**Exhibit10.21****ETHANOL PURCHASE AND SALE AGREEMENT****BETWEEN****CARDINAL ETHANOL, LLC****AND****MUREX N.A., LTD.**
 

 
**Table of Contents**        **Page** ARTICLE I DEFINITIONS AND INTERPRETATION  1  ARTICLE II DATE OF FIRST DELIVERY NOTICE  3  Section 2.1 Notice Dates  3  Section 2.2 Production Estimates  3  ARTICLE III TERM; TERMINATION  3  Section 3.1 Initial Term; Renewal  3  Section 3.2 Effective During Initial Term  4  Section 3.3 Termination During Initial Term  4  Section 3.4 Termination By Seller Due To Buyer Insolvency  4  Section 3.5 Termination By Buyer Due to Seller Insolvency  4  Section 3.6 Termination for Intentional Misconduct  4  ARTICLE IV PURCHASE AND DELIVERY OBLIGATIONS  4  Section 4.1 Purchase of Ethanol Production  4  Section 4.2 Access To Delivery Point  4  Section 4.3 Purchase Exclusivity  5  ARTICLE V QUANTITY  5  Section 5.1 Uniform Weekly Deliveries  5  Section 5.2 Quantity Measurement  5  ARTICLE VI QUALITY  5  Section 6.1 Specification Requirement  5  Section 6.2 Insurance  5  Section 6.3 Responsibility For Off-Specification Ethanol  6  Section 6.4 Maintenance of Samples  6  ARTICLE VII PRICE  6  Section 7.1 Determination of Price  6  Section 7.2 Payment of Taxes  7  Section 7.3 Inability to Produce  7  Section 7.4 Price Arbitrage Opportunities  7  ARTICLE VIII TRANSPORTATION AND INSURANCE CHARGES  7  Section 8.1 Transportation of Ethanol; Termination For Breach  7  Section 8.2 Rail Shipment  7  
 

 
**Table of Contents****(continued)**        **Page** ARTICLE IX STORAGE  8  Section 9.1 Storage Capacity  8  ARTICLE X PAYMENTS  8  Section 10.1 Purchase Price  8  Section 10.2 Interest  8  Section 10.3 Audits  8  ARTICLE XI TITLE AND RISK OF LOSS  9  Section 11.1 Transfer of Title  9  Section 11.2 Liability Allocation  9  ARTICLE XII REPRESENTATIONS, COVENANTS AND WARRANTIES  9  Section 12.1 Seller’s Representations, Warranties and Covenants  9  Section 12.2 Buyer’s Representations, Warranties and Covenants  10  ARTICLE XIII FORCE MAJEURE  10  Section 13.1 Force Majeure  10  Section 13.2 Definition  11  Section 13.3 Labor Disputes  11  Section 13.4 Sales during Force Majeure  11  Section 13.5 Exclusions  11  Section 13.6 Claiming Relief  11  Section 13.7 Notice  12  Section 13.8 Termination for Force Majeure  12  ARTICLE XIV LIMITATION OF LIABILITY  12  Section 14.1 Limitation of Liability  12  ARTICLE XV AUDIT RIGHTS  12  Section 15.1 Records  12  Section 15.2 Audit  12  ARTICLE XVI NOTICES  13  Section 16.1 Notices  13  ARTICLE XVII CONFIDENTIAL INFORMATION  14  Section 17.1 Confidential Information  14  
 

 
**Table of Contents****(continued)**        **Page** Section 17.2 Confidential Treatment  14  Section 17.3 Return of Confidential Information  14  Section 17.4 Reasonableness; Injunctive Relief  14  Section 17.5 Disclosure in SEC Filings  15  ARTICLE XVIII INDEMINIFICATION  15  Section 18.1 Indemnification  15  ARTICLE XIX ADDITIONAL PROVISIONS  15  Section 19.1 Default  15  Section 19.2 Non-Waiver of Future Default  16  Section 19.3 Assignment  16  Section 19.4 Documents  16  Section 19.5 Time  16  Section 19.6 Arbitration  16  Section 19.7 Inurement  16  Section 19.8 Entire Agreement  16  Section 19.9 Modification  16  Section 19.10 Governing Law  16  Section 19.11 Compliance with Laws  17  Section 19.12 Severability  17  Section 19.13 Headings  17  Section 19.14 Furnishing of Information  17  Section 19.15 Cumulative Remedies  17  Section 19.16 Faithful Performance  17  Section 19.17 No Partnership  17  Section 19.18 Costs Borne By Each Party  17  Section 19.19 Counterparts  17 
 

 
ETHANOL PURCHASE AND SALE AGREEMENTBETWEENCARDINAL ETHANOL, LLCANDMUREX N.A., LTD.     ThisAgreement is made effective as of December 20, 2006, by and between CardinalEthanol LLC, an Indiana limited liability corporation, having its offices in Winchester, Indiana(“Seller”), and Murex N.A., Ltd., a Texas limited partnership with its principal offices ofbusiness in Addison, Texas (“Buyer”).