Exhibit 10.1
Confidential Treatment
Requested. Confidential portions of this document have been
redacted and have been separately filed with the
Commission.
RPMG
Renewable Products Marketing
Group, Inc.
CORN OIL
MARKETING AGREEMENT WITH
GOLDEN GRAIN ENERGY, LLC.
*** Confidential material
redacted and filed separately with the Commission.
CORN OIL MARKETING
AGREEMENT
THIS CORN OIL MARKETING AGREEMENT (the “
Agreement ”) is made and entered into as of the
27th day of January, 2009 (the “ Effective Date
”) by and between RPMG, INC., a Minnesota corporation
(“ RPMG ”) and Golden Grain Energy, an Iowa LLC
(“ Producer ”), collectively referred to
hereinafter as “Parties” or individually as a
“Party”.
RECITALS
A.
RPMG markets CORN OIL (as
hereinafter defined).
B.
Producer produces CORN OIL at
Producer’s ethanol production facility located at Mason City,
IA (the “ Ethanol Facility ”).
C.
The Parties do desire that RPMG
shall market CORN OIL produced at the Ethanol Facility.
NOW, THEREFORE, in consideration of the
foregoing, the mutual promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows.
AGREEMENT
1.
Marketing of Corn
Oil. Producer shall
sell to RPMG, and RPMG shall purchase and market, all of
Producer’s production, excluding such production
Producer sells directly to the entities set forth on Schedule
1 attached hereto, of corn oil produced at the Ethanol
Facility, including any expansion or increase in capacity at the
Ethanol Facility. RPMG shall be the exclusive marketer of
corn oil and Producer shall not, either itself (except as set forth
in the foregoing sentence) or through any affiliate or any third
party, market any corn oil during the term of this Agreement.
Except as otherwise provided in this Agreement, RPMG shall provide
management resources to market and sell corn oil, including the
management of logistics and collection.
2.
Payments to Producer;
Commissions; Audit Rights
(a)
Payments to Producer
. Subject to the other terms
of this Agreement, RPMG shall pay Producer for its corn oil in
accordance with the terms set forth in Exhibit A
. RPMG shall use commercially reasonable efforts to make such
payments to Producer on an average net ten
(10) days.
(b)
RPMG Commission
. Producer shall pay RPMG
commissions as follows: $*** for each pound of corn oil sold to
third party end purchasers (each, an “ End Customer
”). Parties shall from time to time, or upon the
reasonable request of RPMG, negotiate in good faith adjustments to
the foregoing commissions to reflect prevailing commissions being
paid to marketers of corn oil produced by third parties in the
United States.
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(c)
Accessorial Charges
. As set forth on
Exhibit A , RPMG shall be responsible for payment of
Accessorial Charges (as defined in Exhibit A ) to third
parties; provided, however, that Producer agrees (i) to
promptly reimburse RPMG for such Accessorial Charges upon
submission to Producer of an invoice itemizing such Accessorial
Charges, and (ii) that RPMG may deduct and setoff the
Accessorial Charges from and against payments due to Producer by
RPMG.
(d)
Late Payments
. Overdue amounts not disputed
in good faith payable to either Party shall be subject to late
payment fees equal to interest accrued on such amounts at the
maximum rate permitted by applicable law.
(e)
No Warranty as to
Prices . RPMG shall
market Producer’s corn oil using commercially reasonable
efforts and the same standards it uses to market the corn oil
production of third parties for whom RPMG provides corn oil
marketing services. RPMG shall endeavor to (i) maximize
the corn oil price and minimize freight and other costs relevant to
corn oil sales and (ii) achieve the best available return to
Producer, subject to relevant market conditions. PRODUCER
ACKNOWLEDGES THAT RPMG MAKES NO REPRESENTATIONS, GUARANTEES OR
WARRANTIES OF ANY NATURE WHATSOEVER AS TO THE PRICES AT WHICH IT
SHALL BE ABLE TO SELL PRODUCER’S CORN OIL TO END
CUSTOMERS.
(f)
Waiver of Certain
Claims . Producer
acknowledges (i) that RPMG shall use its reasonable judgment
in making decisions related to the quantity and price of corn oil
marketed under this Agreement, in light of varying freight and
other costs, and (ii) that RPMG may sell and market corn oil
of third parties into the same markets where RPMG sells
Producer’s corn oil. Producer waives any claim of
conflict of interest against RPMG or for failure by RPMG to
maximize the economic benefits of this Agreement for Producer in
light of the foregoing.
