EXHIBIT  10.2
 
EXECUTION COPY

 
AMENDED AND RESTATED AEMETIS KEYES
GRAIN PROCUREMENT AND
 
WORKING CAPITAL AGREEMENT
 
THIS AMENDED AND RESTATED GRAIN PROCUREMENT AND WORKING CAPITAL AGREEMENT (this
“Agreement”) is made on this 2nd day of May, 2013 (the “Effective Date”) by and
between J.D. HEISKELL HOLDINGS, LLC, a California limited liability company
doing business as J.D. Heiskell & Co. (“Heiskell”), and AEMETIS ADVANCED FUELS
KEYES, INC. (formerly known as AE ADVANCE FUELS KEYES, INC.),  a Delaware
corporation (“Aemetis Keyes”)
 
W I T N E S S E T H :
 
WHEREAS, Aemetis Keyes currently owns approximately 10 acres, more or less, of
real property in Keyes, California (the “Ethanol Property”) on which is situated
a 55-million-gallon-per-year ethanol production facility (the “Ethanol Plant”)
which Aemetis Keyes intends to operate; and
 
WHEREAS, to produce ethanol, Aemetis Keyes will need to purchase Corn and Milo
(also known as Grain Sorghum) as defined in Section 1.03 below (collectively,
“Grain”) for delivery by rail to the Ethanol Plant; and
 
WHEREAS in connection with such purchases Heiskell and Aemetis Keyes have
entered into that certain Corn Procurement and Working Capital Agreement dated
as of March 9, 2011 (as amended, restated, supplemented or otherwise modified
prior to the date hereof, the “Original Procurement Agreement”); and
 
WHEREAS, Aemetis Keyes has suspended operations of the Ethanol Plant and wishes
to re-open and to have this Agreement govern the terms of the Heiskell inventory
currently being held at the Ethanol Plant at the date hereof, repayment of
amounts due and owing to Heiskell at such time, and new purchases of Grain upon
the re-opening (the “Re-start”) of the Ethanol Plant (collectively, the
“Re-Start Terms”); and
 
WHEREAS, Aemetis Keyes has requested that Heiskell extend and amend the Original
Procurement Agreement; and
 
WHEREAS the parties now desire to amend and restate the Original Procurement
Agreement to cover, among others, the purchase of Grain, the terms and
conditions of such purchases, and the Re-Opening Terms; and
 
WHEREAS in connection with such purchases Heiskell and Aemetis Keyes have
entered  into an agreement with A.L. Gilbert Company, a California corporation
(“Gilbert”), whereby Aemetis Keyes and Heiskell (collectively referred to
therein as the “Producer”) will be allowed to receive shuttle train loads of
Corn and trucks or railcars of Milo which will be off-loaded by Gilbert into
[***] dedicated storage tanks (the “Gilbert Facility”) in accordance with UPRR
shuttle train program standards (the “Keyes Grain Handling Agreement”), as such
agreement is amended in a manner acceptable to Heiskell to conform to the terms
of this Agreement; and
 
 
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WHEREAS, the parties have entered into the following agreements to set forth
agreed-upon terms and conditions: (a) this Agreement, including any Sales
Contract (as defined below) entered into pursuant to this Agreement; (b) a
Security Agreement (the “Security Agreement”) pursuant to which, among other
things, Aemetis Keyes will grant a lien on its Grain and other collateral in
favor of Heiskell; (c) the Heiskell Purchasing Agreement (the “Heiskell
Purchasing Agreement”) pursuant to which Heiskell will agree to buy Ethanol,
WDGS, CDS/Syrup, and Corn Oil (as defined in Section 3.01 below) produced by
Aemetis Keyes; (d) the Keyes Ethanol and Corn Tank Lease (the “Lease”) pursuant
to which Aemetis Keyes will lease certain grain and ethanol product storage
tanks to Heiskell; (e) the Keyes Corn Handling Agreement (the “Handling
Agreement”) with Gilbert concerning the unloading and storage of Grain at the
Gilbert facility specified therein (the “Gilbert Facility”); and (f) the Lender
Consent and Agreement, as amended as of the date hereof in a form acceptable to
Heiskell (the “Lender Consent”), among Heiskell, Aemetis Keyes and the
Aemetis Keyes Lenders under the respective Aemetis Keyes credit facilities (the
“Lenders”) (the documents listed in clauses (a) through (f) above, as amended,
restated and/or extended from time to time, the “Related Agreements”); and
 
WHEREAS, pursuant to the Lender Consent, the Lenders will acknowledge Heiskell’s
ownership and rights in and to the Grain prior to its delivery to Aemetis Keyes,
and will subordinate, in favor of Heiskell, their respective security interests
in the Collateral (as defined in the Security Agreement and which include,
without limitation, Aemetis Keyes’s ground and otherwise processed Grain and
work in progress) to give Heiskell a first priority security interest in such
Collateral (the “First Priority Security Interest”);
 
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties agree as follows:
 
ARTICLE I
PURCHASE AND SALE TERMS AND PROCEDURES
 
Section 1.01. Grain Supply and Procurement.  Subject to the exceptions set forth
in this Agreement, Heiskell agrees to supply Aemetis Keyes and Aemetis Keyes
agrees to procure from Heiskell all of Aemetis Keyes’s requirements for whole
yellow corn (“Corn”) for the Ethanol Plant, as further described in Section 1.10
below.  In no event will the aggregate amount of Corn required to be delivered
to Aemetis Keyes within any four consecutive day period exceed [***].  From time
to time, Heiskell at its sole discretion also may enter into Sale Contracts with
Aemetis Keyes for milo/grain sorghum (“Milo”) in minimum amounts of
[***].  Aemetis Keyes agrees that all of its purchases are intended for use at
its Ethanol Plant, and any Grain which is purchased by Aemetis Keyes from
Heiskell that becomes excess due to changes in operating conditions will be
offered first to [***].
 
Section 1.02. Heiskell Offers.  Heiskell agrees that each day the Chicago Board
of Trade (“CBOT”) is in operation Heiskell will have offers for sale of Corn
[***] to be delivered to Aemetis Keyes and that Heiskell may make offers outside
of the hours of operation of the CBOT.  Sales Contracts for Milo will be on a
CIF Keyes basis and upon such additional terms specified in such Sale
Contracts.  Aemetis Keyes may accept offers as and when it determines in its
sole discretion.  In accordance with National Grain and Feed Association Rules,
an oral offer and acceptance will be converted to a written order and delivered
to Aemetis Keyes as agreed upon between Heiskell and Aemetis Keyes after Aemetis
Keyes’s oral acceptance of each offer.  The offer price of Grain to Aemetis
Keyes will be based on the [***].
 
