Exhibit
10.2


 


Pursuant to 17 C.F.R. §
240.24b-2, confidential information (indicated by [***]) has been omitted and
has been filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.


 


ETHANOL PURCHASE
AND SUPPLY AGREEMENT


 


               
THIS ETHANOL PURCHASE AND SUPPLY AGREEMENT (“Agreement”) is made and entered
into as of the day and year set forth above the signatures hereto by and
between Iowa Falls Ethanol Plant, L.L.C., an Iowa limited liability company
(“IFEP”), and Eco-Energy, Inc., a Tennessee corporation (“EEI”).


 


RECITALS:


 


A.                                  
IFEP intends to
construct an ethanol plant to be located in or around Fairbank, Iowa.


 


B.                                    
EEI desires to submit
purchase orders for the entire output of Ethanol (as that term is defined in
Section 1 of this Agreement) to IFEP, and IFEP desires to receive purchase
orders for the entire output of Ethanol from EEI, and if IFEP accepts any such
purchase orders, EEI and IFEP desire to, respectively, purchase and sell the
Ethanol which is the subject of those accepted purchase orders, all upon and
subject to the terms and conditions of this Agreement.


 


NOW, THEREFORE, in
consideration of the Recitals and the mutual agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, IFEP and EEI agree as follows:


 


1.            
Definitions.  The following terms shall have the meanings set forth
below for purposes of this Agreement:


 


(a)           
Accepted Purchase Order.  The term “Accepted Purchase Order” is
defined in Section 3 of this Agreement.


 


(b)          
Affiliate.  The term “Affiliate” shall mean, with respect to either
party to this Agreement, any person that now or hereafter (i) is owned or
controlled, directly or indirectly, by such party, (ii) owns or controls,
directly or indirectly, such party, or (iii) is under common control with such
party.


 


(c)           
Agreement.  The term “Agreement” shall mean this Ethanol Purchase
and Supply Agreement, as the same may be amended from time to time pursuant to
Section 29 of this Agreement.


 


(d)          
EEI.  The term “EEI” shall mean Eco-Energy, Inc., and its permitted
successors and assigns.


 

















 


(e)           
EEI Carrier.  The term “EEI Carrier” is defined in Section 5 of
this Agreement.


 


(f)           
Ethanol.  The term “Ethanol” shall mean the denatured ethanol which
is produced at the Plant.


 


(g)          
IFEP.  The term “IFEP” shall mean Iowa Falls Ethanol Plant, L.L.C.,
and its permitted successors and assigns.


 


(h)          
Impossibility Event.  The term “Impossibility Event” is defined in
Section 27 of this Agreement.


 


(i)            
Plant.  The term “Plant” shall mean the ethanol plant of IFEP to be
located in or around Fairbank, Iowa.


 


(j)            
Production Estimate.  The term “Production Estimate” is defined in
Section 2 of this Agreement.


 


(k)           
Purchase Order.  The term “Purchase Order” is defined in Section 2
of this Agreement.


 


(l)            
Purchase Order Form.  The term “Purchase Order Form” is defined in
Section 4 of this Agreement.


 


(m)          
Purchase Price.  The term “Purchase Price” is defined in Section 9
of this Agreement.


 


(n)          
Rejected Purchase Order.  The term “Rejected Purchase Order” is
defined in Section 3 of this Agreement.


 


(o)          
Specifications.  The term “Specifications” is defined in Section 14
of this Agreement.


 


(p)          
Storage Limit.  The term “Storage Limit” is defined in Section 8 of
this Agreement.


 


(q)          
Substantial Completion Date.  The term “Substantial Completion
Date” shall mean the date on which there is a substantial completion of the
Plant, or the Plant is otherwise found to be substantially completed, as
determined under the agreement between IFEP and the general contractor for the
construction of the Plant.


 


(r)           
Value-Added Transaction.  The term “Value-Added Transaction” is
defined in Section 9 of this Agreement.


 


(s)           
VAT Payment.  The term “VAT Payment” is defined in Section 9 of
this Agreement.


 


2

















 


Other terms utilized in this Agreement may be defined
elsewhere in this Agreement.


 


2.           
Purchase Orders From EEI; Estimated Production of Ethanol.  EEI
shall submit purchase orders (each, a “Purchase Order”) to IFEP for purchases
of the entire output of Ethanol from the Plant, all upon and subject to the
terms and conditions of this Agreement.


 


EEI shall submit Purchase
Orders on such a periodic basis as is necessary to permit IFEP to operate at
and maintain IFEP’s normal, full production capacity schedule and otherwise
with such sufficient advance notice so as to reasonably allow IFEP to determine
that the Storage Limit will not be exceeded and for IFEP to provide the
services required of IFEP under Section 5 of this Agreement.


 


IFEP shall  provide
to EEI, at least four (4) days prior to the first business day of each calendar
week, commencing with the first calendar week which begins after the
Substantial Completion Date, a written estimate (each, a “Production Estimate”)
of IFEP’s estimated production of Ethanol which includes the calendar week in
question.  IFEP may give Production Estimates on a weekly, monthly or
other periodic basis, and IFEP may amend any Production Estimate at any
time.  IFEP will also keep EEI informed on each business day (i.e.,
excluding weekends and IFEP recognized holidays) regarding the Ethanol
inventory at the Plant.  All such Production Estimates and daily
information may be given by IFEP to an EEI Representative (as that term is
defined in Section 25 of this Agreement) designated by EEI by facsimile, or to
such other individual, facsimile number and/or by such other reasonable means
as EEI may designate to IFEP in writing from time to time in accordance with
Section 35 of this Agreement.  The current facsimile number of EEI for
this purpose is set forth below EEI’s signature to this Agreement.


 


The nameplate design
capacity of the Plant will be 100,000,000 gallons of ethanol per year, and the
estimated output of Ethanol from the Plant at full production capacity is
anywhere from approximately 100,000,000 to 110,000,000 gallons per year once
the Plant is at full production capacity.  IFEP currently estimates that
the Plant will commence operations and the production of Ethanol some time
during the month of March, April or May of 2006, and that the Plant could be at
full production capacity within thirty (30) days of the commencement date of
operations at the Plant.  IFEP will keep EEI reasonably apprised of the
estimated date for the Substantial Completion Date, and will give EEI prompt
notice of the actual date of the Substantial Completion Date.


 


IFEP may, in its
discretion, from time to time expand the nameplate design capacity of the
Plant.  IFEP will keep EEI reasonably apprised of the progress of any such
expansion, and IFEP will provide EEI with written notice of the estimated date
on which additional Ethanol will first be available pursuant to any such
expansion at least one hundred eighty (180) days before such date.


 


IFEP shall, however, have
the right to manage its business in all respects and in its discretion, and it
is understood that the total output of Ethanol may vary and shall be determined
by IFEP from time to time, and that no warranty or representation has been made
by IFEP as to 


 


3

















 


the output of Ethanol from the Plant at any given time
or from time to time.  IFEP will, however, fulfill Accepted Purchase
Orders, and will use commercially reasonable efforts to produce the amount of
Ethanol estimated in its Projection Estimates, all upon and subject to the terms
and conditions of this Agreement.  EEI also understands that IFEP may
produce Ethanol in excess of the amounts set forth in IFEP’s Production
Estimates, and EEI will submit Purchase Orders for all Ethanol which may from
time to time be produced at the Plant which is in excess of the amounts set
forth in any Production Estimates, all upon and subject to the terms and
conditions of this Agreement.


 


3.            
Acceptance or Rejection of Purchase Orders by IFEP.  IFEP may
accept or reject each Purchase Order, in whole, but not in part, in IFEP’s
commercially reasonable discretion.


 


IFEP shall attempt to
notify EEI via e-mail (if an e-mail address is provided in the Purchase Order),
or otherwise to any EEI Representative, of whether IFEP accepts or rejects each
Purchase Order within the time period set forth in the Purchase Order.  If
IFEP fails to notify EEI within the time period set forth in the Purchase
Order, however, IFEP shall be deemed to have rejected the Purchase Order in
question.