(g)
Audit Rights
. Within ninety (90) days
following the end of RPMG’s fiscal year end, Producer shall
give written notice to RPMG of its desire to conduct an audit of
its corn oil payments to Producer for the preceding year and RPMG
shall provide reasonable access to all financial information
necessary to complete such audit. The audit shall be conducted by
an accounting firm agreeable to both Parties and shall be completed
within forty-five (45) days after the completion of RPMG’s
annual audit, but no later than one hundred and fifty (150) days
following RPMG’s fiscal year end. The cost of the audit
shall be the responsibility of Producer unless the auditor
determines that RPMG underpaid Producer by more than three percent
(3%) for the period audited, in which case RPMG shall pay the cost
of the audit. If the auditor determines that RPMG underpaid
Producer, RPMG shall promptly pay such underpayment to Producer and
if the auditor determines that RPMG overpaid Producer, Producer
shall promptly pay the overpayment to RPMG. The determination
of the auditor shall be final and binding on both Parties. If
Producer fails to exercise its right to audit as provided in this
Section 2(g) for any year, it shall be deemed to have
waived any rights to dispute payments made to Producer for that
year.
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3.
Scheduled
Production
(a)
Notice of First
Delivery . RPMG may
begin to market Producer’s corn oil upon the Effective
Date. If Producer is not producing corn oil as of the
Effective Date, Producer shall, on the Effective Date, provide RPMG
with the projected date on which Producer will first deliver corn
oil produced at the Ethanol Facility to RPMG (the “
Projected Date of First Delivery ”). Producer
shall notify RPMG as soon as possible of any revisions to the
Projected Date of First Delivery.
(b)
Notices of Scheduled
Production .
Beginning on the Effective Date, and on the 1 st and 15 th of
each month thereafter, Producer shall provide to RPMG a rolling
best estimate of production and inventory by corn oil product for
that month and each of the following twelve (12) months.
Beginning on the Effective Date and each Wednesday thereafter,
Producer shall provide to RPMG a best estimate of production and
inventory by corn oil product for that day and the next seven
days.
(c)
Additional Production
Notices . Producer
shall notify RPMG of anticipated production downtime or disruption
in corn oil availability at least one (1) month in advance of
such outage. Producer shall timely inform RPMG of daily
inventories, plant shutdowns, daily production projections, and any
other information (i) to facilitate RPMG’s performance
of the Agreement or (ii) that may have a material adverse
effect on RPMG’s ability to perform the Agreement.
(d)
RPMG Entitled to Rely on Producer
Estimates and Notices . RPMG, in marketing and selling
Producer’s corn oil, is entitled to rely upon the production
estimates and other notices provided by Producer, including without
limitation those described in Sections 3(a), (b), and (c).
Producer’s failure to provide accurate information to
facilitate RPMG’s performance of the Agreement may negatively
impact RPMG’s ability to market and sell corn oil at
prevailing prices. Producer’s failure to provide
accurate information to facilitate RPMG’s performance of the
Agreement may be deemed by RPMG, in its sole but reasonable
discretion, a material breach of the Agreement by
Producer.
(e)
Sale Commitments
. From time to time during the
term of this Agreement and in order to maximize the sales price of
corn oil, RPMG may enter sales contracts or other agreements with
End Customers for future delivery of corn oil. In the event
Producer fails to produce corn oil in accordance with the
information provided to RPMG under Sections 3(a), (b), or
(c) above for reasons other than Force Majeure (as defined in
Section 10 herein), and as a result RPMG is required to
purchase corn oil from third parties to meet previous corn oil sale
commitments that are based upon such information, RPMG may charge
Producer the amount (if any) that the price of such replacement
corn oil exceeded the price that RPMG would have paid to Producer
for the applicable corn oil under this Agreement.
4.
Logistics and
Transportation
(a)
No Liens, Title and Risk of
Loss .
Producer warrants that corn oil delivered to RPMG hereunder shall
be free and clear of all liens and encumbrances of any nature
whatsoever other than liens in favor of RPMG. Title to and
risk of loss of each load of corn oil shall pass to RPMG at the
time such load passes across the scale into rail cars or trucks at
the Ethanol Facility (the “ Title Transfer Point
”).
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Until such time, Producer shall be
deemed to be in control of and in possession of the corn
oil.
