EXHIBIT 10.2

 

EXECUTION COPY

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [***]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

AGREEMENT AND OMNIBUS AMENDMENT

 

This Agreement and Omnibus Amendment (this “Omnibus Agreement”) is made as of
July 30, 2009, among Pioneer Trail Energy, LLC (“PTE”), Cargill, Incorporated
(“CI”) and Cargill Commodity Services, Inc. (“CS” and, together with CI,
“Cargill”).

 

RECITALS

 

WHEREAS, PTE and Cargill are parties to the Master Agreement, dated
September 25, 2006 (the “Master Agreement”);

 

WHEREAS, PTE and CI are parties to (i) the Ethanol Marketing Agreement, dated as
of September 25, 2006 (the “Ethanol Marketing Agreement”), (ii) the Corn Supply
Agreement, dated September 25, 2006 (the “Corn Supply Agreement”), (iii) the
Distillers Grains Marketing Agreement, dated as of September 25, 2006 (the “DG
Agreement”), and (v) the Grain Facility Lease and Sublease, dated September 25,
2006 (the “PTE Lease”);

 

WHEREAS, PTE and CS are parties to the Cargill Direct Futures Advisory
Agreement, dated as of September 25, 2006 (the “Futures Agreement” and, together
with the Master Agreement, the Ethanol Marketing Agreement, the Corn Supply
Agreement and the DG Agreement the “Goods and Services Agreements”; and the
Goods and Services Agreements together with the PTE Lease, the “PTE-Cargill
Agreements” and each, a “PTE-Cargill Agreement”); and

 

WHEREAS, the Parties wish to set forth their agreement with respect to certain
concessions to be made by CI and/or CS under the PTE-Cargill Agreements and to
amend certain provisions of certain of the PTE-Cargill Agreements, in each case
as more particularly set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and obligations stated
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, PTE and Cargill hereby agree as follows:

 

SECTION 1

DEFINITIONS

 

1.1                                 DEFINED TERMS.  CAPITALIZED TERMS USED IN
THIS OMNIBUS AGREEMENT WHICH ARE DEFINED IN THE PREAMBLE AND RECITALS WILL HAVE
THE MEANINGS GIVEN THEM IN THE PREAMBLE AND THE RECITALS.  OTHER CAPITALIZED
TERMS USED IN THIS OMNIBUS AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PTE-CARGILL AGREEMENTS.  IN ADDITION, THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS SET FORTH BELOW:

 

(a)                                  “Bankruptcy Code”  shall mean the United
States Bankruptcy Code as codified at 11 U.S.C. § 101 et seq.

 

(b)                                 “BLE” shall mean Buffalo Lake Energy, LLC.

 

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(c)                                  “BLE Omnibus Agreement” shall mean the
Agreement and Omnibus Amendment, dated as of even date herewith, by and among
BLE and Cargill.

 

(d)                                 “Business Day” shall mean a day that is a
“Business Day” as defined in the Master Agreement and, if such day relates to
the determination of any Eurodollar Rate, a day on which dealings in U.S. dollar
deposits are carried on in the London interbank Eurodollar market.

 

(e)                                  “Cargill Working Days” shall have the
meaning assigned to such term in the Corn Supply Agreement.

 

(f)                                    “Concession Effective Date” shall have
the meaning assigned to such term in Section 3.5.

 

(g)                                 “Concessionary Period” shall mean the period
from the Concession Effective Date and continuing for a period of twelve (12)
consecutive calendar months; provided, that the Concessionary Period shall be
deemed terminated on the date PTE and/or BLE receives written notice of such
termination from Cargill as contemplated by and in accordance with Section 4.2
hereof or Section 4.2 of the BLE Omnibus Agreement, as applicable.

 

(h)                                 “Eurodollar Rate” shall mean, with respect
to each Interest Period, a rate per annum equal to the British Bankers
Association LIBOR Rate (“BBA LIBOR”) as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
Cargill from time to time) at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, for deposits in
United States dollars (for delivery on the first day of such Interest Period)
for a term of one month (rounded upwards, if necessary, to the nearest
one-hundredth of one percent (0.01%)).  If for any reason such rate is not
available, the term “Eurodollar Rate” shall mean, with respect to each Interest
Period, the rate per annum displayed in the Bloomberg Financial Market System
(or any successor thereto), at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, as the London
interbank offered rate for deposits in United States dollars (for delivery on
the first day of such Interest Period) for a term of one month (rounded upwards,
if necessary, to the nearest one-hundredth of one percent (0.01%)); provided,
however, that (x) if such rate for any Interest Period cannot otherwise be
determined in accordance with this definition, the term “Eurodollar Rate” shall
mean, for such Interest Period, a rate per annum equal to the rate determined by
Cargill as a rate at which U.S. dollar deposits are offered to major banks in
the London interbank eurodollar market for funds to be made available on the
first day of such Interest Period for a term of one month, (y) if Cargill in its
discretion determines that deposits in United States dollars are not being
offered in the London interbank eurodollar market or that, for any other reason,
adequate and reasonable means do not exist for ascertaining the “Eurodollar
Rate” in accordance with the foregoing clause (x), the “Eurodollar Rate” shall
be the higher of (I) the federal funds effective rate, as determined by Cargill,
plus 0.50%, and (II) the prime rate, as determined by Cargill, less 1% and
(z) all interest shall be computed hereunder on the basis of the actual number
of days elapsed in a year of 360 days.

