Exhibit 10.13


 


Confidential Treatment Requested. Confidential portions of this
document have been redacted

and have been separately filed with the Commission.


 


WEST CENTRAL BIODIESEL SUPPLY AGREEMENT


 


This
Agreement, dated effective the 24th day of August, 2005, is made by and between
West Central Cooperative, an Iowa cooperative association, with its principal
offices located 406 First Street, Ralston, Iowa 51459 (“WC”), and Peter Cremer
North America, LP, a Delaware limited partnership, with its principal offices
located at 3117 Southside Avenue, Cincinnati, Ohio 45204 (“PCNA”).


 


WHEREAS, WC
markets and sells biodiesel, biodiesel blends and other alternative fuel
products and related services throughout the United States;


 


WHEREAS, PCNA
has entered into an agreement with Twin Rivers Technology Natural Ingredients,
LLC (“TRT”) whereby TRT manufactures, produces and stores methyl esters
suitable for production of biodiesel at its Cincinnati facility in Cincinnati,
Ohio exclusively for PCNA (the “TRT Agreement”);


 


WHEREAS, PCNA
from time to time receives Commodity Credit Corporation (“CCC”) reimbursements
on production classified as incremental on a quarterly basis for the biodiesel
methyl esters produced by TRT at Cincinnati;


 


WHEREAS, WC
desires to purchase biodiesel methyl ester products produced for PCNA by TRT;


 


WHEREAS, PCNA
is willing to supply WC with biodiesel, biodiesel blends and other methyl ester
products that may be manufactured by TRT from time to time pursuant to the TRT
Agreement;


 


WHEREAS, WC and
PCNA desire to amend their prior West Central Biodiesel Supply Agreement dated
the 24th day of August, 2005 (“Prior Agreement”), by substituting in its place
this document,


 


NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, WC and PCNA agree as follows:


 


1.           Production and Take Volumes and
Timing.


 


(a)                                  Subject to the
following terms and provisions, PCNA will sell WC Biodiesel methyl ester
Product totaling


 


•                  10/01/2005 –
9/30/2006: 210,000,000 lbs.


•                  10/01/2006 –
9/30/2007: 240,000,000 lbs.


•                  10/01/2007 –
9/30/2008: 240,000,000 lbs.


 


(b)                                 PCNA will sell WC
Biodiesel methyl ester Product meeting the ASTM D-6751 specification.


 


(c)                                  All raw materials
acquisition and corresponding production costs associated with the manufacture
of the Product will be the sole responsibility of PCNA.


 

















 


(d)                                 Each batch will be
accompanied by a certificate of analysis. 
If additional testing is required, Product samples will be sent to a
mutually agreeable third party laboratory. 
If the Product meets the specification, the cost of the sampling,
shipping, and testing of the sample test will be paid for by WC.  If it does not meet the specification, these
costs will be paid for by PCNA.


 


(e)                                  Timing and off take
volumes.  The off-take of all produced
volume is important.  PCNA agrees to
produce Biodiesel as per the attached production plan as outlined in Exhibit A
within the period from 10/01/05 until 9/30/2008.  WC agrees to establish and adhere to the
attached purchase plan on Exhibit B, subject to the following:


 


(i)                                     By signature to
this Agreement, WC hereby agrees to purchase Product hereunder for the period
10/01/2005 – 03/31/2006.  Thereafter, the
parties agree that WC has an option to purchase Product under this Agreement in
six-month segments measured from each April 1st and October 1st.  WC shall have until thirty (30) days prior to
the commencement of the six months beginning April 1, 2006 (and each six months
thereafter), to notify PCNA in writing if WC will be purchasing Product for
such upcoming six-month period.  If such
notification is provided, PCNA shall sell and WC shall purchase Product
pursuant to the terms herein for such six-month period.  If such notification is not provided, then
unless otherwise agreed, the parties shall not be obligated to perform under
this Agreement during such six-month period (and PCNA shall have the right to
sell Product to other parties during such six months).  At the conclusion of each six-month period
during the initial and any renewal terms of this Agreement (whether WC had
exercised its option to purchase during such period or not), WC would once
again have the option to purchase Product under this Agreement for the next six
months, by furnishing written notice of its election to purchase Product at
least thirty (30) days prior to the commencement of such six-month period.


