Exhibit
10.4


 


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.


 


RESTATED
DISTILLER’S GRAINS MARKETING AGREEMENT


 


 


               
THIS RESTATED DISTILLER’S GRAINS MARKETING AGREEMENT (this “Restated
Agreement”), made and entered into this 7th day of July, 2006, by and between
Hawkeye Renewables, LLC, a Delaware limited liability company (“HR”), and
United Bio Energy Ingredients, LLC, a Kansas limited liability company (“UBE”).


 


W
I T N E S S E T H :


 


               
WHEREAS, HR and UBE are parties to the Distiller’s Grains Marketing Agreement,
dated November 19, 2004 (the “Agreement”) and the First Amendment to the
Distiller’s Grains Marketing Agreement, dated May 22, 2006 (the “First
Amendment” and collectively, with the Agreement, the “Amended Agreement”), with
HR having become a party to the Amended Agreement by assignment from Iowa Falls
Ethanol Plant, L.L.C. (now known as Hawkeye Holdings, L.L.C.).


 


WHEREAS, pursuant to the
Amended Agreement, HR has sold and UBE has purchased all the dried distiller’s
grains (“DDG”) and wet distiller’s grains (including modified wet distiller’s
grains, “WDG”) (collectively the “Distiller’s Grains”) produced at HR’s ethanol
plant located near Fairbank, Iowa (as such plant may be expanded from time to
time, the “Plant”);


 


               
WHEREAS, for administrative ease, the parties desire to restate the Amended
Agreement to consolidate in one document changes made to the Agreement by the
First Amendment; and


 


               
WHEREAS, this Restated Agreement restates and supersedes the Amended Agreement
in its entirety.


 


               
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
both parties, the parties hereby agree to restate the Amended Agreement in its
entirety as follows:


 


1.            
COMMITMENT AND TERM.  UBE shall from time to time submit purchase
orders (each, a “Purchase Order”) to HR for purchases of the Distiller’s
Grains, all upon and subject to the terms and conditions of this Restated
Agreement, with each such Purchase Order to be placed by UBE properly
completing and executing a Purchase Order form in either the form of Exhibit
“A” or Exhibit “B” to this Restated Agreement or other form acceptable to
HR.  The terms of any Purchase Order may include a request for the sale
and delivery of Distiller’s Grains on a one-time basis or on a daily, weekly,
monthly or other periodic basis.  A Purchase Order submitted in the form
of Exhibit “B” to this Restated Agreement may take the form of UBE submitting
to HR a proposed minimum F.O.B. Plant Price (as that term is defined in Section
2) 

















 


UBE Customers (as the term is defined in Section 2 of
this Restated Agreement) for DDG and/or WDG (the “Posted Price”) which will be
effective for the day, week, month or other period of time set forth in the
Purchase Order (in any such case, the “Posted Price Sales Period”), along with
a proposed maximum number of tons of DDG and/or WDG (the “Maximum Posted Price
Tons”) which may be sold at the Posted Price at any time during, and for
pick-up by UBE during, the Posted Price Sales Period.  Any such Purchase
Order is referred to in this Restated Agreement as a “Posted Price Purchase
Order”.  All references to “Purchase Order” in this Restated Agreement
shall include Posted Price Purchase Orders.  Each Purchase Order shall be
irrevocable by UBE, unless and until the time at which the particular Purchase
Order becomes a Rejected Purchase Order (as that term is defined below).


 


UBE and HR shall
reasonably cooperate in attempting to schedule weekly or other periodic
meetings at the Plant or by phone or other communications methods for purposes
of discussing any Purchase Order UBE desires to submit to HR, but no such
Purchase Order shall become effective unless and until such Purchase Order has
both been submitted in writing by UBE in the form of either Exhibit “A” or
Exhibit “B” to this Restated Agreement or other form acceptable to HR and such
Purchase Order has been accepted by HR.


 


Notwithstanding any term
or condition of this Restated Agreement or otherwise which may appear to be to
the contrary, HR may accept or reject each Purchase Order, in whole, but not in
part, in HR’s commercially reasonable discretion.  HR shall notify UBE of
whether HR accepts or rejects each particular Purchase Order within one (1) day
of HR’s receipt of the Purchase Order.  If HR fails to notify UBE within
said one (1) day period, however, HR shall be deemed to have rejected the
Purchase Order in question.  If HR accepts a Posted Price Purchase Order,
UBE may sell all (if the Posted Price Purchase Order is an “All or Nothing”
sale), or (if the Posted Price Purchase Order is a “Best Efforts” sale)
anywhere up to, the Maximum Posted Price Tons of DDG and/or WDG, as the case
may be, to UBE Customers at or above the Posted Price at any time during the
Posted Price Sale Period without further approval of each such sale from HR,
but otherwise upon and subject to the terms and conditions of this Restated
Agreement, and each such sale shall also be an Accepted Purchase Order (as that
term is defined below).


 


Any Purchase Order which
is accepted by HR is referred to in this Restated Agreement as an “Accepted
Purchase Order”, and any Purchase Order which is rejected by HR is referred to
in this Restated Agreement as a “Rejected Purchase Order”.  UBE shall sell
all Distiller’s Grains which are the subject of an Accepted Purchase Order to
the UBE Customers in accordance with the terms as were set forth in UBE’s
Purchase Order.


 


Subject to Section 11 of
this Restated Agreement, the initial term of this Restated Agreement shall
commence on the date of the Agreement and shall continue thereafter until the
date which is two (2) years after the Substantial Completion Date (as defined
below).  The term “Substantial Completion Date” means 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 HR and
the general contractor for the construction of the Plant.  HR will keep
UBE reasonably apprised of the estimated date of the Substantial Completion
Date, and will give UBE prompt notice of the actual date of the Substantial
Completion Date.  HR and 


 


2

















 


UBE acknowledge that the current estimated date for
the Substantial Completion Date is some time in September, October or November
of 2005, and that the Plant will not reach full production capacity until
approximately thirty (30) days after the commencement date of production
operations at the Plant.  Subject again to Section 11 of this Restated
Agreement, this Restated Agreement shall be automatically renewed after the end
of the initial term for successive one (1) year terms unless either party gives
written notice to the other party of its election not to renew, for whatever
reason or for no reason, not later than ninety (90) days prior to the
expiration of the initial term or the then current one (1) year renewal term,
as the case may be.


 


2.            
PRICE AND PAYMENT.


 


                               
A.            PRICE. 
UBE agrees to pay HR for all Distiller’s Grains removed by UBE from the Plant
as follows:


 


                                               
1.            
Intentionally Left Blank.


 


                                               
2.             To
UBE Customers.  For purposes of this Restated Agreement, “UBE
Customers” shall mean any buyer of DDG or WDG from UBE.


 


                                                               
a.             DDG. 
A price equal to [***] percent ([***]%) of the F.O.B. Plant Price for the DDG.


 


                                                               
b.             WDG. 
A price equal to [***] percent ([***]%) of the F.O.B. Plant Price for the WDG.


 


For purposes of this Restated Agreement, the “F.O.B.
Plant Price” shall mean the sale price and other amounts billed or invoiced to
the UBE Customer in question (other than amounts which are for reimbursement of
out-of-pocket costs/expenses of UBE), less all freight costs incurred by UBE in
delivering the Distiller’s Grains to the UBE Customer in question.


 


UBE will communicate and
consult with HR about prices and trends in the dried distiller’s grains and wet
distiller’s grains markets on a weekly basis so that both parties are informed
regarding pricing and trends.


 


UBE will allocate its
purchases of dried distiller’s grains and wet distiller’s grains among HR and
UBE’s other suppliers of dried distiller’s grains and wet distiller’s grains in
a fair, reasonable and consistent manner, but UBE will submit Purchase Orders
to HR for purchases of all of the Distiller’s Grains.