(b)
Loading . RPMG shall schedule the loading and
shipping of all outbound corn oil purchased hereunder, but all
labor and equipment necessary to load trucks and rail cars and
other associated costs shall be supplied and borne by Producer
without charge to RPMG. Producer shall handle the corn oil in
a good and workmanlike manner in accordance with RPMG’s
written requirements and normal industry practice. Producer
shall maintain the truck and rail loading facilities in safe
operating condition in accordance with normal industry standards
and shall visually inspect all trucks and rail cars to assure
(i) cleanliness so as to avoid contamination, and
(ii) that such trucks and railcars are in a condition suitable
for transporting the corn oil. RPMG and RPMG’s agents
shall have adequate access to the Ethanol Facility to load
Producer’s corn oil on an industry standard basis that allows
RPMG to economically market Producer’s corn oil. RPMG’s
employees shall follow all reasonable safety rules and
procedures promulgated by Producer and provided to RPMG reasonably
in advance and in writing. Producer shall supply product
description tags, certificates of analysis, bills of lading and/or
material safety data sheets that are applicable to all
shipments. In the event that Producer fails to provide the
labor, equipment and facilities necessary to meet RPMG’s
loading schedule, Producer shall be responsible for all costs and
expenses, including without limitation actual demurrage and wait
time, incurred by RPMG resulting from or arising in connection with
Producer’s failure to do so.
(c)
Transportation and Certain
Transportation Costs . RPMG shall perform certain logistics
functions for Producer, including the arranging of rail and truck
freight, inventory management, contract management, bills of
lading, and scheduling pick-up appointments. RPMG shall
determine the method of transporting corn oil to End
Customers. Notwithstanding any provision to the contrary
herein, Producer shall be solely responsible for any damage to any
trucks, railcars, equipment, or vessels caused by acts or omissions
of Producer and its consignees. All truck freight charges and
rail tariff rate charges shall be billed directly to RPMG and, as
set forth in Exhibit A , be recouped by RPMG from the
proceeds of RPMG’s sales of corn oil to End Customers.
Notwithstanding the foregoing, rail cars required to transport the
corn oil will be leased directly by Producer. If requested in
writing by Producer, RPMG will make lease payments for such rail
cars on behalf of Producer, and in such event RPMG shall recoup
lease payments from the proceeds of RPMG’s sales of corn oil
to End Customers.
(d)
Weight . The quantity of corn oil delivered to
RPMG at the Ethanol Facility shall be established by weight
certificates obtained from Producer’s scales or from such
other scales as the Parties shall mutually agree, which are
certified as of the time of weighing and which comply with all
applicable laws, rules and regulations. Producer shall provide
RPMG with a fax/emailed copy of the outbound weight certificates on
a daily basis and, except as otherwise expressly agreed upon, such
outbound weight certificates shall be determinative of the quantity
of corn oil for which RPMG is obligated to pay Producer pursuant to
this Agreement.
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(e)
Corn oil Storage at Ethanol
Facility . The
estimated storage capacity of the Ethanol Facility, is as
follows:
Corn Oil 30,000 gallons
5.
Specifications;
Quality.
(a)
Corn oil
Specifications .
Producer covenants that it shall produce corn oil that, upon
delivery to RPMG at the Ethanol Facility, meets the respective
specifications (“ Specifications ”) set forth in
Exhibit B and such other specifications that may be,
from time-to-time, promulgated by the industry for corn
oil. RPMG shall have the right to test each shipment of
corn oil to ascertain that the Specifications are being met.
If the corn oil provided by Producer to RPMG is shown, by
independent testing or analysis of a representative sample or
samples taken consistent with industry standards, to not meet the
Specifications through no fault of RPMG or any third party engaged
by RPMG, then RPMG may, in its sole discretion, (i) reject
such corn oil and require Producer to promptly replace such
non-conforming corn oil with corn oil that complies with the
Specifications, or (ii) accept such corn oil for marketing
and, if necessary, adjust the price to reflect the inferior
quality, as provided in Exhibit A . Payment and
acceptance of delivery by RPMG shall not waive RPMG’s rights
if corn oil does not comply with the terms of this Agreement,
including the Specifications.
(b)
Trade Rules
. This Agreement shall be
governed by the then-current Feed Trade Rules of the National
Grain and Feed Association (the “ Trade Rules
”), unless otherwise specified. In the event the Trade
Rules and the terms and conditions of this Agreement conflict,
this Agreement shall control.
(c)
Compliance With FDA and Other
Standards .
Producer warrants that, unless caused by the negligence or
intentional misconduct of RPMG or a third party engaged by RPMG,
corn oil provided by Producer to RPMG (i) shall not be
“adulterated” or “misbranded” within the
meaning of the Federal Food, Drug and Cosmetic Act (the “
Act ”), (ii) may lawfully be introduced into
interstate commerce under the Act, and (iii) shall comply with
all state and federal laws, rules and regulations (including
without limitation the Trade Rules) including those governing
quality, naming and labeling of bulk product. If Producer
knows or reasonably suspects t
