Exhibit 10.1

 

Confidential Treatment Requested.  Confidential portions of this document have
been redacted
and have been separately filed with the Commission.

 

BLACKHAWK BIOFUELS, LLC TOLL PROCESSING AGREEMENT

 

This Blackhawk Biofuels, LLC Toll Processing Agreement (the “Agreement”) is made
and entered into effective January 1, 2010, by and between Blackhawk Biofuels,
LLC a limited liability company organized and existing under the laws of the
state of Delaware, with offices at 22 South Chicago Avenue, Freeport, Illinois
61032 (“Blackhawk Biofuels”). and REG Marketing & Logistics Group, LLC, an Iowa
limited liability company (“REG Marketing”), of 416 S. Bell Avenue, PO Box 888,
Ames, Iowa 50010 (each a “Party,” and collectively the “Parties”).

 

Recitals

 

A.            Blackhawk Biofuels is in the business of manufacturing and
processing biodiesel from feedstock at its biodiesel processing facility located
at Danville, IL (the “Facility”).

 

B.            REG Marketing desires to arrange for the purchase and delivery of
animal fats and other feedstocks (as specified by the provisions of Section 7
hereafter, herein “Feedstocks”) to Blackhawk Biofuels for processing into
biodiesel meeting the specifications set out in Section 8 hereafter (herein
“Biodiesel”) and Crude Glycerin, Fatty Acids and Soapstock (“Co-products”)
pursuant to a toll processing arrangement.  Blackhawk Biofuels desires that REG
Marketing arrange for the delivery of Feedstocks for processing at the Facility.

 

The Agreement

 

In consideration of the mutual benefits and obligations herein provided and
other good and valuable consideration, Blackhawk Biofuels and REG Marketing
agree as follows:

 

1.             OFFERS TO DELIVER FEEDSTOCKS FOR PROCESSING.  REG MARKETING MAY
OFFER TO DELIVER FEEDSTOCKS TO BLACKHAWK BIOFUELS’S FACILITY AT DANVILLE, IL,
DURING THE TERM OF THIS AGREEMENT.

 

(A)           ORDERS WITHIN FACILITY COMMITMENT.  REG MARKETING SHALL ORDER THE
PROCESSING OF 11.0 MILLION POUNDS OF FEEDSTOCKS AT THE FACILITY (“FACILITY
COMMITMENT”). ANY SUCH ORDER SHALL SET OUT THE TYPE AND QUANTITY OF FEEDSTOCKS,
AND THE PRODUCTION WEEK FOR WHICH SUCH FEEDSTOCKS ARE INTENDED FOR PROCESSING
(“ORDER”).  IF SUCH ORDER IS TIMELY MADE, THEN UNLESS OTHERWISE AGREED BY THE
PARTIES REG MARKETING SHALL DELIVER THE FEEDSTOCKS TO BLACKHAWK BIOFUELS IN TIME
FOR PRODUCTION OF THE BIODIESEL, BLACKHAWK BIOFUELS SHALL PROCESS THE FEEDSTOCKS
AND TEST AND CERTIFY THE BIODIESEL AS MEETING THE AGREED UPON SPECIFICATIONS
UNDER THE APPLICABLE ORDER DURING SUCH PRODUCTION WEEK, AND REG MARKETING SHALL
ARRANGE TO PICK UP THE RESULTING BIODIESEL DURING THE TWO WEEKS IMMEDIATELY
FOLLOWING SUCH PRODUCTION WEEK.  BLACKHAWK BIOFUELS AGREES TO PROVIDE WRITTEN
ACKNOWLEDGMENT OF ALL ORDERS PLACED BY REG MARKETING.  FOR PURPOSES OF THIS
AGREEMENT, A “PRODUCTION WEEK” SHALL MEAN A CALENDAR WEEK BEGINNING AT 8:00 A.M.
ON MONDAY AND ENDING AT 7:59 A.M. ON THE FOLLOWING MONDAY, WITH WEEKS DESIGNATED
FOR PICK UP OF BIODIESEL MEASURED IN SIMILAR FASHION.

 

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AS AN EXAMPLE, FOR THE PRODUCTION WEEK COMMENCING JANUARY 19, 2009, REG
MARKETING WOULD NEED TO HAVE DELIVERED ITS ORDER FOR SUCH PRODUCTION WEEK ON OR
BEFORE 5:00 P.M. ON MONDAY, JANUARY 5, 2009.  IF SUCH ORDER HAS BEEN TIMELY
DELIVERED TO BLACKHAWK BIOFUELS, REG MARKETING WOULD THEN DELIVER IN THE
FEEDSTOCKS REQUIRED FOR SUCH PRODUCTION WEEK BOTH BEFORE AND DURING THE
PRODUCTION WEEK.  BLACKHAWK BIOFUELS WOULD THEN HAVE THE PRODUCTION WEEK OF
JANUARY 19 THROUGH JANUARY 26, 2009, TO COMPLETE PRODUCTION, TEST AND CERTIFY
THE BIODIESEL MEETS THE AGREED UPON SPECIFICATIONS UNDER THE APPLICABLE ORDER. 
REG MARKETING WOULD THEN HAVE FROM JANUARY 26 THROUGH 7:59 A.M. ON FEBRUARY 9,
2009, TO PICK UP THE BIODIESEL PRODUCED FOR SUCH PRODUCTION WEEK.  REG MARKETING
SHALL DEVELOP A SAMPLE “ORDER/NOMINATION” FORM TO BE USED BY THE PARTIES, WHICH
SHALL BE ATTACHED AS EXHIBIT A HERETO.

 

Any Feedstocks purchased by Bunge North America, Inc. (“Bunge”) pursuant to the
terms of a Feedstock Purchase and Sale Agreement dated June 30, 2009 (the
“Feedstock Agreement”) by and between Blackhawk Biofuels, REG Marketing and
Bunge shall be included in determining whether the Facility Commitment has been
met.  Any purchase of Feedstocks by Bunge, however, shall be governed
exclusively by the terms of the Feedstock Agreement and such purchases shall not
be subject to the terms of this Agreement.

 

(B)           OFFERS IN EXCESS OF THE FACILITY COMMITMENT.  REG MARKETING MAY
OFFER TO DELIVER ADDITIONAL FEEDSTOCKS BEYOND THE FACILITY COMMITMENT, SUBJECT
TO BLACKHAWK BIOFUELS’S ACCEPTANCE.  ANY SUCH OFFER (“NOMINATION”) SHALL SET OUT
THE TYPE AND QUANTITY OF FEEDSTOCKS, THE PRODUCTION WEEK FOR WHICH SUCH
FEEDSTOCKS ARE INTENDED FOR PRODUCTION, AND ADVISE OF THE TIME PERIOD DURING
WHICH BLACKHAWK BIOFUELS SHALL BE REQUIRED TO COMMUNICATE BLACKHAWK BIOFUELS’S
ACCEPTANCE BACK TO REG MARKETING (“OFFER PERIOD”).  THE PARTIES AGREE THAT SUCH
OFFER PERIOD WILL NOT EXPIRE PRIOR TO 12:00 O’CLOCK NOON, LOCAL TIME AT THE
FACILITY, ON THE BUSINESS DAY FOLLOWING THAT DAY DURING WHICH THE NOMINATION IS
DELIVERED, AND PROVIDED FURTHER THAT (UNLESS WAIVED BY BLACKHAWK BIOFUELS) A
NOMINATION SHALL NOT PROPOSE A FEEDSTOCKS DELIVERY SCHEDULE WITH FIRST DELIVERY
DATE LESS THAN SEVEN (7) CALENDAR DAYS AFTER THE END OF THE OFFER PERIOD.  IF A
NOMINATION IS ACCEPTED BY BLACKHAWK BIOFUELS (AS SET OUT HEREAFTER), THEN
(UNLESS OTHERWISE AGREED BY THE PARTIES) REG MARKETING AGREES TO DELIVER THE
FEEDSTOCKS TO BLACKHAWK BIOFUELS PURSUANT TO THE TERMS OF THE NOMINATION PRIOR
TO SUCH PRODUCTION WEEK TO UTILIZE IN THE PRODUCTION OF THE BIODIESEL, BLACKHAWK
BIOFUELS SHALL DURING SUCH PRODUCTION WEEK PROCESS THE FEEDSTOCKS AND TEST AND
CERTIFY THE BIODIESEL AS MEETING THE AGREED UPON SPECIFICATIONS UNDER THE
APPLICABLE NOMINATION, AND REG MARKETING SHALL ARRANGE TO PICK UP THE RESULTING
BIODIESEL DURING THE TWO WEEKS IMMEDIATELY FOLLOWING SUCH PRODUCTION WEEK.  THE
SAMPLE “ORDER/NOMINATION” FORM TO BE USED BY THE PARTIES IS ATTACHED AS
EXHIBIT A HERETO.