 

(i)                                     “Interest Periods” shall mean,
collectively, the thirty (30) day period commencing on the first date on which
Deferred Payment is deferred under a PTE-Cargill

 

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Agreement and each subsequent thirty (30) day period until the date of which
(i) the Concessionary Period shall have expired and (ii) the full amount of the
Deferred Payment shall have been paid to Cargill, and “Interest Period” shall
mean any such one-month period.

 

(j)                                     “Margin” shall mean 3.0%.

 

(k)                                  “Parties” shall mean, collectively, PTE and
Cargill, and “Party” shall mean any of them.

 

SECTION 2

AMENDMENTS TO PTE-CARGILL AGREEMENTS

 

2.1                                 AMENDMENT TO MASTER AGREEMENT.  PTE AND
CARGILL HEREBY AGREE TO AMEND THE MASTER AGREEMENT AS FOLLOWS:

 

(a)                                  Section 5(b) shall be deleted in its
entirety and replaced with the following:

 

(b) Setoff and Netting in Producer Default Situation.  Cargill is hereby
irrevocably authorized at any time and from time to time during which a Producer
default or a Producer Event of Default has occurred under any of the Goods and
Services Agreements or the Omnibus Agreements has not been cured by Producer
within one (1) Business Day after receipt of written notice from Cargill of such
Producer default or Producer Event of Default to set-off, recoup and apply any
and all amounts due from Cargill to Producer under any of the Goods and Services
Agreements, the Omnibus Agreements, or the Related Goods and Services
Agreements, whether or not payable, against the Aggregate Exposure of Cargill. 
Promptly upon any such set-off, Cargill will provide written notice to the
Producer setting forth the amount, source and application of such set-off.  The
rights of Cargill under this Section are in addition to other rights and
remedies that Cargill has under this Agreement and applicable law.  In the event
a Party disputes in good faith whether an amount is due and owing to the other
Party, the other Party may set-off against such amount only if the amount in
dispute is placed into a mutually agreeable escrow account pending resolution of
such dispute in accordance with Section 6.

 

(b)                                 during the Concessionary Period,
Section 5(d) shall be deleted in its entirety and replaced with the following:

 

(D) AGGREGATE EXPOSURE OF CARGILL.  IT IS THE PARTIES’ INTENT THAT AT NO TIME
DURING THE TERM OF THIS MASTER AGREEMENT WILL THE AGGREGATE EXPOSURE OF CARGILL
EXCEED THE AMOUNT OWED BY CARGILL TO PRODUCER.  HOWEVER, IF THE AGGREGATE
EXPOSURE OF CARGILL SHOULD AT ANY TIME EXCEED THE AMOUNT OWED BY CARGILL TO
PRODUCER, THEN CARGILL SHALL BE ENTITLED, IN ITS SOLE DISCRETION, TO
(I) WITHHOLD PAYMENTS TO PRODUCER IN AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN
THE AGGREGATE EXPOSURE OF CARGILL AND THE AMOUNT OWED BY CARGILL TO PRODUCER
(THE “UNCOVERED EXPOSURE”); (II) UNWIND HEDGE POSITIONS, IF ANY, CONSISTENT WITH
THE TERMS OF THE RISK ADVISORY AGREEMENT AND/OR THE CORN ADVISORY AGREEMENT IN
AN AMOUNT EQUAL TO THE UNCOVERED EXPOSURE; AND/OR

 

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(III) REQUIRE PRODUCER TO PROVIDE A LETTER OF CREDIT OR CASH DEPOSITS ACCEPTABLE
TO CARGILL AS SECURITY FOR THE UNCOVERED EXPOSURE; PROVIDED, THAT A LETTER OF
CREDIT SHALL BE DEEMED ACCEPTABLE TO CARGILL IF SUCH LETTER OF CREDIT (A) IS
ISSUED BY A FINANCIAL INSTITUTION OR OTHER PERSON WHOSE LONG-TERM SENIOR
UNSECURED DEBT IS RATED AT LEAST “A-” BY STANDARD & POOR’S CORPORATION OR “A3”
BY MOODY’S INVESTORS SERVICE, INC., (B) NAMES CARGILL, INCORPORATED AS
BENEFICIARY AND (C) CONTAINS SUCH OTHER TERMS AND PROVISIONS AS ARE REASONABLY
SATISFACTORY TO CARGILL.  CARGILL AGREES TO TAKE SUCH ACTIONS AS MAY BE
REASONABLY REQUESTED BY PRODUCER FROM TIME TO TIME TO TERMINATE OR REDUCE THE
STATED AMOUNT OF ANY SUCH LETTER OF CREDIT, AND TO TERMINATE CARGILL’S SECURITY
INTEREST WITH RESPECT TO ANY SUCH CASH DEPOSITS, IN EACH CASE, TO THE EXTENT
THAT SUCH REDUCTION OR TERMINATION DOES NOT RESULT IN ANY UNCOVERED EXPOSURE.

 

(C) IN SECTION 11(A), THE DEFINITION OF “AGGREGATE EXPOSURE OF CARGILL” SHALL BE
DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:

 

“Aggregate Exposure of Cargill” means, on any day of determination, an amount,
if any, equal to (i) the sum of the amounts which would be payable to Cargill if
Cargill terminated each of the Goods and Services Agreements, plus (ii) the
Related Project Exposure of Cargill, plus (iii) amounts payable (or, during the
Concessionary Period, amounts due) to Cargill pursuant to the Grain Facility
Lease, less (iv) amounts exclusively and irrevocably available to Cargill under
letters of credit or cash deposits acceptable to Cargill.  For clarification
purposes, in calculating its exposure, Cargill may mark to market all open cash
and futures positions.