**RECITALS:**     WHEREAS, Seller intends to build an ethanol production facility in Randolph County,Indiana, which will be owned and operated by Seller.     WHEREAS, Seller has agreed to sell to Buyer, and Buyer has agreed to buy from Seller all(100%) of the Ethanol to be produced from the Randolph County, Indiana facility on the terms andconditions in this Agreement.     NOW THEREFORE this Agreement, in consideration of the promises and mutual covenants andconditions contained herein, Seller and Buyer agree as follows:ARTICLE IDEFINITIONS AND INTERPRETATION     “*Applicability*”. The definitions in this Article apply to this Agreement. Any word, phrase orexpression that is not defined in this Agreement and that has a generally accepted meaning in thecustom and usage in the ethanol industry in the United States shall have that meaning in thisAgreement.     *“Assignment of Contract”*means an assignment of contract related to this Agreement executed bySeller for the benefit of certain of its Funders.     *“ASTM D-4806”*shall be defined on Schedule A.     *“Buyer”*means Murex, N.A. Ltd.; a Texas limited partnership, with the address of 5057 KellerSprings Road, Suite 150, Addison, TX 75001.     *“Commission”*means for each net gallon that Buyer takes under this Agreement; Buyer shallreceive 0.90% of the net purchase price as defined in Section 7.1.     *“Date of First Delivery”*means the date when Ethanol produced at the Plant is available forDelivery to Buyer under this Agreement.
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     *“Delivery”*means the transfer of Ethanol from Seller to the transportation vehicle (rail caror truck) contracted by Buyer at the Delivery Point.     *“Delivery Point”*means the loading of Ethanol at the outlet flange transferring the Ethanolinto rail cars or trucks.     *“Dollars”.*All references to “dollars” in this Agreement shall be references to amountsexpressed in United States currency. All calculations of monetary sums to be hereunder shallbe made in US currency.     *“Effective Date”*means the date set forth in the introductory paragraph of this Agreement.     *“Ethanol”*means the clear odorless liquid produced for use as a motor fuel additive made fromfermented grain being approximately 200 proof alcohol produced by Seller at the Plant.     *“Force Majeure”*has the meaning given in Section 13.2.     *“Forward Contracted Gallons”*means any gallons of Ethanol produced from the Plant for whichBuyer has agreed to resell to third parties pursuant to binding forward delivery contracts.     *“Gallon”*means one U.S. gallon of ethanol ~ 60 degrees F.     *“Initial Term”*has the meaning given in Section 3.1.     *“Plant”*means the Ethanol production plant to be constructed by Seller for the production ofapproximately 100 million Gallons per annum and to be located at Randolph County, Indiana.     *“Prime Commercial Lending Rate”*means the rate of interest most recently publishedin the Money Rate Table of the Wall Street Journal as the prime annual rate of interest.     *“Purchase Price”*has the meaning given in Section 7.1.     *“Renewal Terms”*has the meaning given in Section 3.1.     *“Resale Costs”*means all reasonable and customary costs and charges incurred by Buyer inhandling Gallons received from the Plant (including the cost of any Gallons properly obtained byBuyer pursuant to Section 7.3 herein), without mark-up by Buyer, and without charge for Buyer’sadministrative costs.     *“Sale Price”*has the meaning given in Section 7.1.     *“Schedule”*means Schedule A attached to this Agreement, as it may be amended andrevised from time to time, which shall constitute part of, and shall be included in thisAgreement.