 


Any Purchase Order which
is accepted by IFEP is referred to in this Agreement as an “Accepted Purchase
Order”.  Any Purchase Order which is rejected by IFEP is referred to in
this Agreement as a “Rejected Purchase Order”.


 


4.            
Additional Terms Regarding Submission of Purchase Orders; Priority of This
Agreement.  A Purchase Order may include a request for the sale of
Ethanol on a one-time basis or on a weekly, monthly, quarterly or other
periodic basis.


 


               
Each Purchase Order shall be placed by EEI properly completing and executing a
purchase order in either the form attached to this Agreement as Exhibit “A” or
Exhibit “B” or another written purchase order form acceptable to IFEP (in any
case, the “Purchase Order Form”), and forwarding the completed and executed
Purchase Order Form to IFEP either (i) in accordance with Section 35 of this
Agreement, or (ii) by e-mail to the attention
of           at           or
to the attention of such other individual or to such other e-mail address as
may be designated by IFEP from time to time in accordance with Section 35 of
this Agreement.


 


               
The Purchase Order contemplated by Exhibit “B” will (or another written
Purchase Order Form acceptable to IFEP may) take the form of EEI submitting to
IFEP a proposed minimum purchase price for Ethanol (the “Posted Price”) which
will be effective for the day, week, month or other period of time set forth in
the Purchase Order Form (in any such case, the “Posted Price Sales Period”),
along with a proposed maximum number of gallons of Ethanol which may be sold at
or above the Posted Price at any time during, and for pick-up by EEI during,
the Posted Price Sales Period.  If IFEP accepts such a Purchase Order, EEI
may sell up to the maximum number of gallons of Ethanol set forth in the
Purchase Order Form at or above the Posted Price at any time during, and for
pick-up by EEI during, the Posted Price Sales Period without further approval
of each such sale by IFEP, but otherwise upon and subject to the terms and
conditions of this Agreement, and each such sale shall also be an Accepted
Purchase Order.


 


4

















 


               
Each Purchase Order placed by EEI by a Purchase Order Form in the form of
Exhibit “A” or another similar written Purchase Order Form acceptable to IFEP
shall be irrevocable by EEI for the Acceptance Period specified in the Purchase
Order, but EEI does not have a binding obligation to purchase any Ethanol
pursuant to said Purchase Order unless EEI is able to enter into an agreement
with a third party for the sale of the Ethanol by EEI to such third party
within one (1) day of IFEP’s acceptance of the Purchase Order in
question.  If EEI does not enter into such agreement within said one (1)
day period, the Purchase Order in question shall automatically become a
Rejected Purchase Order.  EEI shall, however, utilize its best efforts to
enter into such third party sales and to otherwise purchase the Ethanol subject
to each Purchase Order.  Each Purchase Order placed by EEI by a Purchase
Order Form in the form of Exhibit “B” or another similar written Purchase Order
Form acceptable to IFEP shall be irrevocable by EEI for the Acceptance Period
specified in the Purchase Order, but EEI does not have a binding obligation to
purchase any Ethanol pursuant to said Purchase Order unless and until EEI
enters into an agreement with a third party for the sale of the Ethanol by EEI
to such third party during, and for pick-up by EEI during, the Posted Price
Sales Period.  EEI shall, however, utilize its best efforts to enter into
such third party sales and to otherwise purchase the Ethanol subject to each
Purchase Order.  EEI shall provide IFEP with written notice of all sales
by EEI to third parties of Ethanol which is the subject of an Accepted Purchase
Order, which notice may be in the form of loading instructions pursuant to
Section 5 of this Agreement.


 


All Accepted Purchase
Orders are made upon and subject to, and are expressly limited solely to, the
terms and conditions of the corresponding Purchase Order Form and this
Agreement, and IFEP hereby objects to any additional, different or inconsistent
terms which may be set forth in any Purchase Order Form or in any other
document that EEI may at any time submit to IFEP along with any Purchase Order
Form or otherwise, and no such additional, different or inconsistent terms
shall be part of any Accepted Purchase Order or this Agreement or shall
otherwise have any force or effect whatsoever.  Without limiting the
generality of the foregoing, in the event of any inconsistency or conflict
between any terms or conditions of this Agreement and any terms or conditions
of any Purchase Order Form submitted by EEI, the terms and conditions of this
Agreement shall govern and control to the full extent of such inconsistency or
conflict.


 


               
5.             Loading
of Ethanol.  All Ethanol purchased by EEI under this Agreement shall
be made available to EEI at the Plant in gallons which have been temperature
corrected to sixty (60) degrees Fahrenheit.  EEI shall be responsible for
arranging and providing for the pick-up at the Plant of all Ethanol purchased
by EEI under this Agreement by truck carrier or by rail car carrier (in either
case, each an “EEI Carrier”) and for the subsequent delivery of all such
Ethanol by each EEI Carrier to whatever locations are desired by EEI.


 


If delivery of any
Ethanol by EEI will be by truck, the Ethanol will be made available F.O.B. the
Plant and shall otherwise be at EEI’s cost and expense, except only that IFEP
will provide the labor and Plant equipment necessary to load the Ethanol onto
the truck of the EEI Carrier at the Plant.


 


If delivery of any
Ethanol by EEI will be by rail car, the Ethanol will be made available F.O.B.
the Plant and shall otherwise be at EEI’s cost and expense, except only as may
be 


 


5

















 


provided below in this Section and that IFEP will
provide the labor and Plant equipment necessary to load the Ethanol onto the
rail car of the EEI Carrier at the Plant.


 


EEI shall, in
consultation and with the prior approval and agreement of IFEP, (i) estimate
the number of rail cars required to handle the transportation of Ethanol
purchased by EEI pursuant to this Agreement; (ii) negotiate the lease rates and
other terms for the lease or leases of such rail cars (collectively, the “Rail
Car Leases”); and (iii) negotiate the rates and other terms of such rail and
freight contracts as are deemed necessary by EEI and IFEP (collectively, the “Rail
Contracts”).  All Rail Car Leases shall be entered into by, and shall be
in the name of, EEI and EEI shall fully and timely comply with all of the terms
and conditions of the Rail Car Leases, including, without limitation, after any
of the rail cars subject to the Rail Car Leases have been subleased to IFEP as
provided below.


 


EEI agrees to utilize its
best efforts to include terms in each Rail Car Lease which allow for the
assignment of the Rail Car Lease to IFEP or its successors and assigns at any
time and for any reason, without the consent of the lessor.  If a Rail Car
Lease contains such assignment terms, such Rail Car Lease shall be deemed to be
automatically assigned by EEI to IFEP upon any termination of this Agreement
for any reason, including, but not limited to, pursuant to Section 19(b) of
this Agreement.  If a Rail Car Lease does not allow for assignment to
IFEP, the Rail Car Lease must permit the sublease of the rail cars subject to
the Rail Car Lease to IFEP, and in such circumstance, IFEP shall sublease the
rail cars from EEI upon any termination of this Agreement, including, but not
limited to, pursuant to Section 19(b) of this Agreement, upon the same terms
and conditions as are provided in the Rail Car Lease.  All payments required
to be made under a Rail Car Lease after the rail cars subject to the Rail Car
Lease have been subleased to IFEP shall be made by IFEP to EEI, by wire
transfer, within ten (10) days of IFEP’s receipt of an invoice therefor from
EEI, but EEI will not invoice IFEP for any amounts payable under the Rail Car
Lease in question more than ten (10) days in advance of the date such amounts
are due under the Rail Car Lease.  Any such payments which are not made by
IFEP when due shall bear interest at the rate of ten percent (10%) per annum
from the date due until paid.


 


EEI shall in all events
be and remain responsible for any and all breaches of and defaults under any
Rail Car Leases by EEI, including after the rail cars subject to a Rail Car
Lease have been subleased to IFEP as provided above.  EEI will provide
IFEP with a true, correct and complete copy of each Rail Car Lease.


 


All Rail Contracts shall
be in the name of IFEP.


 


All rental and other
amounts payable under the Rail Car Leases shall be timely paid by EEI. 
EEI will, however, invoice IFEP for all such rental and other amounts, and all
such rental and other amounts will be deducted from the next Purchase Price
payable by EEI to IFEP unless IFEP pays such rental and other amounts by wire
transfer within ten (10) days of IFEP’s receipt of the invoice from EEI. 
EEI’s invoice shall include a copy of any invoice received from the lessor
under the Rail Car Lease in question.


