Amended Purchase and Sale Agreement


    AMENDED
      AND RESTATED

    ETHANOL
      PURCHASE AND SALE AGREEMENT

    


     

     

    by
      and between

     

     

    FRONT
      RANGE ENERGY, LLC

     

     

    and

     

     

    KINERGY
      MARKETING, LLC

     

    


     

     

    Dated
      as of August 9, 2006

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

     

    
      	 	Page 
	
              ARTICLE
                I DEFINITIONS; INTERPRETATION

            	
              1

            
	
                  1.1

            	
              Definitions

            	
              1

            
	
                  1.2

            	
              Interpretation

            	
              4

            
	
              ARTICLE
                II MARKETING ACTIVITIES

            	
              5

            
	
                  2.1

            	
              Marketing
                and Purchase of Ethanol

            	
              5

            
	
                  2.2

            	
              Direct
                Purchases

            	
              6

            
	
                  2.3

            	
              Bilateral
                Transactions

            	
              6

            
	
                  2.4

            	
              Storage

            	
              8

            
	
                  2.5

            	
              Obligations
                of the Project Company

            	
              8

            
	
                  2.6

            	
              Title;
                Delivery Point; Nominations; Measurement

            	
              9

            
	
              ARTICLE
                III PAYMENTS

            	
              9

            
	
                  3.1

            	
              Fees
                and Payments

            	
              9

            
	
                  3.2

            	
              Overdue
                Payments; Indemnity Payments

            	
              10

            
	
                  3.3

            	
              Billing
                Dispute

            	
              10

            
	
                  3.4

            	
              Audit

            	
              10

            
	
              ARTICLE
                IV TERM; TERMINATION

            	
              11

            
	
                  4.1

            	
              Term.

            	
              11

            
	
                  4.2

            	
              Termination
                by Kinergy

            	
              11

            
	
                  4.3

            	
              Termination
                by the Project Company

            	
              11

            
	
                  4.4

            	
              Change
                of Control

            	
              12

            
	
                  4.5

            	
              Effect
                of Termination

            	
              12

            
	
              ARTICLE
                V LIMITATIONS ON LIABILITY

            	
              13

            
	
                  5.1

            	
              Maximum
                Liability of Kinergy

            	
              13

            
	
                  5.2

            	
              No
                Consequential or Punitive Damages

            	
              13

            
	
              ARTICLE
                VI INDEMNIFICATION

            	
              13

            
	
                  6.1

            	
              The
                Project Company’s Indemnity

            	
              13

            
	
                  6.2

            	
              Kinergy’s
                Indemnity

            	
              14

            
	
              ARTICLE
                VII REPRESENTATIONS AND WARRANTIES

            	
              14

            
	
                  7.1

            	
              Kinergy’s
                Representations and Warranties

            	
              14

            
	
                  7.2

            	
              The
                Project Company’s Representations and Warranties

            	
              15

            
	
              ARTICLE
                VIII FORCE MAJEURE

            	
              16

            
	
                  8.1

            	
              Definition

            	
              16

            
	
                  8.2

            	
              Effect

            	
              16

            
	
                  8.3

            	
              Limitations

            	
              16

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      


      
        	
                ARTICLE
                  IX DISPUTE RESOLUTION

              	
                17

              
	
                    9.1

              	
                Attempts
                  to Settle

              	
                17

              
	
                    9.2

              	
                Resolution
                  by Expert

              	
                17

              
	
                    9.3

              	
                Arbitration

              	
                17

              
	
                    9.4

              	
                Consequential
                  and Punitive Damages

              	
                18

              
	
                    9.5

              	
                Finality
                  and Enforcement of Decision

              	
                18

              
	
                    9.6

              	
                Costs

              	
                18

              
	
                    9.7

              	
                Continuing
                  Performance Obligations

              	
                18

              
	
                ARTICLE
                  X CONFIDENTIALITY

              	
                18

              
	
                ARTICLE
                  XI ASSIGNMENT AND TRANSFER

              	
                19

              
	
                ARTICLE
                  XII FURTHER ASSURANCES; REQUESTS OF FINANCING PARTIES

              	
                19

              
	
                    12.1

              	
                Further
                  Assurances

              	
                19

              
	
                    12.2

              	
                Requests
                  of Financing Parties

              	
                19

              
	
                ARTICLE
                  XIII MISCELLANEOUS

              	
                19

              
	
                    13.1

              	
                Amended
                  Agreement; Entire Agreement

              	
                19

              
	
                    13.2

              	
                Counterparts

              	
                19

              
	
                    13.3

              	
                Survival

              	
                20

              
	
                    13.4

              	
                Severability

              	
                20

              
	
                    13.5

              	
                Governing
                  Law

              	
                20

              
	
                    13.6

              	
                Binding
                  Effect

              	
                20

              
	
                    13.7

              	
                Notices

              	
                20

              
	
                    13.8

              	
                Amendment

              	
                22

              
	
                    13.9

              	
                No
                  Implied Waiver

              	
                22

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    AMENDED
      AND RESTATED

     

    ETHANOL
      PURCHASE AND SALE AGREEMENT

     

    This
      AMENDED AND RESTATED ETHANOL PURCHASE AND SALE AGREEMENT (“Amended
      Agreement”)
      is
      entered into by and between FRONT
      RANGE ENERGY, LLC,
      a
      Colorado limited liability company (the “Project
      Company”),
      and
      KINERGY MARKETING, LLC, an Oregon limited liability company (“Kinergy”),
      as of
      this 9th day of August, 2006. The Project Company and Kinergy are each
      individually referred to herein as a “Party”,
      and
      collectively are referred to herein as the “Parties”.

     

    RECITALS

     

    A. The
      Project Company has completed the development of an approximately 40 million
      gallon-per-year denatured fuel ethanol production facility in Windsor, Colorado
      (the “Facility”).

     

    B. On
      July
      31, the Parties entered into that certain Ethanol Marketing Agreement (the
      “Agreement”)
      pursuant to which Kinergy agreed to provide denatured fuel ethanol marketing
      services for the Facility.

     

    C. Subsequent
      to the signing of the Agreement, and prior to the date on which the Facility
      commenced operations, the Parties agreed upon certain modifications to their
      business arrangements as represented by the Agreement, and agreed to amend
      the
      Agreement to conform to their new arrangements.

     

    B. Kinergy
      desires purchase and sell ethanol in accordance with and subject to the terms
      and conditions of this Amended Agreement and has done so since prior to the
      time
      that the Facility commenced operations.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in
      consideration of the agreements and covenants hereinafter set forth, and
      intending to be legally bound, the Parties hereto covenant and agree as
      follows:

     

    ARTICLE
      I

     

    DEFINITIONS;
      INTERPRETATION

     

    1.1
       Definitions.

     

    The
      following terms shall have the meanings set forth below when used in this
      Amended Agreement:


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Account”
has
      the
      meaning given to such term in Section
      2.1(d).

     

    “Act
      of
      Insolvency”
means,
      with respect to any Person, any of the following: (a) commencement by such
      Person of a voluntary proceeding under any jurisdiction’s bankruptcy, insolvency
      or reorganization law; (b) the filing of an involuntary proceeding against
      such
      Person under any jurisdiction’s bankruptcy, insolvency or reorganization law
      which is not vacated within 60 days after such filing; (c) the admission by
      such
      Person of the material allegations of any petition filed against it in any
      proceeding under any jurisdiction’s bankruptcy, insolvency or reorganization
      law; (d) the adjudication of such Person as bankrupt or insolvent or the winding
      up or dissolution of such Person; (e) the making by such Person of a general
      assignment for the benefit of its creditors (assignments for a solvent financing
      excluded); (f)
      such
      Person fails or admits in writing its inability to pay its debts generally
      as
      they become due; (g) the appointment of a receiver or an administrator for
      all
      or a substantial portion of such Person’s assets, which receiver or
      administrator, if appointed without the consent of such Person, is not
      discharged within 60 days after its appointment; or (h) the occurrence of any
      event analogous to any of the foregoing with respect to such Person occurring
      in
      any jurisdiction.