 

(D)                                 THE FOLLOWING SHALL BE ADDED TO
SECTION 11(A):

 

“BLE Omnibus Agreement” shall mean the Agreement and Omnibus Amendment, dated as
of July 30, 2009, by and among Buffalo Lake Energy, LLC and Cargill.

 

“Concession Effective Date” shall have the meaning ascribed to such term in the
PTE Omnibus Agreement.

 

“Concessionary Period” shall have the meaning ascribed to such term in the PTE
Omnibus Agreement.

 

“Omnibus Agreements” shall mean, collectively, the BLE Omnibus Agreement and the
PTE Omnibus Agreement.

 

“PTE Omnibus Agreement” shall mean the Agreement and Omnibus Amendment, dated as
of July 30, 2009, by and among Producer and Cargill.

 

“Uncovered Exposure” shall have the meaning ascribed to such term in
Section 5(d).

 

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2.2                                 AMENDMENT TO CORN SUPPLY AGREEMENT.  PTE AND
CI HEREBY AGREE TO AMEND THE CORN SUPPLY AGREEMENT AS FOLLOWS:

 

(A)                                  SECTION 13(B)(I) SHALL BE DELETED IN ITS
ENTIRETY AND REPLACED WITH THE FOLLOWING:

 

(i) Producer shall pay to Cargill the amount set forth in each Invoice no later
than by 12:00 noon on the Payment Date (or, with respect to payment of amounts
deferred by Producer as contemplated by Section 13(d), the Concessionary Payment
Date).  The term “Payment Date” means (x) during the first Contract Year, three
(3) business days after the date on which Corn is supplied to the Grain Facility
(the “Delivery Date”), (y) during the second contract year, two (2) business
days after the Delivery Date, (z) thereafter, one (1) business day after the
Delivery Date; provided, that, during the Concessionary Period, the “Payment
Date” means [***] business days after the Delivery Date.

 

(B)                                 IN SECTION 13(B)(II), IN EACH INSTANCE THE
WORDS “PAYMENT DEADLINE” APPEAR, SUCH WORDS SHALL BE DELETED AND REPLACED WITH
THE FOLLOWING: “PAYMENT DATE (OR, WITH RESPECT TO PAYMENT OF AMOUNTS DEFERRED BY
PRODUCER AS CONTEMPLATED BY SECTION 13(D), THE CONCESSIONARY PAYMENT DATE).”

 

(C)                                  THE FOLLOWING SHALL BE ADDED AS
SECTION 13(D):

 

(d) Concessionary Period.  Notwithstanding anything herein to the contrary other
than in Section 13(e), during the Concessionary Period, Producer may (but shall
not be obligated to) defer payment of the amounts described in
Section 13(b)(i) until the Concessionary Payment Date (the amount of any such
deferred payments, in the aggregate, the “Deferred Corn Supply Payments”).  The
term “Concessionary Payment Date” means the date that is [***] Cargill Working
Days after the Delivery Date.

 

(D)                                 THE FOLLOWING SHALL BE ADDED AS
SECTION 13(E):

 

(e) Maximum Deferred Corn Supply Payment.  Notwithstanding anything herein to
the contrary, Producer shall immediately pay to Cargill on demand any Deferred
Corn Supply Payments which, together with any “Deferred Corn Supply Payments”
(as such term is defined in the Corn Supply Agreement, dated September 25, 2006,
as amended, by and between Buffalo Lake Energy, LLC and Cargill), exceed USD
$[***].

 

2.3                                 AMENDMENT TO PTE LEASE.  PTE AND CI HEREBY
AGREE TO AMEND THE PTE LEASE AS FOLLOWS:

 

(A)                                  IN SECTION 3.01, THE WORDS “DURING THE
TERM” SHALL BE DELETED IN THEIR ENTIRETY AND REPLACED WITH THE WORDS “SUBJECT TO
SECTION 3.05, DURING THE TERM”.

 

(B)                                 THE FOLLOWING SHALL BE ADDED AS
SECTION 3.05:

 

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SECTION 3.05.  Concessionary Period.  Notwithstanding anything herein to the
contrary, during the Concessionary Period (as defined in the Agreement and
Omnibus Amendment, dated as of July 30, 2009, by and between Landlord and
Tenant), Tenant may (but shall not be obligated to) defer payment under
Section 3.01 of up to USD $[***] per month (the amounts of such deferred
payments, in the aggregate, the “Deferred Rent Payments”) without penalty
hereunder (including, for the avoidance of doubt, payment of interest under
Section 3.04).  The Deferred Rent Payments shall be paid by Tenant in
twenty-four (24) equal monthly installments, with the first such installment to
be due and payable on the first day of the calendar month following the
expiration or termination of the Concessionary Period, and subsequent
installments to be due and payable on the first business day of each calendar
month thereafter.

 

2.4                                 AMENDMENT TO ETHANOL MARKETING AGREEMENT. 
PTE AND CI HEREBY AGREE TO AMEND THE ETHANOL MARKETING AGREEMENT AS FOLLOWS:

 

(A)                                  THE FOLLOWING SHALL BE ADDED AS
SECTION 1.5:

 

1.5  Concessionary Period.  Notwithstanding anything herein to the contrary,
during the Concessionary Period, Cargill shall not be obligated to enter into
any sales agreement for Producer’s Ethanol with a term that is in excess of
forty-five (45) days.

