Document:

Exhibit 10.1

 

Confidential Treatment Requested. 
Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

 BLACKHAWK BIOFUELS, LLC TOLL
PROCESSING AGREEMENT

 

This Blackhawk Biofuels, LLC Toll Processing Agreement (the “Agreement”)
is made and entered into effective November 1, 2009, by and between
Blackhawk Biofuels, LLC a limited liability company organized and existing
under the laws of the state of Delaware, with offices at 22 South Chicago
Avenue, Freeport, Illinois 61032 (“Blackhawk Biofuels”). and REG Marketing &
Logistics Group, LLC, an Iowa limited liability company (“REG Marketing”), of
416 S. Bell Avenue, PO Box 888, Ames, Iowa 50010 (each a “Party,” and
collectively the “Parties”).

 

Recitals

 

A.                                    Blackhawk
Biofuels is in the business of manufacturing and processing biodiesel from
feedstock at its biodiesel processing facility located at Danville, IL (the “Facility”).

 

B.                                    REG Marketing
desires to arrange for the purchase and delivery of animal fats and other
feedstocks (as specified by the provisions of Section 7 hereafter, herein “Feedstocks”)
to Blackhawk Biofuels for processing into biodiesel meeting the specifications
set out in Section 8 hereafter (herein “Biodiesel”) and Crude Glycerin,
Fatty Acids and Soapstock (“Co-products”) pursuant to a toll processing
arrangement.  Blackhawk Biofuels desires
that REG Marketing arrange for the delivery of Feedstocks for processing at the
Facility.

 

The Agreement

 

In
consideration of the mutual benefits and obligations herein provided and other
good and valuable consideration, Blackhawk Biofuels and REG Marketing agree as
follows:

 

1.                                      Offers to Deliver Feedstocks for Processing.  REG Marketing may
offer to deliver Feedstocks to Blackhawk Biofuels’s Facility at Danville, IL,
during the term of this Agreement.

 

(a)                                 Orders within Facility Commitment.  REG Marketing shall
order the processing of 11.0 million pounds of Feedstocks at the Facility (“Facility
Commitment”). Any such order shall set out the type and quantity of Feedstocks,
and the Production Week for which such Feedstocks are intended for processing (“Order”).  If such Order is timely made, then unless
otherwise agreed by the Parties REG Marketing shall deliver the Feedstocks to
Blackhawk Biofuels in time for production of the Biodiesel, Blackhawk Biofuels
shall process the Feedstocks and test and certify the Biodiesel as meeting the
agreed upon specifications under the applicable Order during such Production
Week, and REG Marketing shall arrange to pick up the resulting Biodiesel during
the two weeks immediately following such Production Week.  Blackhawk Biofuels agrees to provide written
acknowledgment of all Orders placed by REG Marketing.  For purposes of this Agreement, a “Production
Week” shall mean a calendar week beginning at 8:00 a.m. on Monday and
ending at 7:59 a.m. on the following Monday, with weeks designated for
pick up of Biodiesel measured in similar fashion.

 

1

 

As
an example, for the Production Week commencing January 19, 2009, REG
Marketing would need to have delivered its Order for such Production Week on or
before 5:00 p.m. on Monday, January 5, 2009.  If such Order has been timely delivered to
Blackhawk Biofuels, REG Marketing would then deliver in the Feedstocks required
for such Production Week both before and during the production week.  Blackhawk Biofuels would then have the
Production Week of January 19 through January 26, 2009, to complete
production, test and certify the Biodiesel meets the agreed upon specifications
under the applicable Order.  REG
Marketing would then have from January 26 through 7:59 a.m. on February 9,
2009, to pick up the Biodiesel produced for such Production Week.  REG Marketing shall develop a sample “Order/Nomination”
form to be used by the Parties, which shall be attached as Exhibit A
hereto.

 

Any Feedstocks purchased by Bunge North
America, Inc. (“Bunge”) pursuant to the terms of a Feedstock Purchase and
Sale Agreement dated June 30, 2009 (the “Feedstock Agreement”) by and
between Blackhawk Biofuels, REG Marketing and Bunge shall be included in
determining whether the Facility Commitment has been met.  Any purchase of Feedstocks by Bunge, however,
shall be governed exclusively by the terms of the Feedstock Agreement and such
purchases shall not be subject to the terms of this Agreement.

 

(b)                                 Offers in Excess of the Facility Commitment.  REG Marketing may
offer to deliver additional Feedstocks beyond the Facility Commitment, subject
to Blackhawk Biofuels’s acceptance.  Any
such offer (“Nomination”) shall set out the type and quantity of Feedstocks,
the Production Week for which such Feedstocks are intended for production, and
advise of the time period during which Blackhawk Biofuels shall be required to
communicate Blackhawk Biofuels’s acceptance back to REG Marketing (“Offer
Period”).  The parties agree that such
Offer Period will not expire prior to 12:00 o’clock noon, local time at the
Facility, on the business day following that day during which the Nomination is
delivered, and provided further that (unless waived by Blackhawk Biofuels) a
Nomination shall not propose a Feedstocks delivery schedule with first delivery
date less than seven (7) calendar days after the end of the Offer
Period.  If a Nomination is accepted by
Blackhawk Biofuels (as set out hereafter), then (unless otherwise agreed by the
Parties) REG Marketing agrees to deliver the Feedstocks to Blackhawk Biofuels
pursuant to the terms of the Nomination prior to such Production Week to utilize
in the production of the Biodiesel, Blackhawk Biofuels shall during such
Production Week process the Feedstocks and test and certify the Biodiesel as
meeting the agreed upon specifications under the applicable Nomination, and REG
Marketing shall arrange to pick up the resulting Biodiesel during the two weeks
immediately following such Production Week. 
The sample “Order/Nomination” form to be used by the Parties is attached
as Exhibit A hereto.

 

2

 

*** Confidential material redacted and filed separately
with the Commission.

 

2.                                      Agreement to Process Orders; Consideration of Nominations.

 

(a)                                 Orders within Facility Commitment. Blackhawk Biofuels agrees to process Feedstocks for all
Orders received totaling up to 2.75 million pounds per Production Week, such
processing to be within the time frame as set out in Section 1(a) above
(unless otherwise agreed by the Parties). 
Blackhawk and REG Marketing agree that any shortfall in biodiesel
production or shipments due in the previous Agreement dated October 1st,
2009 may be made up under this Agreement without penalties.

 

(b)                                 Nominations in Excess of Facility Commitment.  In addition, should
REG Marketing offer to deliver Feedstocks in excess of such Facility Commitment,
Blackhawk Biofuels will consider any such Nomination received, and shall have
the right (but not any obligation) to accept Nominations received from REG
Marketing by notice given during the Offer Period.  If Blackhawk Biofuels gives timely acceptance
of a Nomination (pursuant to the provisions set out in this Agreement, herein
an “Acceptance”), then Blackhawk Biofuels agrees to process Feedstocks received
pursuant to the terms of the Nomination (and such other applicable provisions
as set out herein).

 

3.                                      Manner of Extending Order, Nominations, Acceptances.  Notwithstanding any
provisions of Section 26(a) to the contrary, the Parties may submit
Orders, Nominations and Acceptances by telephone or email, provided that any
Order, Nomination or Acceptance submitted by telephone must be followed by
timely confirmation by email.

 

4.                                      Toll Fees and Payment.  Blackhawk Biofuels shall be paid a toll fee
of $ *** for every gallon of Biodiesel at standard temperature and pressure
delivered to REG Marketing, produced at the Facility from the Feedstocks
delivered by REG Marketing for all volumes shipped up to 2,500,000 gallons in a
calendar month. Blackhawk Biofuels shall be paid a toll fee of $ *** for every
gallon of Biodiesel at standard temperature and pressure delivered to REG
Marketing, produced at the Facility from the Feedstocks delivered by REG
Marketing for all volumes shipped in excess of 2,500,000 gallons in a calendar
month. Payment shall be made as follows:

 

(a)                                 The toll Fee under the terms of such Orders or Nominations
by wired funds to Blackhawk Biofuels on the first business day following the 15th for Biodiesel
delivered to REG Marketing from the 1st to the 15th of the month and on
the first business day following the last day of each month for Biodiesel delivered
to REG Marketing on the 16th to the last day of
the month. Delivered to REG Marketing shall mean Biodiesel meeting
specifications loaded per shipping instructions FOB Danville, IL.

 

5.                                      Co-Products.  REG Marketing shall also be entitled to
receive at no additional cost, all glycerin and Fatty Acid produced as a result
of the processing of the Feedstocks.

 

3

 

*** Confidential material redacted and filed separately
with the Commission.

 

6.                                      Methanol and Catalyst.  REG Marketing shall be responsible for the purchase and
delivery of methanol and catalyst to the Facility. The maximum allowed usage of
methanol shall be *** gal of methanol per gallon of biodiesel. The maximum
allowed usage of catalyst shall be *** lbs per gallon of biodiesel. Blackhawk
Biofuels will reimburse REG Marketing for usage of methanol and catalyst above
the maximums. The reimbursement will be paid for overusage at the average price of
the chemicals multiplied by the overusage amount based on the biodiesel
produced on a monthly basis.  REG
Marketing will invoice Blackhawk Biofuels within the first week of the
following month.  Payment terms will be 7
days from receipt of invoice from REG Marketing.  If the actual positive or negative usage
variance performance is greater than 10% from the values given above, the
parties will use data gathered while producing under steady state conditions
and adjust the maximum allowed usages with approval to not be unreasonably
withheld, conditioned or delayed by either party.  Any changes will be contained in an addendum
to this Agreement.

 

7.                                      Maximum Feedstock Usage and Overusage.  In consideration of
the Toll Fee and handling of co-products agreed upon, Blackhawk Biofuels agrees
the Maximum Feedstock Usage(MFU) per Pound of Delivered Biodiesel shall be as
defined in Exhibit B for each Feedstock Type.

 

For feedstocks where a MFU value is
clearly identified and not calculated, the actual overuse, if any, will be
calculated as follows:

 

Overusage based on identified
MCU = A – ( B x MFU)

 

Where A = Actual pounds of
Feedstock delivered from aggregate BOL’s

 

B = Biodiesel produced from
Feedstock in gallons at standard conditions

 

MCU = defined value for
feedstock type

 

For higher FFA feedstocks or blends of feedstocks
that do not have an identified MFU and require the calculation, a daily flow
proportioned representative composite sample shall be tested and the resulting
%FFA will be used in the calculation. for MFU for the resulting production
volume.  For feedstocks where a MFU value
is calculated and not clearly identified, the actual overuse, if any, will be
calculated as follows:

 

Overusage
for High FFA and Blends based on MCU calculation = C – (B x MFU)

 

Where C = Actual pounds of Feedstock delivered
from aggregate BOL’s

 

B = Biodiesel produced from
Feedstock in gallons at standard conditions

 

MFU = “Exhibit B
calculation *1” using daily flow proportioned representative composite sample

 

The reimbursement will be paid for overusage at the
average price of the feedstock multiplied by the overusage amount based on the
biodiesel produced on a monthly basis. 
REG Marketing will invoice Blackhawk Biofuels within the first week of
the following month.  Payment terms will

 

4

 

be 7 days
from receipt of invoice from REG Marketing. 
If the actual positive or negative usage variance performance is greater
than 2% from the values given or calculated in Exhibit B, the parties will
use data gathered while producing under steady state conditions and adjust the
defined MFU or formula “*1” with approval to not be unreasonably withheld,
conditioned or delayed by either party. 
Any changes will be contained in an addendum to this Agreement.