     

    “Affiliate”
means,
      with respect to any Person, any other Person directly or indirectly controlling
      or controlled by or under direct or indirect common control with such Person.
      For purposes of this definition, “control”, when used with respect to any
      Person, means the power to direct or cause the direction of the management
      and
      policies of such Person, directly or indirectly, whether through the ownership
      or voting securities, by contract or otherwise.

     

    “Agreement”
has
      the
      meaning given to such term in the preamble
      hereto.

     

    “Amended
      Agreement”
has
      the
      meaning given to such term in the preamble
      hereto.

     

    “Bilateral
      Transaction”
means,
      with respect to each sale of Ethanol produced at the Facility by Project
      Company, a transaction entered into by Kinergy with one or more Third Parties
      consisting of one or more forward sales of Ethanol.

     

    “Business
      Day”
means
      any day other than a Saturday, Sunday or a day on which commercial banks in
      Denver, Colorado are required or authorized to be closed.

     

    “Commercial
      Operations Date”
means
      the date of “Substantial Completion” under and as defined in the Construction
      Agreement.

     

    “Construction
      Agreement”
means
      the Design-Build
      Agreement, dated March 24th
      2005, by
      and between Project Company and
      Contractor, including all amendments thereto and all other agreements by and
      between Project Company and Contractor for the engineering, procurement and
      construction of the Facility.

     

    “Contractor”
means
      ICM, a Kansas LLC.

     

    “Direct
      Purchase”
has
      the
      meaning given to such term in Section
      2.1(b).


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Dispute”
means
      a
      dispute, controversy or claim.

     

    “Ethanol”
means
      denatured fuel ethanol produced by the Facility satisfying the American Society
      for Testing and Materials (ASTM) D4806 specifications for denatured fuel
      ethanol.

     

    “Expert”
means
      an expert having sufficient technical expertise to address the matter subject
      to
      a Dispute.

     

    “Facility”
has
      the
      meaning given to such term in the recitals
      hereto.

     

    “Financing
      Documents”
means
      any and all loan agreements, credit agreements, reimbursement agreements, notes,
      indentures, bonds, security agreements, pledge agreements, mortgages, guarantee
      documents, intercreditor agreements, subscription agreements, equity
      contribution agreements and other agreements and instruments relating to the
      financing (or refinancing) of the development, engineering, design,
      construction, operation, ownership and maintenance of the Facility.

     

    “Financing
      Parties”
means
      the banks, lenders, noteholders and/or other financial institutions (or an
      agent
      or trustee thereof) party to the Financing Documents.

     

    “Force
      Majeure Event”
has
      the
      meaning set forth in Section
      8.1.

     

    “Good
      Industry Practice”
means
      any of the practices, methods and acts engaged in or approved by a significant
      portion of the ethanol production or marketing (as the case may be) industry
      during the relevant time period, or any of the practices, methods and acts
      which, in the exercise of reasonable judgment in light of the facts known at
      the
      time the decision was made, could have been expected to accomplish the desired
      result at a reasonable cost consistent with good business practices,
      reliability, safety and expedition. Good Industry Practice is not limited to
      a
      single, optimum practice, method or act to the exclusion of others, but rather
      is intended to include acceptable practices, methods or acts generally accepted
      in the region.

     

    “Governmental
      Authority”
means
      any United States federal, state, municipal, local, territorial, or other
      governmental department, commission, board, bureau, agency, regulatory
      authority, instrumentality, judicial or administrative body.

     

    “Incentive
      Fee”
means,
      for each Payment Period and with respect to Kinergy, the product of (a) 1.0%
      multiplied
      by
      (b) the
      difference between (i) the aggregate amount of the Purchase Price associated
      with all Bilateral Transactions for such Payment Period minus (ii)
      the
      aggregate amount of Transaction Costs associated with all Bilateral Transactions
      for such Payment Period.

     

    “Kinergy”
has
      the
      meaning given to such term in the preamble
      hereto.

     

    “Kinergy
      Indemnified Person”
has
      the
      meaning given to such term in Section
      6.2.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Law”
means
      any law, statute, act, legislation, bill, enactment, policy, treaty,
      international agreement, ordinance, judgment, injunction, award, decree, rule,
      regulation, interpretation, determination, requirement, writ or order of any
      Governmental Authority.

     

    “Liabilities”
has
      the
      meaning given to such term in Section
      6.1.

     

    “Material
      Bilateral Transaction”
means
      any Bilateral Transaction having a term in excess of one-year or pursuant to
      which the aggregate gross payments reasonably anticipated to be made by the
      applicable Third Party to Kinergy thereunder exceed $10,000,000 per
      calendar year. 

     

    “Monthly
      Date”
means
      the last Business Day of each calendar month.

     

    “Party”
or
      “Parties”
has
      the
      meaning given to such term in the preamble
      hereto.

     

    “Payment
      Period”
has
      the
      meaning given to such term in Section
      3.1(a).

     

    “PEI”
has
      the
      meaning given to such term in the recitals
      hereto.


     

    “Permits”
means
      all permits, authorizations, registrations, consents, approvals, waivers,
      exceptions, variances, orders, judgments, written interpretations, decrees,
      licenses, exemptions, publications, filings, notices to and declarations of
      or
      with, or required by, any Governmental Authority, or required by any Law, and
      shall include all environmental and operating permits and licenses that are
      required for the full use, occupancy, zoning and operation of the
      Facility.

     

    “Person”
means
      and includes natural persons, corporations, limited liability companies, limited
      partnerships, general partnerships, joint stock companies, joint ventures,
      associations, companies, trusts, banks, trust companies and other organizations,
      whether or not legal entities, Governmental Authorities and any other
      entity.

     

    “Prime
      Rate”
means
      the rate per annum listed as the “Prime Rate” in the “Money Rates” section of
      The Wall Street Journal from time to time.

     

    “Project
      Company”
has
      the
      meaning given to such term in the preamble
      hereto.

     

    “Project
      Company Indemnified Person”
has
      the
      meaning given to such term in Section
      6.1.

     

    “Purchase
      Price”
means,
      subject to Section 3.1(a), the aggregate amount of gross payments received
      (or
      deemed received) by Kinergy during such Payment Period from the applicable
      Third
      Parties in respect of such Bilateral Transactions.

     

    “Third
      Party”
means
      any Person (other than PEI or a subsidiary thereof) that enters into a Bilateral
      Transaction with Kinergy.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Transaction
      Costs”
means,
      for each Payment Period and with respect to Kinergy, all reasonable,
      out-of-pocket and documented costs and expenses (other than taxes on net income,
      business taxes paid by Kinergy, or tax on the sale of Ethanol (such sales taxes
      to be paid directly by the Project Company), but including all other taxes
      and
      governmental charges and assessments) incurred by or on behalf of Kinergy in
      connection with all Bilateral Transactions pursuant to this Amended Agreement
      during such Payment Period, including truck, rail and terminal costs for the
      transportation and storage of the applicable Ethanol to the applicable Third
      Party and reasonable, documented out-of-pocket expenses incurred in connection
      with the negotiation and documentation of the applicable sales agreement between
      Kinergy and the applicable Third Parties.