 

(B)                                 IN SECTION 3.3, IMMEDIATELY FOLLOWING THE
FIRST PARENTHETICAL, THE FOLLOWING SHALL BE ADDED: “(EXCLUDING ANY SUCH CONTRACT
YEAR WHICH INCLUDES ALL OR ANY PORTION OF THE CONCESSIONARY PERIOD)”.

 

(C)                                  THE FOLLOWING SHALL BE ADDED AS
SECTION 3.5:

 

Section 3.5.  Concessionary Period.  Notwithstanding anything herein to the
contrary, Cargill agrees to defer the payment of [***] percent [***%] of the
Cargill Commission (as such term is described in each of Exhibit A and
Exhibit B) that accrues during the Concessionary Period, except the portion
thereof equal to [***] (USD $[***]) per gallon of Ethanol sold (the amount of
such deferred payments, in the aggregate, the “Deferred Ethanol Commission
Payments”).  The Deferred Ethanol Commission Payments shall be paid by Producer
in twenty-four (24) equal monthly installments, with the first such installment
to be due and payable on the one year anniversary of the Concession Effective
Date, and subsequent installments to be due and payable on the first business
day of each calendar month thereafter.

 

(D)                                 ON THE FIRST PAGE OF EXHIBIT A, IN THE
SEVENTH (7TH) LINE, AFTER THE WORDS “GROSS PROCEEDS LESS CARGILL COMMISSION”,
THE FOLLOWING SHALL BE ADDED “(EXCEPT ANY PORTION OF SUCH CARGILL COMMISSION
THAT IS DEFERRED BY CARGILL PURSUANT TO SECTION 3.5)”.

 

(E)                                  ON THE FIRST PAGE OF EXHIBIT B, IN THE
SIXTH (6TH) LINE, AFTER THE WORDS “GROSS PROCEEDS LESS CARGILL COMMISSION”, THE
FOLLOWING SHALL BE ADDED “(EXCEPT ANY PORTION OF SUCH CARGILL COMMISSION THAT IS
DEFERRED PURSUANT TO SECTION 3.5)”.

 

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2.5                                 AMENDMENT TO DG AGREEMENT.  PTE AND CI
HEREBY AGREE TO AMEND THE DG AGREEMENT AS FOLLOWS:

 

(a)                                  the following shall be added as
Section 1.5:

 

1.5  Concessionary Period.  Notwithstanding anything herein to the contrary,
during the Concessionary Period, Cargill shall not be obligated to enter into
any sales agreement for DG with a term that is in excess of ninety (90) days.

 

(b)                                 in Section 3.2, immediately following the
second parenthetical, the following shall be added: “(excluding any such
Contract Year which includes all or any portion of the Concessionary Period)”.

 

(c)                                  the following shall be added as
Section 3.4:

 

Section 3.4.  Concessionary Period.  Notwithstanding anything herein to the
contrary, Cargill agrees to defer the payment of [***] percent [***%] of each of
the Cargill Commissions (as such term is described on Exhibit A) that accrues
during the Concessionary Period, except the portion thereof equal to (i) with
respect to the Cargill Standard Commission, Cargill Non-Standard Commission and
Cargill Own Account DDG Commission, [***]% of the F.O.B. Facility Price and
(ii) with respect to any other Cargill Commissions, $[***] per ton (such
deferred amounts, in the aggregate, the “Deferred DG Commission Payments”).  The
Deferred DG Commission Payments shall be paid by Producer in twenty-four (24)
equal monthly installments, with the first such installment to be due and
payable on the one year anniversary of the Concession Effective Date, and
subsequent installments to be due and payable on the first business day of each
calendar month thereafter.

 

(D)                                 EXHIBIT A SHALL BE DELETED IN ITS ENTIRETY
AND REPLACED WITH EXHIBIT A ATTACHED HERETO.

 

SECTION 3

CONCESSION TERMS

 

3.1                                 DEFERRAL PAYMENTS.

 

(A)                                  THE PARTIES AGREE THAT, AFTER GIVING EFFECT
TO THE AMENDMENTS SET FORTH HEREIN, DEFERRED CORN SUPPLY PAYMENTS (AS DEFINED IN
THE CORN SUPPLY AGREEMENT), DEFERRED RENT PAYMENTS (AS DEFINED IN THE PTE
LEASE), DEFERRED ETHANOL COMMISSION PAYMENTS (AS DEFINED IN THE ETHANOL
MARKETING AGREEMENT) AND DEFERRED DG COMMISSION PAYMENTS (AS DEFINED IN THE DG
AGREEMENT) (SUCH DEFERRED AMOUNTS, IN THE AGGREGATE, THE “DEFERRED PAYMENT”)
SHALL EACH BEAR INTEREST AT THE APPLICABLE EURODOLLAR RATE PLUS THE MARGIN,
DURING EACH INTEREST PERIOD, FROM THE DATE SUCH AMOUNTS ARE DEFERRED UNDER THE
RESPECTIVE PTE-CARGILL AGREEMENT UNTIL (BUT EXCLUDING) THE DATE SUCH AMOUNTS ARE
PAID TO CARGILL.