 

8.                                      Feedstocks.  The Feedstocks to be delivered to the
Facility pursuant to this Agreement shall comply with the specifications set
forth on Exhibit B attached hereto or the specific purchase order,
whichever is the more restrictive specification.  For Example, if the tallow specification for
FFA in Exhibit B was <4 and the purchase order defined FFA as less than
<2, then <2 shall be the requirement. 
Prior to accepting deliveries of Feedstocks, Blackhawk Biofuels shall
have the right at its expense to inspect and test the tendered Feedstocks to
determine if it meets the specifications required under this Agreement, and if
any such Feedstocks does not meet the required specifications then Blackhawk
Biofuels shall have the right to reject such Feedstocks and require REG
Marketing, at its cost, to replace the same with Feedstocks that meets the
required specifications.  Should REG
Marketing propose any other type of Feedstocks other than identified on Exhibit B,
the Parties shall agree upon the written specifications and MFU applicable to
such additional feedstock, and approve and attach such specifications and MFU
as an addendum to Exhibit B with approval to not be unreasonably withheld,
conditioned or delayed by either party.

 

9.                                      Biodiesel.  The Biodiesel to be produced pursuant to this
Agreement shall comply with the specifications set forth on Exhibit C
attached hereto.  At REG Marketing’s
request, two (2) - one (1) litre samples of the Biodiesel to be
delivered to REG Marketing by Blackhawk Biofuels shall be made available for
testing at REG Marketing’s cost, prior to REG Marketing picking up such
Biodiesel.  Should inspection and testing
determine that any Biodiesel does not meet the required specifications (whether
determined before or after such Biodiesel has been picked up by REG Marketing,
and including after delivery to REG Marketing’s customers), REG Marketing shall
have the right to reject such Biodiesel, and require Blackhawk Biofuels, at its
cost, to replace the same with Biodiesel that meets the required
specifications.

 

10.                               Term.  The term of this Agreement shall be until November 30th,
2009 and commence upon its signature by the Parties.

 

11.                               Title.  Except as otherwise provided herein, title to
the Feedstocks delivered by REG Marketing pursuant to this Agreement and title
to the contractual amount of corresponding Biodiesel and Co-products produced
from such Feedstocks shall at all times be and remain with REG Marketing.  Any Feedstocks delivered by REG Marketing
pursuant to the terms and conditions of the Feedstock Agreement, however, shall
at all times be and remain with Bunge until such time as title to such
Feedstocks passes to REG Marketing pursuant to the terms of the Feedstock
Agreement.

 

12.                               Risk of Loss; Insurance.  Risk of loss to the Feedstocks and the
Biodiesel and Co-Products produced therefrom shall at all times be borne by REG
Marketing, and REG Marketing will maintain such property insurance on the
Feedstocks and the Biodiesel produced therefrom as REG Marketing shall
determine, in its sole discretion.

 

5

 

Blackhawk Biofuels and REG
Marketing shall each, at its own cost and expense, obtain and maintain, during
the term of this Agreement, comprehensive general liability insurance, in
minimum amounts of Five Million Dollars ($5,000,000) per occurrence for damage,
injury and/or death to persons, and One Million Dollars ($1,000,000) per
occurrence for damage and/or injury to property and Worker’s Compensation
Insurance as required by law.  Such
coverage shall be on a date of occurrence form, and be provided by an insurance
company reasonably satisfactory to the other Party.  Blackhawk Biofuels and REG Marketing shall
each provide the other with proof of such insurance coverage prior to any Feedstocks
being delivered, such insurance naming the other Party as an additional
insured, and providing that the coverage represented thereby shall not be
canceled nor modified unless at least thirty (30) days prior written notice has
been given to the additional insured.

 

13.                               Inventory Reports.
 Blackhawk Biofuels will provide REG
Marketing with daily reports showing the receipt, usage and inventory of
Feedstocks, methanol and catalyst, and shipments, production and inventory of
Biodiesel and Co-products produced.

 

14.                               Production Costs.  Other than for the cost of the Feedstocks,
methanol, and catalyst purchased and delivered by REG Marketing, Blackhawk
Biofuels shall be responsible for all costs of producing the Biodiesel required
under this Agreement, including without limitation all labor costs and the cost
of utilities, chemicals other than methanol and catalyst and other consumables
used in such production.

 

15.                               Testing.  Blackhawk Biofuels shall be responsible for
the cost of testing to fully certify the Biodiesel meets the specifications identified
in the Order or Nomination.  All sampling
and testing shall be in conformance with BQ-9000 rules and regulations.

 

16.                               Freight Costs.  REG Marketing will bear the cost of all
freight charges for the Feedstocks, methanol, and catalyst purchased by REG
Marketing, and Biodiesel and Co-Products to be produced therefrom, pursuant to
this Agreement.

 

17.                               Protection of REG Marketing’s Title.  In order to better
evidence REG Marketing’s ownership of the Feedstocks and the Biodiesel produced
therefrom, Blackhawk Biofuels hereby authorizes REG Marketing on its behalf, at
any time and from time to time to file protective financing statements in any
Uniform Commercial Code jurisdiction, which may include without limitation any
initial financing statements and amendments thereto that (i) describe the
Feedstocks, and the Biodiesel that is the subject of this Agreement, and (ii) contain
any other information required or appropriate to be included pursuant to the
Uniform Commercial Code of the state where filed, including that the
organizational identification number of Blackhawk Biofuels is 20-2760722.  Blackhawk Biofuels agrees to furnish any such
information to REG Marketing promptly upon request.  Blackhawk Biofuels will not purport to
pledge, mortgage or create, or suffer to exist a security interest in the
Feedstocks and the Biodiesel that is produced therefrom, in favor of any third
party, and Blackhawk Biofuels, upon the request of REG Marketing or in response
to any inquiry that may be made, will inform any lender, lessor or other third
party that has or may have a lien or security interest or any other interest in
property of Blackhawk Biofuels that REG Marketing is the owner of the
Feedstocks and the Biodiesel that is the subject of this Agreement.  “Notwithstanding anything to the contrary set
forth herein, Blackhawk Biofuels and REG Marketing acknowledge and agree that
pursuant to the terms of the Feedstock Agreement, Bunge shall have title in the
Feedstocks

 

6

 

purchased by Bunge pursuant to
the terms of the Feedstock Agreement, and Bunge shall have the right to file
precautionary financing statements and amendments and/or continuations thereto
pursuant to the Uniform Commercial Code to further evidence and memorialize its
absolute ownership interest in the Feedstocks.”

 

18.                               Product Segregation.  REG Marketing, on behalf of Blackhawk
Biofuels, shall be allowed to add additional Feedstocks owned by REG Marketing
as needed to meet the quality and yield requirements hereunder, so long as such
additional Feedstocks have cold flow characteristics that are capable of
meeting the cold flow specifications set out on the applicable Order or
Nomination, and the Biodiesel to be produced shall in any event meet the
specifications required hereunder, as modified by the Order or Nomination and
Acceptance applicable.  In such event,
REG Marketing shall off-set any costs for such additional Feedstocks against
the toll fees to be paid by REG Marketing pursuant to Section 4 hereof.  Pursuant to the terms of the Feedstock
Agreement, Blackhawk Biofuels shall allow Bunge to store the Feedstocks at the
Facility; provided, however, such Feedstocks shall be segregated from any
Feedstocks owned by REG Marketing pursuant to the terms of this Agreement.

 

19.                               Failure to Process.  If for any reason other than REG Marketing’s
failure to deliver Feedstocks, methanol, and catalyst as required under this
Agreement (and other than a matter covered by the force majeure provisions of
this Agreement) Blackhawk Biofuels fails to process the Feedstocks in to the
certified Biodiesel within the time frame contemplated by this Agreement,
Blackhawk Biofuels will pay to REG Marketing the amount determined by first
dividing the number of pounds of Feedstocks delivered to Blackhawk Biofuels by
the Maximum Feedstock Usage per gallon yield under Section 7 and
converting to gallons to determine the gallons of Biodiesel which should have
been processed (“Required Gallons”); second, subtracting the actual gallons of
Biodiesel received by REG Marketing from the Required Gallons to determine the
number of gallons which Blackhawk Biofuels failed to process (“Biodiesel
Shortage”); and third,  multiply the
Biodiesel Shortage by REG Marketing’s average market price per gallon of
Biodiesel delivered by Blackhawk Biofuels to REG Marketing up to such time of
computation (or if none delivered another reasonable method of determining the
market value of Biodiesel FOB Danville as may be agreed by the Parties, or
otherwise determined if the Parties can not so agree).

 

20.                               Facility Shutdowns.  Blackhawk Biofuels agrees to notify REG
Marketing of any scheduled shutdowns a minimum of thirty (30) days in
advance.  In the event there are any
Facility shutdowns due to unscheduled power or mechanical problems which will
affect receiving or shipping schedules or are anticipated to continue for
twenty-four (24) hours or more Blackhawk Biofuels will notify REG Marketing as
soon as possible.

 

21.                               Tax Credits; Blending, Shipping & Loading.  Blackhawk Biofuels
will, at the request of REG Marketing, blend the Biodiesel with petroleum
diesel (supplied by Blackhawk Biofuels at its cost) to create B99.9 biodiesel
at no additional charge to REG Marketing. 
Any excise tax or income tax credit or refund, including any blender’s
credit or CCC credit or refund (“Tax Credits”) relating to the Biodiesel
delivered to REG Marketing will be for the account of REG Marketing, and shall
be submitted (as applicable) to the United States Internal Revenue Service (“IRS”)
or other appropriate entity by Blackhawk Biofuels, unless otherwise requested
by REG Marketing Blackhawk Biofuels will not claim any Tax Credits relating to
the Biodiesel delivered to REG Marketing without the written consent of REG
Marketing.

 

7

 

In addition, Blackhawk Biofuels
shall fulfill the requests regarding additives and load temperature as set out
on the “Shipping/Loadout Request” form supplied by REG Marketing and complete
the loadout information for each load of Biodiesel shipped, all as set out on
the attached as Exhibit D hereto.

 

22.                               RINs and Biodiesel Certificates.  Blackhawk Biofuels
and REG Marketing shall cooperate with each other to generate Renewable
Identification Numbers (RINs) for the gallons of Biodiesel produced pursuant to
this Agreement, with such RINs to be the property of REG Marketing.  Blackhawk Biofuels and REG Marketing shall
also cooperate with each other to issue biodiesel certificates for the
Biodiesel produced pursuant to this Agreement, which certificates shall be
suitable for REG Marketing’s use in collecting the $1.00 per gallon blender’s
tax credit.  For purposes of clarity, all
gallons for these purposes shall be calculated on a temperature corrected basis
(at 60°
F).

 

23.                               Force Majeure.  Neither Party hereto shall be liable for any
delay arising from circumstances beyond its control including acts of God, riot
or civil commotion, industrial dispute, fire, flood, drought, act of
government, terrorist acts, war, or sabotage (except failures or delays
resulting from a lack of a Party’s funds), provided that the Party seeking to
be excused shall make every reasonable effort to minimize the delay resulting
therefrom and shall give prompt written notice of the force majeure event to
the other Party.  The obligations of the
Party giving notice, so far as they are affected by the force majeure event,
will be suspended during, but not longer than, the continuance of the force
majeure event.  The affected Party must
act with commercially reasonable diligence to resume performance and notify the
other Party that the force majeure event no longer affects its ability to
perform under the Agreement.