     

    1.2
       Interpretation

     

    The
      following interpretations and rules of construction shall apply to this Amended
      Agreement:

     

    (a)
       titles
      and headings are for convenience only and will not be deemed part of this
      Amended Agreement for purposes of interpretation;

     

    (b)
       unless
      otherwise stated, references in this Amended Agreement to “Sections” or
“Articles” refer, respectively, to Sections or Articles of this Amended
      Agreement;

     

    (c)
       “including”
      means “including, but not limited to”, and “include” or “includes” means
“include, without limitation” or “includes, without limitation”;

     

    (d)
       “hereunder”,
      “herein”, “hereto” and “hereof”, when used in this Amended Agreement, refer to
      this Amended Agreement as a whole and not to a particular Section or clause
      of
      this Amended Agreement;

     

    (e)
       in
      the
      case of defined terms, the singular includes the plural and vice
      versa;

     

    (f)
       unless
      otherwise indicated, all accounting terms not specifically defined shall be
      construed in accordance with generally accepted accounting practices in the
      United States;

     

    (g)
       unless
      otherwise indicated, each reference to a particular Law is a reference to such
      Law as it may be amended, modified, extended, restated or supplemented from
      time
      to time, as well as to any successor Law thereto;

     

    (h)
       unless
      otherwise indicated, references to agreements shall be deemed to include all
      subsequent amendments, supplements and other modifications thereto;
      and

     

    (i)
       unless
      otherwise indicated, each reference to any Person shall include such Person’s
      successors and permitted assigns.

     


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    PURCHASE
      TRANSACTIONS AND MARKETING ACTIVITIES

     

    2.1
       Marketing
      and Purchase of Ethanol

     

    (a)
       Subject
      to the terms hereof, the Project Company hereby grants Kinergy the exclusive
      right to market and sell, or to purchase for Kinergy’s own account, all of the
      Project Company’s Ethanol (which, as of the date hereof, is estimated to be
      approximately 35 million gallons-per-year). The Project Company hereby grants
      Kinergy the power and authority necessary to perform its obligations and
      exercise its rights hereunder.

     

    (b)
       All
      purchases and sales of Ethanol pursuant to this Amended Agreement shall take
      place in one of the two following ways:

     

    (i)
       Direct
      purchases for the account of Kinergy, in accordance with Section
      2.2
      (each, a
“Direct Purchase”); and

     

    (ii)
       Sales
      to
      Third Parties pursuant to a Bilateral Transactions, in accordance with
Section
      2.3
      (each, a
“Bilateral Purchase”). 

     

    (c)
       The
      Parties shall confirm in writing in advance of every purchase and sale of
      Ethanol pursuant to this Amended Agreement whether such purchase and sale shall
      be treated as a Direct Purchase or a Bilateral Purchase. Each of the Parties
      agrees that Kinergy shall not request that the Project Company deliver Ethanol
      to Kinergy (or
      any
      Third Party designated by Kinergy)
      unless,
      as of the scheduled date of delivery, Kinergy has entered into a Direct Purchase
      or a Bilateral Transaction with respect to such Ethanol.

     

    2.2
       Direct
      Purchases

     

    Kinergy
      may from time to time offer to purchase Ethanol from Project Company for its
      own
      account. An offer for a Direct Purchase shall include the quantity that Kinergy
      proposes to purchase, the price at which Kinergy proposes to purchase, the
      proposed timing of delivery, and such other terms as Kinergy desires to include.
      If the offer is in connection with an arbitrage opportunity, the offer shall
      so
      state and shall also include a description of the specific arbitrage
      opportunity, including a statement of the anticipated arbitrage profit. If
      Project Company accepts Kinergy’s offer, then the purchase and sale of Ethanol
      pursuant to such offer shall be deemed a Direct Purchase under this Amended
      Agreement. Kinergy shall assume the market risk associated with all Direct
      Purchases, and shall be entitled to retain all profits on the resale of Ethanol
      purchased from Project Company pursuant to Direct Purchases. Notwithstanding
      the
      foregoing, with respect to specific identified arbitrage opportunities, Kinergy
      shall be entitled to retain fifty percent (50%) of the identified arbitrage
      profit and shall remit fifty percent (50%) of the arbitrage profit to Project
      Company, unless the parties agree in writing to a different arrangement.



    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    2.3
       Bilateral
      Transactions

     

    (a)
       Kinergy
      shall use its reasonable commercial efforts to solicit, negotiate and enter
      into, and Kinergy shall perform, Bilateral Transactions with Third Parties,
      and
      such Bilateral Transactions shall be served by the Facility. Other than as
      set
      forth in Sections
      2.3(d)
      and
2.6
      below,
      Kinergy shall have absolute discretion in the solicitation, negotiation,
      administration (including the collection of payments) and execution of Bilateral
      Transactions. Project Company shall operate the Facility as required to allow
      Kinergy to perform such Bilateral Transactions. 

     

    (b)
       In
      the
      event of a breach or default by a Third Party under any Bilateral Transaction,
      Kinergy shall (i) promptly notify the Project Company of any such breach and
      default and provide the Project Company from time to time with reasonably
      detailed information in respect of the same (including copies of all written
      communications in respect thereof) and (ii) at the Project Company’s sole cost
      and expense and at the direction of the Project Company, use reasonable
      commercial efforts to exercise all rights and remedies available to it
      (including the commencement of litigation) with respect to such breach or
      default.

     

    (c)
       Kinergy
      shall perform its obligations hereunder and under Bilateral Transactions in
      accordance with this Amended Agreement, applicable Laws, applicable Permits
      and
      Good Industry Practice and with the intent to maximize the proceeds generated
      from Bilateral Transactions. 

     

    (d)
       Notwithstanding
      anything to the contrary herein, Kinergy shall (i) not enter into any Bilateral
      Transaction with any Third Party that is the subject of an Act of Insolvency,
      (ii) not enter into any Bilateral Transaction that permits the applicable Third
      Party to pay for the Ethanol purchased under such Bilateral Transaction on
      a
      date which is more than 30 days after the Monthly Date in which such Ethanol
      is
      delivered to such Third Party, (iii) not enter into any Material Bilateral
      Transaction without the prior consent of the Project Company, (iv)
      not
      enter into any Bilateral Transactions which provide for the provision of Ethanol
      in excess of the amount of Ethanol available from the Facility (after giving
      effect to the Project Company’s or Kinergy’s existing contractual obligations
      and the scheduling provisions set forth in Section
      2.6(b)
      below),
      (v) not enter into any Bilateral Transaction which does not excuse Kinergy
      from
      performing its obligations thereunder as a result of a Force Majeure Event
      (vi)
      not enter into any Bilateral Transaction during such time as the Facility cannot
      provide Ethanol due to a mechanical breakdown (including forced outage of the
      Facility), (vii) enter into Bilateral Transactions in its name (and not the
      name
      of the Project Company) and (viii) require that each Third Party make all
      payments under the applicable Bilateral Transaction to a segregated bank-account
      in the name of Kinergy (the “Account”)
      and
      Kinergy shall cause the proceeds of all such Bilateral Transactions received
      by
      it to be deposited into the Account.


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (e)
       Transaction
      Reports

     

    (i)
       Within
      thirty days after each Monthly Date occurring after the Commercial Operations
      Date, Kinergy shall deliver to the Project Company a written summary of the
      Bilateral Transactions which were entered into or performed, in whole or in
      part, during the month ending on such Monthly Date. Such summary shall specify,
      among other things, (i) the amount of Ethanol sold by Kinergy under Bilateral
      Transactions during such month, (ii) the Third Parties which entered into such
      Bilateral Transactions and the amount of Ethanol purchased thereby, and (iii)
      whether and to the extent any such Third Parties or Kinergy breached its
      obligations under any such Bilateral Transactions. 