 

2.             AGREEMENT TO PROCESS ORDERS; CONSIDERATION OF NOMINATIONS.

 

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*** Confidential material redacted and filed separately with the Commission.

 

(A)           ORDERS WITHIN FACILITY COMMITMENT. BLACKHAWK BIOFUELS AGREES TO
PROCESS FEEDSTOCKS FOR ALL ORDERS RECEIVED TOTALING UP TO 2.75 MILLION POUNDS
PER PRODUCTION WEEK, SUCH PROCESSING TO BE WITHIN THE TIME FRAME AS SET OUT IN
SECTION 1(A) ABOVE (UNLESS OTHERWISE AGREED BY THE PARTIES).  BLACKHAWK AND REG
MARKETING AGREE THAT ANY SHORTFALL IN BIODIESEL PRODUCTION OR SHIPMENTS DUE IN
THE PREVIOUS AGREEMENT DATED DECEMBER 31ST 2009 MAY BE MADE UP UNDER THIS
AGREEMENT WITHOUT PENALTIES.

 

(B)           NOMINATIONS IN EXCESS OF FACILITY COMMITMENT.  IN ADDITION, SHOULD
REG MARKETING OFFER TO DELIVER FEEDSTOCKS IN EXCESS OF SUCH FACILITY COMMITMENT,
BLACKHAWK BIOFUELS WILL CONSIDER ANY SUCH NOMINATION RECEIVED, AND SHALL HAVE
THE RIGHT (BUT NOT ANY OBLIGATION) TO ACCEPT NOMINATIONS RECEIVED FROM REG
MARKETING BY NOTICE GIVEN DURING THE OFFER PERIOD.  IF BLACKHAWK BIOFUELS GIVES
TIMELY ACCEPTANCE OF A NOMINATION (PURSUANT TO THE PROVISIONS SET OUT IN THIS
AGREEMENT, HEREIN AN “ACCEPTANCE”), THEN BLACKHAWK BIOFUELS AGREES TO PROCESS
FEEDSTOCKS RECEIVED PURSUANT TO THE TERMS OF THE NOMINATION (AND SUCH OTHER
APPLICABLE PROVISIONS AS SET OUT HEREIN).

 

3.             MANNER OF EXTENDING ORDER, NOMINATIONS, ACCEPTANCES. 
NOTWITHSTANDING ANY PROVISIONS OF SECTION 26(A) TO THE CONTRARY, THE PARTIES MAY
SUBMIT ORDERS, NOMINATIONS AND ACCEPTANCES BY TELEPHONE OR EMAIL, PROVIDED THAT
ANY ORDER, NOMINATION OR ACCEPTANCE SUBMITTED BY TELEPHONE MUST BE FOLLOWED BY
TIMELY CONFIRMATION BY EMAIL.

 

4.             TOLL FEES AND PAYMENT.  BLACKHAWK BIOFUELS SHALL BE PAID A TOLL
FEE OF $ *** FOR EVERY GALLON OF BIODIESEL AT STANDARD TEMPERATURE AND PRESSURE
DELIVERED TO REG MARKETING, PRODUCED AT THE FACILITY FROM THE FEEDSTOCKS
DELIVERED BY REG MARKETING FOR ALL VOLUMES SHIPPED UP TO 2,500,000 GALLONS IN A
CALENDAR MONTH. BLACKHAWK BIOFUELS SHALL BE PAID A TOLL FEE OF $ *** FOR EVERY
GALLON OF BIODIESEL AT STANDARD TEMPERATURE AND PRESSURE DELIVERED TO REG
MARKETING, PRODUCED AT THE FACILITY FROM THE FEEDSTOCKS DELIVERED BY REG
MARKETING FOR ALL VOLUMES SHIPPED IN EXCESS OF 2,500,000 GALLONS IN A CALENDAR
MONTH. PAYMENT SHALL BE MADE AS FOLLOWS:

 

(A)           THE TOLL FEE UNDER THE TERMS OF SUCH ORDERS OR NOMINATIONS BY
WIRED FUNDS TO BLACKHAWK BIOFUELS ON EVERY TUESDAY FOR BIODIESEL DELIVERED TO
REG MARKETING FROM THE PRIOR TUESDAY THRU MONDAY OF THAT WEEK. DELIVERED TO REG
MARKETING SHALL MEAN BIODIESEL MEETING SPECIFICATIONS LOADED PER SHIPPING
INSTRUCTIONS FOB DANVILLE, IL.

 

5.             CO-PRODUCTS.  REG MARKETING SHALL ALSO BE ENTITLED TO RECEIVE AT
NO ADDITIONAL COST, ALL GLYCERIN AND FATTY ACID PRODUCED AS A RESULT OF THE
PROCESSING OF THE FEEDSTOCKS.

 

6.             METHANOL AND CATALYST.  REG MARKETING SHALL BE RESPONSIBLE FOR
THE PURCHASE AND DELIVERY OF METHANOL AND CATALYST TO THE FACILITY. THE MAXIMUM
ALLOWED USAGE OF METHANOL SHALL BE *** GAL OF METHANOL PER GALLON OF BIODIESEL.
THE MAXIMUM ALLOWED USAGE OF CATALYST SHALL BE *** LBS PER GALLON OF BIODIESEL.
BLACKHAWK BIOFUELS WILL REIMBURSE REG MARKETING FOR USAGE OF METHANOL AND
CATALYST ABOVE THE MAXIMUMS. THE REIMBURSEMENT WILL BE PAID FOR OVERUSAGE AT THE
AVERAGE PRICE OF THE CHEMICALS MULTIPLIED BY THE OVERUSAGE AMOUNT BASED ON THE
BIODIESEL PRODUCED ON A MONTHLY BASIS.  REG MARKETING WILL INVOICE BLACKHAWK
BIOFUELS WITHIN THE FIRST

 

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WEEK OF THE FOLLOWING MONTH.  PAYMENT TERMS WILL BE 7 DAYS FROM RECEIPT OF
INVOICE FROM REG MARKETING.  IF THE ACTUAL POSITIVE OR NEGATIVE USAGE VARIANCE
PERFORMANCE IS GREATER THAN 10% FROM THE VALUES GIVEN ABOVE, THE PARTIES WILL
USE DATA GATHERED WHILE PRODUCING UNDER STEADY STATE CONDITIONS AND ADJUST THE
MAXIMUM ALLOWED USAGES WITH APPROVAL TO NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED BY EITHER PARTY.  ANY CHANGES WILL BE CONTAINED IN AN
ADDENDUM TO THIS AGREEMENT.

 

7.             MAXIMUM FEEDSTOCK USAGE AND OVERUSAGE.  IN CONSIDERATION OF THE
TOLL FEE AND HANDLING OF CO-PRODUCTS AGREED UPON, BLACKHAWK BIOFUELS AGREES THE
MAXIMUM FEEDSTOCK USAGE(MFU) PER POUND OF DELIVERED BIODIESEL SHALL BE AS
DEFINED IN EXHIBIT B FOR EACH FEEDSTOCK TYPE.

