Exhibit 10.3

Execution Version

Date: April 30, 2013

Agreement for the Sale and Purchase of Biomass

FOB Loading Port

between

Drax Power Limited

and

RTK WP Canada, ULC

 

  Page 1 of 58 Version 5

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Execution Version

Agreement for the Sale and Purchase of Biomass FOB Loading Port

Date: April 30, 2013

 

Buyer:    Seller:

Contact details for the purposes of notices:

 

Drax Power Limited

 

Drax Power Station

Selby

North Yorkshire

YO8 8PH

 

(Company number 04883589)

 

Attn:       Louise Neve

Tel:         44 (0)1757 612954

Fax:         44 (0)1757 612258

Email:     backoffice@draxpower.com

  

Contact details for the purposes of notices:

 

RTK WP Canada, ULC

 

10877 Wilshire Blvd

Suite 600

Los Angeles

CA 90024

United States

 

(Company number BC0962401)

 

Attn: Sean Ebnet

Telephone: 310-571-9800

Fax: 310-208-7165

Email: sebnet@rentk.com

copy to: cmorris@rentk.com

In respect of any notices served pursuant to clause 20 (Termination), a copy
shall also be sent to:

Attn:      The Company Secretary

Drax Power Limited

Drax Power Station

Selby

North Yorkshire

YO8 8PH

 

Fax:        44 (0)1757 612258

  

Attn:      General Counsel

Rentech Inc.

10877 Wilshire Blvd

Suite 600

Los Angeles

CA 90024

 

Fax: 310-208-7165

(each a Party and together the Parties)

  

The Seller agrees to sell and the Buyer agrees to buy the Biomass of the
quantity, quality, at the price and on the basis of the terms set out in the
Schedules hereto (together, this “Agreement”).

 

Signed:   /s/ Deborah Keedy     Signed:   /s/ Dan J. Cohrs

Duly authorised representative of

Drax Power Limited:

   

Duly authorised representative of

RTK WP Canada, ULC:

Name:   Deborah Keedy     Name:   Dan J. Cohrs

Title:

  Head of Biomass Procurement    

Title:

 

Chief Financial Officer and

Executive Vice President

 

  Page 2 of 58 Version 5 November 2012

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Schedule 1

Commercial Terms

 

1       Biomass:

   Wood pellet biomass as per the Fuel Specification (“Biomass”).

2       Seller Plant(s):

  

The Seller may supply the Biomass from either of the following plant(s) (each a
“Seller Plant”) at the Seller’s discretion:

 

Wawa, Ontario, Canada (the “Wawa Plant”); and

 

Atikokan, Ontario, Canada (the “Atikokan Plant”)

 

The Seller may, subject to (i) provision by the Seller of Quality Data and
Sustainability Data Returns for such plant(s); and (ii) approval from the Buyer
of such plant(s) (not to be unreasonably withheld or delayed), add further
plants to the Seller Plant(s). For the purposes of this section it shall always
be reasonable for the Buyer to withhold its approval on the grounds of
non-compliance with the Sustainability Requirements or the Fuel Specification.

3       Term:

  

This Agreement shall have effect from the date of execution of this Agreement
(“Agreement Date”) and continue in full force and effect until the expiry of the
later of:

 

(a) ten (10) years from the Delivery Year 1 Start Date (such period being the
“Initial Term”); or

 

(b) any period of extension agreed in accordance with section 4,

 

unless terminated early in accordance with the Terms and Conditions.

4       Extension:

  

No later than one (1) year prior to the end of the Initial Term, the Seller
shall make a binding offer (an “Offer”) to the Buyer to extend this Agreement
beyond the expiry of the Initial Term for one (1) or more twelve (12) month
periods (an “Extension”), provided that the Buyer shall not be entitled to
extend the Term beyond a total period (including the Initial Term) of fifteen
(15) Delivery Years. The Offer shall be for the supply of 400,000 Tonnes of
Biomass per annum.

 

The Buyer shall give binding notice either accepting or declining the Offer
within thirty (30) Business Days of receipt of such Offer (the “Offer Period”).

 

In the event that the Buyer declines such Offer or does not respond within the
Offer Period then the Seller shall be free to sell the relevant Biomass to a
third party in respect of the period commencing upon the expiry of the Initial
Term, provided that the Seller may only sell such Biomass to a third party on
terms taken as a whole (as is reasonably determined by the Seller) that are no
more favourable to that third party than those offered to the Buyer. The Seller
shall act in good faith in making the Offer to the Buyer and offering terms to
such third party. The Seller’s obligation to disclose such terms of a third
party offer to the Buyer shall only remain until six (6) months prior to the
expiration of the Initial Term. For the avoidance of doubt, the Seller may begin
negotiations with a third party immediately after rejection of the Offer by the
Buyer or the expiration of the Offer Period (as applicable), and the Seller may
not sell Biomass to any third party unless the Buyer has already rejected the
terms of the sale offered to the third party within the Offer Period.

 

In the event that the Buyer accepts an Offer from the Seller for an Extension
then the terms and conditions of this Agreement shall apply from the acceptance
of such Offer (except in relation to the Price, which shall be as agreed in the
Offer and acceptance, and unless otherwise agreed in writing by the Parties) and
any additional provisions required, including, but not limited to a Delivery
Schedule for such Extension, shall be agreed between the Parties.

 

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5       Not used

   Not used.

6       Quality Data:

  

The Seller has provided Quality Data prior to execution of this Agreement.

 

The Seller has confirmed that the typical species mix expected in the Biomass is
[*]% Birch and [*]% Poplar.

 

If the Seller intends to change the mix of species which would result in the
blend being used in pellet production exceeding the parameters below, then the
Seller shall be obliged to comply with clause 11.4(a):

 

Species

  

% approved to use in

pellet mix without a

re-test of DSEAR or new

pellet sample

Spruce

   <=100%

Pine

   <=100%

Fir

   <=100%

Birch

   <=100%

Aspen

   <=100%

Maple

   <=100%

Other species

   <= Max 10% in total of other species included in the mix of the pellet

 

   The Seller shall be obliged at all times to notify the Buyer of any material
changes in the process of producing the Biomass in accordance with clause 11.4
(b).

7       Sustainability Data:

   The Seller has provided the Sustainability Data Return prior to execution of
this Agreement.

8       Seller Plant Development Schedule:

  

The Seller Plant Development Schedule for the Wawa Plant and associated
infrastructure at the Loading Port (and any subsequent updates) shall include
the following key milestones (the “Seller Key Milestones”):

 

(a)    site acquisition for the Wawa Plant by 1 June 2013;

 

(b)    air permit received for the Wawa Plant by [*];

 

(c)    completion of site preparation and civil works at the Wawa Plant by [*];

 

(d)    completion of site preparation and civil works (including piling) at the
Loading Port by [*];

 

(e)    pelletising equipment delivered on site by [*];

 

(f)     completion of steelwork and major structures at the Wawa Plant by [*];

 

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(g)    completion of construction and commissioning of the Wawa Plant and sign
off and hand over by the equipment providers by [*]; and

 

(h)    completion of construction and commissioning of storage, conveying and
loading facilities at the Loading Port by [*].

9       Price:

  

[*]

10     Benchmark CV NAR:

   [*] Gigajoules per Tonne measured on the basis of constant pressure.

11     Delivery Year 1 Start Date:

  

1 October 2014

 

If either the Seller or the Buyer fails to deliver or accept (as the case may
be) Shipments in accordance with the applicable Delivery Schedule after the
Delivery Year 1 Start Date, clause 6.1 (in respect of the Seller) and clause 6.2
(in respect of the Buyer) shall apply.

12     Annual Quantity

  

Delivery Year 1 (Quarter 4 2014): [*] Tonnes of Biomass

Delivery Year 2 (2015):

 

Quarter                    

   Tonnes of Biomass

Quarter One

Quarter Two

Quarter Three

Quarter Four

   [*]

[*]

[*]

[*]

 

  

Delivery Years 3-10 (2016 - 2023): 400,000 Tonnes of Biomass

 

Delivery Year 11 (Quarters 1, 2 and 3 2024): 300,000 Tonnes of Biomass

 

All Tonnages referred to in this section 12 can be increased or decreased by up
to 5% at the Buyer’s option.

13     Delivery Schedule:

   For Delivery Year 1, the Parties shall determine the Delivery Schedule [*].
If the Parties fail to agree the Delivery Schedule clause 5.2.3 shall apply.   
The Delivery Schedule for Delivery Years 1 and 2 shall reflect the
tonnage-per-Quarter set out in section 12 above, and be based on a shipment
volume of between [*] to [*] Tonnes at the Buyer’s sole option (+/- 10% per
shipment at Buyer’s option), provided that the variance in each shipment will
not affect the permitted variance in the overall Annual Quantity for Delivery
Years 1 and 2.    Each subsequent Delivery Schedule shall be based on a fairly
evenly phased delivery schedule over the duration of each Delivery Year based on
a shipment volume of between [*] to [*] Tonnes at the Buyer’s sole option (+/-
10% per shipment at Buyer’s option), provided that the variance in each shipment
will not affect the permitted variance in the overall Annual Quantity.

 

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   Each Delivery Schedule shall comprise the number of Shipments, the tonnage
intake for each Shipment and the proposed fourteen (14) day Loading Port Laycans
for each Shipment.    If the Parties have failed to agree a Delivery Schedule in
accordance with this section 13 or clause 5.2.2 (as relevant), pending
resolution of any dispute by the Expert, the Delivery Schedule shall be deemed
to be based on (Delivery Years 1 and 2) an evenly phased schedule over each
Quarter reflecting the tonnage-per-Quarter set out in section 12 commencing on
the Delivery Year 1 Start Date, or (for subsequent Delivery Years) an evenly
phased schedule over the relevant Delivery Year by reference to the Annual
Quantity.

14     Applicable Incoterm:

   FOB Loading Port, Incoterms 2010. Carriage shall be arranged by the Buyer
(and not by the Seller) in accordance with this Agreement.

15     Loading Port:

   Wolfs Cove Terminal, Quebec City, unless otherwise notified or agreed in
accordance with clause 5.2.4.

16     Loading Rate:

  

[*] Tonnes per Weather Working Day SSHINC for SupraMax and Panamax size Vessels
with net loaded volume exceeding 40,000 Tonnes of Biomass. Where Shipments are
less than 40,000 tonnes, the following Loading Rates shall apply:

 

(i)     less than 20,000 tonnes, minimum loading rate to be negotiated

 

(ii)    greater than 20,000 tonnes to 25,000 tonnes, minimum loading rate of [*]
tonnes per Weather Working Day, SSHINC

 

(iii)  greater than 25,000 tonnes to 30,000 tonnes, minimum loading rate of [*]
tonnes per Weather Working Day, SSHINC

 

(iv)   greater than 30,000 tonnes to 35,000 tonnes, minimum loading rate of [*]
tonnes per Weather Working Day, SSHINC

 

(v)    greater than 35,000 tonnes to 40,000 tonnes, minimum loading rate of [*]
tonnes per Weather Working Day, SSHINC

17     Storage Facilities:

   The Seller shall secure at the Loading Port from the Delivery Year 1 Start
Date storage facilities of [*] Tonnes.

18     Law and Jurisdiction:

   English law and all disputes shall be settled by international arbitration in
New York under the Rules of Arbitration of the International Chamber of
Commerce.

19     Seller’s Bank Account Details:

  

Bank of Montreal

 

Account name: RTK WP Canada, UC

 

Account number: [*]

 

SWIFT Code: [*]

20     Agent for service of process:

  

The Seller irrevocably appoints:

 

Trident Company Services (UK) Limited, 7 Welbeck Street, London W1G 9YE

as its agent for service of process in relation to any arbitration proceedings
or proceedings before the English courts in connection with this Agreement. The
Seller agrees that failure by a process agent to notify the Seller of the
process will not invalidate the proceedings concerned.

21     Buyer Rights at Loading Port

   The Buyer shall have the following rights in relation to the Seller’s Port
Facilities:

 

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(a)    If during any Quarter, any volume of biomass or any other product flows
through the Seller’s Port Facilities (other than the Biomass to which this
Agreement relates):

 

(i) the Seller shall notify the Buyer and shall provide to the Buyer details of
the amount of such additional volume that the Seller anticipates will flow
through the Seller’s Port Facilities in the relevant Quarter; and

 

(ii) in respect of that Quarter, the Seller shall, within 10 Business Days
following the end of the Quarter, pay the Buyer [*] in a lump sum equal to [*]%
of [*] of [*] years at a rate of [*]% per annum).

 

The example below is included for the purposes of illustration only. It assumes
20,000 tonnes of additional volume is handled through the port by the Seller in
a Quarter, and that the total [*] costs incurred by the Seller are CAD$[*],
resulting in [*] payable by the Seller of CAD$[*].

 

[*]

 

This paragraph (a) shall apply to additional volumes regardless of whether they
have been procured by the Buyer or the Seller, but it shall not apply to any
volumes to which paragraph (b) below applies.

 

The Seller shall provide to the Buyer any documentation reasonably requested by
the Buyer to demonstrate the volume of materials passing through the Seller’s
Port Facilities in any Quarter.

  

(b)    The Seller grants to the Buyer the option for the Buyer to bring
additional volume of up to [*] Tonnes of biomass per annum through the Seller’s
Port Facilities. The Buyer may exercise this right at any time from [*] and
through the remainder of the Term by providing the Seller with written notice
setting out the relevant additional volume and the period for which the Buyer
intends to bring the additional volume through the Seller’s Port Facilities,
subject always to the Parties agreeing any logistical or other issues that
arise. The Buyer may exercise this option more than once during the Term.

 

If the Buyer exercises this option it shall pay to the Seller the additional
costs incurred by the Seller as a result of the throughput of the additional
volume, at cost with no margin added by the Seller, such costs being evidenced
by the Seller on an open book basis. Such costs shall exclude any capital
contribution made by the Seller in respect of the Seller’s Port Facilities, but
will include any costs attributed to loading, unloading and storage services.

  

(c)    Pursuant to the Master Services Agreement entered into between the Seller
and Quebec Stevedore Company Limited (“QSL”) on or about the date of this
Agreement (“Port Agreement”), QSL has agreed to grant to the Seller an option to
expand the storage capacity connected to the existing port infrastructure onto
Adjacent Land (“Option”). The Port Agreement provides that this option may be
assigned by the Seller to the Buyer. Accordingly:

 

(i) the Seller shall notify the Buyer as soon as reasonably practicable if the
Seller receives a notice from QSL pursuant to the Port Agreement stating that
(1) QSL is considering granting use rights to any Adjacent Land to any third
party, (2) QSL is considering developing such lands for its own use, or (3) QSL
has received a bona fide offer from a third party to use the Adjacent Land that
it is willing to accept;

 

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(ii) following receipt of such notice, the Buyer shall notify the Seller within
the period provided for under the Port Agreement whether the Buyer wishes to
exercise the Option. In the event that the Buyer wishes to exercise the Option,
the Seller shall notify QSL and shall assign the Option to the Buyer as soon as
reasonably possible;

 

(iii) where the Buyer is not able to exercise the Option, QSL, pursuant to the
Port Agreement, grants to the Seller (with a right for the Seller to assign to
the Buyer) a further option to secure the Adjacent Land for a further period of
three years on terms to be agreed. Where the Buyer wishes to exercise this
option, the Seller shall notify QSL as soon as reasonably practicable after the
Seller has received confirmation from the Buyer.;

 

(iv) without prejudice to paragraph (b), if the Buyer wishes to bring additional
volume of biomass through the Loading Port in excess of the capacity of the
Seller’s Port Facilities, the Buyer shall notify the Seller and the Parties
shall use reasonable commercial efforts to reach an agreement on the commercial
terms of a port throughput arrangement to accommodate the Buyer’s requirements.
;If the Parties are unable to agree on such commercial terms within 30 days of
the Buyer’s notification, the Buyer may work directly with Quebec Stevedore
Company Limited to agree the terms on which to expand the storage capacity
connected to the existing infrastructure onto Adjacent Land and the Seller
shall, upon the request of the Buyer, assign the Option to the Buyer.

 

For the purposes of this paragraph (c), “Adjacent Land” shall be any vacant land
adjacent to the port terminal that is controlled or leased by QSL and of a size
sufficient to build approximately [*] tonnes of product storage and have the
potential to be connected to the shiploader which is part of the infrastructure
equipment. Where the Buyer has reach an agreement with QSL on terms to expand
the storage then the Seller will use commercially reasonable efforts to work
with the Buyer to allow the Buyer use of the ship loading facility and to allow
the Buyer access to the berth as appropriate.

 

The Seller shall use reasonable endeavours to exercise its rights under the Port
Agreement in order to ensure the Buyer has the full benefit of the rights set
out in this paragraph (c).

  

(d)    In addition to a), b) and c) above, the Seller will use reasonable
commercial efforts to accommodate any additional volumes that the Buyer wishes
to export through the Seller’s existing rail and port infrastructure throughout
the Term. The Buyer shall reimburse to the Seller any costs that result from
such additional volume, with such costs being payable on pass-through terms with
no margin added by the Seller, and evidenced by the Seller on an open book
basis.