     

    (ii)
       In
      addition, Kinergy shall provide to the Project Company on a monthly basis a
      customary bank account statement with respect to the Account (which statement
      shall reflect, among other things, (i) deposits into and withdrawals from the
      Account during the applicable monthly period and (ii) the balance of funds
      in
      the Account).

     

    (f)
       Back-to-Back
      Transactions.
      Each
      Bilateral Transaction undertaken by Kinergy shall immediately and automatically,
      without necessity of further documentation or any action whatsoever by any
      of
      the Parties, create and cause to be undertaken according to the terms of this
      Amended Agreement an equivalent transaction in terms of the obligation to
      deliver Ethanol, the quantity of Ethanol sold and the timing for the delivery
      of
      such Ethanol by the Project Company with Kinergy (as if Kinergy were the Third
      Party).


     

    2.4
       Storage

     

    Kinergy
      acknowledges that the Project Company has only limited storage capacity and
      Kinergy agrees that it shall take any Ethanol requested by Kinergy pursuant
      to
      the operating protocol established pursuant to Section
      2.6(b)
      within
      seven days of the time that the Project Company has made such Ethanol available
      to Kinergy. In the event that stored Ethanol exceeds storage capacity more
      than
      two times in any 60-day period or for longer than 24 hours at any given time,
      the Project Company shall have the right, in addition to any other claims
      available to the Project Company under applicable Laws, to terminate for cause
      this Amended Agreement. A default under this Section shall be communicated
      to
      Kinergy’s designated representative by facsimile or email. 

     

    2.5
       Obligations
      of the Project Company

     

    (a)
       The
      Project Company shall provide Kinergy with all information reasonably requested
      by Kinergy, and the Project Company shall assist Kinergy as reasonably requested
      in the solicitation, negotiation and performance of Direct Purchases and
      Bilateral Transactions.


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b)
       Notwithstanding
      anything to the contrary herein, the Project Company shall not be responsible
      for the delivery of any Ethanol to Kinergy during any periods of scheduled
      Facility maintenance (unless and to the extent the applicable Ethanol is
      available to be delivered to Kinergy from the Project Company’s storage
      facilities); provided,
      that
      (i) Kinergy shall have received at least ten Business Days prior notice of
      such
      scheduled maintenance, (ii) such maintenance shall have been scheduled in
      accordance with the operating protocol referred to in Section
      2.6(b)
      below
      and (iii) Kinergy has not, prior to the receipt of any such notice, entered
      into
      binding Direct Purchases or Bilateral Transactions which require Project Company
      supply Ethanol to Kinergy or Third Parties during such scheduled maintenance
      periods.

     

    (c) If
      on any
      day, the Project Company is unable to perform its obligations to deliver Ethanol
      under this Amended Agreement due to a mechanical breakdown (including a forced
      outage of the Facility) that is not a Force Majeure Event and such mechanical
      breakdown has continued for more than five consecutive days, the Project Company
      shall, at its option and provided that the Project Company provides Kinergy
      with
      prompt notice of its intent to exercise such option, procure replacement
      denatured fuel ethanol to be delivered to Kinergy or the Third Party, as
      applicable. In such event, if and only if the Parties reach agreement as to
      an
      alternative delivery point, the Project Company shall deliver to Kinergy
      replacement denatured fuel ethanol in a quantity sufficient to meet the contract
      quantity of such Bilateral Transaction at such alternate point (and the Project
      Company shall be responsible for all transportation costs associated therewith).
      In all other instances, the Project Company shall be responsible for any damages
      incurred by Kinergy in connection with Project Company’s failure to perform
      under the applicable Direct Purchase, or Kinergy’s failure to perform under the
      applicable Bilateral Transaction, as a result of such mechanical breakdown
      (it
      being acknowledged and agreed that Kinergy shall use commercially reasonable
      efforts to mitigate the effects of any such mechanical breakdown and the Project
      Company’s resulting inability to deliver Ethanol including the identification
      and procurement (at the Project Company’s cost) of potential replacement
      denatured fuel ethanol).

     

    2.6
       Title;
      Delivery Point; Nominations; Measurement

     

    (a)
       The
      Project Company shall deliver Ethanol to Kinergy at the inlet flange of the
      applicable receiving truck that will remove such Ethanol from the Facility.
      Title to, risk of loss with respect to and the obligation to transport such
      Ethanol shall pass from the Project Company to Kinergy at such delivery point.
      The Parties acknowledge that the quality and quantity of Ethanol may degrade
      or
      shrink after such Ethanol is delivered by the Project Company to Kinergy at
      such
      delivery point, and the Parties acknowledge that the risk of such degradation
      or
      shrinkage and all other risk of loss shall be borne by Kinergy.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)
       Prior
      to
      the Commercial Operations Date, Kinergy and the Project Company shall agree
      on
      an operating protocol with respect to the mechanics, timing and process for
      (i)
      determining how much Ethanol is available to be sold on any particular day,
      (ii)
      Kinergy to communicate to the Project Company its Ethanol requirements on a
      monthly, weekly and daily basis, (iii) determining the quantity of Ethanol
      to be
      stored by the Project Company in its storage facilities, (iv) identifying
      Persons to transport the Ethanol to Third Parties and (v) implementing the
      Ethanol sales contemplated by this Amended Agreement. By mutual agreement,
      such
      operating protocol shall be updated from time to time thereafter.

     

    (c)
       On
      or
      before the date that is fifteen days prior to the end of a calendar month,
      the
      Project Company shall provide Kinergy with a forecast of its projected monthly
      Ethanol production for the following month.

     

    (d)
       The
      Project Company agrees to collect samples of each shipment of Ethanol it
      delivers to Kinergy hereunder. The Project Company shall label each sample
      to
      include the customer order number and any other information reasonably necessary
      to identify such Ethanol and the applicable shipment. Kinergy shall have the
      right, upon reasonable notice and at reasonable times and at its expense, to
      test such samples to confirm that the Ethanol delivered to it hereunder meets
      the requirements of this Amended Agreement. The Parties agree that the amount
      of
      Ethanol delivered hereunder (whether measured as net gallons, net liters or
      otherwise) shall be corrected to and correspondingly adjusted by a reference
      temperature of 60 degrees Fahrenheit or 15.56 degrees Celsius.

     

    (e)
       As
      further described in Sections
      2.3,
      and
2.6
      and
      except as otherwise provided herein, the Project Company shall provide Ethanol
      to Kinergy free and clear of all liens and encumbrances.
      

     

    ARTICLE
      III

    PAYMENTS

     

    3.1
       Fees
      and Payments

     

    (a)
       On
      the
      fifth Business Day and the twentieth Business Day of each calendar month (the
      period of time between such dates being referred to herein as a “Payment
      Period”),
      Kinergy shall pay to the Project Company an amount equal to (a) the Purchase
      Price for such Payment Period minus (b)
      the
      aggregate amount of Transaction Costs for such Payment Period minus
      (c) the
      aggregate amount of the Incentive Fee for such Payment Period (it being
      acknowledged that Kinergy shall retain for its own account the amount of such
      Transaction Costs and Incentive Fee). In connection with each such payment,
      Kinergy shall deliver to the Project Company a statement detailing its
      calculations of the applicable Purchase Price, the applicable Transaction Costs
      and the applicable Incentive Fee. During
      the first 90 days of production at FRE, Kinergy will pay FRE each Friday for
      the
      previous week’s shipments of ethanol.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)
       On
      the
      fifth Business Day and the twentieth Business Day of each calendar month,
      Kinergy shall pay to the Project Company the aggregate purchase price in respect
      of Direct Purchases of Ethanol that shipped during the Payment Period, plus
      any
      arbitrage profit owing to the Project Company on account of specific identified
      arbitrage opportunities during such period. In connection with each such
      payment, Kinergy shall deliver to the Project Company a statement detailing
      its
      calculations of the applicable purchase price and arbitrage profit.