 

FOR FEEDSTOCKS WHERE A MFU VALUE IS CLEARLY IDENTIFIED AND NOT CALCULATED, THE
ACTUAL OVERUSE, IF ANY, WILL BE CALCULATED AS FOLLOWS:

 

OVERUSAGE BASED ON IDENTIFIED MCU = A – ( B X MFU)

 

WHERE A = ACTUAL POUNDS OF FEEDSTOCK DELIVERED FROM AGGREGATE BOL’S

 

B = BIODIESEL PRODUCED FROM FEEDSTOCK IN GALLONS AT STANDARD CONDITIONS

 

MCU = DEFINED VALUE FOR FEEDSTOCK TYPE

 

FOR HIGHER FFA FEEDSTOCKS OR BLENDS OF FEEDSTOCKS THAT DO NOT HAVE AN IDENTIFIED
MFU AND REQUIRE THE CALCULATION, A DAILY FLOW PROPORTIONED REPRESENTATIVE
COMPOSITE SAMPLE SHALL BE TESTED AND THE RESULTING %FFA WILL BE USED IN THE
CALCULATION. FOR MFU FOR THE RESULTING PRODUCTION VOLUME.  FOR FEEDSTOCKS WHERE
A MFU VALUE IS CALCULATED AND NOT CLEARLY IDENTIFIED, THE ACTUAL OVERUSE, IF
ANY, WILL BE CALCULATED AS FOLLOWS:

 

OVERUSAGE FOR HIGH FFA AND BLENDS BASED ON MCU CALCULATION = C – (B X MFU)

 

WHERE C = ACTUAL POUNDS OF FEEDSTOCK DELIVERED FROM AGGREGATE BOL’S

 

B = BIODIESEL PRODUCED FROM FEEDSTOCK IN GALLONS AT STANDARD CONDITIONS

 

MFU = “EXHIBIT B CALCULATION *1” USING DAILY FLOW PROPORTIONED

 

REPRESENTATIVE COMPOSITE SAMPLE

 

THE REIMBURSEMENT WILL BE PAID FOR OVERUSAGE AT THE AVERAGE PRICE OF THE
FEEDSTOCK MULTIPLIED BY THE OVERUSAGE AMOUNT BASED ON THE BIODIESEL PRODUCED ON
A MONTHLY BASIS.  REG MARKETING WILL INVOICE BLACKHAWK BIOFUELS WITHIN THE FIRST
WEEK OF THE FOLLOWING MONTH.  PAYMENT TERMS WILL BE 7 DAYS FROM RECEIPT OF
INVOICE FROM REG MARKETING.  IF THE ACTUAL POSITIVE OR NEGATIVE USAGE VARIANCE
PERFORMANCE IS GREATER THAN 2% FROM THE VALUES GIVEN OR CALCULATED IN EXHIBIT B,
THE PARTIES WILL USE DATA GATHERED WHILE PRODUCING UNDER STEADY STATE CONDITIONS
AND ADJUST THE

 

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DEFINED MFU  OR FORMULA “*1” WITH APPROVAL TO NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED BY EITHER PARTY.  ANY CHANGES WILL BE CONTAINED IN AN
ADDENDUM TO THIS AGREEMENT.

 

8.             FEEDSTOCKS.  THE FEEDSTOCKS TO BE DELIVERED TO THE FACILITY
PURSUANT TO THIS AGREEMENT SHALL COMPLY WITH THE SPECIFICATIONS SET FORTH ON
EXHIBIT B ATTACHED HERETO OR THE SPECIFIC PURCHASE ORDER, WHICHEVER IS THE MORE
RESTRICTIVE SPECIFICATION.  FOR EXAMPLE, IF THE TALLOW SPECIFICATION FOR FFA IN
EXHIBIT B WAS <4 AND THE PURCHASE ORDER DEFINED FFA AS LESS THAN <2, THEN <2
SHALL BE THE REQUIREMENT.  PRIOR TO ACCEPTING DELIVERIES OF FEEDSTOCKS,
BLACKHAWK BIOFUELS SHALL HAVE THE RIGHT AT ITS EXPENSE TO INSPECT AND TEST THE
TENDERED FEEDSTOCKS TO DETERMINE IF IT MEETS THE SPECIFICATIONS REQUIRED UNDER
THIS AGREEMENT, AND IF ANY SUCH FEEDSTOCKS DOES NOT MEET THE REQUIRED
SPECIFICATIONS THEN BLACKHAWK BIOFUELS SHALL HAVE THE RIGHT TO REJECT SUCH
FEEDSTOCKS AND REQUIRE REG MARKETING, AT ITS COST, TO REPLACE THE SAME WITH
FEEDSTOCKS THAT MEETS THE REQUIRED SPECIFICATIONS.  SHOULD REG MARKETING PROPOSE
ANY OTHER TYPE OF FEEDSTOCKS OTHER THAN IDENTIFIED ON EXHIBIT B, THE PARTIES
SHALL AGREE UPON THE WRITTEN SPECIFICATIONS AND MFU APPLICABLE TO SUCH
ADDITIONAL FEEDSTOCK, AND APPROVE AND ATTACH SUCH SPECIFICATIONS AND MFU AS AN
ADDENDUM TO EXHIBIT B WITH APPROVAL TO NOT BE UNREASONABLY WITHHELD, CONDITIONED
OR DELAYED BY EITHER PARTY.

 

9.             BIODIESEL.  THE BIODIESEL TO BE PRODUCED PURSUANT TO THIS
AGREEMENT SHALL COMPLY WITH THE SPECIFICATIONS SET FORTH ON EXHIBIT C ATTACHED
HERETO.  AT REG MARKETING’S REQUEST, TWO (2) - ONE (1) LITRE SAMPLES OF THE
BIODIESEL TO BE DELIVERED TO REG MARKETING BY BLACKHAWK BIOFUELS SHALL BE MADE
AVAILABLE FOR TESTING AT REG MARKETING’S COST, PRIOR TO REG MARKETING PICKING UP
SUCH BIODIESEL.  SHOULD INSPECTION AND TESTING DETERMINE THAT ANY BIODIESEL DOES
NOT MEET THE REQUIRED SPECIFICATIONS (WHETHER DETERMINED BEFORE OR AFTER SUCH
BIODIESEL HAS BEEN PICKED UP BY REG MARKETING, AND INCLUDING AFTER DELIVERY TO
REG MARKETING’S CUSTOMERS), REG MARKETING SHALL HAVE THE RIGHT TO REJECT SUCH
BIODIESEL, AND REQUIRE BLACKHAWK BIOFUELS, AT ITS COST, TO REPLACE THE SAME WITH
BIODIESEL THAT MEETS THE REQUIRED SPECIFICATIONS.

 

10.          TERM.  THE TERM OF THIS AGREEMENT SHALL BE UNTIL JANUARY 31ST, 2010
AND COMMENCE UPON ITS SIGNATURE BY THE PARTIES.

 

11.          TITLE.  EXCEPT AS OTHERWISE PROVIDED HEREIN, TITLE TO THE
FEEDSTOCKS DELIVERED BY REG MARKETING PURSUANT TO THIS AGREEMENT AND TITLE TO
THE CONTRACTUAL AMOUNT OF CORRESPONDING BIODIESEL AND CO-PRODUCTS PRODUCED FROM
SUCH FEEDSTOCKS SHALL AT ALL TIMES BE AND REMAIN WITH REG MARKETING.  ANY
FEEDSTOCKS DELIVERED BY REG MARKETING PURSUANT TO THE TERMS AND CONDITIONS OF
THE FEEDSTOCK AGREEMENT, HOWEVER, SHALL AT ALL TIMES BE AND REMAIN WITH BUNGE
UNTIL SUCH TIME AS TITLE TO SUCH FEEDSTOCKS PASSES TO REG MARKETING PURSUANT TO
THE TERMS OF THE FEEDSTOCK AGREEMENT.

 

12.          RISK OF LOSS; INSURANCE.  RISK OF LOSS TO THE FEEDSTOCKS AND THE
BIODIESEL AND CO-PRODUCTS PRODUCED THEREFROM SHALL AT ALL TIMES BE BORNE BY REG
MARKETING, AND REG MARKETING WILL MAINTAIN SUCH PROPERTY INSURANCE ON THE
FEEDSTOCKS AND THE BIODIESEL  PRODUCED THEREFROM AS REG MARKETING SHALL
DETERMINE, IN ITS SOLE DISCRETION.

 

BLACKHAWK BIOFUELS AND REG MARKETING SHALL EACH, AT ITS OWN COST AND EXPENSE,
OBTAIN AND MAINTAIN, DURING THE TERM OF THIS AGREEMENT, COMPREHENSIVE GENERAL
LIABILITY INSURANCE, IN MINIMUM AMOUNTS OF FIVE MILLION DOLLARS ($5,000,000) PER
OCCURRENCE FOR DAMAGE, INJURY AND/OR DEATH TO PERSONS, AND ONE MILLION DOLLARS
($1,000,000) PER OCCURRENCE FOR DAMAGE AND/OR

 

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INJURY TO PROPERTY AND WORKER’S COMPENSATION INSURANCE AS REQUIRED BY LAW.  SUCH
COVERAGE SHALL BE ON A DATE OF OCCURRENCE FORM, AND BE PROVIDED BY AN INSURANCE
COMPANY REASONABLY SATISFACTORY TO THE OTHER PARTY.  BLACKHAWK BIOFUELS AND REG
MARKETING SHALL EACH PROVIDE THE OTHER WITH PROOF OF SUCH INSURANCE COVERAGE
PRIOR TO ANY FEEDSTOCKS BEING DELIVERED, SUCH INSURANCE NAMING THE OTHER PARTY
AS AN ADDITIONAL INSURED, AND PROVIDING THAT THE COVERAGE REPRESENTED THEREBY
SHALL NOT BE CANCELED NOR MODIFIED UNLESS AT LEAST THIRTY (30) DAYS PRIOR
WRITTEN NOTICE HAS BEEN GIVEN TO THE ADDITIONAL INSURED.