  

If the Buyer and Seller execute a separate agreement for new volume to be
exported through the Loading Port, the Buyer’s rights referred to in paragraphs
(a) and (b) above shall no longer apply.

 

The Seller agrees to use commercially reasonable efforts to work with the Buyer
to lobby the port, port authority, and relevant government departments to
increase the potential ship size where possible within the constraints of the
port/channel.

 

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Schedule 2

Fuel Specification

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Schedule 3

Terms and Conditions

 

Clause        Page  

1

  Definitions      11   

2

  Priority of Terms      19   

4

  Purchase and Sale of Biomass      20   

5

  Delivery Schedule      22   

6

  Failure to Deliver or Take Delivery      23   

7

  Risk, Title and Liens      24   

8

  Insurance      25   

9

  Price and Payment      25   

10

  Quantity and Weighing      28   

11

  Pre Shipment Testing and Changes in Biomass Production      29   

12

  Quality      30   

13

  Contamination and Handleability      32   

14

  Rejection and Suspension      33   

15

  Shipping conditions      34   

16

  Sustainability      38   

17

  Representations and Warranties      40   

18

  Change of Law      42   

19

  Confidentiality      42   

20

  Termination      43   

21

  Effects of Termination      44   

22

  Expert Determination      45   

23

  Not used.      45   

24

  Novation and Assignment      45   

25

  No Partnership, Agency or Employment      46   

26

  Set Off      46   

27

  Variation      46   

28

  Waiver      46   

29

  Cumulative Rights      47   

30

  Force Majeure      47   

31

  Limitation of liability      48   

32

  Entire Agreement      48   

33

  Severance      48   

34

  Notices      49   

35

  Dispute Resolution      49   

36

  Governing Law and Jurisdiction      50   

37

  Service of Process      51   

38

  Rights of Third Parties      51   

39

  Counterparts      51   

 

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1 Definitions

 

1.1 In this Agreement capitalised terms in the first column of the Commercial
Terms have the meaning given in that Schedule, unless otherwise defined in this
Clause 1.1, and the following expressions have the following meanings:

Actual Fibre Costs has the meaning given in clause 4.5.2;

Affiliate means any holding company or subsidiary company of a Party or any
company which is a subsidiary company of the holding company of a Party and the
expression “holding company” and “subsidiary” shall have the meanings
respectively ascribed to them in section 1159 of the Companies Act 2006;

Agreement means the agreement constituted by the Commercial Terms, these Terms
and Conditions and all other Schedules;

Agreement Date has the meaning given in section 3;

Analysed Characteristics has the meaning given in clause 12.4.5;

Annual Quantity means the quantity of Biomass specified in section 12 to be
delivered by the Seller to the Buyer in each Delivery Year;

Approved Species means Aspen (Poplar), Birch (White and Yellow), Maple
(Red/Sugar), Ash (Black/White), Spruce (Black/White), Pine (Jack, Red, White),
Fir (Balsam), Tamarack (Larch) and Cedar;

Bill of Lading means the receipt for the Biomass loaded on board a Vessel signed
by the master or agent of the Vessel and which is also the document of title to
the Biomass;

Biomass Handleability Requirements has the meaning given in clause 13.1;

Business Day means a day (other than a Saturday or Sunday or statutory holiday
in the UK) on which banks are open for general business in London, the United
Kingdom;

Buyer’s Analysis Certificate has the meaning given in clause 12.4.14;

Buyer’s Inspector means a mutually acceptable suitably qualified inspector
appointed by the Buyer for and on behalf of the Buyer and the Seller jointly in
accordance with clause 12.4.12;

Buyer’s Laboratory means a mutually acceptable internationally recognised
independent commercial sampling and analytical laboratory accredited to ISO
17020/ISO 17025 as a minimum appointed by the Buyer for and on behalf of the
Buyer and the Seller jointly in accordance with clause 12.4.12;

Buyer’s Sample has the meaning given in clause 12.4.1;

Buyer’s Shortfall Quantity has the meaning given in clause 6.2.2;

Buyer’s Transport Charges means any reasonable, properly incurred and documented
additional costs or charges incurred by the Buyer as a direct result of the
Seller’s failure to deliver a Shipment, including (a) any and all costs of
deviating the Vessel to an alternative loading port to load replacement biomass
on to the Vessel (to the extent not included within the Buyer’s Replacement
Costs); (b) any deadfreight charges; and (c) any costs incurred by the Buyer as
a direct result of the Vessel attending the Loading Port in circumstances where
the Seller failed to deliver the Biomass at the Loading Port in accordance with
this Agreement (including any Demurrage incurred by the Buyer at the Loading
Port for each day or pro rata part thereof that the Biomass was not delivered);

 

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CAD$ means Canadian Dollars;

Calorific Value Net As Received or CV NAR means the quantity of heat liberated
by the complete combustion of one kilogram of Biomass when the water produced is
assumed to remain as a vapour and the heat of vaporisation is not recovered,
expressed in GJ per Tonne, and always measured at constant pressure;

CEN Standard means the standards set by the European Committee for
Standardization which are applicable to the analysis and sampling of Biomass, as
may be amended or replaced from time to time;

Change of Law means any of the following events occurring after the date of this
Agreement:

 

  a) a change in or repeal of an existing Law or any interpretation thereof;

 

  b) an enactment or making of a new Law or any interpretation thereof; or

 

  c) a cancellation or non-renewal of, or change in, the conditions applicable
to any legal approval, permit or licence held by a Party otherwise than as a
result of any act, omission or other default of such Party;

Claiming Party has the meaning given in clause 30.2;

Commercial Terms means the Commercial Terms set out in Schedule 1;

Competent Authority means any court or tribunal and any local, national or
supra-national agency, authority, department, inspectorate, minister, ministry,
official, or public or statutory Person (whether autonomous or not) of, or of
the government of, the United Kingdom or of the European Union or Canada, any of
which has jurisdiction over either or both of the Parties (including Ofgem);

Compliance Statement means the Compliance Statement at Schedule 7;

Confidential Information has the meaning given in clause 19;

CSR Policy Statement means the Corporate Social Responsibility Policy Statement
at Schedule 8;

Data Return Confirmation has the meaning given in clause 16.3.2;

Defaulting Party means the Party as specified in clause 20.1;

Delivery Schedule means the schedules of Shipments to be made under and in
accordance with this Agreement as more fully referred to in section 13;

Delivery Year means:

 

  •  

a period of twelve (12) months beginning on the 1 January 2015 or any twelve
(12) month anniversary of it except the last Delivery Year which shall end on
the expiry or termination of this Agreement; or

 

  •  

Delivery Year 1;

Delivery Year 1 means the period from the Delivery Year 1 Start Date to
31 December 2014;

Demurrage means the financial compensation payable if time used in completing
loading is greater than laytime and payable for all such excess time at a rate
notified to the Seller under clause 15 which must be a genuine pre-estimate of
the damages incurred;

 

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Despatch means the amount payable, if any, for laytime saved and being a rate
equal to [*] per cent ([*]%) of the Demurrage rate per day or pro-rata part
thereof;

Direct Losses means [*];

Discharge Port means the port(s) used by the Buyer to unload the Biomass from
the Vessel;

Early Termination Date has the meaning given in clause 20.1;

Economic Sanctions means any economic sanction or trade restriction imposed by
any rule, regulation or statute of the United Kingdom, the European Union, the
United Nations or the United States of America, and any other applicable laws
imposing economic sanctions or trade restrictions;

Environment means all, or any of, the following media: the air (including,
without limitation, the air within buildings and the air within other natural or
man-made structures above or below ground), water (including, without
limitation, ground and surface water) and land (including, without limitation,
surface and sub-surface soil);

Environmental Approval means any authorisation and the filing of any
notification, report or assessment required under any Environmental Law for the
operation of the business of the Seller conducted on or from properties owned or
used by the Seller;

Environmental Law means any applicable law or regulation which relates to:

(A) the pollution or protection of the Environment;

(B) the harm to or the protection of human health;

(C) the conditions of the workplace; or

(D) any emission or substance capable of causing harm to any living organism or
the Environment;

Event of Default means any of the events specified in clause 20.2;

Expert has the meaning given in clause 22.1;

Extension has the meaning given in section 4;

Final Commercial Invoice has the meaning given in clause 9.7.1;

Final Weight Certificate has the meaning given in clause 10.5;

FOB means free on board, Incoterms 2010 as amended by this Agreement;

Force Majeure means, in relation to either Party, any event or circumstance
beyond the reasonable control of that Party, including but not limited to:

 

  a) acts of God, fire, explosion, radioactive or other contamination (including
contaminative precipitation or contamination to the water table), lightning,
earthquake, flood, storm, drought or other extreme weather conditions;

 

  b) acts of warfare whether declared or otherwise, act of public enemy, act or
threat of terrorism, revolution, riot or other civil insurrection, public
demonstration, sabotage or act of vandalism;

 

  c) breakdown, damage to, closure or other failure of all or a significant
proportion of transportation routes or harbour, ports, berth or other facilities
by which the Seller intends or intended to make delivery or the Buyer intends or
intended to take delivery;

 

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  d) epidemics;

 

  e) any circumstances arising out of piracy, or the consequences thereof;

 

  f) any government or Competent Authority requisition, control, intervention,
requirement or interference (other than any Change of Law covered by clause 16
or clause 18);

 

  g) strikes, lockouts or other work stoppages or slow-downs or other industrial
disputes, disturbance or action except those specifically directed at either
Party and/or any of their Affiliates or occurring at a facility of any of the
foregoing, provided that the foregoing exception shall not apply to any general
strike,

provided that: (i) the event could not have been prevented or overcome by the
Party acting as a Reasonable and Prudent Operator, and (ii) a lack of funds or a
failure to pay shall not constitute Force Majeure. For the avoidance of doubt,
Force Majeure events shall not include any event or circumstance that is caused
by or arises from a mechanical or equipment breakdown of plant, machinery or
facilities attributable to normal wear and tear;

Force Majeure Cure Period has the meaning given in clause 30.6;

Force Majeure Notice has the meaning given in clause 30.2.1;

Forest Resource Processing Licence means a license issued by Province of Ontario
allowing the Seller Plant to consume forest product;

Free Pratique means the permission granted by the authorities at a port, being
satisfied as to the state of health of those on board a Vessel on arrival, for
them to make physical contact with the shore and the Vessel to berth;

Fuel Specification means the specification for the Biomass set out in Schedule 2
(Fuel Specification);

GJ means gigajoules;

Holiday means any public holiday which is specified in the Port Requirements in
respect of the relevant Loading Port, but does not include Super Holidays;

HSE Conditions means the conditions contained in Schedule 9;

IMO Code of Safe Practice means the International Maritime Organization Code of
Safe Practice for Solid Bulk Cargoes, 2004, as amended or replaced from time to
time;

Ice Clause means the regulation in the Bill of Lading, charter-party or other
relevant arrangement, which, having regard to customary practice, inter alia,
allows the Vessel: not to force ice but follow ice-breakers, not to enter or
remain in any icebound port or area nor any port or area where ice conditions
may, at master’s discretion, cause damage to the Vessel and instead sail to the
nearest ice-free and safe place;

Incoterms means International Chamber of Commerce Incoterms 2010 or such revised
or updated version of such terms as the Parties may agree shall apply for the
purpose of this Agreement;

Independent Inspector means a mutually acceptable suitably qualified inspector
appointed by the Seller for and on behalf of the Seller and the Buyer jointly in
accordance with clause 12.4.1;

Independent Laboratory means a mutually acceptable internationally recognised
independent commercial sampling and analytical laboratory accredited to ISO
17020/ISO 17025 as a minimum appointed by the Seller for and on behalf of the
Seller and the Buyer jointly, in accordance with clause 12.4.1;

 

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Initial Term has the meaning given in section 3;

Interim Commercial Invoice has the meaning given in clause 9.6.1;

ISO Standard means the standards set by the International Organization for
Standardisation which are applicable to the analysis of the Biomass, as may be
amended or replaced from time to time;

Law means any law, regulation, ordinance, order, statutory instrument,
directive, notification, rule, instruction, by-law, guideline, code or standard
which;

 

  a) is legally binding in the United Kingdom (or any part of it) from time to
time; or

 

  b) has any jurisdiction with regard to the Seller or the sale and supply of
the Biomass;

Laycan means the period during which the Vessel must arrive at the Loading Port
for the commencement of loading;

LIBOR means the London Interbank Offered Rate British Bankers Association
interest settlement rate for the relevant currency and term;

Loading Port Weight Certificate has the meaning given in clause 10.1;

Market Price means the price from time to time of Biomass as indicated (i) by
the available relevant market indices for industrial wood pellets pricing based
on wood pellets settlement prices (including, if reasonably applicable, the
relevant freight adjustment) or (ii) the price at which the relevant Party would
be able to sell or purchase the quantity of under-delivered or under-accepted
quantity in the market acting in a reasonable manner, which prices will be
determined by taking the average of the price quotations for the Product of
similar quality and Loading Port for a similar period obtained from at least two
and no more than four independent internationally recognised dealers/brokers or
counterparties (such brokers to be appointed by the non-defaulting Party). When
assessing Market Price, the non-defaulting Party may elect to either use (i) or
(ii) above in its complete discretion. For the avoidance of doubt the
non-defaulting Party is not obliged to enter into a replacement transaction;

Ministry Recognition of Crown Fibre means the recognition of fibre supplies that
the Seller Plants have access to from Ontario Crown lands;

Non-Claiming Party has the meaning given in clause 30.2.1;

Non-Defaulting Party means the Party as specified in clause 20.1;

Notice of Readiness or NOR means the notice tendered by the master of the Vessel
or his representative in accordance with clause 15.3.1;

Ofgem means the Office of Gas and Electricity Markets, regulating the gas and
electricity industries in the UK;

Ontario Ministry of Natural Resources Accepted Business Plan means the business
plan of this name resulting in the recognition of fibre and fibre supplies as
well as the MROL and fibre processing licensing issues, and the formal removal
of the relevant volume from the fibre that the Province of Ontario deem to be
available for other users;

Ontario Ministry Recognised Operating Level (MROL) means the recognition of the
level of fibre that the Seller Plants consume within the regions identified in
the Ontario Ministry of Natural Resources Accepted Business Plan;

Person means an individual, a partnership, a corporation, a limited liability
company, a fund, a joint stock company, a joint venture, a Competent Authority,
a financial institution or any other entity having legal or natural status;

 

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Port Requirements means the requirements of the Loading Port to apply to all
collections effected under this Agreement, as attached at Schedule 4;

Price means the price of Biomass, as specified in section 9, delivered on FOB
terms in accordance with this Agreement;

Quality Data has the meaning given in clause 11.1;

Quarter means a period of three (3) consecutive months commencing respectively
on 1st January, 1st April, 1st July and 1st October in any year (provided that
the first Quarter and last Quarter falling during the Term shall be reduced as
necessary);

Reasonable and Prudent Operator means a Person seeking to perform its
contractual obligations under this Agreement in good faith and, in so doing and
in the general conduct of its undertaking, exercising that degree of skill,
diligence, prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced operator in substantial compliance with
all applicable Laws engaged in the same type of undertaking in the same locality
and under the same or similar circumstances and conditions, and any reference to
the standard of a Reasonable and Prudent Operator in this Agreement shall be a
reference to such degree of skill, diligence, prudence and foresight;

Reasonable Endeavours means a requirement to do all that can reasonably be done
without incurring material cost or risking exposure to material loss or other
liability (and any judicial interpretation imposing a lesser or greater standard
shall not apply);

Reject Biomass has the meaning given in clauses 11.5, 12.2, 12.4.11, 13.3 and
16.5.2;

Rejection Notice means a notice notifying the Seller that the Buyer is rejecting
the Biomass;

Renewables Obligation Order or ROO means the Renewables Obligation Order 2009
establishing a scheme for the issuance of ROCs by the authority (as that term is
defined in the ROO) as amended and as may be further amended, replaced,
supplemented, superseded or re-adopted from time to time (whether with or
without modifications);

Replacement Price means:

 

  a) in relation to the Buyer, (i) where the Buyer procures replacement Biomass,
the documented price at which the Buyer, taking reasonable steps to mitigate its
losses, purchases substitute Biomass in a quantity, quality and energy value and
on a reasonably similar delivery basis as that to be delivered under this
Agreement (either plus any incremental costs or less any incremental savings,
including transport charges or savings associated with delivery occurring at the
relevant loading port for the replacement purchase), or (ii) absent a purchase,
the Market Price for such quantity, quality and energy value of Biomass and on
reasonably similar delivery terms, as calculated by the Buyer in a commercially
reasonable manner. The Buyer shall not be required to enter into a replacement
transaction in order to determine the Replacement Price; or

 

  b) in relation to the Seller the documented price at which the Seller, taking
reasonable steps to mitigate its losses, sells the Biomass in an amount and
quality and on a reasonably similar delivery basis as that to be sold under this
Agreement (either plus any incremental costs or less any incremental savings,
including transport charges or savings associated with delivery occurring at the
relevant loading port for the replacement sale), or absent a sale, the Market
Price for such quantity, quality and energy value of Biomass and on reasonably
similar delivery terms, as calculated by the Seller in a commercially reasonable
manner. The Seller shall not be required to enter into a replacement transaction
in order to determine the Replacement Price,

provided that where it is not possible for the relevant party to secure a sale
or purchase (as appropriate) or to establish the Market Price on a FOB basis,
the relevant party may establish the Replacement Price on a CIF basis (as
defined in Incoterms 2010), adjusted to take account of freight costs at the
current market rate;

