EXHIBIT 10.2


 


EXECUTION COPY


 


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


 


AGREEMENT AND OMNIBUS AMENDMENT


 


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


 


RECITALS


 


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


 


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


 


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


 


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


 


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


 


SECTION 1


DEFINITIONS


 


1.1                                 Defined Terms.  Capitalized terms used in this Omnibus
Agreement which are defined in the preamble and Recitals will have the meanings
given them in the preamble and the Recitals. 
Other capitalized terms used in this Omnibus Agreement shall have the
meanings given such terms in the PTE-Cargill Agreements.  In addition, the following terms shall have
the meanings set forth below:


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


(j)                                     “Margin”
shall mean 3.0%.


 


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


 


SECTION 2


AMENDMENTS
TO PTE-CARGILL AGREEMENTS


 


2.1                                 Amendment to
Master Agreement.  PTE and
Cargill hereby agree to amend the Master Agreement as follows:


 


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


 


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


 


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


 


(d) Aggregate
Exposure of Cargill.  It is the
Parties’ intent that at no time during the term of this Master Agreement will
the Aggregate Exposure of Cargill exceed the amount owed by Cargill to
Producer.  However, if the Aggregate Exposure
of Cargill should at any time exceed the amount owed by Cargill to Producer,
then Cargill shall be entitled, in its sole discretion, to (i) withhold
payments to Producer in an amount equal to the difference between the Aggregate
Exposure of Cargill and the amount owed by Cargill to Producer (the “Uncovered
Exposure”); (ii) unwind hedge positions, if any, consistent with the terms
of the Risk Advisory Agreement and/or the Corn Advisory Agreement in an amount
equal to the Uncovered Exposure; and/or


 


3

















 


(iii) require
Producer to provide a letter of credit or cash deposits acceptable to Cargill
as security for the Uncovered Exposure; provided, that a letter of credit shall
be deemed acceptable to Cargill if such letter of credit (A) is issued by
a financial institution or other Person whose long-term senior unsecured debt
is rated at least “A-” by Standard & Poor’s Corporation or “A3” by
Moody’s Investors Service, Inc., (B) names Cargill, Incorporated as
beneficiary and (C) contains such other terms and provisions as are
reasonably satisfactory to Cargill. 
Cargill agrees to take such actions as may be reasonably requested by
Producer from time to time to terminate or reduce the stated amount of any such
letter of credit, and to terminate Cargill’s security interest with respect to
any such cash deposits, in each case, to the extent that such reduction or
termination does not result in any Uncovered Exposure.


 


(c) in Section 11(a),
the definition of “Aggregate Exposure of Cargill” shall be deleted in its
entirety and replaced with the following:


 


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


 


(d)                                 the following
shall be added to Section 11(a):


 


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


 


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


 


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


 


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


 


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


 


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


 


4

















 


2.2                                 Amendment to
Corn Supply Agreement.  PTE
and CI hereby agree to amend the Corn Supply Agreement as follows:


 


(a)                                  Section 13(b)(i) shall
be deleted in its entirety and replaced with the following:


 


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


 


(b)                                 in Section 13(b)(ii),
in each instance the words “Payment Deadline” appear, such words shall be
deleted and replaced with the following: “Payment
Date (or, with respect to payment of amounts deferred by Producer as
contemplated by Section 13(d), the Concessionary Payment Date).”


 


(c)                                  the following
shall be added as Section 13(d):


 


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


 


(d)                                 the following
shall be added as Section 13(e):


 


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


 


2.3                                 Amendment to
PTE Lease.  PTE and CI
hereby agree to amend the PTE Lease as follows:


 


(a)                                  in Section 3.01,
the words “During the Term” shall
be deleted in their entirety and replaced with the words “Subject to Section 3.05, during the Term”.


 


(b)                                 the following
shall be added as Section 3.05:


 


5

















 


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


 


2.4                                 Amendment to
Ethanol Marketing Agreement.  PTE and CI hereby agree to amend the Ethanol
Marketing Agreement as follows:


 


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


 


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


 


(b)                                 in Section 3.3,
immediately following the first parenthetical, the following shall be added: “(excluding any such Contract Year which includes all
or any portion of the Concessionary Period)”.


