Item 1.01 Entry Into a Material Definitive Agreement
On December 23, 2020, Highwater Ethanol, LLC (the "Company") and RPMG, Inc.
("RPMG") executed a High Purity Alcohol Member Marketing Agreement (the
"Agreement"). The terms of the Agreement become effective January 1, 2021 (the
"Effective Date"). RPMG is currently the Company's exclusive marketer and
distributor of ethanol and corn oil. The Company is also an owner of Renewable
Products Marketing Group, LLC ("RPMG LLC"), the parent entity of RPMG.
The Agreement provides that RPMG will serve as the exclusive marketer of high
purity alcohol for the Company excluding certain high purity alcohol marketed or
sold under contracts in effect on the Effective Date. In exchange for the
exclusive marketing services, the Company will pay a marketing fee to RPMG and
RPMG will use commercially reasonable efforts to obtain the best price for all
high purity alcohol conforming to certain specifications sold under the
Agreement. RPMG will forward confirmations of the volume, FOB sales price and
other terms to the Company. RPMG shall be responsible for and bear the risk of
loss for all high purity alcohol from the time the product crosses the loading
flange at the facility. RPMG shall purchase high purity alcohol at an amount
equal to the FOB price less any applicable cost.
The Agreement shall automatically terminate when the Company ceases to be an
owner of RPMG LLC, subject to the expiration of the initial term. In addition,
upon breach by the other party, the Agreement may be terminated by either party
after providing notice and expiration of the applicable cure period. RPMG may
terminate the Agreement upon the Company's insolvency, receivership, or
bankruptcy or if the Company ceases to produce high purity alcohol for thirty
days or more. The Company may terminate the Agreement, following expiration of
the initial term, upon notice and provided the Company delivers all high purity
alcohol subject to confirmations of sale provided by RPMG to the Company. The
Company shall also be obligated to accept assignment from RPMG of the lease of
certain rail cars following termination.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description
99.1 High Purity Alcohol Member Marketing Agreement Between Highwater
Ethanol, LLC and RPMG, Inc. **
**Confidential information redacted.
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