 

16

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Reproducibility Limits means the relevant Testing Standard tolerance guidelines
governing the comparison of two biomass analysis results from the same biomass
sample;

Required Authorisations means all governmental and other licences,
authorisations, permits, consents, contracts and other approvals (if any) that
are required to enable a Party to fulfil any of its obligations under this
Agreement;

Sampling has the meaning given in clause 12.4.1;

Sampling Standard means the CEN 14778:2011 standard set by the European
Committee for Standardization, as may be amended or replaced from time to time;

Seller Key Milestone has the meaning given in section 8;

Seller Parent means Rentech, Inc. of 10877 Wilshire Blvd, Suite 600, Los
Angeles, California 90024 (IRS Employer Identification No. 84-0957421);

Seller Plant has the meaning given in section 2;

Seller Plant Development Schedule means the schedule attached to this Agreement
at Schedule 6;

Seller’s Analysis Certificate means the certificate issued by the Independent
Laboratory under clause 12.4.6 recording the level of compliance with all the
parameters of the Fuel Specification at the Loading Port;

Seller’s Charges means any reasonable, properly incurred and documented
additional costs or charges incurred by the Seller (including, but not limited
to, additional port storage or logistics costs) directly arising from the
Buyer’s failure to take delivery of a Shipment in circumstances where the Seller
delivered the Biomass at the Loading Port but the Buyer failed to accept the
Biomass at the Loading Port in accordance with this Agreement, other than by
reason of Force Majeure or reasons attributable to the Seller;

Seller’s Port Facilities means the infrastructure contracted by the Seller at
the Loading Port for the purposes of compliance with its obligations under this
Agreement, including a rail receiving facility, storage facilities of at least
[*] Tonnes and a ship loading facility;

Seller’s Shortfall Quantity has the meaning given in clause 6.1.3;

Shipment means each shipment of Biomass delivered or proposed to be delivered at
the Loading Port as specified in the relevant Delivery Schedule;

Shipment Sample has the meaning given in clause 12.4.1;

Standard & Poor’s means Standard & Poor’s Rating Group (a division of
McGraw-Hill Inc.);

Super Holiday means any public holiday during which all loading operations at
the Loading Port are suspended and shall include the public holidays specified
in the Port Requirements in respect of the relevant Loading Port;

Surveyor means an independent marine surveyor (Master Mariner or similarly
qualified to carry out marine inspections and draught surveys) appointed by the
Buyer or Seller as the case may be for and on behalf of the Seller and the Buyer
jointly in accordance with clause 10;

Suspension Notice means a notice notifying the Seller that the Buyer is
suspending any further delivery of the Biomass in accordance with clause 14.5;

 

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Sustainability Data Return means the sustainability data return to be provided
in accordance with clause 16.3.1 and in the form at Schedule 5 (Sustainability)
of this Agreement or in such form as may be required by the Buyer to reflect
changes to the Sustainability Policy notified to the Seller in accordance with
this Agreement;

Sustainability Policy means the Buyer’s sustainability policy (available at
http://www.draxpower.com/biomass/sustainability_policy) at the Agreement Date
and as amended in accordance with clause 16;

Sustainability Requirements means the Sustainability Policy and the following:

 

  a) the Renewables Obligation Order (ROO) 2009;

 

  b) the requirements and recommendations set out in the Ofgem’s Sustainability
Criteria for Solid and Gaseous Biomass for Generators (greater than 50kW) (dated
19 December 2011);

 

  c) the requirements set out in the “Government response to the consultation on
proposals for the levels of banded support under the Renewables Obligation for
the period 2013-2017 and the Renewables Obligations Order 2012” dated July 2012;

in each case to the extent applicable as at the Agreement Date in respect of the
use of Biomass in [*] (as those terms are referred to in the above
Sustainability Requirements) and as amended in accordance with clause 16.2.2;

Tax means any form of taxation, levy, duty, charge, contribution, withholding or
impost of whatever nature (including any related fine, penalty, surcharge or
interest) imposed, collected or assessed by, or payable to, a Tax Authority;

Tax Authority means any government, state, municipality or any local, state,
federal or other fiscal, revenue, customs or excise authority, body or official
anywhere in the world including HM Revenue & Customs;

Terms and Conditions means the terms and conditions set out in this Schedule 3
(Terms and Conditions);

Testing Standard means the combination of ISO or CEN Standards, as specified in
the Fuel Specification, as may be amended or replaced from time to time;

Tonne means one metric tonne, this being 1,000 kilograms;

Umpire Certificate has the meaning given in clause 12.4.9;

Umpire Laboratory means a mutually acceptable internationally recognised
independent commercial sampling and analytical laboratory accredited to ISO
17020/ISO 17025 as a minimum appointed by the electing Party for and on behalf
of the Seller and the Buyer jointly in accordance with clause 12.4.7;

Umpire Sample has the meaning given in clause 12.4.1;

Umpire Tests has the meaning given in clause 12.4.8;

VAT means Value Added Tax as defined in the Value Added Tax Act 1994;

Vessel means a vessel on which the Biomass is loaded in accordance with this
Agreement;

Vessel Interests means the owner and/or the demise charterer of the Vessel and
their insurers;

Vessel Requirements means a Vessel that:

 

  (a) complies in all respects with any and all rules and regulations of the
Loading Port, including the Port Requirements;

 

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  (b) complies in all respects with all applicable Laws, including Canadian Law;

 

  (c) has not been blacklisted by the Loading Port, Transport Canada or by the
Canadian Coast Guard;

 

  (d) is suitable for transportation of the Biomass;

 

  (e) has valid ISM (International Safety Management) and ISPS (International
Ship and Port Facility Security) Certificates;

 

  (f) is no older than 20 years old; and

 

  (g) has hatches of the mechanical type of such design and construction as not
to impede the operation of the shiploaders; and

Weather Working Day means any period of twenty-four (24) consecutive hours
including Saturdays, Sundays and Holidays but not including Super Holidays
during which weather permits Vessel loading operations.

 

1.2 In this Agreement:

 

1.2.1 the singular includes the plural and vice versa;

 

1.2.2 references to clauses are to clauses of these Terms and Conditions;

 

1.2.3 references to sections are to sections of the Commercial Terms;

 

1.2.4 references to Schedules are to schedules to this Agreement;

 

1.2.5 the Schedules form part of this Agreement and the expression “this
Agreement” includes all the Schedules;

 

1.2.6 the headings in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement;

 

1.2.7 references to a “day” means a calendar day, “month” means a calendar month
and “year” means a calendar year (“calendar” meaning the Gregorian calendar);

 

1.2.8 any express reference to an enactment includes references to (i) that
enactment as amended, consolidated or re-enacted from time to time by or under
any other enactment before or after the date of signing this Agreement; (ii) any
enactment which that enactment re-enacts (with or without modification); and
(iii) any subordinate legislation (including orders and regulations) made
(before or after the date of signing this Agreement) under that enactment, as
amended, consolidated or re-enacted as described at (i) or (ii) above; and

 

1.2.9 general words shall not be given a restrictive interpretation by reason of
their being preceded or followed by words indicating a particular class of acts,
matters or things and references to “including” shall be deemed to mean
“including, without limitation”, unless the context expressly requires.

 

2 Priority of Terms

 

2.1 In the event of a conflict or ambiguity between any part of this Agreement,
the following order of precedence shall apply:

 

2.1.1 Schedule 1 (Commercial Terms);

 

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2.1.2 Schedule 2 (Fuel Specification);

 

2.1.3 Schedule 3 (Terms and Conditions); and

 

2.1.4 all other Schedules.

 

3 Seller Key Milestones

 

3.1 The Seller shall progress with the development, construction, completion and
commissioning of the Wawa Plant and associated infrastructure at the Loading
Port in an efficient and timely manner in accordance with the Seller Plant
Development Schedule and the Seller shall keep the Buyer reasonably informed (on
at least a Quarterly basis) and provide such evidence as the Buyer may
reasonably request as to the progress toward completion of the Wawa Plant and
associated infrastructure at the Loading Port.

 

3.2 The Seller shall notify the Buyer if it determines or becomes aware that it
will not achieve any Seller Key Milestones by the date specified in the Seller
Plant Development Schedule.

 

3.3 If, the Seller fails to achieve any Seller Key Milestone, or notifies the
Buyer pursuant to clause 3.2 that it will not achieve any Seller Key Milestone
by the date specified in the Seller Plant Development Schedule, it shall produce
within twenty (20) Business Days a revised Seller Plant Development Schedule and
supporting evidence to demonstrate that the Seller is reasonably likely to be
able to:

 

  (a)

produce Biomass from the Seller Plants in sufficient quantities so that the
first (1st) day of the first fourteen (14) day Laycan is capable of commencing
on the Delivery Year 1 Start Date; and

 

  (b) supply the Annual Quantity for Delivery Year 1 in accordance with the
terms of this Agreement.

 

3.4 Once the Buyer has received the revised Seller Plant Development Schedule in
accordance with clause 3.3, the Parties will try to agree within fifteen
(15) Business Days that the conditions in 3.3(a) and 3.3(b)above are met by the
revised Seller Plant Development Schedule to the Buyer’s reasonable
satisfaction. If the Parties do not agree within the fifteen (15) Business Day
period, the Seller shall provide evidence satisfactory to the Buyer within a
further twenty (20) Business Days which demonstrates that it:

 

  (a)

has sourced alternative replacement Biomass such that the first (1st) day of the
first fourteen (14) day Laycan is capable of commencing on the Delivery Year 1
Start Date; and

 

  (b) is able to supply the Annual Quantity for Delivery Year 1 in accordance
with the terms of this Agreement.

 

3.5 If the Seller fails to provide the evidence required under clause 3.4, this
shall be a deemed Event of Default for the purposes of clause 20.2.4, the Buyer
shall be entitled to terminate this Agreement at any time after such failure (or
after the determination of such failure pursuant to clause 22) upon ten
(10) Business Days’ written notice to the Seller, and a Termination Payment
calculated in accordance with clause 21 shall become payable by the Seller.

 

3.6 In the event of a dispute under this clause 3, either Party may refer the
matter to an Expert in accordance with clause 22.

 

4 Purchase and Sale of Biomass

 

4.1 Sale and purchase of Biomass following the Delivery Year 1 Start Date

 

4.1.1 With effect from the Delivery Year 1 Start Date, the Seller shall sell and
deliver and the Buyer shall purchase and accept delivery from the Seller of
Biomass on the terms set out in this Agreement.

 

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4.1.2 The Delivery Year in which a Shipment is deemed delivered shall be
determined by the Bill of Lading date, and the volume of Biomass deemed
delivered in a Delivery Year shall be determined by aggregating all Final Weight
Certificates for Shipments delivered in that Delivery Year. In the event that a
nomination by the Seller under clause 15.1.2 or the Buyer under clause 15.1.3
results in the Bill of Lading date for a Shipment moving into a subsequent
Delivery Year (or, in respect of Delivery Year 2, a subsequent Quarter), the
Shipment shall nevertheless be deemed to have been delivered in the previous
Delivery Year (or Quarter, if relevant).

 

4.1.3 Subject to the terms of this Agreement, the Biomass shall be delivered in
bulk on FOB terms at the Loading Port.

 

4.2 Start-Up Volume

 

4.2.1 Without prejudice to clause 4.1, both Parties acknowledge that prior to
the Delivery Year 1 Start Date the Seller may produce a quantity of Biomass
(“Start-Up Volume”).

 

4.2.2 The Seller shall notify the Buyer before marketing it to any third party,
whether it has any Start-Up Volume available for purchase and shall offer the
Buyer right of first refusal to purchase such Start-Up Volume at a specific
price.

 

4.2.3 The Buyer shall, within ten (10) Business Days of receiving the notice in
clause 4.2.2, give notice to the Seller either accepting or declining such offer
to purchase any or all of the Start-Up Volume subject to the terms of this
Agreement.

 

4.2.4 For the avoidance of doubt, the Seller shall be under no obligation to
produce and the Buyer shall be under no obligation to buy any Start-Up Volume.

 

4.3 Not used

 

4.4 Not used

 

4.5 Feedstock Supply and Costs

 

4.5.1 The Seller shall ensure that at all times from the Delivery Year 1 Start
Date it has received and kept in good standing:

 

  (a) an Ontario Ministry of Natural Resources Accepted Business Plan, through
which the Ontario Ministry of Natural Resources provides firm support for the
available wood supply as detailed in Table 1 of the letter dated 2 April 2013
from David Orazietti, Minister of Natural Resources, Ontario to Sean Ebnet,
Senior Vice-President, Rentech Inc.;

 

  (b) a Forest Resource Processing Licence and Ontario Ministry Recognised
Operating Level (MROL) of [*]/year; and

 

  (c) all necessary agreements and arrangements to fulfil the required fibre
consumption of the Seller Plants (including shareholder status on some
sustainable forest licences (“SFLs”), overlapping licences on some SFLs and long
term agreements with the new Local Forest Management Corporation),

that the Seller will require for a period of ten (10) years to meet its
obligations under this Agreement.

 

4.5.2 The Seller shall ensure that an independent third party auditor with no
conflict of interest who is reasonably acceptable to the Buyer (“Seller’s
Auditor”) is appointed by it from time to time throughout the Term. Such
Seller’s Auditor shall be appointed to audit the [*] costs that may be incurred
by the Seller within any Quarter (the “[*] Costs”). The Quarterly [*] Costs as
determined by the Seller’s Auditor shall be final and binding on the Parties for
the purposes of the [*] cost adjustment set out in section 9, unless either
Party refers the matter to arbitration pursuant to clause 35 in which case the
[*] Costs determined by the Seller’s Auditor shall bind the Parties until such
time as the matter is determined pursuant to such arbitration.

 

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4.5.3 The Seller shall, on the reasonable request of the Buyer, give the Buyer
access to the management system that records the [*] Costs for the Seller
Plants.

 

4.6 Compliance with Law

 

4.6.1 The Buyer and Seller shall each comply with all applicable Laws. If a
Party cannot or does not rectify any material breach of this clause 4.6 (or,
where such breach is not reasonably capable of remedy within such period, does
not propose a plan to rectify the breach within a period satisfactory to the
other Party) within twenty (20) Business Days of the earlier of (i) the affected
Party becoming aware of the breach, or (ii) notice from the non-affected Party
to the other Party identifying the alleged breach, this shall be a deemed Event
of Default for the purposes of clause 20.2.4.

 

4.7 Reasonable and Prudent Operator

 

4.7.1 The Seller and the Buyer shall at all times act as Reasonable and Prudent
Operators in relation to this Agreement.

 

5 Delivery Schedule

 

5.1 Delivery Schedule for Start-Up Volume

 

5.1.1 The Seller shall propose a Delivery Schedule in respect of the Start-Up
Volume in its notice served under clause 4.2.2 and the Buyer will indicate its
acceptance of this proposed Delivery Schedule, or propose an alternative
Delivery Schedule, in its notice served under clause 4.2.3.

 

5.1.2 If the Parties fail to agree the Delivery Schedule in accordance with
clause 5.1.1 within a reasonable time period the Seller shall not be obliged to
sell and deliver the Start-Up Volume to the Buyer pursuant to this Agreement.

 

5.2 Delivery Scheduling following the Delivery Year 1 Start Date

 

5.2.1 Deliveries of Biomass following the Delivery Year 1 Start Date shall be
made in accordance with the Delivery Schedules agreed or determined pursuant to
section 13 and this clause 5.

 

5.2.2 The Parties shall agree at least three (3) months and no more than six
(6) months prior to the end of each Delivery Year the Delivery Schedule for the
following Delivery Year (other than in respect of Delivery Year 1, to which
section 13 shall apply).

 

5.2.3 If the Parties fail to agree the Delivery Schedule in accordance with
clause 5.2.2 or section 13, the matter shall be referred to the Expert for
determination. When determining a suitable Delivery Schedule, the Expert shall
take into consideration the requirement for deliveries to be evenly phased, the
Seller’s storage and delivery arrangements and the Buyer’s offtake, freight,
transport, port throughput and plant operation arrangements (including planned
maintenance).

 

5.2.4 Either Party may request the other’s consent to alter the Loading Port to
an alternative port (such consent not to be unreasonably withheld or delayed).
If a Party accepts the alteration to the Loading Port the nominated loading port
shall be deemed the Loading Port for the purposes of this Agreement and the
Parties shall use Reasonable Endeavours to agree any amendments to this
Agreement, including an increase or decrease in the payments by the Buyer to the
Seller, as may be required by either Party to reflect the adjustment of costs
directly attributable to delivery to that new Loading Port (including, in
respect of any request by the Buyer to alter the Loading Port, on-going charges
for which the Seller is liable under its arrangement with the original Loading
Port).