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     *“Seller”*means Cardinal Ethanol, LLC an Indiana limited liability company, with the addressof; 2 OMCO Square, Suite 201 Winchester, IN 47394.     *“Taxes”*has the meaning given in Section 7.2.     *“Total Annual Plant Production”*means the entire production of Ethanol from the Plant, withina 12-month period, which production is estimated but not warranted to be approximately 100 millionGallons and any additional capacity expansion of Ethanol from the Plant in each 12-month period;provided that for the 12-month period beginning on the Date of First Delivery, such production maybe less.     *“Transportation Costs”*means reasonable and customary costs charged by a third party fortransportation from Plant to a buyer’s point of delivery together with insurance and all othercosts and charges incurred to third parties other than Resale Costs in connection with suchtransportation, without mark-up by Buyer, and without charge for Buyer’s administrative costs.ARTICLE IIDATE OF FIRST DELIVERY NOTICE     Section 2.1Notice Dates. Seller shall provide Buyer notice one hundredeighty (180) days prior to the projected Date of First Delivery of Seller’s best estimate of therange of potential dates for Date of First Delivery covering a forty-five (45) day period. Ninety(90) days prior to the anticipated Date of First Delivery, Seller shall provide Buyer with a bestestimate of a projected Date of First Delivery covering a range of thirty (30) days. Forty-five(45) days prior to the projected Date of First Delivery, Seller shall provide Buyer with a bestestimate of a projected Date of First Delivery covering a range of seven (7) days.     Section 2.2Production Estimates. With each notification in Section 2.1,Seller shall provide a best estimate of the amount of Ethanol production on a daily basis for thesix (6) month period following the estimated Date of First Delivery to Buyer. After the Date ofFirst Delivery, Seller shall provide monthly notices to Buyer, by the 20th of each month,estimating the daily production for the next six (6) month period beginning the first monthfollowing the date of the last estimate. Seller shall promptly notify Buyer of any adjustments tothe Ethanol production schedule that has been most recently given to Seller.ARTICLE IIITERM; TERMINATION     Section 3.1Initial Term; Renewal. The initial term of the Agreement shall befor a five (5) year period, beginning on the Date of First Delivery (the “Initial Term”). TheInitial Term shall be followed by renewal terms (the “Renewal Terms”) of one (1) year that renewautomatically unless notice is given by either party at least ninety (90) days prior to the end ofthe current term.
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     Section 3.2Effective During Initial Term. Subject to the conditions of thisAgreement, this Agreement shall be effective for the Initial Term and shall continue after theInitial Term, if renewed as provided in Section 3.1.     Section 3.3Termination During Initial Term. This Agreement may not beterminated during the Initial Term unless pursuant to the provisions of this Agreement and shallotherwise continue after the Initial Term unless (i) terminated pursuant to this Agreement, or (ii)not renewed pursuant to Section 3.1.     Section 3.4Termination By Seller Due To Buyer Insolvency. If Buyer becomesinsolvent or suffers the filing of a petition of bankruptcy, executes an assignment for the benefitof creditors, or becomes the subject of any insolvency proceeding of any nature, then, in additionto any other rights and remedies Seller may have, Seller shall have the right to immediatelyterminate this Agreement by written notice.     Section 3.5Termination By Buyer Due to Seller Insolvency. If Seller (i)becomes insolvent or suffers the filing of a petition of bankruptcy, executes an assignment for thebenefit of creditors, or becomes the subject of any insolvency proceeding of any nature, then, inaddition to any other rights and remedies it may have, shall have the right to immediatelyterminate this Agreement by written notice.     Section 3.6Termination for Intentional Misconduct. If either party engagesin intentional misconduct reasonably likely to result in significant adverse consequences to theother party, the party harmed or likely to be harmed by the intentional misconduct may terminatethis Agreement immediately, upon written notice to the party engaging in the intentionalmisconduct.ARTICLE IVPURCHASE AND DELIVERY OBLIGATIONS     Section 4.1Purchase of Ethanol Production. Subject to the provisions of thisAgreement, Seller shall sell and make available for Delivery and Buyer shall purchase and takeDelivery in accordance with Section 5.1 of one hundred percent (100%) of the Ethanol produced bythe Plant on a daily basis. Notwithstanding the foregoing, if Seller chooses, in its solediscretion, to market and sell Ethanol at a retail fueling station owned by Seller or one of itsaffiliates then Seller shall not be required to make available for Delivery to Buyer any Ethanolsold in that manner.     Section 4.2Access To Delivery Point. Buyer shall be given reasonable accessto the Delivery Point(s) at the Plant during normal business hours upon reasonable prior notice;provided that Buyer’s access shall be without disruption to Seller’s business operations at thePlant. Buyer will provide Seller with delivery schedules and, at the sole cost of Buyer, makearrangements for transportation of the Ethanol. Seller shall handle and supervise the loading andDelivery of Ethanol, prepare Delivery documentation and generally be responsible for alldocumentation and paperwork ancillary to such activities. All equipment necessary to load railcars or trucks at the Delivery Point shall be supplied by Seller without charge to Buyer.