 


IFEP will timely pay all
freight and other amounts payable under the Rail Contracts. IFEP will, however,
invoice EEI for all such freight and 


 


6

















 


other amounts, and all such freight and other amounts
shall be payable by EEI by wire transfer within ten (10) days of EEI’s receipt
of IFEP’s invoice.  IFEP’s invoice shall include a copy of any invoice
received from the other party under the Rail Contract in question.


 


As provided above, EEI
shall be responsible for the selection of the EEI Carriers, but IFEP reserves
the right to reject or to revoke any prior approval of any truck or rail car
carrier selected by EEI from time to time upon any reasonable basis and upon
fifteen (15) days notice.


 


EEI shall be responsible
for compliance with all laws, rules, regulations, ordinances and orders
applicable to the delivery, transportation and shipment of all Ethanol.


 


6.            
Title and Risk of Loss.  The title to, and all risk of shipment,
loss, destruction or damage to all Ethanol purchased by EEI shall automatically
pass from IFEP to EEI at the time the Ethanol crosses the loading flange
between the Plant and the truck or the rail car, as the case may be, of the EEI
Carrier.


 


               
7.             Other
Duties of EEI.  EEI will devote its best efforts and such time as is
necessary to diligently market and promote the sale of the entire output of
Ethanol from the Plant.  Without limiting the generality of the foregoing,
EEI agrees as follows:


 


(a)          
EEI shall use its best efforts to achieve the highest price for the Ethanol
available under prevailing market conditions and to enter into Value-Added
Transactions.


 


(b)          
EEI shall comply with all applicable local, provincial, state, federal or other
governmental laws, rules, regulations, ordinances and orders.


 


(c)          
EEI shall promptly notify IFEP of any problems or questions raised by any
customer of EEI with respect to any Ethanol or EEI’s relationship or dealings
with such customer regarding any Ethanol.


 


(d)          
EEI shall advise IFEP of any matter regarding any Ethanol which comes to the
attention of EEI which raises an issue of compliance of the Ethanol with any
applicable local, provincial, state, federal or other governmental laws, rules,
regulations, ordinances or orders.


 


(e)          
EEI shall obtain and continuously maintain in effect any and all governmental
or other consents, approvals, authorizations, qualifications, registrations,
licenses or permits which are necessary or appropriate for EEI to fully and
timely perform all of its services, duties and obligations under this
Agreement.


 


(f)           
EEI shall not engage in any negligent, illegal, deceptive, fraudulent or
misleading acts or omissions in connection with the performance of any
services, duties or obligations under this Agreement, including, without
limitation, providing any deceptive, fraudulent, misleading, false or incorrect
information to IFEP or any customer of EEI.


 


 


7

















 


(g)          
EEI will engage, at the sole cost and expense of EEI, such number of personnel
as are necessary for EEI to timely and fully comply with the terms of this
Agreement.  All such personnel shall be employees, agents or independent
contractors of EEI and not of IFEP, and shall be bound by all of the terms and
conditions of this Agreement.  EEI shall be responsible and liable for
assuring full compliance by all such personnel with all of the terms and
conditions of this Agreement.


 


(h)          
The facilities and equipment which are utilized in connection with any
inventory of Ethanol which is held by EEI from time to time will be of the
nature and quality which are necessary to maintain the quality and condition of
the Ethanol.


 


(i)           
EEI shall have the sole and complete responsibility for the collection of its
accounts (including in all Value-Added Transactions), and no delinquencies in
any of those accounts shall affect EEI’s duty to pay IFEP the Purchase Price
for any Ethanol purchased by EEI pursuant to this Agreement or any VAT
Payments.  All collection steps and procedures which are taken by EEI with
respect to any delinquent account regarding any Ethanol shall be in compliance
with all applicable laws, rules, regulations, ordinances and orders.


 


8.           
Other Duties of IFEP; Storage Limit.  IFEP shall utilize meters at
the Plant that measure both gross and net 60 degrees Fahrenheit temperature
corrected gallons of Ethanol.


 


IFEP shall provide
storage space at the Plant for not less than ten (10) full days of production
of Ethanol (the “Storage Limit”), based on the then current nameplate design
capacity of the Plant.  EEI will immediately notify IFEP in writing (a
“Storage Notice”) in the event EEI determines that EEI will not, for whatever
reason, remove some Ethanol before the Storage Limit is exceeded.  The
giving of a Storage Notice does not, however, establish a waiver of or
otherwise relieve EEI of its duties and obligations under this Agreement. 
If EEI gives IFEP a Storage Notice or otherwise does not remove some Ethanol
before the Storage Limit is exceeded, for whatever reason (including under
Section 27 of this Agreement), then IFEP may, in its discretion, but is not
required to, sell or otherwise dispose of such Ethanol as is necessary to cause
the Storage Limit to not be exceeded.  IFEP’s rights under this paragraph
include the right to sell or otherwise dispose of Ethanol which is the subject
of an Accepted Purchase Order, but only if such Ethanol is not timely removed
by EEI in accordance with this Agreement, in which event the Accepted Purchase
Order may, at IFEP’s option, be terminated by IFEP, without IFEP having any
liability to EEI.


 


IFEP also agrees as
follows:


 


(a)          
IFEP shall comply with all applicable local, provincial, state, federal or
other governmental laws, rules, regulations, ordinances and orders.


 


(b)          
IFEP shall advise EEI of any matter regarding any Ethanol which comes to the
attention of IFEP which raises an issue of compliance of the Ethanol with any
applicable local, provincial, state, federal or other governmental laws, rules,
regulations, ordinances or orders.


 


8

















 


(c)          
IFEP shall obtain and continuously maintain in effect any and all governmental
consents, approvals, authorizations, qualifications, registrations, licenses or
permits which are necessary or appropriate for IFEP to fully and timely perform
all of its services, duties and obligations under this Agreement.


 


(d)          
IFEP shall not engage in any negligent, illegal, deceptive, fraudulent or
misleading acts or omissions in connection with the performance of any
services, duties or obligations under this Agreement, including, without
limitation, providing any deceptive, fraudulent, misleading or false
information to EEI.


 


(e)          
IFEP will engage, at the sole cost and expense of IFEP, such number of
personnel as are necessary for IFEP to timely and fully comply with the terms
of this Agreement.  All such personnel shall be employees, agents or
independent contractors of IFEP and not of EEI, and shall be bound by all of
the terms and conditions of this Agreement.  IFEP shall be responsible and
liable for assuring full compliance by all such personnel with all of the terms
and conditions of this Agreement.


 


9.            
Purchase Price and VAT Payments.  The purchase price for Ethanol
under each particular Accepted Purchase Order shall be the purchase price
specified in the Accepted Purchase Order (in each case, the “Purchase
Price”).  The aggregate Purchase Price payable with respect to all Ethanol
which has been loaded onto the trucks or rail cars of the EEI Carriers by
Sunday of any given week and for which EEI has received a bill of lading and a
certificate of analysis by 11:59 a.m., Plant time, on that Sunday shall be paid
by EEI, in full, in United States dollars, by wire transfer on or before the
next following Thursday.  If EEI has not received a bill of lading and a
certificate of analysis with respect to some Ethanol on or before 11:59 a.m. on
a Sunday, payment for the Ethanol in question shall be made on the next
scheduled Purchase Price payment date which follows the date on which EEI
receives a bill of lading and a certificate of analysis for the Ethanol in
question.


 


The certificate of
analysis shall be in a format mutually agreeable to IFEP and EEI.  EEI
acknowledges and agrees that each such certificate of analysis may or may not
be indicative of any future Ethanol, and that no certificate of analysis is a
representation or warranty by IFEP or otherwise a part of this Agreement.