 

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5.3 Operation of an Ice Clause

If the voyage of any Vessel is delayed or cancelled by the operation of an Ice
Clause, the Buyer shall notify the Seller as soon as reasonably practicable upon
becoming aware of such circumstance and shall provide the Seller with
documentary evidence of the operation of the relevant Ice Clause. Provided the
Buyer has complied with these requirements, its obligations in respect of taking
delivery of the affected Shipment shall be temporarily suspended from the date
of issue of such notice. The Parties shall thereafter use commercially
reasonable efforts to agree within five (5) Business Days amendments to the
applicable Delivery Schedule so as to re-schedule the affected delivery to take
place as soon as possible, but in any event within thirty (30) calendar days. If
the Parties are unable to reach agreement within five (5) Business Days of the
Seller’s receipt of the Buyer’s notice then either Party may refer the matter to
the Expert for determination.

 

6 Failure to Deliver or Take Delivery

 

6.1 Failure to Deliver

 

6.1.1 The Seller shall notify the Buyer immediately if it knows that it is, or
reasonably expects that it will be, unable to deliver (in whole or in part) a
Shipment in accordance with the Delivery Schedule.

 

6.1.2 The Seller shall ensure that where it is unable to meet the entirety of
its delivery commitments to the Buyer under this Agreement (whether as a result
of Force Majeure or otherwise), then (without prejudice to its delivery failure
obligations set out below) it will reserve for the benefit of the Buyer a
percentage of the total supplies of biomass from the Seller Plant(s) being no
less than the percentage which the Annual Quantity represents of the total
production of biomass from the Seller Plant(s) immediately prior to such
inability to deliver occurring, and, where such supplies are insufficient to
meet the delivery requirements of the Buyer under this Agreement the provisions
detailed at 6.1.3 to 6.1.7 shall apply.

 

6.1.3 If the Seller fails to deliver (in whole or in part) a Shipment in
accordance with the Delivery Schedule (“Seller’s Shortfall Quantity”), the
Seller shall be liable to pay to the Buyer in respect of such Shipment but
without double counting, in accordance with clause 6.1.5:

 

  (a) an amount for each Tonne of Seller’s Shortfall Quantity equal to the
positive difference, if any, obtained by subtracting the Price from the
Replacement Price; and

 

  (b) the actual Buyer’s Transport Charges (if any) reasonably and properly
incurred by the Buyer as a result of the Seller’s failure to deliver the
Seller’s Shortfall Quantity.

 

6.1.4 The relevant Annual Quantity shall be reduced by a volume equal to the
Seller’s Shortfall Quantity.

 

6.1.5 The Buyer shall issue to the Seller an invoice for payment pursuant to
clause 6.1.3 such invoice to be supported by documentary evidence reasonably
required by the Seller. Payment shall be made by the Seller within ten
(10) Business Days of receipt of the Buyer’s invoice.

 

6.1.6 Any dispute concerning the amount of the Replacement Price or any costs
incurred by the Buyer in accordance with this clause 6.1, that cannot be
resolved by the Parties within ten (10) Business Days may be referred by either
Party to an Expert for determination in accordance with clause 22.

 

6.1.7 The provisions of clause 6.1.3 shall not apply to the extent that the
failure by the Seller to make delivery of Biomass is a result of either:

 

  (a) a Force Majeure event, provided that the Seller has complied with its
obligations set out in clause 30; or

 

  (b) a failure by the Buyer to perform its obligations under this Agreement.

 

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6.2 Failure to Take Delivery

 

6.2.1 The Buyer shall notify the Seller immediately if it knows that it is, or
reasonably expects that it will be, unable to take delivery (in whole or in
part) of a Shipment in accordance with the Delivery Schedule.

 

6.2.2 If the Buyer fails to take delivery of all or part of a Shipment in
accordance with the Delivery Schedule (“Buyer’s Shortfall Quantity”), the Buyer
shall be liable to pay to the Seller in respect of such Shipment but without
double counting, in accordance with clause 6.2.5;

 

  (a) an amount for each Tonne of the Buyer’s Shortfall Quantity equal to the
positive difference, if any, obtained by subtracting the Replacement Price from
the Price; and

 

  (b) the actual Seller’s Charges (if any) reasonably and properly incurred by
the Seller as a result of the Buyer’s failure to accept the Buyer’s Shortfall
Quantity.

 

6.2.3 The relevant Annual Quantity shall be reduced by a volume equal to the
Buyer’s Shortfall Quantity.

 

6.2.4 The Seller shall issue an invoice to the Buyer for payment pursuant to
clause 6.2.2, such invoice to be supported by documentary evidence reasonably
required by the Buyer. Payment shall be made by the Buyer within ten
(10) Business Days of receipt of the Seller’s invoice.

 

6.2.5 Any dispute concerning the amount of the Replacement Price or any costs
incurred by the Seller in accordance with this clause 6.2 that cannot be
resolved by the Parties within ten (10) Business Days may be referred by either
Party to an Expert for determination in accordance with clause 22.

 

6.2.6 The provisions of clause 6.2.2 shall not apply to the extent that the
failure by the Buyer to take delivery of Biomass is a result of:

 

  (a) a Force Majeure event, provided that the Buyer has complied with its
obligations set out in clause 30; or

 

  (b) a failure by the Seller to perform its obligations under this Agreement.

 

6.3 Limitations of Failures to Deliver or Take Delivery

Without prejudice to clause 21.2 neither Party shall have a right to receive
payment for any Buyer’s Shortfall Quantity or Seller’s Shortfall Quantity, as
applicable, in respect of any unfulfilled Shipments under the Delivery Schedule
due to occur after the date of termination of this Agreement for any reason.

 

7 Risk, Title and Liens

 

7.1 The Seller represents and warrants that at the point of delivery it shall
have full title to all Biomass to be sold pursuant to this Agreement, free of
all liens, charges, security interests and encumbrances whatsoever, and that the
Seller transfers all Biomass with full title guarantee. The Seller shall
indemnify the Buyer in respect of all liabilities, losses, damages, costs,
claims, expenses (including legal expenses), demands or proceedings incurred by
the Buyer resulting from or attributable to any liens, charges, security
interests or encumbrances over the Biomass sold to the Buyer pursuant to this
Agreement. The Seller shall pay, on or before the expiry of ten (10) Business
Days following the Buyer’s written request for payment, any reasonably
documented amounts due pursuant to the foregoing indemnity.

 

7.2 Risk and title to the Biomass shall pass to the Buyer as the Biomass is
deposited in the Vessel’s hold.

 

7.3 The Seller hereby undertakes that where title to any Biomass supplied under
this Agreement (“Purchased Biomass”) has passed to the Buyer:

 

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7.3.1 it will not impose or seek to impose and unconditionally, irrevocably and
absolutely waives any right to impose a lien whether general or specific; or
grant, allow to subsist or permit, any pledge, charge (by way of security or
otherwise) or encumbrance, on or over any Purchased Biomass, in respect of any
claims or for any outstanding sums (whether actual or contingent) which it
believes are or will become due to it under this Agreement or any other
agreement between the Parties; and

 

7.3.2 it will procure that any third parties which from time to time may have
possession, custody or control of the Purchased Biomass prior to the Biomass
being placed in the Vessel at the Loading Port will not impose or seek to impose
a lien whether general or specific; or grant, allow to subsist or permit, any
pledge, charge (by way of security or otherwise) or encumbrance, on or over any
Purchased Biomass, in respect of any claims or for any outstanding sums (whether
actual or contingent), howsoever arising.

 

8 Insurance

 

8.1 The Seller undertakes throughout the Term to maintain in force at its own
cost such policies of insurance as are required under applicable Law and such
other policies of insurance over its operations and assets relevant to this
Agreement, acting as a Reasonable and Prudent Operator. The Seller shall upon
the reasonable written request of the Buyer from time to time provide the Buyer
with copies of the Seller’s insurance policies covering the Seller’s Plant(s)
and any insurance policies applicable to its activities at the Loading Port for
review.

 

9 Price and Payment

 

9.1 The Price of the Biomass shall be as specified in the Commercial Terms and
all payments hereunder shall be made by wire transfer of the Buyer to the bank
account designated by the Seller in section 19 (“Seller’s Nominated Account”).

 

9.2 Interest shall accrue on any amounts payable by one Party to the other under
this Agreement that are not paid when due at a rate of 3% per annum above LIBOR
in each case from the date such amount was payable in accordance with this
Agreement until the date payment is received by the Party entitled thereto.

 

9.3 If a Party disputes any sum shown in any invoice as being payable by that
Party, it shall make payment of any undisputed amount on or before the date such
payment is due and shall give notice as soon as reasonably practicable (and in
any event by the date such payment is due) to the other Party of the amount in
dispute and the reasons for any failure to pay (except that, in the case of a
manifest error in computation, the Party receiving the invoice shall pay the
correct result as agreed by the Parties after disregarding such error). Any sum
that is the subject of a bona fide dispute shall be paid no more than five
(5) Business Days after the date on which the dispute is resolved (either by
mutual agreement or pursuant to clause 35). If any disputed sum is determined to
have been due under the original invoice, interest on that sum shall be payable
pursuant to clause 9.2 from the date that payment was due in relation to the
original invoice to the date payment is actually made.

 

9.4 Where the Seller wants to change the Seller’s Nominated Account, it shall
give notice in writing to the Buyer giving the new account details, including
the account holder, and (if applicable) their relationship to the Seller. The
Buyer shall promptly consider the request and shall not unreasonably withhold or
delay its processing of the change; provided that it shall be reasonable for the
Buyer to withhold or delay where:

 

9.4.1 the request is not given in sufficient time for the Buyer to consider and
process the changes in time for the next payment date; or

 

9.4.2 the proposed account or account holder does not satisfy the Buyer’s risk
and compliance policies; in which case the Buyer will make payment to the
original Seller’s Nominated Account.

 

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9.5 The Seller understands and agrees that it is the Buyer’s policy not to
effect third party payments and, accordingly, the Buyer shall only be required
to make payment to an account of which the Seller is the beneficial owner.

 

9.6 Interim Commercial Invoice

 

9.6.1 Upon receipt of the full set of clean on board Bills of Lading for a
Shipment, the Seller shall issue a signed commercial invoice (the “Interim
Commercial Invoice”) for the amount payable for the Shipment showing the basis
on which the amount payable for the Shipment has been calculated. The amount of
the Interim Commercial Invoice shall be calculated as follows:

 

ICI = Price x (Loading Port CV NAR/Benchmark CV NAR) x Shipment Tonnage Where:
   ICI    means the amount of the Interim Commercial Invoice; Price    means the
applicable Price of the Biomass per Tonne as specified in the Commercial Terms;
Loading Port CV NAR    means the CV NAR of the Shipment determined by the
Seller’s Analysis Certificate; Benchmark CV NAR    means the value specified in
the Commercial Terms; and Shipment Tonnage    means the quantity of Biomass
delivered within the relevant Shipment as specified in the Loading Port Weight
Certificate.

 

9.6.2 Subject to the provisions of clause 9.6.1, payment for each Shipment will
be made against presentation of the following documents in accordance with
clause 9.6.3:

 

  (a) original Seller’s signed Interim Commercial Invoice;

 

  (b) a full set of clean non-negotiable Bills of Lading (three originals and
three copies, freight paid or freight payable as per charterparty, signed by the
master of the Vessel or the agent provided that if signed by the agent, a letter
of authority from the master of the Vessel shall also be provided, and
specifying the charterparty date, place and relevant dispute resolution
clause (to be subject to English law and LMAA arbitration));

 

  (c) copy Loading Port Weight Certificate;

 

  (d) original Seller’s Analysis Certificate, electronic version sent directly
to the Buyer;

 

  (e) Not used;

 

  (f) Not used;

 

  (g) copy certificate of hold inspection issued by the Surveyor;

 

  (h) Not used; and

 

  (i) original certificate of origin.

 

9.6.3 The Seller shall:-

 

  (a) send to the Buyer scanned copies of all the original documents detailed at
clause 9.6.2 (other than the Seller’s Analysis Certificate which shall be
provided directly from the Independent Laboratory in accordance with
clause 12.4.6) to the email address set out on the front page of this Agreement
or to such other email address(es) as may from time to time be specified by the
Buyer; and

 

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  (b) deliver to the Buyer’s agent at the Loading Port the original of the
documents listed at clauses 9.6.2(a), 9.6.2(b) and 9.6.2(i).

 

9.6.4 If the requirements of clause 9.6.3 have been met and unless the Buyer has
rejected the Shipment in accordance with the terms of this Agreement, the Buyer
shall make payment of [*] per cent ([*]%) of the Interim Commercial Invoice
amount to the Seller’s Nominated Account on or before the [*] Business Day
following receipt by the Buyer of all such documents listed in clause 9.6.2.

 

9.6.5 The Buyer’s agent at the Loading Port shall procure and hold the original
document listed at clause 9.6.2(g) and shall courier this, along with the
original documents delivered by the Seller in accordance with clause 9.6.3(b),
directly to the Buyer promptly after they become available.

 

9.6.6 If, due to the Seller’s act or omission, the Bills of Lading are not
expected to be available at the Discharge Port in advance of the arrival of the
Vessel, the Seller shall arrange, at its expense, for discharge of the Biomass
to take place without delay without production of the original Bills of Lading
to the master of the Vessel at the Discharge Port.

 

9.7 Final Commercial Invoice

 

9.7.1 Upon receipt of the Buyer’s Analysis Certificate and Final Weight
Certificate and (if an Umpire Certificate has been issued and is final and
binding on the Parties in accordance with clause 12.4.10) the Umpire
Certificate, the Seller shall issue a further signed commercial invoice (the
“Final Commercial Invoice”), the amount of which shall be calculated as follows:

 

FCI = Price x ((CV NAR / Benchmark CV NAR) x Shipment Tonnage) – ICI Amount Paid
Where:    FCI    means the amount of the Final Commercial Invoice; Price   
means the applicable Price of the Biomass per Tonne as specified in the
Commercial Terms; CV NAR    means the CV NAR of the relevant Shipment as
determined in accordance with clause 12.4.15; Benchmark CV NAR    means the
value specified in the Commercial Terms; Shipment Tonnage    means the quantity
of Biomass delivered within the relevant Shipment as determined in the Final
Weight Certificate; and ICI Amount Paid    means the amount paid by the Buyer in
respect of the Interim Commercial Invoice.

 

9.7.2 Where the amount of the Final Commercial Invoice is positive, such amount
shall be paid by the Buyer to the Seller on or before the [*] Business Day
following receipt by the Buyer of the Final Commercial Invoice.

 

9.7.3 Where the amount of the Final Commercial Invoice is negative, such amount
shall be paid by the Seller to the Buyer on or before the [*] Business Day
following receipt by the Buyer of the Final Commercial Invoice.

 

9.7.4 Where the Interim Commercial Invoice has not been issued as at the date of
the Final Commercial Invoice, the Seller shall not issue such Interim Commercial
Invoice. Where the Interim Commercial Invoice has been issued but no amount has
been paid by the Buyer in respect thereof as at the date of the Final Commercial
Invoice, the Seller shall issue a credit note to the Buyer in respect of the
total value of the Interim Commercial Invoice.

 

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9.8 Taxes

 

9.8.1 VAT

The price of the Biomass shall be the Price which the Buyer shall pay the Seller
excluding any and all taxes levied by any Competent Authority to which the Buyer
is subject.

 

9.8.2 Other Taxes

 

  (a) All Taxes (excluding VAT or any tax charged on or by reference to any
Person’s income, profit or gain) which are due on the severance, harvesting,
collection, production and storage of Biomass prior to the transfer of risk and
title in the Biomass to the Buyer, as well as due on clearing the Biomass for
export, shall be the responsibility of and for the account of the Seller.

 

  (b) All Taxes (excluding VAT or any tax charged on or by reference to any
Person’s income, profit or gain) which are levied after the transfer of risk and
title to the Biomass on or by reference to or payable in respect of the Biomass,
including import and customs duties shall be the responsibility of and for the
account of the Buyer.

 

  (c) In the event that the Buyer’s purchase of the Biomass will qualify for
exemption from any Tax which is levied in the country of loading or on the use,
burning or consumption of Biomass, the Parties shall cooperate in providing any
necessary documentation to each other and/or to the Tax Authorities with respect
to any such exemption.

 

10 Quantity and Weighing

 

10.1 At the Seller’s sole cost prior to the Vessel’s departure from the Loading
Port the weight of that Shipment shall be determined by (at the Seller’s
option):

 

10.1.1 a draught survey performed by a Surveyor appointed by the Seller, subject
to the Buyer’s agreement, for and on behalf of the Seller and the Buyer jointly;
or

 

10.1.2 using a certified, calibrated weighbridge maintained and operated in
accordance with good industry practice and any applicable national standards or
Laws; or

 

10.1.3 using a certified, calibrated belt weighing system maintained and
operated in accordance with good industry practice and any applicable national
standards or Laws,

and in each case the Seller shall, or shall procure, the issue to the Buyer and
the Seller, of a certificate certifying the weight of the Shipment (the “Loading
Port Weight Certificate”).

 

10.2 The Seller shall, upon the Buyer’s request, provide details and copies of
relevant certification relating to the weighing device used, and the
qualifications of the Surveyor.