 

24.                               Independent Contractor.  Blackhawk Biofuels is acting hereunder and
its services are rendered to REG Marketing solely as an independent
contractor.  REG Marketing is not
authorized and shall not contract any obligations in the name of Blackhawk
Biofuels as a result of this Agreement (the Parties understanding that REG
Marketing may have such authority as may arise from other contracts entered in
to by the Parties, and including that Management and Operational Services
Agreement dated August 22, 2006 (“MOSA”)). 
Blackhawk Biofuels accepts full and exclusive liability for the payment
of any and all contributions or taxes for unemployment and workers’
compensation insurance, old age retirement benefits, pensions and annuities now
or hereafter imposed by any federal or state governmental authority which are
measured by wages, salaries or other remuneration paid to persons, and holds
harmless REG Marketing from any such liability. 
Blackhawk Biofuels agrees that in performing its duties contemplated by
this Agreement it shall comply with all applicable federal and state laws,
orders and regulations, and, to its knowledge, represents and warrants that the
Facilities are in compliance with existing environmental laws and regulations
and OSHA standards which may apply to the activities to be performed by
Blackhawk Biofuels hereunder.

 

25.                               Confidentiality.

 

(a)                                 “Confidential Information” of Blackhawk Biofuels and REG
Marketing includes the terms of this Agreement, the Feedstocks composition, the
biodiesel specifications, all business information of Blackhawk Biofuels and
REG Marketing, including, but not limited to, their respective pricing,
supplier lists, quantities of supplies purchased, all processing and
manufacturing information of

 

8

 

Blackhawk Biofuels and REG Marketing,
all processes and information used in the processing of Feedstocks into
Biodiesel, and all other confidential or proprietary information of Blackhawk
Biofuels and REG Marketing.  All “Confidential
Information” shall remain the sole property of the original owner of that
information.

 

(b)                                 Blackhawk Biofuels and REG Marketing agree that (except as
necessary for REG Marketing to meet its obligations under the MOSA) they shall
not for any purpose use or disclose to any third party any Confidential
Information not owned by it. Such confidentiality obligations shall survive the
expiration or earlier termination of this Agreement.

 

26.                               Default.  Each Party will be entitled to all damages
(including costs and reasonable attorney fees incurred in enforcement of such
Party’s rights hereunder) and other rights and remedies available at law or in
equity, in addition to any other remedies as may be provided in this Agreement,
upon the default or other failure to perform of the other Party; provided,
however, that before taking action to enforce such breach or terminating this
Agreement the Party claiming default or failure to perform shall first provide
the defaulting Party with written notice detailing the circumstances of its
failure to meet its obligations hereunder and an opportunity to cure such
failure within ten (10) days of such notice.

 

27.                               Miscellaneous.

 

(a)                                 Notices.  Any notice (including Nominations and
Acceptances) required or permitted to be given pursuant to this Agreement is
validly given if in writing and: (i) personally delivered; (ii) sent
by electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy and a confirmation of delivery; or (iii) sent
by prepaid registered mail or recognized overnight carrier, addressed to the
applicable party at its address indicated below or to such other address as any
party may specify by notice in writing to the other.  Any notice personally delivered on a business
day will be deemed conclusively to have been effectively given on the date
notice was delivered.  Any notice given
by facsimile or other means of electronic communication will be deemed
conclusively to have been given on the date specified on the confirmation of
such transmission.  Any notice sent by
prepaid registered mail will be deemed conclusively to have been effectively
given when actually received.  Notices
shall be addressed as follows:

 

	
  If
  to REG Marketing:

  	
  416 S. Bell Avenue, PO Box
  888

  
	
   

  	
  Ames, IA 50010

  
	
   

  	
  Attn: Gary Haer

  
	
   

  	
  Fax: (515) 239-8029

  
	
   

  	
   

  
	
  If to Blackhawk Biofuels:

  	
  210 West Spring Street

  
	
   

  	
  Freeport, Illinois 61032

  
	
   

  	
  Attn: Ron Mapes

  
	
   

  	
  Fax: (815) 235-4727

  

 

9

 

Any party may change the address to which notices are to be sent to it
by giving written notice of such change of address to the other parties in the
manner herein provided for giving notice. 
Any such notice, demand, request or other communication shall be deemed
given when mailed or delivered as aforesaid.

 

(b)                                 Cumulative Remedies.  The rights and remedies provided to Blackhawk
Biofuels and REG Marketing in this Agreement, or otherwise available at law or
in equity, shall be cumulative and may be exercised concurrently or
successively.

 

(c)                                  Governing Law/Choice of Forum.  This Agreement shall be deemed made and
entered unto in the State of Iowa and shall be governed and construed under and
in accordance with the laws of the State of Iowa without resort to said state’s
conflict of laws rules.  The U.S.
District Court for the Southern District of Iowa, or if such court lacks
jurisdiction, the Iowa District Court for Story County, Iowa, shall be the
venue and exclusive proper forum in which to adjudicate any case or controversy
arising either, directly or indirectly, under or in connection with this
Agreement.  The Parties further agree
that, in the event of litigation arising out of or in connection with these
matters, they will not contest or challenge the jurisdiction or venue of these
courts.

 

(d)                                 Amendments.  This Agreement may not be modified or amended
unless a written amendment to this Agreement is executed by REG Marketing and
Blackhawk Biofuels.

 

(e)                                  Severability.  If any provision of this Agreement may be
construed in two ways, one of which would render the provision illegal or
otherwise voidable and unenforceable and the other of which would render the
provision valid and enforceable, such provision shall have the meaning which
renders it valid and enforceable.  The
language of all provisions of this Agreement shall be construed according to
its fair meaning and not strictly against REG Marketing or Blackhawk
Biofuels.  It is the intention of the
Parties that the provisions of this Agreement be enforced to the fullest
extent.  In the event that any court
shall determine that any provision of this Agreement is unenforceable as
written, the Parties agree that the provision shall be amended so that it is
severable and they shall be interpreted and enforced as if all completely
invalid or unenforceable provisions were not contained in this Agreement.  Partially valid and enforceable provisions
shall be enforced to the extent that they are partially valid and enforceable.

 

(f)                                   Captions.  Section captions are used only for
convenience and are in no way to be construed as a part of this Agreement or as
a limitation of the scope of the particular sections to which they refer.  Words of any gender used in this Agreement
shall include any other gender, and words in the singular shall include the
plural where the context requires.

 

10

 

*** Confidential material redacted and filed separately
with the Commission.

 

(g)                                  Assignment.  Neither Party may assign any of its rights in
or delegate any of its duties under this Agreement without the prior written
consent of the other Party.  Notwithstanding
the foregoing, a Party (“Assignor”) may without the need for consent from the
other Party assign any or all of its rights, duties and obligations under this
Agreement to another entity, or to such Party’s affiliate or successor
(collectively herein “Assignee”), if such Assignee expressly assumes all
obligations not otherwise remaining with Assignor hereunder, and Assignor
nonetheless remains responsible hereunder.

 

(h)                                 Interpretation.  This Agreement has been prepared after
extensive negotiation between the Parties hereto, and if any ambiguity is
contained herein, then in resolving such ambiguity, no weight shall be given in
favor of or against either Party solely on account of its drafting this
Agreement.

 

(i)                                     Entire Agreement.  Time is of the essence of this
Agreement.  This Agreement together with
the Exhibits referenced herein constitute the entire agreement by and between
the Parties and all prior written and verbal agreements, proposals,
representations and other communications between the Parties regarding this
tolling arrangement are superseded.

 

(j)                                    Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the
same instrument, and may be executed and delivered by facsimile signature or
similar means, which shall be considered an original.

 

(k)                                 Most Favored Terms.  Blackhawk Biofuels represents and warrants as
of the date hereof and covenants and agrees from and after the date hereof that
none of the provisions offered to any other person or entity is or will be more
favorable to such person or entity than those offered under this Agreement,
and, if they are or become more favorable to any other person or entity during
the term of this Agreement or any continuation or extension thereof, Blackhawk
Biofuels shall give written notice thereof to REG Marketing, and REG Marketing
shall have the option (which option must be exercised by written notice to
Blackhawk Biofuels with ten (10) business days after notice thereof) to
amend this Agreement to include any such more favorable terms.  If such option is exercised, Blackhawk
Biofuels and REG Marketing shall execute an appropriate written amendment to
this Agreement.

 

(l)                                     MOSA Fee.  In view of the fact that this Agreement is to
process Feedstocks owned by REG Marketing for the benefit of REG Marketing, REG
Marketing agrees that Blackhawk Biofuels shall not be required to pay the
variable fee of $ *** /gal under the MOSA for the volume of Biodiesel processed
for and delivered to REG Marketing under this Agreement.  Blackhawk BioFuels shall continue to pay the
Fixed fee of $ *** per month as outlined in the MOSA.

 

11

 

IN WITNESS WHEREOF, Blackhawk
Biofuels and REG Marketing have executed this Agreement as of the date first
shown above.

 

	
  BLACKHAWK BIOFUELS, LLC

  	
   

  	
  REG MARKETING & LOGISTICS GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ RONALD L. MAPES

  	
   

  	
  By:

  	
  /s/ GARY HAER

  
	
  Name

  	
  Ronald L. Mapes

  	
   

  	
  Name:

  	
  Gary Haer

  
	
  Title

  	
  Chair

  	
   

  	
  Title:

  	
  Vice President Sales and Marketing

  

 

12

 

 

Exhibit A

 

(Form of Order/Nomination)

 

                  ORDER
NUMBER                                                                                                                             or                                                                             
NOMINATION NUMBER

 

	
  For Production Week beginning:

  	
  /

  	
  /

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date Sent to Blackhawk BioFuels, LLC:

  	
  /

  	
  /

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date Reviewed by Blackhawk BioFuels, LLC:

  	
  /

  	
  /

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Blackhawk BioFuels, LLC’s Action: (circle)             ACCEPT              
  or            REJECT

  
	
   

  	
   

  	
   

  	
   

  
	
  Date Accepted/Rejected by Blackhawk BioFuels, LLC:

  	
  /

  	
  /

  	
   

  

 

	
  Product Specification 

  	
  o   REG – 9000 ASTM 

  
	
   

  
	
  o   REG – 9000 EN

  
	
   

  	
   

  
	
  Cold Flow Specification 

  	
  o   Cloud        °C 

  
	
   

  
	
  o   CFPP        °C

  

 

	
  FEEDSTOCK TYPE

  	
   

  	
  Lbs ORDERED

  	
   

  	
  Contr. Yield

  	
   

  	
  Contr. Gallons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  Date

  	
   

  	
   

  	
  Date

  
	
  REG Marketing & Logistics Group, LLC.

  	
   

  	
  Blackhawk BioFuels, LLC.