 


EEI shall also pay to
IFEP, in addition to the Purchase Price, an amount equal to [***] percent
([***]%) of the Net Profit Amounts (as that term is defined below) that are to
be received by EEI in all Value-Added Transactions (as that term is also
defined below).  The term “Value-Added Transaction” means any transaction
entered into by EEI for the sale or other disposition of Ethanol purchased by
EEI pursuant to this Agreement which is different than the transaction that EEI
had originally established or entered into for the sale or other disposition of
such Ethanol by EEI (the “Original Transaction”), and pursuant to which EEI
obtains a net profit which is greater than the net profit that EEI would have
obtained if EEI had sold such Ethanol in strict accordance with the Original
Transaction.  Value-Added Transactions may involve EEI establishing a
different transaction or agreement with the purchaser under the Original
Transaction, or may involve EEI negotiating a buyout from the Original
Transaction, and may include 


 


9

















 


freight savings, swaps, bookouts, time exchanges,
location exchanges, rack pricing and spread differentials.  The term “Net
Profit Amounts” means the difference between the net profit to be received by
EEI pursuant to all Value-Added Transactions and the net profit which EEI was
to receive under the related Original Transactions.  The payments required
to be made by EEI under this paragraph (each, a “VAT Payment”) shall be paid by
EEI quarterly, by wire transfer, within thirty (30) days of the close of each
calendar quarter.  Each VAT Payment shall be accompanied by documentation
evidencing the amount and basis for the VAT Payment in question.  EEI agrees
that the VAT Payments with respect to each calendar year commencing with the
2005 calendar year shall in no event be less than the Minimum VAT Amount (as
that term is defined below), regardless of whether EEI engaged in any
Value-Added Transactions during such calendar year or had sufficient Profit
Amounts during such calendar year, and if the VAT Payments otherwise made by
EEI to IFEP with respect to any calendar year do not equal or exceed the
Minimum VAT Amount, the final VAT Payment by EEI with respect to such calendar
year shall be in such amount as is necessary to cause the aggregate of the VAT
Payments made by EEI to IFEP with respect to that calendar year to equal the
Minimum VAT Amount.  The term “Minimum VAT Amount” means the amount
determined by multiplying (i) the number of gallons of Ethanol purchased by EEI
during the calendar year in question, by (ii) [***]¢.  By way of example,
the Minimum VAT Amount in the event EEI purchases 100,000,000 gallons of
Ethanol during any given calendar year will be $[***].


 


Any Purchase Price or VAT
Payment which is not made by EEI when due shall bear interest at the rate of
ten percent (10%) per annum from the date due until paid.


 


10.          
Monthly Fee to EEI.  IFEP shall pay EEI a monthly fee (the “Monthly
Fee”) for all services and materials provided by EEI pursuant to this Agreement
in an amount determined by multiplying (i) the number of gallons of Ethanol
purchased by EEI during the month in question, by (ii) $[***].  The
Monthly Fee with respect to each month shall be payable, in arrears, on or
before the tenth day following IFEP’s receipt of an invoice therefor from
EEI.  Any Monthly Fee which is not paid by IFEP when due shall bear
interest at the rate of ten percent (10%) per annum from the date due until
paid.  IFEP reserves the right, at its option and in its discretion, to
elect to pay any Monthly Fee by having EEI set off the Monthly Fee against, and
withheld from, the next scheduled Purchase Price to be paid by EEI.  IFEP
may exercise this option from time to time by providing notice thereof to EEI
at any time within six (6) days of IFEP’s receipt of EEI’s invoice for the
Monthly Fee in question.


 


11.          
Expenses of EEI.  Except only as may be otherwise expressly and
specifically provided for herein, EEI shall pay and be solely responsible for
all costs and expenses of any nature whatsoever which are incurred by EEI in
promoting, marketing, selling and delivering the Ethanol and otherwise in
providing any services pursuant to or in performing any duties or obligations
under this Agreement.


 


12.          
Representations of EEI.  EEI represents and warrants to IFEP as
follows, both as of the date of this Agreement and again effective with each
Accepted Purchase Order:


 


10

















 


(a)          
EEI has and shall maintain substantial knowledge of, and contacts and
relationships within, the ethanol industry, and EEI has and shall maintain
substantial expertise in the marketing, sale, distribution and transportation
of ethanol.


 


(b)          
EEI is a corporation duly organized, validly existing and in good standing
under the laws of the State under which EEI was organized, and has and shall
maintain all requisite power and authority to own its property and carry on its
business as now conducted and as to be conducted pursuant to this Agreement.


 


(c)          
This Agreement has been duly authorized, executed and delivered by EEI, and
constitutes the legal, valid and binding obligation of EEI, enforceable in accordance
with its terms.  EEI has and shall maintain all requisite power and
authority to enter into and perform this Agreement, and all necessary actions
and proceedings of EEI have been taken to authorize the execution, delivery and
performance of this Agreement.


 


(d)          
The execution and performance of this Agreement do not and will not conflict
with, breach or otherwise violate any of the terms or provisions of the
organizational or governing documents of EEI or of any agreement, document or
instrument to which EEI is a party or by which EEI or any of its assets or
properties are bound.


 


(e)          
There is no civil, criminal, governmental or other litigation, action, suit,
investigation, claim or demand pending, or, to the knowledge of EEI, threatened
against EEI, which may have a material adverse effect upon the transactions
contemplated by this Agreement or EEI’s ability to perform its duties and
obligations under, or to otherwise comply with, this Agreement.


 


13.          
Representations of IFEP.  IFEP represents and warrants to EEI as
follows, both as of the date of this Agreement and again effective with each
Accepted Purchase Order:


 


(a)          
IFEP is a limited liability company duly organized, validly existing and in
good standing under the laws of the State under which IFEP was organized, and
has and shall maintain all requisite power and authority to own its property
and carry on its business as now conducted and as to be conducted pursuant to
this Agreement.


 


(b)          
This Agreement has been duly authorized, executed and delivered by IFEP, and
constitutes the legal, valid and binding obligation of IFEP, enforceable in
accordance with its terms.  IFEP has and shall maintain all requisite
power and authority to enter into and perform this Agreement, and all necessary
actions and proceedings of IFEP have been taken to authorize the execution,
delivery and performance of this Agreement.


 


(c)          
The execution and performance of this Agreement do not and will not conflict
with, breach or otherwise violate any of the terms or provisions of the
organizational or governing documents of IFEP or of any agreement, document or 


 


11

















 


instrument to which IFEP is a party or by which IFEP
or any of its assets or properties are bound.


 


(d)          
There is no civil, criminal, governmental or other litigation, action, suit,
investigation, claim or demand pending, or, to the knowledge of IFEP,
threatened against IFEP, which may have a material adverse effect upon the
transactions contemplated by this Agreement or IFEP’s ability to perform its
duties and obligations under, or to otherwise comply with, this Agreement.


 


14.          
Limited Warranty.  IFEP represents and warrants to EEI that the
Ethanol sold to EEI pursuant to this Agreement will, in the form as loaded onto
the truck or rail car of the EEI Carrier, meet or exceed (but need not exceed)
the specifications set forth in Exhibit “C” to this Agreement (the
“Specifications”) for a period of ninety (90) days from the date of loading
onto the truck or rail car, as the case may be, of the EEI Carrier at the Plant
(the “Warranty Period”).  The foregoing warranty will automatically be
void if the failure of any Ethanol to meet the Specifications has resulted in
any way from the condition or prior use of the truck or rail car of the EEI
Carrier, any act or omission of the EEI Carrier, EEI’s negligence, or from
accident, abuse, misapplication or an Impossibility Event.


