Terms and Conditions

GRAIN PURCHASE TERMS AND CONDITIONS
(“TERMS AND CONDITIONS”)
Date last updated: October 1, 2013

THESE TERMS AND CONDITIONS APPLY TO, AND GOVERN, ANY AND ALL PURCHASES OF GRAIN AND OILSEEDS (HEREAFTER “GRAIN”) BY CHIPPEWA VALLEY ETHANOL COMPANY, L.L.L.P. AND/OR CHIPPEWA VALLEY AGRIFUELS COOPERATIVE (EITHER OF WHICH SHALL BE THE “BUYER”, AS APPLICABLE). BUYER’S AGREEMENT TO PURCHASE ANY GRAIN IS EXPRESSLY CONDITIONED ON SELLER’S UNQUALIFIED ACCEPTANCE OF THESE TERMS AND CONDITIONS. THESE TERMS AND CONDITIONS ARE HEREBY EXPRESSLY INCORPORATED INTO AND A PARTY OF THAT CERTAIN MASTER AGREEMENT BETWEEN BUYER AND SELLER (THE “MASTER AGREEMENT”) AND THE TERMS OF ANY CONFIRMATION (AS DEFINED BELOW), CONTRACT OR AGREEMENT (COLLECTIVELY, ANY CONFIRMATION, CONTRACT OR AGREEMENT IS A “PURCHASE CONTRACT”) FOR THE PURCHASE OF GRAIN BY BUYER FROM SELLER. REFERENCE IN THESE TERMS AND CONDITIONS TO “CONTRACT” SHALL MEAN, COLLECTIVELY, THESE TERMS AND CONDITIONS, THE MASTER AGREEMENT AND ANY PURCHASE CONTRACT.

1. Except to the extent otherwise set forth in this Agreement, a Purchase Contract or these Terms and Conditions, all purchases of Grain shall be subject to the Grain Trade Rules (the “Rules”) of the National Grain and Feed Association (“NGFA”), which are incorporated herein. A copy of the Rules can be found at the website of the NGFA at www.ngfa.com. In the case of conflict between the Rules and this Contract, this Contract shall control. The parties to this Contract agree that the sole remedy for resolution of any and all disagreements or disputes arising under or related to this Contract shall be through arbitration proceedings before the NGFA pursuant to the NGFA® Arbitration Rules. The decision and award determined through such arbitration shall be final and binding upon Buyer and Seller. Judgment upon the arbitration award may be entered and enforced in any court having jurisdiction hereof.

2. Seller hereby agrees and acknowledges that, in the event Seller agrees to sell Grain to Buyer and has not signed a written contract memorializing such sale (such as via an oral agreement over the phone or otherwise), Buyer shall send a contract confirmation (a “Confirmation”) to Seller memorializing such sale and Seller shall have four (4) days from the date of Confirmation to provide Buyer notice of objection to such Confirmation. In the event Seller does not provide to Buyer notice of objection to such Confirmation within such four (4) day period, then such Confirmation shall be binding. This Section 4 is agreed to by, and binding upon, Seller and Buyer notwithstanding any provision of Minnesota law including, without limitation, Minnesota Statute § 1572.0010(4) and Minnesota Statute § 336.2-201.

3. Seller agrees to deliver all Grain as set forth in the Purchase Contract to Buyer on the terms set forth in this Contract. Notwithstanding any provision of the Rules or this Contract, in no event shall Buyer be liable or obligated to pay Seller any amounts as a result of Seller’s failure to deliver all Grain set forth in a Purchase Contract, including if Buyer’s subsequent buy-in of such Grain from third parties is at a discount to the price payable to Seller had Seller performed (or any similar circumstance).

4. Buyer in its sole discretion may accept or reject any amount of Grain delivered in excess of the amount set forth in a Purchase Contract (the “overfill”). Pricing of overfill accepted for delivery by Buyer shall be made at Buyer’s closing market price at the close of business on the day that the Grain are unloaded. Underfills with respect to any Purchase Contract shall only be permitted upon the mutual agreement of Buyer and Seller.

5. Payments due Seller under this Contract will be paid in compliance with applicable law after delivery by Seller and acceptance by Buyer of the contracted Grain according to the terms of this Contract. Amounts to be paid by Buyer to Seller pursuant to this Contract shall be reduced by the amount of any discounts, fees and underfill settlements hereunder, and by any other amounts owed by Seller to Buyer. Payment by Buyer is conditioned upon Seller’s completion of delivery of the total quantity set forth in the Purchase Contract (except for underfills as agreed pursuant to Section 4). Any payment made by Buyer to Seller prior to the completion of delivery of all Grain pursuant to a Purchase Contract shall be at the discretion of Buyer and shall not be a waiver of any obligations of Seller, or rights and remedies of Buyer, pursuant to this Contract.

6. Buyer reserves the right to reject any Grain that does not meet the grade and quality specified in this Contract, and such rejection by Buyer shall not excuse Seller from delivering Grain which meet the grade and quality specifications set forth in this Contract. The grade, quality and quantity of the Grain delivered shall be determined by Buyer; provided that, in the event of a dispute over the grade or quality of the Grain, samples of such Grain shall be sent to any official commodity inspector. Inspection fees charged by such official inspector shall be paid by Seller (or, in Buyer’s discretion, paid by Buyer and deducted from any amount to be paid to Seller).