 
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Section 1.03. Alternate Sources.  The parties agree that Aemetis Keyes may
source Corn from other suppliers subject to the following conditions:
 
(a) Direct Sourced Rail Corn.  Aemetis Keyes, acting individually or as part of
a strategic alliance, may source Corn directly from Corn growers or associations
of Corn growers (“Direct Sourced Rail Corn”) from Union Pacific
Railroad-approved 100-car shuttle loading facilities.  If Aemetis Keyes procures
Direct Sourced Rail Corn, Aemetis Keyes shall notify Heiskell of the volume of
Direct Sourced Rail Corn, which volume shall be reduced from the volume of Corn
to be sourced by Heiskell under this Agreement.  [***].
 
(b) Direct Sourced Truck Corn.  Aemetis Keyes, acting individually or as part of
a strategic alliance, may source Corn directly from Corn growers or associations
of Corn growers (“Direct Sourced Truck Corn”) from any local producer or seller
of corn in California.  If Aemetis Keyes procures Direct Sourced Truck Corn,
[***].
 
(c) Heiskell To Match Prices.  If Aemetis Keyes is aware of Corn offered by a
reliable supplier or at a FOB truck or rail point served by the UPRR and FOB
price that equates to a lower delivered price to Aemetis Keyes for the same
amount of Corn and the same shipment period as otherwise offered by Heiskell,
then Aemetis Keyes will advise Heiskell of such offers. [***]. Notwithstanding
the foregoing and without regard to price, Heiskell is not required to purchase
any Corn that, when received by Heiskell, would overburden the receiving,
storage or other logistical capacity of the Gilbert Facility and/or the industry
track serving its facility.
 
Section 1.04. Ownership and Sales.  The parties agree that Heiskell will own all
inventory in Aemetis Keyes’s Grain Bin and the Grain Day Tank (as each is
defined in the Lease) and will deliver such inventory to Aemetis Keyes on a
daily basis on the following conditions:
 
(a) Heiskell will [***] to the purchase price of all Grain purchased by Aemetis
Keyes on a daily basis for inventory shrinkage (at the point of origination)
(“Shrink”).  The amount of Shrink will be reflected on all invoices to Aemetis
Keyes.
 
(b) Aemetis Keyes shall purchase and empty all inventory from the Grain Bin and
the Grain Day Tank (each as defined in the Lease) at the Ethanol Plant at least
once per quarter. Heiskell and Aemetis Keyes will reconcile the inventory (“True
Up”) when the inventory is removed from the tank quarterly.  [***] agree to
renegotiate the Shrink if it is consistently over or under.
 
(c) The first True-Up after the Re-Start will be conducted by the parties
[***]  the Re-Start.
 
 
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(d) The in-line grain scale between the Ethanol Plant and Grain Day Tank will be
used for the True Up and will govern the weights used for the True Up.
 
(e) The purchase price for the Grain to be delivered each day must be
established before the time of delivery to the Ethanol Plant.
 
(f) Aemetis Keyes is ultimately responsible for all Shrink associated with the
handling of Grain at the Gilbert Feed Mill Storage and the Grain Day Tank.
 
Section 1.05. Heiskell Sale Contracts.  Oral agreements of sale will be recorded
by Heiskell and Heiskell will promptly thereafter generate and deliver to
Aemetis Keyes a written agreement evidencing each individual sale of Grain to
Aemetis Keyes (“Sale Contract”).  The Sale Contract will govern the particulars
of the sale [***] and shall constitute a binding obligation between Heiskell and
Aemetis Keyes.  Aemetis Keyes will sign and return each Sale Contract or
immediately notify Heiskell of any discrepancy between the Sale Contract and the
terms of the sale to which Aemetis Keyes orally agreed.  If Aemetis Keyes fails
to notify Heiskell of such discrepancies [***], then such Sale Contract will be
deemed final and binding notwithstanding Aemetis Keyes’s failure or refusal to
return the signed Sale Contract to Heiskell.  Amendments to Sale Contracts will
be confirmed in writing in the same manner as herein provided for the initial
sale transaction.  Any disputes related to a Sale Contract will be resolved by
reference to National Grain and Feed Association (“NGFA”) Trade Rules as then in
effect.  Aemetis Keyes or Heiskell may install telephone recording equipment to
record all conversations as an additional measure to ensure accuracy.  Sales
Contracts shall be applied against usage on a FIFO basis for each specified
delivery period, unless otherwise mutually agreed between Aemetis Keyes and
Heiskell.  A Sales Contract may be amended by mutual agreement of the
parties.  Further, if both parties mutually agree that a Sales Contract should
be cancelled, then such Sales Contract shall be canceled at a mutually agreed
price and the profit or loss resulting therefrom shall be applied to the next
regular billing.  Aemetis Keyes shall not unreasonably delay or withhold
agreement to a commercially reasonable cancellation price as proposed by
Heiskell.
 
Section 1.06. Settlement Weights.  The in-line scale in the Ethanol Plant
(located after the Grain Day Tank) will be used to determine the weights for the
Grain purchased daily by Aemetis Keyes and, pursuant to Section 1.04(d), will be
used in conjunction with the origin rail weights to establish the final
governing weight for the True Up to calculate Shrink.
 
Section 1.07. Freight Adjustments.  If fuel surcharges are added to freight rate
by the UPRR (or, as to Milo, by the UPRR or the applicable shipping and/or
trucking lines), then such charges shall be for the account of Aemetis Keyes and
the price shall be adjusted upward to reflect the actual freight rate applicable
to the shipment.  Heiskell shall notify Aemetis Keyes of any additional fuel
surcharges [***] of receipt of such notice from the UPRR and/or trucking lines.
 
Section 1.08. NGFA Trade and Arbitration Rules.  All Sale Contracts will be
deemed to incorporate by reference the Trade Rules of the NGFA as then in
effect, whether or not such incorporation is expressly stated in the Sale
Contract itself.  Disputes arising under Sale Contracts will be resolved by
binding arbitration in accordance with the Arbitration Rules of the NGFA as then
in effect, whether or not an arbitration agreement is expressly set forth in the
disputed Sale Contracts.  The Trade Rules and Arbitration Rules will govern as
herein provided whether or not either or both of the parties are active members
of the NGFA.
 