 

(B)                                 WITHIN FIVE (5) CARGILL WORKING DAYS AFTER
THE END OF EACH CALENDAR MONTH, CARGILL WILL SEND AN INVOICE ELECTRONICALLY TO
PTE SETTING FORTH THE AMOUNT OF ANY INTEREST

 

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THAT HAS ACCRUED IN RESPECT OF THE DEFERRED PAYMENT FOR SUCH MONTH (“DEFERRAL
INTEREST INVOICE”).  ANY FAILURE BY CARGILL TO SEND A DEFERRAL INTEREST INVOICE
DOES NOT IN ANY WAY AFFECT THE AMOUNT OF ANY INTEREST THAT HAS ACCRUED IN
RESPECT OF THE DEFERRED PAYMENT FOR SUCH MONTH.  WITHIN FIVE (5) CARGILL WORKING
DAYS AFTER CARGILL’S TRANSMISSION OF THE DEFERRAL INTEREST INVOICE, PTE SHALL
PAY TO CARGILL THE AMOUNT SET FORTH IN ANY SUCH DEFERRAL INTEREST INVOICE FOR
SUCH PRIOR MONTH.

 

(C)                                  FOR THE AVOIDANCE OF DOUBT, NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN OR IN ANY OF THE PTE-CARGILL AGREEMENTS, PTE
SHALL HAVE THE RIGHT AT ANY TIME, AND FROM TIME TO TIME, TO PREPAY, WITHOUT
PREMIUM OR PENALTY HEREUNDER, ALL OR ANY PORTION OF THE DEFERRED PAYMENT.

 

3.2                                 CLARIFICATION OF SETOFF RIGHTS.

 

(a)                                  PTE and Cargill hereby acknowledge and
agree that (i) the Goods and Services Agreements, together with this Omnibus
Agreement, the BLE Omnibus Agreement and the Goods and Services Agreements (as
defined in the BLE Omnibus Agreement) (collectively, the “Cargill Goods and
Services Agreements”) constitute and shall be deemed to be a “master netting
agreement” and that the Parties, together with BLE shall be deemed to be “master
netting participants” within the meaning of, and as such terms are used in, any
law applicable to the Parties’ rights herein, including the Bankruptcy Code, and
(ii) all nettings, liquidations, and setoffs of the Aggregate Exposure of
Cargill (as defined in the Master Agreement and amended hereby) by Cargill
against amounts owed to BLE and PTE, as well as all other netting, liquidation,
and setoffs effectuated pursuant to the Cargill Goods and Services Agreements
will be governed by the following provisions of the Bankruptcy Code in the event
of the bankruptcy of either BLE or PTE: (A) Sections 556, 560, 561 and 562;
(B) Sections 362(b)(6), (17) and (27); (C) Sections 546(e), (g) and (j); and
(D) Section 548(d)(2).

 

(b)                                 The Parties agree that the setoffs and
netting contemplated hereunder arise under swap agreements, forward contracts,
master netting agreements or commodity contracts (as applicable) and constitute
“settlement payments” as set forth in Sections 101 and 741 of the Bankruptcy
Code.  The Parties further intend that the Cargill Goods and Services Agreements
and the transactions occurring thereunder constitute “forward contracts,”
“commodity contracts,” “master netting agreements,” or “swap agreements” (as
applicable), as such terms are defined in the Bankruptcy Code.

 

(c)                                  With respect to the Cargill Goods and
Services Agreements and any transactions thereunder or related thereto that
constitute: (i) a “forward contract,” each party thereto constitutes a “forward
contract merchant”; (ii) a “commodity contract,” each party thereto constitutes
a “commodity broker,” (iii) a “swap agreement,” each party thereto constitutes a
“swap participant,” and (iv) a “master netting agreement,” each party thereto
constitutes a “master netting agreement participant,” within the meaning of, and
as such terms are used in, the Bankruptcy Code or any law applicable to the
Parties’ rights herein, whether now or hereafter enacted or made applicable. 
The Parties agree that the Cargill Goods and Services Agreements and all of the
transactions hereunder and thereunder form a single integrated agreement among
the Parties and BLE.  The Parties hereby acknowledge and agree that the
BLE-Cargill Agreements and the PTE-Cargill Agreements were

 

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negotiated and entered into simultaneously as integrated parts of one unified
transaction with a common purpose.  Without limiting the generality of the
forgoing, (i) the Parties would not have entered into one of the BLE-Cargill
Agreements or one of the PTE-Cargill Agreements without entering into all of the
BLE-Cargill Agreements and the PTE-Cargill Agreements (ii) the consideration for
such agreements is not separate and distinct, but interrelated and incorporated
by reference between all of the BLE-Cargill Agreements and the PTE-Cargill
Agreements and (iii) in the event that any of the Parties files a petition under
the Bankruptcy Code, the Parties intend that all of the BLE-Cargill Agreements
and the PTE-Cargill Agreements will either be assumed or rejected together as
one executory contract and unexpired lease under section 365 of the Bankruptcy
Code.

 

3.3                                 RESTRICTIONS ON PAYMENTS.  BLE, PTE AND ANY
PARENT OR AFFILIATED COMPANY SHALL NOT DECLARE OR PAY ANY DIVIDEND,
DISTRIBUTION, OR RETURN OF CAPITAL PRIOR TO THE EXPIRATION OF THE TERM OF THE
CONCESSIONARY PERIOD.  FOR THE AVOIDANCE OF DOUBT, THE PREVIOUS SENTENCE SHALL
NOT BE CONSTRUED TO AFFECT THE ABILITY OF PTE TO MAKE PAYMENTS OF PRINCIPAL AND
INTEREST IN THE ORDINARY COURSE OF BUSINESS TO ITS SECURED CREDITORS.