 

10.3 At the Buyer’s sole cost, following the Vessel’s arrival at the Discharge
Port the weight of that Shipment shall be determined by (at the Buyer’s option):

 

10.3.1 a draught survey performed by a Surveyor appointed by the Buyer, subject
to the Seller’s agreement, for and on behalf of the Seller and the Buyer
jointly; or

 

10.3.2 using a certified, calibrated weighbridge maintained and operated in
accordance with good industry practice and any applicable national standards or
Laws; or

 

10.3.3 using a certified, calibrated belt weighing system maintained and
operated in accordance with good industry practice and any applicable national
standards or Laws, and in each case the Buyer shall, or shall procure, the issue
to the Buyer and Seller a certificate certifying the weight of the Shipment (the
“Discharge Port Weight Certificate”).

 

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10.4 The Buyer shall, upon the Seller’s request, provide details and copies of
relevant certification relating to the weighing device used, and the
qualifications of the Surveyor.

 

10.5 If there is a discrepancy of 0.5% or less between the Loading Port Weight
Certificate and Discharge Port Weight Certificate the Loading Port Weight
Certificate shall be used as the “Final Weight Certificate”.

 

10.6 If there is a discrepancy of more than 0.5% between the Loading Port Weight
Certificate and Discharge Port Weight Certificate:

 

10.6.1 the arithmetical average of the two shall be used as the Final Weight
Certificate (save in the case of fraud or manifest error); and

 

10.6.2 the Parties shall, each acting reasonably, investigate the cause of the
discrepancy.

 

10.7 In the case of fraud or manifest error, the Parties shall, each acting
reasonably, attempt to agree the weight amongst themselves. Where the matter
cannot be resolved by the Parties within ten (10) Business Days of receipt of
the Discharge Port Weight Certificate, the matter may be referred by either
Party (upon notice to the other Party) to an Expert who shall determine in
accordance with clause 22 the weight that shall be final and binding on the
Parties.

 

11 Pre Shipment Testing and Changes in Biomass Production

 

11.1 The Seller has, prior to execution of this Agreement, and in relation to
each Seller Plant provided to the Buyer:

 

  (a) a Material Safety Data Sheet (“MSDS”) in respect of the Biomass confirming
its compliance with the requirements of the Control of Substances Hazardous to
Health Regulations 2002;

 

  (b) a report confirming compliance of the Biomass with the requirements of the
Dangerous Substances and Explosive Atmospheres Regulations 2002 (“DSEAR”) as
referred to in the Fuel Specification, including being classified as no greater
than ST1; and

 

  (c) a representative sample of the Biomass which complies with the Fuel
Specification,

((a)(b) and (c) together being the Quality Data).

 

11.2 On at least a Quarterly basis during the period from the Commencement Date
through until the Delivery Year 1 Start Date, the Seller shall use Reasonable
Endeavours to cooperate with the Buyer regarding the Seller’s sourcing of
feedstock that may be used to supply Biomass under this Agreement (including
providing samples and such other quality related information as the Buyer may
reasonably request). During this period the Buyer may require the Seller to
prepare updated Quality Data where the Buyer reasonably considers the feedstock
or samples are materially different to that tested under the earlier provision
of Quality Data, and the Seller shall do so within fifteen (15) Business Days.

 

11.3 The Seller and Buyer agree that during production of Biomass, the Seller
will implement a regular schedule (the timing of which is to be agreed by the
Parties from time to time) for the taking of samples of Biomass and testing of
such samples to confirm that the Biomass is in compliance with the Fuel
Specification (“Pre-Shipment Samples”). Upon request by the Buyer, the Seller
shall send its test results on Pre-Shipment Samples to the Buyer. The Seller
will notify the Buyer in the event that any Pre-Shipment Samples do not meet the
Fuel Specification or Biomass Handleability Requirements. In the event of any
such issue or a notified non-compliance arising from any Pre-Shipment Sample,
the Parties will try to determine if such Biomass is suitable for the Buyer’s
use (without Buyer waiving any of its rights to rejection or suspension under
clause 14 herein) despite its failure to meet the Fuel Specification or Biomass
Handleability Requirements, by referring the matter to an Initial Meeting in
accordance with clause 35.2 and 35.4. If the matter is not resolved at the
Initial Meeting, it shall be referred to a Manager Meeting in accordance with
clause 35.3 and 35.4.

 

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11.4 Throughout the Term, the Seller shall promptly notify the Buyer before
implementing any:

 

  (a) material changes in the feedstock used to produce the Biomass, and for the
avoidance of doubt any change which would result in the blend used in pellet
production to fall outside of the parameters shown in the table in section 6 of
the Commercial Terms will be considered material; and/or

 

  (b) material changes in the process of producing the Biomass,

and shall as soon as reasonably possible and in any event within fifteen
(15) Business Days provide to the Buyer the Quality Data in respect of the
Biomass that has been subject of a change.

 

11.5 If the Seller cannot or does not update the Quality Data in accordance with
clause 11.2 or 11.4, such that it continues to comply with clause 11.1, the
Buyer shall have the right to reject any Shipments containing Biomass that has
been subject of such a material change that does not have updated Quality Data
on written notice to the Seller, and the Biomass contained within the Shipment
shall be “Reject Biomass” and the rights, obligations and remedies detailed in
clause 14 shall apply.

 

12 Quality

 

12.1 The Seller shall ensure that each Shipment complies with the Fuel
Specification at the time of delivery onto the Vessel.

 

12.2 If the Seller cannot or does not rectify any non-compliance with the Fuel
Specification within five (5) Business Days of the Buyer notifying the Seller of
any non-compliances with the Fuel Specification, then the Biomass contained
within such Shipment shall be deemed to be “Reject Biomass” and clause 14 shall
apply.

 

12.3 The Seller shall indemnify the Buyer in respect of all Direct Losses
incurred by the Buyer resulting from the Shipment not complying with the Fuel
Specification, including any costs incurred by the Buyer to repair any damage
caused to plant and/or equipment at the Loading Port, Discharge Port or to the
Vessel during the loading, discharge and handling of the Shipment. The Seller
shall pay, on or before the expiry of ten (10) Business Days following the
Buyer’s written request for payment, any amounts due pursuant to the foregoing
indemnity.

 

12.4 Sampling and Analysis

Determination of quality of Biomass: Sampling

 

12.4.1 At the Seller’s sole cost the Seller shall (in agreement with the Buyer):

 

  (a) select an Independent Inspector, and procure that such Independent
Inspector shall (wherever reasonably practicable using a mechanical sampler)
take a representative sample of the Shipment at the Loading Port during loading
(the “Sampling”) in accordance with the Sampling Standard. This sample shall be
divided into three (3) equal parts as follows:

 

  (i) the “Shipment Sample”;

 

  (ii) the “Umpire Sample”; and

 

  (iii) the “Buyer’s Sample”; and

 

  (b) within two (2) days of loading being completed (and in any event prior to
the Vessel’s departure from the Loading Port) select an Independent Laboratory
to analyse the Biomass to assess compliance with the Fuel Specification using
the Testing Standards.

 

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12.4.2 Each of the Shipment Sample, the Umpire Sample and the Buyer’s Sample
shall be clearly labelled with their respective names and weights and sealed in
airtight containers, and the Parties shall procure that the Umpire Sample and
the Buyer’s Sample shall be retained by the Independent Laboratory (subject to
this Agreement) until the expiry of a period of ninety (90) days after the
completion of discharge of the Shipment at the Discharge Port.

 

12.4.3 The Seller shall procure that:

 

  (a) the Shipment Sample is sent by the Independent Inspector to the
Independent Laboratory as soon as reasonably practicable following completion of
Sampling;

 

  (b) the Buyer’s Sample is sent by the Independent Inspector to the Buyer’s
nominated laboratory immediately if called for by the Buyer; and

 

  (c) the Umpire Sample is sent by the Independent Inspector to the Umpire
Laboratory immediately if called for by either Party.

 

12.4.4 The Buyer shall have the right to:

 

  (a) be represented at its expense at the Loading Port during loading and
Sampling; and

 

  (b) take its own samples from the Shipment for the purposes of private
analysis only.

Determination of quality of Biomass: Testing

 

12.4.5 The Seller shall procure that the Independent Laboratory performs (as
soon as reasonably practicable after completion of Sampling) an analysis against
each of the parameters within the Fuel Specification (the “Analysed
Characteristics”) in respect of the Shipment Sample in accordance with the Fuel
Specification. All percentages referred to in the Fuel Specification refer to
percentages by weight.

 

12.4.6 The Seller shall procure that the Independent Laboratory shall issue to
each of the Parties a certificate (the “Seller’s Analysis Certificate”)
certifying the results of its analysis of the Analysed Characteristics in
respect of the Shipment Sample within five (5) days of Sampling being complete.
The Seller’s Analysis Certificate shall be final and binding on the Parties for
all purposes save as provided in clauses 12.4.10, 12.4.12, 12.4.15 and in
relation to contamination and handleability as set out in clause 13 or in the
case of fraud or manifest error.

 

12.4.7 Upon receipt of the Seller’s Analysis Certificate either Party may,
within twenty five (25) days and at both Parties’ joint and equal cost, call for
the Umpire Sample to be submitted to the Umpire Laboratory.

 

12.4.8 The electing Party shall procure that, as soon as reasonably practicable,
the Umpire Laboratory shall perform an analysis of the Analysed Characteristics
to assess compliance with the Fuel Specification (the “Umpire Tests”) on the
Umpire Sample.

 

12.4.9 On completion of the Umpire Tests, the electing Party shall procure that,
as soon as reasonably practicable, the Umpire Laboratory shall issue to each of
the Parties a certificate (the “Umpire Certificate”) certifying the results of
the Umpire Tests.

 

12.4.10 If the results of the Umpire Tests set forth in the Umpire Certificate
fall outside the Reproducibility Limits of the original analysis as certified in
the Seller’s Analysis Certificate, the Umpire Certificate shall be final and
binding on the Parties save as provided in clauses 12.4.12, 12.4.15 and in
relation to contamination and handleability as set out in clause 13.

 

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12.4.11 In the event that the Seller’s Analysis Certificate (or where relevant
the Umpire Certificate) confirms that the values for any of the Analysed
Characteristics fall outside the permitted minimum to maximum range for such
value as specified in the Fuel Specification, such a Shipment shall be known as
being “out of specification” and the Biomass within such Shipment shall be
deemed to be “Reject Biomass” and clause 14 shall apply.

 

12.4.12 For the purpose of calculating the amount of the Final Commercial
Invoice in accordance with clause 9.7 or in relation to determining compliance
with the Biomass Handleability Requirements, and notwithstanding clauses 12.4.7
to 12.4.11, the Buyer shall appoint, at its own cost, (in agreement with the
Seller), the Buyer’s Inspector to carry out sampling, and the Buyer’s Laboratory
to carry out analysis of the Shipment at the Discharge Port using the Sampling
Standard and Testing Standards.

 

12.4.13 The Seller shall have the right to:

 

  (a) be represented at its expense at the Discharge Port during unloading and
Sampling; and

 

  (b) take its own samples from the Shipment for the purposes of private
analysis only.

 

12.4.14 The Buyer shall procure that the Buyer’s Laboratory performs an analysis
of the CV NAR in respect of the sample taken under clause 12.4.12 and issues to
each of the Parties a certificate (the “Buyer’s Analysis Certificate”)
certifying the results of such analysis within ten (10) Business Days of the
samples being taken.

 

12.4.15 For the purpose of determining the CV NAR to be used in the calculation
of the Final Commercial Invoice, if there is a discrepancy of 0.5% or less
between the Loading Port CV NAR and Discharge Port CV NAR then the Loading Port
CV NAR shall be used for preparing the Final Commercial Invoice. In the event of
a discrepancy of more than 0.5%, the arithmetical average of the two shall be
used for preparing the Final Commercial Invoice, save for cases of fraud or
manifest error in which case the Parties shall investigate and agree actions to
be taken.

 

13 Contamination and Handleability

 

13.1 The Seller shall ensure that all Shipments shall, when unloaded at the
Discharge Port:

 

13.1.1 be suitable for free grab discharge, and capable of being unloaded,
loaded and transported successfully in bulk (whether by road, rail and/or sea);

 

13.1.2 be substantially free from contamination and extraneous material; and

 

13.1.3 have a fines level of [*] per cent ([*]%) or less (notwithstanding the
Fuel Specification),

together the “Biomass Handleability Requirements”.

 

13.2 In the event that the Buyer, acting as a Reasonable and Prudent Operator,
determines that any Shipment does not meet the Biomass Handleability
Requirements then, subject to clause 13.3 and 13.5, the Buyer shall, at the
Seller’s cost, use its Reasonable Endeavours to make good or remediate the
Biomass contained in such Shipment (as the case may be) in order that it shall
comply with the Biomass Handleability Requirements.

 

13.3 In the event that the Buyer, despite using its Reasonable Endeavours,
determines that it is not possible or economically viable to make good or
remediate the Biomass, then the Biomass contained within such Shipment shall be
deemed to be “Reject Biomass” and clause 14 shall apply.

 

13.4 The Seller shall not be responsible for or liable under this clause 13
where Biomass does not meet the Biomass Handleability Requirements at the
Discharge Port due to the action or inaction of the Vessel’s master or other
third parties having control over the Vessel’s cargo or the condition of the
Vessel, including contamination of any kind of the Vessel after inspection at
the Loading Port and moisture or water contamination due to failure of Vessel
equipment or operator error.

 

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13.5 The Seller shall indemnify the Buyer in respect of all Direct Losses
incurred by the Buyer resulting from the Shipment not complying with the Biomass
Handleability Requirements, including, but not limited to, any costs incurred by
the Buyer in accordance with clause 13.2 and any costs incurred by the Buyer to
repair any damage caused to plant and/or equipment at the Loading Port,
Discharge Port or to the Vessel during the loading, transport, discharge and
handling of the Shipment. The Seller shall pay, on or before the expiry of ten
(10) Business Days following the Buyer’s written request for payment, any
amounts due pursuant to the foregoing indemnity.

 

14 Rejection and Suspension

 

14.1 The Buyer may reject any Shipment if it contains Reject Biomass.

 

14.2 If the Buyer is permitted to reject any Shipment pursuant to clause 14.1 it
shall deliver a Rejection Notice to the Seller to that effect no later than five
(5) Business Days after the Buyer becomes aware of the grounds giving rise to
the entitlement to reject the relevant Biomass under this Agreement (such
grounds not to include the results of any Pre-Shipment Samples described in
clause 11.3) and shall set these grounds out in the Rejection Notice. Unless
otherwise agreed the Rejection Notice shall take effect immediately upon
delivery to the Seller.

 

14.3 Upon a Rejection Notice becoming effective then (without prejudice to the
Buyer’s right to reject a Shipment) the Buyer shall enter into good faith
negotiations with the Seller in respect of the same, including regarding on what
terms (if any) the Buyer is prepared to retrospectively withdraw the Rejection
Notice and acting as a Reasonable and Prudent Operator make a concession in
respect of the Reject Biomass (including, if applicable, an appropriate
reduction in the price of the Reject Biomass). The Buyer shall not be obliged to
agree to any concession and any concession granted by the Buyer shall only apply
to the Reject Biomass and shall not be construed as an amendment to the Fuel
Specification or Biomass Handleability Requirements or a waiver by the Buyer of
any of its rights under this Agreement in respect of any other supply of Biomass
that does not meet the Fuel Specification or Biomass Handleability Requirements.
References in this Agreement to “Fuel Specification” or “Biomass Handleability
Requirements” in respect of any Reject Biomass that has been accepted by the
Buyer under this clause 14.3 shall be deemed to be a reference to the actual
specification of the Reject Biomass so accepted.

 

14.4 Where the Rejection Notice has become effective, and where the Buyer has
not withdrawn the Rejection Notice in accordance with clause 14.3:

 

14.4.1 risk and/or title to all Reject Biomass, if already passed to Buyer,
shall revert to the Seller irrespective of the location of the Reject Biomass;

 

14.4.2 where necessary removal and/or disposal of Reject Biomass, and any
reasonably and properly incurred associated shipping or transportation costs
shall be for the Seller’s account, save where the Seller notifies the Buyer that
it will collect the Reject Biomass, in which case the Seller shall do so within
fifteen (15) days of the effective date of the Rejection Notice;

 

14.4.3 no invoice shall be raised by the Seller for such Reject Biomass or any
invoice raised prior to such rejection shall be cancelled and to the extent any
payment has already been paid, such payment shall be refunded;

 

14.4.4 the Seller shall reimburse the Buyer for any throughput, unloading,
handling, storage, removal, disposal, shipping or transportation costs for the
Reject Biomass, until the Biomass is removed or disposed of;

 

14.4.5 the Buyer may in its entire discretion notify the Seller that:

 

  (a) clause 6.1 shall apply save that references to Seller’s Shortfall Quantity
shall be deemed to refer to the Reject Biomass; or

 

  (b) it requires the rejected Shipment to be made up, in which case the Seller
shall within a reasonable time period agreed upon by the Parties deliver a
volume of Biomass equivalent to the Reject Biomass to the Loading Port (or such
other point of delivery as may be agreed).