 
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Section 1.09. Limitations of Sale Obligation.  Subject to the rights of the
Lenders under the Lender Consent, nothing contained in this Agreement will be
construed to require Heiskell to offer or sell Grain to Aemetis Keyes if
(a) such offer or sale is for delivery dates more than [***] after the date of
the offer or contract; (b) Aemetis Keyes is in material violation of this
Agreement; (c) Aemetis Keyes is insolvent; (d) Aemetis Keyes is unable to
receive Grain at the Ethanol Plant and has not specified an alternative delivery
location; (e) Aemetis Keyes would exceed its Credit Limit (as defined
below).  For purposes of (b) above, “material violation of this Agreement” shall
mean any monetary breach by Aemetis Keyes and any other breach which has a
material adverse effect on (i) the rights and obligations of Heiskell under this
Agreement or any Related Agreement, or (ii) the ability of Aemetis Keyes to
perform its obligations hereunder and under the Related Agreements, including
without limitation if the Lenders cause any of the Aemetis Keyes credit
facilities to be accelerated prior to such agreement’s stated maturity date or
foreclose upon the Collateral (as defined in the Security Agreement).
Furthermore Aemetis Keyes acknowledges and agrees that Heiskell has no
obligation to enter into Sale Contracts with Aemetis Keyes for the sale of Milo.
 
Section 1.10. Grain Quality.  Nothing contained in this Agreement will be
construed to require Heiskell to purchase, for its own account or for immediate
resale to Aemetis Keyes, Grain that is of inferior quality [***], except when
such Grain can be received directly by Aemetis Keyes at the Ethanol Plant.  Corn
purchased by Heiskell for Aemetis Keyes will be Number 2 as defined by the
current industry standards for shuttle corn traded on the UPRR.  Milo purchased
by Heiskell for Aemetis Keyes will be Grade #2 or better.  All Grain supplied by
Heiskell pursuant to this Agreement shall be of a quality to permit the
reasonable and efficient operation of the Ethanol Plant.  Direct Sourced Rail
Corn and Direct Sourced Truck Corn by Aemetis Keyes must meet the quality
standard of US Number 2 yellow corn.
 
Section 1.11. Service Failures.  The parties specifically acknowledge that the
price of Corn sold by Heiskell to Aemetis Keyes is based upon rail shipment by
the UPRR under programs promulgated by the UPRR; however, it is not the
intention of this Agreement to make either party a guarantor of the performance
or service of the UPRR.  Accordingly, if the UPRR for any reason fails in any
material respect to provide rail service consistent with the expectations of the
parties as represented by Sale Contracts, then both parties will make good-faith
efforts to replace the supply of Corn or to re-price the Corn so that each is
restored as nearly as possible to the position the parties would have been in
but for the UPRR service failure.  [***]
 
Section 1.12. Title to and Risk of Loss.  Title to and risk of loss of Grain
shall remain with Heiskell until such Grain is purchased by Aemetis Keyes and
delivered out of the Gilbert Facility and the Grain Day Bin (as each such term
is defined in the Lease) into the Ethanol Plant through the in-line scale.  The
in-line scale between the Ethanol Plant and the Grain Day Tank will be the
official point of ownership transfer.  Aemetis Keyes may specify an alternative
delivery point or offsite storage locations to facilitate Ethanol Plant
maintenance or mitigate anticipated Grain market disruptions, or for other
commercially reasonable reasons which Aemetis Keyes will report to
Heiskell.  For deliveries to any location other than described above, Aemetis
Keyes agrees to pay the additional handling costs incurred by Heiskell.
 
Section 1.13. Forward Contracts.  Heiskell is hereby authorized, upon receipt of
written direction by Aemetis Keyes, to enter into forward contracts (“Forward
Contracts”) regarding the Grain to be supplied hereunder.  Aemetis Keyes shall
be liable to Heiskell for losses incurred in connection with such Forward
Contracts as a result of early termination of this Agreement caused by Aemetis
Keyes’s default under this Agreement or the Related Agreements.
 
 
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ARTICLE II
PURCHASE PRICE OF GRAIN AND HANDLING FEE
 
Section 2.01. Purchase Price of Grain.  The purchase price of Grain shall
include the agreed-to price for the Grain, including freight and transportation
costs to the Ethanol Plant (“Purchase Price”).
 
Section 2.02. Service Fee.  Aemetis Keyes agrees to pay a service fee for the
procurement of Grain (“Service Fee”) by Heiskell, which fee shall include all
services related to delivering Grain to the Ethanol Plant, including but not
limited to sourcing, logistics, scheduling, accounting and transferring Grain
from the Gilbert Facility, then to the Grain Day Tank, and then to the Ethanol
Plant. [***] plus any additional amount due Gilbert above [***] Grain Handling
Fee as defined in the Keyes Corn Handling Agreement.  Heiskell shall notify
Aemetis Keyes of each such increase by delivery of a written statement setting
forth the Gilbert Handling Fee increase, if any, and the new Service
Fee.  Heiskell’s notice will be given on or before the effective date of the
increase.  In no event shall the Service Fee be reduced due to a change in the
Gilbert Handling Fee; provided, however, in the event that Milo delivered to the
Keyes plant site is not subject to the [***] Gilbert Handling Fee, the Service
Fee payable to Heiskell for any such shipment shall be reduced to reflect such
savings; provided further, in no event shall [***] after payment of the Gilbert
Grain Handling Fee.
 
Section 2.03. UPRR Incentives.  Gilbert shall earn an unload incentive (the
“Unload Incentive”) equal to any unload incentive paid by the UPRR to Heiskell
for the Corn transactions contemplated by this Agreement.  This Unload Incentive
will be credited weekly by Heiskell to Aemetis Keyes as it is earned.  Both
Heiskell and Aemetis Keyes agree and understand that Gilbert is responsible for
the majority of the actions that could result in the Unload Incentive being paid
or not paid by the UPRR.
 