 


                               
B.            Intentionally
Left Blank.


 


                               
C.            PAYMENT. 
On a daily basis, weekends and holidays excluded, HR shall provide UBE with
weight certificates (which certificates will be in accordance with Section 6.C
below) for the previous day’s shipments of Distiller’s Grains, and UBE shall
pay HR the F.O.B. Plant Price for all such shipments.  The weight
certificates with respect to any shipments which 


 


3

















 


are made on a weekend or a holiday will be provided to
UBE on the next succeeding business day.  Payment for all shipments shall
be made by UBE so that payment is received by HR on or before the second (2nd)
following Friday of each one week shipment period (Sunday through
Saturday).  Each payment shall be accompanied by a detail of the shipments
which are the subject of the payment and documentation supporting the amount of
the payment.  Any payment which is not received by HR when due shall bear
interest from the date due, until paid, at the rate of ten percent (10%) per
annum.


 


UBE agrees to maintain
complete, accurate and up-to-date sales records and to provide such records to
HR upon request.  HR shall also have the right to audit UBE’s sales
invoices and records at any time during normal business hours at the corporate
office of UBE.  If HR’s review of any such sales records or any such audit
reveals any shortages or deficiencies in the amount of any of the payments
required to be made by UBE to HR pursuant to this Restated Agreement (an
“Unpaid Amount”), UBE shall pay HR the Unpaid Amount, along with interest
thereon at the rate provided above, within ten (10) days of HR’s written notice
to UBE of the Unpaid Amount.  HR’s notice must include the basis for the
calculation of the Unpaid Amount.  UBE shall also pay, or reimburse HR
for, the out-of-pocket costs and expenses incurred by HR in connection with the
review or audit if the review or audit in question reveals a shortage or
deficiency of [***] percent ([***]%) or more in the aggregate amount of
payments that were required to be made by UBE to HR with respect to any month.


 


                               
D.            DUTIES
OF UBE.  UBE will devote commercially reasonable efforts and such time
as is necessary to diligently market and promote the sale of all of the
Distiller’s Grains to UBE Customers.  Without limiting the generality of
the foregoing, UBE agrees as follows:


 


1.            
UBE agrees to use commercially reasonable efforts to achieve the highest price
for Distiller’s Grains available under prevailing market conditions.


 


                                               
2.             UBE
shall comply with all applicable local, provincial, state, federal or other
governmental laws, rules, regulations, ordinances and orders.


 


                                               
3.             UBE
shall promptly notify HR of any material problems or questions raised by any
UBE Customer with respect to any Distiller’s Grains or UBE’s relationship or
dealings with such UBE Customer regarding any Distiller’s Grains.


 


                                               
4.             UBE
shall advise HR of any matter regarding the Distiller’s Grains which comes to
the attention of UBE which raises an issue of compliance of the Distiller’s
Grains with applicable local, provincial, state, federal or other governmental
laws, rules, regulations, ordinances or orders.


 


                                               
5.             UBE
shall not do or omit to do any act or thing, during the term of this Restated
Agreement or at any time thereafter (where such action or inaction was
intentional or malicious or constituted gross negligence or willful
misconduct), which impairs, damages or destroys the goodwill or reputation of
HR or that is otherwise detrimental to HR or its business.


 


 


4

















 


                                               
6.             UBE
shall recognize, both during and after the term of this Restated Agreement, the
exclusive right and ownership of HR in and to all names, trade names,
trademarks, service marks, patents, copyrights and all other intellectual
properties used by HR in connection with the Distiller’s Grains or in HR’s
business.


 


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


 


                                               
8.             UBE
shall not engage in any negligent, illegal or fraudulent activities in
connection with the performance of any services, duties or obligations under
this Restated Agreement, including, without limitation, providing any
fraudulent, false or incorrect information to any UBE Customer or any
deceptive, fraudulent, misleading, false or incorrect information to HR.


 


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


 


                               
E.             COLLECTION. 
UBE shall be responsible for all UBE customer billing and account servicing,
including, but not limited to, the collection of amounts owed UBE by all UBE
Customers.  UBE shall bear all costs and expenses associated with such
billing, account servicing and collection activities, and shall bear all losses
due to the failure of any UBE Customers to pay their account.  HR shall
comply with the credit policies of UBE which are set forth in Exhibit “E” to
this Restated Agreement with respect to any sales of Distiller’s Grains which
are effectuated by any HR Merchandiser (as that term is defined in Section 3).


 


               
3.             HR
MERCHANDISER:  UBE acknowledges and agrees that HR may, in HR’s
discretion, retain a merchandiser for the Plant who may assist and participate
in the sale of Distiller’s Grains and otherwise in the development and the
maintenance of the Plant’s capabilities for the sale of Distiller’s Grains, all
as authorized and directed by HR from time to time (the “HR
Merchandiser”).  UBE agrees to fully cooperate and communicate with any
such HR Merchandiser from time to time and to otherwise coordinate the HR
Merchandiser’s activities with those of UBE under this Restated
Agreement.  The HR Merchandiser shall be an employee and agent of HR.


 


               
4.             FEES
AND EXPENSES.  Unless otherwise specifically provided for herein or
related to any amounts received or retained by UBE or any of the services or
actions of UBE, and to the extent not already included in the price of the
Distiller’s Grains, HR shall be responsible for any and all fees and expenses
assessed by any State or other regulatory agency on any Distiller’s Grains,
whether for licensing, dues, branding, packaging, inspecting, or
otherwise.  HR shall, as a result of its responsibility for such expenses,
retain all rights in and to any name, 


 


5

















 


branding, and packaging of the Distiller’s Grains upon termination of this Restated
Agreement.  UBE shall, however, consult with HR regarding licensing, dues,
branding, packaging, inspections and other governmental or regulatory matters
regarding dried distiller’s grains and wet distiller’s grains.


 


               
5.             DELIVERY
AND TITLE.


                               
A.            PLACE. 
The place of delivery for all Distiller’s Grains purchased by UBE pursuant to
this Restated Agreement shall be F.O.B. Plant.  UBE shall, in accordance
with Section 5.E below, schedule the loading and shipping of all Distiller’s
Grains purchased hereunder, whether shipped
by truck or rail.  UBE and its agents shall be given access to the Plant
in a manner and at all times reasonably necessary and convenient for UBE to
take delivery in accordance with such loading schedules.  All labor and
equipment necessary to load Distiller’s Grains purchased hereunder onto UBE’s
trucks or rail cars at the Plant shall be supplied by HR without charge to
UBE.  The parties agree to handle the Distiller’s Grains during the
loading process in a good and workmanlike manner in accordance with the other’s reasonable requirements and in accordance
with normal industry practice.  HR shall
maintain the truck/rail loading facilities at the Plant in safe operating
condition.


 


                               
B.            STORAGE. 
HR shall provide storage space for not less than ten (10) full days combined
production of WDG and DDG (the “Storage Limit”), based on the then current
nameplate operating capacity of the Plant.  The initial nameplate
operating capacity of the Plant is 100,000,000 gallons of ethanol per year,
which is expected to produce approximately 26,787 tons of Distiller’s Grain per
month on a dry matter basis.


 


                               
C.            REMOVAL. 
UBE warrants and agrees to use its best efforts to remove Distiller’s Grains
before the Storage Limit is exceeded.  UBE shall immediately notify HR in
writing (a “Storage Notice”) in the event UBE determines that UBE will not, for
whatever reason, remove some Distiller’s Grains before the Storage Limit is
exceeded.  The giving of a Storage Notice does not, however, relieve UBE
of its duties and obligations under this Restated Agreement.  Subject to
UBE’s removal of the Distiller’s Grains before the Storage Limit is exceeded,
HR shall be responsible at all times for the quality and condition of any
Distiller’s Grains in storage at the Plant.