  

 

 

*** Confidential material redacted and filed separately
with the Commission.

 

 

“Exhibit B”

 

REG Feedstock Specifications

 

	
   

  	
   

  	
  Analytical 

  	
   

  	
  Free Fatty

  Acid

  (as Oleic)

  	
   

  	
  Moisture

  	
   

  	
  Insoluble

  Impurities

  	
   

  	
  Total MIU

  	
   

  	
  Phosphorus

  	
   

  	
  Color

  (FAC

  Scale)

  	
   

  	
  Maximum

  Feedstock

  Usage per

  Gallon of

  BioDiesel

  (MFU)

  	
   

  
	
   

  	
   

  	
  Method

  	
   

  	
  AOCS Ca

  	
   

  	
  AOCS Ca

  	
   

  	
  AOCS Ca

  	
   

  	
   

  	
   

  	
  AOCS Ca

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feedstock

  	
   

  	
  Feedstock

  	
   

  	
  5a-40

  	
   

  	
  2c-25

  	
   

  	
  3a-46

  	
   

  	
  calc

  	
   

  	
  12-55

  	
   

  	
  AOCS Ca

  	
   

  	
   

  	
   

  
	
  Group

  	
   

  	
  Type

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  ppm

  	
   

  	
  13a-43

  	
   

  	
  Lbs/Gal

  	
   

  
	
   

  	
   

  	
  RB Soy

  	
   

  	
  <0.25

  	
   

  	
  <0.3

  	
   

  	
  <0.05

  	
   

  	
  <1.5

  	
   

  	
  <20

  	
   

  	
  Clear & bright

  	
   

  	
  7.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Crude Degummed Soy

  	
   

  	
  <1.0

  	
   

  	
  <0.3

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <200

  	
   

  	
  Typical

  	
   

  	
  7.60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Distillers Corn Oil

  	
   

  	
  <15

  	
   

  	
  <1.0

  	
   

  	
  <0.5

  	
   

  	
  <2.5

  	
   

  	
  <20

  	
   

  	
  Typical

  	
   

  	
  8.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Edible Tallow

  	
   

  	
  <0.75

  	
   

  	
  <0.2

  	
   

  	
  <0.05

  	
   

  	
  <1.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  7.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Animal Fats

  	
   

  	
  Tallow

  	
   

  	
  <4

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Poultry Fat/Grease

  	
   

  	
  <8.0

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Choice White Grease

  	
   

  	
  <4

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yellow Grease & UFO

  	
   

  	
  < 15

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * (1)

  	
   

  

 

* (1) Calculation for Maximum Feedstock Usage using high FFA feedstocks

 

Maximum Feedstock Usage = (*** x % FFA)
+***

Example: Tested FFA = ***

 

Max Usage = (*** x ***%) + *** = *** lbs/gal
of Biodiesel

 

14

 

 

Attachment C

 

REG-9000Ô ASTM

 

Based
off ASTM D6751 Specifications

 

	
  Test Parameter

  	
   

  	
  REG-9000Ô  

  Limit

  	
   

  	
  Units

  	
   

  	
  Test Method

  (current revision)

  
	
  Cloud
  point:

  	
   

  	
  Per
  Order

  	
   

  	
  °C

  	
   

  	
  D 2500 Allowable
  variance of +/- 2°C

  
	
  Free
  Glycerin:

  	
   

  	
  < 0.014

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Total
  Glycerin:

  	
   

  	
  < 0.15

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Monoglycerides(1):

  	
   

  	
  < 0.500

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Diglycerides(2):

  	
   

  	
  < 0.200

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Triglycerides(3):

  	
   

  	
  < 0.150

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Water &
  Sediment:

  	
   

  	
  < 0.020

  	
   

  	
  %
  Volume

  	
   

  	
  D 2709

  
	
  Acid
  Number:

  	
   

  	
  < 0.40

  	
   

  	
  mg
  KOH/g

  	
   

  	
  D 664

  
	
  Visual
  Inspection:

  	
   

  	
  1, max

  	
   

  	
  Haze

  	
   

  	
  D 4176,
  procedure 2

  
	
  Relative
  Density at 60°F:

  	
   

  	
  0.85 - 0.90

  	
   

  	
  n/a

  	
   

  	
  D1298 (BQ-9000)

  
	
  Oxidation
  Stability (100°C)

  	
   

  	
  3 min
  or per Shipping Request

  	
   

  	
  hrs

  	
   

  	
  EN 14112

  
	
  Flash
  point (closed cup):

  	
   

  	
  > 93

  	
   

  	
  °C

  	
   

  	
  D 93

  
	
  Alcohol
  Control

  	
  Option
  1:  Methanol

  Option 2:  Flashpoint

  	
   

  	
  < 0.2

  > 130

  	
   

  	
  %
  Volume

  °C

  	
   

  	
  EN 14110

  D 93

  
	
  Moisture(4):

  	
   

  	
  < 0.020

  	
   

  	
  %
  Volume

  	
   

  	
  E203

  
	
  Cold
  Soak Filtration:

  	
   

  	
  < 200

  	
   

  	
  seconds

  	
   

  	
  D 6751 Annex

  
	
  Sulfur:

  	
   

  	
  < 10

  	
   

  	
  ppm

  	
   

  	
  D 2622

  
	
  Sodium &
  Potassium Combined:

  	
   

  	
  < 2.0

  	
   

  	
  ppm
  (μg/g)

  	
   

  	
  EN 14538

  
	
  Calcium &
  Magnesium Combined:

  	
   

  	
  < 1.0

  	
   

  	
  ppm
  (μg/g)

  	
   

  	
  EN 14538

  
	
  Phosphorus:

  	
   

  	
  < 0.001

  	
   

  	
  % Mass

  	
   

  	
  D 4951

  
	
  Carbon
  Residue:

  	
   

  	
  < 0.05

  	
   

  	
  % Mass

  	
   

  	
  D 4530

  
	
  Sulfated
  Ash:

  	
   

  	
  < 0.02

  	
   

  	
  % Mass

  	
   

  	
  D 874

  
	
  Kinematic
  Viscosity at 40°C:

  	
   

  	
  3.8 - 5.0

  	
   

  	
  mm2/sec.

  	
   

  	
  D 445

  
	
  Copper
  Corrosion (3 hrs at 50°C):

  	
   

  	
  No. 1

  	
   

  	
  n/a

  	
   

  	
  D 130

  
	
  Distillation
  at 90% Recovered:

  	
   

  	
  360, max

  	
   

  	
  °C

  	
   

  	
  D 1160

  
	
  Cetane
  number:

  	
   

  	
  47, min

  	
   

  	
  n/a

  	
   

  	
  D 613

  
								

 

	
  (1),(2),(3),(4),(5) 
  These are not ASTM D 6751 nor BQ9000 specification requirements

  

 

 

 

Attachment C-2

 

REG-9000Ô EN

 

Based
off EN 14214 Specifications

 

	
  Test Parameter

  	
   

  	
  REG-9000Ô
  Limit

  	
   

  	
  Units

  	
   

  	
  Method

  
	
  Free
  Glycerin:

  	
   

  	
  0.014

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Total
  Glycerin:

  	
   

  	
  0.150

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Monoglycerides:

  	
   

  	
  0.500

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Diglycerides:

  	
   

  	
  0.200

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Triglycerides:

  	
   

  	
  0.150

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Ester
  Content:

  	
   

  	
  > 96.5

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Linolenic
  Acid Methyl Ester:

  	
   

  	
  12, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Polyunsaturate
  Methyl Ester:

  	
   

  	
  1, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Total
  Contamination:

  	
   

  	
  24, max

  	
   

  	
  mg/kg

  	
   

  	
  EN 12662

  
	
  Acid
  Number:

  	
   

  	
  < 0.40

  	
   

  	
  mg
  KOH/g

  	
   

  	
  EN 14104

  
	
  Cold
  Filter Plugging Point:

  	
   

  	
  Per
  Order

  	
   

  	
  °C

  	
   

  	
  EN 116 Allowable
  variance of +/- 2°C

  
	
  Density
  @15°C:

  	
   

  	
  860 - 900

  	
   

  	
  kg/m3

  	
   

  	
  EN ISO 3675

  
	
  Oxidative
  Stability:

  	
   

  	
  6 min
  or per Shipping Request

  	
   

  	
  hrs

  	
   

  	
  EN 14112:2003

  
	
  Flashpoint:

  	
   

  	
  > 170

  	
   

  	
  °C

  	
   

  	
  EN ISO 3679

  
	
  Iodine
  Value:

  	
   

  	
  120 Max

  	
   

  	
  g/100g

  	
   

  	
  EN 14111

  
	
  Methanol
  Content:

  	
   

  	
  0.2, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14110

  
	
  Water
  Content:

  	
   

  	
  200, max

  	
   

  	
  mg/kg

  	
   

  	
  EN ISO 12937

  
	
  Sulfur
  Content:

  	
   

  	
  < 10

  	
   

  	
  mg/kg

  	
   

  	
  EN ISO 20846

  
	
  Phosphorus
  Content:

  	
   

  	
  < 10

  	
   

  	
  mg/kg

  	
   

  	
  EN 14107

  
	
  Sodium &
  Potassium Combined:

  	
   

  	
  < 2

  	
   

  	
  mg/kg

  	
   

  	
  EN 14538
  BS2000-547

  
	
  Calcium &
  Magnesium Combined:

  	
   

  	
  < 2.0

  	
   

  	
  mg/kg

  	
   

  	
  EN 14538
  BS2000-547

  
	
  Sulfated
  Ash:

  	
   

  	
  < 0.02

  	
   

  	
  % (m/m)

  	
   

  	
  ISO 3987

  
	
  Kinematic
  Viscosity at 40°C:

  	
   

  	
  3.5 - 5.0

  	
   

  	
  mm2/sec.

  	
   

  	
  EN ISO 3104

  
	
  Copper
  Corrosion @ 50°C for 3hrs:

  	
   

  	
  1, max

  	
   

  	
  n/a

  	
   

  	
  EN ISO 2160

  
	
  Cetane
  Number:

  	
   

  	
  51 Min.

  	
   

  	
  n/a

  	
   

  	
  EN ISO 5165

  
	
  Carbon
  Residue @ 10% distillation remnant:

  	
   

  	
  0.3

  	
   

  	
  %(m/m)

  	
   

  	
  EN ISO 10370

  
	
  Cold
  Soak Filtration:

  	
   

  	
  < 200

  	
   

  	
  seconds

  	
   

  	
  D 6217 Annex

  

 

 

 

Exhibit D

Shipping/Loadout Request

 

	
  Today’s Date:

  	
  /

  	
  /

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Target Date to Load:

  	
  /

  	
  /

  	
   

  

 

Loading Requirements

 

	
  o

  	
  Truck

  	
  Trucking Company

  
	
   

  	
   

  	
   

  
	
  o

  	
  REG Railcar

  	
   

  
	
   

  	
   

  	
   

  
	
  Product:

  	
   

  
	
   

  	
   

  
	
  o

  	
  B99.9

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
  B100

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
  Oxidative Additive:                  ppm

  
	
   

  	
   

  
	
  o

  	
  Minimum Load
  Temperature:                      °F

  
	
   

  	
   

  

Blackhawk Fills out
Remainder of form:

 

	
  Lot Number:

  	
   

  	
   

  

 

	
  o
  Loadout Checklist Complete. Operator initials

  	
   

  	
   

  

 

	
  Seal Numbers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Railcar ID:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RIN #’s

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Time Scheduled

  	
   

  	
   

  	
  *Biodiesel Loaded (gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Time Arrived

  	
   

  	
   

  	
  *Diesel Loaded (gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Time Loaded

  	
   

  	
   

  	
  *Total Gallons        (gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BOL #

  	
   

  	
   

  	
   

  	
   

  

 

*Gal corrected to 60 degrees Fahrenheit.

