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller the entire bulk feed grade DDGS, WDG and Solubles output from Seller’s plant at Lamberton Minnesota, (hereinafter the “Plant”), subject to all terms and conditions set forth in this Agreement. Buyer shall label all Product that is sold by Buyer and shall register all labels with the states where the Products are sold.
3. TRADE RULES. All purchases and sales made hereunder shall be governed by the Feed Trade Rules of the National Grain and Feed Association unless otherwise specified. Said Trade Rules, a copy of which is appended hereto as Exhibit A, shall, to the extent applicable, be a part of this Agreement as if fully set forth herein.
4. TERM. The term of this Agreement shall be for one year commencing as of completion and start-up of production of the Plant. Start-up is anticipated to be January 1, 2009. Thereafter this agreement shall remain in effect until terminated by either party at its unqualified option by providing the other party hereto not less than 120 days written notice of its election to terminate this Agreement.
5. DELIVERY AND TITLE.
A. The place of delivery for all the Products sold pursuant to this Agreement shall be
FOB Plant. Buyer and Buyer’s agents shall be given access to Seller’s Plant in a manner and at all times reasonably necessary and convenient for Buyer to take delivery as provided herein. Buyer shall schedule the loading and shipping of all outbound Products purchased hereunder which is shipped by truck or rail. All labor and equipment necessary to load trucks or rail cars shall be supplied by Seller without charge to Buyer. Seller agrees to handle the Products in a good and workmanlike manner in accordance with Buyer’s reasonable requirements and in accordance with normal industry practice. Seller shall maintain the truck and rail loading facilities in safe operating condition in accordance with normal industry standards.
B. Seller further warrants that storage space for not less than seven days production of DDGS shall be reserved for Buyer’s use at the Plant and shall be continuously available for storage of DDGS purchased by Buyer hereunder at no charge to Buyer. Seller shall also make available the necessary storage for WDG and Solubles which is adequate for Buyer to market such products. Seller shall be responsible at all times for the quantity, quality and condition of any the Products in storage at the Plant. Seller shall not be responsible for the quantity, quality and condition of any of the Products stored by Buyer at locations other than the Plant.