 


D.           
SALE OR DISPOSAL BY HR.  Notwithstanding any term or condition of
this Restated Agreement which may appear to be to the contrary, if (i) UBE
gives HR a Storage Notice, (ii) UBE has not provided HR with a schedule in
accordance with Section 5.E below, or (iii) UBE does not remove some
Distiller’s Grains before the Storage Limit is exceeded, for whatever reason
(including under Section 15 of this Restated Agreement), then, in any such
event, HR may, in its discretion, but is not required to, dispose of such
Distiller’s Grains as are from time to time necessary to cause the Storage
Limit to not be exceeded, and upon terms and conditions determined by HR, and
notwithstanding the fact that some or all of the Distiller’s Grains in question
were the subject of an Accepted Purchase Order.  In the latter event, the
Accepted Purchase Order or Accepted Purchase Orders in question shall be deemed
to be terminated by HR, without liability to UBE.


 


6

















 


                               
E.            
LOADING SCHEDULE.  UBE shall give to HR a loading schedule of
quantities of Distiller’s Grains to be removed by truck and rail respectively
in accordance with Section 5.F below and with such sufficient advance notice so
as to reasonably allow HR to determine that the Storage Limit will not be
exceeded and for HR to provide the services required by Section 5.A above and
this Section 5.E.  Subject to the foregoing, HR shall provide the labor,
equipment and facilities necessary at the Plant to meet UBE’s loading schedule.
UBE shall order and supply trucks as scheduled for truck shipments.  All
shipment, freight and related charges shall be the responsibility of UBE and
shall be billed directly to UBE.  Demurrage charges will be for the account
of UBE if UBE fails to provide railcars in accordance with the loading schedule
provided to HR.  Subject to the first sentence in this paragraph,
demurrage charges will be for the account of HR if HR fails to load railcars in
accordance with UBE’s loading schedule.


 


F.            
PRODUCTION SCHEDULE.


 


               
                               
1.             UBE
shall provide Purchase Orders and related loading schedules as necessary to
permit HR to maintain its usual, full operating capacity production schedule,
provided, however, that UBE shall not be responsible for failure to provide
Purchase Orders for the Distiller’s Grains produced in any given calendar month
unless HR shall have provided to UBE production schedules as follows:  At
least five (5) days prior to the beginning of each calendar month which
commences after the Substantial Completion Date and thereafter during the term
hereof, HR shall provide to UBE a tentative schedule for production in the next
calendar month, and on Wednesday of each week during each such calendar month,
HR shall provide to UBE a schedule for actual production for the following
production week (Monday through Sunday).  HR shall also inform UBE daily
of inventory and production status by 8:30 a.m., local time.


 


                                               
2.            
NOTICE.  For purposes of this Section 5.F, notification will be
sufficient if made as follows:


 


If to UBE, to the attention of
       , Facsimile number
       Email address:
      , and


 


If to HR, to the attention of
       , Facsimile number
       , Email address:
      .


 


Or to such other representatives of UBE or HR as they
may designate to the other in writing.


 


                               
F.             TITLE.  
Title, risk of loss and full shipping responsibility for Distiller’s Grains
shall pass to UBE at the point in time when the loading of the Distiller’s
Grains into trucks or rail cars at the Plant has been completed.


 


                               
G.            RAIL
CAR LEASES.  UBE shall, in consultation with HR, determine the number
of rail car leases required to handle the transportation of the Distiller’s
Grains.  The rail car leases shall be in UBE’s name, and UBE shall
negotiate, in consultation with HR, the terms 


 


7

















 


of such rail car leases, but UBE shall not enter into
any such rail car lease without HR’s prior written approval of such lease,
which approval shall not be unreasonably withheld or delayed.  Each such
rail car lease must in all events, however, be applicable only to rail cars to
be used exclusively in connection with the Plant and must be assignable, at any
time and for any reason, to HR or its successors or assigns without the consent
of the lessor, and such rail car leases shall be deemed to be automatically
assigned to HR by UBE effective upon the termination date of this Restated
Agreement.  UBE shall in all events be and remain responsible, however,
for any and all breaches of and defaults under any rail car lease by UBE. 
HR shall reimburse UBE for any reasonable expenses incurred by UBE associated
with such rail car leases, to the extent such expenses are not already
accounted for in the price of the Distiller’s Grains.


 


                               
H.            RAIL
CONTRACTS.  UBE shall negotiate, in consultation with HR, the terms of
rail contracts and rates on behalf of HR, and if such contracts are acceptable
to HR, HR shall execute each such contract, which shall be placed in the sole
name of HR.  UBE shall, however, if permitted by the terms of the rail
contracts, directly pay all freight, costs and other amounts payable under such
rail contracts.  If UBE is not permitted to directly pay all such freight,
costs and other amounts, HR shall pay such freight, costs and other amounts,
but UBE shall reimburse HR for all such freight, costs and other amounts within
five (5) days of HR’s written demand therefore from time to time.


 


6.            
QUANTITY AND WEIGHTS.


 


                               
A.            PRODUCTION
AMOUNT.  Notwithstanding any term or condition of this Restated
Agreement or of any schedule or other document or information provided by HR
pursuant to this Restated Agreement which may appear to be to the contrary, it
is understood that the total production amount of Distiller’s Grains shall be
determined by HR’s production schedule, which shall be established and
determined from time to time by HR, in HR’s discretion, and that no warranty or
representation has been made by HR as to the exact quantities or timing of
Distiller’s Grains to be produced at the Plant.


 


                               
B.            ESTIMATED
PRODUCTION.  UBE acknowledges that the estimated production of
Distiller’s Grains at the Plant is 26,787 tons of Distiller’s Grains per month
on a dry matter basis once the Plant is initially fully operational, but that
HR may (but is not required to) expand the capacity of the Plant.  If HR
determines to materially expand the capacity of the Plant, HR shall give UBE written
notice of such expansion, and of the estimated production of Distiller’s Grains
at the Plant after such expansion, at least one hundred eighty (180) days
before the estimated completion date of the construction activities related to
such expansion.


 


                               
C.            SCALES.
The quantity of Distiller’s Grains provided to UBE from the Plant shall be
established by weight certificates, obtained from scales of HR or another
person which are certified as of the time of loading in accordance with any
requirements imposed by any governmental or regulatory authorities of the State
of Iowa and which otherwise materially comply with all applicable laws, rules
and regulations.  In the case of rail shipments, however, the first official
railroad weights will govern establishment of said quantities.  These
outbound weight certificates shall be determinative of the quantity of the
Distiller’s Grains provided to UBE.


 


 


8

















 


D.           
RAIL CARS.  All rail cars for Distiller’s Grains shall be grain
hopper cars.  HR agrees that such cars for Distiller’s Grains shall be
loaded to full visible capacity at the Plant.  If not loaded to full
visible capacity at the Plant, HR shall pay in full the portion of freight
charges allocable to the unused capacity of the car.


 


7.            
QUALITY.


 


                               
A.            STANDARDS. 
HR understands that UBE intends to sell the Distiller’s Grains purchased from
HR as a primary animal feed ingredient.  HR warrants that the Distiller’s
Grains sold to UBE shall, immediately prior to the time of loading at the
Plant, meet the minimum quality standards outlined in Exhibit C attached
hereto.  The minimum quality standards set forth in Exhibit C may be
changed as may be mutually agreed in writing by and between UBE and HR.


 


                               
B.            COMPLIANCE. 
HR represents and warrants that immediately prior to the time of loading at the
Plant, the Distiller’s Grains will not be adulterated or misbranded within the
meaning of the Federal Food, Drug and Cosmetic Act and may lawfully be
introduced into interstate commerce under said Act.