 


If any Ethanol fails to
conform to the warranty set forth above in this Section 14 during the Warranty
Period and EEI provides IFEP, before the close of the Warranty Period, with (i)
written notice of the failure, and (ii) satisfactory written evidence and other
proof of such failure, IFEP will replace the Ethanol, at IFEP’s cost, with
Ethanol which meets or exceeds (but need not exceed) the Specifications within
five (5) business days of IFEP’s receipt of EEI’s written notice and evidence;
provided, however, that in the event IFEP has commitments for the sale of its
entire production and inventory of Ethanol over the next five (5) business day
period, IFEP will reasonably cooperate with EEI to replace the Ethanol in
question with other Ethanol as soon as is commercially practicable.  If
IFEP disagrees with EEI’s written notice or other written evidence, IFEP may
have the Ethanol in question or any samples of the shipment of Ethanol in
question which may have been retained by IFEP tested by an independent
laboratory for verification that the Ethanol did not meet the Specifications
and/or the reasons why the Ethanol did not meet the Specifications.  IFEP
shall bear the costs for any such testing; provided, however, that in the event
the Ethanol in question is found by the independent laboratory to be in
conformance with the Specifications or that the Ethanol failed to meet the
Specifications because of any reason or cause referred to in the first
paragraph of this Section, then EEI shall accept and pay for both the Ethanol
and the replacement Ethanol provided by IFEP, and shall also fully reimburse
IFEP for all costs incurred in connection with the testing of the Ethanol and
the shipping and handling of the replacement Ethanol, all within five (5) days
of the demand therefore by IFEP.  EEI shall reasonably cooperate with IFEP
in the testing of any Ethanol pursuant to this paragraph.


 


15.         
Exclusion of All Other Warranties.  Except only for the limited warranties expressly given
in Section 13 of this Agreement and for the limited warranty expressly given in
the first paragraph of Section 14 of this Agreement, IFEP makes no express
warranties whatsoever regarding any Ethanol or any other thing or matter
whatsoever, and IFEP hereby excludes and disclaims in entirety all implied
warranties whatsoever, including, without


 


12

















 


limitation, the implied warranties of merchantability,
noninfringement and fitness for a particular purpose, with respect to all
Ethanol and all other things or matters whatsoever.


 


16.         
Limitation of Liability; Statute of Limitations.  Neither IFEP nor EEI makes any
warranty, express or implied, to the other of profit or of any particular
economic results from the transactions contemplated by this Agreement. 
Under no circumstances or theories shall IFEP or EEI be liable to the other for
any lost profits, business or goodwill, or for any exemplary, special,
incidental, consequential, punitive or indirect damages whatsoever, which are
in any way related to or connected with or arise out of this Agreement (and
even if IFEP or EEI, as the case may be, knew or should have known of the
possibility of any of those damages), including, without limitation, to, with
or out of any performance or nonperformance of any Ethanol or by EEI or IFEP,
or EEI’s use of or inability to use any Ethanol (whether alone or in connection
with or as part of other goods or products) or any other goods or products for
any reason and for any purpose whatsoever; provided, however, that the
foregoing shall not be applicable to, and neither IFEP nor EEI waive any losses
or damages that result or arise from, any breach of Sections 23 or 24 of this
Agreement, or any negligent or reckless act or omissions of, or willful
misconduct by, the other.  Any claim, suit or action for any breach or
nonfulfillment of or default under any term or condition of this Agreement must
be commenced within two (2) years of the date the cause of action accrued, or
such claim, suit or action shall be lost and forever barred.


 


IFEP and EEI each also
hereby absolve and release the other from, and agree to refrain from seeking
any claims, suits, actions or remedies whatsoever against the other for, any
and all losses, claims, damages, costs, suits and liabilities for deterioration
of quality, shrinkage in quantity, or loss of grade of Ethanol resulting from
the inherent nature of loading operations and the inherent nature of Ethanol,
provided, however, that this paragraph is in no way intended or shall be interpreted
to relieve either IFEP or EEI for their own negligence, willful misconduct or
theft.


 


17.          
Insurance.  At all times during the term of this Agreement, EEI
will maintain in full force and effect a policy or policies of commercial
general liability insurance with combined single limits of not less than
$2,000,000.  EEI shall provide evidence of such insurance to IFEP upon the
request of IFEP from time to time.


 


At all times during the
term of this Agreement, IFEP will maintain in full force and effect a policy or
policies of commercial general liability insurance with combined single limits
of not less than $2,000,000.  IFEP shall provide evidence of such
insurance to EEI upon the request of EEI from time to time.


 


18.         
Grant of Security Interest by EEI.  EEI hereby grants to IFEP a
security interest in and to all of the Ethanol which is at any time sold by
IFEP to EEI, with such security interest to secure payment of all amounts
payable by EEI to IFEP under this Agreement and the performance of all of the
other duties and obligations of EEI under this Agreement, whether now existing
or hereafter arising.  EEI will be in breach of and default under the
security interest granted by this Section upon the failure to make any payment,
when due and payable, of any amounts payable under this Agreement, or upon the
breach or nonfulfillment of or default under 


 


13

















 


any other term or condition of this Agreement. 
After the occurrence of any such breach, nonfulfillment or default, IFEP may
exercise at any time and from time to time any and all rights and remedies
available to a secured party under applicable law.


 


19.          
Term and Termination.  The term of this Agreement shall commence on
the date hereof and shall continue thereafter until the date which is one (1)
year after the Substantial Completion Date (the “Initial Term”), and shall be
automatically renewed thereafter for successive terms of two (2) years each
(each, a “Renewal Term”), unless either IFEP or EEI provides the other with
written notice of its desire to not renew this Agreement, for any reason or for
no reason, at least forty-five (45) days prior to the close of the Initial Term
or the Renewal Term then in effect or this Agreement is earlier terminated
pursuant to any other provision of this Agreement.


 


This Agreement may or
will be, as the case may be, terminated in accordance with any of the
following:


 


(a)          
This Agreement may be terminated by IFEP at any time, with or without cause,
for any reason or for no reason, effective ninety (90) days following the
giving of written notice thereof to EEI by IFEP.


 


(b)         
This Agreement may be terminated by IFEP or by EEI in the event of any breach
or nonfulfillment of or default under any term or condition of this Agreement
by the other, which breach, nonfulfillment or default is not fully cured within
twenty (20) days, or eight (8) days in the event of nonpayment of an amount
due, following the giving of written notice thereof to the breaching party by
the nonbreaching party; provided, however, that this Agreement may be
terminated by IFEP or by EEI, as the case may be, effective upon the giving of
written notice pursuant to this subparagraph (b), and without any opportunity
for cure by the other, if they have previously provided the other with bona
fide written notices pursuant to this subparagraph (b) on at least three (3) or
more prior occasions during the Initial Term or the Renewal Term then in
effect.


 


(c)          
This Agreement may be terminated by IFEP or by EEI, effective upon the giving
of written notice thereof to the other, in the event of the dissolution or
liquidation of, termination of existence of, insolvency of, business failure
of, appointment of a receiver of or for any part of the property of, assignment
for the benefit of creditors by, or the commencement of any proceeding (whether
voluntary or involuntary) under any bankruptcy, insolvency, debtor/creditor,
receivership or similar or related law by or against the other, and which
proceeding is not dismissed within sixty (60) days of the commencement thereof.


 


(d)          
This Agreement may be terminated by IFEP or by EEI if such termination is
required by any governmental or regulatory authority, and any such termination
shall be effective on the earlier of:  (i) the date required by such
governmental or regulatory authority, or (ii) the thirtieth day following the
giving of written notice of termination pursuant to this subparagraph (d) by IFEP
or EEI, as the case may be, to the other.


 


14

















 


20.         
Transactions Upon and After Termination.  In addition to any other
provisions hereof addressing the rights or obligations of IFEP or EEI upon or
after the termination of this Agreement, IFEP and EEI agree that upon the
termination of this Agreement, for whatever reason or no reason:


 


(a)          
IFEP shall satisfy and fulfill any Purchase Orders which became Accepted
Purchase Orders before the earlier of (i) the giving of any notice pursuant to
Section 19 of this Agreement, or (ii) the effective date of the termination of
this Agreement; provided, however, that IFEP shall not be obligated to fill any
Accepted Purchase Order in the event of the giving of any notice by IFEP
pursuant to, or the termination of this Agreement by IFEP pursuant to, Section
19(b) or Section 19(c) of this Agreement, and any such Accepted Purchase Orders
which IFEP determines, in its sole discretion, not to fill shall be deemed to
be canceled and terminated and IFEP shall have no responsibility or liability
therefor.