     

    3.2
       Overdue
      Payments; Indemnity Payments

     

    (a)
       If
      any
      Party shall fail to make any payment when due hereunder, such overdue payment
      shall accrue interest at the Prime Rate plus
      5% from
      the date originally due until the date paid.

     

    (b)
       Any
      indemnification payments received by Kinergy from a Third Party in respect
      of a
      Bilateral Transaction (net of Kinergy’s expenses related to the matter for which
      such indemnification payments were received) shall be paid to the Project
      Company on or before the next payment date as determined in accordance with
      Section 3.1(a).

     

    3.3
       Billing
      Dispute

     

    If
      the
      Project Company or Kinergy, in good faith, disputes the amount of any payment
      received by it or to be paid by it or set-off pursuant to Section
      3.1
      above,
      the disputing Party shall immediately notify the other Party of the basis for
      the dispute. The Parties will then meet and use their best efforts to resolve
      any such dispute. If any amount is ultimately determined to be due to or
      permitted to be set-off by the Project Company or Kinergy (as the case may
      be),
      to the extent not previously paid or set-off, (a) Kinergy shall pay such amount
      to the Project Company within five Business Days of such determination or (b)
      Kinergy may then set-off such amount (as the case may be).

     

    3.4
       Audit

     

    Notwithstanding
      the payment of any amount pursuant to this Article III,
      the
      Project Company shall remain entitled (upon reasonable prior notice, at
      reasonable times and at Kinergy’s corporate offices) to conduct a subsequent
      audit and review of (a) all Bilateral Transactions and related records to verify
      the amount of gross payments, Incentive Fees, Transaction Costs and damage
      payments and (b) the determination and calculation of the Purchase Price, in
      each case for a period of two years from and after the end of the applicable
      Payment Period. If, pursuant to such audit and review, it is determined that
      any
      amount previously paid by Kinergy to the Project Company did not constitute
      all
      of the amounts which should have been paid to the Project Company, the Project
      Company shall advise Kinergy indicating such amount and reason the amount should
      have been paid to the Project Company and, subject to the next two sentences,
      Kinergy shall pay such amount to the Project Company within five Business Days
      of such request along with interest accrued at the Prime Rate plus
      5% from
      the date originally due until the date paid. If there is not agreement of any
      item so noted, the Parties will then meet and use their best efforts to resolve
      the dispute. If Parties are not able to resolve issues raised by such an audit
      and review, any disputed items will be resolved in accordance with the
      provisions of Article
      IX.


    
      
        
        

      

      
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    ARTICLE
      IV

    TERM;
      TERMINATION

     

    4.1
       Term. 

     

    This
      Amended Agreement shall be effective on the date hereof and, unless earlier
      terminated in accordance with its terms, shall continue in effect until June
      9,
      2009; provided,
      that the
      term of this Amended Agreement shall automatically renew and be extended for
      additional one-year periods thereafter unless a Party elects to terminate this
      Amended Agreement in a writing delivered to the other Party at least 60-days
      prior to the end of the original or renewal term. 

     

    4.2
       Termination
      by
      Kinergy

     

    Kinergy
      may terminate this Amended Agreement by written notice to the Project Company,
      upon the occurrence of any of the following events, provided,
      that no
      such notice shall be required for a termination pursuant to clause (c) of this
      Section
      4.2:

     

    (a)
       the
      failure by the Project Company to make any payment, deposit or transfer required
      hereunder within 30 Business Days after the date such payment, deposit or
      transfer is required to be made;

     

    (b)
       the
      failure of any statement, representation or warranty made by the Project Company
      in this Amended Agreement to have been correct in any material respect when
      made
      if such failure could reasonably be expected to have a material adverse effect
      on the Project Company’s ability to perform its obligations under this Amended
      Agreement;

     

    (c)
       the
      occurrence of an Act of Insolvency with respect to the Project
      Company;
      or

     

    (d)
       the
      failure of the Project Company to perform any of its material obligations under
      this Amended Agreement and such failure continues for 30 days after receipt
      of
      written notice from Kinergy of such failure; provided,
      that
      such 30-day period shall be extended for up to an aggregate of 90 days so long
      as the Project Company is diligently attempting to cure such failure.

     

    4.3
       Termination
      by the Project Company

     

    The
      Project Company may terminate this Amended Agreement by written notice to
      Kinergy, upon the occurrence of any of the following events, provided,
      that no
      such notice shall be required for a termination pursuant to clause (c) of this
      Section
      4.3:

     

    (a)
       the
      failure by Kinergy to make any payment, deposit or transfer required hereunder
      within fifteen Business Days after the date such payment, deposit or transfer
      is
      required to be made;


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b)
       the
      failure of any statement, representation or warranty made by Kinergy in this
      Amended Agreement to have been correct in any material respect when made if
      such
      failure could reasonably be expected to have a material adverse effect on
      Kinergy’s ability to perform its obligations under this Amended
      Agreement;

     

    (c)
       the
      occurrence of an Act of Insolvency with respect to Kinergy; 

     

    (d)
       the
      failure of Kinergy to perform any of its material obligations under this Amended
      Agreement and such failure continues for 30 days after receipt of written notice
      from the Project Company of such failure; provided,
      that
      such 30-day period shall be extended for up to an aggregate of 90 days so long
      as Kinergy is diligently attempting to cure such failure; or

     

    (e)
       the
      occurrence of any termination event under Section
      2.4.

     

    4.4
       Change
      of Control

     

    (a)
       Either
      Party shall have the option to terminate this Amended Agreement for convenience
      upon thirty days written notice to the other Party from and after the occurrence
      of any transfer, assignment, sale or other disposition (exclusive of any
      transfers, assignments, sales or other dispositions in connection with a
      foreclosure or exercise of remedies by the Financing Parties, which shall be
      governed exclusively by clause (b) below) of (i) all or substantially all of
      the
      assets comprising the Facility
      or (ii)
      more than a majority of the membership interests of the Project Company or
      Kinergy to any Person which is not an Affiliate of PEI.
      Any
      termination pursuant to this Section 4.4(a) shall be effective 30 days after
      written notice is provided by the terminating Party to the other
      Party.

     

    (b)
       If
      as a
      result of a foreclosure on or similar exercise of remedies in respect of the
      Project Company or the Facility the collateral agent under the Financing
      Documents (or its designee or transferee) becomes a party to this Amended
      Agreement or directly or indirectly controls all or substantially all of the
      assets of, or a majority of the membership interests in, the Project Company,
      the Project Company shall have the right to terminate this Amended Agreement
      for
      convenience upon thirty days written notice to Kinergy.

     

    4.5
       Effect
      of Termination

     

    No
      termination under this Article
      IV
      shall
      release any of the Parties from any obligations arising hereunder prior to
      such
      termination, including obligations under any Bilateral Transaction (or such
      Bilateral Transaction’s corresponding back-to-back transaction arising under
Section
      2.3(f))
      that is
      not fully performed as of the date of such termination. The exercise of the
      right of a Party to terminate this Amended Agreement, as provided herein, does
      not preclude such Party from exercising other remedies that are provided herein
      or are available at law or in equity; provided,
      however,
      that no
      Party shall have a right to terminate, revoke or treat this Amended Agreement
      as
      repudiated other than in accordance with the other provisions of this Amended
      Agreement; and provided,
      further,
      that
      the Parties’ respective rights upon termination shall be subject to the
      liability limitations of Article
      V.
      Except
      as otherwise set forth in this Amended Agreement, remedies are cumulative,
      and
      the exercise of, or the failure to exercise, one or more remedies by a Party
      shall not, to the extent provided by Law, limit or preclude the exercise of,
      or
      constitute a waiver of, other remedies by such Party.