 


C.           
REJECTION.  Unless otherwise agreed between the parties to this Restated
Agreement, and in addition to other remedies permitted by law, UBE may, without
obligation to pay, reject either before or after delivery, any of the
Distiller’s Grains which, when inspected or used are found by UBE to fail in a
material way to conform to Section 7.B of this Restated Agreement; provided,
however, that HR must receive written notice of rejection of a load of
Distiller’s Grains on such basis from UBE within twenty-four (24) hours of the
delivery of such Distiller’s Grains to the first delivery location after
leaving the Plant or such Distiller’s Grains shall conclusively be deemed to be
accepted by UBE, except that if delivery to such first delivery location occurs
on a Saturday or a Sunday or on a United States federally recognized holiday,
written notice of rejection must be received by HR by 5:00 p.m. on the next
following business day or the Distiller’s Grains shall conclusively be deemed
to be accepted by UBE.  Should any of the Distiller’s Grains be seized or
condemned by any federal or state department or agency for any reason, except
noncompliance by UBE with applicable federal or state requirements or any term
or condition of this Restated Agreement, such seizure or condemnation shall
operate as a rejection by UBE of the Distiller’s Grains seized or condemned and
UBE shall not be obligated to offer any defense in connection with the seizure
or condemnation.  However, UBE agrees to cooperate with HR in connection
with the defense of any quality or other product claims, or any claims
involving governmental seizure or condemnation.  When rejection properly
occurs before or after delivery, UBE will, in the following order:


 


(1)  Offer HR a
reasonable opportunity of examining and taking possession thereof, if the
condition of the Distiller’s Grains reasonably appears to UBE to permit such
delay in making disposition;


 


 


9

















 


(2)  Dispose of the
rejected Distiller’s Grains in any manner directed by HR which UBE can
accomplish without violation of applicable laws, rules, regulations or property
rights; or


 


(3)  If any of the
Distiller’s Grains are seized or condemned by any federal or state department
or agency or if UBE has no available means of disposal of rejected Distiller’s
Grains and HR fails to direct UBE to dispose of the same as provided herein,
UBE may return such Distiller’s Grains to HR, and upon such return UBE’s
obligations with respect to said seized, condemned or rejected Distiller’s
Grains shall be deemed fulfilled.


 


                                               
HR shall reimburse UBE for all costs actually and reasonably incurred by UBE in
storing, transporting, returning and disposing of any properly rejected
Distiller’s Grains.  UBE shall provide HR with reasonable substantiating
documentation for all such costs and expenses.  UBE shall have no
obligation to pay HR for properly rejected Distiller’s Grains and may deduct
reasonable costs and expenses to be reimbursed by HR pursuant to this Section
7.C from amounts otherwise owed by UBE to HR.


 


               
UBE’s payment for Distiller’s Grains prior to a rejection thereof does not
waive UBE’s rights under this Section 7.C.


 


D.          
NON-STANDARD PRODUCTS.  If HR produces Distiller’s Grains which
comply with the warranty in Section 7.B but which do not meet the warranty in
Section 7.A, UBE agrees to purchase such Distiller’s Grains for resale but
makes no representation or warranty as to the price at which such Distiller’s
Grains can be sold.  If the Distiller’s Grains deviate so severely from
the warranty in Section 7.A as to be unmarketable in UBE’s reasonable judgment,
then such Distiller’s Grains shall, subject to UBE’s compliance with Section
7.C, be disposed of in the manner provided for rejected Distiller’s Grains in
Section 7.C.


 


E.          
PRODUCT TESTING.  If HR knows or reasonably suspects that any
Distiller’s Grains produced at the Plant do not meet the warranty in Section
7.A or Section 7.B, HR shall promptly so notify UBE so that such Distiller’s
Grains can be tested before loading the Distiller’s Grains at the Plant. 
If UBE knows or reasonably suspects that any Distiller’s Grains produced at the
Plant do not meet the warranty in Section 7.A or Section 7.B, then UBE may
obtain independent laboratory tests of the affected Distiller’s Grains. 
If such Distiller’s Grains are tested and found to comply with the warranty in
Section 7.A and Section 7.B, then UBE shall pay all testing costs, and if the
Distiller’s Grains are found not to comply with the warranty in Section 7.A and
Section 7.B, HR shall pay all testing costs.


 


8.            
RETENTION OF SAMPLES.


 


                               
A.            SAMPLING. 
HR will take an origin sample of the Distiller’s Grains sold to UBE from each
truck or rail car before each shipment leaves
the Plant, using industry standard sampling methodology.  HR will label
these samples to indicate the date of shipment and the truck, rail car, or
pickup number involved.  HR shall retain the samples and labeling
information for no less than six (6) months for DDG samples and no less than
fourteen (14) days for WDG.


 


 


10

















 


                               
B.            ANALYSIS. 
For the first year of operation of ethanol production at the Plant, HR shall,
within two (2) days after the close of each calendar week, furnish UBE with a
composite analysis on all Distiller’s Grains produced at the Plant during such
calendar week.  Thereafter, HR
shall, within ten (10) days of the close of each calendar month, furnish UBE
with a composite analysis on all Distiller’s Grains produced at the Plant
during such month.  The composite analysis shall address the matters set
forth in Exhibit D hereto and shall be in a format reasonably acceptable to UBE
and HR.  The matters set forth in Exhibit D or the then current format for
the composite analysis may be changed as may be mutually agreed in writing by
and between UBE and HR.  It is understood that each such analysis will be
a composite and may or may not be indicative of any particular DDG or WDG or
the current analysis, and that no composite is a representation or warranty by
HR or otherwise a part of this Restated Agreement.


 


9.            
INSURANCE.


 


                               
A.            POLICIES. 
HR warrants to UBE that all HR’s employees engaged in the loading of
Distiller’s Grains from the Plant shall be covered as required by law by
worker’s compensation and unemployment compensation insurance.


 


                               
B.            COVERAGES. 
During the term of this Restated Agreement, HR shall maintain commercial
general liability insurance with combined single limits of not less than
$2,000,000 and property insurance upon the Plant to the full replacement value
of the Plant.  The policies of commercial general liability insurance and
property insurance shall be endorsed to require at least thirty (30) days
advance notice to UBE prior to the effective date of any termination or
cancellation of coverage, and HR shall cause UBE to be named as an additional
insured on HR’s commercial general liability insurance policies.  The
policies of commercial general liability insurance and property insurance shall
also contain provisions to the effect that in the event of payment of any loss
or damage the insurers will have no rights of recovery against UBE.  HR
waives all rights against UBE and UBE’s employees and agents for all losses and
damages caused by, arising out of or resulting from any perils or causes of
loss if and to the extent covered by such policies of commercial general
liability insurance or property insurance.  HR shall provide UBE with
certificates of insurance to confirm such coverage.


 


                               
C.            UBE
INSURANCE AND VEHICLES.  During the term of this Restated Agreement,
UBE shall maintain commercial general liability insurance with combined single
limits of not less than $2,000,000.  The policy of commercial general
liability insurance shall be endorsed to require at least thirty (30) days
advance notice to HR prior to the effective date of any termination or
cancellation of coverage, and UBE shall cause HR to be named as an additional
insured on UBE’s commercial general liability insurance policies.  The
policies shall also contain provisions to the effect that in the event of
payment of any loss or damage the insurers will have no rights of recovery
against HR.  UBE waives all rights against HR and HR’s employees and
agents for all losses and damages caused by, arising out of or resulting from
any perils or causes of loss if and to the extent covered by such policies of
commercial general liability insurance.  UBE also agrees to carry such
insurance on its vehicles and personnel operating on HR’s property as UBE reasonably deems appropriate.  The
parties acknowledge that UBE may elect to self insure its vehicles.  UBE
shall provide certificates of insurance to HR to establish the coverage
maintained by UBE.