 


(b)         
EEI shall satisfy and comply with any Purchase Orders which became Accepted
Purchase Orders before the earlier of (i) the giving of any notice pursuant to
Section 19 of this Agreement, or (ii) the effective date of the termination of
this Agreement; provided, however, that EEI shall not be obligated to purchase
according to any Accepted Purchase Order in the event of the giving of any
notice by EEI pursuant to, or the termination of this Agreement by EEI pursuant
to, Section 19(b) or Section 19(c) of this Agreement, and any such Accepted
Purchase Orders which EEI determines, in its sole discretion, not to comply
with shall be deemed to be canceled and terminated and EEI shall have no
responsibility or liability therefor, and IFEP shall be free to sell or
otherwise dispose of the Ethanol which was subject to such Accepted Purchase
Orders.


 


(c)          
All amounts owing by IFEP to EEI, or by EEI to IFEP, under this Agreement,
shall be paid in full by IFEP to EEI or by EEI to IFEP, as the case may be, by
the earlier of (i) the normal and ordinary course payment date as otherwise
provided in this Agreement, or (ii) the date which is ten (10) days following
the effective date of the termination of this Agreement.


 


The termination of this
Agreement, for whatever reason or for no reason, shall not affect any liability
or obligation of IFEP or EEI hereunder which shall have accrued prior to or as
a result of such termination, including, but not limited to, any liability for
loss or damage on account of breach, nor shall the termination of this
Agreement, for whatever reason or for no reason, affect the terms or provisions
hereof which contemplate performance by or continuing obligations of IFEP
and/or EEI beyond the termination hereof, including, without limitation, the
respective obligations of IFEP and EEI under Sections 23 and 28 of this
Agreement.


 


21.          
Additional Rights of IFEP and EEI.  Notwithstanding anything in
this Agreement which may appear to be to the contrary, IFEP reserves the right
to reject Purchase Orders and to withhold fulfilling any and all Accepted
Purchase Orders during any period of time that EEI is in breach or
nonfulfillment of or default under any payment term or payment condition of
this Agreement.  IFEP also reserves the right to terminate or withhold
fulfilling any Accepted Purchase Order under the circumstances and as provided
in Sections 8 and 20(a) of this Agreement, as well as all rights under the
applicable Uniform Commercial Code, including, without limitation, the right to
demand and receive adequate assurances of performance by EEI.


 


Notwithstanding anything
in this Agreement which may appear to be to the contrary, EEI reserves the
right to not submit Purchase Orders and to withhold purchasing under any and
all Accepted Purchase Orders during any period of time that IFEP is in breach
or nonfulfillment of or default under any payment term or payment condition of
this Agreement.  EEI also reserves the right to terminate or not be
obligated to purchase according to any Accepted Purchase Order under the
circumstances and as provided in Section 20(b) of this 


 


15

















 


Agreement, as well as any rights under the applicable
Uniform Commercial Code, including, without limitation, any right to demand and
receive adequate assurances of performance by IFEP.


 


22.          
All Rights Reserved by IFEP and EEI.  IFEP and EEI each reserve all
of their respective patent, copyright, trade secret, trademark, service mark,
proprietary or confidential information, and intellectual property rights, and
this Agreement does not grant either party any license, right to use or other
right, title or interest in or to any patents, copyrights, trade secrets,
trademarks, service marks, proprietary or confidential information, or
intellectual property rights or properties whatsoever of the other party,
except only to the limited extent that the use of proprietary or confidential
information may be expressly permitted under Section 23 of this Agreement.


 


23.          
Confidential Information.  IFEP and EEI acknowledge that they may
have access to certain proprietary or confidential information of the other and
that such information constitutes valuable, special and unique property of the
other.  IFEP and EEI agree that they will not, at any time during the term
of this Agreement or for a period of five (5) years after the termination of
this Agreement (whether this Agreement is terminated by IFEP or EEI and with or
without cause, for any reason or for no reason), in any fashion, form or
manner, either directly or indirectly, use for their own or another’s benefit,
or divulge, disclose or communicate to any person in any manner whatsoever, any
such proprietary or confidential information; provided, however, that (i) IFEP
may make disclosures regarding this Agreement and the transactions contemplated
hereby to the extent IFEP deems necessary or appropriate or as may be required
in connection with any debt or equity financing or insurance coverage as may
from time to time be pursued or obtained by IFEP or any Affiliate of IFEP,
including to prospective or actual lenders and investors and to actual or
potential assignees or transferees of any such lender or in connection with a
foreclosure, assignment in lieu of foreclosure or other exercise of any rights
or remedies by any such lender; (ii) EEI may make disclosures regarding this
Agreement and the transactions contemplated hereby to the extent EEI deems
necessary or appropriate or as may be required in connection with any debt or
equity financing or insurance coverage as may from time to time be pursued or
obtained by EEI or any Affiliate of EEI, including to prospective or actual
lenders and investors and to actual or potential assignees or transferees of
any such lender or in connection with a foreclosure, assignment in lieu of
foreclosure or other exercise of any rights or remedies by any such lender;
(iii) IFEP and EEI may make disclosures regarding this Agreement and the
transactions contemplated hereby to their respective legal counsel and
accountants; and (iv) the reasonable use of any proprietary or confidential
information as part of or in connection with the transactions contemplated by
this Agreement during the term of this Agreement is permitted.


 


 


16

















 


For purposes of this
Agreement, the term “proprietary or confidential information” shall mean all
information, documentation or financial data which is proprietary or
confidential in nature and which is used by or belongs or relates to IFEP or
EEI, as the case may be, and which is disclosed or made available to or
otherwise obtained by the other, its employees or agents, and includes but is
not limited to, the prices charged for services hereunder or any other
information concerning the other’s business, manner of operation, plans,
processes or other data of any kind.  “Proprietary or confidential
information” shall not include, however, any of the following information
and/or types of information:  (i) information of IFEP or EEI, as the case
may be, that at the time furnished to the other is in the public domain or
later becomes part of the public domain by publication or otherwise through no
fault of the other or its employees or agents; (ii) information of IFEP or EEI,
as the case may be, that was independently developed by the other by persons
without access to or knowledge of, or any use of, the proprietary or
confidential information of IFEP or EEI, as the case may be; or (iii)
information of IFEP or EEI, as the case may be, that was obtained by the other
on a nonconfidential basis from a person entitled to disclose the information.


 


               
If the proprietary or confidential information of IFEP or EEI, as the case may
be, is required to be disclosed by the other by court order, governmental
action, legal process or applicable law, such party shall, if legally
permissible, first give written notice thereof to the other party whose
confidential information is to be disclosed and reasonably cooperate with such
party (at such party’s cost and expense) in such party’s attempt to obtain a
protective order or waiver or exclusion from the court or other applicable
governmental or other authority or law.


 


               
IFEP and EEI agree that the other would be irreparably damaged by reason of
their violation of any of the provisions contained in this Section 23 and that
any remedy at law for a breach of such provisions would be inadequate, and that
they shall each be entitled to seek injunctive or other equitable relief in a
court of competent jurisdiction against the other or its employees or agents
for any breach or threatened breach of any of the provisions contained in this
Section 23 without the necessity of proving actual monetary loss or posting any
bond or other form of collateral or security.  It is expressly understood
that the remedy described in this Section 23 shall not be the exclusive remedy
for any breach of this Section 23.


 


               
Nothing in this Section 23 is intended or shall be construed as requiring
either IFEP or EEI to furnish any proprietary or confidential information to
the other, except only to the limited extent, if any, as may be necessary for
the other to perform and provide its services and duties under this Agreement.


 


24.          
Noncompete Covenant.  EEI covenants and agrees that during the term
of this Agreement, EEI will not, directly or indirectly, become an investor in
or provide any services, goods or materials to or for, or otherwise become
interested, associated or concerned in any way in or with, any ethanol plant
which is located anywhere within a [***] mile radius of the location of the
Plant, other than an ethanol plant owned or operated by IFEP or an Affiliate of
IFEP.  IFEP’s remedies upon a breach or imminent breach of this Section
include the right to preliminary and permanent injunctive relief restraining
EEI from any further violation of this Section, and without the posting of any
bond or other form of collateral or security.  