 

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14.5 Where the Buyer is entitled to issue a Rejection Notice, the Buyer may
suspend any further delivery of the Biomass by serving a Suspension Notice on
the Seller to that effect no later than five (5) Business Days after the Buyer
becomes aware of the grounds giving rise to the entitlement to reject the
relevant Biomass under this Agreement. The Suspension Notice shall take effect
immediately upon delivery to the Seller and continue until such time as the
Seller has provided the Buyer (acting reasonably) with satisfactory evidence of
its capacity to resume deliveries of Biomass that meet the requirements of this
Agreement at which time such suspension of delivery will end and the obligations
of the Parties under Section 12 will resume. If the Seller is not able to
provide such evidence and resume deliveries within [*] months of the Suspension
Notice being served this shall be a deemed Event of Default for the purposes of
clause 20.2.4. For the avoidance of doubt, in the event the Buyer issues a
Suspension Notice then the Seller is entitled to sell the volume of Biomass that
is not delivered due to the suspension to any third party.

 

14.6 Notwithstanding anything to the contrary in this Agreement, if the Buyer
has issued a Suspension Notice, the Buyer may in its entire discretion notify
the Seller that:

 

14.6.1 clause 6.1 shall apply save that references to Seller’s Shortfall
Quantity shall be deemed to refer to the tonnage that was due to be delivered
but for the suspension and the Annual Quantity will be reduced accordingly; or

 

14.6.2 it requires the tonnage that was due to be delivered but for the
suspension to be delivered once the performance of the Parties’ obligations has
resumed, in which case the Seller shall deliver a volume of Biomass equivalent
to that not delivered due to the suspension within a reasonable time period
agreed upon by the Parties;

and the Seller is required to perform any other obligations not performed during
the suspension.

 

14.7 Without prejudice to any other provisions of this Agreement, if the Buyer
issues a valid Suspension Notice on more than [*] occasions during the Term, the
Seller shall be deemed to have committed an unremedied Event of Default for the
purposes of clause 20.2.4.

 

14.8 Any dispute between the Parties in relation to Buyer’s rejection or
suspension of a Shipment that cannot be resolved by the Parties within ten
(10) Business Days may be referred by either Party to an Expert for
determination in accordance with clause 22.

 

15 Shipping conditions

 

15.1 Nominations

 

15.1.1 Not less than six (6) months prior to the anticipated arrival of each
Vessel at the Loading Port, the Seller shall notify the Buyer of:

 

  (a) any changes to the Port Requirements, such changes to be subject to the
agreement of the Buyer, such agreement not to be unreasonably withheld; and

 

  (b) any changes to the Loading Port restrictions and maximum dimensions of
vessels permitted to load Biomass at the Loading Port, including maximum length,
beam, draught and air draught limits.

 

15.1.2 Not less than thirty (30) days prior to the start of the original Laycan
specified in the Delivery Schedule for the Biomass to be loaded at the Loading
Port the Seller shall confirm to the Buyer [*] when the Biomass will be
available at the Loading Port in order to allow the Buyer to fix an appropriate
Vessel to lift the Biomass. [*].

 

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15.1.3 Not less than [*] days prior to the start of the Laycan [*] the Buyer
shall notify the Seller of the following details in writing and shall confirm a
[*] day arrival Laycan, to start within the Laycan [*]:

 

  (a) the name (or designation number) of the Vessel (such Vessel to meet the
Vessel Requirements) that the Buyer nominates to use for a Shipment and the age,
flag, class, dimensional characteristics including deadweight tonnage, beam,
length overall, number and size of cargo holds and hatches, if part cargo,
spaces available for loading Biomass, anticipated cargo lift +/- 10% and draught
of such Vessel provided that the maximum dimensions of the Vessel shall not
exceed the maximum vessel dimensions set out in the Port Requirements;

 

  (b) the estimated time and date of arrival of the Vessel at the Loading Port;
and

 

  (c) the Demurrage and Despatch rates of the Vessel.

 

15.1.4 The Buyer may substitute the Vessel notified under clause 15.1.3 with
another Vessel provided:

 

  (a) it notifies the Seller in writing not less than three (3) days prior to
the arrival of the Vessel at the Loading Port of the details set out in
clause 15.1.3 in relation to the substitute Vessel; and

 

  (b) the estimated time and date of arrival of the substitute Vessel at the
Loading Port falls within the Laycan notified under clause 15.1.3 and is no
earlier than the estimated time and date of arrival of the original Vessel; and

 

  (c) the Vessel complies with the Vessel Requirements.

 

15.1.5 The Buyer shall notify the Seller of the estimated time and date of
arrival of the Vessel at the Loading Port not later than at the following
intervals prior to the expected time of arrival of the Vessel:

 

  (a) seventy-two (72) hours;

 

  (b) forty eight (48) hours; and

 

  (c) twenty four (24) hours.

 

15.1.6 The Buyer undertakes that beginning on the Delivery Year 1 Start Date
until the expiration of the Term to ensure that the Vessel maintains insurance
as is required under applicable Law and pursuant to the Port Requirements. The
Buyer shall, upon the reasonable written request of the Seller from time to
time, provide the Seller with copies of the Buyer’s insurance policies covering
the Vessels for review.

 

15.2 Loading

 

15.2.1 All costs and risk incurred in connection with loading a Shipment at the
Loading Port shall be for the account of the Seller, including but not limited
to any taxes or dues imposed on the Biomass. The Buyer shall bear all costs
customarily incurred by the Vessel at the Loading Port, including but not
limited to any taxes or dues imposed on the Vessel.

 

15.2.2 The Seller shall secure at the Loading Port on or before the Vessel’s
arrival:

 

  (a) one safe port, one safe berth, always afloat, always accessible; and

 

  (b) storage facilities as set out in the Commercial Terms.

 

15.2.3 The Seller shall load the Vessel at the Loading Port in compliance with
the IMO Code of Safe Practice and all applicable Laws from time to time issued
and amended by any relevant governmental or other statutory body or authority.

 

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15.2.4 The Seller shall procure that any agent, inspector or cargo surveyor
appointed by the Buyer to act on behalf of the Buyer at the Loading Port shall
be granted such reasonable access to facilities, information and documentation
as they may request, subject to complying with any applicable safety
restrictions and not delaying or hindering loading operations in any way.

 

15.2.5 The Seller shall ensure that all loading and trimming operations are
carried out and completed to the master of the Vessel’s satisfaction in
accordance with spout trimming methods.

 

15.2.6 The Seller shall ensure that any and all claims for property or other
damage, loss or costs incurred by the stevedores or the Loading Port authorities
in connection with loading a Shipment at the Loading Port and caused by the
master or crew of the Vessel shall be brought by the Seller and/or the
stevedores and/or such Loading Port authorities directly against the Vessel
Interests and no claims in this regard shall be brought against the Buyer by any
party. The Seller will ensure that such claims are notified to the master of the
Vessel, if any, in writing within a reasonable time, and at the latest before
departure from the Loading Port. The Buyer agrees to provide reasonable
assistance to ensure an equitable and timely settlement to any such dispute is
reached.

 

15.2.7 All claims for damages to the Vessel occurring during loading or through
improper or negligent stowage of the Biomass shall be settled directly between
the Seller and/or stevedores and/or such Loading Port authorities and Vessel
Interests, without recourse against the Buyer or its agents. The Buyer will
ensure that the master of the Vessel notifies the Loading Port authorities of
damage, if any, in writing within a reasonable time, and at the latest before
departure from the Loading Port. The Buyer agrees to provide reasonable
assistance to ensure an equitable and timely settlement to any such dispute is
reached. In the event that the damage affects the seaworthiness of the Vessel,
laytime and time, if any, on Demurrage, will continue to count

 

15.2.8 All claims or additional costs associated with delays to loading caused
by the condition of the Vessel at arrival at the Loading Port shall be for the
account of the Buyer.

 

15.3 Laytime

 

15.3.1 Upon arrival at the Loading Port, the Buyer shall cause the Notice of
Readiness (“NOR”) to be tendered by the master of the Vessel any time day or
night (Saturdays, Sundays and Holidays included, excluding Super Holidays) at
the berth. With time to count from the next Labour Period, being one of 07:00
am, 14:00 pm or 24:00 pm, or if earlier, from the actual commencement of loading
at the Loading Port, in which case actual time shall be used to count. In the
event that the berth is occupied, the NOR can be tendered at the customary
anchorage whether the Vessel is i) in berth or not, ii) in the port or not iii)
in Free Pratique or not or iv) customs cleared or not, provided the Vessel is
ready in all respects to commence loading. Time will count from the next Labour
Period and shifting from anchorage to berth will not count with Laytime. For the
avoidance of doubt if the Vessel is then found to not be clean after NOR
tendered, following the hold inspection or the Vessel does not clear customs,
free patique or is not otherwise ready in all respects to commence loading, then
time shall not count until such time that the Vessel is ready in all respects to
commence loading.

 

15.3.2 Intentionally Omitted.

 

15.3.3 Laytime and/or Demurrage shall cease on completion of loading of the
Shipment to the master of the Vessel’s satisfaction.

 

15.3.4 Laytime allowed for loading shall be the Shipment weight as determined in
accordance with clause 10.1 divided by the Loading Rate set out in section 16 or
(in the absence of such rate) as specified in the Port Requirements for the
relevant Loading Port.

 

15.3.5 The following shifting time, stoppages and/or interruptions to loading
shall not count as laytime unless the Vessel is already on Demurrage in which
case time will count:

 

  (a) any time lost due to the breakdown, inefficiency, repairs or any other
inability of, or cause attributable to the Vessel, her master, her crew or
owners which affects the berthing and loading of the Vessel;

 

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  (b) any time lost due to the Buyer (or the owner or operator or charterer of
the Vessel) preventing, impeding or prohibiting loading;

 

  (c) any governmental authority or port authority preventing, impeding or
prohibiting loading;

 

  (d) any time lost due to any labour dispute, strike, go slow, work to rule,
lock out, stoppage or restraint of labour involving the master, officers or crew
of the Vessel;

 

  (e) any time lost due to non-compliance with statutory and class requirements
for the Vessel;

 

  (f) for delays in loading the Biomass due to the Vessel not complying with
stevedoring regulations (provided the Buyer has been notified of such regulation
in advance) relevant to the operation of the Loading Port;

 

  (g) in the event of weather conditions which, in the reasonable opinion of
either the Loading Port or the master, make loading unsafe and where the Loading
Port has to cease loading, whether the Vessel is in berth or not or in port or
not;

 

  (h) any time lost if loading is interrupted by the Vessel in order to conduct
business on behalf of the owner (such as taking draught surveys);

 

  (i) during Super Holidays;

 

  (j) any time lost due to Force Majeure;

 

  (k) where the Seller’s hold inspection finds that the hold is not clean, the
time between completion of the Seller’s hold inspection and the hold being made
clean; and

 

  (l) where the NOR has been tendered other than at the berth in accordance with
Schedule 4, any time lost due to the transit of the Vessel from the customary
anchorage to the berth at the Discharge Port.

 

15.3.6 If the Seller fails (in whole or in part) to deliver a Shipment, or
delivers a Shipment that the Independent Inspector, Buyer’s agent or master
reasonably determines is likely to not comply with the Fuel Specification such
that loading has to be stopped, the laytime exceptions at clause 15.3.5 above
will not apply at the Loading Port at any time during the loading of the
Shipment to inhibit laytime running and any consequent liability of the Seller
to pay Demurrage.

 

15.3.7 Where the Vessel is alongside the Loading Port berth and is ready to load
the Shipment the Seller shall be liable for any costs or expenses incurred by
the Buyer as a result of any delays due to:

 

  (a) the unavailability of the Biomass;

 

  (b) the Independent Inspector, Buyer’s agent or master reasonably determining
that the Biomass is likely to not comply with the Fuel Specification or unsafe
to handle such that loading has to be stopped; or

 

  (c) breakdown and/or inefficiency of the Loading Port, including but not
limited to, the operation of the Loading Port, Loading Port cranes, stevedores
or other loading equipment, which delays the loading of the Shipment;

and in such event laytime will continue to run, and Demurrage will accrue,
provided that this clause shall not operate to provide a double recovery for the
Buyer in addition to its rights elsewhere in this Agreement.

 

15.3.8 The Seller shall pay Demurrage to the Buyer for all excess time at the
rate per day pro rata notified in accordance with clause 15.1.3(c), provided
that the Buyer gives notice of its claim in writing to the Seller, with such
relevant supporting documentation as is available, within thirty (30) days after
completion of loading. The Seller shall pay any undisputed Demurrage no later
than five (5) Business Days following the Seller’s receipt of such notice.

 

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15.3.9 The Buyer shall pay Despatch to the Seller for all time saved at the rate
per day notified in accordance with paragraph 15.1.3(c), provided that the
Seller gives notice of its claim in writing to the Buyer, with such relevant
supporting documentation as is available, within sixty (60) days after
completion of loading of a Shipment. The Buyer shall pay any undisputed Despatch
no later than five (5) Business Days following the Buyer’s receipt of such
notice.

 

15.3.10 The Seller shall pay to the Buyer any detention charges validly and
properly incurred by the Buyer under its charterparty in relation to any failure
to load or delay in loading the Vessel (and time shall continue to count until
such time as the Seller has loaded and spout trimmed the Vessel to the master’s
satisfaction and removed all loading equipment such that the Vessel is free to
sail), provided that the Buyer gives notice of its claim in writing to the
Seller, with such relevant supporting documentation as is available, within
thirty (30) Business Days after completion of loading. The Seller shall pay any
undisputed detention no later than five (5) Business Days following the Seller’s
receipt of such notice.

 

16 Sustainability

 

16.1 Seller’s Acknowledgments

 

16.1.1 The Seller acknowledges and agrees that it has read and fully understood
the Sustainability Policy and undertakes throughout the Term of this Agreement
that it shall conduct its production, procurement and/or processing (as
applicable) of Biomass to be sold under this Agreement in compliance with the
Sustainability Requirements.

 

16.2 Amendments to the Sustainability Policy

 

16.2.1 If, after the Agreement Date the Buyer wishes to update the
Sustainability Policy, other than to the extent required by any Law relating to
the sustainability of the supply of Biomass, the Parties shall consult regarding
any changes that may be required to the Seller’s production, procurement and/or
processing of Biomass in order to agree upon such changes and resulting costs.
The Seller shall, where it is agreed that such changes are reasonably required,
alter its production, procurement and/or processing of Biomass as agreed, and
shall, acting as a Reasonable and Prudent Operator, mitigate any costs
associated with this. The Buyer shall pay any reasonable and demonstrable costs
incurred by the Seller in order to comply with the agreed changes. Any dispute
concerning the costs to be incurred by the Seller in accordance with this
clause 16.2.1 may be referred by either Party to an Expert for determination in
accordance with clause 22.

 

16.2.2 If, after the Agreement Date a Change of Law requires a change to the
Sustainability Requirements so that the Buyer can continue to be eligible for
support for electricity generation from biomass at [*] under the Renewables
Obligation Order or become eligible for support under any replacement or new
incentive scheme for the support of electricity generation from renewable energy
sources including biomass:

 

  (a) the Buyer shall promptly notify the Seller of the relevant change to the
Sustainability Requirements;

 

  (b) the Parties shall collaborate to minimize the impact of potential new
legislation;

 

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  (c) the Seller shall use Reasonable Endeavours to alter its production,
procurement and/or processing of Biomass as required by such Change of Law, and
the Buyer and the Seller shall equally share any demonstrated additional costs
incurred by the Seller under this sub-clause (which shall be assessed on a per
Tonne basis by comparing such demonstrated additional costs to the remaining
volume of Biomass to be delivered under this Agreement) up to a combined cap of
five Canadian Dollars (CAD$5) per Tonne (ie two Canadian Dollars and fifty cents
(CAD$2.50) borne by each Party) of Biomass which remains to be delivered under
this Agreement on the date of such Change of Law. Where such additional costs
are in excess of five Canadian Dollars (CAD$5) per Tonne of biomass, either
Party may elect to either:

 

  (i) pay solely itself any additional costs in excess of five Canadian Dollars
(CAD$5) per Tonne in order to ensure continuation of this Agreement and the
contribution of the non-electing Party shall be no greater than two Canadian
Dollars and fifty cents (CAD$2.50) per Tonne; or

 

  (ii) terminate this Agreement at any time thereafter with immediate effect by
written notice to the other Party, at which point the Parties shall have no
further obligations between them save those previously accrued or expressed in
this Agreement to survive termination and no Termination Payment shall be
payable. For the avoidance of doubt, a Party shall not be entitled to terminate
under this clause where the other Party has elected to pay all of the additional
costs of the Seller in excess of five Canadian Dollar (CAD$5) per Tonne under
clause 16.2.2(c)(i); and

 

  (d) for the avoidance of doubt, the costs sharing referred to in this
clause shall be exclusive of and in addition to any adjustments pursuant to
section 9.

 

16.2.3 The Parties agree that any [*] shall have no effect on this Agreement.

 

16.2.4 The Parties acknowledge and agree that, for the avoidance of doubt:

 

  (a) [*]; and

 

  (b) if any such [*] results in increased costs for the Seller, clause 16.2.2
shall apply to such increased costs.

 

16.3 Data Returns

 

16.3.1 The Seller confirms that, prior to the Agreement Date, the Seller has
completed and returned to the Buyer a Sustainability Data Return in respect of
the Biomass.