 


 


11

















 


D.           
CONSEQUENTIAL DAMAGES.  EACH PARTY TO THIS RESTATED AGREEMENT
UNDERSTANDS THAT NO OTHER PARTY MAKES ANY GUARANTEE, EXPRESS OR IMPLIED, TO ANY
OTHER PARTY OF PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS
CONTEMPLATED BY THIS RESTATED AGREEMENT.  IN NO EVENT SHALL ANY PARTY BE
LIABLE TO THE OTHER PARTY FOR SPECIAL, COLLATERAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES FOR ANY ACT OR OMISSION OF THE PARTY, OR FOR BREACH OF ANY OF THE
PROVISIONS OF THIS RESTATED AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE NOT LIMITED
TO, LOSS OF GOOD WILL, LOSS OF PROFITS, LOSS OF USE, AND INTERRUPTION OF
BUSINESS. NOTWITHSTANDING THE FOREGOING, HOWEVER, THE PARTIES DO NOT WAIVE ANY
DAMAGES OR LOSSES THAT RESULT FROM OR ARISE OUT OF A BREACH OF SECTION 19 OF
THIS RESTATED AGREEMENT OR FROM OR OUT OF ANY WILLFUL MISCONDUCT, GROSSLY
NEGLIGENT ACTS OR GROSSLY NEGLIGENT OMISSIONS.


 


                               
E.             OTHER
CLAIMS.  Except as provided in Section 9.D above, nothing herein shall
be construed as a waiver by either party against the other party of claims,
causes of action or other rights which either party may have or hereafter
acquire against the other party for damage or injury to its agents, employees,
invitees, property, equipment or inventory, or third party claims against the
other party for damage or injury to other persons or the property of others.


 


10.          
REPRESENTATIONS AND WARRANTIES.


 


               
A.            Each party
represents and warrants that it is an entity in good standing under the laws
that it is organized and has all the requisite power and authority to carry on
its business as it has been and to own, lease, and operate the properties and
assets used in connection therewith.


 


B.           
HR represents and warrants that the Distiller’s Grains HR sells to UBE shall be
free and clear of liens and encumbrances created by HR.


 


               
C.            Each party
represents that this Restated Agreement has been duly authorized, executed and
delivered by the party, and constitutes the legal, valid and binding obligation
of the party, enforceable against the party in accordance with its terms.


 


               
D.            Each party
represents that the execution and performance of this Restated Agreement do not
and will not conflict with, breach or otherwise violate any of the provisions
of the organizational or governing documents of the party or of any agreement,
document or instrument by which the party is bound.


 


               
E.             Each
individual executing this Restated Agreement in a representative capacity, by
his or her execution hereof, represents and warrants that such person is fully
authorized to do so on behalf of the respective party hereto, and that no
further action or consent 


 


12

















 


on the part of the party for whom such signatory is
acting is required for the effectiveness and enforceability of this Restated
Agreement against such party, following such execution.


 


                               
F.             EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN
SECTIONS 7.A, 7.B, 10.A, 10.B, 10.C AND 10.D OF THIS RESTATED AGREEMENT, HR
DOES NOT MAKE ANY EXPRESS WARRANTIES WHATSOEVER REGARDING ANY DISTILLER’S
GRAINS OR ANY OTHER MATTER WHATSOEVER, AND HR HEREBY EXCLUDES AND DISCLAIMS IN
ENTIRETY ALL IMPLIED WARRANTIES WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO ALL DISTILLER’S GRAINS AND ALL OTHER
MATTERS WHATSOEVER.


 


11.          
TERMINATION.


 


                               
A.            FOR
CAUSE.  Either party may terminate this Restated Agreement for cause,
by providing written notice to the other party.  The term “cause” shall
mean the happening of an event of default listed in Section 12 below.


 


                               
B.           
WITHOUT CAUSE.  Either party may terminate this Restated Agreement
with or without cause, for any reason or no reason, by providing ninety (90)
days prior written notice to the other party.  If HR terminates this
Restated Agreement pursuant to this Section 11.B during the initial term of
this Restated Agreement, however, then HR shall pay to UBE, within thirty (30)
days of termination, the amount of $75,000.


 


                               
C.            TERMINATION
OF OTHER DISTILLER’S GRAINS MARKETING AGREEMENTS.  HR or UBE may, in
their discretion, terminate this Restated Agreement in the event of the
termination of any other dried distiller’s grains and/or wet distiller’s grains
marketing agreements by and between HR and UBE, effective upon the giving of
written notice to the other; provided, however, that such notice must be given
by at least the date which is thirty (30) days after the termination date of
such other dried distiller’s grains and/or wet distiller’s grains marketing
agreement.


 


                               
D.            OTHER
TERMINATION.  This Restated Agreement may also be terminated as
provided in Section 1 and Section 15 of this Restated Agreement.


 


                               
E.             EFFECT
OF TERMINATION.  The termination of this Restated Agreement, for
whatever reason or for no reason, will not affect any liability of either HR or
UBE under this Restated Agreement which accrued prior to termination,
including, but not limited to, any liability for loss or damage on account of
breach or nonfulfillment of or default under any term or condition of this
Restated Agreement, nor shall the termination of this Restated Agreement, for
whatever reason or for no reason, affect any of the terms of this Restated
Agreement which contemplate performance by or continuing obligations of a party
beyond the termination of this Restated Agreement, including, without
limitation, the obligations of the parties under Sections 16 and 19 of this
Restated Agreement.


 


 


13

















 


12.          
EVENTS OF DEFAULT.  The occurrence of any of the following shall be
an event of default allowing for the termination of this Restated Agreement
under Section 11.A:  (1) failure of either party to make payment to the
other when due, if such nonpayment
has not been cured within five (5) days of the receipt of written notice
thereof from the nonbreaching party; (2) default by either party in the
performance of any covenant, condition or agreement imposed upon that party by
this Restated Agreement (other than a payment obligation), if such nonperformance
has not been cured within ten (10) days of the receipt of written notice
thereof from the nonbreaching party; (3) if either party shall make a general
assignment for the benefit of creditors or to an agent authorized to liquidate
any substantial amount of its assets, or be adjudicated bankrupt, or file a
petition in bankruptcy and such petition is not dismissed within ninety (90)
days following the date of filing, or apply to a court for the appointment of a
receiver for any of its assets or properties with or without consent, and such
receiver shall not be discharged within ninety (90) days following appointment.


 


               
13.           REMEDIES. 
Upon the happening of an event of default under Section 12, the parties hereto
shall have all remedies available under applicable law with respect to an event
of default by the other party, including but not limited to the recovery of
attorneys’ fees and other costs and expenses, but subject to Section 9.D. 
Without limiting the foregoing, the parties shall have the following remedies
whether in addition to or as one of the remedies otherwise available to
them:  (1) to declare all amounts owed immediately due and payable; and
(2) to terminate this Restated Agreement upon the giving of notice in
accordance with the provisions of Section 11.A.


 


               
14.           OPEN
CONTRACTS.  Upon the termination of this Restated Agreement, for
whatever reason, HR shall be responsible for making available to UBE, in
accordance with the terms and conditions of this Restated Agreement, any
remaining quantities of Distiller’s Grains which are the subject of an Accepted
Purchase Order and which have not yet been picked up by UBE in accordance with
Section 5, provided UBE complies with its obligations under Section 5 and UBE
provides HR with reasonable assurances of payment to HR for all such remaining
Accepted Purchase Orders.


 


               
15.           FORCE
MAJEURE.  Neither HR nor UBE will be liable to the other for any
failure or delay in the performance of any obligation under this Restated
Agreement (except for payment obligations and under Section 19) due to events
beyond its reasonable control, including, but not limited to, fire, storm,
flood, earthquake, explosion, act of the public enemy or terrorism, riots,
civil disorders, sabotage, strikes, lockouts, labor disputes, labor shortages,
war, stoppages or slowdowns initiated by labor, transportation embargoes,
failure or shortage of materials, acts of God, or acts or regulations or
priorities of the federal, state or local government or branches or agencies
thereof; provided, however, that if such failure or delay continues for ten
(10) days or more, either party may terminate this Restated Agreement effective
thirty (30) days following the giving of written notice to the other.