 


(ii)                                  PCNA understands and
agrees that WC will be marketing Product in six-month segments beginning
10/01/2005.  In the event that TRT is not
able to meet the production volumes set out under Exhibit A attached hereto for
any six-month segment as referenced at section 1(e)(i) above, or for any other
reason PCNA fails to timely deliver the anticipated production volume from
Exhibit A for such six-month segment,  and in addition fails to delivery such Product
within an additional two month grace period commencing immediately after the
six-month segment (“Grace Period”), then with respect to any Product scheduled
for a particular six-month segment and not produced and available until after
the close of such Grace Period (“Late Product Production”), WC shall have the
option (but not the obligation) to purchase such Late Product Production at the
price and upon the terms (including conversion fee) applicable to such prior
six-month segment.  In the event WC
chooses not to purchase but instead gives notice to PCNA of WC’s decision to
release such Late Product Production


 


2

















 






*** Confidential material redacted and filed separately with the
Commision


 


from the Agreement, PCNA shall have the right to sell such Late Product
Production to other parties.  With
respect to any deliveries of Product to WC made during the Grace Period, PCNA
shall identify whether such Product is being made with respect to the six-month
segment just closed, or relates to the subsequent six-month segment just
commencing.  If requested by PCNA, WC
agrees to assist PCNA in monitoring production as it relates to the six-month
segments, and positions held in futures contracts, to make possible adjustments
if Late Product Production is anticipated. 
Late Product Production released from the terms of this Agreement
(whether or not purchased by a third party) shall nonetheless reduce WC’s total
purchase commitment hereunder.


 


2.           Pricing.


 


(a)                                  Oil Pricing:  Actual costs of delivered Crude Soybean oil
to Cincinnati (intention J.M. Smucker Co.) or RB Soybean oil delivered to PCNA’s
North Terminal.


 


Oil Price will
consist of Oil Futures + Basis.


 


Example:


On October 1st
J.M. Smucker will deliver *** lbs. of Refined oil.  The invoice price will include Crude October Soybean
Futures Price per Chicago Board of Trade (“CBOT”) + Basis (J.M. Smucker Co.
plant); $***+ $***/lb. = $***/lb.


 


WC will make
every effort to inform PCNA in writing when to fix the futures prior to 9:30
a.m. on a given CBOT trading day.  If WC
informs PCNA prior to noon on a given trading day, it is agreed that PCNA will
fix futures during the current day’s trading session.  Should WC inform PCNA after noon on such a
trading day, PCNA shall have until the following trading session to fulfill WC’s
order, priced within that session’s opening range.


 


(b)                                 Conversion
Fee:  WC will receive product for
a purchase price equal to PCNA’s cost of Crude Soybean Oil delivered
Cincinnati, OH by J.M. Smucker Co. (on a per pound basis) plus $*** per pound
of Product.  Conversion fee will be
locked in on a 6 month basis and will be adjusted semi-annually based on
utilities, Glycerin, and methanol.


 


Example:


 


	
   

  	
  (A)

  	
  Crude SBO
  price per CBOT:

  	
  $***

  
	
   

  	
  (B)

  	
  Basis (J.M.
  Smucker Co. plant):

  	
  $***

  
	
   

  	
  (C)

  	
  Subtotal

  	
  $*** per
  lbs. of crude soybean oil

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yield

  	
  *** lbs. of
  Biodiesel/lbs. of Crude Soybean oil

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (D)

  	
  Costs of
  material

  	
  $*** per
  lbs.

  
	
   

  	
  (E)

  	
  Conversion
  fee

  	
  $*** per
  lbs. Biodiesel (Fixed OND ‘05 – JFM ‘06)

  
					



 


3

















 






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


 


	
   

  	
  (F)

  	
  Logistics

  	
  $*** per
  lbs. PCNA’s North Terminal to River tank

  
	
   

  	
  (G)

  	
  Final Price

  	
  $*** per
  lbs.

  



 


This price is
based upon FOB Cincinnati, Ohio.


 


(c)                                  PCNA will invoice WC
after the completion of each qualified lot or each barge shipment.  The invoice price will be equivalent to the
total production costs as outlined above at 2(b) example bullet point (G).


 


WC will pay
all invoices within ten (10) days of the invoice date.


 


(d)                                 Any CCC reimbursements
received by WC or PCNA for the production at TRT during each CCC Quarter
throughout 2006 shall be contributed in equal amounts toward the investment of
a pipeline and tankage at PCNA’s North Terminal (“Improvements”).  In the event of significant proration of the
CCC programs, WC and PCNA will contribute equal amounts of the Small Producers
Credit (“SPC”) received for the production at TRT toward the Improvements.  WC’s share of the CCC and SPC shall not
exceed $*** toward the Improvements.  In
the event that neither the CCC nor SPC provides enough funding to reach the $***
to cover WC’s share of the investment WC will fund any residual funding out of
profits generated by the sale of Biodiesel.


 


	
  Example:

  	
   

  	
  -

  	
  CCC funding
  is $***

  
	
   

  	
   

  	
   

  	
  •  WC share is $***

  
	
   

  	
   

  	
  -

  	
  SPC funding
  is $***

  
	
   

  	
   

  	
   

  	
  •  WC share is $***

  
	
   

  	
   

  	
  -

  	
  WC
  commitment shortfall is $*** of $***

  
	
   

  	
   

  	
  -

  	
  WC will fund
  remaining $*** from their share of generated profits from Biodiesel sales

  



 


CCC funds or
Small Producers Credit funds will be deposited in an escrow account established
in the names of WC and PCNA.