 

When completed Scan and e-mail to:  bill.neese@regfuel.com, adam.sander@regfuel.com,
mike.alleman@regfuel.com, dave.simon@regfuel.com, natan.wylke@com,
Jason.schwenneker@regfuel.com.Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into this 31st of
July 2009, between Activision Publishing, Inc. (the “Employer”), a
subsidiary of Activision Blizzard, Inc. (“Activision
Blizzard” and, together with its subsidiaries, the “Activision Blizzard Group”), and
Brian Hodous (“you”).

 

RECITAL

 

The Employer desires to employ you, and you desire to
be so employed by the Employer, on the terms and subject to the conditions set
forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and
the mutual promises set forth in this Agreement, the Employer and you hereby
agree as follows:

 

1.                                      Term of Employment

 

(a)                                  The term of your employment under this
Agreement (the “Term”) shall commence on August 1,
2009 (the “Effective Date”) and shall
end on July 31, 2011 (the “Expiration Date”) (or such earlier date on which your
employment is terminated under Section 10).  Except as set forth in Section 11 and Section 12(s),
upon the Expiration Date (or such earlier date on which your employment is
terminated) all obligations and rights under this Agreement shall immediately
lapse.

 

(b)                                 You and the Employer each agree to
provide the other with at least six (6) months notice of any intent not to
continue your employment following the Expiration Date.   If your employment continues beyond the
Expiration Date, you shall be an at-will employee whose employment may be
terminated by either party to this Agreement at any time for any reason.

 

2.                                      Compensation

 

(a)                                  Subject to the provisions of this
Agreement, in full consideration for all rights and services provided by you
under this Agreement, during the Term you shall receive only the compensation
set forth in this Section 2.

 

(b)                                 Commencing on the Effective Date, you
shall receive an annual base salary (“Base Salary”)
of $575,000, which shall be paid in accordance with the Employer’s payroll
policies.  Your Base Salary shall be
reviewed periodically and may be increased by an amount determined by the
Employer, in its sole
and absolute discretion.

 

(c)                                  You may be eligible to receive an annual
discretionary bonus (the “Annual Bonus”).  Your target Annual Bonus for each calendar
year will be seventy five percent (75%) of your Base Salary.  In all instances, the actual amount of the
Annual Bonus, if any, shall be determined by the Employer, in its sole and absolute discretion,
and may be based on, among other things, your base salary and target bonus
prior to the Term, the portion of the year falling in the Term, your overall
performance and the performance of the Employer, Activision
Blizzard and the Activision Blizzard Group.  The Annual
Bonus, if any, will be paid at the same time 

 

1

 

bonuses for that year are
generally paid to other executives, but in no event earlier than the first day
of the first month, or later than the 15th day of the third month, of the year following
the year to which the Annual Bonus relates. 
In all instances, you must remain continuously employed by the
Activision Blizzard Group through the date on which the Annual Bonus, if any,
is paid to be eligible to receive such Annual Bonus.

 

(d)                                 Subject to the approval of the
Compensation Committee of the Board of Directors of Activision Blizzard (the “Compensation Committee”), Activision
Blizzard will grant to you a non-qualified stock option to purchase 200,000
shares of Activision Blizzard’s common stock (the “Option”)
and 60,000 restricted share
units which represent the conditional right to receive shares of Activision
Blizzard’s common stock (the “RSUs,” and  collectively with the Option, the “Equity Awards”).

 

(i)                                   (X) Three-eights of the Option will
vest on the day prior to each of the first and second anniversary of the
Effective Date, subject to your remaining employed by the Activision Blizzard Group through that
date, and (Y) one-quarter
of the Option will vest on the day prior to the third anniversary of the
Effective Date (unless the 2010 Annual Operating Plan “Activision
Publishing + Blizzard Retail” operating income objectives established by the
Compensation Committee for 2010 annual bonus goal of the Employer’s President
and Chief Executive Officer are met or exceeded, in which case it will vest on
the day prior to the second anniversary of the Effective Date), subject to your remaining
employed by the Activision
Blizzard Group through the applicable vesting date.

 

(ii)                                (X) One-half of the RSUs will vest
on the day prior to the second anniversary of the Effective Date, subject to your
remaining employed by the Activision Blizzard Group through that date, and (Y) one-half of the RSUs will
vest on the day prior to the third anniversary of the Effective Date (unless the 2009 Annual
Operating Plan “Activision Publishing + Blizzard Retail” operating income
objectives established by the Compensation Committee for 2009 annual bonus goal
of the Employer’s President and Chief Executive Officer are met or exceeded, in
which case it will vest on the day prior to the second anniversary of the
Effective Date), subject to your remaining employed by the Activision Blizzard Group through the
applicable vesting date.

 

You acknowledge that the
grant of Equity Awards pursuant to this Section 2(d) is expressly
conditioned upon approval by the Compensation Committee, and that the
Compensation Committee has discretion to approve or disapprove the grants
and/or to determine and make modifications to the terms of the grants.  The Equity Awards shall be subject to all
terms of the equity incentive plan pursuant to which they are granted (the “Incentive  Plan”)
and Activision Blizzard’s standard forms of award agreement (as modified to the
extent necessary to reflect the provisions of Section 11 of this
Agreement).  In the event of a conflict
between this Agreement and the terms of the Incentive Plan or award agreements,
the Incentive Plan or the award agreements, as applicable, shall govern.   These Equity Awards, if and when approved by
the Compensation Committee, shall be in addition to any previous equity
incentive awards made to you.

 

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(e)                                  Within three weeks of the Effective Date,
the Employer will provide you with a renewal bonus in the amount of $48,000
(less applicable taxes).

 

3.                                      Title; Location

 

You shall serve as Chief Customer Officer. 
Your principal place of business initially shall be the Employer’s
headquarters in Santa Monica, California; provided, however, that
you acknowledge and agree that you may be required to travel from time to time
for business reasons.

 

4.                                      Duties

 

You shall report directly to
the Employer’s President and Chief Executive Officer (or such other executive
of the Activision Blizzard Group as may be determined from time to time by it
in its sole and absolute discretion) and shall have such duties commensurate
with your position as may be assigned to you from time to time by the Employer’s
President and Chief Executive Officer (or, as applicable, such other executive
designated by the Employer).  You are
also required to read, review and observe all of the Activision Blizzard Group’s
policies, procedures, rules and regulations in effect from time to time
during the Term that apply to employees of the Employer, including, without limitation, the Code
of Business Conduct and Ethics, as amended from time to time.  You shall devote your full-time working time to the
performance of your duties hereunder, shall faithfully serve the Employer,
shall in all respects conform to and comply with the lawful directions and
instructions given to you by the Employer’s President and Chief Executive
Officer (or such other executive of the Activision Blizzard Group as may be
determined from time to time by the Employer in its sole and absolute
discretion) and shall
use your best efforts to promote and serve the interests of the Activision
Blizzard Group.  Further, you shall at
all times place the Employer’s interests above your own, not take any actions
that would conflict with the Employer’s interests and shall perform all your
duties for the Employer with the highest duty of care.  Further, you shall not, directly or
indirectly, render services of any kind to any other person or organization,
whether on your own behalf or on behalf of others, without the consent of the Employer’s
President and Chief Executive Officer or otherwise engage in activities that would interfere
with your faithful and diligent performance of your duties hereunder; provided,
however, that you may serve on civic or charitable boards or engage in
charitable activities without remuneration if doing so is not inconsistent
with, or adverse to, your employment hereunder.

 

5.                                      Expenses

 

To the extent you incur necessary and reasonable
travel or other business expenses in the course of your employment, you shall
be reimbursed for such expenses, upon presentation of written documentation in
accordance with the Employer’s policies in effect from time to time.

 

6.                                      Other Benefits

 

(a)                                  The Employer will provide you during the
Term, at the Employer’s expense, with a supplemental term life insurance policy
with a benefit amount of $2,000,000 through a carrier of the Employer’s choice.

 

(b)                                 You shall be eligible to participate in
all health, welfare, retirement, pension, life insurance, disability,
perquisite and similar plans, programs and arrangements generally available 

 

3

 

to executives of the
Employer from time to time during the Term, subject to the then-prevailing
terms, conditions and eligibility requirements of each such plan, program, or
arrangement.

 

(c)                                  You expressly agree and acknowledge that,
after the Expiration Date (or such earlier date on which your employment is
terminated), you shall not be entitled to any additional benefits, except as
specifically provided in this Agreement and the benefit plans in which you
participate during the Term, and subject in each case to the then-prevailing  terms and conditions of each such plan.

 

7.                                      Vacation and Paid Holidays

 

(a)                                  You will generally be entitled to paid
vacation days in accordance with the normal vacation policies of the Employer
in effect from time to time; provided, however, that you will be
entitled to accrue no less than twenty (20) paid vacation days per year unless
your vacation balance exceeds the Employer’s then-current maximum.

 

(b)                                 You shall be entitled to all paid
holidays allowed by the Employer to its full-time employees in the United
States.

 

8.                                      Protection of the  Employer’s Interests

 

(a)                                  Duty of Loyalty.  During the Term, you will owe a “Duty of Loyalty” to the Employer,
which includes, but is not limited to, you not competing in any manner, whether
directly or indirectly, as a principal, employee, agent, owner, or otherwise,
with any entity in the Activision Blizzard Group; provided, however,
that nothing in this Section 8(a) will limit your right to own up to
five percent (5%) of
any of the debt or equity securities of any business organization that is then
required to file reports with the Securities and Exchange Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended.

 

(b)                                 Property of the Activision
Blizzard Group.  All rights worldwide with respect to any and
all intellectual or other property of any nature produced, created or suggested
by you, whether on your own time or not, alone or with others, during the term
of your employment or resulting from your services which (i) relate in any
manner at the time of conception or reduction to practice to the actual or
demonstrably anticipated business of the Activision Blizzard Group, (ii) result
from or are suggested by any task assigned to you or any work performed by you
on behalf of the Activision Blizzard Group, (iii) were created using the
time or resources of the Activision Blizzard Group, or (iv) are based on
any property owned or idea conceived by the Activision Blizzard Group, shall be
deemed to be a work made for hire and shall be the sole and exclusive property
of the Activision Blizzard Group.  You
agree to execute, acknowledge and deliver to the Employer, at the Employer’s
request, such further documents, including copyright and patent assignments, as
the Employer finds appropriate to evidence the Activision Blizzard Group’s
rights in such property.  Your agreement
to assign to the Activision Blizzard Group any of your rights as set forth in
this Section 8(b) shall not apply to any invention that qualifies
fully under the provisions of California Labor Code Section 2870, where no
equipment, supplies, facility or trade secret information of the Activision
Blizzard Group was used, where the invention was developed entirely upon your
own time, where the invention does not relate to the Activision Blizzard Group’s
business, and where the invention does not result from any work performed by
you for the Activision Blizzard Group.