[***]
 
The trip incentive as paid by the UPRR (the “Trip Incentive”) for agreeing to
operate a UPRR shuttle train will be negotiated independently as part of the
cost of Corn.  Heiskell and Aemetis Keyes will negotiate in good faith a sharing
with, or transfer to, Aemetis Keyes of the Trip Incentive concurrent with the
pricing of the Corn. Heiskell shall notify Aemetis Keyes of such incentives in a
timely fashion.
 
 
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Section 2.04. Separate Costs.  Except as otherwise expressly provided in this
Agreement, Heiskell and Aemetis Keyes agree to be responsible for the cost of
their own operations.
 
Section 2.05. The parties hereto have entered into an agreement with Gilbert to
unload and handle Grain for the parties.  Subject to receipt of payment from
Aemetis Keyes for the Service Fee and any express provisions to the contrary in
this Agreement, [***] assumes the obligation to pay Gilbert the handling fee for
Grain specified pursuant to the Keyes Grain Handling Agreement.
 
ARTICLE III
RE-OPENING TERMS: PAYMENT AND CREDIT TERMS
 
Section 3.01. Re-Start Terms.  In consideration of Heiskell’s entering into this
Agreement and providing Grain in accordance with the amended and restated
provisions of this Agreement, Aemetis Keyes agrees to the following Re-Start
Terms:
 
(a) Aemetis Keyes shall pay to Heiskell [***] (the “Re-Start Fee”) [***] after
the Re-start (the “Re-Start Fee Accumulation Period”), such amount to be payable
in daily equal installments (the “Daily Installments”) commencing thirty (30)
days after the Re-start.  The amounts due Heiskell under this subsection shall
be set-off by Heiskell from amounts otherwise due to Aemetis Keyes in connection
with Heiskell’s marketing of the Ethanol, WDGS, Corn Oil, and CDS/Syrup
(together the “Ethanol Products”).  For purposes of this Agreement: (i)
“Ethanol” and “WDGS” shall have their respective meanings as set forth in the
Heiskell Purchasing Agreement; (ii) “CDS/Syrup” means concentrated distillers
solubles, a low fiber, high protein product derived from the ethanol production
process, also known as “Syrup”, and (iii) “Corn Oil” means corn oil, a high fat
liquid product derived from the ethanol production process.  In the event that
set-off amounts are not sufficient to pay a Daily Installment, Heiskell shall
retain all payments due Aemetis Keyes in connection with Heiskell’s marketing of
the Ethanol Products until such time as the Daily Installments then due to
Heiskell under this subsection (a) are current and paid in full.  To the extent
that any portion of the Re-Start Fee remains unpaid as of the expiration of the
Re-Start Fee Accumulation Period (the “Final Maturity Date”), such outstanding
balance shall bear interest at the rate of 18% per month until paid in
full.  Interest will be calculated based on actual days elapsed since the Final
Maturity Date and a year of 365/366 days, as applicable.
 
(b) Aemetis Keyes shall pay to Heiskell a [***] commencing January 16, 2013,
until the day before the first Grain is ground as part of the Restart.  Such
amounts shall be payable in the manner and at the times set forth in Subsection
3.01 (a) above.  Set-off amounts will be applied, first, as to the amounts due
under this subsection (b) and, second, to the Re-Start Fee.
 
(c) Prior to the Effective Date, Aemetis Keyes has paid to Heiskell the amount
of [***].  This amount will be used, first, to pay for the Grain shrink payment,
if any, due from Aemetis Keyes to Heiskell at the Initial True-Up, and, second,
as a payment toward amounts due under the Re-Start Fee.  In the event that the
shrink payment due to Heiskell from Aemetis Keyes [***] shall be added to the
then current balance of the Re-Start Fee and paid in accordance with Subsection
3.01 (a) above.
 
 
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(d) On the Effective Date, Aemetis Keyes is delivering to Heiskell [***]
 
Section 3.02. Payment Terms for Grain.  Aemetis Keyes agrees that the Purchase
Price and Service Fee will be due [***].  Notwithstanding this general rule, in
consideration of Aemetis Keyes’s entering into the Security Agreement and
performing its obligations under this Agreement, Heiskell agrees that so long as
its security interest in the Collateral (as defined in the Security Agreement)
remains a valid First Priority Security Interest, subject to the terms of this
Section 3.02, Heiskell shall permit payment of the Purchase Price and Service
Fee to be payable and settled [***] following the applicable delivery.  The
credit limit [***] plus [***] minus,[***]. The Credit Limit shall cease
immediately if (1) the liens in favor of Heiskell under the Security Agreement
shall at any time cease to constitute a First Priority Security Interest in the
Collateral described therein, (2) the enforceability of the Security Agreement
or the Lender Consent shall be repudiated in writing by Aemetis Keyes or the
Lenders, or (3) any Event of Default (as defined below), or any event or
condition which with the lapse of time, the giving of notice, or both, could
constitute an Event of Default, shall occur hereunder, whereupon the Credit
Limit shall, at Heiskell’s sole discretion and without notice, become [***]
 
Section 3.03. Credit Exposure Exceeding Credit Limit.  Notwithstanding anything
contained in this Agreement, Heiskell may but is not required to [***] by
entering into additional or new Sale Contracts that would result in [***].  The
amount of any letter of credit which is reasonably acceptable to Heiskell, and
which is provided to Heiskell for credit support, will commensurately increase
the Aemetis Keyes Credit Limit.  The Credit Limit may be reviewed at any time
and reduced by Heiskell if reasonably required by Heiskell’s lenders or if
failure to do so would cause a violation of Heiskell’s debt covenants, provided
that Heiskell shall promptly give Aemetis Keyes and the Lenders prior written
notice of any required reduction of the Credit Limit (the “Reduction
Notice”).  Upon receipt of the Reduction Notice, Aemetis Keyes shall have the
right to immediately terminate this Agreement upon written notice to Heiskell
and payment of all amounts due hereunder.  If credit exposure exceeds the Credit
Limit, such fact will not operate as or be deemed to be either an increase in
the Credit Limit or a waiver of Heiskell’s rights hereunder.
 