 

3.4                                 ACCOUNTING AND AUDIT RIGHTS.  WITHOUT
LIMITING THE OBLIGATIONS OF PTE IN THE MASTER AGREEMENT (INCLUDING, WITHOUT
LIMITATION, SECTION 10(Q) THEREOF), DURING THE CONCESSIONARY PERIOD, (A) PTE
SHALL PROVIDE TO CARGILL COPIES OF ALL FINANCIAL STATEMENTS, FINANCIAL
FORECASTS, FINANCIAL MODELS, BUSINESS PLANS, MATERIAL CORRESPONDENCE, AND
OPERATIONS REPORTS (“INFORMATION”) FURNISHED BY PTE OR ITS REPRESENTATIVES TO
ITS OTHER LENDERS AND TRADE CREDITORS, (B) PTE SHALL FURNISH THE INFORMATION TO
CARGILL AT THE SAME TIME SUCH INFORMATION IS FURNISHED TO PTE’S OTHER LENDERS
AND TRADE CREDITORS, (C) PTE SHALL FROM TIME TO TIME PROVIDE CARGILL WITH SUCH
FINANCIAL INFORMATION AND COPIES OF RELEVANT FORBEARANCE AND STAND-STILL
AGREEMENTS AS CARGILL MAY REQUEST AND (D) CARGILL AND ITS ACCOUNTING FIRM SHALL
HAVE THE RIGHT, FROM TIME TO TIME AND AT CARGILL’S EXPENSE, TO AUDIT PTE’S
BOOKS, RECORDS, AND FINANCIAL STATEMENTS.

 

3.5                                 EFFECTIVENESS.  THIS OMNIBUS AGREEMENT SHALL
BECOME EFFECTIVE ON THE DATE ON WHICH PTE PROVIDES EVIDENCE TO CARGILL THAT THE
EXECUTION AND DELIVERY OF THIS OMNIBUS AGREEMENT BY PTE AND CARGILL HAS BEEN
CONSENTED TO IN WRITING BY THE FINANCING PARTIES UNDER THE CONSTRUCTION, TERM
AND WORKING CAPITAL CREDIT FACILITY LED BY BNP PARIBAS, AS ADMINISTRATIVE AGENT
AND BY DEUTSCHE BANK TRUST COMPANY AMERICAS OR ANY APPLICABLE ASSIGNEE OR
SUCCESSOR, AS COLLATERAL AGENT (SUCH DATE, THE “CONCESSION EFFECTIVE DATE”).

 

SECTION 4

DEFAULT & REMEDIES

 

4.1                                 PTE DEFAULT.  EACH OF THE FOLLOWING SHALL
CONSTITUTE AN EVENT OF DEFAULT ON THE PART OF PTE (A “PTE EVENT OF DEFAULT”)
UNDER THIS OMNIBUS AGREEMENT:

 

(a)                                  PTE defaults in the due performance of its
payment obligations under Section 3.1(b);

 

(b)                                 A Producer Event of Default occurs under any
of the PTE-Cargill Agreements;

 

(c)                                  PTE defaults in the due performance and
observance of any of its obligations hereunder (except its payment obligations
under Section 3.1(b);

 

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(d)                                 PTE files a voluntary petition in
bankruptcy, has filed against it an involuntary petition in bankruptcy, makes an
assignment for the benefit of creditors or has a trustee or receiver appointed
for any or all of its assets; and

 

(e)                                  any “BLE Event of Default” as defined in
the BLE Omnibus Agreement.

 

4.2                                 REMEDIES.  IF A PTE EVENT OF DEFAULT OCCURS
FOR ANY REASON AND IS CONTINUING, IN ADDITION TO SUCH OTHER RIGHTS AND REMEDIES
CARGILL MAY HAVE UNDER THE PTE-CARGILL AGREEMENTS, THE OMNIBUS AGREEMENTS OR
APPLICABLE LAW, CARGILL MAY, UPON WRITTEN NOTICE TO PTE, TERMINATE THE
CONCESSIONARY PERIOD AND EXERCISE ALL RIGHTS AND REMEDIES AVAILABLE TO IT UNDER
THE PTE-CARGILL AGREEMENTS AND THIS OMNIBUS AGREEMENT; PROVIDED, THAT, UPON THE
OCCURRENCE OF A PTE EVENT OF DEFAULT AS DESCRIBED IN SECTION 4.1(D), NO SUCH
NOTICE SHALL BE REQUIRED TO BE DELIVERED.  UPON ANY TERMINATION OF THE
CONCESSIONARY PERIOD PURSUANT TO THIS SECTION 4.2, THE FULL AMOUNT OF THE
DEFERRED PAYMENT, TOGETHER WITH ANY INTEREST THAT HAS ACCRUED IN RESPECT OF THE
DEFERRED PAYMENT, SHALL BECOME IMMEDIATELY DUE AND PAYABLE.

 

SECTION 5

MISCELLANEOUS

 

5.1                                 REPRESENTATIONS AND WARRANTIES.  EACH OF THE
PARTIES HERETO REPRESENTS AND WARRANTS AS TO ITSELF THAT (A) THE EXECUTION,
DELIVERY AND PERFORMANCE BY SUCH PARTY OF THIS OMNIBUS AGREEMENT HAS BEEN DULY
AND VALIDLY AUTHORIZED BY ALL NECESSARY ACTION AND (B) THIS OMNIBUS AGREEMENT
HAS BEEN DULY AND VALIDLY EXECUTED AND DELIVERED BY SUCH PARTY AND CONSTITUTES
THE LEGAL, VALID AND BINDING OBLIGATION OF SUCH PARTY, ENFORCEABLE AGAINST SUCH
PARTY IN ACCORDANCE WITH ITS TERMS.