 

13.          INVENTORY REPORTS.  BLACKHAWK BIOFUELS WILL PROVIDE REG MARKETING
WITH DAILY REPORTS SHOWING THE RECEIPT, USAGE AND INVENTORY OF FEEDSTOCKS,
METHANOL AND CATALYST, AND SHIPMENTS, PRODUCTION AND INVENTORY OF BIODIESEL AND
CO-PRODUCTS PRODUCED.

 

14.          PRODUCTION COSTS.  OTHER THAN FOR THE COST OF THE FEEDSTOCKS,
METHANOL, AND CATALYST PURCHASED AND DELIVERED BY REG MARKETING, BLACKHAWK
BIOFUELS SHALL BE RESPONSIBLE FOR ALL COSTS OF PRODUCING THE BIODIESEL REQUIRED
UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ALL LABOR COSTS AND THE COST
OF UTILITIES, CHEMICALS OTHER THAN METHANOL AND CATALYST AND OTHER CONSUMABLES
USED IN SUCH PRODUCTION.

 

15.          TESTING.  BLACKHAWK BIOFUELS SHALL BE RESPONSIBLE FOR THE COST OF
TESTING TO FULLY CERTIFY THE BIODIESEL MEETS THE SPECIFICATIONS IDENTIFIED IN
THE ORDER OR NOMINATION.  ALL SAMPLING AND TESTING SHALL BE IN CONFORMANCE WITH
BQ-9000 RULES AND REGULATIONS.

 

16.          FREIGHT COSTS.  REG MARKETING WILL BEAR THE COST OF ALL FREIGHT
CHARGES FOR THE FEEDSTOCKS, METHANOL, AND CATALYST PURCHASED BY REG MARKETING,
AND BIODIESEL AND CO-PRODUCTS TO BE PRODUCED THEREFROM, PURSUANT TO THIS
AGREEMENT.

 

17.          PROTECTION OF REG MARKETING’S TITLE.  IN ORDER TO BETTER EVIDENCE
REG MARKETING’S OWNERSHIP OF THE FEEDSTOCKS AND THE BIODIESEL PRODUCED
THEREFROM, BLACKHAWK BIOFUELS HEREBY AUTHORIZES REG MARKETING ON ITS BEHALF, AT
ANY TIME AND FROM TIME TO TIME TO FILE PROTECTIVE FINANCING STATEMENTS IN ANY
UNIFORM COMMERCIAL CODE JURISDICTION, WHICH MAY INCLUDE WITHOUT LIMITATION ANY
INITIAL FINANCING STATEMENTS AND AMENDMENTS THERETO THAT (I) DESCRIBE THE
FEEDSTOCKS, AND THE BIODIESEL THAT IS THE SUBJECT OF THIS AGREEMENT, AND
(II) CONTAIN ANY OTHER INFORMATION REQUIRED OR APPROPRIATE TO BE INCLUDED
PURSUANT TO THE UNIFORM COMMERCIAL CODE OF THE STATE WHERE FILED, INCLUDING THAT
THE ORGANIZATIONAL IDENTIFICATION NUMBER OF BLACKHAWK BIOFUELS IS 20-2760722. 
BLACKHAWK BIOFUELS AGREES TO FURNISH ANY SUCH INFORMATION TO REG MARKETING
PROMPTLY UPON REQUEST.  BLACKHAWK BIOFUELS WILL NOT PURPORT TO PLEDGE, MORTGAGE
OR CREATE, OR SUFFER TO EXIST A SECURITY INTEREST IN THE FEEDSTOCKS AND THE
BIODIESEL THAT IS PRODUCED THEREFROM, IN FAVOR OF ANY THIRD PARTY, AND BLACKHAWK
BIOFUELS, UPON THE REQUEST OF REG MARKETING OR IN RESPONSE TO ANY INQUIRY THAT
MAY BE MADE, WILL INFORM ANY LENDER, LESSOR OR OTHER THIRD PARTY THAT HAS OR MAY
HAVE A LIEN OR SECURITY INTEREST OR ANY OTHER INTEREST IN PROPERTY OF BLACKHAWK
BIOFUELS THAT REG MARKETING IS THE OWNER OF THE FEEDSTOCKS AND THE BIODIESEL
THAT IS THE SUBJECT OF THIS AGREEMENT.  “NOTWITHSTANDING ANYTHING TO THE
CONTRARY SET FORTH HEREIN, BLACKHAWK BIOFUELS AND REG MARKETING ACKNOWLEDGE AND
AGREE THAT PURSUANT TO THE TERMS OF THE FEEDSTOCK AGREEMENT, BUNGE SHALL HAVE
TITLE IN THE FEEDSTOCKS PURCHASED BY BUNGE PURSUANT TO THE TERMS OF THE
FEEDSTOCK AGREEMENT, AND BUNGE SHALL HAVE THE RIGHT TO FILE PRECAUTIONARY
FINANCING STATEMENTS AND AMENDMENTS AND/OR CONTINUATIONS THERETO PURSUANT TO THE
UNIFORM COMMERCIAL CODE TO FURTHER EVIDENCE AND MEMORIALIZE ITS ABSOLUTE
OWNERSHIP INTEREST IN THE FEEDSTOCKS.”

 

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18.          PRODUCT SEGREGATION.  REG MARKETING, ON BEHALF OF BLACKHAWK
BIOFUELS, SHALL BE ALLOWED TO ADD ADDITIONAL FEEDSTOCKS OWNED BY REG MARKETING
AS NEEDED TO MEET THE QUALITY AND YIELD REQUIREMENTS HEREUNDER, SO LONG AS SUCH
ADDITIONAL FEEDSTOCKS HAVE COLD FLOW CHARACTERISTICS THAT ARE CAPABLE OF MEETING
THE COLD FLOW SPECIFICATIONS SET OUT ON THE APPLICABLE ORDER OR NOMINATION, AND
THE BIODIESEL TO BE PRODUCED SHALL IN ANY EVENT MEET THE SPECIFICATIONS REQUIRED
HEREUNDER, AS MODIFIED BY THE ORDER OR NOMINATION AND ACCEPTANCE APPLICABLE.  IN
SUCH EVENT, REG MARKETING SHALL OFF-SET ANY COSTS FOR SUCH ADDITIONAL FEEDSTOCKS
AGAINST THE TOLL FEES TO BE PAID BY REG MARKETING PURSUANT TO SECTION 4 HEREOF. 
PURSUANT TO THE TERMS OF THE FEEDSTOCK AGREEMENT, BLACKHAWK BIOFUELS SHALL ALLOW
BUNGE TO STORE THE FEEDSTOCKS AT THE FACILITY; PROVIDED, HOWEVER, SUCH
FEEDSTOCKS SHALL BE SEGREGATED FROM ANY FEEDSTOCKS OWNED BY REG MARKETING
PURSUANT TO THE TERMS OF THIS AGREEMENT.

 

19.          FAILURE TO PROCESS.  IF FOR ANY REASON OTHER THAN REG MARKETING’S
FAILURE TO DELIVER FEEDSTOCKS, METHANOL, AND CATALYST AS REQUIRED UNDER THIS
AGREEMENT (AND OTHER THAN A MATTER COVERED BY THE FORCE MAJEURE PROVISIONS OF
THIS AGREEMENT) BLACKHAWK BIOFUELS FAILS TO PROCESS THE FEEDSTOCKS IN TO THE
CERTIFIED BIODIESEL WITHIN THE TIME FRAME CONTEMPLATED BY THIS AGREEMENT,
BLACKHAWK BIOFUELS WILL PAY TO REG MARKETING THE AMOUNT DETERMINED BY FIRST
DIVIDING THE NUMBER OF POUNDS OF FEEDSTOCKS DELIVERED TO BLACKHAWK BIOFUELS BY
THE MAXIMUM FEEDSTOCK USAGE PER GALLON YIELD UNDER SECTION 7 AND CONVERTING TO
GALLONS TO DETERMINE THE GALLONS OF BIODIESEL WHICH SHOULD HAVE BEEN PROCESSED
(“REQUIRED GALLONS”); SECOND, SUBTRACTING THE ACTUAL GALLONS OF BIODIESEL
RECEIVED BY REG MARKETING FROM THE REQUIRED GALLONS TO DETERMINE THE NUMBER OF
GALLONS WHICH BLACKHAWK BIOFUELS FAILED TO PROCESS (“BIODIESEL SHORTAGE”); AND
THIRD, MULTIPLY THE BIODIESEL SHORTAGE BY REG MARKETING’S AVERAGE MARKET PRICE
PER GALLON OF BIODIESEL DELIVERED BY BLACKHAWK BIOFUELS TO REG MARKETING UP TO
SUCH TIME OF COMPUTATION (OR IF NONE DELIVERED ANOTHER REASONABLE METHOD OF
DETERMINING THE MARKET VALUE OF BIODIESEL FOB DANVILLE AS MAY BE AGREED BY THE
PARTIES, OR OTHERWISE DETERMINED IF THE PARTIES CAN NOT SO AGREE).