Section 3.04. Financial Statements.  Aemetis Keyes agrees to provide its annual
audited financial statements to Heiskell [***] after the same are completed and
distributed to Aemetis Keyes’s lenders.  On a weekly basis, Aemetis Keyes will
provide to Heiskell’s chief financial officer or his designee on the first
business day of such week a statement from the Aemetis Keyes chief financial
officer (or from a designee reasonably acceptable to Heiskell) certifying that
Aemetis Keyes has paid and is current with the following vendors:  Pacific Gas
and Energy, Turlock Irrigation District, and Aemetis Keyes’ current natural gas
supplier(s), or, in the case any such vendor is replaced by a different vendor
or vendors, such successor vendor(s).  Such statement may be supplied to
Heiskell by means of an email addressed to Heiskell at the email address or
addresses supplied by Heiskell from time to time.  In addition, Aemetis Keyes
may provide such other or more frequent financial information as it may desire
in support of application for an increase in the Credit Limit or different
payment terms.
 
 
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ARTICLE IV
INITIAL TERM, RENEWALS AND TERMINATION
 
Section 4.01. Term.  The initial term of this Agreement shall commence on the
Effective Date and shall end on the next December 31 (“Initial Term”).  Each
contract year shall begin on January 1 and end on the next succeeding
December 31.  This Agreement shall continue for the Initial Contract Year and
for one full contract year thereafter (the “Renewal Term”). [***].
 
(a) Termination for Convenience by Aemetis Keyes.  Aemetis Keyes has the right
to terminate this Agreement for convenience at any time by providing [***]
written notice to Heiskell by registered mail.
 
(b) Termination by Heiskell at the End of the Initial Term.  Heiskell may
terminate this Agreement at the end of the Initial Term and thereafter by giving
written notice by registered mail or email to Aemetis Keyes of such termination
as follows:
 
(i) Notice of termination to be effective at the conclusion of the Initial Term
shall be given [***] to the expiration of the Initial Term.
 
(ii) Notice of termination to be effective at the conclusion of a Renewal Term
shall be given [***] to the expiration of a Renewal Term.
 
In addition, Heiskell may terminate this Agreement immediately upon written
notice by registered mail or email if the Re-Start [***].
 
(c) Termination as a Result of Default.  In addition to the termination
provisions provided above in this Section 4.01, this Agreement may be
terminated, without payment of any penalty, upon the occurrence of any of the
following (each, an “Event of Default”) as follows:
 
(i) If a party defaults in the payment of any amount when due under this
Agreement or any Related Agreement and such default continues for a period of
[***] after written notice of such default has been given to the defaulting
party by the other party; (ii) By either party, immediately without notice to
the other party, if such other party shall have become bankrupt or insolvent, or
entered into a composition with its creditors, or had a receiver appointed for
its assets, or become the subject of any winding up of its business or any
judicial proceeding relating to or arising out of its financial condition;
(iii) By either party, immediately upon notice to the other party, if such other
party commits an act of fraud or theft with regarding to the performance of its
obligations under this Agreement; or (iv) By either party if the other party
shall be in material breach of any of its other obligations under this Agreement
or any Related Agreement and shall have failed to cure such breach [***]
receiving written notice from the other party of the existence of such breach.
 
(d) Effect of Termination on Related Agreements.  With the exception of the
Lease, the Lender Consent and the Security Agreement, which shall terminate in
accordance with the terms respectively provided therein, all other Related
Agreements shall automatically terminate upon any termination of this Agreement
by Heiskell under Section 4.01(c) and payment of all amounts due thereunder.
 
 
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ARTICLE V
TRANSFER OF TITLE AND DETERMINATION OF FEES
 
Section 5.01. Payment and Determination of Grain Cost and Handling Fee.  The
amount of bushels transferred and invoiced to Aemetis Keyes shall be based on
the reading from the in-line scale installed on the Ethanol Property.  Title to
the Grain shall pass to Aemetis Keyes at the point of the in-line
scale.  Aemetis Keyes shall maintain a properly certified scale to accurately
weigh incoming Grain from the dedicated Grain tanks.  The scale shall be tested
and calibrated quarterly by Aemetis Keyes at Aemetis Keyes’s cost [***].  If the
scale is turned off or nonoperational for any reason, then the hourly Grain
usage shall be calculated at the maximum [***] that was recorded during the
previous [***] period unless both parties mutually agree to a different method
of calculation.
 
Heiskell will obtain electronic readings of the Grain crossing the in-line scale
on a daily basis (or as determined above if the scale is turned off or
nonoperational for any reason) and will provide Aemetis Keyes each business day
an invoice for delivered Grain on the previous day, including any unbilled
period, such as weekends or holidays.
 
Section 5.02. Payment and Determination of Ethanol.  The amount of Ethanol
transferred from Aemetis Keyes to Heiskell shall be based on the reading from
the in-line meter [***] on the Ethanol Property (the “Ethanol Meter”).  Title to
the Ethanol shall pass to Heiskell at the point of the in-line meter.  Aemetis
Keyes shall maintain a properly certified meter to accurately account for
outgoing Ethanol from the Ethanol Plant.  The meter shall be tested and
calibrated quarterly by Aemetis Keyes at Aemetis Keyes’s [***] is turned off or
nonoperational for any reason, then the hourly Ethanol delivery shall be
calculated [***] mutually [***]..
 
Section 5.03. Payment and Determination of WDGS and CDS/Syrup.  The amount of
WDGS and CDS/Syrup transferred and invoiced to Heiskell shall be based on the
reading from the Truck Scale installed on the Ethanol Property.  Title to the
WDGS and CDS/Syrup shall pass to [***} shall maintain a properly certified Truck
Scale to accurately weigh outgoing WDGS and CDS/Syrup from the Ethanol
Plant.  The scale shall be tested and calibrated quarterly by [***]. If the
scale is turned off or nonoperational for any reason, then the daily WDGS and
CDS/Syrup delivery shall be calculated at the minimum daily shipment rate that
was recorded during the previous [***] period unless both parties mutually agree
to a different method of calculation.
 