 


17

















 


EEI acknowledges and warrants that enforcement of a
remedy by way of injunction will not prevent EEI from earning a livelihood or
work an undue hardship on EEI, and that injunctive relief is necessary and
appropriate to protect the justifiable business interests of IFEP. 
Notwithstanding the foregoing, IFEP acknowledges that this Section 24 does not
limit or prohibit EEI from purchasing ethanol from, or providing marketing
services to, the plant owned by [***] which is located in or around [***],
[***], and that this Section 24 does not limit or prohibit EEI from (i)
entering into Value Added Transactions with plants that are located within the
[***]-mile radius specified above, or (ii) making isolated, opportunistic
purchases from time to time of ethanol from a plant otherwise located in the
[***]-mile radius specified above.


 


               
25.           IFEP and EEI
Representative.  IFEP shall designate to EEI in writing one or more
representatives of IFEP through whom all contacts from EEI pursuant to this
Agreement may be made, and, unless otherwise specified in this Agreement, each
such representative shall be deemed to have full authority to make all
decisions and to resolve all matters, disputes and issues under this Agreement
on IFEP’s behalf.  IFEP may change its representative or representatives
from time to time for any reason or no reason, effective upon the giving of
written notice to EEI.


 


               
EEI shall designate to IFEP in writing one or more representatives of EEI
(each, an “EEI Representative”) through whom all contacts from IFEP pursuant to
this Agreement may be made, and, unless otherwise specified in this Agreement,
each such representative shall be deemed to have full authority to make all
decisions and to resolve all matters, disputes and issues under this Agreement
on EEI’s behalf.  EEI may change its representative or representatives from
time to time for any reason or no reason, effective upon the giving of written
notice to IFEP.


 


26.          
Nature of Relationship; Authority of Parties.  Nothing contained in
this Agreement and no action taken or omitted to be taken by IFEP or EEI pursuant
hereto shall be deemed to constitute IFEP and EEI a partnership, an
association, a joint venture or other entity whatsoever.  This Agreement
is not intended and shall not be construed to constitute IFEP or EEI to be an
agent of the other or to cause IFEP or EEI to be responsible in any way for the
acts, omissions, debts, liabilities or obligations of the other (including,
without limitation, any liability arising from any negligent or other acts or
omissions of the other). Neither IFEP nor EEI have the authority to bind the
other in any respect whatsoever.  Without limiting the generality of the
foregoing, neither IFEP nor EEI have any responsibility for the completion or
performance of the other’s contracts and agreements with their customers, suppliers
or other persons.


 


27.          
Impossibility.  Notwithstanding anything in this Agreement which
may appear to be to the contrary, if any term or condition of this Agreement to
be performed or observed by IFEP or EEI (except for payment obligations and under
Sections 23 and 24) is rendered impossible of performance or observance due to
any force majeure or any other act, omission, matter, circumstance, event or
occurrence beyond the reasonable control of IFEP or EEI, as the case may be
(each, an “Impossibility Event”), IFEP or EEI, as the case may be, shall, for
so long as such Impossibility Event exists, be excused from such performance or
observance, provided that the affected party notifies the other in writing
within twenty-four (24) hours of the occurrence of the Impossibility Event and
takes all appropriately reasonable steps as soon as reasonably practicable upon
the termination of the Impossibility Event to recommence performance or
observance; provided, however, that if after forty-five (45) days from the
onset 


 


18

















 


of the Impossibility Event, IFEP or EEI is still
unable to perform their obligations hereunder, either IFEP or EEI may, in their
respective discretion, terminate this Agreement effective upon the giving of
written notice thereof to the other.  The term “Impossibility Event”
includes, without limitation, fire, storm, flood, earthquake, acts of God,
civil disturbances or disorders, an actual or threatened act or acts of war, an
actual or threatened act or acts of terrorism, computer failures, computer
viruses, acts of computer hackers, sabotage, strikes, lockouts, labor disputes,
labor shortages, stoppages or slowdowns initiated by labor, transportation
embargos, failure or shortage of supplies or materials, accidents, equipment or
mechanical failures, or acts or regulations or priorities of any governmental
authority or branches or agencies thereof.


 


28.
          Indemnification. 
Subject to the limitation of EEI’s liability under Section 16 of this
Agreement, EEI shall defend, indemnify, and hold IFEP harmless from and against
any loss, claim, liability, damage, cost or expense (including, without
limitation, attorneys’ fees and court costs) arising in connection with or
resulting from (i) EEI’s marketing, sale or use of Ethanol and any other goods
or products, and/or (ii) any breach or nonfulfillment of or default under any
term or condition of this Agreement on the part of EEI (or any employee, agent
or other personnel of EEI).


 


Subject to the exclusions
and limitations on EEI’s remedies and on the liability of IFEP as provided in
Sections 14, 15 and 16 of this Agreement, IFEP shall defend, indemnify and hold
EEI harmless from and against any loss, claim, liability, damage, cost or expense
(including, without limitation, attorneys’ fees and court costs) arising in
connection with or resulting from any breach or nonfulfillment of or default
under any term or condition of this Agreement on the part of IFEP (or any
employee, agent or other personnel of IFEP).


 


29.          
No Waiver; Modifications in Writing.  No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.  Except as may be
otherwise expressly provided herein (including, without limitation, as provided
in Sections 14, 15 and 16 of this Agreement), the remedies provided herein are
cumulative and are not exclusive of any remedies that may be available to any
party at law or in equity or otherwise.  No amendment, modification,
supplement or waiver of or to any provision of this Agreement, or consent to
any departure therefrom, shall be effective unless the same shall be in writing
and signed by each of the parties hereto.  Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given.


 


              
30.           Governing
Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of Iowa, but without regard to provisions thereof
relating to conflicts of law.


 


31.          
Consent to Jurisdiction.  Each of the parties submits to the
nonexclusive jurisdiction of any United States or Iowa court sitting in Des
Moines, Iowa in any action or proceeding arising out of or relating to this
Agreement.  Each party agrees that all claims and 


 


19

















 


counterclaims with respect to any such action or
proceeding may be heard and determined in any such courts, and waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any such action or proceeding in any such
courts.  Each of the parties consents to the service of any and all
process in any such action or proceeding by the personal service of copies of
such process to the party, at its address specified for notices to be given
hereunder.


 


32.          
Waiver of Jury Trial.  Each of the parties hereby unconditionally waives any right
to a jury trial with respect to and in any action, suit, proceeding, claim,
counterclaim, demand, dispute or other matter whatsoever arising out of this
Agreement.


 


33.          
Assignment.  Neither IFEP nor EEI shall have the right to assign
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld, delayed or conditioned; provided, however,
that IFEP may, without the consent of EEI, (i) assign its rights and
obligations under this Agreement to any Affiliate of IFEP or in connection with
any sale of all or substantially all of the assets of IFEP, and (ii) assign
this Agreement as security, collateral or otherwise to any lender of IFEP or
any Affiliate of IFEP, and any such lender may in turn assign this Agreement
upon any foreclosure or other exercise of any rights or remedies against IFEP
or any Affiliate of IFEP.  IFEP will, however, provide EEI with written
notice of any such assignment by no later than five (5) business days after the
effective date of the assignment.


 


34.          
Binding Effect on Successors and Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, legal representatives and assigns.  Nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto (and their respective successors, legal representatives and
assigns) any rights, remedies, liabilities or obligations under or by reason of
this Agreement.


 


               
35.           Giving of
Notice.  Except as may be otherwise provided in this Agreement, all notices,
demands, requests, and other communications desired or required to be given
hereunder  (“Notices”) shall be in writing and shall be given by: (i) hand
delivery to the address for Notices; (ii) delivery by overnight courier service
to the address for Notices; or (iii) sending the same by United States mail,
postage prepaid, certified mail, return receipt requested, addressed to the
address for Notices.


 


              
All Notices shall be deemed given and effective upon the earlier to occur of:
(i) the hand delivery of such Notice to the address for Notices; (ii) one (1)
business day after the deposit of such Notice with an overnight courier service
by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three (3) business days after depositing the Notice in the
United States mail as set forth above in this Section 35.  All Notices
shall be addressed to the addresses set forth below the signatures to this
Agreement, or to such other person or at such other place as any party hereto
may by Notice designate as a place for service of Notice.