 


16.          
INDEMNIFICATION.


 


                               
A.            BY HR. 
Except as otherwise provided in this  Restated Agreement, including
Section 9.D, HR shall indemnify,
defend and hold UBE and its officers, directors, employees and agents harmless
from any and all losses, liabilities, damages, expenses (including 


 


14

















 


reasonable attorneys’ fees), costs, claims, and
demands, that UBE or its officers, directors, employees or agents may suffer,
sustain or become subject to as a result of (i) any breach of warranty,
covenant or agreement of HR contained herein or (ii) HR’s or its employees’ or
agents’ gross negligence or willful misconduct.


 


B.           
BY UBE.  Except as otherwise provided in this Restated Agreement,
including Section 9.D, UBE shall
indemnify, defend and hold HR and its officers, managers, members, employees
and agents harmless from any and all losses, liabilities, damages, expenses (including
reasonable attorneys’ fees), costs, claims, and demands, that HR or its
officers, managers, members, employees or agents may suffer, sustain or become
subject to as a result of (i) any breach of warranty, covenant or agreement of
UBE contained herein or (ii) UBE’s or its employees’ or agents’ gross
negligence or willful misconduct.


 


C.           
Where any personal injury or death is the result of negligence on the part of
both HR and UBE, each party’s duty of indemnification shall be in proportion to
the percentage of that party’s negligence or fault.


 


               
17.           RELATIONSHIP
OF PARTIES.  This Restated Agreement creates no relationship other
than those of seller and buyer between the parties hereto.  Specifically,
there is no agency, partnership, joint venture or other joint or mutual
enterprise or undertaking created hereby.  Nothing contained in this
Restated Agreement authorizes one party to act for or on behalf of the other
and neither party is entitled to commissions from the other.


 


               
18.           TRADE RULES. 
All purchases and sales of Distiller’s Grains made hereunder shall, to the
extent they are otherwise expressly applicable, be governed by the Feed Trade
Rules of the National Grain and Feed Association unless otherwise specified,
and said Trade Rules shall, to the extent expressly applicable, be a part of
this Restated Agreement as if fully set forth herein; provided, however, that
in the event of a conflict or inconsistency between any term or provision of
such Trade Rules and any term or condition of this Restated Agreement, this
Restated Agreement shall govern and control to the full extent of such conflict
or inconsistency.  Notwithstanding the foregoing, the Arbitration Rules of
the National Grain and Feed Association shall not be applicable to this
Restated Agreement and, except as provided in Section 20 below, nothing herein
contained shall be construed to constitute an agreement between the parties to
submit disputes arising hereunder to arbitration before any organization or
tribunal.


 


               
19.           CONFIDENTIALITY. 
The parties acknowledge that they may have access to certain confidential
information of the other party and that such information constitutes valuable,
special and unique property to such party.  The parties agree that they
will not at any time during or for a period of five (5) years after the
termination of this Restated Agreement, in any fashion, form or manner, either
directly or indirectly, divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any such confidential information;
provided, however, that (i) HR may make disclosures and reports regarding this
Restated Agreement and the transactions contemplated hereby to the extent HR
deems necessary or appropriate or as may be required in connection with any
debt or equity financing as may from time to time be pursued or obtained by HR
or any affiliate of HR, including to any prospective or actual lenders or
investors and to actual or potential assignees or transferees of any such
lender or in connection 


 


15

















 


with a foreclosure, assignment in lieu of foreclosure
or exercise of any rights or remedies by any such lender; (ii) HR and UBE may
make disclosures regarding this Restated Agreement and the transactions
contemplated thereby to their respective legal counsel and accountants; and
(iii) the reasonable use of any confidential information as part of or in
connection with the transactions contemplated by this Restated Agreement during
the term of this Restated Agreement is permitted.  For purposes of this
Restated Agreement, the term “confidential information” shall mean all
information, documentation or financial data which is proprietary or
confidential in nature and which is used by or belongs to or relates to either
party which is disclosed or made available to the other party, its agents,
employees or advisors, including but not limited to the prices charged for
services hereunder or any other information concerning the other party’s
business, manner of operation, plans, processes or other data of any
kind.  “Confidential information” shall not include, however, any of the
following information and/or types of information:  (a) information of a
party that at the time furnished to the other party is in the public domain or
later becomes part of the public domain by publication or otherwise through no
fault of the other party or its employees or agents; (b) information of a party
that was independently developed by the other party by persons without access
to or knowledge of, or any use of, the confidential information of the party;
or (c) information of a party that was obtained by the other party on a
nonconfidential basis from a source or a third party entitled to disclose it.


 


               
If the confidential information of a party is required to be disclosed by the
other party 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.


 


               
Each party agrees that the other party would be irreparably damaged by reason
of any violation of the provisions contained in this Section 19 and that any
remedy at law for a breach of such provisions would be inadequate. 
Therefore, a party shall be entitled to seek injunctive or other equitable
relief in a court of competent jurisdiction against the other party or its
agents or employees, for any breach or threatened breach of any of the
provisions contained in this Section 19 without the necessity of proving actual
monetary loss.  It is expressly understood that the remedy described in
this Section 19 shall not be the exclusive remedy of a party for any breach of
this Section 19, and such party shall also be entitled to seek any other relief
or remedy, at law or in equity, to which it may be entitled as a consequence of
any breach of this Section 19.


 


               
Nothing in this Section 19 is intended or shall be construed as requiring any
party to furnish any confidential information to the other party, except to the
extent necessary for a party to perform and provide the services and duties
required of that party under this Restated Agreement.


 


             
20.     DISPUTE RESOLUTION.  The parties shall
attempt to settle amicably any dispute or difference of any kind whatsoever
arising out of or in connection with the validity or invalidity, construction,
execution, meaning, operation or effect or breach of this Restated Agreement
(except for any such dispute or difference involving Section 19).  If the
parties do not promptly do so, either party may, by written notice to the other
party, call for private mediation of the 


 


16

















 


issue before a mediator to be agreed upon by the
parties.  The parties agree to conclude such private mediation within
thirty (30) days of the filing by a party of a request for such
mediation.  In the event of a dispute between the parties that is not
resolved by such mediation, either party may, by written notice to the other
party, call for private, binding, non-appealable arbitration of the issue
before a single arbitrator agreed upon by the parties.  In the event a single
arbitrator cannot be agreed upon within ten (10) days of the end of the private
mediation, each party shall appoint a third party arbitrator from a list
provided by the American Arbitration Association (AAA) (not a principal of a
party) and the two arbitrators thus selected by the parties shall select a
third arbitrator.  The arbitrators shall meet as expeditiously as possible
to resolve the dispute, and a majority decision of the arbitrators shall be
controlling.  While each party is free to select an arbitrator of its own
choosing from the list provided by the AAA, either party by written notice to
the other may require that all arbitrators chosen have sufficient expertise in
the subject matter of the arbitration that they would qualify as “expert
witnesses” in a judicial proceeding.


 


The arbitrators so chosen shall conduct the
arbitration in accordance with the Rules of the AAA as applicable in the State
of Iowa.  Such arbitration shall take place at a mutually agreed upon
location in Iowa.  The arbitrators shall be governed, in their
determinations hereunder, by the intention of the parties as evidenced by the
terms of this Restated Agreement.  The decision of the arbitrators shall
be rendered in writing and shall be final and binding upon the parties and shall
be non-appealable.  Judgment upon the award rendered may, however, be
entered by either party and enforced in any court having competent
jurisdiction.  The parties shall share the procedural costs of the
mediation and arbitration equally.  Each party shall pay its own
attorney’s fees and costs incurred by it relating to the mediation and
arbitration.  Notwithstanding the foregoing sentences, the parties hereby
authorize the arbitrators to award costs and fees to the prevailing party as
the arbitrators deem appropriate.


 


Pending resolution of such dispute or difference and
without prejudice to their rights, the parties shall continue to respect all
their obligations and to perform all their duties under this Restated
Agreement; provided, however, the parties shall not be obligated to perform
their obligations after this Restated Agreement has been terminated by any
party pursuant to Section 11, or if such termination is the dispute being
arbitrated.