 

20.          FACILITY SHUTDOWNS.  BLACKHAWK BIOFUELS AGREES TO NOTIFY REG
MARKETING OF ANY SCHEDULED SHUTDOWNS A MINIMUM OF THIRTY (30) DAYS IN ADVANCE. 
IN THE EVENT THERE ARE ANY FACILITY SHUTDOWNS DUE TO UNSCHEDULED POWER OR
MECHANICAL PROBLEMS WHICH WILL AFFECT RECEIVING OR SHIPPING SCHEDULES OR ARE
ANTICIPATED TO CONTINUE FOR TWENTY-FOUR (24) HOURS OR MORE BLACKHAWK BIOFUELS
WILL NOTIFY REG MARKETING AS SOON AS POSSIBLE.

 

21.          TAX CREDITS; BLENDING, SHIPPING & LOADING.  BLACKHAWK BIOFUELS
WILL, AT THE REQUEST OF REG MARKETING, BLEND THE BIODIESEL WITH PETROLEUM DIESEL
(SUPPLIED BY BLACKHAWK BIOFUELS AT ITS COST) TO CREATE B99.9 BIODIESEL AT NO
ADDITIONAL CHARGE TO REG MARKETING.  ANY EXCISE TAX OR INCOME TAX CREDIT OR
REFUND, INCLUDING ANY BLENDER’S CREDIT OR CCC CREDIT OR REFUND (“TAX CREDITS”)
RELATING TO THE BIODIESEL DELIVERED TO REG MARKETING WILL BE FOR THE ACCOUNT OF
REG MARKETING, AND SHALL BE SUBMITTED (AS APPLICABLE) TO THE UNITED STATES
INTERNAL REVENUE SERVICE (“IRS”) OR OTHER APPROPRIATE ENTITY BY BLACKHAWK
BIOFUELS, UNLESS OTHERWISE REQUESTED BY REG MARKETING BLACKHAWK BIOFUELS WILL
NOT CLAIM ANY TAX CREDITS RELATING TO THE BIODIESEL DELIVERED TO REG MARKETING
WITHOUT THE WRITTEN CONSENT OF REG MARKETING.

 

7

--------------------------------------------------------------------------------

 

IN ADDITION, BLACKHAWK BIOFUELS SHALL FULFILL THE REQUESTS REGARDING ADDITIVES
AND LOAD TEMPERATURE AS SET OUT ON THE “SHIPPING/LOADOUT REQUEST” FORM SUPPLIED
BY REG MARKETING AND COMPLETE THE LOADOUT INFORMATION FOR EACH LOAD OF BIODIESEL
SHIPPED, ALL AS SET OUT ON THE ATTACHED AS EXHIBIT D HERETO.

 

22.          RINS AND BIODIESEL CERTIFICATES.  BLACKHAWK BIOFUELS AND REG
MARKETING SHALL COOPERATE WITH EACH OTHER TO GENERATE RENEWABLE IDENTIFICATION
NUMBERS (RINS) FOR THE GALLONS OF BIODIESEL PRODUCED PURSUANT TO THIS AGREEMENT,
WITH SUCH RINS TO BE THE PROPERTY OF REG MARKETING.  BLACKHAWK BIOFUELS AND REG
MARKETING SHALL ALSO COOPERATE WITH EACH OTHER TO ISSUE BIODIESEL CERTIFICATES
FOR THE BIODIESEL PRODUCED PURSUANT TO THIS AGREEMENT, WHICH CERTIFICATES SHALL
BE SUITABLE FOR REG MARKETING’S USE IN COLLECTING THE $1.00 PER GALLON BLENDER’S
TAX CREDIT.  FOR PURPOSES OF CLARITY, ALL GALLONS FOR THESE PURPOSES SHALL BE
CALCULATED ON A TEMPERATURE CORRECTED BASIS (AT 60° F).

 

23.          FORCE MAJEURE.  NEITHER PARTY HERETO SHALL BE LIABLE FOR ANY DELAY
ARISING FROM CIRCUMSTANCES BEYOND ITS CONTROL INCLUDING ACTS OF GOD, RIOT OR
CIVIL COMMOTION, INDUSTRIAL DISPUTE, FIRE, FLOOD, DROUGHT, ACT OF GOVERNMENT,
TERRORIST ACTS, WAR, OR SABOTAGE (EXCEPT FAILURES OR DELAYS RESULTING FROM A
LACK OF A PARTY’S FUNDS), PROVIDED THAT THE PARTY SEEKING TO BE EXCUSED SHALL
MAKE EVERY REASONABLE EFFORT TO MINIMIZE THE DELAY RESULTING THEREFROM AND SHALL
GIVE PROMPT WRITTEN NOTICE OF THE FORCE MAJEURE EVENT TO THE OTHER PARTY.  THE
OBLIGATIONS OF THE PARTY GIVING NOTICE, SO FAR AS THEY ARE AFFECTED BY THE FORCE
MAJEURE EVENT, WILL BE SUSPENDED DURING, BUT NOT LONGER THAN, THE CONTINUANCE OF
THE FORCE MAJEURE EVENT.  THE AFFECTED PARTY MUST ACT WITH COMMERCIALLY
REASONABLE DILIGENCE TO RESUME PERFORMANCE AND NOTIFY THE OTHER PARTY THAT THE
FORCE MAJEURE EVENT NO LONGER AFFECTS ITS ABILITY TO PERFORM UNDER THE
AGREEMENT.

 

24.          INDEPENDENT CONTRACTOR.  BLACKHAWK BIOFUELS IS ACTING HEREUNDER AND
ITS SERVICES ARE RENDERED TO REG MARKETING SOLELY AS AN INDEPENDENT CONTRACTOR. 
REG MARKETING IS NOT AUTHORIZED AND SHALL NOT CONTRACT ANY OBLIGATIONS IN THE
NAME OF BLACKHAWK BIOFUELS AS A RESULT OF THIS AGREEMENT (THE PARTIES
UNDERSTANDING THAT REG MARKETING MAY HAVE SUCH AUTHORITY AS MAY ARISE FROM OTHER
CONTRACTS ENTERED IN TO BY THE PARTIES, AND INCLUDING THAT MANAGEMENT AND
OPERATIONAL SERVICES AGREEMENT DATED AUGUST 22, 2006 (“MOSA”)).  BLACKHAWK
BIOFUELS ACCEPTS FULL AND EXCLUSIVE LIABILITY FOR THE PAYMENT OF ANY AND ALL
CONTRIBUTIONS OR TAXES FOR UNEMPLOYMENT AND WORKERS’ COMPENSATION INSURANCE, OLD
AGE RETIREMENT BENEFITS, PENSIONS AND ANNUITIES NOW OR HEREAFTER IMPOSED BY ANY
FEDERAL OR STATE GOVERNMENTAL AUTHORITY WHICH ARE MEASURED BY WAGES, SALARIES OR
OTHER REMUNERATION PAID TO PERSONS, AND HOLDS HARMLESS REG MARKETING FROM ANY
SUCH LIABILITY.  BLACKHAWK BIOFUELS AGREES THAT IN PERFORMING ITS DUTIES
CONTEMPLATED BY THIS AGREEMENT IT SHALL COMPLY WITH ALL APPLICABLE FEDERAL AND
STATE LAWS, ORDERS AND REGULATIONS, AND, TO ITS KNOWLEDGE, REPRESENTS AND
WARRANTS THAT THE FACILITIES ARE IN COMPLIANCE WITH EXISTING ENVIRONMENTAL LAWS
AND REGULATIONS AND OSHA STANDARDS WHICH MAY APPLY TO THE ACTIVITIES TO BE
PERFORMED BY BLACKHAWK BIOFUELS HEREUNDER.