 


PCNA shall
instruct the CCC or SPC to remit those funds directly into the established escrow
account and shall provide a copy of this instruction to WC as soon as
available.  PCNA will provide a copy of
the CCC or SPC reimbursement application for the relevant production quarter to
WC.


 


The
disbursement from the account will be made as soon as practical after the
receipt of the last CCC payment for the prior fiscal quarter.


 


3.                                       Product Buy
Back Option.  PCNA may “purchase” a
mutually agreed quantity of Biodiesel from WC for a purchase price equal to the
“Final price” as outlined under 2(b) example bullet point (G).  Any such purchases shall reduce WC’s purchase
commitment hereunder, and shall be paid for by PCNA within ten (10) days of the
invoice date.


 


4

















 


Example:  Under the Agreement, WC has agreed to
purchase a total of 105 million pounds during the October 2005 through March
2006 period.  PCNA purchases 20 million
pounds of Biodiesel from WC during this period. 
As a result, WC’s total Product commitment for the October 2005 through
March 2006 shall be reduced accordingly to 85 million pounds.


 


4.                                       Net Profit
Distribution.  Both parties agree to
share their individual net profits 50:50 from the sales of the TRT production
of 690,000,000 lbs. of Biodiesel produced under this contract.


 


In case of a
loss because of insufficient CCC funding or other unforeseen circumstances not
covered by this contract the loss is the responsibility of each party only and
shall not be shared.


 


Individual Net
Profits are defined as:


 


WC’s net
profit:  WC’s average sales price to
customers minus “Final price to WC” as outlined under clause 2(b) example bullet
point (G) multiplied with WC’s share of pounds sold.


 


PCNA’s net
profit:  PCNA’s average sales price to
customers minus “Final price to WC” as outlined under clause 2(b) example bullet
point (G) multiplied with PCNA’s share of pounds sold.


 


The share of
the individual net profit shall be 50:50 regardless of the profitability of the
other individual result.


 


Both parties
agree to exchange on a monthly basis their average sales prices.


 


Both parties
agree to settle up with the other party for their share of the individual
profits as soon as possible, but not later than the end of the month for all
sales completed during the prior month.


 


PCNA or WC
will have the option on a quarterly basis to audit invoice records to verify
sales price by an agreed to third party.


 


5.                                       Storage and
Distribution.  PCNA will store
Biodiesel as deemed necessary for meeting production volumes and off take as
outlined in schedule A and B.


 


Current
Cincinnati based storage tanks under this contract are:


1 x 7MM lbs.
tank River Tank ~ $6,000/mo.


1 x 7MM lbs.
tank River Tank ~ $6,000/mo.


1 x 8MM lbs.
tank River Tank ~ $9,000/mo.


6 x 7MM lbs.
tanks at PCNA’s North Terminal ~ $8,000/tank/mo.


 


5

















 


Tank storage
costs (whether for the above listed tanks or at other locations), costs to
transport Product to storage, in and out charges, and similar costs will be
shared 50:50 between WC and PCNA.


 


6.                                       Indemnification.  PCNA agrees to indemnify and hold WC harmless
from and against all claims or liabilities that may arise in connection with,
or as a result of, the production, storage or distribution of Product by PCNA;
provided, however, (i) that so long as the Product sold to WC complies with
then current ASTM specifications, PCNA shall have no liability for any product
claims arising under or resulting from this Agreement and (ii) that PCNA shall
have no liability for claims arising under or resulting from WC’s negligence or
that of its employees, agents or servants. 
WC agrees to indemnify and hold PCNA harmless from and against all
claims or liabilities that may arise in connection with, or as a result of, the
storage, distribution, or sale of Product by WC, except that WC shall have no
liability for claims arising under or resulting from PCNA’s negligence or that
of its employees, agents or servants.


 


7.                                       Independent
Parties.  Neither party to this
Agreement is designated a representative, agent, partner or joint venture of
the other party for any purpose whatsoever. 
Neither party has the right or authority to assume or create any
obligation or responsibility, express or implied, on behalf of or in the name
of the other party hereto, nor to bind the other party hereto in any manner
whatsoever or to in any way act on its behalf.