 

16.3.2 The Seller shall provide written confirmation at the beginning of each
twelve (12) month anniversary of the Agreement Date that the information
provided in accordance with clause 16.3.1 continues to be true, accurate and
complete (“Data Return Confirmation”).

 

16.3.3 The submission by the Seller of information required pursuant to
clauses 16.3.1, 16.3.2 or 16.3.4 shall be deemed to be a representation and
warranty to the Buyer on each occasion that such submission is made, and in
relation to every delivery of Biomass, that the information provided by the
Seller pursuant to clauses 16.3.1, 16.3.2 or 16.3.4 is true, accurate and
complete.

 

16.3.4 The Seller shall notify the Buyer as soon as reasonably possible if any
information provided by it pursuant to clauses 16.3.1 or 16.3.2 will change, or
has changed, together with details of any such change and submission of such
notification shall on each occasion be deemed to be a representation and
warranty to the Buyer that all information in respect of any such change is
true, accurate and complete. As soon as practicable thereafter, the Seller shall
duly complete and return to the Buyer a revised Sustainability Data Return
reflecting those changes.

 

16.4 Sustainability Audit

 

16.4.1 The Seller shall, at the Buyer’s request (on at least fifteen
(15) Business Days written notice to the Seller) provide a report, to be in a
format provided by the Buyer, which will provide greater details about the
Seller’s processes and land-use, to enable the Buyer to review and verify the
Seller’s compliance with the Sustainability Policy, provided that the Buyer
shall not be entitled to request such a report more than once every six
(6) months.

 

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16.4.2 Upon at least fifteen (15) Business Days’ notice in writing to the
Seller, the Buyer shall have the right to audit the information (including the
sources of such information) provided by the Seller under this clause 16. The
Seller shall provide the Buyer or its authorised representative with reasonable
access to the Seller’s records relevant to such information, including it
requested by the Buyer using Reasonable Endeavours to provide the Buyer or its
authorised representative with such access to the records of third parties. The
costs of such audit shall be borne by the Buyer. The Buyer may only exercise its
rights under this clause 16.4.2 once in each year of this contract, or more
frequently if the Buyer identifies a specific concern over sustainability
compliance.

 

16.5 Compliance

 

16.5.1 The Seller shall, as soon as reasonably possible, notify the Buyer if it
determines that it has breached or may breach any of the provisions of this
clause 16. The Buyer may also notify the Seller if it determines there has been
such a breach by the Seller. The Seller shall have thirty (30) days to remedy
any notified breach of this clause 16 or such other period that may be approved
by the Buyer.

 

16.5.2 Following receipt from the Seller or issuance by the Buyer of a notice of
non-compliance in accordance with clause 16.5.1 above in respect of a breach of
clause 16.1, 16.2.1, 16.2.2, 16.3 or 16.4, and provided that such breach is not
remedied within the period specified in clause 16.5.1, the Buyer shall be
entitled within five (5) Business Days of such notice to suspend any further
deliveries of the Biomass by delivery of a Suspension Notice to the Seller. The
Suspension Notice shall take effect immediately upon delivery to the Seller and
continue until such time as the Seller has provided the Buyer with satisfactory
evidence of its capacity to resume deliveries of Biomass that comply with the
provisions of this clause 16. Notwithstanding anything to the contrary in this
Agreement, if the Buyer has issued a Suspension Notice, the Buyer may at its
option request either that (i) the tonnage that was due to be delivered but for
the suspension be delivered once the performance of the Parties’ obligations has
resumed, or (ii) all suspended deliveries be treated as failed deliveries, in
which case the provisions of clause 6.1.3 will apply save that any reference to
Seller’s Shortfall Quantity shall be deemed to refer to the suspended
deliveries. For the avoidance of doubt, the Buyer shall be entitled to reject
any Shipment that has been delivered to the Loading Port where such supply
would, in the reasonable opinion of the Buyer, have been made in breach of the
Seller’s obligations under this clause 16 (“Reject Biomass”). If the Buyer
wishes to reject any Shipment in accordance with this clause, it shall deliver a
Rejection Notice to the Seller no later than five (5) Business Days of receiving
notice from the Seller or issuing notice to the Seller of a breach in accordance
with clause 16.5.1. The provisions of clause 14 shall apply mutatis mutandis to
such rejected Shipments.

 

16.5.3 The Seller shall indemnify the Buyer in respect of all liabilities,
losses, damages, costs, claims, expenses (including legal expenses), demands or
proceedings incurred by the Buyer due to a breach of the Seller’s
representations and warranties under this clause 16, including, but not limited
to, any [*], as a result of the Seller’s breach of representation or warranty.
The Seller shall pay, on or before the expiry of ten (10) Business Days
following the Buyer’s written request for payment, any amounts due pursuant to
the foregoing indemnity.

 

16.5.4 If a notified breach is not remedied within the relevant cure period
specified in clause 16.5.1, such failure shall be deemed an Event of Default for
the purposes of clause 20.2.4.

 

17 Representations and Warranties

 

17.1 Each Party represents and warrants to the other Party (which
representations and warranties are deemed to be repeated by each Party on each
occasion that Biomass is delivered and accepted under this Agreement) that:

 

17.1.1 it has the power (a) to execute this Agreement and any other
documentation to which it is a Party, (b) to deliver this Agreement and any
other documentation relating to this Agreement that it is required by this
Agreement to deliver, and (c) to perform its obligations under this Agreement,
and has taken all necessary action to authorise that execution, delivery and
performance;

 

17.1.2 all Required Authorisations have been or will be obtained by the time
required and, once so obtained, will be maintained in full force and effect and
all conditions of any such Required Authorisations will be complied with;

 

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17.1.3 it is not relying upon any representations of the other Party other than
those expressly set out in this Agreement;

 

17.1.4 it has negotiated, entered into and executed this Agreement as principal
(and not as agent or in any other capacity, fiduciary or otherwise);

 

17.1.5 it has entered into this Agreement with a full understanding of the
material terms and risks of this Agreement and it is capable of assuming those
risks;

 

17.1.6 the other Party is not acting as a fiduciary or an advisor for it;

 

17.1.7 all applicable information that is furnished in writing, if any, by or on
behalf of it to the other Party and is identified for the purpose of this
clause 17 is, as of the date it is furnished to the other Party, true, accurate
and complete in every material respect; and

 

17.1.8 it has, and its employees and sub-contractors have, and will comply with
any anti-terrorism, anti-corruption, anti-bribery or anti-money laundering
legislation in connection with its performance of, or in connection with
services or goods procured for the purposes of this Agreement.

 

17.2 The Seller represents, warrants and covenants to the Buyer that:

 

17.2.1 no Shipment shall originate from any country subject to Economic
Sanctions for so long as such country is the target of Economic Sanctions;

 

17.2.2 all information supplied to the Buyer by the Seller in connection with
the source from which the Biomass is to be delivered, the quality of the Biomass
and the volumes of the Biomass to be delivered is true, accurate and complete in
all material respects;

 

17.2.3 the CSR Policy Statement has been and will be complied with by the
Seller, and the Seller shall use Reasonable Endeavours to procure that all
persons from whom the Seller has directly or indirectly acquired the Biomass
comply with the same;

 

17.2.4 the Compliance Statement has been and will be complied with by the
Seller, and the Seller shall use Reasonable Endeavours to procure that all
persons from whom the Seller has directly or indirectly acquired the Biomass
comply with the same;

 

17.2.5 the HSE Conditions have been and will be complied with by the Seller, and
as far as the Seller is or should be reasonably aware, all persons from whom the
Seller has directly or indirectly acquired the Biomass;

 

17.2.6 the EU Timber Regulations (995/2010) have been and will be complied with
by the Seller, and as far as the Seller is or should be reasonably aware, all
persons from whom the Seller has directly or indirectly acquired the Biomass;

 

17.2.7 the Seller will achieve at its Seller Plants a chain of custody
certification that allows the Seller to pass on any FSC, SFI and CSA forest
management certification that it has to the Buyer; and

 

17.2.8 no Biomass will contain a species that is not an Approved Species.

 

17.3 Save for any warranties expressly provided for in this Agreement, all other
warranties, conditions or other terms implied by statute, common law, trade
usage or otherwise are excluded to the fullest extent permitted by Law.

 

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18 Change of Law

 

18.1 Save as provided for under clause 16.2, if there is, or either Party
becomes aware that there will be, a Change of Law on or after the Agreement Date
which has or would render this Agreement impossible or unlawful to perform, then
upon the written request of either Party, the Parties shall promptly meet to
discuss and, acting in good faith, agree upon any amendments that may be
required to the terms of this Agreement in order to maintain, so far as is
practicable, the overall balance of risks, rights, rewards and obligations
between the Parties that existed prior to such change. The Parties expressly
agree that the purpose of any such amendments is solely to enable the mechanics
of this Agreement to be changed so that they effectively integrate with any such
change. Any new costs, expenses or risks that arise owing to such change and not
of a type provided for in this Agreement are not intended to be allocated from
one Party to the other by virtue of this clause.

 

18.2 If the Parties are unable to reach an agreement on any such necessary
amendments within sixty (60) days of the initial request, then the non-affected
Party may terminate this Agreement upon one (1) month’s written notice to the
other Party and no payment shall be due on termination.

 

18.3 Without prejudice to clauses 18.1 and 18.2, neither Party shall be liable
to the other Party for a failure to perform any obligation under this Agreement
which becomes prohibited or impossible to perform by reason of a Change of Law.

 

19 Confidentiality

 

19.1 The Parties shall treat the terms of this Agreement and all information
provided under or in connection with this Agreement (“Confidential Information”)
as confidential, and shall safeguard the other’s Confidential Information
accordingly and shall not disclose Confidential Information without the prior
written consent of the other Party, save that consent will not be required for
disclosure:

 

  (a) to the extent that the Confidential Information is in or lawfully comes
into the public domain other than by breach of this clause 19;

 

  (b) to the extent that the Confidential Information is independently developed
without access to the other Party’s Confidential Information;

 

  (c) to the extent required by any: applicable Laws; judicial process;
Competent Authority; or rules and regulations governing any exchange, clearing
house, rating agency or issue of securities;

 

  (d) to Affiliates or to directors, employees or Persons professionally engaged
by a Party or its Affiliates;

 

  (e) to any insurance broker, proposed or actual insurer or loss adjuster, in
connection with any insurance taken out or to be taken out by the disclosing
Party or any of its Affiliates; or

 

  (f) to any intended assignee of the rights and interests of a Party under this
Agreement or to a Person intending to acquire an interest in a Party or its
Affiliate or their professional advisers;

provided that, in the cases of sub-clauses (c), (d), (e) and (f) above, the
disclosing Party shall:

 

  (a) if possible provide the other Party with prompt prior written notice of
such disclosure or otherwise with notice immediately after such disclosure,
setting out the disclosing Party’s reasons for disclosing the Confidential
Information;

 

  (b) disclose only that portion of the Confidential Information which is
legally required to be disclosed and take all measures as may be reasonable to
minimise the scope of the Confidential Information to be disclosed; and

 

  (c) ensure the relevant party receiving the Confidential Information is
required by the disclosing Party to treat the Confidential Information as
confidential on terms substantially the same as those set out in this clause 19.

 

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19.2 Neither Party shall issue a press release that includes wording discussing
this Agreement or the relationship between the Parties without obtaining the
approval of the other Party to the wording used, such approval not to be
unreasonably withheld or delayed.

 

20 Termination

 

20.1 If, at any time, an Event of Default has occurred with respect to a Party
(the “Defaulting Party”), the other Party (the “Non-Defaulting Party”) may
terminate this Agreement by written notice to the Defaulting Party on or at any
time after the occurrence of such Event of Default (such date being the “Early
Termination Date”).

 

20.2 “Event of Default” means the occurrence at any time with respect to the
Defaulting Party of any of the following events:

 

20.2.1 any representation or warranty made in this Agreement, or expressly
stated in this Agreement as being deemed to have been made by the Party proves
to have been materially false or misleading at the time it was made or was
deemed to have been made and, in respect of those representations and warranties
where cure periods are provided for, has not been remedied in the relevant cure
period;

 

20.2.2 the Party fails to pay any amount or amounts in aggregate in excess of
the sum of [*] Canadian Dollars (CAD $[*]) when due under this Agreement, and
that failure is not remedied on or before the fifteenth (15th) Business Day
after the Non-Defaulting Party gives the Party notice of that failure;

 

20.2.3 the Party:

 

  (a) fails to perform a material obligation under this Agreement (other than an
obligation referred to at clause 20.2.2) at any time and such failure is not
remedied within fifteen (15) Business Days of the Non-Defaulting Party giving
the Defaulting Party notice of that failure; or

 

  (b) persistently and/or repeatedly fails to perform any obligation under this
Agreement which is not a material obligation, provided that (i) the
non-defaulting Party has notified the defaulting Party of such breaches,
(ii) the matter has been referred to an Initial Meeting in accordance with
clause 35.2 and 35.4, (iii) if the matter was not resolved at the Initial
Meeting, it has been referred to a Manager Meeting in accordance with clause
35.3. and 35.4, and (iv) the matter has not been resolved at the Manager
Meeting;

 

20.2.4 any event that is expressly stated to be an Event of Default for the
purposes of this clause. There shall be no additional cure period for any such
event;

 

20.2.5 the Party:

 

  (a) is dissolved (other than pursuant to a consolidation, amalgamation or
merger);

 

  (b) becomes insolvent or is unable to pay its debts or fails or admits in
writing its inability generally to pay its debts as they become due;

 

  (c) makes a general assignment, arrangement or composition with or for the
benefit of its creditors;

 

  (d) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, that proceeding or petition
(i) results in a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or liquidation or
(ii) is not withdrawn, dismissed, discharged, stayed or restrained in each case
within thirty (30) days of the institution or presentation of that proceeding or
petition;

 

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  (e) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger);

 

  (f) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;

 

  (g) has a secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
that secured party maintains possession, or that process is not withdrawn,
dismissed, discharged, stayed or restrained, in each case within thirty
(30) days of that event;

 

  (h) causes or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in sub-clauses (a) to (g) (inclusive); or

 

  (i) takes any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts referred to in this clause 20.2.5.

 

20.3 From the effective date of a termination notice given in accordance with
clause 20.1 (or any other provision of this Agreement), this Agreement shall
terminate and the Parties shall have no further obligations between them.
Termination under this Agreement shall not affect any rights or obligations
which may have accrued prior to termination, including any rights or obligations
in respect of antecedent breaches. The rights and obligations of each Party
under clauses 8, 16, 17, 19, 20, 21, 22, 31, 35 and 36 shall continue in full
force and effect notwithstanding termination of this Agreement.

 

21 Effects of Termination

 

21.1 The Parties acknowledge that termination of this Agreement is without
prejudice to any pre-existing rights and/or claims that a Party may have under
this Agreement as well as any rights and/or claims which arise subsequently but
which relate to this Agreement and in particular, but without limitation,
termination remains subject inter alia to any mechanisms within this Agreement
which operate to recover losses.

 

21.2 Without prejudice to any other obligations in this Agreement, in the event
that the Non-Defaulting Party elects to terminate this Agreement pursuant to
clause 20.1, the Defaulting Party shall [*] the Non-Defaulting Party an amount
equal to:

 

21.2.1 all liabilities, losses, damages, costs, claims, expenses (including
legal expenses), demands or proceedings incurred by the Non-Defaulting Party in
relation to any agreements to which the Non-Defaulting Party is a party directly
related to the performance of this Agreement (including but not limited to, any
shipping arrangements, any take or pay obligations under port or haulage
agreements and storage costs);

 

21.2.2 an amount for each Tonne of Biomass which remains to be delivered under
this Agreement until the expiry of the Term (the “Remaining Tonnage”) equal to
the positive difference where the Non-Defaulting Party is the Buyer and negative
difference where the Non Defaulting Party is the Seller, if any, obtained by
subtracting the Price for the Remaining Tonnage from the Replacement Price; and

 

21.2.3 the Non-Defaulting Party’s reasonable legal fees and out-of-pocket
expenses incurred with respect to the termination of this Agreement,

and the amount due shall in total, be the “Termination Payment”.

 

21.3 A Party shall not be required to enter into replacement transactions in
order to determine the Termination Payment.

 

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21.4 The Defaulting Party shall pay, on or before the expiry of ten
(10) Business Days following the Non-Defaulting Party’s written request for
payment, the Termination Payment

 

22 Expert Determination

 

22.1 If any matter is referred to an independent expert (the “Expert”) in
accordance with this Agreement, the Expert shall be appointed by agreement
between the Parties. If the Parties fail to agree upon that appointment within
ten (10) Business Days of a Party notifying the other Party of its decision to
refer the matter to an Expert, the President of the Law Society of England and
Wales may appoint the Expert on the application of either Party, provided that
such person is experienced and familiar with the type of international
commercial transactions contemplated under this Agreement or any invoice
disputes that may arise under this Agreement.

 

22.2 The Expert shall act as an expert and not as an arbitrator and shall give
his or her determination in writing.

 

22.3 In respect of matters referred to the Expert pursuant to clauses 3, 5.2,
5.3, 6.1.6, 6.2.5 and 10.7, in the absence of fraud or manifest error, the
determination of the Expert shall be final, conclusive and binding upon the
Parties.