 

25.          CONFIDENTIALITY.

 

(A)           “CONFIDENTIAL INFORMATION” OF BLACKHAWK BIOFUELS AND REG MARKETING
INCLUDES THE TERMS OF THIS AGREEMENT, THE FEEDSTOCKS COMPOSITION, THE BIODIESEL
SPECIFICATIONS, ALL BUSINESS INFORMATION OF BLACKHAWK BIOFUELS AND REG
MARKETING, INCLUDING, BUT NOT LIMITED TO, THEIR RESPECTIVE PRICING, SUPPLIER
LISTS, QUANTITIES OF SUPPLIES PURCHASED, ALL PROCESSING AND MANUFACTURING
INFORMATION OF

 

8

--------------------------------------------------------------------------------

 

BLACKHAWK BIOFUELS AND REG MARKETING, ALL PROCESSES AND INFORMATION USED IN THE
PROCESSING OF FEEDSTOCKS INTO BIODIESEL, AND ALL OTHER CONFIDENTIAL OR
PROPRIETARY INFORMATION OF BLACKHAWK BIOFUELS AND REG MARKETING.  ALL
“CONFIDENTIAL INFORMATION” SHALL REMAIN THE SOLE PROPERTY OF THE ORIGINAL OWNER
OF THAT INFORMATION.

 

(B)           BLACKHAWK BIOFUELS AND REG MARKETING AGREE THAT (EXCEPT AS
NECESSARY FOR REG MARKETING TO MEET ITS OBLIGATIONS UNDER THE MOSA) THEY SHALL
NOT FOR ANY PURPOSE USE OR DISCLOSE TO ANY THIRD PARTY ANY CONFIDENTIAL
INFORMATION NOT OWNED BY IT. SUCH CONFIDENTIALITY OBLIGATIONS SHALL SURVIVE THE
EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT.

 

26.          DEFAULT.  EACH PARTY WILL BE ENTITLED TO ALL DAMAGES (INCLUDING
COSTS AND REASONABLE ATTORNEY FEES INCURRED IN ENFORCEMENT OF SUCH PARTY’S
RIGHTS HEREUNDER) AND OTHER RIGHTS AND REMEDIES AVAILABLE AT LAW OR IN EQUITY,
IN ADDITION TO ANY OTHER REMEDIES AS MAY BE PROVIDED IN THIS AGREEMENT, UPON THE
DEFAULT OR OTHER FAILURE TO PERFORM OF THE OTHER PARTY; PROVIDED, HOWEVER, THAT
BEFORE TAKING ACTION TO ENFORCE SUCH BREACH OR TERMINATING THIS AGREEMENT THE
PARTY CLAIMING DEFAULT OR FAILURE TO PERFORM SHALL FIRST PROVIDE THE DEFAULTING
PARTY WITH WRITTEN NOTICE DETAILING THE CIRCUMSTANCES OF ITS FAILURE TO MEET ITS
OBLIGATIONS HEREUNDER AND AN OPPORTUNITY TO CURE SUCH FAILURE WITHIN TEN
(10) DAYS OF SUCH NOTICE.

 

27.          MISCELLANEOUS.

 

(A)           NOTICES.  ANY NOTICE (INCLUDING NOMINATIONS AND ACCEPTANCES)
REQUIRED OR PERMITTED TO BE GIVEN PURSUANT TO THIS AGREEMENT IS VALIDLY GIVEN IF
IN WRITING AND: (I) PERSONALLY DELIVERED; (II) SENT BY ELECTRONIC FACSIMILE
TRANSMISSION OR OTHER MEANS OF ELECTRONIC COMMUNICATION CAPABLE OF PRODUCING A
PRINTED COPY AND A CONFIRMATION OF DELIVERY; OR (III) SENT BY PREPAID REGISTERED
MAIL OR RECOGNIZED OVERNIGHT CARRIER, ADDRESSED TO THE APPLICABLE PARTY AT ITS
ADDRESS INDICATED BELOW OR TO SUCH OTHER ADDRESS AS ANY PARTY MAY SPECIFY BY
NOTICE IN WRITING TO THE OTHER.  ANY NOTICE PERSONALLY DELIVERED ON A BUSINESS
DAY WILL BE DEEMED CONCLUSIVELY TO HAVE BEEN EFFECTIVELY GIVEN ON THE DATE
NOTICE WAS DELIVERED.  ANY NOTICE GIVEN BY FACSIMILE OR OTHER MEANS OF
ELECTRONIC COMMUNICATION WILL BE DEEMED CONCLUSIVELY TO HAVE BEEN GIVEN ON THE
DATE SPECIFIED ON THE CONFIRMATION OF SUCH TRANSMISSION.  ANY NOTICE SENT BY
PREPAID REGISTERED MAIL WILL BE DEEMED CONCLUSIVELY TO HAVE BEEN EFFECTIVELY
GIVEN WHEN ACTUALLY RECEIVED.  NOTICES SHALL BE ADDRESSED AS FOLLOWS:

 

If to REG Marketing:

 

416 S. Bell Avenue, PO Box 888

 

 

Ames, IA 50010

 

 

Attn: Gary Haer

 

 

Fax: (515) 239-8029

 

 

 

IF TO BLACKHAWK BIOFUELS:

 

210 WEST SPRING STREET

 

 

FREEPORT, ILLINOIS 61032

 

 

ATTN: RON MAPES

 

 

FAX: (815) 235-4727

 

9

--------------------------------------------------------------------------------

 

Any party may change the address to which notices are to be sent to it by giving
written notice of such change of address to the other parties in the manner
herein provided for giving notice.  Any such notice, demand, request or other
communication shall be deemed given when mailed or delivered as aforesaid.

 

(B)                                 CUMULATIVE REMEDIES.  THE RIGHTS AND
REMEDIES PROVIDED TO BLACKHAWK BIOFUELS AND REG MARKETING IN THIS AGREEMENT, OR
OTHERWISE AVAILABLE AT LAW OR IN EQUITY, SHALL BE CUMULATIVE AND MAY BE
EXERCISED CONCURRENTLY OR SUCCESSIVELY.

 

(C)                                  GOVERNING LAW/CHOICE OF FORUM.  THIS
AGREEMENT SHALL BE DEEMED MADE AND ENTERED UNTO IN THE STATE OF IOWA AND SHALL
BE GOVERNED AND CONSTRUED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF
IOWA WITHOUT RESORT TO SAID STATE’S CONFLICT OF LAWS RULES.  THE U.S. DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF IOWA, OR IF SUCH COURT LACKS JURISDICTION,
THE IOWA DISTRICT COURT FOR STORY COUNTY, IOWA, SHALL BE THE VENUE AND EXCLUSIVE
PROPER FORUM IN WHICH TO ADJUDICATE ANY CASE OR CONTROVERSY ARISING EITHER,
DIRECTLY OR INDIRECTLY, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  THE PARTIES
FURTHER AGREE THAT, IN THE EVENT OF LITIGATION ARISING OUT OF OR IN CONNECTION
WITH THESE MATTERS, THEY WILL NOT CONTEST OR CHALLENGE THE JURISDICTION OR VENUE
OF THESE COURTS.

 

(D)                                 AMENDMENTS.  THIS AGREEMENT MAY NOT BE
MODIFIED OR AMENDED UNLESS A WRITTEN AMENDMENT TO THIS AGREEMENT IS EXECUTED BY
REG MARKETING AND BLACKHAWK BIOFUELS.

 

(E)                                  SEVERABILITY.  IF ANY PROVISION OF THIS
AGREEMENT MAY BE CONSTRUED IN TWO WAYS, ONE OF WHICH WOULD RENDER THE PROVISION
ILLEGAL OR OTHERWISE VOIDABLE AND UNENFORCEABLE AND THE OTHER OF WHICH WOULD
RENDER THE PROVISION VALID AND ENFORCEABLE, SUCH PROVISION SHALL HAVE THE
MEANING WHICH RENDERS IT VALID AND ENFORCEABLE.  THE LANGUAGE OF ALL PROVISIONS
OF THIS AGREEMENT SHALL BE CONSTRUED ACCORDING TO ITS FAIR MEANING AND NOT
STRICTLY AGAINST REG MARKETING OR BLACKHAWK BIOFUELS.  IT IS THE INTENTION OF
THE PARTIES THAT THE PROVISIONS OF THIS AGREEMENT BE ENFORCED TO THE FULLEST
EXTENT.  IN THE EVENT THAT ANY COURT SHALL DETERMINE THAT ANY PROVISION OF THIS
AGREEMENT IS UNENFORCEABLE AS WRITTEN, THE PARTIES AGREE THAT THE PROVISION
SHALL BE AMENDED SO THAT IT IS SEVERABLE AND THEY SHALL BE INTERPRETED AND
ENFORCED AS IF ALL COMPLETELY INVALID OR UNENFORCEABLE PROVISIONS WERE NOT
CONTAINED IN THIS AGREEMENT.  PARTIALLY VALID AND ENFORCEABLE PROVISIONS SHALL
BE ENFORCED TO THE EXTENT THAT THEY ARE PARTIALLY VALID AND ENFORCEABLE.