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    LIMITATIONS
      ON LIABILITY

     

    5.1
       Maximum
      Liability of Kinergy

     

    The
      total
      aggregate liability of Kinergy to the Project Company under this Amended
      Agreement during the term of this Amended Agreement shall not exceed the
      aggregate amount of Incentive Fees received by Kinergy. The liability of Kinergy
      to the Project Company under this Amended Agreement during any calendar year
      shall not exceed the aggregate amount of Incentive Fees received by Kinergy
      during such year. Notwithstanding the foregoing, such limitations on liability
      shall not apply with respect to any net loss, damage or liability resulting
      from
      or arising out of the gross negligence or willful misconduct of
      Kinergy.

     

    5.2
       No
      Consequential or Punitive Damages

     

    In
      no
      event shall either Party be liable to any other Party by way of indemnity or
      by
      reason of any breach of contract or of statutory duty or by reason of tort
      (including negligence or strict liability) or otherwise for any loss of profits,
      loss of revenue, loss of use, loss of production, loss of contracts or for
      any
      incidental, indirect, special or consequential or punitive damages of any other
      kind or nature whatsoever that may be suffered by such other Party, including
      any losses for which such other Party has insurance to the extent proceeds
      of
      insurance have been recovered for such losses.

     

    ARTICLE
      VI

    INDEMNIFICATION

     

    6.1
       The
      Project Company’s Indemnity

     

    The
      Project Company shall defend, indemnify and hold harmless Kinergy and its
      Affiliates (and each officer, director, employee, shareholder, partner, member
      or agent of Kinergy and its Affiliates) (each, a “Project
      Company Indemnified Person”)
      from
      and against any and all third party claims, actions, damages, expenses
      (including reasonable and documented attorneys’ fees and expenses), losses,
      settlements or liabilities (collectively, “Liabilities”)
      incurred or asserted against any Project Company Indemnified Person (a) as
      a
      result of any failure on the part of the Project Company to perform the Project
      Company’s obligations under this Amended Agreement (including with respect to
      any back-to-back transaction under Section 2.3(f)), or (b) arising out of or
      in
      any way connected with the grossly negligent acts or omissions of the Project
      Company or its Affiliates (other than Kinergy).


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    6.2
       Kinergy’s
      Indemnity

     

    Kinergy
      shall defend, indemnify and hold harmless the Project Company and its Affiliates
      (and each officer, director, employee, shareholder, partner, member or agent
      of
      the Project Company and their Affiliates) (each, a “Kinergy
      Indemnified Person”)
      from
      and against any and all third party Liabilities incurred or asserted against
      any
      Kinergy Indemnified Person (a) as a result of any failure on the part of Kinergy
      to perform its obligations under this Amended Agreement (including with respect
      to any Bilateral Transaction), or (b) arising out of or in any way connected
      with the grossly negligent acts or omissions of Kinergy or its Affiliates (other
      than the Project Company).

     

    ARTICLE
      VII

    REPRESENTATIONS
      AND WARRANTIES

     

    7.1
       Kinergy’s
      Representations and Warranties

     

    Kinergy
      represents and warrants to the Project Company, as of the date hereof, as
      follows:

     

    (a)
       Due
      Formation.
      Kinergy
      (i) is a limited liability company duly formed and validly existing under the
      laws of the State of Oregon, (ii) has the requisite power and authority to
      own
      its properties and carry on its business as now being conducted and currently
      proposed to be conducted and to execute, deliver and perform its obligations
      under this Amended Agreement, and (iii) is qualified to do business in the
      State
      of California and in every other jurisdiction in which failure so to qualify
      could be reasonably be expected to have a material adverse effect on Kinergy’s
      ability to perform its obligations hereunder.

     

    (b)
       Authorization;
      Enforceability.
      Kinergy
      has taken all action necessary to authorize it to execute, deliver and perform
      its obligations under this Amended Agreement. This Amended Agreement constitutes
      a legal, valid and binding obligation of Kinergy enforceable in accordance
      with
      its terms, subject to bankruptcy, reorganization, moratorium or other similar
      laws affecting the enforcement of the rights of creditors generally and subject
      to general principles of equity.

     

    (c)
       No
      Conflict.
      The
      execution, delivery and performance by Kinergy of this Amended Agreement does
      not and will not (i) violate any Law applicable to Kinergy, (ii) result in
      any
      breach of Kinergy’s constituent documents or (iii) conflict with, violate or
      result in a breach of or constitute a default under any agreement or instrument
      to which Kinergy or any of its properties or assets is bound or result in the
      imposition or creation of any lien or security interest in or with respect
      to
      any of Kinergy’s property or assets, other than in each case any such
      violations, conflicts, breaches or impositions which could not be reasonably
      be
      expected to have a material adverse effect on Kinergy’s ability to perform its
      obligations hereunder.


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (d)
       No
      Authorization.
      No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority (other than those which have been obtained) is
      required for the due execution, delivery and performance by Kinergy of this
      Amended Agreement, other than any such authorizations, approvals or actions
      the
      failure of which to obtain could not be reasonably be expected to have a
      material adverse effect on Kinergy’s ability to perform its obligations
      hereunder.

     

    (e)
       Litigation.
      Kinergy
      is not a party to any legal, administrative, arbitration or other proceeding,
      and, to Kinergy’s knowledge, no such proceeding is threatened, which could be
      reasonably be expected to have a material adverse effect on Kinergy’s ability to
      perform its obligations hereunder.

     

    7.2
       The
      Project Company’s Representations and Warranties

     

    The
      Project Company represents and warrants to Kinergy, as of the date hereof,
      as
      follows:

     

    (a)
       Due
      Formation.
      The
      Project Company (i) is a limited liability company duly formed and validly
      existing under the laws of the State of Delaware, (ii) has the requisite power
      and authority to own its properties and carry on its business as now being
      conducted and currently proposed to be conducted and to execute, deliver and
      perform its obligations under this Amended Agreement, and (iii) is qualified
      to
      do business in the State of California and in every other jurisdiction in which
      failure so to qualify could be reasonably be expected to have a material adverse
      effect on the Project Company’s ability to perform its obligations
      hereunder.

     

    (b)
       Authorization;
      Enforceability.
      The
      Project Company has taken all action necessary to authorize it to execute,
      deliver and perform its obligations under this Amended Agreement. This Amended
      Agreement constitutes a legal, valid and binding obligation of the Project
      Company enforceable in accordance with its terms, subject to bankruptcy,
      reorganization, moratorium or other similar laws affecting the enforcement
      of
      the rights of creditors generally and subject to general principles of
      equity.

     

    (c)
       No
      Conflict.
      The
      execution, delivery and performance by the Project Company of this Amended
      Agreement does not and will not (i) violate any Law applicable to the Project
      Company, (ii) result in any breach of the Project Company’s constituent
      documents or (iii) conflict with, violate or result in a breach of or constitute
      a default under any agreement or instrument to which the Project Company or
      any
      of its properties or assets is bound or result in the imposition or creation
      of
      any lien or security interest in or with respect to any of the Project Company’s
      property or assets, other than in each case any such violations, conflicts,
      breaches or impositions which could not be reasonably be expected to have a
      material adverse effect on the Project Company’s ability to perform its
      obligations hereunder.


    
      
        
        

      

      
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    (d)
       No
      Authorization.
      No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority (other than those which have been obtained) is
      required for the due execution, delivery and performance by the Project Company
      of this Amended Agreement, other than any such authorizations, approvals or
      actions the failure of which to obtain could not be reasonably be expected
      to
      have a material adverse effect on the Project Company’s ability to perform its
      obligations hereunder.