 


(c)                                  the following
shall be added as Section 3.5:


 


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


 


(d)                                 on the first page of
Exhibit A, in the seventh (7th) line, after the words “Gross Proceeds less
Cargill Commission”, the following shall be added “(except any portion of such
Cargill Commission that is deferred by Cargill pursuant to Section 3.5)”.


 


(e)                                  on the first page of
Exhibit B, in the sixth (6th) line, after the words “Gross Proceeds less
Cargill Commission”, the following shall be added “(except any portion of such
Cargill Commission that is deferred pursuant to Section 3.5)”.


 


6
















 


2.5                                 Amendment to DG
Agreement.  PTE and CI
hereby agree to amend the DG Agreement as follows:


 


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


 


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


 


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


 


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


 


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


 


(d)                                 Exhibit A
shall be deleted in its entirety and replaced with Exhibit A
attached hereto.


 


SECTION 3


CONCESSION
TERMS


 


3.1                                 Deferral
Payments.


 


(a)                                  The Parties
agree that, after giving effect to the amendments set forth herein, Deferred
Corn Supply Payments (as defined in the Corn Supply Agreement), Deferred Rent
Payments (as defined in the PTE Lease), Deferred Ethanol Commission Payments
(as defined in the Ethanol Marketing Agreement) and Deferred DG Commission
Payments (as defined in the DG Agreement) (such deferred amounts, in the
aggregate, the “Deferred Payment”) shall each bear interest at the
applicable Eurodollar Rate plus the Margin, during each interest period, from
the date such amounts are deferred under the respective PTE-Cargill Agreement
until (but excluding) the date such amounts are paid to Cargill.


 


(b)                                 Within five (5) Cargill
Working Days after the end of each calendar month, Cargill will send an invoice
electronically to PTE setting forth the amount of any interest


 


7

















 


that has accrued in respect
of the Deferred Payment for such month (“Deferral Interest Invoice”).  Any failure by Cargill to send a Deferral
Interest Invoice does not in any way affect the amount of any interest that has
accrued in respect of the Deferred Payment for such month.  Within five (5) Cargill Working Days
after Cargill’s transmission of the Deferral Interest Invoice, PTE shall pay to
Cargill the amount set forth in any such Deferral Interest Invoice for such
prior month.


 


(c)                                  For the
avoidance of doubt, notwithstanding anything to the contrary herein or in any
of the PTE-Cargill Agreements, PTE shall have the right at any time, and from
time to time, to prepay, without premium or penalty hereunder, all or any
portion of the Deferred Payment.


 


3.2                                 Clarification
of Setoff Rights.


 


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


 


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


 


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


 


8

















 


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


 


3.3                                 Restrictions on
Payments.  BLE, PTE
and any parent or affiliated company shall not declare or pay any dividend,
distribution, or return of capital prior to the expiration of the term of the
Concessionary Period.  For the avoidance
of doubt, the previous sentence shall not be construed to affect the ability of
PTE to make payments of principal and interest in the ordinary course of
business to its secured creditors.


 


3.4                                 Accounting and
Audit Rights.  Without
limiting the obligations of PTE in the Master Agreement (including, without
limitation, Section 10(q) thereof), during the Concessionary Period, (a) PTE
shall provide to Cargill copies of all financial statements, financial
forecasts, financial models, business plans, material correspondence, and
operations reports (“Information”) furnished by PTE or its
representatives to its other lenders and trade creditors, (b) PTE shall
furnish the Information to Cargill at the same time such Information is
furnished to PTE’s other lenders and trade creditors, (c) PTE shall from
time to time provide Cargill with such financial information and copies of
relevant forbearance and stand-still agreements as Cargill may request and (d) Cargill
and its accounting firm shall have the right, from time to time and at Cargill’s
expense, to audit PTE’s books, records, and financial statements.