 

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(c)                                  Covenant Not to Shop. 
Other than during the final six (6) months of the Term, you shall
not negotiate for employment with any entity or person outside of the
Activision Blizzard Group.  During the
search process and thereafter you shall remain strictly subject to your
continuing obligations under this Agreement, including, without limitation,
your Duty of Loyalty, compliance with the Activision Blizzard Group’s policies
and your confidentiality obligations.

 

(d)                                 Confidentiality.  You acknowledge, and the Employer agrees, that during
your employment you will have access to and become informed of confidential and
proprietary information concerning the Activision Blizzard Group.  During your employment and at all times following
the termination of your employment, confidential or proprietary information of
any entity in the Activision Blizzard Group shall not be used by you or
disclosed or made available by you to any person except as required in the
course of your employment with the Activision Blizzard Group.  Upon the termination of your employment (or
at any time on the Employer’s request), you shall return to the Activision
Blizzard Group all such information that exists, whether in electronic,
written, or other form (and all copies or extracts thereof) under your control
and shall not retain such information in any form, including without limitation
on any devices, disks or other media. 
Without limiting the generality of the foregoing, you acknowledge
signing and delivering to the Employer the Employee Proprietary Information
Agreement attached as Exhibit A hereto (the “Proprietary
Information Agreement”) as of the Effective Date and you agree
that all terms and conditions contained in such agreement, and all of your obligations
and commitments provided for in such agreement, shall be deemed, and hereby
are, incorporated into this Agreement as if set forth in full herein.

 

(e)                                  Return of Property and
Resignation from Office.  You
acknowledge that, upon termination of your employment for any reason whatsoever
(or at any time on the Employer’s request), you will promptly deliver to the
Activision Blizzard Group or surrender to the Activision Blizzard Group’s
representative all property of any entity in the Activision Blizzard Group,
including, without limitation, all documents and other materials (and all
copies thereof) relating to the Activision Blizzard Group’s business, all
identification and access cards, all contact lists and third party business
cards however and wherever preserved, and any equipment provided by any entity
in the Activision Blizzard Group, including, without limitation, computers,
telephones, personal digital assistants, memory cards and similar devices that
you possess or have in your custody or under your control. You will
cooperate with the Activision Blizzard Group by participating in interviews to
share any knowledge you may have regarding the Activision Blizzard Group’s
intellectual or other property with personnel designated by the Activision Blizzard
Group.  You also agree to resign from any office held by you
within the Activision Blizzard Group immediately upon termination of your
employment for any reason whatsoever (or at any time on the Employer’s request)
and you irrevocably appoint any person designated as the Activision Blizzard
Group’s representative at that time as your delegate to effect such
resignation.

 

(f)                                    Covenant Not to Solicit.

 

(i)                                   During your employment, you shall not, at
any time or for any reason, either alone or jointly, with or on behalf of
others, whether as principal, partner, agent, representative, equity holder,
director, employee, consultant or otherwise, directly or indirectly: (a) 
offer employment to, or solicit the employment or engagement of, or otherwise
entice away from the 

 

5

 

employment or engagement of the Activision Blizzard
Group, either for your own account or for any other person, firm or company,
any person employed or otherwise engaged by any entity in the Activision
Blizzard Group, whether or not such person would commit any breach of a
contract by reason of his or her leaving the service of the Activision Blizzard
Group; or (b) solicit, induce or entice any client, customer, contractor,
licensor, agent, supplier, partner or other business relationship of any entity
in the Activision Blizzard Group to terminate, discontinue, renegotiate or
otherwise cease or modify its relationship with the Activision Blizzard Group.

 

(ii)                                For a period of two (2) years following
the termination of your employment for any reason whatsoever, you shall not, at
any time or for any reason, either alone or jointly, with or on behalf of
others, whether as principal, partner, agent, representative, equity holder,
director, employee, consultant or otherwise, directly or indirectly solicit the
employment or engagement of, either for your own account or for any other
person, firm or company, any person employed or otherwise engaged by any entity
in the Activision Blizzard Group (or any person who was employed or otherwise
engaged by the Activision Blizzard Group during your final ninety (90) days of
employment), whether or not such person would commit any breach of a contract
by reason of his or her leaving the service of the Activision Blizzard Group.

 

(iii)                             During your employment and at all times
following the termination of your employment for any reason whatsoever, you
shall not, at any time or for any reason, use the confidential, trade secret
information of the Activision Blizzard Group or any other unlawful means to
directly or indirectly solicit, induce or entice any client, customer,
contractor, licensor, agent, supplier, partner or other business relationship
of any entity in the Activision Blizzard Group to terminate, discontinue,
renegotiate or otherwise cease or modify its relationship with the Activision
Blizzard Group.

 

(iv)                            You expressly acknowledge and agree that
the restrictions contained in this Section 8(f) are reasonably
tailored to protect the Activision Blizzard Group’s confidential information
and trade secrets and to ensure that you do not violate your Duty of Loyalty or
any other fiduciary duty to the Employer, and are reasonable in all
circumstances in scope, duration and all other respects. The provisions of this
Section 8(f) shall survive the expiration or earlier termination of
this Agreement.

 

9.                                      Disability

 

(a)                                  If, during the Term, you become “Disabled,” you shall
receive a lump sum payment of an amount equal to three (3) times the Base
Salary (at the rate in effect at the time you become Disabled).

 

(b)                                 For purposes of this Agreement, whether
you are considered to be “Disabled”
shall be determined in accordance with Section 409A
(“Section 409A”) of the Internal
Revenue 

 

6

 

Code of 1986, as amended and the rules and
regulations promulgated thereunder (the “Code”).  That determination shall be made by a physician
mutually agreed upon by you and the Employer. 
If you and the Employer are unable to agree on such a physician, you and
the Employer shall each appoint one physician and those two physicians shall
appoint a third physician who shall make the determination of whether you are
Disabled.  You shall cooperate and make
yourself available for any medical examination requested by the Employer with
respect to any determination of whether you are Disabled within ten (10) days
of such a request.

 

(c)                                  Payment of any amount under this Section 9 is conditioned upon your
execution of a waiver
and release agreement in a form prepared by the Employer after you are
determined to be Disabled in accordance with Section 9(b) and that
release becoming effective and irrevocable in its entirety and shall be made on
the 60th day following the date of Disability.  Unless otherwise provided by the Employer, if
the release referenced above does not become effective and irrevocable on or
prior to the 60th day following the date on which you are
determined to be Disabled, you shall not be entitled to any payments under this
Section 9.

 

(d)                                 Nothing in this Section 9 shall reduce any right you may otherwise
have to receive any disability benefits under any Employer-sponsored disability
plan.

 

10.                               Termination of Employment

 

(a)                                  By the Employer for Cause.

 

(i)                                   At any time during the Term, the  Employer may terminate your employment for “Cause,” which shall mean a
good-faith determination by the Employer that you (i) engaged in
misconduct or gross negligence in the performance of your duties or willfully
and continuously failed or refused to perform any duties reasonably requested
in the course of your employment; (ii) engaged in fraud, dishonesty, or
any other conduct that causes or has the potential to cause, harm to any entity
in the Activision Blizzard Group, including its business or reputation; (iii) violated
any lawful directives or policies of the Activision Blizzard Group or any
applicable laws, rules or regulations; (iv) materially breached this
Agreement; (v) materially breached any proprietary information or
confidentiality agreement with any entity in the Activision Blizzard Group; (vi) were
convicted of, or pled guilty or no contest to, a felony or crime involving
dishonesty or moral turpitude; or (vii) breached your fiduciary duties to
the Activision Blizzard Group.

 

(ii)                                In the case of any termination for Cause
pursuant to clause (iii) of the definition thereof, the Employer shall
give you at least thirty (30) days written notice of its intent to terminate
your employment.  The notice shall
specify (x) the effective date of your termination and (y) the
particular acts or circumstances that constitute Cause for such
termination.  You shall be given the
opportunity within fifteen (15) days after receiving the notice to explain why
Cause does not exist or to cure any basis for Cause.  Within fifteen (15) days after any such
explanation or cure, the Employer will make its final determination regarding
whether Cause exists and deliver such determination to you in writing.  If the final decision is that Cause exists
and no cure has occurred, your employment with the Employer shall 

 

7

 

be terminated for Cause as of the date of termination
specified in the original notice.  If the
final decision is that Cause does not exist or a cure has occurred, your
employment with the Employer shall not be terminated for Cause at that time.

 

(iii)                             If your employment terminates for any
reason other than a termination by the Employer for Cause, at a time when the
Employer had Cause to terminate you (or would have had Cause if it then knew
all relevant facts) under clauses (i), (ii), (v), (vi) or (vii) of
the definition of Cause, your termination shall be treated as a termination by
the Employer for Cause.

 

(b)                                 By the Employer Without  Cause.  The Employer may terminate your employment
without Cause at any time during the Term and such termination shall not be
deemed a breach by the Employer of any term of this Agreement or any other duty
or obligation, expressed or implied, which the Employer may owe to you pursuant
to any principle or provision of law.

 

(c)                                  By You If Your Principal Place of
Business Is Relocated Without Your Consent.  At any time
during the Term, you may terminate your employment if, without your written
agreement or other voluntary action on your part, the Employer reassigns your
principal place of business to a location that is  more
than fifty (50) miles from your principal place of business as of the Effective
Date and that materially and adversely affects your commute; provided, however,
that you must (i) provide the Employer with written notice of your intent
to terminate your employment under this Section 10(c) and a
description of the event you believe gives you the right to do so within thirty
(30) days after the initial existence of the event and (ii) the Employer
shall have ninety (90) days after you provide the notice described above to
cure any such default (the “Cure Period”).  You will have five (5) days following
the end of the Cure Period to terminate your employment, after which your ability
to terminate your employment under this Section 10(c) will no longer
exist.

 

(d)                                 Death. 
In the event of your death during the Term, your employment shall
terminate immediately as of the date of your death.

 

11.                               Termination of Obligations
and Severance Payments

 

(a)                                  General. 
Upon the termination of your employment pursuant to Section 10, your rights and the Employer’s
obligations to you under this Agreement shall immediately terminate except as
provided in this Section 11 and Section 12(s), and you (or your
heirs or estate, as applicable) shall be entitled to receive any amounts or
benefits set forth below (subject in all cases to Sections 11(f), 12(q) and
12(r)).  The payments and benefits
provided pursuant to this Section 11 are (x) in lieu of any severance
or income continuation protection under any plan of the Activision Blizzard
Group that may now or hereafter exist and (y) deemed to satisfy and be in
full and final settlement of all obligations of the Activision Blizzard Group
to you under this Agreement.  You shall
have no further right to receive any other compensation benefits following your
termination of employment for any reason except as set forth in this Section 11.

 

For the purposes of this Agreement, the following
terms shall have the following meanings:

 

8

 

“Basic Severance”
shall mean payment of (1) any Base Salary earned but unpaid as of the
Termination Date; (2) any business expenses incurred but not reimbursed
under Section 5 as of the Termination Date; and (3) payment in lieu
of any vacation accrued under Section 7 but unused as of the Termination
Date.