     

    (e)
       Litigation.
      The
      Project Company is not a party to any legal, administrative, arbitration or
      other proceeding, and, to the Project Company’s knowledge, no such proceeding is
      threatened, which could be reasonably be expected to have a material adverse
      effect on the Project Company’s ability to perform its obligations hereunder.


     

    ARTICLE
      VIII

    FORCE
      MAJEURE

     

    8.1
       Definition

     

    As
      used
      herein, “Force
      Majeure Event”
means
      any cause(s) which render(s) a Party wholly or partly unable to perform its
      obligations under this Amended Agreement (other than obligations to make
      payments when due), and which are neither reasonably within the control of
      such
      Party nor the result of the fault or negligence of such Party, and which occur
      despite all reasonable attempts to avoid, mitigate or remedy, and shall include
      acts of God, war, riots, civil insurrections, cyclones, hurricanes, floods,
      fires, explosions, earthquakes, lightning, storms, chemical contamination,
      epidemics or plagues, acts or campaigns of terrorism or sabotage, blockades,
      embargoes, accidents or interruptions to transportation, trade restrictions,
      acts of any Governmental Authority after the date of this Amended Agreement,
      strikes and other labor difficulties, and other events or circumstances beyond
      the reasonable control of such Party. Mechanical breakdown (including a forced
      outage of the Facility) that continues for more than five consecutive days
      shall
      be deemed not to be “Force Majeure Event” unless such mechanical breakdown
      resulted from or was caused by a separate “Force Majeure Event.”

     

    8.2
       Effect

     

    A
      Party
      claiming relief as a result of a Force Majeure Event shall give the other
      Parties written notice within five Business Days of becoming aware of the
      occurrence of the Force Majeure Event, or as soon thereafter as practicable,
      describing the particulars of the Force Majeure Event, and will use reasonable
      efforts to remedy its inability to perform as soon as possible. If the Force
      Majeure Event (including the effects thereof) continues for fifteen consecutive
      days, the affected Party shall report to the other Parties the status of its
      efforts to resume performance and the estimated date thereof. If the Force
      Majeure Event (including the effects thereof) continues for 180 consecutive
      days, the affected Party may terminate this Amended Agreement for convenience.
      If the affected Party was not able to resume performance prior to or at the
      time
      of the report to the other Parties of the onset of the Force Majeure Event,
      then
      it will report in writing to the other Parties when it is again able to perform.
      If a Party fails to give timely notice, the excuse for its non-performance
      shall
      not begin until notice is given. 


    
      
        
        

      

      
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    8.3
       Limitations

     

    Any
      obligation(s) of a Party (other than an obligation to make payments when due)
      may be temporarily suspended during any period such Party is unable to perform
      such obligation(s) by reason of the occurrence of a Force Majeure Event, but
      only to the extent of such inability to perform, provided,
      that:


     

    (a)
       the
      suspension of performance is of no greater scope and of no longer duration
      than
      is reasonably required by the Force Majeure Event; and

     

    (b)
       the
      Party
      claiming the occurrence of the Force Majeure Event bears the burden of
      proof.

     

    ARTICLE
      IX

    DISPUTE
      RESOLUTION

     

    9.1
       Attempts
      to Settle

     

    In
      the
      event that a Dispute among the Parties arises under, out of or in relation
      to,
      this Amended Agreement, the Parties shall attempt in good faith to settle such
      Dispute by mutual discussions within fifteen Business Days after the date that
      an aggrieved Party gives written notice of the Dispute to the other Parties.
      In
      the event that a Dispute is not resolved by discussion in accordance with the
      preceding sentence within the time period set forth therein, the Parties shall
      refer the Dispute to their respective senior officers for further consideration
      and attempted resolution within fifteen Business Days after the Dispute has
      been
      referred to such individuals (or such longer period as the Parties may
      agree).

     

    9.2
       Resolution
      by Expert

     

    If
      the
      Parties shall have failed to resolve the Dispute within fifteen Business Days
      after the date that the Parties referred the Dispute to their senior officers,
      then, provided the Parties shall so agree, the Dispute may be submitted for
      resolution by an Expert, such Expert to be appointed by the mutual agreement
      of
      the Parties. Proceedings before an Expert shall be held in Fresno, California
      (or any other location agreed to by the Parties). The Expert shall apply to
      such
      proceedings the substantive law of the State of California in effect at the
      time
      of such proceedings. The decision of the Expert shall be final and binding
      upon
      the Parties. In the event that (a) the Parties cannot agree on the appointment
      of an Expert within ten Business Days after the date that the Parties agreed
      to
      submit the Dispute for resolution by the Expert or (b) the Expert fails to
      resolve such Dispute within 60 days after the Parties have submitted such
      Dispute to the Expert, then any Party may file a demand for arbitration in
      writing in accordance with Section
      9.3.
      


    
      
        
        

      

      
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    9.3
       Arbitration

     

    Any
      Dispute that has not been resolved following the procedures set forth in
Section
      9.1
      or
9.2
      shall be
      settled by binding arbitration in Fresno, California (or any other location
      agreed to by the Parties) before a panel of three arbitrators. Such arbitration
      shall be conducted in accordance with the Commercial Arbitration Rules of the
      American Arbitration Association as in effect on the date of execution of this
      Amended Agreement. Such arbitration shall be governed by the laws of the State
      of California. If arbitration proceedings have been initiated pursuant to this
      Section
      9.3
      and
      raise issues of fact or law which, in whole or in part, are substantially the
      same as issues of fact or law already pending in arbitration proceedings
      involving the applicable Parties, such issues shall be consolidated with the
      issues in the ongoing proceedings. THE PARTIES HEREBY AGREE THAT THE PROCEDURES
      SET FORTH IN THIS ARTICLE
      IX
      SHALL BE
      THE EXCLUSIVE DISPUTE RESOLUTION PROCEDURES APPLICABLE TO ANY DISPUTE,
      CONTROVERSY OR CLAIM UNDER THIS AMENDED AGREEMENT AND, EXCEPT AS SET FORTH
      IN
SECTION
      9.5,
      THE
      PARTIES HEREBY WAIVE ALL RIGHTS TO A COURT TRIAL OR TRIAL BY JURY WITH RESPECT
      TO ANY DISPUTE, CONTROVERSY OR CLAIM UNDER THIS AMENDED AGREEMENT.

     

    9.4
       Consequential
      and Punitive Damages

     

    Awards
      of
      Experts and arbitral panels shall be subject to the provisions of Article
      V.

     

    9.5
       Finality
      and Enforcement of Decision

     

    Any
      decision or award of an Expert or a majority of an arbitral panel, as
      applicable, shall be final and binding upon the Parties. Each of the Parties
      agrees that the arbitral award may be enforced against it or its assets wherever
      they may be found and that a judgment upon the arbitral award may be entered
      in
      any court having jurisdiction thereof. The Parties hereby waive any right to
      appeal or to review the decision or award of an Expert or an arbitral panel
      by
      any court or tribunal and also waive any objections to the enforcement of such
      decision or award.

     

    9.6
       Costs

     

    The
      costs
      of submitting a Dispute to an Expert shall be shared equally among the Parties
      involved in the Dispute, unless the arbitral panel or the Expert determines
      otherwise. The costs of arbitration shall be paid in accordance with the
      decision of the arbitral panel pursuant to the Commercial Arbitration Rules
      of
      the American Arbitration Association as in effect on the date of execution
      of
      this Amended Agreement.

     

    9.7
       Continuing
      Performance Obligations

     

    While
      a
      Dispute is pending, each Party shall continue to perform its obligations under
      this Amended Agreement, unless such Party is otherwise entitled to suspend
      its
      performance hereunder or terminate this Amended Agreement in accordance with
      the
      terms hereof.