 

22.4 In respect of matters referred to the Expert pursuant to clauses 14.8 or
16.2.1, if either party is dissatisfied with the Expert’s determination it may
refer the matter to arbitration pursuant to clause 35. The determination of the
Expert shall bind the Parties until such time as the matter is determined
pursuant to such arbitration.

 

22.5 The Expert shall determine the procedure to be followed by the Expert for
the purpose of making a determination provided that the Parties shall use their
respective Reasonable Endeavours to ensure that he or she makes his or her
determination within twenty (20) Business Days of being appointed.

 

22.6 Each of the Parties shall bear one half of the costs of the Expert unless
the Expert determines otherwise.

 

22.7 Pending the determination of any dispute in accordance with the terms of
this Agreement, the Parties shall continue to the extent possible to perform
their obligations under this Agreement.

 

23 Not used.

 

24 Novation and Assignment

 

24.1 Neither Party may novate, assign, transfer, subcontract or otherwise
dispose of any rights or obligations under this Agreement to any person without
the prior written consent of the other Party (the “Remaining Party”), such
consent not to be unreasonably withheld or delayed. No purported assignment
without consent shall be effective as against the Remaining Party. It shall be
reasonable for the Remaining Party to withhold its consent to a proposed
novation or assignment where:

 

  (a) the novation or assignment would (i) render any right of the Remaining
Party under this Agreement unenforceable; or (ii) render the performance of any
obligation by either Party under this Agreement illegal; or (iii) cause any tax
representation made by the original Parties to each other to be or become untrue
or incorrect; or

 

  (b) the proposed transferee or assignee (as the case may be) would not satisfy
the compliance and/or credit policies of the Remaining Party in effect as at the
date of the proposed novation or assignment.

 

24.2 Upon termination of this Agreement by reason of default, the non-defaulting
Party may assign all or any part of its interest in any Termination Payment due
and payable to it from the defaulting Party without any requirement to obtain
the consent of the defaulting Party.

 

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24.3 Notwithstanding the foregoing:

 

24.3.1 either Party may upon written notice to the other Party grant security
over, or assign by way of security, any or all of its rights under this
Agreement for the purposes of, or in connection with, the financing (whether in
whole or in part) of any of its business; and

 

24.3.2 the Seller may, subject to obtaining the written consent of the Buyer, in
the period prior to Delivery Year 1 Start Date novate, assign or transfer this
Agreement to a separate entity that is an Affiliate of the Seller Parent,
provided that the Buyer may only withhold its consent if:

 

  (a) the Seller Parent does not guarantee to the Buyer the obligations of the
new entity on the same terms as it has guaranteed the obligations of the Seller
in respect of this Agreement;

 

  (b) the novation, transfer or assignment would (i) render any right of the
Remaining Party under this Agreement unenforceable; or (ii) render the
performance of any obligation by either Party under this Agreement illegal; or
(iii) cause any tax representation made by the original Parties to each other to
be or become untrue or incorrect; or

 

  (c) the proposed transferee or assignee (as the case may be) does not satisfy
the compliance and/or credit policies of the Buyer in effect as at the date of
the proposed novation or assignment.

 

25 No Partnership, Agency or Employment

Nothing in this Agreement shall be deemed to constitute either Party acting as
the agent or partner of the other Party. No Party shall have any authority to
make any commitments on the other Party’s behalf.

 

26 Set Off

Either Party (the “Relevant Party”) may at any time, without notice to the other
Party (the “Other Party”), set off, withhold or deduct any liability of the
Other Party to the Relevant Party against any liability of the Relevant Party to
the Other Party, whether any such liability is present or future, liquidated or
unliquidated, under this Agreement and/or any other agreements entered into
between the Parties, irrespective of the currency of its denomination. If the
liabilities to be set off are expressed in different currencies, the Relevant
Party may, acting in a reasonable manner, convert either liability at a market
rate of exchange for the purpose of set-off. Any exercise by the Relevant Party
of its rights under this clause shall be without prejudice to any other rights
or remedies available to it under this Agreement or otherwise.

 

27 Variation

No amendment or variation of the terms of this Agreement or any documents
entered into or delivered in accordance with its provisions shall be effective
unless made or confirmed in writing and signed by the Buyer and the Seller.

 

28 Waiver

 

28.1 Neither failure to exercise nor any delay in exercising any right or remedy
under this Agreement shall operate as a waiver of it or of any other right or
remedy under it. No single or partial exercise of any such right or remedy shall
prevent any further or other exercise of it or the exercise of any other right
or remedy.

 

28.2 Any waiver given by a Party must be in writing and expressly stated by an
authorised employee of that Party to be a waiver. Such a waiver will only apply
to the specific events to which it is stated to relate and not to any other
events, whether past or future.

 

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29 Cumulative Rights

 

29.1 The rights and remedies provided by this Agreement are cumulative and
(unless otherwise provided in this Agreement) are not exclusive of any rights or
remedies provided by Law or in this Agreement.

 

30 Force Majeure

 

30.1 Subject to clause 30.2 and other than in respect of the obligation to make
any payment as required by this Agreement and any obligations which have accrued
prior to the Force Majeure, a Party shall not be in breach of this Agreement and
shall not be liable to the other for any failure to perform an obligation under
this Agreement to the extent that, and as long as, the performance of such
obligation has been interfered with, hindered, delayed or prevented by Force
Majeure.

 

30.2 The provisions of clause 30.1 shall not apply unless the Party wishing to
be relieved from liability under this Agreement (the “Claiming Party”) has:

 

30.2.1 promptly after becoming aware of the occurrence of the event or
circumstance giving rise to the Force Majeure claim notified the other Party
(the “Non-Claiming Party”) in writing of the Claiming Party’s intention to claim
relief, providing details of the Force Majeure, estimation of its expected
duration and the probable impact on the performance of its obligations under
this Agreement together with all evidence reasonably required to support the
existence of the Force Majeure (the “Force Majeure Notice”);

 

30.2.2 used without delay Reasonable Endeavours and continues to use Reasonable
Endeavours to rectify the event or circumstance giving rise to the Force Majeure
claim (to the extent it is able to do so) or otherwise to mitigate the effects
of the same, and resume full performance of its obligations under this
Agreement;

 

30.2.3 given and continues to give regular reports to the Non-Claiming Party on
the status of the Force Majeure (including the effects thereof) and progress in
its efforts to overcome the same; and

 

30.2.4 as soon as reasonably possible after the end of the Force Majeure,
notified the Non-Claiming Party in writing that the Force Majeure has ended.

 

30.3 If the Force Majeure experienced by the Claiming Party continues for six
(6) months commencing on the date of the Force Majeure Notice, the Non-Claiming
Party may, at its option, at any time during the continuance of such Force
Majeure terminate this Agreement and the Parties shall have no further
obligations between them save those previously accrued or expressed in this
Agreement to survive termination and no Termination Payment shall be payable. If
the Parties have agreed a remedial plan under which the Claiming Party will
resolve the Force Majeure event the Non-Claiming Party shall not terminate this
Agreement during such period as the Claiming Party is actively and diligently
complying with such plan.

 

30.4 As soon as reasonably possible after provision of the notice in
clause 30.2.4 the Claiming Party shall notify the Non-Claiming Party whether it
is able to deliver/take (as applicable) any or part of the Biomass affected by
the Force Majeure.

 

30.5 Following receipt of a notice under clause 30.4, the Non-Claiming Party
shall notify the Claiming Party whether:

 

30.5.1 it requires the Claiming Party to increase the volumes of Biomass to be
delivered for the remainder of the Delivery Year to the extent such Biomass is
available in accordance with clause 30.4; or

 

30.5.2 it requires the Claiming Party to reduce the Annual Quantity to be
delivered by an amount not exceeding the affected quantity of Biomass; or

 

30.5.3 it, acting reasonably, requires the Claiming Party to perform any other
obligations under this Agreement which were not performed during the Force
Majeure.

 

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30.6 The Claiming Party shall have a reasonably agreed period from the date of
the notice served in accordance with clause 30.5 to perform any obligations
which were not performed during the Force Majeure (the “Force Majeure Cure
Period”) in accordance with clause 30.5.

 

31 Limitation of liability

 

31.1 Subject to clause 31.3, neither Party shall have any liability for any of
the following whatsoever or howsoever caused or arising:

 

31.1.1 loss of profit, loss of use, loss of goodwill or business interruption;
or

 

31.1.2 indirect, consequential or special loss or damage.

 

31.2 Neither Party excludes or limits liability to the other Party for death or
personal injury, for fraud or fraudulent misrepresentation nor where liability
cannot be excluded or limited as a matter of Law.

 

31.3 Nothing in clause 31.1 shall prevent, restrict or limit:

 

31.3.1 the amount payable under any express indemnity in this Agreement (save as
provided for in the definition of Direct Losses);

 

31.3.2 either Party’s liability to make a payment of liquidated damages
specified in this Agreement; or

 

31.3.3 either Party’s right to enforce any other obligation (including suing for
a debt) owed to it under or pursuant to this Agreement.

 

32 Entire Agreement

 

32.1 This Agreement and the documents referred to in it, set forth the entire
agreement and understanding of the Parties’ obligations and liabilities and
supersede any previous agreement between the Parties relating to the subject
matter of this Agreement. There are no conditions, warranties, representations
or terms, express or implied, in this regard that are binding on either party
except as specifically stated in this Agreement.

 

32.2 Each of the Parties acknowledges and agrees that:

 

32.2.1 in entering into this Agreement and the documents referred to in it, it
does not rely on, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or innocently
made) of any Person (whether Party to this Agreement or not) other than as
expressly set out in this Agreement; and

 

32.2.2 its only remedy in respect of statements, representations, warranties or
understandings made or repeated in this Agreement or in relation to this
Agreement shall be for breach of contract.

 

32.3 For the avoidance of doubt, the Quality Data and Sustainability Data Return
provided prior to execution of this Agreement shall be deemed to have been
provided under this Agreement for the purposes of this clause 32.

 

33 Severance

 

33.1 If any provision of this Agreement shall be found by any court or body or
authority of competent jurisdiction to be invalid or unenforceable, such
provision shall be severed from the remainder of this Agreement which shall
remain in full force and effect to the extent permitted by Law.

 

33.2 If any provision of this Agreement is so found to be invalid or
unenforceable but would be valid or enforceable if some part of the provision
were deleted or modified, the provision in question shall apply with such
modification as may be necessary to make it valid.

 

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34 Notices

 

34.1 Any notice required to be given under this Agreement shall be in writing in
the English language and delivered personally or sent by facsimile transmission
or recorded, special delivery or first class post to the address or facsimile
number of the Party who is to receive such notice as set out on the front page
of this Agreement or to such other address or facsimile number as may from time
to time be specified in writing by the relevant Party as its address for the
purpose of this clause 34. The Parties agree that email may be used for
day-to-day communications.

 

34.2 A notice shall be deemed to have been received:

 

34.2.1 if delivered personally, at the time of delivery;

 

34.2.2 if sent by prepaid recorded, special delivery or first class post, on the
second (2nd) Business Day after the date of posting; and

 

34.2.3 if sent by facsimile on the date of completed transmission.

 

34.3 In proving service of notice:

 

34.3.1 by personal delivery, it shall be necessary only to produce a receipt for
the notice signed by or on behalf of the Party due to receive it;

 

34.3.2 by post, it shall be necessary only to prove that the notice was
contained in an envelope which was duly addressed and posted in accordance with
this clause 34; and

 

34.3.3 by facsimile, it shall be necessary only to produce a transmission report
from the machine from which the facsimile was sent indicating that the facsimile
was sent in its entirety to the facsimile number of the recipient.

 

34.4 A notice received or deemed to be received in accordance with this
clause 34 on a day which is not a Business Day or after 5.00 pm on any Business
Day shall be deemed to be received at 9.00 am on the next Business Day.

 

34.5 Each Party undertakes to notify the other Party in accordance with this
clause 34 if the address or facsimile number specified on the front page of this
Agreement is no longer an appropriate address for the service of notices.

 

35 Dispute Resolution

 

35.1 Any dispute between the Parties in connection with this Agreement (other
than a dispute referable to an Expert in accordance with clause 22) shall be
referred in the first instance to the dispute resolution procedure as provided
in this clause 35, and thereafter may be settled by international arbitration in
New York under the Rules of Arbitration of the International Chamber of
Commerce.

 

35.2 In the first instance the respective contract manager for each of the
Parties shall arrange to meet as soon as reasonably practicable solely in order
to resolve the matter in dispute. Such meeting(s) shall be minuted and shall be
chaired by the Party calling for the meeting (the “Initial Meeting”).

 

35.3 If the Initial Meeting does not resolve the matter in question within five
(5) Business Days of the date of that meeting being called, each of the Parties
will escalate the matter to their respective senior managers, who shall arrange
to meet as soon as reasonably practicable solely in order to resolve the matter
in dispute. Such meeting(s) shall be minuted and shall be chaired by the Party
calling for the meeting (the “Manager Meeting”).

 

35.4 The Initial Meeting and the Manager Meeting(s) shall be conducted in such
manner and at such venue (including a meeting conducted over the telephone) as
to promote a consensual resolution of the dispute in question to the mutual
satisfaction of the Parties.

 

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35.5 Subject to clause 35.6, neither Party may commence proceedings (or the
equivalent by initiating International Arbitration in New York) prior to the
later to occur of:

 

35.5.1 the completion of the procedures referred to in clauses 35.2 and 35.3;
and

 

35.5.2 the expiry of four (4) weeks from the date of the first contact referred
to in clause 35.2 above.

 

35.6 This clause 35 is without prejudice to either Party’s right to seek interim
relief against the other Party (such as an injunction) through the English
courts to protect its rights and interests, or to enforce the obligations of the
other Party.

 

35.7 During any dispute, including a dispute as to the validity of any aspect of
this Agreement, it is agreed between the Parties that they shall continue to
comply with and perform the provisions of this Agreement.

 

36 Governing Law and Jurisdiction

 

36.1 This Agreement and any non-contractual obligations arising out of or in
connection with it are governed by and shall be construed in accordance with the
laws of England.

 

36.2 In relation to any proceedings (save in respect of proceedings relating to
interim relief), each Party irrevocably agrees that all disputes and claims
shall be settled by international arbitration in New York.

 

36.3 Any dispute arising out of or in connection with this Agreement, including
any question regarding its existence, validity or termination, shall be referred
to and finally resolved by arbitration under the Rules of Arbitration of the
International Chamber of Commerce, which Rules are deemed to be incorporated by
reference into this clause:

 

36.3.1 the number of arbitrators shall be three in the case of any dispute with
a value greater than CAD$10,000,000 and shall be one in the case of all other
disputes;

 

36.3.2 the Parties agree that where there are to be three arbitrators, one shall
be appointed by the Buyer, one shall be appointed by the Seller and one shall be
appointed by the International Court of Arbitration of the International Chamber
of Commerce, and the Parties agree that where there is to be one arbitrator he
shall be appointed by the International Court of Arbitration of the
International Chamber of Commerce;

 

36.3.3 the arbitrators shall be qualified as a barrister, judge or retired judge
and therefore have the requisite knowledge of English law;

 

36.3.4 the seat, or legal place, of arbitration shall be New York;

 

36.3.5 the language to be used in the arbitral proceedings shall be English;

 

36.3.6 the Parties undertake to keep confidential all awards in any arbitration,
together with all materials in the proceedings created for the purpose of the
arbitration and all other documents produced by another party in the proceedings
not otherwise in the public domain - save and to the extent that disclosure may
be required of a Party by legal duty, to protect or pursue a legal right or to
enforce or challenge an award in bona fide legal proceedings before a state
court or other judicial authority; and

 

36.3.7 by agreeing to arbitration in accordance with this clause, the Parties do
not intend to deprive any competent court of its jurisdiction to issue a
pre-arbitral injunction, pre-arbitral attachment or other order in aid of the
arbitration proceedings or the enforcement of any award. Any interim or
provisional relief ordered by any competent court may subsequently be vacated,
continued or modified by the arbitral tribunal on the application of either
Party.

 

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37 Service of Process

 

37.1 In respect of any proceedings for interim relief only in accordance with
clause 35.6, the Seller irrevocably appoints the agent specified in section 20
as its agent for service of process in relation to any proceedings before the
English courts in connection with this Agreement.

 

37.2 The Seller agrees that failure by a process agent to notify the Seller of
the process will not invalidate the interim relief proceedings concerned.

 

38 Rights of Third Parties

This Agreement does not create, confer or purport to confer any benefit or right
enforceable by any Person not a Party to it and all third party rights implied
by Law are, to the extent permissible by Law, excluded from this Agreement
except that a Person who is a permitted successor to or assignee of the rights
of a Party to this Agreement is deemed to be a Party to this Agreement.

 

39 Counterparts

This Agreement may be executed in any number of counterparts all of which taken
together shall constitute one and the same document and any Party may execute
this Agreement by signing any one or more of such counterparts.

 

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Schedule 4

Loading Port Specifications and Requirements

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Schedule 5

Sustainability Data Return

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Schedule 6

Seller Plant Development Schedule

 

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Schedule 7

Compliance Statement

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Schedule 8

CSR Policy Statement

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Schedule 9

HSE Conditions

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Schedule 10

Sample Price Calculation