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     Section 4.3Purchase Exclusivity. Subject to Section 4.1, Buyer is obligated,and shall have the exclusive right, to purchase from Seller all Ethanol produced at the Plant. IfBuyer does not purchase and take Delivery of all Ethanol produced at the Plant or does not resellall of the Ethanol produced at the Plant, Buyer shall purchase the Ethanol for its own account.When Buyer’s purchase is for its own account based on the conditions above, such sales shall be atmarket prices agreed upon by Seller and Buyer. For purchases of Ethanol by Buyer for its ownaccount Buyer will be responsible for all storage and other charges (including transportation)after the purchase and Buyer will be entitled to all proceeds obtained from the resale of theEthanol.ARTICLE VQUANTITY     Section 5.1Uniform Weekly Deliveries. Seller shall deliver the Ethanol andBuyer shall take Delivery of Ethanol at the Delivery Point(s) at uniform weekly rates, as nearly aspracticable such that the Ethanol delivered in any one month shall approximately equal one twelfth(1/12th) of Seller’s estimated annual Ethanol production. Buyer shall be obligated to takeDelivery of, and to pay for in accordance with Article 4, all quantities of Ethanol tendered forDelivery by Seller.     Section 5.2Quantity Measurement. The quantity of Ethanol Delivered to Buyerby Seller from the Plant shall be established by outbound meter tickets expressed in nettemperature-corrected Gallons in accordance with standards commonly used within the industry in theUnited States of America. The meter tickets shall be obtained from meters which are certified asof the time of loading and which comply with all applicable laws,rules and regulations.The outbound meter tickets shall be determinative in the absence of manifest error (greater than0.5% variation) of the quantity of Ethanol for which Buyer is obligated to pay pursuant to Section10.1.ARTICLE VIQUALITY     Section 6.1Specification Requirement. Seller shall deliver Ethanol to Buyerunder this Agreement that meets the specifications set forth in “Schedule A”. If any governmententity requires a change in the specifications set forth in Schedule A, Buyer shall notify Sellerof the change in specifications. Seller and Buyer agree to change the specifications of Ethanol inthis Agreement within a reasonable time as agreed to by Buyer and Seller, accordingly, subject toArticle 13.     Section 6.2Insurance. Seller shall arrange and maintain a minimum ofUS$5,000,000 product and commercial general liability insurance and cause Buyer to be designated asloss payee or additional insured as their interests may appear, with waiver of subrogation by theinsurer against Buyer. Seller shall further arrange and maintain employer’s liability insurancemeeting all statutory requirements. In each ease Seller shall provide to Buyer a copy of thecertificate(s) of insurance evidencing the existence of the required insurance. Likewise, Buyer
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shall arrange and maintain a minimum of US $5,000,000 product and commercial general liabilityinsurance and cause Seller to be designated as loss payee or additional insured as their interestsmay appear, with waiver of subrogation by the insurer against Seller. Buyer shall further arrangeand maintain employer’s liability insurance meeting all statutory requirements. In each ease Buyershall provide to Seller a copy of the certificate(s) of insurance evidencing the existence of therequired insurance.     Section 6.3Responsibility For Off-Specification Ethanol. If the EthanolDelivered by Seller does not meet the specifications set forth in Schedule “A” when Delivered bySeller to the transportation vehicles and quality claims arise as a result thereof, such qualityclaims will be administered by Buyer with prior consent of Seller. Such claims shall be solely forSeller’s account and Buyer shall not be responsible in any manner whatsoever for such claims.     Section 6.4Maintenance of Samples. Seller agrees to maintain original sealednumbered samples of all Ethanol after Delivery into transportation vehicles before it leaves theDelivery Point premises. Seller will label these samples to indicate date of shipment and thetruck or rail car number will be included. Seller will retain these samples for three (3) monthsand shall send one such sample to Buyer immediately upon Buyer’s request.ARTICLE VIIPRICE     Section 7.1Determination of Price.     (a) For all sales of Ethanol by Buyer, where Buyer has agreed to sell Ethanol to thirdparty customers, Buyer agrees to pay to Seller for each Gallon of Ethanol Delivered determinedin accordance with Section 5.2 (the “Purchase Price”). The Purchase Price shall be equal to theactual sale price invoiced by Buyer for such Ethanol re-sold by Buyer to such third party customersfor the most recent week (the “Sale Price”) less: (i) all Resale Costs, (ii) Taxes (as defined inSection 7.2) paid by Buyer and (iii) the Commission calculated as 0.90% of the “net” purchase pricewhich is defined as the purchase price after deduction of the amounts set forth in clauses (i) and(ii) of this Section 7.1(a).     (b) Buyer covenants to use its best efforts to obtain for Seller the best Purchase Price thenavailable for Ethanol sales taking into consideration the deduction of all Resale Costs incurred byBuyer for such Ethanol. It will be the responsibility of Buyer to perform all billing in regard tothe sale of Ethanol to third parties, to collect all receivables, to undertake legal collectionprocedures as necessary, and to bear the risk and be responsible for any bad accounts. Buyer shallin no circumstances be obligated to sell Ethanol to any buyer whose creditworthiness isunacceptable to Buyer, provided that if Buyer determines that there are no buyers willing topurchase Ethanol of creditworthiness acceptable to Buyer, then Buyer shall purchase such Ethanolfor its own account in accordance with this Agreement. Seller agrees that its remedies for Buyer’sbreach of its obligation in this paragraph (b) shall include without limitation, the right tospecific performance and the right to terminate this Agreement.
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     Section 7.2 Payment of Taxes. Seller shall pay or cause to be paid all validlevies, assessments, duties, rates and taxes (together “Taxes”) assessed on Ethanol prior to theDelivery of the assessed Ethanol at the Delivery Point. Buyer shall pay or cause to be paid allTaxes imposed on the Ethanol or sale of Ethanol after the Delivery of the Ethanol at the DeliveryPoint. If any Taxes are imposed and paid by Buyer, the Purchase Price shall be reduced by theamount of such Taxes actually paid by Buyer, provided however, if taxes are assessed on a transfermade by Buyer prior to transfer and sale to a third party end-user of the Ethanol, the PurchasePrice shall not be reduced by the Taxes assessed on such prior transfer made by Buyer.     Section 7.3Inability to Produce. In the event Seller’s Plant is unable toproduce sufficient Ethanol quantities to meet Buyer’s sales commitments, which sales commitmentsshall have been previously disclosed to Seller, and such inability to produce is not the result ofForce Majeure, then in such case Buyer may purchase ethanol in the market place at such reasonableprice and in such reasonable quantity as is required to meet its delivery obligations; provided,however, that prior to making such purchases, Buyer shall communicate the terms and conditions ofsuch purchases to Seller and shall obtain the consent of Seller to such purchases which consentshall not be unreasonably withheld. If Buyer does so, and as a result thereof incurs a financialloss, Seller will reimburse Buyer for any such loss. Under such circumstances, if Buyer realizes afinancial gain, it will pay such gain to Seller. Buyer will provide Seller written substantiationof such costs reasonably satisfactory to Seller as soon as practicable.     Section 7.4Price Arbitrage Opportunities. Buyer agrees to promptly notifySeller of any and all price arbitrage opportunities where Seller may benefit from exchanging thirdparty customers with another Ethanol supplier. Notice of the price arbitrage opportunity mustreasonably describe the opportunity to Seller and indicate to Seller the time within which theopportunity must be accepted based on the circumstances of each opportunity. If Seller does notaccept the opportunity within such time as set out by Buyer, the opportunity will be deemedrejected by Seller. If Seller accepts the price arbitrage opportunity and it results in proceedsremaining after all related and unrelated parties have received the agreed upon amounts necessaryto affect the exchange (the “Gain”), the Gain will be shared equally by Buyer and Seller. Buyershall provide Seller with documentation substantiating the calculation of the Gain reasonablysatisfactory to the Seller as soon as practical.ARTICLE VIIITRANSPORTATION AND INSURANCE CHARGES     Section 8.1Transportation of Ethanol; Termination For Breach. Buyer agreesto diligently pursue, secure and maintain all necessary agreements to receive and transport theEthanol from the Delivery Point. Buyer shall be solely responsible for the arrangement oftransportation. Buyer covenants to use its best efforts to obtain the best commercially reasonableprices after considering the price of transportation such that Seller achieves the highest netprice possible after payment for Transportation Costs. Seller agrees that its only remedy forBuyer’s breach of its obligation in the preceding sentence shall be to terminate this Agreement.     Section 8.2Rail Shipment. If the Ethanol is being transported by rail, thecost of rail transportation will include, but not be limited to, all tank car lease agreements,freight from