 


After signing this Restated Agreement, each party understands
that it will not be able to bring a lawsuit concerning any dispute that may
arise that is covered by this arbitration provision (other than to enforce the
arbitration decision).  The parties hereby agree that any dispute or
difference involving Section 19 shall not be subject to this mediation or
arbitration provision.


 


               
21.           MISCELLANEOUS.


 


                               
A.            This
Restated Agreement, together with any exhibits hereto, is the complete
understanding and agreement of the parties to this Restated Agreement with
respect to the subject matter of this Restated Agreement, and no other
representations or agreements shall be binding upon the parties, or shall be
effective to interpret, change or restrict the provisions of this Restated
Agreement. This Restated Agreement supersedes the Amended Agreement in its
entirety.   HR hereby objects to any additional, different or
inconsistent terms which may be set forth in any Accepted Purchase Order, any
Purchase Order or any other document that UBE may 


 


17

















 


at any time submit to HR, and no such additional,
different or inconsistent terms shall be a part of any Accepted Purchase Order
or this Restated Agreement or shall have any force or effect whatsoever. 
In the event of any conflict or inconsistency between any terms and conditions
of this Restated Agreement and any terms or conditions of any Purchase Order or
Accepted Purchase Order, the terms and conditions of this Restated Agreement
shall govern and control to the full extent of such conflict or inconsistency.


 


                               
B.            No course
of dealings between the parties and no usage of trade, except where expressly
incorporated by reference, shall be relevant or admissible to supplement,
explain, or vary any of the terms of this Restated Agreement.


 


                               
C.            Acceptance
of, or acquiescence in, a course of performance rendered under this or any
prior agreement shall not be relevant or admissible to determine the meaning of
this Restated Agreement even though the accepting or acquiescing party has
knowledge of the nature or the performance and an opportunity to make
objection.


 


                               
D.            This
Restated Agreement may be executed in multiple counterparts, all of which shall
constitute but one and the same instrument.  Facsimile or e-mail
signatures shall be deemed as originals as between the parties.


 


                               
E.             This
Restated Agreement can only be modified by a writing signed by all of the
parties or their duly authorized agents.


 


                               
F.             The
Section headings herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Restated Agreement.


 


                               
G.            This
Restated Agreement shall be construed and performed in accordance with the laws
of the State of Iowa.


 


                               
H.            The
respective rights, obligations and liabilities of the parties under this
Restated Agreement are not assignable or delegable without the prior written
consent of the other party, which shall not be unreasonably delayed,
conditioned or withheld; provided, however, that HR may, without the consent of
UBE, (i) assign its rights and obligations under this Restated Agreement to any
affiliate of HR, and (ii) assign this Restated Agreement as collateral,
security or otherwise to any lender of HR or any affiliate of HR, and any such
lender may in turn assign this Restated Agreement upon any foreclosure or other
exercise of any rights or remedies against HR or any affiliate of HR.


 


                               
I.             
Time shall be of the essence in the performance of this Restated Agreement.


 


                               
J.             This
Restated Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.


 


                               
K.            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, 


 


18

















 


paragraph or provision.


 


                               
L.             This
Restated Agreement shall not be construed more strongly against any party
regardless of who was more responsible for its preparation.


 


                               
M.           Subject to
Section 20 of this Restated Agreement, HR and UBE submit 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 Restated
Agreement.  HR and UBE agree that all claims and counterclaims with
respect to any such action or proceeding may be heard and determined in any
such United States or Iowa court, and they each waive any objection, including,
without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which they may now or hereafter have to the
bringing of any action or proceeding in any such United States or Iowa court.


 


                               
N.            HR and UBE
waive any right to a jury trial in or otherwise with respect to any suit,
action, proceeding, claim, counterclaim, demand or other matter whatsoever
arising out of this Restated Agreement.


 


                               
O.            This Restated
Agreement may be executed in counterparts, including by facsimile or e-mail,
all of which shall constitute one and the same agreement.


 


22.          
RECORDING OF COMMUNICATIONS.  HR acknowledges that some UBE
business telephones and other electronic communication systems are customized
with centralized recording devices for purposes of improving customer service,
improving techniques, eliminating errors and general quality control.  HR
also acknowledges that communications systems used primarily to negotiate the
sale or purchase of commodities or to discuss commodity futures transactions
are recorded by UBE and that other communications may also be recorded by
UBE.  UBE acknowledges that HR may also record any communications between
HR and UBE.


 


               
23.           NOTICES. 
Unless a different method of notice is provided herein, notice shall be deemed
to have been given to the party to whom it is addressed two days after the day
it is deposited in certified U.S. mail, postage prepaid, return receipt
requested, addressed as follows:


 


	
  HR:

  	
   

  	
  Hawkeye Renewables,
  L.L.C.

  
	
   

  	
   

  	
  Attention: JD Schlieman

  
	
   

  	
   

  	
  21050 140th
  Street

  
	
   

  	
   

  	
  Iowa Falls, Iowa 50126

  
	
   

  	
   

  	
   

  
	
  UBE:

  	
   

  	
  United Bio Energy
  Ingredients, LLC

  
	
   

  	
   

  	
  2868 North Ridge Road

  
	
   

  	
   

  	
  Wichita, Kansas 67205

  
	
   

  	
   

  	
  Attn.:

  



 


 


19

















 


               
Either party may change the address for notices hereunder by giving notice of
such change to the other party in the manner above provided.


 


 


20

















 


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


 




	
   

  	
   

  	
  Hawkeye Renewables,
  L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ J.D. SCHLIEMAN

  	
   

  
	
   

  	
   

  	
  By: J.D. Schlieman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  United Bio Energy
  Ingredients, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ RANDY IVES

  	
   

  
	
   

  	
   

  	
  By: Randy Ives

  






 


Exhibit A
-             Fixed
Distiller’s Grains Purchase Order Form [Section 1]


Exhibit B
-             
Posted Price Distiller’s Grains Purchase Order Form [Section 1]


Exhibit C -
            
Minimum Quality Standards [Section 7.A]


Exhibit D
-             
Composite Analysis Matters [Section 8.B]


Exhibit E
-             
UBE Credit Policy [Section 2.E]


 


21

















 


EXHIBIT
A


 


UNITED
BIO ENERGY INGREDIENTS, LLC


FIXED
DISTILLER’S GRAINS PURCHASE ORDER


Dated:  _____________________, 20___


 


                United Bio Energy Ingredients,
LLC (“UBE”) hereby submits this Purchase Order for Distiller’s Grains to
Hawkeye Renewables, L.L.C. (“HR”) pursuant to that certain Restated Distiller’s
Grains Marketing Agreement between UBE and HR dated as of ___________________,
200__ (as the same may be amended, the “Restated Agreement”).


 


1.             Aggregate Amount of Distiller’s Grains:                             ________________ of
DDG


                                                                                                                    ________________
of WDG


                                                                                                                    ________________
of modified WDG


 


2.             Pick Up Dates for Distiller’s Grains (strike out all
that do not apply):


 


(a)   ______________ of Distiller’s Grains on the _____ day of each
month commencing on _____________, ________ and continuing up to and including
_____________, ______.


 


(b)   _____________ of Distiller’s Grains on each of _______________,
______;  ______________, ______;  _______________, ______;  and _______________, ______.


 


(c)   All of the Distiller’s Grains on _______________, ______.


 


(d)   Other: __________________________________.


 


3.             Minimum F.O.B. Plant Price for
Distiller’s Grains:          _______________
for DDG


                                                                                                                                _______________ for WDG


                                                                                                                                _______________
for modified WDG


 


This Purchase Order is irrevocable as provided in the Restated
Agreement.