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X

    CONFIDENTIALITY

     

    Each
      Party and its Affiliates shall treat as confidential the data and information
      in
      their possession regarding the Facility, the other Parties or any Affiliate
      of
      any other Party, unless: (a) the applicable other Party agrees in writing to
      the
      release of such data or information; (b) such data or information becomes
      publicly available other than through the wrongful actions of the disclosing
      Party or the disclosing Party’s Affiliate; (c) such data or information was in
      the possession of the receiving Party or the receiving Party’s Affiliate prior
      to receipt thereof from the disclosing Party with no corresponding
      confidentiality obligation; or (d) such data or information is required by
      Law
      to be disclosed. Notwithstanding the generality of the foregoing, any Party
      may
      disclose data and information to (i) the officers, directors, managers,
      partners, members, employees and Affiliates of such Party, (ii) any successors
      in interest and permitted assigns of such Party, (iii) any actual or potential
      Financing Parties or actual or potential lenders to PEI or any subsidiary
      thereof, and (iv) any potential equity investors in PEI or any subsidiary
      thereof; provided,
      that
      any Person who receives confidential data and information pursuant to an
      exception contained in clauses (ii) - (iv) of this Article agrees to similar
      confidentiality provisions.

     

    ARTICLE
      XI

    ASSIGNMENT
      AND TRANSFER

     

    No
      Party
      shall assign this Amended Agreement or any of its rights or obligations
      hereunder without first obtaining the prior written consent of (a) in the case
      of the Project Company, Kinergy, or (b) in the case of Kinergy, the Project
      Company, provided,
      that
      any Party shall be entitled to assign its rights hereunder (as collateral
      security or otherwise) for financing purposes (including a collateral assignment
      to any Financing Parties) without the consent of any other Party.

     

    ARTICLE
      XII

    FURTHER
      ASSURANCES; REQUESTS OF FINANCING PARTIES

     

    12.1
       Further
      Assurances

     

    Each
      Party shall from time to time execute and deliver all such further documents
      and
      instruments as any other Party may reasonably require to effectively carry
      out
      or better evidence or perfect the full intent and meaning of this Amended
      Agreement.

     

    12.2
       Requests
      of Financing Parties

     

    Kinergy
      shall use its reasonable efforts to execute, acknowledge and deliver any and
      all
      further documents and instruments, and to take any other actions, which may
      be
      necessary to satisfy the reasonable requests of any Financing Party or
      prospective Financing Party in connection with the financing of the Facility,
      including delivering to an agent or trustee for the Financing Parties a
      customary consent to the assignment by the Project Company of its rights under
      this Amended Agreement to the Financing Parties.


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XIII

    MISCELLANEOUS

     

    13.1
       Amended
      Agreement; Entire Agreement

     

    This
      Amended Agreement amends and restates in its entirety the Ethanol Marketing
      Agreement between the Parties dated August 31, 2005. This Amended Agreement
      contains the entire agreement between the Parties with respect to the subject
      matter hereof and supersedes all prior agreements, negotiations and
      understandings among the Parties with respect to such subject matter. Nothing
      in
      this Amended Agreement shall be construed as creating a partnership or joint
      venture between the Parties.

     

    13.2
       Counterparts

     

    This
      Amended Agreement may be executed in any number of counterparts and each such
      counterpart shall be deemed to be an original instrument, but all such
      counterparts together shall constitute one and the same agreement.

     

    13.3
       Survival

     

    Cancellation,
      expiration or earlier termination of this Amended Agreement shall not relieve
      the Parties of obligations that by their nature should survive such
      cancellation, expiration or termination, including remedies, limitations on
      liability, promises of indemnity and payment, and confidentiality. Without
      limiting the generality of the foregoing, the following provisions of this
      Amended Agreement shall survive: Articles
      III,
      V,
      VI,
      IX
      and
X.

     

    13.4
       Severability

     

    In
      the
      event any one or more of the provisions contained in this Amended Agreement
      should be held invalid, illegal or unenforceable in any respect, the validity,
      legality and enforceability of the remaining provisions contained herein shall
      not in any way be affected or impaired thereby. The Parties shall endeavor
      in
      good-faith negotiations to replace the invalid, illegal or unenforceable
      provisions with valid provisions, the economic and practical effect of which
      comes as close as possible to that of the invalid, illegal or unenforceable
      provisions.

     

    13.5
       Governing
      Law

     

    This
      Amended Agreement shall be governed by and construed in accordance with the
      internal laws of the State of California, as applied to contracts made and
      performed within the State of California, without regard to its conflicts of
      law
      principles.

     

    13.6
       Binding
      Effect

     

    This
      Amended Agreement shall be binding upon and shall inure to the benefit of the
      Parties hereto and their respective successors and permitted assigns. This
      Amended Agreement is not made for the benefit of any Person or entity not a
      party hereto, and nothing in this Amended Agreement shall be construed as giving
      any Person or entity, other than the Parties and their respective successors
      and
      permitted assigns, any right, remedy or claim under or in respect of this
      Amended Agreement or any provision hereof.


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    13.7
       Notices

     

    All
      notices or other communications which are required or permitted hereunder shall
      be in writing and shall be deemed sufficiently given (a) upon delivery, if
      delivered personally, (b) the day the notice is received, if it is delivered
      by
      overnight courier or certified or registered mail, postage prepaid, or (c)
      upon
      the effective receipt of electronic transmission, facsimile, telex or telegram
      (with effective receipt being deemed to occur upon the sender’s receipt of
      confirmation of successful transmission of such notice or communication), to
      the
      addresses set forth below or such other address as the addressee may have
      specified in a notice duly given to sender as provided herein:

     

    
      
        	
                If
                  to Kinergy:

              	 	 
	 	
                Kinergy
                  Marketing, LLC

              
	
                 

              	
                1260
                  Lake Boulevard, Suite 225

              
	
                 

              	
                Davis,
                  California 95616 

              
	
                 

              	
                Attention:  

              	
                Mr.
                  Neil Koehler

              
	
                 

              	
                Telephone:
                  

              	
                (530)
                  750-3017

              
	
                 

              	Facsimile: 	
                (530)
                  309-4172

              
	
                With
                  a copy to:

              	 	 
	 	Pacific
                Ethanol, Inc.
	 	5711
                N. West Avenue
	
                 

              	 Fresno,
                CA 93711
	 	
                Attention:
                  

              	General
                Counsel 
	
                 

              	
                Telephone:
                  

              	
                (559)
                  435-1771

              
	
                 

              	Facsimile:	
                (559)
                  435-1478

              
	
                If
                  to the Project Company:

              	 	 
	
                 

              	
                Front
                  Range Energy, LLC 

              
	
                 

              	
                PO
                  Box 581

              
	
                 

              	
                Windsor,
                  CO 80550

              
	
                 

              	Attn: Dan Sanders
                Sr.


      


     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    13.8  
      Amendment

     

    No
      Party
      hereto shall be bound by any termination, amendment, supplement, waiver or
      modification of any term hereof unless such Party shall have consented thereto
      in writing.

     

    13.9
       No
      Implied Waiver

     

    No
      delay
      or failure on the part of any Party in exercising any rights hereunder, and
      no
      partial or single exercise thereof, shall constitute a waiver of such rights
      or
      of any other rights hereunder.

     

    [THE
      REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, this Amended and Restated Ethanol Purchase and Sale Agreement
      has been duly executed by the Parties hereto as of the date first written
      above.

     

     

    FRONT
      RANGE ENERGY, LLC

     

    


    By: /s/
      Daniel A.
      Sanders            
 

         Daniel
      A.
      Sanders

          
Manager

    


     

    KINERGY
      MARKETING, LLC

    


    


    By: /s/
      John T.
      Miller                 

         John
      T.
      Miller

          
COO

    
24