Section 5.04. Net Settlement Procedures.  Heiskell and Aemetis Keyes each will
have obligations to the other resulting from (a) the sale of Grain by Heiskell
to Aemetis Keyes and the handling services of Heiskell and other obligations of
Aemetis Keyes under this Agreement, and (b) payment obligations under the
Purchasing Agreement, including without limitation obligations related to the
purchase of Ethanol Products, handling and marketing services, performance
guarantees from customers and the provision of consulting services. For purposes
of this Section 5.04, in order to assure payment by Aemetis Keyes of its
obligations under this Agreement and possible shrink of Ethanol, [***].  Amounts
payable in connection with the first [***] of Ethanol produced and marketed
after the Re-Start will be applied to fund this Reserve Amount.  As set forth
more specifically in Section 3.02, (i) the Reserve Amount and, (ii) (A) during
the Accumulation Period, the portion of the Daily Installments which has accrued
and is owing (regardless of whether such Daily Installments have been funded),
and (B) following the Re-Start Fee Accumulation Period, the full Re-Start Fee
will be deemed to be obligations owing from Aemetis Keyes in determining the
daily settlement amount.  The parties agree that, subject to the Credit Limit
set forth in Section 3.01, all such amounts shall be subject to daily net
settlement procedures whereby all amounts owing under such contracts from one
party to the other will be calculated and the party with a negative balance
based on such settlement calculation will pay the net settlement amount due to
the other party in immediately available funds on the next business day,
provided such net settlement amount is [***] will be retained as a payable for
calculating the net settlement amount on the next business day.  [***] shall be
responsible for calculating the net settlement amount for each business day and
forwarding a copy of the net settlement statement to [***] electronically at the
Aemetis Keyes notice address shown in this Agreement.  If Aemetis Keyes does not
object to the net settlement statement [***], such net settlement statement will
be deemed conclusive between the parties absent manifest error.
 
 
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ARTICLE VI
INSURANCE
 
Section 6.01. Insurance.  Throughout the Term, Heiskell and Aemetis Keyes each
agree:
 
(a) To procure and maintain for the benefit of themselves and the other party
property and casualty insurance of the Ethanol Plant.
 
(b) To procure and maintain for the benefit of themselves and the other party
comprehensive commercial general liability insurance on an “occurrence basis”
and contractual liability coverage with limits of [***] per occurrence,
including products liability coverage for products manufactured by Heiskell and
Aemetis Keyes.
 
(c) To procure and maintain for the benefit of themselves and the other party
vehicle liability insurance on an “occurrence basis” with limits of at least
[***] per occurrence.
 
(d) To procure and maintain, for the benefit of themselves, workers’
compensation coverage that complies with all applicable requirements of
California laws and regulations.
 
(e) Any liability insurance and workers’ compensation insurance maintained
pursuant hereto will contain a blanket waiver of subrogation with respect to
third parties.  In the event such blanket waiver of subrogation is eliminated
from any insurance coverage, the responsible party agrees to use its best
efforts to procure a waiver of subrogation with respect to claims against the
other party arising out of the relationship between Heiskell and Aemetis Keyes
created pursuant to this Agreement.
 
(f) To provide to the other party certificates of insurance evidencing the
required coverage, fully paid in full force and effect.  Each party agrees to
name the other party as an additional insured on all insurance required by this
Agreement, except workers’ compensation.  The certificates of insurance to be
provided by each party will provide that the insurance cannot be terminated
without [***] prior written notice to the other party.
 
(g) All insurance required by this Agreement will be effected under valid and
enforceable policies, in such forms and amounts as may from time to time be
issued by insurers which are authorized to transact business in the State of
California and that are reasonably acceptable to the parties.  Upon the
execution of this Agreement and thereafter not less than 15 days prior to the
expiration date of each policy furnished pursuant to this Agreement, each party
will deliver to the other party the original of each policy required to be
furnished pursuant to this Agreement (or, with the consent of the other party,
in the case of comprehensive general liability insurance, a certificate of the
insurer reasonably satisfactory to such other party) bearing a notation
evidencing the payment of the premium or accompanied by other evidence of
payment reasonably satisfactory to the other party.
 
(h) Each such policy or certificate therefor issued by the insurer will contain
an agreement by the insurer that such policy will not be canceled [***] prior
written notice by registered mail to all named insureds.
 
(i) Each party will observe and comply with the requirements of all policies of
public liability and fire and other policies of insurance insuring their
respective facilities.
 
 
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ARTICLE VII
INDEMNIFICATION
 
Section 7.01. Indemnification by Heiskell.  Heiskell agrees to defend, hold
harmless and indemnify Aemetis Keyes from any and all loss or damage, costs and
expenses, including reasonable legal fees, incurred by Aemetis Keyes from any
claim or action asserted, made or filed against Aemetis Keyes claiming loss or
injury of any nature whatsoever, resulting from Heiskell’s gross negligence or
willful misconduct in Heiskell’s performance, or from Heiskell’s breach, of its
obligations under this Agreement or the Related Agreements, subject to the
provisions of Section 14 below.  The foregoing indemnification obligation shall
survive any termination of this Agreement.
 
Section 7.02. Aemetis Keyes agrees to defend, hold harmless and indemnify
Heiskell from any and all loss or damage, costs and expenses, including
reasonable legal fees, incurred by Heiskell from any claim or action asserted
against, made or filed against Heiskell claiming loss or injury of any nature
whatsoever, resulting from Aemetis Keyes’ negligence or willful misconduct in
Aemetis Keyes’ performance, or from Aemetis Keyes’ breach, of its obligations
under, this Agreement or the Related Agreements, subject to the provisions of
Section 14 below.  The foregoing indemnification obligation shall survive any
termination of this Agreement.
 
ARTICLE VIII
NOTICES
 
All notices required or permitted hereunder (with the exception of normal
operational communications, which will occur in any commercially reasonable
manner) will be in writing and addressed to the recipient at the address set
forth at the end of this Agreement.  Either party may change such address by
providing the other with notice of such change in accordance with this
Section.  All notices will be deemed given when delivered in person, transmitted
by facsimile with confirmation of receipt, or delivered by a recognized
national, overnight courier service with signed acknowledgment of receipt.
 
ARTICLE IX
MISCELLANEOUS
 
Section 9.01. Representations and Warranties.  Each party represents and
warrants to the other party that (a) it is duly formed and in good standing in
its state of formation; (b) it is qualified to do business in the State of
California; (c) it has full power and authority to enter into, and to perform,
this Agreement; (d) all necessary corporate action has been taken by the
representing party to authorize the execution, delivery and performance of this
Agreement; and (e) the execution, delivery and performance of this Agreement by
such representing party do not violate, or constitute a breach of, any
governmental requirement or any material indenture, contract or other instrument
to which to representing party is a party or by which the representing party or
its assets are bound or to which its business is subject.  Upon execution and
delivery, this Agreement will constitute the legal and binding agreement of the
representing party enforceable against such representing party in accordance
with its terms.
 