 


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


 


	
   

  	
  UNITED
  BIO ENERGY INGREDIENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						



 

















 


 


ACCEPTANCE
OR REJECTION


 


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


 


	
   

  	
  HAWKEYE
  RENEWABLES, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							



 


 


2

















 


EXHIBIT
B


 


UNITED
BIO ENERGY INGREDIENTS, LLC


POSTED
PRICE DISTILLER’S GRAINS PURCHASE ORDER


Dated:  _____________________, 20___


 


                United Bio Energy Ingredients,
LLC (“UBE”) hereby submits this Purchase Order for Distiller’s Grains to
Hawkeye Renewables, L.L.C. (“HR”) pursuant to that certain Restated Distiller’s
Grains Marketing Agreement between UBE and HR dated as of ___________________,
200__ (as the same may be amended, the “Restated Agreement”).


 


1.             Maximum Amount of
Distiller’s Grains:                               ________________
DDG


                                                                                                                    ________________
WDG


                                                                                                                    ________________
modified WDG


 


2.             Type of Sale
(initial the one that applies):                                       ___  All or Nothing


                                                                                                                                ___  Best Efforts to Sell in


                                                                                                                                        Whole or in Part


 


3.             Pick Up Dates for Distiller’s
Grains (strike out all that do not apply):


 


(a)   ______________ of Distiller’s Grains on the _____ day of each
month commencing on _____________, ________ and continuing up to and including
_____________, ______.


 


(b)_____________ of Distiller’s Grains on each of
__________________________, ______;


______________, ______;  _______________, ______;  and _______________, ______.


 


(c)   All of the Distiller’s Grains on _______________, ______.


 


(d)   Other: __________________________________.


 


4.             Minimum F.O.B. Plant Price for
Distiller’s Grains:          ________________  for DDG


                                                                                                                                ________________  for WDG


                                                                                                                                ________________  for modified WDG


 


5.             Time Period Over Which the Posted Price Will Be
Effective (the “Posted Price Sales Period”); _________________________.


 


This Purchase Order is irrevocable as provided in the Restated
Agreement.  UBE does not, however, have a
binding obligation to purchase any Distiller’s Grains pursuant to this Purchase
Order unless and until UBE enters into an agreement with a third party for the
sale of the Distiller’s Grains by UBE to such third party during, and for
pick-up by UBE during, the Posted Price Sales Period.


 


3

















 


 


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


 


	
   

  	
  UNITED
  BIO ENERGY INGREDIENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						



 


 


ACCEPTANCE
OR REJECTION


 


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


 


	
   

  	
  HAWKEYE
  RENEWABLES, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,
  20

  	
   

  
							



4

















EXHIBIT C


 


MINIMUM QUALITY STANDARDS


 


	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  DDG

  	
   

  	
  Protein

  	
   

  	
  26%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  7.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  15%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  5%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  10%

  	
   

  	
  13%

  



 


	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  WDG

  	
   

  	
  Protein

  	
   

  	
  10.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  3%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  5%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  2.5%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  60%

  	
   

  	
  N/A

  



 


	
   

  	
   

  	
  Component

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  
	
  Modified WDG

  	
   

  	
  Protein

  	
   

  	
  15.0%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fat

  	
   

  	
  4.5%

  	
   

  	
  N/A

  
	
   

  	
   

  	
  Fiber

  	
   

  	
  N/A

  	
   

  	
  9.0%

  
	
   

  	
   

  	
  Ash

  	
   

  	
  N/A

  	
   

  	
  4.0%

  
	
   

  	
   

  	
  Moisture

  	
   

  	
  50%

  	
   

  	
  55%

  



 


The
Distiller’s Grains shall have Aflatoxin levels of less than 20 pbb.  The Distiller’s Grains shall be no warmer
than the higher of (i) the daily high of the ambient outside temperature or
(ii) 60 degrees Fahrenheit.  The
Distiller’s Grains shall not have a musty, moldy or sour smell or other
commercially objectionable odor.  The
Distiller’s Grains must be able to pour freely into the shipping container.


 


5

















 


EXHIBIT
D


 


COMPOSITE
ANALYSIS MATTERS


 


MOISTURE, %


DRY MATTER, %


CRUDE PROTEIN, %


A.D. FIBER, %


N.D. FIBER, %


CRUDE FIBER, %


ASH, %


TOTAL DIGEST NUTRS., %


NET ENERGY, MAIN.


NET ENERGY, GAIN


NET ENERGY, LACT.


DIG. ENERGY, SWINE


MET. ENERGY, SWINE


CALCIUM, %


PHOSPHORUS, %


ACID FAT, %


 


6

















 


Exhibit E


 


UBE
Credit Policy 


 


 


                UBE
acknowledges that the HR Merchandiser may need to trade with a UBE Customer
before credit risk and credit limits/policies for that UBE Customer can be
fully established by UBE and UBE sets forth the following guidelines for HR to
follow in that circumstance:


 


                1.             New Account Customers.  UBE requests that, prior to shipment of the
first Distiller’s Grains to a new account customer, the customer wire money for
payment of said shipment to UBE before shipment occurs.  Alternatively, the truck driver may pick up a
check payable to UBE from the customer at the time of shipment, but this is not
preferred.


 


                If
the above described payment methods are not possible, UBE grants HR permission
to ship one (1) load to a new account customer based on a reasonable indication
that the customer can and will pay for the shipment within the stated UBE
payment terms.  HR must promptly mail or
fax a credit application to the new account customer, and must follow up on the
same to attempt to ensure the credit application is promptly returned to the
UBE Credit Manager (as defined below).


 


                A
second load may be shipped at the discretion of HR before the completed credit
application has been processed by the UBE Credit Manager; provided, however,
that the UBE Credit Manager must have received the credit application prior to
the shipment of the second load.  All new
accounts are on a two (2) load restriction until the UBE Credit Manager has
reviewed and approved the credit application.


 


                2.             Existing Account Customers.  UBE has a net ten (10) day credit
policy.  HR must communicate to customer
accounts which are established by HR that UBE is to be paid in full no later
than thirty (30) days from the date of UBE’s invoice.  UBE expects HR to contact any customers who
have invoices beyond twenty (20) days from the date of the invoice where the
invoice is on a sale of Distiller’s Grains which was effectuated by the HR
Merchandiser.  UBE’s Credit Manager will
review all customer accounts past thirty (30) days with the HR Merchandiser,
and no additional shipments to any customer in such late status shall occur
without written approval from UBE’s Credit Manager.


 


                3.             Past Due Accounts.  No shipments or contracts may be written by
HR to a customer if said customer account is forty-five (45) or more days past
due.  The UBE Credit Manager must
communicate with the customer and the HR Merchandiser to resolve the issue
before shipments can resume.  The UBE
Credit Manager will provide regular written notices to HR detailing the
customers who are in a “no ship” status. 
If HR chooses to ship to a customer who is listed in a “no ship” status
on the written notice as provided by the UBE Credit Manager without the
approval of the UBE Credit Manager, then HR will be financially responsible on
all such subsequent shipments while the customer is in “no ship” status for
100% of any related invoices, accrued interest charges, or past due amounts
pertaining to such shipments to such customer.


 


 


7

















 


                4.             UBE
Credit Manager.  The term “UBE Credit
Manager” for purposes of this Exhibit E shall mean the individual which has
been designated in writing by UBE as its “Credit Manager”, which written notice
must also designate the mailing address, telephone number, fax number and
e-mail address for such Credit Manager. 
UBE shall be responsible for providing HR with written notice of any
change in the identity of UBE’s Credit Manager or in any contact information
for the UBE Credit Manager, and HR shall be entitled to rely upon all of the
prior information regarding the UBE Credit Manager until receipt of written
notice to the contrary from UBE.  The UBE
Credit Manager as of __________________________, 200__ was
___________________________________________________, with a mailing address of
_________________________________________________, a telephone number of (____)
_____-________, a fax number of (______) ______-________ and an e-mail address
of _____________________________________________.


 


8