Common use of RISK MANAGEMENT PROGRAM Clause in Contracts

RISK MANAGEMENT PROGRAM. After review by Blackhawk Biofuels’ Board of Managers, with sufficient information to make decision and lender concurrence, Blackhawk Biofuels agrees to negotiate with REG Services to adopt the risk management program agreeable to both parties, which supports the procurement of feed stocks and chemical inputs hereunder (“Risk Management Program”). The objective of the program is to manage the commodity price risk resulting from fluctuating prices of feedstock (oils and fats), chemical inputs (methanol and catalysts), and the finished Products (biodiesel and glycerin) due to changing market conditions. Under the Risk Management Program, REG Services will utilize the Chicago Board of Trade, New York Mercantile Exchange, and other exchanges as warranted to establish an account or accounts in Blackhawk Biofuels’ name, and acquire instruments as necessary to implement risk management strategies. Such account(s) and instruments would be funded by Blackhawk Biofuels and managed by REG Services, with all resulting gains and losses from the purchase and sale transactions of any futures contracts, options, and cash instruments associated with the Risk Management Program to flow to the benefit of or be borne by Blackhawk Biofuels. If approved, Blackhawk Biofuels agrees to adopt such resolutions and execute such agreements as are reasonably necessary to implement the Risk Management Program, and pay transactional costs incurred to carry out such program.