 
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Section 9.02. Successors and Assigns.  This Agreement shall be binding upon and
will inure to the benefit of the parties hereto and their respective legal
representatives, successors and permitted assigns, and wherever a reference in
this Agreement is made to either of the parties hereto such reference will be
deemed to include, if applicable, also a reference to the legal representatives,
successors and permitted assigns of such party, as if in every case so
expressed.
 
Section 9.03. Attorneys’ Fees.  Should either party hereto institute any action
or proceeding in court to enforce any provisions hereof or for damages by reason
of any alleged breach of any provision of this Agreement, the prevailing party
will be entitled to receive from the losing party such amount as the court may
adjudge to be reasonable attorneys’ fees for the services rendered to the
prevailing party in such action or proceeding.
 
Section 9.04. Independent Contractors.  This Agreement is not intended to be,
nor will it be construed, by implication or otherwise, as an agreement to
establish a partnership, a corporation, a joint venture or any other business
organization.  Neither party will act or present itself, directly or indirectly,
as an agent of the other party or in any manner assume or create any obligation
on behalf of, or in the name of, such other party.
 
Section 9.05. No Waiver.  The failure of a party to seek redress for violation
of, or to insist upon the strict performance of, any covenant or condition of
this Agreement will not be deemed a waiver by such party of its rights to such
redress for a prior, concurrent or subsequent violation of the same or any other
covenant or condition of this Agreement.  Any waiver of any right or remedy must
be in writing and signed by the party against which enforcement is sought.
 
Section 9.06. Headings.  The headings used in this Agreement are (a) for
convenience only, (b) not to affect the construction hereof, and (c) not to be
taken into consideration in the interpretation hereof.
 
Section 9.07. Governing Law.  This Agreement will be construed and enforced in
accordance with the laws of the State of California.
 
Section 9.08. Counterparts.  This Agreement may be executed in two counterparts,
each of which will be deemed an original but both of which together will
constitute one and the same agreement.
 
Section 9.09. Force Majeure.  Neither party shall be liable to the other for its
failure to perform its obligations hereunder (other than a monetary obligation)
when such failure shall be due to the failure of processing equipment, fires,
floods, storms, weather conditions, strikes, lock outs, other industrial
disturbance, riots, legal interference, governmental action or regulation, acts
of terrorism, acts of God or public enemy, limitation by enumeration, or any
other cause beyond such party’s reasonable control, provided such party shall
promptly and diligently take such action as may be necessary and practicable
under the then existing circumstances to remove the cause of failure and resume
performance of such obligations.  The party seeking to invoke this provision
shall provide notice within 48 hours or such other time as is reasonable under
the circumstances.  The party shall further notify the other party as to the
time when the force majeure condition is no longer in effect.
 
ARTICLE X
RELEASE REGARDING INVENTORY
 
Section 10.01. Aemetis Keyes will cause the Lenders to execute and deliver the
Lender Consent, in form and substance acceptable to Heiskell.  Heiskell shall
have no obligation under this Agreement or the Related Agreements (a) until the
Lender Consent has been executed, delivered to Heiskell and is in effect, or
(b) at any time that the Lender Consent is not in full force and effect.
 
 
 
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ARTICLE XI
EFFECT OF AMENDMENT AND RESTATEMENT
 
Section 11.01 This Agreement replaces in its entirety the Original Procurement
Agreement, with all amounts owing from either party to the other party under the
Original Procurement being immediately preserved as obligations under this
Agreement.  For purposes of the Related Agreements:  (a) such Related Agreements
shall be renewed and extended as of the Effective Date:  (b) any reference to
the Original Procurement Agreement shall be deemed to be references to this
Agreement, as amended from time to time; (c) any reference to obligations of the
parties under the Original Procurement Agreement and Related Agreements shall be
deemed to include obligations under this Agreement; and (d) any reference in the
Related Agreements to Corn shall include references to Milo, except where the
context requires, or as expressly set forth to, the contrary.  Aemetis Keyes
hereby authorizes Heiskell to file such UCC-3 financing statement amendments as
Heiskell deems appropriate to reflect the terms of this Agreement.
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
 

  AEMETIS ADVANCED FUELS KEYES, INC.
 
By: ___________________________________
Name: ___________________________________
Title: ___________________________________ 
 
Notice Address:
 
Suite 700
20400 Stevens Creek Boulevard
Cupertino, CA  95014
Telephone:
Facsimile:
E-mail:
Attention:
 
J.D. HEISKELL HOLDINGS, LLC
 
By: ___________________________________
Name: ___________________________________
Title: ___________________________________ 
 
Notice Address:
 
116 West Cedar Avenue
Tulare, CA  93274
Telephone:
Facsimile:
E-mail: tregan@heiskell.com
Attention: Chief Financial Officer

 
 
 
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EXHIBIT A
 
FORM OF STOCK WARRANT
 
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT.”

 
Right to Purchase _________ shares of Common Stock
of AEMETIS, INC.

COMMON STOCK PURCHASE WARRANT
 
No. 2013
Issue Date: __________, 2013
 
AEMETIS, INC., a corporation organized under the laws of the State of Nevada
(the “Company”), hereby certifies that, for value received, J.D. Heiskell
Holdings, LLC, a California limited liability company, or its assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company at any time after the Issue Date until the  Expiration Date,
1,000,000 fully paid and nonassessable shares of the Common Stock of the Company
(the “Warrant Shares”), at a per share purchase price of $0.50 in lawful money
of the United States.  The afore described purchase price per share, as adjusted
from time to time as herein provided, is referred to herein as the “Purchase
Price.”  The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
 
1. Definitions.  As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:
 
(a) The term “Company” shall include AEMETIS, Inc. and any individual or entity
which shall succeed or assume the obligations of AEMETIS, Inc. hereunder.
 
(b) The term “Common Stock” includes (i) the Company’s Common Stock, $.001 par
value per share, as authorized on the Issue Date, and (ii) any other securities
into which or for which any of the securities described in (i) may be converted
or exchanged pursuant to a plan of recapitalization, reorganization, merger,
sale of assets or otherwise.
 
(c) The term “Expiration Date” means 5:00 p.m., New York time on the tenth
anniversary after the Issue Date.
 