 

5.2                                 COSTS AND EXPENSES.  WITHOUT DUPLICATION OF
THE OBLIGATIONS OF BLE UNDER SECTION 5.2 OF THE BLE OMNIBUS AGREEMENT, PTE
AGREES TO PAY OR REIMBURSE CARGILL FOR ALL OF ITS DOCUMENTED OUT-OF-POCKET COSTS
AND EXPENSES INCURRED IN CONNECTION WITH THE PREPARATION AND EXECUTION OF THIS
OMNIBUS AGREEMENT AND ANY OTHER DOCUMENTS PREPARED IN CONNECTION THEREWITH, AND
THE CONSUMMATION AND ADMINISTRATION OF THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL TO CARGILL.

 

5.3                                 LIMITED AMENDMENT.  THE AMENDMENTS SET FORTH
HEREIN SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCES DESCRIBED HEREIN AND
NOTHING HEREIN SHALL BE CONSTRUED TO LIMIT OR BAR ANY RIGHTS OR REMEDIES OF THE
PARTIES TO THE PTE-CARGILL AGREEMENTS.  FOR THE AVOIDANCE OF DOUBT AND WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE PARTIES AGREE THAT NO OTHER
CHANGE, AMENDMENT OR CONSENT WITH RESPECT TO THE TERMS AND PROVISIONS OF ANY OF
THE PTE-CARGILL AGREEMENTS IS INTENDED OR CONTEMPLATED HEREBY (WHICH TERMS AND
PROVISIONS REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT OTHER THAN AS EXPRESSLY
SET FORTH HEREIN).

 

5.4                                 NO AMENDMENTS.  NO AMENDMENT OF MODIFICATION
OF ALL OR ANY PART OF THIS OMNIBUS AGREEMENT SHALL BE EFFECTIVE UNLESS IN
WRITING AND SIGNED BY EACH OF THE PARTIES.

 

5.5                                 COUNTERPARTS.  THIS OMNIBUS AGREEMENT MAY BE
EXECUTED IN ANY NUMBER OF COUNTERPARTS, ALL OF WHICH TAKEN TOGETHER SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT AND ANY PARTY TO THIS OMNIBUS AGREEMENT
MAY EXECUTE THIS OMNIBUS AGREEMENT BY SIGNING ANY SUCH COUNTERPART; SIGNATURE
PAGES MAY BE DETACHED FROM MULTIPLE SEPARATE COUNTERPARTS AND ATTACHED TO A
SINGLE COUNTERPART SO THAT ALL SIGNATURES ARE PHYSICALLY ATTACHED TO THE SAME
COUNTERPART.

 

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5.6                                 SEVERABILITY.  ANY PROVISION OF THIS OMNIBUS
AGREEMENT HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE IN ANY JURISDICTION
SHALL, AS TO SUCH JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY,
ILLEGALITY OR UNENFORCEABILITY WITHOUT AFFECTING THE VALIDITY, LEGALITY AND
ENFORCEABILITY OF THE REMAINING PROVISIONS OF THIS OMNIBUS AGREEMENT; AND THE
INVALIDITY OF A PARTICULAR PROVISION IN A PARTICULAR JURISDICTION SHALL NOT
INVALIDATE SUCH PROVISION IN ANY OTHER JURISDICTION.

 

5.7                                 HEADINGS.  HEADINGS HEREIN ARE FOR
CONVENIENCE ONLY AND SHALL NOT BE RELIED UPON IN INTERPRETING OR ENFORCING THIS
OMNIBUS AGREEMENT.

 

5.8                                 CHOICE OF LAW.  THIS OMNIBUS AGREEMENT SHALL
FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK EXCLUDING CHOICE OF LAW PRINCIPLES OR SUCH LAWS WHICH
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.

 

[The remainder of this page has been intentionally left blank.  The signatures
of the parties hereto appear on the next succeeding pages.]

 

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IN WITNESS WHEREOF, the Parties have caused this Omnibus Agreement to be
executed by their duly authorized representatives as set forth below.

 

 

 

PIONEER TRAIL ENERGY, LLC

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

CARGILL, INCORPORATED

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

CARGILL COMMODITY SERVICES, INC.

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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EXHIBIT A

 

Terms relating to payment and commission calculation

 

Cargill agrees to pay Producer for all Standard-Grade DDG and DDGS loaded into
railcars and trucks and weighed at the Facility for shipment to customers an
amount equal to (i) the F.O.B. Facility Price (with settlement weights as
described in Section 8.4 of the Agreement) less (ii) the Cargill Standard
Commission (except any portion of such Cargill Standard Commission that is
deferred pursuant to Section 3.4) (such payment amount, the “Initial Price”). 
“Cargill Standard Commission” shall mean the greater of (i) three percent (3%)
of the F.O.B. Facility Price and (ii) $2.00 per ton.

 

Cargill agrees to pay Producer for all Non-Standard-Grade DDG and DDGS loaded
into railcars and trucks at the Facility and weighed for shipment to customers,
an amount equal to (i) the F.O.B. Facility Price for such Non-Standard-Grade DDG
[or DDGS] less (ii) the Cargill Non-Standard Commission (except any portion of
such Cargill Non-Standard Commission that is deferred pursuant to Section 3.4)
(such payment amount, the “Non-Standard Initial Price”).  “Cargill Non-Standard
Commission” shall mean the greater of (i) three percent (3%) of the weighted
average F.O.B. Facility Price of all Standard-Grade DDG or DDGS sold by Cargill
to third parties in a rolling thirty (30) day period preceding the date of
Producer’s invoice and (ii) $2.00 per ton.