 


3.5                                 Effectiveness.  This Omnibus Agreement shall become effective
on the date on which PTE provides evidence to Cargill that the execution and
delivery of this Omnibus Agreement by PTE and Cargill has been consented to in
writing by the Financing Parties under the construction, term and working
capital credit facility led by BNP Paribas, as administrative agent and by
Deutsche Bank Trust Company Americas or any applicable assignee or successor,
as collateral agent (such date, the “Concession Effective Date”).


 


SECTION 4


DEFAULT & REMEDIES


 


4.1                                 PTE Default.  Each of the following shall constitute an
event of default on the part of PTE (a “PTE Event of Default”) under
this Omnibus Agreement:


 


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


 


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


 


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


 


9

















 


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


 


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


 


4.2                                 Remedies.  If a PTE Event of Default occurs for any
reason and is continuing, in addition to such other rights and remedies Cargill
may have under the PTE-Cargill Agreements, the Omnibus Agreements or applicable
law, Cargill may, upon written notice to PTE, terminate the Concessionary
Period and exercise all rights and remedies available to it under the
PTE-Cargill Agreements and this Omnibus Agreement; provided, that, upon
the occurrence of a PTE Event of Default as described in Section 4.1(d),
no such notice shall be required to be delivered.  Upon any termination of the Concessionary
Period pursuant to this Section 4.2, the full amount of the
Deferred Payment, together with any interest that has accrued in respect of the
Deferred Payment, shall become immediately due and payable.


 


SECTION 5


MISCELLANEOUS


 


5.1                                 Representations
and Warranties.  Each of the
Parties hereto represents and warrants as to itself that (a) the
execution, delivery and performance by such Party of this Omnibus Agreement has
been duly and validly authorized by all necessary action and (b) this
Omnibus Agreement has been duly and validly executed and delivered by such
Party and constitutes the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms.


 


5.2                                 Costs and
Expenses.  Without
duplication of the obligations of BLE under Section 5.2 of the BLE Omnibus
Agreement, PTE agrees to pay or reimburse Cargill for all of its documented
out-of-pocket costs and expenses incurred in connection with the preparation
and execution of this Omnibus Agreement and any other documents prepared in
connection therewith, and the consummation and administration of the
transactions contemplated thereby, including the reasonable fees and
disbursements of counsel to Cargill.


 


5.3                                 Limited
Amendment.  The
amendments set forth herein shall be effective only in the specific instances
described herein and nothing herein shall be construed to limit or bar any
rights or remedies of the Parties to the PTE-Cargill Agreements.  For the avoidance of doubt and without
limiting the generality of the foregoing, the Parties agree that no other
change, amendment or consent with respect to the terms and provisions of any of
the PTE-Cargill Agreements is intended or contemplated hereby (which terms and
provisions remain unchanged and in full force and effect other than as
expressly set forth herein).


 


5.4                                 No Amendments.  No amendment of modification of all or any
part of this Omnibus Agreement shall be effective unless in writing and signed
by each of the Parties.


 


5.5                                 Counterparts.  This Omnibus Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any Party to this Omnibus Agreement may execute this
Omnibus Agreement by signing any such counterpart; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signatures are physically attached to the same
counterpart.


 


10

















 


5.6                                 Severability.  Any provision of this Omnibus Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions of this Omnibus Agreement; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.


 


5.7                                 Headings.  Headings herein are for convenience only and
shall not be relied upon in interpreting or enforcing this Omnibus Agreement.


 


5.8                                 Choice of Law.  This Omnibus Agreement shall for all purposes
be governed by, and construed in accordance with, the laws of the State of New
York excluding choice of law principles or such laws which would require the
application of the laws of a jurisdiction other than the State of New York.


 


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


 


11

















 


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


 


 


	
   

  	
  PIONEER TRAIL ENERGY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARGILL, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARGILL COMMODITY SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


12

















 


EXHIBIT A


 


Terms relating to payment and commission calculation


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


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


 


14