 

The Employer shall pay or provide you when due (a) any
Base Salary earned but unpaid as of the date of your termination, (b) any
business expenses incurred but not reimbursed under Section 5 as of the
date of your termination, and (c) payment in lieu of any vacation accrued
under Section 7 but unused as of the date of your termination

 

“Bonus Severance”
shall mean payment of:

 

(i)                                   an amount equal to the Annual Bonus that
the Employer determines, in its sole discretion, you would have received in
accordance with Section 2(c) for any year that ended prior to the
Termination Date had you remained employed through the date such bonus would
have been otherwise been paid; and

 

(ii)                                an amount equal to the Annual Bonus that
the Employer determines, in its sole discretion, you would have received in
accordance with Section 2(c) for the year in which your Termination
Date occurs had you had remained employed through the date such bonus would
have been paid, multiplied by a fraction, the numerator of which is the number
corresponding to the calendar month in which the Termination Date occurs and
the denominator of which is 12, where, for purposes of calculating the amount
of such bonus, any goals will be measured by actual performance.

 

“Termination
Date” shall mean the effective date of your termination of
employment pursuant to Sections 10(a)-(d).

 

(b)                                 Death. 
In the event your employment is terminated under Section 10(d):

 

(i)                                   Basic Severance. 
Your heirs or estate shall receive payment of the Basic Severance in a
lump sum within thirty (30) days following the Termination Date unless a
different payment date is prescribed by an applicable compensation, incentive
or benefit plan, in which case payment shall be made in accordance with such
plan.

 

(ii)                                Lump Sum Payment of Three Times Base
Salary.  Your heirs or estate shall receive payment of
an amount equal to three (3) times the Base Salary (at the rate in effect
as of the Termination Date) in a lump sum within thirty (30) days
following the Termination Date.

 

(iii)                             Bonus Severance. 
Your heirs or estate shall receive payment of the Bonus Severance in a
lump sum no later than the 15th day of the third month of the year following
the year to which the underlying amount relates.

 

(iv)                            Impact on Equity Awards.

 

9

 

a.                                       The Option shall continue to vest until
the Expiration Date and shall otherwise be treated as if your employment had
not terminated prior to that date.

 

b.                                      The RSUs that would have vested following
your death had you remained employed until the Expiration Date shall
immediately vest as of the date of year death and shall thereafter be paid in
accordance with their terms.

 

(c)                                  Termination by the Employer
Without Cause or by you If Your Principal Place of Business Is Relocated
Without Your Consent.  In the event the Employer terminates your
employment under Section 10(b) or you terminate your employment
under Section 10(c):

 

(i)                                   Basic Severance. 
You shall receive payment of the Basic Severance in a lump sum within
thirty (30) days following the Termination Date unless a different payment date
is prescribed by an applicable compensation, incentive or benefit plan, in
which case payment shall be made in accordance with such plan.

 

(ii)                                Salary Continuation.  You shall receive the payment of an amount equal to
the Base Salary (at the rate in effect on the Termination Date) that you would
have received had you remained employed through the Expiration Date, which
amount shall be paid in equal installments commencing on the first payroll date
following the 60th day
following the Termination Date in accordance with the Employer’s payroll
practices in effect on the Termination Date, provided that the first such
payment shall include any installments relating to the 60 day period following
the Termination Date.

 

(iii)                             Bonus Severance. 
You shall receive payment of the Bonus Severance in a lump sum no later
than the 15th day of the third month of the year following
the year to which the underlying amount relates.

 

(iv)                            Impact on Equity Awards.

 

a.                                     The Option shall continue to vest until
the Expiration Date and shall otherwise be treated as if your employment had
not terminated prior to that date.

 

b.                                    The RSUs that would have vested following
the Termination Date had you remained employed until the Expiration Date shall
vest as of the 60th day following the Termination Date and shall thereafter be
paid in accordance with their terms.

 

(v)                               Severance Conditioned Upon Release.  Payments and benefits described in Sections 11(c)(ii),
11(c)(iii) and Section 11(c)(iv) are conditioned upon your
execution of a waiver and release in a form prepared by the Employer and that
release becoming effective and irrevocable in its entirety within 60 days of
the Termination Date.  Unless otherwise provided by the Employer, if the release referenced
above does not become effective and irrevocable on or prior to the 60th day following the Termination
Date, you 

 

10

 

shall
not be entitled to any payments under this Section 11(c) other than
the Basic Severance.

 

(vi)                            Severance Following Disability. 
If you are entitled to receive payments pursuant to Section 9 as a
result of your having become Disabled, then upon a subsequent or concurrent
termination of employment under Section 10(b) or 10(c), you shall
only be entitled to the payments under Sections 11(c)(i) and (iii) and
not any payment under Section 11(c)(ii).

 

(d)                                 Termination by the Employer For
Cause.  In the event your employment is terminated by
the Employer under Section 10(a), then:

 

(i)                                   Basic Severance. 
You shall receive payment of the Basic Severance in a lump sum within
thirty (30) days following the Termination Date unless a different payment date
is prescribed by an applicable compensation, incentive or benefit plan, in
which case payment shall be made in accordance with such plan.

 

(ii)                                Impact on Equity Awards. 
All outstanding Equity Awards shall cease to vest and, whether or not
vested, shall no longer be exercisable and shall be cancelled immediately.

 

(e)                                  Termination on the Expiration
Date.   In the event your employment terminates on the
Expiration Date, then:

 

(i)                                   Basic Severance. 
You shall receive payment of the Basic Severance in a lump sum within
thirty (30) days following the Termination Date unless a different payment date
is prescribed by an applicable compensation, incentive or benefit plan, in
which case payment shall be made in accordance with such plan.

 

(ii)                                Bonus Severance. 
You shall receive payment of the Bonus Severance in a lump sum no later
than the 15th day of the third month of the year following
the year to which the underlying amount relates.

 

(iii)                             Impact on Equity Awards. 
All outstanding Equity Awards shall cease to vest.  All
vested RSUs shall be paid in accordance with their terms.  Any vested portion of the Option shall remain
exercisable until the earlier of (x) thirty (30) days after the
Termination Date and (y) the original expiration date of the Option.  Any Equity Awards that are not vested as of
the Expiration Date will be cancelled immediately.

 

(iv)                            Severance Conditioned Upon Release.  Payments described in Section 11(e) are
conditioned upon your execution of a waiver and release in a form prepared by
the Employer and that release becoming effective and irrevocable in its
entirety within 60 days of the Termination Date.  Unless
otherwise provided by the Employer, if the release referenced above does not
become effective and irrevocable on or prior to the 60th day following the Termination
Date, you shall not be entitled to any payments under this Section 11(e) other
than the Basic Severance.

 

11

 

(f)                                    Breach of Post-termination
Obligations or Subsequent Employment.

 

(i)                                   Breach of Post-termination Obligations. In the event that you breach any of
your obligations under Section 8, the Employer’s obligation, if any, to
make payments and provide benefits under Section 11 (other than payment of
the Basic Severance) shall immediately and permanently cease and you shall not
be entitled to any such payments or benefits.

 

(ii)                                Subsequent Employment. Notwithstanding anything to the
contrary contained herein, you shall receive the payments and benefits under Section 11
(other than payment of the Basic Severance) only for the time period that you
do not obtain subsequent employment and/or provide services of any kind for
compensation, whether as principal, owner, partner, agent, shareholder,
director, employee, consultant, advisor or otherwise, to any person, company,
venture or other person or business entity. 
If, at any time, you obtain subsequent employment or provide services as
set forth in the prior sentence, you must promptly notify the Company and
payments and benefits under Section 11 (other than payment of the Basic
Severance) shall cease as of the date you commenced such employment or
provision of services.

 

12.                               General Provisions

 

(a)                                  Entire Agreement. 
This Agreement and the Proprietary Information Agreement supersede all
prior or contemporaneous agreements and statements, whether written or oral,
concerning the terms of your employment with the Activision Blizzard Group, and
no amendment or modification of these agreements shall be binding unless it is
set forth in a writing signed by both the Employer and you.  To the extent that this Agreement conflicts
with any of the Employer’s policies, procedures, rules or regulations,
this Agreement shall supersede the other policies, procedures, rules or
regulations.  Without limiting the
generality of the foregoing, you acknowledge that this Agreement supersedes
your prior written employment agreement with the Activision Blizzard Group
dated September 18, 2006, and such agreement is hereby terminated and of
no further force and effect.

 

(b)                                 Use of Employee’s Name and
Likeness.  You hereby irrevocably grant the Activision
Blizzard Group the right, but not the obligation, to use your name or likeness
in any product made by the Activision Blizzard Group or for any publicity or
advertising purpose in any medium now known or hereafter existing.

 

(c)                                  Assignment. 
This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by you without the prior written consent of the
Employer.  The Employer may assign this
Agreement or all or any part of its rights and obligations under this Agreement
at any time and following such assignment all references to the Employer shall
be deemed to refer to such assignee and the Employer shall thereafter have no
obligation under this Agreement.

 

(d)                                 No Conflict with Prior
Agreements.  You represent to the Employer that
neither your commencement of employment under this Agreement nor the
performance of your duties under this Agreement conflicts or will conflict with
any contractual or legal commitment on your part to any third party, nor does
it or will it violate or interfere with any rights of any third party.  

 

12

 

If you have acquired any
confidential or proprietary information in the course of your prior employment
or otherwise in connection with your provision of services to any entity
outside the Activision Blizzard Group, during the Term you will fully comply
with any duties to such entity then-applicable to you not to disclose or
otherwise use such information.

 

(e)                                  Successors.  This Agreement shall be binding on and inure to the
benefit of the Employer and its successors and assigns, including successors by
merger and operation of law.  This
Agreement shall also be binding on and inure to the benefit of you and your
heirs, executors, administrators and legal representatives.

 

(f)                                    Waiver. 
No waiver by you or the Employer at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.  No waiver of any provision of this Agreement
shall be implied from any course of dealing between or among the parties hereto
or from any failure by any party hereto to assert its rights hereunder on any
occasion or series of occasions.

 

(g)                                 Expiration. 
This Agreement does not constitute a commitment of the Employer with
regard to your employment, express or implied, other than to the extent
expressly provided for herein.  Upon the
Expiration Date, or, if earlier, the termination of this Agreement pursuant to Section 10,
neither the Employer nor you shall have any obligation to the other with
respect to your continued employment.

 

(h)                                 Taxation.  The Employer may withhold from any payments made under
the Agreement all federal, state, city or other applicable taxes or amounts as
shall be required or permitted pursuant to any law, governmental regulation or
ruling or agreement with you.

 

(i)                                     Immigration. 
In accordance with the Immigration Reform and Control Act of 1986,
employment under this Agreement is conditioned upon satisfactory proof of your
identity and legal ability to work in the United States.

 

(j)                                     Choice of Law. 
Except to the extent governed by federal law, this Agreement shall be
governed by and construed in accordance with the laws of the State of
California or whatever other state in which you were last employed by the
Employer, without regard to conflict of law principles.

 

(k)                                  Arbitration.