 

Cargill agrees to pay Producer for all Standard-Grade and Non-Standard-Grade
DWG, MDWG, MDDG, and CDS loaded into railcars and trucks at the Facility and
weighed for shipment to customers an amount equal to (i) the F.O.B. Facility
Price less (ii) the Cargill DWG Commission (except any portion of such Cargill
DWG Commission that is deferred pursuant to Section 3.4).  “Cargill DWG
Commission” shall mean $3.00 per ton.

 

“Accessorial Charges” shall mean charges imposed by third parties for the
off-loading, movement and storage of Producer’s DG, including without limitation
taxes, tonnage taxes, hard-to-unload truck or railcar charges/transloading
charges, bad order railcar repair charges, fuel surcharges, storage charges,
demurrage charges, product shrinkage, detention charges, switching, and weighing
charges.  Neither Party shall be responsible for demurrage charges caused solely
by the negligence or willful misconduct of the other Party.

 

“Cargill Commissions” shall mean, collectively, the Cargill Standard Commission,
the Cargill Non-Standard Commission, the Cargill DWG Commission, the Cargill Own
Account DDG Commission and the Cargill Own Account Other Commission.

 

“Delivered Sale Price” shall mean sales dollars received by Cargill for
Producer’s DG, inclusive of tariff freight, as evidenced by Cargill’s invoices
to its own customers.

 

“F.O.B. Facility Price” shall mean the F.O.B. sale price equivalent net of
applicable deductions and costs as described in this Agreement, including
without limitation Accessorial Charges and Tariff Freight Costs (or, if
applicable, the Delivered Sales Price net of applicable deductions and costs as
described in this Agreement, including without limitation Accessorial Charges
and Tariff Freight Costs) that Cargill invoices its third party customers.

 

“Tariff Freight Costs” shall mean freight and related costs incurred by Cargill
to transport Producer’s DG.

 

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“Standard-Grade” shall mean DG that meet the Specifications set forth in this
Agreement.

 

“Non-Standard-Grade” shall mean DG that fail to meet the Specifications set
forth in this Agreement, but which Cargill nonetheless accepts for marketing
under this Agreement.  For purposes of illustration only, assume that Cargill
purchases ten (10) tons of Standard DG from Producer, and resells said Standard
DG to a third-party purchaser at $100/ton (the F.O.B. Facility Price) plus a
$50/ton tariff rate charge, resulting in a $1,500 sale invoice to said third
party.  Assume also that Cargill incurs and pays $3 per ton in Accessorial
Charges.  In such instance, Cargill would pay, or cause to be paid, the freight
of $500, and the remaining $1,000 would be split as follows: $970 to the
Producer and $30 to Cargill.  Since 3% of $100 equals $3.00 and is greater than
the $2.00 per ton minimum flat fee, $3.00 per ton.  Producer shall also promptly
reimburse Cargill for $30 in Accessorial Charges.

 

The Parties acknowledge that Cargill will pay Producer for its DG within thirty
(30) days from the date that Cargill invoices each customer for such DG, despite
the fact that actual Accessorial Charges and Tariff Freight Costs may not be
determined during such timeframe.  Accordingly, Cargill will pay Producer based
on the actual Delivered Sales Price less estimated Accessorial Charges and
Tariff Freight Costs.  Once the actual Accessorial Charges and Tariff Freight
Costs for each shipment are known, Cargill will true-up the difference with
Producer based on the actual, as opposed to the estimated, amounts and will
provide Producer with reasonable information supporting such amounts.  If the
actual Accessorial Charges and Tariff Freight Costs are less than the estimated
Accessorial Charges and Tariff Freight Costs, Cargill will remit the difference
to Producer.  If the actual Accessorial Charges and Tariff Freight Costs are
greater than the estimated Accessorial Charges and Tariff Freight Costs,
Producer will remit the difference to Cargill, or Cargill will offset the total
amount against other monies due to Producer from Cargill.

 

Whenever in Cargill’s reasonable judgment it is in the best interests of both
Cargill and Producer, Cargill shall be permitted to purchase DG for its own
account.  In every such instance, Cargill shall pay for all DDG and DDGS loaded
into railcars and trucks and weighed for shipment to customers, an amount equal
to (i) the weighted average F.O.B. Facility Price of all DDG and DDGS sold by
Cargill to its customers in the week in which Cargill takes delivery for its own
account less (ii) the Cargill Own Account DDG Commission (except any portion of
such Cargill Own Account DDG Commission that is deferred pursuant to
Section 3.4).  Unless the parties may otherwise agree, the “Cargill Own Account
DDG Commission” shall mean the greater of (i) three percent (3%) of the weighted
average F.O.B. Facility Price and (ii) $2.00 per ton.

 

With respect to DWG, MDWG, MDDG, and CDS that Cargill purchases for its own
account, Cargill shall pay Producer for such material that is loaded into
railcars and trucks at the Facility and weighed for shipment to customers an
amount equal to (i) the weighted average F.O.B. Facility Price of such DWG,
MDWG, MDDG, and CDS sold by Cargill to its customers in the week in which
Cargill takes delivery for its own account less (ii) the Cargill Own Account
Other Commission (except any portion of such Cargill Own Account Other
Commission that is deferred pursuant to Section 3.4).  Unless the parties may
otherwise agree, the “Cargill Own Account Other Commission” shall mean $3.00 per
ton.

 

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