 


36.          
Severability.  If any term of this Agreement is held to be invalid,
illegal or unenforceable, in whole or in part, the remaining terms of this
Agreement will not be affected 


 


20

















 


thereby and will continue to be valid, legal and
enforceable.  If any term of this Agreement is held to be invalid, illegal
or unenforceable as written, but valid, legal and enforceable if modified, then
such term shall be deemed to be written and construed, and shall be enforced,
as so modified.  Any finding of invalidity, illegality or unenforceability
in any jurisdiction shall not invalidate or render illegal or unenforceable
such term in any other jurisdiction.  Without limiting the generality of
the foregoing, each term of this Agreement which provides for a limitation of
remedies or liability, disclaimer or exclusion of warranties, or exclusion or
limitation of damages is subject to this Section.  Further, if any remedy
is determined to have failed of its essential purpose or otherwise, all
limitations of liability and exclusions and limitations of damages provided for
in this Agreement will remain in full force and effect.


 


               
37.           Entire
Agreement.  This Agreement, all exhibits and schedules hereto, and,
subject to Section 4 of this Agreement, each Purchase Order Form for each
Accepted Purchase Order, constitute the entire agreement between the parties
hereto pertaining to the subject matters hereof, and supersede all
negotiations, preliminary agreements and all prior or contemporaneous
discussions and understandings of the parties hereto in connection with the
subject matters hereof.  No course of dealing or usage of trade shall be
relevant or admissible to supplement or vary any of the terms of this
Agreement.  All exhibits and schedules to this Agreement are incorporated
into this Agreement as if set forth in their entirety and constitute a part
hereof.


 


38.          
Miscellaneous.  The titles or captions of sections and paragraphs
in this Agreement are provided for convenience of reference only and shall not
be considered a part hereof for purposes of interpreting or applying this
Agreement, and such titles or captions do not define, limit, extend, explain or
describe the scope or extent of this Agreement or any of its terms or
conditions.  This Agreement shall not be construed more strongly against
any party, regardless of who was more responsible for its preparation. 
Words and phrases herein shall be construed as in the singular or plural number
and as masculine, feminine or neuter gender, according to the context. 
The use of the words “herein,” “hereof,” “hereunder” and other similar
compounds of the word “here” refer to this entire Agreement and not to any
particular section, paragraph or provision.  The term “person” and words
importing persons as used in this Agreement include firms, associations,
partnerships, limited partnerships, joint ventures, trusts, corporations and
other legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.  This Agreement may be
executed by the parties hereto on any number of separate counterparts
(including by facsimile or e-mail transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same agreement.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the 15th
day of November, 2004.


    



	
  IOWA FALLS
  ETHANOL PLANT, L.L.C.

  	
   

  	
  ECO-ENERGY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Russell
  Stidolph

  	
   

  	
  By: 

  	
  /s/ Larry
  Beckwith

  
	
  Name: 

  	
  Russell Stidolph

  	
   

  	
  Name: Larry
  Beckwith

  
	
  Title: 

  	
  Manager

  	
   

  	
  Title: President

  
	
   

  	
   

  	
  730 Cool Springs Blvd.,
  Suite 130

  
	
  Address

  	
   

  	
  Franklin, TN 37067

  
	
  21050 140th Street

  	
   

  	
  Facsimile Number:

  	
   

  
	
  Iowa Falls, IA 50126

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


21

















 


Exhibit
A -             Fixed Ethanol Purchase
Order Form [Section 4]


Exhibit
B -              Posted Price Ethanol
Purchase Order Form [Section 4]


Exhibit
C -              Specifications [Section
14]


 

















 


EXHIBIT
A


 


ECO-ENERGY,
INC.


FIXED
ETHANOL  PURCHASE ORDER


Dated:  _____________________, 20___


 


                Eco-Energy, Inc. (“EEI”) hereby
submits this Purchase Order for Ethanol to Iowa Falls Ethanol Plant, L.L.C.
(“IFEP”) pursuant to that certain Ethanol Purchase and Supply Agreement between
EEI and IFEP dated as of ___________________, 200__ (as the same may be
amended, the “Agreement”).


 


1.             Aggregate Gallons of Ethanol:                                              _____________________
gallons


 


2.             Pick Up Dates for Ethanol (strike out all that do not
apply):


 


(a)           ______________ gallons of Ethanol on the _____ day of each
month commencing on _____________, ________ and continuing up to and including
_____________, ______.


 


(b)           _____________ gallons of Ethanol on each of _______________,
______;  ______________, ______;  _______________, ______;  and _______________, ______.


 


(c)           All of the Ethanol on _______________, ______.


 


(d)           Other: __________________________________.


 


3.             Minimum Purchase Price for Ethanol: ____________________


 


4.             Time Period for Acceptance of this Purchase Order (the
“Acceptance Period”): 
_____________________________.


 


This Purchase Order is irrevocable for the Acceptance Period or until
the time at which this Purchase Order becomes a Rejected Purchase Order as
provided in the Agreement.  EEI does not,
however, have a binding obligation to purchase any Ethanol pursuant to this
Purchase Order unless EEI is able to enter into an agreement with a third party
for the sale of the Ethanol by EEI to such third party within one (1) day of
IFEP’s acceptance of this Purchase Order.


 


This Purchase Order is subject to acceptance by IFEP as provided in the
Agreement and is otherwise tendered and made subject to and upon all of the
terms and conditions of the Agreement.


 


	
   

  	
  ECO-ENERGY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
  E-Mail
  Address:

  	
   

  
						



 


 


2

















 


 


ACCEPTANCE
OR REJECTION


 


                This Purchase Order is
accepted/rejected (strike out and initial the one that does not apply) by Iowa
Falls Ethanol Plant, L.L.C., subject to and upon all of the terms and
conditions of the Agreement.


 


	
   

  	
  IOWA
  FALLS ETHANOL PLANT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							



 


3

















 


EXHIBIT
B


 


ECO-ENERGY,
INC.


POSTED
PRICE ETHANOL  PURCHASE ORDER


Dated:  _____________________, 20___


 


                Eco-Energy, Inc. (“EEI”) hereby
submits this Purchase Order for Ethanol to Iowa Falls Ethanol Plant, L.L.C.
(“IFEP”) pursuant to that certain Ethanol Purchase and Supply Agreement between
EEI and IFEP dated as of ___________________, 200__ (as the same may be
amended, the “Agreement”).


 


1.             Maximum Aggregate
Gallons of Ethanol:                            _____________________
gallons


 


2.             Pick Up Dates for Ethanol (strike
out all that do not apply):


 


(a)           ______________ gallons of Ethanol on the _____ day of each
month commencing on _____________, ________ and continuing up to and including
_____________, ______.


 


(b)           _____________ gallons of Ethanol on each of
_______________, ______;  ______________,
______;  _______________, ______;  and _______________, ______.


 


(c)           All of the Ethanol on _______________, ______.


 


(d)           Other: __________________________________.


 


3.             Minimum Purchase Price for the
Ethanol (the “Posted Price”): ____________________


 


4.             Time Period Over Which the Posted Price Will Be
Effective (the “Posted Price Sales Period”): 
_____________________________.


 


5.             Time Period for Acceptance of this Purchase Order (the
“Acceptance Period”): 
_____________________________.


 


This Purchase Order is irrevocable for the Acceptance Period or until
the time at which this Purchase Order becomes a Rejected Purchase Order as
provided in the Agreement.  EEI does not,
however, have a binding obligation to purchase any Ethanol pursuant to this
Purchase Order unless and until EEI enters into an agreement with a third party
for the sale of the Ethanol by EEI to such third party during, and for pick-up
by EEI during, the Posted Price Sales Period.


 


This Purchase Order is subject to acceptance by IFEP as provided in the
Agreement and is otherwise tendered and made subject to and upon all of the
terms and conditions of the Agreement.


 


	
   

  	
  ECO-ENERGY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
  E-Mail
  Address:

  	
   

  
							



 


 


4

















 


ACCEPTANCE
OR REJECTION


 


                This Purchase Order is
accepted/rejected (strike out and initial the one that does not apply) by Iowa
Falls Ethanol Plant, L.L.C., subject to and upon all of the terms and
conditions of the Agreement.


 


	
   

  	
  IOWA
  FALLS ETHANOL PLANT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							



 


5

















 


 





 


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