(d) The term “Other Securities” refers to any stock (other than Common Stock)
and other securities of the Company or any other person (corporate or otherwise)
which the holder of the Warrant at any time shall be entitled to receive, or
shall have received, on the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 3 or otherwise.
 
 
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2. Exercise of Warrant.
 
(a) Number of Shares Issuable upon Exercise.  From and after the Issue Date
through and including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 2(b) or upon exercise of this Warrant in part in accordance with
subsection 2(c), shares of Common Stock of the Company, subject to adjustment
pursuant to Section 3.
 
(b) Full Exercise.  This Warrant may be exercised in full by the Holder hereof
by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by such
Holder and surrender of the original Warrant within five (5) trading days of
exercise, to the Company at its principal office, accompanied by payment, in
cash, wire transfer or by certified or official bank check payable to the order
of the Company, in the amount obtained by multiplying the number of shares of
Common Stock for which this Warrant is then exercisable by the Purchase Price
then in effect.
 
(c) Partial Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 2(b) except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
whole shares of Common Stock designated by the Holder in the Subscription Form
by (b) the Purchase Price then in effect.  On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.
 
(d) Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:
 
(i) If the Company’s Common Stock is traded on an exchange, then the closing or
last sale price, respectively, reported for the last business day immediately
preceding the Determination Date;
 
(ii) If the Company’s Common Stock is not traded on an exchange, but is traded
in the over-the-counter market, then the average of the closing bid and ask
prices reported for the last business day immediately preceding the
Determination Date;
 
(iii) Except as provided in clause (iv) below, if the Company’s Common Stock is
not publicly traded, then as the Board of Directors of the Company shall in good
faith determine; or
 
(iv) If the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up
pursuant to the Company’s charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (iv) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
 
 
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(e) Delivery of Stock Certificates, etc. on Exercise.  As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
five (5) trading days thereafter, the Company at its expense will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 2 or otherwise.
 
(f) Common Stock Legend. The Holder acknowledges and agrees that the shares of
Common Stock of the Company, and, until such time as the Common Stock has been
registered under the 1933 Act and sold in accordance with an effective
registration statement, or exemption from registration, certificates and other
instruments representing any of the Common Stock shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of any such Securities):

 
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS.  THESE
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO AEMETIS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”
 
(g) Cashless Exercise.  If the Fair Market Value of one share of Common Stock is
greater than the Purchase Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being cancelled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Subscription Form in which event
the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:
 
X  =   Y (A-B)
               A
     
    Where
X=
the number of shares of Common Stock to be issued to the holder

 
Y=
the number of shares of Common Stock purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the Warrant being
exercised (at the date of such calculation)

 
 
A=
the Fair Market Value of one share of the Company’s Common Stock (at the date of
such calculation)

 
 
B=
Purchase Price (as adjusted to the date of such calculation)

 
 
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3. Adjustment for Reorganization.
 
(a) Reorganization, Consolidation, Merger, etc.  In case at any time or from
time to time, the Company shall effect a reorganization, then, as a condition to
the consummation of such a transaction, proper and adequate provision shall be
made by the Company whereby the Holder of this Warrant, on the exercise hereof
as provided in Section 1, at any time after the consummation of such
reorganization shall receive, in lieu of the Common Stock (or Other Securities)
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property to which such Holder would have been
entitled upon such consummation if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment thereafter as
provided in this Section 3.
 
(b) Extraordinary Events Regarding Common Stock.  In the event that the Company
shall (a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock into
a smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 3. The number
of shares of Common Stock that the Holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 2, be entitled to receive shall be
adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 3) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 3)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.
 
(c) Certificate as to Adjustments.  In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant.
 
4. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and keep available, solely
for issuance and delivery on the exercise of the Warrants, all shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of the
Warrant.
 
5. Assignment; Exchange of Warrant.  Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”). On the surrender
for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at its expense, twice, only, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.  No such transfers shall result
in a public distribution of the Warrant.
 
 
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6. Replacement of Warrant.  On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
 
7. Transfer on the Company’s Books.  Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
 
8. Notices.  All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (i) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received),
or (ii) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses for such
communications shall be: (i) if to the Company to: 20400 Stevens Creek Blvd.,
Suite 700, Cupertino, California, and (ii) if to the Holder, 20010 Manderson
Street, Suite A, Elkhorn, NE 68002.
 
9. Miscellaneous.  This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of California.  Any dispute relating to this Warrant shall
be adjudicated in the City and County of San Francisco in the State of
California.  The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.  The invalidity
or unenforceability of any provision hereof shall in no way affect the validity
or enforceability of any other provision.
 
10. No rights as Stockholder.  Until the Holder has exercised this Warrant,
Holder shall have no rights as a stockholder of the Company in respect to the
Warrants until the Holder has exercise its rights to receive Warrant Shares.

 
 
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
 

 
AEMETIS, INC.
 
By:_______________________________
Name:
Title:

 
 
 
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Exhibit A

FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO:  AEMETIS, INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby irrevocably elects to purchase (check applicable box):

___           ________ shares of the Common Stock covered by such Warrant; or
___           the maximum number of shares of Common Stock covered by such
Warrant pursuant to thecashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or boxes):

___           $__________ in lawful money of the United States; and/or

___           the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock (using a Fair Market
Value of $_______ per share for purposes of this calculation); and/or

___           the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section 2, to exercise
this Warrant with respect to the maximum number of shares of Common Stock
purchasable pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _____________________________________________________
whose address is _________________________________________________
______________________________________                                                                                                                                                     

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

Dated:___________________
(Signature must conform to name of holder as specified on the face of the
Warrant)
 
_____________________________________
 
_____________________________________
 
_____________________________________
(Address)

 
 
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Exhibit B

FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
 
For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading “Transferees” the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of AEMETIS, INC. to which the within Warrant relates specified under the
headings “Percentage Transferred” and “Number Transferred,” respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of AEMETIS, INC. with full power of
substitution in the premises.
 

Transferees
Percentage Transferred
Number Transferred
                 

 
Dated:  ______________, ___________
 
Signed in the presence of:
 
_____________________________________
(Name)
 
 
ACCEPTED AND AGREED:
[TRANSFEREE]
 
_____________________________________
(Name)
 
 
_____________________________________
 
(Signature must conform to name of holder as specified on the face of the
warrant)
 
_____________________________________
 
_____________________________________
(address)
 
_____________________________________
 
_____________________________________
(address)

 
 
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