7. All Grain delivered under this Contract shall be of merchantable quality, unadulterated and unrestricted from movement in interstate commerce within the meaning of the federal Food, Drug and Cosmetic Act, Environmental Protection Agency tolerances, the U.S. Grain Standards Act and other applicable federal and state law. Seller agrees and acknowledges that Grain containing transgenically enhanced genes/traits that have not been approved for import into the European Union, Mexico, Japan, South Korea, China or other U.S. export markets shall not be delivered pursuant to this Contract without the prior written consent of Buyer. Buyer shall have the right to reject such Grain, or, in Buyer’s sole discretion and only upon the delivery of written consent by Buyer to Seller, accept such Grain subject to the then-prevailing market discounts as determined by Buyer. In the event foreign matter or substance is discovered in such Grain, Seller shall take all action to cooperate with Buyer to determine such foreign matter or foreign substance and its content. Seller represents to Buyer that the sale of Grain under this Contract does not violate any agreement or license Seller has with any other party. Buyer has the right to test Grain delivered under this Contract for the presence of transgenically enhanced genes/traits, provided any such tests shall be in addition to, and do not substitute for or waive, any representations, warranties or obligations of Seller under this Contract.

8. Buyer has the right, without penalty, to delay the time for receiving delivery and making payment under this Contract if such delay is caused by government regulation or action, labor strikes, riots, insurrection, freight embargoes or transportation delays. Buyer shall receive delivery and, upon Buyer’s acceptance, make payment under this Contract as soon as reasonably practicable after the cause for delay has ceased.

9. This Contract shall not be assigned by Seller without the prior written consent of Buyer, and shall be binding upon the heirs, executors, administrators and successors of Buyer and Seller. This Contract (including the Rules) represents the entire agreement of Buyer and Seller regarding the subject matter hereof. No modification or amendment of this Contract shall be valid or binding unless agreed to by both parties and confirmed in writing by either party to the other in compliance with the Rules. The acceptance by Buyer of any delivery of Grain from Seller, or the payment of any sums by Buyer to Seller for such Grain, after the breach of this Contract by Seller shall not waive any rights or remedies available to Buyer as a result of the breach of this Contract by Seller. In the case of Seller’s default on any obligations owed by Seller pursuant to this Contract, Seller shall be liable to Buyer for all costs and expenses incurred by Buyer (including expenses relating to unwinding futures and options hedges and attorney’s fees) in enforcing this Contract and or collecting any damages found owing to Buyer. Buyer shall have the right to offset any monies otherwise payable to Seller against obligations owed by Seller to Buyer.

10. All the obligations of Seller (including representations and warranties) set forth in this Contract (including, without limitation, that the Grain delivered hereunder shall comply with the grade and quality specifications set forth in the applicable Purchase Contract and these Terms and Conditions) shall survive the delivery of all Grain hereunder and the payment of all amounts owed by Buyer to Seller hereunder, and shall not be affected by any investigation or testing which Buyer has performed or may perform in the future.

11. Seller expressly agrees that Buyer has the right to issue multiple party checks for payment for the Grain delivered hereunder should Buyer have reason to believe that a third party has or may assert a lien or encumbrance against such Grain or Seller. Further, if Buyer becomes aware of any security interests in the Grain, acceptance of the Grain in fulfillment of this Contract shall be at the option of Buyer. Any lien notification(s) received by Buyer prior to delivery or, or payment for, the Grain may be honored by Buyer.

12. These terms and conditions shall be posted at Buyer’s website cvec.com. Buyer may update and modify these Terms and Conditions at any time by publishing changes to such Terms and Conditions at Buyer’s website cvec.com without providing any notice thereof to Seller other than by changing such Terms and Conditions as posted on such website. Any updated and/or modified Terms and Conditions shall apply to and govern any and all purchases of Grain by Buyer from Seller which purchases occur after the date of such update and/or modification, but such updates and/or modifications shall not apply to any Grain purchased by Buyer prior to the date of such update and/or modification. Seller acknowledges and agrees that Seller is solely responsible for remaining informed of any updates and/or modifications to these Terms and Conditions by periodically checking Buyer’s website.

13. In the event of any conflict between these Terms and Conditions, the Master Agreement or any Purchase Contract, these Terms and Conditions shall control unless Buyer and Seller expressly state their intent to supersede the applicable Terms and Conditions in a writing signed by each of them. Furthermore, in the event of any conflict between this Agreement or any Purchase Contract, this Agreement controls unless Buyer and Seller expressly state their intent to supersede this Agreement in a writing signed by each of them. Except as otherwise stated in these Terms and Conditions (including the Rules), the Master Agreement or any Purchase Contract, this Contract shall be governed by Minnesota law.

14. THIS IS NOT A STORAGE CONTRACT. BUYER BECOMES THE OWNER OF ANY GRAIN WHICH SELLER DELIVERS TO BUYER AND BUYER ACCEPTS UNDER A PURCHASE CONTRACT AND, AT SUCH TIME, SELLER RELINQUISHES OWNERSHIP AND CONTROL OF SUCH GRAIN AND BECOMES AN UNSECURED CREDITOR PENDING PAYMENT.

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