 

(F)                                    CAPTIONS.  SECTION CAPTIONS ARE USED ONLY
FOR CONVENIENCE AND ARE IN NO WAY TO BE CONSTRUED AS A PART OF THIS AGREEMENT OR
AS A LIMITATION OF THE SCOPE OF THE PARTICULAR SECTIONS TO WHICH THEY REFER. 
WORDS OF ANY GENDER USED IN THIS AGREEMENT SHALL INCLUDE ANY OTHER GENDER, AND
WORDS IN THE SINGULAR SHALL INCLUDE THE PLURAL WHERE THE CONTEXT REQUIRES.

 

(G)                                 ASSIGNMENT.  NEITHER PARTY MAY ASSIGN ANY OF
ITS RIGHTS IN OR DELEGATE ANY OF ITS DUTIES UNDER THIS AGREEMENT WITHOUT THE
PRIOR WRITTEN CONSENT OF THE OTHER PARTY.  NOTWITHSTANDING THE FOREGOING, A
PARTY (“ASSIGNOR”) MAY WITHOUT THE NEED FOR

 

10

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

*** Confidential material redacted and filed separately with the Commission.

 

CONSENT FROM THE OTHER PARTY ASSIGN ANY OR ALL OF ITS RIGHTS, DUTIES AND
OBLIGATIONS UNDER THIS AGREEMENT TO ANOTHER ENTITY, OR TO SUCH PARTY’S AFFILIATE
OR SUCCESSOR (COLLECTIVELY HEREIN “ASSIGNEE”), IF SUCH ASSIGNEE EXPRESSLY
ASSUMES ALL OBLIGATIONS NOT OTHERWISE REMAINING WITH ASSIGNOR HEREUNDER, AND
ASSIGNOR NONETHELESS REMAINS RESPONSIBLE HEREUNDER.

 

(H)                                 INTERPRETATION.  THIS AGREEMENT HAS BEEN
PREPARED AFTER EXTENSIVE NEGOTIATION BETWEEN THE PARTIES HERETO, AND IF ANY
AMBIGUITY IS CONTAINED HEREIN, THEN IN RESOLVING SUCH AMBIGUITY, NO WEIGHT SHALL
BE GIVEN IN FAVOR OF OR AGAINST EITHER PARTY SOLELY ON ACCOUNT OF ITS DRAFTING
THIS AGREEMENT.

 

(I)                                     ENTIRE AGREEMENT.  TIME IS OF THE
ESSENCE OF THIS AGREEMENT.  THIS AGREEMENT TOGETHER WITH THE EXHIBITS REFERENCED
HEREIN CONSTITUTE THE ENTIRE AGREEMENT BY AND BETWEEN THE PARTIES AND ALL PRIOR
WRITTEN AND VERBAL AGREEMENTS, PROPOSALS, REPRESENTATIONS AND OTHER
COMMUNICATIONS BETWEEN THE PARTIES REGARDING THIS TOLLING ARRANGEMENT ARE
SUPERSEDED.

 

(J)                                     COUNTERPARTS. THIS AGREEMENT MAY BE
EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL,
BUT ALL OF WHICH TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT, AND MAY
BE EXECUTED AND DELIVERED BY FACSIMILE SIGNATURE OR SIMILAR MEANS, WHICH SHALL
BE CONSIDERED AN ORIGINAL.

 

(K)                                  MOST FAVORED TERMS.  BLACKHAWK BIOFUELS
REPRESENTS AND WARRANTS AS OF THE DATE HEREOF AND COVENANTS AND AGREES FROM AND
AFTER THE DATE HEREOF THAT NONE OF THE PROVISIONS OFFERED TO ANY OTHER PERSON OR
ENTITY IS OR WILL BE MORE FAVORABLE TO SUCH PERSON OR ENTITY THAN THOSE OFFERED
UNDER THIS AGREEMENT, AND, IF THEY ARE OR BECOME MORE FAVORABLE TO ANY OTHER
PERSON OR ENTITY DURING THE TERM OF THIS AGREEMENT OR ANY CONTINUATION OR
EXTENSION THEREOF, BLACKHAWK BIOFUELS SHALL GIVE WRITTEN NOTICE THEREOF TO REG
MARKETING, AND REG MARKETING SHALL HAVE THE OPTION (WHICH OPTION MUST BE
EXERCISED BY WRITTEN NOTICE TO BLACKHAWK BIOFUELS WITH TEN (10) BUSINESS DAYS
AFTER NOTICE THEREOF) TO AMEND THIS AGREEMENT TO INCLUDE ANY SUCH MORE FAVORABLE
TERMS.  IF SUCH OPTION IS EXERCISED, BLACKHAWK BIOFUELS AND REG MARKETING SHALL
EXECUTE AN APPROPRIATE WRITTEN AMENDMENT TO THIS AGREEMENT.

 

(L)                                     MOSA FEE.  IN VIEW OF THE FACT THAT THIS
AGREEMENT IS TO PROCESS FEEDSTOCKS OWNED BY REG MARKETING FOR THE BENEFIT OF REG
MARKETING, REG MARKETING AGREES THAT BLACKHAWK BIOFUELS SHALL NOT BE REQUIRED TO
PAY THE VARIABLE FEE OF $ *** /GAL UNDER THE MOSA FOR THE VOLUME OF BIODIESEL
PROCESSED FOR AND DELIVERED TO REG MARKETING UNDER THIS AGREEMENT.  BLACKHAWK
BIOFUELS SHALL CONTINUE TO PAY THE FIXED FEE OF $ *** PER MONTH AS OUTLINED IN
THE MOSA.

 

11

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, BLACKHAWK BIOFUELS AND REG MARKETING HAVE EXECUTED THIS
AGREEMENT AS OF THE DATE FIRST SHOWN ABOVE.

 

BLACKHAWK BIOFUELS, LLC

 

REG MARKETING & LOGISTICS GROUP, LLC

 

 

 

 

 

 

 

 

By

/s/ RONALD L. MAPES

 

By:

/s/ GARY HAER

Name

Ronald L. Mapes

 

Name:

Gary Haer

Title

Chair

 

Title:

Vice President

 

12

--------------------------------------------------------------------------------

 

[g20611km03i001.jpg]

 

Exhibit A

 

(Form of Order/Nomination)

 

                             ORDER NUMBER                 or
                                   NOMINATION NUMBER

 

For Production Week beginning:

 

/

/

 

 

 

 

 

 

Date Sent to Blackhawk BioFuels, LLC:

 

/

/

 

 

 

 

 

 

Date Reviewed by Blackhawk BioFuels, LLC:

 

/

/

 

 

 

 

 

 

Blackhawk BioFuels, LLC’s Action: (circle)        ACCEPT

or

REJECT

 

 

 

Date Accepted/Rejected by Blackhawk BioFuels, LLC:

 

/

/

 

 

Product Specification

o   REG – 9000 ASTM

o   REG – 9000 EN

 

 

Cold Flow Specification

o   Cloud            °C

o   CFPP            °C

 

FEEDSTOCK TYPE

 

Lbs ORDERED

 

Contr. Yield

 

Contr. Gallons

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

 

 

 

Date

 

Date

REG Marketing & Logistics Group, LLC.

 

Blackhawk BioFuels, LLC.