 


8.                                       Term/Termination.  The initial term of this Agreement shall be
from the date hereof until September 30, 2008. 
This Agreement may be renewed by mutual agreement for successive one (1)
year terms by executing an appropriate letter agreement, signed by both
parties, at least 90 days prior to the end of any term.  Any time after the initial term, either party
shall have the right to terminate this Agreement for any reason by giving the other
party notice of termination in writing, registered mail, return receipt
requested, at least ninety (90) days prior to the effective date of such
termination.  In the event that WC is the
terminating party, WC will deliver, contemporaneously with the notice of
termination, payment for all outstanding invoices.  In the event that PCNA is the terminating
party, PCNA will fulfill — and WC will pay for — all outstanding quantities
under this contract to the date of the notice of termination unless the parties
agree otherwise.


 


9.                                       Failure to
Perform by TRT.  In the event that
TRT fails to perform, is unable to supply PCNA with Product, or otherwise
breaches its agreement with PCNA, PCNA’s failure to supply WC with Product
under this Agreement will not be a breach of this Agreement; provided that PCNA
notifies WC and provided that PCNA takes commercially reasonable efforts to
correct TRT’s performance (including PCNA purchasing replacement Product
meeting the specifications set out herein to supply to WC at the price computed
under section 2 if requested by WC because of sales made by WC in reliance on
Exhibit A production plans which WC is not otherwise able to cancel or fill
without incurring significant penalty or loss), PCNA otherwise to reimburse WC in
an amount equal to one-half (1/2) of  such penalty or loss.


 


6

















 


10.                                 Assignment.  In the event that either party has a change
in ownership, is consolidated or merged with another entity, regardless of
whether such party is the surviving entity, or undergoes any other change in
status or structure, this Agreement will remain in full force and effect and
the surviving or remaining entity will be obligated to fulfill the terms of the
Agreement as if it had been the original signatory hereto.  No other modification or assignment of this
Agreement shall be binding unless an authorized representative of each party
provides authorization in writing.


 


11.                                 Confidential
Information.  Each party acknowledges
and agrees to the need for the confidential treatment of proprietary
information that may be divulged by one party to the other during the term of
this Agreement.  The parties agree not to
disclose any such confidential information to any third parties except as
required in order to perform any obligations in this Agreement unless directed
in writing to do so by the other party, except as required by law; provided,
however, that this provision shall not prevent disclosure by either party to
any of its affiliates, employees, officers or agents that agree to be bound by
the terms of this Agreement.  For
purposes of this provision, TRT is not considered a third party and disclosure
to TRT as necessary to perform under this Agreement shall not be a breach of
this provision.  This Section 11 shall
survive termination of this Agreement.


 


12.                                 Waiver.  Any waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of the same or any other provision hereof.


 


13.                                 Severability;
Reformation.  In case any one or more
of the provisions or parts of a provision contained in this Agreement shall,
for any reason, be held to be invalid, illegal, unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement.


 


14.                                 Notices.  Any notice or other communication required
hereunder shall be in writing and registered first-class mail, postage prepaid,
return receipt requested, addressed to such entity at the addresses identified
on the first page of this Agreement.


 


15.                                 Governing Law.  This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of Ohio.


 


16.                                 Force Majeure.  Except for obligations of payment, neither
party will be liable to the other party for failure to perform any of its
respective obligations hereunder if such failure results from any cause beyond
the reasonable control of the affected party, including, but not limited to,
acts of God; fire, flood, or other natural catastrophes; laws, orders, rules,
regulations, or directives or actions of governmental authorities having
jurisdiction over any civil military authority; national emergency, riot, act
of terrorism; or labor dispute, work stoppage or other labor disturbance.


 


17.                                 Arbitration.  Any controversy or claim arising out of or
relating to this contract, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration


 


7

















 


Association in accordance with its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.  Such
arbitration shall not preclude either party from seeking prejudgment security
or any other relief in aid of arbitration in any court of competent
jurisdiction.


 


18.                                 Headings and
Captions.  The headings and captions
of the various sections of this Agreement are for convenience of reference only
and shall in no way modify, or affect the meaning or construction of, any of
the terms or provisions hereof.


 


19.                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which shall
be deemed a single agreement.


 


20.                                 Amendment by
Substitution.  By execution of this
document, the parties hereby amend their Prior Agreement, by substituting in
its entirety this Agreement as set out, the Prior Agreement having no further
force or effect, and the parties agreeing to be bound by the foregoing terms
and provisions of this Agreement.


 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed the day
and year first above written.


 


 


	
  WEST CENTRAL
  COOPERATIVE

  	
  PETER CREMER
  NORTH AMERICA, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
     /s/
  NILE RAMSBOTTOM

  	
   

  	
  By

  	
     /s/
  HOWARD M. FINDLEY

  	
   

  
	
   

  	
  Nile D.
  Ramsbottom, Vice President

  	
   

  	
  Howard M.
  Findley, N.A. Sales Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
     /s/
  RAYMOND L. BITZER

  	
   

  
	
   

  	
   

  	
  Raymond L.
  Bitzer, President

  
						



 


8