 

(i)                                   Except as otherwise provided in this
Agreement, any dispute or controversy between the Employer and you will be
settled by final and binding arbitration by a single arbitrator to be held in
the city in which you were last employed by the Employer, unless the Employer
and you agree otherwise, in accordance with the JAMS rules for resolution
of employment disputes then in effect, except as provided in this Section 12(k).  The arbitrator the parties select will have
the authority to grant any party all remedies otherwise available by law, but
will not have the power to grant any remedy that would not be available in a
state or federal court in the jurisdiction in which the arbitration is being
held.  Either party may seek court
intervention in a dispute for interim equitable relief in a court of competent
subject matter jurisdiction located within the city in which you 

 

13

 

were last employed by the Employer, but the resort to
interim equitable relief will be pending and in aid of arbitration only, and in
such cases the trial on the merits of the action will occur in front of, and
will be decided by, the arbitrator, who will have the same ability to order
legal or equitable remedies as could a court of general jurisdiction.  The arbitrator will have the authority to
hear and rule on dispositive motions (such as motions for summary
adjudication or summary judgment) and has the exclusive authority to resolve
any dispute relating to the interpretation, applicability, enforceability or
formation of this agreement to arbitrate claims, including but not limited to
any claim that all or any part of this agreement is void or voidable.    This agreement to arbitrate applies to all
claims that the Employer may have against you or that you may have against the
Employer or the Employer’s current and former officers, directors, employees,
representatives and agents, and/or all entities affiliated with the Employer,
as well as the current and former officers, directors, employees,
representatives and agents of those affiliates. This arbitration obligation
shall not prohibit the Employer or you from filing a claim with an
administrative agency, nor does it apply to claims for workers’ compensation or
unemployment benefits, claims for benefits under an employee welfare or pension
plan that specifies a different dispute resolution procedure, or claims which,
by law, cannot be compelled to binding arbitration via private agreement.

 

(ii)                                Notwithstanding anything to the contrary
in the rules of JAMS, the arbitration shall provide (a) for written
discovery and depositions as provided under the Federal Rules of Civil
Procedure and (b) for a written decision by the arbitrator that includes
the essential findings and conclusions upon which the decision is based which
must be issued no later than thirty (30) days after a dispositive motion is
heard or an arbitration hearing has completed. 
The Employer will pay the fees and administrative costs charged by
the arbitrator and JAMS; provided, however, that if you initiate the
arbitration, you must initiate it by paying to JAMS an amount equal to the
filing fee for the state court of general jurisdiction in the state in which
you were last employed by the Employer.

 

(iii)                             Either party will have the same amount of time to file any claim
against any other party as it would have if the claim had been filed in state
or federal court in the city in which you were last employed by the
Employer.  In conducting the arbitration,
the arbitrator shall follow the Federal Rules of Evidence (including but
not limited to all applicable privileges).

 

(iv)                            The arbitrator must be experienced in employment law.  He or she will be selected by the mutual
agreement of the parties.  If the parties
cannot agree on an arbitrator, the parties will alternately strike names from a
list provided by JAMS until only one name remains.  If a JAMS arbitrator is not available to conduct an
arbitration in the city in which you last worked for the Employer, then another
similar arbitration service provider will be selected by the mutual agreement
of the parties (and all references to 

 

14

 

JAMS in this Section 12(k) will
be deemed to be references to that arbitration service provider).

 

(v)                               The decision of the arbitrator will be final, conclusive and binding on
the parties to the arbitration.  The
prevailing party in the arbitration, as determined by the arbitrator, shall be
entitled to recover his or its reasonable attorneys’ fees, experts’ fees and
costs, including the costs or fees charged by the arbitrator and JAMS, in
addition to such other relief as may be granted, under the standards provided
by law for awarding such fees and costs applicable to the claims asserted.  Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction.

 

(vi)                             You understand that your and the Employer’s
agreement to arbitrate all disputes means that both you and the Employer are
waiving your right to file a court action, except for requests for injunctive
relief pending arbitration.  You also
understand that both you and the Employer are giving up any right to a jury
trial.

 

(l)                                     Severability. 
It is expressly agreed by the parties that each of the provisions
included in Section 8(f) is separate, distinct, and severable from
the other and remaining provisions of Section 8(f), and that the
invalidity or unenforceability of any Section 8(f) provision shall
not affect the validity or enforceability of any other provision or provisions
of this Agreement.  If any provision of
this Agreement is held to be illegal, invalid or unenforceable under, or would
require the commission of any act contrary to, existing or future laws
effective during the Term, such provisions shall be fully severable, the
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance from this Agreement. 
Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a legal
and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.

 

(m)                               Services Unique. 
You recognize that the services being performed by you under this
Agreement are of a special, unique, unusual, extraordinary and intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated for in damages in the event of a breach of this
Agreement by you.

 

(n)                                 Injunctive Relief. 
In the event of a breach of or threatened breach of the provisions of
this Agreement regarding the exclusivity of your services and the provisions of
Section 8, you agree that any remedy at law would be inadequate. 
Accordingly, you agree that the Employer is entitled to obtain injunctive
relief for such breaches or threatened breaches in any court of competent
jurisdiction.  The injunctive relief
provided for in Section 12(k)(i) and this Section 12(n) is
in addition to, and is not in limitation of, any and all other remedies at law
or in equity otherwise available to the applicable party.  The parties agree to waive the requirement of
posting a bond in connection with a court or arbitrator’s issuance of an
injunction.

 

(o)                                 Remedies Cumulative. 
The remedies in this Agreement are not exclusive, and the parties shall
have the right to pursue any other legal or equitable remedies to enforce the
terms of this Agreement.

 

15

 

(p)                                 Headings. 
The headings set forth herein are included solely for the purpose of
identification and shall not be used for the purpose of construing the meaning
of the provisions of this Agreement.

 

(q)                                 Section 409A.  To the extent applicable, it is intended that the
Agreement comply with the provisions of Section 409A.  The Agreement will be administered and
interpreted in a manner consistent with this intent, and any provision that
would cause the Agreement to fail to satisfy Section 409A will have no
force and effect until amended to comply therewith (which amendment may be
retroactive to the extent permitted by Section 409A).  Notwithstanding anything contained herein to
the contrary, you shall not be considered to have terminated employment with
the Employer for purposes of the Agreement and no payments shall be due to you
under the Agreement which are payable upon your termination of employment
unless you would be considered to have incurred a “separation from service”
from the Employer within the meaning of Section 409A.  To the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A, amounts that
would otherwise be payable and benefits that would otherwise be provided
pursuant to the Agreement during the six-month period immediately following
your termination of employment shall instead be paid on the first business day
after the date that is six months following your termination of employment (or
upon your death, if earlier).  In
addition, for purposes of the Agreement, each amount to be paid or benefit to
be provided to you pursuant to the Employment Agreement shall be construed as a
separate identified payment for purposes of Section 409A.  With respect to expenses eligible for
reimbursement under the terms of the Agreement, (i) the amount of such
expenses eligible for reimbursement in any taxable year shall not affect the
expenses eligible for reimbursement in another taxable year and (ii) any
reimbursements of such expenses shall be made no later than the end of the
calendar year following the calendar year in which the related expenses were
incurred, except, in each case, to the extent that the right to reimbursement
does not provide for a “deferral of compensation” within the meaning of Section 409A;
provided, however that with respect to any reimbursements for any
taxes to which you become entitled under the terms of the Agreement, the
payment of such reimbursements shall be made by the Employer no later than the
end of the calendar year following the calendar year in which you remit the
related taxes.

 

(r)                                    Section 280G and Section 162(m).  Notwithstanding anything herein to the contrary, in
the event that you receive any payments or distributions, whether payable,
distributed or distributable pursuant to the terms of this Agreement or
otherwise, that constitute “parachute payments” within the meaning of Section 280G
of the Code, and the net after-tax amount of the parachute payment is less than
the net after-tax amount if the aggregate payment to be made to you were three
times your “base amount” (as defined in Section 280G(b)(3) of the
Code), less $1.00, then the aggregate of the amounts constituting the parachute
payment shall be reduced to an amount that will equal three times your base
amount, less $1.00.  To the extent the
aggregate of the amounts constituting the parachute payments are required to be
so reduced, the amounts provided under Section 11 of this Agreement shall
be reduced (if necessary, to zero) with amounts that are payable first reduced
first; provided, however, that, in all events the payments
provided under Section 11 of this Agreement which are not subject to Section 409A
shall be reduced first.  Similarly, you
agree that no payments or distributions, whether payable, distributed or
distributable pursuant to the terms of this Agreement or otherwise, shall be
made to you if the Employer reasonably anticipates that Section 162(m) of
the Code would prevent the Employer from receiving a deduction for such
payment.  If, however, any payment is not
made pursuant to the previous sentence, the Employer shall make such payment as
soon as practicable in the first calendar year that it reasonably determines
that it can do so and still receive a 

 

16

 

deduction for such
payment.  The determinations to be made
with respect to this Section 12(r) shall be made by a certified public
accounting firm designated by the Employer

 

(s)                                  Survivability. 
The provisions of Sections 8, 11(f), 12(b), 12(c), 12(e), 12(f), 12(h),
12(i), 12(k), 12(l), 12(m), 12(n), 12(o), 12(q), 12(r), this 12(s) and Section 13
(as well as the Proprietary Information Agreement) shall survive the
termination or expiration of this Agreement

 

(t)                                    Counterparts. 
This Agreement may be executed in counterparts, each of which shall be
deemed an original and both of which together shall constitute one and the same
instrument.

 

(u)                                 Legal Counsel. 
You acknowledge that you have been given the opportunity to consult with
legal counsel or any other advisor of your own choosing regarding this
Agreement.  You understand and agree that
any attorney retained by the Employer, the Activision Blizzard Group or any
member of management who has discussed any term or condition of this Agreement
with you or your advisor is only acting on behalf of the Employer and not on
your behalf.

 

(v)                                 Right to Negotiate. 
You hereby acknowledge that you have been given the opportunity to
participate in the negotiation of the terms of this Agreement.  You acknowledge and confirm that you have
read this Agreement and fully understand its terms and contents.

 

(w)                               No Broker.  You have given no indication, representation
or commitment of any nature to any broker, finder, agent or other third party
to the effect that any fees or commissions of any nature are, or under any
circumstances might be, payable by the Activision Blizzard Group in connection
with your employment under this Agreement.

 

(x)                                   All Terms Material. 
Your failure to comply with any of the terms of this Agreement shall
constitute a material breach of this Agreement.

 

13.                               Indemnification

 

The Employer agrees that
it shall indemnify and hold you harmless to the fullest extent permitted by
Delaware law from and against any and all liabilities, costs and claims, and
all expenses actually and reasonably incurred by you in connection therewith by
reason of the fact that you are or were employed by the Activision Blizzard
Group, including, without limitation, all costs and expenses actually and
reasonably incurred by you in defense of litigation arising out of your
employment hereunder.

 

14.                               Notices

 

All notices which either party is required or may desire
to give the other shall be in writing and given either personally or by
depositing the same in the United States mail addressed to the party to be
given notice as follows:

 

	
  To the Employer:

  	
  Activision
  Publishing, Inc.

  3100 Ocean Park Boulevard

  Santa Monica, California 90405 

  

 

17

 

	
   

  	
  Attention: Chief Legal
  Officer

  
	
   

  	
   

  
	
  To You:

  	
  Brian Hodous

  EMPLOYEE ADDRESS

  

 

Either party may by
written notice designate a different address for giving of notices.  The date of mailing of any such notices shall
be deemed to be the date on which such notice is given.

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employer 

  	
   

  	
  Employee

  
	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING,
  INC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Griffith

  	
   

  	
  /s/ Brian Hodous

  
	
   

  	
  Michael Griffith

  	
   

  	
  Brian Hodous

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  July 30,
  2009

  	
   

  	
  Date:

  	
  July 24,
  2009

  
						

 

18

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