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Delivery Point to destination, accessorial charges, fuel surcharges and excess empty mileagecharges.ARTICLE IXSTORAGE     Section 9.1Storage Capacity. Seller shall at all times provide storage atthe Plant for Ethanol, in an amount not less than ten (10) days of the Seller’s estimated Ethanolproduction, which is estimated to be 2.7 million gallons.ARTICLE XPAYMENTS     Section 10.1Purchase Price. Buyer shall pay to Seller the net Purchase Pricefor each Gallon of Ethanol Delivered under this Agreement as provided in Section 7.1(a) by directwire transfer or electronic transfer to Seller’s designated bank account. The direct wire transferor electronic transfer to Seller’s designated bank account (“Payment”) shall be made no later thanthe twentieth (20th) day after the Friday of the week in which Seller issues the bill oflading for such Gallons sold and delivered during said week. At the time of each Payment Buyershall forward a statement to Seller setting forth in reasonable detail all third party buyerpurchase terms including without limitation, the quantity of Ethanol sold, the purchase prices, andall Resale Costs, Transportation Costs and commissions directly relating to such third party saleand purchase terms, and the quantity and price of Ethanol purchased by Buyer for its own account(if any). During the first sixty days of the start up of the Plant, the Buyer agrees to pay theSeller as follows: From days 1 to 60, the direct wire transfer or electronic transfer to Seller’sdesignated bank account (“Payment”) shall be made no later than the seventh(7th) day after the Friday of the week in which Seller issues the bill of lading forsuch Gallons sold and delivered during said week. From days 61 to 90, the direct wire transfer orelectronic transfer to Seller’s designated bank account (“Payment”) shall be made no later than thefourteenth (14th) day after the Friday of the week in which Seller issues thebill of lading for such Gallons sold and delivered during said week.     Section 10.2Interest. Subject to Article 13, if any party to this Agreementfails to pay all or any portion of the amount owing by that party when due, such unpaid amount willbear interest at a rate equal to one per cent (1%) per annum above the Prime Commercial LendingRate as reported in the Wall Street Journal calculated daily from the date such amount is duehereunder until the date it is actually paid. Upon failure of a party to pay the unpaid amountincluding interest thereon within ten (10) days after the due date set out in this Agreement, theparty to whom sums are due may upon giving seven (7) days’ notice suspend in whole or in part itsdelivery or acceptance of Ethanol (as the case may be) hereunder until such outstanding amount hasbeen paid in full.     Section 10.3Audits. Any payment made pursuant to this Article will notpreclude a party from subsequently auditing the accounts of the other on a once per year basis orat any
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time upon the occurrence of a default by such other party hereunder, as permitted in thisAgreement.ARTICLE XITITLE AND RISK OF LOSS     Section 11.1Transfer of Title. Delivery occurs when the Ethanol istransferred to the transportation vehicle contracted by Buyer to take Delivery. Title and risk ofloss or damage shall only pass from Seller to Buyer upon Delivery. Until Delivery occurs, Sellershall be deemed to be in control of and in possession of and shall have title to and risk of lossof the Ethanol.     Section 11.2Liability Allocation. Buyer will have no responsibility, orliability with respect to any Ethanol deliverable under this Agreement until Delivery to Buyer asdescribed in Section 11.1.ARTICLE XIIREPRESENTATIONS, COVENANTS AND WARRANTIES     Section 12.1Seller’s Representations, Warranties and Covenants. Sellerrepresents and warrants to Buyer, as of the Effective Date hereof and covenants to Buyer at alltimes during the term of this Agreement, as follows and acknowledges that Buyer is relying uponsuch representations, warranties and covenants in connection with the purchase of Ethanol underthis Agreement:     (a) Subject to any security interest held by Seller’s senior secured lender, Seller has titleto all Ethanol delivered hereunder, it has the right to sell the same to Buyer, and the Ethanol isfree from any liens or encumbrances;EXCEPT AS PROVIDED IN SECTION 12.1(a), AND AS