 

13

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

*** Confidential material redacted and filed separately with the Commission.

 

[g20611km03i001.jpg]

 

“Exhibit B”

 

REG Feedstock Specifications

 

 

 

Analytical

 

Free Fatty
Acid
(as Oleic)

 

Moisture

 

Insoluble
Impurities

 

Total MIU

 

Phosphorus

 

Color
(FAC
Scale)

 

Maximum
Feedstock
Usage per
Gallon of
BioDiesel
(MFU)

 

 

 

Method

 

AOCS Ca

 

AOCS Ca

 

AOCS Ca

 

 

 

AOCS Ca

 

 

 

 

 

Feedstock

 

Feedstock

 

5a-40

 

2c-25

 

3a-46

 

calc

 

12-55

 

AOCS Ca

 

 

 

Group

 

Type

 

wt%

 

wt%

 

wt%

 

wt%

 

ppm

 

13a-43

 

Lbs/Gal

 

 

 

RB Soy

 

<0.25

 

<0.3

 

<0.05

 

<1.5

 

<20

 

Clear & bright

 

7.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude Degummed Soy

 

<1.0

 

<0.3

 

<0.25

 

<2.0

 

<200

 

Typical

 

7.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distillers Corn Oil

 

<15

 

<1.0

 

<0.5

 

<2.5

 

<20

 

Typical

 

8.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edible Tallow

 

<0.75

 

<0.2

 

<0.05

 

<1.0

 

<400

 

Typical

 

7.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Animal Fats

 

Tallow

 

<4

 

<1.0

 

<0.25

 

<2.0

 

<400

 

Typical

 

* (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Poultry Fat/Grease

 

<8.0

 

<1.0

 

<0.25

 

<2.0

 

<400

 

Typical

 

* (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Choice White Grease

 

<4

 

<1.0

 

<0.25

 

<2.0

 

<400

 

Typical

 

* (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yellow Grease & UFO

 

< 15

 

<1.0

 

<0.25

 

<2.0

 

<400

 

Typical

 

* (1)

 

 

--------------------------------------------------------------------------------

* (1) Calculation for Maximum Feedstock Usage using high FFA feedstocks

 

Maximum Feedstock Usage = (*** x % FFA) +***

Example: Tested FFA = ***

 

Max Usage = (*** x ***%) + *** = *** lbs/gal of Biodiesel

 

14

--------------------------------------------------------------------------------

 

[g20611km05i001.jpg]

 

Attachment C

 

REG-9000Ô ASTM

 

Based off ASTM D6751 Specifications

 

Test Parameter

 

REG-9000Ô
Limit

 

Units

 

Test Method
(current revision)

Cloud point:

 

Per Order

 

°C

 

D 2500 Allowable variance of +/- 2°C

Free Glycerin:

 

< 0.014

 

% Mass

 

D 6584

Total Glycerin:

 

< 0.15

 

% Mass

 

D 6584

Monoglycerides(1):

 

< 0.500

 

% Mass

 

D 6584

Diglycerides(2):

 

< 0.200

 

% Mass

 

D 6584

Triglycerides(3):

 

< 0.150

 

% Mass

 

D 6584

Water & Sediment:

 

< 0.020

 

% Volume

 

D 2709

Acid Number:

 

< 0.40

 

mg KOH/g

 

D 664

Visual Inspection:

 

1, max

 

Haze

 

D 4176, procedure 2

Relative Density at 60°F:

 

0.85 - 0.90

 

n/a

 

D1298 (BQ-9000)

Oxidation Stability (100°C)

 

3 min or per Shipping Request

 

hrs

 

EN 14112

Flash point (closed cup):

 

> 93

 

°C

 

D 93

Alcohol Control

Option 1: Methanol

 

< 0.2

 

% Volume

 

EN 14110

 

Option 2: Flashpoint

 

> 130

 

°C

 

D 93

Moisture(4):

 

< 0.020

 

% Volume

 

E203

Cold Soak Filtration:

 

< 200

 

seconds

 

D 6751 Annex

Sulfur:

 

< 10

 

ppm

 

D 2622

Sodium & Potassium Combined:

 

< 2.0

 

ppm (µg/g)

 

EN 14538

Calcium & Magnesium Combined:

 

< 1.0

 

ppm (µg/g)

 

EN 14538

Phosphorus:

 

< 0.001

 

% Mass

 

D 4951

Carbon Residue:

 

< 0.05

 

% Mass

 

D 4530

Sulfated Ash:

 

< 0.02

 

% Mass

 

D 874

Kinematic Viscosity at 40°C:

 

3.8 - 5.0

 

mm2/sec.

 

D 445

Copper Corrosion (3 hrs at 50°C):

 

No. 1

 

n/a

 

D 130

Distillation at 90% Recovered:

 

360, max

 

°C

 

D 1160

Cetane number:

 

47, min

 

n/a

 

D 613

 

--------------------------------------------------------------------------------

(1),(2),(3),(4),(5)  These are not ASTM D 6751 nor BQ9000 specification
requirements

 

15

--------------------------------------------------------------------------------

 

[g20611km05i001.jpg]

 

Attachment C-2

 

REG-9000Ô EN

 

Based off EN 14214 Specifications

 

Test Parameter

 

REG-9000Ô Limit

 

Units

 

Method

Free Glycerin:

 

0.014

 

% (m/m)

 

EN 14105

Total Glycerin:

 

0.150

 

% (m/m)

 

EN 14105

Monoglycerides:

 

0.500

 

% (m/m)

 

EN 14105

Diglycerides:

 

0.200

 

% (m/m)

 

EN 14105

Triglycerides:

 

0.150

 

% (m/m)

 

EN 14105

Ester Content:

 

> 96.5

 

% (m/m)

 

EN 14103

Linolenic Acid Methyl Ester:

 

12, max

 

% (m/m)

 

EN 14103

Polyunsaturate Methyl Ester:

 

1, max

 

% (m/m)

 

EN 14103

Total Contamination:

 

24, max

 

mg/kg

 

EN 12662

Acid Number:

 

< 0.40

 

mg KOH/g

 

EN 14104

Cold Filter Plugging Point:

 

Per Order

 

°C

 

EN 116 Allowable variance of +/- 2°C

Density @15°C:

 

860 - 900

 

kg/m3

 

EN ISO 3675

Oxidative Stability:

 

6 min or per Shipping Request

 

hrs

 

EN 14112:2003

Flashpoint:

 

> 170

 

°C

 

EN ISO 3679

Iodine Value:

 

120 Max

 

g/100g

 

EN 14111

Methanol Content:

 

0.2, max

 

% (m/m)

 

EN 14110

Water Content:

 

200, max

 

mg/kg

 

EN ISO 12937

Sulfur Content:

 

< 10

 

mg/kg

 

EN ISO 20846

Phosphorus Content:

 

< 10

 

mg/kg

 

EN 14107

Sodium & Potassium Combined:

 

< 2

 

mg/kg

 

EN 14538 BS2000-547

Calcium & Magnesium Combined:

 

< 2.0

 

mg/kg

 

EN 14538 BS2000-547

Sulfated Ash:

 

< 0.02

 

% (m/m)

 

ISO 3987

Kinematic Viscosity at 40°C:

 

3.5 - 5.0

 

mm2/sec.

 

EN ISO 3104

Copper Corrosion @ 50°C for 3hrs:

 

1, max

 

n/a

 

EN ISO 2160

Cetane Number:

 

51 Min.

 

n/a

 

EN ISO 5165

Carbon Residue @ 10% distillation remnant:

 

0.3

 

%(m/m)

 

EN ISO 10370

Cold Soak Filtration:

 

< 200

 

seconds

 

D 6217 Annex

 

16

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[g20611km05i001.jpg]

 

Exhibit D

Shipping/Loadout Request

 

Today’s Date:

/         /

 

Target Date to Load:

/         /

 

 

 

Loading Requirements

 

 

o   Truck                  Trucking
Company                                       

 

o   REG Railcar

 

 

 

Product:

 

o   B99.9

 

o   B100

 

 

 

o   Oxidative Additive:                                          ppm

 

o   Minimum Load Temperature:                                             °F

 

Blackhawk Fills out Remainder of form:

 

Lot Number:

 

o  Loadout Checklist Complete.  Operator initials

 

Seal Numbers:

 

Railcar ID:

 

RIN #’s

 

 

Time Scheduled

*Biodiesel Loaded (gal)

 

 

 

 

Time Arrived

*Diesel Loaded (gal)

 

 

 

 

Time Loaded

*Total Gallons             (gal)

 

 

 

 

BOL #

 

 

 

--------------------------------------------------------------------------------

*Gal corrected to 60 degrees Fahrenheit.

 

When completed Scan and e-mail to:  bill.neese@regfuel.com,
adam.sander@regfuel.com, mike.alleman@regfuel.com, dave.simon@regfuel.com,
natan.wylke@com, Jason.schwenneker@regfuel.com.

 

17

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